Ichigo Preserves and Improves Real Estate[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

September 14, 2016
REIT Issuer
Ichigo Hotel REIT Investment Corporation (3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, Executive Director
www.ichigo-hotel.co.jp/english
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Wataru Orii, President
Inquiries: Hiroto Tajitsu, Head of Administration
Tel: +81-3-3502-4892

Earnings and Dividend Forecast Revisions
for the July 2017 Fiscal Period
Ichigo Hotel REIT has revised up its July 2017 earnings and dividend forecast announced
in the July 22, 2016 release “Earnings and Dividend Forecast Revisions for the January
2017 Fiscal Period and Earnings and Dividend Forecast for the July 2017 Fiscal Period.”
I. July 2017 Earnings and Dividend Forecast Revision
Dividendper Share(yen)Operating
Revenue(million yen)

OperatingProfit(million yen)

RecurringProfit(million yen)

Net
Income(million yen)Previous Announced
Forecast (A)

1,566

855

679

678

2,609

Current Amended
Forecast (B)

1,638

909

732

731

2,838

Difference (B-A)+72+53+52+52+229

+4.5%

+6.1%

+7.6%

+7.6%

+8.7%

774

472

392

391

2,825% Change
Reference:July 2016 Actual

Number of shares outstanding at the end of the July 2017 fiscal period: 257,584 shares
The forecast presented above is based on certain preconditions set out below in“Preconditions for the July 2017 Earnings Forecast.” The actual operating revenue,
operating profit, recurring profit, net income, and dividend per share may vary due tochanges in circumstances such as asset acquisitions and dispositions, tenant turnover,
unexpected maintenance and repair costs and other expenses, and changes in interest
rates. These forecasts should not be construed as a guarantee of such performance orresults. Ichigo Hotel REIT will make a forecast revision should there be a substantial
discrepancy between the forecast and actual operating results.

1

Amounts are rounded off to the nearest whole number. Percentages are rounded to thenearest tenth of a percent.
II. July 2017 Earnings and Dividend Forecast Revision Rationale
Taking into consideration market trends and stronger-than-expected July 2016 operating
results, specifically at eleven hotels with variable rents, Ichigo Hotel REIT is revising up its
July 2017 earnings and dividend forecast. It has also adjusted its July 2017 forecast
preconditions (see below) to reflect the stronger-than-expected contribution of the five
hotels with variable rents (of ten hotels in total) acquired last month.
For the July 2017 period, Ichigo Hotel REIT is now forecasting an increase in operatingrevenue of 72 million yen, an increase in operating expense of 19 million yen, an increasein operating profit of 53 million yen, and an increase in the dividend per share of 229 yen(+8.7%) relative to the previous forecast.
III. January 2017 Earnings and Dividend Forecast
The forecast is currently unchanged.

2Preconditions for the July 2017 Earnings Forecast
Item

Preconditions

Period• February 1, 2017 – July 31, 2017 (181 days)

Portfolio Assets• 19 assets in total. The forecast assumes there will be no additional
acquisitions or sales through July 2017.
• The number of assets may change due to acquisitions or sales.
Within operating revenue, rental income is forecast based on current lease
contracts taking into consideration such factors as tenant trends and market
conditions.1
Forecast Operating Performance
July 2017
Occupancy2

89.1 %

ADR3

8,041 yen

1

The forecast rental income assumes tenants will fully pay their contractual
rents without delays or default.
2
Occupancy is calculated with the following formula:
Occupancy = Total number of guest rooms occupied during the period /(total number of guest rooms x number of days hotel was in operation duringthe period)3
ADR or Average Daily Rate is calculated with the following formula:
ADR = Total sales from accommodation (excluding restaurant charges andother service fees) / number of guest rooms occupied during the period.
Operating
Revenue

Details of July 2017 Rental Income(million yen)

Hotel Name

Smile Hotel Kyoto Shijo
Hotel Vista Premio Kyoto
Nest Hotel Sapporo Ekimae
Chisun Inn Osaka Hommachi
Comfort Hotel Hamamatsu
Nest Hotel Sapporo Odori
Valie Hotel Tenjin
Nest Hotel Osaka Shinsaibashi

3Fixed Rent/
Minimum
Guaranteed
Rent
3075
313555232164

Variable
Rent
150068
39056
42145

Total

181
75
9974
558064210

Hotel Name

Fixed Rent/
Minimum
Guaranteed
Rent

Variable
Rent

Comfort Hotel Central
International Airport

151

0151

30
41
1535
45
181563
69
37
43
00093
111
53
79
45
18
15

150

21

171

32032873

738

1,612

Smile Hotel Tokyo Asagaya
Nest Hotel Naha
Smile Hotel Asakusa
Nest Hotel Matsuyama
Comfort Hotel Okayama
Comfort Hotel Kushiro
Comfort Hotel Suzuka
Other1 (Hotel Wing InternationalNagoya, Hotel Suave Kobe Asuta,and Hotel Livemax NihombashiHakozaki)
Retail2 (Hotel Vista Premio Kyoto,Chisun Inn Osaka Hommachi, andSmile Hotel Tokyo Asagaya)
Total

Total

1

OperatingExpenses

Non-Operating
Expenses

Figures for Hotel Wing International Nagoya, Hotel Suave Kobe Asuta, andHotel Livemax Nihombashi-Hakozaki are included in “Other,” because thehotel operators did not provide consent to disclose hotel-specific data.
2Figures for retail tenants at Hotel Vista Premio Kyoto, Chisun Inn Osaka
Hommachi, and Smile Hotel Tokyo Asagaya are included in “Retail.”• Depreciation: 280 million yen. Depreciation has been calculated using thestraight-line method.
• Property and city planning taxes: 98 million yen.
• Building maintenance and repair expenses are based on what Ichigo
Investment Advisors Co., Ltd., the asset management company of Ichigo
Hotel REIT, estimates will be necessary for each asset during the period.
However, actual expenses for the period may differ significantly from these
forecast amounts for reasons including the variability of maintenance andrepair expenses, one-time costs due to unexpected building damage, etc.
• Rental expenses, Ichigo Hotel REIT’s principal operating expense (otherthan depreciation, see above), are calculated based on historical data
adjusted for anticipated expense variations.
• Actual operating expenses may differ significantly from these assumptions
due to unforeseeable factors.
• Interest expenses and other borrowing-related expenses: 150 million yen.
• Amortization of expenses related to the establishment of Ichigo Hotel REIT
and to new share issuance: 26 million yen. (The 26 million yen includes theamortization of 9 million yen of new share issuance and offering-relatedexpenses.)

4Borrowings• Total borrowings: 19,500 million yen as of July 2017

Number ofShares• 257,584 shares issued and outstanding as of September 14, 2016. Theforecast assumes there will be no additional new issuance of shares throughJuly 2017.

Dividend perShare• The dividend forecast assumes that distributions will comply with thedividend distribution policy stipulated in Ichigo Hotel REIT’s Articles ofIncorporation.
• The dividend per share is subject to change due to factors such as sales of
portfolio assets, changes in rental income associated with tenant turnover,
the occurrence of unexpected maintenance and repair costs, and fluctuationsin interest rates.

Dividend in
Excess ofEarnings perShare• Ichigo Hotel REIT does not plan on making any dividend distribution inexcess of earnings per share or retained earnings.

Other• This forecast assumes that there are no material revisions to laws andregulations, the tax system, accounting standards, listing rules of the Tokyo
Stock Exchange, and rules of the Investment Trusts Association, Japan, andno material changes in the state of the economy and real estate marketconditions.

The forecasts presented above are current figures based on certain preconditions.
Accordingly, the actual operating revenue, operating income, recurring profit, net income,and dividend per share may vary due to changes in circumstances.

5