Make The World
More Sustainable[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, 2021
IssuerIchigo Hotel REIT Investment Corporation (“Ichigo Hotel,” 3463)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Osamu Miyashita, Executive Director
www.ichigo-hotel.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel
Tel: +81-3-3502-4892

July 2021 Fiscal Period Earnings Results Versus Forecastand Forecast Revision for the January 2022 Fiscal Period
Because Ichigo Hotel’s July 2021 earnings results announced today differed from its
forecast in the June 28, 2021 release “Earnings Forecast Revision for the July 2021
Fiscal Period,” Ichigo Hotel is detailing the difference between the results and theforecast below.
Ichigo Hotel is also revising its January 2022 fiscal period earnings forecast announced
in the March 17, 2021 release “January 2021 Fiscal Period Earnings.”
1. July 2021 Earnings Results vs. Forecast(JPY million)

Operating
ProfitRecurring
ProfitForecast (A)

1,112

437

234

233

915

Results

1,117

465

269

268

1,055

Difference(B) - (A)+5+28+35+35+140% Change+0.5%+6.5%+15.0%+15.2%+15.3%

953

371

171

170670(B)

Reference:
July 2020 Actual

Net
IncomeDividendper Share(JPY)

Operating
Revenue

Reference:
Net Income per Share: JPY 1,054
Forecast period-end number of shares outstanding: 254,974 shares

12. January 2022 Earnings Forecast Revision(JPY million)

Operating
ProfitRecurring
Profit1,058395

184

1837191,007336111

184

724

-51

-59-73+1+5% Change-4.8%-14.9%-39.5%

+0.7%

+0.7%

Reference:
January 2021

1,035409210

209823

Previous Forecast(A)
New Forecast(B)
Difference(B) - (A)Net
IncomeDividendper Share(JPY)

Operating
Revenue

Reference: Net Income per Share: JPY 724
Forecast period-end number of shares outstanding: 254,974 shares
Note: The new forecast is based on the “Preconditions for the January 2022 Earnings
Forecast” on page 4. Actual results may vary due to changes in circumstances, so these
forecasts should not be construed as a guarantee of such results. Ichigo Hotel will make aforecast revision should a material discrepancy emerge between this forecast and results.
3. July 2021 Earnings Results and January 2022 Earnings Forecast Revision Rationale
July 2021 Earnings Results
As stated in the Preconditions for the July 2021 Fiscal Period in the June 28, 2021 release“Earning Forecast Revision for July 2021 Fiscal Period,” Ichigo Hotel expected to record
operating expenses of JPY 37.8 million for Covid-related hotel operator support and/or
potential rent reductions. However, Ichigo Hotel did not incur such expenses because norent reductions were granted.
As a result, July 2021 operating revenue, operating profit, recurring profit, net income,and dividend per share increased by JPY 5 million (+0.5%), JPY 28 million (+6.5%),
JPY 35 million (+15.0%), JPY 35 million (+15.2%), and JPY 140 (+15.3%),
respectively, versus the previous forecast.
January 2022 Earnings Forecast Revision Rationale
Although hotel demand is gradually recovering on the back of the Covid vaccine rollout(57.6% complete for first-time vaccination as of September 1, 2021), a full-blown
recovery is expected to take more time.
Given these conditions, Ichigo Hotel is conservatively adjusting its forecast for variable
rent for the January 2022 fiscal period (August 1, 2021 – January 31, 2022) and theinterest rate for a debt refinancing scheduled in November.
As a result, January 2022 operating revenue, operating profit, and recurring profit areexpected to decrease by JPY 51 million (-4.8%; comprising a JPY 51 million decrease invariant rent and a JPY 0.3 million increase in fixed rent), JPY 59 million (-14.9%), andJPY 73 million (-39.5%), respectively, versus the previous forecast announced on March17, 2021.
On the other hand, net income and dividend per share are expected to increase by JPY 1
million (+0.7%) and JPY 5 (+0.7%), respectively, versus the previous forecast due to a
JPY 74 million extraordinary gain scheduled to be reported due to Ichigo Hotel reaching2

a settlement with a former hotel operator on an eviction lawsuit.
Should any further change to the outlook for operating results arise, Ichigo Hotel willpromptly disclose the details.

3Preconditions for the January 2022 Earnings Forecast
Preconditions
PeriodNumber ofHotels

 August 1, 2021 to January 31, 2022 (184 days)
 23 hotels
 The Chisun Inn Osaka Hommachi had an operator change on March 17,2021 and was rebranded and reopened as The OneFive Osaka Sakaisuji
on September 1, 2021.
Within operating revenue, rental income is forecast based on current lease
contracts, taking into consideration such factors as hotel and market
conditions.1
Forecast Operating Performance23Occupancy
ADR4

January 2022 Fiscal Period
63.9%
JPY 4,548

1

OperatingRevenue

The forecast rental income assumes operators and tenants will fully pay
their contractual rents without delay or default.
2The 16 variable rent hotels are: Smile Hotel Kyoto Shijo, Nest Hotel
Sapporo Ekimae, Chisun Inn Osaka Hommachi, Nest Hotel Sapporo
Odori, The OneFive Fukuoka Tenjin, Nest Hotel Osaka Shinsaibashi,
Smile Hotel Tokyo Asagaya, Nest Hotel Matsuyama, Court HotelKurashiki, Hotel Wing International Nagoya, Hotel Wing InternationalKobe Shin Nagata Ekimae, Nest Hotel Kumamoto, Valie HotelHiroshima, HOTEL EMIT SHIBUYA, The OneFive Okayama, andCapsule Plus Yokohama. However, data for Capsule Plus Yokohama isexcluded from the above forecast because the operator did not giveconsent to disclose forecasts.
3
Occupancy is calculated with the following formula:
Occupancy = Total number of guest rooms occupied during the period /(total number of guest rooms * number of days hotel was in operation
during the period)
4
ADR or Average Daily Rate is calculated with the following formula:
ADR = Total sales from accommodation (excluding restaurant charges
and other service fees) / number of guest rooms occupied during theperiod
Details of the January 2022 Rental Income Forecast by Hotel(JPY million)
Fixed Rent/
Minimum Variable
Total
Hotel Name
Guaranteed Rent
Rent
Smile Hotel Kyoto Shijo
34–
34
Nest Hotel Sapporo Ekimae
32–
32
Chisun Inn Osaka Hommachi–––
Comfort Hotel Hamamatsu
55–55

4

Nest Hotel Sapporo Odori
The OneFive Fukuoka Tenjin
Nest Hotel Osaka Shinsaibashi
Comfort Hotel Central International
Airport
Smile Hotel Tokyo AsagayaNest Hotel Matsuyama
The OneFive Okayama
Comfort Hotel Kushiro
Comfort Hotel Suzuka
Court Hotel Kurashiki
Nest Hotel Kumamoto
Valie Hotel Hiroshima
HOTEL EMIT SHIBUYAOther1Total

26
2665

–––

26
26
65

151

–151

59
35
72
18
15
28
27
22
44
216
933

––––––
1
27
–
1
30

59
35
72
18
15
28
28
50
44
217
963

1

Figures for Hotel Wing International Nagoya, Hotel Wing International
Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki,
Capsule Plus Yokohama, Urbain Hiroshima Executive, andWashington Hotel Plaza Shimonoseki Eki Nishi are included in“Other” because the hotel operators did not provide consent to disclose
hotel-specific data.
 Retail: JPY 29 million of rental income (including utilities income) fromretail tenants at Chisun Inn Osaka Hommachi, Hotel Wing International
Kobe Shin Nagata Ekimae, and Smile Hotel Tokyo Asagaya, and frombanquet rooms at Nest Hotel Kumamoto.

OperatingExpenses

 Depreciation: JPY 351 million. Depreciation has been calculated using
the straight-line method.
 Property and city planning taxes: JPY 119 million
 Building maintenance and repair expenses are based on what Ichigo
Investment Advisors, the asset management company of Ichigo Hotel,
estimates will be necessary for each hotel during the period. However,actual expenses for the period could differ significantly from these
forecast amounts for reasons including the variability of maintenanceand repair expenses, one-time costs due to unexpected building damage,etc.
 Rental expenses, Ichigo Hotel’s principal operating expense (other thandepreciation, see above), are calculated based on historical data adjusted
for anticipated expense variations.
 Actual operating expenses may differ significantly from theseassumptions due to unforeseeable factors.
 Other expenses: JPY 37.7 million as Covid-related hotel operator
support and/or potential rent reductions.
 SG&A expenses: JPY 3.1 million for engineering report costs and JPY
0.5 million for environmental certification costs.

5

NonOperatingExpenses

 Interest expenses and other borrowing-related expenses: JPY 225
million An extraordinary gain of JPY 74 million is expected as a result ofreaching a settlement with Hotel Tetora Group, the former operator ofExtraordinary
the Hotel Suave Kobe Asuta (current name: Hotel Wing InternationalGains
Kobe Shin Nagata Ekimae), against which Ichigo Hotel filed an eviction
lawsuit because of delinquent rent.
Borrowings

 Total borrowings: JPY 25.97 billion as of January 31, 2022 based on theassumption that JPY 7 billion of short-term borrowing due November
30, 2021 will be refinanced.

Number ofShares 254,974 shares issued and outstanding as of September 14, 2021. The
forecast assumes there will be no additional new issuance of shares
and/or cancellation of shares through January 31, 2022.

Dividend The dividend forecast assumes that dividends will comply with thedividend distribution policy stipulated in Ichigo Hotel’s Articles ofIncorporation.

Dividend in
Excess ofEarnings

 Ichigo Hotel does not plan on paying any Dividend in Excess ofEarnings.

Other This forecast assumes that there are no material revisions to laws andregulations, the tax system, accounting standards, listing rules of theTokyo Stock Exchange, and rules of the Investment Trusts Association,Japan, and no material changes in the state of the economy and realestate market conditions.
 Given ongoing Covid uncertainty, these earnings forecasts are subject tochange.

6