Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Investment
Invincible Corporation

Financial Summary
for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)
August 24, 2023

Name
Representative
Stock Listing
Securities CodeURL
Contact

:
:
:
:
:
:

Invincible Investment Corporation (“INV”)
Naoki Fukuda, Executive Director
Tokyo Stock Exchange8963
https://www.invincible-inv.co.jp/en/
Consonant Investment Management Co., Ltd.
(Asset Manager of INV)
Jun Komo, General Manager of Planning Department
Tel. +81-3-5411-2731

Start date fordividend distribution: September 21, 2023

This English language notice is a translation of the Japanese-language notice released on August 24, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japaneselanguage notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completenessof this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between thistranslation and the Japanese original, the latter shall prevail in all respects.

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

1.

(Figures are rounded down to the nearest JPY million)
Financial Results for the Fiscal Period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)(1)

Operating Results(Percentages indicate percentage change from the preceding period)
Operating Revenues
JPY million

Fiscal period ended
June 30, 2023
Fiscal period ended
December 31, 2022

Ordinary Income

Net Income%

JPY million%

JPY million%

JPY million%

15,91433.4

10,356

65.5

8,914

75.6

8,913

75.6

11,929

55.3

6,257

195.9

5,075

399.7

5,075

400.0

Ordinary Income /Total Assets

Ordinary Income /Operating Revenues

Net Income per Unit

Net Income /Unitholders’ Equity

JPY

%

%

%

1,462

3.5

1.8

56.0

832

2.0

1.0

42.5

Fiscal period ended
June 30, 2023
Fiscal period ended
December 31, 2022
(2)

Operating Income

Distributions
Distribution(Excluding excess profit distribution)

Per Unit
Fiscal period ended
June 30, 2023
Fiscal period ended
December 31, 2022

Total

Excess Profit Distribution
Per Unit

Dividend Payout
Ratio

Distribution/ Net Assets

Total

JPY

JPY million

JPY

JPY million

%

%

1,464

8,925

-

-

100.1

3.5

832

5,072

-

-

99.9

2.0

(Note 1) Dividend Payout Ratio is calculated in accordance with the following formula and is rounded to the nearest one decimal place:
Dividend Payout Ratio = Distribution Amount (Excluding excess profit distribution) / Net Income × 100(Note 2) Distribution / Net Assets is calculated based on the figures excluding excess profit distribution.

(3)

Financial Position
Total Assets

Fiscal period ended
June 30, 2023
Fiscal period ended
December 31, 2022
(Note)(4)

JPY million

Net Assets / Total%
AssetsNet Assets per Unit

JPY million

Net Assets

496,819

254,024

51.1

41,665494,237

250,32150.6

41,058JPY

Net Assets per Unit is calculated based on the number of investment units issued and outstanding at the end of each fiscal
period and is rounded to the nearest yen.

Cash Flows
Cash Flows fromOperating
Activities

Cash Flows from
Investment
Activities

Cash Flows from
Financing
Activities

Closing Balance ofCash and
Cash Equivalents

JPY million

JPY million

JPY million

JPY million

Fiscal period ended
June 30, 2023

13,782924-7,18828,041

Fiscal period ended
December 31, 2022

6,670

-993

-2,17820,521

2

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

2.

Forecasts for the Fiscal Periods ending December 31, 2023 (from July 1, 2023 to December 31, 2023) and the Fiscal
Periods ending June 30, 2024 (from January 1, 2024 to June 30, 2024)

Operating
Revenues
JPY
millionFiscal period
ending17,786
December 31, 2023
Fiscal period
ending18,000June 30, 2024

Operating
Income(Percentages indicate percentage change from the preceding period)
Distribution per Excess Profit
Ordinary
Unit (excluding
Distribution per
Net Income
excess profit
IncomeUnit
distribution)

JPY
million%JPY
million%JPY
million

%

JPY

JPY

11.8 11,255

8.7

9,586

7.5

9,586

7.5

1,441

-

1.2 11,348

0.8

9,855

2.8

9,854

2.8

1,466

-

%

(Reference) Estimated net income per unit for the fiscal periods ending December 31, 2023 and the fiscal periods ending June 30, 2024 are
JPY 1,422.and JPY 1,462.

※Others(1) Changes in Accounting Policies, Accounting Estimates or Restatements(a) Changes in Accounting Policies due to Revisions to
Accounting Standards and Other Regulations

None(b) Changes in Accounting Policies due to Other Reasons

None(c) Changes in Accounting Estimates

None(d) Restatements

None(2) Number of Investment Units Issued and Outstanding(a) Number of Units Issued and Outstanding

June 30, 2023

6,096,840 December 31, 2022 6,096,840

June 30, 2023

0 December 31, 2022

as of the End of the Fiscal Period (Including Treasury Units)(b) Number of Treasury Units as of the End of the Fiscal Period(Note) Please refer to “Notes Related to Per Unit Information” regarding the number of investment units which is the basis for the
calculation of net income per unit.

・ Financial Summary report is not subject to audit procedure by certified public accountants or audit corporations.
・ Special Consideration
The forward-looking statements contained in this financial summary report are based on the information
currently available to us and certain assumptions which we believe are reasonable. Actual operating performance
may differ significantly due to factors we cannot predict as of the date of this document, including gains or losses
from the disposition of properties, repayment of borrowings, decreases in rents and changes in operating
conditions. Unless otherwise specified herein, amounts less than JPY 1 are rounded down, and ratios are rounded
to the nearest one decimal place.

30Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

1. Operating Conditions(1) Operating Conditionsa

Overview of the Fiscal Period Ended June 30, 2023

(a)

Main Trends of INV

INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation Act(Act No. 198 of 1951, as amended). In May 2004, INV was listed on the Osaka Securities Exchange (application
for delisting was made in August 2007), and in August 2006 was listed on the Real Estate Investment and Trust
Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).
After the absorption-type merger with LCP Investment Corporation (“LCP”) was implemented on February 1,
2010, INV issued new investment units through a third-party allotment on July 29, 2011 and refinanced its debt.
Calliope Godo Kaisha (“Calliope”), an affiliate of the Fortress Investment Group LLC (“FIG” and together with
Calliope and other affiliates of FIG, collectively the “Fortress Group”) was the main allottee, and the sponsor
changed to the Fortress Group.
Ever since the commencement of sponsorship from the Fortress Group (Note 1), INV has been focusing its efforts
on improving the profitability of its portfolio and establishing a revenue base in order to secure stable
distributions, and has strengthened the lender formation through new borrowings and the refinancing of existingbank borrowings, thereby creating a financial base for external growth. With this platform as a base, in June
2014, Consonant Investment Management Co., Ltd., the asset manager to which INV entrusts the managementof its assets (“CIM”) revised the Investment Guidelines for INV, positioned hotels as a core asset class alongsideresidential properties with a view towards expanding investments in the hotel sector in which demand isforecasted to rise going forward, and has expanded its portfolio.
INV's portfolio at the end of the Fiscal Period ended June 30, 2023 (the “Reporting Period”) comprised of 128
properties (86 hotels (Note 2) (Note 3), 41 residential properties and one retail facility) with a total acquisition
price of JPY 491,416 million (Note 4). Furthermore, INV’s hotel portfolio has the largest asset size (Note 5) of
JPY 450,631 million (86 properties, 15,597 rooms) among all J-REITs (real estate investment corporations which
listed on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market, hereinafter the same shallapply) hotel portfolios including Hotel J-REITs (Note 6) .
(Note 1) Calliope transferred 80.0% of issued shares of CIM to Fortress CIM Holdings L.P., a subsidiary of
SoftBank Group and 20.0% to SoftBank Group Corp. (“SoftBank Group”) on March 29, 2018, but the
SoftBank Group transferred its issued shares of CIM to Fortress CIM Holdings L.P. on May 23, 2023.
As of the date of this document, SoftBank Group indirectly owns 100% of issued shares of CIM throughFortress CIM Holdings L.P. The SoftBank Group announced that it has entered into a definitive
agreement to transfer its interest in the indirect parent company of Fortress CIM Holdings L.P. to
Mubadala Capital and others during the first quarter of 2024.
(Note 2) The preferred equity interest held by INV is counted as one property. Such preferred equity interest
issued by a special purpose company (tokutei mokuteki kaisha, “TMK”) refers to 178,458 units of thepreferred equity interest issued by Kingdom Special Purpose Company (equivalent to 49.0% of theoutstanding preferred equity interest), which owns the trust beneficiary interest of the Sheraton
Grande Tokyo Bay Hotel as an underlying asset. The property is classified as a hotel, based on theuse of Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest, andINV’s investment amount of the preferred equity interest is used as the acquisition price of thepreferred equity interest, unless otherwise stated. The “underlying asset” refers to the real estate or
the real estate related assets owned by an anonymous association (tokumei kumiai, “TK”) operator of
TK interest or a TMK relating to the preferred equity interest which INV owns, thus the real estate or
the real estate related assets which will be the revenue source of INV. Hereinafter the same shallapply.
(Note 3) From September 28, 2018 (Cayman Island local time; September 29, 2018 in Japan local time), INV
owned 100% of the TK interest in Seven Mile Resort Holdings Ltd. (the “Cayman SPC”), a Cayman
Islands special purpose company that holds leasehold interests in Westin Grand Cayman Seven Mile
Beach Resort & Spa and Sunshine Suites Resort (collectively, the “Cayman Hotels”) and ancillary assets
4

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

as underlying assets. However, INV implemented the investment structure change (the “Structure
Change” in some cases hereinafter) regarding the Cayman Hotels on May 9, 2019 (Cayman Island
local time; May 10, 2019 in Japan local time) and has directly held the Leasehold Interests, etc. of the
Cayman Hotels thereafter. Both of the TK interest and the Cayman Hotels are counted as two
properties before and after the Structure Change. In addition, the “Leasehold Interests, etc.” means
leasehold interests (rights equivalent to long-term real estate leases on land and buildings under the
British Cayman laws) and furniture, fixtures, equipment, ornaments, kitchen instrument, and otherassets required for hotel operations. Hereinafter the same shall apply.
(Note 4) Due to the Structure Change, the book value of the leasehold interests of the Cayman Hotels recordedby the Cayman SPC as of May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time),
when INV succeeded the leasehold interests of the Cayman Hotels from the Cayman SPC via
distribution in kind in connection with the termination of TK agreement, is deemed as the acquisition
price of the Cayman Hotels. The book value is converted into JPY amount via exchange rate of USD
1=JPY 110.45 based on the foreign exchange forward contracts executed on July 26, 2018 andimplemented on September 26, 2018 in connection with the investment in the TK interest by INV.
Hereinafter the same shall apply.
(Note 5) Hotel J-REIT refers to four J-REITs that invest in hotels and hotel related facility defined by The
Association for Real Estate Securitization (ARES) as of June 30, 2023.
(Note 6) “The largest asset size … among all J-REIT hotel portfolios” refers to the total acquisition price of 86
hotels owned by INV as compared with the total acquisition price of hotels (including inns and otheraccommodation facilities) owned by listed investment corporations other than INV as of June 30, 2023.
(b)

Operational Environment and Performance

During the Reporting Period, the Japanese economy maintained a gradual recovery trend, mainly driven by
domestic demand and the normalization of economic activities, as the classification of COVID-19 under the
Infectious Disease Control Law was lowered from the previous Class 2 equivalent to Class 5, the same category
as seasonal influenza, effective May 8, 2023.
In this environment, real GDP (second preliminary report) for the January-March period of 2023 increased 0.7%
from the previous quarter, marking the second consecutive quarter of growth following the October-December
period of 2022.
The number of inbound visitors in the Reporting Period showed a remarkable recovery trend. The cumulative
number of inbound visitors from January to June 2023 was 10,712,000 (estimated by the Japan National
Tourism Organization), far exceeding the 507,000 in the same period in 2022. Compared to 2019, prior to the
COVID-19 pandemic, the inbound visitor figures in June 2023 decreased by 28.0% and the inbound visitor
figures in the period from January to June decreased by 35.6%. Moreover, according to the Japan National
Tourism Organization's Survey, the breakdown of travel spending of inbound visitors from April to June 2023
is estimated to be 1,205.2 billion yen (first preliminary report), or 95.1% of the same period in 2019. Regarding
the employment trends, the unemployment rate for May 2023 was 2.6%, the same level of the previous month.
The effective job openings ratio was 1.31 times, the same level of the previous month and 0.06 points higher
than the rate in May 2022, indicating that the employment situation has not worsened.
The portfolio NOI (Note 1) increased by 194.2% or JPY 9,587 million compared to the same period in theprevious year (the June 2022 fiscal period) to JPY 14,523 million. The hotel portfolio NOI increased by JPY
9,547 million. The residential and retail portfolio NOI increased by JPY 39 million. Compared to theDecember 2019 fiscal period prior to the COVID-19 pandemic, the portfolio NOI decreased by 1.4% or JPY 211
million, of which the hotel portfolio NOI increased by JPY 1,255 million and the residential and retail portfolio
NOI decreased by JPY 1,467 million due to asset sales.
Commentary on hotel and residential performance is as described below.
Each performance metric of the domestic hotel portfolio increased significantly over the same period of theprevious year's results and has recovered to levels close to 2019, before the COVID-19 pandemic, due to thegovernment's travel subsidy program "National Travel Discount Campaign" and increased inbound demand.
The GOP for the Reporting Period of the 75 domestic hotels (Note 3) owned by INV increased by 228.7%
compared to the same period in the previous year (figures exclude nine domestic hotels with fixed-rent lease5

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

agreements among the 84 domestic hotels owned by INV as of the end of the Reporting Period, including
Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by
INV). The 75 domestic hotels recorded an occupancy rate (Note 4) of 80.7%, ADR (Note 5) of JPY 10,868, and
RevPAR (Note 6) of JPY 8,772. Compared to the June 2019 fiscal period prior to the COVID-19 pandemic, theGOP decreased by 9.9%, the occupancy rate decreased by 6.1pt, ADR increased by 7.5%, and RevPAR is thesame level.
The Cayman Hotels recorded an average occupancy rate of 77.3%, ADR of USD 537, and RevPAR of USD 415
for the Reporting Period and the figures significantly exceeded the same period in the previous year.
Compared to the June 2019 fiscal period prior to the COVID-19 pandemic, the occupancy rate decreased by
12.0pt, ADR increased by 29.2%, and RevPAR increased by 11.8%.
Regarding the residential portfolio (Note 7), the occupancy rate (Note 8) of 41 residential properties decreased
by 0.5 points from 96.4% at the end of the previous fiscal period to 95.9% at the end of the Reporting Period.
The average occupancy rate (Note 8) increased by 0.5 points YoY to 96.5%. The NOI (Note 9) for the Reporting
Period increased by 1.2% YoY.
In the Reporting Period, INV realized a rent increase for 39.3% (based on the number of contracts) of the newresidential lease contracts, however the new rent decreased by 0.4% compared to the previous rent across all
new leases (Note 10). INV achieved a rent increase for 43.7% (based on the number of contracts) of contract
renewals with an average rent increase of 1.8% compared to the previous rent across all renewal leases, while
maintaining a high contract renewal rate (Note 11) of 74.3%. Combined, new lease and renewal lease rents
were signed at 1.0% higher than the previous leases. The average rent per tsubo per month (Note 12) for theReporting Period increased by 0.7% YoY to JPY 9,190.
The total appraisal value of 127 properties was JPY 560,963 million (one out of the 128 properties owned by
INV at the end of the Reporting Period is excluded from the appraisal calculation: Sheraton Grande Tokyo Bay
Hotel (preferred equity interest) for which the appraisal value of such interest is not available). The portfolio
has an unrealized gain of JPY 120,464 million (Note 13) and an unrealized gain ratio of 27.3% (Note 13). The
total appraisal value of 127 properties which were owned throughout the Reporting Period increased by 5.3%
from JPY 532,570 million at the end of the December 2022 fiscal period to JPY 560,963 million at the end of theReporting Period.
Key Performance Indicators of 75 Domestic Hotel Properties (Note 2)
June 2023
fiscal period

Year-on-year change

vs 1H 2019

Occupancy Rate (Note 4)

80.7%+19.2pt-6.1ptADR (JPY) (Note 5)

10,868+44.8%+7.5%

RevPAR (JPY) (Note 6)

8,772+90.1%+0.0%

GOP (JPY million) (Note 3)

10,424+228.7%-9.9％

Key Performance Indicators of Cayman Hotels
June 2023
fiscal period

Year-on-year change+37.6pt-12.0pt

537+45.1%+29.2%

415+182.2%+11.8%

29,182,631+240.9%+9.4%

Occupancy Rate (Note 4)

77.3%

ADR (USD) (Note 5)
RevPAR (USD) (Note 6)
GOP (USD) (Note 3)

vs 1H 2019

Key Performance Indicators of 41 Residential Properties (Note 7)
June 2023
fiscal period

Year-on-year change

Occupancy Rate (Note 8)

96.5%+0.5ptAverage Rent per Tsubo per Month(JPY) (Note 12)

9,190

+0.7%

6

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

NOI (JPY million) (Note 9)

1,126

+1.2%

(Note 1) “NOI” for the hotel properties is calculated in accordance with the following formula:
NOI＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses + Dividend on thepreferred equity interest (TMK dividend) + (Management Contract Revenue of the Cayman Hotels‐Management Contract Expense)(Note 2) Of the 84 hotels held as of the end of June 2023 (including the Sheraton Grande Tokyo Bay Hotel, theunderlying asset of the preferred equity interest of TMK owned by INV), the following nine hotels
with fixed-rent lease agreements etc. are excluded: Super Hotel Shinbashi/Karasumoriguchi, Comfort
Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi, Super Hotel JR Ueno-iriyaguchi, Comfort
Hotel Kurosaki, Comfort Hotel Maebashi, Comfort Hotel Tsubame-Sanjo, Comfort Hotel Kitami and
Takamatsu Tokyu REI Hotel. In addition, the figures for the properties acquired after July 2019 are
calculated on the assumption INV had acquired those properties on July 1, 2019, using the actual
figures provided by the sellers of such properties for the period before the acquisition. "D48
Takamatsu Tokyu REI Hotel" changed its contract with its major tenant, Tokyu Hotels Corporation,
to fixed-rent with variable rent lease from April 25, 2023. However, in view of the continuity of
disclosed data, this hotel will continue to be excluded. Hereinafter the same shall apply.
(Note 3) “GOP” means the gross operating profit, and is the amount remaining after deducting costs of hotel
operations (the personnel, utility and advertising expenses and other expenses) and the management
services fee to operators (if any) from the hotel’s revenues. GOP for each fiscal period ended June
2020 and onwards includes the amount of employment adjustment subsidies received by the hotel
operators for the respective fiscal periods. In addition, GOP for the Sheraton Grande Tokyo Bay
Hotel has been multiplied by 49%, or INV’s ownership ratio of the preferred equity interest.
Hereinafter the same shall apply.
(Note 4) “Occupancy rate” for the hotel properties is calculated in accordance with the following formula:
Occupancy rate = total number of occupied rooms during a certain period / total number of rooms
available during the same period (number of rooms x number of days)
Hereinafter the same shall apply.
(Note 5) “ADR” means average daily rate, and is calculated by dividing total room sales (excluding service
fees) for a certain period by the total number of days per room for which each room was occupied
during the same period. Hereinafter the same shall apply.
(Note 6) “RevPAR” means revenues per available room per day, and is calculated by dividing total room sales
for a certain period by total number of rooms available (number of rooms x number of days) during
the same period, and is the same as the figure obtained by multiplying ADR by occupancy rates.
Hereinafter the same shall apply.
(Note 7) Based on the 41 residential properties owned as of the end of June 2023. Hereinafter the same shallapply.
(Note 8) “Occupancy Rate” and “Average Occupancy Rate” for the portfolio or the residential properties arecalculated by dividing the sum of total leased area by the sum of total leasable area at the end of eachmonth during the relevant period. Hereinafter the same shall apply.
(Note 9) For the comparison of NOI for the residential properties, one-off insurance-related revenues andexpenses are excluded. Hereinafter the same shall apply.
(Note 10) Increase or decrease in the sum of monthly rents on new or renewal contracts, or the total of both,compared with the sum of previous rents. Hereinafter the same shall apply.
(Note 11) Renewal rate is calculated by the number of renewed contracts during the relevant period divided by
the number of contracts due up for renewal during the relevant period.
(Note 12) “Average Rent per Tsubo per Month” is calculated by dividing the total rental revenue (includingcommon area charges) for each month by the sum of total leased area (tsubo) at the end of each month
during the relevant period.
(Note 13) The unrealized gain is calculated using the following formula: the appraisal value as of the end of theReporting Period – book value as of the end of the Reporting Period.
The unrealized gain ratio is calculated using the following formula: the unrealized gain / book value
as of the end of the Reporting Period.
(c)Overview of Fund Raising7

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY
239,190 million and the Interest-Bearing Debt ratio (Note 1) and LTV (appraisal value basis) (Note 2) were48.1% and 42.7% respectively, as of the end of the Reporting Period, with an average interest rate (Note3) of 0.43%.
(Note 1) Interest-Bearing Debt ratio uses the calculation formula below:
Interest-Bearing Debt ratio = total outstanding interest-bearing debt (excluding short-term
consumption tax loan) / total assets x 100(Note 2) LTV (appraisal value basis) uses the calculation formula below:
LTV = total outstanding interest-bearing debt (excluding short-term consumption tax loan)/ total appraisal value (*) x 100(*) Since appraisal value for Sheraton Grande Tokyo Bay Hotel (preferred equity interest) is notavailable, the acquisition price of the preferred equity interest (JPY 17,845 million) is deemed
as appraisal value of Sheraton Grande Tokyo Bay Hotel (preferred equity interest). For
appraisal value of the Cayman Hotels, USD is converted into JPY amount via the forward
exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contract enteredinto on July 26, 2018 and executed on September 26, 2018.
(Note 3) The average interest rate (annual rate) is calculated by the weighted average based on theoutstanding balance of borrowings and rounded to two decimal places.
(i)

Borrowing of Funds

INV borrowed New Syndicate Loan (006) on January 16, 2023 (total amount borrowed: JPY 10,408 million;interest rate: variable interest rate of 1-month JPY TIBOR plus 0.25000% for a duration of one year), which wasarranged by Mizuho Bank, Ltd., Term Loan (011) on January 24, 2023 (total amount borrowed: JPY 1,700 million;interest rate: variable interest rate of 1-month JPY TIBOR plus 0.25000% for a duration of one year), which wasarranged by MUFG Bank, Ltd. and Term Loan (012) on January 24, 2023 (total amount borrowed: JPY 6,800
million; interest rate: variable interest rate of 1-month JPY TIBOR plus 0.25000% for a duration of one year),which was arranged by Sumitomo Mitsui Trust Bank, Limited in order to repay one of the tranches of New
Syndicate Loan (L) in the amount of JPY 4,943 million due on January 16, 2023, one of the tranches of New
Syndicate Loan (M) in the amount of JPY 5,796 million due on January 16, 2023, Term Loan (001) in the amountof JPY 1,700 million due on January 24, 2023 and Term Loan (002) in the amount of JPY 6,800 million due on
January 24, 2023.
Moreover, INV borrowed New Syndicate Loan (007) on March 14, 2023 and March 16, 2023 (total amountborrowed: JPY 13,980 million; interest rate: variable interest rate of 3-month JPY TIBOR plus 0.35000% for aduration of three years) and New Syndicate Loan (008) on March 14, 2023 (total amount borrowed: JPY 3,039
million; interest rate: variable interest rate of 1-month JPY TIBOR plus 0.25000% for a duration of one year),which were arranged by Mizuho Bank, Ltd., in order to repay New Syndicate Loan (001) in the amount of JPY
12,156 million due on March 14, 2023, New Syndicate Loan (002) in the amount of JPY 3,039 million and one of
the tranches of New Syndicate Loan (Q) in the amount of JPY 2,273 million due on March 16, 2023.
Furthermore, INV borrowed Term Loan (013) on June 19, 2023 (total amount borrowed: JPY 1,000 million;interest rate: variable interest rate of 3-month JPY TIBOR plus 0.30000% for a duration of three years), which
was arranged by Development Bank of Japan, Inc. in order to repay Term Loan (004) in the amount of JPY 1,000
million due on June 17, 2023.
In addition, INV borrowed Term Loan (014) on June 27, 2023 (total amount borrowed: JPY 500 million; interest
rate: variable interest rate of 3-month JPY TIBOR plus 0.30000% for a duration of three years), which wasarranged by MUFG Bank, Ltd. and Term Loan (015) on June 27, 2023 (total amount borrowed: JPY 1,000 million;interest rate: variable interest rate of 1-month JPY TIBOR plus 0.25000% for a duration of one year), which wasarranged by SBI Shinsei Bank, Limited in order to repay Term Loan (H) in the amount of JPY 1,500 million due
on June 27, 2023.

(ii)

Prepayment of Loan
8

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

INV's loans of New Syndicate Loan (005) (in the amount of JPY 639 million) and New Syndicate Loan (008) (inthe amount of JPY 3,039 million) were prepaid on June 30, 2023 from cash on hand.
(iii)

Issuance of Investment Corporation Bonds

INV issued investment corporation bonds as follows for the purpose of raising a portion of funds for repaymentof existing borrowings while at the same time lengthening the average maturity period of its debt and further
diversifying repayment dates for interest-bearing debt.
Bond Series

Issue Date

Seventh Series Unsecured
Investment Corporation Bonds(with pari passu conditions among
specified corporate bonds)

May 25,2023

Eighth Series Unsecured
Investment Corporation Bonds(with pari passu conditions among
specified corporate bonds)

May 25,
2023

(d)

Issue
Interest Rate Redemption
AmountDate(JPY million) (annual rate)

5,000

1,200

Abstract

1.000%

May 25,2026

Unsecured /Unguaranteed
Rating: A(JCR)

1.200%

May 25,2028

Unsecured /Unguaranteed
Rating: A(JCR)Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period increased by
JPY 3,985 million from the previous period (+33.4%) to JPY 15,914 million, resulting in a net income of JPY
8,913 million, an increase of JPY 3,838 million from the previous period (+75.6%). Unappropriatedretained earnings including the retained earnings carried forward from the preceding fiscal period (JPY8,669 million) is JPY 17,583 million. INV has decided to set the distribution per unit (excluding excess
profit distribution) of JPY 1,464, which is the net income per unit (JPY 1,462) plus the reversal of retained
earnings (JPY 2 per unit).

9Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)b

Outlook for the Fiscal Period Ending December 31, 2023

The Japanese economy is gradually recovering due to the resumption of economic activity through the “PostCorona (COVID-19)” lifestyle and the recovery of inbound consumption, which is supported by thedepreciation of the yen along with the pent-up demand for travel. On the other hand, there is a risk that a
slowdown in overseas economies may trigger a temporary slowdown in domestic economic growth, so it isnecessary to pay close attention to the impact of fluctuations in the financial and capital markets andinternational affairs.
In the hotel market, the recovery trend is expected to continue for domestic and inbound demand in both
leisure and business segments. In particular, travelers from China, who accounted for about 30% of all
inbound travelers in 2019, have yet to recover even after the easing of border measures in October 2022.
However, there was an announcement that the Chinese government has lifted the ban on group travel toJapan in August 2023, and a gradual recovery is expected in the near future.
In the rental housing market, lifestyle changes due to the impact of COVID-19 infections are expected to affecttenant trends, and INV will keep an eye on such trends.
(a)Future operational policy and issues to be addressed

Since July 2011, INV has focused on improving the profitability of its portfolio and strengthening its financialbase in order to enhance unitholder value with the Fortress Group as its sponsor. In addition to access to
Fortress’ global real estate expertise, INV will actively promote efforts to acquire new demand under theenvironment of "Post-Corona" and flexibly respond to changes in the external environment whileemphasizing customer safety and security. Going forward, INV will continue to implement various
strategies for further growth and financial stability, including the following measures.
Further external growth utilizing sponsor supportAsset recycling: property acquisitions using the proceeds from salesInternal growth at hotels through reducing costs, stimulating existing demand and creating new
demand by collaborating with hotel operators

Further internal growth at residential properties

Diversification of funding sources through the issuance of investment corporation bonds including
Green Bonds

Details of the future growth strategy are as follows.
(i)

External growth strategy
New Property Acquisitions
As its basic strategy, INV had moved forward with the acquisition of new properties focusing on hotels,
where continued growth in portfolio revenues would be anticipated, and residential properties, especiallywhere rental growth could be achieved, to build a portfolio with a good balance between growth andstability.
In regard to hotels, INV will take into consideration demands of business and leisure customers in nearby
areas, and leasing contract types when making investment decisions, with the aim of acquiring properties
where growth and stability of GOP and rental revenue are forecasted to increase.
In regard to residential properties, INV will analyze occupancy rates, rental market trends, the presenceof competing properties among other factors, and consider acquiring properties with strong
competitiveness, in which it believes it can achieve increases in rent.

10Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Properties Acquired from affiliates of the Fortress Group (as of the date of this document)
Year

Properties acquired

Total acquisition price

2012
2014

24 residential properties (Note 1)
20 hotels

JPY 14,043 million (Note 1)
JPY 45,373 million

2015

14 hotels andthree residential properties (Note 2)

JPY 45,238 million (Note 2)

2018

11 hotels andtwo residential properties
six hotels andtwo residential properties (Note 3)
12 hotels (Note 4)

JPY 104,280 million (Note 4)

2019
2020

18 hotels
Two hotels

JPY 82,646 million
JPY 16,236 million

2016
2017

JPY 92,804 million
JPY 90,006 million (Note 3)

2023(Note 1)
(Note 2)
(Note 3)(Note 4)Six hotels
JPY 57,230 million
120 properties
JPY 547,858 million
Total(of which 89 are hotels and 31 are(of which hotels: JPY 496,220 million;
residential properties)
residential: JPY 51,638 million)
Of the properties acquired from affiliates of the Fortress Group, 15 residential properties have beensold.
Of the properties acquired from affiliates of the Fortress Group, one residential property has beensold.
Of the properties acquired from affiliates of the Fortress Group, one residential property has beensold. Sheraton Grande Tokyo Bay Hotel was acquired through a special purpose company, of which
INV owns the preferred equity interest, and is counted as one property and INV’s investment amountof the preferred equity interest is counted as the acquisition price of the preferred equity interest.
The Cayman Hotels acquired by the Cayman SPC, of which INV owns the TK interest, are counted
as two properties and INV’s investment amount of the TK interest is used as the acquisition price of
the TK interest. After the Structure Change, INV currently has direct ownership of the Leasehold of
the Cayman Hotels.

Property Sales
INV considers the possibility of portfolio optimization upon consideration of the portfolio sector
composition, geographic distribution, and competitiveness of each property as appropriate.
(ii)

Strategy for internal growth(Hotels)
Of the 84 domestic hotels (Note 1) owned by INV as of the end of the Reporting Period, 76 hotels use avariable rent scheme. In the variable rent scheme, in principle, INV receives all of the gross operating
profit (GOP) after deducting payment of management fees for the hotel operator as rents. For 73 hotelsof the 76 hotels, MHM and subsidiaries of MHM have implemented sophisticated revenue management
initiatives seeking to maximize revenue through effectively taking in accommodation demand. As aresult, INV can directly enjoy the hotel revenue upside through this variable rent scheme.
In response to the reduction in hotel demand, the MHM Group is taking steps to reduce hotel operating
expenses and recover revenues by reviewing its operational strategy. During the recovery phase of hotel
demand in the future, INV will strive to minimize the impact of rising costs such as utility costs andfoodstuffs by means of a thorough review of staffing and work shifts, continuous efforts to reduce fixed
costs, and strategies to maximize GOPPAR (GOP per the number of rooms available for sale).
The MHM Group vigorously worked to stimulate demand from domestic customers by providing
corporate customers with diverse options including a new lineup of meeting options highlighting strictmeasures to reduce the spread of COVID-19 and various options including educational tours andemployee training while grasping changes in customer demand under the “Post-Corona” environment.
In addition, the MHM Group is focusing on creating demand, including continuation of delivery and take11

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

out services and the development of new menus through directly managed restaurants in the hotel.
For hotels, renovation of rooms and replacement of fixtures and fittings are indispensable to maintain andincrease revenues and operate stably in a planned manner.
(Note 1) Including Sheraton Grande Tokyo Bay Hotel (the preferred equity interest).

(Residential properties and others)
INV will continue to strengthen its collaborative ties with property managers and brokers to further boost
occupancy rates and earning capabilities of its properties. With respect to INV’s residential properties,
INV will focus on increasing the occupancy rates and rents for both new lease contracts and lease renewals
for all its properties as well as formulating net leasing cost reduction policies in order to continue
maximizing profits.
Further, the implementation of appropriate maintenance and repair plans is of the utmost importance inmaintaining and enhancing the competitiveness and market value of the properties as well as ensuringhigh tenant satisfaction. Therefore, INV will continue to monitor current strategic plans with flexible
implementation as it sees fit.
(iii) Financial strategy
From now on, INV will continue to extend the average interest-bearing debt repayment periods anddiversify the loan maturity dates while paying attention to fund procurement costs, as well as diversifying
financing measures by issuing investment corporation bonds, including green bonds.
In addition, INV will seek to improve the credit rating (the long-term issuer rating “A” (Outlook: Stable))obtained from Japan Credit Rating Agency, Ltd. (JCR) by proceeding with these measures.
(iv)

Compliance risk management
While the executive director of INV concurrently serves as the representative director at CIM, two
supervisory directors (an external attorney and an external certified public account) oversee the execution of
the executive director’s duties via the Board of Directors of INV.
CIM has a compliance officer who is responsible for compliance with laws, regulations and other relevant
matters as well as overall management of transactions with sponsor related parties. Moreover, it has inplace a compliance committee which, chaired by such compliance officer, is in charge of deliberating on
compliance with laws, regulations and other relevant matters as well as transactions with sponsor relatedparties. Compliance committee meetings are attended by an outside expert (an attorney) who, sitting in as
a compliance committee member, conducts rigorous deliberations on the existence of conflicts of interest intransactions with sponsor related parties as well as strict examinations with respect to INV’s compliancewith laws and regulations. No resolution will be adopted unless the outside expert agrees.
When INV conducts certain transactions such as asset acquisition from sponsor related parties, priorapprovals by the Board of Directors of INV are required to ensure an objectivity in deliberation regarding
conflicts of interests. In such agenda, only two supervisory directors (a lawyer and a certified public
accountant) will participate in the vote, and the executive director who concurrently serves as therepresentative director of CIM will not participate in the vote as he is a special interested party.
INV intends to continually take steps to strengthen its compliance structure.

(v)

Initiatives for Sustainability
INV and CIM recognize the importance of environmental, social, and governance (ESG) considerations
in real estate investment management from the viewpoint of sustainability such as economic and social
development and contributing to global environmental conservation, and regard improvement ofsustainability as an important management issue. INV and CIM believe that the incorporation of ESG
considerations into the real estate investment management business, which is our primary business, isessential to maximizing unitholder value over the medium to long term and contributes to maximizing
INV's investment returns.
12

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Thus, INV and CIM have established a “Sustainability Policy” to set basic policies for sustainability andput them into practice in our daily operations.
Under this policy, CIM has formulated the “Energy Conservation Policy”, the “Greenhouse Gas
Emissions Reduction Policy”, the “Water Saving Policy” and the “Waste Management Policy” which
stipulate efforts to reduce environmental impact as initiatives for environment. In addition, CIM has
established the “Sustainable Procurement Policy” in order to promote initiatives for ESG throughout thevalue chain of INV's real estate portfolio and concluded the “Green Lease” contract with tenants tocollaborate with tenants on measures related to the environmental consideration of real estate, such asproactive introductions of energy-saving equipment such as LED lighting.
Furthermore, INV acquired CASBEE Certification for Buildings (Existing Buildings) for two hotels, andCertification for CASBEE for Real Estate for two residential properties. CASBEE is a method thatcomprehensively assesses the quality of a building, and evaluates features such as interior comfort andscenic aesthetics, in consideration of environment practices including use of materials and equipmentthat save energy or achieve smaller environmental loads. Also, 15 hotels owned by INV acquired thecertification of Building-Housing Energy-efficiency Labeling System (“BELS”). In particular, Hotel
MyStays Premier Akasaka, Hotel MyStays Fukuoka Tenjin, Hotel MyStays Yokohama Kannai and Hotel
MyStays Oita have been rated five stars “★★★★★”, and Hotel MyStays Premier Kanazawa, Hotel
MyStays Sapporo Station and Hotel MyStays Fuji Onsen Resort have been rated four stars “★★★★”
due to high energy conservation performance.
As initiatives for society, CIM is working on various measures for tenants and CIM’s officers andemployees. CIM conducts the “Tenant Satisfaction Survey” for residents of INV’s residential properties
to collect opinions and requests of residents and utilize them for asset management, and provides
sustainability-focused training for all officers and employees at least once a year to help officers andemployees acquire knowledge and raise awareness of sustainability considerations in line with businesspractices. Moreover, as initiatives for CIM’s employees, CIM conducts an employee satisfaction survey
once every three years with the aim of improving its working environment, provides paid vaccine leaveso that officers and employees can receive COVID-19 vaccines and deal with any potential side-effects,
and gives full subsidy for a comprehensive medical checkup without age restrictions.
As the spread of COVID-19 continues, some hotels owned by INV (APA Hotel Yokohama-Kannai, Hotel
MyStays Oita and Comfort Hotel Kitami) have been used as accommodation and medical facilities forpatients with mild symptoms or quarantine facilities for returnees from overseas in terms of social
contributions. Also, meeting rooms at Hotel MyStays Shin Osaka Conference Center were provided asa vaccination venue.
INV will continue to recognize its social responsibility to the environment and local communities as a JREIT with hotels and residences as our core assets, and will proactively implement ESG-friendly
investment management and sustainability initiatives that take advantage of asset characteristics andcarry out social contribution activities.

13

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)c

Significant Subsequent Events(a)Issuance of New Investment Units
On July 19, 2023, INV launched a global equity offering.
below.

The offering size and funds raised are described

The proceeds from the issuance of new units were used to fund a portion of the acquisition pricefor the six domestic hotels stated in “(c) Acquisition of Assets (Properties)”.
of new investment units was completed on July 31, 2023.

Payment for the issuance

As a result, total equity for INV is JPY 268,463

million, and the total number of issued investment units is 6,706,632 units.

Moreover, payment for thethird-party allotment in connection with overallotment will be completed on August 28, 2023.

In thiscase, total equity for INV is going to be JPY 270,101 million, and the total number of issued investment
units is going to be 6,737,121 units.
(i) Issuance of new investment units through Public Offering
Number of investment units to be offered:

Amount to be paid (issue value)
Total amount to be paid (total issue value)
Issue price (offer price)
Total issue price (total offer price)
Payment date

:
:
:
:

609,792 investment units
Domestic public offering: 353,680 investment units
Overseas offering: 256,112 investment units
JPY 53,726 per unit
JPY 32,761,684,992
JPY 55,566 per unit
JPY 33,883,702,272
July 31, 2023(ii) Secondary offering of investment units (overallotment secondary offering)Number of Investment Units to be offered in
the secondary offering
Offer priceTotal offer price
Delivery date:

30,489 investment units:::

JPY 55,566 per unit
JPY 1,694,151,774
August 1, 2023(iii) Issuance of new investment units through third-party allotment
Number of investment units to be offered
Amount to be paid (issue value)
Total amount to be paid (total issue value)
Payment date
Allottee

:
:
:
:
:

14

30,489 investment units
JPY 53,726 per unit
JPY 1,638,052,014
August 28, 2023
Mizuho Securities Co., Ltd.

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(b)

Debt Financing
Along with equity finance described in “(a) Issuance of New Investment Units”, INV has decided to
execute new borrowings (New Syndicate Loan (010)) on July 19, 2023 in order to fund a portion of theacquisition price of the six domestic hotel properties stated in “(c) Acquisition of Assets (Properties)” andrelated expenses.

New Syndicate Loan (010)
Borrowing

LenderDate

Outstanding
Balance(JPY million)

Interest Rate

Maturity

Borrowing(annual rate)

Date

MethodMizuho Bank, Ltd.,MUFG Bank, Ltd.,
Sumitomo Mitsui Banking
Corporation,

Floating

August 1,

3,086

2023

interest rate
(Note 1)

Sumitomo Mitsui Trust

August 1,
2024

Bank, Limited
Mizuho Bank, Ltd.,MUFG Bank, Ltd.,
Sumitomo Mitsui Banking
Corporation,
Sumitomo Mitsui Trust
Bank, Limited,

Floating

August 1,

9,195.72023

interest rate
(Note 2)

July 16,2026

The Tokyo Star Bank,
Limited,Unsecured/

Aozora Bank, Ltd.

non guarantee

Mizuho Bank, Ltd.,MUFG Bank, Ltd.,
Sumitomo Mitsui Banking
Corporation,
Sumitomo Mitsui Trust
Bank, Limited,
Development Bank of Japan
Inc.,

August 1,
2023

Floating
17,574.3

interest rate
(Note 3)

The Tokyo Star Bank,
Limited,Aozora Bank, Ltd.,The Ogaki Kyoritsu Bank,
Ltd.
Total Debt

29,856(Note 1) 1-month JPY TIBOR (Base Rate) + spread (0.20000%)(Note 2) 3-month JPY TIBOR (Base Rate) + spread (0.30000%)(Note 3) 3-month JPY TIBOR (Base Rate) + spread (0.50000%)

15

July 14,2028

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(c)

Acquisition of Assets
The Asset Manager decided to acquire six hotels as follows on July 19, 2023, and acquisition of assets has
been completed on August 1, 2023.

Property Name

AcquisitionPrice(million yen)Appraisal
Value(million yen)
(Note 1)

SellerD84

Fusaki Beach Resort Hotel & Villas

40,29340,700

Sheffield Asset Tokutei Mokuteki Kaisha

D85

Tateshina Grand Hotel Takinoyu

8,365

8,450

Heijo Tokutei Mokuteki Kaisha

D86

Hotel MyStays Okayama

2,613

2,640

Nippori Tokutei Mokuteki Kaisha

D87

Hotel MyStays Aomori Station

2,445

2,470

Shiretoko Tokutei Mokuteki Kaisha

D88

Hotel MyStays Soga

2,039

2,060

Nippori Tokutei Mokuteki Kaisha

D89

Tazawako Lake Resort & Onsen

1,475

1,490

Heijo Tokutei Mokuteki Kaisha

57,23057,810Property
Number

Total(Note 1)

Appraisal Value is based on appraisal value stated in the appraisal report by the Japan Real Estate Institute., JLL Morii
Valuation & Advisory K.K., The Tanizawa Sōgō Appraisal Co., Ltd. or Daiwa Real Estate Appraisal Co., Ltd. on thevaluation date of June 1, 2023.

16

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Reference Information)(a)Debt Financing
INV decided to borrow New Syndicate Loan (009) on July 12, 2023 and borrowed on July 14, 2023 andJuly 19, 2023 in order to repay New Syndicate Loan (I) in the amount of JPY 9,659 million due on July 14,2023 and New Syndicate Loan (003) in the amount of JPY 49,684 million due on July 19, 2023.

(i) New Syndicate Loan (009)
Borrowing
Date

LenderBorrowingAmount(JPY million)

July 14,
2023

1,110

July 14,
2023

951.6

July 14,2023

3,774.5

July 14,2023

3,774.5

SBI Shinsei Bank, Limited,
Resona Bank, Limited

July 19,
2023

6,848

Mizuho Bank, Ltd.,MUFG Bank, Ltd.,
Sumitomo Mitsui Banking
Corporation,
Sumitomo Mitsui Trust Bank,
Limited,Development Bank of Japan,
Inc.

July 19,2023

5,168.4

July 19,2023

18,858July 19,2023

18,858SBI Shinsei Bank, Limited

Mizuho Bank, Ltd.,MUFG Bank, Ltd.,
Sumitomo Mitsui Banking
Corporation,
Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.,MUFG Bank, Ltd.,
Sumitomo Mitsui Banking
Corporation,
Sumitomo Mitsui Trust Bank,
Limited,Development Bank of Japan,
Inc.,
The Ogaki Kyoritsu Bank,Ltd.

Interest Rate(annual rate)
Floating
interest rates(Note 1)

Floating
interest rates(Note 2)

Floating
interest rates(Note 3)

Floating
interest rates(Note 4)

Floating
interest rates(Note 1)

Floating
interest rates(Note 2)

Floating
interest rates(Note 3)

Floating
interest rates(Note 4)

Total

59,343(Note 1) 1-month JPY TIBOR (Base Rate) + spread (0.20000%)(Note 2) 3-month JPY TIBOR (Base Rate) + spread (0.30000%)(Note 3) 1-month JPY TIBOR (Base Rate) + spread (0.30000%)(Note 4) 3-month JPY TIBOR (Base Rate) + spread (0.50000%)

17

Maturity
Date

Borrowing
MethodJuly 16,
2024

Unsecured/
non guarantee

July 16,2026

Unsecured/
non guarantee

July 16,2026

Unsecured/
non guarantee

July 14,2028

Unsecured/
non guarantee

July 16,
2024

Unsecured/
non guarantee

July 16,2026

Unsecured/
non guarantee

July 16,2026

Unsecured/
non guarantee

July 14,2028

Unsecured/
non guarantee

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)d

Operational Outlook

The forecasts of financial results for the fiscal periods ending December 31, 2023 (from July 1, 2023 to December
31, 2023) and June 30, 2024 (from January 1, 2024 to June 30, 2024) are as follows.
December 2023
Fiscal Period(Anticipated)

June 2024
Fiscal Period(Anticipated)

Operating Revenues

JPY 17,786 million

JPY 18,000 million

Operating Income

JPY 11,255 million

JPY 11,348 million

Ordinary Income

JPY 9,586 million

JPY 9,855 million

Net Income

JPY 9,586 million

JPY 9,854 million

Total Distribution Amount(Including excess profit distribution)

JPY 9,708 million

JPY 9,876 million

Net Income per Unit

JPY 1,422

JPY 1,462

Distribution per Unit
(Excluding excess profit distribution)

JPY 1,441

JPY 1,466--

JPY 1,441

JPY 1,466

Excess Profit Distribution per Unit
Distribution per Unit
(Including excess profit distribution)

For the assumptions underlying the operational outlook for the fiscal periods ending December 31, 2023 andJune 30, 2024, please see “Assumptions Underlying the Forecast of Financial Results and Distribution for the
Fiscal Periods ending December 31, 2023 and June 30, 2024” as follows.
(Cautionary Note regarding Forward Looking Statements)
Forward looking statements such as the forecasts set forth herein are based on information currently available
and certain assumptions that are deemed reasonable. Actual operating performance may vary significantly
due to factors not foreseen as of the date of this document, such as the occurrence of gains and losses associatedwith the sale of properties, repayment of borrowings and a decrease in rent received. Also, this forecast is
not a guarantee of distribution amounts.

18

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods
ending December 31, 2023 and June 30, 2024 >Item

Assumptions

The December 2023 Fiscal Period: from July 1, 2023 to December 31, 2023 (184 days)
Fiscal period

The June 2024 Fiscal Period: from January 1, 2024 to June 30, 2024 (182 days)
Properties held as of the end of the December 2023 Fiscal Period: 133 properties and preferred
equity interests in one TMK

Assets undermanagement

Properties held as of the end of the June 2024 Fiscal Period: 133 properties and preferred equity
interests in one TMK
Based on the properties held as of today (133 properties and preferred equity interests in one TMK),
and INV assumes that there will be no change in the portfolio through the end of the fiscal period
ending June 2024.
As of the end of the December 2023 Fiscal Period: 6,737,121 units
As of the end of the June 2024 Fiscal Period: 6,737,121 units

Units outstanding

INV assumes that in addition to the total number of investment units issued and outstanding of
6,706,632 units as of today, 30,489 new investment units will be issued through a third party
allotment on August 28, 2023 and that the expected number of investment units issued andoutstanding will be 6,737,121 units. INV assumes that there will be no additional issuance of units
thereafter through the end of the June 2024 Fiscal Period.
Balance as of the end of the December 2023 Fiscal Period: JPY 269,046 million (borrowing: JPY
255,646 million, investment corporation bonds: JPY 13,400 million)

Interest-bearing
liabilities

Balance as of the end of the June 2024 Fiscal Period: JPY 269,046 million (borrowing: JPY 255,646
million, investment corporation bonds: JPY 13,400 million)
INV intends to refinance the same amount of loans and investment corporation bonds due in
December 2023 as well as June 2024 Fiscal Periods. INV assumes no other new loan or
prepayment of loan through the end of the June 2024 Fiscal Period.

19

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

INV expects to record rental revenues for the fiscal periods as follows:
The hotel rents revenue in Japan are forecasted based on the following assumptions but may besignificantly deviate from the actual results due to various factors including the situation ofrecovery from the pandemic.
INV assumes that domestic hotel demand for the fiscal period ending December 31, 2023 andthereafter will generally recover to the level of 2019 before the pandemic, though partially offset
by the termination of the governmental tourism promotion measures.
INV assumes that inbound demand will recover to the 2019 level from the summer or fall of 2023,
except for Chinese tourism to Japan in which recovery is expected to be delayed to 2024.
In addition to the demand forecasts above, INV has taken into account various factors including
scheduled conferences, concerts and other events in the vicinity of each hotel, situations ofcompetitors and price trends, etc., to forecast hotel rents for the period ending December 31, 2023
and thereafter. The reservations for the period from July to October 2023 already made as of theactual results and forecast are also taken into account.
December 2023
June 2024
Fiscal Period
Fiscal Period
JPY 15,579 million
JPY 13,415 million(JPY 13,829 million)(JPY 11,635 million)(JPY 7,469 million)(JPY 5,853 million)(JPY 6,360 million)(JPY 5,782 million)
JPY 2,206 million
JPY 4,585 million(USD 15,325 thousand) (USD 31,841 thousand)
JPY 17,786 million
JPY 18,000 million

・Rental revenues(of these, hotel rents)(Fixed hotel rents)(Variable hotel rents)
・Management contract revenue
Operating revenues

・TMK dividend amount
Total operating revenues

INV estimates the amount of dividends on the preferred equity interests based on the performancethe underlying asset backing the cash flows and the assumed amount of expenses incurred by the
special purpose company. INV has assumed conservatively that no dividends would be paid
from the Kingdom TMK that owns Sheraton Grande Tokyo Bay Hotel through the end of our fiscal
period ending June 30, 2024 due to the TMK recording a cumulative loss due to losses incurred inprior periods with the effect from COVID-19 we expect cumulative loss to be eliminated by then.
INV receives revenue and recognizes management contract revenues from two overseas real estate
assets “Westin Grand Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort” (“theOverseas Hotels”). The forecast of management contract revenues is based on estimatedperformance of the underlying assets and the assumed amount of expenses incurred by the hotelmanagement company. Management contract revenues for the December 2023 and June 2024
Fiscal Periods have been calculated based on the exchange rate of USD 1 = JPY 144.
Foreign currency risks on the management contract revenues are partially hedged by foreignexchange forward contracts.
While INV is examining potential expansion and renovation of Westin Grand Cayman Seven Mile
Beach Resort & Spa, no specific plan has been determined yet. INV neither anticipates nor
incorporates any particular impact of such expansion and renovation for the purpose of thisforecast through the end of the June 2024 Fiscal Period.
Rental revenues in the fiscal period ending December 2023 and the fiscal period ending June 2024
are calculated based on estimates as of today. In addition, INV assumes there will be nodelinquencies or non-payment of rent by tenants.

20

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

INV expects to incur property related expenses out of operating expenses for the fiscal periods asfollows:

・Facility management fees(of these, repair costs)
・Taxes and other public charges (Note 1)
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expenses andmanagement contract expenses
Operating expenses

December 2023
Fiscal Period
JPY 475 million(JPY 24 million)
JPY 751 million
JPY 275 million
JPY 4,342 million
JPY 103 million

June 2024
Fiscal Period
JPY 472 million(JPY 15 million)
JPY 631 million
JPY 327 million
JPY 4,551 million
JPY 126 million

JPY 5,948 million

JPY 6,109 million(Note 1) Property taxes and city planning taxes on the assets to be acquired in 2023 including anticipatedacquisition of assets are calculated on a pro-rata basis with the previous owners and settled at the timeof acquisition, and are not recorded for the fiscal period ending December 2023 and recorded from thefiscal period ending June 2024 as the amount equivalent to such settlement is included in the acquisitioncost.
For the six hotels acquired on August 1, 2023, INV expects to record the property taxes and city planningtaxes of JPY 59 million as part of the total acquisition cost, and an annual amount of JPY 141 million ofsuch taxes as expenses starting from the fiscal period ending June 2024.

INV expects to incur other operating expenses than the property related expenses or management
contract expenses for the fiscal periods as follows:・Other operating expenses

December 2023
Fiscal Period
JPY 582 million

June 2024
Fiscal Period
JPY 541 million(of these, asset management fees)(JPY 300 million)(JPY 300 million)

INV expects to record net operating income for the fiscal periods as follows:

NOI

December 2023
Fiscal Period

June 2024
Fiscal Period・NOI

JPY 16,180 million

JPY 16,442 million(of these, domestic hotel NOI)(of these, overseas hotel NOI)(of these, residential NOI)(JPY 13,071 million)(JPY 1,920 million)(JPY 1,121 million)(JPY 11,010 million)(JPY 4,241 million)(JPY 1,113 million)

NOI calculation method in the above table is as follows
・NOI ＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses + Dividends
on the preferred equity interest (TMK dividend) + (Management Contract Revenue ‐Management Contract Expense)
INV expects to incur non-operating expenses for the fiscal periods as follows:

Non-operating
expenses・Interest expense
・Finance related costs・Interest for investment corporation bonds
・Depreciation of investment corporation
bonds issuance expenses
・Other non-operating expenses (expenses
relating to the issuance of new units forthe public offering)・Foreign exchange loss (Note 1)
Total non-operating expenses

December 2023
Fiscal Period
JPY 631 million
JPY 650 million
JPY 60 million

June 2024
Fiscal Period
JPY 557 million
JPY 548 million
JPY 31 million

JPY 10 million

JPY 6 million

JPY 200 million-

JPY 115 million
JPY 1,668 million

JPY 95 million
JPY 1,493 million(Note 1) Mainly due to the effect of currency exchange contracts on the revenue of overseas hotels. However,this amount is an estimate based on the current exchange rate, and it may change significantly
depending on future exchange rate trends. In addition, currency gains may be recorded as a result.

21

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

The distribution per unit is calculated in accordance with the cash distribution policy as set forthin INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ending December 2023, INV expects todistribute an aggregate amount of JPY 9,708 million (distribution per unit: JPY 1,441) from the net
income for the December 2023 Fiscal Period (JPY 9,586 million) including JPY 121 million reversalof retained earnings (internal reserve).

Distribution perunitWith respect to the distribution for the fiscal period ending June 2024, INV expects to distribute anaggregate amount of JPY 9,876 million (distribution per unit: JPY 1,466) from the net income forthe fiscal period ending June 2024 (JPY 9,854 million) including JPY 21 million reversal of retained
earnings (internal reserve).
For the fiscal period ending December 2023 and fiscal period ending June 2024, INV expects torecord deferred gain on hedge of the interest rate swap and the currency option as the valuationand conversion adjustments, etc. of JPY 142 million, which is equal to the amount for the fiscal
period ended December 2022. The distribution per unit is calculated based on the assumptionthat fluctuation of the market value of the interest rate swap and the currency option does not affectthe distribution per unit.
Distribution per unit may vary due to various factors, including changes of the assets undermanagement, fluctuation of rent income associated with reasons such as change of tenants andoccurrences of unexpected repairs.
INV believes maintaining the stability of cash distributions over the medium term is one of themost important factors in determining the amount of distribution for a given fiscal period.
Therefore, INV has adopted a policy of making distributions in excess of profits, etc. in order tostabilize distributions in cases where dilution of investment units or significant expenses are to berecorded in connection with the acquisition of assets or the raising of capital, or other events
leading to a temporary decrease in distribution per unit. When determining distributions inexcess of profits, etc., INV takes into consideration the level of distribution per unit assuming suchacquisition of assets, capital raising or other event would had contributed for a full fiscal period.
INV may also consider making distributions in excess of profits, etc. for the purpose of decreasing
the impact from corporate tax increase arising from different rules in tax and accounting practices,such as treatment on depreciation of fixed term land lease or asset retirement obligation.

Excess profit
distribution per unit

With respect to the fiscal period ending December 2023, earnings per unit is expected to decrease
due to (i) one-off expenses in connection with the public offering and the borrowings to raise funds
for acquisition of properties in the fiscal year ending December 31, 2023 and (ii) partial income
contribution from those acquisitions for the fiscal period ending December 2023. Therefore, INV
plans to pay distributions through reversal of retained earnings (internal reserve) (JPY 19 per unit)
in order to stabilize the DPU.
With respect to the fiscal period ending June 2024, INV plans to distribute reversal of retained
earnings (internal reserve) (JPY 4 per unit) as “distributions in excess of profit, etc. from the amountof difference arising from differences in tax and accounting processing.”
December 2023
Fiscal Period
Excess profit distribution per unit

June 2024
Fiscal Period--

INV assumes there will be no amendments to applicable laws and regulations, the taxation system,
accounting standards and other regulations that would affect the foregoing forecasts.
Other

(2)

In addition, INV assumes there will be no unforeseen material changes in general economic trends,
real estate market conditions and other trends and conditions.

Investment Risk

Disclosure is omitted because there have been no material changes in the “Investment Risk” section of the latest
securities report (filed on March 27, 2023).

22

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

2. Financial Statements(1)

Balance Sheet(Unit: JPY thousand)Fiscal period ended
December 31, 2022
(as of December 31, 2022)

AssetsCurrent assets:
Cash and bank deposits
Cash and bank deposits in trust
Rental receivables
Deposits paid
Prepaid expenses
Income taxes receivable
Other
Total current assets
Non-current assets:
Property and equipment
Buildings
Accumulated depreciation
Buildings, net
Buildings and accompanying facilities
Accumulated depreciation
Buildings and accompanying facilities, net
Structures, at cost
Accumulated depreciation
Structures, net
Tools, furniture and fixtures, at cost
Accumulated depreciation
Tools, furniture and fixtures, net
Construction in progress
Buildings in trust, at cost
Accumulated depreciation
Buildings in trust, net
Buildings and accompanying facilities in trust, at cost
Accumulated depreciation
Buildings and accompanying facilities in trust, net
Structures in trust, at cost
Accumulated depreciation
Structures in trust, net
Tools, furniture and fixtures in trust, at cost
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property and equipment, net
Intangible assets
Leasehold rights
Leasehold rights in trust
Total intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Long-term prepaid expenses
Derivatives assets
Other
Total investments and other assets
23

Fiscal period ended
June 30, 2023
(as of June 30, 2023)

15,553,174
7,768,621
4,845,162
1,703,315
651,46913
5,060
30,526,816

18,377,030
10,464,171
5,750,301
542,947
821,11715
397
35,955,980

19,479,753-1,588,329
17,891,423
5,308,557-1,106,696
4,201,860
1,458
-183
1,275
1,228,513-411,059
817,453
714,997
159,079,641-26,638,315
132,441,325
32,688,012-12,614,111
20,073,900
212,818-109,514)
103,304
3,195,160-1,810,584
1,384,575
241,319,447
418,949,564

19,479,753-1,807,607
17,672,145
5,311,502-1,260,171
4,051,330
1,458
-216
1,242
1,282,552-474,151
808,401
720,331
159,247,341-28,861,119
130,386,221
33,186,709-13,472,710
19,713,998
266,849-115,188
151,661
3,370,722-1,995,319
1,375,402
241,319,447
25,767416,225,951

10,637,811
14,419,422
25,057,234

10,637,811
14,380,825
25,018,637

17,856,387
1,372,719
271,704
142,841
22,667
19,666,320

17,856,387
1,372,719
290,589
9,306
22,667
19,551,670

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Unit: JPY thousand)Fiscal period ended
December 31, 2022
(as of December 31, 2022)
463,673,119

Fiscal period ended
June 30, 2023
(as of June 30, 2023)
460,796,259

37,84437,844494,237,781

67,69067,690496,819,930

Accounts payable
Short-term loans payable

629,231
114,515,000

599,562
111,453,000

Current portion of investment corporation bonds
Current portion of long-term loans payable

3,000,000
42,405,000

2,000,000
46,139,000

Accounts payable-otherAccrued expenses

3,366
264,276

3,514
247,903

Income taxes payable
Consumption taxes payable605
371,675

605
422,723

Advances received
Deposits received

317,350
13,490305,914
11,663

161,519,996

161,183,886

Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets
Liabilities
Current liabilities:

Total current liabilities
Non-current liabilities:
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits in trust

5,200,000

11,400,000

75,677,000
1,485,701

68,198,000
1,484,328

119
33,872495,525
34,097

Derivatives liabilities
Asset retirement obligations
Total non-current liabilities

82,396,693

81,611,951

243,916,689

242,795,838

Unitholders’ equity:
Unitholders’ capital

235,701,512

235,701,512

Surplus:Capital surplus

6,264,432

6,264,432

Total liabilities
Net assets

Deduction of capital surplus
Allowance for temporary differences
adjustment
Other deduction of capital surplus-5,524,006-5,524,006

Total deduction of capital surplus-5,530,137-5,530,137

734,294734,294

Retained earnings

13,742,562

17,583,734

Total surplus

14,476,857

18,318,029

250,178,369

254,019,541

Deferred gains or losses on hedges

142,7214,550

Total valuation and translation adjustments

142,721*2

Capital surplus (net)Total unitholders’ equity-6,130-6,130*2

Valuation and translation adjustments:

Total net assets*1

Total liabilities and net assets

250,321,091
494,237,781

24

4,550
*1

254,024,091
496,819,930

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(2)

Statement of Income and Retained Earnings(Unit: JPY thousand)Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)

Operating revenue
Rental revenue―real estate

10,182,751*1Management contract revenue

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

1,746,848*2

Total operating revenue

12,000,955*1

15,914,981

11,929,599

Operating expenses
Property related expenses

4,606,538*1Management contract expenses
Asset management fees

*2569,669
300,000

3,914,026*2

4,488,341*1*2

649,329300,000

Directors’ compensation
Asset custody fees

4,800
24,4754,800
24,736

Administrative service fees
Other

50,047
117,057

39,162
51,871

5,672,588
6,257,011

5,558,241

Total operating expenses
Operating income
Non-operating income
Interest income

10,356,739

90

100

92

178,185-

17,657
17,8403,821
182,107542,104

507,601

68,85928,23033,881

6,303
553,412

7,053
538,693

1,198,910

537,269
1,624,499

5,075,941
5,075,941

8,914,347
8,914,347

605
605

605
605

Net income
Retained earnings carried forward

5,075,336
8,667,226

8,913,742
8,669,991

Unappropriated retained earnings

13,742,562

17,583,734

Foreign exchange gains
Interest on tax refund
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Loan-related costs
Derivative losses
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Total income taxes

25

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(3)

Statement of Changes in Net Assets

Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Capital surplus

Balance at the
beginning of theperiodChanges during theperiodDistributions fromsurplus

Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)

235,701,512

6,264,432-6,130-5,524,006-5,530,137

734,294

－

－

－

－

－

－

235,701,512

6,264,432-6,130-5,524,006-5,530,137

734,294

Net income
Changes other thanunitholders’ equity(net)
Total changes during
the period
Balance at the end of
the period

Valuation and translation
adjustments

Unitholders’ equity
SurplusRetainedearnings(deficit)
Balance at the
beginning of theperiodChanges during theperiodDistributions fromsurplus
Net income
Changes other thanunitholders’ equity(net)
Total changes during
the period
Balance at the end of
the period

Total
surplusTotal
unitholders’equityDeferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

96,02096,020Total
net assets

9,679,301

10,413,596

246,115,108

246,211,129-1,012,075-1,012,075-1,012,075-1,012,075

5,075,336

5,075,336

5,075,336

5,075,336
46,701

46,701

46,701

4,063,260

4,063,260

4,063,260

46,701

46,701

4,109,962

13,742,562

14,476,857

250,178,369

142,721

142,721250,321,091

26

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalDeduction of capital surplus
Capital surplus

Balance at the
beginning of theperiodChanges during theperiodDistributions fromsurplus

Allowance fortemporarydifferences
adjustment

Other
deduction ofcapital surplus

Total
deduction ofcapital surplus

Capital surplus(net)

235,701,512

6,264,432-6,130-5,524,006-5,530,137

734,294

－

－

－

－

－

－

235,701,512

6,264,432-6,130-5,524,006-5,530,137

734,294

Net income
Changes other thanunitholders’ equity(net)
Total changes during
the period
Balance at the end of
the period

Valuation and translation
adjustments

Unitholders’ equity
SurplusRetainedearnings(deficit)
Balance at the
beginning of theperiodChanges during theperiodTotal
surplusTotal
unitholders’equityDeferred
gains or losses
on hedges

Totalvaluation andtranslation
adjustments

142,721

142,721Total
net assets

13,742,562

14,476,857

250,178,369

Distributions fromsurplus-5,072,570-5,072,570-5,072,570-5,072,570

Net income

8,913,742

8,913,742

8,913,742

8,913,742

Changes other thanunitholders’ equity(net)
Total changes during
the period
Balance at the end of
the period

250,321,091-138,171-138,171-138,171

3,841,171

3,841,171

3,841,171-138,171-138,1713,703,000

17,583,734

18,318,029

254,019,541

4,550

4,550

254,024,091

27

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(4) Statement of Cash Distribution(Unit: JPY)
Fiscal period ended December 31, 2022
(as of December 31, 2022)

Fiscal period ended June 30, 2023
(as of June 30, 2023)

I

Unappropriated retained
earnings

13,742,562,778

17,583,734,499

II

Distributions

5,072,570,880

8,925,773,760(832)(1,464)Retained earnings (deficit)
carried forward

8,669,991,898

8,657,960,739

Calculation method of distribution
amountIn accordance with the distribution policy set

In accordance with the distribution policy set

forth in Article 17, Paragraph 1 of the Articles

forth in Article 17, Paragraph 1 of the Articles

of Incorporation of INV, the distributionof Incorporation of INV, the distribution

amount shall be the amount which does notamount shall be the amount which does notexceed the amount of profits but exceeds

exceed the amount of profits but exceeds

90% of the distributable profit as defined in

90% of the distributable profit as defined in

ArticleArticle(Distribution per unit)
III

67-15

Measures Act.

of theSpecialTaxation

However, in the event that

67-15

Measures Act.

of theSpecialTaxation

However, in the event thatany tax losses arise, or if no profits have been

any tax losses arise, or if no profits have beenrecorded for tax purposes due to tax losses

recorded for tax purposes due to tax losses

carried forward, the distribution amountcarried forward, the distribution amount

may be as reasonably determined by INV.

may be as reasonably determined by INV.

Pursuant to this policy, INV determined the

Pursuant to this policy, INV determined the

distribution amount to be JPY 5,072,570,880

distribution amount to be JPY 8,925,773,760

out of net income of JPY 5,075,336,307.

out of net income of JPY 8,913,742,601 andMoreover, INV does not make excess profit

retained earnings carried forward of JPY

distribution set forth in Article 17, Paragraph12,031,159.

4 of the Articles of Incorporation.

28

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(5)

Statement of Cash Flows(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
Loan-related costs
Interest income
Interest expenses
Foreign exchange losses (gains)
Loss (gain) of derivatives
Decrease (increase) in rental receivables
Decrease (Increase) in deposits paid
Decrease (increase) in receivable income taxes
Increase (decrease) in accounts payable
Increase (decrease) in consumption taxes payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in deposits received
Others, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Payment into time deposits
Proceeds from time deposits
Purchases of property and equipment
Purchases of property and equipment in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
OthersNet cash used in investing activities
Cash flows from financing activities
Increase in short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment corporation
bonds
Redemption of investment corporation bonds
Borrowing related expenses redemption
Payment of distributions of earnings
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

29*15,075,941
3,756,303
6,303
553,412-90
570,334-29-1,448,964-1,370,438-1-3,505
321,485-26,469
20,843-585
3,093-219,196
7,238,437
90-567,445-605
6,670,476

8,914,347
3,746,513
7,053
538,693-100
541,482-90
537,269-905,138
1,160,368-1
13,731
51,048-19,097-11,435-1,827-250,984
14,321,833
100-538,660-605
13,782,668-800,000
800,000-102,499-875,748-27,487
12,239-993,494

2,000,000-62,318-965,159-30,246
28,873-46,500
924,648

87,471,000-61,091,000
1,790,000-28,745,000

27,660,000-30,722,000
12,317,000-16,062,000-

6,163,101-591,633-1,011,803-2,178,436
29
3,498,574
17,023,221
20,521,796-1,000,000-473,134-5,070,967-7,188,001
90
7,519,406
20,521,796*1 28,041,202

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(6)

Notes Concerning Going Concerns Assumption
Not applicable(7)

Notes Concerning Significant Accounting Policies(Notes Concerning Significant Accounting Policies)
1. Evaluation standards and evaluation method of assets(a) Investment in affiliates
Cost method through moving-average method is used.
(b) Claims generated and debt incurred through derivative transactions
Market value method is used.
2. Method of depreciation of non-current assets(a) Property and equipment (including assets in trust)The straight-line method is used.
The useful lives of major property and equipment are as follows.
Buildings
16-50 years
Buildings and accompanying facilities
5-29 years
Structures
20 years
Tools, furniture and fixtures
3-18 years
Buildings in trust
5-67 years
Buildings and accompanying facilities in trust 3-33 years
Structures in trust
7-55 years
Tools, furniture and fixtures in trust
3-20 years(b) Intangible assets
For fixed-term land lease for business purposes in Japan, the straight-line method based on the lease period
is used.
(c) Long-term prepaid expenses
The straight-line method is used.
3. Accounting treatment of deferred assets
Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the straight-line method over a period up to
redemption of the investment corporation bonds.
4. Method of calculating allowances
Allowance for doubtful accounts
To reserve for losses on doubtful accounts, allowances are provided for normal receivables using a rate
determined based on past bad debt experiences, and specific allowances are provided for accounts with apossibility of default based on the estimated amounts considered to be uncollectible by considering thecollectability of accounts on an individual basis.
5. Conversion of assets and liabilities in foreign currency into Japanese yen
Receivables and payables denominated in foreign currencies are translated into yen at the spot exchange rate
at the end of the fiscal period date, and differences arising from the translation are treated as a profit or loss.

30

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

6. Revenue and expense recognition(a) Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessedand determined, the amount corresponding to the Reporting Period is accounted for as property related
expenses.
Of the amounts paid to the seller for acquisitions of real estate, the amount equivalent to property taxes iscapitalized as part of the acquisition cost of the real estate instead of being charged as expense. The amountequivalent to property taxes that was capitalized as part of the acquisition cost of real estate during theReporting Period is zero.
(b) Recognition of revenue
The following is the content of principal performance obligations related to revenue from contracts with
INV’s customers and the normal timing for the satisfaction of such obligations (normal timing for revenue
recognition).
Sale of real estate, etc.
For the sale of real estate, etc., revenue will be recognized at the time the control of such real estate, etc. is
obtained by the purchaser, who is the customer, as the transfer obligation will be fulfilled pursuant to thecontract pertaining to the sale of real estate.
7. Method of hedge accounting(a) Method of hedge accounting
Deferred hedge accounting is used.
(b) Hedging instrument and hedged item
Hedging instrument: interest rate swap
Hedged item: interest on borrowings(c) Hedge policy
INV enters into derivative transactions for the purpose of hedging against the risks set forth in INV’s Articles
of Incorporation in accordance with its risk management policy.
(d) Method of evaluating hedge effectivenessHedge effectiveness is evaluated by comparing the cumulative amount of changes in cash flows of thehedging instrument and the cumulative amount of changes in cash flows of the hedged item and verifying
the difference in the amounts of change of both the hedged item and the hedging instrument.
8. Cash and cash equivalents as stated in Statement of Cash Flows
Cash and cash equivalents as stated in the Statement of Cash Flows consist of cash on hand and cash intrust, floating deposits, deposits in trust and short-term investments that are very liquid and realizable witha maturity of three months or less when purchased and that are not subject to significant risks of changes
in value.

31

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

9. Other matters which constitute the basis for preparation of financial statements(a) Accounting treatment of trust beneficiary interests in real estate
As to trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as
well as all income generated and expenses incurred from assets in trust, are recorded in the relevant balance
sheets and income statement accounts. Of such items, the following significant trust assets and liabilities
are shown separately on the balance sheet.
(i) Cash and bank deposits in trust(ii) Buildings in trust
Buildings and accompanying facilities in trust
Structures in trust
Tools, furniture and fixtures in trust
Land in trust
Construction in progress in trust(iii) Leasehold rights in trust(iv) Tenant leasehold and security deposits in trust(b) Accounting treatment of non-deductible consumption taxes
Non-deductible consumption taxes etc. regarding the acquisition of assets are capitalized as part ofacquisition cost of each asset.
(8)Notes on Material Accounting Estimates
Not applicable(9)

Notes to the Financial Statements(Notes to the Balance Sheet)*1. Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment
Corporations(Unit: JPY thousand)Fiscal period ended
Fiscal period ended
December 31, 2022
June 30, 2023
(as of December 31, 2022)(as of June 30, 2023)
50,00050,000*2. Allowance for temporary differences adjustment
Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)
1. Reasons, related assets and amounts(Unit: JPY thousand)Relatedassets, etc.

ReasonLeaseholdrights intrust

Amortizationof leasehold
rights in trust

Total

Balance atthebeginningof theperiodAllowance
set aside
duringperiod-131,332-6,130---6,130-131,332-6,130---6,130InitialamountReversalduringperiodBalance atthe end of
the period

2. Method of reversal(1) Leasehold rights in trust
The corresponding amount is scheduled to be reversed upon sale, etc. of the relevant property.

32

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
1. Reasons, related assets and amounts(Unit: JPY thousand)Relatedassets, etc.

ReasonLeaseholdrights intrust

Amortizationof leasehold
rights in trust

Total

Balance atthebeginningof theperiodAllowance
set aside
duringperiod-131,332-6,130---6,130-131,332-6,130---6,130InitialamountReversalduringperiodBalance atthe end of
the period

2. Method of reversal(1) Leasehold rights in trust
The corresponding amount is scheduled to be reversed upon sale, etc. of the relevant property.
(Notes to Statement of Income and Retained Earnings)*1. Real estate rental revenues and expenses
Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

A. Real estate rental revenues
Rental revenue-real estate
Rent/common area charges (Note)

10,037,349

Other revenues

11,729,696

145,401

271,259

10,182,751

12,000,955

Maintenance costs

426,784445,723

Taxes and public dues

739,194

596,132

Non-life insurance premium

20,233

20,475

3,323,690

3,311,017

96,634

114,992

Total

4,606,538

4,488,341

C.

5,576,212

7,512,613

3,118,811

4,615,327

Total

B.

Real estate rental expenses

Property related expenses

Depreciation expenses
Other expenses

Real estate rental income (A-B)(Note) Of which, revenue from variable hotel rents

33

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)*2. Management contract income(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)
A. Hotel operating revenue

5,096,139

8,388,052

B.

Hotel operating expenses

3,349,290

4,474,026

C.

Management contract revenue (A-B)

1,746,848

3,914,026

Non-life insurance premium

136,505

152,464

Depreciation expenses

432,613435,496550

61,368D. Management contract expenses

Others
Total
E.

Management contract income (C-D)

569,669

649,329

1,177,179

3,264,696(Notes to Statement of Changes in Net Assets)
Number of issuable investment units authorized and number of investment units issued and outstanding
Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)
Number of issuable investment units
Number of investment units issued andoutstanding

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

10,000,000 units

10,000,000 units

6,096,840 units

6,096,840 units(Notes to Statement of Cash Flows)*1. Relationship between cash and cash equivalents in statement of cash flows and amounts in accompanying
balance sheet is as follows:

Cash and bank deposits

Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)
15,553,174(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)
18,377,030

7,768,621

10,464,171-2,800,000-800,000

20,521,796

28,041,202

Cash and bank deposits in trust
Time deposits with a deposit period of more than
three months
Cash and cash equivalents

34

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Lease Transactions)Operating lease transactions (as lessee)
Unexpired lease fees
Fiscal period ended
December 31, 2022
(as of December 31, 2022)(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(as of June 30, 2023)

Due within one year

320,447

320,951

Due after one year

8,229,974

8,089,958

Total

8,550,422

8,410,909

Fiscal period ended
December 31, 2022
(as of December 31, 2022)
13,068,093(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(as of June 30, 2023)
13,119,003

Due after one year

44,885,587

39,197,781

Total

57,953,680

52,316,785

Operating lease transactions (as lessor)
Unexpired lease fees

Due within one year

(Notes Related to Financial Instruments)
1.

Status of financial instruments(1) Policy for financial instruments
INV principally conducts its operations through investments in real estate and other specified assets to seek
to ensure stable income in the medium to long term.
The policy for raising funds is principally through issuing new investment units, investment corporation
bonds, etc. or borrowing loans.
Derivative transactions are to be entered into for the purpose of hedging against the risks of future interest
rate fluctuations, exchange rate fluctuations, etc. and not for speculation.
Surplus funds are managed after carefully taking into account safety, liquidity, the interest rateenvironment and financing.
(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings and issuing investment corporation bonds are mainly used to acquire
real estate properties or trust beneficiary interest in real estate (including related acquisition costs) and forthe refinancing of existing loans. Liquidity risks relating to loans are managed by the finance departmentof CIM by preparing and updating plans for funds, and monitoring the financial covenants set forth in loan
agreements.
(3) Supplemental information regarding fair value of financial instruments
Since certain assumptions, etc. are used in estimating the fair value of financial instruments, different
assumptions, etc. may result in the variance of such value.

35

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

2.

Estimated fair value of financial instruments
Book value, fair value and the difference between values are as follows. “Cash and bank deposits”, “Cashand bank deposits in trust” and “Short-term loans payable” are omitted because their fair values are close
to their book values since they are settled in cash and in a short period of time. Moreover, “Tenantleasehold and security deposits in trust” is omitted because it is not material.

Fiscal period ended December 31, 2022 (as of December 31, 2022)(Unit: JPY thousand)Book Value

Fair Value

Difference

17,856,387

17,553,373(303,014)

Total assets

17,856,387

17,553,373(303,014)(2) Current portion of Investment Corporation
Bonds(3,000,000)(2,970,200)

29,800(3) Current portion of long-term loans payable(42,405,000)(42,405,000)-(4) Investment corporation bonds(5,200,000)(4,734,340)

465,660(5) Long-term loans payable(75,677,000)(75,677,000)-(126,282,000)(126,786,540)

495,460

142,721

142,721-(1) Investment securities

Total liabilities(6) Derivatives
Fiscal period ended June 30, 2023 (as of June 30, 2023)(Unit: JPY thousand)Book Value

Fair Value

Difference

17,856,387

18,935,791

1,079,404

Total assets

17,856,387

18,935,791

1,079,404(2) Current portion of Investment Corporation
Bonds(2,000,000)(1,996,000)

4,000(3) Current portion of long-term loans payable(46,139,000)(46,139,000)-(4) Investment corporation bonds(11,400,000)(11,166,860)

233,140(5) Long-term loans payable(68,198,000)(68,198,000)-(127,737,000)(127,499,860)

237,140(486,218)(486,218)-(1) Investment securities

Total liabilities(6) Derivatives(Note 1) Items recorded in the Liabilities Section are shown in parenthesis.
(Note 2) Receivables and payables arising from derivative transactions are recorded in net amounts, and if thetotal net amount is a negative amount, such amount is shown in parenthesis.

36

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Note 1) Methods to calculate fair values of financial instruments(1) Investment securities
For preferred equity interest, the assets and liabilities of the investee are valued at fair value, and theequity equivalent in the obtained net asset value is deemed as the fair value of the preferred equity
interest.
(2) Current portion of Investment Corporation Bonds (4) Investment corporation bonds
Fair value is calculated using a method based on market price.
(3) Current portion of long-term loans payable (5) Long-term loans payable
Long-term loan with floating interest rates reflecting changes in market rates within a short-term
period are stated at their book value as their book value approximate their fair value.
(6) Derivatives
Please refer to the “Notes Related to Derivative Transactions” below.

(Note 2) Repayment schedule of investment corporation bonds, long-term loans payable and other interestbearing debts after the closing date of the fiscal period
Fiscal period ended December 31, 2022 (as of December 31, 2022)(Unit: JPY thousand)Due after
Due within Due after one Due after two
Due after four Due after
three to four
one yearto two years to three years
to five years five years
years
Current portion of
investment corporation
bonds
Current portion of longterm loans payable
Investment corporationbonds
Long-term loans payable
Total

3,000,000

-

-

-

-

-

42,405,000

-

-

-

-

-

-

1,000,000---

4,200,000-

34,127,000

39,399,000-

1,190,000

961,000

45,405,000

35,127,000

39,399,000-

1,190,000

5,161,000

Fiscal period ended June 30, 2023 (as of June 30, 2023)(Unit: JPY thousand)Due after
Due within Due after one Due after two
Due after four Due after
three to four
one yearto two years to three years
to five years five years
years
Current portion of
investment corporation
bonds
Current portion of longterm loans payable
Investment corporationbonds
Long-term loans payable
Total

2,000,000

-

-

-

-

-

46,139,000

-

-

-

-

-

-

1,000,000

5,000,000-

2,200,000

3,200,000-

42,243,000

23,804,000-

1,190,000

961,000

48,139,000

43,243,000

28,804,000-

3,390,000

4,161,000

37

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Investment Securities)

Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)
Investment in subsidiaries and affiliates
Book Value
Investment in affiliates
Total(Unit: JPY thousand)Difference

Fair Value

17,856,387

17,553,373-303,014

17,856,387

17,553,373-303,014

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
Investment in subsidiaries and affiliates
Book Value
Investment in affiliates
Total(Unit: JPY thousand)Difference

Fair Value

17,856,387

18,935,791

1,079,404

17,856,387

18,935,791

1,079,404(Notes Related to Derivative Transactions)
1. Derivative transactions to which hedge accounting is not applied
Fiscal period ended December 31, 2022 (as of December 31, 2022)
Not applicable
Fiscal period ended June 30, 2023 (as of June 30, 2023)
About derivative transactions for which hedge accounting is not applied, the contract amount or theamount equivalent to the notional principal prescribed in the contracts as of the settlement of accounts are
as follows.
(Unit: JPY thousand)Classification

Derivativetransaction type, etc.

OTC transaction

Foreign Exchange
Forward, short
USD

Contract amount, etc.
Amount due
after one year
5,158,490

1,872,600(Note 1) Estimation method for fair value
Foreign Exchange Forward Estimated based on the price, etc.
institutions.

Fair value(Note 1)-490,769

Valuation
gains/losses-490,769

presented by the correspondent financial

2. Derivative transactions to which hedge accounting is applied
Fiscal period ended December 31, 2022 (as of December 31, 2022)
The contract amount or the amount equivalent to the notional principal prescribed in the contracts as of
the closing date under each hedge-accounting method are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivativetransaction type,
etc.

Primary
hedged item

Principle
accounting
methodInterest rate swap
Receive floating
rate/pay fixedrate

Borrowings

Contract amount, etc. (Note 1)
Amount due
after one year
50,476,000

36,687,000

Fair value(Note 2)

142,721(Note 1) The contract amount, etc. for interest rate swap are stated based on a notional principal.
(Note 2) Estimation method for fair value
Interest rate swap
Estimated based on the price, etc. presented by the correspondent financial
institutions.
38

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Fiscal period ended June 30, 2023 (as of June 30, 2023)
The contract amount or the amount equivalent to the notional principal prescribed in the contracts as of
the closing date under each hedge-accounting method are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivativetransaction type,
etc.

Primary
hedged item

Contract amount, etc. (Note 1)
Amount due
after one year

Fair value(Note 2)

Interest rate swap
Receive floating
Borrowings
4,550
36,687,000
18,441,000
rate/pay fixed
rate(Note 1) The contract amount, etc. for interest rate swap are stated based on a notional principal.
(Note 2) Estimation method for fair value
Interest rate swap
Estimated based on the price, etc. presented by the correspondent financial
institutions.
Principle
accounting
method(Notes Related to Retirements Payments)
Not applicable(Notes Related to Asset Retirement Obligations)1.

Summary of the asset retirement obligations for the period
INV has recorded asset retirement obligations in regard to its obligation to restore the land to its original
condition related to the fixed-term land lease agreement of Comfort Hotel Maebashi held by INV.

2.

Calculation method for asset retirement obligations for the period
The amount of the asset retirement obligations has been calculated by estimating the period of use at 43
years, based on the remaining period until the expiration of the fixed-term land lease agreement, and byusing a discount rate of 1.342%.

3.

Increase/decrease in the total amount of asset retirement obligations

Balance at the beginning of the period
Increase due to the acquisition of property andequipment
Accretion expense
Balance at the end of the period

39

Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)
33,644(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)
33,872--

227
33,872

225
34,097

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Revenue Recognition)
1. Breakdown of revenue from contracts with customers
Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)(Unit: JPY thousand)
Revenue from contracts
Net sales to externalwith customers (Note 1)
customers
Sale of real estate, etc.
31,966
11,929,599
Other
31,966
11,929,599
Total(Note 1) Revenue from the leasing business subject to the “Accounting Standard for Lease Transactions”(ASBJ Statement No. 13), dividend income subject to the “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10) and the sale of real estate, etc. subject to the “Practical
Guidelines on Accounting by Transferors for Securitization of Real Estate Using Special Purpose
Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified
Public Accountants) are not included in “Revenue from contracts with customers” as they are notcovered by the Accounting Standard for Revenue Recognition. Major revenue from contracts withcustomers is proceeds from sale of real estate properties.
Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)(Unit: JPY thousand)
Revenue from contracts
Net sales to externalcustomers
with customers (Note 1)
Sale of real estate, etc.
27,645
15,914,981
Other
27,645
15,914,981
Total(Note 1) Revenue from the leasing business subject to the “Accounting Standard for Lease Transactions”(ASBJ Statement No. 13), dividend income subject to the “Accounting Standard for Financial
Instruments” (ASBJ Statement No. 10) and the sale of real estate, etc. subject to the “Practical
Guidelines on Accounting by Transferors for Securitization of Real Estate Using Special Purpose
Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified
Public Accountants) are not included in “Revenue from contracts with customers” as they are notcovered by the Accounting Standard for Revenue Recognition. Major revenue from contracts withcustomers is proceeds from sale of real estate properties.
2.

Information utilized as the basis for understanding revenue from contracts with customers
The information is as described in “Notes Concerning Significant Accounting Policies” above.

3.

Information on relationship of fulfillment of performance obligations based on contracts with customers withcashflow generated from said contracts as well as amount of revenue and period expected to be recognized in
the next calculation period or thereafter from contracts with customers existing at the end of the Reporting
Period(1) Balance of contract assets and contract liabilities, etc.
(Unit: JPY thousand)Fiscal period ended
Fiscal period ended
December 31, 2022
June 30, 2023
(from July 1, 2022 to(from January 1, 2023 to
December 31, 2022)
June 30, 2023)
Claims generated from contracts with customers
2,250
4,231
(balance at the beginning of the period)
Claims generated from contracts with customers
4,231
3,093
(balance at the end of the period)
Contract assets(balance at the beginning of the period)
Contract assets(balance at the end of the period)
Contract liabilities(balance at the beginning of the period)
Contract liabilities(balance at the end of the period)
40

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(2) Transaction value allocated to remaining performance obligations
Not applicable(Notes Related to Segment and Related Information)
I. Segment Information
Disclosure is omitted because the real estate investment business is INV’s sole business and it has noreportable segments.
II. Related Information
Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category
accounted for over 90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales(Unit: JPY thousand)Japan

The Cayman Islands
10,182,751

Total

1,746,848

11,929,599(Note) Net sales are based on the location of the customer and categorized by country or territory.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted forover 90% of the amount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues
5,771,441

MyStays Hotel Management Co., Ltd.

Related segment
Real Estate Investment

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category
accounted for over 90% of the operating revenue on the statement of income.
2. Information about each geographic area
(1) Net sales(Unit: JPY thousand)Japan

The Cayman Islands
12,000,955

Total

3,914,026

15,914,981(Note) Net sales are based on the location of the customer and categorized by country or territory.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted forover 90% of the amount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues
8,022,489

MyStays Hotel Management Co., Ltd.

41

Related segment
Real Estate Investment

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Rental Properties)
INV owns residential properties and hotels as core assets principally in the Tokyo area and major regional cities
with an aim to establish a portfolio focusing on both stability and growth potential. The book value changed
during the period, balance at the end of the period and the fair value are as follows.
Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)

Residences

Book value

Balance at the
beginning of theperiodChange during theperiodBalance at the end of
the period

Fair value at the end of the period

Commercial
facilities

Book value

Balance at the
beginning of theperiodChange during theperiodBalance at the end of
the period

Fair value at the end of the period

HotelsBook value

Balance at the
beginning of theperiodChange during theperiodBalance at the end of
the period

Fair value at the end of the period

Total

Book value

Balance at the
beginning of theperiodChange during theperiodBalance at the end of
the period

Fair value at the end of the period(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

34,567,566

34,383,500-184,066-172,720

34,383,500

34,210,779

47,357,000

48,017,000

1,621,984

1,605,322-16,661-16,598

1,605,322

1,588,724

2,380,000

2,380,000

409,587,102

407,302,979-2,284,122-2,603,993

407,302,979

404,698,985

482,833,730

510,566,211

445,776,652

443,291,801-2,484,850-2,793,312

443,291,801

440,498,489

532,570,730

560,963,211(Note 1) Book value is the figure calculated by subtracting accumulated depreciation from acquisition price(including acquisition-related costs).
(Note 2) The major factors of increase in change during the previous fiscal period were construction work related
to capital expenditures, and the major factors of decrease were depreciation. The major factors ofincrease in change during the Reporting Period were construction work related to capital expenditures,and the major factor of decrease was depreciation.
(Note 3) The fair value as of the end of the period is determined based on the appraisal value or survey value
provided by Asset Research and Development Inc., Japan Real Estate Institute, JLL Morii Valuation &Advisory K.K., Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd. and CBRE,Inc.
For information related to profits and losses from rental properties, please refer to “Notes to Statement of Income
and Retained Earnings.”

42

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Tax Accounting)
1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)Fiscal period ended
June 30, 2023
(as of June 30, 2023)

Fiscal period ended
December 31, 2022
(as of December 31, 2022)(Deferred tax assets)
Enterprise tax payable
Buildings and other (merger)
Land (merger)
Loss carried forward (Note 1)

615

615

186,398

185,229

116,724

116,724

1,609,063

1,288,595

Asset retirement obligations

10,656

10,727

Amortization of fixed-term leasehold rights
Adjustment of acquisition prices (overseas
properties)

162,054

174,196

449,589445,643

Subtotal
Valuation allowance for tax loss carriedforwardValuation allowance for the total of deductible
temporary differences, etc.

2,535,101

2,221,732-1,609,063-1,288,595-926,038-933,137-2,535,101-2,221,732--

Subtotal (Note 2)
Total(Note 1) The amounts of tax loss carried forward and the deferred tax assets by carry-forward period are as
follows.
Fiscal period ended December 31, 2022 (as of December 31, 2022)(Unit: JPY thousand)Due within
one year

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years

Due after
five years

Total

Tax loss carriedforward (a)330,700

-

-

-

-

1,278,362 1,609,063

Valuation allowance-330,700

-

-

-

-

-1,278,362 -1,609,063

Deferred tax assets

-

-

-

-

-

-

-

(a) Tax loss carried forward is multiplied by statutory tax rate.
Fiscal period ended June 30, 2023 (as of June 30, 2023)(Unit: JPY thousand)Due within
one year

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years

Due after
five years

Total

Tax loss carriedforward (a)

-

-

-

-

-

1,288,595 1,288,595

Valuation allowance

-

-

-

-

-

-1,288,595 -1,288,595

Deferred tax assets

-

-

-

-

-

-

-

(a) Tax loss carried forward is multiplied by statutory tax rate.
(Note 2) Valuation allowance decreased by JPY 313,369 thousand mainly due to a decrease in tax loss carriedforward.

43

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

2. Significant difference between statutory tax rate and the effective tax rate

Statutory tax rate

Fiscal period ended
December 31, 2022
(as of December 31, 2022)
31.46(Unit: %)Fiscal period ended
June 30, 2023
(as of June 30, 2023)
31.46

Deductible cash distributions-31.44-31.50Changes in valuation allowance

-3.60

-3.52

Expiration of loss carried forward

3.58

3.55

Others0.01

0.01

Effective tax rate

0.01

0.01

(Notes Related to Equity-Method Income)Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)
Amount of investment in affiliates
Amount of investment when accounted for by the equity method
Amount of investment profit when accounted for by the equity method

JPY 17,856,387 thousand
JPY 17,360,140 thousand
JPY -59,347 thousand

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)
Amount of investment in affiliates
Amount of investment when accounted for by the equity method
Amount of investment profit when accounted for by the equity method

44

JPY 17,856,387 thousand
JPY 17,341,860 thousand
JPY -18,280 thousandFinancial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Transactions with Related Parties)
1. Transactions with Parent Company and Major Corporate Unitholders
Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)
Balance atClassification

Interested
party of CIM

Name

Address

Statedcapital Business or(JPYoccupation
million)

Percentage
Transaction
Relationshipthe end ofof votingamountType ofthe periodrights(JPY
Account
Common Business transaction
(JPY
owned
thousand)board
relationthousand)(%)(Note 1)
membership(Note 1)Naqua Hotel &Resorts
Minato-ku,
Management
Tokyo
Co., Ltd.
(Note 2)10

Hotelbusiness--

Lessee andoperator of
hotelsRentalrevenues

1,152,194

Accounts
receivable

MyStays HotelManagement Minato-ku,
Co., Ltd.
Tokyo(Note 2)

100

Hotel
business--

Lessee andoperator of
hotelsRentalrevenues

5,771,441

Accounts
3,864,932
receivable

404,531(Note 1) Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have no capital relationship to bedisclosed with CIM. However, these tenants and operators have received an anonymous partnership investment orinvestment through funds that are managed by affiliates of FIG (a subsidiary of SoftBank Group Corp., which is a parent
company of CIM directly/indirectly owning 100% of its issued shares). Accordingly, INV treats Naqua Hotel & Resorts
Management Co., Ltd. and MyStays Hotel Management Co., Ltd. as the equivalent to interested parties.

Fiscal period ended June 30, 2022 (from January 1, 2022 to June 30, 2022)
Balance atClassification

Interested
party of CIM

Name

Address

Statedcapital Business or(JPYoccupation
million)

Percentage
Transaction
Relationshipthe end ofof votingamountType ofthe periodrights(JPY
Account
Common Business transaction
(JPY
owned
thousand)board
relationthousand)
(%)
(Note
1)
membership(Note 1)Naqua Hotel &Resorts
Minato-ku,
Management
Tokyo
Co., Ltd.
(Note 2)10

Hotelbusiness--

Lessee andoperator of
hotelsRentalrevenues

MyStays HotelManagement Minato-ku,
Co., Ltd.
Tokyo(Note 2)

100

Hotel
business--

Lessee andoperator of
hotelsRentalrevenues

Accounts
612,959 receivable

261,128

Accounts
8,022,489 receivable 3,227,566(Note 1) Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) Naqua Hotel & Resorts Management Co., Ltd. and MyStays Hotel Management Co., Ltd. have no capital relationship to bedisclosed with CIM. However, these tenants and operators have received an anonymous partnership investment orinvestment through funds that are managed by affiliates of FIG (a subsidiary of SoftBank Group Corp., which is a parent
company of CIM indirectly owning 100% of its issued shares). Accordingly, INV treats Naqua Hotel & Resorts Management
Co., Ltd. and MyStays Hotel Management Co., Ltd. as the equivalent to interested parties.

2.

Transactions with Affiliates
None for both the fiscal period ended December 31, 2022 and the fiscal period ended June 30, 2023.

3.

Transactions with Companies under Common Control
None for both the fiscal period ended December 31, 2022 and the fiscal period ended June 30, 2023.

45

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

4.

Transactions with Directors and Major Individual Unitholders
Fiscal period ended December 31, 2022 (from July 1, 2022 to December 31, 2022)

Details of transaction

Transaction
amount(JPY
thousand)(Note 3)

Account

Balance atthe end of
the period(JPY
thousand)(Note 3)

Classification

Name

Business or occupation

Ratio ofvotingrights(%)

Directors
and close
relatives

Naoki
FukudaExecutive Director of
INV and President &CEO of CIM-

Payment of asset
management fees to
CIM (Note 1)

300,064

Accruedexpenses

165,000-

Payment ofadministrative
agency fees fororganizational
management to CIM(Note 2)

1,100

Accruedexpenses

880

Same asabove(Note 1)
(Note 2)
(Note 3)Same asabove

Same as above

Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in the Articles ofIncorporation of INV.
Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in “Administrative
Agency Agreement for Organizational Management,” entered into by and between INV and CIM.
Consumption taxes, etc. are not included in the transaction amounts, but are included in the balance at the end of
the period.

Fiscal period ended June 30, 2023 (from January 1, 2023 to June 30, 2023)

Details of transaction

Transaction
amount(JPY
thousand)(Note 3)

Account

Balance atthe end of
the period(JPY
thousand)(Note 3)

Classification

Name

Business or occupation

Ratio ofvotingrights(%)

Directors andclose relatives

Naoki
FukudaExecutive Director of
INV and President &CEO of CIM-

Payment of asset
management fees to
CIM (Note 1)

300,000

Accruedexpenses

165,000-

Payment ofadministrative
agency fees fororganizational
management to CIM(Note 2)600

Accruedexpenses

330

Same asabove(Note 1)
(Note 2)
(Note 3)Same asabove

Same as above

Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in the Articles ofIncorporation of INV.
Naoki Fukuda served as a representative of the third party (CIM), and the fee is as set forth in “Administrative
Agency Agreement for Organizational Management,” entered into by and between INV and CIM.
Consumption taxes, etc. are not included in the transaction amounts, but are included in the balance at the end of
the period.

46

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Parent Company or Any Material Affiliated Company)
1. Information of parent company
Not applicable
2. Summarized financial information of material affiliated company
Kingdom Special Purpose Company was the material affiliated company during the Reporting Period, andthe summary of financial statements are as below:(Unit: JPY thousand)
Kingdom Special Purpose Company
From April 1, 2022
to September 30, 2022
Total specified assets
Total other assets

100,114,466
1,550,642

From October 1,
2022 to March 31,
2023
99,527,689
1,974,338

Total current liabilities
Total non-current liabilities

73,592
66,184,166

161,81765,970,166

Total net assets

35,407,351

35,370,044

565,320-120,512-121,117

652,802-36,702-37,307

Operating revenue
Income before income taxes
Net income(Notes Related to Per Unit Information)

Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)

Net assets per unit

JPY 41,058

JPY 41,665

Net income per unit

JPY 832

JPY 1,462

Net income per unit is calculated by dividing net income for the period by the average number of investment
units during the period. Diluted net income per unit is not stated as there are no diluted units.
(Note 1)The basis for calculating net income per unit is as follows.

Net income (JPY thousand)Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units(JPY thousand)Average number of investment units during theperiod (units)

47

Fiscal period ended
December 31, 2022
(from July 1, 2022 to
December 31, 2022)
5,075,336

Fiscal period ended
June 30, 2023
(from January 1, 2023 toJune 30, 2023)
8,913,742--

5,075,336

8,913,742

6,096,840

6,096,840

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(Notes Related to Significant Subsequent Events)
1. Issuance of new investment units
INV resolved at its meetings of the Board of Directors held on July 19, 2023 and July 25, 2023 respectively to
conduct the issuance of new investment units and secondary offering of investment units. Payment for the
new investment units issued through the public offering was completed on July 31, 2023, in accordance withthe following terms and conditions. As a result, the unitholders’ capital of INV is JPY 268,463 million andthe number of investment units issued and outstanding of INV increased to 6,706,632.

(1) Issuance of new investment units through public offering
Number of investment units to be offered:

609,792 investment units

Of which domestic public offering:

353,680 investment units

overseas offering:

256,112 investment units

Issue price (offer price):

JPY 55,566 per unit

Total issue price (total offer price)

JPY 33,883,702,272

Amount to be paid (issue value):

JPY 53,726 per unit

Total amount to be paid (total issue value):

JPY 32,761,684,992

Payment date:July 31, 2023

(2) Secondary offering of investment units (overallotment secondary offering)Number of investment units to be offered:

30,489 investment units

Offer price:

JPY 55,566 per unit

Total offer value:

JPY 1,694,151,774

Delivery date:August 1, 2023

(3) Issuance of new investment units through third-party allotment (Note 1)
Number of investment units to be offered:

30,489 investment units

Amount to be paid (issue value):

JPY 53,726 per unit

Total amount to be paid (total issue value):

JPY 1,638,052,014

Payment date:August 28, 2023

Allottee(Note 1)

Mizuho Securities Co., Ltd.

In relation to the overallotment secondary offering, the investment units will be issued for the purpose of allowing
Mizuho Securities Co., Ltd. to acquire investment units required for returning the borrowed investment units.
Consequently, there may be cases where there will be no application for whole or part of the investment units to beissued through the third-party allotment, resulting in a commensurate shortfall in the ultimate number ofinvestment units to be issued through the third-party allotment, due to forfeiture, or there may be cases where such
issuance itself will not take place at all.

48

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

2. Debt Financing
In order to fund a portion of the acquisition price for six hotel properties (domestic real estate trust
beneficiary interests) acquired on August 1, 2023, INV resolved the following debt financing at a meeting of
the Board of Directors held on July 19, 2023, and entered into a loan agreement on the same day.
New Syndicate Loan (010)
LenderOutstanding balance
Interest rate, etc.

:::

Interest payment date:Principal repayment method
Borrowing method
Borrowing date
Maturity date

:
:
:
:

Syndicate of lenders arranged by Mizuho Bank, Ltd.
JPY 29,856 million
Base Rate (3-month JPY TIBOR) + 0.500%, 0.300%
Base Rate (1-month JPY TIBOR) + 0.200%
The last Japanese business day of March, June, September,and December before the principal maturity date,
beginning with September 30, 2023, and the principal
maturity date
The last Japanese business day of each month before theprincipal maturity date, beginning with August 31, 2023,
and the principal maturity dateLump-sum repayment
Unsecured/ non-guarantee
August 1, 2023
July 14, 2028, July 16, 2026, August 1, 2024

3. Acquisition of assets (properties)
INV resolved acquisition of the following six hotel properties (total acquisition price: JPY 57,230 million) on
July 19, 2023 and completed the acquisition on August 1, 2023.
Property Number: D84

Fusaki Beach Resort Hotel & Villas

Acquisition Date

August 1, 2023

Acquisition Price (Note 1)

JPY 40,293 million

LocationIshigaki-shi, Okinawa

Completion Date

June 1982
June 2019
March 2020

Legal Form of Asset

Trust beneficiary interest

SellerSheffield Asset Tokutei Mokuteki Kaisha

Total Floor Area

23,573.57 m2

Total Leasable Area

23,573.57 m2

Property Number: D85

Tateshina Grand Hotel Takinoyu

Acquisition Date

August 1, 2023

Acquisition Price (Note 1)

JPY 8,365 million

Location

Chino-shi, Nagano

Completion Date

August 1966
July 1967
July 1988

Legal Form of Asset

Trust beneficiary interest

Seller

Heijo Tokutei Mokuteki Kaisha

Total Floor Area

20,577.41 m2

Total Leasable Area

20,577.41 m2
49

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Property Number: D86

Hotel MyStays Okayama

Acquisition Date

August 1, 2023

Acquisition Price (Note 1)

JPY 2,613 million

Location

Okayama-shi, Okayama

Completion Date

March 1986

Legal Form of Asset

Trust beneficiary interest

Seller

Nippori Tokutei Mokuteki Kaisha

Total Floor Area

3,023.27 m2

Total Leasable Area

3,023.27 m2

Property Number: D87

Hotel MyStays Aomori Station

Acquisition Date

August 1, 2023

Acquisition Price (Note 1)

JPY 2,445 million

Location

Aomori-shi, Aomori

Completion Date

June 2007

Legal Form of Asset

Trust beneficiary interest

SellerShiretoko Tokutei Mokuteki Kaisha

Total Floor Area

3,963.86 m2

Total Leasable Area

3,963.86 m2

Property Number: D88

Hotel MyStays Soga

Acquisition Date

August 1, 2023

Acquisition Price (Note 1)

JPY 2,039 million

Location

Chiba-shi, Chiba

Completion Date

February 1994

Legal Form of Asset

Trust beneficiary interest

Seller

Nippori Tokutei Mokuteki Kaisha

Total Floor Area

3,398.18 m2

Total Leasable Area

3,398.18 m2

Property Number: D89

Tazawako Lake Resort & Onsen

Acquisition Date

August 1, 2023

Acquisition Price (Note 1)

JPY 1,475 million

Location

Senboku-shi, Akita

Completion Date

December 1981
November 1988

Legal Form of Asset

Trust beneficiary interest

Seller

Heijo Tokutei Mokuteki Kaisha

Total Floor Area

7,289.75 m2

Total Leasable Area

7,289.75 m2(Note 1) Acquisition price is based on the purchase price indicated in the relevant purchase agreement and does not include acquisitionrelated expenses, property taxes, city planning taxes or consumption taxes.

(10) Changes in Total Number of Investment Units Issued and Outstanding50

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Changes in the number of investment units issued and outstanding and unitholders’ capital for the past
five years up to the end of the Reporting Period are as follows.

Date

Type of Issue

Total Number of
Investment Units Issued andOutstanding (units)
Increase

Total

Unitholders’ Capital (JPY)
Increase

Total

Reference

August 1, 2018

Public offering

909,524

5,702,705

40,280,089,388

209,078,544,702(Note 1)

August 21, 2018

Third-party
allotment

45,476

5,748,181

2,013,995,612

211,092,540,314(Note 2)

December 28, 2018

Retirement-81,341

5,666,840-

211,092,540,314(Note 3)

July 18, 2019

Public offering

409,524

6,076,364

23,317,887,036

234,410,427,350(Note 4)

20,476

6,096,840

1,165,882,964

235,576,310,314(Note 5)-

6,096,840

125,201,855

235,701,512,169(Note 6)

August 15, 2019

August 22, 2019

(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)

Third-party
allotment
Reversal of
allowance fortemporarydifferences
adjustment

New investment units were issued through public offering at a price of JPY 45,776 per unit (JPY 44,287 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
New investment units were issued through third-party allotment at a price of JPY 44,287 per unit for the purposeof raising a part of the funds for the acquisition of new properties.
INV acquired own investment units from December 13, 2018 to December 18, 2018 (on a trade date basis) throughthe market purchase at Tokyo Stock Exchange based on a discretionary transaction contract with a securities
company.
INV resolved the retirement of all the acquired own investment units at the Board of Directors' Meeting held on
December 25, 2018 and the acquired own investment units were retired on December 28, 2018.
The acquisition of own investment units was conducted using capital surplus, and thus there is no change tounitholders’ capital.
New investment units were issued in a public offering at a price of JPY 58,898 per unit (JPY 56,939 after deducting
the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
New investment units were issued in a third-party allotment at a price of JPY 56,939 per unit for the purpose ofraising a part of the funds for the acquisition of specified assets.
Reversal of allowance for temporary differences adjustment was decided at the meeting of the Board of Directors of
INV held on August 22, 2019 and the amount was incorporated into unitholders’ capital.

51

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

3. Reference Information(1)

Type ofasset

Composition of INV’s Assets

Geographic
area

PurposeFiscal period ended December 31, 2022
(as of December 31, 2022)
Percentage of
total assets(%)

Amount held
(JPY million)

2

0.0

2

0.0

-

-

-

-

Overseas (Note 4)

33,546

6.8

33,168

6.7

Subtotal

33,5496.8

33,170

6.7

33,5496.8

33,1706.7

28,483

5.8

28,383

5.7

5,900

1.2

5,827

1.2

34,383

7.0

34,210

6.9

-

-

-

-

1,605

0.3

1,588

0.3

1,605

0.3

1,588

0.3

167,03533.8

166,28533.5

206,71841.8

205,24341.3

373,75375.6

371,52874.8(Note 1)

Amount held
(JPY million)(Note 2)Real
estateHotelsGreater Tokyo
area (Note 3)
Major regional
CitiesTotal real estate

Residences

Greater Tokyo
area
Major regional
citiesSubtotal

Greater Tokyo
area
Real
Offices/Commercial
Major regional
estate infacilities
citiestrust
Subtotal

HotelsFiscal period ended June 30, 2023
(as of June 30, 2023)

Greater Tokyo
area
Major regional
citiesSubtotal(Note 2)

Percentage of
total assets(%)

Total real estate in trust

409,74182.9

407,32782.0

Preferred equity interest (Note 5)

17,856

3.6

17,856

3.6

Deposits and other assets

33,0896.7

38,465

7.7

494,237100.0

496,819100.0(443,291)(89.7)(440,498)(88.7)

Total assets (Note 6)(Note 1)“Greater Tokyo area” refers to Tokyo, Kanagawa, Chiba and Saitama.

(Note 2) “Amount held” is from the balance sheet as of the end of the Reporting Period (book value after depreciation for real estate,leasehold and real estate in trust). The amounts held for hotels are calculated by including book value of accompanying FF&E,
in principle.
(Note 3)(Note 4)(Note 5)(Note 6)

While Hotel MyStays Haneda is held as trust beneficiary interests, part of accompanying FF&E is held in kind, which falls under
this category.
The Leasehold of the Cayman Hotels falls under the category of “Real estate” for “Overseas.” The leasehold interests are therights equivalent to long-term real estate leasehold rights for buildings and land under the laws of the Cayman Islands (Term:
99 years; annual lease payment: USD 1 or KYD 1). INV implemented an investment structure change regarding “Westin Grand
Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort” on May 9, 2019 (Cayman Islands local time), a change
from making investments based on the TK agreement to directly owning the Leasehold of the Cayman Hotels, which were theunderlying assets of the TK.
Preferred equity interest issued by Kingdom Special Purpose Company, with the Sheraton Grande Tokyo Bay Hotel as anunderlying asset (asset in trust of trust beneficiary interest acquired by Kingdom Special Purpose Company, which is the realestate that serves as the main source of revenue for Kingdom Special Purpose Company).
The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate (excluding the amountof preferred equity interest).

52

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Fiscal period ended December 31, 2022
(as of December 31, 2022)
Percentage ofAmount (JPY million)
total assets (%)

Fiscal period ended June 30, 2023
(as of June 30, 2023)
Percentage ofAmount (JPY million)
total assets (%)

Total Liabilities

243,91649.4

242,795

48.9

Total Net Assets

250,32150.6

254,024

51.1

Total Liabilities
and Net Assets

494,237100.0

496,819

100.0

(2)

Real Estate Properties, Etc.
The following summarizes the real estate assets (real estate or trust beneficiary interest comprised mainlyof real estate) as well as preferred equity interest held by INV as of the end of the Reporting Period.

aPrice and investment percentage

Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)
Trust
Nisshin Palacestage
beneficiaryA26
1-31-2 Izumi, Suginami-ku, Tokyo
1,251
1,087
0.3
1,290
A
Daitabashi
interests(Note 8)Trust
2-26-6 Nishi-Gotanda,
A28 Growth Maison Gotanda
beneficiary
888
815
0.2
1,120
A
Shinagawa-ku, Tokyo
interests
Trust
Growth Maison
A29
6-58-16 Kameido, Koto-ku, Tokyo beneficiary
1,070
926
0.2
1,280
A
Kameidointerests
Trust
3-27-18 Itabashi, Itabashi-ku,
A30 Emerald House
beneficiary
1,505
1,300
0.3
1,480
A
Tokyo
interests
Trust
3-15-35 Takanodai, Nerima-ku,
beneficiary
A32 Suncrest Shakujii-Koen
1,088
1,045
0.2
1,250
A
Tokyo
interests(Note 8)Trust
Growth Maison Shin3-16-2 Shin-Yokohama, Kohoku- beneficiary
A33
1,059
925
0.2
1,290
A
Yokohama
ku, Yokohama-shi, Kanagawa
interests(Note 8)
Trust
Belle Face Ueno1-27-10 Higashi-Ueno, Taito-ku,
beneficiary
A34
1,023
899
0.2
1,160
A
Okachimachi
Tokyointerests(Note 8)Trust
beneficiary
A35 Grand Rire Kameido
3-39-12 Kameido, Koto-ku, Tokyo
906
762
0.2
1,090
A
interests(Note 8)Trust
1-15-15 Okamoto, Setagaya-ku,
beneficiary
A37 Growth Maison Yoga
795
708
0.2
844
A
Tokyo
interests(Note 8)Trust
3-7-6 Nishikicho, Tachikawa-shi,
A38 Route Tachikawa
beneficiary
676
641
0.1
713
A
Tokyo
interests
Trust
Shibuya-Honmachi
2-35-2 Honmachi, Shibuya-ku,
beneficiary
A39
651
712
0.1
724
A
MansionTokyo
interests(Note 8)53

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
4-13-15 Kinuta, Setagaya-ku,
A40 City Heights Kinuta
beneficiary
646
659
0.1
624
A
Tokyo
interests
Trust
2-5-13 Namiki, Kawaguchi-shi,
Acseeds Tower
beneficiary
A41
620
490
0.1
810
A
Saitama
Kawaguchi-Namiki
interests(Note 8)Trust
3-4-4 Nakamachi, Machida-shi,
beneficiary
A43 College Square Machida
589
550
0.1
526
A
Tokyo
interests(Note 8)Trust
beneficiary
A44 Belair Meguro
1-2-15 Meguro, Meguro-ku, Tokyo
589
545
0.1
646
A
interests(Note 8)Trust
2-7-47 Tarumachi, Kohoku-ku,
beneficiary
A45 Wacore Tsunashima I
572
549
0.1
562
A
Yokohama-shi, Kanagawa
interests(Note 8)Trust
1-6-6 Kouyama, Nerima-ku,
beneficiary
A46 Foros Nakamurabashi
566
492
0.1
636
A
Tokyo
interests(Note 8)Trust
5-29-51 Kaijin, Funabashi-shi,
beneficiary
A47 Growth Maison Kaijin
557
516
0.1
561
A
Chiba
interests(Note 8)Trust
7-3-1 Arakawa, Arakawa-ku,
beneficiary
A48 College Square Machiya
510
423
0.1
615
A
Tokyo
interests(Note 8)
Trust
Towa City Coop
5-49-7 Higashi-Ikebukuro,
beneficiary
A59
866
784
0.2
1,390
B
Shinotsuka II
Toshima-ku, Tokyo
interests
Trust
1-22-7 Sekimachi-Kita, Nerima-ku,
beneficiary
A61 Bichsel Musashiseki
577
574
0.1
868
C
Tokyo
interests
Trust
Towa City Coop
4-338-2 Sengencho, Nishi-ku,
beneficiary
A63
1,110
997
0.2
1,570
B
Sengencho
Yokohama-shi, Kanagawa
interests
Trust
2-11-10 Omachi, Aoba-ku,
beneficiary
A64 Royal Park Omachi
415
377
0.1
717
B
Sendai-shi, Miyagi
interests
Trust
Lexington Square
1-15-18 Haginomachi,
beneficiary
A65
330
254
0.1
464
B
Haginomachi
Miyagino-ku, Sendai-shi, Miyagi
interests
Trust
2-44 Otanacho, Chikusa-ku,
beneficiary
A66 Visconti Kakuozan
255
226
0.1
310
D
Nagoya-shi, Aichi
interests
Trust
Lexington Square Honjo 4-20-6 Higashikomagata,beneficiary
A72
511
401
0.1
754
D
Azumabashi
Sumida-ku, Tokyo
interests
Trust
AMS TOWER Minami
2-5-15 Minami 6-Jo Nishi,
beneficiary
A73
1,180
840
0.2
1,270
D
6-Jo
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
2-13-17 Heian, Kita-ku,
beneficiary
A84 Revest Heian
595
484
0.1
878
B
Nagoya-shi, Aichi
interests
Trust128-1 Yamabukicho Shinjuku-ku,
beneficiary
A87 Excellente Kagurazaka
543
484
0.1
865
B
Tokyo, and one other parcel
interests

54

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
A90 Queen's Court Fukuzumi 1-3-10 Fukuzumi, Koto-ku, Tokyo beneficiary
456
404
0.1
817
B
interests
Trust
5-14-17 Higashi-Oi, Shinagawabeneficiary
A92 Belair Oimachi
412
376
0.1
685
B
ku, Tokyo
interests
Trust
3-18-29 MinamiA93 Siete Minami-Tsukaguchi Tsukaguchimachi, Amagasaki-shi, beneficiary
374
326
0.1
573
B
interests
Hyogo
Trust
Prime Life Sannomiya
4-3-23 Isogamidori, Chuo-ku,
beneficiary
A94
373
320
0.1
578
B
Isogami Koen
Kobe-shi, Hyogo
interests
Trust
Century Park Shinkawa 4-1-2 Shinkawacho, Minato-ku,
beneficiary
A96
335
288
0.1
549
B
1-bankan
Nagoya-shi, Aichi
interests
Trust
A97 West Avenue
1-5-17 Nishi, Kunitachi-shi, Tokyo beneficiary
331
304
0.1
429
B
interests
Trust
2-25-11 Mikage Tsukamachi,
beneficiary
A99 Prime Life Mikage
297
254
0.1
439
B
Higashinada-ku, Kobe-shi, Hyogo
interests
Trust
5-45-10 Mukojima, Sumida-ku,
beneficiary
A101 Lieto Court Mukojima
1,683
1,577
0.3
2,310
B
Tokyo
interests
Trustbeneficiary
A102 Lieto Court Nishi-Ojima 2-41-14 Ojima, Koto-ku, Tokyo
1,634
1,526
0.3
2,240
B
interests
Trust
5-38 Fudegasakicho, Tennouji-ku,
beneficiary
A103 Royal Parks Momozaka
2,910
2,453
0.6
3,280
C
Osaka-shi, Osakainterests
Trust
3-35-20 Shinden, Adachi-ku,
beneficiary
A104 Royal Parks Shinden
5,024
4,474
1.0
6,460
C
Tokyo
interests
Trust
Royal Parks Seasir
3-41-7 Minami-Senju, Arakawabeneficiary
A106
2,683
2,425
0.5
3,350
B
Minami-Senju
ku, Tokyo
interests
Subtotal (41 properties)

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa-shi,
Fukushima

Trust
beneficiaryinterests

Subtotal (1 property)

D01

D02

D03

D04

D05

D06

Trust
beneficiaryinterests
Trust
Hotel MyStays Asakusa 1-21-11 Honjo, Sumida-ku, Tokyo beneficiaryinterests
Trust
52, Kasabokocho, Higashiiru,
Hotel MyStays Kyotobeneficiary
Aburanokoji, Shijyodori,Shijointerests
Shimogyo-ku, Kyoto-shi, Kyoto
Trust
MyStays Shin-Urayasu
2-1-4 Akemi, Urayasu-shi, Chiba beneficiary
Conference Centerinterests
Trust
3-5-1 Tekkodori, Urayasu-shi,
Hotel MyStays Maihama
beneficiary
Chibainterests
Trust
Hotel MyStays Premier 2-4-1 Sonezakishinchi, Kita-ku,
beneficiary
DojimaOsaka-shi, Osakainterests
Hotel MyStays Kanda

1-2-2 Iwamotocho, Chiyoda-ku,
Tokyo

55

38,46534,2107.8

48,017

-

2,320

1,588

0.5

2,380

C

2,320

1,588

0.5

2,380

-

2,851

2,779

0.6

4,930

B

2,584

2,443

0.5

4,420

B

6,024

5,441

1.2

8,250

B

4,930

4,353

1.0

7,400

B

4,870

4,467

1.0

6,960

B

3,845

3,564

0.8

6,470

B

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)
Trust
Hotel MyStays Nagoya- 2-23-22 Higashi-Sakura, Naka-ku,
beneficiary
D07
2,958
2,489
0.6
5,570
B
Sakae
Nagoya-shi, Aichi
interests
Trust
Hotel MyStays
1-4-8 Awaji-machi, Chuo-ku,
beneficiary
D08
2,514
2,220
0.5
3,250
B
Sakaisuji-Honmachi
Osaka-shi, Osakainterests
Trust
Hotel MyStays
4-81 Sueyoshicho, Naka-ku,
beneficiary
D09
2,119
2,080
0.4
4,000
B
Yokohama
Yokohama-shi, Kanagawa
interests
Trust
5-43-7 Higashi-Nippori,beneficiary
D10 Hotel MyStays Nippori
1,898
1,719
0.4
2,510
B
Arakawa-ku, Tokyo
interests
Trust
Hotel MyStays
3-14-20 Haruyoshi, Chuo-ku,
beneficiary
D11
1,570
1,378
0.3
5,640
B
Fukuoka-Tenjin-Minami Fukuoka-shi, Fukuoka
interests
Trust
3-26 Shin-Ogawamachi,
beneficiaryD12 Flexstay Inn Iidabashi
1,381
1,306
0.3
2,090
B
Shinjuku-ku, Tokyo
interests
Trust
Hotel MyStays Ueno
D13
1-5-7 Matsugaya, Taito-ku, Tokyo beneficiary
1,331
1,168
0.3
2,000
B
Inarichointerests
Trust
1-22-19 Kita-Shinagawa,beneficiaryD14 Flexstay Inn Shinagawa
1,242
1,162
0.3
1,990
B
Shinagawa-ku, Tokyo
interests
Trust
1-52-5 Tokiwadai, Itabashi-ku,
beneficiary
D15 Flexstay Inn Tokiwadai
1,242
1,174
0.3
2,130
B
Tokyo
interests
Trust
3-6-16 Sugamo, Toshima-ku,
beneficiaryD16 Flexstay Inn Sugamo
1,192
1,063
0.2
2,200
B
Tokyo
interests
Trust
1-3-2 Tokuicho, Chuo-ku,
beneficiary
D17 Hotel MyStays Otemae
1,192
1,101
0.2
2,450
B
Osaka-shi, Osakainterests
Trust
Hotel MyStays Kiyosumi
beneficiary
D18
1-12-16 Tokiwa, Koto-ku, Tokyo
749
827
0.2
1,470
B
Shirakawainterests
Trust
Flexstay Inn Nakanobu 4-27-12 Futaba, Shinagawa-ku,
beneficiary
D19
589
541
0.1
817
B
P1
Tokyo
interests
Trust
Flexstay Inn Nakanobu 4-27-8 Futaba, Shinagawa-ku,
beneficiary
D20
283
276
0.1
393
B
P2
Tokyo
interests
Trust
APA Hotel Yokohama- 3-37-2 Sumiyoshicho, Naka-ku,
beneficiary
D21
8,350
7,158
1.7
9,870
B
Kannai
Yokohama-shi, Kanagawa
interests
Trust
Hotel MyStays
26-17 Honcho, Hakodate-shi,
beneficiary
D22
2,792
2,563
0.6
3,920
B
Hakodate-Goryokaku
Hokkaido
interests
Trust
5-10-15 Shirokane, Minato-ku,
beneficiary
D23 Flexstay Inn Shirogane
2,119
2,048
0.4
2,420
B
Tokyo
interests
Trustbeneficiary
D24 Hotel MyStays Haneda 5-1-13 Haneda, Ota-ku, Tokyo
7,801
6,908
1.6
8,390
B
interests
Trust
Hotel MyStays Kameido
D25
6-32-1 Kameido, Koto-ku, Tokyo beneficiary
5,594
5,188
1.1
7,550
B
P1
interests
Trust
Hotel MyStays Ueno
5-5-13 Higashi-Ueno, Taito-ku,
beneficiary
D26
3,821
3,554
0.8
3,940
B
IriyaguchiTokyo
interests
Trust
Hotel MyStays Kameido
beneficiaryD27
6-7-8 Kameido, Koto-ku, Tokyo
3,742
3,429
0.8
5,060
B
P2
interests

56

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
1-23 Masagocho, Shimizu-ku,
beneficiary
D28 Hotel MyStays Shimizu
2,198
1,978
0.4
2,480
B
Shizuoka-shi, Shizuoka
interests
Trust
Super Hotel Shinbashi/ 5-16-4 Shinbashi, Minato-ku,
beneficiary
D29
1,624
1,557
0.3
1,870
B
KarasumoriguchiTokyo
interests
Trustbeneficiary
D30 Flexstay Inn Higashi-Jujo 2-10-2 Nakajujo, Kita-ku, Tokyo
1,277
1,248
0.3
1,380
B
interests
Trust
Hotel MyStays
2-4-1 Higashi-Shukugo,
beneficiary
D31
1,237
1,155
0.3
2,110
B
Utsunomiya
Utsunomiya-shi, Tochigi
interests
Trust
Flexstay Inn Kawasaki- 1-13-2 Kaizuka, Kawasaki-ku,
beneficiary
D32
980
854
0.2
1,160
B
Kaizuka
Kawasaki-shi, Kanagawa
interests
Trust
1-3-2 Takara-machi, Toyama-shi,
beneficiary
D33 Comfort Hotel Toyama
979
866
0.2
1,170
B
Toyamainterests
Trust
Flexstay Inn Kawasaki- 15-9 Ogawacho, Kawasaki-ku,
beneficiary
D34
906
846
0.2
902
B
Ogawacho
Kawasaki-shi, Kanagawa
interests
Trust
D35 Flexstay Inn Ekoda
8-6 Sakaecho, Nerima-ku, Tokyo beneficiary
5,069
4,701
1.0
4,650
B
interests
Trust
Super Hotel Tokyo-JR
2-21-9 Akebonocho, Tachikawabeneficiary
D36
1,170
1,046
0.2
1,210
E
Tachikawa Kitaguchi
shi, Tokyo
interests
Trust
Super Hotel JR UenobeneficiaryD37
7-9-14 Ueno, Taito-ku, Tokyo
1,130
1,039
0.2
1,180
E
iriyaguchiinterests
Trust
Hotel MyStays
1-9-30 Nishi-Shinsaibashi,
beneficiary
D38
3,160
2,918
0.6
2,110
B
Shinsaibashi
Chuo-ku, Osaka-shi, Osakainterests
Trust
3-13-13 Kurosaki, Yahatanishi-ku,
beneficiary
D39 Comfort Hotel Kurosaki
1,148
984
0.2
1,250
E
Kitakyusyu-shi, Fukuoka
interests
Trust
2-18-14 Omotecho, Maebashi-shi,
beneficiary
D40 Comfort Hotel Maebashi
1,128
918
0.2
1,140
E
Gunma
interests
Trust
Comfort Hotel TsubamebeneficiaryD41
2-115 Sugoro, Sanjo-shi, Niigata
1,010
879
0.2
1,080
E
Sanjo
interests
Trust
3-4 Ohdori-Nishi, Kitami-shi,
beneficiary
D42 Comfort Hotel Kitami
851
727
0.2
911
E
Hokkaido
interests
Trust
Hotel MyStays Gotanda 2-6-8 Nishi-Gotanda,
beneficiaryD43
26,523
26,127
5.4
23,900C
Station (Note 9)
Shinagawa-ku, Tokyo
interests
Trust
1-10 Kaidoue, Oaza-Takakuhei,
Hotel Epinard Nasu
beneficiaryD44
Nasu-machi, Nasu-gun, Tochigi
21,002
18,235
4.3
23,000C(Note 10)interests(and 59 other parcels)
Trust
Hotel MyStays Fukuoka 3-5-7 Tenjin, Chuo-ku, Fukuokabeneficiary
D45
8,059
7,610
1.6
8,200
C
Tenjinshi, Fukuoka
interests
Trust
Hotel MyStays
1-18-14 Hamamatsucho, Minatobeneficiary
D46
7,959
7,723
1.6
6,190
C
Hamamatsucho
ku, Tokyo
interests
Trust
Hotel MyStays Premier 2-13-5 Hirooka, Kanazawa-shi,
beneficiary
D47
13,761
12,2502.8
12,800C
Kanazawa
Ishikawa
interests
Trust
Takamatsu Tokyu REI
9-9 Hyogomachi, Takamatsu-shi,
beneficiary
D48
2,139
2,104
0.4
1,720
E
Hotel
Kagawainterests

57

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Property
number(Note 1)Name of property

Location(Note 2)

D49

Hotel MyStays Premier
Hamamatsucho

1-8-5 Hamamatsucho, Minato-ku,
Tokyo

D50

Hotel MyStays Shin
6-2-19 Nishinakashima,
Osaka Conference Center Yodogawa-ku, Osaka-shi, Osaka

D51

Hotel MyStays PremierOmori

6-19-3 Minami Oi, Shinagawa-ku,
Tokyo

D52

Kamenoi Hotel Beppu

5-17 Chuo cho, Beppu-shi, Oita

D53

Hotel MyStays Sapporo
Station4-15 Kita Hachijyo Nishi, Kita-ku,
Sapporo-shi, Hokkaido

D54

Hotel MyStays
Yokohama Kannai

5-65, Onoe-cho, Naka-ku,
Yokohama-shi, Kanagawa and3 other lots

D55

Art Hotel Joetsu

5-1-11, Hon-cho Joetsu-shi,
Niigata

D56

Art Hotel Hirosaki City

1-1-2, 1-1-6, 1-1-7, 1-2-1, Omachi,
Hirosaki-shi, Aomori

D57

Hotel MyStays Oita

1-32, Niagemachi Oita-shi, Oita

D58

Hotel MyStays Gotanda

2-5-4, Higashigotanda
Shinagawa-ku, Tokyo

D59

Hotel MyStays
Tachikawa

1-8-14, Nishiki-cho Tachikawashi, Tokyo

D60

Hotel MyStays Premier
Akasaka

2-17-54, Akasaka Minato-ku,
Tokyo

D61

Hotel MyStays Premier
Sapporo Park

2-2-10, Minamikujonishi Chuoku, Sapporo-shi, Hokkaido

D62

Hotel MyStays Ueno
East

5-5-6, Higashi Ueno Taito-ku,
Tokyo

D63

Hotel MyStays Midosuji 3-2-10, Honmachi, Chuo-ku,
HonmachiOsaka-shi, Osaka

D64

Hotel MyStays Sapporo
Aspen

5-1 Nishi 4-chome, Kita 8-jo, Kitaku, Sapporo-shi, Hokkaido, andseven other lots

D65

Art Hotel Ishigakijima554-2 Nishimaji Okawa, Ishigakishi, Okinawa, and four other lots

D66

Hotel MyStays Fuji
Onsen Resort

2654 Arakura Deguchi,
Fujiyoshida-shi, Yamanashi, and15 other lots

D67

Hotel Sonia Otaru

1-4-20 Ironai, Otaru-shi,
Hokkaido

D68

Hotel MyStays
Kanazawa Castle

10-17 Konohana-machi,
Kanazawa-shi, Ishikawa

D69

Art Hotel Niigata Station

1-1 Sasaguchi, Chuo-ku, Niigatashi, Niigata

Appraisal
Balancevalue at theAcquisition
sheet
Investment
end of theLegal form
price
carrying percentage
Appraiser
periodof asset (JPY million) value(%)(Note 7)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)Trust
beneficiary
8,000
7,900
1.6
10,300B
interests
Trustbeneficiary
13,06812,7472.7
13,100D
interests
Trustbeneficiary
9,781
9,721
2.0
10,000D
interests
Trustbeneficiary
8,870
7,633
1.8
9,050
D
interests
Trustbeneficiary
7,880
7,377
1.6
8,480
D
interests
Trustbeneficiary
5,326
5,026
1.1
5,500
D
interests
Trustbeneficiary
2,772
2,543
0.6
2,760
D
interests
Trustbeneficiary
2,723
2,515
0.6
2,750
D
interests
Trustbeneficiary
1,604
1,416
0.3
1,640
D
interests
Trustbeneficiary
4,068
4,034
0.8
4,110
D
interests
Trustbeneficiary
3,257
3,152
0.7
3,390
E
interests
Trustbeneficiary
20,691
20,094
4.2
23,100B
interests
Trustbeneficiary
16,731
15,843
3.4
16,300D
interests
Trustbeneficiary
5,286
5,103
1.1
5,370
D
interests
Trustbeneficiary
5,039
4,749
1.0
3,130
B
interests
Trustbeneficiary
15,543
15,107
3.2
15,400D
interests
Trustbeneficiary
9,731
9,374
2.0
9,510
B
interests
Trustbeneficiary
9,405
8,566
1.9
9,960
B
interests
Trustbeneficiary
5,930
5,481
1.2
6,010
D
interests
Trustbeneficiary
5,682
5,584
1.2
5,620
D
interests
Trustbeneficiary
5,524
5,184
1.1
5,550
D
interests

58

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)
Appraisal
Balancevalue at theAcquisition
sheet
Investment
Propertyend of the
Location
Legal form
price
carrying percentage
Appraiser
numberName of property
period(Note 2)of asset (JPY million) value(%)(Note 7)(Note 1)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)
Trust
Hotel MyStays Nagoya 3-8-21 Nishiki, Naka-ku, Nagoyabeneficiary
D70
5,197
5,026
1.1
5,110
C
Nishikishi, Aichi
interests
Trust
1-4-16 Ironai, Otaru-shi,
beneficiary
D71 Hotel Nord Otaru
4,296
4,096
0.9
4,240
D
Hokkaido
interests
Trust
Hotel MyStays
2-7 Yamanokuchi-cho,beneficiary
D72
3,445
3,305
0.7
3,490
E
Kagoshima Tenmonkan Kagoshima-shi, Kagoshima
interests
Trust
6-29-2 7-jo-dori, Asahikawa-shi,
beneficiary
D73 Art Hotel Asahikawa
3,197
2,841
0.7
3,180
D
Hokkaido
interests
Trust
Hotel MyStays
1-10-10 Otemachi, Matsuyamabeneficiary
D74
3,098
2,787
0.6
3,190
E
Matsuyamashi, Ehime
interests
Trust
1-6 Nishi 5-Chome, Minami 7-jo,
Hotel MyStays Sapporo
D75
Chuo-ku, Sapporo-shi, Hokkaido, beneficiary
3,059
2,954
0.6
2,920
C
Susukino
interests
and one other lot
Trust
Hotel MyStays Sapporo 1-20 Nishi 1-chome, Minami 14-jo,beneficiary
D76
2,118
2,002
0.4
1,980
C
Nakajima Park
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
Hotel MyStays Sapporo 4-3 Nishi 1-chome, Minami 11-jo,beneficiary
D77
1,584
1,504
0.3
1,560
D
Nakajima Park Annex
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
2-72-2 Hanasaki-cho, Naka-ku,
beneficiary
D78 Flexstay Inn Sakuragicho Yokohama-shi, Kanagawa, and
1,425
1,380
0.3
1,440
E
interests
four other lot
Trust
MyCUBE by MYSTAYS
beneficiary
D79
2-6-7 Kuramae, Taito-ku, Tokyo
1,287
1,255
0.3
1,250
E
Asakusa Kuramaeinterests
Hotel MyStays
Trust
1-20 Gofuku-machi, Kagoshimabeneficiary
D80 Kagoshima Tenmonkan
1,168
1,140
0.2
1,210
E
shi, Kagoshima
Annex
interests
Trust
11 Minami 5-chome, Nishi 3-jo,beneficiary
D81 Hotel MyStays Nayoro Nayoro-shi, Hokkaido, and one
957
852
0.2
958
C
interests
other lot
Trust
Hotel MyStays Premier 40 Yokomine Oyama, Narita-shi,
beneficiary
D82
10,593
9,821
2.2
10,400D
NaritaChibainterests
Trust
D83 Art Hotel Morioka
3-3-18 Odori, Morioka-shi, Iwate beneficiary
5,643
5,214
1.1
5,420
C
interests
66,08630,061The(USD
Westin Grand Cayman(USD30620 Seven Mile Beach Road,
455,800
LeaseholdD200 Seven Mile Beach
27,867
6.1
FGrand Cayman, Cayman Islands
272,171
thousand)Resort & SPA(Note 11)thousand)(Note 12)
10,598
The
5,842
(USD
1465 Esterley Tibbetts Highway,
73,100
Leasehold (USD 52,898
D201 Sunshine Suites Resort
5,300
1.2
F
Grand Cayman, Cayman Islands
thousand)(Note 11)thousand)(Note 12)-Subtotal (85 properties)

432,785404,698

88.1

510,566-

Total (127 properties)

473,570

440,498

96.4

560,963-

17,845

17,856

3.6

Sheraton Grande Tokyo
Bay Hotel (preferred
equity interest)

Preferredequityinterest
issued by
specialpurposecompany(Note 13)-59

- (Note 5)

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)

Property
number(Note 1)

Appraisal
Balancevalue at theAcquisition
sheet
Investment
end of theLegal form
price
carrying percentage
Appraiser
periodof asset (JPY million) value(%)(Note 7)(JPY
(Note 3)(JPY
(Note 4)
million)million)(Note 5)

Location(Note 2)Name of property

Subtotal of preferred equity interest issued by special purpose company(1 property)

17,845

17,856

3.6--

Total (128 properties)

491,416

458,354

100.0

-

-

(Note 1)

“Property number” indicates the use categorization of properties owned by INV, with “A” standing for residence, “B” standingfor office and commercial facility, “C” standing for parking lots and “D” standing for hotel, and the number assigned for each
property. The number following “A”, “B”, “C” and “D” is assigned based on how early the acquisition was made, except for
acquisitions made at the same time a lower number is assigned to the property with a greater acquisition price.

(Note 2)

“Location” is, in principle, based on the indicated address (jyukyohyoji), except that if the jyukyohyoji system has not been
implemented for such property, the location is based on the land number (chiban).

(Note 3)

“Acquisition price” is the purchase price indicated in the real estate or trust beneficiary purchase agreement except for Sheraton
Grande Tokyo Bay Hotel (preferred equity interest), Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites
Resort. For Sheraton Grande Tokyo Bay Hotel (preferred equity interest), “Acquisition price” indicates the amount invested by
INV for the preferred equity interest, excluding investment in the specified equity interests in the Kingdom Tokutei Mokuteki
Kaisha and the acquisition price of the equity interest held by the employees in a G.K., which is a master lease company. For
Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites Resort, the book value of the Leasehold of each of the
Cayman Hotels is stated by the Cayman SPC as of May 9, 2019 (Cayman Islands local time; May 10, 2019 in Japan local time),
which is the date when INV succeeded the Leasehold from the Cayman SPC as dividend in kind in line with the agreed terminationof the TK agreement. The amounts in USD are converted into JPY as shown. Such price excludes consumption tax and othertaxes, and has been rounded down to the nearest million yen.

(Note 4)

“Investment percentage” is the ratio of the acquisition price to the aggregate acquisition price of INV’s portfolio, and has beenrounded to the first decimal place.

(Note 5)

“Appraisal value at the end of the period” is the value appraised or determined based on research by the real estate appraiser
as of the end of the fiscal period in accordance with the Articles of Incorporation of INV and the regulations of The Investment
Trust Association, Japan. As to appraisal of Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites Resort,the local appraiser verification method (Note 6) is adopted. The appraisal value for Sunshine Suites Resort includes the unused
land adjacent to the hotel. Appraisal is entrusted to those described in (Note 7) below. For Sheraton Grande Tokyo Bay Hotel(preferred equity interest), there is no appraisal value at the end of the period due to it being preferred equity interest. An
appraisal value for the underlying asset as of the closing date of the Reporting Period is as follows.
Name of property

Appraisal value

Sheraton Grande Tokyo Bay Hotel(Note 6)

JPY 101,000 million

Appraiser(Note 7)
D

Under the “local appraiser verification method,” a real estate appraiser licensed in Japan determines appraisal value based on
the understanding and analyses of basic data and information necessary for real estate appraisal, including appraisal methods
employed by local appraisers, and transaction examples and trends in local markets that are used for real estate appraisal, andby verifying the validity of decisions made in appraisal reports and appropriateness of appraisal value prepared by local
appraisers. INV appoints CBRE, Inc., a professional appraiser licensed and certified in the Cayman Islands, as a local appraiser
to engage in appraisal of the Underlying Asset and prepare a local appraisal report. INV then engages CBRE K.K., a company
appointed as a real estate appraiser in Japan, to verify the local appraisal report and then obtains a report on verification ofappraisal performed by local appraiser.

(Note 7) “Appraiser” is shown in code in the table above.

The code used to represent the appraisers is as follows:

Appraiser
A: Assets Research and Development Inc.
B: Japan Real Estate Institute
C: JLL Morii Valuation & Advisory K.K.
D: The Tanizawa Sogo Appraisal Co., Ltd.
E: Daiwa Real Estate Appraisal Co., Ltd.
F: CBRE K.K.
As to the appraisal of Westin Grand Cayman Seven Mile Beach Resort & SPA and Sunshine Suites Resort, the local appraiser
verification method is adopted and CBRE K.K. has entrusted such appraisal to CBRE, Inc. The appraisal value for Sunshine
Suites Resort includes the acquisition price of the unused land adjacent to the hotel.
(Note 8)

These trust beneficiary interests were integrated into three groups with other trust beneficiary interests when INV procured funds
through debt financing backed by trust assets in July 2011. The grouping of trust beneficiary interests at the end of the Reporting
Period is as follows:
Group 1
Nisshin Palacestage Daitabashi, Growth Maison Shin-Yokohama, Belle Face Ueno-Okachimachi, Growth Maison Yoga,
Shibuya-Honmachi Mansion, and Foros Nakamurabashi

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Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)
Group 2
College Square Machida, Belair Meguro, and Wacore Tsunashima I
Group 3
Suncrest Shakujii-Koen, Grand Rire Kameido, Acseeds Tower Kawaguchi-Namiki, Growth Maison Kaijin, and College Square
Machiya(Note 9)Acquisition price includes the floor expansion portion. Appraisal value at the end of the period indicates appraisal value
calculated deeming the owned portion and the floor expansion portion as one.

(Note 10) Acquisition price includes the adjacent land portion. Appraisal value at the end of the period indicates appraisal value calculated
deeming the owned portion and the adjacent land portion as one.
(Note 11) The leasehold interests are the rights equivalent to long-term real estate leasehold rights for buildings and land under the laws of
the Cayman Islands (Term: 99 years; annual lease payment: USD 1 or KYD 1). INV implemented an investment structure change
regarding “Westin Grand Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort” on May 9, 2019 (Cayman Islands
local time), a change from making investments based on the TK agreement to directly owning the movable assets such as leasehold
and FF&E of the Cayman Hotels (the Leasehold, etc.), which were the underlying assets of the TK.
(Note 12) Appraisal value at the end of the period is converted into JPY using the exchange rate of USD 1 = JPY 144.99, which is the exchange
rate on the closing date of the Reporting Period (June 30, 2023).
(Note 13) Preferred equity interest issued by special purpose company refers to 178,458 units of preferred equity interest issued by Kingdom
Special Purpose Company (equivalent to 49.0% of preferred equity interest issued and outstanding after the issuance of the said
preferred equity interest), with the Sheraton Grande Tokyo Bay Hotel as an underlying asset, and is recorded as one property.

bCapital expenditures for assets under management(a) Schedule for capital expenditures
The schedule for the principal capital expenditures for property maintenance construction, etc., as of the endof the Reporting Period for the real estate assets is as follows.
Estimated Cost (JPY thousand)Name of Property

Hotel MyStays
D22 HakodateGoryokaku

Location

Scheduled Time of
Implementation

PurposeHakodate-shi, Exterior wall
Hokkaido
renovation work

Payment for
Advance
Total the Reporting
Payments
PeriodFrom July 2023
To December 2023

85,000--From July 2023
To December 2023

65,000--D64

Hotel MyStays
Sapporo Aspen

Sapporo-shi,
Hokkaido

Air conditioning
facility and hot water
system renovation
work for energy
saving

D83

Art Hotel
MoriokaMorioka-shi,
Iwate

Multistory parking
lot parts replacement

From July 2023
To December 2023

56,500--A38 Route Tachikawa

Tachikawashi, Tokyo

Exterior wallrenovation work

From July 2023
To December 2023

49,900--Hotel MyStays
D22 HakodateGoryokaku

Multistory parking
Hakodate-shi,
lot pallet renovation
Hokkaido
work

From July 2023
To December 2023

45,000--61

Financial Summary for the June 2023 Fiscal Period(from January 1, 2023 to June 30, 2023)(b) Capital expenditures for the Reporting Period
The principal construction work constituting capital expenditures for the real estate assets for the Reporting
Period is as follows. Capital expenditures for the Reporting Period totaled JPY 952,975 thousand, andtogether with JPY 17,029 thousand in repair costs included in this fiscal period’s expenses, construction
work totaling JPY 970,005 thousand was implemented.
Name of property
Hotel MyStays
D61 Premier Sapporo
Park

Location

Time ofimplementation

PurposePayment(JPY thousand)Air conditioning
Sapporo-shi,
facility renovation
Hokkaido
work

From January 2023
To June 2023

82,640D44

Hotel Epinard
Nasu

Nasu-gun,Tochigi

Development workfor “Forest Area“

From January 2023
To June 2023

40,800D52

Beppu Kamenoi
Hotel

Beppu-shi,
Oita

Disaster prevention
facility renovation
work

From January 2023
To June 2023

38,920

Suginami-ku, Elevator renovation
Tokyo
work

From January 2023
To June 2023

17,590

Yokohamashi
Kanagawa

From January 2023
To June 2023

12,430Nisshin
A26 Palacestage
Daitabashi
A33

Growth Maison
Shin-YokohamaIntercom facility
renovation work

Other construction

760,594Total(3)

952,975

Tenant Summary

a Summary of lease conditions by property
Disclosure is omitted because the information is described in the presentation material, “June 2023 Fiscal
Period Results (January 1, 2023 to June 30, 2023)” separately announced on August 24, 2023.
b Occupancy trend
Disclosure is omitted because the information is described in the presentation material, “June 2023 Fiscal
Period Results (January 1, 2023 to June 30, 2023)” separately announced on August 24, 2023.

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