Translation

This is an English language translation of the original Japanese announcement on our Website released on February 22, 2017.
However, no assurance or warranties are given with respect to the accuracy or completeness of this English language translation. The
Japanese original shall prevail in the case of any discrepancies between this translation and the Japanese original.

Summary of Financial Results (REIT)
for the Fiscal Period Ended December 31, 2016
February 22, 2017
Name of Issuer:

Invincible Investment Corporation

Stock Exchange Listing:Tokyo Stock Exchange

Securities Code:

8963

URL

Representative:
Name of Asset Manager:
Representative:
Contact:

Naoki Fukuda, Executive Director
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Jun Komo, General Manager of Planning Department

http://www.invincible-inv.co.jp/

TEL. +81-3-5411-2731

Scheduled Date of
Scheduled Date of Filing of
Securities Report:

Commencement for Distribution
March 27, 2017

Supplementary Materials for
Financial Results:

Yes

Presentation Meeting:Yes (for analysts and investors)

Payments:

March 28, 2017

1.

(values are rounded down to the nearest JPY million)
Financial Results for the Fiscal Period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)(1)

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

Fiscal period ended
December 31, 2016
Fiscal period ended
June 30, 2016%

Operating Income

Ordinary Income

JPY million%

Net Income

JPY million%

JPY million

%

9,511

16.6

5,934

17.0

5,431

24.5

5,431

24.5

8,158

18.9

5,073

16.1

4,364

47.8

4,363

47.8

Net Income per Unit

Ordinary Income/
Total Assets

Net Income/Unitholders’ Equity

Ordinary Income/Operating Revenues

Fiscal period ended
December 31, 2016

JPY

%

%

%

1,477

4.2

1.9

57.1

Fiscal period ended
June 30, 2016

1,270

3.9

1.9

53.5

(Note)“Net Income per Unit” is calculated based on the average number of investment units during the period and is rounded to the nearest yen. Net
income per unit calculated based on the number of investment units issued and outstanding at the end of the fiscal period ended June 30, 2016
(3,675,824units) and rounded down to the nearest yen is JPY 1,187.

(2)

Distributions
Distribution(Excluding excess profit )Per Unit

Total

Excess Profit
Per Unit

Distribution

Total

Per Unit

Dividend
Payout
Ratio

Total

Distribution/ Net
AssetsJPY

JPY million

JPY

JPY million

JPY

JPY million%%

Fiscal period ended
December 31, 2016

1,477

5,429

0

0

1,477

5,429

100.0

4.2

Fiscal period ended
June 30, 2016

1,125

4,135

61

224

1,186

4,359

94.8

3.5

(Note 1)The distribution per unit in excess of profit for the fiscal period ended June 30, 2016 is JPY 61, of which JPY 61 is the allowance for temporary
differences adjustments.

(Note 2)The “Dividend Payout Ratio” is calculated in accordance with the following formula:
Dividend Payout Ratio = Distribution Amount (Excluding excess profit distribution) ÷ Net Income × 100“Dividend Payout Ratio” is rounded to the nearest one decimal place.

(Note 3)

“Distribution/ Net Assets” are calculated based on the figures excluding excess profit distribution.

Financial Position(3)

Total Assets
Fiscal period ended
December 31, 2016
Fiscal period ended
June 30, 2016
(Note)Net Assets

Net Assets / Total Assets

Net Assets per Unit

JPY million

JPY million%

JPY

277,361

131,455

47.4

35,762

284,106

130,00545.8

35,368“Net Assets per Unit” is calculated based on the number of investment units issued and outstanding at the end of each period, and is rounded to
the nearest yen.

2

(4)

Cash Flows
Cash Flowsfrom
Operating
Activities
Fiscal period ended
December 31, 2016
Fiscal period ended
June 30, 2016

2.

Cash Flows from
Investment Activities

Cash Flows from
Financing Activities

Closing Balance of Cashand Cash Equivalents

JPY million

JPY million

JPY million

JPY million

9,818(8,457)(3,910)14,214

5,319(86,000)

83,626

16,764

Forecasts for the Fiscal Periods ending June 30, 2017 (from January 1, 2017 to June 30, 2017) and December 31, 2017(from July 1, 2017 to December 31, 2017)(Percentages indicate percentage change from the preceding period)
Operating
IncomeOperating
Revenues
Fiscal Period
ending June30, 2017
Fiscal Period
endingDecember 31,
2017(Reference)

Ordinary
IncomeNet Income

Distribution
per Unit(excludingexcess profit
distribution)

Excess Profit
Distribution
per Unit

Distribution
per Unit(includingexcess profit
distribution)

JPY

JPY

JPY

JPY
million%JPY
million%JPY
million%JPY
million

%

9,285

(2.4)

5,268

(11.2)

4,590(15.7)

4,589(15.5)

1,185

55

1,240

10,498

13.1

6,245

18.5

5,652

23.1 5,651

23.1

1,460

21

1,481

Estimated net income per unit for the fiscal period ending June 30, 2017 is JPY 1,185.
Estimated net income per unit for the fiscal period ending December 31, 2017 is JPY 1,460.

* 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(c) Changes in Accounting Estimates(d) Restatements

None
None
None

(2) Number of Investment Units Issued and Outstanding(a) Number of Units Issued and Outstanding as of the
End of the Fiscal Period (Including Treasury Units)

December 31, 2016

3,675,824

June 30, 2016

3,675,824(b) Number of Treasury Units as of the End of the Fiscal Period

December 31, 2016

0June 30, 2016

0(Note)

Please refer to “Notes Related to Per Unit Information” on page 49 regarding the number of investment units which is the basis for the
calculation of net income per unit.

3ͤThe Implementation Status of Statutory Audit
At the time of this financial report, the audit procedures for the financial statements pursuant to the Financial Instruments andExchange Act are yet to be completed.
ͤExplanation on the Appropriate Use of the Forecast of Results and Other Matters of Special Consideration(Explanation on the Appropriate Use of the Forecast of Results)
The forward-looking statements in this financial 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 wecannot predict as of this date, including gains or losses from the disposition of properties, repayment of borrowings, decreases
in rents and changes in operating conditions. Further, there is no guarantee of the payment of the forecast distribution amount.
Please refer to “Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods ending June 30,
2017 (from January 1, 2017 to June 30, 2017) and December 31, 2017 (from July 1, 2017 to December 31, 2017)”, on page 19 forassumptions used in the forecasts and precautions regarding the use of such forecasts.
Unless otherwise specified herein, amounts less than JPY 1 are rounded down, and ratios are rounded to the nearest one decimal
place.

4

1. Related Companies of the Investment Corporation
Disclosure is omitted because there have been no material changes in the “Structure of the Investment Corporation”
section of the latest securities report (filed on September 26, 2016).

2. Management Policy and Operating Conditions(1) Management Policy
Disclosure o f “Investment Policies,” “Investment Targets,” “Distribution Policies” and the “Investment Restriction” isomitted because there have been no material changes from the relevant sections of the latest securities report (filed on
September 26, 2016)(2) Operating Conditionsa

Overview of the Fiscal Period Ended December 2016 (“Reporting Period”)(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; the “Investment Trust Act”). 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 merger with LCP Investment Corporation (“LCP”) was implemented on February 1, 2010, INV issued newinvestment 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, INV has been focusing its efforts on improving the
profitability of its portfolio and establishing a revenue base in order to implement stable distributions, and has strengthened
the lender formation through new borrowings and the refinancing of existing bank borrowings, thereby creating a financialbase for external growth. With this platform as a base, in June 2014, Consonant Investment Management Co., Ltd., theasset manager to which INV entrusts the management of its assets (the “Asset Manager”) revised the Investment Guidelines
for INV, and positioned hotels as a core asset class alongside residential properties with a view towards expanding
investments in the hotel sector in which demand is forecasted to rise going forward. As a result of the external growthefforts, INV's portfolio at the end of the previous period ended June 2016 composed of 124 properties (48 hotels, 68
residential properties and eight others) with a total acquisition value of JPY 266,619 million, and market capitalization atsuch date of JPY 238,193 million. When compared to the period as of May 22, 2014, which is the time immediately prior to
INV’s initial investment in hotels, the total acquisition value and market capitalization increased significantly by 3.7x and
8.0x, respectively.
In the Reporting Period, INV obtained an initial credit rating of “A” from Japan Credit Rating with a “Positive” outlook on
September 27, 2016.
INV expanded the pipeline for future growth by adding two residential properties to the properties subject to a
Memorandum of Understanding (the “MOU") with affiliates of Fortress Group with respect to preferential negotiatingrights regarding the acquisitions of hotels and residential properties on December 22, 2016. As of the end of the Reporting
Period, there are 22 hotels (6,116 rooms) and 11 residential properties (1,413 units) in the MOU, which will continue toprovide INV with considerable opportunities for external growth.

5

(b)

Operational Environment and Performance

For the December 2016 period, NOI increased by 41.2% or JPY 2,453 million compared to the same period in theprevious year (the December 2015 period), of which 35.7% came from the hotel portfolio and 5.7% from the residential
portfolio.
As a result, INV maintained a high average occupancy rate (Note 1) of 98.2% across the entire portfolio, and the NOI of
entire portfolio increased by 17.9% from the previous period (the June 2016 period) to JPY 8,414 million. Below iscommentary on each of these sectors and their performance in the second half of 2016.
In the hotel segment, improvements in travel infrastructure, the penetration of LCC’s into the Japanese market, and theJapanese government’s promotion of tourism initiatives at the national and local level, coupled with macro structuralchanges such as a sharp increase in the number of cross-border travelers due to the global rise of the middle-income
bracket, have led to a continued increase in the number of international visitors to Japan from China and Southeast
Asian countries such as Thailand, Malaysia, the Philippines, Indonesia and Vietnam. This robust combination helped
Japan log a record high of 24.039 million inbound visitors in 2016, (a 21.8% increase compared to 19.737 million in theprevious year).
However, for the Reporting Period, the hotel segment was impacted by poor weather such as typhoons, day formation(reduced number of weekday holidays) of the Silver Week holiday in September 2016, an increase in hotel supply inTokyo in the limited-service-hotel segment, an increase in the number of hotel rooms listed on websites of online travel
agents and increased cancellations.
Under the circumstances above, INV is working closely with the operators of the hotels, primarily MyStays HotelManagement Co., Ltd. (“MyStays”), a hotel operator in the sponsor group, to proactively address the issues at hand.
Specifically, MyStays continues to improve the web experience and the service function such as its online chat function
and strengthen its user content and engagement to drive more direct bookings through the MyStays website as well as
increase brand awareness. MyStays is increasing the over-bookings ratio to achieve higher occupancy rates and to offset
vacancies caused by cancellations. As the result of the initiatives, 39 of the hotels owned by INV (Note 2) recorded
ADR (Note 3) of JPY 9,935, RevPAR (Note 4) of JPY 9,049, and an occupancy rate (Note 5) of 91.1%. Among the 36
hotels (Note 6) in which a comparison can be made for the same period in the previous year, ADR was JPY 9,877(+0.0%), RevPAR was JPY 8,973 (-0.8%), with an occupancy rate of 90.8% (-0.7 points). The ratio of overseas sales(Note 7) at the 36 hotels (Note 8) increased to 27.9% (+2.0 points compared to the same period in the previous year).
With respect to the residential portfolio, market rent trends for small-type city-center properties maintain moderateincrease. Under the positive circumstances in the macro environment, INV implemented a rent increase program for new
leases and renewals as well as an initiative to reduce residential leasing costs based on a market analysis of each unit andproperty. As a result, in the Reporting Period, INV realized a rent increase for 54.2% of the new residential lease
contracts for an average rent increase of 1.5% compared to the previous rent across all new leases, and a rent increasefor 33.6% of contract renewals for an average rent increase of 1.0% compared to the previous rent across all renewal
leases, while maintaining a high contract renewal rate of 83.7%. The average occupancy rate achieved a stable 95.6%
and the average occupancy rate for 63 properties that can be compared to the same period in the previous year (Note 9)
was 94.4% (a decrease of 0.9 points). The NOI (Note 10) for the 63 properties (Note 9) in which previous year
comparisons can be made increased 3.8% compared to the same period in the previous year. Furthermore, INV
determined on November 21, 2016 to change the master lessee (“ML”) and the property manager (“PM”) for 16
properties effective December 1, 2016 and for one property effective January 1, 2017 (Note 11) respectively in order tofurther improve its operational efficiency as well as property performance by consolidating the number of ML/PM from19 to 10 for its residential portfolio.
Due to the internal growth for the Reporting Period, and trends in the real estate investment and rental market, the total
appraisal value at the end of the Reporting Period was JPY 328,192 million, an increase of JPY 4,901 million (+1.5%)
over the previous period. The portfolio has an unrealized gain of JPY 68,253 million (Note 12) and an unrealized gain
ratio of 26.3% (Note 12).

6

Key Performance Indicators of 36 Hotel Properties (Note 6)
Y2016
December fiscal
period
90.8%
9,877
8,973
5,373

June fiscal period
Occupancy Rate
ADR (JPY)
RevPAR (JPY)GOP (Note 13) (JPY million)

89.6%
9,008
8,068
4,516

Full-Year
90.2%
9,448
8,523
9,889

Year-on-Year Changes
Y2016
December fiscal
period
-0.7pt
-0.0%
-0.8%
-2.3%

June fiscal period
Occupancy Rate
ADR (JPY)
RevPAR (JPY)GOP (Note 13) (JPY million)+0.1pt+8.4%+8.5%+12.3%

Full-Year-0.3pt
+3.7%
+3.3%
+3.8%

Key Performance Indicators of 63 Residential Properties (Note 9)
Y2016
December fiscal
periodJune fiscal period
Occupancy Rate
(Note 1)
Average Rent per Tsubo (JPY)(Note 14)
NOI (JPY million)

Full-Year

95.5%

94.4%

95.0%

10,04010,123

10,082

1,540

1,553

3,093

Year-on-Year Changes
Y2016
December fiscal
periodJune fiscal period
Occupancy Rate
(Note 1)
Average Rent per Tsubo (JPY)(Note 14)
NOI (JPY million)(Note 1)
(Note 2)Full-Year

+1.8pt-0.9pt+0.5pt

+1.3%

+1.7%

+1.5%

+5.1%

+3.8%

+4.4%

“Occupancy Rate” for the entire portfolio and for the residential properties is calculated by dividing the sum of
total leased area by the sum of total leasable area at the end of each month during the relevant period.
Of the 48 acquired hotels, the following nine hotels with fixed-rent lease agreements 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.

(Note 3)“ADR” means average daily rate, and is calculated by dividing total room sales (excluding service fees) for acertain 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 4)

“RevPAR” means revenue 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 thesame as the figure obtained by multiplying ADR by occupancy rates. Hereinafter the same shall apply.

(Note 5)

“Occupancy rate” for the hotel properties is calculated in accordance with the following formula:7

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 6)Of the 48 acquired hotels, two hotels which were not operating for a certain period due to renovation in 2015,
Hotel MyStays Shinsaibashi (renovation period: from January 25, 2015 through March 31, 2015) and Hotel
MyStays Gotanda Station (renovation period: from March 1, 2015 through November 24, 2015) and one hotel
which was not fully operating for a certain period due to renovation in 2016, Hotel MyStays Kanda (renovation
period: from May 20, 2016 through August 22, 2016) are excluded, in addition to the nine hotels with fixed-rentlease agreements excluded per Note 2.

(Note 7)

“Overseas sales ratio” is the ratio of sales amount through overseas web agents to revenues.

(Note 8)Of the 48 acquired hotels, 12 hotels, APA Hotel Yokohama-Kannai, 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, the tenants of which do not disclose the ratio of overseas sales; Hotel MyStays Gotanda Station,
which was not operating for a certain period due to renovation in 2015 (renovation period: from March 1, 2015
through November 24, 2015); and Hotel MyStays Kanda, which was not fully operating for a certain period due
to renovation in 2016 (renovation period: from May 20, 2016 through August 22, 2016), are excluded.

(Note 9)Of the 68 acquired residential properties, five properties, City Court Kitaichijo, Lieto Court Mukojima, Lieto
Court Nishi-Ojima, Royal Parks Momozaka and Royal Parks Shinden, which were not held by INV in the same
period in the beginning of the previous year, are excluded.

(Note 10) For the comparison of NOI of the 63 properties, insurance income and related repair expenses, which aretemporary items, are excluded.
(Note 11) 16 properties for which ML/PM were changed on December 1, 2016 are Royal Park Omachi, Lexington Square
Haginomachi, Lexington Square Daitabashi, Lexington Square Honjo Azumabashi, Invoice Shin-Kobe
Residence, Cosmo Court Motomachi, Salvo Sala, Luna Court Edobori, Winntage Kobe Motomachi, Corp
Higashinotoin, Prime Life Sannomiya Isogami Koen, HERMITAGE NANBA WEST, West Avenue, Prime Life
Mikage, Lieto Court Mukojima and Lieto Court Nishi-Ojima. One property for which ML/PM were changed on
January 1, 2017 is Acseeds Tower Kawaguchi-Namiki.
(Note 12) The unrealized gain is calculated using the following formula: the appraisal value as of the end of the Reporting
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 endof the Reporting Period.
(Note 13) “GOP,” means the gross operating profit, and is the amount remaining after deducting costs of hotel operations(the personnel, material, water, electricity and heating and advertising expenses and other expenses) and the
management services fee to operators (if any) from the hotel’s revenues . Hereinafter the same shall apply.
(Note 14) “Average rent per tsubo” is calculated by dividing the total rental revenue including common area charges foreach month by the sum of total leasable area at the end of each month during the relevant period.

8

(c)

Overview of Fund Raising
During the Reported period, INV obtained a credit rating of A from the Japan Credit Rating Agency and also
increased its bank group from 13 financial institutions to 19 including Japan Post Bank Co., Ltd. Below aredetails of the initial credit rating which was obtained on September 27, 2016:
Credit Rating Agency
Japan Credit Rating Agency, Ltd.

Rating Object
Long-term Issuer Rating

RatingA

OutlookPositive

As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY 142,419
million and the Interest-Bearing Debt ratio (Note 1) and LTV (Note 2) were 51.3% and 43.4% respectively, as ofthe end of the Reporting Period, with an average interest rate (Note 3) of 0.50%.
INV implemented the borrowing of Term Loan (E) (amount borrowed: JPY 4,000 million; interest rate: variableinterest rate of 1-month JPY TIBOR (Note 4) plus 0.4%, 0.5% and 0.6% for durations of three, four and five
years) from The Tokyo Star Bank, Limited on July 20, 2016 for use as a portion of the funds and related expenses
for the two hotels acquired on June 15, 2016.
On November 30, 2016, INV repaid the portion of Term Loan (B), New Syndicate Loan (F), and Term Loan (C)in the amount of JPY 3,498 million in total that corresponds to the borrowings equivalent to the expectedconsumption tax refund (Note 5), using the consumption tax refunds from the five hotels acquired on January 22,
2016, the four hotels acquired on March 31, 2016, and the two hotels acquired on June 15, 2016.
In addition, a portion of INV’s existing loans from Mizuho Bank, Ltd. was transferred to Japan Post Bank Co., Ltd.
in the amount of JPY 4,000 million on July 15, 2016, The Kagawa Bank, Ltd., The Shizuoka Bank, Ltd., The
Hyakugo Bank, Ltd., and The Bank of Fukuoka, Ltd. in the amount of JPY 1,000 million each on July 29, 2016,
The Daishi Bank, Ltd. and The Hiroshima Bank, Ltd. in the amount of JPY 1,000 each on December 20, 2016.
(Note 1) Interest-Bearing Debt ratio uses the calculation formula below:
Interest-Bearing Debt ratio = total outstanding interest-bearing debt/total assets x 100(Note 2) LTV uses the calculation formula below:
LTV = total outstanding interest-bearing debt/total appraisal value x 100(Note 3) The average borrowing interest rate (annual rate) is calculated by the weighted average based on theoutstanding balance of borrowings and rounded to two decimal places.
(Note 4) With respect to only the first interest calculation period, the 2-month JPY TIBOR.
(Note 5) Borrowings corresponding to the expected consumption tax refund mean the borrowings which will be
prepaid in the amount equivalent to the refund of consumption tax and local tax, which were paid in
relation to the acquisition of the trust beneficiary interests acquired by the borrowings executed at thesame time, in the case where the above-mentioned consumption tax refunds are received. The same
shall apply hereinafter.
(d)

Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period increased by JPY 1,353
million from the previous period (+16.6%) to JPY 9,511 million, and net income increased by JPY 1,067 million fromthe previous period (+24.5%) to JPY 5,431 million. DPU for the Reporting Period was JPY 1,477, an increase of JPY
291 (+24.5%) compared to the previous period.
INV aims to include maximum profit distributions (excluding excess profit distribution) in deductible expenses inaccordance with Section 1 of Article 67-15 of the Act on Special Taxation Measures Law (Act No. 15 of 1957; asamended), and decided to distribute all of the amount by deducting reversal of allowance for temporary differences
adjustment from profit as defined in Article 136, Paragraph 1 of the Investment Trust Act, except for fractional
distribution per unit less than JPY 1. As a result, the distribution per unit (excluding excess profit distribution) for theReporting Period is JPY 1,477. On the other hand, excess profit distribution will not be made.

9bOutlook for the Fiscal Periods Ending June 30, 2017 and December 31, 2017
The DPU (including excess profit distribution) for the June 2017 period is forecast to be JPY 1,240 (+4.6% YoY) andthe DPU (including excess profit distribution) for the December 2017 period is forecast to be JPY 1,481 (+0.3% YoY);
the full year DPU (including excess profit distribution) for calendar year 2017 is forecast to be a modest growth of JPY
2,721 (+2.2% YoY).
Future operational policy and issues to be addressed
Since July 2011, INV has enhanced unitholder value by significantly increasing DPU with the Fortress Group as its
sponsor. Going forward, INV will implement various strategies to maintain further growth, including the following
measures.
•••

Continuous acquisition of properties from sponsor and third parties
Further internal growth at hotel and residential properties
Diversification of financing measures including the issuance of invest corporation bonds and extension anddiversification of maturities

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

External growth strategy
New Property Acquisitions
As its basic strategy, INV will move forward with the acquisition of new properties focusing on hotels, wherecontinued growth in portfolio revenues is anticipated, and residential properties especially where rental growth canbe achieved. Rent revenue from residential assets and other assets as well as the fixed rent portion from hotels
will also contribute to more stable revenue, which was 67.4% of total revenue for 2016. This acquisition strategy
will enable INV to build a portfolio with a good balance between growth and stability.
In regards to hotels, INV will take into consideration the trends in foreign travelers visiting Japan, demands ofbusiness and leisure customers, the competitive hotel environment, 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 regards to residential properties, INV will analyze occupancy rates, rental market trends, the presence ofcompeting properties among other factors, and consider acquiring mainly small-type properties in large cities withstrong competitiveness in which it believes it can achieve increases in rent. INV decided today to acquire twohigh quality family-type properties in Tokyo, taking into consideration of the rent growth potential for Royal Parks
Tower Minami-Senju and the stability from the fixed-term lease for Royal Parks Seasir Minami-Senju, which will
be beneficial to the diversification of the residential portfolio, as announced in the release “Notice concerning
Acquisition of Assets and Entering into Leasing Contract” as of today.
These two residential properties are to be acquired from the pipeline of the sponsor, the Fortress Group, which has
helped INV to achieve steady external growth as follows.

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

Properties acquired

Total acquisition price

September 2012
May 2014
July 2014
February 2015

24 residential properties
Two hotels
18 hotels
Two hotels
11 hotels andthree residential properties
One hotel
Five hotels andone residential property
Four hotels andone residential property
Two hotels
74 properties(of which 45 are hotels and 29 areresidential properties)

JPY 14,043 million
JPY 5,435 million
JPY 39,938 million
JPY 4,911 million

July 2015
August 2015
January 2016
March 2016
June 2016
Total

JPY 35,258 million
JPY 5,069 million
JPY 10,207 million
JPY 66,697 million
JPY 15,900 million
JPY 197,458 million(of which hotels: JPY 170,382 million;
residential: JPY 27,076 million)

The Fortress Group manages four dedicated Japanese real estate funds, including the Fortress Japan Opportunity
Funds I, II, and III. The Fortress Group’s committed equity is over JPY 300 billion and the number of properties
that the Fortress Group is invested in exceeds 1,400. In order to ensure future growth options for the portfolio, INV
entered into an updated MOU with affiliates of the Fortress Group that provides preferential negotiation rights withrespect to the acquisition of 22 hotels and nine residential properties (excluding two residential properties
anticipated to be acquired) (see the table below) (Note 1). In addition, by utilizing the property transaction
information available through the Fortress Group and INV’s own network, INV will continuously consider andimplement the acquisitions of properties from third parties that will contribute to stability and growth in revenue
and cash flow and an increase in DPU.
No.

Asset name

Asset type (Note 2)

Location

No. of rooms

1

Hotel MyStays Premier Akasaka

Limited Service Hotel

Minato-ku, Tokyo

327

2

Hotel MyStays Yokohama Kannai

Limited Service Hotel

Yokohama-shi, Kanagawa

166

3

RIHGA Royal Hotel Kyoto

Full Service Hotel

Kyoto-shi, Kyoto

489

4

Narita Excel Hotel Tokyu

Full Service Hotel

Narita-shi, Chiba

706

5

Hotel MyStays Premier Sapporo Park

Full Service Hotel

Sapporo-shi, Hokkaido

418

6

Hotel MyStays Sapporo Station

Limited Service Hotel

Sapporo-shi, Hokkaido

242

7

Hotel MyStays Oita

Limited Service Hotel

Oita-shi, Oita

145

8

Art Hotel Hirosaki City

Full Service Hotel

Hirosaki-shi, Aomori

134

9

Beppu Kamenoi Hotel

Resort Hotel

Beppu-shi, Oita

322

10 Fusaki Resort Village

Resort Hotel

Ishigaki-shi, Okinawa

195

11 Sheraton Grande Tokyo Bay Hotel

Full Service Hotel

Urayasu-shi, Chiba

1,016

Hotel MyStays Shin Osaka
Conference Center

Limited Service Hotel

Osaka-shi, Osaka

397

Full Service Hotel

Asahikawa-shi, Hokkaido

265

Limited Service Hotel

Kanazawa-shi, Ishikawa

206

Full Service Hotel

Matsuyama-shi, Ehime

161

12

13 Art Hotel Asahikawa
14 Hotel MyStays Kanazawa Castle
15 Hotel JAL City Matsuyama

11

No.

Asset name

Asset type (Note 2)

Location

No. of rooms

16 Hotel MyStays Ueno East

Limited Service Hotel

Taito-ku, Tokyo

150

17

(tentative) Hotel MyStays Honmachi
3-chome (Note 3)

Limited Service Hotel

Osaka-shi, Osaka

120

18

Hotel MyStays Sapporo Nakajima
Park

Limited Service Hotel

Sapporo-shi, Hokkaido

86

19 Flexstay Inn Sakuragicho

Limited Service Hotel

Yokohama-shi, Kanagawa

70

MyCUBE by MYSTAYS Asakusa
20
Kuramae

Limited Service Hotel

Taito-ku, Tokyo

161

Hotel MyStays Premier
Hamamatsucho

Limited Service Hotel

Minato-ku, Tokyo

120

22 Hotel MyStays Premier Omori

Limited Service Hotel

Shinagawa-ku, Tokyo

220

21

Hotel subtotal

6,116

23 Gran Charm Hiroo

Residential/Small TypeShibuya-ku, Tokyo

121

24 Plestay Win Kinshicho

Residential/Small Type

Sumida-ku, Tokyo92

25 Gran Charm Kichijoji

Residential/Small TypeMusashino-shi, Tokyo

28

26 Green Patio Noda

Residential/Small Type

Noda-shi, Chiba

240

27 Dainichi F-45

Residential/Small Type

Urayasu-shi, Chiba

54

28 Gran Charm Urayasu

Residential/Small Type

Urayasu-shi, Chiba

54

29 Gran Charm Urayasu 5

Residential/Small Type

Urayasu-shi, Chiba

54

30 Gran Charm Minami Gyotoku I

Residential/Small Type

Ichikawa-shi, Chiba

52

31 Gran Charm Minami Gyotoku II

Residential/Small Type

Ichikawa-shi, Chiba

48

Residential property subtotal

743(Note 1)

The term of validity of the MOU is from December 22, 2016, the date of execution of the updated MOU, to
December 21, 2017. The above 31 properties does not include two residential properties anticipated to beacquired upon the exercise of preferential negotiation rights under the MOU. Regarding the 31 properties
listed above, there is no guarantee that INV will be granted an opportunity for considering acquisition of theproperties or be able to acquire the properties.

(Note 2)Each “Asset Type” above is as follows:“Limited Service Hotel” refers to a hotel focusing on revenues from room stay and offer limited service
regarding foods and beverages, banquet, spa or gymnasium facilities.
“Full Service Hotel” refers to a hotel having segments of stay, foods and beverages, and banquet.
“Resort Hotel” refers to a hotel located at tourist destinations or recreational lots, having segments of stay,foods and beverages, and incidental facilities.
“Small Type” refers to a residential property in which the majority of dwelling units are less than 30 m2.

(Note 3)(Tentative) Hotel MyStays Honmachi 3-chome is scheduled to be completed in November 2017 and open in
December 2017.

12

Property Sales
While INV places priority on increasing unitholders’ value through external growth by taking into account the increased
level of activity in the real estate trading market, it also plans to consider the possibility of property sale and replacement
upon consideration of the portfolio sector composition, geographic distribution and competitiveness of each property, as
appropriate.
(ii)

Strategy for internal growth(Hotels)
Of the 48 hotels owned by INV as at the end of the Reporting Period, 39 hotels use a variable rent scheme. In thevariable rent scheme, in principle, INV receives all of gross operating profit (GOP) after deducting management
fees for the hotel operator as rents, and INV can directly enjoy the hotel revenue upside. In the case where GOP
enters into a downward trend, INV could take advantage from the fixed rent portion or downside floor to protect
itself from further loss. For 33 hotels, MyStays has implemented strict revenue management seeking to maximize
revenue. INV will continue to accurately ascertain and analyze operating conditions of its hotels, the conditions of
nearby hotels, market trends and other factors through operation meetings and other contact with hotel operators
and will focus on operations that maximize rent income.
(Residential properties and others)
INV will continue to strengthen its collaborative ties with Property Management (PM) companies and brokers tofurther boost occupancy rates and earning capabilities of its properties. With respect to INV’s residential properties,
while keeping in mind the high-season in the residential rental market that occurs during the fiscal period ending
June 2017, INV will focus on increasing the occupancy rate and rent for both new lease contracts and leaserenewals for each of 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 in maintaining
and enhancing the competitiveness and market value of the properties as well as ensuring stable operations andhigh tenant satisfaction. Therefore, INV will continue to monitor current strategic plans with flexible
implementation as it sees fit. Especially for hotels, INV will carefully execute the plans for renovations andreplacement of fixtures and fittings in order to maintain and increase revenues.

(iii) Financial strategy
INV has obtained its initial credit rating, strengthened its relationship with existing lenders and enhanced its lenderformation via adding six new lenders including Japan Post Bank Co., Ltd. in order to further stabilize its financialbase. Going forward, INV will work on diversifying financing measures including issuing investment corporation
bonds. Also, INV seeks to maximize unitholders’ value by way of extension and diversification of its borrowing
terms, further reduction of borrowing costs, solicitation of new financial institutions and further strengthening of its
lender formation.
(iv) Compliance risk management
While the executive officer of INV concurrently serves as the representative director at the Asset Manager, two
supervisory directors (an attorney and a certified public account) oversee the execution of the executive officer’s duties
via the Board of Directors of INV. In addition, the compliance officer of the Asset Manager attends each meeting of theBoard of Directors in the capacity of an observer.
The Asset Manager has a compliance officer who is responsible for compliance with laws, regulations and otherrelevant matters as well as overall management of transactions with sponsor related parties. Moreover, it has in place acompliance 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 related parties. 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 in transactions with sponsor related parties as well as strict
examinations with respect to INV’s compliance with laws and regulations.
INV intends to continually take steps to strengthen its compliance structure.
13

cSignificant Subsequent Events(a)Issuance of New Investment Units

INV has resolved at its Board of Directors Meeting to issue new investment units (“Public Offering”) and conduct
secondary offering of investment units per the below.
The details including issue price per unit will be determined at its Board of Directors Meeting to be held hereafter.
(i)

Issuance of new investment units through Public Offering
Number of investment units to be offered: 185,000 investment units

Use of proceeds: INV will use the proceeds from the Public Offering
for the acquisitions of “Royal Parks Tower
Minami-Senju”
and“Royal
Parks
SeasirMinami-Senju” as described in “(c) Property
Acquisition” below.

(ii) Secondary offering of investment units (overallotment secondary offering)Number of investment units to be offered in the secondary offering: 9,250 investment units(iii) Issuance of new investment units through third-party allotment (Note)
Number of investment units to be offered (maximum): 9,250 investment units

Allottee: Mizuho Securities Co., Ltd.

Use of proceeds: INV will keep the proceeds as cash-on-hand and use
for future asset acquisition. The procured funds will
be deposited at banks until disbursement.

(Note) There may be cases where there will be no subscription for whole or part of the investment units to be issued
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.

14

(b)

Borrowing of Funds

INV has decided today to obtain new loans (“Borrowings”) in order to acquire properties described in “(c) Property
Acquisition” below and related expenses. The details of loans are as follows:(i)

New Syndicate Loan (G)Borrowingamount(JPY million)

Interest rate
(per annum)

Principal
maturity date

Borrowing
methodMarch 14,
2017

3,250

Variable interest rate
(Note 1)March 14,2020

Unsecured /with noguarantee

March 14,
2017

3,250

Variable interest rate
(Note 2)

March 14,2021

Unsecured /with noguarantee

March 14,
2017

4,750

Variable interest rate
(Note 3)

March 14,2022

Unsecured /with noguarantee

Borrowingamount(JPY million)

Interest rate
(per annum)

Principal
maturity date

Borrowing
method3,000

Variable interest rate
(Note)

September 14,
2020

Unsecured /with noguarantee

Borrowingdate

LenderMizuho Bank, Ltd.
Development Bank of Japan, Inc.
Resona Bank, Limited
The Bank of Fukuoka, Ltd.
The Shizuoka Bank, Ltd.
The Nomura Trust and Banking Co.,Ltd.
AEON Bank, Ltd.
The Dai-ichi Life Insurance Company,
LimitedThe Gunma Bank, Ltd.
The Towa Bank, Ltd.
Total

11,250(Note 1)1-month JPY TIBOR (Base Rate) + spread (0.40%)(Note 2)1-month JPY TIBOR (Base Rate) + spread (0.50%)(Note 3)1-month JPY TIBOR (Base Rate) + spread (0.60%)(ii)

Term Loan (F)Borrowingdate

LenderSumitomo Mitsui Banking
Corporation.
Total

March 14,
2017

3,000

(Note)1-month JPY TIBOR (Base Rate) + spread (0.45%)

15

(c)

Property Acquisition

The Asset Manager has decided today to acquire the two residential properties (“Acquisition”) as follows:

Use

Acquisition
price(JPY million)(Note 1)

Appraisal value(JPY million)(Note 2)

Property
number

Property nameLocation

A105

Royal Parks
Tower
Minami-Senju

Arakawa-ku,
Tokyo

21,879

Royal Parks
SeasirMinami-Senju

Arakawa-ku,
Tokyo

2,683

2,710

24,562

24,81022,100Residential
A106

Total

SellerLegal formof asset

SakuraTokutei
Mokuteki
KaishaMomo
Tokutei
Mokuteki
KaishaTrustbeneficiaryinterest(Note 1) Acquisition price does not include property taxes, city planning taxes, national or local consumption taxes;
hereinafter the same.
(Note 2) The appraisal value is as of December 1, 2016 based on the appraisal reports by Japan Real Estate Institute.
(Note 3) Figures are rounded down to the nearest million yen.

16

dOperational Outlook
The forecasts of financial results for the fiscal periods ending June 30, 2017 and December 31, 2017 are as follows.
Fiscal period ending June 30, 2017 (from January 1, 2017 to June 30, 2017)
Operating Revenues

JPY 9,285 million

Operating Income

JPY 5,268 million

Ordinary Income

JPY 4,590 million

Net Income

JPY 4,589 million

Total Distribution Amount (Including excess profit distribution)

JPY 4,798 million

Earnings per Unit

JPY 1,185

Distribution per Unit (Excluding excess profit distribution per unit)

JPY 1,185

Excess Profit Distribution per Unit

JPY 55Distribution per Unit (Including excess profit distribution per unit)

JPY 1,240

Fiscal period ending December 31, 2017 (from July 1, 2017 to December 31, 2017)
Operating Revenues

JPY 10,498 million

Operating Income

JPY 6,245 million

Ordinary Income

JPY 5,652 million

Net Income

JPY 5,651 million

Total Distribution Amount (Including excess profit distribution)

JPY 5,731 million

Earnings per Unit

JPY 1,460

Distribution per Unit (Excluding excess profit distribution per unit)

JPY 1,460

Excess Profit Distribution per Unit

JPY 21

Distribution per Unit (Including excess profit distribution per unit)

JPY 1,481

For reference purposes, full-year forecasts are provided below, since hotel revenues are influenced by seasonal
effects.
(Reference) Full-year 2017 (Aggregate of the fiscal periods ending in June 2017 and December 2017)
Operating Revenues

JPY 19,783 million

Operating Income

JPY 11,513 million

Ordinary Income

JPY 10,242 million

Net Income

JPY 10,241 million

Total Distribution Amount (Including excess profit distribution)

JPY 10,530 million

Earnings per Unit

JPY 2,645

Distribution per Unit (Excluding excess profit distribution per unit)

JPY 2,645

Excess Profit Distribution per Unit

JPY 76

Distribution per Unit (Including excess profit distribution per unit)

JPY 2,721

For the assumptions underlying the operational outlook for the fiscal periods ending June 30, 2017 and December 31,
2017, please see “Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods
ending June 30, 2017 (from January 1, 2017 to June 30, 2017) and December 31, 2017 (from July 1, 2017 to December
31, 2017.”

17

(Cautionary Note regarding Forward Looking Statements)
Forward looking statements such as the forecasts set forth herein are based on information currently available andcertain assumptions that are deemed reasonable. Actual operating performance may vary significantly due tofactors not foreseen at the time of this present notice, such as the occurrence of gains and losses associated with thesale of properties, repayment of borrowings and a decrease in rent received. Also, this forecast is not a guarantee of
distribution amounts.

18

<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods ending June 30, 2017 (fromJanuary 1, 2017 to June 30, 2017) and December 31, 2017 (from July 1, 2017 to December 31, 2017>
Item
Fiscal period

Assumptions
The 28th fiscal period: from January 1, 2017 to June 30, 2017 (181 days)
The 29th fiscal period: from July 1, 2017 to December 31, 2017 (184 days)
Properties held as of the end of the 28th fiscal period: 126 properties
Properties held as of the end of the 29th fiscal period: 126 properties

Assets under management

INV assumes that INV will newly acquire two residential properties (Note) as of March 14, 2017
in addition to existing 124 properties, and there will be no change through the end of the fiscal
period ending December 2017.
(Note) Regarding the acquisition of properties as of March 14, 2017, please refer to “Notice concerning
Acquisition and of Assets and Entering into Leasing Contract” dated as of today.

As of the end of the 28th fiscal period: 3,870,074 units
As of the end of the 29th fiscal period: 3,870,074 units

Units outstanding

INV assumes that a total of 194,250 new investment units will be issued through the Public
Offering (185,000 new investment units) and the Third Party Allotment (up to 9,250 new
investment units), that the expected number of investment units issued and outstanding
following the Public Offering as well as the Third Party Allotment will be 3,870,074 units, andthat there will be no additional issuance of units thereafter through the end of the fiscal period
ending December 2017.
Balance as of the end of the 28th fiscal period: JPY 156,669 mn
Balance as of the end of the 29th fiscal period: JPY 156,669 mn

Interest-bearing liabilities

INV assumes that New Syndicate Loan (G) and Term Loan (F) are implemented as of March 14,
2017, as mentioned in today’s release “Notice concerning Debt Financing” and no other loan is
implemented.
INV expects to record rental revenues for each fiscal period as follows:
June 2017 Fiscal Period
JPY 9,285 mn(JPY 5,539 mn)(JPY 2,644 mn)(JPY 2,895 mn)

・Rental revenues(of these, hotel rents)(fixed hotel rents)(variable hotel rents)
Operating revenues

December 2017 Fiscal
PeriodJPY 10,498 mn(JPY 6,425 mn)(JPY 3,232 mn)(JPY 3,192 mn)

Rental revenues in the fiscal period ending June 2017 and the fiscal period ending December
2017 are calculated based on estimates as of today from January 2017 to December 2017. In
addition, INV assumes there will be no delinquencies or non-payment of rent by tenants.
The majority of INV’s owned hotels use a variable rent scheme linked to performance of therelevant hotel. Hotel demand is affected by seasonal factors and the December ending fiscal
periods (from July to December) which include summer holiday and autumn outing seasons tend
to record higher revenue than the June ending fiscal periods (from January to June).
Accordingly, rental revenue of INV tends to be higher in the December ending fiscal periods
than in the June ending fiscal periods

19

Item

Assumptions
INV expects to incur property related expenses for each fiscal period as follows:

Operating expenses

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

June 2017
fiscal period
JPY 504 mn(JPY 33 mn)
JPY 386 mn
JPY 9 mn
JPY 2,277 mn
JPY 403 mn
JPY 3,582 mn

December 2017
fiscal period
JPY 537 mn(JPY 36 mn)
JPY 470 mn
JPY 9 mn
JPY 2,407 mn
JPY 382 mn
JPY 3,807 mn

INV expects to incur other operating expenses than the property related expenses for each fiscal
period as follows:・Other operating expenses(of these, asset management
fees)

June 2017
fiscal period
JPY 434 mn

December 2017
fiscal period
JPY 445 mn(JPY 250 mn)(JPY 250 mn)

INV expects to record net operating income for each fiscal period as follows:

NOI

June 2017
fiscal period
JPY 7,980 mn(JPY 5,259 mn)(JPY 2,347 mn)

・NOI(of these, hotel NOI)(of these, residential NOI)

December 2017
fiscal period
JPY 9,097 mn(JPY 6,083 mn)(JPY 2,630 mn)

NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues - Property Related Expenses + Depreciation Expenses
INV expects to incur non-operating expenses for each fiscal period as follows:

Non-operating expenses

・Interest expense
・Finance related costs
・Other non-operating expenses(expenses relating to theissuance of new units for the
public offering)
Total non-operating expenses

20

June 2017
fiscal period
JPY 378 mn
JPY 220 mn
JPY 80 mn(JPY 80 mn)

December 2017
fiscal period
JPY 400 mn
JPY 192 mn(-)

JPY 678 mn

JPY 592 mn

Item

Assumptions
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 June 2017, INV expects to distributean aggregate amount of JPY 4,798 million (distribution per unit: JPY 1,240) based on theassumption that excess profit distribution will be paid (JPY 209 million), in addition to net
income for the fiscal period ending June 2017 (JPY 4,589 million) which will be used as funds.

Distribution per unit

With respect to the distribution for the fiscal period ending December 2017, INV expects todistribute an aggregate amount of JPY 5,731 million (distribution per unit: JPY 1,481) based on
the assumption that excess profit distribution will be paid (JPY 80 million), in addition to net
income for the fiscal period ending December 2017 (JPY 5,651 million) which will be used as
funds.
For the fiscal periods ending June 2017 and December 2017, INV expects to record deferredgain on hedge of the interest rate swap as the valuation and conversion adjustments, etc. of JPY
151 million, which is equal to the amount for the fiscal period ended December 2016. The
distribution per unit is calculated based on the assumption that fluctuation of the market value ofthe interest rate swap does not affect the 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.

21

Item

Assumptions

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, andtherefore, INV has adopted the policy to make distributions in excess of profits in order tostabilize distributions, in cases where dilution of investment units or significant expenses are to
be recorded in connection with, among other things, the acquisition of assets or the raising of
capital, leading to a temporary decrease in distribution, taking into consideration the level of
distribution per unit assuming such acquisition of assets or capital raising had contributed for a
full fiscal period.
INV may also consider making distributions in excess of profits 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 June 2017, due to one-off expenses in connection with
Public Offering, Acquisition and Borrowings, earnings per unit is expected to decrease.
Therefore, from the perspective of maintaining stable distributions, INV intends to make
distributions in excess of profits (JPY 43 per unit) within the scope of the expected shortfall
between actual earnings per unit and the simulated earnings per unit after the transactions.
In addition, INV also intends to make distributions in excess of profits (JPY 12 per unit for the
fiscal period ending June 2017, JPY 21 per unit for the fiscal period ending December 2017) inorder to cope with the discrepancy between tax and accounting treatment for the fiscal period
ending June 2017 and the fiscal period ending December 2017.

Excess profit distribution per unit

Other

June 2017
fiscal period
JPY 55

December 2017
fiscal period
JPY 21

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

22

3. Financial Statements(1)

Balance Sheet(Unit: JPY thousand)Fiscal period ended
December 31, 2016(as of December 31, 2016)

Fiscal period ended
June 30, 2016(as of June 30, 2016)
AssetsCurrent assets:
Cash and bank deposits
Cash and bank deposits in trust
Accounts receivable
Rental receivables
Prepaid expenses
Consumption taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets:
Property and equipment
Buildings, at cost
Accumulated depreciation
Buildings, net
Buildings and accompanying facilities, at cost
Accumulated depreciation
Buildings and accompanying facilities, net
Structures, at cost
Accumulated depreciation
Structures, net
Land
Buildings in trust, at cost
Accumulated depreciation
Buildings in trust, net
Buildings and accompanying facilities in trust,at costAccumulated depreciation
Buildings and accompanying facilities intrust, 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 in trust
Total intangible assets
Investment and other assets
Guarantee deposits
Long-term prepaid expenses
Derivatives assets
Other
Total investments and other assets
Total non-current assets
Total assets

11,322,762
5,441,316
201
1,375,846
394,524
2,672,787
35(2,764)
21,204,709

8,714,907
5,499,826
19
1,398,433
387,328
32(1,334)
15,999,214

85,914(9,948)75,96538,862(21,375)
17,4872,779(1,401)
1,377
711,834
101,837,752(5,539,382)
96,298,370

85,914(10,489)
75,42438,862(22,150)
16,712
2,779(1,467)
1,311
711,834
102,029,376(6,800,686)
95,228,689

23,193,164

23,379,828(3,592,722)(4,312,055)

19,600,442

19,067,773

336,691(147,949)
188,742
500,608(179,738)
320,869
135,384,518
46,368
252,645,976

340,005(158,426)
181,579
651,007(221,184)
429,823
135,384,518
251,097,667

8,871,542
8,871,542

8,840,627
8,840,627

613,914729,351

613,914616,340
151,259
42,851
1,424,366
261,362,660
277,361,874

40,6401,383,905
262,901,424
284,106,133
23

(Unit: JPY thousand)Fiscal period ended
December 31, 2016(as of December 31, 2016)

Fiscal period ended
June 30, 2016(as of June 30, 2016)
Liabilities
Current liabilities:
Accounts payable
Short-term loans payable

188,3623,498,000

Accounts payable-otherAccrued expenses

8,957,286
186,571

Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities:
Long-term loans payable
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits
Derivatives liabilities

182,601

605
507,135
21,072

51,825
166,066605
460,521522,072
13,583

13,359,034

1,397,276

138,419,000
2,035,843
28,663
227,532

Asset retirement obligations

31,050142,419,000
2,030,396
28,66331,260Total non-current liabilities

140,742,089

144,509,319

154,101,123

145,906,596

120,367,271

120,367,271

6,264,432

6,264,432*3 -*3 (224,225)

Total liabilities
Net assets
Unitholders’ equity:
Unitholders’ capital
Surplus:Capital surplus
Deduction of capital surplus
Allowance for temporary differences
adjustment
Other deduction of capital surplus(763,290)(763,290)

Total deduction of capital surplus(763,290)(987,516)

Capital surplus (net)
Voluntary reserve:
Reserve for temporary differences
adjustment
Voluntary reserve

5,501,141

5,276,915*1 708

*1 -

708

-

Retained earnings

4,363,420

5,659,831

Total surplus
Total unitholders’ equity
Valuation and translation adjustments:
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

24

9,865,270

10,936,747

130,232,542

131,304,019(227,532)

151,259(227,532)

151,259*2 130,005,009*2 131,455,278

284,106,133

277,361,874

(2)Statement of Income and Retained Earnings(Unit: JPY thousand)Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Fiscal period ended
June 30, 2016
(from January 1, 2016
to June 30, 2016)
Operating revenue
Rental revenue－real estate*1 8,158,220*1 9,511,466

Total operating revenue

8,158,220

9,511,466

Operating expenses
Property related expenses*1 2,697,986*1 3,162,067

Asset management fees
Directors’ compensation

250,000
4,800

Asset custody fees
Administrative service fees

9,128
24,010

Provision of allowance for doubtful accounts
Other

269
98,120250,000
4,800
14,02627,8901,123
117,347

Total operating expenses
Operating income
Non-operating income
Interest income
Interest on tax refund
Refund of consumption taxes

3,084,315

3,577,255

5,073,905

5,934,211

1,316

213

129
6,722
35,949385

2,902

43,186295,185359,540
186,249
-

1,372

Other
Total non-operating income
Non-operating expenses
Interest expenses
Loan-related costs
Investment unit issuance costs

280,326
137,270
712,782545,789

Ordinary income

4,364,025

5,431,608

Income before income taxes

4,364,025

5,431,608

605

605

Total non-operating expenses

Income taxes
Current
Deferred
Total income taxes

-

-

605

605

4,363,420

5,431,003

Retained earnings brought forward-

228,827

Unappropriated retained earnings

4,363,420

5,659,831

Net income

25

(3)

Statement of Changes in Net Assets

Fiscal period ended June 30, 2016 (from January 1, 2016 to June 30, 2016)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalBalance at the beginningof the period
Changes during theperiodIssuance of new
investment units
Other distributions inexcess of retained
earnings
Reserve for temporary
differences adjustment
Distributions fromsurplus

Voluntary reserve

Deduction of capital surplus
Other
Allowance
CapitalDeduction of
for temporary deduction of
surplus (net)capitalcapitaldifferences
surplussurplusadjustment

Capitalsurplus82,465,438

6,264,432---

6,264,432

ሺ763,290)

ሺ763,290)(763,290)

Reserve fortemporarydifferences
adjustment

Voluntary
reserve

-

-

708

708

37,901,832

Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod37,901,832--

ሺ763,290)(763,290)(763,290)

708

708

120,367,271

6,264,432-

ሺ763,290)

ሺ763,290)

5,501,141

708

708

Valuation and translation
adjustments

Unitholders’ equity
SurplusRetainedearnings
Balance at the beginningof the period
Changes during theperiodIssuance of new
investment units
Other distributions inexcess of retained
earnings
Reserve for temporary
differences adjustment
Distributions fromsurplus
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod

3,028,323

Total
unitholders’
Total surplus
equity9,292,755

91,758,194

Deferred
gains orlosses onhedges-Totalvaluation andtranslation
adjustments

Total net
assets-91,758,194

37,901,832

37,901,832

ሺ763,290)(763,290)(763,290)

(708)

-

-

-

ሺ3,027,614)

ሺ3,027,614)(3,027,614)

ሺ3,027,614)

4,363,420

4,363,420

4,363,420

4,363,420(227,532)(227,532)(227,532)

1,335,097

572,515

38,474,348

ሺ227,532)(227,532)

38,246,815

4,363,420

9,865,270

130,232,542

ሺ227,532)

ሺ227,532)

130,005,009

26

Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)(Unit: JPY thousand)Unitholders’ equity
SurplusCapital surplus
Unitholders’capitalBalance at the beginningof the period
Changes during theperiodReversal of reserve fortemporary differences
adjustment
Distributions fromsurplusDistributions in excess
of retained earnings
from allowance fortemporary differences
adjustment

Voluntary reserve

Deduction of capital surplus
Other
Allowance
CapitalDeduction of
for temporary deduction of
surplus (net)capitalcapitaldifferences
surplussurplusadjustment

Capitalsurplus120,367,271

6,264,432

ሺ763,290)-

ሺ224,225)(763,290)

5,501,141

ሺ224,225)(224,225)

Reserve fortemporarydifferences
adjustment

Voluntary
reserve

708

708

(708)

(708)

Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiod--ሺ224,225)-(224,225)(224,225)

(708)

(708)

120,367,271

6,264,432

ሺ224,225)

ሺ763,290)

ሺ987,516)

5,276,915--

Valuation and translation
adjustments

Unitholders’ equity
SurplusRetainedearnings
Balance at the beginningof the period
Changes during theperiodReversal of reserve fortemporary differences
adjustment
Distributions fromsurplusDistributions in excess
of retained earnings
from allowance fortemporary differences
adjustment
Net income
Changes other thanunitholders’ equity(net)
Total changes during theperiodBalance at the end of theperiodTotalunitholders’
Total surplus
equityDeferred
gains orlosses onhedgesTotalvaluation andtranslation
adjustments

Total net
assets(227,532)(227,532)

130,005,009

4,363,420

9,865,270

130,232,542

708

-

-

-

(4,135,302)

ሺ4,135,302)(4,135,302)(4,135,302)

ሺ224,225)(224,225)

ሺ224,225)

5,431,003

5,431,003

5,431,003

5,431,003

378,792

378,792

378,792

1,296,410

1,071,476

1,071,476

378,792

378,792

1,450,268

5,659,831

10,936,747

131,304,019

151,259

151,259

131,455,278

27

(4)

I

Statement of Cash Distribution

Unappropriated retained earnings

Fiscal period ended June 30, 2016
(from January 1, 2016 to June 30, 2016)

Fiscal period ended December 31, 2016
(from July 1, 2016 to December 31, 2016)

JPY 4,363,420,951

JPY 5,659,831,868

JPY 708,942--

JPY 224,225,264

JPY 224,225,264-

JPY 4,359,527,264

JPY 5,429,192,048

JPY 1,186

JPY 1,477

JPY 4,135,302,000

JPY 5,429,192,048

JPY 1,125

JPY 1,477

JPY 224,225,264-

JPY 61-

JPY 228,827,893

JPY 6,414,556

As shown above, the distribution perunit for the Reporting Period is JPY
1,186.
With respect to profit distributions (notincluding distributions in excess of
profit), INV decided to distribute almost
all of its profit as defined in Article 136,
Paragraph 1 of the Investment Trust Act,
other than fractional amount per unit lessthan JPY 1, aiming to include themaximum amount of profit distributions
in deductible expenses in accordancewith Article 67-15, Paragraph 1 of the
Act on Special Taxation Measures (ActNo. 26, 1957). As a result, thedistribution of earnings per unit (notincluding distributions in excess of profit
per unit) is JPY 1,125.
In addition, in accordance with the
distribution policy as set forth in the
Articles of Incorporation, INV makes
distributions in excess of earnings of theamount that it determines as the amountequivalent to items deducted from net
assets (as set forth in Article 2,
Paragraph 2, Item 30 (b) of the

As shown above, the distribution perunit for the Reporting Period is JPY
1,477.
With respect to profit distributions (notincluding Excess Profit Distribution),
INV decided to distribute almost all of
its profit as defined in Article 136,
Paragraph 1 of the Investment Trust Act,remaining after deducting the reversal of
allowance for temporary differences
adjustments, other than fractionalamount per unit less than JPY 1, aiming
to include the maximum amount of
profit distributions in deductible
expenses in accordance with Article
67-15, Paragraph 1 of the Act on Special
Taxation Measures (Act No. 26, 1957).
As a result, the distribution of earnings
per unit (not including Excess Profit
Distribution per unit) is JPY 1,477.
Furthermore, INV has decided not tomake Distribution in excess of profit.

II

Reversal of voluntary retained
earnings
Reversal of reserve for temporary
differences adjustment
III Incorporation into unitholders'equityOf which, reversal of allowance fortemporary differences adjustment
IV Distribution in excess of retained
earnings
Allowance for temporary
differences adjustment
V

Distributions(Distribution per unit)
Of which, distributions ofearnings(Distributions of earnings perunit)
Of which, allowance fortemporary differences adjustment(Distributions in excess ofretained earnings per unit
(Allowance for temporary
differences adjustment))

VI Retained earnings carried forward
Calculation method of distribution
amount28

Ordinanceon
Accountingsof
Investment Corporations), taking into
consideration the effect of the items
deducted from net assets on the
distributions (the “Excess Profit
Distribution”). For the Reporting Period,
INV makes Distribution in excess ofearnings of JPY 227 million,
corresponding to deferred losses onhedges, of which, the distribution ofallowance for temporary differences
adjustment is JPY 224 million, and the
distribution per unit of the allowance fortemporary differences adjustment is JPY
61.

29

(5)

Statement of Cash Flows(Unit: JPY thousand)Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Fiscal period ended
June 30, 2016
(from January 1, 2016
to June 30, 2016)
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Investment unit issuance costs
Loan-related costs

4,364,025
1,676,751
137,270
280,326

Interest income
Interest expenses(1,316)295,185

Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in rental receivable269(306,493)

Decrease (increase) in consumption taxes receivable
Increase (decrease) in accounts payable(1,744,762)
7,056

5,431,608
2,065,066
186,249(129)
359,540(1,430)(22,587)
2,672,787(66,883)
460,521

Increase (decrease) in consumption taxes payable
Increase (decrease) in accounts payable-other884,265

Increase (decrease) in accrued expenses
Increase (decrease) in advances received

38,57733,971

Increase (decrease) in deposits received
Others, net(14,615)(34,907)

14,936(23,418)(12,451)(881,047)(5,946)

Subtotal

5,615,604

10,176,817

Interest income received
Interest expenses paid
Income taxes paid

1,316
(297,081)
(564)

129
(358,219)

Net cash provided by operating activities

5,319,276

9,818,122(82,786,898)(3,055,031)(8,449,701)(56,280)(53,815)474,368

48,371(574,396)(2,211)(2,211)(8,457,356)

Cash flows from investing activities
Purchases of property and equipment in trust
Purchases of leasehold rights in trust
Repayments of tenant leasehold and security deposits
in trust
Proceeds from tenant leasehold and security deposits intrust
Payments of tenant leasehold and security deposits
Other, net

(605)

-

Net cash used in investing activities(86,000,448)

Cash flows from financing activities
Proceeds from short-term loans payable
Repayment of short-term loans payable

3,498,000(1,080,000)

Proceeds from long-term loans payable
Payments for loan-related costs

47,800,000(594,356)

Payment of distributions of earnings
Payment of distribution in excess of retained earnings
from allowance for temporary differences adjustment
Payment of other distributions in excess of retained
earnings
Proceeds from issuance of investment units(3,014,523)(3,498,000)
4,000,000(53,775)(4,118,229)-(224,225)(763,290)-

37,780,441-(15,879)

83,626,270(3,910,109)

Net increase (decrease) in cash and cash equivalents

2,945,097(2,549,344)

Cash and cash equivalents at beginning of period

13,818,981

16,764,078*1 16,764,078*1 14,214,734

Other, net
Net cash provided by (used in) financing activities

Cash and cash equivalents at end of period
30

-

(6)

Notes to Concerning Going Concerns Assumption
Not applicable(7)

Notes to Concerning Significant Accounting Policies
1. 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, plant and equipment are as follows.
Buildings
77 years
Buildings and accompanying facilities
8-24 years
Structures
7-18 years
Buildings in trust
2-67 years
Buildings and accompanying facilities in trust
2-33 years
Structures in trust
3-55 years
Tools, furniture and fixtures in trust
2-19 years(b) Intangible assets
The straight-line method is used. For leasehold rights in trust (fixed-term land lease for business purposes), the straight-line
method based on the lease period is used.
(c) Long-term prepaid expenses
The straight-line method is used.
2.

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 basedon past bad debt experiences, and specific allowances are provided for accounts with a possibility of default based on theestimated amounts considered to be uncollectible by considering the collectability of accounts on an individual basis.

3.

Revenue and expense recognition
Accounting treatment of property taxes and other taxes
With respect to property taxes, city planning taxes and depreciable asset taxes, of the tax amount assessed and determined,
the amount corresponding to the relevant fiscal 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 is capitalized as partof the acquisition cost of the real estate or trust beneficiary interests in real estate instead of being charged as expense.
There is no amount equivalent to property taxes that was included as part of the acquisition of real estate during the fiscal
period ended December 31, 2016.

4.

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 ofIncorporation in accordance with its risk management policy.

31

(d) Method of evaluating hedge effectivenessHedge effectiveness is evaluated by comparing the cumulative amount of changes in cash flows of the hedging instrument
and the cumulative amount of changes in cash flows of the hedged item and verifying the difference in the amounts ofchange of both the hedged item and the hedging instrument.
5.

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 in trust, floating
deposits, deposits in trust and short-term investments that are very liquid and realizable with a maturity of three months orless when purchased and that are not subject to significant risks of changes in value.

6.

Other significant matters which constitute the basis for preparation of financial statements(i) 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.
(a) Cash and bank deposits in trust(b) 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(c) Leasehold rights in trust(d) Tenant leasehold and security deposits in trust(ii) Accounting treatment of deferred assets
Investment unit issuance costs
The full amount is recorded as expense at the time of expenditure.
(iii) Accounting treatment of consumption taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.

(8)Notes to the Financial Statements(Notes to the Balance Sheet)*1.

Matters concerning treatment of reversal of reserve for temporary differences adjustment.
Fiscal period ended June 30, 2016 (as of June 30, 2016)
INV plans to reverse all of the reserve for temporary differences adjustment in the amount of JPY 708 thousand, and use
the funds as part of the profit distributions to be made in the next fiscal period.
Fiscal period ended December 31, 2016 (as of December 31, 2016)
INV reversed all of the reserve for temporary differences adjustment in the amount of JPY 708 thousand, and used thefunds as part of the profit distributions.

*2.

Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations
Fiscal period ended
June 30, 2016(as of June 30, 2016)
50,00032(Unit: JPY thousand)Fiscal period ended
December 31, 2016(as of December 31, 2016)
50,000

*3.

Allowance for temporary differences adjustment
Fiscal period ended June 30, 2016 (as of June 30, 2016)
Not applicable
Fiscal period ended December 31, 2016 (as of December 31, 2016)
1. Reasons, related assets and amounts
Balance atthe end of
previous
periodAllowance
set aside
duringperiod(Unit: JPY thousand)
Balance atthe end of
Reason for
current
reversal
periodReversalduringperiodRelatedassets, etc.

ReasonInitialamountDeferred
gains orlosses onhedgesLoss oninterest-rate
swaps
recognized(224,225)-(224,225)-(224,225)-(224,225)-(224,225)-(224,225)

-

Total

2. Method of reversal(1) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount isscheduled to be reversed.

33

(Notes to Statement of Income and Retained Earnings)*1.

Real estate rental revenues and expenses
Fiscal period ended
June 30, 2016
(from January 1, 2016 toJune 30, 2016)

A.

(Unit: JPY thousands)
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Real estate rental revenues

Rental revenue-real estate
7,889,877

9,237,784

268,342

273,682

8,158,220

9,511,466

Maintenance costs

554,149

580,896

Taxes and public dues

281,065

356,372

Insurance expenses

12,66911,807

1,676,736

2,065,066

173,364

147,924

Total

2,697,986

3,162,067

C.

5,460,234

6,349,399

Rent/common area charges
Other revenues
Total
B.

Real estate rental expenses

Property related expenses

Depreciation expenses
Other expenses

Real estate rental income (A-B)(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
June 30, 2016
(from January 1, 2016 toJune 30, 2016)

Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Number of issuable investment units

10,000,000 units

10,000,000 units

Number of investment units issued and outstanding

3,675,824 units

3,675,824 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:.
Fiscal period ended
June 30, 2016
(from January 1, 2016 toJune 30, 2016)
Cash and bank deposits

11,322,762(Unit: JPY thousands)
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)
8,714,907

Cash and bank deposits in trust

5,441,316

5,499,826

Cash and cash equivalents

16,764,078

14,214,734

34

(Notes Related to Lease Transactions)Operating lease transactions (as lessee)
Unexpired lease fees

Due within one year

244,619(Unit: JPY thousand)Fiscal period ended
December 31, 2016(as of December 31, 2016)
244,619

Due after one year

7,490,299

7,367,989

Total

7,734,918

7,612,609

Fiscal period ended
June 30, 2016(as of June 30, 2016)

Operating lease transactions (as lessor)
Unexpired lease fees

Due within one year

5,988,176(Unit: JPY thousand)Fiscal period ended
December 31, 2016(as of December 31, 2016)
5,988,176

Due after one year

50,718,568

47,412,300

Total

56,706,745

53,400,477

Fiscal period ended
June 30, 2016(as of June 30, 2016)(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 or borrowing loans.
Derivative transactions are to be entered into for the purpose of hedging against the risk of future interest rate increases, etc.
and not for speculation.
Surplus funds are managed after carefully taking into account safety, liquidity, the interest rate environment and financing.
(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings are mainly used to acquire real estate properties or trust beneficiary interest in realestate (including related acquisition costs) and for the refinancing of existing loan. Liquidity risks relating to loan are
managed by the finance department of the Asset Manager by preparing and updating plans for funds, and monitoring thecovenants set forth in loan agreements.
(3) Supplemental information regarding market value, etc. for financial instruments
The fair value of financial instruments is based on quoted market prices if available. When quoted market prices are notavailable, fair value is determined through a reasonable estimate. Since certain assumptions, etc. are used in estimating thefair value, different assumptions, etc. may result in the variance of such value.

35

2.

Estimated fair value of financial instruments

Fiscal period ended June 30, 2016 (As of June 30, 2016)
Book value, fair value and the difference between values as of June 30, 2016 are as follows.
(Unit: JPY thousand)Book Value

Fair Value

Difference(1) Cash and bank deposits

11,322,762

11,322,762-(2) Cash and bank deposits in trust

5,441,316

5,441,316-

16,764,078

16,764,078-(3) Short-term loans(3,498,000)(3,498,000)-(4) Accounts payable(8,957,286)(8,957,286)-(5) Long-term loans(138,419,000)(138,419,000)-(150,874,286)(150,874,286)-(227,532)(227,532)-

Total assets

Total liabilities(6) Derivatives

Fiscal period ended December 31, 2016 (As of December 31, 2016)
Book value, fair value and the difference between values as of December 31, 2016 are as follows.
(Unit: JPY thousand)Book Value

Fair Value

Difference(1) Cash and bank deposits

8,714,907

8,714,907-(2) Cash and bank deposits in trust

5,499,826

5,499,826-

14,214,734

14,214,734-(3) Short-term loans

-

-

-

(5) Long-term loans(142,419,000)(142,419,000)-(142,419,000)(142,419,000)-

151,259

151,259-

Total assets

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 the total net amountis a negative amount, such amount is shown in parenthesis.
(Note 1) Methods to calculate fair values of financial instruments(1) Cash and bank deposits(2) Cash and bank deposits in trust(3) Short-term loans(4) Accounts payable
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of the fairvalue, and therefore, the book value is used as the fair value.
(5) Long-term loans
Long-term loan with floating interest rates reflecting changes in market rates within a short term period are stated attheir book value as their book value approximate their fair value.
(6) Derivatives
Please refer to the “Notes Related to Derivative Transactions” below.

36

(Note 2) Financial instruments for which fair value is extremely difficult to value(Unit: JPY thousand)Fiscal period ended
December 31, 2016(as of December 31, 2016)

Fiscal period ended
June 30, 2016(as of June 30, 2016)

Tenant leasehold and28,663
28,663security deposits
Tenant leasehold and2,030,396
2,035,843
security deposits in trust
Tenant leasehold and security deposits and tenant leasehold and security deposits in trust have no observable market price,
and it is impracticable to reasonably estimate their future cash flows because the repayment dates of those deposits and thetiming of the lessee’s exit from the property are not certain. Thus, their fair value is not disclosed.
(Note 3) Remaining schedule of monetary claims after the closing date of the fiscal period
Fiscal period ended June 30, 2016 (As of June 30, 2016)(Unit: JPY thousand)Due after one Due after two Due after three Due after four
Due after
to two years to three years to four years to five years
five years

Due within
one year
Cash and bank deposits

11,322,762

-

-

-

-

-

Cash and bank deposits in trust

5,441,316

-

-

-

-

-

Total

16,764,078

-

-

-

-

-

Fiscal period ended December 31, 2016 (As of December 31, 2016)(Unit: JPY thousand)Due after one Due after two Due after three Due after four
Due after
to two years to three years to four years to five years
five years

Due within
one year
8,714,907

-

-

-

-

-

Cash and bank deposits in trust

5,499,826

-

-

-

-

-

Total

14,214,734

-

-

-

-

-

Cash and bank deposits(Note 4) Repayment schedule of long-term loans and other interest-bearing debts after the closing date of the fiscal period

Fiscal period ended June 30, 2016 (As of June 30, 2016)

Short-term loans(Unit: JPY thousand)Due within Due after one Due after two Due after three Due after four
Due after
one yearto two years to three years to four years to five years
five years
3,498,000-

Long-term loans--

46,663,000

44,094,000

47,662,000

-

Total

3,498,000-

46,663,000

44,094,000

47,662,000-

Fiscal period ended December 31, 2016 (As of December 31, 2016)

Short-term loans(Unit: JPY thousand)Due after one Due after two Due after three Due after four
Due after
to two years to three years to four years to five years
five years-

Long-term loans-

28,979,000

51,045,000

42,012,000

20,383,000

-

Total

-

28,979,000

51,045,000

42,012,000

20,383,000-

Due within
one year37

(Notes Related to Investment Securities)
Not applicable(Notes Related to Derivative Transactions)1.

Derivative transactions to which hedge accounting is not applied
Fiscal period ended June 30, 2016 (As of June 30, 2016)
Not applicable
Fiscal period ended December 31, 2016 (As of December 31, 2016)
Not applicable2.

Derivative transactions to which hedge accounting is applied
Fiscal period ended June 30, 2016 (As of June 30, 2016)
The contract amount as of the closing date under each hedge-accounting method and the amount equivalent to thenotional principal prescribed in the contracts are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivative transaction
type, etc.

Primary hedged
item

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

Fair value (*2)

Interest rate swap
Long-term
99,119,000
99,119,000(227,532)
Receive floating
loans
rate/pay fixed rate
(Note 1) The contract amount, etc. is stated based on a notional principal.
(Note 2) The fair value is estimated based on the price, etc. presented by the correspondent financial institutions.
Principle accounting
methodFiscal period ended December 31, 2016 (As of December 31, 2016)
The contract amount as of the closing date under each hedge-accounting method and the amount equivalent to thenotional principal prescribed in the contracts are as shown below.
(Unit: JPY thousand)
Method of hedge
accounting

Derivative transaction
type, etc.

Primary hedged
item

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

Fair value (*2)

Interest rate swap
Long-term
99,119,000
99,119,000
151,259
Receive floating
loans
rate/pay fixed rate
(Note 1) The contract amount, etc. is stated based on a notional principal.
(Note 2) The fair value is 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 theremaining period until the expiration of the fixed-term land lease agreement, and by using a discount rate of 1.342%.
38

3.

Increase/decrease in the total amount of asset retirement obligations
Fiscal period ended
June 30, 2016
(from January 1, 2016 toJune 30, 2016)
30,868182
31,050

Balance at the beginning of the period
Increase due to the acquisition of properties
Accretion expense
Balance at the end of the period(Unit: JPY thousand)Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)
31,050209
31,260(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 no reportable segments.
II. Related Information
Fiscal period ended June 30, 2016 (from January 1, 2016 to June 30, 2016)
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
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating
revenue on the statement of income.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted for over 90% of theamount of property and equipment on the balance sheet.
3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues

MyStays Hotel Management Co., Ltd.

3,389,166

Related segment
Real Estate Investment

Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)
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
Disclosure is omitted because net sales to external customers in Japan accounted for over 90% of the operating revenue
on the statement of income.
(2) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounted for over 90% of theamount of property and equipment on the balance sheet.

39

3. Information about each major customer(Unit: JPY thousand)Name of customer

Operating revenues

Related segment

MyStays Hotel Management Co., Ltd.

4,043,845

Real Estate Investment

Naqua Hotel & Resorts Management Co., Ltd.

1,040,790

Real Estate Investment

40

(Notes Related to Rental Properties)
INV owns residential properties and hotels as core assets as well as other various properties including offices and commercial
facilities principally in the Tokyo area and major regional cities in order to establish a portfolio which focuses on both stability
and growth potential. The book value changed during the period and balance at the end of the period are as follows.

Residences

Book value

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

Fair value at the end of the period

OfficesBook value

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

Fair value at the end of the period

Parking lots

Book value

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

Fair value at the end of the period

HotelsBook value

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

Fair value at the end of the period

Total

Book value

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

Fair value at the end of the period

Fiscal period ended
June 30, 2016
(from January 1, 2016 toJune 30, 2016)(Unit: JPY thousand)Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

60,305,706

68,274,496

7,968,789(438,657)

68,274,496

67,835,839

77,214,000

77,843,000

8,487,876

8,470,387(17,489)(29,405)

8,470,387

8,440,981

7,219,000

7,406,000

5,134,083

5,087,525(46,557)(38,298)

5,087,525

5,049,226

5,840,000

5,890,000

100,821

100,820(1)(1)

100,820

100,819

113,000

113,000

95,223,054

179,537,920

84,314,865(1,026,493)

179,537,920

178,511,427

232,905,000

236,940,000

169,251,542

261,471,150

92,219,607(1,532,855)

261,471,150

259,938,294

323,291,000

328,192,000(Note 1) Book value is the figure calculated by subtracting accumulated depreciation from acquisition price (including
acquisition-related costs).

41

(Note 2) The major factors for the increase for the fiscal period ended June 30, 2016 were acquisition of residential
properties/hotels, capital expenditures related to construction work, and the major factor of the decrease wasdepreciation. The major factors for the increase for the fiscal period ended December 31, 2016 was capital
expenditures related to construction work, and the major factor for the decrease was depreciation.
(Note 3) The fair value as of the end of the reporting period is determined based on the appraisal value provided by Asset
Research and Development Inc., Japan Real Estate Institute, Morii Appraisal & Investment Consulting Inc., Tanizawa
Sogo Appraisal Co., Ltd., and Daiwa Real Estate Appraisal Co., Ltd.
For information related to profits and losses from rental properties, please refer to “Notes to Statement of Income and Retained
Earnings.”

42

(Notes Related to Tax Accounting)
1. Significant components of deferred tax assets and liabilities(Unit: JPY thousand)Fiscal period ended
June 30, 2016

Fiscal period ended
December 31, 2016

(Deferred tax assets - current assets)
Enterprise tax payable

481

661

Accounts receivable (merger)

183－

Allowance for doubtful accounts

877

423

Subtotal

1,542

1,084

Valuation allowance

1,542

1,084

－
－

－

711,143

700,210

2,092,087

2,092,087

Total(Deferred tax assets, net)－(Deferred tax assets - non-current assets)
Buildings and other (merger)
Land (merger)
Deferred gains/losses on hedges
Loss carried forward

72,218－7,200,289

7,200,289

9,855

9,921

－

16,24810,085,594

10,018,757

9,797

9,797

－

48,009Asset retirement obligations
Depreciation of fixed-term leasehold rights
Subtotal(Deferred tax liabilities – non-current liabilities)
Removal expenses included in asset retirement
obligations
Deferred gains or losses on hedges

9,797

57,807

10,075,797

9,960,950－－－

Subtotal
Valuation allowance
Total(Deferred tax assets, net)－

2. Significant difference between statutory tax rate and the effective tax rate
(Unit: %)Fiscal period ended
June 30, 2016

Fiscal period ended
December 31, 2016

Statutory tax rate

32.31

31.74

Deductible cash distributions(32.21)(31.71)

Changes in valuation allowance(2.72)(0.09)

Others2.63

0.08

Effective tax rate

0.01

0.01

(Notes Related to Equity-Method Income)Not applicable43

(Notes Related to Transactions with Related Parties)
1.

Transactions with Parent Company and Major Unitholders
Fiscal period ended June 30, 2016 (from January 1, 2016 to June 30, 2016)

Classification

Interested partyof the AssetManager(Note 1)Name

Address

Statedcapital(JPY
million)

Percentage
Relationshipof votingBusiness orrightsCommonoccupation
Business
owned
board
relationship(%)
member-Seller oftrust
beneficiaryinterests inreal estate-

Seller oftrust
beneficiaryinterests inreal estate-

Seller oftrust
beneficiaryinterests inreal estate-

Seller oftrust
beneficiaryinterests inreal estate-

Seller oftrust
beneficiaryinterests inreal estate-

Seller oftrust
beneficiaryinterests inreal estate-

Seller oftrust
beneficiaryinterests inreal estate-

Seller oftrust
beneficiaryinterests inreal estate--

Seller oftrust
beneficiaryinterests inreal estateHotelbusiness--

Lesseeandoperatorof hotelsHotelbusiness--

Lesseeandoperatorof hotels

Investment

Aki Tokutei
Minato-ku,
Mokuteki KaishaTokyo

0.1 management

Navaro Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo

Investment
0.1 managementbusiness

Momo Tokutei Minato-ku,
Mokuteki Kaisha
Tokyo

Investment
0.1 managementbusiness

Tsuki Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo

Investment
0.1 managementbusiness

Septentrio
Minato-ku,
Tokutei Mokuteki
Tokyo
KaishaInvestment
0.1 managementbusiness

Septentrio 2
Minato-ku,
Tokutei Mokuteki
Tokyo
KaishaInvestment
0.1 managementbusiness

Septentrio 3
Minato-ku,
Tokutei Mokuteki
Tokyo
KaishaInvestment
0.1 managementbusinessGinga Tokutei Minato-ku,
Mokuteki Kaisha
Tokyo

Investment
0.1 managementbusiness

Wakusei Tokutei Minato-ku,
Mokuteki Kaisha
Tokyo

Investment
0.1 managementbusiness

Naqua Hotel &Resorts
Management
Co., Ltd.

Minato-ku,
Tokyo

10

MyStays HotelManagement
Co., Ltd.

Minato-ku,
Tokyo

100

-

business

-

-

-

-

-

-

-

Type oftransaction
Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)Purchase oftrust
beneficiaryinterests inreal estate(Note 2)
(Note 5)

Transaction
amount (JPY
Account
thousand)(Note 1)

3,160,000--

20,155,000--

7,934,000--

24,674,000--

12,588,600--

4,196,199--

4,196,199--

13,761,000

Accounts
payable2,139,000-

Rentalrevenues

627,563

Accounts
receivable

220,811

Rentalrevenues

3,389,166

Accounts
receivable

990,543

Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.

44

Balance atthe end of
the period(JPY
thousand)(Note 1)8,800,548-

(Note 2)(Note 3)(Note 4)(Note 5)The terms and conditions have been determined based on the Asset Manager’s internal rules and manual regarding transactions with the sponsor
company.
Aki Tokutei Mokuteki Kaisha, Navaro Tokutei Mokuteki Kaisha, Momo Tokutei Mokuteki Kaisha, Tsuki Tokutei Mokuteki Kaisha, Septentrio
Tokutei Mokuteki Kaisha, Septentrio 2 Tokutei Mokuteki Kaisha, Septentrio 3 Tokutei Mokuteki Kaisha, Ginga Tokutei Mokuteki Kaisha,
Wakusei Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd., and MyStays Hotel Management Co., Ltd. have no capital
relationship to be disclosed with the Asset Manager. The Tokutei Mokuteki Kaisha or the lessee and operator have received an anonymous
partnership investment or investment through funds that are managed by affiliates of Fortress Investment Group LLC (“FIG”), an affiliate ofCalliope. Accordingly, INV treats Aki Tokutei Mokuteki Kaisha, Navaro Tokutei Mokuteki Kaisha, Momo Tokutei Mokuteki Kaisha, Tsuki
Tokutei Mokuteki Kaisha, Septentrio Tokutei Mokuteki Kaisha, Septentrio 2 Tokutei Mokuteki Kaisha, Septentrio 3 Tokutei Mokuteki Kaisha,
Ginga Tokutei Mokuteki Kaisha, Wakusei Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd., and MyStays HotelManagement Co., Ltd. as the equivalent to interested parties.
Calliope holds 609,942 units (holding percentage: 16.6%) of the issued investment units of INV.
The purchase of trust beneficiary interests pertains to the following properties. The transaction amount is the purchase price stated in the trust
beneficiary purchase agreement, to which other expenses for acquisition, property taxes, city planning taxes and consumption taxes are notincluded.

Property
NumberName of Property

Counterparty

A103

Royal Parks Momozaka

Momo Tokutei Mokuteki Kaisha

2,910,000

A104Royal Parks Shinden

Momo Tokutei Mokuteki Kaisha

5,024,000

D38

Hotel MyStays Shinsaibashi

Aki Tokutei Mokuteki Kaisha

3,160,000

D39

Comfort Hotel Kurosaki

Navaro Tokutei Mokuteki Kaisha

1,148,000

D40

Comfort Hotel Maebashi

Navaro Tokutei Mokuteki Kaisha

1,128,000

D41

Comfort Hotel Tsubame-Sanjo

Navaro Tokutei Mokuteki Kaisha

1,010,000

D42

Comfort Hotel Kitami

Navaro Tokutei Mokuteki Kaisha

851,000

D43

Hotel MyStays Gotanda Station

Tsuki Tokutei Mokuteki Kaisha

24,674,000

D44Hotel Epinard Nasu

Sepentrio Tokutei Mokuteki Kaisha
Sepentrio 2 Tokutei Mokuteki Kaisha
Sepentrio 3 Tokutei Mokuteki Kaisha

20,981,000

D45

Hotel MyStays Fukuoka Tenjin

Navaro Tokutei Mokuteki Kaisha

8,059,000

D46

Hotel MyStays Hamamatsucho

Navaro Tokutei Mokuteki Kaisha

7,959,000

D47

Hotel MyStays Premier Kanazawa(Note)

Ginga Tokutei Mokuteki Kaisha

13,761,000

D48

Takamatsu Tokyo REI Hotel

Wakusei Tokutei Mokuteki Kaisha

2,139,000

Total

Purchase Price (JPY thousand)

92,804,000(Note) The property name was changed from Hotel MyStays Kanazawa on October 1, 2016.

45

Fiscal period ended December 31, 2016 (from July 1, 2016 to December 31, 2016)
Classification

Interested partyof the AssetManager(Note 1)
(Note 2)

(Note 3)

2.

Name

Address

Statedcapital(JPY
million)

Percentage
Relationshipof votingBusiness orrightsCommon Businessoccupation
ownedboard relation(%)
membership

Type oftransaction

Transaction
amount (JPY
Account
thousand)(Note 1)--

Seller of
trust
Payment ofbeneficiary
accounts
interests inpayablereal estateHotelbusiness--

Lesseeandoperatorof hotels

Rentalrevenues

1,040,790

Accounts
receivableHotelbusiness--

Lesseeandoperatorof hotels

Rentalrevenues

4,043,845

Accounts
1,146,414
receivable

Ginga Tokutei
Minato-ku,
Mokuteki Kaisha
Tokyo(Note 2)

Investment
0.1 managementbusiness

Naqua Hotel &Resorts
Management
Co., Ltd.
(Note 2)

Minato-ku,
Tokyo

10

MyStays HotelManagement
Co., Ltd.
(Note 2)

Minato-ku,
Tokyo

100

8,800,548

Accounts
payable-92,474

Consumption taxes, etc., are not included in transaction amounts, but are included in the balance at the end of the period.
Ginga Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd., and MyStays Hotel Management Co., Ltd. have no capital
relationship to be disclosed with the Asset Manager. The tenant and operator have received an anonymous partnership investment or investment
through funds that are managed by affiliates of Fortress Investment Group LLC (“FIG”), an affiliate of Calliope. Accordingly, INV treats
Ginga Tokutei Mokuteki Kaisha, Naqua Hotel & Resorts Management Co., Ltd., and MyStays Hotel Management Co., Ltd. as the equivalent tointerested parties.
Calliope holds 609,942 units (holding percentage: 16.6%) of the issued investment units of INV.

Transactions with Affiliates
None for both the fiscal period ended June 30, 2016 and the fiscal period ended December 31, 2016

3.

Balance atthe end of
the period(JPY
thousand)(Note 1)

Transactions with Companies under Common Control
None for both the fiscal period ended June 30, 2016 and the fiscal period ended December 31, 2016.

46

4.

Transactions with Directors and Major Unitholders
Fiscal period ended June 30, 2016 (from January 1, 2016 to June 30, 2016)
Balance at
Ratio ofClassification

Name

Business or occupation

voting rights

Details of transaction(%)

Transaction

the end ofamount (JPYthe period

thousand)Account(Note 3)

(JPY
thousand)(Note 3)

Executive Director of
Directors andclose
relatives

Naoki
FukudaPayment of asset

INV and President &CEO of Consonant

management fees to-Consonant Investment

Investment Management259,280

Management Co., Ltd.

Co., Ltd.

Accruedexpenses

135,000(Note 1)
Payment ofadministrative agency

Same asSame as

above

above

fees for organizational
Same as above-

management to600

Consonant Investment

Accruedexpenses

324

Management Co., Ltd.
(Note 2)
(Note 1)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the Articles of Incorporation of
INV.

(Note 2)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in “Administrative Agency
Agreement for Organizational Management,” entered into by and between INV and the Asset Manager.

(Note 3)

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 December 31, 2016 (from July 1, 2016 to December 31, 2016)
Balance at
Ratio ofClassification

Name

Business or occupation

voting rights

Details of transaction(%)

Transaction

the end ofamount (JPYthe period

thousand)Account(Note 3)

(JPY
thousand)(Note 3)

Executive Director of
Directors andclose
relatives

Naoki
FukudaPayment of asset

INV and President &CEO of Consonant

management fees to-Consonant Investment

Investment Management

250,000

Management Co., Ltd.

Co., Ltd.

Accruedexpenses

135,000(Note 1)
Payment ofadministrative agency

Same asSame as

above

above

fees for organizational
Same as above-

management toConsonant Investment

600

Accruedexpenses

324

Management Co., Ltd.
(Note 2)
(Note 1)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in the Articles of Incorporation of
INV.

(Note 2)

Naoki Fukuda served as a representative of the third party (the Asset Manager), and the fee is as set forth in “Administrative Agency
Agreement for Organizational Management,” entered into by and between INV and the Asset Manager.

(Note 3)

Consumption taxes, etc. are not included in the transaction amounts, but are included in the balance at the end of the period.

47

(Notes Related to Per Unit Information)
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Fiscal period ended
June 30, 2016
(from January 1, 2016 toJune 30, 2016)
Net assets per unit

JPY 35,368

JPY 35,762

Net income per unit

JPY 1,270

JPY 1,477

Net income per unit is calculated by dividing net income for the period by the daily weighted average number of investment
units issued and outstanding. Diluted net income per unit is not stated as there are no diluted units.
(Note)The basis for calculating net income per unit is as follows.
Fiscal period ended
December 31, 2016
(from July 1, 2016 to
December 31, 2016)

Fiscal period ended
June 30, 2016
(from January 1, 2016 toJune 30, 2016)
Net income for the fiscal period ended December 31, 2016
(JPY thousand)Amounts not attributable to common unitholders(JPY thousand)Net income attributable to common units(JPY thousand)Average number of investment units during the period(units)4,363,420

5,431,003--

4,363,420

5,431,003

3,436,572

3,675,824(Notes Related to Significant Subsequent Events)
1. Issuance of New Investment Units
INV decided on the issuance of new investment units and secondary offering of investment units at its board of directors’
meeting on February 22, 2017. Issue price per unit and other details are scheduled to be determined at future board of
directors’ meeting.
(1)

Issuance of new investment units through Public Offering

Number of new investment units to be issued: 185,000 units(2)

Secondary offering of Investment Units (by way of overallotment)

Number of investment units to be offered: 9,250 units
2. Borrowing of Funds
In order to raise a part of the funds to be used for the acquisition of trust beneficiary interests for the two residential
properties to be acquired on March 14, 2017 (see “3. Acquisition of Assets” below), INV decided on the implementationof the following borrowings at its board of directors’ meeting held on February 22, 2017.
Term Loan (G)LenderBorrowing amountInterest rate, etc.
Interest payment datePrincipal repayment method
Borrowing method
Borrowing date
Maturity date

: Syndicate formed by Mizuho Bank, Ltd.
: JPY 11,250 million: Base Rate (1-month JPY TIBOR) + 0.40%, 0.50%, 0.60%: (i) The last Japanese business day of each month before the principal maturity date,
beginning with March 31, 2017, and (ii) the principal maturity date
: Lump-sum repayment: Unsecured / with no guarantee: March 14, 2017
: March 14, 2020, March 14, 2021, March 14, 2022
48

Term Loan (F)LenderBorrowing amountInterest rate, etc.

: Sumitomo Mitsui Banking Corporation: JPY 3,000 million: Base Rate (1-month JPY TIBOR) + 0.45%: (i) The last Japanese business day of each month before the principal maturity date,
beginning with March 31, 2017, and (ii) the principal maturity date
: Lump-sum repayment: Unsecured / with no guarantee: March 14, 2017
: September 14, 2020

Interest payment datePrincipal repayment method
Borrowing method
Borrowing date
Maturity date

3. Acquisition of Assets
INV decided to acquire the following two properties (total acquisition price of JPY 24,562 million) on February 22,
2017.
Property Number: A105

Property Name: Royal Park Tower Minami-Senju

Anticipated Acquisition Date

March 14, 2017

Acquisition Price (Note)

JPY 21,879 million

Location

Minami-Senju 4-chome, Arakawa-ku, Tokyo

Completion Date

May 2008

Legal Form of Asset

Trust beneficiary interest

Seller

Sakura Tokutei Mokuteki Kaisha

Total Floor Area

47,424.89m2

Leasable Area

39,113.46m2

Property Number: A106

Property Name: Royal Park Seasir Minami-Senju

Anticipated Acquisition Date

March 14, 2017

Acquisition Price (Note)

JPY 2,683 million

Location

Minami-Senju 3-chome, Arakawa-ku, Tokyo

Completion Date

August 2006

Legal Form of Asset

Trust beneficiary interest

SellerMomo Tokutei Mokuteki Kaisha

Total Floor Area

7,248.10m2

Leasable Area

6,496.86m2(Note) Acquisition price is based on the purchase price indicated in the relevant purchase agreement and does not include
acquisition costs, property taxes, city planning taxes and consumption taxes, etc.

49

(10) Changes in Total Number of Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ equity from the date ofestablishment to the end of the Reporting Period are as follows.
Date

Type of Issue

Total Number of Investment
Units Issued and Outstanding
Increase

Unitholders’ Equity (JPY)

Total

Increase

Total

Reference

January 18, 2002

Private placement
for incorporation

400

400

200,000,000

200,000,000(Note 1)

December 26, 2003

Private placement

2,700

3,100

1,012,500,000

1,212,500,000(Note 2)January 9, 2004

Private Placement

1,350

4,450

506,250,000

1,718,750,000(Note 2)January 21, 2004

Private placement

1,333

5,783

499,875,000

2,218,625,000(Note 2)January 27, 2004

Private placement

267

6,050

100,125,000

2,318,750,000(Note 2)January 28, 2004

Private placement

800

6,850

300,000,000

2,618,750,000(Note 2)January 31, 2004

Private placement

266

7,116

99,750,000

2,718,500,000(Note 2)February 5, 2004

Private placement

800

7,916

300,000,000

3,018,500,000(Note 2)February 7, 2004

Private placement

1,333

9,249

499,875,000

3,518,375,000(Note 2)

May 17, 2004

Public offering

9,000

18,2493,377,250,000

6,895,625,000(Note 3)February 7, 2005

Public offering

10,65028,8993,937,667,100

10,833,292,100(Note 4)

July 31, 2006

Public offering

25,00053,8998,301,125,000

19,134,417,100(Note 5)February 1, 2010

Unit split

215,596

269,495-

19,134,417,100(Note 6)

February 1, 2010

Merger367,200

636,695-

19,134,417,100(Note 7)

711,597

1,348,292

6,999,979,689

26,134,396,789(Note 8)224,887

1,573,179

2,999,992,580

29,134,389,369(Note 9)July 29, 2011
December 20, 2013

Third-party
allotment
Third-party
allotment

July 16, 2014

Public offering

1,040,000

2,613,179

22,747,920,000

51,882,309,369(Note 10)

August 13, 2014

Third-party
allotment

55,5072,668,686

1,214,104,611

53,096,413,980(Note 11)

July 15, 2015

Public offering

500,000

3,168,686

27,970,500,000

81,066,913,980(Note 12)

August 12, 2015

Third-party
allotment

25,0003,193,686

1,398,525,000

82,465,438,980(Note 13)

March 30, 2016

Public offering

459,5123,653,198

36,123,157,344

118,588,596,324(Note 14)

April 27, 2016

Third-party
allotment

22,626

3,675,824

1,778,675,112

120,367,271,436(Note 15)

(Note 1)
(Note 2)

INV was incorporated through a private placement at a price of JPY 500,000 per unit.
New investment units were issued in a private placement at a price of JPY 375,000 per unit to raise funds for the acquisition of
new properties.

(Note 3)New investment units were issued in a public offering at a price of JPY 395,000 per unit (JPY 375,250 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.

(Note 4)

New investment units were issued in a public offering at a price of JPY 385,140 per unit (JPY 369,734 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.

(Note 5)New investment units were issued in a public offering at a price of JPY 348,740 per unit (JPY 332,045 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.

(Note 6)(Note 7)

An investment unit split of 5 units per 1 unit was conducted.
A merger by absorption pursuant to Article 147 of the Act on Investment Trusts and Investment Corporations was conducted with
LCP, with INV as the surviving entity. As a result of the merger by absorption, 4 investment units of INV (after the investment
unit split) were allotted for each LCP investment unit. The number of LCP investment units issued as of the time of the merger
by absorption was 91,800 units.

50

(Note 8)

New investment units were issued in a third party allotment at a price of JPY 9,837 per unit to make repayment of existing loan,etc.

(Note 9)New investment units were issued in a third party allotment at a price of JPY 13,340 per unit to make repayment of existing loan,etc.

(Note 10) New investment units were issued in a public offering at a price of JPY 22,688 per unit (JPY 21,873 after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.
(Note 11) New investment units were issued in a third party allotment at a price of JPY 21,873 per unit for the purpose of cash reserve toappropriate to repayment in future borrowings.
(Note 12) New investment units were issued in a public offering at a price of JPY 57,817 per unit (JPY 55,941 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 13) New investment units were issued in a third party allotment at a price of JPY 55,941 per unit for the purpose of allocation to cash
reserves to be used as part of the funds for future acquisition of properties.
(Note 14) New investment units were issued in a public offering at a price of JPY 81,217 per unit (JPY 78,612 after deducting theunderwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 15) New investment units were issued in a third party allotment at a price of JPY 78,612 per unit for the purpose of allocation to cash
reserves to be used as a part of the funds for future acquisition of properties.

4. Change in Directors
Changes in directors are disclosed in a timely manner upon the determination of such changes.

51

5. Reference Information(1)

Composition of INV’s Assets

Type of
Purpose

Geographic area

asset

(Note 1)

Fiscal period ended June 30, 2016(as of June 30, 2016)
Percentage of total
assets(%)

Amount held
(JPY million)(Note 2)

Greater Tokyo
area
Major regional
Residences
citiesSubtotal
Greater Tokyo
area
Offices/Commercial Major regional
Facilities
citiesSubtotalRealestateGreater Tokyo
area
Major regional
Parking lots, etc.
citiesSubtotal
Greater Tokyo
area
Major regional
HotelscitiesSubtotal
Total real estate
Greater Tokyo
area
Major regional
Residences
citiesSubtotal
Greater Tokyo
area
Offices/Commercial Major regional
Facilities
citiesReal
Subtotalestate inGreater Tokyo
trust
area
Major regional
Parking lots, etc.
citiesSubtotal
Greater Tokyo
area
Major
regional
HotelscitiesSubtotal

Fiscal period ended December 31, 2016(as of December 31, 2016)
Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

-

-

-

-

-

-

-

-

-

-

-

-

705

0.2

704

0.3

-

-

-

-

705

0.2

704

0.3

100

0.0

100

0.0

-

-

-

-

100

0.0

100

0.0

-

-

-

-

-

-

-

-

806

0.3

805

0.3

51,86018.3

51,61018.6

16,413

5.8

16,225

5.8

68,27424.0

67,835

24.5

7,023

2.5

7,002

2.5

5,828

2.1

5,782

2.1

12,852

4.5

12,785

4.6

-

-

-

-

-

-

-

-

-

-

-

-

102,44536.1

102,297

36.8

77,092

27.1

76,214

27.5

179,537

63.2

178,511

64.4

Total real estate in trust

260,664

91.7

259,133

93.4

Deposits and other assets

22,6348.0

17,423

6.3

Total assets (Note 3)

284,106(261,471)

100.0(92.0)

277,361100.0(259,938)(93.7)(Note 1)
(Note 2)
(Note 3)“Greater Tokyo area” refers to Tokyo, Kanagawa, Chiba and Saitama.
“Amount held” is from the balance sheet as of the end of the reporting period and is calculated by deducting accumulated depreciationfrom the acquisition price (including acquisition related costs).
The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate.

52

Total Liabilities
Total Net Assets
Total Liabilities
and Net Assets

Fiscal period ended June 30, 2016(as of June 30, 2016)
Percentage ofAmount (JPY million)
total assets (%)
154,101
54.2

Fiscal period ended December 31, 2016(as of December 31, 2016)
Percentage ofAmount (JPY million)
total assets (%)
145,906
52.6

130,00545.8

131,45547.4

284,106

100.0

277,361

100.0

53

(2)

Real Estate Properties
The following summarizes the real estate and real estate held in trust that INV held as of December 31, 2016.

aProperty
number(Note 1)Price and investment percentage

Name of property

A26

Nisshin Palacestage Daitabashi

A27

Nisshin Palacestage
Higashi-Nagasaki

A28

Growth Maison Gotanda

A29

Growth Maison Kameido

A30

Emerald House

A31

Harmonie Ochanomizu

A32

Suncrest Shakujii-Koen

A33

Growth Maison Shin-Yokohama

A34

Belle Face Ueno-Okachimachi

A35

Grand Rire Kameido

A36

Growth Maison Ikebukuro

A37

Growth Maison Yoga

A38

Route Tachikawa

A39

Shibuya-Honmachi Mansion

A40

City Heights Kinuta

A41

Acseeds Tower
Kawaguchi-Namiki

A42

Capital Heights Kagurazaka

A43

College Square Machida

A44

Belair Meguro

A45

Wacore Tsunashima I

A46

Foros Nakamurabashi

A47

Growth Maison Kaijin

BalanceAcquisition
Investment
sheet
Legal form price (JPY
percentage
carrying
million)of asset(%)
value (JPY
(Note 3)(Note 4)
million)Location(Note 2)Trust
beneficiaryinterests
Trust
5-4-1 Nagasaki, Toshima-ku, Tokyo beneficiaryinterests
Trust
2-26-6 Nishi-Gotanda,
beneficiary
Shinagawa-ku, Tokyo
interests
Trust
6-58-16 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
3-27-18 Itabashi, Itabashi-ku, Tokyo beneficiaryinterests
Trust
2-5-5 Yushima, Bunkyo-ku, Tokyo
beneficiaryinterests
Trust
3-15-35 Takanodai, Nerima-ku,
beneficiaryTokyo
interests
Trust
3-16-2 Shin-Yokohama, Kohoku-ku,
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
1-27-5 Higashi-Ueno, Taito-ku,
beneficiaryTokyo
interests
Trust
3-39-12 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
3-31-14 Nishi-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests
Trust
1-15-15 Okamoto, Setagaya-ku,
beneficiaryTokyo
interests
Trust
3-7-6 Nishikicho, Tachikawa-shi,
beneficiaryTokyo
interests
Trust
2-35-2 Honmachi, Shibuya-ku,
beneficiaryTokyo
interests
Trust
4-13-15 Kinuta, Setagaya-ku, Tokyo beneficiaryinterests
Trust
2-5-13 Namiki, Kawaguchi-shi,
beneficiary
Saitamainterests
Trust
71-1 Enokicho, Shinjuku-ku, Tokyo beneficiaryinterests
Trust
3-4-4 Nakamachi, Machida-shi,
beneficiaryTokyo
interests
Trust
1-2-15 Meguro, Meguro-ku, Tokyo
beneficiaryinterests
Trust
2-7-47 Tarumachi, Kohoku-ku,
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
1-6-6 Kouyama, Nerima-ku, Tokyo
beneficiaryinterests
Trust
5-29-51 Kaijin, Funabashi-shi, Chiba beneficiaryinterests
1-31-2 Izumi, Suginami-ku, Tokyo

54

Appraisal value as ofDecember 31, 2016
(JPY million)(Note 5)

1,251

1,123

0.5

1,150

(Note 6)

1,229

1,092

0.5

1,270

(Note 6)

888

827

0.3

994

(Note 6)

1,070

984

0.4

1,110

(Note 6)

1,505

1,374

0.6

1,380

(Note 6)

1,428

1,355

0.5

1,330

(Note 6)

1,088

1,090

0.4

1,070

(Note 6)

1,059

966

0.4

1,180

(Note 6)

1,023

956

0.4

1,040

(Note 6)

906

829

0.3

979

(Note 6)

825

752

0.3

882

(Note 6)

795

750

0.3

703

(Note 6)

676

641

0.3

641

(Note 6)

651

655

0.2

624

(Note 6)

646

650

0.2

492

(Note 6)

620

546

0.2

716

(Note 6)

604

621

0.2

567

(Note 6)

589

562

0.2

534

(Note 6)

589

561

0.2

601

(Note 6)

572

531

0.2

515

(Note 6)

566

524

0.2

566

(Note 6)

557

523

0.2

449

(Note 6)

Property
number(Note 1)

Acquisition

Name of property

Location(Note 2)

Legal form price (JPY
million)of asset(Note 3)

A48

College Square Machiya

A51

City House Tokyo Shinbashi

A52

Winbell Kagurazaka

A53

Nishiwaseda Cresent Mansion

A54

Lexington Square Akebonobashi

A56

Casa Eremitaggio

A59

Towa City Coop Shinotsuka II

A61Bichsel Musashiseki

A62

Lexel Mansion Ueno Matsugaya

A63

Towa City Coop Sengencho

A64

Royal Park Omachi

A65

Lexington Square Haginomachi

A66

Visconti Kakuozan

A71

Lexington Square Daitabashi

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo

A75

Spacia Ebisu

A76

Neo Prominence

A77

Invoice Shin-Kobe Residence

A78

Cosmo Court Motomachi

A79

Revest Honjin

A80

Revest Matsubara

A81

Sun Terrace Minami Ikebukuro

A82

Alba Noritake Shinmachi

A83

Revest Meieki Minami

Trustbeneficiaryinterests
Trust
6-19-1 Shinbashi, Minato-ku, Tokyo beneficiaryinterests
Trust
6-15 Shin-Ogawacho, Shinjuku-ku,
beneficiaryTokyo
interests
Trust
3-18-9 Nishi-Waseda, Shinjuku-ku,
beneficiaryTokyo
interests
Trust
3-8 Yochomachi, Shinjuku-ku, Tokyo beneficiaryinterests
Trust
1-14-15 Nakane, Meguro-ku, Tokyo beneficiaryinterests
Trust
5-49-7 Higashi-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests
Trust
1-22-7 Sekimachi-Kita, Nerima-ku,
beneficiaryTokyo
interests
Trust
3-10-2 Matsugaya, Taito-ku, Tokyo beneficiaryinterests
Trust
4-338-2 Sengencho, Nishi-ku,
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
2-11-10 Omachi, Aoba-ku,
beneficiary
Sendai-shi, Miyagi
interests
Trust
1-15-16 Haginomachi,
beneficiary
Miyagino-ku, Sendai-shi, Miyagi
interests
Trust
2-44 Otanacho, Chikusa-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
1-33-18 Izumi, Suginami-ku, Tokyo beneficiaryinterests
Trust
4-20-6 Higashikomagata,beneficiary
Sumida-ku, Tokyo
interests
Trust
2-5-15 Minami 6-Jo Nishi,
beneficiary
Chuo-ku, Sapporo-shi, Hokkaido
interests
Trust
3-6-22 Higashi, Shibuya-ku, Tokyo beneficiaryinterests
Trust
3-21-5 Shimo, Kita-ku, Tokyo
beneficiaryinterests
Trust
3-3-8 Ikutacho Chuo-ku, Kobe-shi,
beneficiary
Hyogointerests
Trust
3-12-20 Motomachidori Chuo-ku,
beneficiary
Kobe-shi, Hyogo
interests
Trust
2-13 Toriidori Nakamura-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
3-13-12 Matsubara Naka-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
2-22-6 Minami-Ikebukuro,
beneficiary
Toshima-ku, Tokyo
interests
Trust
3-6-8 Noritake Shinmachi, Nishi-ku,
beneficiary
Nagoya-shi, Aichi
interests
Trust
2-13-33 Meieki-Minami,
beneficiary
Nakamura-ku, Nagoya-shi, Aichi
interests
7-3-1 Arakawa, Arakawa-ku, Tokyo

55

Balance
Investment
sheet
percentage
carrying(%)
value (JPY
(Note 4)
million)Appraisal value as ofDecember 31, 2016
(JPY million)(Note 5)

510

460

0.2

536

(Note 6)

2,520

2,342

0.9

3,160

(Note 7)

3,260

3,063

1.2

3,850

(Note 8)

1,880

1,883

0.7

2,400

(Note 8)

1,450

1,338

0.5

1,780

(Note 9)

1,070

961

0.4

1,090

(Note 7)

866

824

0.3

1,070

(Note 7)

577

556

0.2

705

(Note 8)

970

864

0.4

1,180

(Note 9)

1,110

1,022

0.4

1,350

(Note 7)

415

398

0.2

556

(Note 7)

330

289

0.1

446

(Note 7)

255

232

0.1

266

(Note 9)

977

867

0.4

1,150

(Note 9)

511

446

0.2

594

(Note 9)

1,180

987

0.4

1,230

(Note 9)

7,010

6,550

2.6

7,900

(Note 7)

1,660

1,622

0.6

1,920

(Note 7)

1,260

1,194

0.5

1,420

(Note 7)

973

918

0.4

1,080

(Note 7)

674

635

0.3

790

(Note 7)

657

622

0.2

787

(Note 7)

625

600

0.2

724

(Note 7)

608

573

0.2

721

(Note 7)

597

564

0.2

728

(Note 7)

Property
number(Note 1)

Acquisition

Location(Note 2)Name of property

Legal form price (JPY
million)of asset(Note 3)

A84

Revest Heian

2-13-17 Heian, Kita-ku,
Nagoya-shi, Aichi

A85

Vendir Hamaotsu Ekimae

1-2-15 Hamaotsu, Otsu-shi, Shiga

A86

Salvo Sala

2-6-21 Shimanouchi Chuo-ku,
Osaka-shi,Osaka

A87

Excellente Kagurazaka

128-1 Yamabukicho Shinjuku-ku,
Tokyo, and other one parcel

A88

Luna Court Edobori

3-4-11 Edobori, Nishi-ku,
Osaka-shi, Osaka

A89

Winntage Kobe Motomachi

7-2-2 Motomachidori, Chuo-ku,
Kobe-shi, Hyogo

A90

Queen's Court Fukuzumi

1-3-10 Fukuzumi, Koto-ku, Tokyo

A91

Corp Higashinotoin

380-1 Kawaranomachi,
Higashinotoindori Nijo Kudaru,
Nakagyo-ku, Kyoto-shi, Kyoto, andother two parcels

A92

Belair Oimachi

5-14-17 Higashi-Oi, Shinagawa-ku,
Tokyo

A93

Siete Minami-Tsukaguchi

3-18 Minami-Tsukaguchimachi,
Amagasaki-shi, Hyogo

A94

Prime Life Sannomiya Isogami
Koen

4-3-23 Isogamidori, Chuo-ku,
Kobe-shi, Hyogo

A95

HERMITAGE NANBA WEST

4-10-3 Sakuragawa, Naniwa-ku,
Osaka-shi, Osaka

A96

Century Park Shinkawa 1-bankan

4-1-2 Shinkawacho, Minato-ku,
Nagoya-shi, Aichi

A97

West Avenue

1-5-17 Nishi, Kunitachi-shi, Tokyo

A98

Little River Honmachibashi

1-34 Honmachibashi, Chuo-ku,
Osaka-shi, Osaka

A99

Prime Life Mikage

2-25-11 Mikage Tsukamachi,
Higashinada-ku, Kobe-shi, Hyogo

A100 City Court Kitaichijo

1-6-3 Kita 1-jo Higashi, Chuo-ku,
Sapporo-shi, Hokkaido

A101 Lieto Court Mukojima

5-45-10 Mukojima, Sumida-ku,
Tokyo

A102 Lieto Court Nishi-Ojima

2-41-14 Ojima, Koto-ku, Tokyo

A103 Royal Parks Momozaka

5-38 Fudegasakicho, Tennouji-ku,
Osaka-shi, Osaka

A104 Royal Parks Shinden

3-35-20 Shinden, Adachi-ku, Tokyo

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Subtotal (68 properties)

Balance
Investment
sheet
percentage
carrying(%)
value (JPY
(Note 4)
million)Appraisal value as ofDecember 31, 2016
(JPY million)(Note 5)

595

561

0.2

678

(Note 7)

581

542

0.2

713

(Note 7)

544

515

0.2

625

(Note 7)

543

521

0.2

615

(Note 7)

525

496

0.2

570

(Note 7)

512

481

0.2

606

(Note 7)

456

439

0.2

584

(Note 7)

446

425

0.2

513

(Note 7)

412

398

0.2

491

(Note 7)

374

357

0.1

433

(Note 7)

373

354

0.1

434

(Note 7)

355

339

0.1

421

(Note 7)

335

323

0.1

424

(Note 7)

331

316

0.1

322

(Note 7)

310

298

0.1

391

(Note 7)

297

281

0.1

337

(Note 7)

1,782

1,835

0.7

1,920

(Note 7)

1,683

1,731

0.6

1,720

(Note 7)

1,634

1,673

0.6

1,710

(Note 7)

2,910

2,995

1.1

3,000

(Note 8)

5,024

5,203

1.9

5,110

(Note 8)

71,116

67,835

26.7

77,843

-

1,301

1,207

0.5

1,040

(Note 6)

B08

Kindai Kagakusha Building

2-7-15 Ichigaya-Tamachi,
Shinjuku-ku, Tokyo

Trust
beneficiaryinterests

B09

Shinjuku Island

6-5-1 Nishi-Shinjuku, Shinjuku-ku,
TokyoReal estate

715

704

0.3

541

(Note 8)5-2-4 Nishi-Gotanda,
Shinagawa-ku, Tokyo

Trust
beneficiaryinterests

4,880

4,684

1.8

4,100

(Note 7)

B14

Lexington Plaza Nishigotanda

56

Property
number(Note 1)

Acquisition

Location(Note 2)Name of property

Legal form price (JPY
million)of asset(Note 3)

B15

Cross Square NAKANO

5-24-18 Nakano, Nakano-ku, Tokyo

B16

Ohki Aoba Building

9-7 Futsukamachi, Aoba-ku,
Sendai-shi, Miyagi

B17

Lexington Plaza Hachiman

3-1-50 Hachiman, Aoba-ku,
Sendai-shi, Miyagi

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa-shi,
Fukushima

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Subtotal (7 properties)
C01

1-22-7, 1-22-15 Kanda sudacho,
Chiyoda-ku, Tokyo

Times Kanda-Sudacho 4thReal estate

Subtotal (1 property)
D01

Hotel MyStays Kanda

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

D02

Hotel MyStays Asakusa

1-21-11 Honjo, Sumida-ku, Tokyo

D03

Hotel MyStays Kyoto-Shijo

52, Kasabokocho, Higashiiru,
Aburanokoji, Shijyodori,Shimogyo-ku, Kyoto-shi, Kyoto

D04

MyStays Shin-Urayasu Conference
2-1-4 Akemi, Urayasu-shi, Chiba
CenterD05

Hotel MyStays Maihama

3-5-1 Tekkodori, Urayasu-shi,
Chiba

D06

Hotel Vista Premio Dojima

2-4-1 Sonezakishinchi, Kita-ku,
Osaka

D07

Hotel MyStays Nagoya-Sakae

2-23-22 Higashi-Sakura, Naka-ku,
Nagoya-shi, Aichi

D08

Hotel MyStays
Sakaisuji-Honmachi

1-4-8 Awaji-machi, Chuo-ku,
Osaka-shi, Osaka

D09

Hotel MyStays Yokohama

4-81 Sueyoshicho, Naka-ku,
Yokohama-shi, Kanagawa

D10

Hotel MyStays Nippori

5-43-7 Higashi-Nippori,
Arakawa-ku, Tokyo

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

3-14-20 Haruyoshi, Chuo-ku,
Fukuoka-shi, Fukuoka

D12

Flexstay Inn Iidabashi

3-26 Shin-Ogawamachi,
Shinjuku-ku, Tokyo

D13

Hotel MyStays Ueno Inaricho

1-5-7 Matsugaya, Taito-ku, Tokyo

D14

Flexstay Inn Shinagawa

1-22-19 Kita-Shinagawa,Shinagawa-ku, Tokyo

D15

Flexstay Inn Tokiwadai

1-52-5 Tokiwadai, Itabashi-ku,
Tokyo

D16

Flexstay Inn Sugamo

3-6-16 Sugamo, Toshima-ku, Tokyo

D17

Hotel MyStays Otemae

1-3-2 Tokuicho, Chuo-ku,
Osaka-shi, Osaka

D18

Flexstay Inn Kiyosumi Shirakawa 1-12-16 Tokiwa, Koto-ku, Tokyo

D19

Flexstay Inn Nakanobu P1

4-27-12 Futaba, Shinagawa-ku,
Tokyo

57

Trust
beneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests
Trustbeneficiaryinterests

Balance
Investment
sheet
percentage
carrying(%)
value (JPY
(Note 4)
million)Appraisal value as ofDecember 31, 2016
(JPY million)(Note 5)

1,060

1,111

0.4

1,050

(Note 7)

816

733

0.3

675

(Note 9)

3,280

3,105

1.2

3,550

(Note 8)

2,320

1,943

0.9

2,340

(Note 8)14,372

13,490

5.4

13,296

-

97

100

0.0

113

(Note 6)

97

100

0.0

113

-

2,851

3,066

1.1

5,260

(Note 7)

2,584

2,561

1.0

5,530

(Note 7)

6,024

5,818

2.3

15,600(Note 7)

4,930

4,760

1.8

7,140

(Note 7)

4,870

4,722

1.8

6,690

(Note 7)

3,845

3,706

1.4

7,370

(Note 7)

2,958

2,792

1.1

5,850

(Note 7)

2,514

2,441

0.9

8,580

(Note 7)

2,119

2,039

0.8

3,500

(Note 7)

1,898

1,838

0.7

3,630

(Note 7)

1,570

1,526

0.6

4,390

(Note 7)

1,381

1,366

0.5

2,180

(Note 7)

1,331

1,280

0.5

2,580

(Note 7)

1,242

1,221

0.5

2,130

(Note 7)

1,242

1,230

0.5

2,300

(Note 7)

1,192

1,157

0.4

2,170

(Note 7)

1,192

1,169

0.4

4,720

(Note 7)

749

737

0.3

1,320

(Note 7)

589

578

0.2

837

(Note 7)

Property
number(Note 1)

D20
D21
D22
D23
D24
D25
D26
D27
D28
D29
D30
D31
D32
D33
D34
D35
D36
D37
D38
D39
D40
D41
D42
D43
D44

Acquisition

Name of property

Location(Note 2)

Legal form price (JPY
million)of asset(Note 3)Trust
beneficiaryinterests
Trust
3-37-2 Sumiyoshicho, Naka-ku,
APA Hotel Yokohama-Kannai
beneficiary
Yokohama-shi, Kanagawa
interests
Trust
26-17 Honcho, Hakodate-shi,
Hotel Nets Hakodate
beneficiary
Hokkaido
interests
Trust
5-10-15 Shirokane, Minato-ku,
Flexstay Inn Shirogane
beneficiaryTokyo
interests
Trust
Hotel MyStays Haneda
5-1-13 Haneda, Ota-ku, Tokyo
beneficiaryinterests
Trust
Hotel MyStays Kameido P1
6-32-1 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
5-5-13 Higashi-Ueno, Taito-ku,
Hotel MyStays Ueno Iriyaguchi
beneficiaryTokyo
interests
Trust
Hotel MyStays Kameido P2
6-7-8 Kameido, Koto-ku, Tokyo
beneficiaryinterests
Trust
1-23 Masagocho, Shimizu-ku,
Hotel Vista Shimizu
beneficiary
Shizuoka-shi, Shizuoka
interests
Trust
Super Hotel Shinbashi/
5-16-4 Shinbashi, Minato-ku, Tokyo beneficiaryKarasumoriguchiinterests
Trust
Flexstay Inn Higashi-Jujo
2-10-2 Nakajujo, Kita-ku, Tokyo
beneficiaryinterests
Trust
2-4-1 Higashi-Shukugo,
Hotel MyStays Utsunomiya
beneficiary
Utsunomiya-shi, Tochigi
interests
Trust
1-13-2 Kaizuka, Kawasaki-ku,
Flexstay Inn Kawasaki-Kaizuka
beneficiary
Kawasaki-shi, Kanagawa
interests
Trust
1-3-2 Takara-machi, Toyama-shi,
Comfort Hotel Toyama
beneficiary
Toyamainterests
Trust
15-9 Ogawacho, Kawasaki-ku,
Flexstay Inn Kawasaki-Ogawacho
beneficiary
Kawasaki-shi, Kanagawa
interests
Trust
Flexstay Inn Ekoda
8-6 Sakaecho, Nerima-ku, Tokyo
beneficiaryinterests
Trust
Super Hotel Tokyo-JR Tachikawa 2-21-9 Akebonocho, Tachikawa-shi,
beneficiary
KitaguchiTokyointerests
Trust
Super Hotel JR Ueno-iriyaguchi
7-9-14 Ueno, Taito-ku, Tokyo
beneficiaryinterests
Trust
1-9-30 Nishi-Shinsaibashi,
Hotel MyStays Shinsaibashi
beneficiary
Chuo-ku, Osaka-shi, Osakainterests
Trust
3-13-13 Kurosaki, Yahatanishi-ku,
Comfort Hotel Kurosaki
beneficiary
Kitakyusyu-shi, Fukuoka
interests
Trust
2-18-14 Omotecho, Maebashi-shi,
Comfort Hotel Maebashi
beneficiary
Gunmainterests
Trust
Comfort Hotel Tsubame-Sanjo
2-115 Sugoro, Sanjo-shi, Niigata
beneficiaryinterests
Trust
3-4 Ohdori-Nishi, Kitami-shi,
Comfort Hotel Kitami
beneficiary
Hokkaido
interests
Trust
2-6-8 Nishi-Gotanda,
Hotel MyStays Gotanda Station
beneficiary
Shinagawa-ku, Tokyo
interests
1-10 Kaidoue (and 59 other land
Trust
Hotel Epinard Nasu
parcels), Oaza-Takakuhei,
beneficiaryNasu-machi, Nasu-gun, Tochigi
interests
Flexstay Inn Nakanobu P2

4-27-8 Futaba, Shinagawa-ku,
Tokyo

58

Balance
Investment
sheet
percentage
carrying(%)
value (JPY
(Note 4)
million)Appraisal value as ofDecember 31, 2016
(JPY million)(Note 5)

283

284

0.1

403

(Note 7)

8,350

8,117

3.1

9,660

(Note 7)

2,792

2,707

1.0

3,580

(Note 7)

2,119

2,108

0.8

2,310

(Note 7)

7,801

7,641

2.9

8,490

(Note 7)

5,594

5,514

2.1

7,150

(Note 7)

3,821

3,770

1.4

4,520

(Note 7)

3,742

3,681

1.4

4,840

(Note 7)

2,198

2,144

0.8

2,400

(Note 7)

1,624

1,618

0.6

1,800

(Note 7)

1,277

1,271

0.5

1,430

(Note 7)

1,237

1,238

0.5

1,280

(Note 7)

980

962

0.4

1,180

(Note 7)

979

963

0.4

1,090

(Note 7)

906

896

0.3

1,060

(Note 7)

5,069

5,001

1.9

5,040

(Note 7)

1,170

1,156

0.4

1,230

(Note 10)

1,130

1,121

0.4

1,220

(Note 10)

3,160

3,137

1.2

3,410

(Note 7 )

1,148

1,134

0.4

1,200

(Note 10)

1,128

1,136

0.4

1,160

(Note 10)

1,010

1,006

0.4

1,060

(Note 10)

851

843

0.3

890

(Note 10)

24,67424,652

9.3

24,800(Note 8)20,981

20,6207.9

21,600(Note 8)

Acquisition

Property
number(Note 1)

D45
D46
D47
D48

Location(Note 2)Name of property

Legal form price (JPY
million)of asset(Note 3)Trust
3-5-7 Tenjin, Chuo-ku, Fukuoka-shi,
beneficiary
Fukuokainterests
Trust
1-18-14 Hamamatsucho, Minato-ku,
Hotel MyStays Hamamatsucho
beneficiaryTokyo
interests
Trust
Hotel MyStays Premier Kanazawa 2-13-1 Hirooka, Kanazawa-shi,
beneficiary(Note 11)
Ishikawa
interests
Trust
9-9 Hyogomachi, Takamatsu-shi,
Takamatsu Tokyu REI Hotelbeneficiary
Kagawainterests

Balance
Investment
sheet
percentage
carrying(%)
value (JPY
(Note 4)
million)Appraisal value as ofDecember 31, 2016
(JPY million)(Note 5)

8,059

8,022

3.0

8,280

(Note 8)

7,959

7,935

3.0

8,010

(Note 8)13,761

13,667

5.2

13,900(Note 8)

2,139

2,135

0.8

2,170

(Note 10)

Subtotal (48 properties)

181,032

178,51167.9

236,940-

Total (124 properties)

266,619

259,938100.0

328,192-

Hotel MyStays Fukuoka Tenjin(Note 1)

“Property number” indicates the use categorization of properties acquired by INV, with “A” standing for residence, “B” standing for officeand 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 that for acquisitions made at the same timea 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 forsuch 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.
consumption tax and other taxes, 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 been rounded to thefirst decimal place.

(Note 5)

“Appraisal value as of December 31, 2016” 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.
The real estate appraisers are as follows.

Such price excludes

Real estate appraiser(Note 6)

Assets Research and Development Inc.

(Note 7)

Japan Real Estate Institute(Note 8)Morii Appraisal & Investment Consulting Inc.

(Note 9)The Tanizawa Sogo Appraisal Co., Ltd.

(Note 10)

Daiwa Real Estate Appraisal Co., Ltd.

(Note 11) The property name was changed from Hotel MyStays Kanazawa on October 1, 2016. The same shall apply hereinafter in this document.

59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 end of the
fiscal period for the real estate assets is as follows.
Estimated Cost (JPY thousand)Name of Property

Location

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Cross Square
NAKANO

Nakano-ku,
Tokyo

A52 Winbell Kagurazaka

Shinjuku-ku,
Tokyo

B15

PurposeRenovation work

Scheduled Time of
Implementation

From January 2017
To June 2017

Parking lots
From January 2017
equipment repair
To June 2017
work
Repair work ofdeteriorated rooftop
From January 2017
waterproof/Partial
To June 2017
repair and paint workof outer wall

Total

Payment for
the Fiscal
Advance
Period ended
Payments
December31, 2016

450,000--

17,000--15,330--(b) Capital expenditures for the fiscal period ended December 31, 2016
The principal construction work constituting capital expenditures for the real estate assets for the fiscal period ended
December 31, 2016 is as follows. Capital expenditures for the fiscal period totaled JPY 532,163 thousand, andtogether with JPY 24,069 thousand in repair costs included in this fiscal period’s expenses, construction work
totaling JPY 556,232 thousand was implemented.
Payment(JPY thousand)Location

Hotel MyStays
Kanda

Chiyoda-ku,
TokyoRenovation work

From July 2016
To December 2016

154,601

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Hotel interior renovation work

From July 2016
To December 2016

14,325

B17

Lexington Plaza
HachimanSendai-shi,
MiyagiRooftop parking lot repair work

From July 2016
To December 2016

10,564

D06

Hotel Vista Premio
DojimaOsaka-shi,
Osaka

Repair work of multistory car
parking equipment

From July 2016
To December 2016

8,410

D06

Hotel Vista Premio
DojimaOsaka-shi,
Osaka

Replacement work of thyristor
based battery chargers

From July 2016
To December 2016

7,500

D01

PurposeTime ofimplementation

Name of property

360,831

Other construction
Total

556,23260

(c) Reserved funds for long-term maintenance plan (repair reserves)
INV has reserved funds from the cash flow of the fiscal period, as shown below, towards large-scale maintenancerepairs in the medium- to long-term in accordance with the long-term maintenance plan for each property.

Fiscal period

Reserved funds at beginningof period
Amount reserved(Note)
Amount reversed(Note)
Amount carried over for
next fiscal period(Note)(Unit: JPY thousand)23rd fiscal
24th fiscal
25th fiscal
26th fiscal
27th fiscal
periodperiodperiodperiodperiodFrom July 1, 2014 From January 1, From July 1, 2015 From January 1, From July 1, 2016
to December 31, 2015 to June 30, to December 31, 2016 to June 30, to December 31,
2016
2016
2015
2015
2014
579,682

738,365

852,699

982,750

1,303,685

268,495

283,147

352,490543,275

446,066

109,812

168,813

222,439

222,339

352,464

738,365

852,699

982,750

1,303,685

1,397,286

The amount reserved for the relevant fiscal period includes the reserves for acquired properties, and the amount reversed includes
the reserves for disposed properties.

61

c

Condition of income, etc. (From July 1, 2016 to December 31, 2016)(Unit: JPY thousand)

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

Total ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Other
incomeInsurance
expenses

Depreciation
expenses
(iii)

Other
expensesProfit andLoss((i)-(ii))NOI((i)-(ii)+(iii))

A26

Nisshin Palacestage Daitabashi

39,49436,6582,835

17,422

4,889

1,615

56

8,891

1,969

22,07130,963

A27

Nisshin Palacestage
Higashi-Nagasaki

43,85739,804

4,052

25,912

6,561

2,688

86

13,064

3,510

17,94531,009A28

Growth Maison Gotanda

27,345

26,772

573

8,279

2,049

1,326

34

4,369

500

19,06523,435A29

Growth Maison Kameido

33,416

31,406

2,009

14,498

4,592

1,684

48

5,933

2,238

18,91824,851

A30

Emerald House

43,28840,6882,600

17,537

4,790

2,556

91

9,410

688

25,75135,161

A31

Harmonie Ochanomizu

41,70339,125

2,578

13,933

3,347

1,883

50

7,270

1,381

27,76935,039A32

Suncrest Shakujii-Koen

34,58630,483

4,103

21,125

7,119

3,124

83

8,618

2,179

13,461

22,080A33

Growth Maison Shin-Yokohama

34,347

31,6282,718

16,755

4,617

2,415

62

6,186

3,473

17,591

23,778

A34

Belle Face Ueno-Okachimachi

30,47130,132338

12,883

5,134

1,661

44

5,355

687

17,58822,943

A35

Grand Rire Kameido

26,61926,619

7,948

169

1,722

50

5,506

500

18,67024,177-A36

Growth Maison Ikebukuro

26,73325,404

1,328

10,126

2,912

1,047

33

5,312

819

16,606

21,919A37

Growth Maison Yoga

22,092

21,164

928

9,615

2,798

1,369

33

4,125

1,288

12,477

16,603

A38

Route Tachikawa

20,282

18,551

1,730

8,978

2,263

1,070

36

4,282

1,325

11,303

15,585

A39

Shibuya-Honmachi Mansion

19,621

18,655

966

6,690

2,290

938

29

2,265

1,166

12,931

15,196

A40

City Heights Kinuta

16,15815,382

776

7,601

3,281

982

27

1,829

1,480

8,557

10,386

A41

Acseeds Tower Kawaguchi-Namiki

24,55623,083

1,473

11,183

3,365

1,125

36

5,038

1,616

13,373

18,411

A42

Capital Heights Kagurazaka

18,565

17,824

741

7,233

2,266

1,088

32

2,529

1,316

11,331

13,861

A43

College Square Machida

17,484

17,484

3,983

33

1,520

31

1,898

500

13,50015,398

A44

Belair Meguro16,25915,266

993

5,928

1,746

877

22

2,328

954

10,331

12,659A45

Wacore Tsunashima I

18,69017,652

1,038

8,631

2,808

887

30

3,986

919

10,05914,045

A46

Foros Nakamurabashi

17,597

16,279

1,318

9,265

2,507

990

28

4,896

842

8,331

13,228A47

Growth Maison Kaijin

22,14520,284

1,861

14,841

4,584

2,116

70

6,856

1,213

7,304

14,161

A48

College Square Machiya

14,706

14,706

5,084

76

933

23

3,551

500

9,621

13,172

A51

City House Tokyo Shinbashi

92,28586,557

5,728

37,52814,182

4,952

105

13,264

5,023

54,75668,021

A52

Winbell Kagurazaka

101,878

95,642

6,236

40,41811,3086,361

190

16,3186,238

61,45977,778

A53

Nishiwaseda Cresent Mansion

73,72469,704

4,019

20,799

6,409

3,610

133

8,568

2,076

52,92561,493

A54

Lexington Square Akebonobashi

49,40547,502

1,902

20,390

6,425

2,214

53

8,745

2,951

29,01437,760A56

Casa Eremitaggio

34,59429,8884,706

14,790

3,206

1,665

41

9,169

707

19,80428,973

A59

Towa City Coop Shinotsuka II

35,15033,884

1,266

13,849

4,733

1,404

48

5,290

2,373

21,301

26,591

A61

Bichsel Musashiseki

22,91822,255

663

9,439

4,061

1,193

42

2,823

1,318

13,47816,302

A62

Lexel Mansion Ueno Matsugaya

34,74032,1382,602

14,060

2,689

1,872

52

8,451

993

20,68029,132

A63

Towa City Coop Sengencho

56,38650,951

5,435

29,024

14,377

3,003

95

7,547

4,000

27,362

34,909

A64

Royal Park Omachi

25,432

21,923

3,509

15,915

6,910

2,371

54

4,762

1,816

9,517

14,279

A65

Lexington Square Haginomachi

17,59015,990

1,600

8,289

2,177

1,718

34

3,550

808

9,300

12,851

A66

Visconti Kakuozan

11,857

10,650

1,206

6,153

2,720

902

20

1,767

742

5,704

7,472

A71

Lexington Square Daitabashi

32,25430,676

1,577

14,899

3,391

1,544

38

8,039

1,885

17,35425,393

A72

Lexington Square Honjo Azumabashi

19,035

17,875

1,159

8,797

1,701

810

27

5,034

1,223

10,237

15,271A73

AMS TOWER Minami 6-Jo

45,68643,0382,648

31,738

6,397

6,433

109

14,123

4,673

13,94828,071

A75

Spacia Ebisu

205,456

184,250

21,20673,052

12,9358,809

214

37,64913,443

132,403

170,053

A76

Neo Prominence

64,271

54,893

9,377

29,083

12,6763,554

140

10,3882,324

35,18745,576

A77

Invoice Shin-Kobe Residence

46,782

42,581

4,201

21,028

4,662

2,714

81

11,4902,079

25,75337,244

A78

Cosmo Court Motomachi

35,52834,825703

17,065

3,766

2,305

82

9,984

925

18,46328,447

A79

Revest Honjin

31,69929,8101,888

13,274

3,107

1,803

59

7,441

862

18,42425,866--

A80

Revest Matsubara

28,164

26,185

1,978

14,820

4,228

1,870

55

7,045

1,622

13,343

20,388

A81

Sun Terrace Minami Ikebukuro

23,83021,4292,401

10,275

2,903

907

33

5,212

1,218

13,55518,768

A82

Alba Noritake Shinmachi

25,91724,314

1,603

13,693

3,529

1,736

56

6,934

1,436

12,224

19,158

A83

Revest Meieki Minami

25,95624,4901,465

12,620

2,981

1,664

56

6,968

949

13,336

20,304

A84

Revest Heian

23,02322,323700

11,045

2,474

1,400

41

6,410

718

11,97818,388A85

Vendir Hamaotsu Ekimae

32,64030,3752,265

16,093

5,589

1,961

76

7,013

1,452

16,54723,560A86

Salvo Sala

24,65723,869788

10,495

2,628

1,556

47

5,444

818

14,162

19,607

A87

Excellente Kagurazaka

18,252

17,802

449

7,776

2,110

771

29

4,194

670

10,475

14,670

A88

Luna Court Edobori

21,451

20,541909

10,763

3,194

1,185

40

5,073

1,269

10,687

15,761

A89

Winntage Kobe Motomachi

19,673

19,380293

11,294

2,549

1,587

49

5,824

1,283

8,379

14,203

A90

Queen's Court Fukuzumi

16,843

16,119

724

6,792

1,616

750

28

3,205

1,191

10,051

13,256

A91

Corp Higashinotoin

17,203

16,567

635

8,630

2,332

921

36

3,799

1,541

8,572

12,37262

Property
No.

Property Name

Total ofrentalrevenue(i)Rent,commonarea fees

Other
incomeTotal ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Depreciation

Insurance
expenses

expenses
(iii)

Other
expensesProfit andLoss((i)-(ii))NOI((i)-(ii)+(iii))

A92

Belair Oimachi

14,448

13,572

875

7,005

2,080

672

22

2,675

1,554

7,442

10,117

A93

Siete Minami-Tsukaguchi

16,605

15,788

816

7,739

2,594

982

35

3,240

886

8,865

12,105

A94

Prime Life Sannomiya Isogami Koen

13,76913,359

409

6,354

1,446

848

25

3,426

607

7,414

10,840A95

HERMITAGE NANBA WEST

15,516

14,070

1,445

8,066

2,386

1,009

30

3,446

1,193

7,449

10,896

A96

Century Park Shinkawa 1-bankan

17,40914,432

2,976

8,580

2,229

872

41

4,017

1,418

8,828

12,846

A97

West Avenue

12,254

11,730

524

7,395

2,037

563

22

3,070

1,700

4,859

7,930

A98

Little River Honmachibashi

13,795

13,771

24

5,962

1,609

952

28

2,874

496

7,832

10,707

A99

Prime Life Mikage

11,566

11,461

105

6,009

1,482

762

23

2,960

781

5,556

8,516

A100

City Court Kitaichijo

65,46760,162

5,304

39,782

7,234

7,741

164

22,587

2,054

25,684

48,272

A101

Lieto Court Mukojima

53,66551,3702,295

26,953

7,048

2,511

88

15,2932,010

26,71242,006

A102

Lieto Court Nishi-Ojima

48,10547,324780

21,176

4,921

2,177

69

12,272

1,734

26,92939,201

A103

Royal Parks Momozaka

139,988

129,478

10,51085,66439,877-248

45,130407

54,32499,454

A104

Royal Parks Shinden

215,643

200,266

15,377105,097

33,898-493

70,295410

110,546

180,842

B08

Kindai Kagakusha Building

38,162

34,265

3,897

22,362

6,224

67

10,750797

15,79926,549

B09

Shinjuku Island

B14

Lexington Plaza Nishigotanda

140,640

124,083

16,556

67,094

24,46012,324

177

26,543

3,589

73,545100,088

B15

Cross Square NAKANO

44,62337,438

7,184

17,191

6,416

3,867

76

4,647

2,183

27,431

32,079B16

Ohki Aoba Building

34,522

27,245

7,277

23,484

9,223

6,076

94

7,356

732

11,03818,395

B17

Lexington Plaza Hachiman

163,789

131,105

32,684

84,48845,11016,953

183

21,276964

79,301

100,577

B18

AEON TOWN Sukagawa

142,027

142,027-

93,864

56,1247,436

250

29,438614

48,16377,601

C01

Times Kanda-Sudacho 4th

2,700

2,700

-

257

-

256

D01

Hotel MyStays Kanda

95,222

95,222-

28,088

-

4,417

D02

Hotel MyStays Asakusa

115,200

115,200-

20,677-

D03

Hotel MyStays Kyoto-Shijo

367,441

367,441-

59,770-D04

MyStays Shin-Urayasu ConferenceCenter212,187

212,187-

50,220-D05

Hotel MyStays Maihama

183,694

183,694-

39,180-

D06

Hotel Vista Premio Dojima

215,896

215,224

D07

Hotel MyStays Nagoya-Sakae

197,906

197,906

D08

Hotel MyStays Sakaisuji-Honmachi

201,529

201,529-

26,676

-

6,399

D09

Hotel MyStays Yokohama

118,878

118,878-

30,597

-

4,476

D10

Hotel MyStays Nippori

65,61565,615-

17,313

-

1,764

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

137,361

137,361-

19,548-

D12

Flexstay Inn Iidabashi

52,02952,029-14,903

D13

Hotel MyStays Ueno Inaricho

51,81851,818-14,719

D14

Flexstay Inn Shinagawa

50,60050,600

-

8,794

D15

Flexstay Inn Tokiwadai

60,36860,368-

11,378

D16

Flexstay Inn Sugamo

54,85254,852-

14,384-

D17

Hotel MyStays Otemae

144,286

144,286-

13,852

D18

Flexstay Inn Kiyosumi Shirakawa

39,66939,669-11,549D19

Flexstay Inn Nakanobu P1

21,65321,653

-

5,417

-

4,523
Not disclosed (Note1)

672
-

-

1

-

2,442

2,444

67,13390,21676

23,082

511

3,888

98

16,174516

94,522

110,696

10,432274

48,547515

307,670

356,218

8,161

174

41,376509

161,966

203,342

3,195

88

35,386

510

144,513

179,899

60,485

8,208

11,716240

39,807512

155,410

195,218

68,586

17,1634,602

209

46,104507

129,319

175,424

113

19,655507

174,853

194,509172

25,434513

88,281

113,71557

14,986505

48,301

63,287

5,076

90

13,876505

117,812

131,688

-

4,504

78

9,813

507

37,12546,939

-

1,474

40

12,696507

37,09949,795

-

1,663

33

6,591

506

41,80548,397

-

3,414

71

7,387

505

48,98956,377

2,871

58

10,949505

40,46751,416

-

3,616

103

9,626

506

130,434

140,060

-

3,394

68

7,581

505

28,12035,701

954

21

3,935

505

16,235

20,171

D20

Flexstay Inn Nakanobu P2

11,371

11,371

-

2,758

-

528

12

1,710

506

8,613

10,323D21

APA Hotel Yokohama-Kannai

234,973

234,973-

88,657-

11,856

260

76,035505

146,316

222,351

D22

Hotel Nets Hakodate

160,872

160,872-

47,624-

15,493164

31,457508

113,248

144,706

D23

Flexstay Inn Shirogane

54,44454,444

-

9,813

-

1,918

48

7,340

506

44,631

51,971

D24

Hotel MyStays Haneda

178,271

178,267

67,937

-

8,162

194

59,171

410

110,334

169,505

D25

Hotel MyStays Kameido P1

186,026

186,026-

40,435

-

6,390

162

33,476406

145,590

179,067

D26

Hotel MyStays Ueno Iriyaguchi

98,762

98,762-

24,595

1,248

80

20,403407

74,167

94,571

D27

Hotel MyStays Kameido P2

130,259

130,259-

30,2013,842

101

25,852404

100,058

125,910

D28

Hotel Vista Shimizu

83,31983,319-24,773

480

2,055

87

21,747404

58,54580,293

D29

Super Hotel
Shinbashi/ Karasumoriguchi

39,42639,426

-

8,978

706

3,109

36

4,717

407

30,44835,166

4

2,455
-

D30

Flexstay Inn Higashi-Jujo

40,12640,126

-

7,915

-

1,945

46

5,517

405

32,21037,727

D31

Hotel MyStays Utsunomiya

64,74264,742-

31,473-

13,720306

17,031414

33,26850,300

D32

Flexstay Inn Kawasaki-Kaizuka

32,53532,535-

11,807

817

36

9,655

408

20,72830,383

D33

Comfort Hotel Toyama

35,92835,928-13,053

-

3,789

76

8,778

409

22,87431,653

D34

Flexstay Inn Kawasaki-Ogawacho

28,421

28,421

-

7,138

-

961

25

5,746

405

21,282

27,028

D35

Flexstay Inn Ekoda

110,022

110,022-

37,257

-

4,694

104

32,051407

72,764

104,81663

889

Property
No.

D36

Property Name

Super Hotel Tokyo-JR Tachikawa
Kitaguchi

Total ofrentalrevenue(i)Rent,commonarea fees

31,787

31,787

Total ofrentalFacility
relatedTaxes andexpenses management public dues
fee
(ii)

Other
income-13,174

1,391
1,070

D37

Super Hotel JR Ueno-iriyaguchi

27,27527,275-

10,002

D38

Hotel MyStays Shinsaibashi

90,81990,819-19,313

D39

Comfort Hotel Kurosaki

37,89437,894-

14,930

D40

Comfort Hotel Maebashi

43,811

43,811-

D41

Comfort Hotel Tsubame-Sanjo

34,94932,861

D42

Comfort Hotel Kitami

30,30030,300D43

Hotel MyStays Gotanda Station

D44

Hotel Epinard Nasu

D45
D46

2,842

Depreciation
expenses
(iii)

Other
expensesProfit andLoss((i)-(ii))NOI((i)-(ii)+(iii))

50

8,482

408

18,612

27,094
23,619

34

6,346

408

17,273-53

18,852406

71,50690,359900-

68

13,552409

22,96336,516

24,735

5,969

-

95

18,257413

19,07537,333

11,444436-

82

10,512413

23,50534,017-

12,871

911-

67

11,481411

17,42828,91038,935

1,987

-

350

36,191

407

357,676

393,868-

325,022

9,335

-

1,061

314,045579

715,768

1,029,814
189,879

2,088-

396,612395,634

1,040,790

1,040,790

Hotel MyStays Fukuoka Tenjin

190,416

190,416-

42,326--

131

41,790405

148,089

Hotel MyStays Hamamatsucho

115,208

115,208-

27,938--68

27,464404

87,270114,734

D47

Hotel MyStays Premier Kanazawa

343,391

343,391-

112,221--313

111,504

403

231,170

342,674

D48

Takamatsu Tokyu REI Hotel

106,269

76,20030,06945,14929,429Total

9,511,466

9,237,784

273,682

3,162,067

580,896(Note 1)

978

2,142

Insurance
expenses

Not disclosed because the consent of the tenant was not obtained.

64356,372

161

15,139418

61,11976,25911,8072,065,066

147,924

6,349,399

8,414,465

(3)Tenant SummaryaSummary of lease conditions by property（As of December 31, 2016)
Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Property
No.

Property nameLeasable area2(m )(Note 1)

A26

Nisshin Palacestage Daitabashi

1,771.13

1,736.40

98

96

1

A27

Nisshin Palacestage HigashiNagasaki

2,681.94

2,589.19

60

58

1

A28

Growth Maison Gotanda

1,051.50

1,051.50

48

48

1

A29

Growth Maison Kameido

1,367.96

1,264.60

66

61

1

A30

Emerald House

2,152.31

2,084.79

96

93

1

A31

Harmonie Ochanomizu

1,748.24

1,748.24

65

65

1

A32

Suncrest Shakujii-Koen

3,029.16

2,847.19

29

27

1

A33

Growth Maison Shin-Yokohama

1,858.44

1,750.10

68

64

1

A34

Belle Face Ueno-Okachimachi

1,351.11

1,285.61

64

61

1

A35

Grand Rire Kameido

1,562.26

1,562.26

72

72

1

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

Best Property Corporation

39,494

0.4

Pass throughmaster lease

Best Property Corporation

43,857

0.5

Pass throughmaster lease

27,345

0.3

Pass throughmaster lease

Mitsui Home Estate Co., Ltd.

33,416

0.4

Pass throughmaster lease

Tokyo Gakusei-life Co., Ltd.

43,288

0.5

Pass throughmaster lease

41,703

0.4

Pass throughmaster lease

34,586

0.4

Pass throughmaster lease

34,347

0.4

Pass throughmaster lease

Mainichicomnet Co., Ltd.

30,471

0.3

J.S.B. Co., Ltd.

26,619Tenants (Note 6)

Pacific Development &Management Co., Ltd

Pacific Development &Management Co., Ltd.
Mitsui Home Estate Co., Ltd.
Pacific Development &Management Co., Ltd

Pacific Development &Type oflease(Note 8)Pass throughmaster lease
Guaranteed
0.3
rent

26,733

0.3

Pass throughmaster lease

22,092

0.2

Pass throughmaster lease

20,282

0.2

Pass throughmaster lease

19,621

0.2

Pass throughmaster lease

Mitsui Home Estate Co., Ltd.

16,1580.2

Pass throughmaster lease1

Access Group, Inc. (Note 9)24,556

0.3

Pass throughmaster lease25

1

Mitsui Home Estate Co., Ltd.

18,565

0.2

Pass throughmaster lease

62

62

1

Mainichicomnet Co., Ltd.

17,484

0.2

Guaranteed
rent

513.0325

23

1

16,2590.2

Pass throughmaster lease

907.46816.185045

118,690

0.2

Pass throughmaster lease

Foros Nakamurabashi

815.77744.2537

34

1

Mitsui Home Estate Co., Ltd.

17,597

0.2

Pass throughmaster lease

A47

Growth Maison Kaijin

2,040.27

1,988.04

34

33

1

Mitsui Home Estate Co., Ltd.

22,145

0.2

Pass throughmaster lease

A48

College Square Machiya

871.35871.354343

1

Mainichicomnet Co., Ltd.

14,706

0.2

Guaranteed
rent

A51

City House Tokyo Shinbashi

3,364.00

3,138.67

86

80

1

Mitsui Home Estate Co., Ltd.

92,285

1.0

Pass throughmaster lease

A52

Winbell Kagurazaka

4,032.70

3,851.50

118

112

1

Mitsui Home Estate Co., Ltd.

101,878

1.1

Pass throughmaster lease

A53

Nishiwaseda Cresent Mansion

4,310.77

4,128.52

69

66

1

73,724

0.8

Pass throughmaster lease

A54

Lexington Square Akebonobashi

1,987.88

1,921.90

88

85

1

49,405

0.5

Pass throughmaster lease

A56

Casa Eremitaggio

1,197.19

1,158.26

17

16

1

34,594

0.4

Pass throughmaster lease

A59

Towa City Coop Shinotsuka II

1,627.13

1,567.61

58

55

1

Mitsui Home Estate Co., Ltd.

35,150

0.4

Pass throughmaster lease

A61

Bichsel Musashiseki

1,220.24

1,116.36

70

64

1

Mitsui Home Estate Co., Ltd.

22,9180.2

Pass throughmaster lease

A62

Lexel Mansion Ueno Matsugaya

1,969.45

1,898.80

29

28

1

34,740

0.4

Pass throughmaster lease

A63

Towa City Coop Sengencho

3,426.36

3,071.83

154

138

1

56,386

0.6

Pass throughmaster lease

A64

Royal Park Omachi

1,929.59

1,791.35

51

47

1

Goodworks Co., Ltd.

25,432

0.3

Pass throughmaster lease

A65

Lexington Square Haginomachi

1,528.58

1,408.43

39

36

1

Goodworks Co., Ltd.

17,590

0.2

Pass throughmaster lease

A36

Growth Maison Ikebukuro

952.89952.89

42

42

1

A37

Growth Maison Yoga

1,015.34

962.57

39

37

1

A38

Route Tachikawa

1,368.57

1,368.57

24

24

1

A39

Shibuya-Honmachi Mansion

1,167.50

1,072.94

25

23

1

A40

City Heights Kinuta

1,235.93

1,169.33

19

18

1

A41

Acseeds Tower
Kawaguchi-Namiki

1,210.74

1,082.46

57

51

A42

Capital Heights Kagurazaka

1,126.65

1,095.17

26

A43

College Square Machida

1,047.75

1,047.75

A44

Belair Meguro

557.05

A45

Wacore Tsunashima I

A46

65

Management Co., Ltd
Mitsui Home Estate Co., Ltd.
Pacific Development &Management Co., Ltd
Pacific Development &Management Co., Ltd

Pacific Development &Management Co., Ltd
Pacific Development &Management Co., Ltd

Pacific Development &Management Co., Ltd
Mitsui Home Estate Co., Ltd.
Pacific Development &Management Co., Ltd

Pacific Development &Management Co., Ltd
Pacific Development &Management Co., LtdProperty
No.

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

705.75591.498

71

Mitsui Home Estate Co., Ltd.

11,857

0.1

Pass throughmaster lease

1,430.64

1,329.33

43

40

1

Goodworks Co., Ltd.

32,254

0.3

Pass throughmaster lease784.74760.0433

32

1

Mitsui Home Estate Co., Ltd.

19,035

0.2

Pass throughmaster lease

Big Service Co., Ltd.

45,686

0.5

Pass throughmaster lease

205,456

2.2

Pass throughmaster lease

Tenants (Note 6)

Type oflease(Note 8)

A66

Visconti Kakuozan

A71

Lexington Square Daitabashi

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo

4,460.56

3,838.53

120

104

1

A75

Spacia Ebisu

7,794.91

7,328.56

109

102

1

A76

Neo Prominence

3,574.70

3,397.51

52

49

1

Goodworks Co., Ltd.

64,271

0.7

Pass throughmaster lease

A77

Invoice Shin-Kobe Residence

2,773.71

2,260.06

81

66

1

Goodworks Co., Ltd.

46,782

0.5

Pass throughmaster lease

A78

Cosmo Court Motomachi

2,310.49

1,997.77

82

71

1

Goodworks Co., Ltd.

35,528

0.4

Pass throughmaster lease

A79

Revest Honjin

1,933.80

1,837.44

80

76

1

Mininet, Inc.

31,6990.3

Pass throughmaster lease

A80

Revest Matsubara

1,955.40

1,795.49

70

64

1

Mininet, Inc.

28,164

0.3

Pass throughmaster lease

A81

Sun Terrace Minami Ikebukuro

898.70875.0538

37

1

Goodworks Co., Ltd.

23,830

0.3

Pass throughmaster lease

A82

Alba Noritake Shinmachi

1,731.68

1,575.33

64

58

1

Mininet, Inc.

25,917

0.3

Pass throughmaster lease

A83

Revest Meieki Minami

1,634.60

1,529.79

61

57

1

Mininet, Inc.

25,956

0.3

Pass throughmaster lease

A84

Revest Heian

1,554.03

1,379.03

40

33

1

Mininet, Inc.

23,023

0.2

Pass throughmaster lease

A85

Vendir Hamaotsu Ekimae

2,670.66

2,493.12

81

76

1

Mininet, Inc.

32,640

0.3

Pass throughmaster lease

A86

Salvo Sala

1,428.12

1,380.82

54

52

1

Goodworks Co., Ltd.

24,657

0.3

Pass throughmaster lease

A87

Excellente Kagurazaka

701.92619.5833

29

1

Goodworks Co., Ltd.

18,252

0.2

Pass throughmaster lease

A88

Luna Court Edobori

1,185.50

1,161.93

50

49

1

Goodworks Co., Ltd.

21,451

0.2

Pass throughmaster lease

A89

Winntage Kobe Motomachi

1,433.35

1,156.00

57

46

1

Goodworks Co., Ltd.

19,673

0.2

Pass throughmaster lease

A90

Queen's Court Fukuzumi

765.18738.8925

24

1

Goodworks Co., Ltd.

16,843

0.2

Pass throughmaster lease

A91

Corp Higashinotoin

1,029.05

979.524240

1Goodworks Co., Ltd.

17,203

0.2

Pass throughmaster lease

A92

Belair Oimachi

530.60492.80

26

24

1

Goodworks Co., Ltd.

14,4480.2

Pass throughmaster lease

A93

Siete Minami-Tsukaguchi

1,020.86

995.3640

39

1

Goodworks Co., Ltd.

16,605

0.2

Pass throughmaster lease

A94

Prime Life Sannomiya Isogami
Koen

789.12690.4832

28

1

Goodworks Co., Ltd.

13,7690.1

Pass throughmaster lease

A95

HERMITAGE NANBA WEST

992.76873.4821

18

1

Goodworks Co., Ltd.

15,516

0.2

Pass throughmaster lease

A96

Century Park Shinkawa
1-bankan

1,477.62

1,343.15

44

40

1

Goodworks Co., Ltd.

17,4090.2

Pass throughmaster lease

A97

West Avenue

794.80695.4440

35

1Goodworks Co., Ltd.

12,254

0.1

Pass throughmaster lease

A98

Little River Honmachibashi

974.81

944.5631

30

1Goodworks Co., Ltd.

13,795

0.1

Pass throughmaster lease

A99

Prime Life Mikage

761.18660.6928

24

1

Goodworks Co., Ltd.

11,566

0.1

Pass throughmaster lease

A100

City Court Kitaichijo

5,230.18

4,960.03

127

122

1

Big Service Co., Ltd.

65,467

0.7

Pass throughmaster lease

A101

Lieto Court Mukojima

2,940.20

2,802.73

82

78

1

Mitsui Home Estate Co., Ltd.

53,665

0.6

Pass throughmaster lease

A102

Lieto Court Nishi-Ojima

2,048.28

1,982.28

91

88

1

Mitsui Home Estate Co., Ltd.

A103

Royal Parks
Momozaka

8,776.26

8,776.26

147

147

4

Daiwa Living Co., Ltd.

A104

Royal Parks Shinden

15,797.29

15,797.29

248

248

4

Daiwa Living Co., Ltd.

B08

Kindai Kagakusha Building

1,451.54

1,451.54

13

13

1 Haseko Livenet, Inc.

B09

Shinjuku Island

526.43526.431

1

1 Not disclosed (Note 10)

B14

Lexington Plaza Nishigotanda

6,033.58

5,539.91

11

10

7 Community One Co., Ltd.

66

Pacific Development &Management Co., Ltd

Pass throughmaster lease
Guaranteed
rent and pass
139,988
1.5
throughmaster lease
Guaranteed
rent and pass
215,643
2.3
throughmaster lease
Pass through38,1620.4
master leaseNot
Not disclosed
disclosed(Note 10)(Note 10)
48,1050.5

140,640

1.5-

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

B15

Cross Square NAKANO

2,145.00

1,910.38

45

38

1

B16

Ohki Aoba Building

2,178.37

1,820.39

13

12

B17

Lexington Plaza Hachiman

8,419.15

8,419.15

18

B18

AEON TOWN Sukagawa

18,440.58

18,440.58

C01

Times Kanda-Sudacho 4th

81.04

81.04

Property
No.

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

44,623

0.5

Pass throughmaster lease

1 One-Eyed Capital Advisers

34,522

0.4

Pass throughmaster lease18

1 Tokyo Biso Kogyo Corporation

163,789

1.7

Pass throughmaster lease

1

1

1 AEONTOWN Co., Ltd.

142,027

1.5

Guaranteed
rent

1

1

1 Times24. Co., Ltd.

2,700

0.0

Tenants (Note 6)
Shin-ei Real EstateBusiness Co., Ltd.

D01

Hotel MyStays Kanda

2,585.72

2,585.72

126

126

1

MyStays Hotel Management
Co., Ltd.

95,222

1.0

D02

Hotel MyStays Asakusa

3,327.38

3,327.38

161

161

1

MyStays Hotel Management
Co., Ltd.

115,200

1.2

D03

Hotel MyStays Kyoto-Shijo

7,241.51

7,241.51

225

225

1

MyStays Hotel Management
Co., Ltd.

367,441

3.9

D04

MyStays Shin-Urayasu
Conference Center

6,232.30

6,232.30

175

175

1

MyStays Hotel Management
Co., Ltd.

212,187

2.2

D05

Hotel MyStays Maihama

2,456.36

2,456.36

90

90

1

MyStays Hotel Management
Co., Ltd.

183,694

1.9

D06

Hotel Vista Premio Dojima

9,445.32

9,445.32

153

153

1 MGH Master Lease Co., Ltd.

215,896

2.3

D07

Hotel MyStays Nagoya-Sakae

9,064.71

9,064.71

279

279

1

Yugen Kaisha Nagoya HotelManagement

197,906

2.1

D08

Hotel MyStays
Sakaisuji-Honmachi

4,188.83

4,188.83

191

191

1

MyStays Hotel Management
Co., Ltd.

201,529

2.1

D09

Hotel MyStays Yokohama

7,379.43

7,379.43

190

190

1

MyStays Hotel Management
Co., Ltd.

118,878

1.2

D10

Hotel MyStays Nippori

1,719.29

1,719.29

93

93

1

MyStays Hotel Management
Co., Ltd.

65,6150.7

D11Hotel MyStays
Fukuoka-Tenjin-Minami

3,412.71

3,412.71

177

177

1

MyStays Hotel Management
Co., Ltd.

137,361

1.4

D12

Flexstay Inn Iidabashi

2,953.38

2,953.38

62

62

1

MyStays Hotel Management
Co., Ltd.

52,0290.5

D13Hotel MyStays Ueno Inaricho

1,150.76

1,150.76

72

72

1

MyStays Hotel Management
Co., Ltd.

51,8180.5

D14Flexstay Inn Shinagawa

1,134.52

1,134.52

55

55

1

MyStays Hotel Management
Co., Ltd.

50,6000.5

D15

Flexstay Inn Tokiwadai

2,539.75

2,539.75

130

130

1

MyStays Hotel Management
Co., Ltd.

60,3680.6

D16Flexstay Inn Sugamo

2,089.86

2,089.86

105

105

1

MyStays Hotel Management
Co., Ltd.

54,8520.6

D17Hotel MyStays Otemae

4,956.66

4,956.66

111

111

1

MyStays Hotel Management
Co., Ltd.

144,286

1.5

D18

Flexstay Inn Kiyosumi Shirakawa

2,673.64

2,673.64

56

56

1

MyStays Hotel Management
Co., Ltd.

39,6690.4

D19

Flexstay Inn Nakanobu P1

770.56770.5639

39

1

MyStays Hotel Management
Co., Ltd.

21,6530.2

D20

Flexstay Inn Nakanobu P2

391.49391.4922

22

1

MyStays Hotel Management
Co., Ltd.

11,3710.1

D21

APA Hotel Yokohama Kannai

6,568.51

6,568.51

452

452

1 APA Hotel Kabushiki Kaisha

234,9732.5

67Type oflease(Note 8)Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation

Property
No.

Property nameLeasable area2(m )(Note 1)

Leased area2(m )(Note 2)

Leasableunits(units)(Note 3)

LeasedTotalunits
number of(units)tenants(Note 4) (Note 5)

Tenants (Note 6)

Rental revenue(JPY thousand)(Note7)

Ratio ofrentalrevenue(%)

D22

Hotel Nets Hakodate

7,961.26

7,961.26

205

205

1

Hakodate Hospitality Godo
Kaisha160,872

1.7

D23

Flexstay Inn Shirogane

1,754.06

1,754.06

84

84

1

MyStays Hotel Management
Co., Ltd.

54,4440.6

D24

Hotel MyStays Haneda

5,400.16

5,400.16

174

174

1

MyStays Hotel Management
Co., Ltd.

178,271

1.9

D25

Hotel MyStays Kameido P1

4,349.67

4,349.67

266

266

1

MyStays Hotel Management
Co., Ltd.

186,026

2.0

D26

Hotel MyStays Ueno Iriyaguchi

2,247.92

2,247.92

97

97

1

MyStays Hotel Management
Co., Ltd.

98,7621.0

D27

Hotel MyStays Kameido P2

2,793.99

2,793.99

177

177

1

MyStays Hotel Management
Co., Ltd.

130,259

1.4

D28

Hotel Vista Shimizu

3,559.81

3,559.81

152

152

1

Vista Hotel Management Co.,Ltd.

83,3190.9

D29Super Hotel
Shinbashi/ Karasumoriguchi

1,403.89

1,403.89

74

74

1

Super Hotel Co., Ltd.

39,4260.4

D30

Flexstay Inn Higashi-Jujo

1,714.53

1,714.53

89

89

1

MyStays Hotel Management
Co., Ltd.

40,1260.4

D31

Hotel MyStays Utsunomiya

11,733.23

11,733.23

126

126

1

MyStays Hotel Management
Co., Ltd.

64,742

D32

Flexstay Inn Kawasaki-Kaizuka

1,190.57

1,190.57

64

64

1

MyStays Hotel Management
Co., Ltd.

32,535

D33

Comfort Hotel Toyama

3,305.64

3,305.64

150

150

1

Greens Co., Ltd.

35,928Type oflease(Note 8)Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent

Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
0.7
rent type
operation
Fixed rent
plus variable
0.3
rent type
operation
0.4

Fixed rent

Fixed rent
plus variable
0.3
rent type
operation
Fixed rent
plus variable
1.2
rent type
operation

D34

Flexstay Inn
Kawasaki-Ogawacho

725.60725.606262

1MyStays Hotel Management
Co., Ltd.

28,421

D35

Flexstay Inn Ekoda

3,932.93

3,932.93

210

210

1

MyStays Hotel Management
Co., Ltd.

110,022

D36Super Hotel Tokyo-JR Tachikawa
Kitaguchi

1,832.97

1,832.97

96

96

1

Super Hotel Co., Ltd.

31,787

0.3

Fixed rent

D37Super Hotel JR Ueno-iriyaguchi

1,279.16

1,279.16

69

69

1

Super Hotel Co., Ltd.

27,275

0.3

Fixed rent

90,819Fixed rent
plus variable
1.0
rent type
operation

37,894

0.4

Fixed rent

MyStays

HotelManagement

D38

Hotel MyStays Shinsaibashi

1,942.01

1,942.01

57

57

1

D39

Comfort Hotel Kurosaki

3,207.60

3,207.60

151

151

1

Greens Co., Ltd.

D40

Comfort Hotel Maebashi

3,660.96

3,660.96

154

154

2

Greens Co., Ltd.

43,811

0.5

Fixed rent

D41

Comfort Hotel Tsubame-Sanjo

3,099.90

3,099.90

133

133

2

Greens Co., Ltd.

34,9490.4

Fixed rent

D42

Comfort Hotel Kitami

3,009.50

3,009.50

127

127

1

Greens Co., Ltd.

30,3000.3

Co., Ltd.

D43

Hotel MyStays Gotanda Station

8,752.42

8,752.42

335

335

1

MyStays Hotel Management
Co., Ltd.

D44

Hotel Epinard Nasu

37,702.33

37,702.33

310

310

1

Naqua Hotels and Resorts
Management Co., Ltd.

D45

Hotel MyStays Fukuoka Tenjin

5,083.06

5,083.06

217

217

1

D46

Hotel MyStays Hamamatsucho

1,951.90

1,951.90

105

105

D47

Hotel MyStays Premier Kanazawa

13,250.03

13,250.03

261

D48

Takamatsu Tokyu REI Hotel

7,148.17

7,148.17

409,928.31

401,162.85

Total

Fixed rent
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation
Fixed rent
plus variable
rent type
operation

396,6124.2

1,040,790

10.9

MyStays Hotel Management
Co., Ltd.

190,416

2.0

1MyStays Hotel Management
Co., Ltd.

115,208

1.2

261

1

MyStays Hotel Management
Co., Ltd.

343,391

3.6

193

193

3

Tokyu Hotels Co., Ltd.

106,269

1.1

Fixed rent

11,313

11,061140

9,511,466

100.0

-

-

(Note 1)

“Leasable Area” is the total leasable floor area for residential, office, retail and others, for each real estate or real estate in trust.

(Note 2)

“Leased Area” is the total sum of the leased area with respect to which a lease agreement with an end-tenant has actually been68

entered into and which are leased to the end-tenant (the area specified in the lease agreement). With respect to the rent-guarantee
type master lease agreement, the area leased to master lessee is listed.
(Note 3)

“Leasable Units” with respect to hotel properties means the total number of guest rooms and rentable retail units, etc. for each realestate or real estate in trust, and with respect to properties other than hotel properties, means the total number of rentable units andretail units, etc. in each real estate or real estate in trust.

(Note 4)

“Leased Units” with respect to hotel properties means the total number of guest rooms, retail spaces, etc. actually leased to tenants or
end-tenants based on lease agreements, and with respect to properties other than hotel properties, means the total number of units,
retail units, etc. actually leased to tenants or end-tenants based on lease agreements.

(Note 5)

“Total Number of Tenants” is calculated by counting a lessee who has directly concluded a lease agreement for each property as one
tenant, and a tenant who has rented two or more rooms in a single property is calculated as one tenant.

(Note 6)

“Tenant” is the master lessee where there is a master lease agreement between INV or the trustee and a master lease company, and theprincipal lessee where there are direct lease agreements with end-tenants.

(Note 7)

“Rental Revenue” is the aggregate rent revenue for each property for the fiscal period, rounded down to the nearest thousand yen.

(Note 8)With respect to the properties for which a master lease agreement has been entered into, the type of lease (either a pass-throughmaster lease or a fixed rent) is indicated. “Pass-through master lease” is defined as a lease under which, pursuant to the pass-throughmaster lease agreement entered into between the master lease company and INV or the trustee, the amount equal to the rent under thesublease agreement between the master lease company and the end tenant shall be paid to INV or the trustee.
“Guaranteed rent” is defined as a lease under which a specified rent shall be paid to INV or the trustee, regardless of the rent under
the sublease agreement between the master lease company and the end tenant. Moreover, with respect to hotel properties, the type ofrent received from the relevant operator (either a fixed-rent or a fixed rent plus variable rent type operation) is indicated. “Fixedrent” is defined as an agreement under which INV or the trustee shall receive a specified rent, regardless of the operational results of
the relevant hotel. “Fixed rent plus variable rent type operation” is defined as an agreement under which INV or the trustee shallreceive rent that varies based on the GOP (Gross Operating Profit), in addition to a fixed rent.

(Note 9)The master lessee was changed to Goodworks Co., Ltd. on January 1, 2017.

(Note 10) Not disclosed because the consent of the tenant was not obtained.

69

b

Occupancy trend(Unit: %)Property
No.

A26
A27

Property nameNisshin Palacestage
Daitabashi
Nisshin Palacestage
Higashi-Nagasaki

22nd fiscal
periodAs ofthe endof Jun.
2014

23rd fiscal
periodAs ofthe endof Dec.
2014

24th fiscal
periodAs ofthe endof Jun.
2015

25th fiscal
periodAs ofthe endof Dec.
2015

26th fiscal
periodAs ofthe endof Jun.
2016

94.1

90.0

96.9

96.1

97.0

27th fiscal period
As ofthe endof Jul.
2016
99.0

As of
the endof Aug.
2016
95.9

As of
the endof Sep.
2016
95.9

As of
the endof Oct.
2016
95.9

As of
the endof Nov.
2016
98.0

As of
the endof Dec.
2016
98.0

97.7

96.3

94.9

96.8

93.2

95.1

92.7

93.0

97.0

95.2

96.5

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

Growth Maison
Kameido

89.3

86.2

95.4

97.0

95.5

97.0

91.0

95.5

98.5

92.4

92.4

A30

Emerald House

100.0

98.0

100.0

97.9

100.0

100.0

99.0

99.0

99.0

99.0

96.9

A31

Harmonie Ochanomizu

91.2

93.5

88.3

90.8

100.0

94.9

100.0

100.0

100.0

100.0

100.0

A32

Suncrest Shakujii-Koen

97.0

97.0

97.4

97.0

84.3

84.3

87.2

89.1

89.1

94.0

94.0

86.9

95.6

97.0

97.2

89.7

94.4

91.4

92.7

92.7

91.3

94.2

A28

Growth Maison Gotanda

A29

A33
A34

Growth Maison
Shin-Yokohama
Belle Face
Ueno-Okachimachi

98.3

98.3

100.0

100.0

98.3

98.3

98.3

98.3

96.7

96.7

95.2

A35

Grand Rire Kameido

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A36

Growth Maison
Ikebukuro

90.4

90.5

88.1

97.6

97.6

100.0

100.0

100.0

100.0

100.0

100.0

A37

Growth Maison Yoga

97.3

94.9

94.9

94.8

97.5

97.5

94.8

100.0

100.0

94.8

94.8

A38

Route Tachikawa

96.6

96.6

96.6

96.6

93.2

93.2

93.2

93.2

93.2

96.6

100.0

A39

Shibuya-Honmachi
Mansion

100.0

91.3

89.9

96.4

95.9

91.7

91.7

95.9

94.4

91.9

91.9

A40

City Heights Kinuta

100.0

100.0

94.6

89.2

100.0

89.2

83.8

89.2

94.6

89.2

94.6

93.0

86.0

100.0

86.0

94.8

93.0

94.8

91.3

96.5

94.8

89.4

A41
A42

Acseeds Tower
Kawaguchi-Namiki
Capital Heights
Kagurazaka

90.5

91.6

94.4

97.2

97.2

97.2

91.9

91.9

91.9

97.2

97.2

College Square Machida

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A44

Belair Meguro

100.0

88.1

100.0

96.0

96.1

96.1

96.1

100.0

88.1

92.1

92.1

A45

Wacore Tsunashima I

94.1

89.9

98.0

91.9

98.0

98.0

98.0

93.9

93.9

93.9

89.9

A46

Foros Nakamurabashi

100.0

88.8

90.5

100.0

96.2

97.5

95.1

92.6

92.6

92.6

91.2

A47

Growth Maison Kaijin

90.0

89.0

87.3

96.7

97.7

97.4

97.4

96.7

96.7

96.7

97.4

A48

College Square Machiya

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A51

City House Tokyo
Shinbashi

94.5

95.6

97.1

98.6

96.1

97.0

95.3

97.4

95.7

97.1

93.3

A43

A52
A53
A54

Winbell Kagurazaka
Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

98.6

100.0

95.4

98.3

98.6

93.9

93.5

96.8

95.7

95.9

95.5

92.5

90.5

92.1

97.5

100.0

96.8

98.4

98.4

98.4

100.0

95.8

93.3

88.8

93.5

98.8

95.4

95.5

92.1

95.6

97.8

98.9

96.7

A56

Casa Eremitaggio

97.0

91.2

84.2

100.0

100.0

100.0

96.7

96.7

100.0

100.0

96.7

A59

Towa City Coop
Shinotsuka II

92.8

91.3

96.3

96.4

97.6

95.0

95.0

98.8

93.5

97.6

96.3

A61
A62
A63

Bichsel Musashiseki
Lexel Mansion Ueno
Matsugaya
Towa City Coop
Sengencho

94.3

85.8

98.5

97.1

95.7

91.5

91.5

94.3

91.4

90.0

91.5

96.3

96.8

100.0

100.0

100.0

100.0

100.0

100.0

100.0

96.4

96.4

89.1

80.2

83.0

93.1

91.1

91.1

88.0

88.0

84.0

90.9

89.7

90.6

88.1

98.3

98.3

96.7

95.0

95.0

93.3

93.3

92.8

92.8
92.1

A64

Royal Park Omachi

A65

Lexington Square
Haginomachi

97.4

100.0

92.4

92.6

100.0

100.0

94.8

92.1

92.1

92.1

A66

Visconti Kakuozan

100.0

89.7

78.3

86.3

100.0

100.0

100.0

100.0

100.0

83.8

83.8

90.9

85.1

93.0

90.1

97.2

97.9

95.8

93.7

97.9

92.9

92.9

A71
A72
A73

Lexington Square
Daitabashi
Lexington Square Honjo
Azumabashi
AMS TOWER Minami
6-Jo

96.9

97.0

91.1

97.0

94.1

100.0

100.0

100.0

100.0

100.0

96.9

91.8

83.7

83.3

94.3

87.6

86.9

88.6

87.9

86.7

85.7

86.1

A75

Spacia Ebisu

90.0

93.6

93.6

95.6

91.7

95.8

96.1

96.0

95.7

95.4

94.0

A76

Neo Prominence

88.9

93.9

94.9

96.6

96.2

92.9

94.5

94.5

95.0

96.8

95.0

94.4

94.0

88.4

94.9

98.2

98.2

89.8

86.6

85.2

86.6

81.5

90.4

86.6

96.2

96.2

96.3

93.9

93.9

95.1

90.3

89.0

86.5

A77
A78

Invoice Shin-Kobe
Residence
Cosmo Court
Motomachi

A79

Revest Honjin

95.0

92.5

100.0

98.8

97.5

98.8

97.5

97.5

96.3

95.0

95.0

A80

Revest Matsubara

91.2

93.7

89.5

93.1

88.7

88.7

86.8

88.7

95.6

94.4

91.8

89.5

92.1

97.4

97.4

100.0

100.0

100.0

94.7

97.4

97.4

97.4

91.7

94.4

98.6

91.0

97.2

98.6

95.8

96.5

94.4

89.6

91.0

A81
A82

Sun Terrace Minami
IkebukuroAlba Noritake
Shinmachi

A83

Revest Meieki Minami

93.6

95.4

100.0

100.0

96.6

94.5

96.3

96.3

94.8

93.3

93.6

A84

Revest Heian

98.4

100.0

92.0

100.0

100.0

98.4

95.2

92.0

93.6

93.6

88.7

A85

Vendir Hamaotsu
Ekimae

94.2

87.3

88.4

88.4

95.3

97.8

97.7

96.2

97.3

94.9

93.4

A86

Salvo Sala

91.5

93.5

94.4

98.0

100.0

98.0

100.0

98.3

96.7

96.7

96.7

70

22nd fiscal
periodAs ofthe endof Jun.
2014

23rd fiscal
periodAs ofthe endof Dec.
2014

24th fiscal
periodAs ofthe endof Jun.
2015

25th fiscal
periodAs ofthe endof Dec.
2015

26th fiscal
periodAs ofthe endof Jun.
2016

27th fiscal period

Property
No.

Property name

A87

Excellente Kagurazaka

97.1

88.3

97.1

91.2

97.1

97.1

97.1

97.1

94.1

94.1

A88

Luna Court Edobori

88.1

88.1

94.0

96.0

96.0

98.0

98.0

98.0

96.0

98.0

98.0

A89

Winntage Kobe
Motomachi

91.1

94.8

94.7

85.9

86.0

84.2

84.2

84.2

80.7

82.4

80.7

A90

Queen's Court Fukuzumi

100.0

92.5

100.0

95.9

93.1

93.1

93.1

96.6

100.0

100.0

96.6

A91

Corp Higashinotoin

90.3

92.9

95.7

97.9

90.8

95.2

95.2

90.5

92.9

95.2

95.2

A92

Belair Oimachi

96.1

92.9

96.1

96.4

100.0

88.7

88.7

92.6

96.4

92.9

92.9

A93
A94
A95
A96

Siete
Minami-Tsukaguchi
Prime Life Sannomiya
Isogami Koen
HERMITAGE NANBA
WEST
Century Park Shinkawa
1-bankan

As ofthe endof Jul.
2016

As ofthe endof Aug.
2016

As ofthe endof Sep.
2016

As ofthe endof Oct.
2016

As ofthe endof Nov.
2016

As ofthe endof Dec.
2016
88.3

92.5

97.5

92.6

95.0

97.5

97.5

92.5

90.0

97.5

97.5

97.5

100.0

96.9

93.8

100.0

93.8

93.8

93.8

93.8

93.8

87.5

87.5

92.0

100.0

95.7

91.2

100.0

96.0

96.0

91.9

88.0

88.0

88.0
90.9

100.0

95.5

91.0

91.0

95.4

93.2

90.9

86.4

93.2

95.5

A97

West Avenue

85.0

85.0

75.0

80.0

85.0

87.5

90.0

90.0

92.5

90.0

87.5

A98

Little River
Honmachibashi

93.9

93.8

96.9

100.0

100.0

100.0

100.0

96.9

96.9

96.9

96.9

A99

Prime Life Mikage

93.4

93.3

86.8

100.0

96.7

93.4

96.7

96.7

90.1

90.1

86.8

A100

City Court Kitaichijo

-

-

-

96.6

95.7

97.1

96.5

98.4

98.3

98.0

94.8

A101

Lieto Court Mukojima

-

-

-

97.6

96.8

97.6

99.0

96.5

96.5

95.3

95.3

A102

Lieto Court Nishi-Ojima

-

-

-

100.0

98.0

98.8

96.7

97.8

96.8

96.8

96.8

A103

Royal Parks
Momozaka

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

A104

Royal Parks Shinden

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B08

Kindai Kagakusha
Building

95.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B09

Shinjuku Island

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

B14

Lexington Plaza
Nishigotanda

100.0

100.0

100.0

100.0

100.0

91.8

91.8

91.8

91.8

91.8

91.8

B15

Cross Square NAKANO

64.3

64.3

70.8

79.1

84.1

87.4

90.7

90.7

90.7

90.7

89.1

B16

Ohki Aoba Building

B17
B18
C01

Lexington Plaza
Hachiman
AEON TOWN
Sukagawa
Times Kanda-Sudacho
4th

100.0

100.0

100.0

100.0

83.6

83.6

83.6

83.6

83.6

83.6

83.6

100.0

100.0

100.0

100.0

98.8

98.8

98.8

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0
100.0

D01

Hotel MyStays Kanda

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D02

Hotel MyStays Asakusa

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D03
D04
D05
D06
D07
D08
D09

Hotel MyStays
Kyoto-Shijo
MyStays Shin-Urayasu
Conference Center
Hotel MyStays Maihama
Hotel Vista Premio
DojimaHotel MyStays
Nagoya-Sakae
Hotel MyStays
Sakaisuji-Honmachi
Hotel MyStays
Yokohama

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D10

Hotel MyStays Nippori

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D11

Hotel MyStays
Fukuoka-Tenjin-Minami

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D12

Flexstay Inn Iidabashi

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D13

Hotel MyStays Ueno
Inaricho

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D14

Flexstay Inn Shinagawa

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D15

Flexstay Inn Tokiwadai

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D16

Flexstay Inn Sugamo

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D17

Hotel MyStays Otemae

D18
D19
D20
D21

Flexstay Inn Kiyosumi
ShirakawaFlexstay Inn Nakanobu
P1
Flexstay Inn Nakanobu
P2
APA Hotel
Yokohama-Kannai

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D22

Hotel Nets Hakodate

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D23

Flexstay Inn Shirogane

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D24

Hotel MyStays Haneda

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D25
D26

Hotel MyStays Kameido
P1
Hotel MyStays Ueno
Iriyaguchi

71

22nd fiscal
periodAs ofthe endof Jun.
2014

23rd fiscal
periodAs ofthe endof Dec.
2014

24th fiscal
periodAs ofthe endof Jun.
2015

25th fiscal
periodAs ofthe endof Dec.
2015

26th fiscal
periodAs ofthe endof Jun.
2016

100.0

100.0

27th fiscal period

Property
No.

Property name

D27

Hotel MyStays Kameido
P2

-

D28

Hotel Vista Shimizu

-

-

-

100.0

100.0

100.0

-

-

-

100.0

100.0

100.0

-

-

-

100.0

100.0

100.0

-

-

-

100.0

100.0

100.0

D29
D30
D31
D32

Super Hotel Shinbashi/
Karasumoriguchi
Flexstay Inn
Higashi-Jujo
Hotel MyStays
Utsunomiya
Flexstay Inn
Kawasaki-Kaizuka

-

-

As of
the endof Jul.
2016
100.0

As of
the endof Aug.
2016
100.0

As of
the endof Sep.
2016

As ofthe endof Oct.
2016

As ofthe endof Nov.
2016

As ofthe endof Dec.
2016

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0
100.0

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D33

Comfort Hotel Toyama

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D34

Flexstay Inn
Kawasaki-Ogawacho

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D35
D36
D37
D38

Flexstay Inn Ekoda
Super Hotel Tokyo-JR
Tachikawa Kitaguchi
Super Hotel JR
Ueno-iriyaguchi
Hotel MyStays
Shinsaibashi

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0
100.0

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

D39

Comfort Hotel Kurosaki

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D40

Comfort Hotel Maebashi

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D41

Comfort Hotel
Tsubame-Sanjo

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D42

Comfort Hotel Kitami

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D43

Hotel MyStays
Gotanda Station

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D44

Hotel Epinard Nasu

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

D45
D46
D47
D48

Hotel MyStays
Fukuoka Tenjin
Hotel MyStays
Hamamatsucho
Hotel MyStays PremierKanazawa
Takamatsu Tokyu REI
Hotel
Total

(Note)

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

-

-

-

100.0

100.0

100.0

100.0

100.0

100.0

100.0

95.1

96.1

96.9

98.2

98.5

98.4

98.2

98.2

98.2

98.2

97.9

“Occupancy Rate” is calculated by dividing the leased area by the leasable area, and rounded to the first decimal place.

72