Invincible Investment Corporation
Asset Management Report
Fiscal Period ended June 30, 2019 (January 1, 2019 to June 30, 2019)

Content
Greetings from Naoki Fukuda, Executive Director of Invincible Investment
Corporation and President & CEO of Consonant Investment Management Co., Ltd.
Increase in Asset Size and Initiatives for Asset recycling
Properties Acquired in July 2019
Asset Management Report
Audited Financial Statements for the 32th Fiscal Period (from January 1, 2019 toJune 30, 2019)
Domestic Portfolio Map (As of August 31, 2019)
Financial Conditions
Overview of Unitholders/Investment

Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation and President& CEO of Consonant Investment Management Co., Ltd.
We would like to take this opportunity to express our sincere gratitude to all unitholders of Invincible
Investment Corporation (“INV”) for your continued support.
We hereby provide you with a report on INV’s asset management and financial results for the 32nd fiscal
period (covering the period from January 1, 2019 to June 30, 2019; the “Reporting Period”).
During the Reporting Period, INV changed the investment structure for two overseas hotels to a directownership structure of the underlying assets from investments in anonymous associations on May 9, 2019.
The change in ownership structure was made to adapt to an amended Act on Special Measures Concerning
Taxation executed on April 1, 2019 and completely resolves the tax issue regarding conduit requirements.
In June 2019, INV sold two residential assets for extremely favorable terms as a continuation of its asset
recycling program. The total sale price was JPY 39.9 billion, resulting in a gain of JPY 11.1 billion. The
gain on sale was retained as internal reserves in order to stabilize future distributions. INV has achieved
steady NOI growth for both hotel and residential assets, the core assets in the portfolio.
As a result of the initiatives and factors mentioned above, operating revenues reached JPY 27,339 million,
operating income JPY 22,185 million, and net income JPY 21,239 million. INV decided on a distribution
per unit (DPU) of JPY 1,656 for June 2019 fiscal period (+15.8% year on year (1)), and expects annual
DPU of JPY 3,381 for 2019. INV reserved a portion of the net income, which increased in part due to thestructure change of the overseas hotels and the sales of the two residential assets, in order to maintain stable
distributions in the future.
With the updated 2019 DPU forecast of JPY 3,381, INV has already achieved 45.7% of its medium-termplan outlined in “Vision 2022”(2) and maintains its target to achieve an annual DPU of JPY 3,700 in 2022.
On July 1, 2019, INV launched its sixth Global Share Offering (after the reporting period), and seventh
share offering in total since Fortress became its Sponsor. The funds from the issuance of new units alongwith new borrowings and cash were used to acquire 18 domestic hotels. As a result, our asset size exceeds
JPY 500 billion (based on acquisition price), and we have the largest hotel portfolio among all J-REITs (asof August 31, 2019). INV believes the July 2019 acquisition benefits the portfolio by providing further
diversification in terms of area and asset type, and will contribute to stability and growth of revenue.
The 18 high quality hotels(3) above are mainly located in "Prime Tourism Area"(4), where we believe thedemand for tourists, especially inbound tourists, is and will be strong such as Hokkaido, Fuji area, andIshigaki Island. We also believe that the Rugby World Cup held this fall and the Tokyo Olympics andParalympics held next year will draw an increase in attention to Japan, helping to promote robust demandof inbound tourists in the future.
INV will continue to implement its basic policy to “increase distribution per unit,” and will ensure theimplementation of measures to maximize unitholder value.
Your continued support is highly appreciated.
Naoki Fukuda
Executive Director, Invincible Investment Corporation
President & CEO, Consonant Investment Management Co., Ltd.
(1) Comparison with the fiscal period ended June 2018. In order to eliminate the seasonal effects of hotel
variable rent, which is one of the major revenues of INV, the comparison is made with the same period in
the previous year and not with the previous fiscal period (ended December 2018).
(2) This is a target based on various assumptions and conditions, and there is no guarantee that INV canachieve this target in 2022 or later(3) Hotels we consider as highly competitive in terms of location, appearance, interior, specifications,ancillary facilities and facilities.
(4) We define as areas with strong tourism demand particularly from inbound visitors due to attractive
tourism resources
Distribution per unit for the 32nd fiscal period(the fiscal period ended June 2019)

JPY 1,656(Note) The forward-looking statements, forecasts and goals described in this report are based on available information,
assumptions and estimates as of August 31, 2019. These assumptions and estimates are unavoidably uncertain, andcould be affected by various risks and factors beyond INV’s control. Thus, no guarantee can be made regarding therealization of such future forecasts and targets, and actual results may vary significantly.

Change in DPU

Distribution per unit for the 32nd fiscal period(the fiscal period ended June 2019)

JPY 1,656(Note) The forward-looking statements, forecasts and goals described in this report are based on available information,
assumptions and estimates as of August 31, 2019. These assumptions and estimates are unavoidably uncertain, andcould be affected by various risks and factors beyond INV’s control. Thus, no guarantee can be made regarding therealization of such future forecasts and targets, and actual results may vary significantly.

Increase in Asset Size and Initiatives for Asset Recycling
INV strived to improve unitholder value through strategic asset recycling, such as disposition of two
residential properties in June 2019 to seize a favorable market opportunity and new acquisition of 18
properties in July 2019 using the proceeds from said disposition, funds raised through public offering, etc.
As a result of such efforts, the asset size has expanded to over JPY 500 billion.

No. of properties (Note 2)

78

91

111

124

126

132

148

Of which, hotels

0

20

37

48

54

66

84

Of which, residential

63

63

66

68

67

64

62

Of which, others

15

8

8

8

5

2

2

 Portfolio Composition(Note 1) Based on the acquisition price as of the end of the relevant year. After 2017, includes the amount of contribution by INV to the JV TMK
preferred equity securities that holds Sheraton Grande Tokyo Bay Hotel (SGTB). “2019 (Forecast)” indicates the acquisition price as ofJuly 31, 2019. As to the two overseas assets (Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort) (the“Two Overseas Hotel Assets”), the amount of TK investment to a Cayman Islands special purpose company (the “Cayman SPC”) that heldleasehold interests in the overseas hotels as underlying assets is treated as acquisition price for “Dec. 2018”; and the book value of theleasehold, etc. of the overseas hotels held by the Cayman SPC, which succeeded leasehold, etc. of the overseas hotels from the Cayman
SPC, as of May 9, 2019 (Cayman local time (May 10, 2019, Japan time)), is treated as acquisition price for “Aug. 2019.” The amounts
are converted into JPY using the forward exchange rate of USD 1 = JPY110.45 based on the foreign exchange forward implemented inconnection with the original TK investment in the Cayman SPC (contract thereof was entered into on July 26, 2018, and implemented on
September 26, 2018). For 2014, 2017, and 2018, the sum of the “AUM” of the previous year and “Price of new acquisitions” of thecurrent year does not match the “AUM” of the current year since asset disposition was implemented in those years.
(Note 2) The amount of contribution by INV to the JV TMK preferred equity securities and the amount of TK investment by INV to the SPC areclassified with the relevant underlying assets and as one property based on the property type of the assets.
(Note 3) Calculated based on acquisition price. As to preferred equity securities in the TMK which holds Sheraton Grande Tokyo Bay Hotel, it iscalculated using the amount of contribution by INV as acquisition price. As to the overseas hotels, it is calculated using the book value ofthe overseas hotels held by the Cayman SPC holding their leasehold, etc., as of May 9, 2019 (Cayman local time (May 10, 2019, Japantime)), when INV succeeded leasehold, etc. of the overseas hotels from the Cayman SPC as distribution in kind in line with the terminationof the TK agreement, as acquisition price. The amounts converted into JPY amount via the forward exchange rate of USD 1 = JPY
110.45 based on the foreign exchange forward implemented in connection with the original TK investment in the Cayman SPC (contract
thereof was entered into on July 26, 2018, and implemented on September 26, 2018) are used in the calculation. Preferred equity
securities are categorized based on the hotel type and location of each underlying asset.

(Note 4) Defined as follows: Greater Tokyo (ex, Tokyo 23 wards) is Tokyo (ex. Tokyo 23 Wards), Kanagawa, Chiba and Saitama. Kansai area is
Osaka, Hyogo ,Kyoto, Shiga, Wakayama and Nara. Chubu area is Aichi, Gifu, Mie, Shizuoka, Nagano, Yamanashi, Niigata, Toyama,
Ishikawa and Fukui. Kyushu area is Fukuoka, Kumamoto, Kagoshima, Nagasaki, Oita, Miyazaki, Saga and Okinawa(Note 5) Spacia Ebisu: Actual NOI for the 12 months prior to the acquisition from February 2009 to January 2010 / Royal Parks Tower
Minami-Senju: Leveled NOI for the 12 months prior to the acquisition from April 2016 to March 2017 based on actual results provided bysellers and adjusted to reflect trust fee and insurance premiums assuming the property had been held by INV(Note 6) Actual NOI for 2018 full year
(Note 7) Calculated by dividing the total amount of actual NOI (before and after depreciation) from May 2018 to April 2019 by the total amount ofsales price for the two disposed properties

 Overview of Asset Recycling
Acquisitions
18 hotels mainly in prime
tourism areas(Representative properties)

Dispositions
2 residential properties
NOI(¥ mn)

Asset Recycling¥39,900 mn(Total disposition
price)

Spacia Ebisu

3.9% (Note 7)(Average actual
NOI yield)

Internal growth strategy▪ PM change▪ Rent increase program

2.2% (Note 7)(Average actual
NOI yield after
depreciation)

Sales/
AcquisitionPrice¥82,646 mn(Total acquisition
price)

5.6%

Sales cap
rate/ NOI
Yield

(Average appraisal
NOI yield)

After Dep.
sales cap
rate/ NOI
Yield

(Average appraisal
NOI yield after
depreciation)

Hotel MyStays
Sapporo Aspen

Art Hotel
Ishigakijima

Hotel MyStays
Fuji Onsen Resort

Sonia Otaru

Hotel Nord Otaru

Hotel MyStays
Matsuyama

4.0%

NOI
(¥ mn)

Asset Recycling

Royal Parks Tower
Minami-Senju

Asset sales under favorable conditions
as a result of internal growth▪ Realized gain on sale of JPY 11.1
billion▪ Proceeds from the disposition is used

to partially fund the acquisition of theassets to be acquired.

Contribution to distributions for the
medium to long-term growthHotel MyStays Fuji Onsen Resort

Properties Acquired in July 2019

Hotel MyStays Sapporo Aspen▪ Located a four-minute walk from the North Exit of Sapporo Station, the biggest transportation hub in Hokkaido, on the JR
Hakodate Main Line.
▪ Convenient location that appeals to both business guests and tourists.
▪ Symbolizing the famous poplar trees that line the Hokkaido University campus nearby, the interior evokes the warmth ofwood.
▪ A full-service hotel with small to large conference rooms and banquet halls as well as a variety of room types.
Property information
Type
Address
Transport AccessFull-Service Hotel
5-1 Nishi 4-chome,
Kitahachijo, Kita-ku,
Sapporo-shi, Hokkaido, andseven other lots
4-minute walk from Sapporo
Station on JR Hakodate
Main Line

Completion Date

December 1995

Renovation Date

From March 20017 toJune 2017

Number of Guest
Rooms

305 rooms

Total Floor Area

15,313.17 m2 (Note 1)

Lot Area

2,551.69 m2

Hotel MyStays Sapporo Susukino▪ Located a seven-minute walk from Susukino Station of Sapporo Subway Namboku Line and a ten-minute walk from Hosui
Susukino Station on Sapporo Subway Toho Line.
▪ Excellent access to Susukino, a well-known downtown area.
▪ Rebranded and reopened under the MyStays brand in July 2018.
▪ All of the 104 rooms, consisting mostly of double/twin rooms, have been renovated.
Property information
Type
Address

Transport Access

Limited-Service Hotel
1-6 Nishi 5-Chome,
Minaminanajo, Chuo-ku,
Sapporo-shi, Hokkaido, andone other lot
7-minute walk from
Susukino Station on Sapporo
Subway Namboku Line

Completion Date

May 1981

Renovation Date

From April 2018 to
July 2018

Number of Guest
Rooms

104 rooms

Total Floor Area

2,853.26 m2 (Note 2)

Lot Area

745.14 m2(Note 1) There is a parking lot (43.55 m2) as an annex building.
(Note 2) While INV acquired compartmentalized ownership of this property, the total floor area of the entire building is stated as it owns compartmentalized
ownership of the entire building.

Hotel MyStays Sapporo Nakajima Park
▪ Conveniently located a four-minute walk from Horohira-bashi Station on
Sapporo Subway Namboku Line.
▪ Fully renovated in May 2016. The hotel now has a balanced design
featuring contemporary interior design and solid exposed concrete exteriors.
▪ Beauty of nature of Nakajima Park, chosen as one of the best hundred urban
parks in Japan (Note 1), can be enjoyed from the windows of guest rooms.

Property information
Type
Address
Transport AccessCompletion Date
Renovation Date
Number of Guest
Rooms
Total Floor Area
Lot Area

Full-Service Hotel
1-20 Nishi 1-chome, Minamijuyonjo, Chuo-ku, Sapporo-shi, Hokkaido
4-minute walk from Horohirabashi Station on Sapporo Subway Namboku
Line
February 1991
From January 2016 to May 201686 rooms
5,473.41 m2
1,421.30 m2

Hotel MyStays Sapporo Nakajima Park Annex▪ Located in the center of Sapporo City, a seven-minute walk from Nakajima▪
▪

Park Station on Sapporo Subway Namboku Line; convenient for bothbusiness and sightseeing.
Fully renovated in June 2017.
Simple guest rooms in a bright and contemporary style with white-themedinterior seeking functional beauty.

Property information
Type

Limited-Service Hotel

Address

4-3 Nishi 1-chome, Minamijuichijo, Chuo-ku, Sapporo-shi, Hokkaido
7-minute walk from Nakajima Koen Station on Sapporo Subway Namboku
Line
September 1991

Transport AccessCompletion Date
Renovation Date
Number of Guest
Rooms
Total Floor Area

From March 2017 to June 2017

Lot Area

437.71 m2

80 rooms
1,775.21 m2(Note 1) “Top 100 Urban Parks in Japan” were selected by Parks & Open Space Association of Japan in 1989. “Urban Park” refers to a park located in a city thatis operated for the purpose of providing community residents with greenery areas and resting places.

Nakajima Park area has goodaccess to tourist spots that are
popular among travelers fromwithin the country and abroad,including a downtown area
called Susukino, Sapporo ClockTower, Oodori Park andSapporo Beer Garden.
The nearby Nakajima Park with
abundant,
lush
greeneryprovides guests with a calm
environment that is rare for a
hotel in an urban area.

Hotel Sonia Otaru

in the central area of Otaru or a nine-minute walk from Otaru Station▪ Locatedon the JR Hakodate Main Line.
with impressive exterior blending into the beautiful landscape along▪ Athehotel
Otaru Canal.
rooms are spacious with 20 m or more, and view of Otaru Canal can be▪ All
enjoyed from many of its guestrooms, mainly from twin rooms.
annex with a large, natural hot spring spa facility on the top floor opened▪ An
in December 2018.
2

Property information

Hotel Nord Otaru

Type

Resort Hotel

Address

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

Transport Access

9-minute walk from Otaru Station on JR Hakodate Main Line

Completion Date

April 1992, March 1998, November 2018

Renovation Date
Number of Guest
Rooms
Total Floor Area

From December 2016 to May 2017

Lot Area

2,604.45 m2

149 rooms
6,509.41 m2▪ Located in the central area of Otaru or a nine-minute walk from Otaru Stationon the JR Hakodate Main Line.
▪ European elegance rendered by the marble exterior blends with the Otaru
Canal below.
Guests
may use Hotel Sonia Otaru’s large, natural hot spring spa facility by▪
paying additional charges.

Property information
Type

Resort Hotel

Address

1-4-16 Ironai, Otaru-shi, Hokkaido

Transport Access

9-minute walk from Otaru Station on JR Hakodate Main Line

Completion Date

March 1996

Renovation Date
Number of Guest
Rooms
Total Floor Area

From November 2016 to April 2017

Lot Area

1,944.77 m2

98 rooms
6,047.43 m2

Otaru is one of the most famous
tourist sites in Hokkaido,
located a 32-minute ride on a
rapid train from JR Sapporo
Station. Great access to popular
tourist spots like Nikka Whisky
Yoichi Distillery as well as tothe urban area where historicalstreetscape remains.
Also known for its quainttownscape, seafood, glassworks,
music boxes, etc., Otaru can
expect tourism demand fromwithin the country and abroad.

Art Hotel Asahikawa▪ Conveniently located a five-minute drive from Asahikawa Station on the JR Hakodate/Soya Main Lines▪ A full-service hotel equipped with wedding halls, banquet halls, sauna, spa, as well as various room layouts including twin,
triple, queen, king and traditional Japanese-style rooms.
In▪ addition to a buffet-style restaurant with panoramic views of Asahikawa on the top floor, the hotel offers a variety ofrestaurants, including a brasserie serving dishes using ingredients from Hokkaido and a Japanese restaurant.
▪ Tourism demand can be expected since there are popular tourist attractions nearby, such as Asahiyama Zoo, Sounkyo
Gorge and the Asahikawa Winter Festival held in winter.

Property information
Type
Address
Transport AccessFull-Service Hotel
6-29-2 Nanajo-dori,
Asahikawa-shi, Hokkaido
15-minute walk from
Asahikawa Station on JR
Hakodate / Soya Main Line

Completion Date

October 1987

Renovation Date

From December 2017 toJanuary 2018

Number of Guest
Rooms

265 rooms

Total Floor Area

25,131.84 m2

Lot Area

4,284.18 m2

Hotel MyStays Nayoro▪ Rebranded as MyStays and reopened in September 2017
▪ Located a ten-minute walk from Nayoro Station on the JR Soya Main Line. Excellent location for both business andsightseeing in Northern Hokkaido.
Situated
80 km north of Asahikawa City, Nayoro City is famous for skiing on fine snow called “silky snow” in winter and▪
sunflower fields surrounding the city in summer.

Property information
Type
Address
Transport Access

Limited-Service Hotel
11 Minami 5-chome,
Nishisanjo, Nayoro-shi,
Hokkaido, and one other lot
10-minute walk from Nayoro
Station on JR Soya MainLine

Completion Date

November 2014

Renovation Date－

Number of Guest
Rooms

70 rooms

Total Floor Area

1,985.27 m2 (Note 1)

Lot Area

1,031.40 m2(Note 1) There is a storage room (2.00 m2) as an annex building.

Art Hotel Ishigakijima▪ A full-service hotel located a 25-minute drive from New Ishigaki Airport and a five-minute drive from the Ishigaki Port
Ferry Terminal. Suitable as a sightseeing hub on Ishigaki Island, Okinawa, a popular resort area.
▪ Renovation of guest rooms and common area under the concept of "urban resort” was completed in May 2017.
Renovation of the outdoor pool was completed in March 2019.
▪ With a large spa facility and four-bed rooms, the hotel offers rooms that accommodate a wide range of customer needs,
including needs of families and couples as well as business persons.
▪ The hotel has a spa, banquet halls, three restaurants where guests can enjoy Ishigaki beef, and a bar on the top floor withgorgeous night views over the island.

Property information
Type

Full-Service Hotel

Transport Access

554-2 Nishimaji Okawa,
Ishigaki-shi, Okinawa, andfour other lots
25-minute by car from New
Ishigaki Airport

Completion Date

January 1984

Renovation Date

From October 2016 to
May 2017

Number of Guest
Rooms

245 rooms

Total Floor Area

17,247.54 m2 (Note 1)

Lot Area

16,670.32 m2

Address(Note 1) There is a warehouse, office, and machinery room (245.34 m2) as annex buildings.

Hotel MyStays Fuji Onsen Resort▪ The first MyStays brand resort hotel opened in December 2016.
▪ Guests can enjoy views of Mt. Fuji, designated as a World Heritage Site, from more than half of the guestrooms and fromthe large, natural hot-spring spa on the top floor.
▪ The property is also a five-minute walk from Fuji-Q Highland, one of the most famous amusement parks in Japan, which isadvantage as accommodation demand can be expected from park visitors.
▪ Mostly comprised of twin rooms (120 rooms), the hotel also offers triple and four-bed rooms to accommodate demand
from families.

Property information
Type
Address

Transport AccessResort Hotel
2654 Arakura Deguchi,
Fujiyoshida-shi, Yamanashi,
and 15 other lots
5-minute walk from Fujikyu
Highland Station on Fuji
Kyuko Line, 10-minute by
car from Kawaguchiko I.C.
on Chuo Expressway

Completion Date

November 2016

Renovation Date－

Number of Guest
Rooms

159 rooms

Total Floor Area

5,498.49 m2

Lot Area

4,281.05 m2

Asset Management Report
Overview of Asset Management
1

Trends in Investment Corporation’s Operating Results
28th

29th

30th

31st

32nd

fiscal period

fiscal period

fiscal period

fiscal period

fiscal period

Jan. 1, 2017 toJul. 1, 2017 toJan. 1, 2018 toJul. 1, 2018 toJan. 1, 2019 toJun. 30, 2017

Dec. 31, 2017

Jun. 30, 2018

Dec. 31, 2018

Jun. 30, 2019

(Note 1) (JPY thousand)

9,260,917

12,647,270

13,104,841

14,451,005

27,339,670(Rental revenue – real estate)(JPY thousand)

9,260,917

11,403,236

11,122,481

13,604,224

12,153,399

Operating expenses(JPY thousand)

3,916,456

4,423,618

4,671,320

4,936,248

5,154,599(Property-related expenses)(JPY thousand)

3,518,684

3,962,183

4,136,619

4,450,676

4,490,658

Operating income(JPY thousand)

5,344,461

8,223,652

8,433,520

9,514,756

22,185,070

Ordinary income(JPY thousand)

4,702,678

7,303,702

7,722,553

8,384,676

21,240,482

Net income(JPY thousand)

4,702,073

7,303,097

7,721,948

8,384,071

21,239,877

Total assets(a) (JPY thousand)

306,421,050

371,758,254

374,512,988

455,362,796

467,931,975

(%)

10.5

21.3

0.7

21.6

2.8

(JPY thousand)

163,990,000

186,983,000

189,415,000

229,873,000

228,774,000(b) (JPY thousand)

139,062,593

(%)

5.8

181,320,466
30.4

181,523,263
0.1

221,364,900
21.9

233,046,414
5.3

Unitholders’ capital(JPY thousand)

128,984,946

168,798,455

168,798,455

211,092,540

211,092,540

Total distributions(c) (JPY thousand)

4,880,081

7,496,535

6,854,248

9,537,291

9,384,287(Note 2) (%)

102.1

100.3

88.8

110.3

44.2

(d) (Units)

3,860,824

4,793,181

4,793,181

5,666,840

5,666,840(b) / (d) (JPY) (Note 3)

36,01937,82937,87139,063

41,125

1,264

1,564

1,430

1,683

1,656

1,243
21

1,528
36

1,430
―

1,632
51

1,656
―

1.6

2.2

2.1

2.0

4.6

3.2

4.3

4.2

4.0

9.3

3.5

4.6

4.3

4.2

9.3

7.0

9.0

8.6

8.3

18.9

(%)

45.4
2.0)

48.8
3.4

48.5
0.3)

48.6
0.1

49.8
1.2

(Note 4) (JPY thousand)

8,023,607

10,008,268

9,758,373

12,192,581

11,247,273

By Period

Reporting period

Operating revenue

Operating Results(change from last period)
AssetsInterest-bearing debt
Net assets(change from last period)

Dividend
StatusDividend payout ratio
Number of investment units

Information per Unit

issued and outstanding
Net assets per unit
Distributions per unit(c) / (d) (JPY)(Distributions of earnings per unit)(JPY)(Distributions in excess of retained(JPY)

earnings per unit)
Return on assets(change over year)
Financial Measures

Return on equity(change over year)
Capital ratio(change from last period)
NOI(Net Operating Income)(Note 4) (%)(Note 4) (%)(b) / (a) (Note 4) (%)(Note 1) Consumption taxes etc. are not included in the items including operating revenues.
(Note 2) The “Dividend payout ratio” is calculated in accordance with the following formula and rounded to one decimal
place:
Dividend payout ratio = Distribution amount (Excluding distributions in excess of retained earnings) ÷ Net income × 100(Note 3) Net assets per unit are rounded to the nearest unit.

(Note 4) Figures above are calculated as below, and ratios are rounded to one decimal place. Annualized figures are shownin the parenthesis.
Return on assets = Ordinary income / (Total assets at start of reporting period + Total assets at end of reporting period)/ 2) x 100.
Return on equity = Net income for period ended June 30, 2019 / (Net assets at start of reporting period + Net assets
at end of reporting period) / 2) x 100.
Capital ratio = Net assets at end of reporting period / Total assets at end of reporting period x 100.
NOI = Rental revenue – Property-related expenses + Management contract revenue - Management contract expenses+ Depreciation for period ended June 30, 2019

2

Overview of Asset Management for the Fiscal Period Ended June 2019(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 absorption-type merger with LCP Investment Corporation (“LCP”) was implemented on February 1, 2010, INV
issued new investment units through a third-party allotment on July 29, 2011, and refinanced its debt. Calliope Godo
Kaisha (“Calliope”), an affiliate of the Fortress Investment Group LLC (“FIG” and together with Calliope and otheraffiliates of FIG, collectively the “Fortress Group”) was the main allottee, and the sponsor changed to the Fortress Group.
FIG became a subsidiary of Softbank Group Corp. (“SoftBank Group”), after SoftBank Group acquired FIG effective on
December 27, 2017 (Note 1). Calliope, an affiliate of FIG, who owned 100% of the issued shares of Consonant
Investment Management Co., Ltd., the asset manager to which INV entrusts the management of its assets (the “AssetManager”), transferred 80.0% of issued shares of the Asset Manager to Fortress CIM Holdings L.P., a subsidiary of
SoftBank Group, and 20.0% to SoftBank Group on March 29, 2018, pursuant to the basic agreement which was enteredinto as of September 7, 2017. Although FIG is no longer an indirect parent company of the Asset Manager, FIG continues
to support INV as the sponsor.
Ever since the commencement of sponsorship from the Fortress Group (Note 2), INV has been focusing its efforts on
improving the profitability of its portfolio and establishing a revenue base in order to secure stable distributions, and has
strengthened the lender formation through new borrowings and the refinancing of existing bank borrowings, thereby
creating a financial base for external growth. With this platform as a base, in June 2014, the Asset Manager revised theInvestment 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 ofsuch external growth efforts, INV's portfolio as at the end of the previous fiscal period ended December 2018 comprisedof 132 properties (66 hotels (Note 3) (Note 4), 64 residential properties and two others) with a total acquisition price of
JPY 448,362 million (Note 5). The total acquisition price of the portfolio has significantly grown by 6.2 times, comparedto May 22, 2014, which is the date immediately prior to INV’s initial investment in hotels.
Moreover, the Asset Manager revised the Investment Guidelines in July 2018. The revision was intended to establish
an investment policy regarding investments in overseas assets, and also to change the investment policy regarding
domestic hotels to focus on (i) Limited-service hotels, which feature relatively higher profit margins and potential forrevenue growth backed by increasing demand for accommodations, and (ii) Full-service and Resort hotels, which havea variety of revenue sources, including lodging, dining and goods sale, that are expected to achieve stable growth inoverall hotel revenues. Based on such change in investment policy, in July 2018, INV decided on acquisition of TK(Japanese anonymous association (tokumei kumiai)) interest in two overseas hotels, “Westin Grand Cayman Seven Mile
Beach Resort & SPA” and “Sunshine Suites Resort” (collectively, the “Cayman Hotels”) as underlying assets for the
first time ever in J-REIT history. In September 2018, INV implemented the investment in the Cayman Hotels via a
global offering of new investment units and borrowing of funds. INV intends to improve both the profitability andstability of the portfolio through such investments, including investment in the Cayman Hotels, which is expected togenerate revenue and even out the effects of seasonality in INV’s portfolio.

In the Fiscal Period ended June 30, 2019 (“Reporting Period”), INV implemented an investment structure change regarding
the Cayman Hotels on May 9, 2019 (the “Structure Change”), in response to the amendment of the Act on Special Measures
Concerning Taxation of Japan enacted on April 1, 2019. Please refer to “(d) Overview of Investment Structure Change
regarding Overseas Assets” for details of the investment structure change. In addition, INV sold two residential properties
on June 7, 2019, and June 19, 2019. As a result, INV's portfolio at the end of Reporting Period comprised of 130
properties (66 hotels (Note 3) (Note 4), 62 residential properties and two others) with a total acquisition price of JPY
418,593 million (Note 6).
(Note 1)US Eastern Standard Time

(Note 2)As of July 2011, Calliope owned 97.35% of issued shares of the Asset Manager and the investment ratio reached100% in October 2013. Calliope transferred 80.0% of issued shares to Fortress CIM Holdings L.P., a subsidiaryof SoftBank Group and 20.0% to SoftBank Group on March 29, 2018. As of the date of this document,
SoftBank Group owns 100% of issued shares of the Asset Manager directly and indirectly.

(Note 3)The preferred equity interest is counted as a hotel property, based on the use of Sheraton Grande Tokyo Bay
Hotel, the underlying asset of the preferred equity interest. The preferred equity interest (Sheraton GrandeTokyo Bay Hotel (the “preferred equity interest”)) refers to 178,458 units of preferred equity interest issued
by Kingdom Special Purpose Company (the “TMK”) (equivalent to 49.0% of the total issued and outstanding
preferred equity interest) which owns the trust beneficiary interest of the Sheraton Grande Tokyo Bay Hotel.
Moreover, INV’s investment amount of the preferred equity interest is used as the acquisition price of thepreferred equity interest, unless otherwise stated. The “underlying asset” refers to the real estate or the realestate-related assets owned by a TK operator of TK interest or a TMK relating to the preferred equity interest
which INV owns, thus the real estate or the real estate-related assets which will be the revenue source of INV.
Hereinafter the same shall apply.

(Note 4)

From September 28, 2018 (Cayman Island local time; September 29, 2018 in Japan local time), INV owned
100% of the TK interest in Seven Mile Resort Holdings Ltd. (the “Cayman SPC”) (the “Cayman Hotel TK
Interest”), a Cayman Islands special purpose company that holds leasehold interests in the Cayman Hotels as
underlying assets. However, as described in "(d) Overview of Investment Structure Change regarding
Overseas Assets" below, since May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time),
INV has directly held the leasehold interests of the Cayman Hotels. Both of the Cayman Hotel TK interestand the Cayman Hotels are counted as two properties before and after the Structure Change. Hereinafter thesame shall apply.

(Note 5)In investing in the Cayman SPC, INV initially funded USD 339,836 thousand (JPY 37,534 million), which
was an amount reasonably estimated to enable the Cayman SPC to acquire the underlying assets. However,based on the closing settlement, the Cayman SPC did not need as much capital as anticipated. Therefore,
INV received a refund of the TK investment in the amount of USD 6.8 million on December 10, 2018
(Cayman Island local time), from the Cayman SPC. INV’s investment amount to the TK interest is
calculated based on the amount reflecting such partial refund (i.e., USD 333,036 thousand). USD isconverted into JPY amount via exchange rate of USD 1 = JPY 110.45 based on the foreign exchange forward
contract executed on July 26, 2018, and implemented on September 26, 2018. Figures are rounded down to
the nearest yen. Hereinafter the same shall apply to the investment amount in the TK interest and theacquisition price of the Cayman Hotels (Note 6) upon the distribution in kind in connection with theconclusion of the TK agreement.

(Note 6)

Due to the Structure Change, the book value of the leasehold interests of the Cayman Hotels recorded by the
Cayman SPC as of May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time), when INV
succeeded the leasehold interests of the Cayman Hotels from the Cayman SPC via distribution in kind inconnection with the termination of TK agreement, is deemed as the acquisition price of the Cayman Hotels.
The book value is converted into JPY amount.

(b)Operational Environment and Performance

For the June 2019 period, the portfolio NOI (Note 1) increased by 40.5% or JPY 4,243 million to JPY 14,734 million
compared to the same period in the previous year (the June 2018 period). The hotel portfolio NOI increased by JPY
4,358 million, which is equivalent to an increase on 41.5% in portfolio NOI. While the residential portfolio saw strong
rental growth, NOI for the residential portfolio declined by JPY 75 million, which is equivalent to a decrease of 0.7%
in portfolio NOI, due to asset sales as part of INV’s asset recycling. Other portfolio assets also experienced a decline
in NOI of JPY 38 million, which is equivalent to the decrease by 0.4% of the portfolio NOI, due to the sale of assets
during the June 2018 period. The portfolio continued to maintain a high average occupancy rate (Note 2) of 98.8%
for the period.
Commentary on hotel and residential performance in the Reporting Period is described below.
The NOI (Note 1) for the Reporting Period of the 55 domestic hotels (Note 3) owned by INV increased by 1.0%
compared to the same period in the previous year (figures exclude nine domestic hotels with fixed-rent lease agreementsfrom the 64 domestic hotels owned by INV at the beginning of the June 2019 Fiscal Period, including Sheraton GrandeTokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV). The 55 domestic
hotels recorded an occupancy rate (Note 4) of 88.5% (+0.4 points YoY), ADR (Note 5) of JPY 10,388 (+2.0% YoY),
and RevPAR (Note 6) of JPY 9,190 (+2.5% YoY). Fixed rent revenues accounted for 49.2% (JPY 4,168 million) of
total hotel revenue and variable rent revenues accounted for 50.8% (JPY 4,304 million) of total hotel revenue (figures
based on the 63 domestic hotels owned as of the end of the June 2019 Fiscal Period, and excludes Sheraton GrandeTokyo Bay Hotel the preferred equity interest.)
Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort recorded an average occupancy rateof 89.3% (-0.1 points YoY), ADR of USD 416 (+16.9% YoY), and RevPAR of USD 371 (+16.7% YoY). As a resultof the Structure Change, INV recognized the following revenues in the Reporting Period; (i) the originally scheduled
TK distribution of the Cayman Hotels for the period, from September 28, 2018 (acquisition date in Cayman local time)through March 31, 2019, (ii) TK distribution of the Cayman Hotels for the period from April 1, 2019 through May 9,
2019 (the effective date of TK agreement termination), and (iii) the Cayman Hotels’ earnings and expenses from May
10, 2019 (the following day of the effective date of TK agreement termination), through June 30, 2019, as under directownership income.
In Japan, the number of inbound visitors reached a record high of 16.63 million (+4.6% YoY) for January through June
2019, continuing to grow toward government targets of 40 million inbound visitors in 2020 and 60 million inboundvisitors in 2030. Japan will host the Rugby World Cup in September through October 2019 and the Tokyo Olympic
and Paralympic Games in 2020, and these world-class events are anticipated to further increase attention on Japan andlead to more inbound tourists visiting Japan. In the Cayman Islands, expansion of the Owen Roberts International
Airport was completed on March 29, 2019. The airport expansion has massively expanded the capacity, and it can
now accommodate 2.7 million passengers annually, up from the old and overstretched capacity of 0.5 million passengers,
enabling it to bring more guests to the Cayman Hotels.
The average occupancy rate of the 64 residential properties (Note 7) achieved 96.1%, an increase of 0.6 points comparedwith the same period in the previous year. The NOI (Note 8) of the 64 residential properties for the Reporting Period
decreased by 1.3% compared with the same period in the previous year due to the sale of Royal Parks Tower MinamiSenju and Spacia Ebisu. However, the NOI increased by 1.0% for the 62 residential properties excluding such two
sold properties. Trends for rent at city-center residential properties with small-type rooms maintained a moderateincrease. Due to the positive circumstances in the macro environment, INV continues to focus on its rent increaseprogram for new leases and renewals as well as initiatives to reduce residential leasing costs based on a detailed market
analysis of each property and unit.
In the Reporting Period, INV realized a rent increase for 50.1% (based on the number of contracts) of the new residential
lease contracts for an average rent increase of 2.0% compared with the previous rent across all new leases (Note 9).

INV achieved a rent increase for 39.7% (based on the number of contracts) of contract renewals for an average rent
increase of 1.8% compared with the previous rent across all renewal leases (Note 9), while maintaining a high contract
renewal rate (Note 10) of 76.2%. Total rent for new leases and renewal leases was 1.9% higher than the previous
leases (Note 9).
The total appraisal value of 129 properties was JPY 472,263 million (1 out of the 130 properties owned by INV at theend of the Reporting Period is excluded from the appraisal calculation: Sheraton Grande Tokyo Bay Hotel (preferred
equity) for which appraisal values of such securities is not applicable). The portfolio has an unrealized gain of JPY
83,960 million (Note 11) and an unrealized gain ratio of 21.6% (Note 11). The total appraisal value of 127 properties
which were owned throughout the Reporting Period (the Cayman Hotels are excluded due to the Structure Change)
increased by 1.0% from JPY 431,200 million at the end of December 2018 period to JPY 435,593 million at the end of
the Reporting Period.
Key Performance Indicators of 55 Domestic Hotel Properties (Note 3)
June 2019 fiscal period

Year-on-year change

Occupancy Rate (Note 4)

88.5%+0.4ptADR (JPY) (Note 5)

10,388+2.0%

RevPAR (JPY) (Note 6)

9,190

+2.5%

GOP (JPY million) (Note 12)

9,091

+0.9%

Key Performance Indicators of Cayman Hotels
June 2019 fiscal period

Year-on-year change

Occupancy Rate (Note 4)89,3%-0.1ptADR (USD) (Note 5)416+16.9%

RevPAR (USD) (Note 6)371+16.7%GOP (USD) (Note 12)26,681,479+8.9%

Key Performance Indicators of 64 Residential Properties (Note 7)
June 2019 fiscal period
Occupancy Rate (Note 1)
Average Rent per Tsubo per Month(JPY) (Note 13)
NOI (JPY million) (Note 8)

Year-on-year change

96.1%+0.6pt

9,890

+1.6%

2,498

-1.3%

(Note 1)

“NOI” for the hotel properties is calculated in accordance with the following formula:
NOI ＝ Rental Revenues ‐ Property-Related Expenses + Depreciation Expenses + Dividend on the preferred
equity interest (TMK dividend) + TK distribution of the Cayman Hotels + (Management Contract Revenueof the Cayman Hotels‐Management Contract Expense)(Note 2)

“Average Occupancy Rate” for the entire portfolio and “Occupancy Rate” for the residential properties iscalculated 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.

(Note 3)Of the 64 hotels held as of the beginning of the June 2019 Fiscal Period (including the Sheraton Grande Tokyo
Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV), the following 9 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. It is assumed that all properties acquired after January 2018 by INV had been owned since
January 1, 2018. The actual results before acquisition by INV are based on the data provided by the sellers.
(Note 4) “Occupancy rate” for the hotel properties is calculated in accordance with the following formula:
Occupancy rate = total number of occupied rooms during a certain period ÷ total number of rooms available
during the same period (number of rooms x number of days)
Hereinafter the same shall apply.
(Note 5)“ADR” means average daily rate, and is calculated by dividing total room sales (excluding service fees) for acertain period by the total number of rooms sold during the same period. Hereinafter the same shall apply.

(Note 6)

“RevPAR” means revenues per available room per day, and is calculated by dividing total room sales for acertain period by total number of rooms available (number of rooms x number of days) during the same period,and is the same as the figure obtained by multiplying ADR by occupancy rates. Hereinafter the same shallapply.

(Note 7)

Based on the 64 residential properties owned as of the beginning of June 2019 Fiscal Period. In addition,
the figures for the properties acquired after January 2018 are calculated on the assumption INV has owned
those properties since January 1, 2018, using the actual figures provided by the sellers of such properties forthe period before the acquisition, for the purpose of comparison with previous year.

(Note 8)For the comparison of NOI, insurance income and related repair expenses, which are temporary items, as well
as expenses required to detach trust beneficiary interest from an integrated trust account are excluded.

(Note 9)

Increase or decrease in the sum of monthly rents on new or renewal contracts, or the total of both, comparedwith the sum of previous rents.

(Note 10) Renewal rate is calculated by the number of renewed contracts during the relevant period divided by the
number of contracts due up for renewal during the relevant period(Note 11) 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.
Unrealized gain ratio is calculated using the following formula: unrealized gain ÷ book value as of the end of
the Reporting Period.
(Note 12) “GOP” means the gross operating profit or rental revenue INV receives as rent, and is the amount remaining
after deducting costs of hotel operations (the personnel, utility and advertising expenses and other expenses)
and the management services fee to operators (if any) from the hotel’s revenues. Moreover, GOP for theSheraton Grande Tokyo Bay Hotel has been multiplied by 49%, or INV’s ownership ratio of the preferred
equity interest. Hereinafter the same shall apply.
(Note 13) “Average Rent per Tsubo per Month” is calculated by dividing the total rental revenue (including common
area charges) for each month by the sum of total leased area (tsubo) at the end of each month during therelevant period.

(c)Overview of Fund Raising
As a result of the measures described below, INV’s interest-bearing debt outstanding balance was JPY 228,774
million and the Interest-Bearing Debt ratio (Note 1) and LTV (appraisal value basis) (Note 2) were 48.9% and46.6% respectively, as of the end of the Reporting Period, with an average interest rate (Note 3) of 0.53%.
(Note 1) Interest-Bearing Debt ratio uses the calculation formula below:
Interest-Bearing Debt ratio = total outstanding interest-bearing debt (excluding short-termconsumption tax loans)/total assets x 100(Note 2) LTV (appraisal value basis) uses the calculation formula below:
LTV = total outstanding interest-bearing debt (excluding short-term consumption tax loans)/total
appraisal value (*) x 100(*) Since appraisal value for Sheraton Grande Tokyo Bay Hotel (preferred equity interest) is notavailable, the acquisition price of the preferred equity interest (JPY 17,845 million) is deemed asappraisal value of Sheraton Grande Tokyo Bay Hotel (preferred equity interest).
(Note 3)

The average interest rate (annual rate) is calculated by the weighted average based on the outstandingbalance of borrowings and rounded to two decimal places.

(i) Borrowing of Funds
INV borrowed Term Loan (I) on January 22, 2019 (total amount borrowed: JPY 4,250 million; interest rate: variableinterest rate of 1-month JPY TIBOR plus 0.30000% (by the interest swap agreement, it is fixed, in effect, at 0.37250%)
for durations of three years), which was arranged by MUFG Bank, Ltd. and Sumitomo Mitsui Trust Bank, Limited inorder to repay Term Loan (B) in the amount of JPY 4,250 million due on January 22, 2019.
On March 29, 2019, INV borrowed New Syndicate Loan (K) (total amount borrowed: JPY 11,434 million; interest rate:variable interest rate of 1-month JPY TIBOR plus 0.80000%, 1-month JPY TIBOR plus 0.50000% (by the interest swap
agreement, it is fixed, in effect, at 0.59400%), and 1-month JPY TIBOR plus 0.30000% (by the interest swap agreement,
it is fixed, in effect, at 0.36100%) for durations of ten, five and three years), which was arranged by Mizuho Bank, Ltd.
in order to repay New Syndicate Loan (F) in the amount of JPY 11,434 million due on March 30, 2019.
In New Syndicate Loan (K), INV further strengthened its lender formation by introducing five new banks, Aozora Bank,
Ltd, The Senshu Ikeda Bank, Ltd, Kiraboshi Bank, Ltd., The Tochigi Bank, Ltd. and The Nishi-Nippon City Bank, Ltd.
In addition, INV raised its first 10-year loan, lengthening the average maturity of its debt and diversifying the repayment
dates.
Furthermore, INV borrowed Term Loan (J) on June 17, 2019 (total amount borrowed: JPY 1,000 million; interest rate:variable interest rate of 1-month JPY TIBOR plus 0.30000% (by the interest swap agreement, it is fixed, in effect, at
0.34000%) for duration of three years), which was arranged by Citibank, N.A. Tokyo Branch in order to repay Term Loan
(C) in the amount of JPY 1,000 million due on June 15, 2019.
Additionally, INV borrowed Term Loan (K) on June 28, 2019 (total amount borrowed: JPY 1,000 million; interest rate:variable interest rate of 1-month JPY TIBOR plus 0.30000% (by the interest swap agreement, it is fixed, in effect, at
0.33433%) for duration of three years), which was arranged by Development Bank of Japan, Inc. in order to repay Term
Loan (D) in the amount of JPY 1,000 million due on June 30, 2019.
(ii) Prepayment of Loan
INV’s short-term consumption tax loan (Note 1) in the New Syndicate Loan (J) (in the amount of JPY 1,099 million) was
prepaid on May 31, 2019, from the consumption tax refund concerning asset acquisitions on August 2, 2018, and cash on
hand.
(Note 1) Short-term consumption tax loan is a loan which is to be repaid before the maturity date from a refund of
consumption taxes and regional consumption taxes on an acquisition of a property.

(d)Overview of Investment Structure Change regarding Overseas Assets
Since September 2018, INV has owned the Cayman Hotel TK Interest (100% interest) in Cayman SPC which holds
the Leasehold Interests (Note 1) in Cayman Hotels as underlying assets. However, on April 1, 2019, an amended Act
on Special Measures Concerning Taxation was enacted in Japan that amends the requirement that “a J-REIT must nothold 50% or more of the shares or investment in other corporations” (Note 2) by expanding the regulation to include
investments in TK. If INV continued to own 100% of the TK interests with leasehold in Cayman Hotel TK Interest,
there was a possibility that INV would fail to satisfy this new requirement, applicable from the fiscal period ending

December 2019, which is the first fiscal period of INV immediately after the effective date (April 1, 2019) of the tax
law amendment.
In response to such tax law amendment, INV implemented an investment structure change regarding the Cayman
Hotels on May 9, 2019 (Cayman Island local time), and acquired the Leasehold of the Cayman Hotels by way of a
distribution in kind after the termination of the TK agreement, and INV currently has direct ownership of Leaseholdof the Cayman Hotels and continues to operate the Cayman Hotels. INV assumed the agreements concluded
between the Cayman SPC and the hotel management SPC.
(Note 1) Rights equivalent to long-term real estate leasehold rights in Japan (the “Leasehold”). Cayman SPC also
owned some movables including FF&E in the Cayman Hotels. “FF&E” is an abbreviation for furniture,
fixtures and equipment, which are the assets necessary for hotel operation, such as furniture, fixtures, equipment
and kitchen equipment (hereinafter the same).
(Note 2) Investment corporations under the J-REIT system can deduct the amount of cash distributions in calculating
its taxable income as long as they satisfy certain conditions (conduit requirements), in order to prevent double
taxation between J-REIT and unitholders.
(e)Overview of Sale of Assets
The Asset Manager decided to sell two residential properties, Spacia Ebisu on May 17, 2019, and Royal Parks
Tower Minami-Senju on May 28, 2019, for the purpose of improving the profitability of the portfolio by replacing
the assets and stabilizing future distributions by reserving profits from sales as internal reserve, and the sales werecompleted on June 19, 2019, and June 7, 2019, respectively. The sold assets are as follows. The proceeds fromthe sales were used to fund the acquisition and a portion of the related expenses described in “6 Significant
Subsequent Events (c) Acquisition of assets.”

Property
Number

Property Name

AcquisitionPrice(million yen)

Book
Value
(millionyen)(Note 1)

Sale Price(millionyen)(Note 2)Gain onSale(millionyen)(Note 3)

Transferee

A75

Spacia Ebisu

7,010

6,422

12,200

5,633

Undisclosed(Note 4)

A105

Royal Parks Tower
Minami-Senju

21,87921,92327,700

5,484

Undisclosed(Note 5)

Total

28,88928,34539,90011,117-(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(f)CategoryofSpecified
Assets

Trust
Beneficial
Interest-

As of the date of sale.
Sale price indicates the sale price for disposed assets on the transaction agreements and does not include
adjustments for fixed asset taxes or city planning taxes or national or local consumption taxes; hereinafter the same.
Gain on sale is calculated by deducting the transfer-related cost.
The name of the transferee (an affiliate of a foreign real estate fund) is not disclosed, as the transferee’s consent
has not been obtained for disclosure.
The name of the transferee (a Japanese TMK (Tokutei Mokuteki Kaisha)) is not disclosed, as the transferee’s
consent has not been obtained for disclosure.
Amounts are rounded down to the nearest million yen.
Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period increased by JPY 12,888
million from the previous period (+89.2%) to JPY 27,339 million, net income increased by JPY 12,855 million(+153.3%) to JPY 21,239 million and unappropriated retained earnings including the retained deficit carried forwardfrom the preceding fiscal period (JPY 107 million) reached JPY 21,131 million.
INV believes that maintaining the stability of cash distributions over the medium term is one of the most importantfactors in determining the amount of distribution for a given fiscal period. With respect to the Reporting Period, INV
reserved a portion of net income increased due to the Structure Change and the sales of Spacia Ebisu and Royal Parks
Tower Minami-Senju, and aims to maintain stable distributions in the future. INV reserved JPY 11,855 million of net
income as internal reserve and decided that distribution per unit (excluding distribution in excess of retained earnings)
is JPY 1,656 and does not make distributions in excess of profit. Moreover, due to the internal reserve, the distribution
payout ratio will not be large enough to fulfill one of the tax conduit requirements (Note 1) of paying out at least 90%
of net distributable income as dividends. However, INV has tax-loss carried forward in the amount of JPY 22.6 billion(mainly arising out of disposition of assets in the December 2010 fiscal period) which is more than enough to fully
offset the taxable income. As a result, INV does not expect to be required to pay any income taxes for the Reporting
Period.
(Note 1) Investment corporations under the J-REIT system can deduct the amount of cash distributions in calculating
its taxable income as long as they satisfy certain conditions (conduit requirements), in order to prevent double
taxation between J-REIT and unitholders.

3

Changes in Total Number of Investment Units Issued and Outstanding

Changes in the number of investment units issued and outstanding and unitholders’ capital for the past 10
years up to the end of the Reporting Period are as follows.
Date

Type of issue

Total number of investment
units issued and outstanding

Unitholders’ capital (JPY)

Increase

Increase

Total

Reference

Total

February 1, 2010

Unit split

215,596

269,495-

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

Merger367,200

636,695-

19,134,417,100(Note 2)

711,597

1,348,292

6,999,979,689

26,134,396,789(Note 3)

224,887

1,573,179

2,999,992,580

29,134,389,369(Note 4)

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 5)

August 13, 2014

Third-party
allotment

55,5072,668,686

1,214,104,611

53,096,413,980(Note 6)

July 15, 2015

Public offering

500,000

3,168,686

27,970,500,000

81,066,913,980(Note 7)

August 12, 2015

Third-party
allotment

25,0003,193,686

1,398,525,000

82,465,438,980(Note 8)March 30, 2016

Public offering

459,5123,653,198

36,123,157,344

118,588,596,324(Note 9)22,626

3,675,824

1,778,675,112

120,367,271,436(Note 10)-

3,675,824

224,225,264

120,591,496,700(Note 11)

April 27, 2016

February 22, 2017

Third-party
allotment
Reversal of
allowance fortemporarydifferences
adjustment

March 13, 2017

Public offering

185,000

3,860,824

8,393,450,000

128,984,946,700(Note 12)October 12, 2017

Public offering

887,959

4,748,783

37,917,625,218

166,902,571,918(Note 13)

November 1, 2017

Third-party
allotment

44,3984,793,181

1,895,883,396

168,798,455,314(Note 14)

August 1, 2018

Public offering

909,524

5,702,705

40,280,089,388

209,078,544,702(Note 15)

August 21, 2018

Third-party
allotment

45,476

5,748,181

2,013,995,612

211,092,540,314(Note 16)

December 28, 2018

Retirement(81,341)

5,666,840-

211,092,540,314(Note 17)

(Note 1)An investment unit split of five units per one unit was conducted.

(Note 2)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, four
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.

(Note 3)New investment units were issued in a third-party allotment at a price of JPY 9,837 per unit to make repaymentof existing loan, etc.

(Note 4)

New investment units were issued in a third-party allotment at a price of JPY 13,340 per unit to make repaymentof existing loan, etc.

(Note 5)New investment units were issued in a public offering at a price of JPY 22,688 per unit (JPY 21,873 after
deducting the underwriters’ discount) to raise funds for the acquisition of new properties.

(Note 6)

New investment units were issued in a third-party allotment at a price of JPY 21,873 per unit for the purposeof cash reserve to appropriate to repayment in future borrowings.

(Note 7)

New investment units were issued in a public offering at a price of JPY 57,817 per unit (JPY 55,941 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.

(Note 8)New investment units were issued in a third-party allotment at a price of JPY 55,941 per unit for the purposeof allocation to cash reserves to be used as part of the funds for future acquisition of properties.

(Note 9)New investment units were issued in a public offering at a price of JPY 81,217 per unit (JPY 78,612 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.

(Note 10) New investment units were issued in a third-party allotment at a price of JPY 78,612 per unit for the purposeof allocation to cash reserves to be used as a part of the funds for future acquisition of specified assets.
(Note 11) INV decided at the Board of Directors' Meeting held on February 22, 2017, the reversal of allowance fortemporary difference adjustments for incorporation into unitholders' capital.
(Note 12) New investment units were issued in a public offering at a price of JPY 46,897 per unit (JPY 45,370 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 13) New investment units were issued in a public offering at a price of JPY 44,118 per unit (JPY 42,702 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 14) New investment units were issued in a third-party allotment at a price of JPY 42,702 per unit for the purposeof allocation to cash reserves to be used as part of the funds for future acquisition of specified assets.
(Note 15) New investment units were issued in a public offering at a price of JPY 45,776 per unit (JPY 44,287 after
deducting the underwriters’ discount) to raise a part of the funds for the acquisition of new properties.
(Note 16) New investment units were issued in a third-party allotment at a price of JPY 44,287 per unit for the purposeof raising a part of the funds for the acquisition of new properties.
(Note 17) INV acquired own investment units from December 13, 2018 to December 18, 2018 (on a trade date basis)through the market purchase at Tokyo Stock Exchange based on a discretionary transaction contract with asecurities company.
INV resolved the retirement of all the acquired own investment units at the Board of Directors' Meeting held
on December 25, 2018 and the acquired own investment units were retired on December 28, 2018.
The acquisition of own investment units was conducted using capital surplus, and thus there is no change tounitholders’ capital.

Trends in Trading Prices of Investment Securities
The highest and lowest prices (trading prices) in the Real Estate Investment and Trust Securities Section of
the Tokyo Securities Exchange on which the investment securities of INV are listed are as follows.
Real Estate Investment and Trust Securities Section, Tokyo Securities Exchange
PeriodClosingmonth
HighestLowest28th fiscal
periodJune
201754,80041,50029th fiscal
periodDecember
2017
50,20044,45030th fiscal
periodJune
201853,00046,65031st fiscal
periodDecember
2018
51,00044,800(Unit: JPY)
32nd fiscal
periodJune
201955,50044,3004Distribution PerformanceWith respect to distributions of earnings for the Reporting Period, INV reserved a portion of net income increased due to the
Structure Change and the disposition of Spacia Ebisu and Royal Parks Tower Minami-Senju to be utilized for maintaining
stable distributions in next period onward. Specifically, during the Reporting Period, INV reserved JPY 11,855 million of net
income as internal reserve, and decided to make distribution per unit (excluding distributions in excess of retained earnings) of
JPY 1,656 while deciding not to make distributions in excess of retained earnings. Moreover, due to the internal reserve, thedistribution payout ratio will not be large enough to fulfill one of the tax conduit requirements (Note 1) of paying out at least
90% of net distributable income as dividends. However, INV has tax-loss carried forward in the amount of JPY 22.6 billion(mainly arising out of disposition of the assets in the fiscal period ended December 2010) which is more than enough to fully
offset the taxable income. As a result, INV is not required to pay any income taxes for the Reporting Period.

(Note 1)

Investment corporations under the J-REIT system can deduct the amount of cash distributions in calculating its
taxable income as long as they satisfy certain conditions (conduit requirements), in order to prevent double taxation
between J-REIT and unitholders.
PeriodCalculated Period

Unappropriated retained
earnings(JPY thousand)Reserved profit(JPY thousand)Total cash distribution(JPY thousand)(Distribution per unit) (JPY)
Total profit distribution(JPY thousand)(Profit distribution per unit)(JPY)
Total refund of investment(JPY thousand)(Refund of investment per unit)(JPY)
Total distribution from theallowance for temporary
differences adjustment out of
total refund of investment(JPY thousand)(Distribution from theallowance for temporary
differences adjustment per unit
out of refund of investment perunit) (JPY)
Total distribution fromunitholders’ equity under the
tax laws out of the total refundof investment(JPY thousand)Distribution from unitholders’equity under the tax laws out of
refund of investment per unit
(JPY)

28th fiscal
periodJan. 1, 2017 toJun. 30, 201729th fiscal
periodJul. 1, 2017 to
Dec. 31, 201730th fiscal
periodJan. 1, 2018 toJun. 30, 2018

31st fiscal
periodJul. 1, 2018 to
Dec. 31, 2018

32nd fiscal
periodJan. 1, 2019 toJun. 30, 2019

4,708,487

7,212,580

7,610,548

9,140,372

21,131,966‐90,516‐111,399

756,300‐107,910

11,622,477

4,880,081

7,496,535

6,854,248

9,537,291

9,384,287(1,264)(1,564)(1,430)(1,683)(1,656)

4,799,004

7,323,980

6,854,248

9,248,282

9,384,287(1,243)(1,528)(1,430)(1,632)(1,656)

81,077

172,554-

289,008

-

(21)

(36)

(-)

(51)

(-)

46,329--85,002

-

(12)

(-)

(-)

(15)

(-)

34,747

172,554-204,006

-

(9)

(36)

(-)

(36)

(-)

5

Future operational policy and issues to be addressed
Outlook for the Fiscal Periods Ending December 31, 2019
The DPU for the December 2019 fiscal period is forecast to be JPY 1,725 (+2.5% YoY).
calendar year 2019 is forecast to be JPY 3,381 (+8.6% YoY), providing steady growth.

The full year DPU fora. Future operational policy and issues to be addressed
Since July 2011, INV has enhanced unitholder value by significantly increasing DPU and financial stability with theFortress Group as its sponsor. Since Fortress Group joined under the umbrella of SoftBank Group in December 2017
and SoftBank Group owns 100% of issued shares of the Asset Manager directly and indirectly as of March 29, 2018,
in addition to continued access to Fortress’ global real estate expertise, INV will seek to leverage the resources thatare expected to become available through SoftBank Group. SoftBank Group has market-leading expertise intechnology fields such as digital marketing for both mobile and desktop, online payment systems, search engine
optimization, AI and robotics. INV believes that deployment of technology into INV’s real estate assets, especially
its hotels, will enhance ongoing initiatives to improve its digital marketing, minimize labor costs and increasecustomer engagement. For example, INV plans to pursue opportunities to better manage the increased number offoreign visitors and their related online research, bookings and payments, the process in setting hotel rates andoverbooking through the use of sophisticated AI algorithms, and reduce labor costs while enhancing customer service
through the use of robotics.
In addition to pursuing synergies with SoftBank Group, going forward, INV will continue to implement various
strategies to maintain further growth and financial stability, including the following measures.







Further external growth utilizing sponsor support
Property acquisition from third parties with the aim of expanding the AUM
Property acquisitions using the proceeds from asset recycling
Further internal growth at hotel and residential properties
Diversification of funding sources through the issuance of investment corporation bonds and bylengthening the average maturity period of its debt

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

External growth strategy
New Property Acquisitions
As its basic strategy, INV will acquire properties focusing on hotels where continued growth in portfolio revenues
is anticipated and residential properties where rent increase can be achieved. Rent revenue from residential assets
and other assets as well as the fixed rent portion from hotels will contribute to more stable revenue, which was
60.4% of total revenue (Note 1). 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 in nearby areas, and leasing contract types when making investment decisions, withthe 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 properties that have mainly small-type rooms
with strong competitiveness in large cities, in which it believes it can achieve increases in rent.
INV has achieved steady external growth via the sponsor pipeline from the Fortress Group, as follows.
Properties Acquired from affiliates of the Fortress Group (as of August 31, 2019)

Date

Properties acquired

Total acquisition price

September 2012
May 2014
July 2014
February 2015

24 residential properties (Note 2)
Two hotels
18 hotels
Two hotels
11 hotels andthree residential properties
One hotel

JPY 14,043 million (Note 2)
JPY 5,435 million
JPY 39,938 million
JPY 4,911 million

July 2015
August 2015
January 2016
March 2016
June 2016
March 2017
May 2017
October 2017
February 2018
June 2018
August 2018
September 2018
July 2019
Total

Five hotels andone residential property
Four hotels andone residential property
Two hotels
Two residential properties
One hotel
Five hotels (Note 3)
Four hotels
Two hotels
Four hotels
Two hotels (Note 4)
18 hotels
112 properties(of which 81 are hotels and 31 areresidential properties)

JPY 35,258 million
JPY 5,069 million
JPY 10,207 million
JPY 66,697 million
JPY 15,900 million
JPY 24,562 million
JPY 8,000 million
JPY 57,444 million (Note 3)
JPY 12,425 million
JPY 7,325 million
JPY 47,747 million
JPY 36,783 million (Note 4)
JPY 82,646 million
JPY 474,391 million(of which hotels: JPY 422,753 million;
residential: JPY 51,638 million)

The Fortress Group manages five dedicated Japanese real estate funds, including the Fortress Japan Opportunity
Funds I, II, III and IV. The Fortress Group’s committed equity is over JPY 450 billion and the number ofproperties that the Fortress Group is invested in exceeds 3,500. In order to ensure future growth options for the
portfolio, INV entered into an MOU with affiliates of the Fortress Group that provides preferential negotiationrights with respect to the acquisition of three hotels and eight residential properties as of August 31, 2019 (see thetable below) (Note 5). In addition, by utilizing the property transaction information available through the FortressGroup and the Asset Manager’s own network, INV will continuously consider and implement the acquisitions ofproperties from third parties that will contribute to stability and growth in revenue and cash flow and an increasein DPU.
No.

Asset nameLocation

Asset type (Note 6)

No. of rooms

1

Rihga Royal Hotel Kyoto

Kyoto, Kyoto

Full-Service Hotel

489

2

Hotel MyStays Premier Narita

Narita, Chiba

Full-Service Hotel

711

3

Fusaki Beach Resort Hotel & Villas

Ishigaki, Okinawa

Resort Hotel

188

4

Gran Charm Hiroo

Shibuya-ku, Tokyo

Residential/Small Type

121

5

Gran Charm Kichijoji

Musashino, Tokyo

Residential/Small Type28

6

Green Patio Noda

Noda, Chiba

Residential/Small Type240

7

Dainichi F‐45

Urayasu, Chiba

Residential/Small Type54

8

Gran Charm Urayasu

Urayasu, Chiba

Residential/Small Type54

9Gran Charm Urayasu 5

Urayasu, Chiba

Residential/Small Type54

10Gran Charm Minami Gyotoku I

Ichikawa, Chiba

Residential/Small Type52

11

Gran Charm Minami Gyotoku II

Ichikawa, Chiba

Residential/Small Type48

(Note 1)The percentage indicates composition of rent revenue based on the actual results for the fiscal period ended

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

June 2019. Sheraton Grande Tokyo Bay Hotel (the preferred equity interest) is excluded.
Of the properties acquired from affiliates of the Fortress Group, two residential properties (Sun Terrace
Minami-Ikebukuro and Royal Parks Tower Minami-Senju) have been sold.
Sheraton Grande Tokyo Bay Hotel acquired by a special purpose company, of which INV owns the preferred
equity interest, is counted as one property and the INV’s investment amount to the preferred equity interest
is deemed to be as the acquisition price of the preferred equity interest.
The acquisition of the Cayman Hotel TK Interest is counted as acquisition of the two properties in the table
above and INV’s investment amount to the TK interest is used as the acquisition price to the Cayman SPC
for the TK interest. After the Structure Change, INV currently has direct ownership of the Leasehold of the
Cayman Hotels.
The term of validity of the MOU is from July 1, 2019, the date of execution of the updated MOU, to June 30,
2020. However, regarding the 11 properties listed above, there is no guarantee that INV will be granted an
opportunity for considering acquisition of the properties or be able to acquire the properties. INV has nopreferential negotiation rights with respect to overseas assets.
Each “Asset Type” above is as follows:
·

·
·

·

“Full-Service Hotel” refers to a hotel generally having both restaurant facilities providing breakfast,
lunch and dinner (including meals provided by reservation) and meeting facilities that can be used forbanquet services.
“Limited-Service Hotel” refers to a hotel that does not qualify as Full-Service Hotel.
“Resort Hotel” refers to a hotel located in areas where a substantial number of guests stay for sightseeingor recreational purposes and includes both full-service hotels and limited-service hotels.
With respect to a hotel that falls within the definition of both a full-service hotel and a resort hotel, wecategorize the hotel as a full-service hotel if it has substantial demand for meeting room, banquet service,wedding service or food and beverage service (including demand from non-staying guests) and as aresort hotel in all other cases. With respect to a hotel that falls within the definition of both a limitedservice hotel and a resort hotel, we categorize the hotel as a resort hotel.
“Small Type” refers to a residential property in which the majority of dwelling units are less than 30 m2.

Property Sales
While INV places priority on increasing unitholders’ value through external growth given the increased level ofactivity in the real estate trading market, it also considers the possibility of portfolio optimization upon considerationof the portfolio sector composition, geographic distribution and competitiveness of each property, as appropriate.
(ii) Strategy for internal growth(Hotels)
Of the 64 domestic hotels (Note 1) owned by INV as of the end of the Reporting Period, 55 hotels use a variable
rent scheme. In the variable rent scheme, in principle, INV receives all of gross operating profit (GOP) after
deducting payment of management fees for the hotel operator as rents. For 53 hotels of the 55 hotels, MHM andsubsidiaries of MHM have implemented sophisticated revenue management initiatives seeking to maximize
revenue through effectively taking in the accommodation demand. As a result, INV can directly enjoy the hotelrevenue upside through this variable rent scheme.
For hotels, renovation of rooms and replacement of fixtures and fittings are indispensable to maintain and increase
revenues and operate stably in a planned manner.
(Residential properties and others)
INV will continue to strengthen its collaborative ties with PM and brokers to further boost occupancy rates andearning capabilities of its properties. With respect to INV’s residential properties, while keeping in mind the lowseason in the residential rental market that occurs during the December 2019 period, INV will focus on increasing
the occupancy rates and rents for both new lease contracts and lease renewals for all 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 high tenant satisfaction.
Therefore, INV will continue to monitor current strategic plans with flexible implementation as it sees fit.
(Note 1)

Including Sheraton Grande Tokyo Bay Hotel (the preferred equity interest).

(iii) Financial strategy
In the Reporting Period, INV has started new transactions with 5 banks and further strengthened the bank formationof INV, as well as conducting borrowings for a duration of 10 years in order to diversify fund procurement sources,
lengthen the maturity of its debt and diversify the repayment dates, as described in “2 Overview of AssetManagement for the Fiscal Period Ended June 2019 (c) Overview of Fund Raising (i) Borrowing of Funds”.
Going forward, INV seeks to maximize unitholders’ value by way of further reduction of borrowing costs,
diversification of loan maturity dates and financing measures, and improvement of its credit rating.

(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
the Board 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 placea compliance committee which, chaired by such compliance officer, is in charge of deliberating on compliance withlaws, regulations and other relevant matters as well as transactions with sponsor-related parties. Compliancecommittee 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 aswell as strict examinations with respect to INV’s compliance with laws and regulations.
INV intends to continually take steps to strengthen its compliance structure.
6

Significant Subsequent Events(a) Issuance of New Investment Units
INV decided on the issuance of new investment units and secondary distribution of investment units at the Board of
Directors’ meetings held on July 1, 2019, and July 10, 2019, and INV launched its sixth Global Share Offering andseventh share offering in total since Fortress became its sponsor. The offering size and funds raised are described below.
The funds from the issuance of new units were used to procure a portion of acquisition price for 18 domestic hotels statedin “(c) Acquisition of Assets.” Payment for the issuance of new investment units and for the third-party allotment inconnection with overallotment were completed on July 18, 2019, and August 15, 2019, respectively. As a result, total
equity for INV is JPY 235,576 million, and total number of issued investment units is 6,096,840 units.
(i) Issuance of new investment units through Public Offering
Number of investment units to be offered:

409,524 investment units
Domestic public offering: 194,524 investment units
Overseas offering: 215,000 investment units

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

:
:
:
:

JPY 56,939 per unit
JPY 23,317,887,036
JPY 58,898 per unit
JPY 24,120,144,552
July 18, 2019(ii) Secondary offering of investment units (overallotment secondary offering)Number of Investment Units to be offered in thesecondary offering
Offer priceTotal offer price
Delivery date:

20,476 investment units:::

JPY 58,898 per unit
JPY 1,205,995,448
July 19, 2019(iii) Issuance of new investment units through third-party allotment
Number of investment units to be offered
Amount to be paid (issue value)
Total amount to be paid (total issue value)
Payment date
Allottee

:
:
:
:
:

20,476 investment units
JPY 56,939 per unit
JPY 1,165,882,964
August 15, 2019
Mizuho Securities Co., Ltd.

(b)Debt Financing

Along with equity finance described in “(a) Issuance of New Investment Units”, INV has decided to execute newborrowings (New Syndicate Loan (L)) on July 1, 2019 in order to fund a portion of the acquisition price of 18 domestic
hotel properties later described in “(c) Acquisition of Assets”.

LenderMizuho Bank, Ltd.,
Sumitomo Mitsui Banking Corporation,
MUFG Bank, Ltd.,
Sumitomo Mitsui Trust Bank, Limited,
Development Bank of Japan Inc.,
AEON Bank, Ltd.,
Aozora Bank, Ltd.,The Nomura Trust and Banking Co., Ltd.
Mizuho Bank, Ltd.,
Sumitomo Mitsui Banking Corporation,
MUFG Bank, Ltd.,
Sumitomo Mitsui Trust Bank, Limited,
Citibank, N.A., Tokyo Branch,
Development Bank of Japan Inc.,
AEON Bank, Ltd.,
Aozora Bank, Ltd.,The Nomura Trust and Banking Co., Ltd.
Mizuho Bank, Ltd.,
Sumitomo Mitsui Banking Corporation,
MUFG Bank, Ltd.,
Sumitomo Mitsui Trust Bank, Limited,
Citibank, N.A., Tokyo Branch,
Development Bank of Japan Inc.,
AEON Bank, Ltd.,The Nomura Trust and Banking Co., Ltd.
Mizuho Bank, Ltd.,
Sumitomo Mitsui Banking Corporation,
MUFG Bank, Ltd.,
Sumitomo Mitsui Trust Bank, Limited
Total Debt

Borrowing
Date

July 19,2019

BorrowingAmount(JPY million)

Interest Rate(annual rate)

Maturity
Date

4,942

Variableinterest rate
(Note 1)

July 16, 2025

4,943

Variableinterest rate
(Note 2)January 16,
2025

4,943

Variableinterest rate
(Note 3)

July 16,
2024

4,943

Variableinterest rate
(Note 4)January 16,
2024

4,943

Variableinterest rate
(Note 5)January16,
2023

2,686

Variableinterest rate
(Note 6)

July 18,
2020

Borrowing
MethodUnsecured/Non-guaranteed

27,400(Note 1) 1-month JPY TIBOR (Base Rate) + spread (0.70000%)(Note 2) 1-month JPY TIBOR (Base Rate) + spread (0.55000%)(Note 3) 1-month JPY TIBOR (Base Rate) + spread (0.50000%)

The interest rate for the tranche has been

substantively fixed at 0.57984% by conclusion of an interest swap agreement.
(Note 4) 1-month JPY TIBOR (Base Rate) + spread (0.45000%)

The interest rate for the tranche has been

substantively fixed at 0.52473% by conclusion of an interest swap agreement.
(Note 5) 1-month JPY TIBOR (Base Rate) + spread (0.35000%)

The interest rate for the tranche has been

substantively fixed at 0.41326% by conclusion of an interest swap agreement.
(Note 6) 1-month JPY TIBOR (Base Rate) + spread (0.20000%)(c)Acquisition of Assets
The Asset Manager decided to acquire 18 hotels as follows on July 1, 2019, and acquisition of assets has been
completed on July 19, 2019.

Property
Number

Property Name

Acquisition Price(million yen)Appraisal Value(million yen)
(Note 1)

SellerD64

Hotel MyStays Sapporo Aspen

15,54315,700Touyako Godo Kaisha

D65

Art Hotel Ishigakijima

9,731

9,830

Yaeyama Resort Hotel Tokutei
Mokuteki Kaisha

D66

Hotel MyStays Fuji Onsen Resort

9,405

9,500

Saturnia Tokutei Mokuteki Kaisha

D67

Hotel Sonia Otaru

5,930

5,990

Shirahama Tokutei Mokuteki Kaisha

D68

Hotel MyStays Kanazawa Castle

5,682

5,740

Calvis Tokutei Mokuteki Kaisha

D69

Art Hotel Niigata Station

5,524

5,580

HL Investments 2 Tokutei Mokuteki
KaishaD70

Hotel MyStays Nagoya Nishiki

5,197

5,250

Shirahama Tokutei Mokuteki Kaisha

D71

Hotel Nord Otaru

4,296

4,340

Shirahama Tokutei Mokuteki Kaisha

D72

Hotel MyStays Kagoshima Tenmonkan

3,445

3,480

Kawaguchiko Tokutei Mokuteki
KaishaD73

Art Hotel Asahikawa

3,197

3,230

Shirahama Tokutei Mokuteki Kaisha

D74

Hotel MyStays Matsuyama

3,098

3,130

Calvis Tokutei Mokuteki Kaisha

D75

Hotel MyStays Sapporo Susukino

3,059

3,090

Kawaguchiko Tokutei Mokuteki
KaishaD76

Hotel MyStays Sapporo Nakajima Park

2,118

2,140

Shirahama Tokutei Mokuteki Kaisha

D77

Hotel MyStays Sapporo Nakajima Park
Annex

1,584

1,600

Shirahama Tokutei Mokuteki Kaisha

D78

Flexstay Inn Sakuragicho

1,425

1,440

Calvis Tokutei Mokuteki Kaisha

D79

MyCUBE by MYSTAYS Asakusa
Kuramae

1,287

1,300

Calvis Tokutei Mokuteki Kaisha

D80

Hotel MyStays Kagoshima Tenmonkan
Annex

1,168

1,180

Kawaguchiko Tokutei Mokuteki
KaishaD81

Hotel MyStays Nayoro

957

967

Kawaguchiko Tokutei Mokuteki
Kaisha82,646

83,487

Total(Note 1)

Appraisal Value is based on appraisal value stated in the appraisal report by the Japan Real Estate Institute., JLL Morii Valuation& Advisory K.K., The Tanizawa Sōgō Appraisal Co., Ltd. or Daiwa Real Estate Appraisal Co., Ltd. on the valuation date of April
1, 2019.

(Reference Information)(a)Debt Financing
INV has decided to implement new borrowings (New Syndicate Loan (M)) on July 11, 2019, in order to repay a portionof New Syndicate Loan (E) in the amount of JPY 28,979 million which was due on July 16, 2019.
INV has also decided to implement new borrowings (Term Loan (L)) on July 18, 2019, in order to repay a portion of Term
Loan (E) in the amount of JPY 700 million which was due on July 20, 2019.
(i) New Syndicate Loan (M)Borrowing
Date

LenderMizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Shinsei Bank, Limited
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Shinsei Bank, Limited
Citibank, N.A., Tokyo Branch
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Shinsei Bank, Limited
Citibank, N.A., Tokyo Branch
Resona Bank, Limited.
Total Debt

BorrowingAmount(JPY million)
5,795

5,796

July 16,2019

Interest Rate(annual rate)
Variableinterest rate
(Note 1)
Variableinterest rate
(Note 2)

Maturity
Date

Borrowing
MethodJuly 16,2025
January 16,
2025

5,796

Variableinterest rate
(Note 3)

July 16,
2024

5,796

Variableinterest rate
(Note 4)January 16,
2024

5,796

Variableinterest rate
(Note 5)January 16,
2023

Unsecured/Non-guaranteed

28,979(Note 1) 1-month JPY TIBOR (Base Rate) + spread (0.70000%)(Note 2) 1-month JPY TIBOR (Base Rate) + spread (0.55000%)(Note 3) 1-month JPY TIBOR (Base Rate) + spread (0.50000%)

The interest rate for the tranche has been

substantively fixed at 0.56310% by conclusion of an interest swap agreement.
(Note 4) 1-month JPY TIBOR (Base Rate) + spread (0.45000%)

The interest rate for the tranche has been

substantively fixed at 0.49859% by conclusion of an interest swap agreement.
(Note 5) 1-month JPY TIBOR (Base Rate) + spread (0.35000%)

The interest rate for the tranche has been

substantively fixed at 0.40000% by conclusion of an interest swap agreement.

(ii) Term Loan (L)LenderTokyo Star Bank, Limited

Borrowing
Date

July 22,2019

BorrowingAmount(JPY million)

Interest Rate

Maturity

Borrowing(annual rate)

Date

MethodJuly 16,

Unsecured/2025

Non-guaranteed

Variable
700(Note 1) 1-month JPY TIBOR (Base Rate) + spread (0.70000%)interest rate
(Note 1)

Overview of the Investment Corporation
1

Overview of Investment
By Period
Results Dates
Number of issuable
investment units(Unit)
Number ofinvestment units
issued andoutstanding(Unit)
Unitholders’ capital(JPY million)
Number of total
unitholders

2

28th fiscal
periodAs of Jun. 30,
201729th fiscal
periodAs of Dec. 31,
2017

30th fiscal
periodAs of Jun. 30,
2018

31st fiscal
periodAs of Dec. 31,
2018

32nd fiscal
periodAs of Jun. 30,
201910,000,000

10,000,000

10,000,000

10,000,000

10,000,000

3,860,824

4,793,181

4,793,181

5,666,840

5,666,840

128,984

168,798

168,798

211,092

211,092

17,493

26,761

27,96035,22832,645

Notes regarding Unitholders

Major unitholders at the end of the Reporting Period are as below.
Name

Number of units held

The Master Trust Bank of Japan, Ltd.
(trust account)
Japan Trustee Services Bank, Ltd.
(trust account)
JP MORGAN BANK LUXEMBOURG
S.A. 384500
The Nomura Trust and Banking Co.,
Ltd. (investment trust account)
Trust & Custody Services Bank, Ltd.
(securities investment trust account)
STATE STREET BANK AND TRUSTCOMPANY 505001
Mizuho Trust & Banking Co., Ltd.
SSBTC CLIENT OMNIBUS
ACCOUNT
GCAS BANA LONDON US CLIENT% of total number of investment
units issued and outstanding

879,739

15.52

556,734

9.82

318,898

5.62

184,782

3.26

174,9123.08

119,963

2.11

116,716

2.05

114,140

2.01

102,769

1.81

BNYM AS AGT/CLTS 10 PERCENT

91,507

1.61

Total

2,660,160

46.94(Note) Percentages are rounded down to two decimal places.

3

Notes regarding Directors

Directors at the end of the Reporting Period are as below.

Position

Executive Director

Name

Naoki Fukuda

Hiroyuki Fujimoto
Supervisory Director
Yoshihiro Tamura

Auditor(Note)

Ernst & Young
ShinNihon LLC

Concurrent responsibilities
President and CEO,
Consonant Investment
Management Co., Ltd.
(current position)
Tax accountant,
CPA Fujimoto OfficeOutside Auditor,
BRYCEN Co., Ltd.
(current position)
Attorney,
Shiba-Daimon Law Office
Statutory Auditor,
BEQONE PARTNERS, Inc.
(current position)-

Directors’ remunerationfor operating period(JPY thousand)
-

2,400

2,400

15,800Executive and supervisory directors do not hold INV’s units either in their names or in the names of third parties.
In addition, while they may be directors of organizations not listed above, those organizations as well as those listed
above have no conflicts of interest with INV.

Determination policy for dismissal or non-reappointment of Auditor
The auditing agreement with the auditor is renewed every accounting period. Dismissals are made inaccordance with the Investment Trust Act, and in addition, non-reappointments are considered by the boardof directors of INV by comprehensively taking into account the auditing quality, auditor remuneration, andother various circumstances.

4
Asset Management Company, Asset Custody Companies, and General Administrative AgentsThe asset management company, asset custody companies, and general administrative agents at the end of
the Reporting Period are as below.
Delegation category
Name
Asset management company
Consonant Investment Management Co., Ltd.
Asset custody company
Sumitomo Mitsui Trust Bank, Limited
General administrative agent (institutional operations
Sumitomo Mitsui Trust Bank, Limited(Note 1) administration of unitholders’ registry, etc.)
General administrative agent
Consonant Investment Management Co., Ltd.
(institutional operations (Note 2))
General administrative agent
EP Consulting Services Corporation (Note 3)(accounting operations, etc.)
Mitsubishi UFJ Trust and Banking Corporation
Special account management company
Limited (Note 4) / Sumitomo Mitsui Trust
Bank, Limited (Note 5)
General administrative agent
Mizuho Bank, Ltd. / Sumitomo Mitsui(Fiscal agent pertaining to investment corporation
Banking Corporation
bonds, etc.)(Note 1) Of the administrative tasks for the INV’s institutional operations, tasks related to the mailing of general unitholders’meetings and the receipt and counting of voting forms are delegated.
(Note 2) (i) Tasks related to the running of general unitholders’ meetings for INV (excluding tasks related to the mailing ofgeneral unitholders’ meetings and the receipt and counting of voting forms), (ii) tasks related to the running of themeetings of the Board of Directors of INV, and (iii) or tasks incidental or related to that mentioned in (i) or (ii) are
delegated.
(Note 3) A decision to change the general administrative agent was made on April 25, 2019, and Sumitomo Mitsui Trust Bank,
Limited has served as the general administrative agent (accounting operations, etc.) since August 29, 2019.
(Note 4) Conducts administrative tasks related to the creation, maintenance, and disposition of transfer savings accountregisters for special accounts of unitholders of the INV before the merger (former Tokyo Growth REIT Investment
Inc.) as well as tasks related to other transfer savings account registers.
(Note 5) Conducts administrative tasks related to the creation, maintenance, and disposition of transfer savings accountregisters for special accounts of unitholders of the former LCP as well as tasks related to other transfer savings
account registers.

Status of Investment Corporation’s Assets under Management
1

Composition of INV’s Assets
Fiscal period ended December 31, 2018(as of December 31, 2018)

Type ofasset

Purpose

Geographic area
(Note 1)

Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)Real
estateHotelsGreater Tokyo
Area (Note 3)
Major regional
citiesOverseas (Note 4)

Subtotal
Total real estate
Greater Tokyo area
Major regional
Residences
citiesSubtotal
Greater Tokyo area
Real
Offices/Commercial Major regional
estate in
Facilities
citiestrust
Subtotal

HotelsGreater Tokyo area
Major regional
citiesSubtotal

Fiscal period ended June 30, 2019(as of June 30, 2019)
Percentage of
total assets(%)

Amount held
(JPY million)(Note 2)

2

0.0

2

0.0

-

-

-

-

-

-

35,8377.7

2
2
70,386

0.0
0.0
15.5

35,83935,83941,575

7.7
7.7
8.9

15,521

3.4

15,346

3.3

85,90818.9

56,921

12.2

-

-

-

-

4,866

1.1

4,825

1.0

4,866

1.1

4,825

1.0

159,13634.9

158,74533.9

132,735

29.1

131,970

28.2

291,87264.1

290,715

62.1

Total real estate in trust

382,64784.0

352,462

75.3

Preferred equity interest (Note 5)

17,856

3.9

17,856

3.8

TK interest (Note 6)

36,783

8.1--

Deposits and other assets

18,072

4.0

61,77213.2

455,362100.0

467,931100.0

Total assets (Note 7)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(382,649)(84.0)(388,302)(83.0)“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 (book value after depreciation forreal estate, leasehold and real estate in trust). The amounts held for hotels are calculated by including book valueof accompanying FF&E, in principle.
While Hotel MyStays Haneda is held as trust beneficiary interests, part of accompanying FF&E is held in kind,which falls under this category.
The Leasehold of the Cayman Hotels falls under the category of “Real estate” for “Overseas.” The leaseholdinterests are the rights equivalent to long-term real estate leasehold rights for buildings and land under the laws of
the Cayman Islands (Term: 99 years; annual lease payment: USD 1 or KYD 1). INV implemented an investment
structure change regarding “Westin Grand Cayman Seven Mile Beach Resort & Spa” and “Sunshine Suites Resort”
on May 9, 2019 (Cayman Island local time), a change from making investments based on the TK agreement todirectly owning the Leasehold of the Cayman Hotels, which are the undying assets of the TK interest.
Preferred equity interest issued by Kingdom Special Purpose Company, with the Sheraton Grande Tokyo Bay Hotelas an underlying asset (asset in trust of trust beneficiary interest acquired by Kingdom Special Purpose Company,
which is the real estate that serves as the main source of revenue for Kingdom Special Purpose Company).
TK interests of INV in the SPC in Cayman Islands which holds The Westin Grand Cayman Seven Mile Beach
Resort & Spa and Sunshine Suites Resort as underlying assets.
The figures indicated in parenthesis under “Total assets” show the amounts related to owned real estate (excluding
the amount of preferred equity securities and TK interest owned).

2

Major Properties

The overview of INV’s major properties (top 10 properties by book value) (Note 1) at the end of the Reporting
Period is as below.
Name of property

D200

Westin Grand Cayman Seven Mile Beach
Resort & Spa

Book value

Leasable area

(JPY million)

2

(m )

Leased area

Occupancy rate

Ratio of

(m2)

(%)

rental revenue(Note 2)

(Note 3)(%) (Note 4)Main use

30,011

21,528.23

21,528.23

100.0

―

Hotel

D43

Hotel MyStays Gotanda Station

26,410

10,137.88

10,137.88

100.0

3.7

Hotel

D60

Hotel MyStays Premier Akasaka

20,6038,620.69

8,620.69

100.0

3.6

Hotel

D44

Hotel Epinard Nasu

19,86337,702.33

37,702.33

100.0

4.9

Hotel

D61

Hotel MyStays Premier Sapporo Park

16,575

21,670.64

21,670.64

100.0

3.2

Hotel

D47

Hotel MyStays Premier Kanazawa

13,13013,250.03

13,250.03

100.0

2.3

Hotel

12,97913,026.99

13,026.99

100.0

2.7

Hotel

D50

Hotel MyStays Shin Osaka ConferenceCenterD51

Hotel MyStays Premier Omori

9,722

11,849.61

11,849.61

100.0

2.3

Hotel

D52

Beppu Kamenoi Hotel

8,415

19,422.08

19,422.08

100.0

3.4

Hotel

D49

Hotel MyStays Premier Hamamatsucho

8,017

6,151.93

6,151.93

100.0

2.0

Hotel

165,730

163,360.41

163,360.41

100.0

28.1

Total

(Note 1) Securities described in “6 Asset Portfolio of Securities” later in this document are excluded.
(Note 2) Leasable area of Westin Grand Cayman Seven Mile Beach Resort & Spa indicates the area subject to management
contract.
(Note 3) “Occupancy rate” is computed by dividing the leased area by leasable area, rounded to one decimal place.
(Note 4) “Ratio of rental revenue” are rounded to one decimal place. For Westin Grand Cayman Seven Mile Beach Resort &Spa, management contract revenue of JPY 503,692 thousand is recorded, but not included in the calculation of ratio ofrental revenue.

3

Asset Portfolio of Real Estate, etc.

The portfolio of the properties (real estate and trust beneficiary interest in real estate) held by INV at the endof the Reporting Period is as below.
Name of property

Location(Note 1)

A26

Nisshin Palacestage
Daitabashi

1-31-2 Izumi, Suginami-ku, Tokyo

A27

Nisshin Palacestage HigashiNagasaki

5-4-1 Nagasaki, Toshima-ku, Tokyo

A28

Growth Maison Gotanda

2-26-6 Nishi-Gotanda, Shinagawa-ku,
Tokyo

A29

Growth Maison Kameido

6-58-16 Kameido, Koto-ku, Tokyo

A30

Emerald House

3-27-18 Itabashi, Itabashi-ku, Tokyo

A32

Suncrest Shakujii-Koen

3-15-35 Takanodai, Nerima-ku, Tokyo

A33

Growth Maison ShinYokohama

3-16-2 Shin-Yokohama, Kohoku-ku,
Yokohama-shi, Kanagawa

A34

Belle Face UenoOkachimachi

1-27-5 Higashi-Ueno, Taito-ku, Tokyo

A35

Grand Rire Kameido

3-39-12 Kameido, Koto-ku, Tokyo

A37

Growth Maison Yoga

1-15-15 Okamoto, Setagaya-ku, Tokyo

A38

Route Tachikawa

3-7-6 Nishikicho, Tachikawa-shi,
Tokyo

A39

Shibuya-Honmachi Mansion

2-35-2 Honmachi, Shibuya-ku, Tokyo

A40

City Heights Kinuta

4-13-15 Kinuta, Setagaya-ku, Tokyo

A41

Acseeds Tower
Kawaguchi- Namiki

2-5-13 Namiki, Kawaguchi-shi,
Saitama

A43

College Square Machida

3-4-4 Nakamachi, Machida-shi, Tokyo

A44

Belair Meguro

1-2-15 Meguro, Meguro-ku, Tokyo

Legal form of Leasable area
asset(m2) (Note 2)
Trustbeneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest
Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest
Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)

Appraisal value
as of June 30, Book value
2019
(JPY
(JPY million)
million)(Note 3)

1,771.13

1,230

1,097

2,681.94

1,330

1,058

1,051.50

1,030

842

1,367.96

1,150

957

2,152.31

1,430

1,337

3,029.16

1,100

1,057

1,858.44

1,180

942

1,351.11

1,090

931

1,562.26

1,010

803

1,015.34

771

732

1,368.57

669

639

1,167.50664

701

1,235.93531

650

1,210.74755

526

1,047.75

540

555

557.05624

551

Name of property

Location(Note 1)

A45

Wacore Tsunashima I

2-7-47 Tarumachi, Kohoku-ku,
Yokohama-shi, Kanagawa

A46

Foros Nakamurabashi

1-6-6 Kouyama, Nerima-ku, Tokyo

A47

Growth Maison Kaijin

5-29-51 Kaijin, Funabashi-shi, Chiba

A48

College Square Machiya

7-3-1 Arakawa, Arakawa-ku, Tokyo

A51

City House Tokyo Shinbashi

6-19-1 Shinbashi, Minato-ku, Tokyo

A52

Winbell Kagurazaka

6-15 Shin-Ogawacho, Shinjuku-ku, Tokyo

A53

Nishiwaseda Cresent
Mansion3-18-9 Nishi-Waseda, Shinjuku-ku, Tokyo

A54

Lexington Square
Akebonobashi

3-8 Yochomachi, Shinjuku-ku, Tokyo

A59

Towa City Coop
Shinotsuka II

5-49-7 Higashi-Ikebukuro, Toshima-ku,
Tokyo

A61

Bichsel Musashiseki

1-22-7 Sekimachi-Kita, Nerima-ku,
Tokyo

A63

Towa City Coop Sengencho

4-338-2 Sengencho, Nishi-ku,
Yokohama-shi, Kanagawa

A64Royal Park Omachi

2-11-10 Omachi, Aoba-ku, Sendai-shi,
Miyagi

A65

Lexington Square
Haginomachi

1-15-16 Haginomachi, Miyagino-ku,
Sendai-shi, Miyagi

A66

Visconti Kakuozan

2-44 Otanacho, Chikusa-ku, Nagoya-shi,
Aichi

A71

Lexington Square Daitabashi

1-33-18 Izumi, Suginami-ku, Tokyo

A72

Lexington Square
Honjo Azumabashi

4-20-6 Higashi-Komagata, Sumida-ku,
Tokyo

A73

AMS TOWER Minami 6-Jo

2-5-15 Minami 6-Jo Nishi, Chuo-ku,
Sapporo-shi, Hokkaido

A76

Neo Prominence

3-21-5 Shimo, Kita-ku, Tokyo

A77

Invoice Shin-Kobe
Residence

3-3-8 Ikutacho, Chuo-ku, Kobe-shi,
Hyogo

A78

Cosmo Court Motomachi

3-12-20 Motomachidori, Chuo-ku, Kobeshi, Hyogo

A79

Revest Honjin

2-13 Toriidori, Nakamura-ku, Nagoyashi, Aichi

Legal form of Leasable area
asset(m2) (Note 2)
Trustbeneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest(Note 4)Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Appraisal value
as of June 30, Book value
2019
(JPY
(JPY million)
million)(Note 3)907.46519

517

815.77581

506

2,040.27514

512

871.35556

443

3,364.00

3,540

2,281

4,032.70

4,420

3,003

4,310.77

2,720

1,891

1,987.88

1,970

1,301

1,627.13

1,210

809

1,220.24

809

548

3,426.36

1,410

1,007

1,929.59

657

381

1,528.58420

274

705.75283

228

1,430.64

1,250

831

784.74651

428

4,460.56

1,270

923

3,574.70

2,160

1,601

2,773.71

1,440

1,144

2,310.49

1,120

872

1,933.80

837

599

Name of property

Location(Note 1)

A80

Revest Matsubara

3-13-12 Matsubara, Naka-ku, Nagoyashi, Aichi

A82

Alba Noritake Shinmachi

3-6-8 Noritake Shinmachi, Nishi-ku,
Nagoya-shi, Aichi

A83

Revest Meieki Minami

2-13-33 Meieki-Minami, Nakamura-ku,
Nagoya-shi, Aichi

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, Osakashi, 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, Kobeshi, 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, and othertwo 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, Osakashi, Osaka

A96

Century Park Shinkawa 1bankan

4-1-2 Shinkawacho, Minato-ku, Nagoyashi, Aichi

A97

West Avenue

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

A98

Little River Honmachibashi

1-34 Honmachibashi, Chuo-ku, Osakashi, 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

Legal form of Leasable area
asset(m2) (Note 2)
Trustbeneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Appraisal value
as of June 30, Book value
2019
(JPY
(JPY million)
million)(Note 3)

1,955.40

824

590

1,731.68768

540

1,634.60

786

530

1,554.03

741

531

2,670.66

759

510

1,428.12

664

490

701.92667

502

1,185.50597

473

1,433.35

632

456

765.18666

428

1,029.05

551

407

530.60556

385

1,020.86

455

345

789.12466

338

992.76456

322

1,477.62460

314

794.80331

310974.81400

285

761.18337

268

5,230.18

2,080

1,729

2,940.20

1,910

1,668

2,048.28

1,860

1,612

Location(Note 1)Name of property

A103

Royal Parks Momozaka

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

A104

Royal Parks Shinden

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

A106

Royal Parks Seasir MinamiSenju

3-41-7 Minami-Senju, Arakawa-ku,
Tokyo

Legal form of Leasable area
asset(m2) (Note 2)
Trustbeneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Subtotal
B17

Lexington Plaza Hachiman

3-1-50 Hachiman, Aoba-ku, Sendaishi, Miyagi

B18

AEON TOWN Sukagawa

105 Furukawa, Sukagawa-shi,
Fukushima

Trust
beneficiaryinterest
Trust
beneficiaryinterest

Subtotal
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, Shimogyoku, Kyoto-shi, Kyoto

D04

MyStays Shin-Urayasu
Conference Center

2-1-4 Akemi, Urayasu-shi, Chiba

D05

Hotel MyStays Maihama

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

D06

Hotel MyStays Premier
Dojima2-4-1 Sonezakishinchi, Kita-ku,
Osaka-shi, Osaka

D07

Hotel MyStays NagoyaSakae

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

D08

Hotel MyStays SakaisujiHonmachi

1-4-8 Awaji-machi, Chuo-ku, Osakashi, 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 FukuokaTenjin-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, Shinagawaku, Tokyo

D15

Flexstay Inn Tokiwadai

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

Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Appraisal value
as of June 30, Book value
2019
(JPY
(JPY million)
million)(Note 3)8,776.26

3,160

2,785

15,797.29

5,790

4,900

6,496.86

2,840

2,694

135,185.49

72,19756,921

8,419.15

3,690

3,028

18,440.58

2,450

1,796

26,859.73

6,140

4,825

2,585.72

5,140

2,962

3,327.38

4,580

2,530

7,241.51

11,5005,874

6,232.30

7,490

4,666

2,456.36

7,010

4,781

9,445.32

7,200

3,773

9,064.71

6,370

2,666

4,188.83

5,590

2,377

7,379.43

3,680

2,204

1,719.29

2,740

1,807

3,412.71

5,930

1,482

2,953.38

2,160

1,357

1,150.76

2,110

1,249

1,134.52

2,040

1,203

2,539.75

2,340

1,210

Name of property

Location(Note 1)

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

D20

Flexstay Inn Nakanobu P2

4-27-8 Futaba, Shinagawa-ku, TokyoD21

APA Hotel
Yokohama-Kannai

3-37-2 Sumiyoshicho, Naka-ku,
Yokohama-shi, Kanagawa

D22

Hotel MyStays
Hakodate-Goryokaku

26-17 Honcho, Hakodate-shi,
Hokkaido

D23

Flexstay Inn Shirogane

5-10-15 Shirokane, Minato-ku, Tokyo

D24

Hotel MyStays Haneda

5-1-13 Haneda, Ota-ku, Tokyo

D25

Hotel MyStays Kameido P1

6-32-1 Kameido, Koto-ku, Tokyo

D26

Hotel MyStays Ueno
Iriyaguchi

5-5-13 Higashi-Ueno, Taito-ku, Tokyo

D27

Hotel MyStays Kameido P2

6-7-8 Kameido, Koto-ku, Tokyo

D28

Hotel MyStays Shimizu

1-23 Masagocho, Shimizu-ku,
Shizuoka-shi, Shizuoka

D29

Super Hotel Shinbashi/
Karasumoriguchi

5-16-4 Shinbashi, Minato-ku, Tokyo

D30

Flexstay Inn Higashi-Jujo

2-10-2 Nakajujo, Kita-ku, Tokyo

D31

Hotel MyStays Utsunomiya

2-4-1 Higashi-Shukugo, Utsunomiyashi, Tochigi

D32

Flexstay Inn KawasakiKaizuka

1-13-2 Kaizuka, Kawasaki-ku,
Kawasaki-shi, Kanagawa

D33

Comfort Hotel Toyama

1-3-2 Takara-machi, Toyama-shi,ToyamaD34

Flexstay Inn KawasakiOgawacho

15-9 Ogawacho, Kawasaki-ku,
Kawasaki-shi, Kanagawa

D35

Flexstay Inn Ekoda

8-6 Sakaecho, Nerima-ku, Tokyo

D36

Super Hotel Tokyo-JR
Tachikawa Kitaguchi

2-21-9 Akebonocho, Tachikawa-shi,
Tokyo

D37

Super Hotel JR Uenoiriyaguchi

7-9-14 Ueno, Taito-ku, Tokyo

Legal form of Leasable area
asset(m2) (Note 2)
Trustbeneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Appraisal value
as of June 30, Book value
2019
(JPY
(JPY million)
million)(Note 3)2,089.86

2,360

1,124

4,956.66

3,450

1,143

2,673.64

1,380

718

770.56864

568

391.49416

287

6,568.51

9,950

7,752

7,961.26

3,780

2,797

1,754.06

2,480

2,095

5,400.16

8,820

7,355

4,349.67

7,850

5,397

2,247.92

3,860

3,702

2,793.99

5,120

3,603

3,559.81

2,420

2,161

1,403.89

1,890

1,594

1,714.53

1,340

1,269

11,733.23

1,910

1,230

1,190.57

1,190

919

3,305.64

1,140

927

725.60930

885

3,932.93

4,640

4,886

1,832.97

1,230

1,114

1,279.16

1,220

1,089

Name of property

Location(Note 1)

D38

Hotel MyStays Shinsaibashi

1-9-30 Nishi-Shinsaibashi, Chuo-ku,
Osaka-shi, Osaka

D39

Comfort Hotel Kurosaki

3-13-13 Kurosaki, Yahatanishi-ku,
Kitakyusyu-shi, Fukuoka

D40

Comfort Hotel Maebashi

2-18-14 Omotecho, Maebashi-shi,
Gunma

D41

Comfort Hotel TsubameSanjo

2-115 Sugoro, Sanjo-shi, Niigata

D42

Comfort Hotel Kitami

3-4 Ohdori-Nishi, Kitami-shi,
Hokkaido

D43

Hotel MyStays Gotanda
Station (Note 4)

2-6-8 Nishi-Gotanda, Shinagawa-ku,
Tokyo

D44

Hotel Epinard Nasu

1-10 Kaidoue (and 59 other landparcels), Oaza-Takakuhei, Nasumachi, Nasu-gun, Tochigi

D45

Hotel MyStays Fukuoka
Tenjin3-5-7 Tenjin, Chuo-ku, Fukuoka-shi,
Fukuoka

D46

Hotel MyStays
Hamamatsucho

1-18-14 Hamamatsucho, Minato-ku,
Tokyo

D47

Hotel MyStays PremierKanazawa

2-13-1 Hirooka, Kanazawa-shi,Ishikawa

D48

Takamatsu Tokyu REI Hotel

9-9 Hyogomachi, Takamatsu-shi,
KagawaD49

Hotel MyStays Premier
Hamamatsucho

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

D50

Hotel MyStays Shin Osaka
Conference Center

6-2-4 Nishinakashima, Yodogawa-ku,
Osaka-shi, Osaka and two other lots

D51

Hotel MyStays PremierOmori

6-11-2 Minami Oi, Shinagawa-ku,
Tokyo and 13 other lots

D52

Beppu Kamenoi Hotel

2160-1 Chuocho, Beppu-shi, Oita and12 other lots

D53

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

D54

Hotel MyStays Yokohama
Kannai

5-65, Onoe-cho, Naka-ku, Yokohamashi, Kanagawa and 3 other lots

D55

Art Hotel Joetsu

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

D56

Art Hotel Hirosaki City

1-1-2, 1-6, 1-7, 2-1, Omachi, Hirosakishi, Aomori

D57

Hotel MyStays Oita

1-32, Niagemachi Oita-shi, Oita

D58

Hotel MyStays Gotanda

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

D59

Hotel MyStays Tachikawa

1-8-14, Nishiki-cho Tachikawa-shi,Tokyo

Legal form of Leasable area
asset(m2) (Note 2)
Trustbeneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Appraisal value
as of June 30, Book value
2019
(JPY
(JPY million)
million)(Note 3)

1,942.01

3,060

3,059

3,207.60

1,220

1,074

3,660.96

1,150

1,051

3,099.90

1,070

955

3,009.50

906

795

10,137.88

26,60026,41037,702.33

23,10019,863

5,083.06

8,750

7,833

1,951.90

7,050

7,819

13,250.03

14,50013,1307,148.17

2,220

2,130

6,151.93

10,7008,017

13,026.99

13,50012,97911,849.61

10,2009,722

19,422.08

9,170

8,415

7,267.88

8,320

7,713

4,501.18

5,500

5,262

7,563.60

2,810

2,737

14,826.30

2,760

2,658

3,254.69

1,640

1,563

1,839.77

4,140

4,067

3,844.64

3,290

3,246

Name of property

Location(Note 1)

Legal form of Leasable area
asset(m2) (Note 2)

D60

Hotel MyStays Premier
Akasaka

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

D61

Hotel MyStays Premier
Sapporo Park

2-2-10, Minamikujo Nishi, Chuo-ku,
Sapporo-shi, Hokkaido

D62

Hotel MyStays Ueno East

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

D63

Hotel MyStays Midosuji
Honmachi

3-2-10, Honmachi, Chuo-ku, Osakashi, Osaka

D200

Westin Grand Cayman
Seven Mile Beach Resort &Spa

30620 Seven Mile Beach Road, Grand
Cayman, Cayman Islands

The
Leasehold21,528.23

D201

Sunshine Suites Resort

1465 Esterley Tibbetts Highway,
Grand Cayman, Cayman Islands

The
Leasehold6,723.11

Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Appraisal value
as of June 30, Book value
2019
(JPY
(JPY million)
million)(Note 3)8,620.69

23,90020,603

21,670.64

17,10016,575

4,396.02

5,390

5,255

3,429.43

5,090

4,994

30,720(USD
285,000,000)(Note 5)
5,950
(USD
55,200,000)(Note 5)30,011

5,826

Subtotal

387,578.21

393,926

326,555

Total

549,623.43

472,263

388,302(Note 1) “Location” is, in principle, based on the indicated address (jyukyohyoji), except that if the jyukyohyoji system has notbeen implemented for such property, the location is based on the land number (chiban).
(Note 2) Leasable areas of Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort indicate the areas
subject to management contract.
(Note 3) “Appraisal value as of June 30, 2019” is the value appraised or researched by Asset Research and Development Inc.,
Japan Real Estate Institute, JLL Morii Valuation & Advisory K.K., The Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real
Estate Appraisal Co., Ltd. or CBRE, Inc., in accordance with the Articles of Incorporation of INV and the regulations of
The Investment Trusts Association, Japan.
(Note 4) Individual trust beneficiary interests were integrated into three groups with other trust beneficiary interests when INV
procured funds through debt financing backed by trust assets in July 2011. As a result of disposition of assets anddetachment of trust beneficiary interest from an integrated trust account thereafter, the grouping of trust beneficiaryinterests at the end of the Reporting Period is as follows:
Group 1
Nisshin Palacestage Daitabashi, Nisshin Palacestage Higashi-Nagasaki, Growth Maison Shin-Yokohama,
Belle Face Ueno-Okachimachi, Growth Maison Yoga, Shibuya-Honmachi Mansion, and Foros Nakamurabashi.
Group 2
College Square Machida, Belair Meguro, and Wacore Tsunashima I.
Group 3
Suncrest Shakujii-Koen, Grand Rire Kameido, Acseeds Tower Kawaguchi-Namiki, Growth Maison Kaijin, andCollege Square Machiya.
(Note 4) “Appraisal value as of June 30, 2019” indicates appraisal value calculated deeming the owned portion and the floor
expansion portion as one.
(Note 5)

“Appraisal value as of June 30, 2019” is converted into JPY using the exchange rate of USD 1 = JPY 107.79, whichis the exchange rate on the closing date of the fiscal period (June 30, 2019).

Trends for the leasing operations of the properties owned by INV are as below.

Name of property

A26
A27

Nisshin Palacestage
Daitabashi
Nisshin Palacestage
Higashi- Nagasaki

31st fiscal period

32nd fiscal period(July 1, 2018 to December 31, 2018)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

1

93.0

39,267

0.3

1

91.0

38,973

0.3

1

100.0

47,028

0.3

1

91.0

47,3650.4

A28

Growth Maison Gotanda

1

100.0

27,510

0.2

1

100.0

27,6700.2

A29

Growth Maison Kameido

1

92.4

33,923

0.2

1

100.0

35,461

0.3

A30

Emerald House

1

96.9

43,591

0.3

1

99.0

49,7840.4

A32

Suncrest Shakujii-Koen

1

100.0

37,426

0.3

1

97.1

38,919

0.3

1

97.1

37,068

0.3

1

94.3

37,434

0.3

1

93.7

31,321

0.2

1

100.0

35,557

0.3

A33
A34

Growth Maison ShinYokohama
Belle Face UenoOkachimachi

A35

Grand Rire Kameido

1

100.0

26,669

0.2

1

100.0

26,6190.2

A37Growth Maison Yoga

1

100.0

22,841

0.2

1

100.0

23,3370.2

A38

Route Tachikawa

1

96.6

22,005

0.2

1

96.6

21,3680.2

A39

Shibuya-Honmachi Mansion

1

100.0

19,320

0.1

1

100.0

20,8250.2

A40City Heights Kinuta

1

83.8

17,354

0.1

1

94.6

18,121

0.1

1

94.7

25,689

0.2

1

94.7

26,0600.2

A41

Acseeds Tower KawaguchiNamiki

A43

College Square Machida

1

100.0

17,484

0.1

1

100.0

17,4840.1

A44

Belair Meguro

1

84.2

16,578

0.1

1

100.0

16,9390.1

A45

Wacore Tsunashima I

1

91.8

19,214

0.1

1

94.1

19,0090.2

A46

Foros Nakamurabashi

1

94.3

18,050

0.1

1

92.6

18,9230.2

A47

Growth Maison Kaijin

1

91.9

22,451

0.2

1

95.1

22,511

0.2

A48

College Square Machiya

1

100.0

14,706

0.1

1

100.0

14,851

0.1

A51City House Tokyo Shinbashi

1

95.4

95,901

0.7

1

95.1

96,8810.8

A52

Winbell Kagurazaka

1

97.5

107,082

0.8

1

99.0

110,474

0.9

1

98.4

75,120

0.6

1

95.7

75,040

0.6

1

95.4

51,094

0.4

1

95.6

52,195

0.4

A53
A54

Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

Name of property

A59

Towa City Coop Shinotsuka
II

31st fiscal period

32nd fiscal period(July 1, 2018 to December 31, 2018)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

1

98.7

36,515

0.3

1

98.7

36,7840.3

A61

Bichsel Musashiseki

1

95.7

23,412

0.2

1

97.1

25,491

0.2

A63

Towa City Coop Sengencho

1

94.9

60,158

0.4

1

91.8

58,8680.5

A64Royal Park Omachi

1

89.8

26,333

0.2

1

91.4

24,462

0.2

1

86.9

17,473

0.1

1

81.9

16,0050.1

A65

Lexington Square
Haginomachi

A66

Visconti Kakuozan

1

87.3

11,499

0.1

1

63.3

11,096

0.1

A71

Lexington Square Daitabashi

1

92.2

32,332

0.2

1

95.8

32,823

0.3

1

93.9

18,341

0.1

1

100.0

18,8130.2

A72

Lexington Square Honjo
Azumabashi

A73

AMS TOWER Minami 6-Jo

1

79.7

42,547

0.3

1

84.3

42,8680.4

A75

Spacia Ebisu

1

96.9

216,468

1.6--

199,141

1.6

A76

Neo Prominence

1

98.4

68,104

0.5

1

100.0

67,4090.6

A77

Invoice Shin-Kobe Residence

1

96.8

50,284

0.4

1

97.7

48,7260.4

A78

Cosmo Court Motomachi

1

100.0

36,911

0.3

1

98.7

38,756

0.3

A79

Revest Honjin

1

97.5

31,863

0.2

1

92.5

31,0550.3

A80

Revest Matsubara

1

89.4

28,231

0.2

1

93.1

28,9450.2

A82

Alba Noritake Shinmachi

1

95.8

26,537

0.2

1

96.5

26,7890.2

A83

Revest Meieki Minami

1

92.4

26,083

0.2

1

88.4

26,391

0.2

A84

Revest Heian

1

96.8

23,708

0.2

1

92.0

23,8300.2

A85

Vendir Hamaotsu Ekimae

1

88.9

32,437

0.2

1

98.8

33,716

0.3

A86

Salvo Sala

1

96.7

24,690

0.2

1

93.7

25,0450.2

A87

Excellente Kagurazaka

1

94.1

19,304

0.1

1

100.0

19,6340.2

A88

Luna Court Edobori

1

91.9

20,935

0.2

1

100.0

21,4250.2

A89

Winntage Kobe Motomachi

1

91.4

21,024

0.2

1

93.0

21,6530.2

A90

Queen's Court Fukuzumi

1

90.3

17,471

0.1

1

95.9

18,464

0.2

A91

Corp Higashinotoin

1

100.0

19,061

0.1

1

97.6

19,0840.2

A92

Belair Oimachi

1

100.0

16,256

0.1

1

96.1

16,6590.1

A93

Siete Minami-Tsukaguchi

1

100.0

17,475

0.1

1

100.0

17,6930.1

Name of property

A94
A95
A96

Prime Life Sannomiya
Isogami Koen
HERMITAGE NANBA
WEST
Century Park Shinkawa 1bankan

31st fiscal period

32nd fiscal period(July 1, 2018 to December 31, 2018)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

1

100.0

15,351

0.1

1

100.0

15,001

0.1

1

100.0

15,917

0.1

1

100.0

16,404

0.1

1

95.4

18,335

0.1

1

93.2

19,2130.2

A97West Avenue

1

82.5

12,191

0.1

1

90.0

11,8930.1

A98

Little River Honmachibashi

1

90.7

14,276

0.1

1

100.0

15,3150.1

A99

Prime Life Mikage

1

100.0

12,806

0.1

1

96.7

12,456

0.1

A100 City Court Kitaichijo

1

97.1

67,359

0.5

1

94.9

67,495

0.6

A101 Lieto Court Mukojima

1

99.0

55,585

0.4

1

100.0

57,084

0.5

A102 Lieto Court Nishi-Ojima

1

98.8

49,528

0.4

1

99.0

49,8900.4

A103 Royal Parks Momozaka

1

92.4

151,765

1.1

1

97.6

158,673

1.3

A104 Royal Parks Shinden

1

100.0

219,286

1.6

1

100.0

216,544

1.8

1

93.9

782,653

5.8--

716,057

5.9

1

96.2

115,307

0.8

1

97.1

116,981

1.0

64

95.2

3,364,532

24.7

62

96.1

3,316,459

27.3

A105
A106

Royal Parks Tower
Minami-Senju
Royal Parks Seasir MinamiSenju
Subtotal

B17

Lexington Plaza Hachiman

1

100.0

167,590

1.2

1

100.0

164,897

1.4

B18

AEON TOWN Sukagawa

1

100.0

141,782

1.0

1

100.0

141,782

1.2

Subtotal

2

100.0

309,373

2.3

2

100.0

306,680

2.5

D01

Hotel MyStays Kanda

1

100.0

123,768

0.9

1

100.0

106,282

0.9

D02

Hotel MyStays Asakusa

1

100.0

121,636

0.9

1

100.0

109,788

0.9

D03

Hotel MyStays Kyoto-Shijo

1

100.0

227,490

1.7

1

100.0

217,841

1.8

1

100.0

205,900

1.5

1

100.0

176,876

1.5

1

100.0

189,291

1.4

1

100.0

146,613

1.2

1

100.0

216,347

1.6

1

100.0

196,173

1.6

1

100.0

197,973

1.5

1

100.0

164,778

1.4

1

100.0

132,868

1.0

1

100.0

97,109

0.8

D04
D05
D06
D07
D08

MyStays Shin-Urayasu
Conference Center
Hotel MyStays Maihama
Hotel MyStays Premier
DojimaHotel MyStays NagoyaSakae
Hotel MyStays SakaisujiHonmachi

Name of property

31st fiscal period

32nd fiscal period(July 1, 2018 to December 31, 2018)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

D09

Hotel MyStays Yokohama

1

100.0

130,202

1.0

1

100.0

103,692

0.9

D10

Hotel MyStays Nippori

1

100.0

65,902

0.5

1

100.0

60,970

0.5

1

100.0

159,191

1.2

1

100.0

139,661

1.1

1

100.0

56,393

0.4

1

100.0

53,625

0.4

1

100.0

51,469

0.4

1

100.0

48,108

0.4

D11
D12
D13

Hotel MyStays FukuokaTenjin-Minami
Flexstay Inn Iidabashi
Hotel MyStays
Ueno Inaricho

D14

Flexstay Inn Shinagawa

1

100.0

49,754

0.4

1

100.0

44,9960.4

D15

Flexstay Inn Tokiwadai

1

100.0

64,484

0.5

1

100.0

57,8940.5

D16

Flexstay Inn Sugamo

1

100.0

57,828

0.4

1

100.0

59,0440.5

D17Hotel MyStays Otemae

1

100.0

78,849

0.6

1

100.0

76,527

0.6

1

100.0

37,478

0.3

1

100.0

34,9140.3

D18

Flexstay Inn Kiyosumi
Shirakawa

D19

Flexstay Inn Nakanobu P1

1

100.0

23,371

0.2

1

100.0

21,6540.2

D20

Flexstay Inn Nakanobu P2

1

100.0

10,941

0.1

1

100.0

10,592

0.1

1

100.0

235,819

1.7

1

100.0

223,810

1.8

1

100.0

152,700

1.1

1

100.0

119,306

1.0

D21
D22

APA Hotel
Yokohama-Kannai
Hotel MyStays HakodateGoryokaku

D23

Flexstay Inn Shirogane

1

100.0

58,240

0.4

1

100.0

56,8700.5

D24Hotel MyStays Haneda

1

100.0

196,075

1.4

1

100.0

188,750

1.6

D25

Hotel MyStays Kameido P1

1

100.0

196,939

1.4

1

100.0

176,106

1.4

1

100.0

97,482

0.7

1

100.0

92,2500.8

D26

Hotel MyStays Ueno
Iriyaguchi

D27

Hotel MyStays Kameido P2

1

100.0

130,200

1.0

1

100.0

118,396

1.0

D28

Hotel MyStays Shimizu

1

100.0

67,072

0.5

1

100.0

64,662

0.5

1

100.0

39,426

0.3

1

100.0

39,426

0.3

D29Super Hotel
Shinbashi/Karasumoriguchi

D30

Flexstay Inn Higashi-Jujo

1

100.0

40,795

0.3

1

100.0

39,1040.3

D31

Hotel MyStays Utsunomiya

1

100.0

93,022

0.7

1

100.0

89,549

0.7

1

100.0

33,169

0.2

1

100.0

30,876

0.3

1

100.0

35,928

0.3

1

100.0

35,928

0.3

D32
D33

Flexstay Inn KawasakiKaizuka
Comfort Hotel Toyama

Name of property

D34
D35
D36
D37

Flexstay Inn KawasakiOgawacho
Flexstay Inn Ekoda
Super Hotel Tokyo-JR
Tachikawa Kitaguchi
Super Hotel JR Uenoiriyaguchi

31st fiscal period

32nd fiscal period(July 1, 2018 to December 31, 2018)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

1

100.0

24,812

0.2

1

100.0

24,671

0.2

1

100.0

117,226

0.9

1

100.0

116,844

1.0

1

100.0

31,787

0.2

1

100.0

31,787

0.3

1

100.0

27,275

0.2

1

100.0

27,2750.2

D38

Hotel MyStays Shinsaibashi

1

100.0

63,148

0.5

1

100.0

61,202

0.5

D39

Comfort Hotel Kurosaki

1

100.0

37,894

0.3

1

100.0

37,894

0.3

D40

Comfort Hotel Maebashi

2

100.0

43,811

0.3

2

100.0

43,811

0.4

2

100.0

34,949

0.3

2

100.0

34,949

0.3

1

100.0

30,300

0.2

1

100.0

30,300

0.2

1

100.0

490,844

3.6

1

100.0

454,852

3.7

1

100.0

1,112,683

8.2

1

100.0

590,306

4.9

1

100.0

230,688

1.7

1

100.0

204,822

1.7

1

100.0

123,902

0.9

1

100.0

109,531

0.9

1

100.0

376,887

2.8

1

100.0

280,864

2.3

3

100.0

111,564

0.8

3

100.0

107,068

0.9

1

100.0

257,330

1.9

1

100.0

242,091

2.0

1

100.0

388,013

2.9

1

100.0

325,410

2.7

1

100.0

303,088

2.2

1

100.0

279,326

2.3

1

100.0

419,762

3.1

1

100.0

416,816

3.4

1

100.0

272,140

2.0

1

100.0

237,429

2.0

1

100.0

152,128

1.1

1

100.0

136,295

1.1

D41
D42
D43
D44
D45
D46
D47
D48
D49
D50
D51
D52
D53
D54

Comfort Hotel TsubameSanjo
Comfort Hotel Kitami
Hotel MyStays Gotanda
StationHotel Epinard Nasu
Hotel MyStays Fukuoka
TenjinHotel MyStays
Hamamatsucho
Hotel MyStays PremierKanazawa
Takamatsu Tokyu REI Hotel
Hotel MyStays Premier
Hamamatsucho
Hotel MyStays Shin Osaka
Conference Center
Hotel MyStays Premier
Omori
Beppu Kamenoi Hotel
Hotel MyStays Sapporo
StationHotel MyStays Yokohama
Kannai

D55

Art Hotel Joetsu

1

100.0

117,197

0.9

1

100.0

102,515

0.8

D56

Art Hotel Hirosaki City

1

100.0

139,786

1.0

1

100.0

141,110

1.2

D57

Hotel MyStays Oita

1

100.0

60,723

0.4

1

100.0

56,5760.5

D58

Hotel MyStays Gotanda

1

100.0

128,296

0.9

1

100.0

97,5850.8

Name of property

D59
D60
D61

Hotel MyStays Tachikawa
Hotel MyStays Premier
Akasaka
Hotel MyStays Premier
Sapporo Park

31st fiscal period

32nd fiscal period(July 1, 2018 to December 31, 2018)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

(January 1, 2019 to June 30, 2019)
Occupancy
RentalNumber ofrate
revenue
Ratio oftenants(at end of(during
rental(at end of
period)period)revenueperiod)
(%)
(JPY
(%)
(unit)(Note 1)
thousand)(Note 3)(Note 3)(Note 2)

1

100.0

111,170

0.8

1

100.0

89,605

0.7

1

100.0

468,926

3.4

1

100.0

438,817

3.6

1

100.0

441,019

3.2

1

100.0

384,416

3.2

D62

Hotel MyStays Ueno East

1

100.0

143,237

1.1

1

100.0

143,779

1.2

D63

Hotel MyStays Midosuji
Honmachi

1

100.0

91,700

0.7

1

100.0

80,116

0.7

Subtotal

67

100.0

9,930,318

73.0

67

100.0

8,530,259

70.2

Total

133

98.5

13,604,224

100.0

131

99.0

12,153,399

100.0(Note 1) “Occupancy rate” is calculated by dividing the leased area by leasable area.
(Note 2) “Rental revenue (during period)” indicates leasing operation revenues during the fiscal period for each property andhas been rounded down to the nearest thousand yen.
(Note 3) “Occupancy rate” and “Ratio of rental revenue” are rounded to one decimal place.

31st fiscal period

Name of property

D200
D201

Westin Grand Cayman Seven

32nd fiscal period(July 1, 2018 to December 31, 2018)(January 1, 2019 to June 30, 2019)
Management
Management
Occupancy
Occupancy
contract
Ratio ofcontract
Ratio of
Number ofrate
Number ofrate
revenue management
revenue management
tenants(at end oftenants(at end of(during
contract(during
contract(at end of
period)(at end of
period)period)revenueperiod)revenueperiod)(%)
period)
(%)
(JPY
(%)
(JPY
(%)
(unit)(Note 1)
(unit)(Note 1)
thousand)(Note 3)thousand)(Note 3)(Note 3)(Note 3)(Note 2)
(Note 2)
-

-

-

-

1

100.0

503,692

86.8

Sunshine Suites Resort

-

-

-

-

1

100.0

76,895

13.2

Total

-

-

-

-

2

100.0

580,588

100.0

Mile Beach Resort & Spa(Note 1) “Occupancy rate” is calculated using the area subject to management contract.
(Note 2) “Management contract revenue” is converted to JPY using the exchange rate at the time of the transaction.
(Note 3) “Occupancy rate” and “Ratio of management contract revenue” are rounded to one decimal place.

4

Asset Portfolio of Facilities Generating Renewable Energy, etc.

Not applicable
5

Asset Portfolio Including Rights to Operate Public Facilities, etc.

Not applicable
6 Asset Portfolio of Securities
The portfolio of the securities held by INV at the end of the Reporting Period is as below.

Name

Type

Preferred equity
securities in
Kingdom Special
Purpose Company

Quantity Book value (JPY million)(units)Unit priceAmountFair value (JPY million) Valuation gainor loss
Unit priceAmount (JPY million)

Notes

Preferred equity 178,458
securities-

17,856-

17,8561)- (Note(Note 2)--

17,856-

17,856-

Total(Note 1) Fair value of the preferred equity securities indicates the acquisition cost.
(Note 2) INV owns 178,458 units of preferred equity securities issued by Kingdom Special Purpose Company (equivalent
to 49.0% of preferred equity securities issued and outstanding after the issuance of the said preferred equity
securities), with the Sheraton Grande Tokyo Bay Hotel as an underlying asset.

7

Status of Contract Amount and Fair Value of Specified Transaction

As of June 30, 2019, the contract amount and fair value of the outstanding transaction under the specified
transaction account of INV are as follows.
(Unit: JPY thousand)Category

Transaction type, etc.

Contract amount(Note 1)
Amounts due after
one year

Fair value(Note 2)

Interest rate swap
84,074,000
51,413,000(19,845)
Receive floating rate/pay fixed rate
Currency option transaction
5,134,140
1,933,140
USD/CallNon-market(Option fees)(133,171)(42,806)(33,916)transaction
Currency option transaction
5,134,140
1,933,140
USD/Put(Option fees)(225,420)(102,873)(233,622)(Note 1) The contract amount, etc. for interest rate swap are stated based on a notional principal.
(Note 2) Estimation method for fair value
Interest rate swap
Estimated based on the price, etc. presented by the correspondent financial institutions.
Currency option
Indicates fair values of option fees, etc. presented by the correspondent financial
institutions.

8

Status of Other Assets

Real estate and trust beneficiary interests in real estate are listed together in “3 Asset Portfolio of Real
Estate, etc.” above. As of the end of this Reporting Period, there are no investments in specified assetsthat are significant investment targets for INV outside of 3 and 6 above.

9

Assets Owned Outside of Japan or the Region

Assets owned outside of Japan or the region held by INV at the end of the Reporting Period is as below.

Country nameAmount held
(JPY million)(Note 1)

Appraisal value
as of June 30, 2019 (JPY million) (Note 2)
Percentage of
total assets (%)

No. ofproperties(properties)

Japan

370,321453,438

92.5

128

The Cayman Islands

35,83736,670

7.5

2

Total

406,159

490,108

100.0

130

(Note 1)

(Note 2)

“Amount held” is from the balance sheet (book value after depreciation for real estate and trust beneficiaryinterest in real estate; and book value for preferred equity securities with real estate as underlying assets) as ofJune 30, 2019.
“Appraisal value as of June 30, 2019” indicates the real estate appraisal value as of June 30, 2019, or the researchvalue stated in the real estate research report and the appraisal value of investment securities. “Appraisal value
as of June 30, 2019” for preferred equity securities which INV holds in Japan indicates acquisition cost since
their fair value is deemed extremely difficult to value. “Appraisal value as of June 30, 2019” for assets which
INV holds in the Cayman Islands indicates the amount converted to JPY using the exchange rate of USD 1 = JPY
107.79, which is the exchange rate on the closing date of the fiscal period (June 30, 2019).

Capital Expenditures for Properties Held by INV
1Schedule for Capital Expenditures

The schedule for the principal capital expenditures for property maintenance construction, etc., as of the endof the Reporting Period for the real estate-related assets owned by INV is as follows.

Estimated cost (JPY thousand)Name of property

D18

Flexstay Inn
Koto-ku,
Kiyosumi Shirakawa Tokyo

D44 Hotel Epinard Nasu

2

LocationNasu-gun,Tochigi

Total

Payment for
the fiscal
Advanceperiod ended payments
June 30, 2019

From July 2019
To December 2019

201,400--

From July 2019
To December 2019

190,000--

PurposeScheduled time of
implementation

Conversion of
guestrooms
Work related tosubsidized projects

D09

Hotel MyStays
Yokohama

Yokohama-shi,
Renovation work
Kanagawa

From July 2019
To December 2019

170,000--

D53

Hotel MyStays
Sapporo Station

Sapporo-shi,
Hokkaido

From July 2019
To December 2019

150,000--

D51

Hotel MyStays
Premier Omori

From July 2019
Shinagawa-ku, Hot-and-chilled-water
generator replacement To December 2019Tokyo

108,000--

Conversion of
guestrooms

Capital Expenditures for the Fiscal Period Ended June 30, 2019

The principal construction work constituting capital expenditures for the real estate assets for the fiscal period
ended June 30, 2019 is as follows. Capital expenditures for the fiscal period totaled JPY 1,186,225 thousand,and together with JPY 23,655 thousand in repair costs included in this fiscal period’s expenses, construction
work totaling JPY 1,209,880 thousand was implemented.
Name of property

Location

PurposeTime of implementation

Payment(JPY thousand)Yokohama-shi,
Renovation work
Kanagawa

From January 2019
To June 2019

239,400

D44 Hotel Epinard Nasu

Nasu-gun,Tochigi

Introduction of energysaving equipment

From January 2019
To June 2019

214,332

D28

Hotel MyStays
Shimizu

Shizuoka-shi,
Shizuoka

Renovation work

From January 2019
To June 2019

119,422

D48

Takamatsu Tokyu REI
Hotel

Takamatsu-shi, Disaster prevention
Kagawaswitchboard replacement

From January 2019
To June 201920,276

Joetsu-shi,
Niigata

From January 2019
To June 201913,300

D09

Hotel MyStays
Yokohama

D55 Art Hotel Joetsu

Upgrading of air
conditioning system

579,493

Other construction
Total

1,186,225

3

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
maintenance repairs 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(Unit: JPY thousand)
28th
29th
30th
31st
32nd
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
From January 1, From July 1, 2017 From January 1, From July 1, 2018 From January 1,
2017 to June 30, to December 31, 2018 to June 30, to December 31, 2019 to June 30,
2017
2017
2018
2018
2019
1,397,286

1,397,243

1,566,108

1,611,828

1,814,515

468,145

697,444468,448

618,404

1,215,476

468,189

528,579

422,728

415,718

990,368

1,397,243

1,566,108

1,611,828

1,814,515

2,039,622(Note) The amount reserved for the relevant fiscal period includes the reserves for acquired properties, and the amountreversed includes the reserves for disposed properties.

Overview of Expenses and Liabilities
1

Statement of Operating Expenses(JPY thousand)32nd fiscal period
January 1, 2019 to June 30, 2019

31st fiscal period
July 1, 2018 to December 31, 2018

Item(a) Asset management fees

275,000

300,000(b) Asset custody fees

18,64522,233(c) Administrative services fees

52,60747,312(d) Directors’ compensation

5,200

4,800

134,119

125,217

485,572

499,564(e) Other
Total

2

Borrowing Conditions

Borrowing conditions by financial institution at the end of the Reporting Period are as below.
Type
LenderMizuho Bank, Ltd.
Short-term Sumitomo Mitsui Banking
loans
Corporation

Balance atBalance at
AverageBorrowing beginning of
end ofinterestdate
Reporting
Reportingrate
PeriodPeriod(%)(JPY thousand) (JPY thousand) (Note 1)
366,500
Aug. 2,
2018366,500-

MUFG Bank, Ltd.

366,000-

Subtotal

1,099,000-

Mizuho Bank, Ltd.

5,992,000

5,992,000

MUFG Bank, Ltd.

5,992,000

5,992,000

Sumitomo Mitsui Banking
Corporation

5,992,000

5,992,000

3,330,000

3,330,000

Shinsei Bank, Limited
Citibank, N.A., Tokyo BranchJul. 16,2015

3,000,000

3,000,000

Sumitomo Mitsui Trust Bank,
Limited

2,670,000

2,670,000

Resona Bank, Limited

1,335,000

1,335,000

MUFG Bank, Ltd.

668,000

668,000

Mizuho Bank, Ltd

5,992,000

5,992,000

5,992,000

5,992,000

5,992,000

5,992,000

Jul. 16,

3,330,000

3,330,000

2015

3,000,000

3,000,000

2,670,000

2,670,000

1,335,000

1,335,000

668,000

668,000

3,682,000

3,682,000

3,400,000-

850,000-

MUFG Bank, Ltd.
Long-term Sumitomo Mitsui Banking
loans
Corporation(Note 4)
Shinsei Bank, Limited
Citibank, N.A., Tokyo Branch
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd
Sumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.

Aug. 28,
2015
Jan. 22,
2016

Repayment Repayment
date
method Purpose

Notes

0.269

Aug. 2,
2019(Note 3) (Note 2)

Unsecured /with noguarantee

0.480

Jul. 16,2019(Note 3) (Note 2)

Unsecured /with noguarantee

0.590Jul. 16,
2020(Note 3) (Note 2)

Unsecured /with noguarantee

0.480

Aug. 28,2019(Note 3) (Note 2)

Unsecured /with noguarantee

0.343

Jan. 22,2019(Note 3) (Note 2)

Unsecured /with noguarantee

Type
LenderSumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.

Balance atBalance at
AverageBorrowing beginning of
end ofinterestdate
Reporting
Reportingrate
PeriodPeriod(%)(JPY thousand) (JPY thousand) (Note 1)
Jan. 22,2016

3,400,000

3,400,000

850,000

850,000

Mizuho Bank, Ltd

465,000-

MUFG Bank, Ltd.

1,125,000-

2,181,000-

570,000-

Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Resona Bank, Limited

570,000-

MUFG Bank, Ltd.

650,000-

2,000,000-

1,000,000-

The Bank of Fukuoka, Ltd.

333,000-

The Shizuoka Bank, Ltd.

1,270,000-

The Daishi Bank, Ltd.

1,000,000-

270,000-

Japan Post Bank Co., Ltd.
Development Bank of Japan,

Mar. 31,
2016

Inc.

The Nomura Trust andBanking Co., Limited
Mizuho Bank, Ltd

965,000

965,000

MUFG Bank, Ltd.

1,125,000

1,125,000

2,180,000

2,180,000

570,000

570,000

Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Long-term Resona Bank, Limitedloans
MUFG Bank, Ltd.
(Note 4)
Japan Post Bank Co., Ltd.

570,000

570,000

Mar. 31,

650,000

650,000

2016

2,000,000

2,000,000

The Bank of Fukuoka, Ltd.

333,000

333,000

The Shizuoka Bank, Ltd.

270,000

270,000

The Kagawa Bank, Ltd.

500,000

500,000

The Hyakugo Bank, Ltd.

1,000,000

1,000,000

270,000

270,000

Mizuho Bank, Ltd.

1,965,000

1,965,000

MUFG Bank, Ltd.

1,125,000

1,125,000

2,180,000

2,180,000

Shinsei Bank, Limited.

570,000

570,000

Resona Bank, Limited

570,000

570,000

650,000

650,000

1,333,000

1,333,000

The Nomura Trust andBanking Co., Limited

Sumitomo Mitsui Trust Bank,
Limited

MUFG Bank, Ltd.
The Bank of Fukuoka, Ltd.

Mar. 31,2016

The Shizuoka Bank, Ltd.

270,000

270,000

The Kagawa Bank, Ltd.

500,000

500,000

The Hiroshima Bank, Ltd.

1,000,000

1,000,000

270,000

270,000

1,000,000-

The Nomura Trust andBanking Co., Limited
Citibank, N.A., Tokyo Branch

Jun. 15,
2016

Repayment Repayment
date
method Purpose

Notes

0.600

Jan. 22,2021(Note 3) (Note 2)

Unsecured /with noguarantee

0.461

Mar. 30,
2019(Note 3) (Note 2)

Unsecured /with noguarantee

0.569

Mar. 30,
2020(Note 3) (Note 2)

Unsecured /with noguarantee

0.669

0.469

Mar. 30,
2021

Jun. 15,2019

Unsecured /(Note 3) (Note 2)

with noguarantee

Unsecured /(Note 3) (Note 2)

with noguarantee

Type
LenderCitibank, N.A., Tokyo Branch

Citibank, N.A., Tokyo Branch

Balance atBalance at
AverageBorrowing beginning of
end ofinterestdate
Reporting
Reportingrate
PeriodPeriod(%)(JPY thousand) (JPY thousand) (Note 1)
Jun. 15,2016
Jun. 15,
2016

Development Bank of Japan,

Jun. 30,

Inc.

2016

AEON Bank, Ltd.

Tokyo Star Bank, Limited

Tokyo Star Bank, Limited

Tokyo Star Bank, Limited

Jun. 30,
2016
Jul. 20,
2016
Jul. 20,
2016
Jul. 20,
2016

Mizuho Bank, Ltd.
Development Bank of Japan,
Inc.
Resona Bank, Limited
The Bank of Fukuoka, Ltd.

Mar. 14,The Nomura Trust and2017

Banking Co., Limited
The Towa Bank, Ltd.

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

3,000,000

700,000

1,600,000

1,700,000-

3,000,000

700,000

1,600,000

1,700,000

634,000

634,000

1,000,000

1,000,000

333,000

333,000

333,000

333,000

333,000

333,000

252,000

252,000

The Shizuoka Bank, Ltd.

200,000

200,000

The Gunma Bank, Ltd.

165,000

165,000

1,633,000

1,633,000

Long-term Mizuho Bank, Ltd.
loans
Resona Bank, Limited(Note 4) The Bank of Fukuoka, Ltd.
The Nomura Trust andBanking Co., Limited

Mar. 14,2017

333,000

333,000

333,000

333,000

333,000

333,000

The Towa Bank, Ltd.

253,000

253,000

The Shizuoka Bank, Ltd.

200,000

200,000

The Gunma Bank, Ltd.
Mizuho Bank, Ltd.

165,000

165,000

1,733,000

1,733,000

Resona Bank, Limited

333,000

333,000

The Bank of Fukuoka, Ltd.

333,000

333,000

333,000

333,000

900,000

900,000

The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.
The Towa Bank, Ltd.

Mar. 14,2017

253,000

253,000

The Shizuoka Bank, Ltd.

200,000

200,000

The Daiichi Life InsuranceCo., Ltd.

500,000

500,000

The Gunma Bank, Ltd.

165,000

165,000

0.569

0.669

0.469

0.669

0.469

0.569

0.669

0.469

Repayment Repayment
date
method Purpose

Jun. 15,
2020
Jun. 15,2021
Jun. 30,
2019
Jun. 30,
2021
Jul. 20,
2019
Jul. 20,
2020
Jul. 20,2021

Mar. 14,
2020

Notes

Unsecured /(Note 3) (Note 2)

with noguarantee
Unsecured /(Note 3) (Note 2)

with noguarantee
Unsecured /(Note 3) (Note 2)

with noguarantee
Unsecured /(Note 3) (Note 2)

with noguarantee
Unsecured /(Note 3) (Note 2)

with noguarantee
Unsecured /(Note 3) (Note 2)

with noguarantee
Unsecured /(Note 3) (Note 2)

with noguarantee

Unsecured /(Note 3) (Note 2)

with noguarantee

0.569

Mar. 14,2021(Note 3) (Note 2)

0.669

Mar. 14,2022(Note 3) (Note 2)

Unsecured /with noguarantee

Unsecured /with noguarantee

Type
LenderSumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
The Daiichi Life InsuranceCo., Ltd.

Balance atBalance at
AverageBorrowing beginning of
end ofinterestdate
Reporting
Reportingrate
PeriodPeriod(%)(JPY thousand) (JPY thousand) (Note 1)
Mar. 14,2017
May 29,2017

3,000,000

3,000,000

4,321,000

4,321,000

3,000,000

3,000,000

Shinsei Bank, Limited

355,000

355,000

Citibank, N.A., Tokyo Branch

355,000

355,000

Resona Bank, Limited

334,000

334,000

300,000

300,000

190,000

190,000

167,000

167,000

The Bank of Fukuoka, Ltd.
AEON Bank, Ltd.

Oct. 13,2017

The Nomura Trust andBanking Co., Limited
The Hiroshima Bank, Ltd.

167,000

167,000

Shinsei Bank, Limited

355,000

355,000

Citibank, N.A., Tokyo Branch

355,000

355,000

Resona Bank, Limited

333,000

333,000

300,000

300,000

190,000

190,000

167,000

167,000

The Bank of Fukuoka, Ltd.
AEON Bank, Ltd.

Oct. 13,2017

The Nomura Trust andBanking Co., Limited
The Hiroshima Bank, Ltd.

167,000

167,000

Mizuho Bank, Ltd.

500,000

500,000

Sumitomo Mitsui Trust Bank,
Limited

500,000

500,000

Sumitomo Mitsui Banking
Corporation

500,000

500,000

Shinsei Bank, Limited

355,000

355,000

Citibank, N.A., Tokyo Branch

355,000

355,000

333,000

333,000

Resona Bank, Limited
Development Bank of Japan,
Inc.

Oct. 13,2017

Long-term The Bank of Fukuoka, Ltd.
loans
AEON Bank, Ltd.
(Note 4) The Nomura Trust andBanking Co., Limited

1,500,000

1,500,000

300,000

300,000

190,000

190,000

166,000

166,000

The Hiroshima Bank, Ltd.

166,000

166,000

The Daiichi Life InsuranceCo., Ltd.

500,000

500,000

1,250,000

1,250,000

1,065,000

1,065,000

1,250,000

1,250,000

1,250,000

1,250,000

1,060,000

1,060,000

1,250,000

1,250,000

1,850,000

1,850,000

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation

Oct. 13,2017

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

Oct. 13,2017

Oct. 13,2017

1,850,000

1,850,000

Repayment Repayment
date
method Purpose

Notes

0.519

Sept. 14,2020

(Note 3) (Note 2)

Unsecured /with noguarantee

0.619

Nov. 29,2021(Note 3) (Note 2)

Unsecured /with noguarantee

0.369

Oct. 132020(Note 3) (Note 2)

Unsecured /with noguarantee

0.469

Oct. 132021(Note 3) (Note 2)

Unsecured /with noguarantee

0.669

Oct. 132022(Note 3) (Note 2)

Unsecured /with noguarantee

0.769

Oct. 132023(Note 3) (Note 2)

Unsecured /with noguarantee

0.869

Oct. 112024(Note 3) (Note 2)

Unsecured /with noguarantee

0.319

Oct. 132019(Note 3) (Note 2)

Unsecured /with noguarantee

Type
Lender
Shinsei Bank, Limited
MUFG Bank, Ltd.

Balance atBalance at
AverageBorrowing beginning of
end ofinterestdate
Reporting
Reportingrate
PeriodPeriod(%)(JPY thousand) (JPY thousand) (Note 1)
1,000,000
1,000,000
Jun. 27,0.750
2018
500,000
500,000

Mizuho Bank, Ltd.

2,442,000

2,442,000

MUFG Bank, Ltd.

2,220,000

2,220,000

1,998,000

1,998,000

Sumitomo Mitsui Banking
Corporation

Jul. 17,

Shinsei Bank, Limited

2018

1,110,000

1,110,000

1,000,000

1,000,000

890,000

890,000

Mizuho Bank, Ltd.

2,443,000

2,443,000

MUFG Bank, Ltd.

2,220,000

2,220,000

1,997,000

1,997,000

Citibank, N.A., Tokyo Branch
Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation

Jul. 17,

Shinsei Bank, Limited

2018

1,110,000

1,110,000

1,000,000

1,000,000

890,000

890,000

Mizuho Bank, Ltd.

2,442,000

2,442,000

MUFG Bank, Ltd.

2,220,000

2,220,000

1,997,000

1,997,000

Citibank, N.A., Tokyo Branch
Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation

Jul. 17,

Shinsei Bank, Limited

2018

1,110,000

1,110,000

1,000,000

1,000,000

890,000

890,000

766,000

766,000

766,000

766,000

467,000

467,000

150,000

150,000

120,000

120,000

30,00030,000AEON Bank, Ltd.

60,00060,000Mizuho Bank, Ltd.

2,521,500

2,521,500

2,521,500

2,521,500

2,133,000

2,133,000

1,000,000

1,000,000

Citibank, N.A., Tokyo Branch
Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Long-termloans(Note 4)

MUFG Bank, Ltd.
Shinsei Bank, Limited
Citibank, N.A., Tokyo BranchAug. 2,2018

The Nomura Trust andBanking Co., Limited

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

Sep. 26,

684,000

684,000

Citibank, N.A., Tokyo Branch

2018

546,000

546,000

500,000

500,000

445,000

445,000

137,000

137,000

273,000

273,000

Development Bank of Japan,
Inc.
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.

0.369

0.469

0.569

0.369

0.369

Repayment Repayment
date
method Purpose

Jun. 27
2023

Jul. 17,2021

Jul. 17,2022

Jul. 14,2023

Aug 2,
2021

Sep. 26,
2021

Notes

Unsecured /(Note 3) (Note 2)

with noguarantee

Unsecured /(Note 3) (Note 2)

with noguarantee

Unsecured /(Note 3) (Note 2)

with noguarantee

Unsecured /(Note 3) (Note 2)

with noguarantee

Unsecured /(Note 3) (Note 2)

with noguarantee

Unsecured /(Note 3) (Note 2)

with noguarantee

Type
LenderLong-termloans(Note 4)

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Citibank, N.A., Tokyo Branch
Development Bank of Japan,
Inc.
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Citibank, N.A., Tokyo Branch
Development Bank of Japan,
Inc.
Resona Bank, Limited
The Nomura Trust andBanking Co., Limited
AEON Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Resona Bank, Limited
Development Bank of Japan,
Inc.
The Bank of Fukuoka, Ltd.
The Shizuoka Bank, Ltd.
The Nomura Trust andBanking Co., Limited
The Senshu Ikeda Bank, Ltd.
Aozora Bank, Ltd.
The Nishi-Nippon City Bank,Ltd.
The Tochigi Bank, Ltd. a

Balance atBalance at
AverageBorrowing beginning of
end ofinterestdate
Reporting
Reportingrate
PeriodPeriod(%)(JPY thousand) (JPY thousand) (Note 1)
3,287,000
3,287,000

Sep. 26,
2018

Jan. 22,2019

Mar. 29,2019

Mar. 29,2019

3,287,000

3,287,000

2,600,000

2,600,000

1,000,000

1,000,000

833,000
667,000

833,000
667,000

500,000

500,000

445,000

445,000

167,000

167,000

334,000
3,287,500

334,000
3,287,500

3,287,500

3,287,500

2,600,000

2,600,000

1,000,000

1,000,000

833,000
667,000

833,000
667,000

500,000

500,000

445,000

445,000

166,000

166,000

333,000-

333,000
850,000-

3,400,000-

386,000
1,275,000-

2,100,000-

500,000
500,000-

1,000,000-

333,000
1,270,000-

270,000-

300,000
1,000,000-

1,000,000-

500,000

Repayment Repayment
date
method Purpose

0.469

Sep. 26,
2022(Note 3) (Note 2)

Unsecured /with noguarantee

0.569

Sep. 26,
2023(Note 3) (Note 2)

Unsecured /with noguarantee

0.373

Jan. 22,2022(Note 3) (Note 2)

Unsecured /with noguarantee

0.361

Mar. 29,2022(Note 3) (Note 2)

Unsecured /with noguarantee

0.594

Mar. 29,2024(Note 3) (Note 2)

Unsecured /with noguarantee(Note 3) (Note 2)

Kiraboshi Bank, Ltd.,Mar. 29,2019-

1,000,000

0.869

Mar. 29,
2029

Citibank, N.A., Tokyo Branch

Jun. 17,2019-

1,000,000

0.340

Jun. 17,2022

Development Bank of Japan,
Inc.

Jun. 28,2019-

1,000,000

0.334

Jun. 17,2022

224,774,000
225,873,000

224,774,000
224,774,000

Subtotal
Total

Notes

Unsecured /with noguarantee
Unsecured /(Note 3) (Note 2) with noguarantee
Unsecured /(Note 3) (Note 2) with noguarantee

(Note 1) Average interest rate shows the interest rate for each loan agreement as of the end of the fiscal period, rounded tothree decimal places. In regards to borrowings which interest rate swap transactions are entered into for the purposeof avoiding risk from interest rate fluctuation, interest rates reflecting the interest rate swap are shown. In regards
to borrowings repaid during the Reporting Period, the interest rate for each loan agreement as of the repayment daterounded to three decimal places is shown.
(Note 2) The funds raised through borrowings are mainly used to acquire trust beneficiary interests in real estate and to prepay
the borrowings.
(Note 3) The balance at the end of the period will be repaid in full on the repayment date.
(Note 4) Long-term loans includes current portion of long-term loans payable.

3

Investment Corporation Bonds
Status of investment corporation bonds as of the end of the Reporting Period is as follows.
Bond Series

Issue DateFirst Series Unsecured
Investment
May 25, 2018
Corporation Bonds(Note 1)
Second Series
Unsecured Investment
May 25, 2018
Corporation Bonds(Note 1)
Third Series
Unsecured Investment
October 12, 2018
Corporation Bonds(Note 1)

Balance at theBalance at the Interest Rate
beginning of the
Redemption Use of
end of the period
Redemption Date(%)
periodmethodfunds(JPY thousand)(JPY thousand)
1,000,000

1,000,000

0.400

May 25, 2023

(Note 2)

Security/
Guaranty(Note 3)
Unsecured /Unguaranteed

1,000,000

1,000,000

0.800

May 25, 2028

(Note 2)

(Note 3)2,000,000

2,000,000

0.550

October 12, 2023

(Note 2)

(Note 4)

Unsecured /Unguaranteed

Total
4,000,000
4,000,000－－－－－(Note 1) This is with pari passu conditions among specified corporate bonds.
(Note 2) The Investment Corporation Bonds may be purchased and cancelled at any time after the payment date, except for the case where the laws
and regulations or the depository otherwise stipulates.
(Note 3) The funds will be used to acquire trust beneficiary interest in real estate.
(Note 4) The funds will be used to repay borrowings.

4

Short-Term Investment Corporation Bonds

Not applicable
5

Investment Unit Options

Not applicableAcquisitions and Sales for the Fiscal Period Ended June 30, 20191

Acquisitions and Sales of Real Estate, Asset-Backed Securities, Infrastructure Assets andInfrastructure Related-Assets
Acquisition

Type of asset
Trust
beneficiaryinterest
Trust
beneficiaryinterest

Name of property

SaleGain/loss on
Acquisition
Sales priceBook value
Acquisition
sales
price
Sales date (JPY million)(JPY million)
date(JPY million)(JPY million)(Note 1)

A75

Spacia Ebisu--

June 19,201912,200

6,422

5,633

A105

Royal Parks Tower MinamiSenju--

June 7,
2019

27,70021,923

5,484

-

-

39,90028,345

11,117

Total(Note 1) Sales price does not include various costs (brokerage commissions, taxes and other public dues) required for sale ofthe property, and is the sales price indicated in the trust beneficiary interest purchase agreement.

As described in “2 Overview of Asset Management for the Fiscal Period Ended June 2019 (d) Overview of Investment Structure
Change regarding Overseas Assets” above, INV held TK interest (JPY 36,783 million after conversion to JPY using theexchange rate of USD 1 = JPY 110.45 based on the foreign exchange forward contract executed upon TK investment on July26, 2018, and implemented on September 26, 2018), backed by leaseholds, etc. of the Cayman Hotels. However, INV
terminated the TK agreement with the Cayman SPC, the operator of TK, on May 9, 2019 (Cayman Island local time), and INV
received distribution in kind such as the Leasehold of the Cayman Hotels from the Cayman SPC in line with the terminationof the TK agreement. Since the acquisition price of the Leasehold of the Cayman Hotels and others as distribution in kind
carries the book value of the Cayman Hotels as of the date of the aforementioned termination, no gain or loss arises inaccounting due to the aforementioned distribution in kind.

2

Acquisitions and Sales of Other Assets

Assets other than those described above were mostly bank deposits or bank deposits in trust.

3

Transaction Price Verifications of Specified Assets

Real Estate Transactions
Acquisitionor saleName of property

A75 Spacia Ebisu
Sale
A105

Royal Parks Tower
Minami-Senju

Sales priceCategory ofAppraisal value
Transaction(JPY million)
specified(JPY million)
date(Note 1)asset
Real estate
Trustbeneficiaryinterest

Appraiser

AppraisaldateJune 19,201912,2008,300

Japan Real Estate
Institute

April 1,
2019

June 7,
2019

27,70023,400Japan Real Estate
Institute

April 1,
2019

(Note 1) Sales price does not include various costs (brokerage commissions, taxes and other public dues) required for
acquisition of the property and is the purchase price indicated in the trust beneficiary interest purchase agreement.
(Note 2) The real estate appraisal described above is conducted by applying “Section 3: appraisals concerning prices of realestate subject to securitization” of “Real Estate Appraisal Standard.”

Other
Other transactions for which INV entrusted investigation are 6 currency option transactions from January 1,
2019 to June 30, 2019. With regard to these transactions, INV has entrusted Akasaka Audit LLC withinvestigation on comparable prices based on the Article 201, Paragraph 2 of the Investment Trust Act,
transaction dates, names of counterparties in the transactions, issues, agreed numerical values, type offinancial instruments or monetary indicators, category of put or call, strike price, exercise periods, transaction
periods and details of other over-the-counter derivative transactions, and has received the investigation report.

4Transactions with Interested Parties(1) Transactions
Not applicable(2) Commissions Paid
Not applicable
5

Transactions between the Asset Manager and Its Other Businesses

As the Asset Manager (Consonant Investment Management Co., Ltd.) does not engage in any other business,such as the type I financial instruments business and the type II financial instruments business, the building
lots and buildings transaction business, or the real estate specified joint enterprise, there are no applicabletransactions.

Financial Condition
1

Assets, Liabilities, Principal, and Profit and Loss

Please refer to Audited Financial Statements for the Fiscal Period ended June 30, 2019 (January 1, 2019 toJune 30, 2019).
2

Changes in the Calculation Method of Depreciation

Not applicable
3

Changes in the Evaluation Method of Real Estate and Infrastructure Assets, etc.

Not applicable4

Beneficiary Certificates of Investment Trusts, etc. Set Up by the Company

Not applicable
Other
1

NoticeBoard of Directors of Investment Corporation
Of the execution and amendment of the principal agreement approved by INV’s Board of Directors in theReporting Period, principal summary is as follows.

2

Approval date

Item

Summary

April 25, 2019Conclusion of generaladministrative services
agreement (accounting
operations, etc.) with
Sumitomo Mitsui Trust Bank,
LimitedA general administrative services agreement was concluded between
INV and Sumitomo Mitsui Trust Bank, Limited concerning INV’s
administrative processes involving accounts, etc., as stipulated in
Article 117, Items 5 and 6 of the Act on Investment Trusts andInvestment Corporations, with April 25, 2019, as the agreement dateand August 29, 2019, as the start date of the services.

Disclosure of Companies Owning Real Estate Overseas

Not applicable
3

Disclosure of Real Estate Owned by Companies Owning Real Estate Overseas

Not applicable
4
Risk Factors
An investment in our units involves significant risks. The principal risks with respect to investment in
Invincible Investment Corporation are as follows.
Property and Business Risks
 Any adverse conditions in the Japanese economy could adversely affect our properties.
 We may not be able to acquire properties to execute our growth and investment strategy in a mannerthat is accretive to earnings.



Our reliance on Fortress Group could have a material adverse effect on our business.
Our investment in the Cayman Islands hotels exposes it to risks inherent in investment in overseas
properties, including operational risks due to our limited experience in operating properties outsideof Japan, exposure to the economic and market conditions in the Cayman Islands and foreignexchange risk.

























Our strategy to acquire properties outside of Japan may expose us to additional risks.
As a large portion of our hotels are subject to a variable rent structure, our results of operations are
inherently more volatile than the results of properties with fixed-lease arrangemments, and we may
not be able to effectively manage our hotel portfolio due to our relatively limited operating history
in owning full service hotels and resort hotels that we may decide to acquire in greater numbers in
the future.
We may not close our anticipated or other future property acquisitions.
Increases in prevailing market interest rates, particularly following the Bank of Japan’s
announcement of a major new policy for monetary easing, would increase our interest expense andmay result in a decline in the market price of our units.
The relatively high geographic concentration of our real estate portfolio in the greater Tokyo area
and other major cities could have a material adverse effect on our business.
Competition for tenants and hotel guests may adversely affect our ability to retain our current tenants
and find new tenants, and to maintain occupancy rates and revenue.
Our domestic hotels are subject to the operating risks common to the hospitality industry, whichhave a direct effect on the variable rent component of our portfolio’s revenue.
The cyclical and seasonal nature of the hospitality industry may cause fluctuations in our operating
performance, which could have a material adverse effect on us and our variable rent revenues.
We may incur unexpected expenses, expenditure or other losses for repair or maintenance of ourproperties, and our hotels require periodic capital reinvestment for renovation.
The majority of our hotels are leased to MyStays Hotel Management or its subsidiaries, which are
owned by Fortress Group-managed funds, and subject to the risk of default under their hotel leaseagreements.
Our focus on residential properties could have a material adverse effect on our business.
We may lose rental revenues in the event of defaults by end-tenants under their lease agreements forproperties other than hotels.
Master leases may give rise to certain risks.
We may suffer large losses if any of our properties incur damage from a natural or man-made disasteror acts of violence.
We may be liable for an unforeseen loss, damage or injury suffered by a third party at our properties.
Because most of our operating expenses are largely fixed, we may suffer adverse consequences if
our rental revenues decline.
We may not be able to promptly acquire suitable properties or sell those in our portfolio on acceptableterms in response to changing economic, financial or investment conditions.
Defects relating to our properties may adversely affect our financial condition and results ofoperations.
We rely on expert appraisals and engineering, environmental and seismic reports, which are subject
to significant uncertainties.
The environmental assessments of our properties made prior to our ownership may not haveuncovered all environmental liabilities, and Japanese laws and other overseas laws subject property
owners to strict environmental liabilities.
Decreases in tenant leasehold and/or security deposits would increase our funding costs.
Any inability to obtain financing for future acquisitions, or any restrictions on our activities under
our financing arrangements, could adversely affect us.








A high LTV ratio may increase our exposure to changes in interest rates and have a material adverse
effect on our results of operations.
We may suffer impairment losses relating to our properties and may also suffer adverse tax effects
upon recognizing impairments.
The performance of Fortress Group is not an indicator or guarantee of our future results.
Our financial statements are prepared in accordance with Japanese GAAP, which differs in certain
material respects from IFRS, U.S. GAAP and generally accepted accounting principles and financial
reporting standards in other jurisdictions.
We rely on industry and market data that are subject to significant uncertainties.
We may be exposed to risks relating to investments in the operators or master lessees of ourproperties.

Management and Governance Risks
 Our success depends on the performances of service providers to which we are required to assign
various key functions.
 There are potential conflicts of interest between us and certain Fortress Group affiliates or FortressGroup-related companies including the Asset Manager, MyStays Hotel Management.
 We depend on the efforts of our executive director and key personnel of the Asset Manager.
 Unitholders have limited control over our policies.
 The Japanese regulatory authorities have tightened regulatory supervision of J-REITs and their asset
managers and their corporate governance.
 If unitholders do not exercise their voting rights, we may count their votes in favor of proposals at a
general meeting of unitholders.
Taxation Risks
 Our failure to satisfy a complex series of requirements pursuant to Japanese tax regulations would
disqualify us from certain taxation benefits and significantly reduce our distributions to ourunitholders.
 If the Japanese tax authorities disagree with the interpretations we used for prior periods, we may beforced to pay additional taxes for those periods.
 We may not be able to benefit from reductions in certain real estate taxes enjoyed by qualified JREITs.
 Changes in Japanese tax laws may significantly increase our tax burden.
 We may be subject to taxes in countries other than Japan due to our investments outside of Japanand investors may not be able to take advantage of available credits associated with such taxes.
 Our distributions may decrease due to reversals of allowance for temporary differences adjustment.
 We expect to be treated as a “passive foreign investment company” for U.S. federal income tax
purposes.
 Unitholders may become subject to U.S. Foreign Account Tax Compliance Act (FATCA)
withholding tax.
Legal and Regulatory Risks
 Our ownership rights in some of our properties may be declared invalid or limited.
 We may lose our rights in a property we own if the purchase of the property is recharacterized as asecured financing.
 Acquisition of properties for which third parties hold leasehold interests in the land and own thebuildings may subject us to various risks.
 Our leasehold interests may be terminated or may not be asserted against a third party in some cases,or our leases with our tenants could be modified.
 We currently hold interests in Sheraton Grande Tokyo Bay Hotel through, and may make further
investments in, preferred equities of a TMK (tokutei mokuteki kaisha), and illiquidity in the market











5

for such equities may limit our ability to sell our interests, and we are exposed to risks unique to thisinvestments structure.
We may hold interests in some properties through Japanese anonymous association (tokumei kumiai)agreements.
We currently hold several properties in the form of compartmentalized ownership interests (kubun
shoyu-ken) and our rights relating to such properties may be affected by the intentions of otherowners
We may acquire properties in the form of co-ownership (kyoyu) and our rights relating to suchproperties may be affected by the intentions of other owners.
Tax increases or adverse changes in applicable laws may affect our potential liabilities relating toour properties and operations.
Compliance with energy conservation regulations in Japan may adversely affect our financial results.
Our costs of complying with regulations applicable to our properties could adversely affect our
results of operations.
We own a substantial portion of our properties through trust beneficiary interests and may suffer
losses as a trust beneficiary.
The Alternative Investment Fund Managers Directive may negatively affect our ability to market
our units in the EEA and increase our compliance costs associated with the marketing of our units
in the EEA.
Our assets may be deemed to constitute “plan assets” for ERISA purposes, which may lead to therescission of certain transactions, tax or fiduciary liability and our being held in violation of ERISA
requirements.

Other

Unless there are specific statements to the contrary, monetary figures are rounded down to the nearest yen
and percentages are rounded off for unspecified values.

INVINCIBLE INVESTMENT CORPORATIONBALANCE SHEETAs of June 30, 2019
As ofJune 30,2019

December 31,
2018

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
ASSETS
Current assets:
Cash and bank deposits (Notes 6 and 18) ···················· ¥Cash and bank deposits in trust (Notes 6 and 18) ······
Accounts receivable ·····························································
Rental receivables ·································································
Deposits paid ·········································································
Prepaid expenses ··································································
Income taxes receivable························································
Consumption taxes receivable ·········································
Other ·························································································
Allowance for doubtful accounts ····································
Total current assets ·····························································
Non-current assets:
Property and equipment (Notes 7 and 8):
Buildings, at cost ···································································
Buildings and accompanying facilities, at cost ············
Tools, furniture and fixtures, at cost ·································
Construction in progress······················································
Buildings in trust, at cost ····················································
Buildings and accompanying
facilities in trust, at cost ·······················································
Structures in trust, at cost ···················································
Tools, furniture and fixtures in trust, at cost ················
Land in trust ···········································································
Construction in progress in trust ·······································
Subtotal ···················································································
Less: Accumulated depreciation ··································
Total property and equipment, net ································
Intangible assets:
Leasehold rights ····································································
Leasehold rights in trust ·····················································
Total intangible assets ·······················································
Investments and other assets:
Investment securities (Note 19 and 23)····························
Guarantee deposits ····························································
Long-term prepaid expenses ············································
Derivatives assets (Note 20) ··············································
Other ·························································································
Total investments and other assets ·······························
Total non-current assets ····················································
Deferred assets:
Investment corporation bond issuance costs ················
Total deferred assets ·····························································TOTAL ASSETS ····································································· ¥3,985,335
7,079,268
583,0122,591,368
539,442
172,912434,3260(86)¥

48,833,358
6,766,348
647,2102,758,865
371,720
483,656
168,970(148)$

453,041
62,773
6,004
25,594
3,448
4,487
1,567
-

(1)

15,385,582

60,029,983

556,916

3,192
144,380,745

19,142,244
5,111,168
1,069,418
9,817
130,105,036

177,588
47,4179,921
911,207,023

32,567,092

29,757,547

276,069

228,964
1,690,363
203,881,464
382,751,823(20,117,593)
362,634,229

227,665
1,816,296
199,037,787
14,364386,291,346(21,466,694)
364,824,652

2,112
16,8501,846,532
133
3,583,740(199,152)
3,384,587

20,015,700
20,015,700

10,637,811
12,864,608
23,502,420

98,690
119,348
218,038

54,640,213
1,700,670
708,191
216,555
22,66757,288,298
439,938,228

17,856,387
803,721
601,259
255,404
22,667
19,539,440
407,866,513

165,659
7,456
5,578
2,369
210
181,273
3,783,899

38,98538,98535,47835,478467,931,975

329
329
4,341,144

455,362,796¥$

As ofJune 30,2019

December 31,
2018

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
LIABILITIESCurrent liabilities:
Accounts payable ·····························································¥
Short-term loans payable (Note 10) ······························
Current portion of long-term loans payable(Note 10) ················································································
Accounts payable-other ·················································
Accrued expenses ····························································
Income taxes payable ······················································
Consumption taxes payable ···········································
Advances received ···························································
Deposits received ·····························································
Total current liabilities ··················································
Non-current liabilities:
Investment corporation bonds (Note 9) ····················
Long-term loans payable (Notes 10 and 18) ············
Tenant leasehold and security deposits in trust(Note 18) ··············································································
Tenant leasehold and security deposits (Note 18) ···Asset retirement obligations (Note 21) ························
Total non-current liabilities ·········································TOTAL LIABILITIES ·······················································NET ASSETS (Note 11)
Unitholders’ equity:
Unitholders’ capital ·························································
Surplus:Capital surplus ·································································
Allowance for temporary differences
Adjustment (Note 4) ······················································
Other deduction of capital surplus ···························
Total deduction of capital surplus ·····························
Capital surplus (net)·························································
Voluntary reserve
Retained earnings ····························································
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 ···············¥

431,891
1,099,000¥

511,902
-

$

4,749
-

54,745,000

51,744,000

480,044

651,992
200,203605
571,668
134,085
57,834,445

136,155
362,920605
2,764,397
454,614
26,15956,000,754

1,263
3,366
5
25,646
4,217
242
519,535

4,000,000
170,029,000

4,000,000
173,030,000

37,1091,605,250

2,009,816

1,746,941

16,206

92,525
32,107
176,163,449
233,997,895

75,54332,321
178,884,805
234,885,560

700
299
1,659,567
2,179,103

211,092,540

211,092,540

1,958,368

6,264,432

6,264,432

58,117(46,329)(131,332)(1,218)(5,194,798)(5,241,128)
1,023,303(5,398,804)(5,530,137)
734,294(50,086)(51,304)
6,812

9,140,372
10,163,675
221,256,215

21,131,966
21,866,261
232,958,801

196,047
202,859
2,161,228

108,684
108,684
221,364,900
455,362,796

87,612
87,612233,046,414
467,931,975

812
812
2,162,041
4,341,144¥

The accompanying notes are an integral part of these financial statements.

$

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF INCOME AND RETAINED EARNINGSFor the six months ended June 30, 2019
For the six months ended
June 30,2019

December 31,
2018

June 30,2019(in thousands of U.S.
dollars)(in thousands of yen)
Operating revenue
Rental revenue－real estate (Note 13) ·············································· ¥Management contract revenue (Note 14) ········································
Gain on sales of properties (Note 15) ·················································
Dividend income ·····················································································
Distribution income ················································································
Total operating revenue ·········································································
Operating expenses
Property related expenses (Note 13) ··················································
Management contract expenses (Note 14) ······································
Asset management fees ·········································································
Directors’ compensation ········································································
Asset custody fees ····················································································
Administrative service fees ···································································
Provision of allowance for doubtful accounts ································
Other ············································································································
Total operating expenses ·······································································
Operating income ·······················································································
Non-operating income
Interest income··························································································
Foreign exchange gains ·········································································
Interest on tax refund··············································································
Other ··········································································································
Total non-operating income ······························································
Non-operating expenses
Interest expenses ····················································································
Foreign exchange losses ······································································
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Loan-related costs ··················································································

13,604,224
846,780
14,451,005¥

12,153,399
580,588
11,117,983
827,477
2,660,220
27,339,670$

112,750
5,386
103,144
7,676
24,679253,638

4,450,676
275,000
5,200
18,64552,60786
134,032
4,936,248
9,514,756

4,490,658
164,376
300,000
4,800
22,23347,312148
125,069
5,154,599
22,185,070

41,661
1,524
2,783
44
206
438
1
1,160
47,820205,81782
34,46872
906
35,528

811
1,005
800
2,617

7
9
7
24

555,8118,490
2,625
407,683

5,460
312
105
32
2,876
-

Investment unit issuance costs ··························································

186,997588,555
33,648
11,405
3,506
310,089-

Other-non-operating expenses····························································

3,999
1,165,608
8,384,676

0947,206
21,240,482

0
8,787
197,054-

115,319
115,319

1,069
1,069

8,384,676

115,319
115,319
21,240,482

1,069
1,069
197,054605
605
8,384,071
756,300
9,140,372

605
605
21,239,877(107,910)
21,131,966

5
5
197,048(1,001)
196,047

Total non-operating expenses ···························································
Ordinary income ·······················································································
Extraordinary income
Subsidy income························································································
Total extraordinary income ·······························································
Extraordinary losses
Loss on reduction entry of non-current assets ·······························
Total extraordinary losses····································································
Income before income taxes ·································································
Income taxes (Note 16):
Current ···································································································
Total income taxes ·············································································Net income ··································································································
Retained earnings / losses brought forward ······························Unappropriated retained earnings / losses (Note 12)······················ ¥¥The accompanying notes are an integral part of these financial statements.

$

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CHANGES IN NET ASSETSFor the six months ended June 30, 2019
Unitholders' equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders'
capitalCapital surplus

Allowance fortemporarydifferences
adjustment¥¥

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of yen)
Balance as of July 1, 2018 ································································ ¥168,798,455

6,264,432(46,329)¥(1,194,818)¥(1,241,148)¥

5,023,283

Changes during the period ··························································
Issuance of new investment units ··············································

42,294,085

Distributions from surplus ·························································
Acquisition of own investment units ·······································
Cancellation of own investment units ······································(3,999,980)(3,999,980)(3,999,980)

Net income ·························································································
Changes other than unitholders’ equity(net) ·························
Total changes during the period ················································

42,294,085

Balance as of December 31, 2018 ················································ ¥211,092,540¥-

6,264,432¥(46,329)(3,999,980)¥(5,194,798)(3,999,980)¥(3,999,980)(5,241,128)¥

1,023,303

Changes during the period ··························································
Distributions from surplus ··························································
Distributions in excess of retained earnings from

(85,002)

allowance for temporary differences adjustment ················
Other distributions in excess of retained earnings ···············(204,006)(85,002)(85,002)(204,006)(204,006)

Net income ·······················································································
Changes other than unitholders’ equity(net) ·························
Total changes during the period ················································-

Balance as of June 30, 2019 ··························································· ¥211,092,540¥(85,002)6,264,432¥(131,332)(204,006)¥(5,398,804)

Unitholders' equity
SurplusRetainedearnings(289,008)(5,530,137)¥

734,294

Valuation and translation adjustments

Own
investment
units

Total surplus(289,008)¥

Total unitholders'equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets

¥

¥

¥

(in thousands of yen)
Balance as of July 1, 2018 ······················································¥

7,610,548¥

12,633,832

¥

-

¥

181,432,288

90,97590,975

181,523,263

Changes during the period ················································
Issuance of new investment units ····································
Distributions from surplus ···················································(6,854,248)

Acquisition of own investment units ·······························
Cancellation of own investment units······························(3,999,980)

Net income ·············································································

42,294,085

42,294,085(6,854,248)(6,854,248)(3,999,980)(3,999,980)(3,999,980)

3,999,980--

8,384,071

8,384,071(6,854,248)

8,384,071

8,384,071

1,529,823(2,470,157)

Changes other than unitholders’ equity(net) ··············
Total changes during the period ······································
Balance as of December 31, 2018 ······································¥

9,140,372¥

10,163,675¥-

39,823,927¥

221,256,215¥

17,70917,70917,70917,70917,70939,841,636

108,684¥

108,684¥

221,364,900

Changes during the period ················································
Distributions from surplus ················································(9,248,282)

Distributions in excess of retained earnings fromallowance for temporary differences adjustment ······
Other distributions in excess of retained earnings ·····Net income ·············································································(9,248,282)(9,248,282)(9,248,282)(85,002)(85,002)(85,002)(204,006)(204,006)(204,006)

21,239,877

21,239,877

21,239,877

21,239,877

11,991,594

11,702,585

Changes other than unitholders’ equity(net) ············
Total changes during the period ······································
Balance as of June 30, 2019 ··················································¥

21,131,966¥

21,866,261¥-

11,702,585¥

232,958,801¥(21,072)(21,072)(21,072)(21,072)(21,072)

11,681,513

87,612¥

87,612¥233,046,414

Unitholders' equity
SurplusCapital surplus
Deduction of capital surplus

Unitholders'
capitalCapital surplus

Allowance fortemporarydifferences
adjustment$$

Other deduction ofcapital surplus

Capital surplus (net)

Deduction ofcapital surplus(in thousands of U.S dollars)
Balance as of December 31, 2018 ················································ $1,958,368

58,117(429)$(48,193)$(48,623)$

9,493

Changes during the period ··························································
Distributions from surplus ··························································
Distributions in excess of retained earnings fromallowance for temporary differences adjustment ················(788)

Other distributions in excess of retained earnings ···············(1,892)

(788)

(788)

(1,892)(1,892)

Net income ·······················································································
Changes other than unitholders’ equity(net) ·····················
Total changes during the period ················································-

Balance as of June 30, 2019 ··························································· $1,958,368

$

(788)

58,117$(1,218)(1,892)$(50,086)

SurplusOwn
investment
units

Total surplus(2,681)(51,304)$

6,812

Valuation and translation adjustments

Unitholders' equity

Retainedearnings(2,681)$

Total
unitholders'equityDeferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets

$

$

$

(in thousands of U.S dollars)
Balance as of December 31, 2018 ······································$

84,797$

94,291$-

2,052,659

1,008

1,008

2,053,668

Changes during the period ················································
Distributions from surplus ················································(85,799)

Distributions in excess of retained earnings fromallowance for temporary differences adjustment ·····
Other distributions in excess of retained earnings ····
197,048

Net income ·············································································(85,799)(85,799)(85,799)

(788)

(788)

(788)

(1,892)(1,892)(1,892)

197,048

197,048

197,048

Changes other than unitholders’ equity(net) ············(195)

Total changes during the period ······································
Balance as of June 30, 2019 ··················································

111,249$

196,047-

108,568$

202,859

$

-

(195)

108,568$

2,161,228

(195)

$

The accompanying notes are an integral part of these financial statements.

812

(195)

(195)
$

812

108,372$

2,162,041

INVINCIBLE INVESTMENT CORPORATIONSTATEMENT OF CASH FLOWSFor the six months ended June 30, 2019
For the six months ended
December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Cash flows from operating activities:
Income before income taxes ··················································································································¥
Depreciation and amortization ············································································································
Loss on reduction entry of non-current assets ················································································
Investment unit issuance costs················································································································
Amortization of investment corporation bond issuance costs····················································
Loan-related costs ······································································································································
Interest income ···········································································································································
Interest expenses ········································································································································
Changes in assets and liabilities
Foreign exchange losses (gains) ···········································································································
Increase (decrease) in allowance for doubtful accounts ······························································
Decrease (increase) in rental receivables ····························································································
Decrease (increase) in deposits paid ···································································································
Decrease (increase) in receivable income taxes ·················································································
Decrease (increase) in consumption taxes receivable ···································································
Increase (decrease) in accounts payable ····························································································
Increase (decrease) in consumption taxes payable ········································································
Increase (decrease) in accounts payable-other ················································································
Increase (decrease) in accrued expenses ···························································································
Increase (decrease) in advances received ··························································································
Increase (decrease) in deposits received ····························································································
Decrease in property and equipment in trust due to sale ···························································
Decrease in leasehold rights in trust due to sale ·············································································
Other, net ······················································································································································
Subtotal ····················································································································································
Interest income received ·························································································································
Interest expenses paid ······························································································································
Income taxes paid ·····································································································································(7,261)(3)(764,772)(23,292)(434,326)(32,970)(14,902)(49,755)(2,611)
20,161(75,818)
9,283
11,208,966
82(553,985)(605)(23,481)62
285,339
96,4703,830
434,326
22,952
2,764,397
40,334
118,454(117,053)(347,981)
21,268,952
7,047,749(617,969)
56,413,251
811(603,432)
(605)

(217)
0
2,647
894
35
4,029
212
25,646374
1,098(1,085)(3,228)
197,318
65,384(5,733)523,362
7(5,598)(5)

8,384,676
3,039,033
186,997
2,625
407,683(82)
564,302¥21,240,482
3,168,320
115,319
3,506
310,089(811)
599,960$

197,054
29,393
1,069
32
2,876
(7)
5,566

Net cash provided by operating activities ··················································································

10,654,458

55,810,025

517,766

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 in trust ················································
Payments of tenant leasehold and security deposits ···································································
Collection of tenant leasehold and security deposits ···································································
Payments of TK investment ·················································································································
Proceeds from withdrawal of TK investment···················································································
Other, net ······················································································································································(45,485,560)(3,421,194)(64,862)
49,032(19,105)(37,534,886)
751,060(12,784)(1,302,310)(323,779)
61,654
896,949(58,789)(12,081)(3,003)
571
8,321
(545)

Net cash used in investing activities ······························································································(85,738,300)(726,275)(6,737)

1,099,000(2,000,000)
68,338,000(28,979,000)
1,980,352(804,736)(3,999,980)(6,664,830)(1,099,000)
17,684,000(17,684,000)(167,123)(8,993,502)(10,195)
164,059(164,059)(1,550)(83,435)-(85,002)(788)

42,107,087(204,006)-(1,892)-

Net cash provided by (used in) financing activities ·································································

71,075,892(10,548,635)(97,862)

Effect of exchange rate change on cash and cash equivalents ····················································Net increase (decrease) in cash and cash equivalents ····································································Cash and cash equivalents at beginning of period ········································································(4,007,949)
15,072,553(12)
44,535,115
11,064,604

0
413,165
102,649

Cash and cash equivalents at end of period (Note 6) ·····································································¥

11,064,604

Cash flows from financing activities:
Proceeds from short-term loans payable ··························································································
Repayments of short-term loans payable ···························································································
Proceeds from long-term loans payable ···························································································
Repayments of long-term loans payable ····························································································
Proceeds from issuance of investment corporation bonds···························································
Payments for loan-related costs ············································································································
Payments for Acquisition of Own investment units·······································································
Payments of distributions of earnings··································································································
Payments of distributions in excess of retained earnings from allowance for temporary
differences adjustment·······························································································································
Payments of other distributions in excess of retained earnings···················································
Proceeds from issuance of investment units ···················································································¥

The accompanying notes are an integral part of these financial statements.

55,599,707$

515,815

INVINCIBLE INVESTMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS
As of and for the six months ended June 30, 2019

1. Organization
Invincible Investment Corporation (the“Company”), a real estate investment corporation, was incorporated on January 18, 2002, underthe Act on Investment Trusts and Investment Corporations of Japan (the“Investment Trust Act”) with initial capital of ¥200 million.
The Company is externally managed by a registered asset management company, Consonant Investment Management Co., Ltd. (the“Asset Manager”). The Asset Manager is currently owned 100% by Calliope Godo Kaisha (Calliope). The Company was formed toinvest primarily in properties in Japan.
On May 17, 2004, the Company raised ¥3,377,250 thousand through an initial public offering of 9,000 investment units. As a“comprehensive investment REIT focusing on the Tokyo metropolitan area and on residential properties,” the Company was listed on
the Osaka Securities Exchange in May 2004.
On February 7, 2005, the Company completed its second public offering of 10,650 investment units at a price of ¥369,734 per unit inconnection with a public offering in Japan.
On July 31, 2006, the Company completed its third public offering of 25,000 investment units at a price of ¥332,045 per unit in connection
with a public offering in Japan. The Company was listed on the J-REIT market of the Tokyo Stock Exchange in August 2006 (in order tofocus trading on one securities exchange and reduce administrative tasks and costs accompanying a duplicate listing, the Company
delisted from the Osaka Securities Exchange on October 6, 2007).
Effective on February 1, 2010, the Company executed a five-to-one unit split and 215,596 investment units were issued in connection
with the unit split. Effective on the same day, the Company also merged with LCP Investment Corporation (LCP) and allocated 367,200
investment units at a ratio of 4 units (post-unit split) of the Company per one investment unit of LCP. As a result, investment units issued
and outstanding were 636,695 units as of February 1, 2010.
On July 29, 2011, the Company completed a third party allotment of 711,597 investment units at a price of ¥9,837 per unit.
On December 20, 2013, the Company completed a third party allotment of 224,887 investment units at a price of ¥13,340 per unit.
On July 16, 2014, the Company completed its fourth public offering totaling 1,040,000 new investment units at a price of ¥21,873 per unit.
527,322 of such units were issued in connection with a Domestic Public Offering, and the remaining 512,678 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 13,
2014, the Company issued 55,507 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥23.9 billion were used to repay the Company’s outstanding short term borrowings and in connection withthe acquisition of 18 properties during this fiscal period.
On July 15, 2015, the Company completed its fifth public offering totaling 500,000 new investment units at a price of ¥57,817 per unit.
211,250 of such units were issued in connection with a Domestic Public Offering, and the remaining 288,750 units were issued inconnection with an International Offering pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 12,
2015, the Company issued 25,000 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥29.3 billion were used to repay the Company’s outstanding long term borrowings and in connection withthe acquisition of 14 properties during this fiscal period.
On March 30, 2016, the Company completed its sixth public offering totaling 459,512 new investment units at a price ¥81,217 per unit.
194,144 of such units were issued in connection with a Domestic Public Offering, and the remaining 265,368 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On April 27, 2016,
the Company issued 22,626 investment units domestically in connection with the exercise of an over-allotment option. Net proceeds ofapproximately ¥37.9 billion were used to repay the Company’s outstanding long term borrowing and in connection with the acquisitionof 6 properties during this fiscal period.
On March 13, 2017, the Company completed its seventh public offering totaling 185,000 new investment units at a price ¥46,897 per unit
in connection with Japanese Primary Offering.

On October 12, 2017, the Company completed its eighth public offering totaling 887,959 new investment units at a price ¥44,118 per unit.
515,017 of such units were issued in connection with a Domestic Public Offering, and the remaining 372,942 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On November 1,
2017, the Company issued 44,398 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥39.8 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 preferred security during this fiscal period.
On August 1, 2018, the Company completed its ninth public offering totaling 909,524 new investment units at a price ¥45,776 per unit.
432,024 of such units were issued in connection with a Domestic Public Offering, and the remaining 477,500 units were issued inconnection with an International Offering pursuant Rule 144A and Regulation S under the U.S. Securities Act of 1933. On August 21,
2018, the Company issued 45,476 investment units domestically in connection with the exercise of an over-allotment option. Net
proceeds of approximately ¥42.2 billion were used to repay the Company’s outstanding long term borrowing and in connection withthe acquisition of 4 properties and 1 TK investment during this fiscal period.

2. Summary of Significant Accounting Policies(a) Basis of Presentation
The Company maintains its accounts and records in conformity with accounting principles and practices generally accepted in Japan(“Japanese GAAP”), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial Instruments
and Exchange Act of Japan, and other related regulations, which are different in certain respects from the application and disclosure
requirements of International Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The financial statements are prepared based on the Japanese audited financial statements of the Company, which were prepared inaccordance with Japanese GAAP and filed with the Kanto Local Finance Bureau as required by the Financial Instruments and Exchange
Act of Japan. In preparing the accompanying financial statements, certain information in the notes has been added and certain
reclassifications have been made from the financial statements issued domestically for the convenience of the readers outside Japan.
The financial statements are not intended to present the financial position and the results of operations in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan.
The Company’s fiscal period is a six-month period, which ends at the end of June and December of each year.

Amounts less than ¥1 thousand and US$1 thousand have been rounded down. As a result, the totals shown in the financial statements
and notes thereto do not necessarily agree with the sum of the individual amounts.
The Company does not prepare consolidated financial statements as it has no subsidiaries.
(b) Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short-term investments which are highly liquid and readily convertible
to cash, have a low risk of price fluctuation, and mature within three months from the date of acquisition.
(c)

Valuation standard and method for securities

Other securities without fair market value are recorded at cost being determined by the moving average method.
(d) Property and Equipment
Property and equipment are recorded at cost. Depreciation of property and equipment, except for land, is calculated on a straight-line
basis over the estimated useful lives of the assets as stated below:
For the six months ended
June 30, 2019

Buildings ··················································································

16-50

Buildings and accompanying facilities ··························

5-29

Tools, furniture and fixtures ··············································

4-10

Buildings in trust ··············································································

5-67

Buildings and accompanying facilities in trust ···························

2-33

Structures in trust ··················································································

3-55

Tools, furniture and fixtures in trust ···············································

2-19(e) Intangible Assets
Amortization of a domestic term leasehold interest for business use is calculated by the straight-line method over the lease term.
(f)Long-term Prepaid Expenses

Long-term prepaid expenses are amortized on a straight-line basis.
(g) Investment Unit Issuance Costs
Investment unit issuance costs are recorded as expenses when incurred.
(h) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the straight-line method over the period through the redemption of thebonds.
(i)

Allowance for Doubtful Accounts

Allowance for doubtful accounts is provided based on past experience for normal receivables and on a valuation of any receivables fromcompanies and individuals with financial difficulties.
(j)

Conversion of assets and liabilities in foreign currency into Japanese yen

Receivables and payables denominated in foreign currencies are translated into yen at the exchange rate in effect at the balance sheet
date, and differences arising from the translation are included in the statements of income.
(k) Impairment of Fixed Assets
An assessment for impairment is carried out on an asset or group of assets, such as fixed assets, intangible assets and investments,
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the asset or group of assets isdeemed to be impaired, an impairment loss is recognized for the difference between the carrying amount and the recoverable value ofthe asset or group of assets using the discounted cash flow model.
(l)

Accounting Treatment of Trust Beneficiary Interests in Real Estate Trusts

For trust beneficiary interests in real estate trusts, which are commonly utilized to obtain ownership in investment properties in Japanand through which the Company holds all of its real estate, all assets and liabilities with respect to assets in trust, as well as all income
generated and expenses incurred with respect to assets in trust, are recorded in the relevant accounts of the balance sheet and statementof income and retained earnings of the Company in proportion to the percentage that such trust beneficiary interest represents. Certain
material accounts with respect to assets and liabilities in trust are presented separately from other accounts in the balance sheets of theCompany.
(m) Income Taxes
Deferred tax assets and liabilities are computed based on the temporary differences between the financial statement and income tax
basis of assets and liabilities using the applicable statutory tax rate.
(n) Consumption Taxes
Consumption taxes withheld and consumption taxes paid are not included in the statement of income and retained earnings.
Consumption taxes paid are generally offset against the balance of consumption taxes withheld. As such, the excess of payments overamounts withheld are included in current assets and the excess of amounts withheld over payments are included in current liabilities as
the case may be.
(o) Taxes on Property and Equipment
Property and equipment are subject to various taxes, such as property taxes and urban planning taxes on an annual basis. An owner of aproperty is registered in the record maintained by the local government in each jurisdiction, and such taxes are imposed on the ownerregistered in the record as of January 1 of each year based on the assessment made by the local government.
Under the above tax rules, a seller of a property at the time of disposal is liable for these taxes on the property from the date of disposal tothe end of the calendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued tax

liabilities and the amount of settlement reflects this adjustment. For the purchaser, a portion of such taxes calculated from the acquisition
date to the end of the calendar year is capitalized as a cost of the property in accordance with Japanese GAAP. In subsequent calendar
years, half of such taxes on property and equipment for each calendar year are charged as operating expenses in each fiscal period.
No taxes on property and equipment were capitalized for the six months ended June 30, 2019.

3. U.S. Dollar Amounts
The Company maintains its accounting records in Japanese yen. The U.S. dollar amounts included in the accompanying financial
statements and notes thereto represent the arithmetical result of translating Japanese yen into U.S. dollars at the rate of ¥107.79 = US$1,
the effective rate of exchange prevailing at June 30, 2019. The inclusion of such U.S. dollar amounts associated with the fiscal six months
ended June 30, 2019 is solely for the convenience of readers outside Japan. Such translations should not be construed as representations
that the Japanese yen amounts represent, or have been, or could be converted into, U.S. dollars at that or any other rate.

4. Allowance for temporary differences adjustment
For the six months ended December 31, 2018
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. Reason, related assets and amounts(in thousands of yen)

Related assets,
etc.

Reason for
occurrence

InitialamountBeginningbalance

Allowance
set aside
duringperiodLeaseholdrights in trust

Amortizationofleasehold rights intrust¥ (46,329)¥ (46,329)-¥ (46,329)¥ (46,329)

-

Total

ReversalduringperiodEndingbalance

Reason for reversal-¥ (46,329)--¥ (46,329)

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

For the six months ended June 30, 2019
On the Balance Sheet, there are the increase and decrease of allowance for temporary differences adjustment.
1. Reason, related assets and amounts(in thousands of yen)

Related assets,
etc.

Reason for
occurrence

InitialamountBeginningbalance

Allowance
set aside
duringperiodLeaseholdrights in trust

Amortizationofleasehold rights intrust¥ (131,332)¥ (46,329)¥ (85,002)

Reversalduringperiod-Endingbalance

Reason for reversal¥ (131,332)-

Total¥ (131,332)¥ (46,329)¥ (85,002)-¥ (131,332)(in thousands of U.S dollars)

Related assets,
etc.

Reason for
occurrence

Leaseholdrights in trust

Amortizationofleasehold rights in
trust

Beginningbalance

Allowance
set aside
duringperiod$ (1,218)$ (429)$ (788)-$ (1,218)$ (1,218)$ (429)$ (788)-$ (1,218)

InitialamountTotal

ReversalduringperiodEndingbalance

Reason for reversal-

2. Method of reversal(1) Leasehold rights in trust
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.

5. Status of cancellation of own investment units
As ofDecember 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Total number of investment units cancelled ················································
Total amount cancelled ·······················································································

81,341
3,999,980

¥

-

¥

-

$

6. Cash and Cash Equivalents
Cash and cash equivalents shown in the statements of cash flows consist of the following balance sheet items.
As ofDecember 31,
2018

June 30,
2019

June 30,
2019

Cash and bank deposits ··························· ¥Cash and bank deposits in trust ············

3,985,335
7,079,268¥

48,833,358
6,766,348(in thousands of
U.S. dollars)
453,041$
62,773

Cash and cash equivalents ······················ ¥11,064,604¥

55,599,707$(in thousands of yen)

515,815

7. Property and Equipment
The following tables show the summary of movement in property and equipment for the six months ended June 30, 2019.
At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of yen)
Buildings ·····························································¥-¥

19,142,244¥-

Buildings and accompanying facilities ····-

5,111,168-¥

19,142,244
5,111,168¥

62,90842,886¥62,90842,886¥

19,079,335

Tools, furniture and fixtures···························

3,192

1,066,225-

1,069,418

14,924

14,254

1,054,494

Leasehold rights ·················································-

10,637,811-

10,637,811--

10,637,811

5,068,281

Construction in progress ·······························

-

9,817

-

9,817

-

-

9,817

Buildings in trust ··············································

144,380,745

464,106

14,739,815

130,105,036

13,178,580

1,783,951

116,926,456

Buildings and accompanying facilities
in trust ··································································

32,567,092

535,596

3,345,141

29,757,547

7,460,526

1,034,766

22,297,021

Structures in trust ·············································

228,964

5,957

7,256

227,665

94,9806,121

132,685

Tools, furniture and fixtures in trust ··········

1,690,363

174,658

48,725

1,816,296

611,887

120,088

1,204,408

Land in trust ······················································

203,881,464-

4,843,676

199,037,787--

199,037,787

Leasehold rights in trust ································

20,500,965-

7,394,198

13,106,766

242,158

103,342

12,864,608

Construction in progress in trust ················-

14,364-

14,364--

Total ······································································¥

403,252,788¥

37,161,951¥

30,378,814¥

410,035,925¥

21,708,852¥

3,168,320

14,364¥

388,327,072

At costBeginningbalance

Increase

Endingbalance

Decrease

Accumulated
depreciation

Depreciation forthe period

Net property andequipment(in thousands of U.S dollars)
Buildings ·····························································$-$

177,588$-

Buildings and accompanying facilities ····-

47,417-$

177,588
47,417

$

583
397

$

583
397

$

177,004

Tools, furniture and fixtures···························

29

9,891

-

9,921

138

132

9,782

Leasehold rights ·················································-

98,690-98,690--98,69047,019Construction in progress ·······························

-

91

-

91

-

-

91

Buildings in trust ··············································
Buildings and accompanying facilities
in trust ··································································
Structures in trust ·············································

1,339,463

4,305

136,745

1,207,023

122,261

16,5501,084,761

302,134

4,968

31,033

276,069

69,2139,599

206,856

2,124

55

67

2,112

881

56

1,230

Tools, furniture and fixtures in trust ··········

15,682

1,620

452

16,850

5,676

1,114

11,173

Land in trust ······················································

1,891,469-

44,936

1,846,532--

1,846,532

Leasehold rights in trust ································

190,193-

68,598

121,595

2,246

958

119,348

Construction in progress in trust ················

-

133

-

133

-

-

Total ······································································$

3,741,096$

344,762$

281,833$

3,804,025$

201,399$

29,393133$

3,602,626

Increases in the net book values are mainly due to the changes of investment structure for the Cayman Islands hotels and capitalized expenditures.

8.Fair Value of Investment and Rental Properties
The following tables show the net book value and the fair value of the investment and rental properties in the aggregate for the six
months ended December 31, 2018 and June 30, 2019.
Residential
As of / For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ··············· ¥86,569,109

Net increase (decrease) during period ········
Balance at the end of period ····························(660,828)
85,908,280

Fair value ···································································· ¥102,440,000¥

85,908,280$(28,986,463)
56,921,817¥

72,197,000

796,996(268,916)
528,080$

669,793

Retail facilities
As of / For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Net book value
Balance at the beginning of period ··············· ¥4,912,468

Net increase (decrease) during period ········
Balance at the end of period ····························(45,728)
4,866,739

Fair value ···································································· ¥6,170,000¥

4,866,739$(41,503)4,825,236¥

6,140,000

45,150(385)
44,765$Hotel
As of / For the six months ended

56,962

December 31,
2018

June 30,
2019

June 30,2019(in thousands of yen)(in thousands of
U.S. dollars)

Balance at the beginning of period ··············· ¥245,453,345$

Net increase (decrease) during period ········
Balance at the end of period ····························

46,421,563
291,874,909

Fair value ···································································· ¥354,366,000

Net book value¥

291,874,909

2,707,810

34,680,926
326,555,836¥

321,7453,029,555

393,926,158$

3,654,570

Total
As of / For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of yen)(in thousands of
U.S. dollars)

Balance at the beginning of period ··············· ¥336,934,923$

Net increase (decrease) during period ········
Balance at the end of period ····························

45,715,006
382,649,930

Fair value ···································································· ¥462,580,000

Net book value¥382,649,930

3,549,957

5,652,960
388,302,890¥

52,444
3,602,401

472,263,158$

4,381,326

Notes:
1.Fair value has been determined based on the appraisals or research provided by independent real estate appraisers.
2.For rental revenues and expenses for the six months ended December 31, 2018 and June 30, 2019, please refer to “Note 13: Rent Revenues－Real Estate and Expenses Related toProperty Rental Business“

9.Investment corporation bonds
The following table shows the details of investment corporation bonds for the six months ended June 30, 2019.
For the six months ended June 30, 2019
Beginning

EndingBeginning

EndingInterestbalancebalancebalancebalancerate (%)(in thousands of yen)
1st unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2023)(1)(2)
2nd unsecured investment corporation bond(Issued on May 25, 2018 and due on May 25, 2028) (1)(2)(in thousands of U.S. dollars)

1,000,000

1,000,000

9,277

9,277

0.400

1,000,000

1,000,000

9,277

9,277

0.800

2,000,000

2,000,000

18,554

18,5540.550

4,000,000

4,000,000

37,10937,109

3rd unsecured investment corporation bond(Issued on October 12, 2018 and due on October 12, 2023)(1)(3)
Total investment corporation bonds
Notes:(1)

The bonds were issued with pari passu conditions among specified investment corporation bonds.

(2)

The funds are mainly used to acquire properties in trust.

(3)

The funds are mainly used to repay existing borrowing.

(4)

Repayment schedule of investment corporation bonds for the next five years after each balance sheet date are as follows:

As ofJune 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Within 1 year······················································
1-2 years·······························································

¥

-

$

-

2-3 years····································································--

3-4 years····································································

1,000,000

9,277

4-5 years····································································

2,000,000

18,554

10. Loans Payable
The following table shows the details of loans payable for the six months ended June 30, 2019.
For the six months ended June 30, 2019
Classific
ation

Name oflenderMizuhoBank, Ltd.

Short-term loans
payableIncrease

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

-

0.269

02-Aug-19

3,400

-

3,400

-

0.269

02-Aug-19

3,395

-

3,395

-

0.269

02-Aug-19

10,195-

10,195-

5,992,000

55,589--55,5890.480-

5,992,000

55,589--55,589

0.480

-

-

5,992,000

55,589--55,5890.480

3,330,000--

3,330,000

30,893--30,8930.480

3,000,000--

3,000,000

27,831--

27,8310.480

2,670,000--

2,670,000

24,770--24,7700.480

1,335,000--

1,335,000

12,385--

12,3850.480

366,500-

366,500-

366,000-

366,000-

1,099,000-

1,099,000-

MizuhoBank, Ltd.

5,992,000

-

-

MUFG
Bank, Ltd.

5,992,000-

5,992,000

ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedResonaBank,
Limited.

Maturity
date

3,400

-

Sumitomo
Mitsui
Banking
Corporation

Averageinterest
rate (%)(1)-

366,500

MUFG
Bank, Ltd.

Endingbalance

Decrease

3,400-

Sumitomo
Mitsui
Banking
Corporation

Increase(in thousands of U.S. dollars)

366,500

Total
Short-termloanspayableLong-term loans
payableBeginningbalance

MUFG
Bank, Ltd.

668,000--

668,000

6,197

-

-

6,197

0.480

MizuhoBank, Ltd.

5,992,000--

5,992,000

55,589--55,5890.590

MUFG
Bank, Ltd.

5,992,000--

5,992,000

55,589--55,5890.590

5,992,000--

5,992,000

55,589--55,5890.590

3,330,000--

3,330,000

30,893--30,8930.590

3,000,000--

3,000,000

27,831--

27,8310.590

2,670,000--

2,670,000

24,770--24,7700.590

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedUse ofproceeds

Remarks(2)

Unsecured andunguaranteed(2)

Unsecured andunguaranteed

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-19

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

16-Jul-20

Classification

Name oflenderResonaBank,
Limited.

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

1,335,000--

1,335,000

12,385--

12,3850.590

MUFG
Bank, Ltd.

668,000--

668,000

6,197

-

-

6,197

0.590

MizuhoBank, Ltd.

3,682,000--

3,682,000

34,159--34,1590.480

3,400,000-

3,400,000-

31,542-

31,542-0.343

850,000-

850,000

-

7,885

-

7,885

-

0.343

3,400,000--

3,400,000

31,542--

31,5420.600

MUFG
Bank, Ltd.

850,000--

850,000

7,885

-

-

7,885

0.600

MizuhoBank, Ltd.

465,000-

465,000

-

4,313

-

4,313

-

0.461

MUFG
Bank, Ltd.

1,125,000-

1,125,000-

10,436-

10,436-0.461

2,181,000-

2,181,000-

20,233-

20,233-0.461

Sumitomo
MitsuiTrust Bank,
Limited
MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedLong-term loans
payableBeginningbalance

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.

Japan Post
Bank Co.,Ltd.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.

The Daishi
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
MizuhoBank, Ltd.

570,000-

570,000

-

5,288

-

5,288

-

0.461

570,000-

570,000

-

5,288

-

5,288

-

0.461

650,000-

650,000

-

6,030

-

6,030

-

0.461

2,000,000-

2,000,000-

18,554-

18,554-0.461

1,000,000-

1,000,000

-

9,277

-

9,277

-

0.461

333,000-

333,000

-

3,089

-

3,089

-

0.461

1,270,000-

1,270,000-

11,782-

11,782-0.461

1,000,000-

1,000,000

-

9,277

-

9,277

-

0.461

270,000-

270,000

-

2,504

-

2,504

-

0.461

965,000--

965,000

8,952

-

-

8,952

0.569

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

16-Jul-20

16-Jul-20

28-Aug-19

22-Jan-19

22-Jan-19

22-Jan-21

22-Jan-21

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-19

30-Mar-20

Classification

Name oflender

MUFG
Bank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.

Japan Post
Bank Co.,Ltd.
The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.

Long-term loans
payableThe
Hyakugo
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

1,125,000--

1,125,000

10,436--

10,4360.569

2,180,000--

2,180,000

20,224--

20,2240.569

570,000--

570,000

5,288

-

-

5,288

0.569

570,000--

570,000

5,288

-

-

5,288

0.569

650,000--

650,000

6,030

-

-

6,030

0.569

2,000,000--

2,000,000

18,554--

18,5540.569

333,000--

333,000

3,089

-

-

3,089

0.569

270,000--

270,000

2,504

-

-

2,504

0.569

500,000--

500,000

4,638

-

-

4,638

0.569

1,000,000--

1,000,000

9,277

-

-

9,277

0.569

270,000--

270,000

2,504

-

-

2,504

0.569

MizuhoBank, Ltd.

1,965,000--

1,965,000

18,229--18,2290.669

MUFG
Bank, Ltd.

1,125,000--

1,125,000

10,436--

10,4360.669

2,180,000--

2,180,000

20,224--

20,2240.669

570,000--

570,000

5,288

-

-

5,288

0.669

570,000--

570,000

5,288

-

-

5,288

0.669

650,000--

650,000

6,030

-

-

6,030

0.669

1,333,000--

1,333,000

12,366--

12,3660.669

270,000--

270,000

2,504

-

-

2,504

0.669

500,000--

500,000

4,638

-

-

4,638

0.669

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.

MUFG
Bank, Ltd.

The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
KagawaBank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-20

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

30-Mar-21

Classification

Name oflenderThe
Hiroshima
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
Citibank,
N.A., Japan
Branches
Citibank,
N.A., Japan
Branches
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.

AEON
Bank, Ltd.

The Tokyo
Star Bank,
LimitedThe Tokyo
Star Bank,
LimitedLong-term loans
payableThe Tokyo
Star Bank,
LimitedMizuhoBank, Ltd.

Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Towa
Bank, Ltd.

The
Shizuoka
Bank, Ltd.
The
Gunma
Bank, Ltd.

MizuhoBank, Ltd.

ResonaBank,
Limited.

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease

Averageinterest
rate (%)(1)(in thousands of U.S. dollars)

1,000,000--

1,000,000

9,277

-

-

9,277

0.669

270,000--

270,000

2,504

-

-

2,504

0.669

1,000,000-

1,000,000

-

9,277

-

9,277

-

0.469

1,000,000--

1,000,000

9,277

-

-

9,277

0.569

1,000,000--

1,000,000

9,277

-

-

9,277

0.669

1,000,000-

1,000,000

-

9,277

-

9,277

-

0.469

3,000,000--

3,000,000

27,831--

27,8310.669

700,000--

700,000

6,494

-

-

6,494

0.469

1,600,000--

1,600,000

14,843--

14,8430.569

1,700,000--

1,700,000

15,771--

15,771

0.669

634,000--

634,000

5,881

-

-

5,881

0.469

1,000,000--

1,000,000

9,277

-

-

9,277

0.469

333,000--

333,000

3,089

-

-

3,089

0.469

333,000--

333,000

3,089

-

-

3,089

0.469

333,000--

333,000

3,089

-

-

3,089

0.469

252,000--

252,000

2,337

-

-

2,337

0.469

200,000--

200,000

1,855

-

-

1,855

0.469

165,000--

165,000

1,530

-

-

1,530

0.469

1,633,000--

1,633,000

15,149--15,1490.569

333,000--

333,000

3,089

-

-

3,089

0.569

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

30-Mar-21

30-Mar-21

15-Jun-19

15-Jun-20

15-Jun-21

30-Jun-19

30-Jun-21

20-Jul-19

20-Jul-20

20-Jul-21

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-20

14-Mar-21

14-Mar-21

Classification

Name oflenderThe Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Towa
Bank, Ltd.

The
Shizuoka
Bank, Ltd.
The
Gunma
Bank, Ltd.

MizuhoBank, Ltd.

ResonaBank,
Limited.
The Bank ofFukuoka,
Ltd.
The
NomuraTrust andBankingCo., Ltd.

Long-term loans
payableAEON
Bank, Ltd.

The Towa
Bank, Ltd.

The
Shizuoka
Bank, Ltd.
The
Dai-ichi Life
Insurancecompany,
Limited
The
Gunma
Bank, Ltd.
Sumitomo
Mitsui
Banking
Corporation
MizuhoBank, Ltd.
The
Dai-ichi Life
Insurancecompany,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
ResonaBank,
Limited.

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

333,000--

333,000

3,089

-

-

3,089

0.569

333,000--

333,000

3,089

-

-

3,089

0.569

253,000--

253,000

2,347

-

-

2,347

0.569

200,000--

200,000

1,855

-

-

1,855

0.569

165,000--

165,000

1,530

-

-

1,530

0.569

1,733,000--

1,733,000

16,077--

16,0770.669

333,000--

333,000

3,089

-

-

3,089

0.669

333,000--

333,000

3,089

-

-

3,089

0.669

333,000--

333,000

3,089

-

-

3,089

0.669

900,000--

900,000

8,349

-

-

8,349

0.669

253,000--

253,000

2,347

-

-

2,347

0.669

200,000--

200,000

1,855

-

-

1,855

0.669

500,000--

500,000

4,638

-

-

4,638

0.669

165,000--

165,000

1,530

-

-

1,530

0.669

3,000,000--

3,000,000

27,831--

27,8310.519

4,321,000--

4,321,000

40,087--40,0870.619

3,000,000--

3,000,000

27,831--

27,8310.619

355,000--

355,000

3,293

-

-

3,293

0.369

355,000--

355,000

3,293

-

-

3,293

0.369

334,000--

334,000

3,098

-

-

3,098

0.369

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-21

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Mar-22

14-Sep-20

29-Nov-21

29-Nov-21

13-Oct-20

13-Oct-20

13-Oct-20

Classification

Name oflenderThe Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
ResonaBank,
Limited.
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.

Long-term loans
payableThe
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.

MizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
ResonaBank,
Limited.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.

AEON
Bank, Ltd.

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

300,000--

300,000

2,783

-

-

2,783

0.369

190,000--

190,000

1,762

-

-

1,762

0.369

167,000--

167,000

1,549

-

-

1,549

0.369

167,000--

167,000

1,549

-

-

1,549

0.369

355,000--

355,000

3,293

-

-

3,293

0.469

355,000--

355,000

3,293

-

-

3,293

0.469

333,000--

333,000

3,089

-

-

3,089

0.469

300,000--

300,000

2,783

-

-

2,783

0.469

190,000--

190,000

1,762

-

-

1,762

0.469

167,000--

167,000

1,549

-

-

1,549

0.469

167,000--

167,000

1,549

-

-

1,549

0.469

500,000--

500,000

4,638

-

-

4,638

0.669

500,000--

500,000

4,638

-

-

4,638

0.669

500,000--

500,000

4,638

-

-

4,638

0.669

355,000--

355,000

3,293

-

-

3,293

0.669

355,000--

355,000

3,293

-

-

3,293

0.669

333,000--

333,000

3,089

-

-

3,089

0.669

1,500,000--

1,500,000

13,915--

13,9150.669

300,000--

300,000

2,783

-

-

2,783

0.669

190,000--

190,000

1,762

-

-

1,762

0.669

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-20

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-21

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-22

Classification

Name oflenderThe
NomuraTrust andBankingCo., Ltd.
The
Hiroshima
Bank, Ltd.
The
Dai-ichi Life
Insurancecompany,
LimitedMizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
MizuhoBank, Ltd.
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation

Long-term loans
payableMizuhoBank, Ltd.
Sumitomo
Mitsui
Banking
Corporation

Beginningbalance

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

166,000--

166,000

1,540

-

-

1,540

0.669

166,000--

166,000

1,540

-

-

1,540

0.669

500,000--

500,000

4,638

-

-

4,638

0.669

1,250,000--

1,250,000

11,596--

11,5960.769

1,065,000--

1,065,000

9,880

-

-

9,880

0.769

1,250,000--

1,250,000

11,596--

11,5960.769

1,250,000--

1,250,000

11,596--

11,5960.869

1,060,000--

1,060,000

9,833

-

-

9,833

0.869

1,250,000--

1,250,000

11,596--

11,5960.869

1,850,000--

1,850,000

17,163--

17,1630.319

1,850,000--

1,850,000

17,163--

17,1630.319

1,000,000--

1,000,000

9,277

-

-

9,277

0.750

MUFG
Bank, Ltd.

500,000--

500,000

4,638

-

-

4,638

0.750

MizuhoBank, Ltd.

2,442,000--

2,442,000

22,655--22,6550.369

MUFG
Bank, Ltd.

2,220,000--

2,220,000

20,595--

20,5950.369

1,998,000--

1,998,000

18,536--

18,5360.369

1,110,000--

1,110,000

10,297--

10,2970.369

1,000,000--

1,000,000

9,277

-

-

9,277

0.369

890,000--

890,000

8,256

-

-

8,256

0.369

2,443,000--

2,443,000

22,664--

22,664

0.469

ShinseiBank,
Limited.

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedMizuhoBank, Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

13-Oct-22

13-Oct-22

13-Oct-22

13-Oct-23

13-Oct-23

13-Oct-23

11-Oct-24

11-Oct-24

11-Oct-24

13-Oct-19

13-Oct-19

27-Jun-23

27-Jun-23

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-21

17-Jul-22

Classification

Name oflender

MUFG
Bank, Ltd.

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,220,000--

2,220,000

20,595--

20,5950.469

1,997,000--

1,997,000

18,526--

18,5260.469

1,110,000--

1,110,000

10,297--

10,2970.469

1,000,000--

1,000,000

9,277

-

-

9,277

0.469

890,000--

890,000

8,256

-

-

8,256

0.469

MizuhoBank, Ltd.

2,442,000--

2,442,000

22,655--22,6550.569

MUFG
Bank, Ltd.

2,220,000--

2,220,000

20,595--

20,5950.569

1,997,000--

1,997,000

18,526--

18,5260.569

1,110,000--

1,110,000

10,297--

10,2970.569

1,000,000--

1,000,000

9,277

-

-

9,277

0.569

Sumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
LimitedSumitomo
Mitsui
Banking
Corporation
ShinseiBank,
Limited.

Long-term loans
payableBeginningbalance

Citibank,
N.A., Japan
Branches
Sumitomo
MitsuiTrust Bank,
Limited

890,000--

890,000

8,256

-

-

8,256

0.569

766,000--

766,000

7,106

-

-

7,106

0.369

766,000--

766,000

7,106

-

-

7,106

0.369

467,000--

467,000

4,332

-

-

4,332

0.369

150,000--

150,000

1,391

-

-

1,391

0.369

120,000--

120,000

1,113

-

-

1,113

0.369

30,000--30,000

278

-

-

278

0.369

AEON
Bank, Ltd.

60,000--60,000

556

-

-

556

0.369

MizuhoBank, Ltd.

2,521,500--

2,521,500

23,392--

23,3920.369

2,521,500--

2,521,500

23,392--

23,392

0.369

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

ShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

17-Jul-22

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

14-Jul-23

02-Aug-21

02-Aug-21

02-Aug-21

02-Aug-21

02-Aug-21

02-Aug-21

02-Aug-21

26-Sep-21

26-Sep-21

Classification

Name oflender

MUFG
Bank, Ltd.

Increase

Endingbalance

Decrease

Beginningbalance(in thousands of yen)

Increase

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,133,000--

2,133,000

19,788--19,7880.369

1,000,000--

1,000,000

9,277

-

-

9,277

0.369

684,000--

684,000

6,345

-

-

6,345

0.369

546,000--

546,000

5,065

-

-

5,065

0.369

500,000--

500,000

4,638

-

-

4,638

0.369

445,000--

445,000

4,128

-

-

4,128

0.369

137,000--

137,000

1,270

-

-

1,270

0.369

AEON
Bank, Ltd.

273,000--

273,000

2,532

-

-

2,532

0.369

MizuhoBank, Ltd.

3,287,000--

3,287,000

30,494--30,4940.469

3,287,000--

3,287,000

30,494--30,4940.469

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Long-term loans
payableBeginningbalance

Sumitomo
Mitsui
Banking
Corporation

Maturitydate

Use ofproceeds

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-21

26-Sep-22

26-Sep-22(2)

MUFG
Bank, Ltd.

2,600,000--

2,600,000

24,120--24,1200.469

1,000,000--

1,000,000

9,277

-

-

9,277

0.469

833,000--

833,000

7,727

-

-

7,727

0.469

667,000--

667,000

6,187

-

-

6,187

0.469

500,000--

500,000

4,638

-

-

4,638

0.469

445,000--

445,000

4,128

-

-

4,128

0.469

167,000--

167,000

1,549

-

-

1,549

0.469

AEON
Bank, Ltd.

334,000--

334,000

3,098

-

-

3,098

0.469

MizuhoBank, Ltd.

3,287,500--

3,287,500

30,499--30,4990.569

3,287,500--

3,287,500

30,499--30,4990.569

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Sumitomo
Mitsui
Banking
Corporation

Remarks

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-22

26-Sep-23

26-Sep-23

Unsecured andunguaranteedClassification

Name oflender

MUFG
Bank, Ltd.

Increase

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)

2,600,000--

2,600,000

24,120--24,1200.569

1,000,000--

1,000,000

9,277

-

-

9,277

0.569

833,000--

833,000

7,727

-

-

7,727

0.569

667,000--

667,000

6,187

-

-

6,187

0.569

500,000--

500,000

4,638

-

-

4,638

0.569

445,000--

445,000

4,128

-

-

4,128

0.569

166,000--

166,000

1,540

-

-

1,540

0.569

AEON
Bank, Ltd.

333,000--

333,000

3,089

-

-

3,089

0.569

MUFG
Bank, Ltd.

-

850,000-

850,000

-

7,885

-

7,885

0.373

-

3,400,000-

3,400,000-

31,542-

31,542

0.373

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
ResonaBank,
Limited.
The
NomuraTrust andBankingCo., Ltd.

Long-term loans
payableBeginningbalance

Sumitomo
MitsuiTrust Bank,
LimitedMizuhoBank, Ltd.

-386,000-

386,000

-

3,581

-

3,581

0.361

MUFG
Bank, Ltd.

-

1,275,000-

1,275,000-

11,828-

11,8280.361-

2,100,000-

2,100,000-

19,482-

19,4820.361-

500,000-

500,000

-

4,638

-

4,638

0.361

-

500,000-

500,000

-

4,638

-

4,638

0.361

-

1,000,000-

1,000,000

-

9,277

-

9,277

0.361

-

333,000-

333,000

-

3,089

-

3,089

0.361

-

1,270,000-

1,270,000-

11,782-

11,7820.361-

270,000-

270,000

-

2,504

-

2,504

0.361

-

300,000-

300,000

-

2,783

-

2,783

0.361

Sumitomo
MitsuiTrust Bank,
LimitedShinseiBank,
Limited.
ResonaBank,
Limited.
Developme
nt Bank ofJapan Inc.
The Bank ofFukuoka,Ltd.
The
Shizuoka
Bank, Ltd.
The
NomuraTrust andBankingCo., Ltd.
The Senshu
Ikeda Bank,
Ltd.

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

26-Sep-23

22-Jan-22

22-Jan-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

29-Mar-22

Classification

Name oflender

BeginningbalanceTHE
NISHI-NI
PPON
CITY
BANK,
LTD.
The Tochigi
Bank, Ltd.

Kiraboshi
Bank, Ltd.

Citibank,
N.A., Japan
Branches
Developme
nt Bank ofJapan Inc.
Total
long-term
loans
payableTotal loans payable

Endingbalance

Decrease

Beginningbalance

Increase(in thousands of yen)AozoraBank, Ltd.

Long-term loans
payableIncrease

Endingbalance

Decrease(in thousands of U.S. dollars)

Averageinterest
rate (%)(1)-

1,000,000-

1,000,000

-

9,277

-

9,277

0.594

-

1,000,000-

1,000,000

-

9,277

-

9,277

0.594

-

500,000-

500,000

-

4,638

-

4,638

0.594

-

1,000,000-

1,000,000

-

9,277

-

9,277

0.869

-

1,000,000-

1,000,000

-

9,277

-

9,277

0.340

-

1,000,000-

1,000,000

-

9,277

-

9,277

0.334

17,684,000

17,684,000

224,774,000

2,085,295

164,059

164,059

2,085,295

17,684,000

18,783,000

224,774,000

2,095,491

164,059

174,255

2,085,295

224,774,000

225,873,000

Maturitydate

Use ofproceeds

Remarks(2)

Unsecured andunguaranteed

29-Mar-24

29-Mar-24

29-Mar-24

29-Mar-29

17-Jun-22

17-Jun-22

Notes:(1)

The average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to three decimal places.

(2)

The funds are mainly used to acquire properties in trust and for repayment of loans payable.

(3)Long-term loans payable include current portion.

(4)

Repayment schedule of long-term loans payable (except for the current portion) for the next five years after each balance sheet date are as follows:

As ofJune 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
1-2 years·······························································¥

57,380,000$

532,331

2-3 years·····································································

52,602,000

488,004

3-4 years·····································································

29,645,000

275,025

4-5 years·····································································

28,843,000

267,585

11. Net Assets
The Company issues only non-par value units in accordance with the Investment Trust Act, and the entire amount of the issue price of
new investment units is allocated to unitholders’ capital within net assets. The Company is required to maintain net assets of at least¥50,000 thousand (US$463 thousand) as required by Article 67-4 of the Investment Trust Act.
The number of investment units authorized was 10,000,000 units as of December 31, 2018 and June 30, 2019.
The number of investment units issued and outstanding were 5,666,840 as of December 31, 2018 and June 30, 2019 respectively.

12.Appropriation of Retained Earnings
In accordance with the distribution policy in Article 17, Paragraph 1, of the Company’s articles of incorporation which stipulates making
distributions in excess of 90% of distributable profit as defined in Article 67-15, Paragraph 1 of the Special Taxation Measures Act of Japanfor the fiscal period.
The following table shows the appropriation of retained earnings for the six months ended December 31, 2018 and June 30, 2019.
For the six months ended

December 31,

June 30,

June 30,

2018

2019

2019
(in thousands of
U.S. dollars)(in thousands of yen)
Unappropriated retained earnings ····································································· ¥Reversal of allowance for temporary differences adjustment·······················

9,140,372¥

21,131,966$

196,047-(125,201)(1,161)(85,002)--

Distributions in excess of retained earnings ·····················································
Allowance for temporary differences adjustment········································
Deduction from unitholders capital surplus ················································(204,006)--

Distributions ···············································································································(9,537,291)(9,384,287)(87,060)

Of which, distributions of earnings · ·································································(9,248,282)(9,384,287)(87,060)

Of which, allowance for adjustment of temporary differences················(85,002)--

Of which, deduction from unitholders capital surplus ····························(204,006)--

Retained earnings / losses carried forward························································· ¥(107,910)¥

11,622,477$

107,825

The distribution in respect of the six months ended June 30, 2019 of ¥1,656 (US$15.3) per investment unit, amounting to a total
distribution of ¥9,384,287thousand (US$87,060 thousand) was proposed and approved at the Board of Directors meeting on August 22,
2019. These financial statements do not reflect these distributions payable.
Cash distributions per investment unit were ¥1,683 and ¥1,656 (US$15.3) for the six months ended December 31, 2018, and June 30, 2019,respectively.
Notes related to provision and reversal of allowance for temporary differences adjustment is below.
For the six months ended December 31, 2018
In this table, the Company recorded allowance for temporary differences adjustment below.
(a) Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.

Leasehold rights in trust

Reason for occurrence

Allowance for temporary difference adjustments

Occurrence of amortization of leasehold rights in trust

85,002(b) Method of reversal
Method of reversal

Related assets, etc.

Leasehold rights in trust

Upon sale, the corresponding amount is scheduled to be reversed.

For the six months ended June 30, 2019
In this table, the Company reversed allowance for temporary differences adjustment below.
(c)Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.

Leasehold rights in trust

Reason for reversal

Allowance for temporary difference adjustments

Sale of leasehold in trust(125,201)(in thousands of U.S dollars)

Related assets, etc.

Leasehold rights in trust

Reason for reversal

Allowance for temporary difference adjustments

Sale of leasehold in trust(1,161)(d) Method of reversal
Related assets, etc.

Leasehold rights in trust

Method of reversal

Upon sale, the corresponding amount is scheduled to be reversed.

13. Rent Revenues － Real Estate and Expenses Related to Property Rental Business
Rent revenue – real estate and expenses related to property rental business for the six months ended December 31, 2018 and June 30,
2019 consist of the following:
For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Rental revenue – real estate:
Rental revenue and common area charges (*)················································ ¥Other ·························································································································
Total rental revenue – real estate ······································································ ¥13,258,939
345,284
13,604,224¥

Expenses related to property rental business:
Facility management fees ··················································································· ¥Property related taxes ··························································································
Insurance expense ································································································
Depreciation ···········································································································
Other ·························································································································
Total expenses related to property rental business ····································· ¥Operating income from property leasing activities······································ ¥667,393547,232
13,8173,039,033
183,199
4,450,676
9,153,548¥(*)Variable rental revenue of hotels····································································· ¥4,953,767

11,795,812
357,587
12,153,399

$

$

¥
¥

662,160
565,715
13,723
3,048,495
200,561
4,490,658
7,662,741

$
$

6,143
5,248
127
28,281
1,860
41,661
71,089¥4,304,181$

39,931¥$

109,433
3,317
112,750

14. Management Contract Revenue
For the six months ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)Management contract revenue:
Hotel management revenue················································································
Hotel management expenses ···········································································
Management contract revenue ········································································

¥

¥

¥

-

Management contract expenses:
Management fee ···································································································· ¥Insurance expense ····························································································
Depreciation ···········································································································
Other ·························································································································
Total management contract expenses ····························································· ¥Operating income from management contract ············································· ¥

-

¥

¥

¥
¥

1,406,749
826,160
580,588$3,490
36,279
119,824
4,782
164,376
416,211$

15. Breakdown of Gain on sales of Properties
For the six months ended December 31, 2018
Not Applicable.
For the six months ended June 30, 2019
Royal Parks
Tower
Minami-Senju(in thousands of yen)
12,209,814¥
27,745,250
6,422,775
21,923,169
153,225
337,910
5,633,813¥
5,484,169

Spacia Ebisu

Revenue from sales of properties ···································································· ¥Cost of properties sold ·························································································
Other sale-related costs ·······················································································
Gain or loss on sales of properties ··································································· ¥$$$13,050
7,664
5,386

32
336
1,111
44
1,524
3,861

Royal Parks
Tower
Minami-Senju(in thousands of U.S. dollars)
113,274$
257,400
59,586203,387
1,421
3,134
52,266$50,878Spacia Ebisu

Revenue from sales of properties ···································································· $Cost of properties sold ·························································································
Other sale-related costs ·······················································································
Gain or loss on sales of properties ··································································· $16. Income Taxes
The Company is subject to corporate income taxes in Japan. The Company may deduct from its taxable income the amounts distributed
to its unitholders, provided the requirements are met under the Special Taxation Measures Act of Japan. Under this act, the Company
must meet a number of tax requirements, including a requirement to distribute in excess of 90% of distributable profit for the fiscal
period in order to be able to deduct such amounts. If the Company does not satisfy all of the requirements, the entire taxable income of
the Company will be subject to regular corporate income taxes in Japan.
The Company has a policy of making distributions in excess of 90% of its distributable profit for the fiscal period to qualify for conditions
set forth in the Special Taxation Measures Act of Japan to achieve a deduction of distributions for income tax purpose and it distributes
approximately 100% of distributable profit. Hence, the Company has treated the distributions as a tax allowable deduction as defined in
the Special Taxation Measures Act of Japan.
(a) Reconciliations of the Company’s effective tax rates and statutory tax rates are as follows:
For the six months ended

December 31,
2018

June 30,
2019(Rate)
Statutory tax rates ·························································
Deductible cash distributions ··································
Increase (decrease) in valuation allowance ··········
Change of tax rates
Other ················································································
Effective tax rates ··························································

31.51 %
(31.84)(0.35)
0.00
0.69
0.01 %

31.51 %
0.00
(31.58)(0.05)
0.12
0.00 %(b) Deferred tax assets and liabilities consist of the following:
As of

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Deferred tax assets:
Enterprise tax payable
Allowance for doubtful accounts ·····················
Buildings and other (merger) ······························
Land (merger)···························································Net loss carried forward(*1) ·······························
Asset retirement obligations ······························
Fixed-term leasehold ············································
Adjustment of acquisition price (Overseas properties)

¥

1,294
27
549,474
1,367,722
7,153,149
10,142
153,295
-

¥

1,294
46
428,965
786,792
747,198
10,16876,182477,213

$

12
0
3,979
7,299
6,931
94
706
4,427

Subtotal - deferred tax assets ··································
Valuation allowance for tax loss carried forward
Valuation allowance for the sum of deductible temporary differences

9,235,105(7,153,149)(2,037,871)

2,527,862(747,198)(1,743,389)

23,451(6,931)(16,173)

Subtotal - valuation allowance(*2) ························(9,191,020)(2,490,588)(23,105)

Total - deferred tax assets···········································

44,08437,274

345

Deferred tax liabilities:
Asset retirement obligations ······························
Deferred gains or losses on hedges····················

9,751
34,333

9,711
27,56290
255

Total - deferred tax liabilities

44,08437,274345

Net deferred tax assets ·············································

¥

-

¥

-

$

-

(*1)The amounts of tax loss carried forward and the deferred tax assets are indicated by carry-forward period.
For the six month ended December 31, 2018

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Total(in thousands of yen)Tax loss carried forward (a)5,164,678

1,317,493-

349,185

321,791-

Valuation allowance ··················(5,164,678)(1,317,493)-(349,185)(321,791)-

7,153,149(7,153,149)

Deferred tax assets ························

-

-

-

-

-

-

-

(a)Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
For the six month ended June 30, 2019

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Total(in thousands of yen)Tax loss carried forward (a)-78,982-

668,215--

747,198

Valuation allowance ··················-(78,982)-(668,215)--(747,198)

Deferred tax assets ························

-

-

-

-

-

-

-

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years

Total(in thousands of U.S. dollars)
Tax loss carried forward (a)

-

732

-

6,199

-

-

6,931

Valuation allowance ··················

-

(732)

-

(6,199)--(6,931)

Deferred tax assets ························

-

-

-

-

-

-

-

(a) Tax loss carried forward shown in the above table is after multiplying the statutory tax rate.
(*2)Valuation allowance decreased ¥6,700,432 thousand (US$62,161 thousand).This main reason is the offset of the tax loss carriedforward.

17. Leases(a) Lease rental revenues
The future minimum rental revenues pursuant to existing rental contracts as of December 31, 2018 and June 30, 2019 scheduled to bereceived are summarized as follows:
As of

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Due within one year ···········¥
Due over one year ···············

9,754,753
63,134,893¥

9,754,753
58,695,396$

90,497544,534

Total ·········································¥

72,889,647¥

68,450,150$

635,032(b) Lease rental expenses
The future minimum rental expenses pursuant to existing rental contracts as of December 31, 2018 and June 30, 2019 scheduled to be
paid are summarized as follows:
As of

December 31,
2018

June 30,2019(in thousands of yen)

June 30,2019(in thousands of

U.S. dollars)
Due within one year ···········¥
Due over one year ···············

312,959
9,934,076¥

268,4877,824,534$

2,490
72,590Total ·········································¥

10,247,035¥

8,093,022$

75,081

18. Financial Instruments(a) Qualitative information for financial instruments(i) Policy for financial instrument transactions
The Company raises funds through loans payable , investment corporation bonds, and the issuance of investment units toacquire real estate properties, pay property maintenance expenses and/or repay existing loans payable. Surplus funds aremanaged carefully through investments in financial instruments taking into account liquidity and safety in light of the current
financial market conditions. Derivative instruments are used only for hedging purposes and not for speculation.
(ii) Nature and extent of risks arising from financial instruments and risk management
The funds raised through loans payable and investment corporation bonds are mainly used to acquire real estate properties orproperties in trust and for the repayment of existing loans payable. Liquidity risks relating to loans payable are managed by thefinance department of the Asset Manager by preparing monthly plans for funds, and monitoring the covenants defined in loan
agreements.
(iii) Supplemental information 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 estimated using valuation techniques which contain various assumptions. If other valuation models orassumptions were used, the estimated value may differ.
(b) Quantitative information for financial instruments
The following table shows the carrying amounts, fair values and valuation differences of financial instruments for which fairvalue is available as of December 31, 2018 and June 30, 2019.
As ofDecember 31,
2018
Carrying
amounts

June 30,
2019

Fair value

Carrying
amounts

Difference

June 30,
2019

Fair value

Carrying
amounts

Difference(in thousands of yen)

Fair value

Difference(in thousands of U.S. dollars)

Assets:Current:(1) Cash and bank deposits ······················ ¥3,985,335(2) Cash and bank deposits in trust. ·····

7,079,268

Total assets ····················································· ¥11,064,604¥

3,985,335¥-

7,079,268¥

11,064,604

¥

¥

-

48,833,358¥

6,766,348¥

55,599,707

48,833,358¥

6,766,348¥

55,599,707

-

$

¥

-

453,041$

62,773$515,815453,041$

62,773$515,815-$-

Liabilities:(3)Short-term loans payable ····················

1,099,000

1,099,000(4) Current portion of long-term loans
payable ····························································

-

-

-

54,745,000(5) Investment corporation bonds ·········

4,000,000

54,745,000-

51,744,000

3,996,500(3,500)4,000,000

170,029,000-

173,030,000

-

-

-

51,744,000-

480,044

480,044-

4,005,300

5,300

37,10937,15849

173,030,000-

1,605,250-(6) Long-term loans payable······················

170,029,000

Total liabilities ················································ ¥229,873,000¥

229,869,500¥(3,500)¥228,774,000¥

228,779,300

¥

5,300

$

2,122,404$

1,605,250
2,122,453

$

49

-

(7)Derivatives ·················································· ¥124,029¥

124,029¥-¥

179,861¥

179,861

¥

-

$

1,668

$

1,668

$

-

Notes

(i)The methods and assumptions used to estimate fair value are as follows:(1)Cash and bank deposits and(2)Cash and bank deposits in trust(3)Short-term loans payable
Because of their short maturities, the carrying amounts approximate their fair value.
(4)Current portion of long-term loans payable(6)Long-term loans payable
Long-term loans payable with floating interest rates reflecting changes in market rates within a short term period are stated at their carrying amounts as their carrying
amounts approximate their fair values.
(5)Investment corporation bonds

The fair values of investment corporate bonds are determined based on the present value of contractual cash flows discounted at current market interest rates which would
be applicable to new investment corporate bonds under the same conditions and terms.
(7)Derivatives
Please refer to the “20. Derivatives” below.

(ii) Financial instruments for which fair value is difficult to determine are as follows:
As of

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Tenant leasehold and security deposits in trust ···········¥

2,009,816¥

1,746,941$

16,206

Investment securities ····························································¥

54,640,213¥

17,856,387$

165,659

Tenant leasehold and security deposits are not publicly traded, and it is difficult to determine their fair value based on estimated future cash flows because the repayment datesof those deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
Fair values of preferred securities interest are not subject to disclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

(iii) Cash flow schedule of financial assets after the balance sheet dateWithin 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of yen)
As of December 31, 2018:
Cash and bank deposits ·········································¥Cash and bank deposits in trust ··························

3,985,335
7,079,268

¥

-

¥

-

¥

-

¥

-

¥

-

Total ··············································································¥

11,064,604

¥

-

¥

-

¥

-

¥

-

¥

-

As of June 30, 2019:
Cash and bank deposits ·········································¥Cash and bank deposits in trust ··························

48,833,358
6,766,348

¥

-

¥

-

¥

-

¥

-

¥

-

Total ··············································································¥

55,599,707

¥

-

¥

-

¥

-

¥

-

¥

-

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of U.S. dollars)
As of June 30, 2019:
Cash and bank deposits ·········································$Cash and bank deposits in trust ··························

453,041
62,773

$

-

$

-

$

-

$

-

$

-

Total ··············································································$

515,815

$

-

$

-

$

-

$

-

$

-

(iv) Cash flow schedule of financial liabilities after the balance sheet dateWithin 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of yen)
As of December 31, 2018:
Short-term loans payable ······································
Current portion of long-term loans payable ···Investment corporation bonds ······························
Long-term loans payable ·······································

1,099,000
54,745,000-

Total ··············································································¥

55,844,000

50,130,000¥

50,130,000

55,601,000¥

55,601,000

32,895,000¥

32,895,000

3,000,000
27,843,000¥

30,843,000

1,000,000
3,560,000¥

4,560,000

As of June 30, 2019:
Short-term loans payable ······································

-

-

-

Current portion of long-term loans payable ···51,744,000

-

-

-

-

-

Investment corporation bonds ······························

-

-

-

1,000,000

2,000,000

1,000,000

Long-term loans payable ·······································-

Total ··············································································¥

51,744,000

57,380,000¥

57,380,000

52,602,000¥

52,602,000--

28,843,000

29,645,000¥

30,645,000-¥

30,843,000

4,560,000¥

5,560,000

Within 1 year

1-2 years

2-3 years

3-4 years

4-5 years

Over 5 years(in thousands of U.S. dollars)
As of June 30, 2019:
Short-term loans payable ······································

-

-

-

Current portion of long-term loans payable ···480,044

-

-

-

-

-

Investment corporation bonds ······························

-

-

-

9,277

18,554

9,277

Long-term loans payable ·······································-

Total ··············································································$

480,044532,331$532,331-

488,004$

488,004

275,025$

284,302--42,304

267,585$

286,139$

51,581

19. Investment securities
As of December 31, 2018
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand and TK interest recorded on the Balance Sheetat ¥36,783,826 thousand are not subject to disclosure of fair value as they have no market value and their fair values are extremely
difficult to recognize.
As of June 30, 2019
Fair values of preferred securities recorded on the Balance Sheet at ¥17,856,387 thousand (US$165,659 thousand) are not subject todisclosure of fair value as they have no market value and their fair values are extremely difficult to recognize.

20. Derivatives
Information on derivative transactions undertaken by the Company as of December 31, 2018 and June 30, 2019 is as follows. Derivative
instruments are used for hedging purposes only and are subject to hedge accounting.
As of December 31, 2018:
Contract amount(*1)
Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)Interest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable

Principle
accounting
methodCurrency
options
Sell –USD Call(Optionpremium)
Currency
options
Buy –USD Put
Optionpremium

Long-term
borrowings

Futuretransactions
denominatedina foreign
currency¥

71,640,000¥ 34,729,000¥¥

4,444,000¥

1,903,000¥¥(124,943)¥(53,157)¥¥

4,444,000¥

1,903,000¥¥

140,288¥

88,792¥

48,781(87,318)

162,566(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

As of June 30, 2019:
Contract amount(*1)

Contract amount(*1)

Method ofhedge
accounting

Type ofderivativetransaction

Main hedged
item

Fair
Value
(*2)

Over 1year

Total(in thousands of yen)Interest rate
swap
transaction
floating ratereceivable
and Fixed
rate payable
Principle
accounting
methodCurrency
options
Sell –USD Call(Optionpremium)
Currency
options
Buy –USD Put
Optionpremium

Long-term
borrowings

Futuretransactions
denominatedina foreign
currency

Fair
Value
(*2)

Over 1year

Total(in thousands of U.S. dollars)¥

84,074,000¥ 51,413,000¥¥

5,134,140¥

1,933,140¥¥(133,171)¥(42,806)¥¥

5,134,140¥

1,933,140¥¥

225,420¥

102,873¥(19,845)(33,916)

233,622$779,979$

476,973$$

47,630$17,934$$(1,235)

$

(397)

$

$

47,630$17,934

$

$

2,091

$

954

$

(*1) The interest rate swap contract amount is based on the notional principal amount.
(*2) Calculation of fair value is based on information provided by financial institutions.

21. Asset Retirement Obligations
The Company has an obligation under a fixed-term leasehold agreement to restore its leased land, which represents the land where
COMFORT HOTEL MAEBASHI, owned by the Company, is located upon the termination of agreement. The estimated period of useof property is estimated at 43 years based on the lease period per the agreement. The assets retirement obligation for the restoration isrecognized as a liability using discount rate at 1.342%.
Movements of asset retirement obligations for the six month ended December 31, 2018 and June 30, 2019 are as follows.

For the six month ended

December 31,
2018

June 30,
2019

June 30,2019(in thousands of
U.S. dollars)(in thousands of yen)
Balance at the beginning of the period ······································· ¥Liabilities incurred due to the acquisition of properties ·······

31,891¥

32,107-

Accretion expense ·············································································

215

Balance at the end of the period ··················································· ¥32,107

$

-

-

213
¥

32,321

297
1

$

299

22. Segment Information
Segment information for the six months ended December 31, 2018 and June 30, 2019 is as follows:(a) Operating Segment Information
Disclosure is omitted as the Company is comprised of a single reportable segment engaged in the property rental business.
(b) Enterprise-wide Disclosures(i) Information about Products and Services
Disclosure is not required as revenues from external customers for the single segment are in excess of 90% of total revenues.
(ii) Information about Geographic Areas(1) Revenues from Overseas Customers:
For the six months ended December 31, 2018

Disclosure is not required as revenues from external customers located in Japan are in excess of 90% of total revenues.

(184)

(314)

2,167

For the six months ended June 30, 2019(in thousands of yen)
Japan

Grand Cayman
24,098,860

Total

3,240,809

27,339,670(in thousands of U.S. dollars)

Japan

Grand Cayman
223,572

Total
30,065

253,638(2)Tangible Fixed Assets:
Disclosure is not required as tangible fixed assets located in Japan are in excess of 90% of total tangible fixed assets.
(c) Information about Major Customers
Information about major clients for the six-month periods ended December 31, 2018 and June 30, 2019 were as follows:
For the six months ended December 31, 2018
Name of client

Operating Revenues(in thousands of yen)

Mystays Hotel Management Co.,Ltd.

Related segment¥7,297,799

Real estate investing business

For the six months ended June 30, 2019
Name of client

Operating Revenues(in thousands of yen)

Operating Revenues(in thousands of U.S. dollars)

Related segment

Mystays Hotel Management Co.,Ltd.

¥6,581,126$61,055

Real estate investing business

Undisclosed (1)¥5,633,813$52,266

Real estate investing business

Undisclosed (2)¥5,484,169$50,878

Real estate investing business

Notes(1) The name of the client (an affiliate of a foreign real estate fund) is not disclosed, as the client’s consent has not been obtained for disclosure. The client is
not included in the group entities of the company and the Asset Manager.
(2) The name of the client (a Japanese TMK (Tokutei Mokuteki Kaisha)) is not disclosed, as the client’s consent has not been obtained for disclosure. The
client is not included in the group entities of the company and the Asset Manager.

23. Profit or Loss from Equity Method, etc
For the six months ended December 31, 2018
(in thousands of yen)
Investments in affiliates

54,640,213

Investments, if equity method was adopted

54,640,213

Investment gains (losses), if equity method was adopted

846,780

For the six months ended June 30, 2019(in thousands of yen)(in thousands of US dollars)

Investments in affiliates

17,856,387

165,659

Investments, if equity method was adopted

17,856,387

165,659

Investment gains (losses), if equity method was adopted

3,487,698

32,356

24. Related-Party Transactions(a) Parent Company and Major Corporate Unitholders
For the six months ended December 31, 2018
Share capital
Type ofrelated-party

Interested
party of the
Asset
Manager

Transactions for the period

Votinginterest intheCompany

Relationshipwith theCompany¥ 0.1-

Seller of real estate
trust beneficiaryrightsAcquisition of real estate trust
beneficiary rights(2)(4)

Investment
managementbusiness¥ 0.1-

Seller of real estate
trust beneficiaryrightsMinato-ku,
Tokyo

Investment
managementbusiness¥ 0.1-

Dogo TMK(3)Minato-ku,
Tokyo

Investment
managementbusiness¥ 0.1

Naqua Hotel &Resorts
Management
Co., Ltd.(3)Minato-ku,
Tokyo

Hotel
managementbusiness

Mystays HotelManagement
Co., Ltd.(3)Minato-ku,
Tokyo

Hotel
managementbusiness

Company
nameLocation

Aki TMK(3)Minato-ku,
Tokyo

Investment
managementbusiness

Raetia TMK(3)Minato-ku,
Tokyo

HL Investments
2 TMK(3)Business

Balance at the end of period

Amounts (1)Amounts(1)Balancesheet
account(in thousands ofyen)¥ 20,691,000--

Acquisition of real estate trust
beneficiary rights(2)(4)¥ 16,731,000--

Seller of real estate
trust beneficiaryrightsAcquisition of real estate trust
beneficiary rights(2)(4)¥ 5,286,000

-

-

-

Seller of real estate
trust beneficiaryrightsAcquisition of real estate trust
beneficiary rights(2)(4)¥ 5,039,000

-

-

¥ 10

-

Lease holder andoperator of hotel

Rental Revenues¥ 1,112,683

Rentalreceivables¥141,119¥ 100-

Lease holder andoperator of hotel

Rental Revenues¥ 7,297,799

Rentalreceivables¥ 2,264,664(in millions ofyen)Type of transactions(in thousands ofyen)

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Terms and conditions are decided pursuant to the Asset Manager's Regulations on Transactions with Sponsor-related Persons and the Management Manual regarding
Transactions with Sponsor-related Persons.

(3)

The seller, Aki TMK,Raetia TMK, HL Investments 2 TMK, Dogo TMK, Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co.
Ltd has no relationship to be stated, they receive investment through funds that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager
directly and indirectly owning 100% of issued shares. Accordingly, we treat Aki TMK,Raetia TMK, HL Investments 2 TMK, Dogo TMK, Naqua Hotel & Management
Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd as a related party.

(4)

The transaction amount exclude adjusted amount of real property tax and city planning tax, as well as consumption tax and local consumption tax.
Acquisition of real estate trust beneficiary rights are relating to below
Acquisition cost(in thousands of yen)

Property No.

Property nameSeller

D60

Hotel MyStays Premier Akasaka
Hotel MyStays
Premier Sapporo Park

Aki TMK

20,691,000

Raetia TMK

16,731,000

HL Investments 2 TMK

5,286,000

Dogo TMK

5,039,000

D61
D62

Hotel MyStays Ueno East
Hotel MyStays
Midosuji Honmach

D63

Total

47,747,000

For the six months ended June 30, 2019
Share capital
Type ofrelated-party

Company
nameLocation

Business(inmillionsof yen)(inthousandsof U.S.
dollars)

Transactions for the period
Votinginterest intheCompany

Relationshipwith theCompany

Amounts (1)Type oftransactions(inthousandsof yen)(inthousandsof U.S.
dollars)

Balance at the end of period
Balancesheet
account

Amounts(1)(inthousandsof yen)(in thousandsof U.S.
dollars)

Interested
party of the
Asset
Manager

Naqua Hotel& Resorts
Management
Co., Ltd.(2)Minato-ku,
Tokyo

Hotel
managementbusiness

¥ 10

$ 92

-

Lease holder andoperator of hotel

RentalRevenues¥590,306$5,476

Rentalreceivables¥197,253$1,829Mystays
HotelManagement
Co., Ltd.(2)Minato-ku,
Tokyo

Hotel
managementbusiness

¥ 100

$ 927

-

Lease holder andoperator of hotel

RentalRevenues¥6,581,126$61,055

Rentalreceivables¥1,834,677$17,020

Notes:(1)

Consumption taxes are not included in the transaction amount, but are included in the balance at the end of periods.

(2)

Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd has no relationship to be stated, they receive investment through funds
that are managed by FIG, a subsidiary of Softbank Group; a parent company of the asset manager directly and indirectly owning 100% of issued shares. Accordingly, we
treat Naqua Hotel & Management Resorts Management Co. Ltd, and Mystays Hotel Management, Co. Ltd as a related party.

(b) Affiliates
For the six months ended December 31, 2018
Share capital
Type ofrelated-party

Company
nameLocation

Amounts (1)(2)

Business

Relationshipwith theCompany

Investmen
t ratio(in millions of yen)
Seven Mile
ResortHoldings
Ltd.

Affiliates

Grand
Cayman,CaymanIslands

Investment
manageme
nt business¥ 36,783

100.0%

TK investment

Transactions for the period

Balance at the end of period(in millions of yen)

Balancesheet
account(in millions of yen)

¥ 36,783--

Amounts (1)(2)Type oftransactions
Investmentin the TK(2)(3)

Amounts (1)(2)(1)

Investment amount in USD is converted to yen using the exchange rate fixed by foreign exchange forward (USD 1=JPY 110.45 (rounded down to two decimal places)).

(2)

INV initially funded USD 339,836 thousand (JPY 37,534 million). However, based on the closing settlement, the Cayman SPC did not need as much capital as anticipated.
Therefore, INV received a refund of the TK investment in the amount of USD 6.8 million on December 10, 2018 (Cayman Island local time) from the Cayman SPC. Thus, theamounts indicated are those after the partial refund.

(3)

Investment was made based on a TK agreement.

(4)

The TK is a TK with Seven Mile Resort Holdings Ltd. as an operator.

For the six months ended June 30, 2019
Share capital
Type ofrelated-party

Company
nameSeven Mile
ResortHoldings
Ltd.

Affiliates

Transactions for the period

Amounts (1)(2)
LocationGrand
Cayman,CaymanIslands

Business

Investment
manageme
nt business(inmillionsof yen)¥ 36,783(inthousandsof U.S.
dollars)$ 341,254

Relationshipwith theCompany

Investmen
t ratio100.0%

TK investment

Balance at the end of period

Amounts (3)Amounts (3)(in millionsof yen)(inthousandsof U.S.
dollars)

Balancesheet
account(in millionsof yen)(in thousandsof U.S.
dollars)

Refund of
TK
investment(3)¥ 36,783$ 341,254---

Acquisitionof fixed
assets (3)¥ 35,903$ 333,091---

Type oftransactions

Investment amount in USD is converted to yen using the exchange rate fixed by foreign exchange forward (USD 1=JPY 110.45 (rounded down to two decimal places)).

(1)

INV initially funded USD 339,836 thousand (JPY 37,534 million). However, based on the closing settlement, the Cayman SPC did not need as much capital as anticipated.

(2)

Therefore, INV received a refund of the TK investment in the amount of USD 6.8 million on December 10, 2018 (Cayman Island local time) from the Cayman SPC. Thus, theamounts indicated are those after the partial refund.
Investment was made based on a TK agreement with Seven Mile Resort Holdings Ltd. as an operator. INV acquired the Leasehold of the Cayman Hotels by way of a(3)

distribution in kind after the termination of the TK agreement on May 9, 2019. Acquisition price of Leasehold differs from the amount of refund of the TK investment since thebook value as of May 9, 2019 is deemed the acquisition price of these properties.

(c)

Board of Directors and Major Individual Unitholders

For the six months ended December 31, 2018
Type ofrelated-party

Directors
and close
relatives

Name

Naoki
FukudaBusiness / Occupation

Executive officer of theCompany andmanagement director ofConsonant Investment
Management Co., Ltd.

Votinginterest intheCompany-

Transactions for the period
Type of transactions
Payment of the assets management
fee to Consonant Investment
Management Co., Ltd.(1)Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Balance at the end of period
Amounts(3)(in thousands of yen)

Balance sheet
account¥279,774

Accruedexpenses¥148,500¥1,100Accruedexpenses¥864

Notes:(1)

Amounts(3)(in thousands ofyen)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

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

For the six months ended June 30, 2019
Transactions for the period
Type ofrelated-party

Directors
and close
relatives

Name

Business /Occupation

Naoki
FukudaExecutive officer of
the Company andmanagement
director ofConsonantInvestment
Management Co.,Ltd.

Votinginterest intheCompany-

Balance at the end of period

Amounts(3)Type of transactions

Payment of the assets
management fee to Consonant
Investment Management Co.,
Ltd.(1)
Payment of institution
management fee to Consonant
Investment Management Co.,
Ltd.(2)

Amounts(3)(inthousandsof yen)(inthousandsof U.S.
dollars)¥419,700$3,893

¥600

$5

(in
thousandsof yen)(inthousandsof U.S.
dollars)

Accruedexpenses¥291,276$2,702

Accruedexpenses¥324$3

Balance sheet
account

Notes:(1)

Naoki Fukuda serves as a representative of the Asset Manager and the asset management fee is established in the Articles of Incorporation of the Company.

(2)

Naoki Fukuda serves as a representative of Asset Manager and the fee is established in the “Administrative Agency Agreement for Organizational Management” which wasagreed between the Asset Manager and the Company.

(3)

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

25. Parent company and/or significant affiliates(a) Information on the parent company
Not Applicable.

(b) Summary of financial statements of the significant affiliates
The significant affiliates in the year ended June 30, 2019 is Kingdom TMK. Summary of financial statements are as follows:
Kingdom TMK
As of / For the six months ended
June 30, 2019

December 31, 2018

(in thousands of yen)
Total specified assets
Total other assets
Total current liabilities

June 30, 2019(in thousands of US dollars)

100,856,568

100,524,164

932,592

3,784,525

3,972,036

36,849212,208

106,709989

Total non-current liabilities

66,280,661

66,280,661

614,905

Total net assets

38,148,224

38,108,830

353,546

Operating revenue

2,350,784

2,333,624

21,649

Income before income taxes

1,729,001

1,689,613

15,675

Net income

1,728,124

1,688,730

15,666

26. Per Unit Information
The following table shows net asset value per unit as of December 31, 2018 and June 30, 2019 and net income per unit for the six months
then ended. Net income per unit is calculated by dividing the net income attributable to unitholders by the weighted average number ofunits outstanding. The Company has no potentially dilutive units.
As of / For the six months ended

December 31,
2018

June 30,
2019
(Yen)

June 30,
2019(U.S. dollars)

Net asset value per unit ··································································· ¥39,063¥

41,125

$

381

1,504

¥

3,748

$

34

Net income per unit ········································································· ¥Weighted average number of units ············································

5,575,457

5,666,840-

27．Subsequent Events(a) Issuance of New Investment Units
The board of directors held on July 1, 2019 and July 10, 2019 approved the issuance of new investment units and secondary distributionof investment units. Payment for the new investment units issued via public offering was completed on July 18, 2019. In addition, withthe respect to the issuance of new investment units through the third-party allotment in connection with the overallotment for the public
offering, the payment was completed on August 15, 2019. As a result, holders’ capital becomes JPY235,576 million and the number ofinvestment units issued and outstanding become 6,096,840 units.

(i) Issuance of new investment units through public offering
Number of investment units

Domestic public offering : 194,524 units
International: 215,000 units

Total: 409,524 units

Issue price (offer price): JPY58,898 per unit

Total issue price (total offer price): JPY 24,120,144,552

Amount paid in (issue value): JPY 56,939 per unit

Total amount paid in (total issue value): JPY 23,317,887,036

Payment date

: July 18, 2019(ii) Secondary offering of investment units (overallotment secondary offering)Number of investment units: 20,476 units

Offer price: JPY 58,898 per unit

Total offer value: JPY 1,205,995,448

Delivery date

: July 19, 2019(iii) Issuance of new investment units through third-party allotment
Number of investment units: 20,476 units

Amount paid in (issue value): JPY 56,939 per unit

Total amount paid in (total issue value): JPY 1,165,882,964

Delivery date

: August 15, 2019

Allotee: Mizuho Securities Co, Ltd.

(b) New borrowings
In order to raise a part of the funds to be used for the acquisition of the 18 hotel properties acquired on July 19,2019, the Company
decided on the implementation of the following borrowings at its board of directors’ meeting held and entered into the borrowing
agreement on July 1, 2019.

New Syndicate Loan (L)LenderSyndicate formed by Mizuho Bank, Ltd.

Borrowing amountJPY 27,400 million

Interest rate, etc.

Base rate (1-month JPY TIBOR) +0.700%, 0.550%, 0.500%, 0.450%, 0.350%, 0.200%

Interest payment date(i) The last Japanese business day of each month before the principal maturity date, beginningwith July 31, 2019, and (ii) the principal maturity date,Principal repayment method

Lump-sum repayment

Borrowing method

Unsecured / with no guarantee

Borrowing dateJuly 19, 2019,

Maturity dateJuly 16, 2025, January 16, 2025, July 16, 2024, January 16, 2024, January 16, 2023, July 18, 2020(c)

Acquisition of assets (properties)

The Company decided to acquire 18 hotel properties as shown in the following table, of which the total acquisition price is JPY 82,646
million, on July 1, 2019 and the acquisitions have been closed on July 19, 2019.
Acquisition

Use

Property
number

Property nameLocation

Construction

pricecompletion

(JPY

date

million)(Note)

Hotel

D64

Hotel MyStays

Sapporo-shi,

Sapporo Aspen

Hokkaido

December 1995

15,543Total
rentable
area

SellerCategory of
specified asset(㎡)

15,313.17

Touyako

Trust beneficial

Godo Kaishainterest

YaeyamaHotel

D65

Art Hotel Ishigakijima

Ishigaki-shi,
Okinawa

Resort Hotel
January 1984

9,731

17,247.54

Tokutei
Mokuteki

Trust beneficial
interest

KaishaSaturnia
Hotel

D66

Hotel MyStays Fuji

Fujiyoshida-shi,

Onsen Resort

Yamanashi

November 2016

9,405

5,498.49

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha

Hotel

Hotel

D67

D68

Hotel Sonia Otaru

Hotel

MyStaysKanazawa Castle

Otaru-shi,
Hokkaido

Kanazawa-shi,Ishikawa

Shirahama

April 1992
March 1998

5,930

6,509.41

November 2018

January1997

Trust beneficial
interest

KaishaCalvisJune 1982
February 1991

Tokutei
Mokuteki

5,682

5,931.84

Tokutei

Trust beneficial

Mokutekiinterest

KaishaAcquisition

Use

Property

Property namenumberLocation

Construction

pricecompletion

(JPY

date

million)(Note)

Total
rentable
area

SellerCategory of
specified asset

(㎡)

HL
Hotel

D69

Art

Hotel

Niigata

StationNiigata-shi,
NiigataInvestments 2
April 1985

5,524

10,403.01

Tokutei
Mokuteki

Trust beneficial
interest

KaishaShirahama
Hotel

D70

Hotel

MyStays

Nagoya Nishiki

Nagoya-shi,
Aichi

March 1974

5,197

6,077.99

Tokutei

Trust beneficial

Mokutekiinterest

KaishaShirahama
Hotel

D71

Hotel Nord Otaru

Otaru-shi,
Hokkaido

March 1996

4,296

6,047.43

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha

Hotel
Hotel

D72

MyStays

Kagoshima

Kawaguchiko

Kagoshima-shi,
KagoshimaTenmonkan

September 1990

3,445

7,659.55

Tokutei

Trust beneficial

Mokutekiinterest

KaishaShirahama

Hotel

D73

Art Hotel Asahikawa

Asahikawa-shi,
Hokkaido

October 1987

3,197

25,131.84

Tokutei

Trust beneficial

Mokutekiinterest

KaishaCalvis
Hotel

D74

Hotel

MyStaysMatsuyama-shi,
Ehime

Matsuyama

July 2000

3,098

8,274.37

Tokutei

Trust beneficial

Mokutekiinterest

KaishaKawaguchiko
Hotel

D75

Hotel

MyStays

Sapporo Susukino

Sapporo-shi,
Hokkaido

May 1981

3,059

2,853.26

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha

Hotel

D76

Hotel

MyStays

SapporoNakajima

Park

Hotel

D77

Hokkaido

February 1991

2,118

5,473.41

Tokutei

Trust beneficial

Mokutekiinterest

KaishaHotel

MyStays

SapporoNakajima

Park Annex

Shirahama

Sapporo-shi,Shirahama

Sapporo-shi,
Hokkaido

September 1991

1,584

1,775.21

Tokutei

Trust beneficial

Mokutekiinterest

KaishaAcquisition

Use

Property
number

Property nameLocation

Construction

pricecompletion

(JPY

date

million)(Note)

Total
rentable
area

SellerCategory of
specified asset(㎡)

CalvisHotel

D78

Flexstay

Inn

Sakuragicho

Yokohama-shi,
Kanagawa

November 1991

1,425

1,308.61

Tokutei

Trust beneficial

Mokutekiinterest

KaishaMyCUBE
Hotel

D79

by

MYSTAYS Asakusa
Kuramae

Hotel
Hotel

D80

Calvis

Taito-ku,Tokyo

September 1991

1,287

2,156.70

Tokutei

Trust beneficial

Mokutekiinterest

KaishaMyStays

KagoshimaTenmonkan Annex

Kawaguchiko

Kagoshima-shi,
KagoshimaFebruary 1985

1,168

2,047.70

Tokutei

Trust beneficial

Mokutekiinterest

KaishaKawaguchiko

Hotel

D81

Hotel
NayoroMyStays

Nayoro-shi,
Hokkaido

November 2014

957

1,985.27

Tokutei

Trust beneficial

Mokutekiinterest

Kaisha(Note) Acquisition prices do not include adjustments for property taxes or city planning taxes, or national or local consumption taxes; hereinafter the same.

Properties Acquired in July 2019

Hotel MyStays Kanazawa Castle▪ Conveniently located only a six-minute walk from Kanazawa Station on the JR Hokuriku Shinkansen.
▪ Full renovation was completed in March 2016 incorporating contemporary interior design.
▪ The hotel has a large spa exclusively for guests.
▪ The hotel is located in an area with many sightseeing spots such as 21st Century Museum of Contemporary Art, Kanazawa,
Kanazawa castle and Kenrokuen Garden

Property information
Type

Limited-Service Hotel

Completion Date

10-17 Konohana-machi,
Kanazawa-shi, Ishikawa
6-minute walk from
Kanazawa Station on JR
Hokuriku Shinkansen
June 1982, February 1991,
January 1997

Renovation Date

From November 2015 toMarch 2016

Number of Guest
Rooms

206 rooms

Total Floor Area

5,931.84 m2 (Note 1)

Lot Area

1,951.82 m2

Address
Transport Access

Art Hotel Niigata Station▪ Rebranded and reopened under the Art Hotel brand in October 2016.
▪ Directly connected to the South Exit of Niigata Station on the JR Joetsu Shinkansen and other lines, the hotel’s excellent
location offers convenience to both tourists and business persons from within the country and abroad.
▪ A full-service hotel with several banquet halls including one capable of accommodating over 600 people in addition to
guestrooms mainly comprised of single/twin rooms.

Property information
Type

Full-Service Hotel

Address

1-1 Sasaguchi, Chuo-ku,
Niigata-shi, Niigata
Directly connected to Niigata
Station on JR Joetsu
Shinkansen

Transport Access(Note 1)
(Note 2)

(Note 3)Completion Date

April 1985

Renovation Date

From May 2007 to
August 2007

Number of Guest
Rooms

304 rooms

Total Floor Area

10,403.01 m2 (Note 2)

Lot Area

4,631.67 m2 (Note 3)

There is a pump room and a storage room (11.63 m2) as an annex building.
INV holds compartmentalized ownership of the property, and the total floor area indicated is that of the area exclusively owned by INV. Total floorarea of the entire building is 27,874.87 m2. The area exclusively owned by INV is approximately 46.5% of the entire exclusive area of the property
building.
The land of this property consists of one land lot, and INV holds co-ownership interest in ownership right (ownership ratio:
1,891,736,672/10,000,000,000). ”Lot Area” refers to the lot area of the entire building.

Hotel MyStays Matsuyama
and reopened in July 2017 as the first MyStays Hotel in Shikoku.
▪ Rebranded
located a ten-minute walk from Matsuyama Station on the JR Yosan Line. The hotel is convenient not only
▪ Conveniently
for business use, but also for sightseeing as it is only 20 minutes on the city tram to Dogo Onsen, a hot spring known forbeing the oldest in Japan.

hotel is located near the foot of Matsuyama Castle and guests can enjoy views of the moat and trams from their rooms.
▪ The
Some guest rooms offer a nice view of Matsuyama Castle.
of the banquet halls and rooms on upper floors was completed in July 2018 and renovation of the restaurant▪ Renovation
was completed in November 2018.
Property information
Type
Address

Transport AccessFull-Service Hotel
1-10-10 Otemachi,
Matsuyama-shi, Ehime
10-minute walk from
Matsuyama Station on the JR
Yosan Line and 9-minute
walk from Matsuyamashi
Station on the Iyo Line

Completion Date

July 2000

Renovation Date
Number of Guest
Rooms
Total Floor Area

From May 2018 to July 2018

Lot Area

1,744.08 m2

162 rooms
8,274.37 m2 (Note 1)(Note 1) There is a parking lot (42.78 m2) as an annex building.

Hotel MyStays Kagoshima Tenmonkan
and reopened under the MyStays brand in March 2018.
▪ Rebranded
in Tenmonkan, the largest downtown area in Kagoshima, the hotel is convenient for both sightseeing and business.
▪ Locatedrenovation completed in 2018. The hotel offers semi-double, twin, double, triple and queen room options.
▪ Full▪ The hotel has 6 banquet halls and a recently refurbished restaurant.
Property information
Type
Address
Transport AccessCompletion Date
Renovation Date
Number of Guest
Rooms
Total Floor Area
Lot Area

Full-Service Hotel
2-7 Yamanokuchi-cho, Kagoshima-shi, Kagoshima
3-minute walk from Takamibaba Station on the Kagoshima City Tram
September 1999
From January 2018 to April 2018
196 rooms
7,659.55 m2
1,407.04 m2

Hotel MyStays Kagoshima Tenmonkan Annex
and reopened under the MyStays brand in March 2018. Renovation was completed in April 2019.
▪ Rebrandedin the center of Tenmonkan, the largest downtown area in Kagoshima, the hotel offers excellent accessibility to▪ Located
popular tourist spots such as Sakurajima.
▪ Guestrooms consist of semi-double, double, queen and twin types, and have specifications that provide a comfortable stay.
Property information
Type
Address
Transport AccessCompletion Date
Renovation Date
Number of Guest
Rooms
Total Floor Area
Lot Area

Limited-Service Hotel
1-20 Gofuku-machi,
Kagoshima-shi, Kagoshima
2-minute walk from
Tenmonkan-dori Station on
the Kagoshima City Tram
February 1985
From February 2018 toApril 2018
73 rooms
2,047.70 m2
483.23 m2

Hotel MyStays Nagoya Nishiki▪ Rebranded and reopened under the MyStays brand in July 2018.
▪ The hotel is conveniently located in the center of Nagoya's famous Sakae/Nishiki entertainment district, having sightseeing▪

attractions such as Nagoya TV Tower and Nagoya Castle within walking distance and Nagoya Castle a ten-minute drive
away.
Renovated all 169 rooms mainly comprised of double rooms with some twin and triple rooms.
Property information
Type
Address
Transport AccessCompletion Date
Renovation Date
Number of Guest
Rooms
Total Floor Area
Lot Area

Limited-Service Hotel
3-8-21 Nishiki, Naka-ku,
Nagoya-shi, Aichi
4-minute walk from Sakae
Station on the subway
Higashiyama Meijo Line
March 1974
From May 2017 to July 2018
169 rooms
6,077.99 m2
561.72 m2

Flexstay Inn Sakuragicho▪ Located a five-minute walk from Sakuragicho Station on the JR Negishi Line, the hotel enjoys transportation convenience▪
▪
▪
▪

allowing access to major stations in Tokyo as well as access to Tokyo International Airport (Haneda Airport) within an
hour.
Renovation completed in September 2016.
Easy access to the Minatomirai area where Pacifico Yokohama, Yokohama Landmark Tower, Red Brick Warehouse andother facilities are located. Accordingly, both business and leisure demand can be expected.
All rooms are equipped with microwave ovens.
The hotel offers accommodation plans for consecutive stays and medium- to long-term stays with reduced per-night rates.
Property information
Type
Address
Transport AccessCompletion Date
Renovation Date
Number of Guest
Rooms
Total Floor Area
Lot Area

Limited-Service Hotel
2-72-2 Hanasaki-cho,Naka-ku, Yokohama-shi,
Kanagawa, and four other lots
5-minute walk from Sakuragicho
Station on the JR Negishi Line
November 1991
From July 2016 to
September 2016
70 rooms
1,308.61 m2 (Note 1)
402.28 m2

MyCUBE by MYSTAYS Asakusa Kuramae▪ Located close to Asakusa, a well-known historic area in Tokyo which is one of the most popular areas among tourists
visiting Tokyo.
▪ Located a one-minute walk from Kuramae Station on the Toei Subway Asakusa Line and a four-minute walk from
Kuramae Station on the Toei Subway Oedo Line, the hotel boasts excellent access to multiple train lines.
▪ The property was converted into a hotel (hostel) from an office building, and opened as a capsule hotel with space divided
into “cubes” in June 2016.
▪ Cubes are double-decked with sufficient space under beds. Beside the bed, each cube is equipped with a television,
folding table, safety box, etc. There is also a lobby lounge serving as a community space for overnight guests.
Property information
Type
Address
Transport AccessCompletion Date
Renovation Date
Number of Guest
Rooms
Total Floor Area
Lot Area

Limited-Service Hotel
2-6-7 Kuramae, Taito-ku,
Tokyo
1-minute walk from Kuramae
Station on the Toei Subway
Asakusa Line
September 1991
From November 2015 to May
2016 (Note 2)
161 rooms
2,156.70 m2
302.38 m2(Note 1) While INV acquired compartmentalized ownership of this property, the total floor area of the entire building is stated as it owns compartmentalized
ownership of the entire building.
(Note 2) Construction period for conversion (conversion of purpose of use) is indicated.

Domestic Portfolio Map (As of August 31, 2019)

No. of Properties(Note 1)

No. ofHotels(Note 1)

No. ofResidential
Properties

Others

148

84

62

2

(Note 1) Including overseas assets.
(Note 2) For properties corresponding to the number and their overview,please refer to pages 28-30 and pages 61-64.

Financial Conditions
With an aim to diversify financing means, INV invited new lenders upon refinancing in March 2019 andAugust 2019, increasing the number of partner financial institutions to 26.

 Investment Corporation Bonds
Date ofissuance
First Series Unsecured
May 25,Investment Corporation Bonds
2018
Second Series Unsecured
May 25,Investment Corporation Bonds
2018
Third Series Unsecured
October 12,
Investment Corporation Bonds
2018
Bond Series

Total Lender Formation (as of August 31, 2019)

Term

Total issue amount Interest rate
(JPY million)(per annum)

Rating

5 years

1,000

0.40%

A (JCR)

10 years

1,000

0.80%

A (JCR)

5 years

2,000

0.55%

A (JCR)

4,000

 LTV (based on appraisal value)(1) and Weighted Average Interest Rate(2) DSCR RatingRating Agency

Rating Object

RatingOutlookJapan Credit Rating
Agency, Ltd.

Long-term
Issuer Rating

A

Positive(Note 1) LTV (Appraisal Value Base) is calculated by the following formula: (Interest-bearing debt at the end of the relevant fiscal period, excluding
short-term consumption tax loan) / (Total appraisal value as of the end of the same period). For the preferred equity securities in the TMK
which holds Sheraton Grande Tokyo Bay Hotel as an underlying asset, the acquisition price (INV’s investment amount) of such preferred
equity securities is deemed as the appraisal value in the calculation for LTV after the acquisition since no appraisal value exists. For theoverseas real estate, for the end of December 2018 when INV owned the Cayman Hotel TK Interest, the acquisition price of the interest by
INV (an amount after the partial refund of the TK investment on December 10, 2018) is used in the calculation, while for the end of June2019 and the end of July 2019, appraisal value at the end of the fiscal period ended June 2019 is used in the calculation, since no appraisal
value exists. The amounts in USD are converted into JPY using the forward exchange rate of USD 1 = JPY110.45 based on the foreignexchange contract (contract thereof was entered into on July 26, 2018, and implemented on September 26, 2018).
(Note 2) Average interest rate is calculated by the following formula: (Sum total of (each loan’s loan amount outstanding at the end of the fiscal period
multiplied by applicable interest rate at the end of the fiscal period) / Total loan amount outstanding at the end of the fiscal period.
(Note 3) DSCR is calculated by dividing (i) by (ii) for the relevant period; (i) operating income, as adjusted for depreciation expenses from property
rental business and any gain (loss) on sales of property; (ii) scheduled repayments of loans payable, interest expense, the amount ofredemption of bond and bond interest. In calculating the amount for the fiscal period ended June 2019, the temporary increase of income
due to the change of investment structure regarding overseas assets is excluded.
(Note 4) DSCR (excluding hotel variable rent) is calculated in the same manner as DSCR, except for excluding both hotel variable rent andmanagement contract revenue from operating income.

Overview of Unitholders/Investment Units
Historical Unit Price(Note) Unit prices indicate the closing price on the TSE market. TSE REIT Index has been indexed,assuming the closing price of TSE REIT Index as of January 4, 2013, as the same as the closing price of
INV’s unit on the same day.
.

Distribution of Unitholders(Note) Percentage figures are rounded to one decimal place.

Annual Schedule

Information for Unitholders
For Unitholders
Investors’ Registry
Administrator
Special Account Management
Institution

Correspondence(Telephone Assistance)

Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo<Unitholders of the former Tokyo Growth REIT Investment Inc.>
Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo<Unitholders of the former LCP Investment Corporation>
Sumitomo Mitsui Trust Bank, Limited
1-4-1, Marunouchi, Chiyoda-ku, Tokyo
Transfer Agent Department, Sumitomo Mitsui Trust Bank,
Limited
2-8-4, Izumi, Suginami-ku, Tokyo, 168-0063
Toll-free Telephone Number 0120-782-031
Administrative services are available at the main and branch
offices throughout Japan of Sumitomo Mitsui Trust Bank,
LimitedNotification Process for Address Changes
Please notify your brokerage (financial instruments business operator) regarding changes to addresses,
names, registered seals, and the like. Unitholders who have special accounts instead of brokerage
accounts should contact the transfer account management institution (financial instruments business
operator) below.
Unitholders of the pre-merger Investment Corporation (former Tokyo Growth REIT Investment Inc.)
Mitsubishi UFJ Trust and Banking Corporation Toll-free Number: 0120-255-100
Unitholders of the former LCP Investment Corporation
Sumitomo Mitsui Trust Bank, Limited
Toll-free Number: 0120-782-031
Dividends
Unitholders may collect “dividends” by submitting the “Dividends Receipt” at your local Japan Post Bankor at the deposit teller of a post office. In the case that the collection period has past, designate acollection method on the back of the “Dividends Receipt,” and either mail the receipt to the Transfer Agent
Department of the Sumitomo Mitsui Trust Bank, Limited or collect from a branch teller.
(Bank Transfers)
Should you desire to specify bank transfers for future dividends, please notify your brokerage(financial instruments business operator).
(Note)

Please collect dividends within 3 years of distribution. Please note that payments cannot be made after
3 years due to the rules and regulations of the Articles of Incorporation of the Investment Corporation.

Notification(Notice of Dividend Payment)
The 2008 amendment of the Special Taxation Measures Law (Act No. 23 of April 30, 2008) mandated thesending to unitholders a “Notice of Dividend Payment” stating the dividend amount, amount of taxes
withheld, and the like for dividends payable in and after January 2009. If you collect dividends via a“Dividends Receipt,” please view the “Notice of Dividend Payment” sent alongside it. If you havespecified a wire transfer, the “Dividend Statement” delivered with the dividend payment is the “Notice ofDividend Payment.” Both documents may be used as supporting documents when filing income tax returns.
(Characters for Addresses and Names of Unitholders)With the digitization of investment securities, if there are Chinese characters in your address or names that
the Japan Securities Depository Center (JASDEC) has not included in the transfer system, JASDEC
registers them in the Investors’ Registry by converting part or all of the characters to those that JASDEC
has included in the transfer system or to katakana. Please be aware that correspondence may be addressedusing characters that JASDEC has included in the transfer system. Please inquire with your brokerageregarding characters registered for your address and name.
Inquiries
For inquiries regarding INV: Consonant Investment Management Co., Ltd.
TEL: 03-5411-2731 (Main)
Weekdays 9:30-17:30