This English translation is provided for information purposes only. If any discrepancy is identified between thistranslation and the Japanese original, the Japanese original shall prevail.
February 21, 2024

Financial Report for the Fiscal Year Ended December 31, 2023
(January 1, 2023 – December 31, 2023)
Japan Hotel REIT Investment Corporation
Listing:
Securities code:
URL:
Representative:

Tokyo Stock Exchange8985
https://www.jhrth.co.jp/en/
Kaname Masuda, Executive Director

Asset Management Company:
Representative:
Contact:

Japan Hotel REIT Advisors Co., Ltd.
Hiroyuki Aoki, President & CEO
Makoto Hanamura
Director of the Board, Head of Finance and Planning Division
Phone: +81-3-6422-0530

Scheduled date to file Securities Report: March 21, 2024
Scheduled date to start dividend payment: March 19, 2024
Preparation of supplementary material on financial report:
Schedule for presentation of financial results:

Yes
Yes (Analysts and institutional investors only)(Amounts are rounded down to the nearest million yen)

1. Status summary of operation and assets for the fiscal year ended December 31, 2023
(January 1, 2023 – December 31, 2023)(1) Operating results(Percentages show changes from the previous year)

Operating revenue
Fiscal year ended
December 31, 2023
December 31, 2022

JPY1M
26,574
14,912%78.2
9.4

Net income per unit
Fiscal year ended
December 31, 2023
December 31, 2022
(Note)

Operating income
JPY1M
15,014
4,296

Ordinary income

%
249.4
45.2

Return on equity (ROE)

JPY
2,909
598

JPY1M
13,135
2,672

Net income

%
391.4
105.9

Ordinary income tototal assets

%
5.6
1.2

JPY1M
13,134
2,671

%
391.6
106.0

Ordinary income tooperating revenue
%
3.2
0.7

%
49.4
17.9

Net income per unit is calculated based on the period-average number of investment units issued.

(2) Cash distributions

Fiscal year ended
December 31, 2023
December 31, 2022

Dividend per unit
(Excess of earnings
exclusive)
JPY
3,015
682

Total dividends(Excess of earnings
exclusive)
JPY1M
13,9803,046

Dividend per unit
resulting fromexcess of earnings
JPY－－

Total dividends
from excess ofearnings
JPY1M－－

Payout ratio
%
106.4
114.0

Dividend to
net assets
%
5.9
1.4

(Note 1) The source of dividends for the fiscal year ended December 31, 2023, is calculated by adding the reversal of reserve for temporary difference adjustment(¥845 million) to unappropriated retained earnings.
(Note 2) The source of dividends for the fiscal year ended December 31, 2022, is calculated by adding the reversal of the reserve for temporary difference
adjustment (¥376 million) to unappropriated retained earnings.
(Note 3) Payout ratio is calculated using the following formula, rounded off to one decimal place.
Total dividends (total dividends from excess of earnings exclusive) / Net income x 100- 1 -(3) Financial position
Total assets
JPY1M
429,955
396,799

Fiscal year ended
December 31, 2023
December 31, 2022
(Note)Net assets

Equity ratio

JPY1M
244,980
223,574

Net assets per unit
JPY
52,83150,050

%
57.0
56.3

Net assets per unit are calculated based on the total number of investment units issued and outstanding at the end of the fiscal year.

(4) Cash flows
Cash flows fromoperating activities
JPY1M
17,784
5,331

Fiscal year ended
December 31, 2023
December 31, 2022

Cash flows frominvesting activities
JPY1M(38,551)(3,640)Cash flows from
Cash and cash equivalents
financing activities
at end of year
JPY1M
JPY1M
19,76728,515(2,172)29,515

2. Operating forecast for the fiscal year ending December 31, 2024
(January 1, 2024 – December 31, 2024)(Percentages show changes from the previous year)

Midterm
Full year

Operating revenue

Operating income

Ordinary income

JPY1M
13,936
31,288JPY1M
7,974
18,815JPY1M
6,880
16,713

%
23.5
17.7

%
38.4
25.3

%
40.5
27.2

Net income
JPY1M
6,880
16,712

%
40.5
27.2

Dividend per unit
(Excess of earnings
exclusive)

Dividend per unit
resulting from excessof earnings

JPY
－
3,722

JPY
－
－

(Reference) Estimated net income per unit for the fiscal year ending December 31, 2024 (full year): ¥3,604(Calculated based on the estimate of period-average number of investment units of 4,637,006.)(Note) The source of the dividend payment is planned to be the total amount of net income plus the reversed amount of the reserve for temporary difference
adjustment (¥549 million).

* Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of financial statements for prior period after
error corrections(a) Changes in accounting policies due to revisions to accounting standards and other regulations: No Change(b) Changes in accounting policies due to other reasons than above (a): No change(c) Changes in accounting estimates: No change(d) Restatement of financial statements for prior period after error corrections: No change(2) Total number of investment units issued and outstanding(a) Total number of investment units issued and outstanding at the end of the fiscal year(including investment units owned by Japan Hotel REIT Investment Corporation (JHR))
As of December 31, 2023
As of December 31, 2022(b) Number of JHR’s own investment units held at the end of the fiscal year
As of December 31, 2023
As of December 31, 2022

4,637,006 units
4,467,006 units
0 unit0 unit(Note) For the number of investment units serving as the basis of computation of net income per unit, please refer to “Notes on per unit
information” on page 40.

* Financial reports are exempt from the audit by a certified public accountant or an auditing firm.
* Special items
Forward-looking statements presented in this financial report including operating forecasts are based on information currently
available to us and on certain assumptions we deem to be reasonable. As such, actual operating and other results may differ
materially from these forecasts due to a number of factors.
Moreover, this forecast is not intended to guarantee any dividend amount. For use of assumptions of operating forecast and notes,
please see “1. Operating results (1) Operating results (B) Outlook for the next fiscal year” on page 6 and “Assumptions of theoperating forecast for the midterm of the fiscal year ending December 31, 2024 (25th period) and the full fiscal year ending
December 31, 2024 (25th period)” on page 12.

- 2 -○ Table of Contents
1. Operating results .............................................................................................................................................................................. 4(1) Operating results ............................................................................................................................................................................. 4
2. Financial statements ....................................................................................................................................................................... 21(1) Balance sheets ............................................................................................................................................................................ 21(2) Statements of income ................................................................................................................................................................. 23(3) Statements of changes in net assets ............................................................................................................................................ 23(4) Statements of cash dividends ..................................................................................................................................................... 26(5) Statements of cash flows ............................................................................................................................................................ 27(6) Notes on going concern assumption ........................................................................................................................................... 28(7) Notes on matters concerning significant accounting policies ..................................................................................................... 28(8) Notes on significant accounting estimates.................................................................................................................................. 29(9) Notes to financial statements...................................................................................................................................................... 30(10) Changes in total number of investment units issued and outstanding ........................................................................................ 41
3. Reference information .................................................................................................................................................................... 42(1) Information on values of assets under management, etc. ............................................................................................................. 42(2) Status of capital expenditures ...................................................................................................................................................... 56- 3 -1. Operating results(1) Operating results(A) Overview of the fiscal year under review(a) Brief history and principal activities
Japan Hotel REIT Investment Corporation (JHR) was established under the Act on Investment Trusts and Investment
Corporations (Act No. 198 of 1951, as amended; hereinafter referred to as the “Investment Trusts Act”) on November 10,
2005, and was listed on the Real Estate Investment Trust (REIT) section of the Tokyo Stock Exchange (Securities code: 8985)
on June 14, 2006.
JHR entrusts asset management to Japan Hotel REIT Advisors Co., Ltd. (hereinafter referred to as the “Asset Management
Company”). Focusing on importance as social infrastructure and profitability as investment real estate of hotels, JHR
primarily invests in real estate which are wholly or partially used as hotels or real estate equivalents of such real estate or
related assets that are backed by such real estate or real estate equivalents (hereinafter referred to as “Real Estate for Hotels,etc.”).
JHR, the former Nippon Hotel Fund Investment Corporation, merged with Japan Hotel and Resort, Inc. with an effective dateof April 1, 2012 (hereinafter referred to as the “Merger”), and changed its name to Japan Hotel REIT Investment Corporation.
Since the Merger through the end of the fiscal year under review, JHR has carried out ten public offerings for capital increase
and continuously acquired “highly competitive hotels” in mainly “strategic investment areas” where domestic and inboundleisure demand can be expected over the medium to long term.
By implementing the aforementioned growth strategy, JHR has expanded its asset size while improving the quality of its
portfolio through new property acquisitions of 32 properties amounting to ¥308,537 million (acquisition price basis) in total
since the Merger through the end of the fiscal year under review. As a result, JHR had a portfolio of 47 properties with a
combined acquisition price of ¥396,918 million, and the total number of investment units issued and outstanding stood at
4,637,006 units at the end of the fiscal year under review.
(b) Investment performance for the fiscal year under review
Throughout the period under review (the 12-month period from January 1, 2023 to December 31, 2023), the Japanese
economy exhibited a gradual recovery trend. This improvement followed the reclassification of new coronavirus infections
to a category five infectious disease in May, signaling a shift towards overcoming the COVID-19 pandemic and normalizing
socio-economic activities. Despite the impact of rising prices, personal consumption remained robust, contributing to theongoing gradual recovery of the economy.
The domestic accommodation and tourism market saw no decline in demand even as the national travel subsidy program, adomestic tourism promotion program, gradually came to an end in the second half of the year, and domestic demand remained
firm throughout the year. In terms of foreign visitors to Japan (hereinafter referred to as “inbound visitors”), while inboundvisitors from China, which represented approximately 30% of the total in 2019 before the COVID-19 pandemic, has not fully
recovered, there is an overall steady recovery led by countries and regions such as South Korea, the United States, andSingapore. Notably, in October 2023, the number of inbound visitors surpassed that of the same month in 2019 for the firsttime since the onset of the COVID-19 pandemic. As a result, the number of inbound visitors for the year 2023 was estimatedto be 25.06 million, which represents an increase of 554.1% compared to the previous year and a decrease of 21.4% compared
to 2019.
The Overnight Travel Statistics Survey indicates that the number of Japanese overnight guests in domestic accommodationsfor 2023, based on preliminary figures, nearly reached the pre-pandemic level, showing a 0.2% decrease compared to 2019.
The number of total foreign overnight guests has returned to a 1.3% decrease compared to 2019. As a result, the total numberof overnight stays at domestic accommodation facilities in 2023, based on preliminary data, amounted to 593 million,
marking a 31.8% increase from the previous year and a 0.4% decrease compared to 2019.
Under such circumstances, JHR resumed the implementation of its external growth strategy, which it had approachedcautiously during the COVID-19 pandemic. JHR acquired UAN kanazawa in January 2023 and Sotetsu Fresa Inn ShimbashiKarasumoriguchi in March 2023, using cash on hand and further acquired three properties, La'gent Stay Sapporo Odori,
Oriental Hotel Kyoto Rokujo and Hotel Oriental Express Fukuoka Nakasukawabata, in September 2023 through the firstpublic offering since the COVID-19 pandemic. In December of the same year, JHR acquired Hotel JAL City Kannai- 4 -Yokohama, entirely financed by debt. As a result, JHR acquired a total of six properties in 2023 at an acquisition price of¥33.3 billion.
JHR acquired highly competitive hotels in the market where accommodation demand is expected to grow, thereby enhancing
the quality of its portfolio.
For its internal growth, JHR maintained close communication with the lessees and operators of each hotel to improve revenue
by implementing a high unit-price sales strategy, as the domestic accommodation and tourism market continues to experiencea steady recovery. In addition, JHR continued its efforts to improve profitability through measures to reduce operating costs.
In particular, the Hotel Management Japan Co., Ltd. (hereinafter referred to as “HMJ”) and its subsidiary (hereinaftercollectively referred to as the “HMJ Group”), which are group companies of the Asset Management Company, continued toreduce costs through restructuring implemented since the beginning of the COVID-19 pandemic. At the same time, they
promoted proactive measures to improve profit using strategic CAPEX (capital expenditure) and worked to improve sales
through revenue management with an emphasis on ADR (Note 1).
As part of its internal growth strategy, JHR implemented strategic CAPEX to increase profits and strengthen competitiveness.
During the year under review, JHR conducted guest room renovation of Kobe Meriken Park Oriental Hotel, Oriental HotelTokyo Bay, and Oriental Hotel Okinawa Resort & Spa to increase their ADRs. Additionally, JHR comprehensively renovated
the restaurants at Kobe Meriken Park Oriental Hotel and Oriental Hotel Tokyo Bay, not only upgrading the spaces to a higher
quality but also refreshing the menus to raise unit prices.
In April 2023, upon the expiration of its lease contract, dormy inn Kumamoto introduced a variable rent scheme linked to
GOP (Note 2) for new contracts, in addition to the same fixed rent as before. This allows JHR to enjoy upside gains as thehotel market recovers.
Under these circumstances, with regard to the performance of the hotels owned by JHR, the RevPAR (Note 4) of the 25
Hotels with Variable Rent, etc. (Note 3) for the year under review was up 65.9% from the previous year, a significant increaseover the previous year. GOP was ¥20,162 million, a 127.2% increase compared to the previous year, thanks to improved
profitability resulting from the recovery of the domestic accommodation and tourism market and successful cost management
measures at the hotels.
For further details of sales, GOP (gross operating profit) and other operating indexes for the 25 Hotels with Variable Rent,
etc., please refer to “<Reference Information 2> Hotel operation indexes, sales and GOP (Gross Operating Profit)” on page17.
(Note 1)
(Note 2)
(Note 3)

ADR refers to the average guest room unit sales price (Average Daily Rate), which is calculated by dividing total room sales (including
service charges) for a given period by the total number of guest rooms sold for the same period. The same shall apply hereinafter.
GOP refers to Gross Operating Profit, which is the amount remaining after deducting expenses related to hotel operations, such as
personnel costs and general administrative expenses from hotel sales. The same shall apply hereafter.
The 25 Hotels with Variable Rent, etc., refer to the 25 hotels, consisting of the 16 HMJ Hotels, plus the Accor Group Hotels and the Ishin
Group Hotels. The same shall apply hereinafter.
The Five HMJ Hotels refer to the following five hotels JHR leases to HMJ.
Kobe Meriken Park Oriental Hotel
Oriental Hotel Tokyo Bay
Namba Oriental Hotel
Hotel Nikko Alivila
Oriental Hotel Hiroshima
The 16 HMJ Hotels refer to The Five HMJ Hotels plus the following 11 hotels which JHR leases to subsidiaries of HMJ.
Oriental Hotel Okinawa Resort & Spa
Sheraton Grand Hiroshima Hotel (main facility of ACTIVE-INTER CITY HIROSHIMA)
Oriental Hotel Fukuoka Hakata Station
Holiday Inn Osaka Namba
Hilton Tokyo Narita Airport
International Garden Hotel Narita
Hotel Nikko Nara
Hotel Oriental Express Osaka Shinsaibashi
Hilton Tokyo Odaiba- 5 -Oriental Hotel Universal City
Hotel Oriental Express Fukuoka Tenjin
The Accor Group Hotels refer to the following five hotels: ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, Mercure
Okinawa Naha and Mercure Yokosuka.
The Ishin Group Hotels refer to the following four hotels: the b suidobashi, the b ikebukuro, the b hachioji, and the b Hakata.
(Note 4)

RevPAR represents Revenue Per Available Room, which is calculated by dividing total room sales (including service charges) for a given
period by the total number of guest rooms available for sale during the same period. The same shall apply hereinafter.

(c) Funding status
In the fiscal year under review, JHR borrowed ¥800 million to partially finance the acquisition of UAN kanazawa in January2023, and in September of the same year, borrowed ¥7,000 million in addition to ¥11,857 million financed through the public
offering to fund the acquisition of three properties (La'gent Stay Sapporo Odori, Oriental Hotel Kyoto Rokujo and Hotel
Oriental Express Fukuoka Nakasukawabata). In December of the same year, JHR also borrowed ¥4,000 million yen to fundthe acquisition of Hotel JAL City Kannai Yokohama.
On the other hand, JHR borrowed a total of ¥49,745 million to refinance existing loans that became due for repayment in theyear under review with long-term loans with a maximum maturity of 6 years. Through these refinancings, JHR sought tolengthen loan terms and diversify loan maturities.
In addition, the Kansai Mirai Bank, Limited, Ltd. and Hokuriku Bank, Ltd. were added as new lenders to JHR in January2023, and the Tokyo Star Bank, Limited, was added in March, further strengthening the lender formation.
Consequently, as of the end of the fiscal year under review, the balance of interest-bearing debt totaled ¥175,231 million,
including short-term loans payable of ¥15,568 million, current portion of long-term loans payable of ¥21,521 million, longterm loans payable of ¥101,242 million, current portion of investment corporation bonds of ¥3,000 million and investment
corporation bonds of ¥33,900 million. As a result, the ratio of interest-bearing debt to total assets (Note) at the end of the
fiscal year under review stood at 40.8%, and the ratio of fixed interest rate to total interest-bearing debt at the end of the fiscal
year under review was at 65.9%.
(Note)The ratio of interest-bearing debt to total assets at the end of period = Balance of interest-bearing debt at the end of period / Total assets
at the end of period x 100

JHR’s issuer ratings as of the end of the fiscal year under review are as follows:
Rating agency

Rating details

Japan Credit Rating Agency, Ltd. (JCR)

Long-term Issuer Rating: A+

Outlook: Stable

Rating and Investment Information, Inc. (R&I)

Issuer Rating: A

Rating Outlook: Stable(d) Financial results
As a result of the abovementioned asset management, for the year under review, JHR recorded operating revenue of ¥26,574
million, operating income of ¥15,014 million, ordinary income of ¥13,135 million, and net income of ¥13,134 million.
Dividend payments amounted to ¥13,980 million. This figure represents the total of ¥13,982 million, comprising ¥13,137
million in unappropriated retained earnings for the year under review and ¥845 million from the reversal of the reserve fortemporary differences (appropriation for dividends), after excluding any fractional amounts of less than one yen of dividend
per unit. As a result, the dividend per unit was ¥3,015.
(B) Outlook for the next fiscal year(a) Investment policies and issues to be addressed
Although the Japanese economy's outlook demands continued vigilance regarding the effects of fluctuations in financial andcapital markets and the international situation, further economic recovery is expected due to the normalization of economic
and social activities among other factors.
While concerns remain about the impact of rising prices and other factors on domestic leisure demand, the need for domestic
travel remains solid in the improving employment and income environment and is expected to continue to be strong. Inbound- 6 -demand from South Korea, Taiwan, the U.S., and Hong Kong is already at or above the pre-pandemic level, and in China,
where recovery has been slow, a recovery is expected, especially for individual travel. The number of inbound visitors in
2024 is expected to exceed that of 2019 to reach a record high.
JHR believes that the hotel market will overcome the impact of the COVID-19 pandemic and enter a growth phase due to
steady domestic demand and strong inbound demand.
JHR aims to achieve ADR-driven RevPAR growth by proactively capturing demand in the strong accommodation market
and implementing a high unit-price sales strategy. JHR will also work to increase sales in the non-rooms department as themarket is recovering, through effective efforts on both infrastructure aspects such as renovation and services aspects such asservice improvements. In terms of costs, JHR will continue the efficient management of each hotel by reviewing operations,etc., which has been achieved in cooperation with the lessees and operators and will strive to improve profitability by
optimizing the resources in line with the recovery in demand. In particular, the HMJ Group, a strategic partner of JHR, plansto identify hotels with particularly high growth potential and renovate them through strategic CAPEX aimed at boosting sales
in guest rooms and restaurants.
JHR expects that inbound accommodation demand will continue to increase over the medium to long term, driven by thesignificant potential for overseas travel demand globally, particularly from Asian countries experiencing rising income levels
and due to Japan's sustained popularity as a travel destination. Consequently, JHR considers that the tourism andaccommodation market is expected to grow.
JHR believes that the location and competitiveness of individual hotels, as well as the ability of operators (i.e., their ability
to differentiate themselves from other hotels, improve profitability, including cost control, and execute to capture recovering
demand), will differentiate the performance of hotels.
Recognizing this environment, JHR, along with the Asset Management Company, will continue to implement a differentiation
strategy that leverages its experience as a J-REIT specializing in hotels and will manage its properties according to thefollowing policy.
Internal growth
JHR will secure stability mainly through fixed rents and upside potential through the implementation of an active asset
management strategy that actively seeks to improve property profitability and asset value through various means, including
the adoption of brands that match the characteristics of the hotel and collaboration with the HMJ Group.
For fixed-rent properties, JHR will continue to focus on setting and maintaining appropriate rents, considering either themarket rent level where each hotel is situated, or the lessee's creditworthiness and capacity to bear rent. Additionally, JHR
intends to increase rents (including the introduction of revenue-sharing rent) in alignment with the accommodation market's
conditions.
For hotels under variable rent contracts and under a management contract structure, JHR is working to increase variable rent,
etc.by implementing active asset management strategies.
(i) Properties under variable rent contracts
JHR works to enhance the profitability of its properties under variable rent contracts through its active asset management
strategies. JHR has adopted world-leading international brands such as Hilton, Sheraton, Mercure and Holiday Inn as well as
leading brands in Japan including Oriental Hotel (brand of the HMJ Group) and Hotel Nikko and, together with excellent
operators, aims to increase variable rent, etc. through improved performance of these hotels.
JHR collaborates with the operators to boost hotel performance by requesting them to implement marketing strategies toattract domestic and inbound visitors considering the growth potential of their demand, measures to maintain and increase
room rates, and realization of synergy effects such as cost reductions by managing multiple properties.

- 7 -Meanwhile, JHR will continue to work closely with the lessees and operators of each hotel to create attractive products andprovide added value by fully utilizing the characteristics of the owned properties, effective marketing measures, andexpansion of sales channels in order to capture domestic and overseas demand in the future. In addition, JHR will continue
its efforts for cost management and operational rationalization and promote various measures to improve hotel revenues.
In addition, JHR will accurately assess the domestic accommodation and tourism market situation and changing customer
needs, and implement appropriate strategic CAPEX as needed to improve hotel revenues. The guest room renovations ofKobe Meriken Park Oriental Hotel, Oriental Hotel Tokyo Bay, and Oriental Hotel Okinawa Resort & Spa that were carriedout in 2023 are scheduled to continue in the next fiscal year. In addition, Namba Oriental Hotel plans to renovate the lobby
floor and newly construct guest rooms, and La'gent Stay Sapporo Odori plans to partially renovate guest rooms.
(ii) Properties under fixed rent contracts
JHR will monitor operating conditions of these hotels appropriately and pay careful attention to each lessee’s ability to bear
the cost of rent. JHR will negotiate rent increases and the introduction of variable rent with hotels whose performance andrent-bearing capacity have recovered in order to increase JHR’s revenue from these hotels. In addition, JHR will continuously
execute investment to maintain and renew facilities and equipment in order to ensure each hotel becomes prominent in themarket and to maintain and enhance asset value.
External growth
In terms of external growth strategy, JHR will continue targeting acquisition of highly competitive real estate for hotels, etc.
(Hotel Assets) in areas which can expect “domestic and inbound leisure demand” over the medium to long term. In addition,
JHR will build a portfolio which can secure stable revenues with future growth potential in mind in order to achieve upside
gains.
Upon acquiring properties, JHR will focus on infrastructure aspects of the relevant Hotel Assets such as buildings andfacilities, services aspects such as the credibility of the hotel lessee and operator (including the ability of the hotel lessee tobear the cost of rent) as well as operation and management capabilities, and the properties’ locational superiority that serves
as the base for stability in demand and growth potential.
Specifically, JHR will aim to invest in “full-service hotels” and “resort hotels” that pose barriers to new opening due to suchfactors as operation and management know-how required for operating the hotels and limitations in terms of invested capitaland location. As for “limited-service hotels,” JHR emphasizes the credibility and operation capabilities of the hotel lessee
and operator as well as the building age, location, guestroom composition, profitability, etc. of the properties. Moreover, JHR
will take a particularly selective approach to hotels specialized for accommodation and of a budget type (low price zone) thatmainly offers single rooms and where the source of competitiveness relies only on prices.
In the hotel trading market, against the backdrop of a recovery and growth expectations in the hotel industry, along with amore flexible lending stance by financial institutions, not only for foreign investors but also domestic investors, including JREITs, are actively considering investments in hotels. This could lead to an increase in active buying and selling of hotels.
Going forward, while closely monitoring market trends from many angles, JHR will flexibly respond to changes in earnings
structures of hotels and the investment environment by leveraging the strengths and advantages it has cultivated as a J-REIT
specializing in hotel investment and JHR will aim to expand asset size that accompanies improvement of the portfolio quality
through acquiring highly competitive properties, while utilizing the operation platform of the HMJ Group as necessary.
Finance strategy
JHR will focus on enhancing financial stability and soundness and intends to maintain and improve the relationship of trustwith financial institutions with which it does business through close communication, leading to strengthen the lenderformation.

- 8 -With the hotel market in the midst of a full-fledged recovery, JHR aims to secure a certain fixed interest ratio, lengthen loan
terms, and diversify loan maturities, while paying attention to borrowing costs. At the same time, JHR will strengthen its
financial base by inviting new lenders and controlling capital expenditures appropriately. The ratio of interest-bearing debt
to total assets will be maintained at or below 50% as before. In addition, JHR will further diversify its financing methods,
including consideration of issuing investment corporation bonds and utilizing green finance.

Policy on handling of negative goodwill
From the fiscal year ended December 31, 2017 (18th period), JHR started appropriation for dividends through reversal ofreserve for temporary difference adjustment in connection with partial amendments to the “Ordinance on Accounting ofInvestment Corporations” (Cabinet Office Ordinance No. 47 of 2006, as amended; hereinafter referred to as the “Ordinanceon Accountings of Investment Corporations”) and the “Regulation for Real Estate Investment Trusts and Real Estate
Investment Corporations” of The Investment Trusts Association, Japan. JHR stipulated a policy to reverse ¥262 million(hereinafter called the “50-year amortization amount of negative goodwill”), which is an amount equivalent to 2% (1/50) of
the balance of the reserve for temporary difference adjustment for the fiscal year ended December 31, 2017, to pay out as
dividends every year, with the balance of the reserve for temporary difference adjustment remaining at the time of reversal
set as the maximum reversal amount (Note).
Furthermore, in cases of incurrence of losses caused by property dispositions, impairment loss of assets, dilution of dividend
per unit due to the issuance of new investment units through public offerings, etc., loss on retirement of noncurrent assets,
and suspension of sales and such due to large-scale renovations with significant impact on revenues, JHR stipulated a policy
to reverse additional portion of the negative goodwill on top of the 50-year amortization amount of negative goodwill (¥262
million) (Note).
(Note)The policy may change due to a resolution of the board of directors, and it does not guarantee the method of reversing the reserve fortemporary difference adjustment, and amounts to be reversed, etc., in the future.

Initiatives for sustainability
In recent years, consideration for ESG (Environment, Social and Governance) has grown in importance in the investment
management industry from the standpoint of long-term sustainability. JHR recognizes that conducting real estate investment
management that considers for ESG is important to maximize unitholder value and to further raise the attractiveness of JHR.
In addition, JHR believes that it is indispensable to establish favorable relationships with its stakeholders, including
unitholders, hotel guests, lessees, operators, business partners such as property managers, local communities, and officers
and employees of the Asset Management Company, and to fulfill our social responsibilities expected from each of them.
In order to put such ideas into practice, JHR, along with the Asset Management Company, has established a “Sustainability
Policy” as guidance to ESG initiatives. We have promoted efforts to reduce environmental impact at properties in our portfolio
based on this policy and received the Building-Housing Energy-efficiency Labeling System (BELS) evaluation for Hotel
Nikko Alivila and Mercure Okinawa Naha in February 2018 as first such cases for hotel properties owned by a J-REIT (Note1). Subsequently, UAN kanazawa acquired the BELS evaluation in February 2024, bringing the total number of BELSevaluated properties in JHR’s portfolio to three. In September 2018, JHR became the first J-REIT specializing in hotels to berecognized by GRESB (Note 2) for its environmental awareness and sustainability initiatives. And JHR acquired “Green Star”
in the GRESB Real Estate Assessment. Moreover, for the fourth consecutive year, JHR was selected as a Sector Leader of
Asian Hotel Sector in the GRESB Real Estate Assessment conducted in 2023. In April 2020, Hilton Tokyo Odaiba acquired
CASBEE (Comprehensive Assessment System for Built Environment Efficiency) Certification for Buildings, the first such
recognition for an existing property used as hotel. In May 2021, Oriental Hotel Fukuoka Hakata Station also acquired
CASBEE Certification for Buildings, the second case of such for an existing property used as hotels following Hilton Tokyo
Odaiba. In addition, in December 2021, JHR defined its materiality (key issues) in terms of ESG from the dual standpointsof stakeholder expectations and impact on its business. Also, the Asset Management Company expressed support for therecommendations of the Task Force on Climate-related Financial Disclosures (TCFD) established by the Financial Stability
Board (FSB), and joined the TCFD Consortium, an organization made up of Japanese companies that support therecommendations. In August 2022, it disclosed the initiatives for the four disclosure themes recommended by the TCFD,
including the degree of financial impact based on climate change-related scenario analysis and issued ESG report in February
2023. In addition, it is working to sequentially clarify targets in numerical terms, such as formulating and disclosing the CO2
reduction target by 2050 in February 2023. Going forward, JHR, together with the Asset Management Company, will continue
to actively promote enhancement of its initiatives and disclosure on a variety of sustainability issues.
- 9 -In January 2024, JHR formulated the Green Finance Framework as a framework for financing environmentally friendly
projects. In the future, JHR will utilize the funds financed based on the framework to promote initiatives for environmental
improvement.
From 2020 to May 2023, as part of its efforts to contribute to society, under the spread of COVID-19, JHR provided a totalof nine hotels as accommodation and treatment facilities for patients who tested positive for COVID-19, exhibiting mild orno symptoms and did not require hospitalization. However, since July 2023, JHR has resumed normal business operations at
all of its hotels.
Recognizing its social responsibility towards local communities as a J-REIT specializing in hotels, JHR will continue toproactively carry out social contribution activities capitalizing on the characteristics of the hotel sector and each hotel.
(Note 1)

Investigated by the Asset Management Company based on public information.

(Note 2)GRESB, which stands for Global Real Estate Sustainability Benchmark, is an annual benchmarking assessment to measure ESG(Environmental, Social and Governance) considerations of real estate companies and funds. It evaluates initiatives for sustainability ofreal estate companies, REITs and real estate funds, not of individual properties. The GRESB Rating makes relative assessment based on
total scores, with 5 Stars being the highest ranking.

(b) Significant subsequent events
Not applicable.

- 10 -

(c) Operating forecast
JHR estimates its operating forecast for the midterm of the fiscal year ending December 31, 2024 (25th period) and the fullyear ending December 31, 2024 (25th period) as follows. For the assumptions of the operating forecast, please refer to“Assumptions of the operating forecast for the midterm of the fiscal year ending December 31, 2024 (25th period) and thefull fiscal year ending December 31, 2024 (25th period)” on page 12.
Midterm of the fiscal year ending December 31, 2024 (25th period)
Operating revenue¥13,936 million

Operating income¥7,974 million

Ordinary income¥6,880 million

Net income¥6,880 million

Full year of the fiscal year ending December 31, 2024 (25th period)
Operating revenue¥31,288 million

Operating income¥18,815 million

Ordinary income¥16,713 million

Net income¥16,712 million

Dividend per unit

¥3,722

Dividend per unit resulting from excess of earnings¥－(Note) The forecast figures above are the current forecasts calculated based on certain assumptions. As such, actual operating revenue,
operating income, ordinary income, net income (net income for midterm period), dividend per unit, and dividend per unit resulting
from excess of earnings may vary due to changes in the circumstances. Furthermore, the forecasts are not intended to guarantee any
dividend amount.

- 11 -

Assumptions of the operating forecast for the midterm of the fiscal year ending December 31, 2024 (25th period) and full fiscal year
ending December 31, 2024 (25th period)
Item
Assumptions
Calculation
PeriodAssets underManagement

・・

Midterm of the fiscal year ending December 2024 (25th Period): January 1, 2024 through June 30, 2024 (182 days)
Full fiscal year ending December 2024 (25th Period): January 1, 2024 through December 31, 2024 (366 days)

・・The 47 properties owned by JHR as of today are assumed.
It is assumed that there will be no change (acquisition of new property or disposition of the existing properties, etc.)
in assets under management through the end of the fiscal year ending December 2024 (25th period). However,changes in the actual assets under management may take place.

・

Operating revenue is calculated based on the conditions of the lease and other effective contracts, taking into
consideration the competitiveness of hotels, market environment, and other factors. If there are lease contracts withfacilities other than hotels, such as commercial facilities and offices, operating revenue calculated based on the said
lease contracts is included.

・ Rents, etc. of the main hotels are calculated based on the following assumptions.
(1) The 19 HMJ Hotels (*1)
Rents for the 19 HMJ Hotels consist of fixed and variable rents, and variable rents are calculated using thefollowing formula.
Variable rent = [Hotel AGOP (*2) – Base Amount] x Variable rent ratio (%)
However, if AGOP is less than the Base Amount, the variable rent will be zero.
(Unit: millions of yen)Fixed rent
Variable rent
Total rent
Midterm

Full year

Midterm

Full year

Midterm

Full year

1,610

3,221

1,180

3,316

2,790

6,537

Oriental Hotel Universal City

158

316

578

1,454

736

1,771

Oriental Hotel Okinawa Resort & Spa

274

550

－

562

274

1,112

Sheraton Grand Hiroshima Hotel (*3)

174

348

122

323

296

671

Oriental Hotel Fukuoka Hakata Station

212

425

582

1,224

794

1,649

Holiday Inn Osaka Namba

288

576

307

693

595

1,269

Hotel Oriental Express Fukuoka Tenjin

67

135

183

394

251

529

Hilton Tokyo Narita Airport

222

444

60

201

282

645

International Garden Hotel Narita

168

336

110

235

278

571

Hotel Nikko Nara

210

420

15

117

225

537

Hotel Oriental Express
Osaka Shinsaibashi

55

110

41

87

96

197

Hilton Tokyo Odaiba

799

1,600

348

1,075

1,147

2,675

Oriental Hotel Kyoto Rokujo

85

171

48

133

134

304

Hotel Oriental Express
Fukuoka Nakasukawabata

87

174

68

148

155

322

Hotel JAL City Kannai Yokohama

67

135

30

83

98

218

4,480

8,962

3,678

10,053

8,159

19,015The Five HMJ Hotels

Operating
Revenue

Total- 12 -

Item
(*1)

(*2)
(*3)

Assumptions
The 19 HMJ Hotels refer to 19 hotels, consisting of the 16 HMJ Hotels plus the following three hotels acquiredin 2023: Oriental Hotel Kyoto Rokujo, Hotel Oriental Express Fukuoka Nakasukawabata and Hotel JAL City
Kannai Yokohama (hereinafter called the “Three HMJ Hotels acquired in 2023”). The same shall apply
hereinafter.
AGOP (adjusted GOP) is calculated by subtracting certain fees and other items from GOP. GOP (Gross
Operating Profit) is the remainder after expenses incurred in hotel operation, such as personnel costs andgeneral and administrative expenses, etc., are deducted from total sales. The same shall apply hereinafter.
The rent for Sheraton Grand Hiroshima Hotel, the major facility of ACTIVE-INTER CITY HIROSHIMA.
Fixed rent and variable rent from tenants of office and commercial facilities in ACTIVE-INTER CITYHIROSHIMA are as follows.
(Unit: millions of yen)Fixed rent
Variable rent
Total rent
Midterm

Full year

Midterm

Full year

Midterm

Full year

244

487

6

12

250

499

ACTIVE-INTER CITY HIROSHIMA(tenants of office and commercial
facility)(2) Income from management contracts (*4) and variable rent from other hotels with variable rent, etc.
(Unit: millions of yen)
Midterm
Full year

Operating
Revenue

ibis Styles Kyoto Station (*4)

149

315

ibis Styles Sapporo (*4)

238

583

Mercure Sapporo (*4)

284

652

Mercure Okinawa Naha (*4)

111

251

Mercure Yokosuka

152

317

the b suidobashi

3783

the b ikebukuro

116

240

the b hachioji

61

123

the b hakata

77

162

dormy inn Kumamoto

3

58

Comfort Hotel Tokyo Higashi Nihombashi

37

37

Smile Hotel Nihombashi Mitsukoshimae

25

25

Chisun Hotel Kamata

64

129

Chisun Inn Kamata

37

74

Hilton Tokyo Bay

Undisclosed (*5)

Undisclosed (*5)

Hilton Nagoya

Undisclosed (*5)

Undisclosed (*5)

UAN kanazawa

5

19

Sotetsu Fresa Inn Shimbashi-Karasumoriguchi

104

104

La’gent Stay Sapporo Odori

232

552

Total

2,213

5,056

(*4)

(*5)

Management contract structure is introduced. The management contract structure involves entrusting themanagement of owned hotel properties to the management company and incorporating the results of thebusiness into JHR as real estate operating revenue. The amount of GOP for each hotel is recognized as
management contract revenue and as operating revenue.
Undisclosed since tenants that concluded lease contracts did not agree to disclose rent revenue, etc.

- 13 -

Item

Assumptions
・The following is the breakdown of variable rent and income from management contracts.
(Unit: millions of yen)
Midterm
Full year

Operating
Revenue

The 19 HMJ Hotels

3,678

10,053

Other hotels with variable rent, etc.

2,213

5,056

6

12

5,897

15,121

Office and commercial tenants (*6)
Total
(*6)
(*7)

OperatingExpenses

Variable rent for office and commercial tenants of ACTIVE-INTER CITY HIROSHIMA is shown.
For details of variable rent, please refer to (a) Rent structures of hotels with variable rent, management contract
or revenue-sharing rent, c. Overview of the hotel business, I. Other major assets under management, B. Assets
under management, (1) Information on values of assets under management, etc.

・ With respect to real estate operating costs, which constitute a major part of the operating expenses,
expenses other than depreciation are calculated based on historical data, and variable factors are reflectedin the calculation.
It is assumed that ¥2,126 million will be recognized as expenses for fixed asset taxes, city planning taxes,
etc. In general, property taxes and city planning taxes for the year of acquisition on acquired assets aresettled with the previous owner on a pro-rata basis over a period of time, and the amount equivalent tosuch settlement is included in the acquisition cost.
・ Capital expenditure for the fiscal year ending December 2024 (25th Period) is assumed to be ¥6,988
million (¥3,506 million for Capital Expenditure I, ¥317 million for Capital Expenditure II and ¥3,165
million for Capital Expenditure III.)(*) JHR classifies capital expenditures into the following three categories. (I) Capital investment related to renewal ofequipment and facilities of buildings which is required to maintain proper values of properties, (II) capital
investment for fixtures, furniture and equipment that are not directly related to building structure or facilities but
necessary for operating hotels, and (III) strategic capital investment such as renovating guest rooms, etc. for
improving the competitiveness of the hotels.

・ Depreciation is calculated using the straight-line method including the planned capital expenditures above
and is assumed to be ¥5,345 million.
・ Repair expenses for buildings are recognized as expenses in the assumed amount necessary for each
operating period. Please note that the repair expenses of each operating period may differ materially fromthe forecast amount for various reasons, such as (1) Emergency repair expenses may be necessary due todamage to buildings from unexpected causes; (2) The amount of repair expenses generally tends toincrease in difference over time; and (3) Repair expenses are not required on a regular basis.

Non-operating
Expenses・ ¥2,101 million is expected for borrowing-related costs, including interest expense, amortization for
financing fees, arrangement fees, and other non-operating expenses.

・ The balance of interest-bearing debt (sum of loans and investment corporation bonds) as of today is¥175,231 million and it is assumed to remain unchanged until the end of fiscal year ending December
2024 (25th Period).
Interest-bearing・
It is assumed that loans totaling ¥37,089 million due by the end of the fiscal year ending December 2024
Debt
(25th period) will be fully refinanced.
・ It is assumed that investment corporation bonds of ¥3,000 million will be issued, equivalent to thosematuring by the fiscal year ending December 2024 (25th period).

- 14 -

Item

Assumptions

・ Dividend per unit for the fiscal year ending December 2024 (25th period) is calculated based on thefollowing assumptions.
Unappropriated retained earnings
Reversal of reserve for temporary difference adjustment(negative goodwill)
50-year amortization amount of negative goodwill (*1)
Loss on retirement of noncurrent assets (*2)
Amortization of trademark rights (*3)
Distributable amount
Total number of investment units issued
Dividend per unit
Dividend per
Unit

(*1)
(*2)
(*3)

¥16,712 million¥262 million¥231 million¥56 million¥17,261 million
4,637,006 units¥3,722¥262 million (hereinafter called “50-year amortization amount of negative goodwill”) is scheduled to be paidout as dividends, with the remaining balance of the reserve for temporary difference adjustment set as the
maximum amount, for every fiscal year.
The amount recognized as a loss on retirement of noncurrent assets will be appropriated by reserve fortemporary difference adjustment (negative goodwill) and is expected to have no impact on dividend per unit.
The trademark rights are amortized over 10 years using the straight-line method. Amortization is expected to berecognized during the current fiscal year will be appropriated by reserve for temporary difference adjustment(negative goodwill) and is expected to have no impact on dividend per unit.

・ Dividend per unit may fluctuate due to various causes, such as fluctuation of rent revenue resulting fromtransfer of assets under management, change of tenants, etc. at hotels, change in the business environmentof hotel business for hotel tenants, etc., unexpected repairs, and actual number of new investment units
issued, etc.
・ The remaining balance of the reserve for temporary difference adjustment (negative goodwill) after theappropriation of the reserve for temporary difference adjustment (negative goodwill) for dividends for the
fiscal year ending December 2024 (25th period) is expected to be ¥8,204 million.
Dividend per
Unit・ It is assumed that the excess of earnings (dividend per unit resulting from excess of earnings) will not be
Resulting
distributed.
from Excessof Earnings

Others・ It is assumed that revision in law, tax system, accounting standard, regulations of the listing, andregulations of the Investment Trusts Association, Japan that may impact the forecast above will not be
made.
・ It is assumed that unexpected major incidents will not occur in the general economy, real estate market
and hotel business environment, etc.
・ The numerical values are rounded down to the nearest millions of yen in the assumptions above.

- 15 -

<Reference Information 1> Highlights of the operating and dividend forecasts
Operating and dividend forecasts for the fiscal year ending December 31, 2024 (25th period) vs previous results andfactors causing variance

Dividend

Profit and Loss

Properties(Unit: millions of yen)
FY12/2023(24th Period)

FY12/2024(25th Period)

ActualForecast(A)(B)

Difference(B)-(A)

Properties
Existing
acquired
Properties
in
2023
% of
(*2)
(*1)
Increase/
Decrease

No. of Properties

47

47

－

－

－

－

Acquisition Price

396,918

396,918

－

－

－

－

Operating Revenue

26,57431,288

4,714

17.7%

1,294

3,419

Real Estate
Operating Revenue

26,57431,288

4,714

17.7%

1,294

3,419

Fixed Rent

14,65815,132

473

3.2%

474

(1)

Composition

55.2%

48.4%

Other Income

1,070

1,034

(36)

(3.4%)

11(47)

Composition

4.0%

3.3%

Variable Rent

10,844

15,121

Composition

40.8%

48.3%

4,277

39.4%

808

Factors Causing Variance

Properties acquired in 2023:
Three HMJ Hotels acquired in 2023: +JPY386MM
Sotetsu Fresa Inn Shimbashi-Karasumoriguchi:+JPY68MM

Properties acquired in 2023:
Three HMJ Hotels acquired in 2023: +JPY279MM
La’gent Stay Sapporo Odori: +JPY424MM
3,468
Sotetsu Fresa Inn Shimbashi-Karasumoriguchi:+JPY104MM
Existing Properties:
The 16 HMJ Hotels: +JPY2,793MM
The Accor Group Hotels: +JPY522MM
The Ishin Group Hotels: +JPY101MM

NOI (*3)

22,344

26,825

4,481

NOI Yield (*3)

5.6%

6.8%

1.1pt

20.1%

1,207

3,273

24.2%

1,072

3,067

NOI after Depreciation (*3)

17,10821,248

4,140

NOI Yield after Depreciation (*3)

4.3%

5.4%

1.0pt

Operating Income

15,014

18,815

3,800

25.3%

Ordinary Income

13,135

16,713

3,577

27.2%

Net Income

13,134

16,712

3,577

27.2%

Amount of Reversal from Reserve
for Temporary Difference
Adjustments(Negative Goodwill)

845

549

(295)

Total Dividends

13,98017,2583,278

No. of Unit Issued (Unit)

4,637,006

4,637,006－

Dividend per Unit (JPY)

3,015

3,722

707

Amount of reversal from reserve for temporary difference adjustments
FY2023:(35.0%) 50-year amortization amount on negative goodwill: JPY262MM
Loss on retirement of noncurrent assets: JPY151MM
Amortization of trademark rights: JPY56MM
23.4% Dilution: JPY375MM
FY2024:50-year amortization amount on negative goodwill: JPY262MM
Loss on retirement of noncurrent assets: JPY231MM
23.4%
Amortization of trademark rights: JPY56MM－(*1) The “Properties acquired in 2023” refer to the following six hotels acquired in 2023. The same shall apply hereinafter.
UAN kanazawa
Sotetsu Fresa Inn Shimbashi-Karasumoriguchi
La’gent Stay Sapporo Odori
Oriental Hotel Kyoto Rokujo
Hotel Oriental Express Fukuoka Nakasukawabata
Hotel JAL City Kannai Yokohama(*2) The “Existing Properties” refer to the 41 hotels, excluding the Properties acquired in 2023, from all 47 hotels held by JHR as of today. The same shallapply hereinafter.
(*3) Each is calculated using the following formula. The same shall apply hereinafter.
NOI (Net Operating Income) = Real estate operating revenue - Real estate operating costs + Depreciation and amortization + Loss on retirement of
noncurrent assets + Asset retirement obligation cost.
NOI yield = NOI / acquisition price.
NOI after depreciation＝Real estate operating revenue - Real estate operating costs.
NOI yield = NOI after depreciation / acquisition price.

- 16 -

<Reference Information 2> Hotel operation indexes, sales and GOP (Gross Operating Profit)
The numeral figures are based on figures obtained from hotel lessees, etc. Please note that these figures have not been audited nor
have they gone through other procedures. No guarantee is made as to the accuracy or completeness of the figures and information.
ADR (Note 1) and RevPAR (Note 2) are rounded off to the nearest yen. Sales and GOP are rounded off to the nearest million yen.
Occupancy rate and comparison with the previous period are rounded off to one decimal place.

<1> The 16 HMJ Hotels
Fiscal year ended December 2023
Comparison
Actualwith previous
fiscal year

Occupancy Rate

ADR
(JPY)

RevPAR(JPY)

First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year

Fiscal year ending December 2024
Comparison
Forecastwith previous
fiscal year

76.0%

21.3pt

82.0%

6.0pt

81.4%

8.0pt

84.6%

3.2pt

78.7%

14.6pt

83.3%

4.6pt

18,75352.6%

20,495

9.3%

22,21529.2%

24,038

8.2%

20,55836.0%

22,304

8.5%

14,243112.1%

16,80418.0%

18,082

43.2%

20,327

12.4%

16,17966.9%18,575

14.8%

Sales (JPY MM)

23,12281.8%

26,603

15.1%

Rooms Dept.

13,821112.1%

16,396

18.6%

7,898

69.1%

9,118

15.4%

F&B Dept.

First half ofthe year

Others

1,403(8.4%)

1,089(22.4%)

Sales (JPY MM)

28,38028.8%

32,007

12.8%

17,83743.2%

20,051

12.4%

9,236

14.7%

10,795

16.9%

Others

1,307(14.4%)

1,161(11.2%)

Sales (JPY MM)

51,503

48.2%

58,61013.8%

Rooms Dept.

31,65866.9%

36,44715.1%

17,134

34.7%

19,914

16.2%

2,711

(11.4%)

2,250(17.0%)

7,166

366.6%

8,743

22.0%

10,546

69.5%

12,061

14.4%

17,712

128.3%

20,804

17.5%

Rooms Dept.
F&B Dept.

F&B Dept.

Second half ofthe year

Full year

OthersGOP(JPY MM)First half ofthe year
Second half ofthe year
Full year(Note 1) ADR refers to the average guest room unit sales price (Average Daily Rate), which is calculated by dividing total room sales (including
service charges) for a given period by the total number of guest rooms sold for the same period. The same shall apply hereinafter.
(Note 2) RevPAR represents Revenue Per Available Room, which is calculated by dividing total room sales (including service charges) for a given
period by the total number of guest rooms available for sale during the same period. The same shall apply hereinafter.

- 17 -

<2> The 19 HMJ Hotels
Fiscal year ended December 2023
Comparison
Actualwith previous
fiscal year

Occupancy Rate

ADR
(JPY)

RevPAR(JPY)

First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year

Fiscal year ending December 2024
Comparison
Forecastwith previous
fiscal year

75.8%

21.2pt

82.3%

6.5pt

81.3%

7.8pt

84.8%

3.5pt

78.6%

14.4pt

83.5%

5.0pt

18,055

46.9%

19,698

9.1%

21,28623.8%

22,9998.0%

19,74030.6%

21,383

8.3%

13,685103.8%

16,20418.4%

17,30237.1%

19,50712.7%

15,50860.0%

17,865

15.2%

Sales (JPY MM)

23,94788.3%

27,668

15.5%

Rooms Dept.

14,564123.5%

17,341

19.1%

7,972

70.6%

9,229

15.8%

F&B Dept.

First half ofthe year

Others

1,411(7.9%)

1,098(22.2%)

Sales (JPY MM)

29,37333.3%

33,19013.0%

18,72050.3%

21,105

12.7%

9,335

16.0%

10,915

16.9%

Others

1,317(13.7%)

1,170(11.2%)

Sales (JPY MM)

53,32053.4%

60,858

14.1%

Rooms Dept.

33,28475.5%

38,44615.5%

17,30736.0%

20,144

16.4%

2,729

(10.8%)

2,268(16.9%)

7,464

386.0%

9,183

23.0%

10,935

75.8%

12,57715.0%

18,399137.2%

21,76018.3%

Rooms Dept.
F&B Dept.

F&B Dept.

Second half ofthe year

Full year

OthersGOP(JPY MM)First half ofthe year
Second half ofthe year
Full year- 18 -

<3> The 25 Hotels with Variable Rent, etc.
Fiscal year ended December 2023
Comparison
Actualwith previous
fiscal year

Occupancy Rate

ADR
(JPY)

RevPAR(JPY)

First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year

Fiscal year ending December 2024
Comparison
Forecastwith previous
fiscal year

76.0%

20.2pt

81.7%

5.7pt

80.9%

6.7pt

84.3%

3.5pt

78.4%

13.4pt

83.0%

4.6pt

16,61852.8%

18,35910.5%

19,72931.4%

21,173

7.3%

18,234

37.6%

19,796

8.6%

12,628108.3%

15,00618.8%

15,95543.2%

17,85811.9%

14,30565.9%

16,440

14.9%

Sales (JPY MM)

26,22182.5%

30,492

16.3%

Rooms Dept.

16,465108.3%

19,675

19.5%

8,272

70.3%

9,649

16.6%

F&B Dept.

First half ofthe year

Others

1,484(7.4%)

1,168(21.3%)

Sales (JPY MM)

32,21130.2%

36,285

12.7%

21,14943.2%

23,671

11.9%

9,679

15.9%

11,36917.5%

Others

1,383(14.3%)

1,245(10.0%)

Sales (JPY MM)

58,432

49.4%

66,777

14.3%

Rooms Dept.

37,61465.9%

43,34715.2%

17,951

35.9%

21,017

17.1%

2,867

(10.9%)

2,413(15.8%)

8,164

348.8%

10,15024.3%

11,99870.1%

13,74414.5%

20,162

127.2%

23,894

18.5%

Rooms Dept.
F&B Dept.

F&B Dept.

Second half ofthe year

Full year

OthersGOP(JPY MM)First half ofthe year
Second half ofthe year
Full year- 19 -

<4> The 28 Hotels with Variable Rent, etc. (Note)Fiscal year ended December 2023
Comparison
Actualwith previous
fiscal year

Occupancy Rate

ADR
(JPY)

RevPAR(JPY)

First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year
First half ofthe year
Second half ofthe year
Full year

Fiscal year ending December 2024
Comparison
Forecastwith previous
fiscal year

75.9%

20.1pt

82.0%

6.1pt

80.8%

6.6pt

84.6%

3.7pt

78.4%

13.3pt

83.3%

4.9pt

16,22749.3%

17,89910.3%

19,184

27.7%

20,578

7.3%

17,76434.0%

19,267

8.5%

12,311103.0%

14,67019.2%

15,50439.2%

17,40012.2%

13,92061.4%

16,043

15.2%

Sales (JPY MM)

27,04688.3%

31,557

16.7%

Rooms Dept.

17,209117.7%

20,620

19.8%

8,345

71.9%

9,759

16.9%

F&B Dept.

First half ofthe year

Others

1,492(6.9%)

1,177(21.1%)

Sales (JPY MM)

33,20334.2%

37,46912.8%

22,031

49.2%

24,726

12.2%

9,778

17.0%

11,488

17.5%

Others

1,393(13.7%)

1,254(10.0%)

Sales (JPY MM)

60,24954.1%

69,025

14.6%

Rooms Dept.

39,24073.1%

45,34615.6%

18,12437.2%

21,248

17.2%

2,885

(10.3%)

2,431(15.7%)

8,462

365.2%

10,59025.2%

12,38875.6%

14,25915.1%

20,849134.9%

24,85019.2%

Rooms Dept.
F&B Dept.

F&B Dept.

Second half ofthe year

Full year

OthersGOP(JPY MM)(Note)First half ofthe year
Second half ofthe year
Full year

The 28 Hotels with Variable Rent, etc. refer to 28 hotels, consisting of the 19 HMJ Hotels plus the Accor Group Hotels and the Ishin Group
Hotels.

- 20 -

2. Financial statements(1) Balance sheets(thousands of yen)
As ofDecember 31, 2022
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Income taxes receivable
Derivatives
Other
Total current assets
Noncurrent assets
Property and equipment, at cost
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Construction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Net property and equipment
Intangible assets
SoftwareTrademark rightLeasehold rights in trust
Fixed-term leasehold rights in trust
Other
Total intangible assets
Investments and other assets
Security deposits
Leasehold and security deposits in trust
Long-term prepaid expenses
Derivative assets
Reserve for repairs and maintenanceTotal investments and other assets
Total noncurrent assets
Deferred assets
Investment unit issuance costs
Investment corporation bond issuance costs
Total deferred assets
Total assets- 21 -

As ofDecember 31, 2023

21,142,716
8,372,349
4,442,532
484,478
41－
111,037
34,553,157

17,693,462
10,821,626
4,850,631
626,30838
1,499
56,376
34,049,942

804,339(373,775)
430,5635,911,833(3,835,395)
2,076,438
1,155*1 140,026,191(31,713,554)
108,312,636
2,963,947(659,914)
2,304,033
693,008(228,779)
464,228
129,718(111,540)
18,178212,263,515
118,127
325,988,877

949,797(451,651)
498,146
6,865,827(4,507,557)
2,358,270
11,434*1 152,039,254(35,463,200)
116,576,053
3,058,840(730,047)
2,328,793
793,859(264,608)
529,250
129,718(113,038)
16,680237,641,649
120,897
360,081,175

257,298
411,320
27,324,752
4,495,583
5,240
32,494,195

226,128355,231
27,324,752
4,360,378
4,561
32,271,051

12,520139,668
1,958,131
1,195,251
327,173
3,632,745
362,115,817

12,520139,668
2,565,747
398,477
300,469
3,416,883
395,769,110

4,165
126,802130,967
396,799,942

40,37995,957
136,336
429,955,390

(thousands of yen)
As ofDecember 31, 2022
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of investment corporation bonds payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Dividends payable
Deposits received
Derivative liabilities
Other
Total current liabilities
Long-term liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivative liabilities
Deferred tax liabilities
Asset retirement obligations
Total long-term liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Voluntary reserve
Reserve for temporary difference adjustment
Reserve for tax purpose reduction entry
Total voluntary reserve
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains (losses) on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 22 -

As ofDecember 31, 2023

1,943,815
35,113,000－
15,432,000
570,397
1,210
398,802664,196
6,473
2,592
11,07921,994
54,165,561

2,506,632
15,568,000
3,000,000
21,521,000
659,264
1,210
470,254764,638
3,634
9,966
2,626
77,81644,585,044

36,900,000
76,786,000
1,040,520
3,619,666－
375,207338,413
119,059,807
173,225,369

33,900,000
101,242,000
1,040,520
3,739,687
1,951
125,832
340,051
140,390,042
184,975,086

187,194,209

199,051,879

21,746,398

21,746,398*2

9,976,515
1,174,860
11,151,375*29,600,013
1,174,860
10,774,874

2,672,927

13,137,051

35,570,702
222,764,911

45,658,325
244,710,204

809,661
809,661*3 223,574,572
396,799,942

270,099
270,099*3 244,980,303
429,955,390

(2)Statements of income(thousands of yen)
For the year ended
December 31, 2022

Operating revenue
Real estate operating revenue
Other real estate operating revenue
Total operating revenue
Operating Expenses
Real estate operating costs
Asset management fee
Asset custody and administrative service fee
Directors’ compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Gain on forfeiture of unclaimed dividends
Gain on insurance claims
Interest on tax refunds
Gain on derivative instruments
Other
Total non-operating income
Non-operating Expenses
Interest expense
Interest expense on investment corporation bonds
Borrowing costs
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Loss on derivative instruments
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Subsidy income
Total extraordinary income
Extraordinary loss
Loss on tax purpose reduction entry of non-current assets
Total extraordinary loss
Income before income taxes
Income taxes – current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)- 23 -*1*1

For the year ended
December 31, 2023

13,925,987
986,984
14,912,972

*1

*1

*1

8,796,879
1,491,325
115,661
17,400
195,024
10,616,291
4,296,681*1

25,503,799
1,070,755
26,574,555
9,466,357
1,745,752
117,832
17,700212,405
11,560,047
15,014,507

270
3,533
2,250
－
13,228541
19,824

253
3,890
－
40
3,298
－
7,483

855,183
301,631436,444
32,0903,570－
14,6191,643,539
2,672,966

868,687
282,254681,764
30,844
8,543
3,135
11,4881,886,717
13,135,273

－
－

7,972
7,972

－
－
2,672,966
1,210
1,210
2,671,756
1,171
2,672,927

7,915
7,915
13,135,330
1,210
1,210
13,134,120
2,930
13,137,051
*2

(3)

Statements of changes in net assets
For the year ended December 31, 2022
(thousands of yen)
Unitholders’ equity
Total
unitholders’equitySurplus
Unitholders’capitalVoluntary reserve
Total
voluntary
reserve

Unappropriat
ed retained
earnings(undisposed
loss)

Total surplus

11,486,747

1,300,724

34,533,870

221,728,079(335,371)

335,371－－

Dividends paid

(1,634,924)(1,634,924)(1,634,924)

Net income (loss)

2,671,756

2,671,756

2,671,756

Capital surplus

Balance, January 1,
2022
Changes of items during
the year:
Reversal of reserve
for temporary
difference adjustment

Net changes of items
other thanunitholders’ equity
Total changes of
items during the year
Balance, December 31,
2022

187,194,209

21,746,398

Reserve fortemporarydifference
adjustment

Reserve for tax
purposereduction entry

10,311,886

1,174,860(335,371)－*1

187,194,209－(335,371)－(335,371)

1,372,203

1,036,832

1,036,832

21,746,398

9,976,515

1,174,860

11,151,375

2,672,927

35,570,702

222,764,911

Valuation and translation
adjustments
Total
Total net assets
Deferred gains
valuation and(losses) on
translation
hedgesadjustments
Balance, January 1,
2022
Changes of items during
the year:
Reversal of reserve
for temporary
difference adjustment(185,733)(185,733)

221,542,346－

Dividends paid

(1,634,924)

Net income (loss)

2,671,756

Net changes of items
other thanunitholders’ equity
Total changes of
items during the year
Balance, December 31,
2022

995,394995,394995,394995,394995,394

2,032,226

809,661

809,661

223,574,572- 24 -

For the year ended December 31, 2023
(thousands of yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance, January 1,
2023
Changes of items during
the year:Issuance of new
investment units
Reversal of reserve
for temporary
difference adjustment

187,194,209

Voluntary reserve
Capital surplus

21,746,398

Reserve fortemporarydifference
adjustment

Reserve for tax
purposereduction entry

Totalvoluntary
reserve

9,976,515

1,174,860

11,151,375

Unappropriatedretainedearnings(undisposed
loss)

Total surplus

Totalunitholders’equity2,672,927

35,570,702

222,764,911

11,857,670

11,857,670
376,501－－

Dividends paid

(3,046,498)(3,046,498)(3,046,498)

Net income (loss)

13,134,120

13,134,120

13,134,120

Net changes of items
other thanunitholders’ equity
Total changes of
items during the year
Balance, December 31,
2023(376,501)(376,501)

11,857,670－(376,501)－(376,501)

10,464,123

10,087,622

21,945,292*1

21,746,398

9,600,013

1,174,860

10,774,874

13,137,051

45,658,325

244,710,204

199,051,879

Valuation and translation
adjustments
Total
Total net assets
Deferred gains
valuation and(losses) on
translation
hedgesadjustments
Balance, January 1,
2023
Changes of items during
the year:Issuance of new
investment units
Reversal of reserve
for temporary
difference adjustment

809,661

809,661

223,574,572

11,857,670－

Dividends paid

(3,046,498)

Net income (loss)

13,134,120

Net changes of items
other thanunitholders’ equity
Total changes of
items during the year
Balance, December 31,
2023(539,561)(539,561)(539,561)(539,561)(539,561)

21,405,730

270,099

270,099

244,980,303- 25 -

(4)Statements of cash dividends
Classification

I. Unappropriated retained earnings
II. Reversal of voluntary reserve
Reversal of reserve for temporary
difference adjustment
III. Dividends[Dividend per unit]

For the year ended
December 31, 2022
¥2,672,927,976*1¥376,501,098¥13,137,051,848*1¥845,384,544¥3,046,498,092[¥682]¥13,980,573,090[¥3,015]¥2,930,982¥1,863,302

IV. Retained earnings carried forward
Method of calculating the amount ofdividends

For the year ended
December 31, 2023

In accordance with the monetary
distribution policy stipulated in Article 34,
paragraph 1 of JHR’s Articles ofIncorporation, amount of dividend must
exceed 90% of JHR’s distributable profit
that is defined by Article 67-15 of the Act
on Special Measures Concerning
Taxation. It was decided that
¥3,046,498,092, which excludes fractionsof less than one yen of dividend per unit
from ¥3,049,429,074, an amountcalculated by adding a reversal of reserve
for temporary difference adjustment of¥376,501,098 to unappropriated retained
earnings of ¥2,672,927,976, would all be
distributed. The monetary distribution inexcess of earnings stipulated in Article 34,
paragraph 1 (4) of JHR’s Articles ofIncorporation will not be made.

- 26 -In accordance with the monetary
distribution policy stipulated in Article 34,
paragraph 1 of JHR’s Articles ofIncorporation, amount of dividend must
exceed 90% of JHR’s distributable profit
that is defined by Article 67-15 of the Act
on Special Measures Concerning
Taxation. It was decided that
¥13,980,573,090, which excludes
fractions of less than one yen of dividend
per unit from ¥13,982,436,392, an amountcalculated by adding a reversal of reserve
for temporary difference adjustment of¥845,384,544 to unappropriated retained
earnings of ¥13,137,051,848, would all be
distributed. The monetary distribution inexcess of earnings stipulated in Article 34,
paragraph 1 (4) of JHR’s Articles ofIncorporation will not be made.

(5) Statements of cash flows(thousands of yen)
For the year ended
December 31, 2022
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Loss on retirement of noncurrent assets
Loss (profit) on derivative instruments
Subsidy income
Loss on tax purpose reduction entry of non-current assets
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Interest income
Interest expense
Interest on tax refunds(Increase) decrease in operating accounts receivable(Increase) decrease in prepaid expenses(Increase) decrease in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Other
SubtotalInterest received
Interest paid
Interest received on tax refunds
Income taxes - refunded (paid)
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property and equipment
Purchase of property and equipment in trust
Purchase of intangible assets
Payments of reserve for repairs and maintenance
Proceeds from tenant leasehold and security deposits in trust
Reimbursements of tenant leasehold and security deposits in trust
Subsidies received
Proceeds from release of deposit with withdrawal restrictions
Payment into deposit with withdrawal restrictions
Net cash provided by (used in) investing activities
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
Redemption of investment corporation bonds
Proceeds from issuance of investment units
Investment corporation bonds issuance costs
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

- 27 -For the year ended
December 31, 2023

2,672,966
4,787,822
57,811(13,228)－－
32,0903,570(270)1,156,814－(2,692,368)
761
233,518(9,852)
33,714226,058
5,357(3,410)(811)
6,490,545
269(1,158,491)－(1,210)5,331,112

13,135,330
5,083,074
151,695(163)(7,972)
7,915
30,8448,543(253)
1,150,941(40)(408,098)(141,829)(607,615)
234,581
86,18371,452
100,441
7,373
31,404
18,933,808
247(1,148,257)
40(1,207)
17,784,631(1,102,874)(2,767,507)(48,094)(40,625)
51,124(32,161)－(1,500,000)
1,800,000(3,640,139)(982,573)(37,589,514)(67,279)(40,625)
230,434(110,414)
7,972－－(38,551,999)

35,536,000(24,425,000)－(8,434,000)
2,800,000(6,000,000)－(15,029)(1,634,712)(2,172,742)(481,768)
29,996,835*1 29,515,066

15,568,000(35,113,000)
45,977,000(15,432,000)－－
11,812,912－(3,045,523)
19,767,389(999,978)29,515,066*1 28,515,088

(6) Notes on going concern assumption
Not applicable.

(7) Notes on matters concerning significant accounting policies
1.

Method ofdepreciation andamortization of
noncurrent assets

2.

Accounting fordeferred assets

3.

Standards forrecognition ofrevenues andexpenses(1) Property and equipment (including trust accounts)
Property and equipment are amortized using the straight-line method. The useful lives of major
property and equipment components are as follows:
Machinery and equipment
2 to 17 years
Tools, furniture and fixtures
2 to 26 years
Buildings in trust
2 to 64 years
Structures in trust
2 to 64 years
Machinery and equipment in trust
3 to 32 years
Tools, furniture and fixtures in trust
2 to 27 years(2) Intangible assets
Intangible assets are amortized using the straight-line method. The amortization period of major
intangible assets is as follows.
Software (for internal use)
5 years as internally usable years
Trademark right
10 years
Fixed-term leasehold rights in trust are amortized using the straight-line method based on remaining
period (41 years) of the contract.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method.
(1) Investment unit issuance costs
Investment unit issuance costs are amortized using the straight-line method over three years.
(2) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the interest method over therespective term of the bond.
(1) Revenue recognition
The details of main performance obligations concerning revenue generated from contracts concluded
with JHR’s customers and the ordinary time to fulfil such performance obligations (ordinary time torecognize revenue) are as follows:(a) Sale of real estate properties
For the proceeds from sale of real estate properties, JHR recognizes revenue when the purchaser
who is a customer obtains control of the relevant real estate properties, etc. as a result of theseller fulfilling its delivery obligations stipulated in the transaction agreement of the real estate,etc.
The amount obtained by deducting “Cost of sale of real estate properties,” which is the bookvalue of real estate properties, etc. sold, and “Other related sales expenses,” which are thevarious expenses directly required in the sale, from “Proceeds from sale of real estate
properties,” which are the sales proceeds of real estate properties, etc., is indicated as “Gain on
sales of real estate properties” or “Loss on sales of real estate properties” in the statements ofincome. There is no gain or loss on sales of real estate properties for the fiscal year under review
and the previous fiscal year.
(b) Utilities income
For utilities income, JHR recognizes revenue in accordance with the supply of electricity, water,etc. to the lessee who is a customer based on the lease contracts of real estate properties, etc.
and agreements incidental to it.
(2) Treatment of property taxes and other taxes
For taxes imposed on properties under management such as property taxes, city planning taxes,
and depreciable asset taxes, the imposed amounts are allocated to the respective period andexpensed as “Real estate operating costs.”
Cash paid for property taxes and city planning taxes, etc. to the transferor of real properties, etc. atacquisition is not recorded as “Real estate operating costs” but capitalized as part of the acquisition
cost of the relevant property.
There were no taxes capitalized in the acquisition cost of real estate properties, etc., for the previous
fiscal year, while ¥46,192 thousand was capitalized for the fiscal year under review.

- 28 -

4.

Method of hedge
accounting

5.

Scope of funds(cash and cash
equivalents) in thestatements of cash
flows
Other significant
matters serving as
the basis for
preparing financial
statements

6.

(1) Method of hedge accounting
Deferred hedge accounting is applied.
(2) Hedging instruments and hedged items
Hedging instruments
Interest rate swaps
Hedged items
Interest rates on loans payable(3) Hedging policy
JHR enters into certain derivative transactions in accordance with its financial policy in order tomanage risks, which is provided in the Articles of Incorporation.
(4) Method for assessing hedge effectiveness
JHR evaluates hedge effectiveness by comparing the cumulative changes in cash flow of hedging
instruments and the hedged items and assessing the ratio between the changes.
Cash and cash equivalents in the statements of cash flows consist of cash on hand, cash in trust accounts,
bank deposit and trust deposit, which can be withdrawn at any time, and short-term investments with amaturity of three months or less when purchased, which can easily be converted to cash and subject tominimal risk of change in value.
Accounting treatment of beneficial interests in trust with real estate, etc. as their assets
For trust beneficial interests in real estate, etc., all assets and liabilities held in trust accounts as well as
all income generated and expenses incurred from assets in trust are presented in the accompanying
balance sheet and income statement accounts accordingly.
The following material items of the trust accounts recorded in the relevant accounts are presented
separately on the balance sheets.
(a) Cash and deposits in trust(b) Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture andfixtures in trust; Land in trust; Construction in progress in trust(c) Leasehold rights in trust; Fixed-term leasehold rights in trust; Leasehold and security deposits intrust(d) Tenant leasehold and security deposits in trust(8) Notes on significant accounting estimates[Notes on significant accounting estimates]
Valuation of noncurrent assets
1. Amounts recorded in the financial statements
For the year ended
December 31, 2022
325,988,877(thousands of yen)
For the year ended
December 31, 2023
360,081,175

Intangible assets

32,494,195

32,271,051

Impairment loss－－

Property and equipment, at cost

2. Information on the nature of significant accounting estimates for identified items
In accordance with the accounting standard for impairment of noncurrent assets, JHR has adopted the accounting treatment to
reduce the book value of noncurrent assets to a recoverable amount when the invested amount is deemed to be unrecoverable
due to decline in profitability.
In adopting the accounting treatment, the respective properties owned by JHR are regarded as a single asset group, andjudgment is made whether it is required to recognize impairment losses when indications of impairment are deemed to exist
for the group due to a significant decline in the market value and such.
Future cash flow estimates are used to determine whether or not to recognize impairment losses. When it is determined that
impairment losses should be recognized, the book value is reduced to the recoverable amount, and the reduced amount isrecorded as impairment losses.
In estimating the future cash flow, the underlying rent, occupancy rate and real estate operating costs, etc. are calculated bycomprehensively taking into account the market trends and transaction cases of similar properties, etc.
Each property's performance and market price may be affected by trends in the real estate leasing market and the real estate
trading market. Therefore, any change in the assumptions used in the estimates may affect JHR's assets and earnings in thenext fiscal year.

- 29 -

(9) Notes to financial statements
Disclosure of notes on “securities,” “share of (profit) loss of entities accounted for using equity method,” “related-party
transactions” and “retirement benefits” is omitted because the significance of disclosure in the financial report is minimal.

[Notes to balance sheets]*1.

Accumulated advanced depreciation of property and equipment deducted from acquisition costs due to government
subsidies received, etc.
(thousands of yen)
As of
As of
December 31, 2022
December 31, 2023

Buildings in trust*2.

24,921

17,865Matters concerning provision and reversal of reserve for temporary difference adjustment
As of December 31, 2022
(thousands of yen)

Dividend
reserve (Note)

Amount ofinitial accrualBalance at
beginning of
periodAmount ofprovision
during period

Amount ofreversal during
periodBalance at endof period

Grounds for provisionand reversal

13,127,153

10,311,886－

335,371

9,976,515

Allocation for dividend(Note) Dividend reserve indicates the remaining balance of the amount subdivided into gain on negative goodwill, which was recorded as a dividend
reserve before the fiscal year ended December 2016, and is scheduled for reversal every fiscal year starting from the fiscal year following the
fiscal year in which the reserve was made in an amount that shall be no less than that in equal amounts every fiscal year over a period of no morethan 50 years.

As of December 31, 2023
(thousands of yen)

Dividend
reserve (Note)

Amount ofinitial accrualBalance at
beginning of
periodAmount ofprovision
during period

Amount ofreversal during
periodBalance at endof period

Grounds for provisionand reversal

13,127,153

9,976,515－

376,5019,600,013

Allocation for dividend(Note) Dividend reserve indicates the remaining balance of the amount subdivided into gain on negative goodwill, which was recorded as a dividend
reserve before the fiscal year ended December 2016, and is scheduled for reversal every fiscal year starting from the fiscal year following the
fiscal year in which the reserve was made in an amount that shall be no less than that in equal amounts every fiscal year over a period of no morethan 50 years.

*3. Minimum net assets as required by Article 67, Paragraph 4 of the Investment Trusts Act(thousands of yen)
As ofDecember 31, 2023

As ofDecember 31, 2022
50,000- 30 -

50,000[Notes to statements of income]*1.

Components of real estate operating revenue and real estate operating costs(thousands of yen)
For the year ended
December 31, 2022

A. Real estate operating revenue
Real estate operating revenue
Fixed rent
Variable rent
Income from management contracts
Total
Other real estate operating revenue
Parking lots
Other incidental revenue
Utilities
Other
Total
Total real estate operating revenue
B. Real estate operating costs
Real estate operating costs
Land lease and other rent expenses
Property taxes
Outsourcing expenses (Note)
Nonlife insurance
Depreciation and amortization
Loss on retirement of noncurrent assets
Repairs
Utilities
Trust fees
Other
Total real estate operating costs
C. Net real estate operating income (A－B)

For the year ended
December 31, 2023

6,279,169
7,304,059
342,758
13,925,987

14,658,973
9,516,322
1,328,502
25,503,799

141,741
69,068643,154
133,020986,984
14,912,972

127,036
70,635753,357
119,726
1,070,755
26,574,555

845,567
1,923,806
352,400
70,695
4,787,822
57,811
21,378683,346
39,783
14,267
8,796,879

846,977
1,976,361
449,885
80,731
5,083,074
151,695
26,032790,705
41,176
19,7189,466,357

6,116,092

17,108,197(Note) Outsourcing expenses include management fees of ¥40,786 thousand for the year ended December 31, 2022, and ¥129,402 thousand for the year ended
December 31, 2023.

*2.

Loss on tax purpose reduction entry of non-current assets represents the amount directly deducted from the acquisition costupon receipt of subsidies, and the breakdown is as follows.
(thousands of yen)
For the year ended
December 31, 2022

Buildings in trust

For the year ended
December 31, 2023－

- 31 -

7,915

[Notes to statements of changes in net assets]*1. Total number of investment units authorized, and issued and outstanding
For the year ended
December 31, 2022

For the year ended
December 31, 2023

Total number of investment units authorized

20,000,000 units

20,000,000 units

Total number of investment units issued and outstanding

4,467,006 units

4,637,006 units[Notes to statements of cash dividends]*1. Reserve for temporary difference adjustment
For the year ended December 31, 2022
By application of the transitional measures of Paragraph 3 of the Supplementary Provisions of the “Ordinance on Accountingsof Investment Corporations” (Cabinet Office Ordinance No. 27 of 2015), ¥13,127,153,216 in dividend reserve that is theremaining balance of the amount subdivided into gain on negative goodwill recorded in prior fiscal years is set aside as
reserve for temporary difference adjustment on the statements of cash dividends for the year ended December 31, 2016.
Starting from the fiscal year following the fiscal year in which the reserve was made, reversal of the concerned reserveamount in an amount that shall be no less than the 50-year even amortization amount (¥262,543,065) of the remaining balanceof the amount when the reserve was made, is required. In this fiscal year under review, reversal of ¥376,501,098 has been
decided, which is the amount calculated by adding ¥57,811,948 equivalent to loss on retirement of noncurrent assets and¥56,089,150, equivalent to amortization of trademark right to ¥262,600,000 of the reversal.
For the year ended December 31, 2023
By application of the transitional measures of Paragraph 3 of the Supplementary Provisions of the “Ordinance on Accountingsof Investment Corporations” (Cabinet Office Ordinance No. 27 of 2015), ¥13,127,153,216 in dividend reserve that is theremaining balance of the amount subdivided into gain on negative goodwill recorded in prior fiscal years is set aside as
reserve for temporary difference adjustment on the statements of cash dividends for the year ended December 31, 2016.
Starting from the fiscal year following the fiscal year in which the reserve was made, reversal of the concerned reserveamount in an amount that shall be no less than the 50-year even amortization amount (¥262,543,065) of the remaining balanceof the amount when the reserve was made, is required. In this fiscal year under review, reversal of ¥845,384,544 has been
decided, which is the amount calculated by adding ¥151,695,394 equivalent to loss on retirement of noncurrent assets and¥56,089,150, equivalent to amortization of trademark right and ¥375,000,000 equivalent to the dilution for dividend per unit
arising from the public offering to ¥262,600,000 of the reversal.

[Notes to statements of cash flows]*1. Relation of balance of cash and cash equivalents at end of year and the amount in balance sheet accounts(thousands of yen)
For the year ended
December 31, 2022

For the year ended
December 31, 2023

Cash and deposits

21,142,716

17,693,462

Cash and deposits in trust

8,372,349

10,821,626

Cash and cash equivalents

29,515,066

28,515,088- 32 -

[Notes on lease transactions]Operating leases (as lessor)
Minimum rental revenue under non-cancellable operating leases(thousands of yen)
As ofDecember 31, 2022

As ofDecember 31, 2023

Due within one year

1,152,214

1,331,074

Due after one year

4,054,288

3,782,292

5,206,502

5,113,366

Total[Notes on financial instruments]
1. Matters concerning status of financial instruments(1) Policy for financial instruments
JHR is an investment corporation set forth in Article 2, paragraph 12 of the Investment Trusts Act, managing investments
mainly in specified assets as prescribed in the Investment Trusts Act. As a policy, JHR procures funds through issuance ofinvestment units, etc. and loans from financial institutions in order to make investments in specified assets. JHR does not
utilize surplus funds to invest in financial instruments except for short-term deposits and other equivalent short-term
financial instruments. JHR may enter into derivative transactions in order to hedge against interest rate risk, but not for
speculative trading purposes.
(2) Details of financial instruments, their risks, and risk management system
Operating accounts receivable is operating receivables and is exposed to credit risks of clients. As for the risks, JHR is
managing payment dates and balances by each client with an aim to grasp concerns in collecting due to deterioration in theirfinancial status and other factors in early stage and reduce the risks.
The floating rate loans payable are exposed to risks of interest rate fluctuations. In order to mitigate interest rate risk, JHR
may enter into derivative transactions, if necessary, to fix the interest expense.
Derivative transactions are conducted principally in accordance with rules prescribed by JHR and risk management rules
applied by the Asset Management Company. Derivative transactions are arranged by the section in charge of finance at theAsset Management Company by using financial institutions with high credit ratings through approval and resolution byauthorized personnel and a meeting committee structure set forth in its decision-making standards and resolution of JHR’sboard of directors.
Loans payable are exposed to liquidity risks. The section in charge of finance at the Asset Management Company preparesand updates projections and actual cash flows on a monthly basis to manage liquidity risks and monitor compliance withrestrictive covenants set forth in the loan contracts. JHR manages liquidity risks by managing the ratio of short-term andlong-term loans payable considering the current financial environment through approval and resolution by authorized
personnel and meeting committee structure in the Asset Management Company and resolution of JHR’s board of directors.
(3) Supplementary explanation on matters concerning fair value, etc. of financial instruments
Regarding the contract amount, etc. of derivative transactions in “2. Matters concerning fair value, etc. of financial
instruments” the amount itself does not indicate certain scale of market risk exposure related to derivative transactions.

- 33 -

2. Matters concerning fair value of financial instruments
Carrying amounts of financial instruments on the balance sheets, their fair values, and the differences were as follows. The
notes on “Cash and deposits,” “Cash and deposits in trust,” “Operating accounts receivable” and “Short-term loans payable”
are omitted as these are settled within a short period of time and thus the fair value approximates the book value.
For the year ended December 31, 2022
(thousands of yen)
Carrying amount

Fair value

Difference(1) Current portion of investment
corporation bonds payable(2) Current portion of long-term loans
payable(3) Investment corporation bonds

－

－

－

15,432,000

15,432,000－

36,900,000

33,223,450(3,676,550)(4) Long-term loans payable

76,786,000

76,786,000－

Total liabilities

129,118,000

125,441,450(3,676,550)

1,184,172

1,184,172－(5) Derivative transactions (*)
For the year ended December 31, 2023

(thousands of yen)
Carrying amount

Fair value

Difference(1) Current portion of investment
corporation bonds payable(2) Current portion of long-term loans
payable(3) Investment corporation bonds

3,000,000

2,973,700(26,300)

21,521,000

21,521,000－

33,900,000

31,371,760(2,528,240)(4) Long-term loans payable

101,242,000

101,242,000－

Total liabilities

159,663,000

157,108,460(2,554,540)

395,399395,399－(5) Derivative transactions (*)(*)

Receivables and payables arising from derivative transactions are presented on a net basis and amounts in parenthesis denote net
payables.

(Note) Methods to measure fair value of financial instruments, and derivative transactions.
(1) Current portion of investment corporation bonds payable; (3) Investment corporation bonds
The fair value of these instruments is measured based on the market price.
(2) Current portion of long-term loans payable; (4) Long-term loans payable
The carrying value is deemed to approximate the fair value since the interest rate on long-term loans payable are floating interest
rates which are revised periodically to reflect market interest rates.
(5) Derivative transactions
Please refer to “Notes on derivative transactions” below.

- 34 -

3. Schedule for redemption of investment corporation bonds and repayment of long-term loans payable after the end of the fiscal
year under review.
As of December 31, 2022
(thousands of yen)
Due within
one yearInvestment corporation bonds
Long-term loans payable
Total

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

－

3,000,000

2,800,000

13,100,000－

18,000,000

15,432,000

18,536,000

19,000,000

4,250,000

17,000,000

18,000,000

15,432,000

21,536,000

21,800,000

17,350,000

17,000,000

36,000,000

As of December 31, 2023
(thousands of yen)
Due within
one year

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

Investment corporation bonds

3,000,000

2,800,000

13,100,000－

10,000,000

8,000,000

Long-term loans payable

21,521,000

19,000,000

12,180,000

27,175,000

26,500,000

16,387,000

24,521,000

21,800,000

25,280,000

27,175,000

36,500,000

24,387,000

Total[Notes on derivative transactions]
1. Derivative transactions to which hedge accounting is not applied
For derivative transactions in which hedge accounting is not applied, the contract amounts or the principal amounts equivalent
to the principal provided in the contract, etc. as of the year-end account closing dates were as follows:
As of December 31, 2022
(thousands of yen)Classification

Type, etc. of derivativetransaction

Transactions otherthan market
transactions

Interest rate swaps(fixed rate payment,
floating rate receipt)

Contract amount, etc.

Method to measure the fair value

Of which, due
after one year
3,494,000

1,750,000

Fair value
The fair value is measured at the(696) quoted price, etc. obtained from thecounterparty financial institutions.

As of December 31, 2023
(thousands of yen)Classification

Type, etc. of derivativetransaction

Transactions otherthan market
transactions

Interest rate swaps(fixed rate payment,
floating rate receipt)

Contract amount, etc.

Method to measure the fair value

Of which, due
after one year
1,750,000－- 35 -

Fair value
The fair value is measured at the(532) quoted price, etc. obtained from thecounterparty financial institutions.

2. Derivative transactions to which hedge accounting is applied
For derivative transactions in which hedge accounting is applied, the contract amounts or the principal amounts equivalent to
the principal provided in the contract, etc. as of the year-end account closing dates were as follows:
As of December 31, 2022
(thousands of yen)
Method ofType, etc. of derivative Main hedged
hedgetransaction
item
accounting
DeferralmethodInterest rate swaps(fixed rate payment,
floating rate receipt)

Long-termloans payable

Contract amount, etc.
Of which, due
after one year
78,460,000

70,600,000

Fair value

Method to measure
the fair value

The fair value ismeasured at the quoted
1,184,868 price, etc. obtained fromthe counterparty financial
institutions.

As of December 31, 2023
(thousands of yen)
Method ofType, etc. of derivative Main hedged
hedgetransaction
item
accounting
DeferralmethodInterest rate swaps(fixed rate payment,
floating rate receipt)

Long-termloans payable

Contract amount, etc.
Of which, due
after one year
70,600,000- 36 -

57,750,000

Fair value

Method to measure
the fair value

The fair value ismeasured at the quoted
395,932 price, etc. obtained fromthe counterparty financial
institutions.

[Notes on tax-effect accounting]
1. Components of deferred tax assets and liabilities by cause(thousands of yen)
As ofDecember 31, 2023

As ofDecember 31, 2022
Deferred tax assets:
Valuation difference on assets accepted through merger

1,667,655

1,660,086

Amortization of fixed-term leasehold of land

291,223

333,759

Asset retirement obligations

25,57029,177

Amortization of trademark right47,05564,701

Deferred gains (losses) on hedges

2,447

1,272

Total gross deferred tax assets

2,033,953

2,088,996

Valuation allowance(2,033,953)(2,088,996)－－

Deferred gains (losses) on hedges

375,207

125,832

Total gross deferred tax liabilities

375,207

125,832

Total deferred tax assets
Deferred tax liabilities

2. Details of major causes of material differences between the statutory tax rate and the tax rate under effective tax accounting
As ofDecember 31, 2022
31.46%

As ofDecember 31, 2023
31.46%

Deduction for dividends paid

(33.44%)(31.89%)Change in valuation allowance

1.97%

0.43%

Other

0.05%

0.01%

Actual effective tax rate

0.05%

0.01%

Statutory tax rate
[Adjustments][Notes on asset retirement obligations]
Asset retirement obligations recognized on the balance sheet
1. Outline of the subject asset retirement obligations
JHR recognizes asset retirement obligations as it is obliged to restore the land of Oriental Hotel Fukuoka Hakata Station(former name: Hotel Centraza Hakata), acquired on April 1, 2016 to the original state in accordance with the fixed-termleasehold agreement.
2. Calculation method of the subject asset retirement obligations
Calculated the amount of asset retirement obligations by estimating the expected useful period of use of 34 years based on
the remaining useful life of the period of building and using the discount rate of 0.484%.
3. Increase and decrease of the subject asset retirement obligations

336,783(thousands of yen)
For the year ended
December 31, 2023
338,413

1,630

1,637

338,413340,051

For the year ended
December 31, 2022
Balance at beginning of period
Adjustment due to passage of time
Balance at end of period- 37 -

[Notes on segment and related information]
1. Segment information
The segment information has been omitted because JHR has no segments other than the investment and management of hotel
real estate.
2. Related information
For the year ended December 31, 2022
(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in a single
product / service category accounted for more than 90% of total operating revenue on the statements of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the statements of income.
(ii) Property and equipment, at cost
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer
Hotel Management Japan Co., Ltd. (Note 1)
THE DAIICHI BUILDING CO., LTD.

Operating revenue

Name of related segment

6,862,661

Investment and management of hotel real estate

Undisclosed(Note 2)

Investment and management of hotel real estate(Note 1) Operating revenue includes the operating revenue from customers belonging to the same company group as said customers.
(Note 2) Undisclosed as the consent of the lessee has not been obtained.

For the year ended December 31, 2023
(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in a single
product / service category accounted for more than 90% of total operating revenue on the statements of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the statements of income.
(ii) Property and equipment, at cost
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer
Hotel Management Japan Co., Ltd. (Note)(Note)

Operating revenue
15,888,054

Name of related segment
Investment and management of hotel real estate

Operating revenue includes the operating revenue from customers belonging to the same company group as said customers.

- 38 -

[Notes on rental properties, etc.]
JHR owns rental properties for hotels. The carrying amounts, changes in such balances, and fair values of such properties wereas follows:(thousands of yen)
For the year ended
December 31, 2022

Use

For the year ended
December 31, 2023

Carrying amount
Balance at beginning of periodHotel358,819,865

358,478,812(341,052)

33,860,769

358,478,812

392,339,582

483,110,000

525,740,000

Net increase (decrease) during period
Balance at end of period
Fair value at end of period(Note 1) The decrease during the year ended December 31, 2022 was principally due to depreciation. Increase during the year ended December
31, 2023 principally due to acquisition of UAN kanazawa (¥2,082 million), Sotetsu Fresa Inn Shimbashi-Karasumoriguchi (¥8,487
million), La’gent Stay Sapporo Odori (¥10,428 million), Oriental Hotel Kyoto Rokujo (¥4,620 million), Hotel Oriental Express
Fukuoka Nakasukawabata (¥4,665 million) and Hotel JAL City Kannai Yokohama (¥4,046 million).
(Note 2) Fair value at end of fiscal period is the appraisal value determined by licensed real estate appraisers from outside.

Real estate operating revenue and costs related to the rental properties were as follows:(thousands of yen)
For the year ended
December 31, 2022

Use

For the year ended
December 31, 2023

Amount on the statements of income
Hotel(Note)

Real estate operating revenue

14,912,972

26,574,555

Real estate operating costs

8,796,879

9,466,357

Net real estate operating income

6,116,092

17,108,197“Real estate operating revenue” and “Real estate operating costs” are income from real estate operation (including other income fromreal estate operation) and corresponding expenses (such as depreciation, property tax, etc., trust fees, repair expenses and others), andare included in “Real Estate operating revenue” and “Real estate operating costs,” respectively.

[Notes on revenue recognition]
For the year ended December 31, 2022
Broken down information on revenue from contracts with customers.
For broken down information on revenue from contracts with customers, please see [Notes to statements of income] *1.
Components of real estate operating revenue and real estate operating costs.
*1. Components of real estate operating revenue and real estate operating costs include revenue under Accounting Standard
for Leasing Transactions (ASBJ Statement No. 13).
The revenue from contracts with major customers consist mainly of utilities income.
For the year ended December 31, 2023
Broken down information on revenue from contracts with customers.
For broken down information on revenue from contracts with customers, please see [Notes to statements of income] *1.
Components of real estate operating revenue and real estate operating costs.
*1. Components of real estate operating revenue and real estate operating costs include revenue under Accounting Standard
for Leasing Transactions (ASBJ Statement No. 13).
The revenue from contracts with major customers consist mainly of utilities income.

- 39 -

[Notes on per unit information]
For the year ended
December 31, 2022

For the year ended
December 31, 2023

Net assets per unit (JPY)50,05052,831

Net income per unit (JPY)

598

2,909

(Note 1) Net income per unit is computed by dividing net income by the average number of investment units during the period.
Net income per unit after the adjustment of potentially dilutive units is not presented since there are no potentially dilutive units.
(Note 2) The basis of computation of net income per unit is as follows:(thousands of yen)
For the year ended
December 31, 2023

For the year ended
December 31, 2022
Net income
Amount not attributable to common unitholders
Net income attributable to common investment units
Average number of investment units during period[Notes on significant subsequent events]
Not applicable.

- 40 -

2,671,756

13,134,120－―

2,671,756

13,134,120

4,467,006 units

4,514,513 units

(10) Changes in total number of investment units issued and outstanding
The following is the status of increase (decrease) in the total number of investment units issued and outstanding and unitholders’capital for past five years through to the end of the fiscal year under review.
Total number of investment units
Unitholders’ capital (JPY1M)
issued and outstanding (Units)
Date
Capital transaction
Note
Increase
Increase
Balance
Balance(Decrease)(Decrease)
Capital increase throughJanuary 23, 2019
public offering of
447,800
4,458,647
33,104
186,620(Note 1)
investment units
Capital increase throughFebruary 20, 2019
third-party allotment of
3,700
4,462,347
273
186,894(Note 2)
investment units
Capital increase throughMarch 16, 2021
third-party allotment of
4,659
4,467,006
300
187,194(Note 3)
investment units
Capital increase throughSeptember 21, 2023
public offering of
170,000
4,637,006
11,857
199,051(Note 4)
investment units(Note 1) New investment units were issued through public offering with an issue price per unit of ¥76,342 (issue value of ¥73,927) in order to procure funds forthe acquisition of new properties, etc.
(Note 2) New investment units were issued through third-party allotment with an issue value per unit of ¥73,927 in order to procure part of funds for the acquisitionof new properties.
(Note 3) New investment units were issued through third-party allotment with an issue value per unit of ¥64,400 in order to procure part of funds for capital
expenditures.
(Note 4) New investment units were issued through public offering with an issue price per unit of ¥72,030 (issue value of ¥69,751) in order to procure funds forthe acquisition of new properties, etc.

- 41 -

3. Reference information
For detailed information of each property and the operating result of hotels, please see the reference information below as well as the
Financial Results Briefing dated today and the website of JHR (https://www.jhrth.co.jp/en/ir/library.html).

(1) Information on values of assets under management, etc.
A. Investment status
The following outlines the investment status of JHR as of the end of the fiscal year under review.
Assetcategory

Hotel type
(Note 1)

Prefectural
location

As ofDecember 31, 2022
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)
26,646
6.7

Name

Holiday Inn Osaka Namba
Osaka

Namba Oriental Hotel

14,2503.6

14,217

3.3

Hotel Oriental Express Osaka Shinsaibashi
Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi
the b ikebukuro

2,781

0.7

2,769

0.6

－

－

8,469

2.0

6,548

1.7

6,599

1.5

CANDEO HOTELS Ueno Koen

6,535

1.6

6,525

1.5

Comfort Hotel Tokyo Higashi Nihombashi

3,422

0.9

3,394

0.8

the b hachioji

2,685

0.7

2,691

0.6

Smile Hotel Nihombashi Mitsukoshimae

2,025

0.5

2,025

0.5

R&B Hotel Ueno-hirokoji

1,780

0.4

1,804

0.4

Chisun Hotel Kamata

1,442

0.4

1,452

0.3

the b suidobashi

1,155

0.3

1,140

0.3

dormy inn EXPRESS Asakusa

922

0.2

917

0.2

Chisun Inn Kamata

773

0.2

778

0.2

La’gent Stay Sapporo Odori－－

10,402

2.4

ibis Styles Sapporo

6,366

1.6

6,299

1.5

Mercure Sapporo

5,614

1.4

5,563

1.3

Hotel Oriental Express Fukuoka Tenjin
Hotel Oriental Express
Fukuoka Nakasukawabata
the b hakata

5,728

1.4

5,710

1.3

－

－

4,621

1.1

2,330

0.6

2,319

0.5

Washington Hotel Plaza Hakata, Nakasu

2,062

0.5

2,065

0.5

Toyoko Inn Hakata-guchi Ekimae

1,364

0.3

1,346

0.3

ibis Styles Kyoto Station

6,580

1.7

6,556

1.5

Oriental Hotel Kyoto Rokujo

－

－

4,570

1.1

Kanagawa

Hotel JAL City Kannai Yokohama

－

－

4,027

0.9

Okinawa

Mercure Okinawa Naha

2,745

0.7

2,713

0.6

Kumamoto

dormy inn Kumamoto

2,186

0.6

2,205

0.5

Ishikawa

UAN kanazawa

－

－

2,056

0.5

1,703

0.4

1,716

0.4

Subtotal

107,65427.1

141,527

32.9

Hilton Tokyo Odaiba

63,16015.9

63,167

14.7

Oriental Hotel Tokyo Bay

16,724

4.2

16,932

3.9

Hilton Tokyo Narita Airport

13,0383.3

13,003

3.0

International Garden Hotel Narita

8,983

2.3

8,916

2.1

Hotel Francs
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel) (Note 4)
Oriental Hotel Hiroshima

3,142

0.8

3,172

0.7

17,016

4.3

16,848

3.9

4,032

1.0

4,005

0.9

Aichi

Hilton Nagoya

15,5603.9

15,527

3.6

Nara

Hotel Nikko Nara

10,047

2.5

9,998

2.3

Hyogo

Kobe Meriken Park Oriental Hotel

9,260

2.3

9,443

2.2

FukuokaOriental Hotel Fukuoka Hakata Station

8,720

2.2

8,395

2.0

Kanagawa

Mercure Yokosuka

1,608

0.4

1,642

0.4

Subtotal

171,29643.2

171,054

39.8

Hotel Nikko Alivila

17,451

4.4

17,441

4.1

Oriental Hotel Okinawa Resort & Spa

15,4083.9

15,626

3.6

The Beach Tower Okinawa

6,418

1.6

6,413

1.5

Chiba

Hilton Tokyo Bay

26,097

6.6

25,9936.0

Osaka

Oriental Hotel Universal City

7,302

1.8

7,192

1.7

Hakone Setsugetsuka

3,552

0.9

3,528

0.8

Subtotal

76,231

19.2

76,195

17.7

Tokyo

Limited-service
hotel

Hokkaido

Fukuoka

Kyoto

Real
estate
in
trust

Nara
Tokyo

Chiba

Full-service hotel

Hiroshima

Okinawa
Resort hotel

As ofDecember 31, 2023
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)
26,566
6.2

Kanagawa

Washington Hotel Plaza Nara

- 42 -

Assetcategory

Hotel type
(Note 1)

Prefectural
location

As ofDecember 31, 2022
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)355,182
89.5

Name

Real estate in trust – Total
Deposits and other assets (Note 5)

41,617

10.5

41,177

9.6

Total assets

396,799100.0

429,955

100.0

Total liabilities

173,225

Ratio tototal assets
(%)
43.7

Total net assets

223,574

56.3

Amount(JPY1M)(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)

As ofDecember 31, 2023
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)
388,777
90.4

184,975

Ratio tototal assets
(%)
43.0

244,980

57.0

Amount(JPY1M)

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
For real estate in trust, “Total amount held” shows the amount calculated by deducting accumulated depreciation from acquisition cost (including
expenses incidental to acquisition).
“Ratio to total assets” shows the ratio of total amount of each asset held to total assets, rounded off to one decimal place.
ACTIVE-INTER CITY HIROSHIMA is classified in accordance with the business category of Sheraton Grand Hiroshima Hotel, its main facility.
Includes machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible assets(excluding leasehold rights in trust and fixed-term land lease right in trust).

- 43 -

B. Assets under management(A) Major issues of investment securities
Not applicable.
(B) Real estate properties under management
Not applicable.
(C) Other major assets under managementa. Summary of real estate properties (in trust) under management
The following summarizes the real estate properties (in trust) under management by JHR as of the end of the fiscal year under review.
(a) Details of assets under management (acquisition price, etc.)
Property
No.

Name

Grade
(Note 1)

Acquisition
price(JPY1M)(Note 2)

Investment
Carrying
Appraisalratio
amount at end value at end of Appraisal(Acquisition Collateralof period
periodagencyprice)(Note 7)
(JPY1M)(JPY1M)(Note 5)(%)(Note 3)(Note 4)(Note 6)

1

Kobe Meriken Park Oriental Hotel

Upper-middle

10,9009,772

14,100N

2.7

Unsecured

2

Oriental Hotel Tokyo Bay

Mid-price

19,90017,221

31,900N

5.0

Unsecured

3

Namba Oriental Hotel

Mid-price

15,00014,28031,000N

3.8

Unsecured

4

Hotel Nikko Alivila

Luxury18,90017,64828,200N

4.8

Unsecured

5

Oriental Hotel Hiroshima

Upper-middle

4,100

4,051

4,220

N

1.0

Unsecured

8

The Beach Tower Okinawa

Mid-price

7,610

6,416

9,940

N

1.9

Unsecured

9

Hakone Setsugetsuka

Mid-price

4,070

3,534

5,390

N

1.0

Unsecured

10

dormy inn Kumamoto

Mid-price

2,334

2,205

3,390

N

0.6

Unsecured

12

the b suidobashi

Mid-price

1,120

1,149

2,330

N

0.3

Unsecured13

dormy inn EXPRESS Asakusa

Economy

999

917

1,320

J

0.3

Unsecured

14

Washington Hotel Plaza Hakata, Nakasu

Mid-price

2,130

2,065

4,520

N

0.5

Unsecured

15

Washington Hotel Plaza Nara

Mid-price

2,050

1,717

2,440

N

0.5

Unsecured16

R&B Hotel Ueno-hirokoji

Economy

1,720

1,804

1,830

J

0.4

Unsecured

18

Comfort Hotel Tokyo Higashi Nihombashi

Economy

3,746

3,395

5,470

J

0.9

Unsecured

22

Smile Hotel Nihombashi Mitsukoshimae

Economy

2,108

2,025

3,030

J

0.5

Unsecured24

Toyoko Inn Hakata-guchi Ekimae

Economy

1,652

1,346

2,780

T

0.4

Unsecured

25

Chisun Hotel Kamata

Economy

1,512

1,468

2,080

T

0.4

Unsecured

26

Chisun Inn Kamata

Economy

823

781

1,430

T

0.2

Unsecured

29

Oriental Hotel Universal City

Mid-price

6,753

7,468

18,500R

1.7

Unsecured

31

Hilton Tokyo Bay

Luxury26,05026,00040,200D

6.6

Unsecured32

ibis Styles Kyoto Station

Mid-price

6,600

6,566

9,990

D

1.7

Unsecured33

ibis Styles Sapporo

Mid-price

6,797

6,350

11,100N

1.7

Unsecured34

Mercure Sapporo

Mid-price

6,000

5,625

10,600N

1.5

Unsecured35

Mercure Okinawa Naha

Mid-price

3,000

2,768

7,070

N

0.8

Unsecured37

the b ikebukuro

Mid-price

6,520

6,608

7,200

N

1.6

Unsecured39

the b hachioji

Mid-price

2,610

2,706

2,610

N

0.7

Unsecured40

the b hakata

Mid-price

2,300

2,328

4,520

N

0.6

Unsecured

41

Hotel Francs

Mid-price

3,105

3,174

4,130

D

0.8

Unsecured42

Mercure Yokosuka

Mid-price

1,650

1,672

3,210

D

0.4

Unsecured

43

Oriental Hotel Okinawa Resort & Spa

Upper-middle

14,950

16,11518,300N

3.8

Unsecured

44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Luxury17,32017,053

20,400D

4.4

Unsecured

45

CANDEO HOTELS Ueno Koen

46

Oriental Hotel Fukuoka Hakata Station

47
48
49

Hilton Nagoya

50

Hilton Tokyo Narita Airport

51

International Garden Hotel Narita

52

Hotel Nikko Nara

53

Hotel Oriental Express Osaka Shinsaibashi

54

Hilton Tokyo Odaiba

Mid-price

6,705

6,537

7,590

D

1.7

Unsecured

Upper-middle

7,197

8,520

15,000D

1.8

Unsecured

Holiday Inn Osaka Namba

Mid-price

27,00026,601

26,600N

6.8

Unsecured

Hotel Oriental Express Fukuoka Tenjin

Mid-price

5,248

5,765

6,650

D

1.3

Unsecured

Luxury15,25015,527

14,900D

3.8

Unsecured

Upper-middle

13,175

13,261

12,300N

3.3

UnsecuredMid-price

9,125

9,012

9,270

N

2.3

Unsecured

Upper-middle

10,373

10,090

9,670

D

2.6

UnsecuredMid-price

2,738

2,789

2,890

D

0.7

Unsecured

Upper-middle

62,40063,365

68,200N

15.7

Unsecured- 44 -

Property
No.

Acquisition
price(JPY1M)(Note 2)

Grade
(Note 1)Name

Investment
Carrying
Appraisalratio
amount at end value at end of Appraisal(Acquisition Collateralof period
periodagencyprice)(Note 7)
(JPY1M)(JPY1M)(Note 5)(%)(Note 3)(Note 4)(Note 6)55

UAN kanazawa

Upper-middle

2,050

2,062

2,200

N

0.5

Unsecured

56

Sotetsu Fresa Inn Shimbashi-Karasumoriguchi

Mid-price

8,400

8,469

10,100D

2.1

Unsecured57

La’gent Stay Sapporo Odori

Mid-price

10,02010,422

10,800N

2.5

Unsecured

58

Oriental Hotel Kyoto Rokujo

Mid-price

4,446

4,608

5,940

N

1.1

Unsecured

59

Hotel Oriental Express Fukuoka
Nakasukawabata

Mid-price

4,460

4,657

6,090

N

1.1

Unsecured

60

Hotel JAL City Kannai Yokohama

Mid-priceN

1.0

Unsecured

Total(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)

4,000

4,047

4,340

396,918

391,984

525,740

100.0

JHR categorizes hotels into the four grade classes of “Luxury,” “Upper-middle,” “Mid-price” and “Economy” mainly from the perspective of average
daily rate, etc.
“Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust, etc. (consumption tax, local
consumption tax and the acquisition expense such as broker’s fee are not included). The acceptance prices are indicated for the properties that havebeen accepted through the Merger.
“Carrying amount at end of period” is the book value at the end of the fiscal year under review and includes the amounts for not only real estate in trust
but also machinery and equipment, tools, furniture and fixtures, construction in progress in trust and intangible assets.
“Appraisal value at end of period” is the appraisal value at the end of the fiscal year under review as the date of appraisal, in accordance with the asset
valuation methods and standards provided in JHR’s Articles of Incorporation and the regulations set forth by The Investment Trusts Association, Japan.
Under “Appraisal agency,” the letters indicate the appraisers for the properties as follows:N:
Nihon Fudosan Kenkyusho (Japan Real Estate Institute)J:
JLL Morii Valuation & Advisory K.K.
T:
The Tanizawa Sōgō Appraisal Co., Ltd.
R:
Rich Appraisal Institute Co., Ltd.
D:DAIWA REAL ESTATE APPRAISAL CO., LTD.
“Investment ratio” is the ratio of acquisition price of the respective asset held at the end of the fiscal year under review to the total amount of acquisition
price of all assets held at the end of the fiscal year under review and is rounded off to one decimal place.
“Collateral” is whether or not a pledge has been established for the beneficial interest in trust.
The omitted property numbers are the property numbers of assets that have been transferred.

(b) Details of assets under management (change in tenants of portfolio)
The following is the change in total number of tenants, total leasable area, total leased area, and occupancy rate, etc. of real estate
properties (in trust) under management for the past five years.

Total number of tenants(Note 1)
Total leasable area
(Note 2)
Total leased area
(Note 3)
Occupancy rate
(Note 4)(Note 1)

(Note 2)

(Note 3)(Note 4)End of 20th period
December 2019

End of 21st period
December 2020

End of 22nd period
December 2021

End of 23rd period
December 2022

End of 24th period
December 2023

125

121

116

110

117

746,329.68 m2

741,083.02 m2

733,995.61 m2

733,995.61 m2

767,700.44 m2

745,227.67 m2

740,146.96 m2

732,764.69 m2

732,251.49 m2

765,875.99 m2

99.9%

99.9%

99.8%

99.8%

99.8%

Total number of tenants indicates the total number of tenants based on the lease contracts for respective real estate in trust (excluding tenants of parking
lots, etc.) as of the end of each fiscal period. However, for properties for which master lease contracts under the pass-through scheme are concluded inwhich trustee receives the same amount of rents, etc. from end tenants as is in principle, the total number of end tenants (excluding tenants of parking
lots, etc.) is indicated.
In principle, total leasable area represents leasable area of the building, which does not include leasable area of land (including parking lots on ground),based on a lease contract or plan for each real estate in trust. For properties in which the leased area is not described in the lease contract, leasable area
represents the area described in the registration of the building. Furthermore, when the leasable area in the lease contract is indicated in tsubo units, thefigure in the table has been converted to the area in metric units (3.30578 square meters per one tsubo). The same shall apply hereinafter.
In principle, total leased area represents the leased area described in the lease contract of the building. For properties in which the leased area is notdescribed in the lease contract, leased area shows the area described in the registration of the building. Furthermore, when the leased area in the lease
contract is indicated in tsubo units, the figure in the table has been converted to the area in metric units (3.30578 square meters per one tsubo). However,for properties for which master lease contracts under the pass-through scheme are concluded in which trustee receives the same amount of rents, etc.
from end tenants as is in principle, the total area for which lease contracts have been concluded with end tenants and which are actually leased isindicated. The same shall apply hereinafter.
Occupancy rate indicates the percentage of leased area to leasable area of respective real estate properties in trust as of the end of each fiscal period.
The same shall apply hereinafter.

- 45 -

(c) Details of assets under management (information on major real estate)
There are no major real estate properties whose total annual rents account for more than 10% of the total annual rents of theentire portfolio.“Total annual rent” is the amount of (i) the amount arrived at when monthly fixed rent (rent of the building itself
only, excluding common area maintenance charges and signage and parking usage fees; not factoring in any change in rent during
the fiscal year) in lease contracts at the end of the fiscal year under review is multiplied by 12, plus (ii) actual amounts of revenuesharing rent, variable rent or income from management contracts for full year.
(d) Details of assets under management (NOI, etc.)
Property
No.
1
2
3
4
5
8
9
10
12
13
14
15
16
18
22
24
25
26
29
31
32
33
34
35
37
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
(Note 1)
(Note 2)
(Note 3)

Name
Kobe Meriken Park Oriental Hotel
Oriental Hotel Tokyo Bay
Namba Oriental Hotel
Hotel Nikko Alivila
Oriental Hotel Hiroshima
The Beach Tower Okinawa
Hakone Setsugetsuka
dormy inn Kumamoto
the b suidobashi
dormy inn EXPRESS Asakusa
Washington Hotel Plaza Hakata, Nakasu (Note 5)
Washington Hotel Plaza Nara (Note 5)
R&B Hotel Ueno-hirokoji
Comfort Hotel Tokyo Higashi Nihombashi
Smile Hotel Nihombashi Mitsukoshimae
Toyoko Inn Hakata-guchi Ekimae
Chisun Hotel Kamata
Chisun Inn Kamata
Oriental Hotel Universal City
Hilton Tokyo Bay
ibis Styles Kyoto Station
ibis Styles Sapporo
Mercure Sapporo
Mercure Okinawa Naha
the b ikebukuro
the b hachioji
the b hakata
Hotel Francs
Mercure Yokosuka
Oriental Hotel Okinawa Resort & Spa
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)
CANDEO HOTELS Ueno Koen
Oriental Hotel Fukuoka Hakata Station
Holiday Inn Osaka Namba
Hotel Oriental Express Fukuoka Tenjin
Hilton Nagoya
Hilton Tokyo Narita Airport
International Garden Hotel Narita
Hotel Nikko Nara
Hotel Oriental Express Osaka Shinsaibashi
Hilton Tokyo Odaiba
UAN kanazawa (Note 7)
Sotetsu Fresa Inn Shimbashi-Karasumoriguchi(Note 8)La’gent Stay Sapporo Odori (Note 9)
Oriental Hotel Kyoto Rokujo (Note 9)
Hotel Oriental Express Fukuoka
Nakasukawabata (Note 9)
Hotel JAL City Kannai Yokohama (Note 10)
Total

Real estate
operating revenue(JPY 1,000)
689,771
1,874,027
1,232,813
1,400,873
366,106
511,008
294,940
248,243
97,48765,075240,000
150,000
97,291
453,212
138,953
141,039
118,281
66,467
1,623,257
2,349,912
318,464
487,015
632,629
172,694
316,613
169,873
219,415300,000
322,637
641,137

NOI(Note 2)(JPY 1,000)
441,899
1,751,861
1,112,264
1,252,062
321,157
467,270
269,033
225,668
85,57555,183224,000
133,000
82,152421,680
121,598
126,853
102,768
58,526
1,562,599
2,065,618
277,262
379,406
401,490
119,581289,385
145,713206,269
239,316
206,827554,718

NOI after depreciation(Note 3)
(JPY 1,000)
85,892
1,319,550
995,718
975,202
235,759
352,695
173,268
170,719
57,70442,506
199,000
96,00062,994
383,651
100,551
108,858
62,34644,0091,261,861
1,866,360
243,174
296,050
311,200
44,757
260,856
105,529
184,192
187,459
169,117
163,692

Variable/Fixed

1,539,440

1,015,007

776,276

Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed (Note 6)

349,971
1,515,721
895,797590,989
1,263,632
532,370
477,563444,883
179,436
2,349,222
118,301

322,882
1,269,063
844,841
488,895
590,031451,597433,991
396,500
165,072
2,005,645
115,228

278,648877,671724,594
387,869
400,651
230,832
265,440
244,933
148,084
1,695,940
94,978

Variable/Fixed (Note 6)

230,700

200,752

182,279

Variable
Variable/Fixed

132,381
94,374

131,332
93,359107,023
81,606

Variable/Fixed

75,25974,17665,325

Variable/Fixed

10,463
26,541,085

10,37322,311,135

7,837
17,130,816

Rent type(Note 1)
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Variable/Fixed
Fixed
Fixed
Variable/Fixed (Note 4)
Variable/Fixed
Fixed
Fixed
Fixed
Fixed
Variable/Fixed (Note 6)
Variable/Fixed (Note 6)
Fixed
Variable
Variable
Variable/Fixed
Variable/Fixed (Note 6)
Management contract
Management contract
Management contract
Management contract
Variable/Fixed
Variable/Fixed
Variable/Fixed
Fixed
Variable
Variable/Fixed

Under “Rent type,” “Fixed” is a property under a fixed rent structure, “Variable” is a property under a variable rent structure, “Management contract”
is a property under a management contract structure, and “Variable/Fixed” is a property under a combination of fixed and variable rent structures.
NOI = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets + Asset retirement
obligations expenses
NOI after depreciation (net real estate operating income) = Real estate operating revenue − Real estate operating costs- 46 -

(Note 4)(Note 5)

The rent type until March 31,2023 was Fixed.
For Washington Hotel Plaza Hakata, Nakasu and Washington Hotel Plaza Nara, consent on disclosure of rent in units of thousand yen has not beenobtained from the lessees and numbers are thus rounded down to the nearest million yen.
(Note 6) For Comfort Hotel Tokyo Higashi Nihombashi, Smile Hotel Nihombashi Mitsukoshimae, Hilton Tokyo Bay, UAN kanazawa and Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi, the rent structure is one that has set not only fixed rent but also partial rent based on a revenue-sharing rent structure.
(Note 7) UAN kanazawa was acquired on January 31, 2023.
(Note 8) Sotetsu Fresa Inn Shimbashi-Karasumoriguchi was acquired on March 24, 2023.
(Note 9) La’gent Stay Sapporo Odori, Oriental Hotel Kyoto Rokujo and Hotel Oriental Express Fukuoka Nakasukawabata were acquired on September 27, 2023.
(Note 10) Hotel JAL City Kannai Yokohama was acquired on December 22, 2023.
(Note 11) The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

- 47 -

(e) Summary of risk analysis, etc. for earthquake
The following is the PML value etc. for the real estate properties (in trust) under management as of the end of the fiscal year
under review.
Property
No.
1
2
3
4
5
8
9
10
12
13
14
15
16
18
22
24
25
26
29
31
32
33
34
35
37
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60

Name

Probable Maximum Loss
(PML) ratio by earthquake
risk analyses (%)(Note 1)

Kobe Meriken Park Oriental Hotel
Oriental Hotel Tokyo Bay
Namba Oriental Hotel
Hotel Nikko Alivila
Oriental Hotel Hiroshima
The Beach Tower Okinawa
Hakone Setsugetsuka
dormy inn Kumamoto
the b suidobashi
dormy inn EXPRESS Asakusa
Washington Hotel Plaza Hakata, Nakasu
Washington Hotel Plaza Nara
R&B Hotel Ueno-hirokoji
Comfort Hotel Tokyo Higashi Nihombashi
Smile Hotel Nihombashi Mitsukoshimae
Toyoko Inn Hakata-guchi Ekimae
Chisun Hotel Kamata
Chisun Inn Kamata
Oriental Hotel Universal City
Hilton Tokyo Bay
ibis Styles Kyoto Station
ibis Styles Sapporo
Mercure Sapporo
Mercure Okinawa Naha
the b ikebukuro
the b hachioji
the b hakata
Hotel Francs
Mercure Yokosuka
Oriental Hotel Okinawa Resort & Spa
ACTIVE-INTER CITY HIROSHIMACANDEO HOTELS Ueno Koen
Oriental Hotel Fukuoka Hakata Station
Holiday Inn Osaka Namba
Hotel Oriental Express Fukuoka Tenjin
Hilton Nagoya
Hilton Tokyo Narita Airport
International Garden Hotel Narita
Hotel Nikko Nara
Hotel Oriental Express Osaka Shinsaibashi
Hilton Tokyo Odaiba
UAN kanazawa
Sotetsu Fresa Inn Shimbashi-Karasumoriguchi
La’gent Stay Sapporo Odori
Oriental Hotel Kyoto Rokujo
Hotel Oriental Express Fukuoka Nakasukawabata
Hotel JAL City Kannai Yokohama

11.6
14.2
13.4
7.3
10.7
2.7
14.4
5.6
5.4
4.9
8.2
13.7
3.6
6.7
7.5
Total: 3.8
9.0
4.2
8.7
3.2
10.5
1.0
1.0
0.5
5.3
4.9
3.3
2.5
7.1
0.7
2.0
3.1
2.4
6.5
3.3
1.7
2.4
5.2
7.5
7.3
4.3
10.0
7.0
2.6
12.2
5.2
7.9

Existence ofearthquake
insurance

Provider of
PML value(Note 2)

None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None

P
P
P
P
O
S
P
S
S
S
P
P
S
S
S
S
S
S
P
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
T
S
T
T
S
T
T
T
S

(Note 1) PML (Probable Maximum Loss) represents damage caused by a major earthquake that may occur once every 475 years (estimated probability of such
earthquake to occur during the 50 years is 10%) during the expected holding period (50 years = useful life of ordinary buildings). PML is the anticipatedpercentage of recovery cost against the building replacement cost.
JHR will evaluate the possibility of acquiring earthquake insurance for the property if the PML of the particular property exceeds 15%. As of the end of
the fiscal year under review, no property is planned to be insured by earthquake insurance.
(Note 2) Under “Provider of PML value” the letters indicate the name of provider for the properties as follows:
T: Tokio Marine dR Co., Ltd.
P: Delloitte Tohmatsu Property Risk Solution Co., Ltd.
O: OBAYASHI CORPORATION
S: Sompo Risk Management, Inc.
(Note 3) The property numbers of assets that were transferred are intentionally omitted.

- 48 -

b. Income statements for individual real estate properties (in trust) under management
The following is the individual income statements for real estate properties (in trust) under management for the fiscal year underreview (from January 1, 2023 to December 31, 2023). Figures are rounded down to the nearest thousand yen in principle, but areotherwise noted if circumstances do not allow for the figures to be stated in units of thousand yen.
Property No.

－

1

2

3

4

5

Property name

Portfolio total(Note 1)

Kobe
Meriken Park
Oriental Hotel

Oriental HotelTokyo Bay

Namba
Oriental Hotel

Hotel Nikko
AlivilaOriental Hotel
Hiroshima

Number of operating days

－

365

365

365

365

365

(A) Real estate operating revenue subtotal

26,541,085

689,771

1,874,027

1,232,813

1,400,873

366,106

Fixed rent

14,658,973

599,900

758,600

843,900

804,100

214,504

Variable rent

10,844,825

88,901

1,115,427

388,913596,773

151,602

Other revenue

1,037,285

969

－

－

－

－

(B) Real estate operating costs subtotal

9,410,268

603,879

554,476

237,095

425,670

130,347

Land lease and other rent expenses

846,977

192,711－－85,547－

Property taxes

1,976,361

48,115

114,834

106,899

55,447

41,196

Outsourcing expenses

449,885

960

960

960

1,920

960

Nonlife insurance

80,731

4,543

4,885

1,972

3,617

1,382

Depreciation and amortization

5,026,984

305,348

357,125

116,107

260,863

85,102

Loss on retirement of noncurrent assets

151,695

50,65875,185438

15,996295

Other costs

877,632

1,540

1,485

10,717

2,278

1,410

(C) Net real estate operating income = (A) − (B)17,130,816

85,892

1,319,550

995,718

975,202

235,759(Reference) Occupancy rate

99.8%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

117

1

1

1

1

1

Property No.

8

9

10

12

13

14

Property name

The Beach Tower
Okinawa

HakoneSetsugetsuka

dormy inn
Kumamoto

the bsuidobashi

dormy inn
EXPRESSAsakusa

Washington Hotel
Plaza Hakata,
Nakasu (Note 2)

Number of operating days

365

365

365

365

365

365

(A) Real estate operating revenue subtotal

511,008

294,940

248,243

97,48765,075240,000

Fixed rent

511,008

294,340

194,460

30,00063,395240,000

Variable rent－－

53,78367,487－－

Other revenue

－

600

－

－

1,680

0

(B) Real estate operating costs subtotal

158,312

121,671

77,52339,782

22,56941,000Land lease and other rent expenses

－

－

－

－

－

－

Property taxes

40,457

23,373

20,653

8,294

6,396

12,000Outsourcing expenses

－

－

－

1,200

1,200

1,000

Nonlife insurance

2,094

1,012

722

272

167

0

Depreciation and amortization

114,575

95,76554,94827,87012,67725,000Loss on retirement of noncurrent assets

－

－

－

－

－

－

Other costs

1,185

1,519

1,199

2,145

2,128

1,000

(C) Net real estate operating income = (A) − (B)352,695

173,268

170,719

57,70442,506

199,000(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

1

1

1

1

1

- 49 -

Property No.

15

16

18

22

24

25

Property name

Washington Hotel
Plaza Nara
(Note 2)

R&B Hotel
Ueno-hirokoji

Comfort HotelTokyo Higashi
Nihombashi

Smile Hotel
Nihombashi
Mitsukoshimae

Toyoko Inn
Hakata-guchi
EkimaeChisun Hotel
KamataNumber of operating days

365

365

365

365

365

365

(A) Real estate operating revenue subtotal

150,000

97,291

453,212

138,953

141,039

118,281Fixed rent

146,000

96,504

260,321

134,400

141,039－

Variable rent－－

181,685

4,553－

118,211

Other revenue

3,000

786

11,205－－70(B) Real estate operating costs subtotal

54,00034,296

69,56038,40132,18055,935Land lease and other rent expenses

－

－

－

－

－

－

Property taxes

11,00013,00828,133

13,951

11,682

12,083

Outsourcing expenses

3,000

840

1,614

1,200

1,080

1,200

Nonlife insurance

0

254

568

275

390

322

Depreciation and amortization

37,00018,90338,02821,047

17,99540,422

Loss on retirement of noncurrent assets

0

254

－

－

－

－

Other costs

1,000

1,035

1,215

1,927

1,032

1,908

(C) Net real estate operating income = (A) − (B)96,00062,994

383,651

100,551

108,858

62,346(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

2

1

2

1

1

1

Property No.

26

29

31

32

33

34

Property name

Chisun Inn
KamataOriental Hotel
Universal City

HiltonTokyo Bay

ibis Styles
Kyoto Station(Note 1)

ibis Styles
Sapporo(Note 1)

MercureSapporo(Note 1)

Number of operating days

365

365

365

365

365

365

(A) Real estate operating revenue subtotal

66,467

1,623,257

2,349,912

318,464

487,015

632,629

Fixed rent－

316,666

Variable rent

66,467

1,272,398

Other revenue－

34,192(B) Real estate operating costs subtotal

22,458Land lease and other rent expenses

Undisclosed(Note 3)
Undisclosed(Note 3)
Undisclosed(Note 3)43,534

26,14362,739272,141

413,247

470,4422,787

47,62499,447361,396483,552

75,289190,965

321,428－－

123,720－－50

Property taxes

4,967

51,024

141,127

23,31338,02951,100Outsourcing expenses

1,080

5,193

12,19814,02923,36191,601

Nonlife insurance

133

2,851

5,467

486

1,305

1,429

Depreciation and amortization

14,516300,265

199,258

34,087

83,35690,289Loss on retirement of noncurrent assets

－

472

－

－

－

－

Other costs

1,760

1,588

1,780

3,372

44,912

86,957(C) Net real estate operating income = (A) − (B)44,0091,261,861

1,866,360

243,174

296,050

311,200(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

99.4%

99.1%

(Reference) Number of tenants

1

1

1

2

5

9

- 50 -

Property No.

35

37

39

40

41

42

Property nameMercureOkinawa Naha
(Note 1)the bikebukuro

the bhachioji

the bhakataHotel Francs

MercureYokosuka

Number of operating days

365

365

365

365

365

365

(A) Real estate operating revenue subtotal

172,694

316,613

169,873

219,415300,000

322,637

Fixed rent－

133,034

59,093

66,522300,000－

Variable rent

172,670

181,910

106,541

152,893－

270,538

Other revenue

23

1,668

4,238

－

－

52,098(B) Real estate operating costs subtotal

127,937

55,75764,34335,223

112,540

153,520

Land lease and other rent expenses

340

－

－

－

－

－

Property taxes

23,562

23,785

21,247

10,62856,84632,949Outsourcing expenses

26,772

1,200

1,200

1,200

1,800

21,219Nonlife insurance

1,143

624

733

408

1,531

2,124

Depreciation and amortization

74,82428,52840,18322,07751,066

37,710Loss on retirement of noncurrent assets

－

－

－

－

790

－

Other costs

1,294

1,618

979

909

505

59,515(C) Net real estate operating income = (A) − (B)44,757

260,856

105,529

184,192

187,459

169,117(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

3

10

2

1

1

Property No.

43

44

45

46

47

48

Property name

Oriental Hotel
Okinawa
Resort & Spa

ACTIVE-INTERCITY
HIROSHIMACANDEOHOTELS
Ueno Koen

Oriental Hotel
Fukuoka
Hakata Station

Holiday Inn
Osaka Namba

Hotel Oriental
Express
Fukuoka Tenjin

Number of operating days

365

365

365

365

365

365

(A) Real estate operating revenue subtotal

641,137

1,539,440

349,971

1,515,721

895,797590,989

Fixed rent

550,000

834,256

Undisclosed(Note 3)425,000

576,000

192,820

Variable rent

91,137382,114－1,090,721

319,632

336,323－165

61,845

Other revenue－

323,069

Undisclosed(Note 3)(B) Real estate operating costs subtotal

477,445

763,163

71,323

638,050

171,202203,120

Land lease and other rent expenses

－

－

－

222,206－－

Property taxes

78,759125,958

23,47518,80747,08034,464

Outsourcing expenses

2,400

102,736

1,200

3,000

1,560

11,772

Nonlife insurance

3,638

5,073

715

1,799

1,478

706

Depreciation and amortization

388,067

235,517

44,234

389,378

120,246

101,025

Loss on retirement of noncurrent assets

2,959

3,213

－

375

－

－

Other costs

1,620

290,663

1,697

2,483

837

55,151(C) Net real estate operating income = (A) − (B)163,692

776,276

278,648877,671724,594

387,869(Reference) Occupancy rate

100.0%

97.3%

100.0%

100.0%

100.0%

90.9%(Reference) Number of tenants

1

35

1

1

1

3

- 51 -

Property No.

49

50

51

Property name

Hilton Nagoya

Hilton Tokyo
Narita Airport

International
Garden Hotel
Narita

365

365

365

365

365

365

1,263,632

532,370

477,563444,883

179,436

2,349,222

444,000

336,000

420,000

110,400

1,600,000

88,370141,563

24,81669,036749,222

－

－

67

－

－

Number of operating days(A) Real estate operating revenue subtotal
Fixed rent
Variable rent
Other revenue

Undisclosed(Note 3)
Undisclosed(Note 3)
Undisclosed(Note 3)

52

53

54

Hotel Oriental
Hotel Nikko Nara Express Osaka
Shinsaibashi

Hilton Tokyo
Odaiba(B) Real estate operating costs subtotal

862,981

301,538

212,123

199,950

31,352653,281Land lease and other rent expenses

222,401

－

－

－

－

－

Property taxes

101,799

72,292

38,201

40,347

11,492

336,490

Outsourcing expenses

88,849

2,520

2,280

2,400

2,160

120

Nonlife insurance

6,976

5,006

2,146

4,249

214

5,682

Depreciation and amortization

189,380

220,764

168,288

151,567

16,988309,705

Loss on retirement of noncurrent assets

－

－

263

－

－

－

Other costs

253,574

954

943

1,385

497

1,282

(C) Net real estate operating income = (A) − (B)400,651

230,832

265,440

244,933

148,084

1,695,940(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

4

1

1

1

1

1

Property No.

55

56

57

Sotetsu Fresa Inn
UAN kanazawa
Shimbashi(Note 4)
Karasumoriguchi(Note 5)

Property name58

59

La’gent Stay
Sapporo Odori(Note 6)

Oriental Hotel
Kyoto Rokujo(Note 6)60

Hotel Oriental
Hotel JAL City
Express Fukuoka
KannaiNakasukawabata
Yokohama(Note 6)(Note 7)

Number of operating days

335

283

96

96

96

10

(A) Real estate operating revenue subtotal

118,301

230,700

132,381

94,37475,25910,463Fixed rent

99,290204,836

4,073

44,65045,433

3,750

Variable rent

19,011

127

127,970

49,72429,826

6,713

Other revenue－

25,737

337

－

－

－

(B) Real estate operating costs subtotal

23,323

48,42025,35812,767

9,934

2,625

Land lease and other rent expenses

－

－

－

－

－

－

Property taxes

－

－

－

－

－

－

Outsourcing expenses

1,434

5,600

564

664

658

48

Nonlife insurance

279

432

299

165

139

18

Depreciation and amortization

20,25018,47324,30911,752

8,850

2,535

Loss on retirement of noncurrent assets

－

－

－

－

－

－

Other costs

1,359

23,914

185

186

286

22

(C) Net real estate operating income = (A) − (B)94,978

182,279

107,023

81,60665,325

7,837(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

4

2

1

1

1

(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)

Variable rent includes income from management contracts. For details of the management contract, please refer to “c. Overview of the hotel business;(a) Rent structures of hotels with variable rent, management contract or revenue-sharing rent” on page 53.
Consent on disclosure of rent in units of thousand yen has not been obtained from the lessee and numbers are thus rounded down to the nearest million
yen.
Undisclosed as consent on disclosure has not been obtained from the tenant with whom a lease contract has been concluded.
UAN kanazawa was acquired on January 31, 2023.
Sotetsu Fresa Inn Shimbashi-Karasumoriguchi was acquired on March 24, 2023.
La’gent Stay Sapporo Odori, Oriental Hotel Kyoto Rokujo and Hotel Oriental Express Fukuoka Nakasukawabata were acquired on September 27, 2023.
Hotel JAL City Kannai Yokohama was acquired on December 22, 2023.
The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

- 52 -

c. Overview of the hotel business(a) Rent structures of hotels with variable rent, management contract or revenue-sharing rent
Property
Name
No.
1
Kobe Meriken Park Oriental Hotel
2

Oriental Hotel Tokyo Bay

3

Namba Oriental Hotel

4

Hotel Nikko Alivila

5

Oriental Hotel Hiroshima

29
43(Total AGOP (Note 1) of The Five HMJ Hotels –base amount (¥4,120 million/year (Note 2))) x 85.0%

Oriental Hotel Universal City

Variable/Fixed(AGOP – base amount (¥370 million/year)) x 95.0%

Variable/Fixed
Variable/Fixed(Note 3)
Variable/Fixed(AGOP – base amount (¥655 million/year)) x 95.0%

46

Oriental Hotel Okinawa Resort & Spa
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)
Oriental Hotel Fukuoka Hakata Station

47

Holiday Inn Osaka Namba

Variable/Fixed(AGOP – base amount (¥580 million/year)) x 97.0%

48

Hotel Oriental Express Fukuoka Tenjin

Variable/Fixed(AGOP – base amount (¥165 million/year)) x 97.0%

50

Hilton Tokyo Narita Airport

Variable/Fixed(AGOP – base amount (¥450 million/year)) x 93.0%

51International Garden Hotel Narita

Variable/Fixed(AGOP – base amount (¥360 million/year)) x 98.0%

52

Hotel Nikko Nara

Variable/Fixed(AGOP – base amount (¥440 million/year)) x 95.0%

53

Hotel Oriental Express Osaka Shinsaibashi

Variable/Fixed(AGOP – base amount (¥128 million/year)) x 91.0%

54

Hilton Tokyo Odaiba

Variable/Fixed(AGOP – base amount (¥1,660 million/year)) x 98.0%

58

Variable/Fixed(AGOP – base amount (¥183 million/year)) x 93.5%

Variable/Fixed(AGOP – base amount (¥189 million/year)) x 92.0%

60

Oriental Hotel Kyoto Rokujo
Hotel Oriental Express
Fukuoka Nakasukawabata
Hotel JAL City Kannai Yokohama

Variable/Fixed(AGOP – base amount (¥150 million/year)) x 95.0%

32

ibis Styles Kyoto Station

33

ibis Styles Sapporo

34

Mercure Sapporo

Management
contract(Note 4)

Amount equivalent to GOP

59

The
Accor
Group
Hotel

The
Ishin
Group
Hotel

Other
hotels withvariablerent orrevenuesharing
rent

Method of calculating variable rent and income from management contracts

Variable/Fixed

44
The
HMJ
19 HotelRent type35

Mercure Okinawa Naha

42

Mercure Yokosuka

12

the b suidobashi

37

the b ikebukuro39

the b hachioji

40

the b hakata

10

dormy inn Kumamoto

18

Comfort Hotel Tokyo Higashi Nihombashi

22

Smile Hotel Nihombashi Mitsukoshimae

25

Chisun Hotel Kamata

Variable

26

Chisun Inn Kamata

Variable

31

Hilton Tokyo Bay

49

Hilton Nagoya

55

UAN kanazawa

56
57

Sotetsu Fresa Inn
Shimbashi-Karasumoriguchi
La’gent Stay Sapporo Odori(AGOP – base amount (¥360 million/year)) x 90.0%(AGOP – base amount (¥442 million/year)) x 98.0%

VariableAmount linked to GOP (Note 5)

Variable/Fixed

Amount linked to AGOP (Note 5)

Variable/Fixed(Note 6)
Fixed +
Revenue sharing
Fixed +
Revenue sharing

Fixed +
Revenue sharing
Variable
Fixed +
Revenue sharing
Fixed +
Revenue sharing
Variable(GOP – base amount (¥400 million/year)) x 40.0%
Amount that is a certain percentage of sales exceeding the threshold (Note 5)
Amount that is a certain percentage of sales exceeding the threshold (Note 5)
Amount that is the monthly GOP multiplied by 86.0%(¥0 if the amount is below ¥0.)
Amount that is the monthly GOP multiplied by 86.0%(¥0 if the amount is below ¥0.)
Amount that is a certain percentage of sales exceeding the threshold (Note 5)
Variable rents linked to hotel sales, etc. (Note 5)(Room sales – base amount (¥270 million/year)) x 30.0%
Amount that is a certain percentage of sales exceeding the threshold (Note 5)
Amount linked to GOP (Note 5)(Note 1)AGOP (adjusted GOP) is the amount calculated by subtracting certain fees and other items from GOP. The same shall apply hereinafter.

(Note 2)For the purpose of payments of variable rent from each hotel, etc. JHR has set individual GOP base amount for each hotel. The breakdown of the AGOP
base amount of the Five HMJ Hotels (¥4,120 million/year) are as follows.
Kobe Meriken Park Oriental Hotel ¥690 million, Oriental Hotel Tokyo Bay ¥1,060 million, Namba Oriental Hotel ¥890 million, Hotel Nikko Alivila¥1,250 million, and Oriental Hotel Hiroshima ¥230 million.

(Note 3)The indicated figures are for Sheraton Grand Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA.

(Note 4)The management contract structure is a structure for hotel real estate owned by JHR in which JHR entrusts an operator to operate the hotel and takes
in the outcome of that business as real estate operating revenue. Specifically, JHR, the owner of the hotel real estate, concludes a management contract
with an operator and entrusts the operator with the tasks necessary to run the hotel business. JHR receives the hotel revenue achieved from the hotelbusiness (operation) by the operator and, at the same time, pays a management fee to the operator. This hotel revenue achieved is recognized as “realestate operating revenue through management contract” and is equivalent to the rent that is the real estate operating revenue under the leasing structure.

(Note 5)The detailed content of the contract is not disclosed as consent on disclosure has not been obtained from the lessee.

(Note 6)

The rent type until March 31, 2023 was Fixed.

- 53 -

(b) Key performance indicators of the hotel business
The following tables indicate the figures related to the hotel business of the 19 HMJ Hotels for the operating period fromJanuary 1, 2023 through December 31, 2023, based on the data provided by the hotel lessees. While these Indexes of the hotels
are among the indicators that show the operating status of the rooms departments, please note that they do not necessarily
represent the operating revenue and the ability to bear rent, etc. of the respective hotels, as the room rates and profit margins,etc. of the respective rooms available for sale are not uniform, among other reasons. As such, the indicators are no more than
the reference figures.
Kobe
Meriken Park
Oriental Hotel
Ratio tototal sales(%)
Occupancy rate

Oriental HotelTokyo Bay

Namba
Oriental Hotel

Ratio tototal sales(%)

Hotel Nikko
AlivilaRatio tototal sales(%)

Oriental Hotel
Hiroshima

Ratio tototal sales(%)

The Five HMJ Hotels
Total/Average

Ratio tototal sales(%)

Ratio tototal sales
(%)

72.3%

－

86.0%

－

86.3%

－

72.4%

－

82.8%

－

79.9%

－

22,138－26,447－

20,900－32,964－

10,526－23,994－16,011－

22,753－18,043－23,851

－

8,717

－

19,173－

Total sales

4,607

100.0

6,313

100.0

2,252

100.0

5,405

100.0

1,124

100.0

19,702

100.0

Rooms department

1,888

41.0

4,244

67.2

1,699

75.5

3,456

63.9

722

64.2

12,00961.0

Food & beveragedepartment

2,487

54.0

1,769

28.0

85

3.8

1,584

29.3

201

17.9

6,127

31.1

Tenant department

67

1.5

189

3.0

435

19.3

3

0.1

0

0.0

694

3.5

Other departments(Note 3)

166

3.6

111

1.8

33

1.4

362

6.7

201

17.8

872

4.4

GOP

795

17.2

2,372

37.6

1,348

59.8

1,972

36.5

408

36.3

6,895

35.0

ADR
(Note 1)
RevPAR(Note 2)

Oriental Hotel
Universal City
Ratio tototal sales(%)
Occupancy rate

Oriental Hotel
Okinawa
Resort & Spa
Ratio tototal sales(%)

Sheraton Grand
Hiroshima Hotel(Note 4)
Ratio tototal sales(%)

Oriental Hotel
Fukuoka
Hakata Station
Ratio tototal sales(%)

Holiday Inn Osaka
Hotel Oriental
Namba
Express Hakata Tenjin
Ratio tototal sales(%)

Ratio tototal sales
(%)

86.4%

－

59.8%

－

83.6%

－

86.4%

－

77.6%

－

84.7%

－

27,413－

26,463－25,006－

21,503－

17,634－

11,069－23,674－

15,815－20,897－

18,573－

13,683

－

9,370

－

Total sales

3,279

100.0

3,235

100.0

3,381

100.0

2,961

100.0

1,616

100.0

924

100.0

Rooms department

2,852

87.0

2,084

64.4

1,815

53.7

1,498

50.6

1,568

97.0

900

97.4

Food & beveragedepartment

421

12.8

821

25.4

1,488

44.0

1,172

39.6

－

－

12

1.3

Tenant department

－

－

51

1.6

－

－

240

8.1

28

1.7

－

－

Other departments(Note 3)

7

0.2

279

8.6

77

2.3

51

1.7

20

1.2

12

1.3

1,709

52.1

751

23.2

909

26.9

1,555

52.5

981

60.7

512

55.4

ADR
(Note 1)
RevPAR(Note 2)

GOP

Hilton Tokyo
Narita Airport

International Garden
Hotel Narita

Ratio tototal sales(%)
Occupancy rate

Hotel Nikko Nara

Ratio tototal sales(%)

Ratio tototal sales(%)

Hotel Oriental
Oriental Hotel Kyoto
Express
Hilton Tokyo Odaiba
RokujoOsaka Shinsaibashi
Ratio toRatio toRatio tototal sales
total sales
total sales
(%)
(%)
(%)

77.8%

－

79.2%

－

68.2%

－

86.9%

－

80.5%

－

78.4%

－

12,273

－

8,499

－

14,639－10,352－32,091－

12,255

－

9,548

－

6,733

－

9,989

－

9,000

－

25,849

－

9,605

－

Total sales

2,755

100.0

1,429

100.0

2,353

100.0

409

100.0

9,458

100.0

648

100.0

Rooms department

1,910

69.3

1,138

79.6

1,203

51.1

407

99.7

4,274

45.2

582

89.8

Food & beveragedepartment

760

27.6

280

19.6

1,133

48.2

－

－

4,918

52.0

61

9.4

Tenant department

27

1.0

4

0.3

4

0.2

－

－

75

0.8

－

－

Other departments(Note 3)

58

2.1

7

0.5

12

0.5

1

0.3

191

2.0

5

0.8

GOP

651

23.6

504

35.3

496

21.1

204

49.9

2,545

26.9

275

42.4

ADR
(Note 1)
RevPAR(Note 2)- 54 -

Hotel Oriental
Express Fukuoka
Nakasukawabata
Ratio tototal sales(%)
Occupancy rate

The 19 HMJ Hotels
Total/Average(Note 5)
Ratio toRatio tototal sales
total sales(%)(%)

Hotel JAL City
Kannai Yokohama

78.7%

－

74.3%

－

78.6%

－

10,222－

10,998－19,740

－

8,048

－

8,167

－

15,508－

Total sales

577

100.0

592

100.0

53,320100.0

Rooms department

538

93.1

507

85.6

33,284

62.4

Food & beveragedepartment

34

5.9

78

13.1

17,307

32.5

Tenant department

－

－

－

－

1,123

2.1

Other departments(Note 3)

5

0.9

8

1.3

1,606

3.0

278

48.1

135

22.8

18,39934.5

ADR(Note 1)
RevPAR(Note 2)

GOP
(Note 1)

ADR refers to the average guest room unit sales price (Average Daily Rate), which is calculated by dividing total room sales (including service charges)
for a given period by the total number of guest rooms sold for the same period.
Service charges are 10% for Kobe Meriken Park Oriental Hotel, Oriental Hotel Tokyo Bay, Namba Oriental Hotel, Oriental Hotel Hiroshima, Oriental
Hotel Okinawa Resort & Spa, ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel), International Garden Hotel Narita, Hotel
Nikko Nara, Oriental Hotel Fukuoka Hakata Station and Hotel JAL City Kannai Yokohama; 12% for; and 13% for Hotel Nikko Alivila, Hilton Tokyo
Narita Airport and Hilton Tokyo Odaiba. Oriental Hotel Universal City, Holiday Inn Osaka Namba, Hotel Oriental Express Fukuoka Tenjin, Hotel
Oriental Express Osaka Shinsaibashi, Oriental Hotel Kyoto Rokujo and Hotel Oriental Express Fukuoka Nakasukawabata do not request service charges.
The same shall apply hereinafter.

(Note 2)

RevPAR represents Revenue Per Available Room, which is calculated by dividing total room sales (including service charges) for a given period by the
total number of guest rooms available for sale during the same period. The same shall apply hereinafter.

(Note 3)Figures for the other departments include sales of the department for sale of goods.

(Note 4)The indicated figures are for Sheraton Grand Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA.

(Note 5)

For Total/Average of the 19 HMJ Hotels, figures are calculated by JHR as reference since no figures have been provided by the hotel lessees.

(Note 6)The occupancy rate is rounded off to one decimal place, while ADR and RevPAR are rounded off to the nearest whole number. Sales and GOP arerounded off to the nearest million yen. For the ratio to total sales, the ratio of sales in each department to total sales is rounded off to one decimal place.

- 55 -

(2) Status of capital expenditures(a) Planned capital expenditures (Note)
The following table shows major estimated capital expenditure items for renovation work planned as of the end of the fiscal
year under review. Expenditures are expected to total ¥6,994 million, which consists of capital expenditures of ¥6,988 million
and repair expenses of ¥5 million, for the next fiscal year.
Estimated
construction costs
Name of property, etc.
(JPY1M)
PurposeScheduled period(Location)
Total
Total amountamount paid
Kobe Meriken Park Oriental Hotel(Kobeshi, Hyogo)

Renovation of guest rooms(10th and 11th floor)

From April 2024
to August 2024

280－

Kobe Meriken Park Oriental Hotel(Kobe-shi, Hyogo)

Renovation of prefabricated bathrooms
in guest rooms

From April 2024
to August 2024

100－

Oriental Hotel Tokyo Bay(Urayasu-shi, Chiba)

Renovation of guest rooms(7th to 10th floor)

From May 2024
to November 2024

950－

Namba Oriental Hotel(Osaka-shi, Osaka)

Renovation of 3rd floor front desk, etc.

From August 2024
to December 2024

780－

Namba Oriental Hotel(Osaka-shi, Osaka)

Renovation of 1st and 2nd floor

From May 2024
to December 2024

520－

Hotel Nikko Alivila(Nakagamigun, Okinawa)

Installation of new emergency
generator

From December 2023
to June 2025

752

3

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Renovation of guest rooms (3rd phase)

From September 2023
to April 2024

968－

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Renewal of air-conditioning equipment From September 2023
in guest rooms
to April 2024

171－

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Painting of exterior wall

From September 2023
to April 2024

113－

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Renewal works of piping

From September 2023
to April 2024

120－

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Exterior construction

From January 2024
to August 2024

210－

Hilton Tokyo Narita Airport(Narita-shi, Chiba)

Renovation of guest rooms

From November 2024
December 2024

87

5

Hilton Tokyo Narita Airport(Narita-shi, Chiba)

Renewal of air-conditioning equipment From November 2024
in guest rooms
to December 2024

58－

Hilton Tokyo Narita Airport(Narita-shi, Chiba)

Repair of central monitoring system

From February 2024
to December 2024

78－

Oriental Hotel Universal City
(Osaka-shi, Osaka)Renewal of automatic fire alarm system

From January 2024
to October 2024

71

8

Hilton Tokyo Bay(Urayasu-shi, Chiba)

Renewal of air-conditioning equipmentin guest rooms

From May 2024
to August 2024

81－

Hilton Tokyo Bay(Urayasu-shi, Chiba)

Renewal of elevators

From November 2024
to December 2024

82

－

5,423

16

Total

(Note) New construction and renewal work include those for buildings, attached facilities, etc. as well as items classified as furniture and fixtures.
The scheduled period of the above-planned renovation work and whether the renovation work will be performed may change.

- 56 -

(b) Capital expenditures during the period (Note)
Major construction work conducted by JHR during the fiscal year under review that represents capital expenditures is asfollows. Capital expenditures for the fiscal year under review totaled ¥4,769 million, and repair expenses that were accounted
for as expense in the fiscal year under review totaled ¥26 million. In aggregate, ¥4,796 million of construction work was
carried out.
Name of property, etc.
(Location)

Purpose

PeriodConstruction costs(JPY1M)

Kobe Meriken Park Oriental Hotel(Kobe-shi, Hyogo)

Renovation of guest rooms(12th and 13th floor)

From May 2023
to August 2023

214

Kobe Meriken Park Oriental Hotel(Kobe-shi, Hyogo)

Renovation of prefabricated bathroom
in guest rooms

From May 2023
to August 2023

59

Kobe Meriken Park Oriental Hotel(Kobe-shi, Hyogo)

Renovation of restaurant

From September 2023
to December 2023

165

Oriental Hotel Tokyo Bay(Urayasu-shi, Chiba)

Renovation of guest rooms(11th and 12th floor)

From May 2023
to September 2023

382

Oriental Hotel Tokyo Bay(Urayasu-shi, Chiba)

Renovation of restaurant

From October 2023
to October 2023

63

Hotel Nikko Alivila(Nakagamigun, Okinawa)

Repair of elevators

From July 2022
to March 2023

149

dormy inn Kumamoto(Kumamoto-shi, Kumamoto)Repair of exterior wall

From November 2023
to December 2023

62

Hilton Tokyo Bay(Urayasu-shi, Chiba)

Renewal of elevators

From January 2023
to February 2023

73

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Painting of exterior wall

From September 2023
to December 2023

57

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Renewal of air-conditioning equipmentin guest rooms

From October 2023
to December 2023

82

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Renewal works of piping

From September 2023
to December 2023

60

Oriental Hotel Okinawa Resort & Spa(Nago-shi, Okinawa)

Renovation of guest rooms(2nd phase)

From September 2023
to December 2023

470

Hilton Tokyo Narita Airport(Narita-shi, Chiba)

Renewal of telephone switchboard

From March 2023
to September 2023

55

Hilton Tokyo Odaiba(Minato-ku, Tokyo)

Repair of receiving and transforming
facility

From November 2023
to November 2023

114

Total
(Note)

2,009

New construction and renewal work include those for buildings, attached facilities, etc. as well as items classified as furniture and fixtures.

- 57 -