[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
January 25, 2023
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Contact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Revision of Forecast of Financial Results and Distribution for the 39th
Fiscal Period Ended December 2022, together with Forecast of Financial Results andDistribution for the 40th Fiscal Period Ending June 2023 and 41st Fiscal Period Ending
December 2023
Invincible Investment Corporation (“INV”) today announced the revision of its forecast of financial
results and Distribution per Unit (“DPU”) for the fiscal period ending December 2022 (39th Fiscal
Period), which was previously announced in “Notice concerning Revision of Forecast of Financial
Results and Distribution for the 39th Fiscal Period Ending December 2022” dated November 25,
2022, together with the newly announced forecast of financial results and DPU for the fiscal periods
ending June 2023 (40th Fiscal Period) and December 2023 (41st Fiscal Period).
1.

Revision of the forecast of financial results and distribution for the fiscal period ended December
2022 (from July 1, 2022 to December 31, 2022)
Operating
Revenues

Operating
IncomeOrdinary
Income

JPY million

JPY million

JPY million

JPY million

Total
Distribution
Amount
JPY million

10,882

5,122

3,995

3,994

3,993

JPY million

JPY million

JPY million

JPY million

JPY million

11,929

6,239

5,057

5,056

5,054

Amount of variance(B) – (A)JPY million

JPY million

JPY million

JPY million

JPY million

1,047

1,117

1,062

1,062

1,060

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

9.6

21.8

26.6

26.6

26.6

Previous forecast (A)(announced on
November 25, 2022)
Revised forecast (B)Net Income

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

1

Distribution
per Unit

Earnings per
Unit (Note 1)
Previous forecast (A)(announced on
November 25, 2023)(Excluding
Excess Profit
Distribution perUnit) (Note 1)

Excess Profit
Distribution
per Unit(Note 1)

Distribution
per Unit(Including Excess
Profit Distribution
per Unit) (Note 1)

JPY

JPY

JPY

JPY

655

655

-

655

JPY

JPY

JPY

JPY

829

829

-

829

Amount of variance(B) – (A)

JPY

JPY

JPY

JPY

174

174

-

174

Rate of variance((B) – (A)) / (A)

%

%

%

%

26.6

26.6

-

26.6

Revised forecast (B)(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 6,096,840 units

2.

Forecast of financial results and distribution for the fiscal periods ending June 2023 (fromJanuary 1, 2023 to June 30, 2023) and December 2023 (from July 1, 2023 to December 31,
2023)<Fiscal Period Ending June 2023>

Forecast for the fiscal
period ending
June 2023

Operating
IncomeOrdinary
Income

JPY million

JPY million

JPY million

JPY million

JPY million

11,690

5,964

4,657

4,656

4,651

Earnings per
Unit (Note 1)
Forecast for the fiscal
period ending
June 2023

Total
Distribution
AmountOperating
Revenues

Distribution
per Unit(Excluding Excess
Profit Distribution
per Unit) (Note 1)

Net Income

Excess Profit
Distribution
per Unit(Note 1)

Distribution
per Unit(Including Excess
Profit Distribution
per Unit)(Note 1)

JPY

JPY

JPY

JPY

763

763

-

763

(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 6,096,840 units<Fiscal Period Ending December 2023>

Forecast for the fiscal
period ending
December 2023

Total
Distribution
AmountOperating
Revenues

Operating
IncomeOrdinary
Income

JPY million

JPY million

JPY million

JPY million

JPY million

13,469

7,467

6,324

6,324

6,322

Net Income

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

2Earnings per
Unit (Note 1)
Forecast for the fiscal
period ending
December 2023

Distribution
per Unit(Excluding Excess
Profit Distribution
per Unit) (Note 1)

Excess Profit
Distribution
per Unit(Note 1)

Distribution
per Unit(Including Excess
Profit Distribution
per Unit)(Note 1)

JPY

JPY

JPY

JPY

1,037

1,037

-

1,037

(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 6,096,840 units(Reference)
Assumptions underlying the forecast of financial results and DPU for the fiscal periods ending
December 2022, June 2023 and December 2023 are provided in Appendix 1.
3. Reasons for the revision and disclosure of forecast of financial results and distribution
As announced in “Performance Update for December 2022” dated today, the operating status ofeach property up to December 2022 has been generally clarified, and DPU for the fiscal period ended
December 2022 is expected to increase by more than 5% (26.6%) from the previous forecast
announced in “Notice concerning Revision of Forecast of Financial Results and Distribution for the39th Fiscal Period Ending December 2022” dated November 25, 2022. Therefore, we have decided
to announce the revision of forecast of financial results and DPU for the fiscal period ended
December 2022.
Moreover, INV has decided to announce the forecast of financial results and DPU for the fiscal
periods ending June 2023 and December 2023, based on the information currently available to INV
and certain assumptions that are deemed reasonable by INV. An overview and outlook by segment
are as follows:
4. Overview by segment(1) Domestic hotels
During the fiscal period ended December 2022, Japan was hit by the seventh wave of COVID-19
infections from summer to early autumn. However, there were no restrictions on movement during
this period. Tourism and accommodation demand were solid, partly because events such as
fireworks festivals and summer festivals resumed in various places for the first time in three years.
The government’s travel subsidy program "National Travel Discount Campaign" which started in
October 2022 is helping to boost domestic accommodation demand. As a result, the total numberof domestic guests in the market exceeded the 2019 level in October and November 2022.
Moreover, in response to the substantial relaxation of border measures in October 2022 and thecurrent depreciation of the yen, inbound demand is on a recovery trend.
For the fiscal period ending June 2023 onwards, the recovery trend is expected to continue fordomestic and inbound demand in both leisure and business segments. However, it may take sometime for the number of Chinese tourists to return to pre-2019 levels due to the rapid spread of COVID19 infections in China after the change in its zero-Corona policy. SMBC Nikko Securities forecasts
This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

3

(announced on January 19, 2023) that the total number of visitors to Japan will be around 22.5 million
in 2023, about 70% of the record high of 31.88 million in 2019.
The KPIs of the domestic hotel portfolio is as shown below.

<Forecast of KPIs of the 75 domestic hotel portfolio1 by fiscal period>

Occupancy Rate2
ADR (JPY)3
RevPAR (JPY)4
GOP (JPY million)5
NOI (JPY million)6June fiscal
period(Actual)
61.5%
7,477
4,598
3,177
2,504

Y2023

Y2022

Decemberfiscal period(Forecast)
75.9%
10,199
7,744
8,850
7,353

Full-Year(Forecast)
68.8%
8,992
6,184
12,0289,857

June fiscal
period(Forecast)
78.9%
9,337
7,368
7,549
6,421

Decemberfiscal period(Forecast)
85.1%
10,357
8,810
10,701
8,951

Full-Year(Forecast)
82.0%
9,870
8,095
18,25015,372(Note 1) Based on 75 hotel properties; of the 84 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, the underlying
asset of preferred equity interest held by INV) held as of today, nine hotels with fixed-rent lease agreements are excluded.
Hereinafter the same.
(Note 2) “Occupancy Rate”, or “OCC” for hotel portfolio is calculated using the following formula:room occupancy rate = total number of rooms occupied during the relevant month ÷ (aggregate number of rooms during therelevant month x number of business days during the relevant months). Hereinafter the same.
(Note 3) “ADR,” or Average Daily Rate, is the value of the total room sales for a certain period (excluding service fees) divided by the total
number of sold rooms for the same period. Hereinafter the same.
(Note 4) “RevPAR”, or Revenues Per Available Room, is calculated by dividing the total sales for a certain period by the aggregate numberof rooms for the same period (rooms x number of days), and is the same figure as that of a product of ADR and occupancy rate.
This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

4

(Note 5) “GOP” means the gross operating profit, and is the amount remaining after deducting costs of hotel operations (the personnel,
utility and advertising expenses and other expenses) and the management services fee to operators (if any) from the hotel’srevenues. GOP for each fiscal period ended June 2020 and onwards includes the amount of employment adjustment subsidies
to be received by the hotel operators for the respective fiscal period, which requires a certain period of time to confirm. Therefore,
the amount of GOP is subject to change retroactively upon confirmation of the amount of employment adjustment subsidies.
Moreover, if variable rent is accrued due to changes in GOP arising from revision of the employment adjustment subsidies, wewill discuss with the tenant separately regarding the handling of such variable rent. In addition, GOP for the Sheraton GrandeTokyo Bay Hotel has been multiplied by 49%, or INV’s ownership ratio of the preferred equity interest. Hereinafter the same.
(Note 6) “NOI” is calculated using the following formula:
NOI＝ Rental Revenues – Property Related Expenses + Depreciation Expenses + Dividends on the preferred equity interest(TMK dividend) + (Management Contract Revenue – Management Contract Expense). Hereinafter the same.
(Note 7) Percentages are rounded to one decimal place. Hereinafter the same. ADR and RevPAR are rounded to the nearest yen and
GOP is rounded down to the nearest million yen.
(Note 8) The figures for December 2022 onwards show preliminarily estimated figures as of today, and are subject to change.

(2) Cayman Hotels
For the Cayman Hotels, demand is on a recovery trend, as travel-related restrictions to the Cayman
Islands have been lifted, and major airlines resumed flights to and from the United States. Visitors
are more willing to pay a premium for their long-delayed vacations, and the 2022 ADR (average daily
room rate) has exceeded the 2019 ADR compared to the same month consistently since May 2022.
Further, RevPAR has exceeded the 2019 RevPAR compared to the same month consistently since
October 2022. Moreover, GOP and NOI of the two Cayman hotels in 4th quarter 2022 haveexceeded that of 4th quarter 2019, both in US$ and in JPY. We expect a steady improvement of
performance to continue in the fiscal period ending June 2023 onwards.
The KPIs of the two Cayman Hotels are as shown below.

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

5<Forecast of KPIs of the two Cayman Hotels by fiscal period>

Occupancy Rate
ADR (USD)
RevPAR (USD)
GOP (USD)
NOI (USD)

June fiscal
period(Actual)
39.7%
370
147
8,559,847
7,144,569

Y2023

Y2022

Decemberfiscal period(Forecast)
56.2%
403
226
13,177,397
11,671,816

Full-Year(Forecast)
48.0%
389
187
21,737,244
18,816,385

June fiscal
period(Forecast)
68.5%
478
328
21,745,141
20,298,358

Decemberfiscal period(Forecast)
63.3%
393
249
14,200,168
12,657,103

Full-Year(Forecast)
65.9%
437
288
35,945,309
32,955,461(Note 9) The figures for January 2023 show preliminarily estimated figures as of today, and are subject to change.
(Note 10) ADR and RevPAR are based on USD.

(3) Residences
The residential sector saw a temporary decline in occupancy rates immediately after the outbreak of
the COVID-19 pandemic in 2020, but has remained stable since then, and stable earnings are
expected going forward.
<Forecasts for KPIs of 41 residential properties11>

Occupancy Rate12
Average Rent per
Tsubo (JPY)13
NOI (JPY million)14

Y2022

June fiscal
period(Actual)96.0%

Decemberfiscal period(Forecast)
96.3%

9,152
1,113

Y2023

96.3%

June fiscal
period(Forecast)
96.6%

Decemberfiscal period(Forecast)
96.7%

9,174

9,163

9,184

9,199

9,192

1,118

2,232

1,115

1,121

2,237

Full-Year(Forecast)

Full-Year(Forecast)
96.6%(Note 11) Based on 41 properties held by INV as of the end of December 2022; hereinafter the same.
(Note 12) Occupancy rate for residential portfolio is calculated by dividing the sum of total leased area by the sum of total leasable area atthe end of each month and the percentages are rounded to one decimal place.
(Note 13) Cumulative rent per tsubo is calculated by dividing the sum of the total rental revenue including common area charges for eachmonth by the sum of total leased area (tsubo) at the end of each month.
(Note 14) NOI is rounded down to the nearest unit.
same.

NOI excludes one-off insurance-related revenues and expenses; hereinafter the

5. Outlook
In the 4th quarter of December 2022, INV concluded a Memorandum of Understanding (Note 15)
whereby MyStays Hotel Management Co., Ltd. (“MHM”), INV’s main tenant, and its affiliates(collectively with MHM, the “MHM Group”) are scheduled to pay the total original fixed rent on the
73 domestic hotels managed by the MHM Group, with the total excess rent being paid as variable
rent to INV. The outlook is based on this fixed rent payment arrangement continuing in 2023.
Today, domestic hotels are on a recovery trend and total GOP of all 73 properties is trending at aThis English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

6level that exceeds the total fixed rent stipulated in the original MLPM agreement.
(Note 15) Please refer to “Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term Building Lease andProperty Management Agreement pertaining to the rent conditions for the period from July to September, 2022 with Major Tenant”
dated September 9, 2022 and “Notice concerning Conclusion of Memorandum of Understanding to Amend the Fixed-term
Building Lease and Property Management Agreement pertaining to the rent conditions for the period from October to December,
2022 with Major Tenant” dated December 9, 2022 for details of the Memorandum of Understanding.

Regarding dividend income related to preferred equity interest in the TMK which holds the Sheraton
Grande Tokyo Bay Hotel as an underlying asset, the dividend income is expected to be zero for the
fiscal periods ending December 2022, June 2023, and December 2023.
(Note 16) Kingdom Special Purpose Company (the “TMK”), which is the issuer of preferred equity interest and the owner of Sheraton
Grande Tokyo Bay Hotel, or the underlying asset, has a cumulative loss due to the decline in profits of the underlying asset
caused by the spread of COVID-19. Therefore, the TMK has been in a situation where it cannot pay dividends even if it settles
the accounts. Under such circumstances, the TMK has amended its Articles of Incorporation to temporarily extend its six-monthaccounting period to a 12-month accounting period in order to curb the costs of settlement of accounts. Therefore, in INV’s
fiscal period ending December 2022, the settlement of accounts of the TMK will not be carried out. This measure is temporary,
and TMK plans to restore to the original 6-month settlement once the cumulative loss is resolved and TMK is expected to be able
to resume payment of dividends.

As a result, the NOI of domestic hotels (83 non-TMK hotels) for the fiscal period ended December
2022 is expected to be JPY 7,705 million, an increase of 151.4% compared to the December 2021
fiscal period, but a decrease of 31.4% compared to the December 2019 fiscal period prior to thepandemic. NOI is expected to increase by 135.2% year-on-year for the fiscal period ending June
2023 and increase by 20.8% year-on-year for the fiscal period ending December 2023.
For the Cayman Hotels, NOI for the fiscal period ended December 2022 is expected to be JPY 1,609
million, a significant increase compared to JPY -280 million in the December 2021 fiscal period.
NOI is expected to increase by 170.4% year-on-year for the fiscal period ending June 2023 anddecrease by 5.6% year-on-year for the fiscal period ending December 2023.
Performance of the residential portfolio is solid. NOI for the 41 properties held today is expected to
be JPY 1,118 million in the fiscal period ended December 2022, almost the same level as the same
period in the previous year. NOI is expected to increase by 0.2% year-on-year for the fiscal period
ending June 2023 and increase by 0.3% year-on-year for the fiscal period ending December 2023
(based on the 41 properties held today).
As a result, net income for the fiscal period ended December 2022 is expected to be JPY 5,056
million. INV intends to distribute a total of JPY 5,054 million (JPY 829 per unit) from net income.
DPU is expected to increase by 359.6% year-on-year for the fiscal period ending June 2023 andincrease by 25.1% year-on-year for the fiscal period ending December 2023.
It is almost three years since the outbreak of the COVID-19 pandemic. The recovery of inbounddemand has started, and INV and its asset management company will continue to make all-out
This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

7

efforts with the goal of quickly approaching the profit levels before 2019.
Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

8

(Appendix 1)<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Periods ending December 31,
2022, June 30, 2023 and December 31, 2023>

Item

Fiscal period

Assets undermanagement

Assumptions

The December 2022 Fiscal Period: from July 1, 2022 to December 31, 2022 (184 days)
The June 2023 Fiscal Period: from January 1, 2023 to June 30, 2023 (181 days)
The December 2023 Fiscal Period: from July 1, 2023 to December 31, 2023 (184 days)
Properties held as of the end of the December 2022 Fiscal Period: 127 properties and preferred equity
interests in one TMK
Based on the properties held as of today (127 properties and preferred equity interests in one TMK),
and INV assumes that there will be no change in the portfolio through the end of the fiscal period ending
December 2023.
As of the end of the December 2022 Fiscal Period: 6,096,840 units

Units outstanding

INV assumes that there will be no change to the current 6,096,840 units issued and outstanding throughthe end of the December 2023 Fiscal Period.
Balance as of the end of the December 2022 Fiscal Period ended: JPY 240,797 million (borrowing: JPY
232,597 million, investment corporation bonds: JPY 8,200 million)
Balance as of the end of the June 2023 Fiscal Period: JPY 240,466 million (borrowing: JPY 232,266
million, investment corporation bonds: JPY 8,200 million)
Balance as of the end of the December 2022 Fiscal Period: JPY 240,466 million (borrowing: JPY
232,266 million, investment corporation bonds: JPY 8,200 million)

Interest-bearing
liabilities

As mentioned in the press releases entitled “Notice concerning Debt Financing (Refinance)” dated
December 22, 2022 and January 12, 2023, INV implemented a total of JPY 20,458 million of borrowing(refinance) in January 2023, and total balance as of today is JPY 240,466 million. Regarding the loans
maturing February onwards during the June 2023 Fiscal Period (a total of JPY 22,317 million), INV
intends to refinance at a similar condition. Regarding the investment corporation bonds (JPY 1,000
million) maturing May 2023, INV intends to redeem by issuing investment corporate bonds of the sameamount or by borrowing the same amount.
Regarding loans maturing during the December 2023 Fiscal Period (a total of JPY 113,814 million), INV
intends to refinance at a similar condition. Regarding the investment corporation bonds (JPY 2,000
million) maturing October 2023, INV intends to redeem by issuing investment corporate bonds of thesame amount or by borrowing the same amount.
INV assumes no other new loan or prepayment of loan through the end of the December 2023 Fiscal
Period.

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

9INV expects to record rental revenues for the fiscal period as follows:

・TMK dividend amount

December 2022
Fiscal Period
JPY 10,182 million(JPY 8,485 million)
JPY 1,746 million(USD 13,177
thousand)-June 2023
Fiscal Period
JPY 9,080 million(JPY 7,321 million)
JPY 2,609 million(USD 21,745
thousand)-

December 2023
Fiscal Period
JPY 11,765 million(JPY 10,019 million)
JPY 1,704 million(USD 14,200
thousand)-

Total operating revenues

JPY 11,929 million

JPY 11,690 million

JPY 13,469 million

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

INV estimates the amount of dividends on the preferred equity interests based on the performance of
the underlying asset and the assumed amount of expenses incurred by the TMK. As stated in themain text, there will be no TMK dividend on preferred equity interests through the end of the fiscal period
ending December 2023.
Operating revenues

INV recognizes management contract revenue from the overseas hotels as real estate investment
income from management contracts of the Cayman Hotels. The forecasts of management contract
revenue are based on estimated performance of the overseas hotels and the assumed amount ofexpenses incurred by the hotel management company. Management contract revenues from July to
December 2022 have been calculated based on the monthly average exchange rate of each month andresulted with USD1 = JPY 132.6 as the weighted average of this fiscal period. Management contract
revenues for January to December 2023 have been calculated based on exchange rate of USD 1 =JPY 120, and the foreign currency risk on the management contract revenues are partially hedged byforeign exchange forward contracts. Please refer to “Notice concerning Execution of Foreign
Exchange Forward” dated today for details of the foreign exchange forward. Previously, INV had
assumed that the expansion and renovation of the Cayman Hotels would begin in the summer of 2020
with the goal of completion in the summer of 2023. However, considering the situation of the Cayman
Hotels under the impact of COVID-19, INV was forced to refrain from discussions on the expansion andrenovation project. While INV resumed consideration of expansion and renovation based on thechanges in market environment, etc., INV does not anticipate and incorporate any particular impact of
the expansion and renovation for the purpose of this forecast through the end of the fiscal period ending
December 2023.
Rental revenues are calculated assuming certain changes in rent conditions with the MHM Group in
2023, and based on estimates as of today. In addition, INV assumes there will be no delinquencies or
non-payment of rent by other tenants.

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

10INV expects to incur property related expenses and management contract expenses out of operating
expenses for the fiscal period as follows:

Operating expenses

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

December 2022
Fiscal Period
JPY 426 million(JPY 16 million)
JPY 739 million
JPY 156 million
JPY 3,757 million
JPY 95 million

June 2023
Fiscal Period
JPY 442 million(JPY 18 million)
JPY 589 million
JPY 158 million
JPY 3,839 million
JPY 115 million

December 2023
Fiscal Period
JPY 435 million(JPY 16 million)
JPY 739 million
JPY 172 million
JPY 3,997 million
JPY 94 million

JPY 5,175 million

JPY 5,146 million

JPY 5,439 million

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

December 2022
Fiscal Period
JPY 514 million

June 2023
Fiscal Period
JPY 579 million

December 2023
Fiscal Period
JPY 562 million(of these, asset management fees)(JPY 300 million)(JPY 300 million)(JPY 300 million)

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

NOI

December 2022
Fiscal Period

June 2023
Fiscal Period

December 2023
Fiscal Period・NOI

JPY 10,511 million

JPY 10,383 million

JPY 12,027 million(of these, domestic hotel NOI)(of these, overseas hotel NOI)(of these, residential NOI)(JPY 7,705 million)(JPY 1,609 million)(JPY 1,118 million)(JPY 6,754 million)(JPY 2,436 million)(JPY 1,115 million)(JPY 9,309 million)(JPY 1,518 million)(JPY 1,121 million)

NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses+ Dividends on
the preferred equity interest (TMK dividend) + (Management Contract Revenue ‐ Management
Contract Expense)
NOI for June 2023 fiscal period and December 2023 fiscal period are calculated assuming changes inrent conditions for the period from January to December 2023 with the MHM Group.
INV expects to incur non-operating expenses for the fiscal period as follows:

Non-operating
expenses・Interest expense
・Finance related costs・Interest for investment
corporation bonds
・Depreciation of investment
corporation bonds issuance
expenses・Foreign exchange losses
Total non-operating expenses

December 2022
Fiscal Period
JPY 542 million
JPY 554 million

June 2023
Fiscal Period
JPY 560 million
JPY 537 million

December 2023
Fiscal Period
JPY 557 million
JPY 548 million

JPY 28 million

JPY 28 million

JPY 31 million

JPY 6 million

JPY 6 million

JPY 6 million

JPY 68 million
JPY 1,200 million

JPY 1,132 million

JPY 1,143 million

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

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The distribution per unit is calculated in accordance with the cash distribution policy as set forth in INV’s
Articles of Incorporation.
With respect to the distribution for the fiscal period ended December 2022, INV expects to distribute anaggregate amount of JPY 5,054 million (distribution per unit: JPY 829) from the net income for the fiscal
period ended December 2022 (JPY 5,056 million).
With respect to the distribution for the fiscal period ending June 2023, INV expects to distribute anaggregate amount of JPY 4,651 million (distribution per unit: JPY 763) from the net income for the fiscal
period ending June 2023 (JPY 4,656 million).
Distribution per unit

With respect to the distribution for the fiscal period ending December 2023, INV expects to distributean aggregate amount of JPY 6,322 million (distribution per unit: JPY 1,037) from the net income for the
fiscal period ending December 2023 (JPY 6,324 million).
For the fiscal periods ending December 2022, June 2023 and December 2023, INV expects to record
deferred gain on hedge of the interest rate swap as the valuation and conversion adjustments, etc. of
JPY 96 million, which is equal to the amount for the fiscal period ended June 2022. The distribution
per unit is calculated based on the assumption that fluctuation of the market value of the interest rate
swap does not affect the distribution per unit and earnings per unit.
Distribution per unit may vary due to various factors, including changes of the assets undermanagement, fluctuation of rent income associated with reasons such as change of tenants andoccurrences of unexpected repairs.

Excess profit
distribution per unit

INV believes maintaining the stability of cash distributions over the medium term is one of the mostimportant factors in determining the amount of distribution for a given fiscal period, and therefore, INV
has adopted the policy to make distributions in excess of profits in order to stabilize distributions, incases where dilution of investment units or significant expenses are to be recorded in connection with,among other things, the acquisition of assets or the raising of capital, leading to a temporary decreasein distribution per unit, taking into consideration the level of distribution per unit assuming suchacquisition of assets or capital raising had contributed for a full fiscal period.
INV may also consider making distributions in excess of profits for the purpose of decreasing the impact
from corporate tax increase arising from different rules in tax and accounting practices, such astreatment on depreciation of fixed term land lease or asset retirement obligation.
With respect to the fiscal periods ending December 2022, June 2023 and December 23, INV will nothave to make distributions in excess of profits in order to cope with the discrepancy between tax andaccounting treatment.
December 2022
Fiscal Period-

Excess profit distribution per unit

Other

June 2023
Fiscal Period-

December 2023
Fiscal Period-

INV assumes there will be no amendments to applicable laws and regulations, the taxation system,
accounting standards and other regulations that would affect the foregoing forecasts.
In addition, INV assumes there will be no unforeseen material changes in general economic trends,
real estate market conditions and other trends and conditions.

This English language notice is a translation of the Japanese-language notice released on January 25, 2023 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

12