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.
August 22, 2017

Midterm Financial Report for the Fiscal Year Ending December 31, 2017
(January 1, 2017 – June 30, 2017)
Japan Hotel REIT Investment Corporation
Listing:
Securities code:
URL:
Representative:

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

Asset Management Company:
Representative:
Contact:

Japan Hotel REIT Advisors Co., Ltd.
Hisashi Furukawa, Representative Director and President
Noboru Itabashi
Director and Senior General Manager of Operations Division
Phone: +81-3-6422-0530

Scheduled date to file midterm Securities Report:

September 20, 2017

Preparation of supplementary material on midterm financial report:
Schedule for presentation of midterm financial results:

Yes
Yes (Institutional investors and analysts only)(Amounts are rounded down to the nearest million yen)

1. Status summary of operation and assets for the midterm of the fiscal year ending December 31, 2017
(January 1, 2017 – June 30, 2017)(1) Operating results(Percentages: full year—changes from the previous year, midterm period—changes from the previous midterm period)

Midterm period ended
June 30, 2017
June 30, 2016
Fiscal year ended
December 31, 2016

Midterm period ended
June 30, 2017
June 30, 2016
Fiscal year ended
December 31, 2016
(Note)

Operating revenue
JPY1M%
11,272
20.0
9,390
29.7
22,107

27.5

Operating income
JPY1M
%
6,740
18.6
5,682
33.5
13,885

26.4

Ordinary income
JPY1M
%
5,951
22.2
4,868
40.2
12,22031.5

Net income
JPY1M
5,951
4,778

%
24.6
37.6

12,12330.4

Net income per unit
JPY
1,581
1,446
3,462

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

(2) Financial position
Midterm period ended
June 30, 2017
June 30, 2016
Fiscal year ended
December 31, 2016

Total assets
JPY1M
309,988258,515

Net assets

317,878

JPY1M
175,133
139,230

Equity ratio
%
56.5
53.9

Net assets per unit
JPY
46,554
41,912

181,989

57.3

48,376(Note) Net assets per unit are calculated based on the total number of investment units issued and outstanding at the end of the midterm period / full year.

－

1 －(3) Cash flows

Midterm period ended
June 30, 2017
June 30, 2016
Fiscal year ended
December 31, 2016

Cash flows fromoperating activities
JPY1M
8,117
4,963

Cash flows frominvesting activities
JPY1M
(875)
(16,461)

13,689(64,075)

Cash flows from
Cash and cash equivalents
financing activities
at end of period/year
JPY1M
JPY1M
(13,414)
20,20014,005
16,20563,061

26,373

2. Operating forecast for the fiscal year ending December 31, 2017
(January 1, 2017 – December 31, 2017)(Percentages show changes from the previous year)
Operating revenue
JPY1M

Full year

25,573%
15.7

Operating income
JPY1M

15,523%
11.8

Ordinary income
JPY1M

13,693%
12.1

Dividend per unit
(Excess of earnings
exclusive)

Net income
JPY1M

13,692%
12.9

Dividend per unit
resulting fromexcess of earnings

JPY
3,590

JPY
0

(Reference) Estimated net income per unit for the fiscal year ending December 31, 2017 (full year) ¥3,525(Calculated based on the estimate of period-average number of investment units of 3,883,679.)(Note) Reversal of reserve for temporary difference adjustment in the amount of ¥706 million is planned to be the source of dividend payment.

* 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 midterm period / full year(including investment units owned by Japan Hotel REIT Investment Corporation (hereinafter referred to as “JHR”))
As of June 30, 2017
3,761,907 units
As of June 30, 2016

3,321,907 units

As of December 31, 2016(b) Number of JHR’s own investment units held at the end of the midterm period / full year
As of June 30, 2017

3,761,907 units
0 units

As of June 30, 2016

0 units

As of December 31, 2016

0 units(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 38.

* Status of midterm audit procedures
At the time of disclosure of this midterm financial report, audit procedures for the semi-annual financial statements pursuant to the
Financial Instruments and Exchange Act of Japan are incomplete.

* Appropriate use of forecasts of results and other special items
Forward-looking statements presented in this midterm 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. Furthermore, we do not intend to guarantee any dividend amountby this forecast. For the assumptions of the operating forecast and notes for the use of operating forecast, please refer to “2.
Investment policies and operating results; (2) Operating results; (B) Outlook for the second half of the fiscal year” on page 5 and“Assumptions of the operating forecast for the midterm and full year of the fiscal year ending December 31, 2017 (18th period)”on page 12.

－2 －1. Related parties of the investment corporation
Disclosure is omitted because there is no significant change from “Structure of the investment corporation” in the most recent
Securities Report (submitted on March 22, 2017).

2. Investment policies and operating results(1) Investment policies
Disclosure is omitted because there is no significant change from “Investment policies,” “Investment targets” and “Distribution
policy” in the most recent Securities Report (submitted on March 22, 2017).

(2) Operating results(A) Overview of the midterm period 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 the asset management to Japan Hotel REIT Advisors Co., Ltd. (hereinafter referred to as the “AssetManagement 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 “RealEstate for Hotels, etc.”).
JHR, the former Nippon Hotel Fund Investment Corporation (hereinafter referred to as the “former NHF”), merged withthe former Japan Hotel and Resort, Inc. (hereinafter referred to as the “former JHR”) with an effective date of April 1, 2012
(hereinafter referred to as the “Merger”) and changed its name to Japan Hotel REIT Investment Corporation. Since theMerger, JHR has carried out seven public offerings for capital increase and continuously acquired “highly-competitive
hotels” in mainly “strategic investment areas” where domestic and inbound leisure 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 such means as new property acquisitions of 21 properties amounting to ¥177,349 million (acquisition
price basis) in total in the little more than five years since the Merger to the end of the midterm period under review (June30, 2017), resulting in a portfolio of 41 properties with a combined acquisition price of ¥286,801 million at the end of themidterm period under review. New property acquisitions of three properties (combined acquisition price of ¥32,673
million) also followed subsequent to the end of the midterm period under review, resulting in a portfolio of 44 properties
with a combined acquisition price of ¥319,474 million as at the submission date of this report.
The total number of investment units issued and outstanding, which was 3,761,907 units at the end of the midterm period
under review, has changed subsequent to the end of the midterm period under review as a result of issuance of new
investment units through domestic public offering and overseas offering of 236,000 units in July 2017 and issuance of new
investment units through third-party allotment of 12,940 units in August 2017 to a total number of investment units issued
and outstanding of 4,010,847 units as at the submission date of this report.
(b) Investment performance for midterm period under review
During the midterm period under review (six-month period from January 1, 2017 to June 30, 2017), the Japanese economy
continued to show a moderate recovery trend, due in part to improvement in corporate earnings backed by a trend ofdepreciation of the yen in the foreign exchange market and also economic recovery in the U.S. and EU zone and otherpickup in overseas economies, while the employment and income environment continued to improve. Amid such, thetourism market was in an environment in which there continued to be an increase in the number of overseas (inbound)tourists visiting Japan. In addition, as for policy, the Tourism Nation Promotion Basic Plan was approved by the Cabinet in
March 2017 for comprehensive and systematic promotion of measures for realization of a tourism nation, under which thegovernment has set new numerical targets, such as the amount of domestic and inbound travel spending and the total
number of persons staying overnight in regional areas, for realization of a tourism nation. With such expectations for－ 3 －growth of Japan’s tourism industry and hotel industry continuing, the hotels owned by JHR saw some signs of impact of
new hotel supply and minpaku (rentals of private homes as accommodation for a fee) in some areas of Tokyo and Osaka,
while on the other hand, many of the hotels in major regional cities achieved strong operating performance, mainly in therooms department. Also, the hotel investment market continued to be in a brisk state.
In addition, JHR has been implementing active asset management, which is the aggressive and proactive pursuit of greater
profitability and asset value of owned hotels.
With regard to status of operations during the midterm period under review of the five hotels that JHR leases to HotelManagement Japan Co., Ltd. (hereinafter referred to as “HMJ”) under variable rent contracts (hereinafter referred to as the“five HMJ hotels”) (Note 1) and the hotels which JHR leases to HMJ Group companies under variable rent contracts(namely, Okinawa Marriott Resort & Spa, Sheraton Grand Hiroshima Hotel (main facility of ACTIVE-INTER CITYHIROSHIMA), Hotel Centraza Hakata and Holiday Inn Osaka Namba, and hereinafter collectively referred to together
with the five HMJ hotels as the “nine HMJ hotels”) (Note 1), these hotels overall have posted increase over the same periodof the previous year both in sales and GOP (gross operating profit), led by the rooms department. The rooms department
aimed to generate greater earnings through such means as flexible pricing in line with each hotel’s accommodation market
condition in order to maximize RevPAR (Revenue Per Available Room). For further details of sales, GOP and othermanagement indicators for the nine HMJ hotels, please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ
Group Hotels” on page 18 and “D. Overview of the hotel business; (2) Major indicators of the hotel business; (a) The Nine
HMJ Hotels” on page 66.
Moreover, at the six hotels (Note 2) for which AAPC Japan K.K. (hereinafter referred to as “Accor”), a Japanese subsidiaryof Accor Hotels headquartered in Paris, France, serves as the operator (hereinafter referred to as the “six Accor hotels”),
successfully attracting inbound and domestic leisure demand, these hotels, too, posted increase over the same period of theprevious year both in sales and GOP. For further details of sales, GOP and other management indicators for the six Accor
hotels, please refer to “<Reference Materials 2> <2> Sales and GOP of the Six Accor Hotels” on page 20 and “D.
Overview of the hotel business; (2) Major indicators of the hotel business; (b) The Six Accor Hotels” on page 67.
On the other hand, at the six the b hotels (Note 3), which are leased to the subsidiaries of the Ishin Hotels Group with avariable rent structure, despite efforts made to address changes in the circumstances, such as inbound tourism shifting fromgroup tours to independent travel and a corresponding increase in the percentage of online bookings, such factors as impact
of increase in new hotel supply and minpaku in the Tokyo area led to the hotels in Tokyo posting decrease over the same
period of the previous year both in sales and GOP and the six the b hotels overall also posting decrease over the same
period of the previous year both in sales and GOP. For further details of sales, GOP and other management indicators forthe six the b hotels, please refer to “<Reference Materials 2> <3> Sales and GOP of the Six the b Hotels” on page 21 and“D. Overview of the hotel business; (2) Major indicators of the hotel business; (c) The Six the b Hotels” on page 67.
JHR has not only been working to increase hotel sales, but has also been striving to reduce the costs of each item under realestate operating costs, general and administrative expenses and borrowing costs through persistent talks with relevant
parties and other measures in an effort to increase variable rent, etc. through increase in GOP.
(Note 1)

The five HMJ hotels represent the five hotels, namely, Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay, Namba Oriental
Hotel, Hotel Nikko Alivila and Oriental Hotel Hiroshima. The nine HMJ hotels represent the nine hotels comprising the five HMJ hotels
plus Okinawa Marriott Resort & Spa, Sheraton Grand Hiroshima Hotel, which is the major facility of ACTIVE-INTER CITYHIROSHIMA, Hotel Centraza Hakata and Holiday Inn Osaka Namba. The HMJ Group Hotels represent the 12 hotels comprising thenine HMJ hotels plus Hilton Tokyo Narita Airport, International Garden Hotel Narita, and Hotel Nikko Nara. The same shall apply
hereinafter.

(Note 2)

Represents the six hotels, namely, ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, Mercure
Okinawa Naha and Mercure Yokosuka. The same shall apply hereinafter.

(Note 3)

Represents the six hotels, namely, the b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji, the b hakata and the bsuidobashi. The same shall apply hereinafter.

(c) Funding status
During the midterm period under review (six-month period from January 1, 2017 to June 30, 2017), JHR refinanced a－

4 －short-term loan of ¥1,700 million due for repayment in February 2017.
Consequently, as of the end of the midterm period under review, balance of interest-bearing debt totaled ¥125,624 million,
including short-term loans payable of ¥100 million, current portion of long-term loans payable of ¥18,458 million, longterm loans payable of ¥84,466 million and investment corporation bonds of ¥22,600 million, and the ratio of interestbearing debt to total assets at end of period (Note 4) stood at 40.5%.
Subsequent to the end of the midterm period under review, JHR procured a total of ¥18,686 million by way of issuance of
new investment units through domestic public offering and overseas offering in July 2017 and issuance of new investment
units through third-party allotment in August 2017, as well as ¥4,000 million in short-term loans and ¥11,000 million in
long-term loans, to fund the acquisition announced in June 2017 of Hilton Tokyo Narita Airport, International Garden Hotel
Narita and Hotel Nikko Nara. In addition, of the concerned loans of ¥15,000 million, JHR concluded either fixed interest
loans or interest rate swap contracts for ¥8,750 million. The fixed rate ratio (including the interest rate cap purchaseportion) on total interest-bearing debt at end of period is thus expected to become around 93% after the commencement of
the interest rate swap contracts.
(Note 4)

Ratio of interest-bearing debt to total assets at end of period = Balance of interest-bearing debt at end of period ÷ Total assets at end of
period × 100

As of June 30, 2017, JHR’s issuer ratings were as follows.
Rating agency

RatingOutlookRating and Investment Information, Inc.

A

StableJapan Credit Rating Agency, Ltd.

A+

Stable(d) Financial results
As a result of the abovementioned asset management, operating revenue, operating income and ordinary income were¥11,272 million, ¥6,740 million and ¥5,951 million, respectively, for the midterm period under review (six-month period
from January 1, 2017 to June 30, 2017). Net income for the midterm period under review was ¥5,951 million.
Variable rent from the hotels with variable rent leased to the nine HMJ hotels in the amount of ¥1,995 million is included inoperating revenue, but this amount is calculated based on the GOP of the nine HMJ hotels for the midterm period underreview. The variable rent to be ultimately received from the nine HMJ hotels will be determined by the full-year GOP (12month period) of the nine HMJ hotels.
JHR settles accounts on an annual basis and investment corporations do not have a system for interim dividends under theInvestment Trusts Act. Accordingly, no distribution of earnings can be made in the midterm period under review.
Distribution of earnings is made based on the earnings for the full year (12-month period from January 1, 2017 to
December 31, 2017). With regard to such distribution of earnings, in accordance with the policy for earnings dividend to
exceed 90% of JHR’s distributable profit that is defined by Article 67-15 of the Act on Special Measures Concerning
Taxation (Act No. 26 of 1957, as amended), the plan is that the amount calculated by adding a reversal of reserve fortemporary difference adjustment (amount of use of negative goodwill, such as for the amount equivalent to dilution ofdividend per unit due to capital increase through public offering, etc., 50-year amortization amount of negative goodwill(*5) and loss on retirement of fixed assets incurred by the replacement of facilities) to unappropriated retained earnings
would all be distributed except for fractions of less than one yen of dividend per unit.
(*5) For 50-year amortization amount of negative goodwill, please refer to Dividend per Unit (*1) of “Assumptions of
the operating forecast for the full year of the fiscal year ending December 2017 (18th period)” on page 15.
(B) Outlook for the second half of the fiscal year(a) Investment policies and issues to be addressed
The outlook is that, in 2017, the Japanese economy is expected to be on a moderate recovery, due in part to the effects ofvarious policies, while the global economy makes moderate recovery and the employment and income environment
continues to improve in Japan also. However, attention must be paid to the impact of U.S. monetary policy normalization,
the impact of monetary policies in Europe and Brexit negotiations, the impact of the economic outlook for China and other
Asian emerging economies, etc. and fluctuations in the financial and capital markets, geopolitical risks, etc. Moreover, in－

5 －the environment surrounding the tourism industry, it is expected that JHR will benefit from a further increase in the numberof inbound tourists, thanks to increase in personal income buoyed by economic growth in the Asian region, visa waivers
and relaxation of visa issuance requirements, increase in international flight arrival and departure slots and otherinfrastructure developments, among other factors, in addition to steady domestic leisure demand. On the other hand, a close
watch must be kept on the supply-demand balance, including an increase in supply from new development of hotels
following trends of increase in inbound tourists, the state of minpaku services, and other factors. Under such circumstances,
JHR intends to continue working with the Asset Management Company to manage assets based on the approach described
below aiming to enhance the attractiveness of investing in JHR.
Internal growth
JHR will aim to maximize variable rent and income from management contracts receivable by JHR. JHR will work toboost sales and GOP of hotels operated under variable rent contracts, which are the nine HMJ hotels and the six the b hotels,
as well as of the six Accor hotels that are mainly operated under a management contract structure. To achieve this goal,
JHR will request each hotel lessee, its operations support company and its operator to implement marketing initiatives toattract a wider range of demand, measures to maintain and increase room rates, etc. Also, through active asset management
including implementation of strategic capital expenditures, JHR will aim to accomplish shifting from competition based on
price to competition based on value with a focus to become prominent in the market in terms of both facilities and services.
In addition, with increase in the number of the Group hotels, the policy is to work to boost GOP through cost management
efforts by utilizing the synergy effect of the group as a whole.
For hotels with only fixed rent contracts, JHR will increase its efforts to monitor operating conditions and pay carefulattention to each tenant’s ability to bear the rent costs. For the hotels at which the ability to bear rent costs has beenenhanced through better performances, JHR will conduct negotiations to revise rents upward and introduce revenue sharing
in time with rent revision periods or contract expiration in order to increase JHR’s revenue.
In addition, JHR will carry out an ongoing program of facilities and equipment maintenance and improvement to ensureeach hotel becomes prominent in the market and to maintain and enhance asset value.
External growth
In terms of external growth strategy, JHR will keep its focus on acquiring highly-competitive hotels in areas where
attracting “domestic and inbound leisure demand” can be expected over the medium to long term as JHR has done to date.
On that basis, the policy is that limited-service hotels, full-service hotels and resort hotels are all investment targets, but
JHR will only acquire properties with competitive advantages in terms of both buildings, facilities, etc. (infrastructure) andthe capabilities of the hotel lessee and operator (services) on a property-by-property basis.
In the hotel investment market, circumstances of harsh competition over acquisitions are ongoing due in part to the listingof new Japanese REITs specializing in hotels. JHR will aim to expand its asset size which comes with an improvement in
the quality of its portfolio by acquiring properties while leveraging its strength and advantages and also utilizing the HMJ
platform.
Finance strategy
JHR seeks to maintain and enhance the relationships of trust with financial institutions with which it does business, and itaims to diversify the means of financing while implementing operations with a conservative financial strategy as a basic
policy putting importance on ensuring financial stability and strength. It aims to conduct financial operations by keeping
the ratio of interest-bearing debt to total assets at no larger than 50% as in the past. In addition, when seeking new funding
for property acquisitions or refinancing existing debt, JHR will work to reinforce its existing relationships with multiple
lenders and further diversify funding methods while considering the balance between the dispersion and extension of thematurity dates of its debt and borrowing costs.
Furthermore, while monitoring the conditions of the interest rate market, JHR aims to further improve its financial
foundation by extending maturity dates and managing risk of interest rates market by fixing rates, etc.

－

6 －(b) Significant subsequent events
1. Acquisition of assets
On July 12, 2017 and August 1, 2017, JHR acquired assets totaling three properties with a combined acquisition price of¥32,673 million as follows:
Property name

Hilton Tokyo Narita Airport

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

456 Kosuge, Narita-shi, Chiba

Acquisition dateJuly 12, 2017

Seller

NRT Project Godo Kaisha

Acquisition price (Note)¥13,175 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

Property nameInternational Garden Hotel Narita

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

241-1 Yoshikura, Narita-shi, Chiba

Acquisition dateJuly 12, 2017

Seller

IG Real Estate Hanbai Godo Kaisha

Acquisition price (Note)¥9,125 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

Property name

Hotel Nikko Nara

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

8-1 Sanjo-honmachi, Nara-shi, Nara

Acquisition dateAugust 1, 2017

SellerJH Nara Bridge Fund Goudou Kaisha

Acquisition price (Note)¥10,373 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

2. Borrowing of funds
JHR procured new borrowings as follows in order to partly fund the acquisition of the real estate beneficial interests in trust
and movable assets attached to the hotels as described above in “1. Acquisition of assets.”(1) Term Loan 33
Lenders

Sumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd. /Sumitomo Mitsui Trust Bank, Limited

Amount of the loan

¥4,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.275%

Date of borrowing

July 12, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity dateJune 29, 2018

Collateral

Unsecured/Unguaranteed－

7 －(2) Term Loan 34
Lenders

Sumitomo Mitsui Banking Corporation / The Chiba Bank, Ltd.

Amount of the loan

¥2,250 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.40%

Date of borrowing

July 12, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity dateJune 30, 2023

Collateral

Unsecured/Unguaranteed(3) Term Loan 35
Lenders

Sumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd. /Resona Bank, Limited

Amount of the loan

¥4,250 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.60%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2026

Collateral

Unsecured/Unguaranteed(4) Term Loan 36
LenderSumitomo Mitsui Trust Bank, Limited

Amount of the loan

¥1,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(5) Term Loan 37
LenderMitsubishi UFJ Trust and Banking Corporation

Amount of the loan

¥700 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.45%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(6) Term Loan 38
LenderDevelopment Bank of Japan Inc.

Amount of the loan

¥500 million

Interest rate

0.75392% (fixed interest rate)

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed－

8 －(7) Term Loan 39
LenderThe Bank of Fukuoka, Ltd.

Amount of the loan

¥500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(8) Term Loan 40
LenderAozora Bank, Ltd.

Amount of the loan

¥500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(9) Term Loan 41
LenderTHE NISHI-NIPPON CITY BANK, LTD.

Amount of the loan

¥1,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(10) Term Loan 42
Lender

Shinsei Bank, Limited

Amount of the loan

¥300 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.45%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed－

9 －3. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on June 19, 2017 and June 28, 2017.
Payment for the new investment units was completed on July 5, 2017 and August 2, 2017, and the investment units were
issued under the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥153,516,129,309,
with the number of investment units issued and outstanding totaling 4,010,847 units.
(a) Issuance of new investment units (domestic public offering and overseas offering)Number of investment units issued:
Of which, domestic public offering:

236,000 units
99,743 units

Of which, overseas offering:
Issue price:

136,257 units¥77,518 per unit

Total issue price:
Paid-in amount (issue value):¥18,294,248,000¥75,065 per unit

Total paid-in amount (total issue value):
Payment date:¥17,715,340,000
July 5, 2017(b) Issuance of new investment units (third-party allotment)
Number of investment units issued:
12,940 units
Paid-in amount (issue value):
Total paid-in amount (total issue value):¥75,065 per unit
¥971,341,100

Payment date:
Allottee:August 2, 2017
SMBC Nikko Securities Inc.

(c) Use of funds
JHR allocated the proceeds from the issuance of new investment units through the domestic public offering andoverseas offering of ¥17,715,340,000 to part of the funds for acquisition (including expenses for acquisition) of Hilton
Tokyo Narita Airport, International Garden Hotel Narita and Hotel Nikko Nara as described above in “1. Acquisitionof assets.” In addition, the proceeds from the issuance of new investment units through third-party allotment of¥971,341,100 will be reserved as cash on hand in order to allocate to part of funds for future acquisitions of specified
assets, part of funds for repayment of loans, or repair expenses and capital expenditures to maintain or improve
competitiveness of existing properties.

－

10 －

(c) Operating forecast
The following is JHR’s operating forecast for the full year of the fiscal year ending December 31, 2017 (18th period). For
the assumptions of the operating forecast, please refer to “Assumptions of the operating forecast for the midterm and fullyear of the fiscal year ending December 31, 2017 (18th period)” on page 12.
In addition, the dividend per unit based on the annualized effect of the acquisitions of Hilton Tokyo Narita Airport andInternational Garden Hotel Narita, which were acquired on July 12, 2017, and Hotel Nikko Nara, which was acquired on
August 1, 2017, is assumed to be ¥3,630. For the annualized effect of the new property acquisitions, please refer to“<Reference Materials 1> Highlights of the operating forecast and forecast of dividend” on page 17. For the assumptions of
the forecast of the annualized effect, please refer to “<Reference Materials 3> Assumptions of the forecast of theannualized effect” on page 22.

Full year of the fiscal year ending December 31, 2017 (18th period)

Forecast

Previous forecast

Increase

this time(Note 1)

(Decrease)

Operating revenue¥25,573 million¥25,514 million

Operating income¥15,523 million¥15,405 million¥117 million

Ordinary income¥13,693 million¥13,493 million¥200 million

Net income¥13,692 million¥13,492 million¥200 million¥3,590¥3,540

¥50

¥0

¥0

¥0

Dividend per unit
Dividend per unit resulting from excess of earnings(Note 1)
(Note 2)¥58 million

These are the figures announced in the “Notice Concerning Revision of Operating Forecast for Fiscal Year Ending December 2017(18th Period)” dated June 19, 2017.
The forecast figures above are the current forecasts calculated based on certain assumptions. As such, actual operating revenue,
operating income, ordinary income, net income, 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 full year of the fiscal year ending December 2017 (18th period)
Item
Assumptions
Calculation
Period・Full year of the fiscal year ending December 2017 (18th Period): January 1, 2017 through December 31, 2017 (365days）
・The 41 properties owned by JHR as of June 30, 2017, plus the following three acquired assets, to total 44 properties
are assumed.
<Acquired Assets>

Assetsunder
Management

Acquisition date

Name of asset

July 12, 2017

Hilton Tokyo Narita Airport

July 12, 2017

International Garden Hotel Narita

August 1, 2017

Hotel Nikko Nara・It is assumed that there will be no change (acquisition or disposition, etc.) in assets under management other than theabove through the end of the fiscal year ending December 2017 (18th period). However, the actual results may
fluctuate depending on the changes in assets under management that may take place.
・Operating revenue is calculated based on the lease and other contracts effective as of today and in consideration ofcompetitiveness of hotels, market environment and other factors. If there are lease contracts with regard to facilities
other than hotels, such as retail facilities and offices, operating revenue calculated on the said lease contracts is
included.
・Rents, etc. of the main hotels are calculated based on the following assumptions.
(1) The HMJ Group Hotels
The assumptions of the fixed rent and variable rent for the HMJ group hotels are as follows.
Total rent = Fixed rent + Variable rent
Variable rent = (Total GOP of the hotels – GOP base amount) × Variable rent ratio (%)
The fiscal year ending December 2017 (18th period)

The Five HMJ Hotels

Operating
Revenue

Total GOP of

GOP base

Variable

Variable

Fixed

Total

the hotel(s)amountrent ratio

rent

rent

rent

1,180

1,610

2,790

3,826

3,221

7,047

Midterm

3,064

1,675

Full year

7,852

3,351

Okinawa Marriott
Resort & Spa

Midterm

431

350

Full year

1,414

700

Sheraton Grand

Midterm

466

234

Hiroshima Hotel (*1)

Full year

894

468

Midterm

475

212

Full year

907

425

Holiday Inn

Midterm

663

325

Osaka Namba

Full year

1,362

650

Hilton Tokyo Narita

Midterm－－

Airport (*2)

Full year

492

260

International Garden

Midterm－－

Hotel Narita (*3)

Full year

288

170

Midterm－－

Full year

362

Hotel Centraza Hakata

Hotel Nikko Nara (*4)

(Unit: millions of yen)

204

85.0％
90.0％
82.5％
90.0％
92.5%
86.5%
98.0%
83.0%

73

274

348

642

550

1,192

191

174

365

351

348

699

236

199

436

434

400

834

313

288

601

658

576

1,234

－

－

－

201

208

409

－

－

－

115

157

273

－

－

－

131

170

301

(*1) Stating the rent for Sheraton Grand Hiroshima Hotel, the major facility of ACTIVE-INTER CITY HIROSHIMA. Rent from theoffice building and the retail zone for the fiscal year ending December 2017 (18th period) is expected to be ¥220 million for themidterm and ¥442 million for the full year. These figures include ¥8 million for the midterm and ¥16 million for the full year as
variable rent pursuant to a revenue-linked rent agreement with some retail tenants.

－

12 －

Item

Assumptions(*2) Rent for Tokyo Narita Airport for the full fiscal year ending December 2017 (18th Period) shows the estimated figure to incur
during the 173 days from July 12, 2017 to December 31, 2017. For your information, it is expected that the GOP base amountfrom the fiscal year ending December 2018 will be ¥550 million and the annual fixed rent will be ¥444 million.
(*3) Rent for International Garden Hotel Narita for the fiscal year ending December 2017 (18th period) shows the estimated figure
to incur during the 173 days from July 12, 2017 to December 31, 2017. For your information, it is expected that the GOP baseamount from the fiscal year ending December 2018 will be ¥360 million and the annual fixed rent will be ¥336 million.
(*4) Rent for Hotel Nikko Nara for the fiscal year ending December 2017 (18th period) shows the estimated figure to incur during
the 153 days from August 1, 2017 to December 31, 2017. For your information, it is expected that the GOP base amount fromthe fiscal year ending December 2018 will be ¥470 million, the variable rent ratio will be 91.5%, and the annual fixed rent willbe ¥420 million.
(*5) Please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ Group Hotels” below for the comparison of sales and
GOP of the HMJ group hotels.

(2) The Six Accor Hotels
Income from management contracts and variable rent of the six Accor hotels(Unit: millions of yen)ibis Tokyo
Shinjuku

ibis Styles
Kyoto Station

ibis Styles
SapporoMercureSapporoMercureOkinawa Naha

MercureYokosuka

Total

Midterm

177

261

262

250

233

159

1,346

Full year

394

562

634

629

482

275

2,979

(*1) Please refer to “<Reference Materials 2> <2> Sales and GOP of the Six Accor Hotels” below for thecomparison of sales and GOP of the six Accor hotels.
Operating
Revenue(*2) For income from management contracts, it is assumed that each hotel’s GOP amount is recognized as income
from management contracts and the management contract fees to be paid by JHR are recognized as an
operating expense. In cases where certain revenue from non-hotel tenant(s), etc. is included in the hotel’s
GOP, such tenant revenue is subtracted from GOP to calculate income from management contracts. Suchtenant revenue is recognized as parking revenue.
(*3) Mercure Sapporo includes variable rent which is linked to the sales of tenant(s) other than the hotel.
(3) The Six the b Hotels
Fiscal year ending December 2017 (18th Period)
Variable Rent
Midterm13
the b suidobashi
Full year
27
Midterm55
the b akasaka-mitsuke
Full year
115
Midterm67
the b ikebukuro
Full year
141
Midterm18
the b ochanomizu
Full year
39
Midterm31
the b hachioji
Full year
65
Midterm71
the b hakata
Full year
153
Midterm
257
Total
Full year543

Fixed Rent
42
84
68
136
108
218
34
69
60
121
44
89
359
720

(Unit: millions of yen)
Total Rent
55
112
123
252
176
360
52
108
91
186
116
243
617
1,263

(*1) Fixed rent includes rent from non-hotel tenant(s).
(*2) Please refer to “<Reference Materials 2> <3> Sales and GOP of the Six the b Hotels” below for thecomparison of sales and GOP of the six the b hotels.

－

13 －

Item

Assumptions(4) Other hotels subject to variable rent
Variable rent from other hotels subject to variable rent
Smile Hotel Nihombashi Mitsukoshimae
Hotel Vista Kamata Tokyo
Chisun Inn Kamata
Hotel Keihan Universal City
Hotel Sunroute Shinbashi
Hilton Tokyo Bay
Hilton Nagoya
Total
Operating
Revenue(Unit: millions of yen)
Midterm

Full year

18－
37
Undisclosed (*)
96
Undisclosed (*)
Undisclosed (*)
850

18
22
78
Undisclosed (*)
96
Undisclosed (*)
Undisclosed (*)1,430(*) Undisclosed since tenants that concluded lease agreements did not agree to disclose rent revenue, etc.
・The following is the breakdown of variable rent and income from management contracts.
<Breakdown of variable rent for the fiscal year ending December 2017 (18th period)>(Unit: millions of yen)
Midterm

Full year

2,003
1,346
257
850
4,457

6,378
2,979
543
1,430
11,332

The HMJ Group Hotels
The Six Accor Hotels
The Six the b Hotels
Other hotels with variable rent (7 hotels)
Total (31 hotels)(*) For details of variable rent and income from management contracts, please refer to page 65, “D. Overview ofthe hotel business (1) Rent structures of hotels with variable rent, management contract or revenue sharing.”・With respect to real estate leasing expenses, which constitute a major part of the operating expenses, expenses
other than depreciation are calculated based on historical data, and variable factors are reflected in the calculation.
・It is assumed that the ¥1,476 million will be recognized as expenses for property taxes, city planning taxes, etc.
・In general, property taxes, city planning taxes, etc. on acquired assets are settled with the previous owners at thetime of acquisition, calculated on a pro rata basis of the holding period. For JHR, such settlement amount isincluded in the acquisition price, and it will not be recognized as expenses for the calculation period. The property
taxes, city planning taxes, etc. to be recorded as expenses for the fiscal year ending December 2017 (18th period)
for the five properties (CANDEO HOTELS UENO-KOEN, Hotel Centraza Hakata, Holiday Inn Osaka Namba,
HOTEL ASCENT FUKUOKA and Hilton Nagoya) acquired in the fiscal year ended December 2016 (17thperiod) are assumed to be ¥166 million for nine months.
・Depreciation is calculated using the straight-line method, and is estimated to be ¥3,814 million, after taking into
OperatingExpensesconsideration the acquisition price of the acquired assets (including incidental costs) as well as the planned capital
expenditures (¥3,144 million) (¥1,996 million for capital expenditure I, ¥593 million for capital expenditure II,and ¥555 million for capital expenditure III)(*) for the fiscal year ending December 2017 (18th period).
(*) JHR classifies capital expenditures into the following three categories. (I) Capital investment related torenewal of equipment 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.
・Repair expenses for buildings are recognized as expenses in the estimated amount necessary for each operating
period. Please note that the repair expenses of each operating period may differ materially from the forecast
amount for various reasons, such as; (1) Emergency repair expenses may be necessary due to damage to buildings
from unexpected causes; (2) The amount of repair expenses generally tends to increase in difference over time;and (3) Repair expenses are not required on a regular basis.

－

14 －

Item

Assumptions
・¥1,835 million is expected for borrowing-related costs, including interest expense, amortization for financing fee,

Non-operating
arrangement fee and amortization for derivative instruments (interest rate caps).
Expenses・Expenses for issuance of new investment units and secondary offering are amortized over a period of three years
by the straight-line method.
・The balance of interest-bearing debt (sum of loans and investment corporation bonds) was ¥125,624 million as ofJune 30, 2017. It is assumed that the balance of interest-bearing debt will be ¥140,613 million as of August 31,
2017 after acquiring the acquired assets and ¥140,399 million as of December 31, 2017.
Interest・It
is assumed that ¥9,050 million loans, which are due in September and November 2017, will be repaid bybearing Debt
¥9,000 million refinancing and ¥50 million cash on hand.
・It is assumed that the contractual repayment of the above-mentioned loans on or after July 1, 2017 in the amountof ¥175 million will be paid by cash on hand.
Issuance ofInvestment
Units

・The number of investment units issued as of today (4,010,847 units) is assumed.
・It is assumed that there will be no additional issuance of investment units through to the end of the fiscal year
ending December 2017 (18th period).
・Dividend per unit for the fiscal year ending December 2017 (18th period) is calculated based on the following
assumptions.
Net income¥13,692 million

Use of reserve for temporary difference adjustment (negative goodwill) (*1)

50-year amortization amount of negative goodwill (*1)
Loss on retirement of noncurrent assets (*2)
Adjustment for dilution (*3)

70 million¥374 million

Distributable amount¥14,399 million

Total number of investment units issued

4,010,847 units

Dividend per unit

Dividend
per Unit¥262 million¥3,590(*1) Starting from the fiscal year ending December 31, 2017 (18th period), JHR will commence paying out
dividends through reversal of reserve for temporary difference adjustment in connection with partial
amendments to the “Ordinance on Accountings of Investment Corporations” and the “Regulation for Real
Estate Investment Trusts and Real Estate Investment Corporations” of The Investment Trusts Association,
Japan. Specifically, JHR transferred the remaining balance of dividend reserve (¥13,127 million) attributable
to the gain on negative goodwill in the cash dividends statements for the fiscal year ended December 31,
2016 (17th period) to “reserve for temporary difference adjustment,” and reverse ¥262 million (hereinafter
called the “50-year amortization amount of negative goodwill”), which is an amount equivalent to 2% (1/50)of the remaining balance of the reserve for temporary difference adjustment, to pay out as dividends, withthe remaining balance of the reserve for temporary difference adjustment set as the maximum amount, forevery year from the fiscal year ending December 31, 2017 (18th period). The remaining balance of dividend
reserve and the 50-year amortization amount may fluctuate in the future.
(*2) 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.
(*3) Although dilution of investment units due to the issuance of new investment units is expected uponacquisitions of acquired assets, allocation of reserve for temporary difference adjustment (negative goodwill)is planned to avoid the impact of the said dilution on dividend per unit for fiscal period ending December
2017.
・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 environment ofhotel 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 2017 (18th period) is expected to be ¥12,420 million.

－

15 －

Item

Assumptions
・The operating status for the fiscal year ending December 2017 of the acquired assets is estimated as follows.
<Hilton Tokyo Narita Airport>(Unit: millions of yen)
Fiscal year ending December

Annualized (*3)

2017
Operating days

173 days

365 days

Operating revenue

409

808

NOI (*1)

406

719

-

5.5

NOI yield (%) (*2)<International Garden Hotel Narita>(Unit: millions of yen)
Fiscal year ending December
2017

Operating days

Annualized (*3)

173 days

365 days

AcquiredOperating revenue

273

569

AssetsNOI (*1)

271

527

-

5.8

NOI yield (%) (*2)<Hotel Nikko Nara>(Unit: millions of yen)
Fiscal year ending December

Annualized (*3)

2017
Operating days

153 days

365 days

Operating revenue

301

675

NOI (*1)

298

626

-

6.0

NOI yield (%) (*2)(*1) NOI = Real estate operating revenue – Real estate operating costs + Depreciation + Loss on retirement of
noncurrent assets + Asset retirement obligations expenses(*2) NOI yield = NOI ÷ Acquisition price(*3) For the assumptions of calculating the annualized effect, please refer to “<Reference Materials 3>
Assumptions of the forecast of annualized effect” below.
Dividend
per Unit
Resultingfrom Excessof Earnings

・It is assumed that the excess of earnings (dividend per unit resulting from excess of earnings) will not be
distributed.

・It is assumed that revision in law, tax system, accounting standard, regulations of the listing, regulations of The
Other

Investment Trusts Association, Japan that may impact the forecast above will not be made.
・It is assumed that unexpected major incident will not occur in the general economy, real estate market and hotelbusiness environment, etc.
・The numerical values are rounded down to the nearest millions of yen in the assumptions above.

－

16 －

<Reference Materials 1> Highlights of the operating forecast and forecast of dividend
Comparison and and the major factors causing the variance between the operating forecast for the full year of the fiscal
year ending December 31, 2017 (18th Period) announced in the press release “Notice Concerning Revision of
Operating Forecast for Fiscal Year Ending December 2017 (18th Period) dated June 19th, 2017 (Previous Forecast)and operating forecast this time are as follows.
(Unit: millions of yen)
18th Period

18th Period

Previous Forecast

Forecast This Time(A) (*1)

Properties

Annualized（B）-（A）

Variance

44

44

44

44

-

-

319,474

319,474

319,474

319,474--

Operating Revenue

25,514

26,58325,573

26,64258

0.2%

Real Estate
Operating Revenue

25,514

26,58325,573

26,64258

0.2%

14,904(14)

Variable Rent

55.9%

14,255 56.1%

Composition

14,918 55.7%

Composition

14,240 55.9%

Increase in fixed rent: JPY13M(0.1)% Decrease in utilities income, etc. : JPY(27M)

72

Variance in variable rent, income frommanagement contracts, and rent from revenue
sharing: The HMJ Group Hotels JPY160M, the Six
0.6%
Accor Hotels JPY54M, the Six the b Hotels
JPY(82M), and others including rent from revenue
sharing JPY(59M)

22,188

60

0.3%

6.9%

0.0%

11,259 43.9%

11,664 44.3%

11,332 44.1%

11,737

NOI (*3)

21,28822,12821,349NOI Yield

6.7%

6.9%

6.7%

NOI after Depreciation (*3)

17,366

17,971

17,461

18,06695

NOI Yield after Depreciation

5.4%

5.6%

5.5%

5.7%

0.0%

Operating Income

15,405

15,94915,523

16,067117

0.8%

Ordinary Income

13,493

14,028

13,693

14,228200

1.5%

Net Income

13,492

14,027

13,692

14,227200

1.5%

Use of Negative Goodwill

706

332

706

332

-

-

Total Dividends

14,19814,35814,39814,559200

1.4%

No. of Units Issued

4,010,847

4,010,847

4,010,847

4,010,847

-

-

3,540

3,580

3,590

3,630

50

1.4%

Dividend per Unit (JPY)

44.1%

Composition

Major Factors Causing the Variance

Ratio

Acquisition Price

Fixed Rent

Dividend

Annualized (*2)

No. of Properties

Composition

Profit
and
Loss

(B)

Comparison
with Previous
Forecast

0.6%

The operating forecast for the fiscal year ending December 2017 (18th period) announced in “Notice Concerning Revision of Operating Forecast
for Fiscal Year Ending December 2017 (18th Period) dated June 19th 2017.
(*2) For the assumptions of the forecast this time of the annualized effect (hypothetical result), please refer to “<Reference Materials 3> Assumptionsof the forecast of annualized effect” below. The annualized effect is shown for reference purpose only calculated based on such assumption thatthe acquisitions of the acquired assets, etc. during the period contributed on a full year basis, and does not represent any forecast for theoperating status and dividend of JHR for a specific calculation period.
(*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 + Loss on retirement of noncurrent
assets + Asset retirement obligations expenses
NOI yield = NOI ÷ Acquisition price
NOI after depreciation = Real estate operating revenue – Real estate operating costs
NOI yield after depreciation = NOI after depreciation ÷ Acquisition price
(*1)

－

17 －

<Reference Materials 2>
Of the hotels that have adopted variable rent, the following presents sales and GOP of the HMJ group hotels, the six Accor hotels andthe six the b hotels. The numerical figures are based on figures obtained from hotel lessees, etc. Please note that these figures havenot been audited or gone through other procedures. No guarantee is made as to the accuracy or completeness of the figures andinformation. Sales and GOP are rounded off to the nearest millions of yen. Comparison with the previous period is rounded off to one
decimal place.
<1> Sales and GOP of the HMJ Group Hotels(1) Hotel sales (by hotel)(Unit: millions of yen)
FY 2016(Fiscal year ended
December 2016)
Sales of the HMJ Group Hotels

Comparison
withprevious
periodActual

FY 2017(Fiscal year ending December 2017)
Forecast
Comparison
this time
Previous
with theFirst half: actual
forecast
previous
Second half:
forecast
forecast
2,519
2,431
(3.5)%
2,984
2,870(3.8)%First half of the year

2,465

1.7%

Second half of the year
Full year
First half of the year
Oriental Hotel
Second half of the year
tokyo bay
Full year
First half of the year
Namba Oriental Hotel
Second half of the year
Full year
First half of the year
Second half of the year
Hotel Nikko Alivila
Full year
First half of the year
Oriental Hotel Hiroshima Second half of the year
Full year
First half of the year
Total of the Five HMJ
Second half of the year
HotelsFull year
First half of the year
Okinawa Marriott
Second half of the year
Resort & Spa
Full year
First half of the year
Sheraton Grand
Second half of the year
Hiroshima Hotel
Full year
First half of the year
Second half of the year
Hotel Centraza Hakata
Full year
First half of the year
Holiday Inn
Second half of the year
Osaka Namba
Full year
First half of the year
Total of the Nine
Second half of the year
HMJ Hotels
Full year

2,896

2.4%

5,361
3,454
3,817
7,271
1,386
1,491
2,877
2,421
3,734
6,155

2.1%
1.7%
(2.8)%(0.7)%
16.6%
11.1%
13.7%
1.8%
4.6%
3.5%

5,503
3,452
3,935
7,387
1,438
1,544
2,982
2,502
3,787
6,289

1,025
1,216
2,240
10,751
13,15423,905
1,607
2,326
3,933
1,369
1,627
2,996
1,155
1,265
2,421

3.4%
6.4%
5.0%
3.6%
2.7%
3.1%
(0.4)%(3.2)%(2.1)%
1.7%
8.3%
5.2%
2.8%
5.0%
3.9%

1,026
1,248
2,274
10,93813,49824,436
1,629
2,445
4,074
1,391
1,568
2,959
1,178
1,146
2,324

1,104
1,103
2,206
15,985
19,47635,461

32.7%(2.7)%
12.3%
4.5%
2.2%
3.3%

1,115
1,201
2,316
16,251
19,85836,109

Kobe Meriken Park
Oriental Hotel

－

18 －

5,301
3,319
3,646
6,966
1,394
1,472
2,866
2,568
3,813
6,381
993
1,209
2,202
10,706
13,01023,715
1,692
2,404
4,097
1,601
1,536
3,137
1,266
1,169
2,434
1,011
1,061
2,073
16,27619,18035,456(3.7)%(3.8)%(7.3)%(5.7)%(3.0)%(4.7)%(3.9)%
2.6%
0.7%
1.5%
(3.2)%(3.1)%(3.2)%(2.1)%(3.6)%(2.9)%
3.9%(1.7)%
0.5%
15.1%(2.0)%
6.0%
7.4%
2.0%
4.8%
(9.3)%(11.7)%(10.5)%
0.2%(3.4)%(1.8)%

Comparison
withprevious
period(1.4)%(0.9)%(1.1)%(3.9)%(4.5)%(4.2)%
0.6%(1.3)%(0.4)%
6.1%
2.1%
3.7%
(3.0)%(0.6)%(1.7)%(0.4)%(1.1)%(0.8)%
5.3%
3.4%
4.2%
17.0%
(5.6)%
4.7%
9.5%(7.6)%
0.6%(8.4)%(3.8)%(6.1)%
1.8%(1.5)%(0.0)%

(Unit: millions of yen)
FY 2016(Fiscal year ended
December 2016)
Sales of the HMJ Group Hotels
ActualHilton Tokyo Narita
AirportInternational Garden
Hotel Narita

Hotel Nikko Nara

Total of the HMJ Group
Hotels

FY 2017(Fiscal year ending December 2017)

Comparison
withprevious
periodPrevious
forecast

Forecast thistimeComparison ComparisonFirst half:with thewithactualprevious
previous
Second half:
forecast
periodforecast
1,542
8.6%
0.8%
1,671
6.7%
(3.2)%
3,213
7.6%(1.3)%
705(2.8)%(4.1)%
731
1.8%(4.0)%
1,435(3.4)%(1.2)%
1,458
2.2%(1.7)%
1,515(1.1)%(0.4)%First half of the year
Second half of the year
Full year
First half of the year
Second half of the year
Full year
First half of the year

1,420
1,566
2,986
734
718
1,453
1,483

(0.8)%
2.8%
1.1%
11.9%
8.5%
10.2%
(1.4)%

1,530
1,725
3,255
725
761
1,486
1,426

Second half of the year

1,521(2.4)%

1,533

Full year

3,003(1.9)%

2,959

2,973

0.5%

First half of the year

19,622

3.9%

19,932

19,9800.2%

1.8%

Second half of the year

23,281

2.1%

23,87723,096(3.3)%(0.8)%

Full year

42,9032.9%

43,80843,077(1.7)%

0.4%(1.0)%(*1) Hotel Centraza Hakata and Holiday Inn Osaka Namba were acquired on April 1, 2016 and August 1, 2016, respectively. The figures for the fiscal
year ended December 2016 are for the entire year including prior to the acquisition.
(*2) The figures for the fiscal year ended December 2016 and fiscal year ending December 2017 of the acquired assets (Hilton Tokyo Narita Airport,
International Garden Hotel Narita, and Hotel Nikko Nara), which were acquired in the fiscal year ending December 2017, are for the entire year
including prior to the acquisition.

(5) Hotel GOP(Unit: millions of yen)

GOP and Ratio of GOPof the HMJ Group Hotels (*1)

Total of the Nine HMJ
HotelsTotal of the HMJ Group
Hotels

GOP
Ratio of GOP
GOP
Ratio of GOP

FY 2016(Fiscal year ended
December 2016)
Comparison
withActualprevious
period12,010
10.1%
33.9%
2.1%
14,124
10.4%
32.9%
2.2%

FY 2017(Fiscal year ending December 2017)
Previous
forecast

Forecast
this time

12,23733.9%
14,50733.1%

12,43135.1%
14,69934.1%

Comparison
with theprevious
forecast
1.6%
1.2%
1.3%
1.0%

Comparison
with previous
period
3.5%
1.2%
4.1%
1.2%

(*1) Ratio of GOP refers to the ratio of GOP to sales. The same shall apply hereinafter.
(*2) Hotel Centraza Hakata and Holiday Inn Osaka Namba were acquired on April 1, 2016 and August 1, 2016, respectively. The figures for the fiscal
year ended December 2016 are for the entire year including prior to the acquisition.
(*3) The figures for the fiscal year ended December 2016 and fiscal year ending December 2017 of the acquired assets (Hilton Tokyo Narita Airport,
International Garden Hotel Narita, and Hotel Nikko Nara), which were acquired in the fiscal year ending December 2017, are for the entire year
including prior to the acquisition.

－

19 －

<2> Sales and GOP of the Six Accor Hotels(1) Hotel sales (by hotel)(Unit: millions of yen)
FY 2017(Fiscal year ending December 2017)

FY 2016(Fiscal year ended
December 2016)
Sales of the Six Accor Hotels
Actualibis Tokyo Shinjuku

ibis Styles Kyoto Station

ibis Styles Sapporo

Mercure Sapporo

Mercure Okinawa Naha

Mercure Yokosuka

Total of the Six Accor
Hotels

Forecast thistimeComparison ComparisonFirst half:with thewithactualprevious
previous
Second half:
forecast
periodforecast

Comparison
withprevious
periodPrevious
forecast(10.3)%

406

365(10.2)%(10.1)%First half of the year

406

Second half of the year

426

1.3%

430

438

2.0%

2.8%

Full year832(4.7)%

836803(3.9)%(3.5)%First half of the year

464

30.0%

492

482

(2.2)%

3.7%

Second half of the year

513

12.3%

540

527

(2.3)%

2.7%

Full year

977

20.1%

1,032

1,009

(2.3)%

3.2%

First half of the year

490

14.3%

505

548

8.4%

11.9%

Second half of the year

633

7.1%

650

671

3.3%

6.1%

Full year

1,122

10.1%

1,156

1,220

5.5%

8.6%

First half of the year

546

9.3%

585

596

1.9%

9.3%

Second half of the year

708

5.3%

745

750

0.6%

5.9%

Full year

1,254

7.0%

1,330

1,346

1.2%

7.3%

First half of the year

489

20.2%

519

532

2.6%

8.7%

Second half of the year

560

8.6%

578

582

0.6%

3.9%

Full year

1,049

13.7%

1,096

1,114

1.6%

6.1%

First half of the year

569

3.5%

586

551

(6.0)%(3.2)%

Second half of the year502(2.0)%

540524(2.9)%

4.5%

Full year

1,071

0.8%

1,127

1,075

(4.5)%

0.4%

First half of the year

2,965

10.0%

3,094

3,074

(0.7)%

3.7%

Second half of the year

3,341

5.5%

3,482

3,492

0.3%

4.5%

Full year

6,306

7.6%

6,577

6,566

(0.2)%

4.1%(2) Hotel GOP(Unit: millions of yen)

GOP and Ratio of GOPof the Six Accor Hotels

FY 2016(Fiscal year ended December
2016)
Comparison
withActualprevious
periodFY 2017(Fiscal year ending December 2017)
Previous
forecast

Forecast
this time

Comparison
with theprevious
forecast

Comparison
with previous
periodTotal of the Six Accor Hotels

2,885

14.9%

2,987

3,042

1.8%

5.4%

Ratio of GOP

45.8%

2.9%

45.4%

46.3%

0.9%

0.6%

－

20 －

<3> Sales and GOP of the Six the b Hotels(1) Hotel sales (by hotel)(Unit: millions of yen)
FY 2016(Fiscal year ended
December 2016)

Actualthe b ikebukuro

the b ochanomizu

the b hachioji

the b hakata

the b suidobashi

Total of the
Six the b Hotels(*)

Forecast thistimeComparison Comparison
Previous First half:with thewithforecast
actualprevious
previous
Second half:
forecast
periodforecast

Comparison
withprevious
periodSales of the Six the b Hotels

the b akasaka-mitsuke

FY 2017(Fiscal year ending December 2017)

First half of the year

242

9.4%

242

215

(11.2)%(11.2)%

Second half of the year

226(6.7)%

231

222(3.7)%(1.7)%

Full year

468

1.0%

473

437

(7.5)%(6.7)%First half of the year

323

7.3%

325

306

(5.9)%(5.3)%

Second half of the year312(3.7)%

324

317(2.1)%

1.4%

Full year

635

1.6%

648

622

(4.0)%(2.0)%First half of the year131(0.8)%

134130(3.4)%(0.9)%

Second half of the year

135

3.5%

138

133

(3.4)%(1.0)%

Full year

266

1.3%

273

263

(3.4)%(1.0)%First half of the year

291

9.0%

296

266

(10.1)%(8.5)%

Second half of the year273(6.1)%

291

274(6.0)%

0.2%

Full year

564

1.1%

587

540

(8.1)%(4.3)%First half of the year

230

20.6%

240

244

1.7%

5.9%

Second half of the year

249

15.5%

255

259

1.7%

4.2%

Full year

478

17.9%

494

503

1.7%

5.0%

First half of the year

177

－

183

173

(5.1)%(2.1)%

Second half of the year

174

－

194

179

(8.0)%

2.6%

Full year

351

－

377

352

(6.6)%

0.2%

First half of the year

1,394

－

1,420

1,333

(6.1)%(4.3)%

Second half of the year

1,369

－

1,432

1,384

(3.4)%

1.1%

Full year

2,763

－

2,852

2,717

(4.7)%(1.7)%The b suidobashi was rebranded from Dormy Inn Suidobashi on July 1, 2015. Therefore, no figures are indicated in the b suidobashi and Totalof the Six the b Hotels for comparison with the previous period for the fiscal year ended December 2016.

(2) Hotel GOP(Unit: millions of yen)

GOP and Ratio of GOPof the Six the b Hotels

FY 2016(Fiscal year ended
December 2016)
Comparison
withActualprevious
periodFY 2017(Fiscal year ending December 2017)
Previous
forecast

Forecast thistimeComparison
with theprevious
forecast

Comparison
with previous
periodTotal of the Six the b Hotels

1,370

－

1,381

1,286

(6.9)%(6.1)%

Ratio of GOP

49.6%

－

48.4%

47.3%

(1.1)%(2.2)%(*)

The b suidobashi was rebranded from Dormy Inn Suidobashi on July 1, 2015. Therefore, no figures are indicated in the Total of the Six the bHotels and Ratio of GOP for comparison with the previous period for the fiscal year ended December 2016.

－

21 －

<Reference Materials 3> Assumptions of the forecast of annualized effect(1) The operating revenue and operating expenses for existing properties (properties other than the acquired assets) remainunchanged from “Assumptions of the operating forecast for the full year of the fiscal year ending December 2017 (18thperiod)” above except for property taxes, city planning taxes, etc.
(2) The annual fixed rent and variable rent for Hilton Tokyo Narita Airport is calculated as follows.
Annual rent for the fiscal year ending December 2017 (18th period) (¥808 million) = Fixed rent (¥444 million) + Variable rent
Variable rent = [ (a) Hotel GOP – (b) GOP base amount ] × 86.5%(Unit: millions of yen)

Full year

Hotel GOP(a)

GOP base amount(b)

Variable rent((a)－(b))×86.5%

970

550

364

(3) The annual fixed rent and variable rent for International Garden Hotel Narita are calculated as follows.
Annual rent for the fiscal year ending December 2017 (18th period) (¥569 million) = Fixed rent (¥336 million) + Variable rent
Variable rent = [ (a) Hotel GOP – (b) GOP base amount ] × 98.0%(Unit: millions of yen)

Full year

Hotel GOP(a)

GOP base amount(b)

Variable rent((a)－(b))×98.0%

598

360

233

(4) The annual fixed rent and variable rent for Hotel Nikko Nara are calculated as follows.
Annual rent for the fiscal year ending December 2017 (18th period) (¥675 million) = Fixed rent (¥420 million) + Variable rent
Variable rent = [ (a) Hotel GOP – (b) GOP base amount ] × 91.5%(Unit: millions of yen)

Full year

Hotel GOP(a)

GOP base amount(b)

Variable rent((a)－(b))×91.5%

749

470

255

(5) Calculation of Hotel GOP for the acquired assets is assuming annualized saving effects of relevant costs based on agreements,
etc. which are or will be signed during the fiscal year ending December 2017.
(6) For the property taxes, city planning taxes, etc. for the relevant period, the property taxes, city planning taxes, etc. for the fiveproperties (CANDEO HOTELS UENO-KOEN, Hotel Centraza Hakata, Holiday Inn Osaka Namba, HOTEL ASCENTFUKUOKA and Hilton Nagoya) acquired in the fiscal year ended December 2016 (17th period) are assumed to be ¥224
million (for twelve months), and the property taxes, city planning taxes, etc. for the acquired assets are assumed to be ¥160
million (for twelve months).
(7) For non-operating expenses, borrowing costs related to asset acquisitions, expenses incurred in the issuance of new
investment units and others are assumed on an annualized basis (twelve months). However, the major financial costs
expensed all at once upon property acquisitions are not included in the annualized effect.

－

22 －

3. Semi-annual financial statements(1) Semi-annual balance sheets(thousands of yen)
As ofDecember 31, 2016
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Income taxes receivable
Other current assets
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
SoftwareLeasehold rights in trust
Fixed-term leasehold rights in trust
Other intangible assets
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

*1

－

23 －

As of
June 30, 201715,141,393
11,232,472
2,071,152
586,700
294
18,33929,050,353

10,340,286
9,860,530
1,521,962
508,092
69,25922,300,131

220,174(92,636)
127,538
1,983,010(873,534)
1,109,476
3,240
104,284,116(12,060,126)
92,223,989
2,100,930(238,341)
1,862,588
534,100(75,467)
458,632
137,266(77,824)
59,442
154,841,633
4,085
250,690,627

253,444(105,744)
147,700
2,096,961(1,000,998)
1,095,963
104,976,734(13,519,378)
91,457,355
2,102,085(272,301)
1,829,783
538,401(87,806)
450,594
137,266(82,566)
54,700154,841,633
14,000249,891,732*1

168,345
28,648,457
5,451,770
9,796
34,278,369

163,164
28,648,457
5,382,632
9,456
34,203,710

12,520158,323
3,090,505
146,585
64,1303,472,065
288,441,062

12,520158,323
2,903,306
131,601
68,4793,274,231
287,369,674

243,615
143,589
387,204
317,878,620

185,207
133,343
318,551
309,988,357

(thousands of yen)
As ofDecember 31, 2016
Liabilities
Current liabilities
Operating accounts payable
Short-term loans 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 current liabilities
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
Dividend reserve
Reserve for temporary difference adjustment
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－

666,3151,800,000
9,679,250
610,3441,210
496,373
899,290
15,101
117,949
24,37954,50314,364,717

567,763
100,000
18,458,000
550,975
605
331,939902,290
20,511
12,71333,15457,90021,035,855

22,600,000
92,099,750
1,041,032
4,619,744
676,488
46,233
441,542
121,524,790
135,889,508

22,600,000
84,466,750
1,041,016
4,632,725
594,320
41,561
442,559
113,818,932
134,854,787

134,829,448

134,829,448

21,746,398

21,746,398

13,867,228
13,867,228
12,126,057
47,739,684
182,569,132

*3

24 －

As of
June 30, 2017

(580,019)(580,019)
181,989,112
317,878,620*2*3

13,127,153
13,127,153
5,951,480
40,825,032
175,654,480(520,911)(520,911)
175,133,569
309,988,357

(2) Semi-annual statements of income(thousands of yen)
For the six months ended
June 30, 2016
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
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 income
Extraordinary loss
Provision for loss on disaster
Total extraordinary loss
Income before income taxes
Income taxes – current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

－

*1
*1

*1, *225 －For the six months ended
June 30, 2017

8,955,104
435,866
9,390,971*1

2,985,368
581,91254,508
7,200
79,1603,708,149
5,682,822*1, *2

10,716,102
555,982
11,272,084*1

3,683,291
694,51954,126
7,200
92,0344,531,172
6,740,912

1,836
2,296
52
219
4,405

113
3,624
339
10,571
14,648424,059
59,026271,160
9,217
23,021
30,7791,327
818,592
4,868,635

437,620
84,036
203,770
10,24558,4076,598
3,207
803,886
5,951,674

90,00090,0004,778,635
605
605
4,778,030
2,894
4,780,924

5,951,674
605
605
5,951,069
411
5,951,480

(3) Semi-annual statements of changes in net assets
For the six months ended June 30, 2016
(thousands of yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance, January 1, 2016

85,470,541

Voluntary reserve
Capitalsurplus21,746,398

Dividend
reserve

Total
voluntary
reserve

13,928,075

13,928,075

Unappropriatedretainedearnings(undisposed
loss)
9,296,121

Total
unitholders’equityTotal
surplus44,970,596

130,441,137

Changes of items during the period:
Issuance of new investment units

14,618,266

14,618,266

Reversal of dividend reserve

60,847--

Dividends paid

(9,354,075)(9,354,075)(9,354,075)

Net income

4,778,030

4,778,030

4,778,030

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2016

(60,847)

14,618,266-(60,847)(60,847)(4,515,197)(4,576,044)

10,042,221*1

21,746,398

13,867,228

13,867,228

4,780,924

40,394,551

140,483,359

100,088,808(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2016

(526,660)(526,660)

129,914,477

Changes of items during the period:
Issuance of new investment units

14,618,266

Reversal of dividend reserve-

Dividends paid

(9,354,075)

Net income

4,778,030

Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2016

(60,847)(725,882)(725,882)(725,882)(725,882)(725,882)

9,316,338(1,252,543)(1,252,543)

139,230,816

－

26 －

For the six months ended June 30, 2017
(thousands of yen)
Unitholders’ equity
Surplus
Voluntary reserve

Unitholders’capitalBalance, January 1, 2017

134,829,448

Capitalsurplus21,746,398

Total
unitholders’equityDividend
reserve

Reserve fortemporarydifference
adjustment

Total
voluntary
reserve

Unappropriatedretainedearnings(undisposed
loss)

13,867,228-

13,867,228

12,126,057

47,739,684

182,569,132(13,867,228)

13,867,228--

13,127,153(13,127,153)

-

-

Total
surplus

Changes of items during the period:
Issuance of new investment units
Reversal of dividend reserve(13,867,228)

Reserve for temporary difference
adjustment

13,127,153

Dividends paid

(12,865,721) (12,865,721) (12,865,721)

Net income
Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2017

*1

134,829,448- (13,867,228) 13,127,153
21,746,398-

13,127,153(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2017

(580,019)(580,019)

181,989,112

Changes of items during the period:
Issuance of new investment units-

Reversal of dividend reserve-

Reserve for temporary difference
adjustment-

Dividends paid

(12,865,721)

Net income
Net changes of items
other than unitholders’ equity
Total changes of items
during the period
Balance, June 30, 2017

5,951,069
59,10859,10859,10859,10859,108(6,855,543)(520,911)(520,911)

175,133,569

－

27 －

5,951,069

5,951,069

5,951,069(740,075)(6,174,577)(6,914,652)(6,914,652)

13,127,153

5,951,480

40,825,032

175,654,480

(4) Semi-annual statements of cash flows(thousands of yen)
For the six months ended
June 30, 2016
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Loss on retirement of noncurrent assets
Loss (gain) on derivative instruments
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Increase (decrease) in provision for loss on disaster
Interest income
Interest expense
Interest on tax refunds(Increase) decrease in operating accounts receivable(Increase) decrease in prepaid expenses(Increase) decrease in consumption taxes receivable(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 – net
SubtotalInterest received
Interest paid
Interest received on tax refunds
Income taxes – refunded (paid)
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property and equipment in trust
Purchase of property and equipment
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
Proceeds from tenant leasehold and security deposits
Reimbursements of tenant leasehold and security deposits
Net cash 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 investment corporation bonds
Proceeds from issuance of investment units
Payments for investment corporation bond issuance costs
Dividends paid
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

－

28 －

For the six months ended
June 30, 2017

4,778,635
1,603,918
5,053
30,7799,217
23,02190,000(1,836)
483,085(219)
72,635(51,735)
245,509(1,964,229)(40,710)(8,575)
113,02070,707(25,632)
22,934
5,455,581
1,836(495,890)
219
1,847
4,963,595

5,951,674
1,756,345
18,551(3,973)
10,24558,407(113)
521,656
549,190
78,607
187,198(115,764)(56,625)(164,433)
2,999(105,235)(46,453)
8,642,280
144(524,399)(915)
8,117,109(9,864,929)(384,032)(5,474,180)(6,955)299,878(38,587)
7,000(1,000,000)(16,461,806)(679,578)(183,391)(21,994)(4,348)23,412(9,680)(16)(875,597)

8,700,000(9,000,000)
17,400,000(11,314,103)
3,000,000
14,589,356(21,524)(9,348,241)
14,005,487
2,507,276
13,698,296*1 16,205,573(1,700,000)
1,700,000(554,250)(12,860,311)(13,414,561)(6,173,049)
26,373,866*1 20,200,816

(5) Notes on going concern assumption
Not applicable.

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

Method ofdepreciation andamortization of
noncurrent assets(1) Property and equipment (including trust accounts)
Depreciation of property and equipment is calculated using the straight-line method. The useful
lives of major property and equipment components are as follows:
Machinery and equipment
Tools, furniture and fixtures

2 to 17 years
2 to 20 years

Buildings in trust
Structures in trust

2 to 62 years
2 to 62 years

Machinery and equipment in trust
Tools, furniture and fixtures in trust

4 to 32 years
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

Fixed-term leasehold rights in trust is amortized using the straight-line method based on remaining
period (41 years and 49 years) of the contract.
(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method.
2.

Accounting fordeferred assets(1) Investment unit issuance costs
Investment unit issuance costs are amortized using the straight-line method over three years.
The issuance of new investment units was consummated under underwriting agreements in which
underwriting securities companies committed to purchase all of the investment units being offered
at an issue value and selling them at an offering price different from such issue value to generalinvestors (the “spread method”).
No underwriting fees were paid by JHR under the spread method since the underwriters werecompensated by the underwriting spread, which amounted to ¥466,990 thousand for the six months
ended June 30, 2016, representing the difference between the issue price and the issue value. Not
applicable for the midterm period under review.
(2) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the interest method over therespective term of the bond.

3.

Standards forrecognition ofTreatment of property taxes and other taxes
For taxes imposed on properties, etc. under management such as property taxes, city planning taxes, andrevenues andexpensesdepreciable asset taxes, the imposed amounts are allocated to the respective period and expensed 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 costof the relevant property.
The amount of such taxes capitalized in the acquisition cost of real properties, etc. was ¥37,685 thousand
for the six months ended June 30, 2016. Not applicable for the midterm period under review.

－

29 －

4.

Method of(1) Method of hedge accounting

hedge accounting

Deferred hedge accounting is applied(2) Hedging instruments and hedged items
Hedging instruments
Interest rate swaps
Interest rate caps
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.

5.

Scope of funds(cash and cash

Cash and cash equivalents in the semi-annual statements of cash flows consist of cash on hand, cash intrust accounts, bank deposit and trust deposit, which can be withdrawn at any time, and short-term

equivalents) in
the semi-annual

investments with a maturity of three months or less when purchased, which can easily be converted to
cash and subject to minimal risk of change in value.

statements ofcash flows
6.

Other
significant matters(1) 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 wellserving as the basis
for preparing

as all income generated and expenses incurred from assets in trust are presented in theaccompanying semi-annual balance sheet and income statement accounts accordingly.

semi-annual
financial statements

The following material items of the trust accounts recorded in the relevant accounts are presented
separately on the semi-annual 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
in trust(d) Tenant leasehold and security deposits in trust(2) Accounting treatment of consumption taxes
Consumption taxes are excluded from the transaction amounts.

(7) Note on change in the indication method“Asset custody fee” and “Administrative service fee” indicated under the “Operating expenses” will be combined to “Asset custody
and administrative service fee” from this midterm period under review due to the integration of the fee calculation. In order to reflect
the change in the indication method, the financial statements for the calculation period 2016 is also rearranged.
As a result, ¥9,929 thousand of “Asset custody fee” and ¥44,579 thousand of “Administrative service fee” in “Operating expenses”
are rearranged to ¥54,508 thousand of “Asset custody and administrative service fee.”

－

30 －

(8) Notes to semi-annual financial statements
Disclosure of notes on “securities” and “share of (profit) loss of entities accounted for using equity method” is omitted because
there is thought to be no longer necessary for disclosure in the midterm financial report.

[Notes to semi-annual balance sheets]*1. Accumulated advanced depreciation of property and equipment deducted from acquisition costs due to government
subsidies received, etc.
As ofDecember 31, 2016
Buildings in trust

As ofJune 30, 2017¥24,921 thousand¥24,921 thousand*2. Matters concerning provision and reversal of reserve for temporary difference adjustment
As of December 31, 2016
Not applicable.
As of June 30, 2017
(thousands of yen)Amount ofBalance at

Amount ofAmount ofBalance atinitialaccrualbeginning of
periodprovision
during period

reversalduring period

end ofperiodGrounds forprovision and reversal
Application of the transitional
measures of Paragraph 3 of the
Supplementary Provisions of

Dividend
reserve(Note)

13,127,153-

13,127,153-

13,127,153

the “Ordinance on Accountingsof Investment Corporations”(Cabinet Office Ordinance No.
27 of 2015)(Note) The remaining balance of the amount subdivided into gain on negative goodwill which was recorded as a dividend reserve prior to fiscal year 2016 isreserved for temporary difference adjustment during the period, 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 more than 50
years.

*3. Minimum net assets as required by Article 67, paragraph 4 of the Investment Trusts Act
As ofDecember 31, 2016
¥50,000 thousand

－

31 －

As of
June 30, 2017
¥50,000 thousand

[Notes to semi-annual statements of income]*1. Components of real estate operating revenue and real estate operating costs(thousands of yen)A.

For the six months ended
June 30, 2016

For the six months ended
June 30, 2017

Real estate operating revenue
Fixed rent

5,616,251

6,258,229

Variable rent
Income from management contracts

2,213,574
1,125,278

3,271,841
1,186,031

Other real estate operating revenue
Parking lots

71,39983,394

Other incidental revenue
Utilities

14,461
218,328

31,282
373,573

Other

131,677

Real estate operating revenue

Total real estate operating revenueB.

435,866

67,7329,390,971

10,716,102

555,982
11,272,084

Real estate operating costs
Real estate operating costs
Land lease and other rent expenses

287,175

461,618

Property taxes
Outsourcing expenses (Note)

561,728
236,669

710,238
285,511

Nonlife insurance
Depreciation and amortization

18,903
1,603,918

22,998
1,756,345

Loss on retirement of noncurrent assets
Repairs

5,053
18,782

18,551
18,462

Utilities
Trust fees

221,810
21,177

381,884
21,716Other

10,149Total real estate operating costsC.

8,955,104

2,985,368

5,964

3,683,291

2,985,368

3,683,291

6,405,603

7,588,793

Net real estate operating income(A − B)(Note) Outsourcing expenses include management contract fees of ¥107,464 thousand for the six months ended June 30, 2016 and ¥108,479 thousand for the six
months ended June 30, 2017.

*2. Depreciation was expensed as follows:
For the six months ended
June 30, 2016
Property and equipment

For the six months ended
June 30, 2017

¥1,552,218 thousand¥1,662,754 thousand¥51,700 thousand¥93,591 thousand

Intangible assets[Notes to semi-annual statements of changes in net assets]
For the six months ended
June 30, 2016

For the six months ended
June 30, 2017

*1 Total number of investment units
authorized, and issued and outstanding
Total number of investment units authorized

20,000,000 units

20,000,000 units

Total number of investment units issued and outstanding

3,321,907 units

3,761,907 units

－

32 －

[Notes to semi-annual statements of cash flows]*1. Relation of balance of cash and cash equivalents at end of period and the amount in semi-annual balance sheet accounts
For the six months ended
June 30, 2016

For the six months ended
June 30, 2017

Cash and deposits¥8,617,983 thousand¥10,340,286 thousand

Cash and deposits in trust¥7,587,589 thousand¥9,860,530 thousand

Cash and cash equivalents¥16,205,573 thousand¥20,200,816 thousand*2. Content of significant non-cash transactions
For the six months ended June 30, 2016
JHR recognizes asset retirement obligations as it is obliged to restore the land of Hotel Centraza Hakata, acquired on April
1, 2016, to the original state in accordance with the fixed-term leasehold agreement. This increases buildings in trust of
property and equipment and asset retirement obligations by ¥327,561 thousand.
For the six months ended June 30, 2017
Not applicable.

[Notes on lease transactions]Operating leases (as lessor)
Minimum rental revenue under non-cancellable operating leases
As ofDecember 31, 2016

As ofJune 30, 2017

Due within one year

¥1,709,333 thousand¥1,705,646 thousand

Due after one year

¥5,889,179 thousand¥5,385,102 thousand

Total¥7,598,512 thousand¥7,090,748 thousand[Notes on financial instruments]
Matters concerning fair value of financial instruments
Carrying amounts of financial instruments on the (semi-annual) balance sheets, their fair values, and the differences were as
follows. Financial instruments whose fair values are considered extremely difficult to measure are not included in the table.
See Note 2 below.
As of December 31, 2016
Carrying amount(JPY1000)Fair value(JPY1000)

Difference(JPY1000)(1) Cash and deposits

15,141,393

15,141,393-(2) Cash and deposits in trust

11,232,472

11,232,472-

Total assets

26,373,866

26,373,866-(3) Short-term loans payable

1,800,000

1,800,000-(4) Current portion of long-term loans payable

9,679,250

9,679,250-(5) Investment corporation bonds

22,600,000

22,629,640

29,640(6) Long-term loans payable

92,099,750

92,099,750-

Total liabilities

126,179,000

126,208,640

29,640(554,282)(554,282)-(7) Derivative transactions (*)

－

33 －

As of June 30, 2017
Carrying amount(JPY1000)Fair value(JPY1000)

Difference(JPY1000)(1) Cash and deposits

10,340,286

10,340,286-(2) Cash and deposits in trust

9,860,530

9,860,530-

Total assets

20,200,816

20,200,816-

100,000

100,000-(4) Current portion of long-term loans payable

18,458,000

18,458,000-(5) Investment corporation bonds

22,600,000

22,586,820(13,180)(6) Long-term loans payable

84,466,750

84,466,750-

Total liabilities

125,624,750

125,611,570(13,180)(3) Short-term loans payable(7) Derivative transactions (*)(495,873)(495,873)(*) Receivables and payables arising from derivative transactions are presented on a net basis and amounts in parenthesis denote net
payables.
(Note 1) Methods to measure fair value of financial instruments(1) Cash and deposits; (2) Cash and deposits in trust; (3) Short-term loans payable
The carrying value is deemed to approximate the fair value since the instruments are scheduled to be settled in a short periodof time.
(4) Current portion of long-term loans payable; (6) Long-term loans payable
The carrying value is deemed to approximate the fair value since the interest rate on long-term loans payable are floatinginterest rates which are revised periodically to reflect market interest rates.
(5) Investment corporation bonds
The fair value of these instruments is measured based on the market price.
(7) Derivative transactions
The information on the fair value of derivative transactions is presented in “Notes on derivative transactions” below.
(Note 2) Carrying amount of financial instruments whose fair values are considered extremely difficult to measure(thousands of yen)
As ofDecember 31, 2016

Classification

As ofJune 30, 2017

Tenant leasehold and security deposits

1,041,032

1,041,016

Tenant leasehold and security deposits in trust

4,619,744

4,632,725

Total

5,660,776
5,673,741
Tenant leasehold and security deposits / Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits (in trust) are not subject to fair value disclosure because they have no market priceand their actual deposit periods from a tenant’s move-in to move-out are not estimable, thus making a reasonable estimate of
future cash flows is difficult.

－

34 －

[Notes on derivative transactions]
1. Derivative transactions to which hedge accounting is not applied
As of December 31, 2016
For derivative transactions which hedge accounting is not applied, the contract amount or the amount equivalent to theprincipal provided in the contract, etc. as of the account closing date was as follows:(thousands of yen)Classification

Transactions
other thanmarkettransactions

Type, etc. of
derivative transaction

Contract amount, etc.
Of which, due
after one year

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

6,794,000

6,794,000

Interest rate caps

848,250-

Fair value

Method to measure the fair value(38,033) The fair value is measured at thequoted price, etc. obtained from thecounterparty financial institutions.
-

As of June 30, 2017
For derivative transactions which hedge accounting is not applied, the contract amount or the amount equivalent to theprincipal provided in the contract, etc. as of the account closing date was as follows:(thousands of yen)Classification

Transactions
other thanmarkettransactions

Type, etc. of
derivative transaction

Contract amount, etc.
Of which, due
after one year

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

6,794,000

1,794,000

Interest rate caps--

Fair value

Method to measure the fair value(27,461) The fair value is measured at thequoted price, etc. obtained from thecounterparty financial institutions.
-

2. Derivative transactions to which hedge accounting is applied
As of December 31, 2016
For derivative transactions which hedge accounting is applied, the contract amount or the amount equivalent to the principal
provided in the contract, etc. as of the account closing date for each method of hedge accounting was as follows:(thousands of yen)
Method ofhedge
accounting

DeferralmethodContract amount, etc.

Type, etc. of
derivative transactionMainhedged item

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

Long-termloans payable

92,428,750

82,808,750

Interest rate caps

Long-termloans payable

4,286,250

4,286,250

Of which, due
after one year

Fair value

Method to measure
the fair value

The fair value is(516,439) measured at thequoted price, etc.
obtained from the
190 counterparty
financial institutions.

As of June 30, 2017
For derivative transactions which hedge accounting is applied, the contract amount or the amount equivalent to the principal
provided in the contract, etc. as of the account closing date for each method of hedge accounting was as follows:(thousands of yen)
Method ofhedge
accounting

DeferralmethodContract amount, etc.

Type, etc. of
derivative transactionMainhedged item

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

Long-termloans payable

92,428,750

79,487,750

Interest rate caps

Long-termloans payable

4,286,250-

Of which, due
after one year

－

35 －

Fair value

Method to measure
the fair value

The fair value is(468,421) measured at thequoted price, etc.
obtained from the
9 counterparty
financial institutions.

[Notes on asset retirement obligations]
Asset retirement obligations recognized on the (semi-annual) balance sheets
1. Outline of the subject asset retirement obligations
JHR recognizes asset retirement obligations as it is obliged to restore the land of Hotel Centraza Hakata, acquired on April 1,
2016, and HOTEL ASCENT FUKUOKA, acquired on August 19, 2016, to the original state in accordance with the fixedterm leasehold agreement.
2. Calculation method of the subject asset retirement obligations
Calculated the amount of asset retirement obligations estimating that the expected useful life is 34 years and 48 years,
respectively, due to their remaining use period and using the discount rate of 0.484% and 0.394%, respectively.
3. Increase and decrease of the subject asset retirement obligations(thousands of yen)
For the year ended
December 31, 2016
Balance at beginning of period

For the six months ended
June 30, 2017-

Increase due to acquisition of property and equipment

441,542

440,168

Adjustment due to passage of time
Balance at end of period

1,373

1,017

441,542442,559[Notes on rental properties, etc.]
JHR owns rental properties for hotels to earn lease income and income from management contracts. The carrying amounts,changes in such balances, and fair values of such properties were as follows:(thousands of yen)
For the year ended
December 31, 2016

Use

For the six months ended
June 30, 2017

Carrying amount

Hotel

Balance at beginning of period

222,362,750

284,965,547

Net increase (decrease) during period

62,602,797(879,570)

Balance at end of period

284,965,547

284,085,977

398,770,000

399,600,000

Fair value at end of period(Note 1)
(Note 2)

(Note 3)For a summary of the applicable rental properties, please refer to “5. Reference information; (2) Assets under management; (C) Other major assets
under management; A. Summary of real estate properties under management” on page 50.
Increase during the previous year ended December 31, 2016 principally represents the acquisition of CANDEO HOTELS UENO-KOEN for ¥6,784
million, Hotel Centraza Hakata for ¥7,614 million, Holiday Inn Osaka Namba (HOTEL VISTA GRANDE OSAKA) for ¥27,245 million, HOTELASCENT FUKUOKA for ¥5,222 million and Hilton Nagoya for ¥15,488 million. Decrease during the six months ended June 30, 2017 principally
represents depreciation and amortization.
Fair value at end of period is the appraisal value determined by licensed real estate appraisers from outside.

－

36 －

[Notes on segment and related information]
1. Segment information
The segment information has been omitted because JHR has only one segment, which is the investment and management ofhotel real estate.
2. Related information
For the six months ended June 30, 2016(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in asingle product/service category accounted for more than 90% of total operating revenue on the semi-annual 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 semi-annual statements of income.
(ii) Property and equipment
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 semi-annual balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

2,638,508

Investment and management of hotel real estate

AAPC Japan K.K.

1,348,837

Investment and management of hotel real estate

For the six months ended June 30, 2017(1) Information about products and services
Information about products and services has been omitted because operating revenue from external customers in asingle product/service category accounted for more than 90% of total operating revenue on the semi-annual 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 semi-annual statements of income.
(ii) Property and equipment
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 semi-annual balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

2,790,777

Investment and management of hotel real estate

AAPC Japan K.K.

1,427,403

Investment and management of hotel real estate

－

37 －

[Notes on per unit information]
Net assets per unit is as follows:
As of
December 31, 2016
Net assets per unit

As ofJune 30, 2017

¥48,376¥46,554

For the six months ended
June 30, 2016

For the six months ended
June 30, 2017

¥1,446¥1,581

4,778,030

5,951,069--

Net income for midterm attributable to common investment units(JPY1000)

4,778,030

5,951,069

Average number of investment units during period (units)

3,302,176

3,761,907

Net income per unit and the basis of computation of net income per unit are as follows:

Net income per unit
[Basis of computation]
Net income for midterm (JPY1000)
Amount not attributable to common unitholders (JPY1000)(Note) Net income per unit for midterm is computed by dividing net income for midterm by the average number of investment units during the midterm period.
Net income per unit for midterm after the adjustment of potentially dilutive units is not presented since there are no potentially dilutive units.

[Notes on significant subsequent events]
1. Acquisition of assets
On July 12, 2017 and August 1, 2017, JHR acquired assets totaling three properties with a combined acquisition price of¥32,673 million as follows:
Property name

Hilton Tokyo Narita Airport

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

456 Kosuge, Narita-shi, Chiba

Acquisition dateJuly 12, 2017

Seller

NRT Project Godo Kaisha

Acquisition price (Note)¥13,175 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

Property nameInternational Garden Hotel Narita

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

241-1 Yoshikura, Narita-shi, Chiba

Acquisition dateJuly 12, 2017

Seller

IG Real Estate Hanbai Godo Kaisha

Acquisition price (Note)¥9,125 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

Property name

Hotel Nikko Nara

Asset category

Real estate beneficial interest in trust and movable assets attached to the hotel

Asset type

Hotel

Address

8-1 Sanjo-honmachi, Nara-shi, Nara

Acquisition dateAugust 1, 2017－38 －

Seller

JH Nara Bridge Fund Goudou Kaisha

Acquisition price (Note)¥10,373 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

2. Borrowing of funds
JHR procured new borrowings as follows in order to partly fund the acquisition of the real estate beneficial interests in trust
and movable assets attached to the hotels as described above in “1. Acquisition of assets.”(1) Term Loan 33
Lenders

Sumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd. /Sumitomo Mitsui Trust Bank, Limited

Amount of the loan

¥4,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.275%

Date of borrowing

July 12, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity dateJune 29, 2018

Collateral

Unsecured/Unguaranteed

－

39 －

(2) Term Loan 34
Lenders

Sumitomo Mitsui Banking Corporation / The Chiba Bank, Ltd.

Amount of the loan

¥2,250 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.40%

Date of borrowing

July 12, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity dateJune 30, 2023

Collateral

Unsecured/Unguaranteed(3) Term Loan 35
Lenders

Sumitomo Mitsui Banking Corporation / Shinsei Bank, Limited / Mizuho Bank, Ltd. /Resona Bank, Limited

Amount of the loan

¥4,250 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.60%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2026

Collateral

Unsecured/Unguaranteed(4) Term Loan 36
LenderSumitomo Mitsui Trust Bank, Limited

Amount of the loan

¥1,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(5) Term Loan 37
LenderMitsubishi UFJ Trust and Banking Corporation

Amount of the loan

¥700 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.45%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(6) Term Loan 38
LenderDevelopment Bank of Japan Inc.

Amount of the loan

¥500 million

Interest rate

0.75392% (fixed interest rate)

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed－

40 －(7) Term Loan 39
LenderThe Bank of Fukuoka, Ltd.

Amount of the loan

¥500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(8) Term Loan 40
LenderAozora Bank, Ltd.

Amount of the loan

¥500 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(9) Term Loan 41
LenderTHE NISHI-NIPPON CITY BANK, LTD.

Amount of the loan

¥1,000 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.50%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed(10) Term Loan 42
Lender

Shinsei Bank, Limited

Amount of the loan

¥300 million

Interest rate

Base interest rate (JBA Japanese Yen TIBOR for three months) + 0.45%

Date of borrowing

August 1, 2017

Method of principal repayment

Lump-sum payment on the maturity date

Maturity date

September 30, 2025

Collateral

Unsecured/Unguaranteed

－

41 －

3. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on June 19, 2017 and June 28, 2017.
Payment for the new investment units was completed on July 5, 2017 and August 2, 2017, and the investment units were
issued under the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥153,516,129,309,
with the number of investment units issued and outstanding totaling 4,010,847 units.
(a) Issuance of new investment units (domestic public offering and overseas offering)Number of investment units issued:
Of which, domestic public offering:

236,000 units
99,743 units

Of which, overseas offering:
Issue price:

136,257 units¥77,518 per unit

Total issue price:
Paid-in amount (issue value):¥18,294,248,000¥75,065 per unit

Total paid-in amount (total issue value):
Payment date:¥17,715,340,000
July 5, 2017(b) Issuance of new investment units (third-party allotment)
Number of investment units issued:
12,940 units
Paid-in amount (issue value):
Total paid-in amount (total issue value):¥75,065 per unit
¥971,341,100

Payment date:
Allottee:August 2, 2017
SMBC Nikko Securities Inc.

(c) Use of funds
JHR allocated the proceeds from the issuance of new investment units through the domestic public offering andoverseas offering of ¥17,715,340,000 to part of the funds for acquisition (including expenses for acquisition) of Hilton
Tokyo Narita Airport, International Garden Hotel Narita and Hotel Nikko Nara as described above in “1. Acquisitionof assets.” In addition, the proceeds from the issuance of new investment units through third-party allotment of¥971,341,100 will be reserved as cash on hand in order to allocate to part of funds for future acquisitions of specified
assets, part of funds for repayment of loans, or repair expenses and capital expenditures to maintain or improve
competitiveness of existing properties.

－

42 －

(9) 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 andunitholders’ capital through to the end of the midterm period under review.
Total number ofinvestment units
Unitholders’ capitalissued and outstanding(JPY1M)
Date
Capital transaction
Note(Units)Increase
Increase
Balance
Balance(Decrease)(Decrease)
November 10, 2005 Incorporation through private placement
400
400
200
200 (Note 1)
Capital increase throughJune 13, 2006
41,80042,20019,361
19,561 (Note 2)
public offering of investment units
Capital increase throughApril 6, 201115,831
58,031
3,599
23,161 (Note 3)
third-party allotment of investment units
April 1, 2012
Investment unit split
638,341
696,372
23,161 (Note 4)
April 1, 2012
Merger1,162,909
1,859,281
23,161 (Note 5)
Capital increase throughSeptember 12, 2012
240,000
2,099,281
4,855
28,017 (Note 6)
public offering of investment units
Capital increase throughOctober 11, 2012
12,0002,111,281
242
28,260 (Note 7)
third-party allotment of investment units
Capital increase throughApril 17, 2013
510,000
2,621,281
20,585
48,845 (Note 8)
public offering of investment units
Capital increase throughSeptember 9, 2014
170,000
2,791,281
10,17959,024 (Note 9)
public offering of investment units
Capital increase throughJanuary 27, 2015
200,000
2,991,281
14,97473,999 (Note 10)
public offering of investment units
Capital increase throughFebruary 18, 2015
9,041
3,000,322
676
74,676 (Note 11)
third-party allotment of investment units
Capital increase throughJune 22, 2015
140,000
3,140,322
10,50085,177 (Note 12)
public offering of investment units
Capital increase throughJuly 23, 2015
3,905
3,144,227
292
85,470 (Note 13)
third-party allotment of investment units
Capital increase throughJanuary 20, 2016
170,000
3,314,227
13,98699,456 (Note 14)
public offering of investment units
Capital increase throughFebruary 17, 2016
7,680
3,321,907
631
100,088 (Note 15)
third-party allotment of investment units
Capital increase throughJuly 27, 2016
428,260
3,750,167
33,813
133,902 (Note 16)
public offering of investment units
Capital increase throughAugust 23, 2016
11,7403,761,907
926
134,829 (Note 17)
third-party allotment of investment units(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)(Note 11)

(Note 12)(Note 13)

(Note 14)
(Note 15)
(Note 16)
(Note 17)

At the time of incorporation, investment units were issued with an issue price per unit of ¥500,000.
New investment units were issued through public offering with an issue price per unit of ¥480,000 (issue value of ¥463,200) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥227,400 in order to procure funds for the acquisitionof new properties.
Conducted a 12-for-1 split of investment units.
JHR (the former NHF) merged with Japan Hotel & Resort, Inc. (the former JHR). The Merger was an absorption-type merger pursuant to Article 147of the Investment Trusts Act where JHR is the surviving corporation and the former JHR is the absorbed corporation. Following this Merger, 11
investment units of JHR after the split of investment units were delivered by allotment for each investment unit of the former JHR.
New investment units were issued through public offering with an issue price per unit of ¥20,990 (issue value of ¥20,232) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥20,232 in order to repay loans payable, etc.
New investment units were issued through public offering with an issue price per unit of ¥41,778 (issue value of ¥40,363) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through public offering with an issue price per unit of ¥61,912 (issue value of ¥59,880) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through public offering with an issue price per unit of ¥77,415 (issue value of ¥74,874) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥74,874 in order to procure funds for allocation to partof future acquisitions of specified assets, part of other repayment of loans, or capital expenditures to maintain or improve competitiveness of existing
properties.
New investment units were issued through public offering with an issue price per unit of ¥77,512 (issue value of ¥75,007) in order to procure funds
for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥75,007 in order to procure funds for allocation to partof future acquisitions of specified assets, part of other repayment of loans, or capital expenditures to maintain or improve competitiveness of existing
properties.
New investment units were issued through public offering with an issue price per unit of ¥85,020 (issue value of ¥82,273) in order to procure funds
for the allocation to acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue value per unit of ¥82,273 in order to procure funds for allocation toacquisition of new properties, etc.
New investment units were issued through public offering with an issue price per unit of ¥81,536 (issue value of ¥78,956) in order to procure funds
for the allocation to acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue price per unit of ¥78,956 in order to procure funds for allocation to partof future acquisitions of specified assets, part of repayment of loans, or capital expenditures to maintain or improve competitiveness of existing
properties.

－

43 －

4. Changes in directors(1) Directors of JHR
The following are the directors of JHR as of the date of this report.
Title

Executive
Director

Supervisory
Director

Name

KanameMasudaHiroshiMatsuzawa

Major career highlights
Apr. 1990

Registered as a lawyer (Daiichi Tokyo Bar Association)

Oct. 1998

Joined Nishimura & Asahi (formerly, Nishimura & Partners)
Joined Merrill Lynch Japan Securities Co., Ltd.

Nov. 2000
Mar. 2001

General Counsel
Executive Director (Concurrent position)

Aug. 2002
May 2003

Enrolled in Columbia Law School, Columbia University, U.S.
Graduated from Columbia Law School, Columbia University, U.S.

Sep. 2006(LL.M.)
Registered as a lawyer, State of New YorkFeb. 2008

Established Masuda & Partners Law Office asManaging Partner (current)

Jun. 2008

Joined Jibun Bank Corporation as Outside Corporate Auditor(current)

Sep. 2010
Feb. 2012

Joined Japan Hotel and Resort, Inc. as Executive Director
Joined Commons Asset Management, Inc. as Outside Corporate

Oct. 2014

Auditor (current)
Joined CROSSWARP Inc. as Outside Corporate Auditor (current)

Nov. 2015

Joined Japan Hotel REIT Investment Corporation as Executive
Director (current)

Mar. 2016

Joined GMO Internet, Inc. as Director (Independent Director) /Audit and Supervisory Committee Member (current)

Apr. 1966

Joined Sumitomo Mitsui Trust Bank, Limited (formerly, The Mitsui
Trust and Banking Co., Ltd.)May 1988
Dec. 1989

Branch Manager, Yokosuka Branch
Branch Manager, Umeda Branch

May 1991
Jan. 1993

General Manager, Investment Advisory Department
General Manager, Pension Fund Management Department

Jun. 1995
Jul. 1999

Joined JDC Corporation and served as Managing Director
Joined Sumitomo Mitsui Trust Asset Management Co., Ltd.
(formerly, Chuo Mitsui Asset Management Co., Ltd.) as Managing
Director

Sep. 2001
May 2004

Representative Director and President
Joined Premier Investment Corporation as Executive Officer

Apr. 2012

Joined Japan Hotel REIT Investment Corporation as Supervisory
Director (current)

－

44 －

Number ofinvestment
units held

00

TitleName

Supervisory
Director

TetsuyaMishiku

Supervisory

HirotoDirector

Kashii

Major career highlights
Apr. 1993

Registered as a lawyer (Daiichi Tokyo Bar Association)

Dec. 2000

Joined Iinuma Law OfficePartner

Sep. 2002
Nov. 2003

Part-time lecturer at Chuo University
Changed registration to Shizuoka Bar Association

Nov. 2005

Joined Aoba Law Office as Partner
Joined Japan Hotel REIT Investment Corporation (formerly, Nippon

Number ofinvestment
units held

Hotel Fund Investment Corporation) as Supervisory Director(current)
Dec. 2005
Mar. 2007

Joined A-too Co., Ltd. as Part-time Corporate Auditor
Joined Healing Entertainment Co., Ltd. as Part-time Corporate

Aug. 2010

Auditor (current)
Joined Mishiku & Nagamachi Law Office (formerly, Aoi Tower Law

Sep. 2010

Office) as Representative (current)
Joined Koike Roof and Siding KK as Outside Corporate Auditor

Aug. 2011(current)
Outside Director of A-too Co., Ltd. (current)

Nov. 2016

Outside Corporate Auditor of Kabushiki kaisha Tem Realtor(current)

Apr. 1971

Joined Development Bank of Japan Inc. (formerly, Japan

Apr. 1997

Development Bank) responsible for lending and investment
General Manager, Retail Department at Head Office

Apr. 1998

Joined K.K. Hotel Odakyu as Managing Director and General
Manager of Accounting Department

Apr. 2002

Joined K.K. Hotel Odakyu (formerly, K.K. Odakyu Hotels andResorts which merged with K.K. Hotel Odakyu later) as Managing

Jun. 2003

Director responsible for marketing
Joined New Kansai International Airport Co., Ltd. (formerly, KansaiInternational Airport Co., Ltd.) as Executive Officer responsible forterminal sales promotion, subsidiaries management and hotel

Jun. 2009businesses
Joined Kyowa Co., Ltd. as Representative Director

Jun. 2012
Mar. 2013

Joined Japan Carbon Finance, Ltd. as Managing Director
Representative Director

Jun. 2013
Nov. 2015

Joined DBJ Asset Management Co., Ltd. as Corporate Auditor
Joined Japan Hotel REIT Investment Corporation as Supervisory

00

Director (current)(Note)

In case the number of Executive Director does not meet the requirement stipulated by laws and regulations, Hisashi Furukawa, Representative
Director of the Asset Management Company, was elected as Substitute Executive Director, based on the resolution made by the 7th General Meetingof Unitholders of JHR held on November 26, 2015.

－

45 －

(2) Directors of the Asset Management Company
The following are the directors of the Asset Management Company as of the date of this report.
Title

Name

Major career highlights
Apr. 1982
Jan. 1984
Jul. 1990

Representative
Director andPresident

Hisashi
Furukawa

Apr. 2000

May 2004
Aug. 2013
Jun. 2014
Apr. 1986
Dec. 1998
Mar. 2001

Director

Shuya
MatsubaraJun. 2009
Apr. 2012
May 2013
Apr. 2014
Mar. 2015
Apr. 1999
Jul. 2002
Aug. 2003

Director

ToshitakaIshidoSep. 2006
Apr. 2007
Apr. 2012

Mar. 2013

Joined Sumitomo Realty & Development Co., Ltd.
Building Business Department
Seconded to its subsidiary in the U.S.
Joined Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.
(formerly, Morgan Stanley Japan Limited) and served as Executive
Director of the Real Estate Group in the Investment Banking
Division
Joined UBS Securities Co., Ltd. (formerly, Warburg Dillon Read
(Japan) Limited) and served as Co-head and Executive Director of
the Real Estate Sector Team in the Corporate Finance Division
Joined Rockpoint Group, L.L.C. as Representative of Japan Officeand Principal
Established River Flows, Inc. as Representative Director
Joined Japan Hotel REIT Advisors Co., Ltd. as Representative
Director and President (current)
Joined The Hyakujushi Bank, Ltd. and served as Deputy Manager of
the International Affairs Department
Joined Deloitte Tohmatsu Consulting LLC as Manager of the
Financial Division
Joined Goldman Sachs Realty Japan, Ltd. and served as Director andJoint Group Leader of the Strategic Management Group in the
Acquisition Division
Joined Japan Hotel & Resort K.K. as Director
Joined Japan Hotel REIT Advisors Co., Ltd. as Director (current)
and Senior General Manager of the Finance & Planning Department
Senior General Manager of the Finance & Accounting Division
Senior General Manager of the Finance & Accounting Division andGeneral Manager of the Finance Department
Senior General Manager of the Finance & Planning Division andGeneral Manager of the Finance & Planning Department (current)
Joined Value Management Institute, Inc.
Joined Hospitality Advisory Group of KPMG Business Advisory
LLC (Tokyo Branch)
Manager of the Hospitality Group of KPMG FAS Co., Ltd. (Tokyo
Branch of KPMG Business Advisory LLC was merged with KPMGFAS Co., Ltd.)
Joined Japan Hotel & Resort K.K. and served as Senior Manager
Director and Senior General Manager of Asset Management
Department
Joined Japan Hotel REIT Advisors Co., Ltd. as Senior General
Manager of Investment Division (current) and General Manager ofAcquisitions Department
Director (current)

－

46 －

Number ofshares held

0

0

0

TitleDirector

Name

NoboruItabashi

Major career highlights
Apr. 1995
Jan. 1998

Joined Asahi Sangyo Kaisha, Ltd., Fabricated Metals Department
Joined British American Tobacco Japan, Ltd. (formerly, Rothmans

Aug. 1999

Japan), Finance Department
Joined Sun Microsystems K.K., Field Finance DivisionSep. 2006

Joined Japan Hotel & Resort K.K. and served as Senior Manager of
the Finance and Accounting Division

Apr. 2007
Apr. 2012

Senior General Manager of Operations Division
Joined Japan Hotel REIT Advisors Co., Ltd. as General Manager ofMar. 2015

the Accounting Department
Director, Senior General Manager of Operations Division & General

Number ofshares held

0Manager of Accounting and Reporting Department (current)

Director

Director(Chairman)

Hiroyuki
Aoki

SuchadChiaranussati

Sep. 1994

Joined Deloitte & Touche LLP, New York Office, Accounting &Jun. 1997

Audit Department
Joined Ingersoll-Rand Headquarters, Internal Audit Department

Nov. 2001
Jul. 2002

Joined KPMG Tax Corporation (formerly, Arthur Andersen LLP)
Joined Ripplewood Holdings LLC, Hotel Investment Group as Vice

Aug. 2005

President
Joined Creative Renovation Group Japan, Inc. as Vice President ofJan. 2008

Finance
Joined Tokyo Venture Gear Co. Ltd. as Director

Nov. 2011

Appointed Representative Director of SC Capital Partners Japan Co.
Ltd. (formerly, RE Capital Services Japan Co., Ltd.) (current) (Note)

Dec. 2011

Appointed Statutory Auditor (part-time) of Japan Hotel & Resort
K.K.

Apr. 2012

Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)

Oct. 1987

Joined the Central Bank of Thailand, Foreign Exchange ReserveOct. 1991

Management Division
Joined Temasek Holdings (in Singapore) and served as Manager ofNov. 1992

Direct Investment
Joined JP Morgan (in Singapore) and served as Vice President in theNov. 1998

Real Estate Investment and Investment Banking Division
Appointed Advisor at the Central Bank of Thailand

Apr. 1999

Joined Westbrook in Singapore as Principal and Managing Director
responsible for Asian investment activities

Nov. 2004
Oct. 2007

Established Real Estate Capital Asia Partners, L.P.
Appointed Director of SC Management Limited (current) (Note)

May 2010
Aug. 2010

Appointed Director of Rockrise Sdn Bhd as Director (current) (Note)
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,

Aug. 2015

Ltd. (current)
Appointed Director of SC J-Holdings Pte. Ltd. (current) (Note)

Oct. 2015

Appointed Chairman (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)

－

47 －

0

0

TitleDirector

Name

Major career highlights
May 1989

Joined Starwood Hotels & Resort Worldwide, Inc. (formerly, Westin
Hotel Company)

Ian George
WinstonJan. 2003

Participated in the establishment of Octagon Capital Partners Pte.
Ltd. (Co-founder)

Lien

Oct. 2007
Aug. 2010

Number ofshares held

0

Joined SC Management Ltd. as Managing Director (Note)
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)

Director

Chua Keng
Kim

Mar. 1988

Joined Government of Singapore Investment Corporation (GIC)

Apr. 1995

Joined Rodamco PACIFIC B.V. / Rodamco Asia N.V. as Managing
Director and Head of Investment Management

Jun. 2007

Appointed independent Non-Executive Director and member of the
Audit Committee of Travelsky Technology Ltd

Nov. 2007

Participated in the establishment of Stonegate China Properties
Limited (Founder and CEO)

Sep. 2008
Aug. 2010

Joined SC Management Ltd. as Managing Director (Note)
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,

Aug. 2013

Ltd. (current)
Appointed Director of SC J-Holdings Pte. Ltd. (formerly, SC Core

0Manager Pte. Ltd.) (current) (Note)
Apr. 1974
Oct. 1979

Joined Daiwa Securities Co. Ltd.
Joined Mizuho Securities Co., Ltd. (formerly, Wako Securities Co.,

Mar. 1998

Ltd.)
Seconded to Wako International (Europe) Ltd. as President

Apr. 2000

Corporate

ShigeoAuditorSekita(Note)

Manager of the IPO Department at Mizuho Securities Co., Ltd.
(formerly, Shinko Securities Co., Ltd. The corporation’s name

Jan. 2002changed due to merger.)
Joined WestLB Securities Inc. as Director of the Investment

Aug. 2005

Banking Group
Joined Credit Suisse Securities (Japan) Ltd. as Director of theSep. 2010

Structured Investment Department
Joined Japan Hotel REIT Advisors Co., Ltd. as Advisor

Dec. 2010
Apr. 2012

Representative Director
Corporate Auditor (part-time) (current)

Oct. 2013

Joined Alpha Japan Asset Advisors Ltd. as Compliance Manager(current)

0

SC Capital Partners Japan Co. Ltd., SC Management Limited, Rockrise Sdn Bhd and SC J-Holdings Pte. Ltd. are corporations belonging to SC
CAPITAL PARTNERS Group (formerly, RECAP Group).

－

48 －

5. Reference information(1) Investment status
The following outlines the investment status of JHR as of the end of the midterm period under review.
AssetcategoryRealestateintrust

Hotel type
(Note 1)

Prefectural
locationName

ibis Tokyo Shinjuku
CANDEO HOTELS UENO-KOEN
the b ikebukuro
the b akasaka-mitsuke
Hotel Sunroute Shinbashi
Comfort Hotel Tokyo Higashi Nihombashi
the b hachiojiTokyo
the b ochanomizu
Smile Hotel Nihombashi Mitsukoshimae
R&B Hotel Ueno-hirokoji
R&B Hotel Higashi-nihonbashi
Hotel Vista Kamata Tokyo
the b suidobashi
Limited-service
Dormy Inn EXPRESS Asakusa
hotel
Chisun Inn Kamata
Holiday Inn Osaka Namba
Osaka
Namba Oriental Hotelibis Styles Sapporo
Hokkaido
Mercure Sapporo
HOTEL ASCENT FUKUOKA
the b hakata
Fukuoka
Hakata Nakasu Washington Hotel Plaza
Toyoko Inn Hakata-guchi Ekimae
Kyoto
ibis Styles Kyoto Station
Okinawa
Mercure Okinawa Naha
Kumamoto
Dormy Inn Kumamoto
Nara
Nara Washington Hotel Plaza
Subtotal
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel) (Note 4)
Hiroshima
Oriental Hotel Hiroshima
Oriental Hotel tokyo bay
Chiba
Full-service
Hotel Francs
hotel
Aichi
Hilton Nagoya
Hyogo
Kobe Meriken Park Oriental Hotel
Fukuoka
Hotel Centraza Hakata
Kanagawa
Mercure Yokosuka
Subtotal
Hotel Nikko Alivila
Okinawa
Okinawa Marriott Resort & Spa
The Beach Tower Okinawa
Resort hotel
Chiba
Hilton Tokyo Bay
Osaka
Hotel Keihan Universal City
Kanagawa
Hakone Setsugetsuka
Subtotal
Real estate in trust – Total
Deposits and other assets (Note 5)
Total assets

As ofDecember 31, 2016
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)
7,671
2.4
6,751
2.1
6,578
2.1
6,286
2.0
4,854
1.5
3,625
1.1
2,673
0.8
2,344
0.7
2,047
0.6
1,764
0.6
1,512
0.5
1,467
0.5
1,205
0.4
951
0.3
797
0.3
27,163
8.5
14,656
4.6
6,724
2.1
5,945
1.9
5,211
1.6
2,330
0.7
2,054
0.6
1,477
0.5
6,701
2.1
2,916
0.9
2,199
0.7
1,871
0.6
129,783
40.8
17,778

5.6

17,688

5.7

4,071
18,267
3,145
15,530
9,947
7,506
1,643
77,891
18,267
14,861
6,831
26,1805,982
3,747
75,871
283,546
34,332
317,878

1.3
5.7
1.0
4.9
3.1
2.4
0.5
24.5
5.7
4.7
2.1
8.2
1.9
1.2
23.9
89.2
10.8
100.0

4,042
18,101
3,135
15,589
9,876
7,399
1,629
77,463
18,216
14,761
6,786
26,1136,014
3,823
75,716282,665
27,323309,988

1.3
5.8
1.0
5.0
3.2
2.4
0.5
25.0
5.9
4.8
2.2
8.4
1.9
1.2
24.4
91.2
8.8
100.0

Amount(JPY1M)
Total liabilities
Total net assets(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)As ofJune 30, 2017
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)
7,642
2.5
6,732
2.2
6,577
2.1
6,283
2.0
4,847
1.6
3,609
1.2
2,675
0.9
2,348
0.8
2,037
0.7
1,757
0.6
1,505
0.5
1,473
0.5
1,198
0.4
945
0.3
792
0.3
27,1378.8
14,653
4.7
6,690
2.2
5,914
1.9
5,197
1.7
2,336
0.8
2,043
0.7
1,466
0.5
6,688
2.2
2,895
0.9
2,179
0.7
1,853
0.6
129,48441.8

135,889
181,989

Ratio tototal assets
(%)
42.7
57.3

Amount(JPY1M)
134,854
175,133

Ratio tototal assets
(%)
43.5
56.5

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 price (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 leasehold of land in trust).

－

49 －

(2) Assets under management(A) Major issues of investment securities
Not applicable.
(B) Real estate properties under management
Not applicable.
(C) Other major assets under management
A. Summary of real estate properties under management
The following summarizes the real estate properties under management by JHR as of the end of the midterm period under review.
Details of assets under management 1 (location, form of ownership, area, structural size, etc.)
Form of ownership(Note 1)
Property
No.

Name

1

Kobe Meriken Park
Oriental Hotel2

Building
completion(Note 5)

Total
numberof guest
rooms(rooms)(Note 6)

Area

Location

Acreage(m2)(Note 2)

Structures andstories
Total floor area
(Note 4)(m2)
(Note 3)Land

Building

Chuo-ku,
Kobe-shi,
Hyogo

Leaseholdright(Note 7)Compartmentalized
ownership

22,660.09(Note 7)

48,701.82(Note 7)S
14F

July 1995

319(Note 7)

Oriental Hoteltokyo bay

Urayasu-shi,
Chiba

Ownership

Ownership

9,914.00

44,833.11

SRC/S/RC
B2/12FMay 1995

503

3

Namba
Oriental Hotel

Chuo-ku,
Osaka-shi,
Osaka

Ownership

Ownership

4,505.23

19,364.33

S/SRC
B1/9F

March 1996

258

4

Hotel Nikko Alivila

Yomitan-son,
Nakagami-gun,
Okinawa

Ownership/
Leaseholdright(Note 8)

Ownership

65,850.05(Note 8)38,024.98(Note 8)SRC
B1/10F

April 1994

396

5

Oriental Hotel
Hiroshima

Ownership

Ownership

1,792.84

13,752.22

SRC
B2/23F

September 1993
Extended in
September 2006

227

6

ibis Tokyo Shinjuku

Ownership

Ownership

937.67

7,398.19

SRC/RC/S
B1/11F

September 1980

206

280

8

The Beach Tower
Okinawa

9

HakoneSetsugetsuka

10

Dormy Inn
Kumamoto

12

the b suidobashi

13

Dormy Inn
EXPRESS Asakusa

14

15

Hakata Nakasu
Washington Hotel
Plaza
Nara
Washington Hotel
Plaza

16

R&B Hotel
Ueno-hirokoji

17

R&B Hotel
Higashi-nihonbashi

18

Comfort HotelTokyo Higashi
Nihombashi

22

Smile Hotel
Nihombashi
Mitsukoshimae24

Toyoko Inn
Hakata-guchi
EkimaeNaka-ku,
Hiroshima-shi,
Hiroshima
Nishi-Shinjuku,
Shinjuku-ku,
Tokyo
Chatan-cho,
Nakagami-gun,
Okinawa
Hakone-machi,
Ashigarashimogun, Kanagawa
Chuo-ku,
Kumamoto-shi,
Kumamoto
Hongo,
Bunkyo-ku,
Tokyo
Hanakawado,
Taito-ku,Tokyo
Hakata-ku,
Fukuoka-shi,
FukuokaNara-shi,
Nara
Ueno,
Taito-ku,Tokyo
HigashiNihonbashi,
Chuo-ku,Tokyo
Nihonbashibakurocho,
Chuo-ku,Tokyo
NihonbashiHoncho,
Chuo-ku,Tokyo
Hakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

10,242.00

20,140.01

SRC
24F

March 2004
Extended inJune 2005
Extended in
May 2006

Ownership

Ownership

10,478.89

10,655.03

RC
B1/5F

October 2006

158

Ownership

Ownership

1,295.85

7,701.19

SRC
13F

January 2008291

Ownership

Ownership

723.86

3,097.25

SRC/RC
B1/8F

August 1986
Extended in
September 198999

Ownership

Ownership

287.66

2,006.51

SRC/RC
10F

March 199777

Ownership

Ownership

1,128.46

5,692.24

S
12F

March 1995

247

Ownership

Ownership

2,322.28

5,385.82

S
7F

March 2000

204

Ownership

Ownership

446.293,060.21

S
13F

April 2002

187

Ownership/
Leaseholdright

Ownership

507.83(Note 9)3,715.26

S
10F

March 1998

202

Ownership

Ownership

823.67

5,765.26

S
11F

January 2008259

Ownership

Ownership

512.583,097.85

SRC/RC
B1/10F

March 1997164

Ownership

Ownership－

Main building: Main building: Main building:Main building
565.983,566.46
SRC 14F
and annex bothAnnex:
Annex:
Annex:
September 2001
152.37856.68
SRC 9F50 －257

Form of ownership(Note 1)
PropertyNo.

Name

Location

Nishikamata,Ota-ku,Tokyo
Kamata,Ota-ku,Tokyo

Building
completion(Note 5)

Total
numberof guest
rooms(rooms)(Note 6)

Area
Acreage(m2)(Note 2)

Structures andstories
Total floor area
2
(Note 4)(m )(Note 3)Land

Building

Ownership

Ownership

743.46

3,831.80

SRC/S
B1/9F

January 1992

105

Ownership

Ownership

240.35

1,499.87

SRC
12F

April 2003

70

3,350.14(Note 10)

17,252.71(Note 10)

S/SRC
21F

June 2001

330

25

Hotel Vista
Kamata Tokyo

26

Chisun Inn Kamata

29

Hotel Keihan
Universal City

Konohana-ku,
Osaka-shi,
Osaka

Ownership/Compartmentalized
Leaseholdownershipright(Note 10)(Note 10)30

Hotel Sunroute
Shinbashi

Shinbashi,
Minato-ku,
Tokyo

Ownership

Ownership

761.01

5,476.39

S/SRC
16F

March 2008

220

31

Hilton Tokyo Bay

Urayasu-shi,
Chiba

Ownership(Note 11)

Ownership(Note 11)

36,121.00(Note 11)

72,146.60(Note 11)

SRC
B1/11F

June 1988

828

32

ibis Styles
Kyoto Station

Ownership

Ownership

1,107.77

5,003.99

RC
10F

March 2009

215

33

ibis Styles Sapporo

Ownership

Ownership

2,515.22

14,992.49

RC
B1/16F

July 2010

278

34

Mercure Sapporo

Ownership

Ownership

2,016.27

16,145.79

S
B1/15F

April 2009

285

35

MercureOkinawa Naha

Ownership/
Leaseholdright

Ownership

2,860.69(Note 12)

10,884.25

RC
14F

August 2009

260

36

the b
akasaka-mitsuke

Ownership

Ownership

625.46

2,867.04

S
8F

November 2002

122

37

the b ikebukuro

Ownership

Ownership

718.715,650.01

SRC/S
B2/10F

June 1982

17538

the b ochanomizu

Ownership

Ownership

357.47

1,742.23

SRC
9F

August 199972

39

the b hachioji

Ownership

Ownership

1,227.29

7,847.65

SRC
B2/12F

August 1986

196

40

the b hakata

Ownership

Ownership

719.46

3,986.09

SRC
8F

September 1997

175

41

Hotel Francs

Ownership

Ownership

4,828.00

19,213.39

SRC
B1/13F

August 1991

222

42

Mercure Yokosuka

1,887.86(Note 13)

16,881.82(Note 13)

SRC/S
B3/21F

November 1993

160

43

Okinawa Marriott
Resort & Spa

52,988.00

36,430.15

SRC
14F

February 2005
Extended in
December 2006

361

44

ACTIVE-INTER
CITY HIROSHIMA(Sheraton Grand
Hiroshima Hotel)

6,379.02(Note 14)39,540.75(Note 14)

S/RC/SRC
B1/21F

August 201045

CANDEO HOTELS
UENO-KOEN

Minami-ku,
Kyoto-shi,
Kyoto
Chuo-ku,
Sapporo-shi,
Hokkaido
Chuo-ku,
Sapporo-shi,
Hokkaido
Naha-shi,
Okinawa
Akasaka,Minato-ku,
Tokyo
Higashiikebukuro,
Toshima-ku,
Tokyo
Kandaawajicho,
Chiyoda-ku,
TokyoHachioji-shi,Tokyo
Hakata-ku,
Fukuoka-shi,
FukuokaMihama-ku,
Chiba-shi,
Chiba

Right of site Compartmentalized
Yokosuka-shi,ownership(co-ownership)
Kanagawa(Note 13)
(Note 13)
Nago-shi,
Okinawa

Ownership

Ownership

Higashi-ku,
Right of site Compartmentalized
ownership
Hiroshima-shi, (co-ownership)(Note 14)
Hiroshima(Note 14)238
(Note 15)

Negishi,Taito-ku,
Tokyo

Ownership

Ownership

1,559.03

7,030.10

S
12F

December 2009

268

46

Hotel Centraza
HakataHakata-ku,
Fukuoka-shi,
Fukuoka

Fixed-termleaseholdright(Note 16)

Ownership

2,163.42

18,105.42

SRC
B3/12F

July 1985

194

47

Holiday Inn
Osaka Namba

Chuo-ku,
Osaka-shi,
Osaka

Ownership

Ownership

2,428.47

11,501.10

S
12F

August 2008

314

48

HOTEL ASCENTFUKUOKA

Chuo-ku,
Fukuoka-shi,
Fukuoka

1,482.13

8,600.22

S/RC/SRC
B2/13F

April 1999

263

49

Hilton Nagoya

Naka-ku,
Nagoya-shi,
Aichi

6,723.59(Note 18)

46,368.99(Note 18)

S/RC/SRC
B3/29F

February 1989

460

Ownership/
Fixed-termleaseholdOwnershipright(Note 17)
OwnershipCompartmentalized
andownershipsuperficies(Note 18)
(Note 18)－

51 －(Note 1)(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)(Note 11)

(Note 12)(Note 13)

(Note 14)

(Note 15)
(Note 16)
(Note 17)
(Note 18)

“Form of ownership” is the type of right held by the owner of the real estate that is the asset held (the trustee in the case of a real estate in trust).
“Acreage” is the area of the entire site based on the registration or registration record. The registration or registration record entry may not coincidewith the present state of the land.
“Total floor area” is the area of the building based on the registration or registration record. The area of the accessory building, if any, is included
unless otherwise stated. The registration or registration record entry may not coincide with the present state of the building.
Under “Structures and stories,” “S” means steel-framed building, “RC” means reinforced concrete building and “SRC” means steel reinforced
concrete building. The structure of the main building is shown, but there may be cases where there is a parking lot or storage space as an accessory to
the building in a separate building.
“Building completion” is based on the registration or registration record.
“Total number of guest rooms” is the respective number of guest rooms available for sale (excluding rooms occupied by the hotel for a long term) at
the end of the midterm period under review.
The land of Kobe Meriken Park Oriental Hotel comprises land leased by JHR from the City of Kobe and land with permission for use from the Cityof Kobe under the City of Kobe’s ordinance for harbor facilities, etc. The acreage above is based on the number on the construction confirmation
application form. In addition, the building of Kobe Meriken Park Oriental Hotel is a building under compartmentalized ownership by twocompartmentalized owners (JHR and the City of Kobe). The figure above is the total floor area of the entire building under compartmentalized
ownership (including an accessory building of 764.83 square meters), where the portion owned exclusively by JHR (excluding an accessory buildingof 764.83 square meters) is 31,899.07 square meters, the portion owned exclusively by the City of Kobe is 13,960.11 square meters, and the portion
that is the common area of JHR and the City of Kobe is 2,077.81 square meters (JHR has 72.18% interest and the City of Kobe has 27.82% interest of
the common area).
The land of Hotel Nikko Alivila comprises land owned by JHR or land leased or subleased by JHR from Kabushiki Kaisha Okinawa Umi No Sono
(hereinafter referred to as the “Umi No Sono”). The acreage above is the sum total of the area on the certified copy of the real estate registry of eachland. Furthermore, the leased land or subleased land includes those where only a portion of a parcel of land is leased or subleased and, thus, theacreage above includes some area that is not leased or subleased by JHR from Umi No Sono. In addition, subdivision of part of the subleased land
resulted in the acreage above changing from 67,038.05 square meters to 65,850.05 square meters on June 12, 2012. The sum total of the acreage ofthe land owned by JHR and the land leased or subleased calculated based on the certified copy of the real estate registry, lease contract with Umi No
Sono, etc. is 57,406.26 square meters. The total floor area above includes an accessory building of 120.10 square meters and excludes a building
leased from Umi No Sono of 493.50 square meters.
Of the acreage of R&B Hotel Higashi-nihonbashi, the area of the leased land is 77.38 square meters.
The land of Hotel Keihan Universal City comprises land under co-ownership with other right holders (8,785.43 square meters) and land leased underquasi-co-ownership with other right holders from the City of Osaka (8,788.67 square meters). The acreage above is the sum total of JHR’s coownership interest of the land under co-ownership of 1,674.76 square meters (approximately 19.06% of co-ownership interest) and JHR’s quasi-coownership interest in the land leasehold right of the land leased from the City of Osaka of 1,675.38 square meters (approximately 19.06% of quasico-ownership interest). In addition, the building of Hotel Keihan Universal City is a building under compartmentalized ownership for Universal
CityWalk Osaka, which comprises two hotel buildings, business facilities, commercial facilities and others, as a single building (86,888.64 square
meters). The portion owned exclusively by JHR (including the common area by bylaws) is 15,749.32 square meters, and JHR’s co-ownership interestof the common area (15,648.98 square meters) is 3,466.56 square meters (approximately 22.15% of co-ownership interest). “Total floor area” in thetable above is the total floor area based on the completion drawing of new construction of Hotel Keihan.
The land of Hilton Tokyo Bay is land under co-ownership with other right holders. The acreage is the total area of the land under co-ownership. Of
the acreage, JHR’s co-ownership interest is 32,508.90 square meters (9/10 of co-ownership interest). In addition, the building of Hilton Tokyo Bay is
a building under co-ownership with other right holders. The total floor area is the total area of the building under co-ownership (including anaccessory building of 37.38 square meters). Of the total floor area, JHR’s co-ownership interest is 64,931.94 square meters (9/10 of co-ownershipinterest).
The acreage of Mercure Okinawa Naha includes leased land of 125.67 square meters.
The land of Mercure Yokosuka comprises the entire joint ownership of right of site. The acreage indicates JHR’s share of co-ownership of the right touse the site (181,372/1,000,000 or approximately 18.14%) of the entire area of the subject land (10,408.79 square meters), which is 1,887.86 square
meters. In addition, the building is a building under compartmentalized ownership for Bay Square Yokosuka Ichibankan, which comprises a hotel, atheater, stores, residential complex, offices and parking lots, as a single building (67,019.04 square meters). Total floor area is the area of the portion
owned exclusively by the hotel on the certified copy of the real estate registry.
The land of ACTIVE-INTER CITY HIROSHIMA comprises the entire joint ownership of right of site. The acreage indicates JHR’s share of coownership of the right to use the site (9,862,454/10,000,000 or approximately 98.62%) of the entire area of the subject land (6,468.28 square meters),
which is 6,379.02 square meters. In addition, the building is a building under compartmentalized ownership for ACTIVE-INTER CITYHIROSHIMA, which comprises Sheraton Grand Hiroshima Hotel, offices, retail zone, parking lots and bicycle parking lots, etc., as a single building(6,379.02 square meters). Total floor area is the area of the exclusive area for the hotel, offices, stores and parking lots on the certified copy of the realestate registry.
The total number of guest rooms of ACTIVE-INTER CITY HIROSHIMA is the total number of guest rooms of the main facility Sheraton Grand
Hiroshima Hotel.
Remaining term of the fixed-term leasehold of land of Hotel Centraza Hakata is until March 30, 2057.
Of the acreage of HOTEL ASCENT FUKUOKA, the area of the leased land is 113.52 square meters, and its remaining term of the fixed-termleasehold is until July 2, 2065.
Land of Hilton Nagoya comprises the owned land and land with superficies, and Acreage indicates total of land owned (918.39 square meters) andland settled superficies by JHR (5,805.20 square meters). Building of Hilton Nagoya is a compartmentalized ownership of Ammnat Square (Total
floor space: 91,948.34 square meters), which consists of hotel building (including retail space), office building and car parking space, etc. Total floorarea is a total of exclusive area of hotel and retail space (44,552.79 square meters), exclusive area of office on 9th floor (1,075.90 square meters)
multiplied by JHR’s share of co-ownership interest ratio (74,030/107,590; approximately 68.8%) (740.30 square meters) and exclusive area of officeon 10th floor (1,075.90 square meters).

－

52 －

(Note 19) The omitted property numbers are the property numbers of assets that have been transferred.

－

53 －

Details of assets under management 2 (acquisition price, etc.)
PropertyNo.

Name

Acquisition
price(JPY1M)(Note 2)Carrying
amountat end ofperiod(JPY1M)(Note 3)

Appraisalvalue
at end ofperiod(JPY1M)(Note 4)Upper-middle

10,90010,057

14,400J

3.8

Unsecured

Grade(Note 1)

Investment
ratio
Appraisal(Acquisition Collateralagencyprice)(Note 7)(Note 5)(%)(Note 6)

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel tokyo bay

Mid-price

19,90018,28834,100J

6.9

Unsecured

3

Namba Oriental Hotel

Mid-price

15,00014,81332,700J

5.2

Unsecured

4

Hotel Nikko Alivila

Luxury18,90018,46930,000J

6.6

Unsecured

5

Oriental Hotel Hiroshima

Upper-middle

4,100

4,092

4,280

J

1.4

Unsecured6

ibis Tokyo Shinjuku

Mid-price

7,243

7,746

9,460

J

2.5

Unsecured

8

The Beach Tower Okinawa

Mid-price

7,610

6,792

9,420

J

2.7

Unsecured

9

Hakone Setsugetsuka

Mid-price

4,070

3,831

5,030

J

1.4

Unsecured

10

Dormy Inn Kumamoto

Mid-price

2,334

2,179

2,960

M

0.8

Unsecured

12

the b suidobashi

Mid-price

1,120

1,227

1,940

J

0.4

Unsecured

13

Dormy Inn EXPRESS Asakusa

Economy

999

945

1,300

M

0.3

Unsecured

14

Hakata Nakasu Washington Hotel Plaza

Mid-price

2,130

2,043

4,340

J

0.7

Unsecured

15

Nara Washington Hotel Plaza

Mid-price

2,050

1,858

2,430

J

0.7

Unsecured16

R&B Hotel Ueno-hirokoji

Economy

1,720

1,757

1,920

M

0.6

Unsecured17

R&B Hotel Higashi-nihonbashi

Economy

1,534

1,505

2,050

M

0.5

Unsecured

18

Comfort Hotel Tokyo Higashi Nihombashi

Economy

3,746

3,609

5,330

M

1.3

Unsecured

22

Smile Hotel Nihombashi Mitsukoshimae

Economy

2,108

2,037

3,060

M

0.7

Unsecured24

Toyoko Inn Hakata-guchi Ekimae

Economy

1,652

1,466

2,670

T

0.6

Unsecured

25

Hotel Vista Kamata Tokyo

Economy

1,512

1,474

2,010

T

0.5

Unsecured

26

Chisun Inn Kamata

Economy

823

795

1,430

T

0.3

Unsecured

29

Hotel Keihan Universal City

Mid-price

6,000

6,015

14,000R

2.1

Unsecured

30

Hotel Sunroute Shinbashi

Mid-price

4,800

4,847

8,730

D

1.7

Unsecured

31

Hilton Tokyo Bay

Luxury26,05026,11336,100D

9.1

Unsecured32

ibis Styles Kyoto Station

Mid-price

6,600

6,717

10,900D

2.3

Unsecured33

ibis Styles Sapporo

Mid-price

6,797

6,717

10,200J

2.4

Unsecured34

Mercure Sapporo

Mid-price

6,000

5,937

10,400J

2.1

Unsecured35

Mercure Okinawa Naha

Mid-price

3,000

2,910

7,690

J

1.0

Unsecured36

the b akasaka-mitsuke

Mid-price

6,250

6,301

6,420

J

2.2

Unsecured37

the b ikebukuro

Mid-price

6,520

6,584

7,470

J

2.3

Unsecured38

the b ochanomizu

Mid-price

2,320

2,353

2,470

J

0.8

Unsecured39

the b hachioji

Mid-price

2,610

2,688

2,940

J

0.9

Unsecured40

the b hakata

Mid-price

2,300

2,357

4,070

J

0.8

Unsecured

41

Hotel Francs

Mid-price

3,105

3,135

4,090

D

1.1

Unsecured42

Mercure Yokosuka

Mid-price

1,650

1,644

2,350

D

0.6

Unsecured

43

Okinawa Marriott Resort & Spa

Upper-middle

14,95014,866

17,200J

5.2

Unsecured

44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Luxury17,32017,716

18,700D

6.0

Unsecured

45

CANDEO HOTELS UENO-KOEN

Mid-price

6,705

6,742

7,650

D

2.3

Unsecured

46

Hotel Centraza Hakata

Mid-price

7,197

7,474

7,750

D

2.5

Unsecured

47

Holiday Inn Osaka Namba

Mid-price

27,00027,17928,500J

9.4

Unsecured

48

HOTEL ASCENT FUKUOKA

Economy

4,925

5,197

5,340

D

1.7

Unsecured

49

Hilton Nagoya

Luxury15,25015,58915,800D

5.3

Unsecured

286,801

284,085399,600

Total

－

54 －

100.0

(Note 1)(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)JHR categorizes hotels into the four grade classes “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 merger.
“Carrying amount at end of period” is the book value at the end of the midterm period under review, and includes not only the amounts for real estatein trust, but also machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible
assets.
“Appraisal value at end of period” is the appraisal value at the end of the midterm period under review as the date of appraisal, in accordance with theasset 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:
J:
Japan Real Estate InstituteM:
Morii Appraisal & Investment Consulting, Inc.
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 midterm period under review to the total amount ofacquisition price of all assets held at the end of the midterm period under review, 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.

Details of assets under management 3 (change in tenants of portfolio)
The following is the change in total number of tenants, total leasable area, total leased area, and occupancy rate of real estate
properties under management for the past five years.
End of12th period
March 2012

End of13th period
December 2012

End of14th period
December 2013

End of15th period
December 2014

End of16th period
December 2015

End of17th period
December 2016

End ofmidterm period of
18th period
June 2017

Number of tenants(Note 1)

24

37

38

57

113

128

128

Total leasable area
(Note 2)

101,028.49 m2

288,875.32 m2

349,162.63 m2

386,826.71 m2

493,758.78 m2

587,481.02 m2

587,481.02 m2

Total leased area
(Note 3)101,028.49 m2

288,875.32 m2

349,162.63 m2

386,447.08 m2

493,138.06 m2

587,050.94 m2

587,050.94 m2

Occupancy rate
(Note 4)100.0%

100.0%

100.0%

99.9%

99.9%

99.9%

99.9%

(Note 1)

(Note 2)

(Note 3)(Note 4)

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 or midterm period. However, for properties for which master lease contracts under the pass-throughscheme are concluded in which 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 intsubo units, the figure in the table has been converted to the area in metric units (3.30578 square meters per one tsubo). In this report, the same shallapply 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 ofrents, etc. with 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 is indicated. In this report, 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 or
midterm period. In this report, the same shall apply hereinafter.

Details of assets under management 4 (information on major real estate)
There is no major real estate of which total annual rent accounts for 10% or more of the total annual rent of the entire portfolio. Totalannual rent of the entire portfolio is the total annual rent calculated based on Note 2 of “C. Status of portfolio diversification” on page
62.

－

55 －

Details of assets under management 5 (NOI, etc.)

1

Kobe Meriken Park Oriental Hotel

Variable/Fixed

Real estate
operating revenue(JPY1000)
439,560

2

Oriental Hotel tokyo bay

Variable/Fixed

778,218

717,912521,644

3

Namba Oriental Hotel

Variable/Fixed

779,956

729,919635,677

4

Hotel Nikko Alivila

Variable/Fixed

578,959

504,025

341,239

5

Oriental Hotel Hiroshima

6

ibis Tokyo Shinjuku

8PropertyNo.

Name

Rent type(Note 1)

NOI
(Note 2)
(JPY1000)
305,100

NOI after depreciation(Note 3)
(JPY1000)
157,423

Variable/Fixed

214,568

192,226

154,878

Management contract

256,792

173,764

130,591

The Beach Tower Okinawa

Fixed

255,508

234,378

170,972

9

Hakone Setsugetsuka

Fixed147,472

134,627

91,953

10

Dormy Inn Kumamoto

12

the b suidobashi

13

Fixed

97,23086,326

66,344

Variable/Fixed

55,86049,45337,215

Dormy Inn EXPRESS Asakusa

Fixed

31,997

27,667

21,52014

Hakata Nakasu Washington Hotel Plaza (Note 4)

Fixed

120,000

112,000

100,000

15

Nara Washington Hotel Plaza (Note 4)

Fixed

75,00067,00047,000

16

R&B Hotel Ueno-hirokoji

Fixed48,64740,47333,687

17

R&B Hotel Higashi-nihonbashi

Fixed61,10352,76643,28518

Comfort Hotel Tokyo Higashi Nihombashi

135,395

120,426

102,408

22

Smile Hotel Nihombashi Mitsukoshimae

85,682

78,141

68,55624

Toyoko Inn Hakata-guchi Ekimae

70,51964,03253,33625

Hotel Vista Kamata Tokyo

46,79639,30027,58626

Chisun Inn Kamata

37,85034,11528,42629

Hotel Keihan Universal City

522,756484,209441,11930

Hotel Sunroute Shinbashi

254,418

226,613

216,12231

Hilton Tokyo Bay

940,508

791,757

704,758

32

ibis Styles Kyoto Station

Fixed
Variable/Fixed(Note 5)
Fixed
Variable/Fixed(Note 5)
Variable
Variable/Fixed(Note 5)
Variable/Fixed(Note 5)
Variable/Fixed(Note 5)
Management contract

284,576

256,144

238,821

33

ibis Styles Sapporo

Management contract

295,901

234,888

196,88234

Mercure Sapporo

Management contract

343,605

242,710

204,595

35

Mercure Okinawa NahaManagement contract239,378

197,014

171,70536

the b akasaka-mitsuke

Variable/Fixed

123,899

114,655

103,82137

the b ikebukuro

Variable/Fixed

176,986

165,034

150,17638

the b ochanomizu

Variable/Fixed

52,65348,43343,60239

the b hachioji

Variable/Fixed

94,611

81,233

68,23040

the b hakata

Variable/Fixed

116,324

110,469

100,351

41

Hotel Francs

Fixed

150,000

118,264

94,04242

Mercure Yokosuka

Variable

180,186

125,545

110,048

43

Variable/Fixed

348,226

303,795

189,009

Variable/Fixed

719,254

513,333

421,40345

Okinawa Marriott Resort & Spa
ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)
CANDEO HOTELS UENO-KOEN

Fixed

175,205

168,161

148,480

46

Hotel Centraza Hakata

Variable/Fixed

436,973

318,436

194,205

47

Holiday Inn Osaka Namba

Variable/Fixed

601,538

589,159

531,974

48

HOTEL ASCENT FUKUOKA

Fixed

214,425

144,610

127,153

49

Hilton Nagoya

Variable

682,348

365,395

298,178

11,272,084

9,364,708

7,588,793

44

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

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
For Hakata Nakasu Washington Hotel Plaza and Nara Washington Hotel Plaza, 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.
For Smile Hotel Nihombashi Mitsukoshimae, Hotel Vista Kamata Tokyo, Hotel Keihan Universal City, Hotel Sunroute Shinbashi and Hilton Tokyo
Bay, the rent structure is one that has set not only fixed rent, but also partly rent based on revenue sharing.
The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

－

56 －

Details of assets under management 6 (status of rent settings of major tenants)

Tenant name(Note 1)

(Note 6)(Note 7)(Note 8)(Note 9)Ratio tototal
(Note 2)

Ratio tototal
(Note 2)

5.6%

April 1, 2012
December 31, 2019
April 1, 2012
December 31, 2019
April 1, 2012
December 31, 2019
April 1, 2012
December 31, 2019
July 1, 2012
June 30, 2024
October 31, 2013
December 31, 2018
December 27, 2014
December 27, 2019
September 30, 2014
September 30, 2029
September 30, 2014
April 26, 2024
April 2, 2015
August 30, 201944,833.11 m2

7.6%

19,364.33 m2

3.3%

38,024.98 m2

6.5%

13,752.22 m2

2.3%

2

1.0%

4,628.32 m2

0.8%

14,076.45 m

2

2.4%

12,888.36 m

2

2.2%

10,884.25 m

2

1.9%

16,881.82 m2

2.9%

64,931.94 m2

11.1%

Total for major tenants

278,718.94 m2

Total for entire portfolio

587,050.94 m2 100.0% 587,050.94 m2 100.0%

THE
DAI-ICHIBUILDING
CO., LTD.

(Note 5)

Total leased area
(By tenant)32,663.90 m2

Accor(AAPC Japan
K.K.)(Note 4)

Kobe
Meriken Park
Oriental Hotel
Oriental Hoteltokyo bay
Namba
Oriental Hotel
Hotel Nikko
AlivilaOriental Hotel
Hiroshima
ibis
Tokyo Shinjuku
ibis Styles
Kyoto Station
ibis Styles
SapporoMercureSapporoMercureOkinawa Naha
MercureYokosukaBusiness
type

Total leased area
(By hotel)

April 1, 2012
December 31, 2019

HMJ
(HotelManagement
Japan
Co., Ltd.)(Note 5)(Note 6)(Note 1)
(Note 2)
(Note 3)

Property nameContract
commencement date
Contract
expiration dateHiltonTokyo BayHotel

Ryokan/HotelReal estateleasing andmanagement

July 1, 2015
December 31, 2018

5,789.26 m

Annual rent
(By hotel)(Note 3)
(JPY1M)
Fixed rent
(Note 4)
Variable rent

Total annual rent
(By tenant)(Note 3)
(JPY1M)
Fixed rent
(Note 4)
Variable rent

645
(Note 7)

148,638.54 m2

25.3%

65,148.46 m2

11.1%

64,931.94 m2

11.1%

47.5% 278,718.94 m2

47.5%

631
(Note 7)797
(Note 7)804
(Note 7)341
(Note 7)(Note 8)(Note 8)(Note 8)(Note 8)(Note 8)(Note 8)3,221
(Note 7)(Note 8)1,872
(Note 9)1,872
(Note 9)5,093
12,523-

5,093
12,523-The information on major tenants, which are those accounting for at least 10% of total leased area of the entire portfolio.
Ratio to total is rounded off to one decimal place.
The ratio of annual rent by hotel or by tenant may vary depending on the amount of variable rent and income from management contracts and is thus
not shown.
Fixed rent is the amount arrived at when the monthly fixed rent income based on lease contracts valid as of June 30, 2017 between JHR and the major
tenant (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 period) is multiplied by 12, excluding variable rents and income from management contracts.
HMJ falls under the category of interested party, etc. under the Investment Trusts Act and sponsor-related party as stipulated in the Asset Management
Company’s company rule for transactions with sponsor-related parties.
HMJ has acquired all shares of Lagoon resort Nago Co., Ltd., which is the lessee and hotel operator of Okinawa Marriott Resort & Spa, K.K. A.I.C
Hiroshima Management, which is the lessee and hotel operator of Sheraton Grand Hiroshima Hotel (the main facility of ACTIVE-INTER CITYHIROSHIMA), Hotel Centraza Co., Ltd., which is the lessee and hotel operator of Hotel Centraza Hakata, and OW Hotel Operations KK, which is
the lessee and hotel operator of Holiday Inn Osaka Namba. Accordingly, Lagoon resort Nago Co., Ltd., K.K. A.I.C Hiroshima Management, Hotel
Centraza Co., Ltd. and OW Hotel Operations KK fall under the category of interested party, etc. under the Investment Trusts Act and sponsor-related
party as stipulated in the Asset Management Company’s company rule for transactions with sponsor-related parties. The following are the leasing
terms and conditions of Okinawa Marriott Resort & Spa, Sheraton Grand Hiroshima Hotel (the main facility of ACTIVE-INTER CITYHIROSHIMA), Hotel Centraza Hakata and Holiday Inn Osaka Namba. The leased area, ratio of leased area and total annual fixed rent of HMJ and its
wholly-owned subsidiaries Lagoon resort Nago Co., Ltd., K.K. A.I.C Hiroshima Management, Hotel Centraza Co., Ltd. and OW Hotel Operations
KK are 236,565.54 square meters, 40.3% and ¥5,095 million, respectively.
Contract
Annual fixed rent
Business commencement date Total leased area
Ratio of
Annual variable
Tenant name
Property name2
type
Contract(m )total leased area
rent
expiration date
(JPY1M)
Lagoon resort Nago
July 10, 2015
550
Okinawa Marriott Resort & Spa
Hotel36,430.15
6.2%
Co., Ltd.
December 31, 2020(*)
K.K. A.I.C
ACTIVE-INTER CITY
December 18, 2015
348
Hiroshima
HIROSHIMA
Hotel
21,890.33
3.7%
December 31, 2026(*)
Management(Sheraton Grand Hiroshima Hotel)
Hotel Centraza
April 1, 2016
400
Hotel Centraza Hakata
Hotel18,105.42
3.1%
Co., Ltd.
December 31, 2019(*)
OW HotelAugust 1, 2016
576
Holiday Inn Osaka Namba
Hotel
11,501.10
2.0%
Operations KK
October 31, 2031(*)(*) For details of the variable rent arrangements for Okinawa Marriott Resort & Spa, Sheraton Grand Hiroshima Hotel (ACTIVE-INTER CITYHIROSHIMA), Hotel Centraza Hakata, and Holiday Inn Osaka Namba, please refer to “D. Overview of the hotel business; (1) Rent structures ofhotels with variable rent, management contract or revenue sharing” on page 65.
For details of the variable rent arrangements for HMJ, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable
rent, management contract or revenue sharing” on page 65.
Variable rent for Accor (AAPC Japan K.K.) means income from management contracts and variable rent. For details of the arrangements of income
from management contract and variable rent, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent,
management contract or revenue sharing” on page 65.
The variable rent for THE DAI-ICHI BUILDING CO., LTD. is not disclosed as consent on disclosure has not been obtained from the tenant and thus
considered to be a case where disclosure cannot be made due to unavoidable circumstances. There is thus also no entry of the total for major tenants.

－

57 －

B. Income statements for individual real estate properties under management
The following are the individual income statements for real estate properties under management for the midterm period underreview (from January 1, 2017 to June 30, 2017). 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. Income statement items thatare not directly attributable to the property are not included. In addition, the income statement amounts shown are on an
accrual basis in principle, but are otherwise noted if circumstances require the amounts to be shown on a cash basis.
Property No.

-

1

2

3

4

5

Property name

Portfolio total

Kobe
Meriken Park
Oriental Hotel

Oriental Hoteltokyo bay

Namba
Oriental Hotel

Hotel Nikko
AlivilaOriental Hotel
Hiroshima

Number of operating days

-

181

181

181

181

181

(A) Real estate operating revenue subtotal

11,272,084

439,560

778,218

779,956

578,959

214,568

Fixed rent

6,258,229

322,950

315,799

398,950

402,049

170,752

Variable rent

4,457,873

116,125

462,418

381,006

176,90943,816

Other revenue

555,982

484

-

-

-

-

(B) Real estate operating costs subtotal

3,683,291

282,137

256,573

144,278

237,719

59,689Land lease and other rent expenses

461,618

103,705--

42,074-

Property taxes

710,238

27,797

57,681

48,32029,672

20,780Outsourcing expenses

285,511

480

480

480

960

480

Nonlife insurance

22,998

1,784

1,637

729

1,212

576

Depreciation and amortization

1,756,345

147,677

196,117

77,245

161,388

37,339Loss on retirement of noncurrent assets

18,551-

150

16,995

1,397

8

Other costs

428,027

691

506

506

1,015

505

(C) Net real estate operating income = (A) − (B)7,588,793

157,423

521,644635,677

341,239

154,878(Reference) Occupancy rate

99.9%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

128

1

1

1

1

1

Property No.

6

8

ibis
The Beach Tower
Tokyo Shinjuku
Okinawa(Note 1)

Property name

9

10

12

13

HakoneSetsugetsuka

Dormy Inn
Kumamoto

the bsuidobashi

Dormy Inn
EXPRESSAsakusa

Number of operating days

181

181

181

181

181

181

(A) Real estate operating revenue subtotal

256,792

255,508

147,472

97,23055,86031,997

Fixed rent

51,786

255,504

147,169

97,23042,49931,697

Variable rent

177,758---

13,360-

Other revenue

27,247

4

303

-

-

300

(B) Real estate operating costs subtotal

126,200

84,53555,51930,885

18,644

10,477

Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

16,857

19,495

11,715

9,653

4,053

2,989

Outsourcing expenses

37,265

-

-

-

600

600

Nonlife insurance

310

614

323

237

103

60

Depreciation and amortization

43,173

63,40542,674

19,982

12,2386,146

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

28,595

1,019

805

1,012

1,649

680

(C) Net real estate operating income = (A) − (B)130,591

170,972

91,953

66,344

37,215

21,520(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

－

58 －

Property No.

14

15

Hakata Nakasu
Nara
Washington Hotel Washington Hotel
Plaza
Plaza
(Note 2)
(Note 2)

Property name

16

17

18

22

R&B Hotel
Ueno-hirokoji

R&B Hotel
Higashinihonbashi

Comfort HotelTokyo Higashi
Nihombashi

Smile Hotel
Nihombashi
Mitsukoshimae

Number of operating days

181

181

181

181

181

181

(A) Real estate operating revenue subtotal

120,000

75,00048,647

61,103

135,395

85,682

Fixed rent

120,000

73,00048,252

61,103

129,793

67,200

Variable rent

-

-

-

-

-

18,482Other revenue

0

2,000

394

-

5,602

-

(B) Real estate operating costs subtotal

20,00028,00014,95917,81832,987

17,126

Land lease and other rent expenses

-

-

-

2,700

-

-

Property taxes

6,000

6,000

5,937

4,285

13,1186,085

Outsourcing expenses

0

1,000

420

600

807

600

Nonlife insurance

0

0

87

104

232

104

Depreciation and amortization

12,00020,000

6,785

9,480

18,017

9,585

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

0

0

1,729

647

812

750

(C) Net real estate operating income = (A) − (B)100,000

47,00033,68743,285

102,408

68,556(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

2

1

1

2

1

Property No.

24

25

26

29

30

31

Property nameToyoko Inn
Hakata-guchi
EkimaeHotel Vista
Kamata Tokyo

Chisun Inn
KamataHotel Keihan
Universal City

Hotel Sunroute
Shinbashi

HiltonTokyo Bay

Number of operating days

181

181

181

181

181

181

(A) Real estate operating revenue subtotal

70,51946,79637,850522,756

254,418

940,508

Fixed rent

70,51946,767-

Variable rent--

37,850

Other revenue

-

29

-

Undisclosed(Note 3)
Undisclosed(Note 3)
Undisclosed

141,133

96,845

16,439(Note 3)

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

17,182

19,2099,423

81,63638,296

235,750

Land lease and other rent expenses

-

-

-

10,555-

66,128Property taxes

5,190

6,019

2,317

22,566

12,45868,872

Outsourcing expenses

540

600

540

2,445

2,355

11,448Nonlife insurance

133

121

51

729

174

1,774

Depreciation and amortization

10,695

11,714

5,689

43,08910,491

86,998Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

623

754

825

2,249

12,817527(C) Net real estate operating income = (A) − (B)53,336

27,58628,426441,119

216,122704,758(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

1

1

1

4

1

－

59 －

Property No.

32

33

34

35

36

37

Property name

ibis Styles
Kyoto Station(Note 1)

ibis Styles
Sapporo(Note 1)

MercureSapporo(Note 1)

MercureOkinawa Naha
(Note 1)the bakasaka-mitsuke

the bikebukuro

Number of operating days

181

181

181

181

181

181

(A) Real estate operating revenue subtotal

284,576295,901

343,605

239,378

123,899

176,986

Fixed rent

21,167

13,13333,025-68,191

108,986

Variable rent

261,608

262,295

250,446

233,92255,70867,999Other revenue

1,800

20,47260,133

5,456

-

-

(B) Real estate operating costs subtotal

45,754

99,018139,010

67,672

20,07826,809Land lease and other rent expenses

-

-

-

150

-

-

Property taxes

9,031

18,23724,151

11,452

7,516

9,944

Outsourcing expenses

17,26822,86430,361

28,795600

600

Nonlife insurance

221

446

520

361

125

223

Depreciation and amortization

17,32238,006

38,11525,308

10,834

14,858Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

1,909

19,46345,861

1,602

1,002

1,183

(C) Net real estate operating income = (A) − (B)238,821

196,882

204,595

171,705

103,821150,176(Reference) Occupancy rate

100.0%

99.4%

98.1%

100.0%

100.0%

100.0%(Reference) Number of tenants

2

5

14

1

2

4

Property No.

38

39

40

41

42

43

Property namethe bochanomizu

the bhachioji

the bhakataHotel Francs

MercureYokosuka

Okinawa
MarriottResort & Spa

Number of operating days

181

181

181

181

181

181

(A) Real estate operating revenue subtotal

52,653

94,611

116,324

150,000

180,186

348,226

Fixed rent

34,50060,21044,761150,000-

274,999

Variable rent

18,15331,21571,563-

159,974

73,226

Other revenue

-

3,184

-

-

20,212-(B) Real estate operating costs subtotal

9,050

26,38015,972

55,957

70,138159,216

Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

3,091

10,773

4,678

30,07818,242

41,543

Outsourcing expenses

600

900

600

900

8,751

1,200

Nonlife insurance

66

243

130

506

1,143

1,255

Depreciation and amortization

4,831

13,002

10,117

24,222

15,497

114,785

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

461

1,460

445

251

26,503431(C) Net real estate operating income = (A) − (B)43,602

68,230100,351

94,042110,048

189,009(Reference) Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

1

13

2

1

1

1

－

60 －

Property No.

44

45

46

47

48

49

Property name

ACTIVE-INTERCITY
HIROSHIMACANDEOHOTELS
UENO-KOEN

Hotel Centraza
HakataHoliday Inn
Osaka Namba

HOTEL
ASCENTFUKUOKA

Hilton Nagoya

Number of operating days

181

181

181

181

181

(A) Real estate operating revenue subtotal

719,254

175,205

436,973

601,538

214,425

Undisclosed
Fixed rent

Variable rent

386,689(Note 3)

199,790

Land lease and other rent expenses

313,538

152,717-(Note 3)
Undisclosed(Note 3)
Undisclosed

26,725

242,768

69,56487,271

384,169--

111,103-

13,999111,200

Property taxes

58,105

5,758

4,873

10,503

7,736

26,505

Outsourcing expenses

46,101

600

1,500

780

6,588

52,314

Nonlife insurance

1,781

257

628

669

254

2,705

Depreciation and amortization

91,93019,681

123,435

57,185

17,234

67,217

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

99,932

428

1,228

426

41,458124,226(C) Net real estate operating income = (A) − (B)421,403

148,480

194,205

531,974

127,153

298,178(Reference) Occupancy rate

99.8%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants

37

1

1

1

6

4

(Note 4)

297,851

236,973

288,000

61,707(Note 3)(B) Real estate operating costs subtotal

199,999-(Note 2)

132,774

Undisclosed

682,348
Undisclosed-(Note 1)Other revenue-

181(Note 3)(Note 3)

Variable rent includes income from management contracts. For details of the management contract, please refer to “D. Overview of the hotelbusiness; (1) Rent structures of hotels with variable rent, management contract or revenue sharing” on page 65.
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.
Rent income, etc. is not disclosed as consent on disclosure has not been obtained from the tenant with whom a lease contract has been concluded andthus considered to be a case where disclosure cannot be made due to unavoidable circumstances.
The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

－

61 －

C. Status of portfolio diversification
a. Diversification by hotel type
The total annual rent, the total of acquisition price and the investment ratio by the hotel type of the assets held at the endof the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Hotel type
(Note 2)
(Note 3)(Note 4)(Note 1)
(JPY1M)(JPY1M)(%)
Limited-service hotel

9,671

129,798

45.3

Full-service hotel

7,091

79,422

27.7

Resort hotel

6,645

77,580

27.1

Total

23,407

286,801

100.0

b. Diversification by geographical area
The total annual rent, the total of acquisition price and the investment ratio by the geographical area of the assets held at
the end of the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Geographical area
(Note 2)
(Note 3)(Note 4)(Note 5)
(JPY1M)(JPY1M)(%)
Hokkaido

1,356

12,797

4.5

Tokyo

3,136

50,010

17.4

Kanto (excluding Tokyo)

4,638

54,775

19.1

Chubu

1,025

15,250

5.3

Kansai

5,515

67,55023.6

Chugoku

1,640

21,420

7.5

Kyushu (excluding Okinawa)

1,958

20,538

7.2

Okinawa

4,136

44,460

15.5

Total

23,407

286,801

100.0

c. Diversification by hotel grade
The total annual rent, the total of acquisition price and the investment ratio by the hotel grade of the assets held at the endof the midterm period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Hotel grade(Note 2)
(Note 3)(Note 4)
(JPY1M)(JPY1M)(%)
Luxury6,044

77,52027.0Upper-middle

2,863

29,95010.4

Mid-price

13,164160,311

55.9

Economy

1,335

19,019

6.6

Total

23,407

286,801

100.0

d. Diversification by building age
The total annual rent, the total of acquisition price and the investment ratio by the building age of the assets held at theend of the midterm period under review were as follows. The building age is the period from the date stated as the date of
new construction on the registration or registration record to the last day of June 2017:
Total annual rent
Acquisition priceInvestment ratio
Building age(Note 2)
(Note 3)(Note 4)
(JPY1M)(JPY1M)(%)
More than 5 years,

6,004

84,302

29.4

4,264

56,204

19.6

More than 20 years

13,138146,295

51.0

Total

23,407

286,801

100.0

less than 10 years (inclusive)
More than 10 years,
less than 20 years (inclusive)

－

62 －

e. Diversification by remaining contract term
The total annual rent and the ratio of the total annual rent of the concerned properties to the total annual rent of all assets
held at the end of the midterm period under review by the remaining contract term of the assets held at the end of themidterm period under review were as follows, where the remaining contract term is the period from the last day of June2017 to the lease contract expiration date:
Total annual rent
Remaining contract term
(Note 2)
(JPY1M)
Less than 5 years (inclusive)
More than 5 years,
less than 10 years (inclusive)
More than 10 years,
less than 20 years (inclusive)
Total

Ratio of total annual rent
to total(%)

16,392

70.0

3,400

14.5

3,614

15.4

23,407100.0

f. Diversification by rent type
The total annual rent and the ratio of the total annual rent of the concerned properties to the total annual rent of all assets
held at the end of the midterm period under review by the rent type of the assets held at the end of the midterm period
under review were as follows, where fixed rent refers to fixed rent contracts and variable rent, etc. refers to variable rent
contracts and management contracts:
Rent type

Total annual rent
(Note 2)
(JPY1M)

Ratio of total annual rent
to total(%)

Fixed rent

12,523

53.5

Variable rent, etc.

10,884

46.5

Total

23,407100.0(Note 1)
(Note 2)

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
“Total annual rent” is the amount of (i) the amount arrived at when monthly fixed rent (rent of the building itself only, excludingcommon 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 midterm period under review is multiplied by 12, plus (ii) revenue sharing, variable rent or income
from management contracts.
In addition, the assumptions of the total annual rent of the hotels with revenue sharing, with variable rent or operated under amanagement contract structure are as follows:

The Nine HMJ Hotels

The amount of (i) the variable rent actually generated from January 1, 2017 to June 30, 2017 and thevariable rent calculated based on forecast GOP from July 1, 2017 to December 31, 2017, plus (ii) theamount arrived at when the monthly fixed rent (including non-hotel tenant(s)) at the end of themidterm period under review is multiplied by 12.

The Six Accor Hotels

The amount of (i) the income from management contracts or variable rent actually generated in thesix-month period from January 1, 2017 to June 30, 2017 and the total amount of the income frommanagement contracts or variable rent calculated based on forecast GOP from July 1, 2017 to
December 31, 2017 for the hotel portion, plus (ii) the amount arrived at when the monthly rent
income for retail or other tenant(s) at the end of the midterm period under review is multiplied by 12.

The Six the b Hotels

The amount of (i) the variable rent actually generated from January 1, 2017 to June 30, 2017 and thevariable rent calculated based on forecast GOP from July 1, 2017 to December 31, 2017, plus (ii) theamount arrived at when the monthly fixed rent (including non-hotel tenant(s)) at the end of themidterm period under review is multiplied by 12.

Hotel Vista Kamata Tokyo
Hilton Tokyo Bay

The amount of (i) the total amount of the variable rent calculated based on forecast sales fromJanuary 1, 2017 to December 31, 2017, plus (ii) the amount arrived at when the monthly fixed rent at
the end of the midterm period under review is multiplied by 12.

Chisun Inn Kamata

The amount of the variable rent actually generated in the six-month period from January 1, 2017 toJune 30, 2017 and the total amount of the variable rent calculated based on forecast GOP from July
1, 2017 to December 31, 2017.

Smile Hotel Nihombashi Mitsukoshimae The amount of (i) the variable rent actually generated in the six-month period from January 1, 2017
Hotel Keihan Universal City
to June 30, 2017, plus (ii) the amount arrived at when the monthly fixed rent (including non-hotel
Hotel Sunroute Shinbashi
tenant(s)) at the end of the midterm period under review is multiplied by 12.
Hilton Nagoya

The amount of (i) the variable rent actually generated in the six-month period from January 1, 2017
to June 30, 2017 and the variable rent calculated based on forecast sales from July 1, 2017 to
December 31, 2017 for the hotel portion, plus (ii) the amount arrived at when the monthly fixed rent

－

63 －

for retail or other tenant(s) at the end of the midterm period under review is multiplied by 12.

(Note 3)(Note 4)(Note 5)For details of the rent of the hotels with revenue sharing, with variable rent or operated under a management contract structure, pleaserefer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract or revenue sharing”
on page 65.
“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 forthe properties that have been accepted through Merger.
“Investment ratio” is the ratio of total acquisition price of the assets held at the end of the midterm period under review that are of therespective type to the total of acquisition price of all assets held at the end of the midterm period under review, rounded off to one
decimal place.
Tokyo means Tokyo metropolitan area. Kanto (excluding Tokyo) means Kanagawa, Chiba, Saitama, Ibaraki, Gunma, Tochigi and
Yamanashi prefectures. Chubu means Aichi, Mie, Shizuoka, Nagano, Gifu, Niigata, Toyama, Ishikawa and Fukui prefectures. Kansai
means Kyoto, Osaka, Shiga, Hyogo, Nara and Wakayama prefectures. Chugoku means Hiroshima, Okayama, Tottori, Yamaguchi and
Shimane prefectures. Kyushu (excluding Okinawa) means Fukuoka, Nagasaki, Miyazaki, Kumamoto, Saga, Oita and Kagoshima
prefectures. Okinawa means Okinawa prefecture.

－

64 －

D. Overview of the hotel business(1) Rent structures of hotels with variable rent, management contract or revenue sharing
Property
No.

The
Nine
HMJ
HotelsThe Six
Accor
HotelsThe Six
the b
HotelsOther
hotelswithvariablerentorrevenuesharing

Name

Rent type

Method of calculating variable rent and income from management contracts

Variable/Fixed

When total GOP of the five HMJ hotels exceeds GOP base amount(set at ¥3,351 million / year), the amount arrived at when the amountexceeding GOP base amount is multiplied by 85.0%.
GOP base amount is set individually for each hotel for such purposes as
payment of variable rent from each hotel. The breakdown of GOP baseamount is presented below (Note 1).

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel tokyo bay

3Namba Oriental Hotel

4

Hotel Nikko Alivila

5

Oriental Hotel Hiroshima

43

Okinawa Marriott Resort & Spa

Variable/Fixed44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Grand Hiroshima Hotel)

Variable/Fixed(Note 2)46

Hotel Centraza Hakata

Variable/Fixed

47

Holiday Inn Osaka Namba

Variable/Fixed

6

ibis Tokyo Shinjuku

32

ibis Styles Kyoto Station

33

ibis Styles Sapporo

34

Mercure Sapporo

35

Mercure Okinawa Naha

42

Mercure Yokosuka

12

the b suidobashi

36

the b akasaka-mitsuke

37

the b ikebukuro38

the b ochanomizu

39

the b hachioji

40

the b hakata

22

When hotel GOP exceeds GOP base amount (set at ¥700 million / year),
the amount arrived at when the amount exceeding GOP base amount ismultiplied by 90.0%
When hotel GOP exceeds GOP base amount (set at ¥468 million / year),
the amount arrived at when the amount exceeding GOP base amount ismultiplied by 82.5%
When hotel GOP exceeds GOP base amount (set at ¥425 million / year),
the amount arrived at when the amount exceeding GOP base amount ismultiplied by 90.0%
When hotel GOP exceeds GOP base amount (set at ¥650 million / year),
the amount arrived at when the amount exceeding GOP base amount ismultiplied by 92.5%
Amount equivalent to GOP

Management
contract(Note 3)

Amount equivalent to GOP
Amount equivalent to GOP
Amount equivalent to GOP
Amount equivalent to GOP

VariableAmount linked to GOP

Variable/Fixed

Amount linked to GOP (Note 4)

Smile Hotel Nihombashi Mitsukoshimae

Fixed +
Revenue sharing

25

Hotel Vista Kamata Tokyo

Fixed +
Revenue sharing

26

Chisun Inn Kamata

29

Hotel Keihan Universal City

30

Hotel Sunroute Shinbashi

31

Hilton Tokyo Bay

Amount that is a certain percentage of sales exceeding the threshold(Note 4)
When hotel total sales from January 1 to December 31 of every year
exceeds ¥270 million, the amount arrived at when the amount exceeding¥270 million is multiplied by 32.5%
Amount that is the monthly GOP multiplied by 85.0%(¥0 if the amount is below ¥0). (Note 5)
Amount that is a certain percentage of sales exceeding the threshold(Note 4)
Amount that is a certain percentage of sales exceeding the threshold(Note 4)
Amount that is a certain percentage of sales exceeding the threshold(Note 4)49
(Note 1)

Hilton Nagoya

Variable

Variable rents linked to hotel sales, etc. (Note 4)

Annual GOP base amount

Kobe Meriken Park Oriental Hotel¥599,900 thousand

Oriental Hotel tokyo bay¥693,200 thousand

Namba Oriental Hotel¥832,200 thousand

Hotel Nikko Alivila¥995,700 thousand

Oriental Hotel Hiroshima¥230,000 thousand

Total(Note 4)(Note 5)

Fixed +
Revenue sharing
Fixed +
Revenue sharing
Fixed +
Revenue sharing

Breakdown of the GOP base amount set individually for the five HMJ hotels

Hotel name(Note 2)
(Note 3)

Variable¥3,351,000 thousand

The indicated figures are for Sheraton Grand Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA.
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 hotel business(operation) by the operator and, at the same time, pays a management fee to the operator. This hotel revenue achieved is recognized as “real estate
operating revenue through management contract” and is equivalent to the rent that is the real estate operating revenue under the leasing structure.
The detailed content of the contract is not disclosed as consent on disclosure has not been obtained from the lessee.
The fixed-term building lease agreement for Chisun Inn Kamata was concluded on May 17, 2017. The calculation of variable rent was changed on July 1,2017 to amount arrived at when the amount exceeding GOP base amount is multiplied by 86.0% every month (¥0 if the amount is below ¥0).

－

65 －

(2) Major indicators of the hotel business
The following tables indicate the figures related to the hotel business of the nine HMJ hotels, the six Accor hotels and the six
the b hotels for the operating period from January 1, 2017 through June 30, 2017, based on the data provided by the hotel
lessees etc. Furthermore, while these indicators of the hotels are among the indicators that show the operating status of therooms departments, they do not necessarily represent the operating revenue and the ability to bear rent, etc. of the respective
hotels, as the daily rates and profit margins, etc. of the respective rooms available for sale are not uniform, among otherreasons. As such, the indicators are no more than the reference figures.
(a) The Nine HMJ Hotels
Kobe
Meriken Park
Oriental Hotel
Ratio to
total
sales
(%)

Oriental Hoteltokyo bay

Namba
Oriental Hotel

Ratio to
total
sales
(%)

Hotel Nikko
AlivilaRatio to
total
sales
(%)

Oriental Hotel
Hiroshima

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

The Five
HMJ Hotels
Total/Average
Ratio to
total
sales
(%)

Occupancy rate

82.4%

－

98.7%

－

94.8%

－

88.3%

－

81.9%

－

90.4%

－

ADR (Note 1)

15,443－

18,491－

19,285－

20,811

－

9,510

－

17,539－

RevPAR (Note 2)

12,718－18,247－

18,276－

18,385

－

7,789

－

15,854－

Total sales

2,431

100.0

3,319

100.0

1,394

100.0

2,568

100.0

993

100.0

10,706

100.0

810

33.3

1,833

55.2

940

67.4

1,455

56.7

352

35.4

5,389

50.3

1,485

61.1

1,251

37.7

61

4.4

891

34.7

610

61.4

4,298

40.1

Tenant department

30

1.2

122

3.7

373

26.7

1

0.0

11

1.1

537

5.0

Other departments (Note 3)

106

4.4

114

3.4

20

1.4

221

8.6

20

2.0

481

4.5

437

18.0

891

26.8

864

62.0

706

27.5

167

16.8

3,064

28.6

Rooms department
Food & beverage department

GOP

Okinawa Marriott
Resort & Spa

Sheraton Grand
Hiroshima Hotel(Note 4)

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Hotel Centraza
HakataHoliday Inn
Osaka Namba

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

The Nine
HMJ Hotels
Total/Average(Note 5)
Ratio to
total
sales
(%)

Occupancy rate

87.0%

－

87.0%

－

93.7%

－

96.2%

－

90.5%

－

ADR (Note 1)

15,920－17,069－11,153－

18,127－

16,915－

RevPAR (Note 2)

13,854－

14,844－

10,449－17,432－

15,315－

Total sales

1,692

100.0

1,601

100.0

1,266

100.0

1,011

100.0

16,276

100.0

Rooms department

999

59.0

703

43.9

404

32.0

991

98.0

8,487

52.1

Food & beverage department

494

29.2

859

53.6

738

58.3

－

－

6,389

39.3

Tenant department

26

1.6

－

－

114

9.0

14

1.4

692

4.3

Other departments (Note 3)

173

10.2

39

2.4

8

0.7

6

0.6

708

4.3

431

25.5

466

29.1

476

37.6

664

65.7

5,101

31.3

GOP
(Note 1)

ADR: Represents average daily rate, which is calculated by dividing total rooms revenue for a certain period (excluding service charges) by the total number ofrooms sold during the period. Holiday Inn Osaka Namba, the six Accor hotels and the six the b hotels do not request service charges. The same shall apply hereinafter.

(Note 2)

RevPAR: Represents revenue per available room, which is calculated by dividing total rooms revenue for a certain period (excluding service charges) by the total
number of rooms available for sale during the period. Revenue per available room equals the product of ADR and occupancy rate. 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 nine HMJ hotels, figures are calculated by the Asset Management Company as reference since no figures have been provided by the hotel
operators or hotel lessees.

(Note 6)The occupancy rate is rounded off to one decimal place, while ADR and RevPAR are rounded off to single units. Sales and GOP are rounded 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. The same shall apply hereinafter.

－

66 －

(b) The Six Accor Hotels
ibisTokyo Shinjuku

ibis Styles
Kyoto Station

Ratio to
total
sales
(%)

ibis Styles
SapporoRatio to
total
sales
(%)

MercureSapporoRatio to
total
sales
(%)

MercureOkinawa Naha

Ratio to
total
sales
(%)

MercureYokosuka

Ratio to
total
sales
(%)

Total/Average(Note)

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Occupancy rate

70.1%

-

95.8%

-

91.7%

-

81.8%

-

81.8%

-

87.1%

-

84.8%

-

ADR

12,736-

11,462

-

9,391

-

11,987-

11,332-

12,579-11,383-

RevPAR

8,924-

10,981

-

8,613

-

9,805

-

9,267

-

10,961

-

9,652

-

Total sales

365

100.0

482

100.0

548

100.0

596

100.0

532

100.0

551

100.0

3,074

100.0

Rooms
department

333

91.2

427

88.7

433

79.1

506

84.8

436

82.0

317

57.6

2,453

79.8

Food &
beveragedepartment

26

7.0

50

10.4

102

18.7

85

14.3

82

15.3

225

40.8

569

18.5

Other
departments

7

1.8

4

0.9

12

2.2

5

0.9

14

2.7

9

1.6

52

1.7

178

48.7

262

54.3

262

47.9

250

42.0

239

45.0

189

34.3

1,380

44.9

GOP
(Note)For Total/Average, figures are calculated by JHR since no figures have been provided by the hotel operators or hotel lessees.

(c) The Six the b Hotels
the bsuidobashi

the bakasaka-mitsuke

Ratio to
total
sales
(%)

the b
ikebukuro

Ratio to
total
sales
(%)

the b
ochanomizu

Ratio to
total
sales
(%)

the b
hachioji

Ratio to
total
sales
(%)

the b
hakataRatio to
total
sales
(%)

Total/Average(Note)

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Occupancy rate

90.1%

-

86.2%

-

88.8%

-

93.0%

-

88.0%

-

91.1%

-

89.2%

-

ADR

10,705-

11,203-

10,774-

10,686

-

7,054

-

8,374

-

9,450

-

RevPAR

9,647

-

9,660

-

9,565

-

9,937

-

6,210

-

7,631

-

8,433

-

Total sales

173

100.0

215

100.0

306

100.0

130

100.0

266

100.0

244

100.0

1,333

100.0

Rooms
department

173

99.7

213

99.3

303

99.1

130

99.7

220

82.8

242

99.2

1,281

96.0

Food &
beveragedepartment

-

-

-

-

-

-

-

-

44

16.5

-

-

44

3.3

Other
departments

1

0.3

2

0.7

3

0.9

0

0.3

2

0.7

2

0.8

9

0.7

80

46.2

116

54.1

163

53.3

58

44.3

88

33.0

123

50.6

628

47.1

GOP
(Note)For Total/Average, figures are calculated by JHR since no figures have been provided by the hotel lessees.

－

67 －

E. Status of capital expenditures
a. Planned capital expenditures (Note)
The following table shows major estimated capital expenditures items for renovation work during the fiscal year planned asof the end of the midterm period under review for real estate properties under management by JHR. Capital expenditures are
expected to total ¥2,259 million for the second half and, in aggregate with the capital expenditures for the first half, capital
expenditures are expected to total ¥3,144 million for the full year.
Estimated construction costs(JPY1M)
Name of property, etc.
PurposeScheduled period
Payment Total(Location)
Total
for the amountamountfirst half paid
Kobe Meriken Park Oriental Hotel(Kobe-shi, Hyogo)

Renewal ofdisaster prevention switchboard

From July 2017
to December 2017

34

－

－

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

Relocation of bridal salon

From April 2017
to December 2017

95

－

－

Oriental Hotel tokyo bay

Renewal of

From January 2017

(Urayasu-shi, Chiba)

automatic fire alarm equipment

50

－

－

136

－

－

310

1

1

69

－

－

696

1

1

ibis Tokyo Shinjuku(Shinjuku-ku, Tokyo)
ibis Tokyo Shinjuku(Shinjuku-ku, Tokyo)
Hilton Tokyo Bay(Urayasu-shi, Chiba)

to July 2017
From May 2017

Replacement of piping

to August 2017

Replacement ofinterior fittings and furniture in guest
rooms on the 3rd through 10th floors
Renewal of disaster prevention facilities

From May 2017
to August 2017
From May 2017
to July 2017

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 or not the renovation work will be performed may change.

b. Capital expenditures during the period (Note)
For real estate properties under management by JHR, major construction work conducted during the midterm period underreview that represents capital expenditures is as below. Capital expenditures for the midterm period under review totaled¥885 million, and repair expenses that were accounted for as expense in the period totaled ¥18 million. In aggregate, ¥903
million of construction work was carried out.
Name of property, etc.
Construction costs
Purpose
Period(Location)(JPY1M)
Kobe Meriken Park Oriental Hotel

Renewal of

From May 2017

(Kobe-shi, Hyogo)

disaster prevention switchboard

Namba Oriental Hotel

Renewal of guest rooms on the 7th floor, From February 2017

(Osaka-shi, Osaka)

etc.

to March 2017

Hakone Setsugetsuka(Ashigarashimo-gun, Kanagawa)

Replacement of air-conditioning
facilities within the building

From June 2017
to June 2017

to June 2017

Total

10
77
99
187

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

－

68 －