This English translation is provided for information purposes only. If any discrepancy is identified between thistranslation and the Japanese original, the Japanese original shall prevail.
February 24, 2016

Financial Report for the Fiscal Year Ended December 31, 2015
(January 1, 2015 – December 31, 2015)
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 Securities Report: March 23, 2016
Scheduled date to start dividend payment: March 23, 2016
Preparation of supplementary material on financial report:
Schedule for presentation of financial results:

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

1. Status summary of operation and assets for the fiscal year ended December 31, 2015
(January 1, 2015 – December 31, 2015)(1) Operating results(Percentages show changes from the previous year)

Operating revenue
JPY1M%
17,34335.9
12,760
11.2

Fiscal year ended
December 31, 2015
December 31, 2014

Net income per unit

Operating income
JPY1M%
10,988
45.6
7,545
40.6

Ordinary income tototal assets

Return on equity (ROE)

JPY
3,036
2,159

Fiscal year ended
December 31, 2015
December 31, 2014

Ordinary income
JPY1M
%
9,295
60.9
5,776
54.4

%
8.1
6.1

Net income
JPY1M
9,294
5,774

%
61.0
78.6

Ordinary income tooperating revenue

%
4.3
3.2

%
53.6
45.3

(Note 1) Net income per unit is calculated based on the period-average number of investment units issued.
(Note 2) Net income for the fiscal year ended December 31, 2015 includes gain on sale of real estate properties (¥305 million).

(2) Cash distributions

Fiscal year ended
December 31, 2015
December 31, 2014

Dividend per unit
(Excess of earnings
exclusive)

Total dividends(Excess of earnings
exclusive)

Dividend per unit
resulting fromexcess of earnings

Total dividends
fromexcess of earnings

JPY
2,975
2,155

JPY1M
9,354
6,015

JPY
0
0

JPY1M
0
0

Payout ratio
%
100.6
104.2

Dividend to
net assets
%
7.7
6.1

(Note 1) The source of dividends for the fiscal year ended December 31, 2015 is calculated by adding appropriation for dividends (¥60 million) tounappropriated retained earnings. For details of the appropriation for dividends, please refer to “<Reference Materials 4> Dividend per unit andappropriation for dividends” on page 23.
(Note 2) The source of dividends for the fiscal year ended December 31, 2014 is calculated by adding appropriation for dividends (¥240 million) tounappropriated retained earnings. For details of the appropriation for dividends, please refer to “<Reference Materials 4> Dividend per unit andappropriation for dividends” on page 23.
(Note 3) Payout ratio is calculated using the following formula, rounded off to one decimal place.
Total dividends (total dividends from excess of earnings exclusive) ÷ Net income × 100

－

1

－

(3) Financial position
Total assets
JPY1M
240,356
188,091

Fiscal year ended
December 31, 2015
December 31, 2014

Net assets

Equity ratio

JPY1M
129,914100,342

%
54.1
53.3

Net assets per unit
JPY
41,31835,948(Note) Net assets per unit are calculated based on the total number of investment units issued and outstanding at the end of the fiscal year.

(4) Cash flows

Fiscal year ended
December 31, 2015
December 31, 2014

Cash flows fromoperating activities
JPY1M
15,862
8,353

Cash flows frominvesting activities
JPY1M(58,598)(17,828)

Cash flows from
Cash and cash equivalents
financing activities
at end of fiscal year
JPY1M
JPY1M
42,00913,698
11,347
14,424

2. Operating forecast for the fiscal year ending December 31, 2016
(January 1, 2016 – December 31, 2016)(Percentages show changes from the previous year)
Operating revenue
JPY1M

Midterm
Full year

9,136
20,836

%
26.2
20.1

Operating income
JPY1M

5,364
12,645

%
26.0
15.1

Ordinary income

Net income

JPY1M

JPY1M

%
28.9
17.3

4,477
10,904

4,477
10,904

Dividend per unit
(Excess of earnings
exclusive)
%
29.0
17.3

JPY
－
3,318

Dividend per unit
resulting fromexcess of earnings
JPY－
0(Reference) Estimated net income per unit for the fiscal year ending December 31, 2016 (full year) ¥3,292(Calculated based on the estimate of period-average number of investment units of 3,312,096.)(Note) Reversal of reserve for dividends in the amount of ¥119 million is planned to be the source of dividend payment.

* Other(1) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements 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 prior period financial statements after error corrections: No change(2) Total number of investment units issued and outstanding(a) Total number of investment units issued and outstanding at the end of the fiscal year (including investment units owned by
Japan Hotel REIT Investment Corporation (hereinafter referred to as “JHR”))
As of December 31, 2015
3,144,227 units
As of December 31, 2014(b) Number of JHR’s own investment units held at the end of the fiscal year
As of December 31, 2015
As of December 31, 2014

2,791,281 units
0 units
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 42.

* Status of audit procedures
At the time of disclosure of this financial report, audit procedures for the 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 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 amount by
these forecasts. For the assumptions of the operating forecast and notes for making reference to the assumptions of the operating
forecast, please refer to “2. Investment policies and operating results; (2) Operating results; (B) Outlook for the next fiscal year” onpage 6 and “Assumptions of the operating forecast for the midterm and full year of the fiscal year ending December 31, 2016 (17thperiod)” on page 11.

－

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 20, 2015) and Securities Registration Statement (submitted on January 4, 2016).

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 20, 2015) and Securities Registration Statement (submitted
on January 4, 2016).

(2) Operating results(A) Overview of the fiscal 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 the social infrastructure and profitability of hotels, JHR primarily
invests in real estate related assets that are in themselves real estate which are wholly or partially used as hotels or realestate equivalents of such real estate or that are backed by such real estate or real estate equivalents (hereinafter referred toas “Real Estate for Hotels, etc.”).
JHR, the former Nippon Hotel Fund Investment Corporation, merged with the 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. Over approximately a little less than four
years since the merger through the end of the 16th fiscal period, JHR has carried out five public offerings for capitalincrease and continuously acquired hotels that are “competitive enough to attract domestic and inbound leisure demand”
and located in its “strategic investment target areas.”
As such, JHR has expanded the asset size by steadily implementing the growth strategy, having its portfolio grow to 36
properties with a combined acquisition price of ¥225,723 million as of the end of the fiscal period under review.
The number of JHR’s investment units issued and outstanding was 3,144,227 as of December 31, 2015.
(b) Investment performance
During the fiscal period under review, the Japanese economy continued to show a modest recovery trend, despite weakness
seen in some areas, partly due to the effect of the various measures implemented by the Abe administration to securely end
deflation and achieve both economic revitalization and fiscal soundness. Under such circumstances, the tourism market
was in an environment in which, on top of the leisure demand among the Japanese people remaining solid, the number ofoverseas (inbound) tourists visiting Japan, primarily from Asian countries, continued to increase thanks to the government’s
various measures aimed at making Japan a major tourism nation as well as the depreciation of the yen and other factors.
The number of such inbound tourists, which had surpassed 10 million for the first time in 2013, reached 13.4 million, up
around 30% over the figure, in 2014 and increased by 47.1% year-on-year to 19.7 million in 2015, coming close to 20
million annually that the Japanese government targeted at initially.
Given such a strong wind behind Japan’s tourism industry and hotel industry, many of the hotels owned by JHR achieved arise in operating performance, mainly in the rooms department, allowing us to feel again how strong the leisure demand
was both in and outside Japan. Also in the investment market for hotels, transactions of hotel properties remained briskwith an increase in the number of investors who anticipated future growth of such properties, keeping the market size
expanding. In such an environment, JHR issued new investment units through two public offerings in January and June2015 together with other fund procurement and acquired eight properties in total with a combined acquisition price of¥39,705 million. Moreover, in December 2015, JHR acquired ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima
Hotel), located a one-minute walk from Shinkansen Exit of JR Hiroshima Station, for an acquisition price of ¥17,320－

3－

million through new borrowing (¥9,000 million) and cash on hand. On the other hand, as part of its growth strategy andwith an intention to further enhance the quality of its portfolio through reshuffling of assets, JHR sold three properties in
October 2015 at prices surpassing the book values and appraisal values for a combined sale price of ¥4,890 million,
achieving a further enhancement of the quality of the portfolio.
Furthermore, in January 2016, JHR implemented capital increase through public offering, the sixth one since the merger, tocomplement a decrease in cash on hand, which is a decrease equivalent to the cash on hand used to fund the acquisition of
ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel). JHR also used the proceeds from the public offering to
newly acquire CANDEO HOTELS UENO-KOEN, located in the Ueno area in central Tokyo which benefits from anincrease in inbound tourism demand, for an acquisition price of ¥6,705 million. The acquisition has increased the portfolio
size to ¥232,428 million on an acquisition price basis.
Moreover, steadily implementing its growth strategy, JHR concluded a purchase and sale agreement as of February 18,
2016 regarding the acquisition of Hotel Centraza Hakata for an anticipated acquisition price of ¥7,197 million.
For its owned hotels, JHR endeavored to expand its earnings by continuously discussing with the hotel operators forincreasing revenue, after assessing the business environment and operation conditions at each hotel on a monthly basis. For
hotels with variable rent contracts including revenue sharing structures and management contracts, hotel earnings increased
against the backdrop of strong domestic and overseas leisure demand, which achieved an increase in JHR’s rent revenue.
Among fixed rent properties held, JHR rebranded Dormy Inn Suidobashi, for which the lease contract expired at the end ofJune 2015, to “the b suidobashi” and changed its rent structure, which had been fixed rent alone, to the one comprising
fixed rent as minimum guaranteed rent plus variable rent.
With respect to capital expenditures in portfolio properties, JHR invested in the renewal of its facilities in order to maintainthe value of its assets and carried out strategic refurbishment, etc. to increase profits at hotels with variable rent contracts,
etc.
With regard to status of operations of the five hotels (hereinafter referred to as the “five HMJ hotels”) (Note 1) which JHRleases to Hotel Management Japan Co., Ltd. (hereinafter referred to as “HMJ”) under variable rent contracts, they haveproduced a year-on-year increase both in sales and GOP (gross operating profit), led by the rooms department, during the
fiscal period under review. The rooms department achieved an increase in not only the guest room occupancy rate but also
the ADR (average daily rate), allowing us to feel how strong the leisure demand was. For further details regarding sales,
GOP and other management indicators for the five HMJ hotels, please refer to “<Reference Materials 2> <1> Sales and
GOP of the HMJ Group Hotels (Note 1)” on page 19 and “D. Overview of the hotel business; (2) Major indicators of thehotel business; (a) The HMJ Group Hotels” on page 67. Furthermore, as announced in the “Notice Concerning Revision of
Fixed-Term Lease Agreement” dated December 18, 2015, JHR negotiated with HMJ to modify the terms and conditions of
the fixed-term lease agreement with HMJ, as JHR believed that HMJ’s profitability would increase in accordance with ashift to independent hotel operations by HMJ. As a result, JHR and HMJ agreed that the variable rent ratio be changed from
81.5% to 85.0% effective January 1, 2016 while JHR shall return part of the security deposits to HMJ. This has made it
possible for JHR to obtain the enhanced performance of the hotels as its earnings.
Moreover, inbound guests and domestic leisure demand were successfully attracted by the six hotels (Note 2) for which
AAPC Japan K.K. (hereinafter referred to as “Accor”), a Japanese subsidiary of Accor Hotels headquartered in Paris,
France, serves as the operator (hereinafter referred to as the “six Accor hotels”). These hotels posted a year-on-yearincrease both in sales and GOP, mainly led by an increase in the ADR. For further details regarding sales, GOP and othermanagement indicators for the six Accor hotels, please refer to “<Reference Materials 2> <3> Sales and GOP of the Six
Accor Hotels” on page 21 and “D. Overview of the hotel business; (2) Major indicators of the hotel business; (b) The Six
Accor Hotels” on page 68.
Furthermore, efforts were made to attract inbound tourists at the six the b hotels (Note 3), which are leased to thesubsidiaries of the Ishin Hotels Group with a variable rent structure, and consequently a year-on-year increase wasachieved both in sales and GOP. For further details regarding sales, GOP and other management indicators for the six the bhotels, please refer to “<Reference Materials 2> <4> Sales and GOP of the Six the b Hotels” on page 22 and “D. Overview
of the hotel business; (2) Major indicators of the hotel business; (c) The Six the b Hotels” on page 68.
－

4－

As for further details regarding sales, GOP and other management indicators for Okinawa Marriott Resort & Spa and
ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) that JHR acquired in the fiscal period under review,please refer to “<Reference Materials 2> <1> Sales and GOP of the HMJ Group Hotels” on page 19 and “D. Overview ofthe hotel business; (2) Major indicators of the hotel business; (a) The HMJ Group Hotels” on page 67.
In addition, JHR not only increased the size of its asset portfolio by acquiring new properties, but also made steadyprogress in reducing real estate management costs, general and administrative expenses, and borrowing costs.
(Note 1)

(Note 2)
(Note 3)

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 HMJ group hotels represent the seven hotels comprising the five HMJ
hotels plus Okinawa Marriott Resort & Spa and Sheraton Hiroshima Hotel, which is the major facility of ACTIVE-INTER CITYHIROSHIMA.
Represents the six hotels, namely, ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, Mercure
Okinawa Naha and Mercure Yokosuka.
Represents the six hotels, namely, the five hotels comprising the b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji
and the b hakata (hereinafter referred to as “the five the b hotels”) plus the b suidobashi, which was rebranded from the former DormyInn Suidobashi on July 1, 2015.

(c) Funding
JHR acquired the five the b hotels by using the ¥15,651 million in total procured by issuing new investment units throughpublic offering in January 2015 and third-party allotment in February 2015, as well as the ¥1,000 million in short-termloans and ¥12,900 million in long-term loans borrowed in January 2015. JHR also used these funds to make early
repayment of ¥4,779 million in existing long-term loans. In March 2015, JHR procured ¥1,500 million in long-term loans
to partly fund the acquisition of Hotel Francs. Moreover, JHR acquired Mercure Yokosuka by using cash on hand in April
2015.
JHR also acquired Okinawa Marriott Resort & Spa by using the ¥10,793 million in total procured by issuing newinvestment units through public offering in June 2015 and third-party allotment in July 2015, as well as the ¥5,000 million
in short-term loans and ¥1,500 million in long-term loans borrowed in July 2015. In September 2015, JHR borrowed¥6,608 million in long-term loans to fund refinancing and early repayment of the borrowings that matured on the samemonth and November 2015.
In October 2015, JHR issued investment corporation bonds for retail investors, the first such issuance for JHR, totaling¥6,000 million to make early repayment of ¥6,000 million in existing loans. JHR also made early repayment of ¥4,000
million in long-term loans by using funds obtained from sale of the three properties comprising Daiwa Roynet Hotel Akita,
Hotel Sunroute Niigata and Comfort Hotel Shin-Yamaguchi.
Moreover, in December 2015, JHR procured ¥9,000 million in short-term loans to partly fund the acquisition of ACTIVEINTER CITY HIROSHIMA (Sheraton Hiroshima Hotel).
As a result of the above, as of the end of the fiscal period under review, interest-bearing debt totaled ¥102,772 million,
including short-term loans payable of ¥9,000 million, current portion of long-term loans payable of ¥11,393 million, longterm loans payable of ¥70,379 million, current portion of investment corporation bonds of ¥2,500 million and investment
corporation bonds of ¥9,500 million, and the ratio of interest-bearing debt to total assets at end of period (Note 4) stood at
42.8%.
Through a series of these funding measures, JHR was able to lower its funding costs and diversify its repayment period.
Furthermore, JHR concluded interest rate swap contracts to fix the interest on ¥16,716 million in total on loans on January
30, March 27, July 10 and September 17, 2015 in order to suppress the increase in interest payment resulting from futureinterest rate rises. These actions brought the fixed rate ratio (including the interest rate cap purchase portion) on JHR’s totalinterest-bearing debt to approximately 85%.
(Note 4)

Ratio of interest-bearing debt to total assets at end of year = Balance of interest-bearing debt at end of year ÷ Total assets at end of year

As of December 31, 2015, JHR’s issuer ratings were as follows.
As of October 29, 2015, Rating and Investment Information, Inc. (hereinafter referred to as “R&I”) changed the outlook of
JHR’s issuer rating from “stable” to “positive.” Moreover, as of November 26, 2015, Japan Credit Rating Agency, Ltd.
(hereinafter referred to as “JCR”) also changed its outlook of JHR’s long-term issuer rating from “stable” to “positive.”－5－

Rating agency

RatingOutlook

R&I

A−

Positive

JCR

A

Positive(d) Financial results
As a result of the abovementioned asset management, operating revenue, operating income and ordinary income were¥17,343 million, ¥10,988 million and ¥9,295 million, respectively, for the fiscal year under review (12-month period fromJanuary 1 to December 31, 2015). Net income was ¥9,294 million.
With regard to dividends, it was decided that ¥9,356 million, which was calculated by adding a reversal of reserve fordividends (appropriation for dividends) of ¥60 million to unappropriated retained earnings of ¥9,296 million, would all be
distributed except for fractions of less than one yen of dividend per unit. Consequently, the dividend per unit came to¥2,975.
Appropriation for dividends for the fiscal period under review is for the purpose of offsetting the financial costs associatedwith early repayment and losses on retirement of existing facilities incurred for the replacement of equipment.
For appropriation for dividends, please refer to “<Reference Materials 4> Dividend per unit and appropriation for
dividends” on page 23.
(B) Outlook for the next fiscal year(a) Investment policies and issues to be addressed
In 2016, the Japanese economy is anticipated to show a recovery bolstered by strong private sector demand, with theemployment and income environments continuing to improve and the virtuous cycle of the economy making further
progress as well as the terms of trade improving moderately, partly due to the positive effect of the “Urgent Policies to
Realize a Society in Which All Citizens are Dynamically Engaged” implemented by the government on November 26,
2015 and other measures. While having such anticipation, attention must be paid, however, to the downside swing of theemerging economies including China, market price trends of crude oil and other commodities and geopolitical risks, among
other factors, amid the U.S. monetary policy being increasingly normalized. Moreover, in the environment surrounding the
tourism industry, it is expected that JHR will benefit from a further increase in the number of domestic tourists and inboundtourists thanks to an increase in individual income through the economic growth in the Asian areas, visa waiver andrelaxing visa issuance requirements, enhanced infrastructures including expansion in the arrival and departure slot ofinternational flights, among other factors, on top of the leisure demand among the Japanese people remaining solid.
Under such circumstances, JHR intends to manage assets based on the approach described below aiming to make investingin JHR more appealing based on its balanced mix of stability centered on fixed rent revenue and potential upside derived
from variable rent, etc.
Internal growth
JHR will work to boost sales and GOP of hotels operated under variable rent contracts, which are the HMJ group hotels
that comprise the five HMJ hotels plus Okinawa Marriott Resort & Spa (newly acquired in July 2015) and ACTIVEINTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) (newly acquired in December 2015), and the six the b hotels thatcomprise the five the b hotels plus the b suidobashi, which was rebranded from Dormy Inn Suidobashi on July 1, 2015, as
well as of the six Accor hotels that are mainly operated under a management contract structure, with an aim to maximize
variable rent and income from management contracts. To achieve this goal, JHR will request each hotel, its operations
support company and its operator to implement marketing initiatives to attract wider range of demand and measures tomaintain and increase room rates. JHR will also work with related parties to move the business focus from competition
based on price to competition based on value, aiming to create facilities and services that become prominent in the market.
For hotels with only fixed rent contracts, JHR will increase its efforts to monitor operating conditions and, by paying
careful attention to each tenant’s ability to bear the rent costs, conduct negotiations with the hotels at which the ability tobear rent costs has been enhanced through better performances so that the improvement in hotel earnings would lead to anincrease in JHR’s operating revenue, such as revising rents upward and introducing revenue sharing structures.
－6－In addition, JHR will carry out an ongoing program of facility maintenance and improvement to ensure each hotel becomesprominent in the market and to maintain and increase the value of its assets.
External growth
In terms of external growth strategy, JHR will keep focus on investing in hotels with prospects for attracting domestic andinbound leisure demand over the medium to long term, in other words, highly competitive hotels located in appealing or
fashionable areas, as JHR has done to date. 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 buildings and facilities(infrastructure) and the capabilities of the hotel tenant and operator (services).
However, competition over acquisition has become fierce in the investment market for hotels in accordance with anincrease in the number of investors, with transaction yields showing a downward trend. Under such circumstances, JHR
will work to acquire properties and make them prominent in the market, by taking advantage of its strength as a REIT
specializing in hotel properties of being able to extensively collect transaction information of Real Estate for Hotels, etc.
and make selective approaches.
Specifically, JHR will utilize its pipelines as a major player in the investment market for hotels, ability to collectinformation on operations of hotels in general, proposal and implementation of a variety of rent structures including themanagement contract structure, and excellent networks with major hotel operators. By doing so, JHR will acquire
properties while maintaining its superiority in the investment market for hotels.
Following such policy, in the fiscal year ended December 31, 2015, JHR acquired seven properties (the five the b hotels,
Hotel Francs and Mercure Yokosuka) located mainly in Tokyo and the bay area that are deemed to enjoy the largest
benefits from an increase in inbound tourists. JHR also acquired a large resort hotel with the name of Marriot, a world’s top
international brand, in the Okinawa area, which is expected to show the highest growth among JHR’s strategic investment
target areas. Moreover, JHR acquired a multi-use facility centering on a relatively new, full-service hotel carrying the nameof Sheraton, another well-known international brand, featuring a good location with a one-minute walk from JR Hiroshima
Station. Of these properties, a lease structure that combines fixed rents and variable rents has been employed by the sevenproperties excluding Hotel Francs that is with fixed rent contract only and Mercure Yokosuka that is with variable rent
contract only, in order to pursue upside potential while working to secure stability. Going forward, JHR will continuously
acquire properties by taking advantage of these strengths that are peculiar to a REIT specialized in hotels, including theability to incorporate a variety of rent structures, hotel renovations and rebranding arrangements.
Finance strategy
JHR seeks to maintain and enhance the relationships of trust with financial institutions with which it does business, whileworking to ensure financial stability and strength by increasingly diversifying the means of financing. It aims to conduct
financial operations by keeping the ratio of interest-bearing debt to total assets at no larger than 50% for the time being. In
addition, when seeking new borrowings for property acquisitions or refinancing existing debt, JHR will work to reinforce
its existing relationships with multiple banks while seeking to spread out the maturity dates of its debt and considering thebalance with borrowing costs.
Moreover, JHR will investigate extending the maturity dates and managing interest rate risks while discerning theconditions of the market for interest rate.

－

7

－

(b) Significant subsequent events
1. Acquisition of asset
On February 1, 2016, JHR acquired the following asset.
Property nameCANDEO HOTELS UENO-KOEN

Asset category

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

Asset type

Hotel

Address

1-2-13 Negishi, Taito-ku, Tokyo

Acquisition dateFebruary 1, 2016

SellerGK Ueno Parkside

Acquisition price (Note)¥6,705 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

2. Resolution on acquisition of asset
On February 18, 2016, JHR concluded a purchase and sale agreement regarding acquisition of the following asset.
Property name

Hotel Centraza Hakata

Asset category

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

Asset type

Hotel

Address

4-23 Hakata-eki Chuogai, Hakata-ku, Fukuoka-shi, Fukuoka

Scheduled acquisition date

April 1, 2016

Planned seller

The seller is not disclosed as consent on disclosure has not been obtained from the seller.
There are no capital, human or business relationships to be noted between JHR or the AssetManagement Company and the seller. In addition, the seller does not have any special
interest relationship with either JHR or the Asset Management Company.

Anticipated acquisition price(Note)¥7,197 million(Note) The anticipated acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

－

8

－

3. Resolution on borrowing of funds
On January 4, 2016, JHR resolved on new borrowings of ¥2,000 million as follows in order to partly fund the acquisition of thereal estate beneficial interest in trust of CANDEO HOTELS UENO-KOEN and movable assets attached thereon as describedabove in “1. Acquisition of asset.”
LenderFinancial syndicate arranged by Sumitomo Mitsui Banking Corporation

Planned amount of the loan

¥2,000 million

Interest rate

To be determined

Scheduled date of borrowing

February 29, 2016

Method of principal repayment

To be determined

Maturity date

To be determined

Collateral

Unsecured/Unguaranteed

On February 18, 2016, JHR resolved on new borrowings of ¥7,000 million as follows in order to partly fund the acquisition of
the real estate beneficial interest in trust of Hotel Centraza Hakata and movable assets attached thereon as described above in “2.
Resolution on acquisition of asset.”
LenderFinancial syndicate arranged by Sumitomo Mitsui Banking Corporation

Planned amount of the loan

¥7,000 million

Interest rate

To be determined

Scheduled date of borrowing

April 1, 2016

Method of principal repayment

To be determined

Scheduled maturity date

March 31, 2017

Collateral

Unsecured/Unguaranteed

4. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on January 4, 2016 and January 13, 2016.
Payment for the new investment units was completed on January 20, 2016 and February 17, 2016, and the investment units were
issued under the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥100,088,808,209, with thenumber of investment units issued and outstanding totaling 3,321,907 units.
(a) Issuance of new investment units (public offering)Number of investment units issued:
170,000 units
Issue price:¥85,020 per unit
Total issue price:¥14,453,400,000
Paid-in amount (issue value):¥82,273 per unit
Total paid-in amount (total issue value):¥13,986,410,000
Payment date:
January 20, 2016(b) Issuance of new investment units (third-party allotment)
Number of investment units issued:
7,680 units
Paid-in amount (issue value):¥82,273 per unit
Total paid-in amount (total issue value):¥631,856,640
Payment date:February 17, 2016
Allottee:
SMBC Nikko Securities Inc.
(c) Use of funds
JHR allocated the proceeds obtained from the public offering and the third-party allotment to cash on hand in order tocomplement part of a decrease in cash on hand, which is a decrease that occurred when JHR had used cash on hand to
partly fund the acquisition of ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) (including expenses
for acquisition) that it acquired on December 18, 2015. JHR also used the said proceeds to partly fund the acquisitionof CANDEO HOTELS UENO-KOEN as described above in “1. Acquisition of asset.”

－

9

－

(c) Operating forecast
The following is the operating forecast for the midterm of the fiscal year ending December 31, 2016 and the full year of the
fiscal year ending December 31, 2016. For the assumptions of the operating forecast, please refer to “Assumptions of theoperating forecast for the midterm and full year of the fiscal year ending December 31, 2016 (17th period)” on page 11.
In addition, the dividend per unit based on the annualized effect of the acquisition of CANDEO HOTELS UENO-KOEN,
which was acquired on February 1, 2016, and Hotel Centraza Hakata, which is to be acquired on April 1, 2016, is assumed
to be ¥3,326. For the annualized effect of the acquisition of the two properties above, 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 theannualized effect, please refer to “<Reference Materials 3> Assumptions of the forecast of the annualized effect” on page
23.
Midterm of the fiscal year ending December 31, 2016 (17th period)
Operating revenue
Operating income
Ordinary income
Net income
Dividend per unit
Dividend per unit resulting from excess of earnings¥9,136 million¥5,364 million¥4,477 million¥4,477 million¥－¥－

Full year of the fiscal year ending December 31, 2016 (17th period)
Operating revenue¥20,836 million
Operating income¥12,645 million
Ordinary income¥10,904 million
Net income¥10,904 million
Dividend per unit
¥3,318Dividend per unit resulting from excess of earnings¥0(Note) The forecast figures above are the current forecasts calculated based on certain assumptions. As such, actual operating revenue,
operating income, ordinary income, net income, dividend per unit and dividend per unit resulting from excess of earnings mayvary due to changes in the circumstances. Furthermore, the forecasts are not intended to guarantee any dividend amount.

－

10

－

Assumptions of the operating forecast for the midterm and full year of the fiscal year ending December 31, 2016 (17th period)
Item
Calculation
periodAssumptions
・Midterm: January 1, 2016 through June 30, 2016 (182 days)
・Full year: January 1, 2016 through December 31, 2016 (366 days)
・The 37 properties owned by JHR as of today, plus Hotel Centraza Hakata that is scheduled to be acquired on April

Assetsundermanagement

1, 2016, to total 38 properties is assumed.
・In addition, it is assumed that there will be no change (acquisition or disposition, etc.) in assets under management
other than the above through the end of the fiscal year ending December 31, 2016 (17th period). The actual
number may fluctuate, though, depending on the changes in assets that may take place.
・Operating revenue is calculated based on the effective lease contracts, etc. as of today and in consideration of hotel
competitiveness and market environment, etc.
・Rents of the main hotels are calculated based on the following assumptions.
(1) The Five HMJ hotels
The assumptions of the fixed rent and variable rent for the five HMJ hotels are as follows.
Annual rent (¥6,797 million) = Fixed rent (¥3,221 million / year) + Variable rent (*1)
Variable rent = [(a) Total GOP of the five HMJ hotels − (b) GOP base amount] × 85.0%
The five HMJ hotels for the fiscal year ending December 31, 2016 (17th period)(millions of yen)

Operatingrevenue

Total GOP of the five HMJ hotels(a)

GOP base amount(b)

Variable rent((a) − (b)) × 85.0%

Midterm

2,784

1,675

942

Full year

7,558

3,351

3,576

(*1) Concerning a fixed-term lease agreement on the five HMJ hotels, JHR concluded an agreement to change thevariable rent ratio from 81.5% to 85.0% effective as of January 1, 2016. The variable rent when calculated
based on the past variable rent ratio of 81.5% is ¥3,429 million, and the amount of increase in variable rent
as a result of the revision is ¥147 million.
(*2) For the sales and GOP of the five HMJ hotels and other comparisons, please refer to “<Reference Materials
2> <1> Sales and GOP of the HMJ Group Hotels.”(2) Okinawa Marriott Resort & Spa
The fixed and variable rent of Okinawa Marriott Resort & Spa are calculated as follows.
Annual rent (¥1,101 million) = Fixed rent (¥550 million / year) + Variable rent
Variable rent = [(a) Hotel GOP − (b) GOP base amount] × 90.0%(millions of yen)
Hotel GOP(a)

GOP base amount(b)

Variable rent((a) − (b)) × 90.0%

Midterm

335

350

－

Full year

1,312

700

551

(*)

For the sales and GOP of Okinawa Marriott Resort & Spa, please refer to “<Reference Materials 2> <1>
Sales and GOP of the HMJ Group Hotels.”

－

11

－

Item

Assumptions(3) ACTIVE-INTER CITY HIROSHIMAACTIVE-INTER CITY HIROSHIMA is a complex facility composed of a hotel building, an office building, and acommercial zone. Rent for each facility is calculated as follows.
(a) Hotel building (Sheraton Hiroshima Hotel)
Annual rent (¥594 million) = Fixed rent (¥348 million / year) + Variable rent
Variable rent = [(a) Hotel GOP − (b) GOP base amount] × 82.5%(millions of yen)
Hotel GOP(a)

GOP base amount(b)

Variable rent((a) − (b)) × 82.5%

Midterm

342

234

89

Full year

766

468

246

(*)

For the sales and GOP of Sheraton Hiroshima Hotel, please refer to “<Reference Materials 2> <1> Sales and
GOP of the HMJ Group Hotels.”(b) Office building and commercial zone
Rent from the office building and the commercial zone for the fiscal year ending December 31, 2016 (17th period)
is expected to be ¥225 million for the midterm and ¥451 million for the full year. These figures include ¥10
million for the midterm and ¥20 million for the full year as variable rent pursuant to an agreement for revenue
sharing for some shops.
Operatingrevenue(4) Hotel Centraza Hakata
The fixed and variable rent of Hotel Centraza Hakata are calculated as follows.
Rent for the fiscal year ending December 31, 2016 (17th period) (*1) (¥503 million) = Fixed rent (¥300 million) +Variable rent
Variable rent = [(a) Hotel GOP − (b) GOP base amount] × 90.0%(millions of yen)
Hotel GOP(a)

GOP base amount(b)

Variable rent((a) − (b)) × 90.0%

Midterm

175

106

62

Full year

545

318

203

(*1) Rent for the fiscal year ending December 31, 2016 (17th period) shows the estimated figure to incur during
the 275 days from April 1, 2016 to December 31, 2016. Furthermore, it is assumed that the GOP baseamount after January 1, 2017 will be ¥425 million and the annual fixed rent will be ¥400 million.
(*2) For the sales and GOP of Hotel Centraza Hakata, please refer to “<Reference Materials 2> <2> Sales and
GOP of Hotel Centraza Hakata.”(5) The Six Accor Hotels
Income from management contracts and variable rent of the six Accor hotels(millions of yen)ibis
Tokyo Shinjuku

ibis Styles
Kyoto Station

ibis Styles
SapporoMercureSapporoMercureOkinawa Naha

MercureYokosuka

Total

Midterm

225

226

237

220

189

121

1,221

Full year

454

508

610

596

449

206

2,826

－

12

－

Item

Assumptions(*1) For the sales and GOP of the six Accor hotels and other comparisons, please refer to “<Reference Materials
2> <3> Sales and GOP of the Six Accor Hotels.”(*2) For income from management contracts, it is assumed that the respective hotel’s GOP amount is posted asincome from management contracts and the management contract fees to be paid by JHR is posted as an
operating expenses item.
(*3) At Mercure Sapporo, although tenants other than the hotel have concluded agreements for revenue sharing,
variable rent is not expected for the fiscal year ending December 31, 2016 (17th period).
(6) The Six the b Hotels
Fixed and variable rent of the six the b hotels (midterm)
the b
the b
the b
akasakaikebukuro
suidobashi
mitsuke(millions of yen)the bochanomizu

the bhakataTotal

Fixed (*1)

42

68

108

34

61

43

358

Variable

18

83

80

29

47

36

294

Total

61

151

189

63

108

79

653

Fixed and variable rent of the six the b hotels (full year)
the b
the b
the b
akasakaikebukuro
suidobashi
mitsukeOperatingrevenuethe bhachioji(millions of yen)the bochanomizu

the bhachioji

the bhakataTotal

Fixed (*1)

84

136

217

69

122

88

719

Variable

40

183

168

61

103

82

639

Total

125

319

386

130

226

170

1,358

(*1) Fixed rent includes rent from non-hotel tenant(s).
(*2) For the sales and GOP of the six the b hotels and other comparisons, please refer to “<Reference Materials
2> <4> Sales and GOP of the Six the b Hotels.”(7) Other hotels that have adopted variable rent
Variable rent of other hotels that have adopted variable rent
Smile Hotel
Hotel Vista
Nihombashi
Kamata Tokyo
Mitsukoshimae(millions of yen)

Chisun Inn
KamataHotel Keihan
Universal City

Hotel Sunroute
Shinbashi

HiltonTokyo Bay

Total

Midterm

17

－

36

(*)

74

(*)

431

Full year

17

28

73

(*)

74

(*)

568

(*)

No information is shown since tenants that concluded lease agreements did not agree to disclose rent
income, etc.

・The following is the breakdown of variable rent and income from management contracts.
<Breakdown of variable rent, etc. for the fiscal year ending December 31, 2016 (17th period)>
ACTIVE-INTER
Okinawa
The Five
CITY
Marriott
HMJ Hotels
HIROSHIMA
Resort & Spa

Hotel
Centraza
HakataThe Six
Accor
Hotels(millions of yen)

The Six theb Hotels

Other hotels
withvariable rent

Total

Midterm

942

－

99

62

1,221

294

431

3,052

Full year

3,576

551

266

203

2,826

639

568

8,632

(*)

For details of the variable rent and income from management contract arrangements, please refer to “D.
Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract orrevenue sharing” on page 66.

－

13

－

Item

Assumptions
・Among real estate leasing expenses, which is the major operating expenses, expenses other than depreciation arecalculated based on past actual data, and variable factors are reflected in the calculation. Operating expenses of
ACTIVE-INTER CITY HIROSHIMA acquired on December 18, 2015, CANDEO HOTELS UENO-KOEN
acquired on February 1, 2016 and Hotel Centraza Hakata to be acquired on April 1, 2016 (hereinafter called the“acquired assets and assets for anticipated acquisition”) are calculated based on past actual data as provided byprevious owners, etc., and variable factors are reflected in the calculation.
・It is assumed that ¥1,201 million will be posted as expenses for fixed asset tax, city planning tax and other taxes
and public dues.
・In general, fixed asset tax and city planning tax, etc. of acquired assets are settled with the previous owner at the

Operatingexpenses

time of acquisition, calculated on a pro rata basis of the holding period. For JHR, the settlement amount isincluded in the acquisition price, and it will not be posted as expenses for the calculation period. Therefore, thefixed asset tax, city planning tax and other taxes and public dues for CANDEO HOTELS UENO-KOEN and
Hotel Centraza Hakata will not be posted as expenses for the fiscal year ending December 31, 2016 (17th period).
The annual fixed asset tax and city planning tax, etc. for CANDEO HOTELS UENO-KOEN are expected to be¥23 million, and the annual fixed asset tax and city planning tax, etc. for Hotel Centraza Hakata are expected tobe ¥21 million. Moreover, the fixed asset tax and city planning tax, etc. to be recorded as expenses for the fiscal
year ending December 31, 2016 (17th period) for the nine properties (the five the b hotels, Hotel Francs, Mercure
Yokosuka, Okinawa Marriott Resort & Spa and ACTIVE-INTER CITY HIROSHIMA) acquired in the fiscal year
ended December 31, 2015 (16th period) are assumed to be ¥263 million (for nine months).
・Depreciation is calculated by the straight-line method, and is estimated to be ¥3,207 million, including theacquisition price of the acquired assets and assets for anticipated acquisition (including incidental costs) as well as
the planned capital expenditures (¥2,532 million) for the fiscal year ending December 31, 2016 (17th period).
・Repair expenses for buildings are posted as expenses in the estimated amount necessary for each operating period.
Please bear in mind 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, etc. tobuildings from unexpected causes, 2. The amount of repair expenses generally tends to increase in difference overtime, and 3. Repair expenses are not required on a regular basis.
・¥1,740 million is expected for interest expense, arrangement fee, amortization for the following (1) handling

Non-operating
borrowing costs and (2) derivative instruments (interest rate caps), etc.
expenses・Expenses for issuance of new investment units and secondary offering are amortized over a period of three years
by the straight-line method.
Interestbearing
debt
Issuance ofinvestment
units

・It is assumed that the balance of interest-bearing debt (sum of loans and investment corporation bonds) is¥102,772 million as of January 1, 2016 and ¥111,593 million as of December 31, 2016.
・A loan for acquisition of Hotel Centraza Hakata in the amount of ¥7,000 million is assumed.
・The number of investment units issued and outstanding as of today (3,321,907 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 31, 2016 (17th period).

－

14

－

Item

Assumptions
・Dividend per unit for the fiscal year ending December 31, 2016 (17th period) is calculated based on the following
assumptions.
Net income
Use of reserve for dividends (negative goodwill)¥10,904 million

Loss on retirement of noncurrent assets (*1)

¥13 million

Amortization of fixed-term leasehold of land and asset retirement obligations (*2)¥106 million

Distributable amount¥11,024 million

Total number of investment units issued and outstanding

3,321,907 units

Dividend per unit
Dividend
per unit¥3,318(*1) Amount posted as a loss on retirement of noncurrent assets will be appropriated by reserve for dividends(negative goodwill) and is expected to have no impact on dividend per unit.
(*2) As Hotel Centraza Hakata is a property under fixed-term leasehold of land, amortization of the fixed-termleasehold rights of land and asset retirement obligations (hereinafter collectively called the “amortization ofland leasehold right, etc.”) will arise. It is planned to add up to the dividends by appropriation of reserve fordividends (negative goodwill) for the amortization of land leasehold right, etc.
・Dividend per unit may fluctuate by various causes, such as fluctuation of rental revenue resulting from transfer
of asset, transfer of hotel lessee(s), etc., change of business environment, etc. for hotel lessee(s), etc. andunexpected repairs, etc.
・The balance of the reserve for dividends (negative goodwill) after the appropriation of reserve for dividends(negative goodwill) for dividends for the fiscal year ending December 31, 2016 (17th period) is expected to be¥13,747 million.
・The operating status for the fiscal year ending December 31, 2016 of ACTIVE-INTER CITY HIROSHIMA
acquired on December 18, 2015, CANDEO HOTELS UENO-KOEN acquired on February 1, 2016 and Hotel
Centraza Hakata to be acquired on April 1, 2016 is estimated as follows.
<ACTIVE-INTER CITY HIROSHIMA>(millions of yen)
Fiscal year ending
December 31, 2016

Operating days
Acquired
assets andassets for
anticipatedacquisition

Operating revenue

Annualized(*3)

366 days

366 days

1,346

1,346

NOI (*1)

922

892

NOI yield (%) (*2)

5.3

5.2

<CANDEO HOTELS UENO-KOEN>(millions of yen)
Fiscal year ending
December 31, 2016

Operating days

Annualized(*3)

335 days

366 days

Operating revenue

290

316

NOI (*1)

287

289

-

4.3

NOI yield (%) (*2)

－

15

－

Item

Assumptions<Hotel Centraza Hakata>(millions of yen)
Fiscal year ending
December 31, 2016

Operating days

Acquired
assets andassets for
anticipatedacquisition

Dividend
per unit
resultingfromexcess of
earnings

Annualized(*3)

275 days

366 days

Operating revenue

503

660

NOI (*1)

325

404

-

5.6

NOI yield (%) (*2)(*1) NOI = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of
noncurrent assets(*2) NOI yield = NOI ÷ (Anticipated) Acquisition priceNOI yield of CANDEO HOTELS UENO-KOEN and Hotel Centraza Hakata for the fiscal year ending
December 31, 2016 is not indicated as these are acquisitions in the middle of the period.
(*3) For the assumptions of calculating the annualized figures, please refer to “<Reference Materials 3>
Assumptions of the forecast of the annualized effect.”

・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, etc. 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, hotelbusiness environment, etc.
・The numerical values are rounded down to the nearest million yen in the assumptions above.

－

16

－

<Reference Materials 1> Highlights of the operating forecast and forecast of dividend(1) The following are a comparison and the major causes of variance between the actual results for the fiscal year ended December
31, 2014 (15th period) and the actual results for the fiscal year ended December 31, 2015 (16th period).
(millions of yen)
15th Period

16th Period

ActualActualMajor Causes of Variance
Comparison with
Previous Period

16th Period

Property
Acquisition
(*1)

（A）
Properties

Existing
Properties

No. of properties

30

36

6

20.0%

9

(3)

-

Acquisition price

173,429

225,723

52,29430.2%

57,025(4,731)-

Operating revenue

12,76017,343

4,583

35.9%

2,195

244

2,143

Real estate
operating revenue

12,76017,033

4,273

33.5%

2,195

(60)

2,139

Composition

Composition

71.1%

9,066 60.5% 10,311

Fixed rent

Variable rent
ProfitandLoss

3,693 39.5%

6,722

3,029

0

309

309

NOI (*6)

11,002

14,8293,827

NOI yield (*6)

6.3%

6.6%
(*7)(7.1%)

0.2%

Gain on sale ofreal estate properties

Dividend

(*1)

28.9%

1,244

13.7%

82.0%

34.8%

1,150

8,597

12,031

3,434

NOI yield after
depreciation (*6)

5.0%

5.3%
(*7) (5.8%)

0.4%

Operating income

7,545

10,988

3,443

45.6%

Net income

5,774

9,294

3,519

61.0%

39.9%

240

60

(179)

(74.7%)

Total dividends

6,015

9,354

3,338

55.5%

No. of units issued

2,791,281

3,144,227

352,946

12.6%

Dividend per unit (JPY)

2,155

2,975

820

38.1%

(1) The five HMJ hotels -- increase in variable rent by
JPY521M(2) Increase in income from management contracts, etc.
1,984 by JPY100M (*5)(3) Increases from revenue sharing, etc. by JPY369M(4) Full-year impact, etc. of JPY993M from 3 properties
acquired in the previous fiscal year

0

-

305

4

2,086

(54)
(*8)

1,795

-

(41)
(*8)

1,817
-

Use of negative goodwill(60)(1) Full year impact, etc. of JPY180M from 3 properties (*3)
acquired in the previous fiscal year(2) Decrease of JPY21M due to a sale of 1 property (*4) in
155 the previous fiscal year

1,045

-

NOI after
depreciation (*6)

Causes of Variance (Existing Properties)(*2)（B）-（A） Variance（B）

Property
Disposition

-

1,658
-

This indicates an impact from acquiring nine properties on the statements of income. Nine properties are the five the b hotels acquired on January 30,
2015, Hotel Francs on March 31, 2015, Mercure Yokosuka on April 2, 2015, Okinawa Marriott Resort & Spa on July 10, 2015, and ACTIVEINTER CITY HIROSHIMA on December 18, 2015.

(*2)

This indicates an impact from selling three properties (Comfort Hotel Shin-Yamaguchi, Daiwa Roynet Hotel Akita, and Hotel Sunroute Niigata) on
October 30, 2015 on the statements of income.

(*3)

The properties refer to ibis Styles Sapporo acquired on July 9, 2014, and Mercure Sapporo and Mercure Okinawa Naha acquired on September 30,(*4)

The property refers to Dormy Inn Namba which was sold on January 24, 2014.

(*5)

An increase in income from management contracts from ibis Tokyo Shinjuku and ibis Styles Kyoto Station.

(*6)

Each is calculated using the following formula

2014.

NOI (Net Operating Income) = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets
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(*7)

As of the end of the fiscal year ended December 31, 2015 (16th period), acquisition price includes the acquisition price of ACTIVE-INTER CITYHIROSHIMA acquired on December 18, 2015. On the other hand, NOI and NOI after depreciation only include 14 days as management period of
ACTIVE-INTER CITY HIROSHIMA in the full year of the fiscal year ended December 31, 2015 (16th period). Please see the figures in parentheses
for NOI yield and NOI yield after depreciation excluding the impact of ACTIVE-INTER CITY HIROSHIMA.

(*8)

NOI and NOI after depreciation do not include gain on sale of real estate, etc. NOI and NOI after depreciation which include the impact are ¥251
million and ¥264 million, respectively.

－

17

－

(2) The following are a comparison and the major causes of variance between the actual results for the fiscal year ended December
31, 2015 (16th period) and the forecast for the fiscal year ending December 31, 2016 (17th period).
(millions of yen)
16th Period

17th Period(Reference)

ActualForecast(*1)

Forecast
This Time
Annualized

(A)

(B)

Comparison
withProperty
Forecast for
Property Disposition
AcquisitioninPrevious Period(*2)(B) - (A)

Variance(*3)

16th Period

Major Causes of Variance
Existing
Properties
(*5)

Ratio

No. of properties

36

38

38

2

5.6%

Acquisition price

225,723

239,626

239,626

13,902

6.2%

Operating revenue

17,343

20,83621,019

3,492

20.1%

2,105

(599)

1,986

21,019

3,802

22.3%

2,105

(293)

1,990

Real estate
operating revenue

17,033Composition

Fixed rent

Variable rent

20,836Composition

Composition

60.5% 10,311 58.6% 12,204 58.7% 12,330

39.5%

6,722 41.4%

Gain on sale ofreal estate
properties

8,632 41.3%

1,893

18.4%

1,636

(293)

8,688

1,909

28.4%

469

-

(1) Full-year impact, etc. of 8 properties (*6) acquired
in previous period: JPY433M
550 (2) Cancellation penalty upon tenant replacement:
JPY114M(1) Increase in variable rent of the five HMJ hotels:
JPY650M(2) Increase in income from management contract,
1,440 etc. of the five Accor hotels: JPY356M(3) Increase in revenue sharing, etc.: JPY120M(4) Full-year impact, etc. of 8 properties (*6) acquired
in previous period: JPY313M

309

-

-

(309)

-

-

(305)

(4)

NOI (*7)

14,82917,625

17,618

2,795

18.9%

1,517

(257)
(*9)

1,535

NOI yield (*7)6.6%(*8) (7.1%)

7.4%

7.4%

0.8%

-

-

-

NOI
after depreciation

12,031

14,404

14,336

2,373

1,122

(184)
(*9)

1,435

NOI yield
after depreciation (*7)

5.3%(*8) (5.8%)

6.0%

6.0%

0.7%

-

-

-

Operating income

10,98812,645

12,558

1,656

15.1%

Net income

9,294

10,904

10,893

1,610

17.3%

60

119

155

58

96.7%
17.8%

Use of negative goodwill

19.7%

Total dividends

9,354

11,022

11,048

1,668

No. of units issued

3,144,227

3,321,907

3,321,907

177,680

5.7%

Dividend per unit (JPY)

2,975

3,318

3,326

343

11.5%

Causes of Variance for Existing Properties(*4)(*1) For the assumptions of the forecast, please refer to “Assumptions of the operating forecast for the midterm and full year of the fiscal year ending
December 31, 2016 (17th period).”(*2) For the assumptions of calculating the annualized figures in the forecast this time, please refer to “<Reference Materials 3> Assumptions of the forecastof the annualized effect.”(*3) The impact on the statements of income from acquisition of three properties (ACTIVE-INTER CITY HIROSHIMA acquired on December 18, 2015,
CANDEO HOTELS UENO-KOEN acquired on February 1, 2016 and Hotel Centraza Hakata to be acquired on April 1, 2016).
(*4) The impact on the statements of income from sale of three properties (Comfort Hotel Shin-Yamaguchi, Daiwa Roynet Hotel Akita and Hotel Sunroute
Niigata sold on October 30, 2015).
(*5) The 36 properties owned as of December 31, 2015, but excluding ACTIVE-INTER CITY HIROSHIMA, to total 35 properties.
(*6) The properties refer to the b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata acquired on January 30, 2015, Hotel
Francs acquired on March 31, 2015, Mercure Yokosuka acquired on April 2, 2015 and Okinawa Marriott Resort & Spa acquired on July 10, 2015.
(*7) Each is calculated using the following formula.
NOI (Net Operating Income) = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets
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(*8) As of the end of the fiscal year ended December 31, 2015 (16th period), acquisition price includes the acquisition price of ACTIVE-INTER CITYHIROSHIMA acquired on December 18, 2015. On the other hand, NOI and NOI after depreciation only include 14 days as management period of
ACTIVE-INTER CITY HIROSHIMA in the full year of the fiscal year ended December 31, 2015 (16th period). Please see the figures in parentheses for
NOI yield and NOI yield after depreciation excluding the impact of ACTIVE-INTER CITY HIROSHIMA.
(*9) NOI and NOI after depreciation do not include gain on sale of real estate properties etc. NOI and NOI after depreciation including the amount of the
impact are ¥(563) million and ¥(489) million, respectively.

－

18

－

<Reference Materials 2>
The following tables indicate the sales and GOP of the five HMJ hotels, Okinawa Marriott Resort & Spa, Sheraton Hiroshima Hotel,
Hotel Centraza Hakata, the six Accor hotels and the six the b hotels, among JHR’s hotels with variable rent contracts. Furthermore,while the indicated figures are based on the data provided by the hotel lessees, etc., please note that the figures have not undergone
audit and other procedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures anddescriptions. Moreover, the sales and GOP are rounded off to the nearest million yen, and the year-on-year change is rounded off to
one decimal place.
<1> Sales and GOP of the HMJ Group Hotels(1) Sales by hotel

Sales of the HMJ Group Hotels

Kobe Meriken Park
Oriental Hotel

Oriental Hotel tokyo bay

Namba Oriental Hotel

Hotel Nikko Alivila

Oriental Hotel Hiroshima

Total for the Five HMJ Hotels

Okinawa Marriott Resort & Spa

Sheraton Hiroshima Hotel

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeFiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechangeFirst half

2,424

0.4%

2,424

(0.0%)

2,646

9.2%

Second half

2,798

0.1%

2,828

1.1%

3,204

13.3%

Full year

5,222

0.2%

5,252

0.6%

5,850

11.4%

First half

3,366

4.9%

3,395

0.9%

3,500

3.1%

Second half

3,844

(3.3%)

3,927

2.2%

4,045

3.0%

Full year

7,210

0.4%

7,322

1.6%

7,544

3.0%

First half

998

6.8%

1,189

19.1%

1,358

14.3%

Second half

1,151

10.9%

1,341

16.6%

1,474

9.9%

Full year

2,149

9.0%

2,530

17.8%

2,832

11.9%

First half

2,190

(0.1%)

2,377

8.6%

2,554

7.5%

Second half

3,301

3.7%

3,571

8.2%

3,709

3.9%

Full year

5,491

2.2%

5,948

8.3%

6,264

5.3%

First half

1,046

(0.0%)

991(5.2%)

1,062

7.2%

Second half

1,178

(2.5%)

1,142(3.0%)

1,135(0.6%)

Full year

2,223(1.4%)

2,134(4.0%)

2,197

3.0%

First half

10,024

2.3%

10,376

3.5%

11,121

7.2%

Second half

12,272

0.6%

12,810

4.4%

13,566

5.9%

Full year

22,296

1.4%

23,186

4.0%

24,688

6.5%

First half

1,600

5.8%

1,614

0.9%

1,696

5.1%

Second half

2,211

7.1%

2,402

8.7%

2,505

4.3%

Full year

3,811

6.6%

4,016

5.4%

4,201

4.6%

First half

1,359

3.5%

1,346

(1.0%)

1,356

0.8%

Second half

1,511

1.0%

1,502

(0.6%)

1,514

0.8%

Full year

2,870

2.2%

2,847

(0.8%)

2,870

0.8%

(Note) Although Okinawa Marriott Resort & Spa was acquired on July 10, 2015 and ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) was
acquired on December 18, 2015, the figures are for throughout the year including those prior to the acquisition.

－

19

－

(2) Hotel GOP

GOP of the HMJ Group Hotels

Total for the Five HMJ Hotels

Okinawa Marriott Resort & Spa

Fiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechange

GOP

6,302

2.4%

6,941

10.1%

7,558

8.9%

Ratio of
GOP to sales

28.3%

0.3%

29.9%

1.7%

30.6%

0.7%

GOP

1,105

12.5%

1,230

11.3%

1,313

6.7%

Ratio of
GOP to sales

29.0%

1.5%

30.6%

1.6%

31.2%

0.6%

651

11.3%

716

10.0%

766

7.1%

22.7%

1.9%

25.1%

2.5%

26.7%

1.6%

GOP
Sheraton Hiroshima Hotel

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeRatio of
GOP to sales(Note) Although Okinawa Marriott Resort & Spa was acquired on July 10, 2015 and ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) was
acquired on December 18, 2015, the figures are for throughout the year including those prior to the acquisition.

<2> Sales and GOP of Hotel Centraza Hakata(1) Hotel sales

Sales of Hotel Centraza Hakata

Hotel Centraza Hakata

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeFiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechangeFirst half

－

－

1,124

2.0%

1,124

0.0%

Second half

－

－

1,205

6.6%

1,192

(1.2%)

Full year

－

－

2,330

4.4%

2,316

(0.6%)(Note) JHR is to acquire Hotel Centraza Hakata on April 1, 2016. The figures for the fiscal year ended December 31, 2015 and the fiscal year ending December
31, 2016 are for throughout the year including those prior to the scheduled acquisition.

(2) Hotel GOP

GOP of Hotel Centraza Hakata

Hotel Centraza Hakata

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeFiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechange

GOP

－

－

715

8.7%

714

(0.2%)

Ratio of
GOP to sales

－

－

30.7%

1.2%

30.8%

0.1%

(Note) JHR is to acquire Hotel Centraza Hakata on April 1, 2016. The figures for the fiscal year ended December 31, 2015 and the fiscal year ending December
31, 2016 are for throughout the year including those prior to the scheduled acquisition.

－

20

－

<3> Sales and GOP of the Six Accor Hotels(1) Sales by hotel

Sales of the Six Accor Hotels

ibis Tokyo Shinjuku

ibis Styles Kyoto Station

ibis Styles Sapporo

Mercure Sapporo

Mercure Okinawa Naha

Mercure Yokosuka

Total

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeFiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechangeFirst half

427

12.0%

453

6.1%

435

(3.9%)

Second half

445

7.5%

421

(5.5%)

440

4.7%

Full year

872

9.6%

873

0.2%

875

0.2%

First half

305

(1.2%)

357

17.1%

429

20.2%

Second half

384

13.3%

457

18.8%

500

9.5%

Full year

690

6.3%

814

18.0%

930

14.2%

First half

397

2.3%

429

7.9%

482

12.4%

Second half

522

4.8%

591

13.1%

647

9.5%

Full year

920

3.7%

1,019

10.9%

1,128

10.7%

First half

425

5.5%

499

17.5%

562

12.5%

Second half

573

3.9%

672

17.4%

756

12.4%

Full year

998

4.6%

1,172

17.4%

1,318

12.5%

First half

363

28.0%

407

12.1%

484

19.0%

Second half

414

14.5%

516

24.5%

572

10.9%

Full year

778

20.5%

923

18.7%

1,056

14.5%

First half

545

3.7%

550

1.0%

580

5.5%

Second half

491

9.5%

512

4.3%

517

1.0%

Full year

1,036

6.4%

1,062

2.6%

1,097

3.3%

First half

2,463

7.5%

2,696

9.5%

2,973

10.3%

Second half

2,829

8.3%

3,168

12.0%

3,432

8.3%

Full year

5,292

7.9%

5,863

10.8%

6,405

9.2%

(Note) Although Mercure Yokosuka was acquired on April 2, 2015, the figures are for throughout the year including those prior to the acquisition.

(2) Hotel GOP

GOP of the Six Accor Hotels

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeFiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechangeTotal for the Six Accor Hotels

2,075

15.6%

2,512

21.0%

2,882

14.8%

Ratio of GOP to sales

39.2%

2.6%

42.8%

3.6%

45.0%

2.2%

(Note) Although Mercure Yokosuka was acquired on April 2, 2015, the figures are for throughout the year including those prior to the acquisition.

－

21

－

<4> Sales and GOP of the Six the b Hotels(1) Sales by hotel

Sales of the Six the b Hotels

the b akasaka-mitsuke

the b ikebukuro

the b ochanomizu

the b hachioji

the b hakata

Total for the Five the b Hotels

the b suidobashi

Total for the Six the b Hotels

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeFiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechangeFirst half

131

(13.7%)

221

69.4%

250

13.1%

Second half

213

94.9%

242

13.8%

271

12.0%

Full year

344

31.8%

464

35.0%

522

12.6%

First half

279

8.1%

301

7.7%

335

11.6%

Second half

283

4.6%

324

14.5%

350

7.8%

Full year

562

6.4%

625

11.1%

685

9.6%

First half

121

7.9%

132

9.0%

145

9.5%

Second half

124

1.6%

130

4.8%

149

14.5%

Full year

246

4.6%

262

6.9%

294

12.0%

First half

242

9.8%

267

10.4%

300

12.5%

Second half

256

0.9%

291

13.8%

316

8.5%

Full year

497

5.0%

558

12.2%

616

10.4%

First half

172

7.0%

191

10.9%

202

6.0%

Second half

191

8.7%

215

12.8%

218

1.3%

Full year

363

7.9%

406

11.9%

420

3.5%

First half

944

4.7%

1,111

17.7%

1,233

10.9%

Second half

1,067

14.6%

1,203

12.8%

1,304

8.4%

Full year

2,011

9.7%

2,315

15.1%

2,537

9.6%

First half

－

－

－

－

182

－

Second half

－

－

－

－

189

－

Full year

－

－

－

－

372

－

First half

－

－

－

－

1,415

－

Second half

－

－

－

－

1,494

－

Full year

－

－

－

－

2,909

－

(Note 1)
(Note 2)

Although the five the b hotels were acquired on January 30, 2015, the figures are for throughout the year including those prior to the acquisition.
The b akasaka-mitsuke completed its renovation work by the previous owner in April 2014. The number of guest rooms has increased from 91 to 122.

(Note 3)

Therefore, the number of guest rooms available for sale in the first half of 2015 and the first half of 2014 are different
The b suidobashi was rebranded from Dormy Inn Suidobashi on July 1, 2015. Therefore, no figures are indicated for the fiscal year ended December
2014 and the fiscal year ended December 31, 2015 and comparison with the forecast for the previous period for the fiscal year ending December 2016.

－

22

－

(2) Hotel GOP

GOP of the Five the b Hotels

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeTotal for the Five the b Hotels
Ratio of GOP to sales

GOP of the Six the b Hotels

Fiscal year ended
December 31, 2015
Year-on-year
Resultschange(millions of yen)
Fiscal year ending
December 31, 2016
Forecast Year-on-year
this timechange

854

15.5%

1,079

26.4%

1,215

12.6%

42.4%

2.1%

46.6%

4.2%

47.9%

1.3%

Fiscal year ended
December 31, 2014
Year-on-year
ResultschangeFiscal year ended
December 31, 2015
Year-on-year
ResultschangeFiscal year ending
December 31, 2016
Forecast Year-on-year
this timechangeTotal for the Six the b Hotels

－

－

－

－

1,395

－

Ratio of GOP to sales

－

－

－

－

48.0%

－

(Note 1)
(Note 2)

Although the five the b hotels were acquired on January 30, 2015, the figures are for throughout the year including those prior to the acquisition.
The b suidobashi was rebranded from Dormy Inn Suidobashi on July 1, 2015. Therefore, no figures are indicated for the fiscal year ended December
2014 and the fiscal year ended December 31, 2015 and comparison with the forecast for the previous period for the fiscal year ending December 2016.

<Reference Materials 3> Assumptions of the forecast of the annualized effect(1) The operating revenue and operating expenses for existing properties (properties other than CANDEO HOTELS UENOKOEN and Hotel Centraza Hakata) remain unchanged, except for fixed asset tax and city planning tax, etc., from
“Assumptions of the operating forecast for the midterm and full year of the fiscal year ending December 31, 2016 (17th period)”
above.
(2) The fixed rent for CANDEO HOTELS UENO-KOEN is assumed to be JPY316M/year and the fixed rent for Hotel Centraza
Hakata is assumed to be JPY400 million / year.
(3) For the fixed asset tax, city planning tax and other taxes and public dues for the relevant period, the fixed asset tax and city
planning tax, etc. for the nine properties (the five the b hotels, Hotel Francs, Mercure Yokosuka, Okinawa Marriott Resort &Spa and ACTIVE-INTER CITY HIROSHIMA) acquired in the fiscal year ended December 31, 2015 (16th period) are
assumed to be ¥351 million (for twelve months), and the fixed asset tax and city planning tax, etc. for the acquired assets andassets for anticipated acquisition, CANDEO HOTELS UENO-KOEN, and Hotel Centraza Hakata are assumed to be ¥23
million (for twelve months) and JPY21 million (for twelve months), respectively.
(4) For non-operating expenses, the major financial costs expensed all at once upon property acquisition are not included in theannualized effect.
<Reference Materials 4> Dividend per unit and appropriation for dividends
Dividend per unit for the fiscal year ended December 31, 2014 and the fiscal year ended December 31, 2015 are calculated based on
the following assumptions.
Fiscal year ended
December 31, 2014
(JPY1M)
Unappropriated retained earnings

Fiscal year ended
December 31, 2015
(JPY1M)

5,776

9,296

240

60

Loss on retirement of noncurrent assets

425

Financial costs in accordance with early repayment

71

35

Adjustment for dilution (Note)

164

－

6,015

9,354

2,791,281 units

3,144,227 units¥2,155¥2,975

Total appropriation for dividends (use of negative goodwill)

Total dividends
Total number of investment units issued and outstanding
Dividend per unit

(Note) This is to respond to the dilution of dividend per unit which occurred as a result of the issuance of new investment units during the fiscal year ended
December 31, 2014.

－

23

－

3. Financial statements(1) Balance sheets(thousands of yen)
As ofDecember 31, 2014
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
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
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
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
－

24

－

As of
December 31, 2015

7,539,897
6,884,877
1,029,379
381,639－428
3715,836,259

5,450,696
8,247,600
1,269,572
410,241
245,509
3,057
6,473
15,633,151

155,796(46,078)
109,718
1,041,932(478,692)
563,239－*1 67,291,439(7,389,134)
59,902,304
736,632(119,147)
617,485
469,007(49,103)419,903
129,339(61,607)67,732
89,055,831
126
150,736,342

184,717(68,766)
115,951
1,428,232(637,865)
790,3672,676*1 88,642,547(9,276,696)
79,365,851
2,006,145(172,064)
1,834,081
456,282(52,883)
403,399
125,266(68,340)
56,926
120,918,641
606
203,488,501

57,421
19,774,039
10,968
19,842,429

100,333
19,774,039
10,476
19,884,849

602,725
12,520158,323
803,747
4,834－
1,582,151
172,160,922－
12,520158,323
993,340
1,272
49,2191,214,676
224,588,027

55,62838,923
94,552
188,091,734

66,92868,381
135,310240,356,489

(thousands of yen)
As ofDecember 31, 2014
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of investment corporation bonds
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Dividends payable
Deposits received
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
Total long-term liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Voluntary reserve
Dividend reserve
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

－

25

－

As of
December 31, 2015

285,938－－
11,825,132
400,390
1,210
290,174
651,652
10,7709,384－
13,474,653

875,465
9,000,000
2,500,000
11,393,603
500,859
1,210－
692,794
12,381
71,44225,45225,073,210

6,000,000
63,264,603
2,041,916
2,608,901
358,752
74,274,172
87,748,826

9,500,000
70,379,000
2,041,032
2,914,912
533,856
85,368,801
110,442,012

59,024,923

85,470,541

21,746,398

21,746,398

14,168,614
14,168,614
5,776,116
41,691,129
100,716,052

13,928,075
13,928,075
9,296,121
44,970,596
130,441,137(373,144)(373,144)*2 100,342,908
188,091,734(526,660)(526,660)*2 129,914,477
240,356,489

(2) Statements of income(thousands of yen)
For the year ended
December 31, 2014
Operating revenue
Real estate operating revenue
Other real estate operating revenue
Gain on sale of real estate properties
Gain on investment in silent partnership
Total operating revenue
Operating expenses
Real estate operating costs
Asset management fee
Asset custody fee
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
Income before income taxes
Income taxes – current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)－*1

For the year ended
December 31, 2015

12,510,628
249,564*2 13－
12,760,205*1

4,163,015
809,152
14,13471,7039,600
147,060
5,214,666
7,545,539

*1,*3

*1

*1,*3

26

－

16,632,526
401,349*2 305,668
4,288
17,343,833*1

5,002,501
1,045,925
17,63389,541
10,800188,480
6,354,882
10,988,950

2,111
1,268
958
447
－
4,785

2,977
1,186
4,644
292
9,411
18,512

1,029,964
37,110599,282
8,677
35,77463,35767
1,774,234
5,776,090
5,776,090
1,210
1,210
5,774,880
1,236
5,776,116

918,051
62,850632,240
12,50051,84633,99690
1,711,575
9,295,887
9,295,887
1,210
1,210
9,294,677
1,444
9,296,121

(3) Statements of changes in net assets
For the year ended December 31, 2014
(thousands of yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance, January 1, 2014

48,845,323

Voluntary reserve
Capitalsurplus21,746,398

Dividend
reserve

Total
voluntary
reserve

16,017,484

16,017,484

Unappropriatedretainedearnings(undisposed
loss)
3,235,030

Total
unitholders’equityTotal
surplus40,998,912

89,844,236

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

10,179,600

10,179,600

Reversal of dividend reserve(1,848,870)

1,848,870－－

Dividends paid

(5,082,663)(5,082,663)(5,082,663)

Net income

5,774,880

5,774,880

5,774,880

Net changes of items
other than unitholders’ equity
Total changes of items
during the year
Balance, December 31, 2014

*1

10,179,600－(1,848,870)(1,848,870)

2,541,086

692,216

10,871,816

59,024,923

21,746,398

14,168,614

14,168,614

5,776,116

41,691,129

100,716,052(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2014

(88,022)(88,022)89,756,213

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

10,179,600

Reversal of dividend reserve－

Dividends paid

(5,082,663)

Net income

5,774,880

Net changes of items
other than unitholders’ equity
Total changes of items
during the year
Balance, December 31, 2014

(1,848,870)(285,121)(285,121)(285,121)(285,121)(285,121)

10,586,694(373,144)(373,144)

100,342,908

－

27

－

For the year ended December 31, 2015
(thousands of yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance, January 1, 2015

59,024,923

Voluntary reserve
Capitalsurplus21,746,398

Dividend
reserve

Total
voluntary
reserve

14,168,614

14,168,614

Unappropriatedretainedearnings(undisposed
loss)
5,776,116

Total
unitholders’equityTotal
surplus41,691,129

100,716,052

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

26,445,618

26,445,618

Reversal of dividend reserve(240,538)

240,538－－

Dividends paid

(6,015,210)(6,015,210)(6,015,210)

Net income

9,294,677

9,294,677

9,294,677

Net changes of items
other than unitholders’ equity
Total changes of items
during the year
Balance, December 31, 2015

*1

26,445,618－(240,538)(240,538)

3,520,005

3,279,466

29,725,085

85,470,541

21,746,398

13,928,075

13,928,075

9,296,121

44,970,596

130,441,137(thousands of yen)
Valuation and translation
adjustments
Total
Total
Deferred
net assets
valuation andgains (losses)
translation
on hedges
adjustments
Balance, January 1, 2015

(373,144)(373,144)

100,342,908

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

26,445,618

Reversal of dividend reserve－

Dividends paid

(6,015,210)

Net income

9,294,677

Net changes of items
other than unitholders’ equity
Total changes of items
during the year
Balance, December 31, 2015

(240,538)(153,516)(153,516)(153,516)(153,516)(153,516)

29,571,568(526,660)(526,660)

129,914,477

－

28

－

(4) Statements of cash dividends
Classification

For the year ended
December 31, 2014

I. Unappropriated retained earnings

For the year ended
December 31, 2015

¥5,776,116,820¥9,296,121,922¥240,538,162¥60,847,707¥6,015,210,555[¥2,155]¥9,354,075,325[¥2,975]¥1,444,427¥2,894,304

II. Reversal of voluntary reserve
Reversal of dividend reserve
III. Dividends[Dividend per unit]
IV. Retained earnings carried forward
Method of calculating the amount ofdividends

In accordance with the monetary
distribution policy stipulated in Article 34,
paragraph 1 of JHR’s Articles ofIncorporation, amount of dividend must
exceed 90% of JHR’s distributable profit
that is defined by Article 67-15 of the Act
on Special Measures Concerning Taxation.
It was decided that ¥6,016,654,982, which
was calculated by adding a reversal of
dividend reserve of ¥240,538,162 tounappropriated retained earnings of¥5,776,116,820, would all be distributed
except for fractions of less than one yen of
dividend per unit. Consequently, thedividend per unit came to ¥2,155. The
monetary distribution in excess of earnings
stipulated in Article 34, paragraph 1 (4) of
JHR’s Articles of Incorporation will not be
made.

－

29

－

In accordance with the monetary
distribution policy stipulated in Article 34,
paragraph 1 of JHR’s Articles ofIncorporation, amount of dividend must
exceed 90% of JHR’s distributable profit
that is defined by Article 67-15 of the Act
on Special Measures Concerning Taxation.
It was decided that ¥9,356,969,629, which
was calculated by adding a reversal of
dividend reserve of ¥60,847,707 tounappropriated retained earnings of¥9,296,121,922, would all be distributed
except for fractions of less than one yen of
dividend per unit. Consequently, thedividend per unit came to ¥2,975. The
monetary distribution in excess of earnings
stipulated in Article 34, paragraph 1 (4) of
JHR’s Articles of Incorporation will not bemade.

(5) Statements of cash flows(thousands of yen)
For the year ended
December 31, 2014
Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Loss on retirement of noncurrent assets
Loss on derivative instruments
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Decrease in property and equipment in trust due to sale
Gain on investment in silent partnership
Interest income
Interest expense
Interest on tax refunds(Increase) decrease in operating accounts receivable(Increase) decrease in consumption taxes receivable(Increase) decrease in prepaid expenses(Increase) decrease in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in 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 investment securities
Proceeds from redemption of investment securities
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
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 year
Cash and cash equivalents at end of year

－

30

－

For the year ended
December 31, 2015

5,776,090
2,400,444
4,643
63,357
8,677
35,774
683,986－(2,111)
1,067,075(447)(275,570)－(51,910)(358,452)(11,682)(46,197)
60,922
176,457
16,960(65,510)(4,307)
9,478,198
2,111(1,126,516)
447(1,233)8,353,007

9,295,887
2,772,440
25,79024,584
12,50051,8464,400,042(4,288)(2,977)980,901(292)(240,193)(245,509)(28,602)(189,593)
69,222－
103,627(290,174)
41,14162,058
7,996
16,846,409
2,977(983,493)
292(3,838)15,862,346(602,725)－(16,924,492)(317,551)(14,290)－102,021(72,900)
1,396(17,828,541)－
607,013(59,092,222)(299,812)(81,347)(49,219)
641,553(324,585)
16(58,598,604)

6,800,000(9,469,150)
29,082,000(23,607,180)
3,500,000
10,150,551(30,101)(5,079,101)
11,347,018
1,871,484
12,553,289*1 14,424,774

15,000,000(6,000,000)
22,508,000(15,825,132)
6,000,000
26,382,471(41,959)(6,013,599)
42,009,780(726,477)
14,424,774*1 13,698,296

(6) Notes on going concern assumption
Not applicable.

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

Valuation standards
and valuation
method for assets

Securities, other securities, securities without market value.
Stated at cost being determined by the moving average method. Equity interest in silent partnership isstated at its net asset value corresponding to the equity interest in the silent partnership.

2.

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
2 to 17 years
Tools, furniture and fixtures
2 to 20 years
Buildings in trust
2 to 62 years
Structures in trust
2 to 62 years
Machinery and equipment in trust
4 to 32 years
Tools, furniture and fixtures in trust
2 to 27 years(2) Intangible assets
Intangible assets are amortized using the straight-line method. The amortization period of major
intangible assets is as follows.
Software (for internal use)
5 years as internally usable years(3) Long-term prepaid expenses
Long-term prepaid expenses are amortized using the straight-line method.

3.

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 through public offerings on January 27, 2015 and June 22,2015 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 general investors (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 ¥858,900 thousand for the year ended
December 31, 2015 and ¥345,440 thousand for the year ended December 31, 2014, representing thedifference between the issue price and the issue value of all new investment units issued.
(2) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the interest method over therespective term of the bond.

4.

Standards forrecognition ofrevenues andexpenses

Treatment of property taxes and other taxes
For taxes on properties under management such as property taxes, city planning taxes, and depreciable
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 to the transferor of real properties at acquisition is
not recorded as “Real estate operating costs” but capitalized as part of the acquisition cost of the relevant
property. The amount of such taxes capitalized in the acquisition cost of real properties was ¥180,668
thousand for the year ended December 31, 2015 and ¥36,674 thousand for the year ended December 31,
2014.

－

31

－

5.

Method ofhedge accounting(1) Method of 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.

6.

Scope of funds(cash and cash
equivalents)
in the statements ofcash flows

Cash and cash equivalents in the statements of cash flows consist of cash on hand, cash in trust accounts,
bank deposit and trust deposit, which can be withdrawn at any time, and short-term investments with amaturity of three months or less when purchased, which can easily be converted to cash and subject tominimal risk of change in value.

7.

Other
significant mattersserving as the basis
for preparing
financial statements(1) Accounting treatment of beneficial interests in trust with real estate, etc. as their asset
For trust beneficial interests in real estate, etc., all assets and liabilities held in trust accounts as well
as all income generated and expenses incurred from assets in trust are presented in theaccompanying balance sheet and income statement accounts accordingly.
The following material items of the trust accounts recorded in the relevant accounts are presented
separately on the balance sheets.
(a) Cash and deposits in trust(b) Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture andfixtures in trust; Land in trust; Construction in progress in trust(c) Leasehold rights in trust; 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. However, non-deductible
consumption taxes on property and equipment are included in the cost of the respective period.

－

32

－

(8) Notes to financial statements
Disclosure of notes on “securities,” “share of (profit) loss of entities accounted for using equity method,” “related-party
transactions” and “retirement benefits” is omitted because there is thought to be no large necessity for disclosure in thefinancial report.

[Notes to balance sheets]*1. Accumulated advanced depreciation of property and equipment deducted from acquisition costs due to government
subsidies received
As ofDecember 31, 2014
Buildings in trust

As ofDecember 31, 2015¥24,921 thousand¥24,921 thousand*2. Minimum net assets as required by Article 67, paragraph 4 of the Investment Trusts Act
As ofDecember 31, 2014

As ofDecember 31, 2015

¥50,000 thousand¥50,000 thousand[Notes to statements of income]*1. Components of real estate operating revenue and real estate operating costs(thousands of yen)A.

For the year ended
December 31, 2014

For the year ended
December 31, 2015

Real estate operating revenue
Real estate operating revenue
Fixed rent
Variable rent
Income from management contracts

8,817,424
2,739,966
953,237

12,510,628

9,909,942
4,460,082
2,262,502

16,632,526

Other real estate operating revenue
Parking lots
Other incidental revenue
Utilities
Other

61,735
26,112
133,458
28,258249,564

87,10041,191
261,412
11,644

401,349

Total real estate operating revenue

12,760,192

B. Real estate operating costs
Real estate operating costs
Land lease and other rent expenses
Property taxes
Outsourcing expenses (Note)
Nonlife insurance
Depreciation and amortization
Loss on retirement of noncurrent assets
Repairs
Utilities
Trust fees
Other

463,124
835,162
197,668
26,4802,400,444
4,643
45,507
132,826
44,901
12,254

Total real estate operating costs
C.

Net real estate operating income(A－B)

4,163,015

17,033,876

463,289
940,806
387,958
32,334
2,772,440
25,79065,240259,741
42,674
12,224

5,002,501

4,163,015

5,002,501

8,597,176

12,031,375(Note) Outsourcing expenses include management contract fees of ¥239,507 thousand for the year ended December 31, 2015 and ¥81,689 thousand for the year
ended December 31, 2014.

－

33

－

*2. Components of gain (loss) on sale of real estate properties(thousands of yen)
For the year ended
December 31, 2014
Dormy Inn Namba
Proceeds from sale of properties

700,000

Costs of sale of properties

683,986

Other selling expenses

16,000Gain (loss) on sale of real estate properties

13(thousands of yen)
For the year ended
December 31, 2015
Comfort Hotel
Shin-Yamaguchi

Daiwa Roynet
Hotel Akita

Hotel Sunroute
Niigata―――

4,890,000

Costs of sale of properties

787,727

1,644,598

1,967,716

4,400,042

Other selling expenses

33,684

72,401

78,203

184,288―――

305,668

Proceeds from sale of properties

Gain (loss) on sale of real estate properties

Total

The sale prices for each property have not been disclosed as consent on disclosure has not been obtained from the purchaser.
*3. Depreciation was expensed as follows:
For the year ended
December 31, 2014
Property and equipment

For the year ended
December 31, 2015

¥2,387,845 thousand¥2,748,885 thousand¥12,599 thousand¥23,554 thousand

Intangible assets[Notes to statements of changes in net assets]
For the year ended
December 31, 2014

For the year ended
December 31, 2015

*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

2,791,281 units

3,144,227 units[Notes to statements of cash flows]*1. Relation of balance of cash and cash equivalents at end of year and the amount in balance sheet accounts
For the year ended
December 31, 2014

For the year ended
December 31, 2015

Cash and deposits¥7,539,897 thousand¥5,450,696 thousand

Cash and deposits in trust¥6,884,877 thousand¥8,247,600 thousand

Cash and cash equivalents¥14,424,774 thousand¥13,698,296 thousand

－

34

－

[Notes on lease transactions]Operating leases (as lessor)
Minimum rental revenue under non-cancellable operating leases
As ofDecember 31, 2014

As ofDecember 31, 2015

Due within one year

¥1,308,494 thousand¥1,788,631 thousand

Due after one year

¥6,161,012 thousand¥7,565,169 thousand

Total¥7,469,507 thousand¥9,353,800 thousand[Notes on financial instruments]
1. Matters concerning status of financial instruments(1) Policy for financial instruments
JHR is an investment corporation set forth in Article 2, paragraph 12 of the Investment Trusts Act, managing investments
mainly in specified assets as prescribed in the Investment Trusts Act. As a policy, JHR procures funds through issuance ofinvestment units, etc. and loans from financial institutions in order to make investments in specified assets. JHR does not
utilize surplus funds to invest in financial instruments except for short-term deposits and other equivalent short-term
financial instruments. JHR may enter into derivative transactions in order to hedge against interest rate risk, but not for
speculative trading purposes.
(2) Details of financial instruments, their risks, and risk management system
Investment securities, which represent an investment in a silent partnership, are exposed to credit risks of the issuer andrisks of fluctuation of real estate property value, etc. JHR manages these risks by periodically measuring the actual market
values of such properties and the financial conditions of the issuer.
The floating rate loans payable are exposed to risks of interest rate fluctuations. In order to mitigate interest rate risk, JHR
may enter into derivative transactions, if necessary to fix the interest expense.
Derivative transactions are conducted principally in accordance with rules prescribed by JHR and risk management rules
applied by the Asset Management Company. Derivative transactions are arranged by the section in charge of finance at theAsset Management Company by using financial institutions with high credit ratings through approval and resolution byauthorized personnel and a meeting committee structure set forth in its decision-making standards and resolution of JHR’sboard of directors.
Loans payable are exposed to liquidity risks. The section in charge of finance at the Asset Management Company preparesand updates projections and actual cash flows on a monthly basis to manage liquidity risks and monitor compliance withrestrictive covenants set forth in the loan agreements. JHR manages liquidity risks by managing the ratio of short-termand long-term loans payable considering the current financial environment through approval and resolution by authorized
personnel and meeting committee structure in the Asset Management Company and resolution of JHR’s board of directors.
(3) Supplementary explanation on matters concerning fair value, etc. of financial instruments
Regarding the contract amount, etc. of derivative transactions in “2. Matters concerning fair value of financial
instruments,” the amount itself does not indicate certain scale of market risk exposure related to derivative transactions.
2. Matters concerning fair value of financial instruments
Carrying amounts of financial instruments on the balance sheets, their fair values, and the differences as of December 31,
2014 were as follows. Financial instruments whose fair values are considered extremely difficult to measure are not includedin the table. See Note 2 below.

－

35

－

Carrying amount(JPY1000)Fair value(JPY1000)

Difference(JPY1000)(1) Cash and deposits

7,539,897

7,539,897―(2) Cash and deposits in trust

6,884,877

6,884,877―

Total assets

14,424,774

14,424,774―(5) Current portion of long-term loans payable

11,825,132

11,825,132―(6) Investment corporation bonds

6,000,000

6,029,450

29,450(7) Long-term loans payable

63,264,603

63,264,603―

Total liabilities

81,089,735

81,119,185

29,450(353,917)(353,917)―(8) Derivative transactions (*)

－

36

－

Carrying amounts of financial instruments on the balance sheets, their fair values, and the differences as of December 31,
2015 were as follows. Financial instruments whose fair values are considered extremely difficult to measure are not includedin the table. See Note 2 below.
Carrying amount
Fair value
Difference(JPY1000)(JPY1000)(JPY1000)(1) Cash and deposits

5,450,696

5,450,696―(2) Cash and deposits in trust

8,247,600

8,247,600―

Total assets

13,698,296

13,698,296―(3) Short-term loans payable

9,000,000

9,000,000―(4) Current portion of investment corporation bonds

2,500,000

2,507,000

7,000(5) Current portion of long-term loans payable

11,393,603

11,393,603―(6) Investment corporation bonds

9,500,000

9,544,450

44,450(7) Long-term loans payable

70,379,000

70,379,000―

Total liabilities

102,772,603

102,824,053

51,450(532,584)(532,584)―(8) Derivative transactions (*)(*) 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 investment corporation bonds; (6) Investment corporation bonds
The fair value of these instruments is measured based on the market price.
(5) Current portion of long-term loans payable; (7) 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.
(8) Derivative transactions
The information on the fair value of derivative transactions is presented in “Notes on derivative transactions.”(Note 2) Carrying amount of financial instruments whose fair values are considered extremely difficult to measure(thousands of yen)
As ofDecember 31, 2014

Classification
Investment securities

As ofDecember 31, 2015

602,725―

Tenant leasehold and security deposits

2,041,916

2,041,032

Tenant leasehold and security deposits in trust

2,608,901

2,914,912

Total

5,253,542

4,955,944

Investment securities
Investment securities (equity investment in silent partnership) are not subject to fair value disclosure because they have nomarket price and their fair values are considered extremely difficult to measure.
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 difficult.

－

37

－

3. Redemption schedule for monetary claims subsequent to the account closing date
As of December 31, 2014
Due after
Due after
Due after
Due within
one to two
two to three
three to four
one year
years
years
years
(JPY1000)(JPY1000)(JPY1000)(JPY1000)

Due after
four to fiveyears
(JPY1000)

Due after
five years(JPY1000)

Cash and deposits

7,539,897

―

―

―

―

―

Cash and deposits in trust

6,884,877

―

―

―

―

―

Total

14,424,774

―

―

―

―

―

Due within
one year(JPY1000)

Due after
one to two
years(JPY1000)

Due after
two to threeyears(JPY1000)

Due after
three to fouryears
(JPY1000)

Due after
four to fiveyears
(JPY1000)

Due after
five years(JPY1000)

Cash and deposits

5,450,696

―

―

―

―

―

Cash and deposits in trust

8,247,600

―

―

―

―

―

Total

13,698,296

―

―

―

―

―

As of December 31, 2015

4. Schedule for repayment of loans payable and redemption of investment corporation bonds subsequent to the account closing
date
As of December 31, 2014
Due after
Due after
Due after
Due after
Due within
Due after
one to two
two to three
three to four
four to five
one yearfive years
years
years
years
years
(JPY1000)(JPY1000)(JPY1000)(JPY1000)(JPY1000)(JPY1000)
Current portion of
long-term loans payable

11,825,132

―

―

―

―

―

Investment corporation bonds―

2,500,000――

2,000,000

1,500,000

Long-term loans payable―

13,847,603

10,618,250

13,322,750

6,794,000

18,682,000

11,825,132

16,347,603

10,618,250

13,322,750

8,794,000

20,182,000

Due within
one year(JPY1000)

Due after
one to two
years(JPY1000)

Due after
two to threeyears(JPY1000)

Due after
three to fouryears
(JPY1000)

Due after
four to fiveyears
(JPY1000)

Due after
five years(JPY1000)

9,000,000

―

―

―

―

―

2,500,000

―

―

―

―

―

11,393,603

―

―

―

―

―

Investment corporation bonds

―

―

―

2,000,000―

7,500,000

Long-term loans payable―

9,679,250

13,322,750

6,317,000

13,544,000

27,516,000

22,893,603

9,679,250

13,322,750

8,317,000

13,544,000

35,016,000

Total
As of December 31, 2015

Short-term loans payable
Current portion of
investment corporation bonds
Current portion of
long-term loans payable

Total

－

38

－

[Notes on derivative transactions]
1. Derivative transactions to which hedge accounting is not applied
The contract amount or the amount equivalent to the principal provided in the contract, etc. as of the account closing date ofderivative transactions to which hedge accounting is not applied was as follows:
As of December 31, 2014
(thousands of yen)Classification

Type, etc. of
derivative transaction

Transactions
other thanmarkettransactions

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

Contract amount, etc.
Of which, due
after one year
5,000,000

5,000,000

Fair value

Method to measure the fair value

The fair value is measured at the(37,252) quoted price, etc. obtained from thecounterparty financial institutions.

As of December 31, 2015
(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

848,250

Fair value

Method to measure the fair value(38,598) The fair value is measured at thequoted price, etc. obtained from thecounterparty financial institutions.
34

2. Derivative transactions to 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 foreach method of hedge accounting of derivative transactions to which hedge accounting is applied was as follows:
As of December 31, 2014
(thousands of yen)
Method ofhedge
accounting

DefferalmethodContract amount, etc.

Type, etc. of
derivative transactionMainhedged item

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

Long-termloans payable

55,604,250

48,659,950

Interest rate caps

Long-termloans payable

9,413,500

9,413,500

Of which, due
after one year

Fair value

Method to measure
the fair value

The fair value is(321,499) measured at thequoted price, etc.
obtained from the
4,834 counterparty
financial institutions.

As of December 31, 2015
(thousands of yen)
Method ofhedge
accounting

DefferalmethodContract amount, etc.

Type, etc. of
derivative transactionMainhedged item

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

Long-termloans payable

63,581,950

58,028,750

Interest rate caps

Long-termloans payable

8,565,250

4,286,250

Of which, due
after one year

－

39

－

Fair value

Method to measure
the fair value

The fair value is(495,258) measured at thequoted price, etc.
obtained from the
1,238 counterparty
financial institutions.

[Notes on tax-effect accounting]1.

Significant components of deferred tax assets and liabilities by cause(thousands of yen)
As of

As of

December 31, 2014

December 31, 2015

Deferred tax assets – noncurrent:
Valuation difference on assets accepted throughmergerDeferred losses on hedges

2,084,809

1,833,861

135,963

179,626

Total gross deferred tax assets – noncurrent

2,220,772

2,013,488(2,220,772)(2,013,488)――

Valuation allowance
Total deferred tax assets – noncurrent
2.

Details of major causes of material differences between the statutory tax rate and the tax rate under effective tax accounting
As of

As of

December 31, 2014

December 31, 2015

Statutory tax rate

34.16%

34.15%

Deduction for dividends paid

(30.56%)(32.59%)Change in valuation allowance(3.62%)(2.72%)

Other – net

0.04%

1.17%

Actual effective tax rate

0.02%

0.01%

[Adjustments][Notes on asset retirement obligations]
For the year ended December 31, 2014
Not applicable.
For the year ended December 31, 2015
Not applicable.

[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 year ended December 31, 2014(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 statements of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the statements of income.
(ii) Property and equipment
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

5,627,554

Investment and management of hotel real estate

The Dai-ichi Building Co., Ltd.

1,872,000

Investment and management of hotel real estate

－

40

－

For the year ended December 31, 2015(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 statements of income.
(2) Information about geographical areas(i) Operating revenue
Information about geographical areas has been omitted because operating revenue from external customers in Japanaccounted for more than 90% of total operating revenue on the statements of income.
(ii) Property and equipment
Information about property and equipment has been omitted because the amount of property and equipment located inJapan accounted for more than 90% of net property and equipment on the balance sheets.
(3) Information about major customers(thousands of yen)
Name of customer

Operating revenue

Name of related segment

Hotel Management Japan Co., Ltd.

6,147,639

Investment and management of hotel real estate

AAPC Japan K.K.

2,546,023

Investment and management of hotel real estate

The Dai-ichi Building Co., Ltd.

(Note)

Investment and management of hotel real estate(Note) The operating revenue is not disclosed as consent on disclosure has not been obtained from the hotel lessee.

[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
For the year ended
Use
December 31, 2014
December 31, 2015
Carrying amount

Hotel

Balance at beginning of period

155,753,667

169,847,788

Net increase (decrease) during period

14,094,120

52,514,962

Balance at end of period

169,847,788

222,362,750

205,408,000

302,110,000

Fair value at end of period(Note 1)

For a summary of the rental properties, please refer to “5. Reference information; (2) Assets under management; (C) Other major assets undermanagement; A. Summary of real estate properties under management” on page 52.

(Note 2)Carrying amount recognized in the balance sheet is net of accumulated depreciation, if any, from acquisition price (including costs for acquisitions).
Amounts for machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible assets
other than leasehold rights in trust and facility usage rights are not included.
With regards to Net increase (decrease) during period, increase during the year ended December 31, 2014 principally represents the acquisition of ibis

(Note 3)

Styles Sapporo for ¥6,868 million, Mercure Sapporo for ¥6,102 million and Mercure Okinawa Naha for ¥3,009 million. Decrease during the year
ended December 31, 2014 principally represents the sale of Dormy Inn Namba for ¥683 million. Increase during the year ended December 31, 2015
principally represents the acquisition of the five the b hotels for ¥20,230 million, Hotel Francs for ¥3,181 million, Mercure Yokosuka for ¥1,649
million, Okinawa Marriott Resort & Spa for ¥15,094 million and ACTIVE-INTER CITY HIROSHIMA for ¥17,949 million. Decrease during the year
ended December 31, 2015 principally represents the sale of Comfort Hotel Shin-Yamaguchi for ¥787 million, Daiwa Roynet Hotel Akita for ¥1,644
million and Hotel Sunroute Niigata for ¥1,967 million.
(Note 4)

Fair value at end of period is generally the appraisal value determined by licensed real estate appraisers.

Real estate operating revenue and costs related to the rental properties were as follows:
For the year ended
December 31, 2014

Use(thousands of yen)
For the year ended
December 31, 2015

Amount on the statements of income
Hotel(Note)

Real estate operating revenue

12,760,192

17,033,876

Real estate operating costs

4,163,015

5,002,501

Net real estate operating income

8,597,176

12,031,375“Real estate operating revenue” and “Real estate operating costs” are income from real estate operation (including other income from real estate operation) and corresponding expenses (such as depreciation,
property tax, etc, trust fees, and repairs, maintenance expenses and others), and are included in “Operating revenue” and “Real estate operating costs,” respectively.

－

41

－

[Notes on per unit information]
For the year ended
December 31, 2014

For the year ended
December 31, 2015

Net assets per unit

¥35,948¥41,318

Net income per unit

¥2,159¥3,036(Note 1)

The computation of net income per unit is based on the weighted-average number of units outstanding during the period.

(Note 2)

Diluted net income per unit is not presented since there are no potentially dilutive units.
The basis of computation of net income per unit is as follows:

For the year ended
December 31, 2014
Net income (JPY1000)

For the year ended
December 31, 2015

5,774,880

9,294,677――

Net income attributable to common investment units (JPY1000)

5,774,880

9,294,677

Average number of investment units during period (units)

2,674,377

3,060,647

Amount not attributable to common unitholders (JPY1000)[Notes on significant subsequent events]
1. Acquisition of asset
On February 1, 2016, JHR acquired the following asset.
Property nameCANDEO HOTELS UENO-KOEN

Asset category

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

Asset type

Hotel

Address

1-2-13 Negishi, Taito-ku, Tokyo

Acquisition dateFebruary 1, 2016

SellerGK Ueno Parkside

Acquisition price (Note)¥6,705 million(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

2. Resolution on acquisition of asset
On February 18, 2016, JHR concluded a purchase and sale agreement regarding acquisition of the following asset.
Property name

Hotel Centraza Hakata

Asset category

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

Asset type

Hotel

Address

4-23 Hakata-eki Chuogai, Hakata-ku, Fukuoka-shi, Fukuoka

Anticipated acquisition date

April 1, 2016

Planned seller

The seller is not disclosed as consent on disclosure has not been obtained from the seller.
There are no capital, human or business relationships to be noted between JHR or the AssetManagement Company and the seller. In addition, the seller does not have any special
interest relationship with either JHR or the Asset Management Company.

Anticipated acquisition price(Note)¥7,197 million(Note) The anticipated acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and consumption taxes.

－

42

－

3. Resolution on borrowing of funds
On January 4, 2016, JHR resolved on new borrowings of ¥2,000 million as follows in order to partly fund the acquisition of thereal estate beneficial interest in trust of CANDEO HOTELS UENO-KOEN and movable assets attached thereon as describedabove in “1. Acquisition of asset”
LenderFinancial syndicate arranged by Sumitomo Mitsui Banking Corporation

Planned amount of the loan

¥2,000 million

Interest rate

To be determined

Scheduled date of borrowing

February 29, 2016

Method of principal repayment

To be determined

Maturity date

To be determined

Collateral

Unsecured/Unguaranteed

On February 18, 2016, JHR resolved on new borrowings of ¥7,000 million as follows in order to partly fund the acquisition of
the real estate beneficial interest in trust of Hotel Centraza Hakata and movable assets attached thereon as described above in “2.
Resolution on acquisition of asset.”
LenderFinancial syndicate arranged by Sumitomo Mitsui Banking Corporation

Planned amount of the loan

¥7,000 million

Interest rate

To be determined

Scheduled date of borrowing

April 1, 2016

Method of principal repayment

To be determined

Scheduled maturity date

March 31, 2017

Collateral

Unsecured/Unguaranteed

4. Issuance of new investment units
JHR resolved to issue new investment units at the Board of Directors meetings held on January 4, 2016 and January 13, 2016.
Payment for the new investment units was completed on January 20, 2016 and February 17, 2016, and the investment units were
issued under the following terms and conditions. As a result, JHR’s unitholders’ capital increased to ¥100,088,808,209, with thenumber of investment units issued and outstanding totaling 3,321,907 units.
(a) Issuance of new investment units (public offering)Number of investment units issued:
170,000 units
Issue price:¥85,020 per unit
Total issue price:¥14,453,400,000
Paid-in amount (issue value):¥82,273 per unit
Total paid-in amount (total issue value):¥13,986,410,000
Payment date:
January 20, 2016(b) Issuance of new investment units (third-party allotment)
Number of investment units issued:
7,680 units
Paid-in amount (issue value):¥82,273 per unit
Total paid-in amount (total issue value):¥631,856,640
Payment date:February 17, 2016
Allottee:
SMBC Nikko Securities Inc.
(c) Use of funds
JHR allocated the proceeds obtained from the public offering and the third-party allotment to cash on hand in order tocomplement part of a decrease in cash on hand, which is a decrease that occurred when JHR had used cash on hand to
partly fund the acquisition of ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) (including expenses
for acquisition) that it acquired on December 18, 2015. JHR also used the said proceeds to partly fund the acquisitionof CANDEO HOTELS UENO-KOEN as described above in “1. Acquisition of asset”

－

43

－

(9) Changes in total number of investment units issued and outstanding
Issuance of new investment units through public offering (200,000 units) on January 27, 2015, issuance of new investment
units by way of third-party allotment (9,041 units) on February 18, 2015, issuance of new investment units through public
offering (140,000 units) on June 22, 2015 and issuance of new investment units by way of third-party allotment (3,905 units)on July 23, 2015 resulted in procurement of ¥26,445 million. The following is the status of increase (decrease) in the total
number of investment units issued and outstanding and unitholders’ capital through to the end of the fiscal 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)

June 13, 2006

Capital increase throughpublic offering of investment units

41,80042,20019,361

19,561(Note 2)

April 6, 2011

Capital increase throughthird-party allotment of investment units

15,831

58,031

3,599

23,161(Note 3)

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)September 12, 2012

Capital increase throughpublic offering of investment units

240,000

2,099,281

4,855

28,017(Note 6)

October 11, 2012

Capital increase throughthird-party allotment of investment units

12,0002,111,281

242

28,260(Note 7)

April 17, 2013

Capital increase throughpublic offering of investment units

510,000

2,621,281

20,585

48,845(Note 8)September 9, 2014

Capital increase throughpublic offering of investment units

170,000

2,791,281

10,17959,024(Note 9)January 27, 2015

Capital increase throughpublic offering of investment units

200,000

2,991,281

14,97473,999(Note 10)February 18, 2015

Capital increase throughthird-party allotment of investment units

9,041

3,000,322

676

74,676(Note 11)

June 22, 2015

Capital increase throughpublic offering of investment units

140,000

3,140,322

10,50085,177(Note 12)

July 23, 2015

Capital increase throughthird-party allotment of investment units

3,905

3,144,227

292

85,470(Note 13)

(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)

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 (subscription price of ¥463,200) in order toprocure funds for the acquisition of new properties, etc.
New investment units were issued through third-party allotment with an issue price 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 (subscription price 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 price 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 (subscription price 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 (subscription price 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 (subscription price 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 price 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 (subscription price 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 price 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.

－

44

－

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

Name

Major career
Apr. 1990
Oct. 1998
Nov. 2000
Mar. 2001
Aug. 2002
May 2003

Executive
Director

KanameMasudaSep. 2006
Feb. 2008
Jun. 2008
Sep. 2010
Feb. 2012
Mar. 2014
Jun. 2014
Oct. 2014
Nov. 2015
Apr. 1966

Supervisory
Director

HiroshiMatsuzawaMay 1988
Dec. 1989
May 1991
Jan. 1993
Jun. 1995
Jul. 1999

Sep. 2001
May 2004
Apr. 2012

Number ofinvestment
units held

Registered as a lawyer (Daiichi Tokyo Bar Association)
Joined Nishimura & Partners (Present Nishimura & Asahi)
Joined Merrill Lynch Japan Securities Co., Ltd.
General Counsel
Executive Director (Concurrent position)
Enrolled in Columbia Law School, Columbia University, U.S.
Graduated from Columbia Law School, Columbia University, U.S.
(LL.M.)
Registered as a lawyer, State of New York
Established Masuda & Partners Law Office asManaging Partner (current)
Joined Jibun Bank Corporation as Outside Corporate Auditor(current)
Joined Japan Hotel and Resort, Inc. as Executive Director
Joined Commons Asset Management, Inc. as Outside Corporate
Auditor (current)
Joined GMO Internet, Inc. as Outside Corporate Auditor (current)
Joined Kando Co., Ltd. as Outside Director (current)
Joined CROSSWARP Inc. as Outside Corporate Auditor (current)
Joined Japan Hotel REIT Investment Corporation as Executive
Director (current)0

Joined Sumitomo Mitsui Trust Bank, Limited (formerly, The Mitsui
Trust and Banking Co., Ltd.)
Branch Manager, Yokosuka Branch
Branch Manager, Umeda Branch
General Manager, Investment Advisory Department
General Manager, Pension Fund Management Department
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
Representative Director and President
Joined Premier Investment Corporation as Executive Officer
Joined Japan Hotel REIT Investment Corporation as Supervisory
Director (current)

0

－

45

－

TitleName

Major career
Apr. 1993
Dec. 2000
Sep. 2002
Nov. 2003
Nov. 2005

Supervisory
Director

TetsuyaMishikuDec. 2005
Mar. 2007
Aug. 2010
Sep. 2010
Aug. 2011
Apr. 1971
Apr. 1997
Apr. 1998
Apr. 2002

Supervisory
Director

HirotoKashiiJun. 2003

Jun. 2009
Jun. 2012
Mar. 2013
Jun. 2013
Nov. 2015(Note 1)

(Note 2)

Number ofinvestment
units held

Registered as a lawyer (Daiichi Tokyo Bar Association)
Joined Iinuma Law OfficePartnerPart-time lecturer at Chuo University
Changed registration to Shizuoka Bar Association
Joined Aoba Law Office as Partner
Joined Japan Hotel REIT Investment Corporation (formerly, Nippon
Hotel Fund Investment Corporation) as Supervisory Director(current)
Joined A-too Co., Ltd. as Part-time Corporate Auditor
Joined Healing Entertainment Co., Ltd. as Part-time Corporate
Auditor (current)
Joined Mishiku & Nagamachi Law Office (formerly, Aoi Tower Law
Office) as Representative (current)
Joined Koike Roof and Siding KK as Outside Corporate Auditor of(current)
Joined A-too Co., Ltd. as Outside Director (current)0

Joined Development Bank of Japan, Inc. (formerly, Japan
Development Bank) responsible for lending and investment
General Manager, Retail Department at Head Office
Joined K.K. Hotel Odakyu as Managing Director and General
Manager of Accounting Department
Joined K.K. Hotel Odakyu (formerly, K.K. Odakyu Hotels andResorts) as Managing 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 hotelbusinesses
Joined Kyowa Co., Ltd. as Representative Director
Joined Japan Carbon Finance, Ltd. as Managing Director
Representative Director
Joined DBJ Asset Management Co., Ltd. as Corporate Auditor
Joined Japan Hotel REIT Investment Corporation as Supervisory
Director (current)0

Based on the resolutions made at the 7th General Meeting of Unitholders held on November 26, 2015, Yukio Isa resigned from office of Executive
Director as of the date, and Kaname Masuda newly took office of Executive Director of JHR. In addition, Hiroto Kashii newly took office as
Supervisory Director of JHR.
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.

－

46

－

(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
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 (part-time)
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
General Manager of the Finance Department
Senior General Manager of the Finance & Planning Department
General 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)

－

47

－

Number ofshares held

0

0

0

TitleName

Major career
Apr. 1995
Jan. 1998

Director

NoboruItabashiAug. 1999
Sep. 2006
Apr. 2007
Apr. 2012
Mar. 2015
Sep. 1994
Jun. 1997
Nov. 2001
Jul. 2002

Director

Hiroyuki
Aoki

Aug. 2005
Jan. 2008
Nov. 2011
Dec. 2011
Apr. 2012
Oct. 1987
Oct. 1991
Nov. 1992

Director(Chairman)

SuchadChiaranussati

Nov. 1998
Apr. 1999
Nov. 2004
May 2010
Aug. 2010
Mar. 2011
Aug. 2015
Oct. 2015

Number ofshares held

Joined Asahi Sangyo Kaisha, Ltd., Fabricated Metals Department
Joined British American Tobacco Japan, Ltd. (formerly, Rothmans
Japan), Finance Department
Joined Sun Microsystems K.K., Field Finance Division
Joined Japan Hotel & Resort K.K. and served as Senior Manager of
the Finance and Accounting Division
Senior General Manager of Operations Division
Joined Japan Hotel REIT Advisors Co., Ltd. as General Manager ofthe Accounting Department
Director, Senior General Manager of Operations Division & General
Manager of Accounting and Reporting Department (current)0

Joined Deloitte & Touche LLP, New York Office, Accounting &Audit Department
Joined Ingersoll-Rand Headquarters, Internal Audit Department
Joined KPMG Tax Corporation (formerly, Arthur Andersen LLP)
Joined Ripplewood Holdings LLC, Hotel Investment Group as Vice
President
Joined Creative Renovation Group Japan, Inc. as Vice President of
Finance
Joined Tokyo Venture Gear Co. Ltd. as Director
Appointed Representative Director of SC Capital Partners Japan Co.
Ltd. (formerly, RE Capital Services Japan Co., Ltd.) (current)
Appointed Statutory Auditor (part-time) of Japan Hotel & Resort
K.K.
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)0

Joined the Central Bank of Thailand, Foreign Exchange Reserve
Management Division
Joined Temasek Holdings (in Singapore) and served as Manager of
Direct Investment
Joined JP Morgan (in Singapore) and served as Vice President in theReal Estate Investment and Investment Banking Division
Appointed Advisor at the Central Bank of Thailand
Joined Westbrook in Singapore as Principal and Managing Director
responsible for Asian investment activities
Established Real Estate Capital Asia Partners, L.P.
Appointed Director of Rockrise Sdn Bhd as Director (current)
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)
Appointed Director of SC Capital Partners Pte. Ltd. (current)
Appointed Director of SC J-Holdings Pte. Ltd. (current)
Appointed Chairman (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)

0

－

48

－

TitleName

Major career
May 1989

Director

Ian George
Winston
Lien

Jan. 2003
Oct. 2007
Aug. 2010
Mar. 2011
Mar. 1988
Apr. 1995
Jun. 2007

Director

Chua Keng
Kim

Nov. 2007
Sep. 2008
Aug. 2010
Aug. 2013
Dec. 2015
Apr. 1974
Oct. 1979
Mar. 1998
Apr. 2000

Corporate
Auditor

ShigeoSekitaJan. 2002
Aug. 2005
Sep. 2010
Dec. 2010
Apr. 2012
Oct. 2013

Number ofshares held

Joined Starwood Hotels & Resort Worldwide, Inc. (formerly, Westin
Hotel Company)
Participated in the establishment of Octagon Capital Partners Pte
Ltd. (Co-founder)
Joined SC Management Ltd. as Managing Director
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)
Joined SC Capital Partners Pte. Ltd. as Managing Director (current)0

Joined Government of Singapore Investment Corporation (GIC)
Joined Rodamco PACIFIC B.V. / Rodamco Asia N.V. as Managing
Director and Head of Investment Management
Appointed independent Non-Executive Director and member of the
Audit Committee of Travelsky Technology Ltd
Participated in the establishment of Stonegate China Properties
Limited (Founder and CEO)
Joined SC Management Ltd. as Managing Director
Appointed Director (part-time) of Japan Hotel REIT Advisors Co.,
Ltd. (current)
Appointed Director of SC J-Holdings Pte. Ltd. (formerly, SC CoreManager Pte. Ltd.) (current)
Appointed Director of SC Capital Partners Pte. Ltd. (current)0

Joined Daiwa Securities Co. Ltd.
Joined Mizuho Securities Co., Ltd. (formerly, Wako Securities Co.,
Ltd.)
Seconded to Wako International (Europe) Ltd. as President
Joined Mizuho Securities Co., Ltd. (corporation’s name changed due
to merger) (formerly, Shinko Securities Co., Ltd.) as Manager of the
IPO department
Joined WestLB Securities Inc. as Director of the Investment
Banking Group
Joined Credit Suisse Securities (Japan) Ltd. as Director of theStructured Investment Department
Joined Japan Hotel REIT Advisors Co., Ltd. as Advisor
Representative Director
Corporate Auditor (part-time) (current)
Joined Alpha Japan Asset Advisors Ltd. as Compliance Manager(current)

0(Note) Based on the resolutions made at the Annual Shareholders’ Meeting held on March 20, 2015, Kazuyuki Udo resigned from office of Director, and Noboru
Itabashi newly took office of Director.

－

49

－

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

Assetcategory

Hotel type
(Note 1)

Prefectural
location

As ofDecember 31, 2014
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)Nameibis Tokyo Shinjuku
the b ikebukuro

hotel

Osaka
Hokkaido
Kyoto

7,487

3.1

－

－

6,591

2.7

－

－

6,295

2.6

4,893

2.6

4,873

2.0

Comfort Hotel Tokyo Higashi Nihombashi

3,689

2.0

3,655

1.5

－

－

2,670

1.1

－

－

2,350

1.0

Smile Hotel Nihombashi Mitsukoshimae

2,056

1.1

2,056

0.9

R&B Hotel Ueno Hirokoji

1,760

0.9

1,761

0.7

R&B Hotel Higashi Nihonbashi

1,516

0.8

1,528

0.6

Hotel Vista Kamata Tokyo

1,467

0.8

1,473

0.6

the b suidobashi (Note 4)

1,065

0.6

1,204

0.5

974

0.5

963

0.4

the b ochanomizu

Chisun Inn Kamata

810

0.4

802

0.3

Namba Oriental Hotel

14,746

7.8

14,689

6.1

ibis Styles Sapporo

6,849

3.6

6,788

2.8

Mercure Sapporo

6,079

3.2

6,010

2.5

ibis Styles Kyoto Station

6,743

3.6

6,725

2.8

－

－

2,323

1.0

Hakata Nakasu Washington Hotel Plaza

2,072

1.1

2,075

0.9

the b hakata
Fukuoka

3.9

Hotel Sunroute Shinbashi

Dormy Inn EXPRESS Asakusa

Limited-service

7,386

the b akasaka-mitsuke

the b hachioji
Tokyo

As of
December 31, 2015
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)

Toyoko Inn Hakata-guchi Ekimae

1,520

0.8

1,498

0.6

estateOkinawa

Mercure Okinawa Naha

2,994

1.6

2,953

1.2

in

Kumamoto

Dormy Inn Kumamoto

2,268

1.2

2,232

0.9

trust

Nara

Nara Washington Hotel Plaza

1,949

1.0

1,910

0.8

Niigata

Hotel Sunroute Niigata

1,967

1.0

－

－

1,672

0.9

－

－

799

0.4

－

－

Subtotal

75,28440.0

90,92437.8

Oriental Hotel tokyo bay

18,80010.0

18,512

7.7

－

－

3,165

1.3

－

－

17,934

7.5

Oriental Hotel Hiroshima

4,026

2.1

4,043

1.7

Kobe Meriken Park Oriental Hotel

10,171

5.4

9,963

4.1

－

－

1,659

0.7

32,99917.5

55,27723.0

Hilton Tokyo Bay

26,18913.926,10910.9

Hotel Nikko Alivila

18,4759.8

18,325

7.6

Real

Akita
Yamaguchi

Chiba

Full-service
hotel

Daiwa Roynet Hotel Akita
Comfort Hotel Shin-Yamaguchi

Hotel Francs
ACTIVE-INTER CITY HIROSHIMA

Hiroshima

Hyogo
Kanagawa(Sheraton Hiroshima Hotel) (Note 5)

Mercure Yokosuka
Subtotal

Chiba

Resort hotel

Okinawa

Osaka
Kanagawa－－

15,025

6.3

The Beach Tower Okinawa

6,953

3.7

6,882

2.9

Hotel Keihan Universal City

6,085

3.2

6,019

2.5

Hakone Setsugetsuka

3,848

2.0

3,788

1.6

Subtotal

61,55332.7

76,15031.7

169,83790.3

222,352

92.5

Okinawa Marriott Resort & Spa

Real estate in trust – Total

－

50

－

Assetcategory

Hotel type
(Note 1)

Prefectural
location

As ofDecember 31, 2014
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)

Name

As of
December 31, 2015
Total amount
Ratio toheld
total assets(JPY1M)(%)(Note 2)
(Note 3)Equity interest in silent partnership (Note 6)

602

0.3

－

－

Deposits and other assets (Note 7)

17,651

9.4

18,003

7.5

Total assets

188,091

100.0

240,356

100.0

Amount(JPY1M)

Ratio tototal assets(%)

Amount(JPY1M)

Ratio tototal assets(%)

Total liabilities

87,74846.7

110,44245.9

Total net assets

100,34253.3

129,91454.1(Note 1)
(Note 2)

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(Note 3)

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.

(Note 4)

Dormy Inn Suidobashi terminated operations as a hotel on March 31, 2015. Furthermore, with the completion of the refurbishment work conducted inaccordance with the rebranding of the hotel, it started operations as a hotel from July 1, 2015 under the name of the b suidobashi. In this report, the(Note 5)same shall apply hereinafter.
ACTIVE-INTER CITY HIROSHIMA is classified in accordance with the business category of Sheraton Hiroshima Hotel, its main facility.

(Note 6)(Note 7)

Represents the equity interest in silent partnership with G.K. Tourism Japan No. 1 as a business operator.
Includes machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible assets(excluding leasehold rights in trust).

－

51

－

(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 fiscal period under review.
Details of property assets 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)Land

Building

Chuo-ku,
Kobe-shi,
Hyogo

Leaseholdright(Note 7)Compartmentalized
ownership

Oriental Hoteltokyo bay

Urayasu-shi,
Chiba

Ownership

3

Namba
Oriental Hotel

Chuo-ku,
Osaka-shi,
Osaka

4

Hotel Nikko Alivila

56Structures andstories
Total floor area
2
(Note 4)(m )(Note 3)

22,660.09(Note 7)

48,701.82(Note 7)S
14F

July 1995

319

Ownership

9,914.00

44,833.11

SRC/S/RC
B2/12FMay 1995

503

Ownership

Ownership

4,505.23

19,364.33

S/SRC
B1/9F

March 1996

257

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

Oriental Hotel
Hiroshima

Naka-ku,
Hiroshima-shi,
Hiroshima

Ownership

Ownership

1,792.84

13,752.22

SRC
B2/23F

September 1993
Extended in
September 2006

227

ibis Tokyo Shinjuku

Nishi-Shinjuku,
Shinjuku-ku,
Tokyo

Ownership

Ownership

937.67

7,398.19

SRC/RC/S
B1/11F

September 1980

206

8

The Beach Tower
Okinawa

Chatan-cho,
Nakagami-gun,
Okinawa

Ownership

Ownership

10,242.00

20,140.01

SRC
24F

March 2004
Extended inJune 2005
Extended in
May 2006

280

9

HakoneSetsugetsuka

Hakone-machi,
Ashigarashimogun, Kanagawa

Ownership

Ownership

10,478.89

10,655.03

RC
B1/5F

October 2006

158

10

Dormy Inn
Kumamoto

Kumamoto-shi,
Kumamoto

Ownership

Ownership

1,295.85

7,701.19

SRC
13F

January 2008

294

12

the b suidobashi

Hongo,
Bunkyo-ku,
Tokyo

Ownership

Ownership

723.86

3,097.25

SRC/RC
B1/8F

August 1986
Extended in
September 1989

99

13

Dormy Inn
EXPRESS Asakusa

Hanakawado,
Taito-ku,
Tokyo

Ownership

Ownership

287.66

2,006.51

SRC/RC
10F

March 1997

77

14

Hakata Nakasu
Washington Hotel
Plaza

Hakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

1,128.46

5,692.24

S
12F

March 1995

247

15

Nara
Washington Hotel
Plaza

Nara-shi,
Nara

Ownership

Ownership

2,322.28

5,385.82

S
7F

March 2000

204

16

R&B Hotel
Ueno Hirokoji

Ueno,
Taito-ku,
Tokyo

Ownership

Ownership

446.293,060.21

S
13F

April 2002

187

17

R&B Hotel
Higashi Nihonbashi

Ownership/
Leaseholdright

Ownership

507.83(Note 9)3,715.26

S
10F

March 1998

202

18

Comfort HotelTokyo Higashi
Nihombashi

Ownership

Ownership

823.67

5,765.26

S
11F

January 2008

259

HigashiNihonbashi,
Chuo-ku,Tokyo
Nihonbashibakurocho,
Chuo-ku,Tokyo(Note 7)－52－

Form of ownership(Note 1)
PropertyNo.

Name

LocationLand

Building

Building
completion(Note 5)

Total
numberof guest
rooms(rooms)(Note 6)

March 1997

164

Area
Acreage(m2)(Note 2)

Structures andstories
Total floor area
2
(Note 4)(m )(Note 3)22

Smile Hotel
Nihombashi
Mitsukoshimae

NihonbashiHoncho,
Chuo-ku,Tokyo

Ownership

Ownership24

Toyoko Inn
Hakata-guchi
EkimaeHakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

25

Hotel Vista
Kamata Tokyo

Nishikamata,Ota-ku,Tokyo

Ownership

Ownership

743.46

3,831.80

SRC/S
B1/9F

January 1992

106

26

Chisun Inn Kamata

Kamata,Ota-ku,Tokyo

Ownership

Ownership

240.35

1,499.87

SRC
12F

April 2003

70

29

Hotel Keihan
Universal City

Konohana-ku,
Osaka-shi,
Osaka

Ownership/Compartmentalized
Leaseholdownershipright(Note 10)(Note 10)3,350.14(Note 10)

17,252.71(Note 10)

S/SRC
21F

June 2001

330

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

818

32

ibis Styles
Kyoto Station

Minami-ku,
Kyoto-shi,
Kyoto

Ownership

Ownership

1,107.77

5,003.99

RC
10F

March 2009

215

33

ibis Styles Sapporo

Chuo-ku,
Sapporo-shi,
Hokkaido

Ownership

Ownership

2,515.22

14,992.49

RC
B1/16F

July 2010

278

34

Mercure Sapporo

Chuo-ku,
Sapporo-shi,
Hokkaido

Ownership

Ownership

2,016.27

16,145.79

S
B1/15F

April 2009

285

35

MercureOkinawa Naha

Naha-shi,
Okinawa

Ownership/
Leaseholdright

Ownership

2,860.69(Note 12)

10,884.25

RC
14F

August 2009

260

36

the b
akasaka-mitsuke

Akasaka,Minato-ku,
Tokyo

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

Hachioji-shi,Tokyo

Ownership

Ownership

1,227.29

7,847.65

SRC
B2/12F

August 1986

196

40

the b hakata

Hakata-ku,
Fukuoka-shi,
Fukuoka

Ownership

Ownership

719.46

3,986.09

SRC
8F

September 1997

175

41

Hotel Francs

Mihama-ku,
Chiba-shi,
Chiba

Ownership

Ownership

4,828.00

19,213.39

SRC
B1/13F

August 1991

222

42

Mercure Yokosuka

Yokosuka-shi,
Kanagawa

Right of site
Compartmentalized(coownershipownership)(Note 13)
(Note 13)

1,887.86(Note 13)

16,881.82(Note 13)

SRC/S
B3/21F

November 1993

160

43

Okinawa Marriott
Resort & Spa

Nago-shi,
Okinawa

Ownership

52,988.00

36,430.15

SRC
14F

February 2005
Extended in
December 2006

361

44

ACTIVE-INTER
CITY HIROSHIMA(Sheraton
Hiroshima Hotel)

Higashi-ku,
Hiroshima-shi,
Hiroshima

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

S/RC/SRC
B1/21F

August 2010

Higashiikebukuro,
Toshima-ku,
Tokyo
Kandaawajicho,
Chiyoda-ku,
Tokyo

Ownership

Right of site
Compartmentalized(coownershipownership)(Note 14)
(Note 14)－53

512.583,097.85

SRC/RC
B1/10F

Main building: Main building: Main building:Main building
565.983,566.46
SRC 14F
and annex bothAnnex:
Annex:
Annex:
September 2001
SRC 9F152.37856.68－257

238(Note 15)

(Note 1)(Note 2)“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 coincide(Note 3)

with 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(Note 4)

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.

(Note 5)(Note 6)

“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(Note 7)the end of the fiscal period under review.
The land of Kobe Meriken Park Oriental Hotel is land leased by JHR from the City of Kobe and land with permission for use from the City of Kobe
under the City of Kobe’s ordinance for harbor facilities, etc. The acreage above is based on the value on the building confirmation application form.
The acreage for which permission for use has been obtained is 2,804.18 square meters, of which 1,188.32 square meters is included in the acreage
above. In addition, the building of Kobe Meriken Park Oriental Hotel is a building under compartmentalized ownership by two compartmentalized
owners (JHR and the City of Kobe). The figure above is the total floor area of the entire building under compartmentalized ownership (including anaccessory building of 764.83 square meters), where the portion owned exclusively by JHR (excluding an accessory building of 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).
Furthermore, regarding the portion of the building owned exclusively by the City of Kobe, the building for which JHR has obtained the permission
for use is 694.00 square meters (part of the building for which the permission for use was obtained was returned on April 1, 2010, resulting in total
floor area changing from 824.00 square meters to 694.00 square meters) and is included in the total floor area above of 48,701.82 square meters.

(Note 8)The land of Hotel Nikko Alivila is 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 land leased or land subleased 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.

(Note 9) Of the acreage of R&B Hotel Higashi Nihonbashi, the area of the land leased is 77.38 square meters.
(Note 10) 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.
(Note 11) 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).
(Note 12) The acreage of Mercure Okinawa Naha includes land leased of 125.67 square meters.
(Note 13) The land of Mercure Yokosuka comprises the entire joint ownership of right of site. The acreage is the area equivalent to JHR’s co-ownership interestof the right to use 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, a theater, stores, residential complex, office spaces and parking lots, as a single building (67,019.04 square meters). Total floor areais the area of the portion owned exclusively by the hotel on the certified copy of the real estate registry.
(Note 14) The land of ACTIVE-INTER CITY HIROSHIMA comprises the entire joint ownership of right of site. The acreage is the area equivalent to JHR’s
co-ownership interest 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
CITY HIROSHIMA, which comprises Sheraton Hiroshima Hotel, office spaces, 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 portion owned exclusively by the hotel, office spaces, stores and parking lots on
the certified copy of the real estate registry.
(Note 15) The total number of guest rooms of ACTIVE-INTER CITY HIROSHIMA is the total number of guest rooms of the main facility Sheraton Hiroshima
Hotel.
(Note 16) The omitted numbers are the property numbers of assets that have been transferred before the end of the previous fiscal year.

－

54

－

Details of property assets 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

10,90010,12013,300

Grade(Note 1)

Investment
ratio
(%)
(Note 6)

Collateral(Note 7)J

4.8

Unsecured

Appraisal
agency(Note 5)

1

Kobe Meriken Park Oriental Hotel

2

Oriental Hotel tokyo bay

Mid-price

19,90018,69832,600J

8.8

Unsecured

3

Namba Oriental Hotel

Mid-price

15,00014,77527,000J

6.6

Unsecured

4

Hotel Nikko Alivila

Luxury18,90018,55625,400J

8.4

Unsecured

5

Oriental Hotel Hiroshima

Upper-middle

4,100

4,078

4,180

J

1.8

Unsecured6

ibis Tokyo Shinjuku

Mid-price

7,243

7,559

8,830

J

3.2

Unsecured

8

The Beach Tower Okinawa

Mid-price

7,610

6,882

9,070

J

3.4

Unsecured

9

Hakone Setsugetsuka

Mid-price

4,070

3,797

4,730

J

1.8

Unsecured

10

Dormy Inn Kumamoto

Mid-price

2,334

2,232

2,950

M

1.0

Unsecured

12

the b suidobashi

Mid-price

1,120

1,230

1,750

J

0.5

Unsecured

13

Dormy Inn EXPRESS Asakusa

Economy

999

963

1,220

M

0.4

Unsecured

14

Hakata Nakasu Washington Hotel Plaza

Mid-price

2,130

2,076

3,680

J

0.9

Unsecured

15

Nara Washington Hotel Plaza

Mid-price

2,050

1,916

2,330

J

0.9

Unsecured16

R&B Hotel Ueno Hirokoji

Economy

1,720

1,761

1,810

M

0.8

Unsecured17

R&B Hotel Higashi Nihonbashi

Economy

1,534

1,528

1,960

M

0.7

Unsecured

18

Comfort Hotel Tokyo Higashi Nihombashi

Economy

3,746

3,655

5,110

M

1.7

Unsecured

22

Smile Hotel Nihombashi Mitsukoshimae

Economy

2,108

2,056

2,850

M

0.9

Unsecured24

Toyoko Inn Hakata-guchi Ekimae

Economy

1,652

1,498

2,490

T

0.7

Unsecured

25

Hotel Vista Kamata Tokyo

Economy

1,512

1,473

1,870

T

0.7

Unsecured

26

Chisun Inn Kamata

Economy

823

806

1,270

T

0.4

Unsecured

29

Hotel Keihan Universal City

Mid-price

6,000

6,020

13,600R

2.7

Unsecured

30

Hotel Sunroute Shinbashi

Mid-price

4,800

4,873

7,420

D

2.1

Unsecured

31

Hilton Tokyo Bay

Luxury26,05026,10934,400D

11.5

Unsecured32

ibis Styles Kyoto Station

Mid-price

6,600

6,752

8,590

D

2.9

Unsecured33

ibis Styles Sapporo

Mid-price

6,797

6,802

7,940

J

3.0

Unsecured34

Mercure Sapporo

Mid-price

6,000

6,023

7,840

J

2.7

Unsecured35

Mercure Okinawa Naha

Mid-price

3,000

2,971

5,730

J

1.3

Unsecured36

the b akasaka-mitsuke

Mid-price

6,250

6,313

6,730

J

2.8

Unsecured37

the b ikebukuro

Mid-price

6,520

6,599

7,040

J

2.9

Unsecured38

the b ochanomizu

Mid-price

2,320

2,357

2,540

J

1.0

Unsecured39

the b hachioji

Mid-price

2,610

2,687

2,920

J

1.2

Unsecured40

the b hakata

Mid-price

2,300

2,349

2,700

J

1.0

Unsecured

41

Hotel Francs

Mid-price

3,105

3,165

3,900

D

1.4

Unsecured42

Mercure Yokosuka

Mid-price

1,650

1,668

1,760

D

0.7

Unsecured

43

Okinawa Marriott Resort & Spa

Upper-middle

14,95015,062

16,700J

6.6

Unsecured

44

ACTIVE-INTER CITY HIROSHIMA(Sheraton Hiroshima Hotel)

Luxury17,32017,943

17,900D

7.7

Unsecured

225,723

223,372

302,110

Total

100.0

(Note 1)JHR categorizes hotels into the four classes “Luxury,” “Upper-middle,” “Mid-price” and “Economy” mainly from the perspective of average daily(Note 2)rate, etc.
“Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust or real estate purchase and saleagreement (consumption tax, local consumption tax and the acquisition expense such as broker’s fee are not included). The acceptance prices areindicated for the properties that have been accepted from the former JHR.

(Note 3)“Carrying amount at end of period” is the book value at the end of the fiscal period under review, and includes not only the amounts for real estate intrust, but also machinery and equipment, tools, furniture and fixtures, construction in progress, construction in progress in trust, and intangible assets.

－

55

－

(Note 4)(Note 5)In general, “appraisal value at end of period” is the appraisal value at the end of the fiscal period under review as the date of appraisal, in accordancewith the asset valuation methods and standards provided in JHR’s Articles of Incorporation and the regulations set forth by The Investment Trusts
Association, Japan.
Under “Appraisal agency,” the letters indicate the appraisers for the properties as follows:
M:
T:

Morii Appraisal & Investment Consulting, Inc.
The Tanizawa Sōgō Appraisal Co., Ltd.

J:
R:

Japan Real Estate Institute
Rich Appraisal Institute Co., Ltd.

(Note 6)D:
DAIWA REAL ESTATE APPRAISAL CO.,LTD.
“Investment ratio” is the ratio of acquisition price of the respective asset held at the end of the fiscal period under review to the total amount of(Note 7)acquisition price of all assets held at the end of the fiscal 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.

(Note 8)The omitted numbers are the property numbers of assets that have been transferred before the end of the previous fiscal year.

Details of property assets 3 (change in portfolio tenants)
The following is the change in total number of tenants, occupancy rate, etc. of real estate properties under management for the past
five years.
10th period
March 2011

11th period
September 2011

12th period
March 2012

13th period
December 2012

14th period
December 2013

15th period
December 2014

16th period
December 2015

Number of tenants(Note 1)

18

21

24

37

38

57

113

Total leasable area
(Note 2)

87,562.03 m2

101,028.49 m2

101,028.49 m2

288,875.32 m2

349,162.63 m2

386,826.71 m2

493,758.78 m2

Total leased area
(Note 3)87,562.03 m2

100,529.62 m2

101,028.49 m2

288,875.32 m2

349,162.63 m2

386,447.08 m2

493,138.06 m2

Occupancy rate
(Note 4)100.0%

99.5%

100.0%

100.0%

100.0%

99.9%

99.9%

(Note 1)

Number of tenants indicates the total number of tenants based on the lease contracts for respective real estate in trust (excluding tenants of parking
lots, etc.) as of the end of each fiscal period. However, for properties for which master lease contracts under the pass-through scheme are concluded
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 ofparking lots, etc.) is indicated.

(Note 2)

In principle, 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, leasablearea represents the area described in the registration of the building. Furthermore, when the leasable 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). In this report, the same shall apply(Note 3)

hereinafter.
In principle, 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. from rents, etc. from end tenants as is in principle, the total area for which lease contracts have been concluded with end tenants and which(Note 4)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.
In this report, the same shall apply hereinafter.

Details of property assets 4 (information on major real estate)
Property name(Note 1)

Hilton Tokyo Bay

Total number oftenants

Total annual rent

Total leased area

Total leasable area

1

Fixed rent
¥1,872 million
Variable rent (Note 3)

64,931.94 m2(Note 4)64,931.94 m2(Note 4)

Change in occupancy rate
for the past five years(Note 2)2013

100.0%

2014

100.0%

2015

100.0%(Note 1)

The information on major real estate, which are those where the annual rent total accounts for at least 10% of total annual rent of the entire portfolio.

(Note 2)

Total annual rent of the entire portfolio is the total annual rent calculated based on Note 2 of “C. Status of portfolio diversification” on page 65.
“Change in occupancy rate for the past five years” is only the occupancy rate subsequent to the commencement of asset management by JHR, and(Note 3)indicates the percentage of leased area to leasable area of respective real estate properties in trust as of the end of each fiscal period.
The variable rent of Hilton Tokyo Bay is not disclosed as consent on disclosure has not been obtained from the tenant and thus considered to be a(Note 4)case where disclosure cannot be made due to unavoidable circumstances.
The building of Hilton Tokyo Bay is a building under co-ownership with other right holders. JHR’s co-ownership interest is 64,931.94 square meters(9/10 of co-ownership interest).

－

56

－

Details of property assets 5 (NOI, etc.)
PropertyNo.

Name

Real estate
operating revenue(JPY1000)

Rent type(Note 1)

NOI
(Note 2)
(JPY1000)

NOI after depreciation(Note 3)
(JPY1000)

1

Kobe Meriken Park Oriental Hotel

Variable/Fixed

1,110,773

827,720474,249

2

Oriental Hotel tokyo bay

Variable/Fixed

1,732,754

1,612,380

1,124,380

3

Namba Oriental Hotel

Variable/Fixed

1,279,514

1,179,589

993,375

4Hotel Nikko Alivila

Variable/Fixed

1,604,117

1,452,185

1,126,712

5

Oriental Hotel Hiroshima

Variable/Fixed

421,449

374,552

304,195

6

ibis Tokyo Shinjuku

Management contract

645,794441,934

382,513

8

The Beach Tower Okinawa

Fixed

511,010466,552

346,795

9

Hakone Setsugetsuka

Fixed294,946

272,184

190,332

10

Dormy Inn Kumamoto

Fixed

194,460

170,974

131,36412

the b suidobashi (Note 4)

Variable/Fixed

95,85780,58763,05013

Dormy Inn EXPRESS Asakusa

Fixed

63,99555,28043,016

14

Hakata Nakasu Washington Hotel Plaza (Note 5)

Fixed

240,000

224,000

197,000

15

Nara Washington Hotel Plaza (Note 5)

Fixed

151,000

134,000

93,000

16

R&B Hotel Ueno Hirokoji

Fixed99,14484,75571,987

17

R&B Hotel Higashi Nihonbashi

Fixed122,207105,294

87,59318

Comfort Hotel Tokyo Higashi Nihombashi

Fixed270,114

239,672

204,084

19

Comfort Hotel Shin-Yamaguchi (Note 6)

Fixed

50,11542,08830,15021

Daiwa Roynet Hotel Akita (Note 5) (Note 6)

Fixed

114,000

100,000

71,00022

Smile Hotel Nihombashi Mitsukoshimae

Variable/Fixed(Note 7)

150,510

134,600

116,38823

Hotel Sunroute Niigata (Note 6)

Fixed

129,162

115,32182,60324

Toyoko Inn Hakata-guchi Ekimae

Fixed141,039

127,984

106,59425

Hotel Vista Kamata Tokyo

Variable/Fixed(Note 7)

113,644

98,871

76,46726

Chisun Inn Kamata

Variable

70,44561,20549,63229

Hotel Keihan Universal City

Variable/Fixed(Note 7)

796,456

718,442634,60530

Hotel Sunroute Shinbashi

Variable/Fixed(Note 7)379,770

317,967

296,872

31

Hilton Tokyo Bay

Variable/Fixed(Note 7)

1,953,746

1,648,528

1,488,585

32

ibis Styles Kyoto Station

Management contract

483,439

419,855

388,127

33

ibis Styles Sapporo

Management contract

573,050475,680

404,38934

Mercure Sapporo

Management contract

651,976

439,825

362,969

35

Mercure Okinawa NahaManagement contract392,480

319,576

269,89736

the b akasaka-mitsuke (Note 8)

Variable/Fixed

262,591

258,959

239,81637

the b ikebukuro (Note 8)

Variable/Fixed

330,644

326,021

299,01538

the b ochanomizu (Note 8)

Variable/Fixed

105,117

102,184

93,64139

the b hachioji (Note 8)

Variable/Fixed

200,646

194,205

173,458

40

the b hakata (Note 8)

Variable/Fixed

154,833

150,818

135,421

41

Hotel Francs (Note 9)

Fixed

229,558

227,037

188,452

42

Mercure Yokosuka (Note 10)

Variable

154,815

97,37676,44543

Okinawa Marriott Resort & Spa (Note 11)

Variable/Fixed

722,575

712,453

608,65044

ACTIVE-INTER CITY HIROSHIMA (Note 12)

Variable/Fixed

34,635

17,6202,600

17,033,876

14,829,605

12,031,375

Total

－

57

－

(Note 1)

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 combined fixed and variable rent structure.

(Note 2)
(Note 3)

NOI = Real estate operating revenue − Real estate operating costs + Depreciation + Loss on retirement of noncurrent assets
NOI after depreciation (net real estate operating income) = Real estate operating revenue − Real estate operating costs(Note 4)

For the b suidobashi, the contract was changed to a variable rent contract with Ishin Suidobashi Operations K.K. as lessee on July 1, 2015. In thisreport, the same shall apply hereinafter.

(Note 5)For Hakata Nakasu Washington Hotel Plaza, Nara Washington Hotel Plaza and Daiwa Roynet Hotel Akita, consent on disclosure of rent in units ofthousand yen has not been obtained from the lessor and is thus rounded down to the nearest million yen.

(Note 6)(Note 7)

Comfort Hotel Shin-Yamaguchi, Daiwa Roynet Hotel Akita and Hotel Sunroute Niigata were transferred as of October 30, 2015.
For Smile Hotel Nihombashi Mitsukoshimae, Hotel Vista Kamata Tokyo, Hotel Keihan Universal City, Hotel Sunroute Shinbashi and Hilton Tokyo(Note 8)

Bay, the rent structure is one that has set not only fixed rent, but also partly rent based on revenue sharing.
The b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata were acquired as of January 30, 2015.

(Note 9) Hotel Francs was acquired as of March 31, 2015.
(Note 10) Mercure Yokosuka was acquired as of April 2, 2015.
(Note 11) Okinawa Marriott Resort & Spa was acquired as of July 10, 2015.
(Note 12) ACTIVE-INTER CITY HIROSHIMA was acquired as of December 18, 2015.
(Note 13) The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

－

58

－

Details of property assets 6 (status of rent settings of major tenants)

Tenant name(Note 1)

Property nameBusinesstype

Kobe
Meriken Park
Oriental Hotel
Oriental Hoteltokyo bay

Contract
commencement date
Contract
expiration date

Total leased area
(By hotel)

Total leased area
(By tenant)Ratio tototal
(Note 2)

Ratio tototal
(Note 2)

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

April 1, 2012
December 31, 2019

32,663.90 m2

6.6%

645
(Note 7)

April 1, 2012
December 31, 201944,833.11 m2

9.1%

631
(Note 7)

April 1, 2012
December 31, 201919,364.33 m2

2
3.9% 148,638.54 m

Hotel Nikko
AlivilaApril 1, 2012
December 31, 201938,024.98 m2

7.7%

804
(Note 7)

Oriental Hotel
Hiroshima

April 1, 2012
December 31, 201913,752.22 m2

2.8%

341
(Note 7)

ibis
Tokyo Shinjuku

July 1, 2012
June 30, 2024

5,789.26 m2

1.2%

ibis Styles
Kyoto Station

October 31, 2013
December 31, 2018

4,628.32 m2

0.9%

December 27, 2014
December 27, 2019

14,076.45 m2

2.9%

September 30, 2014
September 30, 2029

12,888.36 m2

2.6%－(Note 8)

MercureOkinawa Naha

September 30, 2014
April 26, 2024

10,884.25 m2

2.2%－(Note 8)

MercureYokosuka

April 2, 2015
August 30, 2019

16,881.82 m2

3.4%－(Note 8)July 1, 2015
December 31, 2018

64,931.94 m2

13.2%

64,931.94 m2

13.2%

Total for major tenants

278,718.94 m2

56.5% 278,718.94 m2

56.5%

Total for entire portfolio

493,138.06 m2 100.0% 493,138.06 m2 100.0%

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

Accor
(AAPC Japan
K.K.)

The Dai-ichi
Building
Co., Ltd.
(Note 9)Namba
Oriental Hotelibis Styles
SapporoMercureSapporoHiltonTokyo BayHotel

Ryokan/HotelReal estateleasing andmanagement

797(Note 7)3,221
(Note 7)－(Note 8)－(Note 8)2

65,148.46 m(Note 1)
(Note 2)
(Note 3)

30.1%

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

13.2%

－
(Note 8)－(Note 8)1,872
(Note 10)1,872
(Note 10)

5,093－
10,768－

5,093－
10,768－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.
(Note 4) Fixed rent is the amount arrived at when the monthly fixed rent income based on lease contracts valid as of December 31, 2015 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 under review) is multiplied by 12, excluding variable rent and income from management contracts.
(Note 5) 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 persons.
(Note 6) HMJ has acquired all shares of Lagoon resort Nago Co., Ltd., which is the lessee and hotel operator of Okinawa Marriott Resort & Spa, and K.K.
A.I.C Hiroshima Management, which is the lessee and hotel operator of Sheraton Hiroshima Hotel (the main facility of ACTIVE-INTER CITYHIROSHIMA). Accordingly, Lagoon resort Nago Co., Ltd. and K.K. A.I.C Hiroshima Management 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 withsponsor-related persons.
The following are the leasing terms and conditions of Okinawa Marriott Resort & Spa and Sheraton Hiroshima Hotel (the main facility of ACTIVEINTER CITY HIROSHIMA). The leased area, ratio of leased area and total annual fixed rent of HMJ and including its wholly-owned subsidiaries
Lagoon resort Nago Co., Ltd. and K.K. A.I.C Hiroshima Management is 206,959.02 square meters, 42.0% and ¥4,119 million, respectively.
Contract
Annual rent
Business commencement date Total leased area
Ratio of
Fixed rent
Tenant name
Property nametype
Contract(m2)
total leased area
Variable rent
expiration date
(JPY1M)
Lagoon resort Nago
July 10, 2015
550
Okinawa Marriott Resort & Spa
Hotel36,430.15
7.4%
Co., Ltd.
December 31, 2020(*)
K.K. A.I.C
ACTIVE-INTER CITY
December 18, 2015
348
Hiroshima
HIROSHIMA
Hotel
21,890.33
4.4%
December 31, 2026(*)
Management(Sheraton Hiroshima Hotel)(*) For details of the variable rent arrangements for Okinawa Marriott Resort & Spa and ACTIVE-INTER CITY HIROSHIMA, please refer to “D.
Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract or revenue sharing” on page 66.
(Note 7) 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 66.
(Note 8) Variable rent for Accor (AAPC Japan K.K.) means income from management contracts and variable rent. For details of the income from management
contract arrangements, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels with variable rent, management contract orrevenue sharing” on page 66.
(Note 9) With expiration of the lease agreement at the end of June 2015, the fixed-term building lease agreement was renewed as of June 30, 2015.
(Note 10) 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.

－

59

－

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 fiscal period underreview (from January 1, 2015 to December 31, 2015).
Figures are rounded down to the nearest thousand yen in principle, but are otherwise noted if circumstances do not allow for
the figures to be stated in units of thousand yen. Income statement items that are not directly attributable to the property are notincluded.
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

-

365

365

365

365

365

(A) Real estate operating revenue subtotal

17,033,876

1,110,773

1,732,754

1,279,514

1,604,117

421,449

Fixed rent

9,909,942

645,900

631,600

797,900

804,100

341,504

Variable rent

6,722,584

463,373

1,101,154

481,614800,017

79,945

Other revenue

401,349

1,499

-

-

-

-

(B) Real estate operating costs subtotal

5,002,501

636,523

608,374

286,139

477,404

117,254

Land lease and other rent expenses

463,289

220,038--

84,149-Property taxes

940,806

55,725

115,123

96,57460,401

42,210Outsourcing expenses

387,958

960

960

960

1,920

960

Nonlife insurance

32,334

3,405

3,277

1,367

2,423

1,113

Depreciation and amortization

2,772,440

352,144486,562

166,125

322,536

70,356

Loss on retirement of noncurrent assets

25,790

1,326

1,437

20,0882,936-

Other costs

379,881

2,924

1,013

1,023

3,037

2,613

(C) Net real estate operating income = (A) − (B)12,031,375

474,249

1,124,380

993,375

1,126,712

304,195(Reference) Occupancy rate at end of period

99.9%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants at end of period

113

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

365

365

365

365

365

365

(A) Real estate operating revenue subtotal

645,794

511,010

294,946

194,460

95,857

63,995

Fixed rent

101,172

511,008

294,340

194,460

84,49963,395

Variable rent

470,000---

11,357-

Other revenue

74,621

2

606

-

-

600

(B) Real estate operating costs subtotal

263,281

164,214104,613

63,09532,806

20,979Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

33,57239,364

21,277

19,578

7,989

6,026

Outsourcing expenses

88,346

-

-

-

700

1,320

Nonlife insurance

652

1,307

671

470

211

130

Depreciation and amortization

59,420119,756

81,851

39,60917,536

12,264

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

81,289

3,786

813

3,436

6,368

1,238

(C) Net real estate operating income = (A) − (B)382,513346,795

190,332

131,364

63,05043,016(Reference) Occupancy rate at end of period

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants at end of period

4

1

1

1

1

1

－

60

－

Property No.

14

15

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

Property name

16

17

18

19

R&B Hotel
Ueno
Hirokoji

R&B Hotel
HigashiNihonbashi

Comfort HotelTokyo Higashi
Nihombashi

Comfort Hotel
Shin-Yamaguchi(Note 3)365

302

Number of operating days

365

365

365

365

(A) Real estate operating revenue subtotal

240,000

151,000

99,144

122,207

270,11450,115

Fixed rent

240,000

146,000

96,504

122,207258,90949,616

Variable rent

-

-

-

-

-

-

Other revenue

0

4,000

2,639

-

11,205499(B) Real estate operating costs subtotal

43,00057,00027,156

34,613

66,03019,965Land lease and other rent expenses

-

-

-

5,400

-

-

Property taxes

12,00012,00011,8308,627

26,374

5,123

Outsourcing expenses

1,000

3,000

840

1,200

1,614

695

Nonlife insurance

0

0

182

225

442

128

Depreciation and amortization

26,00040,00012,767

17,70035,587

11,938Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

1,000

1,000

1,535

1,459

2,011

2,079

(C) Net real estate operating income = (A) − (B)197,000

93,00071,98787,593204,084

30,150(Reference) Occupancy rate at end of period

100.0%

100.0%

100.0%

100.0%

100.0%-(Reference) Number of tenants at end of period

1

2

1

1

2

-

Property No.

21

22

Daiwa Roynet
Smile Hotel
Hotel Akita
Nihombashi(Note 2) (Note 3) Mitsukoshimae

Property name

23

24

25

26

Hotel Sunroute
Niigata(Note 3)

Toyoko Inn
Hakata-guchi
EkimaeHotel Vista
Kamata Tokyo

Chisun Inn
KamataNumber of operating days

302

365

302

365

365

365

(A) Real estate operating revenue subtotal

114,000

150,510129,162

141,039

113,644

70,445

Fixed rent

114,000

134,400

129,161

141,039

93,534-

Variable rent-

16,110--20,04070,445

Other revenue

-

-

1

-

70

-

(B) Real estate operating costs subtotal

42,00034,122

46,55834,44437,177

20,812Land lease and other rent expenses

-

-

-

-

-

-

Property taxes

10,00012,272

8,815

10,445

11,931

4,676

Outsourcing expenses

2,000

1,200

1,689

1,080

1,200

1,080

Nonlife insurance

0

221

423

282

246

103

Depreciation and amortization

28,00018,212

32,717

21,39022,403

11,573

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

0

2,216

2,913

1,246

1,395

3,379

(C) Net real estate operating income = (A) − (B)71,000116,388

82,603

106,594

76,467

49,632(Reference) Occupancy rate at end of period-

100.0%-

100.0%

100.0%

100.0%(Reference) Number of tenants at end of period

-

1

-

1

1

1

－

61

－

Property No.

29

30

31

32

33

34

Property name

Hotel Keihan
Universal City

Hotel Sunroute
Shinbashi

HiltonTokyo Bay

ibis Styles
Kyoto Station(Note 1)

ibis Styles
Sapporo(Note 1)

MercureSapporo(Note 1)

365

365

365

365

365

365

(A) Real estate operating revenue subtotal

796,456

379,770

1,953,746

483,439

573,050

651,976

Fixed rent

(Note 4)282,266(Note 4)42,33426,266

63,515

Variable rent

(Note 4)64,463(Note 4)437,444

513,155

464,422

Other revenue(Note 4)33,039(Note 4)

3,660

33,628124,038(B) Real estate operating costs subtotal

161,851

82,897465,161

95,312

168,660

289,007

Land lease and other rent expenses

21,110-132,257--

42

Property taxes

45,61424,999137,629

17,97827,41436,349Outsourcing expenses

6,186

4,710

25,30938,87936,36487,497

Nonlife insurance

1,432

359

3,712

434

925

1,055

Depreciation and amortization

83,83721,094

159,942

31,72871,29076,855

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

3,669

31,733

6,310

6,291

32,666

87,206(C) Net real estate operating income = (A) − (B)634,605

296,872

1,488,585

388,127404,389

362,969(Reference) Occupancy rate at end of period

100.0%

100.0%

100.0%

100.0%

99.4%

97.5%

(Reference) Number of tenants at end of period

1

4

1

2

5

13

Number of operating days

Property No.

35

36

37

38

39

40

Property nameMercureOkinawa Naha
(Note 1)the bakasaka-mitsuke(Note 5)the bikebukuro(Note 5)the bochanomizu(Note 5)the bhachioji(Note 5)the bhakata(Note 5)

Number of operating days

365

336

336

336

336

336

(A) Real estate operating revenue subtotal

392,480

262,591

330,644

105,117200,646

154,833

Fixed rent

3,150

125,751

199,933

63,620111,627

77,635

Variable rent

378,377

136,840

129,394

41,322

81,10576,803

Other revenue

10,952

-

1,316

173

7,913

393

(B) Real estate operating costs subtotal

122,583

22,77531,62911,47527,187

19,412Land lease and other rent expenses

291

-

-

-

-

-

Property taxes

17,371

-

-

-

-

-

Outsourcing expenses

48,954

1,206

1,206

1,206

1,206

1,206

Nonlife insurance

670

238

420

126

456

238

Depreciation and amortization

49,67819,14327,005

8,543

20,746

15,397

Loss on retirement of noncurrent assets

-

-

-

-

-

-

Other costs

5,617

2,187

2,996

1,599

4,778

2,570

(C) Net real estate operating income = (A) − (B)269,897

239,816

299,015

93,641

173,458

135,421(Reference) Occupancy rate at end of period

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants at end of period

1

2

4

1

13

1

－

62

－

Property No.

41

42

Number of operating days

44

ACTIVE-INTER
Okinawa Marriott
CITY
Resort & Spa
HIROSHIMA(Note 8)(Note 9)MercureYokosuka(Note 7)

Hotel Francs(Note 6)

Property name

43

276

274

175

14

(A) Real estate operating revenue subtotal

229,558

154,815

722,575

34,635

Fixed rent

(Note 4)-

261,693

29,324

Variable rent-

117,907

460,881907

Other revenue(Note 4)36,907-4,403(B) Real estate operating costs subtotal

41,10678,369113,924

32,035Land lease and other rent expenses

-

-

-

-

Property taxes

-

-

-

-

Outsourcing expenses

1,354

13,356

1,341

3,875

Nonlife insurance

793

1,743

1,247

142

Depreciation and amortization

38,58520,931

103,802

15,020Loss on retirement of noncurrent assets

-

-

-

-

Other costs

372

42,338

7,532

12,996(C) Net real estate operating income = (A) − (B)188,452

76,445

608,650

2,600(Reference) Occupancy rate at end of period

100.0%

100.0%

100.0%

100.0%(Reference) Number of tenants at end of period

1

1

1

37

(Note 1)

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 66.

(Note 2)
(Note 3)

Consent on disclosure of rent in units of thousand yen has not been obtained from the lessee and is thus rounded down to the nearest million yen.
Comfort Hotel Shin-Yamaguchi, Daiwa Roynet Hotel Akita and Hotel Sunroute Niigata were transferred as of October 30, 2015.

(Note 4)

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.

(Note 5)(Note 6)The b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata were acquired as of January 30, 2015.
Hotel Francs was acquired as of March 31, 2015.

(Note 7)(Note 8)

Mercure Yokosuka was acquired as of April 2, 2015.
Okinawa Marriott Resort & Spa was acquired as of July 10, 2015.

(Note 9) ACTIVE-INTER CITY HIROSHIMA was acquired as of December 18, 2015.
(Note 10) The property numbers of assets that were transferred before the end of the previous fiscal year are intentionally omitted.

－

63

－

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 fiscal 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

6,949

91,16840.4

Full-service hotel

4,517

56,97525.2

Resort hotel

6,626

77,580

34.4

Total

18,093

225,723

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 fiscal 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

1,067

12,797

5.7

Tokyo

2,856

43,305

19.2

Kanto (excluding Tokyo)

4,425

54,775

24.3

Kansai

3,780

40,55018.0

Okinawa

4,004

44,460

19.7

Other

1,959

29,836

13.2

Total

18,093

225,723

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 fiscal period under review were as follows:
Total annual rent
Acquisition priceInvestment ratio
Hotel grade(Note 2)
(Note 3)(Note 4)
(JPY1M)(JPY1M)(%)
Luxury4,342

62,27027.6

Upper-middle

3,041

29,95013.3

Mid-price

9,692

119,409

52.9

Economy

1,016

14,094

6.2

Total

18,093

225,723

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 fiscal 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 December 2015:
Total annual rent
Acquisition priceInvestment ratio
Building age(Note 2)
(Note 3)(Note 4)
(JPY1M)(JPY1M)(%)
Less than 5 years (inclusive)

―

―

―

More than 5 years,
less than 10 years (inclusive)

3,816

54,66724.2

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

5,421

65,316

28.9

More than 20 years

8,854

105,74046.8

225,723

100.0

Total

18,093－64－

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 fiscal period under review by the remaining contract term of the assets held at the end of the fiscal
period under review were as follows, where the remaining contract term is the period from the last day of December 2015
to the lease contract expiration date:
Total annual rent
Ratio of total annual rent
Remaining contract term
(Note 2)to total(JPY1M)(%)
Less than 5 years (inclusive)

10,72059.3

More than 5 years,
less than 10 years (inclusive)

5,311

29.4

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

2,060

11.4

―

―

18,093100.0

More than 20 years
Total

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 fiscal period under review by the rent type of the assets held at the end of the fiscal period underreview were as follows, where fixed rent refers to fixed rent contracts and variable rent, etc. refers to variable rent
contracts and management contracts:
Total annual rent
Ratio of total annual rent
Rent type(Note 2)to total(JPY1M)(%)
Fixed rent

10,76859.5

Variable rent, etc.

7,325

40.5

Total

18,093100.0(Note 1)

Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.

(Note 2)

“Total annual rent” is the total of the amount arrived at when the monthly fixed rent income based on lease contracts valid as ofDecember 31, 2015 (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 under review) is multiplied by 12, variable rent and income frommanagement contracts. Variable rent and income from management contracts are based on the amount actually generated from January
1, 2015 to December 31, 2015. However, the calculation for the five the b hotels is the amount arrived at when the total amount ofvariable rent actually generated in the period of 336 days from January 30, 2015 to December 31, 2015 is divided by 336 andmultiplied by 365, that for Mercure Yokosuka is the amount arrived at when the total amount of variable rent actually generated in the
period of 274 days from April 2, 2015 to December 31, 2015 is divided by 274 and multiplied by 365, that for Okinawa Marriott Resort& Spa is the amount arrived at when the total amount of variable rent actually generated in the period of 175 days from July 10, 2015
to December 31, 2015 is divided by 175 and multiplied by 365, and that for ACTIVE-INTER CITY HIROSHIMA is the amountarrived at when the total amount of variable rent actually generated in the period of 14 days from December 18, 2015 to December 31,
2015 is divided by 14 and multiplied by 365. For details of the contracts of the hotels with revenue sharing, with variable rent oroperated under a management contract structure, please refer to “D. Overview of the hotel business; (1) Rent structures of hotels withvariable rent, management contract or revenue sharing” on page 66.

(Note 3)(Note 4)

“Acquisition price” is the acquisition price stated on the purchase and sale agreement for beneficial interest in trust or real estatepurchase and sale agreement (consumption tax, local consumption tax and the acquisition expense such as broker’s fee are notincluded). The acceptance prices are indicated for the properties that have been accepted from the former JHR.
“Investment ratio” is the ratio of total acquisition price of the assets held at the end of the fiscal period under review that are of therespective type to the total of acquisition price of all assets held at the end of the fiscal period under review, rounded off to one decimal
place.

(Note 5)

Tokyo means Tokyo metropolitan area. Kanto (excluding Tokyo) means Kanagawa, Chiba, Saitama, Ibaraki, Gunma, Tochigi and
Yamanashi prefectures. Kansai means Kyoto, Osaka, Shiga, Hyogo, Nara and Wakayama prefectures. Okinawa means Okinawa
prefecture.

－

65

－

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

The
HMJ
Group
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 81.5% (Note 1).
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 2).

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 Hiroshima Hotel)

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 (Note 4)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%
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 5)

Smile Hotel Nihombashi Mitsukoshimae

Fixed +
Revenue sharing

25

Hotel Vista Kamata Tokyo (Note 6)

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 5)
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).
Amount that is a certain percentage of sales exceeding the threshold(Note 5)
Amount that is a certain percentage of sales exceeding the threshold(Note 5)
Amount that is a certain percentage of sales exceeding the threshold(Note 5)

Variable
Fixed +
Revenue sharing
Fixed +
Revenue sharing
Fixed +
Revenue sharing(Note 1)

Concerning a fixed-term lease agreement on the five HMJ hotels, JHR concluded an agreement to change the variable rent ratio from 81.5% to85.0% effective as of January 1, 2016.

(Note 2)

Breakdown of the GOP base amount set individually for the five HMJ hotels
Hotel name
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
Total(Note 3)

Annual GOP base amount¥230,000 thousand¥3,351,000 thousand

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

(Note 4)On July 1, 2015, Dormy Inn Suidobashi was changed to a variable rent contract with Ishin Suidobashi Operations K.K. as lessee and started
operations as a hotel under the name of the b suidobashi. In this report, the same shall apply hereinafter.

－

66

－

(Note 5)(Note 6)The detailed content of the contract is not disclosed as consent on disclosure has not been obtained from the lessee.
Hotel Vista Kamata Tokyo underwent a contract change on July 1, 2015. When hotel total sales from January 1 to December 31 of every year
(however, from July 1 to December 31 in the case of 2015) exceeds ¥270 million (however, ¥270 million × Actual number of days from July 1
to December 31 ÷ 365 days in the case of 2015), the amount arrived at when the amount exceeding that is multiplied by 32.5% is received asrevenue sharing in addition to fixed rent.

(2) Major indicators of the hotel business
The following tables indicate the figures related to the hotel business of the HMJ group hotels, the six Accor hotels and thesix the b hotels for the operating period from January 1, 2015 through December 31, 2015, based on the data provided by thehotel lessees. Furthermore, while the 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 HMJ Group Hotels
Kobe
Meriken Park
Oriental Hotel

Oriental Hoteltokyo bay

Namba
Oriental Hotel

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Hotel Nikko
AlivilaOriental Hotel
Hiroshima

Ratio to
total
sales
(%)

Okinawa
Sheraton
Marriott Resort
Hiroshima Hotel& Spa(Note 5)(Note 4)
Ratio toRatio toRatio to
total
total
total
sales
sales
sales
(%)
(%)
(%)

The Five HMJ
HotelsTotal/Average

Ratio to
total
sales
(%)

80.0%

－

98.1%

－

89.7%

－

83.6%

－

80.0%

－

87.7%

－

87.9%

－

85.4%

－

17,361－

20,027－

16,949－26,651

－

8,908

－

19,212－

19,025－

16,429－

RevPAR(Note 2)

13,896－

19,655－

15,204－

22,283

－

7,122

－

16,843－

16,717－

14,024－

Total sales

5,252

100.0

7,322

100.0

2,530

100.0

5,948

100.0

2,134

100.0

23,186

100.0

4,016

100.0

2,847

100.0

1,783

33.9

3,978

54.3

1,571

62.1

3,551

59.7

649

30.4

11,532

49.7

2,427

60.4

1,340

47.1

3,126

59.5

2,871

39.2

165

6.5

1,905

32.0

1,410

66.1

9,477

40.9

1,159

28.9

1,408

49.4

60

1.1

250

3.4

750

29.6

2

0.0

23

1.1

1,083

4.7

79

2.0

13

0.5

284

5.4

224

3.1

45

1.8

489

8.2

52

2.4

1,093

4.7

352

8.8

87

3.0

1,168

22.2

2,044

27.9

1,423

56.2

1,977

33.2

328

15.4

6,941

29.9

1,230

30.6

716

25.1

Occupancy rate
ADR
(Note 1)Rooms
department
Food &
beveragedepartment
Tenantdepartment
Other
departments(Note 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(Note 2)

total number of rooms sold during the period. The same shall apply hereinafter.
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 andoccupancy rate. The same shall apply hereinafter.

(Note 3)(Note 4)

Figures for the Other departments include sales of the department for sale of goods.
For Okinawa Marriott Resort & Spa, which JHR acquired on July 10, 2015, the annual figures are for throughout the year including those prior(Note 5)to the acquisition.
The indicated figures are for Sheraton Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA. For ACTIVE-INTER CITYHIROSHIMA (Sheraton Hiroshima Hotel), which JHR acquired on December 18, 2015, the annual figures are for throughout the year
including those prior to the acquisition.

(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.

－

67

－

(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
(%)

Mercure Yokosuka(Note 1)

Ratio to
total
sales
(%)

Total/Average(Note 2)

Ratio to
total
sales
(%)

Ratio to
total
sales
(%)

Occupancy rate

88.5%

－

90.7%

－

87.8%

－

82.1%

－

80.7%

－

89.5%

－

86.1%

－

ADR

11,809－10,491

－

9,335

－

11,009－10,038－

11,561－

10,605－

RevPAR

10,456

－

9,520

－

8,197

－

9,044

－

8,097

－

10,352

－

9,130

－

Total sales

873

100.0

814

100.0

1,019

100.0

1,172

100.0

923

100.0

1,062

100.0

5,863

100.0

782

89.6

747

91.8

832

81.6

941

80.3

765

82.9

605

56.9

4,672

79.7

71

8.1

61

7.5

163

16.0

221

18.9

131

14.2

437

41.1

1,084

18.5

20

2.3

6

0.7

24

2.4

10

0.8

26

2.8

21

2.0

108

1.8

470

53.8

437

53.7

513

50.3

464

39.6

392

42.5

235

22.1

2,512

42.8

Rooms
department
Food &
beveragedepartment
Other
departments
GOP(Note 1)For Mercure Yokosuka, which JHR acquired on April 2, 2015, the annual figures are for throughout the year including those prior to theacquisition.

(Note 2)

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(Note 1)
Ratio to
total
sales
(%)

the b
akasaka-mitsuke(Note 2)
Ratio to
total
sales
(%)

－%

－

89.6%

－

91.7%

－

90.8%

－

90.7%

－

95.4%

－

91.9%

－

ADR

－

－

11,494－

10,494－

10,936

－

7,074

－

6,580

－

8,842

－

RevPAR－－

10,301

－

9,626

－

9,932

－

6,414

－

6,277

－

8,124

－

Total sales

－

－

464

100.0

625

100.0

262

100.0

558

100.0

406

100.0

2,315

100.0

－

－

459

98.9

615

98.4

261

99.4

459

82.3

401

98.8

2,194

94.8

－

－

－

－

－

－

－

－

95

17.0

－

－

95

4.1

－

－

5

1.1

10

1.6

1

0.6

4

0.8

5

1.2

26

1.1

－

－

266

57.4

320

51.2

122

46.5

193

34.5

178

43.9

1,079

46.6

Occupancy rate

Rooms
department
Food &
beveragethe bikebukuro(Note 2)
Ratio to
total
sales
(%)

the b
ochanomizu(Note 2)
Ratio to
total
sales
(%)

the b
hachioji(Note 2)
Ratio to
total
sales
(%)

the b
hakata(Note 2)
Ratio to
total
sales
(%)

Total/Average(Note 3)
Ratio to
total
sales
(%)

department
Other
departments
GOP(Note 1)For the b suidobashi, there is no figure available for disclosure for the operating period ended December 31, 2015 as no data exist for the period(Note 2)

before July 1, 2015.
For the five the b hotels, which JHR acquired on January 30, 2015, the annual figures are for throughout the year including those prior to the(Note 3)acquisition.
For Total/Average, figures are calculated by JHR since no figures have been provided by the hotel lessees. Furthermore, the figures represent
the total and average of the five the b hotels, or the six the b hotels excluding the b suidobashi.

－

68

－

E. Status of capital expenditures
a. Planned capital expenditures (Note)
The following table shows major estimated capital expenditures for renovation work planned as of the end of the fiscal
period under review for real estate properties under management by JHR. Expenditures are expected to total ¥2,582 million,
which consists of capital expenditures of ¥2,532 million and repair expenses of ¥49 million, for the following fiscal period.
Estimated construction costs(JPY1M)
Name of property, etc.
PurposeScheduled period
Payment Total(Location)
Total
for the amountamountperiodpaid
Kobe Meriken Park Oriental Hotel(Kobe-shi, Hyogo)

Renewal of guest rooms on the 7th floor

From January 2016
to March 2016

50

―

―

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

Renovation of guest room balconies

From January 2016
to April 2016

62

―

―

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

Renewal of sky lounge “Kou’s” andrenovation of elevator halls andpathways on the 14th floor

From June 2016
to July 2016

80

―

―

Oriental Hotel tokyo bay(Urayasu-shi, Chiba)

Renewal of guest rooms on the 4th floor

From January 2016
to February 2016

102

―

―

Namba Oriental Hotel(Osaka-shi, Osaka)Renewal of guest rooms on the 9th floor

From January 2016
to February 2016

91

―

―

Hotel Nikko Alivila(Yomitan-son, Nakagami-gun,
Okinawa)

Renewal of guest rooms on the 9th floor

From May 2016
to June 2016

55

―

―

ibis Tokyo Shinjuku(Shinjuku-ku, Tokyo)

Replacement of piping

From May 2016
to July 2016

83

―

―

ibis Tokyo Shinjuku(Shinjuku-ku, Tokyo)

Replacement of interior fittings andfurniture and prefabricated bathrooms inguest rooms on the 3rd through 10th floors

From May 2016
to July 2016

164

―

―

Hilton Tokyo Bay(Urayasu-shi, Chiba)

Replacement of emergency power
generator

From February 2016
to April 2016

60

―

―

Hilton Tokyo Bay(Urayasu-shi, Chiba)

Renewal of disaster prevention facilities

From January 2016
to July 2016

92

―

―

Okinawa Marriott Resort & Spa(Nago-shi, Okinawa)

Renewal of hotel operation systems

From November 2015
to March 2016

55

―

―

895

―

―

Total

(Note) For new construction and renewal work, estimated construction costs include those for buildings, attached facilities, etc. as well as items classified asfurniture and fixtures. The scheduled period of the above planned repair work and whether or not the repair 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 fiscal period underreview that represents capital expenditures is as below. Capital expenditures for the fiscal period under review totaled ¥1,811
million, and repair expenses that were accounted for as expense in the fiscal period under review totaled ¥65 million. In
aggregate, ¥1,876 million of construction work was carried out.
Name of property, etc.
(Location)

Purposethe b suidobashi(Bunkyo-ku, Tokyo)

Replacement of air conditioning units

From April 2015
to June 201555

the b suidobashi(Bunkyo-ku, Tokyo)

Renewal in association with re-branding

From April 2015
to June 2015

60

ibis Tokyo Shinjuku Replacement of interior fittings and furniture and prefabricated(Shinjuku-ku, Tokyo) bathrooms in guest rooms on the 4th through 10th floors

From September 2015
to November 201591

PeriodTotal

Construction costs(JPY1M)

207(Note) For new construction and renewal work, construction costs include those for buildings, attached facilities, etc. as well as items classified as furniture andfixtures.

－69－