[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
July 17, 2018
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Name of representative:
Naoki Fukuda, Executive Director
Roppongi Hills Mori Tower
6-10-1 Roppongi, Minato-ku, Tokyo, Japan(Securities code:8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, CEOContact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Revision of Forecast of Financial Results and Distribution for the 30th
Fiscal Period Ended June 2018 and 31st Fiscal Period Ending December 2018
Invincible Investment Corporation (“INV”) today announced the revision of its forecast of financial
results and Distribution per Unit (“DPU”) for the fiscal period ended June 2018 (30th Fiscal Period)and fiscal period ending December 2018 (31st Fiscal Period) as announced in “Notice concerning
Revision of Forecast of Financial Results and Distribution for the 30th Fiscal Period Ending June2018 and 31st Fiscal Period Ending December 2018” dated June 25, 2018.
1.

Revision of forecasts of financial results and DPU for the fiscal periods ended June 2018 (fromJanuary 1, 2018 to June 30, 2018 ) and the fiscal period ending December 2018 (from July 1,
2018 to December 31, 2018)<Fiscal Period Ended June 2018>
Operating
Revenues

Operating
IncomeOrdinary
Income

JPY million

JPY million

JPY million

JPY million

Total
Distribution
Amount
JPY million

12,983

8,274

7,560

7,559

6,806

Revised forecast (B)JPY million
13,039

JPY million
8,301

JPY million
7,590

JPY million
7,590

JPY million
6,835

Amount of Variance(B) – (A)JPY million
56

JPY million
27

JPY million
30

JPY million
30

JPY million
28

%
0.4

%
0.3

%
0.4

%
0.4

%
0.4

Previous forecast (A)(announced onJune 25, 2018)

Rate of variance((B) – (A)) / (A)Net Income

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

1

Distribution
per Unit
Earnings per
Unit (Note 1,2)

Previous forecast (A)(announced onJune 25, 2018)(Excluding
Excess Profit
Distribution perUnit) (Note 1,2)

Excess Profit
Distribution
per Unit (Note1)

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

JPY

JPY

JPY

JPY

1,577

1,420

-

1,420

Revised forecast (B)

JPY
1,583

JPY
1,426

JPY
-

JPY
1,426

Amount of Variance(B) – (A)

JPY
6

JPY
6

JPY
-

JPY
6

Rate of variance((B) – (A)) / (A)

%
0.4

%
0.4

%
-

%
0.4

(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 4,793,181 units(Note 2) The difference between the Earnings per Unit and Distribution per Unit (Excluding Excess Profit Distribution per Unit) is due tointernal reserve from net income. Please refer to Appendix 1 <Assumptions Underlying the Forecast of Financial Results andDistribution for the June 2018 Fiscal Period and the December 2018 Fiscal Period > “Distribution per unit” for details.

<Fiscal Period Ending December 2018>
Operating
Revenues

Operating
IncomeOrdinary
Income

JPY million

JPY million

JPY million

JPY million

Total
Distribution
Amount
JPY million

13,091

8,310

7,565

7,565

7,645

Revised forecast (B)JPY million
14,278

JPY million
9,247

JPY million
7,961

JPY million
7,960

JPY million
9,674

Amount of Variance(B) – (A)JPY million
1,187

JPY million
936

JPY million
395

JPY million
395

JPY million
2,029

%
9.1

%
11.3

%
5.2

%
5.2

%
26.5

Previous forecast (A)(announced onJune 25, 2018)

Rate of variance((B) – (A)) / (A)Distribution
per Unit
Earnings per
Unit (Note 1,2)

Previous forecast (A)(announced onJune 25, 2018)
Revised forecast (B)(Excluding
Excess Profit
Distribution perUnit) (Note 1,2)

Net Income

Excess Profit
Distribution
per Unit (Note1)

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

JPY

JPY

JPY

JPY

1,578

1,595

-

1,595

JPY
1,384

JPY
1,516

JPY
167

JPY
1,683

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

2

Amount of Variance(B) – (A)

JPY
(194)

JPY
(79)

JPY
167

JPY
88

Rate of variance((B) – (A)) / (A)%(12.3)

%
(5.0)

%
-

%
5.5

(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 4,793,181 units (previous forecast)and 5,748,181 units (revised forecast)(Note 2) The difference between the Earnings per Unit and Distribution per Unit (Excluding Excess Profit Distribution per Unit) is due to
distribution from internal reserve. Please refer to Appendix 1 <Assumptions Underlying the Forecast of Financial Results andDistribution for the June 2018 Fiscal Period and the December 2018 Fiscal Period > “Distribution per unit” for details.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

3

(Reference)
Assumptions underlying the forecast of financial results and distributions for the fiscal period ended June2018 and the fiscal period ending December 2018 are provided in Appendix 1.
Simulated distribution per unit for the year 2018 are shown for reference purposes, which are calculated byapplying adjustments, as the DPU for the fiscal period ended June 2018 could be affected by one-off
expenses due to the sale of properties (Note 1) and acquisition of assets (Note 2) in the fiscal period ended
June 2018 (collectively, the “Transactions in the Fiscal Period Ended June 2018”), and the DPU for the fiscal
period ending December 2018 will be affected by one-off expenses due to the refinancing loan announced asof July 12, 2018 (Note 3) (“Refinance in July 2018”), acquisition of properties announced as of July 17, 2018
(Note 4), the issuance of new investment units through the public offering and the third party allotment(collectively, the “Public Offering”) (Note 5) and the new borrowings (the “Borrowings”) (Note 6) (collectively,
the “Transactions in the Fiscal Period Ending December 2018”, “Refinance in July 2018” and together with theTransactions in the Fiscal Period Ended June 2018, the “Transactions”), assuming that all Transactions had
occurred prior to the commencement of the fiscal period ended June 2018. For details on the method for
calculation and figures of simulated distribution per unit, please refer to Appendix 2. In addition, the 2018
annual DPU sensitivity versus ADR growth based on simulated distribution per unit for the year 2018 is also
shown in Appendix 3.
(Note 1)

(Note 2)

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

Sale of the properties announced in the press releases entitled “Notice concerning Sale of Assets” as of December 21,
2017, December 26, 2017 and “Notice concerning Sale of Asset” as of February 13, 2018 and implemented during the
fiscal period ended June 2018 (Collectively referred to as the “Sale in the Fiscal Period Ended in June 2018”).
Acquisition of the properties announced in the press releases entitled “Notice concerning Acquisition of Assets” as ofFebruary 5, 2018 and “Notice concerning Acquisition of Assets” as of June 25, 2018 and implemented during the fiscal
period ended June 2018 (Collectively referred to as the “Acquisition in the Fiscal Period Ended June 2018”).
Refinancing announced in the press release entitled “Notice concerning Debt Financing (Refinance)” as of July 12,
2018.
The Acquisitions refers to acquisition of the properties to be acquired announced in the press releases entitled “Noticeconcerning Acquisition and Lease of Domestic Trust Beneficiary Interests” and “Notice concerning Acquisition of TK
Interest with Overseas Real Estate as Underlying Assets” as of July 17, 2018.
The Public Offering refers to the issuance of new investment units through the public offering (the “Primary Offering”)
and the third party allotment (the “Third Party Allotment”) announced in the press release entitled “Notice concerning
Issuance of New Investment Units and Secondary Distribution of Investment Units” as of July 17, 2018.
The Borrowings refer to the borrowings announced in the press release entitled “Notice concerning Debt Financing” as ofJuly 17, 2018.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

42. Reasons for the revision of forecast of financial results and distribution
As announced in the press releases “Notice concerning Acquisition and Lease of Domestic Trust
Beneficiary Interests”, “Notice Concerning Acquisition of TK Interest with Overseas Real Estate as
Underlying Assets”, “Notice concerning Debt Financing” and “Notice concerning Issuance of New
Investment Units and Secondary Distribution of Investment Units”, INV expects to conduct the Public
Offering as well as Borrowings in order to acquire the four domestic hotel properties on August 2, 2018
and the Cayman Hotel TK Interest by the end of October, 2018 (the “Anticipated Acquisition”).
The revision of the forecast of financial results and distribution for the fiscal period ending December
2018 are based on expectation of an increase in revenue due to the contributions from properties to beacquired as well as an increase in expected performance of the hotels. There will be one-off expenses
due to the Public Offering and Borrowings to which INV plans to pay out excess dividends to achieve a
dividend equivalent to the annual simulated DPU.
The revision of the forecast of financial results and distribution for the fiscal period ended June 2018 arebased on the performance of the existing portfolio as of today.
3.

Excess profit distribution policy

INV believes maintaining the stability of cash distributions over the medium term is one of the mostimportant factors in determining the amount of distribution for a given fiscal period, and therefore, INV
has adopted the policy to make distributions in excess of profits in order to stabilize distributions, incases where dilution of investment units or significant expenses are to be recorded in connection with,among other things, the acquisition of assets or the raising of capital, leading to a temporary decreasein distribution per unit, taking into consideration the level of distribution per unit assuming suchacquisition of assets or capital raising had contributed for a full fiscal period.
INV may also consider making distributions in excess of profits for the purpose of mitigating the impact
of corporate tax increases arising from different rules and practices in tax and accounting, such astreatment on depreciation of fixed term land lease or asset retirement obligation.
With respect to the fiscal period ended June 2018, INV will record a capital gain of JPY 1,191 million,
and a portion of the gain will be retained as reserves to enable INV to pay out additional funds if needed
to help maintain distributions in the event of declines in revenues or increases in expenses. Therefore,
the Distribution per Unit (Excluding Excess Profit Distribution per Unit) will be lower than the Earnings
per Unit for the fiscal period ended June 2018.
On the other hand, with respect to the fiscal period ending December 2018, due to i)one-off expenses inconnection with the Public Offering and the Borrowings, and ii) the Acquisitions expected to be owned
during the December 2018 fiscal period for only part of the period, earnings per unit is expected todecrease in the second half. Therefore, from the perspective of maintaining stable distributions for thefull calendar year of 2018, INV intends to reverse the reserves recorded in the prior fiscal period andmake distributions in excess of profits in the fiscal period ending December 2018 so that the sum of
DPU for the fiscal periods ended June 2018 and ending December 2018 will equal the sum of simulated
DPU for the fiscal period ended June 2018 and the fiscal period ending December 2018. The figures forearnings per unit, distribution per unit (excluding excess profit distribution per unit), excess profit distribution
per unit, and distribution per unit (including excess profit distribution per unit) and simulated distribution perunit are summarized in the table A below. The sum of the forecasted figures for the year 2018 is also statedThis English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

5therein. Simulated distribution per unit for the fiscal period ended June 2018 is calculated by applying theadjustments listed in 1 or 8, 10 and 11 among the adjustments described in Appendix 2, and simulated
distribution per unit for the fiscal period ending December 2018 are calculated by applying adjustments listed
in 4 and 7 or 12, respectively, among the adjustments described in Appendix 2. For the other assumptions,please refer to Appendix 1.
In addition to the distributions in excess of profits to stabilize distributions as mentioned above, INV also
intends to make distributions in excess of profits in order to mitigate the impact of the discrepancy
between tax and accounting treatment for the fiscal period ending December 2018 in the same manneras the fiscal period ended December 2017.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

6

(Note 1)[Table A]
Earnings per
Unit

Forecast for the fiscal
period ended June 2018
(Note 1)
Forecast for the fiscal
period ending December
2018 (Note 2)
Forecast for the year 2018
(Note 1)
(Note 2)

(Note 3)Distribution per
Unit (Excluding
Excess Profit
Distribution per
Unit)

Excess Profit
Distribution per
Unit

Distribution per
Unit (Including
Excess Profit
Distribution per
Unit)

Simulated
Distribution per
Unit

JPY

JPY

JPY

JPY

JPY

1,583

1,426

-

1,426

1,521

JPY

JPY

JPY

JPY

JPY

1,384

1,516

167

1,683

1,588

JPY

JPY

JPY

JPY

JPY

2,967

2,942

167

3,109

3,109

The number of investment units issued and outstanding as of the end of the fiscal period ended June 2018 is 4,793,181
units.
It is assumed the forecasted number of investment units issued and outstanding as of the end of the fiscal period
ending December 2018 is 5,748,181 units. The earnings per unit, distribution per unit (excluding excess profit
distribution per unit), excess profit distribution per unit, distribution per unit (including excess profit distribution per unit)
and simulated distribution per unit for this fiscal period are JPY 1,395, JPY 1,528, JPY 181, JPY 1,709 and JPY 1,601,
respectively, based on the assumption that such forecasted number is 5,702,705 where no investment units are issued
through the Third Party Allotment.
Figures are rounded down to the indicated amount. Hereinafter the same.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

7

4.

Reasons for Forecast Revision

The revised DPU forecast for the fiscal period ended June 2018 is JPY 1,426 (+12.8% year-on-year) andthe DPU forecast for the fiscal period ending December 2018 is JPY 1,683 (+7.6% year-on-year); theDPU for the full calendar year 2018 is forecast to be JPY 3,109 (+9.9% year-on-year) and DPU growth isexpected in 2018 against actual DPU in 2017.
As described in “3. Excess profit distribution policy” above, the simulated DPU for the full calendar year2018 will be JPY 3,109. Based on JPY 1,426 as the forecast DPU for the fiscal period ended June 2018,
INV plans to distribute JPY 1,683 per unit for the fiscal period ending December 2018, which includes
excess profit distributions, in order to pay out an amount equivalent to the simulated DPU for the fullcalendar year 2018.
NOI for INV’s entire portfolio is expected to grow by 28.4% due to revenue contributions from the assets
to be acquired and internal growth of the existing portfolio.
As for internal growth of the hotel portfolio and the residential portfolio, NOI for the hotel portfolio (Note1) and residential portfolio (Note 2) for the fiscal period ending December 2018 are expected to grow by
1.3% and 3.2%, respectively, vs. NOI for the same period in the previous year, and the total NOI for both
hotel and residential portfolio is expected to grow by 1.7%. With regard to the hotel portfolio (Note 1),
INV expects forecasts ADR, occupancy rate and RevPAR (Note 3) for the fiscal period ending December
2018 to increase by 2.2%, 0.8pt and 3.1%, respectively, resulting in GOP (Note 3) growth of 1.8%.
INV continues to cooperate with the operators of its hotels to achieve internal growth, and in particular, it isclosely working with MyStays Hotel Management Co., Ltd. (“MHM”) and moving ahead with a wide array of
initiatives. MHM has been actively improving its revenue management and overbooking strategy, and has
continued to improve the overall compression nights with 2,527 nights that the occupancy rate of its hotels
was 95% or more in the first half of the year compared to 2,354 nights in the prior year. MHM has also
increased its direct bookings, especially through corporate sales which have increased the market share to8.2% for the first half of 2018 compared to 7.4% for the same period in a prior year and 6.4% for the same
period in 2016. Also, in terms of distribution, MyStays now sells room inventory from 63 hotels (both INV
hotels and non-INV hotels) on the Fliggy platform (part of Alibaba) in China to attract additional Chinese
tourists. In terms of cost cutting, MHM reduced the building maintenance cost at 38 hotels owned by INV by
13.9% and elevator maintenance at 34 hotels owned by INV by 50.4% on annual basis. Overall, MHM hascontinued to push its online marketing including through social media and other channels to increase its brandrecognition and direct customer base.
In addition to the operating improvements mentioned above, INV and MHM renovated or will renovate fiveINV owned hotels in 2018. This will result in partial downtime from a portion of the rooms at these five hotels(Hotel MyStays Kyoto-Shijo, MyStays Shin-Urayasu Conference Center, Hotel MyStays Maihama, Hotel
MyStays Premier Dojima and Hotel MyStays Hakodate-Goryokaku), but is expected to result in higher GOP at
all five hotels in the second half.
INV and MHM also expect that the recent tightening regulatory requirements on private rental housing could
improve demand for the hotels. As an example as of June 29, 2018, Airbnb (Note 4) delisted 29,051 of the54,501 properties that the company had listed in Japan (Note 5) as of May 31, 2018. This has been especiallytrue in Tokyo where listings dropped from 17,348 to 5,658 and in Osaka where listings dropped from 12,272 to
5,847 during the same period. In June 2018, RevPAR for INV’s Tokyo 23 wards hotels would exceed June2017 by 7.8% and also 7.6% against the forecast in February 2018 (Note 6).
This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

8Meanwhile, with regard to internal growth of the residential portfolio, NOI for the fiscal period ending
December 2018 for 64 residential properties owned by INV as of the end of June 2018 is expected to growby 3.2% against that for the corresponding period in the previous year since the rent increase program hasbrought results. INV forecasts occupancy rate (Note 5) to increase from 94.7% to 96.0% and average rent per
tsubo (Note 7) to increase by 2.3%, from JPY 9,620 to JPY 9,839 against those for the corresponding period
in the previous year.
In addition, as announced in the press releases “Notice concerning Acquisition and Lease of Domestic Trust
Beneficiary Interests” and “Notice concerning Acquisition of TK Interest with Overseas Real Estate as
Underlying Assets” dated July 17, 2018, INV will acquire 6 high-quality hotel properties (Note 8) totaling JPY
85,129 million (Note 9) in the fiscal period ending December 2018, and these hotels are anticipated toincrease the simulated portfolio NOI by JPY 1,884 million, or JPY 327 per unit for the fiscal period ending
December 2018.
INV seeks to maximize unitholders' value while building its portfolio with hotels and residential properties as
its core assets via focusing on both growth and stability.
(Note 1)

Based on actual results and forecasts for the 46 hotel properties of the 60 hotel properties (including ”TheSheraton Grande Tokyo Bay Hotel” which INV holds as SPC backed by preferred equity interest) in our portfolio
as of June 30, 2018 (including data provided by prior owners of properties acquired during 2017 and 2018, as
adjusted to give effect to the cost structure of our hotels). Nine hotels with fixed-rent lease agreements and five
hotels which are undergoing renovations are excluded. Such nine hotels with fixed-rent are Super Hotel
Shinbashi/ Karasumoriguchi, Comfort Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi, Super Hotel JR
Ueno-iriyaguchi, Comfort Hotel Kurosaki, Comfort Hotel Maebashi, Comfort Hotel Tsubamesanjo, Comfort Hotel
Kitami, and Takamatsu Tokyu REI Hotel.Such five hotels under renovation are Hotel MyStays Kyoto-Shijo,
MyStays Shin-Urayasu Conference Center, Hotel MyStays Maihama, Hotel MyStays Premier Dojima, and Hotel
MyStays Hakodate-Goryokaku(Note 2)

Calculated based on actual results and forecasts for the 64 residential properties owned as of the end of June2018 (including data provided by prior owners of properties acquired during 2017 and 2018, as adjusted to giveeffect to the cost structure).

(Note 3)For definition of ADR, occupancy rate for hotel portfolio, RevPAR and GOP, please refer to “4. Reasons for
Forecast Revision (Reference)” below.

(Note 4)

“Airbnb” is a company based in San Francisco in the United States that offers the service of matching the person
who wants to lease a vacant room temporarily with the person who wants to rent accommodation during trip.

(Note 5)The number of listings on Airbnb is based on the data as of May 31, 2018 and June 29, 2018, sourced from
Minpaku Databank. This is only a temporary, market snapshot immediately after new introduction of regulations
and does not guarantee that number of listings will remain low in the future.

(Note 6)

Basis on announced “Notice concerning Revision of Forecast of Financial Results for the 29th Fiscal Period
Ended December 2017, together with Forecast of Financial Results and Distribution for the 30th Fiscal PeriodEnding June 2018 and 31st Fiscal Period Ending December 2018” dated February 14, 2018.

(Note 7)For definition of occupancy rate and average rent per tsubo, please refer to “4. Reasons for Forecast Revision(Reference)” below.

(Note 8)The Cayman hotel TK interest is counted as two hotel properties.

(Note 9)The anticipated acquisition price of overseas assets is INV’s anticipated investment amount for the Cayman Hotel
TK Interest. Calculated using an exchange rate of 1 USD=110 JPY (rounded down to the nearest yen) as ofJune 27, 2018 announced by Mizuho Bank Ltd.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

9

(Reference)<Forecasts for Performance Indicators of Hotel Properties (46 hotels (Note 1))>
Y2018
June fiscal period(Forecast)

December fiscal period(Forecast)

Full-Year(Forecast)Occupancy Rate (Note 2)

89.5%

91.4%

90.4%

ADR (JPY) (Note 3)

10,004

11,013

10,518

RevPAR (JPY) (Note 4)

8,954

10,0639,513

GOP (JPY million)(Note 5)(Note 6)

7,279

8,723

16,003Year-on-Year Changes
Y2018
June fiscal period(Forecast)

December fiscal period(Forecast)

Full-Year(Forecast)Occupancy Rate

+1.1pt+0.8pt+0.9pt

ADR

+0.6%

+2.2%

+1.4%

RevPAR

+1.8%

+3.1%

+2.5%

GOP

+2.1%

+1.8%

+1.9%

(Note 1) For definition of 46 hotel properties, please refer to Note 1 of “4. Reasons for Forecast Revision” above.
(Note 2) “Occupancy Rate” for hotel portfolio is calculated using the following formula: room occupancy rate = total number of rooms
occupied during the relevant period ÷ (aggregate number of rooms during the relevant period x number of days during relevant
period). Hereinafter the same.
(Note 3) “ADR,” or Average Daily Rate, is the value of the total room revenues for a certain period (excluding service fees) divided by the
total number of sold rooms for the same period. Hereinafter the same.
(Note 4) “RevPAR,” or Revenues Per Available Room, is calculated by dividing the total revenues for a certain period by the aggregate
number of rooms for the same period (rooms x number of days), and is the same figure as that of a product of ADR andoccupancy rate. Hereinafter the same.
(Note 5) “GOP,” or Gross Operating Profit, is rent revenue INV receives as a rent which is the amount remaining after deducting thepersonnel, material, water, electricity, and heating and advertising expenses as well as the management service fee for the
hotel operations (if any) from the hotel’s revenues. Hereinafter the same.
(Note 6) With respect to APA Hotel Yokohama-Kannai, we consider the rent paid to INV for this hotel as GOP of this hotel.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

10

<Forecasts for Performance Indicators of Residential Properties (64 properties (Note 1))>
Y2018
June fiscal period(Forecast)

December fiscal period(Forecast)

Full-Year(Forecast)Occupancy Rate (Note 2)
Average Rent per Tsubo
per Month (Note 3) (JPY)

95.6%

96.0%

95.8%

9,731

9,839

9,785

NOI (JPY million) (Note 4)

2,525

2,522

5,048

Year-on-Year Changes
Y2018
June fiscal period(Forecast)Occupancy Rate
Average Rent per Tsubo
per Month
NOI

December fiscal period(Forecast)

Full-Year(Forecast)+0.5pt+1.3pt+0.9pt

+2.5%

+2.3%

+2.4%

+2.9%

+3.2%

+3.0%

(Note 1) For definition of 64 residential properties, please refer to Note 2 of “4. Reasons for Forecast Revision” above.
(Note 2) “Occupancy Rate” is calculated by dividing the sum of total residential leased area by the sum of total residential leasablearea at the end of each month of each period. Hereinafter the same.
(Note 3) “Average Rent per Tsubo per Month” is calculated by dividing the total residential rental revenue including common area
charges for each month by the sum of total residential leasable area at the end of each month, indicating the average rent
per Tsubo weighted by leased area. Hereinafter the same.
(Note 4) Figures are rounded down to the indicated amount. Excludes one‐off insurance‐related revenues and expenses. Hereinafter
the same.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

11Based on the above, the forecasts of earnings per unit and distribution per unit for the full calendar year2017 are as follows:<Full-year 2018> (Aggregate of the fiscal periods ended June 2018 (Actual) and ending December
2018 (Forecast))

Previous forecast (A)(announced onJune 25, 2018)
Revised forecast (B)Amount of variance(B)- (A)Rate of variance((B) – (A)) / (A)(Note)

Earnings per Unit
(Note)

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

Excess Profit
Distribution per Unit
(Note)

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

JPY

JPY

JPY

JPY

3,155

3,015

-

3,015

JPY

JPY

2,967

2,942

JPY
167

JPY
3,109

JPY

JPY

(188)

(73)

JPY
167

JPY
94

%

%

(6.0)

(2.4)

%
-

%
3.1

Assumption: the number of investment units issued and outstanding at the end of the fiscal period ended June 2018 was
4,793,181 units and the number of investment units issued and outstanding at the end of the fiscal period ending
December 2018 is 5,748,181 units.

Website of INV: http://www.invincible-inv.co.jp/eng/

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

12

(Appendix 1)<Assumptions Underlying the Forecast of Financial Results and Distribution for
the June 2018 Fiscal Period and the December 2018 Fiscal Period >Item
Fiscal period

Assumptions
The June 2018 fiscal period: from January 1, 2018 to June 30, 2018 (181 days)
The December 2018 fiscal period: from July 1, 2018 to December 31, 2018 (184 days)
Properties held as of the end of the June 2018 fiscal period: 125 properties andpreferred equity interests in one special purpose company
Properties held as of the end of the December 2018 fiscal period: 129 properties andpreferred equity interests in one special purpose company and a TK interest in one
special purpose company

Assets undermanagement

INV assumes that INV will newly acquire four hotel properties as of August 2, 2018
(Anticipated Domestic Assets) and TK interest in Cayman Hotel TK Interest in a one
special purpose company which anticipate to invest in two Cayman hotels by October30, 2018 (Note), and that there will be no other change through the end of the fiscal
period ending December 2018.
(Note) Regarding the acquisition of four hotel properties and Cayman Hotel TK Interest, pleaserefer to “Notice concerning Acquisition and Lease of Domestic Trust Beneficiary Interests” and“Notice concerning Acquisition of TK Interest with Overseas Real Estate as Underlying Assets” asof today. Further, as the distribution from Cayman Hotel TK interest will be made in orafter the fiscal period ending June 2019, the acquisition date of Cayman Hotel TK
Interest on or prior to October 31, 2018 will not affect the forecast of the operating
revenues of the INV for the fiscal period ending December 2018. However, in relation
to the interest-bearing liabilities (borrowings), INV assumes that it will implement theborrowings immediately prior to the acquisition of Cayman Hotel TK Investment on
September 27, 2018.

As of the end of the June 2018 fiscal period: 4,793,181 units
As of the end of the December 2018 fiscal period: 5,748,181 units

Units outstanding

INV assumes that a total of 955,000 new investment units will be issued through thePrimary Offering (909,524 new investment units) and the Third Party Allotment (up to
45,476 new investment units), and that the expected number of investment units issued
and outstanding following the Offering will be 5,748,181 units, and that there will be no
additional issuance of units thereafter through the end of the fiscal period ending
December 2018.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

13

Item

Assumptions
Balance as of the end of the fiscal period ended June 2018: JPY 189,415 million(borrowing: JPY 187,415 million, investment corporation bonds: JPY 2,000 million)
Balance as of the end of the fiscal period ending December 2018: JPY 229,873 million(borrowing: JPY 227,873 million, investment corporation bonds: JPY 2,000 million)

Interest-bearing liabilities

INV assumes that JPY 3,458 million of borrowing is implemented as of August 2, 2018
and JPY 37,000 million on 27 September 2018, for the fiscal period ending December
2018, as mentioned in the press release entitled “Notice concerning Debt Financing” asof today. In addition, INV intends refinance short term loan of JPY 2,000 million due
October 13, 2018 in December 2018 fiscal period at a similar condition. INV executed
JPY 28,979 million of borrowing (refinance) on July 17, 2018. (for more details, pleasesee “Notice concerning Debt Financing (Refinance)” as of July 12, 2018). INV assumes
no other new loan or prepayment of loan through the end of the December 2018 fiscal
period.
INV expects to record rental revenues for each fiscal period as follows:
June 2018
Fiscal Period
JPY 11,115 million(JPY 7,323 million)(JPY 3,534 million)(JPY 3,788 million)
JPY 732 million
JPY 1,191 million- million

・Rental revenues(of these, hotel rents)(fixed hotel rents)(variable hotel rents)
・SPC Dividend amount・Gain on sale・Dividend amount

December 2018 Fiscal
PeriodJPY 13,447 million(JPY 9,731 million)(JPY 4,909 million)(JPY 4,821 million)
JPY 831 million- million- million

INV estimates gain on sales of JPY 796 million from sale of Harmony Ochanomizu,
Growth Maison Ikebukuro, Capital Heights Kagurazaka, Cross Square NAKANO andOki Aoba Building completed on January 31, 2018, and JPY 395 million from sale of
Lexinton Plaza Nishi-Gotanda completed on March 9, 2018 for the fiscal period ended
June 2018.

Operating revenues

Moreover, we estimate the amount of dividends on the preferred equity interests basedon the performance of the underlying asset and the assumed amount of expenses
incurred by the special purpose company.

With respect to dividend from Cayman Hotel TK Interest, as the initial dividend from SPC
in expected in March 2019 which falls during fiscal period ending June 2019, dividend
amount is not recorded in fiscal period ending December 2018.
Rental revenues in the fiscal period ended June 2018 and the fiscal period ending
December 2018 are calculated based on estimates as of today. In addition, INV
assumes there will be no delinquencies or non-payment of rent by tenants.
The majority of INV’s owned hotels use a variable rent scheme linked to performance ofthe relevant hotel. Hotel demand is affected by seasonal factors and the December
ending fiscal periods (from July to December) which include summer holiday andautumn outing seasons tend to record higher revenue than the June ending fiscal
periods (from January to June). Accordingly, rental revenue of INV tends to be higher inthe December ending fiscal periods than in the June ending fiscal periods.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

14

Item

Assumptions
INV expects to incur property related expenses for each fiscal period as follows:・Facility management fees(of these, repair costs)
・Taxes and other public charges(Note)
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expenses
Operating expenses

June 2018
Fiscal Period
JPY 668 million(JPY 24 million)

December 2018
Fiscal Period
JPY 680 million(JPY 24 million)

JPY 458 million

JPY 542 million

JPY 12 million
JPY 2,837 million
JPY 208 million
JPY 4,185 million

JPY 12 million
JPY 3,091 million
JPY 191 million
JPY 4,519 million(Note) Property taxes and city planning taxes on the assets acquired in 2018 including
anticipated acquisition of assets are calculated on a pro-rata basis with the previous
owners and settled at the time of acquisition, and are not recorded for the fiscal period
ending December 2018 and recorded from the fiscal period ending June 2019 as theamount equivalent to such settlement is included in the acquisition cost.
INV expects to incur other operating expenses than the property related expenses forthe fiscal period ending December 2018 as follows:・Other operating expenses(of these, asset management
fees)

June 2018
Fiscal Period
JPY 552 million

December 2018
Fiscal Period
JPY 512 million(JPY 275 million)(JPY 275 million)

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

NOI

・NOI

June 2018
Fiscal Period
JPY 10,499 million

December 2018 Fiscal
PeriodJPY 12,851 million(of these, hotel NOI)(of these, residential NOI)(of these, dividend amount)(of these, SPC dividend amount)(JPY 6,971 million)(JPY 2,562 million)
JPY 732 million-(JPY 9,313 million)(JPY 2,522 million)
JPY 831 million-

NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues (including the amount of dividends on the preferred equity
interests) ‐ Property Related Expenses + Depreciation Expenses+ Dividends on thepreferred equity interests+ Dividend on SPC

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

15

Item

Assumptions

INV expects to incur non-operating expenses for each fiscal period as follows:

Non-operating expenses

Distribution per unit

・Interest expense
・Finance related costs・Interest for investment corporation
bonds
・Depreciation of investment
corporation bonds issuance
expenses・Other non-operating expenses(expenses relating to the issuance of
new units for the Offering)
Total Non-operating expenses

June 2018
Fiscal Period
JPY 478 million
JPY 233 million

December 2018
Fiscal Period
JPY 575 million
JPY 502 million

JPY 1 million

JPY 6 million

JPY 0 million

JPY 1 million-

JPY 200 million

JPY 713 million

JPY 1,286 million

The distribution per unit is calculated in accordance with the cash distribution policy as
set forth in INV’s Articles of Incorporation.
With respect to the distribution for the fiscal period ended June 2018, INV expects todistribute an aggregate amount of JPY 6,835 million (distribution per unit: JPY 1,426)
which is the remaining amount after retaining JPY 755 million as internal reserve fromnet income for the fiscal period ended June 2018 (JPY 7,590 million).
With respect to the distribution for the fiscal period ending December 2018, INV expects
to distribute an aggregate amount of JPY 9,674 million (distribution per unit: JPY 1,683)
based on the assumption that excess profit distribution in the amount of JPY 959 million
will be paid, in addition to JPY 8,714 million from net income for the fiscal period ending
December 2018 (JPY 7,960 million) and JPY 755 million from internal reserve.
For the fiscal period ended June 2018 and fiscal period ending December 2018, INV
expects to record deferred gain on hedge of the interest rate swap as the valuation andconversion adjustments, etc. of JPY 113 million, which is equal to the amount for the
fiscal period ended December 2017. The distribution per unit is calculated based on theassumption that fluctuation of the market value of the interest rate swap does not affectthe distribution per unit.
Distribution per unit may vary due to various factors, including changes of the assets
under management, fluctuation of rent income associated with reasons such as changeof tenants and occurrences of unexpected repairs.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

16

Item

Excess profit distribution
per unit

Assumptions
INV believes maintaining the stability of cash distributions over the medium term is oneof the most important factors in determining the amount of distribution for a given fiscal
period, and therefore, INV has adopted the policy to make distributions in excess of
profits in order to stabilize distributions, in cases where dilution of investment units orsignificant expenses are to be recorded in connection with, among other things, theacquisition of assets or the raising of capital, leading to a temporary decrease in
distribution per unit, taking into consideration the level of distribution per unit assuming
such acquisition of assets or capital raising had contributed for a full fiscal period.
INV may also consider making distributions in excess of profits for the purpose of
decreasing the impact from corporate tax increase arising from different rules in tax andaccounting practices, such as treatment on depreciation of fixed term land lease or
asset retirement obligation.
INV will not make distributions in excess of profits for the fiscal period ended June 2018,as INV intends to retain a certain amount of the net income.
With respect to the fiscal period ending December 2018, due to i) one-off expenses inconnection with the Public Offering and the Borrowings, ii) the Acquisitions
expected to be owned during the December 2018 fiscal period for only part of theperiod, and iii) distributions from the TK interest will start from the fiscal period
ending June 2019, earnings per unit is expected to decrease in the second half.
Therefore, from the perspective of maintaining stable distributions, INV intends to make
distributions in excess of profits (JPY 153 per unit) within the scope of the expectedshortfall between actual earnings per unit and the simulated earnings per unit after theTransactions. Further, INV intends to make distribution in excess of profits (JPY 14 perunit) in order to cope with the discrepancy between tax and accounting treatment.

Excess profit distribution per unit

Other

June 2018
Fiscal Period-

December 2018
Fiscal Period
JPY 167

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

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

17

(Appendix 2)<Simulated distribution per unit for full-year 2018>
Simulated distribution per unit for the year 2018 refers to sum of earnings per unit calculated by first assuming
the forecast financial results for the fiscal period ended June 2018 and the forecast of financial results for the
fiscal period ending December 2018 and then, by applying the simulated adjustments below, eliminating theeffects of such factors as one-off expenses and treating the Acquisitions in the Fiscal Period Ended June
2018, the Previous Public Offering, the Borrowings in the Fiscal Period Ended June 2018, the Refinancing in
July, the Acquisitions, the Public Offering and the Borrowings etc. as if they had occurred prior to thebeginning of the fiscal period ended June 2018, and excess profit distribution per unit (limited to distribution inexcess of profit for coping with the discrepancy between tax accounting treatment).
Simulated adjustments used to calculate simulated distribution per unit for the year 2018 include thefollowing adjustments
1.

Elimination of one-off expenses in connection with the Transactions for the Fiscal Period Ended June
2018.

2.

Elimination of gain on sales of the assets sold announced in the press releases entitled “Noticeconcerning Sale of Assets” as of December 21, 2017 and December 26, 2017.

3.

The figures are on the assumption that the revenue from the assets sold as announced in the press
releases entitled “Notice concerning Sale of Assets” as of December 21, 2017 and December 26, 2017
had not been recorded from the beginning of the fiscal period ended June 2017.

4.

The figures are on the assumption that revenue contributions as well as expenses such as property taxes
and city planning taxes on the assets acquired announced in the press release entitled “Noticeconcerning Acquisition of Assets and Entering into Leasing Contract” as of February 5, 2018 wererecorded from the beginning of the fiscal period ended June 2018.

5.

Elimination of gain on sales of the assets sold announced in the press release entitled “Noticeconcerning Sale of Assets” as of February 13, 2018.

6.

The figures are on the assumption that the revenue from the assets sold announced in the press release
entitled “Notice concerning Acquisition and Sale of Asset” as of February 13, 2018 had not beenrecorded from the beginning of the fiscal period ended June 2018.

7.

The figures are on the assumption that revenue contributions as well as expenses such as property
taxes and city planning taxes on the asset to be acquired announced in the press release entitled “Noticeconcerning Acquisition of Assets” as of June 25, 2018 were recorded from the beginning of the fiscal
period ended June 2018.

8.

Adjustments to give effect to the assumption that the refinancing announced in the press release entitled“Notice concerning Debt Financing (Refinance)” as of July 12, 2018, took place prior to the fiscal period
ended June 2018.

9.

Elimination of one-off expenses in connection with the refinancing executed on July 2018.

10. The figures are on the assumption that revenue contributions as well as expenses such as property
taxes and city planning taxes on the assets to be acquired announced in the press releases entitled“Notice concerning Acquisition and Lease of Domestic Trust Beneficiary Interests” and “NoticeThis English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

18

concerning Acquisition of TK Interest with Overseas Real Estate as Underlying Assets” as of today wererecorded from the beginning of the fiscal period ended June 2018.
11. The figures are on the assumption that a total of 955,000 units (909,524 units through the Public Offering
and up to 45,476 units through the Third Party Allotment) were issued at the beginning of the fiscal period
ended June 2018.
12. Elimination of one-off expenses in connection with the Transactions for the Fiscal Period Ending
December 2018.

The simulated distribution per unit for the year 2018 as well as the simulated earnings per unit, simulated
distribution per unit (excluding excess profit distribution per unit) and simulated excess profit distribution perunit, for the year 2018, which are calculated by applying the same adjustments as the simulated distribution
per unit for the year 2017 are summarized in the column of “After the Transactions in the Fiscal Period Ending
December 2018” of the Table A below. In addition, to exhibit the effect of the transactions stated in “Noticeconcerning Acquisition of Assets and Entering into Leasing Contract”, “Notice concerning Acquisition of TK
Interest with Overseas Real Estate as Underlying Assets”, “Notice concerning Debt Financing” and “Noticeconcerning Issuance of New Investment Units and Secondary Distribution of Investment Units” as of July 17,

2018 and the implementation of the Transactions in the Fiscal Period Ending December 2018, these figures
before the Transactions in the Fiscal Period Ending December 2018 are also included in the Table A.
Simulated distribution per unit after the Transactions in the Fiscal Period Ending December 2018 are
calculated by applying all adjustments listed above, while simulated distribution per unit before theTransactions in the Fiscal Period Ending December 2018 are calculated by applying the adjustments listed in
1 or 9 above which are related to transactions etc. implemented before the Transactions in the Fiscal PeriodEnding December 2018.
The simulated distribution per unit for the year 2018 and the other figures in the Table A below are purely asimulation intended to describe the effect of the Transactions, etc. described above and are neither a forecast
nor prospect relating to INV’s earnings or distribution per unit for a given operating period. Accordingly, there
is no guarantee that the simulated distribution per unit for the year 2018 will ever be realized for any future,and INV is not obligated to revise any of the simulated figures regardless of any changes in circumstancesthat may affect the above simulation.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

19[Table A]

Simulated
Earnings per Unit
for the year 2018
(Note)

Simulated
Distribution
per Unit(Excluding
Excess Profit
Distribution perUnit) for theyear 2018(Note)

Simulated
Excess Profit
Distribution per
Unit for the year
2018
(Note)

Simulated
Distribution per
Unit(Including
Excess Profit
Distribution perUnit) for theyear 2018(Note)

JPY

JPY

JPY

JPY

2,912

2,912

34

2,946

JPY
3,081

JPY
3,081

JPY
28

JPY
3,109

Amount of variance(B) – (A)

JPY
169

JPY
169

JPY
(6)

JPY
163

Rate of variance((B) – (A)) / (A)

%
5.8

%
5.8

%
(17.6)%
5.5

Before the Transactionsin the full-year 2018
(A)
After the Transactionsin the full-year 2018(B)

(Note)

Assumption: the number of investment units issued and outstanding before the Transactions in the full-ear 2018: 4,793,181
units; the number of investment units issued and outstanding after the Transactions in the full-year December 2018: 5,748,181
units.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

20

(Appendix 3)<Simulated DPU for full-year 2018 Sensitivity (vs ADR Growth) >(JPY)(Note 1) “ADR Growth” is shown as a % change from the ADR assumption for the 2018 forecast for the 54 hotels with a variable rent
scheme owned by INV after anticipated acquisition excluding Sheraton Grande Tokyo Bay Hotel (Preferred Equity Interest),
Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort (TK interest)(Note 2) “Hotel ADR” is average of ADR of the said 54 hotels (Same as Note 1).
(Note 3) “Simulated DPU Growth” is simulated data based on the simulated distribution per unit for the year 2018, on the assumptionthat all assumptions used to calculate simulated distribution per unit for the year 2018 for INV’s current assets and the assets tobe acquired remain the same, except for the ADR.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

21

(Appendix 4)<Simulated NOI of our portfolio >(Note 1)

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

Hotel (Variable Rent) Simulated NOI is based on the actual and forecast results of 46 variable rent hotel properties outof the 60 hotel properties INV holds as of the end of June 30, 2018, excluding (i) nine hotel properties with fixed‐rentlease agreements since the performance of the hotels with fixed‐rent lease agreements do not significantly affectyear-on-year variances and (ii) five hotel properties undergoing renovation in 2018 (for more details, please see “4.
Reasons for Forecast Revision, (Note 1)”).
Simulated NOI of Sheraton is calculated based on the actual and forecast results of preferred equity interest of TMK
that owns SGTB, assuming INV owned the preferred equity interest of TMK from the beginning of 2017
Residential Simulated NOI is based on the actual and forecast results of the existing 64 residential properties held as ofJune 1, 2018. Temporary insurance benefit and cost corresponding it is excluded.
Simulated NOI of Others is based on the actual and forecast results of two retail properties owned by INV as of June 30,
2018.
For simulated NOI for Hotel, Sheraton, Residential and Others, actual results of (i) existing properties acquired on orafter January 1, 2017 and (ii) the assets to be acquired are based on actual results provided by sellers and adjusted toreflect trust fees and insurance premiums assuming the properties had been held by INV.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

22

(Appendix 5)<KPI of our current Hotel portfolio>(Note 1)For the assumptions of the actual and forecasts of ADR, occupancy, RevPAR and simulated GOP, please refer to (Note 1)of Appendix 4 above.

(Note 2)

In calculating the simulated GOP, the rent paid for APA Hotel Yokohama-Kannai, is regarded as GOP of the hotel.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

23

(Appendix 6)<Rent Increase Initiative regarding our portfolio of the residential properties>(Note 1) Based on the residential properties owned in relevant year excluding the performance for the pre-acquisition period for theproperties acquired during the year. The numbers of the properties at the end each year is as follows: 63 properties for 2013
and 2014, 66 properties for 2015, 68 properties for 2016, 70 properties for 2017 and 64 properties as of June 30, 2018.
(Note 2)

Occupancy is calculated by dividing the sum of leased area by the sum of leasable area at the end of each month of each year,
based on the properties owned in the relevant year excluding the performance for the pre-acquisition period for the properties
acquired during the year.

(Note 3)

Net Leasing Cost (Multiple of Monthly Rent) = Advertising Expenses (Multiple of Monthly Rent) + Free Rent (Multiple ofMonthly Rent) – Key Money (Multiple of Monthly Rent). Multiple of Monthly Rent is converted by the monthly rent for the
relevant lease agreement during the relevant period and rounded to two decimal places.

(Note 4)

Renewal rate is calculated by the number of renewal rents during the relevant period divided by the number of contracts due
up for renewal during the relevant period.

(Note 5) Average Rent Increase/Decrease is increase or decrease (%) in the sum of monthly rents on new or renewal, or the total ofboth, compared with the sum of previous rents.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

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(Appendix 7)<Operating Revenue Composition (Simulated)>
Existing portfolio

Post-acquisition
1

1(JPY million)(JPY million)(Note 1) “Others” includes Commercial facilities.
(Note 2) “Existing Portfolio Operating Revenue Composition” is calculated based on the 2018 full year operating revenue
estimates (actual results for January to May and estimates for June to December) for all INV’s assets as of today. The
properties acquired in February and June 2018 are on the assumption that they had been owned since January 1, 2018.
Performance for the pre-acquisition period is based on actual results provided by the respective sellers and performancefor the post-acquisition period is based on actual results until May 31, 2018 or based on estimates after June 2018.
“Post-acquisition Operating Revenue Composition” is calculated by adding the 2018 full year operating revenue
estimates on the assets to be acquired (actual results for January to May and estimates for June to December)calculated by Consonant Investment Management Co., Ltd, the asset manager of INV, to the figures for the existing
portfolio. Annualized estimates of dividends INV expects to receive from preferred equity interests in the TMK that owns
Sheraton Grande Tokyo Bay Hotel based on actual and forecast result of the TMK assuming that INV had owned thepreferred equity interest from the beginning of 2017 is used. With regard to TK interest in a special purpose company thatwill hold Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort, annualized estimates ofdividends INV expects to receive from TK interest is used. Currency hedging transaction in the future is not taken into
consideration. Calculated based on exchange rate USD 1= JPY 110.
(Note 3) Ratios are rounded to one decimal places.

This English language notice is a translation of the Japanese-language notice released on July 17, 2018 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution
readers to undertake investment decisions based on their own investigation and responsibility.
This translation of the original
Japanese-language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy orcompleteness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy
between this translation and the Japanese original, the latter shall prevail in all respects.

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