[For Information Purpose Only.
The Japanese language press release should be referred to as the original.]
December 8, 2021
To All Concerned Parties
Name of REIT Issuer:
Invincible Investment Corporation
Naoki Fukuda, Executive Director(Securities code: 8963)
Asset manager:
Consonant Investment Management Co., Ltd.
Naoki Fukuda, President & CEO
Contact: Jun Komo
General Manager of Planning Department(Tel. +81-3-5411-2731)

Notice concerning Revision of Forecast of Financial Results and Distribution forthe 37th Fiscal Period Ending December 2021
Invincible Investment Corporation (“INV”) today announced the revision of its forecast of financial
results and Distribution per Unit (“DPU”) for the fiscal period ending December 2021 (37th Fiscal
Period), stated as TBD in “Financial Summary for the December 2021 Fiscal Period (from July 1,
2021 to December 31, 2021)” dated August 25, 2021.
1.

Revision of the forecast of financial results and distribution for the fiscal period ending December
2021 (from July 1, 2021 to December 31, 2021)
Operating
Revenues

Operating
IncomeOrdinary
Income

JPY million

JPY million

JPY million

JPY million

Total
Distribution
Amount
JPY million

TBD

TBD

TBD

TBD

TBD

JPY million

JPY million

JPY million

JPY million

JPY million

7,957

1,804

516

515

512

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

JPY million

JPY million

JPY million

JPY million

-

-

-

-

-

Rate of variance((B) – (A)) / (A)

%

%

%

%

%

-

-

-

-

-

JPY million

JPY million

JPY million

JPY million

JPY million

8,340

1,690

624

623

1,018

Previous forecast (A)(announced on
August 25, 2021)
Revised forecast (B)(Reference)
Fiscal Period Ended
December 2020

Net Income

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

1

Distribution
per Unit
Earnings per
Unit (Note 1)

Previous forecast (A)(announced on
August 25, 2021)

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

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

JPY

JPY

JPY

JPY

TBD

TBD

TBD

TBD

JPY

JPY

JPY

JPY

84

84

-

84

Amount of variance(B) – (A)

JPY

JPY

JPY

JPY

-

-

-

-

Rate of variance((B) – (A)) / (A)

%

%

%

%

-

-

-

-

(Reference)
Fiscal Period Ended
December 2020

JPY

JPY

JPY

JPY

102

167

-

167

Revised forecast (B)(Note 1) The total number of investment units issued and outstanding at the end of the fiscal period: 6,096,840 units(Reference)
Assumptions underlying the forecast of financial results and DPU for the fiscal period ending
December 2021 are provided in Appendix 1.
2. Reasons for the revision of forecast of financial results and distribution
The forecast of financial results and DPU for the fiscal period ending December 2021 (from July 1,
2021 to December 31, 2021) remained undetermined at the time of the announcement of “Financial
Summary for the June 2021 Fiscal Period” on August 25, 2021, as it was difficult to create theforecast due to the effects from the spread of COVID-19. As announced in “Notice concerning
Conclusion of Memorandum of Understanding to Amend the Fixed-term Building Lease and Property
Management Agreement pertaining to the rent conditions for the period from October to December,
2021 with Major Tenant” dated today (“MLPM Amended Agreements Press Release”), INV enteredinto a Memorandum of Understanding to amend each fixed-term building lease and property
management agreement ("MLPM Agreements") pertaining to the rent conditions for domestic hotels
owned by INV with INV's main tenant, MyStays Hotel Management Co., Ltd. (“MHM”) and its affiliates(the "MHM Group"), who operate the hotels as of today. Furthermore, as announced in “Noticeconcerning Sale of Domestic Trust Beneficiary Interests” dated today, INV has decided to sell sevenresidential properties on December 22, 2021 and six residential properties on January 12, 2022.
Taking these effects into account we have decided to announce the revision of the forecast offinancial results and DPU for the fiscal period ending December 2021, based on the information
currently available to INV and certain assumptions that are deemed reasonable by INV.
The forecast of financial results and DPU for the fiscal period ending June 2022 and onwards will beannounced at a later date, once we have a clearer outlook.
This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

2

In the fiscal year ending December 2021 ("Current Period"), the occupancy rate of domestic hotels
in July exceeded the previous year's results, but due to the influence of the spread of COVID-19, socalled 5th wave, priority measures such as State of Emergency and quasi-State of Emergency
declarations were applied over a wide area nationwide from July to September, and hotel demandfell again. In addition, since most of the Tokyo Olympics and Paralympics were held without
spectators, the previously assumed positive ripple effect on the accommodation demand of many
hotels owned by INV in the Tokyo metropolitan area and Hokkaido was limited. However, after thecancellation of the state of emergency at the end of September, behavioral restrictions such as
movement across prefectures were gradually relaxed, and both business demand and leisuredemand started to show sign of recovery. The occupancy rate of domestic hotels at the moment isoutperforming the previous year when the Go To Travel campaign was implemented. On the other
hand, demand from inbound tourists cannot be expected for the time being, as the Japanese
government has effectively halted non-resident foreigners from entering Japan, following the recent
reports of infections from a new COVID-19 variant (Omicron variant) around the world.
Change in Occupancy Rate (Note 1) of 75 Domestic Hotels (Note 2)(Note 1) “Occupancy Rate” for hotel portfolio is calculated using the following formula:room occupancy rate = total number of rooms occupied during the relevant month ÷ (aggregate number of rooms during therelevant month x number of business days during the relevant months). Hereinafter the same.
(Note 2) Based on 75 hotel properties; of the 84 domestic hotel properties (including Sheraton Grande Tokyo Bay Hotel, the underlying
asset of preferred equity interest held by INV) held as of the end of November 2021, nine hotels with fixed-rent lease agreements
are excluded. Hereinafter the same.
(Note 3) The figures for November 2021 and onwards show estimated figures as of today and are subject to change.

Regarding the two overseas hotels in the Current Period, the Cayman Islands government continued
its cautious stance on when to resume accepting overseas tourists while paying close attention to
the progress of vaccination on the island. Therefore, accommodation demand for the two Cayman
hotels was limited to temporary isolation by arrivals and staycation by residents, continuing theThis English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

3

severe business conditions on the island. On November 20, the Cayman Islands government lifted
the self-quarantine measures required for vaccinated tourists after arrival, but unvaccinated children
continue to require self-isolation for 14 days. Due to the need for isolation, it may be difficult toanticipate demand from families, and it will take some time for the occupancy rate of the two Cayman
properties to recover.

Change in Occupancy Rate of the Cayman Hotels(Note 4) The figures for November 2021 and onwards show estimated figures as of today and are subject to change.

In response to the above situation, as announced in “Notice concerning Conclusion of Memorandumof Understanding to Amend the Fixed-term Building Lease and Property Management Agreement
pertaining to the rent conditions for the period from July to September, 2021 with Major Tenant” dated
September 10, 2021 and MLPM Amended Agreements Press Release dated today, INV concluded
a Memorandum of Understanding for MLPM Agreements with the MHM Group for domestic hotels
operated by the MHM Group dated September 10, 2021 and December 8, 2021 (referred to as the“September 2021 MOU” and the “December 2021 MOU” respectively). As a result, the expected
rent from the MHM Group for the fiscal period ending December 2021 will be a fixed rent of JPY
1.95 billion and a variable rent of JPY 0.62 billion, totaling JPY 2.57 billion.
Regarding dividend income for the fiscal period ending December 2021 related to preferred equity
interest in the Kingdom TMK which holds the Sheraton Grande Tokyo Bay Hotel as an underlying
asset, the dividend income is expected to be zero since it is based on the hotel's performance from
April 1, 2021 to September 30, 2021, or the calculation period of the TMK issuing preferred equity
interest, in which the hotel has seen a significant decline in room occupancy rates.(Note 5)(Note 5) Kingdom Special Purpose Company (the “TMK”), which is the issuer of preferred equity interest and the owner of Sheraton
Grande Tokyo Bay Hotel, or the underlying asset, has a cumulative loss due to the decline in profits of the underlying asset
caused by the spread of COVID-19. Therefore, the TMK has been in a situation where it cannot pay dividends even if it settles
the accounts. Under such circumstances, the TMK has amended its Articles of Incorporation to temporarily extend its six-monthThis English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

4

accounting period to a 12-months accounting period in order to curb the costs of settlement of accounts. Therefore, in INV’s
fiscal period ending December 2021, the settlement of accounts of the TMK will not be carried out. This measure is temporary,
and TMK plans to restore to the original 6-month settlement once the cumulative loss is resolved and TMK is expected to be able
to resume payment of dividends.

As a result, the NOI of domestic hotels for the fiscal period ending December 2021 is expected to
be JPY 2,636 million, an increase of 6.8% compared to the December 2020 fiscal period, but adecrease of 76.5% compared to the December 2019 fiscal period prior to the pandemic.
For the two overseas hotels, expenses at the hotels are estimated to exceed its sales, so the excess
amount of hotel expenses (JPY 164 million) will be recorded as management contract expense,
while management contract revenue will not be recorded. NOI is expected to be JPY (320) million.
With regard to the residential portfolio, while the occupancy rate was sluggish in the fiscal period
ending December 2021 due to the spread of COVID-19 infections, it recovered from the beginningof 2021, and at the end of November 2021 it is almost the same level as the end of November 2020.
Due to the impact of the disposition of the six properties on December 28, 2020 and disposition ofseven properties scheduled for December 22, 2021, NOI for the residential portfolio is expected to
be JPY 1,373 million, a decline compared to the same period in the previous year. In addition tothese, INV plans to record a gain on sale of JPY 2,539 million in the Current Period due to thedisposition of Lexington Plaza Hachiman (a retail property) completed on July 2, 2021 anddisposition of abovementioned seven residential properties to be completed on December 22, 2021.
As a result, net income for the fiscal period ending December 2021 is expected to be JPY 515 million.
INV intends to distribute a total of JPY 512 million (JPY 84 per unit), or almost the entire amount of
the abovementioned net income.
Nearly two years have passed since the outbreak of the pandemic. The outlook for the hotel sector
remains uncertain, but INV and its asset management company will continue to make every effort torecover.

Website of INV: https://www.invincible-inv.co.jp/en/

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

5

(Appendix 1)<Assumptions Underlying the Forecast of Financial Results and Distribution for the Fiscal Period ending December 31, 2021>

Item

Fiscal period

Assumptions

The: from July 1, 2021 to December 31, 2021 (184 days)
Properties held as of the end of the fiscal period ending December 2021: 133 properties
and preferred equity interests in one TMK

Assets undermanagement

Based on the properties held as of today (140 properties and preferred equity interests
in one TMK), and INV assumes that INV will sell seven residential properties on
December 22, 2021 and that there will be no change in the portfolio through the end of
the fiscal period ending December 2021.
(Note) For details of the sale of the seven residential properties, please refer to “Noticeconcerning Sale of Domestic Trust Beneficiary Interests” dated today.
As of the end of the fiscal period ending December 2021: 6,096,840 units

Units outstanding

INV assumes that there will be no change to the current 6,096,840 units issued andoutstanding through the end of the fiscal period ending December 2021.
Balance as of the end of the fiscal period ending December 2021: JPY 245,515 million(borrowing: JPY 237,315 million, investment corporation bonds: JPY 8,200 million)

Interest-bearing liabilities

Regarding loans maturing during the fiscal period ending December 2021, INV intends
to refinance at a similar condition and INV assumes that there will be no change to thecurrent total balance of JPY 245,515 million.
INV assumes no other new loan or prepayment of loan through the end of the fiscal period
ending December 2021.

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

6INV expects to record rental revenues for the fiscal period as follows:・Rental revenues(of these, hotel rents)(fixed hotel rents)(variable hotel rents)
・Management contract revenue
・TMK dividend amount

December 2021
Fiscal Period
JPY 5,418 million(JPY 3,426 million)(JPY 2,496 million)(JPY 929 million)-

・Gain on sale

JPY 2,539 million

Total operating revenues

JPY 7,957 million

INV estimates gain on sale of JPY 2,539 million for the fiscal period ending December
2021, which is a total of JPY 590 million from the sale of Lexington Plaza Hachiman
completed on July 2, 2021 and JPY 1,949 million from the sale of seven residential
properties to be completed on December 22, 2021.

Operating revenues

INV estimates the amount of dividends on the preferred equity interests based on theperformance of the underlying asset and the assumed amount of expenses incurred by
the TMK. As stated in the main text, there will be no TMK dividend on preferred equity
interests in the fiscal period ending December 2021.
INV recognizes management contract revenue from the overseas hotels as real estate
investment income from management contracts of the Cayman Hotels. The forecasts
of management contract revenue are based on estimated performance of the overseas
hotels and the assumed amount of expenses incurred by the hotel managementcompany. However, there will be no management contract revenue for the fiscal period
ending December 2021, as the expenses at the overseas hotels exceeded the revenues.
Previously, INV had assumed that the expansion and renovation of the Cayman Hotels
would begin in the summer of 2020 with the goal of completion in the summer of 2023.
However, considering the situation of the Cayman Hotels under the impact of COVID-19,
INV is forced to refrain from discussions on the expansion and renovation project. As aresult, INV does not anticipate and incorporate any particular impact of the expansion
and renovation for the purpose of this forecast for the fiscal period ending December
2021.
Rental revenues are calculated after considering waiving of rent and change of variable
rent pursuant to the September 2021 MOU and the December 2021 MOU, and based on
estimates as of today. In addition, INV assumes there will be no delinquencies or nonpayment of rent by other tenants.

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

7

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

Operating expenses

・Facility management fees (Note 1)(of these, repair costs)
・Taxes and other public charges
・Insurance expenses
・Depreciation expenses
・Other expenses
Total property related expenses andmanagement contract expenses

December 2021
Fiscal Period
JPY 593 million(JPY 18 million)
JPY 775 million
JPY 144 million
JPY 3,868 million
JPY 137 million
JPY 5,519 million(Note 1) Since the expenses at the overseas hotels are forecasted to exceed therevenues, the excess amount (JPY 164 million) is recorded as management contract
expenses for a portion of facility management fees. Management contract expenses
have been calculated based on the exchange rate of USD 1 = JPY 110.00,
INV expects to incur other operating expenses than the property related expenses ormanagement contract expenses for the fiscal period as follows:・Other operating expenses

December 2021
Fiscal Period
JPY 633 million(of these, asset management fees)(JPY 300 million)

INV expects to record net operating income for the fiscal period as follows:
December 2021
Fiscal Period

NOI

・NOI

JPY 3,767 million(of these, domestic hotel NOI)(of these, overseas hotel NOI)(of these, residential NOI)(JPY 2,636 million)(JPY (320) million)(JPY 1,373 million)

NOI calculation method in the above table is as follows
・NOI＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses+
Dividends on the preferred equity interest (TMK dividend) + (Management Contract
Revenue‐Management Contract Expense)
NOI for the fiscal period ending December 2021 is calculated after considering waivingof rent, and changes of variable rent pursuant to the September 2021 MOU and theDecember 2021 MOU.

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

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

Non-operating expenses

・Interest expense
・Finance related costs・Interest for investment corporation
bonds
・Amortization of investment
corporation bonds issuance
expenses・Foreign exchange losses (Note 1)
・Derivative losses
Total non-operating expenses

December 2021
Fiscal Period
JPY 613 million
JPY 597 million
JPY 28 million
JPY 6 million
JPY 21 million
JPY 20 million
JPY 1,288 million(Note 1) Since the yen has been depreciating compared to the end of the previous fiscal
period, we expect to record foreign exchange losses.
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 ending December 2021, INV expects
to distribute JPY 512 million (distribution per unit: JPY 84), out of the net income of JPY
515 million.
Distribution per unit

For the fiscal period ending December 2021, INV expects to record deferred gain on
hedge of the interest rate swap as the valuation and conversion adjustments, etc. of JPY(75) million, which is equal to the amount for the fiscal period ended June 2020. The
distribution per unit is calculated based on the assumption that fluctuation of the market
value of the interest rate swap does not affect the distribution per unit and earnings per
unit.
Distribution per unit may vary due to various factors, including changes of the assets
under management, fluctuation of rent income associated with reasons such as changeof tenants and occurrences of unexpected repairs.

Excess profit distribution
per unit

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 or significant
expenses are to be recorded in connection with, among other things, the acquisition ofassets 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 ofassets 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 amortization of fixed term land lease or asset
retirement obligation.
With respect to the fiscal period ending December 2021, INV will not make distributions
in excess of profits. INV will not make distributions in excess of profits in order to copewith the discrepancy between tax and accounting treatment.

Excess profit distribution per unit

December 2021
Fiscal Period-

This English language notice is a translation of the Japanese-language notice released on December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

9Other

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 December 8, 2021 and was prepared solely for theconvenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers
to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese-language noticeis provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English
translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and
the Japanese original, the latter shall prevail in all respects.

10