Ooedo Onsen Reit Investment Corporation
Results of 5th Fiscal Period ended November 30, 2018

Presentation Material
January 23, 2019
（Asset Manager）Ooedo Onsen Asset Management Co., Ltd.

Table of Contents
Ⅰ. Investment Highlights

External Growth Strategy

22

Operating Results for the Entire Portfolio

3Internal Growth Strategy

26

Increase/Decrease in Variable Rent

4

Financial Strategy

28

Changes in Key Indices5

Revision of Rents for Some Properties Owned

6

Ⅱ. Financial Highlights

Ⅴ. Appendix
Appraisal Value

30

Introduction of Properties

31

Financial Results for the 5th Fiscal Period ended November 2018

8

Financial Indices41

Forecast for the 6th Fiscal Period ending May 20199Balance Sheet

42

Forecast for the 7th Fiscal Period ending November 201910

Statement of Income

43

Major Factors for Increase/Decrease in Distribution per Unit

11

Debt Status

44

Ooedo-Onsen Monogatari Group45“Ooedo Business Model” with Stable Operations and Sustainable
Growth47

Ⅲ. Investment Results
Portfolio Data

13

Unitholders Breakdown

49

Operating Results of Individual Properties

15

Unitholder Benefit Program

50

Financial Status

17

Profile of IR Activities

51

Track Record of Investment Unit Price52

Governance Structure53

Ⅳ. Ooedo Onsen Reit’s Investment Areas
and Future Investment Strategies
Uniqueness of Ooedo Onsen Reit’s Investing Targets

19

Overview of Investment Corporation

54

Market Environment

20

Overview of Asset Manager

55* The photo on the front cover is a panoramic view from Daiyokujo at Ooedo-Onsen Monogatari Higashiyama Grand Hotel.

Ooedo Onsen Reit Investment Corporation 1

Ⅰ. Investment Highlights

Ooedo Onsen Reit Investment Corporation 2

Operating Results for the Entire Portfolio
Room occupancy remained at a high level in the 5th fiscal period and RevPAR increased slightly
due to improved ADR＜Cumulative comparison of 5th period and the same period of the previous year＞

Room occupancy rate：
90.9%

89.6%

Portfolio operating results
2017

2018

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

86.3%

75.4%

84.8%

95.4%

86.9%

83.1%

81.7%

82.5%

97.6%

86.2%

91.9%

97.4%

87.5%

90.9%

89.6%

-1.3%

ADR (yen)

31,47830,87327,80630,76328,72629,942

26,76029,39740,542

27,75528,53928,98030,28729,99230,583+591

RevPAR (yen)27,16523,27823,57929,347

24,962

24,881

21,862

24,252

39,56823,924

26,22728,226

26,501

27,262

27,402+140

Sales (million yen)

1,496

1,280

1,171

1,583

1,325

1,355

1,190

1,305

2,084

1,259

1,455

1,547

17,056

8,736

8,843

+107

(Note) Sales, ADR, and RevPAR are rounded down to the nearest specified units and percentage rates is rounded to the second decimal place. The same applies hereinafter.

Ooedo Onsen Reit Investment Corporation 3

Increase/Decrease in Variable Rent
Operation and sales, which remained solid in general, differed from one facility to another on the GOP levelthat reflects sales cost and expenses~ Efforts are being made to monitor performance on a facility-by-facility basis and to continue to communicate with tenants(thousand yen)
PropetyNo.

4th period

5th period

Property name

Difference
Fixed

Variable

Total rent

Fixed

Variable

Total rent

S-1

Ooedo-Onsen Monogatari
Reoma Resort

375,275

31,090406,366

375,275

31,090406,366-

S-2

Ooedo-Onsen MonogatariIse-shima

108,056

7,475

115,531108,056

7,507

115,563+32

S-3

Ito Hotel New Okabe

73,7808,549

82,33073,7808,056

81,837-493

S-4

Ooedo-Onsen MonogatariAtami

93,716

7,808

101,525

93,716

7,899

101,615+90

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

54,5896,362

60,95254,5896,202

60,791-160

S-6

Ooedo-Onsen MonogatariAwara

65,7783,731

69,50965,7783,645

69,423-85

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

35,723

4,598

40,32135,723

4,849

40,572+251

S-8

Ooedo-Onsen Monogatari
Ikaho

36,7594,956

41,71636,7594,732

41,491-224

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

24,5902,804

27,395

24,5902,667

27,257-137

868,270

77,377

945,647

868,270

76,649944,920

-727

Total

(Note) The variable rent of Ooedo-Onsen Monogatari Reoma Resort is temporarily fixed until the fiscal period ending May 31, 2019.
Properties acquired in December 2017 are excluded from the above list because they were in the initial period in which variable rents were treated as initial fixed amounts.

Ooedo Onsen Reit Investment Corporation 4

Changes in Key Indices
The 5th fiscal period (actual): Distributions per unit increased 31 yen to 2,466 yen from initial forecast.
LTV declined mainly due to the repayment of short-term borrowings
The 6th and 7th periods (forecasts): Distributions, which will show slight decrease, but are expected toremain stable. LTV is expected to further decline at a moderate pace
4th period

5th period

6th period

7th period(May 2018)(November 2018)(May 2019)(November 2019)

ActualActualForecast

Forecast

DPU per unit

2,435 yen

2,466 yen

2,380 yen

2,380 yen

FFO per unit

4,185 yen

4,247 yen

4,189 yen

4,213 yen

LTV

42.2％

40.9％

40.7％

40.4％

(appraisal value basis)

39.1％

37.6％

37.1％

36.6％

NAV per unit

103,391 yen

104,836 yen

105,769 yen

106,864 yen(book value basis)

LTV(Note) Unrealized gain (Appraisal value – book value) were 3.4 billion yen at the end of the 5th fiscal period (up 0.3 billion yen from the end of the previous fiscal period).
LTV (on an appraisal value basis) for the 6th and 7th fiscal periods is based on the assumption that appraisal value will remain unchanged.

Ooedo Onsen Reit Investment Corporation 5

Revision of Rents for Some Properties Owned (Effective from June 2019)
Fixed rents for four properties will be revised from the perspective of optimizing rent burdens that reflect
trends into consideration on a property-by-property basis.
The total amount of fixed rents remains unchanged(Purpose of the revision) Achieve stabilization by reducing the fixed rent of Reoma Resort because its rent burden rate against GOP is high and burdens
for equipment held by the tenant are also great.
 Make rent burden rates more uniform by increasing fixed rents for properties whose payment capacity is high.
 Step up diversification efforts by decreasing the ratio of Reoma Resort to total rent income (30.5%→25.6%)

Revision of fixed monthly rents
PropetyNo.

Property name(thousand yen)
Before revision of

After revision of

fixed monthly rents

fixed monthly rents

Difference

S-1

Ooedo-Onsen Monogatari Reoma Resort+62,456+52,456-10,000

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu+9,788+12,496+2,708

S-12

Kinugawa Kanko Hotel+22,478+29,069+6,591

S-13

Ooedo-Onsen Monogatari Kinosaki+12,447+13,147+700+107,171+107,171－

Total

Partial modifications to application coefficients for variable rents in response to the revision of fixed rents
PropetyNo.

Property name

Before modifications ofapplication coefficients forvariable rents

After modifications ofapplication coefficients forvariable rents

S-1

Ooedo-Onsen Monogatari Reoma Resort

64.0％ of Modified GOP

58.7％ of Modified GOP

S-12

Kinugawa Kanko Hotel

47.5％ of Modified GOP

56.0％ of Modified GOP[Case in which variable rents are applied]
Modified GOP x Coefficient> Amount equivalent to fixed rent for one year
[Case in which variable rent is not applied]
Modified GOP x Coefficient≦ Amount equivalent to fixed rent for one year

(Note) “GOP” refers to gross operating profit, which is the amount remaining after deducting expenses arising directly from managing each facility, such as labor expenses and general and administrative
expenses, from each facility’s sales. “Modified GOP” is the amount remaining after deducting real estate-related expenses for the property to be borne by the tenant (including, but not limited to,taxes and public charges, non-life insurance premiums and land and house rent, but excluding an amount equivalent to Secondary rent) from the GOP of each facility for the Modified GOP Calculation Period.
The same applies hereinafter.

Ooedo Onsen Reit Investment Corporation 6

Ⅱ. Financial Highlights

Ooedo Onsen Reit Investment Corporation 7

Financial Results for the 5th Fiscal Period ended November 2018
Distributions increased period on period due to the absence of unit issuance expenses,
despite the full period recording of fixed asset taxes and city planning taxes on
Main factors for increase/decrease from forecast
properties acquired previously.
・Insurance revenue, etc. (Awara, Ikaho)
Profits were higher than forecasts due to such factors as insurance revenue(thousand yen)
Item

Operating revenue

4th period

5th period（Actual）（Actual）

Component
ratio

Primary rent

1,442,676

Component
ratio

1,325,793

5th period(Forecast as ofJul. 19, 2018)

Difference

1,450,211+7,535

1,448,367

・Repairs covered by insurance (Awara, Ikaho)

Lease operations revenue gain/loss
・Decrease in transfer agent fee

Difference

Operating income+1,843

1,331,297+5,504

1,331,964-666(thousand yen)

+2,356-1,683+662+2,764+3,482・Interest on refund of consumption tax+871

・Decrease in finance-related expenses+2,967

Ordinaly income+7,332

Fixed rent

94.2%

1,248,415

92.4%

1,230,449-17,966

1,230,449-0

Variable rent

5.8%

77,377

7.6%

100,847+23,470

101,514-666

115,540

116,282+741

116,128+153

Others

1,342

2,631

+1,289275+2,356

Lease operations
revenue gain/loss

919,683

908,332-11,350

907,670+662

Operating income

734,305

714,516-19,789

711,033+3,482

Ordinary income

571,225

578,593+7,367571,260+7,332・Increase in AM fee-3,704-1,547-6,132

Secondary rent

Net income
Excess cash distribution
Total distribution

Main factors for increase/decrease
from previous fiscal period(thousand yen)・Increase in primary rent due to the full period contribution of
5 newly acquired properties*Transfer from fixed rent in line with the start of variable rent for new properties:
23,470 thousand yen (fixedvariable)

・Recorded burden of fixed asset taxes and city planning taxes
for the full period (5 newly acquired properties)
・Increase in depreciation (capital expenditure)

Lease operations revenue gain/loss

570,273577,620+7,347570,260+7,359・Increase in transfer agent fee(increase in the number of unitholders)

2,824

2,824

-

2,824

-

・Increase in the shipping cost, etc.
(increase in the number of unitholders)

573,069

580,365+7,295573,069+7,295

Operating income
・Interest on refund of consumption tax

Total units outstanding
DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI235,347

235,347-

235,347

-

2,435

2,466

+31

2,435

+31

12

12

-

12

-

4,185

4,247

+62

4,218

+29

1,334,384

1,330,330-4,0541,330,157+172

Depreciation

414,701

421,997+7,295422,487

-489

CAPEX

141,112206,381+65,268

212,408-6,026+5,504・Absence of investment unit issuance expenses
・Decrease in finance-related expenses

Ordinaly income

Main financial indicators-10,997-7,295-11,350-19,789+871+22,456+1,328+7,367(million yen)

Total assets

39,106

Interest-bearing debt

15,991

Total liabilities

17,881

Total net assets

21,224

LTV (book value basis)
NAV per unit

40.9%
104,836 yen

Ooedo Onsen Reit Investment Corporation 8

Forecast for the 6th Fiscal Period ending May 2019
Revenue will decline period on period because the revaluation of fixed asset taxes and city planningtaxes will be reflected in secondary rents. DPU is expected to be lower by 1% than the forecast~ assuming valuable rents to decline, reflecting the recent condition of tenant’s performance(thousand yen)
Item

Operating revenue

5th period

6th period（Actual）（Forecast）

Component
ratio

Primary rent

1,450,211

Component
ratio

1,331,297

6th period(Forecast as ofJul. 19, 2018)

Difference

Difference

1,434,151-16,060

1,441,160-7,0091,329,413-1,883

1,336,329-6,915

Fixed rent

92.4%

1,230,449

92.6%

1,230,449+01,230,449-

Variable rent

7.6%

100,847

7.4%

98,963-1,883

105,879-6,915116,282

104,462-11,819

104,556-93

Others

2,631

275-2,356275-

Lease operations
revenue gain/loss

908,332

885,642-22,690

894,839-9,197

Operating income

714,516

695,150-19,366

702,198-7,047

Secondary rent

Ordinary income

578,593558,184-20,408565,252-7,067

Net income

577,620557,184-20,435

564,252-7,067Main factors for increase/decrease from forecast(thousand yen)・Decrease in variable rent (Kounkaku, etc.)-6,915・Increase in other expenses (survey on asbestos, etc.)-1,563

Lease operations revenue gain/loss
・Decrease in transfer agent fee

Operating income
・Increse in finance-related expenses

Ordinaly income

Total distribution

2,824

2,824

-

2,824

-

580,365

560,125-20,239

567,186-7,060DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI235,347

235,347-

235,347

-

2,466

2,380

-86

2,410

-30

12

12

-

12

-

4,247
1,330,330

4,189
1,314,390-58-15,939

4,216
1,322,972-27-8,582

Depreciation

421,997428,748+6,751

428,133

+615

CAPEX

206,381180,001-26,380

180,000+1-19-7,067(thousand yen)・Decrease in secondary rent reflecting the review of thevaluation amount of fixed asset taxes and city planning taxes
・Increase in depreciation (capital expenditure)・Decrease in AM fee

Operating income
・Absence of interest on refund of consumption tax

Total units outstanding+2,192-7,047Main factors for increase/decrease
from previous fiscal period

Lease operations revenue gain/loss

Excess cash distribution-9,197

Ordinaly income

Main financial indicators-11,819-6,751-22,690+3,262-19,366-871-20,408(million yen)

Total assets

38,876

Interest-bearing debt

15,804

Total liabilities

17,674

Total net assets

21,201

LTV (book value basis)

40.7%

Ooedo Onsen Reit Investment Corporation 9

Forecast for the 7th Fiscal Period ending November 2019
Earnings from operations will remain at the previous period’s level. Operating revenue and DPU will remainunchanged from the previous period through efforts to offset an increase in depreciation by reductions in
SG&A expenses(thousand yen)
Item

Operating revenue

6th period

7th period（Forcast）（Forecast）

Component
ratio

Primary rent

1,434,151

Component
ratio

1,329,413

Difference

1,434,133-17

1,329,492+78

Fixed rent

92.6%

1,230,449

92.6%

1,230,449-

Variable rent

7.4%

98,963

7.4%

99,042+78

104,366-96

Secondary rent
Others104,462
275

275

-

Lease operations
revenue gain/loss

885,642881,496-4,145

Operating income

695,150

694,775-374

Ordinary income

558,184558,229+44

Net income

557,184

557,229+44

Main factors for increase/decrease
from previous fiscal period(thousand yen)・Decrease in other expenses (survey on asbestos, etc.)+1,626

・Increase in depreciation (capital expenditure)-5,706

Lease operations revenue gain/loss+1,500・Decrease in administration service expenses, etc.

+1,500Operating income
・Decrease in finance-related expenses

Ordinaly income

Main financial indicators

Excess cash distribution

2,824

2,824

-

Total distribution

560,125

560,125-

Total units outstanding

235,347

235,347

-

2,380

2,380

-

12

12

-

4,189

4,213

+24

1,314,390

1,315,951+1,561

Depreciation

428,748

434,454+5,706

CAPEX

180,001

180,000-0DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI-4,145・Decrease in IR-related expenses

-374
+419

+44

(million yen)

Total assets

38,683

Interest-bearing debt

15,618

Total liabilities

17,485

Total net assets

21,198LTV (book value basis)

40.4%

Ooedo Onsen Reit Investment Corporation 10

Major Factors for Increase/Decrease in Distribution per Unit
Distributions, which will decrease slightly in the 6th period, will be stable at around the level of 2,400 yen
per unit for normal operations
(yen)

2,700

5th period

6th period

7th period(November 2018)(May 2019)(November 2019)

－96

＋16

＋11

＋2

2,500

+14

－17

－4

＋16

＋1

2,300

2,466

2,435

2,380

2,100

2,380

～
～

1,900
0

5th period
Forecast

Lease
operations
revenuegain/loss

Selling,
general andadministrative
expenses

Nonoperating
income/expenses

5th period (forecast) – 5th period (actual)
Lease operations revenue gain/loss

5th period
ActualLease
operations
revenuegain/loss

Selling,
general andadministrative
expenses

Nonoperating
income/expenses+2

Lease operations revenue gain/loss

・Decrease in secondary rent
・Increase in depreciation (capital expenditure)

Selling, general and administrative expenses +11

・Decrease in AM fee

・Decrease in transfer agent fee＋11

Non-operating income/expenses

+16
+3
+12

Selling, general and administrative expenses

Non-operating income/expenses

・Absence of Interest on refund of consumption tax

Lease
operations
revenuegain/loss

Selling,
general andadministrative
expenses

Nonoperating
income/expenses

7th period
Forecast

6th period (forecast) – 7th period (forecast)

5th period (actual) – 6th period (forecast)・Increase in other revenue (insurance revenue, etc.) +10-7・Increase in other expenses(Repairs covered by insurance)・Interest on refund of consumption tax
・Decrease in finance-related expenses

6th period
Forecast

-96
-50
-28

+14
+13

-4
-3

Lease operations revenue gain/loss

・Decrease in other expenses (survey on asbestos)・Increase in depreciation (capital expenditure)

-17
＋6
-24

Selling, general and administrative expenses +16

・Decrease in administration service expenses
・Decrease in IR-related expenses＋6+6

Non-operating income/expenses+1・Decrease in finance-related expenses＋1(Note) As for the signs for each item, “＋” indicates those that lead to the increase in distribution per unit and “-” indicates those that lead to the decrease in distribution per unit.

Ooedo Onsen Reit Investment Corporation 11

Ⅲ. Investment Results

Ooedo Onsen Reit Investment Corporation 12

Portfolio Data (1)Unrealized gain (Appraisal value – Book value) increased 3.44 billion yen (up 0.33 billion yen period on
period) at the end of the 5th period due to a partial rise in appraisal value
PropertyNo.

S-1

Property name

Ooedo-Onsen Monogatari Reoma Resort

Location

Kagawa Prefecture

Building age(years)27.4／27.7

Number of
rooms

Room
occupancy
rate(Note 1)

Appraisal
Acquisition
NOI
value
price
(million yen)(million yen) (million yen)

NOI
yield
(Note 2)After
depreciation
NOI yield

PML(Note 2)

241

85.4%

10,37910,900

405

7.8%

6.2%

1.9／1.6％

93.8%

3,656

3,840

114

6.3%

3.5%

14.2%

88.2%

2,657

2,820

81

6.1%

4.1%

12.0%

(Note 3)S-2

Ooedo-Onsen Monogatari Ise-shima

S-3

Ito Hotel New Okabe

Mie Prefecture

38.7

83

Shizuoaka Prefecture

28.1

73

(Note 4)S-4Ooedo-Onsen Monogatari Atami

Shizuoaka Prefecture

44.9

76

97.3%

2,997

3,220

101

6.7%

4.5%

12.6%

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

Shizuoaka Prefecture

44.2

64

84.0%

1,910

2,020

60

6.3%

3.4%

14.9%

S-6

Ooedo-Onsen Monogatari Awara

Fukui Prefecture

37.3

95

89.6%

1,901

2,000

69

7.3%

5.1%

14.9%

S-7

Ooedo-Onsen Monogatari Kamoshika-so

Tochigi Prefecture

22.8

60

92.2%

1,222

1,270

39

6.5%

4.3%

3.0%

S-8

Ooedo-Onsen Monogatari Ikaho

Gunma Prefecture

35.1

40

97.4%

1,299

1,380

40

6.3%

4.2%

1.0%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-moriChiba Prefecture

22.7

41

94.4%

819

862

26

6.4%

4.6%

4.8%

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Nagasaki Prefecture

36.4

100

92.5%

1,637

1,930

63

7.7%

5.3%

6.4%

S-11

Ooedo-Onsen Monogatari Kounkaku

Miyagi Prefecture

53.0

98

85.4%

1,040

1,250

47

9.2%

5.3%

3.9%

S-12

Kinugawa Kanko Hotel

Tochigi Prefecture

37.3

172

89.6%

3,870

4,620

143

7.4%

4.3%

2.1%

S-13

Ooedo-Onsen Monogatari Kinosaki

Hyogo Prefecture

50.1

103

91.2%

2,084

2,490

78

7.5%

5.6%

11.8%

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel Fukushima Prefecture

54.2

123

88.9%

1,230

1,480

57

9.3%

5.1%

4.6%

37.0

1,369

89.6%

36,70540,082

1,330

7.2%

4.9%

2.7%

Total/Average(Note 5)(Note 1) Room occupancy rate is for the 5th period ended November 30, 2018 of the investment corporation.
(Note 2) (Average) NOI yield and (average) after depreciation NOI yield indicate annualized figures.
(Note 3) As for Building age and PML of Ooedo-Onsen Monogatari Reoma Resort, figures on the left indicate those of Hotel Reoma no Mori while figures on the right indicate those of New Reoma World.
(Note 4) The room occupancy rate of Ito Hotel New Okabe is a comprehensive figure including the rate of Surugatei, a property not owned by the investment corporation.
(Note 5) The room occupancy rate of Ooedo-Onsen Monogatari Kounkaku is a comprehensive figure including the rate of the Annex, a property not owned by the investment corporation.

Ooedo Onsen Reit Investment Corporation 13

Portfolio Data (2)Location based on the assumption of attracting a large number of customers from urban areas anddiversification of the investment area
Investment ratio by region (acquisition price basis)

Ooedo-Onsen Monogatari

Kounkaku
Ooedo-Onsen Monogatari
Ooedo-Onsen
Monogatari
Ooedo-Onsen Monogatari

Higashiyama Grand Hotel
Ooedo-Onsen
Monogatari

Awara

Ikaho

KinosakiInvestment ratio by facility (acquisition price basis)
Share oftop 3 properties

48.8％

Ooedo-Onsen Monogatari

Nagasaki Hotel Seifu

Kamoshika-so
Kinugawa
Kanko Hotel
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Reoma Resort

Ooedo-Onsen
Monogatari

Kimitsu-no-moriOoedo-Onsen MonogatariIse-shima

Ooedo-Onsen Monogatari

Atami
Ito Hotel New Okabe
Ooedo-Onsen Monogatari

Toi Marine Hotel

Ooedo Onsen Reit Investment Corporation 14

Operating Results of Individual Properties (1)Operation status remained firm in general. In addition, many facilities raised RevPAR due to improved ADR

1. Operating results of the accommodation sector
Room occupancy rate(%)

ADR(yen)

RevPAR(yen)5th period
cumulative
Total

Previous
corresponding
periodcumulative
total

Previous
corresponding
periodcumulative
total

Previous
corresponding
periodcumulative
total

Sales(million yen)Previous
corresponding
periodcumulative
total

Property
No.

Property name

S-1

Ooedo-Onsen Monogatari
Reoma Resort <Hotel Reoma-no-mori>

85.4

86.6

-1.4%

31,166

29,836+4.5%

26,61525,837

+3.0%

1,591

1,543

+3.1%

S-2

Ooedo-Onsen MonogatariIse-shima

93.8

94.8

-1.1%

34,50034,217+0.8%

32,361

32,437

-0.2%

594

594

+0.0%

S-3

Ito Hotel New Okabe

88.2

84.5

+4.4%

30,16030,379-0.7%

26,601

25,670

+3.6%

631

609

+3.6%

S-4

Ooedo-Onsen Monogatari
Atami

97.3

96.3

+1.0%

33,22433,595-1.1%

32,32632,351

-0.1%

528

527

+0.2%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

84.0

83.4

+0.7%

30,50630,111+1.3%

25,625

25,112

+2.0%

337

332

+1.6%

S-6

Ooedo-Onsen Monogatari
Awara

89.6

88.4

+1.4%

30,22429,603+2.1%

27,08026,169

+3.5%

599

582

+2.8%

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

92.2

93.4

-1.3%

27,951

27,564+1.4%

25,77025,744

+0.1%

335

333

+0.6%

S-8

Ooedo-Onsen Monogatari
Ikaho

97.4

98.3

-0.9%

31,022

30,637+1.3%

30,21530,116

+0.3%

256

253

+1.0%

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

94.4

96.3

-2.0%

26,73826,312+1.6%

25,24025,338

-0.4%

278

283

-1.7%

Change5th period
cumulative
Total

Change5th period
cumulative
Total

Change5th period
cumulative
Total

ChangeOoedo Onsen Reit Investment Corporation 15

Operating Results of Individual Properties (2)Room occupancy rate(%)
Property
No.

Property name

5th period
cumulative
Total

Previous
corresponding
periodcumulative
total

ADR(yen)ChangePrevious
corresponding
periodcumulative
total

5th period
cumulative
Total

RevPAR(yen)Change5th period
cumulative
Total

Previous
corresponding
periodcumulative
total

Sales(million yen)

Change5th period
cumulative
Total

Previous
corresponding
periodcumulative
total

ChangeS-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

92.5

99.7

-7.2%

33,96931,677+7.2%

31,421

31,581

-0.5%

654

663

-1.4%

S-11

Ooedo-Onsen Monogatari
Kounkaku

85.4

91.3

-6.5%

24,39326,065-6.4%

20,831

23,797-12.5%

511

516

-0.9%

S-12

Kinugawa Kanko Hotel

89.6

94.0

-4.7%

32,166

31,050+3.6%

28,82029,187

-1.3%

1,192

1,212

-1.6%

S-13

Ooedo-Onsen Monogatari
Kinosaki

91.2

90.3

+1.0%

30,50929,901+2.0%

27,82427,000

+3.1%

638

622

+2.5%

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

88.9

87.8

+1.3%

28,432

27,248+4.3%

25,27623,923

+5.7%

691

659

+4.9%

89.6

90.9

-1.4%

30,58329,992+2.0%

27,402

27,262

+0.5%

8,843

8,736

+1.2%

Total

2. Operating results excluding the accommodation sector
Number of guests
PropertyNo.

S-1

Property name

Ooedo-Onsen Monogatari
Reoma Resort <New Reoma World>

5th period
cumulative
Total

344,840

Previous
corresponding
periodcumulative
total

326,508

Sales(million yen)

Change+5.6%

5th period
cumulative
Total

1,364

Previous
corresponding
periodcumulative
total

1,359

Change+0.4%(Note) Number of guests is the total number of people using New Reoma World during the period.

Ooedo Onsen Reit Investment Corporation 16

Financial Status
Pursued a conservative LTV level of below 40% on an appraisal value basis and diversification of borrowing
institutions and repayment due dates
Breakdown of lenders

LTV

Ratio of long-term borrowings

Number of syndicate lenders: 13

Overview of maturity（million yen）

Short-term borrowings

8,000

Long-term borrowings

Avg. remaining duration
1.4 years

6,000
4,000
2,000
0

6th

7th

8th

9th

10th

11th

12th

13th

14th

May-19

Nov-19

May-20Nov-20May-21

Nov-21

May-22

Nov-22

May-23

Ooedo Onsen Reit Investment Corporation 17

Ⅳ. Ooedo Onsen Reit’s Investment Areas
and Future Investment Strategies

Ooedo Onsen Reit Investment Corporation 18

Uniqueness of Ooedo Onsen Reit’s Investing Targets
Investment targets are facilities used for enjoying leisure time in a variety of ways,
with priority investments targeting onsen and spa complex that provide multiple services for
consumers(onsen/spa-related facilities)
Ooedo Onsen Reit’s Investing Targets

Shopping
Entertainment

H&BC

Accommodation

Dininganddrinking（Health &Beauty Care）

Onsen/spa

 Investment targets are facilities for utilizing leisuretime to provide people with a fulfilling experience oftime consumption based on the trend of embracing
services rather than goods.
 One of the core services are onsen/spa facilities that
not only respond to stable tradition-based demand but
also the needs of new and diverse customers
including inbound customers.

Theme park

SportsAmusements＋αOtherservices

 Investments are made in business-use properties
represented by the facilities of the Ooedo-Onsen
Monogatari Group, whose markets have been stable
due to efforts to capture contemporary consumer
needs and the trend of consumption for services(experience-oriented).

Ooedo Onsen Reit Investment Corporation 19

Market Environment (1)The way people enjoy their leisure time has been changing and the leisure market has been expanding,reflecting such factors as an increase in consumption for services, rise in the number of active elderly
people and workstyle reforms
Trends in the consumption of services

Source: Implementation of Consumer Policies in 2016 by the Consumer Affairs Agency

Trends in the leisure market(billion yen)

Priority matters in life

Source: Public Opinion Survey on the Life of the People (a survey conducted in June 2014)

・The number of consumer policies in relation to services
implemented by the Consumer Affairs Agency has been
increasing since 1980.
・According to the Public Opinion Survey Concerning People’s
Lifestyles, people put the greatest emphasis on leisure/leisurelives.
・Hotel revenues have been increasing consistently over recent
years and other indexes have been stable in the leisure market.

Source: “Annual Report on the Tourism Trends Survey 2018”

Ooedo Onsen Reit Investment Corporation 20

Market Environment (2)Onsen demand has been stable in the long term aided by strong demand from thick populationof elderly and family customers
Trends in number of accommodation facilities
and FY total number of guests(facilities)
16,000No. of accommodation facilities (left axis)
FY total no. of guests (right axis)(thousands)
15000012000012,000

Ratio of visits to onsen and spa facilities by age
(%)
70
60

Families
Male

Seniors

Female

50
90000

8,000
60000

40
30

30.7

26.7

30.2

34.0

28.5

26.9

15.8

20

4,000
0
FY2010FY2012FY2014

30000

10

0

0

FY2016

Source: Onsen Use (2010 – 2016), Nature Conservation Bureau, Ministry of the Environment

Type of trip desired in the next 1-2 years(multiple responses)
Onsen

47.4%

Sightseeing, nature

46.5%

Gourmet40.6%

Sightseeing, history/culture

38.5%

Theme park

31.8%

Seashore resort

29.9%

Sightseeing, city

20.6%

Walking in town

19.8%

Shopping

19.0%

Long Stay

17.8%

Japanese style inn

17.4%
0%

20%

40%

22.2

26.5

27.7

26.7

10's

20's

30's

40's

50's

60's

70's

Source: “White Paper of Leisure 2018”by Japan Productivity Center

・The number of accommodation facilities‘ guests has beenstable since FY2010 according to the Onsen Use Survey by
the Ministry of the Environment
・Families and the elderly have been creating a firm customer
segment and demand is also strong among people in their
20s and 50s.

23.7%

Tour of world heritage sites

24.5

32.5

18.8

60%

Source: “Annual Report on the Tourism Trends Survey 2018” (October 2018)

・”Onsen” collected the largest percentage among types of trip
desired according to the Annual Report on the Tourism
Trends Survey
Ooedo Onsen Reit Investment Corporation 21

External Growth Strategy (1)Constant supply of properties on a long-term basis by leveraging the sponsor pipeline
Priority negotiating rights on all properties held by Ooedo-Onsen Monogatari Group (Main properties listed below)

Tokyo Odaiba
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari
Nikko Kirifuri

Ooedo-Onsen Monogatari
Urayasu Mangekyo(Fixed term land lease right forbusiness purpose)(Koto-ku, Tokyo)(Nikko City, Tochigi Prefecture)(Fixed term land lease right for (Minoh City, Osaka Prefecture)business purpose)(Urayasu City, Chiba Prefecture)

Ooedo-Onsen
Monogatari Nagayama

Yamashiro Onsen
Yamashitaya

Hotel New Shiobara(Kaga City,
Ishikawa Prefecture)(Kaga City,
Ishikawa Prefecture)(Nasushiobara City,
Tochigi Prefecture)

Ooedo-Onsen-Monogatari
Minoh Kanko Hotel

Minoh Onsen Spa Garden

Hotel Kinugawa Gyoen(Minoh City, Osaka Prefecture)(Nikko City, Tochigi Prefecture)

Ooedo-Onsen Monogatari
KakeyuOoedo-Onsen Monogatari
Aizu

Ooedo-Onsen Monogatari
Taiheinoyu Sumpu Yumehiroba(Ueda City, Nagano Prefecture)(Aizu Wakamatsu City,
Fukushima Prefecture)(Shizuoka City, Shizuoka Prefecture)

Properties acquired by the Ooedo Onsen Monogatari Group after the establishment of the investment corporation
October 2016 -April 2017 -July 2017 -July 2017 -April 2018 -August 2018 -Scheduled to open
in the spring of 2019

Ooedo-Onsen Monogatari
Naruko-onsen Masuya

Ooedo-Onsen Monogatari
Hotel Suiyotei

Ooedo-Onsen Monogatari
Beppu Seifu

Ooedo-Onsen Monogatari
Gero Shin-kan

Ooedo-Onsen Monogatari
Nanki Kushimoto

Ooedo-Onsen Monogatari
Hotel Kisoji(Osaki City, Miyagi Prefecture)(Atami City,
Shizuoka Prefecture)(Beppu City, Ooita Prefecture)(Gero City, Gifu Prefecture)(Higashi Muro County,
Wakayama Prefecture)(Kiso County,
Nagano Prefecture)(formerly) Thalassa
Shima Hotel & Resort(Toba City, Mie Prefecture)⇒ In addition to the above, properties that will be newly acquired by sponsors going forward are coveredby the preferential negotiating rights, forming a new pipeline
Ooedo Onsen Reit Investment Corporation 22

External Growth Strategy (2)The number of inquiries for potential deals received from the asset manager’s own sources as well as
sponsors doubled period on period and preferential negotiation rights were secured for some deals
Investment targets (quoted from the articles of incorporation)

Number of inquiries raised forpotential deals in the 5th fiscal
period ended November 2018

Investment in facilities
aimed at utilizing leisure time

Ryokans, Hotels, Spa facilities, Resort facilities,
Amusements and Other leisure facilities

234

Property information other than in the sponsor pipeline＜by source＞＜by type＞
Ordinance-designated cities

Core citiesof whichexamined

Otherof whichexaminedof whichexamined

No. ofproperties
preferential
rights were
given (Note)

Totalof whichexamined

Lodging

7

3

2

1

51

15

60

19

3

Other
(day trips, etc.)

1

0

1

0

7

4

9

4

0

Other lodgings

81

14

17

3

48

9

146

26

1

Entertainment, Amusement

4

0

2

2

5

1

11

3

0

Sports, beauty,
health promotion facilities

4

1

0

0

4

1

8

2

1

97

18

22

6

115

30

234

54

5

Onsen/Spa

Total(Note) Numbers presented are current as of January 23, 2019. Although the Investment Corporation has obtained preferential rights forrelevant properties, it is neither in a position to acquire nor obligated to acquire all of these properties.

Ooedo Onsen Reit Investment Corporation 23

External Growth Strategy (3)Basic policies for the acquisition of properties other than those in the sponsor pipeline
1. As portfolios focused on leisure facilities for utilizing leisure time, target investment assets that contribute to the expansion ofdiversity and property sizes.
2. For the time being, focus efforts on acquiring facilities that make the current portfolios, which are mainly comprised of sponsor
properties, more balanced and diversified.
3. In categories that are familiar to the sponsor, focus efforts on acquiring facilities with potential whose value is expected to beenhanced through the Ooedo model.
Specific images for investment targets
Examples from theperspective of
locations








Examples from theperspective of
business types andfunctions

Urban areas, city areas in the suburbs, etc.
(Ordinance-designated cities, core cities, prefectural capitals and suburbs)
Sightseeing spots popular among inbound customers, etc.
Many types of urban-type lodging facilitiese
Onsen/spa and its complex facilities, including one-day trips
Varieties of leisure facilities for utilizing leisure time that have their own loyal
customers and markets
Leisure facilities with a complementary function to fulfill the increasing needs ofinbound customers(targeted properties include those not equipped with onsen/spa facilities)[Examples from the perspective of inbound tourism needs]- High-quality urban lodging facilities for inbound tourists- Onsen/spa-related facilities that meet inbound tourism needs that are expected to
expand going forward- Resorts, experience-oriented leisure facilities, etc. for inbound tourism needs<Trends in the number of foreign tourists visiting Japan>(thousand)
40,00035,00031,191
28,691

30,00024,03925,00019,73720,00013,41315,00010,3638,367

10,000
6,218
5,000
0



Onsen/spa-related facilities that feature high specifications including
the possibility of adopting the Ooedo model

2011

2012

2013

2014

2015

2016

2017

2018

Source: Japan National Tourism Organization (JNTO)

Step up efforts to diversify business types and functions, locations and tenants
by expanding portfolios focused on leisure facilities for utilizing leisure time.
Ooedo Onsen Reit Investment Corporation 24

External Growth Strategy (4)Exploiting opportunities for external growth as leisure facility focused REIT with the core of onsen/spa~Transformation from a small-scale REIT into a med-to-large REIT~

Pursue continuous
external growth
AUM of￥100 billion
Asset: 14 properties
Asset acquisition atlisting: 9 properties

AUM of￥26.8 billion

At listing(End of Aug. 2016)

AUM of￥70 billion

AUM of￥36.7 billion
Achieving AUM of ¥70 to ¥100 billion
for the time being

5th fiscal period
ended in Nov. 2018

5 years after listing

Ooedo Onsen Reit Investment Corporation 25

Internal Growth Strategy (1)Conservative rent system and facility ownership for the securing of stable cash flows
Lease conditions for properties master-leased to the Ooedo-Onsen Monogatari Group as of November 30, 2018
Contract period:

20 years

Modified GOP (Note)

Non-cancellation period:

5-7 years
Rent revision:every

3 years

Primary rent
Fixed rent component

Approximately 95％

Secondary rent
Variablerent
component

Approximately 5％

50% to 60% of the modified GOP
Amount equivalent to real estate
related expenses of each facility*Variable rent component will beapproximately 8% by including the variable
rent of Ooedo-Onsen Monogatari Reoma
Resort that was fixed Primary rent = Fixed rent component (monthly amount stipulated by each lease agreement of each facility)+ variable rent component(Variable rent = Modified GOP for each facility × the fixed rate stipulated by each lease agreement) Secondary rent = The total of taxes and public dues that is liable for the Investment Corporation+ nonlife insurance premiums + other expenses
 Repair costs are, in principle, borne by the tenant The Investment Corporation holds only the land and building itself and main equipment; and responds to deterioration
over time through planned partial rebuilding and such
(Note) Modified GOP is a sum calculated by deducting from the individual facility’s GOP arising during the modified GOP calculation period the property-related costs borne by the tenant(including, but not limited to, taxes and public charges, non-life insurance premiums, and land rent; however, the sum corresponding to the secondary rent is not included).

Ooedo Onsen Reit Investment Corporation 26

Internal Growth Strategy (2)Investment opportunities for increased value on a medium- to long-term basis

1. Enhance revenue raising capabilities through additional investments Increase in capacity based on high room occupancy rates in existing facilities owned(increase in the number of rooms, etc.)
 Increase in revenues through the effective use of buildings and land that have not been operated or used in
facilities (Ooedo-Onsen Monogatari Reoma Resort, etc.)

2. Increase variable rents by enhancing competitiveness The addition of service menus and functions, etc. that will attract customers, in cooperation with tenants
 Response to new customers, including properties other than those of the sponsor that are to be acquiredin the future (inbound tourists that will trend higher, etc.)
Particularly for facilities operated by the Ooedo-Onsen Monogatari Group (tenant),
which is the sponsor, an opportunity for value-increasing investment based on information sharing
and collaboration will be considered and provided＜Value-increasing efforts＞
Previous route

New route

Date ofcommencementof operations-

Shinjuku,
Yokohama

Sep. 1, 2018

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

Niigata

Sendai,
Fukushima

Sep. 1, 2018

Ooedo-Onsen Monogatari
Reoma Resort

Osaka, Hyogo,
Okayama, Hiroshima

Ehime

Oct. 14, 2018

Ooedo-Onsen Monogatari
Kounkaku

Sendai

Yamagata

Nov. 1, 2018

Property nameIto Hotel New Okabe

Installation of a counter for alcoholic drinks(Kinugawa Kanko Hotel)

Illuminations(Ooedo-Onsen Monogatari Reoma Resort<New Reoma World>)

Efforts to increase the number of direct shuttle bus routes

Ooedo Onsen Reit Investment Corporation 27

Financial Strategy
Implementation of flexible financial strategies while attaching importance to the establishmentof a conservative financial base

Basic policy
LTV control

Will target around 40% for the time being and maintain a conservative level on a normal basis.

Debt financeWill seek to reduce financial costs through the further diversification of risks in the portfolio and financing
sources. In addition, it will make repayment periods more diversified and even to reduce refinancing risk.

Proper cash management
Concept of free cash

・Unexpected expenditure・Flexible acquisition of assets/LTV control
・Excess cash distribution

Capitalexpenditure
Depreciation

Excess cash distribution policy

Scheduled
repayment
Free cash

Assumes conducting, as necessary, excess cash distribution
equivalent to the increase amount of the allowance for adjustmentof temporary difference considering income taxes arising in line withthe differences in accounts for tax and accounting purposes.

Ooedo Onsen Reit Investment Corporation 28

Ⅴ. Appendix

Ooedo Onsen Reit Investment Corporation 29

Appraisal Value

Property
No.

Property nam e

Direct capitalization m ethod
Discounted cash flow m ethod
Unrealized
Appraisal value (m illion yen)
Acquisition
profits andDiscount Rate
Term inal Cap Rate
Direct Cap Rate
Book valuePricelosses
4th period 5th period
4th period 5th period
4th period 5th period(m illion yen) 4th period 5th period(m illion(m illion
Changevaluation May 31,
valuationyen)
May 31,
Nov. 30,
May 31,
Nov. 30,
May 31,
Nov. 30, valuation
Nov. 30,
yen)
2018
2018
2018
2018
2018
2018
2018
2018

S-1

Ooedo-Onsen Monogatari
Reoma Resort

10,37910,444

10,90010,900

‐

+455

6.1%

6.0%

-0.1%

5.9%

5.8%

-0.1%

6.3%

6.2%

-0.1%

S-2

Ooedo-Onsen MonogatariIse-shima

3,656

3,520

3,840

3,840

‐

+319

5.6%

5.6%

‐

5.4%

5.4%

‐

5.8%

5.8%

‐

S-3

Ito Hotel New Okabe

2,657

2,661

2,790

2,820

+30

+158

5.2%

5.1%

-0.1%

5.0%

4.9%

-0.1%

5.4%

5.3%

-0.1%

S-4

Ooedo-Onsen Monogatari
Atami

2,997

2,922

3,180

3,220

+40

+297

5.2%

5.1%

-0.1%

5.0%

4.9%

-0.1%

5.4%

5.3%

-0.1%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

1,910

1,863

1,990

2,020

+30

+156

5.7%

5.6%

-0.1%

5.5%

5.4%

-0.1%

5.9%

5.8%

-0.1%

S-6

Ooedo-Onsen Monogatari
Awara

1,901

1,914

1,980

2,000

+20

+85

6.0%

5.9%

-0.1%

5.8%

5.7%

-0.1%

6.2%

6.1%

-0.1%

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

1,222

1,216

1,270

1,270

‐

+53

5.3%

5.3%

‐

5.1%

5.1%

‐

5.5%

5.5%

‐

S-8

Ooedo-Onsen Monogatari
Ikaho

1,299

1,306

1,380

1,380

‐

+73

5.4%

5.3%

-0.1%

5.2%

5.1%

-0.1%

5.6%

5.5%

-0.1%

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

819

842

862

862

‐

+19

5.3%

5.3%

‐

5.1%

5.1%

‐

5.5%

5.5%

‐

S-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

1,637

1,653

1,930

1,930

‐

+276

5.2%

5.2%

‐

5.0%

5.0%

‐

5.4%

5.4%

‐

S-11

Ooedo-Onsen Monogatari
Kounkaku

1,040

1,044

1,250

1,250

‐

+205

5.5%

5.5%

‐

5.3%

5.3%

‐

5.7%

5.7%

‐

S-12

Kinugawa Kanko Hotel

3,870

3,812

4,620

4,620

‐

+807

5.2%

5.2%

‐

5.0%

5.0%

‐

5.4%

5.4%

‐

S-13

Ooedo-Onsen Monogatari
Kinosaki

2,084

2,159

2,490

2,490

‐

+330

5.4%

5.4%

‐

5.2%

5.2%

‐

5.6%

5.6%

‐

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

1,230

1,272

1,480

1,480

‐

+207

5.9%

5.9%

‐

5.7%

5.7%

‐

6.1%

6.1%

‐

36,70536,63339,96240,082+120+3,448

－

－

－

－

－

－

Total

－

－

－

Ooedo Onsen Reit Investment Corporation 30

Introduction of Properties (1)S-1

Ooedo-Onsen Monogatari
Reoma Resort

S-2

S-3

Ito Hotel New Okabe

Location:

Marugame City,
Kagawa Prefecture

Location:

Shima City,
Mie Prefecture

Location:

Ito City,
Shizuoka Prefecture

Site area:

665,403㎡
63,896㎡

Site area:

9,637㎡
9,782㎡

Site area:

2,945㎡
10,211㎡

Total floor area:

Total floor area:

Area characteristics

Area characteristics (Note)

Ooedo-Onsen MonogatariIse-shima

Marugame City, where this facility is located, is in the Seisanarea (West Sanuki). Many tourist spots are within easy
access, including Marugame Castle, Kotohira-gu Shrine andthe Seto-ohashi Bridge, etc., meaning local sightseeing andleisure can be enjoyed together with the facility.



Shima City is a large sightseeing spot in the Ise-Shima area.
It includes Ise-jingu Shrine and a rias-style coastline.
Ago-wan bay, where this facility is located, features many
resort hotels and onsen ryokans that back onto themountains and face the coast where the waves lap gently.

Total floor area:

Area characteristics
 Ito City, which is designated a City of International Tourism and

Hot Springs Culture, bustles with the Izu Kogen Sakura Festival
and the Anjinsai Festival. The Umi no Hanabi Taikai fireworks
display on the last day of the Anjinsai Festival attracts crowds ofaround 170,000 people.
 Ito-Onsen, where this facility located is one of Japan’s leading

hot springs from the Heian Period.

Ooedo Onsen Reit Investment Corporation 31

Introduction of Properties (1)S-1：Ooedo-Onsen Monogatari Reoma Resort 〈Hotel Reoma-no-mori〉
2017

2018

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

95.3%

77.2%

91.8%

97.6%

84.9%

84.0%

72.0%

76.6%

99.2%

77.2%

88.8%

98.4%

86.9%

86.6%

85.4%

-1.2%

ADR (yen)

31,56930,75825,90031,17828,92828,69524,32031,35647,64827,31925,937

26,73930,36529,836

31,166+1,330

RevPAR (yen)30,08523,74523,77630,42924,55924,103

17,51024,01847,26621,09023,032

26,311

26,387

25,837

26,615

+778

299

244

223

307

244

254

185

232

461

204

236

271

3,164

1,543

1,591

+47

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-2：Ooedo-Onsen Monogatari Ise-shima
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

97.3%

93.4%

97.1%

99.0%

94.7%

90.6%

88.3%

93.2%

95.5%

92.0%

95.1%

98.5%

94.6%

94.8%

93.8%

-1.0%

ADR (yen)

34,37633,13931,04038,54332,04532,406

29,71432,62248,00532,20031,24032,49434,08934,21734,500+283

RevPAR (yen)33,44730,95130,13938,15730,34629,35926,23730,40345,844

29,62429,70932,00632,24832,43732,361

-76

103

94

84

114

93

91

79

92

136

92

94

98

1,176

594

594

+0

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-3：Ito Hotel New Okabe
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

84.6%

67.8%

86.0%

99.2%

83.1%

67.1%

75.1%

84.0%

97.3%

85.1%

89.4%

98.2%

84.7%

84.5%

88.2%

+3.7%

ADR (yen)

31,53332,36929,20030,941

28,09630,374

26,052

29,32042,01426,85027,06827,68430,27830,37930,160-219

RevPAR (yen)26,676

21,94625,112

30,693

23,347

20,38019,565

24,62840,87922,84924,19827,18525,64525,67026,601

+931

109

88

89

123

92

81

79

97

155

89

98

110

1,217

609

631

+22

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 32

Introduction of Properties (2)S-4

Ooedo-Onsen Monogatari
Atami

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

S-6

Ooedo-Onsen Monogatari
Awara

Location:

Atami City,
Shizuoka Prefecture

Location:

Izu City,
Shizuoka Prefecture

Location:

Awara City,
Fukui Prefecture

Site area:

2,053㎡
8,469㎡

Site area:

2,800㎡
6,125㎡

Site area:

13,263㎡
14,132㎡

Total floor area:

Total floor area:

Area characteristics

Area characteristics


Atami City, at the base of the Izu Peninsula, has been
designated a City of International Tourism and Hot Springs
Culture with its many tourist attractions, including Sun Beach(famous for the Atami Kaijo fireworks display) and “Omiya
no Matsu” pine tree, etc. In recent years, it has been in thelimelight again as an onsen resort that is "low-cost, near, forshort stay” destination from the Tokyo metropolitan area.
Atami-onsen, where this facility is located is one of Japan’s
leading hot spring sightseeing areas.

Total floor area:

Izu City is the Izu Peninsula’s largest city located in the westof the central part of the peninsula. Facing Suruga Bay to thewest and surrounded by the Mount Amagi range to the south,
it is rich in natural, historical, and onsen tourist attractions.



Toi-onsen, where this facility is located is the oldest hot springin west Izu area. It is s famous for “Toi gold mine” from Edo
period collecting many sight seeing visitors.

Area characteristicsAwara City is a scenic area facing the Japan Sea, surroundedby abundant nature. The Mikuni fishing port, which is wellknown for Echizen crab ,Tojinbo, a tourist attraction that isfamous nationwide, and Eihei-ji Temple are close by, and thetourist industry centered on Awara Onsen is flourishing.

Awara onsen, where this facility is located is called an innerparlor of Kansai region together with Kaga onsen resort area
composed of adjacent Yamashiro, Yamanaka, Katayamazu
onsen, etc. .

Ooedo Onsen Reit Investment Corporation 33

Introduction of Properties (2)S-4：Ooedo-Onsen Monogatari Atami
2018

2017

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

91.4%

95.4%

99.0%

99.8%

98.1%

97.4%

97.0%

96.1%

97.9%

97.2%

96.3%

99.2%

97.0%

96.3%

97.3%

+1.0%

ADR (yen)

34,052

31,126

31,061

34,134

31,82031,23528,551

31,41047,69430,541

29,88130,83332,73933,59533,224-371

RevPAR (yen)31,12329,69430,75034,06531,21530,422

27,69430,185

46,692

29,68528,77530,58631,75632,35132,326

-25

84

82

76

95

84

85

75

84

126

80

79

82

1,037

527

528

+1

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-5：Ooedo-Onsen Monogatari Toi Marine Hotel
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

78.6%

80.2%

92.9%

99.0%

84.3%

74.5%

67.9%

87.3%

97.4%

79.9%

78.0%

93.2%

84.4%

83.4%

84.0%

+0.6%

ADR (yen)

28,792

27,777

26,162

28,771

26,212

27,947

24,16031,30547,71825,68625,01324,65729,06630,11130,506+395

RevPAR (yen)22,63022,27724,30428,48322,096

20,82016,40427,32946,477

20,523

19,51022,98024,531

25,112

25,625

+513

50

49

49

64

48

46

36

60

100

44

44

51

648

332

337

+5

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-6：Ooedo-Onsen Monogatari Awara
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

83.9%

55.9%

60.0%

89.0%

82.7%

80.9%

82.7%

86.2%

99.5%

82.4%

87.9%

98.5%

82.6%

88.4%

89.6%

+1.2%

ADR (yen)

30,65333,536

26,451

29,50428,091

28,44025,87630,36940,382

27,276

27,831

27,81329,851

29,60330,224+621

RevPAR (yen)25,717

18,746

15,87026,25823,231

23,007

21,39926,17840,18022,47524,46327,39524,656

26,16927,080

+911

96

71

55

100

86

87

80

96

145

82

91

101

1,098

582

599

+16

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 34

Introduction of Properties (3)S-7

Ooedo-Onsen Monogatari
Kamoshika-so

S-8

Ooedo-Onsen Monogatari
Ikaho

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

Location:

Nasushiobara City,
Tochigi Prefecture

Location:

Shibukawa City,
Gunma Prefecture

Location:

Kimitsu City,
Chiba Prefecture

Site area:

7,734㎡
5,947㎡

Site area:

6,805㎡
5,177㎡

Site area:

57,069㎡
8,660㎡

Total floor area:

Total floor area:

Area characteristics

Area characteristics


Since ancient times, many onsen villages have taken shapein the mountains and valleys around Nasushiobara City,
including the Shiobara Hot Springs Area, Itamuro Onsen, etc.
Hunter Mountain Shiobara, where meadows, skiing andautumnal leaves can be enjoyed, is nearby.



Shiobara onsen resort area, where this facility is located ispopular with its six different hot springs dating back 1,200
years ago.

Total floor area:Shibukawa City is a regional city located in the center ofGunma Prefecture and it has long prospered as atransportation hub. Nature and onsen tourism is also a majorindustry.

Ikaho onsen, where this facility is located is one of therepresenting hot springs of Kita-Kanto region as an innerparlor of Tokyo and is famous for “muddy gold spring” andtransparent “white silver spring”.

Area characteristics


Kimitsu City is located in the middle of Chiba Prefecture, andwith significantly improvements in access by car from Chiba,
Tokyo and Yokohama in the past few years due to thecompletion of the Tateyama Expressway and the Tokyo Bay
Aqualine, an influx of visitors is expected.

Inland Boso peninsula, where this facility is located is
expected good demand of tourism with popular sight seeing
spots in surrounding areas.

Ooedo Onsen Reit Investment Corporation 35

Introduction of Properties (3)S-7：Ooedo-Onsen Monogatari Kamoshika-so
2017

2018

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

74.2%

61.1%

65.7%

86.3%

80.8%

88.0%

85.8%

93.8%

99.2%

81.8%

94.0%

97.9%

84.2%

93.4%

92.2%

-1.2%

ADR (yen)

28,17031,60728,05827,21925,151

27,287

24,11825,47836,262

24,846

27,81527,78527,856

27,56427,951+387

RevPAR (yen)20,902

19,311

18,43423,48920,32224,012

20,69323,89835,971

20,324

26,14627,201

23,45425,74425,770

+26

46

42

38

51

43

52

44

53

77

42

57

59

609

333

335

+1

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-8：Ooedo-Onsen Monogatari Ikaho
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

94.5%

81.7%

86.7%

97.7%

98.4%

95.6%

97.8%

91.1%

99.6%

97.9%

98.1%

99.8%

94.9%

98.3%

97.4%

-0.9%

ADR (yen)

31,10229,54825,73829,52429,42329,57526,85828,742

40,67827,86829,95831,47030,16030,63731,022+385

RevPAR (yen)29,391

24,14022,314

28,84428,952

28,27326,267

26,18340,51527,282

29,38831,40728,621

30,11630,215

+99

41

33

28

40

39

40

36

37

57

37

42

45

481

253

256

+2

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-9：Ooedo-Onsen Monogatari Kimitsu-no-mori
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

96.1%

88.4%

94.6%

98.9%

95.5%

95.7%

90.9%

88.4%

98.9%

92.8%

97.1%

98.2%

94.6%

96.3%

94.4%

-1.9%

ADR (yen)

27,222

26,98125,60926,444

26,692

26,404

23,621

26,08334,92326,50423,48625,261

26,654

26,312

26,738+426

RevPAR (yen)26,16023,851

24,22626,15325,49025,26821,471

23,05734,53824,59522,80424,80625,21425,33825,240

-98

48

46

40

48

46

48

38

43

63

44

43

45

558

283

278

-4

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 36

Introduction of Properties (4)S-11

Location:

Nagasaki City,
Nagasaki Prefecture

Location:

Osaki City,
Miyagi Prefecture

Location:

Nikko City,
Tochigi Prefecture

Site area:

5,092㎡
11,114㎡

Site area:

11,829㎡
10,843㎡

Site area:

6,701㎡
22,402㎡

Total floor area:

Area characteristics

Area characteristics



Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

Total floor area:

Ooedo-Onsen Monogatari
Kounkaku

S-10

Nagasaki City is a tourist city with abundant tourism resources
such as having been registered in the World Heritage List as“Sites of Japan’s Meiji Industrial Revolution: Iron and Steel,
Shipbuilding and Coal Mining” in 2015.

The Inasayama where the facility stands is famous for nightviews and has been certified by General incorporated association
YAKEI Convention & Visitors Bureau as one of the three new
greatest night view spots along with Monaco and Hong Kong.



Narukoonsenkyo where the facility is located has nearly 400
spring sources, with 9 types of spring water out of only 11
found in Japan. It is a hot spring site boasting ample volume
of water.
Temporary bus services (“Momiji-go”) are operated during
every autumn color season from Naruko Onsen Station to
Nakayamadaira-Onsen Station via Naruko Valley.

S-12

Total floor area:

Area characteristics
 Nikko City is located northwest of Tochigi Prefecture and is a hot

spring tourist destination with tourism resources including
domestically and internationally well-known Nikko Toshogu
Shrine and Lake Chuzenji.
 Kinugawa

Onsen where the facility is located is a hot spring
resort around Tokyo which was rapidly developed during andafter the period of high economic growth.

Ooedo Onsen Reit Investment Corporation 37

Introduction of Properties (4)S-10：Ooedo-Onsen Monogatari Nagasaki Hotel Seifu
2017

2018

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

93.6%

83.5%

95.3%

99.3%

91.8%

99.8%

87.0%

81.0%

100.0%

91.8%

96.5%

98.9%

93.2%

99.7%

92.5%

-7.2%

ADR (yen)

32,172

29,74329,93933,62532,97636,94732,33031,52437,64931,49936,05733,82133,337

31,67733,969+2,292

RevPAR (yen)30,112

24,83528,531

33,38930,27136,87328,12725,53437,64928,916

34,79533,44831,07031,581

31,421

-160

105

88

90

117

104

127

97

91

131

98

119

115

1,289

663

654

-9

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-11：Ooedo-Onsen Monogatari Kounkaku
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

82.8%

64.9%

71.2%

89.5%

76.6%

72.2%

78.2%

74.5%

89.9%

83.8%

92.3%

91.9%

81.1%

91.3%

85.4%

-5.9%

ADR (yen)

29,94628,35827,49826,30424,03725,482

23,952

22,863

26,253

21,54424,566

26,26325,512

26,06524,393-1,672

RevPAR (yen)24,795

18,404

19,57823,542

18,412

18,39818,73017,032

23,601

18,053

22,674

24,135

20,69023,797

20,831-2,966

93

66

65

88

68

70

72

68

95

68

100

105

964

516

511

-4

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-12：Kinugawa Kanko Hotel
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

81.2%

83.9%

92.3%

99.4%

91.6%

84.5%

83.2%

77.5%

97.7%

88.6%

95.0%

95.7%

89.2%

94.0%

89.6%

-4.4%

ADR (yen)

31,95330,921

25,71528,63928,38731,183

28,681

30,232

38,522

29,02632,401

32,77130,806

31,05032,166+1,116

RevPAR (yen)25,94525,942

23,73428,46726,002

26,34923,862

23,42937,63525,71730,78031,361

27,47829,187

28,820

-367

191

188

159

195

171

178

174

163

240

171

222

221

2,277

1,212

1,192

-20

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 38

Introduction of Properties (5)S-13 Ooedo-Onsen Monogatari

S-14

KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel

Location:

Toyooka City,
Hyogo Prefecture

Location:

Aizuwakamatsu City,
Fukushima Prefecture

Site area:

11,350㎡
10,602㎡

Site area:

12,451㎡ (Note)
16,665㎡ (Note)

Total floor area:

Total floor area:

Area characteristics

Area characteristics
Kinosaki Onsen represented by stone bridges over a small riverand streets lined with willow trees is one of Japan’s most
famous onsen resorts, where guests can enjoy seven public hot
springs.

The facility is located a little more than 10 minutes on foot from
JR Kinosaki Onsen Station and bus services (public hot spring
tour bus) to the hot spring quarter are available after 5 p.m.



Aizuwakamatsu City is located in the west of Fukushima
Prefecture with scenic natural landscape surrounded by Mt.
Bandai, Lake Inawashiro and such.

Tour bus services going around major tourist spots such as
Higashiyama Onsen and Tsurugajo Castle are operated fromthe JR Aizuwakamatsu Station.
(Note) The areas include leasing sections.

Ooedo Onsen Reit Investment Corporation 39

Introduction of Properties (5)S-13：Kinugawa Kanko Hotel
2018

2017

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

88.4%

73.0%

86.5%

99.7%

87.7%

83.4%

83.0%

81.6%

99.7%

91.2%

92.7%

98.7%

88.8%

90.3%

91.2%

+0.9%

ADR (yen)

32,88633,87230,74834,93230,42329,31525,99528,842

41,47927,55327,19930,21731,282

29,90130,509+608

RevPAR (yen)29,071

24,726

26,597

34,827

26,68024,44821,57523,53541,35425,12825,21329,824

27,77827,00027,824

+824

113

97

93

133

101

96

82

90

156

94

100

113

1,273

622

638

+15

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-14：Ooedo-Onsen Monogatari Kinosaki
2017

2018

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

67.8%

58.6%

63.5%

80.5%

80.2%

70.6%

84.4%

77.1%

95.6%

86.0%

91.8%

98.3%

79.6%

87.8%

88.9%

+1.1%

ADR (yen)

30,95529,67927,74627,547

26,88829,385

27,696

26,38932,47927,54928,60427,25628,51827,24828,432+1,184

RevPAR (yen)20,987

17,391

17,61822,175

21,564

20,74523,375

20,34531,04923,692

26,25826,792

22,70023,92325,276+1,353

110

85

75

101

99

93

105

93

135

106

124

126

1,258

659

691

+32

Cumulativ e
total

Previous
corresponding
periodcumulative total

5th period
cumulativ e
Total

ChangeSales (million yen)

S-1：Ooedo-Onsen Monogatari Reoma Resort 〈New Reoma Resort〉
2018

2017
Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Number of guests

61,19737,09625,141

45,983

48,411

66,476

34,62552,169130,391

35,30541,19051,160629,144326,508

Sales (million yen)

223

149

97

195

198

257

120

208

577

140

144

173

2,486

1,359

344,840 +18,332
1,364

+5

Ooedo Onsen Reit Investment Corporation 40

Financial Indices
Indices

4th period(May 31, 2018)

5th period(Nov. 30, 2018)

Ordinary income

571 mn yen

578 mn yen

Net income

570 mn yen

577 mn yen

Depreciation

415 mn yen

422 mn yen

CAPEX

141 mn yen

206 mn yen

Total assets

39,875 mn yen

39,106 mn yen

Total net assets
BPS (Total net assets/unit)

21,220 mn yen

21,224 mn yen

90,166 yen

90,185 yen

Unit price (End of each period)

86,300 yen

84,200 yen

235,347 units

235,347 units

573 mn yen

580 mn yen

2,435 yen

2,466 yen

Total units outstanding
Total distribution
DPU
Distribution yield
FFO
FFO per unit
FFO multiple

5.7%
984 mn yen
4,185 yenCalculation formula

5.8% DPU (annualized)/Unit price as of end of period
999 mn yen Net income + Depreciation－profit or loss on sale of real estate
4,247 yen

10.3x

9.9x Unit price as of end of period/FFO per unit (annualized)

PER

17.8x

17.2x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PBR

1.0x

0.9x Unit price as of end of period/Net assets per unit

ROA

1.7%

1.5% Ordinary income/Average of total assets during the period

3.3%

2.9%

3.1%

2.7% Net income/Average of total net assets during the period

6.1%

5.4%

Annualized
ROE
Annualized
NAV

24,332 mn yen

NAV per unit
NAV multiple

103,391 yen

Interest-bearing debt

16,807 mn yen

0.8x

24,673 mn yen Total net assets + Total appraisal value - Total book value - Total liabilities
104,836 yen
0.8x Unit price as of end of period/NAV per unit
15,991 mn yen

LTV (book value basis)

42.2%

40.9% Interest-bearing debt/Total assets

LTV (appraisal value basis)

39.1%

37.6% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)

Operating days

182 days

183 days

Ooedo Onsen Reit Investment Corporation 41

Balance Sheet(thousand yen)(thousand yen)
5th period

4th period(period ended May 31, 2018) (period ended Nov. 30, 2018)

Assets

4th period

5th period(period ended May 31, 2018)(period ended Nov. 30, 2018)

73,130Liabilities

Current assets

Current liabilities

Cash and deposits

2,169,076

2,220,373

Operating accounts payable

55,254

Prepaid expenses

148,184

127,758

Short-term loans payable

580,000-

Consumption taxes receivable

547,941-

7,499,250

7,380,750

Other
Total current assets

4,777

6,332

2,869,980

2,354,464

Non-current assets

Accounts payable - other145,330

90,481

Accrued expenses

12,056

10,546

Income taxes payable

Property, plant and equipment
Buildings

Current portion of long-term loans payable

Accured consumption taxes
25,777,902

25,982,750

Advances received

Accumulated depreciation-1,077,075-1,498,792

Other

Buildings, net

24,700,827

24,483,958

Total current liabilities

1,259

1,259

-95

-138

1,163

1,120

600

600

Asset retirement obligations

-8

-26

Total non-current liabilities

Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures

591

573

1,005

2,620

Accumulated depreciation

-49

-268

Tools, furniture and fixtures, net

956

2,352

11,988,130

11,988,130

36,691,669

36,476,134

Land
Total property, plant and equipment

Leasehold right

157,802

5,359

4,556

163,161

162,358

16

17

Long-term prepaid expenses

141,063

103,787

Lease and guarantee deposits

10,08910,089Total intangible assets
Investments and other assets
Deferred tax assets

Total investments and other assets
Total non-current assets
Total assets

151,170

113,895
36,752,388

39,875,981

39,106,853

261,678

258,696
6,438
7,903,329

Long-term loans payable

8,728,500

8,610,500

Tenant leasehold and security deposits

1,230,724

1,230,724

Non-current liabilities

Total liabilities

136,955

137,354

10,096,180

9,978,579

18,655,586

17,881,908

20,653,023

20,653,023-2,995-5,819-2,995-5,81920,650,027

20,647,203

570,366

577,741

Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Allowance for temporary difference

Unitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus

37,006,001

82,3138,559,406

capital157,802

Software

972

4,882

Total deduction from unitholders'Intangible assets

954

Total unitholders' equity
Total net assets
Total liabilities and net assets

570,366

577,741

21,220,394

21,224,944

21,220,394

21,224,944

39,875,981

39,106,853

Ooedo Onsen Reit Investment Corporation 42

Statement of Income(thousand yen)

Operating revenue
Lease business revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors' compensations
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Investment unit issuance expenses
Borrowing related expenses
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings(undisposed loss)

4th period

5th period(from December 1, 2017
to May 31, 2018)(from June 1, 2018
to November 30, 2018)

1,442,676
1,442,676

1,450,211
1,450,211

522,992
125,606
1,715
14,9333,600
39,522
708,370
734,305

541,878
129,310
1,778
16,9173,600
42,209735,695
714,516

9
9

10
871
882

64,81822,45673,3142,500
163,090571,225571,225955-3
951
570,27393

64,35372,451
136,805
578,593
578,593973-0
972
577,620120

570,366

577,741

Ooedo Onsen Reit Investment Corporation 43

Debt Status
List of lenders(as of November 30, 2018)

Long term

LenderBalance(mn yen)Interest rate(%)

Drawdown date

Repayment date

Security

Sumitomo Mitsui Banking Corporation
ORIX Bank Corporation
Sumitomo Mitsui Trust Bank, Limited
The Mie Bank, Ltd.
The Iyo Bank, Ltd.
The Bank of Fukuoka, Ltd.
The Nomura Trust and Banking Co., Ltd.
The Shinwa Bank, Ltd.

6,744

Base rate (JBA 3 months Yen TIBOR) ＋0.65%

September 1, 2016

May 31, 2019

Unsecured andunguaranteed

Sumitomo Mitsui Banking Corporation
ORIX Bank Corporation
Sumitomo Mitsui Trust Bank, Limited
The Mie Bank, Ltd.

3,681

Base rate (JBA 3 months Yen TIBOR) ＋0.80%

September 1, 2016

May 29, 2020

Unsecured andunguaranteed

Sumitomo Mitsui Banking Corporation

475

Base rate (JBA 3 months Yen TIBOR) ＋1.25%

September 1, 2016

May 31, 2023

Unsecured andunguaranteed

Sumitomo Mitsui Banking Corporation
The Toho Bank, Ltd.
The Nomura Trust and Banking Co., Ltd.
The Bank of Fukuoka, Ltd.
The Shinwa Bank, Ltd.

2,267

Base rate (JBA 3-month yen TIBOR)＋0.65％

December 4, 2017

November 30, 2020

Unsecured andunguaranteed

The Mie Bank, Ltd.
The Tochigi Bank, Ltd.
The First Bank of Toyama, Ltd.
Fukoku Mutual Life Insurance Company
The Bank of Kochi, Ltd.
The Bank of Fukuoka, Ltd.
The Shinwa Bank, Ltd.

2,422

Base rate (JBA 3-month yen TIBOR)＋0.80％

December 4, 2017

November 30, 2021

Unsecured andunguaranteed

Sumitomo Mitsui Banking Corporation

400

Base rate (JBA 1-month yen TIBOR)＋0.35％

May 31, 2018

May 31, 2019

Unsecured andunguaranteed

Total

15,991

Ooedo Onsen Reit Investment Corporation 44

Ooedo-Onsen Monogatari Group (1)“At any time, lightheartedly, repeatedly, onsen with a festive atmosphere and filled with smiles,” is the catchphrase Ooedo-Onsen MonogatariGroup uses in its business operations. The group aims to revitalize the onsen ryokan industry by continuously acquiring onsen and spa-related
facilities throughout the country and rolling out the Ooedo business model to provide customers with high-quality services at an affordable price,and to help them enjoy the sense of openness and festivity of onsen.

Overview
Company Name

Ooedo-Onsen Monogatari Hotels & Resorts Co., Ltd.

Capital

100 million yen (as of Sep. 1, 2018)

Address

1-9-4 Nihonbashi-honcho, Chuo-ku, Tokyo

Establishment

December 5, 2017 (founded in Nov. 2001)

No. of Employees

1,213 (consolidated, as of end of Feb. 2018)

Representative

Representative Director Mitsumasa Morita Reinvigorating onsen ryokan, hotels, spa-related facilities, theme parks around the country

Businesses

2003

2007

2009

Opened Aizu,
Ikaho and Nikko
Kirifuri, etc.

Opened Urayasu
Mangekyo andYamashitaya

OdaibaOoedo-Onsen
Monogatari

Ooedo-Onsen
Monogatari
Aizu

Ooedo-Onsen
Monogatari
Urayasu Mangekyo

 We started with the onsen theme park, “Ooedo-Onsen Monogatari,“ which has an Edo culture

theme. As of Feb. 28, 2018, we operate 32 onsen and spa-related facilities(Note) In consideration of the restructuring program that the Ooedo-Onsen Monogatari Group has been implementing since2017, the figures for the fiscal year ended February 28, 2018 are presented based on those in the consolidated
financial statements covering the period from June 29, 2017, the day when the Ooedo-Onsen Monogatari Group Co.,
Ltd. was established (through an absorption-type merger by Ooedo Onsen Monogatari Hotels & Resorts), until
February 28, 2018, the year-end closing date.

Trends in number of facilities
Opened OoedoOnsen Monogatariin Odaiba, Tokyo

Consolidated Net Sales: 18,884 million yen
Consolidated Total Assets: 54,283 million yen
Net Assets: 10,319 million yen

Financial Results(Feb. 2018)

2010

2016

2017

2018

2019

Opened Kounkaku, Masuya
and Nagasaki Hotel Seifu

Opened Hotel Suiyotei, Beppu
and Gero Shin-kan

Opened Nanki-kushimotoand Hotel Kisoji

Scheduled to open
in the spring of 2019

Ooedo-Onsen
Monogatari Masuya

Ooedo-Onsen
Monogatari
Gero Shin-kan

Ooedo-Onsen
Monogatari
Hotel Kisoji(formerly)
Thalassa Shima
Hotel & Resort

2013

Opened Hotel New Shiobara, Opened Minoh Kanko Hotel,
Kinugawa Kanko Hotel and
Minoh Onsen Minoh Spa Garden
Reoma Resort, etc.
and Toi Marine Hotel

Hotel New

Ooedo-Onsen
Monogatari
Minoh Kanko Hotel

Shiobara

Minoh Onsen
Minoh Spa Garden

40
30
20
10

6

9

12

18

20

24

25

27

End ofSep. 2012

End ofSep. 2013

End ofFeb. 201427

27

End ofFeb. 2015

End of Feb.
2016

30

32

0
End ofSep. 2007

End ofSep. 2008

End ofSep. 2009

End ofSep. 2010

End ofSep. 2011

End ofFeb. 2017

End ofFeb. 2018

Ooedo Onsen Reit Investment Corporation 45

Ooedo-Onsen Monogatari Group (2)The total number of guests staying at onsen/spa facilities operated by the Ooedo-Onsen Monogatari Group is steadily increasing year by year.
In addition, the Investment corporation is expanding its business scale actively through a range of initiatives such as the acquisition of ninefacilities (Note) since 2016 when the investment corporation was established.

Onsen and spa-related facilities operated
by the Ooedo-Onsen Monogatari Group

Trend in total number of hotel guests at
Ooedo-Onsen Monogatari Group facilities(thousands)
3,500

2,500

2,456

2,565

2,709

Facilities acquired after 2016

REIT acquired assets

3,126
2,766

Ooedo-Onsen Monogatari

Kakeyu Fujikan Sakurakan

Ooedo-Onsen Monogatari

Kounkaku
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Hotel Kisoji
1,500
FY2014FY2015FY2016FY2017FY2018

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Awara

Higashiyama Grand Hotel

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari
Yamashiro Onsen

Nikko Kirifuri

Yamashitaya
Ooedo-Onsen Monogatari

Gero Shin-kan

Nagasaki Hotel Seifu

Beppu(Spa-related facilities for day visits)

Hotel New Shiobara
Hotel Kinugawa Gyoen
Ooedo-Onsen Monogatari

Kamoshika-so
Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari

Ikaho
Hotel Shinko(Onsen theme park)
Tokyo Odaiba

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Minoh Onsen Minoh Spa Garden(Onsen theme park)／
Ooedo-Onsen Monogatari

Minoh Kanko Hotel
Ooedo-Onsen Monogatari

Nanki-kushimoto(Note) Includes facilities that are expected to be operated.

Ooedo-Onsen MonogatariIse-shima

Reoma Resort
Tenka-taihei-no-yu
Sumpu Yume Hiroba(Onsen theme park )(formerly) Thalassa
Shima Hotel & Resorts

Ooedo-Onsen Monogatari

Urayasu Mangekyo

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Sendai Korona-no-yu

Aizu

Nagayama

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

KinosakiHotel Sohkan

Masuya(Onsen theme park)

Kimitsu-no-moriOoedo-Onsen Monogatari

Hotel Suiyotei
Ooedo-Onsen Monogatari Atami

Ito Hotel New Okabe
Ooedo-Onsen Monogatari

Toi Marine Hotel

Ooedo Onsen Reit Investment Corporation 46

“Ooedo Business Model” with Stable Operations and Sustainable Growth (1)Ooedo business model achieving both high quality and reasonable price
Provision of services that lead tothe creation of repeat customers
Services created from a customer perspectiveWell-thought-out onsen facilities and merchandising facilities
Buffet-style restaurants that offer more than 100 different
dishes in total every morning and evening
 Continuous efforts to attract more guests with in-facility
entertainment (including popular theater shows, etc.)Application of a unique corporate-owned
chain operation (Ooedo business model)

Efficient operation

Highquality
service＋Adoption of a centralized purchasing system for foodstuffs,
fixings and amenities Detailed programs for cost management
 Efficient placement of staff members

Ongoing support froma wide-ranging customer
base centered on
the senior age group

Affordable
price

Marketing programs to maximize
customer reachMeasures to attract more customers led by the headquartersof the Ooedo-Onsen Monogatari Group Efforts to attract more customers by utilizing in-house facilities
such as reservation centers
Ooedo Onsen Reit Investment Corporation 47

“Ooedo Business Model” with Stable Operations and Sustainable Growth (2)High customer satisfaction and high room occupancy rates surpassing all other business categories

Ooedo-Onsen Monogatari Group hotel guest questionnaire(conducted from June 1, 2018 to November 30, 2018)＜Meal (breakfast and dinner)＞＜Overall satisfaction ＞

Trends in average monthly occupancy rates foreach type of accommodation facility
100%
91.9%

90%
81.9%

80%
79.2%

70%

64.9%

60%
61.4%

50%
43.0%

＜Type of services inside the facility＞＜Onsen＞

40%
30%
20%

2016/92017/1

2017/5

Ooedo Onsen REIT
Business hotels
Ryokans

Very satisfied

SatisfiedUnsatisfied

Very unsatisfied

Fair

2017/92018/1

2018/5

2018/9City hotels
Resort hotels
Total

Source: Data on city hotels, business hotels, resort hotels, ryokan and all types ofaccommodation are compiled by the asset manager based on a statisticalsurvey on trips with accommodation conducted by the Ministry of Land,
Infrastructure, Transport and Tourism.

Ooedo Onsen Reit Investment Corporation 48

Unitholders Breakdown
Top 10 unitholders

Ratio by number of unitholders＜End of 4th fiscal period＞＜End of 5th fiscal period＞

18,263 unitholders

19,341 unitholders

Financial
institutions

Foreigncorporations
and individuals

Financial
institutions

Foreigncorporations
and individuals

Rank

Name

Number ofunits held

Ratio

1

The Master Trust Bank of Japan, Ltd. (Trust Account)

26,199

11.1%

2

Japan Trustee Services Bank, Ltd. (Trust Account)

24,266

10.3%

3

Ooedo-Onsen Mongatari Co., Ltd.

9,246

3.9%

4

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

7,423

3.2%

5

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

4,518

1.9%

6

DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO

1,376

0.6%

7

SSBTC CLIENT OMNIBUS ACCOUNT

1,250

0.5%

8

AVIVA INVESTORS INVESTMENT FUNDS ICVC - AVIVAINVESTORS MULTI-STRATEGY TARGET RETURN FUND

1,127

0.5%

9

STATE STREET BANK AND TRUST COMPANY FOR STATESTREET BANK LUXEMBOURG SCA ON BEHALF OF ITS
CLIENTS: CLIENT OMNI OM25

1,102

0.5%

10

Hida Shinkumi Bank

1,000

0.4%

77,507

32.9%

Raito by number of investment units

Total
Individuals
Financial institutions(Incl. securities companies)

Other domestic corporations
Foreign corporations and individuals

Ooedo Onsen Reit Investment Corporation 49

Unitholder Benefit Program
Provide unitholders opportunity to experience facilities held by the Investment Corporation and to deepen
unitholders’ understanding of those facilities.
Commencement
period and target
unitholders

Targets unitholders listed or recorded on Unitholders’ Registry
as of November 30, 2018 (record date), end of 5th fiscal period.

Eligible persons

The program is also available for those other than unitholders
with coupons transferred from unit holders (not registered)
Coupons offering discounts of 1,000 yen per coupon from the accommodation fee
for applicable facilities on weekdays (excluding specified dates) will be sent

Benefits① Unitholders holding 5 units or more and less than 10 units② Unitholders holding 10 units or more

1 coupon
Equivalent to 1,000 yen
2 coupons Equivalent to 2,000 yen

Coupons can be used together with other discount coupons, etc. provided by Ooedo-Onsen Monogatari Group
Onsen and spa-related facilities that are owned by the Investment Corporation in each fiscal period
and leased by Ooedo-Onsen Monogatari Group
Applicablefacilities

Schedule ofsending andperiod of validity<Facilities applicable>
Ooedo-Onsen Monogatari Reoma Resort, Ooedo-Onsen Monogatari Ise-shima, Ito Hotel New Okabe,
Ooedo-Onsen Monogatari Atami, Ooedo-Onsen Monogatari Toi Marine Hotel, Ooedo-Onsen Monogatari Awara,
Ooedo-Onsen Monogatari Kamoshika-so, Ooedo-Onsen Monogatari Ikaho, Ooedo-Onsen Monogatari Kimitsu-no-mori,Ooedo-Onsen Monogatari Nagasaki Hotel Seifu, Ooedo-Onsen Monogatari Kounkaku, Kinugawa Kanko Hotel,
Ooedo-Onsen Monogatari Kinosaki and Ooedo-Onsen Monogatari Higashiyama Grand Hotel <14 facilities in total>
Coupons will be sent each year in mid-February for fiscal periods
ended in November and in mid-August for fiscal periods ended in May① When coupons are sent in mid-February: Valid for 1 year from March 1st to the last day of the following February② When coupons are sent in mid-August: Valid for 1 year from September 1st to the last day of the following August

Ooedo Onsen Reit Investment Corporation 50

Profile for IR Activities

IR activities＜Main IR activities＞
IR activities for domestic institutional investors
・Conducting IR activities for central/regional investors
・Holding individual meetings, etc.
IR activities for overseas institutional investors
・Participating in global conferences in Japan
・Holding individual meeting in Japan, etc.
IR activities for retail investors
・Holding seminars for private investors
・Participating in fairs for retail investors, etc.

Renewal of the “To our personal unitholders” pages(in Japanese only) on our website.
The pages that we had created for individual unitholders were renewedon November 30, 2018.
To deepen the understanding of individual unitholders, the “anatomy of
Ooedo Onsen Reit” (in Japanese only) is posted on our website, in which
an outline of Investment Corporation is presented in four sections, namely,“Business with a focus on onsen and spa-related facilities,” “Uniqueinvestment targets,” “Characteristics from the perspective of investment
targets,” and “Interviews with executives.”<Top page><Section 2>

Seminars for individual investors

・Branch office seminars sponsored by securities companies(Tsu, Yokohama, Nagoya)・Nationwide caravan to popularize J-REIT (Kurashiki)・Other locally-held seminars (Osaka, Kumamoto)Fairs for individual investors

・REIT Corner in the NIKKEI IR/Investment Fair 2018
(September 2018)
・J-REIT Fair 2018 for Personal Investors (September 2018)
・SMBC Nikko J-REIT Fair 2018 (October 2018)
・J-REIT Fan Autumn 2018 (November 2018)

Ooedo Onsen Reit Investment Corporation 51

Track Record of Investment Unit Price
Change in investment unit price and trading volume(yen)(units)August2016

November
2016

February
2017

May
2017

August2017
VolumeNovember2017
Stock priceFebruary
2018

May
2018

August2018

November
2018

February
2018

May
2018

August2018

November
2018

Relative comparison of investment unit price and TSE REIT index(yen)August2016

November
2016

February
2017

May
2017

August2017
Stock priceNovember
2017
TSE REIT Index(Note) TSE REIT Index is indexed based on the listed date (August 31, 2016) and indicates relative performance with investment unit price.

Ooedo Onsen Reit Investment Corporation 52

Governance Structure
Introduction of performance-linked element in asset management fee structure
Remuneration paid by the Investment Corporation to the asset manager consists of management fee I, management fee II, acquisition fee, anddisposition fee.
Management fee I

Total assets at end of previous accounting period(Note1) × 1.0% per annum (ceiling)

Management fee II

Management fee II for previous accounting period × (DPU before deduction of current period management fee II/DPU before
deduction of previous period management fee II) × management fee II revised ratio

Acquisition fee(Note 2)

Acquisition price × 1.0% (ceiling) (transaction with related party: 0.5% (ceiling))

Disposition fee

Disposition price × 1.0% (ceiling) (transaction with related party: 0.5% (ceiling))(Note 1) Subject to adjustment for asset acquisitions and asset dispositions during the relevant calculation period.
(Note 2) Where the sum calculated for an acquired asset is less than 5 million yen, the acquisition fee is set at 5 million yen.

Flow of decision making for transactions with related parties in acquisition and disposition of assets
Review andapproval

Propose
Proposingdepartment

Complianceofficer

ReturnInvestment
Committee(includes outsidecommittee
members)

Review anddecision

Review andReview andCompliancedecision
decision
Committee
Board of(includes outside
Directors
committee
members)
Attendance andAttendance andReject approval of outside
Reject approval of outside
Rejectmembers essential
members essential

Investment
Corporation
Board Meeting

RejectOoedo Onsen Reit Investment Corporation 53

Overview of Investment Corporation
Parent Company of Asset Manager
SponsorInvestment Corporation

Ooedo-Onsen Monogatari
Hotels & Resorts Co., Ltd.
(100% ownership)

Ooedo-Onsen Monogatari Co., Ltd.

⑥⑤

Ooedo Onsen Reit Investment
Corporation④

General Unitholders’ Meeting②(100% ownership)

Sumitomo Mitsui Trust Bank,
LimitedBoard of Directors
Asset Manager①

Ooedo Onsen
Asset Management Co., Ltd.

Executive Director
Fuminori Imanishi
Supervisory Director
Kentaro Suzuki
Supervisory Director
Takayuki Hongyo

Subsidiary of Parent Company
of Asset Manager

Reoma Unity Co., Ltd.

③

Accounting and Tax Administrator

Heiseikaikeisha Tax Corporation⑤

Independent Auditor

Kagawa Prefecture Tourism
Development Ltd.
Subsidiary of Parent Company
of Asset Manager

Asset Custodian
Unitholders’ Registry Administrator
General Administrator(agency management)⑥

PricewaterhouseCoopers
Aarata LLC① Asset Management Agreement② Asset Custodian Contract / Contract for Unitholders’Registry and Other Administrative Services /Contract for General Administrative Services(agency management)③ Accounting Services Contract④ Sponsor Support Contract⑤ Asset Purchase and Sales Contract⑥ Asset Lease Contract

Ooedo Onsen Reit Investment Corporation 54

Overview of Asset Manager

Name：Ooedo Onsen Asset Management Co., Ltd.

Address：3-3-4, Nihonbashi-Honcho, Chuo-Ku, Tokyo

Discretionary transaction agent, Minister of Land,
Transport and Tourism License No. 102

Established：April 24, 2015

Financial instruments business, Director of Kanto Local
Finance Bureau (Kinsho) No. 2906

Capitalization：50 million yen

Member of the Investment Trusts Association, Japan

Representative：Fuminori Imanishi

Shareholder：Ooedo-Onsen Monogatari Co., Ltd. 100％

Registrationsand Licenses

Employees：Real estate brokerage, Governor of Tokyo (1) No. 98032：12 (as of November 30, 2018)

Structure
General Shareholders’ Meeting

Auditors
Board of Directors
Investment Committee

Compliance Committee
President and CEO
Compliance Officer

Investment Management Department

Finance Department

Planning and Coordination
Department

Ooedo Onsen Reit Investment Corporation 55

Disclaimer

This material is for informational purposes only and is not intended for the public offering, solicitation, sales, etc. ofparticular financial instruments. To purchase investment units of Ooedo Onsen Reit Investment Corporation (hereinafterreferred to as “The Investment Corporation”), please contact a securities company.
Unless otherwise noted, the information presented in this material is not a requirement of the Financial Instruments andExchange Act, laws related to investment trusts and investment corporations or Cabinet Order, Cabinet Office
Ordinance, regulations related to these or Securities Listing Regulations of the Tokyo Stock Exchange or various otherrelated regulations. Also, this information is not the same as that required for disclosure or asset management reports
prepared according to related laws and regulations, etc.
This material contains forward-looking statements regarding business results, but these statements were made basedon information available at the time these materials were prepared and according to certain conditions and decisions, sothey contain unknown risk and uncertainty. Accordingly, information concerning the future are not guarantees of future
results of The Investment Corporation and actual results may differ significantly.
The information presented in this material has been prepared with all care. However, there is no guarantee of theinformation’s accuracy and completeness. Also, reported details may be modified or discontinued without notice.
Duplication or use for other purposes of these materials without prior permission is prohibited.

Ooedo Onsen Reit Investment Corporation 56