Ooedo Onsen Reit Investment Corporation
Results of 6th Fiscal Period ended May 31, 2019

Presentation Material
July 22, 2019
（Asset Manager）Ooedo Onsen Asset Management Co., Ltd.

Table of Contents
Ⅰ. Investment Highlights
Operating Results for the Entire Portfolio

3

Increase/Decrease in Variable Rent

4

Financial Status – Implementation of Refinancing

5

Changes in Key Indices6

Ⅱ. Financial Highlights

Internal Growth Strategy

27

Financial Strategy

29

Ⅴ. Appendix
Appraisal Value

31

Introduction of Properties

32

Financial Indices42

Financial Results for the 6th Fiscal Period ended May 20199Balance Sheet

43

Forecast for the 7th Fiscal Period ending November 201910

Statement of Income

44

Forecast for the 8th Fiscal Period ending May 202011

Debt Status

45

Major Factors for Increase/Decrease in DPU－Operation Focused on Stable Generation of Cash

12

Ooedo-Onsen Monogatari Group46“Ooedo Business Model” with Stable Operations and Sustainable Growth48

Unitholders Breakdown

50

Ⅲ. Investment Results
Portfolio Data

14

Unitholder Benefit Program

51

Operating Results of Individual Properties

16

Track Record of Investment Unit Price52

Governance Structure

53

Overview of Investment Corporation

54

Overview of Asset Manager

55

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

19

Market Environment

20

External Growth Strategy

22* The photo on the front cover is an outside bath at Kinugawa Kanko Hotel.

Ooedo Onsen Reit Investment Corporation 1

Ⅰ. Investment Highlights

Ooedo Onsen Reit Investment Corporation 2

Operating Results for the Entire Portfolio
Room occupancy and ADR improved, reflecting highly efficient operation and stable onsen demand.
RevPAR increased 2.6%
＜Cumulative comparison of 6th period and the same period of the previous year＞

Room occupancy rate︓
85.3%

86.7%

Portfolio operating results
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

81.7%

82.5%

97.6%

86.2%

91.9%

97.4%

90.5%

78.9%

85.8%

93.0%

86.9%

84.8%

88.1%

85.3%

86.7%

+1.4%

ADR (yen)

26,76029,39740,542

27,75528,53928,98031,83230,332

27,82431,01829,89130,26230,42329,97230,257+285

RevPAR (yen)21,862

24,252

39,56823,924

26,22728,22628,80723,931

23,872

28,84625,97525,66226,802

25,566

26,232+666

Sales (million yen)

1,190

1,305

2,084

1,259

1,455

1,547

1,575

1,306

1,186

1,548

1,354

1,379

17,194

8,213

8,351

+137

(Note) Unless otherwise specified, figures are rounded down to the nearest specified unit and percentage rates are rounded to the first decimal place in this material. The same applies hereinafter.

Ooedo Onsen Reit Investment Corporation 3

Increase/Decrease in Variable Rent
Operation, while remaining solid as a whole, differed from one facility to another on the GOP level.
~ Measures for improvement such as initiatives for attracting more customers arebeing discussed continuously with the sponsor,
thereby improving the performance of facilities whose variable rents declined.

(thousand yen)

PropetyNo.

Property name

5th period
Fixed

Variable

6th period
Total rent

Fixed

Variable

Total rent

Increase/decrease ofvariable rent

S-1

Ooedo-Onsen Monogatari Reoma Resort

375,275

31,090406,366

375,257

31,090406,347-

S-2

Ooedo-Onsen Monogatari Ise-shima

108,056

7,507

115,563

108,056

7,499

115,555-7

S-3

Ito Hotel New Okabe

73,7808,056

81,83773,7808,681

82,462624

S-4

Ooedo-Onsen Monogatari Atami

93,716

7,899

101,615

93,7168,138

101,855

239

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

54,5896,202

60,791

54,5896,543

61,133341

S-6

Ooedo-Onsen Monogatari Awara

65,7783,645

69,42365,7783,621

69,399-23

S-7

Ooedo-Onsen Monogatari Kamoshika-so

35,723

4,849

40,57235,723

4,676

40,399-172

S-8

Ooedo-Onsen Monogatari Ikaho

36,7594,732

41,49136,7594,825

41,58593

S-9

Ooedo-Onsen Monogatari Kimitsu-no-mori

24,5902,667

27,257

24,5902,768

27,358101

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

58,7292,990

61,71958,7294,155

62,885

1,165

S-11

Ooedo-Onsen Monogatari Kounkaku

42,103

4,530

46,633

42,103-

42,103-4,530S-12

Kinugawa Kanko Hotel

134,868

7,128

141,997

134,868

7,797

142,665

668

S-13

Ooedo-Onsen Monogatari Kinosaki

74,687

3,905

78,59374,687

4,733

79,421

828

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

51,7905,643

57,434

51,7905,309

57,099-334

1,230,449

100,847

1,331,297

1,230,431

99,841

1,330,273-1,005

Total(Note) The variable rent of Ooedo-Onsen Monogatari Reoma Resort is temporarily fixed until the fiscal period ended May 31, 2019. Amounts initially fixed are presented as variable rents for the 5th fiscal periodwith respect to properties acquired in December 2017 (Ooedo-Onsen Monogatari Nagasaki Hotel Seifu, Ooedo-Onsen Monogatari Kounkaku, Kinugawa Kanko Hotel, Ooedo-Onsen Monogatari Kinosaki
and Ooedo-Onsen Monogatari Higashiyama Grand Hotel).

Ooedo Onsen Reit Investment Corporation 4

Financial Status – Implementation of Refinancing
LTV, which is at high 30% range on an appraisal value basis, will decrease further due to scheduled
repayments. The due dates have been diversified and the remaining duration has been extended through arange of financing initiatives including participation by a new bank as syndicate lender.
Breakdown of lenders

LTV
(%)
43.0

Ratio of long-term borrowings

Number of syndicate lenders: 14

LTV(book value basis)

40.6

41.0

(%)
100.0

LTV(appraisal value basis)

40.3

97.8

97.8

6th
May 2019(Actual)

7th
Nov. 2019(Forecast)

8th
May 2020(Forecast)

40.0
95.0

39.0
36.8

37.0
35.0

97.8

6th
May 2019(Actual)36.3

7th
Nov. 2019(Forecast)

35.8<Breakdown of others, which stand at 23.1%>

8th
May 2020(Forecast)

90.0

The Bank of Fukuoka 3.1%

The Toho Bank 3.0%

The Tochigi Bank 3.0%

The Shinwa Bank 3.0%

The First Bank of Toyama 3.0%

The Iyo Bank 3.0%

Fukoku Mutual Life Insurance 3.0%

The Bank of Kochi 1.8%

Overview of maturity（million yen）
8,000

Avg. remaining duration
5th period: 1.4 years → 6th period: 2.4 years

6,000
4,000
2,000
0

6th
May-197th
Nov-198th
May-209th
Nov-2010th
May-21

11th
Nov-21

12th
May-2213th
Nov-22

14th
May-23

Ooedo Onsen Reit Investment Corporation 5

Changes in Key Indices (1)Distributions per unit and FFO have been stable since listing. Under these conditions, LTV has been
declining due to scheduled payments and NAV per unit has been rising thanks to unrealized gains.
FFO per unit

DPU per unit
(yen)
3,000
2,533
2,500

(yen)
6,000
2,392

2,435

2,466

2,390

2,380

2,337

2,000

4,000

1,500

3,000

1,000
500

2,000
376

1st
period(Actual)

2nd
period(Actual)

3rd
period(Actual)

4th
period(Actual)

5th
period(Actual)

6th
7th
8th
periodperiodperiod(Actual) (Forecast) (Forecast)

（％）
46.0

2nd
period(Actual)

3rd
period(Actual)

4,247

4,195

5th
period(Actual)

6th
7th
8th
periodperiodperiod(Actual) (Forecast) (Forecast)

4,219

4,198

1,119

0
1st
period(Actual)

4th
period(Actual)(yen)
115,000

44.0

110,000

42.2

42.0

39.9

42.9

40.9

39.8

40.6

40.3

40.0

107,149
103,391

105,000
100,000

38.0

38.5

36.0
34.0

3,903

NAV per unit（Note 2）

LTV（Note 2）

40.0

4,022

1,000

0

44.0

4,815

5,000

38.2

Book value basis

39.1

37.6

36.3

35.8

36.8

Appraisal value basis

2nd
period(Actual)

3rd
period(Actual)

4th
period(Actual)

5th
period(Actual)98,576

2nd
period(Actual)

3rd
period(Actual)109,267

104,836

94,20790,00085,00032.0
1stperiod(Actual)95,00097,740108,213

6th
7th
8th
periodperiodperiod(Actual) (Forecast) (Forecast)

1st
period(Actual)

4th
period(Actual)

5th
period(Actual)

6th
7th
8th
periodperiodperiod(Actual) (Forecast) (Forecast)(Note 1) The actual operation period was from September 1 until November 30, 2016 in the first period. In the 4th period, five properties were newly acquired with capital increased through public offering.
(Note 2) LTV (on an appraisal value basis) and NAV per unit for the 7th and 8th fiscal periods are based on the assumption that appraisal value will remain unchanged.

Ooedo Onsen Reit Investment Corporation 6

Changes in Key Indices (2) – Tenants’ Operation Results
Major KPIs maintained by the Ooedo business model have been stable,
helped by comparatively small seasonal changes
Room occupancy
rate:

91.6％

88.8％

89.6％

85.3％

89.6％

86.7％

(yen)

(million yen)

35,00012,00030,00027,57729,65330,42929,97230,58330,257
10,00025,00025,24826,32727,26427,402

26,232

25,5668,000

20,00015,000

6,000

10,000
4,000
5,000
2,350

4,863

5,060

8,213

8,843

8,351

1st
period(Actual)

2nd
period(Actual)

3rd
period(Actual)

4th
period(Actual)

5th
period(Actual)

6th
period(Actual)2,000

0Sales (million yen) (right axis)

ADR (yen) (left axis)

RevPAR (yen) (left axis)

Ooedo Onsen Reit Investment Corporation 7

Ⅱ. Financial Highlights

Ooedo Onsen Reit Investment Corporation 8

Financial Results for the 6th Fiscal Period ended May 2019
Operating revenue was in line with the previous forecast, and DPU increased 10 yen per unit.
Profits were lower than the previous period due to factors such as lower secondary rents,
which reflected a decrease in the valuation amount of fixed asset taxes and city planning taxes.
(thousand yen)
Item

Operating revenue

5th period

6th period（Actual ）（Actual ）Component
ratio

Primary rent
Fixed rent
Variable rent

1,450,211

Component
ratio

1,331,297
92.4%

1,230,449

Difference

Main factors for increase/decrease from forecast

Difference(thousand yen)・ Increse in variable rent

1,434,986-15,225

1,434,151+834

1,330,273-1,024

1,329,413+859

1,230,431-18

1,230,449-

99,841-1,00598,963+877

116,282

104,437-11,844

104,462-24

Others

2,631

275-2,356275-

Lease operations
revenue gain/loss

908,332

886,911-21,421885,642+1,269Operating income

714,516

699,005-15,510695,150+3,855

Ordinary income

578,593

560,389-18,203558,184+2,205

Net income

577,620559,516-18,103557,184+2,332

2,824

2,824

-

2,824

-

580,365

562,479-17,886

560,125+2,353

Secondary rent

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

FFO per unit (yen)
NOI

7.6%

100,847

92.5%

6th period(Forecast as ofJan. 22, 2019)7.5%

235,347

235,347-

235,347

-

2,466

2,390

-76

2,380

+10

12

12

-

12

-

4,247
1,330,330

4,195
1,314,891-52-15,4384,189
1,314,390+6+501

Depreciation

421,997

427,980+5,982428,748

-768

CAPEX

206,381

184,163-22,217

180,001+4,162

Lease operations revenue gain/loss
・ Decrease in selling, general and administration(IR-related expenses)

Operating income
・ Increse in finance-related expenses

Ordinaly income+877+1,269+2,585+3,855-1,661+2,205Main factors for increase/decrease
from previous fiscal period(thousand yen)・ Decrease in secondary rent (due to reflecting the review ofthe valuation amount of fixed asset taxes and city planningtaxes)・ Increase in depreciation (due to capital expenditure)

Lease operations revenue gain/loss
・ Decrease in AM fee
・ Decrease in expenses for introducing the disclosure system,etc.
・ Decrease in IR-related expenses

Operating income
・ Increse in finance-related expenses

Ordinaly income

Main financial indicators-11,844-5,982-21,421+3,235+2,555+1,945-15,510-1,821-18,203(million yen)

Total assets

38,782

Interest-bearing debt

15,754

Total liabilities

17,578

Total net assets

21,204

LTV (book value basis)
NAV per unit

40.6%
107,149 yen

Ooedo Onsen Reit Investment Corporation 9

Forecast for the 7th Fiscal Period ending November 2019
Changes from the previous forecasts reflect a decrease in finance-related expenses, which is expected tooffset increases in depreciation and others. As a result, DPU will remain unchanged from the former forecast.
Changes from the previous period reflect a decrease in finance-related expenses, which is expected topartially offset a decrease in variable rents and an increase in depreciation. Despite this, DPU will decline
10 yen per unit.
(thousand yen)
Item

Operating revenue

6th period

7th period（Actual ）（Forecast）

Component
ratio

Primary rent

1,434,986

Component
ratio

1,330,273

7th period(Forecast as ofJan. 22, 2019)

Difference

Difference

Main factors for increase/decrease from forecast

1,433,949-1,037

1,434,133-184

1,329,160-1,112

1,329,492-331

Fixed rent

92.5%

1,230,431

92.6%

1,230,431-01,230,449-18

Variable rent

7.5%

99,841

7.4%

98,729-1,112

99,042-312

104,513+75

104,366+146

Secondary rent
Others104,437
275

275

-

275

-

Lease operations
revenue gain/loss

886,911879,619-7,291

881,496-1,876

Operating income

699,005

691,185-7,820694,775-3,590Ordinary income

560,389

558,355-2,034558,229+126

Net income

559,516557,355-2,161

557,229+126

Excess cash distribution

2,824

2,824

-

2,824

-

Total distribution

562,479

560,125-2,353560,125-

Total units outstanding

235,347

235,347-

235,347-

DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI
Depreciation
CAPEX

2,390

2,380

-10

2,380

-

12

12

-

12

-

4,195

4,219

+24

4,213

+6

1,314,891

1,315,204+312

1,315,951-747

427,980

435,584+7,604434,454+1,129184,163

180,000-4,163

180,000-(thousand yen)・ Increase in depreciation (due to capital expenditure)

Lease operations revenue gain/loss
・ Increase in selling, general and administration(IR-related expenses)

Operating income
・ Decrease in finance-related expenses

Ordinaly income-1,129-1,876-1,713-3,590+3,716+126

Main factors for increase/decrease
from previous fiscal period(thousand yen)・ Decrease in variable rent (Kounkaku, etc.)
・ Decrease in other expenses (survey on asbestos, etc.)
・ Increase in depreciation (due to capital expenditure)

Lease operations revenue gain/loss
・ Increase in selling, general and administration(transfer fees, etc.)

Operating income
・ Decrease in finance-related expenses

Ordinaly income

Main financial indicators-1,112+1,688-7,604-7,291-528-7,820+5,797-2,034(million yen)

Total assets

38,582

Interest-bearing debt

15,558

Total liabilities

17,383

Total net assets

21,198LTV (book value basis)

40.3%

Ooedo Onsen Reit Investment Corporation 10

Forecast for the 8th Fiscal Period ending May 2020
Changes from the previous period reflect a slight increase in variable rents.
However, DPU will be 43 yen lower per unit, mainly due to an increase in depreciation and the posting of
an increase in expenses for the General Unitholders’ Meeting(thousand yen)
Item

Operating revenue

7th period

8th period（Forecast）（Forecast）

Component
ratio

Primary rent
Fixed rent
Variable rent
Secondary rent
Others1,433,949

Component
ratio

1,436,321+2,372

1,330,027+866

1,230,431-

99,596+866

104,513106,018+1,505

275

275

-

1,329,160
92.6%
7.4%

Difference

1,230,431

92.5%

98,729

7.5%

Lease operations
revenue gain/loss

879,619

Operating income

691,185

682,267-8,917

Ordinary income

558,355548,293-10,061

Net income
Excess cash distribution

875,262-4,357557,355

547,293-10,061

2,824

2,824

-

Total distribution

560,125550,005-10,119

Total units outstanding

235,347

235,347

-

2,380

2,337

-43

12

12

-

4,219

4,198

-21

1,315,204

1,316,108+903

Depreciation

435,584

440,845+5,260

CAPEX

180,000

180,000-

DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI

Main factors for increase/decrease
from previous fiscal period(thousand yen)・ Increase in variable rent
・ Increase in depreciation (due to capital expenditure)

Lease operations revenue gain/loss
・ Temporary increase in expenses
for General Unitholders’ Meeting

Operating income
・ Increase in finance-related expenses

Ordinaly income

Main financial indicators+866-5,260-4,357-6,000-8,917-1,143-10,061(million yen)

Total assets

38,397

Interest-bearing debt

15,371

Total liabilities

17,211

Total net assets

21,186

LTV (book value basis)

40.0%

Ooedo Onsen Reit Investment Corporation 11

Major Factors for Increase/Decrease in DPU– Operation Focused on Stable Generation of Cash
FFO per unit remained and is expected to remain stable. Extra cash was and will be used for measures
such as scheduled repayments to improve the financial conditions
6th period(May 2019)

(yen)
5,000

4,189
4,000

＋11
Selling,
general andadministrative
expenses

-7

4,195

Financerelated
expenses

7th period

8th period(November 2019)(May 2020)

＋25

4,219

-25

4,198

Expensesfor General
Unitholders’Meeting

Financerelated
expenses

3,000

2,000

2,380

2,390

2,380

2,337

6th period(Forecast)

6th period(Actual)7th period(Forecast)

8th period(Forecast)

1,000

0

(Note 1) The figures on the upper side and lower side of the bars show FFO per unit and distributions per unit, respectively.
(Note 2) 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 12

Ⅲ. Investment Results

Ooedo Onsen Reit Investment Corporation 13

Portfolio Data (1)Appraisal values rose overall despite increases or decreases that occurred depending on properties due tochanges in fixed rates. The unrealized gain (appraisal value – book value) increased to 4.01 billion yen(up 0.56 billion yen period on period) at the end of the 6th period.
Property
No.

Property name

S-1

Ooedo-Onsen Monogatari Reoma Resort

S-2

Ooedo-Onsen Monogatari Ise-shima

S-3

Location

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)

27.9／ 28.2

241

90.4%

10,379

8,910

404

7.8%

6.2%

1.9／ 1.6％

Mie Prefecture

39.2

83

94.6%

3,656

3,840

114

6.3%

3.4%

14.2%

Ito Hotel New Okabe

Shizuoaka Prefecture

28.6

73

95.9%

2,657

2,820

81

6.1%

4.1%

12.0%

S-4

Ooedo-Onsen Monogatari Atami

Shizuoaka Prefecture

45.4

76

98.9%

2,997

3,220

100

6.7%

4.5%

12.6%

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

Shizuoaka Prefecture

44.7

64

91.6%

1,910

2,030

60

6.3%

3.3%

14.9%

S-6

Ooedo-Onsen Monogatari Awara

Fukui Prefecture

37.8

95

77.8%

1,901

2,000

68

7.2%

5.0%

14.9%

S-7

Ooedo-Onsen Monogatari Kamoshika-so

Tochigi Prefecture

23.3

60

76.8%

1,222

1,270

39

6.5%

4.3%

3.0%

S-8

Ooedo-Onsen Monogatari Ikaho

Gunma Prefecture

35.6

40

96.1%

1,299

1,380

40

6.2%

4.1%

1.0%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-moriChiba Prefecture

23.2

41

96.1%

819

862

26

6.4%

4.6%

4.8%

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Nagasaki Prefecture

36.9

100

91.4%

1,637

2,570

61

7.6%

5.2%

6.4%

S-11

Ooedo-Onsen Monogatari Kounkaku

Miyagi Prefecture

53.5

98

77.1%

1,040

1,220

40

7.9%

3.9%

3.9%

S-12

Kinugawa Kanko Hotel

Tochigi Prefecture

37.8

172

76.3%

3,870

6,140

140

7.3%

4.1%

2.1%

S-13

Ooedo-Onsen Monogatari Kinosaki

Hyogo Prefecture

50.6

103

92.9%

2,084

2,650

79

7.6%

5.7%

11.8%

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel Fukushima Prefecture

54.7

123

75.2%

1,230

1,480

56

9.2%

4.8%

4.6%

37.5

1,369

86.7%

36,70540,392

1,314

7.2%

4.8%

2.7%

Total/Average

Kagawa Prefecture

Building age(years)(Note 3)(Note 4)(Note 5)(Note 1) Room occupancy rate is for the 6th period ended May 31, 2019 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 14

Portfolio Data (2)The declining ratio of Reoma Resort in the overall portfolio and diversifying areas for investment
Investment ratio by facility
Acquisition price basis

Investment ratio by region
Acquisition price basis

Appraisal value basis

2.8%
3.3%
3.4%
3.5%
4.5%

2.2%
3.4%

3.1%

2.1%

4.5%
6.2%

3.7%
28.3%

Tohoku
22.1%

5.0%
5.0%

5.2%

6.4%
10.5%

5.7%

7.0%

8.0%

9.5%

< 7th period (forecast) >3.0% 2.1%
3.2%

3.0% 2.1%
3.1%

5.2%

Shikoku
Kyushu30.5%

Ooedo-Onsen Monogatari Toi Marine Hotel

5.2%
6.0%

6.0%

8.7%

26.0%

4.6%
5.2%

10.7%

Ito Hotel New Okabe

Ooedo-Onsen Monogatari Awara

4.7%

6.2%

Ooedo-Onsen Monogatari Ise-shima
Ooedo-Onsen Monogatari Atami

4.3%

7.7%

30.6%

Ooedo-Onsen Monogatari Reoma Resort< 6th period (actual) >

4.6%

Tokai

Kinki
5.7%

6.6%

10.0%

Kanto

Hokuriku
15.2%

Rent income basis (Note)

3.1%
3.2%
4.3%

19.6%

28.3%

5.2%

7.2%
8.2%

3.0%

Ooedo-Onsen Monogatari Ikaho
Ooedo-Onsen Monogatari Kimitsu-no-mori
13.7%

6.2%
6.3%

Ooedo-Onsen Monogatari Kamosika-so

7.7%

8.7%

Ooedo-Onsen Monogatari Nagaski Hotel Seifu
Ooedo-Onsen Monogatari Kounkaku
Kinugawa Kanko Hotel
Ooedo-Onsen Monogatari Kinosaki(Note) Calculations were made based on the primary rent.

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

Ooedo Onsen Reit Investment Corporation 15

Operating Results of Individual Properties (1)RevPAR improved notably at Reoma Resort and Ito Hotel New Okabe, but it declined at Kinugawa Kanko
and Kounkaku because the former struggled to attract a group of tourists and the latter was affected by
the comparatively declined efforts of customer attraction area-wide. Measures for improvement are being
discussed with the sponsor
1. Operating results of the accommodation sector
Room occupancy rate (%)
Previous
corresponding
periodcumulative
total

6th period
cumulative
Total

ADR (yen)Previous
corresponding
periodcumulative
total

RevPAR (yen)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>

88.4

90.4

+2.3%

29,58731,427+6.2%

26,15428,410

+8.6%

1,573

1,639

+4.1%

S-2

Ooedo-Onsen MonogatariIse-shima

95.3

94.6

-0.7%

33,68333,509-0.5%

32,09931,699

-1.2%

582

570

-2.1%

S-3

Ito Hotel New Okabe

81.2

95.9

+18.1%

30,40629,783-2.0%

24,68928,561+15.7%

586

667+13.8%

S-4

Ooedo-Onsen Monogatari
Atami

96.8

98.9

+2.2%

32,24933,141+2.8%

31,217

32,776

+5.0%

509

529

+3.7%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

84.8

91.6

+8.0%

27,632

26,661-3.5%

23,431

24,421

+4.2%

310

321

+3.5%

S-6

Ooedo-Onsen Monogatari
Awara

75.6

77.8

+2.9%

29,40730,055+2.2%

22,231

23,382

+5.2%

499

512

+2.6%

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

76.2

76.8

+0.8%

27,74026,509-4.4%

21,137

20,358

-3.7%

274

263

-4.0%

S-8

Ooedo-Onsen Monogatari
Ikaho

92.5

96.1

+3.9%

29,24829,880+2.2%

27,05428,714

+6.1%

225

240

+6.7%

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

94.9

96.1

+1.3%

26,57026,646+0.3%

25,21425,606

+1.6%

279

282

+0.7%

Change

6th period
cumulative
Total

Change

6th period
cumulative
Total

Change

6th period
cumulative
Total

ChangeOoedo Onsen Reit Investment Corporation 16

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

Property name

Previous
corresponding
periodcumulative
total

6th period
cumulative
Total

RevPAR (yen)ADR (yen)

ChangePrevious
corresponding
periodcumulative
total

6th period
cumulative
Total

ChangePrevious
corresponding
periodcumulative
total

6th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative
total

6th period
cumulative
Total

ChangeS-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

93.9

91.4

-2.7%

32,71133,181+1.4%

30,71530,327

-1.3%

634

624

-1.6%

S-11

Ooedo-Onsen Monogatari
Kounkaku

76.3

77.1

+1.0%

26,89325,017-7.0%

20,51919,288

-6.0%

452

483

+6.6%

S-12

Kinugawa Kanko Hotel

88.8

76.3

-14.1%

29,42530,695+4.3%

26,12923,420-10.4%

1,084

952-12.2%

S-13

Ooedo-Onsen Monogatari
Kinosaki

86.5

92.9

+7.4%

32,102

32,218+0.4%

27,76829,930

+7.8%

635

679

+6.8%

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

70.3

75.2

+7.0%

28,62828,468-0.6%

20,125

21,407

+6.4%

566

585

+3.4%

85.3

86.7

+1.6%

29,97230,257+1.0%

25,566

26,232

+2.6%

8,213

8,351

+1.7%

Total

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

S-1

Property name

Ooedo-Onsen Monogatari
Reoma Resort <New Reoma World>

Previous
corresponding
periodcumulative
total

284,304

6th period
cumulative
Total

295,839

Sales (million yen)

Change+4.1%

Previous
corresponding
periodcumulative
total

1,121

6th period
cumulative
Total

1,135

Change+1.2%(Note) Number of guests is the total number of people using New Reoma World during the period.

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
Investments are made in a range of facilities for utilizing leisure time, particularly those related to onsen/spa,
to provide consumers with an enjoyable and rich experience during their leisure time
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 consumer-business-use
properties represented by the facilities of the OoedoOnsen Monogatari Group, whose markets have beenstable due to efforts to capture contemporaryconsumer needs and the trend of consumption forservices (experience-oriented).

Ooedo Onsen Reit Investment Corporation 19

Market Environment (1)Consumption for services is expected to increase going forward due to a rise in the number of active elderly
people and workstyle reforms, among other factors, and the leisure market is forecast to expand
Trends in the consumption of services

Source: A graph prepared by the Asset Manager based on Implementation ofConsumer Policies in 2017 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 2018)

・Services (Experiences) has been in increasing trend since 1980
according to “Implementation of consumer policies”
implemented by the Consumer Affairs Agency in 2017.
・According to the Public Opinion Survey Concerning People’s
Lifestyles, people put the greatest emphasis on leisure/leisurelives.

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

・Hotel revenues have been increasing consistently over recent
years and other indexes have been stable in the leisure market.
Ooedo Onsen Reit Investment Corporation 20

Market Environment (2)Onsen demand is expected to be stable in the medium to long term,
aided by the stable use of onsen and the popularity of onsen tours
Trends in number of accommodation facilities
and FY total number of guests(facilities)
16,000(thousands)
150000No. of accommodation facilities (left axis)
FY total no. of guests (right axis)

12000012,000

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

Families
Male

Seniors

Female

60
50

90000

40

60000

30

8,000

30.7

26.7

26.9

30.2

34.0

15.8

20

4,000

30000
0

0
FY2010FY2012FY2014FY2016

Source: Onsen Use (2010 – 2017), 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

10

28.5

18.8

24.5

22.2

26.5

27.7

26.7

20's

30's

40's

50's

60's

32.5

0
10's

70's

Source: “White Paper of Leisure 2018”by Japan Productivity Center(Note) The figures show the total ratios of visits by gender and age. The ratios do not add up to 100%.
The figures are presented for each age group by gender by the asset manager after
the respective ratios are accumulated, based on sourced data.

・The number of accommodation facilities‘ guests has beenstable since FY2010 according to the Onsen Use Survey by
the Ministry of the Environment

38.5%

Theme park

31.8%

Seashore resort

29.9%

Sightseeing, city

・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

20.6%

Walking in town

19.8%

Shopping

19.0%

Long Stay

17.8%

Japanese style inn

17.4%
0%

20%

40%

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)The number of properties in the pipeline increased constantly as the sponsor continued to acquire
and renovate hotels
Facilities acquired by the Ooedo Onsen Monogatari Group after the establishment of the Investment Corporation (March 2016)
October 2016 -April 2017 -July 2017 -Ooedo-Onsen Monogatari
MasuyaOoedo-Onsen Monogatari
Hotel Suiyotei

Ooedo-Onsen Monogatari
Beppu Seifu(Osaki City, Miyagi Prefecture)(Osaki City, Miyagi Prefecture)(Atami City, Shizuoka Prefecture)(Beppu City, Ooita Prefecture)

July 2017 -April 2018 -August 2018 -April 2019 -Scheduled to openin August 2019

Ooedo-Onsen Monogatari
Gero Shin-kan

Ooedo-Onsen Monogatari
Nanki Kushimoto

Ooedo-Onsen Monogatari
Hotel Kisoji

TAOYA Shima(Gero City, Gifu Prefecture)(Higashi Muro County,
Wakayama Prefecture)(Kiso County, Nagano Prefecture)

August 2016 -Acquired

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu(Nagasaki City, Nagasaki Prefecture)

October 2016 -Acquired

Ooedo-Onsen Monogatari
Kounkaku(Toba City, Mie Prefecture)

Ooedo-Onsen Monogatari
Amakusa Hotel Kameya(Kamiamakusa City,
Kumamoto Prefecture)

Some of the other facilities of the Ooedo Onsen Monogatari GroupTokyo Odaiba
Ooedo-Onsen Monogatari(Fixed term land lease right forbusiness purpose)(Koto-ku, Tokyo)

Ooedo-Onsen Monogatari
Urayasu Mangekyo

Ooedo-Onsen-Monogatari
Minoh Kanko Hotel(Fixed term land lease right for (Minoh City, Osaka Prefecture)business purpose)(Urayasu City, Chiba Prefecture)

Minoh Onsen Spa Garden

Hotel New Shiobara(Minoh City, Osaka Prefecture)(Nasushiobara City,
Tochigi Prefecture)

Ooedo-Onsen Monogatari
Nikko Kirifuri(Nikko City, Tochigi Prefecture)

Yamashiro Onsen
Yamashitaya(Kaga City,
Ishikawa Prefecture)

Ooedo Onsen Reit Investment Corporation 22

External Growth Strategy (2)Work on obtaining information on the availability of many types of properties
including hotels in urban areas and accommodation facilities targeting inbound customers
Basic policies for the acquisition of properties other than those in the sponsor pipeline
1. With a focus on facilities for utilizing leisure time, target investment assets that realize the diversification of the portfolio
and the expansion of the business size.
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. Establish cooperative relationships with a range of operators that have unique operation expertise and markets,
and work on the possibility of increasing value through the Ooedo model for categories that are familiar to the sponsor.

<Property information (excluding sponsor properties) in the 6th period (from December 1, 2018 until May 31, 2019)>
Ordinance-designated cities

Core cities

Other

Total

Lodging

4

11

16

31

Other
(day trips, etc.)

2

0

9

11

Other lodgings

93

16

44

153

Entertainment, Amusement

4

3

4

11

Sports, beauty,
health promotion facilities

0

0

5

5

103

30

78

211

Onsen/Spa

Total

Ooedo Onsen Reit Investment Corporation 23

External Growth Strategy (3)Considering utilization of a variety of bridge funding.
Expecting an increase in the number of deals for which preferential negotiation rights were secured＜By source＞<Methods for acquiring properties>
1.4% 7.6%

18.0%

72.5%

<Progress of new acquisitions>

Bridge funds (GK-TK scheme, etc.)- Joint small-scale investments will also be
considered.
 Lease companies, real estate companies, etc.


Bridge funding
by a third party

Developers
Financial Instisutions
Real Estate Brokers
OthersPreferential
negotiation rights for
direct negotiations
with the sellerCollaboration with operators
Acquisition in sync with the financing period of
the Investment Corporation

Submission of LOI
completed

Due diligence/negotiations underway

Preferential negotiationrights secured

Total

Lodging

1

4

2

7

Other
(day trips, etc.)

0

0

0

0

Other lodgings

0

4

3

7

Entertainment, Amusement

1

1

0

2

Sports, beauty,
health promotion facilities

0

1

0

1

Total

2

10

5

17

Onsen/Spa(Note) The number of properties as of July 16, 2019 is presented. The Investment Corporation has preferential negotiation rights to some of these properties.
However, the Corporation may not be able to or is not obligated to acquire such properties.

Ooedo Onsen Reit Investment Corporation 24

External Growth Strategy (4) ‐Future Leisure Market
There are still not many facilities aimed at utilizing leisure time that not only satisfy the needs of domestic
consumers for services but also respond to growing and structurally changing inbound tourism demand
1. Inbound tourism<Composition of spending by foreigners travelling in Japan><Trends in the number of foreign tourists visiting Japan>(thousand)
40,0002015
28,691

30,00031,191

24,03919,73720,00013,413
10,000

6,218

+3.4％

Accommodation expenses
Food and drink expenses
Entertainment service expenses

+3.1％
+0.8％

Transport expenses

10,363

8,367

2018

-0.3％

Shopping expenses
Others

0
2011
2012
2013
2014
2015
2016
2017
2018
Source: A graph prepared by the Asset Manager based on compiled data andannouncements on statistics for foreign tourists visiting Japan by the Japan
National Tourism Organization

0.0%

-6.4％
-0.3％
10.0%

20.0%

30.0%

40.0%

50.0%

Source: A graph prepared by the Asset Manager based on surveys on the trend of
consumption by foreigners visiting Japan by the Japan National Tourism
Organization (2015 and 2018)

2. Demand for facilities aimed at utilizing leisure time
still unmet in terms of quantity and quality<Level of satisfaction in a variety of fields in current lives –Leisure/ leisure life>

・The number of inbound customers increased five times
in 2018 from the level in 2011

0.6%
8.3%

12.5%
SatisfiedModerately satisfied

25.1%

Neither satisfied nor dissatisfied
51.1%

Slightly dissatisfied
Dissatisfied

2.3%

Do not know

・The consumption structure of inbound tourism is changing,with tourists spending more on services instead of products
・The number of facilities aimed at utilizing leisure time isstill too small to satisfy consumer needs for services

Source: Public Opinion Survey on the Life of the People (a survey conducted in June 2018)

Ooedo Onsen Reit Investment Corporation 25

External Growth Strategy (5)Pursue external growth as a REIT focused on facilities aimed at utilizing leisure timeby leveraging the core services of onsen/spa -Transformation from a small-scale REIT

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

Pursue external growthby making the most of
business opportunities

Asset: 14 properties
Asset acquisition atlisting: 9 properties

AUM of￥26.8 billion

At listing(End of Aug. 2016)

AUM of￥36.7 billion

6th fiscal period
ended in May 20195 years after listing

Ooedo Onsen Reit Investment Corporation 26

Internal Growth Strategy (1)A rent structure mainly based on fixed elements and facility ownership for securing stable cash flow
Lease conditions for properties master-leased to the Ooedo-Onsen Monogatari Group as of May 31, 2019
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
50% to 60% of the modified GOP

Variablerent
component

Amount equivalent to real estate
related expenses of each facility

Approximately 5％*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 27

Internal Growth Strategy (2)Implementation of a strategic CAPEX scheme to increase revenues and strengthen competitiveness1. 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＞

Ooedo-Onsen Monogatari Reoma Resort<Hotel Reoma-no-mori>The number of seats was increased byapproximately 400 in the buffet area with a view toincreasing the number of customers for one-day trips

Ooedo-Onsen Monogatari Kounkaku

Ito Hotel New Okabe

The passage to the open-air bath was improved
to raise customer satisfaction

Implementation of large-scale renewal by utilizing
subsidies: Energy costs were reduced as a result of
making the boiler operate on gas instead of heavy oil

Ooedo Onsen Reit Investment Corporation 28

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 29

Ⅴ. Appendix

Ooedo Onsen Reit Investment Corporation 30

Appraisal Value

Property
No.

Property nam e

Direct capitalization m ethod
Discounted cash flow m ethod
Unrealized
Appraisal value (m illion yen)
Acquisition
profits andDirect Cap Rate
Discount Rate
Term inal Cap Rate
PriceBook value
losses
5th period 6th period
5th period 6th period
5th period 6th period(m illion(m illion yen) 5th period 6th period(m illion
Changevaluation Nov. 30,
valuationyen)
Nov. 30,
May 31,
Nov. 30,
May 31, valuation
Nov. 30,
May 31,
May 31,
yen)
2018
2019
2018
2019
2018
2019
2018
2019

S-1

Ooedo-Onsen Monogatari
Reoma Resort

10,37910,387

10,9008,910-1,990-1,477

6.0%

6.0%

-

5.8%

5.8%

-

6.2%

6.2%

-

S-2

Ooedo-Onsen MonogatariIse-shima

3,656

3,492

3,840

3,840

-

+347

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-3

Ito Hotel New Okabe

2,657

2,661

2,820

2,820

-

+158

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-4

Ooedo-Onsen Monogatari
Atami

2,997

2,889

3,220

3,220

-

+330

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

1,910

1,856

2,020

2,030

+10

+173

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-6

Ooedo-Onsen Monogatari
Awara

1,901

1,898

2,000

2,000

-

+101

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

1,222

1,203

1,270

1,270

-

+66

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-8

Ooedo-Onsen Monogatari
Ikaho

1,299

1,298

1,380

1,380

-

+81

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

819

841

862

862

-

+20

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

1,637

1,633

1,930

2,570

+640

+936

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-11

Ooedo-Onsen Monogatari
Kounkaku

1,040

1,033

1,250

1,220

-30

+186

5.5%

5.5%

-

5.3%

5.3%

-

5.7%

5.7%

-

S-12

Kinugawa Kanko Hotel

3,870

3,782

4,620

6,140

+1,520+2,357

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-13

Ooedo-Onsen Monogatari
Kinosaki

2,084

2,147

2,490

2,650

+160

+502

5.4%

5.4%

-

5.2%

5.2%

-

5.6%

5.6%

-

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

1,230

1,252

1,480

1,480

-

+227

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

36,70536,37840,08240,392+310+4,013

－

－

－

－

－

－

Total

－

－

－

Ooedo Onsen Reit Investment Corporation 31

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 32

Introduction of Properties (1)S-1︓Ooedo-Onsen Monogatari Reoma Resort 〈Hotel Reoma-no-mori〉
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

72.0%

76.6%

99.2%

77.2%

88.8%

98.4%

97.2%

85.5%

92.2%

98.3%

84.2%

85.3%

87.9%

88.4%

90.4%

+2.0%

ADR (yen)

24,32031,35647,64827,31925,937

26,73933,03230,45327,22432,67032,986

31,76031,30029,58731,427+1,840

RevPAR (yen)17,51024,01847,26621,09023,032

26,311

32,107

26,037

25,10032,114

27,77427,091

27,512

26,15428,410+2,256

185

232

461

204

236

271

311

257

230

309

258

272

3,230

1,573

1,639

+65

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-2︓Ooedo-Onsen Monogatari Ise-shima
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

88.3%

93.2%

95.5%

92.0%

95.1%

98.5%

98.7%

94.5%

98.3%

93.8%

91.2%

91.3%

94.2%

95.3%

94.6%

-0.7%

ADR (yen)

29,71432,62248,00532,20031,24032,49434,47432,26930,98438,09532,56432,40734,00333,68333,509-174

RevPAR (yen)26,23730,40345,844

29,62429,70932,00634,02530,49430,45735,73329,69829,58732,03032,09931,699

-400

79

92

136

92

94

98

104

92

84

108

89

90

1,164

582

570

-12

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-3︓Ito Hotel New Okabe
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

75.1%

84.0%

97.3%

85.1%

89.4%

98.2%

96.0%

92.4%

99.1%

99.5%

95.1%

93.7%

92.1%

81.2%

95.9%

+14.7%ADR (yen)

26,052

29,32042,01426,85027,06827,684

31,45830,57327,27531,50428,762

28,86029,96430,40629,783-623

RevPAR (yen)19,565

24,62840,87922,84924,19827,18530,19928,24927,02931,34627,352

27,041

27,596

24,68928,561+3,872

79

97

155

89

98

110

122

114

98

121

104

105

1,299

586

667

+81

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 33

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 34

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

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

97.0%

96.1%

97.9%

97.2%

96.3%

99.2%

98.0%

99.4%

99.8%

99.5%

99.3%

97.6%

98.1%

96.8%

98.9%

+2.1%

ADR (yen)

28,551

31,41047,69430,541

29,88130,833

34,971

31,25031,42535,712

32,57132,752

33,182

32,24933,141+892

RevPAR (yen)27,69430,185

46,692

29,68528,77530,58634,271

31,062

31,36235,53332,34331,96532,551

31,217

32,776+1,559

75

84

126

80

79

82

93

85

78

98

85

87

1,057

509

529

+19

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-5︓Ooedo-Onsen Monogatari Toi Marine Hotel
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

67.9%

87.3%

97.4%

79.9%

78.0%

93.2%

93.5%

86.8%

96.6%

99.2%

87.2%

86.7%

87.8%

84.8%

91.6%

+6.8%

ADR (yen)

24,16031,30547,71825,68625,01324,657

27,704

27,214

24,67827,14026,251

26,82628,506

27,632

26,661-971

RevPAR (yen)16,40427,32946,477

20,523

19,51022,98025,90323,621

23,83826,922

22,89023,25825,02823,431

24,421

+990

36

60

100

44

44

51

57

52

49

59

49

52

659

310

321

+11

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-6︓Ooedo-Onsen Monogatari Awara
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

82.7%

86.2%

99.5%

82.4%

87.9%

98.5%

83.9%

57.2%

74.6%

93.5%

86.2%

71.2%

83.7%

75.6%

77.8%

+2.2%

ADR (yen)

25,87630,36940,382

27,276

27,831

27,81331,76633,39428,78628,99528,51329,75830,146

29,40730,055+648

RevPAR (yen)21,39926,17840,18022,47524,46327,39526,651

19,101

21,474

27,11024,57821,187

25,232

22,231

23,382+1,151

80

96

145

82

91

101

98

71

72

100

89

79

1,111

499

512

+13

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 35

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 36

Introduction of Properties (3)S-7︓Ooedo-Onsen Monogatari Kamoshika-so
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

85.8%

93.8%

99.2%

81.8%

94.0%

97.9%

78.9%

68.9%

68.5%

89.4%

77.6%

76.9%

84.5%

76.2%

76.8%

+0.6%

ADR (yen)

24,11825,47836,262

24,846

27,81527,78526,53525,79225,00725,941

27,15228,36527,297

27,74026,509-1,231

RevPAR (yen)20,69323,89835,971

20,324

26,14627,201

20,936

17,77017,12923,19121,06921,812

23,065

21,137

20,358

-779

44

53

77

42

57

59

45

39

35

50

44

47

598

274

263

-11

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-8︓Ooedo-Onsen Monogatari Ikaho
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

97.8%

91.1%

99.6%

97.9%

98.1%

99.8%

97.3%

87.0%

95.4%

99.3%

98.8%

98.7%

96.7%

92.5%

96.1%

+3.6%

ADR (yen)

26,85828,742

40,67827,86829,95831,47032,38528,40525,85729,29831,672

31,07230,457

29,24829,880+632

RevPAR (yen)26,267

26,18340,51527,282

29,38831,40731,51024,712

24,66729,092

31,291

30,66829,451

27,05428,714+1,660

36

37

57

37

42

45

44

35

31

41

43

43

497

225

240

+15

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-9︓Ooedo-Onsen Monogatari Kimitsu-no-mori
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

90.9%

88.4%

98.9%

92.8%

97.1%

98.2%

97.4%

93.4%

96.3%

97.9%

97.2%

94.5%

95.2%

94.9%

96.1%

+1.2%

ADR (yen)

23,621

26,08334,92326,50423,48625,261

27,68027,41225,153

27,187

26,05026,227

26,692

26,57026,646+76

RevPAR (yen)21,471

23,05734,53824,59522,80424,806

26,96025,602

24,222

26,61625,32024,78425,41025,21425,606

+392

38

43

63

44

43

45

49

48

39

49

46

47

561

279

282

+2

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 37

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 38

Introduction of Properties (4)S-10︓Ooedo-Onsen Monogatari Nagasaki Hotel Seifu
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

87.0%

81.0%

100.0%

91.8%

96.5%

98.9%

91.0%

73.6%

92.5%

100.0%

93.2%

98.5%

92.0%

93.9%

91.4%

-2.5%

ADR (yen)

32,33031,52437,64931,49936,05733,82134,30532,09031,262

33,21632,27635,37833,57832,71133,181+470

RevPAR (yen)28,12725,53437,64928,916

34,79533,44831,217

23,61828,91733,21630,081

34,84730,89130,71530,327

-388

97

91

131

98

119

115

109

83

92

116

102

119

1,279

634

624

-10

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-11︓Ooedo-Onsen Monogatari Kounkaku
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

78.2%

74.5%

89.9%

83.8%

92.3%

91.9%

89.5%

74.6%

78.6%

81.2%

66.8%

71.9%

81.2%

76.3%

77.1%

+0.8%

ADR (yen)

23,952

22,863

26,253

21,54424,566

26,263

27,10625,40324,93424,191

23,90524,02824,696

26,89325,017-1,876

RevPAR (yen)18,73017,032

23,601

18,053

22,674

24,13524,25918,95019,59819,643

15,96817,276

20,053

20,51919,288-1,231

72

68

95

68

100

105

106

81

76

84

63

71

995

452

483

+30

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-12︓Kinugawa Kanko Hotel
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

83.2%

77.5%

97.7%

88.6%

95.0%

95.7%

77.9%

66.2%

66.9%

87.1%

83.4%

75.9%

83.0%

88.8%

76.3%

-12.5%ADR (yen)

28,681

30,232

38,522

29,02632,401

32,77133,727

33,63926,901

28,732

29,861

31,17331,491

29,42530,695+1,270

RevPAR (yen)23,862

23,42937,63525,71730,78031,361

26,273

22,26917,99625,02524,904

23,66026,137

26,12923,420-2,709

174

163

240

171

222

221

189

154

118

167

165

156

2,144

1,084

952

-132

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 39

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 40

Introduction of Properties (5)S-13︓Ooedo-Onsen Monogatari Kinosaki
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

83.0%

81.6%

99.7%

91.2%

92.7%

98.7%

94.4%

80.9%

88.0%

99.8%

98.3%

95.9%

92.0%

86.5%

92.9%

+6.4%

ADR (yen)

25,99528,842

41,47927,55327,19930,21732,91332,65830,687

37,68530,59028,35831,36932,102

32,218+116

RevPAR (yen)21,57523,53541,35425,12825,21329,82431,06926,42027,00437,60930,06927,19528,85927,76829,930+2,162

82

90

156

94

100

113

120

103

93

142

112

105

1,317

635

679

+43

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-14︓Ooedo-Onsen Higashiyama Grand Hotel
2018

2019

6th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

84.4%

77.1%

95.6%

86.0%

91.8%

98.3%

81.5%

64.9%

75.6%

75.5%

80.6%

73.2%

82.0%

70.3%

75.2%

+4.9%

ADR (yen)

27,696

26,38932,47927,54928,60427,25630,45828,20526,49727,25027,71930,37828,44828,62828,468-160

RevPAR (yen)23,375

20,34531,04923,692

26,25826,792

24,82318,30520,031

20,573

22,341

22,23623,327

20,125

21,407+1,282

105

93

135

106

124

126

121

85

85

96

98

99

1,277

566

585

+19

Cumulativ e
total

Previous
corresponding
periodcumulative total

6th period
cumulativ e
Total

ChangeSales (million yen)

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

2019

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Number of guests

34,62552,169130,391

35,30541,19051,16059,66737,92426,261

46,61049,62675,751

640,679

284,304

Sales (million yen)

120

208

577

140

144

173

210

144

90

190

201

298

2,500

1,121

295,839 +11,535
1,135

+14

Ooedo Onsen Reit Investment Corporation 41

Financial Indices
Indices

5th period(Nov. 30, 2018)

6th period(May 31, 2019)

Ordinary income

578 mn yen

560 mn yen

Net income

577 mn yen

559 mn yen

Depreciation

421 mn yen

427 mn yen

CAPEX

206 mn yen

184 mn yen

Total assets

39,106 mn yen

38,782 mn yen

Total net assets
BPS (Total net assets/unit)

21,224 mn yen

21,204 mn yen

90,185 yen

90,097 yen

Unit price (End of each period)
Total units outstanding
Total distribution
DPU
Distribution yield
FFO
FFO per unit
FFO multiple
PER

84,200 yen

85,600 yen

235,347 units

235,347 units

580 mn yen

562 mn yen

2,466 yen

2,390 yen

5.8%
999 mn yen
4,247 yenCalculation formula

5.6% DPU (annualized)/Unit price as of end of period
987 mn yen Net income + Depreciation－profit or loss on sale of real estate
4,195 yen

9.9x

10.2x Unit price as of end of period/FFO per unit (annualized)

17.2x

18.0x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PBR

0.9x

1.0x Unit price as of end of period/Net assets per unit

ROA

1.5%

1.4% Ordinary income/Average of total assets during the period

2.9%

2.9%

2.7%

2.6% Net income/Average of total net assets during the period

Annualized
ROE
Annualized
NAV

5.4%
24,673 mn yen

NAV per unit
NAV multiple

104,836 yenInterest-bearing debt

15,991 mn yen

0.8x

5.3%
25,217 mn yen Total net assets + Total appraisal value - Total book value - Total liabilities
107,149 yen
0.8x Unit price as of end of period/NAV per unit
15,754 mn yen

LTV (book value basis)

40.9%

40.6% Interest-bearing debt/Total assets

LTV (appraisal value basis)

37.6%

36.8% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)

Operating days

183 days

182 days

Ooedo Onsen Reit Investment Corporation 42

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

6th period(period ended Nov. 30, 2018) (period ended May 31, 2019)

5th period

6th period(period ended Nov. 30, 2018)(period ended May 31, 2019)

Liabilities

AssetsCurrent liabilities

Current assets
Cash and deposits
Prepaid expenses
Other
Total current assets

2,001,208

Operating accounts payable

127,758

136,232

Short-term loans payable

6,332

66,727

Current portion of long-term loans payable

2,220,373

2,354,464

2,204,168

Non-current assets

3,941,750

90,481

87,838

Accrued expenses

10,546

7,508

26,145,944

Accumulated depreciation-1,498,792-1,926,166

Advances received

Buildings, net

24,483,958

24,219,777

Other

1,259

10,979Structures

25,982,750

350,000

7,380,750

Accured consumption taxes

Buildings

17,426-

Accounts payable - other
Income taxes payable

Property, plant and equipment

73,130Total current liabilities

972

866

82,313

15,234

258,696259,137

6,438

66,854

7,903,329

4,746,616

Non-current liabilities

Accumulated depreciation

-138

-508

Structures, net

1,120

10,470Long-term loans payable

8,610,500

11,463,000

600

600

Tenant leasehold and security deposits

1,230,724

1,230,724

Accumulated depreciation

-26

-44

Asset retirement obligations

137,354

137,754

Machinery and equipment, net

573

555

Total non-current liabilities

9,978,579

12,831,479

2,620

2,620

17,881,908

17,578,095

-268

-487

20,653,023

20,653,023-5,819-8,643-5,819-8,643

20,647,203

20,644,379

577,741

559,716

Machinery and equipment

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Total property, plant and equipment

2,352

2,133

11,988,130

11,988,130

36,476,134

36,221,067

SoftwareTotal intangible assets

157,802

157,802

4,556

3,754

162,358

161,556

Long-term prepaid expenses

17

12

103,787

185,296

Lease and guarantee deposits

10,08910,089Total investments and other assets

113,895

195,399

Total non-current assets
Total assets

Unitholders' capital
Deduction from unitholders' capital
Total deduction from unitholders'
capitalUnitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)

Investments and other assets
Deferred tax assets

Unitholders' equity

Allowance for temporary difference

Intangible assets
Leasehold right

Total liabilities
Net assets

36,752,388

36,578,023

39,106,853

38,782,191

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

577,741

559,716

21,224,944

21,204,095

21,224,944

21,204,095

39,106,853

38,782,191

Ooedo Onsen Reit Investment Corporation 43

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
Borrowing related expenses
Other
Total non-operating expenses
Ordinary income

5th period

6th period(from June 1, 2018 to November 30, 2018)(from December 1, 2018 to May 31, 2019)

1,450,211
1,450,211

1,434,986
1,434,986

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

548,074
126,075
1,751
17,2333,600
39,245735,980
699,005

10
871
882

10
10

64,35372,451
136,805
578,593

62,35275,774500
138,626
560,389

Subsidy income-

11,250Total extraordinary income-

11,250-

11,250Extraordinary income

Extraordinary losses
Loss on tax purpose reduction entry of
non-current assets-

11,250

Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward

578,593973-0
972
577,620120

560,389867
5
873
559,516
199

Unappropriated retained earnings(undisposed loss)

577,741

559,716

Total extraordinary losses

Ooedo Onsen Reit Investment Corporation 44

Debt Status
List of lenders(as of May 31, 2019)
Lender

Short
term

Long
term

Balance(mn yen)Interest rate(%)

Drawdown date

Repayment date

Security

Sumitomo Mitsui Banking Corporation

350

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

May 31, 2019

May 29, 2020

Unsecured and unguaranteed

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

3,643

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

September 1, 2016

May 29, 2020

Unsecured and unguaranteed

Sumitomo Mitsui Banking Corporation

469

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

September 1, 2016

May 31, 2023

Unsecured and unguaranteed

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

2,231

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

December 4, 2017

November 30, 2020

Unsecured and unguaranteed

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.

2,383

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

December 4, 2017

November 30, 2021

Unsecured and unguaranteed

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

3,338

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

May 31, 2019

May 31, 2022

Unsecured and unguaranteed

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

3,338

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

May 31, 2019

May 31, 2023

Unsecured and unguaranteed

Total

15,754

Ooedo Onsen Reit Investment Corporation 45

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 September 1, 2018)

Address

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

Establishment

Financial Results(Feb. 2019)

Consolidated Net Sales: 48,761 million yen
Consolidated Total Assets: 77,663 million yen
Net Assets: 21,615 million yen Reinvigorating onsen ryokan, hotels, spa-related facilities, theme parks around theDecember 5, 2017 (founded in November 2001)

Businesses

No. of Employees

1,315 (as of February 28, 2019, excluding fixed-term employees)*The total number of employees on a group-wide basis

Representative

Representative Director Mitsumasa Morita

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

culture theme. As of Feb. 28, 2019, we operate 34 onsen and spa-related facilities

Trends in number of facilities
2003

Opened Ooedo-Onsen
Monogatari in Odaiba,Tokyo

2007 - 2009

Opened Aizu, Ikaho,
Yamashitaya and Urayasu
Mangekyo, etc.

Ooedo-Onsen
Monogatari
Aizu

OdaibaOoedo-Onsen
Monogatari

2016

2017

2018

2019

Opened Kounkaku, Masuya
and Nagasaki Hotel Seifu

Opened Hotel Suiyotei,
Beppu and Gero Shin-kan

Opened Nanki-kushimotoand Hotel KisojiOpened TAOYA Shima,
Amakusa Hotel Kameya
scheduled to open

Ooedo-Onsen
Monogatari
MasuyaOoedo-Onsen
Monogatari
Gero Shin-kan

Ooedo-Onsen
Monogatari
Hotel Kisoji2010 - 2013

Opened Hotel New Shiobara, Kinugawa Kanko
Hotel, Reoma Resort and Minoh Kanko Hotel, etc.

Ooedo-Onsen
Monogatari
Minoh Kanko Hotel

Hotel New
Shiobara

40
30
20
10

6

9

12

18

20

30

24

25

27

27

27

End ofSep. 2012

End ofSep. 2013

End ofFeb. 2014

End ofFeb. 2015

End of Feb.
2016

TAOYA Shima

32

34

End ofFeb. 2018

End ofFeb. 2019

Ooedo-Onsen
Monogatari
Amakusa Hotel
Kameya0
End ofSep. 2007

End ofSep. 2008

End ofSep. 2009

End ofSep. 2010

End ofSep. 2011

End ofFeb. 2017

Ooedo Onsen Reit Investment Corporation 46

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
10 facilities (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

3,421

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
FY2014FY2015FY2016FY2017FY2018FY2019

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Higashiyama Grand Hotel

Awara

Yamashiro Onsen

Yamashitaya
Ooedo-Onsen Monogatari

Gero Shin-kan

Ooedo-Onsen Monogatari

Nagasaki Hotel Seifu

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Beppu Seifu

Ooedo-Onsen Monogatari

Amakusa
Hotel Kameya

Ooedo-Onsen Monogatari

Nikko Kirifuri(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 Monogatari

Kamoshika-so
Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari(Onsen theme park)
Tokyo Odaiba

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Tenka-taihei-no-yu
Sumpu Yume Hiroba(Onsen theme park )TAOYA Shima

Ooedo-Onsen Monogatari

Urayasu Mangekyo

Ise-shima

Ooedo-Onsen Monogatari

Minoh Onsen Minoh Spa Garden(Spa-related facilities for day visits)

Hotel New Shiobara
Hotel Kinugawa Gyoen

Ikaho
Hotel Shinko

Reoma Resort
Ooedo-Onsen Monogatari

Sendai Korona-no-yu

Aizu

Nagayama

KinosakiOoedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Hotel 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 47

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

Highquality
service＋

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 48

“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 December 1, 2018 to May 31, 2019)

Trends in average monthly occupancy rates foreach type of accommodation facility＜Meal (breakfast and dinner)＞＜Overall satisfaction ＞

100%
90%

86.9%
82.8%
79.5%

80%
70%

65.2%
60%

56.9%

50%

＜Type of services inside the facility＞＜Onsen＞

40.9%

40%
30%
20%
2017/42017/82017/122018/42018/8

2018/122019/4

Ooedo Onsen REIT

City hotels

Business hotels

Resort hotels

Ryokans

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.
Very satisfied

SatisfiedUnsatisfied

Very unsatisfied

Fair

Ooedo Onsen Reit Investment Corporation 49

Unitholders Breakdown
Top 10 unitholders

Ratio by number of unitholders＜End of 5th fiscal period＞＜End of 6th fiscal period＞

19,341 unitholders

19,447 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)

23,683

10.1%

2

Japan Trustee Services Bank, Ltd. (Trust Account)

22,298

9.5%

3

Ooedo-Onsen Mongatari Co., Ltd.

9,246

3.9%

4

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

8,257

3.5%

5

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

5,065

2.2%

6

Morgan Stanley MUFG Securities Co., Ltd.

2,462

1.0%

7

DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO

1,841

0.8%

8

JPMorgan Securities Japan Co., Ltd.

1,766

0.8%

9

DEUTSCHE BANK AG LONDON 610

1,303

0.6%

10

BNYM SA/NV FOR BNYM FOR BNY GCM CLIENT ACCOUNTS MLSCB RD

1,200

0.5%

77,121

32.8%

Raito by number of investment units

Individuals
Financial institutions(Incl. securities companies)

Other domestic corporations
Foreign corporations and individuals

Total

Ooedo Onsen Reit Investment Corporation 50

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 May 31, 2019 (record date), end of 6th 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 51

Track Record of Investment Unit Price
Change in investment unit price and trading volume(yen)
100,000(units)35,00028,00090,00021,00080,00014,00070,0007,000

60,000August2016年8⽉
2016

November
2016年11⽉
2016

February
2017年2⽉
2017May
2017年5⽉
2017

August2017年8⽉
2017

November
2017年11⽉
2017

出来⾼VolumeFebruary
2018年2⽉
2018May
2018年5⽉
2018

August20182018年8⽉

November
2018年11⽉
2018

February2019

2019年2⽉

0May
2019年5⽉
2019

投資⼝価格
Stock
price

Relative comparison of investment unit price and TSE REIT index(yen)
100,000

90,00080,00070,00060,000August2016年8⽉
2016

November

2016年11⽉
2016

February

2017年2⽉
2017May

2017年5⽉
2017

August2017年8⽉
2017

November

2017年11⽉
2017
投資⼝価格
Stock
price

February

2018年2⽉
2018May

2018年5⽉
2018

August2018年8⽉
2018

November

2018年11⽉
2018

February

2019年2⽉
2019May

2019年5⽉
2019

東証リート指数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
Sponsor

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

Ooedo-Onsen Monogatari Co., Ltd.

Investment Corporation⑥⑤

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.
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

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

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 May 31, 2019)

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