Ooedo Onsen Reit Investment Corporation
Results of 11th Fiscal Period ended November 30, 2021

Presentation Material
January 21, 2022
(Asset Manager) Ooedo Onsen Asset Management Co., Ltd.

Table of Contents
I.

Executive Summary
Executive Summary

II.

Management Highlights
1. Prolonged impact of COVID-19 and measures for overcoming it(1) Status of Lease Business(2) Status of Debt Financing(3) Sale of Nagasaki Hotel Seifu(4) Points for future improvement of financing conditions
2. Operational status of facilities and KPI
3. Status of appraisal value

III.

Market Environment

36

6
7
8
9
11
14

16
17
18
19
20
21

ESG Initiatives
Rent Structure
Operating Results for the Entire Portfolio
Introduction of Properties
Financial Indices
Balance Sheet
Statement of Income
Debt Status
Ooedo-Onsen Monogatari Group“Ooedo Business Model” with Stable Operations and Sustainable Growth
Measures Against COVID-19 Taken by the Ooedo-Onsen Monogatari Group
Unitholders Breakdown
Track Record of Investment Unit Price
Governance Structure
Overview of Investment Corporation
Overview of Asset Manager

Status of Portfolio and Business Results by Facility
Portfolio Data
Operating Results of Individual Properties

V.

Market Environment

VII. Appendix

Financial Report and Forecast Income and Expenditure
Financial Status
Scheduled Refinancing for the Meanwhile
Result for the 11th Fiscal Period ended November 2021
Forecast for the 12th Fiscal Period ending May 2022
Forecast for the 13th Fiscal Period ending November 2022
Trends in DPU

IV.

VI.
3

23
25

Future Strategic Policies
Key Policies in Forthcoming Periods
External Growth Strategy
Internal Growth Strategy
Financial Strategy and Basic Policy
Investing Targets and Building of the Portfolio
Future Growth Targets* The photo on the front cover is an open-air bath at Kinugawa Kanko Hotel.

28
29
31
32
33
34

Ooedo Onsen Reit Investment Corporation 1

40
41
42
43
53
54
55
56
57
59
61
62
63
64
65
66

I. Executive Summary

Ooedo Onsen Reit Investment Corporation 2

Executive Summary (1) - Securement of rent, financial measures for overcoming
COVID-19 and increase in debt cost

10th period

11th period

12th period

13th period(ended May 31, 2021)
Actual(ended November 30, 2021)
Actual(ending May 31, 2022)
Forecast(ending November 30, 2022)

DPU

1,970 yen

1,686 yen

1,585 yen

1,620 yen

LTV

33.4%

32.9%

(appraisal value basis)

Forecast

 KPI of tenants is on a recovery trend. Full securement of fixed rent
 Refinancing responding to the deterioration of the debt financing
environment
・Collateralization of loans for future financial stabilization
・Increase in interest expenses and borrowing-related expenses
・Shortening the refinancing period while the environment is uncertain
・Support by main financing bank (SMBC)
 Securement of cash on hand and lowering of LTV in preparation forrefinancing risks for the time being
・Sale of Nagasaki Hotel Seifu - Sale at a price exceeding the book value (below
the appraisal value)
Ooedo Onsen Reit Investment Corporation 3

Executive Summary (2) - Tenant performance is on a rapid recovery trend since
October 2021
Average occupancy rate by industry for the hotel sector
Declaration of
second state of emergency

Declaration of
third state of emergency

Declaration of
fourth state of emergency

100%
Certain owned facilities
were closed

Owned facilities
were closed

80%

79.3%

60%

56.9%
50.6%
46.0%
41.2%

40%

34.1%

20%

0%
2021/12021/22021/3
Ooedo Onsen REIT

2021/4City hotels

2021/52021/6
Business hotels

2021/72021/82021/9Resort hotels

Ryokans

Overall

2021/102021/11(Note 1) All facilities held by the Investment Corporation were temporarily closed from April 2020 due to the spread of COVID-19.
(Note 2) The state of emergency is the state of emergency in Tokyo.
Source: Data on city hotels, business hotels, resort hotels, ryokan and overall are compiled by the asset manager based on Overnight Travel Statistics Survey, Japan Tourism Agency.

Ooedo Onsen Reit Investment Corporation 4

II. Management Highlights
1. Prolonged impact of COVID-19 and measures forovercoming it
2. Operational status of facilities and KPI
3. Status of appraisal value

Ooedo Onsen Reit Investment Corporation 5

(1) Status of Lease Business Full securement of fixed rent
 Rent commitment from tenants (sponsor), recapitalization and establishment of financial framework of sponsor
securing it
・ Operational status of tenants is improving → To secure stable fixed rent bearing capacity
・ Expectations over the subsidence of COVID-19 in the future and possibility of the recovery of variable rent in the medium term・ Further progress in cost rationalization under the COVID-19 pandemic leading to the lowering of break-even sales (RevPAR) of tenants

Of which, variable rent portion

Rent structure(million yen)

1,400
1,200

(million yen)

(yen)

120

30,000Lowering of RevPAR, the standard
for occurrence of variable rent,with the review of cost structure

100

1,000

25,00080

20,00060

15,00040

10,000

20

5,000

800
600
400
200
0
6th
period(Actual)0
7thperiod(Actual)

8th
period(Actual)9th
period(Actual)Fixed rent

10th
period(Actual)

11th
period(Actual)Variable rent

12th
13th
periodperiod(Forecast) (Forecast)0
6th
period(Actual)

7th
period(Actual)

8th
period(Actual)9th
period(Actual)

10th
period(Actual)Variable rent

11th
period(Actual)

12th
period(Forecast)

13th
period(Forecast)

RevPAR

Ooedo Onsen Reit Investment Corporation 6

(2) Status of Debt Financing
 Deterioration of loan environment amid the prolonged COVID-19 crisis→ Deterioration of credit environment for general hotel sector→ Prolonged impact of COVID-19 at sponsors→ Deterioration of the environment of loan refinancing against the backdrop of a sense of
uncertainly towards the future Implementation of refinancing in August and November
・ Increase in borrowing-related expenses and shortening of loan period (the loan period for the time being will be until February 2022)→ Minimization of cost increase
・ Strong commitment by major banks (SMBC share 33% → 38%)
・ Strengthening of financial stability through voluntary collateralization (November) (Provisional registration of revolving mortgages)→ There is no issue on the compliance of financing covenants, and fundamentals as well as the conditions after the recovery ofbusiness conditions are expected to improve in the future

Trends in non-operating expenses(million yen)

(yen)

240

1,000

200

BeforeCOVID-19

800

160

600

120
400

80

200

40

0

0
6th period(My 31, 2019)

7th period(Nov. 30, 2019)

Interest expenses

8th period(May 31, 2020)

9th period(Nov. 30, 2020)

Borrowing-related expenses

10th period(May 31, 2021)

11th period(Actual)Other (collateralization expenses, etc.)

12th period(Forecast)

13th period(Forecast)Non-operating expenses per unit

Ooedo Onsen Reit Investment Corporation 7

(3) Sale of Nagasaki Hotel Seifu - Measures for Reduction of Financial Risk
 Points leading to disposition
・ Securement of cash on hand and compression of borrowings in preparation for therisk of deterioration of debt financing environment
・ Offering from buyers taking prompt actions and showing high certainty among
multiple candidates
・ Relatively small facilities in portfolio
・ Presented a price which is the same as or higher than the book value despite alarge discount from the appraisal value
・ Evidence of liquidity of owned properties

 Overview of Disposition
Name

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Address

523 Otorimachi, Nagasaki-shi, Nagasaki

Land area(public offering)
Building area(public offering)

6,766.87 m2
11,114.69 m2

Type of sale

Disposition through trust beneficiary rights

Disposition date

January 13, 2022

Sales price

1,640 million yen

Appraisal value

2,570 million yen

Book value(end of November 2021)

1,603 million yen

Impact on distributions for 12th fiscal period• Previous forecast 1,799 yen
Revised forecast 1,585 yen• Increase or decrease -214 yen• Rate of increase or decrease -11.9%• Main factors
1. Decrease in operating revenue due todisposition(fixed rent of disposed properties
74→17 million yen)
2. Net gain on sale after the deduction of sales
expenses 10 million yen
Ooedo Onsen Reit Investment Corporation 8

(4) Points for future improvement of financing conditions
 Conservative financial indicators (end of 11th period)
・LTV (appraisal value basis) 32.9%

・Liquidity of owned assets verified in the sale of Nagasaki property

・DSCR 4.5・Expectations for rapid recovery of tenant performance and recovery of variable rent

Trends in LTV(%)

LTV(book value basis)

LTV(appraisal value basis)

50.0
45.0
40.0

44.0

42.2
39.8

38.5

38.2

40.9

40.6

40.3

40.0

38.6

42.9

35.0
30.0

39.9

1st
Nov. 2016

2nd
May 2017

3rd
Nov. 2017

39.1

4th
May 2018

37.6

36.8

36.3

35.9

5th
Nov. 2018

6th
May 2019

7th
Nov. 20198th
May 2020

4.5

4.3

4.5

7th
Nov. 20198th
May 2020

38.4

38.1

33.8

33.4

32.9

9th
Nov. 2020

10th
May 2021

11th
Nov. 2021

4.6

4.5

10th
May 2021

11th
Nov. 2021

Trends in DSCR
8.0
6.0

5.0

5.1

5.0

4.6

4.0

3.8

3.6

2.0
0.0

1st
Nov. 2016

2nd
May 2017

3rd
Nov. 2017

4th
May 2018

5th
Nov. 2018

6th
May 2019

9th
Nov. 2020(Note) DSCR is calculated based on (operating income + depreciation + amortization of leasehold + gain (loss) on sale of real estate) / (scheduled repayments + interest expenses).
Payment before maturity, the amount paid off on due date, and reductions due to refinancing are excluded.

Ooedo Onsen Reit Investment Corporation 9

II. Management Highlights
1. Prolonged impact of COVID-19 and measures forovercoming it
2. Operational status of facilities and KPI
3. Status of appraisal value

Ooedo Onsen Reit Investment Corporation 10

Operational status of facilities and KPI
Despite the significant impact of stay-at-home requests such as the state of emergency, occupancy raterecovered rapidly since last autumn.
Room occupancy of accommodation facilities
First stateofemergency

100%

Third stateofemergency

Second stateof emergency

Go To Travel Campaign

Fourth state of
emergency(1) Ooedo-Onsen Monogatari Reoma Resort(Note 3)2020/4/26～6/30, 2021/1/19～3/18

Facilities were closed

Facilities were closed

(1)

(1)

86.9%
83.4%

84.9%

(2)

73.9%

(5) Ooedo-Onsen Monogatari Toi Marine Hotel

(5)

(5)

2020/4/14～6/30, 2021/1/19～3/18

(6)

(6)

(6) Ooedo-Onsen Monogatari Awara(7)(7) Ooedo Onsen Monogatari Kamoshika so

(8)

49.4%

(10)

2020/4/6～6/30, 2021/1/19～3/18

(9)

54.4%

(11)
(12)
(13)

2020/4/26～6/30, 2021/1/19～3/18

(8)

54.6%

(9)

40%

(8) Ooedo-Onsen Monogatari Ikaho

52.1%

(10)

Facilities were closed

(11)

(11)

58.6%

(13)

2020/4/29～6/30, 2021/1/19～3/18(10) Ooedo-Onsen Monogatari Nagasaki Hotel
Seifu (Note 3)
2020/4/26～6/19, 2021/1/26～3/7

34.7%(11) Ooedo-Onsen Monogatari Kounkaku (Note 3)

29.6%

(14)

2020/4/29～6/30, 2021/1/19～3/18(9) Ooedo-Onsen Monogatari Kimitsu-no-mori

47.0%

(12)

42.3%

(14)

35.7%

2020/4/27～6/30,
2021/1/19～3/18, 4/1～5/31(12) Kinugawa Kanko Hotel (Note 3)

31.6%

29.5%

2020/4/25～6/30, 2021/1/19～3/18(13) Ooedo-Onsen Monogatari Kinosaki (Note 3)

17.9%

20%

(4) Ooedo Onsen Monogatari Atami
2020/4/25～6/19, 2021/1/26～3/7

(4)

(7)

62.4%

2020/4/28～6/30, 2021/1/19～3/18

79.3%

(3)

(4)

60%

2020/4/23～5/21, 2021/2/8～3/7(3) Ito Hotel New Okabe

(2)

(3)

80%

(2) Ooedo-Onsen Monogatari Ise-shima

2020/4/26～6/19, 2021/2/8～3/7

16.1%(14) Ooedo-Onsen Monogatari Higashiyama
Grand Hotel
2020/4/29～6/30, 2021/1/19～3/18

6.0%

1.1%
0%

January
2020

February

March

April

May

June

July

1.5%
AugustJanuary
September October November December
2021

February

March

April

May

June

July

AugustSeptember October November(Note 1) 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.
(Note 2) The state of emergency is the state of emergency in Tokyo.
(Note 3) Facilities operated only on weekends (for customers who checked in on Friday, Saturday, and Sunday) from May 31 to July 1, 2021

Ooedo Onsen Reit Investment Corporation 11

Operational status of facilities and KPI
Sales

Room occupancy rate
100%

(million yen)
6,000

Average room occupancy rate on business days
Room occupancy rate

80%

69.8%
53.3%

60%
40%

40.2%
51.9%

20%
0%

9th
(Nov. 2020)

50.7%

10th
(May 2021)

4,000
3,000

28.1%
8th
(May 2020)

2,473

2,000
1,000
0

11th
(Nov. 2021)

ADR

8th
(May 2020)

9th(Nov. 2020)

10th(May 2021)

11th(Nov. 2021)

RevPAR(yen)
40,000(yen)
40,00032,00032,00024,000

4,686
4,106

60.6%
55.9%

4,888

5,000

30,512
27,22029,88927,33024,00015,21516,00016,000

8,000

8,000

15,835

13,856
8,398

0

8th
(May 2020)

9th(Nov. 2020)

10th(May 2021)

11th(Nov. 2021)(Note) “Average room occupancy rate on business days” is calculated based on the number of rooms that can be soldexcluding the number of rooms on the day when the building is closed due to facility inspection, etc.

0

8th(May 2020)

9th(Nov. 2020)

10th(May 2021)

11th(Nov. 2021)

Ooedo Onsen Reit Investment Corporation 12

II. Management Highlights
1. Prolonged impact of COVID-19 and measures forovercoming it
2. Operational status of facilities and KPI
3. Status of appraisal value

Ooedo Onsen Reit Investment Corporation 13

Status of appraisal value
Cap rate remained flat. Unrealized gain increased despite a slight decrease due to the reviewof the unit price of CAPEX for some properties.
(million yen)
Direct capitalization method

Discounted cash flow method

Appraisal value (million yen)
Property
No.

Property nameAcquisition
Book valuePrice(million yen)(million yen)

10th
periodMay 31,2021

11th
periodNov. 30,
2021

Unrealized
profits andloses
Change (million yen)

Direct Cap Rate
10th
periodMay 31,2021

Discount Rate

11th
period valuation
Nov. 30,2021

10th
periodMay 31,
2021

Terminal Cap Rate

11th
period valuation
Nov. 30,2021

10th
periodMay 31,2021

11th
period valuation
Nov. 30,
2021

S-1

Ooedo-Onsen Monogatari
Reoma Resort

9,756

9,523

8,850

8,800

-50

-723

6.0%

6.0%

-

5.8%

5.8%

-

6.2%

6.2%

-

S-2

Ooedo-Onsen MonogatariIse-shima

3,656

3,255

3,830

3,830

-

+574

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-3

Ito Hotel New Okabe

2,657

2,539

2,810

2,800

-10

+260

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-4

Ooedo-Onsen Monogatari
Atami

2,997

2,743

3,190

3,180

-10

+436

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

1,910

1,756

2,020

2,010

-10

+253

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-6

Ooedo-Onsen Monogatari
Awara

1,901

1,824

1,980

1,980

-

+155

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

1,222

1,163

1,260

1,260

-

+96

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-8

Ooedo-Onsen Monogatari
Ikaho

1,299

1,250

1,370

1,370

-

+119

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

819

825

859

859

-

+33

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

1,637

1,603

2,570

2,570

-

+966

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-11

Ooedo-Onsen Monogatari
Kounkaku

1,040

997

1,220

1,220

-

+222

5.5%

5.5%

-

5.3%

5.3%

-

5.7%

5.7%

-

S-12

Kinugawa Kanko Hotel

3,870

3,537

6,130

6,130

-

+2,592

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-13

Ooedo-Onsen Monogatari
Kinosaki

2,084

2,116

2,650

2,650

-

+533

5.4%

5.4%

-

5.2%

5.2%

-

5.6%

5.6%

-

S-14

Ooedo-Onsen Higashiyama
Grand Hotel

1,230

1,160

1,470

1,470

-

+309

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

36,082

34,29940,20940,129-80+5,829

－

－

－

－

－

－

Total

－

－

Ooedo Onsen Reit Investment Corporation 14－

III. Financial Report andForecast Income and Expenditure

Ooedo Onsen Reit Investment Corporation 15

Financial Status: Implementation of Refinancing
Amid the COVID-19 pandemic, we took out short-term loans for refinancing.
LTV decreased further (38.1% on a book value basis and 32.9% on an appraisal value basis) due to scheduled
repayments and the appropriation of some cash reserves for early amortization.
Breakdown of lenders

LTV

Number of syndicate lenders: 11

LTV (book value basis)< Breakdown of others, which stand at 18.0% >LTV (appraisal value basis)

(%)
39.0

38.1
36.7

The Nomura
Trust andBanking
4.6%

36.6

36.0
32.9
33.0

32.2

31.8

The Towa Bank 3.4%

Others18.0%

San ju San Bank
12.7%

The Iyo Bank 3.2%
The Tochigi Bank 3.1%

Sumitomo Mitsui
Banking 38.6%

Fukoku Mutual Life Insurance 3.1%
The Bank of Fukuoka 2.6%

30.0

11th
Nov. 2021(Actual)

12th
May 2022(Forecast)

The Juhachi-Shinwa Bank 2.5%

13th
Nov. 2022(Forecast)

Ratio of long-term borrowings

Sumitomo Mitsui
Trust Bank
12.8%

Overview of maturity(%)(million yen)

100.0

10,00089.7

ORIX Bank
13.4%

Long-term borrowings

Short-term borrowings

8,000
80.0

6,000

63.6

4,000

60.0

40.0

Average remaining duration
10th period: 0.9 years→ 11th period: 0.6 years

48.2

9th
Nov. 2020(Actual)

10th
May 2021(Actual)

11th
Nov. 2021(Actual)

2,000
0

12th
May 2022

13th
Nov. 2022

14th
May 2023

15th
Nov. 2023

Ooedo Onsen Reit Investment Corporation 16

Scheduled Refinancing for the Meanwhile
Continuing to monitor tenants' operating and financial conditions and sharing information with lenders
to complete refinancing.
List of borrowings due within a year (as of November 30, 2021)
Repayment dateCategory

Balance(mm yen)February 28, 2022

Short-term

4,873

February 28, 2022

Short-term

230

Sumitomo Mitsui Banking Corporation

February 28, 2022

Short-term

2,190

Sumitomo Mitsui Banking Corporation
San ju San Bank, Ltd.
The Tochigi Bank, Ltd.

Fukoku Mutual Life Insurance Company
The Bank of Fukuoka, Ltd.
The Juhachi-Shinwa Bank, Ltd.

3,166

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
ORIX Bank Corporation
San ju San Bank, Ltd.
The Towa Bank, Ltd.

The Iyo Bank, Ltd.
The Nomura Trust and Banking Co., Ltd.
The Bank of Fukuoka, Ltd.
The Juhachi-Shinwa Bank, Ltd.

May 31, 2022

Long-term

LenderSumitomo Mitsui Banking Corporation
ORIX Bank Corporation
San ju San Bank, Ltd.

Initial drawdown date, etc.

Sumitomo Mitsui Trust Bank, Limited
The Nomura Trust and banking Co., Ltd.

August 31, 2021

August 31, 2021

November 30, 2021

May 31, 2019

Ooedo Onsen Reit Investment Corporation 17

Result for the 11th Fiscal Period ended November 2021
Revenue and profits decreased from the previous period due to the decrease in insurance income, etc. andincrease in borrowing and collateralization-related expenses.
DPU increased 31 yen from the revised forecast and decreased 284 yen from the previous period.
(thousand yen)
Item
Operating revenue

10th period

11th period(Actual)(Actual)11th period
Difference

Component
Component
1,348,319
1,344,058
ratio
ratio

Difference(Forecast as of
Nov. 25, 2021)-4,2601,344,058-

Main factors for increase/decrease fromforecast (Note)
Lease operations revenue gain/loss
・ Decrease in selling, general and administration(lawyer expenses, etc.)

Primary rent

1,230,417

1,230,417-

1,230,417-

Fixed rent

100.0% 1,230,417

100.0% 1,230,417-

1,230,417

-

-

-

-

-

Ordinary income

112,310

112,434+124

112,434-

Others

5,591

1,206

-4,3851,206-

Main factors for increase/decrease
from previous fiscal period

Lease operations
revenue gain/loss

771,246

770,023-1,222770,088-64

Operating income

593,501

589,408-4,092585,246+4,162

Ordinary income

460,266

393,492-66,773

386,380+7,111

Net income

459,331392,536-66,794

385,380+7,155

Variable rent
Secondary rent

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

FFO per unit (yen)NOI
Depreciation
CAPEX

0.0%

-

4,236
463,633

0.0%

4,236
396,795-66,8384,236
389,499+7,295

235,347

235,347-

235,347

-

1,970

1,686

-284

1,655

+31

18

18

+0

18

-

3,860

3,589

-271

3,552

+37

1,218,997
449,227
99,281

1,222,312
452,288
146,433+3,314+3,06047,152

1,222,310
450,745
146,433+1+1,542-(Note) As for the signs for each item of main factors for increase/decrease, “+” indicates those that lead to the increase in distribution
per unit and “-” indicates those that lead to the decrease in distribution per unit. The same applies hereinafter.

Operating income
・ Decrease in other non-operating expenses(collateralization expenses, etc.)

・ Decrease in other operating revenue(Insurance revenue)
・ Decrease in tax and public charge
・ Decrease in other expenses(Repairs covered by insurance, etc.)
・ Increase in depreciation(thousand yen)-64
＋3,616+4,162+2,424+7,111(thousand yen)
-4,385+2,785+3,580-3,060

Lease operations revenue gain/loss-1,222・Increase in selling, general and administration(fees for receiving reviewed ER, etc.)+2,870Operating income-4,092・ Increase in interest expenses-5,987・ Increase in borrowing related expenses-19,220・ Increase in other non-operating expenses(collateralization-related expenses)-37,586

Ordinary income

Main financial indicators-66,773(million yen)

Total assets

36,926

Interest-bearing debt

14,069Total liabilities

15,904

Total net assets

21,021

LTV (book value basis)
NAV per unit

38.1%
114,089 yen

Ooedo Onsen Reit Investment Corporation 18

Forecast for the 12th Fiscal Period ending May 2022
Revenue and profits are expected to decrease from the previous period due to the sale of owned property(Nagasaki Hotel Seifu), expenses for General Unitholders’ Meeting, etc.
DPU are forecasted to decrease 101 yen from the previous fiscal period.
(thousand yen)
Item
Operating revenue

11th period

12th period(Actual)(Forecast)

Variable rent
Secondary rent
OthersDifference

Component
Component
1,344,058
1,285,690
ratio
ratio

1,230,417

Primary rent
Fixed rent

12th period

100.0% 1,230,417
0.0%-

1,172,520
100.0% 1,172,520

Difference(Forecast as ofDec. 24, 2021)-58,368

1,285,690+0-57,896

1,172,520--57,896

1,172,520

-

-

-

-

-

112,434

101,888-10,546

101,888+0

1,206

11,281+10,074

11,281+0

0.0%

Lease operations
revenue gain/loss

770,023

728,417-41,606

728,417+0

Operating income

589,408

534,446-54,962

534,456-9

Ordinary income

393,492

369,792-23,700

369,802-9

Net income

392,536

368,792-23,744368,802

-9

4,236

4,236

-

4,236

-

396,795

373,024-23,770373,024+0

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

235,347

235,347-

235,347

-

1,686

1,585

-101

1,585

-

18

18

-

18

-

3,589

3,442

-147

3,442

+0

1,222,312

1,169,830-52,481

1,169,830-

Depreciation

452,288441,413-10,875

441,413-

CAPEX

146,433

236,687+90,253

236,687-(Excess cash distribution
per unit)

FFO per unit (yen)NOI

Main factors for increase/decrease fromforecast(thousand yen)・ Decrease in fixed rent
(approximately four and a half months for Nagasaki)・ Decrease in secondary rent
(approximately four and a half months for Nagasaki)
・ Gain on sale of Nagasaki+10,074

・ Decrease in tax and public charge(Sale of Nagasaki, etc.)
・ Decrease in depreciation (Sale of Nagasaki, etc.)+10,875

Lease operations revenue gain/loss
・ Decrease in asset management fees
(Sale of Nagasaki)
・ Expenses for General Unitholders’ Meeting
・ Increase in other selling, general and administration(non-deductible consumption taxes, etc.)

Operating income
・ Decrease in other non-operating expenses(collateralization-related expenses)

Ordinary income

Main financial indicators-57,645-10,546+6,100-41,606+2,215-6,000-9,570-54,962+32,889-23,700(million yen)

Total assets

36,094

Interest-bearing debt

13,263

Total liabilities

15,101

Total net assets

20,993

LTV (book value basis)

36.7%

Ooedo Onsen Reit Investment Corporation 19

Forecast for the 13th Fiscal Period ending November 2022
Revenue will decrease and profits will increase from the previous period due to the decrease infinance related expenses despite the reflection of the full-period impact of the sale of Nagasaki
Hotel Seifu. DPU are expected to increase 35 yen from the previous fiscal period.
(thousand yen)
Item
Operating revenue

12th period(Forecast)Component
ratio

Primary rent

13th period(Forecast)
1,285,690

Component
ratio

1,172,520

Main factors for increase/decrease
from previous fiscal period

Difference
1,255,815-29,875

1,155,186-17,333

Fixed rent

100.0%

1,172,520

100.0%

1,155,186-17,333

Variable rent

0.0%

-

0.0%

-

-

100,353-1,534

Secondary rent

101,888

Others

11,281275-11,006

Lease operations
revenue gain/loss

728,417

698,538-29,878

Operating income

534,446

521,670-12,776

Ordinary income

369,792378,201+8,409Net income

368,792

377,201+8,409

4,236

4,236

-

Total distribution

373,024

381,262+8,237

Total units outstanding

235,347

235,347-

Excess cash distribution

DPU (yen)(Excess cash distribution per unit)

FFO per unit (yen)

1,585

1,620

+35

18

18

-

3,442

3,489

+47

1,169,830

1,142,588-27,242

Depreciation

441,413444,049+2,636

CAPEX

236,687

180,000-56,687

NOI・Decrease in fixed rent (full period impact ofNagasaki)・Decrease in secondary rent
(full period impact of Nagasaki)・Absence of gain on sale of Nagasaki
・Decrease in other expenses(Asbestos monitoring fee)・Increase in depreciation

Lease operations revenue gain/loss
・Decrease in asset management fees
(Sale of Nagasaki)・Absence of expenses for General Unitholders’Meeting・Decrease in other selling, general andadministration(non-deductible consumption taxes, etc.)

Operating income
・Decrease in finance-related expenses
・Decrease in other non-operating expenses(registration-related expenses)

Ordinary income

Main financial indicators(thousand yen)
-17,333-1,534-11,006+1,514-2,636-29,878+951+6,000+10,151-12,776+15,856+4,696+8,409(million yen)

Total assets

35,794

Interest-bearing debt

13,088

Total liabilities

14,797

Total net assets

20,997

LTV (book value basis)

36.6%

Ooedo Onsen Reit Investment Corporation 20

Trends in DPU
The main factors for the decrease in distributions are the absence of variable rent and the increase inborrowing related expenses - Both of them are temporary factors until the subsidence of COVID-19.
(yen)

2,500

2,328

2,341

2,340

2,361

2,335

2,000

1,996

2,323
2,086

2,031

1,950

1,985

1,585

1,620

2,051

1,970
1,686

1,500

1,000

Assume that borrowing related expenses further
normalized
Assume that variable rent with the same level asthat in the 8th period occurred
Distributions (actual and assumption)

500

0
8th period(Actual)

9th period(Actual)10th period(Actual)11th period(Actual)12th period(Forecast)

13th period(Forecast)

Ooedo Onsen Reit Investment Corporation 21

IV. Status of Portfolio andBusiness Results by Facility

Ooedo Onsen Reit Investment Corporation 22

Portfolio Data (1)Portfolio List
Property
No.

Property nameLocation

Building age Number of(years)rooms

Roomoccupancy
rate(Note 1)

S-1
S-2
S-3
S-4
S-5
S-6
S-7
S-8
S-9
S-10
S-11
S-12
S-13
S-14

KagawaPrefecture
Mie
Ooedo-Onsen Monogatari Ise-shima
Prefecture
Shizuoka
Ito Hotel New Okabe
Prefecture
Shizuoka
Ooedo-Onsen Monogatari Atami
Prefecture
Shizuoka
Ooedo-Onsen Monogatari Toi Marine Hotel
Prefecture
Fukui
Ooedo-Onsen Monogatari Awara
Prefecture
Tochigi
Ooedo-Onsen Monogatari Kamoshika-so
Prefecture
Gunma
Ooedo-Onsen Monogatari Ikaho
Prefecture
Chiba
Ooedo-Onsen Monogatari Kimitsu-no-moriPrefecture
NagasakiOoedo-Onsen Monogatari Nagasaki Hotel Seifu
Prefecture
Miyagi
Ooedo-Onsen Monogatari Kounkaku
Prefecture
Tochigi
Kinugawa Kanko Hotel
Prefecture
Hyogo
Ooedo-Onsen Monogatari Kinosaki
Prefecture
Fukushima
Ooedo-Onsen Higashiyama Grand Hotel
Prefecture
Ooedo-Onsen Monogatari Reoma Resort

Total/Average(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)30.4/30.7

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

NOI yield(Note 2)After
depreciation
NOI yield

PML(Note 2)

241

37.8%

9,756

8,800

314

6.5%

4.6%

1.9/1.6%

41.7

83

63.2%

3,656

3,830

107

5.9%

3.0%

14.2%

31.1

73

48.4%

2,657

2,800

73

5.5%

3.4%

12.0%

47.9

76

61.7%

2,997

3,180

93

6.2%

4.0%

12.6%

47.2

64

52.9%

1,910

2,010

54

5.7%

2.4%

14.9%

40.3

95

59.7%

1,901

1,980

65

6.9%

4.6%

14.9%

25.8

60

57.1%

1,222

1,260

34

5.7%

3.5%

3.0%

38.1

40

78.6%

1,299

1,370

35

5.5%

3.4%

1.0%

25.7

41

70.8%

819

859

23

5.8%

3.6%

4.8%

39.4

100

48.9%

1,637

2,570

74

9.1%

6.5%

6.4%

56.0

98

37.2%

1,040

1,220

41

8.0%

3.7%

3.9%

40.3

172

42.9%

3,870

6,130

172

9.0%

5.6%

2.1%

53.1

103

56.6%

2,084

2,650

79

7.7%

5.6%

11.8%

57.2

123

57.0%

1,230

1,470

51

8.4%

3.8%

4.6%

40.0

1,369

50.7%

36,08240,129

1,222

6.8%

4.3%

2.7%

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

Room occupancy rate is for the 11th period ended November 30, 2021, of the investment corporation.
(Average) NOI yield and (average) after depreciation NOI yield indicate annualized figures.
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.
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.
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 23

Portfolio Data (2)The investment ratio by facility remains unchanged.
The investment ratio by region is distributed across the country, excluding Hokkaido and Okinawa.
Investment ratio by facility
Acquisition price basis
2.9% 2.3%
3.4%
3.4%
3.6%
4.5%
27.0%
5.3%
5.3%
10.7%
5.8%
7.4%
10.1%
8.3%

Before the dispositionof Nagasaki

Rent income basis (Note)

Appraisal value basis

3.0%
3.5%
3.6%
3.8%

2.4%

28.3%

5.5%
5.5%
6.1%

11.2%

7.7%
8.7% 10.6%

After the dispositionof Nagasaki

3.1%
3.4%
3.7%
4.9%

3.0% 2.1%

21.9%
5.0%
15.3%
6.4%
6.6%
7.0%
9.5%
7.9%

Before the dispositionof Nagasaki

3.2%
3.4%
3.6%
3.9%

2.3%

5.3%
5.4%

2.9% 2.0%
3.0%
3.4%
4.2%
4.4%
25.6%

23.4%

3.1%2.1%
3.2%
3.6%
4.5%

5.3%
6.0%
14.2%
6.1%
6.4%
8.8%
7.6%

16.3%

7.1%
7.5%
8.5% 10.2%

After the dispositionof Nagasaki

Before the dispositionof Nagasaki

4.7%

27.3%

5.7%
6.4%
15.1%
6.8%
8.1% 9.4%

After the dispositionof Nagasaki(Note) Calculations were made based on the primary rent.

Investment ratio by region
Acquisition price basis
6.6%
4.5%

27.0%
5.8%
5.3%

6.3%

20.0%
31.1%

28.3%

20.9%

6.1%
5.5%

32.6%

Tohoku
Kanto
Koushinetsu
Tokai
Hokuriku
Kinki
Shikoku
KyushuOoedo-Onsen Monogatari Reoma Resort

Ooedo-Onsen Monogatari Kimitsu-no-moriOoedo-Onsen Monogatari Ise-shima

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Ito Hotel New Okabe

Ooedo-Onsen Monogatari Kounkaku

Ooedo-Onsen Monogatari Atami

Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari Toi Marine Hotel

Ooedo-Onsen Monogatari Kinosaki

Ooedo-Onsen Monogatari Awara

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

Ooedo-Onsen Monogatari Kamosika-so
Ooedo-Onsen Monogatari Ikaho

Before the dispositionof Nagasaki

After the dispositionof Nagasaki

Ooedo Onsen Reit Investment Corporation 24

Operating Results of Individual Properties (1)The GoTo campaign was conducted in the second half of the same period of the previous year, and whilesales decreased at many facilities in the 11th fiscal period compared with the previous corresponding period,
the result exceeds that of the previous corresponding period at some facilities.
1. Operating results of the accommodation sector
Room occupancy rate (%)
Property
No.

Property name

Previous
corresponding 11th period
periodaverageaverageChangeADR (yen)Previous
corresponding 11th period
periodaverageaverage

RevPAR (yen)ChangePrevious
corresponding 11th period
periodaverageaverage

Sale (million yen)
ChangePrevious
corresponding 11th period
periodChangeS-1

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

49.0

37.8

-22.9%

35,83533,196-7.4%

17,55912,548-28.5%

904

672-25.6%

S-2

Ooedo-Onsen Monogatari Ise-shima

64.9

63.2

-2.6%

31,98029,078-9.1%

20,755

18,377-11.5%

365318-12.9%S-3

Ito Hotel New Okabe

46.3

48.4

+4.5%

28,72324,530-14.6%

13,298

11,872-10.7%

294

265

-9.9%

S-4

Ooedo-Onsen Monogatari Atami

62.2

61.7

-0.8%

31,31625,552-18.4%

19,47815,765-19.1%

303

246-18.6%

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

52.1

52.9

+1.5%

31,571

28,347-10.2%

16,44814,995

-8.8%

212

192

-9.6%

S-6

Ooedo-Onsen Monogatari Awara

44.6

59.7 +33.9%

28,55926,913-5.8%

12,737

16,067 +26.1%

246

312 +26.9%

S-7

Ooedo-Onsen Monogatari Kamoshika-so

41.0

57.1 +39.3%

26,91925,731-4.4%

11,036

14,692 +33.1%

137

179 +29.8%

S-8

Ooedo-Onsen Monogatari Ikaho

66.0

76.8 +16.4%

28,517

26,610-6.7%

18,821

20,436

+8.6%

156

167

+7.5%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-mori

62.7

70.8 +12.9%

27,722

24,325-12.3%

17,381

17,222

-0.9%

154

167

+8.0%

Ooedo Onsen Reit Investment Corporation 25

Operating Results of Individual Properties (2)Room occupancy rate (%)
Previous
corresponding 11th period
periodaverageaverage

ADR (yen)Previous
corresponding 11th period
periodaverageaverage

RevPAR (yen)Previous
corresponding 11th period
periodaverageaverage

Sale (million yen)

Property
No.

Property name

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

62.1

48.9

-21.3%

30,40629,074-4.4%

18,882

14,217-24.7%

382

285-25.2%

S-11

Ooedo-Onsen Monogatari Kounkaku

42.3

37.2

-12.1%

24,88522,928-7.9%

10,5268,529-19.0%

252

200-20.4%

S-12

Kinugawa Kanko Hotel

45.9

42.9

-6.5%

28,84625,596-11.3%

13,24010,980-17.1%

484

396-18.0%

S-13

Ooedo-Onsen Monogatari Kinosaki

60.5

56.6

-6.4%

32,51730,956-4.8%

19,672

17,521-10.9%

424

368-13.2%

S-14

Ooedo-Onsen Higashiyama Grand Hotel

51.5

57.0 +10.7%

28,841

24,193-16.1%

14,853

13,790

-7.2%

367

331

-9.7%

51.9

50.7

30,512

27,330-10.4%

15,835

13,856-12.5%

4,686

4,106

-12.4%

Total

Change-2.3%

ChangeChangePrevious
corresponding 11th period
period

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 11th period
periodaverageaverage

185,874

Sales (million yen)
Change224,189 +20.6%

Previous
corresponding 11th period
period727

Change881 +21.2%(Note) Number of guests is the total number of people using New Reoma World during the period.

Ooedo Onsen Reit Investment Corporation 26

ChangeV. Future Strategic Policies

Ooedo Onsen Reit Investment Corporation 27

Key Policies in Forthcoming Periods - To the Next Growth Stage After Overcoming Crisis
Recovery in the flow of people and the position of the Ooedo business model
Current
Return ofneighboringcustomers
and domestic
regularcustomers

FutureReturn ofdomestic
travelers

Return offoreign visitors
to Japan

Infection control measures enabling the attraction of customers even amid COVID-19,
and characteristics of demand for the Ooedo model Model for attracting neighboring customers centering on domestic customers - Easy access by car and campaigns of local
governments including “discount for prefectural citizens” also provide benefit
 Customers who had used “facilities implementing infection-control measures” for more than a year have a strong desire to enjoy
leisure even in the time of COVID-19 as repeat customers, and the possibility of such customers visiting again has increased(difference from the self-restraint period last year)• Sign of recovery in seniors, which are the main target of the Ooedo model in the most recent period, is seen (asking each facility)• While some luxury resorts are active, expectations over customer attraction enhance also for reasonable Ooedo facilities when theevaluation for infection control measures spreads

Ooedo Onsen Reit Investment Corporation 28

External Growth Strategy (1) :The Number of Properties in the Sponsor Pipeline Is Increasing Steadily
Abundant sponsor pipeline.
The motivation of sponsors to open new stores is also high, and asset transfer needs to SPA is expected
to increase after COVID-19 for the purpose of improvement in financial condition.
IPO 9properties

Ooedo Onsen Reit
Investment
Corporation

PO 5properties• Reoma Resort• Atami• Toi Marine• Kinugawa Kanko• Ise-shima• Awara• Kamoshika-so• Kinosaki• Ito New Okabe• Ikaho• Kimitsu-no-mori• Higashiyama• Nagasaki(sold on January 13, 2022)

Assess stable
operation andconsiderinvestments• Kounkaku

14 properties

Before COVID-19
Ooedo Onsen
Monogatari Group(Sponsor)

Properties opened before listing of REIT 21 properties

Owned properties• Aizu34 properties• Kakeyu• Nikko Kirifuriof which 14 properties
were transferred to theInvestment Corporation

Properties opened amid
COVID-19 3 properties

Properties opened after listing and before
COVID-19 10 properties• Sohkan• Yamashitaya• New Shiobara• Masuya• Minoh Kanko• Nagayama

COVID-19 crisis• Suiyotei• Beppu Seifu

Tokyo Odaiba Ooedo Onsen Monogatari (closed in September 2021), Hotel Shinko, Urayasu Mangekyo andSendai Korona-no-yu are leased properties.

• Gero Shin-kan• Nanki-kushimoto• Kisoji• TAOYA Shima• Amakusa• Shiomi-so• Saikaibasi• Iwanumaya

With/After COVID-19

Many
properties are
underconsideration

Ooedo Onsen Reit Investment Corporation 29

External Growth Strategy (2):Pipeline of Properties Other Than Those from the Sponsor
For the time being, by assessing risk and return in light of the effects of COVID 19, we examine properties
for third-party bridge finance, while obtaining and considering information on various types of properties
such as hotels in urban areas and accommodation facilities targeting inbound customers as medium tolong term perspective.
Perspective on future external growth after COVID-19■ Diversification of portfolio and risk
・We examine locations in urban areas and investing in diverse assets including tenant diversification
・Cooperation with operators enabling the provision of safe and secure + highly private space■ Maintaining a high fixed rent ratio by setting a sufficient rent payment ratio< Property information (excluding sponsor properties) in the 11th period (from Jun. 1, 2021 until Nov. 30, 2021) >Pipeline

Ordinance-designatedcitiesCore cities

Other

Total

Total

Lodging

6

2

35

43

1

1

0

Other (day trips, etc.)

0

0

0

0

1

1

0

Other lodgings

37

4

13

54

14

7

7

Entertainment, Amusement

0

0

1

1

1

1

0

Sports, beauty, health promotion facilities

0

0

1

1

0

0

0

43

6

50

99

17

10

7

Pre COVID 19 Post COVID 19

Onsen/Spa

Total

Ooedo Onsen Reit Investment Corporation 30

Internal Growth Strategy (Including Financial Upside)
Rent structure mainly based on fixed rent for securing stable cash flow + measures to improve profits inthe short term and the medium to long term.
Leasing and rent structure Overcome the COVID-19 crisis by focusing on fixed rent accounting for a high percentage for the time being Realize the recovery of variable rent after COVID-19
 Utilize the future variable rent structure according to the scale expansion of the portfolio and improvement in the degree ofdiversification of risk.

Reduction of financial costs through the improvement of facility performance anddiversification and expansion of portfolio
For the time being
 Improvement in tenant performance and tapping into demand for leisure after restrictions due to COVID-19
 Capture demand from domestic customers who were supposed to make outbound tours, lagging behind in the recovery period.
 (Finance) ) Improvement of environment for accommodation facilities and leisure sector, and of debt-financing conditions forinvestment corporations due to financial improvement by sponsors
Future Utilization of variable rent drawing on new internal growth elements of diverse properties after scale expansion through external growth+ Reduction of financial costs
・Taking in inbound tourism demand, as well as facilities for utilizing leisure time in urban areas

Raising the level of rent revenue in the medium to long term through value-increasing investment
 Enhancement of internal cash flows generated from the difference between depreciation and CAPEX brought by the scale expansionof the portfolio Recovery of the resilience of LTV and flexible financing
・ Effective utilization of unused land and buildings
・ Pursuit of significant increase in value through investment in extension and an increase in the number of rooms in the medium to long term

Ooedo Onsen Reit Investment Corporation 31

Financial Strategy and Basic Policy
Implementation of flexible financial strategies aiming for growth from the bottom while attachingimportance to the establishment of a conservative financial base.

Current Policy
 LTV control ⇒ Respond to the COVID-19 crisis and reduce LTV for the time being. Create financing capacity with alevel of around 40% after recovery
 Initiatives on equity finance in which an increase in distributions and long-term improvement of investment unit
price can be expected Initiatives on debt financing with the utilization of property acquisition utilizing debt capacity under low LTV
 Extension of the maturity of debt and diversification of repayment periods, strive to make loans unsecured again ⇒Reduction of debt cost

Future challenges
 Promotion of scale expansion and diversification of risk in the portfolio
・ Acquisition of high credit ratings and utilization of new financing methods, such as investment corporation bonds
through the high credit ratings
・ Improvement of agility and flexibility in controlling short-term LTV・ Improvement in the FFO payout ratio, and expansion of free cash flows through improvement of debt-financing
conditions (creation of free cash power for value-increasing investment)

Ooedo Onsen Reit Investment Corporation 32

Investing Targets and Building of the Portfolio
Investments are made in a wide range of leisure facilities, particularly those related to onsen/spas,that provide consumers with an enjoyable and rich experience during their leisure time.
< Ooedo Onsen Reit’s Investment Targets >Building of a portfolio as a REIT focused on leisure facilities With onsen/spa-related facilities as the focused targets,
Shopping
Entertainment Taking note of consumption for services (experience-based consumption)
Accommodation

for which demand is expected to increase both in Japan and among inboundtourists,

H&BC

 Facilities that provide consumers with a rich experience during their leisureDininganddrinking(Health &Beauty Care)time, that are supported by consumers

Onsen/spa

Theme park

＝ Aim to build a portfolio focused on facilities aiming at utilizing leisure time

Building of a hybrid portfolio that satisfies both stability and growth Maintenance of stable operation exemplified by the Ooedo business model
Amusements

＋α
Other
services

Sportsand the stable core portfolio centered on fixed rent and net lease Acquisition of new growth factors by incorporating ever-increasing inboundtourism demand in the long term, new types of accommodation, various
leisure facilities, etc.

Ooedo Onsen Reit Investment Corporation 33

Future Growth Targets
Enhancement of profitability and financial strength through the re-expansion of AUM- Overcome the COVID-19 crisis and return to a growth path.
Phase 2.5

Phase 2
(period to build a full-fledged portfolio)

AUM: More than 100
billion yen
Rating: A” rating acquired(billion yen)
200

150

Phase 3

(recovery period from the damage
caused by COVID-19 crisis)(leap forward toward a medium-sized REIT)

Expansion of AUM

Target AUM:
175 - 220 billion yen

Multiple improvement
through the
breakaway from single
tenant structure

Overcoming COVID-19
and achieving growthagain

External properties:
100 – 120 billion yen

100

Sponsor properties:
75 - 100 billion yen

・・・

50

10th period(ended May 31,
2021)

11th period(ended November 30,
2021)

DPU

1,970 yen

1,680 yenAround2,500 yenAround 2,600 - 2,800 yen

Marketcapitalization

19.5 billion yen

17.6 billion yen

Around50 billion yen

Around 100 billion yen

38.1%

Factors of increase in DPU・ Recovery of variable rent・ Higher LTV ratio and decline
in financial cost

Around 42 - 44%

LTV(book value basis)(Note 1)
(Note 2)38.4%

n periodn + 1 period

The figures above are targets as of July 21, 2021, and are not guaranteed.
The market capitalization for the 10th period and 11th period is calculated based on the closing price as of May 31, 2021,
and as of November 30, 2021, respectively.

n + 2 period

Ooedo Onsen Reit Investment Corporation 34

VI. Market Environment

Ooedo Onsen Reit Investment Corporation 35

Market Environment (1): Stable Onsen/Spa-Related Market
Market for onsen and spa-related facilities that forms the basis for the stability of the portfolio centered on
properties operated by the sponsor.
Type of trip desired in the next 1-2 years(multiple responses)
Onsen

Trends in number of accommodation facilities
and FY total number of guests

Sightseeing, nature

No. of accommodation facilities (left axis)
FY total no. of guests (right axis)(facilities)

56.8%

16,000(thousands)
150,000

49.2%

GourmetSightseeing, history/culture

39.8%

Theme park

39.7%

Seashore resort

90,0008,000
60,000
4,000

35.4%

Sightseeing, city

28.4%

Shopping

23.7%

Resort hotel

23.2%

Walking in town

23.2%

Zoo/Aquarium

22.8%

Japanese style inn

22.7%

Sightseeing in remote islands

22.7%

Long Stay

22.7%
0%

20%

120,000

12,00044.5%

30,0000

0FY2011FY2013

FY2015FY2017FY2019Source: Onsen Use (2010 – 2018), Nature Conservation Bureau, Ministry of the Environment

・ The number of accommodation facilities’ guests has been stablesince FY2011 according to the Onsen Use Survey by the
Ministry of the Environment.
・ According to the Annual Report on the Tourism Trends Survey,
40%

60%

80%

Source: JTBF Travel Intentions Survey (from “Annual Report on the Tourism Trends Survey 2021”
by Japan Travel Bureau Foundation)“onsen” ranked top among types of trip respondents would like to try.

Ooedo Onsen Reit Investment Corporation 36

Market Environment (2): Future Leisure Market (1)Leisure Market after the COVID-19: Potential Demand for Domestic Travel.
Percentage of respondents who say frequency(of use) will increase after the pandemic subsides
Domestic travel (short-distance by train or car)

40.0%

Beauty salon, Hair salonSport club
Bowling alley
Job change service (recruitment site, agent, etc.)
ArcadeCram school (face to face)
Cram school, lessons (online)

0%

5%

20.0%

40’s

60’s

70’s and
more

0.0%

10%

15%

Domestic travel (near destinations reached by train or by car)
Domestic travel (far destinations reached train or by air)

20%

50’s

Source: All graphs are prepared by the Asset Manager based on the survey "Consumers’
Vision of the World after the COVID-19 Pandemic: Expectations of a Recovery in
Service-Oriented Consumption" of SMBC Nikko Securities Inc.

25.2%
23.7%

18.6%
21.6%

Married couple withchildren (youngest childis a high school student
or younger)

26.8%
29.5%

18.0%
19.0%

Married couple withoutchildren (employed)

9.3%
9.3%

12.1%
13.6%

17.8%
20.3%

・ The percentage of respondents who say the frequency ofdomestic travel will increase is larger than the percentages
for any other leisure activities.
・ The percentage of respondents who say the frequency ofdomestic travel will increase is high in all age groups. The
percentage is particularly high among the elderly, who are thetargets of the Investment Corporation.

10.0%
0.0%

30’s

10.0%

Percentage of respondents who say that the frequencyof domestic travel will increase by type of family
40.0%

20’s

14.5%
15.1%

Games (nonportable, portable, online, mobile app etc)

30.0%

16.1%
16.7%

Hospital Clinic

16.7%
17.9%

Karaoke

16.9%
18.7%

6.5%
6.4%
6.3%
6.1%
5.2%
4.6%
3.9%
3.5%
2.7%
2.7%
2.6%

Overseas travel

22.9%
26.5%

Theme park

23.5%
24.1%

10.6%
9.8%

Movie theater

20.0%

Domestic travel (short-distance by train or car)
Domestic travel(long-distance by shinkansen or plane)

19.8%
18.4%

Domestic travel(long-distance by shinkansen or plane)

30.0%

Percentage of respondents who say that the frequencyof domestic travel will increase by age group

Retiredor older)(orMarried couple(employed, withyoungest childindependent)

Married couple withchildren (youngest childis college student orworking)

Single-personhousehold with children
living together(employed)

Single-personhousehold (employed)

65

・ By family type, the percentage is particularly high for married
couples who have children living together or whose children
are independent.
Ooedo Onsen Reit Investment Corporation 37

Market Environment (2): Future Leisure Market (2)Domestic demand: Expansion of consumption for services or experience-oriented activities means future
potential of the leisure market both qualitatively and quantitatively.
Level of satisfaction in a variety of fields in current lives– Leisure/ leisure life

Trends in the consumption of services

0.4%

100%

7.7%

80%
60%

67.3%

63.0%

59.0%

57.7%

57.6%

Neither satisfied nor
dissatisfied

25.8%
32.7%

37.0%

41.0%

42.3%

SatisfiedModerately satisfied

40%
20%

13.3%

Slightly dissatisfied

42.4%

Dissatisfied

0%
1980

1990

2000

2010

49.4%

2019

3.4%
Services (Experiences)

Do not know

Goods (Products)

Source: A graph prepared by the Asset Manager based on “White Paper on
Consumer Affairs 2020” by the Consumer Affairs Agency

Source: Public Opinion Survey on the Life of the People (asurvey conducted in June 2019 by the Cabinet Office)Priority matters in life

・ Data of the Consumer Affairs Agency also show a stable,
increasing consumption trend for services.

HealthAssets/Savings
Leisure/Leisure life
Earnings/Income
EatingLivingPersonal development/Upskilling
Durable consumer goods (cars, etc.)
Clothing
Others・ The leisure market centered on hotels has been expanding
markedly in recent years.
・ While “leisure” is ranked high in the public survey on “pointsof emphasis in one’s future lifestyle,” facilities that satisfy
the needs remain insufficient.
0%

20%

40%

60%

80%

Source: Public Opinion Survey on the Life of the People (a survey conducted in June 2019 by the Cabinet Office)Ooedo Onsen Reit Investment Corporation 38

VII. Appendix

Ooedo Onsen Reit Investment Corporation 39

ESG Initiatives
The Investment Corporation and the Asset Manager believe that ESG initiatives are important. We take the environment and society into
consideration and are enhancing corporate governance.

Environment
 Replacement of air-conditioners with energy-saving ones
Reoma W: Air-conditioner of Peddys Cafe, Higashiyama: Buffet hallSocial Helping employees to acquire expertise
To enhance employees' skills and maintain and enhance theirexpertise, we help employees to obtain qualifications, including realestate transaction certification and ARES Certified Master.
 Taking steps to prevent COVID 19 infections
To reduce the risk of COVID 19 infections, we have introduced remote
work and online meetings.

 Replacement of boilers and pumps to energy-saving ones
Reoma no Mori: Water boiler, Kounkaku: GHP (gas heat pump) of
old building

Governance Flow for careful decision making about transactions with interested
parties
The attendance of external members at meetings of the Compliance
Committee and the Investment Committee and the approval by them
are required.
 Replacement of filtration systems of large public bath to energy-saving
ones
Reoma no Mori: Filtration system Same boat investment of the sponsor
Ooedo Onsen Monogatari Co., Ltd. holds 3.9% of the investment units
issued by the Investment Corporation (as of November 30, 2021).
 Asset Manager's own human resources playing a core role at thecompany
The President and Representative Director is one of the AssetManager’s own human resources
The department heads and those in higher positions have experience
working at listed REITs, real estate funds, financial institutions, etc.

Ooedo Onsen Reit Investment Corporation 40

Rent Structure
Lease conditions for properties master-leased to the Ooedo-Onsen Monogatari Group20

Modified GOP (Note)

Contract period:years
Non-cancellation period:

Secondary rent

Primary rent

5-7 years
Rent revision: every 3 years

Variablerent
component

Fixed rent component

50% to 60% of the modified GOP
Amount equivalent to real estate
related expenses of each facility
No variable rent
because of COVID-19•

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< Calculation period of variable rent >
2020
Sep.

Oct.

Nov.

2021
Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

2022
Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Modified GOP (Note)
11th period ended November 2021
Modified GOP
12th period ending May 2022
Modified GOP
13th period ending November 2022
(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 41

Operating Results for the Entire Portfolio< Cumulative comparison of 11th period and the same period of the previous year >Room occupancy rate:
51.9%

50.7%

(yen)

(million yen)
6,000

40,00030,51232,0005,000

27,3304,000

24,00015,835

13,856

16,000
8,000

3,000
2,000

4,686

4,106

Previous
Corresponding Period

11th period
ended November 30, 2021

1,000

0

Sales (right axis)

ADR (left axis)

RevPAR (left axis)

Portfolio operating results
2020

2021
Cumulative
total

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy
rate

54.6%

16.1%

1.5%

29.5%

34.7%

29.6%

31.6%

47.0%

52.1%

35.7%

58.6%

79.3%

39.4%

51.9%

50.7%

-1.2%

ADR (yen)

33,40530,542

21,81331,38625,36027,06919,74628,72337,266

22,41624,471

27,15628,23830,512

27,330-3,182

RevPAR (yen)18,239

4,917

327

9,258

8,799

8,012

6,239

13,49919,415

8,002

14,34021,534

11,125

15,835

13,856-1,979

916

252

16

455

433

400

305

672

955

390

725

1,056

6,579

4,686

4,106

-579

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 42

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 m2 (Note)
63,896 m2

Site area:

9,637 m2
9,782 m2

Site area:

2,945 m2
10,211 m2

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 easily accessible,
including Marugame Castle, Kotohira-gu Shrine and the Great
Seto Bridge, etc., meaning local sightseeing and leisure canbe enjoyed together with the facility.



Shima City is a large sightseeing spot in the Iseshima area.
It includes Ise Jingu Shrine and a ria coastline.



Ago Bay, where this facility is located, features many resort
hotels and onsen ryokans that back onto the mountains andface 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.

(Note) Part of the land (area: 196,542.20 m2) is leased from athird party (domestic corporation).

Ooedo Onsen Reit Investment Corporation 43

Introduction of Properties (1)S-1: Ooedo-Onsen Monogatari Reoma Resort 〈Hotel Reoma-no-mori〉
2020

2021
Cumulative
total

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy
rate

53.4%

7.5%

3.5%

19.9%

23.5%

17.3%

11.7%

37.7%

49.1%

23.0%

41.9%

63.0%

29.5%

49.0%

37.8%

-11.2%ADR (yen)

35,68539,192

19,19836,90927,801

32,93824,59438,68548,447

25,664

25,111

27,42233,42835,83533,196-2,639

RevPAR (yen)19,055

2,939

671

7,344

6,533

5,698

2,877

14,58423,787

5,902

10,521

17,275

9,861

17,55912,548-5,011

166

27

4

64

59

51

26

129

210

53

98

154

1,047

904

672

-231

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Sales (million yen)

S-2: Ooedo-Onsen Monogatari Ise-shima
2020

2021
Cumulative
total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy
rate

72.5%

41.7%

8.0%

48.4%

57.1%

47.2%

52.0%

67.5%

58.5%

45.7%

66.7%

88.4%

54.8%

64.9%

63.2%

-1.7%

ADR (yen)

36,77731,51024,82634,21926,53826,126

19,426

29,60145,03624,28724,80429,24530,004

31,98029,078-2,902

RevPAR (yen)26,663

13,1391,986

16,561

15,153

12,331

10,101

19,98026,346

11,09916,54425,852

16,442

20,755

18,377-2,378

78

38

5

48

43

36

29

57

75

31

49

74

570

365

318

-47

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Sales (million yen)

S-3: Ito Hotel New Okabe
2020

2021

Dec.

Jan.

Room occupancy
rate

56.9%

14.3%

ADR (yen)

33,553

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

26.3%

38.7%

39.1%

45.0%

40.9%

50.2%

36.2%

49.1%

69.4%

39.1%

46.3%

48.4%

+2.1%

32,246-31,011

23,362

24,53017,95026,22934,06019,92822,176

24,766

26,162

28,72324,530-4,19319,091

4,611

-

8,155

9,041

9,591

8,077

10,727

17,098

7,213

10,88817,187

10,22913,298

11,872-1,426

71

17

0

30

33

35

29

40

62

26

41

64

454

294

265

-29

Ooedo Onsen Reit Investment Corporation 44

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 m2
8,469 m2

Site area:

2,911 m2
6,125 m2

Site area:

13,263 m2
14,132 m2

Total floor area:

Total floor area:

Area characteristics

Area characteristics


Atami City, at the base of the Izu Peninsula, has been designateda 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 the limelight again as an onsen
resort that as a destination is "low-cost, nearby, and offers shortstays” with respect to 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 largest city on the Izu Peninsula, located on thecentral western 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
spring in the west Izu area. It is famous for the “Toi GoldMine” from the Edo period and attracts many visitors.

Area characteristicsAwara City is a scenic area facing the Sea of Japan and issurrounded by nature. Mikuni Fishing Port, which is well-known
for Echizen crab, Tojinbo, a tourist attraction with nationwide
fame, and Eihei-ji Temple are close by, and the tourist industry
centered on Awara Onsen is flourishing.

Awara Onsen, where this facility is located, is referred to as an
inner parlor of the Kansai region together with the Kaga Onsen
resort area composed of adjacent Yamashiro Onsen,
Yamanaka Onsen, Katayamazu Onsen, etc.

Ooedo Onsen Reit Investment Corporation 45

Introduction of Properties (2)S-4: Ooedo-Onsen Monogatari Atami
2020

2021

Dec.

Jan.

Room occupancy
rate

62.0%

31.2%

ADR (yen)

35,840

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

67.6%

53.2%

48.6%

61.7%

49.2%

59.2%

52.7%

62.0%

86.2%

53.1%

62.2%

61.7%

-0.5%

27,686-30,824

26,28526,877

19,58825,776

31,34522,804

24,62527,94027,41031,31625,552-5,76422,2208,638-

20,837

13,98313,062

12,085

12,681

18,556

12,017

15,26724,084

14,554

19,47815,765-3,713

59

23

0

53

36

34

31

33

48

29

41

61

455

303

246

-56

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

S-5: Ooedo-Onsen Monogatari Toi Marine Hotel
2020

2021

Dec.

Jan.

Room occupancy
rate

56.0%

14.6%

ADR (yen)

32,233

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

24.2%

39.9%

38.2%

44.6%

54.8%

60.8%

37.5%

48.3%

71.4%

41.1%

52.1%

52.9%

+0.8%

30,984-30,32824,892

26,14916,94032,14646,92020,87822,18824,34628,524

31,571

28,347-3,22418,050

4,523

-

7,339

9,931

9,988

7,555

17,61628,527

7,829

10,716

17,383

11,723

16,44814,995-1,453

40

10

0

15

21

21

16

38

60

16

23

37

301

212

192

-20

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

S-6: Ooedo-Onsen Monogatari Awara
2020

2021

Dec.

Jan.

Room occupancy
rate

53.2%

13.2%

ADR (yen)

30,671

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

30.2%

45.9%

31.1%

37.0%

54.2%

69.8%

47.9%

67.4%

81.7%

44.6%

44.6%

59.7%

+15.1%

29,536-27,31822,86225,901

19,852

28,342

37,036

20,91822,71727,28926,981

28,55926,913-1,646

16,316

3,898

-

8,250

10,493

8,055

7,345

15,36125,851

10,01915,311

22,295

12,033

12,737

16,067+3,330

54

13

0

26

33

26

24

50

84

32

50

71

466

246

312

+66

Ooedo Onsen Reit Investment Corporation 46

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 m2
5,947 m2

Site area:

6,805 m2
5,177 m2

Site area:

57,069 m2
8,660 m2

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.

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

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

Ikaho Onsen, where this facility is located, is one of therepresentative hot springs of the Kita-Kanto region as an
inner parlor of Tokyo and is famous for its “muddy gold
spring” and transparent “white silver spring.”

Area characteristics


Kimitsu City is located in the center of Chiba Prefecture, andwith significant improvements to vehicle access 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
expecting robust tourism demand with popular sightseeing
destinations nearby.

Ooedo Onsen Reit Investment Corporation 47

Introduction of Properties (3)S-7: Ooedo-Onsen Monogatari Kamoshika-so
2020

2021

Dec.

Jan.

Room occupancy
rate

32.0%

7.8%

ADR (yen)

25,998

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

24.8%

32.8%

30.8%

40.2%

52.1%

59.7%

34.1%

65.9%

90.4%

39.4%

41.0%

57.1%

+16.1%

27,342-

25,971

22,52029,443

19,62125,73033,001

23,65424,51925,18825,816

26,91925,731-1,188

8,319

2,132

-

6,440

7,386

9,068

7,887

13,405

19,701

8,066

16,15822,76910,171

11,036

14,692+3,656

17

4

0

13

15

18

15

27

39

16

33

46

248

137

179

+41

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

S-8: Ooedo-Onsen Monogatari Ikaho
2020

2021

Dec.

Jan.

Room occupancy
rate

49.0%

21.3%

ADR (yen)

34,836

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

28.1%

73.8%

62.6%

68.3%

70.6%

68.4%

69.9%

89.4%

94.3%

58.2%

66.0%

76.8%

+10.8%

22,246-33,407

24,49924,747

20,12324,60532,26023,48926,81730,735

26,95028,517

26,610-1,907

17,069

4,738

-

9,387

18,08015,491

13,744

17,37122,065

16,41823,97428,983

15,684

18,821

20,436+1,615

23

6

0

12

25

21

18

24

29

21

33

39

258

156

167

+11

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

S-9: Ooedo-Onsen Monogatari Kimitsu-no-mori
2020

2021

Dec.

Jan.

Room occupancy
rate

74.9%

24.9%

ADR (yen)

29,301

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

39.2%

64.6%

55.1%

63.2%

73.7%

74.4%

59.3%

71.1%

82.9%

57.3%

62.7%

70.8%

+8.1%

30,376-27,116

22,83525,698

19,10524,55534,29921,37622,172

22,86425,237

27,722

24,325-3,397

21,946

7,563-

10,62914,751

14,15912,07418,09725,51812,675

15,764

18,954

14,46017,381

17,222

-159

33

12

0

16

23

24

19

28

39

20

27

31

279

154

167

+12

Ooedo Onsen Reit Investment Corporation 48

Introduction of Properties (4)S-11

Location:

Nagasaki City,
Nagasaki Prefecture

Location:

Osaki City,
Miyagi Prefecture

Location:

Nikko City,
Tochigi Prefecture

Site area:

6,766 m2
11,114 m2

Site area:

11,829 m2
10,843 m2

Site area:

6,719 m2
22,402 m2

Total floor area:

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 destination with abundant tourism
resources such as having been registered in the World Heritage
List as “Sites of Japan’s Meiji Industrial Revolution: Iron andSteel, Shipbuilding and Coal Mining” in 2015.
Mt. Inasa, where the facility stands, is famous for night views andhas been certified by YAKEI Convention & Visitors Bureau as
one of the three new greatest night view spots along with
Monaco and Hong Kong.

Area characteristics

Naruko-kyo Gorge, where the facility is located, has 400
spring sources offering 9 of Japan’s 11 types of spring water
nearby. It is a hot spring site boasting ample volume of water.
Temporary bus services (“Momiji-go”) are operated between
Naruko Onsen Station and Nakayamadaira-Onsen Station
via Naruko-kyo Gorge each autumn when the leaves change
color.

S-12

Total floor area:

Area characteristics
 Nikko City is located in northwestern 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 accessible from Tokyo and was rapidly developed during
and after the period of high economic growth.

Ooedo Onsen Reit Investment Corporation 49

Introduction of Properties (4)S-10: Ooedo-Onsen Monogatari Nagasaki Hotel Seifu
2020

2021

Dec.

Jan.

Room occupancy
rate

73.3%

17.5%

ADR (yen)

35,344

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

37.8%

44.3%

23.2%

19.5%

49.6%

39.3%

27.0%

65.4%

92.3%

41.0%

62.1%

48.9%

-13.2%

31,463-32,54729,08827,544

20,26529,972

31,917

21,52828,757

31,62230,30930,40629,074-1,33225,907

5,506-

12,302

12,885

6,390

3,951

14,866

12,543

5,812

18,807

29,187

12,426

18,882

14,217-4,665

87

18

0

40

42

22

13

51

42

19

64

95

498

382

285

-96

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

S-11: Ooedo-Onsen Monogatari Kounkaku
2020

2021

Dec.

Jan.

Room occupancy
rate

38.2%

9.0%

-

8.9%

-

ADR (yen)

28,66024,746-

21,331

RevPAR (yen)10,948

2,227

-

44

9

0

Sales (million yen)

Feb.

Mar.

Apr.

May

Cumulative
total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

18.6%

37.6%

34.6%

19.4%

47.3%

65.7%

23.4%

42.3%

37.2%

-5.1%

-

-

18,81921,44325,314

18,22723,39024,712

23,72924,88522,928-1,957

1,898

-

-

3,500

8,062

8,758

3,536

11,063

16,235

5,552

10,526

8,529-1,997

7

0

0

13

30

34

13

44

64

262

252

200

-51

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

S-12: Kinugawa Kanko Hotel
2020

2021

Dec.

Jan.

Room occupancy
rate

43.5%

9.3%

ADR (yen)

31,573

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

18.2%

21.7%

28.6%

15.6%

32.6%

38.9%

30.0%

58.8%

81.6%

31.8%

45.9%

42.9%

-3.0%

30,189-27,482

24,682

27,524

21,58926,43632,024

21,81523,42225,855

26,596

28,84625,596-3,25013,734

2,807

-

5,001

5,355

7,871

3,367

8,618

12,457

6,544

13,77221,097

8,457

13,24010,980-2,260

84

17

0

30

32

48

20

52

74

38

84

127

610

484

396

-87

Ooedo Onsen Reit Investment Corporation 50

Introduction of Properties (5)S-13

Ooedo-Onsen Monogatari
KinosakiS-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

Location:

Toyooka City,
Hyogo Prefecture

Location:

Aizuwakamatsu City,
Fukushima Prefecture

Site area:

11,350 m2
10,602 m2

Site area:

12,451 m2
16,665 m2

Total floor area:

Total floor area:

Area characteristics
Kinosaki Onsen, represented by stone bridges stretching over asmall river and streets lined with willow trees, is one of Japan’s
most famous onsen resorts where guests can enjoy sevenpublic 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.

Area characteristics


Aizuwakamatsu City is located in the west of Fukushima
Prefecture with scenic natural landscapes nestled between
Mt. Bandai, Lake Inawashiro and such.

Tour bus services running between major tourist sites such
as Higashiyama Onsen and Tsurugajo Castle are operated
from JR Aizuwakamatsu Station.

Ooedo Onsen Reit Investment Corporation 51

Introduction of Properties (5)S-13: Ooedo-Onsen Monogatari Kinosaki
2020

2021
Cumulative
total

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy
rate

69.6%

31.2%

6.2%

65.5%

43.5%

27.9%

19.2%

58.6%

67.0%

41.1%

60.4%

92.7%

48.9%

60.5%

56.6%

-3.9%

ADR (yen)

33,96329,181

22,301

33,59926,331

27,356

22,671

31,084

41,28525,46626,03630,62630,92732,51730,956-1,561

RevPAR (yen)23,638

9,104

1,382

22,007

11,453

7,632

4,352

18,21527,66010,466

15,72528,39015,123

19,672

17,521-2,151

86

33

4

76

39

25

14

65

95

35

57

100

633

424

368

-55

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

Sales (million yen)

S-14: Ooedo-Onsen Monogatari Higashiyama Grand Hotel
2020

2021

Dec.

Jan.

Room occupancy
rate

48.2%

12.3%

ADR (yen)

32,816

RevPAR (yen)Sales (million yen)

Feb.

Cumulative
total

Change

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

-

14.5%

29.2%

32.4%

44.1%

44.2%

49.1%

40.2%

76.3%

87.8%

40.1%

51.5%

57.0%

+5.5%

33,258-28,787

23,64726,26919,01324,03029,37920,93624,30625,27325,55928,841

24,193-4,64815,817

4,090

-

4,174

6,904

8,511

8,384

10,621

14,4258,416

18,54522,18910,24914,853

13,790-1,063

65

17

0

16

27

33

32

43

58

32

76

88

492

367

331

-35

Previous
corresponding
periodcumulative
total

11th period
cumulative
Total

ChangeS-1: Ooedo-Onsen Monogatari Reoma Resort 〈New Reoma Resort〉
2020

Number of guests
Sales(million yen)

2021
Cumulative
total

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

42,079

8,609

2,073

27,656

17,952

15,771

15,63636,12437,968

16,13845,29373,030338,329

185,874

224,189+38,315

144

30

7

99

64

54

50

151

174

58

172

274

1,283

727

881

+154

Ooedo Onsen Reit Investment Corporation 52

Financial Indices
Indices

10th period(May 31, 2021)

11th period(Nov. 30, 2021)

Calculation formula

Ordinary income

460 mn yen

393 mn yen

Net income

459 mn yen

392 mn yen

Depreciation

449 mn yen

452 mn yen

CAPEX

99 mn yen

146 mn yen

Total assets

37,122 mn yen

36,926 mn yen

Total net assets

21,092 mn yen

21,021mn yen

89,622 yen

89,320 yen

BPS (Total net assets/unit)
Unit price (End of each period)
Total units outstanding
Total distribution
DPU
Distribution yield

83,100 yen

75,000 yen

235,347 units

235,347 units

463 mn yen

396 mn yen

1,970 yen

1,686 yen

4.8%

4.5%

908 mn yen

844 mn yen

FFO per unit

3,860 yen

3,589 yen

FFO multiple

FFO

DPU (annualized)/Unit price as of end of period
Net income + Depreciation－profit or loss on sale of real estate

10.7x

10.5x

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

PER

21.2x

22.5x

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

PBR

0.9x

0.8x

Unit price as of end of period/Net assets per unit
Ordinary income/Average of total assets during the period

ROA
Annualized
ROE
Annualized
NAV

1.2%

1.1%

2.5%

2.1%

2.2%

1.9%

4.4%

3.7%

26,695 mn yen

26,850 mn yen

NAV per unit

113,431 yen

114,089 yen

NAV multiple

0.7x

0.7x

Interest-bearing debt

Net income/Average of total net assets during the period
Total net assets + Total appraisal value - Total book value - Total liabilities
Unit price as of end of period/NAV per unit

14,271 mn yen

14,069 mn yen

LTV (book value basis)

38.4%

38.1%

Interest-bearing debt/Total assets

LTV (appraisal value basis)

33.4%

32.9%

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

182 days

183 days

Operating days

Ooedo Onsen Reit Investment Corporation 53

Balance Sheet(thousand yen)(thousand yen)

10th period

11th period

10th period

11th period(period ended May 31, 2021)(period ended Nov. 30, 2021)(period ended May 31, 2021)(period ended Nov. 30, 2021)

AssetsLiabilities

Current assets

Current liabilities

Cash and deposits

2,356,485

2,475,520

Operating accounts payable

8,045

91,868Prepaid expenses

101,517

107,620

Short-term loans payable

5,193,060

7,293,300

Current portion of long-term loans payable

Other
Total current assets

6,866

6,799

2,464,869

2,589,940

Non-current assets
Property, plant and equipment
Buildings

5,509,515

3,246,375

Accounts payable - other

83,23488,362

Accrued expenses

7,482

8,389

Income taxes payable
26,761,904

26,896,509

932

955

Accrued consumption taxes

34,83020,772

247,064

245,331

6,973

9,960

11,091,139

11,005,314

Accumulated depreciation-3,686,238-4,135,462

Advances received

Buildings, net

23,075,666

22,761,046

Other

Structures

10,97916,979

Accumulated depreciation-1,986-2,525Structures, net

8,992

14,453Long-term loans payable

3,569,375

3,529,625

600

600

Tenant leasehold and security deposits

1,230,692

1,230,441

Accumulated depreciation

-115

-132

Asset retirement obligations

139,096

139,502

Machinery and equipment, net

484

467

Total non-current liabilities

4,939,164

4,899,568

Tools, furniture and fixtures

9,972

15,651

16,030,303

15,904,883

Accumulated depreciation-2,042-3,039Tools, furniture and fixtures, net

7,930

12,612

Land

11,208,770

11,208,770

20,653,023

20,653,023

Total property, plant and equipment

34,301,844

33,997,351

Allowance for temporary difference adjustment-20,175-24,411

303,751

302,274

Total deduction from unitholders’ capital-20,175-24,411544

50

20,632,847

20,628,611

304,296

302,325

Unappointed retained earnings (undisposed loss)

459,464

392,604

15

16

Total surplus

459,464

392,604

Long-term prepaid expenses

41,49926,37421,092,312

21,021,215

Lease and guarantee deposits

10,08910,08921,092,312

21,021,215

37,122,615

36,926,098

Machinery and equipment

Intangible assets
Leasehold right
SoftwareTotal intangible assets
Investments and other assets
Deferred tax assets

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

51,60536,481

34,657,746

34,336,158

37,122,615

36,926,098

Total current liabilities
Non-current liabilities

Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital

Unitholders’ capital, net
Surplus

Total unitholders’ equity
Total net assets
Total liabilities and net assets

Ooedo Onsen Reit Investment Corporation 54

Statement of Income(thousand yen)
10th period

11th period(from Dec. 1, 2020 to May 31, 2021)(from Jun. 1, 2021 to Nov. 30, 2021)

Operating revenue
Lease business revenue
Gain on sales of real estate properties
Total operating revenue

1,348,319

1,344,058--

1,348,319

1,344,058

Operating expenses
Expenses related to rent business

577,073574,035

Asset management fee

119,720

118,566

Asset custody fee

1,676

1,665

Administrative service fees

17,032

16,511

Directors’ compensations

3,600

3,600

Other operating expenses

35,71640,270Total operating expenses

754,817754,649594,331589,408

Operating income
Non-operating income
Interest income

1110

Reversal of distributions payable

637

750

Total non-operating income

648

761

Non-operating expenses
Interest expenses

50,92756,914

Borrowing related expenses

82,956102,177

Total non-operating expenses
Ordinary income
Extraordinary losses
Loss on tax purpose reduction entry of noncurrent assets
Total extraordinary losses

133,884

196,678

460,266

393,492

-

-

-

-

460,266

393,492

Income taxes – current

934

956

Income taxes – deferred

0

-1

935

955

459,331392,536

Income before income taxes

Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

133

67

459,464

392,604

Ooedo Onsen Reit Investment Corporation 55

Debt Status
List of lenders(as of November 30, 2021)
LenderSumitomo Mitsui Banking
Corporation
ORIX Bank Corporation
San ju San Bank, Ltd.
Short
term

Sumitomo Mitsui Trust Bank,
LimitedThe Nomura Trust andBanking Co., Ltd.

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking
Corporation
San ju San Bank, Ltd.
The Tochigi Bank

Fukoku Mutual Life Insurance
The Bank of Fukuoka, Ltd.
The Juhachi-Shinwa Bank, Ltd.

Sumitomo Mitsui Banking Corporation

Long
term

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited
ORIX Bank Corporation
San ju San Bank, Ltd.
The Towa Bank, Ltd.

The Iyo Bank, Ltd.
The Nomura Trust andBanking Co., Ltd.
The Bank of Fukuoka, Ltd.
The Juhachi-Shinwa Bank, Ltd.

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited
ORIX Bank Corporation
San ju San Bank, Ltd.
The Towa Bank, Ltd.

The Iyo Bank, Ltd.
The Nomura Trust andBanking Co., Ltd.
The Bank of Fukuoka, Ltd.
The Juhachi-Shinwa Bank, Ltd.

Total

Balance(mn yen)Interest rate(%)

Drawdown date

Repayment date

Security

Notes

4,873

Base rate (JBA 3-month Yen TIBOR) +0.70%

August 31,
2021

February 28,
2022

Secured andunguaranteed(Note 1)230

Base rate (JBA 1-month Yen TIBOR)+0.70%

August 31,
2021

February 28,
2022

Secured andunguaranteed

2,190

Base rate (JBA 3-month Yen TIBOR) +0.70%

November 30, 2021

February 28,
2022

Secured andunguaranteed(Note 2)442

Base rate (JBA 3-month Yen TIBOR) +1.25%

September 1,
2016

May 31,
2023

Secured andunguaranteed(Note 3)

3,166

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

May 31,
2019

May 31,
2023

Secured andunguaranteed(Note 4)

3,166

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

May 31,
2019

May 31,
2022

Secured andunguaranteed(Note 4)

14,069(Note 1) 31,460 thousand yen will be repaid on October 31, 2021 and January 31, 2022 and the balance on the principal repayment date.
(Note 2) 19,365 thousand yen will be repaid on January 31, 2022 and the balance on the principal repayment date.
(Note 3) The first repayment shall be made on October 31, 2016 and 2,750 thousand yen shall be repaid on the last day of every third month thereafter, with the balance to be repaid on the principal repayment
date.
(Note 4) The first repayment shall be made on July 31, 2019, and 17,125 thousand yen shall be repaid to each lender on the last day of every third month thereafter, with the balance to be repaid on the principal
repayment date.
(Note 5) JBA yen TIBOR can be found on the TIBOR Administration website of the Japanese Bankers Association.

Ooedo Onsen Reit Investment Corporation 56

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 the end of February 2021)

Address

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

Establishment

December 5, 2017 (founded in November 2001)

Representative

Representative Director Mitsumasa Morita

No. of Employees

1,284 (as of January 31, 2022)*The total number of employees on a group-wide basis

Financial Results(Feb. 2021)

Consolidated Net Sales: 20,809 million yen
Consolidated Total Assets: 78,295 million yen
Net Assets: 9,603 million yen Reinvigorating onsen ryokan, hotels, spa-related facilities, theme parks around thecountry
Businesses We started with the onsen theme park, “Ooedo-Onsen Monogatari,“ which has an

Edo culture theme. As of Feb. 28, 2021, we operate 38 onsen and spa-related
facilities

Trends in number of facilities
2003

2007 - 20092010 - 20132016

Opened Ooedo-Onsen
Monogatari in Odaiba,
Tokyo

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

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

Opened Kounkaku,
Masuya andNagasaki Hotel Seifu

OdaibaOoedo-Onsen
Monogatari

Ooedo-Onsen
Monogatari
Aizu

Hotel New
Shiobara

2017

Ooedo-Onsen
Monogatari
Gero Shin-kan

Ooedo-Onsen
Monogatari
MasuyaOoedo-Onsen
Monogatari
Minoh Kanko Hotel

2018

Opened Hotel Suiyotei, Opened Nanki-kushimotoand Hotel Kisoji
Beppu and Gero Shin-kan

18

20
10
0

6

9

20

24

25

27

27

27

2020
Opened Shiomi-so,
Saikaibashi Corazon Hoteland Iwanumaya

Ooedo-Onsen
Monogatari
Amakusa Hotel Kameya

Saikaibashi
Corazon Hotel

Ooedo-Onsen
Monogatari
Hotel Kisoji

40
30

2019
Opened TAOYA Shima,
Amakusa Hotel Kameya

30

32

34

37

38

12

End of

End of

End of

End of

End of

End of

End of

End of

End of

End of

End of

End of

End of

End of

End ofSep. 2007

Sep. 2008

Sep. 2009

Sep. 2010

Sep. 2011

Sep. 2012

Sep. 2013

Feb. 2014

Feb. 2015

Feb. 2016

Feb. 2017

Feb. 2018

Feb. 2019Feb. 2020Feb. 2021

Ooedo Onsen Reit Investment Corporation 57

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 group is expanding its business scale actively through a range of initiatives such as the acquisition of 13 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)

4,000
3,421

REIT acquired assets

3,623

Facilities acquired after 2016

3,126
3,000

2,709

Ooedo-Onsen Monogatari

2,766

MasuyaOoedo-Onsen Monogatari

Kakeyu Fujikan Sakurakan
2,000

1,515

Hotel Kisoji

1,000
FY2016FY2017FY2018FY2019FY2020

FY2021

Ooedo-Onsen Monogatari

Sendai Korona-no-yu

Ooedo-Onsen Monogatari

Higashiyama Grand Hotel
Ooedo-Onsen Monogatari

Yamashiro Onsen

Nikko Kirifuri

Yamashitaya

Saikaibasi Corazon Hotel

Ooedo-Onsen Monogatari

Gero Shin-kan
Ooedo-Onsen Monogatari

Nagasaki Hotel Seifu(Spa-related facilities

for day visits)
Aizu
Hotel New Shiobara
Hotel Kinugawa Gyoen
Ooedo-Onsen Monogatari

Kamoshika-so
Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari

Ikaho
Hotel Shinko

Ooedo-Onsen Monogatari

Urayasu Mangekyo(Onsen theme park)

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Beppu Seifu
Amakusa
Hotel Kameya

Ooedo-Onsen Monogatari

Shiomi-so

Awara
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

KinosakiHotel Sohkan

Ooedo-Onsen Monogatari

Nagayama
Ooedo-Onsen Monogatari

Kounkaku

Sendai Akiyu-onsen
Iwanumaya

Ooedo-Onsen Monogatari

Ooedo-Onsen MonogatariIse-shima

Reoma Resort

Ooedo-Onsen Monogatari

Kimitsu-no-moriOoedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Hotel Suiyotei

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

Minoh Kanko Hotel
Ooedo-Onsen Monogatari

Nanki-kushimoto

Ooedo-Onsen Monogatari Atami
Ooedo-Onsen Monogatari

TAOYA Shima

Ito Hotel New Okabe
Ooedo-Onsen Monogatari

Toi Marine Hotel

Ooedo Onsen Reit Investment Corporation 58

“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 59

“Ooedo Business Model” with Stable Operations and Sustainable Growth (2)Maintaining high customer satisfaction and room occupancy rates surpassing the industry average
despite the impact of COVID-19 since March.
Ooedo-Onsen Monogatari Group hotel guest questionnaire(conducted from June 1, 2021 to November 30, 2021)< Overall satisfaction > < Meal (breakfast) (Note) > < Meal (dinner) (Note) >
0.8%

0.8%

0.3%

3.4%

1.6%

0.2%

5.4%

0.3%

Trends in average monthly occupancy rates
for each type of accommodation facility

100%
90%

6.0%

80%

79.3%

70%
45.8%

49.7%

44.0%

49.6%

45.4%

54.6%

60%

56.9%
50.6%
46.0%
41.2%

50%
40%

< Type of services inside the facility >< Onsen >
6.0%

1.3%

1.2%

0.2%

12.3%

0.2%

34.1%

30%
20%
10%

43.7%

37.9%

48.7%

0%
2019/112020/32020/72020/112021/32021/72021/11

48.4%

Ooedo Onsen REIT
Resort hotels

City hotels
Ryokans

Business hotels
Total(Note)
Very saticefied

Satisfied

Fair

Unsatisfied

Very unsatisfied(Note) Due to a change in aggregation method, data at the end of November 2021 is aggregated.

All facilities held by the Investment Corporation have been successively and temporarily closed sinceApril 2020 due to the spread of COVID-19
Source: Data on city hotels, business hotels, resort hotels, ryokan and all types of accommodation are compiledby the asset manager based on a statistical survey on trips with accommodation conducted by the
Ministry of Land, Infrastructure, Transport and Tourism.

Ooedo Onsen Reit Investment Corporation 60

Measures Against COVID-19 Taken by the Ooedo-Onsen Monogatari Group
Providing hot spring trips where everyone can feel relieved: Promises of Ooedo-Onsen Monogatari
Since ancient times, Japanese people have enjoyed hot spring trips for relaxation. The Ooedo-Onsen Monogatari Group promises to provide
spaces and services for people to feel relieved, especially in the current difficult times.
• The Group conforms to the guidelines of the government and industry and takes measures to prevent COVID-19 at the highest level,with more than 200 activities.
• Ooedo Safety and Security Project Team has been established in the Group, which ensures efforts made at each facility and provides
employee training.
• The Group appointed outside physicians of infectious diseases as advisors and adds or renews measures against infectious diseases
to be taken by the Group as well as new, safer activities as appropriate.

1. At restaurants

2. At baths

Safety and security, and full satisfaction
Enjoy a buffet in a new style.
• Distance of 1.5 meters maintained between tables.
• Disposable plastic gloves are distributed by our staff at theentrance for guests to wear while selecting food and drinks.
• Food boards, plates, tongs, and other shared utensils are
disinfected with alcohol every 15 minutes and frequently
replaced, etc.

Safety and security, and relaxing spaces
Enjoy a luxurious hot spring experience.

Footprint stickers placed every
two meters in front of restaurants

3. Facility staff members• Guests are notified about the crowded hours of baths
and are guided to select a different time.
• Changing rooms are ventilated 24 hours/day.
Windows are kept open for more ventilation.
• Restrictions on the number of people who can use thesauna at the same time, etc.

Slippers stored in a bag

4. Requests for guests

Safety and security, and sincere hospitality
Ooedo staff members help create exclusive,
special memories.

To enjoy a wonderful experience at
Ooedo-Onsen Monogatari, each guest isrequested to do the following.

• All workers inside the facilities wear masks.
• In-room amenities and fixtures are disinfected with alcoholand thoroughly wiped.
• Bedclothes in guest rooms are stored in tightly closed bags
to prevent being touched after use, taken to a bedclothes
storage room, and washed, etc.

• Take their temperature and fill in a survey sheet whenarriving at a facility.
• Refrain from coughing or sneezing in the presence ofother guests, display good manners and refrain fromloud conversations, etc.

Blocking shields
in front of a store

Alcohol hand sanitizers placedin various places

Ooedo Onsen Reit Investment Corporation 61

Unitholders Breakdown
Ratio by number of unitholders< End of 11th fiscal period >< End of 10th fiscal period >Foreign corporations
Financial institutions 1.1% and individuals

Financial institutions

0.6%

0.3%

Financial institutions(Incl. securities companies)

Name

Ratio

Foreign corporations

1.1% and individuals
0.7%

1

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

33,406

14.2%

2

Custody Bank of Japan, Ltd. (Trust Account)

15,968

6.8%

3

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

11,058

4.7%

4

Ooedo-Onsen Monogatari Co., Ltd.

9,246

3.9%

5

Custody Bank of Japan, Ltd.
(Securities Investment Trust Account)

4,486

1.9%

6

Individual

3,295

1.4%

7

DFA INTERNATIONAL REAL ESTATE SECURITIESPORTFOLIO

3,287

1.4%

8

YONEZAWA SHINKIN BANK

3,000

1.3%

9

Banshu Shinkin BANK

2,880

1.2%

10

Morgan Stanley MUFG Securities Co., Ltd.

2,613

1.1%

89,239

37.9%

97.9%

98.0%

Individuals

Number ofunits held

Rank

18,208 unitholders

19,296 unitholders
0.2%

Top 10 unitholders

Other domestic corporations

Foreign corporations and individuals

Raito by number of investment units
5.9%

6.9%

7.1%

34.4%

Individuals

7.0%

52.6%

Financial institutions(Incl. securities companies)

37.7%

Other domestic corporations

48.5%

Foreign corporations and individuals

Total

Ooedo Onsen Reit Investment Corporation 62

Track Record of Investment Unit Price
Change in investment unit price and trading volume(units)(yen)
110,000

35,000100,000

28,00090,00080,00021,00070,00014,00060,0007,000

50,00040,0002016/80
2016/112017/2

2017/52017/82017/112018/2

2018/5

2018/8

2018/112019/2

Volume

2019/5

2019/8

2019/112020/2

2020/52020/82020/112021/22021/52021/82021/112020/2

2020/52020/82020/112021/22021/52021/82021/11

Investment unit price

Relative comparison of investment unit price and TSE REIT index(yen)
110,000
100,000
90,00080,00070,00060,00050,00040,0002016/8

2016/112017/2

2017/52017/82017/112018/2

2018/5

2018/8

2018/112019/2

2019/5Investment unit price2019/8

2019/11

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 63

Governance Structure

Introduction of performance-linked elements 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,
disposition fee, and merger 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))

Merger fee

Appraisal value at the time when a merger takes effect × 1.0% (upper limit)(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 64

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.

⑦

②

⑥

Ooedo Onsen Reit Investment
Corporation⑤

General Unitholders’ Meeting

Sumitomo Mitsui Trust Bank,
Limited(100% ownership)

Board of Directors
Asset Manager①

Ooedo Onsen
Asset Management Co., Ltd.

Subsidiary of Parent Company
of Asset Manager

Reoma Unity Co., Ltd.

General Administrator(accounting)Reiwa Accounting Holdings
Co., Ltd.

Supervisory Director
Kentaro Suzuki④

General Administrator(tax payment)

Reiwakaikeisha Tax Corporation⑥

Independent Auditor

Kagawa Prefecture Tourism
Development Ltd.
Subsidiary of Parent Company
of Asset Manager③

Executive Director
Fuminori Imanishi

Supervisory Director
Takayuki Hongyo

Asset Custodian
Unitholders’ Registry Administrator
General Administrator(agency management)⑦

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 Tax Payment Services Contract⑤ Sponsor Support Contract⑥ Asset Purchase and Sales Contract⑦ Asset Lease Contract

Ooedo Onsen Reit Investment Corporation 65

Overview of Asset Manager

Registrationsand Licenses

Name: Ooedo Onsen Asset Management Co., Ltd.

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

Discretionary transaction agent, Minister of Land,
Infrastructure, 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%

Employees: Real estate brokerage, Governor of Tokyo (2) No. 98032: 12 (as of November 30, 2021)

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 66

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 67