Ooedo Onsen Reit Investment Corporation
Results of 9th Fiscal Period ended November 30, 2020

Presentation Material
January 21, 2021
（Asset Manager）Ooedo Onsen Asset Management Co., Ltd.

Table of Contents
Ⅰ. Investment Highlights

Financial Strategy

30

Impact of Novel Coronavirus Infectious Disease (COVID-19)

3

Investing Targets and Building of the Portfolio

31

Operating Results for the Entire Portfolio

4

Future Growth Targets

32

Increase/Decrease in Variable Rent

5

Transfer of Part of Land of Ooedo-Onsen Monogatari Reoma Resort
and Acquisition of Its Land Lease Right

6

Ⅳ. Market Environment

Financial Status – Implementation of Refinancing

7Market Environment

Financial Results for the 9th Fiscal Period ended November 2020

8

Priorities for the Time Being: Determining Risk and Building Defenses

9

Forecast for the 10th Fiscal Period ending May 2021

11

Appraisal Value

37

Forecast for the 11th Fiscal Period ending November 2021

12

Introduction of Properties

38

Changes in Key Indices13

Financial Indices48

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

14

Balance Sheet

49

Statement of Income

50

Debt Status

51

Ⅱ. Investment Results

34

Ⅴ. Appendix

Portfolio Data

16

Ooedo-Onsen Monogatari Group52

Operating Results of Individual Properties

18“Ooedo Business Model” with Stable Operations and Sustainable Growth54

Unitholders Breakdown

56

Unitholder Benefit Program

57

Ⅲ. Key Policies in Forthcoming Periods
Key Policies in Forthcoming Periods (1) (2)21

Track Record of Investment Unit Price

58

Measures Against COVID-19 Taken by the Ooedo-Onsen Monogatari Group

23

Governance Structure

59

Key Policies in Forthcoming Periods (3)24Overview of Investment Corporation

60

External Growth Strategy

25

Overview of Asset Manager

61

Internal Growth Strategy

28* The photo on the front cover is a bath at Ooedo-Onsen Monogatari Atami.

Ooedo Onsen Reit Investment Corporation 1

Ⅰ. Investment Highlights

Ooedo Onsen Reit Investment Corporation 2

Impact of Novel Coronavirus Infectious Disease (COVID-19)
In November 2020, both the occupancy rate and revenue recovered tojust over 90% of the November 2019 level, bolstered by the Go To Travel Campaign
Operation of accommodation facilities (Note 1) (Note 2)

2020＜Calculation period of variable rent＞
2019
Sep.

Oct.

Nov.

2020
Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

2021
Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Modified GOP (Note 3)
9th period ended November 2020
Modified GOP
10th period ending May 2021
Modified GOP
11th period ending November 2021
(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) As of January 15, 2021, in light of the declaration of a COVID state of emergency to 11 prefectures, the Ooedo-Onsen Monogatari Group has made the decision to temporarily close 10 facilities(Reoma Resort <Hotel Reoma-no-mori>, Ito Hotel New Okabe, Toi Marine Hotel, Awara, Kamosika-so, Ikaho, Kimitsu-no-mori Kounkaku, Kinugawa Kanko Hotel and Higashiyama Grand Hotel）.
Please refer to the Investment Corporation’s website for further details.
(Note 3) “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 3

Operating Results for the Entire Portfolio
While the room occupancy rate and RevPAR fell sharply due to the effects of COVID-19, ADR rose slightly＜Cumulative comparison of 9th period and the same period of the previous year＞

Room occupancy rate：
89.3%

51.9%

Portfolio operating results
2019

2020

Cumulativ e
total

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

Room occupancy rate

84.7%

83.4%

86.9%

62.4%

17.9%

1.1%

6.0%

42.3%

49.4%

54.4%

73.9%

84.9%

53.9%

89.3%

51.9% -37.4%

ADR (yen)

31,56029,70525,532

23,256

16,712

19,75724,15027,55437,93027,47527,76832,43728,80430,06230,512

RevPAR (yen)26,731

24,77322,187

14,511

2,991

217

1,449

11,65518,737

14,946

20,52027,53915,525

26,845

15,835 -11,010

1,461

1,350

1,145

762

156

11

69

572

905

721

1,057

1,358

9,574

8,593

4,686

Sales (million yen)+450

-3,907

Ooedo Onsen Reit Investment Corporation 4

Increase/Decrease in Variable Rent
The effects of COVID-19 pushed variable rents for the 9th period down to zero,in line with the previous forecast of 9th period(thousand yen)
PropetyNo.

8th period

9th period

Property name
Fixed

Variable

Total rent

Fixed

Variable

Total rent

Increase/decrease ofvariable rent

S-1

Ooedo-Onsen Monogatari Reoma Resort

315,257

28,619343,877

315,216-

315,216-28,619

S-2

Ooedo-Onsen Monogatari Ise-shima

108,056

7,104

115,161

108,056-

108,056-7,104S-3

Ito Hotel New Okabe

73,7808,559

82,34073,780-73,780-8,559S-4

Ooedo-Onsen Monogatari Atami

93,716

7,628

101,344

93,716-

93,716-7,628

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

54,5896,792

61,38254,589-54,589-6,792

S-6

Ooedo-Onsen Monogatari Awara

65,7783,253

69,031

65,778-65,778-3,253

S-7

Ooedo-Onsen Monogatari Kamoshika-so

35,723

3,663

39,38635,723-35,723-3,663

S-8

Ooedo-Onsen Monogatari Ikaho

36,7594,826

41,58636,759-36,759-4,826

S-9

Ooedo-Onsen Monogatari Kimitsu-no-mori

24,590-24,59024,590-24,590-

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

74,9794,027

79,00674,979-74,979-4,027

S-11

Ooedo-Onsen Monogatari Kounkaku

42,103-

42,103

42,103-

42,103-

S-12

Kinugawa Kanko Hotel

174,418-

174,418

174,418-

174,418-

S-13

Ooedo-Onsen Monogatari Kinosaki

78,888

5,308

84,19678,888-78,888-5,308

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

51,7906,043

57,83351,790-51,790-6,0431,230,431

85,827

1,316,259

1,230,390-

1,230,390-85,827

Total

Ooedo Onsen Reit Investment Corporation 5

Transfer of Part of Land of Ooedo-Onsen Monogatari Reoma Resort
and Acquisition of Its Land Lease Right
Part of the parking lot and the former site of the zoo was transferred as land for a photovoltaic power
generation project to contribute to the renewable energy business and, at the same time, the land lease right
was acquired to ensure continued operation of the parking lot so that operation of the Reoma Resort is notaffected＜Image after installation of the PV panels＞

Benefits of the transaction■ Improvement of NAV per unit ⇒+3,437 yen/unit⇒

660 mn yen■ Contribution to the renewable⇒energy business

Planned panel output■ Funds raised(Note 1)13.8 MW(Note 2)

Use of funds raised■ Reduction of debt costthrough partial repaymentof loans payable⇒+22 yen/unit■ Reduction of LTV(appraisal value basis)⇒-1.5 ％(Note 1) Funds raised is the difference between the transfer price of the land (805 million yen) and the acquisition
price of the land lease right (145 million yen).
(Note 2) Planned panel output is based on information received from the photovoltaic power generation operator
as of January 21, 2021 but are subject to fluctuation due to future changes in the plan and other factors.

Ooedo Onsen Reit Investment Corporation 6

Financial Status – Implementation of Refinancing
LTV decreased further (38.6% on a book value basis and 33.8% on an appraisal value basis) due to scheduled
repayments and appropriation of some cash reserves for refinancing
Ratio of long-term borrowings

Breakdown of lenders

LTV

Number of syndicate lenders: 13

LTV(book value basis)
LTV(appraisal value basis)

(%)
40.0

38.6

100.0

(%)
100.0

38.4

38.3

38.0

95.0

36.0
89.7
33.8

32.0

90.0

33.4

34.0

10th
May 2021(Forecast)

9th
Nov. 2020(Actual)

89.8

32.9

11th
Nov. 2021(Forecast)<Breakdown of others, which stand at 23.0%>
The Towa Bank 3.4%

Fukoku Mutual Life Insurance 3.1%

The Iyo Bank 3.2%

The Bank of Fukuoka 2.6%

The Tochigi Bank 3.1%

The Juhachi-Shinwa Bank 2.5%

The First Bank of Toyama 3.1%

The Bank of Kochi 1.9%

85.0

9th
Nov. 2020(Actual)

10th
May 2021(Forecast)

11th
Nov. 2021(Forecast)

Overview of maturity（million yen）
5,000

Long-term borrowings

Average remaining duration

Short-term borrowings

8th period: 1.7 years → 9th period: 1.3 years

1,487 million yen

4,000
3,000
2,000
1,000
0

9th

10th

11th

12th

13th

14th

Nov-20May-21

Nov-21

May-22

Nov-22

May-23

Ooedo Onsen Reit Investment Corporation 7

Forecast for the 9th Fiscal Period ended November 2020
Revenue and profits increased from the forecasts due to gain onsale and insurance income. Revenue and profits decreased fromthe previous period due to the absence of variable rents.
Distributions per unit increased 81 yen from the forecast anddecreased 332 yen from the previous period(thousand yen)
Item

Operating revenue

8th period

9th period（Actual）（Actual）

Component
ratio

Primary rent

1,433,658

Component
ratio

1,316,259

9th period(Forecast as ofJul. 21, 2020)

Difference-74,902

1,335,459+23,295

1,230,390-85,868

1,230,431

-41

93.5%

1,230,431

100.0%

1,230,390-41

1,230,431-41

Variable rent

6.5%

85,8270.0%--85,827--

Secondary rent

105,122

104,852-270

104,753+98

Others12,276

23,513+11,236275+23,238

Lease operations
revenue gain/loss

867,329784,094-83,235

764,654+19,439

Operating income

678,438

594,331-84,107578,179+16,152

Ordinary income

546,279

467,639-78,639448,755+18,884

Net income

545,107466,697-78,409447,755+18,942

2,824

3,059

235

2,824

+235

Total distribution

547,887

469,752-78,135

450,689+19,063

Total units outstanding

235,347

235,347-

235,347

-

2,328

1,996

-332

1,915

+81

12

13

+1

12

+1

4,178

3,803

-375

3,792

+11

1,305,540

1,228,018-77,521

1,209,537+18,481

Depreciation

438,210444,170+5,960444,882

-711

CAPEX

169,743

175,941+6,197

190,000-14,058

DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI・Gain on sale (part of land of Reoma Resort)+15,785

・Increase in other operating revenue (Insurance revenue)+7,453・Increase in other expenses (Repairs covered by insurance)-3,487・Expenses related to sale (part of land of Reoma Resort)-1,072

Lease operations revenue gain/loss
Increase in selling, general and admininstration(non-deductible consumption taxes: ‐9,158）
・Decrease in finance-related expenses, etc.

1,358,755(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.

(Note)(thousand yen)

Operating income

Difference

Fixed rent

Excess cash distribution

Main factors for increase/decrease from forecast

Ordinaly income+19,439-3,286+16,152+1,509+18,884

Main factors for increase/decrease
from previous fiscal period(thousand yen)・Absence of variable rent (Impact of COVID-19)
・Gain on sale (part of land of Reoma Resort)
・Decrease in other operating revenue (Insurance revenue)
・Increase in tax and public charge
・Expenses related to sale (part of land of Reoma Resort)
・Decrease in other expenses(Repairs covered by insurance)
・Increase in depreciation-85,827+15,785-4,548-3,497-1,072+1,051-5,960

Lease operations revenue gain/loss-83,235

・Decrease in asset management fees

+2,250・Decrease in expenses for General Unitholders’ Meeting
・Increase in selling, general and admininstration(non-deductible consumption taxes）+5,689Operating income
・Decrease in finance-related expenses

Ordinaly income

Main financial indicators
Total assets
Interest-bearing debt
Total liabilities
Total net assets
LTV (book value basis)
NAV per unit

-9,158-84,107+4,818-78,639(million yen)

37,42814,457
16,325
21,102
38.6%
112,115 yen

Ooedo Onsen Reit Investment Corporation 8

Priorities for the Time Being: Determining Risk and Building Defenses (1)Immediate priority is defense from COVID-19
Priority is placed on responding to crisis that change daily by determining risks on the assumption of
the worst-case scenario and checking the weaknesses and strengths of the Ooedo-Onsen Monogatari Group
Current Risks

Current Condition

Weaknesses

Strengths

Risks in facility operation
Although the average room occupancy
rate recovered to 84.9% in November
occupancy due to a third wave and 2020, it has now fallen due to the third
wave and temporary suspension of thesubsequent resurgences
Go To Travel campaign.
COVID-19 control measures have
• Whether crowds can be avoided
become firmly established and haveor a low level of crowdedness
also been welcomed by customers forabout which people feel safe cangiving peace of mind and ensuring
be provided
safetyDemand among mainstay domestic• Risks associated with industry
customers in nearby areas andregular customers, including elderly
characteristics and portfolio
customers, is on the recovery path・ Possibility of a decrease in

Many customers are price sensitive andare influenced by campaigns such as the
Go To Travel campaign.

Most customers come by car fromneighboring markets.
Persistent support of domestic regularcustomers.

If a "space where people feel safe" canMeasures to prevent "crowding" cannot be
be provided through the Ooedo model +avoided when staging entertainment or
COVID-19 control measures, there will beeventsenormous potential demandConcentration risk when the OoedoOnsen Monogatari Group is the only
tenant.

Business of affordable, close-distance,and short-term stays that will be the firstto meet demand after recovery.

Risks in securing rent income• Securing of fixed rent payment
which has accounted for over
90% of rent income• Corporate strength of the OoedoOnsen Monogatari GroupIf the COVID-19 situations worsens again
Normally, approx. 50% of GOP,
from this spring, the risk of requests toa relatively low rent payment ratio +postpone payment or to reduce or waivesponsor commitment.
rents cannot be ruled out.
Additional financial measures must be
The nationwide chain facility network
Support of sponsoring shareholders andtaken if the infection spreads or the period diversifies the risk of infection outbreak in
lenders has been confirmed.
is prolonged.
specific areas.

There have been no requests to
reduce fixed rents so far.

Ooedo Onsen Reit Investment Corporation 9

Priorities for the Time Being: Determining Risk and Building Defenses (2)Current Risks

Current Condition

Strengths

Weaknesses

Financial risks• Risks involved in cash
management due to a decrease
in rent income

There is no problem with cash
management even when variable rent iszero.

Funds in hand are at an appropriate level inview of fund efficiency, which will be
Stability of master lease and fixed rents
insufficient if a significant delay in theand controlled CAPEX.
collection of fixed rents occurs.

• Risk that funding conditions areaggravatedRefinancing in November 2020 was
reduced through the use of funds on
hand and debt costs rose

The recovery of tenants' business resultsin the future and the policy of financial
institutions towards hotel REITs will affectupcoming refinancing (May 2021)

Relatively relaxed financial covenants anddiversified borrowers (syndicate).

• Real estate appraisal value and
LTVAppraisal value for the 9th period (ended
November 2020) remained mostly
unchanged from the previous period(down 0.02%) and LTV (appraisal value
basis) was 33.8%.

Depending on sales cases in the future
market and actual market prices as well
as changes in long-term expectations forthe rent level, the appraisal value will beaffected.

Relatively low level of LTV (appraisal value
basis) as a buffer.
While many locations are outside cities,
the impact of COVID-19 is relatively large
in urban areas with high population density
and locations for inbound tourism.

Defense measures① Intensive monitoring of the overall business conditions of facilities owned and sponsor group⇒ Determine risks and actively exchange opinions and suggestions② Reduction of non-essential expenditure and comprehensive cash management through information
sharing with lenders③ Proposal of financial solutions to sponsors and examination thereof⇒ For example, feasibility of off-balance sheet financing using a third-party bridge fundOoedo Onsen Reit Investment Corporation 10

Forecast for the 10th Fiscal Period ending May 2021
Distributions per unit are expected to fall 16 yen from the forecast due to higher finance-related expenses,
offsetting a decrease in asset management fees.
Revenue and profits are expected to decrease from the previous
Main factors for increase/decrease from forecast(thousand yen)period due to the absence of gain on sale and insurance income(thousand yen)
Item

Operating revenue

9th period

10th period（Forecast）（Forecast）

Component
ratio

Primary rent

1,358,755

Component
ratio

1,230,390

10th period(Forecast as ofJul. 21, 2020)

Difference

Difference・Increase in other operating revenue (Insurance revenue)
・Increase in other expenses (Asbestos monitoring fee)

Lease operations revenue gain/loss+799

・Decrease in asset management fees

+2,358Operating income

1,344,537-14,218

1,343,452+1,0841,230,417+27

1,230,431-13

Fixed rent

100.0%

1,230,390

100.0%

1,230,417+27

1,230,431-13

Variable rent

0.0%

-

0.0%

-

-

-

-

+1,436-1,513・Increase in finance-related expenses

Ordinaly income+2,363-7,687-5,323Main factors for increase/decrease
from previous fiscal period(thousand yen)

Secondary rent

104,852

112,408+7,556

112,746-338

Others23,513

1,711-21,801275+1,436

Lease operations
revenue gain/loss

784,094

767,048-17,046766,248+799

Operating income

594,331

583,447-10,883

581,084+2,363

Ordinary income

467,639

449,090-18,549

454,414-5,323

Net income

466,697448,090-18,607453,414-5,323

3,059

4,236

+1,1762,824+1,412

Total distribution

469,752

452,336-17,415456,102-3,765

Total units outstanding

235,347

235,347-

235,347-

Excess cash distribution

DPU (yen)（Excess cash distribution

1,996

1,922

-74

1,938

-16

18

+5

12

+6

3,803

3,814

+11

3,834

-20

1,228,018

1,215,245-12,773

1,215,274-28

Depreciation

444,170449,674+5,503449,026

+648

CAPEX

175,941

94,646-81,294

180,000-85,353

FFO per unit (yen)NOI

Lease operations revenue gain/loss
・Decrease in asset management fees
・Decrease in selling, general and admininstration(non-deductible consumption taxes)
・Increase in selling, general and administration(unitholder-related fees)
・Increase in selling, general and administration(Review of legal fees, etc.)

Operating income
・Increase in finance-related expenses

Ordinaly income13

per unit)

・Increase in secondary rent
・Absence of gain on sale (part of land of Reoma Resort)
・Decrease in other operating revenue (Insurance revenue)
・Decrease in other expenses (Asbestos monitoring fee)・Increase in depreciation

Main financial indicators
Total assets
Interest-bearing debt
Total liabilities
Total net assets
LTV (book value basis)+7,556-15,785-6,016+1,513-5,503-17,046+3,288+9,158-2,262-2,243-10,883-6,442-18,549(million yen)

37,18014,281
16,09921,081
38.4%

Ooedo Onsen Reit Investment Corporation 11

Forecast for the 11th Fiscal Period ending November 2021
Ordinary income is expected to drop by around 2.5% from the 10th fiscal period,
mainly due to higher finance-related expenses.
Distributions per unit are expected to be down 47 yen from the 10th fiscal period(thousand yen)
Item

Operating revenue

10th period

11th period（Forecast）（Forecast）

Component
ratio

Primary rent

1,344,537

Component
ratio

1,230,417

Difference

1,343,038-1,4991,230,417-

Fixed rent

100.0%

1,230,417

100.0%

1,230,417-

Variable rent

0.0%

-

0.0%

-

-

112,345-62

Secondary rent

112,408

Others

1,711

275-1,436

Lease operations
revenue gain/loss

767,048

763,914-3,133Operating income

583,447

580,386-3,060Ordinary income

449,090437,940-11,150

Net income
Excess cash distribution

448,090
4,236

436,940
4,236-11,150-452,336441,275-11,061

Total units outstanding

235,347

235,347

-

1,922

1,875

-47

18

18

-

3,814

3,782

-32

1,215,245

1,215,658+412

Depreciation

449,674

453,220+3,545

CAPEX

94,646

120,649+26,003

DPU (yen)
per unit)

FFO per unit (yen)NOI(thousand yen)・Decrease in other operating revenue (Insurance revenue)-1,436

・Decrease in other expenses (Asbestos monitoring fee)

+1,513・Increase in depreciation

Lease operations revenue gain/loss
・Decrease in asset manaement fees

Operating income
・Increase in finance-related expenses, etc.

Total distribution（Excess cash distribution

Main factors for increase/decrease
from previous fiscal period

Ordinaly income

Main financial indicators-3,545-3,133+273-3,060-8,089-11,150(million yen)

Total assets

36,844

Interest-bearing debt

14,106

Total liabilities

15,778

Total net assets

21,065

LTV (book value basis)38.3%

Ooedo Onsen Reit Investment Corporation 12

Changes in Key IndicesDistributions per unit for the 9th fiscal period came to 1,996 yen.
Forecasts for the 10th and 11th fiscal periods are based on the assumption that the variable rent amountwill be zero under the impact of COVID-19
8th period

9th period

10th period

11th period(May 2020)(November 2020)(May 2021)(November 2021)

ActualActualForecast

Forecast

DPU per unit

2,328 yen

1,996 yen

1,922 yen

1,875 yen

FFO per unit

4,178 yen

3,803 yen

3,814 yen

3,782 yen

LTV

40.0％

38.6％

38.4％

38.3％

(appraisal value basis)

35.9％

33.8％

33.4％

32.9％

NAV per unit

108,678 yen

112,115 yen

113,531 yen

114,879 yen(book value basis)

LTV(Note) Unrealized gain (Appraisal value – book value) were 5.2 billion yen at the end of the 9th fiscal period (up 0.8 billion yen from the end of the previous fiscal period).
LTV (on an appraisal value basis) for the 10th and 11th fiscal periods is based on the assumption that appraisal value will remain unchanged.

Ooedo Onsen Reit Investment Corporation 13

Major Factors for Increase/Decrease in DPU: Operation Focused on Stable Generation of Cash
Under the impact of COVID-19, FFO per unit in the 9th and 10th fiscal periods is expected to decreaseby around 10% and the payout ratio will be around 51%
(yen)
5,000

9th period(November 2020)

8th period(May 2020)

4,178

－353
＋25

4,000

Lease
Depreci
operation ation
revenues
gain/loss

3,000

＋24

－38

3,803
+20

ExpensesFinanceNonfor Generaldeducti related
Unitholders’expensesble
Meeting
consumption
taxes

10th period

11th period(May 2021)(November 2021)

－26

+23

+13

+38

Lease
operation
revenues
gain/loss

Depreci
ation

Asset
management
fees

Nondeducti
ble
consum
ption
taxes

－27

3,814
－13

Financerelated
expenses+15

Depreciation
Lease
operation
revenues
gain/loss

－34

3,782

Financerelated
expenses

2,000

1,000

2,328

1,996

1,922

1,875

10th period(Forecast)

11th period(Forecast)0
8th period(Actual)

9th period(Actual)(Note 1) The figures on the upper side and lower side of the bars show FFO per unit and distributions per unit, respectively.
(Note 2) As for the signs for each item, “＋” indicates those that lead to the increase in distribution per unit and “-” indicates those that lead to the decrease in distribution per unit.

Ooedo Onsen Reit Investment Corporation 14

Ⅱ. Investment Results

Ooedo Onsen Reit Investment Corporation 15

Portfolio Data (1)Appraisal values remained unchanged, with the exception of Reoma Resort.
The unrealized gain (appraisal value – book value) increased to 5.28 billion yen(up 0.88 billion yen period on period) at the end of the 9th period
PropertyNo.

S-1

Property name

Ooedo-Onsen Monogatari Reoma Resort

Location

Kagawa Prefecture

Building age(years)29.4／29.7

Roomoccupancy
rate(Note 1)

Acquisition
price(million yen)Appraisalvalue(million yen)NOI
(million yen)

241

49.0%

9,756

8,860

311

6.4%

4.6% 1.9／1.6％

64.9%

3,656

3,830

106

5.8%

3.0%

14.2%

46.3%

2,657

2,810

72

5.5%

3.3%

12.0%

Number of
rooms

NOI
yield
(Note 2)After
depreciation
NOI yield

PML(Note 2)

(Note 3)S-2

Ooedo-Onsen Monogatari Ise-shima

S-3

Ito Hotel New Okabe

Mie Prefecture

40.7

83

Shizuoaka Prefecture

30.1

73

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

Shizuoaka Prefecture

46.9

76

62.2%

2,997

3,200

92

6.2%

3.9%

12.6%

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

Shizuoaka Prefecture

46.2

64

52.1%

1,910

2,020

57

6.0%

2.9%

14.9%

S-6

Ooedo-Onsen Monogatari Awara

Fukui Prefecture

39.3

95

44.6%

1,901

1,990

65

6.8%

4.5%

14.9%

S-7

Ooedo-Onsen Monogatari Kamoshika-so

Tochigi Prefecture

24.8

60

41.0%

1,222

1,260

34

5.7%

3.4%

3.0%

S-8

Ooedo-Onsen Monogatari Ikaho

Gunma Prefecture

37.1

40

66.0%

1,299

1,370

35

5.5%

3.4%

1.0%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-moriChiba Prefecture

24.7

41

62.7%

819

859

23

5.7%

3.6%

4.8%

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Nagasaki Prefecture

38.4

100

62.1%

1,637

2,570

71

8.8%

6.3%

6.4%

S-11

Ooedo-Onsen Monogatari Kounkaku

Miyagi Prefecture

55.0

98

42.3%

1,040

1,220

39

7.6%

3.4%

3.9%

(Note 5)

S-12

Kinugawa Kanko Hotel

Tochigi Prefecture

39.3

172

45.9%

3,870

6,130

169

8.7%

5.5%

2.1%

S-13

Ooedo-Onsen Monogatari Kinosaki

Hyogo Prefecture

52.1

103

60.5%

2,084

2,650

79

7.6%

5.5%

11.8%

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel Fukushima Prefecture

56.2

123

51.5%

1,230

1,470

51

8.3%

3.8%

4.6%

39.0

1,369

51.9%

36,08240,239

1,212

6.7%

4.2%

2.7%

Total/Average(Note 1) Room occupancy rate is for the 9th period ended November 30, 2020 of the investment corporation.
(Note 2) (Average) NOI yield and (average) after depreciation NOI yield indicate annualized figures.
(Note 3) As for Building age and PML of Ooedo-Onsen Monogatari Reoma Resort, figures on the left indicate those of Hotel Reoma no Mori while figures on the right indicate those of New Reoma World.
(Note 4) The room occupancy rate of Ito Hotel New Okabe is a comprehensive figure including the rate of Surugatei, a property not owned by the investment corporation.
(Note 5) The room occupancy rate of Ooedo-Onsen Monogatari Kounkaku is a comprehensive figure including the rate of the Annex, a property not owned by the investment corporation.

Ooedo Onsen Reit Investment Corporation 16

Portfolio Data (2)The investment ratio in certain types of properties improved slightly,
while the investment ratio by region is distributed across the country, excluding Hokkaido and Okinawa
Investment ratio by facility
Acquisition price basis

Rent income basis (Note)

Appraisal value basis

3.4% 2.9%
3.4%

2.3%

3.6%
4.5%

3.1%
3.4%
3.7%

3.0% 2.1%

5.3%

6.4%

10.7%
5.8%
7.4%

6.0%

15.2%

10.1%

14.2%

6.1%

6.6%
7.0%

8.3%

25.6%
5.3%

5.0%

5.3%

2.9% 2.0%

4.4%

22.0%

4.9%

27.0%

3.0%
3.4%
4.2%

6.4%

9.5%

7.6%

8.0%

8.8%

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

Investment ratio by region
Acquisition price basis
4.5% 6.3%

27.0%

20.0%

5.8%
5.3%

31.1%

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 Nagaski 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

Ooedo Onsen Reit Investment Corporation 17

Operating Results of Individual Properties (1)Occupancy rate and RevPAR at all facilities fell significantly from the same period in the previous year
due to the impact of COVID-19

1. Operating results of the accommodation sector
Room occupancy rate (%)
Property
No.

Property name

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

ADR (yen)

ChangePrevious
corresponding
periodcumulative total

9th period
cumulative
Total

RevPAR (yen)ChangePrevious
corresponding
periodcumulative total

9th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative total

9th period
cumulative
Total

ChangeS-1

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

88.8

49.0

-44.8%

32,40235,835+10.6%

28,772

17,559-39.0%

1,670

904-45.8%

S-2

Ooedo-Onsen MonogatariIse-shima

93.2

64.9

-30.4%

33,324

31,980-4.0%

31,057

20,755-33.2%

566

365-35.5%S-3

Ito Hotel New Okabe

92.2

46.3

-49.8%

28,53728,723+0.7%

26,311

13,298-49.5%

613

294-52.1%

S-4

Ooedo-Onsen Monogatari
Atami

94.0

62.2

-33.8%

33,90131,316-7.6%

31,866

19,478-38.9%

528

303-42.7%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

88.6

52.1

-41.2%

29,32531,571+7.7%

25,981

16,448-36.7%

343

212-38.0%

S-6

Ooedo-Onsen Monogatari
Awara

86.6

44.6

-48.5%

29,55028,559-3.4%

25,59012,737-50.2%

555

246-55.6%

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

85.9

41.0

-52.3%

27,534

26,919-2.2%

23,651

11,036-53.3%

310

137-55.6%

S-8

Ooedo-Onsen Monogatari
Ikaho

99.0

66.0

-33.3%

31,22728,517-8.7%

30,914

18,821-39.1%

262

156-40.5%

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

69.6

62.7

-9.9%

26,842

27,722+3.3%

18,682

17,381

-7.0%

208

154

-25.9%

Ooedo Onsen Reit Investment Corporation 18

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

Property name

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

RevPAR (yen)ADR (yen)

ChangePrevious
corresponding
periodcumulative total

9th period
cumulative
Total

ChangePrevious
corresponding
periodcumulative total

9th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative total

9th period
cumulative
Total

ChangeS-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

93.9

62.1

-33.9%

31,91930,406-4.7%

29,971

18,882-37.0%

622

382-38.6%

S-11

Ooedo-Onsen Monogatari
Kounkaku

82.2

42.3

-48.5%

24,47824,885+1.7%

20,12010,526-47.7%

498

252-49.3%

S-12

Kinugawa Kanko Hotel

88.5

45.9

-48.1%

30,013

28,846-3.9%

26,561

13,240-50.2%

1,075

484-55.0%

S-13

Ooedo-Onsen Monogatari
Kinosaki

97.8

60.5

-38.1%

30,09232,517+8.1%

29,42919,672-33.2%

674

424-37.1%

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

87.1

51.5

-40.9%

27,71928,841+4.0%

24,143

14,853-38.5%

662

367-44.5%

Total

89.3

51.9

-41.9%

30,06230,512+1.5%

26,845

15,835-41.0%

8,593

4,686

-45.5%

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

S-1

Property name

Ooedo-Onsen Monogatari
Reoma Resort <New Reoma World>

Previous
corresponding
periodcumulative total

331,425

9th period
cumulative
Total

185,874

Sales (million yen)

Change-43.9%

Previous
corresponding
periodcumulative total

1,298

9th period
cumulative
Total

727

Change-44.0%(Note) Number of guests is the total number of people using New Reoma World during the period.

Ooedo Onsen Reit Investment Corporation 19

Ⅲ. Key Policies in Forthcoming Periods

Ooedo Onsen Reit Investment Corporation 20

Key Policies in Forthcoming Periods (1): Changes in Utilization of Leisure Time Caused by COVID-19
Responses to changes in the post-coronavirus period will be growth opportunities■ What has been lost due to the COVID-19 crisis in people’s daily lives• Daily life, the hustle and bustle of big cities, and work have shifted to business interruption, teleworking,and staying at home
• Everyday enjoyment such as entertainment, art, culture, sports and interactions with people has been lost
< What people hope to dowhen restrictions on activities are lifted >What should be taken back (recovery)
and what cannot be taken back (changes)

49.3
48.9

Dining out

What should be taken back
⇒ Daily leisure

What cannot be taken backDomestic travel⇒ Risk of infection and anxiety about

Theme park or other leisure facilities

daily life and income

37.9

Shopping
Concert or other live performances
Banquet or party
Zoo or aquarium■ Now, people want to take backordinary everyday life rather thanan extraordinary experience.
■ Desire for interactions andactivities with people (crowds) has
accumulated while staying home.

Overseas travel
Watching on-site sports■ Hygiene control, concerns about
crowds and social distancing.
■ Anxiety about work and income

KaraokeMarathon, jogging, or walking
MuseumGathering for lessons or hobby
Theatrical performance or art…
Other sports than the above…
Amusement arcade
Gambling or pachinko
Other
Nothing0

What are the conditions for leisurein the post-coronavirus period?

22.2
17.9
16.0
14.6
13.9
13.2
12.8
12.3
11.6
11.1
9.7
9.1
4.9
4.1
3.4
12.3
20

40

60 (%)

Source: “Survey on COVID-19: About half of respondents want to dine out
and travel domestically after COVID-19 subsides” by Brand ResearchInstitute, Inc.

Ooedo Onsen Reit Investment Corporation 21

Key Policies in Forthcoming Periods (2): Challenges with Safe and Secure LeisureRequirements for leisure services in the post-coronavirus period: Capturing the mass market■ Services capable of providing both safety and security as well as liveliness• Provide the same liveliness as before as much as possible while adequately ensuring safety• Safe gathering supported with appropriate distancing and hygiene control⇒ Rather than independent and private rooms, have communication spaces that people can enjoy with peace of mind.

■ Accessible and reasonable use of leisure: Affordable, close-distance and short-term• Offer affordable leisure as an extension of daily life as people face concerns about work and life.
⇒ Short distances accessible by car and at reasonable prices

Strengths of properties owned and expectations< Measures taken by the Ooedo-Onsen• Requirements in the post-coronavirus period match the strengths of
Monogatari Group >Ooedo-Onsen Monogatari － Measures that are firmly established through theimplementation of sponsor projects and that are also welcomed by customers• Implement COVID-19 measures such as the prevention of infectious diseases andcustomer crowd control ~ Formation of infectious disease control project team by sponsors• Hot springs surrounded by nature rather than populated cities with high risk
• Easily accessible by car

Ooedo Onsen Reit Investment Corporation 22

(References) 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
Japanese people have enjoyed hot spring trips since ancient times 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 as advisors and add or renew the Group’s
measures against infectious diseases and new, safer activities as appropriate.

1. Promises at restaurants

2. Promises at baths

Safety and security, and full satisfaction
Enjoy a buffet in a new style.
• Distance maintained of 1.5 meters 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. Promises of facility staff members
Safety and security, and sincere hospitality
Ooedo staff members help create exclusive,
special memories.
• 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.

• Guests are notified about crowded hours of baths andare guided to select a different time.
• Changing rooms are ventilated 24 hours/day.
Windows are kept open for more ventilation.
• The number of people using a sauna together is limited,etc.

Slippers stored in a bag

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

Blocking shields
in front of a store• Take their temperature and fill in a survey sheet
when arriving at a facility.
• Refrain from coughing or sneezing in the presence ofother guests. Have good manners and refrain from loudconversations, etc.

Alcohol hand sanitizers placedin different places

Ooedo Onsen Reit Investment Corporation 23

Key Policies in Forthcoming Periods (3):To the Next Growth Stage, Overcoming Crisis
Expectations for recovery: Ooedo-Onsen Monogatari Group’s facilities can precede demand recovery

Return of neighboringcustomers and domestic
regular customers

Return ofdomestic travelers

Return offoreign visitors to Japan

Perspective on future external growth after COVID-19■ Urgently needed diversification of portfolio and risk
Targeted operators/properties= Provision of reassuring private spaces + offering bustling spaces while securing safety and peace of mind
• Thick and diverse customer groups = Capture mass market• Chain operation that enables flexible sales strategy and cost control• Operators capable of using ICT■ Setting a sufficient rent payment ratio that allows for the maintenance of a relatively
high fixed rent ratio• True value of stable REIT to be tested

Respond to changes in the market and seek the next growth opportunities
while taking defensive actions■ Opportunities for acquiring properties at good locations on the assumption of operator replacement■ Securing investment partners (bridge funds) amid global monetary easing
Ooedo Onsen Reit Investment Corporation 24

External Growth Strategy (1): The Number of Properties in the Sponsor Pipeline Is Increasing Steadily
Forms the basis for stable revenue of the Investment Corporation in the medium to long term
Facilities acquired by the Ooedo Onsen Monogatari Group after the establishment of the Investment Corporation (March 2016)
August 2016 - Acquired

October 2016 - Acquired

October 2016 -April 2017 -July 2017 -July 2017 -April 2018 -Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

Ooedo-Onsen Monogatari
Kounkaku

Ooedo-Onsen Monogatari
MasuyaOoedo-Onsen Monogatari
Hotel Suiyotei

Ooedo-Onsen Monogatari
Beppu Seifu

Ooedo-Onsen Monogatari
Gero Shin-kan

Ooedo-Onsen Monogatari
Nanki Kushimoto(Nagasaki City,
Nagasaki Prefecture)(Osaki City, Miyagi Prefecture)(Osaki City, Miyagi Prefecture)(Atami City, Shizuoka Prefecture)(Beppu City, Ooita Prefecture)(Gero City, Gifu Prefecture)(Higashi Muro County,
Wakayama Prefecture)

August 2018 -April 2019 -August 2019 -July 2020 -July 2020 -November 2020 -Ooedo-Onsen Monogatari
Hotel Kisoji

Ooedo-Onsen Monogatari
TAOYA Shima

Ooedo-Onsen Monogatari
Amakusa Hotel Kameya

Ooedo-Onsen Monogatari
Shiomi-so

Saikaibashi Corazon Hotel

Sendai Akiyu-onsen
Iwanumaya(Kiso County,
Nagano Prefecture)(Toba City, Mie Prefecture)(Kamiamakusa City,
Kumamoto Prefecture)(Murakami City,
Niigata Prefecture)(Sasebo City,
Nagasaki Prefecture)(Sendai City,
Miyagi Prefecture)

Some of the other facilities of the Ooedo Onsen Monogatari GroupTokyo Odaiba (Note)
Ooedo-Onsen Monogatari

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

Ooedo-Onsen-Monogatari
Minoh Kanko Hotel

Minoh Onsen Spa Garden

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

Ooedo-Onsen Monogatari
Nikko Kirifuri

Yamashiro Onsen
Yamashitaya(Nikko City, Tochigi Prefecture)(Kaga City,
Ishikawa Prefecture)(Note) The building of this facility is owned by the sponsor on the land leased for a fixed term; however, because the current fixed term is insufficient for the investment of the Investment Corporation,
there is no plan to acquire it soon.

Ooedo Onsen Reit Investment Corporation 25

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 bridge finance, while obtaining and considering informationon the sale of various types of properties such as hotels in urban areas and accommodation facilities
targeting inbound customers as medium-to-long-term strategy

Categories of focus for the time being■ Properties located in urban areas (ordinance-designated cities and core cities)■ Various types of accommodation facilities including small and medium ones
■ Properties such as entertainment, amusement and spa facilities located in urban and suburban areas■ Various accommodation and resort facilities able to take in inbound tourism demand<Property information (excluding sponsor properties) in the 9th period (from June 1, 2020 until November 30, 2020)>
Ordinance-designated cities

Core cities

Other

Total

Lodging

8

2

21

31

Other
(day trips, etc.)

1

0

0

1

Other lodgings

42

15

14

71

Entertainment, Amusement

0

0

0

0

Sports, beauty,
health promotion facilities

1

0

1

2

52

17

36

105

Onsen/Spa

Total

Ooedo Onsen Reit Investment Corporation 26

External Growth Strategy (3)Considering utilization of a variety of bridge funding.
Expecting an increase in the number of deals for which preferential negotiation rights are secured＜By source＞<Methods for acquiring properties>
2.9% 4.8%

16.2%

73.3%

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

Bridge funding
by a third party
Developers
Financial Instisutions
Real Estate Brokers
OthersPreferential
negotiation rights for
direct negotiations
with the sellerCollaboration with operators
Acquisition in sync with the financing period of
the Investment Corporation（Pre COVID-19)
Final phase of acquisitions(including those withcompleted bridge financing)（Readjustment required infuture）（Post COVID-19）（Post COVID-19）

Submission of LOI
completed

Due diligence/negotiations underway

Total

Lodging

2

1

0

3

Other
(day trips, etc.)

1

0

0

1

Other lodgings

8

5

0

13

Entertainment, Amusement

1

0

0

1

Sports, beauty,
health promotion facilities

0

0

0

0

12

6

0

18

<Progress of new acquisitions>

Onsen/Spa

Total(Note) The number of properties as of December 31, 2020 is presented. The Investment Corporation has preferential negotiation rights to some of these properties.
However, the Corporation may not be able to or is not obligated to acquire such properties.

Ooedo Onsen Reit Investment Corporation 27

Internal Growth Strategy (1)A rent structure mainly based on fixed elements for securing stable cash flow

1. Leasing and rent structure In addition to the leasing structure focusing on stability in the sponsor properties, variable rent is introduced in some properties
with future upside potential. The basic strategy is “based on stability + partial variable.” Utilize variable rent structure more in the future according to the scale expansion of portfolio and an improvement in the degreeof diversification of risks.
Lease conditions for properties master-leased to the Ooedo-Onsen Monogatari Group
Contract period:

20 years

Modified GOP (Note)

Non-cancellation period:

5-7 years
Rent revision:every

3 years

Before the impact of COVID-19 (May 2020 period)：

Primary rent
Fixed rent component

Approximately 93.5％
100.0％
After the impact of COVID-19 (November 2020 period)：

Secondary rent
Variablerent
component

50% to 60% of the modified GOP
Amount equivalent to real estate
related expenses of each facility

Approximately 6.5％
0.0％

 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
Ooedo Onsen Reit Investment Corporation 28

Internal Growth Strategy (2)Consider measures to improve profits in the short term and the medium-to-long termon the assumption of overcoming major difficulties caused by the pandemic

2. Higher variable rents through improvements in facility performance Increase of variable rents through improvement in tenant performance [immediate future, short-to-medium term]・Collaboration with tenants at sponsor properties- Cooperation with and proposal of various measures to improve footfall- Improvement of GOP through control of costs including repair and maintenance expenses
・Also consider the use of other arrangements at non-sponsor properties, such as minimum guarantee (fixed) + variable rent,
to seize the upside of post-COVID recovery

 Utilization of variable rents drawing on new internal growth elements of diverse properties after scale expansion
through external growth [medium-to-long term]・Inbound tourism market and facilities for utilizing leisure time in urban areas

3. 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
expansion of the portfolio
・Measures to increase competitiveness that share the perspective with tenants and additional investments in new functions
・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 terms<Measures to increase profits>
Upside of rent revenue throughan improvement in the performance oftenants
Raising the level of rent revenue
through value-increasing investment

Short term

Medium to long term

LimitedMedium to high potential

Currently, stability is the basis for the portfolio

Use of variable rents by acquiring
various types of properties

LimitedHigh potential

There is room for a potential increase in value,
but the use of internal funds is limited

Large-scale, value-increasing investment
associated with scale expansion

Ooedo Onsen Reit Investment Corporation 29

Financial Strategy
Implementation of flexible financial strategies while attaching importanceto the establishment of a conservative financial base
Basic policy■ Conservative LTV control: Maintain a conservative level while targeting around 40% for the time being■ Flexible equity financing: Consider conducting equity financing, taking into account the medium- to long-term enhancement of the value ofinvestment units and the dilution of distribution■ Promotion of the prolongation of average maturity of debt and the diversification of repayment periods: Reduction of refinancing risk
■ Reduction and stability of debt costs: Reduction of costs and interest volatility risk through the diversification of financing methods andfinancing sources

Future challenges■ Promotion of scale expansion and the diversification of risks in portfolio
・ Acquisition of a high credit rating and new financing methods, such as investment corporation bonds through the high credit rating・ Agility and improved flexibility in short term LTV control
・ Improvement in the FFO payout ratio and expansion of free cash flows through an improvement of debt financing conditions(creation of free cash power for value-increasing investment)<Use of internal cash>
Focus on ensuring
cash on hand during
the current COVID-19
crisisCapitalexpenditure
Depreciation

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

Scheduled
repayment
Free cash

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

Ooedo Onsen Reit Investment Corporation 30

Investing Targets and Building of the Portfolio
Investments are made in a wide range of facilities for utilizing leisure time, particularly those related toonsen/spa, that provide consumers with an enjoyable and rich experience during their leisure time

Ooedo Onsen Reit’s Investing Targets

Building of a portfolio as a REIT focused on facilities
aiming at utilizing leisure time

Shopping
Entertainment

H&BC

Accommodation

Dininganddrinking（Health &Beauty Care）

Onsen/spa

 With onsen/spa-related facilities as the focused targets, Taking note of consumption for services (experience-based
consumption) for which demand is expected to increase
both in Japan and among inbound tourists,
 Aim to build a portfolio focused on facilities aiming at
utilizing leisure time, or facilities that provide consumers
with a rich experience during their leisure time, that aresupported by consumers.

Theme park

Building of a hybrid portfolio that satisfies
both stability and growthSportsAmusements＋αOtherservices Maintenance of stable operation exemplified by the Ooedo
business model and the stable core portfolio centered on
fixed rent and net lease Acquisition of new growth factors by incorporating ever-increasing inbound tourism demand, new types ofaccommodation, various leisure facilities, etc.

Ooedo Onsen Reit Investment Corporation 31

Future Growth Targets
Enhancement of profitability and financial strength through the expansion of AUM~ Overcome the COVID-19 crisis and return to a growth path(billion yen)

Third stage(leap forward toward a medium-sized REIT)

Second stage(period to build a full-fledged portfolio)

200

Target AUM
five years later:
175 – 220 billion yen

AUM: More than 100 billion yen
Rating: “A” rating acquired

100

External properties:
100 – 120 billion yen

100

Sponsor properties:
75 – 100 billion yen

50

9th period(ended Nov. 30, 2020)

DPU

1,996 yenAround 2,500 yen

Around 2,600 – 2,800 yen

Marketcapitalization

16.1 billion yen

Around 50 billion yen

Around 100 billion yen

LTV

38.6％

(book value basis)(Note 1) The figures above are targets as of January 21, 2021, and are not guaranteed.
(Note 2) The market capitalization in the 9th period is calculated based on the closing price as of November 30, 2020.

Around 42 – 44%

Ooedo Onsen Reit Investment Corporation 32

Ⅳ. Market Environment

Ooedo Onsen Reit Investment Corporation 33

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
Trends in number of accommodation facilities
and FY total number of guests(facilities)
16,000(thousands)
150000No. of accommodation facilities (left axis)
FY total no. of guests (right axis)

12000012,000

Ratio of visits to onsen and spa facilities by age
(%)
80.0

Male

FemaleFamilies

Seniors

70.0
60.0

90000
8,000

31.3

50.0
40.0

60000
4,000

30000

30.0

0

0
FY2010FY2012FY2014FY2016FY2018Source: Onsen Use (2010 – 2018), Nature Conservation Bureau, Ministry of the Environment

Type of trip desired in the next 1-2 years(multiple responses)
Sightseeing, nature
Onsen
GourmetSightseeing, history/culture
Seashore resort
Theme park
Sightseeing, city
Walking in town
Long Stay
Shopping
Tour of world heritage sites
Japanese style inn
Resort hotel
Zoo/Aquarium

47.6%
46.9%
41.1%
37.2%
31.7%
31.3%
24.0%
21.7%
20.4%
19.0%
17.0%
16.8%
16.0%
15.4%

0%
20%
40%
60%
Source: JTBF Travel Intentions Survey (from “Annual Report on the Tourism Trends Survey 2020”
by Japan Travel Bureau Foundation)

26.7

25.9

27.2

31.9

28.1

32.5

30.5

32.2

27.1

30's

40's

50's

60's

70's

21.4

20.0
10.0

34.3

37.4
15.7

0.0
10's

20's

Source: “White Paper of Leisure 2019” by Japan Productivity Center(Note) The figures show the total ratios of visits by gender and age. The ratios do not add up to 100%.
The figures are presented for each age group by gender by the asset manager after
the respective ratios are accumulated, based on sourced data.

・The number of accommodation facilities’ guests has beenstable since FY2010 according to the Onsen Use Survey
by the Ministry of the Environment.
・Families and the elderly have been creating a firm customer
base and demand is also strong among people in their 20s.
・According to the Annual Report on the Tourism Trends Survey,“onsen” ranked top among types of trip respondents would
like to try.
Ooedo Onsen Reit Investment Corporation 34

Market Environment (2) : Future Leisure Market
Domestic demand: Expansion of consumption for services or experience-oriented activities means future
potential of the leisure market both qualitatively and quantitatively
Trends in the leisure market

Trends in the consumption of services
100%(billion yen)
1,800

80%
60%

67.3%

63.0%

59.0%

57.7%

HotelsAmusement park/Leisure landMembers-only resort club
Travel business (revenue on commission)

1,500

57.6%

0.4%

1,200

7.7%

900

40%

32.7%

37.0%

41.0%

42.3%

42.4%

300

49.4%

0

0%

2002

1980
1990
2000
2010
2019
Services (Experiences) Goods (Products)

2006

2010

2014

2018

Source: “Annual Report on the Tourism Trends Survey 2020”

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

13.3%

25.8%

600
20%

Level of satisfaction in a variety
of fields in current lives–Leisure/ leisure life

Priority matters in life

SatisfiedModerately satisfied
Neither satisfied nor dissatisfied
Slightly dissatisfied
Dissatisfied
Do not know

3.4%
Source: Public Opinion Survey on the Life of the People(a survey conducted in June 2019)

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

HealthAssets/Savings
Leisure/Leisure life

・The leisure market centered on hotels has been expanding
markedly in recent years.

Earnings/Income
EatingLiving・While “leisure” is ranked high in the public survey on “points ofemphasis in one’s future lifestyle,” facilities that satisfy
the needs remain insufficient.

Personal development/Upskilling
Durable consumer goods (cars, etc.)
Clothing
Others
0%

20%

40%

60%

80%

Source: Public Opinion Survey on the Life of the People (a survey conducted in June 2019)

Ooedo Onsen Reit Investment Corporation 35

Ⅴ. Appendix

Ooedo Onsen Reit Investment Corporation 36

Appraisal Value

Property
No.

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

Property name

Ooedo-Onsen Monogatari
Reoma Resort
Ooedo-Onsen MonogatariIse-shima
Ito Hotel New Okabe
Ooedo-Onsen Monogatari
Atami
Ooedo-Onsen Monogatari
Toi Marine Hotel
Ooedo-Onsen Monogatari
Awara
Ooedo-Onsen Monogatari
Kamoshika-so
Ooedo-Onsen Monogatari
Ikaho
Ooedo-Onsen Monogatari
Kimitsu-no-moriOoedo-Onsen Monogatari
Nagasaki Hotel Seifu
Ooedo-Onsen Monogatari
Kounkaku
Kinugawa Kanko Hotel
Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel
Total

Acquisition
Book valuePrice(million yen)(million yen)

Unrealized
profits andlosses(millionyen)Appraisal value (million yen)
8th period

9th period

May 31,
2020

Nov.30,2020

ChangeDirect capitalization method

Discounted cash flow method

Direct Cap Rate
8th period

9th period

May 31,
2020

Nov.30,2020

Discount Ratevaluation

8th period

9th period

May 31,
2020

Nov.30,2020

Terminal Cap Ratevaluation

8th period

9th period

May 31,
2020

Nov.30,2020

valuation

9,756

9,649

8,870

8,860

-10

-789

6.0%

6.0%

-

5.8%

5.8%

-

6.2%

6.2%

-

3,656

3,345

3,830

3,830

-

+484

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

2,657

2,592

2,810

2,810

-

+217

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

2,997

2,810

3,200

3,200

-

+389

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

1,910

1,798

2,020

2,020

-

+221

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

1,901

1,863

1,990

1,990

-

+126

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

1,222

1,179

1,260

1,260

-

+80

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

1,299

1,275

1,370

1,370

-

+94

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

819

838

859

859

-

+20

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

1,637

1,604

2,570

2,570

-

+965

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

1,040

1,016

1,220

1,220

-

+203

5.5%

5.5%

-

5.3%

5.3%

-

5.7%

5.7%

-

3,870

3,649

6,130

6,130

-

+2,480

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

2,084

2,127

2,650

2,650

-

+522

5.4%

5.4%

-

5.2%

5.2%

-

5.6%

5.6%

-

1,230

1,205

1,470

1,470

-

+264

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

36,082

34,95540,24940,239-10+5,283

－

－

－

－

－

－

－

－

－

Ooedo Onsen Reit Investment Corporation 37

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㎡ (Note)
63,896㎡

Site area:

9,637㎡
9,782㎡

Site area:

2,945㎡
10,211㎡

Total floor area:

Total floor area:

Area characteristics

Area characteristics (Note)

Ooedo-Onsen MonogatariIse-shima

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



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

Total floor area:

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

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

hot springs from the Heian Period.

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

Ooedo Onsen Reit Investment Corporation 38

Introduction of Properties (1)S-1：Ooedo-Onsen Monogatari Reoma Resort 〈Hotel Reoma-no-mori〉
2019

2020

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

31.6%

47.2%

51.5%

75.9%

87.5%

49.4%

88.8%

49.0% -39.8%--

34,70552,43733,262

29,041

34,64433,091

32,40235,835 +3,433

1,860

-

-

10,96624,75017,12922,04230,313

16,346

28,772

17,559 -11,213

18

0

0

92

208

145

198

260

1,778

1,670

Cumulativ e
total

Previous
corresponding
periodcumulative total

Jun.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

90.5%

85.2%

80.4%

34.8%

8.9%

-

ADR (yen)

33,59532,01427,473

26,77920,908

RevPAR (yen)30,40327,27522,088

9,319

292

266

207

89

Sales (million yen)

Cumulativ e
total

May

904

-765

S-2：Ooedo-Onsen Monogatari Ise-shima
2019

2020

9th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

Room occupancy rate

90.6%

95.0%

94.0%

73.1%

22.1%

18.0%

46.2%

55.1%

51.3%

64.4%

82.0%

90.5%

65.2%

93.2%

64.9% -28.3%

ADR (yen)

32,16031,032

27,77526,18319,92619,80023,02629,95741,04428,90530,50236,091

30,23133,324

31,980

RevPAR (yen)29,13629,48026,108

19,139

4,403

3,564

10,63816,506

21,055

18,61425,011

32,662

19,71031,057

20,755 -10,302

90

90

75

58

13

10

30

48

61

52

76

95

704

566

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

365

-1,344-200

S-3：Ito Hotel New Okabe
2019

2020

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

90.1%

88.4%

96.3%

68.1%

23.2%

-

ADR (yen)

30,37728,28722,447

21,936

16,226

RevPAR (yen)27,36925,005

21,616

14,938

110

99

81

57

Sales (million yen)

May

Jun.

9th period
cumulative
Total

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

36.0%

46.1%

58.1%

62.3%

75.1%

53.6%

92.2%

46.3% -45.9%--

24,53034,374

23,627

26,53433,013

26,82828,53728,723

3,764

-

-

8,830

15,846

13,727

16,53024,792

14,37926,311

13,298 -13,013

14

0

0

32

57

49

63

91

657

613

294

+186

-319

Ooedo Onsen Reit Investment Corporation 39

Introduction of Properties (2)S-4

Ooedo-Onsen Monogatari
Atami

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

S-6

Ooedo-Onsen Monogatari
Awara

Location:

Atami City,
Shizuoka Prefecture

Location:

Izu City,
Shizuoka Prefecture

Location:

Awara City,
Fukui Prefecture

Site area:

2,053㎡
8,469㎡

Site area:

2,911㎡
6,125㎡

Site area:

13,263㎡
14,132㎡

Total floor area:

Total floor area:

Area characteristics

Area characteristics


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

Total floor area:

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



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

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

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

Ooedo Onsen Reit Investment Corporation 40

Introduction of Properties (2)S-4：Ooedo-Onsen Monogatari Atami
2019

2020

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

-

14.8%

53.8%

63.8%

66.1%

83.4%

90.5%

65.2%

94.0%

62.2% -31.8%

17,429-23,76526,85840,54528,45028,53533,30930,06633,90131,31623,053

5,228

-

3,517

14,44925,86718,80523,79830,144

19,60331,866

19,478 -12,388

63

14

0

8

37

65

48

64

78

626

528

Cumulativ e
total

Previous
corresponding
periodcumulative total

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

93.6%

96.9%

97.6%

92.4%

30.0%

ADR (yen)

34,14431,03929,022

24,950

RevPAR (yen)31,95830,07628,32587

83

74

Sales (million yen)

Cumulativ e
total

May

303

-2,585-225

S-5：Ooedo-Onsen Monogatari Toi Marine Hotel
2019

2020
May

Jun.

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

45.8%

69.0%

54.5%

64.3%

78.1%

54.7%

88.6%

52.1% -36.5%--

25,53744,84427,502

26,68930,10428,59529,32531,571 +2,246

1,821

-

-

11,69530,942

14,98817,161

23,511

15,641

25,981

16,448-9,533

4

0

0

25

65

31

38

51

410

343

212

-130

Cumulativ e
total

Previous
corresponding
periodcumulative total

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

84.7%

89.7%

95.5%

64.5%

10.6%

-

ADR (yen)

28,72828,291

24,70521,851

17,188

RevPAR (yen)24,33225,377

23,59314,093

54

56

50

31

Sales (million yen)

9th period
cumulative
Total

S-6：Ooedo-Onsen Monogatari Awara
2019

2020

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

80.8%

75.4%

85.0%

55.7%

10.7%

-

ADR (yen)

29,13728,516

24,84822,321

15,244

RevPAR (yen)23,54221,501

21,12012,432

89

82

75

42

Sales (million yen)

May

Jun.

9th period
cumulative
Total

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

35.9%

45.9%

41.4%

61.0%

83.3%

47.9%

86.6%

44.6% -42.0%--

25,57734,152

24,362

25,79630,84327,25629,55028,559

1,631

-

-

9,182

15,675

10,085

15,73525,692

13,05525,59012,737 -12,853

5

0

0

29

49

31

52

82

542

555

246

-991

-309

Ooedo Onsen Reit Investment Corporation 41

Introduction of Properties (3)S-7

Ooedo-Onsen Monogatari
Kamoshika-so

S-8

Ooedo-Onsen Monogatari
Ikaho

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

Location:

Nasushiobara City,
Tochigi Prefecture

Location:

Shibukawa City,
Gunma Prefecture

Location:

Kimitsu City,
Chiba Prefecture

Site area:

7,734㎡
5,947㎡

Site area:

6,805㎡
5,177㎡

Site area:

57,069㎡
8,660㎡

Total floor area:

Total floor area:

Area characteristics

Area characteristics


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



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

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

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

Area characteristics


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

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

Ooedo Onsen Reit Investment Corporation 42

Introduction of Properties (3)S-7：Ooedo-Onsen Monogatari Kamoshika-so
2019

2020

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

64.4%

58.5%

62.0%

52.3%

5.4%

-

ADR (yen)

29,412

29,52825,576

19,097

16,978

RevPAR (yen)18,941

17,27315,857

9,987

41

38

33

22

Sales (million yen)

May

Jun.

Cumulativ e
total

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

32.1%

42.4%

45.1%

55.1%

71.4%

40.7%

85.9%

41.0% -44.9%--

26,61331,33524,716

25,79926,63826,44827,534

26,919

916

-

-

8,542

13,286

11,146

14,21519,01910,76423,651

11,036 -12,615

2

0

0

17

27

22

30

39

275

310

Cumulativ e
total

Previous
corresponding
periodcumulative total

137

-615

-172

S-8：Ooedo-Onsen Monogatari Ikaho
2019

2020

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

89.0%

68.3%

69.2%

79.0%

89.3%

67.7%

99.0%

66.0% -33.0%--

24,836

29,681

27,64428,58532,003

26,96531,22728,517

8,516

-

-

22,104

20,272

19,12922,582

28,57818,25530,914

18,821 -12,093

11

0

0

30

26

25

33

40

305

262

Cumulativ e
total

Previous
corresponding
periodcumulative total

Jun.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

95.0%

88.5%

96.6%

87.7%

50.3%

-

ADR (yen)

31,28628,521

23,696

22,74916,931

RevPAR (yen)29,721

25,241

22,89019,950

42

36

30

28

Sales (million yen)

9th period
cumulative
Total

May

156

-2,710-106

S-9：Ooedo-Onsen Monogatari Kimitsu-no-mori
2019

2020

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

92.8%

97.5%

99.2%

91.5%

46.3%

-

ADR (yen)

26,87324,78822,941

17,79011,504

RevPAR (yen)24,93824,16822,757

16,277

45

46

38

32

Sales (million yen)

May

Jun.

9th period
cumulative
Total

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

58.7%

80.6%

68.5%

80.1%

87.1%

66.8%

69.6%

62.7%

-6.9%

-

-

23,07936,307

24,94325,22927,31824,626

26,842

27,722

+880

5,326

-

-

13,54729,26317,08520,20823,793

16,45018,682

17,381-1,301

10

0

0

18

39

26

32

37

329

208

154

-53

Ooedo Onsen Reit Investment Corporation 43

Introduction of Properties (4)S-11

Location:

Nagasaki City,
Nagasaki Prefecture

Location:

Osaki City,
Miyagi Prefecture

Location:

Nikko City,
Tochigi Prefecture

Site area:

5,092㎡
11,114㎡

Site area:

11,829㎡
10,843㎡

Site area:

6,719㎡
22,402㎡

Total floor area:

Area characteristics

Area characteristics



Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

Total floor area:

Ooedo-Onsen Monogatari
Kounkaku

S-10

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

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



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

S-12

Total floor area:

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

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

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

Ooedo Onsen Reit Investment Corporation 44

Introduction of Properties (4)S-10：Ooedo-Onsen Monogatari Nagasaki Hotel Seifu
2019

2020

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

-

20.7%

72.8%

42.8%

61.9%

81.1%

93.0%

61.5%

93.9%

62.1% -31.8%

15,895-27,18627,20333,09728,152

29,676

34,59629,30031,91930,406

19,363

3,322

-

5,627

19,803

14,165

17,42624,06732,17418,01929,971

18,882 -11,089

67

11

0

18

67

47

57

83

107

736

622

Cumulativ e
total

Previous
corresponding
periodcumulative total

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

88.2%

84.7%

87.9%

84.4%

20.9%

ADR (yen)

33,83032,133

26,413

22,943

RevPAR (yen)29,83827,21623,217

102

95

76

Sales (million yen)

Cumulativ e
total

May

382

-1,513-240

S-11：Ooedo-Onsen Monogatari Kounkaku
2019

2020

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

29.6%

41.2%

44.1%

68.5%

70.2%

48.1%

82.2%

42.3% -39.9%--

21,22024,994

21,42324,90328,572

23,35924,47824,885

+407

2,562

-

-

6,281

10,297

9,447

17,05820,057

11,235

20,12010,526-9,594

10

0

0

25

40

36

71

79

555

498

252

-245

Cumulativ e
total

Previous
corresponding
periodcumulative total

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

74.2%

81.3%

97.1%

53.7%

19.0%

-

ADR (yen)

26,792

23,87020,408

19,10913,487

RevPAR (yen)19,87919,406

19,816

10,261

87

81

80

43

Sales (million yen)

9th period
cumulative
Total

May

Jun.

S-12：Kinugawa Kanko Hotel
2019

2020

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

80.2%

76.4%

73.9%

51.8%

13.7%

-

ADR (yen)

32,62931,77825,915

21,741

16,107

RevPAR (yen)26,16824,27819,151

11,261

189

171

126

74

Sales (million yen)

May

Jun.

9th period
cumulative
Total

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

27.3%

31.0%

48.8%

78.7%

89.6%

47.6%

88.5%

45.9% -42.6%--

26,73531,662

26,51727,88230,71928,46830,013

28,846

2,206

-

-

7,298

9,815

12,94021,94327,524

13,55026,561

13,240 -13,321

14

0

0

44

58

75

138

167

1,059

1,075

484

-1,167-591

Ooedo Onsen Reit Investment Corporation 45

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

S-14

KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel

Location:

Toyooka City,
Hyogo Prefecture

Location:

Aizuwakamatsu City,
Fukushima Prefecture

Site area:

11,350㎡
10,602㎡

Site area:

12,451㎡ (Note)
16,665㎡ (Note)

Total floor area:

Total floor area:

Area characteristics

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

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



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

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

Ooedo Onsen Reit Investment Corporation 46

Introduction of Properties (5)S-13：Ooedo-Onsen Monogatari Kinosaki
2019

2020

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

99.2%

98.7%

98.8%

99.1%

23.2%

ADR (yen)

31,30930,356

28,84828,895

RevPAR (yen)31,05829,961

28,501

120

116

102

Sales (million yen)

May

Cumulativ e
total

Previous
corresponding
periodcumulative total

9th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

-

14.3%

52.2%

68.5%

62.4%

77.3%

87.8%

65.1%

97.8%

60.5% -37.3%

18,933-24,461

29,282

39,121

29,81728,15336,38730,77930,09232,517 +2,425

28,634

4,392

-

3,497

15,285

26,797

18,605

21,762

31,947

20,03729,42919,672-9,757

102

15

0

12

54

93

65

83

115

882

674

424

-250

Cumulativ e
total

Previous
corresponding
periodcumulative total

S-14：Ooedo-Onsen Higashiyama Grand Hotel
2019

2020
Jun.

Change

Jul.

Aug.

Sep.

Oct

Nov.

-

39.8%

48.2%

52.6%

79.2%

88.7%

48.7%

87.1%

51.5% -35.6%--

28,16332,07525,317

26,99331,191

27,686

27,71928,841 +1,122

2,314

-

-

11,20815,46013,316

21,37827,666

13,48324,143

14,853-9,290

10

0

0

47

64

53

90

111

709

662

367

-294

Cumulativ e
total

Previous
corresponding
periodcumulative total

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

66.7%

65.3%

79.4%

51.6%

13.8%

-

ADR (yen)

33,30528,162

24,59020,282

16,773

RevPAR (yen)22,214

18,38919,524

10,465

106

85

91

47

Sales (million yen)

9th period
cumulative
Total

May

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

2019
Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Number of guests

54,73636,014

28,679

8,341

2,350

-

Sales (million yen)

191

142

96

35

9

0

Jul.

Aug.

Sep.

Oct

Nov.

-

13,13739,35733,96039,48059,940 461,545

0

55

165

131

159

215

1,203

8th period
cumulative
Total

Change331,425 185,874 -145,551
1,298

727

-571

Ooedo Onsen Reit Investment Corporation 47

Financial Indices
Indices
Ordinary income

8th period(May 31, 2020)
546 mn yen

9th period(Nov. 30, 2020)
467 mn yen

Net income

545 mn yen

466 mn yen

Depreciation

438 mn yen

444 mn yen

CAPEX

169 mn yen

175 mn yen

Total assets

38,327 mn yen

37,428 mn yen

Total net assets
BPS (Total net assets/unit)

21,183 mn yen

21,102 mn yen

90,011 yen

89,666 yen

Unit price (End of each period)

71,800 yen

68,500 yen

235,347 units

235,347 units

547 mn yen

469 mn yen

2,328 yen

1,996 yen

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

6.5%
983 mn yen
4,178 yenCalculation formula

5.8% DPU (annualized)/Unit price as of end of period
895 mn yen Net income + Depreciation－profit or loss on sale of real estate
3,803 yen

8.6x

9.0x Unit price as of end of period/FFO per unit (annualized)

PER

15.5x

17.3x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PBR

0.8x

0.8x Unit price as of end of period/Net assets per unit

ROA
Annualized
ROE
Annualized
NAV

1.4%

1.2% Ordinary income/Average of total assets during the period

2.8%

2.5%

2.6%

2.2% Net income/Average of total net assets during the period

5.1%

4.4%

25,577 mn yen

NAV per unit
NAV multiple

108,678 yenInterest-bearing debt

15,319 mn yen

0.7x

26,385 mn yen Total net assets + Total appraisal value - Total book value - Total liabilities
112,115 yen
0.6x Unit price as of end of period/NAV per unit
14,457 mn yen

LTV (book value basis)

40.0%

38.6% Interest-bearing debt/Total assets

LTV (appraisal value basis)

35.9%

33.8% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)

Operating days

183 days

183 days

Ooedo Onsen Reit Investment Corporation 48

6th period

7th period(period ended May 31, 2019) (period ended Nov. 30, 2019)

AssetsCurrent assets
Cash and deposits
Prepaid expenses
Other

2,001,208
136,232
66,727

Total current assets

2,204,168

2,228,615
126,984
6,942
2,362,543

Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Total property, plant and equipment

26,145,944-1,926,166
24,219,777
10,979-508
10,470
600
-44
555
2,620
-487
2,133
11,988,130
36,221,067

26,324,003-1,926,166
23,965,085
10,979-508
10,101
600
-44
538
3,498
-487
2,740
11,988,187
35,966,652

Intangible assets
Leasehold right
SoftwareTotal intangible assets

157,802
3,754
161,556

157,802
2,951
160,754

Investments and other assets
Deferred tax assets
Long-term prepaid expenses
Lease and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets

12
185,296
10,089195,39916
140,673
10,089150,780

36,578,023

36,278,186

38,782,191

38,640,729

Balance Sheet(thousand yen)
9th period

8th period(period ended May 31, 2020)(thousand yen)
9th period

8th period(period ended May 31, 2020)(period ended Nov. 30, 2020)(period ended Nov. 30, 2020)

Liabilities

AssetsCurrent liabilities

Current assets
Cash and deposits
Prepaid expenses
Other
Total current assets

2,245,992

Operating accounts payable

138,154

140,140

Short-term loans payable

6,251

6,546

2,210,622

2,355,028

2,392,678

Non-current assets

Accumulated depreciation
Buildings, net
Structures

Advances received

23,427,545

Other

9,078,890

6,776,000

600

Tenant leasehold and security deposits

1,230,706

1,230,692-97

Asset retirement obligations

520

502

Total non-current liabilities

3,498

5,772

600
-79

-1,050-1,402

2,448

4,370

11,988,187

11,208,770

35,697,951

34,650,550

157,802305,228

2,149

1,347

159,951

306,575

Total liabilities

15

16
68,483

Lease and guarantee deposits

10,08910,089Total investments and other assets

114,684

78,58935,972,587

35,035,715

38,327,616

37,428,394

138,288

138,691

10,447,884

8,145,384

17,143,692

16,325,661

20,653,023

20,653,023-14,292-17,116-14,292-17,116

20,638,731

20,638,731

545,192

466,826

Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital

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

104,578

Total assets

Non-current liabilities

adjustment

Investments and other assets

Total non-current assets

Total current liabilities

Allowance for temporary difference

Intangible assets

Long-term prepaid expenses

246,412Long-term loans payable

Tools, furniture and fixtures, net

Deferred tax assets

261,314

7,260

Accumulated depreciation

Total intangible assets

34,9808,180,276

9,362

Software940

39,513

6,695,808

23,697,064

9,731

Leasehold right

936

5,795

Structures, net

Total property, plant and equipment

8,190-3,239,601-1,616

Land

8,329

26,667,147

10,979Machinery and equipment, net

82,190Accrued expenses-2,796,416-1,247

Tools, furniture and fixtures

6,194,120

89,251

26,493,480

10,979

Accumulated depreciation

1,487,480

6,240,110

Accured consumption taxes

Accumulated depreciation
Machinery and equipment

118,701-

Accounts payable - other
Income taxes payable

Property, plant and equipment
Buildings

Current portion of long-term loans payable

50,556

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

545,192

466,826

21,183,923

21,102,733

21,183,923

21,102,733

38,327,616

37,428,394

Ooedo Onsen Reit Investment Corporation 49

Statement of Income(thousand yen)

Operating revenue
Lease business revenue
Gain on sales of real estate properties
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors' compensations
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distributions payable
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Total non-operating expenses
Ordinary income

8th period

9th period(from December 1, 2019 to May 31, 2020)(from June 1, 2020 to November 30, 2020)

1,433,658
1,433,658

1,342,970
15,785
1,358,755

566,328
125,121
1,731
17,161
3,600
41,276755,219
678,438

574,661
122,870
1,720
17,2583,600
44,313
764,424594,331

10
563
573

10
1,212
1,222

63,464
69,268132,732
546,279

54,68373,230127,914467,639233-

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

233-

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

546,045937
0
938
545,10785

467,639942-0
942
466,697
128

Unappropriated retained earnings(undisposed loss)

545,192

466,826

Total extraordinary losses

Ooedo Onsen Reit Investment Corporation 50

Debt Status
List of lenders
Lender
Short
term

Long
term

(as of November 30, 2020)
Balance(mn yen)Interest rate(%)

Drawdown date

Repayment date

Security

Sumitomo Mitsui Banking Corporation
The Nomura Trust and Banking Co., Ltd.

1,487

Base rate (JBA 3-month Yen TIBOR) ＋0.50%

November 30, 2020

August 31, 2021

Unsecured and unguaranteed

Sumitomo Mitsui Banking Corporation

453

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

September 1, 2016

May 31, 2023

Unsecured and unguaranteed

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

2,267

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

December 4, 2017

November 30, 2021

Unsecured and unguaranteed

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

3,235

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

May 31, 2019

May 31, 2022

Unsecured and unguaranteed

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

3,235

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

May 31, 2019

May 31, 2023

Unsecured and unguaranteed

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

3,528

Base rate (JBA 3-month Yen TIBOR) ＋0.35%

May 29, 2020

May 31, 2021

Unsecured and unguaranteed

Sumitomo Mitsui Banking Corporation

250

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

May 29, 2020

May 31, 2021

Unsecured and unguaranteed

Total

14,457

Ooedo Onsen Reit Investment Corporation 51

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 February 29, 2020)

Address

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

Establishment

Financial Results(Feb. 2020)

Consolidated Net Sales: 50,810 million yen
Consolidated Total Assets: 80,971 million yen
Net Assets: 19,321 million yen Reinvigorating onsen ryokan, hotels, spa-related facilities, theme parks around theDecember 5, 2017 (founded in November 2001)

Businesses

Representative

Representative Director Mitsumasa Morita

No. of Employees

1,408 (as of July 31, 2020, excluding fixed-term employees)*The total number of employees on a group-wide basis

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

culture theme. As of Feb. 29, 2020, we operate 37 onsen and spa-related facilities

Trends in number of facilities
2003

2007 - 20092010 - 2013

2016

2017

2018

2019

2020

Opened Ooedo-Onsen
Monogatari in Odaiba,
Tokyo

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

Opened Hotel New Shiobara,
Kinugawa Kanko Hotel,
Reoma Resort andMinoh Kanko Hotel, etc.

Opened Kounkaku, Masuya
and Nagasaki Hotel Seifu

Opened Hotel Suiyotei,
Beppu and Gero Shin-kan

Opened Nanki-kushimotoand Hotel KisojiOpened TAOYA Shima,
Amakusa Hotel Kameya

Opened Shiomi-so,
Saikaibashi Corazon Hoteland Iwanumaya

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

Ooedo-Onsen
Monogatari
Hotel Kisoji

Ooedo-Onsen
Monogatari
Amakusa Hotel
KameyaSaikaibashi
Corazon Hotel

Ooedo-Onsen
Monogatari
Aizu

OdaibaOoedo-Onsen
Monogatari

Hotel New
Shiobara

Ooedo-Onsen
Monogatari
Minoh Kanko Hotel

40
30
20
10

6

9

12

18

20

24

25

27

27

27

End ofSep. 2012

End ofSep. 2013

End ofFeb. 2014

End ofFeb. 2015

End of Feb.
2016

30

32

34

End ofFeb. 2018

End ofFeb. 201937

0
End ofSep. 2007

End ofSep. 2008

End ofSep. 2009

End ofSep. 2010

End ofSep. 2011

End ofFeb. 2017

End ofFeb. 2020

Ooedo Onsen Reit Investment Corporation 52

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

2,565

2,709

Ooedo-Onsen Monogatari

2,766

MasuyaOoedo-Onsen Monogatari

Kakeyu Fujikan Sakurakan
Ooedo-Onsen Monogatari

Hotel Kisoji

1,000
FY2015FY2016FY2017FY2018FY2019FY2020Ooedo-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
Ooedo-Onsen Monogatari

Beppu Seifu

Ooedo-Onsen Monogatari

Kamoshika-so
Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari

Ikaho
Hotel Shinko(Onsen theme park)
Tokyo Odaiba(Onsen theme park)

Kimitsu-no-moriOoedo-Onsen Monogatari

Hotel Suiyotei

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

Ooedo-Onsen Monogatari Atami
Ooedo-Onsen Monogatari

TAOYA Shima
Nanki-kushimoto

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Urayasu Mangekyo

Ise-shima

Reoma Resort

Minoh Kanko Hotel(Spa-related facilities

for day visits)
Aizu
Hotel New Shiobara
Hotel Kinugawa Gyoen

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

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

2,000

Ooedo-Onsen Monogatari

Ito Hotel New Okabe
Ooedo-Onsen Monogatari

Toi Marine Hotel

Ooedo Onsen Reit Investment Corporation 53

“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 54

“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, 2020 to November 30, 2020)＜Meal (breakfast and dinner)＞＜Overall satisfaction ＞

Trends in average monthly occupancy rates
for each type of accommodation facility
100%
90%
84.9%
80%
70%
60%

54.8%
50.6%
47.1%
46.1%
39.1%

50%
40%
30%

＜Type of services inside the facility＞＜Onsen＞

20%
10%
0%
2018/112019/3

2019/7

Ooedo Onsen REIT
Resort hotels

2019/11
City hotels
Ryokans

2020/32020/72020/11

Business hotels
Total(Note) All facilities held by the Investment Corporation have been successively andtemporarily closed since April 2020due to the spread of COVID-19
Source: Data on city hotels, business hotels, resort hotels, ryokan and all types ofaccommodation are compiled by the asset manager based on a statisticalsurvey on trips with accommodation conducted by the Ministry of Land,
Infrastructure, Transport and Tourism.
Very satisfied
Unsatisfied

Satisfied
Very unsatisfied

Fair

Ooedo Onsen Reit Investment Corporation 55

Unitholders Breakdown
Top 10 unitholders

Ratio by number of unitholders＜End of 8th fiscal period＞＜End of 9th fiscal period＞

19,558 unitholders

19,352 unitholders

Financial
institutions

Foreigncorporations
and individuals

Financial
institutions

Foreigncorporations
and individuals

Rank

Name

Number ofunits held

Ratio

1

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

24,022

10.2%

2

Custody Bank of Japan, Ltd. (Trust Account)

15,089

6.4%

3

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

10,287

4.4%

4

Ooedo-Onsen Mongatari Co., Ltd.

9,246

3.9%

5

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

4,207

1.8%

6

Morgan Stanley MUFG Securities Co., Ltd.

3,671

1.6%

7

DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO

3,149

1.3%

8

BNYM SA/NV FOR BNYM FOR BNYM GCM CLIENT ACCTS
M ILM FE

3,030

1.3%

9

YONEZAWA SHINKIN BANK

3,000

1.3%

10

Banshu Shinkin BANK

2,880

1.2%

78,581

33.4%

Raito by number of investment units

Total
Individuals
Financial institutions(Incl. securities companies)

Other domestic corporations
Foreign corporations and individuals

Ooedo Onsen Reit Investment Corporation 56

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

Targets unitholders listed or recorded on Unitholders’ Registry
as of November 30, 2020 (record date), end of 9th fiscal period.

Eligible persons

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

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

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

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

Schedule ofsending andperiod of validity<Facilities applicable>
Ooedo-Onsen Monogatari Reoma Resort, Ooedo-Onsen Monogatari Ise-shima, Ito Hotel New Okabe,
Ooedo-Onsen Monogatari Atami, Ooedo-Onsen Monogatari Toi Marine Hotel, Ooedo-Onsen Monogatari Awara,
Ooedo-Onsen Monogatari Kamoshika-so, Ooedo-Onsen Monogatari Ikaho, Ooedo-Onsen Monogatari Kimitsu-no-mori,Ooedo-Onsen Monogatari Nagasaki Hotel Seifu, Ooedo-Onsen Monogatari Kounkaku, Kinugawa Kanko Hotel,
Ooedo-Onsen Monogatari Kinosaki and Ooedo-Onsen Monogatari Higashiyama Grand Hotel <14 facilities in total>
Coupons will be sent each year in mid-February for fiscal periods
ended in November and in mid-August for fiscal periods ended in May① When coupons are sent in mid-February: Valid for 1 year from March 1st to the last day of the following February② When coupons are sent in mid-August: Valid for 1 year from September 1st to the last day of the following August(Note) The period of validity of unitholder benefits for the 6th period (ended May 2019) has been extended from August 31, 2020, to November 30, 2020 and the period of validity of unitholder benefits for the 7th
period (ended November 2019) has been extended from February 28, 2021, to March 31, 2021 , due to the closure of some or all of the facilities owned by the Investment Corporation due to declarationof a state of emergency and other effects of COVID-19.

Ooedo Onsen Reit Investment Corporation 57

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

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

Stock price

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 58

Governance Structure
Introduction of performance-linked element in asset management fee structure
Remuneration paid by the Investment Corporation to the asset manager consists of management fee I, management fee II, acquisition fee,
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 59

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 60

Overview of Asset Manager

Name：Ooedo Onsen Asset Management Co., Ltd.

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

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

Established：April 24, 2015

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

Capitalization：50 million yen

Member of the Investment Trusts Association, Japan

Representative：Fuminori Imanishi

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

Registrationsand Licenses

Employees：Real estate brokerage, Governor of Tokyo (2) No. 98032：13 (as of November 30, 2020)

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 61

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 62