Ooedo Onsen Reit Investment Corporation

Results of 13th Fiscal Period ended November 30, 2022

Presentation Material
January 23, 2023
（Asset Manager）Ooedo Onsen Asset Management Co., Ltd.

Table of Contents
Appendix

Ⅰ.

Ⅱ.

Executive Summary

Financial Results

3

14

Ⅲ.

Growth Strategy

19Ⅳ.

Market Environment

27

ESG

32

Rent Structure

33

Portfolio Data

34

financial statement

47

Investing Targets and Building of the Portfolio

50

Ooedo-Onsen Monogatari Group51

Measures Against COVID-19

55

Unitholders

56

Track Record of Investment Unit Price

57

Overview of Investment Corporation

58

Overview of Asset Manager

59

Governance Structure60

Ooedo Onsen Reit Investment Corporation 1

Message from President

My name is Takeshi Kirihara and I became President andRepresentative Director of Ooedo Onsen Asset Management Co.,
Ltd. in January 2023. I look forward to your continued support.
After graduating university, I joined Nomura Real Estate
Development, where I was involved in real estate businessthroughout my time there. As part of the Nomura Real Estate
Development's asset management operations, I was in charge ofasset management business involving listed REITs, private REITs,
private funds and debt funds and was responsible for managing
assets worth 1.2 trillion yen. After that, I oversaw the investment andmanagement of assets worth 180 billion yen at Star Asia Investment
Management.
I would like to use the expertise I gained from managing assets
worth 1.4 trillion yen in the past in the Investment Corporation's asset
management.
Career Summary
April 1992
Joined Nomura Real Estate Development Co., Ltd.
April 2007
Asset Management Dept., Nomura Real Estate Investment Management Co., Ltd.
April 2009
Vice Manager, Business Planning Department, Nomura Real Estate Investment Management Co., Ltd.
April 2011
Vice Manager, Fund Management Department, Nomura Real Estate Investment Management Co., Ltd.
October 2011
Manager, Asset Management Dept., Nomura Real Estate Asset Management Co., Ltd.
April 2014
General Manager, Financial Institutions & Public Sector Dept., Nomura Real Estate Development Co., Ltd.
October 2016
General Manager, Corporate Services Dept. (1), Nomura Real Estate Development Co., Ltd.
April 2018
General Manager, Fund Services Dept. (1), Nomura Real Estate Development Co., Ltd.
February 2020
Director, Star Asia Investment Management Co., Ltd.
September 2022 Joined Hudson Japan K.K.
Director, Ooedo Onsen Asset Management Co., Ltd.
January 2023
President and Representative Director, Ooedo Onsen Asset Management Co., Ltd.

Ooedo Onsen Reit Investment Corporation 2

Ⅰ. Executive Summary

Ooedo Onsen Reit Investment Corporation 3

Executive Summary
Distributions per unit increased 59 yen from the revised forecast and decreased 117 yen from the previous
period.
(In thousand of JPY)

May. 2022

Nov. 2022

Difference

Nov. 2022
Forecast

Difference

DPU (yen)

1,521

1,404

-117

1,345

+59

Operating revenue

1,291,399

1,237,514-53,885

1,225,213+12,301

Gain on saleof real estate

16,601

242,124+225,523

229,329+12,795

NOI

1,156,414

875,252-281,162

880,636-5,384

LTV
Average interest rate
Remaining duration

34.2%
0.80%
0.7

31.3%
0.85%
0.34

‐2.9%
+0.5%
-0.36

34.0%
0.85%
-

-2.7%
0
-

Nov. 2022

May. 2023
Forecast

Difference

Nov. 2023
Forecast

Difference

DPU (yen)

1,404

1,442

+38

1,324

-118

Operating revenue

1,237,514

1,207,141-30,372

1,130,497-76,643

Gain on saleof real estate

242,124

306,892+64,767０ｰ306,892

NOI

875,252

792,568-82,684

1,027,884

235,316

Ooedo Onsen Reit Investment Corporation 4

DPU Summary

May. 2022

Nov. 2022

May. 2023

Nov. 2023

1,521 yen

1,404 yen

1,442 yen

1,324 yen

Decrease in arrangement fees

Remaining co-ownership interest in Kinosaki

Decrease in refinancing cost

Part of land of Reoma Resort
Kamoshika-so
30% of co-ownership interest in Kinosaki

Absence of properties sold in previous period

Ooedo Onsen Reit Investment Corporation 5

Changes in Distribution
Actual3,000円

(JPY)
2,533
2,392

2,500円2,435

Forecast
2,466

2,390

Of which, variable rent contribution
2,415

305
341

329

429

2,000円

424

389

3,000

2,500

2,328

365

1,996

1,970
2,000

COVID-19

1,686
1,521
1,404

1,500円

1,442

1,324

1,500

Disposition:
Nagasaki
1,000円

1,000

Disposition:
Kamosika-so
30% of co-ownership interest in Kinosaki

500円

376

500

Disposition:
70% of co-ownership interest in Kinosaki

0円

0

11/16

05/17

11/17

05/18

11/18

05/19

11/19

05/20

11/20

05/21

11/21

05/22

11/22

05/23

11/23

Ooedo Onsen Reit Investment Corporation 6

After the Change of the Shareholder of the Sponsor: Property Sales and Rent Reduction
Sale of Kamoshika-so and Kinosaki: Total sale price 3,777 million yen→ Acquisition of cash on hand of approx. 2 billion yen: Elimination of refinancing risk and achievement of portfolio diversification and risk
diversification through new property acquisitions→ Early repayment of 1,323 million yen before maturity: Drop in LTV ratio to 28.3% in May 2023 period

Waiver of 50% of fixed rent from September 2022 to February 2023 (520 million yen)
→ Restoration of tenant's financial health→ Realization of value enhancing investments in existing facilities by tenantAcquisition of cash on hand
Nov. 2022

May. 2023

Total sale price
3,777 million yen

Kamoshika-so: 1,260 million yen
30% of co-ownership interest in Kinosaki: 755
million yen

70% of co-ownership interest in Kinosaki

Total early repayment
1,323 million yen

726 million yen

597 million yen

Sale of the properties

Acquisition of cashon hand of approx.
2,000 million yen

Offset of rent reduction against gain on sale
Total gain on sale:
549 million yen
Total rent reduction:
520 million yen

Nov. 2022

May. 2023

242 million yen

306 million yen

260 million yen

260 million yen
Ooedo Onsen Reit Investment Corporation 7

After the Change of the Shareholder of the Sponsor: Summary of Property Sales

Ooedo-Onsen Monogatari Kamoshika-so
Address 1256, Shiobara, Nasushiobara, Tchigi
Date of sale November 30, 2022
Sale price 1,260 million yen (100% of appraisal value)
Carrying amount 1,151 million yen
Gain on sale 110 million yen

Ooedo-Onsen Monogatari Kinosaki
Address 1232-1, Kikuyashima, Momoshima, Kinosakicho, Toyooka-shi, Hyogo
Date of saleNovember 30, 2022 30% of co-ownership interest
February 28, 2023 70% of co-ownership interest

Sale price 2,517 million yen (95% of appraisal value)
Carrying amount 2,113 million yen
Gain on sale 436 million yen
Ooedo Onsen Reit Investment Corporation 8

Portfolio Data: Operating Results (1)Occupancy rate: Lower than anticipated until July 2022 due to the impact of the Omicron variant but has trended up since August andrecovered to 80% of pre-COVID levels in November, partly thanks to national travel discount program.
ADR: Took advantage of campaigns such as national travel discount program, avoided lowering prices to attract customers and kept
prices at a stable level throughout the COVID-19 pandemic.
Latest status of individual key properties (occupancy in November 2022)*Excluding Reoma Resort, top 5 facilities based on occupancy
Reoma Resort（81.7％）
Direct bus service was resumed and school trips and domestic group tours started up again
Ise-Shima（89.6％）
Customers from the Kansai region increased
Atami（87.0％） Toi Marine（91.0％） Awara（87.4％）
Occupancy increased sharply after the launch of the national travel discount program
Kinugawa Kanko（89.1％）
There was a rebound in demand for school trips

Ever-popular buffet

11/22 period
cumulative Total

Total

Previous
corresponding
period cumulative
total

Operating Results
Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Room
Occupancy Rate

75.0%

50.1%

41.4%

60.4%

58.7%

63.7%

63.3%

64.9%

79.2%

72.6%

71.7%

84.9%

65.6%

50.6%

72.8%

+43.9%ADR （JPY）

32,17532,44723,56429,94828,921

31,24925,44232,81944,91028,14029,00429,36031,151

27,282

31,932+17.0%

RevPAR（JPY）

24,131

16,255

9,755

18,088

16,976

19,905

16,104

21,29935,56820,42920,79524,926

20,43513,80423,246+68.4%

Sales (million)

1,070

721

393

795

727

886

716

943

1,554

877

950

1,113

10,751

3,641

6,154

+69.0%*Occupancy excluding Kamoshika-so sold at the end of November 2022

Ooedo Onsen Reit Investment Corporation 9

Recovering Tenant Performance and Occupancy (1)Signs of recovery on the back of the third round of vaccinations and the government's support to tourism
Average occupancy rate by industry for the hotel sector

Ooedo Onsen REIT
City hotels

Go To Travel Campaign

84.9%

Fourthstate ofemergency

Third stateofemergency

86.9%
83.4%

Secondstate ofemergency

First stateofemergency

Business hotels
Resort hotels
84.9%

Ryokans79.3%

Overall

79.2%

75.0%

73.9%

72.6%71.7%
63.7%63.3%64.9%

62.4%

60.4% 58.7%

58.6%
54.4%

54.6%

52.1%

49.4%
42.3%

41.4%
34.7%
29.5%

17.9%

50.1%

47.0%

35.7%

31.6%
29.6%

16.1%

6.0%
1.1%

1.5%

*Occupancy excluding Kamoshika-so sold at the end of November 2022

Ooedo Onsen Reit Investment Corporation 10

Recovering Tenant Performance and Occupancy (2)The COVID-19 pandemic is continuing,
and difficulty in forecasting.
ADR／RevPAR／HPR
40,00030,06232,000ADR

27,220

Maintained the ADR level despite a decline in the occupancy rate.
-> Maintained the brand power and made preparations in anticipation of a recovery phase.
30,512

29,88927,33030,221

31,932

24,00016,0003.30

26,845
15,2158,000

RevPAR0

15,835
8,398

2.94

13,856

17,83023,246

3.10

2.90

2.70

(8,000)2.72(16,000)

Head per Room

2.69

2.18

(24,000)(32,000)(Double Occupancy(40,000)

2.61

2.70

2.70

2.50

2.30

COVID-19

11/19

Ratio)

3.50

2.10

05/20

11/20

05/21

11/21

05/22

11/22

The fact that Head per
Room (Double Occupancy Ratio) and occupancy
コロナによる休館により稼働率が低下しているが、
have yet to return to pre-pandemic
levels means there is room to grow
営業⽇ベースの稼働率は⽔準を維持
and bodes well for the futureOccupancy rate
1

89.3%
1

1

89.3%

73.7%

69.8%
60.6%

1

Room occupancy rate

53.3%

1

1

On business days

55.9%

0

51.9%

The occupancy rate fell due to the temporary closures offacilities caused by the pandemic. However, the occupancy
rate level on actual operating days was maintained.

40.2%

50.7%

60.3%

72.8%

59.0%

0

0

28.1%

0

0

11/19

05/20

11/20

05/21

11/21

05/22

11/22

Ooedo Onsen Reit Investment Corporation 11

Ooedo-Onsen Monogatari Initiatives
Aiming to improve room rates by making investments to satisfy the product requirements of the high-end series (TAOYA
series) and the mid-range series (Ooedo-Onsen Monogatari Premium Series). Also actively considering investment in newhotels.
<TAOYA> Brand concept
Based on the brand concept "leisurely, gracefully,"
the TAOYA brand is a brand of hot spring resort
hotels which aims to offer extraordinary moments
not only through a higher level of facilities andequipment but also through all-inclusive services
and higher levels of customer service and hospitality.

Operations
Improvement ofRoom rates increased through optimization of occupancy and pricing
Price per Parson
Improvement of
An increase in the cost of all-you-can-eat buffet led to improvement in the quality of the food served
customer satisfaction→ Because satisfaction with meals improved, overall satisfaction improved even if room rates were higher
Although the direct bus service was suspended due to the COVID-19 pandemic, the number of customers was maintained throughOptimization of
government measures to stimulate demand and the implementation of various marketing measures such as free lounge and all-youmarketing costs
can-eat buffets.
→ Improvement of profitability
Given the increase in the online reservation rate during the COVID-19 pandemic, optimization of marketing costs was achieved
Optimization ofthrough the discontinuation of newspaper flyers and member DM postcards and concentration on TV commercials and web
marketing costs
advertising targeting online reservations
Ooedo-Onsen Monogatari's share of the inbound market pre-COVID was 3%. Planning to expand sales channels via overseas OTA
Expansion of target sales channels, to tap into demand among individual tourists to Japan from overseas in the post-COVID era.
customer groups* In 2019, 31.8 million foreign visitors came to Japan and the number of overnight stays by foreign visitors grew to a levelcomparable with the number of overnight stays by Japanese.
Promotion of use by
Invested 50 million yen in member system to increase the number of members and repeat frequency.
members
Optimization of
Personnel expenses were optimized compared with pre-COVID levels through a review of the model work schedule which
personnel expenses fluctuates according to the number of guests.

Ooedo Onsen Reit Investment Corporation 12

Ooedo-Onsen Monogatari Initiatives[Hot Spring Inn and Hotel General Election 2022]
Resort hotel category: First and second in national rankings
Sports and leisure category: First and second in national rankings

Sports and leisure category

Resort hotel category

The first
TAOYA-Shima

Reoma-Resort

The second

Saikaibashi Corazon
Source: Hotel marketing plan supported by five ministries and agencies including the Cabinet Office

Urayasu Mangekyo
https://yado.onsen-ouen.jp/ranking_2022/result

Ooedo Onsen Reit Investment Corporation 13

Ⅱ. Financial Results

Ooedo Onsen Reit Investment Corporation
14

Nov. 2022
(In thousand of JPY)

May. 2022
Operating revenue

Component
ratio

Primary rent

Nov. 2022

1,291,399

Component ratioNov. 2022(Forecast as of
Nov. 15,2022)

Difference-53,885

1,225,213+12,301

1,172,269

894,524-277,744

894,854-329

894,524-277,744

894,854

-329

０

-

0

-

Fixed rent

100.0%

1,172,269 100.0%

Variable rent

0.0%

0

Secondary rent

1,237,514

Reasons for change from forecasts

Difference

0.0%

101,888

100,312-1,576

100,456

-144

640

552

-88

572

-19

715,424

434,006-281,418

439,218-5,212Gain on sale of real estate

16,601

242,124+225,523

229,329+12,795

Operating income

554,645

505,197-49,448

489,374+15,822

Ordinary income

354,835

327,925-26,910313,015+14,910Net income

353,824

327,030-26,794

312,015+15,015

4,236

3,294

-941

4,471

-1,176

Total distribution

357,962

330,427-27,535

316,541+13,885

Total units outstanding

235,347

235,347-

235,347

-

1,521

1,404

-117

1,345

+59

OthersLease operations
revenue gain/loss

Excess cash distribution

DPU (yen)(Excess cash distribution per unit)

FFO per unit (yen)

18

14

-4

19

-5

3,306

2,235

-1,071

2,226+9

Increase in expenses related to rent business such as
fixed asset tax and city tax payable as a result of
sales

Lease operations revenue gain/loss

1,156,414

875,252-281,162

880,636-5,384

Depreciation

440,990441,246+256

441,417

-171

CAPEX

207,379

169,991-37,388---5,212Gain on sales of real estate properties (fluctuation invalue of Kinosaki)
Decrease in other SG&A expenses（consumption
taxes not eligible for purchase tax credit, etc.)

Operating income
Increase in non-operating expenses (arrangement
fees, etc.)

Ordinary income＋12,795+8,240+15,822-1,507+14,910

Reasons for change from May. 2022
Decrease in rent (rent reduction, etc.)
Increase in property and other tax (sale ofKamoshika-so, etc.)-279,320

Lease operations revenue gain/loss-281,418

Increase in gain on sales of real estate properties(part of land of Reoma Resort, Kamoshika-so, 30%of co-ownership interest in Kinosaki)
Decrease in SG&A expenses (absence of expenses
related to general meeting of investors, etc.)

Operating income
Decrease in non-operating expenses (arrangement
fees, etc.)

Ordinary income

Main financial indicators
NOI-5,212

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

ｰ3,142+225,523+6,446-49,448+22,496-26,910(In million of JPY)
33,166
10,38912,21920,94731.3%
110,654yen

Ooedo Onsen Reit Investment Corporation 15

May. 2023 Forecasts(In thousand of JPY)
May. 2023
Forecast

Nov. 2022
Operating revenue

Component
ratio

Primary rent

1,237,514

Component
ratio

894,524

May. 2023

Difference

1,207,141

Reasons for change from forecasts

Difference(Forecast as of
Nov. 15,2022)-30,372

1,206,122+1,019807,854-86,670

807,854-

Secondary rent
Decrease in property registration expenses+1,133+10,007

Lease operations revenue gain/loss+12,603

Decrease in management fees
Decrease in other SG&A expenses (consumption
taxes not eligible for purchase tax credit, etc.)

Fixed rent

100.0%

894,524100.0%

807,854-86,670

807,854-

Variable rent

0.0%

０

0.0%

０

-

-

-

100,31291,874-8,43790,740+1,133

552

520

-32

634

-114

434,006

375,571-58,434

362,968+12,603

Reasons for change from Nov. 2022

Gain on sale of real estate

242,124

306,892+64,767

306,892-

Operating income

505,197

512,884+7,687

492,686+20,198

Decrease in gain (loss) on sale (Kamoshika-so)
Decrease in gain (loss) on sale (Kinosaki)

Ordinary income

327,925

345,053+17,127

323,407+21,646

Net income

327,030

344,053+17,022

322,407+21,646

Secondary rent
OthersLease operations
revenue gain/loss

Excess cash distribution-4,706-8,001

4,471-9,178

Total distribution

330,427

339,370+8,943

326,661+12,708

Total units outstanding

235,347

235,347-

235,347

-

1,404

1,442

+38

1,388

+54

14

-20

ｰ34

19

2,235

1,929

-306

1,839

(Excess cash distribution per unit)

FFO per unit (yen)+20,198

Reduction of refinancing costs

Ordinary income+937+21,646-18,601-38,834

Lease operations revenue gain/loss-58,434(Net) increase in gain on sale
Decrease in other non-operating expenses(management fees, etc.)+64,767+1,354

Operating income
Reduction of refinancing costs

3,294

DPU (yen)

Operating income+963+7,405

Ordinary income

Main financial indicators
Total assets+7,687+9,539+17,127(In million of JPY)
33,955Interest-bearing debt

9,598

-39

Total liabilities

11,423+90

Total net assets

22,532

LTV (book value basis)

28.3%

NOI

875,252

792,568-82,684

780,284+12,283

Depreciation

441,246

416,996-24,249

417,315

-319

CAPEX

169,991

164,000-5,991ｰ-Ooedo Onsen Reit Investment Corporation 16

Nov. 2023 Forecasts(In thousand of JPY)
Nov. 2023
Forecast

May. 2023
Operating revenue

Component
ratio

Primary rent

1,207,141

Component
ratio

807,854

Difference

Reasons for change from May. 2023

1,130,497-76,643

1,040,324+232,470

Increase in rent (end of rent reduction period)+232,470

Lease operations revenue gain/loss+237,247

Absence of gain on sale of real estate, etc.

-306,892

Operating income-50,410

Fixed rent

100.0%

807,854100.0%

1,040,324+232,470

Variable rent

0.0%

-

0.0%

-

-

91,87489,652-2,222

520

520

-

375,571

612,818+237,247

Gain on sale of real estate

306,892-

ｰ306,892

Total assets
Interest-bearing debt

9,450

Operating income

512,884

462,474-50,410

Total liabilities

13,224

Ordinary income

345,053

313,397-31,655

Total net assets

20,326

LTV (book value basis)28.2%

Net income

344,053

312,397-31,655-4,706-706+4,000Total distribution

339,370

311,599-27,770

Total units outstanding

235,347

235,347

-

1,442

1,324

-118

-20

-3

+17

1,929

3,091

+1,162

NOI

792,568

1,027,884+235,316

Depreciation

416,996

415,066-1,930

CAPEX

164,000

156,000-8,000

Secondary rent
OthersLease operations
revenue gain/loss

Excess cash distribution

DPU (yen)(Excess cash distribution per unit)

FFO per unit (yen)Decrease in non-operating expenses (arrangement feesetc.)

Ordinary income

Main financial indicators+18,755-31,655(In million of JPY)
33,550Ooedo Onsen Reit Investment Corporation 17

Financial Results
1,600円Operating revenues （mn yen）

500円

450円

1,400円

1,358
1,200円

1,348

1,344

1,237

Net income（mn yen）
466

459

400円

1,291

392

350円

353

1,000円

327

300円

250円

800円

200円

600円

150円

400円

100円

200円
50円

0円
0円

11/20

25,000円

05/21

11/21

05/22

11/20

11/22

Net assets（mn yen）

05/21

11/21

05/22

11/22

Distribution per unit

2,500円

20,94720,000円

21,10221,092

21,021

20,9782,000円

1,996

1,970
1,686

1,500円

15,000円

10,000円

1,000円

5,000円

500円

0円

0円

11/20

05/21

11/21

05/22

11/22

11/20

05/21

11/21

1,404
1,521

05/22

11/22

Ooedo Onsen Reit Investment Corporation 18

Ⅲ. Growth Strategy

Ooedo Onsen Reit Investment Corporation
19

External Growth: Amendments to Articles of Incorporation
Aiming to expand investment opportunities by adding accommodation facilities to facilities for utilizing
leisure time, subject to a resolution by the General Unitholders’ Meeting.
Medium - High＜＜

Risk and return characteristics
＜ ＜
＞ ＞

＜

Facilities for utilizing leisure time
(Existing targets)

Resort facilities＋

Bathing facilities

Short＜
160円

140円

＜

Hotels

＜

＜

＜

＜

＞

＞

＞Low - Medium

Accommodation facilities(Targets to be added)

Inns

Amusement
facilities<Proposed amendment to the terms>*The change is the addition of the underlined part.

Length of stay

Employee andstudent
dormitories

Rental housing

Servicedapartments
Shared houses

Facilities andhousing for theelderly, etc.

＞＞

Future Growth Targets

＞

＞

＞

＞Long

(billion yen)

Facilities for utilizing leisure time

120円

100円

Accommodation facilities

80
60

80円

40

60円

40円

20円

30

20
30

40

50

60

11/23

11/24

11/25

11/26

0円

11/22

Article 12
Investment Policy
The real estate that forms the main part of or
the underlying in the Real Estate Related Assets
in which the Investment Corporation invests is tomainly consist of real estate used for ryokan(meaning lodgings whose main structure andfacilities are Japanese style; the same hereinafter),hotels (meaning lodgings whose main structureand facilities are Western style; the same
hereinafter), or other facilities available for or
possibly available for accommodation, and forbaths (public bathing facilities which employ onsen
or other similar facilities; the same hereinafter),resort facilities (facilities to provide opportunities
for sports or recreation activities during leisuretime; the same hereinafter), amusement parks, orother facilities for utilizing leisure time (including
multi-use facilities that contain the foregoing) , andaccommodation facilities (meaning rental houses,
student apartments, company dormitories,
serviced apartments, shared houses and seniorcitizen facilities and residences, etc. and otherfacilities used or capable of being used forresidential purposes; the same hereinafter).

The figures above are targets as of January 23, 2023, and are not guaranteed.

Ooedo Onsen Reit Investment Corporation 20

External Growth: Environment of Accommodation Facilities
Aiming to increase stability by adding accommodation facilities which are expected to maintain a stableperformance.
Net inflows of residents to major cities and cities designated by government ordinance
100,000

Tokyo

Saitama Prefecture

Chiba Prefecture

Kanagwa Prefecture

50,000

0

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2020

2021

-50,000
15,000

Nagoya City

Osaka Prefecture

Fukuoka City

Sapporo City

Sendai City

10,0005,000

0-5,000

2011

2012

2013

2014

2015

2016

2017

2018

2019

Ooedo Onsen Reit Investment Corporation 21

Introducing Ooedo-Onsen Monogatari Hotels & Resorts Co., Ltd.'s Sponsor

HUDSON・Japan
Supports Lone Star Funds' investment activities
Responsible for due diligence, asset management, etc.
Lone Star Funds' investment track record
Real estate fund investment track record:
・Began investing in real estate properties in earnest in 2000 and has invested a total of 2 trillion yen to date・Has a track record on investing in a wide range of investment targets from small properties worth several hundred million yen to large citycenter buildings worth more than 100 billion yen
・Most recently invested Ooedo-Onsen Monogatari and Kabocha no Basha in 2022.
Acquired all real estate properties owned by GE Capital Real Estate (mostly office buildings across Japan) in one go
Acquired all real estate properties owned by
GE Capital Real Estate (mostly officebuildings across Japan) in one go2015

Acquired Abeno
nini Public Art
Project high-rise
multi-purpose
building
2021

Invested in Ooedo-Onsen Monogatari Hotels & Resorts Co., Ltd. which operates hot spring inns andhotels and bathing facilities in 38 locations across Japan
2022

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

Acquired all real estate properties owned by Saizen REIT, a Singapore listed
REIT which invests in real estate throughout Japan2016
Acquired high-rise office building in Tennozu Isle
2016

Yukai Resort Co.,Ltd.
Acquired around 1,200 shared house buildings under the "Kabocha no Basha"(offered debt forgiveness as personal debt relief measure), rebranded them as"Tokyo<β>" and overhauled the management structure
2020, 2021, 2022

Ooedo Onsen Reit Investment Corporation 22

Internal Growth ︓New Rent Structure
current situation

 The basic policy is combining fixed rent for stability and variable rent, which enables us to realize upside
potential.
New Rent Structure

We will conclude a basic agreement to shift to the new rent structure for facilities that have achieved
a certain GOP through the implementation of the Oedo-Onsen Monogatari Group's medium-term
management plan.
Background The high fixed rent burden during a time of crisis such as the COVID-19 pandemic put pressure on tenants' finances andreduced the flexibility of operations.
Overview
Timing of shift

From the calculation period following achievement of the target GOP set for each property in the tenant businessplan

Variable rent I

The component ratio is set higher than the current level to further increase the possibility of an increase in rent
incomeVariable rent II

When better business results than those assumed in the tenant's business plan are achieved, for example, we turn acorner on the pandemic and demand for accommodation and hot springs starts to grow again, more upside can beenjoyedFixed rent

Fixed rent is set lower than the current level to promote the continuation of tenant operations in the medium and longterm and the stabilization of leases

Ooedo Onsen Reit Investment Corporation 23

Internal Growth ︓Illustration of New Rent Structure

Facilities subject to value-up program

Facilities not subject to value-up program(Ise-shima, Kinugawa Kanko Hotel)(facilities other than Ise-shima, Kinugawa Kanko Hotel)（Total rent）（Total rent）

80

80

Current structure
現⾏

70

New structure
新体系

Current structure
現⾏

Target GOP < GOP
Variable rent II
Excess GOP × 25%

New structure
新体系
70

Target GOP + 10％ < GOP
Variable rent II
Excess GOP × 25%

60
60

50

50

0<GOP
Variable rent I
GOP × 15.4-19.1%

40

40

Variable 4
Fixed 630

Variable 3
Fixed 730

0<GOP
Variable rent I
GOP × 11.1-19.3%

20

20

0

Accrual ofvariable rent

Target GOP

（GOP）

0

Accrual of

Target GOP

+10%

（GOP）

variable rent

Ooedo Onsen Reit Investment Corporation 24

Status of Borrowings
12,000M

List of lenders

Breakdown of borrowing

ORIX Bank 448M

Ogaki Kyoritsu Bank 457M
8,000M

San ju San Bank
1,551M

6,000M

Sumitomo Mitsui Trust Bank

Long-term

1,566M

4,000M

Sumitomo Mitsui Banking
5,113M

2,000M

0M

11/22

Balance（mn yen）

LenderShort-term

10,000M

The Juhachi-Shinwa Bank 123M
The Bank of Fukuoka 130M
The Nomura Trust and Banking 205M
The Iyo Bank 205M
The Towa Bank 216M
Fukoku Mutual Life Insurance 375M

Interest rate
Security

Drawdown/
Repayment
date

Sumitomo Mitsui Banking

210

Base interest rate
(JBA yen TIBOR)＋0.75％
Secured and unguaranteed

May 31, 2022
Feb 28, 2023

Sumitomo Mitsui Banking
Sumitomo Mitsui Trust BankSan ju San Bank

3,136

Base interest rate
(JBA yen TIBOR)＋0.75％
Secured and unguaranteed

May 31, 2022
Feb 28, 2023

Sumitomo Mitsui Banking

1,142

Sumitomo Mitsui Banking

73

Base interest rate
(JBA yen TIBOR)＋0.75％
Secured and unguaranteed
Base interest rate
(JBA 3-month yen TIBOR)＋1.25％
Secured and unguaranteed

Aug 31, 2022
May 31, 2023
Sep 01, 2016
May 31, 2023

Sumitomo Mitsui Banking
Sumitomo Mitsui Trust BankORIX BankSan ju San BankThe Towa BankThe Iyo Bank
The Nomura Trust and Banking
The Bank of Fukuoka
The Juhachi-Shinwa Bank

2,780

Base interest rate
(JBA 3-month yen TIBOR)＋0.80％
Secured and unguaranteed

May 31, 2019
May 31, 2023

Sumitomo Mitsui Banking
San ju San Bank
Ogaki Kyoritsu Bank
Fukoku Mutual Life Insurance

3,046

Base interest rate
(JBA yen TIBOR)＋0.75％
Secured and unguaranteed

Feb 28, 2022
Feb 28, 2023

Total

10,389Repaid Feb 28, 2023

6,393

Repaid May 31, 2023

3,996

10,389M

Ooedo Onsen Reit Investment Corporation 25

Materialization of Financial Risks and Countermeasures
Trends in LTV / DSCR
5.0

4.6

4.5
4.3

4.6

4.5

4.5
4.5

4.3

4.0

3.8
3.6
3.4

3.5

3.0

42.2%
40.9%

40.6%

40.3%

40.0%
38.6%

38.4%

2.5

38.1%

39.1%
37.6%

36.8%

36.3%

2.0

34.2%

35.9%
33.8%

33.4%

31.3%

32.9%

1.5

DSCR
29.6%

LTV(appraisal value basis)

1.0

27.2%

LTV(book value basis)

0.5

0.0

0.2

05/18

11/18

05/19

11/19

05/20

11/20

05/21

11/21

05/22

11/22

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

Ooedo Onsen Reit Investment Corporation 26

Ⅳ. Market Environment

Ooedo Onsen Reit Investment Corporation
27

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

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

50.7%

Onsen

16,00049.0%

Sightseeing, nature

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

120,000

12,00042.0%

GourmetSightseeing,
history/culture

90,000
8,000

38.9%

Theme park

33.2%

Seashore resort

32.0%

60,0004,000

Tour of world heritage
sites
Sightseeing in remoteislands

30,0000

27.6%

Sightseeing, city

150,000

02011 2012 2013 2014 2015 2016 2017 2018 2019 2020

19.8%

Source:Onsen Use, Nature Conservation Bureau, Ministry of the Environment

19.8%

Walking in town

18.8%

Zoo/Aquarium

18.8%

Japanese style inn

18.4%

Chatting trip

17.7%

・According to the Annual Report on the Tourism Trends
Survey, "onsen" ranked number one among the types of trip
respondents would like to try.

17.5%

Shopping
0%

20%

40%

60%

80%

・The number of accommodation facilities’ guests has beenstable since FY2011 according to the Onsen Use Survey by
the Ministry of the Environment, but the number declined
temporarily due to COVID19

Source:JTBF Travel Intentions Survey (from “Annual Report on the Tourism Trends Survey” by
Japan Travel Bureau Foundation

Ooedo Onsen Reit Investment Corporation 28

Future Leisure Market
Percentage of respondents who say frequency(of use) will increase after the pandemic subsides

20.0%
15.0%
10.0%
5.0%
0.0%

10%

15%

20%

Percentage of respondents who say that the frequency ofdomestic travel will increase by type of family
Domestic travel (short-distance by train or car)
Domestic travel(long-distance by shinkansen or plane)

同居⼦供あり︵末⼦が⾼校⽣以下︶
夫婦世帯

18.6%
21.6%

18.0%
19.0%

10.0%

⼦供なし
夫婦世帯
︵職あり︶

15.0%

9.3%
9.3%

20.0%

12.1%
13.6%

25.0%

17.8%
20.3%

30.0%

5.0%
⼦供︵末⼦︶
独⽴夫婦世帯
︵職あり︶

同居⼦供あり︵末⼦が⼤学⽣︑社会⼈︶
夫婦世帯

同居⼦供有
単⾝世帯
︵職あり︶

⼦供なし
単⾝世帯
︵職あり︶

0.0%

25.2%
23.7%

35.0%

26.8%
29.5%

40.0%

22.9%
26.5%

25.0%

23.5%
24.1%

30.0%

14.5%
15.1%

5%

Domestic travel(long-distance by shinkansen or plane)

35.0%
16.1%
16.7%

0%

10.6%
9.8%

Domestic travel (short-distance by train or car)
40.0%

16.7%
17.9%

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

19.8%
18.4%

16.9%
18.7%

Domestic travel (short-distance by train or car)
Domestic travel(long-distance by shinkansen or…
Movie theater
Theme park
Overseas travel
KaraokeHospital Clinic
Games (nonportable, portable, online, mobile…
Beauty salon, Hair salonSport club
Bowling alley
Job change service (recruitment site, agent, etc.)
ArcadeCram school (face to…
Cram school, lessons (online)

Percentage of respondents who say that the frequency ofdomestic travel will increase by age group

20代
30代
40代
50代
60代
70代以上
Source:All graphs are prepared by the Asset Manager based on the survey "Consumers’ Vision of theWorld after the COVID-19 Pandemic: Expectations of a Recovery in Service-Oriented
Consumption" of SMBC Nikko Securities Inc.

・The percentage of respondents who say the frequency ofdomestic travel will increase is larger than the percentages
for any other leisure activities.
・The percentage of respondents who say the frequency ofdomestic travel will increase is high in all age groups. The
percentage is particularly high among the elderly, who are
the targets of the Investment Corporation.
・By family type, the percentage is particularly high formarried couples who have children living together or theretired.

Ooedo Onsen Reit Investment Corporation 29

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

Trends in the consumption of services
Services (Experiences)

100%

Goods (Products)

90%

5.8%

80%

70%

60%

67.3%

57.6%

57.7%

59.0%

63.0%

61.3%

Satisfied

24.6%
Moderately satisfied

50%

28.5%

40%

30%

20%

10%

32.7%

37.0%

1980

1990

42.3%

41.0%

42.4%

38.7%

No answer
Slightly dissatisfied

0%

2000

2010

2019

1.5%

2020

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

Dissatisfied

39.6%
Source:Public Opinion Survey on the Life of the People

Priority matters in life
Health69.5%

Assets/Savings

37.9%

Leisure/Leisure life

33.0%

Earnings/Income

30.8%

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

36.1%

Living22.6%

Personal…
Durable consumer…
Clothing

・While “leisure” is ranked high in the public survey on“points of emphasis in one’s future lifestyle,” facilities thatsatisfy the needs remain insufficient.

18.0%
10.1%
6.9%

Others2.7%

No answer

1.3%
0%

10%

20%

30%

40%

50%

60%

70%

80%

Source:Public Opinion Survey on the Life of the People

Ooedo Onsen Reit Investment Corporation 30

Appendix

Ooedo Onsen Reit Investment Corporation
31

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

Environment

SocialEnergy-saving construction work

 Helping employees to acquire expertise

Reoma: Replacement of AC in Reoma World Parrot Theater
Replacement of AC in multipurpose hall
Hot bath hot water circulating line pump No. 1
Replacement of hot bath R-6 filtration system (5F open-air bath
top left and right sides)

To enhance employees' skills and maintain and enhance theirexpertise, we help employees to obtain qualifications, including
real estate transaction certification and ARES Certified Master.

 Diverse ways of working
Introduced remote work and online meetings

Replacement of hot bath R-10 filtration system (4F cold water)
Kinugawa: Replacement of AC in 1F lobby/private bath "Nikko"changing room
Ikaho: Replacement of open-air bath boiler/sauna bath boiler
Kimitsu: Replacement of hot water heaters (2 units）
Replacement of boiler room hot water circulation secondarypump
Kounkaku: Replacement of GHP on 3F and 4F of old building
Replacement of AC in 2F restaurant's porter room
Kinosaki: Replacement of AC in ladies changing roomIse-shima: Replacement of AC in common areas such as
restaurant (approx. 6 units)
Higashiyama: Replacement of integrated AC in 1F lobby
Toi: Installation of AC in restaurant backyard

Governance Flow for careful decision making about transactions with interested
parties
The attendance of external members at meetings of the Compliance
Committee and the Investment Committee and the approval by them
are required.
 Same boat investment of the sponsor
Ooedo Onsen Monogatari Co., Ltd. holds 3.9% of the investment units
issued by the Investment Corporation (as of November 30, 2022).
 Asset Manager's own human resources playing a core role at thecompany
The President and Representative Director is one of the AssetManager’s own human resources
The department heads and those in higher positions have experience
working at listed REITs, real estate funds, financial institutions, etc.

Ooedo Onsen Reit Investment Corporation 32

Rent Structure
Lease conditions for properties master-leased to the Ooedo-Onsen Monogatari Group
Contract period:

20 years

Modified GOP (Note)

Non-cancellation period:

Secondary rent

Primary rent

5-7 years
Rent revision: every 3 years

Variablerent
component

Fixed rent component

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

Primary rent = Fixed rent component (monthly amount stipulated by each lease agreement of each facility) + variable rent component(Variable rent = Modified GOP for each facility × the fixed rate stipulated by each lease agreement)•

Secondary rent = The total of taxes and public dues that is liable for the Investment Corporation+ nonlife insurance premiums + other expenses< Calculation period of variable rent >YYYY-1
Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

YYYY
Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Modified GOP (Note)
YYYY/05 period
Modified GOP
YYYY/11 period(Note) “GOP” refers to gross operating profit, which is the amount remaining after deducting expenses arising directly from managing each facility, such as labor expenses and general and administrative
expenses, from each facility’s sales. “Modified GOP” is the amount remaining after deducting real estate-related expenses for the property to be borne by the tenant (including, but not limited to, taxes
and public charges, non-life insurance premiums and land and house rent, but excluding an amount equivalent to Secondary rent) from the GOP of each facility for the Modified GOP Calculation Period.
The same applies hereinafter.

Ooedo Onsen Reit Investment Corporation 33

Portfolio Data ︓ List

Property
No.

Property nameLocation

Building age(years)Roomoccupancy
rate

Number ofrooms

Acquisition
priceAppraisalvalue

NOI yield

NOI(Note 2)

(Note 1)

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

Ooedo-Onsen Monogatari Reoma
ResortKagawaPrefecture
Mie
Ooedo-Onsen Monogatari Ise-shima
Prefecture
Shizuoka
Ito Hotel New Okabe
Prefecture
Shizuoka
Ooedo-Onsen Monogatari Atami
Prefecture
Ooedo-Onsen Monogatari Toi Marine
Shizuoka
Hotel
Prefecture
Fukui
Ooedo-Onsen Monogatari Awara
Prefecture
Gunma
Ooedo-Onsen Monogatari Ikaho
Prefecture
Ooedo-Onsen Monogatari Kimitsu-noChiba
mori
Prefecture
Miyagi
Ooedo-Onsen Monogatari Kounkaku
Prefecture
Tochigi
Kinugawa Kanko Hotel
Prefecture
Hyogo
Ooedo-Onsen Monogatari Kinosaki
Prefecture
Fukushima
Ooedo-Onsen Higashiyama Grand Hotel
Prefecture
Total/Average(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)31.4／31.7(In million of JPY)
After
depreciation
PML
NOI yield(Note 2)

241

66.7%

9,697

8,700

232

4.8%

2.9%

2.0／1.6％

42.7

83

81.3%

3,656

3,810

80

4.4%

1.5%

14.2%

32.1

73

70.4%

2,657

2,800

54

4.1%

1.9%

12.0%

48.9

76

81.6%

3,000

3,450

69

4.6%

2.3%

13.1%

48.2

64

72.7%

1,910

2,010

40

4.2%

0.9%

15.4%

41.3

95 Excelデータ
74.1%

1,901

2,000

48

5.1%

2.7%

15.5%

39.1

40

80.2%

1,299

1,370

26

4.1%

1.9%

1.0%

26.7

41

78.7%

819

829

16

3.9%

1.7%

4.8%

57.0

98（Note 4）48.6%

1,040

1,210

30

5.9%

1.5%

3.9%

41.3

172

78.1%

3,870

6,110

128

6.6%

3.3%

2.1%

54.1

103

78.4%

1,458

1,710

78

7.5%

5.3%

11.8%

58.2

123

80.7%

1,230

1,460

37

6.1%

1.3%

4.6%

41.6

1,209

72.8%

32,54335,459843

5.0%

2.4%（Note 5） 2.9%（Note 3）（Note 4）20210531_不動産鑑定概要書_am（Note 4）

Room occupancy rate is for the 12th period ended May 31,2022, of the investment corporation.
(Average) NOI yield and (average) after depreciation NOI yield indicate annualized figures.
As for Building age and PML of Ooedo-Onsen Monogatari Reoma Resort, figures on the left indicate those of Hotel Reoma no Mori while figures on the right indicate those of New Reoma World.
The room occupancy rate is a property not owned by the investment corporation.
PML is figure including Ooedo-Onsen Monogatari Kamoshika-so sold at the end of November 2022.

Ooedo Onsen Reit Investment Corporation 34

Portfolio Data : Investment ratio
Investment ratio by region

Investment ratio by facility0%

Tohoku 7.0%

2.5%
3.2%
3.8%
4.0%
5.8%

2.3%
3.4%
4.1%
3.9%
5.6%

2.1%
3.7%
4.5%
3.2%
5.7%

5.9%

5.7%

4.8%

4.5%

4.8%

9.2%

8.2%

7.9%

Toi Marine

9.2%

9.7%

8.2%

Kinosaki

11.2%

10.7%

9.4%

Kimitsu-no-moriKounkaku

10%

Kanto 18.4%
20%

Higashiyama
Ikaho

30%

Awara

6.4%

40%

Tokai 34.5%
50%

60%

70%

Hokuriku 5.8%
Kinki 4.5%

Ito Hotel New Okabe

11.9%

Atami

17.2%

15.2%

Ise-shima
80%

Shikoku 29.8%

Kinugawa Kanko

29.8%

24.5%

27.5%

90%

Reoma Resort
100%

Acquisition price basis

ACQUISITION
PRICE BASIS

APPRAISALVALUE BASIS

PRIMARY RENT
BASIS

Ooedo Onsen Reit Investment Corporation 35

Portfolio Data : Status of appraisal value
Appraisal value decreased JPY 285 million overall due to the impact of rent reduction; in the case of Ito and Ikaho, rent reduction
was offset by decreased CAPEX through the re-acquisition of an engineering report; Atami's appraisal value increased as a resultof corrective action (construction for building compliance) in response to decrease in value in previous appraisal.
(In million of JPY)

Ooedo-Onsen Monogatari Reoma Resort

9,697

9,383

8,750

8,700

-50

-683

6.0%

6.0%

-

5.8%

5.8%

-

6.2%

6.2%

-

S-2

Ooedo-Onsen MonogatariIse-shima

3,656

3,164

3,830

3,810

-20

+645

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-3

Ito Hotel New Okabe

2,657

2,501

2,800

2,800

-

+298

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-4

Ooedo-Onsen Monogatari Atami

3,000

2,729

3,420

3,450

+30

+720

5.1%

5.1%

-

4.9%

4.9%

-

5.2%

5.2%

-

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

1,910

1,723

2,020

2,010

-10

+286

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-6

Ooedo-Onsen Monogatari Awara

1,901

1,803

2,020

2,000

-20

+196

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

S-8

Ooedo-Onsen Monogatari Ikaho

1,299

1,227

1,370

1,370

-

+142

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-9

Ooedo-Onsen Monogatari Kimitsu-nomori

819

816

859

829

-30

+12

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-11 Ooedo-Onsen Monogatari Kounkaku

1,040

956

1,220

1,210

-10

+253

5.5%

5.5%

-

5.3%

5.3%

-

5.7%

5.7%

-

S-12 Kinugawa Kanko Hotel

3,870

3,430

6,130

6,110

-20

+2,679

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-13 Ooedo-Onsen Monogatari Kinosaki

1,458

1,493

1,855

1,710

-145

+216

5.4%

-

-

5.2%

5.2%

-

5.6%

-

-

S-14 Ooedo-Onsen Higashiyama Grand Hotel

1,230

1,143

1,470

1,460

-10

+316

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

Total

32,54330,37335,74435,459-285+5,085

－

－

－

－

－

－

Appraisal value

05/22

11/22

changeUnrealized
profits and
loses

S-1

Book value

Property nameAcquisition
Price

Property No.

Direct capitalization
methodDiscounted cash flow method

Direct Cap Rate
05/22

Discount Ratevaluation

11/22

－

05/22

11/22

Terminal Cap Ratevaluation

－

05/22

valuation

11/22

－

*Kinosaki's appraisal value is the figure corresponding to a 70% co-ownership interest and since the sale of the co-ownership interest in its entirety is due to be completed on February 28, the valuation method isthe discounted cash flow method/discount rate only and not the direct capitalization method.

Ooedo Onsen Reit Investment Corporation 36

Portfolio Data : Operating Results for the Entire Portfolio
Achieved a significant recovery due to a decrease in the number of COVID-19 cases during the second half of the period
under review and measures for supporting the tourism business such as discounts for residents in each prefecture.

11/22
periodaverage

11/22
periodaverage

11/22
periodaverage

Previous
corresponding
periodaverage

Sale（million）

Previous
corresponding
periodaverage

Name

RevPAR（JPY）

Previous
corresponding
periodAverageNo.

ADR（JPY）

Previous
corresponding
periodaverage

Room occupancy rate (%)

11/22
periodaverage

37.8

66.7

＋76.5%

33,19635,243＋6.2%

12,54823,507＋87.3%

672

1,273＋89.3%

63.2

81.3＋28.6%

29,07833,633＋15.7%

18,377

27,343＋48.8%

318

476＋49.8%

ChangeChangeChangeChangeS-2

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

S-3

Ito Hotel New Okabe

48.4

70.4

＋45.5%

24,53032,646＋33.1%

11,872

22,982＋93.6%

265

501＋89.4%

S-4

Ooedo-Onsen Monogatari Atami

61.7

81.6

＋32.3%

25,55233,330＋30.4%

15,76527,197＋72.5%

246

427＋73.3%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

52.9

72.7

＋37.4%

28,34734,307＋21.0%

14,99524,941＋66.3%

192

317＋65.1%

S-6

Ooedo-Onsen Monogatari Awara

59.7

74.1

＋24.1%

26,91329,485＋9.6%

16,067

21,848＋36.0%

312424＋35.8%

S-8

Ooedo-Onsen Monogatari Ikaho

76.8

80.2

＋4.4%

26,61033,421＋25.6%

20,43626,803＋31.2%

167

224＋33.6%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-mori

70.8

78.7

＋11.2%

24,32528,690＋17.9%

17,222

22,579＋31.1%

167

220＋31.6%

S-11 Ooedo-Onsen Monogatari Kounkaku

37.2

48.6

＋30.6%

22,92826,250＋14.5%

8,529

12,757＋49.6%

200

305＋51.9%

S-12 Kinugawa Kanko Hotel

42.9

78.1

＋82.1%

25,59630,861＋20.6%

10,98024,102＋119.5%396854＋115.5%

S-13 Ooedo-Onsen Monogatari Kinosaki

56.6

78.4

＋38.5%

30,956

34,738＋12.2%

17,521

27,234＋55.4%

368

582＋58.0%

S-14 Ooedo-Onsen Higashiyama Grand Hotel

57.0

80.7

＋41.6%

24,193

27,578＋14.0%

13,79022,255＋61.4%

331

545＋64.4%

50.6

72.8＋43.9%

27,282

31,932＋17.0%

13,80423,246＋68.4%

3,641

6,154

＋69.0%

Total

No.

S-1

Name

Ooedo-Onsen Monogatari Reoma
Resort< New Reoma World >Previous
corresponding
periodaverage

Number of guests
11/22
periodaverageChange224,189

303,087＋35.2%

Sale（million）
Previous
corresponding
periodaverageS-1

11/22
periodaverage

881

1,215

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

＋37.8%

Ooedo Onsen Reit Investment Corporation 37

Portfolio Data : 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:

669,420 m2 (Note)
63,896 m2

Site area:

9,637 m2
9,782 m2

Site area:

2,945 m2
10,211 m2

Total floor area:

Total floor area:

Area characteristics

Area characteristics (Note)

Ooedo-Onsen MonogatariIse-shima

Marugame City, where this facility is located, is in the Seisanarea (West Sanuki). Many tourist spots are easily accessible,
including Marugame Castle, Kotohira-gu Shrine and the Great
Seto Bridge, etc., meaning local sightseeing and leisure canbe enjoyed together with the facility.



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



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

Total floor area:

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

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

hot springs from the Heian Period.

(Note) Part of the land (area: 211,089.59 m2) is leased from athird party (domestic corporation).

Ooedo Onsen Reit Investment Corporation 38

Portfolio Data : Introduction of Properties (1)

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-1: Ooedo-Onsen Monogatari Reoma Resort 〈Hotel Reoma-no-mori〉

Room occupancy
rate

70.7%

37.3%

22.9%

44.5%

37.8%

62.6%

51.2%

63.7%

80.8%

61.0%

61.7%

81.7%

56.6%

37.8%

66.7%

＋76.5%ADR (yen)

34,526

36,114

22,38332,13832,71432,60325,33839,16354,40328,59928,58728,86934,22333,19635,243＋6.2%

RevPAR (yen)24,40913,4705,125

14,301

12,365

20,40912,97324,946

43,957

17,445

17,63823,585

19,37012,54823,507＋87.3%

213

118

42

127

105

184

127

221

388

153

165

216

2,066

672

1,273

＋89.3%

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Sales (million yen)Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-2: Ooedo-Onsen Monogatari Ise-shima

Room occupancy
rate

84.6%

66.0%

62.4%

78.6%

80.0%

80.3%

82.7%

74.9%

78.8%

84.2%

78.2%

89.6%

78.4%

63.2%

81.3%

＋28.6%ADR (yen)

33,96930,54323,33732,85730,602

31,87727,096

34,06647,41330,78031,441

31,42832,342

29,07833,633＋15.7%

RevPAR (yen)28,737

20,15814,56225,82524,481

25,59722,40825,51537,361

25,916

24,58628,15925,356

18,377

27,343＋48.8%

84

59

38

75

68

74

64

74

107

73

74

83

876

318

476

＋49.8%

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Sales (million yen)

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-3: Ito Hotel New Okabe

Room occupancy
rate

79.0%

59.9%

56.8%

76.3%

71.7%

59.9%

56.0%

63.4%

76.4%

73.5%

69.6%

83.6%

68.9%

48.4%

70.4%

＋45.5%ADR (yen)

31,58831,95322,24829,29327,40031,96624,92432,24347,936

27,70929,51330,741

31,02024,53032,646＋33.1%

RevPAR (yen)24,954

19,13912,63622,35019,645

19,147

13,957

20,442

36,623

20,366

20,541

25,69921,372

11,872

22,982＋93.6%

93

71

42

83

71

70

51

75

131

72

76

93

934

265

501

＋89.4%

Sales (million yen)

ChangeOoedo Onsen Reit Investment Corporation 39

Portfolio Data : 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:

2,066 m2
8,469 m2

Site area:

2,911 m2
6,125 m2

Site area:

13,263 m2
14,132 m2

Total floor area:

Total floor area:

Area characteristics

Area characteristics


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

Total floor area:

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



Toi Onsen, where this facility is located, is the oldest hot
spring in the west Izu area. It is famous for the “Toi GoldMine” from the Edo period and attracts many visitors.

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

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

Ooedo Onsen Reit Investment Corporation 40

Portfolio Data : Introduction of Properties (2)

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-4: Ooedo-Onsen Monogatari Atami

Room occupancy
rate

90.5%

71.6%

68.0%

88.2%

42.9%

74.7%

80.0%

73.3%

83.6%

86.8%

78.9%

87.0%

77.2%

61.7%

81.6%

＋32.3%ADR (yen)

33,40430,191

25,46331,492

32,66732,694

26,15634,08848,80629,17530,27430,91132,29825,55233,330＋30.4%

RevPAR (yen)30,23021,616

17,314

27,77514,014

24,422

20,92424,98640,801

25,32323,886

26,892

24,934

15,76527,197＋72.5%

79

56

41

71

35

63

54

65

106

64

64

71

776

246

427

＋73.3%

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Sales (million yen)Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-5: Ooedo-Onsen Monogatari Toi Marine Hotel

Room occupancy
rate

77.6%

48.3%

46.1%

70.2%

72.2%

65.4%

58.9%

64.1%

87.7%

70.1%

64.4%

91.0%

68.1%

52.9%

72.7%

＋37.4%ADR (yen)

29,79730,802

22,07328,241

26,83530,17024,31838,96655,52826,64527,14927,39431,50528,34734,307＋21.0%

RevPAR (yen)23,122

14,877

10,17519,825

19,374

19,731

14,323

24,977

48,69818,67817,48324,92821,454

14,99524,941＋66.3%

50

32

19

42

40

42

30

53

102

39

38

53

546

192

317

＋65.1%

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Sales (million yen)

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-6: Ooedo-Onsen Monogatari Awara

Room occupancy
rate

70.2%

53.1%

42.8%

62.4%

58.3%

59.8%

55.5%

69.0%

83.8%

71.3%

77.2%

87.4%

66.1%

59.7%

74.1%

＋24.1%ADR (yen)

30,77429,992

23,31627,02826,03828,653

22,88232,18942,172

25,867

24,88026,04928,81826,91329,485＋9.6%

RevPAR (yen)21,603

15,925

9,979

16,865

15,18017,134

12,69922,21035,34018,443

19,20722,766

19,04816,067

21,848＋36.0%

71

52

29

54

47

55

40

71

114

58

64

74

737

312

424

＋35.8%

Sales (million yen)

ChangeOoedo Onsen Reit Investment Corporation 41

Portfolio Data : Introduction of Properties (3)S-8

Ooedo-Onsen Monogatari
Ikaho

Location:

Shibukawa City,
Gunma Prefecture

Site area:

6,805 m2
5,177 m2

Total floor area:

S-11

Location:

Kimitsu City,
Chiba Prefecture

Location:

Osaki City,
Miyagi Prefecture

Site area:

57,069 m2
8,660 m2

Site area:

11,829 m2
10,843 m2

Total floor area:

Area characteristics


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

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

Ooedo-Onsen Monogatari
Kounkaku

Ooedo-Onsen Monogatari
Kimitsu-no-moriS-9Total floor area:

Area characteristics

Area characteristics


Kimitsu City is located in the center of Chiba Prefecture, andwith significant improvements to vehicle access from Chiba,
Tokyo and Yokohama in the past few years due to thecompletion of the Tateyama Expressway and the Tokyo Bay
Aqualine, an influx of visitors is expected.
Inland Boso Peninsula, where this facility is located, is
expecting robust tourism demand with popular sightseeing
destinations nearby.



Naruko-kyo Gorge, where the facility is located, has 400
spring sources offering 9 of Japan’s 11 types of spring water
nearby. It is a hot spring site boasting ample volume of water.



Temporary bus services (“Momiji-go”) are operated between
Naruko Onsen Station and Nakayamadaira-Onsen Station
via Naruko-kyo Gorge each autumn when the leaves change
color.

Ooedo Onsen Reit Investment Corporation 42

Portfolio Data : Introduction of Properties (3)

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-8: Ooedo-Onsen Monogatari Ikaho

Room occupancy
rate

94.7%

78.7%

67.1%

71.9%

88.4%

86.2%

80.4%

77.8%

79.6%

81.2%

78.9%

83.7%

80.8%

76.8%

80.2%

＋4.4%

ADR (yen)

35,58332,675

24,611

32,104

31,95233,44429,38331,19542,20330,25833,022

34,26232,783

26,61033,421＋25.6%

RevPAR (yen)33,69725,715

16,51323,082

28,24528,82823,62324,26933,59324,56926,054

28,677

26,48820,43626,803＋31.2%

46

35

21

31

38

40

33

34

46

33

37

39

438

167

224

＋33.6%

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Sales (million yen)Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-9: Ooedo-Onsen Monogatari Kimitsu-no-moriRoom occupancy
rate

89.1%

84.8%

77.4%

78.1%

82.4%

80.2%

72.9%

75.2%

84.2%

82.3%

74.3%

83.5%

80.4%

70.8%

78.7%

＋11.2%ADR (yen)

27,07027,10022,274

26,721

28,86330,01525,147

28,83338,92026,14425,555

26,38627,88624,32528,690＋17.9%

RevPAR (yen)24,11922,98017,24020,86923,78324,072

18,332

21,682

32,77021,51618,98722,032

22,42017,222

22,579＋31.1%

39

37

25

34

37

40

29

35

51

34

33

36

435

167

220

＋31.6%

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Sales (million yen)

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-11: Ooedo-Onsen Monogatari Kounkaku

Room occupancy
rate

66.4%

40.4%

31.8%

47.7%

34.0%

41.5%

42.4%

31.8%

42.0%

41.5%

58.0%

76.7%

46.3%

37.2%

48.6%

＋30.6%ADR (yen)

28,35830,83924,34625,703

24,614

28,12024,621

26,94530,75626,48925,63924,651

26,74322,92826,250＋14.5%

RevPAR (yen)18,82912,458

7,742

12,2608,368

11,66910,4398,568

12,917

10,992

14,87018,907

12,382

8,529

12,757＋49.6%

75

49

28

48

32

46

41

34

51

42

60

75

586

200

305

＋51.9%

Sales (million yen)

ChangeOoedo Onsen Reit Investment Corporation 43

Portfolio Data : Introduction of Properties (4)Ooedo-Onsen Monogatari
KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel

S-12

Kinugawa Kanko Hotel

S-13

Location:

Nikko City,
Tochigi Prefecture

Location:

Toyooka City,
Hyogo Prefecture

Location:

Site area:

Aizuwakamatsu City,
Fukushima Prefecture

6,719 m2
22,402 m2

Site area:

11,350 m2
10,602 m2

Site area:

12,451 m2
16,665 m2

Total floor area:

Total floor area:

Area characteristics
 Nikko City is located in northwestern Tochigi Prefecture and is a

resort accessible from Tokyo and was rapidly developed during
and after the period of high economic growth.

Total floor area:

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

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

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

S-14

Area characteristics


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

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

Ooedo Onsen Reit Investment Corporation 44

Portfolio Data : Introduction of Properties (4)

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-12: Kinugawa Kanko Hotel

Room occupancy
rate

66.7%

37.5%

25.6%

50.0%

59.0%

46.9%

64.9%

67.7%

91.8%

80.3%

74.8%

89.1%

63.0%

42.9%

78.1%

＋82.1%ADR (yen)

31,47632,88921,831

27,32427,29931,43924,372

28,10737,871

28,37532,52331,08230,262

25,59630,861＋20.6%

RevPAR (yen)20,994

12,333

5,588

13,662

16,106

14,744

15,81719,02834,76522,78524,327

27,69419,065

10,98024,102 ＋119.5%

128

75

31

82

93

88

92

113

204

131

147

165

1,354

396

854 ＋115.5%

Sales (million yen)Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-13: Ooedo-Onsen Monogatari Kinosaki

Room occupancy
rate

85.4%

54.0%

51.7%

81.6%

75.4%

79.5%

71.6%

73.3%

83.5%

81.0%

75.6%

85.3%

75.0%

56.6%

78.4%

＋38.5%ADR (yen)

34,922

37,77627,21235,26030,58732,01527,372

33,91548,277

31,52830,69834,702

34,00330,956

34,738＋12.2%

RevPAR (yen)29,823

20,39914,06828,772

23,06225,451

19,59824,85940,311

25,537

23,20729,60025,502

17,521

27,234＋55.4%

107

73

44

99

79

91

69

89

140

88

86

108

1,079

368

582

＋58.0%

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Sales (million yen)Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

Change

12/21

01/22

02/22

03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

Cumulative
total

S-14: Ooedo-Onsen Monogatari Higashiyama Grand Hotel

Room occupancy
rate

65.5%

43.5%

32.2%

40.3%

68.3%

71.9%

80.7%

66.4%

80.3%

85.3%

86.4%

85.4%

67.3%

57.0%

80.7%

＋41.6%ADR (yen)

30,19133,07023,071

26,54827,676

29,61025,084

27,46933,91925,26327,00826,76728,07024,193

27,578＋14.0%

RevPAR (yen)19,775

14,385

7,428

10,69818,902

21,28920,242

18,23927,236

21,54923,33422,85918,891

13,79022,255＋61.4%

81

59

27

43

75

87

80

75

110

85

99

94

919

331

545

＋64.4%

Sales (million yen)

ChangeOoedo Onsen Reit Investment Corporation 45

Portfolio Data : Introduction of Properties (5)

12/21

01/22

Number of guests

84,22928,753

Sales (million yen)

312

113

02/22

Cumulative
total

S-1: Ooedo-Onsen Monogatari Reoma Resort 〈New Reoma Resort〉
03/22

04/22

05/22

06/22

07/22

08/22

09/22

10/22

11/22

9,650

27,26732,94556,982

38,162

48,142

95,68932,72341,702

46,669 542,913

30

108

132

236

130

209

391

133

168

181

2,149

Previous
corresponding
periodcumulative
total

11/22
periodcumulative
Total

224,189

303,087＋35.2%

881

1,215＋37.8%

ChangeOoedo Onsen Reit Investment Corporation 46

Financial Indices
IndicesMay. 2022

Nov. 2022

Calculation formula

Ordinary income

354 mn yen

327 mn yen

Net income

353 mn yen

327 mn yen

Depreciation

440 mn yen

441 mn yen

CAPEX

207 mn yen

169 mn yen

Total assets

34,760 mn yen

33,166 mn yen

Total net assets

20,978 mn yen

20,947 mn yen

BPS (Total net assets/unit)

89,138 yen

89,006 yen

Unit price (End of each period)

70,700 yen

64,000 yen

235,347 units

235,347units

357 mn yen

330 mn yen

1,521 yen

1,404 yen

Total units outstanding
Total distribution
DPU
Distribution yield
FFO

4.3%
778 mn yen

4.4% DPU (annualized)/Unit price as of end of period
526 mn yen Net income + Depreciation－profit or loss on sale of real estate

FFO per unit

3,306 yen

FFO multiple

10.7x

14.3x Unit price as of end of period/FFO per unit (annualized)

23.4x

23.1x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PER

2,235 yen

PBR

0.8x

0.7x Unit price as of end of period/Net assets per unit

ROA

1.0%

1.0% Ordinary income/Average of total assets during the period

2.0%

2.0%

1.7%

1.6% Net income/Average of total net assets during the period

3.4%

3.1%

Annualized
ROE
Annualized
NAV

26,303 mn yen

NAV per unit

111,763 yen

NAV multiple

0.6xInterest-bearing debt
LTV (book value basis)
LTV (appraisal value basis)
Operating days

11,874 mn yen
34.2%
29.6%
182 days

26,040 mn yen Total net assets + Total appraisal value - Total book value - Total liabilities
110,654 yen
0.6x Unit price as of end of period/NAV per unit
10,389 mn yen
31.3% Interest-bearing debt/Total assets
27.1% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)
183days

Ooedo Onsen Reit Investment Corporation 47

Balance Sheet(thousand yen)

May. 2022(thousand yen)

Nov. 2022

May. 2022

AssetsNov. 2022

Liabilities

Current assets

Current liabilities

Cash and deposits

2,078,429

2,667,035

Operating accounts payable

169,075

117,571

Prepaid expenses

180,239

101,550

Short-term loans payable

5,119,741

4,489,185

6,433

4,829

Current portion of long-term loans payable

2,265,102

2,773,414

Other
Total current assets
Non-current assets
Property, plant and equipment

6,754,582

5,900,601

Accounts payable - other

85,321

91,180Accrued expenses

3,251

4,275

Income taxes payable

1,012

886

25,880,675

24,648,005

Accrued consumption taxes

Accumulated depreciation-4,403,860-4,611,639

Advances received

Buildings, net

21,476,814

20,036,366

Other

Buildings

29,98950,849

Accumulated depreciation-3,199-4,337Structures, net

26,78946,511

Structures

Total current liabilities

117,571

77,895

230,392

313,919

6,138

5,716

12,487,085

11,001,233

1,155,461

1,096,069

Non-current liabilities
Tenant leasehold and security deposits

600

600

Asset retirement obligations

139,909

122,106

Accumulated depreciation

-150

-168

Total non-current liabilities

1,295,371

1,218,175

Machinery and equipment, net

449

431

13,782,457

12,219,408

Tools, furniture and fixtures

16,314

16,702

Accumulated depreciation-4,310-5,173Tools, furniture and fixtures, net

12,004

11,52820,653,023

20,653,023

10,657,384

9,946,436

ｰ

6,790

-28,648-32,884

32,173,441

30,048,064

Machinery and equipment

Land
Construction in progress
Total property, plant and equipment
Intangible assets

300,798

325,013

Total intangible assets

300,798

325,013

Investments and other assets

19

13

Long-term prepaid expenses

11,25010,125

Lease and guarantee deposits

10,08910,089Total investments and other assets

21,35920,22832,495,599

30,393,307

34,760,701

33,166,721

Total non-current assets
Total assets

Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Allowance for temporary difference adjustment-28,648-32,884

20,624,375

20,620,138

Unappointed retained earnings (undisposed loss)

353,869

327,173

Total surplus

353,869

327,173

20,978,244

20,947,312

20,978,244

20,947,312

34,760,701

33,166,721

Total deduction from unitholders’ capital
Unitholders’ capital, net

Leasehold right

Deferred tax assets

Total liabilities

Surplus

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

Ooedo Onsen Reit Investment Corporation 48

Statement of Income(thousand yen)

May. 2022

Nov. 2022

Operating revenue
Lease business revenue

1,274,798

995,389

16,601

242,124

1,291,399

1,237,514

Expenses related to rent business

559,373

561,383

Asset management fee

113,160

110,320

Asset custody fee

1,637

1,544

Administrative service fees

16,612

15,038

Directors’ compensations

3,600

3,600

Other operating expenses

42,36940,429Total operating expenses

736,753732,317554,645

505,197

Gain on sales of real estate properties
Total operating revenue
Operating expenses

Operating income
Non-operating income
Interest income

13

13

Reversal of distributions payable

554

596

Total non-operating income

567

609

Non-operating expenses
Interest expenses

54,23449,339Borrowing related expenses

134,905

126,206

Total non-operating expenses

200,377

177,881354,835

327,925

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

Total extraordinary losses--

Income before income taxes

354,835

327,925

Income taxes – current

1,014

889

Income taxes – deferred

-2

6

1,011

895

353,824

327,030

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

45

143

353,869

327,173

Ooedo Onsen Reit Investment Corporation 49

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

Accommodation

 Taking note of consumption for services (experience-based consumption)
for which demand is expected to increase both in Japan and among inboundtourists,

H&BC

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

Onsen/spa

Theme park

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

Building of a hybrid portfolio that satisfies both stability and growth
Amusements

 Maintenance of stable operation exemplified by the Ooedo business model＋α
Otherservices

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

Ooedo Onsen Reit Investment Corporation 50

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

Overview
Company Name

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

Capital

100 million yen (As of the end of November 2022)

Address

7-16-21 Ginza, Chuo-ku, Tokyo

Establishment

December 5, 2017 (founded in November 2001)

Representative

Representative Director Mitsumasa Morita

No. of Employees

1,254 (as of the end of February 2022)*The total number of employees on a group-wide basis

Financial Results(Feb. 2022)

Consolidated Net Sales: 24,761 million yen
Consolidated Total Assets: 69,272 million yen
Net Assets: 16,695 million yen Reinvigorating onsen ryokan, hotels, spa-related facilities, theme parks around thecountry
Businesses We started with the onsen theme park, “Ooedo-Onsen Monogatari,“ which has an

Edo culture theme. As of Feb. 28, 2022, we operate 37 onsen and spa-related
facilities

Trends in number of facilities
2003

2007 - 20092010 - 20132016

Opened Ooedo-Onsen
Monogatari in Odaiba,
Tokyo

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

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

Opened Kounkaku,
Masuya andNagasaki Hotel Seifu

OdaibaOoedo-Onsen
Monogatari

Ooedo-Onsen
Monogatari
Aizu

Hotel New
Shiobara

2017

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

Ooedo-Onsen
Monogatari
Gero Shin-kan

Ooedo-Onsen
Monogatari
MasuyaOoedo-Onsen
Monogatari
Minoh Kanko Hotel

40
30
20
10
0

6

9

12

18

20

24

25

27

2018

27

27

2019

2020

Opened TAOYA Shima,
Amakusa Hotel Kameya

Opened Shiomi-so,
Saikaibashi Corazon Hoteland Iwanumaya

Ooedo-Onsen
Monogatari
Amakusa Hotel Kameya

Saikaibashi
Corazon Hotel

Ooedo-Onsen
Monogatari
Hotel Kisoji30

End of

End of

End of

End of

End of

End of

End of

End of

End of

End of

End ofSep. 2007

Sep. 2008

Sep. 2009

Sep. 2010

Sep. 2011

Sep. 2012

Sep. 2013

Feb. 2014

Feb. 2015

Feb. 2016

Feb. 201732

34

End of

End ofFeb. 2018 Feb. 2019

37

38

37

End of

End of

End ofFeb. 2020Feb. 2021

Sep. 2021

Ooedo Onsen Reit Investment Corporation 51

Ooedo-Onsen Monogatari Group (2)Trend in total number of hotel guests at
Ooedo-Onsen Monogatari Group facilities(thousands)

4,000
3,623
3,421

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

3,126
3,000

2,766

REIT acquired assets
Ooedo-Onsen Monogatari
1,838

2,000
1,515

MasuyaOoedo-Onsen Monogatari

Kakeyu Fujikan Sakurakan

FY2017FY2018FY2019FY2020

FY2021

FY2022

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

KinosakiOoedo-Onsen Monogatari

Saikaibasi Corazon Hotel
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Beppu Seifu

Ooedo-Onsen Monogatari

Amakusa
Hotel Kameya

Ooedo-Onsen Monogatari

Nikko Kirifuri

Yamashitaya
Gero Shin-kan

Nagasaki Hotel Seifu

Higashiyama Grand Hotel

Yamashiro Onsen
Ooedo-Onsen Monogatari

Kamoshika-so
Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Urayasu Mangekyo(Onsen theme park)

Ooedo-Onsen Monogatari

Kimitsu-no-moriOoedo-Onsen Monogatari

Hotel Suiyotei

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

Nanki-kushimoto

Ooedo-Onsen MonogatariIse-shima

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari(Spa-related facilities

for day visits)
Aizu
Hotel New Shiobara
Hotel Kinugawa Gyoen

Ikaho
Hotel Shinko

Reoma Resort

Minoh Kanko Hotel

Sendai Korona-no-yu

Ooedo-Onsen Monogatari

Nagayama

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Shiomi-so

Ooedo-Onsen Monogatari

Awara

Hotel Sohkan

Ooedo-Onsen Monogatari

Hotel Kisoji

1,000

Kounkaku

Sendai Akiyu-onsen
Iwanumaya

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari Atami
Ooedo-Onsen Monogatari

TAOYA Shima

Ito Hotel New Okabe
Ooedo-Onsen Monogatari

Toi Marine Hotel

Ooedo Onsen Reit Investment Corporation 52

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

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

Highquality
service＋

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

Affordable
price

Marketing programs to maximize
customer reach
Measures to attract more customers led by the headquartersof the Ooedo-Onsen Monogatari Group Efforts to attract more customers by utilizing in-house facilities
such as reservation centersOoedo Onsen Reit Investment Corporation 53

“Ooedo Business Model” with Stable Operations and Sustainable Growth (2)Maintained high-level customer satisfaction, although the business continued to be affectedby COVID-19 after March.
Ooedo-Onsen Monogatari Group hotel guest questionnaire（Jun. 1, 2022 – Nov. 30, 2022）< Overall satisfaction >
4.1%

1.1%

< Meal (dinner) >< Meal (breakfast) >

0.3%

5.7%

0.9%

46.7%

0.2%

6.4%

46.8%

47.8%

44.5%

< Onsen >1.7%< Type of services inside the facility >
0.2%

12.9%

1.3%

0.2%

35.1%

44.1%
46.9%

Very saticefied

0.4%

47.0%

46.4%

7.2%

1.7%

50.6%

Satisfied

Fair

Unsatisfied

Very unsatisfied
Ooedo Onsen Reit Investment Corporation 54

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

1. At restaurants

2. At baths

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

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

Footprint stickers placed every
two meters in front of restaurants

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

Slippers stored in a bag

4. Requests for guests

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

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

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

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

Blocking shields
in front of a store

Alcohol hand sanitizers placedin various places

Ooedo Onsen Reit Investment Corporation 55

Unitholders Breakdown
Ratio by number of unitholders

Top 10 unitholders＜05/22＞
17,7930.2%

1.1%＜11/22＞
18,314
0.8%

1.0%

0.2%

Name

97.9%

Raito by number of investment units
7.5%

7.5%

7.6%

48.4%
36.6%

7.8%

32.6%

Ratio

1

Custody Bank of Japan, Ltd. (Trust Account)

23,0849.8%

2

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

21,825

9.3%

3

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

10,192

4.3%

4

Ooedo-Onsen Monogatari Co., Ltd.

9,246

3.9%

5

Individual

3,504

1.5%

6

DFA INTERNATIONAL REAL ESTATE SECURITIESPORTFOLIO

2,915

1.2%

7

Banshu Shinkin BANK

2,880

1.2%

8

Morgan Stanley MUFG Securities Co., Ltd.

2,711

1.2%

9

YONEZAWA SHINKIN BANK

2,500

1.1%

10

osaka shoko shinkin bank

2,000

0.8%

80,857

34.4%

0.9%

個⼈
97.8%

Number ofunits held

52.0%

Total
（Total units outstanding 235,347）

Ooedo Onsen Reit Investment Corporation 56

Track Record of Investment Unit Price
Relative comparison of investment unit price and TSE REIT index / trading volume（units）（JPY）

35,000110,000

100,000
28,00090,00021,00080,00070,00014,00060,0007,000
50,00040,000008/16 11/16 02/17 05/17 08/17 11/17 02/18 05/18 08/18 11/18 02/19 05/19 08/19 11/19 02/20 05/20 08/20 11/20 02/21 05/21 08/21 11/21 02/22 05/22 08/22 11/22

出来⾼

投資⼝価格

東証リート指数(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 57

Overview of Investment Corporation
Parent Company of Asset Manager
Sponsor

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

Ooedo-Onsen Monogatari Co., Ltd.

Investment Corporation⑦②⑥

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.

③

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

④

General Administrator(tax payment)

Reiwakaikeisha Tax Corporation⑥

Independent Auditor

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

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

Asset Custodian
Unitholders’ Registry Administrator
General Administrator(agency management)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 58

Overview of Asset Manager
Registrationsand Licenses

Name: Ooedo Onsen Asset Management Co., Ltd.

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

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

Established: April 24, 2015

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

Capitalization: 50 million yen

Member of the Investment Trusts Association, Japan

Representative: Takeshi Kirihara

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

Employees: Real estate brokerage, Governor of Tokyo (2) No. 98032: 13 (as of January 1, 2023)

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 59

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

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

Management fee II

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

Acquisition fee(Note 2)

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

Disposition fee

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

Merger fee

Appraisal value at the time when a merger takes effect × 1.0% (upper limit)(Note 1) Subject to adjustment for asset acquisitions and asset dispositions during the relevant calculation period.
(Note 2) Where the sum calculated for an acquired asset is less than 5 million yen, the acquisition fee is set at 5 million yen.

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

Propose
Proposingdepartment

Complianceofficer

ReturnInvestment
Committee(includes outsidecommittee
members)

Review anddecision

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

Investment
Corporation
Board Meeting
RejectOoedo Onsen Reit Investment Corporation 60

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 61