Ooedo Onsen Reit Investment Corporation
Results of 10th Fiscal Period ended May 31, 2021

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

Table of Contents
Ⅰ. Investment Highlights

Ⅴ. Appendix

Impact of Novel Coronavirus Infectious Disease (COVID-19)

3

ESG Initiatives

32

Financial Status: Implementation of Refinancing

5

Rent Structure

33

Financial Results for the 10th Fiscal Period ended May 2021

6

Appraisal Value

34

Priorities for the Time Being: Defense from COVID-19

7

Operating Results for the Entire Portfolio

35

Forecast for the 11th Fiscal Period ending November 2021

9Introduction of Properties

36

Forecast for the 12th Fiscal Period ending May 2022

10

Financial Indices46

Changes in Key Indices11

Balance Sheet

47

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

12

Statement of Income

48

Finance-Related Data

49

Debt Status

50

Ⅱ. Investment Results
Portfolio Data

15

Ooedo-Onsen Monogatari Group51

Operating Results of Individual Properties

17“Ooedo Business Model” with Stable Operations and Sustainable Growth53

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

55

Unitholders Breakdown

56

Ⅲ. Key Policies in Forthcoming Periods
Key Policies in Forthcoming Periods: To the Next Growth Stage, Overcoming Crisis

19

Unitholder Benefit Program

57

External Growth Strategy

20

Track Record of Investment Unit Price

58

Internal Growth Strategy

23

Governance Structure

59

Financial Strategy

24

Overview of Investment Corporation

60

Investing Targets and Building of the Portfolio

25

Overview of Asset Manager

61

Future Growth Targets

26

Ⅳ. Market Environment
Market Environment* The photo on the front cover is a bath at Ooedo-Onsen Monogatari Kimitsu-no-mori.

28

Ooedo Onsen Reit Investment Corporation 1

Ⅰ. Investment Highlights

Ooedo Onsen Reit Investment Corporation 2

Impact of Novel Coronavirus Infectious Disease (COVID-19) (1)The average room occupancy rate recovered to the level before the COVID-19 pandemic
during the Go To Travel Campaign in 2020, but the rate has been low during the second state of emergency
and the third state of emergency in 2021
Operating of accommodation facilities (Note)
First state of
emergency

100%

Third
state ofemergency

Second state of
emergency

Go To Travel Campaign

86.9%
84.9%

83.4%
Facilities
were closed

80%

Certain facilities
were closed

Facilities
were closed

73.9%

62.4%
54.6%

54.4%
60%

49.4%
42.3%
34.7%

40%
29.5%
In November 2020,
the occupancy rate recovered
to close to 90% of the level
before the COVID-19 pandemic.

17.9%
20%
6.0%

29.6%

16.1%

1.1%

1.5%

0%
Jan.
2020

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2021

Feb.

Mar.

Apr.

(Note 1) Unless otherwise specified, figures are rounded down to the nearest specified unit and percentage rates are rounded to the first decimal place in this material. The same applies hereinafter.
(Note 2) The state of emergency is the state of emergency in Tokyo.

May

Ooedo Onsen Reit Investment Corporation 3

Impact of Novel Coronavirus Infectious Disease (COVID-19) (2)While the room occupancy rate fell sharply, ADR rose about 10% year on year
Results for the entire portfolio in the 10th period
Room occupancy rate

ADR

RevPAR

Sales

28.1%

29,889 yen

8,398 yen

2,473mn yen

Closures of lodging facilities
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

2020

Jan.

Feb.

Mar.

Apr.

May

Jun.

2021

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

May

1/19～3/18

4/26～6/30

Jun.

(Note)

2/8～3/7

4/23～5/21
4/28～6/30

1/19～3/18

4/25～6/19

1/26～3/7

4/14～6/30

1/19～3/18

4/26～6/30

1/19～3/18

4/6～6/30

Apr.

Go To Travel Campaign

1/19～3/18

4/29～6/30

1/19～3/18

4/29～6/30

1/19～3/18

4/26～6/19

1/26～3/7

4/27～6/30

1/19～3/18

4/25～6/30

1/19～3/18(Note)

4/26～6/19

2/8～3/7(Note)

4/29～6/30

1/19～3/18(Note) Facilities operated only on weekends (for customers who checked in on Friday, Saturday, and Sunday) from May 31 to July 1, 2021.

(Note)

4/1～5/31(Note)The periods enclosed by the blue line
include state of emergency periods.

Ooedo Onsen Reit Investment Corporation 4

Financial Status: Implementation of Refinancing
Amid the COVID-19 pandemic, we took out short-term loans for refinancing.
LTV decreased further (38.4% on a book value basis and 33.4% on an appraisal value basis)due to scheduled repayments and the appropriation of some cash reserves for refinancing
Breakdown of lenders

LTV
LTV (book value basis)
LTV (appraisal value basis)(%)<Breakdown of others, which stand at 23.0%>

Number of syndicate lenders: 13

The Towa Bank 3.4%

40.0
38.4

38.3

37.9

The Iyo Bank 3.2%

38.0

Others23.0%
The Nomura
Trust andBanking
4.7%

36.0
34.0
32.0

33.4

10th
May 2021(Actual)

33.0

11th
Nov. 2021(Forecast)

The First Bank of Toyama 3.1%
Fukoku Mutual Life Insurance 3.1%

32.4
San ju San Bank
12.7%
Sumitomo Mitsui
Trust Bank
12.7%

12th
May 2022(Forecast)

Ratio of long-term borrowings
(%)
100.0

The Tochigi Bank 3.1%
Sumitomo Mitsui
Banking
33.6%

Long-term borrowings
Short-term borrowings

89.7
8,000

90.0

The Juhachi-Shinwa Bank 2.5%

ORIX Bank
13.3%

The Bank of Kochi 1.9%

Overview of maturity（million yen）
10,000100.0

The Bank of Fukuoka 2.6%

3,731 million yen

Average remaining duration
9th period: 1.3 years→ 10th period: 0.9 years

6,000
80.0
4,000

63.6

70.0
60.0

8th
May 2020(Actual)

9th
Nov. 2020(Actual)

10th
May 2021(Actual)

2,000
0

10th
May-21

11th
Nov-21

12th
May-2213th
Nov-22

14th
May-23

Ooedo Onsen Reit Investment Corporation 5

Forecast for the 10th Fiscal Period ended May 2021
Revenue and profits increased from the forecasts due toinsurance income and a decrease in taxes and public dues.
Revenue and profits decreased from the previous period due tothe absence of a gain on sale. DPU increased 48 yen from theforecast and decreased 26 yen from the previous period (thousand yen)
Item

Operating revenue

9th period

10th period（Actual）（Actual）

Component
ratio

Primary rent

1,358,755

Component
ratio

1,230,390

10th period(Forecast as ofJan. 20, 2021)

Difference

Difference

1,230,417-

Ordinary income-

Variable rent

0.0%

-

0.0%

-

-

-

-

112,310+7,457

112,408-98

Others23,513

5,591-17,921

1,711+3,880

Lease operations
revenue gain/loss

784,094

771,246-12,847

767,048+4,198Operating income

594,331593,501-829

583,447+10,053

Ordinary income

467,639460,266-7,373449,090+11,175

Net income

466,697459,331-7,366

448,090+11,240

3,059

4,236

1,176

4,236

-

Total distribution

469,752

463,633-6,119452,336+11,296

Total units outstanding

235,347

235,347-

235,347

-

1,996

1,970

-26

1,922

+48

13

18

+5

18

-

3,803

3,860

+57

3,814

+46

FFO per unit (yen)NOI
Depreciation
CAPEX

1,228,018

1,218,997-9,021

1,215,245+3,751

444,170449,227+5,056449,674-446

175,941

・Decrease in selling, general and administration(unitholder-related fees))
・Decrease in selling, general and administration(IR-related expenses, etc.)+27

1,230,417

per unit)

Lease operations revenue gain/loss

1,230,417+27

DPU (yen)+2,372・Increase in other expenses (Repairs covered by insurance)

Operating income

1,230,417（Excess cash distribution

・Decrease in tax and public charge+3,782100.0%

Excess cash distribution+1,775

1,344,537

1,230,390

104,852

・Increase in other operating income (fixed assets tax andcity planning tax settlement for Reoma)
・Increase in other operating revenue (Insurance revenue)-10,436

100.0%

99,281-76,659

94,646+4,634(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)

1,348,319

Fixed rent

Secondary rent

Main factors for increase/decrease from forecast

・Increase in finance-related expenses+2,096-2,290+4,198+4,094+1,201+10,053+473+11,175

Main factors for increase/decrease
from previous fiscal period(thousand yen)・Increase in secondary rent

+7,457

・Absence of gain on sale (part of land of Reoma Resort)-15,785

・Decrease in other operating revenue (Insurance revenue)-4,241

・Decrease in tax and public charge+2,722

・Decrease in other expenses (Asbestos monitoring fee)

+1,387

・Decrease in other expenses (Repairs covered by insurance)+1,197・Increase in depreciation-5,056

Lease operations revenue gain/loss-12,847

・Decrease in asset management fees

+3,150・Decrease in selling, general and admininstration(non-deductible consumption taxes)+9,158Operating income
・Increase in finance-related expenses

Ordinary income

Main financial indicators-829-5,969-7,373(million yen)

Total assets

37,122

Interest-bearing debt

14,271

Total liabilities

16,030Total net assets

21,092

LTV (book value basis)
NAV per unit

38.4%
113,431 yen

Ooedo Onsen Reit Investment Corporation 6

Priorities for the Time Being: Defense from COVID-19 (1)Determining risks on the assumption of the worst-case scenario and pursuing investment opportunities
Subject

Current Situation

Risk

Countermeasure/opportunity

We still do not know when the COVID-19
pandemic will subside. In this environment, theelderly avoid going out, and the level of utilizationof facilities on weekdays is low.

A resurgence of infections due to the Tokyo
Olympics and COVID-19 variants,
and continued avoidance of going out

A recovery in utilization due to vaccinations forthe elderly and support for accommodation
facilities from local governments, etc.

Measures against We have taken measures against the infection
infections
with the help of external experts.

Clusters due to a rise in utilization and visitors

Making thorough measures to enhance safety
known and development of a sense of security
due to increasing vaccinations

Operation of facilities

Situation

Sponsor (Ooedo Onsen Monogatari Group)
Corporate
strengthAs people continue to avoid going out,
sponsor is reviewing the cost structure to
improve the profit structure in anticipation ofa recovery in demand.

Securing rent

Sponsor is taking financial measures to secure
funds (including securing a credit line) on theassumption of payments of fixed rent.

The prolongation of a low level of utilization due Achieving a recovery in utilization and revenue
to a resurgence of infections and the continued as early as possible by focusing on demand forstay-at-home requests of the national and local domestic travel and offering affordable, nearby,
governments
and short stays
A decline in the ability to pay fixed rent and areduction in rent in the event that low utilization
at the sponsor is prolonged and depending on
the financial situation

The risk related to securing fixed rent will be
avoided if utilization recovers and financial
measures work.

Finance (including refinancing)

Financing cost

Refinancing periods are shortened and cost isincreasing, reflecting the status of tenants andtrends in the COVID-19 pandemic.

Bad credit condition due to the prolongation ofeffects of the COVID-19 pandemic and theprolongation of an added risk premium

Comfortable financing covenants
Diverse fund-raising methods, including capital
policies

Securing
refinancing

November 2020: A debt reduction throughrefinancing using cash on hand
May 2021: Borrowed the same amount from theexisting lender through refinancing.

August and November, 2021: Borrowing thesame amount from existing lenders could be
affected.

Cash management that prioritizes stablefinance, including longer borrowing periods on
the assumption of an improvement in thesituation of tenants, CAPEX control, andconsidering the sale of certain assets

Ooedo Onsen Reit Investment Corporation 7

Priorities for the Time Being: Defense from COVID-19 (2)Continuing to monitor tenants' operating and financial conditions and sharing information with lenders
to complete refinancing
List of borrowings due within a year (as of May 31, 2021)
Repayment dateCategory

August 31, 2021

Short-termAugust 31, 2021

Short-termAugust 31, 2021

Short-term

November 30, 2021

May 31, 2022

Long-termLong-term

Balance(mn yen)

Lender

1,462

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

3,491

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

240

Sumitomo Mitsui Banking Corporation

2,228

San ju San 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.

3,201

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

Initial drawdown date, etc.

December 2017 at time of POLong term (three years)
September 2016 at time of IPO
Long term (four years)
September 2016 at time of IPO
Short term

December 2017 at time of POLong term (four years)

December 2017 at time of POLong term (three years)

Ooedo Onsen Reit Investment Corporation 8

Forecast for the 11th Fiscal Period ending November 2021
Distributions per unit are expected to fall 65 yen from the previous forecast due to higher appraisal fees
(fees for receiving reviewed ER) and finance-related expenses, offsetting a decrease in taxes and public dues.
Revenue and profits are expected to decrease from the previous period due to increases in appraisal feesand selling, general and administration expenses
Main factors for increase/decrease from forecast(thousand yen)
Item

Operating revenue

9th period

10th period（Forecast）（Forecast）

Component
ratio

Primary rent

1,348,319

Component
ratio

1,230,417

11th period(Forecast as ofJan. 20, 2021)

Difference

1,343,055-5,264

Difference

1,343,038+16

1,230,417-

1,230,417-

100.0%

1,230,417

100.0%

1,230,417-

1,230,417-

Variable rent

0.0%

-

0.0%

-

-

-

-

112,310112,339+29

112,345-5

Others5,591

297-5,294275+22

Lease operations
revenue gain/loss

771,246

768,312-2,933763,914+4,398Operating income

593,501

577,715-15,786

580,386-2,671

Ordinary income

460,266

422,865-37,400

437,940-15,074

Net income

459,331421,865-37,465436,940-15,074

4,236

4,236

-

4,236

-

Total distribution

463,633

425,978-37,655441,275-15,297

Total units outstanding

235,347

235,347-

235,347-

Excess cash distribution

DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI+4,750

Lease operations revenue gain/loss+4,398・Increase in appraisal fees (ER)Fixed rent

Secondary rent

(thousand yen)・Decrease in tax and public charge

1,970

1,810

-160

1,875

-65

18

18

-

18

-

3,860

3,718

-142

3,782

-64

1,218,997

1,220,166+1,1691,215,658+4,508Depreciation

449,227

453,330+4,102453,220

+110

CAPEX

99,281150,000+50,718

120,649+29,350

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

Ordinary income-6,440-2,671-12,402-15,074

Main factors for increase/decrease
from previous fiscal period(thousand yen)・Decrease in other operating revenue (fixed assets tax andcity planning tax settlement for Reoma)
・Decrease in other operating revenue (Insurance revenue)-3,211

・Decrease in tax and public charge+2,785・Decrease in other expenses (Repairs covered by insurance)-3,211

・Increase in depreciation-4,102

Lease operations revenue gain/loss
・Increase in appraisal fees (ER)・Increase in selling, general and administration(unitholder-related fees))
・Increase in selling, general and administration(IR-related expenses, etc.)

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

Ordinary income

Main financial indicators-2,096-2,933-6,545-3,924-1,701-15,786-20,965-37,400(million yen)

Total assets

36,803

Interest-bearing debt

14,086

Total liabilities

15,753

Total net assets

21,050LTV (book value basis)38.3%

Ooedo Onsen Reit Investment Corporation 9

Forecast for the 12th Fiscal Period ending May 2022
Ordinary income is expected to fall slightly from the 11th fiscal period, reflecting a decrease in fixed
assets tax and city planning tax in secondary rent and the posting of expenses for the General
Unitholders' Meeting, although a slight decrease in financial-related expenses is expected.
Distributions per unit are expected to decline 11 yen from the 11th fiscal period(thousand yen)
Item

Operating revenue

11th period

12th period（Forecast）（Forecast）

Component
ratio

Primary rent
Fixed rent
Variable rent

1,343,055

Component
ratio

1,230,417
100.0%

1,230,417

1,337,221

Main factors for increase/decrease
from previous fiscal period-5,8331,230,166-251

1,230,166

-251

-

-

112,339

106,780-5,559

297

275

-22

Lease operations
revenue gain/loss

768,312758,084-10,228

Operating income

577,715

567,575-10,140

Ordinary income

422,865

420,212-2,653

Net income

421,865

419,212-2,653

Secondary rent
OthersExcess cash distribution
Total distribution

0.0%

-

100.0%

Difference

0.0%

4,236

4,236

-

425,978

423,389-2,588235,347

235,347

-

1,810

1,799

-11

18

18

-

3,718

3,719

+1

1,220,166

1,212,822-7,343

Depreciation

453,330

456,214+2,884

CAPEX

150,000

180,000+30,000

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

FFO per unit (yen)NOI(thousand yen)・Decrease in secondary rent

-5,559・Increase in other operating revenue (Asbestos monitoring fee)

-1,514・Increase in depreciation-2,884

Lease operations revenue gain/loss-10,228

・Decrease in asset management fees

+2,005・Increase in expenses for General Unitholders’ Meeting-6,000・Decrease in appraisal fees (ER)+2,494

Operating income
・Decrease in finance-related expenses

Ordinary income

Main financial indicators-10,140+7,486-2,653(million yen)

Total assets

36,612

Interest-bearing debt

13,880Total liabilities

15,569Total net assets

21,043

LTV (book value basis)

37.9%

Ooedo Onsen Reit Investment Corporation 10

Changes in Key IndicesDistributions per unit for the 10th fiscal period came to 1,970 yen.
Forecasts for the 11th and 12th fiscal periods are based on the assumption that the variable rent amountwill be zero under the impact of COVID-19
9th period

10th period

11th period

12th period(November 2020)(May 2021)(November 2021)(May 2022)

ActualActualForecast

Forecast

DPU per unit

1,996 yen

1,970 yen

1,810 yen

1,799 yen

FFO per unit

3,803 yen

3,860 yen

3,718 yen

3,719 yen

LTV

38.6％

38.4％

38.3％

37.9％

(appraisal value basis)

33.8％

33.4％

33.0％

32.4％

NAV per unit

112,115 yen

113,431 yen

114,545 yen

115,690 yen(book value basis)

LTV(Note) Unrealized gain (Appraisal value – book value) were 5.6 billion yen at the end of the 10th fiscal period (up 0.3 billion yen from the end of the previous fiscal period).
LTV (on an appraisal value basis) for the 11th and 12th fiscal periods is based on the assumption that appraisal value will remain unchanged.

Ooedo Onsen Reit Investment Corporation 11

Major Factors for Increase/Decrease in DPU: Operation Focused on Stable Generation of Cash
Under the impact of COVID-19, FFO per unit is expected to decrease by around 10%
and the payout ratio will be around 49%
(yen)
5,000

10th period(May 2021)

9th period(Nov. 2020)

3,803
‐54

4,000

+21

Lease
Depreci
operation ation
revenues
gain/loss

3,000

+13
Asset
manage
ment
fees

+38
Nondeducti
ble
consum
ption
taxes

‐25

3,860
‐12
Lease
operation
revenues
gain/loss

Financerelated
expenses

11th period

12th period(November 2021)(May 2022)

+17
Asset
manage
ment
fees

‐27

‐89

3,718
‐43

Fees forreceiving Financereviewed related
expensesER

Lease
operation
revenues
gain/loss+12
Depreci
ation

‐25

3,719
+31

ExpensesFinancefor General related
Unitholders’ expenses
Meeting

2,000

1,000
1,996

1,970

1,810

1,799

10th
period(Actual)

11th
period(Forecast)

12th
period(Forecast)0
9thperiod(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 12

Ⅱ. Investment Results

Ooedo Onsen Reit Investment Corporation 13

Portfolio Data (1)The appraisal values of Reoma Resort, Atami, and Awara declined slightly chiefly due to a review of CAPEX.
The unrealized gain (appraisal value - book value) increased to 5.60 billion yen(up 0.32 billion period to period) at the end of the 10th period
PropertyNo.

S-1

Property name

Ooedo-Onsen Monogatari Reoma Resort

Location

Kagawa Prefecture

Building age(years)Number ofrooms

29.9／30.2

Roomoccupancy
rate(Note 1)

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

NOI
yield
(Note 2)After
depreciation
NOI yield

PML(Note 2)

241

21.1%

9,756

8,850

315

6.5%

4.7%

1.9／1.6％

46.4%

3,656

3,830

107

5.9%

3.0%

14.2%

29.7%

2,657

2,810

72

5.5%

3.4%

12.0%

(Note 3)S-2

Ooedo-Onsen Monogatari Ise-shima

S-3

Ito Hotel New Okabe

Mie Prefecture

41.2

83

Shizuoaka Prefecture

30.6

73

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

Shizuoaka Prefecture

47.4

76

44.4%

2,997

3,190

92

6.2%

4.0%

12.6%

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

Shizuoaka Prefecture

46.7

64

29.2%

1,910

2,020

53

5.6%

2.4%

14.9%

S-6

Ooedo-Onsen Monogatari Awara

Fukui Prefecture

39.8

95

29.3%

1,901

1,980

65

6.9%

4.5%

14.9%

S-7

Ooedo-Onsen Monogatari Kamoshika-so

Tochigi Prefecture

25.3

60

21.7%

1,222

1,260

34

5.7%

3.4%

3.0%

S-8

Ooedo-Onsen Monogatari Ikaho

Gunma Prefecture

37.6

40

39.6%

1,299

1,370

35

5.5%

3.4%

1.0%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-moriChiba Prefecture

25.2

41

43.7%

819

859

23

5.8%

3.6%

4.8%

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Nagasaki Prefecture

38.9

100

33.2%

1,637

2,570

74

9.1%

6.5%

6.4%

S-11

Ooedo-Onsen Monogatari Kounkaku

Miyagi Prefecture

55.5

98

9.6%

1,040

1,220

41

7.9%

3.7%

3.9%

S-12

Kinugawa Kanko Hotel

Tochigi Prefecture

39.8

172

20.5%

3,870

6,130

172

8.9%

5.7%

2.1%

S-13

Ooedo-Onsen Monogatari Kinosaki

Hyogo Prefecture

52.6

103

41.2%

2,084

2,650

78

7.6%

5.5%

11.8%

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel Fukushima Prefecture

56.7

123

23.1%

1,230

1,470

52

8.5%

3.9%

4.6%

39.5

1,369

28.1%

36,08240,209

1,220

6.8%

4.3%

2.7%

Total/Average(Note 5)(Note 1) Room occupancy rate is for the 10th period ended May 31, 2021 of the investment corporation.
(Note 2) (Average) NOI yield and (average) after depreciation NOI yield indicate annualized figures.
(Note 3) As for Building age and PML of Ooedo-Onsen Monogatari Reoma Resort, figures on the left indicate those of Hotel Reoma no Mori while figures on the right indicate those of New Reoma World.
(Note 4) The room occupancy rate of Ito Hotel New Okabe is a comprehensive figure including the rate of Surugatei, a property not owned by the investment corporation.
(Note 5) The room occupancy rate of Ooedo-Onsen Monogatari Kounkaku is a comprehensive figure including the rate of the Annex, a property not owned by the investment corporation.

Ooedo Onsen Reit Investment Corporation 14

Portfolio Data (2)The investment ratio by facility remains unchanged.
The investment ratio by region is distributed across the country, excluding Hokkaido and Okinawa
Investment ratio by facility
Acquisition price basis

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%

7.0%

8.3%

14.2%

6.1%

6.6%
10.1%

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 15

Operating Results of Individual Properties (1)At all facilities, the occupancy rate fell significantly from the same period in the previous fiscal year
due to the impact of COVID-19, but ADR rose

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

Property name

Previous
corresponding
periodcumulative total

10th period
cumulative
Total

ADR (yen)

ChangePrevious
corresponding
periodcumulative total

10th period
cumulative
Total

RevPAR (yen)ChangePrevious
corresponding
periodcumulative total

10th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative total

10th period
cumulative
Total

ChangeS-1

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

49.9

21.1

-57.7%

30,39533,846+11.4%

15,1677,141-52.9%

874

374-57.1%

S-2

Ooedo-Onsen MonogatariIse-shima

65.4

46.4

-29.1%

28,496

31,272+9.7%

18,636

14,510-22.1%

338

251-25.7%S-3

Ito Hotel New Okabe

60.9

29.7

-51.2%

25,387

28,843+13.6%

15,4608,566-44.6%

363

189-48.0%

S-4

Ooedo-Onsen Monogatari
Atami

68.3

44.4

-35.0%

28,92830,008+3.7%

19,757

13,323-32.6%

323

208-35.6%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

57.3

29.2

-49.0%

25,891

28,848+11.4%

14,8358,423-43.2%

197

108-44.8%

S-6

Ooedo-Onsen Monogatari
Awara

51.1

29.3

-42.7%

26,11827,120+3.8%

13,346

7,946-40.5%

295

153-48.0%

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

40.4

21.7

-46.3%

25,97026,041+0.3%

10,491

5,650-46.1%

137

69-49.4%

S-8

Ooedo-Onsen Monogatari
Ikaho

69.5

39.6

-43.0%

25,49027,612+8.3%

17,715

10,934-38.3%

14890-39.4%

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

71.0

43.7

-38.5%

21,896

26,723+22.0%

15,546

11,677-24.9%

174

111-35.7%

Ooedo Onsen Reit Investment Corporation 16

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

Property name

Previous
corresponding
periodcumulative total

10th period
cumulative
Total

ADR (yen)

ChangePrevious
corresponding
periodcumulative total

10th period
cumulative
Total

RevPAR (yen)ChangePrevious
corresponding
periodcumulative total

10th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative total

10th period
cumulative
Total

ChangeS-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

60.9

33.2

-45.5%

28,172

32,139+14.1%

17,156

10,670-37.8%

353

213-39.8%

S-11

Ooedo-Onsen Monogatari
Kounkaku

54.0

9.6

-82.2%

22,162

26,866+21.2%

11,9672,579-78.4%

303

61-79.7%

S-12

Kinugawa Kanko Hotel

49.3

20.5

-58.4%

28,11728,700+2.1%

13,861

5,883-57.6%

575

213-62.9%

S-13

Ooedo-Onsen Monogatari
Kinosaki

69.8

41.2

-41.0%

29,27130,888+5.5%

20,431

12,725-37.7%

457

265-42.1%

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

45.9

23.1

-49.7%

26,391

28,944+9.7%

12,1136,686-44.8%

342

161-52.9%

Total

55.9

28.1

-49.7%

27,22029,889+9.8%

15,2158,398-44.8%

4,888

2,473

-49.4%

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

130,12010th period
cumulative
Total

114,140

Sales (million yen)

ChangePrevious
corresponding
periodcumulative total-12.3%

475

10th period
cumulative
Total

401

Change-15.6%(Note) Number of guests is the total number of people using New Reoma World during the period.

Ooedo Onsen Reit Investment Corporation 17

Ⅲ. Key Policies in Forthcoming Periods

Ooedo Onsen Reit Investment Corporation 18

Key Policies in Forthcoming Periods:To the Next Growth Stage, Overcoming Crisis
Expectations for recovery: Ooedo-Onsen Monogatari Group’s facilities can precede demand recovery
Recovery in the flow of people and the position of the Ooedo business model
Return of neighboringcustomers and domestic
regular customers

Return ofdomestic travelers

Return offoreign visitors to Japan

Features of the Ooedo model on the demand front and supply front■ On the demand front: A short stay nearby at low prices for leisure time
Affordable prices, short distances that allow access by car,hot spring spas surrounded by nature■ On the supply front: Services capable of providing both safety
and security as well as liveliness
Taking thorough measures to prevent COVID-19 infections and providing a lively space

Demonstrated
an early recovery
in the autumn of last year

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 business models 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 19

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 on land leased for a fixed-term is owned by the sponsor. The facility will be closed on September 5, 2021 before the contract expires on December 31, 2021.

Ooedo Onsen Reit Investment Corporation 20

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
Perspective on future external growth after COVID-19■ Urgently needed diversification of portfolio and risk
・We examine adding locations in urban areas and investing in diverse business categories that will result in diverse tenants.
・Target operators and facilities after the COVID-19 pandemic: Providing safe private space, safe and secure lively space■ Setting a sufficient rent payment ratio that allows for the maintenance of a relatively high fixed rent ratio<Property information (excluding sponsor properties) in the 10th period (from Dec. 1, 2020 until May 31, 2021)>
Ordinance-designated cities

Core cities

Other

Total

Lodging

6

4

36

46

Other (day trips, etc.)

0

0

1

1

Other lodgings

53

17

16

86

Entertainment, Amusement

0

0

0

0

Sports, beauty, health promotion facilities

0

0

0

0

59

21

53

133

Onsen/Spa

Total

Ooedo Onsen Reit Investment Corporation 21

External Growth Strategy (3)We consider using a variety of bridge funding options and strive to achieve preferential negotiation rights
Respond to changes in the market and seek the next growth opportunities
while taking defensive actions＜By source＞
5.3%■ Opportunities for acquiring properties at good locations
on the assumption of operator replacement

17.3%■ Securing investment partners (bridge funds) amid global monetary easing<Progress of new acquisitions>（Pre COVID-19)

5.3%（Post COVID-19）

Final phase of acquisitions(including those with completed
Submission of LOI completed
bridge financing)（Readjustment requiredin future）

54.1%

Developers
Financial Instisutions
Real Estate Brokers
Others（Post COVID-19）
Due diligence/negotiations underway

Total

Lodging

1

0

0

1

Other
(day trips, etc.)

1

0

0

1

Other lodgings

7

0

1

8

Entertainment, Amusement

1

0

0

1

Sports, beauty,
health promotion facilities

0

0

0

0

10

0

1

11

Onsen/Spa

Total(Note) The number of properties as of June 30, 2021 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 22

Internal Growth Strategy
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

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.

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]

Tapping into demand
after restrictions due to
COVID-19 are lifted

・Inbound tourism market and facilities for utilizing leisure time in urban areas

Raising the level of rent revenue in the medium to long term through value-increasing investment
 Enhancement of internal cash flows generated from the difference between depreciation and CAPEX brought by the scale
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

Ooedo Onsen Reit Investment Corporation 23

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 24

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 25

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)

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

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

200

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

100

100

Target AUM
five years later:
175 – 220 billion yen
External properties:
100 – 120 billion yen

Overcoming
the COVID-19 andachieving growth again
Sponsor properties:
75 – 100 billion yen

50

10th period(ended May 31, 2021)

DPU

1,970 yenAround 2,500 yen

Around 2,600 – 2,800 yen

Marketcapitalization

19.5 billion yen

Around 50 billion yen

Around 100 billion yen

LTV

38.4％

(book value basis)(Note 1) The figures above are targets as of July 21, 2021, and are not guaranteed.
(Note 2) The market capitalization in the 10th period is calculated based on the closing price as of May 31, 2021.

Around 42 – 44%

Ooedo Onsen Reit Investment Corporation 26

Ⅳ. Market Environment

Ooedo Onsen Reit Investment Corporation 27

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

90000
8,000

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

Male

Female

4,000

30000

31.3

50.0
30.0

0
FY2011FY2013

FY2015FY2017FY2019Source: 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)

34.3

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

0

Seniors

60.0
40.0

60000

Families

70.0

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 FY2011 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 28

Market Environment (2) : Future Leisure Market (1)Leisure Market after the COVID-19: Potential Demand for Domestic Travel
Percentage of respondents who say that the frequencyof domestic travel will increase by age group

Percentage of respondents who say frequency(of use) will increase after the pandemic subsides
Domestic travel (near destinations
reachedby trainor by car)
Domestic
travel (neardestinations…

22.7%
20.2%
16.2%
14.1%
11.9%
8.6%
6.4%
6.4%
6.2%
4.4%
3.7%

Hospital, clinic
Amusement arcade
Bowling
Sports club
Cram school, lessons (face to face)
Cram school, lessons (online)

0%

10%

20%

30.0%
20.0%
10.0%
0.0%

30%

40%

Percentage of respondents who say that the frequencyof domestic travel will increase by type of family
Domestic travel (near destinations reached by train or by car)
Domestic travel (far destinations reached train or by air)
36.4%
39.5%

Married couple withoutchildren (employed)

36.4%
43.9%

34.0%
30.6%

Single-personhousehold with children
living together(employed)

35.4%
37.2%

28.2%
33.3%

30.0%

Single-personhousehold (employed)

40.0%

29.1%
28.3%

50.0%

37.1%
40.4%

60.0%

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

30’s

40’s

50’s

60’s

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

20.0%
10.0%
Retiredor older)(orMarried couple(employed, withyoungest childindependent)

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

0.0%

30.7%
32.5%

Barber, beauty salon

40.0%

32.7%
33.3%

Karaoke box

29.8%
29.2%

Overseas travel

50.0%
28.9%
31.9%

Theme park, amusement park

Domestic travel (near destinations reached by train or by car)
Domestic travel (far destinations reached train or by air)
39.2%
41.6%

Domestic reachedtravel (fartrain
destinations…
Domestic travel (far destinations
or by air)Movie theater

60.0%

42.2%
43.4%

35.3%
33.9%

65

・By family type, the percentage is particularly high for married
couples who have children living together or whose children are
independent.
Ooedo Onsen Reit Investment Corporation 29

Market Environment (2) : Future Leisure Market (2)Domestic demand: Expansion of consumption for services or experience-oriented activities means future
potential of the leisure market both qualitatively and quantitatively
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 30

Ⅴ. Appendix

Ooedo Onsen Reit Investment Corporation 31

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

Environment

Social■Replacement of air-conditioners with energy-saving ones

■Helping acquire expertise

Replaced the air-conditioner for Space Ship 2056, an indoor roller
coaster, with a energy-saving, high-efficiency one.

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

■Taking steps to prevent COVID-19 infections
To reduce the risk of COVID-19 infections, we have introduced
remote work and online meetings.
Ooedo-Onsen Monogatari Reoma Resort (New Reoma World)■Replacement of boilers and pumps for baths
Replaced boilers and pumps with energy-saving ones

Ooedo-Onsen
Monogatari
Ikaho (boiler)

Ooedo-Onsen
Monogatari
Nagasaki Hotel
Seifu (pump)■Introduction of LED lighting (paid by tenants)
Lighting has been replaced with LED lighting at facilities one by one.

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 of thosecommittees 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 May 31, 2021).

■Asset Manager's own human resources playing a core roleat the company
Ooedo-Onsen
Monogatari
Nagasaki Hotel
Seifu (lobby)

Ooedo-Onsen
Monogatari
Nagasaki Hotel
Seifu(guest room)

The President and Representative Director of the Asset Manager isa person who has already transferred to the Asset Manager.
The department heads and those in higher positions have been
hired to set up the Investment Corporation.

Ooedo Onsen Reit Investment Corporation 32

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

Modified GOP (Note)

Contract period:years
Non-cancellation period:

Secondary rent

Primary rent

5-7 years
Rent revision: every 3 years

Variablerent
component

Fixed rent component

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



Primary rent = Fixed rent component (monthly amount stipulated by each lease agreement of each facility) + variable rent component(Variable rent = Modified GOP for each facility × the fixed rate stipulated by each lease agreement)Secondary rent = The total of taxes and public dues that is liable for the Investment Corporation+ nonlife insurance premiums + other expenses＜Calculation period of variable rent＞
2020
Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

2022

2021
Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Modified GOP
10th period ended May 2021
Modified GOP
11th period ending November 2021
Modified GOP
12th period ending May 2022
(Note) “GOP” refers to gross operating profit, which is the amount remaining after deducting expenses arising directly from managing each facility, such as labor expenses and general and administrative
expenses, from each facility’s sales. “Modified GOP” is the amount remaining after deducting real estate-related expenses for the property to be borne by the tenant (including, but not limited to,taxes and public charges, non-life insurance premiums and land and house rent, but excluding an amount equivalent to Secondary rent) from the GOP of each facility for the Modified GOP
Calculation Period. The same applies hereinafter.
Ooedo Onsen Reit Investment Corporation 33

Appraisal Value

Property
No.

Property nam e

Direct capitalization m ethod
Discounted cash flow m ethod
Unrealized
Appraisal value (m illion yen)
Acquisition
profits andDirect Cap Rate
Discount Rate
Term inal Cap Rate
Book valuePricelosses(m illion yen) 9th period 10th period(m illion
9th period 10th period
9th period 10th period
9th period 10th period(m illion
Changevaluation
valuationyen)
Nov.30,
May 31,
Nov.30,
May 31,
Nov.30,
May 31, valuation
Nov.30,
May 31,
yen)
2020
2021
2020
2021
2020
2021
2020
2021

S-1

Ooedo-Onsen Monogatari
Reoma Resort

9,756

9,578

8,860

8,850

-10

-728

6.0%

6.0%

-

5.8%

5.8%

-

6.2%

6.2%

-

S-2

Ooedo-Onsen MonogatariIse-shima

3,656

3,294

3,830

3,830

-

+535

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-3

Ito Hotel New Okabe

2,657

2,564

2,810

2,810

-

+245

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-4

Ooedo-Onsen Monogatari
Atami

2,997

2,776

3,200

3,190

-10

+413

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

1,910

1,787

2,020

2,020

-

+232

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-6

Ooedo-Onsen Monogatari
Awara

1,901

1,844

1,990

1,980

-10

+135

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

1,222

1,177

1,260

1,260

-

+82

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-8

Ooedo-Onsen Monogatari
Ikaho

1,299

1,262

1,370

1,370

-

+107

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

819

833

859

859

-

+25

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

1,637

1,609

2,570

2,570

-

+960

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-11

Ooedo-Onsen Monogatari
Kounkaku

1,040

996

1,220

1,220

-

+223

5.5%

5.5%

-

5.3%

5.3%

-

5.7%

5.7%

-

S-12

Kinugawa Kanko Hotel

3,870

3,595

6,130

6,130

-

+2,534

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-13

Ooedo-Onsen Monogatari
Kinosaki

2,084

2,105

2,650

2,650

-

+544

5.4%

5.4%

-

5.2%

5.2%

-

5.6%

5.6%

-

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

1,230

1,177

1,470

1,470

-

+292

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

36,082

34,60540,23940,209-30+5,603

－

－

－

－

－

－

Total

－

－

－

Ooedo Onsen Reit Investment Corporation 34

Operating Results for the Entire Portfolio＜Cumulative comparison of 10th period and the same period of the previous year＞

Room occupancy rate：
55.9%

28.1%

Portfolio operating results
2020年

Room occupancy rate
ADR (yen)
RevPAR (yen)Sales (million yen)

2021年

Cumulativ e
total

Previous
corresponding
period cumulative
total

10th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

6.0%

42.3%

49.4%

54.4%

73.9%

84.9%

54.6%

16.1%

1.5%

29.5%

34.7%

29.6%

40.0%

55.9%

28.1%

-27.8%

24,15027,55437,93027,47527,76832,43733,40530,542

21,81331,38625,36027,06930,29427,22029,889+2,6691,449

11,65518,737

14,946

20,52027,53918,239

4,917

327

9,258

8,799

8,012

12,117

15,215

8,398-6,817

69

572

905

721

1,057

1,358

916

252

16

455

433

400

7,159

4,888

2,473

-2,414

Ooedo Onsen Reit Investment Corporation 35

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 36

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

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Cumulativ e
total

Previous
corresponding
period cumulative
total

10th period
cumulative
Total

ChangeRoom occupancy rate

-

31.6%

47.2%

51.5%

75.9%

87.5%

53.4%

7.5%

3.5%

19.9%

23.5%

17.3%

35.1%

49.9%

21.1%

-28.8%ADR (yen)-

34,70552,43733,262

29,041

34,64435,68539,192

19,19836,90927,801

32,93835,23830,39533,846+3,451

RevPAR (yen)-10,96624,75017,12922,04230,31319,055

2,939

671

7,344

6,533

5,698

12,36815,167

7,141-8,026

Sales (million yen)

0

92

208

145

198

260

166

27

4

64

59

51

1,279

874

374

-499

Cumulativ e
total

Previous
corresponding
period cumulative
total

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

2021年

10th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

46.2%

55.1%

51.3%

64.4%

82.0%

90.5%

72.5%

41.7%

8.0%

48.4%

57.1%

47.2%

55.7%

65.4%

46.4%

-19.0%ADR (yen)

23,02629,95741,04428,90530,50236,091

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

31,68628,496

31,272+2,776

RevPAR (yen)10,63816,506

21,055

18,61425,011

32,662

26,663

13,1391,986

16,561

15,153

12,331

17,64918,636

14,510-4,126

30

48

61

52

76

95

78

38

5

48

43

36

617

338

251

-87

Cumulativ e
total

Previous
corresponding
period cumulative
total

Sales (million yen)

S-3：Ito Hotel New Okabe
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

36.0%

46.1%

58.1%

62.3%

75.1%

56.9%

14.3%

-

26.3%

38.7%

39.1%

38.0%

60.9%

29.7%

-31.2%ADR (yen)-

24,53034,374

23,627

26,53433,01333,55332,246-31,011

23,362

24,53028,76925,387

28,843+3,456

RevPAR (yen)

-

8,830

15,846

13,727

16,53024,792

19,091

4,611

-

8,155

9,041

9,591

10,932

15,4608,566-6,894

Sales (million yen)

0

32

57

49

63

91

71

17

0

30

33

35

483

363

189

-174

Ooedo Onsen Reit Investment Corporation 37

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 38

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

2021年

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Room occupancy rate

14.8%

53.8%

63.8%

66.1%

83.4%

90.5%

62.0%

31.2%

ADR (yen)

23,76526,85840,54528,45028,53533,30935,8403,517

14,44925,86718,80523,79830,144

8

37

65

48

64

78

RevPAR (yen)Sales (million yen)

Feb.

Cumulativ e
total

Previous
corresponding
period cumulative
total

10th period
cumulative
Total

Change

Mar.

Apr.

May

-

67.6%

53.2%

48.6%

53.3%

68.3%

44.4%

-23.9%

27,686-30,824

26,28526,87730,77328,92830,008+1,08022,2208,638-

20,837

13,98313,062

16,402

19,757

13,323-6,434

59

23

0

53

36

34

511

323

208

-115

Cumulativ e
total

Previous
corresponding
period cumulative
total

S-5：Ooedo-Onsen Monogatari Toi Marine Hotel
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

45.8%

69.0%

54.5%

64.3%

78.1%

56.0%

14.6%

-

24.2%

39.9%

38.2%

40.7%

57.3%

29.2%

-28.1%ADR (yen)-

25,53744,84427,502

26,68930,10432,23330,984-30,32824,892

26,14930,59625,891

28,848+2,957

RevPAR (yen)-11,69530,942

14,98817,161

23,511

18,050

4,523

-

7,339

9,931

9,988

12,452

14,835

8,423-6,412

Sales (million yen)

0

25

65

31

38

51

40

10

0

15

21

21

321

197

108

-88

Cumulativ e
total

Previous
corresponding
period cumulative
total

S-6：Ooedo-Onsen Monogatari Awara
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

35.9%

45.9%

41.4%

61.0%

83.3%

53.2%

13.2%

-

30.2%

45.9%

31.1%

37.0%

51.1%

29.3%

-21.8%ADR (yen)-

25,57734,152

24,362

25,79630,84330,671

29,536-27,31822,86225,901

27,99026,11827,120+1,002

RevPAR (yen)

-

9,182

15,675

10,085

15,73525,692

16,316

3,898

-

8,250

10,493

8,055

10,356

13,346

7,946-5,400

Sales (million yen)

0

29

49

31

52

82

54

13

0

26

33

26

400

295

153

-142

Ooedo Onsen Reit Investment Corporation 39

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 40

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

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Cumulativ e
total

Previous
corresponding
period cumulative
total

10th period
cumulative
Total

ChangeRoom occupancy rate

-

32.1%

42.4%

45.1%

55.1%

71.4%

32.0%

7.8%

-

24.8%

32.8%

30.8%

31.4%

40.4%

21.7%

-18.7%ADR (yen)-

26,61331,33524,716

25,79926,63825,99827,342-

25,971

22,52029,443

26,61725,97026,041+71

RevPAR (yen)

-

8,542

13,286

11,146

14,21519,019

8,319

2,132

-

6,440

7,386

9,068

8,357

10,491

5,650-4,841

Sales (million yen)

0

17

27

22

30

39

17

4

0

13

15

18

207

137

69

-68

Cumulativ e
total

Previous
corresponding
period cumulative
total

S-8：Ooedo-Onsen Monogatari Ikaho
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

89.0%

68.3%

69.2%

79.0%

89.3%

49.0%

21.3%

-

28.1%

73.8%

62.6%

52.8%

69.5%

39.6%

-29.9%ADR (yen)-

24,836

29,681

27,64428,58532,003

34,83622,246-33,407

24,49924,74728,17925,49027,612+2,122

RevPAR (yen)-22,104

20,272

19,12922,582

28,57817,069

4,738

-

9,387

18,08015,491

14,87817,715

10,934-6,781

Sales (million yen)

0

30

26

25

33

40

23

6

0

12

25

21

246

148

90

-58

Cumulativ e
total

Previous
corresponding
period cumulative
total

S-9：Ooedo-Onsen Monogatari Kimitsu-no-mori
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

58.7%

80.6%

68.5%

80.1%

87.1%

74.9%

24.9%

-

39.2%

64.6%

55.1%

53.2%

71.0%

43.7%

-27.3%ADR (yen)-

23,07936,307

24,94325,22927,31829,30130,376-27,116

22,83525,69827,313

21,896

26,723+4,827

RevPAR (yen)-13,54729,26317,08520,20823,793

21,946

7,563-

10,62914,751

14,15914,53015,546

11,677-3,869

Sales (million yen)

0

18

39

26

32

37

33

12

0

16

23

24

266

174

111

-62

Ooedo Onsen Reit Investment Corporation 41

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 42

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

2021年

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Room occupancy rate

20.7%

72.8%

42.8%

61.9%

81.1%

93.0%

73.3%

17.5%

ADR (yen)

27,18627,20333,09728,152

29,676

34,59635,344

5,627

19,803

14,165

17,42624,06732,174

18

67

47

57

83

107

RevPAR (yen)Sales (million yen)

Feb.

Cumulativ e
total

Previous
corresponding
period cumulative
total

10th period
cumulative
Total

Change

Mar.

Apr.

May

-

37.8%

44.3%

23.2%

47.7%

60.9%

33.2%

-27.7%

31,463-32,54729,08827,54431,00828,172

32,139+3,96725,907

5,506-

12,302

12,885

6,390

14,79017,156

10,670-6,486

87

18

0

40

42

22

595

353

213

-140

S-11：Ooedo-Onsen Monogatari Kounkaku
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Cumulativ e
total

Previous
corresponding
period cumulative
total

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

29.6%

41.2%

44.1%

68.5%

70.2%

38.2%

9.0%

-

8.9%

-

-

26.0%

54.0%

9.6%

-44.4%ADR (yen)-

21,22024,994

21,42324,90328,572

28,66024,746-

21,331--

25,24922,162

26,866+4,704

RevPAR (yen)

-

6,281

10,297

9,447

17,05820,057

10,948

2,227

-

1,898

-

-

6,564

11,9672,579-9,388

Sales (million yen)

0

25

40

36

71

79

44

9

0

7

0

0

313

303

61

-241

Cumulativ e
total

Previous
corresponding
period cumulative
total

S-12：Kinugawa Kanko Hotel
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

27.3%

31.0%

48.8%

78.7%

89.6%

43.5%

9.3%

-

18.2%

21.7%

28.6%

33.2%

49.3%

20.5%

-28.8%ADR (yen)-

26,73531,662

26,51727,88230,71931,57330,189-27,482

24,682

27,52428,801

28,11728,700+583

RevPAR (yen)

-

7,298

9,815

12,94021,94327,524

13,734

2,807

-

5,001

5,355

7,871

9,561

13,861

5,883-7,978

Sales (million yen)

0

44

58

75

138

167

84

17

0

30

32

48

697

575

213

-362

Ooedo Onsen Reit Investment Corporation 43

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 44

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

2021年

Cumulativ e
total

Previous
corresponding
period cumulative
total

10th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

14.3%

52.2%

68.5%

62.4%

77.3%

87.8%

69.6%

31.2%

6.2%

65.5%

43.5%

27.9%

50.9%

69.8%

41.2%

-28.6%ADR (yen)

24,461

29,282

39,121

29,81728,15336,38733,96329,181

22,301

33,59926,331

27,356

31,86029,27130,888+1,617

3,497

15,285

26,797

18,605

21,762

31,947

23,638

9,104

1,382

22,007

11,453

7,632

16,216

20,431

12,725-7,706

12

54

93

65

83

115

86

33

4

76

39

25

689

457

265

-192

Cumulativ e
total

Previous
corresponding
period cumulative
total

RevPAR (yen)Sales (million yen)

S-14：Ooedo-Onsen Higashiyama Grand Hotel
2020年
Jun.

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

10th period
cumulative
Total

ChangeRoom occupancy rate

-

39.8%

48.2%

52.6%

79.2%

88.7%

48.2%

12.3%

-

14.5%

29.2%

32.4%

37.3%

45.9%

23.1%

-22.8%ADR (yen)-

28,16332,07525,317

26,99331,19132,81633,258-28,787

23,64726,26928,873

26,391

28,944+2,553

RevPAR (yen)-11,20815,46013,316

21,37827,666

15,817

4,090

-

4,174

6,904

8,511

10,76912,113

6,686-5,427

Sales (million yen)

0

47

64

53

90

111

65

17

0

16

27

33

528

342

161

-180

Cumulativ e
total

Previous
corresponding
period cumulative
total

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

2021年

Jul.

Aug.

Sep.

Oct

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

15,771 300,014

Number of guests-

13,13739,35733,96039,48059,94042,079

8,609

2,073

27,656

17,952

Sales (million yen)

0

55

165

131

159

215

144

30

7

99

64

54

1,128

10th period
cumulative
Total

Change130,120

114,140-15,980475

401-74,091

Ooedo Onsen Reit Investment Corporation 45

Financial Indices
Indices
Ordinary income

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

10th period(May 31, 2021)
460 mn yen

Net income

466 mn yen

459 mn yen

Depreciation

444 mn yen

449 mn yen

CAPEX

175 mn yen

99 mn yen

Total assets

37,428 mn yen

37,122 mn yen

Total net assets
BPS (Total net assets/unit)

21,102 mn yen

21,092 mn yen

89,666 yen

89,622 yen

Unit price (End of each period)

68,500 yen

83,100 yen

235,347 units

235,347 units

469 mn yen

463 mn yen

1,996 yen

1,970 yen

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

5.8%
895 mn yen
3,803 yenCalculation formula

4.8% DPU (annualized)/Unit price as of end of period
908 mn yen Net income + Depreciation－profit or loss on sale of real estate
3,860 yen

9.0x

10.7x Unit price as of end of period/FFO per unit (annualized)

PER

17.3x

21.2x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PBR

0.8x

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

ROA
Annualized
ROE
Annualized
NAV

1.2%

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

2.5%

2.5%

2.2%

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

4.4%

4.4%

26,385 mn yen

NAV per unit
NAV multiple

112,115 yen

Interest-bearing debt

14,457 mn yen

0.6x

26,695 mn yen Total net assets + Total appraisal value - Total book value - Total liabilities
113,431 yen
0.7x Unit price as of end of period/NAV per unit
14,271 mn yen

LTV (book value basis)

38.6%

38.4% Interest-bearing debt/Total assets

LTV (appraisal value basis)

33.8%

33.4% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)

Operating days

183 days

182 days

Ooedo Onsen Reit Investment Corporation 46

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)
10th period

9th period(period ended Nov. 30, 2020)(period ended May 31, 2021)

Assets(thousand yen)
10th period

9th period(period ended Nov. 30, 2020)(period ended May 31, 2021)

Liabilities

Current assets

Current liabilities

Cash and deposits

2,245,992

2,356,485

Operating accounts payable

118,701

8,045

Prepaid expenses

140,140

101,517

Short-term loans payable

1,487,480

5,193,060

Current portion of long-term loans payable

Other
Total current assets

6,546

6,866

2,392,678

2,464,869

Non-current assets
Property, plant and equipment
Buildings

6,194,120

5,509,515

Accounts payable - other82,19083,234

Accrued expenses

8,190

7,482

Income taxes payable
26,667,147

940

932

26,761,904

Accured consumption taxes

34,98034,830246,412

247,064

Accumulated depreciation-3,239,601-3,686,238

Advances received

Buildings, net

23,427,545

23,075,666

Other

10,97910,979

Accumulated depreciation-1,616-1,986Structures, net

9,362

8,992

600

600

Accumulated depreciation

-97

-115

Asset retirement obligations

138,691

139,096

Machinery and equipment, net

502

484

Total non-current liabilities

8,145,384

4,939,164

16,325,661

16,030,303

20,653,023

20,653,023-17,116-20,175-17,116-20,175

20,638,731

20,638,731

466,826

459,464

Structures

Machinery and equipment

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

5,772

9,972

-1,402-2,042

4,370

7,930

11,208,770

11,208,770

34,650,550

34,301,844

SoftwareTotal intangible assets

305,228

303,751

1,347

544

306,575

304,29616

15

68,48341,499Lease and guarantee deposits

10,08910,089Total investments and other assets

78,58951,60535,035,715

34,657,746

37,428,394

37,122,615

Total assets

Long-term loans payable

6,776,000

3,569,375

Tenant leasehold and security deposits

1,230,692

1,230,692

Non-current liabilities

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

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

Long-term prepaid expenses

Total non-current assets

11,091,139

adjustment

Investments and other assets
Deferred tax assets

6,973

8,180,276

Total current liabilities

Allowance for temporary difference

Intangible assets
Leasehold right

7,260

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

466,826

459,464

21,102,733

21,092,312

21,102,733

21,092,312

37,428,394

37,122,615

Ooedo Onsen Reit Investment Corporation 47

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

9th period

10th period(from June 1, 2020 to November 30, 2020)(from Dec. 1, 2020 to May 31, 2021)

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

1,348,319
1,348,319

574,661
122,870
1,720
17,2583,600
44,313
764,424594,331577,073
119,720
1,676
17,0323,600
35,716754,817594,331

10
1,212
1,222

11
637
648

54,68373,230127,914467,639

50,927
82,956
133,884
460,266--

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

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

467,639942-0
942
466,697128

460,266934
0
935
459,331
133

Unappropriated retained earnings(undisposed loss)

466,826

459,464

Total extraordinary losses

Ooedo Onsen Reit Investment Corporation 48

Finance-Related Data
Trends in LTV
（％）
50.0
45.0
40.0

LTV(book value basis)

44.0
42.2
42.9

35.0
30.0

LTV(appraisal value basis)

1st
Nov. 2016

39.9

39.8

38.5

38.2

2nd
May 2017

3rd
Nov. 2017

5.1

5.0

39.1

4th
May 2018

40.9

37.6

5th
Nov. 2018

40.6

36.8

40.3

36.3

40.0

38.6

38.4

35.9

6th
May 2019

7th
Nov. 20198th
May 2020

4.5

4.3

4.5

33.8

33.4

9th
Nov. 2020

10th
May 2021

Trends in DSCR
8.0
6.0

5.0

4.6
3.8

4.0

4.6
3.6

2.0
0.0

1st
Nov. 2016

2nd
May 2017

3rd
Nov. 2017

4th
May 2018

5th
Nov. 2018

6th
May 2019

7th
Nov. 20198th
May 2020

9th
Nov. 2020

10th
May 2021(Note) DSCR is calculated based on (operating income + depreciation + amortization of leasehold + gain (loss) on sale of real estate) / (scheduled repayments + interest expenses).
Payment before maturity, the amount paid off on due date, and reductions due to refinancing are excluded.

Ooedo Onsen Reit Investment Corporation 49

Debt Status
List of lenders(as of May 31, 2021)
Lender

Short
term

Long
term

Balance(mn yen)Interest rate(%)

Drawdown date

Repayment date

Security

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

1,462

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

November 30, 2020

August 31, 2021

Unsecured andunguaranteed

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

3,491

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

May 31, 2021

August 31, 2021

Unsecured andunguaranteed

Sumitomo Mitsui Banking Corporation

240

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

May 31, 2021

August 31, 2021

Sumitomo Mitsui Banking Corporation

447

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

September 1, 2016

May 31, 2023

2,228

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

December 4, 2017 November 30, 2021

3,201

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

May 31, 2019

May 31, 2022

Unsecured andunguaranteed

3,201

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

May 31, 2019

May 31, 2023

Unsecured andunguaranteed

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

Unsecured andunguaranteed
Unsecured andunguaranteed

Unsecured andunguaranteed

14,271

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 February 1, 2021)

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)

country

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

 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 Kameya

Saikaibashi
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 ofFeb. 2016

30

32

34

End ofFeb. 2018

End ofFeb. 201937

38

End ofFeb. 2020

End ofFeb. 2021

0
End ofSep. 2007

End ofSep. 2008

End ofSep. 2009

End ofSep. 2010

End ofSep. 2011

End ofFeb. 2017

Ooedo Onsen Reit Investment Corporation 51

Ooedo-Onsen Monogatari Group (2)The total number of guests staying at onsen/spa facilities operated by the Ooedo-Onsen Monogatari Group is steadily increasing year by year.
In addition, the group is expanding its business scale actively through a range of initiatives such as the acquisition of 13 facilities (Note) since 2016
when the investment corporation was established.

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

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

4,000
3,421

REIT acquired assets

3,623

Facilities acquired after 2016

3,126
3,000

2,709

Ooedo-Onsen Monogatari

2,766

MasuyaOoedo-Onsen Monogatari

Kakeyu Fujikan Sakurakan
2,000

1,515

Hotel Kisoji

1,000
FY2016FY2017FY2018FY2019FY2020

FY2021

Ooedo-Onsen Monogatari

Sendai Korona-no-yu

Ooedo-Onsen Monogatari

Higashiyama Grand Hotel
Ooedo-Onsen Monogatari

Yamashiro Onsen

Nikko Kirifuri

Yamashitaya

Saikaibasi Corazon Hotel

Ooedo-Onsen Monogatari

Gero Shin-kan
Ooedo-Onsen Monogatari

Nagasaki Hotel Seifu
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)(Note)

Kimitsu-no-moriOoedo-Onsen Monogatari

Hotel Suiyotei

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

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

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(Note) The building on land leased for a fixed-term is owned by the sponsor. The facility will be closed on September 5, 2021 before the contract expires on December 31, 2021.

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

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 53

“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 December 1, 2020 to May 31, 2021)＜Meal (breakfast and dinner)＞＜Overall satisfaction ＞
3.7%

1.6%
5.8%

0.9% 0.3%

0.5%

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

46.0%

41.8%

49.0%

50.3%

60%
50%
40%

＜Type of services inside the facility＞＜Onsen＞
1.6% 0.2%
6.3%

1.3%

0.2%

35.4%
29.6%
27.0%
24.5%
20.6%
17.8%

30%
20%
10%

12.0%
0%
37.7%
44.8%

47.1%

Satisfied

Fair

Unsatisfied

2019/92020/1

Ooedo Onsen REIT
Resort hotels

48.9%

Very satisfied

2019/5

Very unsatisfied

2020/5City hotels
Ryokans

2020/92021/12021/5Business 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.

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

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
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 55

Unitholders Breakdown
Top 10 unitholders

Ratio by number of unitholders＜End of 9th fiscal period＞＜End of 10th fiscal period＞

19,352 unitholders

19,296 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)

25,743

10.9%

2

Custody Bank of Japan, Ltd. (Trust Account)

16,0086.8%

3

Ooedo-Onsen Mongatari Co., Ltd.

9,246

3.9%

4

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

8,317

3.5%

5

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

4,517

1.9%

6

Nomura Securities Co., Ltd.

3,668

1.6%

7

Individual

3,491

1.5%

8

YONEZAWA SHINKIN BANK

3,000

1.3%

9

Banshu Shinkin BANK

2,880

1.2%

10

Morgan Stanley MUFG Securities Co., Ltd.

2,643

1.1%

79,513

33.8%

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 May 31, 2021 (record date), end of 10th 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 unitholder benefit program will be abolished from the 11th period (ending November 30, 2021).
For details, please refer to the notice on the abolition of the unitholder benefit program published on July 20, 2021.

Ooedo Onsen Reit Investment Corporation 57

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

35,000100,000

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

50,00040,0002016/8 2016/11 2017/2

02017/52017/8 2017/11 2018/2

2018/5

2018/8 2018/11 2019/2
出来高Volume

2019/5

2019/8 2019/11 2020/2

2020/52020/8 2020/11 2021/2

2021/5

2019/8 2019/11 2020/2

2020/52020/8 2020/11 2021/2

2021/5

投資口価格
Stock price

Relative comparison of investment unit price and TSE REIT index(yen)
110,000
100,000
90,00080,00070,00060,00050,00040,0002016/8 2016/11 2017/2

2017/52017/8 2017/11 2018/2

2018/5

2018/8 2018/11 2019/2
投資口価格
Stock price2019/5

東証リート指数TSE REIT Index(Note) TSE REIT Index is indexed based on the listed date (August 31, 2016) and indicates relative performance with investment unit price.

Ooedo Onsen Reit Investment Corporation 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 May 31, 2021)

Structure
General Shareholders’ Meeting

Auditors
Board of Directors
Investment Committee

Compliance Committee
President and CEO
Compliance Officer

Investment Management Department

Finance Department

Planning and Coordination
Department

Ooedo Onsen Reit Investment Corporation 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