This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Summary of REIT Financial Report for the 14th Fiscal Period

July 20, 2023

REIT Issuer:
Ooedo Onsen Reit Investment Corporation
Securities Code: 3472
Representative: Takeshi Kirihara, Executive Director
Asset Manager:
Representative:
Inquiries to:

Stock Exchange Listing: TSE
URL: https://oom-reit.com/en/

Ooedo Onsen Asset Management Co. Ltd.
Takeshi Kirihara, Chief Executive Officer
Satoshi Iguchi, Chief Planning & Coordination Officer+81-3-6262-5456

Scheduled date of submission of periodic securities report (yuka shoken hokokusho):Scheduled date of start of distribution payments:
Preparing supplementary explanatory materials on financial results:
Holding of brief session on financial results:

August 24, 2023
August 15, 2023

Yes
Yes (for institutional investors and analysts)[Amounts are rounded down to the nearest million yen, except for per unit figures]
1. Status of Management and Assets for the 14th Fiscal Period
14th Fiscal Period: Fiscal period ended May 2023 (from December 1, 2022 to May 31, 2023)
13th Fiscal Period: Fiscal period ended November 2022 (from June 1, 2022 to November 30, 2022)(1) Management Status
Fiscalperiod14th
13th

Operatingrevenuemillion yen
1,221
1,237

FiscalperiodProfitper unit

14th
13th

(2) Distribution Status
Fiscal period

Distribution
per unit(excludingexcess cash
distribution)

%
(1.3)
(4.2)

Yen
1,483
1,389

Total
distribution(excludingexcess cash
distribution)

Operatingprofitmillion yen
523
505

%
3.7
(8.9)

Ratio of profit tounitholders’ equity

Excess cash
distribution
per unit

%
1.7
1.6

Total excess
cash
distribution[% figures show the period-on-period increase (decrease)]
Ordinary
Profitprofitmillion yen% million yen
%
349
6.7
349
6.7
327
(7.6)
327
(7.6)
Ratio of ordinary profit tototal assets
%
1.1
1.0

Distribution
per unit(includingexcess cash
distribution)

Total
distribution(includingexcess cash
distribution)

Ratio of ordinary profit tooperating revenue
%
28.6
26.5

Distribution
Ratio of
Payoutdistribution to
net assets
ratio

yen
yen
million yen
yenmillion yen
million yen
%
%
14th
1,444
339
1,444
339
97.4
1.6
13th
1,390
327
14
3
1,404
330
100.0
1.6
(Note 1) The entire amount of total excess cash distribution is equivalent to the amount of allowance for temporary difference
adjustments.
(Note 2) Distribution payout ratio is rounded down to the first decimal place.

(3) Financial Position
Fiscalperiodmillion yen
32,12633,166

million yen
20,96520,947

Unitholders’ equity to total
assets%65.3
63.2

Net cashprovided by (used in)operating activities
million yen
1,956
2,799

Net cashprovided by (used in)investing activities
million yen
(94)
(294)

Net cashprovided by (used in)financing activities
million yen(1,194)(1,855)

Total assets

14th
13th

(4) Cash Flow Status
Fiscalperiod14th
13th

Net assets-1-

Net assets
per unityen
89,08589,006

Cash andcash equivalents
at end of period
million yen
2,150
1,483

2. Management Status Forecasts for the 15th Fiscal Period and the 16th Fiscal Period
15th Fiscal Period: Fiscal period ending November 2023 (from June 1, 2023 to November 30, 2023)
16th Fiscal Period: Fiscal period ending May 2024 (from December 1, 2023 to May 31, 2024)

FiscalperiodOperatingrevenue

Operatingprofit[% figures show the period-on-period increase (decrease)]
Distribution
Distribution
Excess cash
per unit
per unit
distribution
Profit(including(excluding excess
excess cash
per unit
cash distribution)

Ordinary
profitdistribution)

millionmillionmillionmillion
%
%
%
%
yen
yen
yen
yen
yen
15th
1,147 (6.0)
481 (8.1)
326 (6.7)
325 (6.7)
1,383
16th
1,147 (0.0)
471 (2.0)309 (5.3)
308 (5.3)
1,310(Reference) Estimated Profit per unit for the 15th Fiscal Period: 1,383 yen; 16th Fiscal Period: 1,309 yen

yen

yen

13
13

1,396
1,323

* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates and Retrospective Restatement(i) Changes in accounting policies accompanying amendments to accounting standards, etc.:
None(ii) Changes in accounting policies other than (i):None(iii) Changes in accounting estimates:None(iv) Retrospective restatement:
None(2) Total Number of Investment Units Issued and Outstanding(i) Total number of investment units issued and outstanding(including own investment units) at end of period:(ii) Number of own investment units at end of period:

14th
14th

235,347 units
0 units

13th
13th

235,347 units
0 units* This financial report is not included in the scope of the external audit by a certified public accountant orauditing firm.

* Matters of special note

The management status outlook and other forward-looking statements contained in this document are based on
information that are currently available and certain assumptions that are deemed reasonable by the Investment
Corporation. Accordingly, the actual management status, etc. may differ materially due to various factors. In
addition, the forecast is not a guarantee of the amount of cash distribution. For the assumptions for the
management status forecasts, please refer to “Assumptions Underlying Forecasts of the Financial Results for the
Fiscal Period Ending November 2023 and May 2024” on page 7.

-2-

1. Management Status(1) Overview of the Fiscal Period under Review
a. Brief History of the Investment Corporation
Ooedo Onsen Reit Investment Corporation (the “Investment Corporation”) was established on March 29,
2016 (capital: 200 million yen, issued investment units: 2,000 units) under the Act on Investment Trusts andInvestment Corporations (the “Investment Trust Act”). Registration with the Kanto Local Finance Bureau wascompleted on May 13, 2016 (registration number 119, filed with the Director of the Kanto Local Finance
Bureau).
Subsequently, the Investment Corporation issued new investment units via public offering (174,200 units)with August 30, 2016 as the payment date and listed on the Real Estate Investment Trust Securities Market ofTokyo Stock Exchange, Inc. (“Tokyo Stock Exchange”) (Securities Code: 3472) on August 31, 2016. At theend of 13th fiscal period, the Investment Corporation owned 12 onsen and spa-related facilities. During the
fiscal period under review, the Investment Corporation transferred Ooedo-Onsen Monogatari Kinosaki (70%co-ownership interest) (Note 2). As a result of which, the total number of facilities owned by the Investment
Corporation as of the end of the fiscal period under review stood at 11 facilities (total acquisition price (Note3) : 31,085 million yen). The total number of investment units issued and outstanding of the Investment
Corporation as of the end of the fiscal period under review stands at 235,347 units.

(Note 1) “Onsen and spa-related facilities” refers to hot bath facilities (public bathing facilities which employ hot springs (onsen)(meaning hot water, mineral water, steam and other gases (not including natural gas mainly composed ofhydrocarbons) that flow out from the ground; the same hereinafter) or other similar facilities; the same hereinafter) or
other similar facilities; the same hereinafter) or ryokan (lodging of which main structure and facilities are Japanesestyle), hotels (lodging of which main structure and facilities are Western style), resort facilities (facilities to provide
opportunities for sports or recreational activities during leisure time), amusement parks, or other leisure facilities(including multi-use facilities that contain the foregoing) that include onsen or hot baths as part of their core facilities.
Onsen and spa-related facilities also refers to facilities as a whole, including not only buildings with onsen or hotbaths, but also the buildings and sites that are adjacent to such buildings or operated as one facility. The same applies
hereinafter. From the perspective of diversifying risks while ensuring portfolio returns, the Investment Corporation
invests in rental housing and other accommodation facilities for residential purposes, in addition to the investments
in hot spring, bathing and other related facilities, and other leisure facilities. The Investment Corporation has not
owned accommodation facilities or made a resolution to acquire accommodation facilities for residential purposes(meaning rental housing, student apartments, company dormitories, serviced apartments, shared houses, elderly
facilities and houses, and other facilities that are or can be used for residential purposes, the same applies hereinafter),as of the date of this document.
(Note 2) The Investment Corporation transferred 30% co-ownership interest of Ooedo-Onsen Monogatari Kinosaki on
November 30, 2022, and then transferred 70% co-ownership interest of the real estate on February 28, 2023.
(Note 3) “Acquisition price” is the purchase price (not including expenses, such as consumption tax, local consumption tax, or
sale and purchase fees) of each property in the sale and purchase agreement, rounded down to the nearest million yen.
However, in the case of Ooedo-Onsen Monogatari Reoma Resort, since the Investment Corporation transferred partof the land on November 2, 2020 and at the same time leased the transferred part from the transferee, the "acquisition
price" is the purchase price (not including expenses, such as consumption tax, local consumption tax or sale andpurchase fees) of each real estate in the sale and purchase agreement pertaining to the property as of the time ofacquisition, minus the amount equivalent to the book value pertaining to such transferred part as of the time of transfer,plus the amount equivalent to the premium paid as consideration for the establishment of the leasehold in the leaseagreement pertaining to establishment of the leasehold interest in the transferred part.

b. Investment Environment and Management Performance
During the fiscal period under review, the Japanese economy showed signs of a mild recovery as
economic activity gradually returned to normal with the easing of restrictions on movement associated with
the COVID-19 pandemic. On the other hand, the protracted conflict in Ukraine, the continued increase of
prices due to the depreciation of the yen and other negative factors impacted the economic recovery, and thesetrends need to be continuously monitored.
The occupancy rate of guest rooms (Note 1) at all facilities owned by the Investment Corporation in thefiscal period under review was 74.1%, up 29.3% year on year. RevPAR (Note 2) entered a recovery phaseand rose 37.4% year on year.
In these circumstances, to reduce refinancing risk which had been a management issue during theprolonged COVID-19 pandemic, the Investment Corporation transferred Ooedo-Onsen Monogatari
Kamoshika-so and Ooedo-Onsen Monogatari Kinosaki (30% co-ownership interest) at the end of the 13th
fiscal period (fiscal period ended November 30, 2022) and completed the transfer of the remaining 70% coownership interest in Ooedo-Onsen Monogatari Kinosaki as of the end of February 2023 during the fiscal
period under review (Note 3). The Investment Corporation believes that refinancing risk was reduced becausepart of the proceeds from selling the above co-ownership interest were allocated to the repayment of existing
borrowings. It also plans to allocate the remaining sales proceeds to partially fund property acquisitions to
expand asset size in the future.
-3-

On the other hand, there was an agreement with the Oedo-Onsen Monogatari Group to reduce fixed rents
by 50% for the six-month period between September 2022 and February 2023 for the 11 properties held by
the Investment Corporation, excluding the two described above (Ooedo-Onsen Monogatari Kamoshika-so
and Ooedo-Onsen Monogatari Kinosaki), to cooperate with the Oedo-Onsen Monogatari Group inmaintaining the Group’s ability to raise the funds needed to achieve regular income. After the end of the rent
reduction period, fixed rents have been collected since March 2023 at the same amounts as before the rent
reduction measure was taken.
The appraisal value of properties acquired totaled 33,629 million yen at the end of the fiscal period underreview. In comparison to the appraisal value of properties acquired at the end of the previous fiscal period,
the capitalization rate remained unchanged. However, the appraisal value decreased 120 million yen in total
thanks largely to an end of reduction of fixed rent in the previous fiscal period, a temporary reduction of fixed
rent of properties to be renewed, and a revision of capital expenditure plans at some of the facilities. Looking
at unrealized gain/loss (Note 4) for the entire portfolio at the end of the fiscal period under review, theunrealized gain increased to 5,019 million yen as a result of the depreciation of the 11 properties that comprisethe portfolio.

(Note 1) Occupancy rate refers to the ratio of leased area to leasable area.
Guestroom occupancy rate is calculated using the following formula.
Guestroom occupancy rate = number of guestrooms sold during relevant period / number of rooms available for saleduring relevant period ×100 (%)(Note 2) Revenue per available room (RevPAR) is calculated for a given time period by dividing total room revenue by totalrooms available, and is rounded down to the nearest specified unit.
(Note 3) Refer to the press release, “Notice Concerning Transfer of Real Estate in Japan (Ooedo-Onsen Monogatari
Kamoshika-so and Ooedo-Onsen Monogatari Kinosaki)” dated November 15, 2022, for details.
(Note 4) Unrealized gain/loss is calculated using the following formula. Please note that there is no guarantee that thisunrealized gain/loss will be realized.
Unrealized gain/loss = Total appraisal value of owned assets as of the end of the fiscal period under review – Totalbalance sheet amount (including equipment attached to buildings, structures, machinery and equipment, tools,
furniture and fixtures, construction in progress as well as leasehold right)

c. Overview of Capital Procurement
In the fiscal period under review, the Investment Corporation procured 971 million yen through short-termborrowing and 5,162 million yen through long-term borrowing from a syndicate with Sumitomo Mitsui
Banking Corporation, and 200 million yen through long-term borrowing from Sumitomo Mitsui Banking
Corporation (Note 1) to allocate the funds to the repayment of a portion of 3,117 million yen and 210 million
yen in short-term borrowings and 3,016 million yen in long-term borrowing became due on February 28, 2023.
Also the Investment Corporation procured 4,362 million yen through long-term borrowing from a syndicate
with Sumitomo Mitsui Banking Corporation (Note 2) to allocate the funds to the repayment of a portion of
1,129 million yen and 965 million yen in short-term borrowing, and 2,268 million yen in long-term borrowing
became due on May 31,2023. In addition, the Investment Corporation made scheduled repayments of 75 million
yen on January 31, 2023 and 72 million yen on Aapril 28, 2023 using cash on hand, and made early repaymentsof 597 million yen on February 28, 2023 in the wake of the transfer of asset using a portion of net proceedsfrom payment for the transfer (Note 3). As a result, the total amount of interest-bearing debt and the ratio ofsuch debt to total assets (LTV) came to 9,634 million yen and 30.0%, respectively, at the end of the fiscal
period under review.
(Note 1) Refer to the press release, “Notice Concerning Borrowing of Funds” dated February 24, 2023, for details.
(Note 2) Refer to the press release, “Notice Concerning Borrowing of Funds and Future Acquisitions of Properties” dated May
29, 2023, for details.
(Note 3) Refer to the press release, “Notice Concerning Early Repayment of Borrowings in Part” dated February 24, 2023, fordetails.

d. Overview of Financial Performance and Distributions
As a result of the operations described above, business performance in the fiscal period under review
generated operating revenue of 1,221 million yen, operating profit of 523 million yen, ordinary profit of 349
million yen and profit of 349 million yen.
Concerning cash distribution for the fiscal period under review, pursuant to the cash distribution policies
provided in the Investment Corporation’s articles of incorporation, the amount of distribution was to be inexcess of an amount equivalent to 90% of the Investment Corporation’s earnings available for distribution as
defined in Article 67-15, Paragraph 1 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957,
as amended; the “Special Measures Concerning Taxation Act”).
And 9,178,533 yen or the amount of the reversals of allowance for temporary difference adjustments (asdefined in Article 2, Paragraph 2, item 30 of the Ordinance on Accountings of Investment Corporations(Cabinet Office Ordinance No. 47 of 2006, as amended)) has been excluded from the unappropriated retained
earnings in the fiscal period under review.
As a result, distribution per unit for the fiscal period under review was determined as 1,444 yen.
-4-(2) Outlook for the Next Fiscal Perioda. Management Environment in the Next Fiscal Period and Future Acquisitions of New Properties
Looking to the future, the Investment Corporation expects that the Japanese economy and the tourist industry
will continue to improve with the easing of restrictions on movement and progress in the normalization ofsocio-economic activity. On the other hand, the Investment Corporation believes that it should continue tomonitor the risk of an economic downturn due to the protracted Ukraine conflict, prices which are rising
globally, rising interest rates, etc. In these circumstances, the Investment Corporation expects that theperformance of the businesses of the tenants of its facilities will continue to recover.
In preparation for the refinancing risk in the fiscal period under review, the Investment Corporation retained
a part of the proceeds from the sale of Ooedo-Onsen Monogatari Kamoshika-so and Ooedo-Onsen Monogatari
Kinosaki, which were transferred in the 13th fiscal period (fiscal period ended November 30, 2022) and thefiscal period under review. However, with the completion of refinancing at the end of February 2023 and May
2023 during the current fiscal period under review, the Investment Corporation believes that the refinancing
risk has been reduced. Going forward, it aims to put itself onto a growth trajectory and expand assets undermanagement and unitholder value mainly through the acquisition of accommodation facilities other than theproperties held by the sponsor using a part of the 2.0 billion yen surplus which includes the remaining amountfrom the sales proceeds, new borrowings, etc. (Note).
(Note) The Investment Corporation has not made a resolution to undertake a new borrowing of funds, and the Investment
Corporation has not owned accommodation facilities or made a resolution to acquire accommodation facilities, as ofthe date of this document.

b. External Growth Strategy(a) Priority investment assets
While priority investment assets will include onsen and spa-related facilities managed by the Ooedo-Onsen
Monogatari Group (Note 1) based on the Ooedo business model (Note 2), the Investment Corporation will
also invest in accommodation facilities in urban areas, sports and amusement facilities, entertainment
facilities, complex facilities that contain the foregoing and other leisure facilities. In addition, accommodation
facilities whose risk-return characteristics are different from those of leisure facilities will be positioned aspriority investment assets with the goal of continuously and stably enhancing unitholder value through thediversification of the portfolio (Note 3).

(Note1) “Ooedo-Onsen Monogatari Group” is comprised of the Investment Corporation’s sponsors, namely Ooedo-Onsen
Monogatari Hotels & Resorts Co, Ltd. and Ooedo-Onsen Monogatari Co., Ltd. (may be referred to as “Sponsors”) andtheir consolidated subsidiaries (meaning subsidiaries provided for in Article 8, Paragraph 3 of the Regulation on the
Terminology, Forms, and Preparation Methods of Financial Statements (Ordinance of the Ministry of Finance No. 59
of 1963, as amended), including the Asset Manager). The same applies hereinafter.
(Note2) “Ooedo business model” is business expertise introduced in facilities operated by the Ooedo-Onsen Monogatari Groupcapable of maintaining high profitability and stable occupancy, which are possessed by the Ooedo-Onsen MonogatariGroup and believed to be highly competitive. The same applies hereinafter.
(Note3) The Investment Corporation has not owned accommodation facilities or made a resolution to acquire accommodation
facilities, as of the date of this document.

(b) Utilization of Network Unique to the Asset Manager
Using the Asset Manager’s own network, the Investment Corporation will invest in leisure facilities bydetermining whether or not the operators have a track record of stably managing their performance evenduring the COVID-19 pandemic and they are able to handle changes in the market based on their experiences
during the pandemic. The Investment Corporation will selectively invest in accommodation facilities byemphasizing regional characteristics, trends in social conditions, changes in demand for rental
accommodations and convenience and by taking note of tenants’ reliability, management capabilities, trackrecord, etc.
(c) Utilization of Sponsor Pipeline
In accordance with the sponsor support agreement concluded with the Sponsors on November 1, 2017, theInvestment Corporation is granted preferential negotiating rights for the acquisition of onsen and spa-related
facilities owned or developed by the Ooedo-Onsen Monogatari Group, and will also be preferentiallyprovided with third-party property sales information acquired by the Ooedo-Onsen Monogatari Group. The
Investment Corporation intends to continuously acquire facilities that meet investment criteria of theInvestment Corporation by making maximum use of the abovementioned support.
c. Internal Growth Strategy(a) Rent systems combining the promotion of stability and the pursuit of upsides-5-

Under the long-term lease agreements with the companies in the Oedo-Onsen Monogatari Group, theInvestment Corporation adopted rent systems that contain primary rent which consists mainly of fixed rents
with the addition of GOP (Note 1)-linked variable rents and secondary rents which are equivalent to the realestate-related costs of each facility, and ensured that repair costs are paid by tenants, in principle. In this manner,
the Investment Corporation can ensure stable cashflows and enjoy and pursue upsides in rent revenue. In thebasic agreements concluded with Ooedo-Onsen Monogatari Hotels & Resorts Co, Ltd. and Reoma Unity Co.,
Ltd. as of November 15, 2022, it set forth a shift to a new rent system in which the composition ratio and rateof variable rents are higher than the existing ratios and rents if a target GOP set for each facility is achieved(Note 2).

(Note 1) “GOP” refers to gross operating profit, which is the amount remaining after deducting expenses arising directly frommanaging each facility, such as labor expenses and general and administrative expenses, from each facility’s sales. The
same applies hereinafter.
(Note 2) Refer to the press release, “Notice Concerning Conclusion of Basic Agreement on New Rent System” dated November
15, 2022, for details.

(b) Strategic CAPEX (Note) Contributing to the Increase in Income and Enhancement ofCompetitiveness through the Expansion of Capacity
The Investment Corporation will implement CAPEX, which will contribute to an increase in value, suchas the extension and reconstruction of owned properties that have scope for an increase in asset value toincrease the number of guestrooms. Through this measure, it aims to increase potential income for the operatorof the owned properties, as well as to increase rental income through the effective use of non-operatingbuildings and unused land on the premises in the medium to long term.
In addition, the Investment Corporation will strive to raise variable rents by increasing tenant income
through collaboration with the Ooedo-Onsen Monogatari Group, which has the expertise to improve added
value in onsen and spa-related facilities, by actively engaging, from the position of the facility owner, invarious measures to help enhance the competitiveness of facilities, as well as events and other measures toattract guests.
(Note) CAPEX (Capital Expenditure) does not refer to repair expenses for maintenance of real estate but refers to expenditure
for enhancing value and extending lifetime of real estate and its facilities.

d. Financial Strategy
The Investment Corporation's priority is maintaining its financial base through conservative LTV control
and cash management. The goal of the Investment Corporation's medium- and long-term debt financing policy
is to achieve stable financing at points when it acquires new properties and when existing loans become due
while maintaining favorable relationships with existing lenders through sufficient communication. The
Investment Corporation flexibly considers the implementation of equity financing considering the enhancementof the value of investment units over the medium to long terms and the achievement of growth in distributions
per unit.
The Investment Corporation's policy is to maintain LTV at a conservative level with a rate around 40% as
a benchmark for the time being under the principle of 60% as maximum. The Investment Corporation also aims
to lower the risk premium and reduce financial costs by expanding its portfolio and diversifying risks including
those related to tenants and facility locations from medium- and long-term perspectives. At the same time, theInvestment Corporation seeks to gain high ratings, diversify its procurement methods, lengthen the averagedebt repayment period and introduce fixed interest rates.
(3) Significant Subsequent Events
Not applicable-6-

Assumptions Underlying Forecasts of the Financial Results
for the Fiscal Period Ending November 2023 and May 2024
Item

Assumption

Calculation
period・ Fiscal period ending November 2023
(15th fiscal period: from June 1, 2023, to November 30, 2023) (183 days)
・ Fiscal period ending May 2024
(16th fiscal period: from December 1, 2023 to May 31, 2024) (183 days)
・ The Invesetment Corporation has owned 11 properties as of the date of this document.
・ It is assumed that there will be no change (acquisition or disposition of assets) through to theend of the fiscal period ending May 2024.
・ The managed assets may change due to acquisition of assets other than the owned properties
above, the disposition of assets under management, etc.
・ Lease operations revenue from the owned assets is calculated based on the lease agreements
effective as of the date of this document. It is calculated in light of rent revisions to be made in
the future, taking into consideration market trends and other factors. It assumes that there is nodelinquency or non-payment of rent by the tenant.
・ Agreements to modify the lease contracts to shift to the new rent system were concluded on
December 1, 2022 for Ooedo-Onsen Monogatari Ise-shima and Kinugawa Kanko Hotel for theassets owned by the Investment Corporation. However, it is assumed that the rent system will
not change to the new rent system in the fiscal period ending November 30, 2023 (15th period)or the fiscal period ending May 31, 2024 (16th period). The same applies for the other assets
owned by the Investment Corporation.
・ Rent is calculated based on the following assumptions:[Ooedo-Onsen Monogatari Reoma Resort]
Fixed rent: 52,456,896 yen monthly
Variable rent: calculated using the following calculation method(1) Modified GOP (Note 1) for the most recent one-year period × 5.0%
(yearly; the monthly amount is 1/12th thereof)(2) Only if 58.7% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
Ooedo-Onsen Monogatari Reoma Resort, a fixed-term land lease agreement has beenconcluded with the tenant and land rent based on this fixed-term land lease agreement of
83,700 yen per month is received separately, however, this land rent will be revised every
year and will be calculated as follows.
Amount of rent after revision = ((A×12－B) + B’) ÷ 12
A: Amount of rent at that particular point in time
B: Sum total of fixed asset tax and other taxes and public dues levied on the land, calculated
based on the tax notice as of October 31 immediately preceding the start date of theimmediately preceding base fiscal year (refers to one-year period commencing on
December 1 each year; the same applies hereinafter), and the land rent (annual rent payableat that particular point in time)
B’: Sum total of fixed asset tax and other taxes and public dues levied on the land, calculated
based on the tax notice as of October 31 immediately preceding the start date of thatparticular base fiscal year, and the land rent (annual rent payable at that particular point intime)ManagedAssetsOperatingrevenue[Ooedo-Onsen Monogatari Ise-shima]
Fixed rent: 18,009,399 yen monthly (However it will be scheduled to a temporary
reduction of fixed rent in March 2024 due to the full closure of the facility accompaniedby the implementation of Value-up construction.)
Variable rent: calculated as follows(1) Modified GOP for the most recent one-year period × 4.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 77.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ito Hotel New Okabe]
-7-

Item

Assumption
Fixed rent: 12,296,799 yen monthly
Variable rent: calculated as follows(1) Modified GOP for the most recent one-year period × 5.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 52.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Atami]
Fixed rent: 15,619,380 yen monthly
Variable rent: calculated as follows(1) Modified GOP for the most recent one-year period × 4.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 74.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Toi Marine Hotel]
Fixed rent: 9,098,235 yen monthly
Variable rent: calculated as follows(1) Modified GOP for the most recent one-year period × 7.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 72.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Awara]
Fixed rent: 10,963,033 yen monthly
Variable rent: calculated as follows(1) Modified GOP for the most recent one-year period × 3.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 62.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Ikaho]
Fixed rent: 6,126,558 yen monthly
Variable rent: calculated as follows(1) Modified GOP for the most recent one-year period × 7.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 67.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Kimitsu-no-mori]Fixed rent: 4,098,412 yen monthly
Variable rent: calculated as follows(1) Modified GOP for the most recent one-year period × 5.0% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 52.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Kounkaku]
Fixed rent: 7,017,209 yen monthly
Variable rent: calculated as follows(1)
Modified GOP for the most recent one-year period × 4.5% (yearly; the monthly
amount is 1/12th thereof)(2)
Only if 45.3% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Kinugawa Kanko Hotel]

-8-

Item

Assumption
Fixed rent: 29,069,741 yen monthly (However it will be scheduled to a temporary reduction of
fixed rent in March 2024 due to the full closure of the facility accompanied by the
implementation of Value-up construction.)
Variable rent: calculated as follows(1)
Modified GOP for the most recent one-year period × 2.4% (yearly; the monthly
amount is 1/12th thereof)(2) Only if 56.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
[Ooedo-Onsen Monogatari Higashiyama Grand Hotel]
Fixed rent: 8,631,767 yen monthly
Variable rent: calculated as follows(1)
Modified GOP for the most recent one-year period × 4.5% (yearly; the monthly
amount is 1/12th thereof)(2)
Only if 45.0% of the modified GOP exceeds one year’s fixed rent, variable rent will
apply.
Fiscal Period Ending November 2023 (15th fiscal period)

Property name

Ooedo-Onsen Monogatari
Reoma Resort
Ooedo-Onsen MonogatariIse-shima

Primary rent
(Note 2)
Fixed
Variablerent
rent(Note 3)(Note 4)

(Millions of yen)

Secondary
rent(Note 5)Other
revenue

Total(Note 7)

314

-

31

0
(Note 6)

346

108

5

3

-

117

73

-

8

-

82

93

5

3

-

103

54

5

1

-

62

65

-

8

-

74

36

-

3

-

40

24

-

5

-

29

42

-

4

-

46

Kinugawa Kanko Hotel

174

-

7

-

182

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

51

-

10

0
(Note 6)62

Total (Note 7)

1,040

17

89

0

1,147

Ito Hotel New Okabe
Ooedo-Onsen Monogatari
Atami
Ooedo-Onsen Monogatari
Toi Marine Hotel
Ooedo-Onsen Monogatari
Awara
Ooedo-Onsen Monogatari
Ikaho
Ooedo-Onsen Monogatari
Kimitsu-no-moriOoedo-Onsen Monogatari
Kounkaku

Fiscal Period Ending May 2024 (16th fiscal period)

Property name

Ooedo-Onsen Monogatari
Reoma ResortPrimary rent
(Note 2)
Fixed
Variablerent
rent(Note 3)(Note 4)

314

-9-

13

(Millions of yen)
Secondary
rent(Note 5)Other
revenue

Total(Note 7)32

0(Note 6)

360

Item

Assumption
Ooedo-Onsen MonogatariIse-shima

95

6

3

-

106

Ito Hotel New Okabe

73

7

8

-

89

93

6

3

-

104

54

6

1

-

63

65

3

8

-

78

36

-

4

-

40

24

-

5

-

29

42

4

4

-

51

Kinugawa Kanko Hotel

148

-

7

-

156

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

51

5

10

0
(Note 6)67

Total (Note 7)

1,001

54

91

0

1,147

Ooedo-Onsen Monogatari
Atami
Ooedo-Onsen Monogatari
Toi Marine Hotel
Ooedo-Onsen Monogatari
Awara
Ooedo-Onsen Monogatari
Ikaho
Ooedo-Onsen Monogatari
Kimitsu-no-moriOoedo-Onsen Monogatari
Kounkaku

OperatingexpensesNon-operating
expenses(Note 1) “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 publiccharges, non-life insurance premiums and land and house rent, but excluding an amount equivalent toSecondary rent (defined below in Note 5)) from the GOP of each facility for the Modified GOP
Calculation Period (defined below in Note 4). The same applies hereinafter.
(Note 2) “Primary rent” refers to the sum of the fixed rent and the variable rent. The same applies hereinafter.
(Note 3) “Fixed rent” refers to the monthly amount provided for in each facility’s lease agreement. The same
applies hereinafter.
(Note 4) “Variable rent” refers to the amount obtained by multiplying each facility’s modified GOP for the mostrecent 1-year period (for the 6 months starting from December of each year, this means the 1-year
period from March of that year to February of the following year; for the 6 months starting from Juneof each year, this means the 1-year period from September of the previous year to August of that year)(these 1-year periods are referred to as “modified GOP Calculation Periods”) regarding each facilityby the specific rate provided for in each lease agreement (yearly; the monthly amount is 1/12th
thereof). The same applies hereinafter.
(Note 5) “Secondary rent” refers to an amount equivalent to the total amount of taxes, public charges, nonlife
insurance premiums, and other expenses (real estate management expenses) to be borne by theInvestment Corporation for each facility owned by the Investment Corporation. The same applies
hereinafter.
(Note 6) The amount is land rent based on the fixed-term land lease agreement.
(Note 7) Rents of properties are rounded down to the nearest million yen. Therefore, the total of each property’s
rent, the total of fixed rents, the total of variable rents and the total of secondary rents may not add up
to the figure indicated in the Total column.

・ Of the expenses related to leasing activities, which are a major component of operating
expenses, the expenses related to leasing activities other than the depreciation are calculated
based on past actual figures and by reflecting factors that cause expenses to fluctuate.
・ Taxes and public charges is assumed to be 77 million yen for the fiscal period ending
November 2023 and 77 million yen for the fiscal period ending May 2024.
・ Building repair expenses are not expected to arise, as these expenses will, in principle, beborne by the tenant based on the lease agreement effective as of the date of this document.
・ Depreciation, which is calculated using the straight-line method inclusive of incidental
expenses and additional capital expenditure in the future, is assumed to be 414 million yen for
the fiscal period ending November 2023 and 418 million yen for the fiscal period ending May
2024.
・ The total amount of interest expenses and other borrowing-related expenses is expected to be
155 million yen for the fiscal period ending November 2023 and 162 million yen for the fiscal
period ending May 2024.
- 10 -

Item

Assumption

Borrowings

・ The balance of loans outstanding as of May 31, 2023 is 9,634 million yen.
・ In the fiscal period ending November 2023, it is assumed that the scheduled repayment (July
31: 73 million yen, October 31: 73 million yen) will be made separately.
・ In the fiscal period ending May 2024, short-term loans 5,144 million yen will be due forrepayment on February 29, 2024, also long-term loans 4,240 million yen will be due forrepayment on May 31, 2024. And it is assumed that around the same amounts will be
refinanced.
・ In the fiscal period ending May 2024, it is assumed that the scheduled repayment (January 31:
73 million yen, April 30: 73 million yen) will be made separately.
・ The assumed number of investment units issued and outstanding as of the date of thisdocument is 235,347, and it is assumed that the number of investment units will not change
due to any additional issuance of new investment units or another reason before May 31, 2024.
・ Distribution per unit is calculated based on the expected number of investment units issued
and outstanding as of the end of the fiscal period ending May 2024 (235,347 units).
・ Distribution per unit (excluding excess cash distribution) is calculated based on the policy forcash distributions provided for in the Investment Corporation’s articles of incorporation.
・ Distribution per unit (excluding excess cash distribution) may change due to various factors,
including changes of portfolio, changes in rent revenue due to a relocation of tenant, etc., theoccurrence of unexpected capital expenditures, and other reasons.
・ Recording of allowance for temporary difference adjustments of 3,059,511 yen is expectedconcerning the difference in accounts for tax and accounting purposes associated withrecording of asset retirement obligation, etc.
・ Regarding conducting excess cash distribution, the Investment Corporation will have a basic
policy of conducting excess cash distribution of which amount will be equivalent to theincreased amount of allowance for temporary difference adjustments. Pursuant to the policy,
it is assumed that 13 yen of excess distribution per unit will be conducted in the fiscal period
ending November 2023 and 13 yen in the fiscal period ending May 2024.
・ It is assumed that revisions that affect the above forecast figures will not be made to laws orordinances, tax systems, accounting standards, listing regulations, or rules or the like set by
The Investment Trusts Association, Japan.
・ It is assumed that unforeseen material changes in general economic trends, in real estate market
conditions, or in any other factors will not occur.

Outstanding
Investment
Units

Distribution
per unit(Excludingexcess cash
distribution)
Excess cash
distribution
per unit

Other- 11 -

2. Financial Statements
2.1. Balance Sheets(Thousands of yen)
As of November 30, 2022

AssetsCurrent assets
Cash and deposits
Prepaid expenses
Consumption tax refundable
Other
Total current assets
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
LandConstruction in progress
Total property, plant and equipment
Intangible assets
Leasehold interests in land
Total intangible assets
Investments and other assets
Deferred tax assets
Long-term prepaid expenses
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets- 12 -

As of May 31, 2023

2,667,035
101,550
4,829
2,773,414

3,275,162
205,239
12,783
5,003
3,498,189

24,648,005(4,611,639)
20,036,366
50,849(4,337)46,511
600
(168)
431
16,702(5,173)
11,5289,946,436
6,790
30,048,064

24,020,462(4,868,682)
19,151,779
29,989(5,127)
24,861
600
(185)
414
17,692(6,464)
11,227
9,097,457
28,285,739

325,013325,013323,277
323,277

13
10,125
10,08920,22830,393,307
33,166,721

10
9,000
10,08919,09928,628,117
32,126,307

(Thousands of yen)

Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Current portion of long-term borrowings
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Leasehold and guarantee deposits received
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Allowance for temporary difference
adjustments
Total deduction from unitholders' capital
Unitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets- 13 -

As of November 30, 2022

As of May 31, 2023

117,5714,489,185
5,900,601
91,1804,275
886
77,895313,919
5,716
11,001,233

110,491
9,634,887
80,766
209
812
207,455
5,111
10,039,734

1,096,069
122,106
1,218,175
12,219,408

1,040,847
79,7981,120,645
11,160,380

20,653,023

20,653,023(32,884)(36,179)(32,884)
20,620,138(36,179)
20,616,843

327,173

349,082

327,173
20,947,312
20,947,312
33,166,721

349,082
20,965,926
20,965,926
32,126,307

2.2. Statements of Income(Thousands of yen)
13th Fiscal Period
from June 1, 2022
to November 30, 2022

14th Fiscal Period
from December 1, 2022
to May 31, 2023

995,389
242,124
1,237,514

910,074
311,456
1,221,530

561,383
110,320
1,544
15,038528,722
102,895
1,463
15,630

3,600

3,600

40,429732,317505,197

45,362
697,673
523,856

13
596
609

9
794
804

49,339126,206
2,335
177,881
327,925

41,193
129,473
4,136
174,802349,858-

14,396
14,396-

14,396

327,925889
6
895
327,030
143

14,396
349,858813
3
817
349,04141

327,173

349,082

Operating revenue
Leasing business revenue
Gain on sale of real estate properties
Total operating revenue
Operating expenses
Expenses related to leasing business
Asset management fee
Asset custody fee
Administrative service fees
Remuneration for directors(and other officers)
Other operating expenses
Total operating expenses
Operating profit
Non-operating income
Interest income
Reversal of distributions payable
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
collateralization-related expenses
Total non-operating expenses
Ordinary profit
Extraordinary income
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on reduction entry of non-current
assetsTotal extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings(undisposed loss)- 14 -

2.3. Statements of Unitholders’ Equity
13th Fiscal Period (from June 1, 2022 to November 30, 2022)(Thousands of yen)

Unitholders' equity
Unitholders' capital

Surplus

Deduction fromunitholders' capital

UnappropriatedUnitholders' retained earnings
Allowance
Total(undisposed
capitalfordeduction
loss)
temporaryfromdifference unitholders'adjustments capital

Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items during
period20,653,023(28,648)(28,648)

20,624,375

Dividends of surplus

353,869(353,726) (353,726)

Excess cash distribution
from allowance fortemporary difference
adjustments(4,236)(4,236)(4,236)

ProfitTotal changes of items
during period
Balance at end ofcurrent period

353,869

Total
surplusTotal
unitholders'equityTotal net
assets

20,978,244 20,978,244(353,726)(353,726)(4,236)(4,236)

327,030

327,030

327,030

327,030(30,931)(30,931)-(4,236)(4,236)(4,236)(26,695)(26,695)

20,653,023(32,884)(32,884)

20,620,138

327,173

327,173

14th Fiscal Period (from December 1, 2022 to May 31, 2023)

20,947,312 20,947,312(Thousands of yen)

Unitholders' equity
Unitholders' capital

Surplus

Deduction fromunitholders' capital

Balance at beginning ofcurrent period
Changes of items during
periodUnappropriatedUnitholders' retained earnings Total
Unitholders' AllowanceTotal
capital(undisposed
surpluscapitalfordeduction
loss)
temporaryfromdifference unitholders'adjustments
capital20,653,023(32,884)(32,884) 20,620,138

Dividends of surplus(3,294)(3,294)(3,294)

ProfitTotal net
assets327,173 20,947,312 20,947,312(327,132) (327,132)

Excess cash distribution
from allowance fortemporary difference
adjustments
Total changes of items
during period
Balance at end ofcurrent period

327,173

Total
unitholders'equity(327,132)(327,132)(3,294)(3,294)

349,041

349,041

349,041

349,041

18,614

18,614-(3,294)(3,294)(3,294)

21,90921,90920,653,023(36,179)(36,179) 20,616,843

349,082

349,082 20,965,926 20,965,926- 15 -

2.4. Statements of Cash Distributions
Item
I. Unappropriated retained earnings
II. Addition of excess distribution
Of which, allowance for temporary
difference adjustments
III. Amounts included in unitholders’ capital
Capitalization
Of which, reversal of allowance fortemporary difference adjustments
IV. Distribution amount[Distribution amount per unit]
Of which, distribution amount from earnings[Of which, excess cash distribution perunit]
Of which, Allowance for temporary
difference adjustments

13th Fiscal Period
from June 1, 2022
to November 30, 2022

327,173,959
3,294,858[Of which, excess cash distribution per unit
(pertaining to allowance for temporary
difference adjustments)]
V. Retained earnings carried forward

Method of calculating distribution amount(Yen)
14th Fiscal Period
from December 1, 2022
to May 31, 2023
349,082,964-

3,294,858--

9,178,533-

9,178,533

330,427,188[1,404]
327,132,330

339,841,068[1,444]
339,841,068[1,390][1,444]

3,294,858

-

[14]

-

41,62963,363As described above, distribution per unit for the
fiscal period under review is 1,404 yen.
Concerning cash distribution (excluding excess
cash distribution), in order to ensure that the
maximum amount of cash distribution of earnings
would be included in deductible expenses based on
application of special provisions for taxation on
investment corporations (Article 67-15, Paragraph
1 of the Special Measures Concerning Taxation
Act), the Investment Corporation decided to
distribute almost the entire amount of the earnings
provided in Article 136, Paragraph 1 of the Act on
Investment Trusts and Investment Corporations,excluding the portion where cash distribution perinvestment unit would be less than JPY1. As aresult, the Investment Corporation declared a cash
distribution per investment unit (excluding excess
cash distribution) of 1,390 yen.
In addition, pursuant to the policy for“distribution of money in excess of profits” asstated in Article 25 of its articles ofincorporation, the Investment Corporation
decided to make a distribution for the 3,294,858
yen in allowance for temporary difference
adjustments for the purpose of reflecting theeffect on distributions of the difference inaccounts for tax and accounting purposes inassociation with expenses related to asset
retirement
obligations
andleaseholddepreciation (as defined in Article 2, Paragraph2, item 30 (b) of the Investment Corporations
Accountings Ordinance). This resulted in
distribution of allowance for temporary
difference adjustments of 14 yen per investment
unit.

As described above, distribution per unit
for the fiscal period under review is 1,444
yen.
Concerning cash distribution (excludingexcess cash distribution), in order to ensurethat the maximum amount of cash
distribution of earnings would be included indeductible expenses based on application of
special provisions for taxation on investment
corporations (Article 67-15, Paragraph 1 of
the Special Measures Concerning Taxation
Act), the Investment Corporation decided tomake a distribution the entire distribution
amount which has been excluded theamount of the reversals of allowance fortemporary difference adjustments (asdefined in Article 2, Paragraph 2, item 30 of
the Ordinance on Accountings ofInvestment Corporations) from the amountof the earnings provided in Article 136,
Paragraph 1 of the Act on Investment Trusts
and Investment Corporations, excluding the
portion where cash distribution perinvestment unit would be less than JPY1.
This resulted in distribution amountfrom earnings of 1,444 yen per investment
unit.

- 16 -

2.5. Statements of Cash Flows(Thousands of yen)

Cash flows from operating activities
Profit before income taxes
Depreciation
Borrowing related expenses
Interest income
Interest expenses
Subsidy income
Loss on tax purpose reduction entry of non-current
assetsLoss on retirement of non-current assets
Increase (decrease) in operating accounts payable
Decrease (increase) in consumption tax refundable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received
Decrease in property, plant and equipment due tosaleOther, net
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Refund of leasehold and guarantee deposits received
Proceeds from restricted bank deposits
Subsidies received
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Proceeds from long-term borrowings
Repayments of short-term borrowings
Repayments of long-term borrowings
Distributions paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 17 -

13th Fiscal Period
from June 1, 2022
to November 30, 2022

14th Fiscal Period
from December 1, 2022
to May 31, 2023

327,925
441,246
126,206(13)
49,339-349,858
416,019
129,473(9)41,193(14,396)-

14,396

1,302
48,560(39,675)(34,920)
1,125
5,858
83,527

1,595(47,328)(12,783)(77,895)(123,883)
1,125(10,413)(106,463)

1,843,192

1,435,903(5,198)2,848,475
13(48,314)(1,014)
2,799,160

6,274
2,002,665
9(45,259)(888)
1,956,527(270,113)(25,952)(59,392)
61,118(294,340)(112,968)(55,221)59,505
14,396(94,288)

1,387,043(2,030,196)(853,980)(357,962)(1,855,095)
649,724
833,347
1,483,071

968,079
9,619,061(5,460,222)(5,991,097)(330,427)(1,194,606)
667,632
1,483,071
2,150,704