Ooedo Onsen Reit Investment Corporation
Results of 7th Fiscal Period ended November 30, 2019

Presentation Material
January 22, 2020
（Asset Manager）Ooedo Onsen Asset Management Co., Ltd.

Table of Contents
Ⅰ. Investment Highlights

Ⅴ. Investment Areas and Target Strategies

Operating Results for the Entire Portfolio

3

Investing Targets and Building of the Portfolio

27

Increase/Decrease in Variable Rent

4

Market Environment

28

Impact of Typhoons

5

Future Growth Targets

32

Changes in Key Indices

6

Ⅵ. Appendix
Ⅱ. Financial Highlights

Appraisal Value

34

Financial Results for the 7th Fiscal Period ended November 20198

Introduction of Properties

35

Forecast for the 8th Fiscal Period ending May 2020

9

Financial Indices45

Forecast for the 9th Fiscal Period ending November 2020

10

Balance Sheet

46

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

11

Statement of Income

47

Debt Status

48

Ooedo-Onsen Monogatari Group49

Ⅲ. Investment Results
Portfolio Data

13

“Ooedo Business Model” with Stable Operations and Sustainable Growth51

Operating Results of Individual Properties

15

Unitholders Breakdown

53

Financial Status

16

Unitholder Benefit Program

54

Track Record of Investment Unit Price55

Governance Structure56

Ⅳ. Future Investment Strategies
Recognition of Issues after 3 Years from Listing and Future Policies

19

Overview of Investment Corporation

57

External Growth Strategy

20

Overview of Asset Manager

58

Internal Growth Strategy

23

Financial Strategy

25* The photo on the front cover is an outside bath at Ooedo Onsen Monogatari Ikaho.

Ooedo Onsen Reit Investment Corporation 1

Ⅰ. Investment Highlights

Ooedo Onsen Reit Investment Corporation 2

Operating Results for the Entire Portfolio
RevPAR declined slightly due mainly to the impact of typhoons,but the room occupancy rate remained stable overall＜Cumulative comparison of 7th period and the same period of the previous year＞

Room occupancy rate：
89.6%

89.3%

Portfolio operating results
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

90.5%

78.9%

85.8%

93.0%

86.9%

84.8%

86.2%

88.8%

96.5%

87.6%

83.4%

93.4%

88.0%

89.6%

89.3%

-0.3%

ADR (yen)

31,83230,332

27,82431,01829,89130,26225,08828,58941,675

26,62927,50929,27730,15830,58330,062-521

RevPAR (yen)28,80723,931

23,872

28,84625,97525,662

21,62525,387

40,21623,327

22,942

27,344

26,53927,402

26,845-557

Sales (million yen)

1,575

1,306

1,186

1,548

1,354

1,379

1,173

1,356

2,101

1,217

1,266

1,477

16,944

8,843

8,593

-250

(Note) 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.

Ooedo Onsen Reit Investment Corporation 3

Increase/Decrease in Variable Rent
Operation, while remaining solid as a whole, differed from one facility to another,and some facilities had difficulties(thousand yen)

PropetyNo.

6th period

7th period

Property name
Fixed

Variable

Total rent

Fixed

Variable

Total rent

Increase/decrease ofvariable rent

S-1

Ooedo-Onsen Monogatari Reoma Resort

375,257

31,090406,347

315,257

29,317344,575-1,772S-2

Ooedo-Onsen Monogatari Ise-shima

108,056

7,499

115,555

108,056

7,294

115,351-204

S-3

Ito Hotel New Okabe

73,7808,681

82,46273,7809,481

83,262

800

S-4

Ooedo-Onsen Monogatari Atami

93,7168,138

101,855

93,7168,214

101,93075

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

54,5896,543

61,13354,5896,707

61,297

164

S-6

Ooedo-Onsen Monogatari Awara

65,7783,621

69,39965,7783,560

69,338-60

S-7

Ooedo-Onsen Monogatari Kamoshika-so

35,723

4,676

40,39935,723

4,179

39,903-496

S-8

Ooedo-Onsen Monogatari Ikaho

36,7594,825

41,58536,7595,030

41,789204

S-9

Ooedo-Onsen Monogatari Kimitsu-no-mori

24,5902,768

27,35824,5902,950

27,541

182

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

58,7294,155

62,88574,9794,108

79,087-47

S-11

Ooedo-Onsen Monogatari Kounkaku

42,103-

42,103

42,103-

42,103-

S-12

Kinugawa Kanko Hotel

134,868

7,797

142,665

174,418-

174,418-7,797

S-13

Ooedo-Onsen Monogatari Kinosaki

74,687

4,733

79,42178,887

5,127

84,015

393

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

51,7905,309

57,09951,7905,543

57,334234

1,230,431

99,841

1,330,273

1,230,431

91,517

1,321,948-8,324

Total

Measures for improvement such as initiatives for attracting more customers are being discussed continuouslywith the sponsor, thereby improving the performance of facilities whose variable rents declined.
・Ooedo-Onsen Monogatari Kounkaku: Took in inbound customers on weekdays when operation was weak and strengthened measures
to attract groups of tourists
・Kinugawa Kanko Hotel: Newly established non-stop buses (Saitama and Chiba route and Ueno and Shinjuku route),
strengthened measures to attract groups of tourists and enhanced advertising measures to attract individual tourists.

Ooedo Onsen Reit Investment Corporation 4

Impact of Typhoons
Of the typhoons that landed in Japan during the 7th period, Typhoons No. 10, No. 15 and No. 19 caused
a fall in variable rents due to the suspension of business and declining operation in some facilities,
but did not impact building frames.

1. Impact on variable rents
Property name

Impact on operation

Ooedo-Onsen Monogatari Reoma Resort, Ito Hotel New Okabe,・Accommodation cancellations, etc.
Kinugawa Kanko Hotel and others (all facilities excluding
Ooedo-Onsen Monogatari Nagasaki Hotel Seifu)

Ooedo-Onsen Monogatari Kimitsu-no-mori・Suspension of business from September 9 to October 9,
and from October 12 to October 17, 2019

Impact on variable rent
Having an impact(181 million yen opportunity loss is assumed on a sales basis)(Note 1)

Variable rent is not expected to be generated
in the 8th period (ending May 2020)
and the 9th period (ending November 2020)(In the 8th period, variable rent of 2 million yen was
initially assumed to be generated) (Note 2)

2. Impact on building frames
Property nameIto Hotel New Okabe

Impact on buildings and equipment
・Breakage of partition boards with next room and outside eave top cover in Sagamitei
・Breakage of lightning arrestor and falling of partition door of substation equipment

Impact on building frames
No impact

・Failure of ceiling suspension AC circuit breaker in the live kitchen on the 7th floor
・Breakage of eaves in the upper part of the emergency stairs and guest rooms
Ooedo-Onsen Monogatari Atami

・Water leakage on the ceilings of the restaurant on the 7th floor and guest rooms

No impact

on the 4th floor
・Breakage of parapet coping on the rooftop of the new building
Ooedo-Onsen Monogatari Toi Marine Hotel・Breakage of balcony plate on the 2nd floor

No impact・Water leakage from the ceiling of the ping-pong corner on the 2nd floor
・Breakage of komayose (small fence), room guide lamps
Ooedo-Onsen Monogatari Kimitsu-no-moriand intrusion prevention fence
for detached rooms
・Breakage of top board and drain in the arena building

No impact(Note 1) The impact on sales is calculated based on the actual number of accommodation cancellations. The impact on sales at Ooedo-Onsen Monogatari Reoma Resort (New Reoma World) is calculated
in comparison with sales on the same days of the week a year ago.
(Note 2) A certain portion could be covered by insurance, given the coverage of loss of profits insurance.

Ooedo Onsen Reit Investment Corporation 5

Changes in Key IndicesDistributions per unit ended with 2,415 yen in the 7th period and are expected to be 2,300 yen
in the 8th period, making a downward revision by 37 yen from the previous forecast

6th period

7th period

8th period

9th period(May 2019)(November 2019)(May 2020)(November 2020)

ActualActualForecast

Forecast

DPU per unit

2,390 yen

2,415 yen

2,300 yen

2,340 yen

FFO per unit

4,195 yen

4,244 yen

4,150 yen

4,220 yen

LTV

40.6％

40.3％

40.0％

39.8％

(appraisal value basis)

36.8％

36.3％

35.8％

35.3％

NAV per unit

107,149 yen

108,243 yen

109,213 yen

110,369 yen(book value basis)

LTV(Note) Unrealized gain (Appraisal value – book value) were 4.2 billion yen at the end of the 7th fiscal period (up 0.2 billion yen from the end of the previous fiscal period).
LTV (on an appraisal value basis) for the 8th and 9th fiscal periods is based on the assumption that appraisal value will remain unchanged.

Ooedo Onsen Reit Investment Corporation 6

Ⅱ. Financial Highlights

Ooedo Onsen Reit Investment Corporation 7

Financial Results for the 7th Fiscal Period ended November 2019
Revenue and profits increased from the previous forecast due to insurance income from typhoons anda fall in finance-related expenses, despite a decline in variable rents.
Main factors for increase/decrease from forecast (Note)
Distributions per unit increased 35 yen from the previous forecast(thousand yen)・Decrease in variable rent (Kinugawa Kanko, etc.)-7,211and rose 25 yen from the previous period.
(thousand yen)

Item

Operating revenue

6th period

7th period（Actual）（Actual）

Component
ratio

1,434,986

Componentratio

7th period(Forecast as ofJul. 19, 2019)

Difference

Difference・Increase in other operating revenue (Insurance revenue)+2,175

Lease operations revenue gain/loss+4,886

1,440,167+5,181

1,433,949+6,2181,321,948-8,324

1,329,160-7,211

1,230,431-

1,230,431-

91,517-8,324

98,729-7,211

104,437

104,545+107

104,513+32

275

13,673+13,398275+13,398

Lease operations
revenue gain/loss

886,911884,506-2,405

879,619+4,886

Operating income

699,005

696,901-2,103

691,185+5,716

・Increase in other operating revenue (Insurance revenue)

Ordinary income

560,389

566,511+6,121

558,355+8,155

Net income

559,516

565,562+6,046557,355+8,207・Increase in other operating expenses(Repairs covered by insurance)
・Increase in depreciation (due to capital expenditure)

2,824

2,824

-

2,824

-

Total distribution

562,479

568,363+5,883560,125+8,237

Total units outstanding

235,347

235,347-

235,347

-

2,390

2,415

+25

2,380

+35

Primary rent
Fixed rent
Variable rent
Secondary rent
Others

1,330,273
92.5%
7.5%

1,230,431

93.1%

99,841

6.9%

・Decrease in selling, general and administration(IR-related expenses)

Operating income
・Decrease in finance-related expenses

Ordinaly income

DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)

12

12

-

12

-

4,195

4,244

+49

4,219

+25

1,314,891

1,317,915+3,0231,315,204+2,710Depreciation

427,980

433,409+5,428435,584-2,175

CAPEX

184,163

178,936-5,226

180,000-1,063(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.

+1,792+5,716+2,429+8,155(thousand yen)・Decrease in variable rent (Kinugawa Kanko, etc.)

・Decrease in selling, general and administration(IR-related expenses)
・Increase in selling, general and administration (Legal fees)

Operating income
・Decrease in finance-related expenses

Ordinaly income

Main financial indicators
Total assets

NOI-3,211Main factors for increase/decrease
from previous fiscal period

Lease operations revenue gain/loss

Excess cash distribution+13,398

・Increase in other operating expenses(Repairs covered by insurance)・Decrease in depreciation-8,324+13,398-3,211-5,428-2,405+2,464-3,125-2,103+8,226+6,121(million yen)

38,640Interest-bearing debt

15,558

Total liabilities

17,433

Total net assets

21,207

LTV (book value basis)
NAV per unit

40.3%
108,243 yen

Ooedo Onsen Reit Investment Corporation 8

Forecast for the 8th Fiscal Period ending May 2020
Revenue and profits have been revised slightly downward from the previous forecasts
due to a fall in variable rents reflecting the impact of typhoons. As a result, DPU will decline 37 yen.
Profits are expected to decline from the previous period due to the absence of insurance income
and the posting of expenses for the General Unitholders’ Meeting(thousand yen)
Item

Operating revenue

7th period

8th period（Actual）（Forecast）

Component
ratio

Primary rent

1,440,167

Component
ratio

1,321,948

8th period(Forecast as ofJul. 19, 2019)

Difference

1,427,268-12,899

1,436,321

Main factors for increase/decrease from forecast(thousand yen)・Decrease in variable rent (Kimitsu-no-mori, etc.)

Difference-9,052

1,317,622-4,3261,330,027-12,404

Fixed rent

93.1%

1,230,431

93.4%

1,230,431-

1,230,431-

Variable rent

6.9%

91,517

6.6%

87,191-4,326

99,596-12,404+2,536

Lease operations revenue gain/loss-7,531

・Decrease in selling, general and administration(Review of legal fees)

Ordinaly income-8,797

105,370+825

106,018-647

Others

13,673

4,275-9,398275+4,000

Lease operations
revenue gain/loss

884,506

867,731-16,774875,262-7,531

Operating income

696,901

673,470-23,431682,267-8,797

Ordinary income

566,511539,496-27,014548,293-8,797・Increase in other operating revenue
・Decreasein variable
rent (Kounkaku, etc.)(Reoma solar
power generation)
・Decrease in other operating
revenue)
expenses revenue(survey (Insurance
on asbestos,etc.)

Net income

565,562

538,496-27,066

547,293-8,797・Increase in depreciation (due to capital expenditure)

2,824

-

2,824

-

Total distribution

568,363541,298-27,064

550,005-8,707

Total units outstanding

235,347

235,347-

235,347-

DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI
Depreciation
CAPEX

2,415

2,300

-115

2,337

-37

12

12

-

12

-

4,244

4,150

-94

4,198

-48

1,317,915
433,409
178,936

1,306,040
438,308
180,000-11,875+4,899
+1,063

1,316,108
440,845
180,000-10,067-2,536--1,200-8,797

104,5452,824+2,000Operating income

Secondary rent

Excess cash distribution-12,404

・Increase in other operating revenue(Reoma solar power generation)
・Decrease in depreciation

Main factors for increase/decrease
from previous fiscal period
Main factors for increase/decrease
fromprevious
fiscalrent
period・Decreasein variable(Kimitsu-no-mori, etc.)

Lease operations revenue gain/loss
・Temporary
in expenses
・Increase in increase
selling, generaland administration
for
GeneralUnitholders’Meeting(transfer
fees,
etc.)

Operating income
・Increase・Decreaseininfinance-related
finance-relatedexpenses
expenses

Ordinaly income

Main financial indicators(thousand yen)

-4,326(thousand yen)

+2,000-1,112-11,398+1,688-4,899-7,604-16,774-7,291-6,000-528-23,431-7,820-3,573+5,797-27,014-2,034(million yen)

Total assets

38,391

Interest-bearing debt

15,371

Total liabilities

17,214

Total net assets

21,177

LTV (book value basis)

40.0%

Ooedo Onsen Reit Investment Corporation 9

Forecast for the 9th Fiscal Period ending November 2020
Profits are expected to rise from the previous period due to revenue from a land lease in Reoma Resort,the absence of expenses for the General Unitholders’ Meeting and a fall in finance-related expenses.
As a result, DPU is expected to increase 40 yen from the previous period(thousand yen)
Item

Operating revenue

8th period

9th period（Forecast）（Forecast）

Component
ratio

Primary rent

1,427,268

Component
ratio

1,317,622

Difference

1,428,649+1,381

1,317,327-295

Fixed rent

93.4%

1,230,431

93.4%

1,230,431-

Variable rent

6.6%

87,191

6.6%

86,895-295

Secondary rent

105,370

105,047-323

Others

4,275

6,275

+2,000

Lease operations
revenue gain/loss

867,731

863,965-3,766

Operating income

673,470

676,846+3,376

Ordinary income

539,496548,868+9,371

Net income

538,496

547,868+9,371

Excess cash distribution
Total distribution

2,824

2,824

-

541,298

550,711+9,413

235,347

-

2,300

2,340

+40

12

12

-

4,150

4,220

+70

1,306,040

1,309,425+3,385

Depreciation

438,308

445,459+7,151

CAPEX

180,000

180,000-

DPU (yen)（Excess cash distribution
per unit)

FFO per unit (yen)NOI(thousand yen)・Increase in other operating revenue(Reoma solar power generation)
・Increase in depreciation (due to capital expenditure)

Lease operations revenue gain/loss
・Decrease in expenses for General Unitholders’ Meeting

Operating income
・Decrease in finance-related expenses

Ordinaly income

235,347

Total units outstanding

Main factors for increase/decrease
from previous fiscal period

Main financial indicators+4,000-7,151-3,766+6,000+3,376+5,995+9,371(million yen)

Total assets

38,197

Interest-bearing debt

15,185

Total liabilities

17,013

Total net assets

21,183

LTV (book value basis)

39.8%

Ooedo Onsen Reit Investment Corporation 10

Major Factors for Increase/Decrease in DPU: Operation Focused on Stable Generation of Cash
FFO per unit remained and is expected to remain stable, and the payout ratio is around 56%.
The financial conditions will continue to improve due to extra cash
(yen)
5,000

6th period

7th period

8th period

9th period(May 2019)(November 2019)(May 2020)(November 2020)

4,195

－10

＋23

＋34

4,244

Depreciation FinanceLease
operation
relatedexpensesrevenues
gain/loss

4,000

－71

＋20

－25

－15

4,150

Depreciation Expenses FinanceLease
operation
for General related
revenues
Unitholders’ expenses
gain/loss
Meeting

+30

－16

+25

+25

4,220

Lease
Depreciation Expenses Financeoperation
for General related
revenues
Unitholders’ expenses
gain/loss
Meeting

3,000

2,000

2,390

2,415

2,300

2,340

6th period(Actual)7th period(Actual)8th period(Forecast)

9th period(Forecast)

1,000

0

(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 11

Ⅲ. Investment Results

Ooedo Onsen Reit Investment Corporation 12

Portfolio Data (1)Appraisal values remained flat from the previous period for both the total and each property.
The unrealized gain (appraisal value – book value) increased to 4.2 billion yen(up 0.2 billion yen period on period) at the end of the 7th period.
PropertyNo.

S-1

Property name

Ooedo-Onsen Monogatari Reoma Resort

Location

Kagawa Prefecture

Building age(years)28.4／28.7

Number of
rooms

Room
occupancy
rate(Note 1)

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

NOI
yield
(Note 2)After
depreciation
NOI yield

PML(Note 2)

241

88.8%

10,379

8,910

347

6.7%

5.1%

1.9／1.6％

93.2%

3,656

3,840

117

6.4%

3.6%

14.2%

92.2%

2,657

2,820

82

6.2%

4.1%

12.0%

(Note 3)S-2

Ooedo-Onsen Monogatari Ise-shima

S-3

Ito Hotel New Okabe

Mie Prefecture

39.7

83

Shizuoaka Prefecture

29.1

73

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

Shizuoaka Prefecture

45.9

76

94.0%

2,997

3,220

101

6.7%

4.5%

12.6%

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

Shizuoaka Prefecture

45.2

64

88.6%

1,910

2,030

61

6.4%

3.3%

14.9%

S-6

Ooedo-Onsen Monogatari Awara

Fukui Prefecture

38.3

95

86.6%

1,901

2,000

69

7.3%

5.0%

14.9%

S-7

Ooedo-Onsen Monogatari Kamoshika-so

Tochigi Prefecture

23.8

60

85.9%

1,222

1,270

38

6.4%

4.1%

3.0%

S-8

Ooedo-Onsen Monogatari Ikaho

Gunma Prefecture

36.1

40

99.0%

1,299

1,380

40

6.3%

4.2%

1.0%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-moriChiba Prefecture

23.7

41

69.6%

819

862

26

6.5%

4.4%

4.8%

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Nagasaki Prefecture

37.4

100

93.9%

1,637

2,570

78

9.5%

7.1%

6.4%

S-11

Ooedo-Onsen Monogatari Kounkaku

Miyagi Prefecture

54.0

98

82.2%

1,040

1,220

41

7.9%

3.9%

3.9%

S-12

Kinugawa Kanko Hotel

Tochigi Prefecture

38.3

172

88.5%

3,870

6,140

172

8.9%

5.7%

2.1%

S-13

Ooedo-Onsen Monogatari Kinosaki

Hyogo Prefecture

51.1

103

97.8%

2,084

2,650

84

8.1%

6.1%

11.8%

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel Fukushima Prefecture

55.2

123

87.1%

1,230

1,480

56

9.2%

4.7%

4.6%

38.0

1,369

89.3%

36,70540,392

1,317

7.2%

4.8%

2.7%

Total/Average(Note 5)(Note 1) Room occupancy rate is for the 7th period ended November 30, 2019 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 13

Portfolio Data (2)The reduction of the investment ratio in certain types of properties through external growth is a challenge,
and the investment ratio by region is distributed across the country, excluding Hokkaido and Okinawa.
Investment ratio by facility
Acquisition price basis
2.8%
3.3%
3.4%
3.5%
4.5%

Rent income basis (Note)

Appraisal value basis
2.2%

3.1%
3.4%
3.7%

3.0%

2.1%
3.2%
4.3%
22.1%

5.0%

28.3%

5.2%

5.2%

6.4%

6.0%

15.2%

10.5%

5.7%

13.1%
6.3%

6.6%

7.2%
8.2%

10.0%

25.9%

4.6%

5.0%

5.2%

3.0% 2.1%
3.1%

7.0%

8.0%

6.3%

9.5%

7.7%

8.7%

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

Investment ratio by region
Acquisition price basis
4.5%

Ooedo-Onsen Monogatari Reoma Resort

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

Ooedo-Onsen Monogatari Nagaski Hotel Seifu

Kanto

Ito Hotel New Okabe

Ooedo-Onsen Monogatari Kounkaku

Tokai

Ooedo-Onsen Monogatari Atami

Kinugawa Kanko Hotel

Hokuriku

Ooedo-Onsen Monogatari Toi Marine Hotel

Ooedo-Onsen Monogatari Kinosaki

Kinki

Ooedo-Onsen Monogatari Awara

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

Shikoku

Ooedo-Onsen Monogatari Kamosika-so

KyushuOoedo-Onsen Monogatari Ikaho

6.2%

28.3%

5.7%
5.2%

19.6%

30.6%

Ooedo Onsen Reit Investment Corporation 14

Operating Results of Individual Properties (1)RevPAR rose mainly in Reoma Resort and Kinosaki,
but declined in many properties including Kimitsu-no-mori, which was strongly affected by typhoons

1. Operating results of the accommodation sector
Room occupancy rate (%)
Previous
corresponding
periodcumulative
total

7th period
cumulative
Total

ADR (yen)Previous
corresponding
periodcumulative
total

RevPAR (yen)Previous
corresponding
periodcumulative
total

Sales (million yen)Previous
corresponding
periodcumulative
total

Property
No.

Property name

S-1

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

85.4

88.8

+4.0%

31,16632,402+4.0%

26,61528,772

+8.1%

1,591

1,670

+4.9%

S-2

Ooedo-Onsen MonogatariIse-shima

93.8

93.2

-0.6%

34,50033,324-3.4%

32,361

31,057

-4.0%

594

566

-4.7%

S-3

Ito Hotel New Okabe

88.2

92.2

+4.5%

30,16028,537-5.4%

26,601

26,311

-1.1%

631

613

-2.9%

S-4

Ooedo-Onsen Monogatari
Atami

97.3

94.0

-3.4%

33,22433,901+2.0%

32,326

31,866

-1.4%

528

528

+0.1%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

84.0

88.6

+5.5%

30,50629,325-3.9%

25,62525,981

+1.4%

337

343

+1.6%

S-6

Ooedo-Onsen Monogatari
Awara

89.6

86.6

-3.3%

30,22429,550-2.2%

27,08025,590

-5.5%

599

555

-7.3%

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

92.2

85.9

-6.8%

27,951

27,534-1.5%

25,77023,651

-8.2%

335

310

-7.3%

S-8

Ooedo-Onsen Monogatari
Ikaho

97.4

99.0

+1.6%

31,022

31,227+0.7%

30,21530,914

+2.3%

256

262

+2.4%

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

94.4

69.6

-26.3%

26,73826,842+0.4%

25,24018,682-26.0%

278

208-25.1%

Change7th period
cumulative
Total

Change7th period
cumulative
Total

Change7th period
cumulative
Total

ChangeOoedo Onsen Reit Investment Corporation 15

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

Property name

Previous
corresponding
periodcumulative
total

7th period
cumulative
Total

ADR (yen)

ChangePrevious
corresponding
periodcumulative
total

7th period
cumulative
Total

RevPAR (yen)ChangePrevious
corresponding
periodcumulative
total

7th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative
total

7th period
cumulative
Total

ChangeS-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

92.5

93.9

+1.5%

33,96931,919-6.0%

31,421

29,971

-4.6%

654

622

-4.8%

S-11

Ooedo-Onsen Monogatari
Kounkaku

85.4

82.2

-3.7%

24,39324,478+0.3%

20,831

20,120

-3.4%

511

498

-2.7%

S-12

Kinugawa Kanko Hotel

89.6

88.5

-1.2%

32,16630,013-6.7%

28,82026,561

-7.8%

1,192

1,075

-9.8%

S-13

Ooedo-Onsen Monogatari
Kinosaki

91.2

97.8

+7.2%

30,50930,092-1.4%

27,82429,429

+5.8%

638

674

+5.7%

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

88.9

87.1

-2.0%

28,432

27,719-2.5%

25,27624,143

-4.5%

691

662

-4.3%

89.6

89.3

-0.3%

30,58330,062-1.7%

27,402

26,845

-2.0%

8,843

8,593

-2.8%

Total

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

344,840

7th period
cumulative
Total

331,425

Sales (million yen)

Change-3.9%

Previous
corresponding
periodcumulative
total

1,364

7th period
cumulative
Total

1,298

Change-4.8%(Note) Number of guests is the total number of people using New Reoma World during the period.

Ooedo Onsen Reit Investment Corporation 16

Financial Status
LTV will steadily decrease due to scheduled repayments and is expected to decline graduallyto a level less than 40% in the 9th period.
LTV on appraisal value basis has already fallen to the mid-30% range
Breakdown of lenders

LTV

Ratio of long-term borrowings

Number of syndicate lenders: 14
LTV(book value basis)

(%)
41.0

40.3

LTV(appraisal value basis)

40.0

(%)
100.0
97.8

97.8

97.8

7th
Nov. 2019(Actual)

8th
May 2020(Forecast)

9th
Nov. 2020(Forecast)

39.8

39.0
95.0
37.0

36.3
35.8
35.3

35.0

7th
Nov. 2019(Actual)

9th
Nov. 2020(Forecast)

8th
May 2020(Forecast)<Breakdown of others, which stand at 23.0%>
The Bank of Fukuoka 3.1%

The Toho Bank 3.0%

The Tochigi Bank 3.0%

The Shinwa Bank 3.0%

The First Bank of Toyama 3.0%

The Iyo Bank 3.0%

Fukoku Mutual Life Insurance 3.0%

The Bank of Kochi 1.8%

90.0

Overview of maturity（million yen）
5,000
Long-term borrowings
4,000

Avg. remaining duration

6th period: 2.4 years → 7th period: 1.9 years

Short-term borrowings

3,000
2,000
1,000
0

7th

8th

9th

10th

11th

12th

13th

14th

Nov-19

May-20Nov-20May-21

Nov-21

May-22

Nov-22

May-23

Ooedo Onsen Reit Investment Corporation 17

Ⅳ. Future Investment Strategies

Ooedo Onsen Reit Investment Corporation 18

Recognition of Issues after 3 Years from Listing and Future Policies
Recognizing current issues and taking their solutions as growth potential with room for future improvement,
thereby developing them into a new phase

Current issues

Development into a new phase Sponsor properties supported by the stable
Ooedo business model Scale expansion of portfolio and growth inmarket capitalization through external growth

・Lopsided portfolio
・Stable, but room for upside is limitedin the short term.

 Distributed across the country, and the locationof properties rooted in the local community

・Requires properties in urban areas withhigher liquidity
・Heavy depreciation burden due to the low ratio ofland (low FFO payout ratio)

 High profitability of renovated properties
by sponsor
・Portfolio with aged buildings

 Diversification of investment targets andpromotion of the diversification of risks as
a REIT focused on facilities aiming at utilizing
leisure time Pursuit of upside in addition to stability withproperties of the Ooedo-Onsen MonogatariGroup at the core
 Reduction of finance costs and strengtheningof financial flexibility through the diversificationof portfolio risks

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 -Ooedo-Onsen Monogatari
Beppu Seifu

Ooedo-Onsen Monogatari
Gero Shin-kan

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

Ooedo-Onsen Monogatari
Kounkaku

Ooedo-Onsen Monogatari
MasuyaOoedo-Onsen Monogatari
Hotel Suiyotei(Nagasaki City,
Nagasaki Prefecture)(Osaki City, Miyagi Prefecture)(Osaki City, Miyagi Prefecture)(Atami City, Shizuoka Prefecture) (Beppu City, Ooita Prefecture)

April 2018 -August 2018 -April 2019 -August 2019 -Scheduled to openin April 2020

Scheduled to openin June 2020

Ooedo-Onsen Monogatari
Nanki Kushimoto

Ooedo-Onsen Monogatari
Hotel Kisoji

Ooedo-Onsen Monogatari
TAOYA Shima

Ooedo-Onsen Monogatari
Amakusa Hotel Kameya

Saikaibashi Corazon Hotel

Yubae-no-yado Shiomi-so(Higashi Muro County,
Wakayama Prefecture)(Kiso County,
Nagano Prefecture)(Toba City, Mie Prefecture)(Kamiamakusa City,
Kumamoto Prefecture)(Sasebo City,
Nagasaki Prefecture)(Murakami City,
Niigata Prefecture)(Gero City, Gifu Prefecture)

Some of the other facilities of the Ooedo Onsen Monogatari GroupTokyo Odaiba
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)

Ooedo Onsen Reit Investment Corporation 20

External Growth Strategy (2): Pipeline of Properties Other Than Those from the Sponsor
Work on obtaining information on the availability of many types of properties including hotels in urban
areas and accommodation facilities targeting inbound customers

Categories of focus for the time being■ Properties located in urban areas (ordinance-designated cities and core cities)■ Various types of accommodation facilities including small and medium ones
■ Properties such as entertainment, amusement and spa facilities located in urban and suburban areas■ Various accommodation and resort facilities able to take in inbound tourism demand<Property information (excluding sponsor properties) in the 7th period (from June 1, 2019 until November 30, 2019)>
Ordinance-designated cities

Core cities

Other

Total

Lodging

3

3

19

25

Other
(day trips, etc.)

4

1

1

6

Other lodgings

105

17

18

140

Entertainment, Amusement

0

0

1

1

Sports, beauty,
health promotion facilities

0

0

1

1

112

21

40

173

Onsen/Spa

Total

Ooedo Onsen Reit Investment Corporation 21

External Growth Strategy (3)Considering utilization of a variety of bridge funding.
Expecting an increase in the number of deals for which preferential negotiation rights are secured＜By source＞<Methods for acquiring properties>
1.2%

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

23.1%
53.2%
11.6%

<Progress of new acquisitions>

Bridge funding
by a third party
Developers
Financial Instisutions
Real Estate Brokers
OthersPreferential
negotiation rights for
direct negotiations
with the sellerCollaboration with operators
Acquisition in sync with the financing period of
the Investment Corporation

Submission of LOI
completed

Due diligence/negotiations underway

Final phase of acquisitions(including bridge funding)

Total

Lodging

0

0

2

2

Other
(day trips, etc.)

0

1

0

1

Other lodgings

5

2

4

11

Entertainment, Amusement

2

1

0

3

Sports, beauty,
health promotion facilities

0

1

0

1

Total

7

5

6

18

Onsen/Spa(Note) The number of properties as of January 22, 2020 is presented. The Investment Corporation has preferential negotiation rights to some of these properties.
However, the Corporation may not be able to or is not obligated to acquire such properties.

Ooedo Onsen Reit Investment Corporation 22

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

1. Leasing and rent structure In addition to the leasing structure focusing on stability in the sponsor properties, variable rent is introduced in some properties
with future upside potential. The basic strategy is “based on stability + partial variable.” Utilize variable rent structure more in the future according to the scale expansion of portfolio and an improvement in the degreeof diversificationof risks.
Lease conditions for properties master-leased to the Ooedo-Onsen Monogatari Group as of November 30, 2019
Contract period:

20 years

Modified GOP (Note)

Non-cancellation period:

5-7 years
Rent revision:every

3 years

Primary rent
Fixed rent component

Approximately 93％

Secondary rent
Variablerent
component

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

Approximately 7％

 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(Note) Modified GOP is a sum calculated by deducting from the individual facility’s GOP arising during the modified GOP calculation period the property-related costs borne by the tenant(including, but not limited to, taxes and public charges, non-life insurance premiums, and land rent; however, the sum corresponding to the secondary rent is not included).

Ooedo Onsen Reit Investment Corporation 23

Internal Growth Strategy (2)Consideration of measures to increase profits in the short and medium to long term

2. Improvement in the performance of facilities andthe use of variable rent in the medium to long term Improvement in the performance of facilities in cooperation with tenants・Continue cooperation in and proposals for various measures to increase the attractionof customers at sponsor properties

Secure land rent revenue and contribute to
renewable energy by leasing the land of
Reoma Resort

 Incorporation of new growth elements such as new markets andnew customers by acquiring properties other than those of the sponsor
・Inbound tourism market and facilities for utilizing leisure time in urban areas

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

・Measures to increase competitiveness that share the perspective with tenants andadditional investments in new functions
・Effective utilization of unused land and buildings
・Pursuit of significant value increasing through investment in extension and an increasein the number of rooms in the medium to long term

<Measures to increase profits>
Upside of rent revenue throughan improvement in the performance oftenants
Raising the level of rent revenue
through value-increasing investment

Land of approx. 86,000 ㎡ (including parking lots andvacant zoo) is planned to be leased to a photovoltaic
business operator.
Construction is assumed to begin in April 2020 and becompleted in March 2021.

Short term

Medium to long term

LimitedMedium to high potential

Currently, stability is the basis for the portfolio

Use of variable rents by acquiring
various types of properties

LimitedHigh potential

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

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

Ooedo Onsen Reit Investment Corporation 24

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>

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

Capitalexpenditure
Depreciation

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 25

Ⅴ. Investment Areas and Target Strategies

Ooedo Onsen Reit Investment Corporation 26

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 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)

12000012,00090000

Ratio of visits to onsen and spa facilities by age
(%)
80.0
70.0

Seniors
Male

60000
4,000

30000

0

0
FY2010FY2012FY2014FY2016

Source: Onsen Use (2010 – 2017), Nature Conservation Bureau, Ministry of the Environment

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

32.9%
31.8%
25.7%
22.8%
20.9%
20.1%
17.6%
17.4%
17.3%
17.0%
0%

20%

42.3%
41.9%

49.8%
49.8%

40%

Source: “Annual Report on the Tourism Trends Survey 2019” (October 2019)

Families

60.0
50.0

29.7

40.0

8,000

Female

30.0

19.4

31.5

20.0
10.0
0.0

20.0

19.8

10's

20's

28.1

36.8

29.2

30.7

26.0

30's

40's

27.2

35.0

36.5

33.6

50's

60's

70's

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

・The number of accommodation facilities’ guests has beenstable since FY2010 according to the Onsen Use Survey
by the Ministry of the Environment.
・Families and the elderly have been creating a firm
customer segment and demand is also strong among people
in their 50s.

60%

・“Onsen” collected the largest percentage among types of trip
desired according to the Annual Report on the Tourism
Trends Survey.
Ooedo Onsen Reit Investment Corporation 28

Market Environment (2) : Future Leisure Market (a)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%

59.0%

63.0%

57.7%

1,500

57.4%

0%

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

0.4%

1,200

7.7%

900

40%
20%

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

32.7%

37.0%

1980

1990

41.0%

2000

Services (Experiences)

42.3%

2010

25.8%

600

42.6%

300
0

2017

Goods (Products)

49.4%

2002

2006

2010

2014

2018

Source: “Annual Report on the Tourism Trends Survey 2019”

Source: A graph prepared by the Asset Manager based on
Implementation ofConsumer Policies in 2017by the Consumer Affairs Agency

13.3%

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 29

Market Environment (3) : Future Leisure Market (b)Inbound tourism demand and needs for experience-based consumption are expected to increase further
in the medium to long term
Locally designed experience tours desired
during the stay in Japan

Trends in the number offoreign tourists visiting Japan(thousand)
80,00070,00060,00060,00032%

50,00030,00019,73720,0006,218

8,367 10,363

24,039Experience and observation of Japanese culture
Nature guided tour
Cooking experience

40,00040,00010,00020%

14%28,691 31,191

Cityscape guided tour
Onsen experience tour

10%

13,413

13%

Other

11%

0
2011
2012
2013
2014
2015
2016
2017
2018
2020
2030
Source: Prepared by the Asset Manager based on data in the “Statistics on the numberof foreign visitors to Japan” by the Japan National Tourist Organization (JNTO)
and the “Objectives and related measures in the current basic plan and the tourism
vision” (October 27, 2016) by the Japan Tourism Agency

Composition of spendingby foreigners travelling in Japan
2015

+3.4％

Food and drink expenses
Entertainment service expenses+3.1％

・The consumption structure of inbound tourism is changing,with tourists spending more on services instead of products

+0.8％
-0.3％

Transport expenses
Shopping expenses
Others0.0%

・The number of inbound customers increased five times
in 2018 from the level in 2011, and 60 million people isthe target for 2030

2018

Accommodation expenses

Source: Prepared by the Asset Manager based on data in the “DBJ and JTBF survey on intentionof foreign tourists visiting Japan from Asia, Europe, the United State and Australia (Fiscal
2019)” by the Development Bank of Japan Inc. and the Japan Travel Bureau Foundation

-6.4％
-0.3％
10.0%

20.0%

30.0%

40.0%

50.0%

Source: A graph prepared by the Asset Manager based on surveys on the trend of
consumption by foreigners visiting Japan by the Japan National Tourism
Organization (2015 and 2018)

・Experience and observation tours of Japanese culture are
the most popular
Ooedo Onsen Reit Investment Corporation 30

Market Environment (4) : Future Leisure Market (c)Attempt to provide tourism in Japan and experience-based consumption, and their high potential
Development of new destinations as seen in the Projectfor Promoting Formation of Wide-Area Round-Trip Routes）

Certified on June 12, 2015（(1) "Hokkaido - Route to Asian Natural Treasures"（"Explore The Wonderland, Eastern Hokkaido

Number of passengers at airports (2013 - 2018)

Takamatsu Airport+250.2%(5) "The Inland Sea, Setouchi"(Setouchi Tourism Promotion Organization)"Promotional Organization)(6) "Spiritual Island: Shikoku Henro"（Organization for Promotion of Tourism in Shikoku)(2) "Exploration to the Deep North of Japan"(Tohoku Tourism Promotion Organization)(7) "Extensive sightseeing route on ‘Onsen Island,’ Kyushu"(Kyushu Tourism Promotion Organization)(3) "Shoryudo"(Central Japan Tourism Association)

Tokyo International Airport (Haneda)+126.0%Kansai International Airport+91.6%(4) "The Flower of Japan，Kansai"

Chubu Centrair International Airport(Union of Kansai Governments, Kaisai Economic+41.2%

Federation, Kansai Tourism Bureau)

Certified on June 14, 2016 （addition）（）

Narita International Airport(8) "Amazing Northernmost Japan, Hokkaido route"("Amazing Northernmost Japan, Hokkaido route"+21.4%
0%(8)

Promotional Organization)(9) "The Wider Kanto Route, “Around Tokyo”"(Kanto Tourism Wide Area Cooperative Business

50% 100% 150% 200% 250% 300%

Source: Prepared by the Asset Manager based on data in the “Ranking of the Numberof Flights by Airport in Fiscal 2013” and “Ranking of the Number of Flights
by Airport in Fiscal 2018” by the Ministry of Land, Infrastructure, Transport
and Tourism.

(1)

Promotion Organization)(10) "Route Romantique San'in"(San'in Tourism Organization)(11) "Visit Our Exciting Ryukyu Islands in The Pacific Ocean"（"Visit Our Exciting Ryukyu Islands in The Pacific Ocean"(2)・Discovery of tourism resources throughthe provision of experience-based consumption

Formation Promotion Organization)

(10)

(4)
(5)
(11)

(7)

(6)

(3)

(9)

Source: Prepared by the Asset Manager based on data in the “Project for Promoting Formation of Wide-Area
Round-Trip Routes” by the Japan Tourism Agency.

・Inbound tourists who use local airports show
an upward trend
Ooedo Onsen Reit Investment Corporation 31

Future Growth Targets
Enhancement of profitability and financial strength through the expansion of AUM(billion yen)

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

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

200

Target AUM
five years later:
175 – 220 billion yen

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

100

External properties:
100 – 120 billion yen

100

Sponsor properties:
75 – 100 billion yen

50

7th period(ended Nov. 30, 2019)

DPU

2,415 yenAround 2,500 yen

Around 2,600 – 2,800 yen

Marketcapitalization

22.5 billion yen

Around 50 billion yen

Around 100 billion yen

LTV

40.3％

(acquisition price basis)

Around 42 – 44%(Note 1) The figures above are targets as of January 22, 2020, and are not guaranteed.
(Note 2) The market capitalization in the 7th period is calculated based on the closing price as of November 29, 2019.

Ooedo Onsen Reit Investment Corporation 32

Ⅵ. Appendix

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 andDiscount Rate
Direct Cap Rate
Term inal Cap Rate
Book valuePricelosses
6th period 7th period
6th period 7th period
6th period 7th period(m illion yen) 6th period 7th period(m illion(m illion
Changevaluation May 31,
valuationyen)
May 31,
Nov. 30,
May 31,
Nov. 30, valuation
May 31,
Nov. 30,
Nov. 30,
yen)
2019
2019
2019
2019
2019
2019
2019
2019

S-1

Ooedo-Onsen Monogatari
Reoma Resort

10,37910,343

8,910

8,910

-

-1,433

6.0%

6.0%

-

5.8%

5.8%

-

6.2%

6.2%

-

S-2

Ooedo-Onsen MonogatariIse-shima

3,656

3,441

3,840

3,840

-

+398

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-3

Ito Hotel New Okabe

2,657

2,638

2,820

2,820

-

+181

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-4

Ooedo-Onsen Monogatari
Atami

2,997

2,857

3,220

3,220

-

+362

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

1,910

1,840

2,030

2,030

-

+189

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-6

Ooedo-Onsen Monogatari
Awara

1,901

1,895

2,000

2,000

-

+104

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

1,222

1,197

1,270

1,270

-

+72

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-8

Ooedo-Onsen Monogatari
Ikaho

1,299

1,293

1,380

1,380

-

+86

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

819

845

862

862

-

+16

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

1,637

1,634

2,570

2,570

-

+935

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-11

Ooedo-Onsen Monogatari
Kounkaku

1,040

1,036

1,220

1,220

-

+183

5.5%

5.5%

-

5.3%

5.3%

-

5.7%

5.7%

-

S-12

Kinugawa Kanko Hotel

3,870

3,723

6,140

6,140

-

+2,416

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-13

Ooedo-Onsen Monogatari
Kinosaki

2,084

2,128

2,650

2,650

-

+521

5.4%

5.4%

-

5.2%

5.2%

-

5.6%

5.6%

-

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

1,230

1,249

1,480

1,480

-

+230

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

36,70536,12440,39240,392

4,267

－

－

－

－

－

－

Total

－

－

－

－

Ooedo Onsen Reit Investment Corporation 34

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㎡
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.

Ooedo Onsen Reit Investment Corporation 35

Introduction of Properties (1)S-1：Ooedo-Onsen Monogatari Reoma Resort 〈Hotel Reoma-no-mori〉
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

97.2%

85.5%

92.2%

98.3%

84.2%

85.3%

80.6%

89.1%

95.4%

87.1%

86.6%

93.7%

89.6%

85.4%

88.8%

+3.4%

ADR (yen)

33,03230,45327,22432,67032,986

31,76025,00033,341

51,371

26,722

26,62828,691

31,911

31,16632,402+1,236

RevPAR (yen)32,107

26,037

25,10032,114

27,77427,091

20,15029,70649,007

23,27423,05926,88328,592

26,61528,772+2,157

311

257

230

309

258

272

204

278

470

219

232

264

3,309

1,591

1,670

+78

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-2：Ooedo-Onsen Monogatari Ise-shima
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

98.7%

94.5%

98.3%

93.8%

91.2%

91.3%

87.6%

93.4%

95.6%

99.4%

86.7%

96.5%

93.9%

93.8%

93.2%

-0.6%

ADR (yen)

34,47432,26930,98438,09532,56432,40728,78731,764

46,98930,60729,25031,58833,41734,50033,324-1,176

RevPAR (yen)34,02530,49430,45735,73329,69829,58725,217

29,66744,92130,42325,35930,482

31,37832,361

31,057-1,304

104

92

84

108

89

90

77

90

131

93

80

92

1,136

594

566

-28

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-3：Ito Hotel New Okabe
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

96.0%

92.4%

99.1%

99.5%

95.1%

93.7%

93.9%

92.9%

96.8%

95.6%

83.3%

90.9%

94.1%

88.2%

92.2%

+4.0%

ADR (yen)

31,45830,57327,27531,50428,762

28,86022,67327,60444,38424,201

24,406

26,62529,17130,16028,537-1,623

RevPAR (yen)30,19928,24927,02931,34627,352

27,041

21,28925,64442,96323,136

20,33024,20227,44926,601

26,311

-290

122

114

98

121

104

105

84

99

160

87

83

97

1,281

631

613

-18

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 36

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:

2,800㎡
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 37

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

2018

Cumulativ e
total

Previous
corresponding
periodcumulative total

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

98.0%

99.4%

99.8%

99.5%

99.3%

97.6%

98.9%

94.5%

98.7%

96.7%

81.2%

94.3%

96.5%

97.3%

94.0%

-3.3%

ADR (yen)

34,971

31,25031,42535,712

32,57132,752

28,04632,43250,09830,37129,73531,37233,51233,22433,901+677

RevPAR (yen)34,271

31,062

31,36235,53332,34331,96527,73730,64849,44629,36824,14429,58332,33932,326

31,866

-460

93

85

78

98

85

87

75

85

136

80

69

81

1,057

528

528

+0

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

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

2018

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

93.5%

86.8%

96.6%

99.2%

87.2%

86.7%

88.2%

87.9%

97.0%

91.7%

76.9%

90.0%

90.1%

84.0%

88.6%

+4.6%

ADR (yen)

27,704

27,214

24,67827,14026,251

26,826

21,74731,41849,457

22,82922,82824,56527,97430,50629,325-1,181

RevPAR (yen)25,90323,621

23,83826,922

22,89023,25819,18027,61647,97320,934

17,554

22,10825,20425,62525,981

+356

57

52

49

59

49

52

43

60

103

45

40

49

664

337

343

+5

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-6：Ooedo-Onsen Monogatari Awara
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

83.9%

57.2%

74.6%

93.5%

86.2%

71.2%

77.7%

87.5%

98.0%

83.5%

80.0%

92.5%

82.2%

89.6%

86.6%

-3.0%

ADR (yen)

31,76633,39428,78628,99528,51329,75825,147

29,14041,60425,99925,302

27,462

29,78930,22429,550-674

RevPAR (yen)26,651

19,101

21,474

27,11024,57821,187

19,53925,497

40,771

21,70920,241

25,402

24,48627,08025,590-1,490

98

71

72

100

89

79

73

92

141

78

77

92

1,067

599

555

-43

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 38

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 39

Introduction of Properties (3)S-7：Ooedo-Onsen Monogatari Kamoshika-so
2018

2019

Cumulativ e
total

Previous
corresponding
periodcumulative total

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

78.9%

68.9%

68.5%

89.4%

77.6%

76.9%

82.9%

87.3%

100.0%

75.9%

73.4%

95.7%

81.4%

92.2%

85.9%

-6.3%

ADR (yen)

26,53525,79225,00725,941

27,15228,36523,22625,11935,43024,886

27,07727,477

27,051

27,951

27,534-417

RevPAR (yen)20,936

17,77017,12923,19121,06921,812

19,25421,92835,43018,88819,874

26,29522,01925,77023,651-2,119

45

39

35

50

44

47

41

47

76

40

46

58

574

335

310

-24

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-8：Ooedo-Onsen Monogatari Ikaho
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

97.3%

87.0%

95.4%

99.3%

98.8%

98.7%

99.7%

99.7%

99.8%

99.6%

95.9%

99.2%

97.5%

97.4%

99.0%

+1.6%

ADR (yen)

32,38528,40525,85729,29831,672

31,072

27,632

28,92741,85427,97128,802

31,86630,56531,022

31,227+205

RevPAR (yen)31,51024,712

24,66729,092

31,291

30,66827,54928,84041,77027,85927,621

31,61129,80030,21530,914

+699

44

35

31

41

43

43

38

41

58

38

40

45

503

256

262

+6

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-9：Ooedo-Onsen Monogatari Kimitsu-no-mori
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

97.4%

93.4%

96.3%

97.9%

97.2%

94.5%

88.0%

94.3%

98.6%

22.8%

29.4%

83.8%

82.8%

94.4%

69.6%

-24.8%ADR (yen)

27,68027,41225,153

27,187

26,05026,227

23,60525,57135,372

23,231

21,84924,14026,72826,73826,842+104

RevPAR (yen)26,96025,602

24,222

26,61625,32024,784

20,772

24,11334,876

5,296

6,423

20,22922,13025,24018,682-6,558

49

48

39

49

46

47

38

44

63

9

13

38

491

278

208

-70

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 40

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 41

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

2018

Cumulativ ee
Cumulativ
total
total

Previous
Previous
corresponding
corresponding
periodperiodcumulative total
total
cumulative

7th period
period7th
cumulative
cumulative
Total
Total

ChangeChange

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

91.0%
94.4%

73.6%
80.9%

92.5%
88.0%

100.0%
99.8%

93.2%
98.3%

98.5%
95.9%

86.7%
95.6%

96.4%
95.3%

99.1%
99.9%

93.1%
99.5%

90.8%
97.1%

97.0%
99.4%

92.6%
95.4%

92.5%
91.2%

93.9%
97.8%

＋1.4%
+6.6%

ADR (yen)

34,30532,91332,09032,65831,26230,68733,216
37,68532,27630,59035,37828,35827,58324,46027,83728,22337,73043,03429,20026,57333,624
26,41034,80931,16232,54031,12533,96930,50931,91930,092-2,050-417

RevPAR (yen)31,21731,06923,61826,42028,91727,00433,216
37,60930,08130,06934,847
27,19523,914
23,383

26,83426,89637,39042,99027,18526,44030,53025,64433,76430,97530,132
29,69331,421
27,82429,971
29,429-1,450+1,605

109
120

83
103

92
93

116
142

102
112

119
105

83
89

95
104

130
161

92
99

106
101

114
119

1,247
1,353

654
638

622
674

-31
+36

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-11：Ooedo-Onsen Monogatari Kounkaku
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

89.5%

74.6%

78.6%

81.2%

66.8%

71.9%

81.0%

77.8%

88.2%

76.8%

84.7%

84.4%

79.7%

85.4%

82.2%

-3.2%

ADR (yen)

27,10625,40324,93424,191

23,90524,02821,681

22,27426,604

22,69926,607

26,37824,73824,39324,478+85

RevPAR (yen)24,25918,95019,59819,643

15,96817,276

17,561

17,32923,464

17,432

22,53622,263

19,716

20,831

20,120

-711

106

81

76

84

63

71

73

71

92

69

94

96

981

511

498

-13

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-12：Kinugawa Kanko Hotel
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

77.9%

66.2%

66.9%

87.1%

83.4%

75.9%

80.9%

84.0%

99.6%

89.4%

80.8%

96.3%

82.4%

89.6%

88.5%

-1.1%

ADR (yen)

33,727

33,63926,901

28,732

29,861

31,17325,557

26,10938,55927,415

29,10031,34330,32832,16630,013-2,153

RevPAR (yen)26,273

22,26917,99625,02524,904

23,66020,67521,931

38,40424,50923,51230,18324,99028,82026,561-2,259

189

154

118

167

165

156

146

150

243

163

164

207

2,027

1,192

1,075

-117

Sales (million yen)

Ooedo Onsen Reit Investment Corporation 42

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 43

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

2018

Cumulativ e
total

Previous
corresponding
periodcumulative total

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

94.4%

80.9%

88.0%

99.8%

98.3%

95.9%

95.6%

95.3%

99.9%

99.5%

97.1%

99.4%

95.4%

91.2%

97.8%

+6.6%

ADR (yen)

32,91332,65830,687

37,68530,59028,35824,46028,22343,034

26,573

26,41031,162

31,12530,50930,092-417

RevPAR (yen)31,06926,42027,00437,60930,06927,19523,38326,89642,99026,44025,64430,97529,69327,82429,429+1,605

120

103

93

142

112

105

89

104

161

99

101

119

1,353

638

674

+36

Cumulativ e
total

Previous
corresponding
periodcumulative total

Sales (million yen)

S-14：Ooedo-Onsen Higashiyama Grand Hotel
2018

2019

7th period
cumulative
Total

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Room occupancy rate

81.5%

64.9%

75.6%

75.5%

80.6%

73.2%

87.6%

80.5%

91.7%

86.1%

85.8%

91.3%

81.2%

88.9%

87.1%

-1.8%

ADR (yen)

30,45828,20526,49727,25027,71930,37826,03525,293

31,953

26,221

28,08628,211

28,06528,432

27,719-713

RevPAR (yen)24,82318,30520,031

20,573

22,341

22,23622,806

20,36029,30022,57624,09725,75622,78825,27624,143-1,133

121

85

85

96

98

99

102

95

130

99

115

120

1,248

691

662

-29

Cumulativ e
total

Previous
corresponding
periodcumulative total

7th period
cumulative
Total

Sales (million yen)

S-1：Ooedo-Onsen Monogatari Reoma Resort 〈New Reoma Resort〉
2018

2019

Change

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Number of guests

59,66737,92426,261

46,61049,62675,751

36,983

53,105

118,893

36,502

40,72145,221

627,264

344,840

331,425-13,415

Sales (million yen)

210

144

90

190

201

298

130

218

496

145

147

160

2,434

1,364

1,298

-65

Ooedo Onsen Reit Investment Corporation 44

Financial Indices
Indices

6th period(May 31, 2019)

7th period(Nov. 30, 2019)

Ordinary income

560 mn yen

566 mn yen

Net income

559 mn yen

565 mn yen

Depreciation

427 mn yen

433 mn yen

CAPEX

184 mn yen

178 mn yen

Total assets

38,782 mn yen

38,640 mn yen

Total net assets
BPS (Total net assets/unit)

21,204 mn yen

21,207 mn yen

90,097 yen

90,110 yen

Unit price (End of each period)

85,600 yen

95,900 yen

235,347 units

235,347 units

562 mn yen

568 mn yen

2,390 yen

2,415 yen

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

5.6%
987 mn yen
4,195 yenCalculation formula

5.0% DPU (annualized)/Unit price as of end of period
998 mn yen Net income + Depreciation－profit or loss on sale of real estate
4,244 yen

10.2x

11.3x Unit price as of end of period/FFO per unit (annualized)

PER

18.0x

20.0x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PBR

1.0x

1.1x Unit price as of end of period/Net assets per unit

ROA

1.4%

1.5% Ordinary income/Average of total assets during the period

2.9%

2.9%

2.6%

2.7% Net income/Average of total net assets during the period

5.3%

5.3%

Annualized
ROE
Annualized
NAV

25,217 mn yen

NAV per unit
NAV multiple

107,149 yenInterest-bearing debt

15,754 mn yen

0.8x

25,474 mn yen Total net assets + Total appraisal value - Total book value - Total liabilities
108,243 yen
0.9x Unit price as of end of period/NAV per unit
17,433 mn yen

LTV (book value basis)

40.6%

40.3% Interest-bearing debt/Total assets

LTV (appraisal value basis)

36.8%

36.3% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)

Operating days

182 days

183 days

Ooedo Onsen Reit Investment Corporation 45

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)
7th period

6th period(thousand yen)
7th period

6th period(period ended May 31, 2019)(period ended May 31, 2019) (period ended Nov. 30, 2019)(period ended Nov. 30, 2019)

Liabilities

AssetsCurrent liabilities

Current assets
Cash and deposits

2,001,208

2,228,615

Operating accounts payable

17,426

92,949

Short-term loans payable

350,000

340,000

Prepaid expenses

136,232

126,984

Other

66,727

6,942

Total current assets

2,204,168

2,362,543

Non-current assets

Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures

23,965,085

66,854

7,048

4,746,616

6,873,067

Long-term loans payable

11,463,000

9,191,620

600

Tenant leasehold and security deposits

1,230,724

1,230,706-61

Asset retirement obligations

555

538

Total non-current liabilities

2,620

3,498

24,219,777
10,97910,979-508-877

10,47010,101600-44

11,988,187

36,221,067

35,966,652

Non-current liabilities

Total liabilities

157,802

157,802

3,754

2,951

161,556

160,754

16

Long-term prepaid expenses

185,296

140,673

Lease and guarantee deposits

10,08910,089195,399

150,780

36,578,023

36,278,186

38,782,191

38,640,729

138,156

12,831,479

10,560,482

17,578,095

17,433,549

20,653,023

20,653,023-8,643-11,467-8,643-11,467

20,644,379

20,641,555

559,716

565,624

Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital

capitalUnitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)

12

137,754

Net assets

Total deduction from unitholders'

Investments and other assets

Total assets

Total current liabilities

Allowance for temporary difference

Intangible assets

Total investments and other assets

261,849

259,137

Other

11,988,130

Total non-current assets

42,933

Advances received-758

Deferred tax assets

950

15,234-2,358,917

2,740

Software

10,694866

26,324,003-487

Total intangible assets

7,508-1,926,166

2,133

Leasehold right

90,011

Accrued expenses

26,145,944

Tools, furniture and fixtures, net
Total property, plant and equipment

6,026,630

87,838Accured consumption taxes

Accumulated depreciation
Land

3,941,750

Accounts payable - other
Income taxes payable

Property, plant and equipment
Buildings

Current portion of long-term loans payable

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

559,716

565,624

21,204,095

21,207,179

21,204,095

21,207,179

38,782,191

38,640,729

Ooedo Onsen Reit Investment Corporation 46

Statement of Income(thousand yen)

Operating revenue
Lease business revenue
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
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Other
Total non-operating expenses
Ordinary income

6th period

7th period(from December 1, 2018 to May 31, 2019)(from June 1, 2019 to November 30, 2019)

1,434,986
1,434,986

1,440,167
1,440,167

548,074
126,075
1,751
17,2333,600
39,245735,980
699,005

555,661
125,812
1,738
17,0603,600
39,393
743,266
696,901

10
10

10
10

62,35275,774500
138,626
560,389

64,25765,642500
130,400
566,511

Subsidy income

11,250-Total extraordinary income

11,250-

11,250-Extraordinary income

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

11,250-

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

560,389867
5
873
559,516
199

566,511952-4
948
565,562
61

Unappropriated retained earnings(undisposed loss)

559,716

565,624

Total extraordinary losses

Ooedo Onsen Reit Investment Corporation 47

Debt Status
List of lenders(as of November 30, 2019)
Lender

Short
term

Long
term

Balance(mn yen)Interest rate(%)

Drawdown date

Repayment date

Security

Sumitomo Mitsui Banking Corporation

340

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

May 31, 2019

May 29, 2020

Unsecured and unguaranteed

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

3,606

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

September 1, 2016

May 29, 2020

Unsecured and unguaranteed

Sumitomo Mitsui Banking Corporation

464

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

September 1, 2016

May 31, 2023

Unsecured and unguaranteed

Sumitomo Mitsui Banking Corporation
The Toho Bank, Ltd.
The Nomura Trust and Banking Co., Ltd.
The Bank of Fukuoka, Ltd.
The Shinwa Bank, Ltd.

2,194

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

December 4, 2017

November 30, 2020

Unsecured and unguaranteed

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

2,345

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

December 4, 2017

November 30, 2021

Unsecured and unguaranteed

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

3,303

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

May 31, 2019

May 31, 2022

Unsecured and unguaranteed

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

3,303

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

May 31, 2019

May 31, 2023

Unsecured and unguaranteed

Total

15,558

Ooedo Onsen Reit Investment Corporation 48

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 September 1, 2018)

Address

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

Establishment

Financial Results(Feb. 2019)

Consolidated Net Sales: 48,761 million yen
Consolidated Total Assets: 77,663 million yen
Net Assets: 21,615 million yen Reinvigorating onsen ryokan, hotels, spa-related facilities, theme parks around theDecember 5, 2017 (founded in November 2001)

country

Businesses

No. of Employees

1,315 (as of February 28, 2019, excluding fixed-term employees)*The total number of employees on a group-wide basis

Representative

Representative Director Mitsumasa Morita

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

culture theme. As of Feb. 28, 2019, we operate 34 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
scheduled to open

Scheduled to open
Saikaibashi Corazon Hotel,
Yubae-no-yado Shiomi-so

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

Ooedo-Onsen
Monogatari
Hotel Kisoji

Ooedo-Onsen
Monogatari
Amakusa Hotel
KameyaSaikaibashi
Corazon Hotel

Ooedo-Onsen
Monogatari
Aizu

OdaibaOoedo-Onsen
Monogatari

Hotel New
Shiobara

Ooedo-Onsen
Monogatari
Minoh Kanko Hotel

40
30
20
10

6

9

12

18

20

30

24

25

27

27

27

End ofSep. 2012

End ofSep. 2013

End ofFeb. 2014

End ofFeb. 2015

End of Feb.
2016

32

34

End ofFeb. 2018

End ofFeb. 20190
End ofSep. 2007

End ofSep. 2008

End ofSep. 2009

End ofSep. 2010

End ofSep. 2011

End ofFeb. 2017

Ooedo Onsen Reit Investment Corporation 49

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 12 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)
3,500

Facilities acquired after 2016

REIT acquired assets

3,421
3,126

2,500

2,456

2,565

2,709

Ooedo-Onsen Monogatari

2,766

MasuyaOoedo-Onsen Monogatari

Kakeyu Fujikan Sakurakan

Ooedo-Onsen Monogatari

Yubae-no-yado
Shiomi-so

Ooedo-Onsen Monogatari

Kounkaku
Hotel Sohkan

Hotel Kisoji

1,500
FY2014FY2015FY2016FY2017FY2018FY2019

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Awara

Higashiyama Grand Hotel

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari
Yamashiro Onsen

Ooedo-Onsen Monogatari

Gero Shin-kan
Ooedo-Onsen Monogatari

Nagasaki Hotel Seifu
Ooedo-Onsen Monogatari

Beppu Seifu
Amakusa
Hotel Kameya(Spa-related facilities for day visits)

Hotel New Shiobara
Hotel Kinugawa Gyoen
Ooedo-Onsen Monogatari

Kamoshika-so
Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari

Ikaho
Hotel Shinko(Onsen theme park)
Tokyo Odaiba

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

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

Minoh Kanko Hotel
Ooedo-Onsen Monogatari

Nanki-kushimoto(Note) Includes facilities that are expected to be operated.

Ooedo-Onsen MonogatariIse-shima

Reoma Resort
Tenka-taihei-no-yu
Sumpu Yume Hiroba(Onsen theme park )Ooedo-Onsen Monogatari

Urayasu Mangekyo

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Nikko Kirifuri

Yamashitaya

Saikaibasi Corazon Hotel

Sendai Korona-no-yu

Aizu

Nagayama

KinosakiOoedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari(Onsen theme park)

Kimitsu-no-moriOoedo-Onsen Monogatari

Hotel Suiyotei
Ooedo-Onsen Monogatari Atami

Ooedo-Onsen Monogatari

Ito Hotel New Okabe

TAOYA Shima

Ooedo-Onsen Monogatari

Toi Marine Hotel

Ooedo Onsen Reit Investment Corporation 50

“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 51

“Ooedo Business Model” with Stable Operations and Sustainable Growth (2)High customer satisfaction and high room occupancy rates surpassing all other business categories

Ooedo-Onsen Monogatari Group hotel guest questionnaire(conducted from June 1, 2019 to November 30, 2019)＜Meal (breakfast and dinner)＞＜Overall satisfaction ＞

Trends in average monthly occupancy rates foreach type of accommodation facility
100%
90%
83.4%
80.4%
77.0%

80%
70%

62.9%
59.6%

60%
50%

＜Type of services inside the facility＞＜Onsen＞

40%

39.5%

30%
20%

2017/92018/1

2018/5

Ooedo Onsen REIT
Resort hotels

2018/92019/1City hotels
Ryokans

2019/5

2019/9Business hotels
Total

Source: Data on city hotels, business hotels, resort hotels, ryokan and all types ofaccommodation are compiled by the asset manager based on a statisticalsurvey on trips with accommodation conducted by the Ministry of Land,
Infrastructure, Transport and Tourism.
Very satisfied

SatisfiedUnsatisfied

Very unsatisfied

Fair

Ooedo Onsen Reit Investment Corporation 52

Unitholders Breakdown
Top 10 unitholders

Ratio by number of unitholders＜End of 6th fiscal period＞＜End of 7th fiscal period＞

19,447 unitholders

18,066 unitholders

Financial
institutions

Foreigncorporations
and individuals

Financial
institutions

Foreigncorporations
and individuals

Rank

Name

Number ofunits held

Ratio

1

Japan Trustee Services Bank, Ltd. (Trust Account)

22,6929.6%

2

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

21,6639.2%

3The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

10,713

4.6%

4

Ooedo-Onsen Mongatari Co., Ltd.

9,246

3.9%

5

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

6,607

2.8%

6

Ueda Yagi Tanshi Co., Ltd.

4,100

1.7%

7

MLI STOCK LOAN

3,047

1.3%

8

JPMorgan Securities Japan Co., Ltd.

3,010

1.3%

9

Morgan Stanley MUFG Securities Co., Ltd.

2,592

1.1%

10

DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO

2,521

1.1%

86,191

36.6%

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 53

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

Targets unitholders listed or recorded on Unitholders’ Registry
as of November 30, 2019 (record date), end of 7th 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

Ooedo Onsen Reit Investment Corporation 54

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

August2016(units)November
2016

February
2017

May
2017

August2017

November
2017

February
2018
VolumeAugust
May
2018
2018
Stock priceNovember
2018

February
2019

May
2019

August2019

November
2019

November
2018

February
2019

May
2019

August2019

November
2019

Relative comparison of investment unit price and TSE REIT index(yen)August2016

November
2016

February
2017

May
2017

August2017

November February
2017
2018
Stock priceAugust
May
2018
2018
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 55

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, anddisposition 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))(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 56

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.

⑥⑤

Ooedo Onsen Reit Investment
Corporation④

General Unitholders’ Meeting②(100% ownership)

Sumitomo Mitsui Trust Bank,
LimitedBoard of Directors
Asset Manager①

Ooedo Onsen
Asset Management Co., Ltd.

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

Subsidiary of Parent Company
of Asset Manager

Reoma Unity Co., Ltd.

③

Accounting and Tax Administrator

Reiwakaikeisha Tax Corporation⑤

Independent Auditor

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

Asset Custodian
Unitholders’ Registry Administrator
General Administrator(agency management)⑥

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 Sponsor Support Contract⑤ Asset Purchase and Sales Contract⑥ Asset Lease Contract

Ooedo Onsen Reit Investment Corporation 57

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 (1) No. 98032：12 (as of November 30, 2019)

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 58

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 59