Ooedo Onsen Reit Investment Corporation
Results of 8th Fiscal Period ended May 31, 2020

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

Table of Contents
Ⅰ. Investment Highlights

Financial Strategy

30

Impact of Novel Coronavirus Infectious Disease (COVID-19)

3

Investing Targets and Building of the Portfolio

31

Operating Results for the Entire Portfolio

4

Future Growth Targets

32

Increase/Decrease in Variable Rent

5

Financial Status

6

Ⅳ. Market Environment

Financial Results for the 8th Fiscal Period ended May 20207

Market Environment

Plan for Installation of Photovoltaic Power Generator on the Unused Landand so forth of Ooedo-Onsen Monogatari Reoma Resort

8

Priorities for the Time Being: Determining Risk and Building Defenses

9

Forecast for the 9th Fiscal Period ending November 2020

11

Appraisal Value

37

Forecast for the 10th Fiscal Period ending May 2021

12

Introduction of Properties

38

Changes in Key Indices13

Financial Indices48

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

14

Balance Sheet

49

Statement of Income

50

Debt Status

51

Ⅱ. Investment Results

34

Ⅴ. Appendix

Portfolio Data

16

Ooedo-Onsen Monogatari Group52

Operating Results of Individual Properties

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

Unitholders Breakdown

56

Unitholder Benefit Program

57

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

Track Record of Investment Unit Price

58

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

23

Governance Structure

59

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

60

External Growth Strategy

25

Overview of Asset Manager

61

Internal Growth Strategy

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

Ooedo Onsen Reit Investment Corporation 1

Ⅰ. Investment Highlights

Ooedo Onsen Reit Investment Corporation 2

Impact of Novel Coronavirus Infectious Disease (COVID-19)
A decline in domestic demand became apparent due to the stay-at-home voluntary self-control in Marchand many facilities temporarily closed through May
Operation of accommodation facilities
PropetyNo.

Room occupancy rate（%）

Property name

Closed period

February

March

April

May

Start

End

2020.4.26

2020.6.30

S-1

Ooedo-Onsen Monogatari Reoma Resort〈Hotel Reoma-no-mori〉

80.4

34.8

8.9

-

S-2

Ooedo-Onsen Monogatari Ise-shima

94.0

73.1

22.1

18.0

2020.4.23

2020.5.21

S-3

Ito Hotel New Okabe

96.3

68.1

23.2

-

2020.4.28

2020.6.30

S-4

Ooedo-Onsen Monogatari Atami

97.6

92.4

30.0

-

2020.4.25

2020.6.19

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

95.5

64.5

10.6

-

2020.4.14

2020.6.30

S-6

Ooedo-Onsen Monogatari Awara

85.0

55.7

10.7

-

2020.4.26

2020.6.30

S-7

Ooedo-Onsen Monogatari Kamoshika-so

62.0

52.3

5.4

-

2020.4.6

2020.6.30

S-8

Ooedo-Onsen Monogatari Ikaho

96.6

87.7

50.3

-

2020.4.29

2020.6.30

S-9

Ooedo-Onsen Monogatari Kimitsu-no-mori

99.2

91.5

46.3

-

2020.4.29

2020.6.30

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

87.9

84.4

20.9

-

2020.4.26

2020.6.19

S-11

Ooedo-Onsen Monogatari Kounkaku

97.1

53.7

19.0

-

2020.4.27

2020.6.30

S-12

Kinugawa Kanko Hotel

73.9

51.8

13.7

-

2020.4.25

2020.6.30

S-13

Ooedo-Onsen Monogatari Kinosaki

98.8

99.1

23.2

-

2020.4.26

2020.6.19

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

79.4

51.6

13.8

-

2020.4.29

2020.6.30

86.9

62.4

17.9

1.1

Total

＜Calculation period of variable rent＞
2019
Mar.

Apr.

May

Jun.
Jun.

Jul.

Aug.

2020
Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Jun.

Jul.

2021
Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Modified GOP
8th period ened May 2020
Modified GOP
9th period ending November 2020
Modified GOP
10th period ending May 2021

(Note) “GOP” refers to gross operating profit, which is the amount remaining after deducting expenses arising directly from managing each facility, such as labor expenses and general and administrative
expenses, from each facility’s sales. “Modified GOP” is the amount remaining after deducting real estate-related expenses for the property to be borne by the tenant (including, but not limited to,taxes and public charges, non-life insurance premiums and land and house rent, but excluding an amount equivalent to Secondary rent) from the GOP of each facility for the Modified GOP
Calculation Period. The same applies hereinafter.
Ooedo Onsen Reit Investment Corporation 3

Operating Results for the Entire Portfolio
Room occupancy rate declined sharply due to the impact of COVID-19 since March.
ADR decreased approx. 10% year on year
＜Cumulative comparison of 8th period and the same period of the previous year＞

Room occupancy rate：
86.7%

55.9%

Portfolio operating results
2019

2020

Cumulativ e
total

Previous
corresponding
period cumulative
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

86.2%

88.8%

96.5%

87.6%

83.4%

93.4%

84.7%

83.4%

86.9%

62.4%

17.9%

1.1%

72.6%

86.7%

55.9%

-30.8%ADR (yen)

25,08828,58941,675

26,62927,50929,27731,56029,70525,532

23,256

16,712

19,75728,96830,25727,220-3,037

RevPAR (yen)21,62525,387

40,21623,327

22,942

27,344

26,731

24,77322,187

14,511

2,991

217

21,03026,232

15,215-11,017

Sales (million yen)

1,173

1,356

2,101

1,217

1,266

1,477

1,461

1,350

1,145

762

156

11

13,481

8,351

4,888

-3,463(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 4

Increase/Decrease in Variable Rent
Variable rents for the 8th period linked to GOP of the period up to February 2020 were not significantly
affected by COVID-19, excluding three properties expected to result in zero in the first place(thousand yen)
PropetyNo.

7th period

8th period

Property name
Fixed

Variable

Total rent

Fixed

Variable

Total rent

Increase/decrease ofvariable rent

S-1

Ooedo-Onsen Monogatari Reoma Resort

315,257

29,317344,575

315,257

28,619343,877-697

S-2

Ooedo-Onsen Monogatari Ise-shima

108,056

7,294

115,351

108,056

7,104

115,161-189

S-3

Ito Hotel New Okabe

73,7809,481

83,26273,7808,559

82,340-922

S-4

Ooedo-Onsen Monogatari Atami

93,7168,214

101,930

93,716

7,628

101,344-585

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

54,5896,707

61,29754,5896,792

61,382

84

S-6

Ooedo-Onsen Monogatari Awara

65,7783,560

69,33865,7783,253

69,031-307

S-7

Ooedo-Onsen Monogatari Kamoshika-so

35,723

4,179

39,90335,723

3,663

39,386-516

S-8

Ooedo-Onsen Monogatari Ikaho

36,7595,030

41,78936,7594,826

41,586-203

S-9

Ooedo-Onsen Monogatari Kimitsu-no-mori

24,5902,950

27,541

24,590-24,590-2,950

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

74,9794,108

79,087

74,9794,027

79,006-80

S-11

Ooedo-Onsen Monogatari Kounkaku

42,103-

42,103

42,103-

42,103-

S-12

Kinugawa Kanko Hotel

174,418-

174,418

174,418-

174,418-

S-13

Ooedo-Onsen Monogatari Kinosaki

78,887

5,127

84,01578,887

5,308

84,196180

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel

51,7905,543

57,334

51,7906,043

57,833499

1,230,431

91,517

1,321,948

1,230,431

85,827

1,316,259-5,689Total

Ooedo Onsen Reit Investment Corporation 5

Financial Status
LTV decreased due to progress in scheduled repayments(40.0% on a book value basis and 35.9% on an appraisal value basis).
Amid uncertain prospects, refinancing in May was set for one year while avoiding additional risk premium.
From now on, longer terms will be targeted
LTV(book value basis)(%)

Ratio of long-term borrowings

Breakdown of lenders

LTV
40.0

LTV(appraisal value basis)

39.7

40.0

Number of syndicate lenders: 14
(%)
100.0

39.4

100.0

100.0

100.0

8th
May 2020(Actual)

9th
Nov. 2020(Forecast)

10th
May 2021(Forecast)

38.0
95.0
35.9
36.0

35.4
34.9

34.0

8th
May 2020(Actual)

9th
Nov. 2020(Forecast)

10th
May 2021(Forecast)<Breakdown of others, which stand at 23.0%>
The Bank of Fukuoka 3.1%

The First Bank of Toyama 3.0%

The Iyo Bank 3.0%

Fukoku Mutual Life Insurance 3.0%

The Shinwa Bank 3.0%

The Toho Bank 3.0%

The Tochigi Bank 3.0%

The Bank of Kochi 1.8%

90.0

Overview of maturity
Average remaining duration（million yen）
5,000

7th period: 1.9 years → 8th period: 1.7 years

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

8th

9th

10th

11th

12th

13th

14th

May-20Nov-20May-21

Nov-21

May-22

Nov-22

May-23

Ooedo Onsen Reit Investment Corporation 6

Financial Results for the 8th Fiscal Period ended May 2020
Revenue and profits increased from the forecasts due to insuranceincome from typhoons and a fall in SG&A expenses, despitea decline in variable rents. Distributions per unit increased 28 yen
from the forecast and decreased 87 yen from the previous period(thousand yen)
Item

Operating revenue

7th period

8th period（Actual）（Actual）

Component
ratio

Primary rent

1,440,167

Component
ratio

1,321,948

8th period(Forecast as ofJan. 21, 2020)

Difference

Difference

1,433,658-6,5091,427,268+6,3891,316,259-5,6891,317,622-1,3631,230,431

93.5%

1,230,431-

1,230,431-

Variable rent

6.9%

91,517

6.5%

85,827-5,68987,191-1,363

105,122+577

105,370-247

Others

13,673

12,276-1,396

4,275

・Increase in other operating revenue (Insurance revenue)
・Decrease in other operating revenue(Reoma solar power generation)
・Increase in tax and public charge
・Increase in other expenses (Repairs covered by insurance)・Decrease in selling, general and administration(IR-related expenses, etc.)

93.1%

104,545(thousand yen)・Decrease in variable rent

Lease operations revenue gain/loss

Fixed rent

Secondary rent

Main factors for increase/decrease from forecast (Note)+8,001

Lease operations
revenue gain/loss

884,506

867,329-17,176

867,731-401

Operating income

696,901

678,438-18,462

673,470+4,968Operating income
・Decrease in finance-related expenses, etc.

Ordinaly income-1,328-1,475565,562545,107-20,455

538,496+6,610

2,824

2,824

-

2,824

-

Total distribution

568,363

547,887-20,475

541,298+6,589Total units outstanding

235,347

235,347-

235,347

-

2,415

2,328

-87

2,300

+28

Operating income

12

12

-

12

-

Ordinaly income

4,244

4,178

-66

4,150

+28

Depreciation
CAPEX-12,375

1,306,040-500

433,409438,210+4,801

438,308-98

178,936

169,743-9,193

180,000-10,256(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.

-5,689・Increase in other expenses (Asbestos monitoring fee)

Net income

1,305,540+1,240+6,782・Increase in other expenses (Repairs covered by insurance)+6,782

1,317,915+4,968-1,396

539,496

NOI+5,370-3,552-20,231

per unit)-401・Increase in tax and public charge

546,279

FFO per unit (yen)-4,359・Decrease in other operating revenue (Insurance revenue)

566,511（Excess cash distribution-3,018(thousand yen)・Decrease in variable rent (Kimitsu-no-mori, etc.)

Ordinary income

DPU (yen)-2,000Main factors for increase/decrease
from previous fiscal period

・Increase in depreciation (due to capital expenditure)

Excess cash distribution-1,363+12,001

Lease operations revenue gain/loss
・Decrease in selling, general and administration(IR-related expenses, etc.)
・Decrease in selling, general and administration(Review of legal fees, etc.)
・Temporary increase in expenses
for General Unitholders’ Meeting
・Increase in finance-related expenses, etc.

Main financial indicators-4,801-17,176+2,586+1,382-5,689-18,462-2,332-20,231(million yen)

Total assets

38,327

Interest-bearing debt

15,319Total liabilities

17,143

Total net assets

21,183

LTV (book value basis)
NAV per unit

40.0%
108,678 yen

Ooedo Onsen Reit Investment Corporation 7

[Progress Report] Plan for Installation of Photovoltaic Power Generator on
the Unused Land and so forth of Ooedo-Onsen Monogatari Reoma Resort
Plan as of the previous presentation
 Unused land of Ooedo-Onsen Monogatari Reoma Resort, including the vacant lot of ex-zoo, and parking lots, will beleased to a photovoltaic business operator.
⇒ Initial schedule: Land lease will start in April 2020, and construction will be completed in March 2021.

 Land lease revenue of 2 million yen for the 8th period and 6 million yen for the 9th period was included in the forecasts.

Subsequent progress and current status
 The method of leasing the land has been changed to a leaseback after selling the land.
⇒ Failed to reach an agreement on the establishment of rights to the land, which are required for the business operator to procure funds.
⇒ The land will be leased back to the Investment Corporation to operate Ooedo-Onsen Monogatari Reoma Resort after being sold to the business
operator. The plan has been changed to the method of leasehold interests in land, and negotiations with multiple business operators are currently
underway.

 No land rent was received in the 8th period. Land rent revenue was reduced in forecasts for the 9th and subsequent
periods.
⇒ Assumed conditions currently in negotiation are expected to have a negligible impact on the Investment Corporation’s PL.

 Purpose and significance:- Contribution to the renewable energy business- Reduction of book value through sale of unused land and acquisition of leasehold interests in land,
leading to increased asset value Project land: 196,542.2 m2 including parking lots and vacant zoo
Ooedo Onsen Reit Investment Corporation 8

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

Current Condition

Weaknesses

Strengths

Risks in facility operation• Possibility of a decrease in
Many facilities that closed resumed
operation or temporary closuredue to the second and third waves operation in June or July 2020.
of COVID-19

Customers are careful or concerned about
the crowds from the model of attracting alarge number of customers and highoccupancy rates.

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

• Whether crowds can be avoided
or a low level of crowdedness
about which people feel safe canbe provided

Tenants are implementing a project for
COVID-19 measures, including foodservice with a new system.

Buffet-style dining cannot be provided
without safe and secure operation.

Potential standby demand will be high if
crowds where people feel safe becomes
possible through new developments in the
Ooedo model.

• Risks associated with industry
characteristics and portfolio

Early recovery beginning in the summer
is expected in view of domestic andregular customers comprising the
majority of guests.

Business of affordable, close-distance,
Concentration risk when the Ooedo-Onsenand short-term stays that will be the first
Monogatari Group is the only tenant.
to meet demand after recovery.

• Securing of fixed rent payment
which has accounted for over
90% of rent income

Confirmed sponsors’ intention topreferentially secure fixed rent
payment to REIT.

If the aggravation of conditions continues
Normally, approx. 50% of GOP,
after summer, it will be difficult to eliminate
a relatively low rent payment ratio +the risk of requests for a payment gracesponsor commitment.
period, reduction or exemption.

• Corporate strength of the OoedoOnsen Monogatari Group

Support of sponsoring shareholders andlenders has been confirmed.

Additional financial measures must be
The nationwide chain facility network
taken if the infection spreads or the period diversifies the risk of infection outbreak inis prolonged.
specific areas.

Risks in securing rent income

Ooedo Onsen Reit Investment Corporation 9

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

Current Condition

Weaknesses

Strengths

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

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

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

• Risk that funding conditions areaggravatedRefinancing in May was set to one year
amid the prospects of an uncertain
future as a result of the COVID-19 crisis,but no particular deterioration of
conditions has been observed.

Future business conditions and outlook ofrent income for tenants will affect theRelatively relaxed financial covenants anddiversified borrowers (syndicate).
financing conditions for the next
refinancing (November 2020).

• Real estate appraisal value and
LTV

Relatively low level of LTV (appraisal value
For the appraisal value for the 9th periodbasis) as a buffer.
Appraisal value for the 8th period (ended(ending November 2020), attention must be
May 2020) remained mostly unchanged
While many locations are outside cities,
paid to the emergence of cases, such as
from the previous period (down 0.4%).
the impact of COVID-19 is relatively large
stop-loss selling in the market due to theLTV (appraisal value basis) was 35.9%.
in urban areas with high population density
COVID-19 crisis.
and locations for inbound tourism.

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

Forecast for the 9th Fiscal Period ending November 2020
Because of the absence of land lease revenue of Reoma Resort,and an increase in property tax, distribution per unit decreased
58 yen from the forecast.
Revenue and profits fell from the previous period due to theabsence of variable rent and insurance revenue

Main factors for increase/decrease from forecast(thousand yen)(thousand yen)

Item

Operating revenue

8th period

9th period（Actual）（Forecast）

Component
ratio

Primary rent

1,433,658

Component
ratio

1,316,259

9th period(Forecast as ofMar. 23, 2020)

Difference

Difference

1,335,459-98,198

1,341,754-6,2941,230,431-85,827

1,230,431

-

93.5%

1,230,431

100.0%

1,230,431-

1,230,431-

Variable rent

6.5%

85,8270.0%--85,827--

Secondary rent

105,122

104,753-369

105,047-294

Others12,276275-12,001

6,275-

Lease operations
revenue gain/loss

867,329764,654-102,674

776,519-11,864

Operating income

678,438

578,179-100,259

590,485-12,306

Ordinary income

546,279

448,755-97,524

462,507

Excess cash distribution

545,107447,755-97,351

461,507-97,198

464,339-13,650

Total units outstanding

235,347

235,347-

235,347-

CAPEX

Main factors for increase/decrease
from previous fiscal period(thousand yen)・Absence of variable rent (Impact of COVID-19)-85,827

・Decrease in other operating revenue (Insurance revenue)-12,001

・Increase in tax and public charge-3,497

・Decrease in other expenses (Repairs covered by insurance)+4,359・Increase in depreciation (due to capital expenditure)

2,328

1,915

-413

1,973

-58

12

12

-

12

-

4,178

3,792

-386

3,856

-64

・Increase in selling, general and administration(Real estate appraisal fee)・Increase in selling, general and administration(IR-related expenses, etc.)

Operating income
・Decrease in finance-related expenses

Ordinaly income

438,210
169,743444,882
190,000-96,002+6,671+20,256

1,222,529
446,010
180,000-6,671+5,689450,689

1,209,537-13,752-13,752

547,887

1,305,540-1,446+2,188

Total distribution

Depreciation

Ordinaly income-12,306

・Decrease in expenses for General Unitholders’ Meeting-

NOI・Increse in finance-related expenses, etc.

-1,000・Decrease in asset management fees

2,824

FFO per unit (yen)Operating income-11,864-13,752-

per unit)

Lease operations revenue gain/loss-102,674

2,824（Excess cash distribution+1,127-6,000

Lease operations revenue gain/loss

2,824

DPU (yen)-6,550・Decrease in depreciation (due to capital expenditure)
・Increase in selling, general and administration(Real estate appraisal fee)

Fixed rent

Net income

・Decrease in other operating revenue(Reoma solar power generation)
・Increase in tax and public charge-12,992-1,127+10,000

Main financial indicators-1,105-3,778-100,259+3,308-97,524(million yen)

Total assets

37,995Interest-bearing debt

15,092

Total liabilities

16,911

Total net assets

21,083

LTV (book value basis)

39.7%

Ooedo Onsen Reit Investment Corporation 11

Forecast for the 10th Fiscal Period ending May 2021
Revenue and profits are expected to grow from the previous period due to a rise in secondary rent
associated with the increased property tax and a fall in finance-related expenses.
DPU is expected to increase 23 yen from the previous period(thousand yen)
Item

Operating revenue

9th period

10th period（Forecast）（Forecast）

Component
ratio

Primary rent

Component
ratio

1,230,431

Fixed rent

100.0%

Variable rent

0.0%

Secondary rent

1,335,459

Difference

1,343,452+7,992

1,230,431-

1,230,431

100.0%

1,230,431

-

-

0.0%

-

-

104,753

112,746+7,992

275

275

-

Lease operations
revenue gain/loss

764,654766,248+1,593Operating income

578,179

581,084+2,905

Ordinary income

448,755454,414+5,659Others

Net income
Excess cash distribution

447,7552,824

453,414
2,824+5,659-450,689

456,102+5,412

Total units outstanding

235,347

235,347

-

1,915

1,938

+23

12

12

-

3,792

3,834

+42

1,209,537

1,215,274+5,737

Depreciation

444,882

449,026+4,143

CAPEX

190,000

180,000-10,000（Excess cash distribution
per unit)

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

+7,992・Increase in other expenses (Asbestos monitoring fee)

-1,513・Increase in depreciation (due to capital expenditure)

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

Operating income
・Decrease in finance-related expenses

Ordinaly income

Total distribution

DPU (yen)

Main factors for increase/decrease
from previous fiscal period

Main financial indicators-4,143+1,593+991+2,905+2,754+5,659(million yen)

Total assets

37,822

Interest-bearing debt

14,906

Total liabilities

16,736

Total net assets

21,086

LTV (book value basis)

39.4%

Ooedo Onsen Reit Investment Corporation 12

Changes in Key IndicesDistributions per unit ended with 2,328 yen in the 8th period and are expected to be 1,900 yen level in the 9th
and 10th periods, considering the impact of COVID-19

7th period

8th period

9th period

10th period(November 2019)(May 2020)(November 2020)(May 2021)

ActualActualForecast

Forecast

DPU per unit

2,415 yen

2,328 yen

1,915 yen

1,938 yen

FFO per unit

4,244 yen

4,178 yen

3,792 yen

3,834 yen

LTV

40.3％

40.0％

39.7％

39.4％

(appraisal value basis)

36.3％

35.9％

35.4％

34.9％

NAV per unit

107,243 yen

108,678 yen

109,336 yen

110,490 yen(book value basis)

LTV(Note) Unrealized gain (Appraisal value – book value) were 4.3 billion yen at the end of the 8th fiscal period (up 0.1 billion yen from the end of the previous fiscal period).
LTV (on an appraisal value basis) for the 9th and 10th fiscal periods is based on the assumption that appraisal value will remain unchanged.

Ooedo Onsen Reit Investment Corporation 13

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

7th period

8th period

9th period

10th period(Nov. 2019)(May 2020)(November 2020)(May 2021)

5,000

4,244

－72

＋20

－24

－９

4,178

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

4,000

－436

3,792
+28

Depreciation
Lease
operation
revenues
gain/loss

3,000

+24

+6

+14

+17

+11

3,834

Depreciation FinanceLease
operation
relatedexpensesrevenues
gain/loss

Expenses Financefor General related
Unitholders’ expenses
Meeting

2,000

1,000

2,415

2,328

7th period(Actual)8th period(Actual)

1,915

1,938

9th period(Forecast)

10th period(Forecast)

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 14

Ⅱ. Investment Results

Ooedo Onsen Reit Investment Corporation 15

Portfolio Data (1)Appraisal values decreased slightly, excluding three properties (Nagasaki Hotel Seifu, Kounkaku and Kinosaki).
The unrealized gain (appraisal value – book value) increased to 4.39 billion yen(up 0.12 billion yen period on period) at the end of the 8th period
PropertyNo.

S-1

Property name

Ooedo-Onsen Monogatari Reoma Resort

Location

Kagawa Prefecture

Building age(years)28.9／29.2

Number of
rooms

Room
occupancy
rate(Note 1)

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

NOI
yield
(Note 2)After
depreciation
NOI yield

PML(Note 2)

241

49.9%

10,379

8,870

344

6.6%

5.0%

1.9／1.6％

65.4%

3,656

3,830

114

6.2%

3.4%

14.2%

60.9%

2,657

2,810

83

6.3%

4.2%

12.0%

(Note 3)S-2

Ooedo-Onsen Monogatari Ise-shima

S-3

Ito Hotel New Okabe

Mie Prefecture

40.2

83

Shizuoaka Prefecture

29.6

73

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

Shizuoaka Prefecture

46.4

76

68.3%

2,997

3,200

100

6.7%

4.5%

12.6%

S-5

Ooedo-Onsen Monogatari Toi Marine Hotel

Shizuoaka Prefecture

45.7

64

57.3%

1,910

2,020

60

6.3%

3.2%

14.9%

S-6

Ooedo-Onsen Monogatari Awara

Fukui Prefecture

38.8

95

51.1%

1,901

1,990

68

7.2%

4.9%

14.9%

S-7

Ooedo-Onsen Monogatari Kamoshika-so

Tochigi Prefecture

24.3

60

40.4%

1,222

1,260

38

6.3%

4.0%

3.0%

S-8

Ooedo-Onsen Monogatari Ikaho

Gunma Prefecture

36.6

40

69.5%

1,299

1,370

40

6.2%

4.1%

1.0%

S-9

Ooedo-Onsen Monogatari Kimitsu-no-moriChiba Prefecture

24.2

41

71.0%

819

859

26

6.4%

4.3%

4.8%

S-10

Ooedo-Onsen Monogatari Nagasaki Hotel Seifu

Nagasaki Prefecture

37.9

100

60.9%

1,637

2,570

76

9.4%

6.9%

6.4%

S-11

Ooedo-Onsen Monogatari Kounkaku

Miyagi Prefecture

54.5

98

54.0%

1,040

1,220

40

7.7%

3.6%

3.9%

S-12

Kinugawa Kanko Hotel

Tochigi Prefecture

38.8

172

49.3%

3,870

6,130

170

8.8%

5.6%

2.1%

S-13

Ooedo-Onsen Monogatari Kinosaki

Hyogo Prefecture

51.6

103

69.8%

2,084

2,650

83

8.0%

6.1%

11.8%

S-14

Ooedo-Onsen Monogatari Higashiyama Grand Hotel Fukushima Prefecture

55.7

123

45.9%

1,230

1,470

56

9.2%

4.8%

4.6%

38.5

1,369

55.9%

36,70540,249

1,305

7.1%

4.7%

2.7%

Total/Average(Note 5)(Note 1) Room occupancy rate is for the 7th period ended May 31, 2020 of the investment corporation.
(Note 2) (Average) NOI yield and (average) after depreciation NOI yield indicate annualized figures.
(Note 3) As for Building age and PML of Ooedo-Onsen Monogatari Reoma Resort, figures on the left indicate those of Hotel Reoma no Mori while figures on the right indicate those of New Reoma World.
(Note 4) The room occupancy rate of Ito Hotel New Okabe is a comprehensive figure including the rate of Surugatei, a property not owned by the investment corporation.
(Note 5) The room occupancy rate of Ooedo-Onsen Monogatari Kounkaku is a comprehensive figure including the rate of the Annex, a property not owned by the investment corporation.

Ooedo Onsen Reit Investment Corporation 16

Portfolio Data (2)The 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%

3.0% 2.1%

3.7%
28.3%

3.2%
3.2%
4.4%
22.0%

4.7%
5.2%

5.0%

5.2%

6.4%
10.5%

7.2%
8.2%

26.1%

4.9%

5.2%

5.7%

3.0% 1.9%

6.0%

15.2%

13.3%

6.6%

6.3%

7.0%

10.0%

9.5%

6.4%

8.0%

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 17

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

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

Property name

Previous
corresponding
periodcumulative total

8th period
cumulative
Total

ADR (yen)

ChangePrevious
corresponding
periodcumulative total

8th period
cumulative
Total

RevPAR (yen)ChangePrevious
corresponding
periodcumulative total

8th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative total

8th period
cumulative
Total

ChangeS-1

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

90.4

49.9

-44.8%

31,42730,395-3.3%

28,41015,167-46.6%

1,639

874-46.7%

S-2

Ooedo-Onsen MonogatariIse-shima

94.6

65.4

-30.9%

33,50928,496-15.0%

31,69918,636-41.2%

570

338-40.6%S-3

Ito Hotel New Okabe

95.9

60.9

-36.5%

29,78325,387-14.8%

28,561

15,460-45.9%

667

363-45.5%

S-4

Ooedo-Onsen Monogatari
Atami

98.9

68.3

-30.9%

33,141

28,928-12.7%

32,776

19,757-39.7%

529

323-38.8%

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

91.6

57.3

-37.4%

26,66125,891-2.9%

24,421

14,835-39.3%

321

197-38.5%

S-6

Ooedo-Onsen Monogatari
Awara

77.8

51.1

-34.3%

30,055

26,118-13.1%

23,382

13,346-42.9%

512295-42.2%

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

76.8

40.4

-47.4%

26,50925,970-2.0%

20,358

10,491-48.5%

263

137-47.6%

S-8

Ooedo-Onsen Monogatari
Ikaho

96.1

69.5

-27.7%

29,88025,490-14.7%

28,714

17,715-38.3%

240

148-38.1%

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

96.1

71.0

-26.1%

26,646

21,896-17.8%

25,606

15,546-39.3%

282

174-38.3%

Ooedo Onsen Reit Investment Corporation 18

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

Property name

Previous
corresponding
periodcumulative total

8th period
cumulative
Total

ADR (yen)

ChangePrevious
corresponding
periodcumulative total

8th period
cumulative
Total

RevPAR (yen)ChangePrevious
corresponding
periodcumulative total

8th period
cumulative
Total

Sales (million yen)

ChangePrevious
corresponding
periodcumulative total

8th period
cumulative
Total

ChangeS-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

91.4

60.9

-33.4%

33,181

28,172-15.1%

30,327

17,156-43.4%

624

353-43.3%

S-11

Ooedo-Onsen Monogatari
Kounkaku

77.1

54.0

-30.0%

25,01722,162-11.4%

19,288

11,967-38.0%

483

303-37.3%

S-12

Kinugawa Kanko Hotel

76.3

49.3

-35.4%

30,695

28,117-8.4%

23,42013,861-40.8%

952

575-39.5%

S-13

Ooedo-Onsen Monogatari
Kinosaki

92.9

69.8

-24.9%

32,21829,271-9.1%

29,93020,431-31.7%

679

457-32.6%

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

75.2

45.9

-39.0%

28,46826,391-7.3%

21,407

12,113-43.4%

585

342-41.6%

Total

86.7

55.9

-35.5%

30,25727,220-10.0%

26,232

15,215-42.0%

8,351

4,888

-41.5%

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

S-1

Property name

Ooedo-Onsen Monogatari
Reoma Resort <New Reoma World>

Previous
corresponding
periodcumulative total

295,839

8th period
cumulative
Total

130,120

Sales (million yen)

Change-56.0%

Previous
corresponding
periodcumulative total

1,135

8th period
cumulative
Total

475

Change-58.1%(Note) Number of guests is the total number of people using New Reoma World during the period.

Ooedo Onsen Reit Investment Corporation 19

Ⅲ. Key Policies in Forthcoming Periods

Ooedo Onsen Reit Investment Corporation 20

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

49.3
48.9

Dining out

What should be taken back
⇒ Daily leisure

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

Theme park or other leisure facilities

daily life and income

37.9

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

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

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

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

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

40

60 (%)

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

Ooedo Onsen Reit Investment Corporation 21

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

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

Strengths of properties owned and expectations• Requirements in the post-coronavirus period match the strengths of
Ooedo-Onsen Monogatari ~ Accessible and reasonable leisure provided
by the Ooedo model as an extension of daily life

< Measures taken by the Ooedo-Onsen
Monogatari Group >• Implement COVID-19 measures such as the prevention of infectious diseases andcustomer crowd control ~ Formation of infectious disease control project team by sponsors• Hot springs surrounded by nature rather than populated cities with high risk
• Easily accessible by car

Ooedo Onsen Reit Investment Corporation 22

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

1. Promises at restaurants

2. Promises at baths

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

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

Footprint stickers placed every
two meters in front of restaurants

3. Promises of facility staff members
Safety and security, and sincere hospitality
Ooedo staff members help create exclusive,
special memories.
• All workers inside the facilities wear masks.
• In-room amenities and fixtures are disinfected with alcoholand thoroughly wiped.
• Bedclothes in guest rooms are stored in tightly closed bags
to prevent being touched after use, taken to a bedclothes
storage room, and washed, etc.

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

Reduced number of lockers
available for use

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

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

Alcohol hand sanitizers placedin different places

Ooedo Onsen Reit Investment Corporation 23

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

Domestic travelers

Foreign visitors to
Japan

To the next
growth stage
Perspective on future external growth after COVID-19■ Urgently needed diversification of portfolio and risk
Targeted operators = Business model strong against crises such as a pandemic• Thick and diverse customer groups = Capture mass market• Chain operation that enables flexible sales strategy and cost control• Operators capable of using ICT■ Setting a sufficient rent payment ratio that allows for the maintenance of a relatively
high fixed rent ratio• True value of stable REIT to be tested

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

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

October 2016 -Acquired

October 2016 -April 2017 -July 2017 -July 2017 -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 -July 2020 -July 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(Higashi Muro County,
Wakayama Prefecture)(Kiso County,
Nagano Prefecture)(Toba City, Mie Prefecture)(Kamiamakusa City,
Kumamoto Prefecture)

Ooedo-Onsen Monogatari
Shiomi-so(Sasebo City,
Nagasaki Prefecture)(Gero City, Gifu Prefecture)(Murakami City,
Niigata Prefecture)

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

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

Ooedo-Onsen-Monogatari
Minoh Kanko Hotel

Minoh Onsen Spa Garden

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

Ooedo-Onsen Monogatari
Nikko Kirifuri

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

Ooedo Onsen Reit Investment Corporation 25

External Growth Strategy (2): Pipeline of Properties Other Than Those from the Sponsor
Currently, work on obtaining information on the availability of many types of properties including hotels inurban areas and accommodation facilities targeting inbound customers while determining risk and returnin view of the impact of COVID-19 and from medium- and long-term perspectives

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 8th period (from December 1, 2019 until May 31, 2020)>
Ordinance-designated cities

Core cities

Other

Total

Lodging

0

0

8

8

Other
(day trips, etc.)

0

0

5

5

Other lodgings

74

10

8

92

Entertainment, Amusement

0

0

0

0

Sports, beauty,
health promotion facilities

0

0

0

0

74

10

21

105

Onsen/Spa

Total

Ooedo Onsen Reit Investment Corporation 26

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

Bridge funding
by a third party
54.3%

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

38.1%

Developers
Financial Instisutions
Real Estate Brokers
Others1.9%<Progress of new acquisitions>

Preferential
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

2

1

3

Other
(day trips, etc.)

0

0

1

1

Other lodgings

1

0

6

7

Entertainment, Amusement

0

0

1

1

Sports, beauty,
health promotion facilities

0

0

1

1

Total

1

2

10

13

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

Ooedo Onsen Reit Investment Corporation 27

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

1. Leasing and rent structure In addition to the leasing structure focusing on stability in the sponsor properties, variable rent is introduced in some properties
with future upside potential. The basic strategy is “based on stability + partial variable.” Utilize variable rent structure more in the future according to the scale expansion of portfolio and an improvement in the degreeof diversification of risks.
Lease conditions for properties master-leased to the Ooedo-Onsen Monogatari Group as of May 31, 2020
Contract period:

20 years

Modified GOP (Note)

Non-cancellation period:

5-7 years
Rent revision:every

3 years

Primary rent
Fixed rent component

Approximately 93.5％

Secondary rent
Variablerent
component

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

Approximately 6.5％

 Primary rent = Fixed rent component (monthly amount stipulated by each lease agreement of each facility)+ variable rent component(Variable rent = Modified GOP for each facility × the fixed rate stipulated by each lease agreement) Secondary rent = The total of taxes and public dues that is liable for the Investment Corporation+ nonlife insurance premiums + other expenses
Ooedo Onsen Reit Investment Corporation 28

Internal Growth Strategy (2)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 attraction of customers at sponsor properties Incorporation of new growth elements such as new markets and new 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 broughtby the scale expansion of the portfolio

・Measures to increase competitiveness that share the perspective with tenants and additional investments in new functions
・Effective utilization of unused land and buildings
・Pursuit of significant value increasing through investment in extension and an increase in 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

Short term

Medium to long term

LimitedMedium to high potential

Currently, stability is the basis for the portfolio

Use of variable rents by acquiring
various types of properties

LimitedHigh potential

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

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

Ooedo Onsen Reit Investment Corporation 29

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

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

・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 30

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

Ooedo Onsen Reit’s Investing Targets

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

Shopping
Entertainment

H&BC

Accommodation

Dininganddrinking（Health &Beauty Care）

Onsen/spa

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

Theme park

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

Ooedo Onsen Reit Investment Corporation 31

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

8th period(ended May 31, 2020)

DPU

2,328 yenAround 2,500 yen

Around 2,600 – 2,800 yen

Marketcapitalization

16.8 billion yen

Around 50 billion yen

Around 100 billion yen

LTV

40.0％

(book value basis)(Note 1) The figures above are targets as of July 22, 2020, and are not guaranteed.
(Note 2) The market capitalization in the 8th period is calculated based on the closing price as of May 29, 2020.

Around 42 – 44%

Ooedo Onsen Reit Investment Corporation 32

Ⅳ. Market Environment

Ooedo Onsen Reit Investment Corporation 33

Market Environment (1) : Stable Onsen/Spa-Related Market
Market for onsen and spa-related facilities that forms the basis for the stability of the portfolio
centered on properties operated by the sponsor
Trends in number of accommodation facilities
and FY total number of guests(facilities)
16,000(thousands)
150000No. of accommodation facilities (left axis)
FY total no. of guests (right axis)

12000012,00090000

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

Seniors
Male

60000
4,000
0
FY2010FY2012FY2014FY2016

50.0

30000
0

0.0

Source: Onsen Use (2010 – 2018), 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)

30.0
20.0

FY2018

Families

60.0
29.7

40.0

8,000

Female

10.0

19.4

31.5

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 34

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

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

1,800

80%
60%

67.3%

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 35

Ⅴ. Appendix

Ooedo Onsen Reit Investment Corporation 36

Appraisal Value

Property
No.

Property nam e

Direct capitalization m ethod
Discounted cash flow m ethod
Unrealized
Appraisal value (m illion yen)
Acquisition
profits andDirect Cap Rate
Discount Rate
Term inal Cap Rate
PriceBook value
losses(m illion(m illion yen) 7th period 8th period
7th period 8th period
7th period 8th period
7th period 8th period(m illion
Changevaluation Nov. 30,
valuationyen)
Nov. 30,
May 31,
Nov. 30,
May 31, valuation
Nov. 30,
May 31,
May 31,
yen)
2020
2019
2020
2019
2020
2019
2019
2020

S-1

Ooedo-Onsen Monogatari
Reoma Resort

10,37910,332

8,910

8,870

-40

-1,462

6.0%

6.0%

-

5.8%

5.8%

-

6.2%

6.2%

-

S-2

Ooedo-Onsen MonogatariIse-shima

3,656

3,388

3,840

3,830

-10

+441

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-3

Ito Hotel New Okabe

2,657

2,612

2,820

2,810

-10

+197

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-4

Ooedo-Onsen Monogatari
Atami

2,997

2,839

3,220

3,200

-20

+360

5.1%

5.1%

-

4.9%

4.9%

-

5.3%

5.3%

-

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

1,910

1,826

2,030

2,020

-10

+193

5.6%

5.6%

-

5.4%

5.4%

-

5.8%

5.8%

-

S-6

Ooedo-Onsen Monogatari
Awara

1,901

1,877

2,000

1,990

-10

+112

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

S-7

Ooedo-Onsen Monogatari
Kamoshika-so

1,222

1,183

1,270

1,260

-10

+76

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-8

Ooedo-Onsen Monogatari
Ikaho

1,299

1,281

1,380

1,370

-10

+88

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

819

839

862

859

-3

+19

5.3%

5.3%

-

5.1%

5.1%

-

5.5%

5.5%

-

S-10

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

1,637

1,618

2,570

2,570

-

+951

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-11

Ooedo-Onsen Monogatari
Kounkaku

1,040

1,025

1,220

1,220

-

+194

5.5%

5.5%

-

5.3%

5.3%

-

5.7%

5.7%

-

S-12

Kinugawa Kanko Hotel

3,870

3,672

6,140

6,130

-10

+2,457

5.2%

5.2%

-

5.0%

5.0%

-

5.4%

5.4%

-

S-13

Ooedo-Onsen Monogatari
Kinosaki

2,084

2,134

2,650

2,650

-

+515

5.4%

5.4%

-

5.2%

5.2%

-

5.6%

5.6%

-

S-14

Ooedo-Onsen Monogatari
Higashiyama Grand Hotel

1,230

1,221

1,480

1,470

-10

+248

5.9%

5.9%

-

5.7%

5.7%

-

6.1%

6.1%

-

36,70535,85540,39240,249

-143

4,393

－

－

－

－

－

－

Total

－

－

－

Ooedo Onsen Reit Investment Corporation 37

Introduction of Properties (1)S-1

Ooedo-Onsen Monogatari
Reoma Resort

S-2

S-3

Ito Hotel New Okabe

Location:

Marugame City,
Kagawa Prefecture

Location:

Shima City,
Mie Prefecture

Location:

Ito City,
Shizuoka Prefecture

Site area:

665,403㎡
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 38

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

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

80.6%

89.1%

95.4%

87.1%

86.6%

93.7%

90.5%

85.2%

80.4%

34.8%

8.9%

-

69.3%

90.4%

49.9%

-40.5%ADR (yen)

25,00033,341

51,371

26,722

26,62828,691

33,59532,01427,473

26,77920,908-31,68031,42730,395-1,032

RevPAR (yen)20,15029,70649,007

23,27423,05926,88330,40327,27522,088

9,319

1,860

-

21,95428,41015,167-13,243

204

278

470

219

232

264

292

266

207

89

18

0

2,544

1,639

874

-765

Cumulativ e
total

Previous
corresponding
period cumulative
total

Sales (million yen)May

Previous
corresponding
period cumulative
total

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

2020

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Room occupancy rate

87.6%

93.4%

95.6%

99.4%

86.7%

96.5%

90.6%

95.0%

94.0%

73.1%

22.1%

18.0%

79.3%

94.6%

65.4%

-29.2%ADR (yen)

28,78731,764

46,98930,60729,25031,58832,16031,032

27,77526,18319,92619,80031,33333,50928,496-5,013

RevPAR (yen)25,217

29,66744,92130,42325,35930,482

29,13629,48026,108

19,139

4,403

3,564

24,847

31,69918,636-13,063

77

90

131

93

80

92

90

90

75

58

13

10

905

570

338

-231

Sales (million yen)

S-3：Ito Hotel New Okabe
2019

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

93.9%

92.9%

96.8%

95.6%

83.3%

90.9%

90.1%

88.4%

96.3%

68.1%

23.2%

-

76.5%

95.9%

60.9%

-35.0%ADR (yen)

22,67327,60444,38424,201

24,406

26,62530,37728,28722,447

21,936

16,226-27,28529,78325,387-4,396

RevPAR (yen)21,28925,64442,96323,136

20,33024,20227,36925,005

21,616

14,9383,764-

20,87328,561

15,460-13,101

84

99

160

87

83

97

110

99

81

57

14

0

977

667

363

-304

Sales (million yen)May

Previous
corresponding
period cumulative
total

Ooedo Onsen Reit Investment Corporation 39

Introduction of Properties (2)S-4

Ooedo-Onsen Monogatari
Atami

S-5

Ooedo-Onsen Monogatari
Toi Marine Hotel

S-6

Ooedo-Onsen Monogatari
Awara

Location:

Atami City,
Shizuoka Prefecture

Location:

Izu City,
Shizuoka Prefecture

Location:

Awara City,
Fukui Prefecture

Site area:

2,053㎡
8,469㎡

Site area:

2,800㎡
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 40

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

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

98.9%

94.5%

98.7%

96.7%

81.2%

94.3%

93.6%

96.9%

97.6%

92.4%

30.0%

-

81.2%

98.9%

68.3%

-30.6%ADR (yen)

28,04632,43250,09830,37129,73531,372

34,14431,03929,022

24,95017,429-31,80833,141

28,928-4,213

RevPAR (yen)27,73730,64849,44629,36824,14429,583

31,95830,07628,32523,053

5,228-

25,82832,776

19,757-13,019

75

85

136

80

69

81

87

83

74

63

14

0

852

529

323

-205

Sales (million yen)May

Previous
corresponding
period cumulative
total

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

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

88.2%

87.9%

97.0%

91.7%

76.9%

90.0%

84.7%

89.7%

95.5%

64.5%

10.6%

-

73.0%

91.6%

57.3%

-34.3%ADR (yen)

21,74731,41849,457

22,82922,82824,56528,72828,291

24,70521,851

17,188-27,976

26,66125,891-770

RevPAR (yen)19,18027,61647,97320,934

17,554

22,10824,33225,377

23,59314,093

1,821-

20,422

24,421

14,835-9,586

43

60

103

45

40

49

54

56

50

31

4

0

540

321

197

-123

Cumulativ e
total

Previous
corresponding
period cumulative
total

Sales (million yen)May

Previous
corresponding
period cumulative
total

S-6：Ooedo-Onsen Monogatari Awara
2019

2020

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

77.7%

87.5%

98.0%

83.5%

80.0%

92.5%

80.8%

75.4%

85.0%

55.7%

10.7%

-

68.8%

77.8%

51.1%

-26.7%ADR (yen)

25,147

29,14041,60425,99925,302

27,462

29,13728,516

24,84822,321

15,244-28,27630,055

26,118-3,937

RevPAR (yen)19,53925,497

40,771

21,70920,241

25,402

23,54221,501

21,12012,432

1,631-

19,45323,382

13,346-10,036

73

92

141

78

77

92

89

82

75

42

5

0

851

512

295

-216

Sales (million yen)May

8th period
cumulative
Total

Ooedo Onsen Reit Investment Corporation 41

Introduction of Properties (3)S-7

Ooedo-Onsen Monogatari
Kamoshika-so

S-8

Ooedo-Onsen Monogatari
Ikaho

S-9

Ooedo-Onsen Monogatari
Kimitsu-no-mori

Location:

Nasushiobara City,
Tochigi Prefecture

Location:

Shibukawa City,
Gunma Prefecture

Location:

Kimitsu City,
Chiba Prefecture

Site area:

7,734㎡
5,947㎡

Site area:

6,805㎡
5,177㎡

Site area:

57,069㎡
8,660㎡

Total floor area:

Total floor area:

Area characteristics

Area characteristics


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



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

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

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

Area characteristics


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

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

Ooedo Onsen Reit Investment Corporation 42

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

Jul.

Room occupancy rate

82.9%

ADR (yen)
RevPAR (yen)Cumulativ e
total

May

Previous
corresponding
period cumulative
total

8th period
cumulative
Total

Change

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

87.3% 100.0%

75.9%

73.4%

95.7%

64.4%

58.5%

62.0%

52.3%

5.4%

-

63.1%

76.8%

40.4%

-36.4%

23,22625,11935,43024,886

27,07727,477

29,412

29,52825,576

19,097

16,978-27,03426,50925,970-539

19,25421,92835,43018,88819,874

26,295

18,941

17,27315,857

9,987

916

-

17,05820,358

10,491-9,867

41

47

76

40

46

58

41

38

33

22

2

0

448

263

137

-125

Cumulativ e
total

Previous
corresponding
period cumulative
total

Sales (million yen)

Aug.

2020

S-8：Ooedo-Onsen Monogatari Ikaho
2019

2020

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

99.7%

99.7%

99.8%

99.6%

95.9%

99.2%

95.0%

88.5%

96.6%

87.7%

50.3%

-

84.2%

96.1%

69.5%

-26.6%ADR (yen)

27,632

28,92741,85427,97128,802

31,866

31,28628,521

23,696

22,74916,931-

28,861

29,88025,490-4,390

RevPAR (yen)27,54928,84041,77027,85927,621

31,611

29,721

25,241

22,89019,9508,516-

24,30028,714

17,715-10,999

38

41

58

38

40

45

42

36

30

28

11

0

411

240

148

-91

Sales (million yen)May

8th period
cumulative
Total

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

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

88.0%

94.3%

98.6%

22.8%

29.4%

83.8%

92.8%

97.5%

99.2%

91.5%

46.3%

-

70.3%

96.1%

71.0%

-25.1%ADR (yen)

23,60525,57135,372

23,231

21,84924,14026,87324,78822,941

17,79011,504-

24,343

26,646

21,896-4,750

RevPAR (yen)20,772

24,11334,876

5,296

6,423

20,22924,93824,16822,757

16,277

5,326-

17,11325,606

15,546-10,060

38

44

63

9

13

38

45

46

38

32

10

0

383

282

174

-108

Sales (million yen)May

Previous
corresponding
period cumulative
total

Ooedo Onsen Reit Investment Corporation 43

Introduction of Properties (4)S-11

Location:

Nagasaki City,
Nagasaki Prefecture

Location:

Osaki City,
Miyagi Prefecture

Location:

Nikko City,
Tochigi Prefecture

Site area:

5,092㎡
11,114㎡

Site area:

11,829㎡
10,843㎡

Site area:

6,719㎡
22,402㎡

Total floor area:

Area characteristics

Area characteristics



Kinugawa Kanko Hotel

Ooedo-Onsen Monogatari
Nagasaki Hotel Seifu

Total floor area:

Ooedo-Onsen Monogatari
Kounkaku

S-10

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

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



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

S-12

Total floor area:

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

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

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

Ooedo Onsen Reit Investment Corporation 44

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

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

86.7%

96.4%

99.1%

93.1%

90.8%

97.0%

88.2%

84.7%

87.9%

84.4%

20.9%

-

77.4%

91.4%

60.9%

-30.5%ADR (yen)

27,583

27,83737,73029,20033,62434,80933,83032,133

26,413

22,943

15,895-30,44433,181

28,172-5,009

RevPAR (yen)23,914

26,83437,39027,18530,53033,76429,83827,21623,217

19,363

3,322-

23,56330,327

17,156-13,171

83

95

130

92

106

114

102

95

76

67

11

0

976

624

353

-270

Sales (million yen)May

Previous
corresponding
period cumulative
total

S-11：Ooedo-Onsen Monogatari Kounkaku
2019

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

81.0%

77.8%

88.2%

76.8%

84.7%

84.4%

74.2%

81.3%

97.1%

53.7%

19.0%

-

68.1%

77.1%

54.0%

-23.1%ADR (yen)

21,681

22,27426,604

22,69926,607

26,37826,792

23,87020,408

19,10913,487-23,56025,01722,162-2,855

RevPAR (yen)17,561

17,32923,464

17,432

22,53622,263

19,87919,406

19,816

10,261

2,562-

16,044

19,288

11,967-7,321

73

71

92

69

94

96

87

81

80

43

10

0

801

483

303

-180

Cumulativ e
total

Previous
corresponding
period cumulative
total

Sales (million yen)May

Previous
corresponding
period cumulative
total

S-12：Kinugawa Kanko Hotel
2019

2020

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

80.9%

84.0%

99.6%

89.4%

80.8%

96.3%

80.2%

76.4%

73.9%

51.8%

13.7%

-

68.9%

76.3%

49.3%

-27.0%ADR (yen)

25,557

26,10938,55927,415

29,10031,34332,62931,77825,915

21,741

16,107-29,33530,695

28,117-2,578

RevPAR (yen)20,67521,931

38,40424,50923,51230,183

26,16824,27819,151

11,261

2,206-

20,211

23,42013,861-9,559

146

150

243

163

164

207

189

171

126

74

14

0

1,651

952

575

-376

Sales (million yen)May

8th period
cumulative
Total

Ooedo Onsen Reit Investment Corporation 45

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

S-14

KinosakiOoedo-Onsen Monogatari
Higashiyama Grand Hotel

Location:

Toyooka City,
Hyogo Prefecture

Location:

Aizuwakamatsu City,
Fukushima Prefecture

Site area:

11,350㎡
10,602㎡

Site area:

12,451㎡ (Note)
16,665㎡ (Note)

Total floor area:

Total floor area:

Area characteristics

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

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



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

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

Ooedo Onsen Reit Investment Corporation 46

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

2020

Cumulativ e
total

8th period
cumulative
Total

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

95.6%

95.3%

99.9%

99.5%

97.1%

99.4%

99.2%

98.7%

98.8%

99.1%

23.2%

-

83.8%

92.9%

69.8%

-23.1%ADR (yen)

24,46028,22343,034

26,573

26,41031,16231,30930,356

28,84828,89518,933-29,75032,21829,271-2,947

RevPAR (yen)23,38326,89642,99026,44025,64430,97531,05829,961

28,501

28,634

4,392-

24,93029,93020,431-9,499

89

104

161

99

101

119

120

116

102

102

15

0

1,132

679

457

-221

Cumulativ e
total

Previous
corresponding
period cumulative
total

Sales (million yen)May

Previous
corresponding
period cumulative
total

S-14：Ooedo-Onsen Higashiyama Grand Hotel
2019

2020

Change

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Room occupancy rate

87.6%

80.5%

91.7%

86.1%

85.8%

91.3%

66.7%

65.3%

79.4%

51.6%

13.8%

-

66.5%

75.2%

45.9%

-29.3%ADR (yen)

26,03525,293

31,953

26,221

28,08628,21133,30528,162

24,59020,282

16,773-27,261

28,46826,391-2,077

RevPAR (yen)22,806

20,36029,30022,57624,09725,75622,214

18,38919,524

10,4652,314-

18,12821,407

12,113-9,294

102

95

130

99

115

120

106

85

91

47

10

0

1,004

585

342

-243

Sales (million yen)May

8th period
cumulative
Total

S-1：Ooedo-Onsen Monogatari Reoma Resort 〈New Reoma Resort〉
2019

2020

Cumulativ e
total

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Number of guests

36,983

53,105

118,893

36,502

40,72145,221

54,73636,014

28,679

8,341

2,350

Sales (million yen)

130

218

496

145

147

160

191

142

96

35

9

- 461,5450

1,774Previous
corresponding
period cumulative
total

8th period
cumulative
Total

295,839 130,120
1,135

475

Change-165,719-659

Ooedo Onsen Reit Investment Corporation 47

Financial Indices
Indices

7th period(Nov. 30, 2019)

8th period(May 31, 2020)

Ordinary income

566 mn yen

546 mn yen

Net income

565 mn yen

545 mn yen

Depreciation

433 mn yen

438 mn yen

CAPEX

178 mn yen

169 mn yen

Total assets

38,640 mn yen

38,327 mn yen

Total net assets
BPS (Total net assets/unit)

21,207 mn yen

21,183 mn yen

90,110 yen

90,011 yen

Unit price (End of each period)

95,900 yen

71,800 yen

235,347 units

235,347 units

568 mn yen

547 mn yen

2,415 yen

2,328 yen

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

5.0%
998 mn yen
4,244 yenCalculation formula

6.5% DPU (annualized)/Unit price as of end of period
983 mn yen Net income + Depreciation－profit or loss on sale of real estate
4,178 yen

11.3x

8.6x Unit price as of end of period/FFO per unit (annualized)

PER

20.0x

15.5x Unit price as of end of period/Net income per unit (average during the periods, annualized)

PBR

1.1x

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

ROA

1.5%

1.4% Ordinary income/Average of total assets during the period

2.9%

2.8%

2.7%

2.6% Net income/Average of total net assets during the period

5.3%

5.1%

Annualized
ROE
Annualized
NAV

25,474 mn yen

NAV per unit
NAV multiple

108,243 yenInterest-bearing debt

15,558 mn yen

0.9x

25,577 mn yen Total net assets + Total appraisal value - Total book value - Total liabilities
108,679 yen
0.7x Unit price as of end of period/NAV per unit
15,319 mn yen

LTV (book value basis)

40.3%

40.0% Interest-bearing debt/Total assets

LTV (appraisal value basis)

36.3%

35.9% Interest-bearing debt/(Total assets + Total appraisal value - Total book value)

Operating days

183 days

183 days

Ooedo Onsen Reit Investment Corporation 48

6th period

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

AssetsCurrent assets
Cash and deposits
Prepaid expenses
Other

2,001,208
136,232
66,727

Total current assets

2,204,168

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

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

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

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

Intangible assets
Leasehold right
SoftwareTotal intangible assets

157,802
3,754
161,556

157,802
2,951
160,754

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

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

36,578,023

36,278,186

38,782,191

38,640,729

Balance Sheet(thousand yen)
8th period

7th period(period ended Nov. 30, 2019)(thousand yen)
8th period

7th period(period ended Nov. 30, 2019)(period ended May 31, 2020)(period ended May 31, 2020)

Liabilities

AssetsCurrent liabilities

Current assets
Cash and deposits
Prepaid expenses
Other
Total current assets

2,228,615
126,984

2,210,622

Operating accounts payable

92,949138,154

Short-term loans payable

340,000-

6,026,630

6,240,110

Accounts payable - other

90,011

89,251

Accrued expenses

10,694

8,329

6,942

6,251

2,362,543

2,355,028

Non-current assets

Income taxes payable

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

26,324,003

26,493,480

Accured consumption taxes-2,358,917-2,796,416

Advances received

23,697,064

Other

9,191,620

9,078,890

600

Tenant leasehold and security deposits

1,230,706

1,230,706-79

Asset retirement obligations

538

520

Total non-current liabilities

3,498

3,498

10,979-877-1,247

10,101

9,731

600
-61

2,448

11,988,187

11,988,187

35,966,652

35,697,951

157,802

157,802

2,951

2,149

160,754

159,951

16

15

140,673

104,578

10,08910,089Total investments and other assets

150,780

114,684

Total non-current assets

Total liabilities

36,278,186

35,972,587

38,640,729

38,327,616

138,156

138,288

10,560,482

10,447,884

17,433,549

17,143,692

20,653,023

20,653,023-11,467-14,292-11,467-14,292

20,641,555

20,638,731

565,624545,192

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

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

Lease and guarantee deposits

Total assets

Non-current liabilities

adjustment

Investments and other assets

Long-term prepaid expenses

Total current liabilities

Allowance for temporary difference

Intangible assets

Deferred tax assets

261,314Long-term loans payable

10,979-1,050Total intangible assets

261,849

5,795

-758

Software39,513

6,695,808

2,740

Leasehold right936

42,933

6,873,067

23,965,085

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

950

7,048

Accumulated depreciation
Land

Current portion of long-term loans payable

50,556

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

565,624545,192

21,207,179

21,183,923

21,207,179

21,183,923

38,640,729

38,327,616

Ooedo Onsen Reit Investment Corporation 49

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
Reversal of distributions payable
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Other
Total non-operating expenses
Ordinary income

7th period

8th period(from June 1, 2019 to November 30, 2019)(from December 1, 2019 to May 31, 2020)

1,440,167
1,440,167

1,433,658
1,433,658

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

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

10
10

10
563
573

64,25765,642500
130,400
566,51163,464
69,268132,732
546,279

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

233

Total extraordinary losses-

233

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

566,511952-4
948
565,56261

546,045937
0
938
545,107
85

Unappropriated retained earnings(undisposed loss)

565,624545,192

Extraordinary losses

Ooedo Onsen Reit Investment Corporation 50

Debt Status
List of lenders
LenderLong
term(as of May 31, 2020)
Balance(mn yen)Interest rate(%)

Drawdown date

Repayment date

Security

Notes

Sumitomo Mitsui Banking Corporation

458

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

September 1, 2016

May 31, 2023

Unsecured and unguaranteed(Note 1)

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

2,158

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

December 4, 2017

November 30, 2020

Unsecured and unguaranteed(Note 2)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.

2,306

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

December 4, 2017

November 30, 2021

Unsecured and unguaranteed(Note 3)

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.

3,269

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

May 31, 2019

May 31, 2022

Unsecured and unguaranteed(Note 4)

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.

3,269

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

May 31, 2019

May 31, 2023

Unsecured and unguaranteed(Note 4)

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

3,566

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

May 29, 2020

May 31, 2021

Unsecured and unguaranteed(Note 5)

Sumitomo Mitsui Banking Corporation

290

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

May 29, 2020

May 31, 2021

Unsecured and unguaranteed(Note 6)

Total

15,319

Ooedo Onsen Reit Investment Corporation 51

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

Overview
Company Name

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

Capital

100 million yen (as of 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)

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

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

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

Trends in number of facilities
2003

2007 - 20092010 - 2013

2016

2017

2018

2019

2020

Opened Ooedo-Onsen
Monogatari in Odaiba,
Tokyo

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

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

Opened Kounkaku, Masuya
and Nagasaki Hotel Seifu

Opened Hotel Suiyotei,
Beppu and Gero Shin-kan

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

OpenedSaikaibashi Corazon Hoteland 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

24

25

27

27

27

End ofSep. 2012

End ofSep. 2013

End ofFeb. 2014

End ofFeb. 2015

End of Feb.
2016

30

32

34

End ofFeb. 2018

End ofFeb. 201937

0
End ofSep. 2007

End ofSep. 2008

End ofSep. 2009

End ofSep. 2010

End ofSep. 2011

End ofFeb. 2017

End ofFeb. 2020

Ooedo Onsen Reit Investment Corporation 52

Ooedo-Onsen Monogatari Group (2)The total number of guests staying at onsen/spa facilities operated by the Ooedo-Onsen Monogatari Group is steadily increasing year by year.
In addition, the group is expanding its business scale actively through a range of initiatives such as the acquisition of 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)
4,000
3,421

Facilities acquired after 2016

REIT acquired assets

3,623

3,126
3,000

2,565

2,709

Ooedo-Onsen Monogatari

2,766

MasuyaOoedo-Onsen Monogatari

Kakeyu Fujikan Sakurakan

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari2,000

Kounkaku

Shiomi-so

Ooedo-Onsen Monogatari

Hotel Sohkan

Hotel Kisoji

1,000
FY2015FY2016FY2017FY2018FY2019FY2020Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Awara

Higashiyama Grand Hotel

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari
Yamashiro Onsen

Yamashitaya

Ooedo-Onsen Monogatari

Saikaibasi Corazon Hotel

Ooedo-Onsen Monogatari

Gero Shin-kan
Ooedo-Onsen Monogatari

Nagasaki Hotel Seifu
Ooedo-Onsen Monogatari

Beppu Seifu
Amakusa
Hotel Kameya

Nikko Kirifuri(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 MonogatariIse-shima

Reoma Resort

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Urayasu Mangekyo

Ooedo-Onsen Monogatari
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Sendai Korona-no-yu

Aizu

Nagayama

KinosakiOoedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari(Onsen theme park)

Kimitsu-no-mori

Minoh Onsen Minoh Spa Garden

Tenka-taihei-no-yu
Sumpu Yume Hiroba

Minoh Kanko Hotel(Onsen theme park )(Note)
Ooedo-Onsen Monogatari

Ito Hotel New Okabe

TAOYA Shima

Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari(Onsen theme park)／
Ooedo-Onsen Monogatari

Ooedo-Onsen Monogatari

Nanki-kushimoto(Note) It is scheduled to be transferred to a third party on August 26, 2020.

Ooedo-Onsen Monogatari

Hotel Suiyotei
Ooedo-Onsen Monogatari Atami

Toi Marine Hotel

Ooedo Onsen Reit Investment Corporation 53

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

Efficient operation

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

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

Affordable
price

Marketing programs to maximize
customer reachMeasures to attract more customers led by the headquartersof the Ooedo-Onsen Monogatari Group Efforts to attract more customers by utilizing in-house facilities
such as reservation centers
Ooedo Onsen Reit Investment Corporation 54

“Ooedo Business Model” with Stable Operations and Sustainable Growth (2)Maintaining high customer satisfaction and room occupancy rates surpassing the industry average
despite the impact of COVID-19 since March
Ooedo-Onsen Monogatari Group hotel guest questionnaire(conducted from December 1, 2019 to May 31, 2020)

Trends in average monthly occupancy rates
for each type of accommodation facility＜Meal (breakfast and dinner)＞＜Overall satisfaction ＞

100%
90%
80%
70%
60%
50%
40%
30%

＜Type of services inside the facility＞＜Onsen＞

25.2%
17.9%
16.6%
11.8%
7.8%
5.9%

20%
10%
0%
2018/42018/8

2018/12

Ooedo Onsen REIT
Resort hotels

Very satisfied

SatisfiedUnsatisfied

Very unsatisfied

Fair

2019/4City hotels
Ryokans

2019/8

2019/122020/4

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

Ooedo Onsen Reit Investment Corporation 55

Unitholders Breakdown
Top 10 unitholders

Ratio by number of unitholders＜End of 7th fiscal period＞＜End of 8th fiscal period＞

18,066 unitholders

19,558 unitholders

Financial
institutions

Foreigncorporations
and individuals

Financial
institutions

Foreigncorporations
and individuals

Rank

Name

Number ofunits held

Ratio

1

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

22,646

9.6%

2

Japan Trustee Services Bank, Ltd. (Trust Account)

15,870

6.7%

3

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

11,146

4.7%

4

Ooedo-Onsen Mongatari Co., Ltd.

9,246

3.9%

5

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

4,050

1.7%

6

Morgan Stanley MUFG Securities Co., Ltd.

3,558

1.5%

7

YONEZAWA SHINKIN BANK

3,000

1.3%

8

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

2,963

1.3%

9

Banshu Shinkin BANK

2,880

1.2%

10

Ueda Yagi Tanshi Co., Ltd.

2,500

1.1%

77,85933.1%

Raito by number of investment units

Total
Individuals
Financial institutions(Incl. securities companies)

Other domestic corporations
Foreign corporations and individuals

Ooedo Onsen Reit Investment Corporation 56

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

Targets unitholders listed or recorded on Unitholders’ Registry
as of May 31, 2020 (record date), end of 8th fiscal period.

Eligible persons

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

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

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

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

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

Ooedo Onsen Reit Investment Corporation 57

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

August November
2016
2016

(units)February
2017

May
2017

August2017

November
2017

February
2018

May
2018

VolumeAugust2018

November
2018

February
2019

May
2019

August2019

November
2019

February
2020

May
2020

February
2019

May
2019

August2019

November
2019

February
2020

May
2020

Stock price

Relative comparison of investment unit price and TSE REIT index(yen)August November
2016
2016

February
2017

May
2017

August2017

November
2017

February
2018

May
2018

Stock priceAugust2018

November
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 58

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

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

Management fee II

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

Acquisition fee(Note 2)

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

Disposition fee

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

Merger fee

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

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

Propose
Proposingdepartment

Complianceofficer

ReturnInvestment
Committee(includes outsidecommittee
members)

Review anddecision

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

Investment
Corporation
Board Meeting

RejectOoedo Onsen Reit Investment Corporation 59

Overview of Investment Corporation
Parent Company of Asset Manager
SponsorInvestment Corporation

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

Ooedo-Onsen Monogatari Co., Ltd.

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 60

Overview of Asset Manager

Name：Ooedo Onsen Asset Management Co., Ltd.

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

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

Established：April 24, 2015

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

Capitalization：50 million yen

Member of the Investment Trusts Association, Japan

Representative：Fuminori Imanishi

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

Registrationsand Licenses

Employees：Real estate brokerage, Governor of Tokyo (2) No. 98032：13 (as of May 31, 2020)

Structure
General Shareholders’ Meeting

Auditors
Board of Directors
Investment Committee

Compliance Committee
President and CEO
Compliance Officer

Investment Management Department

Finance Department

Planning and Coordination
Department

Ooedo Onsen Reit Investment Corporation 61

Disclaimer

This material is for informational purposes only and is not intended for the public offering, solicitation, sales, etc. ofparticular financial instruments. To purchase investment units of Ooedo Onsen Reit Investment Corporation (hereinafterreferred to as “The Investment Corporation”), please contact a securities company.
Unless otherwise noted, the information presented in this material is not a requirement of the Financial Instruments andExchange Act, laws related to investment trusts and investment corporations or Cabinet Order, Cabinet Office
Ordinance, regulations related to these or Securities Listing Regulations of the Tokyo Stock Exchange or various otherrelated regulations. Also, this information is not the same as that required for disclosure or asset management reports
prepared according to related laws and regulations, etc.
This material contains forward-looking statements regarding business results, but these statements were made basedon information available at the time these materials were prepared and according to certain conditions and decisions, sothey contain unknown risk and uncertainty. Accordingly, information concerning the future are not guarantees of future
results of The Investment Corporation and actual results may differ significantly.
The information presented in this material has been prepared with all care. However, there is no guarantee of theinformation’s accuracy and completeness. Also, reported details may be modified or discontinued without notice.
Duplication or use for other purposes of these materials without prior permission is prohibited.

Ooedo Onsen Reit Investment Corporation 62