Invincible Investment : Financial Results Materials

Invincible Investment Corporation

December 2023 Fiscal Period Results

(July 1, 2023 to December 31, 2023)

TSE Code : 8963

February 26, 2024

Table of Contents

Ⅰ . Executive Summary	2～3
Ⅱ. Summary of December 2023 FP Results and 2024 Forecasts
Ⅱ-1. Financial Highlights for December 2023 FP	4
Ⅱ-2.	Operating Revenue Composition	5
Ⅱ-3. Summary of June 2024 FP Forecast	6
Ⅱ-4. Summary of December 2024 FP Forecast	7
Ⅱ-5. Impact from the 2024 Noto Peninsula Earthquake	8
Ⅱ-6.	Domestic Hotel KPIs (Past performance and Forecasts for 2024)	9
Ⅱ-7.	Cayman Hotel KPIs (Past performance and Forecasts for 2024)	10
Ⅱ-8.	Capital Expenditures and Depreciation	11

Ⅲ. Summary of Properties Acquired in August 2023

Ⅲ-1.	Summary of Properties Acquired	12
Ⅲ-2.	Change in Hotel Portfolio	13
Ⅲ-3.	Actual KPI of the Properties Acquired in August 2023:Fusaki Beach Resort	14

Hotel & Villas

Ⅳ. Status of Hotel Operations and Market

Ⅳ-1.	Situation in Japan and Changes in INV's Hotel Occupancy Rate	15
Ⅳ-2.	Recovery Trends in KPIs for INV's 75 Domestic Hotels	16
Ⅳ-3.	Initiatives by MHM	17
Ⅳ-4.	Change in GOP for 73 Hotels Managed by MHM	18
Ⅳ-5.	MHM: Future Outlook and Strategy	19
Ⅳ-6.	Initiatives by Sheraton Grande Tokyo Bay Hotel (SGTB)	20
Ⅳ-7.	Update of the Status of the Cayman Islands	21
Ⅳ-8.	Airlines Serving the Cayman Islands and Moves to Alleviate the Pilot
	Shortage in the U.S.	22
Ⅳ-9.	Status of New Hotel Development in Japan	23
Ⅳ-10.	Status of Hotel Stock in Japan	24
Ⅳ-11.	Trial Calculation: Business vs. Leisure Demand	25
Ⅳ-12.	Status of Overseas Travel	26
Ⅳ-13.	Inbound Market	27～29
Ⅳ-14.	Domestic Hotel Portfolio Map	30

Ⅴ. Status of Residential Operations

V-1. Performance of Residential Properties

V-2. Changes of Residential Rents

Ⅵ. Financial Condition

Ⅶ. ESG Initiatives

Ⅶ-1. ESG Initiatives by INV

Ⅶ-2. ESG Initiatives by MHM

Appendix (1)

1. Unitholder Benefit Program for Invincible Unitholders
2. Inbound Market: Inbound Visitors to Japan by Country
3. Domestic Portfolio Map
4. Track Record of External Growth
5. Sponsor Pipeline
6. Summary of Appraisal Value and NAV per Unit

Appendix (2) - Financial and Operational Data

1. Key Operational Data for Variable Rent Hotels
2. Financial Metrics
3. Income Statement
4. Balance Sheet
5. Cash Flow Statement and Dividend Distribution
6. Property Income
7. Appraisal Value
8. Portfolio Properties
9. Borrowings and Investment Corporation Bonds
10. Overview of Unitholders
11. Unit Price Information

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40

41

42

44～45

46

47

48～49

50

51～54

55～58

59～62

63～69

70

71

1

Ⅰ . Executive Summary (1)

	◼	Sales and profits increased significantly this period due to a recovery in hotel performance and external growth. Operating revenue
		increased by 18.2% compared to the previous fiscal period ("previous period"), and exceeded the level achieved during the same period
		in 2019 by 13.3%, excluding gain on sales of properties
Results of	◼	Net income increased by 23.8% compared to the previous period to JPY 11,032 million. Distribution per unit ("DPU") improved to JPY
December 2023
	1,640, or 95.1% of the same period in 2019
Fiscal Period
(FP)	◼	DPU increased by JPY 199 or 13.8% compared to the forecast announced at the time of the public offering on July 19, 2023
	◼	The total appraisal value of the 127 properties held at the beginning of the December 2023 FP was JPY 570,791 million, an increase of JPY
		9,828 million (or a 1.8% increase) from the end of the June 2023 appraisal
	◼	In the 2023 GRESB Real Estate Assessment, INV received a "3-Star" GRESB Rating
	◼	Acquired six domestic hotels for a total acquisition price of JPY 57.2 billion at a simulated 6.0% NOI yield
Summary of	◼	Expanded investments centered on resort-type hotels in Japan, further growing the largest hotel portfolio among J-REITs to JPY 507.8
Properties		billion
Acquired in	◼	Aiming to capture domestic and overseas resort demand that is expected to increase as the Covid-19 pandemic diminishes
August 2023
◼	Potential sponsor pipeline has more than 60 hotels with 6,800 rooms operated by MyStays Hotel Management ("MHM"), which are
		owned by sponsor-related entities
	◼	Comparing the KPIs of the 75 domestic hotels owned by INV between this period and the same period in 2019, ADR was 19.2% higher
		than in the same period in 2019. Although the Occupancy rate is still 5.7 points lower, RevPAR achieved JPY 10,462, which is 11.5%
		higher than in the December 2019 FP
	◼	GOP of 75 domestic hotels this period increased by 34.7% from the previous period or by 9.0% from the same period in 2019 as a result of
Domestic		the steady recovery of non-room revenues such as weddings and banquets to 2019 levels despite various cost increases
Portfolio	◼	The strategy to maximize GOPPAR (GOP per the number of rooms available for sale) by the major tenant, MHM, has continued to be
		successful. The GOP margin of the 73 domestic properties managed by MHM ("73 MHM properties") increased from 37.4% the previous
		period to 40.7% this period
	◼	NOI of 41 residential properties for this period was JPY 1,120 million, up 0.2% from the same period in 2022. The initiative to increase
		rent, taking advantage of the population returning to urban centers, was successful	2

Ⅰ . Executive Summary (2)

	◼	RevPAR for the two Cayman hotels for this period was USD 273, 15.3% higher than USD 237 in the same period in 2019 due to a
		significant increase in ADR
Cayman Hotel	◼	USD based Management Contract Revenue this period increased by 10.8% compared to the same period in 2022, and increased by 10.0%
	over the same period in 20191
Portfolio
	◼	Average Occupancy rate for this period was 64.8%, 7.5 points lower than the same period in 2019. Going forward, a further recovery in
		air traffic to the Cayman Islands, which was reduced due to the Covid-19 pandemic, is expected to increase Occupancy to 2019 levels,
		leading to an increase in revenues
	◼	Executed bank loans (including refinancing) of JPY 141.5 billion in total this period and JPY 33.7 billion in January 2024
	◼	Diversified financing sources through INV's first issuance of JPY 3.5 billion in total of green bonds in September and December 2023, and
Financial		JPY 6.0 billion of investment corporation bonds for retail investors in February 2024
◼	Increased average duration of outstanding interest-bearing debt from 0.9 years (as of June 30, 2023) to 2.9 years (as of February 26, 2024)
Condition
		and diversified maturity dates
	◼	Executed interest rate swap transactions to hedge the risk of rising interest rates, resulting in an increase in the fixed interest rate ratio
		from 21% (as of June 30, 2023) to 50% (as of February 26, 2024)
	◼	Forecasts remain unchanged from those announced on December 19, 2023, with DPU expected to be JPY 1,767 for the June 2024 FP and
Forecasts for		JPY 1,739 for the December 2024 FP. Forecasted annual DPU of JPY 3,506 for 2024 is 3.7% higher than that of JPY 3,381 for 2019
June 2024 Fiscal
◼
Period (FP) and	The forecast factors in a rebound in domestic demand following the end of the "National Travel Discount Campaign" program. Overall
December 2024		inbound demand continues to steadily recover despite a slow recovery in Chinese travelers
Fiscal Period
◼	The portfolio of 41 residential properties and one commercial property is expected to maintain stable returns
(FP)
	◼	The impact of the 2024 Noto Peninsula Earthquake is negligible

3

(Note 1) The ownership structure of the two Cayman hotels was changed from a Tokumei Kumiai structure to a direct ownership structure in the middle of June 2019 FP. Therefore, Management Contract Revenue in June 2019 FP is a hypothetical number, assuming INV has held two Cayman hotels in the current direct ownership structure from the beginning of 2019

Ⅱ. Summary of December 2023 FP Results and 2024 Forecasts Ⅱ-1. Financial Highlights for December 2023 FP

• Increase in revenues and income due to the contribution from the six hotels acquired on August 1, 2023 and the recovery in hotel business performance of the existing hotels this period, despite the decrease in the management contract revenue of the two Cayman from the previous period due to seasonal factors Operating revenue increased by 18% to JPY 18,819 million and DPU was 12% higher than the previous period reaching JPY 1,640
• Compared to the forecast for this fiscal period announced on December 19, 2023, operating revenue showed a slight increase and DPU increased by 3%

											Major Causes for Variance	(JPY million)
			June 2023 FP	December 2023 FP	Variance
								Operating revenue
					Amount		（％）
								✓
Operating revenue	15,914	18,819	2,904		18.2%			Increase in revenue from six hotels newly acquired: +2,104
			✓
	Real estate rental revenues	12,000	16,696	4,695		39.1%			Increase/decrease in revenue from existing portfolio: +2,590
					(of which, hotel: +2,609 / residential: -18）
		Hotel Rents (Variable rent)	4,615	7,441	2,826		61.2%			✓
					Decrease in management contract revenue: -1,790
		Hotel Rents (Fixed rent)	5,498	7,469	1,971		35.9%
						→50% decrease in USD basis and 45.8% decrease in JPY basis (FX
		Residential Rents	1,392	1,388	-3		-0.2%
						rate in Dec 2023 FP was USD 1 = JPY 145.4, an 8.4%
	Management contract revenue	3,914	2,123	-1,790		-45.8%				depreciation of the yen from the previous period)
	TMK Dividend amount	-	-	-		-			Operating expenses
	Gain on sale of properties	-	-	-		-			✓	Increase in expenses for six hotels newly acquired: +457
Operating expenses	5,558	6,230	671		12.1%				(of which, increase in depreciation expenses: +447)
	Real estate rental expenses	4,488	5,096	608		13.6%			✓	Increase in expenses for existing portfolio: +150
											(of which, increase in depreciation expenses: +18)
		Taxes and other public charges	596	754	158		26.5%			✓
										Increase in management contract expenses (overseas hotels): +85
		Depreciation expenses	3,311	3,776	465		14.1%
	Management contract expenses	649	734	85		13.2%			Non-operating income
										✓	Decrease in foreign exchange gain: -178
		Depreciation expenses	435	441	6		1.4%
NOI	14,523	17,205	2,681		18.5%			Non-operating expenses
NOI after depreciation	10,777	12,987	2,210		20.5%			✓ Increase in loan-related costs: +81
Operating income	10,356	12,588	2,232		21.6%			✓ Increase in interest expenses: +95
Non-operating income	182	0	-181		-99.8%			✓ Increase in interest expenses on investment corporation bonds: +29
Non-operating expenses	1,624	1,556	-68		-4.2%			✓ Increase in foreign exchange losses: +76
Ordinary income	8,914	11,033	2,118		23.8%			✓ Decrease in derivative losses: -507
Net income	8,913	11,032	2,118		23.8%			✓ Increase in investment unit issuance costs: +152
Distribution per Unit (JPY)	1,464	1,640	176		12.0%			Distribution per Unit (JPY)
Operating Days	181	184	-		-
			✓	Increase from the previous period: +176

4

Ⅱ-2. Operating Revenue Composition

• Operating revenue increased by 18.2% from the previous period due to a significant increase in both variable and fixed rents for domestic variable-rent hotels driven by the recovery of the performance and external growth
• In addition, operating revenue increased 13.3% from the December 2019 FP exceeding the pre-pandemic period level, despite a decrease in revenue from the disposition of residential and commercial properties

Portfolio Composition by Operating Revenue1

JPY 15, 914 mm

JPY 18,819 mm

Management

JPY 16,221 mm

JPY 16,616 mm

＋13.3％

11.3％

Contract Revenue

8.4％

(Cayman hotels)

20.0％

4.1％

TMK Dividend

24.6％

38.3％

Amount (SGTB)

5.1％

JPY 11,929 mm

Variable Rent Hotel

32.1％

14.6％

(variables)

26.6％

Variable Rent Hotel

JPY 7,363 mm

26.5％

32.6％

(fixed)

JPY 5,837 mm

JPY 6,212 mm

12.1％

JPY 5,738 mm

JPY 3,806 mm

23.6％

37.0％

8.6％

16.3％

Fixed Rent Hotel

19.4％

2.1％

23.1％

40.3％

17.0％

33.3％

41.9％

30.2％

2.4％

2.3％

22.9％

31.7％

31.9％ 9.8％

37.0％

Residential

20.4％

5.2％

6.6％

17.9％

％

2.1％

1.5％

14.3％

30.0％

37.1％

48.4％

6.4％

6.0％

3.2

1.2％

30.9％

2.5％

2.3％

9.5％

0.9％

8.0％

0.8％

Commercial

1.9％

1.9％

4.1％

5.2％

24.2％

12.5％

properties

7.9％

December FP

June FP

December FP

June FP

December FP

June FP

December FP

June FP

December FP

June FP

CY2019

CY2020

CY2021

CY2022

CY2023

(JPY million)

			CY2019			CY2020			CY2021			CY2022			CY2023
		June FP	December FP	June FP	December FP	June FP	December FP	June FP	December FP	June FP	December FP
Management
Contract Revenue2	3,240	20.0%	1,397	8.4%	890	12.1%	0	0.0%	0	0.0%	0	0.0%	1,013	16.3%	1,746	14.6%	3,914	24.6%	2,123	11.3%
(Cayman hotels)
TMK Dividend
Amount	827	5.1%	673	4.1%	634	8.6%	0	0.0%	0	0.0%	0	0.0%	0	0.0%	0	0.0%	0	0.0%	0	0.0%
(SGTB)
	Variable Rent
	Hotel	4,307	26.6%	5,332	32.1%	1,255	17.0%	1,113	19.4%	79	2.1%	1,350	23.1%	2,068	33.3%	3,167	26.5%	5,194	32.6%	7,198	38.3%
Hotel	(variables)
Variable Rent
Hotel	3,834	23.6%	6,144	37.0%	1,689	22.9%	1,818	31.7%	1,212	31.9%	2,162	37.0%	1,112	17.9%	4,997	41.9%	4,807	30.2%	7,576	40.3%
	(fixed)
	Fixed Rent Hotel	388	2.4%	386	2.3%	381	5.2%	376	6.6%	374	9.8%	371	6.4%	373	6.0%	384	3.2%	341	2.1%	281	1.5%
Residential	3,316	20.4%	2,374	14.3%	2,211	30.0%	2,130	37.1%	1,840	48.4%	1,805	30.9%	1,502	24.2%	1,491	12.5%	1,516	9.5%	1,497	8.0%
Commercial	306	1.9%	307	1.9%	301	4.1%	300	5.2%	299	7.9%	147	2.5%	141	2.3%	141	1.2%	141	0.9%	141	0.8%
properties
	Total	16,221	100.0%	16,616	100.0%	7,363	100.0%	5,738	100.0%	3,806	100.0%	5,837	100.0%	6,212	100.0%	11,929	100.0%	15,914	100.0%	18,819	100.0%

5

(Note 1) Based on the properties owned by INV during each fiscal period respectively. The gain on sale is excluded

(Note 2) The figure for June 2019 FP includes the amount of TK dividends INV received for the fiscal period before INV owned Cayman hotels directly

Ⅱ-3. Summary of June 2024 FP Forecast

• For the June 2024 FP, operating revenue is expected to increase by 26.9% to JPY 20,199 million and DPU is expected to increase by 20.7% to JPY 1,767 from the same period last year, reflecting a further recovery of hotel earnings driven by inbound tourism and the impact of Covid-19 being completely removed
• Further upside is expected depending on the recovery of demand created by the increase in Chinese tourists visiting Japan during and after Chinese New Year when the timetables of airline flights switch to the summer schedule
• TMK dividend amount (Sheraton), which will be recorded for the first time in eight fiscal periods, is expected to be JPY 404 million higher than in the same period in 2019 due to the inclusion of special factors

			June 2023 FP	June 2024 FP	Variance
					Amount		（％）
Operating revenue	15,914	20,199	4,284		26.9%
	Real estate rental revenues	12,000	14,603	2,602		21.7%
		Hotel Rents (Variable rent)	4,615	6,982	2,367		51.3%
		Hotel Rents (Fixed rent)	5,498	5,853	355		6.5%
		Residential Rents	1,392	1,409	17		1.2%
	Management contract revenue	3,914	4,363	449		11.5%
	TMK Dividend amount	-	1,231	1,231		-
	Gain on sale of properties	-	-	-		-
Operating expenses	5,558	6,481	923		16.6%
	Real estate rental expenses	4,488	5,082	594		13.2%
		Taxes and other public charges	596	649	53		8.9%
		Depreciation expenses	3,311	3,856	545		16.5%
	Management contract expenses	649	731	82		12.6%
		Depreciation expenses	435	459	24		5.6%
NOI	14,523	18,701	4,177		28.8%
NOI after depreciation	10,777	14,385	3,607		33.5%
Operating income	10,356	13,717	3,360		32.5%
Non-operating income	182	-	-182		-100.0%
Non-operating expenses	1,624	1,830	205		12.7%
Ordinary income	8,914	11,887	2,972		33.3%
Net income	8,913	11,886	2,972		33.4%
Distribution per Unit (JPY)	1,464	1,767	303		20.7%
Operating Days	181	182	-		-

Major Causes for Variance (June 2024 FP vs June 2023 FP)

(JPY million)

Operating revenue

• Increase in existing hotel rents (variable rent and fixed rent): +1,334
• Increase in rents from six hotels newly acquired (variable rent and fixed rent in total): +1,388
• Increase in residential rents: +17
• Increase in management contract revenue: +449
  →10.8% increase in USD basis and 11.5% increase in JPY basis (estimated with FX rate for June 2024 FP of USD 1= JPY 135.0, a 0.7% depreciation of the yen from the same period last year)

Operating expenses/Non-operating expenses

• Increase in real estate rental expenses : +594
• • of which, increase from six hotels newly acquired : +583
• Increase in management contract expenses : +82
• • Increase in insurance premiums, etc : +58, depreciation expenses: +24
• Increase in non-operating expenses : +205
• • Increase in interest expenses : +546, Interest expenses on investment corporation bonds: +70, loan-related costs: +26, decrease in derivative losses: -444

Non-operating income

• Decrease in non-operating income: -182
  →Decrease in foreign exchange gain: -178

6

Ⅱ-4. Summary of December 2024 FP Forecast

• For the December 2024 FP, operating revenue is expected to increase by 7.6% to JPY 20,255 million and DPU is expected to increase by 6.0% to JPY 1,739 from the same period last year, reflecting the rent increase from the existing hotels and the full-period contribution from newly acquired hotels on August 1, 2023, as well as rent increase from the residential portfolio
• TMK dividend amount (Sheraton) is expected to reach JPY 679 million, its approximate stabilized level, which is about 1% (JPY 6 million) higher than the same period in 2019

			December 2023 FP	December 2024 FP	Variance
					Amount		(％)
Operating revenue	18,819	20,255	1,436		7.6%
	Real estate rental revenues	16,696	17,617	921		5.5%
		Hotel Rents (Variable rent)	7,441	8,241	800		10.8%
		Hotel Rents (Fixed rent)	7,469	7,623	153		2.1%
		Residential Rents	1,388	1,413	24		1.7%
	Management contract revenue	2,123	1,958	-164		-7.8%
	TMK Dividend amount	-	679	679		-
	Gain on sale of properties	-	-	-		-
Operating expenses	6,230	6,745	515		8.3%
	Real estate rental expenses	5,096	5,292	195		3.8%
		Taxes and other public charges	754	841	87		11.6%
		Depreciation expenses	3,776	3,891	115		3.1%
	Management contract expenses	734	788	53		7.3%
		Depreciation expenses	441	481	39		9.0%
NOI	17,205	18,547	1,341		7.8%
NOI after depreciation	12,987	14,174	1,186		9.1%
Operating income	12,588	13,509	921		7.3%
Non-operating income	0	-	0		-100.0%
Non-operating expenses	1,556	1,810	254		16.3%
Ordinary income	11,033	11,699	666		6.0%
Net income	11,032	11,698	666		6.0%
Distribution per Unit (JPY)	1,640	1,739	99		6.0%
Operating Days	184	184	-		-

Major Causes for Variance (December 2024 FP vs December 2023 FP)

(JPY million)

Operating revenue

• Increase in existing hotel rents (variable rent and fixed rent in total) : +558
• Increase in rents (variable rent and fixed rent in total) from full-period contribution from six hotels newly acquired on August 1, 2023: +395
• Increase in residential rents: +24
• Decrease in management contract revenue due to the large-scale renovation at Sunshine Suites, etc.: -164
• • 0.6% decrease in USD basis and 7.8% decrease in JPY basis (estimated with FX rate for December 2024 FP of USD 1 = JPY 135.0, a 7.2% appreciation of the yen from the same period last year)
• Increase in TMK dividend amount: +679

Operating expenses/Non-operating expenses

• Increase in real estate rental expenses : +195
• • of which, increase from six hotels newly acquired : +147
• Increase in management contract expenses : +53
• • Increase in insurance premiums, etc.: +13, depreciation expenses: +39
• Increase in non-operating expenses : +254
• • Increase in interest expenses : +462, interest expenses on investment
    corporation bonds: +51, decrease in loan-related costs: -44, foreign
    exchange losses: -76, increase in derivative losses: +9, decrease in
    investment unit issuance costs: -152

7

Ⅱ-5. Impact from the 2024 Noto Peninsula Earthquake

Overall impact of the earthquake throughout 2024 is expected to be negligible

• No material damage occurred at INV's six hotels located in the affected areas, though the earthquake caused some damage to facilities and equipment
• Cancellations from general travelers were observed just after the earthquake but demand from disaster recovery work has been generated by media, communication companies, insurers and other construction related workers. Slow down of demand for the banquet business was observed in addition to the cancellations caused by the earthquake
• Recovery of tourism demand is expected from the "Hokuriku Support Discount" program and the extension of the Hokuriku Shinkansen Line

		Impact from the earthquake
	•	Temporary decrease in demand caused by the
Accommodation
		cancellations from general travelers
	•	Increase in demand from media, communication
		companies, insurers and other construction related
		workers

Banquet

• Temporary decrease in demand due to the voluntary restraint from organizing new events/parties in addition

to the cancellations caused by the earthquake

Facilities

• Some increase in maintenance cost, CAPEX and

depreciation expenses due to damage to the facilities and equipment is expected

Hotel MyStays

Premier Kanazawa

Art Hotel Niigata

Station

Hotel MyStays

Kanazawa

Castle

Art Hotel

Joetsu

• Expect almost no impact from the earthquake on the operation of INV's hotels

located in the affected areas

Comfort

Comfort Hotel Tsubame-Sanjo

• Expect recovery in tourism demand from the "Hokuriku Support Discount" program which subsidizes up to 50% of travel costs and extension of the Hokuriku Shinkansen Line

Hotel Toyama

Limited Service Hotel

Full Service Hotel

8

Ⅱ-6. Domestic Hotel KPIs （Past Performance and Forecasts for 2024）

• Comparing the KPIs of the 75 domestic hotels owned by INV between this period and the same period in 2019, ADR was 19.2% higher than in the same period in 2019. Although the Occupancy rate is still below the December 2019 FP, RevPAR achieved JPY 10,462, 11.5% higher than the December 2019 FP while GOP increased 1.09 times compared to the same period in 2019
• 2023 full year Occupancy is still 5.9 points lower than that of 2019, however all other KPIs all exceeded the 2019 full year level
• No impact from Covid-19 is expected in 2024, and annual GOP is expected to increase by approximately 8% in 2024 compared to 2023

Domestic 75 hotels1 (excluding those described as "Domestic 81 hotels")

			June FP				December FP				Full Year
					Domestic		ADR	Domestic					Domestic
					81 hotels		81 hotels					81 hotels
(JPY)							+19.2%
							12,692	13,670						12,953
14,000						12,054					13,810
							12,649
			11,423		10,615						12,071	12,629
				11,545						11,777
12,000			10,868
10,109			10,199					10,366
10,000														9,004
	7,504
8,000
6,000
4,000
2,000
0
	2019	2022	2023	2024	2023	2024	2019	2022	2023	2024	2023	2024	2019	2022	2023	2024	2023	2024
					Domestic					Domestic					Domestic
						Occ						81 hotels
					81 hotels			81 hotels
100%	86.8%		85.0%		84.6%	88.4%	87.8%		87.6%	87.6%		86.4%		86.1%
				81.7%	81.5%
			80.7%	80.5%			82.7%		82.5%
80%						75.9%					68.8%
	61.5%
60%
40%
20%
0%
	2019	2022	2023	2024	2023	2024	2019	2022	2023	2024	2023	2024	2019	2022	2023	2024	2023	2024

		June FP				December FP				Full Year
					Domestic	RevPAR	Domestic					Domestic
					81 hotels	81 hotels					81 hotels
(JPY)
12,000								+11.5%	11,143	12,102			10,428		11,153
				10,193						11,279
			9,705			10,462							10,295
			9,295		9,380						9,624
10,000											9,078
8,772		8,772
8,000								7,744
															6,192
6,000		4,614
4,000
2,000
0
	2019	2022	2023	2024	2023	2024	2019		2022	2023	2024	2023	2024	2019	2022	2023	2024	2023	2024
(JPY million)				Domestic	GOP	2	Domestic					Domestic
					81 hotels			81 hotels					81 hotels
40,000															+8.1%
																26,439		30,260
30,000														24,456	24,465		27,960
												16,846
							1.09 times 14,399
20,000			12,039	13,413	16,245
					12,884	14,041
	11,572			11,715						12,026
	10,424
				8,855
10,000
		3,171
0
	2019	2022	2023	2024	2023	2024	2019		2022	2023	2024	2023	2024	2019	2022	2023	2024	2023	2024

（Note 1）Simulated KPI based on 75 hotels; of the 84 domestic hotels (including Sheraton Grande Tokyo Bay Hotel, the underlying asset of preferred equity interest held by INV) owned at the beginning of the December 2023 FP, nine hotels with fixed-rent lease agreements are excluded, assuming all properties were owned since the beginning of 2019. The performance for the
pre-acquisition period, which is based on actual results provided by sellers with certain adjustments assuming INV owned them, are subject to change caused by the adjustments based on differences in accounting treatments, since it is difficult to adjust them due to the timing even if the figures are based on actual performance. In calculating the GOP, added the 49% of
GOP for Sheraton Grande Tokyo Bay Hotel, which means INV's pro rata portion of the amount of JV TMK's preferred equity owned by INV. The rent paid for APA Hotel Yokohama‐Kannai, is regarded as GOP of the hotel. Furthermore, among the nine hotels excluded, the contract with the major tenant TOKYU HOTELS CO., LTD. for "Takamatsu Tokyu REI Hotel"	9
has been modified to "fixed-rent plus variable rent" since April 25, 2023. However, from the viewpoint of the continuity of data, it is treated as a hotel with fixed rent and continues to be excluded. The same shall apply hereinafter. Domestic 81 hotels; the above 75 hotels plus the six hotels acquired in August 2023.

（Note 2）The GOP for the period from June 2020 FP to December 2022 FP includes the employment adjustment subsidies received by the operator, and there is a slight discrepancy with the previous disclosure since the amount was not finalized. There is no change in the variable rent for each fiscal period due to the confirmation of the amount received