Invincible Investment : Financial Results Materials

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

Invincible Investment

Corporation

Financial Summary

for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

February 26, 2024

Name	: Invincible Investment Corporation ("INV")
Representative	: Naoki Fukuda, Executive Director
Stock Listing	:	Tokyo Stock Exchange
Securities Code	:	8963
URL	:https://www.invincible-inv.co.jp/en/
Contact	: Consonant Investment Management Co., Ltd.
		(Asset Manager of INV)
		Jun Komo, General Manager of Planning Department
		Tel. [phone]
Start date for
dividend distribution	:	March 22, 2024

This English language notice is a translation of the Japanese-language notice released on February 26, 2024 and was prepared solely for the convenience of, and reference by, non-Japanese investors. It is not intended as an inducement or solicitation for investment. We caution readers to undertake investment decisions based on their own investigation and responsibility. This translation of the original Japanese- language notice is provided for informational purposes only, and no warranties or assurances are given regarding the accuracy or completeness of this English translation. Readers are advised to read the original Japanese-language notice. In the event of any discrepancy between this translation and the Japanese original, the latter shall prevail in all respects.

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

(Figures are rounded down to the nearest JPY million)

1. Financial Results for the Fiscal Period ended December 31, 2023 (from July 1, 2023 to December 31, 2023)

1. Operating Results

(Percentages indicate percentage change from the preceding period)

	Operating Revenues		Operating Income	Ordinary Income	Net Income
	JPY million	%		JPY million	%	JPY million	%	JPY million	%
Fiscal period ended	18,819	18.2		12,588	21.6	11,033	23.8	11,032	23.8
December 31, 2023
Fiscal period ended	15,914	33.4		10,356	65.5	8,914	75.6	8,913	75.6
June 30, 2023
	Net Income per Unit		Net Income /	Ordinary Income /	Ordinary Income /
		Unitholders' Equity	Total Assets	Operating Revenues
		JPY				%		%			%
Fiscal period ended
December 31, 2023		1,639				4.1		2.1			58.6
Fiscal period ended		1,462				3.5		1.8			56.0
June 30, 2023
(2) Distributions
	Distribution				Excess Profit Distribution
	(Excluding excess profit distribution)		Dividend Payout	Distribution
								Ratio	/ Net Assets
	Per Unit	Total		Per Unit	Total
	JPY		JPY million		JPY	JPY million		%		%
Fiscal period ended	1,640		11,048		-	-		100.1		3.9
December 31, 2023
Fiscal period ended	1,464		8,925		-	-		100.1		3.5
June 30, 2023

(Note 1) Dividend Payout Ratio is calculated in accordance with the following formula and is rounded to the nearest one decimal place: Dividend Payout Ratio = Distribution Amount (Excluding excess profit distribution) ÷ Net Income × 100

(Note 2) Distribution / Net Assets is calculated based on the figures excluding excess profit distribution.

1. Financial Position

		Total Assets	Net Assets	Net Assets / Total	Net Assets per Unit
		JPY million	JPY million	%	JPY
Fiscal period ended	563,393	290,305	51.5	43,090
December 31, 2023
Fiscal period ended
June 30, 2023	496,819	254,024	51.1	41,665
(Note)	Net Assets per Unit is calculated based on the number of investment units issued and outstanding at the end of each fiscal

period and is rounded to the nearest yen.

(4) Cash Flows

	Cash Flows from	Cash Flows from	Cash Flows from	Closing Balance of
	Operating	Investment	Financing	Cash and
	Activities	Activities	Activities	Cash Equivalents
	JPY million	JPY million	JPY million	JPY million
Fiscal period ended	12,773	(58,442)	52,520	34,892
December 31, 2023
Fiscal period ended	13,782	924	(7,188)	28,041
June 30, 2023

2

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

2. Forecasts for the Fiscal Period ending June 30, 2024 (from January 1, 2024 to June 30, 2024) and the Fiscal Period ending December 31, 2024 (from July 1, 2024 to December 31, 2024)

(Percentages indicate percentage change from the preceding period)

Distribution per

Excess Profit

Operating

Operating

Ordinary

Unit (excluding

Net Income

Distribution per

Income

Income

Revenues

excess profit

Unit

distribution)

JPY

JPY

JPY

JPY

million

%

million

%

million

%

million

%

JPY

JPY

Fiscal period

ending

20,199

7.3

13,717

9.0

11,887

7.7

11,886

7.7

1,767

-

June 30, 2024

Fiscal period

ending

20,255

0.3

13,509

(1.5)

11,699

(1.6)

11,698

(1.6)

1,739

-

December 31, 2024

(Reference) Estimated net income per unit for the fiscal periods ending June 30, 2024 and the fiscal periods ending December 31, 2024 are

JPY 1,764 and JPY 1,736.

※Others

(1) Changes in Accounting Policies, Accounting Estimates or Restatements

(a)

Changes in Accounting Policies due to Revisions to

Accounting Standards and Other Regulations

None

(b)

Changes in Accounting Policies due to Other Reasons

None

(c)

Changes in Accounting Estimates

None

(d) Restatements

None

(2) Number of Investment Units Issued and Outstanding
(a) Number of Units Issued and Outstanding	December 31, 2023	6,737,121	June 30, 2023	6,096,840
as of the End of the Fiscal Period (Including Treasury Units)
(b) Number of Treasury Units as of the End of the Fiscal Period	December 31, 2023	0	June 30, 2023	0

(Note) Please refer to "Notes Related to Per Unit Information" regarding the number of investment units which is the basis for the

calculation of net income per unit.

• Financial Summary report is not subject to audit procedure by certified public accountants or audit corporations.
• Special Consideration
  The forward-looking statements contained in this financial summary report are based on the information currently available to us and certain assumptions which we believe are reasonable. Actual operating performance may differ significantly due to factors we cannot predict as of the date of this document, including gains or losses from the disposition of properties, repayment of borrowings, decreases in rents and changes in operating conditions. Unless otherwise specified herein, amounts less than JPY 1 are rounded down, and ratios are rounded to the nearest one decimal place.

3

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

1. Operating Conditions

1. Operating Conditions

a Overview of the Fiscal Period Ended December 31, 2023

1. Main Trends of INV

INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation Act (Act No. 198 of 1951, as amended). In May 2004, INV was listed on the Osaka Securities Exchange (application for delisting was made in August 2007), and in August 2006 was listed on the Real Estate Investment and Trust Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).

After the absorption-type merger with LCP Investment Corporation ("LCP") was implemented on February 1, 2010, INV issued new investment units through a third-party allotment on July 29, 2011 and refinanced its debt. Calliope Godo Kaisha ("Calliope"), an affiliate of the Fortress Investment Group LLC ("FIG" and together with Calliope and other affiliates of FIG, collectively the "Fortress Group") was the main allottee, and the sponsor changed to the Fortress Group.

Ever since the commencement of sponsorship from the Fortress Group (Note 1), INV has been focusing its efforts on improving the profitability of its portfolio and establishing a revenue base in order to secure stable distributions, and has strengthened the lender formation through new borrowings and the refinancing of existing bank borrowings, thereby creating a financial base for external growth. With this platform as a base, in June 2014, Consonant Investment Management Co., Ltd., the asset manager to which INV entrusts the management of its assets ("CIM") revised the Investment Guidelines for INV, positioned hotels as a core asset class alongside residential properties with a view towards expanding investments in the hotel sector in which demand is forecasted to rise going forward, and has expanded its portfolio.

In the Fiscal Period ended December 31, 2023 ("Reporting Period"), INV implemented a global offering of new investment units for the first time in four years and acquired six domestic hotels including the flagship "Fusaki Beach Resort Hotel & Villas", or the largest property in INV's portfolio. INV's portfolio at the end of the Reporting Period comprised of 134 properties (92 hotels (Note 2) (Note 3), 41 residential properties and one retail facility) with a total acquisition price of JPY 548,646 million (Note 4). Furthermore, INV's hotel portfolio has the largest asset size (Note 5) of JPY 507,861 million (92 properties, 16,624 rooms) among all J-REITs (real estate investment corporations which are listed on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market, hereinafter the same shall apply) hotel portfolios including Hotel J-REITs (Note 6) .

(Note 1) Calliope transferred 80.0% of issued shares to Fortress CIM Holdings L.P., a subsidiary of SoftBank Group and 20.0% to SoftBank Group Corp. ("SoftBank Group") on March 29, 2018, but the SoftBank Group transferred its issued shares of CIM to Fortress CIM Holdings L.P. As of the date of this document, SoftBank Group indirectly owns 100% of issued shares of CIM through Fortress CIM Holdings L.P. The SoftBank Group announced that it has entered into a definitive agreement to transfer its interest in the indirect parent company of Fortress CIM Holdings L.P. to Mubadala Capital and others during the first quarter of 2024.

(Note 2) The preferred equity interest held by INV is counted as one property. Such preferred equity interest issued by a special purpose company (tokutei mokuteki kaisha) refers to 178,458 units of the preferred equity interest issued by Kingdom Special Purpose Company (equivalent to 49.0% of the outstanding preferred equity interest), which owns the trust beneficiary interest of the Sheraton Grande Tokyo Bay Hotel as an underlying asset. The property is classified as a hotel, based on the use of Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest, and INV's investment amount of the preferred equity interest is used as the acquisition price of the preferred equity interest, unless otherwise stated. The "underlying asset" refers to the real estate or the real estate related assets owned by a TK operator of TK interest or a TMK relating to the preferred equity interest which INV owns, thus the real estate or the real estate related assets which will be the revenue source of INV. Hereinafter the same shall apply.

(Note 3) From September 28, 2018 (Cayman Island local time; September 29, 2018 in Japan local time), INV owned 100% of the TK interest in Seven Mile Resort Holdings Ltd. (the "Cayman SPC"), a Cayman Islands special purpose company that holds leasehold interests in Westin Grand Cayman Seven Mile

4

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

Beach Resort & Spa and Sunshine Suites Resort (collectively, the "Cayman Hotels") and ancillary assets as underlying assets. However, INV implemented the investment structure change (the "Structure Change" in some cases hereinafter) regarding the Cayman Hotels on May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time) and has directly held the Leasehold Interests, etc. of the Cayman Hotels thereafter. Both of the TK interest and the Cayman Hotels are counted as two properties before and after the Structure Change. In addition, the "Leasehold Interests, etc." means leasehold interests (rights equivalent to long-term real estate leases on land and buildings under the British Cayman laws) and furniture, fixtures, equipment, ornaments, kitchen instrument, and other assets required for hotel operations. Hereinafter the same shall apply.

(Note 4) Due to the Structure Change, the book value of the leasehold interests of the Cayman Hotels recorded by the Cayman SPC as of May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time), when INV succeeded the leasehold interests of the Cayman Hotels from the Cayman SPC via distribution in kind in connection with the termination of TK agreement, is deemed as the acquisition price of the Cayman Hotels. The book value is converted into JPY amount via exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contracts executed on July 26, 2018 and implemented on September 26, 2018 in connection with the investment in the TK interest by INV. Hereinafter the same shall apply.

(Note 5) Hotel J-REIT is defined as the J-REIT whose majority part of portfolio consists of hotel assets.

(Note 6) "The largest asset size … among all J-REIT hotel portfolios" refers to the total acquisition price of 92 hotels owned by INV as compared with the total acquisition price of hotels (including inns and other accommodation facilities) owned by listed investment corporations other than INV as of December 31, 2023.

1. Operational Environment and Performance

The portfolio NOI (Note 1) increased by 63.7% or JPY 6,695 million compared to the same period in the previous year (the December 2022 fiscal period) to JPY 17,205 million. Of which, the hotel portfolio NOI increased by JPY 6,692 million and the residential and retail portfolio NOI increased by JPY 3 million. Compared to the December 2019 fiscal period prior to the COVID-19pandemic, the portfolio NOI increased by 13.5% or JPY 2,041 million, of which the hotel portfolio NOI increased by JPY 2,830 million and the residential and retail portfolio NOI decreased by JPY 789 million due to asset sales.

Commentary on hotel and residential performance is as described below.

Domestic hotel portfolio continued to recover from the COVID-19 pandemic. Even with the gradual end of the "National Travel Discount Campaign" program, the government's travel subsidy program, there has been no decline in demand due to a reaction from the elimination of the program. Coupled with the strong inbound demand with the help of the weak yen, each performance metric of the domestic hotel portfolio increased significantly over the same period of the previous year's results. While occupancy rates (Note 2) were slightly below the 2019 levels, ADR (Note 3) and RevPAR (Note4) were above the 2019 levels. The GOP (Note 5) for the Reporting Period of the 75 domestic hotels (Note 6) owned by INV increased by 58.6% compared to the same period in the previous year (figures exclude nine domestic hotels with fixed-rent lease agreements among the 84 domestic hotels owned by INV as of the end of the Reporting Period, including Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV). The 75 domestic hotels recorded an occupancy rate of 82.7%, ADR of JPY 12,649, and RevPAR of JPY 10,462. Compared to the June 2019 fiscal period prior to the COVID-19 pandemic, the GOP increased by 9.0%, the occupancy rate decreased by 5.7pt, ADR increased by 19.2%, and RevPAR increased by 11.5%.

The Cayman Hotels recorded an average occupancy rate of 64.8%, ADR of USD 421, and RevPAR of USD 273 for the Reporting Period and the figures significantly exceeded the same period in the previous year. Compared to the June 2019 fiscal period prior to the COVID-19 pandemic, the occupancy rate decreased by 7.5pt, ADR increased by 28.6%, and RevPAR increased by 15.3%. Occupancy has not returned to 2019 levels as the number of commercial flights between the Cayman Islands and the U.S. have not recovered to 2019 levels, but ADR has grown significantly due to high demand and RevPAR has remained above 2019 levels.

Regarding the residential portfolio (Note 7), the occupancy rate (Note 8) of 41 residential properties remained unchanged from 95.9% at the end of the previous fiscal period to 95.9% at the end of the Reporting Period.

5

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

The average occupancy rate (Note 8) decreased by 0.3 points YoY to 96.0%. The NOI (Note 9) for the Reporting Period increased by 0.2% YoY.

In the Reporting Period, INV realized a rent increase for 55.9% (based on the number of contracts) of the new residential lease contracts, and the new rent increased by 1.3% compared to the previous rent across all new leases (Note 10). INV achieved a rent increase for 46.8% (based on the number of contracts) of contract renewals with an average rent increase of 1.3% compared to the previous rent across all renewal leases, while maintaining a high contract renewal rate (Note 11) of 75.1%. Combined, new lease and renewal lease rents were signed at 1.3% higher than the previous leases. The average rent per tsubo per month (Note 12) for the Reporting Period increased by 0.5% YoY to JPY 9,214.

The total appraisal value of 133 properties was JPY 629,041 million (one out of the 134 properties owned by INV at the end of the Reporting Period is excluded from the appraisal calculation: Sheraton Grande Tokyo Bay Hotel (preferred equity interest) for which the appraisal value of such interest is not available). The portfolio has an unrealized gain of JPY 133,259 million (Note 13) and an unrealized gain ratio of 26.9% (Note 13). The total appraisal value of 127 properties which were owned throughout the Reporting Period increased by 1.8% from JPY 560,963 million at the end of the June 2023 fiscal period to JPY 570,791 million at the end of the Reporting Period.

Key Performance Indicators of 75 Domestic Hotel Properties (Note 6)

			December 2023	Year-on-year change	vs 2H 2019
			fiscal period
	Occupancy Rate (Note 2)		82.7%		+6.8pt		-5.7pt
	ADR (JPY) (Note 3)		12,649		+24.0%	+19.2%
	RevPAR (JPY) (Note 4)		10,462		+35.1%	+11.5%
	GOP (JPY million) (Note 5)		14,041		+58.6%		+9.0％
Key Performance Indicators of Cayman Hotels
			December 2023	Year-on-year change	vs 2H 2019
			fiscal period
	Occupancy Rate (Note 2)		64.8%		+8.6pt		-7.5pt
	ADR (USD) (Note 3)		421		+4.6%	+28.6%
	RevPAR (USD) (Note 4)		273		+20.7%	+15.3%
	GOP (USD) (Note 5)		14,600,431		+10.8%	+10.0%
Key Performance Indicators of 41 Residential Properties (Note 7)
				December 2023	Year-on-year change
				fiscal period
	Occupancy Rate (Note 8)		96.0%		-0.3pt
	Average Rent per Tsubo per Month	9,214		+0.5%
	(JPY) (Note 12)
	NOI (JPY million) (Note 9)		1,120		+0.2%

(Note 1) "NOI" for the hotel properties is calculated in accordance with the following formula:

NOI＝ Rental Revenues ‐ Property Related Expenses + Depreciation Expenses + Dividend on the preferred equity interest (TMK dividend) + (Management Contract Revenue of the Cayman Hotels‐ Management Contract Expense)

(Note 2) "Occupancy rate" for the hotel properties is calculated in accordance with the following formula: Occupancy rate = total number of occupied rooms during a certain period ÷ total number of rooms available during the same period (number of rooms x number of days)

Hereinafter the same shall apply.

(Note 3) "ADR" means average daily rate, and is calculated by dividing total room sales (excluding service fees) for a certain period by the total number of days per room for which each room was occupied

6

	Financial Summary for the December 2023 Fiscal Period
	(from July 1, 2023 to December 31, 2023)
	during the same period. Hereinafter the same shall apply.
(Note 4)	"RevPAR" means revenues per available room per day, and is calculated by dividing total room sales
	for a certain period by total number of rooms available (number of rooms x number of days) during
	the same period, and is the same as the figure obtained by multiplying ADR by occupancy rates.
	Hereinafter the same shall apply.
(Note 5)	"GOP" means the gross operating profit, and is the amount remaining after deducting costs of hotel
	operations (the personnel, utility and advertising expenses and other expenses) and the management
	services fee to operators (if any) from the hotel's revenues. GOP for each fiscal period ended June
	2020 and onwards includes the amount of employment adjustment subsidies received by the hotel
	operators for the respective fiscal periods. In addition, GOP for the Sheraton Grande Tokyo Bay
	Hotel has been multiplied by 49%, or INV's ownership ratio of the preferred equity interest.
	Hereinafter the same shall apply.
(Note 6)	Of the 84 hotels held as of the end of December 2023 (including the Sheraton Grande Tokyo Bay Hotel,
	the underlying asset of the preferred equity interest of TMK owned by INV), the following nine hotels
	with fixed-rent lease agreements etc. are excluded: Super Hotel Shinbashi/Karasumoriguchi, Comfort
	Hotel Toyama, Super Hotel Tokyo-JR Tachikawa Kitaguchi, Super Hotel JR Ueno-iriyaguchi, Comfort
	Hotel Kurosaki, Comfort Hotel Maebashi, Comfort Hotel Tsubame-Sanjo, Comfort Hotel Kitami and
	Takamatsu Tokyu REI Hotel. In addition, the figures for the properties acquired after July 2019 are
	calculated on the assumption INV had acquired those properties on July 1, 2019, using the actual
	figures provided by the sellers of such properties for the period before the acquisition. "D48
	Takamatsu Tokyu REI Hotel" changed its contract with its major tenant, Tokyu Hotels Corporation,
	to fixed-rent with variable rent lease from April 25, 2023. However, in view of the continuity of
	disclosed data, this hotel will continue to be excluded. Hereinafter the same shall apply.
(Note 7)	Based on the 41 residential properties owned as of the end of December 2023. Hereinafter the same
	shall apply.
(Note 8)	"Occupancy Rate" and "Average Occupancy Rate" for the portfolio or the residential properties are
	calculated by dividing the sum of total leased area by the sum of total leasable area at the end of each
	month during the relevant period. Hereinafter the same shall apply.
(Note 9)	For the comparison of NOI for the residential properties, one-offinsurance-related revenues and
	expenses are excluded. Hereinafter the same shall apply.
(Note 10)	Increase or decrease in the sum of monthly rents on new or renewal contracts, or the total of both,
	compared with the sum of previous rents. Hereinafter the same shall apply.
(Note 11)	Renewal rate is calculated by the number of renewed contracts during the relevant period divided by
	the number of contracts due up for renewal during the relevant period.
(Note 12)	"Average Rent per Tsubo per Month" is calculated by dividing the total rental revenue (including
	common area charges) for each month by the sum of total leased area (tsubo) at the end of each month
	during the relevant period.
(Note 13)	The unrealized gain is calculated using the following formula: the appraisal value as of the end of the
	Reporting Period - book value as of the end of the Reporting Period.
	The unrealized gain ratio is calculated using the following formula: the unrealized gain ÷ book value
	as of the end of the Reporting Period.

1. Overview of Fund Raising
   As a result of the measures described below, INV's interest-bearing debt outstanding balance was JPY 269,100 million and the Interest-Bearing Debt ratio (Note 1) and LTV (appraisal value basis) (Note 2) were 47.2% and 42.2% respectively, as of the end of the Reporting Period, with an average interest rate (Note 3) of 0.63%.

(Note 1) Interest-Bearing Debt ratio uses the calculation formula below:

Interest-Bearing Debt ratio = total outstanding interest-bearing debt (excluding short-term consumption tax loan) / total assets x 100

(Note 2) LTV (appraisal value basis) uses the calculation formula below:

LTV = total outstanding interest-bearing debt (excluding short-term consumption tax loan) / total appraisal value (*) x 100

(*) Since appraisal value for Sheraton Grande Tokyo Bay Hotel (preferred equity interest) is not

7

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

available, the acquisition price of the preferred equity interest (JPY 17,845 million) is deemed as appraisal value of Sheraton Grande Tokyo Bay Hotel (preferred equity interest). For appraisal value of the Cayman Hotels, USD is converted into JPY amount via the forward exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contract entered into on July 26, 2018 and executed on September 26, 2018.

(Note 3) The average interest rate (annual rate) is calculated by the weighted average based on the outstanding balance of borrowings and rounded to two decimal places.

1. Equity Financing

INV implemented a global public offering which closed on July 31, 2023 (the number of new investment units issued: 609,792; total issue value: JPY 32,761 million) and a third party allotment which closed on August 28, 2023 (the number of new investment units issued: 30,489; total issue value: JPY 1,638 million) in order to procure part of the funds for the acquisition of six domestic hotels described in "(d) Overview of Acquisition of Assets".

1. Debt Financing

1. Borrowing of Funds

INV borrowed New Syndicate Loan (009) on July 14, 2023 and July 19, 2023 (total amount borrowed: JPY 59,343

million; interest rate: variable interest rate of 3-month JPY TIBOR plus 0.50000% for a duration of five years, variable interest rate of 3-month JPY TIBOR plus 0.30000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.69100%) for a duration of three years, variable interest rate of 1-month JPY TIBOR plus 0.30000% for a duration of three years, variable interest rate of 1-month JPY TIBOR plus 0.20000% for a duration of one year, variable interest rate of 3-month JPY TIBOR plus 0.50000% for a duration of five years, variable interest rate of 3-month JPY TIBOR plus 0.30000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.69600%) for a duration of three years, variable interest rate of 1-month JPY TIBOR plus 0.30000% for a duration of three years and variable interest rate of 1-month JPY TIBOR plus 0.20000% for a duration of one year), which was arranged by Mizuho Bank, Ltd. in order to repay New Syndicate Loan (I) in the amount of JPY 9,659 million due on July 14, 2023 and New Syndicate Loan (003) in the amount of JPY 49,684 million due on July 19, 2023.

INV borrowed New Syndicate Loan (010) on August 1, 2023 (total amount borrowed: JPY 29,856 million; interest

rate: variable interest rate of 3-month JPY TIBOR plus 0.50000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 1.06900%) for a duration of five years, variable interest rate of 3-month JPY TIBOR plus 0.30000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.69100%) for a duration of three years and variable interest rate of 1-month JPY TIBOR plus 0.20000% for a duration of one year), which was arranged by Mizuho Bank, Ltd. in order to pay a portion of the acquisition price and related expenses for the acquisition of the six domestic hotels described in "(d) Overview of Acquisition of Assets" with the equity financing described in the said (i).

Moreover, INV borrowed Term Loan (016) on September 14, 2023 (total amount borrowed: JPY 3,000 million;

interest rate: variable interest rate of 3-month JPY TIBOR plus 0.40000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.87900%) for a duration of four years), which was arranged by Sumitomo Mitsui Banking Corporation in order to repay Term Loan (006) in the amount of JPY 3,000 million due on September 14, 2023.

Furthermore, INV borrowed New Syndicate Loan (011) on September 26, 2023 and October 13, 2023 (total amount borrowed: JPY 43,165 million; interest rate: variable interest rate of 3-month JPY TIBOR plus 0.50000% for a duration of five years variable interest rate of 3-month JPY TIBOR plus 0.40000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.89400%) for a duration of four years, variable interest rate of 3-month JPY TIBOR plus 0.30000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.69100%) for a duration of three years, variable interest rate of 1-month JPY TIBOR plus 0.20000% for a duration of one year, variable interest rate of 3-month JPY TIBOR plus 0.50000% for a duration of five years and variable interest rate of 3-month JPY TIBOR plus 0.40000% (by the interest swap agreement on December 22, 2023, it is fixed, in effect, at 0.87900%) for a duration of four years), which was arranged by Mizuho Bank, Ltd. and Term Loan (017) on September 26, 2023 (total amount borrowed: JPY 1,900 million; interest rate: variable interest rate of 3-month JPY TIBOR plus 0.50000% (by the interest swap agreement on December 22,

8

Financial Summary for the December 2023 Fiscal Period

(from July 1, 2023 to December 31, 2023)

2023, it is fixed, in effect, at 1.05400%) for a duration of five years), which was arranged by The Tokyo Star Bank, Limited in order to repay New Syndicate Loan (J) in the amount of JPY 13,119 million, New Syndicate Loan

1. in the amount of JPY 28,571 million and Term Loan (007) in the amount of JPY 1,256 million due on September 26, 2023 and New Syndicate Loan (H) in the amount of JPY 3,565 million due on October 13, 2023.

In addition, INV borrowed Term Loan (018) on November 29, 2023 (total amount borrowed: JPY 4,321 million;

interest rate: variable interest rate of 3-month JPY TIBOR plus 0.60000% for a duration of six years), which was arranged by Mizuho Bank, Ltd. in order to repay Term Loan (009) in the amount of JPY 4,321 million due on November 29, 2023.

Additionally, a portion of INV's existing loans (New Syndicate Loan (007)) from Sumitomo Mitsui Trust Bank, Limited of JPY 1,746 million was transferred to The Chiba Bank, Ltd. in the amount of JPY 981 million on September 29, 2023.

1. Issuance of Investment Corporation Bonds

INV issued investment corporation bonds as follows for the purpose of raising a portion of funds for repayment of existing borrowings while at the same time lengthening the average maturity period of its debt and further diversifying repayment dates for interest-bearing debt.

					Issue		Interest Rate		Redemption
	Bond Series		Issue Date		Amount				Abstract
				(annual rate)		Date
					(JPY million)
	Nineth Series Unsecured										Unsecured /
	Investment Corporation Bonds
		September						September		Unguaranteed
	(with pari passu conditions among		1,700	1.200%
	21, 2023	21, 2028		Rating: A
	specified corporate bonds)
										(JCR)
	(green bonds)
	Tenth Series Unsecured										Unsecured /
	Investment Corporation Bonds
		December						December		Unguaranteed
	(with pari passu conditions among		1,800	1.297%
	14, 2023	14, 2028		Rating: A
	specified corporate bonds)
										(JCR)
	(green bonds)

1. Overview of Acquisition of Assets

CIM decided on the acquisition of trust beneficiary interests in six domestic hotels as follows on July 19, 2023, and acquisition of the assets was closed on August 1, 2023.

Acquisition

Appraisal

Property

Property Name

Price

Value

Seller

Number

(JPY million)

(JPY million)

(Note 1)

(Note 2)

D84

Fusaki Beach Resort Hotel

40,293

40,700

Sheffield Asset Tokutei

& Villas

Mokuteki Kaisha

D85

Tateshina Grand Hotel

8,365

8,450

Heijo Tokutei Mokuteki

Takinoyu

Kaisha

D86

Hotel MyStays Okayama

2,613

2,640

Nippori Tokutei

Mokuteki Kaisha

D87

Hotel MyStays Aomori

2,445

2,470

Shiretoko Tokutei

Station

Mokuteki Kaisha

D88

Hotel MyStays Soga

2,039

2,060

Nippori Tokutei

Mokuteki Kaisha

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Financial Summary for the December 2023 Fiscal Period (from July 1, 2023 to December 31, 2023)

Acquisition

Appraisal

Property

Property Name

Price

Value

Seller

Number

(JPY million)

(JPY million)

(Note 1)

(Note 2)

D89

Tazawako Lake Resort &

1,475

1,490

Heijo Tokutei Mokuteki

Onsen

Kaisha

Total

57,230

57,810

-

(Note 1) Acquisition Price does not include adjustments for property taxes, city planning taxes, or national or local consumption taxes. Hereinafter the same shall apply.

(Note 2) Appraisal Value is based on appraisal value stated in the appraisal report by the Japan Real Estate Institute., The Tanizawa Sōgō Appraisal Co., Ltd. or Daiwa Real Estate Appraisal Co., Ltd. on the valuation date of June 1, 2023.

1. Overview of Results of Operations and Distributions

As a result of the operations mentioned above, operating revenues for the Reporting Period increased by JPY 2,904 million from the previous period (+18.2%) to JPY 18,819 million, resulting in a net income of JPY 11,032 million, an increase of JPY 2,118 million from the previous period (+23.8%). Unappropriated retained earnings including the retained earnings carried forward from the preceding fiscal period (JPY 8,657 million) is JPY 19,690 million. INV has decided to set the distribution per unit (excluding excess profit distribution) of JPY 1,640, which is the net income per unit (JPY 1,637) plus the reversal of retained earnings (JPY 3 per unit).

b Outlook for the Fiscal Period Ending June 30, 2024

The Japanese economy is expected to continue its gradual recovery led by domestic demand. However, there are notable downside factors to the economy. In particular, high prices may restrain the growth of personal consumption, and the rate of wage increases in the spring labor struggle (Shunto) will be a factor that will determine the sustainability of the economic recovery in the future. Other factors, such as the slowdown of overseas economies and supply constraints due to labor shortages, are also expected to affect the tempo of economic recovery.

In the hotel market, demand in both the domestic/inbound and leisure/business segments is expected to remain stable.

In the rental housing market, the population outflow trend from central area caused by the impact of the COVID-19 infection has recently turned into a population inflow trend again, which is expected to lead to higher occupancy rates and higher unit rents in the future.

1. Future operational policy and issues to be addressed

Since July 2011, INV has focused on improving the profitability of its portfolio and strengthening its financial base in order to enhance unitholder value with the Fortress Group as its sponsor. In addition to access to Fortress' global real estate expertise, INV will actively promote efforts to acquire new demand under the environment of "Post-Corona" and flexibly respond to changes in the external environment while emphasizing customer safety and security. Going forward, INV will continue to implement various strategies for further growth and financial stability, including the following measures.

• Further external growth utilizing sponsor support
• Asset recycling: property acquisitions using the proceeds from sales
• Internal growth at hotels through reducing costs, stimulating existing demand and creating new demand by collaborating with hotel operators
• Further internal growth at residential properties

10