Invincible Investment : Notice concerning Acquisition of Asset (preferred equity interest)

[For Information Purpose Only.

The Japanese language press release should be referred to as the original.]

To All Concerned Parties

Name of REIT Issuer:

September 21, 2017

Invincible Investment Corporation Name of representative:

Naoki Fukuda, Executive Director Roppongi Hills Mori Tower

6-10-1 Roppongi, Minato-ku, Tokyo, Japan (Securities code: 8963)

Asset manager:

Consonant Investment Management Co., Ltd. Naoki Fukuda, CEO

Contact: Jun Komo

General Manager of Planning Department (Tel. [phone])

Notice concerning Acquisition of Asset (preferred equity interest)

Invincible Investment Corporation ("INV") announced the acquisition of the asset (preferred equity interest) as decided today by Consonant Investment Management Co., Ltd. ("CIM"), the asset manager of INV.

1. Overview of the Acquisition

   (1) Asset to be acquired	Preferred equity interest (the "Preferred Equity Interest") provided in Article 2(9) of the Act on Securitization of Assets (Act No. 105 of 1998, as amended) (Note1)
   (2) Number of units of preferred equity interest to be issued	Preferred Equity Interest: 364,200 units
   (3) Number of units of preferred equity interest to be acquired (ratio of interest holding)	Preferred Equity Interest: 178,458 units (49.0%)
   (4) Anticipated acquisition price	JPY 17,845 million for 49.0% of the Preferred Equity Interest (Note 2)
   (5) Name of underlying asset	The Sheraton Grande "Underlying Asset")	Tokyo	Bay	Hotel	(the
   (6) Anticipated acquisition date	October 13, 2017 (Note 3)
   (7) Seller	Kingdom Special Purpose Company (the "TMK"). For the overview of the seller, please refer to "4. Overview of Seller"
   (8) Anticipated source of acquisition funds	Funds from issuance of new investment units (Japanese primary offering and overseas offering) (Note 4) and cash-on-hand

   (Note 1) Along with acquisition of the Preferred Equity Interest, INV will acquire a 24.0% stake in the specified equity interests in the TMK, as well as 49.0% of equity interest in a limited liability company (LLC), a holding company, (the "Holding Company") that owns 100% of equity interest in Keiyo Resort Development, G.K., a master lease company of the Underlying Asset (the "ML").

   (Note 2) The anticipated acquisition price is the expected investment amount. The amount does not include any taxation including consumption tax and is rounded down to the nearest million yen. In addition, the acquisition price of the specified equity interest and the equity interest in the Holding Company described in (Note 1) is JPY 24,000 and JPY

   9.8 million, respectively. Since these amounts are very small, they are not included in the anticipated acquisition price. (Note 3) The anticipated acquisition date is the date of expected closing for the subscription of the Preferred Equity Interest.

   Hereinafter the same.

   (Note 4) For more information about issuance of the new investment units, please refer to "Notification concerning Issuance of New Investment Units and Secondary Distribution of Investment Units" announced today.

2. Reasons for Acquisitions and Leasing

   INV has decided to acquire the Preferred Equity Interest in the TMK by using funds raised through issuance of the new investment units and its own funds. The TMK will acquire the Sheraton Grande Tokyo Bay Hotel from an affiliate of the sponsor, Fortress Investment Group LLC ("FIG"). We believe that acquisition of the Preferred Equity Interest will enhance the growth profile and stability of the whole portfolio revenue of INV, along with "Royal Parks Tower Minamisenju", the flagship residential property acquired in March 2017, as a result of which the quality of the portfolio will move up to the next stage.

   The Sheraton Grande Tokyo Bay Hotel, which will be owned by the TMK, is a hotel that has 1,016 rooms including 175 rooms in the Annex Tower opened in December 2016, the highest room count among the Disney hotels and the Tokyo Disney Resort official hotels as of August 31, 2017 (Note 1) and the only hotel operated by Marriott International within the Tokyo Disney Resort Area. It is adjacent to the Tokyo Disney Resort and within one minute walk from "Bayside Station" of the Disney Resort Line. It has luxury, resort-like rooms and is equipped with various facilities including indoor and outdoor pools, Crystal Chapel, dining rooms, conference rooms and event halls to meet demand for both leisure and MICE (Note 2).

   (Note 1) "Tokyo Disney Resort" (may be referred to as "TDR") means Tokyo Disneyland, Tokyo DisneySea and related facilities, while the "Tokyo Disney Resort Area" means the bayside area to the south of "Maihama Station" on JR Keiyo Line where Tokyo Disneyland, Tokyo DisneySea and the related facilities are located. Hereinafter the same.

   The "Disney hotels" are hotels under direct management of Oriental Land Co., Ltd. operating TDR using the Disney brand (four hotels). The "Tokyo Disney Resort official hotels" or the "official hotels" consist of the designated hotels within the Tokyo Disney Resort Area (six hotels). The "partner hotels" consist of the alliance hotels located in the vicinity of TDR (the bayside area surrounding "Maihama Station" and "Shin-Urayasu Station" on JR Keiyo Line) (four hotels). Such specified names are based on the TDR's hotel alliance program.

   (Note 2) The capital letters of MICE stand for Meeting (held by business companies), Incentive (travel organized for company employees for incentive and training purposes), Convention (held by international organizations/associations or academic societies) and Exhibition/Event. It is also a collective term for business events that are expected to attract a lot of guests and interactions (Source: the official websites of Ministry of Land, Infrastructure, Transport and Tourism and Japan Tourism Agency).

   The number of visitors to TDR has remained stable for the past four fiscal years at approximately 30 million a year. In addition, the number of visitors from areas outside the Kanto region including overseas throughout FY 2016 was over 10 million and the average daily number of such visitors in FY 2016 was 29,018, resulting in a high level of stable demand for hotels in the vicinity of TDR. Despite such high demand for hotel guest rooms, there are only 8,134 total guest rooms among the Disney hotels, the official hotels and the partner hotels. In addition, the room of the land area of the Tokyo Disney Resort Area is limited, therefore the supply of the hotel guest rooms in the future is expected to be limited. In this light, INV believes that there will be a continued

   high and stable demand for the Sheraton Grande Tokyo Bay Hotel as one of the official hotels (Note 3).

   In addition, TDR continues to introduce new products and attractions in the anticipation of the record-high number of visitors in 2020. In Tokyo Disneyland, a large-scale investment of JPY 75.0 billion will be made for the development of new attractions scheduled to be open in the spring of 2020. In Tokyo DisneySea, an introduction of a large-scale attraction as "development of a new themed port" is planned (Note 4).

   INV believes that the number of visitors to TDR which support the demand for the Sheraton Grande Tokyo Bay Hotel is expected to be stable in the future by the implementation of these projects.

   (Note 3) The demand for the Sheraton Grande Tokyo Bay Hotel is not necessarily linked to the number of visitors to TDR. There is the possibility the performance of the Sheraton Grande Tokyo Bay Hotel will fluctuate with no regard to the number of visitors to TDR.

   (Note 4) The descriptions regarding the projects above are based on the corporate disclosure from Oriental Land Co., Ltd.

   There is no assurance that these projects will be implemented as planned.

   By acquiring the Preferred Equity Interest, INV will invest in the Sheraton Grande Tokyo Bay Hotel through a joint investment scheme with an affiliate of GIC Private Limited ("GIC") (Note 5). INV and the affiliate of GIC will jointly invest in the TMK as of October 13, 2017, acquiring a 49.0% (Note 6) and a 51.0% stake, respectively, in the Preferred Equity Interest in the TMK. The TMK will subsequently acquire the Sheraton Grande Tokyo Bay Hotel as of October 17, 2017.

   INV believes that INV can enjoy higher earnings yield with smaller investment amount by acquiring the Preferred Equity Interest as compared to where INV directly acquires a trust beneficiary interest in the Sheraton Grande Tokyo Bay Hotel. The simulated dividend yield for the Preferred Equity Interest is 8.8% (Note 7).

   INV will continue to invest in the Sheraton Grande Tokyo Bay Hotel as a long-term joint investment with GIC (Note 8). The Sheraton Grande Tokyo Bay Hotel will continue to be under management of Starwood Hotels and Resorts (the "Operator"), a subsidiary of Marriott International Inc., the largest hotel operator in the world.

   (Note 5) GIC is a leading global investment firm with well over US$100 billion in assets under management. Established in 1981 to secure the financial future of Singapore, the firm manages Singapore's foreign reserves. A disciplined long-term value investor, GIC is uniquely positioned for investments across a wide range of asset classes, including real estate, private equity, equities and fixed income. GIC has investments in over 40 countries and has been investing in emerging markets for more than two decades. Headquartered in Singapore, GIC employs over 1,400 people across 10 offices in key financial cities worldwide.

   (Note 6) Along with acquisition of the Preferred Equity Interest, INV will acquire a 24.0% stake in the specified equity interest in the TMK, as well as 49.0% of the equity interest in the Holding Company, while the affiliate of GIC will acquire 25.0% and 51.0% respectively. The rest of the specified equity interest (a 51.0% stake) in the TMK will be acquired by a general incorporated association (foundation) (ippanshadanhoujin). For more details, please refer to 3. Details of the Assets to Be Acquired.

   (Note 7) The simulated dividend yield is calculated by dividing (A) the product of (a) the simulated dividend, which is calculated by deducting (i) simulated expenses such as operating expense of the TMK and the interest of debt from (ii) the NOI of the Underlying Asset stated in the appraisal report of the Tanizawa Sōgō Appraisal Co., Ltd. on the valuation date of July 1, 2017, and (b) ownership ratio of the Preferred Equity Interest (49.0%), by (B) the anticipated acquisition price. As the simulated dividend is the reference data calculated based on the simulated expenses calculated by the CIM, there are possibilities that the actual dividend yield is far differed from such reference data or the dividend is not distributed at all.

   (Note 8) In making the joint investment, INV and the affiliate of GIC entered into the equityholders agreement on September 21, 2017 and have in principle agreed that the TMK would not sell the Sheraton Grande Tokyo Bay Hotel for the next seven years in principle, etc.

3. Details of the Assets to Be Acquired

4. Overview of the Preferred Equity Interests

Kingdom TMK
(Assets) Specified assets JPY97.9 billion(Note2)(Note3) Other assets JPY 4.9 billion	(Liabilities) Interest bearing liability JPY 66.3 billion
	(Owners' Equity) Preferred capital, etc. JPY 36.4 billion(Note4)
Total Assets JPY 102.8 billion	Total Liabilities and Owners' Equity JPY 102.8 billion

The details of the Preferred Equity Interests are described as follows:

Name

The Preferred Equity Interests issued by Kingdom Tokutei Mokuteki Kaisha (Note 1)

Overview

① The Preferred Equity Interests is a part of preferred equity interests issued by the TMK that was established for the purpose of (i) acquisition, management and disposal of the Specified Asset based on the plan for securitization of assets in compliance with the Act on Securitization of Assets, and (ii) operation of the ancillary businesses. ② Summary of the (planned) balance sheet of the TMK as of the scheduled date of the acquisition of the specified asset is as follows: ③ The fiscal periods of the TMK are the semi-annual periods from April 1 to September 30 and from October 1 to March 31 every year: ④ The agreement between the Joint Investors to be signed in relation to the TMK will contain the following constraints: and ・Both parties agreed that they shall not cause the TMK to sell or otherwise dispose of the real estate trust beneficiary interest in the Sheraton Grande Tokyo Bay Hotel for seven years after the acquisition of the Sheraton Grande Tokyo Bay Hotel without the agreement of the Joint Investors, in principle. ・When either Joint Investor sells the Preferred Equity Interests (including the specified equity interest in the TMK and the equity interest in the Holding Company; hereinafter the same in this ④) to a third party, it shall grant the other Joint Investor the preferential negotiation rights on the Preferred Equity Interest to be sold for a certain period. ・When either Joint Investor sells the Preferred Equity Interest it holds to a third party, the other Joint Investor shall have the tag-along rights (meaning the rights to request the sale of the Preferred Equity Interest such other Joint Investor holds on conditions equal to those applicable to such either Joint Investor together with the sale of the Preferred Equity Interest by such Joint Investor) ⑤ In addition to the above, the following constraints are imposed with regard to