Japan Hotel REIT Investment : Announcement of Monthly Disclosure for August 2018

This English translation is provided for information purposes only. If any discrepancy is identified between this translation and the Japanese original, the Japanese original shall prevail.

September 25, 2018

REIT Issuer:

Japan Hotel REIT Investment Corporation (TSE code: 8985) Kaname Masuda, Executive Director

Asset Management Company: Japan Hotel REIT Advisors Co., Ltd.

Hisashi Furukawa, Representative Director and President Contact:

Makoto Hanamura General Manager

Investor Relations Department, Operations Division TEL: [phone]

Announcement of Monthly Disclosure for August 2018

With respect to the business performance of the hotels owned by Japan Hotel REIT Investment Corporation (hereinafter called "JHR") for August 2018, JHR informs you of the monthly sales, occupancy rates, ADR, and RevPAR of rooms department of three hotel groups as below. For each hotel's track record of hotel operations, please check JHR's website (Note 1).

JHR continues to announce monthly disclosure of hotels from which JHR receives variable rent or income from management contracts and whose lessees, etc. have agreed with the monthly disclosure.

Hotel / Indicators		Augus t	Fluctuation com par e d w ith the same m onth last year (Note 9)	Change in fluctuation com par e d w ith the same m onth last year	Cum ulative total (Note 10)	Fluctuation of the cum ulative total com par e d w ith last year (Note 11)	Change in fluctuation of the cum ulative total com par e d w ith last year
Occupancy rate	92.3%	0.6%	0.7%	87.9%	(0.2)%	(0.2)%
The Eleven HMJ Hotels	ADR (JPY)	23,951	(461)	(1.9)%	16,906	166	1.0%
	RevPAR (JPY)	22,104	(269)	(1.2)%	14,868	110	0.7%
Sales (JPY 1M)	4,375	(88)	(2.0)%	26,845	(156)	(0.6)%
Occupancy rate	89.1%	(0.6)%	(0.7)%	86.7%	1.8%	2.1%
The Six Accor Hotels	ADR (JPY)	14,426	661	4.8%	12,364	369	3.1%
RevPAR (JPY)	12,853	508	4.1%	10,719	535	5.3%
Sales (JPY 1M)	663	30	4.7%	4,506	219	5.1%
Occupancy rate	82.4%	(11.6)%	(12.3)%	89.1%	(1.1)%	(1.2)%
The Four the b Hotels	ADR (JPY)	9,674	776	8.7%	9,120	128	1.4%
	RevPAR (JPY)	7,975	(392)	(4.7)%	8,124	15	0.2%
Sales (JPY 1M)	166	(10)	(5.7)%	1,345	4	0.3%
Occupancy rate	90.5%	(1.0)%	(1.0)%	87.8%	0.2%	0.2%
Total of Three Hotel Groups	ADR (JPY)	20,362	104	0.5%	15,009	200	1.3%
	RevPAR (JPY)	18,424	(100)	(0.5)%	13,174	199	1.5%
Sales (JPY 1M)	5,204	(68)	(1.3)%	32,695	67	0.2%

Inbound demand continued to be firm as the number of inbound visitors to Japan recorded the highest as August. On the other hand, some hotels owned by JHR were affected by typhoons in August, as more typhoons approached and hit Japan compared to the average year for the same month.

Please note that Ibis Tokyo Shinjuku, one of The Six Accor Hotels had suspended sales of some rooms due to renovation work in the same month last year.

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(Note 1) (Note 2)

Please check JHR's website below for each hotel's track record of hotel operations.http://www.jhrth.co.jp/en/portfolio/review.html

The Eleven HMJ Hotels are Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay, Namba Oriental Hotel, Hotel Nikko Alivila, Oriental Hotel Hiroshima, Okinawa Marriott Resort & Spa, ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel), Holiday Inn Osaka Namba, Hilton Tokyo Narita Airport, International Garden Hotel Narita and Hotel Nikko Nara (With regard to Hotel Centraza Hakata which is leased by HMJ group company, major renovation works (hereinafter the "Renovation") which need to close entire hotel operation are scheduled from October 2018 to the end of March 2019. Therefore, numbers for Hotel Centraza Hakata are not included in Eleven HMJ Hotels as the hotel operation will be suspended during the Renovation. For track record of the hotel, please check JHR's website mentioned above.). The Six Accor Hotels are ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, Mercure Okinawa Naha, and Mercure Yokosuka. The Four the b Hotels are the b ikebukuro, the b hachioji, the b hakata and the b suidobashi. Also, the Total of Three Hotel Groups is the total of the Eleven HMJ Hotels, the Six Accor Hotels, and the Four the b Hotels. (The b akasaka-mitsuke and the b ochanomizu, which were sold on August 2018 are excluded from the Four the b Hotels and the Total of Three Hotel Groups.)

(Note 3) (Note 4)

The comments above have been prepared based on information the asset management company had obtained from the lessees, etc. and are only provided as a reference of general trends.

Numbers for each month and numbers and information shown in the comments have not been audited nor been the subject of the independent verification of the asset management company. Therefore, no guarantee is made as to the accuracy or completeness of the numbers and information. Also, the amount that is a sum total of each month may be different from total sales for the six-month or full year stated in the annual securities report to be submitted later. Sales of each month may also differ from that stated in the annual securities report. The numbers of the Eleven HMJ Hotels, the Six Accor Hotels, the Four the b Hotels, and Total of Three Hotel Groups are calculated by the asset management company based on numbers provided by lessees, etc.

(Note 5) (Note 6)

Occupancy rate: The number of rooms sold during the period is divided by the number of rooms available during the same period.

ADR (Average Daily Rate): Total rooms revenue for a certain period (excluding service charges) is divided by the total number of rooms sold during the period. Holiday Inn Osaka Namba, the Six Accor hotels, and the Four the b hotels do not request service charges.

(Note 7)

RevPAR (Revenue Per Available Room): Total rooms revenue for a certain period (excluding service charges) is divided by the total number of available rooms during the period. It is the same as multiplying ADR by occupancy rate.

(Note 8) (Note 9) (Note 10) (Note 11)

Occupancy rate is rounded off to the first decimal place. ADR and RevPAR are rounded off to the nearest whole number. Sales are rounded off to the nearest million yen.

Fluctuation compared with the same month last year means the fluctuation between the concerned month (August) and the same month last year.

Cumulative total is the cumulative total from the beginning of the period (January) to the concerned month (August).

Fluctuation of cumulative total compared with last year means the fluctuation between the cumulative total from the beginning of the period (January) to the concerned month (August) and the cumulative total from the beginning of the period last year (January) to the same concerned month (August) last year.

(Note 12) (Note 13)

For track record of hotel operations of hotels which JHR acquired in 2017, numbers provided by previous owners, etc. are used for calculation.

Sales are only from hotels and exclude rent from non-hotel tenants.

* Website of Japan Hotel REIT Investment Corporation:http://www.jhrth.co.jp/en/