Japan Hotel REIT Investment Corporation‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌

February 24, 2017

http://www.jhrth.co.jp/en/

Financial Results Briefing 17th Period (FY12/2016) (TSE:8985)

Table of Contents

  1. Settlement of Accounts for FY12/2016 - Highlights

    １． FY12/2016 Highlights 3

  2. Summary of Settlement of Accounts

    １．Operational Performance 6

    ２． Revenue Forecast 7

    ３． Balance Sheet 8

  3. Portfolio

    １． Portfolio 10

    ２． Diversification of Portfolio 11

  4. External Growth

    １． Properties Acquired in 2016 13

    ２． Changes in Asset Size 15

  5. Internal Growth

    １． Performance of Major Hotels Adopting Variable Rent Scheme, etc. 17

    ２． The Five HMJ Hotels - Highlights 18

    ３． Case Studies of Internal Growth Strategy 19

    ４． Capital Expenditures and Depreciation 20

    ５． Rent Structures 21

  6. Financial Status

    １． Financial Status 23

  7. Market Environment

    Former Nippon Hotel Fund Investment Corporation ("former NHF") and former Japan Hotel and Resort, Inc. ("former JHR") merged on April 1, 2012. The surviving company is the former NHF. The new name after the merger is Japan Hotel REIT Investment Corporation ("JHR"). The asset management company of JHR is Japan Hotel REIT Advisors Co., Ltd. ("Asset Management Company").

    １． Market Environment 27

    Appendix １ JHR's Characteristics

    １． Simultaneous Pursuit of Stability and Upside Potential 31

    ２． Key Points to Promote Growth Cycle 32

    ３． External Growth Strategy 33

    ４． Internal Growth Strategy 34

    ５． Financial Strategy 35

    ６． Benefits Program for Unitholders 36

    Appendix ２ Information on Properties

    １．Property List 38

    ２．Summary of Lease Contracts 40

    ３．Major CAPEX III by Hotel 42

    ４．Portfolio Map 43

    Appendix ３ Investors Composition and Investment Unit Price

    １． Major Unitholders and Unitholders of Investment Units 45

    ２． Changes in Investment Unit Price and Market Capitalization 46

    Appendix 4 Summary of the Asset Management Company

    １． Summary of the Asset Management Company 48

    ２． Features of the Asset Management Company 49

    1

  8. Settlement of Accounts for FY12/2016 - Highlights

    １．FY12/2016 Highlights

    2. Internal Growth (*3, 4, 5)

    2015 2016 Variance

    (Unit: JPY)

    The Five HMJ Hotels 16,843 17,807 5.7%

    The Six Accor Hotels 9,130 9,868 8.1%

    RevPAR

    The Five the b Hotels 8,124 8,482 4.4%

    Total of 3 Hotel

    Groups 12,352 13,116 6.2%

    (Unit: JPY M)

    GOP Total of 3 Hotel

    Groups 10,532 11,671 10.8%

    (Unit: JPY M)

    Revenue Sharing

    Total of Revenue Sharing

    406

    556

    36.9％

    3. Strengthening of Financial Base

    ・Improvement in financial stability (End of FY12/2015→End of FY12/2016)

    ・Diversified funding methods and reduction in interest rate costs by issuance of investment corporation bonds (total amount JPY13.1 billion)

    ・Improvement in credit rating

    • Improvement in hotel performance and an increase in variable rent, etc. through active asset management

    • Reduce financial costs while carrying out conservative financial management

  9. External Growth

    • Ongoing Acquisitions of High-Quality Properties

      End of FY12/2014 30 properties / JPY173.4 billion

      • Public offering in January Acquired 6 properties / JPY23.1 billion

        2015

      • Public offering in June Acquired 2 properties / JPY16.6 billion

      • Sold (October)

        -3 properties / - JPY4.7 billion

        Total Acquisition Price

        Total Funds Raised through Public Offerings

        JPY39.7B

        JPY26.4B

        Actual Results (2015)

        End of FY12/2015

        36 properties / JPY225.7billion

      • Public offering in January

        Acquired 2 properties / JPY24.0 billion(*1)

        Actual Results (2016)

        2016

        Total Acquisition Price(*1, 2)

        Total Funds Raised through Public Offerings

        JPY78.3B

        JPY49.3B

        LTV

        Costs for Interest- Bearing Debt(*6)

        Average Life of Debt

        42.8％

        ⇒

        39.7％

        1.5％

        ⇒

        1.2％

        3.7 years

        ⇒

        5.0 years

      • Public offering in July

    Acquired 4 properties / JPY54.3 billion (*2)

    End of FY12/2016

    41 properties / JPY286.8 billion

    JCR

    R&I

    A

    (Positive)

    ⇒

    A+

    (Stable)

    A-

    (Positive)

    ⇒

    A

    (Stable)

    (*1) Includes JPY17.3 billion of ACTIVE-INTER CITY HIROSHIMA acquired in December 2015 (*2) Includes JPY 7.1 billion of Hotel Centraza Hakata acquired in April 2016.

    (*3) The Five HMJ Hotels are Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay, Namba Oriental Hotel, Hotel Nikko Alivila, and Oriental Hotel Hiroshima. (*4) The Six Accor Hotels are ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Sapporo, Mercure Okinawa Naha, and Mercure Yokosuka. (*5) The Five the b Hotels are the b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji, and the b hakata.

    (*6) Costs for interest-bearing debt are rounded off to one decimal place.

    3

Japan Hotel REIT Investment Corporation published this content on 24 February 2017 and is solely responsible for the information contained herein.
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