Make The World

More Sustainable

[Provisional Translation Only]

This English translation of the original Japanese document is provided solely for information purposes. Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

January 25, 2022

Issuer

Ichigo Hotel REIT Investment Corporation ("Ichigo Hotel," 3463)

1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo

Representative: Osamu Miyashita, Executive Director

www.ichigo-hotel.co.jp/en

Asset Management Company

Ichigo Investment Advisors Co., Ltd.

Representative: Hiroshi Iwai, President

Inquiries: Hidehito Iwasaka, Head of Ichigo Hotel

Tel: +81-3-3502-4892

Earnings Forecast Revision for the January 2022 Fiscal Period

Ichigo Hotel is revising up its January 2022 fiscal period earnings forecast announced in the September 14, 2021 release "July 2021 Fiscal Period Earnings."

1. January 2022 Earnings Forecast Revision

(JPY million)

Operating

Operating

Recurring

Net

Dividend

per Share

Revenue

Profit

Profit

Income

(JPY)

Previous Forecast

1,007

336

111

184

724

(A)

New Forecast

1,102

414

209

282

1,108

(B)

Difference

+95

+78

+97

+97

+384

(B) - (A)

% Change

+9.4%

+23.2%

+87.8%

+53.1%

+53.0%

Reference:

1,035

409

210

209

823

January 2021

Reference: Net Income per Share: JPY 1,108

Forecast period-end number of shares outstanding: 254,974 shares

Note: The new forecast is based on the "Preconditions for the January 2022 Earnings Forecast" on page 3. Actual results may vary due to changes in circumstances, so these forecasts should not be construed as a guarantee of such results. Ichigo Hotel will make a forecast revision should a material discrepancy emerge between this forecast and results.

1

2. January 2022 Earnings Forecast Revision Rationale

Although hotel demand from tourism and business travel is expected to gradually recover, a full-blown recovery is likely to take more time and uncertainty surrounding market outlook has increased due to the recent spread of the omicron variant.

Ichigo Hotel is revising up its January 2022 fiscal period earnings forecast (announced on September 14, 2021) on the back of greater than expected variable rent at the Valie Hotel Hiroshima due to Hiroshima Prefecture temporarily leasing all rooms starting in mid- February 2021 and continuing to do so for January 2022.

As a result, the forecast for January 2022 operating revenue, operating profit, net income, and dividend per share are expected to increase by JPY 95 million (+9.4%), JPY 78 million (+23.2%), JPY 97 million (+53.1%), and JPY 384 (+53.0%) respectively, versus the previous forecast.

There is no revision to the July 2022 fiscal period earnings forecast.

Should any further change to the outlook for operating results arise, Ichigo Hotel will promptly disclose the details.

2

Preconditions for the January 2022 Earnings Forecast

Preconditions

Period

∙ August 1, 2021 to January 31, 2022 (184 days)

Number of

∙ 23 hotels

∙ The Chisun Inn Osaka Hommachi was rebranded and reopened as The

Hotels

OneFive Osaka Sakaisuji on September 1, 2021.

Within operating revenue, rental income is forecast based on current lease

contracts, taking into consideration such factors as hotel and market

conditions.1

Forecast Operating Performance2

January 2022 Fiscal Period

Occupancy3

66.7%

ADR4

JPY 4,802

  1. The forecast rental income assumes operators and tenants will fully pay their contractual rents without delay or default.
  2. The 16 variable rent hotels are: Smile Hotel Kyoto Shijo, Nest Hotel Sapporo Ekimae, The OneFive Osaka Sakaisuji, Nest Hotel Sapporo Odori, The OneFive Fukuoka Tenjin, Nest Hotel Osaka Shinsaibashi, Smile Hotel Tokyo Asagaya, Nest Hotel Matsuyama, Court Hotel Kurashiki, Hotel Wing International Nagoya, Hotel Wing International Kobe Shin Nagata Ekimae, Nest Hotel Kumamoto, Valie Hotel Hiroshima, HOTEL EMIT SHIBUYA, The OneFive Okayama, and Capsule Plus Yokohama. However, data for Capsule Plus Yokohama is

excluded from the above forecast because the operator did not give

Operating

consent to disclose forecasts.

3 Occupancy is calculated with the following formula:

Revenue

Occupancy = Total number of guest rooms occupied during the period /

(total number of guest rooms * number of days hotel was in operation

during the period)

4 ADR or Average Daily Rate is calculated with the following formula:

ADR = Total sales from accommodation (excluding restaurant charges

and other service fees) / number of guest rooms occupied during the

period

Details of January 2022 Rental Income Forecast by Hotel

(JPY million)

Fixed Rent/

Hotel Name

Minimum

Variable

Total

Guaranteed

Rent

Rent

Smile Hotel Kyoto Shijo

34

-

34

Nest Hotel Sapporo Ekimae

32

-

32

The OneFive Osaka Sakaisuji

-

-

-

Comfort Hotel Hamamatsu

55

-

55

3

Nest Hotel Sapporo Odori

26

-

26

The OneFive Fukuoka Tenjin

26

-

26

Nest Hotel Osaka Shinsaibashi

65

-

65

Comfort Hotel Central International

151

-

151

Airport

Smile Hotel Tokyo Asagaya

59

-

59

Nest Hotel Matsuyama

35

-

35

The OneFive Okayama

72

-

72

Comfort Hotel Kushiro

18

-

18

Comfort Hotel Suzuka

15

-

15

Court Hotel Kurashiki

28

-

28

Nest Hotel Kumamoto

27

-

27

Valie Hotel Hiroshima

22

121

143

HOTEL EMIT SHIBUYA

44

-

44

Other1

216

4

220

Total

933

125

1,058

1 Figures for Hotel Wing International Nagoya, Hotel Wing International

Kobe Shin Nagata Ekimae, Hotel Livemax Nihombashi-Hakozaki,

Capsule Plus Yokohama, Urbain Hiroshima Executive, and

Washington Hotel Plaza Shimonoseki Eki Nishi are included in

"Other" because the hotel operators did not provide consent to disclose

hotel-specific data.

∙ Retail: JPY 29 million of rental income (including utilities income) from

retail tenants at The OneFive Osaka Sakaisuji, Hotel Wing International

Kobe Shin Nagata Ekimae, and Smile Hotel Tokyo Asagaya, and from

banquet rooms at Nest Hotel Kumamoto.

∙ Depreciation: JPY 351 million. Depreciation has been calculated using

the straight-line method.

∙ Property and city planning taxes: JPY 119 million

∙ Building maintenance and repair expenses are based on what Ichigo

Investment Advisors, the asset management company of Ichigo Hotel,

estimates will be necessary for each hotel during the period. However,

actual expenses for the period could differ significantly from these

forecast amounts for reasons including the variability of maintenance

Operating

and repair expenses, one-time costs due to unexpected building damage,

etc.

Expenses

∙ Rental expenses, Ichigo Hotel's principal operating expense (other than

depreciation, see above), are calculated based on historical data adjusted

for anticipated expense variations.

  • Actual operating expenses may differ significantly from these assumptions due to unforeseeable factors.
  • Other expenses: JPY 37.7 million as Covid-related hotel operator support and/or potential rent reductions.
  • SG&A expenses: JPY 3.1 million for engineering report costs and JPY 0.5 million for environmental certification costs.

4

Non-

∙ Interest expenses and other borrowing-related expenses: JPY 205

Operating

million

Expenses

∙ An extraordinary gain of JPY 74 million is expected as a result of

Extraordinary

reaching a settlement with the former operator of the Hotel Suave Kobe

Asuta (current name: Hotel Wing International Kobe Shin Nagata

Gains

Ekimae), against which Ichigo Hotel filed an eviction lawsuit because of

delinquent rent.

Borrowings

∙ Total borrowings: JPY 26.34 billion as of January 31, 2022, including

loans and bonds

Number of

∙ 254,974 shares issued and outstanding as of January 25, 2022. The

forecast assumes there will be no new issuance of shares and/or

Shares

cancellation of shares through January 31, 2022.

∙ The dividend forecast assumes that dividends will comply with the

dividend distribution policy stipulated in Ichigo Hotel's Articles of

Dividend

Incorporation.

∙ The dividend is subject to change due to factors such as sales of

portfolio assets, changes in rental income associated with operator

turnover, and the occurrence of unexpected maintenance and repair

costs.

Dividend in

∙ Ichigo Hotel does not plan on paying any Dividend in Excess of

Excess of

Earnings.

Earnings

  • This forecast assumes that there are no material revisions to laws and regulations, the tax system, accounting standards, listing rules of the Tokyo Stock Exchange, and rules of the Investment Trusts Association,

Other

Japan, and no material changes in the state of the economy and real

estate market conditions.

  • Given ongoing Covid uncertainty, these earnings forecasts are subject to change.

5

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Ichigo Hotel REIT Investment Corporation published this content on 25 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 January 2022 06:26:36 UTC.