Dec. 10, 2021

Company name: Polaris Holdings Co., Ltd. ("Polaris" or the "Company") Representative: Atsuro Umeki, President, Chief Executive Officer (Stock Code: 3010.JP, Tokyo Stock Exchange)

Contact: Satoshi Hosono, Director and Chief Financial Officer (TEL:03-5822-3010)

Polaris to Purchase 145 Room Hotel in Central Sapporo

Polaris is pleased to announce that it has secured the purchase of the Fino Hotel Sapporo Odori (the "Hotel") through one of its subsidiaries. Polaris will acquire the trust beneficiary interest (the "Property") in the land and building of the Hotel, which the Company has already been operating under a long-term, fixed rent lease agreement. The long-term lease agreement with the previous owner will be immediately cancelled with 100% of the economic benefits from owning andoperating the Hotel now being received by Polaris. Furthermore, Polaris will benefit from the value created from acquiring the Hotel at an attractive discount to its future value.

The newly built Hotel has 145 rooms, opened in August 2020, and .is very accessible with only a 4-minute walk from Odori Station, the main subway station on Sapporo's municipal subway line. The Hotel is also conveniently located for both domestic and overseas leisure and business customers given that it is a short 2-minute walk to Odori Park, where world famous "Snow Festival" is held each year, as well as short distance to the Susukino area, Hokkaido's largest urban downtown.

1. Reasons and Benefits of Purchasing the Hotel

As stated in our press release dated Oct. 22, 2021, Polaris is aggressively positioning the Company to achieve further accretive growth by utilizing the JPY2.8 billion (up to JPY5.9 billion through exercise of stock acquisition rights) strategically raised through its recent third party allotment of shares. Polaris believes the prolonged pandemic has and will continue to provide the Company with unique opportunities to purchase well located and competitively positioned hotel properties at discounted prices due to the highly stressed and dislocated hotel purchase and sale market. Polaris will continue to focus on acquiring additional these hotels as the owner and operator as well as growing the number of hotels under management and variable operating contracts in order to maximize shareholder value.

The Company believes that there are significant economic benefits of owning andoperating hotels like Fino Hotel Sapporo Odori in the current hotel environment. The specific benefits include:

  • Cancelling the existing 30-year fixed rent lease, thereby immediately eliminating the JPY167mn annual fixed rent payment (approximately JPY4.7 billion over the remaining lease term)
  • Significantly lowering the break-even point of the Hotel
  • Improving the return on equity (ROE) of the Company
  • Significant unrealized gains on the acquired property when liquidity in the hotel property market returns to normalized levels

The purchase of this Hotel is now the third hotel acquired since the Company utilizing its owner and operator model following the Best Western Plus Tenjin Minami in Fukuoka and KOKO HOTEL Tsukiji Ginza in Tokyo, which were purchased in April 2021.

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2. Details of Purchased assets

(1)

Subject asset name

Fino Hotel Sapporo Odori

(2)

Address

6-8-1, Minami Ichijo Nishi, Chuo-ku, Sappor City Hokkaido

(Residential Indication)

(3)

Asset Overview

Trust beneficial interest (land and buildings)

(4)

Acquisition cost

We will not disclose the information under the confidentiality

agreement. (※)

  • We plan to fund the acquisition by investing in the holding partnership and by borrowing from a financial institution. Details of the borrowing will be disclosed when consummated.

3.Outline of the Counterparty

(1)

Name

ALPHACOURT CORPORATION

(2)

Address

1-3, Minami Ichijo Nishi 7-chome,Chuo-ku, Sapporo City, Hokkaido

(3)

Job Title/Name of

Yuji Kawamura Chief Executive Officer

Representative

(4)

Description of

Comprehensive real estate business and developer business

Businesses

(5)

Paid-in Capital

JPY0.1 bn

(6)

Date of Incorporation

Mar. 22, 2004

(7)

Net assets

JPY4,014 mn (as of May. 31, 2021)

(8)

Total assets

JPY23,989 mn (as of May. 31, 2021)

(9)

Major shareholders and

Alpha Holdings, Inc. 96.3%

percentage of shares

Capital

There are no noteworthy items.

relationship

Personnel

There are no noteworthy items.

relationship

(10)

Relationship between us

There are no noteworthy matters between us and our

Business

counterparties. Our consolidated subsidiary, Fino Hotels

and the company

relationship

Co., Ltd., has entered into lease agreements with

counterparties for 2 hotels, including the hotel.

Relevant

Status to

There are no noteworthy items.

Relevant Party

4. Schedule of Purchase

(1)

Purchase decision date

Dec. 10, 2021

(2)

Contract day

Dec. 10, 2021

(3)

Date of delivery of the

Dec. 28, 2021 (planned)

premises

5. Overview of Subsidiaries

(1). Subsidiary to Purchase the Premises

①

Name

Tenjin Hotel Kanri LLC

②

Address

1-4, Toranomon 5-chome,Minato-ku, Tokyo

③

Job Title/Name of

Representative General Partner Association Tenjin Hotel Kanri

Representative

④

Description of

Acquisition, holding and disposal of beneficial interests in real estate trusts, etc.

Businesses

⑤

Paid-in Capital

JPY0.3 mn

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(2) Subsidiary that Operates Hotels

①

Name

Fino Hotels Co., Ltd.

②

Address

12-3,Iwamoto-cho1-chome,Chiyoda-ku, Tokyo

③

Job Title/Name of

Chief Executive Officer President Shigeru Takakura

Representative

④

Description of

Hotel management

Businesses

⑤

Paid-in Capital

JPY10 mn

6. Outlook

Upon completion of the purchase, this property will be recorded in current assets as real estate for sale in the consolidated balance sheet.

For the year ending Mar. 2022, it is currently difficult to reasonably predict the effects of the pandemic on the Group's business activities and therefore will be unable to outline our performance forecasts at this time. We will announce our earnings forecasts as soon as practicable.

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KACHIKAIHATSU Co. Ltd. published this content on 10 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 December 2021 07:21:16 UTC.