3rd Fiscal Period (ended Oct. 2014) Presentation Materials

Transcription

1 3rd Fiscal Period (ended Oct. 204) Presentation Materials December 7, 204 Asset Management Company Hoshino Resort Asset Management Co., Ltd. Security Code:

2 Table of Contents I. Management Results of the Fiscal Period Ended October 204 Highlights 3 Summary of capital increase through public offering 4 External growth (newly acquired properties) 5 Internal growth (management results highlights) 6 Finances 7 II. Operational Results for Each Property for each property () (0) 9 Overview of 2 roadside hotels 9 III. Future Performance Forecasts Forecasts for 4th fiscal period ending April 205 and 5th fiscal period ending October 205 Introduction of floating rent 22 IV. Future Management Policy 2 V. Appendix Portfolio in the fiscal period ended October 204 () to (5) 32 Portfolio overview (properties owned in the fiscal period ended October 204) () to (3) RSH2 operational results for each property () to (5) 40 Balance sheet for the fiscal period ended October Statement of income for the fiscal period ended October Balance of payments for each property (HOSHINOYA, RISONARE, KAI) 47 Balance of payments for each property (RSH2) () & (2) 48 Real estate appraisal value for continuously owned properties as of the end of the fiscal period ended October 204 (properties operated by the Hoshino Resorts Group) Real estate appraisal value for continuously owned properties as of the end of the fiscal period ended October 204 (RSH2) Information on unitholders as of the end of the fiscal period ended October 204 Overview of HRR 53 Overview of Asset Management Company Management policy for the time being 24 Market trend and strategy for differentiation 25 External growth 26 Hotels and ryokans operated by the Hoshino Resorts Group 27 Properties to be operated by the Hoshino Resorts Group (starting in 205 or later) Properties under consideration through utilization of information unique to the Asset Management Company Internal growth

3 I. Management Results of the Fiscal Period Ended October 204

4 Highlights Overview of financial results for the 3rd fiscal period (Ended October 204) Operational status (millions of yen) Results of the 2nd fiscal period Forecast for the 3rd fiscal period (as of June 6, 204) (A) Results of the 3rd fiscal period (B) Comparison with forecast (B)-(A) Operating revenue 725,563,563 - Operating income Ordinary income Net income Distribution per unit (yen) Distribution per unit 3,08 6,22 6, (yen) 6,800 Overview of financial results for the fiscal period ended October 204 Distribution per unit was 6,649 yen Comparison with forecast was +437 yen (+2.7%) Breakdown of,563 million of operating revenue: Fixed rent,398 million, floating rent 64 million Main differences in net income from the forecast +7M Decrease in operating expenses +6M +4M Decrease in professional fees Decrease in advertising expenses Decrease in other expenses Increase in non-operating income Generation of insurance revenue Decrease in non-operating expenses Decrease in investment unit issuance expenses Others 6,600 + yen NOI (millions of yen) 629,45,46 - NOI yield (%) LTV 35.5% 22.8% 22.8% - 6,400 6,200 6,000 6,22 yen Forecast + 67 yen Decrease in Operating expenses + 55 yen Increase in non-operating income Decrease in non-operating expenses 6,649 yen Result 5,800 (Amounts are rounded down and ratios are rounded off.) 3

5 Summary of capital increase through public offering Summary of offering Offering form Domestic offering History of HRR Market value (right axis) Investment unit price (left axis) (millions of yen) REIT index (left axis) 60,000 Number of units offered Total amount paid in Domestic primary offering: 22,000 units Third-party allotment: 79 units Total: 22,79 units 7,088 million Announcement of st fiscal period results Listing Announcement of 2nd fiscal period results Resolution for issuance 50,000 40,000 30,000 Issue price per unit 780, ,000 Resolution date of the issuance April 4, ,000 Pricing date April 22, Lead manager Nomura Securities Co., Ltd. Portfolio status after the offering Properties owned as of April 30, 204 Properties acquired on May 2, 204 Properties owned as of December 7, 204 No. of properties owned 6 properties 24 properties 30 properties Total acquisition price 5.0 billion 8.3 billion 33.3 billion Total real estate appraisal value (Note) 7.7 billion 20. billion 38.5 billion Ratio of acquisition price to appraisal value (Note) 84.7 % 9.3 % 86.5 % guest rooms 364 rooms 2,079 rooms 2,443 rooms (Note) Amounts for the properties owned as of April 30, 204, for the properties acquired on May 2, 204 and for the properties owned as of December 7, 204 are based on figures in the real estate appraisal reports which evaluated values as of April 30, 204, as of January 3, 204, and as of October 3, 204, respectively. 4

6 External growth (newly acquired properties) Overview of properties acquired Utilization of preferential negotiating rights Acquisition route Acquisition from Hoshino Resorts Group Acquisition from third-party Sales suggestion from the Asset Management Company HOSHINOYA Kyoto KAI Kawaji KAI Aso 2 roadside hotels Name of facility Operated by Hoshino Resorts Group Operated by the outside operator Name of operator K.K. Arashiyama Onsen Rankyokan Hoshino Resort Management Co., Ltd. K.K. SHR Roadside Inn Acquisition price 2,785 million,000 million 575 million 4,000 million Real estate appraisal value (Note) 2,930 million,00 million 639 million 5,444 million Ratio of acquisition price to appraisal 95.% 90.9% 90.0% 90.7% value (Note) Appraisal NOI yield (Note) 6.8% 8.6% 7.9% 7.5% (Note) Figures are based on real estate appraisal reports which evaluated values as of January 3, 204. Appraisal NOI (Net Operating Income) is defined as operating revenues less operating expenses contained in the relevant real estate appraisal report, which is before depreciation. This is different from NCF (Net Cash Flow) calculated by subtracting gain on investment of leasehold deposit, etc., and capital expenditures from NOI. Appraisal NOI yield is the figure calculated by the Asset Management Company by dividing appraisal NOI by the acquisition price. 5

7 Internal growth (management results highlights) As for the overall operational results of properties from May 204 to October 204, sales increased approximately 463 million yen year-on-year. Especially, the increase in sales of RISONARE Yatsugatake (increase of approx. 46 million yen), HOSHINOYA Karuizawa (increase of approx. 67 million yen) and RSH2 (increase of approx. 7 million yen) are notable. Changes in recognition rate From October 202 to September 203 Sales (Note) From October 203 to September 204 Sales (Note) Change (comparison to previous year) HOSHINOYA Karuizawa 2,68 million 2,804 million + 23 million HOSHINOYA Kyoto 755 million 592 million (Note 2) RISONARE Yatsugatake 3,806 million 3,902 million + 96 million KAI Matsumoto 48 million 456 million + 37 million KAI Izumo 57 million 589 million + 72 million KAI Ito 523 million 608 million + 86 million Changes in intent to use KAI Hakone 448 million (Note 3) 687 million KAI Aso 30 million 334 million + 33 million KAI Kawaji 833 million 476 million (Note 4) RSH2 3,095 million 3,236 million + 40 million Enhancement of recognition rate (Source) Survey by the Hoshino Resorts Group Enhancement of intent to use Increase in sales (Note) Sales are rounded off to the nearest million. (Note2) Due to the damage caused by Typhoon No. 8 on September 6, 203, operation of HOSHINOYA Kyoto was suspended to conduct repair work as well as reconstruction work of some facilities. Thus operational results from October 203 to January 204 do not exist. (Note3) Since KAI Hakone opened on December 28, 202, the figure is calculated based on operational results from January 203 onward. (Note4) of KAI Kawaji from January 204 to May 204 do not exist as operations were suspended to conduct renovation work. 6

8 Finances Formation of interest-bearing liabilities.4%.4% As of October 3, 204 Bank formation 300 million 300 million 3.4% 3.4%,553 million 7.7% As of October 3, %,748 million 55.6% 4,883 million 88.6% 88.6% Long-term interest-bearing liabilities Short-term interest-bearing liabilities Diversification of final repayment dates 3,000 2,000,000 0 Borrowed July 6, 203, FP ending Apr. 205 FP ending Oct ,08 28,990 FP ending Apr. 206 FP ending Oct FP ending Apr. 207 FP ending Oct. 207 Borrowed May 2, , ,360 FP ending Apr. 208 FP ending Oct. 208 Fixed interest rate Floating interest rate As of October 3, FP ending Apr. 209 FP ending Oct. 209 (Unit: millions of yen) 368, ,48 FP ending Apr and after The Bank of Tokyo-Mitsubishi UFJ, Ltd. Sumitomo Mitsui Banking Corporation The Shizuoka Bank, Ltd. Development Bank of Japan Inc. The Ashikaga Bank, Ltd. Comparison of long-term interest-bearing liabilities As of listing As of public offering Drawdown date July 6, 203 Drawdown date May 2, 204 Contract No Contract No Contract period 3 years Contract period 3 years Amount 2,000 million Amount 700 million Fixed rate.44% Fixed rate.2% Contract No Contract No Contract period 5 years Contract period 5 years Amount 2,600 million Amount 300 million Fixed rate.93% Fixed rate.52% Contract No Contract No Contract period 7 years Contract period 7 years Amount,400 million Amount,000 million Fixed rate 2.46% Fixed rate 2.00% 7

9 II. Operational Results for Each Property

10 for each property () HOSHINOYA Karuizawa (millions of yen) 500 (yen) 00, , , , ,000 : Karuizawa-machi, Kitasaku-gun, Nagano 0 May Jun. Jul. Aug. Sep. Oct. 0 Number of guest rooms: 77 rooms Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 88.% 70.9% 69.4% 6.8% 67.0% 76.3% 78.8% 80.4% 9.9% 98.6% 93.5% 87.9% 80.7% ADR (yen) 54,906 58,93 57,34 45,879 48,960 5,874 62,76 56,0 69,369 90,594 72,305 67,482 63,023 RevPAR (yen) 48,390 4,773 39,666 28,335 32,797 39,568 49,447 45,027 63,73 89,303 67,578 59,340 50,88 Sales (millions of yen) ,822 (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Co., Ltd. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. 9

11 for each property (2) HOSHINOYA Kyoto (millions of yen) 50 (yen) 80, ,000 40, ,000 : Kyoto-shi, Kyoto Number of guest rooms: 25 rooms 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate % 77.2% 88.4% 85.4% 7.6% 74.5% 84.3% 88.3% 87.9% 8.5% ADR (yen) ,390 78,640 90,883 74,762 64,44 75,802 8,804 69,626 78,506 74,683 RevPAR (yen) ,368 60,680 80,34 63,86 46,20 56,498 68,949 6,457 68,984 60,835 Sales (millions of yen) (Note ) The monthly major indices are based on figures provided by the lessee, K.K. Arashiyama Onsen Rankyokan. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. (Note 3) Due to the damage caused by Typhoon No.8 on September 6, 203, operation was suspended to conduct repair work. Thus operational results from November 203 to January 204 do not exist. 0

12 for each property (3) RISONARE Yatsugatake (millions of yen) (yen) 50,000 40,000 30,000 20,000 0,000 : Hokuto-shi, Yamanashi Number of guest rooms: 72 rooms 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 83.7% 70.7% 67.5% 62.3% 7.9% 64.7% 70.8% 73.4% 9.% 98.6% 93.6% 86.% 78.6% ADR (yen) 9,525 27,262 28,843 8,26 2,408 9,497 24,620 9,040 30,270 47,662 27,5 22,790 26,52 RevPAR (yen) 6,339 9,276 9,476,35 5,390 2,605 7,426 3,968 27,59 46,973 25,757 9,623 20,836 Sales (millions of yen) ,94 (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Co., Ltd./Yatsugatake. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million.

13 for each property (4) KAI Matsumoto (millions of yen) (yen) 60,000 50,000 40,000 30,000 20,000 0,000 : Matsumoto-shi, Nagano Number of guest rooms: 26 rooms 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 8.3% 53.7% 40.6% 43.3% 62.% 52.4% 64.0% 62.7% 70.0% 93.5% 85.0% 80.6% 65.9% ADR (yen) 34,483 37,50 39,406 26,737 29,44 33,894 39,67 32,204 38,66 56,74 40,53 38,08 38,420 RevPAR (yen) 28,048 9,958 5,987,578 8,084 7,756 25,398 20,202 26,707 53,055 34,30 30,732 25,39 Sales (millions of yen) (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Management Co., Ltd. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. 2

14 for each property (5) KAI Izumo (millions of yen) (yen) 50,000 40, , , ,000 : Matsue-shi, Shimane Number of guest rooms: 24 rooms 0 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 99.0% 96.8% 77.6% 87.2% 95.7% 87.8% 89.7% 84.9% 84.0% 97.3% 98.4% 96.9% 9.2% ADR (yen) 38,485 33,749 32,92 28,78 3,062 33,646 34,990 27,897 30,850 40,38 3,962 35,9 33,486 RevPAR (yen) 38, 32,682 25,53 25,043 29,723 29,534 3,369 23,674 25,95 39,059 3,456 34,033 30,544 Sales (millions of yen) (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Management Co., Ltd. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. 3

15 for each property (6) KAI Ito (millions of yen) (yen) 60,000 50,000 40,000 30,000 20,000 0,000 : Ito-shi, Shizuoka Number of guest rooms: 34 rooms 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 74.7% 68.8% 67.9% 7.7% 80.3% 57.7% 54.4% 53.7% 63.3% 92.7% 72.8% 66.% 68.7% ADR (yen) 27,53 32,035 32,40 26,345 30,53 27,609 35,02 25,62 29,735 44,537 27,429 28,384 3,37 RevPAR (yen) 20,567 22,048 22,00 8,90 24,203 5,92 9,034 3,760 8,87 4,283 9,980 8,769 2,388 Sales (millions of yen) (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Management Co., Ltd. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. 4

16 for each property (7) KAI Hakone (millions of yen) (yen) 60,000 50,000 40,000 30,000 20,000 0,000 : Hakone machi, Ashigarashimo-Gun, Kanagawa Number of guest rooms: 3 rooms 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 78.7% 78.6% 69.0% 69.% 82.5% 74.8% 74.% 65.9% 74.9% 87.3% 75.7% 75.2% 75.6% ADR (yen) 40,529 45,000 43,767 33,398 35,847 35,926 4,506 33,540 36,323 53,087 40,700 42,746 40,507 RevPAR (yen) 3,900 35,389 30,24 23,087 29,580 26,886 30,750 22,087 27,24 46,348 30,809 32,60 30,623 Sales (millions of yen) (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Management Co., Ltd. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. 5

17 for each property (8) KAI Aso (millions of yen) (yen) 70,000 60,000 50,000 40,000 30,000 20,000 0,000 : Kokonoe-machi, Kusu-gun, Oita Number of guest rooms: 2 rooms 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 89.7% 72.5% 68.5% 75.6% 8.7% 7.7% 78.5% 77.6% 72.3% 84.4% 92.5% 8.7% 78.9% ADR (yen) 60,650 57,232 55,603 46,66 50,437 57,455 60,556 49,757 55,546 72,334 55,896 59,54 57,34 RevPAR (yen) 54,46 4,493 38,5 35,26 4,27 4,76 47,533 38,605 40,67 6,056 5,703 48,635 45,092 Sales (millions of yen) (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Management Co., Ltd. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. 6

18 for each property (9) KAI Kawaji (millions of yen) (yen) 30,000 20, ,000 : Nikko-Shi, Tochigi Number of guest rooms: 54 rooms 0 May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 84.5% 60.4% % 57.6% 80.6% 73.0% 6.0% 69.4% ADR (yen) 24,852 20, ,59 9,346 32,074 8,569 28,404 23,044 RevPAR (yen) 2,00 2, ,769,4 25,847 3,548 7,324 5,983 Sales (millions of yen) (Note ) The monthly major indices are based on figures provided by the lessee, Hoshino Resort Management Co., Ltd. (Note 2) Figures for guest room occupancy rates are rounded off to one decimal place, and figures for ADR and RevPAR are rounded off to the nearest whole number. Figures for sales are rounded off to the nearest million. (Note 3) from January 204 to May 204 do not exist as operations were suspended to conduct renovation work. 7

19 for each property (0) RSH2 guest rooms:,988 rooms of 2 roadside hotels (comparison to previous year) (millions of yen) (yen) 400 7, , , , , ,000 50, May Jun. Jul. Aug. Sep. Oct. Sales (left axis) May Oct. 203 Sales (left axis) May Oct. 204 RevPAR (right axis) May Oct. 203 RevPAR (right axis) May Oct Accumulated Guest room occupancy rate 80.2% 76.5% 7.6% 76.7% 82.3% 80.5% 79.6% 76.3% 80.8% 86.2% 8.3% 82.7% 79.6% ADR (yen) 5,72 5,28 5,00 4,947 5,230 5,034 5,442 5,030 5,376 6,434 5,264 5,247 5,300 RevPAR (yen) 4,48 3,925 3,65 3,794 4,305 4,052 4,33 3,836 4,342 5,545 4,278 4,340 4,27 Sales (millions of yen) ,252 8

20 Overview of 2 roadside hotels Since roadside hotels have fewer competitors than business hotels in cities, they are differentiated in the market as a business model different from that of competitors Portfolio overview of 2 roadside hotels of 2 roadside hotels 74.9% 77.8% 68.3% 62.% (millions of yen) 79.9% (yen) Appraisal Value (Note ) 5,654 4,000 million million Appraisal NOI yield (Note ) 7.5% Number of guest rooms,988 rooms Guest room occupancy rate (203) (Note 2) 77.8% ADR (203) (Note 2) 5,204 RevPAR (203) (Note 2) 4,050 yen yen 5,000 4,500 4,000 3,500 3,000 2,500 2,000,500, ,000 4,242 yen 4,050 yen 3,799 yen 3,389 yen 4,000 3,77 yen 3,000 3,32 million 3,268 million 2,000 2,957 million 2,472 million 2,626 million, (Note 3) Sales (left axis) RevPAR (right axis) Guestroom Occupancy Rate (Note ) Figures are based on real estate appraisal reports which evaluated values as of October 3, 204. Appraisal NOI (Net Operating Income) is defined as operating revenues less operating expenses contained in the relevant real estate appraisal report, which is before depreciation. This is different from NCF (Net Cash Flow) calculated by subtracting gain on investment of leasehold deposit, etc., and capital expenditures from NOI. Appraisal NOI yield is the figure calculated by the Asset Management Company by dividing appraisal NOI by the acquisition price. (Note 2) The above figures for Sales, ADR, RevPAR and guest room occupancy rate are figures provided by the Solare Group (without accounting audit, etc.) and are indicated just for reference, thus may be incomplete or inaccurate. They may have been calculated with different accounting standards from HRR. Therefore, these figures may not match the future sales or other operational results of said properties or may greatly differ in some cases. (Note 3) Sales, RevPAR and guest room occupancy rates of 204 are calculated based on actual figures from January to October of 204 and on forecasts from November to December of

21 III. Future Performance Forecasts

22 Forecasts for 4th fiscal period ending April 205 and 5th fiscal period ending October 205 (Amounts are rounded down. Ratios are rounded off.) FP ending April 205 Assumption FP ending October 205 Assumption Operating revenue (millions of yen) Operating income (millions of yen), [Operating revenue] Fixed rent,40 million (includes 2 million of premium fixed rent) Floating rent 96 million Operating revenue (millions of yen) Operating income (millions of yen), [Operating revenue] Fixed rent,394 million (includes 5 million of premium fixed rent) Floating rent 220 million Ordinary income (millions of yen) Net income (millions of yen) [Operating expenses] Fixed assets tax, city planning tax, etc. 77 million Depreciation 34 million Repair expenses 73 million Asset management fees 62 million Ordinary income (millions of yen) Net income (millions of yen) [Operating expenses] Fixed assets tax, city planning tax, etc. 32 million Depreciation 342 million Repair expenses 4 million Asset management fees 63 million Distribution per unit (yen) 6,779 [Non-operating expenses] Debt-financing-related expenses 87 million [Expected LTV at the end of FP] 20.5% Distribution per unit (yen) 6,800 [Non-operating expenses] Debt-financing-related expenses 83 million [Expected LTV at the end of FP] 20.3% Expected rent for the 4th fiscal period ending April 205 Expected rent for the 5th fiscal period ending October 205 Branding Fixed rent Floating rent Total HOSHINOYA RISONARE KAI Others Total,40 96,598 Branding Fixed rent Floating rent Total HOSHINOYA RISONARE KAI Others Total, ,64 (Note) The above forecasts are based on the financial report issued on December 5, 204, and are subject to change due to future acquisitions/dispositions of properties, changes in the real estate market and other circumstances surrounding HRR. Furthermore, the above forecasts do not guarantee the distribution amount. 2

23 Introduction of floating rent Structure of floating rent Base sales ~~ Rent (Fixed + Floating) Base sales x floating rate Fixed Rent Calculating method of monthly floating rent () For May to October every year, deem sales for 2 months to be from April of the previous year to March of the relevant year as the base sales; (2) For November to the next April every year, deem sales for 2 months to be from October of the previous year to September of the relevant year as the base sales. Subtract annual fixed rent from the amount obtained by multiplying the base sales by each facility s floating rate, then divide it by 2. Mar. Apr. May Jun Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. st FP 2nd FP 3rd FP 4th FP 5th FP 3rd FP base sales Aug. Sep. Oct. Nov. Dec. Jan. Feb. Occurrence of floating rent 5th FP base sales Mar. Apr. May Jun. Jul. Aug. Sep. Oct. 4th FP base sales 6th FP base sales Name of facility Floating rate in calculating floating rent 3rd FP From May, 204 to Oct. 3, 204 4th FP From Nov., 204 to April 30, 205 5th FP From May, 205 to Oct. 3, 205 6th FP From Nov., 205 to April 30, 206 Properties owned in FP ended April 204 Properties acquired in May 204 (Note) HOSHINOYA Karuizawa 25% Fixed rent (annual 600 million) + Floating rent RISONARE Yatsugatake 5% Fixed rent (annual 525 million) + Floating rent KAI Matsumoto 6% Fixed rent (annual 75 million) + Floating rent KAI Izumo 6% Fixed rent (annual 75 million) + Floating rent KAI Ito 6% Fixed rent (annual 80 million) + Floating rent KAI Hakone 6% Fixed rent (annual 95 million) + Floating rent HOSHINOYA Kyoto 25% Premium fixed rent (annual 97 million) Fixed rent (annual 87 million) + Floating rent KAI Aso 6% Premium fixed rent (annual 46 million) Fixed rent (annual 42 million) + Floating rent KAI Kawaji 6% Premium fixed rent (annual 0 million) 2 roadside hotels 36.5% Fixed rent (annual 999 million) + Floating rent (Note) Rents accrued from May 2, 204. Fixed rent (annual 99 million) + Floating rent 22

24 IV. Future Management Policy

25 Management policy for the time being Continuous improvement in unitholder value Maintenance of growth and stability of distribution External growth strategy Internal growth strategy 2 3 Utilization of Sponsor Support Agreement Utilization of revitalization know-how of the Hoshino Resorts Group Utilization of the Asset Management Company s unique information on properties operated by outside operators 2 3 Internal growth by operators and the Asset Management Company Introduction of floating rent linked to sales results Maintenance/Enhancement of asset value and competitiveness of the portfolio through establishment/execution of capital expenditures and repair plans from a mediumto long-term perspective 24

26 Market trend and strategy for differentiation Trends in the hotel property investment market With hopes for further growth of the tourism industry in the future, such as from the number of foreign visitors to Japan from January to October of 204 exceeding the annual of 203 in which the number was the highest, movements of leading companies inside and outside the country for launching new hotels is active. The hotel transaction market has been very active and competition for acquisitions is intensifying mainly in the cities. The cap rate is expected to decline further. HRR s strategy for differentiation Criteria for selecting investment properties Superior know-how and experience Whether it has a business model, brand power, etc. that can differentiate itself from other rival companies, and whether it is operated by an operator with extensive expertise Superior equipment and facilities Whether the facility itself possesses superiority as to its location, rarity of the building, etc. Even in the rather over-heated hotel transaction market, HRR will basically target properties that are competitive but with fewer acquisition competitors on a negotiation basis. 25

27 External growth External growth strategy [Measures for realization of external growth] I II Utilization of Sponsor Support Agreement HRR will utilize the comprehensive sponsor support, such as information on properties owned by the Hoshino Resorts Group, the provision of human/material resources, knowledge, experience and know-how in the tourism industry and the resort sector, etc. Utilization of revitalization know-how of the Hoshino Resorts Group HRR will be provided with information on properties that have regained attractiveness through revitalization know-how of the Hoshino Resorts Group. III Utilization of the Asset Management Company s unique information on properties operated by outside operators HRR is collecting information on property acquisitions by establishing networks not only with the Hoshino Resorts Group but also with the owners and operators of hotels, ryokans and ancillary facilities across the nation. HRR will strive to acquire competitive properties by utilizing the Asset Management Company s unique information gathering ability. While focusing on stable growth and the speed of external growth, HRR will aim to make continuous property acquisitions from the Hoshino Resorts Group and also to acquire properties operated by outside operators from which long-term and stable cash flow can be expected. 26

28 Hotels and ryokans operated by the Hoshino Resorts Group Myanmar Thailand Vietnam Malaysia China Indonesia HRR s portfolio (Excluding the above Hoshino Resorts Group s portfolio Philippines HOSHINOYA Bali (scheduled to open in 205) properties) KAI Aso Okinawa Prefecture Yaeyama Islands RISONARE Iriomotejima Iriomote Island RISONARE Kohama Island Aragusuku Island KAI Izumo Hotel Bleston Court HOSHIMNOYA Kyoto UTOCO Auberge & Spa KAI Alps KAI Kaga Ishigaki Island HOSHINOYA Taketomi Taketomijima Island Kuro Island HOSHINOYA Karuizawa KAI Matsumoto KAI Enshu HOSHINOYA Fuji (scheduled to open in 205) KAI Nikko KAI Tsugaru Bandaisan Onsen Hotel KAI Ito Angine (Source) Prepared by the Asset Management Company based on materials provided by Hoshino Resort Co., Ltd. (Note ) Based on information as of December, 204. (Note 2) The map shows facilities operated by the Hoshino Resorts Group and includes properties that are not acquired by HRR. There are no specific plans or guarantee that HRR will acquire these properties in the future, as of December, 204. (Note 3) The scheduled openings are subject to change. Tomamu SKI Resort KAI Hakone KAI Atami RISONARE Atami RISONARE Tomamu Aomoriya Tomamu Oirase Keiryu Hotel Alts Bandai Ski Resort Ura Bandai Nekoma Ski Resort Ura Bandai Hotel KAI Kawaji RISONARE Yatsugatake HOSHINOYA Tokyo (scheduled to open in 206) Tahiti Kiaora Rangiroa (Scheduled to begin operation in 205) 27

29 Properties to be operated by the Hoshino Resorts Group (starting in 205 or later) HOSHINOYA Fuji HOSHINOYA Bali HOSHINOYA Tokyo Kia Ora Rangiroa will start operations on April, 205. HOSHINOYA Bali, HOSHINOYA Fuji scheduled to open in 205 and HOSHINOYA Tokyo in

30 Properties under consideration through utilization of information unique to the Asset Management Company The number of cases discussed cases were brought in during the fiscal period ended October 204. Number of cases by origination Number of cases by property type Hoshino Resorts Group 6 Ryokan 26 Of which, roadside hotels 25 Other than the Hoshino Resorts Group 05 Resort hotel 24 6 City/Business hotel Going forward HRR will continue to work proactively to acquire hotels, ryokans and such with tourism as a key word and will aim to achieve the asset size of 50 billion yen within a few years. Even after achieving 50-billion-yen asset size, HRR will continue to strive for further external and internal growth to secure stable distribution. 29

31 Internal growth Internal growth strategy [Measures for realization of internal growth] I II III Internal growth by operators and the Asset Management Company HRR intends to maintain/enhance the competitiveness of facilities by selecting property management operators who have a deep understanding of HRR s property features and possess business models and know-how suitable for the relevant properties. The Asset Management Company will aim to reinforce the profitability of the portfolio by conducting operation, management and renewals for maintaining/enhancing the competitiveness of facilities. Introduction of floating rent linked to sales results HRR will discuss introduction of floating rent in leasing agreements, linked to sales results in accordance with floating rates set with consideration given to the facility s brand and operating features, in addition to the fixed rent system. HRR believes this is a system that will enable HRR to enjoy the enhanced business results of hotels, ryokans and ancillary facilities operated with the know-how of operators. Maintenance/Enhancement of asset value and competitiveness of the portfolio through establishment/execution of capital expenditures and repair plans from a medium- to long-term perspective HRR will aim for stable earnings from operations by reducing the future risks of major repairs, and of decreased sales resulting from deterioration of facility attractiveness through careful and sufficient capital expenditures, while at the same time making efforts to maintain/enhance the asset value and competitiveness of the portfolio from a medium-term perspective. HRR will aim to realize both growth of distribution by expanding sales that are the base of floating rent, and stability by securing profits. 30

32 V. Appendix

33 Portfolio in the fiscal period ended October 204 () HOSHINOYA KAI Real estate appraisal value HOSHINOYA Karuizawa Nagano 7,600 million 9,470 million Appraisal NOI yield 7.4% Hoshino Resort Co., Ltd. guest rooms 77 RISONARE Real estate appraisal value RISONARE Yatsugatake Yamanashi 4,500 million Real estate appraisal value 5,350 million Appraisal NOI yield 9.7% HOSHINOYA Kyoto Kyoto 2,785 million 3,000 million Appraisal NOI yield 6.8% K.K. Arashiyama Onsen Rankyokan guest rooms 25 Hoshino Resort Co., Ltd./ Yatsugatake guest rooms 72 Real estate appraisal value KAI Matsumoto Nagano 600 million 685 million Appraisal NOI yield 9.9% Hoshino Resort Management Co., Ltd. guest rooms 26 Real estate appraisal value KAI Izumo Shimane 680 million 747 million Appraisal NOI yield 8.6% Hoshino Resort Management Co., Ltd. guest rooms 24 Real estate appraisal value KAI Ito Shizuoka 670 million 76 million Appraisal NOI yield 9.6% Hoshino Resort Management Co., Ltd. guest rooms 34 (Note) Figures are based on real estate appraisal reports which evaluated values as of October 3, 204. Appraisal NOI (Net Operating Income) is defined as operating revenues less operating expenses contained in the relevant real estate appraisal report, which is before depreciation. This is different from NCF (Net Cash Flow) calculated by subtracting gain on investment of leasehold deposit, etc., and capital expenditures from NOI. Appraisal NOI yield is the figure calculated by the Asset Management Company by dividing appraisal NOI by the acquisition price. 32

34 Portfolio in the fiscal period ended October 204 (2) KAI Real estate appraisal value Real estate appraisal value KAI Hakone KAI Kawaji Kanagawa 950 million,40 million Appraisal NOI yield 9.0% Hoshino Resort Management Co., Ltd. guest rooms 3 Real estate appraisal value KAI Aso Oita 575 million 645 million Appraisal NOI yield 7.9% Hoshino Resort Management Co., Ltd. guest rooms 2 Tochigi,000 million,00 million Appraisal NOI yield 8.6% Hoshino Resort Management Co., Ltd. guest rooms 54 Others Shiojiri Kita IC Real estate appraisal value Nagano 672 million 757 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 92 Sano Fujioka IC Real estate appraisal value Tochigi 742 million 845 million Appraisal NOI yield 7.5% SHR Roadside Inn Co., Ltd. guest rooms 92 Real estate appraisal value Suwa IC Nagano 658 million 746 million Appraisal NOI yield 7.5% SHR Roadside Inn Co., Ltd. guest rooms 92 (Note) Figures are based on real estate appraisal reports which evaluated values as of October 3, 204. Appraisal NOI (Net Operating Income) is defined as operating revenues less operating expenses contained in the relevant real estate appraisal report, which is before depreciation. This is different from NCF (Net Cash Flow) calculated by subtracting gain on investment of leasehold deposit, etc., and capital expenditures from NOI. Appraisal NOI yield is the figure calculated by the Asset Management Company by dividing appraisal NOI by the acquisition price. 33

35 Portfolio in the fiscal period ended October 204 (3) Others Toyokawa IC Real estate appraisal value Aichi 602 million 678 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 94 Real estate appraisal value Tosu Saga 504 million 568 million Appraisal NOI yield 7.6% SHR Roadside Inn Co., Ltd. guest rooms 92 Chiba Hamano R6 Real estate appraisal value Chiba 798 million 947 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 94 Kumamoto Miyukifueda Real estate appraisal value Kumamoto 66 million 686 million Appraisal NOI yield 7.6% SHR Roadside Inn Co., Ltd. guest rooms 98 Utsunomiya Kanuma Real estate appraisal value Tochigi 74 million 770 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 98 Real estate appraisal value Fukui Fukui 644 million 75 million Appraisal NOI yield 7.7% SHR Roadside Inn Co., Ltd. guest rooms 98 (Note) Figures are based on real estate appraisal reports which evaluated values as of October 3, 204. Appraisal NOI (Net Operating Income) is defined as operating revenues less operating expenses contained in the relevant real estate appraisal report, which is before depreciation. This is different from NCF (Net Cash Flow) calculated by subtracting gain on investment of leasehold deposit, etc., and capital expenditures from NOI. Appraisal NOI yield is the figure calculated by the Asset Management Company by dividing appraisal NOI by the acquisition price. 34

36 Portfolio in the fiscal period ended October 204 (4) Others Fukushima Nishi IC Real estate appraisal value Fukushima 672 million 78 million Appraisal NOI yield 7.5% SHR Roadside Inn Co., Ltd. guest rooms 98 Niigata Chuo IC Real estate appraisal value Niigata 630 million 699 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 98 Nagasaki Airport Real estate appraisal value Nagasaki 630 million 702 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 92 Hitachinaka Ibaraki 742 million Real estate appraisal value 852 million Appraisal NOI yield 7.6% SHR Roadside Inn Co., Ltd. guest rooms 92 Tsuchiura Ami Ibaraki 770 million Real estate appraisal value 886 million Appraisal NOI yield 7.6% SHR Roadside Inn Co., Ltd. guest rooms 92 Kofu Isawa Yamanashi 658 million Real estate appraisal value 738 million Appraisal NOI yield 7.6% SHR Roadside Inn Co., Ltd. guest rooms 92 (Note) Figures are based on real estate appraisal reports which evaluated values as of October 3, 204. Appraisal NOI (Net Operating Income) is defined as operating revenues less operating expenses contained in the relevant real estate appraisal report, which is before depreciation. This is different from NCF (Net Cash Flow) calculated by subtracting gain on investment of leasehold deposit, etc., and capital expenditures from NOI. Appraisal NOI yield is the figure calculated by the Asset Management Company by dividing appraisal NOI by the acquisition price. 35

37 Portfolio in the fiscal period ended October 204 (5) Others Marugame Zentsuji Real estate appraisal value Kagawa 588 million 647 million Appraisal NOI yield 7.6% SHR Roadside Inn Co., Ltd. guest rooms 98 Real estate appraisal value Munakata Fukuoka 504 million 552 million Appraisal NOI yield 7.5% SHR Roadside Inn Co., Ltd. guest rooms 98 Iwate Ichinoseki IC Real estate appraisal value Iwate 700 million 739 million Appraisal NOI yield 7.3% SHR Roadside Inn Co., Ltd. guest rooms 92 Real estate appraisal value Karuizawa Nagano 82 million 98 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 90 Himeji Yumesakibashi Real estate appraisal value Hyogo 66 million 686 million Appraisal NOI yield 7.7% SHR Roadside Inn Co., Ltd. guest rooms 98 Kurashiki Mizushima Real estate appraisal value Okayama 728 million 805 million Appraisal NOI yield 7.4% SHR Roadside Inn Co., Ltd. guest rooms 98 (Note) Figures are based on real estate appraisal reports which evaluated values as of October 3, 204. Appraisal NOI (Net Operating Income) is defined as operating revenues less operating expenses contained in the relevant real estate appraisal report, which is before depreciation. This is different from NCF (Net Cash Flow) calculated by subtracting gain on investment of leasehold deposit, etc., and capital expenditures from NOI. Appraisal NOI yield is the figure calculated by the Asset Management Company by dividing appraisal NOI by the acquisition price. 36

38 KAI RISONARE HOSHINOYA Portfolio overview (properties owned in the fiscal period ended October 204) () Category Property number H- H-2 R- K- Property name HOSHINOYA Karuizawa HOSHINOYA Kyoto RISONARE Yatsugatake KAI Matsumoto K-2 KAI Izumo K-3 KAI Ito K-4 KAI Hakone K-5 KAI Aso K-6 KAI Kawaji Karuizawa-machi, Kitasaku-gun, Nagano (Chubu region) Land area (m 2 ) Building area (m 2 ) 73,688.42, Period of completion Feb (Tombo-No-Yu, Sonmin Shokudo ) / Apr (HOSHINOYA) / Jun (Harunire Terrace) Annual fixed rent (millions of yen) Leasing area (m 2 ) Leasable area (m 2 ) 600,638.45, Kyoto-shi, Kyoto (Kinki region) 9, ,626.5 Unknown (renovated in Oct. 2009) 97 (Note ) 2, ,626.5 SUBTOTAL 83, , , , Hokuto-shi, Yamanashi (Chubu region) 75, , Jun. 992 (Hotel, pool) / Apr (Chapel, machinery room) , , SUBTOTAL 75, , , , Matsumoto-shi, Nagano (Chubu region) Matsue-shi, Shimane (Chugoku - Shikoku region) Ito-shi, Shizuoka (Chubu region) Hakone machi Ashigarashimo-Gun Kanagawa (Kanto region) Kokonoemachi, Kusugun, Oita (Kyushu - Okinawa region) 3, ,056.2 Nov , ,056.2, , , ,473.9 Unknown (old wing) / Jul. 997 (new wing) Unknown / Nov. 995 (extension) 75 3, , , , , , Jul , , ,673.00, April (Note ),543.53, Nikko-shi, Tochigi (Kanto region) 8, ,90.38 September (Note 2) 8, ,90.38 SUBTOTAL 64, , , , Number of tenants (subleasing) (4) (0) 2 (4) (6) (6) (0) (0) (0) (0) (0) (0) 6 (0) Total number of guest rooms (rooms) (Note ) Annual figure is obtained by multiplying monthly fixed rent with premium charge for the limited period from May 2, 204 to April 30, 205 by 2. (Note 2) Annual figure is obtained by multiplying monthly fixed rent with premium charge for the limited period from May 2, 204 to October 3, 205 by 2. 37

39 Others Portfolio overview (properties owned in the fiscal period ended October 204) (2) Category Property number Property name Land area (m 2 ) Building area (m 2 ) Period of completion Annual fixed rent (millions of yen) Leasing area (m 2 ) Leasable area (m 2 ) Number of tenants (subleasing) Total number of guest rooms (rooms) O- Shiojiri Kita IC Shiojiri-shi, Nagano (Chubu region) 4, ,00.47 Mar ( Shiojiri Kita IC) / Jan (restaurants) 48 2, ,00.47 () 92 O-2 Sano Fujioka IC Sano-shi, Tochigi (Kanto region) 2,894.40,968.9 Oct ,968.9,968.9 (0) 92 O-3 Suwa IC Suwa-shi, Nagano (Chubu region) 2,858., Oct ,944.94, (0) 92 O-4 Toyokawa IC Toyokawa-shi, Aichi (Chubu region) 2, , Jul , , (0) 94 O-5 Tosu Tosu-shi, Saga (Kyushu - Okinawa region) 2,374.09, Jul ,968.02, (0) 92 O-6 O-7 O-8 Chiba Hamano R6 Kumamoto Miyukifueda Utsunomiya Kanuma Chiba-shi, Chiba (Kanto region) Kumamoto-shi, Kumamoto (Kyushu - Okinawa region) Utsunomiya-shi, Tochigi (Kanto region) 2, , Jul , , , , Oct , , , ,094.6 Dec , ,094.6 (0) (0) (0) O-9 Fukui Fukui-shi, Fukui (Chubu region) 2, ,094.0 Dec , ,094.0 (0) 98 O-0 Fukushima-shi, Fukushima Nishi Fukushima (Hokkaido IC - Tohoku region) 4, ,094.0 Feb , ,094.0 (0) 98 38

40 Others Portfolio overview (properties owned in the fiscal period ended October 204) (3) Category Property number Property name Land area (m 2 ) Building area (m 2 ) Period of completion Annual fixed rent (millions of yen) Leasing area (m 2 ) Leasable area (m 2 ) Number of tenants (subleasing) Total number of guest rooms (rooms) O- O-2 O-3 O-4 O-5 O-6 O-7 O-8 O-9 O-20 O-2 Niigata Chuo IC Nagasaki Airport Hitachinaka Tsuchiura Ami Kofu Isawa Marugame Zentsuji Munakata Iwate Ichinoseki IC Karuizawa Himeji Yumesakibashi Kurashiki Mizushima Niigata-shi, Niigata (Chubu region) Omura-shi, Nagasaki (Kyushu - Okinawa region) Hitachinaka-shi, Ibaraki (Kanto region) Nishigo, Inashiki-gun, Ibaraki (Kanto region) Fuefuki-shi, Yamanashi (Chubu region) Marugame-shi, Kagawa (Chugoku - Shikoku region) Munakata-shi, Fukuoka (Kyushu - Okinawa region) Ichinoseki-shi, Iwate (Hokkaido - Tohoku region) Karuizawa-machi, Kitasaku-gun, Nagano (Chubu region) Himeji-shi, Hyogo (Kinki region) Kurashiki-shi, Okayama (Chugoku - Shikoku region) 3, ,094.6 Apr , , ,78.68, May ,968.02, ,284.84, Dec ,968.30, ,963.49, Sep ,968.03, ,357.07, Oct ,968.47, , ,094.6 Oct , , , ,094.6 Dec , , ,633.00, Jan ,968.02, ,226.44,97.0 Jul ,97.0,97.0 2, , Feb , , , ,094.6 Oct , ,094.6 SUBTOTAL 63, , , , TOTAL 287, , ,803 20, , (0) (0) (0) (0) (0) (0) (0) () (0) (0) (0) 2 (2) 30 (32) ,988 2,443 39

41 RSH2 operational results for each property () Shiojiri Kita IC Accumulated Guest room occupancy rate 86.5% 78.2% 69.0% 68.6% 74.6% 75.3% 79.3% 79.2% 80.3% 87.8% 8.8% 85.2% 78.9% ADR (yen) 5,0 5,0 5,045 4,87 5,260 5,058 5,457 5,336 5,396 6,505 5,39 5,254 5,324 RevPAR (yen) 4,4 3,98 3,482 3,34 3,922 3,806 4,328 4,224 4,330 5,73 4,35 4,474 4,99 Sales (millions of yen) Sano Fujioka IC Accumulated Guest room occupancy rate 83.6% 88.3% 85.5% 88.4% 88.3% 84.4% 83.9% 84.7% 78.2% 83.7% 82.0% 82.5% 84.4% ADR (yen) 5,590 5,62 5,447 5,08 5,424 5,275 5,67 5,329 5,355 6,005 5,49 5,455 5,479 RevPAR (yen) 4,670 4,96 4,654 4,53 4,786 4,449 4,74 4,54 4,89 5,026 4,504 4,502 4,626 Sales (millions of yen) Suwa IC Accumulated Guest room occupancy rate 86.4% 73.9% 75.8% 79.6% 84.8% 85.% 8.5% 78.% 85.2% 94.2% 85.3% 88.9% 83.3% ADR (yen) 5,272 5,85 5,56 4,909 5,24 5,07 5,675 5,258 5,549 7,006 5,89 5,50 5,504 RevPAR (yen) 4,553 3,832 3,908 3,908 4,422 4,33 4,626 4,05 4,725 6,598 5,026 4,887 4,582 Sales (millions of yen) Toyokawa IC Accumulated Guest room occupancy rate 77.6% 80.7% 77.9% 74.2% 78.3% 74.5% 77.3% 73.2% 82.5% 87.3% 83.5% 87.6% 79.6% ADR (yen) 4,658 4,480 4,425 4,365 4,83 4,466 4,938 4,333 4,488 5,226 4,67 4,389 4,608 RevPAR (yen) 3,62 3,62 3,447 3,240 3,769 3,328 3,87 3,70 3,704 4,562 3,853 3,844 3,669 Sales (millions of yen) Tosu Accumulated Guest room occupancy rate 84.4% 82.3% 63.3% 67.% 79.6% 75.% 72.6% 63.% 78.8% 84.6% 78.5% 79.0% 75.8% ADR (yen) 4,354 4,403 4,802 4,424 4,50 4,382 4,98 4,304 4,499 5,64 4,502 4,497 4,568 RevPAR (yen) 3,675 3,624 3,037 2,967 3,582 3,29 3,57 2,74 3,544 4,369 3,534 3,554 3,46 Sales (millions of yen)

42 RSH2 operational results for each property (2) Chiba Hamano R Accumulated Guest room occupancy rate 86.% 9.5% 85.2% 92.9% 92.2% 90.9% 89.0% 78.6% 89.3% 87.2% 8.9% 87.2% 87.7% ADR (yen) 5,667 5,888 5,56 5,326 5,68 5,533 5,448 5,57 5,705 6,74 5,232 5,389 5,645 RevPAR (yen) 4,876 5,385 4,736 4,945 5,8 5,030 4,849 4,379 5,096 5,880 4,285 4,699 4,949 Sales (millions of yen) Kumamoto Miyukifueda Accumulated Guest room occupancy rate 87.3% 82.0% 74.2% 84.6% 82.7% 77.5% 76.4% 69.4% 74.6% 8.0% 84.9% 79.9% 79.5% ADR (yen) 4,49 4,355 4,339 4,306 4,80 4,373 4,948 4,323 4,54 5,006 4,424 4,400 4,529 RevPAR (yen) 3,99 3,570 3,220 3,642 3,978 3,388 3,780 2,998 3,368 4,053 3,756 3,53 3,600 Sales (millions of yen) Utsunomiya Kanuma Accumulated Guest room occupancy rate 78.2% 76.3% 72.5% 8.9% 77.9% 82.7% 8.4% 72.5% 74.4% 8.3% 79.5% 87.2% 78.8% ADR (yen) 5,558 5,455 5,559 5,352 5,779 5,338 5,705 5,428 5,629 6,288 5,648 5,79 5,635 RevPAR (yen) 4,343 4,64 4,028 4,380 4,498 4,4 4,643 3,932 4,87 5,0 4,487 5,05 4,439 Sales (millions of yen) Fukui Accumulated Guest room occupancy rate 79.% 7.2% 67.3% 7.% 80.2% 79.6% 77.9% 7.4% 77.5% 80.9% 77.5% 77.6% 76.0% ADR (yen) 5,249 5,304 5,27 5,099 5,95 4,92 5,5 4,846 5,63 5,728 5,253 5,65 5,97 RevPAR (yen) 4,52 3,777 3,544 3,627 4,65 3,97 3,98 3,458 3,998 4,634 4,072 4,005 3,948 Sales (millions of yen) Fukushima Nishi IC Accumulated Guest room occupancy rate 85.0% 77.9% 68.% 77.7% 76.8% 8.8% 8.8% 80.8% 84.9% 84.3% 87.% 84.8% 80.9% ADR (yen) 5,357 5,260 4,896 4,837 5,307 5,086 5,66 5,438 5,285 5,896 5,552 5,597 5,364 RevPAR (yen) 4,553 4,096 3,334 3,759 4,077 4,6 4,628 4,39 4,486 4,97 4,836 4,746 4,340 Sales (millions of yen)

43 RSH2 operational results for each property (3) Niigata Chuo IC Accumulated Guest room occupancy rate 68.5% 55.% 49.9% 65.% 68.% 70.% 64.9% 58.6% 66.8% 9.4% 75.8% 79.3% 67.8% ADR (yen) 5,22 5,008 4,794 5,27 5,448 5,66 5,752 5,45 5,377 6,802 5,22 5,306 5,425 RevPAR (yen) 3,506 2,76 2,393 3,395 3,70 3,69 3,735 3,06 3,59 6,25 3,949 4,207 3,679 Sales (millions of yen) Nagasaki Airport Accumulated Guest room occupancy rate 88.8% 84.% 74.0% 84.7% 86.4% 76.0% 80.% 77.3% 78.6% 8.% 82.8% 86.8% 8.7% ADR (yen) 4,750 4,693 4,9 4,864 4,992 4,93 5,94 4,646 4,826 5,579 4,64 6,097 5,07 RevPAR (yen) 4,29 3,947 3,635 4,2 4,32 3,746 4,58 3,590 3,793 4,526 3,82 5,289 4,099 Sales (millions of yen) Hitachinaka Accumulated Guest room occupancy rate 88.4% 87.3% 85.7% 87.4% 88.7% 90.9% 87.9% 88.7% 94.5% 90.6% 90.2% 94.6% 89.6% ADR (yen) 5,273 5,8 5,268 5, 5,393 5,74 5,462 5,22 5,539 6,64 5,276 5,74 5,357 RevPAR (yen) 4,663 4,523 4,52 4,465 4,786 4,703 4,80 4,620 5,232 5,584 4,759 4,896 4,800 Sales (millions of yen) Tsuchiura Ami Accumulated Guest room occupancy rate 9.6% 9.7% 86.% 86.3% 9.7% 9.3% 88.8% 79.7% 85.5% 89.3% 83.9% 88.4% 87.9% ADR (yen) 5,547 5,472 5,429 5,360 5,529 5,228 5,406 5,276 5,524 5,67 5,89 5,297 5,40 RevPAR (yen) 5,080 5,05 4,673 4,625 5,07 4,77 4,799 4,205 4,723 5,06 4,352 4,68 4,754 Sales (millions of yen) Kofu Isawa Accumulated Guest room occupancy rate 7.5% 66.% 68.5% 68.6% 80.9% 77.8% 79.0% 75.6% 8.4% 88.2% 79.9% 76.4% 76.2% ADR (yen) 5,350 5,240 5,54 4,872 5,29 5,358 5,685 5,20 6,73 7,937 5,436 5,439 5,644 RevPAR (yen) 3,822 3,465 3,529 3,340 4,28 4,67 4,489 3,87 5,025 7,00 4,342 4,55 4,302 Sales (millions of yen)

44 RSH2 operational results for each property (4) Marugame Zentsuji Accumulated Guest room occupancy rate 7.% 66.% 7.4% 79.0% 9.2% 72.2% 7.9% 73.% 76.% 86.6% 8.8% 76.9% 76.4% ADR (yen) 5,004 5,000 4,702 4,650 4,843 4,720 5,20 4,876 5,069 6,88 4,780 4,437 4,970 RevPAR (yen) 3,555 3,303 3,358 3,674 4,45 3,408 3,740 3,562 3,855 5,358 3,908 3,4 3,799 Sales (millions of yen) Nunakata Accumulated Guest room occupancy rate 73.9% 75.9% 72.% 83.6% 8.2% 83.4% 82.0% 74.5% 78.0% 83.9% 74.6% 75.8% 78.2% ADR (yen) 4,434 4,465 4,576 4,447 4,622 4,94 4,728 4,34 4,552 5,074 4,50 4,460 4,537 RevPAR (yen) 3,277 3,390 3,300 3,75 3,75 3,497 3,876 3,22 3,549 4,257 3,362 3,379 3,548 Sales (millions of yen) Iwate Ichinoseki IC Accumulated Guest room occupancy rate 75.9% 63.7% 60.2% 57.0% 74.9% 78.3% 83.3% 8.8% 84.7% 87.5% 77.0% 77.8% 75.3% ADR (yen) 5,632 5,544 5,575 5,39 5,448 5,40 5,556 5,08 5,59 6,429 5,796 5,852 5,68 RevPAR (yen) 4,274 3,530 3,354 3,069 4,080 4,237 4,628 4,54 4,675 5,622 4,462 4,555 4,229 Sales (millions of yen) Karuizawa Accumulated Guest room occupancy rate 64.9% 52.7% 47.5% 50.6% 64.5% 7.0% 83.4% 87.7% 90.6% 9.7% 86.9% 8.0% 72.8% ADR (yen) 6,409 6,23 6,405 5,629 6,36 5,846 7,48 6,02 8,55 4,058 8,07 7,036 7,602 RevPAR (yen) 4,58 3,280 3,04 2,845 3,958 4,5 5,96 5,35 7,748 2,884 7,043 5,70 5,536 Sales (millions of yen) Himeji Yumesakibashi Accumulated Guest room occupancy rate 74.8% 78.6% 7.% 73.7% 87.5% 83.7% 74.7% 74.8% 77.3% 8.5% 78.3% 82.7% 78.2% ADR (yen) 5,026 5,59 4,73 4,639 5,20 4,824 5,25 4,592 4,89 5,950 4,788 4,74 4,987 RevPAR (yen) 3,757 4,054 3,365 3,46 4,480 4,036 3,99 3,433 3,778 4,849 3,749 3,920 3,902 Sales (millions of yen)

45 RSH2 operational results for each property (5) Kurashiki Mizushima Accumulated Guest room occupancy rate 8.9% 84.3% 78.6% 86.8% 97.5% 88.9% 75.9% 8.3% 79.4% 87.0% 74.8% 78.7% 82.9% ADR (yen) 5,075 5,095 5,368 5,333 5,32 5,324 5,39 4,748 4,944 5,468 4,847 4,94 5,62 RevPAR (yen) 4,58 4,293 4,27 4,63 5,87 4,73 4,093 3,858 3,924 4,758 3,627 3,886 4,280 Sales (millions of yen)