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Message from Management

Executive Director Kaname Masuda

Thank you for your support and patronage to Japan Hotel REIT Investment Corporation (JHR) and its asset management company, Japan Hotel REIT Advisors Co., Ltd. Having settled the midterm accounts for the 20th fiscal period (from January 1, 2019 to December 31, 2019) of JHR, we are pleased to present you with summary of the asset management status.

For the midterm of the 20th fiscal period, the number of inbound visitors for the same period with the midterm of the 20th fiscal period reached 16.63 million, up 4.6% from the same period of the previous year, despite the need to pay attention to the impact of trends in trade issues on the global economy. As a result, the accommodation and tourism markets in Japan remained firm.

JHR conducted a public offering in January 2019 to acquire “Hilton Tokyo Odaiba” (acquisition price: \62,400 million), which is highly scarce and a large-scale hotel in the center of Tokyo, as well as a flagship property of JHR, and “Hotel Oriental Express Osaka Shinsaibashi” (acquisition price: \2,738 million). With respect to the existing hotels owned by JHR, while accommodation sales in some areas, such as Osaka, Kyoto and Okinawa, etc. were lower than those of the same period of the previous year due to the impact of new hotel supplies, etc., the performance of the hotels in Tokyo, Hiroshima and Fukuoka, etc. continued to be solid and improved revenue through cost reductions and other measures.

With regard to the operating results of the midterm period under review, although the performance of the hotels with variable rent, etc. was lower than that of the previous year due to the new hotel supplies in some areas, the fixed rent increased because of the rent revision and the financial cost was decreased. Therefore, JHR posted operating revenue of \12,719 million, ordinary income of \6,354 million, and net income for the midterm period under review of \6,353 million.

With regard to dividends, since JHR pays dividends based on its earnings of a full year, no dividends will be paid based on the midterm financial results. JHR forecasts dividend per unit for this fiscal year to be \3,686. Please note that the forecast is based on the operating status up until now and the actual dividend per unit will fluctuate due to the operating status going forward.

This year, the 2019 Rugby World Cup will be held from September through November, and Japan will finally host the 2020 Tokyo Olympic and Paralympic Games in the coming year. It is expected that through these sporting events, which are attracting international attention, the attractiveness of Japan would be more widely recognized in overseas than ever before, which is expected to contribute to the mid-to-long term growth of the tourism industry, including the hotel industry.

We at JHR, and Japan Hotel REIT Advisors Co., Ltd., its asset management company, will strive for JHR’s further growth and enhancement of its attractiveness.

We would appreciate your continued support for us.