Semi-Annual Report 7th Fiscal Period. Hoshino Resorts REIT, Inc.

Semi-Annual Report 7th Fiscal Period Hoshino Resorts REIT, Inc. 3-6-18 Kyobashi, Chuo-ku, Tokyo (from May 1, to October 31, )

I. Asset Management Report 1. Overview of asset management (1) Trend in key indicators Operating revenue Of the above, operating revenue from real estate leasing Operating expenses Of the above, operating expenses from real estate leasing Operating income Ordinary income Net income Total assets Fiscal period (Change from previous period) Net assets (Change from previous period) Interest-bearing liabilities Unitholders capital Total number of investment units issued and outstanding Net assets per unit (net asset value) Total distributions (millions of yen) (millions of yen) (millions of yen) (millions of yen) (millions of yen) (millions of yen) (millions of yen) (millions of yen) 3rd fiscal period (From May 1, 2014 to October 31, 2014) 4th fiscal period (From November 1, 2014 to April 30, 2015) 5th fiscal period (From May 1, 2015 to October 31, 2015) 6th fiscal period (From November 1, 2015 to April 30, ) 7th fiscal period (From May 1, to October 31, ) 1,563 1,599 1,926 3,559 3,981 1,563 1,599 1,926 3,559 3,981 667 780 892 1,645 1,884 484 531 628 1,303 1,428 895 818 1,034 1,914 2,097 716 734 909 1,601 1,816 715 733 908 1,600 1,815 38,530 37,421 48,412 101,941 105,709 (%) 121.9 (2.9) 29.4 110.6 3.7 (millions of yen) 27,721 27,739 37,022 69,507 74,407 (%) 172.2 0.1 33.5 87.7 7.0 (millions of yen) (millions of yen) 8,784 7,693 9,001 28,385 27,160 27,006 27,006 36,113 67,906 72,591 (units) 42,969 42,969 49,689 78,008 81,757 (yen) 645,151 645,577 745,077 445,516 455,052 (millions of yen) 715 733 908 1,600 1,815 Distributions per unit (yen) 16,649 17,075 18,289 20,520 22,209 Of the above, distributions of earnings per unit Of the above, distributions in excess of earnings per unit Ratio of ordinary income to total assets (yen) 16,649 17,075 18,289 20,520 22,209 (yen) (Note 4) (%) 2.6 1.9 2.1 2.1 1.7 (Annualized) (Note 5) (%) 5.1 3.9 4.2 4.3 3.5 Return on equity (Note 4) (%) 3.8 2.6 2.8 3.0 2.5 (Annualized) (Note 5) (%) 7.5 5.3 5.6 6.0 5.0 1

Fiscal period Unitholders equity to total assets (Change from previous period) 3rd fiscal period (From May 1, 2014 to October 31, 2014) 4th fiscal period (From November 1, 2014 to April 30, 2015) 5th fiscal period (From May 1, 2015 to October 31, 2015) 6th fiscal period (From November 1, 2015 to April 30, ) 7th fiscal period (From May 1, to October 31, ) (Note 4) (%) 71.9 74.1 76.5 68.2 70.4 (%) 13.3 2.2 2.3 (8.3) 2.2 Payout ratio (Note 4) (%) 100.0 100.0 100.0 100.0 100.0 [Other Information] Number of operating days Number of properties at end of period Depreciation during period Capital expenditures during period Rental NOI (Net Operating Income) FFO (Funds from Operation) (Note 4) (Note 4) (days) 184 181 184 182 184 (properties) 30 30 39 46 47 (millions of yen) (millions of yen) (millions of yen) (millions of yen) 338 339 410 735 831 134 135 170 635 1,037 1,416 1,407 1,708 2,992 3,384 1,054 1,074 1,319 2,337 2,647 FFO per unit (Note 4) (yen) 24,533 24,996 26,564 29,958 32,384 Total distributions / FFO ratio Ratio of interest-bearing liabilities to total assets at end of period (LTV) (Note 4) (%) 67.9 68.3 68.8 68.5 68.6 (%) 22.8 20.6 18.6 27.8 25.7 The amounts of operating revenue, etc. do not include consumption taxes. Unless otherwise stated, monetary amounts are rounded down to the nearest indicated unit and percentage figures are rounded to one decimal place in this report. A 2-for-1 split of investment units was implemented with the record date of October 31, and the effective date of November 1,. Net assets per unit is calculated based on the assumption that the split of investment units was implemented at the beginning of the 6th fiscal period. (Note 4) The following formulas are used for the calculation: Ratio of ordinary income to total assets Ordinary income / ((Total assets at beginning of period + Total assets at end of period) /2) 100 Return on equity Net income / ((Net assets at beginning of period + Net assets at end of period) / 2) 100 Unitholders equity to total assets Net assets at end of period / Total assets at end of period 100 Payout ratio Rental NOI (Net Operating Income) FFO (Funds from Operation) FFO per unit Distributions per unit (excluding distributions in excess of earnings) / Net income per unit 100 Payout ratio for the 3rd fiscal period, 5th fiscal period, 6th fiscal period, and 7th fiscal period is calculated by the following formula due to the issuance of new investment units: Total distributions (excluding distributions in excess of earnings) / Net income 100 Operating revenue from real estate leasing - Operating expenses from real estate leasing + Depreciation Net income + Depreciation + Loss on disposal of property and equipment - Gains (losses) from sales of properties FFO / Total number of investment units issued and outstanding Total distributions / FFO ratio Total distributions (including distribution in excess of earnings) / FFO 100 (Note 5) Annualized portion of the calculation assumes a fiscal period of 184 days for the 3rd fiscal period, 181 days for the 4th fiscal period, 184 days for the 5th fiscal period, 182 days for the 6th fiscal period, and 184 days for the 7th fiscal period. 2

(2) Performance review of HRR for the fiscal period under review i) Brief history of HRR Hoshino Resorts REIT, Inc. ( HRR ) invests in hotels, ryokans (Japanese-style inns) and ancillary facilities that serve at the core of the tourism industry and for which stable use is expected for the medium to long term. HRR was established under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, including amendments thereto) (hereinafter the Investment Trusts Act ) with Hoshino Resort Asset Management Co., (hereinafter, the Asset Management Company ) as the organizer and with investments in capital of 150 million yen (300 investment units) on March 6, 2013. An issuance of new investment units through public offering (19,000 units) was implemented with July 11, 2013 as the payment due date, and the investment securities were listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (securities code: 3287) on July 12, 2013. HRR has been steadily expanding asset size since then, and the assets held by HRR at the end of the fiscal period under review was 47 properties (sum total of acquisition price: 93,182 million yen). ii) Investment environment and business performance In the Japanese economy in the fiscal period under review, although stagnation in improvement of corporate earnings was observed due to rising uncertainty regarding the overseas economy, specifically, slowdowns in China and other Asian emerging countries and the issue of the UK leaving the EU, a mild recovery continued owing to such factors as a trend of improvement in the employment and income environments. For the tourism market, the Japanese government has set goals to increase inbound tourists number to 40 million by 2020 and inbound tourists spending amount to 8 trillion yen by 2020 considering tourism as one of the pillars of its growth strategies. The increase rate of the tourists has nevertheless decreased mainly due to the yen appreciation. However, in the environment described above, the hotels/ryokans held by HRR were managed with a goal of securing stable earnings in the fiscal period under review, resulting in stable operational results in the fiscal period ended October. iii) Overview of fund procurement In the fiscal period under review, in addition to procuring 4,461 million yen from the issuance of new investment units through public offering on May 2, and 223 million yen from the issuance of new investment units through third-party allotment on May 24,, 2,500 million yen was procured through debt financing on May 2,, and these were allocated to part of the funds for acquisition of KAI Kaga and part of the funds for repayment of loans. In August, HRR secured an agreement with a syndicate of banks to release the pledges held for the balance of all outstanding loans, and on August 31,, HRR s loans payable became unsecured. Furthermore, scheduled payment was made, resulting in balance of loans outstanding of 27,160 million yen and ratio of interest-bearing liabilities to total assets (LTV) of 25.7% as of October 31,. In addition, as of the end of the fiscal period under review, HRR has been assigned a long-term issuer rating of A- (rating outlook: stable) from Japan Credit Rating Agency, (JCR). iv) Overview of business performance and distributions As a result of the management described above, business performance in the fiscal period under review resulted in operating revenue of 3,981 million yen, operating income of 2,097 million yen, ordinary income of 1,816 million yen and net income of 1,815 million yen. Concerning distributions, to ensure application of special provisions for taxation on investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957, as amended; hereinafter, the Act on Special Measures Concerning Taxation )), the decision was made to distribute almost the entire amount of unappropriated retained earnings and distribution per investment unit was 22,209 yen. 3

(3) Status of capital increase, etc. The following are the changes in unitholders capital and total number of investment units issued and outstanding since the establishment of HRR through October 31,. Date March 6, 2013 July 11, 2013 August 12, 2013 May 1, 2014 May 27, 2014 May 1, 2015 May 26, 2015 November 2, 2015 November 25, 2015 May 2, May 24, (Note 4) (Note 5) (Note 6) (Note 7) (Note 8) (Note 9) (Note 10) (Note 11) (Note 12) Event Establishment through private placement Capital increase through public offering Capital increase through third-party allotment Capital increase through public offering Capital increase through third-party allotment Capital increase through public offering Capital increase through third-party allotment Capital increase through public offering Capital increase through third-party allotment Capital increase through public offering Capital increase through third-party allotment Unitholders capital (thousands of yen) Increase (Decrease) Balance Total number of investment units issued and outstanding (units) Increase (Decrease) Balance Note 150,000 150,000 300 300 9,302,400 9,452,400 19,000 19,300 465,120 9,917,520 950 20,250 16,547,762 26,465,282 22,000 42,250 (Note 4) 540,810 27,006,092 719 42,969 (Note 5) 8,673,580 35,679,673 6,400 49,369 (Note 6) 433,679 36,113,352 320 49,689 (Note 7) 30,279,030 66,392,382 26,970 76,659 (Note 8) 1,514,512 67,906,895 1,349 78,008 (Note 9) 4,461,050 72,367,946 3,570 81,578 (Note 10) 223,677 72,591,623 179 81,757 (Note 11) Upon establishment of HRR, new investment units were issued at an offer price of 500,000 yen per unit. For the purpose of allocating funds for acquisition of specified assets and repayment of loans, new investment units were issued through public offering at an offer price of 510,000 yen (paid-in amount of 489,600 yen) per unit. For the purpose of allocating funds for acquisition of specified assets and repayment of loans, new investment units were issued through third-party allotment with paid-in amount of 489,600 yen per unit. For the purpose of allocating funds for part of the funds for acquisition of specified assets, new investment units were issued through public offering at an offer price of 780,178 yen (paid-in amount of 752,171 yen) per unit. For the purpose of allocating funds for repayment of loans, new investment units were issued through third-party allotment with paid-in amount of 752,171 yen per unit. For the purpose of allocating funds for acquisition of specified assets, new investment units were issued through public offering at an offer price of 1,404,215 yen (paid-in amount of 1,355,247 yen) per unit. For the purpose of allocating funds for part of the funds for acquisition of specified assets, new investment units were issued through third-party allotment with paid-in amount of 1,355,247 yen per unit. For the purpose of allocating funds for acquisition of specified assets, new investment units were issued through public offering at an offer price of 1,162,024 yen (paid-in amount of 1,122,693 yen) per unit. For the purpose of allocating funds for part of the funds for acquisition of specified assets, new investment units were issued through third-party allotment with paid-in amount of 1,122,693 yen per unit. For the purpose of allocating funds for part of the funds for acquisition of specified assets, new investment units were issued through public offering at an offer price of 1,294,745 yen (paid-in amount of 1,249,594 yen) per unit. For the purpose of allocating funds for part of the funds for acquisition of specified assets, new investment units were issued through third-party allotment with paid-in amount of 1,249,594 yen per unit. A 2-for-1 split of investment units was implemented with the record date of October 31, and the effective date of November 1,. Total number of investment units issued and outstanding after the split is 163,514. 4

[Changes in market price of investment unit] The highest and lowest unit prices (closing price) of the investment units of HRR listed on J-REIT section of the Tokyo Stock Exchange for each period are as follows: Fiscal period Highest (Yen) Lowest (Yen) 3rd fiscal period (From May 1, 2014 to October 31, 2014) 4th fiscal period (From November 1, 2014 to April 30, 2015) 5th fiscal period (From May 1, 2015 to October 31, 2015) 6th fiscal period (From November 1, 2015 to April 30, ) 7th fiscal period (Note) (Before ex rights) (From May 1, to October 31, ) 7th fiscal period (Note) (After ex rights) (From May 1, to October 31, ) 1,196,000 1,534,000 1,448,000 1,399,000 1,330,000 626,000 752,000 1,103,000 1,035,000 1,104,000 1,203,000 615,000 (Note) A 2-for-1 split of investment units was implemented with the record date of October 31, and the effective date of November 1,. Accordingly, transactions have been made at ex rights price on and after October 27,. (4) Distributions, etc. With the aim of having the maximum amount of distributable income deducted as expense pursuant to Article 67-15 of the Act on Special Measures Concerning Taxation, HRR resolved to distribute the entire amount of unappropriated retained earnings for the period, excluding fractions of distributions per unit that were less than 1. Consequently, distributions per unit came to 22,209. Fiscal period Total net income (thousands of yen) Total unappropriated retained earnings (undisposed loss) (thousands of yen) Retained earnings brought forward (thousands of yen) Total cash distributions (thousands of yen) (Distributions per unit) (yen) Of the above, total distributions (thousands of yen) 3rd fiscal period (From May 1, 2014 to October 31, 2014) 4th fiscal period (From November 1, 2014 to April 30, 2015) 5th fiscal period (From May 1, 2015 to October 31, 2015) 6th fiscal period (From November 1, 2015 to April 30, ) 7th fiscal period (From May 1, to October 31, ) 715,400 733,714 908,751 1,600,731 1,815,763 715,409 733,732 908,788 1,600,757 1,815,796 18 37 26 33 55 715,390 733,695 908,762 1,600,724 1,815,741 16,649 17,075 18,289 20,520 22,209 715,390 733,695 908,762 1,600,724 1,815,741 (Distributions of earnings per unit) 16,649 17,075 18,289 20,520 22,209 Of the above, total refund of investments (thousands of yen) (Refund of investments per unit) Of total refund of investments, total distributions from reserve for temporary difference adjustments (Of refund of investments per unit, distributions from reserve for temporary difference adjustments per unit) (yen) Of total refund of investments, total distributions from the unitholders capital for tax purposes (Of refund of investments per unit, distributions from the unitholders capital for tax purposes per unit) (yen) 5

(5) Future management policy i) Future trends outlook The Japanese economy is expected to experience a continued slower pace of economic recovery due to weak exports and production, owing to the effect of the slowdown of the emerging economies and other factors. Attention will still need to be given to the risks that may push down the Japanese economy due to the rising uncertainty surrounding the overseas economy, specifically downside performance in China and other Asian emerging countries, and resource-rich countries and the issue of the UK leaving the EU. In addition, the Japanese government has announced tourism policies aimed at enhancing the international competitiveness of the tourism business through relaxation of regulations and enhancement of the productivity of the lodging business. Such policies include relaxation of visa requirements for entry from the five countries of China, the Philippines, Vietnam, India and Russia, opening of the State Guest Houses and other public facilities for public viewing/access, and maintenance of tourist spots centering on cultural properties. In this manner, with large economic ripple effects, the tourism industry is becoming increasingly important as one of the drivers of Japan s economic growth. ii) Future management policy and challenges to be addressed Under such circumstances, HRR s basic policy is to form a portfolio with a stable revenue base centering on hotels, ryokans and ancillary facilities that can meet the travel needs of tourists. In the hotel/ryokan industry which has trended toward being commoditized in general, HRR believes facilities that are differentiated from others due to an outstanding business model, operating skills, location and such are the ones that will be able to generate stable earnings and secure steady cash flow over a long-term period. From this perspective, HRR selects investment properties from the stance of superior know-how and experience (whether the business model, brand power, etc. can be differentiated from competitors, and whether it is operated by an operator with extensive expertise) and superior equipment and facilities (whether the facility itself is superior as to its location, rarity of the building, etc.). HRR seeks to flexibly form an optimum portfolio in order to secure long-term and stable cash flow. After proactively obtaining information on for-sale properties operated by both the Hoshino Resorts Group and outside operators as well as overseas for-sale properties related to the Hoshino Resorts Group, HRR will examine individual properties upon their selection for investment. a. Properties operated by the Hoshino Resorts Group HRR believes the securement of stable earnings will be achieved by investing mainly in the three brands HOSHINOYA, Hoshino Resorts KAI and Hoshino Resorts RISONARE operated by the Hoshino Resorts Group. HRR intends to obtain information on facilities under the three brands and other brands of the Hoshino Resorts Group by actively utilizing the sponsor support agreement with Hoshino Resorts. As a result, if HRR decides that a facility is able to generate long-term and stable cash flow, proactive investments will be made. b. Properties operated by outside operators Similar to when investing in properties operated by the Hoshino Resorts Group, HRR believes it will be able to secure long-term and stable cash flow by making appropriate investments while taking superior know-how and experience and superior equipment and facilities into consideration, based on sufficient information collection by the Asset Management Company. Taking this view, HRR will make proactive investments in hotels, ryokans and ancillary facilities operated by outside operators if it decides secure, long-term and stable cash flow is possible after obtaining the necessary information by taking advantage of the sponsor support agreement with Hoshino Resorts and the Asset Management Company s unique networks. c. Overseas properties related to the Hoshino Resorts Group With regard to HRR s investment policy on the overseas properties related to the Hoshino Resorts Group, HRR makes it a policy to carry out prudent investment after (1) obtaining accurate information on the countries and regions in which the investment properties with potential are located; (2) performing a comprehensive analysis of the market to which the potential investment properties belong, including real-estate market trends, systems, and regulations in each country, which takes into consideration macro factors such as political trends, population trends, and economic growth; and (3) performing a comprehensive risk analysis of each country s legal, accounting, and tax systems, as well as foreign 6

exchange risks, etc., related to investment and revenue returns. In addition to the above policy, HRR also follows a policy of investment based on prudent selection of only overseas properties related to the Hoshino Resorts Group that can be expected to be used on a stable basis and to have the potential to secure long-term and stable cash flows. Moreover, HRR aims to enhance profitability through expansion of asset size, and also aims to promote portfolio diversification in order to reduce the risk of a significant drop in HRR s cash flow due to changes in tourism trends, disasters, etc. The Hoshino Resorts Group operates each facility after categorizing investment target hotels, ryokans and ancillary facilities into the brands from various perspectives. HRR works to stabilize revenue by promoting portfolio diversification through investments not only in single brands of the Hoshino Resorts Group but in the three brands and other brands of the Hoshino Resorts Group as a whole, as well as in properties operated by outside operators and overseas properties related to the Hoshino Resorts Group. The facilities held by HRR vary by size, price setting and target customer base, leading to portfolio diversification effects. In addition, these facilities are diversified in terms of not only diversification by brand but also by geographic area of facility location and thereby reducing the risk of a significant drop in HRR s cash flow. (6) Significant subsequent events i) Acquisition of assets HRR acquired the real estate described below on November 1, (the acquisition price: 16,000 million yen). The acquisition price is the price stated in the sales and purchase agreement of the real estate, which does not include acquisition expenses, property-related taxes and consumption taxes. Name of property Location Seller Acquisition price (millions of yen) Acquisition date Hyatt Regency Osaka Osaka-shi, Osaka GCREF Japan I TMK 16,000 November 1, (Note) The acquisition price includes the trading value (79 million yen) of equipment, etc. acquired from GCP Hospitality Japan K.K., which was a lessee of the property. Note that GCP Hospitality Japan K.K. changed its trade name to HRO Inc. on November 1,. ii) Additional borrowings HRR obtained bank loans on November 1, for acquisition of specified assets and related costs as stated in (1) Acquisition of assets above. Floating /Fixed Floating Lender Loan amount Interest rate Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation Resona Bank, Limited The Bank of Fukuoka, The Ashikaga Bank, The Hokuriku Bank, The Yamaguchi Bank, The Senshu Ikeda Bank, 1.5 billion yen 2.5 billion yen Base rate 1-month Japanese Yen TIBOR + 0.400% Base rate 1-month Japanese Yen TIBOR + 0.2375% Drawdown date November 1, November 1, Repayment due date (Note 4) October 31, 2017 April 30, 2019 Repayment method payment at maturity payment at maturity 7

Floating/ Fixed Floating Lender Loan amount Interest rate Sumitomo Mitsui Banking Corporation Resona Bank, Limited The Bank of Fukuoka, The Ashikaga Bank, The Hokuriku Bank, The Yamaguchi Bank, The Senshu Ikeda Bank, 2.5 billion yen Base rate 1-month Japanese Yen TIBOR + 0.300% Drawdown date November 1, Repayment due date (Note 4) October 30, 2020 Repayment method payment at maturity Resona Bank, Limited The Bank of Fukuoka, Sumitomo Mitsui Banking Corporation The Ashikaga Bank, The Hokuriku Bank, The Yamaguchi Bank, 2.0 billion yen 0.54888% November 1, April 30, 2021 payment at maturity Fixed Sumitomo Mitsui Banking Corporation 2.5 billion yen 0.76832% November 1, October 31, 2022 payment at maturity Sumitomo Mitsui Banking Corporation 2.5 billion yen 0.85244% November 1, April 28, 2023 payment at maturity Sumitomo Mitsui Banking Corporation 2.5 billion yen 0.93702% November 1, October 31, 2023 payment at maturity (Note 4) The base rate applicable to the interest calculation period for the interest payable on an interest payment due date shall be, of the Japanese Yen TIBOR (Tokyo Interbank Offered Rate) published by JBA TIBOR Administration as of two business days prior to the interest payment due date immediately preceding that interest payment due date (the drawdown date in the case of the first interest calculation period), the interest rate for the number of months corresponding to the interest calculation period. However, if there is no rate corresponding to the concerned period, then it shall be the base rate calculated based on the method provided in the contract. For the JBA Japanese Yen TIBOR, please check the website of JBA TIBOR Administration (http://www.jbatibor.or.jp/). The interest rate is substantially fixed at 0.2785% with the effect of the interest rate swap agreements to hedge the risk of rising interest rates. The interest rate is substantially fixed at 0.356% with the effect of the interest rate swap agreements to hedge the risk of rising interest rates. If the concerned date is not a business day, then it shall be the next business day. If that business day falls into the next calendar month, then it shall be the business day immediately preceding the concerned date. 8

iii) Split of investment units A 2-for-1 split of investment units was implemented with the record date of October 31, and the effective date of November 1,. (a) Purpose of the split The purpose is to expand the investor base and enhance the liquidity of its investment units by reducing the per unit price with the aim of providing a more investor-friendly environment after the launch of Nippon Individual Savings Accounts (NISA). (b) Method of the split HRR executed a 2-for-1 split of investment units owned by unitholders indicated or recorded in final unitholder registry as of October 31,. (c) Increase in investment units resulting from the split, etc. Total number of investment units issued and outstanding of HRR before the split: Increase in number of investment units by the split: Total number of investment units issued and outstanding of HRR after the split: 81,757 units 81,757 units 163,514 units For notes concerning each numerical value of per unit information that is calculated on the assumption that the split of investment units was implemented at the beginning of the 6th fiscal period, please refer to Notes to Financial Statements, Per unit information. 9

2. Profile of HRR (1) Status of unitholders capital Total number of investment units authorized (units) Total number of investment units issued and outstanding (Note) (units) Unitholders capital (millions of yen) 3rd fiscal period (As of October 31, 2014) 4th fiscal period (As of April 30, 2015) 5th fiscal period (As of October 31, 2015) 6th fiscal period (As of April 30, ) 7th fiscal period (As of October 31, ) 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 42,969 42,969 49,689 78,008 81,757 27,006 27,006 36,113 67,906 72,591 Number of unitholders (persons) 7,029 6,841 8,639 10,001 10,278 (Note) A 2-for-1 split of investment units was implemented with the record date of October 31, and the effective date of November 1,. As a result, total number of investment units issued and outstanding is 163,514. (2) Matters concerning investment units The top 10 unitholders based on the ratio of units owned to total number of units issued and outstanding as of October 31, are as follows: Name Japan Trustee Services Bank, (Trust account) Trust & Custody Services Bank, (Securities investment trust account) The Master Trust Bank of Japan, (Trust account) The Nomura Trust and Banking Co., (Investment trust account) Hoshino Resorts Inc. JP MORGAN CHASE BANK (Standing proxy: Mizuho Bank, ) THE BANK OF NEW YORK, NON-TREATY JASDEC ACCOUNT (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, ) STATE STREET BANK AND TRUST COMPANY 505012 (Standing proxy: The Hongkong and Shanghai Banking Corporation Limited, Tokyo branch) The Hokkoku Bank, (Standing proxy: Trust & Custody Services Bank, ) EVERGREEN (Standing proxy: The Bank of Tokyo-Mitsubishi UFJ, ) Address Number of units owned (units) Ratio to total number of units issued and outstanding (%) 1-8-11 Harumi, Chuo-ku, Tokyo 15,209 18.60 Harumi Island Triton Square Office Tower Z 1-8-12 Harumi, Chuo-ku, Tokyo 2-11-3 Hamamatsu-cho, Minato-ku, Tokyo 10,162 12.42 7,374 9.01 2-2-2 Otemachi, Chiyoda-ku, Tokyo 3,992 4.88 2148 Oaza Nagakura, Karuizawa-machi, Kitasaku-gun, Nagano Shinagawa Intercity Tower A 2-15-1 Konan, Minato-ku, Tokyo 3,070 3.75 2,478 3.03 2-7-1 Marunouchi, Chiyoda-ku, Tokyo 1,375 1.68 3-11-1 Nihonbashi, Chuo-ku, Tokyo 1,366 1.67 Harumi Island Triton Square Office Tower Z 1-8-12 Harumi, Chuo-ku, Tokyo 835 1.02 2-7-1 Marunouchi, Chiyoda-ku, Tokyo 805 0.98 Total 46,666 57.07 (Note) The ratio to total number of units issued and outstanding is rounded down to two decimal places. 10

(3) Matters relating to officers The Executive Director, Supervisory Directors and Independent Auditor for the fiscal period under review are as follows: Executive Director Title Name Major concurrent post, etc. Supervisory Director Independent Auditor Kenji Akimoto President & CEO of Hoshino Resort Asset Management Co., Total amount of compensation for each position during the fiscal period under review (thousands of yen) Hiroshi Shinagawa Attorney at law, Kinkadori Law Office 1,320 Yukiko Fujikawa Certified Public Accountant, Yukiko Fujikawa CPA Office 1,320 Grant Thornton Taiyo LLC 6,700 The Executive Director and Supervisory Directors do not hold investment units of HRR under their own or another person s name. Although the Supervisory Directors may be officers in corporations other than the ones indicated above, there is no conflict of interest between HRR and such corporations, including those indicated above. In preparation for a situation where the Executive Director is absent or the number of officers is below the number of officers required by laws and regulations, a resolution was passed at the 2nd General Meeting of Unitholders to appoint Tetsuro Takashi as the Substitute Executive Director. As of the release of this report, Tetsuro Takashi is serving concurrently as Director & CFO, General Manager of Corporate Planning Department of the Asset Management Company. The Executive Director does not receive compensations from HRR. Dismissal or non-reappointment of the Independent Auditor is subject to consideration at the HRR s Board of Directors, pursuant to the provisions of the Investment Trust Act in the case of dismissal, or in light of a comprehensive consideration of various circumstances in the case of non-reappointment. (4) Asset Management Company, Asset Custodian and General Administrators The Asset Management Company, Asset Custodian, and General Administrators as of October 31, are as follows: Asset Management Company Asset Custodian Category of entrusted operation General Administrator (General Administrator of unit register) General Administrator (General Administrator for accounting and administrative function) Name Hoshino Resort Asset Management Co., Mitsubishi UFJ Trust and Banking Corporation Mitsubishi UFJ Trust and Banking Corporation Mitsubishi UFJ Trust and Banking Corporation 11

3. Status on Investment Properties (1) Investment status Asset type Real estate Use of asset 6th fiscal period As of April 30, Total amount held (millions of yen) Ratio to total assets (%) 7th fiscal period As of October 31, Total amount held (millions of yen) Ratio to total assets (%) Hotel 73,101 71.7 73,132 69.2 Ryokan 18,043 17.7 21,466 20.3 Subtotal 91,144 89.4 94,598 89.5 Deposits and other assets 10,796 10.6 11,111 10.5 Total assets 101,941 100.0 105,709 100.0 Total liabilities 32,433 31.8 31,302 29.6 Total net assets 69,507 68.2 74,407 70.4 Total amount held is the carrying amount (in the case of real estate, the depreciated book value). The book value of real estate is including machinery and equipment, structures, and leasehold right, but excluding tools, furniture and fixtures, software, and construction in progress. Ratio to total assets is rounded to one decimal place. Total assets, Total liabilities and Total net assets are stated at the book value. (2) Major properties owned The major components of assets (the 10 largest properties by book value) as of October 31, are as follows: Name of property Book value (millions of yen) Leasable area (m 2 ) Leased area (m 2 ) Occupancy rate (%) Ratio to total operating revenue from real estate leasing (%) (Note 4) Primary use ANA Crowne Plaza Hiroshima 17,855 32,332.00 32,332.00 100.0 14.2 Hotel ANA Crowne Plaza Fukuoka 7,674 27,372.74 27,372.74 100.0 5.9 Hotel HOSHINOYA Karuizawa 7,640 11,723.61 11,723.61 100.0 10.0 Ryokan ANA Crowne Plaza Kanazawa 6,712 23,835.00 23,835.00 100.0 9.4 Hotel Asahikawa Grand Hotel 4,811 25,715.20 25,715.20 100.0 4.6 Hotel RISONARE Yatsugatake 4,566 33,853.45 33,853.45 100.0 8.1 Hotel RISONARE Atami 4,219 23,385.18 23,385.18 100.0 3.9 Hotel ANA Crowne Plaza Toyama 3,987 21,600.11 21,600.11 100.0 4.6 Hotel KAI Kaga 3,182 5,159.46 5,159.46 100.0 2.6 Ryokan KAI Kinugawa 3,092 4,066.60 4,066.60 100.0 2.6 Ryokan Total 63,741 209,043.35 209,043.35 100.0 65.9 Book value is the carrying amount (in the case of real, the depreciated book value). The book value of real estate is including machinery and equipment, structures, and leasehold right, but excluding tools, furniture and fixtures, software, and construction in progress. Leasable area is the leasable area to tenants. In principle, Leased area is the leased area under the lease agreement with tenants. (Note 4) Ratio to total operating revenue from real estate leasing represents the ratio to total real estate operating revenue, rounded to one decimal place. 12

(3) Summary of portfolio properties An overview of assets held by HRR as of October 31, is as follows: Name of property Location Type of ownership HOSHINOYA Karuizawa HOSHINOYA Kyoto RISONARE Yatsugatake RISONARE Atami KAI Matsumoto KAI Izumo KAI Ito KAI Hakone KAI Aso KAI Kawaji KAI Kinugawa KAI Kaga Chisun Inn Shiojiri Kita IC Chisun Inn Sano Fujioka IC Chisun Inn Suwa IC Chisun Inn Toyokawa IC Chisun Inn Tosu Chisun Inn Chiba Hamano R16 Chisun Inn Kumamoto Miyukifueda Chisun Inn Utsunomiya Kanuma Chisun Inn Fukui Chisun Inn Fukushima Nishi IC Chisun Inn Niigata Chuo IC Chisun Inn Nagasaki Airport Chisun Inn Hitachinaka Karuizawa-machi, Kitasaku-gun, Nagano Kyoto-shi, Kyoto Hokuto-shi, Yamanashi Atami-shi, Shizuoka Matsumoto-shi, Nagano Matsue-shi, Shimane Ito-shi, Shizuoka Hakone-machi, Ashigarashimo-gun, Kanagawa Kokonoe-machi, Kusu-gun, Oita Nikko-shi, Tochigi Nikko-shi, Tochigi Kaga-shi, Ishikawa Shiojiri-shi, Nagano Sano-shi, Tochigi Suwa-shi, Nagano Toyokawa-shi, Aichi Tosu-shi, Saga Chiba-shi, Chiba Kumamoto-shi, Kumamoto Utsunomiya-shi, Tochigi Fukui-shi, Fukui Fukushima-shi, Fukushima Niigata-shi, Niigata Omura-shi, Nagasaki Hitachinaka-shi, Ibaraki Leasable area (m 2 ) Book value at end of period (millions of yen) Estimated value at end of period (millions of yen) 11,723.61 7,640 11,100 2,626.15 2,943 3,760 33,853.45 4,566 6,000 23,385.18 4,219 4,080 4,056.12 617 783 3,909.02 706 847 7,473.91 704 923 4,649.67 952 1,240 1,543.53 628 676 8,190.38 1,000 1,140 4,066.60 3,092 3,280 5,159.46 3,182 3,330 2,100.47 688 809 1,968.91 757 895 1,944.94 675 802 2,040.09 612 726 1,968.02 498 630 2,023.29 791 1,020 2,094.77 616 736 2,094.16 712 833 2,094.01 641 767 2,094.01 668 773 2,094.16 627 747 1,968.02 623 752 1,968.30 727 903 13

Name of property Location Type of ownership Chisun Inn Tsuchiura Ami Chisun Inn Kofu Isawa Chisun Inn Marugame Zentsuji Chisun Inn Munakata Chisun Inn Iwate Ichinoseki IC Chisun Inn Karuizawa Chisun Inn Himeji Yumesakibashi Chisun Inn Kurashiki Mizushima Candeo Hotels Handa Candeo Hotels Chino Candeo Hotels Fukuyama Candeo Hotels Sano Candeo Hotels Kameyama Comfort Hotel Hakodate Comfort Hotel Tomakomai Comfort Hotel Kure Chisun Inn Kagoshima Taniyama ANA Crowne Plaza Hiroshima ANA Crowne Plaza Fukuoka ANA Crowne Plaza Kanazawa ANA Crowne Plaza Toyama Asahikawa Grand Hotel Ami-machi, Inashiki-gun, Ibaraki Fuefuki-shi, Yamanashi Marugame-shi, Kagawa Munakata-shi, Fukuoka Ichinoseki-shi, Iwate Karuizawa-machi, Kitasaku-gun, Nagano Himeji-shi, Hyogo Kurashiki-shi, Okayama Handa-shi, Aichi Chino-shi, Nagano Fukuyama-shi, Hiroshima Sano-shi, Tochigi Kameyama-shi, Mie Hakodate-shi, Hokkaido Tomakomai-shi, Hokkaido Kure-shi, Hiroshima Kagoshima-shi, Kagoshima Hiroshima-shi, Hiroshima Fukuoka-shi, Fukuoka Kanazawa-shi, Ishikawa Toyama-shi, Toyama Asahikawa-shi, Hokkaido Leasable area (m 2 ) Book value at end of period (millions of yen) Estimated value at end of period (millions of yen) 1,968.03 756 921 1,968.47 651 786 2,094.16 584 692 2,094.16 500 618 1,968.02 697 773 1,917.10 802 1,050 2,406.95 616 731 2,094.16 720 857 2,814.05 621 693 2,868.18 795 914 3,985.73 1,072 1,240 2,828.71 1,256 1,460 3,912.03 481 532 2,927.44 955 1,040 2,721.08 980 1,070 3,121.02 1,132 1,230 8,066.36 2,036 2,230 32,332.00 17,855 19,900 27,372.74 7,674 8,630 23,835.00 6,712 7,170 21,600.11 3,987 4,440 25,715.20 4,811 4,770 Total 317,700.93 94,598 109,299 Book value at end of period is the carrying amount (in the case of real, the depreciated book value). The book value of real estate is including machinery and equipment, structures, and leasehold right, but excluding tools, furniture and fixtures, software, and construction in progress. Appraisal of the property is entrusted to Japan Valuers Co.,, Morii Appraisal & Investment Consulting Inc. or Rich Appraisal Institute Co., Estimated value at end of period is the appraisal value stated in the real estate appraisal report or investigation report with October 31, as the effective date of the valuation. 14

Lease status of real held by HRR is as follows: Name of property Number of tenants at end of period (subleasing) 6th fiscal period (From November 1, 2015 to April 30, ) Occupancy rate [At end of period] (%) Operating revenue from real estate leasing [During the period] (millions of yen) 15 Ratio to total operating revenue from real estate leasing (%) Number of tenants at end of period (subleasing) 7th fiscal period (From May 1, to October 31, ) Occupancy rate [At end of period] (%) Operating revenue from real estate leasing [During the period] (millions of yen) Ratio to total operating revenue from real estate leasing (%) HOSHINOYA Karuizawa 1 (14) 100.0 383 10.8 1 (14) 100.0 396 10.0 HOSHINOYA Kyoto 1 (0) 100.0 128 3.6 1 (0) 100.0 105 2.6 RISONARE Yatsugatake 1 (17) 100.0 320 9.0 1 (16) 100.0 321 8.1 RISONARE Atami 1 (0) 100.0 155 4.4 1 (0) 100.0 156 3.9 KAI Matsumoto 1 (0) 100.0 41 1.2 1 (0) 100.0 43 1.1 KAI Izumo 1 (0) 100.0 47 1.3 1 (0) 100.0 50 1.3 KAI Ito 1 (0) 100.0 57 1.6 1 (0) 100.0 58 1.5 KAI Hakone 1 (0) 100.0 54 1.5 1 (0) 100.0 52 1.3 KAI Aso 1 (0) 100.0 28 0.8 1 (0) 100.0 29 0.7 KAI Kawaji 1 (0) 100.0 53 1.5 1 (0) 100.0 54 1.4 KAI Kinugawa 1 (0) 100.0 101 2.8 1 (0) 100.0 102 2.6 KAI Kaga 1 (0) 100.0 102 2.6 Chisun Inn Shiojiri Kita IC 1 (1) 100.0 28 0.8 1 (1) 100.0 28 0.7 Chisun Inn Sano Fujioka IC 1 (0) 100.0 31 0.9 1 (0) 100.0 31 0.8 Chisun Inn Suwa IC 1 (0) 100.0 29 0.8 1 (0) 100.0 30 0.8 Chisun Inn Toyokawa IC 1 (0) 100.0 27 0.8 1 (0) 100.0 27 0.7 Chisun Inn Tosu 1 (0) 100.0 22 0.6 1 (0) 100.0 24 0.6 Chisun Inn Chiba Hamano R16 1 (0) 100.0 33 0.9 1 (0) 100.0 34 0.9 Chisun Inn Kumamoto Miyukifueda Chisun Inn Utsunomiya Kanuma 1 (0) 100.0 25 0.7 1 (0) 100.0 26 0.7 1 (0) 100.0 30 0.9 1 (0) 100.0 31 0.8 Chisun Inn Fukui 1 (0) 100.0 28 0.8 1 (0) 100.0 30 0.8 Chisun Inn Fukushima Nishi IC 1 (0) 100.0 31 0.9 1 (0) 100.0 32 0.8 Chisun Inn Niigata Chuo IC 1 (0) 100.0 28 0.8 1 (0) 100.0 28 0.7 Chisun Inn Nagasaki Airport 1 (0) 100.0 29 0.8 1 (0) 100.0 30 0.8 Chisun Inn Hitachinaka 1 (0) 100.0 30 0.9 1 (0) 100.0 29 0.8 Chisun Inn Tsuchiura Ami 1 (0) 100.0 30 0.9 1 (0) 100.0 30 0.8 Chisun Inn Kofu Isawa 1 (0) 100.0 29 0.8 1 (0) 100.0 29 0.7 Chisun Inn Marugame Zentsuji 1 (0) 100.0 27 0.8 1 (0) 100.0 27 0.7 Chisun Inn Munakata 1 (0) 100.0 26 0.7 1 (0) 100.0 24 0.6 Chisun Inn Iwate Ichinoseki IC 1 (1) 100.0 25 0.7 1 (1) 100.0 27 0.7 Chisun Inn Karuizawa 1 (0) 100.0 37 1.1 1 (0) 100.0 41 1.0 Chisun Inn Himeji Yumesakibashi Chisun Inn Kurashiki Mizushima 1 (0) 100.0 29 0.8 1 (0) 100.0 29 0.7 1 (0) 100.0 29 0.8 1 (0) 100.0 31 0.8 Candeo Hotels Handa 1 (0) 100.0 26 0.7 1 (0) 100.0 26 0.7 Candeo Hotels Chino 1 (0) 100.0 32 0.9 1 (0) 100.0 32 0.8 Candeo Hotels Fukuyama 1 (0) 100.0 39 1.1 1 (0) 100.0 39 1.0 Candeo Hotels Sano 1 (0) 100.0 45 1.3 1 (0) 100.0 45 1.2 Candeo Hotels Kameyama 1 (0) 100.0 20 0.6 1 (0) 100.0 20 0.5 Comfort Hotel Hakodate 1 (0) 100.0 32 0.9 1 (0) 100.0 32 0.8

Name of property Number of tenants at end of period (subleasing) 6th fiscal period (From November 1, 2015 to April 30, ) Occupancy rate [At end of period] (%) Operating revenue from real estate leasing [During the period] (millions of yen) Ratio to total operating revenue from real estate leasing (%) Number of tenants at end of period (subleasing) 7th fiscal period (From May 1, to October 31, ) Occupancy rate [At end of period] (%) Operating revenue from real estate leasing [During the period] (millions of yen) Ratio to total operating revenue from real estate leasing (%) Comfort Hotel Tomakomai 1 (0) 100.0 33 0.9 1 (0) 100.0 33 0.8 Comfort Hotel Kure 1 (0) 100.0 37 1.1 1 (0) 100.0 37 0.9 Chisun Inn Kagoshima Taniyama ANA Crowne Plaza Hiroshima ANA Crowne Plaza Fukuoka ANA Crowne Plaza Kanazawa ANA Crowne Plaza Toyama 1 (1) 100.0 69 2.0 1 (1) 100.0 69 1.7 1 (7) 100.0 527 14.8 1 (7) 100.0 567 14.2 1 (6) 100.0 223 6.3 1 (6) 100.0 235 5.9 1 (5) 100.0 299 8.4 1 (5) 100.0 374 9.4 1 (6) 100.0 153 4.3 1 (6) 100.0 182 4.6 Asahikawa Grand Hotel 1 (5) 100.0 31 0.9 1 (5) 100.0 182 4.6 Total 46 (63) (Note) 100.0 3,559 100.0 47 (62) (Note) 100.0 3,981 100.0 (Note) Number of tenants (subleasing) refers to sum total of the number of tenants, with the number of parties subleasing from the parties leasing the property from HRR shown in parentheses. (4) Status of other assets There are no assets incorporated into the portfolio other than those listed in the aforementioned (3) Summary of portfolio properties, as of October 31,. (5) Status of asset holding by country and region There is no portfolio overseas real estate outside Japan, as of October 31,. 16

4. Capital expenditures for properties held (1) Future plan for capital expenditures The following table summarizes the major capital expenditure plan in the fiscal period ending April 2017 in connection with scheduled renovation and others for properties held as of October 31,. The estimated construction costs below include the amounts to be expensed for accounting purpose. Name of property Location Purpose Scheduled period Total amount Estimated construction costs (millions of yen) Amount paid during the period Total amount paid RISONARE Yatsugatake Hokuto-shi, Yamanashi Renovation of guest rooms and common-use areas From June to April 2017 1,326 40 53 RISONARE Yatsugatake Hokuto-shi, Yamanashi Renovation of elevators From January 2017 to April 2017 47 KAI Hakone RISONARE Atami Hakone-machi, Ashigarashimogun, Kanagawa Atami-shi, Shizuoka Construction as an investment for facility maintenance such as renovation of large common bath and guest rooms, and elevators. Renovation of all guest rooms and corridor of building B and construction to increase guest rooms in building B. From December to January 2017 From January 2017 to May 2017 228 75 ANA Crowne Plaza Hiroshima Hiroshima-shi, Hiroshima Construction to convert single rooms into double rooms and renovate twin rooms. From January 2017 to March 2017 48 ANA Crowne Plaza Hiroshima Hiroshima-shi, Hiroshima Renovation of elevators From June to January 2017 110 17

(2) Capital expenditures for the period Of construction work falling under the category of capital expenditures conducted in the fiscal period under review for properties held as of October 31,, the following are the major amounts. The fiscal period under review s capital expenditures amounted to 1,037 million yen and repair expenses separately charged to expenses amounted to 55 million yen for a combined total of 1,092 million yen of construction work implemented. Name of property Location Purpose Period Total amount Construction costs (millions of yen) Amount paid during period Total amount paid RISONARE Atami Atami-shi, Shizuoka Renovation of exterior walls, and 9F and 11F interior finishing From May to July 246 240 246 ANA Crowne Plaza Kanazawa Kanazawa-shi, Ishikawa Upgrading of banquet hall lighting control unit panel and lighting equipment From August to September 58 58 58 HOSHINOYA Karuizawa Karuizawamachi, Kitasaku-gun, Nagano Setting up of Ice Skating Rink in the Forest From October 2015 to July 338 338 338 RISONARE Yatsugatake Hokuto-shi, Yamanashi Renovation of guest rooms and common-use areas From June to April 2017 1,326 40 53 (3) Funds reserved for long-term repair plans Not applicable. 5. Expenses and liabilities (1) Details of expenses relating to asset management, etc. Item Previous fiscal period (From November 1, 2015 to April 30, ) (thousands of yen) Current fiscal period (From May 1, to October 31, ) Asset management fee 249,568 342,999 Asset custody fee 2,139 3,786 Administrative service fees 10,407 15,741 Directors compensation 2,640 2,640 Audit fee 6,500 6,751 Other expenses 71,426 83,750 Total 342,681 455,670 18

(2) Status of borrowings The status of borrowings of HRR as of October 31, is as follows: Category Lender Drawdown date Balance at beginning of period (millions of yen) Balance at end of period (millions of yen) Average interest rate Repayment due date Repayment method Use Remarks Short-term loans payable Long-term loans payable Sumitomo Mitsui Banking Corporation November 2, 2015 1,100 0.45957% Subtotal 1,100 Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation The Ashikaga Bank, The Shizuoka Bank, Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation The Ashikaga Bank, The Shizuoka Bank, The Bank of Fukuoka, The Yamaguchi Bank, The Bank of Kyoto, The Hokuriku Bank, Sumitomo Mitsui Banking Corporation The Ashikaga Bank, The Shizuoka Bank, The Bank of Fukuoka, The Yamaguchi Bank, The Bank of Kyoto, The Hokuriku Bank, Sumitomo Mitsui Banking Corporation July 16, 2013 July 16, 2013 July 16, 2013 May 2, 2014 May 2, 2014 May 2, 2014 November 2, 2015 November 2, 2015 November 2, 2015 November 2, 2015 November 2, 2015 1,860 1.44478% 2,418 2,385 1.92875% 1,288 1,268 2.45886% 700 700 1.12207% 300 300 1.52063% 942 928 1.99816% 2,515 2,515 0.36134% 885 885 0.40000% 2,550 2,550 0.46134% 850 850 0.50000% 1,500 1,500 0.82080% October 31, July 16, July 16, 2018 July 16, 2020 May 2, 2017 May 2, 2019 April 30, 2021 April 27, 2018 April 27, 2018 October 31, 2019 October 31, 2019 April 30, 2020 repayment (Note 4) (Note 5) (Note 6) repayment repayment (Note 7) repayment repayment repayment repayment repayment Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed 19

Category Long-term loans payable Lender Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation The Hokuriku Bank, The Bank of Fukuoka, The Bank of Kyoto, Sumitomo Mitsui Banking Corporation The Hokuriku Bank, The Bank of Fukuoka, Drawdown date November 2, 2015 November 2, 2015 November 2, 2015 March 31, March 31, May 2, May 2, May 2, May 2, July 19, July 19, Balance at beginning of period (millions of yen) Balance at end of period (millions of yen) Average interest rate 3,500 3,500 1.12193% 3,000 3,000 1.22788% 1,478 1,457 1.33575% 2,500 0.50063% 997 983 1.51809% 900 0.50313% 492 1.09313% 492 1.47689% 591 1.66686% 860 0.49695% 1,000 0.82289% Subtotal 27,285 27,160 Total 28,385 27,160 Average interest rates on floating rate borrowings are the weighted average rate during the period. All borrowings were used as the funds for acquiring real estate and paying its related costs. All pledges were released effective at August 31,. (Note 4) (Note 5) (Note 6) (Note 7) (Note 8) (Note 9) Repayment due date October 29, 2021 April 28, 2022 October 31, 2022 April 3, 2017 March 31, 2025 April 30, 2020 April 28, 2023 April 30, 2025 April 30, 2026 April 30, 2021 April 28, 2023 Repayment method repayment repayment Use (Note 8) repayment (Note 9) repayment (Note 10) (Note 11) (Note 12) repayment repayment Remarks Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Unsecured/ Unguaranteed Repayment of 25,000 thousand yen was due firstly on October 31, 2013 (total payment on first payment was 14,795 thousand yen) and subsequently on the last day of April and October of every year thereafter (If the concerned date is not a business day, then payment was/shall be the next business day. If that business day falls into the next calendar month, then payment was/shall be the business day immediately preceding the concerned date.), and repayment of the remaining principal amount of 1,860,205 thousand yen was paid in lump sum on the final repayment due date. Repayment of 32,500 thousand yen shall be due firstly on October 31, 2013 (total payment on first payment was 19,234 thousand yen) and subsequently on the last day of April and October of every year thereafter (If the concerned date is not a business day, then it shall be the next business day. If that business day falls into the next calendar month, then it shall be the business day immediately preceding the concerned date.), and repayment of the remaining principal amount of 2,288,266 thousand yen shall be due in lump sum on the final repayment due date. Repayment of 20,001 thousand yen shall be due firstly on October 31, 2013 (total payment on first payment was 11,838 thousand yen) and subsequently on the last day of April and October of every year thereafter (If the concerned date is not a business day, then it shall be the next business day. If that business day falls into the next calendar month, then it shall be the business day immediately preceding the concerned date.), and repayment of the remaining principal amount of 1,128,149 thousand yen shall be due in lump sum on the final repayment due date. Repayment of 14,287 thousand yen shall be due firstly on October 31, 2014 and subsequently on the last day of April and October of every year thereafter (If the concerned date is not a business day, then it shall be the next business day. If that business day falls into the next calendar month, then it shall be the business day immediately preceding the concerned date.), and repayment of the remaining principal amount of 814,269 thousand yen shall be due in lump sum on the final repayment due date. Repayment of 21,430 thousand yen shall be due firstly on April 28, and subsequently on the last day of April and October of every year thereafter (If the concerned date is not a business day, then it shall be the next business day. If that business day falls into the next calendar month, then it shall be the business day immediately preceding the concerned date.), and repayment of the remaining principal amount of 1,221,410 thousand yen shall be due in lump sum on the final repayment due date. Repayment of 14,286 thousand yen shall be due firstly on April 28, (total payment on first payment was 2,427 thousand yen) and subsequently on the last day of April and October of every year thereafter (If the concerned date is not a business day, then it shall be the next business day. If that 20