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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).
Having settled the midterm settlement of accounts for the 18th fiscal period (from January 1, 2017 to December 31, 2017), we are pleased to present you with the summary of our asset management status.
For the environment surrounding JHR for the midterm period under review, in addition to steady domestic leisure demand, the number of foreign visitors to Japan (hereinafter called “inbound visitor”) continues to rise. Although there were signs of impact of new hotel supply and minpaku (rentals of private homes as accommodation for a fee) in some areas, many of the hotels owned by JHR improved their operating results for the midterm period under review, mainly in the rooms department on the back of an increase in inbound and domestic leisure demand. In association with the improvement in the operating results of hotels with a variable rent structure, variable rent, etc. that JHR received from these hotels have increased.
As for external growth, JHR acquired three properties (combined total acquisition price of \32.6 billion), which are Hilton Tokyo Narita Airport, International Garden Hotel Narita, and Hotel Nikko Narita, with about \18.6 billion that JHR raised from capital increase through public offering carried out in June this year and new loans in the amount of \15 billion. Each hotel is a large-scale full-service hotel with high competitive strength in each market. By acquiring these hotels, JHR has expanded its asset size (total acquisition price) to \319.4 billion.
With regard to the operating results of the midterm period under review, due to an increase in variable rent, etc. of JHR’s hotels, resulting from increase in sales, cost reduction and other measures, JHR posted operating revenue of \11,272 million, ordinary income of \5,951 million, and net income of \5,951 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 \3,590 (up 5% year-over-year). 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.

The increase in the number of inbound visitors and domestic travelers are the driving force to make Japan’s tourism industry grow further and to increase hotel revenue. JHR, as Japan’s largest REIT specializing in hotels, will endeavor to make JHR more attractive together with its asset management company.

We ask for your continued support.