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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 accounts for the 18th fiscal period (from January 1, 2017 to December 31, 2017) of JHR, we are pleased to present you with the asset management status and settlement of accounts for the period.

Looking at the environment surrounding JHR, the number of foreign tourists visiting Japan (inbound tourists) has continued to increase significantly, while domestic leisure demand remained solid. Despite the impacts of new hotel supply and minpaku (rentals of private homes as accommodations for a fee) observed in certain areas, many of JHR’s hotels achieved better operating performance, led by the rooms department. This, combined with the effects of cost reductions and other measures, resulted in an increase in the variable rent, etc. received by JHR.

In terms of external growth, JHR conducted capital increase through a public offering of new investment units in July 2017, which was the eighth such arrangement since the merger that created JHR, and used the procured funds to acquire Hilton Tokyo Narita Airport (acquisition price: \13,175 million) and International Garden Hotel Narita (acquisition price: \9,125 million) in the Narita area and Hotel Nikko Nara (acquisition price: \10,373 million) in the Nara area. Each of these properties is a large-scale full-service hotel with high-competitiveness. With the acquisition of the three hotels, JHR’s asset size (total acquisition price) grew to ¥319.4 billion.

On top of an increase in rent income with the new property acquisitions, such factors as an increase in the variable rent, etc. and reduction of expenses in existing properties helped JHR to post operating revenue of ¥25,475 million, ordinary income of ¥14,006 million and net income of ¥14,005 million for the 18th fiscal period. Dividend per unit came to ¥3,683, up 7.7% from the previous fiscal period.

The increase in the number of inbound tourists has been driving the growth of Japan’s tourism industry and expansion of its hotel market. Given this growth trend, we at JHR, Japan’s largest REIT specializing in hotel properties, 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.