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.

We are pleased to report our financial results for the midterm of the 26th fiscal period (from January 1, 2025 to June 30, 2025) for JHR.

In the first half of 2025, Japan’s hotel market performed steadily, supported by stable domestic accommodation demand and a strong inbound demand. Under these favorable conditions, JHR has consistently achieved growth.

In January and February 2025, JHR sold Washington Hotel Plaza Hakata, Nakasu, which had limited potential for rent increases due to its Japanese traditional lease contract with fixed rent only. In its place, JHR acquired Hilton Fukuoka Sea Hawk, a large-scale property with strong competitive advantages. The acquisition was funded through a combination of asset sales and bank borrowings. As a result of this initiative, as of the end of June 2025, JHR owned 51 properties, with a total asset size of JPY515.3 billion based on acquisition price and JPY701.1 billion based on appraisal value.

As part of our internal growth strategy, we are actively allocating strategic CAPEX to further enhance profitability and competitiveness. During the midterm period under review, we carried out guest room renovations at OKINAWA HARBORVIEW HOTEL, Oriental Hotel Tokyo Bay and La’gent Stay Sapporo Odori. Additionally, we have continued to implement cost-reduction measures aimed at mitigating rising operating costs and improving profit margins. As a result, JHR recorded operating revenue of 21,481 million yen, ordinary income of 12,367 million yen and interim net income of 12,764 million yen, representing a 71.7% increase in new income compared to the same midterm period under review.

Domestic leisure demand is expected to remain strong, and the number of inbound visitors is projected to reach a record high for the full year of 2025. In this favorable hotel market environment, JHR will continue to steadily capture demand and remain committed to maximizing profitability.

Together with Japan Hotel REIT Advisors Co., Ltd., JHR is dedicated to further growth and enhancing its attractiveness by leveraging its extensive expertise and know-how cultivated to date.
We sincerely appreciate your continued support for us.