TMP LM8DN

Asset Management Report
For the Year Ended December 31, 2015
Japan Hotel REIT Investment Corporation
Dear Investors,
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 16th fiscal period (from January 1, 2015 to December 31, 2015)
of JHR, we are pleased to present you with the asset management status and settlement of accounts
for the period.
Pursuant to the mission recognized by JHR of providing investors with attractive opportunities to
invest in hotel assets, asset management is conducted by placing simultaneous pursuit of stability
and upside potential at the core of our strategy.
In the fiscal period under review, with capital increases through public offering of new investment
units carried out in January and June and other fund procurement, JHR acquired seven hotels located
mainly in central Tokyo and the bay area. Furthermore, JHR acquired hotels bearing world-class
international brand names Okinawa Marriott Resort & Spa and ACTIVE-INTER CITY
HIROSHIMA (Sheraton Hiroshima Hotel) by public offering mentioned above and other fund
procurement. In total, assets with a combined acquisition price of 57.0 billion were acquired in the
period. These are hotel assets that exactly match JHRs investment strategy of pursuing upside in
revenue while improving portfolio stability.
An asset management strategy of aiming for maximization of revenue and asset value of individual
hotels is planned and executed for JHRs portfolio properties. Reflecting the momentum gathering
for leisure demand from within and outside Japan, the operating performance of the rooms
department improved in the fiscal period under review at many of the hotels in JHRs portfolio. As a
result, the variable rent, etc. received by JHR increased, leading to operating revenue exceeding the
previous forecast.
Moreover, in addition to posting a gain on sale of real estate properties, lowering of funding costs
and other cost reduction efforts were made. As a result, for the fiscal period under review, JHR
posted operating revenue of 17,343 million, ordinary income of 9,295 million and net income of
9,294 million and declared dividend per unit of 2,975 (up 38.1% from the previous fiscal period).
Entering the 17th fiscal period (from January 1, 2016 to December 31, 2016), too, new investment
units were issued at the beginning of the year, followed by the acquisition of CANDEO HOTELS
UENO-KOEN located in the Tokyo metropolitan area for 6,705 million. As a result, JHRs
portfolio grew to a portfolio size of 232,428 million in terms of combined acquisition price.
With sharp increase in the number of inbound tourists visiting Japan and steady increase in domestic
leisure demand, there are great hopes for the future growth of Japans tourism industry and also
growing interest in hotel assets as investment targets.
We at JHR and Japan Hotel REIT Advisors are resolved to make our best endeavors for JHRs
further growth in order to provide investors with attractive opportunities to invest in hotel assets by
taking advantage of the high expertise and know-how we have fostered and accumulated to date.
We ask for your continued support and understanding of our operations.
Kaname Masuda
Executive Director
Japan Hotel REIT Investment Corporation
Hisashi Furukawa
Representative Director and President
Japan Hotel REIT Advisors Co., Ltd.
JAPAN HOTEL REIT INVESTMENT CORPORATION

Contents:
I.
Asset Management Report
This section (P1-P47) is the translation of the Asset Management Report for the 16th Period released
on March 23, 2016 except for the update on 6. Significant subsequent events. This English
translation is provided for information purposes only. If any discrepancy is identified between this
translation and the Japanese original, the Japanese original shall prevail.
II. Financial Statements

For the Years ended December 31, 2015 and December 31, 2014
Balance Sheets
48
Statements of Income
50
Statements of Changes in Net Assets
51
Statements of Cash Flows
52
Notes to Financial Statements
54
Independent Auditors Report
72
I. ASSET MANAGEMENT REPORT

Outline of Asset Management Operation
1. Operating results and financial position, etc.
Fiscal period
Account closing date (Note 1)
Operating revenue
(Note 2)
[Real estate operating revenue]

(Note 3)
Operating expenses
[Real estate operating costs]
(Note 3)
Operating income
Ordinary income
Net income
(Note 4)
12th period
March 2012
14th period
December 2013
15th period
December 2014
16th period
December 2015
Millions of yen
1,431
7,283
11,472
12,760
17,343
Millions of yen
[1,431]
[7,283]
[11,472]
[12,760]
[17,033]
Millions of yen
681
4,688
6,105
5,214
6,354
Millions of yen
[503]
[2,668]
[3,870]
[4,163]
[5,002]
Millions of yen
750
2,595
5,367
7,545
10,988
Millions of yen
474
1,412
3,740
5,776
9,295
Millions of yen
473
19,031
3,233
5,774
Total assets
[Period-on-period change]
Millions of yen
Net assets
Millions of yen
Unitholders capital
Number of investment units issued and
outstanding
13th period
December 2012
9,294
46,773
[0.0]
139,623
[198.5]
170,727
[22.3]
188,091
[10.2]
240,356
[27.8]
23,635
[(0.1)]
69,010
[192.0]
89,756
[30.1]
100,342
[11.8]
129,914
[29.5]
Millions of yen
23,161
28,260
48,845
59,024
85,470
Units
58,031
2,111,281
2,621,281
2,791,281
3,144,227
[%]
[%]
Net assets per unit
(Note 5)
Yen
33,941
32,686
34,241
35,948
41,318
Net income per unit
(Note 5)
Yen
680
9,711
1,307
2,159
3,036
Millions of yen
473
3,012
5,082
6,015
9,354
Yen
8,166
1,427
1,939
2,155
2,975
[Earnings dividend per unit]
Yen
8,166
1,427
1,939
2,155
2,975
[Dividend per unit resulted from

excess of earnings]
Yen
1.0
1.5
2.4
3.2
4.3
[%]
[2.0]
[2.0]
[2.4]
[3.2]
[4.3]
2.0
41.1
4.1
6.1
8.1
[%]
[4.0]
[54.5]
[4.1]
[6.1]
[8.1]
50.5
49.4
52.6
53.3
54.1
[(0.1)]
[(1.1)]
Total dividends
Dividend per unit
Ratio of ordinary income to total assets

(Note 6)
[Annualized]
Return on unitholders equity
(Note 7)
[Annualized]
Ratio of net assets to total assets
(Note 8)
Payout ratio
[%]
[3.2]
[0.8]
[0.7]
(Note 9)
100.0
15.8
157.2
104.2
100.6
(Note 10)
Millions of yen
1,191
6,216
9,907
11,002
14,829
Yen
1,059
2,087
2,759
2,930
3,478
Times
8.8
8.6
18.2
26.3
23.9
Times
3.3
3.8
4.5
8.3
15.6
21,516
65,220
74,784
81,089
102,772
46.0
46.7
43.8
43.1
42.8
19
28
28
30
36
[Additional information]
NOI
FFO per unit
(Note 5) (Note 11) (Note 12)
FFO multiple
(Note 5) (Note 12) (Note 13)
Debt service coverage ratio

(Note 12) (Note 14)
Interest-bearing debt
Millions of yen
Ratio of interest-bearing debt to total

assets
(Note 15)
Number of investment properties
%
Properties
2
Total leasable area
Number of tenants at end of period

(Note 16)
Occupancy rate at end of period

(Note 17)
Tenants
101,028.49
288,875.32
349,162.63
386,826.71
493,758.78
24
37
38
57
113
100.0
100.0
100.0
99.9
99.9
Depreciation
Millions of yen
263
1,592
2,297
2,400
2,772
Capital expenditures
Millions of yen
102
699
854
1,306
1,811
Days
183
275
365
365
365
Number of operating days
(Note 1)
(Note 2)
(Note 3)
(Note 4)
(Note 5)
(Note 6)
(Note 7)
(Note 8)
(Note 9)
(Note 10)
Following the resolution to partly amend the Articles of Incorporation of Japan Hotel REIT Investment Corporation
(hereinafter referred to as JHR) at the 5th General Meeting of Unitholders held on February 24, 2012, JHR changed
its fiscal period from six-month periods that end on March 31 and September 30 each year to 12-month periods that
end on December 31 (aligned with the calendar year). As a result of the change, and to facilitate the transition, JHRs
13th business period was the nine months from April 1, 2012 through December 31, 2012.
Operating revenue does not include consumption taxes.
Revenue from the real estate leasing business was presented as Real estate rental income in past periods. However,
because of the introduction of management contracts in the 13th fiscal period, this presentation of the real estate leasing
business is no longer appropriate. Therefore, the presentation of revenue from this business was changed to Real
estate operating revenue for all fiscal periods including the 12th and earlier fiscal periods. The presentation of
expenses for the real estate leasing business was changed from Real estate rental expenses to Real estate operating
costs.
Net income for the 13th fiscal period includes a gain on negative goodwill (18,578 million) from a merger, loss on
sale of real estate properties (1,393 million) and impairment loss (958 million). Net income for the 14th fiscal period
includes loss on sale of real estate properties (1,189 million) and impairment loss (516 million). Net income for the
16th fiscal period includes gain on sale of real estate properties (305 million).
JHR carried out a 12-for-1 split of units with an effective date of April 1, 2012. Net assets per unit, net income per unit,
FFO per unit and FFO multiple are calculated as if the unit split had been completed at the start of the 12th fiscal
period.
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 unitholders equity = Net income / ((Net assets at beginning of period + Net assets at end of period) / 2)
100
Ratio of net assets to total assets = Net assets at end of period / Total assets at end of period 100
The payout ratio is calculated using the formula Dividend per unit / Net income per unit x 100 for the 12th fiscal
period, and the formula Total dividends (excess of earnings exclusive) / Net income x 100 from the 13th through
16th fiscal periods.
NOI = Real estate operating revenue Real estate operating costs + Depreciation + Loss on retirement of noncurrent
assets
(Note 11) FFO per unit = (Net income + Depreciation + Loss on retirement of noncurrent assets Loss or gain on sale of real
estate properties Extraordinary loss or income) / Number of investment units issued and outstanding
(Note 12) For the 13th fiscal period, FFO per unit, FFO multiple and debt service coverage ratio are calculated excluding gain on
negative goodwill of 18,578 million, loss on sale of real estate properties of 1,393 million and impairment loss of
958 million. For the 14th fiscal period, FFO per unit, FFO multiple and debt service coverage ratio are calculated
excluding loss on sale of real estate properties of 1,189 million and impairment loss of 516 million. For the 16th
fiscal period, FFO per unit, FFO multiple and debt service coverage ratio are calculated excluding gain on sale of real
estate properties of 305 million.
(Note 13) FFO multiple = Investment unit price at end of period / Annualized FFO per unit
(Note 14) Debt service coverage ratio = (Net Income before income taxes + Depreciation + Loss on retirement of noncurrent
assets Loss or gain on sale of real estate properties Extraordinary losses or income + Amortization of investment
corporation bond issuance costs + Amortization of investment unit issuance expenses + Loss on derivative instruments
+ Interest expense +Interest expense on investment corporation bonds) / (Interest expense + Interest expense on
investment corporation bonds + Total of contracted principal repayments (excluding lump-sum principal repayments))
(Note 15) Ratio of interest-bearing debt to total assets = Interest-bearing debt at end of period / Total assets at end of period 100
(Note 16)
Number of tenants indicates the total number of tenants based on the lease contracts for respective real estate properties
in trust (excluding tenants of parking lots, etc.) as of the end of each fiscal period. However, for properties with
pass-through master lease contracts in which JHR receives the same amount of rents, etc. from rents, etc. from end
tenants as is in principle, the total number of the end tenants (excluding tenants of parking lots, etc.) is indicated.
(Note 17)
Occupancy rate indicates the percentage of leased area to leasable area of respective real estate properties in trust as of
the end of each fiscal period.
2. Asset management operation for the fiscal period under review

(1) Brief history and principal activities
Japan Hotel REIT Investment Corporation (hereinafter referred to as JHR) was established under the Act on
Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended; hereinafter referred to as
the Investment Trusts Act) on November 10, 2005 and was listed on the Real Estate Investment Trust
(REIT) section of the Tokyo Stock Exchange (Securities code: 8985) on June 14, 2006.
5
JHR entrusts the asset management to Japan Hotel REIT Advisors Co., Ltd. (hereinafter referred to as the
Asset Management Company). Focusing on hotels, which are important components of the social
infrastructure and profitability, JHR primarily invests in real estate related assets that are in themselves real
estate which are wholly or partially used as hotels or real estate equivalents of such real estate or that are
backed by such real estate or real estate equivalents.
JHR, the former Nippon Hotel Fund Investment Corporation, merged with the former Japan Hotel and Resort,
Inc. (hereinafter referred to as the former JHR) with an effective date of April 1, 2012 (hereinafter referred
to as the merger) and changed its name to Japan Hotel REIT Investment Corporation. Over approximately a
little less than four years since the merger through the end of the 16th fiscal period, JHR has carried out five
public offerings for capital increase and continuously acquired hotels that are competitive enough to attract
domestic and inbound leisure demand and located in its strategic investment target areas.
As such, JHR has expanded the asset size by steadily implementing the growth strategy, having its portfolio
grow to 36 properties with a combined acquisition price of 225,723 million as of the end of the fiscal period
under review.
The number of JHRs investment units issued and outstanding was 3,144,227 as of December 31, 2015.
(2) Investment performance
During the fiscal period under review, the Japanese economy continued to show a modest recovery trend,
despite weakness seen in some areas, partly due to the effect of the various measures implemented by the Abe
administration to securely end deflation and achieve both economic revitalization and fiscal soundness. Under
such circumstances, the tourism market was in an environment in which, on top of the leisure demand among
the Japanese people remaining solid, the number of overseas (inbound) tourists visiting Japan, primarily from
Asian countries, continued to increase thanks to the governments various measures aimed at making Japan a
major tourism nation as well as the depreciation of the yen and other factors. The number of such inbound
tourists, which had surpassed 10 million for the first time in 2013, reached 13.4 million, up around 30% over
the figure, in 2014 and increased by 47.1% year-on-year to 19.7 million in 2015, coming close to 20 million
annually that the Japanese government targeted at initially.
Given such a strong wind behind Japans tourism industry and hotel industry, many of the hotels owned by
JHR achieved a rise in operating performance, mainly in the rooms department, allowing us to feel again how
strong the leisure demand was both in and outside Japan. Also in the investment market for hotels,
transactions of hotel properties remained brisk with an increase in the number of investors who anticipated
future growth of such properties, keeping the market size expanding. In such an environment, JHR issued new
investment units through two public offerings in January and June 2015 together with other fund procurement
and acquired eight properties in total with a combined acquisition price of 39,705 million. Moreover, in
December 2015, JHR acquired ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel), located a
one-minute walk from Shinkansen Exit of JR Hiroshima Station, for an acquisition price of 17,320 million
through new borrowing (9,000 million) and cash on hand. On the other hand, as part of its growth strategy
and with an intention to further enhance the quality of its portfolio through reshuffling of assets, JHR sold
three properties in October 2015 at prices surpassing the book values and appraisal values for a combined sale
price of 4,890 million, achieving a further enhancement of the quality of the portfolio.
Furthermore, in January 2016, JHR implemented capital increase through public offering, the sixth one since
the merger, to complement a decrease in cash on hand, which is a decrease equivalent to the cash on hand
used to fund the acquisition of ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel). JHR also
used the proceeds from the public offering to newly acquire CANDEO HOTELS UENO-KOEN, located in
the Ueno area in central Tokyo which benefits from an increase in inbound tourism demand, for an acquisition
price of 6,705 million. The acquisition has increased the portfolio size to 232,428 million on an acquisition
price basis.
Moreover, steadily implementing its growth strategy, JHR concluded a purchase and sale agreement as of
February 18, 2016 regarding the acquisition of Hotel Centraza Hakata for a planned acquisition price of
7,197 million.
For its owned hotels, JHR endeavored to expand its earnings by continuously discussing with the hotel
operators for increasing revenue, after assessing the business environment and operation conditions at each
hotel on a monthly basis. For hotels with variable rent contracts including upside sharing schemes and
6
management contracts, hotel earnings increased against the backdrop of strong domestic and overseas leisure
demand, which achieved an increase in JHRs rent revenue. Among fixed rent properties held, JHR rebranded
Dormy Inn Suidobashi, for which the lease contract expired at the end of June 2015, to the b suidobashi and
changed its rent scheme, which had been fixed rent alone, to the one comprising fixed rent as minimum
guaranteed rent plus variable rent.
With respect to capital investments in portfolio properties, JHR invested in the renewal of its facilities in order
to maintain the value of its assets and carried out strategic refurbishment to increase profits at hotels with
variable rent contracts, etc.
In terms of operations of the five hotels (hereinafter referred to as the five HMJ hotels) which JHR leases
(Note 1) to Hotel Management Japan Co., Ltd. (hereinafter referred to as HMJ) under variable rent
contracts, they have produced a year-on-year increase both in sales and GOP (gross operating profit), led by
the rooms department, during the fiscal period under review. The rooms department achieved an increase in
not only the guest room occupancy rate but also the ADR (average daily rate), allowing us to feel how strong
the leisure demand was. For further details regarding sales, GOP and other management indicators for the five
HMJ hotels, please refer to <Reference 1> Major indicators of the hotel business for the fiscal year ended
December 31, 2015 and <Reference 2><1> Sales and GOP of HMJ group hotels in 7. Reference
information. Furthermore, as announced in the Notice Concerning Revision of Fixed-Term Lease Agreement
dated December 18, 2015, JHR negotiated with HMJ to modify the terms and conditions of the fixed-term
lease agreement with HMJ, as JHR believed that HMJs profitability would increase in accordance with a
shift to independent hotel operations by HMJ. As a result, JHR and HMJ agreed that the variable rent ratio be
changed from 81.5% to 85.0% effective January 1, 2016 while JHR shall return part of the security deposits to
HMJ. This has made it possible for JHR to obtain the enhanced performance of the hotels as its earnings.
Moreover, inbound guests and domestic leisure demand were successfully attracted by the 6 hotels (Note 2)
for which AAPC Japan K.K. (hereinafter referred to as Accor), a Japanese subsidiary of Accor Hotels
headquartered in Paris, France, serves as the operator (hereinafter referred to as the six Accor hotels). These
hotels posted a year-on-year increase both in sales and GOP, mainly led by an increase in the ADR. For
further details regarding sales, GOP and other management indicators for the six Accor hotels, please refer to
<Reference 1> Major indicators of the hotel business for the fiscal year ended December 31, 2015 and
<Reference 2><2> Sales and GOP of the six Accor hotels in 7. Reference information.
Furthermore, efforts were made to attract inbound tourists at the six the b hotels (Note 3), which are leased
to the subsidiaries of the Ishin Hotels Group with a variable rent scheme, and consequently a year-on-year
increase was achieved both in sales and GOP. For further details regarding sales, GOP and other management
indicators for the six the b hotels, please refer to <Reference 1> Major indicators of the hotel business for
the fiscal year ended December 31, 2015 and <Reference 2><3> Sales and GOP of the six the b hotels
in 7. Reference information.
As for further details regarding sales, GOP and other management indicators for Okinawa Marriott Resort &
Spa and ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) that JHR acquired in the fiscal
period under review, please refer to <Reference 1> Major indicators of the hotel business for the fiscal year
ended December 31, 2015 and <Reference 2><1> Sales and GOP of HMJ group hotels in 7. Reference
information.
In addition, JHR not only increased the size of its asset portfolio by acquiring new properties, but also made
steady progress in reducing real estate management costs, general and administrative expenses, and
borrowing costs.
(Note 1) The five HMJ hotels represent the five hotels, namely, Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay,
Namba Oriental Hotel, Hotel Nikko Alivila and Oriental Hotel Hiroshima. The HMJ group hotels represent the seven
hotels comprising the five HMJ hotels plus Okinawa Marriott Resort & Spa and Sheraton Hiroshima Hotel, which is
the major facility of ACTIVE-INTER CITY HIROSHIMA.
(Note 2) Represents the six hotels, namely, ibis Tokyo Shinjuku, ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure
Sapporo, Mercure Okinawa Naha and Mercure Yokosuka.
(Note 3) Represents the six hotels, namely, the five hotels comprising the b akasaka-mitsuke, the b ikebukuro, the b
ochanomizu, the b hachioji and the b hakata (hereinafter referred to as the five the b hotels) plus the b suidobashi,
which was rebranded from the former Dormy Inn Suidobashi on July 1, 2015.
(3) Funding
JHR acquired the five the b hotels by using the 15,651 million in total obtained by issuing new investment
units through public offering in January 2015 and third-party allotment in February 2015, as well as the
1,000 million in short-term loans and 12,900 million in long-term loans borrowed in January 2015. JHR
also used these funds to make early repayment of 4,779 million in existing long-term loans. In March 2015,
JHR procured 1,500 million in long-term loans to partly fund the acquisition of Hotel Francs. Moreover,
JHR acquired Mercure Yokosuka by using cash on hand in April 2015. The reduced cash balance was
compensated by public offering in June 2015 and third-party allotment in July 2015
JHR also acquired Okinawa Marriott Resort & Spa by using the 10,793 million in total obtained by issuing
new investment units through public offering in June 2015 and third-party allotment in July 2015, as well as
the 5,000 million in short-term loans and 1,500 million in long-term loans borrowed in July 2015. In
September 2015, JHR borrowed 6,608 million in long-term loans to fund refinancing and early repayment of
the borrowings that matured on the same month and November 2015.
In October 2015, JHR issued investment corporation bonds for retail investors, the first such issuance for JHR,
totaling 6,000 million to make early repayment of 6,000 million in existing loans. JHR also made early
repayment of 4,000 million in long-term loans by using funds obtained from sale of the three properties
comprising Daiwa Roynet Hotel Akita, Hotel Sunroute Niigata and Comfort Hotel Shin-Yamaguchi.
Moreover, in December 2015, JHR procured 9,000 million in short-term loans to partly fund the acquisition
of ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel).
As a result of the above, as of the end of the fiscal period under review, interest-bearing debt totaled 102,772
million, including short-term loans payable of 9,000 million, current portion of long-term loans payable of
11,393 million, long-term loans payable of 70,379 million, current portion of investment corporation bonds
of 2,500 million and investment corporation bonds of 9,500 million, and the ratio of interest-bearing debt to
total assets at end of period stood at 42.8%.
Through a series of these funding measures, JHR was able to lower its funding costs and diversify its
repayment period.
Furthermore, JHR concluded interest rate swap contracts to fix the interest on 16,716 million in total on
loans on January 30, March 27, July 10 and September 17, 2015 in order to suppress the increase in interest
payment resulting from future interest rate rises. These actions brought the fixed rate ratio (including the
interest rate cap purchase portion) on JHRs total interest-bearing debt to approximately 85%.
As of December 31, 2015, JHRs issuer ratings were as follows.
As of October 29, 2015, Rating and Investment Information, Inc. (hereinafter referred to as R&I) changed
the outlook of JHRs issuer rating from stable to positive. Moreover, as of November 26, 2015, Japan
Credit Rating Agency, Ltd. (hereinafter referred to as JCR) also changed its outlook of JHRs long-term
issuer rating from stable to positive.
Rating agency
Rating
Outlook
R&I
Positive
JCR
Positive
(4) Financial results

As a result of the abovementioned asset management, operating revenue, operating income and ordinary
income were 17,343 million, 10,988 million and 9,295 million, respectively, for the fiscal period under
review (12-month period from January 1 to December 31, 2015). Net income was 9,294 million.
With regard to dividends, it was decided that 9,356 million, which was calculated by adding a reversal of
reserve for dividends (appropriation for dividends) of 60 million to unappropriated retained earnings of
9,296 million, would all be distributed except for fractions of less than one yen of dividend per unit.
Consequently, the dividend per unit came to 2,975.
Appropriation for dividends for the fiscal period under review is for the purpose of offsetting the financial
costs associated with early repayment and losses on retirement of existing facilities incurred for the
replacement of equipment.
For appropriation for dividends, please refer to <Reference 3> Dividend per unit and appropriation for
dividends in 7. Reference information.
3. Changes in unitholders capital, etc.
The table below indicates increases (decreases) in the number of investment units issued and outstanding and
unitholders capital of JHR in the past five years.
Date
Capital transaction
April 6, 2011
Capital increase through third-party

allotment of investment units
April 1, 2012
Investment unit split
April 1, 2012
Merger
September 12, Capital increase through public

2012
offering of investment units
Number of units issued

(Units)
Increase
(decrease)
Balance
Unitholders capital
(Millions of yen)
Increase
(decrease)
Note
Balance
15,831
58,031
3,599
23,161
(Note 1)
638,341
696,372
23,161
(Note 2)
1,162,909
1,859,281
23,161
(Note 3)
240,000
2,099,281
4,855
28,017
(Note 4)
12,000
2,111,281
242
28,260
(Note 5)
October 11,
2012

April 17,
2013
Capital increase through public

510,000
2,621,281
20,585
48,845
(Note 6)
September 9,
2014

170,000
2,791,281
10,179
59,024
(Note 7)
January 27,
2015

200,000
2,991,281
14,974
73,999
(Note 8)
February 18,
2015

9,041
3,000,322
676
74,676
(Note 9)
June 22,
2015

140,000
3,140,322
10,500
85,177
(Note 10)
July 23
2015

3,905
3,144,227
292
85,470
(Note 11)
(Note 1)
(Note 2)
(Note 3)
(Note 4)
(Note 5)
(Note 6)
(Note 7)
(Note 8)
(Note 9)
(Note 10)
(Note 11)
New investment units were issued through third-party allotment with an issue price per unit of 227,400 in order to
raise funds for the acquisition of new properties.
JHR conducted a 12-for-1 split of investment units.
JHR (the former NHF) merged with the former JHR. The merger was an absorption-type merger pursuant to Article
147 of the Investment Trusts Act where JHR is the surviving corporation and the former JHR is the absorbed
corporation. Following this merger, 11 investment units of JHR after the split of investment units were delivered by
allotment for each investment unit of the former JHR.
New investment units were issued through public offering with an issue price per unit of 20,990 (subscription price
of 20,232) in order to raise funds for the acquisition of new properties, etc.
repay loans payable, etc.
raise funds for allocation to part of future acquisitions of specified assets, part of other repayment of loans, or capital
expenditures to maintain or improve competitiveness of existing properties.
raise funds for allocation to part of future acquisitions of specified assets, part of other repayment of loans, or capital
expenditures to maintain or improve competitiveness of existing properties.
[Fluctuation in market price of investment units]

The highest and lowest prices (closing price) during each fiscal period of the investment units of JHR on the
Tokyo Stock Exchange REIT section are as follows:
(Yen)
Fiscal period
12th period
13th period
14th period
15th period
16th period
Account closing month
March 2012
December 2012
December 2013
December 2014
December 2015
Highest price
19,550 (Note)
25,110
51,500
82,400
93,800
Lowest price
15,008 (Note)
17,830
23,670
45,350
70,600
Price at end of period
18,700 (Note)
23,880
50,400
77,000
89,500
(Note)
In line with the merger, JHR conducted a 12-for-1 split of investment units with an effective date of April 1, 2012.
Consequently, figures for the 12th period have been calculated as if the unit split had been conducted at the start of the
fiscal period.
4. Dividends, etc.
Earnings dividend for the period under the review was decided in accordance with the monetary distribution
policy stipulated in Article 34, paragraph 1 of JHRs Articles of Incorporation to exceed 90% of JHRs
distributable profit that is defined by Article 67-15 of the Act on Special Measures Concerning Taxation. And
9,356 million, which was calculated by adding a reversal of reserve for dividends (appropriation for dividends)
of 60 million to unappropriated retained earnings of 9,296 million as of end of the period under the review,
would all be distributed except for fractions of less than one yen of dividend per unit. Consequently, the dividend
per unit came to 2,975.
(Yen)
Classification
Unappropriated retained
earnings
Reversal of reserve for
dividends
Retained earnings
Total cash dividends
[Dividend per unit]
Of the above, total earnings
dividends
[Earnings dividend per unit]
Of the above, total return of
capital contributions
[Return of capital
contributions per unit]
12th period
13th period
14th period
15th period
16th period
(From October 1, 2011

to March 31, 2012)
(From April 1, 2012

to December 31, 2012)
(From January 1, 2013



473,912,203
19,031,977,302
3,235,030,032
5,776,116,820
9,296,121,922
1,848,870,143
240,538,162
60,847,707
31,057
1,695,047
1,236,316
1,444,427
2,894,304
473,881,146
3,012,797,987
5,082,663,859
6,015,210,555
9,354,075,325
[8,166]
473,881,146
[8,166]
[1,427]
3,012,797,987
[1,427]
[1,939]
5,082,663,859
[1,939]
[2,155]
6,015,210,555
[2,155]
[2,975]
9,354,075,325
[2,975]
[]
[]
[]
[]
[]
10
5. Investment policies and issues to be addressed

General investment outlook
In 2016, the Japanese economy is anticipated to show a recovery bolstered by strong private sector demand, with
the employment and income environments continuing to improve and the virtuous cycle of the economy making
further progress as well as the terms of trade improving moderately, partly due to the positive effect of the
Urgent Policies to Realize a Society in Which All Citizens are Dynamically Engaged implemented by the
government on November 26, 2015 and other measures. Attention must be paid, however, to the downside swing
of the emerging economies including China, market price trends of crude oil and other commodities and
geopolitical risks, among other factors, amid the U.S. monetary policy being increasingly normalized. Moreover,
in the environment surrounding the tourism industry, it is expected that JHR will benefit from a further increase
in the number of domestic tourists and inbound tourists thanks to an increase in individual income through the
economic growth in the Asian areas, visa waiver and relaxing visa issuance requirements, enhanced
infrastructures including expansion in the arrival and departure slot of international flights, among other factors,
on top of the leisure demand among the Japanese people remaining solid.
Under such circumstances, JHR intends to invest based on the approach described below in order to make
investing in JHR more appealing based on its balanced mix of stability centered on fixed rent revenue and
upside potential derived from variable rent and other revenue sources.
Internal growth
JHR will work to boost sales and GOP of hotels operated under variable rent contracts, which are the seven
hotels of the HMJ group hotels that comprise the five HMJ hotels plus Okinawa Marriott Resort & Spa (newly
acquired in July 2015) and ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) (newly acquired
in December 2015), and the six the b hotels that comprise the five the b hotels plus the b suidobashi, which
was rebranded from Dormy Inn Suidobashi on July 1, 2015, as well as of the six Accor hotels that are mainly
operated under a management contract scheme, with an aim to maximize variable rent and earnings under
management contracts. To achieve this goal, JHR will request each hotel, its operations support company and its
operator to implement marketing initiatives to attract wider range of demand and measures to maintain and
increase room rates. JHR will also work with related parties to move the business focus from competition based
on price to competition based on value, aiming to create facilities and services that become prominent in the
market.
For hotels with only fixed rent contracts, JHR will increase its efforts to monitor operating conditions and, by
paying careful attention to each tenants ability to bear the rent costs, conduct negotiations with the hotels at
which the ability to bear rent costs has been enhanced through better performances so that the improvement in
hotel earnings would lead to an increase in JHRs earnings, such as revising rents upward and introducing upside
sharing schemes.
In addition, JHR will carry out an ongoing program of facility maintenance and improvement to ensure each
hotel becomes prominent in the market and to maintain and increase the value of its assets.
External growth
In terms of external growth strategy, JHR will keep focus on investing in hotels with prospects for attracting
domestic and overseas leisure demand over the medium to long term, that is, highly competitive hotels located in
appealing or fashionable areas, as it has done to date. Limited-service hotels, full-service hotels and resort hotels
are all investment targets, but JHR will only acquire properties with competitive advantages in terms of
buildings and facilities (infrastructure) and the capabilities of the hotel tenant and operator (services).
However, competition over acquisition has become fierce in the investment market for hotels in accordance with
an increase in the number of investors, with transaction yields showing a downward trend. Under such
circumstances, JHR will work to acquire properties and make them prominent in the market, by taking
advantage of its strength as a REIT specializing in hotel properties of being able to extensively collect
transaction information of real estate related assets, etc. that are used as hotels and make selective approaches.
Specifically, JHR will utilize its pipelines as a major player in the investment market for hotels, ability to collect
information on operations of hotels in general, proposal and implementation of a variety of rent schemes
including the management contract scheme, and excellent networks with major hotel operators. By doing so,
JHR will acquire properties while maintaining its superiority in the investment market for hotels.
11
Following such policy, in the fiscal period ended December 2015, JHR acquired seven properties (the five the b
hotels, Hotel Francs and Mercure Yokosuka) located mainly in Tokyo and the bay area that are deemed to enjoy
the largest benefits from an increase in inbound tourists. JHR also acquired a large resort hotel with the name of
Marriot, a worlds top international brand, in the Okinawa area, which is expected to show the highest growth
among JHRs strategic investment target areas. Moreover, JHR acquired a multi-use facility centering on a
relatively new, full-service hotel carrying the name of Sheraton, another well-known international brand,
featuring a good location with a one-minute walk from JR Hiroshima Station. Of these properties, a lease
scheme that combines fixed rents and variable rents has been employed by the seven properties excluding Hotel
Francs that is with fixed rent contract only and Mercure Yokosuka that is with variable rent contract only, in
order to pursue upside potential while working to secure stability. Going forward, JHR will continuously acquire
properties by taking advantage of these strengths that are peculiar to a REIT specialized in hotels, including the
ability to incorporate a variety of rent schemes, hotel renovations and rebranding arrangements.
Finance strategy
JHR seeks to maintain and enhance the relationships of trust with financial institutions with which it does
business, while working to ensure financial stability and strength by increasingly diversifying the means of
financing. It aims to conduct financial operations by keeping the ratio of interest-bearing debt to total assets at
no larger than 50% for the time being. In addition, when seeking new borrowings for property acquisitions or
refinancing existing debt, JHR will work to reinforce its existing relationships with multiple banks while seeking
to spread out the maturity dates of its debt and considering the balance with borrowing costs.
Moreover, JHR will investigate extending the maturity dates and managing interest rate risks while discerning
the conditions of the market for interest rate.
12
6. Significant subsequent events

(1) Acquisition of assets
On February 1, 2016, JHR acquired the following property.
Property name
CANDEO HOTELS UENO-KOEN
Asset category
Real estate beneficial interest in trust and movable assets

attached to the hotel
Asset type
Hotel
Address
1-2-13 Negishi, Taito-ku, Tokyo
Acquisition date
February 1, 2016
Seller
GK Ueno Parkside
Acquisition price (Note)
6,705 million
(Note) The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and
consumption taxes.
On April 1, 2016, JHR acquired the following property.

Property name
Hotel Centraza Hakata
Asset category
Real estate beneficial interest in trust and movable assets

attached to the hotel
Asset type
Hotel
Address
4-23 Hakata-eki Chuogai, Hakata-ku, Fukuoka-shi,

Fukuoka
Acquisition date
April 1, 2016
Seller
The seller is not disclosed as consent on disclosure has not

been obtained from the seller. There are no capital, human
or business relationships to be noted between JHR or the
Asset Management Company and the seller. In addition,
the seller does not have any special interest relationship
with either JHR or the Asset Management Company.
7,197 million
(Note)
The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning taxes, and
consumption taxes.
(2) Resolution on borrowing of funds

JHR resolved on new borrowings as follows in order to partly fund the acquisition of the real estate beneficial
interest in trust of CANDEO HOTELS UENO-KOEN and movable assets attached thereon as described above
in item (1) Acquisition of assets.
13
Term Loan 18
Lender
Sumitomo Mitsui Banking Corporation / Shinsei Bank,

Limited / Mizuho Bank, Ltd. / The Hiroshima Bank, Ltd.
Amount of the loan
2,000 million
Interest rate
Base interest rate (JBA Japanese Yen TIBOR for one

month) + 0.30%
Date of borrowing
February 29, 2016
Method of principal
repayment
Lump-sum payment on the maturity date
Maturity date
March 31, 2019
Collateral
Unsecured/Unguaranteed
JHR resolved on new borrowings as follows in order to partly fund the acquisition of the real estate beneficial
interest in trust of Hotel Centraza Hakata and movable assets attached thereon as described above in item (1)
Acquisition of assets.
Term Loan 19
Lender
Sumitomo Mitsui Banking Corporation / Mizuho Bank,

Ltd. / Shinsei Bank, Limited / Sumitomo Mitsui Trust
Bank, Limited / Mitsubishi UFJ Trust and Banking
Corporation / The Bank of Fukuoka, Ltd.
Amount of the loan
7,000 million
Interest rate
Base interest rate (JBA Japanese Yen TIBOR for one

month) + 0.30%
Date of borrowing
April 1, 2016
Method of principal
repayment
Maturity date
March 31, 2017
Collateral
(3) Issuance of new investment units

JHR resolved to issue new investment units at the Board of Directors meetings held on January 4, 2016 and
January 13, 2016. Payment for the new investment units was completed on January 20, 2016 and February 17,
2016, and the investment units were issued under the following terms and conditions. As a result, JHRs
unitholders capital increased to 100,088,808,209, with the number of investment units issued and
outstanding totaling 3,321,907 units.
(A) Issuance of new investment units (public offering)
Number of investment units issued:
Issue price:
Total issue price:
Paid-in amount (issue value):
Total paid-in amount (total issue value):
Payment date:
14
170,000 units
85,020 per unit
14,453,400,000
82,273 per unit
13,986,410,000
January 20, 2016
(B) Issuance of new investment units (third-party allotment)

7,680 units
82,273 per unit
631,856,640
Payment date:
February 17, 2016
Allottee:
SMBC Nikko Securities Inc.
(C) Use of funds
JHR allocated the proceeds obtained from the public offering and the third-party allotment to cash on
hand in order to complement part of a decrease in cash on hand, which is a decrease that occurred
when JHR had used cash on hand to partly fund the acquisition of ACTIVE-INTER CITY
HIROSHIMA (Sheraton Hiroshima Hotel) (including expenses for acquisition) that it acquired on
December 18, 2015. JHR also used the said proceeds to partly fund the acquisition of CANDEO
HOTELS UENO-KOEN as described above in item (1) Acquisition of assets.
(4) Issuance of investment corporation bonds
JHR issued the investment corporation bonds under the following terms and conditions.
Category
Sixth unsecured investment corporation bonds
Total amount of bonds
3,000 million
Issue price
100 for 100 of each bond
Interest rate
0.935% per year
Issue date
March 22, 2016
Redemption date
March 19, 2026
Collateral
Unsecured
Use of proceeds
To partly fund the repayment of existing loans
7. Reference information
<Reference 1>
Major indicators of the hotel business for the fiscal year ended December 31, 2015
The following tables indicate the figures related to the hotel business of the HMJ group hotels, the six
Accor hotels and the six the b hotels for the operating period from January 1, 2015 through
December 31, 2015, based on the data provided by the hotel lessees. Furthermore, while the indicators
of the hotels are among the indicators that show the operating status of the rooms departments, they do
not necessarily represent the operating revenue and the ability to bear rent, etc. of the respective hotels,
as the daily rates and profit margins, etc. of the respective rooms available for sale are not uniform,
among other reasons. As such, the indicators are no more than the reference figures.
(a) HMJ group hotels
(Millions of yen)
Kobe Meriken
Oriental Hotel
Park Oriental
tokyo bay
Hotel
Ratio
to total
sales
Namba
Oriental
Hotel
Ratio
to total
sales
Hotel Nikko Oriental Hotel

Alivila
Hiroshima
Ratio
to total
sales
Ratio
to total
sales
Five HMJ
hotels
Total/Average
Okinawa
Marriott
Resort & Spa
(Note 4)
Ratio
to total
sales
Ratio
to total
sales
Ratio
to total
sales
Sheraton
Hiroshima
Hotel
(Note 5)
Ratio
to total
sales
Occupancy rate
80.0%
98.1%
89.7%
83.6%
80.0%
87.7%
87.9%
85.4%
ADR (Note 1)
17,361
20,027
16,949
26,651
8,908
19,212
19,025
16,429
RevPAR
(Note 2)
13,896
19,655
15,204
22,283
7,122
16,843
16,717
14,024
15
Kobe Meriken
Oriental Hotel
Park Oriental
tokyo bay
Hotel
Namba
Oriental
Hotel
Hotel Nikko Oriental Hotel

Alivila
Hiroshima
Five HMJ
hotels
Total/Average
Okinawa
Marriott
Resort & Spa
(Note 4)
Sheraton
Hiroshima
Hotel
(Note 5)
Ratio
to total
sales
Ratio
to total
sales
Ratio
to total
sales
Ratio
to total
sales
Ratio
to total
sales
Ratio
to total
sales
Ratio
to total
sales
Ratio
to total
sales
5,252 100.0%
7,322 100.0%
2,530 100.0%
5,948 100.0%
2,134 100.0%
23,186 100.0%
4,016 100.0%
2,847 100.0%
Rooms
department
1,783
33.9%
3,978
54.3%
1,571
62.1%
3,551
59.7%
649
30.4%
11,532
49.7%
2,427
60.4%
1,340
47.1%
Food & beverage

department
3,126
59.5%
2,871
39.2%
165
6.5%
1,905
32.0%
1,410
66.1%
9,477
40.9%
1,159
28.9%
1,408
49.4%
Tenant
department
60
1.1%
250
3.4%
750
29.6%
0.0%
23
1.1%
1,083
4.7%
79
2.0%
13
0.5%
Other
departments
(Note 3)
284
5.4%
224
3.1%
45
1.8%
489
8.2%
52
2.4%
1,093
4.7%
352
8.8%
87
3.0%
1,168
22.2%
2,044
27.9%
1,423
56.2%
1,977
33.2%
328
15.4%
6,941
29.9%
1,230
30.6%
716
25.1%
Total sales
GOP
(Note 1)
(Note 2)
(Note 3)
(Note 4)
(Note 5)
(Note 6)
ADR: Represents average daily rate, which is calculated by dividing total rooms revenue for a certain period (excluding
service charges) by the total number of rooms sold during the period. The same shall apply hereinafter.
RevPAR: Represents revenue per available room, which is calculated by dividing total rooms revenue for a certain
period (excluding service charges) by the total number of rooms available for sale during the period. Revenue per
available room equals the product of ADR and occupancy rate. The same shall apply hereinafter.
Figures for the Other departments include sales of the Product sales department.
For Okinawa Marriott Resort & Spa, which JHR acquired on July 10, 2015, annual figures include the result of before
and after acquisitions.
The indicated figures are for Sheraton Hiroshima Hotel, the main facility of ACTIVE-INTER CITY HIROSHIMA. For
ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel), which JHR acquired on December 18, 2015,
annual figures include the result of before and after acquisition.
The occupancy rate is rounded off to one decimal place, while ADR and RevPAR are rounded off to single units. Sales
and GOP are rounded off to the nearest million yen. For the ratio to total sales, the ratio of sales in each department to
total sales is rounded off to one decimal place. The same shall apply hereinafter.
(b) Six Accor hotels

(Millions of yen)
ibis Tokyo
Shinjuku
ibis Styles
Kyoto Station
Ratio to
total
sales
ibis Styles
Sapporo
Ratio to
total
sales
Mercure
Sapporo
Ratio to
total
sales
Mercure
Okinawa Naha
Ratio to
total
sales
Mercure
Yokosuka
(Note 1)
Ratio to
total
sales
Total/Average
(Note 2)
Ratio to
total
sales
Ratio
to total
sales
Occupancy rate
88.5
90.7%
87.8%
82.1%
80.7%
89.5%
86.1%
ADR
11,809
10,491
9,335
11,009
10,038
11,561
10,605
RevPAR
10,456
9,520
8,197
9,044
8,097
10,352
9,130
Total sales
873 100.0%
814 100.0%
Rooms department
782
89.6%
747
91.8%
832
81.6%
941
80.3%
765
82.9%
605
56.9%
4,672
79.7%
Food & beverage

department
71
8.1%
61
7.5%
163
16.0%
221
18.9%
131
14.2%
437
41.1%
1,084
18.5%
Other departments
20
2.3%
0.7%
24
2.4%
10
0.8%
26
2.8%
21
2.0%
108
1.8%
470
53.8%
437
53.7%
513
50.3%
464
39.6%
392
42.5%
235
22.1%
2,512
42.8%
GOP
(Note 1)
(Note 2)
1,019 100.0%
1,172 100.0%
923 100.0%
1,062 100.0%
5,863 100.0%
For Mercure Yokosuka, which JHR acquired on April 2, 2015, annual figures include the result of before and after
acquisition.
For Total/Average, figures calculated by JHR are indicated as no figures have been provided by the hotel operators or
hotel lessees.
16
(c) Six the b hotels

(Millions of yen)
the b suidobashi
(Note 1)
the b
akasaka
-mitsuke
(Note 2)
Ratio to
total
sales
the b
ikebukuro
(Note 2)
Ratio to
total
sales
the b
ochanomizu
(Note 2)
Ratio to
total
sales
the b hachioji
(Note 2)
Ratio to
total
sales
the b hakata
(Note 2)
Ratio to
total
sales
Total/Average
(Note 3)
Ratio to
total
sales
Ratio
to total
sales
Occupancy rate
89.6%
91.7%
90.8%
90.7%
95.4%
91.9%
ADR
11,494
10,494
10,936
7,074
6,580
8,842
RevPAR
10,301
9,626
9,932
6,414
6,277
8,124
Total sales
464 100.0%
625 100.0%
262 100.0%
558 100.0%
406 100.0%
2,315 100.0%
Rooms department
459
98.9%
615
98.4%
261
99.4%
459
82.3%
401
98.8%
2,194
94.8%
Food & beverage

department
95
17.0%
95
4.1%
Other departments
1.1%
10
1.6%
0.6%
0.8%
1.2%
26
1.1%
266
57.4%
320
51.2%
122
46.5%
193
34.5%
178
43.9%
1,079
46.6%
GOP
(Note 1)
(Note 2)
(Note 3)
For the b suidobashi, there is no figure available for disclosure for the fiscal period ended December 31, 2015 as no
data exist for the period before July 1, 2015.
For the five the b hotels, which JHR acquired on January 30, 2015, annual figures include the result of before and
after acquisitions.
For Total/Average, figures calculated by JHR are indicated as no figures have been provided by the hotel lessees.
Furthermore, the figures represent the total and average of the five the b hotels, or the six the b hotels minus the b
suidobashi.
<Reference 2>
The following tables indicate the sales and GOP of the HMJ group hotels, the six Accor hotels and the five the
b hotels, among JHRs hotels with variable rent contracts. Furthermore, while the indicated figures are based on
the data provided by the hotel lessees, etc., please note that the figures have not undergone audit and other
procedures and JHR is not in a position to guarantee the accuracy and completeness of the individual figures and
descriptions. Moreover, the sales and GOP are rounded off to the nearest million yen, and the year-on-year
change is rounded off to the one decimal place.
<1> Sales and GOP of HMJ group hotels

(1) Sales by hotel
(Millions of yen)
Sales of the HMJ group hotels
First half
Kobe Meriken Park
Oriental Hotel
Second half
Full year
First half
Oriental Hotel tokyo bay Second half

Full year
First half
Namba Oriental Hotel
Second half
Full year
Fiscal year ended Dec. 31, 2014

Results
Year-on-year change
2,424
2,798
5,222
3,366
3,844
7,210
998
1,151
2,149
0.4%
0.1%
0.2%
4.9%
(3.3)%
0.4%
6.8%
10.9%
9.0%
17
Results
Year-on-year change
2,424
2,828
5,252
3,395
3,927
7,322
1,189
1,341
2,530
(0.0)%
1.1%
0.6%
0.9%
2.2%
1.6%
19.1%
16.6%
17.8%
(Millions of yen)
Sales of the HMJ group hotels

Results
2,190
3,301
5,491
1,046
1,178
2,223
10,024
12,272
22,296
1,600
2,211
3,811
1,359
1,511
2,870
First half
Hotel Nikko Alivila
Second half
Full year
First half
Oriental Hotel Hiroshima Second half

Full year
First half
Total of the five HMJ
hotels
Second half
Full year
First half
Okinawa Marriott Resort
Second half
& Spa
Full year
First half
Sheraton Hiroshima
Hotel
Second half
Full year
(Note)
Year-on-year change
Results
(0.1)%
3.7%
2.2%
(0.0)%
(2.5)%
(1.4)%
2.3%
0.6%
1.4%
5.8%
7.1%
6.6%
3.5%
1.0%
2.2%
Year-on-year change
2,377
3,571
5,948
991
1,142
2,134
10,376
12,810
23,186
1,614
2,402
4,016
1,346
1,502
2,847
8.6%
8.2%
8.3%
(5.2)%
(3.0)%
(4.0)%
3.5%
4.4%
4.0%
0.9%
8.7%
5.4%
(1.0)%
(0.6)%
(0.8)%
For Okinawa Marriott Resort & Spa and ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel), which
JHR acquired on July 10, 2015 and December 18, 2015, respectively, figures include the result of before and after
acquisition.
(2) Hotel GOP

(Millions of yen)
GOP of the HMJ group hotels
Total for five HMJ

hotels
GOP
Ratio of GOP to
sales
GOP
Okinawa Marriott Resort
& Spa
Ratio of GOP to
sales
Sheraton Hiroshima
Hotel
(Note)
GOP
Ratio of GOP to
sales

Results
Year-on-year change
Results
Year-on-year change
6,302
2.4%
6,941
10.1%
28.3%
0.3%
29.9%
1.7%
1,105
12.5%
1,230
11.3%
29.0%
1.5%
30.6%
1.6%
651
11.3%
716
10.0%
22.7%
1.9%
25.1%
2.5%
JHR acquired Okinawa Marriott Resort & Spa and ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) on
July 10, 2015 and December 18, 2015, respectively. Annual figures of the HMJ group hotels include the result of before and
after the acquisition of these two hotels.
The calculation of rent for five HMJ hotels for the fiscal year ended December 31, 2015 is as follows:
Annual rent (6,147 million) = Fixed rent (3,221 million) + Variable rent (2,926 million)
Variable rent = [Total GOP of the five HMJ hotels (6,941 million) GOP base amount (3,351
million)] 81.5% (Note)
(Note)
With regard to the fixed-term lease agreement for the five HMJ hotels, JHR concluded an agreement to change the variable
rent ratio from 81.5% to 85.0%, effective on January 1, 2016.
18
<2> Sales and GOP of the six Accor hotels

(1) Sales by hotel
(Millions of yen)
Sales of the six Accor hotels
Results
ibis Tokyo Shinjuku
Second half
Full year
First half
ibis Styles Kyoto Station Second half

Full year
First half
ibis Styles Sapporo
Second half
Full year
First half
Mercure Sapporo
Second half
Full year
First half
Mercure Okinawa Naha
Second half
Full year
First half
Mercure Yokosuka
Second half
Full year
First half
Total
Second half
Full year
(Note)
(2)
Year-on-year change
427
445
872
305
384
690
397
522
920
425
573
998
363
414
778
545
491
1,036
2,463
2,829
5,292
First half
12.0%
7.5%
9.6%
(1.2)%
13.3%
6.3%
2.3%
4.8%
3.7%
5.5%
3.9%
4.6%
28.0%
14.5%
20.5%
3.7%
9.5%
6.4%
7.5%
8.3%
7.9%
Results
Year-on-year change
453
421
873
357
457
814
429
591
1,019
499
672
1,172
407
516
923
550
512
1,062
2,696
3,168
5,863
6.1%
(5.5)%
0.2%
17.1%
18.8%
18.0%
7.9%
13.1%
10.9%
17.5%
17.4%
17.4%
12.1%
24.5%
18.7%
1.0%
4.3%
2.6%
9.5%
12.0%
10.8%
For Mercure Yokosuka, which JHR acquired on April 2, 2015, figures include the result of before and after acquisition.
Hotel GOP
(Millions of yen)
GOP of the six Accor hotels
Results
Total for six Accor hotels

Ratio of GOP to sales
(Note)
Year-on-year change
Results
Year-on-year change
2,075
15.6%
2,512
21.0%
39.2%
2.6%
42.8%
3.6%
JHR acquired Mercure Yokosuka on April 2, 2015. Annual figures of the six Accor hotels include the result of before and
after the acquisition of Mercure Yokosuka.
<3> Sales and GOP of the six the b hotels

(1) Sales by hotel
(Millions of yen)
Sales of the six the b hotels
First half
the b akasaka-mitsuke
Second half
Full year
Results
Results
Year-on-year change
131
213
344
19
(13.7)%
94.9%
31.8%
Year-on-year change
221
242
464
69.4%
13.8%
35.0%
Sales of the six the b hotels
Results
Results
279
283
562
121
124
246
242
256
497
172
191
363
944
1,067
2,011
First half
the b ikebukuro
Second half
Full year
First half
the b ochanomizu
Second half
Full year
First half
the b hachioji
Second half
Full year
First half
the b hakata
Second half
Full year
First half
Total
Second half
Full year
(Note 1)
(Note 2)
(Note 3)
Year-on-year change
8.1%
4.6%
6.4%
7.9%
1.6%
4.6%
9.8%
0.9%
5.0%
7.0%
8.7%
7.9%
4.7%
14.6%
9.7%
301
324
625
132
130
262
267
291
558
191
215
406
1,111
1,203
2,315
Year-on-year change
7.7%
14.5%
11.1%
9.0%
4.8%
6.9%
10.4%
13.8%
12.2%
10.9%
12.8%
11.9%
17.7%
12.8%
15.1%
The number of guest rooms of the b akasaka-mitsuke increased from 91 to 122 with the extension and refurbishment
work conducted by the previous owner having completed in April 2014. Accordingly, the number of guest rooms
available for sale in the first half of 2015 and the first half of 2014 are not identical.
For the five the b hotels, which JHR acquired on January 30, 2015, figures include the result of before and after
acquisition.
For the b suidobashi, there is no figure to disclose for the fiscal year ended December 31, 2015 as no data exists for the
period before July 1, 2015.
(2) Hotel GOP

(Millions of yen)
GOP of the five the b hotels
Total for the five the b hotels
Ratio of GOP to sales
(Note 1)
(Note 2)
Results
Year-on-year change
Results
Year-on-year change
854
15.5%
1,079
26.4%
42.4%
2.1%
46.6%
4.2%
JHR acquired the five the b hotels on January 30, 2015. Annual figures of the five the b hotels include the result of
before and after the acquisition.
For the b suidobashi, there is no figure to disclose for the fiscal year ended December 31, 2015 as no data exists for the
period before July 1, 2015.
20
<Reference 3>
Dividend per unit and appropriation for dividends
Dividend per unit for the fiscal periods ended December 31, 2014 and December 31, 2015 was calculated based
on the assumptions described below.
(Millions of yen)
Fiscal year ended
December 31, 2014
Unappropriated retained earnings
Total appropriation for dividends (use of negative goodwill)
5,776
9,296
240
60
Loss on retirement of noncurrent assets
25
Financial costs in accordance with early

repayment
71
35
Adjustment for dilution (Note)
164
6,015
9,354
(Units)
2,791,281
3,144,227
(Yen)
2,155
2,975
Total dividends
Number of investment units issued and outstanding
Dividend per unit
(Note)
Fiscal year ended

December 31, 2015
This is to respond to the dilution of dividend per unit which occurred as a result of the issuance of new investment units
during the fiscal periods ended December 31, 2014.
<Reference 4>
Balance of reserve for dividends (negative goodwill)
The following shows the balance of reserve for dividends (negative goodwill) after the appropriation for
dividends as of December 31, 2015.
(Millions of yen)
14,168
(240)
Balance of reserve for dividends as of December 31, 2014

Appropriation for dividends for the fiscal year ended December 31, 2014
Balance of reserve for dividends after appropriation for dividends as of December 31, 2014
Appropriation for dividends for the fiscal year ended December 31, 2015
13,928
(60)
Balance of reserve for dividends after appropriation for dividends as of December 31, 2015
13,867
Overview of JHR
1. Unitholders capital
Account closing date
Total number of authorized units
(Units)
Total number of units issued
(Units)
Unitholders capital
(Millions of yen)
Number of unitholders
(Note)
(Persons)
12th period
13th period
14th period
15th period
16th period
As of
March 31, 2012
As of
December 31, 2012
As of
December 31, 2013
As of
December 31, 2014
As of
December 31, 2015
2,000,000
20,000,000
20,000,000
20,000,000
20,000,000
58,031
2,111,281
2,621,281
2,791,281
3,144,227
23,161
28,260
48,845
59,024
85,470
5,728
13,630
17,073
22,866
25,182
The total number of authorized units changed from 2 million units to 20 million units on the effective date of the merger
based on the resolution of the 5th General Meeting of Unitholders of JHR held on February 24, 2012.
21
2. Matters regarding investment units

Major unitholders of JHR as of December 31, 2015 were as follows:
Number of units held
(Units)
Name
Percentage (Note)
(%)
Japan Trustee Services Bank, Ltd. (Trust Account)
540,062
17.17%
The Master Trust Bank of Japan, Ltd. (Trust Account)
417,042
13.26%
Trust & Custody Services Bank, Ltd. (Securities Investment Trust

Account)
330,953
10.52%
Nomura Bank (Luxembourg) S.A.
128,733
4.09%
The Nomura Trust and Banking Co., Ltd. (Investment Trust Account)
120,438
3.83%
Shikoku Railway Company
58,311
1.85%
NORTHERN TRUST CO. (AVFC) RE IEDU UCITS CLIENTS NON

LENDING 15 PCT TREATY ACCOUNT
57,436
1.82%
STATE STREET BANK AND TRUST COMPANY 505001
50,662
1.61%
NOMURA PB NOMINEES TK1 LIMITED
38,269
1.21%
NOMURA PB NOMINEES LIMITED OMNIBUS-MARGIN

(CASHPB)
37,699
1.19%
1,779,605
56.59%
Total
(Note)
The percentage indicates the ratio of the number of units held to the number of units issued and outstanding, rounded down
to the two decimal places.
3. Matters regarding officers, etc.

(1) Officers, etc. as of December 31, 2015 were as follows:
Total amount of remuneration for
each position during the
corresponding fiscal period
(Thousands of yen)
Name
Major concurrent post outside

JHR
Executive Director
Kaname Masuda (Note 1) (Note 2)
Representative Partner, Masuda &

Partners Law Office
Supervisory Director
Hiroshi Matsuzawa (Note 2)
2,500
Tetsuya Mishiku (Note 2)
Representative Attorney, Mishiku

& Nagamachi Law Office
2,500
Hiroto Kashii (Note1) (Note 2)
500
Independent auditor
KPMG AZSA LLC (Note 3)
28,100
Position
(Note 1)
(Note 2)
(Note 3)
(Note 4)
900
Based on the resolutions made at the 7th General Meeting of Unitholders held on November 26, 2015, Yukio Isa
resigned from office of Executive Director as of the date, and Kaname Masuda newly took office of Executive Director
of JHR. In addition, Hiroto Kashii newly took office as Supervisory Director of JHR. Furthermore, the total
compensation paid to Yukio Isa, who had resigned, for his assignment as Executive Director during the fiscal year
under review was 4,400 thousand.
None of the Executive Director and the Supervisory Directors own investment units of JHR in their own name or
another persons name. Moreover, although the Supervisory Directors may be officers in corporations other than those
listed above, there are no conflicts of interest between those corporations including those listed above and JHR.
Remuneration for the independent auditor includes fees for services other than those stipulated in Article 2, paragraph 1
of the Certified Public Accountants Act amounting to 7,600 thousand, such as preparation of comfort letters and
research reports based on agreed-upon procedures performed for the capital increase through the public offerings on
January 27, 2015 and June 22, 2015, respectively, and the issuance of investment corporation bonds on October 23,
2015.
In case the number of Executive Director does not meet the requirement stipulated by laws and regulations, Hisashi
Furukawa, Representative Director of the Asset Management Company, was elected as Substitute Executive Director,
based on the resolution made by the 7th General Meeting of Unitholders of JHR held on November 26, 2015.
(2) Policy for decisions on dismissal or non-reappointment of independent auditor

We have a policy to determine, at a General Meeting of Unitholders, whether to dismiss the independent
auditor pursuant to provisions of the Investment Trusts Act, and to determine whether or not to reappoint the
22
independent auditor taking into comprehensive consideration the audit quality, audit fees and other various
matters.
4. Asset management company, custodian and general administrators

The asset management company, etc. as of December 31, 2015 were as follows:
Consignment classification
Name
Asset management company
Japan Hotel REIT Advisors Co., Ltd.
Custodian
Sumitomo Mitsui Trust Bank, Limited
General administrator (administration of the unitholders

registry, book keeping, tax payments, organizational operations,
etc., and administration of the special account management
agency)
General administrator (administration regarding investment
corporation bonds)
Sumitomo Mitsui Banking Corporation

Mizuho Bank, Ltd.
General administrator (tax return preparation, etc.)
PwC Tax Japan
23
Status of Investment Assets

1. Composition of assets
15th period
(As of December 31, 2014)
Type of assets
Business
category
(Note 1)
Prefectural
location
Total amount of
assets held
(Millions of
yen)
Name of property, etc.
16th period
Ratio to total
assets (%)
(Note 3)
(Note 2)
ibis Tokyo Shinjuku

the b ikebukuro
7,386
3.9
7,487
3.1
6,591
2.7
6,295
2.6
Hotel Sunroute Shinbashi
4,893
2.6
4,873
2.0
Comfort Hotel Tokyo Higashi

Nihombashi
3,689
2.0
3,655
1.5
the b hachioji
2,670
1.1
the b ochanomizu
2,350
1.0
2,056
1.1
2,056
0.9
R&B Hotel Ueno Hirokoji
1,760
0.9
1,761
0.7
R&B Hotel Higashi Nihonbashi
1,516
0.8
1,528
0.6
Hotel Vista Kamata Tokyo
1,467
0.8
1,473
0.6
the b suidobashi (Note 4)
1,065
0.6
1,204
0.5
Dormy Inn EXPRESS Asakusa
974
0.5
963
0.4
Chisun Inn Kamata
810
0.4
802
0.3
14,746
7.8
14,689
6.1
ibis Styles Sapporo
6,849
3.6
6,788
2.8
Mercure Sapporo
6,079
3.2
6,010
2.5
ibis Styles Kyoto Station
6,743
3.6
6,725
2.8
2,323
1.0
Hakata Nakasu Washington Hotel

Plaza
2,072
1.1
2,075
0.9
Toyoko Inn Hakata-guchi Ekimae
1,520
0.8
1,498
0.6
2,994
1.6
2,953
1.2
Kumamoto Dormy Inn Kumamoto
2,268
1.2
2,232
0.9
Nara
Nara Washington Hotel Plaza
1,949
1.0
1,910
0.8
Niigata
Hotel Sunroute Niigata
1,967
1.0
Akita
Daiwa Roynet Hotel Akita
1,672
0.9
799
0.4
Subtotal
75,284
40.0
90,924
37.8
Oriental Hotel tokyo bay
Osaka
Hokkaido
Kyoto
the b hakata
Fukuoka
Okinawa
Yamaguchi Comfort Hotel Shin-Yamaguchi
Chiba
Hiroshima
18,800
10.0
18,512
7.7
Hotel Francs
3,165
1.3
ACTIVE-INTER CITY
HIROSHIMA (Sheraton Hiroshima
Hotel) (Note 5)
17,934
7.5
4,026
2.1
4,043
1.7
10,171
5.4
9,963
4.1
1,659
0.7
Subtotal
32,999
17.5
55,277
23.0
Hilton Tokyo Bay
26,189
13.9
26,109
10.9
Hotel Nikko Alivila
18,475
9.8
18,325
7.6
15,025
6.3
Oriental Hotel Hiroshima

Hyogo
Kobe Meriken Park Oriental Hotel
Kanagawa
Mercure Yokosuka
Chiba
Resort hotel
(Note 3)
(Note 2)
Limitedservice hotel
Full-service
hotel
Ratio to total
assets (%)
Smile Hotel Nihombashi

Mitsukoshimae
Tokyo
Real estate in
trust
Total amount of
assets held
(Millions of
yen)
Okinawa
Okinawa Marriott Resort & Spa

The Beach Tower Okinawa
6,953
3.7
6,882
2.9
Osaka
Hotel Keihan Universal City
6,085
3.2
6,019
2.5
Kanagawa
Hakone Setsugetsuka
3,848
2.0
3,788
1.6
Subtotal
61,553
32.7
76,150
31.7
Real estate in trust Total
169,837
90.3
222,352
92.5
24
15th period
Type of assets
Business
category
(Note 1)
Prefectural
location
Total amount of
assets held
(Millions of
yen)
Ratio to total
assets (%)
(Note 3)
(Note 2)
Equity interest in silent partnership (Note 6)
(Note 1)
(Note 2)
(Note 3)
(Note 4)
(Note 5)
(Note 6)
(Note 7)
16th period
Total amount of
assets held
(Millions of
yen)
Ratio to total
assets (%)
(Note 3)
(Note 2)
602
0.3
Deposits and other assets (Note 7)
17,651
9.4
18,003
7.5
Total assets
188,091
100.0
240,356
100.0
Hotels are categorized as limited-service hotels, full-service hotels or resort hotels according to the manner of operation.
For real estate in trust, Total amount of assets held shows the amount calculated by deducting accumulated depreciation
from acquisition price (including expenses incidental to acquisition).
Ratio to total assets shows the ratio of each asset held to total assets, rounded off to one decimal place.
Dormy Inn Suidobashi terminated operations as a hotel on March 31, 2015. Furthermore, with the completion of the
refurbishment work conducted in accordance with the rebranding of the hotel, it started operations as a hotel under the
name of the b suidobashi. In this report, the same shall apply hereinafter.
ACTIVE-INTER CITY HIROSHIMA is classified in accordance with the business category of Sheraton Hiroshima Hotel,
its main facility.
Represents the equity interest in silent partnership with G.K. Tourism Japan No. 1 as business operator.
Includes machinery and installation, furniture, fixtures and equipment, construction in progress, construction in progress
in trust, and intangible assets (excluding leasehold rights).
25
2. Major portfolio assets

An overview of the portfolio assets of JHR (36 properties in total) as of December 31, 2015 was as follows.
Property
No.
Book value
(Millions of
yen)
Leasable area
(m2)
Leased area
(m2)
(Note 2)
(Note 3)
(Note 1)
Kobe Meriken Park Oriental Hotel

(Note 5)
10,120
32,663.90
Tenant
occupancy
ratio
(%)
Ratio of rental
revenue to total
rental revenue
(%)
Major
use
(Note 4)
32,663.90
100.0
6.5
Hotel
18,698
44,833.11
44,833.11
100.0
10.2
Hotel
14,775
19,364.33
19,364.33
100.0
7.5
Hotel
Hotel Nikko Alivila (Note 6)
18,556
38,024.98
38,024.98
100.0
9.4
Hotel
4,078
13,752.22
13,752.22
100.0
2.5
Hotel
ibis Tokyo Shinjuku
7,559
6,801.84
6,801.84
100.0
3.8
Hotel
The Beach Tower Okinawa (Note 7)
6,882
20,140.01
20,140.01
100.0
3.0
Hotel
Hakone Setsugetsuka (Note 8)
3,797
10,655.03
10,655.03
100.0
1.7
Hotel
10
Dormy Inn Kumamoto (Note 8)
2,232
7,701.19
7,701.19
100.0
1.1
Hotel
12
the b suidobashi
1,230
3,097.25
3,097.25
100.0
0.6
Hotel
13
963
2,014.90
2,014.90
100.0
0.4
Hotel
14
Hakata Nakasu Washington Hotel Plaza
2,076
5,602.04
5,602.04
100.0
1.4
Hotel
15
1,916
5,271.54
5,271.54
100.0
0.9
Hotel
16
1,761
3,060.31
3,060.31
100.0
0.6
Hotel
17
R&B Hotel Higashi Nihonbashi
1,528
3,800.77
3,800.77
100.0
0.7
Hotel
18
Comfort Hotel Tokyo Higashi Nihombashi
3,655
5,765.27
5,765.27
100.0
1.6
Hotel
22
Smile Hotel Nihombashi Mitsukoshimae
3,167.82
3,167.82
100.0
0.9
Hotel
100.0
0.8
Hotel
(Note 8)
2,056
Main building: Main building:

3,581.66
3,581.66
Annex:
Annex:
868.36
868.36
24
Toyoko Inn Hakata-guchi Ekimae
1,498
25
1,473
3,831.80
3,831.80
100.0
0.7
Hotel
26
Chisun Inn Kamata
806
1,499.87
1,499.87
100.0
0.4
Hotel
29
Hotel Keihan Universal City (Note 9)
6,020
16,212.40
16,212.40
100.0
4.7
Hotel
30
4,873
5,246.66
5,246.66
100.0
2.2
Hotel
31
Hilton Tokyo Bay (Note 10)
26,109
64,931.94
64,931.94
100.0
11.5
Hotel
32
ibis Styles Kyoto Station (Note 8)
6,752
5,003.99
5,003.99
100.0
2.8
Hotel
33
ibis Styles Sapporo (Note 8)
6,802
14,992.49
14,896.40
99.4
3.4
Hotel
34
Mercure Sapporo
6,023
15,189.42
14,802.96
97.5
3.8
Hotel
35
Mercure Okinawa Naha (Note 8)
2,971
10,884.25
10,884.25
100.0
2.3
Hotel
36
the b akasaka-mitsuke (Note 11)
6,313
2,867.04
2,867.04
100.0
1.5
Hotel
37
the b ikebukuro (Note 8) (Note 11)
6,599
5,650.01
5,650.01
100.0
1.9
Hotel
38
the b ochanomizu (Note 11)
2,357
1,742.23
1,742.23
100.0
0.6
Hotel
39
the b hachioji (Note 11)
2,687
7,847.65
7,847.65
100.0
1.2
Hotel
40
the b hakata (Note 11)
2,349
3,986.09
3,847.92
96.5
0.9
Hotel
41
Hotel Francs
3,165
19,213.39
19,213.39
100.0
1.3
Hotel
42
Mercure Yokosuka (Note 12)
1,668
16,881.82
16,881.82
100.0
0.9
Hotel
43
Okinawa Marriott Resort & Spa (Note 8)
15,062
36,430.15
36,430.15
100.0
4.2
Hotel
44
ACTIVE-INTER CITY HIROSHIMA

(Note 8) (Note 13)
17,943
31,181.05
31,181.05
100.0
0.2
Hotel
223,372
493,758.78
493,138.06
99.9
98.3
Total
(Note 1)
(Note 2)
(Note 3)
Book value includes real estate in trust, machinery and installation, furniture, fixtures and equipment, construction in
progress, construction in progress in trust, and intangible assets.
In principle, leasable area represents leasable area of the building, which does not include leasable area of land
(including parking lots on ground), based on a lease contract or plan for each real estate in trust. For properties in
which the leased area is not described in the lease contract, leasable area represents the area described in the
registration of the building. Furthermore, when the leasable area in the lease contract is indicated in tsubo units, the
figure in the table has been converted to the area in metric units (3.30578 square meters per one tsubo).
In principle, leased area represents the leased area described in the lease contract of the building. For properties in
26
(Note 4)
(Note 5)
(Note 6)
(Note 7)
(Note 8)
(Note 9)
(Note 10)
(Note 11)
(Note 12)
(Note 13)
(Note 14)
which the leased area is not described in the lease contract, leased area shows the area described in the registration of
the building. Furthermore, when the leased area in the lease contract is indicated in tsubo units, the figure in the table
has been converted to the area in metric units (3.30578 square meters per one tsubo). However, for properties for which
master lease companies have concluded lease contracts with lessees, etc. under the pass-through scheme in which JHR
receives the same amount of rents, etc. from rents, from end tenants as is in principle, the total area for which lease
contracts have been concluded with end tenants and which are actually leased is indicated. In this report, the same shall
apply hereinafter.
Represents the ratio of rental revenue to total real estate operating revenue for the fiscal period under review. In
calculating, the figures are rounded off to one decimal place. Furthermore, because the ratios of rental revenue to total
rental revenue for Comfort Hotel Shin-Yamaguchi, Daiwa Roynet Hotel Akita and Hotel Sunroute Niigata, which were
transferred in the fiscal period under review, are not included, the sum total of the ratio of rental revenue to total rental
revenue stands at 98.3%.
Kobe Meriken Park Oriental Hotel is a building owned in the form of a condominium ownership by two owners (JHR
and Kobe City). The area in this table shows the portion owned exclusively by JHR (including an accessory building of
764.83 square meters). With regard to the portion of the building owned exclusively by Kobe City, the area rented by
JHR from Kobe City with permission for use under Kobe Citys ordinance for harbor facilities, etc. is 694.00 square
meters and excluded from the above area of 32,663.90 square meters.
Leasable area and leased area for Hotel Nikko Alivila include an accessory building of 120.10 square meters and
exclude a building of 493.50 square meters rented by JHR from Kabushiki Kaisha Okinawa Umi No Sono.
Leasable area and leased area for The Beach Tower Okinawa include the floor area of a warehouse in a two-story
light-gauge steel annex building (91.20 square meters).
Leasable area and leased area for Hakone Setsugetsuka, Dormy Inn Kumamoto, Comfort Hotel Tokyo Higashi
Nihombashi, ibis Styles Kyoto Station, ibis Styles Sapporo, Mercure Okinawa Naha, the b ikebukuro, Okinawa
Marriott Resort & Spa and ACTIVE-INTER CITY HIROSHIMA include accessory buildings.
The building of Hotel Keihan Universal City is a building with condominium ownership for Universal CityWalk Osaka,
which comprises two hotel buildings, business facilities, commercial facilities and others, as a single building. For the
leasable area and leased area of the property, the leased area under the lease contract of the hotel is indicated.
The building of Hilton Tokyo Bay is co-owned with other right holders, and JHR owns co-ownership interest for
64,931.94 square meters (JHR owns 9/10 of co-ownership interest).
The b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata are properties with
pass-through master lease contracts in which JHR receives the same amount of rents, etc. from rents, from end tenants
as is in principle. In this report, the same shall apply hereinafter.
The building of Mercure Yokosuka is a building with condominium ownership for Bay Square Yokosuka Ichibankan,
which comprises a hotel, a theater, stores, apartments, office spaces and parking lots, as a single building. For the
leasable area and leased area of the property, the leased area under the lease contract of the hotel is indicated.
The building of ACTIVE-INTER CITY HIROSHIMA is a building with condominium ownership for ACTIVE-INTER
CITY HIROSHIMA, which comprises Sheraton Hiroshima Hotel, office spaces, stores, parking lots and bicycle
parking lots etc., as a single building. For the leasable area and leased area of the property, the leased area under the
lease contract of the hotel, office spaces and stores is indicated.
The omitted numbers are the property numbers of assets that have been transferred.
27
3. Details of property assets, etc.

(1) Details of property assets
The details of real estate properties, etc. held by JHR as of December 31, 2015 were as follows:
Property
No.
Location (Displayed address)
Assessed
value at end
Form of ownership of period
(Millions of
yen)
Book value
(Millions of
yen)
(Note 2)
Appraisal
agency
(Note 3)
(Note 1)
Kobe Meriken Park Oriental

Hotel
5-6 Hatobacho, Chuo-ku, Kobe-shi, Hyogo
Beneficial interest
in trust
13,300
10,120
8-2 Mihama 1-chome, Urayasu-shi, Chiba
Beneficial interest
in trust
32,600
18,698
8-17 Sennichimae 2-chome, Chuo-ku,

Osaka-shi, Osaka
Beneficial interest
in trust
27,000
14,775
Hotel Nikko Alivila
600 Aza Gima, Yomitan-son,

Nakagami-gun, Okinawa
Beneficial interest
in trust
25,400
18,556
6-10 Tanakamachi, Naka-ku,

Hiroshima-shi, Hiroshima
Beneficial interest
in trust
4,180
4,078
ibis Tokyo Shinjuku
10-5 Nishi-Shinjuku 7-chome, Shinjuku-ku, Beneficial interest

Tokyo
in trust
8,830
7,559
8-6 Aza Mihama, Chatan-cho,

Nakagami-gun, Okinawa
Beneficial interest
in trust
9,070
6,882

(Note 4)
Hakone Setsugetsuka
1300 Goura, Hakone-machi,

Ashigarashimo-gun, Kanagawa
Beneficial interest
in trust
4,730
3,797
10
Dormy Inn Kumamoto
3-1 Karashimacho, Kumamoto-shi,

Kumamoto
Beneficial interest
in trust
2,950
2,232
12
the b suidobashi
25-27 Hongo 1-chome, Bunkyo-ku, Tokyo
Beneficial interest
in trust
1,750
1,230
13
Dormy Inn EXPRESS Asakusa 3-4 Hanakawado 1-chome, Taito-ku, Tokyo
Beneficial interest
in trust
1,220
963
14
Hakata Nakasu Washington

Hotel Plaza
8-28 Nakasu 2-chome, Hakata-ku,

Fukuoka-shi, Fukuoka
Beneficial interest
in trust
3,680
2,076
15
31-1 Shimosanjo-cho, Nara-shi, Nara
Beneficial interest
in trust
2,330
1,916
16
18-8 Ueno 1-chome, Taito-ku, Tokyo
Beneficial interest
in trust
1,810
1,761
17
R&B Hotel Higashi

Nihonbashi
15-6 Higashi-Nihonbashi 2-chome,

Chuo-ku, Tokyo
Beneficial interest
in trust
1,960
1,528
18

Nihombashi
10-11 Nihonbashi-bakurocho 1-chome,

Chuo-ku, Tokyo
Beneficial interest
in trust
5,110
3,655
22

Mitsukoshimae
4-14 Nihonbashi-Honcho 1-chome,

Chuo-ku, Tokyo
Beneficial interest
in trust
2,850
2,056
24
Toyoko Inn Hakata-guchi

Ekimae
Main building: 15-5 Hakataekimae

1-chome, Hakata-ku, Fukuoka-shi, Fukuoka Beneficial interest
Annex: 1-15 Hakataekimae 1-chome,
in trust
Hakata-ku, Fukuoka-shi, Fukuoka
2,490
1,498
25
20-11 Nishikamata 8-chome, Ota-ku, Tokyo
Beneficial interest
in trust
1,870
1,473
26
Chisun Inn Kamata
23-13 Kamata 4-chome, Ota-ku, Tokyo
Beneficial interest
in trust
1,270
806
29
2-78 Shimaya 6-chome, Konohana-ku,

Osaka-shi, Osaka
Beneficial interest
in trust
13,600
6,020
30
10-2 Shinbashi 4-chome, Minato-ku, Tokyo
Beneficial interest
in trust
7,420
4,873
31
Hilton Tokyo Bay
1-33 Maihama, Urayasu-shi, Chiba
Beneficial interest
in trust
34,400
26,109
32
47-1, 47-2 Higashikujo Kamitonodacho,

Minami-ku, Kyoto-shi, Kyoto
Beneficial interest
in trust
8,590
6,752
33
ibis Styles Sapporo
10-10 Minami 8-jo Nishi 3 chome, Chuo-ku,

Sapporo-shi, Hokkaido
Beneficial interest
in trust
7,940
6,802
34
Mercure Sapporo
2-4 Minami 4-jo Nishi 2-chome, Chuo-ku,

Sapporo-shi, Hokkaido
Beneficial interest
in trust
7,840
6,023
28
Property
No.
Location (Displayed address)
Assessed
value at end
of period
Form of ownership
(Millions of
yen)
Book value
(Millions of
yen)
(Note 2)
Appraisal
agency
(Note 3)
(Note 1)
35
3-19 Tsubogawa 3-chome, Naha-shi,

Okinawa
Beneficial interest
in trust
5,730
2,971
36
21-7 Akasaka 3-chome, Minato-ku, Tokyo
Beneficial interest
in trust
6,730
6,313
37
the b ikebukuro
39-4 Higashi-ikebukuro 1-chome,

Toshima-ku, Tokyo
Beneficial interest
in trust
7,040
6,599
38
the b ochanomizu
7-5 Kanda-awajicho 1-chome, Chiyoda-ku, Beneficial interest

Tokyo
in trust
2,540
2,357
39
the b hachioji
6-12 Myojincho 4-chome, Hachioji-shi,

Tokyo
Beneficial interest
in trust
2,920
2,687
40
the b hakata
3-9 Hakata-eki Minami 1-chome,

Hakata-ku, Fukuoka-shi, Fukuoka
Beneficial interest
in trust
2,700
2,349
41
Hotel Francs
10-2 Hibino 2-chome, Mihama-ku,

Chiba-shi, Chiba
Beneficial interest
in trust
3,900
3,165
42
Mercure Yokosuka
27 Honcho 3-chome, Yokosuka-shi,

Kanagawa
Beneficial interest
in trust
1,760
1,668
43
Okinawa Marriott Resort &

Spa
1490-1, Kise, Nago-shi, Okinawa
Beneficial interest
in trust
16,700
15,062
44
ACTIVE-INTER CITY
HIROSHIMA
12-1 Wakakusa-cho, Higashi-ku,

Hiroshima-shi, Hiroshima
Beneficial interest
in trust
17,900
17,943
302,110
223,372
Total
(Note 1)
(Note 2)
(Note 3)
(Note 4)
(Note 5)
Assessed value at end of period shows appraisal value as of the end of the fiscal period under review as the date of
valuation, in accordance with JHRs Articles of Incorporation, the Ordinance on Accounting of Investment
Corporations (Cabinet Office Ordinance No. 47 of 2006) and regulations set forth by The Investment Trusts
Association, Japan.
Book value includes amounts of real estate in trust, machinery and installation, furniture, fixtures and equipment,
construction in progress in trust, and intangible assets.
The letters indicate the appraisers for the properties as follows:
M: Morii Appraisal & Investment Consulting, Inc.
T:
The Tanizawa Sg Appraisal Co., Ltd.
J:
Japan Real Estate Institute
R:
Rich Appraisal Institute co.,Ltd.
D:
DAIWA REAL ESTATE APPRAISAL CO.,LTD.
Due to the lack of a displayed address, location in the registration or registration record is shown.
The omitted numbers are the property numbers of assets that have been transferred.
29
(2) Transition of real estate leasing business, etc.

An overview of leasing business of real estate, etc. owned by JHR is as follows:
15th period
(From January 1, 2014 to December 31, 2014)
Property
No.
Number of
tenants
at end of
period
(Note 1)
Real estate
Tenant
operating
occupancy
revenue
rate
during the
at end of
period
period
(Millions of
(%)
yen)
Ratio to
total real
estate
operating
revenue
(%)
16th period
Number of
tenants
at end of
period
(Note 1)
Real estate
Tenant
operating
occupancy
revenue
rate
during the
at end of
period
period
(Millions of
(%)
yen)
Ratio to
total real
estate
operating
revenue
(%)

Hotel
100.0
1,085
8.5
100.0
1,110
6.5
100.0
1,633
12.8
100.0
1,732
10.2
100.0
1,065
8.3
100.0
1,279
7.5
Hotel Nikko Alivila
100.0
1,406
11.0
100.0
1,604
9.4
100.0
438
3.4
100.0
421
2.5
ibis Tokyo Shinjuku
100.0
625
4.9
100.0
645
3.8
100.0
511
4.0
100.0
511
3.0
Hakone Setsugetsuka
100.0
294
2.3
100.0
294
1.7
10
Dormy Inn Kumamoto
100.0
194
1.5
100.0
194
1.1
11
Dormy Inn Namba (Note 2)
0.0
12
the b suidobashi
100.0
84
0.7
100.0
95
0.6
13
100.0
63
0.5
100.0
63
0.4
14
Hakata Nakasu Washington

Hotel Plaza
100.0
240
1.9
100.0
240
1.4
15
100.0
151
1.2
100.0
151
0.9
16
100.0
100
0.8
100.0
99
0.6
17
R&B Hotel Higashi

Nihonbashi
100.0
122
1.0
100.0
122
0.7
18

Nihombashi
100.0
270
2.1
100.0
270
1.6
19
Comfort Hotel
Shin-Yamaguchi
100.0
60
0.5
50
0.3
100.0
138
1.1
114
0.7
21
(Note 3)

(Note 3)
22

Mitsukoshimae
100.0
134
1.1
100.0
150
0.9
23
Hotel Sunroute Niigata (Note 3)
100.0
156
1.2
129
0.8
24
Toyoko Inn Hakata-guchi

Ekimae
100.0
141
1.1
100.0
141
0.8
25
100.0
98
0.8
100.0
113
0.7
26
Chisun Inn Kamata
100.0
62
0.5
100.0
70
0.4
29
100.0
560
4.4
100.0
796
4.7
30
100.0
367
2.9
100.0
379
2.2
31
Hilton Tokyo Bay
100.0
1,897
14.9
100.0
1,953
11.5
32
100.0
408
3.2
100.0
483
2.8
33
ibis Styles Sapporo
99.4
241
1.9
99.4
573
3.4
34
Mercure Sapporo
14
98.1
123
1.0
13
97.5
651
3.8
35
100.0
77
0.6
100.0
392
2.3
36
the b akasaka-mitsuke (Note 4)
100.0
262
1.5
37
the b ikebukuro (Note 4)
100.0
330
1.9
38
the b ochanomizu (Note 4)
100.0
105
0.6
39
the b hachioji (Note 4)
13
100.0
200
1.2
40
the b hakata (Note 4)
96.5
154
0.9
41
Hotel Francs (Note 5)
100.0
229
1.3
42
Mercure Yokosuka (Note 6)
100.0
154
0.9
43
100.0
722
4.2
30
15th period
Property
No.
Number of
tenants
at end of
period
(Note 1)
Real estate
Tenant
operating
occupancy
revenue
rate
during the
at end of
period
period
(Millions of
(%)
yen)
16th period
Ratio to
total real
estate
operating
revenue
(%)
Number of
tenants
at end of
period
(Note 1)
Real estate
Tenant
operating
occupancy
revenue
rate
during the
at end of
period
period
(Millions of
(%)
yen)
Ratio to
total real
estate
operating
revenue
(%)
Spa (Note 7)
44
ACTIVE-INTER CITY
HIROSHIMA (Note 8)
Total
37
100.0
34
0.2
57
99.9
12,760
100.0
113
99.9
17,033
100.0
(Note 1)
Number of tenants indicates the total number of tenants based on the lease contracts for respective real estate in trust
(excluding tenants of parking lots, etc.) as of the end of each fiscal period. However, for properties for which master
lease companies have concluded lease contracts with lessees, etc. under the pass-through scheme in which JHR receives
the same amount of rents, etc. from rents, etc. from end tenants as is in principle, the number of end tenants is indicated.
For properties with sub-lease-type master lease contracts in which JHR receives predetermined rents despite fluctuations
in rents from end tenants, the number of the master lease companies is indicated as tenants.
(Note 2)
Dormy Inn Namba was transferred as of January 24, 2014.
(Note 3) Comfort Hotel Shin-Yamaguchi, Daiwa Roynet Hotel Akita and Hotel Sunroute Niigata were transferred as of October
30, 2015.
(Note 4)
The b akasaka-mitsuke, the b ikebukuro, the b ochanomizu, the b hachioji and the b hakata were acquired as of January
30, 2015.
(Note 5)
Hotel Francs was acquired as of March 31, 2015.
(Note 6)
Mercure Yokosuka was acquired as of April 2, 2015
(Note 7)
Okinawa Marriott Resort & Spa was acquired as of July 10, 2015.
(Note 8)
ACTIVE-INTER CITY HIROSHIMA was acquired as of December 18, 2015.
(Note 9)
The property numbers of assets that were transferred before the previous fiscal period are intentionally omitted.
4. Details of securities assets

There are no applicable securities held by JHR as of December 31, 2015.
5. Contractual amounts and fair values of specified transactions
The contractual amounts and fair values of specified transactions as of December 31, 2015 were as follows:
Classification
Amounts of contract, etc.

(Millions of yen) (Note 1)
Transaction
Over 1 year
Transactions other than
market transactions
Interest rate swap transactions

Payable fixed rate / Receivable floating rate
Interest rate cap transactions
Total
(Note 1)
(Note 2)
70,375
64,822
9,413
5,134
79,789
69,957
Fair value
(Millions of yen)
(Note 2)
(533)
1
(532)
Contractual amounts, etc. of interest rate swap transactions and interest rate cap transactions are based on notional
principal amounts, etc.
Fair value is based on the price, etc. provided by counterparty financial institutions.
6. Other assets
All of the beneficial interest in trust mainly invested in real estate and held by JHR is included in 3. Details of
property assets, etc. presented above. There were no other major specified assets that are considered to be
JHRs main investments in the portfolio of JHR as of December 31, 2015.
7. Asset holdings by country and region
There is nothing to be reported on countries and regions other than Japan.
31
Capital Expenditures for Portfolio Properties

1. Planned capital expenditures (Note)
The following table shows major estimated capital expenditures for renovation work planned as of the end of the
fiscal period under review for investment real estate properties held by JHR. Expenditures are expected to total
2,582 million, which consists of capital expenditures of 2,532 million and repair expenses of 49 million, for
the following fiscal period.
(Location)
Purpose
Scheduled period
Estimated construction costs

(Millions of yen)
Total amount
Payment for
the period
Total amount
paid

Hotel
(Kobe-shi, Hyogo)
Renewal of guest rooms on

the 7th floor
From January 2016

to March 2016
50

Hotel
(Kobe-shi, Hyogo)
Renovation of guest room

balconies
From January 2016

to April 2016
62

Hotel
(Kobe-shi, Hyogo)
Renewal of sky lounge

Kous and renovation of
elevator halls and pathways
on the 14th floor
From June 2016 to

July 2016
80

(Urayasu-shi, Chiba)

the 4th floor
From January 2016

to February 2016
102

(Osaka-shi, Osaka)

the 9th floor
From January 2016

to February 2016
91
Hotel Nikko Alivila

(Yomitan-son, Nakagami-gun, the 9th floor
Okinawa)
From May 2016 to

June 2016
55
ibis Tokyo Shinjuku

(Shinjuku-ku, Tokyo)
Replacement of piping
From May 2016 to

July 2016
83
ibis Tokyo Shinjuku

Replacement of interior
fittings and furniture and
prefabricated bathrooms in
guest rooms on the 3rd
through 10th floors
From May 2016 to

July 2016
164
Hilton Tokyo Bay

Replacement of emergency
power generator
From February
2016 to April 2016
60
Hilton Tokyo Bay

Renewal of disaster
prevention facilities
From January 2016

to July 2016
92

Spa
(Nago-shi, Okinawa)
Renewal of hotel operation

systems
From November
2015 to March 2016
55
895
Total
(Note)
For new construction and renewal work, estimated construction costs include those for buildings, annexed installation, etc.
as well as items classified as furniture and fixtures. The scheduled period of the above planned repair work and whether or
not the repair work will be performed may change.
2. Capital expenditures during the period (Note)

For investment real estate properties held by JHR, major construction work conducted during the fiscal period
under review that represents capital expenditures is as below. Capital expenditures for the fiscal period under
32
review totaled 1,811 million, and repair expenses that were accounted for as expense in the fiscal period under
review totaled 65 million. In aggregate, 1,876 million of construction work was carried out.
Name of property, etc. (Location)
Purpose
Construction costs
(Millions of yen)
Period
the b suidobashi
(Bunkyo-ku, Tokyo)
Replacement of air conditioning units
From April 2015 to June

2015
55
the b suidobashi
(Bunkyo-ku, Tokyo)
Renewal in association with re-branding
From April 2015 to June

2015
60
ibis Tokyo Shinjuku

Replacement of interior fittings and

furniture and prefabricated bathrooms in
guest rooms on the 4th through 10th
floors
From September 2015 to

November 2015
91
207
Total
(Note)
For new construction and renewal work, construction costs include those for buildings, annexed installation, etc. as well
as items classified as furniture and fixtures.
3. Cash reserves for the long-term repairs and maintenance plan (reserve for repairs and maintenance)
JHR accumulates cash reserves from cash flows for each period as detailed below to utilize for medium- to
long-term future expenditures on large-scale repairs and maintenance projects based on long-term repairs and
maintenance plans prepared for each property.
(Millions of yen)
Fiscal period
Balance at beginning of period
12th period
13th period
14th period
15th period
16th period
(From October 1, 2011

to March 31, 2012)
(From April 1, 2012




369
409
307
454
493
Provision during the period
90
(Note) 286
184
46
185
Reversal during the period
50
388
37
20
409
307
454
493
657
Amount carried forward

(Note)
Figures in the above table include amounts assumed from the former JHR as a result of the merger.
33
Expenses and Liabilities

1. Details of expenses related to asset management, etc.
(Thousands of yen)
15th period
(From January 1, 2014 to
December 31, 2014)
(a) Asset management fees
(Note 1)
809,152
16th period
(From January 1, 2015 to
December 31, 2015)
(Note 2)
1,045,925
(b) Asset custody fees
14,134
17,633
(c) Administrative service fees
71,703
89,541
9,600
10,800
(d) Officers compensation

(e) Other operating expenses
Total
147,060
188,480
1,051,650
1,352,381
(Note 1) For asset management fees for the 15th fiscal period, besides the above amounts, there are 110,977 thousand of fees
included in the acquisition price of investment properties, etc. in acquiring the properties and 3,500 thousand included
in gain or loss on sale of real estate from property transfer.
(Note 2) For asset management fees for the 16th fiscal period, besides the above amounts, there are 427,690 thousand of fees
included in the acquisition price of investment properties, etc. in acquiring the properties and 24,450 thousand included
in gain or loss on sale of real estate from property transfer.
34
2. Loans Payable
The status of loans by contractual agreement and by financial institution as of December 31, 2015 was as
follows:
Category
Lender
Sumitomo Mitsui Banking

Corporation
Shinsei Bank, Limited
Borrowing
date
Balance at Balance at
Average
beginning of end of
interest
period
period
rate (%)
(Millions of (Millions
(Note 1)
yen)
of yen)
4,000
2,250
2,250
500
Subtotal
9,000
Short-term loans payable Total (Note 2)
9,000
2,560
2,219
4,779
2,945
2,576
Short-term Mizuho Bank, Ltd.

loans
payable The Hiroshima Bank, Ltd.
December 18,
2015

Corporation
February 15,
2011
Mizuho Bank, Ltd.

The Norinchukin Bank
Subtotal
The Tokyo Star Bank, Limited
March 24,
2011
Subtotal
Corporation
March 31,
2011

Subtotal
Corporation
March 26,
2012
Subtotal
Corporation
Long-term Mizuho Bank, Ltd.
loans
payable The Norinchukin Bank
March 26,
2012
Subtotal
Sumitomo Mitsui Trust Bank,
Limited
Resona Bank, Limited
September
19, 2012
The Nomura Trust and Banking

Co., Ltd.
Subtotal
Corporation
September
19, 2012

Subtotal
The Hiroshima Bank, Ltd.
Corporation
Subtotal
November
15, 2012
2,945
2,576
708
191
1,251
2,150
2,200
1,081
2,200
1,081
207
207
960
960
960
2,880
1,200
1,200
960
390
960
960
3,120
2,550
500
992
100
1,592
35
Maturity
date
Use
Remarks
Lump-sum
repayment
(Note 10)
Unsecured,
unguaranteed
Lump-sum
February 15,
repayment
2015
(Note 5)
(Note 9)
Unsecured,
unguaranteed
March 24,
2016
Lump-sum
repayment
(Note 6)
(Note 9)
Unsecured,
unguaranteed
1.80%
(Note 3)
September
30, 2015
Repayment of
7,000 thousand
every 3 months,
and lump-sum
repayment of the
remaining
amount
(Note 8)
Unsecured,
unguaranteed
1.97%
March 26,
2016
Lump-sum
repayment
(Note 6)
(Note 9)
Unsecured,
unguaranteed
1.53%
March 26,
2016
Repayment of
50,000
thousand every 3
months, and
lump-sum
repayment of the
remaining
amount
(Note 9)
Unsecured,
unguaranteed
1.20%
(Note 3)
September
19, 2015
Lump-sum
repayment
(Note 10)
Unsecured,
unguaranteed
1.47%
(Note 3)
September
19, 2017
Lump-sum
repayment
(Note 6)
(Note 10)
Unsecured,
unguaranteed
1.14%
(Note 3)
November
15, 2015
Lump-sum
repayment
(Note 7)
(Note 8)
Unsecured,
unguaranteed
0.42%
1.68%
2.01%
(Note 3)
November
30, 2016
Repayment
method
Category
Lender
Average
beginning of end of
Borrowing
interest
period
period
date
rate (%)
(Note 1)
yen)
of yen)
The Norinchukin Bank

November
15, 2012
Mizuho Bank, Ltd.

Corporation
Subtotal
November
15, 2012

Corporation
Subtotal

Corporation
February 28,
2013
Subtotal

Limited
March 29,
2013
Subtotal
The Chiba Bank, Ltd.

Development Bank of Japan Inc.
April 26,
2013
The Bank of Fukuoka, Ltd.

Subtotal
Corporation
April 26,
2013

Subtotal
Corporation
Limited
September
30, 2013
Subtotal
Corporation
Limited
Mizuho Bank, Ltd.
Subtotal
2,100
1,538
453
453
2,553
1,991
2,000
2,000
500
500
4,000
4,000
6,500
6,500
1,761
October 31,
2013
488
1,942
1,744
972
883
879
788
488
418
4,283
3,835
2,167
2,145
985
975
(Note 8)
Unsecured,
unguaranteed
1.38%
(Note 3)
November
15, 2017
Lump-sum
repayment
(Note 8)
Unsecured,
unguaranteed
0.93%
Repayment of
1,625 thousand
every month,
February 29,
and lump-sum
2016
repayment of the
remaining
amount
(Note 8)
Unsecured,
unguaranteed
0.97%
March 31,
2017
Repayment of
2,250 thousand
every 3 months,
and lump-sum
repayment of the
remaining
amount
(Note 6)
(Note 8)
Unsecured,
unguaranteed
April 26,
2016
Repayment of
11,000
thousand every 3
months, and
Unsecured,
(Note 10)
lump-sum
unguaranteed
repayment of the
remaining
amount (Note 6)
April 26,
2018
Repayment of
11,250
thousand every 3
months, and
Unsecured,
(Note 10)
lump-sum
unguaranteed
repayment of the
remaining
amount
0.87%
1.07%
1,280
1,267
4,432
4,387
1,828
1,809
962
952
2,791
2,762
500
500
1,000
1,000
1,000
1,000
500
500
3,000
3,000
36
Remarks
Lump-sum
repayment
(Note 6)
488
866
Use
March 26,
2016
1,742
866
Repayment
method
1.29%
(Note 3)
1,742
1,761
Long-term The Nomura Trust and Banking

Co., Ltd.
loans
payable
Maturity
date
0.98%
(Note 3)
September
30, 2018
Repayment of
7,250 thousand
every 3 months,
and lump-sum
repayment of the
remaining
amount
0.98%
(Note 3)
September
30, 2018
Lump-sum
repayment
(Note 8)
Unsecured,
unguaranteed
(Note 10)
Unsecured,
unguaranteed
Category
Lender
Average
beginning of end of
Borrowing
interest
period
period
date
rate (%)
(Note 1)
yen)
of yen)

Corporation
78
70
773
753
726
718
89
75

Limited
March 31,
2014

Co., Ltd.
698
688
559
551
Sompo Japan Nipponkoa

Insurance Inc.
625
617
3,549
3,473
648
648
2,516
2,516
2,516
2,516
1,120
1,120
6,800
6,800
600
600
1,200
1,200
803
434
720
720
600
600
1,000
1,000

Co., Ltd.
500
500
500
435
Sompo Japan Nipponkoa

Insurance Inc.
371
328
500
500
6,794
6,317
800
800
Mizuho Bank, Ltd.
1,600
1,600
1,100
1,100
970
970
800
800
500
500
762
762
Aozora Bank, Ltd.
350
285
6,882
6,817
Subtotal
Corporation
March 31,
2014

Limited
Subtotal
Corporation
Mizuho Bank, Ltd.
Long-term Resona Bank, Limited
loans
payable
Limited
The Bank of Fukuoka, Ltd.
September
30, 2014
Subtotal
Corporation

Limited
Subtotal
September
30, 2014
37
Maturity
date
Repayment
method
Use
0.73%
(Note 3)
March 31,
2018
Repayment of
19,000
thousand every 3
months, and
lump-sum
repayment of the
remaining
amount
(Note 8)
Unsecured,
unguaranteed
1.15%
(Note 3)
March 31,
2021
Lump-sum
repayment
(Note 8)
Unsecured,
unguaranteed
0.67%
(Note 4)
September
30, 2019
Lump-sum
repayment
(Note 6)
(Note 9)
Unsecured,
unguaranteed
0.92%
(Note 3)
September
30, 2020
Lump-sum
repayment
(Note 6)
(Note 9)
Unsecured,
unguaranteed
Remarks
Category
Lender
Average
beginning of end of
Borrowing
interest
period
period
date
rate (%)
(Note 1)
yen)
of yen)

Corporation
Mizuho Bank, Ltd.
September
30, 2014
600
600
1,200
1,200
850
850
750
750

Limited
600
600
Subtotal
4,000
4,000
Mitsubishi UFJ Trust and Banking December 30,

Corporation
2014
1,000
935
Subtotal
1,000
935

Corporation
1,400
Mizuho Bank, Ltd.
1,500
500
500

Limited
500
300
4,700
1,700
3,000
1,050
1,000

Limited
1,000
300
Aozora Bank, Ltd.
150
8,200
1,500
1,500
Aozora Bank, Ltd.
1,000
Mitsubishi UFJ Trust and Banking July 10, 2015

Corporation
500
Subtotal
1,500
100
992
1,092
960
960
960
2,880

January 30,
2015
Subtotal
Corporation
Mizuho Bank, Ltd.
Long-term
loans Shinsei Bank, Limited
payable
January 30,
2015
Subtotal
Corporation
March 31,
2015
Subtotal

Corporation
September
30, 2015
Subtotal
Limited
Co., Ltd.
Subtotal
September
24, 2015
38
Maturity
date
Repayment
method
Use
Remarks
1.04%
(Note 3)
September
30, 2021
Lump-sum
repayment
(Note 9)
Unsecured,
unguaranteed
0.63%
December
30, 2020
Lump-sum
repayment
(Note 6)
(Note 8)
Unsecured,
unguaranteed
0.58%
January 31, Lump-sum

2020
repayment
(Note 9)
Unsecured,
unguaranteed
0.90% January 31, Lump-sum

(Note 3)
2022
repayment
(Note 9)
Unsecured,
unguaranteed
0.93%
(Note 3)
March 31,
2022
Lump-sum
repayment
(Note 10)
Unsecured,
unguaranteed
0.95%
(Note 3)
June 30,
2022
Lump-sum
repayment
(Note 10)
Unsecured,
unguaranteed
0.58%
June 30,
2020
Lump-sum
repayment
(Note 8)
Unsecured,
unguaranteed
1.07%
(Note 3)
September
29, 2023
Lump-sum
repayment
(Note 8)
Unsecured,
unguaranteed
Category
Average
beginning of end of
Borrowing
interest
period
period
date
rate (%)
(Note 1)
yen)
of yen)
Lender

Corporation
Long-term
loans Shinsei Bank, Limited
payable
Subtotal
September
30, 2015
Long-term loans payable Total

Total loans payable
703
1,744
189
2,636
75,089
81,772
75,089
90,772
1.07%
(Note 3)
Maturity
date
September
29, 2023
Repayment
method
Use
Lump-sum
repayment
Remarks
(Note 8)
Unsecured,
unguaranteed
(Note 1)
The average interest rate is a weighted average of interest rates during the period, rounded off to two decimal places.
(Note 2)
JHR borrowed 1,000 million on January 30, 2015 and 5,000 million on July 10, 2015, and made early repayment of
the full amount of these loans on October 30, 2015.
(Note 3)
As JHR has conducted interest rate swap transactions in order to hedge against interest rate fluctuation risks, the interest
rate of loans subject to such interest rate swap transactions is the rate obtained by taking into account the effect of
interest rate swaps, rounded off to two decimal places.
(Note 4)
Of these loans payable, the interest rate on the portion totaling 1,794 million is, in effect, fixed at 0.80225% per annum
for the period from September 30, 2014 through September 30, 2019 due to the execution of an interest rate swap
agreement on September 26, 2014. Moreover, the interest rate on the portion totaling 5,000 million is projected to be,
in effect, fixed at around 0.95% per annum for the period from March 30, 2018 through September 30, 2019 due to the
execution of an interest rate swap agreement on September 26, 2014.
(Note 5)
JHR made early repayment of the full amount of these loans payable on January 30, 2015.
(Note 6)
JHR made partial early repayment of these loans payable on October 30, 2015.
(Note 7)
JHR made early repayment of the full amount of these loans payable on September 30, 2015.
(Note 8)
The funds were appropriated for repayment of borrowings.
(Note 9)
The funds were appropriated for acquisition of the beneficial interest of real estate in trust, repayment of borrowings and
related expenses, etc.
(Note 10) The funds were appropriated for acquisition of the beneficial interest of real estate in trust and related expenses, etc.
(Note 11) To present loans payable for each loan contract, 11,393 million of the current portion of long-term loans payable in the
balance sheets is included in long-term loans payable in the above table.
3. Investment corporation bonds

Status of investment corporation bonds as of December 31, 2015 was as follows:
Name
Issuance date
Balance at
beginning of
period
(Millions of
yen)
Balance at
end of period
(Millions of
yen)
Interest
rate
(%)
Maturity
date
Repayment
method
Use
Remarks
Unsecured,
unguaranteed
(Note 5)
Second unsecured investment

corporation bonds
(Note 1)
November
26, 2013
2,500
2,500
0.89
November
25, 2016
Lump-sum
repayment
(Note 2)
Third unsecured investment

corporation bonds
March 19,
2014
2,000
2,000
0.92
March 19,
2019
Lump-sum
repayment
(Note 3)
Fourth unsecured investment

corporation bonds
December
19, 2014
1,500
1,500
0.86
December
17, 2021
Lump-sum
repayment
(Note 4)
6,000
0.82
October
21, 2022
Lump-sum
repayment
(Note 3)
6,000
12,000
Fifth unsecured investment

corporation bonds
Total
October 23,
2015
Unsecured,
unguaranteed
(Note 5)
Unsecured,
unguaranteed
(Note 5)
Unsecured,
unguaranteed
(Note 5)
(Note 1)
The second unsecured investment corporation bonds are recorded in the current portion of investment corporation
bonds on the balance sheet.
(Note 2)
The funds were appropriated for redemption of the first unsecured investment corporation bonds and future acquisition
of specified assets, etc.
39
(Note 3)
The funds were appropriated to partly fund the repayment of existing borrowings.
(Note 4)
The funds were appropriated for repayment of borrowings and future acquisition of specified assets, etc.
(Note 5)
A special pari passu clause among specified investment corporation bonds is attached to the bonds.
4. Short-term investment corporation bonds

Not applicable.
5.
Subscription rights to new investment units

Not applicable.
40
Purchase and Sale during the Period

1. Purchase and sale of real estate, etc., asset-backed securities, etc. and infrastructure assets, etc., and
infrastructure-related assets, etc.
Acquisition
Asset type
Acquisition
date
Sale
Acquisition
price
(Millions of
yen)
Sale date
Sale price
(Millions of
yen)
(Note 1)
(Note 1)
Book value
(Millions of
yen)
Gain (loss) on
sale
(Millions of
yen)
(Note 2)
Beneficial interest of
real estate in trust
January 30,
2015
6,250
the b ikebukuro
January 30,
2015
6,520
the b ochanomizu
January 30,
2015
2,320
the b hachioji
January 30,
2015
2,610
the b hakata
January 30,
2015
2,300
Hotel Francs
March 31,
2015
3,105
Mercure Yokosuka
April 2,
2015
1,650
Okinawa Marriott Resort & Spa
July 10,
2015
14,950
December
18, 2015
17,320
ACTIVE-INTER CITY
HIROSHIMA
Comfort Hotel Shin-Yamaguchi
October 30,
2015
October 30,
2015
October 30,
2015
Total
(Note 1)
(Note 2)
(Note 3)
57,025
787
4,890
(Note 3)
1,644
305
(Note 3)
1,967
4,890
4,400
305
Acquisition price and sale price indicate contracted amounts of the property in the purchase and sale agreement, etc.
excluding related expenses (brokerage fees, taxes, etc.) incurred on the acquisition or sale of such property.
Gain (loss) on sale shows the amount calculated by deducting the book value and other selling expenses from the sale
price.
The sale price of each property is not disclosed as no consent to disclosure has been obtained by the buyer. Accordingly,
the amount of gain on sale of each property is not disclosed either.
2. Purchase and sale of other assets, etc.

Assets other than real estate, etc., and asset-backed securities, etc., infrastructure assets, etc. and
infrastructure-related assets were mostly bank deposits and bank deposits in trust.
41
3. Survey of prices, etc. of specified assets

(1) Real estate properties, etc.
Acquisition/
sale
Asset type
Acquisition/
sale date
Acquisition/
sale price
Appraisal
value
(Millions of
yen)
(Millions of
yen)
(Note 1)
(Note 2)
Date of
appraisal
Appraisal agency
Acquisition
January 30,
2015
6,250
6,420
November 1,
2014
Japan Real Estate

Institute
Acquisition
the b ikebukuro
January 30,
2015
6,520
6,770
November 1,
2014
Japan Real Estate

Institute
Acquisition
the b ochanomizu
January 30,
2015
2,320
2,470
November 1,
2014
Japan Real Estate

Institute
Acquisition
the b hachioji
January 30,
2015
2,610
2,720
November 1,
2014
Japan Real Estate

Institute
Acquisition
the b hakata
January 30,
2015
2,300
2,370
November 1,
2014
Japan Real Estate

Institute
Acquisition
Hotel Francs
March 31,
2015
3,500
December 1,
2014
DAIWA REAL
ESTATE
APPRAISAL
CO.,LTD.
Acquisition
DAIWA REAL
ESTATE
APPRAISAL
CO.,LTD.
Acquisition
3,105
Mercure Yokosuka
April 2,
2015
1,650
1,680
February 28,
2015

Spa
July 10,
2015
14,950
15,400
April 1, 2015
Japan Real Estate

Institute
Acquisition
ACTIVE-INTER CITY
HIROSHIMA
17,900
November 1,
2015
DAIWA REAL
ESTATE
APPRAISAL
CO.,LTD.
Sale
Comfort Hotel
Shin-Yamaguchi
October 30,
2015
834
June 30, 2015
Morii Appraisal &

Investment
Consulting, Inc.
Sale
October 30,
2015
1,880
June 30, 2015
Japan Real Estate

Institute
Sale
October 30,
2015
1,930
June 30, 2015
Morii Appraisal &

Investment
Consulting, Inc.
December
18, 2015
17,320
4,890
(Note 3)
(Note 1)
Acquisition price and sale price indicate contracted amount of the property in the purchase and sale agreement, etc.
excluding related expenses (brokerage fees, taxes, etc.) incurred on the acquisition or sale of such property.
(Note 2)
The above appraisals were valuated by applying the Real Estate Appraisal Standards, Chapter 3: Valuation for price of
real estate for securitization.
(Note 3)
The sale price of each property is not disclosed as no consent to disclosure has been obtained by the buyer.
42
(2) Transaction of securities

Not applicable.
(3) Other
For transactions made by JHR that require research on price, etc. pursuant to the provisions of Article 201 of
the Investment Trusts Act, except for transactions described in (1) Real estate properties, etc. above, the
research activities were performed by KPMG AZSA LLC.
JHR has received from KPMG AZSA LLC a research report on four interest rate swap transactions executed
during the period from January 1, 2015 to December 31, 2015.
4. Transactions with interested parties, etc. (Note 1)
(1) Transactions
(Millions of yen)
Price, etc. (Note 2) (Note 3)
Category
Acquisition price, etc.
Sale price, etc.
57,025
Amount of purchase from

interested parties, etc.
Total amount
Real estate operating revenue

4,890
Amount of sales to interested

parties, etc.
17,033
Amount of real estate

operating revenue from
7,990
[46.9%]
[%]
[%]
Hotel Management Japan Co., Ltd.
[%]
[%]
6,147
[36.1%]
Kyoritsu Maintenance Co., Ltd.
[%]
[%]
1,105
[ 6.5%]
Lagoon resort Nago Co., Ltd.
[%]
[%]
722
[ 4.2%]
K.K. A.I.C Hiroshima Management
[%]
[%]
14
[ 0.1%]
[%]
[%]
7,990
[46.9%]
Breakdown of transactions with interested parties, etc.
Total
(Note 1)
(Note 2)
(Note 3)
Interested parties are the Asset Management Companys interested parties, etc. stipulated in Article 201, paragraph 1 of
the Investment Trusts Act (hereinafter referred to as interested parties, etc.). The amounts in (1) Transactions above
and (2) Amounts of fees paid, etc. below include transactions with those interested parties, etc. as well as major
transactions with sponsor-related parties stipulated in the Asset Management Companys company code for transactions
with sponsor-related persons, which include 1. Interested parties, etc., 2. The Asset Management Companys
shareholders, 3. Companies, etc. that take a 50% or more stake in a shareholder that holds 50% or more of the shares in
the Asset Management Company, 4. Companies in which a shareholder of the Asset Management Company have a
50% or more stake, 5. Entity or persons who ceased to fall under 1. or 4. within 3 months, and 6. Entity or persons who
are deemed appropriate by the compliance officer to be treated as sponsor-related persons in light of the company code
for transactions with sponsor-related persons and the purpose of these rules.
Acquisition price, etc. and sale price, etc. indicate contracted amounts of the property in the purchase and sale
agreement excluding related expenses (brokerage fees, taxes, etc.) incurred on the acquisition or sale of such property.
The figures in brackets show the ratio of the amount etc. to the total amount of purchase and sale amount, etc. rounded
off to one decimal place.
(2) Amount of fees paid, etc.

(Thousands of yen)
Classification
Outsourcing expenses
(Note)
(Note)
Total amounts
of fees paid, etc.
(A)
148,450
Breakdown of transactions with

Counter party
Amount of payment
(B)
5,760
Ratio to total amount

B/A (%)
3.9
Includes basic fees under the property management agreement as well as outsourcing expenses related to routine
maintenance and management of buildings and facilities.
43
5. Transactions with the Asset Management Company in other businesses of the Asset Management
Company
The Asset Management Company only engages in asset management and does not engage in any businesses
related to the financial instruments business, building lots and buildings transactions, or real estate specified
joint enterprise business. There are no applicable transactions.
44
II. Financial Information

1. Assets, liabilities, equity, and profit and loss
For the status of assets, liabilities, equity (contribution), and profit and loss, please refer to 2. Balance Sheets,
3. Statements of Income, 4. Statements of Changes in Net Assets, Statements of Cash Flows and 5. Notes
to Financial Statements.
2. Changes in calculation method of depreciation
Not applicable.
3Changes in evaluation method of real estate, etc. and infrastructure assets, etc.
Not applicable.
Status, etc. of beneficiary certificates of investment trusts set up by JHR

The status of JHRs investment units that the Asset Management Company acquired after December 31, 2015 is as
follows:
(1)
Status of acquisition, etc.

Date
Number of units acquired

(units)
Number of units disposed

(units)
Number of units held

(units)
January 20, 2016
2,500
2,500
Accumulated total
2,500
2,500
Status, etc. of corporation owning foreign real estate

Not applicable.
Status, etc. of real estate owned by corporation owning foreign real estate
Not applicable.
45
Other
(1) Announcements
The following shows the summary of major conclusions, changes, etc. of the principal agreements that were
approved or reported at meetings of JHRs Board of Directors.
Approval date
Item
Summary
January 9, 2015
Conclusion of an underwriting
agreement for new investment
units in association with the
issuance of new investment
units
June 4, 2015
units
July 22, 2015
Comprehensive resolution on
the issuance of investment
corporation bonds and
entrustment of accompanying
administration (Note )
A comprehensive resolution was made on the issuance of investment

corporation bonds with the issuance period between July 30, 2015 and
July 29, 2017 with the total amount issued of up to 100.0 billion, and
the decision on matters regarding the issuance of investment corporation
bonds, including the entrustment of operations as investment corporation
bond administrator and entrustment of the administration, was left to the
discretion of the Executive Director.
Conclusion of memorandum of
understanding regarding the
unitholders registry
administration agreement and
the special account management
agreement
In accordance with the enforcement of the Act on the Use of Numbers to

Identify a Specific Individual in the Administrative Procedure, JHR
entrusted operations regarding collection, registration, disposal and
deletion, etc. of such numbers of individual unitholders to Sumitomo
Mitsui Trust Bank, Limited.
November 25, 2015
November 25, 2015
Partial amendment to the asset

management agreement
Due to the issuance of new investment units, general administration for

offering the investment units was entrusted to SMBC Nikko Securities
Inc., Daiwa Securities Co. Ltd. and Mizuho Securities Co., Ltd.

In accordance with the modifications to the Articles of Incorporation

resolved at the 7th General Meeting of Unitholders of JHR, JHR decided
to make partial modifications to the asset management agreement as
follows:
Clarifying the allocation of subscription rights to new investment units
without contribution as one of the fund procurement operations
Deleting words and phrases that have become unnecessary with the
passing of a certain period, and others
(Note) JHR issued the fifth unsecured investment corporation bonds on October 23, 2015. General administration regarding the fifth
unsecured investment corporation bonds was entrusted to Mizuho Bank, Ltd.
The following shows the summary of major conclusions, changes, etc. of the principal agreements that were
approved or reported at meetings of JHRs Board of Directors held after December 31, 2015.
Approval date
January 4, 2016
Item
units
Summary
46
The 7th General Meeting of Unitholders of JHR was held on November 26, 2015. The major items approved at the
General Meeting of Unitholders are summarized below.
Agenda
Partial amendments to the Articles

of Incorporation
Appointment of one Executive

Director
Appointment of three Supervisory

Directors
Appointment of one Substitute
Executive Director
Summary
Partial amendments were made to the Articles of Incorporation due to the following reasons.
Established a new rule regarding the timing to hold a general meeting of unitholders, and a
provision of a record date to determine unitholders who may exercise their rights at the
said general meeting of unitholders, etc.
Established a new provision to enable JHR to obtain all or majority of issued shares or
investments of corporation(s) holding overseas real estate.
Added assets in which JHR can invest in association with the addition of assets applicable
to the specified assets due to the revision of the relevant law.
Amended a provision to enable JHR to invest in derivative products to hedge against the
risks of currency exchange fluctuations and climate fluctuations such as typhoons, and
others.
In association with resignation of Yukio Isa from office of Executive Director, Kaname
Masuda was newly appointed as Executive Director. The term of office is two years starting
on November 26, 2015.
While the two Supervisory Directors, Hiroshi Matsuzawa and Tetsuya Mishiku, were
reappointed, Hiroto Kashii was newly appointed as Supervisory Director, increasing the
number of Supervisory Directors to three. The term of office is two years starting on
November 26, 2015 for each Supervisory Director.
Hisashi Furukawa, Representative Director of the Asset Management Company, was newly
elected as Substitute Executive Director.
(2) Other
Unless otherwise noted, amounts and ratios in this report are rounded down and rounded off to the stated unit,
respectively.
47

Balance Sheets
December 31, 2015 and 2014
Thousands of yen
ASSETS
Current assets:
Cash and deposits (Notes 3 and 4)
Cash and deposits in trust (Notes 3 and 4)
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Income taxes receivable
Other current assets
Total current assets
Property and equipment, at cost (Notes 13 and 15):
Machinery and equipment
Tools, furniture and fixtures
Construction in progress
Buildings in trust (Note 10)
Structures in trust
Machinery and equipment in trust
Tools, furniture and fixtures in trust
Land in trust
Construction in progress in trust
Less: Accumulated depreciation
Net property and equipment
Intangible assets:
Software
Leasehold rights in trust
Other intangible assets
Total intangible assets
Other assets:
Investment securities (Note 4)
Security deposits
Leasehold and security deposits in trust
Long-term prepaid expenses
Derivative assets (Notes 4 and 14)
Reserve for repairs and maintenance
Investment unit issuance costs
Investment corporation bond issuance costs
Total other assets
Total assets
As of
December 31,
2015
As of
December 31,
2014
5,450,696
8,247,600
1,269,572
410,241
245,509
3,057
6,473
15,633,151
7,539,897
6,884,877
1,029,379
381,639
428
37
15,836,259
184,717
1,428,232
2,676
88,642,547
2,006,145
456,282
125,266
120,918,641
606
213,765,117
(10,276,615)
203,488,501
155,796
1,041,932
67,291,439
736,632
469,007
129,339
89,055,831
126
158,880,106
(8,143,763)
150,736,342
100,333
19,774,039
10,476
19,884,849
57,421
19,774,039
10,968
19,842,429
12,520
158,323
993,340
1,272
49,219
66,928
68,381
1,349,986
602,725
12,520
158,323
803,747
4,834
55,628
38,923
1,676,703
240,356,489
188,091,734
(Continued)
48

Balance Sheets
December 31, 2015 and 2014
Thousands of yen
As of
December 31,
2015
LIABILITIES AND NET ASSETS
Current liabilities:
Operating accounts payable
Short-term loans payable (Notes 4 and 5)
Current portion of investment corporation bonds (Notes 4 and 6)
Current portion of long-term loans payable (Notes 4, 5 and 14)
Accrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Dividends payable
Deposits received
Other current liabilities
Total current liabilities
Long-term liabilities:
Investment corporation bonds (Notes 4 and 6)
Long-term loans payable (Notes 4, 5 and 14)
Tenant leasehold and security deposits (Note 4)
Tenant leasehold and security deposits in trust (Note 4)
Derivative liabilities (Note 14)
Total long-term liabilities
Total liabilities
Net assets (Note 7):
Unitholders equity:
Unitholders capital
Units authorized: 20,000,000 units
Units issued and outstanding; 3,144,227 units and 2,791,281 units as
of December 31, 2015 and 2014, respectively
Surplus:
Capital surplus
Voluntary reserve:
Dividend reserve
Total voluntary reserve
Unappropriated retained earnings
Total surplus
Total unitholders equity
Valuation and translation adjustments:
Deferred gains (losses) on hedges (Note 14)
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets
See notes to financial statements.

49
875,465
9,000,000
2,500,000
11,393,603
500,859
1,210
692,794
12,381
71,442
25,452
25,073,210
As of
December 31,
2014
285,938
11,825,132
400,390
1,210
290,174
651,652
10,770
9,384
13,474,653
9,500,000
70,379,000
2,041,032
2,914,912
533,856
85,368,801
6,000,000
63,264,603
2,041,916
2,608,901
358,752
74,274,172
110,442,012
87,748,826
85,470,541
59,024,923
21,746,398
21,746,398
13,928,075
13,928,075
9,296,121
44,970,596
130,441,137
14,168,614
14,168,614
5,776,116
41,691,129
100,716,052
(526,660)
(526,660)
(373,144)
(373,144)
129,914,477
100,342,908
240,356,489
188,091,734

Statements of Income
For the years ended December 31, 2015 and December 31, 2014
Thousands of yen
For the year
For the year
ended
ended
December 31, December 31,
2015
2014
Operating revenue:
Real estate operating revenue (Note 8)
Other real estate operating revenue (Note 8)
Gain on sale of real estate properties (Note 9)
Gain on investment in silent partnership
Total operating revenue
16,632,526
401,349
305,668
4,288
17,343,833
12,510,628
249,564
13
12,760,205
5,002,501
1,045,925
17,633
89,541
10,800
188,480
6,354,882
4,163,015
809,152
14,134
71,703
9,600
147,060
5,214,666
10,988,950
7,545,539
2,977
1,186
4,644
292
9,411
18,512
2,111
1,268
958
447
4,785
918,051
62,850
632,240
12,500
51,846
33,996
90
1,711,575
1,029,964
37,110
599,282
8,677
35,774
63,357
67
1,774,234
9,295,887
5,776,090
9,295,887
5,776,090
1,210
1,210
1,210
1,210
Operating expenses:
Real estate operating costs (Note 8)
Asset management fee
Asset custody fee
Administrative service fee
Directors compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income:
Interest income
Gain on forfeiture of unclaimed dividends
Gain on insurance claims
Interest on tax refunds
Gain on derivative instruments
Total non-operating income
Non-operating expenses:
Interest expense
Interest expense on investment corporation bonds
Borrowing costs
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Loss on derivative instruments
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes (Note 11):
Current
Deferred
Total income taxes
Net income

50
9,294,677
5,774,880

Statements of Changes in Net Assets
Unitholders
capital
Balance, January 1, 2014
Changes of items during the year:
Issuance of new investment units
Reversal of dividend reserve
Dividends paid
Net income
Net changes of items other than
unitholders equity
Total changes of items during the
year
Balance, December 31, 2014
Dividends paid
Net income
unitholders equity
year
Thousands of yen
Unitholders equity
Surplus
Voluntary reserve
Dividend
Total voluntary Unappropriated
reserve
reserve
retained earnings
Capital surplus
48,845,323
21,746,398
16,017,484
16,017,484
(1,848,870)
-
10,179,600
-
(1,848,870)
-
10,179,600
59,024,923
21,746,398
(1,848,870)
(1,848,870)
14,168,614 14,168,614
(240,538)
-
(240,538)
-
21,746,398
(240,538)
13,928,075
Thousands of yen
Valuation and translation adjustments
Deferred gains
Total valuation
(losses) on
and translation
hedges
adjustments
Balance, January 1, 2014
Dividends paid
Net income
unitholders equity
year
Dividends paid
Net income
unitholders equity
year
(88,022)
(285,121)
(373,144)
89,756,213
10,179,600
(5,082,663)
5,774,880
(285,121)
(285,121)
(373,144)
(285,121)
10,586,694
100,342,908
(153,516)
(153,516)
(526,660)
(285,121)
(88,022)
26,445,618
(6,015,210)
9,294,677
(153,516)
(153,516)
(526,660)
(153,516)
29,571,568
129,914,477
51
2,541,086
5,776,116
692,216
41,691,129
(6,015,210)
9,294,677
3,279,466
44,970,596
10,871,816
100,716,052
26,445,618
(6,015,210)
9,294,677
89,844,236
10,179,600
(5,082,663)
5,774,880
240,538
(6,015,210)
9,294,677
3,520,005
9,296,121
40,998,912
(5,082,663)
5,774,880
(240,538)
13,928,075
Total net assets
3,235,030
1,848,870
(5,082,663)
5,774,880
26,445,618
-
26,445,618
85,470,541
Total unitholders
equity
Total surplus
29,725,085
130,441,137

Thousands of yen
For the year
For the year
ended
ended
December 31,
December 31,
2015
2014
Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Loss on disposal of property and equipment
Loss on derivative instruments
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Decrease in property and equipment in trust due to sale
Gain on investment in silent partnership
Interest income
Interest expense
Interest on tax refunds
(Increase) decrease in operating accounts receivable
(Increase) decrease in consumption taxes receivable
(Increase) decrease in prepaid expenses
(Increase) decrease in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Other net
Subtotal
Interest received
Interest paid
Interest received on tax refunds
Income taxes refunded (paid)
Net cash provided by operating activities
Cash flows from investing activities:
Purchase of investment securities
Proceeds from redemption of investment securities
Purchase of property and equipment in trust
Purchase of property and equipment
Purchase of intangible assets
Payments of reserve for repairs and maintenance
Proceeds from tenant leasehold and security deposits in trust
Reimbursements of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits
Net cash used in investing activities
9,295,887
2,772,440
25,790
24,584
12,500
51,846
4,400,042
(4,288)
(2,977)
980,901
(292)
(240,193)
(245,509)
(28,602)
(189,593)
69,222
103,627
(290,174)
41,141
62,058
7,996
16,846,409
2,977
(983,493)
292
(3,838)
15,862,346
607,013
(59,092,222)
(299,812)
(81,347)
(49,219)
641,553
(324,585)
16
(58,598,604)
5,776,090
2,400,444
4,643
63,357
8,677
35,774
683,986
(2,111)
1,067,075
(447)
(275,570)
(51,910)
(358,452)
(11,682)
(46,197)
60,922
176,457
16,960
(65,510)
(4,307)
9,478,198
2,111
(1,126,516)
447
(1,233)
8,353,007
(602,725)
(16,924,492)
(317,551)
(14,290)
102,021
(72,900)
1,396
(17,828,541)
(Continued)
52

Thousands of yen
For the year
For the year
ended
ended
December 31,
December 31,
2015
2014
Cash flows from financing activities:
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from investment corporation bonds
Proceeds from issuance of investment units
Payments for investment corporation bond issuance costs
Dividends paid
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
15,000,000
(6,000,000)
22,508,000
(15,825,132)
6,000,000
26,382,471
(41,959)
(6,013,599)
42,009,780
(726,477)
Cash and cash equivalents at beginning of year
1,871,484
14,424,774
13,698,296
Cash and cash equivalents at end of year (Note 3)
53
6,800,000
(9,469,150)
29,082,000
(23,607,180)
3,500,000
10,150,551
(30,101)
(5,079,101)
11,347,018
12,553,289
14,424,774

Notes to Financial Statements
1. Organization
Japan Hotel REIT Investment Corporation (JHR), formerly known as Nippon Hotel Fund Investment
Corporation (the former NHF), was established under the Act on Investment Trusts and Investment Corporations
(the Investment Trust Act) on November 10, 2005 and was listed on the Real Estate Investment Trust (REIT)
Section on the Tokyo Stock Exchange (Securities code: 8985) on June 14, 2006.
Focusing on importance as social infrastructure and profitability of hotels, JHR primarily invests in real estate
assets that are wholly or partially used as hotels and real estate-related assets that are in themselves real estate
equivalents pertaining to such real estate assets or that are backed by such real estate or real estate equivalents.
In the fiscal period ended December 31, 2012, the former NHF, as the surviving entity, merged with Japan Hotel
and Resort, Inc. (the former JHR), as the dissolved entity, with an effective date of April 1, 2012 (the merger).
In conjunction with the merger, the former NHF changed its name to Japan Hotel REIT Investment Corporation,
marking a new start as the only REIT specializing in hotel properties in Japan when merged.
Through the merger, nine properties held by the former JHR were succeeded by JHR. As a result, as of the
effective date of the merger, JHRs property portfolio expanded to 28 properties. As of December 31, 2015, JHR
has ownership interests in 36 properties.
2. Summary of Significant Accounting Policies

a. Basis of presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the
Financial Instruments and Exchange Law and their related accounting regulations, and in conformity with
accounting principles generally accepted in Japan (Japanese GAAP), which are different in certain respects as to
the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements have been reformatted and translated into English (with certain
reclassifications and expanded descriptions) from the financial statements of JHR prepared in accordance with
Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the
Financial Instruments and Exchange Law. Certain supplementary information included in the statutory Japanese
language financial statements, but not required for fair presentation, is not presented in the accompanying financial
statements. JHR has not prepared consolidated financial statements, as JHR has no consolidating subsidiaries or
entities.
b. Cash and cash equivalents
Cash and cash equivalents in the statements of cash flows consist of cash on hand, cash in trust accounts,
bank deposit and trust deposit, which can be withdrawn at any time, and short-term investments with a
maturity of three months or less when purchased, which can easily be converted to cash and subject to
minimal risk of change in value.
c. Securities
Investment securities without market value held as available-for-sale are stated at cost being determined by the
moving average method. Equity interest in silent partnership is stated at its net asset value corresponding to the
equity interest in the silent partnership.
d. Property and equipment
Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the
straight-line method over their estimated useful lives. The useful lives of major property and equipment
components are as follows:
Machinery and equipment
Tools, furniture and fixtures
Buildings in trust
Structures in trust
2 to 17 years
2 to 20 years
2 to 62 years
2 to 62 years
54
Machinery and equipment in trust

Tools, furniture and equipment in trust
4 to 32 years
2 to 27 years
e. Intangible assets
Intangible assets are amortized using the straight-line method. The amortization period of major intangible assets
is as follows.
Software (internal use)
5 years as internally usable years
f. Long-term prepaid expenses

Long-term prepaid expenses are amortized using the straight-line method.
g. Investment unit issuance costs
Investment unit issuance costs are amortized using the straight-line method over three years.
The issuance of new investment units through public offerings on January 27, 2015 and June 22, 2015 was
consummated under underwriting agreements in which underwriting securities companies committed to purchase
all of the investment units being offered at an issue value and selling them at an offering price different from such
issue value to general investors (the spread method).
No underwriting fees were paid by JHR under the spread method since the underwriters were compensated by the
underwriting spread, which amounted to 858,900 thousand for the year ended December 31, 2015 and 345,440
thousand for the year ended December 31, 2014, representing the difference between the issue price and the issue
value of all new investment units issued.
h. Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized using the interest method over the respective term of the
bond.
i. Income taxes
Deferred tax assets and liabilities are recognized in the financial statements with respect to the differences between
the financial reporting and tax bases of the assets and liabilities, and were measured using the enacted tax rates and
laws which will be in effect in the years when the temporary differences are expected to be recovered or settled.
j. Taxes on property and equipment
Taxes imposed on properties such as property taxes, city planning taxes, and depreciable asset taxes are allocated
to the respective reporting period and expensed as Real estate operating costs. Cash paid for property taxes and
city planning taxes to the transferor of real properties at acquisition is not recorded as Real estate operating costs
but capitalized as part of the acquisition cost of the relevant property. The amount of such taxes capitalized in the
acquisition cost of real properties was 180,668 thousand for the year ended December 31, 2015 and 36,674
thousand for the year ended December 31, 2014.
k. Derivatives and hedging activities
JHR enters into certain derivative transactions in accordance with its financial policy in order to manage risks,
which is provided in the Articles of Incorporation, mainly arising from adverse fluctuations in interest rates on
loans payable. Derivative financial instruments are carried at fair value with changes in the unrealized gain or loss
charged or credited to operations, except for those which meet the criteria for hedge accounting in which the
unrealized gain or loss is deferred as a component of net assets.
JHR evaluates hedge effectiveness by comparing the cumulative changes in cash flow of hedging instruments and
the hedged items and assessing the ratio between the changes.
l. Accounting treatment of beneficiary interests in trust assets including real estate
For trust beneficiary interests in real estate, all assets and liabilities held in trust accounts as well as all income
generated and expenses incurred from assets in trust are presented separately in the accompanying balance sheet
and income statement accounts.
m. Consumption taxes
Consumption taxes are excluded from the transaction amounts. However, non-deductible consumption taxes on
property and equipment are included in the acquisition cost of the respective assets.
55
n. Rounding of amounts presented in the financial statements

The amounts are rounded down to the nearest thousands or millions in the accompanying financial statements.
3. Cash and Cash Equivalents

Cash and cash equivalents as of December 31, 2015 and 2014 in the statements of cash flows consisted of the
following:
Thousands of yen
As of December
As of December
31, 2015
31, 2014
5,450,696
7,539,897
8,247,600
6,884,877
13,698,296
14,424,774
Cash and deposits

Cash and deposits in trust
Cash and cash equivalents
4. Financial Instruments
a. Status of financial instruments
(1) Policy for financial instruments
JHR is an investment corporation set forth in Article 2, paragraph 12 of the Investment Trust Act, managing
investments mainly in specified assets as prescribed in the Investment Trust Act. As a policy, JHR procures
funds through issuance of investment units, etc. and loans from financial institutions in order to make
investments in specified assets. JHR does not utilize surplus funds to invest in financial instruments except for
short-term deposits and other equivalent short-term financial instruments. JHR may enter into derivative
transactions in order to hedge against interest rate risk, but not for speculative trading purposes.
(2) Details of financial instruments, their risks, and risk management system
Investment securities, which represent an investment in a silent partnership, are exposed to credit risks of the
issuer and risks of fluctuation of real estate property value, etc. JHR manages these risks by periodically
measuring the actual market values of such properties and the financial conditions of the issuer.
The floating rate loans payable are exposed to risks of interest rate fluctuations. In order to mitigate interest
rate risk, JHR may enter into derivative transactions, if necessary.
Derivative transactions are conducted principally in accordance with rules prescribed by JHR and risk
management rules applied by the asset management company. Derivative transactions are arranged by the
finance section of the asset management company by using financial institutions with high credit ratings
through approval and resolution by authorized personnel and a meeting committee structure set forth in its
decision-making standards and resolution of JHRs board of directors.
Loans payable are exposed to liquidity risks. The finance department of the asset management company
prepares and updates projections and actual cash flows on a monthly basis to manage liquidity risks and
monitor compliance with restrictive covenants set forth in the loan agreements. JHR manages liquidity risks by
managing the ratio of short-term and long-term loans payable considering the current financial environment
through approval and resolution by authorized personnel and meeting committee structure in the asset
management company and resolution of JHRs board of directors.
b. Fair Value of Financial Instruments
Carrying amounts of financial instruments on the balance sheets, their fair values, and the differences as of
December 31, 2015 and 2014 were as follows. Financial instruments whose fair values are considered extremely
difficult to measure are not included in the table. See Note (2) below.
56
Thousands of yen
As of December 31, 2015
Carrying amount
Fair value
Difference
5,450,696
5,450,696
8,247,600
8,247,600
13,698,296
13,698,296
(iii) Short-term loans payable

(iv) Current portion of investment corporation
bonds
(v) Current portion of long-term loans payable
(vi) Investment corporation bonds
(vii) Long-term loans payable
Total
9,000,000
2,500,000
11,393,603
9,500,000
70,379,000
102,772,603
(viii) Derivative transactions (*)
(i) Cash and deposits

(ii) Cash and deposits in trust
Total
Thousands of yen
Carrying amount
Fair value
Difference
7,539,897
7,539,897
6,884,877
6,884,877
14,424,774
14,424,774
(i) Cash and deposits

(ii) Cash and deposits in trust
Total
(v) Current portion of long-term loans payable

(vi) Investment corporation bonds
(vii) Long-term loans payable
Total
(viii) Derivative transactions (*)
9,000,000
2,507,000
11,393,603
9,544,450
70,379,000
102,824,053
7,000
44,450
51,450
(532,584)
(532,584)
11,825,132
6,000,000
63,264,603
81,089,735
(353,917)
11,825,132
6,029,450
63,264,603
81,119,185
29,450
29,450
(353,917)
(*) Receivables and payables arising from derivative transactions are presented on a net basis and amounts in parenthesis denote net payables.
Notes:
(1) Methods to measure fair value of financial instruments
(i) Cash and deposits, (ii) Cash and deposits in trust, (iii) Short-term loans payable
The carrying value is deemed to approximate the fair value since the instruments are scheduled to be settled in
a short period of time.
(iv) Current portion of investment corporation bonds, (vi) Investment corporation bonds
The fair value of these instruments is measured based on the market price.
(v) Current portion of long-term loans payable, (vii) Long-term loans payable
The carrying value is deemed to approximate the fair value since the interest rate on long-term loans payable
are floating interest rates which are revised periodically to reflect market interest rates.
(viii) Derivative transactions
The information on the fair value of derivative transactions is presented in Note 14.
(2) Information on financial instruments whose fair values are considered extremely difficult to measure as of
December 31, 2015 and 2014 was as follows:
57
Thousands of yen
As of December
As of December
31, 2015
31, 2014
Carrying amount
602,725
2,041,032
2,041,916
2,914,912
2,608,901
4,955,944
5,253,542
Investment securities
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Total
Investment securities
Investment securities (equity investment in silent partnership) are not subject to fair value disclosure because
they have no market price and their fair values are considered extremely difficult to measure.
Tenant leasehold and security deposits / Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits (in trust) are not subject to fair value disclosure because they have no
market price and their actual deposit periods from a tenants move-in to move-out are not estimable, thus
making a reasonable estimate of future cash flows difficult.
(3) Redemption schedule for monetary claims as of December 31, 2015 and 2014:

Cash and deposits
Total

Cash and deposits
Total
Due within
one year
5,450,696
8,247,600
13,698,296
Due after
one to two
years
Thousands of yen
Due after
Due after
two to three three to four
years
years
-
-
Due after
four to five
years
Due after
five years
Due within
one year
7,539,897
6,884,877
14,424,774
Due after
one to two
years
Thousands of yen
Due after
Due after
years
years
-
-
Due after
four to five
years
Due after
five years
(4) Schedule for repayment of loans payable and redemption of investment corporation bonds as of December 31,
2015 and 2014.

Short-term loan payable
Current portion of investment
corporation bonds
Current portion of long-term
loans payable
Investment corporation bonds
Long-term loans payable
Total

Current portion of long-term
loans payable
Investment corporation bonds
Long-term loans payable
Total
Thousands of yen
Due after
Due after
years
years
-
-
Due within
one year
9,000,000
Due after
one to two
years
2,500,000
11,393,603
22,893,603
9,679,250
9,679,250
13,322,750
13,322,750
Due within
one year
11,825,132
11,825,132
Due after
four to five
years
Due after
five years
2,000,000
6,317,000
8,317,000
13,544,000
13,544,000
7,500,000
27,516,000
35,016,000
Due after
one to two
years
Thousands of yen
Due after
Due after
years
years
Due after
four to five
years
Due after
five years
2,500,000
13,847,603
16,347,603
58
10,618,250
10,618,250
13,322,750
13,322,750
2,000,000
6,794,000
8,794,000
1,500,000
18,682,000
20,182,000
5. Short-Term and Long-Term Loans Payable

Short-term and long-term loans payable as of
December 31, 2015 and 2014 consisted of the
following:
As of December
31, 2015
Maturity date
Short-term loan payable:
Unsecured loan, payable in a lump-sum at maturity
Sub-total
Long-term loans payable:
Unsecured loan, payable in a lump-sum at maturity (*4)
Unsecured loan, payable in a lump-sum at maturity (*2,5)
Unsecured loan, payable 7,000 thousand quarterly and
the remaining balance in a lump-sum at maturity (*2)
the remaining balance in a lump-sum at maturity
Unsecured loan, payable 1,625 thousand monthly and
Amount
As of December
31, 2014
Amount
9,000
9,000
0.42%
February 15, 2015

March 24, 2016
2,576
1.68%
2.01%
4,779
2,945
September 30, 2015

March 26, 2016
1,081
1.80%
1.97%
2,150
2,200
March 26, 2016

September 19, 2015
September 19, 2017
November 15, 2015
March 26, 2016
November 15, 2017
7
2,550
1,991
6,500
1.53%
1.20%
1.47%
1.14%
1.29%
1.38%
207
2,880
3,120
1,592
2,553
6,500
February 29, 2016
1,742
0.93%
1,761
March 31, 2017
488
0.97%
866
April 26, 2016
3,835
0.87%
4,283
April 26, 2018
4,387
1.07%
4,432
September 30, 2018

September 30, 2018
2,762
3,000
0.98%
0.98%
2,791
3,000
March 31, 2018

March 31, 2021
September 30, 2019
September 30, 2020
September 30, 2021
December 30, 2020
January 31, 2020
January 31, 2022
March 31, 2022
June 30, 2022
June 30, 2020
September 29, 2023
September 29, 2023
3,473
6,800
6,317
6,817
4,000
935
4,700
8,200
1,500
1,500
1,092
2,880
2,636
81,772
90,772
0.73%
1.15%
0.67%
0.92%
1.04%
0.63%
0.58%
0.90%
0.93%
0.95%
0.58%
1.07%
1.07%
3,549
6,800
6,794
6,882
4,000
1,000
75,089
75,089
November 30, 2016
Millions of yen
For the year
ended December
31, 2015
Average Interest
rate (*1)
Sub-total
Total of short-term and long-term loans payable
Notes:
(*1)
(*2)
(*3)
The average interest rate represents the weighted average rate during the period based on the number of days and outstanding balance of the loans
payable. The interest rate is rounded to the nearest second decimal place.
As JHR has conducted interest rate swap transactions in order to hedge against interest rate fluctuation risks, the interest rate of loans subject to
such interest rate swap transactions is the rate obtained by taking into account the effect of interest rate swaps (interest rate fixation), rounded off to
two decimal places.
Of these loans payable, the interest rate on the portion totaling 1,794 million is, in effect, fixed at 0.80225% for the period from September 30,
2014 through September 30, 2019 due to the execution of an interest rate swap agreement on September 26, 2014. Moreover, the interest rate on
the portion totaling 5,000 million is projected to be, in effect, fixed at around 0.95% for the period from March 30, 2018 through September 30,
59
(*4)
(*5)
(*6)
2019 due to the execution of an interest rate swap agreement on September 26, 2014.
JHR made early repayment of the full amount of these loans payable on January 30, 2015.
JHR made partial early repayment of these loans payable on October 30, 2015.
JHR made early repayment of the full amount of these loans payable on September 30, 2015.
The annual maturities of long-term loan payable as of December 31, 2015 were as follows:
Years ending
December 31
2016
2017
2018
2019
2020
2021 and thereafter
Total
Millions
of yen
11,393
9,679
13,322
6,317
13,544
27,516
81,772
60
6. Investment Corporation Bonds

Investment corporation bonds as of December 31, 2015 and 2014 consisted of the following:
Millions of yen
As of
As of
December 31,
December 31,
2015
2014
Unsecured investment corporation bond at interest rate of 0.89%, due on
November 25, 2016
March 19, 2019
December 17, 2021
October 21, 2022
Total
2,500
2,000
2,000
1,500
1,500
6,000
12,000
The annual maturities of the investment corporation bonds as of December 31, 2015 were as follows:
Years ending
December 31
2016
2017
2018
2019
2020
2021 and thereafter
Total
Millions
of yen
2,500
2,000
7,500
12,000
7. Net Assets
JHR maintains at least 50,000 thousand as the minimum net assets as required by the Investment Trust Act.
61
2,500
6,000
8. Real Estate Operating Revenue and Costs

The components of Real estate operating revenue and Real estate operating costs for the years ended
December 31, 2015 and December 31, 2014 were as follows:
Thousands of yen
For the year
For the year
ended December
ended December
31, 2015
31, 2014
Operating revenue:
Real estate operating revenue:
Fixed rent
Variable rent
Income from management contract
Sub-total
Other real estate operating revenue:
Parking lots
Other incidental revenue
Utilities
Other
Sub-total
Total operating revenue
Real estate operating costs:
Land lease and other rent expenses
Property taxes
Outsourcing expenses (*1)
Nonlife insurance
Depreciation and amortization
Loss on disposal of property and equipment
Repairs
Utilities
Trust fees
Other
Total real estate operating costs
Net real estate operating income
9,909,942
4,460,082
2,262,502
16,632,526
8,817,424
2,739,966
953,237
12,510,628
87,100
41,191
261,412
11,644
401,349
17,033,876
61,735
26,112
133,458
28,258
249,564
12,760,192
463,289
940,806
387,958
32,334
2,772,440
25,790
65,240
259,741
42,674
12,224
5,002,501
12,031,375
463,124
835,162
197,668
26,480
2,400,444
4,643
45,507
132,826
44,901
12,254
4,163,015
8,597,176
Note:
(*1) Outsourcing expenses include management contract fees of 239,507 thousand for the year ended December
31, 2015 and 81,689 thousand for the year ended December 31, 2014.
62
9.
Gain on Sale of Real Estate Properties

The components of Gain on sale of real estate properties for the years ended December 31, 2015 and December
31, 2014 were as follows:
Thousands of yen
Comfort Hotel
Shin-Yamaguchi
Proceeds from sale of
properties
Costs of sale of properties
Other selling expenses
Gain on sale of real estate
properties
For the year ended

December 31, 2015
Daiwa Roynet
Hotel Sunroute
Hotel Akita
Niigata
For the year ended

December 31, 2014
Total
Dormy Inn Namba
*
787,727
33,684
*
1,644,598
72,401
*
1,967,716
78,203
4,890,000
4,400,042
184,288
700,000
683,986
16,000
305,668
13
*The sale prices for each property have not been disclosed as consent on disclosure has not been obtained from the
purchaser.
10. Advanced Depreciation of Property and Equipment
The accumulated advanced depreciation of property and equipment deducted from acquisition costs due to
government subsidies received as of December 31, 2015 and December 31, 2014 were as follows:
Thousands of yen
For the year
For the year
ended December
ended December
31, 2015
31, 2014
24,291
24,921
Buildings in trust
11. Income Taxes

Significant components of deferred tax assets and liabilities as of December 31, 2015 and 2014 were as follows:
Thousands of yen
As of December
As of December
31, 2015
31, 2014
Deferred tax assets noncurrent:
Valuation difference on assets acquired by merger
Deferred losses on hedges
Total gross deferred tax assets noncurrent
Valuation allowance
Total deferred tax assets noncurrent
1,833,861
179,626
2,013,488
(2,013,488)
-
2,084,809
135,963
2,220,772
(2,220,772)
-
Reconciliation between the effective statutory tax rate and the actual effective tax rate reflected in the
accompanying statements of income for the years ended December 31, 2015 and December 31, 2014 was as
follows:
63
For the year

ended December
31, 2015
34.15
(32.59)
(2.72)
1.17
0.01%
Effective statutory tax rate

Deduction for dividends paid
Change in valuation allowance
Other net
Actual effective tax rate
64
For the year

ended December
31, 2014
34.16%
(30.56)
(3.62)
0.04
0.02%
12. Amounts per Unit

Net income per unit for the years ended December 31, 2015 and December 31, 2014 was as follows:
Thousands
of yen
Net
income
For the year ended December 31, 2015
Number of
units
Weightedaverage units
Yen
Net income
per unit
Basic net income per unit - Net income attributable to

common unitholders
9,264,677
3,060,647
3,036

Basic net income per unit - Net income attributable to
common unitholders
5,774,880
2,674,377
2,159
Notes:
(1) The computation of net income per unit is based on the weighted-average number of units outstanding during
the period.
(2) Diluted net income per unit is not presented since there are no potentially dilutive units for the years ended
December 31, 2015 and December 31, 2014.
Net assets per unit as of December 31, 2015 and 2014 were as follows:
Yen
As of December
As of December
31, 2015
31, 2014
41,318
35,948
Net assets per unit
13. Leases
As Lessor:
JHR leases its real estate properties to third parties under non-cancellable operating leases. Minimum rental
revenue under the non-cancellable operating leases as of December 31, 2015 and 2014 were as follows:
Thousands of yen
As of December
As of December
31, 2015
31, 2014
1,788,631
1,308,494
7,565,169
6,161,012
9,353,800
7,469,507
Due within one year

Due after one year
Total
65
14. Derivatives and Hedging Activities

a. Derivative transactions to which hedge accounting is not applied
Derivative transactions to which hedge accounting is not applied as of December 31, 2015 and 2014 were as
follows:

Interest rate swaps
(fixed rate payment,
floating rate receipt)
Interest rate caps

Interest rate swaps
Classification
Transactions
other than
market
transactions
Transactions
other than
market
transactions
Classification
Transactions
other than
market
transactions
Contract
amount
Thousands of yen
Contract
amount
due after one
year
6,794,000
6,794,000
(38,598)
34
848,250
848,250
Contract
amount
Thousands of yen
Contract
amount
due after one
year
5,000,000
5,000,000
Fair value
Fair value
(37,252)
b. Derivative transactions to which hedge accounting is applied

Derivative transactions to which hedge accounting is applied as of December 31, 2015 and 2014 were as follows:

Interest rate swaps
Interest rate caps
Method of
accounting
Hedged item
Deferral
method
Long-term
loans payable
Deferral
method
Long-term
loans payable
66
Contract
amount
(*1)
Thousands of yen
Contract
amount
due after one
Fair value
year
(*2)
63,581,950
58,028,750
8,565,250
4,286,250
(495,258)
1,238

Interest rate swaps
Interest rate caps
Method of
accounting
Hedged item
Deferral
method
Long-term
loans payable
Deferral
method
Long-term
loans payable
Contract
amount
(*1)
Thousands of yen
Contract
amount
due after One
Fair value
year
(*2)
55,604,250
48,659,950
9,413,500
9,413,500
(321,499)
4,834
Notes:
(*1) The contract amounts of the interest rate swap and interest rate cap are presented based on the notional
principal amounts. Also, the contract amounts of derivative transactions do not indicate certain scale of market risk
exposure related to derivative transactions.
(*2) The fair value is measured at the quoted price obtained from the counterparty financial institutions.
15. Investment and Rental Properties
JHR owns rental properties for hotels to earn lease income and income from management contracts. The carrying
amounts, changes in such balances, and fair values of such properties were as follows:
Hotels
Thousands of yen
Carrying amount (*1)
January 1,
December 31,
2015
Net increase (*2)
2015
169,847,788
52,514,962
222,362,750
Fair value (*3)

December 31,
2015
302,110,000
Notes:
(*1) Carrying amount recognized in the balance sheet is net of accumulated depreciation, if any, from acquisition
price (including costs for acquisitions). Amounts for machinery and equipment, tools, furniture and fixtures,
construction in progress, construction in progress in trust, and intangible assets other than leasehold rights in trust
and facility usage rights are not included.
(*2) Increase during the year ended December 31, 2015 principally represents the acquisition of the five the b
hotels for 20,230 million, Hotel Francs for 3,181 million, Mercure Yokosuka for 1,649 million, Okinawa
Marriott Resort & Spa for 15,094 million and ACTIVE-INTER CITY HIROSHIMA for 17,949 million.
Decrease during the year ended December 31, 2015 principally represents the sale of Comfort Hotel
Shin-Yamaguchi for 787 million, Daiwa Roynet Hotel Akita for 1,644 million and Hotel Sunroute Niigata for
1,967 million.
(*3) Fair value of properties as of December 31, 2015 is generally the appraisal value determined by licensed real
estate appraisers.
Hotels
Thousands of yen
Carrying amount (*1)
January 1,
December 31,
2014
Net increase (*2)
2014
155,753,667
14,094,120
169,847,788
Fair value (*3)

December 31,
2014
205,408,000
Notes:
(*1) Carrying amount recognized in the balance sheet is net of accumulated depreciation, if any, from acquisition
price (including costs for acquisitions). Amounts for machinery and equipment, tools, furniture and fixtures,
construction in progress, construction in progress in trust, and intangible assets other than leasehold rights in trust
and facility usage rights are not included.
(*2) Increase during the year ended December 31, 2014 principally represents the acquisition of ibis Styles
Sapporo (formerly Best Western Hotel Sapporo Nakajima Koen) for 6,868 million, Mercure Sapporo for 6,102
million and Mercure Okinawa Naha for 3,009 million. Decrease during the year ended December 31, 2014
principally represents the sale of Dormy Inn Namba for 683 million.
67
(*3) Fair value of properties as of December 31, 2014 is generally the appraisal value determined by licensed real
estate appraisers.
Real estate operating revenue and costs for the years ended December 31, 2015 and December 31, 2014 related to
the rental properties were as follows:
Hotels
Thousands of yen
Real estate
Real estate
operating revenue
operating costs
Net real estate
(*1)
(*1)
operating income
17,033,876
5,002,501
12,031,375
Hotels
Thousands of yen
Real estate
Real estate
operating revenue
operating costs
Net real estate
(*1)
(*1)
operating income
12,760,192
4,163,015
8,597,176
Note:
(*1) Real estate operating revenue and Real estate operating costs are income from real estate operation
(including other real estate operating revenue) and corresponding expenses (such as depreciation, property taxes,
trust fees, and repairs and maintenance expenses), and are included in Operating revenue and Real estate
operating costs, respectively.
16. Segment Information

a. Segment information
The segment information has been omitted because JHR has only one segment, which is the investment and
management business of hotel real estate.
b. Related information
(1) Information about products and services for the years ended December 31, 2015 and December 31, 2014
Information about products and services has been omitted because operating revenue from external customers
in a single product/service category accounted for more than 90% of total operating revenue.
(2) Information about geographical areas for the years ended December 31, 2015 and December 31, 2014
(i) Operating revenue
Information about geographical areas has been omitted because operating revenue in Japan accounted for more
than 90% of total operating revenue.
(ii) Property and equipment
Information about property and equipment has been omitted because the amount of property and equipment
located in Japan accounted for more than 90% of net property and equipment.
(3) Information about major customers
<For the year ended December 31, 2015>
Thousands of yen
Segment
Operating revenue
Hotel real estate
6,147,639
investment and management
Hotel real estate
AAPC Japan K.K.
2,546,023
Hotel real estate
The Dai-ichi Building Co., Ltd.
(Note)
(Note) The operating revenue is not disclosed as consent on disclosure has not been obtained from the hotel
lessee.
Name of customer
68
<For the year ended December 31, 2014>
Name of customer
Segment
Hotel real estate
Hotel real estate

The Dai-ichi Building Co., Ltd.
Thousands of yen
Operating revenue
5,627,554
1,872,000
17. Subsequent Events

a. Acquisition of assets
On February 1, 2016, JHR acquired the following property.
Property name
CANDEO HOTELS UENO-KOEN
Asset category
Real estate beneficial interest in trust and movable assets attached to the
hotel
Asset type
Hotel
Address
1-2-13 Negishi, Taito-ku, Tokyo
Acquisition date
February 1, 2016
Seller
GK Ueno Parkside
6,705 million
(Note)
The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning
taxes, and consumption taxes.
On April 1, 2016, JHR acquired the following property.
Property name
Hotel Centraza Hakata
Asset category
Real estate beneficial interest in trust and movable assets attached to the
hotel
Asset type
Hotel
Address
4-23 Hakata-eki Chuogai, Hakata-ku, Fukuoka-shi, Fukuoka
Acquisition date
April 1, 2016
Seller
The seller is not disclosed as consent on disclosure has not been

obtained from the seller. There are no capital, human or business
relationships to be noted between JHR or the Asset Management
Company and the seller. In addition, the seller does not have any special
interest relationship with either JHR or the Asset Management
Company.
7,197 million
(Note)
The acquisition price does not include expenses for acquisition, settlement of property taxes and city planning
taxes, and consumption taxes.
69
b. Borrowing of funds
JHR obtained new borrowings as follows in order to partly fund the acquisition of the real estate beneficial
interest in trust of CANDEO HOTELS UENO-KOEN and movable assets attached thereon as described above in
item a. Acquisition of assets.
Term Loan 18
Lender
Sumitomo Mitsui Banking Corporation / Shinsei Bank, Limited /

Mizuho Bank, Ltd. / The Hiroshima Bank, Ltd.
Amount of the loan
2,000 million
Interest rate
Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.30%
Date of borrowing
February 29, 2016
Method of principal repayment
Maturity date
March 31, 2019
Collateral
JHR obtained new borrowings as follows in order to partly fund the acquisition of the real estate beneficial
interest in trust of Hotel Centraza Hakata and movable assets attached thereon as described above in item a.
Acquisition of assets.
Term Loan 19
Lender
Sumitomo Mitsui Banking Corporation / Mizuho Bank, Ltd. / Shinsei

Bank, Limited / Sumitomo Mitsui Trust Bank, Limited / Mitsubishi UFJ
Trust and Banking Corporation / The Bank of Fukuoka, Ltd.
Amount of the loan
7,000 million
Interest rate
Base interest rate (JBA Japanese Yen TIBOR for one month) + 0.30%
Date of borrowing
April 1, 2016
Method of principal repayment
Maturity date
March 31, 2017
Collateral
c. Issuance of new investment units

JHR resolved to issue new investment units at the Board of Directors meetings held on January 4, 2016 and
January 13, 2016. Payment for the new investment units was completed on January 20, 2016 and February 17,
2016, and the investment units were issued under the following terms and conditions. As a result, JHRs
unitholders capital increased to 100,088,808,209, with the number of investment units issued and outstanding
totaling 3,321,907 units.
(1) Issuance of new investment units (public offering)
170,000 units
Issue price:
Total issue price:
85,020 per unit

14,453,400,000

82,273 per unit

13,986,410,000
Payment date:
January 20, 2016
(2) Issuance of new investment units (third-party allotment)

7,680 units
82,273 per unit

631,856,640
Payment date:
Allottee:
February 17, 2016

SMBC Nikko Securities Inc.
70
(3) Use of funds

JHR allocated the proceeds obtained from the public offering and the third-party allotment to cash on hand in order
to complement part of a decrease in cash on hand, which is a decrease that occurred when JHR had used cash on
hand to partly fund the acquisition of ACTIVE-INTER CITY HIROSHIMA (Sheraton Hiroshima Hotel) (including
expenses for acquisition) that it acquired on December 18, 2015. JHR also used the said proceeds to partly fund the
acquisition of CANDEO HOTELS UENO-KOEN as described above in item a. Acquisition of assets.
d. Issuance of investment corporation bonds

JHR issued investment corporation bonds under the following terms and conditions.
Category
Sixth unsecured investment corporation bonds
Total amount of bonds
3,000 million
Issue price
100 for 100 of each bond
Interest rate
0.935% per year
Issue date
March 22, 2016
Redemption date
March 19, 2026
Collateral
Unsecured
Use of proceeds
To partly fund the repayment of existing loans
71

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Asset Management Report

For the Year Ended December 31, 2015

Japan Hotel REIT Investment Corporation

JAPAN HOTEL REIT INVESTMENT CORPORATION

Asset Management Report

II. Financial Statements

Statements of Changes in Net Assets

Statements of Cash Flows

Notes to Financial Statements

Independent Auditors Report

I. ASSET MANAGEMENT REPORT

[Real estate operating revenue]

Net assets per unit

Net income per unit

[Earnings dividend per unit]

[Dividend per unit resulted from

Ratio of ordinary income to total assets

Debt service coverage ratio

Ratio of interest-bearing debt to total

Total leasable area

Number of tenants at end of period

Occupancy rate at end of period

Number of operating days

2. Asset management operation for the fiscal period under review

(4) Financial results

Capital increase through third-party

Investment unit split

September 12, Capital increase through public

Number of units issued

Capital increase through third-party

Capital increase through public

Capital increase through public

Capital increase through public

Capital increase through third-party

Capital increase through public

Capital increase through third-party

[Fluctuation in market price of investment units]

Account closing month

Price at end of period

(From October 1, 2011

(From April 1, 2012

(From January 1, 2013

(From January 1, 2014

(From January 1, 2015

5. Investment policies and issues to be addressed

6. Significant subsequent events

CANDEO HOTELS UENO-KOEN

Real estate beneficial interest in trust and movable assets

1-2-13 Negishi, Taito-ku, Tokyo

Acquisition price (Note)

On April 1, 2016, JHR acquired the following property.

Hotel Centraza Hakata

Real estate beneficial interest in trust and movable assets

4-23 Hakata-eki Chuogai, Hakata-ku, Fukuoka-shi,

The seller is not disclosed as consent on disclosure has not

Acquisition price (Note)

(2) Resolution on borrowing of funds

Sumitomo Mitsui Banking Corporation / Shinsei Bank,

Amount of the loan

Base interest rate (JBA Japanese Yen TIBOR for one

February 29, 2016

Lump-sum payment on the maturity date