To Our Unitholders

We would like to express our deepest sympathies to all those affected by the 2024 Noto Peninsula Earthquake. We pray for the safety of everyone in the affected areas and for the speedy restoration of peace and tranquility in the lives of those affected.

We would like to take this opportunity to express our sincere gratitude to all unitholders of Invincible Investment Corporation ("INV") for your continued support.

We hereby provide you with a report on INV's asset management and financial results for the 41st fiscal period (from July 1, 2023 to December 31, 2023) (the "Reporting Period").

In the Reporting Period, the performance of the hotels showed significant recovery along with the recovery of the inbound demand driven by the depreciation of Japanese yen, coupled with robust domestic leisure demand, as the more than three year impact from the Covid-19 pandemic has ended. ADR continued to significantly exceed the 2019 level at INV's hotels in Japan and Cayman Islands, as the hotel operator focused its strategy on ADR. The increase in ADR helped to absorb cost increases including labor costs and utilities charges. As such, GOP increased compared to the same period in 2019 despite a slightly lower occupancy rate at each hotel owned by INV compared to before the Covid-19 pandemic.

Under such circumstances, INV implemented a global public offering for the first time in four years to acquire six domestic hotels including Fusaki Beach Resort Hotel & Villas. As a result, INV's hotel portfolio further expanded assets under management and maintains the largest hotel portfolio among J-REITs, with a hotel portfolio exceeding JPY 500 billion. The recent acquisition further enhanced the portfolio in terms of the quality of its properties and diversification of areas and hotel types.

On the financing side we issued our first green bond. INV's financial base has been further stabilized by the lengthening of borrowing periods, diversification of maturity dates, and a significant improvement in the ratio of fixed interest rate debt.

Furthermore, INV continued its efforts to promote sustainability initiatives and obtained three stars in the 2023 GRESB Real Estate Assessment.

Overall, INV announced a distribution per unit of JPY 1,640 by recording operating revenues of JPY 18,819 million, operating income of JPY 12,588 million, and net income of JPY 11,032 million in the Reporting Period. The distribution per unit is still below the December 2019 fiscal period (JPY 1,725) but has recovered to a level close to that period.

In February 2024, after the end of the Reporting Period, we issued our first retail bond which enhanced the diversification of our financing methods. In the coming periods, we aim to proactively take initiatives such as the further acquisition of properties and value-add work to improve revenues of properties already acquired.

Now that we overcame the Covid-19 pandemic, we will continue to work diligently to further enhance the value of INV in all aspects, including internal growth, external growth, financing strategy, and sustainability in order to meet our unitholders' expectations.

Your continued support is highly appreciated.