Notice Concerning Acquisition of Domestic Real Estate (KAI Kirishima and KAI Beppu)

November 10, 2021

For Immediate Release

REIT Securities Issuer

Hoshino Resorts REIT, Inc.

Representative: Kenji Akimoto, Executive Director

(Code: 3287)

Asset Management Company

Hoshino Resort Asset Management Co., Ltd.

Representative: Kenji Akimoto, President & CEO

Contact: Takahiro Kabuki, Director & CFO

TEL: +81-3-5159-6338

Notice Concerning Acquisition of Domestic Real Estate (KAI Kirishima and KAI Beppu)

Hoshino Resorts REIT, Inc. (hereinafter "HRR") announces that Hoshino Resort Asset Management Co., Ltd. (hereinafter the "Asset Management Company"), to which HRR entrusts asset management, made a decision today to acquire the following properties (hereinafter the "Assets to be Acquired").

After the acquisition of "KAI Kirishima," the planned counterparty to the acquisition and lease of "KAI Kirishima" will correspond to an interested party, etc. under the Act on Investment Trusts and Investment Corporations (act No. 198 of 1951, as amended) (hereinafter the "Investment Trusts Act"), and will also fall under the definition of interested party, etc. as set forth in the "interested party transaction rules," which are the internal rules of the Asset Management Company. (As of today, there is no capital relationship between the planned counterparty and HRR/the Asset Management Company, and the planned counterparty does not correspond to an interested party, etc. under the Investment Trusts Act. Also, the planned counterparty does not fall under the definition of interested party, etc. as set forth in the "interested party transaction rules," which are the internal rules of the Asset Management Company.) In addition, as of today, the planned counterparty to the acquisition and lease of "KAI Beppu" corresponds to an interested party, etc. under the Investment Trusts Act, and also falls under the definition of interested party, etc. (a subsidiary of the parent company of the Asset Management Company) as set forth in the "interested party transaction rules," which are the internal rules of the Asset Management Company. Therefore, upon the decision for the lease of "KAI Kirishima" and the acquisition and lease of "KAI Beppu," the Asset Management Company has obtained the consent of HRR in accordance with the approval of HRR's Board of Directors' Meeting held on November 10, 2021, pursuant to the Investment Trusts Act and "interested party transaction rules."

1. Overview of Acquisition

(Note 1) "Category" indicates either Properties operated by Hoshino Resorts Group ("HOSHINOYA," "RISONARE," "KAI" and "Other") or Properties operated by outside operators ("Urban tourism" and "Other") in accordance with the classification of investment target assets of HRR.

Disclaimer: This press release is a document for public announcement concerning the acquisition of domestic real estate (KAI Kirishima and KAI Beppu) by HRR and has not been prepared for the purpose of solicitation for investment. Investors are advised to ensure that they read the prospectus for the issuance of new investment units and secondary offering of investment units, as well as the amendments thereto, prepared by HRR before they invest and that they make decisions on investment at their own responsibility and discretion.

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The same shall apply hereinafter.

(Note 2) "Property No." indicates the number of properties for investment target assets of HRR classified under the four categories of "HOSHINOYA," "RISONARE," "KAI" and "Other" within the management guidelines of the Asset Management Company before revision as of October 11, 2017. The same shall apply hereinafter.

(Note 3) "Planned acquisition price" indicates the sales/purchase price of the property stated in the sales and purchase agreement (excluding consumption taxes, local consumption taxes and expenses such as transaction commissions), each rounded down to the nearest million yen.

2. Reason for Acquisition

HRR makes focused investments in facilities that are likely to secure steady cash flow over a long-term period. Among hotels, ryokans and ancillary facilities (Note) operated by the Hoshino Resorts Group (collectively referring to Hoshino Resorts Inc. and its parent company and subsidiaries; the same shall apply hereinafter) (hereinafter the "properties operated by the Hoshino Resorts Group"), HRR intends to invest in the properties under the three core brands of "HOSHINOYA," "Hoshino Resorts KAI" and "Hoshino Resorts RISONARE" operated by the Hoshino Resorts Group in cases where stable use of such properties is expected, and which are expected to secure a long-term and stable cash flow. Based on this intention, HRR decided on the acquisition of the Assets to be Acquired, which is one of the Hoshino Resorts KAI brand facilities.

The acquisition of the Assets to be Acquired is judged to strengthen the stability of HRR's earnings, as the risk of deterioration in operating cash flow caused by the changes in the travel needs of travelers or the trends, disasters, economic situations in Japan and abroad will be reduced with progressed diversification of facilities' locations and cash flow characteristics of the portfolio.

In addition, "Kai Kirishima," which opened in January 2021, has been trending firmly with a cumulative guest room occupancy rate for the five months from May to September 2021 of 85.2% mainly due to securing demand for microtourism (short-distance travel that both supports local economies and includes measures against COVID-19). "Kai Beppu," which opened in July 2021 (grand opening), opened during the 5th wave of the rapid spread of COVID-19, but the guest room occupancy rate in July 2021, the opening month, was at a respectable level at 61.5%, and the occupancy rate in September 2021, when the number of daily infections began to gradually decrease, was 59.8%, securing a certain level of demand for accommodation despite impact of the pandemic. HRR decided to acquire the Assets to be Acquired, taking into account the operational results of the Assets to be Acquired and the high operating capabilities of the Hoshino Resorts Group under the ongoing pandemic from 2020, and determines that the Assets to be Acquired are assets that can secure long-term and stable cash flow. For details on the monthly operation results of the Assets to be Acquired, please refer to the "Supplementary Explanatory Materials: 'Notice Concerning Issuance of New Investment Units and Acquisition of Assets (Domestic Real Estate and Mezzanine Loan Receivables)'" disclosed separately on this date.

After acquisition of the Assets to be Acquired by HRR, the Hoshino Resorts Group plans to acquire the shares of "Kirishima Hotel Management INC.," which is the lessee of "KAI Kirishima," and "Hanabishi Holdings INC.," which is the lessee of "KAI Beppu," from the jointly managed fund (hereinafter "DBJ Joint Fund") formed by Hoshino

Disclaimer: This press release is a document for public announcement concerning the acquisition of domestic real estate (KAI Kirishima and KAI Beppu) by HRR and has not been prepared for the purpose of solicitation for investment. Investors are advised to ensure that they read the prospectus for the issuance of new investment units and secondary offering of investment units, as well as the amendments thereto, prepared by HRR before they invest and that they make decisions on investment at their own responsibility and discretion.

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Resorts Co., Ltd. and Development Bank of Japan, Ltd., making the two companies wholly owned subsidiaries. The Hoshino Resorts Group plans to conclude a share transfer agreement with DBJ Joint Fund around February 2022.

(Note) "Hotel" refers to accommodation facilities mainly with western-stylestructures and facilities, "ryokan" to accommodation facilities mainly with Japanese-stylestructures and facilities and "ancillary facilities" to large facilities such as ski resorts, golf courses, pools and retail stores attached to hotels and ryokans. The same shall apply hereinafter.

3. Contents of Assets to be Acquired

The tables below present an overview of the Assets to be Acquired.

The following is an explanation of the matters stated in each column of the tables below. a. Explanation on "Overview of specified asset"

• For "Use," accommodation facilities mainly with western-style structures and facilities are indicated as "hotel"; and those mainly with Japanese-style structures and facilities are indicated as "ryokan" based on the current conditions of the property. Since the description in "Use" is a classification to grasp the overall characteristics of each facility in accordance with the investment policy of HRR, such may differ from use of individual buildings comprising the facility stated in the real estate registry.
• "Planned acquisition date" is the planned acquisition date for the Assets to be Acquired but may be changed under a mutual agreement between HRR and the current owner.
• "Type of specified asset" is the type of real estate and other assets as specified assets.
• "Planned acquisition price" indicates the sales/purchase price of the Assets to be Acquired stated in the sales and purchase agreement (excluding consumption taxes, local consumption taxes and expenses such as transaction commissions).
• "Appraisal value (Appraisal date)" is the real estate appraisal value and appraisal date stated in the real estate appraisal report for the Assets to be Acquired obtained from Japan Real Estate Institute.
• "Location (Indication of residential address)," in principle, is the indication of residential address. In cases where there is no indication of residential address, it is the building location (if several, one of the locations) in the real estate registry.
• "Transportation" is in accordance with the real estate appraisal report for the Assets to be Acquired obtained from Japan Real Estate Institute.
• "Lot number" of Land is the building location (if several, one of the locations) in the registry.
• "Building coverage ratio" of Land is, in principle, the ratio of building area to area of the building site as stipulated in Article 53 of the Building Standards Act (Act No. 201 of 1950, including amendments thereto)
  (hereinafter the "Building Standards Act") and indicates the upper limit of the building coverage ratio stipulated by city planning according to type of use district, etc. (designated building coverage ratio) (if several, all of them). Designated building coverage ratio may be relaxed, raised or reduced due to reasons such as the existence of fireproof structures in a fire prevention district, and thus may differ from a building coverage ratio that actually applies.
• "Floor-arearatio" of Land is the ratio of total floor area of the building to site area as stipulated in Article
  52 of the Building Standards Act and indicates the upper limit of the floor-area ratio stipulated by city planning according to type of use district, etc. (designated floor-area ratio) (if several, all of them). Designated floor-area ratio may be relaxed, raised or reduced due to reasons such as width of roads connected to the site, and thus may differ from a floor-area ratio that actually applies.
• "Use district" of Land is the type of use district classified (if several, all of them) in accordance with Article
  8, Paragraph 1, Item 1 of the City Planning Act (Act No. 100 of 1968, including amendments thereto).
• "Site area" of Land is based on the description in the registry (It includes the leased area, if there is any leased land. The leased area is based on the description in the lease agreement.) and may differ from the

Disclaimer: This press release is a document for public announcement concerning the acquisition of domestic real estate (KAI Kirishima and KAI Beppu) by HRR and has not been prepared for the purpose of solicitation for investment. Investors are advised to ensure that they read the prospectus for the issuance of new investment units and secondary offering of investment units, as well as the amendments thereto, prepared by HRR before they invest and that they make decisions on investment at their own responsibility and discretion.

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present state.

• "Type of ownership" of Land and Building is the type of rights held by HRR.
• "Completion date" of Building is the inspection date of construction completion stated in the certificate of inspection under the Building Standards Act for the main building.
• "Structure / floors" of Building is based on the description in the registry for the main building.
• "Total floor area" of Building is based on the description in the registry, including floor area of annex buildings.
• "Building engineer" and "Constructors" of Building indicate the company names at the time of building engineering and construction of the main building.
• "Leasable floor area" is the area equivalent to the area owned by HRR out of leasable area and indicates the figure stated in the lease agreement, to be effective on HRR's planned acquisition date of the Assets to be Acquired, or in the building drawing of the property.
• "Occupancy rate" is the occupancy rate expected as of the planned acquisition date (the ratio of the total leased floor area to the total leasable floor area). In case a lease agreement with suspensive conditions of becoming effective under the condition of HRR's acquisition has been concluded between HRR and the tenant, the occupancy rate is indicated assuming that leasing has started on the planned acquisition date.
• "Main tenant" is the tenant with the largest leased area out of those leasing the property from HRR in accordance with the lease agreement that is to be effective on HRR's planned acquisition date of the Assets to be Acquired.
• "No. of tenants" is the number of those leasing the property from HRR in accordance with the lease agreement that is to be effective on HRR's planned acquisition date of the Assets to be Acquired. However, this excludes those leasing or planning to lease part of the site or the building for the purpose of parking or installing antennas.
• "No. of guest rooms" is the number of guest rooms available for accommodation at that property.
• "No. of sublease tenants" is the number of those planning to lease (sublease) the property from those leasing the property from HRR in accordance with the lease agreement that is to be effective on HRR's planned acquisition date of the Assets to be Acquired. However, this excludes those planning to lease (sublease) part of the site or the building for the purpose of parking or installing antennas.

1. Explanation on "Overview of leasing"

• "Overview of leasing" is the detail of the lease agreement concerning the Assets to be Acquired with the tenant who is to lease the hotel or ryokan after HRR's acquisition.
• All of "Lessee," "Type of contract," "Contract period," "Leased floor area," "Rent," "Security deposit and guarantee deposit," "Renewal at the end of contract period," "Rent revision," "Midterm cancellation," "Penalty" and "Method for re-contract" are based on the statements in the lease agreement that is to be effective on the planned acquisition date of the Assets to be Acquired.

Disclaimer: This press release is a document for public announcement concerning the acquisition of domestic real estate (KAI Kirishima and KAI Beppu) by HRR and has not been prepared for the purpose of solicitation for investment. Investors are advised to ensure that they read the prospectus for the issuance of new investment units and secondary offering of investment units, as well as the amendments thereto, prepared by HRR before they invest and that they make decisions on investment at their own responsibility and discretion.

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Disclaimer: This press release is a document for public announcement concerning the acquisition of domestic real estate (KAI Kirishima and KAI Beppu) by HRR and has not been prepared for the purpose of solicitation for investment. Investors are advised to ensure that they read the prospectus for the issuance of new investment units and secondary offering of investment units, as well as the amendments thereto, prepared by HRR before they invest and that they make decisions on investment at their own responsibility and discretion.

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