Financial Results (AssetManagementReport 202412 ENG combined)

This is an English language summary of the original Japanese Asset Management Report available on our Website. However, no assurance or warranties are given with respect to the accuracy or completeness of this English language summary. The Japanese original shall prevail in the case of any discrepancies between this summary and the Japanese original.

Invincible Investment Corporation

Asset Management Report

Fiscal Period ended December 31, 2024 (July 1, 2024 to December 31, 2024)

Content

Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation and President & CEO of Consonant Investment Management Co., Ltd.

Summary of Financial Results

Improvement of Asset Value through Renovation

ESG Initiatives

Unitholder Benefit Program

1. Asset Management Report

1. Balance Sheet

1. Statement of Income and Retained Earnings IV. Statement of Changes in Net Assets

1. Notes to Financial Statements VI. Statement of Cash Distribution
   VII. Statement of Cash Flows (Reference Information)

Domestic Portfolio Map (As of February 28, 2025)

Financial Conditions

Overview of Unitholders/Investment Units

Information for Unitholders

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Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation and President & CEO of Consonant Investment Management Co., Ltd.

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 43rd fiscal period (from July 1, 2024 to December 31, 2024) (the "Reporting Period").

In the Reporting Period, the domestic hotels achieved steady growth compared to the previous year due to stable domestic demand coupled with the recovery and growth in inbound demand. As for the Cayman hotels, there was a temporary downturn in performance due to the partial sales stoppage resulting from the large-scale renovation work at Sunshine Suites Resort, but demand remained strong.

Under such circumstances, INV implemented a global public offering for the second consecutive year to acquire 12 domestic hotels, including the full-service hotel "Art Hotel Osaka Bay Tower & Solaniwa Onsen", further expanding and enriching its hotel portfolio, which is the largest among J-REITs. Furthermore, in October 2024, Fusaki Beach Resort Hotel & Villas, one of INV's flagship hotels, won a total of six awards for "World Luxury Hotel Awards 2024", an internationally recognized award which is considered as the "Academy Awards of the hotel industry", including three "World Luxury Hotel Awards" in the hotel category, and three awards for "World Luxury Spa Awards 2024" for its SPA "Fusaki Spa". We believe that the hotel's high quality of service and diverse facilities were highly evaluated, leading to the award, and we look forward to welcoming our unitholders to this hotel.

On the financing side, we worked to manage our finances by keeping a close eye on interest rate trends, and we extended the terms of the loans and diversified repayment dates. At the same time, we raised the ratio of fixed interest rates by implementing interest rate swap transactions and borrowing at fixed interest rates as a precaution against the risk of rising interest rates.

As a result, INV announced a distribution per unit of JPY 1,982 by recording operating revenues of JPY 25,555 million, operating income of JPY 17,751 million, and net income of JPY 15,138 million in the Reporting Period. The distribution per unit ("DPU") exceeded the result for the June 2024 fiscal period and is the highest DPU since February 2010 when the corporate name changed to Invincible Investment Corporation.

The current environment will continue to require us to deal with rising costs, including interest rates, but we aim to further increase DPU by working diligently to capture demand for banquets and meetings which have recovered significantly after the COVID-19 pandemic, and inbound demand in regional areas, as well as by making asset acquisitions and strategic investments such as renovations of domestic and overseas hotels.

Your continued support is highly appreciated.

Naoki Fukuda

Executive Director, Invincible Investment Corporation

President & CEO, Consonant Investment Management Co., Ltd.

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Summary of Financial Results

Distribution per unit for the 43rd fiscal period

JPY 1,982

(the fiscal period ended December 2024)

(Note) The forward-looking statements, forecasts and goals described in this report are based on available information, assumptions and estimates as of February 28, 2025. These assumptions and estimates are unavoidably uncertain, and could be affected by various risks and factors beyond INV's control. Thus, no guarantee can be made regarding the realization of such future forecasts and targets, and actual results may vary significantly.

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Unitholder Benefit Program

INV has introduced the unitholder benefit program to improve the satisfaction of its unitholders and expand the unitholder base. Eligible unitholders can stay at Sheraton Grande Tokyo Bay Hotel and all MyStays group hotels at special discount rates. INV decided to expand the available period by two months (from six months to eight months) for stay from the December 2022 Fiscal Period and onwards.

Overview of the Unitholder Benefit Program(Note 1)

Akasaka

(Note 1) The details of the unitholder benefit program described above are as planned by Invincible as of February 28, 2025, and the program may be changed or abolished even after it is has been introduced.

(Note 2) Refers to all hotels under MyStays brand managed by MHM, and hotels shown on the MyStays Hotel Group's official website (https://www.mystays.com/en-us/) will be applicable.

(Note 3) Available Period represents a period during which you can lodge by using the unitholder benefit program. To enjoy the unitholder benefit program, you actually need to lodge during the availability period.

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Return on assets = Ordinary income for relevant period / ((Total assets at start of relevant period + Total assets at end of relevant period) / 2) x 100.

Return on equity = Net income for relevant period / ((Net assets at start of relevant period + Net assets at end of relevant period) / 2) x 100.

Capital ratio = Net assets at end of relevant period / Total assets at end of relevant period x 100.

NOI = Rental revenue - Property-related expenses + Management contract revenue - Management contract expenses + Dividends of preferred equity interest + Depreciation expense for relevant period.

The dividends of preferred equity interest has been included in the formula calculating NOI from the 41st fiscal period. Since no dividends of preferred equity interest was recorded from the 39th to the 41st fiscal period, this change makes no difference. However, since dividends of preferred equity interest was recorded from the 42nd to the 43rd fiscal period, dividends of preferred equity interest was included in NOI due to this change.

2 Overview of Asset Management for the Fiscal Period Ended December 2024

1. Main Trends of INV

INV was established in January 2002 in accordance with the Investment Trust and Investment Corporation Act (Act No. 198 of 1951, as amended). In May 2004, INV was listed on the Osaka Securities Exchange (application for delisting was made in August 2007), and in August 2006 was listed on the Real Estate Investment and Trust Securities Section of the Tokyo Stock Exchange (Ticker Code: 8963).

After the absorption-type merger with LCP Investment Corporation ("LCP") was implemented on February 1, 2010, INV issued new investment units through a third-party allotment on July 29, 2011 and refinanced its debt. Calliope Godo Kaisha ("Calliope"), an affiliate of the Fortress Investment Group LLC ("FIG" and together with Calliope and other affiliates of FIG, collectively the "Fortress Group") was the main allottee, and the sponsor changed to the Fortress Group.

Ever since the commencement of sponsorship from the Fortress Group (Note 1), INV has been focusing its efforts on improving the profitability of its portfolio and establishing a revenue base in order to secure stable distributions, and has strengthened the lender formation through new borrowings and the refinancing of existing bank borrowings, thereby creating a financial base for external growth. With this platform as a base, in June 2014, Consonant Investment Management Co., Ltd., the asset manager to which INV entrusts the management of its assets ("CIM") revised the Investment Guidelines for INV, positioned hotels as a core asset class alongside residential properties with a view towards expanding investments in the hotel sector in which demand is forecasted to rise going forward, and has expanded its portfolio.

In the Fiscal Period ended December 31, 2024 ("Reporting Period"), INV implemented a global offering of new investment units for the second consecutive year and acquired 12 domestic hotels. As a result, INV's portfolio at the end of the Reporting Period comprised of 146 properties (104 hotels (Note 2) (Note 3), 41 residential properties and one retail facility) with a total acquisition price of JPY 653,066 million (Note 4). Furthermore, INV's hotel portfolio has the largest asset size (Note 5) of JPY 612,281 million (104 properties, 18,871 rooms) among all J-REITs (real estate investment corporations which are listed on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market, hereinafter the same shall apply) hotel portfolios including Hotel J-REITs (Note 6).

(Note 1) Calliope transferred 80.0% of issued shares to Fortress CIM Holdings L.P., a subsidiary of SoftBank Group and 20.0% to SoftBank Group Corp. ("SoftBank Group") on March 29, 2018, but the SoftBank Group transferred its issued shares of CIM to Fortress CIM Holdings L.P on May 23, 2023. Further, on May 15, 2024, the SoftBank Group transferred its interest in the indirect parent company of Fortress CIM Holdings L.P. to Mubadala Capital, a wholly-owned subsidiary of Mubadala Investment Company, an Abu Dhabi sovereign wealth fund. As a result, the SoftBank Group no longer falls under the parent company and specified related corporation of CIM.

(Note 2) The preferred equity interest held by INV is counted as one property. Such preferred equity interest issued by a special purpose company (tokutei mokuteki kaisha, "TMK") refers to 178,458 units of the preferred equity interest issued by Kingdom Special Purpose Company (equivalent to 49.0% of the outstanding preferred equity interest), which owns the trust beneficiary interest of the Sheraton

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Grande Tokyo Bay Hotel as an underlying asset. The property is classified as a hotel, based on the use of Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest, and INV's investment amount of the preferred equity interest is used as the acquisition price of the preferred equity interest, unless otherwise stated. The "underlying asset" refers to the real estate or the real estate related assets owned by a operator of an anonymous association (tokumei kumiai, "TK") interest or a TMK relating to the preferred equity interest which INV owns, thus the real estate or the real estate related assets which will be the revenue source of INV. Hereinafter the same shall apply.

(Note 3) From September 28, 2018 (Cayman Island local time; September 29, 2018 in Japan local time), INV owned 100% of the TK interest in Seven Mile Resort Holdings Ltd. (the "Cayman SPC"), a Cayman Islands special purpose company that holds leasehold interests in Westin Grand Cayman Seven Mile Beach Resort & Spa and Sunshine Suites Resort (collectively, the "Cayman Hotels") and ancillary assets as underlying assets. However, INV implemented the investment structure change (the "Structure Change" in some cases hereinafter) regarding the Cayman Hotels on May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time) and has directly held the Leasehold Interests, etc. of the Cayman Hotels thereafter. Both of the TK interest and the Cayman Hotels are counted as two properties before and after the Structure Change. In addition, the "Leasehold Interests, etc." means leasehold interests (rights equivalent to long-term real estate leases on land and buildings under the British Cayman laws) and furniture, fixtures, equipment, ornaments, kitchen instrument, and other assets required for hotel operations. Hereinafter the same shall apply.

(Note 4) Due to the Structure Change, the book value of the leasehold interests of the Cayman Hotels recorded by the Cayman SPC as of May 9, 2019 (Cayman Island local time; May 10, 2019 in Japan local time), when INV succeeded the leasehold interests of the Cayman Hotels from the Cayman SPC via distribution in kind in connection with the termination of TK agreement, is deemed as the acquisition price of the Cayman Hotels. The book value is converted into JPY amount via exchange rate of USD 1=JPY 110.45 based on the foreign exchange forward contracts executed on July 26, 2018 and implemented on September 26, 2018 in connection with the investment in the TK interest by INV. Hereinafter the same shall apply.

(Note 5) Hotel J-REIT is defined as the J-REIT whose majority part of portfolio consists of hotel assets.

(Note 6) "The largest asset size … among all J-REIT hotel portfolios" refers to the total acquisition price of 104 hotels owned by INV as compared with the total acquisition price of hotels (including inns and other accommodation facilities) owned by listed investment corporations other than INV as of December 31, 2024.

1. Operational Performance

The portfolio NOI (Note 1) increased by 36.3% or JPY 6,246 million compared to the same period in the previous year (the December 2023 fiscal period) to JPY 23,451 million. Of which, the hotel portfolio NOI increased by JPY 6,226 million and the residential and retail portfolio NOI increased by JPY 19 million. Compared to the December 2019 fiscal period prior to the COVID-19 pandemic, the portfolio NOI increased by 54.7% or JPY 8,287 million, of which the hotel portfolio NOI increased by JPY 9,057 million and the residential and retail portfolio NOI decreased by JPY 769 million due to asset sales.

Commentary on hotel and residential performance is as described below.

As for the domestic hotel portfolio, all hotel indices for the period under review exceeded those for the same period of the previous year due to solid domestic demand coupled with strong growth in inbound demand. The GOP (Note 2) for the Reporting Period increased by 14.3% compared to the same period in the previous year (figures exclude nine domestic hotels with fixed-rent lease agreements among the 90 domestic hotels owned by INV as of the end of the Reporting Period, including Sheraton Grande Tokyo Bay Hotel, the underlying asset of the preferred equity interest of TMK owned by INV). The 81 domestic hotels (Note 3) recorded an occupancy rate (Note 4) of 85.6%, ADR (Note 5) of JPY 15,030, and RevPAR (Note 6) of JPY 12,863. The Cayman Hotels recorded an average occupancy rate of 52.6%, ADR of USD 438, and RevPAR of USD 231 for the Reporting Period. Although demand was robust throughout the Period, the impact of hurricanes and storms including "Hurricane Beryl", a Category 5 hurricane, as well as the impact of the partial sales stoppage

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