To Our Unitholders

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 42nd fiscal period (from January 1, 2024 to June 30, 2024) (the "Reporting Period").

In the Reporting Period, the performance of the hotels achieved steady growth compared to the previous year due to the rapid recovery and growth of inbound demand, coupled with steady domestic demand. Although occupancy rates at each hotel were slightly below 2019 levels prior to COVID-19, ADR remained well above 2019 levels, absorbing cost increases, resulting in an increase in GOP compared to the same period in 2019.

The residential portfolio also performed well, with the average occupancy rate reaching 96.7%, the highest in the past nine fiscal periods. The average rent per tsubo also increased, reflecting the trend of the population returning to urban centers.

On the financing side, the stability of our financial base has been greatly enhanced through the first issuance of investment corporation bonds to individual investors to further diversify fund procurement methods, the lengthening of borrowing periods, diversification of repayment terms, as well as significantly increasing the ratio of fixed-rate borrowings. We are striving to manage our finances by keeping a close eye on interest rate trends since the Bank of Japan lifted its negative interest rate policy.

Overall, INV announced a distribution per unit (the "DPU") of JPY 1,917 by recording operating revenue of JPY 21,136 million, operating income of JPY 14,635 million, and net income of JPY 12,900 million in the Reporting Period. The DPU is the highest DPU achieved since February 2010 when the corporate name changed to Invincible Investment Corporation.

In July 2024, after the end of the Reporting Period, we implemented a global offering for the second consecutive year and acquired 12 domestic hotels including "Art Hotel Osaka Bay Tower & Solaniwa Onsen", a full-service hotel. INV's portfolio has further expanded to exceed JPY 650 billion in assets under management (based on acquisition price) through this large asset acquisition exceeding a total acquisition price of JPY 100 billion.

We will continue to work diligently to capture banquet and meeting demand which have significantly been recovering after the COVID-19 pandemic, as well as inbound demand to local areas, and to further increase DPU through asset acquisitions and additional strategic investments such as renovation of domestic and overseas hotels.

Your continued support is highly appreciated.