Investment Policies

Focused investment in hotel assets that share "Trust Value" created by "Trust Quality"

Regarding the quality of the Mori Trust Group that is supported by both the development capabilities of Mori Trust, a sponsor of MORI TRUST Hotel Reit, and the hotel operation and management capabilities of Mori Trust Hotels & Resorts, another sponsor, as "Trust Quality," MORI TRUST Hotel Reit will invest in hotel assets that share "Trust Value" (or values) created by Trust Quality in a focused manner.

Focused investment in hotel assets that share

Policy on Portfolio Building

Under the basic policy of making an investment that combines "asset quality," "stability" and "growth potential" while considering the competitiveness and potential of properties by analyzing the market environment for hotels and inns, etc., MORI TRUST Hotel Reit will make a decision on whether an investment should be made in a comprehensive manner, taking into account the growth potential and profitability of the overall portfolio and the risks involved in the portfolio.
MORI TRUST Hotel Reit also works to reduce risks and aims to maximize revenues by building a diversified portfolio of investment real estate in terms of area, type and grade as specified below.

■Area

MORI TRUST Hotel Reit will focus on the asset quality, which is an essential aspect of real estate value, and give weight to hotels and inns, etc. and facilities attached to them that are located in "major cities in Japan" and "famous tourist areas" as an area where the stable attraction of customers can be expected in the future among those having the combination of "asset quality," "stability" and "growth potential."

Area	Criteria
Major cities in Japan	Tokyo 23 wards and cities designated by Government ordinance
Famous tourist areas	Areas that MORI TRUST Hotel Reit has judged to have attractive cultural and tourism resources, etc. and to already have or to be expected to have the power to attract tourists in the future.

The policy of MORI TRUST Hotel Reit is to make an initial investment in Japan only and carefully consider the acquisition of overseas real estate, comprehensively taking into account the asset size, the diversification of the portfolio and the management system.

■Type

MORI TRUST Hotel Reit will make an investment by dividing the investment real estate into three types of "full service," "limited service" and "resort" from the standpoint of the functions and services it will provide and the facilities it owns, etc.

Type	Criteria
Full service	Multifunctional facilities with multiple sections such as accommodation, restaurants and banquets, etc.
Limited service	Facilities with lodging as the primary function
Resort	Residential-type accommodation facilities located in famous tourist areas for enjoying recreation and outdoor amusement, avoiding the heat of the summer and spending the winter, etc.

■Grade

MORI TRUST Hotel Reit categorizes the grade of investment real estate into six types: "luxury," "upper upscale," "upscale" "upper midscale" "midscale" and "economy." It invests in the top four categories in a focused manner.

Grade	Criteria	Type	Approximate standard of room size (m²)	Approximate standard of ADR (Yen)
Luxury	Famous hotel chain that is recognized as a worldwide luxury brand	Full service/ Resort	40～	40,000～
Upper upscale	Famous hotel chain that is recognized as a worldwide exclusive hotel brand	Full service/ Resort	30～40	30,000 ～40,000
Upscale	Class that launches a brand under a famous hotel chain that is recognized as a worldwide exclusive hotel brand	Full service / Limited service/ Resort	20～30	20,000 ～30,000
Upper midscale	Hotels that offer comfortable lodging services, with a larger room size and better interior, etc. than the midscale	Limited service	15～20	10,000 ～20,000
Midscale	Economical hotels with carefully selected targets and functions	Limited service	10～15	～10,000
Economy	Hotels whose ADR is in a relatively low price range	Limited service	～10	～10,000