Hoshino Resorts REIT : Notice Concerning Acquisition and Lease of Domestic Real Estate (HOSHINOYA Okinawa (77.47% co-ownership))

June 15, 2022

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: [phone]

Notice Concerning Acquisition and Lease of Domestic Real Estate

(HOSHINOYA Okinawa (77.47% co-ownership))

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 today announced its decision to acquire and lease the following property (hereinafter the "Asset to be Acquired").

The counterparty to the lease of the Asset to be Acquired by the Asset Management Company is a new management corporation for the Asset to be Acquired and planned to be established through an incorporation- type demerger from Yomitan Hotel Management Co., Ltd. The new management corporation will become a wholly owned subsidiary of Hoshino Resorts Inc., (hereinafter sometimes "Hoshino Resorts") around the same time as the acquisition of the Asset to be Acquired by HRR, and will become an interested party, etc., under the Act on Investment Trusts and Investment Corporations (Act No.198 of 1951 including subsequent amendments) (hereinafter the "Investment Trust Act") and the "interested party transaction rules," which are internal rules of the Asset Management Company. Therefore, in agreeing to the terms of the lease transaction with Hoshino Resorts, the Asset Management Company has obtained the consent of HRR in accordance with the approval of HRR's Board of Directors' Meeting held on June 15, 2022 pursuant to the Investment Trusts Act and the "Related Parties Transactions Rules."

1. Overview of Acquisition

Planned

Category

Property No.

Property name

Location

acquisition

Seller

price

(Note 1)

(Note 2)

(million yen)

(Note 3)

Properties

operated by

HOSHI

HOSHINOYA Okinawa

Yomitan-son,

Yomitan Hotel

Hoshino

H-5

Nakagami-gun,

12,210

NOYA

(Note 4)

Management Co., Ltd.

Resorts

Okinawa

Group

(Note 1) "Category" indicates either properties by Hoshino Resorts Group ("HOSHINOYA," "RISONARE," "KAI" and "Others") or properties operated by outside operators ("Urban tourism" and "Other") in accordance with the classification of investment target assets of HRR. 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 sales commissions), each rounded down to the nearest million yen.

(Note 4) HRR plans to acquire co-ownership interests (77.47% interest) in the building and site rights, etc., of HOSHINOYA Okinawa. The other co- ownership interests (22.53% interest) in the building and site rights, etc., will continue to be held by the seller, Yomitan Hotel Management Co., Ltd.

Disclaimer: This press release is for the purpose of publicly announcing the the acquisition of domestic real estate (HOSHINOYA Okinawa) by HRR and has not been prepared for the purpose of solicitation of investment. When making an investment, please ensure to read the prospectus for the issuance of new investment unis and Secondary Offering of investment units prepared by HRR and any amendments thereto. Any investments should be made based on your own assessment and at your own risk.

1

(1)	Date of execution of purchase agreement	June 15, 2022
(2)	Planned acquisition date	July 1, 2022 (delivery and settlement date)
(3)	Seller	Please refer to "5. Details of Seller" later in this document.
(4)	Funds for acquisition	Proceeds from issuance of new investment units, borrowings
		and cash on hand resolved at the meeting of HRR's Board of
		Directors held on June 15, 2022 (plan)
(5)	Method of payment	Lump-sum payment upon delivery (plan)
(6)	Collateral	None

2. Overview of the Lease

	Property No.			Property name			Lessee
	H-5		HOSHINOYA Okinawa		Yomitan Operations Co., Ltd. (Note)

(Note) The lessee, Yomitan Operations Co., Ltd. (the "New Management Corporation"), will be the management corporation of the new Asset to be Acquired and will be formed through an incorporation-type demerger from Yomitan Hotel Management Co., Ltd., which is the owner and management corporation of the Asset to be Acquired as of today. Hoshino Resorts intends to make the New Management Corporation a wholly owned subsidiary around the same time as HRR's acquisition of the Asset to be Acquired.

1. Scheduled date of execution of lease agreement: July 1, 2022
2. For lease terms and other details, see "Overview of the Lease" in "4. Details of the Asset to be Acquired and the Lease of the Asset to be Acquired" below.

3. Reason for and Overview of the Acquisition and Lease

1. Reason for the acquisition and lease
   HRR makes focused investments in facilities that are likely to secure steady cash flow over a long-term

period. Among the hotels, ryokans and ancillary facilities (Note) operated by 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 Hoshino Resorts Group"), HRR intends to invest in the properties under the three core brands of "HOSHINOYA," "KAI" and "Hoshino Resorts RISONARE" operated by 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 Asset to be Acquired under the "HOSHINOYA" brand.

HRR believes that the acquisition of the Asset to Be Acquired will promote diversification of its portfolio in terms of the location of facilities and cash flow characteristics, thereby reducing the risk of a significant decline in cash flow due to changes in travelers' needs or trends, disasters, or domestic and international economic trends, compared to previous periods, and will enhance the stability of its earnings.

At the same time as HRR's acquisition of the Asset to be Acquired, the New Management Corporation will be established as the management corporation of the new Asset to be Acquired through an incorporation- type demerger from Yomitan Hotel Management Co. , Ltd. Furthermore, Hoshino Resorts plans to make the New Management Corporation a wholly owned subsidiary around the same time as HRR's acquisition of the Asset to be Acquired.

In conjunction with the acquisition of the Asset to be Acquired, HRR has selected tenants and operators based on the tenant and operator selection criteria established by HRR (for details of the selection criteria, see the "Report on the Management System, etc. of the Issuer of Real Estate Investment Trust Securities, etc." dated January 28, 2022), and judged that the New Management Corporation, which will be a wholly owned subsidiary of Hoshino Resorts, which has high expertise in hotel operations, is also suitable as a tenant of the Asset to be Acquired. HRR has therefore decided to select the New Management Corporation as a tenant of the Asset to be Acquired and to lease the Asset to be Acquired.

See "(2) Overview of the Acquisition and Lease" below for the scheme for acquisition and holding, etc., of the Asset to be Acquired.

(Note)	"Hotel" refers to lodging facilities with mainly Western-style structures and facilities, "ryokan" refers to lodging facilities with
	mainly Japanese-style structures and facilities, and "ancillary facilities" refers to large-scale facilities such as ski resorts, golf
	courses, swimming pools, and stores incidental to hotels or ryokans. The same shall apply hereinafter.

Disclaimer: This press release is for the purpose of publicly announcing the the acquisition of domestic real estate (HOSHINOYA Okinawa) by HRR and has not been prepared for the purpose of solicitation of investment. When making an investment, please ensure to read the prospectus for the issuance of new investment unis and Secondary Offering of investment units prepared by HRR and any amendments thereto. Any investments should be made based on your own assessment and at your own risk.

2

1. Overview of the Acquisition and Lease
   By building the structure to suit the current environment, HRR expects to acquire properties from the DBJ Joint Fund (a jointly managed fund formed by Hoshino Resorts and Development Bank of Japan Inc.; hereinafter sometimes the "Joint Fund") over three consecutive fiscal periods, following the acquisition of "KAI Nagato" (acquired in June 2021 (17th fiscal period)), "KAI Kirishima" and "KAI Beppu" (both acquired in December 2021 (18th fiscal period)).
   HRR is undertaking this acquisition of the Asset to be Acquired as part of its external growth strategy to seize the opportunity to acquire a high-quality, relatively new property at a reasonable price, and to use it as the newest facility of HOSHINOYA, the flagship brand of Hoshino Resorts Group (Note 1). HRR plans to acquire the property at the comparatively cheap price of 91.8% of its appraised real estate value, which is only possible in the current environment where competition to acquire hotel properties is not likely to overheat due to the COVID-19 pandemic (Note 2), while also taking into account the COVID-19 risk (Note 3)as follows.
   HRR's handling of COVID-19 risk aims to reduce the impact of that risk by designing rents based on sponsor commitments. Specifically, HRR has agreed with Hoshino Resorts to a fully fixed rent for the first two years and four months following the acquisition, backed by Hoshino Resorts Group's commitment to the operation of HRR and the Asset to be Acquired (Note 4). No tenant belonging to Hoshino Resorts Group received a rent reduction or exemption during the COVID-19 pandemic. HRR believes that by concluding a lease agreement with Hoshino Resorts Group, a stable tenant, it will be able to adopt a rent scheme that will ensure stable earnings even during the immediate period when the impacts of COVID-19 are expected to remain to some extent.
   HRR plans to obtain preferential negotiating rights to the 22.53% co-ownership interest in the HOSHINOYA Okinawa building, which will continue to be owned by Yomitan Hotel Management Co. , Ltd. (hereinafter sometimes the "the Joint Fund SPC"). HRR has thereby been improving the probability of acquisition with a view to acquiring the unacquired portion in the future.
   After HRR acquires "HOSHINOYA Okinawa," ownership will be structured as follows. The Joint Fund SPC is the seller of HOSHINOYA Okinawa and will become a co-owner after the acquisition of the co-ownership interest in HRR. Meanwhile, HRR will lease from the Joint Fund SPC a 22.53% co-ownership interest in the building, which the Joint Fund SPC plans to continue to own, together with a 77.47% co-ownership interest in the building (Note 5), which HRR plans to own. The entire building will be leased by HRR to the New Management Corporation who is the lessee and operator under a master lease agreement with fixed rent for a certain period after acquisition. For a summary of the preferential negotiating rights that will be granted to HRR by the Joint Fund SPC for the co-ownership interest (22.53% interest) in the building that the Joint Fund SPC plans to continue to hold, see "4. Details of the Asset to be Acquired and the Lease of the Asset to be Acquired" below.
   In acquiring "HOSHINOYA Okinawa," HRR has been establishing a solid acquisition scheme that incorporates the hedging of risk, taking into account the impact of the COVID-19 pandemic as described above. Specifically, HRR plans to design rents that are primarily fixed for a certain period of time after the acquisition, and to keep the expected acquisition price low by continuing to partially share the property with the Joint Fund SPC. With this solid acquisition scheme, HRR intends to realize an acquisition with both revenue stability and post-COVID-19 upside expectations in view, while implementing appropriate risk control.
   In addition, HRR holds a total of 999 Class B preferred shares (Note 6) (total acquisition price: 499.5 million yen) of Yomitan Hotel Management Co., Ltd., the owner and management corporation of the Asset to be Acquired as of today. Yomitan Hotel Management Co., Ltd. has agreed with HRR to redeem by acquiring all of the Class A preferred shares (Note 7) in the transfer of the Asset to be Acquired to HRR. It has also agreed with HRR on amendments of the provisions regarding the dividend of surplus of the 1st, 2nd, and 3rd tranche Class B preferred shares held by HRR as follows, subject to the transfer of the Asset to be Acquired and the completion of redemption of all of the Class A preferred shares.

Disclaimer: This press release is for the purpose of publicly announcing the the acquisition of domestic real estate (HOSHINOYA Okinawa) by HRR and has not been prepared for the purpose of solicitation of investment. When making an investment, please ensure to read the prospectus for the issuance of new investment unis and Secondary Offering of investment units prepared by HRR and any amendments thereto. Any investments should be made based on your own assessment and at your own risk.

3

Before amendments	After amendments
Amount of 1st tranche Class B preferred dividend per 1st	Amount of 1st tranche Class B preferred dividend per 1st
tranche Class B preferred share: Amount calculated by the	tranche Class B preferred share:
following formula	• Amount of 1st tranche Class B preferred dividend per
• Amount of 1st tranche Class B preferred dividend per	1st tranche Class B preferred share = accumulated
1st tranche Class B preferred share = amount paid per	amount of 160,554 yen
1st tranche Class B preferred share × preferred dividend	• In the event of a distribution of surplus in excess of the
rate	above preferred dividend amount, a dividend of surplus
• Dividends of surplus in excess of the amount of 1st	equal to the amount of the dividend of surplus per
tranche Class B preferred dividend will not be paid (non-	share of common stock will be paid per 1st tranche
participating)	Class B preferred share in the same order as the
• If the amount of dividends per share paid to 1st tranche	common shareholders or registered pledgees of
Class B preferred shareholders in a given fiscal year	common stock.
does not reach the amount of 1st tranche Class B
preferred dividends, the shortfall will accumulate from
the following fiscal year onward.
Amount of 2nd tranche Class B preferred dividend per 2nd	Amount of 2nd tranche Class B preferred dividend per 2nd
tranche Class B preferred share: Amount calculated by the	tranche Class B preferred share:
following formula	• Amount of 2nd tranche Class B preferred dividend per
• Amount of 2nd tranche Class B preferred dividend per	2nd tranche Class B preferred share = accumulated
2nd tranche Class B preferred share = amount paid per	amount of 130,162 yen
2nd tranche Class B preferred share × preferred	• In the event of a distribution of surplus in excess of the
dividend rate	above preferred dividend amount, a dividend of surplus
• Dividends of surplus in excess of the amount of 2nd	equal to the amount of the dividend of surplus per
tranche Class B preferred dividend will not be paid (non-	share of common stock will be paid per 2nd tranche
participating)	Class B preferred share in the same order as the
• If the amount of dividends per share paid to 2nd	common shareholders or registered pledgees of
tranche Class B preferred shareholders in a given fiscal	common stock.
year does not reach the amount of 2nd tranche Class B
preferred dividends, the shortfall will accumulate from
the following fiscal year onward.
Amount of 3rd tranche Class B preferred dividend per 3rd	Amount of 3rd tranche Class B preferred dividend per 3rd
tranche Class B preferred share: Amount calculated by the	tranche Class B preferred share:
following formula	• Amount of 3rd tranche Class B preferred dividend per
• Amount of 3rd tranche Class B preferred dividend per	3rd tranche Class B preferred share = accumulated
3rd tranche Class B preferred share = amount paid per	amount of 107,529 yen
3nd tranche Class B preferred share × preferred	• In the event of a distribution of surplus in excess of the
dividend rate	above preferred dividend amount, a dividend of surplus
• Dividends of surplus in excess of the amount of 3rd	equal to the amount of the dividend of surplus per
tranche Class B preferred dividend will not be paid (non-	share of common stock will be paid per 3rd tranche
participating)	Class B preferred share in the same order as the
• If the amount of dividends per share paid to 3rd tranche	common shareholders or registered pledgees of
Class B preferred shareholders in a given fiscal year	common stock.
does not reach the amount of 3rd tranche Class B
preferred dividends, the shortfall will accumulate from
the following fiscal year onward.

As a result of these amendments, the 1st, 2nd and 3rd tranche of Class B preferred shares held by HRR will be eligible for preferred dividends only for the amount of dividends accrued to July 1, 2022, the scheduled acquisition date of the Asset to be Acquired, and will have the same rights as common stock with respect to other distributions of earnings and residual assets.

For details on the acquisition scheme and monthly operating results of the Asset to be Acquired, see the "Supplementary Explanatory Material: Notice Concerning Issuance of New Investment Units and Acquisition of Domestic Real Estate" released separately today.

(Note 1) "Hoshino Resorts Group's flagship brand" refers to the core brand of Hoshino Resorts Group, which aims to provide an overwhelmingly extraordinary experience and world-standard service.

Disclaimer: This press release is for the purpose of publicly announcing the the acquisition of domestic real estate (HOSHINOYA Okinawa) by HRR and has not been prepared for the purpose of solicitation of investment. When making an investment, please ensure to read the prospectus for the issuance of new investment unis and Secondary Offering of investment units prepared by HRR and any amendments thereto. Any investments should be made based on your own assessment and at your own risk.

4

(Note 2) "The COVID-19 pandemic" refers to the severe impacts that COVID-19 has had on all industries. The same shall apply hereinafter.

(Note 3) "COVID-19 risk" refers to the risk that the spread of COVID-19 infections will cause the hotel's operating results to stagnate or deteriorate, which may result in a decrease in HRR's rental income or other adverse impacts on HRR's revenue. The same applies below.

(Note 4) The counterparty to the lease agreement is actually the New Management Corporation, but since it has not yet been established as of yet, the terms and conditions of the agreement with the New Management Corporation have been agreed with Hoshino Resorts, which is planning to be the 100% parent company of the New Management Corporation.

(Note 5) The Asset to be Acquired by HRR are co-ownership interests in the building of HOSHINOYA Okinawa and site rights, etc. (77.47% interest).

(Note 6) For more information on Class B preferred shares, refer to the press release issued by HRR on March 16, 2018, "Notice Concerning Acquisition of Assets (Class B Preferred Shares of Yomitan Hotel Management Co., Ltd.)"

(Note 7) As of today, HRR does not hold any Class A preferred shares. In addition, as of today, Class A preferred shares have priority over Class B preferred shares and common stock with respect to the distribution of surplus and residual assets.

4. Details of the Asset to be Acquired and the Lease of the Asset to be Acquired

An overview of the Asset to be Acquired and the lease of the Asset to be Acquired are shown in the table below.

The following is an explanation of the matters stated in each column of the tables below.

1. Explanation of "Overview of specified asset"
2. • 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 Asset 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 Asset 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, etc. for the Asset to be Acquired obtained from Japan Valuers Co., Ltd .
   • "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, etc. for the Asset 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 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

Disclaimer: This press release is for the purpose of publicly announcing the the acquisition of domestic real estate (HOSHINOYA Okinawa) by HRR and has not been prepared for the purpose of solicitation of investment. When making an investment, please ensure to read the prospectus for the issuance of new investment unis and Secondary Offering of investment units prepared by HRR and any amendments thereto. Any investments should be made based on your own assessment and at your own risk.

5