7th

Fiscal Period Business Report(Statement of Financial Performance)

May 1, 2017 – October 31, 2017

Hopeful future
for Japan

6-2-1 Ginza, Chuo Ward, Tokyo

http://www.nippon-healthcare.co.jp/en/

I. Overview of Nippon Healthcare Investment Corporation
To Our Investors
Message from Executive Director
We would like to express our deep gratitude to all our unitholders for your support of Nippon Healthcare Investment
Corporation (“NHI”).
NHI posted financial performance of 697 million yen in operating revenue, 273 million yen in operating income and 244
million yen in net income for the fiscal period ended October 2017 (7th Fiscal Period). Concerning distributions, NHI declareda distribution amount per unit of 3,274 yen and a distribution amount in excess of earnings per unit of 850 yen, bringing thetotal distribution amount per unit to 4,124 yen. See page 3 for Financial and Management Highlights
The asset size as of the end of the 7th Fiscal Period stood at 19,318 million yen. NHI will aim to enhance portfolio
value through investments in carefully selected properties going forward.

See pages 4 and 5 for details of Growth Strategy

The number of operators of facilities owned by NHI as of the end of the 7th Fiscal Period is 11 companies. NHI has realized
maintenance and improvement of portfolio stability by pressing forward diversification of operators and concluding longterm fixed rent lease agreements. See page 7 for Stable Management Strategy
On the financial front, NHI will continue to work to further strengthen its financial
standing while reducing refinancing risks in the future. See page 10 for Financial Conditions
Going forward, NHI will strive to maximize unitholders’ value together with the joint
efforts of Daiwa Real Estate Asset Management Co. Ltd., the asset manager for NHI,
Daiwa Securities Group Inc., the sponsor, and AIP Healthcare Japan GK, the advisor.
We wish for the continued success of our unitholders and ask for yourcontinued support of NHI.

Hiroshi Takeuchi Nippon Healthcare Investment Corporation Executive Director
Contents

I. Overview of Nippon Healthcare Investment Corporation
To Our Investors……………………………………………… 2
Financial and Management Highlights………………………… 3
Characteristics and Growth Strategy of
Nippon Healthcare Investment Corporation… ………………… 4
Portfolio Status……………………………………………… 6
Stable Management Strategy………………………………… 7
Portfolio List………………………………………………… 8

II. Investor Information…………………………………… 12
III. Asset Management Report…………………………… 14
IV. Balance Sheets… ……………………………………… 20
V. Statements of Income………………………………… 22
VI. Statements of Changes in Net Assets… ………… 23
VII. Statements of Cash Flows…………………………… 23

Portfolio Map………………………………………………… 9
Financial Conditions… ……………………………………… 10
Description of Asset Manager………………………………… 11

VIII. Notes to Financial Statements……………………… 24
IX. Independent Auditor’s Report……………………… 33
Please refer to the pages starting from the back cover for information on the operators.

2

Financial and Management Highlights
Steady growth in asset size and maintenance of stable distribution level■ Actual Financial Results for Fiscal Period Ended October 2017 (7th Fiscal Period), and Financial Results Forecasts for Fiscal PeriodEnding April 2018 (8th Fiscal Period) and Fiscal Period Ending October 2018 (9th Fiscal Period)
6th Fiscal
Period

7th Fiscal
Period(result)(result)(April 2017) (October 2017)

Difference

8th Fiscal Difference
from 7th
Period(April 2018)
Fiscal(forecast)
Period

9th Fiscal Difference
from 8th
Period(October 2018) Fiscal(forecast)
PeriodNo. of properties owned at the end of the
fiscal period

22

22

-

22

-

22

-

Operating revenue (million yen)

697

697

-0

697

+0

697

-0

Operating expenses (million yen)

419

424

+4

427

+2

427

-0

Operating income (million yen)

277

273

-4

270

-2

270

-0

Non-operating expenses (million yen)

27

27

+0

27

-0

28

+0

Ordinary income (million yen)

250

245

-5

242

-2

242

-0

Net income (million yen)

249

244

-5

241

-2

241

-0

■ Distribution Result for 7th Fiscal Period, Distribution Forecasts for 8th Fiscal Period and 9th Fiscal Period(result)(result)

74,632

74,632-

74,632-

74,632

-

4,143

4,124

-19

4,100

-24

4,100

-

3,343

3,274

-69

3,240

-34

3,230

-10

800

850

+50

860

+10

870

+10

(including distribution in excess of earnings) (yen)Distribution per unit

(excluding distribution in excess of earnings) (yen)Distribution in excess of earnings
per unit (yen)■ Operating Revenue■ Operating Income■ Net Income(million yen)
1,000

(million yen)600

(million yen)
400

500

800

300

600
400

9th Fiscal Difference
from 8th
Period(October 2018) Fiscal(forecast)
Period

7th Fiscal
PeriodDifference(April 2017) (October 2017)
Number of investment units issued andoutstanding at the end of the fiscal period (units)
Distribution per unit

8th Fiscal Difference
from 7th
Period(April 2018)
Fiscal(forecast)
Period

6th Fiscal
Period

697

679

667

697

400
300

555

200

200

260

200

289

277

274

224

246

249

244

5th FP

6th FP

7th FP

200

273
100

100
0

0
3rd FP

4th FP

5th FP

6th FP0
3rd FP

7th FP

4th FP

5th FP

6th FP

7th FP

3rd FP

4th FP■ Distribution per Unit (including distribution in excess of earnings)
(yen)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

Distribution inexcess of
earnings per unit
Distribution
per unit
excluding
distribution inexcess of
earnings

（

）

3,471

4,067
768

4,295
800

4,106

4,143

4,124

4,100

4,100

800

800

850

860

870

3,306

3,343

3,274

3,240

3,230

810
2,661

3,299

3,495

Fiscal Period
Fiscal Period
Fiscal Period
Fiscal Period
Fiscal Period
Fiscal Period
Fiscal Period
Fiscal Period
ended April 2015 ended October 2015 ended April 2016 ended October 2016 ended April 2017 ended October 2017 ending April 2018 ending October 2018
(2nd FP)(3rd FP)(4th FP)(5th FP)(6th FP)(7th FP)(8th FP)(9th FP)I. Overview of Nippon Healthcare Investment Corporation

3

Characteristics and Growth Strategy of Nippon Healthcare Investment Corporation
Contributing to society and delivering returns to unitholders through substantial support system

Characteristics of NHI

1
2
3
4
5

Investment in social infrastructure to contribute to society

NHI will contribute to the development of quality healthcare facilities which serve as social infrastructure.

Growth through investment in the growing senior market

Social demand for healthcare facilities is expected to grow through further aging of the population.

Stable cash flow

NHI signs long-term fixed-rent lease agreements with operators of healthcare facilities. (Average remaining lease contract period of 17.5 years)

Unitholder return policy utilizing asset characteristics

NHI will implement unitholder returns through distributions in excess of earnings utilizing the asset characteristic of a high rate of depreciation.

Substantial support system and strong independence

NHI will develop the support system that brings together the comprehensive strengths of Daiwa Securities Group Inc. (sponsor) and AIP Healthcare
Japan GK (advisor).

■ Ratios of Investment in Regions
Region■ Ratios of Investment in Healthcare Facility Types
Targetincorporation
ratio

Definition

Tokyo, Kanagawa, Chiba and Saitama
Three Major The greater Tokyo area: prefectures
Metropolitan
The Chukyo area: Aichi, Mie and Gifu prefecturesAreas
The Kinki area: Osaka, Kyoto, Hyogo, Nara and Shiga prefectures

50%

or moreCore City
Areas

Cities outside the Three Major Metropolitan Areas withpopulations of 200,000 or more

50%
or less

Other

Cities outside the Three Major Metropolitan Areas and the Core
City Areas with populations under 200,000

10%or less

Classification of healthcare facility

Fee-based homes for the elderly (Note 1)
Private nursing nursing care/health-type/residential-type) (withhomes and other60%
facilities for the Elderly housing with supportive services (Note 2)
or moreelderly
Other private nursing homes and facilities for the elderly
Medical facilities
40% or less

10% or less

Other

(Note 1) “Fee-based homes for the elderly” refer to facilities as defined by Article 29 of the Act on
Social Welfare for the Elderly. However, this excludes facilities that fall under the category ofelderly housing with supportive services.
(Note 2) “Elderly housing with supportive services” refers to rental housing registered with prefecturesthat meet the registration criteria stipulated by the Act on Securement of Stable Supply for
Elderly Persons’ Housing.

■ Asset Size (total amount of acquisition prices)

External growth through acquisition of carefully selected properties(million yen)

30,00025,000

Listing asJapan’s
first healthcare
REIT

20,00013,28015,000Total

14 properties

External growth through fund procurement including
the first public offering by a listed healthcare REIT

16,058Total

17

18,608Total

21

properties

19,318Total

22properties

Further expansion of asset size through formationof bridge funds, etc. utilizing sponsor support(Several preferential negotiation rights in theThree Major Metropolitan Areas including Tokyoof around 10 billion yen have been acquired.)

19,318Total

22properties

19,318Total

22properties

properties

10,0005,000
0At the time of listing4

Fiscal Period ended
October 2015 (3rd FP)

Fiscal Period endedApril 2016 (4th FP)

Targetincorporation
ratio

Fiscal Period ended
October 2016 (5th FP)

Fiscal Period endedApril 2017 (6th FP)

Fiscal Period ended
October 2017 (7th FP)

■ Status of Property Acquisition by Sourcing Route
Properties acquired before listing
14 properties/13,280 million yen

Properties acquired in the 3rd FP
3 properties/2,778 million yen

Properties acquired in the 4th FP
4 properties/2,550 million yen

Properties acquired in the 5th FP
1 property/710 million yen

6th FP, 7th FP ~Alpha Living Okayama
Nishigawa Ryokudokoen
Alpha Living Okayama Korakuen

Asset Management
Company’s unique
network

Offbalancing
in line with
M&A

5 properties/
3,750 million yen

Alpha Living Takamatsu Ekimae

Silver Heights Hitsujigaoka No.3
Acquisition price: 1,200 million yen

Alpha Living Takamatsu
Hyakkenmachi

Sales & 4 properties
Leaseback Acquisition price: 2,550 million yen
・M&A cases for businesssuccession
・Needs for securing liquidity on
hand・Properties sold by developergroup which owns operators
・Exclusive needs for facility
management

・Proactively discussing
development properties
in addition to information
on existing facilities
obtained from thesourcing routes

Minna-no-ie Omiya Yoshinocho
Minna-no-ie Chuo-ku En'nami
2 properties

Sponsor group

Change of Acquisition price: 1,578 million yen
Owners2 properties/
1,578 million yen

Advisor15 properties/
13,990 million yen

・Properties introduced by thesponsor group
・Needs for asset managementfrom owners
Sompo no ie Nishitanabeekimae

Change of Acquisition price: 710 million yen
Owners ・Needs for asset management

14 properties/
13,280 million yen

from owners

・Acquisition of preferential
negotiation rights in theThree Major Metropolitan
Areas including Tokyo in
the amount ofapproximately 10.0
billion yen

Sponsor’s bridge
funds
Approximately
10.0 billion yen

Properties Renovated in the 7th Fiscal Period
・At Sawayaka Hinodekan, implemented renovation work contributing to high occupancy rates (100%) by conducting repair work for maintaining
the esthetic appearance in order to stay competitive with rival properties in the surrounding area.
・At Sompo Care LAVIERE Sagamihara Chuo, the interior finishing was renovated from the stately one from the time it was constructed 10 years
ago to one now based on light color tones. The occupancy rate was up 10 percentage points from the end of the 6th Fiscal Period to 67.5% at theend of the 7th Fiscal Period.
・Proactive implementation of necessary repair work has led to higher satisfaction of not only the residents and their families but also of facility
employees, and has also resulted in a stronger relationship with the operator.

■ Sawayaka Hinodekan (Acquisition price: 773 million yen)

Sompo Care LAVIERE Sagamihara Chuo (Acquisition price: 1,170 million yen)

Site Features
Located approximately 1.7km from
Niigata Station on the JR Joetsu
Shinkansen and Shin-etsu Main Line
Property Features
The Property provides standard size privaterooms for specified facilities designed forpeople requiring long-term care, and therooms are equipped with sink and toilet.

Renovation of exterior walls (Construction amount: 16 million yen)
Before construction work

After construction work

Site Features
Located approximately 1.2km from
Sagamihara Station on the JR Yokohama
Line
Property Features
The Property provides rooms of 18m2 or
more, which is the standard size for rooms
designed for people requiring long-termcare, and the rooms are equipped with sink,
toilet and bed

Beautification of 1F entrance portion (Construction amount: 3 million yen)
Before construction work

Before construction work

Entrance

Entrance

Elevator

Elevator

I. Overview of Nippon Healthcare Investment Corporation

5

Portfolio Status
Focusing investment on private nursing homes and other facilities for the elderly for which large demand is expected

Diversification Status■ Region■ TypeElderly housingwith supportive
services

3.1%
Core City
Areas

Nihon Kaigo Iryo
Center 4.9%
Silver Heights
Sapporo

6.2%
Cedar
6.6%

Three Major
Metropolitan
Areas

38.9%

■ Operator

Super Court

61.1%

Sompo Care Message 3.7%
Nichii Gakkan 1.4%
Sompo
Care Next

20.5%
Sawayaka
Club

17.1%

8.1%

AnabukiMedical Care
WisnetFee-based home for the elderly 96.9%
With nursing care 67.0%
Residential-type 29.9%

13.2%

8.2%

Charm Care Corporation 10.1%(Note) The ratios in the above three pie charts are calculated based on total acquisition prices, and rounded to the first decimal place

Portfolio Status■ Proportion of Long-Term Care Fee (Note 2)■ Rent-Paying Capacity (Note 1)

More than 60%,
but 70% or less1.2x or less

29.7%

19.7%

More than 15%,
but 20% or less

5.6%

More than
2.0x■ Proportion of One-Time Entrance Fee
Amortization Income (Note 3)

2.7%

12.1%

49.8

1.5x

More than% 50％ or less
50%, but
60% or less on average 43.5%

More thanbut
on average 2.0x1.5x,
or lessMore than
38.6%
1.2x, but
1.5x or less

50.9%

More than
5%, but 15%
or less

4.1% 5% or less

36.8% on average 60.6%(Note 1) “Rent-paying capacity” refers to the multiple obtained by dividing the respective acquired asset's most recent EBITDAR by rent. EBITDAR ＝ Operating Income + Depreciation + Rent
(Note 2) “Proportion of long-term care fee” refers to the proportion of the acquired asset's net sales that is accounted for by long-term care fee (including residents’ co-payment portion).
(Note 3) “Proportion of one-time entrance fee amortization income” refers to the proportion of the acquired asset's net sales that is accounted for by one-time entrance fee amortization income(*) Data are based on information on business income and expenditures from October 2016 to September 2017 disclosed by the respective operator. However, data for Nichii Care Center Fukushima
Omori are based on information on business income and expenditures from July 2016 to June 2017; for La’nassica Arakogawa from April 2016 to March 2017; for Silver Heights Hitsujigaoka No.3
from September 2016 to August 2017.

■ Portfolio Occupancy Rates(%)
100

Total resident capacity (right axis)

Occupancy rate (left axis)

80

1,600

60

1,200

40

800

20

400

0

0
Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sept. Oct.
2014
2015
2016
2017

Stableoccupancy rates

・The overall occupancy rate rose by 2.9% from 86.6% at the end of April 2017 to 89.5% at the end of October 2017.
・The period average rose by 1.0% from 86.3% for the 6th Fiscal Period to 87.3% for the 7th Fiscal Period.

(Note 1) Occupancy rates are obtained by dividing the number of residents based on interviews with all facilities at the end of each month, by resident capacity.

6(persons)
2,000

Stable Management Strategy
Concluding long-term fixed rent lease agreements

Lease Agreements with Highly Reliable Operators
Number of facilities Number of rooms
operated (cases) operated (rooms)(Note 1)
(Note1 and 2)
425
13,793Operator
Nichiigakkan Co., Ltd.
Sompo Care Message Inc.

317

17,273

Wisnet Co., Ltd.

127

3,556

Sompo Care Next, Inc.

117

8,826

Sawayaka Club Co., Ltd.

74

4,270

Super Court Co., Ltd.
Cedar Co., Ltd.
Charm Care Corporation
Anabuki Medical Care Inc.
Nihon Kaigo Iryo Center Co., Ltd.
Silver Heights Sapporo Co., Ltd.

48
42
40
29
25
3

3,209
2,254
2,866
1,291
1,033
321

Established

Attributes

August 1973 Listed on the first section of the Tokyo Stock Exchange
Subsidiary of Sompo Holdings, Inc., a company listed on the first section of the Tokyo Stock
May 1997 Exchange
Subsidiary of Sohgo Security Services Co., Ltd. a company listed on the first section of theJanuary 1998
Tokyo Stock Exchange
November 1992 Subsidiary of Sompo Holdings, Inc., a company listed on the first section of the Tokyo Stock
Exchange
Subsidiary of Uchiyama Holdings Co., Ltd., a company listed on the first section of the Tokyo
December 2004 Stock Exchange
May 1995 April 1981 Listed on JASDAQ Standard on the Tokyo Stock Exchange
August 1984 Listed on JASDAQ Standard on the Tokyo Stock Exchange
June 2009 Subsidiary of Anabuki Kosan Inc., a company listed on the first section of the Tokyo Stock Exchange
October 1997 December 1961 -(Note 1) Number of facilities operated and Number of rooms operated indicate the number of facilities and the number of rooms for fee-based homes for the elderly, group homes and elderly housing with supportive
services based on operators’ websites and interviews with them (as of November 30, 2017).
(Note 2) Operators are indicated in order of the number of facilities they operate.

Overview and Status of Management Back-Up Agreement
No. of Operators: 11
Investment
Corporation

Management

Asset
Manager

Hokkaido Area

No. of Operators: 5

Ownership

Chubu Area

Healthcare
facility A

Operator A

Healthcare
facility B

Operator B

Healthcare
facility C

Operator C

Each operator has
concluded amanagement
back-upagreement with NHI.
Discuss handoverof operation to otheroperators in caseof contingency

No. of Operators: 5

Chugoku Area

No. of Operators: 5

Kyushu Area

No. of Operators: 5

Management Back-Up Contractors

Tohoku Area

No. of Operators: 4

Kanto Area

No. of Operators: 7

Kinki Area

No. of Operators: 9

Shikoku Area

No. of Operators: 5

Development of Quality Portfolio through Careful Selection and Continuous Evaluation of Operators■ Business Operation Cycle
Common items for evaluation at the time of new acquisitionand continuous evaluation• Quality and variety of services that the operator provides• Credibility and operational skills of the operator
Quantitative
Perspective•Stability, profitability, growth potential and productivity of the operator’s
finances•Stability, profitability, growth potential of the operator’s healthcare business•The company’s history and the number of years in business (The items are
confirmed on the basis that such financial data, etc. be provided by theoperator.)

Qualitative
Perspective•The operator’s attitude towards information disclosure•Degree of importance, etc. of healthcare-related business in the operator
group•Strength, securement of human resources, etc. at the healthcare facility•Working environment and employment situation of facility workers•Compliance system at the operator or at each facility (Documents provided
by the operator, results of interviews and research by outside experts, etc.
are used for confirming the items.)

Conducting the same evaluation as at the time of acquisitioneven after acquisition• Four members are placed in the Healthcare Management Team.
• Regularly conduct the same evaluation as at the time of property acquisition.
• In addition, visit facilities, etc. and conduct facility monitoring, interviews,
etc. including the following.
Monitoring (Twice or more/year)· The Asset Manager and PM companies visit operators’ facilities andconduct examinations every fiscal period.
Interviewing (Once or more/year)· Confirming the following items with directors and care providers at facilities:(1) Responses to residents(2) Employees training program(3) Status of governance (including items to check for prevention of resident
mistreatment)

I. Overview of Nippon Healthcare Investment Corporation

7

Portfolio List (as of October 31, 2017)
Consists of 11 operators and 22 properties

Acquisition(Note 1)
periodNo

Property nameFacility type

(Note 1)

(Note 1)

Operator

1

Fee-based homes for Charm Care
1st Fiscal
Charm Suite Ryokuchi Koen the elderly with
PeriodCorporation
nursing care2

2nd Fiscal Super Court
Period JR Nara-Ekimae

3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

Residential-type
fee-based homes forthe elderly
Fee-based homes for
1st Fiscal Sompo Care LAVIER
the elderly with
Period Hiroshima Hikarigaoka
nursing careFee-based homes for
1st Fiscal Sompo Care LAVIER
the elderly with
Period Sagamihara Chuo
nursing careFee-based homes for2nd Fiscal Sompo Care LAVIER
the elderly with
Period Kinugasayama Koen
nursing careFee-based homes for
1st Fiscal
the elderly with
Sawayaka Kaikyokan
Periodnursing careFee-based homes for
1st Fiscal
the elderly with
Sawayaka Meisuikan
Periodnursing care
Residential-type
SawayakaHeart
Life
1st Fiscal
fee-based homes for
Period Nishikyogoku
the elderly
Fee-based homes for2nd Fiscal
the elderly with
Sawayaka Hinodekan
Periodnursing care
Residential-type
2nd Fiscal Sawayaka Riverside
fee-based homes for
Period Kurinoki
the elderly
Residential-type
2nd Fiscal Sawayaka Obatakefee-based homes for
Period Sanbankan
the elderly
Fee-based homes for
1st Fiscal Nichii Care Center
the elderly with
Period Fukushima Omori
nursing careFee-based homes for2nd Fiscal
the elderly with
La’nassica Arakogawa
Periodnursing care
Residential-type
1st Fiscal
fee-based homes forVerger Hirakata
Periodthe elderly
Fee-based homes for
Minna-no-ie
Omiya
3rd Fiscal
the elderly with
Period Yoshinocho
nursing careFee-based homes for3rd Fiscal Minna-no-ie Chuo-ku
the elderly with
Period En’nami
nursing carehomes for3rd Fiscal Silver Heights Hitsujigaoka Fee-based
the elderly with
Period No. 3
nursing care
Residential-type
4th Fiscal Alpha Living Okayama
fee-based homes for
Period Nishigawa Ryokudokoen
the elderly
Residential-type
4th Fiscal Alpha Living Okayama
fee-based homes for
Period Korakuen
the elderly
Residential-type
4th Fiscal Alpha Living Takamatsu
fee-based homes for
Period Ekimae
the elderly

Fiscal Alpha Living Takamatsu
21 4thPeriod
Hyakkenmachi

Elderly housing withsupportive services

Fiscal Sompo no ie
22 5thPeriod
NishitanabeekimaeFee-based homes forthe elderly withnursing care

Location

Acquisition priceAppraisal Number Occupancy Occupancy(million yen) (Note 2)
value
of rooms rate in the rate in the
Share of (million yen) (rooms) 6th FP (%) 7th FP (%)
portfolio(Note 5)(Note 6)(Note 3)(Note 4)(%)

Toyonaka City,
Osaka

1,950

10.1

3,060

128

96.0

98.4

Super Court Co., Ltd. Nara City, Nara

1,569

8.1

1,750

155

89.6

86.4

Hiroshima City,
Hiroshima

960

5.0

1,230

80

83.7

80.0

Sagamihara City,
Kanagawa

1,170

6.1

1,750

80

57.5

67.5

Yokosuka City,
Kanagawa

1,839

9.5

2,060

104

92.3

86.5

Kitakyushu City,
Fukuoka

630

3.3

899

65

100.0

93.8

Kitakyushu City,
Fukuoka

590

3.1

813

87

100.0

100.0

Kyoto City, Kyoto

750

3.9

1,190

84

97.6

100.0

Niigata City,
Niigata

773

4.0

921

50

100.0

100.0

Niigata City,
Niigata

266

1.4

324

33

82.0

92.3

Kitakyushu City,
Fukuoka

289

1.5

355

50

94.0

92.0

Nichiigakkan Co.,
Ltd.

Fukushima City,
Fukushima

265

1.4

353

52

100.0

100.0

Cedar Co., Ltd.

Nagoya City, Aichi

1,279

6.6

1,430

100

100.0

99.0

Nihon Kaigo Iryo
Center Co., Ltd.

Hirakata City,
Osaka

950

4.9

1,600

104

75.7

68.2

Saitama City,
Saitama

740

3.8

779

33

81.8

78.7

Saitama City,
Saitama

838

4.3

859

51

Sapporo City,
Hokkaido

1,200

6.2

1,340

Okayama City,
Okayama730

3.8

Okayama City,
Okayama

610

Takamatsu City,
Kagawa

Sompo Care Next
Inc.

Sawayaka Club
Co., Ltd.

Wisnet Co., Ltd.

-

(Note 7)

58.8

109

94.5

90.0

789

53

65.4

81.8

3.2

672

45

83.3

95.8

605

3.1

641

43

97.7

88.6

Takamatsu City,
Kagawa

605

3.1

628

50

92.5

88.8

Osaka City, Osaka

710

3.7

741

42

92.8

97.6

11 operators 22 properties Total 19,318

100.0

24,184

1,598

-

-

Silver Heights
Sapporo Co., Ltd.

Anabuki Medical
Care Inc.

Sompo Care
Message Inc.

(Note 1) Red numbers refer to Three Major Metropolitan Areas and blue numbers to Core City Areas. The background colors for “Property name” and “Facility type” columns indicate types of facilities; orange for feebased homes for the elderly with nursing care, blue for residential-type fee-based homes for the elderly and yellow-green for elderly housing with supportive services.
(Note 2) “Acquisition price” is excluding consumption tax, local consumption tax and the various expenses required for the acquisition. “Share of portfolio” is the respective acquisition price expressed as a percentageof the total of the acquisition prices, rounded to the first decimal place. Therefore, the total of “Share of portfolio” may be different from the figure indicated in “Total.”(Note 3) “Appraisal value” is as of October 31, 2017.
(Note 4) “Number of rooms” is the figure indicated in the written explanation of important matters pertaining to the fee-based home for the elderly provided by the operator.
(Note 5) “Occupancy rate” is obtained by dividing the number of residents indicated in the written explanation of important matter received in June 2017 from operators by the resident capacity, rounded down to one
decimal place.
(Note 6) “Occupancy rate” is obtained by dividing the number of residents indicated in the written explanation of important matters received in December 2017 from operators by the resident capacity, rounded down to
one decimal place.
(Note 7) The number of residents was zero at the end of April 2017 because Minna-no-ie Chuo-ku En’nami suspended operations from January 2017.

8

Portfolio Map (as of October 31, 2017)
Making diversified investment in healthcare facilities in Japan

Three Major Metropolitan Areas
1

2

4

5

8

13

Charm Suite
Ryokuchi Koen

Super Court
JR Nara-Ekimae

Sompo Care LAVIER
Sagamihara Chuo

Sompo Care LAVIER
Kinugasayama Koen

Sawayaka Heart Life
Nishikyogoku

La’nassica Arakogawa

14

15

16

Toyonaka City, Osaka

Nara City, Nara

Sagamihara City, Kanagawa

Yokosuka City, Kanagawa

Kyoto City, Kyoto

Nagoya City, Aichi

17 Silver Heights Hitsujigaoka No. 3

Verger Hirakata
Hirakata City, Osaka

Minna-no-ie
Omiya Yoshinocho
Saitama City, Saitama

9 Sawayaka Hinodekan

Minna-no-ie
Chuo-ku En’nami

10 Sawayaka Riverside

Saitama City, Saitama

22

Kurinoki

8 Sawayaka Heart Life Nishikyogoku
1 Charm Suite Ryokuchi Koen
12 Nichii Care Center

19 Alpha Living Okayama Korakuen

Fukushima Omori

18 Alpha Living Okayama Nishigawa Ryokudokoen
3

15 Minna-no-ie Omiya Yoshinocho

Sompo Care LAVIERE Hiroshima Hikarigaoka

16 Minna-no-ie Chuo-ku En’nami
5 Sompo Care LAVIER

Sompo no ie
Nishitanabeekimae

Kinugasayama Koen

11 Sawayaka Obatake Sanbankan

Osaka City, Osaka

4 Sompo Care LAVIER

6 Sawayaka Kaikyokan

13 La’nassica Arakogawa

7 Sawayaka Meisuikan

Sagamihara Chuo

2 Super Court JR Nara-Ekimae
14 Verger Hirakata
22 Sompo no ie Nishitanabeekimae
21 Alpha Living Takamatsu Hyakkenmachi
20 Alpha Living Takamatsu EkimaeCore City Areas
3

6

7

9

10

11

Sompo Care LAVIER
Hiroshima Hikarigaoka

Sawayaka Kaikyokan

Sawayaka Meisuikan

Sawayaka Hinodekan

Sawayaka Riverside
Kurinoki

Sawayaka Obatake
Sanbankan

12

17

18

19

20

21

Nichii Care Center
Fukushima Omori

Silver Heights
Hitsujigaoka No. 3

Alpha Living Okayama
Nishigawa Ryokudokoen

Alpha Living Okayama
Korakuen

Alpha Living Takamatsu
EkimaeAlpha Living Takamatsu
Hyakkenmachi

Kitakyushu City, Fukuoka

Kitakyushu City, Fukuoka

Niigata City, Niigata

Hiroshima City, Hiroshima

Fukushima City, Fukushima

Niigata City, Niigata

Sapporo City, Hokkaido

Okayama City, Okayama

Okayama City, Okayama

Takamatsu City, Kagawa

Kitakyushu City, Fukuoka

Takamatsu City, Kagawa(Note) Red numbers refer to Three Major Metropolitan Areas and blue numbers to Core City Areas. The background colors for property names indicate types of facilities; orange for fee-based homes for the elderly withnursing care, blue for residential-type fee-based homes for the elderly and yellow-green for elderly housing with supportive services.

I. Overview of Nippon Healthcare Investment Corporation

9

Financial Conditions
Conducting stable financial management by converting interest rate into a fixed rate and diversifying repayment dates

Status of Interest-Bearing Liabilities (as of October 31, 2017)
Term

Balance(million yen)

LenderShort-term
Mizuho Bank
(Note 2)Current portion Sumitomo Mitsui Trust Bankof long-term The Dai-ichi Life Insurance
loans payable Shinkin Central Bank (Note 2)Long-term

500
1,200
500
400
1,200
1,000
700
500
500
500
500
500
800
500
500
9,800

Resona Bank (Note 2)
Mizuho Bank (Note 2)
Mizuho Trust & Banking (Note 2)
Mizuho Bank (Note 2)
Mizuho Trust & Banking (Note 2)
The Musashino Bank (Note 2)
Resona Bank (Note 2)
Sumitomo Mitsui Trust Bank (Note 2)
Mizuho Bank
Shinkin Central Bank
The Musashino Bank
Total

Type of interest
Floating
Fixed

Fixed

Floating-

Interest rate(%) (Note 1)

Drawdown date

Tibor+0.300 September 29, 2017
0.431
November 5, 2014
0.431
0.293
October 15, 2015
0.532
0.532
November 5, 2014
0.532
0.524
0.524
June 1, 2015
0.524
0.474
October 15, 2015
0.138
April 28, 2016
Tibor+0.275
Tibor+0.175
October 31, 2017
Tibor+0.250-

Repayment deadline
September 28, 2018
October 31, 2018

October 31, 2019

May 29, 2020
October 30, 2020
April 30, 2020
October 31, 2022
October 30, 2020
April 28, 2022-

(Note 1) Interest rates are rounded to the third decimal place.
(Note 2) For loans of which floating interest rates have been converted to, in effect, fixed rates through a swap agreement, interest rate indicates the rate after such conversion.

■ Ratio of Long-Term Loans
and Short-Term Loans
Payable■ Ratio of Fixed Rates
and Floating Rates

Short-term loans
payable and current
portion of long-termloans payable

Ratio offloating rate

23.5%

26.5%

Long-term loans payable

Ratio of fixed rate

73.5%

76.5%

■ Repayment Schedule(million yen)
3,000
2,500

2,900
2,600

2,500

Average remaining
period (Note 1)

2.3 years

LTV (Note 2)

46.2%

2,000
1,500
1,000

800
500

500

500

0
8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP
ending ending ending ending ending ending ending ending ending ending
Apr. 2018 Oct. 2018 Apr. 2019 Oct. 2019 Apr. 2020 Oct. 2020 Apr. 2021 Oct. 2021 Apr. 2022 Oct. 2022

(Note 1) Average remaining period is rounded to the first decimal place.
(Note 2) LTV is calculated based on total assets.

Indices that Include NHI

10Month/year

Name of index

September 2015

Thomson Reuters GPR / APREA Composite Index

Description of Asset Manager

Organization of Asset Manager (as of December 1, 2017 )■ Corporate Profile■ Directors and Auditors

Company Name
Address
Established
Paid-in Capital
President

Daiwa Real Estate Asset Management Co., Ltd.
6-2-1 Ginza, Chuo-ku, Tokyo
October 21, 2004
200 million yen
Akira Yamanouchi

Board of Directors

10
Executive directors: 5 Executive auditors: 1
Non-executive directors: 2; Non-executive auditors: 2

Employees
63 (excluding dispatched employees)
Registration of Financial
Registration No. 355 (Financial Instruments), Director
Instruments Business Operator General, Kanto Local Finance Bureau (Kinsho)

President and Representative Director
Vice President and Representative Director
Vice President and Representative Director
Director
Director
Director (non-executive)
Director (non-executive)
Auditor
Auditor (non-executive)
Auditor (non-executive)

Akira Yamanouchi
Yuji Shinotsuka
Yoshiki Nishigaki
Toshio Fukushima
Hajime Imbe
Mikita Komatsu
Naoya Otani
Tamaki Shibayama
Morimasa Matsuda
Shinji Kiso

Building Lots and Buildings
Transaction Business License

License No. (3)-83920, Governor of Tokyo

Discretionary Agent for Real
Estate Transaction Approval

License No. 34, Minister of Land, Infrastructure, Transport
and Tourism

Shareholders’ Meeting

Association Membership

Member of The Investment Trusts Association, Japan
Member of Japan Investment Advisers Association
Member of Type II Financial Instruments Firms Association

Board of Directors■ Organizational Chart
Corporate Auditors
Compliance Committee

Compliance Officer

Investment Committee（*）
President andRepresentative Director
Acquisition and Asset Management Division

Private Fund Division

Origination
Department

Private FundManagement Department

Acquisition
Department
OfficeInvestment Team
Residential
Investment Team
Healthcare
Investment Team

Asset Management
Department
OfficeManagement Team
Residential
Management Team
Healthcare
Management Team
Investment
Planning Team
Construction
Management TeamInternal Control Office

Corporate Division
Customer Relations
Department

Finance
Department

Administration
Department

Corporate Planning
Department

Finance Team
Accounting TeamManagement Team

*Set up separately for each
investment corporation.

Structure
Asset Custodian②

Investment Corporation③

Administrator of Unitholders’ Register

Mizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Trust Bank, Ltd.

Management Back-Up Contractors
Sawayaka Club Co., Ltd.
Cedar Co., Ltd.
Super Court Co., Ltd.
Charm Care Corporation
Nichiigakkan Co., Ltd.
Nihon Kaigo Iryo Center Co., Ltd.
Sompo Care Next Inc.
Wisnet Co., Ltd.
Silver Heights Sapporo Co., Ltd.
Anabuki Medical Care Inc.
Sompo Care Message Inc.

General Meeting of Unitholders⑤

Board of Directors
Executive Director: Hiroshi Takeuchi
Supervisory Director: Tomohiko Shimizu
Supervisory Director: Chizuko Nakata④

General Administrator (Accounting, etc.)
Heiseikaikeisha Tax Corporation

Accounting Auditor
KPMG AZSA LLC①
Specially Related Company(Parent company of the Asset Manager)⑥

Asset Manager General Administration

Sponsor(Organization)

Daiwa Securities Group Inc.

Daiwa Real Estate Asset Management Co., Ltd.

⑦

AdvisorAIP Healthcare Japan GK① Asset management agreement/General administration affairs agreement related to operation ④ General administrator of accounting agreement② Asset custodian agreement⑤ Management back-up agreement③ General administrator of unitholders’ registry agreement⑥ Sponsor support agreement⑦ Advisory agreement

I. Overview of Nippon Healthcare Investment Corporation

11

II. Investor Information
History of Investment Unit Prices(yen) 240,000

6,000 (units)
Unit price (left axis)

Volume (right axis)

200,000

5,000

160,000

4,000

120,000

3,000

80,0002,000

40,000

1,000

0

0
Nov.
2015

Dec.

Jan.
2016

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2017

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Overview of Investment Units and Unitholders (as of October 31, 2017)■ No. of Investment Units by Investor TypeFP ended
October 2017
(7th FP)
Total 74,632 units

FP ended
April 2017
(6th FP)

Financial institutions
19,266 units (25.8%)

Individuals/others
38,649 units (51.8%)■ No. of Unitholders
by Investor Type
Foreigners 2,978 units (4.0%)

Other domestic companies 12,280 units (16.5%)
Securities companies 1,459 units (2.0%)
Financial institutions
22,470 units (30.1%)

Individuals/others
36,048 units (48.3%)

Total 74,632 units

Foreigners 2,624 units (3.5%)

Other domestic companies 12,404 units (16.6%)
Securities companies 1,086 units (1.5%)

Top Ten Unitholders (as of October 31, 2017)
Name of Investor

12

Number of Percentage
Units Owned
Share(units)
(%)
7,600

10.2

2. The Master Trust Bank of Japan, Ltd. (Trust Account)

6,446

8.6

3. Japan Trustee Services Bank Ltd. (Trust Account)

4,458

6.0

The Nomura Trust and Banking Co., Ltd.
4.
(Investment Trust Account)

1,918

2.6

Trust & Custody Services Bank Ltd.
(Securities Investment Trust Account)

1,458

2.0

6. Fukui Medical Credit Association

1,145

1.5

7. Daiwa Real Estate Asset Management Co., Ltd.

1,000

1.3

8. Osaka Shinkin Bank

887

1.2

9. THE BANK OF NEW YORK MELLON 140044

850

1.1

10. UENOYA BUILDING Co. Ltd.

693

0.9

Total

26,45535.5(Note) Rounded to the first decimal place

9,553(97.6%)

Financial
institutions
Other domestic
companies

25(0.3%)

Foreigners

47(0.5%)

Securities
companies

27(0.3%)

Total

9,790

138
(1.4%)(Note) Rounded to the first decimal place

IR Calendar

1. Daiwa Securities Group Inc.

5.

Individuals/others

December 19, 2017・Announcement of results
for the fiscal period ended October 2017
January 22, 2018・Sending of Financial and Management
Status Report (Asset Management Report)
for FP ended October 2017
January 23, 2018・Commencement of payout of distributions
for the fiscal period ended October 2017

Oct.
July Account closing
month
June
Dec.
Account closing
month
Jan.
Apr.
June 2018・Announcement of results for the
fiscal period ending April 2018
July 2018・Sending of Financial and Management
Status Report (Asset Management Report)
for FP ending April 2018
July 2018・Commencement of payout of distributions
for the fiscal period ending April 2018

Investor Memo
End of fiscal period

April 30 and October 31 of each year

General Meeting of Unitholders

Held at least once every two years

Date for finalizing Unitholders with voting
rights for the General Meeting of Unitholders Date publicly announced beforehand
Reference date for finalizing payment of April 30 and October 31 of each year (distributions are paid within three months of the reference date)
distributions
Listed financial instruments exchangeTokyo Stock Exchange (securities code: 3308)

Newspaper in which notice is posted

The Nikkei

Manager of Unitholder Registry, etc.

Sumitomo Mitsui Trust Bank, Limited, 1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233

Office handling administrative affairs

Transfer Agency Department of Sumitomo Mitsui Trust Bank, Limited, 2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Phone 0120-782-031 (toll-free in Japan)

Service counter

Head Office and all branches of the Sumitomo Mitsui Trust Bank nationwide

Procedures for Changing Address, Etc.
Please notify the securities company you are dealing with for changes in address, name, etc. For procedures concerning investment units recorded in
special account, please contact Stock Transfer Agency Department at Sumitomo Mitsui Trust Bank, Limited (TEL: 0120-782-031 (toll-free in Japan)).

Distributions
Distributions will be payable upon presenting the “Receipt for Distributions” at a post office nearby. In case the due date has been passed, please designate
the method of receiving on the back of the receipt and send it to Stock Transfer Agency Department at Sumitomo Mitsui Trust Bank, Limited, or bring it tothe head office or branch offices of the bank to receive it. Please note that distributions will not be payable after three years of the payment start date as
specified by the Articles of Incorporation of NHI. If you wish to receive distributions via bank transfer, etc. in the future, please contact the securities
company you are dealing with.

Notice[Concerning Statement of Distributions]
The “Statement of Distributions” sent upon payment of distributions serves as a “Notice of Payment” required pursuant to the Act on Special
Measures Concerning Taxation. The document may be used to confirm the amount of distributions after receiving, or can serve as an attachment
document upon filing a tax return. Thus please make sure to keep it if you are planning to file a tax return. However, if you have selected the methodof allocation of dividends in proportion to the number of shares, the amount of withholding tax will be calculated by the securities company, etc.
Please confirm with the securities company you are dealing with for any attachment document required for filing a tax return.

Provision of Information via Website

Notice on Briefing Session on AssetManagement for 7th Fiscal Period
NHI will hold a briefing session on asset
management for the fiscal period ended October
2017 (7th fiscal period).
1. Date and time: January 30, 2018 (Tuesday)
10:00 a.m. ~ (venue opening at
9:40 a.m.)

In order to have unitholders deepen understanding of NHI, NHI has been putting forth
effort to communicate information through its website. It provides information on theoverview of the portfolio and operators as well as healthcare REIT structure. A service
providing e-mail notification of news release updates and such to those registered on“IR Email Distribution Service” is also available.
NHI’s website

2. Venue:

18F, GranTokyo North Tower
1-9-1 Marunouchi,
Chiyoda-ku, Tokyo

3. Presenter:

Akira Yamanouchi, President of
Daiwa Real Estate AssetManagement Co., Ltd.

http://www.nippon-healthcare.co.jp/en/
II. Investor Information

13

III. Asset Management Report
1. Management Status and Other Performance Highlights Data
Fiscal Period(

7th Period
From May. 1, 2017
To Oct. 31, 2017)(

6th Period
From Nov. 1, 2016
To Apr. 30, 2017)(

5th Period
From May 1, 2016
To Oct. 31, 2016)(

4th Period
From Nov. 1, 2015
To Apr. 30, 2016)(

3rd Period
From May 1, 2015
To Oct. 31, 2015)

(1) Operating Performance(Millions of yen, except per unit data or where otherwise indicated)
Operating revenues
698
698
679
667
556
Rental revenues
698
698
679
667
556
Operating expenses
425
420
405
377
331
Property-related expenses
297
295
272
258
208
Operating income
273
278
275
290
225
Ordinary income
245
250
248
262
201
Net income
244
249
247
261
201
(2) Properties, etc. (as of end of period)
Total assets
21,21821,27021,316
20,84817,667[period-on-period percentage changes][-0.2%][-0.2%][+2.2%][+18.0%][+16.7%]
Interest-bearing liabilities
9,800
9,800
9,800
9,300
8,800
Net assets
10,474
10,538
10,595
10,6698,035[period-on-period percentage changes][-0.6%][-0.5%][-0.7%][+32.8%][-0.1%]
Unitholders’ capital, net
Note 2
10,22910,28910,34910,4087,835(3) Distributions
Total distribution amount
308
309
306
321
247
Total distribution of retained earnings
245
249
246
261
200
Total distribution in excess of retained earnings
63
60
60
60
47
Dividend payout
Note 3
100%
100%
100%
100%
100%
(4) Per Unit Information
Total number of units issued (units)
74,632
74,632
74,632
74,63260,800Net assets per unit (yen)140,337
141,206
141,969
142,958
132,160
Distribution per unit (yen)
4,124
4,143
4,106
4,295
4,067
Distribution amount from earnings per unit (yen)
3,274
3,343
3,306
3,495
3,299
Distribution amount in excess of earnings per unit (yen)
850
800
800
800
768
(5) Financial Indicators
ROA
1.2%
1.2%
1.2%
1.4%
1.2%
Notes 4and 5[annual rate][2.3%][2.4%][2.3%][2.7%][2.4%]
ROE
2.3%
2.4%
2.3%
2.8%
2.5%
Notes 5and 6[annual rate][4.6%][4.8%][4.6%][5.6%][4.9%]
Capital ratio
49.4%
49.5%
49.7%
51.2%
45.5%
[period-on-period percentage changes][-0.1%][-0.2%][-1.5%][5.7%][-7.7%]LTV (loan to value)
46.2%
46.1%
46.0%
44.6%
49.8%
Property leasing cash flows (NOI)
Note 7
596
597
596
596
499
(6) Other Referential Information
Number of investment properties
22
22
22
21
17
Number of tenants
Note 8
22
22
22
21
17
Total rentable area (m2)
67,298.83 67,298.83 67,298.83 65,203.04 57,173.22
Occupancy rate
Note 9100.0%
100.0%
100.0%
100.0%
100.0%
Depreciation
196
194
188
187
152
Capital expenditures
60
30
20
10
2
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)14

Operating revenues, etc. do not include consumption taxes, etc.
The indicated amounts are unitholders’ equity less deduction amount of unitholders’ equity.
Dividend payout for the 4th fiscal period is calculated by the following formula since the issuance of new investment units was
implemented.
Dividend payout: [Total distribution amount (excluding distribution in excess of earnings) ÷ Net income] × 100
ROA: Ordinary income ÷ [(Total assets at beginning of period + Total assets at end of period) ÷ 2] × 100
Annualized figures are calculated by using the asset management period of the respective fiscal period; 184 days for the 3rd Fiscal
Period; 182 days for the 4th Fiscal Period; 184 days for the 5th Fiscal Period; 181 days for the 6th Fiscal Period and 184 days for the
7th Fiscal Period.
ROE: Net income ÷ [(Net assets at beginning of period + Net assets at end of period) ÷ 2] × 100
Property leasing cash flows (NOI): Rental revenues − Property-related expenses + Depreciation
Number of tenants is the total number of end tenants.
Occupancy rate: Total leased area ÷ Total rentable area × 100

2. Developments in Asset Management in the Fiscal Period under Review(1) Brief History of the Investment Corporation
Nippon Healthcare Investment Corporation (hereinafter referred to as “NHI”) was incorporated on January 7, 2014
under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951; including amendments
thereto) (hereinafter referred to as the “Investment Trusts Act”) with Daiwa Real Estate Asset Management Co. Ltd.
(hereinafter referred to as the “Asset Management Company”) as the organizer. After its incorporation, NHI conducted
an additional issuance of investment units through private placement (18,800 units) on April 3, 2014. NHI commenced
actual management with the acquisition of eight properties on March 28, 2014 by using the proceeds from theconcerned capital increase through private placement and loans.
After accumulating a track record for roughly seven months after the start of asset management, in the previous
fiscal period, NHI conducted a public offering through the issuance of an additional 39,000 investment units on
November 4, 2014. On the following day, NHI made additional acquisitions of six properties concurrently with thelisting on the REIT Securities Section of the Tokyo Stock Exchange (the “TSE”) (Securities code: 3308). In the 3rd
Fiscal Period, NHI made additional acquisitions of three properties with borrowing and cash on hand, and in the 4th
Fiscal Period, NHI implemented an additional issuance of investment units through public offering (12,130 units) on
November 17, 2015 and additionally acquired four properties. Furthermore, in the 5th Fiscal Period, NHI made an
additional acquisition of one property on October 6, 2016 with borrowing and cash on hand. Through the additional
acquisition of a property, the total acquisition price which was 13,280 million yen as of the listing increased to 19,318
million yen as of October 31, 2017.
As the REIT specializing in healthcare facilities in that it invests solely in properties of which the principal use ishealthcare facilities, NHI effectively utilizes investor capital to initiate expansion of supply of high-quality healthcare
facilities that provide users with high-standard services, while at the same time produce ample and dependable
returns to investors for further capital circulation. In this way, NHI aims at creating a new value cycle for healthcare
facilities and the services provided, together with investors. Through these efforts, NHI would like to contribute to therealization of Japan’s major policy to improve the residential environment for the elderly by effectively utilizing private
sector funds.
(2) Investment Environment and Management Performance(A) Investment Environment (from May 1, 2017 to October 31, 2017)
NHI was established to address Japan’s structural problem of age demographics where the younger
population is decreasing and the ratio of elderly people is increasing, and the associated social demand
for the enhancement of private nursing homes and other facilities for the elderly, which are thought to belacking.
Japan has the population of the elderly aged 65 years or over (hereinafter referred to as the elderly
population) accounting for approximately more than one-quarter of the total population as of June 1,2017 (according to the Ministry of Internal Affairs and Communications’ “Population Estimates”
announced on November 20, 2017), and the population of the elderly is forecast to continue to accountfor an increasingly greater proportion and the population of the elderly living alone is forecast to continue
to grow. There is thus recognized to be sufficient potential for greater development of housing for theelderly with nursing care services, etc. that are designed for the elderly to reside (referring to “silver
housing” (public housing for the elderly), “good rental housing for the elderly,” “elderly housing withsupportive services,” “fee-based homes for the elderly” and “low-cost homes for the elderly;” the same
shall apply hereinafter).
The Ministry of Land, Infrastructure, Transport and Tourism has set as a policy target that the ratio of
housing for the elderly to the elderly population shall be 4% in 2025.
In this manner, as social demand is mounting for healthcare facilities – particularly, private nursing
homes and other facilities for the elderly – and the enhancement of private nursing homes and otherfacilities for the elderly is one of the priority tasks even as a national policy, NHI will focus investment for
the time being on private nursing homes and other facilities for the elderly among healthcare facilities andthereby seize opportunities to earn cash flows arising from the mounting social demand.
(B) Management Performance
In the 7th Fiscal Period (fiscal period ended October 31, 2017), NHI acquired no investment properties.
Concerning the properties held as of the end of the 7th Fiscal Period (October 31, 2017), the leasable floorarea was 67,298.83m2 and the occupancy rate was 100.0%.

III. Asset Management Report15

(3) Overview of Capital Procurement(A) Procurement of Funds for Repayment of Borrowings
In the 7th Fiscal Period, NHI conducted the following borrowing of funds for repayment of borrowings.
(a) In order to procure funds for repayment of 500 million yen of borrowings from Mizuho Bank, Ltd. whichwere due for repayment on September 29, 2017, NHI conducted borrowing of the same amount from thesame bank on the same day.
(b) In order to procure funds for repayment of a total of 1,800 million yen of borrowings from Mizuho Bank,
Ltd., The Musashino Bank, Ltd. and Shinkin Central Bank which were due for repayment on October 31,
2017, NHI conducted borrowing of the same amount each from the respective banks on the same day.
(B) Status of Interest-Bearing Liabilities
As a result of the above, the balance of interest-bearing liabilities outstanding as of the end of the 7th
Fiscal Period (October 31, 2017) stood at 9,800 million yen (short-term debt: 500 million yen; long-term
debt: 9,300 million yen). The balance of the current portion of long-term debt stood at 2,100 million yen. In
addition, the average remaining period at the end of the 7th Fiscal Period was 2.3 years.
The unitholders’ capital (net) was 10,229 million yen, and the total number of units issued was 74,632
investment units as of the end of the 7th Fiscal Period.
(4) Capital Expenditures During the Fiscal Period under Review
The following summarizes the main construction work that constitutes capital expenditures conductedduring the 7th Fiscal Period. Capital expenditures for the 7th Fiscal Period amounted to 60 million yen and,
when combined with the 36 million yen in repair expenses charged to 7th Fiscal Period expenses, totaled 96
million yen in construction work implemented.
Name of Property
Expenditure
Purpose
Period(Location)(Millions of yen)
Sompo Care LAVIERE Hiroshima
Renewal of air-conditioners From: October 2017
Hikarigaoka
15
in common areas
To: October 2017
(Hiroshima City, Hiroshima)
Minna-no-ie Chuo-ku En'nami(Saitama City, Saitama)
Minna-no-ie Omiya Yoshinocho(Saitama City, Saitama)
Verger Hirakata(Hirakata City, Osaka)

Installment of solar power
generation system
Installment of solar power
generation system
Renewal of air-conditionersin dwelling units

Other
Total

From: September 2017
To: September 2017
From: September 2017
To: September 2017
From: October 2017
To: October 2017
From: May 2017
To: October 2017

12
6
5
22
60

(5) Overview of Financial Performance and Distributions
As a result of the management described above, NHI posted financial performance for the 7th Fiscal Period of
698 million yen in operating revenue, 273 million yen in operating income, 245 million yen in ordinary incomeand 244 million yen in net income.
Concerning distributions, to ensure that the amount equivalent to distributions from earnings would be
included in the amount of tax-deductible expenses based on application of special provisions for taxation on
investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of
1957;including amendments thereto) (hereinafter referred to as the “Special Taxation Measures Act”)), NHI
decided to distribute the entire amount of unappropriated retained earnings, excluding fractions of the
distribution amount per unit that are less than 1 yen. Accordingly, NHI declared a distribution amount per unit of
3,274 yen.
In addition, in principle, NHI adopts a policy of implementing cash distributions in excess of earnings
uninterruptedly every fiscal period in accordance with the distribution policy set out in the articles ofincorporation (Note). Based on this policy, NHI decided to distribute 63,437,200 yen, which is the amountroughly equivalent to 32% of the 196 million yen in depreciation for the 7th Fiscal Period, as reimbursement ofinvestments in capital. Accordingly, NHI declared a distribution amount in excess of earnings per unit of 850
yen.

(Note) NHI adopts a policy of implementing uninterrupted distributions in excess of earnings (reimbursement of investments in capital) in an amount not toexceed 40% of depreciation in every accounting period within the scope that would not have adverse impact on the financial position of NHI after
setting aside the cash and deposits that NHI deems appropriate, taking into account the status of establishment of lines of credit, etc., in order to notaffect long-term repair plans in light of the capital expenditures for each accounting period assumed based on the long-term repair plans and to meetneeds for funds (new acquisition of investment assets, repairs and capital expenditures required to maintain and enhance portfolio assets, NHI’s
working capital, repayment of obligations, payout of distributions, etc.).
The six-month average amount of the sum total amount of emergency repair expenses, short-term repair expenses and long-term repair expenses
stated in the engineering report by Tokio Marine & Nichido Risk Consulting Co., Ltd. and Assets Research and Development Inc. for all assets held asof the end of the 7th Fiscal Period (22 properties) is 29 million yen.

16

3. Future Management Policy and Tasks(1) Investment Environment
Japan has the population of the elderly accounting for approximately more than one-quarter of the total
population, and the population of the elderly is expected to continue to account for an increasingly greater
proportion and the population of the elderly living alone is expected to continue to grow. With thedevelopment of medical technology, among other factors, the average life expectancy at birth for Japanesepeople is at 80.98 years for males and 87.14 years for females according to the Ministry of Health, Labourand Welfare’s “Abridged Life Tables for Japan 2016,” while record-highs were set in terms of the population
aged 65 years or over at 35 million people and the proportion of the elderly population is at 27.6% of the total
population of 127 million as of May 1, 2017 according to the Ministry of Internal Affairs and Communications’“Population Estimates” (announced on November 20, 2017).
According to the National Institute of Population and Social Security Research’s “Population Projections forJapan (2017),” the total population will increase to 123 million people, the elderly population to 37 million
people and the proportion of the elderly population to 30.0% in 2025 and then, while the total population will
decrease by approximately 39 million people from that at present to 88 million people, the elderly population
will reach 34 million people and the proportion of the elderly population to 38.4% in 2065.
To provide for future growth in demand for housing for the elderly, the Ministry of Land, Infrastructure,
Transport and Tourism has set as a policy target that the ratio of housing for the elderly to the elderly
population shall be 4% by 2025.
In such an environment, there is recognized to be sufficient potential for greater development of housing forthe elderly with nursing care services, etc. that are designed for the elderly to reside through effective
utilization of private sector funds.
(2) Management Policy and Tasks(A) Strategy for Managing Existing Properties
NHI implements the following measures to earn stable revenue and serve to maintain and enhanceunitholder value.
(a) Stabilization of earnings
In principle, NHI shall invest in properties with the actual remaining lease contract period at the timeof acquisition of 10 years of more, taking into account also the possibility of contract renewal. In viewof lease agreements concluded between NHI or trustees and operators realizing conversion of
expenses borne by operators into fixed rates and stabilization of earnings of NHI, the policy shall be to
make the lease agreements of content that, in principle, operators pay a fixed amount of rent. The
lease agreements with operators for the assets that NHI has acquired are all fixed-rent agreements.
(b) Criteria and methods for selecting operators
In the event of acquisition of healthcare facilities, not only the quality of the facilities as real estate, butalso the creditworthiness, operational capabilities, etc. of the operators operating the facilities are
regarded as important factors by NHI in realizing stable occupancy. This is because the operators
being capable of providing services of a quality and type that matches the entrance fee, monthly
service fee, etc. in order to be the residents’ choice and the operators being capable of operating thefacilities continuously are regarded as important factors in terms of also the profitability and asset valueof healthcare facilities.
(c) Employment of “Backup Operator Membership”
NHI has concluded an agreement on backup of operational management with each and every
operator of acquired assets. The main purpose of said agreement is that, in the event that a leaseagreement for a healthcare facility held by NHI has ended or is expected to end due to contract
termination, contract cancellation or other reason, where NHI requests the operator to operate thehealthcare facility by conclusion of a new lease agreement with NHI, the operator shall sincerely
discuss the request. In addition, NHI shall consider concluding a similar agreement with also theoperators of healthcare facilities to be acquired in the future. Such relationship by agreement with
operators is referred to as “Backup Operator Membership.”III. Asset Management Report17(B) Investment Strategy for New Properties
NHI aims to realize stable external growth through not only leveraging the track record and network of
the Asset Management Company, but also sourcing property information, etc. by working in collaboration
with the sponsor group and adviser(a) Track record and network of the Asset Management Company
The Asset Management Company is striving for property acquisitions that utilize the wide range ofproperty sourcing channels based on strong relationship building with various related parties (businesscompanies, financial institutions, major real estate brokerage companies and real estate brokerage
parties, etc.) accumulated through asset management of Daiwa Office Investment Corporation (balanceof assets for which management is entrusted as of the end of November 2017: approximately 473.2
billion yen (including approximately 3.9 billion yen in silent partnership equity interest)) and Daiwa
Residential Private Investment Corporation (balance of assets for which management is entrusted as ofthe end of November 2017: approximately 105.6 billion yen). In addition, in order to expand and boost
opportunities to acquire healthcare facilities in which NHI invests, the Asset Management Company
has installed an investment team specializing in healthcare facilities and is promoting also the buildingof relationships with new suppliers and sources of property information (healthcare facility operators,
developers, etc.) other than existing property sourcing channels to collect property information.
(b) Sourcing of property information, etc. by working in collaboration with the sponsor group
The Asset Management Company believes that leveraging the network of branches and clients
possessed by the sponsor group, the Daiwa Securities Group, as needed will enable a search acrossJapan for operators that meet the selection criteria set forth by the Asset Management Company andconsideration of the feasibility of collaboration in property acquisition and development, commissioningof facility operation, etc., and thinks that expansion of property acquisition opportunities can thus beexpected.
(c) Sourcing of property information, etc. by working in collaboration with the adviser
The Asset Management Company has concluded an advisory agreement with AIP Healthcare Japan
GK, which implements an investment strategy that has been focused on the healthcare sector(hospitals and nursing care facilities) since 2001 and has been engaged in investment specializing inprivate nursing homes and other facilities for the elderly since 2008. Based on this agreement, theAsset Management Company receives advice on information provision, management and operation ofhealthcare facilities that are the investment assets of NHI, collaboration with operators, etc. The AssetManagement Company believes that this would contribute to realization of stable performance in themedium to long term of NHI.
(C) Financial Strategy
NHI will procure and manage funds in accordance with the following policy in pursuit of realization of
stable revenue and steady growth and efficient management of assets under management.
(a) Additional issuance of investment units
Additional issuance of investment units shall be implemented with agility, while comprehensively
taking into account the timing of acquisition of real estate that are to be newly acquired, ratio ofinterest-bearing liabilities to total assets (hereinafter referred to as “LTV”), economic and market
conditions, etc. and also taking into consideration the dilution of investment units.

18(b) Borrowing of funds and issuance of investment corporation bonds
LTV shall be set at a level that takes heed of securing of financing capacity and, in principle, nohigher than 60%. However, LTV may temporarily exceed 60% for such purposes as acquisition of new
investment assets and reduction of refinancing risk.
In order to build a stable financial base and underpin future growth strategies, NHI shall not only
establish a so-called main-bank system of having leading financial institutions as its main banks ofaccount, but also make proactive efforts to diversify fund procurement sources through such means as
borrowing from multiple lenders and issuing investment corporation bonds.
Funds shall be procured appropriately by negotiating with several financial institutions over borrowing
costs, borrowing period, whether or not collateral is provided and other terms and conditions upon the
borrowing of funds, and comprehensively considering the terms and conditions while taking into
consideration the balance of interest rate trends, market level, financial agility and security, lendercomposition and other factors.
In order to reduce the risk of interest rate fluctuations and refinancing risk, NHI shall consider
extending financing periods, converting interest rates to fixed rates, staggering repayment dates,
introducing highly-flexible financial covenants, etc. as needed.
NHI shall consider securing committed, revolving or other lines of credit as needed for agile
procurement of various required funds.
(c) Fund management
NHI shall retain at all times the cash and deposits that NHI deems appropriate, taking into accountalso the status of establishment of lines of credit, etc., in order to meet needs for funds (newacquisition of investment assets, repairs and capital expenditures required to maintain and enhance
portfolio assets, NHI’s working capital, repayment of obligations, payout of distributions, etc.).
NHI shall pursue efficient fund management whereby, of the amount equivalent to depreciation, theamount remaining after setting aside cash and deposits shall be allocated to implementing cash
distributions in excess of earnings to unitholders uninterruptedly every fiscal period in an amount not toexceed 40% of depreciation in every accounting period, comprehensively taking into account NHI’s
surrounding economic environment and real estate market trends, the status of portfolio assets andfinancial status of NHI and other factors.
There may be cases where surplus funds will be invested into securities and monetary claims that arehighly secure and liquid.
Derivative transactions (Article 2, Paragraph 6 of the Investment Trusts Act) shall be limited to thosemanaged for the purpose of hedging the risk of fluctuations in interest rates on the liabilities of NHI.
(D) Schedule of Capital Expenditures
The following summarizes the main capital expenditures in line with currently planned construction
works for renovation, etc. Furthermore, the scheduled construction amounts include portions that will becharged as expenses in terms of accounting.
Name of Property(Location)
Sompo Care LAVIERE
Hiroshima Hikarigaoka(Hiroshima City,
Hiroshima)
Sompo Care LAVIERE
Kinugasayama Koen
(Yokosuka City,
Kanagawa)
Charm Suite Ryokuchi
Koen(Toyonaka City, Osaka)
Sompo Care LAVIERE
Hiroshima Hikarigaoka(Hiroshima City,
Hiroshima)
Sompo Care LAVIERE
Sagamihara Chuo
(Sagamihara City,
Kanagawa)

PurposeEstimated Period

Estimated Cost (Millions of yen)
Payment for Cumulative
Total
the current amount paid
periodRenewal of airconditioners incommon areas

From: April 2018
To: April 2018

17

–

–

Renewal of lighting incommon areas

From: April 2018
To: April 2018

14

–

–

Renewal of lighting incommon areas

From: April 2018
To: April 2018

13

–

–

Renewal of lighting incommon areas

From: April 2018
To: April 2018

9

–

–

Renewal of lighting incommon areas

From: April 2018
To: April 2018

7

–

–

III. Asset Management Report19IV. Balance Sheets
As of October 31, 2017 and April 30, 2017

(Thousands of yen)

As of
October 31, 2017

As ofApril 30, 2017

AssetsCurrent Assets:
Cash and cash equivalents [Notes 3, 4 and 5]

1,671,399

1,595,230

19,654

14,62914

13

Other current assets

2,527

1,835

Total Current Assets

1,693,594

1,611,707

Land in trust accounts

7,949,066

7,949,066

Buildings and structures in trust accounts

12,600,999

12,581,161

Machinery and equipment in trust accounts

18,324–Tools, furniture and fixtures in trust accounts

37,39516,004

Less: accumulated depreciation(1,148,649)(952,801)

Leasehold rights in trust accounts

40,88640,886

19,498,021

19,634,316

145

155

Software

1,484

1,851

Lease and guarantee deposits

10,00010,000Long-term prepaid expenses

14,813

11,944

Total Other Assets

26,442

23,95021,218,057

21,269,973

Prepaid expenses
Deferred tax assets [Note 12]

Investment Properties, at cost: [Notes 4, 6 and 7]

Total Investment Properties, net
Other Assets:
Right of trademark

Total Assets
The accompanying notes are an integral part of these financial statements.

20

(Thousands of yen)

As of
October 31, 2017

As ofApril 30, 2017

Liabilities
Current Liabilities:
Operating accounts payable

59,651

55,368

Short-term debt [Notes 4, 5 and 10]

500,000

500,000

2,100,000

1,800,000

63,64654,950894878

Accrued consumption taxes

1,020

1,086

Rent received in advance

85,14085,140

540

538

Other current liabilities

3,293

3,302

Total Current Liabilities

2,814,184

2,501,262

Long-term debt [Notes 4, 5 and 10]

7,200,000

7,500,000

Tenant security deposits [Note 5]

730,216730,216

7,930,216

8,230,216

10,744,400

10,731,478

10,504,334

10,504,334(275,059)(215,354)

10,229,275

10,288,980

244,382249,515

10,473,657

10,538,495

Total Net Assets

10,473,657

10,538,495

Total Liabilities and Net Assets

21,218,057

21,269,973

Long-term debt due within one year [Notes 4, 5 and 10]
Accounts payable – other
Income taxes payable

Deposits received

Long-Term Liabilities:

Total Long-Term Liabilities
Total Liabilities

Net Assets [Notes 9 and 13]
Unitholders’ Equity:
Unitholders’ capital
Deduction from unitholders’ capital
Unitholders’ capital, net
Units authorized: 10,000,000 units
Units issued and outstanding: 74,632 units
Retained earnings
Total Unitholders’ Equity

The accompanying notes are an integral part of these financial statements.

IV. Balance Sheets

21

V. Statements of Income
For the six months ended October 31, 2017 and April 30, 2017

(Thousands of yen)

For the six months ended
October 31, 2017

For the six months endedApril 30, 2017697,553

697,566

697,553

697,566

297,063294,679

Asset management fees
Asset custody fees
Administrative service fees
Trust fees

61,984738
10,1956,450

61,452739
10,187
6,451

Directors’ compensation
Audit fees

4,800
6,000
37,3024,800
6,000
35,596424,532
273,021419,904
277,662

2

2

2

2

21,511
6,257

21,158
6,149

27,768245,255

27,307250,357

245,255

250,357

894
(1)

879
(1)

893
244,36220
244,382878
249,47936
249,515

Operating Revenues and Expenses
Operating Revenues:
Rental revenues [Note 8]
Total Operating Revenues
Operating Expenses:
Property-related expenses [Note 8]

Other operating expenses
Total Operating Expenses
Operating Income
Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Total Non-Operating Revenues
Non-Operating Expenses:
Interest expense
Borrowing expenses
Total Non-Operating Expenses
Ordinary Income
Income Before Income Taxes
Income taxes – current
Income taxes – deferred
Total Income Taxes [Note 12]
Net Income
Retained Earnings Brought Forward
Retained Earnings at End of Period

The accompanying notes are an integral part of these financial statements.

22

V. Statements of Income

VI. Statements of Changes in Net Assets
For the six months ended April 30, 2017

Balance as of October 31, 2016
Distributions in excess of retained
earnings
Distributions of earnings
Net income
Balance as of April 30, 2017

(Thousands of yen)

Deduction
Number of Unitholders’fromUnitholders’Units
CapitalUnitholders' Capital, net
capital74,632 10,504,334(155,648) 10,348,686
–

–

–
–
–
–
74,632 10,504,334(59,706)

Retained
Earnings

246,770 10,595,456(59,706)––––(215,354) 10,288,980

For the six months ended October 31, 2017

Total

–

(59,706)(246,734)(246,734)
249,479
249,479
249,515 10,538,495(Thousands of yen)

Deduction
Number of Unitholders’fromUnitholders’Units
CapitalUnitholders' Capital, net
capital74,632 10,504,334(215,354) 10,288,980

Balance as of April 30, 2017
Distributions in excess of retained––(59,705)(59,705)
earnings
Distributions of earnings––––
Net income––––
Balance as of October 31, 2017
74,632 10,504,334(275,059) 10,229,275
The accompanying notes are an integral part of these financial statements.

Retained
Earnings

Total

249,515 10,538,495–(59,705)(249,495)(249,495)
244,362
244,362
244,382 10,473,657

VII. Statements of Cash Flows
For the six months ended October 31, 2017 and April 30, 2017

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Interest expense
Increase (Decrease) in accounts payable
Increase (Decrease) in rent received in advanceCash payments of interest expense
Other, net
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchases of investment properties in trust
accounts
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Proceeds from short-term debt
Repayments of short-term debt
Proceeds from long-term debt
Repayments of long-term debt
Payments of distributions of earnings
Payments of distributions in excess of retained earnings
Net Cash Used in Financing Activities
Net Change in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period (Note 3)(Thousands of yen)

For the six months
ended
October 31, 2017

For the six months
ended
April 30, 2017245,255
196,226
21,511
10,296–(21,744)(9,524)442,020

250,357
194,055
21,15816,053
54(20,924)
10,203
470,956(56,875)(35,709)(56,875)(35,709)

500,000(500,000)
1,800,000(1,800,000)(249,318)(59,658)(308,976)
76,1691,595,230
1,671,399––––(246,551)(59,650)(306,201)
129,046
1,466,184
1,595,230

The accompanying notes are an integral part of these financial statements

VI. Statements of Changes in Net Assets
VII. Statements of Cash Flows23

VIII. Notes to Financial Statements
For the six months ended October 31, 2017 and April 30, 2017

Note 1 – Organization and Basis of Presentation
Organization
Nippon Healthcare Investment Corporation (hereinafter referred to as “NHI”) was established on January 7,
2014 as an investment corporation under the Act on Investment Trusts and Investment Corporations (Act No.
198 of 1951, including subsequent revisions, hereinafter referred to as the “Investment Trust Act”) by the founder(Daiwa Real Estate Asset Management (hereinafter referred to as “DREAM”)).
NHI is an externally managed real estate fund, established as an investment corporation. DREAM, as NHI’s
asset management company, is engaged in acquiring, managing, leasing, and renovating healthcare facilities.
Daiwa Securities Group Inc. currently owns 100% of DREAM.
On November 4, 2014, NHI had raised 5,616,000 thousand yen through an initial public offering of units. Those
units were listed on the J-REIT section of the Tokyo Stock Exchange.
As of October 31, 2017, NHI had trust beneficiary interests in 22 healthcare facilities with approximately 67,299
square meters of healthcare facilities space and had leased space to 22 tenants. The occupancy rate for thehealthcare facilities was 100%.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in theInvestment Trust Act, the Financial Instruments and Exchange Act and their related accounting regulations, andin conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to application and disclosure requirements of International Financial Reporting Standards or
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been reformatted and translated into English from the financial
statements of NHI prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance
Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Act. In preparing theaccompanying financial statements, relevant notes have been expanded and certain reclassifications have been
made from the Japanese GAAP financial statements. Certain supplementary information included in the statutory
Japanese GAAP financial statements, but not required for fair presentation, is not presented in theaccompanying financial statements.
NHI maintains its accounting records in Japanese yen.

Note 2 – Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short-term investments which are highly
liquid, readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of threemonths or less from the date of acquisition.
Investment Properties
Investment properties are stated at cost, which includes the allocated purchase price, related costs andexpenses for acquisition of the properties. Investment properties balances are depreciated using the straight-line
method over the estimated useful lives. The estimated useful lives of the principal tangible fixed assets (including
assets held in trust) are as follows:
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures

As of October 31, 2017
3-58 years
17 years
2-15 years

As of April 30, 2017
4-58 years–
3-10 years

Costs related to the renovation, construction and improvement of properties are capitalized. Expenditures for repairs
and maintenance which do not add the value to a property or prolong its useful life are expensed as incurred.
New Investment Units Issuance Costs
The issuance costs of investment units are expensed when incurred.
Income Taxes
Income taxes are accounted for on the basis of income for financial statement purposes. The tax effect of temporary
differences between the amounts of assets and liabilities for financial statements and for income tax purposes isrecognized as deferred taxes.

24Real Estate Taxes
Real estate taxes are imposed on properties on a calendar year basis and expensed when incurred. In terms of
newly purchased properties, NHI capitalizes a portion of the real estate taxes that relate to a period from the purchasedate of each property until the end of the calendar year as part of the acquisition cost of the relevant property.
There were no capitalized real estate taxes for the six months ended October 31, 2017 and the six months endedApril 30, 2017.
Consumption Taxes
Consumption taxes are excluded from transaction amount.
Non-deductible consumption taxes on acquisition of assets are included in the acquisition costs of the relevant
asset.
Hedge Accounting
NHI conducts derivative transactions in order to hedge against risks defined in its Articles of Incorporation based on
its risk management policy. NHI utilizes derivative financial instruments such as interest-rate swap agreements only
for the purpose of hedging its exposure to changes in interest rates. NHI deferred recognition of gains or losses
resulting from changes in fair value of interest-rate swap agreements because its interest-rate agreements met thecriteria for deferral hedging accounting.
However, NHI applies special treatment to the interest-rate swap agreements that meet the criteria for such special
treatment. Under the special treatment, interest-rate swaps are not remeasured at fair value: instead, the net amount
paid or received under the interest-rate swap agreements is recognized and included in interest expense. The hedge
effectiveness for interest-rate swap agreements is assessed each fiscal period except for those that meet the criteriaof special treatment.
Revenue Recognition
Operating revenues consist of fixed rental revenues, which are recognized on an accrual basis over the life of eachlease.
Accounting Treatment of Beneficiary Interests in Trust Assets Including Real Estate
For trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as well as all
income generated and expenses incurred from assets in trust, are recorded in the relevant balance sheet and income
statement accounts.

Note 3 – Cash and Cash Equivalents
Cash and cash equivalents stated on the accompanying balance sheets and statements of cash flows as of
October 31, 2017 and April 30, 2017 consisted of the following:(Thousands of yen)

Cash and deposits
Cash and deposits in trust accounts
Cash and cash equivalents

As of October 31, 2017
1,223,990
447,409
1,671,399

As of April 30, 2017
1,163,997
431,233
1,595,230

Note 4 – Pledged Assets and Secured Liabilities
The carrying amount of assets pledged as collateral and the secured liabilities as of October 31, 2017 and April
30, 2017 were as follows:(Thousands of yen)

Assets pledged:
Cash and deposits in trust accounts
Land in trust accounts
Buildings and structures in trust accounts
Machinery and equipment in trust accounts
Tools, furniture and fixtures in trust accounts
Leasehold rights in trust accounts
Total
Secured liabilities:
Short-term debt
Long-term debt due within one year
Long-term debt
Total

As of October 31, 2017

As of April 30, 2017

447,4097,949,066
11,456,030
18,14033,89940,886
19,945,430

431,233
7,949,066
11,629,823–
14,54140,886
20,065,549

500,000
2,100,000
7,200,000
9,800,000

500,000
1,800,000
7,500,000
9,800,000
VIII. Notes to Financial Statements

25

Note 5 – Financial Instruments(For the six months ended October 31, 2017 and April 30, 2017)(1) Status of Financial Instruments(A) Policy for financial instruments
NHI procures funds through various financing methods (such as borrowings, issuance of investment
units) for acquisition and renovation of investment properties, payments of dividends and reimbursementof bank borrowings.
In financing through interest-bearing debt, to secure stable financing capacity and reduce future risk ofrising interests, NHI secures long-term fixed-rate borrowings with well-diversified maturities.
NHI manages surplus funds with safe and highly liquid money claims and securities (in principle,
deposits).
Derivative transactions are conducted only for the purpose of reducing risk of future interest rate
fluctuations.
(B) Types and risks of financial instruments and related risk management system
Proceeds from debt financing are used mainly for acquisition of investment properties. While these debts are
exposed to liquidity risk upon repayment, NHI manages the risk by maintaining the LTV ratio at low levels,
diversifying maturities, keeping the ratio of long-term debt to total debt at high levels, and diversifying lenders
with particular focus on domestic financial institutions. Bank borrowings with floating interest rates are exposedto the risk of future interest rate fluctuations and NHI manages that by using derivative transactions such as
interest-rate swap agreements.
NHI evaluates the effectiveness of hedges by comparing the accumulated cash-flow changes of hedged
items and that of hedging items, and then verifies the ratio of both amounts of changes. Furthermore, NHI
omits assessment of hedge effectiveness for the interest-rate swap agreements which meet the criteria ofspecial treatment.
Execution and management of derivative transactions have been carried out based on the regulations
defined in the basic policy of risk management.
Tenant security deposits represent funds deposited by tenants, and NHI is exposed to the risk of refunding
deposits in the event that a tenant terminates the contract. However, such risk is limited by reserving someparts of the funds.
Deposits are used for investing NHI’s surplus funds. These deposits are exposed to credit risks such as
bankruptcy of the depository financial institutions. NHI manages credit risk by restricting the tenor of thedeposit relatively short and setting a minimum credit rating requirement for the depository financial institutions.
(C) Supplementary explanation for fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if applicable. When there is noquoted market price available, fair value is reasonably estimated. As certain assumptions are used for theestimation of fair value, the result of such estimation may differ if different assumptions are used. Also, thecontractual amounts of derivative transactions do not represent the market risk involved in these derivativetransactions.
(2) Estimated Fair Value of Financial Instruments
The book value, fair value and difference between the two as of October 31, 2017 and April 30, 2017 are
as follows. The financial instruments whose fair value is extremely difficult to estimate are excluded fromthe following table.
(As of October 31, 2017)
Cash and cash equivalents
Total
Short-term debt
Long-term debt due within one year
Long-term debt
Total
Derivative transactions

26(Thousands of yen)Book Value
1,671,399
1,671,399
500,000
2,100,000
7,200,000
9,800,000–

Fair Value
1,671,399
1,671,399
500,000
2,100,546
7,209,162
9,809,708–

Difference
–
–
–
546
9,162
9,708
–

(As of April 30, 2017)(Thousands of yen)

Cash and cash equivalents
Total
Short-term debt
Long-term debt due within one year
Long-term debt
Total
Derivative transactions

Book Value
1,595,230
1,595,230
500,000
1,800,000
7,500,000
9,800,000–

Fair Value
1,595,230
1,595,230
500,000
1,799,590
7,512,724
9,812,314–

Difference
–
–
–
(410)
12,724
12,314–

Notes:
1. Methods to estimate fair value of financial instruments and derivative transactions
Assets(1) Cash and cash equivalents
As these instruments are settled in short period of time, their fair value and book value are nearly identical.
Therefore, for these items, the book value is assumed as the fair value.
Liabilities(1) Short-term debt, long-term debt due within one year and long-term debt
For short-term debt, long-term debt due within one year and long-term debt with floating interest rates, theirfair value and book value are nearly identical and there are no significant changes in NHI’s credit risk after
borrowing. Therefore, for these items, their book value is assumed as their fair value. For short-term debt, longterm debt due within one year and long-term debt with fixed interest rates, their fair value is based on thepresent value of principle and interest cash flows discounted at the current interest rate estimated to be applied
if similar new debt is entered into. However, the fair value of certain floating-rate long-term debt due within one
year and long-term debt that qualifies for the special treatment of interest-rate swaps is determined bydiscounting the sum of its principal and interest payments net of any cash flows from the interest-rate swaps.
Derivative Transactions(1) Derivatives to which hedge accounting is applied(As of October 31, 2017)
Method of Hedge
Accounting
Special treatment
for interest rate swap
transactions(Thousands of yen)Type of Derivative
Transactions
Interest rate swap
transactions
Receive floating andpay fixed

Hedged Items

Contract Amount(due after one year)

Long-term debt
due within one
year and longterm debt

7,000,000(5,400,000–(**)

7,000,000(5,400,000)

–

Total
(As of April 30, 2017)
Method of Hedge
Accounting
Special treatment
for interest rate swap
transactions

Fair Value(*)(Thousands of yen)Type of Derivative
Transactions
Interest rate swap
transactions
Receive floating andpay fixed
Total

Hedged Items

Contract Amount(due after one year)

Long-term debt
due within one
year and longterm debt

8,300,000(7,000,000)–(**)

8,300,000(7,000,000)–

Fair Value(*)*The fair value is provided by the financial institution.
**The values of derivatives qualifying for special treatment of interest rate swap transactions are included in that of related long-term debt. This isbecause such swaps are handled together with hedged long-term debt.

VIII. Notes to Financial Statements27

2. Financial instruments whose fair value is extremely difficult to estimate
Tenant security deposits (with the book value of 730,216 thousand yen as of October 31, 2017 and April 30,2017) that have been deposited from tenants are not marketable and the actual deposit period cannot be reliably
determined, thus making it impossible to reasonably estimate their future cash flows, and therefore, it isconsidered to be extremely difficult to estimate their fair value.
3. Redemption schedule for money claims(As of October 31, 2017)(Thousands of yen)

Due within Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
1,671,399––––
1,671,399––––

Cash and cash equivalents
Total(As of April 30, 2017)

Due after
5 years––(Thousands of yen)

Due within Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
1,595,230––––
1,595,230––––

Cash and cash equivalents
Total

Due after
5 years––

4. Redemption schedule for long-term debt
(As of October 31, 2017)(Thousands of yen)

Short-term debt
Long-term debt due within one
year
Long-term debt
Total

Due within Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
500,000––––

Due after
5 years–

2,100,000

–

–

–

–

–

–
2,600,000

2,900,000
2,900,000

3,000,000
3,000,000––

1,300,000
1,300,000––(As of April 30, 2017)(Thousands of yen)

Short-term debt
Long-term debt due within one
year
Long-term debt
Total

Due within Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
500,000––––

Due after
5 years–

1,800,000

–

–

–

–

–

–
2,300,000

2,100,000
2,100,000

3,400,000
3,400,000

2,000,000
2,000,000

–
–

–
–

Note 6 – Schedule of Tangible Fixed Assets of Investment Properties
Investment properties as of October 31, 2017 and April 30, 2017 consisted of the following:		

Land in trust accounts
Buildings andstructures in trust
accounts
Machinery andequipment in trust
accounts
Tools, furniture andfixtures in trust
accounts
Total

28(Thousands of yen)

As of October 31, 2017
Acquisition Accumulated Book value
costs
depreciation

As of April 30, 2017
Acquisition Accumulated Book value
costs
depreciation

7,949,066–

7,949,066

7,949,066–

7,949,066

12,600,999(1,144,969)

11,456,030

12,581,161(951,338)

11,629,823

18,324(184)

18,140–––37,395(3,496)33,89916,004(1,463)

14,541

20,605,784(1,148,649)

19,457,135

20,546,231(952,801)

19,593,430

Note 7 – Investment and Rental Properties
NHI owns fee-based homes for the elderly, etc. (including land) in the three major metropolitan areas and core cities.
The book value, net change in the book value and the fair value of the investment and rental properties are as follows:(For the six months ended October 31, 2017)
Book Value
As of
ChangeApril 30, 2017
during the period(*1)
19,634,316(136,295)(For the six months ended April 30, 2017)
Book Value
As of
ChangeOctober 31, 2016
during the period(*2)
19,798,214(163,898)(Thousands of yen)

As of
October 31, 201719,498,021

Fair value as of
October 31, 201724,184,000(Thousands of yen)

As ofApril 30, 2017
19,634,316

Fair value as ofApril 30, 201724,265,000(Note 1) The book value represents the acquisition costs less accumulated depreciation.
(Note 2) Significant changes(*1) For the six months ended October 31, 2017, the major reason of decrease is depreciation (195,848 thousand yen).
(*2) For the six months ended April 30, 2017, the major reason of decrease is depreciation (193,677 thousand yen).
(Note 3) The fair values as of October 31, 2017 and April 30, 2017 represent the sum of appraisal values estimated by external real estate appraisers.

Income and loss from investment and rental properties for the six months ended October 31, 2017 and April 30,
2017 are disclosed in Note 8.

Note 8 – Rental Revenues and Expenses
Rental revenues and expenses for the periods ended October 31, 2017 and April 30, 2017 were as follows:(Thousands of yen)

A. Revenues from property leasing
Rental revenues
Total revenues from property leasing
B. Property-related expenses
Consignment expenses
Utilities expenses
Taxes and dues
Non-life insurance expenses
Repair expenses
Depreciation
Leasehold fees
Total property-related expenses
C. Operating income from property leasing [A – B]

For the six months ended
October 31, 2017

For the six months endedApril 30, 2017697,553
697,553

697,566
697,566

12,445379
50,0091,520
35,662
195,848
1,200
297,063
400,490

12,310–48,0001,520
37,972
193,677
1,200
294,679
402,887

Note 9 – Net Assets
NHI issues only non-par value units in accordance with the Investment Trust Act and all of the issue prices of newunits are designated as stated capital. NHI maintains at least 50,000 thousand yen as the minimum amount of net
assets, as required by the Investment Trust Act.

Note 10 – Short-term debt, long-term debt due within one year and long-term debt
Short-term debt, long-term debt due within one year and long-term debt as of October 31, 2017 and April 30, 2017consisted of the following:(Thousands of yen)

Secured loans due 2017 to 2022, principally frombanks and insurance companies with interest rates
mainly ranging from 0.3% to 0.6%
Total

As of October 31, 2017

As of April 30, 2017

9,800,000

9,800,000

9,800,000

9,800,000[Note] The interest rates presented are daily weighted average interest rates. As for long-term debts due within one year and long-term debts whichwere hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used.

VIII. Notes to Financial Statements

29

The annual maturities of short-term debt, long-term debt due within one year andlong-term debt as of October 31, 2017 were as follows:(Thousands of yen)

Due within one year
Due after one to two years
Due after two to three years
Due after three to four years
Due after four to five years
Due after five years

2,600,000
2,900,000
3,000,000–
1,300,000–

Note 11 – Leases
As Lessor
The future minimum rental revenues under existing non-cancelable operating leases as of October 31, 2017 andApril 30, 2017 were as follows:(Thousands of yen)

Due within one year
Due after one year
Total

As of October 31, 2017
1,393,218
11,052,426
12,445,644

As of April 30, 2017
1,256,418
11,305,987
12,562,405

Note 12 – Income Taxes
NHI is subject to income taxes in Japan. The effective tax rate on NHI’s income based on applicable Japanese
tax law was estimated as 0.36% for the six months ended October 31, 2017. The effective tax rate on NHI’s
income based on applicable Japanese tax law was estimated as 0.35% for the six months ended April 30, 2017.
The following table summarizes the significant differences between the statutory tax rates and NHI’s effective tax
rates for financial statement purposes.
For the six months ended
For the six months ended
October 31, 2017
April 30, 2017
Statutory tax rate
31.74%
31.74%
Deductible dividends(31.62)(31.63)
Others0.24
0.24
Effective tax rate
0.36%
0.35%
NHI was established as an investment corporation under the Investment Trust Act, and as long as aninvestment corporation distributes to its unitholders at least 90% of earnings available for dividends for a period
and other requirements prescribed in the Special Taxation Measures Law of Japan are met, the investment
corporation is allowed to deduct the total amount of dividends, excluding distribution in excess of earnings, incalculating its taxable income under Japanese tax regulations.
The significant components of deferred tax assets and liabilities as of October 31, 2017 and April 30, 2017
were as follows:(Thousands of yen)

Deferred tax assets:
Accrued enterprise tax
Total deferred tax assets
Net deferred tax assets

30

As of October 31, 2017

As of April 30, 2017
14
14
14

13
13
13

Note 13 – Per Unit Information
Information about net assets per unit and net income per unit as of October 31, 2017 and April 30, 2017 andfor the periods then ended were as follows. The computation of net income per unit is based on the daily
weighted average number of units outstanding during the period. The computation of net assets per unit isbased on the number of units outstanding at each period end.

Net assets at period end per unit
Net income per unit

For the six months ended
October 31, 2017
140,337 yen
3,274 yen

For the six months endedApril 30, 2017
141,206 yen
3,342 yen

Net income per unit is calculated by dividing the net income by the daily weighted average number ofinvestment units issued and outstanding. The diluted net income per unit is not stated as there are no diluted
investment units.
(Note) The basis for calculating the net income per unit is as follows.

For the six months ended
October 31, 2017244,362

For the six months endedApril 30, 2017249,479––

Net income available to ordinary unitholders

244,362

249,479

Average number of units during the period (units)

74,632

74,632

Net income (thousands of yen)Amount not available to ordinary unitholders(thousands of yen)(thousands of yen)

Note 14 – Distribution
In accordance with the cash distribution policy described in Article 33-1-1 of the Articles of Incorporation of
NHI, NHI determines that the amount of distribution shall exceed the amount equivalent to 90% of its
distributable profit as stipulated in Article 67-15 of the Special Taxation Measures Law, and shall be up to its
earnings as the maximum amount. Following this policy, NHI has decided that it shall distribute 244,345,168 yen
for the fiscal period ended October 31, 2017, which is the maximum integral multiple to 74,632 units issued andoutstanding as the distribution of earnings, and 249,494,776 yen for the fiscal period ended April 30, 2017,
which is the maximum integral multiple to 74,632 units. In addition, NHI will continue to make distributions inexcess of earnings (refund of capital contribution to unitholders) every period in accordance with the cash
distribution policy described in Article 33-1-2 of the Articles of Incorporation of NHI. Based on the policy, NHI
has decided that it shall distribute 63,437,200 yen, which is calculated as the approximate equivalent of 32% of
195,847,818 yen of the depreciation amount posted for the fiscal period ended October 31, 2017, as
distributions in excess of earnings (refund of capital contribution to unitholders) and 59,705,600 yen for the fiscal
period ended April 30, 2017, which is calculated as the approximate equivalent of 31% of 193,676,662 yen of
the depreciation amount posted for the fiscal period ended April 30, 2017.
(Yen)

Unappropriated retained earnings
Distributions in excess of retained earnings
Deduction from unitholders’ capital
Distributions
Distributions of retained earnings
Distributions in excess of retained earnings
Total distributions
Retained earnings brought forward

For the six months ended
October 31, 2017Total
Per unit
244,382,227

For the six months endedApril 30, 2017Total
Per unit
249,515,254

63,437,200

59,705,600

244,345,168
63,437,200
307,782,368
37,059

3,274
850
4,124

249,494,776
59,705,600
309,200,376
20,478

3,343
800
4,143

VIII. Notes to Financial Statements

31

Note 15 – Transactions with Related Parties(For the six months ended October 31, 2017)
No related-party transaction was entered into for the six months ended October 31, 2017.
(For the six months ended April 30, 2017)
No related-party transaction was entered into for the six months ended April 30, 2017.

Note 16 – Segment Information
For the six months ended October 31, 2017 and April 30, 2017
Segment Information
Segment information has been omitted as NHI has only one segment, which is the property leasing business.
Related Information
Information about Products and Services
Disclosure of this information has been omitted as operating revenues to external customers for a single
product/service category account for more than 90% of the operating revenues on the statements ofincome and retained earnings.
Information about Geographic Areas(1) Operating revenues
Disclosure of this information has been omitted as domestic operating revenues account for morethan 90% of total operating revenues.
(2) Investment properties
Disclosure of this information has been omitted as domestic investment properties account for morethan 90% of the book value of the total investment properties.
Information about Major Tenants
Disclosure of this information has been omitted as there is no tenant that accounts for 10% or more of
the operating revenues recorded in the statements of income and retained earnings.

Note 17 – Significant Subsequent Events
Not applicable.

32

IX. Independent Auditor’s Report

IX. Independent Auditor’s Report33Feature

Introduction of Operators

F acility, long-term care and nursing careservices businesses
Fee-based homes for the elderly with nursing care
Residential-type fee-based homes for the elderly
Elderly housing with supportive services
Housing for the elderly used exclusively for living
Group homes, and facilities providing multifunctional longterm care in a small group home settingHome-visit nursing care

Hyogo
PrefectureLife Care Takarazuka

Kitatanabe Kagayaki-no-SatoAll rooms are of a spacious design of 25m2 or more. This home designed tobe comfortable to live in will beautifully color the lives of residents.
Location: 1-9-9 Kitatanabe, Higashisumiyoshi-ku, Osaka-shi, Osaka 546-0044
Nearest station: 4-minute walk from Bishoen Station on the JR Hanwa Line

·Osaka City·

Cherry One Jusohigashi

Group Home Naniwa Sakuranbo Cherry One Tsuruhashiekimae
Shokibo Takino-gata Kyotaku
Kaigo Sakuranbo
Pommier Uehonmachi
Crystal Court Nambaminami

Crystal Court Nambaminami

Heart Life EBISU
Kitatanabe Kagayaki-no-Sato

The Property aims to be one where residents can lead their own lives intheir own way as they did before moving in. The Property is not only wellequipped but also has alliances with long-term care and medical institutions
and other features to offer a sense of security even in terms of healthmanagement support.

Nihon Homon Kango Station

Sakuranbo Kumata
Sakuranbo Kitatanabe

Nihon Kaigo Iryo Center
Co., Ltd.

Location: 2-3-10 Shiokusa, Naniwa-ku, Osaka-shi, Osaka 556-0024
Nearest station: 5-minute walk from Ashiharabashi Station on the JR Osaka Loop Line

Soleil Anryu
Sakuranbo Shimizugaoka

Verger Hiranominami(As of December 2017)
Soleil Anryu
Pommier Uehonmachi
Heart Life EBISU
Sakuranbo Kitatanabe
Kitatanabe Kagayaki-no-Sato
Sakuranbo Kumata
Sakuranbo Shimizugaoka

Sakuranbo Shimizugaoka
The Property offers a highly comfortable living environment. The
surroundings include Raifukuji and are also rich in nature with Yamato River,making it a home where residents can spend everyday life in a leisurely
manner while enjoying the changing seasons.
Location: 3-4-5 Shimizugaoka, Sumiyoshi-ku, Osaka-shi, Osaka 558-0033
Nearest station: 10-minute walk from Abikomae Station on the Nankai Koya Line

Cherry One Jusohigashi
Cherry One Tsuruhashiekimae
Crystal Court Nambaminami
Verger Hiranominami

4-4-15 Anryu, Suminoe-ku, Osaka-shi, Osaka 559-0003
4-5-4 Ueshio, Tennoji-ku, Osaka-shi, Osaka 543-0002
2-4-22 Ebisuhonmachi, Naniwa-ku, Osaka-shi, Osaka 556-0013
3-3-21 Kitatanabe, Higashisumiyoshi-ku, Osaka-shi, Osaka 546-0044
1-9-9 Kitatanabe, Higashisumiyoshi-ku, Osaka-shi, Osaka 546-0044
7-5-23 Kumata, Higashisumiyoshi-ku, Osaka-shi, Osaka 546-0002
3-4-5 Shimizugaoka, Sumiyoshi-ku, Osaka-shi, Osaka 558-0033
1-1-17 Jusohigashi, Yodogawa-ku, Osaka-shi, Osaka 532-0023
3-2-4 Higashiobase, Higashinari-ku, Osaka-shi, Osaka 537-0024
2-3-10 Shiokusa, Naniwa-ku, Osaka-shi, Osaka 556-0024
3-7-29 Nagayoshikawanabe, Hirano-ku, Osaka-shi, Osaka 547-0014

Group Home Naniwa Sakuranbo
Shokibo Takino-gata Kyotaku
Kaigo Sakuranbo

2-3-21 Shiokusa, Naniwa-ku, Osaka-shi, Osaka 556-0024

Nihon Homon Kango Station

1-3-9 Showacho, Abeno-ku, Osaka-shi, Osaka 545 -0011*The properties listed above with photos include those that are neither in the NHI portfolio at present or scheduled to be incorporated into the NHI portfolio in the future.

Nihon Kaigo Iryo Center Co., Ltd.

Feature

Introduction of Operators

Verger Hirakata

Osaka Prefecture

Torikai Kagayaki-no-Sato
Fiore Senior Residence Hirakata

Verger Hirakata
Happy Life Toyonaka
Crystal Court Shijonawate

The Property offers a lively atmosphere unique to large-scale homes,
enriching and adding color to residents’ senior life. Completely barrierfree to ensure safety. At the same time, residents can enjoy an easygoing
lifestyle.
Location: 2-20-4 Koyamichi, Hirakata-shi, Osaka 573-1131
Nearest station: In front of Hirakata Heights bus stop, which is a 15-minute bus ride from
Kuzuha Station on the Keihan Main Line

Accord Fuse

Lcrew Hyotanyamaekimae

Sakuranbo Ohasu

Heart Life Mikunigaokahigashi

Nara Prefecture

Torikai Kagayaki-no-Sato
The Property has natural hot spring effective for nerve pains and joint pains,footbath, rooftop garden, courtyard and other relaxing spaces.
Location: 3-19-18 Torikaikami, Settsu-shi, Osaka 566-0062
Nearest station: Kamitorikai-kita bus stop, which is a 20-minute bus ride from Minami-settsu
Station on the Osaka Monorail Line

New Life Otori
Happy Life Izumiotsu

Sakuranbo Ohasu
Lcrew Hyotanyamaekimae
Accord Fuse
Verger Hirakata
Fiore Senior Residence Hirakata
New Life Otori
Heart Life Mikunigaokahigashi
Happy Life Toyonaka
Torikai Kagayaki-no-Sato
Crystal Court Shijonawate
Happy Life Izumiotsu
Cherry One Yamatotakada
Life Care Takarazuka

Cherry One Yamatotakada

4-23-21 Ohasuminami, Higashiosaka-shi, Osaka 577-0825
16-15 Kandacho, Higashiosaka-shi, Osaka 579-8058
1-30-15 Chodo, Higashiosaka-shi, Osaka 577-0056
2-20-4 Koyamichi, Hirakata-shi, Osaka 573-1131
4-10 Higashikorishinmachi, Hirakata-shi, Osaka 573-0077
540-22 Kami, Nishi-ku, Sakai-shi, Osaka 593-8311
2274 Kurotsuchicho, Kita-ku, Sakai-shi, Osaka 591-8024
2-15-14 Kozushima, Toyonaka-shi, Osaka 561-0843
3-19-18 Torikaikami, Settsu-shi, Osaka 566-0062
3-8-3 Okayamahigashi, Shijonawate-shi, Osaka 575-0003
2-9-28 Higashisukematsucho, Izumiotsu-shi, Osaka 595-0006
2-13-25 Jinraku, Yamatotakada-shi, Nara 635-0025
3-10-1 Akuranaka, Takarazuka-shi, Hyogo 665-0822

Lcrew Hyotanyamaekimae
The Property is designed to completely barrier-free specifications forresidents to stay with peace of mind.
Location: 16-15 Kandacho, Higashiosaka-shi, Osaka 579-8058
Nearest station: 7-minute walk from Hyotan-yama Station on the Kintetsu Nara Line

Nihon Kaigo Iryo Center Co., Ltd.

Feature

Introduction of Operators

F acility Services Business

Yakisoba (Japanese stir-fried noodles) party

Boasting 24-hour/365-day service with kindness,courteousness and security.
Sumo wrestler visit

Nihon Kaigo Iryo Center(Sugi Pharmacy Showacho Store)

Midos
Showac uji Lineho Statio

Exit 4

A childcare center was opened in April 2017 aimed at balancing work and childrearing.

n

E mployer-Provided Childcare Project (On-Site Childcare Project)

Abeno Primaire

P rovision of Work Experience and Facility Tour Opportunities, andParticipation in Career Days

Facilities are made available for work experience to the young who will be in the forefrontof the long-term care profession in the next generation and persons interested in returning
to the profession, and visits are made to nearby schools to speak at career days.

Nihon Kaigo Iryo Center Co., Ltd.

Feature

Introduction of Operators

Places and opportunities to gather are organized and various events held to celebrate the seasons.

Awa-odori (traditional dance of Tokushima Prefecture)

Okinawa-minyo (folk songs of Okinawa Prefecture)

Hikoboshi and Orihime (local mascots) visit

Bunraku (traditional Japanese puppet theater)

Koto (traditional Japanese stringed musical instrument)

Jazz

D isaster Prevention Awareness Raising
Increasingly “further safety” is pursued by being equipped in both the tangible and intangible aspects for any typeof disaster, whether natural, man-made, internal or external.

Safe house for children

T aking a Worldwide Perspective
Bilingual and trilingual fostering and dedicated departments are in place to respond to the state of work environments
being ever-changing.
Country name in ISO country code

Staff countPeople’s Republic of China

(CHN)

1

Republic of the Union of Myanmar

(MMR)

1

Federal Democratic Republic of Nepal (NPL)

1

Republic of the Philippines

2

(PHL)

Nihon Kaigo Iryo Center Co., Ltd.

Feature

Introduction of Operators

C ustomer Service Policy
Diversification and specialization of forms in the individual fields of long-term care, nursing care and medical care
supporting the elderly led to a growing awareness that strengthening the weak collaboration among these serves as a key
underlying support and thus led to experts in the individual fields assembling to form the SAKURANBO Group.

The SAKURANBO Group shall not only be a specialist in providing services according to the individual conditions of
the users but aim to also be a generalist with a view to improving the living environment and welfare environment,
continuing to be a partner making steps and accomplishments together.

The SAKURANBO Group shall take a scrupulous approach to working hard to resolve issues with an insatiable inquisitivemind. Efforts shall be made to foster successors of the next generation and form characters capable of naturally
providing the NEXT ONE rather than settling for the status quo.

The SAKURANBO Group shall aspire to be a body that has the ancient Chinese philosopher Lao Tzu’s saying “Perfectkindness acts without thinking kindness” as an instinct.

The SAKURANBO Group shall approach services with the strength of unity like entwined branches and a collaborative
structure based on information sharing on the thinking that leveraging individual superior skills combined is an asset
worthy of the name teamwork or team play.

The SAKURANBO Group shall use the limited resources with no waste, inconsistency, unreasonableness or
meaninglessness, and carry out practical implementation of the PDCA cycle in a rational manner.

The SAKURANBO Group shall pursue accord by thinking of possible ways to achieve harmony of food, clothing andhousing, individual features with regional coexistence, environmental conservation with industrial development, andpeople with people.
The SAKURANBO Group shall refine norms and traditions with outstanding courage and power, self-discipline andnobility, and self-sacrificing spirit.

The SAKURANBO Group shall engage in public interest activities based on the spirit of love and benevolence in aneven more proactive manner.

The SAKURANBO Group shall act orderly, maintaining refined diction externally and law-abiding spirit, courtesy anddignity internally.

S tory Behind the SAKURANBO Mark
Fruit on the kanji character for person (人) in the shape of “people connecting fruit” or “people bearing
fruit” forms “SAKURANBO” (sakuranbo is Japanese for cherry). This represents earnest desire for people
to gather and support, consider and value each other, and by each and every person acting with aim andresponsibility, people form companies, bearing large fruit for the Group.

Nihon Kaigo Iryo Center Co., Ltd.

Feature

Introduction of Operators

C ompany Overview
Company name: Nihon Kaigo Iryo Center Co., Ltd.
Head office: 2-4-1 Hannancho, Abeno-ku, Osaka-shi, Osaka
Representative: Yusuke Taniguchi, Representative Director
Established: October 7, 1997
Paid-in capital: 50 million yen
Number of employees: 250
Business activities: · Home-visit long-term care
· Home-visit nursing care
· In-home long-term care support· Rental of equipment covered by public aid· Community life support for persons with disabilities· Daily-life long-term care for residents of specified facilities(Fee-based homes for the elderly with nursing care)· Residential-type fee-based homes for the elderly· Elderly housing with supportive services

M anagement Philosophy
The long-term care services we perform are to aid persons requiring long-termcare to be self-reliant while respecting their lifestyles as much as possible.
Long-term care can be easily defined at a word, but persons requiring longterm care each differ in conditions and circumstances that are ever-changing
with also time, climate, physical conditions and the caregivers. With a wealth ofknowledge, experience and skills and the spirit to further improve, we provide
long-term care services based on~Consideration~~Cordial service~~Attentiveness, Sensitivity and Thoughtfulness~that define “hospitality.”
By becoming a model business in satisfaction for persons requiring long-termcare, sense of security to meet the expectations of their families and relatives
and long-term care services recommended by administrative authorities andbeyond the boundaries of simply the provision of services in social welfare,social security and public health, we deliver the ultimate satisfaction of being
able to spend a blissful time wrapped in sincerity we call “The SAKURANBO
Hospitality.”
Nihon Kaigo Iryo Center Co., Ltd.

Yusuke Taniguchi, Representative Director

VerifyWhen in doubt, go back to the basics
to report, contact, consult and verify
without fail.

ReportBasicsContact

And then the compass of the heart
points to sincerity.

Consult

Nihon Kaigo Iryo Center Co., Ltd.

Introduction of Operators
Nihon Kaigo Iryo Center Co., Ltd.
Feature Vol. 6

Heart Life EBISU’s exterior

Torikai Kagayaki-no-Sato’s rooftop garden

Verger Hiranominami’s exterior