This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

REIT Financial Report for the 6th Fiscal Period
June 19, 2017
REIT Issuer:
Nippon Healthcare Investment Corporation
Securities Code: 3308
Representative: Hiroshi Takeuchi, Executive Director
Asset Manager:
Representative:
Inquiries to:

Stock Exchange Listing: TSE
URL: http://www.nippon-healthcare.co.jp/

Daiwa Real Estate Asset Management Co. Ltd.
Akira Yamanouchi, President and Representative Director
Kentaro Azumi, General Manager of Customer Relations Department TEL: +81-3-6757-9600

Scheduled date of submission of periodic securities report (yuka shoken hokokusho):Scheduled date of start of distribution payments:
Preparing presentation material:
Holding financial brief meeting:

July 18, 2017
July 18, 2017

Yes
Yes (for institutional investors and analysts)[Amounts are rounded down to the nearest million yen, except for per unit figures]

1. Status of Management and Assets for the 6th Fiscal Period
6th Fiscal Period: Fiscal period ended April 2017 (from November 1, 2016 to April 30, 2017)(1) Management[% figures show the period-on-period increase (decrease)]
FiscalperiodOperating revenue

Operating income

Ordinary income

Net income

million yen%

million yen%

million yen%

million yen

%

6th
5th

697
679

2.7
1.8

277
274

1.1
(5.2)

250
247

1.1
(5.4)

249
246

1.1
(5.4)

FiscalperiodNet income
per unit

6th
5th

Net income tounitholders’ equity

Ordinary income tototal assets

Ordinary income tooperating revenue

yen

%

%

%

3,342
3,305

2.4
2.3

1.2
1.2

35.9
36.4

(2) Distributions

Fiscalperiod6th
5th

Distribution
amountper unit(including
distribution
amountin excess ofearnings)
yenDistribution
amountper unit(excluding
distribution
amountin excess ofearnings)
yen

4,143
4,106

3,343
3,306

yen

Total
distribution
amount(including
distribution
amountin excess ofearnings)
million yen

Total
distribution
amount(excluding
distribution
amountin excess ofearnings)
million yen

800
800

309
306

249
246

Distribution
amountin excess ofearnings
per unit

Total
distribution
amountin excess ofearnings

Dividend
payoutratio

Distribution
amount to
net assets

million yen

%

%

59
59

100.0
100.0

2.4
2.3

(Note 1) The rate of decrease in surplus, etc. from implementing cash distributions in excess of earnings (reimbursement ofinvestments in capital which falls under the category of distribution reducing unitholders’ capital for tax purpose) in the 6th
Fiscal Period and the 5th Fiscal Period are 0.006, respectively. Furthermore, calculation of the rate of decrease in surplus, etc.
is pursuant to Article 23, Paragraph 1, Item 4 of the Order for Enforcement of the Corporation Tax Act (Cabinet Order No.
97 of 1965; including amendments thereto).
(Note 2) The total distribution amounts in excess of earnings for the 6th and 5th Fiscal Periods are entirely reimbursement ofinvestments in capital which falls under the category of distribution reducing unitholders’ capital for tax purpose.
(Note 3) Dividend payout ratio and distribution amount to net assets are calculated based on figures excluding distribution amount inexcess of earnings.

-1-(3) Financial Position
FiscalTotal assets
periodUnitholders’ equity tototal assets

Net assets

Net assets
per unit

million yen

million yen%

yen

21,26921,315

10,538
10,59549.5
49.7

141,206
141,969

Net cashprovided by (used in)operating activities

Net cashprovided by (used in)investing activities

Net cashprovided by (used in)financing activities

million yen

million yen

million yen

million yen

470
446

(35)
(762)

(306)
180

1,595
1,466

6th
5th
(4) Cash Flows
Fiscalperiod6th
5th

Cash andcash equivalents
at end of period

2. Management Status Forecasts for the 7th Fiscal Period and the 8th Fiscal Period
7th Fiscal Period: Fiscal period ending October 2017 (from May 1, 2017 to October 31, 2017)
8th Fiscal Period: Fiscal period ending April 2018 (from November 1, 2017 to April 30, 2018)[% figures show the period-on-period increase (decrease)]
Fiscalperiod7th
8th

Fiscalperiod7th
8th

Operating revenue

Operating income

Ordinary income

Net income

million yen%

million yen%

million yen%

million yen

%

697
697

(0.0)
0.0

271
272

(2.2)
0.3

243
242

(2.7)
(0.3)

242
241

(2.8)
(0.3)

Distribution amount per unit
(including distribution amountin excess of earnings)

Distribution amount per unit
(excluding distribution amountin excess of earnings)

Distribution amountin excess of earnings
per unit

yen

yen

yen

4,100
4,100

3,250
3,240

850
860

(Reference) Estimated net income per unit for the 7th Fiscal Period: 3,250 yen; 8th Fiscal Period: 3,240 yen* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates and Retrospective Restatement(i) Changes in accounting policies due to amended accounting standards, etc.: None(ii) Changes in accounting policies other than (i):None(iii) Changes in accounting estimates:None(iv) Retrospective restatement:
None(2) Total Number of Investment Units Issued and Outstanding(i) Total number of investment units issued and outstanding(including own investment units) at end of period:(ii) Number of own investment units at end of period:(Note)

6th Fiscal Period
5th Fiscal Period
6th Fiscal Period
5th Fiscal Period

74,632 units
74,632 units– units– units

Please refer to “Notes to Per Unit Information” on page 23 for the number of investment units used as the basis forcalculating the net income per unit.

* Presentation of the status of implementation of audit proceduresThis financial report (kessan tanshin) is exempt from the audit procedures pursuant to the Financial Instruments and Exchange
Act (Act No. 25 of 1948; including amendments thereto) (hereinafter referred to as the “Financial Instruments and Exchange Act”)
and, at the time of disclosure of this financial report (kessan tanshin), the audit procedures pursuant to the Financial Instruments andExchange Act have not been completed.
* Explanation of the appropriate use of the management status forecasts, and other matters of special note
The forecast figures are forward-looking statements based on information currently available to Nippon Healthcare Investment
Corporation and involve uncertainties. Accordingly, the actual operating revenue, operating income, ordinary income, net income
and distribution amount per unit may vary due to changes in the status. In addition, the forecast is not a guarantee of the distribution
amount. For details on the assumptions underlying the forecast figures above, please refer to “Assumptions for the Management
Status Forecasts for the 7th Fiscal Period (from May 1, 2017 to October 31, 2017) and the 8th Fiscal Period (from November 1,
2017 to April 30, 2018)” on page 8.

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Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
1. Affiliated Juridical Persons of the Investment Corporation
1.1. Structure of the Investment Corporation
Disclosure is omitted because there are no significant changes from the “Structure of Investment
Corporation” set out in the most recent periodic securities report (yuka shoken hokokusho) (submitted on
January 20, 2017).
2. Management Policy and Management Status
2.1. Management Policy
Disclosure is omitted because there are no significant changes from the “Investment Policy,” “Investment
Target” and “Distribution Policy” set out in the most recent periodic securities report (yuka shoken hokokusho)(submitted on January 20, 2017) as of the date of this document.
2.2. Management Status(1) Overview of the Fiscal Period under Review
A. Brief History of the Investment Corporation
Nippon Healthcare Investment Corporation (hereinafter referred to as “NHI”) was established on January 7,
2014 in accordance with 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 theorganizer. After its establishment, NHI implemented an additional issuance of investment units throughprivate placement (18,800 units) on April 3, 2014. NHI commenced actual management with the acquisitionof eight properties on March 28, 2014 by using the proceeds from the concerned capital increase throughprivate placement and borrowings.
After having built a track record of approximately seven months since commencement of management,
NHI implemented an additional issuance of investment units through public offering (39,000 units) on
November 4, 2014. On the following day, NHI listed on the Tokyo Stock Exchange, Inc. (hereinafterreferred to as “Tokyo Stock Exchange”) Real Estate Investment Trust Securities Market (securities code:3308), along with additionally acquiring six properties. In the 3rd Fiscal Period, NHI additionally acquired
three properties with borrowings and cash on hand. In the 4th Fiscal Period, NHI implemented an additional
issuance of investment units through public offering (12,130 units) on November 17, 2015, and additionallyacquired four properties. In the 5th Fiscal Period, NHI additionally acquired one property with borrowingsand cash on hand on October 6, 2016. The additional acquisition of properties brought the total acquisition
price, which was 13,280 million yen at the time of listing, to 19,318 million yen as of the end of April 2017.
As a Japanese REIT specializing in healthcare facilities in that it invests solely in properties of which theprincipal use is healthcare facilities, NHI effectively utilizes investor capital to initiate expansion of supply ofhigh-quality healthcare facilities that provide users with high-standard services, while at the same time
produce adequate returns to investors for further capital inflow. In this way, NHI aims at creating a new
virtuous cycle for healthcare facilities and the services provided, together with investors. Through these
efforts, NHI would like to contribute to the realization of Japan’s major policy to improve the residential
environment for the elderly by effectively utilizing private sector funds.
B. Investment Environment and Management Performancea. Investment Environment (from November 1, 2016 to April 30, 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.
In Japan, where the population of the elderly aged 65 years or over (hereinafter referred to as the“Elderly Population”) accounts for over one-quarter of the total population as of December 1, 2016(according to the Ministry of Internal Affairs and Communications’ “Population Estimates” (announced
on May 22, 2017)), the Elderly Population as a percentage of the total population (hereinafter referred toas the “Elderly Population Percentage”) is forecast to continue to rise 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 the elderly with nursing care services, etc. that are designed for the elderly toreside (referring to “silver housing” (public housing for the elderly), “good rental housing for the elderly,”“elderly housing with supportive services,” “fee-based homes for the elderly” and “low-cost homes forthe 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.

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Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
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
and thereby seize opportunities to earn cash flows arising from the mounting social demand.
b. Management Performance
In the fiscal period under review (6th Fiscal Period: fiscal period ended April 2017 (from November 1,
2016 to April 30, 2017)), there were no property acquisitions.
Concerning the properties owned as of the end of the 6th Fiscal Period (April 30, 2017), the leasable
floor area was 67,298.83m2 and the occupancy rate was 100.0%.
C. Overview of Capital Procurement
NHI did not conduct capital procurement in the 6th Fiscal Period.
The balance of interest-bearing liabilities outstanding at the end of the 6th Fiscal Period (April 30, 2017)
totaled 9,800 million yen (short-term loans payable: 500 million yen; long-term loans payable: 9,300 millionyen). Of the long-term loans payable, 1,800 million yen is due for repayment within one year. The averageremaining years to maturity as at the end of the 6th Fiscal Period was 2.0 years.
At the end of the 6th Fiscal Period, unitholders’ capital in the net amount was 10,288 million yen and thetotal number of investment units issued and outstanding was 74,632 units.
Balance of Borrowings from Each Financial Institution (as of April 30, 2017)
End of the 6th Fiscal Period
Lender(million yen)Mizuho Bank, Ltd.
2,800
Resona Bank, Limited
1,700
Sumitomo Mitsui Trust Bank, Limited
1,700
Mizuho Trust & Banking Co., Ltd.
1,200
The Musashino Bank, Ltd.
1,000
Shinkin Central Bank
900
The Dai-ichi Life Insurance Company, Limited
500
Total
9,800
(Note) Share is rounded to two decimal places.

Share (%)
(Note)
28.57
17.35
17.35
12.24
10.20
9.18
5.10
100.00D. Overview of Financial Performance and Distributions
As a result of the management described above, NHI posted financial performance for the 6th Fiscal
Period of 697 million yen in operating revenue, 277 million yen in operating income, 250 million yen in
ordinary income and 249 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 perunit of 3,343 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 59,705,600 yen, which is the amountroughly equivalent to 31% of the 193 million yen in depreciation for the 6th Fiscal Period, as reimbursementof investments in capital which falls under the category of distribution reducing unitholders’ capital for tax
purpose. Accordingly, NHI declared a distribution amount in excess of earnings per unit of 800 yen.
(Note) NHI adopts a policy of implementing uninterrupted cash distributions in excess of earnings(reimbursement of investments in capital which falls under the category of distribution reducing unitholders’capital for tax purpose) in an amount not to exceed 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 not affect long-term repair plans in light of the capital expenditures for each accounting
period assumed based on the long-term repair plans and to meet needs for funds (new acquisition of-4-

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
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 owned as of the end of the
6th Fiscal Period (22 properties) is 29 million yen.

(2) Outlook for the Next Fiscal Period
A. Investment Environment
In Japan, where the Elderly Population accounts for over one-quarter of the total population, the Elderly
Population Percentage is expected to continue to rise and the population of the elderly living alone is
expected to continue to grow. With the development of medical technology, among other factors, recordhighs were set in terms of the average life expectancy at birth for Japanese people at 80.79 years for males
and 87.05 years for females according to the Ministry of Health, Labour and Welfare’s “Abridged Life
Tables for Japan 2015,” and in terms of the Elderly Population at 34.67 million people and the Elderly
Population Percentage at 27.3% of the total population of 126.91 million people as of December 1, 2016
according to the Ministry of Internal Affairs and Communications’ “Population Estimates” (announced on
May 22, 2017).
According to the National Institute of Population and Social Security Research’s “Population Projections
for Japan (2017),” the total population at 122.54 million people and the Elderly Population at 36.77 million
people will increase the Elderly Population Percentage to 30.0% in 2025 and then, while the total population
will decrease by approximately 38.84 million people from that at present to 88.07 million people, the Elderly
Population will become 33.81 million people and the Elderly Population Percentage will reach 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
for the elderly with nursing care services, etc. that are designed for the elderly to reside through effective
utilization of private sector funds.
B. Future 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.
(i) Stabilization of earnings
In principle, NHI shall invest in properties with the actual remaining lease contract period at thetime of acquisition of 10 years or more, taking into account also the possibility of contract renewal.
In view of 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.
(ii) Criteria and methods for selecting operators
In the event of acquisition of healthcare facilities, not only the quality of the facilities as real estate,
but also 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
value of healthcare facilities.
(iii) 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 to provide to the effect that, in theevent that a lease agreement for a healthcare facility owned by NHI has ended or is expected to end
due to contract termination, contract cancellation or other reason, where NHI requests anotheroperator of acquired assets to conclude a new lease agreement with NHI and to operate the healthcare
facility, the operator shall sincerely discuss the request. In addition, NHI shall consider concluding asimilar agreement with also the operators of healthcare facilities to be acquired in the future. Such
relationship by agreement with operators is referred to as “Backup Operator Membership.”-5-

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Periodb. Strategy for New Property Investments
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 incollaboration with the sponsor group and the adviser.
(i) 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(business companies, financial institutions, major real estate brokerage companies and real estate
brokerage parties, etc.) accumulated through asset management of Daiwa Office Investment
Corporation (balance of assets for which management is entrusted as of the end of May 2017:
approximately 469.3 billion yen) and Daiwa Residential Private Investment Corporation (balance ofassets for which management is entrusted as of the end of May 2017: approximately 100.5 billionyen). 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 building of relationships with new suppliers andsources of property information (healthcare facility operators, developers, etc.) other than existing
property sourcing channels to collect property information.
(ii) 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,
commissioning of facility operation, etc., and thinks that expansion of property acquisition
opportunities can thus be expected.
(iii) 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
in private 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.
(i) 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.
(ii) 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 overborrowing costs, loan 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 interest rate trends, market level, financial agility and security, the balance oflender composition and other factors.
In order to reduce the risk of interest rate increases 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.
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Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period(iii) 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,
the amount remaining after setting aside cash and deposits shall be allocated to implement cash
distributions in excess of earnings to unitholders uninterruptedly every fiscal period in an amount not
to exceed 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
and financial status of NHI and other factors.
There may be cases where surplus funds will be invested into securities and monetary claims thatare highly secure and liquid.
Derivative transactions (Article 2, Paragraph 6 of the Investment Trusts Act) shall be limited tothose managed for the purpose of hedging the risk of fluctuations in interest rates on the liabilities of
NHI.
C. Significant Subsequent Events
Not applicable.
D. Outlook for Management Status
NHI forecasts the following management status for the 7th Fiscal Period (from May 1, 2017 to October 31,2017) and the 8th Fiscal Period (from November 1, 2017 to April 30, 2018). For the assumptions underlying
the management status forecasts, please refer to the “Assumptions for the Management Status Forecasts forthe 7th Fiscal Period (from May 1, 2017 to October 31, 2017) and the 8th Fiscal Period (from November 1,
2017 to April 30, 2018)” on page 8.
7th Fiscal Period (from May 1, 2017 to October 31, 2017)
Operating revenue
Operating income
Ordinary income
Net income
Distribution amount per unit
(excluding distribution amount in excess of earnings)
Distribution amount in excess of earnings per unit
Distribution amount per unit
(including distribution amount in excess of earnings)

697 million yen
271 million yen
243 million yen
242 million yen
3,250 yen
850 yen4,100 yen

8th Fiscal Period (from November 1, 2017 to April 30, 2018)
Operating revenue
697 million yen
Operating income
272 million yen
Ordinary income
242 million yen
Net income
241 million yen
Distribution amount per unit
3,240 yen(excluding distribution amount in excess of earnings)
Distribution amount in excess of earnings per unit
860 yenDistribution amount per unit
4,100 yen(including distribution amount in excess of earnings)(Note) Discrepancies between the forecast figures above and the assumptions may arise due to future additional
acquisition or sale of real estate, etc., real estate market and other developments, fluctuation in interest rates,change in other circumstances surrounding NHI and other factors. Accordingly, the actual operating
revenue, operating income, ordinary income, net income, distribution amount per unit and distribution
amount in excess of earnings per unit may vary as a result. In addition, the forecast is not a guarantee ofthe distribution amount and distribution amount in excess of earnings.

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Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
Assumptions for the Management Status Forecasts for the 7th Fiscal Period (from May 1, 2017 to October
31, 2017) and the 8th Fiscal Period (from November 1, 2017 to April 30, 2018)
Item
Calculation
periodAssetsundermanagement

Operatingrevenue

OperatingexpensesNon-operating
expenses

Interest-bearing
liabilities

Total number ofinvestment units
issued andoutstanding

Assumption
・7th Fiscal Period
Fiscal period ending October 2017: from May 1, 2017 to October 31, 2017 (184 days)
・8th Fiscal Period
Fiscal period ending April 2018: from November 1, 2017 to April 30, 2018 (181 days)
・7th Fiscal Period and 8th Fiscal Period: The assumption is that the 22 properties owned asof April 30, 2017 will continue to be owned and there will be no other acquisition of new
property through to the end of the 8th Fiscal Period.
・The actual number of properties may vary due to acquisition of new property, or dispositionof portfolio property, etc.
・Real estate rent revenue of acquired assets is calculated on the basis of the rent stated inlease agreements that have been concluded. Furthermore, the period-end occupancy rate
for each property is expected to be 100.0% at the end of the 7th Fiscal Period and 100.0%
at the end of the 8th Fiscal Period.
・The assumption is that there will be no gain (loss) on sales of real estate properties.
・Expenses related to rent business, which constitute a major component of operating
expenses, are calculated on the basis of historical data and by taking into consideration thefactors causing fluctuation in expenses.
・Operating income from property leasing (excluding gain on sales of real estate properties)
after deduction of expenses related to rent business (including depreciation) is assumed tobe 399 million yen for the 7th Fiscal Period and 400 million yen for the 8th Fiscal Period.
・Consignment expenses are assumed to be 12 million yen in the 7th Fiscal Period and 13
million yen for the 8th Fiscal Period.
・Taxes and dues (fixed property tax, city planning tax, etc.) are assumed to be 50 million yen
for the 7th Fiscal Period and 50 million yen for the 8th Fiscal Period.
・Depreciation, which is calculated using the straight-line method, is assumed to be 196
million yen for the 7th Fiscal Period and 198 million yen for the 8th Fiscal Period.
・Repair expenses for buildings are assumed based on medium- to long-term repair plans
formulated by the Asset Management Company to be 35 million yen for the 7th Fiscal
Period and 28 million yen for the 8th Fiscal Period. However, repair expenses possibly
increasing in amount or additionally arising from unforeseeable causes may result in repair
expenses differing materially from the forecast amount.
・27 million yen is assumed as interest expenses and other borrowing related expenses for the
7th Fiscal Period.
・29 million yen is assumed as interest expenses and other borrowing related expenses for the
8th Fiscal Period.
・The assumption is that total interest-bearing liabilities will be 9,800 million yen at the endof the 7th Fiscal Period and 9,800 million yen at the end of the 8th Fiscal Period.
・The assumption is that, in the 7th Fiscal Period, the entire amount of loans of 500 million
yen due for repayment on September 29, 2017 and 1,800 million yen in total due forrepayment on October 31, 2017 will be refinanced.
・The assumption is that there will be no change in loan balance in the 8th Fiscal Period.
・74,632 units, which is the total number of investment units issued and outstanding as ofApril 30, 2017.
・It is assumed that there will be no change to the number of investment units due to issuanceof new investment units, etc. in addition to the above, through to the end of the 8th Fiscal
Period.

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Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
Item

Assumption

Distribution
amountper unit(excluding
distribution
amountin excess ofearnings)

・Distribution amount per unit (excluding distribution amount in excess of earnings) is
calculated based on the assumption that the entire amount of earnings will be distributed inaccordance with the cash distribution policy set forth in the articles of incorporation of
NHI.
・Distribution amount per unit (excluding distribution amount in excess of earnings) may
vary due to various factors, including fluctuation in real estate rent revenue accompanying
change in assets under management, change in tenants, etc., or incurrence of unexpected
repairs.
・Distribution amount in excess of earnings per unit is calculated in accordance with the cash
distribution policy set forth in the articles of incorporation of NHI. The total distribution
amount in excess of earnings is assumed to be 63 million yen for the 7th Fiscal Period and64 million yen for the 8th Fiscal Period. The concerned total distribution amount in excessof earnings is respectively the amount equivalent to 32.3% and 32.4% of the depreciationthat is expected to arise for the concerned calculation period.
・NHI adopts a policy of implementing uninterrupted cash distributions in excess of earnings(reimbursement of investments in capital which falls under the category of distribution
reducing unitholders’ capital for tax purpose) in an amount not to exceed 40% ofdepreciation 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., inorder not to affect long-term repair plans in light of the capital expenditures for eachaccounting period assumed based on the long-term repair plans and to meet needs for funds(new acquisition of investment assets, repairs and capital expenditures required to maintainand enhance portfolio assets, NHI’s working capital, repayment of obligations, payout of
distributions, etc.).
・However, regardless of the policy described above, distributions in excess of earnings
mentioned above may vary in amount or may not be implemented at all in light of theeconomic environment, real estate market trends, status of portfolio assets and financial
status. In addition, accompanied by decrease in cash on hand, the implementation of
distributions in excess of earnings mentioned above may cause a shortage of cash on handin the event that need arises for capital expenditures, etc. beyond that assumed by NHI due
to sudden events, etc. or may cause financial constraints in agile property acquisition.
・The assumption is that there will be no revision of laws and regulations, tax systems,
accounting standards, listing regulations, rules of The Investment Trusts Association,
Japan, etc. that will impact the forecast figures above.
・The assumption is that there will be no unforeseen serious change in general economic
trends and real estate market conditions, etc.

Distribution
amountin excess ofearnings
per unit

Other

2.3. Investment Risks
Disclosure is omitted because there are no significant changes from “Part I: Fund Information; Section 1:
Fund Status; 3. Investment Risks” set out in the most recent periodic securities report (yuka shoken
hokokusho) (submitted on January 20, 2017).

-9-

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
3. Financial Statements
3.1. Balance Sheets(Unit: thousand yen)
5th Fiscal Period(As of Oct. 31, 2016)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Prepaid expenses
Deferred tax assets
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Equipment in trust
Accumulated depreciation
Equipment in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
Leasehold rights in trust
Trademark right
SoftwareTotal intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Total investments and other assets
Total non-current assets
Total assets

*1

*1

*1

*1
*1

*1

1,029,612
436,571
20,29012
1,262
1,487,748

12,356,179(749,045)
11,607,133
203,396(9,411)
193,984
7,811
(667)
7,144
7,949,065
19,757,328
40,886166
2,218
43,27010,00017,222
27,222
19,827,820
21,315,569- 10 -

6th Fiscal Period(As of Apr. 30, 2017)

*1

*1

*1

*1
*1

*1

1,163,996
431,232
14,62813
1,834
1,611,706

12,376,886(939,426)
11,437,459
204,274(11,911)
192,362
16,004(1,462)
14,541
7,949,065
19,593,430
40,886155
1,850
42,892
10,00011,943
21,943
19,658,266
21,269,972

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period(Unit: thousand yen)

Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable – other
Advances received
Deposits received
Income taxes payable
Accrued consumption taxes
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ equity
Unitholders’ capital, net
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets- 11 -

5th Fiscal Period(As of Oct. 31, 2016)

6th Fiscal Period(As of Apr. 30, 2017)24,838500,000
1,800,000
75,36685,085
573
867
337
2,828
2,489,897

55,368500,000
1,800,000
54,94985,139
538
878
1,085
3,301
2,501,260

*1
*1

*1

*2

7,500,000
730,216
8,230,216
10,720,113

*1
*1

*1

7,500,000
730,216
8,230,216
10,731,476

10,504,334(155,648)
10,348,686

10,504,334(215,353)
10,288,980

246,769
246,769
10,595,455
10,595,455
21,315,569

249,515
249,515
10,538,495
10,538,495
21,269,972*2

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
3.2. Statements of Income(Unit: thousand yen)
5th Fiscal Period(From: May 1, 2016
To: Oct. 31, 2016)
Operating revenue
Rent revenue – real estate
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Trust fee
Directors’ compensations
Audit fee
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing expenses
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)*1*1- 12 -

679,472
679,472
272,216
61,226725
17,086
6,285
4,200
6,000
37,029404,769
274,703

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

697,565
697,565294,678
61,452739
10,186
6,451
4,800
6,000
35,595419,903277,662

2
3
6

1
－
1

20,891
6,248
27,140247,569
247,569867
2
869
246,699
69
246,769

21,157
6,149
27,306250,356
250,356878(0)
877
249,47836
249,515

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
3.3. Statements of Unitholders’ Equity
5th Fiscal Period (from May 1, 2016 to October 31, 2016)(Unit: thousand yen)
Unitholders’ equity
Unitholders’ capital

Balanceat beginning ofcurrent period
Changesof items
during period
Distribution
in excess ofearnings

Unitholders’capitalDeduction
fromunitholders’equityUnitholders’capital, net

10,504,334(95,942)

10,408,391(59,705)(59,705)

Surplus
Unappropriatedretained
Total
earnings
surplus(undisposed
loss)
260,908

260,908

Total
unitholders’equityTotal
net assets

10,669,300

10,669,300(59,705)(59,705)

Dividends ofsurplus(260,838)(260,838)(260,838)(260,838)

Net income

246,699

246,699

246,699

246,699

Total changesof items
during period
Balanceat end ofcurrent period－(59,705)(59,705)(14,138)(14,138)(73,844)(73,844)

10,504,334(155,648)

10,348,686

246,769

246,769

10,595,455

10,595,455

6th Fiscal Period (from November 1, 2016 to April 30, 2017)(Unit: thousand yen)
Unitholders’ equity
Unitholders’ capital

Balanceat beginning ofcurrent period
Changesof items
during period
Distribution
in excess ofearnings

Unitholders’capitalDeduction
fromunitholders’equityUnitholders’capital, net

10,504,334(155,648)

10,348,686(59,705)(59,705)

Surplus
Unappropriatedretained
Total
earnings
surplus(undisposed
loss)
246,769

246,769

Total
unitholders’equityTotal
net assets

10,595,455

10,595,455(59,705)(59,705)

Dividends ofsurplus(246,733)(246,733)(246,733)(246,733)

Net income

249,478

249,478

249,478

249,478

Total changesof items
during period
Balanceat end ofcurrent period－(59,705)(59,705)

2,745

2,745

(56,960)(56,960)

10,504,334(215,353)

10,288,980

249,515

249,515

10,538,495

10,538,495- 13 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
3.4. Statements of Cash Distributions
Item

I.

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

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

Amount (yen)Amount (yen)Unappropriated retained earnings

246,769,756

249,515,254

59,705,600

59,705,600

306,438,992

309,200,376[4,106][4,143]

246,733,392

249,494,776

II. Addition of distribution amount in excess of earnings
Deduction from unitholders’ capital
III. Distribution amount[Distribution amount per unit]
Of which,
Distribution amount from earnings[Distribution amount from earnings per unit]
Distribution amount in excess of earnings[Distribution amount in excess of earnings per unit]
IV. Retained earnings carried forward
Method of calculating distribution amount(Note)[3,306][3,343]59,705,600

59,705,600

[800]

[800]

36,364
20,478In accordance with the policy that
In accordance with the policy that
“NHI shall distribute an amount in “NHI shall distribute an amount inexcess of the amount equivalent to excess of the amount equivalent to
90% of its distributable earnings as 90% of its distributable earnings as
defined in Article 67-15 of the Act defined in Article 67-15 of the Act
on Special Measures Concerning on Special Measures Concerning
Taxation” but no more than the Taxation” but no more than theamount of earnings pursuant to the amount of earnings pursuant to the
cash distribution policy set forth in cash distribution policy set forth in
Article 33, Paragraph 1, Item 1 of its Article 33, Paragraph 1, Item 1 of its
articles of incorporation, NHI articles of incorporation, NHI
decided the distributions from decided the distributions from
earnings that it shall pay out shall be earnings that it shall pay out shall be
the maximum value of the integral the maximum value of the integral
multiple of the total number of multiple of the total number ofinvestment
units
issuedand investment
units
issuedandoutstanding (74,632 units) in an outstanding (74,632 units) in an
amount that is not in excess of amount that is not in excess ofunappropriated retained earnings. unappropriated retained earnings.
Accordingly, NHI declared a Accordingly, NHI declared a
distribution amount of 246,733,392 distribution amount of 249,494,776
yen.
yen.
Furthermore,
NHI
shall
Furthermore,
NHI
shall
implement cash distributions in implement cash distributions inexcess of earnings (reimbursement excess of earnings (reimbursementof investments in capital which falls of investments in capital which falls
under the category of distribution under the category of distribution
reducing unitholders’ capital for tax reducing unitholders’ capital for tax
purpose) uninterruptedly every fiscal purpose) uninterruptedly every fiscal
period pursuant to the cash period pursuant to the cash
distribution policy set forth in distribution policy set forth in
Article 33, Paragraph 1, Item 2 of its Article 33, Paragraph 1, Item 2 of its
articles of incorporation.
articles of incorporation.
Based on this policy, NHI decided
Based on this policy, NHI decided
to distribute 59,705,600 yen, which to distribute 59,705,600 yen, whichis the amount roughly equivalent to is the amount roughly equivalent to
32% of the 188,410,440 yen in 31% of the 193,676,662 yen in
depreciation for the 5th Fiscal depreciation for the 6th Fiscal
Period, as cash distributions in Period, as cash distributions inexcess of earnings (reimbursement excess of earnings (reimbursementof investments in capital).
of investments in capital).
NHI adopts a policy of implementing uninterrupted distributions in excess of earnings (reimbursement of investments incapital) in an amount not to exceed 40% of depreciation in every accounting period within the scope that would not haveadverse 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 not to affect long-term repair plans in light of thecapital expenditures for each accounting period assumed based on the long-term repair plans and to meet needs 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.).

- 14 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
3.5. Statements of Cash Flows(Unit: thousand yen)

Cash flows from operating activities
Income before income taxes
Depreciation
Interest income
Interest expenses
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in deposits received
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Proceeds from tenant leasehold and security deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short-term loans payable
Earnings dividends paid
Distribution in excess of earnings paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 15 -

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

6th Fiscal Period(From: Nov. 1, 2016
To: Apr. 30, 2017)247,569
188,788(2)
20,891
2,190(4,948)(8,346)
5,018
337
11,058
6,355
270
(841)
468,3412(21,119)(909)
446,313250,356
194,054(1)
21,157－
5,661
24,079(8,026)
748
54
5,278
(35)
(582)
492,745
1(20,923)(867)
470,955(772,829)
10,332(762,497)(35,708)－(35,708)

500,000(259,732)(59,395)
180,872(135,311)
1,601,495
1,466,183－(246,550)(59,649)(306,200)
129,045
1,466,183
1,595,229*1*1

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
3.6. Notes to the Going Concern
Not applicable.
3.7. Notes to Significant Accounting Policies
1. Depreciation method for(1) Property, plant and equipment (including assets in trust)
non-current assets
The straight-line method is adopted.
The useful life of principal property, plant and equipment is as follows:
Buildings
4~58 years
Structures
10~49 years
Equipment
3~10 years(2) Intangible assets
The straight-line method is adopted.
(3) Long-term prepaid expenses
The straight-line method is adopted.
2. Standards for
Accounting for fixed property tax, etc.
revenue and expense
Concerning fixed property tax, city planning tax, depreciated asset tax,
recognition
etc. on owned real estate or trust beneficiary interests that have real estate
as assets in trust, of the tax amount assessed and determined, the methodof accounting for the amount corresponding to the concerned fiscal period
as expenses related to rent business is adopted.
Concerning the amount equivalent to fixed property tax, etc. in the initialfiscal year that shall be borne by NHI in correlation with acquisitions ofreal estate or trust beneficiary interests that have real estate as assets intrust, the amount is not expensed but is rather included in the cost of
acquisition of the concerned real estate property. The amount equivalent
to fixed property tax, etc. that was included in the cost of acquisition ofreal estate properties in the 5th Fiscal Period is 780 thousand yen and 6th
Fiscal Period is nil.
3. Hedge accounting(1) Hedge accounting approach
Deferral hedge accounting is applied.
However, special accounting is applied to interest rate swaps that meet thecriteria for special accounting.
(2) Hedging instruments and hedged items
Hedging instruments:
Interest rate swap transactions
Hedged items:
Interest on loans(3) Hedging policy
NHI conducts derivative transactions for the purpose of hedging the risks
set forth in its articles of incorporation based on its risk management
policy.
(4) Method for assessing the effectiveness of hedging
The effectiveness of hedging is assessed by comparing the accumulated
cash-flow changes of hedged items with that of hedging instruments andverifying the ratio of both amounts of changes.
However, interest rate swaps that meet the criteria for special accounting
are omitted from assessment of the effectiveness.
4. Scope of funds in the
The funds (cash and cash equivalents) in the statements of cash flows consist
statements of cash flows
of cash on hand and cash in trust; deposits that can be withdrawn at any timeand deposits in trust; and short-term investments with a maturity of 3 months
or less from the date of acquisition, which are readily convertible to cash andbear only an insignificant risk of price fluctuation.

- 16 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5.

Other significant mattersserving as basis for
preparation offinancial statements(1) Accounting method for trust beneficiary interests in real estate properties
Concerning owned trust beneficiary interests that have real estate
properties as assets in trust, all accounts of assets and liabilities within
assets in trust, as well as all accounts of revenue generated and expenses
incurred from assets in trust, are recorded in the relevant account item of
the balance sheets and statements of income.
The following material items of the assets in trust recorded in the relevant
account item are separately listed on the balance sheets.
(i) Cash and deposits in trust(ii) Buildings in trust, structures in trust, equipment in trust andland in trust(iii) Leasehold rights in trust(2) Accounting method for consumption taxes
Consumption tax and local consumption tax are accounted for by
excluding from transaction amounts.
Non-deductible consumption taxes on acquisition of assets are included in
the cost of acquisition of the relevant asset.

3.8. Notes to Financial Statements[Omission of Disclosure]
Concerning notes to lease transactions, securities, retirement benefits, tax-effect accounting and asset retirement
obligations, disclosure is omitted because there is thought to be no substantial need for such disclosure in thefinancial report (kessan tanshin).
[Notes to Balance Sheets]*1. Assets pledged as collateral and secured liabilities
The following are the assets pledged as collateral.

Cash and deposits in trust
Buildings in trust
Structures in trust
Equipment in trust
Land in trust
Leasehold rights in trust
Total

5th Fiscal Period(As of Oct. 31, 2016)
436,571
11,607,133
193,984
7,144
7,949,065
40,886
20,234,785(Unit: thousand yen)
6th Fiscal Period(As of Apr. 30, 2017)
431,232
11,437,459
192,362
14,541
7,949,065
40,886
20,065,549

5th Fiscal Period(As of Oct. 31, 2016)
500,000
1,800,000
7,500,000
9,800,000(Unit: thousand yen)
6th Fiscal Period(As of Apr. 30, 2017)
500,000
1,800,000
7,500,000
9,800,000

The following are the secured liabilities.

Short-term loans payable
Current portion of long-term loans payable
Long-term loans payable
Total*2. Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment
Corporations(Unit: thousand yen)
5th Fiscal Period
6th Fiscal Period(As of Oct. 31, 2016) (As of Apr. 30, 2017)
50,000- 17 -

50,000Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period[Notes to Statements of Income]*1. Breakdown of property-related operating income (loss)(Unit: thousand yen)

A. Property-related operating revenue
Rent revenue – real estate
Total property-related operating revenue
B. Property-related operating expenses
Consignment expenses
Taxes and dues
Non-life insurance expenses
Repair expenses
Depreciation
Leasehold and office rents
Other lease business expenses
Total property-related operating expenses
C. Property-related operating income (loss) [A − B]

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

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

679,472

697,565
679,472

11,55947,1301,505
22,273
188,4101,200
136

697,565
12,31047,9991,519
37,972
193,676
1,200―

272,216
407,256

294,678
402,886

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

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

10,000,000 units
74,632 units

10,000,000 units
74,632 units[Notes to Statements of Unitholders’ Equity]

1. Total number of investment units authorized andtotal number of investment units issued and outstanding
Total number of investment units authorized
Total number of investment units issued and outstanding[Notes to Statements of Cash Flows]*1. Reconciliation of balance sheet items to cash and cash equivalents at end of period in the statements of cash flows(Unit: thousand yen)
5th Fiscal Period
6th Fiscal Period(From: May 1, 2016
(From: Nov. 1, 2016
To: Oct. 31, 2016)
To: Apr. 30, 2017)
1,029,612
436,571
1,466,183

Cash and deposits
Cash and deposits in trust
Cash and cash equivalents- 18 -

1,163,996
431,232
1,595,229

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period[Notes to Financial Instruments](1) Matters concerning status of financial instruments(a) Policy for financial instruments
NHI procures funds through borrowing from financial institutions, issuance of new investment units, etc.
for asset acquisitions, repairs and maintenance, distribution payouts, loan repayments, etc. In debt financing,
NHI takes heed of extending loan periods, converting interest rates to fixed rates, staggering repayment dates,etc. in order to secure financial stability and hedge future interest rate fluctuation risk.
NHI manages surplus funds through deposits, safe and liquid monetary claims and securities, etc. (inprinciple, deposits).
Derivative transactions are limited to those that are for the purpose of hedging the risk of fluctuations ininterest rates on the liabilities of NHI.
(b) Contents and risks of financial instruments and related risk management system
The funds from debt financing are used mainly for acquisition of assets (such as real estate trust beneficiaryinterests). These are exposed to liquidity risk upon repayment, but the risk is managed by maintaining LTV at
low levels, staggering repayment dates, maintaining the ratio of long-term interest-bearing liabilities to totalinterest-bearing liabilities at high levels, and diversifying lenders centering on domestic financial institutions.
Loans with floating interest rates are exposed to the risk of fluctuations in the interest rate payable, butderivative transactions (interest rate swap transactions) are used as a hedging instrument for hedging the riskof fluctuations in the interest rate payable and converting interest expenses to fixed rates for all or some ofthose floating-rate loans of which are long-term loans.
The effectiveness of hedging is assessed by comparing the accumulated cash-flow changes of hedged itemswith that of hedging instruments and verifying the ratio of both amounts of changes. However, interest rate
swaps that meet the criteria for special accounting are omitted from assessment of the effectiveness.
Execution and management of derivative transactions are carried out based on the regulations defining thebasic policy of risk management.
Tenant leasehold and security deposits are deposits received from tenants and are exposed to liquidity risk
at the time that the deposits are to be returned to tenants when they vacate the property, but the risk is limited
by retaining a certain percentage of that amount.
Deposits are used for investing NHI’s surplus funds and are exposed to credit risk, such as bankruptcy ofthe depository financial institutions, but the risk is managed by restricting the tenor of the deposit relatively
short, setting a minimum credit rating requirement for the depository financial institutions (excluding
checkable deposits), etc.
(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, for example, different assumptions are used.
Also, the contract amount, etc. of derivative transactions do not itself represent the market risk involved inthese derivative transactions.
(2) Matters concerning fair value, etc. of financial instruments
The following is the carrying amount, fair value and difference between the two. The financial instruments
for which fair value is extremely difficult to estimate are excluded from the following tables (please refer to(Note 2)).
5th Fiscal Period (as of October 31, 2016)(1) Cash and deposits(2) Cash and deposits in trust
Total assets(3) Short-term loans payable(4) Current portion of long-term loans payable(5) Long-term loans payable
Total liabilities
Derivative transactions

Carrying amount
1,029,612
436,571
1,466,183
500,000
1,800,000
7,500,000
9,800,000–- 19 -

Fair value
1,029,612
436,571
1,466,183
500,000
1,799,476
7,528,468
9,827,944–(Unit: thousand yen)
Difference
–
–
–
–
(523)
28,46827,944–

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
6th Fiscal Period (as of April 30, 2017)(1) Cash and deposits(2) Cash and deposits in trust
Total assets(3) Short-term loans payable(4) Current portion of long-term loans payable(5) Long-term loans payable
Total liabilities
Derivative transactions

Carrying amount
1,163,996
431,232
1,595,229
500,000
1,800,000
7,500,000
9,800,000–

Fair value
1,163,996
431,232
1,595,229
500,000
1,799,589
7,512,724
9,812,314–(Unit: thousand yen)
Difference
―
―
―
―
(410)
12,724
12,314–(Note 1) Methods to estimate fair value of financial instruments and matters concerning derivative transactions
Assets(1) Cash and deposits; (2) Cash and deposits in trust
As these instruments are settled in a short period of time, their fair value and book value are nearly
identical. Therefore, for these items, their book value is assumed as their fair value.
Liabilities(3) Short-term loans payable; (4) Current portion of long-term loans payable; (5) Long-term loans payable
As those with floating interest rates reflect market interest rates in a short period of time and there areno significant changes in NHI’s credit risk after borrowing, their fair value and book value are nearly
identical. Therefore, for these items, their book value is assumed as their fair value. For those with
fixed interest rates, their fair value is based on the sum total amount of principle and interest (*)
discounted at the interest rate reasonably estimated to be applied if similar new borrowing is enteredinto.
(*) For those long-term loans payable qualifying for special accounting of interest rate swaps (pleaserefer to “Derivative transactions” below), the sum total amount of principle and interest by the rateof the interest rate swap
Derivative transactions
Please refer to “Notes to Derivative Transactions” later in this document.
(Note 2) Financial instruments for which fair value is extremely difficult to estimate
5th Fiscal Period(As of Oct. 31, 2016)(Unit: thousand yen)
6th Fiscal Period(As of Apr. 30, 2017)

Tenant leasehold and security deposits
730,216730,216
Total
730,216730,216
Tenant leasehold and security deposits that have been deposited from tenants of rental properties are notsubject to disclosure of market price, because these are not marketable and the actual deposit period fromwhen tenants move in to when tenants move out cannot be reliably determined, thus making it impossible toreasonably estimate their future cash flows, and therefore, it is considered to be extremely difficult to estimate
their fair value.
(Note 3) Redemption schedule for monetary claims due after the settlement of accounts
5th Fiscal Period (as of October 31, 2016)
Due within
1 yearCash and deposits
Cash and deposits in trust
Total

1,029,612
436,571
1,466,183

Due after
1 year,but within
2 years–––- 20 -

Due after
2 years,
but within
3 years–––

Due after
3 years,
but within
4 years–––(Unit: thousand yen)
Due after
4 years,
Due after
but within
5 years
5 years
–
–
–
–
–
–

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
6th Fiscal Period (as of April 30, 2017)
Due within
1 yearCash and deposits
Cash and deposits in trust
Total

1,163,996
431,232
1,595,229

Due after
1 year,but within
2 years―――

Due after
2 years,
but within
3 years―――

Due after
3 years,
but within
4 years―――(Unit: thousand yen)
Due after
4 years,
Due after
but within
5 years
5 years
―
―
―
―
―
―

(Note 4) Repayment schedule for short-term loans payable, current portion of long-term loans payable and longterm loans payable due after the settlement of accounts
5th Fiscal Period (as of October 31, 2016)

500,000

Due after
2 years,
but within
3 years―

Due after
3 years,
but within
4 years―

1,800,000

―

―

―

―

―

―
2,300,000

2,100,000
2,100,000

2,900,000
2,900,000

2,500,000
2,500,000

―
―

―
―

500,000

Due after
1 year,but within
2 years―

Due after
2 years,
but within
3 years―

Due after
3 years,
but within
4 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

―
―

―
―

Due within
1 yearShort-term loans payable
Current portion of
long-term loans payable
Long-term loans payable
Total(Unit: thousand yen)
Due after
4 years,
Due after
but within
5 years
5 years――

Due after
1 year,but within
2 years―

6th Fiscal Period (as of April 30, 2017)
Due within
1 yearShort-term loans payable
Current portion of
long-term loans payable
Long-term loans payable
Total(Unit: thousand yen)
Due after
4 years,
Due after
but within
5 years
5 years――[Notes to Derivative Transactions](1) Derivative transactions to which hedge accounting is not applied
5th Fiscal Period (as of October 31, 2016)
Not applicable.
6th Fiscal Period (as of April 30, 2017)
Not applicable.
(2) Derivative transactions to which hedge accounting is applied
The following is the contract amount, amount equivalent to the principal provided in the contract, etc. as ofthe settlement of accounts for each hedge accounting approach for derivative transactions to which hedge
accounting is applied.

- 21 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5th Fiscal Period (as of October 31, 2016)(Unit: thousand yen)
Hedge accounting
approach

Type, etc. of
derivative transactionMainhedged item

Contract amount, etc.
Of which,due after
1 yearSpecial accounting
for interest rate swaps

Interest rate swap transactions
Receive floating and pay fixedLong-termloans payable

8,300,000

7,000,000

Fair value

Method ofestimation ofthat fair value(*)–

6th Fiscal Period (as of April 30, 2017)(Unit: thousand yen)
Hedge accounting
approach

Type, etc. of
derivative transactionMainhedged item

Contract amount, etc.
Of which,due after
1 yearSpecial accounting
for interest rate swaps

Interest rate swap transactions
Receive floating and pay fixedLong-termloans payable

8,300,000

7,000,000

Fair value

Method ofestimation ofthat fair value(*)–(*) The fair value of derivative transactions qualifying for special accounting of interest rate swaps is included inthat of related long-term loans payable. This is because such interest rate swaps are handled together withhedged long-term loans payable. (Please refer to “Notes to Financial Instruments; (2) Matters concerning fairvalue, etc. of financial instruments (Note 1); Liabilities (4) (5)” earlier in this document.)[Notes to Transactions with Related Parties]
5th Fiscal Period (from May 1, 2016 to October 31, 2016)
Not applicable.
6th Fiscal Period (from November 1, 2016 to April 30, 2017)
Not applicable.
[Notes to Investment and Rental Properties]
NHI owns fee-based homes for the elderly, etc. (including land) in the three major metropolitan areas and corecities. The carrying amount, net change in the carrying amount during period and fair value of the investment andrental properties are as follows:(Unit: thousand yen)
5th Fiscal Period
6th Fiscal Period(From: May 1, 2016
(From: Nov. 1, 2016
To: Oct. 31, 2016)
To: Apr. 30, 2017)
Carrying amount
Balance at beginning of period
19,192,122
19,798,214
Net change during period
606,091(163,897)
Balance at end of period
19,798,214
19,634,316
Fair value at end of period
24,251,000
24,265,000(Note 1) The carrying amount is the amount after accumulated depreciation is deducted from the cost of
acquisition.
(Note 2) Significant changes during period
For the 5th Fiscal Period, the major reason of increase is acquisition of one property (710,000 thousandyen). The major reason of decrease is depreciation (188,410 thousand yen).
For the 6th Fiscal Period, the major reason of decrease is depreciation (193,676 thousand yen).
(Note 3) The fair value at end of period represents the sum of appraisal values estimated by external real estateappraisers.
Income and loss from investment and rental properties are disclosed in “Notes to Statements of Income.”- 22 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period[Segment Information, etc.](1) Segment information
Segment information is omitted because NHI has no segment except the property leasing business.
(2) Related information
5th Fiscal Period (from May 1, 2016 to October 31, 2016)① Information about products and services
Information about products and services is omitted because net sales to external customers for a single
product and service category are in excess of 90% of the operating revenue on the statements of income.
② Information about geographic areas
A. Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excessof 90% of the operating revenue on statements of income.
B. Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plantand equipment located in Japan is in excess of 90% of the amount of property, plant and equipment on
the balance sheets.
③ Information about major customers
Information about major customers is omitted because consent for disclosure on net sales to a single
external customer has not been obtained from tenants.
6th Fiscal Period (from November 1, 2016 to April 30, 2017)① Information about products and services
Information about products and services is omitted because net sales to external customers for a single
product and service category are in excess of 90% of the operating revenue on the statements of income.
② Information about geographic areas
A. Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excessof 90% of the operating revenue on statements of income.
B. Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plantand equipment located in Japan is in excess of 90% of the amount of property, plant and equipment on
the balance sheets.
③ Information about major customers
Information about major customers is omitted because consent for disclosure on net sales to a single
external customer has not been obtained from tenants.
[Notes to Per Unit Information]
5th Fiscal Period(From: May 1, 2016
To: Oct. 31, 2016)

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

Net assets per unit
141,969 yen
141,206 yen
Net income per unit
3,305 yen
3,342 yen
(Note 1) Net income per unit is calculated by dividing the net income by the daily weighted average number ofinvestment units.
The diluted net income per unit is not stated as there are no diluted investment units.
(Note 2) The basis for calculating the net income per unit is as follows:
5th Fiscal Period(From: May 1, 2016
To: Oct. 31, 2016)
Net income (thousand yen)Amount not attributable to common unitholders (thousand yen)
Net income attributable to common investment units (thousand yen)
Average number of investment units during period[Notes to Significant Subsequent Events]
Not applicable.

- 23 -

246,699－
246,699
74,632

6th Fiscal Period(From: Nov. 1, 2016
To: Apr. 30, 2017)249,478―
249,478
74,632

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
3.9. Increase (Decrease) in Total Number of Investment Units Issued and Outstanding
The following is the increase (decrease) in the total number of investment units issued and outstanding andunitholders’ capital since the establishment of NHI through to the end of the 6th Fiscal Period.
Total number ofinvestment units
Unitholders’ capitalissued and outstanding(million yen) (Note 1)
Payment date
Description
Remarks(units)Increase
Increase
Balance
Balance(Decrease)(Decrease)
Establishment throughJan. 7, 2014
1,000
1,000
100
100
(Note 2)
private placement
Capital increase throughApr. 3, 2014
18,80019,8001,880
1,980(Note 3)
private placement
Capital increase throughNov. 4, 2014
39,00058,8005,616
7,596(Note 4)
public offering
Capital increase by way ofDec. 3, 2014
2,000
60,800288
7,884(Note 5)third-party allotment
July 17, 2015

Cash distributions in excess ofearnings (reimbursement ofinvestments in capital which falls
under the category of distribution
reducing unitholders’ capital fortax purpose)

Capital increase throughpublic offering
Capital increase by way ofDec. 16, 2015
third-party allotment

Nov. 17, 2015

Cash distributions in excess ofearnings (reimbursement ofinvestments in capital which falls
Jan. 21, 2016 under the category of distribution
reducing unitholders’ capital fortax purpose)
Cash distributions in excess ofearnings (reimbursement ofinvestments in capital which falls
Jul. 15, 2016 under the category of distribution
reducing unitholders’ capital fortax purpose)
Cash distributions in excess ofearnings (reimbursement ofinvestments in capital which falls
Jan. 24, 2017 under the category of distribution
reducing unitholders’ capital fortax purpose)–

60,800

(49)

7,834

(Note 6)

12,13072,9302,297

10,132(Note 7)

1,702

74,632322

10,455(Note 8)–74,632(46)

10,408(Note 9)–74,632(59)

10,348(Note 10)–74,632(59)

10,288(Note 11)

(Note 1) Figures indicate amounts obtained by subtracting deduction from unitholders’ equity from unitholders’capital.
(Note 2) NHI was established at an issue price of 100,000 yen per unit. The subscriber for underwriting of investment
units at establishment was Daiwa Real Estate Asset Management Co. Ltd.
(Note 3) Investment units were additionally issued to JHC-LPS and ASIA CUATRO-LPS at an issue price of 100,000
yen per unit for the purpose of procuring funds for acquisition of acquisition properties and other funds.
(Note 4) New investment units were issued through public offering at an issue price of 150,000 yen (issue amount of
144,000 yen) per unit for the purpose of procuring funds for acquisition of acquisition properties and otherfunds.
(Note 5) New investment units were issued by way of third-party allotment at an issue amount of 144,000 yen per unit
for the purpose of procuring funds for acquisition of acquisition properties and other funds.
(Note 6) NHI resolved cash distributions in excess of earnings (reimbursement of investments in capital which falls
under the category of distribution reducing unitholders’ capital for tax purpose) in amount of 810 yen per unit
at its Board of Directors Meeting held on June 19, 2015 as cash distribution for the 2nd fiscal period (fiscal
period ended April 2015), and started the payout from July 17, 2015.
(Note 7) New investment units were issued through public offering at an issue price of 196,570 yen (issue amount of
189,440 yen) per unit for the purpose of procuring funds for acquisition of acquisition properties and otherfunds.
(Note 8) New investment units were issued by way of third-party allotment at an issue amount of 189,440 yen per unit
for the purpose of procuring funds for acquisition of acquisition properties and other funds.
(Note 9) NHI resolved cash distributions in excess of earnings (reimbursement of investments in capital which falls
under the category of distribution reducing unitholders’ capital for tax purpose) in amount of 768 yen per unit

- 24 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
at its Board of Directors Meeting held on December 18, 2015 as cash distribution for the 3rd fiscal period(fiscal period ended October 2015), and started the payout from January 21, 2016.
(Note 10) NHI resolved cash distributions in excess of earnings (reimbursement of investments in capital which falls
under the category of distribution reducing unitholders’ capital for tax purpose) in amount of 800 yen per unit
at its Board of Directors Meeting held on June 21, 2016 as cash distribution for the 4th fiscal period (fiscal
period ended April 2016), and started the payout from July 15, 2016.
(Note 11) NHI resolved cash distributions in excess of earnings (reimbursement of investments in capital which falls
under the category of distribution reducing unitholders’ capital for tax purpose) in amount of 800 yen per unit
at its Board of Directors Meeting held on December 21, 2016 as cash distribution for the 5th fiscal period(fiscal period ended October 2016), and started the payout from January 24, 2017.

4. Changes in Directors
4.1. Changes in Directors at the Investment Corporation
Not applicable.
4.2. Changes in Directors at the Asset Management Company
The directors of the Asset Management Company changed, effective March 31, 2017 and April 1, 2017.
The directors of the Asset Management Company as of the date of this document are as follows:
Title

Name

President andRepresentative
Director

Akira
Yamanouchi

Brief profile
April 1986
April 2002
May 2002
March 2003
August 2004
February 2008
February 2009
July 2009
April 2010
May 2010

Vice President
andRepresentative
Director
Head ofCorporate
Division
Head ofCorporate
Planning
Department

Yuji
Shinotsuka

April 1989
June 2009
July 2009

November 2009
April 2011
October 2012
December 2012
January 2014
August 2014
April 2016

April 2017

Number ofshares owned(shares)

Joined Marubeni Corporation
Joined Pacific Management Corporation
Temporarily transferred to Pacific Investment Advisors Corporation(currently, AD Investment Management Co., Ltd.)
President and Representative Director of Pacific Investment
Advisors Corporation (with employment transfer)
Executive Director of Nippon Residential Investment Corporation(currently, Advance Residence Investment Corporation)
President and Representative Director of Pacific Investment Partners
Inc. (currently, Cushman & Wakefield Asset Management K.K.)
Representative Director (part-time basis) of Pacific Holdings, Inc.
Executive Managing Director of Cushman & Wakefield AssetManagement K.K.
Advisor of Daiwa Real Estate Asset Management Co., Ltd.
President and Representative Director (current position)―

Joined Daiwa Securities Co., Ltd. (currently, Daiwa Securities
Group Inc.)
Head of Corporate Planning Department
Temporarily transferred to Daiwa Real Estate Asset Management
Co. Ltd. Vice President and Representative Director (Head of IR &Planning Department)
Vice-President and Representative Director (Head of Corporate
Planning Department)
Vice-President and Representative Director (Head of Corporate
Planning Department and Finance Department)
Vice-President and Representative Director (Head of Corporate
Planning Department)
Executive Director of Daiwa Residential Private Investment
Corporation (current position)
Executive Director of Japan Health Care Investment Corporation
Resigned from Executive Director of Japan Health Care Investment
Corporation
Vice President and Representative Director and Head of Corporate
Planning Department of Daiwa Real Estate Asset Management Co.,
Ltd. (with employment transfer)Vice President and Representative Director, Head of Corporate―- 25 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
Division and Head of Corporate Planning Department of Daiwa Real
Estate Asset Management Co., Ltd. (current position)

Title
Vice President
andRepresentative
Director

Name
YoshikiNishigaki

Brief profile
April 1992
May 2004
February 2006
March 2007
March 2008
November 2008
May 2010

Head of Private
Fund Division
Head of Private
FundManagement
Department

August 2010
February 2011
April 2012
October 2013
April 2014
April 2017

Director

ToshioFukushima

Head of
Acquisition and
AssetManagement
Division

April, 1992
July, 2004
August, 2009
March, 2011
June, 2013
November, 2015
April, 2016

Head of
Asset
Management
Department

April, 2017

Joined Cititrust & Banking Corporation
Joined K.K. daVinci Advisors
Transferred to K.K. daVinci Select (currently, Daiwa Real Estate
Asset Management Co. Ltd.)
Head of IR & Business Planning Department
President and Representative Director
Executive Director, DA Office Investment Corporation
Vice President and Representative Director, Daiwa Real Estate
Asset Management Co. Ltd
Resigned from Executive Director, Daiwa Office Investment
CorporationVice-President and Representative Director (Head of Advisory
Department)
Vice-President and Representative Director (Head of FundManagement Department)
Vice-President and Representative Director (Head of Sales
Implement and Fund Management Department)
Vice-President and Representative Director (Head of FundManagement Department)
Vice President and Representative Director
Head of Private Fund Division and Head of Private FundManagement Department (current position)
Joined Tokyu Land Corporation
Joined Pacific Management Corporation
Joined Mitsubishi Estate Co., Ltd.
Joined Daiwa Real Estate Asset Management Co., Ltd.
General Manager of Acquisition Department
General Manager of Acquisition Department and Origination
Department
General Manager of Asset Management Department andOrigination Department
Director (current position)

Number ofshares owned(shares)――Head ofOrigination
Department
Director
Head of
Administration
Department

Hajime Imbe

April 1988
June 2006
April 2009

January 2010
October 2010

Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities
Group Inc.)
Managing Director of Human Resources Department
Managing Director of Investment Banking Strategic Planning
Department of Daiwa Securities SMBC Co. Ltd. (currently,
Daiwa Securities Co. Ltd.)Managing Director of Global Investment Banking Planning
Department of Daiwa Securities Capital Markets Co. Ltd.
Managing Director of Corporate Division Planning Department- 26 -―

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
April 2012
April 2013
April 2017

Title

Name

Director(non-executive)

Mikita Komatsu

Brief profile
April 1985
October 2005
October 2008
April 2010
April 2011
April 2012
April 2013
April 2016
June 2016

Director(non-executive)

Naoya Otani

April 1988
June 2006
April 2009
July 2011

June 2012
April 2017
AuditorTamaki
Shibayama

April 1982
September 1986
April 2002
October 2010
April 2012
April 2015

Auditor(non-executive)

Morimasa
MatsudaManaging Director of Corporate Division Planning Departmentof Daiwa Securities Co. Ltd.
Managing Director of Corporate Business Planning Department
Director of Daiwa Real Estate Asset Management Co. Ltd.
(current position)

April 1989
June 2007
December 2009

Number ofshares owned(shares)

Joined Daiwa Securities Co., Ltd. (currently Daiwa Securities
Group Inc.)
Head of Finance Department, Daiwa Securities Group Inc.
President of Daiwa Securities SMBC Europe Limited (currently
Daiwa Capital Markets Europe Limited)
Senior Managing Director, Daiwa Securities Capital Markets Co.,Ltd.
Senior Managing Director, Daiwa Securities Group Inc.
Director (non-executive) of Daiwa Real Estate AssetManagement Co. Ltd. (current position)
Executive Managing Director of Daiwa Securities Group Inc.
Senior Executive Managing Director of Daiwa Securities Group
Inc.
Member of the Board and Senior Executive Managing Director of
Daiwa Securities Group Inc. (current position)―

Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities
Group Inc.)
Managing Director of Legal Department and Corporate Planning
Department of Daiwa Securities Group Inc.
Managing Director of Corporate Planning Department of Daiwa
Securities SMBC Co. Ltd. (currently, Daiwa Securities Co. Ltd.)Managing Director of Corporate Planning Department of Daiwa
Securities Group Inc. Managing Director of Corporate Planning
Department of Daiwa Securities Co. Ltd. (current position)
Director of Nippon Record Keeping Network Co., Ltd. (nonexecutive) (current position)
Director of Daiwa Real Estate Asset Management Co. Ltd.(nonexecutive) (current position)―

Joined the Japan Chamber of Commerce and Industry
Joined Daiwa Securities Co., Ltd. (currently Daiwa Securities
Group Inc.)
General Manager of Initial Public Department of Daiwa
Securities SMBC Co., Ltd. (currently Daiwa Securities Co., Ltd.)
Head of Corporate Auditor’s Office of Daiwa Securities CapitalMarkets Co., Ltd.
Managing Director of Corporate Clients Banking Department(VII) of Daiwa Securities Co., Ltd.
Auditor of Daiwa Real Estate Asset Management Co. Ltd.
(current position)―

Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities
Group Inc.)
Managing Director of Corporate Planning Department of Daiwa
Securities SMBC Co. Ltd. (currently, Daiwa Securities Co. Ltd.)Managing Director of Asia Strategic Planning Department of―- 27 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period

April 2011
April 2013
April 2016
June 2016

Title

Name

Auditor(non-executive)

Shinji Kiso

Daiwa Securities SMBC Co. Ltd. (currently, Daiwa Securities
Co. Ltd.)
Managing Director of Investor Relations Office of Daiwa
Securities Group Inc.
Managing Director of Internal Audit Department of Daiwa
Securities Co. Ltd.
Auditor of Daiwa Real Estate Asset Management Co. Ltd. (nonexecutive) (current position)
Auditor (non-executive) of Daiwa Securities Group Inc. (current
position)

Brief profile
April 2001
December 2009
July 2011
June 2013
May 2014
June 2015
January 2017

Number ofshares owned(shares)

Joined Daiwa Securities SMBC Co., Ltd. (currently, Daiwa
Securities Co., Ltd.)
Corporate Planning Department of Daiwa Securities Group Inc.
(current position)
Corporate Planning Department of Daiwa Securities Co., Ltd.
(current position)
Director (non-executive) of ASTMAX Co., Ltd. (current
position)
Auditor (non-executive) of Daiwa Real Estate Asset Management
Co. Ltd. (current position)
Director (non-executive) of Money Partners Group Co., Ltd.
(current position)
Auditor (non-executive) of IDI Infrastructures, Inc. (current
position)(Note 1) Naoyuki Owa stepped down from the office of director, effective March 31, 2017.
(Note 2) Akihiko Ogino stepped down from the office of director (non-executive), effective March 31, 2017.
(Note 3) Toshio Fukushima assumed the office of director, effective April 1, 2017.
(Note 4) Hajime Imbe assumed the office of director, effective April 1, 2017.
(Note 5) Naoya Otani assumed the office of director (non-executive), effective April 1, 2017.

- 28 -―

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5. Reference Information
5.1. Investment Status
6th Fiscal Period(as of April 30, 2017)

Type ofasset
Real estate
trust
beneficiaryinterests

Use

RegionTotal amount owned(million yen)
(Note 1)

As a percentage of
total assets(%) (Note 2)

11,928

56.1

7,073

33.3

―

―

―

―

632

3.0

Other
(Note 5)――

Other private nursing homes andother facilities for the elderly――

19,634

92.3

Medical facilities

―

―

Other

―

―

19,634

92.3

1,635

7.7

21,269100.0[19,634][92.3]

Privatenursing homes
and other
facilities forthe elderly

Fee-based
homes forthe elderly

Elderly
housingwithsupportive
services

Three major
metropolitan areas(Note 3)
Core city areas(Note 4)
Other
(Note 5)Three major
metropolitan areas(Note 3)
Core city areas(Note 4)

Subtotal

Total
Deposits and other assets

Total assets (Note 6)(Note 1) “Total amount owned” is the carrying amount (book value after deducting depreciation in the case ofreal estate trust beneficiary interests).
(Note 2) “As a percentage of total assets” is rounded to one decimal place.
(Note 3) “Three major metropolitan areas” refers to the greater Tokyo area (Tokyo, Kanagawa, Chiba andSaitama prefectures), the Chukyo area (Aichi, Mie and Gifu prefectures) and the Kinki area (Osaka,
Kyoto, Hyogo, Nara and Shiga prefectures). The same shall apply hereinafter.
(Note 4) “Core city areas” refers to cities (outside the three major metropolitan areas) with populations of
200,000 or more. The same shall apply hereinafter.
(Note 5) “Other” refers to cities (outside the three major metropolitan areas and the core city areas) withpopulations fewer than 200,000. The same shall apply hereinafter.
(Note 6) The figure in brackets [ ] under “Total assets” is the portion of the applicable assets that, in effect,
corresponds to the holding of real estate properties. The amount of construction in progress (including
construction in progress in trust) is not included in the amount of real estate trust beneficiary interests.

- 29 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5.2. Investment Real Estate Properties
5.2.1. Price and Investment Ratio of Investment Real Estate Properties
The following is an overview of the real estate in trust of trust beneficiary interests owned as of April 30,
2017 by NHI.
Type ofspecified
asset

Real estate
trust
beneficiaryinterests

RegionProperty nameAcquisition price Carrying amount(million yen)(million yen)
(Note 1)
(Note 2)

Sompo Care LAVIER
Sagamihara Chuo
Charm Suite
Ryokuchi Koen
Sawayaka
Heart Life Nishikyogoku
Verger Hirakata
Sompo Care LAVIER
Three major Kinugasayama Koen
metropolitan La’nassica Arakogawa
areasSuper Court
JR Nara-Ekimae
Mina-no-ie Omiya
Yoshinocho
Mina-no-ie Chuo-ku
En’namiSompo no ie
Nishitanabeekimae
Subtotal
Nichii Care Center
Fukushima Omori
Sompo Care LAVIER
Hiroshima Hikarigaoka
Sawayaka
Kaikyokan
Sawayaka
Meisuikan
Sawayaka
Hinodekan
Sawayaka
Riverside Kurinoki
Core city
Sawayaka
areas
Obatake Sanbankan
Silver Heights Hitsujigaoka
No. 3
Alpha Living Okayama
Nishigawa Ryokudokoen
Alpha Living Okayama
Korakuen
Alpha Living Takamatsu
EkimaeAlpha Living Takamatsu
Hyakkenmachi
Subtotal
Total (22 properties)

Estimated Price at
end of period(million yen)
(Note 3)

Investment
ratio
(%)
(Note 4)

1,170

1,160

1,750

6.1

1,950

1,937

3,060

10.1

750

746

1,210

3.9

950

939

1,590

4.9

1,839

1,864

2,060

9.5

1,279

1,270

1,430

6.6

1,569

1,585

1,750

8.1

740

775

799

3.8

838

877

903

4.3

710

769

741

3.7

11,795

11,92815,293

61.1

265

258

353

1.4

960

960

1,230

5.0

630

624

899

3.3

590

578

813

3.1

773

774

939

4.0

266

268

324

1.4

289

291

355

1.5

1,200

1,292

1,330

6.2

730

762

789

3.8

610

627

672

3.2

605

633

641

3.1

605

632

627

3.1

7,523
19,318

7,705
19,634

8,972
24,26538.9
100.0(Note 1) “Acquisition price” is excluding acquisition costs, fixed property tax, city planning tax, consumption tax
and local consumption tax.
(Note 2) “Carrying amount” is the book value after deducting depreciation as of April 30, 2017.
(Note 3) “Estimated Price at end of period” is the price with April 30, 2017 stated in the appraisal reports
prepared by Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd. or The Tanizawa Sōgō
Appraisal Co., Ltd. in accordance with the articles of incorporation of NHI and the rules of The
Investment Trusts Association, Japan.
(Note 4) “Investment ratio” is the respective property acquisition price expressed as a percentage of the total
amount of the acquisition prices, rounded to one decimal place.

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Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5.2.2. Summary of Building and Leasing of Investment Real Estate
The respective property annual rent is not disclosed because consent for disclosure has not been obtained
from tenants. Annual rent of real estate in trust owned as of April 30, 2017 by NHI totaled 1,393 million yen(Note).
(Note) The amount obtained by adding up the monthly rent in the respective lease agreement valid as of April
30, 2017 in the annualized amount calculated by multiplying by 12, rounded down to the nearest
million yen.
RegionThree major
metropolitan
areasCore city
areas

Property name

Structure / Construction
Floorscompletion(Note 1)
(Note 2)

Total leasable
Total
area
leased area
(m2)
(m2)
(Note 3)(Note 4)

Total
number oftenants(Note 5)

Occupancy
Appraisal NOI
rate(million yen)(%)
(Note 7)(Note 6)

Sompo CareLAVIER
Sagamihara Chuo
Charm Suite
Ryokuchi Koen
Sawayaka
Heart Life
Nishikyogoku

RC /
5F

Mar. 31,2008

3,732.95

3,732.95

1

100.0

88

RC /
B1/5F

Sept. 20,
2006

5,329.73

5,329.73

1

100.0

144

RC /
6F

Aug. 6,2007

2,459.19

2,459.19

1

100.0

60

Verger Hirakata

RC /
5F

Feb. 26,2007

2,925.25

2,925.25

1

100.0

85

Mar. 3,2011

4,265.88

4,265.88

1

100.0

100

3,590.40

3,590.40

1

100.0

74

5,057.07

5,057.07

1

100.0

91

1,800.03

1,800.03

1

100.0

40

1,963.03

1,963.03

1

100.0

45

2,095.79

2,095.79

1

100.0

36

Sompo CareRC /LAVIER
B1/5F
Kinugasayama Koen
La’nassica
S/
Arakogawa
4F
Super Court
RC /JR Nara-Ekimae
7F
Mina-no-ie Omiya
RC /Yoshinocho
4F
Mina-no-ie Chuo-ku
RC /En’nami3F
Sompo no ie
RC /Nishitanabeekimae
9F
Subtotal
Nichii Care Center
S/
Fukushima Omori
3F
Sompo CareRC /LAVIER Hiroshima
7F
Hikarigaoka
Sawayaka
RC /Kaikyokan
6F
Sawayaka
RC /Meisuikan
B1/6F
SawayakaS/
Hinodekan
3F
Sawayaka
S/
Riverside Kurinoki
4F
Sawayaka
S/
Obatake Sanbankan
3F
Silver Heights
RC/
Hitsujigaoka No. 3
3F
Alpha Living
Okayama Nishigawa
RC/7F
Ryokudokoen
Alpha Living
RC/4F
Okayama Korakuen
Alpha Living
RC/6F
Takamatsu Ekimae
Alpha Living
Takamatsu
RC/10F
Hyakkenmachi
Subtotal
Total (22 properties)

Apr. 17,2008
June 17,2009
April 3,2012
Feb. 27,2014
Feb. 11,
2007

33,219.32

33,219.32

10

100.0

767

Mar. 30,
2007

1,964.68

1,964.68

1

100.0

22

Dec. 15,
2005

4,133.82

4,133.82

1

100.0

69

2,694.42

2,694.42

1

100.0

50

4,553.67

4,553.67

1

100.0

47

2,674.37

2,674.37

1

100.0

47

1,349.39

1,349.39

1

100.0

17

1,411.78

1,411.78

1

100.0

18

7,267.56

7,267.56

1

100.0

70

2,124.16

2,124.16

1

100.0

37

2,128.44

2,128.44

1

100.0

32

1,848.06

1,848.06

1

100.0

30

1,929.16

1,929.16

1

100.0

31

34,079.51
67,298.83

34,079.51
67,298.83

12
22

100.0
100.0

476
1,244

Oct. 23,
2003
Mar. 25,
2005
July 11,2007
Oct. 20,2009
Sept. 13,2011
April 18,
2003
August 18,
2014
May 25,1988
June 9,2014
June 28,2010(Note 1) “Structure / Floors” is the entry in the real estate registry of the building of the respective property. “S”
refers to steel-framed structure, “RC” refers to reinforced concrete structure, “B” refers to floors below
ground and “F” refers to floors above ground.
- 31 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period(Note 2) “Construction completion” is the entry in the real estate registry of the building of the respective
property.
(Note 3) “Total leasable area,” which is the floor area available for leasing of the building of the respective
property, is the area indicated in the lease contract, etc. (including store compartments and officecompartments), excluding the total leasable area of land (including level parking space).
(Note 4) “Total leased area” is the sum total of the area that is actually leased based on a lease agreement
concluded with end-tenants as of April 30, 2017.
(Note 5) “Total number of tenants” is the number of end-tenants. When there is a tenant occupying multiple
buildings, the concerned tenant is counted and stated for each individual building.
(Note 6) “Occupancy rate” is the figure obtained by dividing total leased area by leasable area, rounded down to
one decimal place.
(Note 7) “Appraisal NOI” is the net operating income obtained by subtracting operating expenses from operating
revenue appraised by real estate appraisers as stated in the appraisal report as of April 30, 2017. The
appraisal NOI above is the NOI derived by the direct capitalization method. “Appraisal NOI” is rounded
down to the nearest million yen.

- 32 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5.2.3. Summary of Appraisal Report

Property name

Nichii Care Center
Fukushima Omori
Sompo CareLAVIER Hiroshima
Hikarigaoka
Sompo CareLAVIER
Sagamihara Chuo
Charm Suite
Ryokuchi Koen
Sawayaka
Kaikyokan

Direct capitalization
methodIndicatedvalue
Cap rate(million(%)yen)

Summary of appraisal report
DCF
methodIndicated
Discount Terminal
value
rate
cap rate(million
(%)
(%)
yen)

Appraisal firm

Appraisalvalue(millionyen)

Japan Real Estate
Institute

353

356

5.7

349

5.5

5.9

22

Japan Real Estate
Institute

1,230

1,240

5.2

1,210

5.0

5.4

69

Daiwa Real EstateAppraisal Co., Ltd.

1,750

1,770

4.9

1,740

4.7

5.1

88

3,060

3,100

4.6

3,040

4.4

4.8

144

899

907

5.3

890

5.1

5.5

50

813

819

5.3

807

5.1

5.5

47

1,210

1,220

4.9

1,200

4.7

5.1

60

1,590

1,610

5.2

1,580

5.0

5.4

85

2,060

2,080

4.8

2,050

4.9

5.0

100

1,430

1,440

5.1

1,430

5.2

5.3

74

939

950

4.9

934

4.7

5.1

47

324

330

5.0

322

4.8

5.2

17

355

360

5.1

353

4.9

5.3

18

1,750

1,770

5.0

1,740

5.1

5.2

91

799

807

4.9

796

5.0

5.1

40

903

912

4.9

894

4.7

5.1

45

1,330

1,340

4.9

1,330

4.7

5.1

70

789

803

4.5

783

4.3

4.7

37

672

682

4.6

667

4.4

4.8

32

641

653

4.6

636

4.4

4.8

30

627

635

4.7

624

4.5

4.9

31

741

749

4.7

738

4.8

4.9

36

24,26524,533―24,113

―

―

1,244

Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
Sawayaka Meisuikan
Institute
Sawayaka
Daiwa Real EstateHeart Life
Appraisal Co., Ltd.
Nishikyogoku
Daiwa Real Estate
Verger Hirakata
Appraisal Co., Ltd.
Sompo Care LAVIERThe Tanizawa Sōgō
Kinugasayama Koen
Appraisal Co., Ltd.
(Note 2)
La’nassica
The Tanizawa Sōgō
ArakogawaAppraisal Co., Ltd.
(Note 3)
Sawayaka
Daiwa Real Estate
HinodekanAppraisal Co., Ltd.
Sawayaka Riverside Daiwa Real Estate
KurinokiAppraisal Co., Ltd.
Sawayaka
Daiwa Real Estate
Obatake Sanbankan Appraisal Co., Ltd.
Super Court
The Tanizawa Sōgō
JR Nara-Ekimae
Appraisal Co., Ltd.
(Note 4)Mina-no-ie Omiya
The Tanizawa Sōgō
Yoshinocho
Appraisal Co., Ltd.
Mina-no-ie Chuo-ku Japan Real Estate
En’namiInstitute
Silver Heights
Daiwa Real Estate
Hitsujigaoka No. 3
Appraisal Co., Ltd.
Alpha Living
Daiwa Real Estate
Okayama Nishigawa
Appraisal Co., Ltd.
Ryokudokoen
Alpha Living
Daiwa Real Estate
Okayama Korakuen Appraisal Co., Ltd.
Alpha Living
Daiwa Real Estate
Takamatsu Ekimae
Appraisal Co., Ltd.
Alpha Living
Daiwa Real Estate
Takamatsu
Appraisal Co., Ltd.
Hyakkenmachi
Sompo no ie
The Tanizawa Sōgō
Nishitanabeekimae
Appraisal Co., Ltd.
(Note 5)
Total

Appraisal
NOI(millionyen)(Note 1) The summary is based on the appraisal report with April 30, 2017 as the date of value.
(Note 2) The discount rate for Sompo Care LAVIER Kinugasayama Koen is the discount rate for the 11th andsubsequent fiscal years (discount rate up to the 10th fiscal year: 4.8%).
(Note 3) The discount rate for La’nassica Arakogawa is the discount rate for the 11th and subsequent fiscal years(discount rate up to the 10th fiscal year: 5.1%).

- 33 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period(Note 4) The discount rate for Super Court JR Nara-Ekimae is the discount rate for the 9th and subsequent fiscal
years (discount rate up to the 8th fiscal year: 5.0%).
(Note 5) The discount rate for Sompo no ie Nishitanabeekimae is the discount rate for the 11th and subsequentfiscal years (discount rate up to the 10th fiscal year: 4.7%).
5.2.4. Capital Expenditures for Assets under Management
A. Schedule of Capital Expenditures
Major capital expenditures in line with repair work, etc. currently planned for existing owned properties are as
follows. Planned construction amount includes portion that is categorized as expense in accounting.
Name ofreal estate property(Location)
Sompo Care LAVIER
Hiroshima Hikarigaoka(Hiroshima-shi,
Hiroshima)
Verger Hirakata(Hirakata-shi, Osaka)PurposePlanned period

Planned construction amount(million yen)Amount paid in Total amount
Total amount6th FP
paid

Upgrading of
air-conditioning incommon areas

From: October 2017
To: October 2017

16

－

－

Renovation ofcommon areas

From: October 2017
To: October 2017

8

－

－

B. Capital Expenditures during the 6th Fiscal Period
The following summarizes the main construction work that constitutes capital expenditures conductedduring the 6th Fiscal Period. Capital expenditures in the 6th Fiscal Period was 29 million yen. Combinedwith 37 million yen of repair expenses categorized as expense for the 6th Fiscal Period, 67 million yen ofwork has been implemented.
Name ofreal estate property
Purpose(Location)
Verger Hirakata
Upgrading of lighting in common areas(Hirakata-shi, Osaka)
Sompo Care LAVIER
Hiroshima Hikarigaoka
Upgrading of water heater(Hiroshima-shi,
Hiroshima)
Silver Heights
Hitsujigaoka No. 3
Repair of elevators(Sapporo-shi, Hokkaido)
Other

－

PeriodConstruction amount(million yen)

From: March 2017
To: March 20173

From: April 2017
To: April 20172

From: April 2017
To: April 20172

From: November 2016
To: April 2017

20

Total

29

C. Reserve Amount for Long-Term Repair Plans (Reserve for Repairs)
NHI sets aside the following reserve for repairs from cash flows during the fiscal period for future
payment of large-scale repairs and other funds.
(Unit: million yen)
Fiscal period
Balance of reserveat beginning of
periodProvision of reserve
during period
Reversal of reserve
during period
Reserve carriedforward

2nd Fiscal Period(From: Nov. 1, 2014
To: Apr. 30, 2015)

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

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

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

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

19

47

63

33

32

28

15

28

–

32

–

–

58

–

–

47

63

33

33

65

(Note) In principle, NHI adopts a policy of implementing cash distributions in excess of earnings(reimbursement of investments in capital which falls under the category of distribution reducing
unitholders’ capital for tax purpose) uninterruptedly every fiscal period. Upon deciding on theimplementation and amount of such, NHI shall give due consideration to the amount of capital
expenditures required to maintain and enhance the competitiveness of portfolio assets.
- 34 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5.2.5. Status of Pledged Collateral
The following outlines the collateral on acquired assets as of April 30, 2017.
Property name
Nichii Care Center Fukushima Omori
Sompo Care LAVIER Hiroshima
Hikarigaoka
Sompo Care LAVIER Sagamihara
Chuo
Charm Suite Ryokuchi Koen
Sawayaka Kaikyokan
Sawayaka Meisuikan
Sawayaka Heart Life Nishikyogoku
Verger Hirakata
Sompo Care LAVIER Kinugasayama
Koen
La’nassica Arakogawa
Sawayaka Hinodekan
Sawayaka Riverside Kurinoki
Sawayaka Obatake Sanbankan
Super Court JR Nara-Ekimae
Mina-no-ie Omiya Yoshinocho
Mina-no-ie Chuo-ku En’nami
Silver Heights Hitsujigaoka No. 3
Alpha Living Okayama Nishigawa
Ryokudokoen
Alpha Living Okayama Korakuen
Alpha Living Takamatsu Ekimae
Alpha Living Takamatsu
Hyakkenmachi
Sompo no ie Nishitanabeekimae

Status ofcollateral

Pledged ascollateral(jointcollateral)

Type ofcollateralAppraisal value(million yen)

Security interests holder

24,265

Mizuho Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust Bank, Limited
Mizuho Trust & Banking Co., Ltd.
The Musashino Bank, Ltd.
Shinkin Central BankThe Dai-ichi Life Insurance Company, Limited

Revolvingpledge5.2.6. Matters Concerning Entire Portfolio (Status of Leasing)
A. Diversification by Rent-Paying Capacity
Rent-paying capacity
Annual rent
Share
(Note 1)(million yen) (Note 2)(%) (Note 3)398
28.7
More than 2.0x303
21.9
More than 1.5x, but 2.0x or less277
20.0
More than 1.2x, but 1.5x or less1.2x or less
407
29.4
1,387
100.0
Total
(Note 1) “Rent-paying capacity” refers to the multiple obtained by dividing the respective real estate in trust’s
most recent EBITDAR by rent (monthly rent in the respective lease agreement with operators in theannualized amount calculated by multiplying by 12; the same shall apply hereinafter).
“EBITDAR” refers to the respective real estate in trust’s operating income, plus depreciation and rent.
However, in the case of operators adopting the method of accounting as a finance lease, the amountequivalent to lease payments is taken into consideration. Furthermore, operating income anddepreciation are based on information on business income and expenditures from April 2016 to March2017 disclosed by the respective operator. Exceptions are Nichii Care Center Fukushima Omori, in
which case these are based on information on business income and expenditures from January 2016 to
December 2016 and Silver Heights Hitsujigaoka No.3, in which case these are based on information on
business income and expenditures from March 2016 to February 2017. The same shall apply hereinafterin this “A. Diversification by Rent-Paying Capacity.”(Note 2) “Annual rent” is the amount obtained by adding up the monthly rent in the respective lease agreementwith operators per rent-paying capacity in the annualized amount calculated by multiplying by 12,
rounded down to the nearest million yen.
(Note 3) “Share” is the sum total of annual rent per rent-paying capacity expressed as a percentage of the total ofannual rents for real estate in trust, rounded to one decimal place.

- 35 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period(Note)

Average rent-paying capacity(Note)
1.5x“Average rent-paying capacity” is the multiple obtained by dividing the total of EBITDAR by the totalof rents for real estate in trust, rounded to one decimal place.

B. Diversification by Appraisal Rent-Paying Capacity
Appraisal Rent-paying capacity
Annual rent
Share
(Note 1)(million yen) (Note 2)(%) (Note 3)277
20.0
More than 2.0x709
51.1
More than 1.5x, but 2.0x or less197
14.2
More than 1.2x, but 1.5x or less1.2x or less
202
14.6
1,387
100.0
Total
(Note 1) “Appraisal Rent-paying capacity” refers to the multiple obtained by dividing the respective acquired
asset’s assumed EBITDAR (figures that are calculated based on information on business income andexpenditure provided by the respective operator, under the same conditions for EBITDAR calculation
standards described in A above), which is calculated by Japan Real Estate Institute, Daiwa Real EstateAppraisal Co., Ltd. and The Tanizawa Sōgō Appraisal Co., Ltd., by rent.
(Note 2) “Annual rent” is the amount obtained by adding up the monthly rent in the respective lease agreementwith operators per rent-paying capacity in the annualized amount calculated by multiplying by 12,
rounded down to the nearest million yen.
(Note 3) “Share” is the sum total of annual rent per rent-paying capacity expressed as a percentage of the total ofannual rents for real estate in trust, rounded to one decimal place.
Average Appraisal rent-paying capacity(Note)(Note)

1.7x“Average Appraisal rent-paying capacity” is the multiple obtained by dividing the total of EBITDAR by
the total of rents for real estate in trust, rounded to one decimal place.

C. Diversification by Proportion of Long-Term Care Fee
Proportion of long-term care fee
Annual rent
Share
(Note 1)(million yen) (Note 2)(%) (Note 3)669
48.2
50% or less639
46.1
More than 50%, but 60% or less78
5.6
More than 60%, but 70% or lessMore than 70%
―
―
1,387
100.0
Total
(Note 1) “Proportion of long-term care fee” refers to the proportion of the respective real estate in trust’s net
sales that is accounted for by long-term care fee (including residents’ co-payment portion).
Furthermore, net sales and long-term care fee are based on information on business income andexpenditures from April 2016 to March 2017 disclosed by the respective operator. Exceptions are Nichii
Care Center Fukushima Omori, in which case these are based on information on business income andexpenditures from January 2016 to December 2016 and Silver Heights Hitsujigaoka No.3, in which casethese are based on information on business income and expenditures from March 2016 to February 2017.
The same shall apply hereinafter in this “C. Diversification by Proportion of Long-Term Care Fee.”(Note 2) “Annual rent” is the amount obtained by adding up the monthly rent in the respective lease agreement
per proportion of long-term care fee in the annualized amount calculated by multiplying by 12, rounded
down to the nearest million yen.
(Note 3) “Share” is the sum total of annual rent per proportion of long-term care fee expressed as a percentage ofthe total of annual rents for real estate in trust, rounded to one decimal place.

- 36 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period(Note)

Average proportion of long-term care fee(Note )
49.6%
“Average proportion of long-term care fee” is the proportion of the total of net sales that is accounted
for by long-term care fee (including residents’ co-payment portion) for real estate in trust, rounded to
one decimal place.

D. Diversification by Proportion of One-Time Entrance Fee Amortization Income
Proportion of one-time entrance fee amortization income
Annual rent
(Note 1)(million yen) (Note 2)
840
5% or less
509
More than 5%, but 15% or less37
More than 15%, but 25% or lessShare(%) (Note 3)
60.6
36.8
2.7

More than 25%
―
―
1,387
100.0
Total
(Note 1) “Proportion of one-time entrance fee amortization income” refers to the proportion of the real estate intrust’s net sales that is accounted for by one-time entrance fee amortization income.
Furthermore, net sales and one-time entrance fee amortization income are based on information on
business income and expenditures from April 2016 to March 2017 disclosed by the respective operator.
Exceptions are Nichii Care Center Fukushima Omori, in which case these are based on information on
business income and expenditures from January 2016 to December 2016 and Silver Heights
Hitsujigaoka No.3, in which case these are based on information on business income and expendituresfrom March 2016 to February 2017. The same shall apply hereinafter in this “D. Diversification by
Proportion of One-Time Entrance Fee Amortization Income.”(Note 2) “Annual rent” is the amount obtained by adding up the monthly rent in the respective lease agreement
per proportion of one-time entrance fee amortization income in the annualized amount calculated bymultiplying by 12, rounded down to the nearest million yen.
(Note 3) “Share” is the sum total of annual rent per proportion of one-time entrance fee amortization income
expressed as a percentage of the total of annual rents for real estate in trust, rounded to one decimal
place.
Average proportion of one-time entrance fee amortization income(Note)
4.4%(Note) “Average proportion of one-time entrance fee amortization income” is the proportion of the total of net
sales that is accounted for by one-time entrance fee amortization income for real estate in trust, rounded
to one decimal place.
5.2.7. Information about Major Assets“Major assets” refers to those assets of which the concerned asset’s total rent income accounts for 10% ormore of the entire portfolio’s total rent income as at the end of the 6th Fiscal Period (April 30, 2017). This is
the following for the portfolio of 22 investment real estate properties. Annual rent is not disclosed because
consent for disclosure has not been obtained from tenants.
Total
Occupancy
Appraisal
Total
Number ofleased area
rate
Property nameNOI
leasable area
tenants(m2)(%)(million yen)(m2)Charm Suite Ryokuchi Koen
1
144
5,329.73
5,329.73
100.0- 37 -

Nippon Healthcare Investment Corporation (3308) Financial Report for the 6th Fiscal Period
5.2.8. Information about Major Tenants“Major tenants” refers to those tenants of which the area leased to the concerned tenant accounts for 10% ormore of the entire portfolio’s total leased area as at the end of the 6th Fiscal Period (April 30, 2017). This is
the following for the portfolio of 22 investment real estate properties. Annual rent and lease and guarantee
deposits are not disclosed because consent for disclosure has not been obtained from tenants.
Name of major tenant

Property name

Share
(%)
(Note 1)

Appraisal
NOI(million yen)

Totalleased area
(m2)

243

15,142.82

22.5

258

12,132.65

18.0

June 30, 2035

132

8,029.82

11.9

November 30, 2035

70

7,267.56

10.8

Date ofcontract expiration

Sawayaka
Kaikyokan
Sawayaka
Meisuikan

Sawayaka Club Co., Ltd.

March 27, 2034

Sawayaka
Heart Life Nishikyogoku
Sawayaka
Hinodekan
Sawayaka
Riverside Kurinoki

November 30, 2034

Sawayaka
Obatake Sanbankan
Sompo Care LAVIER
Hiroshima Hikarigaoka
SOMPO Care Next Inc.

Sompo Care LAVIER
Sagamihara Chuo
Sompo Care LAVIER
Kinugasayama Koen

March 28, 2034

September 11, 2034

Alpha Living Okayama
Nishigawa Ryokudokoen

Anabuki Medical Care Inc.

Alpha Living Okayama
Korakuen
Alpha Living Takamatsu
EkimaeAlpha Living Takamatsu
Hyakkenmachi

Silver Heights SapporoCo., Ltd.

Silver Heights
Hitsujigaoka No.3

(Note 1) “Share” is the area leased to major tenants expressed as a percentage of the total leased area, rounded to
one decimal place.

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