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 Fiscal Period Ended January 2021
March 16, 2021

Securities Code:Healthcare & Medical Investment
Corporation (HCM)
3455

Representative:

Yuji Fujise, Executive Director

REIT Securities Issuer

Stock Exchange Listing: Tokyo Stock Exchange
URL: http://www.hcm3455.co.jp/en

Asset Management Company: Healthcare Asset Management Co., Ltd.
Representative:
Seiji Yoshioka, President & CEO
Contact:
Atsumasa Furuya, Head of Financial Management Division
TEL: +81-3-5282-2922
Scheduled date of submission of securities report:
Scheduled date of commencement of distribution payment:

April 28, 2021
April 21, 2021

Preparation of supplementary financial results briefing materials: Yes
Holding of financial results briefing session:
Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for Fiscal Period Ended January 2021 (from August 1, 2020, to January 31, 2021)(1) Management Status(% figures are the rate of period-on-period increase (decrease))
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income
million yen%
million yen%
million yen%
million yen%
Ended Jan. 2021
2,058
1.7
1,067
(0.4)
910
(0.9)
910
(0.9)
Ended Jul. 2020
2,023
0.5
1,072
(2.8)
918
(2.7)
917
(2.7)
Fiscal period

Net income per unit

Return on equity

yen
2,926
2,951

Ended Jan. 2021
Ended Jul. 2020

%
2.8
2.8

Ratio of ordinary income
to total assets
%
1.3
1.3

Ratio of ordinary income
to operating revenue
%
44.3
45.4

(2) Distributions Status
Total
Total
Distribution
Total
Distribution Ratio ofin excess of distributions distributions distributions
payout distributions(including(excluding(including(excluding
earnings perin excess of
distribution in distribution in excess
distribution in
distribution in
ratio
to net assets
unit
earnings
excess of earnings)
of earnings)
excess of earnings) excess of earnings)
Ended Jan. 2021
Ended Jul. 2020

Distribution
per unit

Distribution
per unit

yen
3,226
3,240

yen
2,880
2,928

yen
346
312

million yen
1,003
1,007

million yen
895
910

million yen
107
97

%
98.4
99.2

%
2.7
2.7

(Note 1) Total distributions in excess of earnings of 107 million yen (346 yen per unit) for the fiscal period ended January 2021 is comprised of (1) total
distribution amount from reserve for temporary difference adjustments of 14 million yen (46 yen per unit ) due to the occurrence of deferred losses
on hedges of 14 million yen recorded as net asset deduction items for the fiscal period and (2) total distribution amount of 93 million yen (300 yen perunit) from distribution reducing unitholders’ capital for tax purposes.
Total distributions in excess of earnings of 97 million yen (312 yen per unit) for the fiscal period ended July 2020 is comprised of (1) total distribution
amount from reserve for temporary difference adjustments of 7 million yen (23 yen per unit ) due to the occurrence of deferred losses on hedges of 7
million yen recorded as net asset deduction items for the fiscal period and (2) total distribution amount of 89 million yen (289 yen per unit) from
distribution reducing unitholders’ capital for tax purposes.
(Note 2) The ratio of decreasing surplus due to execution of distribution in excess of earnings (return of capital) is 0.003 for the fiscal period ended January
2021 and 0.003 for the fiscal period ended July 2020. The ratio of decreasing surplus is calculated based on Article 23, Paragraph 1, Item (v) of theOrder for Enforcement of the Corporation Tax Act.

- 1 -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.
(3) Financial Position
Fiscal period
Ended Jan. 2021
Ended Jul. 2020

Total assets
million yen
68,773
68,854

Net assets
million yen
33,00033,112Equity ratio
%
48.0
48.1

Net assets per unit
yen
106,111
106,472(4) Status of Cash Flows
Fiscal period

Ended Jan. 2021
Ended Jul. 2020

Net cashprovided by (used in) operating
activities
million yen
1,475
1,318

Net cashprovided by (used in) investing
activities
million yen(211)(1,553)

Net cashCash and cash equivalents at end
provided by (used in) financingof period
activities
million yen
million yen(1,068)
1,886
(333)
1,691

2. Earnings Forecast for the Fiscal Period Ending July 2021 (from February 1, 2021, to July 31, 2021) and the Fiscal Period Ending
January 2022 (from August 1, 2021, to January 31, 2022)(% figures are the rate of period-on-period increase (decrease))

Fiscal periodEnding Jul. 2021
Ending Jan. 2022

Operating revenue

million yen
2,072
2,079

Operating income% million yen
0.7
1,070
0.3
1,070

Ordinary income% million yen
0.2
912
0.0
911

Net income% million yen
0.2
911
(0.2)
910

(Reference) Forecast net income per unit (fiscal period ending July 2021)
Forecast net income per unit (fiscal period ending January 2022)

Distribution perDistribution inunit (excludingexcess of
distribution inearnings per
excess ofunit
earnings)
%
0.2
(0.2)

yen
2,932
2,927

yen
304
309

Distribution
per unit(including
distribution
in excess ofearnings)
yen
3,236
3,236

2,932 yen
2,927 yen

* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement① Changes in accounting policies accompanying amendments to accounting standards, etc.: No② Changes in accounting policies other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatement:No(2) Total Number of Investment Units Issued and Outstanding① Total number of investment units issued and outstanding (including treasury investment units) at end of period
311,001 units
Fiscal period ended January 2021 311,001 units
Fiscal period ended July 2020
② Number of treasury investment units at end of period
Fiscal period ended January 2021
- units
Fiscal period ended July 2020
- units(Note) For the number of investment units serving as the basis for calculation of net income per unit, please see “Notes on
Per Unit Information” on page 32.

* This Financial Report is exempt from the audit by a certified public accountant or an auditing firm.
* Special note
The forecast is a future prospect judged by HCM based on information currently available and includes many uncertain factors.
Actual operating revenue, operating income, ordinary income, net income, distribution per unit (excluding distribution in excess ofearnings), distribution in excess of earnings per unit and distribution per unit (including distribution in excess of earnings) are
subject to change due to changes in circumstances. In addition, the forecast is not a guarantee of the amount of distribution anddistribution in excess of earnings. For the assumptions underlying the above forecast, please see “Assumptions Underlying Earnings
Forecast for Fiscal Period Ending July 2021 and Fiscal Period Ending January 2022” on pages 10 and 11.

- 2 -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.

Table of Contents
1. Management Status ................................................................................................................................................................ 4(1) Management Status ........................................................................................................................................................ 4
2. Financial Statements ............................................................................................................................................................. 12(1) Balance Sheet ................................................................................................................................................................ 12(2) Statement of Income ..................................................................................................................................................... 14(3) Statement of Unitholders’ Equity .................................................................................................................................. 15(4) Statement of Cash Distributions .................................................................................................................................... 17(5) Statement of Cash Flows ............................................................................................................................................... 19(6) Notes on the Going Concern Assumption...................................................................................................................... 20(7) Notes on Matters Concerning Significant Accounting Policies ....................................................................................... 20(8) Notes on Financial Statements ...................................................................................................................................... 22(9) Changes in Total Number of Investment Units Issued and Outstanding ........................................................................ 33
3. Reference Information .......................................................................................................................................................... 34(1) Information on Prices of Assets Under Management, Etc. ............................................................................................ 34(2) Status of Capital Expenditures ....................................................................................................................................... 49- 3 -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.

1.

Management Status(1) Management Status① Overview of the Current Fiscal Period(a) Brief History of HCM
Healthcare & Medical Investment Corporation (hereinafter, “HCM”) was established under the Act on Investment Trusts
and Investment Corporations (Act No. 198 of 1951, as amended; hereinafter, the “Investment Trusts Act”) with
Healthcare Asset Management Co., Ltd. (hereinafter, the “Asset Management Company” or “HAM”) as the organizer on
December 9, 2014. HCM was listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc.
(hereinafter, the “Tokyo Stock Exchange”) (securities code: 3455) on March 19, 2015.
The total number of investment units issued and outstanding as of the end of the fiscal period ended January 2021
(August 1, 2020, to January 31, 2021) (hereinafter, the “12th fiscal period” or the “current fiscal period”) stands at
311,001 units.
(b) Investment Environment and Performancea. Investment Environment
HCM was established on the background of the social situation in which expansion and enhancement of nursing careservices and medical services by healthcare facilities has become an urgent issue, at the time when the population whichbears nursing care continues to shrink while aging advances the fastest in developed nations and the number andpercentage of the elderly among the total population is expected to remain on the rise for the time being.
The government has also set a target in its “Housing Life Basic Plan (nationwide plan)” to increase the ratio of housing
supply for the elderly from 2.1% in 2014 to 4% in 2025.
HCM invests in and holds healthcare facilities, for which social demand is growing, in a stable manner to promote
appropriate maintenance/management and new supply of such facilities. By doing so, HCM seeks to realize a society
where all people can live vibrantly and with peace of mind, as well as to secure stable income and to achieve steady
growth of its portfolio.
b. Performance
During the current fiscal period, HCM made no acquisition or transfer.
As of the end of the current fiscal period, HCM owns 36 properties with a total leasable area of 186,358.75 m 2, and theoperational rate stands at 100.0% as of the end of the current fiscal period.
The Japanese economy is expected to remain in a severe situation for some time given the spread of coronavirus disease-2019(COVID-19). A sense of uncertainty is also growing in the real estate market, especially around retailfacilities and hotels. However, COVID-19 has had no negative impact on the performance of HCM as of the end of thecurrent fiscal period, as HCM has concluded long-term and fixed-rent lease agreements, as a rule, with the operators of
the healthcare facilities it owns. Moreover, there has been no midterm cancellation of the lease agreements, rent
reduction/exemption or deferment of rent payment with the tenants. Nevertheless, it is unpredictable whether COVID19 will spread further, and close attention must be paid to how the situation will evolve going forward.

(c) Overview of Financing
HCM upholds stable financial management as its basic policy for securing stable income and maintaining and enhancing
asset value over the medium to long term.
In the current fiscal period, HCM borrowed 3,700 million yen on January 29, 2021 to refinance 3,000 million yen of loans
due for repayment on January 29, 2021, as well as to carry out early repayment of existing loans. Furthermore, HCM
conducted early repayment of 700 million yen of existing loans on January 29, 2021.

- 4 -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.
As a result, unitholders’ capital (net) (Note) at the end of the current fiscal period stands at 32,152 million yen, the total
number of investment units issued and outstanding at 311,001 units, and the total interest-bearing liabilities at 33,150
million yen.
(Note) The figure indicates the amount obtained by subtracting deduction from unitholders’ capital from unitholders’ capital. The amount does
not take into account the change in unitholders’ capital in line with the implementation of distribution in excess of earnings of reserve
for temporary difference adjustments.

As of the end of the current fiscal period, the ratio of interest-bearing liabilities to total assets (hereinafter, “LTV”) is
48.2%.
HCM’s rating as of January 31, 2021 is as follows.
Rating Agency
Rating category
Japan Credit Rating
Agency, Ltd. (JCR)

Long-term issuer rating

RatingOutlookA (single-A)

Stable(d) Overview of Business Performance and Distributions
As a result of the management described above, for the current fiscal period, operating revenue stood at 2,058 million
yen, operating income at 1,067 million yen, ordinary income at 910 million yen and net income at 910 million yen.
In accordance with the cash distribution policy described in Article 36, Paragraph 1 of its Articles of Incorporation, HCM
determines that the amount of distribution shall exceed the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Act on Special Measures Concerning Taxation, and shall be up to its profits as defined in
Article 136, Paragraph 1 of the Investment Trusts Act. Following this policy, HCM has decided that, of profits as defined in
Article 136, Paragraph 1 of the Investment Trusts Act, it shall distribute 895,682,880 yen, which is the maximum integral
multiple to 311,001 units issued and outstanding as the distribution of earnings. Accordingly, distribution of earning perunit was 2,880 yen.
In addition, HCM is to make distribution in excess of earnings, of which amount is to be determined by HCM as an
amount equivalent to net asset deduction items (as defined in Article 2, Paragraph 2, Item (30) (b) of the Ordinance on
Accountings of Investment Corporations), considering the impact of net asset deduction items on distribution, pursuant
to the policy for cash distribution in excess of earnings provided in Article 36, Paragraph 2 of its Articles of Incorporation.
During the current fiscal period, since deferred losses on hedges of 14 million yen was recorded as net asset deduction
items, HCM decided to make distribution of reserve for temporary difference adjustments in the amount of 14,306,046
yen. As a result, distribution in excess of earnings per unit (distribution of reserve for temporary difference adjustments)
came to 46 yen.
Furthermore, in accordance with the policy for cash distribution in excess of earnings provided in Article 36, Paragraph 2of its Articles of Incorporation, HCM is to conduct distribution in excess of earnings (return of capital that falls under the
category of distribution reducing unitholders’ capital for tax purpose) in each period on a continuous basis as a rule.
During the current fiscal period, HCM has decided to distribute 93,300,300 yen, an amount roughly equivalent to 20% ofdepreciation recorded in the current fiscal period, as distribution in excess of earnings. As a result, distribution in excessof earnings per unit (other distribution in excess of earnings) came to 300 yen.
As a result, distribution per unit came to 3,226 yen.
(Note1) Distribution in excess of earnings is distributed up to the amount equivalent to 20/100 of the depreciation recorded in the accounting
period immediately before the accounting period when HCM will pay the said distribution, sufficiently taking into consideration theamount of capital expenditures necessary for maintaining and improving the competitiveness of HCM’s Assets Under Management, thefinancial position of HCM and other factors.
However, distribution in excess of earnings may be conducted up to an amount lower than the above amount or may not be conductedwhen the implementation of distribution in excess of earnings up to this amount is judged to be inappropriate based on the economic
environment surrounding HCM, trends of the real estate market and leasing market, status of HCM’s Assets Under Management andfinancial conditions.

- 5 -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.
(Note 2) Under the rules of The Investment Trusts Association, Japan (hereinafter, “The Investment Trusts Association”), closed-end type
investment corporations are allowed to conduct distribution in excess of earnings up to an amount equivalent to 60/100 of thedepreciation recorded on the last day of the accounting period.

② Outlook for the Next Fiscal Period(a) Investment Environment
In Japan, while the number of elderly households is increasing, the population which bears nursing care is on the decline.
Accordingly, providing of nursing care services and medical services at external facilities for a certain percentage ofelderly households is inevitably needed. In response to the expanding demand for such nursing care and medical services,
it is required to expand the supply of healthcare facilities, and especially facilities and housing for the elderly.
It is forecasted that nursing care in the same household will become difficult due to aging and change of family structure.
In this regard, new development and expansion of healthcare facilities is required to respond to the growing demand for
nursing care and medical services, and measures to achieve this goal are being promoted.
In its “Japan Revitalization Strategy -JAPAN is BACK-“ dated June 14, 2013, the Headquarters for Japan's Economic
Revitalization announced a policy to “enact a guideline concerning acquisition and management of properties including
housing for the elderly, to promote the utilization of healthcare REITs in an effort to utilize private fund” as part of urban
development to enable the elderly, etc. to walk and live safely .
Following this policy, the Ministry of Land, Infrastructure, Transport and Tourism announced the “Guideline related to theutilization of healthcare REITs targeting housing for the elderly, etc.” on June 27, 2014 and the “Guideline related to REITs
targeting hospital real estate” on June 26, 2015, as well as indicated the points to be noted in transactions of healthcare
facilities, such as the positioning of key executive with certain experience. With the enactment of these guidelines, it isconsidered that the opportunity for the operators to utilize healthcare REITs will increase.
In addition, “Housing Life Basic Plan (nationwide plan)” that was decided by the cabinet as of March 18, 2016 set a
performance indicator, which calls for increasing the ratio of housing for the elderly to the elderly population from 2.1%
in 2014 to 4% in 2025, based on the goal to “realize a housing life where the elderly can live independently.”
As for the environment surrounding medical service-related facilities, the government of Japan has demonstrated a“regional comprehensive care system,” a future vision concerning the reorganization of medical service and nursing carefunctions for providing more effective and efficient medical and nursing care services in light of the increase of theelderly population in Japan. The vision envisages achieving the goal through subdividing roles of the functions of
hospitals and hospital beds for the needs of patients and enhancing cooperation in medical service and nursing care. The
government has also established guidelines (March 2015) for planning a community healthcare vision in prefectures,with an aim to provide appropriate medical service to all patients at an appropriate location by further dividing thefunctions of beds in medical institutions in line with the conditions of patients, so that limited medical resources are
effectively utilized. Prefectures are working to promote subdividing medical functions in accordance with medical needs,
by establishing a vision for community healthcare to adequately promote well-balanced division and coordination of
medical functions in a way that suits the community and by newly including such vision in medical planning.
Furthermore, it is estimated that there are approximately 8,400 hospitals (referring to “a facility for the hospitalization of
not less than 20 patients, where physicians or dentists carry out medical practices or dental practices for the public orother specific groups of people” as defined in Article 1-5, Paragraph 1 of the Medical Care Act) in Japan, but the ratio ofearthquake-resistant hospitals in the country remains at only 76.0% according to a survey conducted in fiscal 2019.
Earthquake resistance is an urgent issue as hospitals are used by an unspecified large number of people every day andcan also be used as a community base in case of a disaster, as well as from the viewpoint of strengthening the country's
infrastructure.
Therefore, hospitals have capital investment needs, such as newly building hospital wards to meet the division offunctions, changing current wards to meet the required number of beds, making buildings earthquake-resistant andreconstructing buildings. Accordingly, capital needs surrounding hospitals are projected to increase going forward.
- 6 -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.
As we see it, the market for healthcare facilities with a particular emphasis on the keywords of “nursing care,” “medical
service” and “health,” which HCM sets as acquisition targets, is believed to further expand in the future.
On the other hand, there are growing concerns about economic deterioration due to the spread of COVID-19. However,HCM believes that its income will not be impacted immediately, as the healthcare facilities it owns are operated underlong-term lease agreements with fixed rents, as a rule, and the operating status by the operators and their financial
conditions are continuously monitored. Nevertheless, it is unpredictable whether COVID-19 will spread further, and close
attention must be paid to how the situation will evolve going forward.
(b) Future Management Policy and Challenges to Address
With recognition of the above investment environment, HCM aims to secure stable income and steady growth of theportfolio while seeking to realize a society where all people can live vibrantly and with peace of mind, and manages
assets based on the following policies.
a. Asset management policy for properties owned
Healthcare facilities possess a unique property feature in which not only location or specifications of buildings, but also
the operational capability of the operator and management stability have a large impact on their value as real estate.
When HCM acquires a healthcare facility, we aim to secure stable income for the medium to long term by, in principle,
concluding a long-term lease agreement with fixed rent with the operator that operates the healthcare facility.
HCM conducts due diligence on the business feasibility of facilities, including analyzing the management and financial
conditions of operators, along with real estate due diligence, in order to secure stable income over the medium to longterm; and also implements continuous monitoring even after the acquisition.
b. Property acquisition policy
Based on the support agreements the Asset Management Company has concluded with the sponsors, etc., HCM may
utilize their comprehensive capabilities. including professional know-how and customer base, as well as the first refusal
rights provided in the agreements.
Furthermore, the Asset Management Company may, for the purpose of making flexible property acquisition, request thesponsors, etc. to temporarily own a property (warehousing) on the premise it be transferred to HCM.
As such, HCM works to best utilize the extensive network and warehousing function of the sponsors, etc. in an effort toachieve continuous growth of its asset size, aiming to maximize unitholder value over the medium to long term.
c. Financing policy
HCM intends to build a stable financial base with an aim to secure stable income over the medium to long term andmaximize unitholder value, and conducts financing in consideration of the trends in the financial market.
With stable growth of HCM over the long term in mind, equity financing will be carried out flexibly, taking into
consideration a multitude of factors including the acquisition timing of real estate-related assets to be newly acquired,
the possibility of utilizing the sponsor’s warehousing function, LTV, repayment dates of interest-bearing liabilities and theremaining period to maturity as well as market conditions, while also considering the dilution of the rights of existing
unitholders and the resulting decline, etc. in the trading price of the investment units.
As to debt financing, stable and flexible leverage control will be implemented by diversifying repayment dates andsetting upper limit of LTV at 65% (which may, however, exceed 65% temporarily). In addition, stable bank formation willbe established by receiving financial advice from Sumitomo Mitsui Banking Corporation, one of the sponsors, based on
the sponsor support agreement concluded between the bank and the Asset Management Company.
(c) Significant Subsequent Events
Not applicable.

- 7 -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.
(Reference Information)
Acquisition of Assets
HCM concluded a purchase agreement related to the acquisition of the following a trust beneficiary interest (hereinafter,
the “Asset Acquired in the 13th fiscal period”) in real estate on March 16, 2021.

Property namePlannedacquisition price

Location

Planned acquisition date(million yen)
Nichii Home Nishikokubunji

Kokubunji-shi, Tokyo

720

March 29, 2021

(Note) “Planned acquisition price” does not include acquisition-related expenses, property tax, urban planning tax, consumption
tax and local consumption tax.

- 8 -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.
(d) Earnings Forecast Outlook
HCM expects the following earnings forecast for the fiscal period ending July 2021 (from February 1, 2021, to July 31,2021) and the fiscal period ending January 2022 (from August 1, 2021, to January 31, 2022). For the assumptions
underlying this forecast, please see “Assumptions Underlying Earnings Forecast for Fiscal Period Ending July 2021 andFiscal Period Ending January 2022” below.
For the fiscal period ending July 2021 (from February 1, 2021, to July 31, 2021) and the fiscal period ending January 2022
(from August 1, 2021, to January 31, 2022), it is assumed that there is no change in the fair value of interest rate swaps,
and HCM has no plan at present to conduct distribution in excess of earnings of reserve for temporary difference
adjustments.
Fiscal period ending July 2021 (from February 1, 2021, to July 31, 2021)
Operating revenue

2,072 million yen

Operating income

1,070 million yen

Ordinary income

912 million yen

Net income
Distribution per unit
(excluding distribution in excess of earnings)
Distribution in excess of earnings per unit
Distribution per unit
(including distribution in excess of earnings)

911 million yen
2,932 yen
304 yen3,236 yen

Fiscal period ending January 2022(from August 1, 2021, to January 31, 2022)
Operating revenue

2,079 million yen

Operating income

1,070 million yen

Ordinary income

911 million yen

Net income

910 million yen

Distribution per unit
(excluding distribution in excess of earnings)
Distribution in excess of earnings per unit
Distribution per unit
(including distribution in excess of earnings)(Note)

2,927 yen
309 yen3,236 yen

Please note that actual operating revenue, operating income, ordinary income, net income, distribution per unit (excluding distribution inexcess of earnings), distribution in excess of earnings per unit and distribution per unit (including distribution in excess of earnings) may
differ from the forecast figures above as a result of discrepancies from assumptions arising due to additional real estate acquisition or salein the future, trends in the real estate market, fluctuation of interest rates and changes in other situations surrounding HCM, among otherfactors. In addition, the forecast is not a guarantee of the amount of distribution or distribution in excess of earnings.

- 9 -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.
Assumptions Underlying Earnings Forecast for Fiscal Period Ending July 2021 and Fiscal Period Ending January 2022
Item
Accounting period

Assumptions
・・・

Assets undermanagement
・・

Operating revenue

・

・
・

・

Operating expenses

・

・

・
・

・

・
Non-operating
expenses・・Interest-bearing
liabilities
・
Investment units

Fiscal period ending July 2021 (13th fiscal period): from February 1, 2021, to July 31, 2021 (181 days)
Fiscal period ending January 2022 (14th fiscal period): from August 1, 2021, to January 31, 2022 (184days)
It is assumed that there will be no changes (acquisition of new properties, sale of the assets undermanagement, etc.) in the trust beneficiary interests in real estate (36 properties in total) owned by
HCM as of the date of this document (hereinafter, the “Acquired Assets”) and Asset Acquired in the
13th fiscal period (hereinafter, collectively referred to as the “Assets Under Management”) throughto the end of the fiscal period ending January 2022.
There may actually be changes due to acquisition of new properties, or sale of the Assets Under
Management, etc. in the future.
Lease business revenue from Acquired Assets is calculated by considering and analyzing such factors
as the lease agreement of each Asset Under Management effective as of the date of this document,
tenant trends and market conditions.
Lease business revenue from Asset Acquired in the 13th fiscal period is calculated by considering andanalyzing such factors as information of Assets Acquired in the 13th fiscal period received fromcurrent owner, the lease agreement of each Asset Under Management effective as of the date of thisdocument, tenant trends and market conditions.
It is assumed that there will be no default or non-payment of rents by tenants.
The main breakdown of expenses related to rent business, the major component of operating
expense, is as follows.
Fiscal period ending
Fiscal period ending
July 2021
January 2022
Property tax
142 million yen
142 million yen
Repair expenses
27 million yen
25 million yen
Depreciation
474 million yen
481 million yen
Other expenses related to rent business52 million yen
52 million yen
Out of the expenses related to rent business, the major component of operating expense, expenses
other than depreciation are calculated based on the past figures and by reflecting factors for change
in expenses.
In purchasing and selling real estate in general, property tax and city planning tax are calculated on a
pro rata basis with previous owners and settled at the time of acquisition, but as HCM includes thissettlement money in acquisition cost, they are not recoded as expenses in the year of acquisition.
Accordingly, property tax and city planning tax of the assets to be acquired in the fiscal period ended
July 2021 will not be recorded as expenses in the fiscal period ending July 2021 and in the fiscal
period ending January 2022, and such for fiscal 2022 will be recorded as expenses from the fiscal
period ending July 2022.
For repair expenses, the Asset Management Company records the expenses it deems necessary foreach property in each period. However, as repair expenses may increase or decrease, or additional
repair may be required due to unpredictable factors, actual expanses may differ significantly fromthe forecast.
Depreciation is calculated by using the straight-line method including ancillary expenses.
The asset management fee paid to the Asset Management Company is assumed to be 197 million
yen for the fiscal period ending July 2021 and 199 million yen for the fiscal period ending January2022.
Investment unit issuance expenses accompanying the issuance of new investment units are
depreciated evenly over 3 years and are assumed to be 6 million yen for the fiscal period ending July
2021 and 6 million yen for the fiscal period ending January 2022.
Investment corporation bond issuance costs associated with the issuance of investment corporation
bonds are depreciated using the straight-line method over the period up to redemption, and areassumed to be 1 million yen in the fiscal period ending July 2021 and 1 million yen in the fiscal
period ending January 2022.
Interest expenses, interest expenses on investment corporation bonds and other borrowing
expenses are assumed to be 150 million yen for the fiscal period ending July 2021 and 151 million
yen for the fiscal period ending January 2022.
As of the date of the document, HCM has a balance of interest-bearing liabilities of 33,150 million
yen. It is assumed that there will be no change in the balance of interest-bearing liabilities at the endof the fiscal period ending July 2021 and the fiscal period ending January 2022, with an assumptionthat 7,000 million yen of loans due for repayment in the fiscal period ending January 2022
(repayment date: January 31, 2022) will be refinanced for the same amount.
The total number of investment units issued and outstanding is assumed to be 311,001 units, whichis the figure as of the date of this document, and it is assumed that there will be no change in thenumber of investment units due to issuance of new investment units, etc. through to the end of the- 10 -

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.
Item

Assumptions
・・Distribution per unit
(excluding distribution ・in excess of earnings)
・・Distribution in excessof earnings per unit
・・・
Others・fiscal period ending January 2022.
Distribution per unit is calculated based on the forecasted number of units issued and outstanding at
the end of period of 311,001 units for the fiscal period ending July 2021 and for the fiscal period
ending January 2022, respectfully.
Distribution per unit (excluding distribution in excess of earnings) is calculated on the premise of the
cash distribution policy provided in the Articles of Incorporation of HCM.
Distribution per unit (excluding distribution in excess of earnings) may vary due to various factors,
including fluctuation in rent revenue accompanying change in Assets Under Management, change intenants, etc. or incurrence of unexpected repairs.
Distribution in excess of earnings per unit is calculated pursuant to the policies provided in the
Articles of Incorporation of HCM, policies provided below, other applicable laws and regulations, andrules of self-regulatory and other organizations. The total amount of distribution in excess ofearnings is assumed to be 94 million yen for the fiscal period ending July 2021 and 96 million yen for
the fiscal period ending January 2022.
The total amount of distribution in excess of earnings is distributed up to the amount equivalent to
20/100 of the depreciation recorded in the accounting period immediately before the accounting
period when HCM will pay the said distribution, sufficiently taking into consideration the amount of
capital expenditure necessary for maintaining and improving the competitiveness of HCM’s Assets
Under Management and the financial position of HCM.
However, distribution in excess of earnings may be conducted up to an amount lower than the above
amount or may not be conducted when the implementation of distribution in excess of earnings up
to this amount is judged to be inappropriate based on the economic environment surrounding HCM,
trends of the real estate market and leasing market, status of HCM’s Assets Under Management andfinancial conditions.
For the fiscal period ending July 2021 and the fiscal period ending January 2022, it is assumed that
there is no loss in the fair value of interest rate swaps, and HCM has no plan at present to conduct
distribution in excess of earnings of reserve for temporary difference adjustments.
It is assumed that there will be no revision of laws and regulations, tax systems, accounting
standards, securities listing regulations set forth by the Tokyo Stock Exchange, rules of The
Investment Trusts Association, Japan, etc. that will impact the forecast figures above.
It is assumed that there will be no unforeseen serious change in general economic trends and realestate market conditions, among other factors.

- 11 -

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.

2.

Financial Statements(1) Balance Sheet(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2020)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Prepaid expenses
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
Machine and device in trust
Accumulated depreciation
Machine and device in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Security deposits
Long-term prepaid expenses
Deferred tax assets
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance expenses
Investment corporation bond issuance costs
Total deferred assets
Total assets

Current fiscal period(As of Jan. 31, 2021)

1,624,242
145,223
119,589
1,889,055*1- 12 -

32,959,564(3,263,020)
29,696,543
91,855(9,701)
82,153
16,793(4,251)
12,541
135,734(29,376)
106,357
36,798,444
66,696,041

1,792,280
180,725
128,445
2,101,451*1

33,069,453(3,711,847)
29,357,606
91,855(11,155)
80,69919,158(5,110)14,047218,043(45,778)
172,264
36,798,444
66,423,062

795
795

596
596

10,000219,45617
229,473
66,926,310

10,000206,67714
216,691
66,640,351

19,272
19,77439,047
68,854,413

12,84818,73331,582
68,773,384

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.

(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2020)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivatives liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Reserve for temporary difference
adjustments
Other deduction from unitholders' capital
Total deduction from unitholders' capital
Unitholders' capital, net
Surplus
Unappropriated retained earnings (undisposed
loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

13,055700,000
3,000,000
44,458
236,790966
18,359337,618410
4,351,659

50,377－7,000,000
31,796
241,316907
7,970
335,882
126
7,668,378

2,000,000
27,450,000
1,805,509
86,76647,336207
31,389,820
35,741,479

2,000,000
24,150,000
1,805,509
86,766
61,74650
28,104,072
35,772,451

32,480,785

32,480,785*3- 13 -

Current fiscal period(As of Jan. 31, 2021)(39,989)*3(47,142)(238,668)(278,657)
32,202,128(328,547)(375,690)
32,105,095

958,141

957,584

958,141
33,160,269

957,584
33,062,679(47,336)(47,336)*2 33,112,933
68,854,413(61,746)(61,746)*2 33,000,933
68,773,384

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.
(2) Statement of Income(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020
Operating revenue
Lease business revenue
Other lease business revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations
Property tax
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Insurance income
Reversal of distribution payable
Other
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment unit issuance expenses
Amortization of investment corporation bond issuance
costs
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

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

2,015,035*1 8,783
2,023,819
652,411
196,932
3,408
21,4803,000
26,307
48,111
951,651
1,072,167*1- 14 -*1

2,047,415
10,954
2,058,370*1*1678,866
200,051
3,435
22,156
3,900
28,11553,934990,458
1,067,911

10
1,891
367
128
2,398

9
－
1,096
－
1,106

86,0897,800
6,424

87,947
7,800
6,424

1,040

1,040

54,314
155,669
918,896
918,896968(7)
960
917,935
40,206958,141

54,839158,052
910,964
910,964908
2
911
910,053
47,530957,584

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.
(3) Statement of Unitholders’ Equity
Previous fiscal period (from February 1, 2020, to July 31, 2020)(Unit: thousands of yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’capitalBalance at beginning ofcurrent period
Changes of items during
periodReserve fortemporarydifference
adjustments

Other
deduction
fromunitholders'
capitalTotal
deduction
fromunitholders'
capitalUnitholders'
capital, net(37,501)(150,033)(187,534)

32,293,251(2,488)(2,488)(88,635)(88,635)(88,635)

32,480,785

Dividends of surplus
Distribution in excess ofearnings of reserve fortemporary difference
adjustments
Other distribution inexcess of earnings(2,488)Net income
Changes of items otherthan unitholders’ equity
during the period, net
Total changes of items
during the period
Balance at end of current
period－(2,488)(88,635)(91,123)(91,123)*1 32,480,785(39,989)(238,668)(278,657)

32,202,128(Unit: thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unappropriatedretainedearnings
Total surplus(undisposed
loss)
Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus

Changes of items otherthan unitholders’ equity
during the period, net
Total changes of items
during the period
Balance at end of current
periodDeferred gains Total valuation
or losses on and translation
hedgesadjustments

981,606

33,274,857(941,400)(941,400)(941,400)(941,400)(2,488)(2,488)(88,635)(88,635)

917,935

917,935

917,935

917,935(40,097)(40,097)

Total
net assets

981,606

Distribution in excess ofearnings of reserve fortemporary difference
adjustments
Other distribution inexcess of earnings
Net income

Total
unitholders’equity33,234,759(7,238)(7,238)(7,238)(23,464)(23,464)(114,587)(7,238)(7,238)(121,825)

958,141

958,141

33,160,269(47,336)(47,336)

33,112,933- 15 -

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.
Current fiscal period (from August 1, 2020, to January 31, 2021)(Unit: thousands of yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’capitalBalance at beginning ofcurrent period
Changes of items during
periodReserve fortemporarydifference
adjustments

Other
deduction
fromunitholders'
capitalTotal
deduction
fromunitholders'
capitalUnitholders'
capital, net(39,989)(238,668)(278,657)

32,202,128(7,153)(7,153)(89,879)(89,879)(89,879)

32,480,785

Dividends of surplus
Distribution in excess ofearnings of reserve fortemporary difference
adjustments
Other distribution inexcess of earnings(7,153)

Net income
Changes of items otherthan unitholders’ equity
during the period, net
Total changes of items
during the period
Balance at end of current
period－(7,153)(89,879)(97,032)(97,032)*1 32,480,785(47,142)(328,547)(375,690)

32,105,095(Unit: thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unappropriatedretainedearnings
Total surplus(undisposed
loss)
Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus

Changes of items otherthan unitholders’ equity
during the period, net
Total changes of items
during the period
Balance at end of current
periodDeferred gains Total valuation
or losses on and translation
hedgesadjustments

958,141

33,160,269(910,610)(910,610)(910,610)(910,610)(7,153)(7,153)(89,879)(89,879)

910,053

910,053

910,053

910,053(47,336)(47,336)

Total
net assets

958,141

Distribution in excess ofearnings of reserve fortemporary difference
adjustments
Other distribution inexcess of earnings
Net income

Total
unitholders’equity33,112,933(14,410)(14,410)(14,410)

(557)

(557)

( 97,590)(14,410)(14,410)(112,000)

957,584

957,584

33,062,679(61,746)(61,746)

33,000,933- 16 -

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.
(4) Statement of Cash Distributions(Unit: yen)Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020
I.

Unappropriated retained earnings

958,141,852

957,584,150

97,032,312
7,153,023

107,606,346
14,306,046

89,879,289

93,300,300

1,007,643,240

1,003,289,226[3,240]910,610,928[3,226]895,682,880[2,928]
7,153,023[2,880]14,306,046

[23]

[46]

89,879,289

93,300,300

[289]

[300]

47,530,924

61,901,270

II. Distribution in excess of earnings
Of which, reserve for temporary difference
adjustments
Of which, other deduction from unitholders’capitalIII. Amount of distributions[Distribution per unit]
Of which, distribution of earnings(Of which, distribution of earnings per unit)
Of which, reserve for temporary difference
adjustments(Of which, distribution in excess of earnings per
unit(of reserve for temporary difference
adjustments))
Of which, other distribution in excess ofearnings(of other distribution in excess of earnings))
IV. Retained earnings carried forward

Method of calculation of amount of distributions

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

In accordance with the cash
distribution policy described in
Article 36, Paragraph 1 of its
Articles of Incorporation, HCM
determines that the amount of
distribution shall exceed theamount equivalent to 90% of its
distributable profit as stipulated in
Article 67-15 of the Act on Special
Measures Concerning Taxation, andshall be up to its profits as definedin Article 136, Paragraph 1 of theInvestment Trusts Act. Following
this policy, HCM has decided that,of profits as defined in Article 136,
Paragraph 1 of the Investment
Trusts Act, it shall distribute
910,610,928 yen, which is the
maximum integral multiple to311,001
units
issuedandoutstanding as the distribution of
earnings. Accordingly, distributionof earning per unit was 2,928 yen.
In addition, HCM is to make
distribution in excess of earnings, ofwhich amount is to be determinedby HCM as an amount equivalent
to net asset deduction items (asdefined in Article 2, Paragraph 2,
Item (30) (b) of the Ordinance on
Accountingsof
Investment
Corporations), considering the- 17 -In accordance with the cash
distribution policy described in
Article 36, Paragraph 1 of its Articles
of Incorporation, HCM determinesthat the amount of distribution shallexceed the amount equivalent to
90% of its distributable profit as
stipulated in Article 67-15 of the Act
on Special Measures Concerning
Taxation, and shall be up to its profits
as defined in Article 136, Paragraph 1of the Investment Trusts Act.
Following this policy, HCM has
decided that, of profits as defined in
Article 136, Paragraph 1 of theInvestment Trusts Act, it shall
distribute 895,682,880 yen, which is
the maximum integral multiple to311,001 units issued and outstanding
as the distribution of earnings.
Accordingly, distribution of earning
per unit was 2,880 yen.
In addition, HCM is to make
distribution in excess of earnings, ofwhich amount is to be determined by
HCM as an amount equivalent to net
asset deduction items (as defined in
Article 2, Paragraph 2, Item (30) (b)of the Ordinance on Accountings ofInvestment
Corporations),
considering the impact of net asset
deduction items on distribution,
pursuant to the policy for cash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.

Method of calculation of amount of
distributions(Note 1)

Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

impact of net asset deduction items
on distribution, pursuant to the policy
for cash distribution in excess ofearnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation. During the current
fiscal period, since deferred losses onhedges of 7 million yen was recorded
as net asset deduction items, HCM
decided to make distribution ofreserve for temporary difference
adjustments in the amount of
7,153,023 yen.
As a result, distribution in excess ofearnings per unit (distribution ofreserve for temporary difference
adjustments) came to 23 yen.
Furthermore, in accordance with thepolicy for cash distribution in excessof earnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation, HCM is to conduct
distribution in excess of earnings(return of capital that falls under the
category of distribution reducing
unitholders’ capital for tax purpose) in
each period on a continuous basis as arule. During the current fiscal period,
HCM has decided to distribute
89,879,289 yen, an amount roughly
equivalent to 20% of depreciation
recorded in the current fiscal period,
as distribution in excess of earnings.
As a result, distribution in excess ofearnings per unit (other distribution
in excess of earnings) came to 289
yen.
As a result, distribution per unit came
to 3,240 yen.

distribution in excess of earnings
provided in Article 36, Paragraph 2 of
its Articles of Incorporation. During
the current fiscal period, sincedeferred losses on hedges of 14
million yen was recorded as net asset
deduction items, HCM decided tomake distribution of reserve fortemporary difference adjustments inthe amount of 14,306,046 yen.
As a result, distribution in excess ofearnings per unit (distribution ofreserve for temporary difference
adjustments) came to 46 yen.
Furthermore, in accordance with thepolicy for cash distribution in excessof earnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation, HCM is to conduct
distribution in excess of earnings(return of capital that falls under the
category of distribution reducing
unitholders’ capital for tax purpose) in
each period on a continuous basis as arule. During the current fiscal period,
HCM has decided to distribute
93,300,300 yen, an amount roughly
equivalent to 20% of depreciation
recorded in the current fiscal period,
as distribution in excess of earnings.
As a result, distribution in excess ofearnings per unit (other distribution
in excess of earnings) came to 300
yen.
As a result, distribution per unit came
to 3,226 yen.

Distribution in excess of earnings is distributed up to the amount equivalent to 20/100 of the depreciation recorded in the accounting
period immediately before the accounting period when HCM will pay the said distribution, sufficiently taking into consideration the amountof capital expenditures necessary for maintaining and improving the competitiveness of HCM’s Assets Under Management, the financial
position of HCM and other factors.
However, distribution in excess of earnings may be conducted up to an amount lower than the above amount or may not be conductedwhen the implementation of distribution in excess of earnings up to this amount is judged to be inappropriate based on the economic
environment surrounding HCM, trends of the real estate market and leasing market, status of HCM’s Assets Under Management andfinancial conditions.

(Note 2)

Under the rules of The Investment Trusts Association, closed-end investment corporations are allowed to conduct distribution in excess ofearnings up to an amount equivalent to 60/100 of the depreciation recorded on the last day of the accounting period.

- 18 -

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.
(5) Statement of Cash Flows(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020
Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of investment corporation bond issuance
costs
Borrowing expenses
Amortization of investment unit issuance expenses
Interest income
Interest expenses
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 accrued expenses
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
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Borrowing expenses
Dividends 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- 19 -

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

918,896451,333

910,964
467,741

1,040

1,040

54,3146,424(10)93,889(15,677)(27,243)(7,823)(7,362)(2,882)
8,570(60,450)337
244
1,413,602
10(93,914)(814)
1,318,884

54,8396,424(9)95,747
1,387
37,322
6,275(10,388)
3,580(1,735)
8,320(284)(10,358)
1,570,869
9(94,801)(968)
1,475,108(1,625,282)
71,500(1,553,782)( 211,962)－(211,962)

700,000－－－(2,118)(1,031,781)(333,900)(568,798)
2,260,601*1 1,691,803－(700,000)
3,700,000(3,000,000)(60,624)(1,008,084)(1,068,709)
194,436
1,691,803*1 1,886,239

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.
(6) Notes on the Going Concern Assumption
Not applicable.
(7) Notes on Matters Concerning Significant Accounting Policies
1. Method of depreciation of non- (1) Property, plant and equipment
current assets
The straight-line method is adopted.
The useful life of principal property, plant and equipment is as follows:
Buildings in trust
5-69 years
Structures in trust
10-53 years
Machine and device in trust
10 years
Tools, furniture and fixtures in trust
6-15 years(2) Intangible assets
The straight-line method is adopted.
2. Accounting for deferred assets(1) Investment unit issuance expenses
Depreciated evenly over 3 years.
(2) Investment corporation bond issuance costs
Amortized using the straight-line method over the period up to redemption.
3. Standards for revenue andAccounting for fixed asset taxes
expense recognition
For property tax, city planning tax, depreciable asset tax, etc. on real estate, etc. owned,
the accounting is that, of the tax amount assessed and determined, the amountcorresponding to the concerned accounting period is expensed as expenses related to rent
business.
In connection with the acquisition of real estate including trust beneficiary interests in realestate, the amount equivalent to property tax, etc. for the initial fiscal year, which wassettled with the seller, is not recorded as expenses but included in the cost of acquisition of
the concerned real estate, etc. The amount equivalent to property tax, etc. included in thecost of acquisition of real estate, etc. was 2,893 thousand yen for the previous fiscal period
and none for the current fiscal period.
4. Method of hedge accounting(1) Hedge accounting approach
Deferred hedge accounting. Special treatment is applied for interest rate swap
transactions that satisfy the requirements for special treatment.
(2) Hedging instruments and hedge items
Hedging method: Interest rate swap transaction
Hedge items: Interest on loans(3) Hedging policy
HCM conducts interest rate swap transactions for hedging risks provided in its Articles
of Incorporation, pursuant to the risk management basic policy.
(4) Method of assessing hedge effectivenessHedge effectiveness is assessed by comparing the cumulative fluctuation of cash flows
for hedging instruments and the cumulative fluctuation of cash flows for hedge items
and confirming the ratio of both fluctuations. However, the assessment of hedge
effectiveness for interest rate swap transactions that satisfy the requirements for
special treatment is omitted.
5. Cash and cash equivalents as
Cash and cash equivalents in the statement of cash flows comprise cash on hand and cash
stated in the statement of cash in trust, demand deposits and deposits in trust, and short-term investments with a maturity
flowsof three months or less from the date of acquisition that are readily convertible to cash andthat are subject to an insignificant risk of changes in value.

- 20 -

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.
6.

Other significant mattersserving as the basis for
preparation of financial
statements(1) Accounting for trust beneficiary interests in real estate, etc.
Concerning trust beneficiary interests in real estate, etc. owned, all accounts of assets
and liabilities within trust assets as well as all accounts of revenue and expenses fromthe trust assets are recognized in the relevant account item of the balance sheet andthe statement of income.
The following material items of the trust assets recognized in the relevant accountitem are separately listed on the balance sheet.
① Cash and deposits in trust② Buildings in trust; structures in trust; machine and device in trust; tools, furnitureand fixtures in trust; land in trust③ Tenant leasehold and security deposits in trust(2) Accounting for consumption taxes
Consumption tax and local consumption tax are excluded from transaction amounts.
Non-deductible consumption taxes on acquisition of assets is included in the cost of
acquisition of each asset.

[Additional Information][Notes on Reserve and Reversal of Reserve for Temporary Difference Adjustments]
Previous fiscal period (from February 1, 2020, to July 31, 2020)
1. Reasons, related assets and amounts of reserve
Due to arising of deferred losses on hedges (net asset deduction items) by statement of cash distributions from assessment offair value of interest rate swap transactions to which hedge accounting is applied, 7,153 thousand yen of reserve fortemporary difference adjustments is recorded.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of reserve for temporary difference
adjustments will be reversed
Current fiscal period (from August 1, 2020, to January 31, 2021)
1. Reasons, related assets and amounts of reserve
Due to arising of deferred losses on hedges (net asset deduction items) by statement of cash distributions from assessment offair value of interest rate swap transactions to which hedge accounting is applied, 14,306 thousand yen of reserve fortemporary difference adjustments is recorded.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of reserve for temporary difference
adjustments will be reversed- 21 -

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.
(8) Notes on Financial Statements[Notes on Balance Sheet]*1 Reduction entry amount of property, plant and equipment received as governmental subsidy, etc.
(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2020)
Buildings in trust

Current fiscal period(As of Jan. 31, 2021)

10,041

10,041*2 Minimum net assets as provided in Article 67, Paragraph 4 of the Investment Trusts Act(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2020)

Current fiscal period(As of Jan. 31, 2021)

50,00050,000*3 Reserve for temporary difference adjustments
Previous fiscal period (from February 1, 2020, to July 31, 2020)
Reasons, related assets and amounts of reserve

Related assets, etc.

ReasonDeferred gains or losses Valuation loss on
on hedges

interest rate swap
Total

Initialamount(Unit: thousands of yen)
Balance at Reserved Reversed Balance at
beginning amount in amount in
end ofReason forof current
current
current
current
reversal
periodperiodperiodperiod25,68337,501

2,488―

39,989―25,68337,501

2,488―

39,989―

Method of reversal(1) Deferred gains or losses on hedges
Reversal is planned to be made in accordance with the change in fair value of derivative transactions, which are hedge
instruments.
Current fiscal period (from August 1, 2020, to January 31, 2021)
1. Reasons, related assets and amounts of reserve

Related assets, etc.

ReasonDeferred gains or losses Valuation loss on
on hedges
interest rate swap
Total

Initialamount(Unit: thousands of yen)
Balance at Reserved Reversed Balance at
beginning amount in amount in
end ofReason forof current
current
current
current
reversal
periodperiodperiodperiod25,68339,9897,153―

47,142―

25,68339,9897,153―

47,142―

Method of reversal(1) Deferred gains or losses on hedges
Reversal is planned to be made in accordance with the change in fair value of derivative transactions, which are hedge
instruments.

- 22 -

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.
[Notes on Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020
A.

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

Operating revenue from real estateleasing
Revenue related to rent business
Rent revenue
Other revenue related to rent business
Other revenue
Total operating revenue from real estateleasingB.

2,015,035

2,047,415

8,783

10,9542,023,819

2,058,370

Operating expenses from real estateleasing

Expenses related to rent business
Property tax

139,701

139,689

Outsourcing expenses
Repair expenses

27,85012,141

28,442
20,182

Insurance expenses
Depreciation

7,495
450,881

8,502
467,542

Other expenses related to rent business

14,341

14,506

Total operating expenses from real estateleasing

652,411

678,866

1,371,407

1,379,503

C.

Operating income (loss) from realestate leasing [A-B][Notes on Statement of Unitholders’ Equity]*1 Total number of investment units authorized and total number of investment units issued and outstanding
Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020
Total number of investment units
authorized
Total number of investment units
issued and outstanding

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

10,000,000 units

10,000,000 units

311,001 units

311,001 units- 23 -

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.
[Notes on Statement of Cash Flows]*1 Reconciliation of cash and cash equivalents at end of period to the amount of balance sheet items(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020
Cash and deposits
Cash and deposits in trust
Restricted deposits in trust (Note)
Cash and cash equivalents

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

1,624,242
145,223

1,792,280
180,725(77,662)(86,766)

1,691,803

1,886,239(Note) Restricted deposits in trust refer to deposits in trust reserved for such purposes as refund of leasehold received from tenants.

[Notes on Operating Leases Transactions]Non-cancellable operating leases (as lessor)(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2020

Current fiscal period
As of Jan. 31, 2021

Not later than 1 year
Later than 1 year

3,216,135
13,278,550

3,198,306
11,682,320

Total

16,494,686

14,880,627[Notes on Financial Instruments]
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
Pursuant to the policy of conducting stable and sound financial management, HCM raises funds for such purposes asasset acquisition and repayment of loans by means of loans from banks, issuance of investment corporation bonds orissuance of new investment units, etc. As to finance by loans and issuance of investment corporation bonds, HCM pays
attention to extending periods, fixing interest rates, diversifying repayment dates and such to secure financial stability
and avoid the risk of rise in interest rates in the future.
Derivative transactions shall be limited to those invested for the purpose of hedging the risk of fluctuations in interest
rates on HCM’s loans.
(2) Description of financial instruments and associated risks, and risk management system
Loans and proceeds from issuance of investment corporation bonds are used primarily for acquisition of trust
beneficiary interests in real estate and repayment of debts.
Although loans and investment corporation bonds are exposed to liquidity risks on the repayment or redemption date,the impact of rise in the market interest rate on the management of HCM is limited through appropriate managementof the ratio of interest-bearing liabilities, and such risks are controlled through diversification of repayment andredemption dates.
Although loans with floating interest rates are exposed to interest rate fluctuation risks, the ratios of loan balanceswith floating rates and fixed rates against the entire loans are adjusted according to the financing environment.
Furthermore, derivative transactions (interest rate swap transactions) have been used for part of loans with floating
rates to avoid interest fluctuation risks and to fix interest payment. Execution/management of derivative transactions
carried out for the purpose of hedging interest rate fluctuation risks is conducted pursuant to provisions that stipulate
the basic policy of risk management.
Although tenant leasehold and security deposits as well as tenant leasehold and security deposits in trust are deposits
from tenants and are exposed to liquidity risks at the time of refunding upon tenants’ move-outs, HCM controls
liquidity risks by securing liquidity at hand to a certain degree and other measures.
For deposits, such risks are controlled by setting lower limit to the credit rating of financial institutions at which
deposits are made (excluding deposits for settlement), etc.

- 24 -

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.
(3) Supplementary explanation to matters concerning fair value, etc. of financial instruments
The fair value of financial instruments, aside from values based on market price, includes values based on reasonablecalculation when no market price is available. Certain assumptions are adopted in the calculation of the concernedvalues. Accordingly, there may be cases where the concerned values will differ when different assumptions are
adopted.
2.

Matters concerning fair value, etc. of financial instruments
Carrying amount, fair value and difference between the two were as follows. The financial instruments whose fair values
are deemed extremely difficult to determine are excluded from the table below. (Please refer to (Note 2).)Previous fiscal period (from February 1, 2020, to July 31, 2020)(Unit: thousands of yen)
Carrying amount(1) Cash and deposits

Fair value

Amount of difference

1,624,242

1,624,242―(2) Cash and deposits in trust

145,223

145,223―

Total assets

1,769,465

1,769,465―(3) Short-term loans payable

700,000

700,000―(4) Current portion of long-term loans payable

3,000,000

3,001,457

1,457(5) Investment corporation bonds

2,000,000

1,997,200(2,800)(6) Long-term loans payable

27,450,000

27,465,497

15,49733,150,000

33,164,154

14,154(47,336)(47,336)―

Total liabilities(7) Derivative transactions

Current fiscal period (from August 1, 2020, to January 31, 2021)(Unit: thousands of yen)
Carrying amount(1) Cash and deposits

Fair value

Amount of difference

1,792,280

1,792,280―(2) Cash and deposits in trust

180,725

180,725―

Total assets

1,973,006

1,973,006―(4) Current portion of long-term loans payable

7,000,000

7,008,809

8,809(5) Investment corporation bonds

2,000,000

1,998,800(1,200)(6) Long-term loans payable

24,150,000

24,148,454(1,545)33,150,000

33,156,064

6,064(61,746)(61,746)―

Total liabilities(7) Derivative transactions(Note 1) Method of calculation of the fair value of financial instruments and matters concerning derivative transactions(1) Cash and deposits; (2) Cash and deposits in trust; (3) Short-term loans payable
Because these are settled in a short period of time, the fair value is approximately the same as the book value and thus stated at that bookvalue.
(4) Current portion of long-term loans payable; (6) Long-term loans payable
For those with floating interest rates that reflect market interest rates within a short period of time, the book value is deemed areasonable approximation of the fair value as there are no significant changes in HCM’s credit standing after borrowing; therefore, thebook value is used as the fair value equivalent. Those with fixed interest rates are calculated by discounting the sum of principal andinterest (*) at a reasonable rate estimated for a similar loan that is made corresponding to the remaining period.

- 25 -

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.
(*) For long-term loans with floating interest rate to which special treatment for interest rate swaps is applied (please refer to “Derivative
Transactions” below), the sum of principal and interest under the interest rates after the interest rate swaps are indicated.
(5) Investment corporation bonds
Figures are calculated based on the reference statistics of transactions provided by Japan Securities Dealers Association.
(7) Derivative transactions
Please refer to “Notes on Derivative Transactions” below.
(Note 2) Financial instruments for which estimation of fair value is recognized to be extremely difficult.
(Unit: thousands of yen)
Current fiscal period(As of Jan. 31, 2021)

Previous fiscal period(As of Jul. 31, 2020)

1,805,509
86,766

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust

1,805,509
86,766

Tenant leasehold and security deposits and Tenant leasehold and security deposits in trust are not subject to valuation at fair value, because areasonable estimation of cash flows is recognized to be extremely difficult due to there being no market price and difficulty of calculating the actual
deposit period from when lessees move in to when they move out.
(Note 3) Amount of redemption of monetary claims scheduled to be due after the account closing datePrevious fiscal period (As of July 31, 2020)(Unit: thousands of yen)
Not later than 1 year
Cash and deposits

1,624,242

Cash and deposits in trust

145,223

Total

1,769,465

Current fiscal period (As of January 31, 2021)(Unit: thousands of yen)
Not later than 1 year
Cash and deposits

1,792,280

Cash and deposits in trust

180,725

Total

1,973,006(Note 4) Amount of repayment of loans and other interest-bearing liabilities scheduled to be due after the account closing datePrevious fiscal period (As of July 31, 2020)

Not later than
1 yearLater than 1 year
and not later than
2 years

Later than 2 years
and not later than
3 years

Later than 3 years
and not later than
4 years(Unit: thousands of yen)
Later than 4 years
Later thanand not later than
5 years
5 years

Investment
corporation
bonds

―

―

―

―

―

2,000,000

Short-termloans payable

700,000

―

―

―

―

―

Long-term loans
payable3,000,000

7,000,000

9,250,000

6,750,000

4,450,000

―

Total

3,700,000

7,000,000

9,250,000

6,750,000

4,450,000

2,000,000- 26 -

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.
Current fiscal period (As of January 31, 2021)

Not later than
1 yearLater than 1 year
and not later than
2 years

Later than 2 years
and not later than
3 years

Later than 3 years
and not later than
4 years(Unit: thousands of yen)
Later than 4 years
Later thanand not later than
5 years
5 years

Investment
corporation
bonds

―

―

―

―

―

2,000,000

Short-termloans payable

―

―

―

―

―

―

Long-term loans
payable7,000,000

9,250,000

7,250,000

4,450,000

3,200,000

―

Total

7,000,000

9,250,000

7,250,000

4,450,000

3,200,000

2,000,000[Notes on Securities]
Previous fiscal period (As of July 31, 2020)
Not applicable.
Current fiscal period (As of January 31, 2021)
Not applicable.
[Notes on Derivative Transactions]1.

Derivative transactions to which hedge accounting is not applied
Previous fiscal period (As of July 31, 2020)
Not applicable.
Current fiscal period (As of January 31, 2021)
Not applicable.

2.

Derivative transactions to which hedge accounting is applied
The following table shows the contracted amount or principal amount equivalent or the like set forth in the contract as of
the balance sheet date for each hedge accounting method.
Previous fiscal period (As of July 31, 2020)
Hedge
accounting
approachPrinciple
accounting
methodSpecialtreatment forinterest rate
swaps

Type, etc. of
derivativetransaction
Interest rate swap
transaction
Floating receivable;
fixed payable
Interest rate swap
transaction
Floating receivable;
fixed payable
Total(Note)(Unit: thousands of yen)Contract amount, etc.

Main hedged
item

Due after
one year

Fair value

Calculation method
for the fair value

Long-term loans
payable18,200,000

18,200,000(47,336)

Based on the pricepresented bycorrespondent
financial institutions

Long-term loans
payable1,000,000

1,000,000(Note)―

19,200,000

19,200,000(47,336)―

Since those with special treatment of interest rate swaps are treated integrally with hedged long-term loans payable, the market
values of such are shown as included in the market value in “(6) Long-term loans payable” in “[Notes on Financial Instruments], 2.
Matters concerning fair value, etc. of financial instruments” above.

- 27 -

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.

Current fiscal period (As of January 31, 2021)
Hedge
accounting
approachPrinciple
accounting
methodSpecialtreatment forinterest rate
swaps

Type, etc. of
derivativetransaction
Interest rate swap
transaction
Floating receivable;
fixed payable
Interest rate swap
transaction
Floating receivable;
fixed payable

Contract amount, etc.

Main hedged
item

Due after
one year

Fair value

Calculation method
for the fair value

Long-term loans
payable21,400,000

21,400,000(61,746)

Based on the pricepresented bycorrespondent
financial institutions

Long-term loans
payable1,000,000

1,000,000(Note)―

22,400,000

22,400,000(61,746)―

Total(Note)(Unit: thousands of yen)

Since those with special treatment of interest rate swaps are treated integrally with hedged long-term loans payable, the market
values of such are shown as included in the market value in “(6) Long-term loans payable” in “[Notes on Financial Instruments], 2.
Matters concerning fair value, etc. of financial instruments” above.

[Notes on Retirement Benefits]
Previous fiscal period (As of July 31, 2020)
Not applicable.
Current fiscal period (As of January 31, 2021)
Not applicable.
[Notes on Tax-Effect Accounting]
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2020

Current fiscal period
As of Jan. 31, 2021

Deferred tax assets
Non-deductible accrued enterprise tax
Deferred gains or losses on hedges

17

14

14,891

19,425

Subtotal deferred tax assets

14,90919,439Valuation allowance(14,891)(19,425)

17

14

17

14

Total deferred tax assets
Net deferred tax assets (liabilities)
2.

Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate after application of tax-effect accounting(unit:%)
Previous fiscal period
As of Jul. 31, 2020

Current fiscal period
As of Jan. 31, 2021

31.46

31.46

(31.42)0.06(31.43)
0.07

0.10

0.10

Statutory tax rate
[Adjustments]
Deductible distributions payable
Other
Effective income tax rate after application of taxeffect accounting- 28 -

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.
[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method, Etc.]
Previous fiscal period (As of July 31, 2020)
Not applicable.
Current fiscal period (As of January 31, 2021)
Not applicable.
[Notes on Related-Party Transactions]
1. Parent company, major corporate unitholder, etc.
Previous fiscal period (from February 1, 2020, to July 31, 2020)
Not applicable.
Current fiscal period (from August 1, 2020, to January 31, 2021)
Not applicable.
2.

Affiliated company, etc.
Previous fiscal period (from February 1, 2020, to July 31, 2020)
Not applicable.
Current fiscal period (from August 1, 2020, to January 31, 2021)
Not applicable.

3.

Fellow subsidiary, etc.
Previous fiscal period (from February 1, 2020, to July 31, 2020)
Not applicable.
Current fiscal period (from August 1, 2020, to January 31, 2021)
Not applicable.

- 29 -

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.
4.

Director, major individual unitholder, etc.
Previous fiscal period (from February 1, 2020, to July 31, 2020)

Capital stockorName of
Description of
investments
Classification entity or Location
business orin capital
personoccupation(thousandyen)

Director, or
close
relative of
director

Seiji
Yoshioka――

Executive
Director of
HCM andPresident &CEO of the
Asset
Management
Company

Percentage
Relationshipof votingTransaction
Concurrent
rights, etc.
Description ofamountholding ofBusiness
held by (in)transaction(thousanddirector’s relationshipHCM
yen)position, etc.
(%)

0.0

Payment of
asset
Executive Director of HCM
management
and President & CEO of
fee to thethe Asset Management
Asset
Company
Management
Company

204,402(Note)

Balance at
end ofAccount
perioditem(thousandyen)

Accruedexpenses

216,625

Of the amounts above, the transaction amount does not include consumption taxes.
(Note)

Terms and conditions of transactions and decision-making approach to such, etc.
1. Terms and conditions of transactions are decided taking into account the actual market value.
2. The transaction is one that was conducted by Seiji Yoshioka as President and CEO of a third party (Healthcare Asset Management Co.,
Ltd.), and the amount of the asset management fee is based on the terms and conditions provided in the Articles of Incorporation of
HCM.

Current fiscal period (August 1, 2020, to January 31, 2021)
Capital stockorName of
Description of
investments
Classification entity or Location
business orin capital
personoccupation(thousandyen)
Executive
Director of
HCM andDirector, or
Seiji
President &close
Yoshioka――
CEO of therelative of(Note 1)
Asset
director
Management
Company(Note 1)

Percentage
Relationshipof votingTransaction
Concurrent
rights, etc.
Description ofamountholding ofBusiness
held by (in)transaction(thousanddirector’s relationshipHCM
yen)position, etc.
(%)

Account
item

Balance at
end ofperiod(thousandyen)

Payment of
asset
Executive Director of HCM
management
and President & CEO of
fee to thethe Asset Management
Asset
Company (Note 1)
Management
Company

Accruedexpenses―(Note 3)0.0

200,051(Note 2)Of the amounts above, the transaction amount does not include consumption taxes.
(Note 1) Seiji Yoshioka retired from the executive director of HCM on October 31, 2020.
(Note 2) Terms and conditions of transactions and decision-making approach to such, etc.
1. Terms and conditions of transactions are decided taking into account the actual market value.
2. The transaction is one that was conducted by Seiji Yoshioka as President and CEO of a third party (Healthcare Asset Management Co.,
Ltd.), and the amount of the asset management fee is based on the terms and conditions provided in the Articles of Incorporation of
HCM.
(Note 3) The asset management company is not Related-Party because Seiji Yoshioka retired from the executive director of HCM on October 31,
2020. Therefore, Balance of accrued expenses at end of period is not disclosed.

[Notes on Asset Retirement Obligations]
Previous fiscal period (As of July 31, 2020)
Not applicable.
Current fiscal period (As of January 31, 2021)
Not applicable.

- 30 -

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.
[Notes on Investment and Rental Properties]
HCM owns healthcare facilities (36 properties in total) primarily in the Three Major Metropolitan Areas and Core Cities. The
carrying amount, amount of increase (decrease) during the period and fair value of these investment and rental properties are
as follows:(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

Carrying amount
Balance at beginning of
periodAmount of increase(decrease) during period
Balance at end of period
Fair value at end of period

65,511,620

66,696,041

1,184,420(272,978)66,696,041

66,423,062

71,862,000

71,518,000(Note 1) “Carrying amount” is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Out of the amount of increase (decrease) during the previous fiscal period, the amount of increase is mainly attributable to acquisitions(1,552,760 thousand yen), comprising property acquisition of Sunny Life Kamakura and acquisition of land of Verde Hotaka, and theamount of decrease is mainly attributable to depreciation (450,881 thousand yen). Out of the amount of increase (decrease) during thecurrent fiscal period, the amount of decrease is mainly attributable to depreciation (467,542 thousand yen).
(Note 3) “Fair value at end of period” is the appraisal value or survey value by an outside real estate appraiser.

The income (loss) concerning investment and rental properties is as stated in “Notes on Statement of Income” earlier in thisdocument.
[Notes on Segment Information]
1.

Segment information
Segment information is omitted because HCM operates a single segment, which is the real estate leasing business.

2.

Related information
Previous fiscal period (from February 1, 2020, to July 31, 2020)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas① Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.
② Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers
Information on net sales to a single external customer is omitted because consent has not been obtained from thetenant.

- 31 -

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.
Current fiscal period (from August 1, 2020, to January 31, 2021)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas① Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.
② Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers
Information on net sales to a single external customer is omitted because consent has not been obtained from thetenant.
[Notes on Per Unit Information]
Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

Net assets per unit

106,472 yen

106,111 yen

Net income per unit

2,951 yen

2,926 yen

(Note 1) Net income per unit is calculated by dividing net income by the average number of investment units during the period (the daily weighted
average number of investment units). In addition, diluted net income per unit is not stated because there are no diluted investment units.
(Note 2) The following is the basis for calculation of net income per unit.

Net income (thousands of yen)Amount not attributable to common unitholders (thousands of yen)
Net income attributable to common investment units(thousands of yen)
Average number of investment units during period (units)[Notes on Significant Subsequent Events]
Not applicable.

- 32 -

Previous fiscal period
From: Feb. 1, 2020
To: Jul. 31, 2020

Current fiscal period
From: Aug. 1, 2020
To: Jan. 31, 2021

917,935

910,053――

917,935

910,053

311,001

311,001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.
(9) Changes in Total Number of Investment Units Issued and Outstanding
The following are changes in total number of investment units issued and outstanding and unitholders’ capital over the mostrecent five years up to the end of the current fiscal period.

Date

Description

Total number of investment
units issued and outstanding(units)ChangeFebruary 1, 2017

March 1, 2017

February 1, 2019

February 27, 2019
April 19, 2019

Capital increase
through public
offering
Capital increase
through third-party
allotment
Capital increase
through public
offering
Capital increase
through third-party
allotment
Distribution inexcess of earnings

BalanceUnitholders’ capital(millions of yen)

Unitholders' capital, net(millions of yen) (Note 1)

ChangeChangeBalance

Remarks

Balance69,150189,650

6,749

19,463

6,749

19,463(Note 2)

3,457

193,107337

19,800337

19,800(Note 3)112,280

305,387

12,07631,876

12,07631,876(Note 4)

5,614

311,001603

32,480603

32,480(Note 5)－

311,001－

32,480(62)

32,417(Note 6)

October 18, 2019

Distribution inexcess of earnings－

311,001－

32,480(87)

32,330(Note 7)

April 21, 2020

Distribution inexcess of earnings－

311,001－

32,480(88)

32,242(Note 8)October 21, 2020

Distribution inexcess of earnings－

311,001－

32,480(89)

32,152(Note 9)(Note 1) The figure indicates the amount obtained by subtracting deduction from unitholders’ capital from unitholders’ capital. The amount does nottake into account the change in unitholders’ capital in line with the implementation of distribution in excess of earnings of reserve fortemporary difference adjustments.
(Note 2) New investment units were issued through public offering with issue price of 101,244 yen (paid-in amount of 97,609 yen) per unit.
(Note 3) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 97,609 yen per unit.
(Note 4) New investment units were issued through public offering with issue price of 111,442 yen (paid-in amount of 107,555 yen) per unit.
(Note 5) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 107,555 yen per unit.
(Note 6) HCM resolved at the board of directors’ meeting held on March 15, 2019, to set cash distribution in excess of earnings (return of capital that
falls under the category of distribution reducing unitholders’ capital for tax purposes) at 326 yen per unit as cash distribution for the 8th
fiscal period (fiscal period ended January 2019), and started the payout on April 19, 2019.
(Note 7) HCM resolved at the board of directors’ meeting held on September 13, 2019, to set cash distribution in excess of earnings (return of capitalthat falls under the category of distribution reducing unitholders’ capital for tax purposes) at 280 yen per unit as cash distribution for the
9th fiscal period (fiscal period ended July 2019), and started the payout on October 18, 2019.
(Note 8) HCM resolved at the board of directors’ meeting held on March 17, 2020, to set cash distribution in excess of earnings (return of capital that
falls under the category of distribution reducing unitholders’ capital for tax purposes) at 285 yen per unit as cash distribution for the 10th
fiscal period (fiscal period ended January 2020), and started the payout on April 21, 2020.
(Note 9) HCM resolved at the board of directors’ meeting held on September 15, 2020, to set cash distribution in excess of earnings (return of capitalthat falls under the category of distribution reducing unitholders’ capital for tax purposes) at 289 yen per unit as cash distribution for the
11th fiscal period (fiscal period ended July 2020), and started the payout on October 21, 2020.

- 33 -

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.

3.

Reference Information(1) Information on Prices of Assets Under Management, Etc.
① Investment Status
Current fiscal period(as of January 31, 2021)
Asset type

Total amount owned(millions of yen)
(Note 1)

As a percentage of total
assetsThree Major
Metropolitan Areas(Note 3)41,447

60.3

Core Cities (Note 4)

5,122

7.4

Other Areas (Note 5)

1,732

2.5

Three Major
Metropolitan Areas(Note 3)

3,040

4.4

Core Cities (Note 4)－－

Other Areas (Note 5)

－

－

－

－

－

－

Asset use

Trust beneficiary Homes andinterests in realfacilities for theestateelderly

Area

Paid nursing
homeServicedhousing for theelderly

Group homes for the elderly withdementia
Other facilities for the elderly
Subtotal(%)(Note 2)

51,342

74.7

Three Major
Metropolitan Areas(Note 3)－－

Core Cities (Note 4)

2,074

3.0

Other Areas (Note 5)－－

Subtotal

2,074

3.0

Three Major
Metropolitan Areas(Note 3)13,005

18.9

Core Cities (Note 4)－－

Other Areas (Note 5)－－

13,00518.9－－

66,423

96.6

Deposits and other assets

2,350

3.4

Total assets

68,773100.0

Total liabilities

35,772

52.0

Total net assets

33,00048.0

Medical service-related facilities,
etc.

Multi-use
facilities

Complex of
paid nursing
homes,medical
service related
facilities,etc.

Subtotal
Other
Total

(Note 1) “Total amount owned” is the carrying amount (in the case of trust beneficiary interests in real estate, the book value after depreciation andamortization).
(Note 2) Figures in “As a percentage of total assets” are rounded to one decimal place.
(Note 3) “Three Major Metropolitan Areas” refers to Tokyo Metropolitan Area (Tokyo, Kanagawa, Saitama, Chiba Prefectures), Kinki Areas (Osaka,
Kyoto, Hyogo Prefectures) and Chubu Area (Aichi Prefecture).
(Note 4) “Core Cities” refers to designated cities, prefectural capitals and regional core cities other than Three Metropolitan Areas. Regional core cities
refer to cities with a population of 200,000 or more.
(Note 5) “Other Areas” refers to areas other than Three Metropolitan Areas and Core Cities.

- 34 -

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.
② Investment Assets(a) Major Investment Securities
Not applicable.
(b) Investment Real Estate Properties
Not applicable.
(c) Other Major Investment Assets
a. Overview of Real Estate in Trust
Overview of trust beneficiary interests in real estate (hereinafter, “real estate in trust”) that HCM owns as of January 31,
2021, is as follows.
(i) Acquisition prices, etc. and shares of investment
Overview of real estate in trust for the trust beneficiary interests that HCM owns as of January 31, 2021, is asfollows.
Type ofspecified
asset

Area

Property nameAcquisition price(millions of yen)
(Note 1)

Bonsejour Chitose-funabashi

816

974

Bonsejour Hino

724

1.1

716

818

Bonsejour Musashi-shinjo

582

0.9

576

643

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

728

1.1

706

850

ASHEIM Hikarigaoka

1,385

2.1

1,404

1,490

ASHEIM Bunkyohakusan

1,430

2.2

1,418

1,650

3,580

5.4

3,452

3,780

3,050

4.6

3,034

3,230

1,740

2.6

1,862

1,950

Bonsejour Yotsugi

824

1.2

822

886

Granda Tsuruma-Yamato

1,000

1.5

1,045

1,060

Smiling Home Medice Adachi

2,253

3.4

2,319

2,460

Hanakotoba Minami

1,071

1.6

1,093

1,180

Hanakotoba Miura

615

0.9

648

663

SOMPO CARE La vie Re HamaKawasaki

1,710

2.6

1,734

1,820

Hanakotoba Shin-Yokohama

2,071

3.1

2,130

2,230

Hanakotoba Shin-Yokohama II

375

0.6

382

377

Hanakotoba Odawara

880

1.3

905

946

1,825

2.8

1,867

1,950

Sunny Life Kita-Shinagawa
Sunny Life Kamakura

1,418

2.1

1,500

1,550

Subtotal

28,08542.3

28,43830,507

1,950

2.9

1,930

2,060

1,930

2.9

1,870

2,170

1,200

1.8

1,170

1,340

Medical Home Bonsejour
Itami

514

0.8

505

557

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

4,320

6.5

4,235

4,410

GreenLife Moriguchi

4,150

6.3

4,162

4,400

930

1.4

931

974

SHIP Senri Building

12,92019.5

13,005

14,100Subtotal

27,91442.1

27,81130,011

AQUAMARINE
Nishinomiyahama
SOMPO CARE Sompo no ie
Awajiekimae
SOMPO CARE Sompo no ie
Kobekamisawa

Kinki Area

Period-end
appraisal value(millions of yen)
(Note 4)

1.2

GOOD TIME HOME Fudo-mae

Trustbeneficiaryinterests inreal estate

Carrying amount(millions of yen)
(Note 3)824

SOMPO CARE La vie Re
Machidaonoji
SOMPO CARE La vie Re
AzaminoTokyo
Metropolitan
Area

Share ofinvestment(%)(Note 2)

Hapine Kobe Uozaki Nibankan- 35 -

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.

Medical Rehabilitation Home
Chubu Area

Core Cities

1.9

1,242

1,450

1,270

1.9

1,242

1,450

SAWAYAKA Tachibanakan

1,520

2.3

1,389

1,530

SAWAYAKA Mekarikan

1,380

2.1

1,272

1,400

770

1.2

776

861

Verde Minowa

1,620

2.4

1,683

1,690

Niigata Rehabilitation Hospital

2,060

3.1

2,074

2,260

Subtotal

7,350

11.1

7,197

7,741

390

0.6

374

379

1,328

2.0

1,358

1,430

SubtotalTrustbeneficiaryinterests inreal estate

1,270

Bonsejour Komaki

AIKOEN ICHIBANKAN Building

SAWAYAKA Tagawakan
Other Areas

Verde Hotaka
Subtotal

1,718

2.6

1,732

1,809

66,337100.0

66,42371,518

Total (36 properties)(Note 1) “Acquisition price” does not include acquisition-related expenses, property tax, city planning tax, consumption tax and local
consumption tax.
(Note 2) “Share of investment” refers to the acquisition price of each property as a percentage of the total acquisition price, and the figures arerounded to one decimal place.
(Note 3) “Carrying amount” indicates book value after depreciation and amortization as of January 31, 2021.
(Note 4) “Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2021, prepared by realestate appraisers of Japan Real Estate Institute, The Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd., Daiwa Real
Estate Appraisal Co., Ltd. and JLL Morii Valuation & Advisory K.K., based on the Articles of Incorporation of HCM and the rules set by
the Investment Trusts Association, Japan.

- 36 -

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.
(ii) Buildings and leasing status
The annual rent and tenant leasehold and security deposits of each property are not disclosed as consent from thetenants has not been obtained. The total annual rent from real estate in trust owned by HCM as of January 31, 2021, is
4,188 million yen (Note).
(Note) The amount is obtained by multiplying total of monthly rent in lease agreements effective as of January 31, 2021, by 12 (including
tax, etc.), and is rounded down to the nearest million yen.
Structure/ No. of
leasable area
Property
Construction
floors(m2)
namecompletion (Note 2)(Note 1)
(Note 3)
Paid nursing AQUAMARINE
RC/5F
May 18, 2007
5,274.54
home-1
Nishinomiyahama
Paid nursing Bonsejour ChitoseRC/B1 6F
Mar. 8, 1988
2,342.17
home-2
funabashi
Paid nursing
Bonsejour Hino
RC/3F
May 2, 1990
1,984.17
home-3
Paid nursing Bonsejour
RC/4F
Feb. 21, 1985
1,710.43
home-4
Musashi-shinjo
MedicalPaid nursing Rehabilitation
RC/5F
Jul. 17, 1991
3,435.79
home-5Home Bonsejour
Hadanoshibusawa
MedicalPaid nursing Rehabilitation
SRC RC S/10F
Mar. 13, 1991
8,858.49
home-6
Home Bonsejour
Komaki
Paid nursing ASHEIM
RC/3F
Mar. 6, 2006
3,628.60
home-7
Hikarigaoka
Paid nursing ASHEIM
RC/8F
Feb. 27, 2007
2,507.25
home-8
Bunkyohakusan
SOMPO CARE La
Paid nursingvie ReRC/B1 6F
Oct. 29, 2007
7,720.17
home-9Machidaonoji
Paid nursing SOMPO CARE La
RC/B1 5F
Mar. 1, 2004
5,789.25
home-10vie Re Azamino
Paid nursing SAWAYAKA
RC/B1 6F
Oct. 31, 2005
5,652.94
home-11
Tachibanakan
Paid nursing SAWAYAKA
RC/4F
Nov. 15, 2005
4,720.46
home-12
Mekarikan
Paid nursing SAWAYAKA
RC/3F
Jan. 20, 2006
2,366.20
home-13
Tagawakan
Paid nursing GOOD TIME HOME
RC/B1 5F
Mar. 18, 1992
3,400.20
home-14
Fudo-mae
Paid nursing
Bonsejour Yotsugi
RC/5F
Mar. 28, 1989
1,962.89
home-15
SRC/11F
Paid nursing Medical Home
(exclusivelyMar. 3, 1989
2,129.87
home-16
Bonsejour Itami
owned portion)
Kobe Gakuentoshi
Paid nursing
Building (Hapine
RC/B1 9F
Jan. 7, 2009
12,636.48
home-17
Kobe Gakuentoshi)
Paid nursing GreenLife
S RC/9F
Sep. 6, 2006
8,356.85
home-18
Moriguchi
Paid nursing Hapine Kobe
S/B1 4F
Mar. 31, 2010
1,772.89
home-19
Uozaki Nibankan
Paid nursing Granda TsurumaRC S/5F
Mar. 6, 1998
3,427.08
home-20
YamatoPaid nursing Smiling Home
RC/4F
Nov. 16, 2005
3,870.98
home-21
Medice Adachi
AIKOEN
Paid nursing
ICHIBANKAN
S/5F
Feb. 4, 2010
4,311.20
home-22
Building
Paid nursing Hanakotoba
RC/7F
Feb. 24, 2010
1,710.68
home-23
Minami
Paid nursing
Hanakotoba Miura
RC/4F
Jun. 27, 2007
1,959.64
home-24
SOMPO CARE La
RC/4F
Paid nursingvie Re Hama(exclusivelyMar. 8, 2007
4,060.21
home-25
Kawasakiowned portion)
Paid nursing Hanakotoba ShinRC/9F
Mar. 15, 2004
5,230.23
home-26
Yokohama
Paid nursing Hanakotoba ShinRC/B1 7F
Apr. 25, 2007
1,837.29
home-27
Yokohama II
Paid nursing Hanakotoba
RC/4F
Sep. 16, 2009
2,203.42
home-28
OdawaraPaid nursing①S/5F①Nov. 20, 2003
Verde Minowa
11,098.17
home-29②S RC/8F②Feb. 28, 1974
Property
number- 37 -

Leased area(m2)
(Note 4)

No. of tenants Operational rate(companies)(%)(Note 5)(Note 6)

5,274.542

100.0

2,342.171

100.0

1,984.171

100.0

1,710.431

100.0

3,435.791

100.0

8,858.491

100.0

3,628.601

100.0

2,507.252

100.0

7,720.171

100.0

5,789.25

1

100.0

5,652.941

100.0

4,720.461

100.0

2,366.201100.0

3,400.20

1

100.0

1,962.891

100.0

2,129.87

1

100.0

12,636.48

1

100.0

8,356.851

100.0

1,772.891

100.0

3,427.081

100.0

3,870.982

100.0

4,311.20

4100.0

1,710.68

1

100.0

1,959.641

100.0

4,060.215

100.0

5,230.231

100.0

1,837.291

100.0

2,203.42

1

100.0

11,098.17

1

100.0

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.
Property
number

Property
namePaid nursing
home-30
Paid nursing
home-31
Paid nursing
home-32

Verde Hotaka

Structure/ No. of
leasable area
Construction
floors(m2)
completion (Note 2)(Note 1)
(Note 3)
①S SRC/5F②S/2F

Sunny Life KitaS/3F
Shinagawa
Sunny Life
S/5F
Kamakura
SOMPO CARE
Serviced housing
Sompo no ie
RC/12Ffor the elderly -1
Awajiekimae
SOMPO CARE
Serviced housing
Sompo no ie
S/9F
for the elderly -2
Kobekamisawa
Medical service- Niigata①RC/3F
related facilities- Rehabilitation②S/5F
1
HospitalComplex of paid
nursinghomes,medical SHIP Senri Building
RC/B1 11F
service related
facilities,etc.-1
Total―(Note 1)

(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)

Leased area(m2)
(Note 4)

No. of tenants Operational rate(companies)(%)(Note 5)(Note 6)

①Sep. 29, 1982
②Jul. 1, 1989

6,352.86

6,352.861

100.0

Sep. 20, 2018

2,135.54

2,135.541

100.0

Sep. 19, 2014

3,817.91

3,817.91

1

100.0

Jun. 12, 2009

5,745.15

5,745.15

1

100.0

Jun. 11, 2009

4,058.35

4,058.35

1

100.0

13,476.55

13,476.55

1

100.0

Sep. 5, 2008

24,813.85

24,813.85

1

100.0

―

186,358.75

186,358.75

46

100.0

①Apr. 20, 1990
②Feb. 28, 2001

“Structure/ No. of floors” indicates information provided in the real estate registry of the building of each owned asset. “S”
refers to steel structure, “RC” refers to reinforced concrete structure, “SRC” refers to steel-reinforced concrete structure, “B”
refers to basement floor and “F” refers to floors above ground.
“Construction completion” indicates the date of new construction provided in the real estate registry of the building of each
owned asset.
“Leasable area” indicates figures based on the lease agreement of each building.
“Leased area” indicates the areas out of the leasable area for which actual lease agreements have been concluded and areleased.
“No. of tenants” indicates the number of tenants of each building based on the lease agreements. For the section of healthcare
facilities in which the trustee of each owned asset and HCM conclude a lease agreement (master lease agreement) with an aim
to have HCM sublease to the master lease company (section of paid nursing home for Smiling Home Medice Adachi), the master
lease company (operator) is counted as a tenant, and accordingly indicated as the number of tenants; while for the properties
subject to pass-through-type master lease agreement where rents from end tenants are received intact, in principle, the total
number of end tenants is indicated as the number of tenants. However, for the sections that are not subject to the leaseagreement (master lease agreement) between the trustee and HCM, the number of lessees leasing a building from the trustee iscounted as the number of tenants and indicated accordingly.
”Operational rate” indicates the leased area as a percentage of the leasable area of each owned asset as of January 31, 2021,
and is rounded to one decimal place.

- 38 -

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.
(iii) Overview of Homes and Facilities for the Elderly

Property number

Property namePaid nursing
home-1
Paid nursing
home-2
Paid nursing
home-3
Paid nursing
home-4AQUAMARINE
Nishinomiyahama
Bonsejour
Chitose-funabashi

Paid nursing
home-5

Paid nursing
home-6
Paid nursing
home-7
Paid nursing
home-8Paid nursing
home-9Paid nursing
home-10
Paid nursing
home-11
Paid nursing
home-12Paid nursing
home-13
Paid nursing
home-14
Paid nursing
home-15
Paid nursing
home-16
Paid nursing
home-17
Paid nursing
home-18
Paid nursing
home-19
Paid nursing
home-20
Paid nursing
home-21
Paid nursing
home-22
Paid nursing
home-23
Paid nursing
home-24
Paid nursing
home-25
Paid nursing
home-26
Paid nursing
home-27
Paid nursing
home-28
Paid nursing
home-29

Bonsejour Hino
BonsejourMusashi-shinjo
MedicalRehabilitation
Home Bonsejour
Hadanoshibusawa
MedicalRehabilitation
Home Bonsejour
KomakiASHEIM
Hikarigaoka
ASHEIM
Bunkyohakusan
SOMPO CARE La
vie ReMachidaonoji
SOMPO CARE La
vie Re Azamino
SAWAYAKA
Tachibanakan
SAWAYAKA
Mekarikan
SAWAYAKA
Tagawakan
GOOD TIMEHOME Fudo-mae

Type of facility

Operator

Paid nursing home

GREEN LIFE Co., Ltd.

Paid nursing home
Paid nursing home
Paid nursing home

No. ofrooms(rooms)(Note 1)

Capacity(persons)(Note 1)

No. ofresidents(persons)(Note 1)

Occupancy
rate(%)(Note 2)

Preparation
date of Property
DisclosureStatement ofImportant
Matters(Note 3)

90

100

100

100.0

July 1, 2020

42

47

40

85.1

October 1, 2020

56

58

53

91.4

October 1, 2020

46

49

46

93.9

October 1, 2020

Benesse Style Care Co.,Ltd.
Benesse Style Care Co.,Ltd.
Benesse Style Care Co.,Ltd.

Paid nursing home

Benesse Style Care Co.,
Ltd.

100

101

99

98.0

December 1,
2020

Residential typepaid nursing home

Benesse Style Care Co.,
Ltd.

124

165

126

76.4

October 1, 2020

Paid nursing home

AS PARTNERS Co., Ltd.

83

89

79

88.8

November 1,
2020

Paid nursing home

AS PARTNERS Co., Ltd.

50

52

44

84.6

July 1, 2020

Paid nursing home

Sompo Care Inc.

163

169

113

66.9

October 1, 2020

Paid nursing home

Sompo Care Inc.

145

145

122

84.1

July 1, 2020

Paid nursing home

Sawayaka Club Co., Ltd.

104

104

101

97.1

November 16,
2020

Paid nursing home

Sawayaka Club Co., Ltd.

95

95

93

97.9

October 1, 2020

Paid nursing home

Sawayaka Club Co., Ltd.

60

60

59

98.3

Paid nursing homeJAPAN LIFEDESIGN Inc.

61

67

58

86.6

61

65

62

95.4

October 1, 2020

62

64

61

95.3

October 1, 2020

November 1,
2020
December 1,
2020

Bonsejour Yotsugi

Paid nursing home

Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building (Hapine
Kobe Gakuentoshi)
GreenLife
Moriguchi
Hapine Kobe
Uozaki Nibankan
Granda TsurumaYamato
Smiling Home
Medice Adachi
AIKOENICHIBANKAN
Building
Hanakotoba
Minami

Residential typepaid nursing home

Benesse Style Care Co.,Ltd.
Benesse Style Care Co.,Ltd.

Paid nursing home

GREEN LIFE Co., Ltd.

131

138

137

99.3

July 1, 2020

Paid nursing home

GREEN LIFE Co., Ltd.

155

189

189

100.0

July 1, 2020

Paid nursing home

GREEN LIFE Co., Ltd.

47

47

47

100.0

July 1, 2020

73

70

70

77.8

82

76

76

92.7

90

90

90

100.0

July 1, 2020

Paid nursing home
Paid nursing home

Benesse Style Care Co.,Ltd.
GREEN LIFE HIGASHINIHON Co., Ltd.

Paid nursing home

MedicalAIKOKAI

Paid nursing home

Proud Life Inc.

51

50

50

98.0

July 1, 2020

Hanakotoba Miura Paid nursing home

Proud Life Inc.

53

54

54

100.0

July 1, 2020

Paid nursing home

Sompo Care Inc.

58

51

51

87.9

July 1, 2020

Paid nursing home

Proud Life Inc.

136

129

129

94.9

July 1, 2020

Paid nursing home

Proud Life Inc.

29

28

28

93.3

July 1, 2020

Paid nursing home

Proud Life Inc.

60

64

64

98.5

July 17, 2020

Paid nursing home

Verde Corporation

174

191

191

92.7

July 1, 2020

SOMPO CARE La
vie Re HamaKawasaki
Hanakotoba ShinYokohama
Hanakotoba ShinYokohama II
Hanakotoba
OdawaraVerde Minowa

Corporation

December 1,
2020
November 1,
2020- 39 -

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.
Paid nursing
home-30
Paid nursing
home-31
Paid nursing
home-32
Serviced housing
for the elderly -1
Serviced housing
for the elderly -2

Verde Hotaka
Sunny Life KitaShinagawa
Sunny Life
Kamakura
SOMPO CARE
Sompo no ie
Awajiekimae
SOMPO CARE
Sompo no ie
Kobekamisawa

Complex of paid
nursing
SHIP Senrihomes,medical
Building (Note 4)service related
facilities,etc.-1
Total

Paid nursing home
Paid nursing home
Residential typepaid nursing home

Verde Corporation
Kawashima
Corporation
Kawashima
Corporation

121

174

172

98.9

July 1, 2020

66

66

65

98.5

October 1, 2020

128

128

125

97.7

July 1,2020

Serviced housing
for the elderly

Sompo Care Inc.

137

137

129

94.2

September 1,
2020

Serviced housing
for the elderly

Sompo Care Inc.

85

85

70

82.4

September 1,
2020

Hospital, paid
nursing home withnursing home

GREEN LIFE Co., Ltd.

181

200

200

100.0

July 1, 2020

-

-

3,199

3,456

3,193

92.4

-

(Note 1) “No. of rooms,” “Capacity” and “No. of residents” indicate figures based on figures stated in Property Disclosure Statement of Important Matters(hereinafter the “Property Disclosure Statement of Important Matters”) of the paid nursing home provided by the operators.
(Note 2) “Occupancy rate” indicates the occupancy rate obtained by dividing the number of residents by capacity, rounded to one decimal place.
(Note 3) “Preparation date of Property Disclosure Statement of Important Matters” indicates the date of application, reference date or preparation datestated on the document.
(Note 4) SHIP Senri Building is a property with a hospital and paid nursing home, and the above table indicates figures for the paid nursing home.

- 40 -

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.
(iv) Overview of Medical Service-Related Facilities, etc.
Property
Medical service-related facilities-1
number
Property name

Niigata Rehabilitation Hospital

Operator

Medical Corporation AIKOKAI

Type of facility

Hospital

Subject of
medicaltreatment

Rehabilitation, orthopedic surgery,internal medicine, neurology, dental &dental and oral surgery

Facility criteria(Hospitalization
fee)

External
evaluation

Date ofestablishment

June 1990(established as Oyama Hospital, the precursor)

Authorized number 168 beds (general beds: 108 beds/convalescentof beds
stage beds: 60 beds)
Facility certification

Training facilities certified by the Japanese
Association of Rehabilitation Medicine

2nd floor (48 beds) Hospitalization fee of hospital ward for comprehensive community care 1
3rd floor (60 beds) Basic hospitalization fee for general hospital ward (acute hospitalization fee 7)
Medical management fee for comprehensive community care 1
4th floor (60 beds) Hospitalization fee of hospital ward for rehabilitation at recovery stage 1
Hospital certified by Japan Council for Quality Health Care. (Certification number: JC1424-3) 3rdG:Ver.1.1
Added function Rehabilitation function (Certification number: JC1424-R2) Ver.3.0

Property
numberComplex of paid nursing homes,medical service related facilities,etc.-1

Property nameSHIP Senri Building (Senri-Chuo Hospital) (Note)

Operator

Medical Corporation Kyowakai

Type of facility

Hospital

Subject of
medicaltreatment

Facility criteria(Hospitalization
fee)

Date ofestablishment
Authorized numberof beds

October 2008
400 beds (400 general beds)

Rehabilitation, orthopedics,
Training facilities certified by the Japaneseneurosurgery, surgery, internal medicine Facility certification
Association of Rehabilitation Medicine
and neurology
West 6th floor (25 beds) Palliative care hospital ward
East 6th floor (25 beds) Facilities for the disabled,
hospitalization fee 2
etc. 2 10:1 Basic hospitalization fee
West 5th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

East 5th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

West 4th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

East 4th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

West 3rd floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

East 3rd floor (50 beds) Recovery phaserehabilitation ward hospitalization fee 1

West 2nd floor (50 beds) Recovery phaserehabilitation ward hospitalization fee 1
External
evaluation―(Note) SHIP Senri Building is a property with a hospital and paid nursing home, and the above table describes facility overview for the hospital.

- 41 -

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.
(v) Earnings Performance(Unit: thousands of yen)
Current fiscal period (from August 1, 2020, to January 31, 2021)
Property nameReal estate lease business revenue
Rent
revenue

Real estate lease business expenses

Otherrevenue

Property Outsourcing Repair
Insurance
Depreciation Othertax
expenses expenses expenses

NOI(Note 3)

AQUAMARINE
Nishinomiyahama

28,509

4,264

2,100

5,469

222

16,053400

54,886

Bonsejour Chitosefunabashi

5,585

1,794

224

-

112

3,048

404

21,388

Bonsejour Hino

5,070

1,240

214

-

86

3,130

400

19,473

4,102

1,011

167

-

75

2,447

400

16,155

8,406

1,820

213

-

154

5,817

400

21,09314,148

4,565

201

-

355

8,627

400

39,535ASHEIM Hikarigaoka

14,542

3,824

381

-

162

9,773

400

40,980ASHEIM
Bunkyohakusan

12,160

2,621

381

-

129

8,626

400

38,654

SOMPO CARE La vie Re
Machidaonoji

46,518

5,905

780

1,168

392

37,871400

96,353

SOMPO CARE La vie Re
Azamino33,619

4,742

780

840

285

26,571

400

78,174SAWAYAKA
Tachibanakan

26,493

2,655

1,140

-

371

21,927400

47,29025,999

2,964

1,140

-

273

21,222400

43,456SAWAYAKA Tagawakan

8,403

1,108

1,140

-

119

5,635

400

12,929GOOD TIME HOME
Fudo-mae

14,648

3,099

600

380

182

9,986

400

46,338

Bonsejour Yotsugi

4,952

968

223

-

73

3,286

400

20,722

6,519

1,376

371

-

111

4,260

400

13,95552,158

9,577

900

857

579

39,844400

113,185

GreenLife Moriguchi

37,304

6,937

1,363

4,008

379

24,215400

106,910

Hapine Kobe Uozaki
Nibankan

9,844

1,400

1,200

283

90

6,470

400

24,125Granda TsurumaYamato

7,300

1,938

618

-

152

4,191

400

27,057

Smiling Home Medice
Adachi

15,771

3,229

540

772

177

10,653400

60,089AIKOEN ICHIBANKAN
Building

8,813

2,559

780

330

112

4,630

400

22,478

Hanakotoba Minami

8,405

1,539

600

708

79

5,078

400

27,272

Hanakotoba Miura

8,587

1,540

600

410

88

5,547

400

17,360

Bonsejour Musashishinjo
Medical Rehabilitation
Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation
Home Bonsejour
KomakiSAWAYAKA Mekarikan

Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building (Hapine Kobe
Gakuentoshi)

Not disclosed(Note 2)- 42 -

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.
Current fiscal period (from August 1, 2020, to January 31, 2021)
Property nameReal estate lease business revenue
Rent
revenue

Real estate lease business expenses

Otherrevenue

Property Outsourcing Repair
Insurance
Depreciation Othertax
expenses expenses expenses

NOI(Note 3)

SOMPO CARE La vie Re
Hama-Kawasaki

18,546

3,415

2,770

394

206

11,359400

45,171

Hanakotoba ShinYokohama

14,796

4,384

900

402

249

8,460

400

55,576

Hanakotoba ShinYokohama II

6,174

2,500

600

727

92

1,853

400

10,491

Hanakotoba Odawara

8,284

1,378

600

502

99

5,304

400

24,619

Verde Minowa

25,967

5,256

1,020

650

508

18,132400

56,073

24,571

2,220

1,020

744

249

19,937400

45,495

10,331

2,943

600

-

119

6,265

401

45,434

Sunny Life Kamakura

10,352

-

720

404

177

8,650

400

41,197

SOMPO CARE Sompo
no ie Awajiekimae

27,056

4,919

510

-

275

20,952400

58,353

SOMPO CARE Sompo
no ie Kobekamisawa

17,160

2,904

510

530

183

12,632400

35,761

Niigata Rehabilitation
Hospital

27,780

9,844

1,030

600

387

15,418500

77,518SHIP Senri Building

79,97527,236

1,500

-

1,183

49,655400

341,482

678,866 139,689

28,442

20,182

8,502

467,542 14,506

1,847,045

Verde Hotaka
Not disclosed(Note 2)Sunny Life KitaShinagawa

Total(Note 1)
(Note 2)
(Note 3)

2,058,370

2,047,415

10,954All figures indicated are rounded down to the nearest thousand yen.
“Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not beenobtained from tenants. The total is the sum of amounts received as rent for the current fiscal period based on the lease agreements.
“NOI” = Real estate lease business revenue – real estate lease business expenses + depreciation and amortization.

- 43 -

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.
(vi) Summary of Appraisal Report
HCM has obtained an appraisal report for each real estate in trust from one of the following: Rich Appraisal Institute Co.,
Ltd., The Tanizawa Sogo Appraisal Co., Ltd., Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd., JLL Morii
Valuation & Advisory K.K.
The following is a summary of the appraisal report for each real estate in trust acquired by HCM with January 31, 2021,
as the appraisal date. The real estate appraisal report only states judgments and opinions of the appraiser as of a specificpoint in time and does not guarantee the appropriateness, accuracy and feasibility of transactions at the presented
appraisal value. Rich Appraisal Institute Co., Ltd., The Tanizawa Sogo Appraisal Co., Ltd., Japan Real Estate Institute,
Daiwa Real Estate Appraisal Co., Ltd. and JLL Morii Valuation & Advisory K.K., which appraised the properties, have no
special interest in HCM.
Summary of Appraisal Report (Note 1)
DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedIndicated
Discount(millions
Capitalization
Terminal
yen)
value
value
rate
rate
capitalization of yen)(millions of(millions of(%)(Note 3)
(%)
rate
yen)
yen)
(Note 2)

Appraisal
NOI yield(%)(Note 4)

Property number

Property nameAppraisalcompany

Paid nursing
home-1

AQUAMARINE
Nishinomiyahama

Rich Appraisal
Institute Co.,
Ltd.

2,060

2,070

5.3

2,050

5.0

5.5

117

6.0

Paid nursing
home-2

Bonsejour
Chitose-funabashi

The Tanizawa
Sogo Appraisal
Co., Ltd.

974

993

4.4

966

4.5

4.6

49

5.9

Paid nursing
home-3

Bonsejour Hino

The Tanizawa
Sogo Appraisal
Co., Ltd.

818

832

4.8

812

4.9

5.0

43

6.0

Paid nursing
home-4

BonsejourMusashi-shinjo

The Tanizawa
Sogo Appraisal
Co., Ltd.

643

653

5.1

638

5.2

5.3

36

6.2

The Tanizawa
Sogo Appraisal
Co., Ltd.

850

864

5.0

844

5.1

5.2

47

6.4

The Tanizawa
Sogo Appraisal
Co., Ltd.

1,450

1,460

5.5

1,440

5.6

5.7

92

7.3

Paid nursing
home-5

Paid nursing
home-6

MedicalRehabilitation
Home Bonsejour
Hadanoshibusawa
MedicalRehabilitation
Home Bonsejour
Komaki

Paid nursing
home-7ASHEIM
Hikarigaoka

Japan Real
EstateInstitute

1,490

1,500

4.8

1,480

4.6

5.0

76

5.5

Paid nursing
home-8ASHEIM
Bunkyohakusan

Japan Real
EstateInstitute

1,650

1,660

4.4

1,630

4.2

4.6

74

5.1

Paid nursing
home-9SOMPO CARE La
vie ReMachidaonoji

Japan Real
EstateInstitute

3,780

3,820

4.9

3,730

4.7

5.1

193

5.3

Paid nursing
home-10

SOMPO CARE La
vie Re Azamino

Japan Real
EstateInstitute

3,230

3,270

4.6

3,190

4.4

4.8

156

5.1

Paid nursing
home-11SAWAYAKA
Tachibanakan

Japan Real
EstateInstitute

1,530

1,540

5.6

1,510

5.4

5.8

93

6.1

Paid nursing
home-12SAWAYAKA
Mekarikan

Japan Real
EstateInstitute

1,400

1,410

5.7

1,390

5.5

5.9

85

6.2

Paid nursing
home-13SAWAYAKA
Tagawakan

Japan Real
EstateInstitute

379

382

5.8

376

5.6

6.0

25

6.4

Paid nursing
home-14

GOOD TIMEHOME Fudo-mae

Japan Real
EstateInstitute

1,950

1,970

4.4

1,920

4.2

4.6

91

5.2

- 44 -

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.
Summary of Appraisal Report (Note 1)
DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedIndicated
Discount(millions
Capitalization
Terminal
yen)
value
value
rate
rate
capitalization of yen)(millions of(millions of(%)(Note 3)
(%)
rate
yen)
yen)
(Note 2)

Appraisal
NOI yield(%)(Note 4)

Property number

Property nameAppraisalcompany

Paid nursing
home-15

Bonsejour Yotsugi

The Tanizawa
Sogo Appraisal
Co., Ltd.

886

902

4.7

879

4.8

4.9

48

5.8

Paid nursing
home-16

Medical Home
Bonsejour Itami

The Tanizawa
Sogo Appraisal
Co., Ltd.

557

566

5.1

553

5.2

5.3

36

7.1

Paid nursing
home-17

Kobe Gakuentoshi
Building

4,410

4,470

4.7

4,390

4.5

4.9

225

5.2

Paid nursing
home-18

GreenLife
Moriguchi

4,400

4,460

4.6

4,370

4.4

4.8

220

5.3

Paid nursing
home-19

Hapine Kobe
Uozaki Nibankan

974

987

4.7

968

4.5

4.9

48

5.2

Paid nursing
home-20

Granda TsurumaYamato

The Tanizawa
Sogo Appraisal
Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

5.3

Paid nursing
home-21

Smiling Home
Medice Adachi

The Tanizawa
Sogo Appraisal
Co., Ltd.

2,460

2,490

4.7

2,440

4.8

4.9

120

5.3

Paid nursing
home-22

AIKOENICHIBANKAN
Building

The Tanizawa
Sogo Appraisal
Co., Ltd.

861

866

5.2

859

5.3

5.4

45

5.9

Paid nursing
home-23

Hanakotoba
MinamiJapan Real
EstateInstitute

1,180

1,200

4.6

1,160

4.4

4.8

56

5.2

Paid nursing
home-24

The Tanizawa
Hanakotoba Miura Sogo Appraisal
Co., Ltd.

663

671

4.9

659

5.0

5.1

35

5.7

Paid nursing
home-25

SOMPO CARE La
vie Re HamaKawasaki

JLL Morii
Valuation &Advisory K.K.

1,820

1,850

4.6

1,780

4.4

4.8

90

5.2

Paid nursing
home-26

Hanakotoba ShinYokohama

Japan Real
EstateInstitute

2,230

2,260

4.5

2,200

4.3

4.7

109

5.2

Paid nursing
home-27

Hanakotoba ShinYokohama II

Japan Real
EstateInstitute

377

379

5.1

375

4.9

5.3

22

5.8

Paid nursing
home-28

Hanakotoba
Odawara

The Tanizawa
Sogo Appraisal
Co., Ltd.

946

960

4.9

940

4.8～5.0

5.1

49

5.6

1,690

1,710

5.0

1,680

4.8

5.2

109

6.7

1,430

1,440

5.4

1,420

5.2

5.6

91

6.9

1,950

1,980

4.5

1,930

4.3

4.7

89

4.9

Paid nursing
home-29

Verde Minowa

Paid nursing
home-30

Verde Hotaka

Paid nursing
home-31

Sunny Life KitaShinagawa

Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.

Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.

- 45 -

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.
Summary of Appraisal Report (Note 1)

Property number

Property nameAppraisalcompany

DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedIndicated
Discount(millions
Capitalization
Terminal
yen)
value
value
rate
rate
capitalization of yen)(millions of(millions of(%)(Note 3)
(%)
rate
yen)
yen)
(Note 2)

Appraisal
NOI yield(%)(Note 4)The Tanizawa
Sogo Appraisal
Co., Ltd.

1,550

1,560

4.6

1,540

4.7

4.8

76

5.3

SOMPO CARE
Serviced housing
Sompo no ie
for the elderly -1
Awajiekimae

Japan Real
EstateInstitute

2,170

2,190

5.2

2,140

5.0

5.4

116

6.0

SOMPO CARE
Serviced housing
Sompo no ie
for the elderly -2
Kobekamisawa

Japan Real
EstateInstitute

1,340

1,350

5.2

1,320

5.0

5.4

72

6.0

Niigata
Medical serviceRehabilitation
related facilities-1
Hospital

Japan Real
EstateInstitute

2,260

2,270

6.6

2,250

6.4

6.8

152

7.4

Complex of paid
nursing
SHIP Senrihomes,medical
Building
service related
facilities,etc.-1

The Tanizawa
Sogo Appraisal
Co., Ltd.

14,10014,4004.5

14,0004.5～4.6

4.7

680

5.2

71,51872,455―70,879

―

―

3,735

5.6

Paid nursing
home-32

Sunny Life
Kamakura

Total(Note 1) Figures are based on appraisal reports with appraisal date of January 31, 2021.
(Note 2) “Discount rate” represents a yield used to discount net cash flow during an analysis period and terminal value at the end of an analysis period backto present value, and figures used by respective appraisal organizations are shown. For Hanakotoba Odawara, the rate is 4.8% for fiscal 2020 to fiscal
2021 and 5.0% for fiscal 2022 onward; and for SHIP Senri Building, the rate is 4.5% for fiscal 2020 to fiscal 2022 and 4.6% for fiscal 2023 onward.
(Note 3) “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with January 31, 2021,
as the appraisal date and is rounded down to the nearest million yen. In addition, NOI is revenue before deducting depreciation and differs from NCF(net cash flow), which is the amount calculated by adding the gain on investment from security deposits, etc. to NOI and deducting capital
expenditures. The same shall apply hereinafter in this document.
(Note 4) “Appraisal NOI yield” is calculated by the formula below and rounded down to one decimal place. In the column of total appraisal NOI yield, theaverage appraisal NOI yield, which is calculated by dividing the total appraisal NOI of the respective real estate in trust by the total acquisition price,
is shown (rounded down to one decimal place). Appraisal NOI yield = Appraisal NOI of the respective real estate in trust / acquisition price of therespective real estate in trust.

- 46 -

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.
(vii) Information of Major Tenants“Major tenants” refers to tenants whose leased areas occupy 10% or more of total leased area of the entire portfolio at
the end of the current fiscal period (on January 31, 2021). The annual rent and tenant leasehold and security deposits ofeach property are not disclosed as consent from the tenants has not been obtained.
LeasedShareContractarea
Tenant name
Property name(%)
expiration date
2(m )(Note 2)
(Note 3)(Note 1)

GREEN LIFE Co.,Ltd.

AQUAMARINE
Nishinomiyahama

5,189.42

2.8

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

12,636.48

6.8

GreenLife Moriguchi

8,356.85

4.5

Hapine Kobe Uozaki
Nibankan

1,772.89

1.0

27,955.64

15.0

SOMPO CARE La vie Re
Machidaonoji

7,720.17

4.1

SOMPO CARE La vie Re
Azamino5,789.25

3.1

SOMPO CARE La vie Re
Hama-Kawasaki

2,535.29

1.4

SOMPO CARE Sompo no ie S
Awajiekimae

5,745.15

3.1

SOMPO CARE Sompo no ie S
Kobekamisawa

4,058.35

2.2

Total

25,848.21

13.9

Bonsejour Chitose-funabashi

2,342.17

1.3

Bonsejour Hino

1,984.17

1.1

Bonsejour Musashi-shinjo

1,710.43

0.9

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

3,435.79

1.8

Medical Rehabilitation Home
Bonsejour Komaki

8,858.49

4.8

Bonsejour Yotsugi

1,962.89

1.1

Medical Home Bonsejour
Itami2,129.87

1.1

Granda Tsuruma-Yamato

3,427.08

1.8

25,850.89

13.9

Total

Sompo Care Inc.

Benesse Style
Care Co., Ltd.

Total

- 47 -

Contract renewal method,
etc.
(Note 4)

Cancellation not allowed
through to the end of thecontract
Cancellation allowed if
March 28, 2041 requested 1 year prior or
earlier.
Cancellation allowed if
October 19,
requested 6 months prior or
2039
earlier.
Cancellation allowed if
March 28, 2041 requested 1 year prior or
earlier.
――
Midterm cancellation not
October 31,
allowed for 15 years from2027
the start date of leasing.
Midterm cancellation notJune 27, 2027 allowed for 15 years fromthe start date of leasing.
Midterm cancellation not
December 31,
allowed for 15 years from2027
the start date of leasing.
Cancellation allowed if
July 31, 2034 requested 1 year prior or
earlier.
Cancellation allowed if
July 31, 2034 requested 1 year prior or
earlier.
――
Cancellation not allowed
May 24, 2026 through to the end of thecontract
Cancellation not allowed
May 24, 2026 through to the end of thecontract
Cancellation not allowed
November 23,
through to the end of the2026
contract
Cancellation not allowed
May 21, 2027 through to the end of thecontract
Cancellation not allowed
May 21, 2027 through to the end of thecontract
Cancellation not allowed
January 5, 2026 through to the end of thecontract
Cancellation not allowed
May 21, 2027 through to the end of thecontract
Cancellation allowed if
March 31, 2022 requested 6 months prior or
earlier.
――
May 31, 2037

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.
Leasedarea(m2)(Note 1)

Share(%)
(Note 2)Contract
expiration date
(Note 3)

SHIP Senri Building

24,813.85

13.3

October 27,
2038

Total

24,813.85

13.3―

Tenant nameShip Healthcare
Estate Inc.

Property nameContract renewal method,
etc.
(Note 4)
Midterm cancellation notallowed for 15 years fromthe start date of leasing.
―(Note 1) “Leased area” indicates the area stated in lease agreements concluded with each tenant as of January 31, 2021. When a master leaseagreement has been concluded, the area for which a lease agreement has been concluded with end tenants and actually leased is shownfor properties for which a pass-through master lease agreement under which rent from end tenants is received as is, in principle, isconcluded.
(Note 2) “Share” indicates the area of each property leased to its major tenants as a percentage of the total leased area of the properties owned
by HCM as of January 31, 2021, and is rounded to one decimal place.
(Note 3) “Contract expiration date” indicates the contract expiration date stated in the lease agreement.
(Note 4) “Contract renewal method, etc.” indicates the details of contract renewal method, etc. stated in the lease agreement.

(viii) Portfolio Overview (Portfolio Diversification)(a) By TypeClassification

Paid nursing home

Number ofproperties

Period-end
appraisal value(millions of yen)
(Note 1)

Share (%)
(Note 2)

32

48,22751,648

72.7

2

3,130

3,510

4.7

1

2,060

2,260

3.1

1

12,92014,10019.5

36

66,33771,518100.0Serviced housing for theelderly
Medical service-related
facilities, etc.
Complex of paid nursing
homes,medical service
related facilities,etc.
Total

Acquisition price(millions of yen)

(Note 1) “Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2021, prepared by realestate appraisers of Japan Real Estate Institute, The Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd., Daiwa Real
Estate Appraisal Co., Ltd. and JLL Morii Valuation & Advisory K.K., based on the Articles of Incorporation of HCM and the rules set by theInvestment Trusts Association, Japan. The same shall apply hereinafter.
(Note 2) “Share” refers to the percentage of the total acquisition price, and the figures are rounded to one decimal place. The same shall apply
hereinafter.

(b) By Area
Classification/region
Three Major Metropolitan
Areas
Tokyo Metropolitan
Area

Number ofproperties

Acquisition price(millions of yen)

Period-end appraisal
value (millions ofyen)

Share (%)

29

57,26961,96886.3

20

28,08530,507

42.3

Kinki Area

8

27,91430,011

42.1

Chubu Area

1

1,270

1,450

1.9

Core Cities

5

7,350

7,741

11.1

Other Areas

2

1,718

1,809

2.6

36

66,33771,518

100.0

Total

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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.
(c) By the Number of Rooms
The table below shows diversification in accordance with the number of rooms at homes and facilities for theelderly concerning assets which fall under the category of homes and facilities for the elderly (excluding medical
service-related facilities, etc.) among assets held.
Number of rooms

Number ofproperties

Period-end appraisal

Acquisition price(millions of yen)value (millions ofyen)

Share (%)

12

26,98528,72052.5

1821,661

23,47042.2

Less than 50 rooms

4

2,711

2,968

5.3

Total

34

51,35755,158100.0

100 rooms or more
50 rooms or more, but lessthan 100 rooms(Note)

Well House Senri-Chuo (No. of rooms: 181) operated by GREEN LIFE Co., Ltd., a tenant at SHIP Senri Building (paid senior citizens home
section), which is a complex of paid nursing home and medical service-related facilities, etc., is not included in the above table since itis difficult to calculate the acquisition prices and period-end appraisal values separately for the paid nursing home section and the
medical service-related facilities, etc. section.

(2) Status of Capital Expenditures
a. Schedule of Capital Expenditures
Of capital expenditures associated with repair work, etc. currently planned for assets owned by HCM as ofJanuary 31, 2021, the following are the major estimated amounts. The estimated construction costs include theportion separately charged to expenses in accounting.
Name of real estate, etc.
(Location)
Niigata Rehabilitation Hospital(Niigata-shi, Niigata)
SOMPO CARE Sompo no ie
Awajiekimae(Osaka-shi, Osaka)
ASHEIM Hikarigaoka(Nerima-ku, Tokyo)
Hanakotoba Miura(Miura-shi, Kanagawa)b.

Estimated construction costs(thousands of yen)
Payment
Total
Total
duringamountamountperiodalready paid

PurposeScheduled period

Renovation of exterior Walls(North wing)

From: April 2021
To: July 2021

35,500--Renovation of exterior walls

From: April 2021
To: June 2021

22,460--22,000--Renovation of rooftop
waterproof
Renovation of exterior walls

From: April 2021
To: June 2021
From: April 2021
To: July 2021

22,000Capital Expenditures During Period
Of construction work falling under the category of capital expenditures conducted in the current fiscal period for
assets owned by HCM as of January 31, 2021, the following are the major amounts. The capital expenditures in
the current fiscal period amounted to 194,563 thousand yen. Combined with the repair expenses separately
charged to expenses amounting to 20,182 thousand yen, HCM implemented a total of 214,746 thousand yen of
construction work.
Name of real estate, etc.
(Location)

Construction costs(thousands of yen)

PurposeScheduled period

SHIP Senri Building(Toyonaka-shi, Osaka)Renewal of Entrance and exit
system

From: July 2020
To: August 2020

36,103

GOOD TIME HOME Fudo-mae(Shinagawa-ku, Tokyo)

Renewal of Elevator

From: September 2020
To: November 2020

13,305

Hanakotoba Shin-Yokohama(Yokohama-Shi, Kanagawa)

Renovation of rooftop
waterproof

From: November 2020
To: December 2020

12,531-

132,622

Other real estate, etc.

Total

c.

194,563

Cash Reserves for Long-Term Repair Plans
Not applicable.
- 49 -