Financial Results
Briefing Materials
Fiscal Period Ended January 2020
（10th Fiscal Period）
March 17, 2020

Asset Management Company

Securities Code: 3455

The translation of the original Japanese Financial Results Briefing Materials is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Contents

Ⅰ

Ⅱ

Financial SummaryⅢ

1. Topics for 10th Fiscal Period(Ended January 2020)
2. 10th Fiscal Period (Ended January 2020)
Financial Highlights
3. Actual Results for 10th Fiscal Period (Ended
January 2020)
4. 11th Fiscal Period (Ending July 2020) and12th Fiscal Period (Ending January 2021)
Earnings Forecasts
5. Overview of Refinancing

P3

6. Financial Status

P8

7. Changes in Distribution Per Unit

P9

8. Changes in Unit Price

P10

P4
P5
P6
P7

Ⅳ

Actions for Enhancement of Unitholder Value
1. Road Map to External Growth

P16

2. Expansion of Pipeline

P17

3. Actions for Development Projects

P19

4. Actions for Hospital Real EstateP20

5. Actions for ESG

P21

Appendix

Status of Asset Management
1. Portfolio Highlights

P12

2. Stable Cash Flow in the Long Term

P13

1

Financial SummaryⅠ
2

I Financial Summary

1. Topics for 10th Fiscal Period (Ended January 2020)
Expansion of Pipeline

10th Fiscal Period Actual Results

Net income and distribution per unit both exceeded theforecast
Net income
943 million yen

Operating revenue
2,013 million yen(+0 million yen fromforecast)(+4 million yen fromforecast)

Distribution per unit
3,320 yen

NAV per unit
119,303 yen(+16 yen fromforecast)(+317 yen fromprevious fiscal period)

Built up a new pipeline utilizing sponsor support
September 201910 billion
yen
Paid nursing home (to be developed)

March 2020

13 billion
yen

Paid nursing home

Sunny Life Itabashi Shimura
Royal Kawaguchi(Itabashi-ku, Tokyo)(Kawaguchi-shi, Saitama)

Paid nursing home

Sawayaka Sanokan(Sano-shi, Tochigi)

Diversification of Financing Methods

Actions for ESG

First issuance of investment corporation bond (socialbond) by HCM

 Transmission of information on the current status of the

Total issuanceamount2 billion yen

Interest rate

0.780%

medical and nursing care industry and actions to resolve
issues through Impact ReportTerm

10 yearsCredit Rating

A (JCR)3

I Financial Summary

2. 10th Fiscal Period (Ended January 2020) Financial Highlights
Figures in parenthesis indicate the change from the end of previous period

Debt (Liabilities)

Asset (Assets)
Number of properties

Total acquisition priceTotal appraisal value

Unrealized gain

Average appraisal NOI yield

35(±0 properties)
64.8 billion yen(±0 billion yen)
70.4 billion yen(±0 billion yen)
4.9 billion yen(+0.1 billion yen)

Ratio of fixed rents
Ratio of investment in three major
metropolitan areas
Average remaining lease term

32.45 billion yen

interest-bearing liabilities(±0 billion yen)

Average remaining terms

3.5 years

to maturity
Average borrowing interest rate
Ratio of long-term debt(±0%)
14.2 years(-0.5 years)

90.8%(+14.5%)(+3.1%)

LTV
Long-Term Issuer Rating (JCR)

Equity (Net assets)→Fully leased

86.1%(+0.03%)fixed interest rates(+0.1%)

(±0%)

0.58%

100%

(±0%)

100%

(+0.9 years)

Ratio of debt with

5.6%
100%

Operational rate

Total amount of

Total sum of fair value
Distribution per unit
Distribution in excess ofearnings (Note 1)

47.6%(+0.1%)A (stable)

42.7 billion yen(+1.2 billion yen)
3,320 yen(-323 yen)
285 yen(Equivalent to return of capital)

NAV per unit

(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).

119,303 yen(+317 yen)4

I Financial Summary

3. 10th Fiscal Period(Ended January 2020) Actual Results
Although profit decreased from the previous fiscal period due to the increase in asset management fee, etc.,
distribution per unit exceeded the initial forecast.
(Unit: million yen)

9th Fiscal
Period10th Fiscal Period Actual Results(Comparison with Forecast)

10th Fiscal Period(Ended January 2020)(Ended July 2019)

Actual(Note 2)

ActualComparison
with Forecast

(A)

(B)

(C)

(C)-(B)

Operating revenue

2,008

2,012

2,013

0

+4

+0.2

Operating expenses

818

910

909

-1

+90

+11.1

Difference in operating revenue (+4)

Expenses related torent business

586

602

601

-1

+14

+2.5

(Depreciation)

436

442

443

+1

+7

+1.7

 Increase in rent business revenue (+3)
 Rent increase due to system investment(EGAO link) (+3)
Difference in operating expenses (+90)

Operating income

1,189

1,101

1,103

+2

-86

-7.3

Ordinary income

1,047

940

944

+4

-102

-9.8

Net income

1,046

939

943

+4

-102

-9.8

Distribution per unit
(yen)

3,643

3,304

3,320

+16

-323

-8.9

Distribution of earnings

3,325

+15

-328

-9.8

Distribution of reserve
for temporary
difference adjustments
Distribution in excessof earnings(return of capital) (Note 1)

NAV per unit (yen)

38

3,020

3,027
8

Comparison with
9th Fiscal Period

Difference in operating expenses (-1)

Forecast(C)-(A)(C)-(A)(A)(%) (Note 3)

10th Fiscal Period Actual Results(Comparison with 9th Fiscal Period) Increase in expenses related to rent business(+14)
 Depreciation (+7)
 Repair expenses (+4)
 Increase in general and administrative expenses(+76)
 Asset management fee (+56)
 Non-deductible consumption tax (+7)
 Research expenses (+4)
 Administrative service fees (+3)
Difference in non-operating revenue (-14)
 Absence of insurance income (-15)

280

284

285

+1

+5

+1.8

118,986-

119,303

-

+317

+0.3

(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2): The forecast for the 10th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended July 2019” dated September 13, 2019.
(Note 3): Figures are rounded off to the first decimal place.

 Decrease in expenses related to rent business (-1)
 Repair expenses (-3)
 Depreciation (+1)

5

I Financial Summary

4. 11th Fiscal Period (Ending July 2020) and12th Fiscal Period (Ending January 2021) Earnings Forecasts

Operating revenue is forecasted to increase slightly in the 11th fiscal period while profit is expected
to decrease from the previous fiscal period due to expensing of property/city planning tax.
(Unit: million yen)
10th Fiscal
Period11th Fiscal Period(Ending July 2020)(Ended January
2020)

Actual12th Fiscal Period

Initialforecast(Note 2)(Ending January 2021)

Forecast

Comparison with
10th Fiscal Period(C)-(A)(C)-(A)(A)(%) (Note 3)

Forecast

Comparison with
11th Fiscal Period
Forecast(D)(D)-(C)(D)-(C)(C)(%) (Note 3)

(A)

(B)

(C)

Operating revenue

2,013

2,012

2,015

+2

+0.1

2,015

0

0

Operating expenses

909

966

968

+58

+6.4

976

+8

+0.8

Expenses related torent business

601

659

661

+60

+10.1

667

+5

+0.9

(Depreciation)

443

445

448

+4

+1.1

453

+4

+1.0

Operating income

1,103

1,046

1,047

-55

-5.1

1,039

-8

-0.8

Ordinary income

944

891

891

-52

-5.6

882

-9

-1.0

Net income

943

890

890

-52

-5.6

881

-9

-1.0

Distribution per unit
(yen)

3,320

3,150

3,150

-170

-5.1

3,125

-25

-0.8

3,035

2,864

2,864

-171

-5.6

2,835

-29

-1.0

285

286

286

+1

+0.4

290

+4

+1.4

11th Fiscal Period Forecast(Comparison with 10th Fiscal Period)
Difference in operating revenue (+2)
 Attraction of new tenants (+2)

Difference in operating expenses (+58)
Increase in expenses related to rent business(+60)
 Expensing of property/city planning tax forproperties acquired in 9th Fiscal Period (+48)
 Repair expenses (+7)
 Depreciation (+4)
Difference in non-operating expenses (-5)
Increase in interest expenses (+2)
Decrease in investment unit issuance expenses(public offering conducted in 5th Fiscal Period) (-4)
 Decrease in loan fees (-2)


12th Fiscal Period Forecast(Comparison with 11th Fiscal Period)
Difference in operating expenses (+8)
Distribution per unit
(Excluding distribution inexcess of earnings(return of capital) (Note 1) )Distribution in excessof earnings(return of capital) (Note 1)

Expenses for general meeting of unitholders(+6)(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2): The initial forecast for the 11th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended July 2019” dated September 13, 2019.
(Note 3): Figures are rounded off to the first decimal place.

6

I Financial Summary

5. Overview of Refinancing
Conducted refinancing of loans (7.7 billion yen) due for repayment in January 2020. HCM
issued its first investment corporation bonds (social bonds) together with social loans withan intent to expand financing methods and diversify maturities.
Before Refinancing
Long-term loans
3 years
3.7 billion yen
Interest rate:
0.54565%

Long-term loans
3 years
3 billion yen
Interest rate:
0.53520%
Short-term loans
1 year1 billion yen
Average interest rate:
0.32%

After Refinancing
Investment corporationbonds(Social bonds)
10 years
2 billion yen
Interest rate: 0.780%

Long-term loans(Social loans)
5 years
4.45 billion yen
Interest rate: 0.54% (Note)

Long-term loans(Social loans)
3 years
1.25 billion yen
Interest rate: 0.42571%(Note) Interest rates are substantially fixed by the interest rate swap agreement.

Actual Results (1)Expanded financing methods by issuing social
bonds
Healthcare & Medical Investment
Corporation
1st Series Unsecured Investment
Name
Corporation Bonds(Also known as HCM Social Bonds)
Interest
0.780%
rate
Term

10 years

Total
issuance
amount2 billion yen

Bond rating

A (JCR)JCR Social Finance Framework Evaluation (Social 1 (F)(highest rating))

Actual Results (2)Curbed cost increase and extended
borrowing period
Average remaining years

2.6 years →3.5 years

Average interest rate

0.55% →

0.58%

7

I Financial Summary

6. Financial Status
The bank formation centering on Sumitomo Mitsui Banking Corporation and the LTV level
maintained at around 50%.
Change in LTV and Total Interest-Bearing Liabilities

Status of Interest-Bearing Liabilities
End of
9th FP

End of10th FP

Change(billion yen)
350

Total amount ofinterest-bearing Liabilities(billion yen)

32.45

32.45

±0

(Investment corporation
bonds)(billion yen)

0

2.0

+2.0

200

47.5

47.6

+0.1

Ratio of debt with fixedinterest rates

(%)

96.9

100

+3.1

100

Ratio of long-term debt

(%)

76.3

90.8

+14.5

50

Average remaining terms tomaturity(year)

2.6

3.5

+0.9

Average borrowing interest
rate

(%)

0.55

0.58

+0.03

Mie Bank
0.75 billion yen (2.5%)

The Gunma Bank
0.5 billion yen (1.6%)

Higashi-Nippon Bank
0.5 billion yen (1.6%)

48.9

0

14.0

14.0

20.7

48.8

20.7

Hiroshima Bank
1.25 billion yen(4.1%)

Sumitomo Mitsui
Banking Corporation
10.05 billion yen(33.0%)

Dai-ichi Life Insurance
1.25 billion yen(4.1%)

50

48.8

20.7

49

22.45

47.5

47.6

32.45

32.45

48
47
46

(billion yen)100
Long-term loans
Investment corporation bonds

60
9.25

40

Nippon Life Insurance
2.6 billion yen (8.5%)

51

2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP 10th FP
Ended Ended Ended Ended Ended Ended Ended Ended Ended
January July January July January July January July January
2016
2016
2017
2017
2018
2018
2019
2019
2020

80

Bank of Fukuoka
1.25 billion yen (4.1%)

Nishi-Nippon City Bank
1.75 billion yen (5.7%)

13.0

50.6

50.2

48.4

150

52

LTV (right axis)

Diversification of Maturities

77 Bank 0.95 billion yen(3.1%)

Shinkin Central Bank
1.45 billion yen (4.8%)

50.2

250

(%)

Diversification of Lenders

Total amount of Loans (left axis)

300

LTV

(%)

Sumitomo Mitsui Trust Bank
5.45 billion yen (17.9%)

Resona Bank
2.7 billion yen (8.9%)

20

0

7.0

6.75
4.45

3.0

12th FP 14th FP 16th FP 18th FP 20th FP

2.0
30th FP

8

I Financial Summary

7. Changes in Distribution Per Unit
(yen)

3,800

3,643
Distribution in excess of earnings

3,600

Distribution(Note 1)

(Note 2)Distribution (Excluding temporary effect)

3,400(Note 3)

3,363

3,200

3,320

3,150

3,120
3,180

3,125

3,035

3,000

2,800

2,794
2,730

2,697

2,653

2,440
2,400

2,000
0

2,864

2,835

2,864

2,835

2,786

2,699

2,600

2,200

2,699

2,879

2,340
2,296

2,328

2nd FP
Ended Jan. 2016

3rd FP
Ended July 2016

2,589

2,508

2,425

4th FP
Ended Jan. 2017

5th FP
Ended July 2017

6th FP
Ended Jan. 2018

7th FP
Ended July 2018

8th FP
Ended Jan. 2019

9th FP
Ended July 2019

10th FP
Ended Jan. 2020

(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2): The amount obtained by subtracting distribution in excess of earnings from distribution per unit is indicated.
(Note 3): Temporary effect refers to temporary revenues (insurance income, etc.), property tax and urban planning tax which have not been expensed due to property acquisition.

11th FPEnding July 2020

12th FPEnding Jan. 2021

(Forecast)(Forecast)9I Financial Summary

8. Changes in Unit Price
Trade volume(yen)

TSE REIT Index

HCM(unit)

23,0005,000

145,000
September 2018
Announcement of proposing executionof distribution in excess of earnings asa matter to be resolved at theunitholders’ meeting

140,000
135,000
130,000
125,000

February 2019
Conducted the second public offering
since IPO

4,000

November 2017
Announcement of the first acquisition of
hospital real estate by a J-REIT (Niigata
Rehabilitation Hospital)

3,000

120,000
115,000
110,000

2,000

105,000

Average trade volume (Note 3)(After public offering)
1,598 units

100,000
95,000

Average trade volume (Note 3)(Before public offering)
426 units

90,00085,0002017/7/31(99,600 yen) (Note 2)

1,000

0

2018/1/31

2018/7/31

2019/1/31

2019/7/31

2020/1/31(107,000 yen)(111,600 yen)

(117,100 yen)(133,400 yen)(137,400 yen)

(Note 1): TSE REIT index is indexed with the closing price on July 31, 2017, as 100.
(Note 2): The closing price of the investment units of HCM at each point of time is indicated(Note 3): Each trade volume is calculated by averaging the volume from January 31, 2018 to January 31, 2019 before the public offering and the value from February 12, 2019 to January 31, 2020 after the public offering.

10

Status of Asset Management

Ⅱ11

Ⅱ Status of Asset Management

1. Portfolio Highlights
Portfolio Highlights

Number ofproperties

Total acquisition
price

Total appraisal
value (Note 1)

Average appraisal
NOI yield

35

64.8 billion yen

70.4 billion yen

5.6 %Average buildingage (Note 1)

Average remaining
lease term (Note 1)

Ratio of fixedrents

Operational rate

15.5 years

14.2 years

100 %

100 %

(±0 billion yen)(±0 properties)(-0.5 years)(+0.5 years)(±0 billion yen)

(±0%)

(±0%)

(+ 0.1%)(Note) : Figures in parentheses are comparison with the end of 9th FP.

Portfolio Diversification (Note 2)
Other areas

Complex of paid nursing home, medical
service-related facilities, etc. 19.9%

Core cities
Paid nursing home
72.1%

Medical service-related facilities
3.2%
Serviced housing for the elderly
4.8%

11.3%
Chubu area

2.6%

Three Major Metropolitan areas
86.1%

2.0%

By Type

By
Geographical
Area
Tokyo metropolitan area

Kinki area
43.0%

41.1%

(Note 1): “Average building age” and “Average remaining lease term” are calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with January 31, 2020, as the reference date, rounded
down to the first decimal place. When there is more than one building, they are calculated by weighted averaging with areas. “Appraisal Value” is indicated based on the appraisal report with January 31, 2020, as theappraisal date.
(Note 2): The figures in the graphs are calculated based on acquisition price, rounded to the first decimal place.

12

Ⅱ Status of Asset Management

2. Stable Cash Flow in the Long Term (1)HCM concludes long-term and fixed-rent lease agreements with carefully selected operatorsin principle and strives to secure stable cash flow through continuous monitoring.
Careful Selection and Monitoring of Operator
 Currently owns healthcare facilities operated by 12 operators including major companies operating nationwide
 Monitors regularly measures for prevention of elder abuse and safety management taken by operators in addition tothe operational and financial status

Good judgement regarding operators is very important to secure stable rent income
Operational
capability

Management
stability

Business due diligence(including those after acquisition)
Management
Compliance

Financial status

Operational
status offacilities

Business
profile/activities

Abuse
prevention
measures

Safetymanagement

13

Ⅱ Status of Asset Management

2. Stable Cash Flow in the Long Term (2)Long-Term Fixed-Rent Lease Agreements

Actions for Enhancement of Cash Flow

20 years or more
14.1%

Less than

Purchase of land with leasehold interest (Verde Hotaka)(scheduled to be acquired in April 2020)
 To achieve complete ownership by acquiring the land withleasehold interest of the property from the operator

Annual rental
expenses
Reduced
1.0 million yen

10 years

Averageremaininglease term
14.2 years

37.3%

Ratio offixed rents
100%(Note 1)

10 years or more butless than 20 years
48.7%

Annual rent
Increased by
4.5 million yen

Example of Proactive Capital Expenditure (10th Fiscal Period)
Property

Details

Investment
AmountNiigata Rehabilitation
HospitalRenovation of rooftop waterproof

31.0 million yen

ASHEIM Hikarigaoka

Introduction of system utilizing ICT(EGAO link)

25.6 million yen

GOOD TIME HOME Fudomae

Renewal of air conditioners incommon areas

19.1 million yen

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

Renovation work for improving theefficiency of outdoor air conditioner
unit in common areas(Utilization of subsidy)

8.2 million yen

Attraction of new tenants (SOMPO Care Laville Hamakawasaki)
Invited a clinic to the first floor of the property, and occupancy
rate recovered to 100%Rent increase due to introduction of system utilizing ICT(EGAO link) (ASHEIM Hikarigaoka)
 Added the amount equivalent to depreciation to conventional
rent

Annual rent
Increased by
4.2 million yen(Note 1): The figure is calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with January 31, 2020, as reference date, rounded down to the first decimal place.

14

Actions for Enhancement ofUnitholder ValueⅢ
15

Ⅲ Actions for Enhancement of Unitholder Value

1. Road Map to External Growth
HCM aims for an asset size of 100 billion yen over the medium term. (Note 1)
With continuous property acquisition since IPO, the asset size expanded about 2.7 times to 64.8 billion yen.
Change in Asset Size and Number of Properties

February 2017

March 2016

February 2019

October 2018

November 2017

・ Conducted the first public
offering
・ Acquired 6 properties (13.4
billion yen)・ Acquired 2 properties(1.3 billion yen)・ Conducted the second public
offering
・ Acquired 8 properties (22.7 billion
yen) including hospital real estate・ Acquired 2 properties(1.6 billion yen)・ Acquired J-REIT’s first
hospital real estate for 2
billion yen(billion yen)100

(Number of properties)
40

64.8

<Target>

100.0

64.8

(Note 1)

Asset size

35

35

Number of properties

30

40.5

38.4

25
23.6

23.6

25.0

25.0

40.5

35

25

Pipeline

25

15

16

400
300

20
18

600
500

42.1
27

24

700

200

18

16

1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

Ended July

Ended Jan.

Ended July

Ended Jan.

Ended July

Ended Jan.

Ended July

Ended Jan.

Ended July

Ended Jan.

2015

2016

2016

2017

2017

2018

2018

2019

2019

2020

(Note 1) : The target may not be achieved due to future events, market environment and other factors.

100

16

Ⅲ Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (1)HCM aims to expand and strengthen information flow and property acquisition methods
through its network with the sponsor as well as operators, developers and owners.
System to Gather Quality Deals and Information

Facilities andhousing for theelderly(already opened)

Operators

Facilities andhousing for theelderly(to be developed)

Various routes

Expert know-how

networks

Supportagreement

Asset management

Extensive networks

Extensive
warehousing
functions

Sponsor andsupporting company

Developers
Housebuilders

Owners(Individuals, business
operators, funds, etc.)

company’s own
network

Expert know-how

Nursing care andmedical service
Fund management
Finance

Medicalservice-related
facilities, etc.

Utilization of

Supportagreement

bridge SPCs
Utilization of
warehousing ofsponsors and others

Warehousing
functions

Medicalcorporation

Capture quality deals on anegotiation basis at theappropriate timing

17

Ⅲ Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (2)HCM will focus on further expansion of pipeline by strengthening its “system to gather quality
deals and information” utilizing its wide-ranging network and various functions.
Establishment of a system to gather
quality deals and information
Facilities and housing
for the elderly(already opened)

Facilities and housing
for the elderly(to be developed)

Medical servicerelated facilities,
etc.

Pipeline totaling around 13.0 billion yen (Part)
Paid nursing home

SOMPO CARE La vie Re Kobe-Ikawadani(Kobe-shi, Hyogo)
Paid nursing home

Sunny Life Kamakura(Kamakura-shi, Kanagawa)Paid nursing home

Royal Kawaguchi(Kawaguchi-shi, Saitama)
Paid nursing home

Sawayaka Sanokan(Sano-shi, Tochigi)

Paid nursing home

AMICA VILLA INAGE(Chiba-shi, Chiba)
Paid nursing home (to be developed)

Medical Rehabilitation Home Granda Yamahana(Sapporo-shi, Hokkaido)(Note) In case a sponsor or an SPC formed by a sponsor, etc. decides to sell a healthcare facility they own, HCM has the first refusal rights to acquire the property. However, the acquisition is undecided and there is no guaranteethat HCM will acquire the property in the future. The above properties are some of healthcare facilities owned by sponsors or SPCs formed by sponsors, etc.

18

Ⅲ Actions for Enhancement of Unitholder Value

3. Actions for Development Projects
HCM promotes actions for development projects by utilizing its network in the industry
and various functions.
Strengths of HCM

Abundant real estate information
through the sponsor network, etc.

Knowledge on the healthcare
industry and a wide network● Information on sales/purchase andeffective utilization of development
sites● Good judgement and introduction of
credible operators● Capturing operators’ needs for opening afacility

Extensive sponsor functions● Warehousing function● Drawing and management ofdevelopment plans

Acquisition at the appropriate timing
after completion of buildings

Case Example

Characteristics of Development Projects
Upgrades and expansion of healthcare facilities
Flexibility notdependent upon land
utilization byindividual owners
Larger building size

New development
utilizing healthcare
REITs

Development based on operators’ needs toopen new facilities ⇒ Leasing risk is limited<Case example 1>

Major housebuilder acquired thedevelopment site and a paid nursing
home is currently under construction
based on the assumption that thesponsor will purchase it after
completion.

Scheduled to be completed in February Sunny Life Itabashi Shimura(Itabashi-ku, Tokyo)
and open in April 2020.
<Case example 2>Development project of a paid nursing home utilizing idle land
owned by the sponsor

Currently drawing a development plan that utilizes thedevelopment/warehousing functions of the sponsor after
carefully selecting operators.

19

Ⅲ Actions for Enhancement of Unitholder Value

4. Actions for Hospital Real Estate
Investment & Management Policy

Opportunity of REIT investment (utilization)
Size of hospital real estate market



1Market size is approximately 23 trillion yen (Note 1), and hospital realestate accounts for over 50% of the entire healthcare facility realestate market (approximately 51%)



Mostly self-owned by medical corporations, etc.

Major investment target A hospital which can play an important role in the Regional

Healthcare Vision

 May acquire a medical mall, health check-up center other thanhospitals2Strengthen financial standing

Refinancing and liquidation of assets in line with business succession

Real Estate Guidelines”

M&A financing

Strengthening of medical functions/fund procurement for conversion

Reconstruction and extension/renovation of buildings

Management Company

 No involvement in operation of hospitals, in principle

Case Example

 Conclusion of a fixed-rent/long-term lease agreement, in principle

Investment ratio Together with facilities and housing for the elderly, accounting for

80% or more of the portfolio

Promotion for market expansion
 Participation in seminars for medical/nursing care facilities-

related operators(Note 1): Preliminary calculation by KPMG Healthcare Japan Co., Ltd.

SHIP SENRI BUILDING(Senri-Chuo Hospital)

Location

Toyonaka-shi, Osaka

Operators

Kyowakai Medical
Corporation400Large-scale multi-use healthcare facility, combining a hospital and apaid nursing home

Developed and master leased in its entirety by a group company ofSHIP HEALTHCARE

Senri Chuo Hospital, a major tenant, opened when the property wascompleted (2008) as a hospital mainly responsible for subacute andchronic care.



HCM acquired it by utilizing the warehousing functions of the sponsor.

 Lectures at industry group meetings(Congress of Japan Hospital

Association, etc.)

Name

Number ofbeds No upper limit set for hospital real estate alone4Investment & Management complying with the “Hospital Allocation of experts familiar with hospital business in the Asset

3

Main hospital needs

20

Ⅲ Actions for Enhancement of Unitholder Value

5. Actions for ESG (1)HCM and the Asset Management Company aim to realize the investment philosophy and enhance unitholder
value over the medium to long term by practicing asset management that is considerate of Environment,
Social and Governance (ESG).
Basic ESG PolicyPromotion in collaboration with various in-house/outside
stakeholders including operators, hospital personnel,
sponsors, executives and employees

Reduction of Environmental Burden (E)Renovation work for improving the efficiency of air
conditioning system using subsidies

Efforts to Solve Social Issues (S)Newly established employment support facility for the disabled- Effective utilization of the former site of day-care center for
employees
 Supported the improvement of efficiency of nursing carebusiness of operators with the introduction of ICT system- Introduction of “EGAO link”
Reduction of environmental burden (E)Resolution of social issues in an aging
society (S)Establishment of Governance System (G)

Establishment of governance system (G)Information disclosure to investors andother stakeholders

Actions by the “Customer-Oriented Committee”- Sharing the voices of unitholders and operators on acompany-wide basis in order to reflect them on the operationof HCM as well as considering looking back on daily work andaddressing new efforts from the perspective of customers.

(Case examples of “customer-oriented business operation”)
 Development of warehousing rules
 Implementation of ICT investments (EGAO link) contributing
to the reduction of the burden of nursing care staff at
facilities
 Formulation of "Basic Policy on ESG"

Information Disclosure to Investors and Other
Stakeholders

Periodic information transmission through Impact Reports(issued every December) Holding of financial results briefing session
 Enhancement of materials disclosed in English


21

Ⅲ Actions for Enhancement of Unitholder Value

5. Actions for ESG (2)In addition to the status of allocation of funds procured through social finance, non-financial information
related to the medical and nursing care industry was disclosed in the impact report.
Overview of Impact Report
Issue period

December 2019 (scheduled to be issued every December in principle)

PurposeIn addition to the status and effects of the allocation of funds procured through social financing, the current situation
surrounding medical care and nursing care in an aging society and examples of the actions by HCM (including the AssetManagement Company) and each operator to solve social issues ( *) are indicated. We hope that it will provide a better
understanding of HCM and the healthcare market to a broad range of stakeholders including the HCM's stakeholders.
[Actions by HCM]
Renovation work for improving the efficiency of
outdoor air conditioner unit (Green Life Moriguchi) Reduction of energy consumption and utilization ofsubsidies
 System investment utilizing ICT (ASHEIM
Bunkyohakusan, etc.)
 Improvement of efficiency of nursing care workand reduction of working hours at the facilityetc.


Case Examples (*)[Actions by Operator]
Actions to tackle shortage of human resources in nursing care
 Improvement of treatment and acceptance of foreigntechnical interns
 Actions in the event of disaster Actions to accept victims and ensure the safety ofresidents
 Employment support for people with disabilities
 Operation of work continuation support office utilizing
the empty space in paid nursing homes
etc.


22

memo

23

AppendixⅣ
24

IV Appendix

Portfolio Map
Strategic
investment inthree major
metropolitan
areas

Ratio of investment in threemajor metropolitan areas

86.1%

Kinki area

172

Chubu area

19

1Core cities

11.3%

1 18

41.1%

22

8

29
3

13

9

12
11
5

21

7

30

6

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

20

24

31
14

2
10

15

4
27 26 25
23

28

Serviced housing for theelderly
Medical service-related
facilities, etc.
Complex of paid nursing
homes, medical servicerelated facilities, etc.

1

SOMPO CARE Sompo no ie
S Awajiekimae
SOMPO CARE Sompo no ie
S Kobekamisawa
Niigata Rehabilitation
Hospital

1

SHIP SENRI BUILDING

1
2

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation Home Bonsejour
Komaki7

ASHEIM Hikarigaoka

8

ASHEIM Bunkyohakusan

9

SOMPO CARE La vie Re Machidaonoji

10

SOMPO CARE La vie Re Azamino

11 SAWAYAKA Tachibanakan
11
12Tokyo metropolitan area

1

2.6%

Other areas

Bonsejour Chitose-funabashi

6

1

2.0%

AQUAMARINE Nishinomiyahama

5

43.0%
16

1
2

Paid nursing
home

12

SAWAYAKA Mekarikan

13

SAWAYAKA Tagawakan

14

GOOD TIME HOME Fudo-mae

15Bonsejour Yotsugi

16

Medical Home Bonsejour Itami

17

Kobe Gakuentoshi Building (Hapine
Kobe Gakuentoshi)

18

GreenLife Moriguchi

19

Hapine Kobe Uozaki Nibankan

20Granda Tsuruma-Yamato

21

Smiling Home Medice Adachi

22

Aikoen Ichibankan Building (Aikoen
Ichibankan)

23

Hanakotoba Minami

24

Hanakotoba Miura

25

SOMPO CARE La vie Re Hama-Kawasaki

26

Hanakotoba Shin-Yokohama

27

Hanakotoba Shin-Yokohama II

28

Hanakotoba Odawara

29

Verde Minowa

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

25

IV Appendix

Details of Portfolio (1)Paid nursing home
1

2

3

4

5

AQUAMARINE
Nishinomiyahama

Bonsejour
Chitose-funabashi

Bonsejour
Hino

BonsejourMusashi-shinjo

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

Location

4-15-2, Nishinomiyahama,Nishinomiya-shi, Hyogo

1-37-3, Funabashi, Setagaya-ku,
Tokyo

438-1, Ochikawa, Hino-shi, Tokyo

773-2, Chitose, Takatsu-ku,
Kawasaki-shi, Kanagawa

1-6-60, Shibusawakami,
Hadano-shi, Kanagawa

Nearest Station

Hanshin Nishinomiya Station on
Hanshin Main Line

Chitose-funabashi Station on
Odakyu Odawara Line

Mogusaen Station on Keio LineMusashi-Shinjo Station on JR
Nambu Line

Shibusawa Station on Odakyu
Odawara Line

Construction Completion

May 2007

March 1988

May 1990

February 1985

July 1991

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

119 million yen

49 million yen

43 million yen

36 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.1%

5.9%

6.0%

6.2%

6.4%

Appraisal Value (Note 1)

2,140 million yen

974 million yen

818 million yen

643 million yen

850 million yen

Acquisition Price (ratio)

1,950 million yen (3.0%)

824 million yen (1.3%)

724 million yen (1.1%)

582 million yen (0.9%)728 million yen (1.1%)

Site area

2,587.93 m²

1,020.92 m²

2,211.28 m²

1,233.49 m²

2,588.04 m²

Leasable area

5,274.54 m²

2,342.17 m²

1,984.17 m²

1,710.43 m²

3,435.79 m²

Structure/numberof floor (Note 2)

RC, 5F

RC, B1/6FRC, 3FRC, 4FRC, 5F

Number ofRooms/Resident Capacity

90 rooms, 100 people

42 rooms, 47 people

56 rooms, 58 people

46 rooms, 49 people

100 rooms, 101 people

Occupancy Rate (Note 3)

100.0%

87.2%

98.3%

95.9%

95.0%

Operator

GREEN LIFE

Benesse style Care

Benesse style Care

Benesse style Care

Benesse style Care

Remaining years of leaseagreement (Note 4)

17.3 years

6.3 years

6.3 years

6.8 years

7.3 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2020.
Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of January 31, 2020, rounded down to the first decimal place.

26

IV Appendix

Details of Portfolio (2))

Paid nursing home
6

7

8

9

10

Medical Rehabilitation Home
Bonsejour Komaki

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

SOMPO CARE La vie Re
Machidaonoji

SOMPO CARE La vie Re
AzaminoLocation

3-1, Shiroyama, Komaki-shi,
Aichi

4-3-23, Yahara, Nerima-ku,
Tokyo

4-36-13, Hakusan, Bunkyo-ku,
Tokyo1612, Onojimachi, Machida-shi,Tokyo

19-24, Ayumigaoka, Tsuzuki-ku,
Yokohama-shi, Kanagawa

Nearest Station

Ajioka Station on Meitetsu
Komaki Line

Shakujii-koen Station on Seibu
Ikebukuro Line

Hakusan Station on Toei Subway
Mita Line

Keio Nagayama Odakyu Nagayama
Station on Keio Station on Odakyu
Tama Line
Sagamihara Line

Nakagawa Station on Yokohama
Municipal Subway Blue Line

Construction Completion

March 1991

March 2006

February 2007

October 2007

March 2004

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

92 million yen

76 million yen

74 million yen

193 million yen

156 million yen

Appraisal NOI yield (Note 1)

7.3%

5.5%

5.1%

5.3%

5.1%

Appraisal Value (Note 1)

1,450 million yen

1,580 million yen

1,660 million yen

3,790 million yen

3,230 million yen

Acquisition Price (ratio)

1,270 million yen (2.0%)

1,385 million yen (2.1%)

1,430 million yen (2.2%)

3,580 million yen (5.5%)

3,050 million yen (4.7%)

Site area

8,229.85 m²

2,868.46 m²

540.29 m²

7,404.13 m²

2,748.64 m²

Leasable area

8,858.49 m²

3,628.60 m²

2,507.25 m²

7,720.17 m²

5,789.25 m²

Structure/numberof floor (Note 2)

SRC/RC/S, 10F

RC, 3FRC, 8F

RC, B1/6F

RC, B1F/5F

Number ofRooms/Resident Capacity

124 rooms, 165 people

83 rooms, 89 people

50 rooms, 52 people

163 rooms, 169 people

145 rooms, 145 people

Occupancy Rate (Note 3)

76.4%

91.0%

92.3%

69.8%

67.6%

Operator

Benesse style Care

AS PARTNERS

AS PARTNERS

Sompo Care

Sompo Care

Remaining years of leaseagreement (Note 4)

7.3 years

14.1 years

7.1 years

7.7 years

7.4 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2020. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of January 31, 2020, rounded down to the first decimal place.

27

IV Appendix

Details of Portfolio (3)Paid nursing home
11

12

13

14

15

SAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME Fudo-mae

Bonsejour Yotsugi

Location173-15, Oaza Ryugeji, Hakata-ku,
Fukuoka-shi, Fukuoka

1-9-15, Okubo, Moji-ku,
Kitakyushu-shi, Fukuoka

393-1, Oaza Ita, Tagawa-shi,
Fukuoka

5-25-13, Nishigotanda,
Shinagawa-ku, Tokyo

3-1-11, Higashiyotsugi,
Katsushika-ku, Tokyo

Nearest Station

Sasahara Station on JR Kagoshima
Honsen Line

Mojiko Station on JR Kagoshima
Honsen Line

Magarikane Station on Heisei
Chikuho Railway Tagawa Line

Fudo-mae Station on Tokyu
Meguro Line

Yotsugi Station on Keisei Railway
Oshiage Line

Construction Completion

October 2005

November 2005

January 2006

March 1992

March 1989

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2016

Appraisal NOI (Note 1)

93 million yen

85 million yen

25 million yen

92 million yen

48 million yen

Appraisal NOI yield (Note 1)

6.1%

6.2%

6.5%

5.2%

5.8%

Appraisal Value (Note 1)

1,530 million yen

1,410 million yen

381 million yen

1,950 million yen

886 million yen

Acquisition Price (ratio)

1,520 million yen (2.3％)

1,380 million yen (2.1％)

390 million yen (0.6％)

1,740 million yen (2.7％)

824 million yen (1.3%)

Site area

3,359.66 m²

3,758.26 m²

4,300.90 m²

1,206.60 m²

1,136.46 m²

Leasable area

5,652.94 m²

4,720.46 m²

2,366.20 m²

3,400.20 m²

1,962.89 m²

Structure/numberof floor (Note 2)

RC, B1/6FRC, 4FRC, 3F

RC, B1F/5F

RC, 5F

Number ofRooms/Resident Capacity

104 rooms, 104 people

95 rooms, 95 people

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

Occupancy Rate (Note 3)

100.0%

91.6%

100.0%

86.6%

92.3%

Operator

Sawayaka Club

Sawayaka Club

Sawayaka ClubJAPAN LIFE DESIGN

Benesse style Care

Remaining years of leaseagreement (Note 4)

8.0 years

8.0 years

8.0 years

6.8 years

5.9 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2020.
Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of January 31, 2020, rounded down to the first decimal place.

28

IV Appendix

Details of Portfolio (4)Paid nursing home
16

17

18

19

20

Medical Home
Bonsejour Itami

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

GreenLife Moriguchi

Hapine Kobe Uozaki Nibankan

Granda Tsuruma-Yamato

Location

1-2-25, Chuo, Itami-shi,Hyogo

1-1-2,Gakuennishimachi, Nishi-ku,
Kobe-shi, Hyogo

6-17-34,Satanakamachi,
Moriguchi-shi, Osaka

8-10-7,Uozakiminamimachi,
Higashinada-ku, Kobe-shi, Hyogo

2-3-41,Shimotsuruma,
Yamato-shi, Kanagawa

Nearest Station

Hankyu Itami Station on Hankyu
Railway Itami Line

Gakuentoshi Station on Kobe
Municipal Subway
Seishin-Yamate Line

Construction Completion

March 1988

January 2009

September 2006

March 2010

March 1998

Acquisition Period

Fiscal period ended July 2016

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

36 million yen

225 million yen

220 million yen

48 million yen

53 million yen

Appraisal NOI yield (Note 1)

7.1%

5.2%

5.3%

5.2%

5.3%

Appraisal Value (Note 1)

557 million yen

4,420 million yen

4,400 million yen

995 million yen

1,060 million yen

Acquisition Price (ratio)

514 million yen (0.8%)

4,320 million yen (6.7%)

4,150 million yen (6.4%)

930 million yen (1.4%)

1,000 million yen (1.5%)

Site area

1,976.11 m²

2,742.81 m²

5,872.83 m²

932.94 m²

2,877.11 m²

Leasable area

2,129.87 m²

12,636.48 m²

8,356.85 m²

1,772.89 m²

3,427.08 m²

Structure/numberof floor (Note 2)

SRC, 11F (Exclusive portion)

RC, B1F/9F

S/RC, 9F

S, B1F/4F

RC/S, 5F

Number ofRooms/Resident Capacity

62 rooms, 64 people

131 rooms, 138 people

155 rooms, 189 people

47 rooms, 47 people

73 rooms, 90 people

Occupancy Rate (Note 3)

93.8%

93.5%

100.0%

100.0%

86.7%

Operator

Benesse style Care

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse style Care

Remaining years of leaseagreement (Note 4)

7.3 years

21.1 years

19.7 years

21.1 years

2.1 years

Dainichi Station on Osaka Municipal
Uozaki Station on Hanshin Electric
Subway Tanimachi Line and Osaka
Railway
Monorail(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2020.
Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of January 31, 2020, rounded down to the first decimal place.

Tsuruma Station on Odakyu
Enoshima Line29

IV Appendix

Details of Portfolio (5)Paid nursing home
21

22

23

24

25

Smiling Home Medice Adachi

Aikoen Ichibankan Building(Aikoen Ichibankan)

Hanakotoba Minami

Hanakotoba Miura

SOMPO CARE La vie Re
Hama-Kawasaki

Location

3-35-10, Minamihanabatake,
Adachi-ku, Tokyo

1-3239-1, Tamachi, Chuo-ku,
Niigata-shi, Niigata

2-4-38, Shinkawacho, Minami-ku,
Yokohama-shi, Kanagawa

3-5, Suwacho, Miura-shi,
Kanagawa

23-1, Tajimacho, Kawasaki-ku,
Kawasaki-shi, Kanagawa

Nearest Station

Rokucho Station on
Tsukuba Express

Niigata Station on JR Shinetsu
Main Line

Yoshinocho Station on Yokohama
Municipal Subway Blue Line

Misakiguchi Station on Keikyu
Kurihama Line

Odasakae Station on
JR Nambu Line

Construction Completion

November 2005

February 2010

February 2010

June 2007

March 2007

Acquisition Period

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended January 2019

Fiscal period ended January 2019

Fiscal period ended July 2019

Appraisal NOI (Note 1)

120 million yen

45 million yen

56 million yen

35 million yen

90 million yen

Appraisal NOI yield (Note 1)

5.3%

5.9%

5.2%

5.7%

5.2%

Appraisal Value (Note 1)

2,460 million yen

865 million yen

1,190 million yen

665 million yen

1,820 million yen

Acquisition Price (ratio)

2,253 million yen (3.5%)

770 million yen (1.2%)

1,071 million yen (1.7%)615 million yen (0.9%)

1,710 million yen (2.6%)

Site area

2,069.41 m²

2,597.52 m²

428.76 m²

1,017.55 m²

2,832.33 m²

Leasable area

3,870.98 m²

4,311.20 m²

1,710.68 m²

1,959.64 m²

4,060.21 m²

Structure/numberof floor (Note 2)

RC, 4F

S, 5F

RC, 7FRC, 4FRC, 4F (Exclusive portion)

Number ofRooms/Resident Capacity

82 rooms, 82 people

90 rooms, 90 people

51 rooms, 51 people

53 rooms, 54 people

58 rooms, 58 people

Occupancy Rate (Note 3)

84.1%

100.0%

88.2%

92.6%

75.9%

Operator

GREEN LIFE HIGASHI NIHON Co.,Ltd.

Medical Corporation AIKOKAI

Proud Life Inc.

Proud Life Inc.

Sompo Care

Remaining years of leaseagreement (Note 4)

17.0 years

16.5 years

12.8 years

12.8 years

7.9 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2020.
Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of January 31, 2020, rounded down to the first decimal place.

30

IV Appendix

Details of Portfolio (6)Paid nursing home
27

28

29

30

Hanakotoba Shin-Yokohama

Hanakotoba Shin-Yokohama II

Hanakotoba Odawara

Verde Minowa

Verde Hotaka

Location

1-11-5, Shinyokohama,
Kohoku-ku, Yokohama-shi,
Kanagawa

1-11-11, Shinyokohama, Kohokuku, Yokohama-shi, Kanagawa

3-383-10, Sakawa, Odawara-shi,
Kanagawa

839-4, Azamachiyabo, Kamishiba,
Misatomachi, Takasaki-shi, Gunma

1221, Azamaebara,
Oazanamashina, Kawaba-mura,Tone-gun, Gunma

Nearest Station

Shin-Yokohama Station on
Yokohama Municipal Subway BlueLine and JR Yokohama Line

Shin-Yokohama Station on
Yokohama Municipal Subway BlueLine and JR Yokohama Line

Kamonomiya Station on
JR Tokaido Line

Takasaki Station on
JR Takasaki Line

Numata Station on JR Joetsu Line

Construction Completion

March 2004

April 2007

September 2009

November 2003 (Building 1)
February 1974 (Building 2)

September 1982 (Building 1)
July 1989 (Building 2)

Acquisition Period

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Appraisal NOI (Note 1)

109 million yen

22 million yen

49 million yen

109 million yen

90 million yen

Appraisal NOI yield (Note 1)

5.2%

5.8%

5.6%

6.7%

7.0%

Appraisal Value (Note 1)

2,240 million yen

401 million yen

948 million yen

1,700 million yen

1,360 million yen

Acquisition Price (ratio)

2,071 million yen (3.2%)

375 million yen (0.6%)880 million yen (1.4%)

1,620 million yen (2.5%)

1,290 million yen (2.0%)

Site area

894.00 m²

375.00 m²

1,202.12 m²

7,550.81 m²

4,375.31 m²

Leasable area

5,230.23 m²

1,837.29 m²

2,203.42 m²

11,098.17 m²

6,352.86 m²

Structure/numberof floor (Note 2)

RC, 9F

RC, B1F/7F

RC, 4F

S, 5F (Building 1)
S/RC, 8F (Building 2)

S/SRC, 5F (Building 1)
S, 2F (Building 2)

Number ofRooms/Resident Capacity

136 rooms, 136 people

29 rooms, 30 people

60 rooms, 65 people

174 rooms, 206 people

121 rooms, 174 people

Occupancy Rate (Note 3)

97.1%

96.7%

98.5%

94.2%

98.9%

Operator

Proud Life Inc.

Proud Life Inc.

Proud Life Inc.

Verde Corporation

Verde Corporation

Remaining years of leaseagreement (Note 4)

12.8 years

12.8 years

12.8 years

7.3 years

7.3 years

26(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2020.
Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of January 31, 2020, rounded down to the first decimal place.

31

IV Appendix

Details of Portfolio (7)Paid nursing homeServiced housing for the elderly

Medical service-related
facilities, etc.

Paid nursing home・Medical service-related
facilities, etc.

31

1

2

1

1

Sunny Life Kita-Shinagawa

SOMPO CARE Sompo no ie S
Awajiekimae

SOMPO CARE Sompo no ie S
Kobekamisawa

Niigata Rehabilitation
Hospital

SHIP SENRI BUILDING

Location

3-8-6, Kitashinagawa,Shinagawa-ku, Tokyo

3-20-26, Awaji, Higashiyodogawaku, Osaka-shi, Osaka

8-2-5, Kamisawadori, Hyogo-ku,
Kobe-shi, Hyogo

761, Kizaki, Kita-ku, Niigata-shi,
Niigata

1-4-3, Shinsenri-higashimachi,
Toyonaka-shi, Osaka

Nearest Station

Shimbamba Station
on Keikyu Line

Awaji Station on Hankyu Railway
Kyoto and Senri Lines

Kamisawa Station on Kobe
Municipal Subway
Seishin-Yamate Line

Hayadori Station on
JR Hakushin Line

Senri-Chuo Station on Kita-Osaka
Kyuko Namboku Line and Osaka
Monorail

Construction Completion

September 2018

June 2009

June 2009

April 1990 (Building 1)
February 2001 (Building 2)

September 2008

Acquisition Period

Fiscal period ended July 2019

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended January 2018

Fiscal period ended July 2019

Appraisal NOI (Note 1)

91 million yen

116 million yen

72 million yen

152 million yen

680 million yen

Appraisal NOI yield (Note 1)

4.9%

6.0%

6.0%

7.4%

5.2%

Appraisal Value (Note 1)

1,970 million yen

2,170 million yen

1,340 million yen

2,260 million yen

14,300 million yen

Acquisition Price (ratio)

1,825 million yen (2.8%)

1,930 million yen (3.0%)

1,200 million yen (1.8%)

2,060 million yen (3.2%)

12,920 million yen (19.9%)

Site area

1,105.12 m²

1,251.26 m²

743.22 m²

15,056.85 m²

4,202.65 m²

Leasable area

2,135.54 m²

5,745.15 m²

4,058.35 m²

13,476.55 m²

24,813.85 m²

Structure/numberof floor (Note 2)

S, 3F

RC, 12F

S, 9F

RC, 3F (Building 1)
S, 5F (Building 2)

RC, B1/11F

Number ofRooms/Resident Capacity

66 rooms, 66 people

137 rooms/137 people (Note 3)

85 rooms, 85 people

168 beds

Hospital: 400 beds
Paid nursing home: 181 rooms,
200 people

Occupancy Rate (Note 4)

87.9%

98.5%

92.9%

-

Paid nursing home: 100 %Operator

Kawashima Corporation

Sompo Care

Sompo Care

Medical Corporation AIKOKAI

Kyowakai Medical Corporation
GREEN LIFE

Remaining years of leaseagreement (Note 5)

23.7 years

14.5 years

14.5 years

27.1 years

18.7 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2020.
Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Number of rooms/resident capacity as a serviced housing for the elderly is 136 rooms/136 people(Note 4): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 5): Remaining years of lease agreement is as of January 31, 2020, rounded down to the first decimal place.

32

IV Appendix

Operator List (1)Number of facilities(Note 1)

Operator nameGREEN LIFE Co., Ltd.

GREEN LIFE HIGASHI NIHON
Co., Ltd.

Sompo Care Inc.

Benesse Style Care Co., Ltd.

Sawayaka Club Co., Ltd.

AS PARTNERS Co., Ltd.

Facilities andhousing forthe elderly

Attribute

Remarks

Facilities owned by HCM

A nursing care business that plays a central rolein the Lifecare Business of SHIP HEALTHCAREHOLDINGS, INC. Operates nursing care facilities
nationwide.

AQUAMARINE Nishinomiyahama
Kobe Gakuentoshi Building (Hapine
Kobe Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
Smiling Home Medice Adachi

Hospital

25

-

36

-

Consolidated subsidiary ofSHIP HEALTHCAREHOLDINGS, INC., which islisted on the TSE First
SectionSHIP SENRI BUILDING (Well House
Senri-Chuo)

Mainly operates paid nursing homes with careservice under the Sompo Care La vie Re brandand mid- to low-end homes under the SOMPOCARE Sompo no ie brand and the SOMPO CARE
Sompo no ie S brand, centering on three major
metropolitan areas.

SOMPO CARE La vie Re
Machidaonoji
SOMPO CARE La vie Re Azamino
SOMPO CARE Sompo no ie S
Awajiekimae
SOMPO CARE Sompo no ie S
Kobekamisawa
SOMPO CARE La vie Re HamaKawasaki-

Consolidated subsidiary ofBenesse Holdings, Inc.,
which is listed on the TSEFirst Section

Operates seven brands in Tokyo, Osaka, Nagoya,and elsewhere in Japan. The brands are mainly
mid- to high-end, such as Bonsejour and
GRANNY AND GRANDA.

Bonsejour Chitose-funabashi
Bonsejour Hino
Bonsejour Musashi-shinjo
Medical Rehabilitation Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation Home Bonsejour
Komaki
Bonsejour Yotsugi
Medical Home Bonsejour Itami
Granda Tsuruma-Yamato

85-

Consolidated subsidiary of
UCHIYAMA HOLDINGS
Co., Ltd., which is listedon the TSE First Section

Operates low-price facilities with no initial fees
under the SAWAYAKA brand in Fukuoka
Prefecture and elsewhere in Japan.

SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

17-

Unlisted company

Operates paid nursing homes and day service
facilities under the ASHEIM brand in the Greater
Tokyo Area.

ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan

441

323

-

Consolidated subsidiary of
Sompo Holdings, Inc.,
which is listed on the TSEFirst Section(Note 1): “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of March 31, 2019).

33

IV Appendix

Operator List (2)Number of facilities(Note 1)

Operator nameJAPAN LIFEDESIGN Inc.

Medical Corporation AIKOKAI

Kyowakai Medical Corporation

Kawashima Corporation

Proud Life Inc.

Verde Corporation

Facilities andhousing forthe elderly

3

10

4

(Note 2)Attribute

Remarks

Facilities owned by HCM-

Capital partnership byNomura Real Estate
Holdings, Inc., which is anunlisted company

Operates paid nursing homes under the GOOD
TIME HOME brand in Tokyo. Operates in Kyushu
and Hokkaido besides the Tokyo Metropolitan
Area through SOUSEI JIGYOUDAN Co., Ltd., theparent company, and other subsidiaries.

GOOD TIME HOME Fudo-mae

2

A medical corporation
which belongs to NSG
Group with sales of over
80 billion yen (Note 3)

Operating hospitals and clinics as well as paid
nursing home with care service, group home andlong-term care health facilities in Niigata
Prefecture

Aikoen Ichibankan Building (Aikoen
Ichibankan)
Niigata Rehabilitation Hospital-

A major medical corporation operating a wide
range of businesses including six hospitals (2,024
beds), four long-term care health facilities (495beds) and home care support. Provides safe andconvenient medical/nursing care services for all,from those in an acute stage to those in need ofrehabilitation, at-home medical/nursing care.

SHIP SENRI BUILDING (Senri-Chuo
Hospital)

Sunny Life Kita-Shinagawa

Hospital

6-

Unlisted company

A major nursing care business operator operating
nationwide centering on the Tokyo Metropolitan
Area, with Sunny Life as the main brand andunder the motto “Encourage the elderly and thefamily to get relieved from exhausting nursing
care.” None of their facilities requires initial fees.

26-

Consolidated subsidiary ofSony Financial Holdings
Inc., which is listed on the
TSE First Section

Former Yuuai Holdings Group company. Operates
paid nursing homes, etc. under the “Hanakotoba”
brand centering on Kanagawa. Came under SonyFinancial Holdings Inc. in 2017.

Hanakotoba Minami
Hanakotoba Miura
Hanakotoba Odawara
Hanakotoba Shin-Yokohama
Hanakotoba Shin-Yokohama II

5-

Unlisted company

A core company of the Hotaka Kai Group, anursing care/welfare business group holding thelargest number of rooms in Gunma Prefecture.

Verde Minowa
Verde Hotaka

116(Note 1): “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of March 31, 2019).
(Note 2): Only the number of long-term care health facilities is indicated.
(Note 3): Indicates the actual figures in fiscal 2017 based on NSG Group’s website.

34

IV Appendix

Summary of Appraisal Report (1)End of July 2019

Summary of Appraisal Report

Property nameAppraisal company

Appraisal value(million yen)
(Note 1)
(A)

Direct capitalization
methodIndicatedvalue(millionyen)

Capitalization
rate
(%)

DCF method
Indicatedvalue(millionyen)

Discount
rate(%)

Terminal
capitalization
rate
(%)

Appraisal NOI(million yen)
(Note 2)

Appraisal value(million yen)(B)

Difference(million yen)(A)-(B)

Rich Appraisal InstituteCo., Ltd.

2,140

2,160

5.3%

2,130

5.0%

5.5%

119

2,140

0

Bonsejour Chitose-funabashi

The Tanizawa Sogo Appraisal
Co., Ltd.

974

993

4.4%

966

4.5%

4.6%

49

974

0

Bonsejour Hino

The Tanizawa Sogo Appraisal
Co., Ltd.

818

832

4.8%

812

4.9%

5.0%

43

818

0

Bonsejour Musashi-shinjo

The Tanizawa Sogo Appraisal
Co., Ltd.

643

653

5.1%

638

5.2%

5.3%

36

643

0

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

The Tanizawa Sogo Appraisal
Co., Ltd.

850

864

5.0%

844

5.1%

5.2%

47

850

0

Medical Rehabilitation Home Bonsejour Komaki

The Tanizawa Sogo Appraisal
Co., Ltd.

1,450

1,460

5.5%

1,440

5.6%

5.7%

92

1,450

0

ASHEIM Hikarigaoka

Japan Real Estate Institute

1,580

1,580

4.8%

1,570

4.6%

5.0%

76

1,570

+10

ASHEIM Bunkyohakusan

Japan Real Estate Institute

1,660

1,670

4.4%

1,640

4.2%

4.6%

74

1,650

+10

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate Institute

3,790

3,830

4.9%

3,740

4.7%

5.1%

193

3,790

0

SOMPO CARE La vie Re Azamino

Japan Real Estate Institute

3,230

3,270

4.6%

3,190

4.4%

4.8%

156

3,230

0

SAWAYAKA Tachibanakan

Japan Real Estate Institute

1,530

1,540

5.6%

1,510

5.4%

5.8%

93

1,590

-60

SAWAYAKA Mekarikan

Japan Real Estate Institute

1,410

1,420

5.7%

1,390

5.5%

5.9%

85

1,450

-40

SAWAYAKA Tagawakan

Japan Real Estate Institute

381

383

5.8%

378

5.6%

6.0%

25

411

-30

GOOD TIME HOME Fudo-mae

Japan Real Estate Institute

1,950

1,970

4.4%

1,920

4.2%

4.6%

92

1,950

0

Bonsejour Yotsugi

The Tanizawa Sogo Appraisal
Co., Ltd.

886

902

4.7%

879

4.8%

4.9%

48

886

0

Medical Home Bonsejour Itami

The Tanizawa Sogo Appraisal
Co., Ltd.

557

566

5.1%

553

5.2%

5.3%

36

557

0

Kobe Gakuentoshi Building (Hapine Kobe Gakuentoshi)

Daiwa Real Estate Appraisal
Co., Ltd.

4,420

4,470

4.7%

4,400

4.5%

4.9%

225

4,410

+10

GreenLife Moriguchi

Daiwa Real Estate Appraisal
Co., Ltd.

4,400

4,460

4.6%

4,380

4.4%

4.8%

220

4,400

0

Hapine Kobe Uozaki Nibankan

Daiwa Real Estate Appraisal
Co., Ltd.

995

1,010

4.6%

989

4.4%

4.8%

48

995

0

Granda Tsuruma-Yamato

The Tanizawa Sogo Appraisal
Co., Ltd.

1,060

1,070

4.7%

1,050

4.8%

4.9%

53

1,060

0

Smiling Home Medice Adachi

The Tanizawa Sogo Appraisal
Co., Ltd.

2,460

2,490

4.7%

2,450

4.8%

4.9%

120

2,440

+20

AQUAMARINE Nishinomiyahama(Note 1): “Appraisal value” is based on the appraisal report with January 31, 2020, as the appraisal date.
(Note 2): “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with January 31, 2020, as the appraisal date, and is rounded down to the nearest million yen.
The above appraisal NOI is NOI obtained by direct capitalization method.

35

IV Appendix

Summary of Appraisal Report (2)End of July 2019

Summary of Appraisal Report

Property nameAppraisal company

Appraisal value(million yen)
(Note 1)
(A)

Direct capitalization
methodIndicatedvalue(millionyen)

DCF method

Capitalization
rate
(%)

Indicatedvalue(millionyen)

Terminal
capitalization
rate
(%)

Discountrate(%)

Appraisal NOI(million yen)
(Note 2)

Appraisal value(million yen)(B)

Difference(million yen)(A)-(B)

Aikoen Ichibankan Building (Aikoen Ichibankan)

The Tanizawa Sogo Appraisal
Co., Ltd.

865

866

5.2%

864

5.3%

5.4%

45

862

+3

Hanakotoba Minami

Japan Real Estate Institute

1,190

1,200

4.6%

1,170

4.4%

4.8%

56

1,190

0

Hanakotoba Miura

The Tanizawa Sogo Appraisal
Co., Ltd.

665

671

4.9%

662

5.0%

5.1%

35

664

+1

SOMPO CARE La vie Re Hama-Kawasaki

JLL Morii Valuation & Advisory
K.K.

1,820

1,850

4.6%

1,790

4.4%

4.8%

90

1,820

0

Hanakotoba Shin-Yokohama

Japan Real Estate Institute

2,240

2,260

4.5%

2,210

4.3%

4.7%

109

2,230

+10

Hanakotoba Shin-Yokohama II

Japan Real Estate Institute

401

403

4.8%

399

4.6%

5.0%

22

401

0

Hanakotoba Odawara

The Tanizawa Sogo Appraisal
Co., Ltd.

948

960

4.9%

943

4.8-5.0%

5.1%

49

948

0

Verde Minowa

Daiwa Real Estate Appraisal
Co., Ltd.

1,700

1,710

5.0%

1,690

4.8%

5.2%

109

1,700

0

Verde Hotaka

Daiwa Real Estate Appraisal
Co., Ltd.

1,360

1,370

5.6%

1,350

5.4%

5.8%

90

1,360

0

Sunny Life Kita-Shinagawa

Daiwa Real Estate Appraisal
Co., Ltd.

1,970

2,000

4.5%

1,960

4.3%

4.7%

91

1,970

0

SOMPO CARE Sompo no ie S Awajiekimae

Japan Real Estate Institute

2,170

2,190

5.2%

2,150

5.0%

5.4%

116

2,170

0

SOMPO CARE Sompo no ie S Kobekamisawa

Japan Real Estate Institute

1,340

1,350

5.2%

1,320

5.0%

5.4%

72

1,340

0

Niigata Rehabilitation Hospital

Japan Real Estate Institute

2,260

2,270

6.6%

2,250

6.4%

6.8%

152

2,260

0

SHIP SENRI BUILDINGThe Tanizawa Sogo Appraisal
Co., Ltd.

14,30014,4004.5%

14,200

4.5-4.6%

4.7%

680

14,300070,41371,093-69,827

-

-

3,661

70,479-66

Total(Note 1): “Appraisal value” is based on the appraisal report with January 31, 2020, as the appraisal date.
(Note 2): “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with January 31, 2020, as the appraisal date, and is rounded down to the nearest
million yen. The above appraisal NOI is NOI obtained by direct capitalization method.

36

IV Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 10th Fiscal Period)(Unit: thousand yen)
Real estate lease business revenue
Property nameRent
revenue

Real estate lease business expenses

Otherrevenue

Propertytax

Outsourcing

RepairexpensesInsurance
expenses

Depreciation
andamortization

NOI (Note 2)
Other

AQUAMARINE Nishinomiyahama

24,792

4,281

2,100

2,598

206

15,205400

57,756

Bonsejour Chitose-funabashi

5,577

1,794

224

-

104

3,048

404

21,363

Bonsejour Hino

5,064

1,240

213

-

79

3,130

400

19,467

Bonsejour Musashi-shinjo

4,097

1,012

167

-

70

2,447

400

16,128

8,398

1,823

213

-

143

5,817

400

21,077

Medical Rehabilitation Home Bonsejour Komaki

14,125

4,566

201

-

330

8,627

400

39,521ASHEIM Hikarigaoka

14,066

3,687

384

-

150

9,443

400

41,313ASHEIM Bunkyohakusan

12,025

2,502

384

-

112

8,626

400

38,788

SOMPO CARE La vie Re Machidaonoji

44,505

5,974

780

251

334

36,765400

97,25934,262

4,795

780

1,921

244

26,121

400

77,05826,261

2,660

1,140

-

287

21,773400

47,409SAWAYAKA Mekarikan

25,648

2,976

1,140

-

183

20,949400

43,551SAWAYAKA Tagawakan

8,366

1,120

1,140

-

86

5,620

400

12,940

GOOD TIME HOME Fudo-mae

14,750

3,092

600

1,553

157

8,947

400

45,196

Bonsejour Yotsugi

4,946

968

223

-

68

3,286

400

20,708

Medical Home Bonsejour Itami

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa

SOMPO CARE La vie Re Azamino
SAWAYAKA Tachibanakan

Not disclosed (Note 1)

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

6,512

1,376

371

-

104

4,260

400

13,931

51,681

9,599

900

630

538

39,614400

113,432

GreenLife Moriguchi

38,386

6,956

1,372

5,396

352

23,908400

105,521

Hapine Kobe Uozaki Nibankan

9,529

1,401

1,200

-

84

6,444

400

24,414Granda Tsuruma-Yamato

7,289

1,938

618

-

141

4,191

400

27,072(Note 1): ”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants. The total is the sum of amounts received as rent
for the fiscal period under review based on the lease agreements.
(Note 2): “NOI”=Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

37

IV Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 10th Fiscal Period)(Unit: thousand yen)
Real estate lease business revenue
Property nameRent
revenue

Real estate lease business expenses

Otherrevenue

Propertytax

Outsourcing

RepairexpensesInsurance
expenses

Depreciation
andamortization

NOI (Note 2)
Other

Smiling Home Medice Adachi

13,663

3,231

540

40

164

9,287

400

60,672AIKOEN ICHIBANKAN Building

8,477

2,562

780

-

104

4,630

400

22,813

Hanakotoba Minami

6,916

1,543

600

310

71

3,991

400

27,675

Hanakotoba Miura

6,937

1,535

600

282

85

4,034

400

17,505

SOMPO CARE La vie Re Hama-Kawasaki

15,152

-

3,147

472

191

10,940400

46,081

Hanakotoba Shin-Yokohama

10,296

-

900

347

231

8,418

400

60,033

2,939

-

600

-

85

1,853

400

13,726

Hanakotoba Shin-Yokohama II
Not disclosed (Note 1)

Hanakotoba Odawara

6,458

-

600

95

92

5,271

400

26,412

Verde Minowa

20,358

-

1,020

512

473

17,953400

61,521

Verde Hotaka

21,976

-

1,020

120

231

19,701902

47,831Sunny Life Kita-Shinagawa

7,377

-

600

-

110

6,265

400

48,388

SOMPO CARE Sompo no ie S Awajiekimae

28,605

4,930

510

1,575

255

20,934400

56,787

SOMPO CARE Sompo no ie S Kobekamisawa

16,730

2,910

510

140

161

12,608400

36,168

Niigata Rehabilitation Hospital

26,558

9,856

1,030

-

360

14,811500

78,133

SHIP SENRI BUILDING

48,393

397

1,500

-

1,098

44,997400

368,405

601,131

90,736

28,112

16,2447,500

443,930

14,607

1,856,072

Total

2,013,274

2,004,334

8,939(Note 1): ”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants. The total is the sum of amounts received as rent
for the fiscal period under review based on the lease agreements.
(Note 2): “NOI”=Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

38

IV Appendix

Balance Sheet and Statement of Income for the 10th Fiscal Period
Balance Sheet

AssetsStatement of Income(Unit: thousand yen)
10th Fiscal Period
Fiscal period ended
January 2020

9th Fiscal Period
Fiscal period ended
July 2019

Current assets

2,329,873

2,450,025

Cash and deposits

1,897,300

2,160,660

142,524

177,603

Cash and deposits in trust

16-

Prepaid expenses

110,615

110,995

Consumption taxes receivable

179,416--766

65,958,581

65,726,997

Operating accounts receivable

Other
Non-current assets(Unit: thousand yen)
10th Fiscal Period
Fiscal period ended
January 2020

9th Fiscal Period
Fiscal period ended
July 2019
Operating revenue
Lease business revenue
Other lease business revenue

2,008,674

2,013,274

2,000,800

2,004,334

7,874

8,939

818,931

909,860

Expenses related to rent business

586,721

601,131

Asset management fee

144,071

200,660

Asset custody fee

3,207

3,407
22,679Operating expenses

Property, plant and equipment

65,729,194

65,473,380

Administrative service fees

19,416

Buildings in trust

29,538,375

29,245,277

Structures in trust

76,70175,481

Directors’ compensations

3,000

3,000

Machine and device in trust

10,773

13,381

Property tax

17,68525,521Tools, furniture and fixtures in trust

58,393

94,28936,044,949

36,044,949

Land in trust
Intangible assets

40,59639,487

Investments and other assets

188,790

214,129

Deferred assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Note 1)
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Non-current liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits intrust
Derivatives liabilities
Other
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Valuation and translation adjustments(Deferred gains and losses on hedges)
Total net assets
Total liabilities and net assets

37,10346,511

68,325,557

68,223,535

8,290,182
11,7167,700,000
73,843
174,390967
329,19172
26,609,080
24,750,000
1,734,009

3,677,538
40,2983,000,000
41,888239,697812
25,721
329,04772
31,311,236
2,000,000
27,450,000
1,734,009

86,766

86,76637,784520
34,899,262

40,097362
34,988,775

33,464,079
32,392,149
1,071,929

33,274,857
32,293,251
981,606-37,784-40,097

33,426,294
68,325,557

33,234,759
68,223,535(Note 1): Figures include current portion of long-term loans payable.

Other operating expenses

44,82953,4591,189,743

1,103,413

Non-operating income

16,614

1,786

Reversal of distribution payable

1,608

651

5

7

15,000--358

Operating income

Interest income
Insurance income
Interest on refund of consumption
taxes and other
Refund of fixed asset taxes-

766

Non-operating expenses

159,310

160,622

Interest expenses

90,54391,751

Interest expenses on investment
corporation bonds
Investment unit issuance expenses
Borrowing expenses-

42

11,406

11,40657,35957,421

1,047,048

944,576

Extraordinary profit

-

3,552

Extraordinary loss

-

3,552

1,047,048

944,576

Ordinary income

Income before income taxes
Total income taxes

967

821

Income taxes - current

968

813

Income taxes - deferred-07

1,046,080

943,755

Retained earnings brought forward

25,84837,851

Unappropriated retained earnings(undisposed loss)

1,071,929

981,606

Net income

39

IV Appendix

Information Related to Investment Units(As of the end of 10th fiscal period)
List of Top Unitholders

Status of Unitholders
Ratio of Number of Unitholders
by Unitholder Type

Ratio of Number of Investment
Units by Unitholder Type
Foreign
Other companies
investors
5.2%
7.4%
Securities
companies
4.7%

Financial
institutions
0.3%

Securities
companies
0.1%

Individuals,
etc.
32.4%

Total
311,001
units

Other companies
1.4%

Foreigninvestors
0.6%

Total
15,698peopleFinancial
institutions
50.3%

Individuals, etc.
97.6%

Changes in Ratio of Number of Investment Units by
Unitholder Type (most recent 5 fiscal periods)
(%)

1.1
4.6

1.1
5.3

7.6

7.2

3.1
6.6
7.1

4.4

4.7

8.6

7.4

5.6

5.2

Securities companies

Ranking

Name

Number ofinvestment
units owned(unit)

Ownership
ratio
(%)

1

Japan Trustee Services Bank Ltd.
(Trust Account)

73,13023.5

2

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

36,79011.8

3

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

12,943

4.2

4

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

10,413

3.3

5

JPMorgan Securities Japan Co., Ltd.

4,781

1.5

6

NORTHERN TRUST CO.(AVFC) RE
FIDELITY FUNDS

4,627

1.5

NEC Capital Solutions Limited

4,000

1.3

SHIP HEALTHCARE HOLDINGS INC.

4,000

1.3

Sumitomo Mitsui Banking
Corporation

4,000

1.3

UEDA YAGI TANSHI Co., Ltd.

4,000

1.3

158,684

51.0

Foreign investors
46.6

50.1

48.0

45.4

50.3
Other companies

Financial institutions
40.1

36.3

35.2

36.0

7

Total

32.4
Individuals, etc.

6th FP

7th FP

8th FP

9th FP

10th FP(Note 1): Ratios in the graphs are rounded to the first decimal place.

40

IV Appendix

Environment Surrounding Healthcare Facilities (1)Rising Elderly Ratio and Increase in Elderly Single
Households

Upgrades and Expansion of Healthcare Facilities
Backed by Government Policy

Outlook of Change in Japan’s Population and Elderly Ratio(10 thousand people)

Ratio of 65 years
old or older█ 64 years old or younger█ 65-74 years old

15,00064歳以下█ 75 years old or older

14.6%

10.3%

6,723

20%

9,322

1,109
717

1,754
1,632

1,497
2,180

1,522
2,260

1,643

平成７年
1995

平成17年

平成27年

平成37年

平成47年

平成57年

776
471
昭和60年

1985

7,740

1,407
1,160

10,718

10,161

2005

2015

2025

2,277

2035

0%

2045

Ratio of Elderly Single Households in Elderly Households
Actual(Thousand households)

Estimate

Other households
Couple with no other members

30,000

30.7%

28.5%

20,000

6,277

5,403

4,648
0

6,650

5,818

5,033

10,000Elderly households (65 years old or older)
Ratio of single elderly
40.0%

35.7%

34.0%

32.6%

50%

37.4%

39.0%

6,590

30%
20%

6,879

6,756

6,606

6,510

6,740

6,763

6,693

6,666

6,870

3,865

4,980

6,253

7,025

7,512

7,959

8,418

8,963

2005

2010

2015

2020

2025

2030

2035

2040

1.0%

400,000
200,000

0.5%

0.5%

0.6%

0.6%

0.7%

2006

2007

2008

2009

2010

1.2%

0.7%

123,155 147,981 176,935 183,245 195,972 216,174
0

1.1%

315,234 350,990

2011

2012

391,144 424,828

2013

2014

1.4%

1.5%

200,000

Number of units(

150,000
100,000
50,000
0

0.18%
0.01%
3,448
2011
Dec.

56,137
2012
June

0.29%
89,122
2012
Dec.

0.36%

0.42%

0.46%

482,792 518,507

0.57% 0.59%

2015

0.61% 0.62% 0.64%

2016

2017

2013
Dec.

2014
June

2014
Dec.

2015
June

2015
Dec.

2016
June

2016
Dec.

2017
June

2017
Dec.

1.0%

With an aim to realize home life that enables theelderly to live independently, a target to raise theratio of housing for the elderly as a percentage ofthe elderly population from 2.1% in 2014 to 4%
by 2025 was set.

thousand people
2005

0.9%

Outcomeindicator

Resident capacity

Resident capacity

thousand people

thousand people

690
2014

2.1%

1,460
2025

4%

Current Status of Reconstruction of Hospitals, etc.


Hospitals that were constructed in the 1960’s and 1970’s and do notmeet the earthquake resistance standards still exist.
 Ratio of quake-resistant paid nursing homes is 95% or more whilethat of quake-resistant hospitals remains at 74.5%.
(Ministry of Health, Labour and Welfare’s 2018 “Survey on Seismic
Retrofit of Hospitals”)

0.0%

1.00%

0.66% 0.67% 0.69%

231,973238,289245,728
210,859218,195225,374
191,871202,505
166,279181,083
151,667
135,352
114,3152013
June

Housing Life Basic Plan
(nationwide plan)

Following the Guidelines Concerning Utilizing
Healthcare REITs Targeting Housing for the
Elderly, etc. announced in June 2014, Guidelines
Concerning REITs Targeting Hospital Real Estate
was announced in June 2015.

0.5%

Supply rate for 65 years old or older

0.50% 0.54%

2.0%
1.5%

Supply Status of Serviced Housing for the Elderly

250,000

2016
March

230

0%

Supply Status of Paid Nursing Homes(Resident capacity)

1.3%

Guidelines Concerning
REITs Targeting Hospital
Real Estate

Resident capacity

10%

Although supply of facilities and housing for the elderly is on the rise each year, thesupply rate of paid nursing homes against the elderly population was a mere 1.5% in
2017, and promotion of further supply is needed.

Supply rate

2015
June

40%

Promotion of Further Supply of Healthcare Facilities

Resident capacity

Guidelines Concerning
Utilizing Healthcare REITs
Targeting Housing for the
Elderly, etc.

Ratio of Housing for the Elderly as a
Percentage of the Elderly Population(Source) “Projection of the Number of Households for Japan (Nationwide Projection)” (Projection for January 2013)
and (Projection for 2018) by the National Institute of Population and Social Security Research

600,000

2014
June

36.8%

32.8%

30.0%

26.6%
8,577

10,854040%

65～74歳

20.2%

10,0005,0 00Estimate

Actual

2018
June

2018
Dec.

2019
June

0.50%

0.00%

<“Act for Partial Revision of the Act on Promotion of Seismic Retrofitting of
Buildings” was enforced in November 2013>(Hospital: Having more than 3 floors above ground and a total floor area of
5,000 m² or more)

Seismic diagnosis and reporting of the results which wererequired as only best endeavors have become compulsory,and thus investment such as reconstruction is urgent

41

IV Appendix

Environment Surrounding Healthcare Facilities (2)Quantitative
QuantitativeExpansion
Expansionfor
forAchieving
Achieving“Zero“ZeroCare
CareLeave”
Leave”andandImprovement
Improvementof
ofNursingNursingCare
CareService
ServiceQuality
Quality The Ministry of Health, Labor and Welfare has decided to provide subsidies to promote the upgrade of paid nursing homes withcare service mainly by private sectors to achieve the government's goal of "zero care leave." In addition, the introduction of robots/sensors and ICT which is carried out upon large-scale repair of nursing care facilities, etc. has
also been added to the target of provision of subsidies to promote the improvement of productivity at nursing care sites.
Promotion of upgrade of nursing homes with care service(expansion)
In consideration of the situation in which housing for the elderly is receiving various nursing
care needs especially in urban areas, we will also add nursing homes with care service
designated as operators engaged in daily life long-term nursing care for thoseadmitted to a specified facility to the target of provision of subsidies since it isappropriate to promote the upgrade of facilities including nursing homes with care service(daily life long-term nursing care for those admitted to a specified facility) as a nursing careservice base to achieve “zero care leave”.
(Facilities to receive subsidies after expansion)(Maximum unit price of subsidy)

Support of the introduction of robots/sensors and ICT uponlarge-scale repair of facilities (expansion)
We will add the introduction of robots/sensors and ICT which is carried out upon large-scale
repair of nursing care facilities, etc. to the target of provision of subsidies to promote theimprovement of productivity at nursing care sites.
(At the time of receiving opening preparation
expenses at present) At the time of opening At the time of floor expansion
 At the time of reopening(reconstruction)

 Facilities currently receiving subsidies

 Nursing home with care service
designated as operators engaged indaily life long-term nursing care forthose admitted to a specified facility* Facility upgrade costs are provided only tosmall-scale facilities (capacity of 29 people orless).
* Nursing home for the elderly and care house
are also currently receiving subsidies.

 Facility upgrade costs
4.48 million yen per resident
 Opening preparation expenses
839,000 yen per resident Support of lump-sum payment for theestablishment of fixed-term leasehold
1/4 of roadside value(Requirements for receiving subsidy)⃝ Opening preparation expenses are subsidized nationwide from the viewpoint of securing
human resources which is a bottleneck in facility upgrades on a nationwide basis.
⃝ Provision of facility upgrade costs and support of lump-sum payment for theestablishment of fixed-term leaseholds are conducted only in Hokkaido, Ibaraki, Saitama,
Chiba, Tokyo, Kanagawa, Shizuoka, Aichi, Kyoto, Osaka, Hyogo, and Fukuoka
prefectures where the increase in demand for nursing care is conspicuous.

(At the time of receiving opening preparation
expenses after expansion)At the time of opening
At the time of floor expansion
At the time of reopening(reconstruction)

"Upon large-scale repair"(Maximum unit price of opening preparation
expenses subsidized at the time of opening etc.)(Maximum unit price of opening preparation
expenses subsidized upon large-scale repair)

Example of intensive care home forthe elderly, long-term care healthfacility for the elderly, GH for adementia patient, nursing home withcare service:
839,000 yen per resident

Intensive care home for the elderly,
long-term care health facility for theelderly, GH for a dementia patientand nursing home with care service
Example of home:
420,000 yen per resident<Example ofwatching sensor><Example ofnursing care support>(Requirements for receiving subsidy)⃝ The unit price of subsidies upon “large-scale repairs” will be 1/2 the amount of that at the time of“opening of facilities” as expenses for the maintenance of equipment other than robots/sensors and
ICT, employment during staff training, staff recruitment expenses and awareness raising expenses
for establishment are not required.
⃝ Also, subsidized expenses are limited to hardware such as tablet devices and smartphones,
software, cloud services, maintenance and support costs, installation setting, installation training
and security measures.
⃝ To be implemented until 2023.

(Source) Fiscal 2019 Material of the Meeting of Directors of Related Departments at the Ministry of Health, Labor and Welfare

42

IV Appendix

Regional Comprehensive Care System
Regional Comprehensive Care System○ We will establish a regional comprehensive care system that provides residences, medical care, nursing care, preventative medicine and life support in an integrated manner to offer anenvironment where the elderly can continue living in an area they are used to, even after they come to require nursing care, in around 2025 when the baby-boomer generation will be
75 or older.
○ Establishment of a regional comprehensive care system is necessary to support the lives in regions where elderly with dementia live as the number of elderly with dementia is expected
to increase in the future.
○ There is a large regional difference concerning the progress of aging. There are, for example, large cities with the overall population remaining flat but the population of people aged 75
years old or older increasing rapidly and rural areas with the population of people aged 75 years old or older increasing slightly although the overall population decreasing.
It is necessary for municipalities and prefectural governments, which are the insurer, to create a regional comprehensive care system based on autonomy and independence and inaccordance with regional characteristics.

Image of Regional Comprehensive Care System
When you get sick...
Medical care••Acute care hospital
Subacute and recovery phase/recovery
phase rehabilitation hospital

When you need nursing care...
Nursing care

Hospital visit&
stay

Daily medical care:• Primary care doctor• Regional cooperative
hospital

Outpatient nursing care&admission

Residence• Regional comprehensive
support center• Care manager••
We coordinate consultation
business and services

Own house
Serviced housing for the elderly, etc.

Patients
with dementia

 In-home service:• Long-term home-visit nursing care, home-visit nursing,outpatient day long-term nursing care
• Multifunctional long-term nursing care in a small grouphome• Short-term admission for daily life long-term nursing care
• 24-hour home-visit service• Combined service(Multifunctional long-term nursing care in a small grouphome + home-visit nursing), etc.
 Nursing care prevention service

To live a healthy life forever...

Life support & nursing care prevention

 Facility and home service• Long-term care welfare facility
for the elderly• Long-term care health facility forthe elderly• Communal daily long-term
nursing care for a dementia
patient• Daily life long-term nursing carefor those admitted to a specified
facility, etc.

* Regional comprehensive care systems are expected to beestablished for each area in the sphere of everyday life
(specifically junior high school districts) where necessary
services are provided within about 30 minutes

Golden age club, local government, volunteer, NPO, etc.
Source: Website of Ministry of Health, Labor and Welfare

43

IV Appendix

Regional Healthcare Vision
About Regional Healthcare Vision“Regional Healthcare Vision” is to estimate and stipulate medical demand (number of patients) and required number of beds in2025 for each medical function in each area of the vision (secondary medical area) in order to promote functional differentiationand coordination of hospital wards.
Following this, prefectural governments and medical staff will respond to realize the formulated initiative.

(Hospital Ward A)
Advanced acutestage function

Medical institution

Distortion of
medical balance
and financial
concerns due tooveremphasis on
advanced acutestage

Current hospital bed functions(as of July 2015)

Number of Beds to be Requiredin 2025

Total 1.331 million beds

Total 1.191 million beds (Note 2)
Advanced acute stage
131,000 beds
(11%)

Advanced acute stage
169,000 beds
(14%)

(Hospital Ward B)

Voluntarily
selectmedicalfunction

Acute stage
function(Hospital Ward C)
Recovery stage
function

Decrease by approx. 30%

Acute stage
593,000 beds
(48%)

(Hospital Ward D)
Chronic stage
function

Increase by approx. 3 times

Recovery stage
129,000 beds
(10%)
Decrease by approx. 20%

Prefectural
government

Report current status andfuture direction of medical
functions

Establish “Regional Healthcare Vision” by utilizing reports on medical
functions, etc. and promote further functional differentiation

Acute stage
401,000 beds
(34%)

Chronic stage
354,000 beds
(28%)

Unused, etc.
87,000 beds

Shift to nursing carefacilities, in-home medicalcare, etc.

Recovery stage
375,000 beds
(31%)

Chronic stage
284,000 beds
(24%)

Nursing care facilities,
in-home medical care,etc.
Approx.
300,000 people(Note 2): Total of Cabinet Secretariat’s estimates (June 2015). Within the range of 1.148 million beds
to 1.191 million beds.
(Note 1): The upper chart is prepared by the Asset Management Company based on the “Community Healthcare
Initiative” of the Ministry of Health, Labour and Welfare.

(Source): Prepared by the Asset Management Company based on “Initiatives for Medical/Nursing Care
Reform” (June 22, 2017) by the Ministry of Health, Labour and Welfare

44

IV Appendix

HCM’s Investment Philosophy and Three Features

Three Features

Investment Philosophy

Investment in healthcare facilities for which demandis expected to growServe as a conduit between the nursing care andmedical service industries and the capital markets

Develop a portfolio specialized inhealthcare facilities, for which
demand is expected to growPromote the supply of healthcare
facilities as social infrastructure• Increase in demand due to further advancement of aging society• Upgrades and expansion of healthcare facilities backed bygovernment policy

Strong support from sponsors• Utilization of advanced expertise in “nursing care and medical
service,” “fund management” and “finance” held by SHIPHEALTHCARE, NEC Capital and SMBC

• Securement of property acquisition opportunities by utilizing
extensive networks

We seek to realize a society where
all people can live vibrantly andwith peace of mind••

Stable Cash Flow in the Long Term
Conclusion of long-term fixed-rent lease agreements withcredible operators
Proper portfolio management based on strong relationship with
operators

45

IV Appendix

HCM’s Network

Asset Custody Company
Administrative Agent
Administrator of the Unitholders’Registry

HCM

Sumitomo Mitsui Trust Bank
Healthcare & Medical
Investment Corporation

Accounting Auditor

General meeting of unitholders

PricewaterhouseCoopers Aarata LLC

Board of Directors
Executive Director: Seiji Yoshioka
Supervisory Officer: Yasuo Shida
Supervisory Officer: Sachihiko
Fujimoto

Sponsor Support Companies

Support Companies

Asset Management
Agreement

SMBC Trust Bank Ltd.
RISA Partners, Inc.

Sumitomo Mitsui Finance andLeasing
Yoei

Asset Management Company
Sponsor Support
Agreement

Pipeline Support
Agreement

GinsenKobe Tochi Tatemono
Muromachi Building

Max-Realty Inc.
SMFL Mirai Partners Co.,
Ltd.

Healthcare
Asset Management Co., Ltd.

46

IV Appendix

Overview of Unitholder Special Benefit Plan
Company Name

Benesse Senior Support Co., Ltd.

Sompo Care Inc.

JAPAN LIFEDESIGN Inc.

GREEN LIFE Co., Ltd.
GREEN LIFE HIGASHI NIHON Co., Ltd.

Sawayaka Club Co., Ltd.

AS PARTNERS Co., Ltd.

Proud Life Inc.

(Benesse’s consultation
room for nursing care)

Details of Special BenefitsFree consultation on nursing careDiscount advance payment or monthly feeFree trial move-in (two-days and one-night with meals)Discount initial feesFree trial move-in (two-days and one-night with meals)Tour with free lunchDiscount monthly fee for initial monthFree trial move-in (two-days and one-night with meals)Tour with free lunchDiscount initial feesDiscount monthly feeFree trial move-in (four-days and three-nights with meals)Tour with free lunchDiscount deposit or initial fees

(Note 1): Details of special benefits are for people who are unitholders as of the end of 10th fiscal period and are subject to change.

47

IV Appendix

Profile of Asset Management Company
Organizational Structure

Profile of the Company
Trade name

Healthcare Asset Management Co., Ltd.

Location

3-3 Kanda-Ogawamachi, Chiyoda-ku, Tokyo

FoundedNovember 28, 2013

Capital stock

150 million yen

President andRepresentative

Seiji Yoshioka
SHIP HEALTHCARE HOLDINGS, INC.
NEC Capital Solutions Limited
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Finance and Leasing Company, Limited

Shareholders

SMBC Nikko Securities Inc.
Yoei
GinsenKobe Tochi Tatemono
Muromachi Building

General Meeting of
Shareholders
Audit & Supervisory
Board Member
Board of Directors
Management Committee
33.3%

Representative Director

33.3%
5.0%
4.8%

Compliance Committee

Internal Audit OfficeCompliance Office

4.8%
4.6%
4.6%
4.6%

Investment Department

Asset Management
Department

Financial & Administration
Department

4.6%

Registered as a financial service provider
Director of Kanto Local Finance Bureau (Kinsho) No. 2815
Registration,
license, etc.

License as a building lots and buildings business operator
Governor of Tokyo (2) No. 96339
License as an entrusted agency services for transactions
Minister of Land, Infrastructure, Transport and Tourism No. 85

48

IV Appendix

Profile of Major Sponsors
SHIP HEALTHCARE HOLDINGS INC.
With a stated mission to “create an environment of people protecting life,”
SHIP HEALTHCARE HOLDINGS, INC. focuses on the five business domains of
medical, health, welfare, nursing care and services. Centering around thepartnership with medical institutions, the entire group companies carry out avariety of nursing care and medical service-related businesses, ranging fromconsultation on reconstruction, development, etc. of hospitals and such tooperation of nursing homes and dispensing pharmacy business.

Headquarters
location

3-20-8 Kasuga, Suita-shi, Osaka

Representative

Chairman and CEO: Kunihisa Furukawa
President and COO: Hirotaka Ogawa

FoundedAugust 1992

Capital stock

15,553.01 million yen

Sales

444.0 billion yen on a consolidated basis(fiscal period ended March 2019)

NEC Capital Solutions Limited

As the NEC Group's comprehensive financial services company, NEC Capital
Solutions Limited delivers finance services such as leasing and installment
payments to a broad customer base. In addition, it offers investments,
loans, and advisory services through funds, etc. in the business domains of“companies,” “credits,” and “assets,” mainly through its subsidiary, RISA
Partners, Inc.

Headquarters
location

2-15-3 Konan, Minato-ku, Tokyo

Representative

President: Tomoo Imazeki

FoundedNovember 1978

Capital stock

3,776.88 million yen

Sales

204.1 billion yen on a consolidated basis(fiscal period ended March 2019)

Sumitomo Mitsui Banking Corporation

Positioned as the core company of the SMBC Group, SMBC possesses one of
the strongest sales foundations in Japan as well as the ability to executestrategies quickly, and is capable of providing financial services through its
influential group companies. Furthermore, it boasts one of the strongest
track record in Japan for financing listed real estate investment corporations.

Headquarters
location

1-1-2 Marunouchi, Chiyoda-ku, Tokyo

Representative

President and CEO: Makoto Takashima

Capital stock

1,770.9 billion yen

49

memo

50

Disclaimer
This presentation material contains forward-looking statements including forecasts,
outlooks, goals and plans. These statements are based on the information
available as of the date when this material is prepared (March 17, 2020) andincorporate certain subjective assumptions about uncertain factors that may affectfuture results. Accordingly, these statements are inherently not guarantees of
future performance and actual results may differ materially.
The opinions, outlooks and estimates contained in this material reflect our viewand judgment based on information as of the date when this material is preparedand involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness andvalidity of information contained in this material. It is not promised that
information contained in this material will always be updated.
Contents of this material are subject to change without notice.
This material is not intended as a solicitation for investment. Any investment
decision must be made based on your own judgment and responsibility.

51