Impact Report

Issued in December 2023

Introduction

Index

About the Investment Corporation and the Asset Management Company
Healthcare & Medical Investment Corporation (hereinafter, “HCM”) is a J-REIT specializing in
healthcare facilities listed in March 2015. It is operated by Healthcare Asset Management Co.,
Ltd. (hereinafter “HAM”), its asset management company invested in by Ship Healthcare
Holdings, Inc., NEC Capital Solutions Co., Ltd. and Sumitomo Mitsui Banking Corporation as
main sponsors.
HCM seeks to realize a society where all people can live vibrantly and with peace of mind bycontinuously investing in and stably owning over the long term healthcare facilities, including
facilities and housing for the elderly and medical service-related facilities, etc., which must be
enhanced and expanded to the super-aged society.

１．Investment Philosophy and Impact (Qualitative Targets)
Investment Philosophy and Impact (Qualitative Targets)

Healthcare & Medical Investment Corporation

Representative

Yuji Fujise, Executive Director

Location
Listing date
Listed stock exchange
End of fiscal period

March 19, 2015
Tokyo Stock Exchange Real Estate Investment Trust Securities Market(Securities Code: 3455)
January, July

Corporate name

Healthcare Asset Management Co., Ltd.

Representative

Seiji Yoshioka, President & CEO

Location
Establishment date
CapitalShareholders

Details of businesses

3-3 Kanda-Ogawamachi, Chiyoda-ku, Tokyo
November 28, 2013
150 million yen
SHIP HEALTHCARE HOLDINGS INC. (33.3%)
NEC Capital Solutions Limited (33.3%)
Sumitomo Mitsui Banking Corporation (5.0%)
Sumitomo Mitsui Finance and Leasing Company, Limited (4.8%)
SMBC Nikko Securities Inc. (4.8%)
Yoei Co., Ltd. (4.7%)
Ginsen Co., Ltd. (4.7%)
Kobe Tochi Tatemono Co., Ltd. (4.7%)
Muromachi Building Co., Ltd. (4.7%)
Investment management business

About Impact Report

In recent years, companies are required to independently solve social and environmental issues,
and movements to evaluate the medium- to long-term growth potential of companies based on
non-financial information in addition to the conventional evaluation indicators such as
performance and financial information are spreading.
HCM also decided to issue impact report once a year, in principle, as the first J-REIT to raise
funds through social finance in February 2019. This report shows the status of allocation of thefunds and the actions by HCM and HAM, the Asset Management Company, to solve social issues.
Reporting period
Issue period

From November 1, 2022 to October 31, 2023
Once a year in principle (every December)2

Policy on Actions for ESG

4

Environmental Performance Targets/Results

5

External Certifications

5

Initiatives based on TCFD recommendations

6

Basic Policy for Environment

10Environmental Initiatives at HCMʻs Properties

10

Environmental Initiatives at Warehousing Stage

11

Improving resilience (adaptability to disasters, etc.)

12

Use of Environmentally Friendly Materials

12

Stakeholder Engagement

13

Tenant Engagement

13

４．Social

3-3 Kanda-Ogawamachi, Chiyoda-ku, Tokyo[Profile of the Asset Management Company]

Establishment of organization/promotion system

３．Environment[Profile of the Investment Corporation]
Corporate name2

２．Policy on Actions for ESG

System Investment Utilizing ICT

14

Effects of Introducing EGAO link at each property (July 2019 - September 2022)

15

Initiatives in Collaboration with the Operators

17

Initiatives in Collaboration with the Business Partners

19

Positive Impact of Investing in Healthcare Facilities

20

Initiatives at HAM

21

Governance System to Ensure Appropriate Asset Management24

５．GovernanceInitiatives at HCM and HAM

25

Compliance and Risk Management Systems

26

SDGs Social Finance Framework

28

JCR Social Finance Evaluation

28

６．Social FinanceStatus of Allocation of Social Loan and Social Bond

29

Status of Social Finance（as of the end of October,2023）

29

７．Outcome Indicators
Ratio of Housing for the Elderly to the Elderly Population

30

Change in the Acquisition Amount and Number of Healthcare Facilities in the J-REIT Market

30

８．Output Indicators
Properties Acquisition and Disposition during the Reporting Period (November 1, 2022 October 31, 2023)
Properties Acquisition during the Reporting Period (November 1, 2022 - October 31, 2023)

31

31

Portfolio Map

32

Summary of Buildings and Their Leasing Status (as of the end of 17th FP)

33

Overview of Facilities and Housing for the Elderly (as of the end of 17th FP)

34

Overview of Medical Service-Related Facilities (as of the end of 17th FP)

35

Earnings Performance (as of the end of 17th FP)

35

Summary of Appraisal Report (as of the end of 17th FP)

37

Capital Expenditures of Assets Under Management (as of the end of 17th FP)

38

Company Profile of Operators (as of the end of 17th FP)

38

９．Current Status and Issues Surrounding Medical and Nursing Care
Various Issues Derived from Declining Birthrate and Aging Population

39

Various Issues in Nursing Care

41

Actions by the Government and Local Governments

421

１．Investment Philosophy and Impact (Qualitative Targets)

２．Policy on Actions for ESG

Investment Philosophy and Impact (Qualitative Targets)

Establishment of organization/promotion system

HAM recognizes energy conservation and CO2 emission reduction in "Basic Policy on ESG",
as important environmental issues for properties owned by HCM, and commits to addressingthese issues. In addition, recognizing that natural disasters, such as those caused by climatechange, can have a significant impact on the residents and users of facilities, HAM has
established a policy for ensuring resilience.

Realization of a Society Where All People Can Live Vibrantly and with Peace of Mind
HCM aims to serve as a conduit between the nursing care and medical service industries inwhich social needs are expected to increase and the capital markets, based on theenvironmental awareness that upgrading and expansion of healthcare facilities is further
required in order to respond to the growing demand for medical and nursing care services.
In other words, HCM aims to realize a society where all people can live vibrantly and withpeace of mind as well as secure stable revenue and achieve steady growth of assets undermanagement by promoting appropriate maintenance and management and new supply ofhealthcare facilities through stable investment and ownership of healthcare facilities with the
keywords of “nursing care," “medical service” and “health."

HAM has established the "Regulations for Sustainability Promotion System" in order to take acompany-wide view of these issues and to set specific targets and measures. The
Regulations stipulate internal systems, information disclosure, and other matters to ensure asustainability promotion system as follows.
・President & CEO is designated as the "Chief Officer of Sustainability (hereinafter "Chief
Officer")" and Head of the Asset Management Department and Head of Finance &Administration Department are designated as the "Executive Officer of Sustainability(hereinafter "Executive Officers")". The "Chief Officer" and "Executive Officers" oversee theplanning, formulation, and implementation of specific measures to address important issues,
including climate change-related risks.
・"ESG Committee" has been established to consider and formulate various sustainabilityrelated policies, targets and measures.
・ HAM has formulated an "EMS (Environmental Management System) Operation Manual,"
which stipulates details for operating "Basic Policy on ESG", "Regulations for Sustainability
Promotion System", and each policy, and is used to establish, operate, and maintain an EMS
based on the PDCA cycle.
HAM Website / Basic Policy on ESG
https://www.hcam.co.jp/pdf/esg.pdf
Organization Chart as of November 2023 (ESG Decision Making System)

Chief Officer（President & CEO）

＜ESG Committee＞
Chairperson（Full-time director, Executive Officer of Performance and Executive Officer of Management）

Executive Officer of Management（DEI）

Member ofInvestment
Department

Member of AssetManagement
Department

Executive Officer of Performance（TCFD）

Member of
Healthcare
Business Promotion
Department

Member of Finance& Administration
Department

Compliance Officer

2２． Policy on Actions for ESG
Policy on Actions for ESG
ESG Promotion System・The Chief Officer of Sustainability puts in place systems forpromoting sustainability and supervises the proposal andimplementation of various policies, targets and measures
Chief Officer of・Sustainability promotion items include analysis of climate
President & CEO
Sustainabilitychange-related risks and opportunities at HCM,
establishment of respect for human rights and DEI (diversity,
equity, and inclusion) system at HAM and planning andimplementation of policies, targets, and measures of those・The Executive Officer of Sustainability Performancesupervises the planning and implementation of various
measures for the promotion of sustainability
Executive Officer of Head of Asset・Based on the analysis of climate change risks andSustainability
Management
opportunities, oversee the planning and implementation of
Performance
Department
various measures related to climate change-related risks andopportunities
・The Executive Officer of Sustainability Management puts inplace systems, regulations, etc. for promoting sustainability
and supervises the planning and implementation of
disclosure measures
Executive Officer of Head of Finance・Based on the analysis of current issues regarding respect
Sustainability& Administration
for human rights and DEI (Diversity, Equity, and Inclusion),Management
Department
oversees the establishment of systems and formulation ofregulations related to respect for human rights and DEI, as
well as the planning and implementation of various
measuresPromotion process to solve issues

In accordance with the "EMS Operation Manual," HAM sets environmental targets for energy
consumption, greenhouse gas (GHG) emissions, water consumption, and waste in theoperation of its properties monitor actual results, analyze predictions and actual results, and

ESG Committee
Chairperson

Either a full-time director, the Executive Officer of Performance or the Executive
Officer of Management, designated by the Chief Officer

Members(1) Full-time director(2) Executive Officer of Performance(3) Executive Officer of Management(4) Member of Asset Management Department(5) Member of Investment Department(6) Member of Finance & Administration Department(7) Member of Healthcare Business Promotion Department(8) Compliance Officer(9) Other person appointed by the Chairperson

Frequency of
meetingAt least once a month in principle

Reporting Process to Management

・ In principle, the ESG Committee holds a meeting at least once a month. ESG Committee
reports to the Chief Officer at least once every three months and to the Board of Directors atleast once a year on various policies, targets and measures.
・Whenever Investment Department acquires new properties, it need to report to the "ESG
Committee" on the resilience assurance for the property.


ESG Committee Held

implement and improve measures based on the PDCA cycle, in order to continuously reduce
environmental impact related to climate-related issues.
Promotion process based on PDCA cycle

Fiscal 2021

Fiscal 2022

Fiscal 2023
(first half ofthe fiscal year)

Number of ESG Committee held

4 times

16 times

7 timesNumber of Management review

Once

4 times

Twice

Number of reports to the Board of
DirectorsOnce

4 times

Twice

Twice／
100％

For all executives andemployees: Once／100％
For ESG Committee
Member: Twice／100%

Once／91%

Number of in house ESG training held
/Participation rate3

２． Policy on Actions for ESG
Policy on Actions for ESGMateriality

Issues that need to be solved

Environment

SocialGovernance

Highly relevant SDGs

・Reduction of water resource
consumption
・Energy conservation and reduction of
CO2 emissions
・Response to natural disasters caused byclimate change (Resilience)・Waste management and reduction
・Elimination of the shortage of supply of
housing for the elderly against theelderly population
・Prevention of job separation due tonursing care through the promotion of
supply of nursing care facilities
・Improvement of business efficiency andreduction of work burden for nursing
care staff
・Prevention of abuse of residents andharassment of facility staff
・Response to the deterioration ofbuildings of hospitals, promotion ofearthquake resistance・Work-life balance, health of staff, etc.



ESG External training
TAKENAKA CORPORATION

As part of the training on ESG, theparticipants visited the Takenaka Research& Development Institute of TAKENAKACORPORATION to observe the latest
research and initiatives on ESG throughbuilding and construction.



HASEKO Corporation

As part of training related to the healthcare
industry, HAM invited Naoko Yoshimura,
Director and Operating Officer of HASEKO
Corporation (and Director and Chief
Researcher, Haseko Research InstituteInc.) to a study session on "Current Statusand Future Prospects of the Senior Housing
and Facility Business".

・Transparency in decision making
・Fair transaction (Appropriate
management of conflicts of interest)
・Management of various risks (including
elimination of antisocial forces)(Source) Excerpt from the United Nations Information Centreʼs "SDGs Posters, Logos, Icons and Guidelines")4External Certifications

２． Policy on Actions for ESGEnvironmental Performance Targets/Results

Environmental performance data (CO2 emissions and water consumption) for FY2021 andFY2022 have been third-party assured by Sustainability Accounting Co., Ltd.

Basic Targets



Results

Item

Target2020(standard
year)

2021

2022

Rate ofchangeTotal floorarea-

187,410.50㎡

187,410.50㎡

225,895.97㎡

20.5%

EnergyTo make the total annual energy data
capture rate (%) 100% across HCMʼsreal estate portfolio

59.2%

59.2%

77.3%

30.5%

GHG
（Note2）

To make the total annual GHG emission
data capture rate (%) 100% acrossHCMʼs real estate portfolio

59.2%

59.2%

77.3%

30.5%

Water

To make the total annual water
consumption data capture rate (%)
100% across HCMʼs real estate portfolio

76.7%

76.7%

74.6%

△2.7%

Waste

To make the total annual waste
emission data capture rate (%) 100%across HCMʼs real estate portfolio

-

-

18.2%

-

(Note1) The data capture rate is calculated based on floor area.
(Note2) Abbreviation for Greenhouse Gas. Same below.
(Note3) The base year is 2020, the starting year for the effectiveness measurement is 2021, and the target year is 2025.

Long-term Targets︓
Results

Item

TargetUnit

2020(standard
year)

2021

2022

Rate ofchange

Total
floor
area

-

㎡

187,410.50

187,410.50

225,895.97

20.5%

Consumption（kWh）52,703,500

52,717,242

87,498,748

66.0%

EnergyTo achieve a 5% reduction in total
annual energy consumption on an
intensity basis across HCMʼs realestate portfolio relative to thebaseline year by the target year

Intensity（kWh/㎡）

475

475

501

5.5%

To achieve a 5% reduction in total
GHG emissions generated by energy
consumption on an intensity basis
across HCMʼs real estate portfolio
relative to the baseline year by thetarget year

Emissions（t-CO2e）

9,176

8,906

14,386

56.8%

Intensity（t-CO2e/
㎡）

0.083

0.080

0.082

△0.2%

Not to increase annual water
consumption on an intensity basis
across HCMʼs real estate portfolio
relative to the baseline year by thetarget year

Consumption（㎥）

430,434

433,241

500,774

16.3%

Intensity
（㎥/㎡）

3.0

3.0

3.0

△0.8%

GHG

Water

Third-party assurance of environmental performance data

GRESB Real Estate Assessment
In the 2023 GRESB Real Estate Assessment, HCM
received a“2 Stars” in GRESB Rating, though it was“1 Star” last year, which is based on GRESB Overall
Score and its quintile position relative to global
participants. It also won a “Green Star” designationby achieving high performance both in“Management Component” that evaluates policies
and organizational structure for ESG promotion, and“Performance Component” that assesses
environmental performance and tenant engagementof properties owned.
HCM also received the highest “A Level” for the
GRESB Public Disclosure, which assess the width of
ESG disclosure.



BELS Evaluation
BELS (Building-housing Energy-efficiency Labeling System) is a third-party certification
program to rate houses and buildings in accordance with the Building Energy Efficiency Act's
requirement of effort to label energy efficiency. The rating is based on the BEI (Building
Energy Index) value calculated from primary energy consumption based on national building
energy consumption standards.
Evaluation and labeling are performed by registered housing evaluation agencies, designatedinspection agencies or registered building survey agencies that are members of The
Association for Evaluating and Labeling Housing Performance and have filed to perform BELS
services, and the evaluation results are indicated on a five-star scale (one to five stars).
The following HCM properties have been rated.
Property nameEvaluation

Date of being rated

December 6, 2022
NOAH GARDEN L Grace

December 6, 2022
NOAH GARDEN Season Bell

(Note) The standard year is 2020, the starting year of the effect measurement period is 2021, and the target year is 2025.

5

２． Policy on Actions for ESG
Initiatives based on TCFD RecommendationsSupporting the TCFD Recommendations and participation in the TCFD Consortium

Addressing Climate Change Issues and Information Disclosure
HCM and HAM aim to realize a sustainable society by addressing climate change issues incooperation with various internal and external stakeholders, including operators, hospital
personnel, sponsors, executives and employees, while also focusing on climate change-

In March 2023, HCM and HAM announced their support for TCFD(Task Force on Climaterelated Financial Disclosures) and participated in the TCFD Consortium, an organization ofdomestic companies that support TCFD.

related risks and opportunities specific to the healthcare facilities in which HCM invest, as
well as realizing their basic philosophy.
In addition, information on addressing climate change-related risks and opportunities will be
disclosed about the contents of TCFD recommendations and guidance, as represented byscenario analysis.


Scenario Analysis
In response to the global focus on climate change and extreme weather events, and thegrowing public demand for countermeasures, HAM conducts scenario analyses of the actualand potential impacts on HCM and HAM's business, strategic, and financial planning of thevarious risks and opportunities posed by climate change issues. The following process is used
to analyze scenarios.
The analysis covers all real estate properties owned by HCM, as well as the overall businessof real estate investment management. HAM also aims to analyze the medium-term (2030)
and long-term (2050) impacts.



TCFD

TCFD is a task force established by the Financial Stability Board (FSB) at the request of theG20 to examine how climate-related disclosures and financial institutions should be
addressed. TCFD encourages companies to disclose their "governance," "strategy," "riskmanagement," and "indicators and targets" related to climate change-related risks andopportunities.



Scenario Analysis Process

Step.1

Step.2

•Understanding the characteristics of healthcare
facilities•Setting climate-related scenarios

TCFD Consortium

Through a series of dialogues companies and financial institutions, TCFD Consortium aims tofurther discussion on effective and efficient corporate disclosure of climate-related

Step.3

information and their investment by financial institutions.
Step.4•Establishment of factors affecting business•Assessment of impact on business, strategic,
and financial planning6

２． Policy on Actions for ESG

Climate-related scenarios

Setting Scenario

Initiatives based on TCFD Recommendations


Step.1︓Understanding the characteristics of healthcare facilities

Referencescenariothe facility itself and evacuation response.
Various risks due to climate change have a significant impact on the operator business that
operates the facilities, and the good or bad operating conditions of the facilities also have asignificant impact on HCM's business.
Therefore, HCM and HAM will broadly consider the risks and opportunities from climatechange from a comprehensive perspective, including the perspectives of not only investors

Investm
ent unit
purchase

Usage
rights

C & A
M

M

Rent
payment

Usage
fees

Customers
Residents

H

Operators

Investors

H
Distributions


Rent

⼊ 利

Investment
・Judgment

Management
・
Own

Service・
Operation

Safe・
SecureClimate change-related risks and opportunities
Step.2︓Setting climate-related scenarios
Recognizing that HCM's business could be significantly affected by climate change, as
described in Step 1, the following two climate-related scenarios have been established.
Transition risk refers to the risk of changes in climate change policies, regulations,
technological developments, market trends, and market valuations. Physical risk refers to
the acute or chronic damage caused by disasters and other events resulting from climatechange.

IEA（International Energy Agency）
World Energy Outlook 2020 STEPS

Step.3︓Establishment of factors affecting business

Taking into account the characteristics of the facility in Step 1, the following scenario
worldviews were organized by establishing the key factors that would affect HCM's businessin each of the scenarios in Step 2.
Scenario worldview

居 ⽤
者 者

IEA（International Energy Agency）
NZE2050

4°C scenario

IPCC
IPCC
（Intergovernmental Panel on（Intergovernmental Panel on
Physical risk
Climate Change）
Climate Change）
Fifth Assessment Report RCP2.6
Fifth Assessment Report RCP8.5
・A scenario in which the average
・A scenario in which policies,
temperature rises by about 4 °C by theregulations, and technologicalinnovations are implemented to achieve end of the century, despite thea decarbonized and sustainable society, achievement of national targets inlimiting average temperature increase accordance with the Paris Agreement
Scenario overview
and other policies of individual countries.
to less than 1.5°C by the end of the
century.
・Transition risk is low, but physical risk
is high compared to the 1.5°C scenario.
・Transition risk is high, but physicalrisk is low compared to the 4°C
scenario.

Since healthcare facilities owned by HCM may have certain restrictions on the physicalfreedom of residents and customers, it is important to carefully consider the risks andopportunities for natural disasters brought about by climate change, including the safety ofbut also residents/customers and operators.

Transition
risk

1.5°C scenario

Scenario worldview
Setting Scenario

1.5°C scenario

4°C scenario

・Revision of laws for the purpose of・Strengthen energy conservation
preventing natural disasters andstandards
strengthening of development
regulations
Policy・Strengthen introduction of carbon ・Introduce a carbon tax to the・tax
extent of the current policy
Legal・Public subsidy programs for・Expansion of public subsidy
investment in energy-saving
programs for investment in energyequipment are about the same assaving equipment
the current level
Transition Risks
・No progress in advancing energyand
Technology
・Advanced energy-saving andsaving and renewable energy
opportunities
Development renewable energy technologies
technologies
・Investors and financial institutions
・Investors and financial institutions are closely monitoring physical risks
such as natural disasters andMarket Trends value environmental regulatory
efforts, environmental performance, evaluating efforts to strengthen
and certifications
resilience
・Change in tenant and resident
・Change in tenant and resident
Marketbehavior due to environmental
behavior due to disaster prevention
Reputation
regulations and environmental
orientation
orientation
・Certain increase in wind and flood
Acute・Extensive wind and flood damage
Physical risks
damageand・Average temperature rises about ・Average temperature rises about
opportunities
Chronic
1.5°C, sea level rises 0.2-0.5 m
4°C, sea level rises 0.4-0.8 m

7

２． Policy on Actions for ESG
Initiatives based on TCFD Recommendations
Step.4︓Assessment of impact on business, strategic, and financial planning

The climate change risks and opportunities affecting HAMʻs business under the scenario worldview established in Step 3 were evaluated as follows. Note that the large, medium, and smallvalues in the evaluation results represent HAMʼs qualitative judgment of the respective impact levels. In the future, HCM and HAM aim to quantitatively evaluate each impact level.
Risks and opportunities of the 1.5°C scenario
1.5°C scenario

Risk
MiddleClassifications Classification

Policy・
LegalTransition
Risks and
Opportunities

Classification

Financial Impact

Strengthen energy conservation
standards

Risk

Development costs to achieve standards,
impact on yield levels

Middle・Increased development costs and lower yield levels due to strengthened
standards
・Limited impact on acquisition and properties if investors areunderstanding

Risk

Relative decline in environmental
performance of owned properties

Large

・Decrease in liquidity and market value of properties with poor
environmental performance（Strengthened environmental
performance standards, Mandatory
reporting of renewable energy use and
GHG emissions, Mandatory ZEB/ZEH
compliance, etc.）

Expansion of subsidies and other public
Opportunities assistance programs for environmental
investments
Impact on costs associated with legal
Strengthen introduction of carbon
Risk
compliance (carbon tax, non-fossil
taxcertificate acquisition costs, etc.)

Advanced energy-saving andTechnology renewable energy technologies
Development （Lower installation costs and higher
efficiency through technologicalinnovation）

Chronic

Increase in wind and flood
damage（Climate change will increase wind andflood damage to some extent, but notsignificantly）

Temperature rise/sea level rise

（Average temperature rises about 1.5°C,
sea level rises 0.2-0.5 m）

Assessment Results

Large
Middle・Improve market value while reducing the cost of compliance withstrengthened energy conservation standards by improving environmental
performance through the use of subsidies, etc.
・Increase in cost borne by HCM
・Risk of tenant move-out due to higher operator costs and lower rental
revenues

Risk

Cost implications of new technologies

Small

・Limited increase in investment burden due to lower installation costs
resulting from technological innovations

Opportunities

Reduction of water and utility costs
through improved energy efficiency

Middle・Operator utility costs reduced and potential for increased rents fromgreen leases

Large・Increased financing costs, stricter financing terms, and lower unit prices
if environmental investments, certifications, and portfolio valuation
improvements are not madeMiddle・Lower financing costs and higher unit prices due to environmental
investments, certifications, and improved portfolio valuation

Large

・Risk of decrease in rents due to decline in the liquidity and market valueof the properties or move-out of the operator.

Large

・Stabilize business by improving occupancy rates through better
environmental performance of properties and by increasing thecompetitiveness of properties owned

Low evaluation of environmental
performance and certification by investors（Investors and financial institutions
and financial institutions
Market Trendsclosely monitor environmental
High evaluation of environmental
performance and certification of properties
Opportunities performance and certification by investors
under management）
and financial institutions
Low evaluation of the property's
Tenant/Resident behavior change
Risk
environmental performance by residents（Environmental performance of properties
and tenantsMarketis becoming more important due to
Reputation regulatory compliance, changing
High evaluation of the property's
Opportunities environmental performance by residentsorientation, etc.）
and tenants
Changes in Evaluation Standards

Acute

Physical Risks
and
Opportunities

Factors (Worldview)

Risk

Risk

Disaster recovery response

Middle・Limited disaster recovery costs

Risk

Prolonged recovery period

Middle・Damage to the facility is minor and the period of inactivity is limited

Risk

A certain degree of increase in air
conditioning equipment operation due torising temperatures

Middle・Although air-conditioning equipment operation will increase to a certain
degree, there is no need to renew them, and increase in utility costs will
be limited

Risk

Property falls within hazard area due to sea
level rise

Small・Sea level rise is expected to be to the extent anticipated in existinghazard maps, etc., and the impact on properties owned will be minimal

8

２． Policy on Actions for ESG
Initiatives based on TCFD Recommendations


Risks and opportunities of the 4°C scenario
4°C scenario

Risk
MiddleClassifications Classification
Policy・
LegalTransition
Risks and
Opportunities

MarketTrends

Factors (Worldview)

Classification

Strengthening regulations for the
purpose of natural disasterprevention

Risk

Existing properties fall within the hazard
area

Large

・Risk of reduced rents due to lower liquidity of properties, decline inmarket value, shortening of tenant contract terms, and increased
relocations

Risk

Impact on property acquisition prices due
to revision of property acquisition
standards and store opening standards

Large・Decrease in portfolio yields due to higher acquisition prices of resilient
properties

Risk

Low evaluation of environmental
performance and certification by investors
and financial institutions

Large・Increased financing costs, stricter financing terms and lower unit prices
if resilience is not strengthenedHigh evaluation of environmental
Opportunities performance and certification by investors
and financial institutions

Middle・Increased investment costs for resilience strengthening, but certain
reduction in financing costs

Low evaluation of the property's
environmental performance by residents
and tenants

Large

・Lower liquidity of less resilient properties, decline in market value, andrisk of reduced rents due to operator move-out

High evaluation of the property's
Opportunities environmental performance by residents
and tenants

Large・Potential for business expansion through higher occupancy rates due to
growing needs for improved resilience and increased competitiveness ofproperties owned（Expansion of hazard areas andtightening of development regulations）

Changes in Evaluation Standards（Investors and financial institutions
emphasize resilience of properties undermanagement）

Tenant/Resident behavior
changeMarketReputation （Increasing number of natural disasters
has led to an emphasis on disasterprevention aspects of properties.）

Risk

Financial Impact

Assessment Results

Risk

Human damage to residents and operatorscaused by the disaster

Large

・Compensation for human damage, significant loss of competitiveness ofthe facility due to reputation decline with human damage

Risk

Disaster recovery response

Large・Increased disaster recovery and resilience strengthening costs

Risk

Prolonged recovery period

Large・Decreased rents due to long periods of inactivity
・Decrease in rents due to deterioration of operator financial condition andmove-out

Risk

Significant increase in air conditioning
equipment operation and renewal
frequency due to rising temperatures

Large

・Increased utilities costs due to significant increase in air-conditioning
equipment operation will put pressure on operator management,
increasing the risk of move-out and decline in rents
・Increased costs due to equipment renewal

Risk

Property falls within hazard area due tosea level rise

Large・Unexpected sea level rise causes owned property to fall within thehazard area and the market value to decline

Severe wind and flood damage

Acute（Increased frequency of property
damage due to more severe wind andflood damage）

Physical Risks
and
Opportunities

Chronic

Temperature rise/sea level rise

（Average temperature rises about 4°C,
sea level rises 0.4-0.8 m）

9

３．Environment
Basic Policy for EnvironmentBasic Policy for Reducing Environmental Burdens


HCM &
HAM

Reducing Environmental Burdens

HCM strives for energy conservation and reduction of CO2 emissions by improving energy
efficiency at its properties and introducing facilities that contribute to energy saving. Also,
HCM aims for resource conservation and waste reduction with regard to capital expenditureof its properties and in the formulation and implementation of their repair plans.

Environmental Initiatives at HCM's Properties
Energy Saving Renovation Work

Upgrades to energy-efficient equipment

HCM has sequentially upgraded to energy- and water-efficient equipment in the rooms at its
properties for resident comfort.
Cumulative Upgrade Status by Equipment Type（million yen, excluding tax）
150

HCM &
HAM

Implemented high-efficiency renovation work for airconditioning equipment at "GreenLife
Moriguchi" (2018)

HCM &
HAM

（unit）
1,200

Room air conditioner Cost
Warm water washing toilet seat Cost

125

1,000

Electric water heater Cost
Room air conditioner Number

100

800

Warm water washing toilet seat Number75

 Replace the control board and compressor of the outdoor unit of the common area air
conditioner with ones with high energy-saving performance.
 Introduction of high-performance air conditioning management unit (collective
management of air conditioning in the building, scheduled operation setting) Utilize national subsidy→ Investment amount 13.5 million yen (of which, the subsidy is 6.4 million yen)

600

Electric water heater Number

50

400

25

200
0

0
9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP 18th FP（Note）Figures are as of the end of each fiscal period, except the figures of 18th fiscal period being as of November
30, 2023.

Regeneration of waste CFCs generated in connection with air
conditioning equipment renewal work

HCM &
HAM

HCM is working to reduce the environmental impact of waste CFCs generated in thereplacement of air conditioning equipment by regenerating it so that it can be used as
fluorocarbons again, whereas it would normally be destroyed.


Recycled recovered CFCs for the replacement of airconditioning equipment at Heartland
Kawaguchi Meiseien (2023)

 All 9.2 kg of recovered CFCs (R410ZA) from one system are recycled.
 GHG emissions from the regenerated process are estimated to be about 1/7 of those fromthe destruction process, resulting in a reduction of about 100 kg of CO2 emissions whencalculated based on the 9.2 kg recovered this time.
(Destructive process: 0.1297 tCO2-eq/t refrigerant,
Regenerated process: 0.0184tCO2-eq/t refrigerant)

10

３．Environment
Environmental Initiatives at Warehousing Stage

Environmental Initiatives at HCM's Properties


HCM &
HAM

Green Lease

HCM introduced the green lease agreement with the tenant that rent a whole building of“Kobe Gakuentoshi Building (Hapine Kobe Gakuentoshi)” (2021). This is truly a win-win
initiative which enables both HCM and the tenant to receive economic benefits while
reducing environmental burden.

Sponsors

Introduction of Green Lease Clauses for Warehousing
Properties

For HAM and HCM, sponsors entered into green lease clauses in building lease agreementswith operators at the warehousing stage.

LED construction work

Healthcare & Medical
Investment Corporation

Property owner

Advantage︓
Increase of rent income

Part of reduced electricity cost, etc.
Pay in addition to the rent

TenantAdvantage︓
Reduction of electricity costLight Bulb
Replacement
Cost

Cost reduction
for the tenant
due to the Green
Lease

Sponsors

Initiatives to Obtain Environmental Certifications for
Warehousing Properties

In development projects, HCM is working to obtain CASBEE, BELS and other environmental
certifications with the cooperation of developers, design companies and other parties.

Paid nursing home (to be developed)

Paid nursing home (to be developed)【Sample of initiatives】
PD house Higashiosaka【Sample of initiatives】
Sunny Life Shinkotoni

Green Lease Fee(Add to the rent)Electricity Cost
Reduction ofElectricity Cost

Electricity Cost

Before the
Implementation

After theImplementation

・ As a result of performing work to convert the common-area lighting to LEDs, among thebenefits that the tenant is expected to receive with LED lighting that has a rated life of 40,000
hours, including reduction of lighting equipment-related electricity fees and reduction of bulb
replacement costs, a certain amount will be passed on to HCM in the form of a higher rent in
the lease, based on a green lease fee.
Green lease: Win-win action in which property owner and tenant work together to reduce
environmental burdens such as energy saving of real estate and improve theworking environment, and both sides can benefit from cost reductions, etc.

（Pipeline property）（Pipeline property）

・As a result of monitoring, electricity consumption was reduced by approximately 21,000 kwh(note) per month on average.
(note) This figure is based on the average value measured using a watt-hour meter for common area lights over an 11-month period,
excluding the month of installation, compared to the previous year.

11

３．Environment
Improving resilience (adaptability to disasters, etc.)
Landslide Prevention Measures Prior to Acquisition

Use of Environmentally Friendly Materials
HCM &Operators

Landslide Prevention Measures (Hanakotoba Oppama)Part of the land of Hanakotoba Oppama, which HCM acquired on November 10, 2022, iswithin a landslide special warning zone and safety measures such as spraying mortar andinstalling a retaining wall were thus implemented between the steep east and south slopes.
However, for the sake of long-term investment in the healthcare facility and based on a
study on the impact of collapse of the slope, we decided to take additional prevention
measures to improve resilience and ensure long-term safety.
The free frame method was chosen for its stability and safety, Keikyu Construction Co., Ltd.,
which had experience in landslide prevention in the neighborhood was hired to conduct thesurvey, planning and construction, HAM received a report on the adequacy of the measuresfrom an independent third-party survey company, confirming that there were no problems,and made the decision that HCM would acquire the property.

Renovation Using Environmentally Friendly Flooring
Materials



Environmentally friendly products were used when replacing the floors at GreenLife Moriguchi.

Environmentally friendly flooring materials: Loose Lay Tile LL Free 50NW-EX by TOLI Corporation

Half the amount of products weight consists of recycled materials, which reduced CO₂ emissions(recycled from discarded agricultural vinyl and scrap materials generated during manufacturing).

Using durable UV resin coating to reduce staining eliminated the need for wax maintenanceduring use.
Area of flooring materials used

2,328 ㎡

20.5 Ton
CO₂ emissions

In 2023, visual checks and status reports will be outsourced and conducted once a year after
slope construction. There was no problem.
【Before the implementing of the measures】

Gross weight of flooring materials

17.7 Ton【After the implementing of the measures】

Ratio of recycled materials

HCM &
HAM

Usage of recycled materials

50 ％Reduction ratio of CO₂ emissions

10.2 Ton
Reduction amount of CO₂ emissions

53 ％9.4 Ton*Reduction ratio of CO₂ emissions means the comparison to the same merchandise without recycled materials.

（Image of recycle）（Image of durable UV resin coating ）Implemented
Landslide
Prevention
Measures

Stormwater countermeasure work at HCM's Properties

Implementing stormwater countermeasure work
(Sawayaka Mekarikan)

HCM &
HAM

Facility Environment Improvement (Based on User Feedback) Using easy-to-clean flooring improved sanitation and reduced cleaning work.
 Using flooring that is better for wheelchairs increased activity in the facility.
 The small step from the hallway to the day room has been eliminated.

At Sawayaka Mekarikan, which incurred damage due to indoor flooding above
floor level during torrential rains in western Japan in July 2018, work was
carried out to install new concrete-block walls and U-shaped gutters (2021).
This initiative will proactively prevent the spread of damage when a disasteroccurs, as well as help to ensure the safety and peace of mind of tenants,
employees, and the operator.


Execution of building impact study agreement for earthquake damage

In the event of an earthquake, an agreement was concluded with Tokio Marine dR Co., Ltd.
to survey damage at an early stage.

12

４．Social : Social Initiatives
Stakeholder Engagement

Basic PolicyTenant Engagement
HCM &
HAM

Initiatives for Solving the Challenges of an Aged Society

HAM believes that HCMʼs continuous investment in healthcare facilities and its stable
management of assets will help towards solving the social challenges of an aged society.
Therefore, we have cooperated with various internal and external stakeholders including
unitholders, operators and hospital personnel, the sponsors, executives and employees.


Responsibilities of HCM and HAM to Key Stakeholders

Building Trust with Operators and Understanding Operations

HCM &
HAM

Healthcare facilities are assets that require special know-how and expertise to operate, so inorder to properly evaluate an asset on its business characteristics, it is necessary to evaluate
the operator's business capabilities and management stability.
Building a relationship of trust with the operator is essential for properly conducting due
diligence prior to acquisition and monitoring after acquisition.
HAM actively works to build trust by visiting the healthcare facility and meeting with thefacility manager and others in charge to gain an appropriate understanding of the facility's
operations.

HCM has built a stable portfolio through business due diligence andmonitoring.

Operators
Operations
capability

Management
stability

Business due diligence / Monitoring Quantitative and qualitative assessment and analysis
 Regular visits to facilities and on-site inspections (interviews withfacility directors, etc.)
Business
profile/activities

Financial status

Organizational
management

Business model

Compliance(Abuse prevention
measures)

Staff retainment・Development

13

４．Social : Social Initiatives
System Investment Utilizing ICTIntroduction of “EGAO link”, the system forenhancing efficiency of nursing care services

HCM &Operators

HCM paid 44.6 million yen, the initial cost of capital expenditure for 2 properties owned by
HCM, in a lump sum, while the operator paid for the amount of increase in rent, thereby
leveling the payment of introduction cost and realizing early introduction. (2019)

System of EGAO link

A system enabling understanding of situation, record input and response to calls withsmartphones possessed by the staff by linking sleep sensor, nurse call and electronic medical
chart with nurse call gateway.

・Targeted facilities and amount of capital expenditure
ASHEIM Bunkyohakusan (completed introduction in July 2019, 20.9 million yen)
ASHEIM Hikarigaoka (completed introduction in August 2019, 25.6 million yen)
Total Amount of capital expenditure 46.5 million yenEffect of Introduction of EGAO link

The quality of nursing care services is expected to improve through the improvement ofbusiness efficiency of nursing care staff and the reduction of work burden through ICT
investments.

14

４．Social : Social Initiatives
Effects of Introducing EGAO link at each property(July 2019 - September 2023)
HCM &Operators

Effects of Introducing EGAO link at ASHEIM
Bunkyohakusan
Jul 31, 2019

Sep 30, 2022

Sep 30, 2023

YoY

Compared withinitial introduction

１．Reduction of care staﬀ
①Number of residence

48 people

49 people

46 people▲ 3 people▲ 2 people

1.78︓1

2.00︓1

2.00︓1

±0.00

+0.22

③Full-time employees

14.5 people

16.0 people

14.0 people▲ 2.0 people▲ 0.5 people④Contract employees

2.0 people

0.0 people

0.0 people±0.0 people▲2.0 people⑤Part-time employees

5.6 people

5.7 people

4.4 people▲ 1.3 people▲ 1.2 people⑥Temporary workers

2.0 person

0.0 people

2.0 people+2.0 people±0.0 people⑦Nursing staﬀ

2.8 people

2.8 people

2.5 people▲ 0.3 people▲ 0.3 people⑧Staﬀ per month

26.9 people

24.5 people

22.9 people▲1.6 people▲4.0 people⑨Total working hours

4,734 hours

4,312 hours

4,030 hours▲282 hours▲704 hours②Ratio of staﬀ
to residents

２．Reducing burden of night-shift work for care staﬀ
①Number of night shifts②Total working
hours/ month③Regular rounds

2.5 people

2.0 people

2.0 people±0.0 people▲ 0.5people

40 hours

32 hours

32 hours±0 hours▲ 8 hours

4 times

0 times

0 times±0 times▲ 4 times

20 hours

61 hours

16 hours▲ 45 hours▲ 4 hours

7.2 medications

5.5 medications

5.0 medications▲0.5 medications▲2.2 medications

5.2%

2.2%

2.4%

+0.2%

▲2.8%

３．Improving quality of nursing care services①Individual activities②Polypharmacy③Hospitalization rate

1. Reduction of care staff
Compared with the previous fiscal year, Staff per month increased by 1.6 people, or 282
hours/month.
The operator is continuing the structural review of the personnel structure that has been
underway since the previous year to increase the ratio of full-time employees and decrease thenumber of part-time employees. The natural decrease in the number of part-time care staff had
a major impact because the operator stopped hiring part-time care staff and shifted to asystem centered on full-time, newly graduated employees. This policy will continue in the
coming year, so the operator will continue to see a decrease in part-time care staff and anincrease in full-time employees.

2. Reducing burden of night-shift work for care staff
The operator changed from a system with two night-shift positions and one semi-night-shift
position to a system with two night-shift positions by eliminating the semi-night-shift
position, and as of September 30, 2023, the operator continues to implement this system.
As of September 30, 2023, even after eliminating the semi-night shift, night-shift staff wereable to take 2 hours of break time every day.
Regular inspections were terminated on October 1, 2019, but as of September 30, 2023, theoperator had not received any complaints from clients or suggestions from theauthorities.
3. Improving quality of nursing care services
The operator has worked to improve operations with the goal of securing 2 hours per day, or
60 hours per month, for the provision of individual activities (activities aimed at revitalizing
each resident mentally and physically). When EGAO link was introduced, the number of hours
was 20 per month, but as of September 30, 2023, it had decreased by 16 hours. The reason
for the significant decrease in hours from the previous year was due to new graduate on-thejob training and the transfer of experienced staff to newly opened homes.
The operator has taken steps to improve polypharmacy (harmful effects due to combining
multiple medications) by using sleep sensors and a medical records software database. With atarget of 6.0 or less for the average number of medications used, the operator is promoting
optimal use of medications in accordance with residentsʼ health condition in collaboration withpartner medical institutions and pharmacies, based on sleep data and medical records data.
As a result, as of September 30, 2023, the operator has achieved our target with 1.0
medications below the target.
As an index measuring the results of the initiatives implemented to date, the operator has
tracked “maintaining and increasing length of stay through improvement of the hospitalization
rate. Although the rate is up 0.2% from the previous year, it is down 2.8% compared to theinitial introduction of EGAO link.
■Future Initiatives
Four years have passed since the introduction of EGAO link, but time created by increased
efficiency has not been utilized enough due to personnel reason rather than the system.
Currently, 80% of the care staff is composed of new graduates, and more and more newgraduates are being appointed to the positions of head of service and home manager.
Therefore, the operator recognizes the need to strengthen education and training to stabilize
service management and operations.
In the promotion of science-based care, the operator is also making progress in building caredata, which is being used for lifestyle rehabilitation, polypharmacy, etc. However, the operator
recognizes that in improving activities of daily living, it is difficult to achieve results beyond
maintenance. Another new challenge is to improve the quality of dementia care. The operator
aims to alleviate symptoms and promote visualization in the form of improved data byintroducing new care methods.
A new care method, the "Independence Support Care Method," was introduced in
October 2023. The operator will challenge not only to further improve the quality of time
made more efficient by the introduction of EGAO link, but also to realize more valuable
scientific caregiving by having young employees learn the method, identify issues with the data,
and take actions for improvement. Bunkyohakusan will be one of the key homes to train
service managers who are appointed from new graduates to make this a reality.

15

４．Social : Social Initiatives
Effects of Introducing EGAO link at each property(July 2019 - September 2023)
HCM &Operators

Effects of Introducing EGAO link at
ASHEIM Hikarigaoka
Jul 31, 2019

Sep 30, 2022

Sep 30, 2023

Compared with

YoY

initial introduction

１．Reduction of care staﬀ
①Number of residence

83 people

72 people

75 people+3.0 people▲ 8 people

2.04︓1

1.76︓1

2.16︓1

+0.40

+0.12

③Full-time employees

23.5 people

24.5 people

24.0 people▲ 0.5 people+0.5 people④Contract employees

0.0 people

0.0 people

0.0 people±0.0 people±0.0 people⑤Part-time employees

11.6 people

12.4 people

5.7 people▲ 6.7 people▲ 5.9 people⑥Temporary workers

1.0 person

0.0 people

0.8 people+0.8 people▲0.2 people⑦Nursing staﬀ

4.4 people

3.4 people

4.1 people+0.7 people▲ 0.3 people⑧Staﬀ per month40.5 people

40.3 people

34.6 people▲5.7 people▲5.9 people⑨Total working hours

7,128 hours

7,093 hours

6,090 hours▲1,003 hours▲1,038 hours②Ratio of staﬀ
to residents

２．Reducing burden of night-shift work for care staﬀ
①Number of night shifts②Total working
hours/ month③Regular rounds

3.5 people

3.0 people

3.0 people±0.0 people▲ 0.5people

56 hours

48 hours

48 hours±0 hours▲ 8 hours

4 times

0 times

0 times±0 times▲ 4 times

56 hours

121 hours

34 hours▲ 87 hours▲ 22 hours

7.7 medications

5.6 medications

5.8 medications+0.2 medications▲1.9 medications

7.1%

4.3%

6.9%

+2.6%

▲0.2%

３．Improving quality of nursing care services①Individual activities②Polypharmacy③Hospitalization rate

1. Reduction of care staff
Compared with the previous fiscal year, Staff per month increased by 5.7 people, or 1,003
hours/month.
The operator is continuing the structural review of the personnel structure that has been
underway since the previous year to increase the ratio of full-time employees and decrease thenumber of part-time employees. The natural decrease in the number of part-time care staff had
a major impact because the operator stopped hiring part-time care staff and shifted to asystem centered on full-time, newly graduated employees. This policy will continue in the
coming year, so the operator will continue to see a decrease in part-time care staff and anincrease in full-time employees.

2. Reducing burden of night-shift work for care staff
The operator changed from a system with three night-shift positions and one semi-night-shift
position to a system with two night-shift positions by eliminating the semi-night shift
position, and as of September 30, 2023, the operator continues to implement this system.
As of September 30, 2023, even after eliminating the semi-night shift, night-shift staff wereable to take 2 hours of break time every day.
Regular inspections were terminated on October 1, 2019, but as of September 30, 2023, theoperator had not received any complaints from clients or suggestions from theauthorities.
3. Improving quality of nursing care services
The operator has worked to improve operations with the goal of securing 2 hours per day, or
60 hours per month, for the provision of individual activities (activities aimed at revitalizing
each resident mentally and physically). When EGAO link was introduced, the number of hours
was 56 per month, but as of September 30, 2023, it had decreased to 34 hours.
Note that in fiscal 2022, the average number of hours remained at approximately 70 hours dueto the provision of individual activities such as long-distance outings in September 2022.
The operator has taken steps to improve polypharmacy (harmful effects due to combining
multiple medications) by using sleep sensors and a medical records software database. With atarget of 6.0 or less for the average number of medications used, the operator is promoting
optimal use of medications in accordance with residentsʼ health condition in collaboration withpartner medical institutions and pharmacies, based on sleep data and medical records data.
As a result, as of September 30, 2023, the operator has achieved our target with 0.2
medications below the target.
As an index measuring the results of the initiatives implemented to date, the operator has
tracked “maintaining and increasing length of stay through improvement of the hospitalization
rate.” September 2023 is up 2.6% from the previous year and down 0.2% from the initialintroduction, but averaged 1.49% from April to August 2023. The operator considers this tobe a temporary situation affected by the appearance of several people with poor health due toaging and underlying diseases.
■Future Initiatives
Four years have passed since the introduction of EGAO link, and time created by increased
efficiency has been utilized stably. The operator is making progress in collection of care data,
which is being used for lifestyle rehabilitation, polypharmacy, etc. However, the operator
recognizes that in improving activities of daily living, it is difficult to achieve results beyond
maintenance. Another new challenge is to improve the quality of dementia care. The operator
aims to alleviate symptoms and promote visualization in the form of improved data byintroducing new methods of care. A new care method, the "Independence Support Care
Method," was introduced in October 2023. The operator will challenge not only to further
improve the quality of time made more efficient by the introduction of EGAO link, but also to
realize more valuable scientific caregiving by having young employees learn the method,
identify issues with the data, and take actions for improvement.

16

４．Social : Social Initiatives
Initiatives in Collaboration with the Operators


Efforts to Prevent Medication Errors at Facilities

Operators

Noah Konzer Co., Ltd. has developed a medication administration system called"Fukuyakkun" based on operation of its own facilities, to prevent medication errors by users
and improve the work efficiency of facility staff.

HAM &Operators

Tenant (Operator) Satisfaction Survey

HAM conducts a satisfaction survey of operators of its properties on a regular basis (inprinciple once a year), and shares the results of this survey (requests, issues, etc.) withthe property management company to increase operator satisfaction.
Survey results (conducted in February 2023)

1. Development Background
Medication errors (i.e., mistakenly given or forgotten medications) should never happen, butthey do, mostly caused by human error, and checking to prevent medication errors has
been a major burden for staff at facilities.
2. Mechanism of Medication Error Prevention
When facility staff hand out medication to a resident, they use a mobile terminal to readthree QR codes: 1) for the resident, 2) for the staff and 3) for the medication bag in orderto prevent errors by checking whether the medication is not for the wrong person, being
administered at the wrong time, or a double dose.
In addition, three functions - 1) checking medication status on the computer, 2) checking
the list of missed medications on the mobile terminal, and 3) an email notification of missed
medication - can prevent forgotten medications.

Survey collection rate

Satisfaction NPS（Number of satisfaction－
Number of dissatisfaction ）Answers 46/
46 properties

Plus 31/46 properties■Answer ■No answer■Plus ■Minus■NeutralSatisfaction NPS is calculated by selecting items that are satisfied and items that are
dissatisfied out of 20 survey items. Properties for which the number of satisfied items was
greater than the number of dissatisfied items are designated as plus, and properties forwhich the number of satisfied items was less than the number of dissatisfied items aredesignated as minus.


Installation of negative pressure ventilator

HCM &Operators

As part of interior arrangements to isolate COVID-19-positive individuals or residents
suspected of infection, a simple HEPA ceiling-embedded negative pressure ventilator was
installed in short-term care rooms at Green Life Moriguchi.

3. Effects of Introducing Fukuyakkun
The development of Fukuyakkun has made it possible for one staff member and one mobile
terminal to reliably check medications, improving operational efficiency at facilities wheremultiple staff members used to check medications multiple times.
It also enables centralized management of medication tasks, from medication receipt andinspection to distribution, support and completion checks, reducing time spent on
medication preparation, administration checks and residual medication checks.
The system has been recognized to protect not only residents but also facility staff frommedication errors, so as of November 17, 2023, it has been introduced at 650 facilities inJapan (according to the operatorʼs survey). HCM has installed the system in a total of five
facilities owned by HCM, including facilities operated by SOMPO Care Corporation, in addition
to Noah Konzer Co.,Ltd.



Installation of In-House Power Generation Facilities

HCM &Operators

Of the 48 properties owned by HCM as of the end of November 2023, 46 properties (about
95.8%) are equipped with in-house power generation facilities, forming a system preparedfor emergencies.

17

４．Social : Social Initiatives
Initiatives in Collaboration with the Operators


ESG Promotion Activities for Tenants (Operators)

HAM &Operators

 ESG Workshops for Operators
HCM holds ESG workshops for operators of its properties to deepen their understanding and
to introduce and promote initiatives to address issues based on HAM's Basic Policy on ESG.
 Regular information exchanges with operators
HCM has established regular opportunities to exchange information with operators of HCMowned properties, hearing about issues they are aware of and their ESG-related initiatives,and providing information and ESG-related proposals based on such information.



Activity of watch over students going to and from school and leaving

Hapine Kobe Uozaki Nibankan conducts activities to watch over students going to and fromschool as part of community interaction.
Landscape-friendly exterior wall repainting

In the painting of the exterior walls of "Verde Hotaka," with the cooperation and approval of
the operator, the color of the exterior walls was changed to the color recommended in the"Beautiful community ordinance created by everyone in Kawaba Village" of Kawaba Village,
Tone County, Gunma Prefecture, where this property is located, in consideration of the local
landscape.

 Distribution of SDGs Promotion Leaflets
HCM distributes "SDGs promotion leaflets" to operators of properties it owns to promote theSDGs during facilities use.
 Sponsorship of Music Concerts Organized by Operators
HAM sponsored the Nichii Home Autumn Music Festival 2023 organized by operator Nichii
Carepalace Company in October 2023.
Before paintingContribution to
Local Communities

HCM &Operators

Employment support for people with disabilities

At “Green Life Moriguchi” and “SHIP Senri Building,” hydroponic cultivation of vegetables iscarried out as a job assistance project for people with disabilities.

The existing color wasfine under theordinance, but forreasons of landscaperespect, the color waschanged to a more
recommended color.

After painting

GREEN FARM Moriguchi (GREEN LIFE Co., Ltd.)

18

４．Social : Social Initiatives
Initiatives in Collaboration with the Operators
Combined-Use Facilities (Day Centers)
Property nameCombining Facilities with Daycares for children

As of the end of July 2023, 4 of the 48 properties owned by HCM were contributing to the
local community by housing daycare facilities.
Combined-Use Facilities
Property nameContract area

AQUAMARINE Nishinomiyahama
ASHEIM Bunkyohakusan
Kobe Gakuentoshi Building

SAWAYAKA Tachibanakan

NOAH GARDEN LEGENDSAWAYAKA Mekarikan

NOAH GARDEN L Grace

SOMPO CARE La vie Re Hama-Kawasaki

NOAH GARDEN CASA RICH

Royal Kawaguchi

NOAH GARDEN Season BellHeartland Kawaguchi Meiseien
1769.00㎡



ASHEIM Bunkyohakusan (Kids Harmony Hakusan)

SHIP Senri BuildingCombining Facilities with Clinics, Pharmacies, and Day Centers

The properties owned by HCM include some in which part of the area is leased to businesses
other than facilities/housing for seniors, such as clinics, pharmacies, and day centers.
These areas are open to not only residents of the facility but also the local community ingeneral, providing it with necessary medical and care services.
As of the end of July 2023, 8 of the 48 properties owned by HCM were contributing to the
local community by housing clinics or pharmacies.
Combined-Use Facilities (clinic, pharmacy)
Property nameContract area

Kobe Gakuentoshi Building

Initiatives in collaboration with business partners


Smiling Home Medice Adachi
AIKOEN ICHIBANKAN Building
SOMPO CARE La vie Re Hama-Kawasaki
Hanakotoba Shin-Yokohama

2900.46㎡

Hanakotoba Shin-Yokohama II
Royal Kawaguchi
SHIP Senri Building

New selection and monitoring of business partners(PM companies, etc.)

HCM &Business
Partners

In order to promote environmental and social considerations in our supply chain, HCM
requests our business partners to understand and cooperate with our environmental andsocial considerations when selecting new business partners, as well as through regularmonitoring and information sharing with existing business partners.


Utilization of outside consultants

HCM &Business
Partners

In conjunction with the TCFD policy formulation, HCM is utilizing the support of NIKKENSEKKEI RESEARCH INSTITUTE as our expert consultant in planning and implementing
measures to improve environmental performance through portfolio energy management andprofessional building evaluations such as "energy conservation walk-throughs".

As of the end of July 2023, 9 of the 48 properties owned by HCM were contributing to the
local community by housing day centers.

19

４．Social : Social Initiatives
Positive Impact of Investing in Healthcare Facilities
HCM &Operators

Investment in Affordable Senior Housing

Operators

Efforts to Appoint Female Facility Managers

The scatter plots below show the monthly fees of HCM's main facilities on the horizontal axis
and the deviation compared with surrounding facilities on the vertical axis. Our investments
are diversified rather than skewing toward a high price range.

The percentage of female facility managers at HCM-owned properties reached 27.7% in
FY2023, and women are being actively promoted to managerial positions.

In particular, the facilities with reasonable monthly fees for their area (the lower-left shadedarea) are not only price-competitive but also affordable to a wide range of elderly people.
HCM defines these facilities as affordable facilities.

Proportion of Female Facility Managers at Properties Owned by HCM (Note1)
Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Fiscal 2023

HCM and HAM believe that investing in these affordable facilities for the elderly can contributeto the development and revitalization of communities where people can continue to live.

Number of target
properties (Note2)

34

35

36

47

47

Number of male

23

23

25

32

34

67.6%

65.7%

69.4%

68.1%

72.3%

11

12

11

15

13

32.4%

34.3%

30.6%

31.9%

27.7%

Very
low
price

70

Low
price

Medium priceHigh priceMale ratio
Number of female

Deviation of usage fees from surrounding facilities

Female ratio

65(Note1) Created based on the disclosure statement of important matters for each facility obtained by HAM every
fiscal year.
(Note2) Covers properties owned by HCM at the end of each year, excluding Niigata Rehabilitation Hospital.
“SHIP Senri Building” covers Well House Senri-Chuo, a pay nursing home with care services.

60

55

50

45

40

35

30
100

150

200

250

300

350

400

450

500

Monthly usage fees (thousand yen)
Data source: Prepared by HAM based on "Paid Nursing Home Product Data: Average Monthly Costfor 60-month Nursing Care Residents" and "Average Monthly Cost for 120-month Independent
Residents" by Tamura Planning & Operating.

20

４．Social : Initiatives aimed at HAM Executives and EmployeesInitiatives at HAM

In order for employees to improve their professional skills, HAM recommends the acquisitionof qualifications that are closely related to our business, such as a Real Estate Notary licenseor ARES Certified Master license.



HAM

Human Capital Development


Human Capital Development Initiatives / Framework for Ensuring that Executives andEmployees Are Suitably Motivated

HAM also encourages active participation in outside seminars.
Number of Employees Holding Qualifications as of the End of October 2023
（including employees on temporary assignment from the sponsors, etc.)

Personnel Data (Diversity & Inclusion)

Ratio

Real Estate Notary

13

59.1%

ARES Certified Master

10

45.5%

First-Class Architect

1

4.5%

Property Manager

3

13.6%

2

Real Estate Consulting Master

1

4.5%

19

17

Certified Building Administrator

3

13.6%

94.7%

95.0%

81.0%

Small and Medium Enterprise Management Consultant

1

4.5%

1

1

1

4

Certified International Investment Analyst

1

4.5%

5.9%

5.3%

5.0%

19.0%

2

9.1%

Number of manager

6

7

7

7

Chartered Member Analyst of the Securities Analysts Associationof Japan
Medical Management Specialist, Second Grade

1

4.5%

Number of male

6

7

7

7

100.0%

100.0%

100.0%

100.0%

Medical Management Specialist, Third Grade

4

18.2%

0

0

0

0

0.0%

0.0%

0.0%

0.0%

2

1

4

7

1

0

0

4

5.9%

0.0%

0.0%

19.0%

27.5

25.6

35.9

30.2

3 years and0 months

3 years and4 months

3 years and3 months

4 years and
11 months

16.3

10.9

11.2

13.7

71.1%

53.3%

56.1%

70.8%

100%

100%

100%

100%

0%

0%

0%

0%

Number of executives
and employees (Note1)(Number of directly hired
executives andemployees)(Number of assigned
employees)
Number of male
Male ratio
Number of female
Female ratio

Male ratio
Number of female
Female ratio
Number of new hires
Number of employees
leaving the company
Annual turnover rate
(Note2)Average monthly
overtime hours
Average employment
Average paid leaveacquired
Acquisition Rate
Health examination /screening rate
Occupational injury
frequency (Note3)

Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

17

19

20

21

10

11

15

19

7

8

5

15

17

94.1%

(Note1) Numbers of employees are as of the end of each fiscal year (March 31).
(Note2) The ratio of employees leaving the company to total employees as of the end of each fiscal period(March 31) are indicated.
(Note3) Occupational injury frequency = Number of occupational injury ÷ Total actual working hours × 1,000,000

Education and training expenses per person
Fiscal 2022

55,248yen

 Actions Aimed at Securing Human Resources
HAM has continued to consider new hires for the purpose of ensuring that we have sufficienthuman resources and to promote the development of an employee-friendly working
environment, such as actively encouraging employees to take paid leave (paid leave usage
rate in FY2022: 70.8%), with the aim of improving the motivation of employees andexecutives and retaining them on a long-term basis. HAM has set a goal of 100% paid leave
utilization in FY2023, and is working to ensure that employees plan to take their paid leave.
In addition, as part of our human resources strategy, HAM is working to enhance our asset
management operations by accepting highly specialized employees with diverse backgrounds
from the sponsor companies.
 Initiatives for Fair Personnel Evaluation
HAM has revised its personnel evaluation system, clarifying the roles and abilities required
for each employee level, to evaluate job performance, base element, and comprehensive
achievement of three performance targets which consist of single-year targets, mediumterm targets and skill development. The final evaluation for the year for each employee isdetermined through regular interviews with and feedback from primary and secondary
evaluators, making it a fair personnel evaluation process.

21

４．Social : Initiatives aimed at HAM Executives and Employees
Initiatives at HAM

Fiscal2021

Fiscal2022

Fiscal2023

Number of compliance workshops

23

22

15

Number of participation in external
compliance workshops

26

17

10

(Note) The number of compliance workshops held in fiscal 2023 and the number of participants in external training
are based on the actual number of meetings held and participated in from April to November 2023.

Fiscal 2021
（Number ofparticipants/
Participationrate）(Note)Fiscal 2022

Compliance program of each fiscal year

21 /100％

22 /100％

22 /100％

FSA Administrative Guidelines, Supervisory
Guidelines, Basic Policy on Securities Monitoring,etc.

21 /100%

19 /100％

22 /100％

Basic Policy on Customer-Oriented Business
Operation

Fiscal 2022

Fiscal 2023

Management of Personal Information and Data

21 /100％

20 /100％

22 /100％

Disclosure / Fair Disclosure

20 /100％

19 /100％

22 /100％

Regulations on Conduct under the Financial
Instruments and Exchange Act, Issuance
Disclosure and Distribution Disclosure

20 /100％

18 /100％

22 /100％

Appropriate Management of Related Party
Transactions and Conflicts of Interest

20 /100％

19 /100％

22 /100％

Accidents, Scandals and Clerical Errors

21 /100％

20 /100％－

Complaint Handling and Financial ADR System

22 /100％

18 /100％－

Prevention of Money Laundering andConfirmation at Time of Transaction

20 /100％

20 /100％－

FATCA

20 /100％

21 /100％－

Reporting Obligations to FSA, MLIT, etc.,
Statutory Ledgers and Licensing Matters

20 /100％

21 /100％－

Rules on Entertainment/Gifts and Prevention ofBribery

20 /100％

18 /100％

22 /100％－

18 /100％

22 /100％

Items of Special Note Regarding Real Estate
Fund Managers

20 /100％－

Confirmation Tests (first quarter)

16 /100％

16 /100％

22 /100％

Confirmation Tests (second quarter)

18 /100％

14 /100％

22 /100％

Confirmation Tests (third quarter)

18 /100％

15 /100％－

Confirmation Tests (fourth quarter)

18 /100％

19 /100％－

Main theme of compliance workshops

In order to foster and improve self-directed compliance awareness, we hold monthly
compliance workshops and rigorously implement customer-oriented business operations(fiduciary duty) for all executives and employees.

Main theme of compliance workshops

Fiscal 2021
（Number ofparticipants/
Participationrate）(Note)－

19 /100％

Fiscal 2023－

Human rights
Exclusion of anti social force

21 /100％

22 /100％

22 /100％

Insider Trading Regulations and Corporate
Related Information Management System

21 /100％

20 /100％

22 /100％

Information Management as an AssetManagement Company

21 /100％

20 /100％

22 /100％

Prevention of misdirected e-mails

Example clerical error of JITA

－

－

－

－

22 /100％

22 /100％(Note) The participation rate is calculated using the number of full-time directors and employees as the denominatorand the number of participants as the numerator. Follow-up training is provided for those absent on the dayof the workshop, and the number of participants includes those who attended the follow-up training.

22

４．Social : Initiatives aimed at HAM Executives and Employees
Initiatives at HAM
 Arrangement of the Office Environment
HAM implements the following in an effort to establish an environmentthat is conducive to the work of employees.
・Introduction of a system of remote working
・All executives and employees are lent laptops with securecommunication environments via VPN connection.
・Monitors, etc. are loaned to those who wish to ensure a working
environment equivalent to an office.
・Installation of multiple low-concentration ozone generators (Airness)
・Installation of large-scale monitors in meeting rooms

Introduction of the online
meeting system

HAM provides a vacation system which includes leave for weddings, funerals, pregnancy,
childbirth, childcare, sick or injured children, family care and sick.
 Premium Friday
As part of our efforts to reform the way we work, we encourage employees to leave theoffice early on "Premium Friday" (the last Friday of the month).

In September 2022, HAM implemented a paperless system for meeting materials at its
officer meetings, Management Committee meetings and Board of Directors meetings inorder to reduce environmental impact. As a result of this initiative, the total number of
paper sheets used for approximately three months was reduced by 13,259 sheets (about
28.0%) year-on-year.
Total number of paper sheets

50,00057,09555,744

YoY-13,259
47,43630,000-5,67020,00010,000-15,000

53,10640,000-2,638

HAM has introduced a cumulative investment system that allows directly hired executives
and employees to purchase HCM investment units. It is expected that the introduction of thissystem will assist executives and employees with asset-building and make them more
conscious of improving business performance, which HAM believes will contribute to thecontinuous growth of HCM and improved unitholder value. Moreover, with the aim ofpromoting investment unit acquisition by employees and thereby enhancing the impact of
the system, we began providing financial incentives in April 2021.
 Vacation System

 Digitization of Internal Meeting Materials

60,000 Introduction of Cumulative Investment System-10,000
34,177-5,000-1,35100
2019 FP
2020 FP
2021 FP
2022 FP
2023 FP(Note) Calculated based on the total for the three-month period from August 21 to November 20 of each fiscal year.

 Environmentally friendly asset management reporting
HAM selects environmentally friendly ink and paper for the Asset Management Report, andhas reduced the size of the Asset Management Report since the fiscal year ended July 31,
2023, thereby reducing the amount of paper used.

 Health Examinations
Health examinations with items of inspection exceeding the legal requirement are
conducted once every year.
 Employee Satisfaction Survey
HAM conducted a questionnaire survey on employee satisfaction in and 2021 through a thirdparty investigation agency in order to understand employeeʼs perceptions of work as well as theconditions of the workspace and to realize an office environment that is conducive to work.
Employees were questioned anonymously on items such as resonance with the corporate
philosophy, worthwhileness of work and personal relationship and atmosphere of the workplace.
The results of the survey were shared with all employees. We will continue introducing measuresthat will further increase the satisfaction of employees.
 Employee Opinion Exchange Meeting
HAM holds meetings for employees to exchange opinions with each other, excluding
managers, to improve engagement.
 Initiatives for DEI (Diversity, Equity and Inclusion)
HAM respects diverse personality of each employee, and strives to establish and improve an
employee-friendly working environment and equitable human resource support system thatmaximizes each employee's ability. These initiatives will not only increase job satisfaction ofeach employee but also enhance engagement between the company and employees. HAM
believes that these initiatives will contribute to improving unitholder value over the long term.
Therefore, HAM has set targets as follows: Basic Targets: Basic Policy on Respect for Human Rights
HAM has established a "Basic Policy on Respect for Human Rights" to continuously promote
activities that respect human rights.
 Benefits and work-life balance Introduction of Corporate Defined Contribution Pension Plan
HAM has introduced a corporate defined contribution pension plan as one of its benefit
programs, with the aim of contributing to the lifelong stability and welfare of its executives
and employees.

Achieve 100% participation rate of full-time executives and employees in training.
Achieve 100％ employee satisfaction survey collection rate.
 Long-term Targets:
Deepen the understanding of DEI among executives and employees, thoroughly analyze
current issues, and establish internal system to secure DEI by reviewing various rules andsystems.
The training was outsourced as an in-house workshop on DEI, and the participation rate was
95.5%.

23

５．GovernanceAppropriate Management of Conflicts of InterestGovernance System to Ensure Appropriate Asset Management

Corporate GovernanceCorporate Governance

HCM &
HAM

Related party is defined in broader terms than interested party, etc. under theInvestment Trust Law, and established a system to carry out transactions after
conducting rigorousexaminations.
For details of the decision-making process, please refer to “Decision-Making Flow
Concerning Acquisition of Assets Under Management" on the next page.
interested party, etc.
under the Investment
Trust Law

The institutional operation of HCM is conducted by the General Meeting of Unitholders
comprisedof HCMʼs unitholders in addition to the Board of Directors comprised of one executive
directorand two supervisory directors, as well as the accounting auditor.
Directorsʼ compensations are stipulated by the Articles of Incorporation. The maximum
compensation for the executive director is 500,000 yen per month per person and the monthly
compensation is determined by the Board of Directors. The maximum compensation for thesupervisory directors is 500,000 yen per month per person and the monthly compensation isdetermined by the Board of Directors.
Furthermore, as employment is forbidden to HCM by the Act on Investment Trusts andInvestment Corporations, HCM does not employ any employees but entrusts the management of
its assets to the Asset Management Company.
From November 1, 2020, the system in which President & CEO of HAM concurrently serves as
executive director of HCM was dissolved.
Asset managementcompany

Yuji FujisePresident & CEO

Seiji Yoshioka

Board of Directors Meetings, Executive Director and Supervisory Director

Name

Profession・Expertise

GenderYears in
office3 yearsand1 month

Executive
Director

Yuji Fujise

Shimada Hamba & Osajima Lawyer

Supervisory
Director

Sachihiko
Fujimoto

Hayabusa Asuka Law Offices
Counsel, Certified public accountant

Male

9 years

Supervisory
Director

Kaori Sato

Torikai Law Office Partner, Lawyer

Female1 yearand1 monthMale

Total compensation
16th Fiscal Period(ended Jan. 2023)

17th Fiscal Period(ended Jul.2023)
233,430 thousand yen(Note) Apart from the above, 12,540 thousand yen and 14,500 thousand yen of asset management fees weregenerated in the 16th fiscal period (ended Jan. 2023) for property acquisition or disposition included in thebook value of real estate, etc.

Title

Name

Accounting
auditorPricewaterhouseCoopers
Japan LLC

Total compensation
16th Fiscal Period(ended Jan. 2023)

17th Fiscal Period(ended Jul.2023)

11,000 thousand yen 11,000 thousand yen Compensation for the Directors

The supervisory directors were replaced at the General Meeting of Unitholders held in October
2022. Supervisory Director Shida, who served four terms, retired and Supervisory Director Sato
was appointed. The executive directors and supervisory directors attended all board meetings held.
Title

 Compensation for the Asset Management Company

 Compensation for the Auditor

Appropriate
Check and Balance
Executive Director

Fee for property acquisition from related party or property transfer to related party
Acquisition or transfer price × 0.5％（usually 1.0%）is upper limit.

246,843 thousand yen Separation of Executive Director of HCM and President & CEO of HAM

Investment
corporation

related party

Status of Attendancein Board of Directors
Meetings
12 times/12 times（100％）
12 times/12 times(100%)
12 times/12 times(100%)(Note 1) The term of office is from the time of appointment to the end of November 2023.
(Note 2) The number of board meetings attended is based on the actual number of board meetings held from November
2022 to November 2023 during the tenure of each director.

Title

Name

Executive
Director

Yuji Fujise

Supervisory
Director

Sachihiko
Fujimoto

Supervisory
Kaori Sato
Director

16th Fiscal Period(ended Jan. 2023)

17th Fiscal Period(ended Jul.2023)

18th Fiscal Period(ended Jan.2024)（Note）
Monthly
Total
Monthly
Total
Monthly
Total
Compensation Compensation Compensation Compensation Compensation Compensation

300
thousandyen
250
thousandyen
250
thousandyen

2,100
thousandyen
1,500
thousandyen
750
thousandyen

400
thousandyen
250
thousandyen
250
thousandyen

2,400
thousandyen
1,500
thousandyen
1,500
thousandyen

400
thousandyen
250
thousandyen
250
thousandyen

2,400
thousandyen
1,500
thousandyen
1,500
thousandyen(Note ) Total compensation for the 18th fiscal period is an estimated amount.

24

５．GovernanceInitiatives at HCM and HAM
Decision-Making Flow Concerning Acquisition of Assets Under Management

Investment Department

Proposal of acquisition plan by the Investment Department

External Members of the Management Committee and Compliance Committee

The members of HAMʼs Management Committee and Compliance Committee are comprisedof outside experts selected by the Board of Directors. Checks for conflicts of interest are set
in place and the fairness, objectivity and validity of the committeesʼ decision making are
ensured. The external members of the Management Committee and Compliance Committee
are as follows.

Compliance Committee(Property due diligence by the Investment Department)
When the candidate asset under management to be

When the candidate asset under management to be

Name

GenderProfession／ Title

voting
right

veto
right

Chairperson Hiroyuki Matsumoto

Male

HAM／ Compliance Officer○○

External
memberEriko Matsuno

FemaleAttorney／ Tokyo J Law Offices Representative○○

MemberSeiji Yoshioka

Male

HAM／ Representative Director○－

MemberKyosuke Umezu

Male

HAM／ Full-time Director○－

Compliance Officer (CO) [ Responsible for compliance ]MemberHisatoshi Ishiwara

Male

HAM／ Full-time Director○－

Confirmation by Compliance Officer of existence or non-existence of issues on legal compliance and other compliance

MemberAtsushi Tanno

Male

HAM／ Director and Chief Investment Officer○－

acquired is a healthcare facility or hospital real estate

acquired is a property other than healthcare facility
or hospital real estate
Healthcare Business Promotion Department or External Experts (if necessary)
Preparation of evaluation reports about the management status of a facility
and submission to the Investment Department(hereinafter, "legal compliance issues")
When the transaction falls under the category of related-party transactions,or if the ComplianceOfficer judges that it is necessary to consider the legal
compliance issues concernig the proposed income plan

Resolution requirements: Resolution by approval of a majority of attending committee members; however,attendance and approval of the CO and external committee member are required.

Management Committee

Compliance Committee[Held prior to the Management Committee meeting when there is a related-party
transaction or legal compliance issue.]
Deliberation and resolution of the existence or non-existence of legal compliance issues by
the Compliance Committee.
Committee members: President & CEO, Full-time Director, Compliance Officer,
External member (External lawyer)
Resolution requirements: Resolution by approval of a majority of attending committee
members; however, attendance and approval of the CO andexternal committee member are required.

Management Committee[The final decision-making body for investment decisions, it deliberates and resolves on HCM's property acquisitions,etc., asdelegated by the Board of Directors.]＊However, if the proposed acquisition plan falls under the category of interested-party transaction, which requires theapproval of HCM's Board of Directors under the Investment Trusts Act, such prior approval will be obtained.
Deliberation and resolution at the Management Committee (The Compliance Officer may order the suspension ofdeliberation and resolution by the Management Committee when it is judged that there are issues such as legal violationin the procedures of proceedings and the content of deliberation.)
Committee members: President & CEO, Full-time Director, Head of each department, External member (External
Licensed Real Estate Appraiser), CO (without voting rights)
Resolution requirements: A resolution must be passed with at least three-fourths of the committee members inattendance and the approval of at least three-fourths of the committee members inattendance (however, the external committee members must approve).
Board of Directors of HAM and HCM
Reportiong to the Board of Directors of HAM and HCM(However, if the proposed acquisition plan falls under the category of transaction with interested party, etc. that
requires approval of HCM's Board of Directors based on the Investment Trust Act, prior approval of the HCM's Board of
Directors shall be obtained.)

Chairperson

Name

GenderSeij YoshiokaMalevoting
right

veto
right

HAM／ Representative Director

○

－

○

○

Profession／ Title

External
memberToshiko Okamura

FemaleLicensed Real Estate Appraiser／ Toukatsu Real
Estate Appriasal Representative

MemberKyosuke Umezu

Male

HAM／ Full-time Director○－

MemberHisatoshi Ishiwara

Male

HAM／ Full-time Director○－

MemberAtsushi Tanno

Male

HAM／ Director and Chief Investment Officer○－

MemberAtsumasa Furuya

Male

HAM／ Head of Financial Management Division○－

MemberKazushige Endo

Male

HAM／ Chief Asset Management Officer○－

MemberNoboru Kushige

Male

HAM／ Chief Healthcare Business Promotion Officer○－

MemberHiroyuki Matsumoto

Male

HAM／ Compliance Officer－○

Resolution requirements: A resolution must be passed with at least three-fourths of the committee members inattendance and the approval of at least three-fourths of the committee members in attendance (however, theexternal committee member must approve).



Ratio of Women and External (Outside) Members in Each Committee
Meeting structure

Ratio of Women

Ratio of External (Outside)
Members

Board of Directors of HCM

33.3%

66.7%

Board of Directors of HAM

0.0%

0.0%

Management Committee

11.1%

11.1%

Compliance Committee

16.7%

16.7%

(Note) The external (outside) ratio is the ratio of outside officers and committee members who are independent fromthe shareholders of the HAM. Independence is determined in accordance with the requirements for outside
directors as stipulated in Article 2, Paragraph 15 of the Companies Act.

25

５．GovernanceCompliance and Risk Management Systems
Compliance


HCM &
HAM

Compliance System

HAM, fully cognizant of the significance of the fact that the asset management it conductswith the assets of HCM constitutes the management of the funds of HCMʼs investors, in orderto ensure the development of an appropriate management structure, has set up theCompliance Office as a division responsible for matters pertaining to compliance of HAM, andhas appointed a Compliance Officer as an individual responsible for supervising matterspertaining to compliance, thereby ensuring the effectiveness of the function of internal
oversight of other departments. The appointment or the dismissal of the Compliance Officer
will be processed through the resolution of the Board of Directors.
The Compliance Officer, as the key person responsible for compliance at HAM, is charged
with establishing and maintaining the internal compliance structure of the company andraising the level of standards awareness within the company with regard to compliance withall applicable laws and rules. Also, the Compliance Officer will promote awareness ofcompliance of executives and employees and disseminate compliance through the planningand implementation of compliance trainings for executives and employees. To those ends,
the Compliance Officer continually monitors to ensure that all operations conducted for theasset management of HCM by HAM comply with all applicable laws and the Articles ofIncorporation of HCM, and exercises supervision over the overall internal complianceenvironment in daily operations.
In view of the importance of the duties of the Compliance Officer, only a person having
adequate investigative and supervisory capacity for ensuring compliance with all applicablelaws, regulations and rules will be appointed as the Compliance Officer.

 Initiatives to Prevent Corruption, Eliminate Anti-Social Forces, and Prevent Money
Laundering and Terrorist Funding
HAM has established a system to strictly prohibit and prevent corruption, such as bribery,money laundering, embezzlement, and other violations of the law. This includes theestablishment of the Rules on Prevention of Bribery, Reception of Gifts and Rules on
Handling of Verifications on Transactions.
As a basic policy for eliminating anti-social forces, HAM stipulates that “it will sever any ties
whatsoever with anti-social forces, reject unjust demands from them, engage in nobackroom deals with and provide no funds to them, and, if necessary, take legal action
against them and adopt a company-wide response to anti-social forces while collaboratingwith specialized external organizations.”
Based on this basic policy, HAM severs all ties with anti-social forces, ensures appropriate
management of HAM, and prevents significant harm to stakeholders, including executives
and employees, and shareholders, and with the aim of fulfilling HAMʼs social responsibilities,
it has established Regulations for Eliminating Anti-Social Forces and Manual for Eliminating
Anti-Social Forces, etc., which stipulate policies and specific procedures for handling theirelimination.
Furthermore, it has established a department for handling anti-social forces and asupervisory officer, and through internal compliance training, it aims to comprehensively
inform all executives and employees about the policies for eliminating anti-social forces andthe methods of handling them.

 Formulation and Execution of the Compliance Manual Establishment of Internal Reporting System

In order to ensure thorough compliance with laws, etc. (referring to laws, ordinances,
regulations and other orders HAM must observe in executing operations, the regulations of
the Investment Trusts Association, Japan (the “Investment Trusts Association”), theregulations of the financial instruments exchange to which HCM is listed, the Articles ofIncorporation of HCM, the Articles of Incorporation and in-house rules of HAM and theagreements concluded by HAM based on such (including asset management entrustment
agreements), etc.), HAM has established the Compliance Rules and the Compliance Manual,
has formulated the Compliance Program, which is a concrete practice plan for realizing
compliance with laws, etc., and will strive to implement compliance with laws, etc. inaccordance with the program.

HAM has established a system for consultation and appropriate handling of reports related toviolations and other questionable acts or facts in relation to laws and other societal
standards and the Compliance Manual (compliance-related information). Both internal andexternal points of contact are in place.
 Compliance workshops
In order to foster and improve self-directed compliance awareness, we hold monthly
compliance workshops and rigorously implement customer-oriented business operations(fiduciary duty) for all executives and employees.

26

５．GovernanceCompliance and Risk Management Systems
Risk Management





HCM &
HAM

Risk Management

With regard to the various risks concerning investment management, HCM observes therules stipulated in the Investment Trust Act and other related laws and regulations. Also,
HAM establishes appropriate company regulations for such risks, sets forth necessaryorganizational structures and educates executives and employees in order to enhance theirmindfulness of compliance, among other measures. The specific initiatives are as follows.
A. HCM
HCM is managed by the Board of Directors comprised of one executive director and two
supervisory directors. The Board of Directors convenes at least once every three months asnecessary to pass resolutions pertaining to matters stipulated by law and HCMʼs Board of
Directorsʼ Rules and report on the status of execution of operations by HAM and executive
director of HCM. This system enables supervisory directors that are independent from HAM
and interested parties, etc. to supervise the status of execution of operations. Also, thesupervisory directors may request reports concerning the operations and financial status of
HCM from HAM, the asset custody company, etc. and conduct necessary investigations.
B. HAM
In order to appropriately manage various risks, HAM has formulated the Risk Management
Rules as company regulations, stipulating that significant risks must be reported to the Boardof Directors without delay. Additionally, HAM has formulated the Related Party Transaction
Rules in order to prevent harm to the interests of HCM, thereby establishing strict rules
against conflicts of interest. Regarding compliance, HAM has established the Compliance
Regulations and the Compliance Manual to promote thorough legal compliance, hasformulated the Compliance Program, which is a concrete practice plan for realizing
compliance with laws, etc., and will strive to implement compliance with laws, etc. inaccordance with the program.
Furthermore, HAM has formulated the Internal Audit Rules to secure adequacy of operations
and promote efficient management, thereby establishing a self-monitoring system.
 Internal Audits
A. Organization and Details of Internal Audits
The internal audits of HAM are conducted by the Internal Audit Office and Internal Audit
Office Manager. Moreover, when the Compliance Officer also occupies the post of Internal
Audit Office Manager, the Head of Financial & Administration Department shall haveauthority over and owe duty for internal audits concerning the operations of the Compliance
Officer and Compliance Office.
(The person appointed to the post of Head of Financial & Administration Department shall be
one with sufficient knowledge and experience for proper execution of internal audits of theCompliance Officer and Compliance Office.)
The internal audits will target all organizations and divisions and their operations.

The Internal Audit Division formulates an internal audit plan upon understanding the conditionsof internal management, risk management, etc. of audited divisions. In principle, internal audits
shall be conducted based on the internal audit plan at least once a year (periodic audits).
However, audits will also be conducted by special order of the Representative Director (special
audits). Special audits shall be prescribed by the Representative Director when it is recognized
to be particularly necessary in cases where, during an internal audit planʼs target period, facts
contrary to the conditions of internal management, risk management, etc. of audited divisions
grasped as of the formulation of the internal audit plan come to light.
When internal audits are being conducted, each division must present and explain documents,
registers, etc. to the Internal Audit Office and Internal Audit Office Manager as requested andcooperate for the smooth implementation of the audit.
B. Remedial Measures Based on Results of Internal Audits
The Internal Audit Office and Internal Audit Office Manager shall notify the audited divisionsof the audit results. The Representative Director may issue recommendations for
improvement to an audited division in light of the audit results. The audited division shallthen prepare an improvement plan and, having effected the improvement, report to theRepresentative Director and Internal Audit Office Manager with regard to the status of
improvement. The Representative Director and Internal Audit Office Manager shall thendeliberate the content of the report, thereby confirming the effective functioning of theinternal audit.


BCP Measures

In preparation for emergency situations that may occur in the course of management of
HCMʼs assets due primarily to large-scale earthquakes, fires, typhoons, storms, flooding,abnormal weather and other natural disasters, other man-made disasters such as terrorist
attacks and cyberattacks, infectious diseases such as novel influenza viruses ordamage/disruption of lifelines, HAM has established a Crisis Management Manual for apolicy of measures of preparation, ensuring of chain-of-command, prevention of spread ofdamage and continuation of important operations for the purpose of promptly ensuring thesafety of executives and employees, reducing risk and damage, preventing an increase ofloss for unitholders and stakeholders, ensuring continuation of important operations andearly recovery, etc.
Also, HAMʼs office, general warehouse, etc. are equipped with three daysʼ worth of
emergencyfood and water for executives and employees and other stockpiles andequipment.
Confirmation of Safety

In order to quickly grasp the situation and safety of executives and employees in a disaster,
HAM has introduced a system of confirming safety using the internet and emails as part ofthe companyʼs crisis management strategy. Safety confirmation trainings are conducted atleast once a year. The participation rate in fiscal 2023 was 100%.

27

６．Social Finance
SDGs Social Finance Framework

JCR Social Finance Evaluation

JCR Social Finance Framework Evaluation The highest evaluation
Social １(F)SocialbondSocialloanDate of issue︓January 30, 2020
Amount of issue︓2 billion yen

Period︓10 years
Interest rate︓0.78%

Social loan balance︓36.15 billion yen(about 97.3% of the loan balance)(As of October 31, 2023)※ New loans after January 2019 are all social loans.

What Is Social Finance?

Social Finance refers to finance with issuance of bonds and loans “that raise funds for new andexisting projects with positive social outcomes." Specifically, it is a financing approach where (i)The use of funds is limited to projects with a high degree of contribution to society, (ii) The funds
are reliably tracked and managed, and (iii) Transparency is secured through reporting after thefund-raising.
ESG financing is showing signs of spreading to various financing tools rather than just bonds inrecent years. There is already encouragement being explicitly made for investment in various
financial instruments, such as the “Green Loan Principles” published by the Loan Market Association
for green projects.
In the “Recommendation from the High Level Meeting on ESG Finance - Toward becoming a big
power in ESG finance-” announced by the Ministry of the Environment on July 27, 2018, promotionof ESG financing that have ESG and SDG contributions as the use of proceeds has been
incorporated as follows:“We understand that a strategic shift toward a decarbonized, sustainable society is exactly thesource of Japanʼs competitiveness and “new growth,” as both the Paris Agreement and Sustainable
Development Goals (SDGs) pursue such a society. Against this backdrop, we have confirmed that it
is essential to develop ESG investments, which are being accelerated ahead in direct finance, into
those with a larger social impact, and to realize ESG financing in indirect finance as well throughcollaborations between regional financial institutions and local governments, etc. with financial
institutionsʼ responses to the global trend in mind… Given Japanʼs financial structure centered onindirect finance, encouraging considerations to ESG in loan will also be a key to expansion ofsustainable and inclusive ESG finance.”Establishment of SDGs Social Finance Framework

HAM established the SDGs Social Finance Framework limiting the use of funds to investments witha high degree of social contribution when HCM raises funds through borrowings or issuance ofbonds as social finance as well as defining the confirmation and management system of the statusof allocation of procured funds and reporting system of the effect of social contribution, etc.
The framework limits the use of funds procured from social financing to new investments inhealthcare facilities and refinancing. In addition, it also defines the criteria and process of project
selection, fund management method, status of allocation of funds and reporting on social outcome.

What Is JCR Social Finance Evaluation?

JCR Social Finance Evaluation is an evaluation performed by Japan Credit Rating Agency, Ltd.
(hereinafter, “JCR”) by confirming that the use of funds are in alignment with the Social Financecomponents of the principles published by the International Capital Market Association (ICMA)and consistent with the SDGs. In the confirmation and evaluation, the "Social Bond Principles"and "Mapping of SDGs and Social Project Categories" published by ICMA are used as referenceindicators in the evaluation, and such include the "Social Finance Framework Evaluation," anevaluation for the framework of fund procurement, “Social Loan Evaluation," an evaluation forborrowings, and “Social Bond Evaluation," an evaluation for bonds

Acquisition of First Social Finance Evaluation by a J-REIT

HCM was the first J-REIT to acquire social finance evaluation by JCR for the social financeframework and the social loans through which funds were procured in February 2019 (total of
11.75 billion yen). The impact of HCMʼs businesses on the society, the management method of
the procured funds, the information disclosure system, etc. were highly evaluated, and HCM
received the highest evaluation for each item. For details, please refer to the evaluation reporton JCRʼs website.
Evaluation item
Social Finance Framework Evaluation
Social Loan Evaluation

ResultSocial1 (F)Social1

JCR website
https://www.jcr.co.jp/en/First issuance of social bond of HCM

When the refinancing in January 2020 , HCM issued the Social Bond for the first time with an
aim to expand fund procurement methods by the expansion of its investor base which isproactively conducting ESG investment, as well as to improve unitholder value over the medium
to long term by contribution to the realization of a sustainable society set in the SDGs.
Actions

Targets of
SDGs

Expected effects of social contribution
・ Elimination of the shortage of housing for theelderly against the elderly population
・ Promotion of earthquake resistance at hospitals
・ Promotion of the shift of hospital functions torealize a sustainable society

Continuous investment
in healthcare facilities
and stable asset
management

・ Promotion of social advancement of women who
were forced to leave their jobs to be engaged innursing care by promoting the supply of nursing
care facilities
・ Reduction of work burden of nursing care staff
through ICT system investments in nursing carefacilities28

６．Social Finance[Borrowings for Refinancing]

Status of Allocation of Social Loan and Social Bond

LenderStatus of Use and Procurement of Funds（November 1, 2022 - October 31, 2023）
Use of funds

Fund procurement

Acquisition of healthcare
facilities－

Social loan

11.75 billion yen

Refinancing

11.75 billion yen

Social bond－Expenses, etc.(Note)－

Own funds

－

Total

11.75 billion yen

Total

11.75 billion yen

Balance

Drawdown date

4 billion yen

March 20, 2018

4 billion yen

February 1, 20191.25 billion yen

January 31, 2020

SMBC

0.5 billion yen

September 30, 2022

SMBC

2 billion yen

March 30, 2022

Loan syndicate with
Sumitomo Mitsui
Banking Corporation
as an arranger(Note) Expenses include research expenses, investment unit issuance expenses, loan fees, etc. associated withproperty acquisition.



List of Social Loans and Social Bond（November 1, 2022 - October 31, 2023）

HCM procured 9.75 billion yen on January 31, 2023 and 2 billion yen on March 30, 2023, andallocated the entire amount as funds for financing borrowings associated with the acquisition oftrust beneficiary rights for healthcare facilities and refinancing such borrowings.

January 31, 2023

March 30, 2023

Initial use of funds

・The above borrowings are being used to purchase newly acquired healthcare facilities, etc. or to refinance funds procured
for the acquisition of existing healthcare facilities, etc.

Status of Social Finance（as of the end of October,2022）[List of Social Loans]
LenderRefinancing date

BorrowingamountInterest rate

Drawdown date

Repayment
date

Repayment
methodSecurity

Lump-sum
repayment on
principal
repayment
date

Unsecured
Unguaranteed

January 31,
2026

Loan syndicate with
Sumitomo Mitsui
Banking Corporation
as an arranger

2.5 billion yen

Fixed interest
rate

3.25 billion yen

3-monthTIBOR+0.45％

4 billion yen

3-monthTIBOR+0.55％

SMBC

2 billion yen

1-monthMarch 30, 2023 March 30, 2024
TIBOR+0.25％

January 31,
2023

January 31,
2028
January 31,
2029[Status of Use and Allocation of Funds]
Use of Funds

Allocation ratio

Funds for acquisition of healthcare facilities(including trust beneficiary rights)

0.0%

Funds for refinancing

100.0%

Unallocated amount
None

Social loans accounted for 36.15 billion yen (92.3%) and social bonds for 2.0 billion yen (5.1%) of
total interest-bearing debt as of the end of October 2023, for a total of 38.15 billion yen (97.4%)
procured through social finance.
Non-Social Loans
Social Bond

2.6%

5.1%

Total
Interest bearing debt
39.15 billion yen

Social Loans
92.3%

29

７．Outcome Indicators
Change in the Acquisition Amount and Number of Healthcare Facilities in
the J-REIT Market

Ratio of Housing for the Elderly to the Elderly Population

Status of Supply of Healthcare Facilities
Although the supply of facilities and housing for the elderly is increasing every year in
response to the growing demand for medical and nursing care service, the supply rate ofpaid nursing homes against the elderly population was 1.75% in 2021 and that of serviced
housing for the elderly was only 0.75% in 2021.

As of the end of October 2023, the total acquisition amount of healthcare facilities was 349,703
million yen and the cumulative number of properties was 192 in the J-REIT market. Of these,
the cumulative acquisition amount for HCM was 80,507 million yen (23.0%) and the cumulative
number of properties for HCM was 48 (25.0%).
(Unit: million yen, property)
Acquisition amount of healthcare facilities
Entire J-REIT market[Supply Rate of Facilities and Housing for the Elderly Against the Elderly Population(Aged 65 Years or Older)]
2.0%
Paid nursing home

1.8%

1.72% 1.75%

Serviced housing for the elderly
1.55%

1.6%

1.61%

1.48%
1.40%

1.4%

1.25%
1.19%

1.2%

1.10%
1.02%

1.0%
0.8%
0.63% 0.63%
0.6%

0.66%

0.73%

0.54%

0.50%

0.46%

0.57%

0.61%

0.64%

0.67%

0.75%
0.70% 0.72%

0.42%

0.4%

0.29%

0.2%
0.01%
0.0%
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(Source) Prepared by the Asset Management Company based on the “Overview of Survey on Social Welfare Facilities,etc.” of Ministry of Health, Labour and Welfare, “Information Provision System of Serviced housing for theelderly” on the website of the Senior Housing Association, and “Population Estimation” of the Ministry ofInternal Affairs and Communications.

Number of healthcare facilities

HCM

Entire J-REIT market

HCM

Acquisition
Price

CumulativeacquisitionPrice

Acquisition
Price

Cumulativeacquisition
Price

Number ofproperties
Acquired

Cumulative
number of
Properties

Number ofproperties
Acquired

2001

Cumulative
number of
Properties(Note1)

0

0

0

0

0

0

0

0

2002

0

0

0

0

0

0

0

0

2003

0

0

0

0

0

0

0

0

2004

0

0

0

0

0

0

0

0

2005

0

0

0

0

0

0

0

0

2006

2,865

2,865

0

0

4

4

0

0

2007

5,600

8,465

0

0

4

8

0

0

2008

0

8,465

0

0

0

8

0

0

2009

0

8,465

0

0

0

8

0

0

2010

0

8,465

0

0

0

8

0

0

2011

0

8,465

0

0

0

8

0

0

2012

2,510

10,975

0

0

2

10

0

0

2013

1,980

12,955

0

0

2

12

0

0

2014

28,782

41,737

0

0

20

32

0

0

2015

63,411

105,148

23,683

23,683

40

72

16

16

2016

6,278

111,426

1,338

25,021

5

77

2

18

2017

18,417

129,843

15,48340,504

10

87

7

25

2018

21,675

151,518

1,686

42,190

11

98

2

27

2019

38,900190,418

22,69164,881

13

111

8

35

2020

72,820263,238

1,456

66,33733

144

1（Note2）

36

2021

27,237

290,475

720

67,057

12

156

1

37

2022

48

33,702

324,177

13,45080,507

23

179

11

January 2023

0324,177080,507

0

179

0

48

February 2023

1,395

325,572

080,507

1

180

0

48

March 2023

8,270

333,842080,507

4

184

0

48

April 2023

0333,842080,507

0

184

0

48

May 2023

8,335

342,177080,507

5

189

0

48

June 2023

0342,177080,507

0

189

0

48

July 2023

0342,177080,507

0

189

0

48

August 2023
September
2023
October 2023

0342,177080,507

0

189

0

48

0

342,177080,507

0

189

0

48

7,526

349,703080,507

3

192

0

48

(Source) Prepared by the Asset Management Company based on ARES J-REIT Databook (October 2023)(Note1) The accumulated number of properties acquired by HCM is described, therefore, disposed properties arenʼt included in the calculation.
(Note2) Verde Hotaka (land) is not included in the number of properties acquired as it is based on the properties already owned.

30

８．Output Indicators（During the Reporting Period）
Properties Acquisition during the Reporting Period(November 1, 2022 - October 31, 2023)

Properties Acquisition and Disposition during the Reporting Period(November 1, 2022 - October 31, 2023)
HCM newly acquired one property (acquisition price:500 million yen) in November
2022.

Acquisition dateNovember 10,
2022

Property Name

Acquisition price（million yen ）Property type

Hanakotoba Oppama

Paid nursing home

500

Paid nursing home
Total

500

[Change in Portfolio Status]
End of fiscal period ended July 2022
(15th FP)
Number of properties

47

Total acquisition price78.4 billion yen

Total appraisal value

86.3 billion yen
5.5％

Average appraisal NOI yield

2

Hospital real estate

16

Number of operators

99.9％

Occupancy Rate
Average remaining lease term

12.8 years

End of fiscal period ended July 2023
(17th FP)

Comparison with End of
15th FP

Number of properties

48+1

Total acquisition price79.2 billion yen+0.8 billion yen

Total appraisal value

88.7 billion yen＋2.4 billion yen

5.5％

±0pt

Hospital real estate

2±0

Number of operators

16±0

100.0％+0.1％

12.0 years-0.8 years

Average appraisal NOI yield

Occupancy Rate
Average remaining lease term

Name

Hanakotoba Oppama

Location

Yokosuka-shi, Kanagawa

Operator

Proud Life Inc.

Appraisal value

514 million yen

Acquisition price

500 million yen

Appraisal NOI yield

5.1%

Number ofrooms/Resident
capacity

59 rooms, 59 people（Note） Appraisal value and appraisal NOI yield are based on the appraisal report as of July 31, 2023.

31

８．Output Indicators
Portfolio Map

39

3
9
20

8
2

10

AQUAMARINE
Nishinomiyahama

2

Bonsejour Chitose-funabashi

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

5

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

7

ASHEIM Hikarigaoka

8

ASHEIM Bunkyohakusan

9

21

7
33

37 38 3

1

15

10

31
14

11

SAWAYAKA Tachibanakan

12

4

SAWAYAKA Mekarikan

13

SAWAYAKA Tagawakan

2726 25

14

GOOD TIME HOME Fudo-mae

23

15
16
1
22

17
34

2 19 1

16

1
1 18

30

35

11

29

4142

Paid nursing
home

40
36

13
12

SOMPO CARE La vie Re
Machidaonoji
SOMPO CARE La vie Re
Azamino

5

24 44

43

28
32

Serviced housing
for the elderly
Medical servicerelated facilities,
etc.

Complex of paid
nursing homes,
medical servicerelated facilities, etc.

35

SOMPO CARE Sompo no ie
Sayama36

Royal Kawaguchi

37

NOAH GARDEN LEGEND

Paid nursing
home

17

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

18

GreenLife Moriguchi

19

Hapine Kobe Uozaki Nibankan
Granda Tsuruma-Yamato

38

NOAH GARDEN L Grace

20

39

NOAH GARDEN Season Bell21

Smiling Home Medice Adachi

40

Heartland Kawaguchi Meiseien

22

41

Rehabilitation Home
Granda Minamiurawa

Aikoen Ichibankan Building(Aikoen Ichibankan)

23

Hanakotoba Minami
Hanakotoba Miura

42

Madoka Minamiurawa

24

43

Nichii Maison Inage

25

SOMPO CARE La vie Re
Hama-Kawasaki

44

Hanakotoba Oppama

26

Hanakotoba Shin-Yokohama

1

SOMPO CARE Sompo no ie S
Awajiekimae

27

Hanakotoba Shin-Yokohama II

SOMPO CARE Sompo no ie S
Kobekamisawa

28

Hanakotoba Odawara

2

29

Verde Minowa

3

NOAH GARDEN CASA RICH

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

32

Sunny Life Kamakura

33

Nichii Home Nishikokubunji

34

SOMPO CARE La vie Re
Kobe-ikawadani

1

Niigata Rehabilitation Hospital

1

SHIP Senri Building(Note) This portfolio map is described based on the data announced as of the end of October 2023.

32

８．Output Indicators
Summary of Buildings and Their Leasing Status (as of the end of 17th FP)
Property
number

Property name

Structure/ No. offloors(Note 1)

Construction
completion(Note 2)

leasablearea (㎡)(Note 3)

No. ofOperation
Leasedtenants
al ratearea (㎡) (companies) (%)(Note 4)(Note 5)(Note 6)

RC/5F

May 18, 2007

5,274.54

5,274.542

100.0

RC/B1・6F

Mar. 8, 1988

2,342.17

2,342.171

100.0

Paid nursing
home-1

AQUAMARINE
Nishinomiyahama

Paid nursing
home-2

Bonsejour Chitose-funabashi

Paid nursing
home-3

Bonsejour Hino

RC/3F

May 2, 1990

1,984.17

1,984.171

100.0

Paid nursing
home-4

Bonsejour Musashi-shinjo

RC/4F

Feb. 21, 1985

1,710.43

1,710.431

100.0

Paid nursing Medical Rehabilitation Home
home-5
Bonsejour Hadanoshibusawa

RC/5F

Paid nursing
home-7ASHEIM Hikarigaoka

RC/3F

Mar. 6, 2006

3,628.60

3,628.60

1

100.0

Paid nursing
home-8ASHEIM Bunkyohakusan

RC/8F

Feb. 27, 2007

2,507.25

2,507.25

2

100.0

SOMPO CARE La vie Re
Machidaonoji
Paid nursing SOMPO CARE La vie Re
home-10
AzaminoPaid nursing
home-9Jul. 17, 1991

3,435.79

3,435.791

100.0

RC/B1・6F

Oct. 29, 2007

7,720.17

7,720.171

100.0

RC/B1・5F

Mar. 1, 2004

5,789.25

5,789.25

1

100.0

RC/B1・6F

Oct. 31, 2005

5,652.94

5,652.94

1

100.0

RC/4F

Nov. 15, 2005

4,720.46

4,720.46

1

100.0

Paid nursing
home-11SAWAYAKA Tachibanakan

Paid nursing
home-12SAWAYAKA Mekarikan

Paid nursing
home-13SAWAYAKA Tagawakan

Paid nursing
home-14

GOOD TIME HOME Fudo-mae

Paid nursing
home-15

Rehabilitation Home
Bonsejour Yotsugi

Paid nursing
home-16

Medical Home Bonsejour Itami

Paid nursing
home-17

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

Paid nursing
home-18

GreenLife Moriguchi

S・RC/9F

Sep. 6, 2006

8,356.85

8,356.851

100.0

Paid nursing
home-19

Hapine Kobe Uozaki Nibankan

S/B1・4F

Mar. 31, 2010

1,772.89

1,772.89

1

100.0

Paid nursing
home-20

Granda Tsuruma-Yamato

RC・S/5F

Mar. 6, 1998

3,427.08

3,427.08

1

100.0

Paid nursing
home-21

Smiling Home Medice Adachi

RC/4F

Nov. 16, 2005

3,870.98

3,870.982

100.0

Paid nursing
home-22

AIKOEN ICHIBANKAN Building

S/5F

Feb. 4, 2010

4,311.20

4,311.20

3

100.0

RC/3F

Jan. 20, 2006

2,366.20

2,366.201

100.0

RC/B1・5F

Mar. 18, 1992

3,400.20

3,400.20

1

100.0

RC/5F

Mar. 28, 1989

1,962.89

1,962.891

100.0

SRC/11F(exclusivelyowned portion)

Mar. 3, 1989

2,129.87

2,129.87

1

100.0

RC/B1・9F

Jan. 7, 2009

12,636.48 12,636.48

1

100.0

Paid nursing
home-23

Hanakotoba Minami

RC/7F

Feb. 24, 2010

1,710.68

1,710.681

100.0

Paid nursing
home-24

Hanakotoba Miura

RC/4F

Jun. 27, 2007

1,959.64

1,959.64

1

100.0

RC/4F
(exclusively-owned
portion)Mar. 8, 2007

4,060.21

4,060.21

5

100.0
100.0

Paid nursing
home-25

SOMPO CARE La vie Re
Hama-Kawasaki

Paid nursing
home-26

Hanakotoba Shin-Yokohama

RC/9F

Mar. 15, 2004

5,230.23

5,230.23

1

Paid nursing
home-27

Hanakotoba Shin-Yokohama II

RC/B1・7F

Apr. 25, 2007

1,837.29

1,837.29

1

100.0

Paid nursing
home-28

Hanakotoba Odawara

RC/4F

Sep. 16, 2009

2,203.42

2,203.421

100.0

Paid nursing
home-29

Verde Minowa

1

100.0

Verde Hotaka①Nov. 20, 2003
②Feb. 28, 1974
①Sep. 29, 1982
②Jul. 1, 1989

11,098.17 11,098.17

Paid nursing
home-30①S/5F②S・RC/8F①S・SRC/5F②S/2F

6,352.861

100.0

6,352.86

Property
number

Property name

Structure/ No. offloors(Note 1)

Construction
completion(Note 2)

S/3F

Sep. 20, 2018

Paid nursing
home-31

Sunny Life Kita-Shinagawa

Paid nursing
home-32

Sunny Life Kamakura

S/5F

Sep. 19, 2014

Paid nursing
home-33

Nichii Home Nishikokubunji

S/3F

Sep. 29, 1990

RC・S/4F

Apr. 24, 2009

S/3F
RC/3F

Paid nursing
home-34
Paid nursing
home-35

SOMPO CARE La vie Re
Kobe-ikawadani
SOMPO CARE
Sompo no ie Sayama

leasable area Leased(㎡)
area (㎡)(Note 3)(Note 4)2,135.54

No. ofOperational
tenants
rate (%)(companies)(Note 6)(Note 5)2,135.541

100.0

3,817.91

3,817.91

1

100.0

1,559.99

1,559.991

100.0

3,824.54

3,824.541

100.0

Aug. 15, 2005

1,997.87

1,997.87

1

100.0

Oct. 1, 2008

3,484.02

3,484.021

100.0

Paid nursing
home-36

Royal Kawaguchi

Paid nursing
home-37

NOAH GARDEN LEGEND

RC/4F

Oct. 10, 2015

2,736.89

2,736.89

1

100.0

Paid nursing
home-38

NOAH GARDEN L Grace

RC/4F

Oct. 27, 2017

2,075.25

2,075.25

1

100.0

Paid nursing
home-39NOAH GARDEN Season Bell

RC/5F

Dec. 10, 2019

4,602.26

4,602.26

1

100.0

Paid nursing
home-40

Heartland Kawaguchi Meiseien

RC/6F

Jan. 30, 2006

3,885.90

3,885.90

1

100.0

Paid nursing
home-41

Rehabilitation Home
Granda Minamiurawa

S/3F

Jul. 15, 2011

2,373.25

2.373.25

1

100.0

Paid nursing
home-42

Madoka Minamiurawa

S/3F

Apr. 11, 2005

1,918.98

1,918.98

1

100.0

Paid nursing
home-43

Nichii Maison Inage

RC/4F

Feb. 9, 2008

4,700.07

4,700.07

1

100.0

Paid nursing
home-44

Hanakotoba Oppama

S/5F

Jul. 23, 2011

1,899.46

1,899.461

100.0Servicedhousing forthe elderly -1
Servicedhousing forthe elderly -2
Servicedhousing forthe elderly -3
Medicalservice-related facilities-1
Complex of
paid nursing
homes,medic
al service
relatedfacilities,etc.1

SOMPO CARE Sompo no ie S
Awajiekimae
SOMPO CARE Sompo no ie S
Kobekamisawa

RC/12F

Jun. 12, 2009

5,745.15

5,745.15

1

100.0

S/9F

Jun. 11, 2009

4,058.35

4,058.35

1

100.0

NOAH GARDEN CASA RICH

RC/5F

Mar. 27, 2015

4,986.98

4,986.98

1

100.0

Niigata Rehabilitation Hospital①RC/3F②S/5F①Apr. 20, 1990
②Feb. 28, 2001

13,476.55 13,476.55

1

100.0

SHIP Senri Building

RC/B1・11F

Sep. 5, 2008

24,813.85 24,813.85

1

100.0

Total

―

―

217,545.72 217,545.72

57

100.0

(Note 1) “Structure/No. of floors” indicates information provided in the real estate registry of the building of each
owned asset. “S” refers to steel structure, “RC” refers to reinforced concrete structure, “SRC” refers tosteel-reinforced concrete structure, “B” refers to basement floor and “F” refers to floors above ground.
(Note 2) “Construction completion” indicates the date of new construction provided in the real estate registry of thebuilding of each owned asset.
(Note 3) “Leasable area” indicates figures based on the lease agreement of each building.
(Note 4) “Leased area” indicatesthe areas out of the leasable area for which actual lease agreements have beenconcluded and are leased.
(Note 5) “No. of tenants” indicates the number of tenants of each building based on the lease agreements. For thesection of healthcare facilities in which the trustee of each owned asset and HCM conclude a lease agreement(master lease agreement) with an aim to have HCM sublease to the master lease company (section of paid
nursing home with nursing care for Smiling Home Medice Adachi), the master lease company (operator) is
counted as a tenant, and accordingly indicated as the number of tenants; while for the propertiessubject topass-through master lease agreement where rentsfrom end tenants are received intact, in principle, the total
number of end tenantsis indicated as the number of tenants. However, for the sections that are not subject tothe lease agreement (master lease agreement) between the trustee and HCM, the number of lessees leasing
a building from the trustee is counted as the number of tenants and indicated accordingly.
(Note 6) ”Occupancy rate” indicates the leased area as a percentage of the leasable area of each owned asset as of July
31, 2023, and is rounded to one decimal place.

33

８．Output Indicators

Property
numberOverview of Facilities and Housing for the Elderly (as of the end of 17th FP)
Property
number
Paid nursing
home-1
Paid nursing
home-2
Paid nursing
home-3
Paid nursing
home-4
Paid nursing
home-5
Paid nursing
home-7
Paid nursing
home-8Paid nursing
home-9Paid nursing
home-10
Paid nursing
home-11
Paid nursing
home-12Paid nursing
home-13
Paid nursing
home-14
Paid nursing
home-15
Paid nursing
home-16

Paid nursing
home-17

Paid nursing
home-18
Paid nursing
home-19
Paid nursing
home-20
Paid nursing
home-21
Paid nursing
home-22
Paid nursing
home-23
Paid nursing
home-24
Paid nursing
home-25
Paid nursing
home-26

Property name

AQUAMARINE
Nishinomiyahama
Bonsejour Chitosefunabashi
Bonsejour Hino

Type of facility

Paid nursing
home
Paid nursing
home
Paid nursing
home
Paid nursing
home

BonsejourMusashi-shinjo
Medical Rehabilitation
Paid nursing
Home Bonsejour
home
Hadanoshibusawa
Paid nursing
ASHEIM Hikarigaoka
home
ASHEIM
Paid nursing
Bunkyohakusan
home
SOMPO CARE La vie Paid nursing
Re Machidaonoji
home
SOMPO CARE La vie Paid nursing
Re Azamino
home
SAWAYAKA
Paid nursing
Tachibanakan
home
SAWAYAKA
Paid nursing
Mekarikan
home
SAWAYAKA
Paid nursing
Tagawakan
home
GOOD TIME HOME
Paid nursing
Fudo-maehome
Rehabilitation Home Paid nursing
Bonsejour Yotsugi
home
Residential type
Medical Home
paid nursing
Bonsejour Itami
home
Kobe Gakuentoshi
Building
Paid nursing(Hapine Kobe
home
Gakuentoshi)
Paid nursing
GreenLife Moriguchi
home
Hapine Kobe Uozaki Paid nursing
NibankanhomeGranda TsurumaPaid nursing
Yamatohome
Smiling Home Medice Paid nursing
Adachihome
AIKOEN ICHIBANKAN Paid nursing
Building
home
Paid nursing
Hanakotoba Minami
home
Paid nursing
Hanakotoba Miura
home
SOMPO CARE La vie Paid nursing
Re Hama-Kawasaki
home
Hanakotoba ShinPaid nursing
Yokohama
home

Operator

GREEN LIFE Co.,Ltd.
Benesse Style Care
Co., Ltd.
Benesse Style Care
Co., Ltd.
Benesse Style Care
Co., Ltd.
Benesse Style Care
Co., Ltd.
AS PARTNERS Co.,Ltd
AS PARTNERS Co.,Ltd

No. ofNo. ofCapacity
Occupancy Preparation date ofrooms
residents
Property Disclosure(persons)
rate (%) Statement of Important(rooms)(persons)(Note 1)
(Note 2)Matters (Note 3)(Note 1)
(Note 1)

90

100

100

100.0

July 1, 2023

42

47

37

78.7

April 1, 2023

56

58

57

98.3

May 1, 2023

46

49

41

83.7

May 1, 2023

100

101

93

92.1

April 1, 2023

83

89

77

86.5

May 1, 2023

50

52

47

90.4

May 1, 2023

Sompo Care Inc.

163

169

136

80.5

April 1, 2023

Sompo Care Inc.

145

145

139

95.9

October 1,
2022

104

104

102

98.1

June 1, 2023

95

95

75

78.9

June 1, 2023

60

60

58

96.7

June 1, 2023

61

67

57

85.1

January 1,
2023

61

65

54

83.1

May 1, 2023

Benesse Style Care
Co., Ltd.

62

64

53

82.8

May 1, 2023

GREEN LIFE Co.,Ltd.

131

138

137

99.3

May 1, 2023

GREEN LIFE Co.,Ltd.

155

189

189

100.0

June 1, 2023

GREEN LIFE Co.,Ltd.

47

47

47

100.0

July 1, 2023

73

90

66

73.3

June 1, 2023

82

82

79

96.3

July 1, 2023

90

90

86

95.6

June 1, 2023

Proud Life Inc.

50

50

47

94.0 August 1, 2023

Proud Life Inc.

53

54

51

94.4

May 1, 2023

Sawayaka Club Co.,Ltd.
Sawayaka Club Co.,Ltd.
Sawayaka Club Co.,
Ltd.
JAPAN LIFEDESIGN
Inc.
Benesse Style Care
Co., Ltd.

Benesse Style Care
Co., Ltd.
GREEN LIFEHIGASHI NIHON
Co., Ltd.
Medical Corporation
AIKOKAI

Sompo Care Inc.

58

58

52

89.7

April 1, 2023

Proud Life Inc.

136

136

125

91.9

April 1, 2023

Property namePaid nursing
home
Paid nursing
Paid nursing
Hanakotoba Odawara
home-28
home
Paid nursing
Paid nursing
Verde Minowa
home-29
home
Paid nursing
Paid nursing
Verde Hotaka
home-30
home
Paid nursing
Paid nursing Sunny Life Kitahome-31
Shinagawahome
Residential type
Paid nursing
Sunny Life Kamakura paid nursing
home-32
home
Paid nursing
Paid nursing Nichii Home
home-33
Nishikokubunji
home
Paid nursing
Paid nursing SOMPO CARE La vie
home-34
Re Kobe-ikawadani
home
Paid nursing
Paid nursing SOMPO CARE
home-35
Sompo no ie Sayama home
Paid nursing
Paid nursing
Royal Kawaguchi
home-36home
Residential typeNOAH
GARDEN
Paid nursing
paid nursing
home-37LEGENDhome
Residential type
Paid nursing NOAH GARDEN L
paid nursing
home-38
Grace
home
Residential type
Paid nursing NOAH GARDEN
paid nursing
home-39
Season Bellhome
Paid nursing
Paid nursing Heartland Kawaguchi
home-40
Meiseienhome
Paid nursing
Paid nursing Rehabilitation Home
home-41
Granda Minamiurawa home
Paid nursing
Paid nursing
Madoka Minamiurawa
home-42home
Residential type
Paid nursing
Nichii Maison Inage
Paid nursing
home-43
home
Paid nursing
Paid nursing
Hanakotoba Oppama
home-44home
Serviced
Serviced
SOMPO CARE Sompo
housing for
housing
the elderly
noieS
Awajiekimae-1
for the elderly
Serviced
Serviced
SOMPO CARE Sompo
housing for
housing
the elderly
no ie S Kobekamisawa-2
for the elderly
Serviced
Serviced
NOAH GARDEN CASA
housing for
housing
the elderly
RICH-3
for the elderly

Paid nursing
home-27

Complex of
paid nursing
homes,medi
cal service
relatedfacilities,etc.
-1

Hanakotoba ShinYokohama II

Type of facility

SHIP Senri Building(Note 4)

Operator

No. ofNo. ofCapacity
Occupancy
residents
rooms(persons)
rate (%)(rooms)(persons)(Note 1)
(Note 2)
(Note 1)
(Note 1)

Preparation date of
Property DisclosureStatement ofImportant Matters(Note 3)

Proud Life Inc.

29

30

30

100.0

April 1, 2023

Proud Life Inc.

60

65

64

98.5

April 1, 2023

Verde Corporation

174

206

196

95.1

April 16, 2023

Verde Corporation

121

174

171

98.3

April 1, 2023

Kawashima
Corporation

66

66

57

86.4

December 1,
2022

Kawashima
Corporation

128

128

114

89.1

July 1, 2022

Nichii Carepalace
Company

46

46

42

91.3

April 1, 2023

Sompo Care Inc.

80

80

66

82.5

April 1, 2023

Sompo Care Inc.

50

50

42

84.0

April 1, 2023

SENIOR LIFE
SUPPORT Co.,Ltd

56

56

53

94.6

April 1, 2023

Noah Konzer Co.,Ltd.

72

72

52

72.2

August 12,2022

Noah Konzer Co.,Ltd.

51

51

47

92.2

August 12,2022

Noah Konzer Co.,Ltd.

136

136

97

71.3

August 12,
2022

Meisho Co., Ltd.

97

100

83

83.0

May 1, 2023

58

60

54

90.0

May 1, 2023

54

54

46

85.2

April 1, 2023

Nichii Carepalace
Company

85

95

58

61.1

April 1, 2023

Proud Life Inc.

59

59

56

94.9

April 1, 2023

Sompo Care Inc.

137

137

102

74.5

October 1,
2022

Sompo Care Inc.

85

85

84

98.8

April 1, 2023

Noah Konzer Co.,Ltd.

115

115

85

73.9

August 12,
2022

Paid nursing
home ・Medical
GREEN LIFE Co.,Ltd.
service-related
facilities

181

200

200

100.0

April 1, 2023

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

Total
4,033 4,264 3,80489.2(Note 1) “No. of rooms,” “Capacity” and “No. of residents” indicate figures based on figures stated in Property DisclosureStatement of Important Matters(hereinafter the “Property Disclosure Statement of Important Matters”) of paid nursing homes provided by theoperators.
(Note 2) “Occupancy rate” indicates the occupancy rate obtained by dividing the number of residents by capacity,rounded to one decimal place.
(Note 3) “Preparation date of Property Disclosure Statement of Important Matters” indicatesthe date of application,reference date or preparation date stated on the document.
(Note 4) SHIP Senri Building is a property with a hospital and paid nursing home, and the above table provides an
overview of the facilities related to its paid nursing home.

34

８．Output Indicators
Overview of Medical Service-Related Facilities (as of the end of 17th FP)
Property
numberMedical service-related facilities-1

Property name

Niigata Rehabilitation Hospital

Operator

Medical Corporation AIKOKAI

Type of facility

Hospital

Subject of
medicaltreatment

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

Property nameDate ofestablishment

June 1990(established as Oyama Hospital, the precursor)
168 beds
Authorized number(general beds: 108 beds/convalescentof beds
stage beds: 60 beds)
Facility certification

Training facilities certified by the Japanese
Association of Rehabilitation Medicine

2nd floor (48 beds) Hospitalization fee of hospital ward for comprehensive community care 1
Facility criteria
3rd floor (60 beds) Basic hospitalization fee for general hospital ward (acute hospitalization fee 4)(Hospitalization
Medical management fee for comprehensive community care 1fee)
4th floor (60 beds) Hospitalization fee of hospital ward for rehabilitation at recovery stage 1External
evaluation

Hospital certified by Japan Council for Quality Health Care (Certification number: JC1424-3) 3rdG:Ver.2.0

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

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

Operator

Medical Corporation Kyowakai

Type of facility

Hospital

Subject of
medicaltreatment

Date ofestablishment
Authorized numberof beds

October 2008
400 beds (400 general beds)

Rehabilitation, orthopedics,
Training facilities certified by the Japaneseneurosurgery,surgery,internal medicine Facility certification
Association of Rehabilitation Medicine
and neurology
West 6th floor (25 beds) Palliative care hospitalward hospitalization fee 2

East 6th floor (25 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

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

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

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

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

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

External
evaluation

Earnings Performance (as of the end of 17th FP)

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

West 2nd floor (50 beds) Recovery phaserehabilitation ward hospitalization fee 1
Hospital certified by Japan Council for Quality Health Care (Certification number: JC2382) 3rdG:Ver.2.0(Note) SHIP Senri Building is a property with a hospital and paid nursing home, and the above table provides an
overview of the facilities related to its hospital.

AQUAMARINE
Nishinomiyahama
Bonsejour Chitosefunabashi(Unit: thousands of yen)
Current fiscal period (from February 1, 2023, to July 31, 2022)
Operating revenue from real
Operating expenses from real estate leasing
estate leasing
ＮＯＩ
Outsourc
Insuranc
Rent
Other
Property
RepairDeprecia Other,
(Note
3)
ing
e
revenue revenue
tax
expensestion
net
expenses
expenses
25,012

4,264

2,100

326

236

17,684400

60,014

5,629

1,831

225

-

122

3,048

401

21,426

5,083

1,247

214

-

91

3,130

400

19,490

4,128

1,031

167

-

82

2,447

400

16,210

8,405

1,810

213

-

163

5,817

400

21,09016,836

3,821

381

84

212

11,936400

40,85012,349

2,580

381

-

129

8,857

400

38,99549,169

6,038

780

1,962

392

39,596400

95,426

32,668

4,686

780

1,889

285

24,627400

77,15823,942

2,668

1,200

-

370

19,303400

47,214

23,165

2,985

1,200

-

273

18,307400

43,375

7,865

1,108

1,200

-

119

5,037

400

12,856

17,558

3,061

600

2,716

182

10,485513

43,927

4,938

949

223

-

78

3,286

400

20,740

6,551

1,402

371

-

117

4,260

400

13,97054,099

9,585

900

1,364

620

41,229400 113,530

39,318

7,139

1,363

3,241

405

26,769400 107,450

9,624

1,391

1,200

-

96

6,536

400

24,411

7,536

1,934

618

274

152

4,158

400

26,871

16,628

3,327

540

560

177

11,624400

60,203

8,587

2,550

780

-

112

4,644

500

21,651

Hanakotoba Minami

8,196

1,563

600

74

79

5,479

400

27,882

Hanakotoba Miura

9,440

1,559

600

464

88

6,327

400

17,287

19,613

3,491

2,770

28

206

12,716400

45,454

14,677

4,443

900

141

249

8,543

400

55,778

5,701

2,547

600

-

92

2,061

400

11,172

Bonsejour Hino
Bonsejour Musashishinjo
MedicalRehabilitation
Home Bonsejour
Hadanoshibusawa
ASHEIM
Hikarigaoka
ASHEIM
Bunkyohakusan
SOMPO CARE La vie
Re Machidaonoji
SOMPO CARE La vie
Re Azamino
SAWAYAKA
Tachibanakan
SAWAYAKA
Mekarikan
SAWAYAKA
Tagawakan
GOOD TIME HOME
Fudo-mae
Rehabilitation
Home Bonsejour
Yotsugi
Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building (Hapine
Kobe Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki
Nibankan
Granda TsurumaYamato
Smiling Home
Medice Adachi
AIKOENICHIBANKAN
Building

SOMPO CARE La vie
Re Hama-Kawasaki
Hanakotoba ShinYokohama
Hanakotoba ShinYokohama II

Not disclosed(Note 2)35

８．Output Indicators
Earnings Performance (as of the end of 17th FP)

Property nameHanakotoba
Odawara(Unit: thousands of yen)

Current fiscal period (from February 1, 2023, to July 31, 2023)
Operating revenue from real
Operating expenses from real estate leasing
estate leasing
Outsourc
Insuranc
Rent
Other
Property
RepairDepreciaingerevenuerevenuetax
expensestion
expenses
expenses

Other,net

ＮＯＩ（Note 3）(Note 1) All figures indicated are rounded down to the nearest thousand yen.
(Note 2) “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 asrent for the current fiscal period based on the lease agreements.
(Note 3) “NOI” = Real estate lease business revenue – real estate lease business expenses + depreciation andamortization

Summary of Appraisal Report (as of the end of 17th FP)

9,092

1,396

600

348

99

6,248

400

24,756

Verde Minowa

29,500

5,268

1,020

1,535

508

20,768400

55,176

Verde Hotaka

28,230

2,259

1,020

2,342

249

21,959400

43,834

10,271

2,805

600

80

119

6,265

400

45,494

13,572

2,747

720

863

179

8,661

400

37,989

4,522

1,236

660

155

92

1,978

400

18,537 Paid

Sunny Life KitaShinagawa
Sunny Life
Kamakura
Nichii Home
Nishikokubunji
SOMPO CARE La
vie Re Kobeikawadani
SOMPO CARE
Sompo no ie
SayamaRoyal Kawaguchi
NOAH GARDEN
LEGENDNOAH GARDEN
L Grace
NOAH GARDEN
Season BellHeartland
Kawaguchi
Meiseien
Rehabilitation
Home Granda
Minamiurawa
MadokaMinamiurawa
Nichi Maison
Inage
Hanakotoba
OppamaSOMPO CARE
Sompo no ie S
Awajiekimae

Not disclosed(Note 2)

Property
number

Property namenursinghome-1

AQUAMARINE
Nishinomiyahama

Paidnursinghome-2

Bonsejour
Chitose-funabashi

12,752

2,943

750

192

189

8,276

400

32,724

5,536

1,448

750

134

103

2,700

400

16,063 Paid

11,243

2,832

1,647

979

180

5,200

402

31,157 Paid

10,200

1,988

300

-

129

7,615

167

24,414 home-4

7,775

1,748

300

-

101

5,458

166

17,705 nursing

14,749

2,368

720

-

213

11,047400

40,919 Paid

15,317

2,856

720

-

223

11,116400

51,179

8,163

1,777

480

740

134

4,831

200

24,735

6,161

1,101

480

1,100

108

3,172

200

19,36016,301

3,127

900

2,712

210

8,951

400

38,849

6,369

2,077

600

145

103

3,043

400

12,76727,484

4,897

510

136

298

21,242400

58,215nursinghome-3nursingPaidhome-5

Bonsejour Hino
BonsejourMusashi-shinjo
Medical Rehabilitation
Home Bonsejour
Hadanoshibusawa

Appraisalcompany

Rich Appraisal
Institute Co.,Ltd.
The Tanizawa
Sogo Appraisal Co.
Ltd.
The Tanizawa
Sogo Appraisal Co.
Ltd.
The Tanizawa
Sogo Appraisal Co.
Ltd.
The Tanizawa
Sogo Appraisal Co.
Ltd.

4.9

5.4

117

6.0

997

1,020

4.3

987

4.4

4.5

48

5.9

834

849

4.7

827

4.8

4.9

43

6.0

643

653

5.1

638

5.2

5.3

39

6.8

850

864

5.0

844

5.1

5.2

47

6.5

1,600

4.5

1,590

4.3

4.6

76

5.5

ASHEIM Bunkyohakusan

Japan Real Estate
Institute

1,790

1,800

4.1

1,780

3.9

4.2

74

5.2

SOMPO CARE La vie Re Japan Real Estate
Machidaonoji
Institute

4,230

4,250

4.4

4,200

4.2

4.5

192

5.3

SOMPO CARE La vie Re Japan Real Estate
AzaminoInstitute

3,560

3,590

4.2

3,530

4.0

4.3

156

5.1

SAWAYAKA
Tachibanakan

Japan Real Estate
Institute

1,640

1,650

5.2

1,620

5.0

5.4

93

6.1

SAWAYAKA Mekarikan

Japan Real Estate
Institute

1,480

1,490

5.4

1,460

5.2

5.6

85

6.2

SAWAYAKA Tagawakan

Japan Real Estate
Institute

405

408

5.4

402

5.2

5.6

25

6.4

GOOD TIME HOME
Fudo-maeJapan Real Estate
Institute

2,100

2,110

4.1

2,080

3.9

4.2

91

5.2

Paid

Rehabilitation Home
Bonsejour Yotsugi

905

922

4.6

897

4.7

4.8

47

5.7

557

566

5.1

553

5.2

5.3

38

7.5

1,497

183

12,908400

NOAH GARDENCASA RICH

18,575

3,827

300

-

236

14,044

166

NiigataRehabilitation
Hospital

28,390

9,644

1,030

-

387

16,828500

The Tanizawa
Sogo Appraisal Co.
Ltd.
The Tanizawa
Paid
Medical Home Bonsejour
nursing
Sogo Appraisal Co.
Itami
78,318 home-16
Ltd.

SHIP Senri
Building

81,02028,043

1,500

-

1,182

49,894400

340,675

10,337 820,379 168,336

37,02926,083

46,247 nursing

home-15

18,421 2,178,349

2,090

1,600

510

10,377 560,130

5.2

Japan Real Estate
Institute

2,918

2,438,597 2,428,260

2,110

ASHEIM Hikarigaoka

18,418

Total

2,100

nursinghome-7Paid
nursinghome-8Paid
nursinghome-9Paid
nursinghome-10Paidnursinghome-11Paid
nursinghome-12Paidnursinghome-13Paid
nursinghome-14

SOMPO CARE
Sompo no ie S
Kobekamisawa

34,780

Summary of Appraisal Report (Note 1)
DirectAppraisa
Appraisal
DCF method
Appraisal capitalizationlmethod
NOI
value
NOI
yield
(millions IndicatedTerminal
Indicated(millions
Discount
Capitaliz(%)
of yen)capitaliza
value
value
of yen)rate (%)
ation(Note 4)tion rate(millions(millions(Note 3)(Note 2)rate (%)(%)
of yen)of yen)Paid
nursinghome-17Paid
nursinghome-18

Kobe Gakuentoshi
Building

Daiwa Real EstateAppraisal Co., Ltd.

4,700

4,760

4.4

4,670

4.2

4.6

226

5.2

GreenLife Moriguchi

Daiwa Real EstateAppraisal Co., Ltd.

4,750

4,820

4.3

4,720

4.1

4.5

220

5.3

36

８．Output Indicators
Summary of Appraisal Report (as of the end of 15th FP)

Property
number

Property nameAppraisalcompany

Paid nursing Hapine Kobe Uozaki
home-19
Nibankan

Daiwa Real EstateAppraisal Co., Ltd.

Paid nursing Granda Tsurumahome-20
YamatoSummary of Appraisal Report (Note 1)
DirectAppraiscapitalization
DCF method
AppraisalAppraisal
method
al
value
NOI
NOI
Discounyield(millions Indicated Capitaliz IndicatedTerminal(millionstof yen)(%)
capitaliza
value
ation
value
of yen)rate(Note 4)tion
(millions rate (millions(Note 3)(%)
rate (%)
of yen)(%)
of yen)(Note 2)
1,030

1,040

4.4

1,020

4.2

4.6

48

5.2

The Tanizawa Sogo
Appraisal Co., Ltd.

1,030

1,040

4.7

1,020

4.8

4.9

52

5.2

Paid nursing Smiling Home Medice The Tanizawa Sogo
home-21AdachiAppraisal Co., Ltd.

2,500

2,540

4.4

2,480

4.5

4.6

118

5.2

AIKOEN

Paid nursing
ICHIBANKAN
home-22

The Tanizawa Sogo
Appraisal Co., Ltd.

827

828

5.0

826

5.1

5.2

43

5.6

Paid nursing
Hanakotoba Minami
home-23

Japan Real Estate
Institute

1,270

1,280

4.3

1,260

4.1

4.4

56

5.2

Paid nursing
Hanakotoba Miura
home-24

The Tanizawa Sogo
Appraisal Co., Ltd.

682

690

4.7

678

4.8

4.9

35

5.6

Paid nursing SOMPO CARE La vie
home-25
Re Hama- Kawasaki

JLL Morii Valuation& Advisory K.K.

1,850

1,880

4.5

1,810

4.3

4.7

89

5.2

Paid nursing Hanakotoba Shinhome-26
Yokohama

Japan Real Estate
InstituteJapan Real Estate
Institute

2,520

2,540

4.0

2,500

3.8

4.1

109

5.2

384

385

5.0

382

4.8

5.2

21

5.8

964

979

4.8

957

4.9

5.0

49

5.6

1,730

1,740

4.9

1,720

4.7

5.1

109

6.7

1,450

1,460

5.3

1,450

5.1

5.5

91

6.8

2,090

2,120

4.2

2,070

4.0

4.4

90

4.9

1,620

1,640

4.4

1,610

4.5

4.6

76

5.3

777

791

4.2

771

4.0

4.4

36

5.0

1,300

1,320

4.3

1,290

4.1

4.5

63

4.9

647

656

4.7

643

4.5

4.9

32

5.4

Building

Paid nursing Hanakotoba Shinhome-27
Yokohama II

The Tanizawa Sogo
Paid nursing
Hanakotoba Odawara
Home -28
Appraisal Co., Ltd.
Paid nursing
Verde Minowa
Home -29
Paid nursing
Verde Hotaka
Home -30

Paid nursing Sunny Life KitaHome -31 Shinagawa

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

The Tanizawa Sogo
Paid nursing
Sunny Life Kamakura
Home -32
Appraisal Co., Ltd.
Paid nursing Nichii Home
Home -33 Nishikokubunji

Daiwa Real EstateAppraisal Co., Ltd.
Paid nursing SOMPO CARE La vie Rich Appraisal
Home -34 Re Kobe-ikawadani
Institute Co.,Ltd.
Rich Appraisal
Paid nursing SOMPO CARE
Home -35 Sompo no ie Sayama Institute Co.,Ltd.
Paid nursing
Royal Kawaguchi
Home -36

Daiwa Real EstateAppraisal Co., Ltd.

1,340

1,350

4.2

1,330

4.0

4.4

62

4.9

Paid nursing NOAH GARDEN
Home -37 LEGENDThe Tanizawa Sogo
Appraisal Co., Ltd.

910

920

5.1

910

5.2

5.3

48

5.6

Paid nursing NOAH GARDEN L
Home -38 Grace

The Tanizawa Sogo
Appraisal Co., Ltd.

660

660

5.1

660

5.2

5.3

35

5.6

Paid nursing NOAH GARDEN
home-39
Season BellThe Tanizawa Sogo
Appraisal Co., Ltd.

1,520

1,530

5.0

1,520

5.1

5.2

78

5.8

Property
number

Property name

Paid
Heartland Kawaguchi
nursingHome -40 Meiseien
Paid
Rehabilitation Home
nursingHome -41 Granda Minamiurawa
Paidnursing
Madoka Minamiurawa
Home -42
PaidnursingNichii Maison Inage
Home -43
Paidnursing
Hanakotoba Oppama
Home -44

Appraisalcompany

Japan Real Estate
Institute

2,280

2,300

4.1

2,260

3.9

4.2

100

5.0

Rich Appraisal
Institute Co.,Ltd.

1,110

1,120

4.1

1,100

3.9

4.2

49

4.8

Rich Appraisal
Institute Co.,Ltd.

883

893

4.1

879

3.9

4.2

39

4.8

Rich Appraisal
Institute Co.,Ltd.

1,670

1,700

4.6

1,660

4.4

4.8

83

5.5

The Tanizawa
Sogo Appraisal Co.
Ltd.

514

515

4.4

514

4.5

4.6

25

5.1

2,390

2,420

4.7

2,360

4.5

4.9

116

6.0

1,450

1,460

4.8

1,430

4.6

5.0

72

6.0

1,730

1,740

5.1

1,720

5.2

5.3

91

5.6

2,300

2,310

6.5

2,290

6.3

6.7

153

7.4

14,20014,4004.5

14,100

4.6

4.7

678

5.2

88,76989,709-88,108

-

-

4,387

5.5

Servicedhousing SOMPO CARE Sompo no Japan Real Estate
for theie S Awajiekimae
Instituteelderly-1
Servicedhousing SOMPO CARE Sompo no Japan Real Estate
for theie S Kobekamisawa
Instituteelderly-2
Serviced
The Tanizawa
housing NOAH GARDEN CASA
Sogo Appraisal Co.
for the
RICH
Ltd.
elderly -3
MedicalJapan Real Estateservice- Niigata Rehabilitation
relatedHospital
Institutefacilities-1
Complexof paid
nursing
The Tanizawa
homes,medical
SHIP Senri Building
Sogo Appraisal Co.
serviceLtd.
relatedfacilities,et
c.-1

Total

Summary of Appraisal Report (Note 1)
DirectAppraisa
Appraisal
DCF method
Appraisal capitalizationlmethod
NOI
value
NOI
yield
(millions IndicatedTerminal
Indicated(millions
Discount
Capitaliz(%)
of yen)capitaliza
value
value
of yen)rate (%)
ation(Note 4)tion rate(millions(millions(Note 3)(Note 2)rate (%)(%)
of yen)of yen)(Note 1) “Appraisal value” is based on the appraisal report with July 31, 2023, as the appraisal date.
(Note 2) “Discount rate” represents a yield used to discount net cash flow during an analysis period and terminal value atthe end of an analysis period back to present value, and figures used by respective appraisal organizations areshown.
(Note 3) “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in the real estateappraisal report with July 31, 2023, as the appraisal date and is rounded down to the nearest million yen. In
addition, NOI is revenue before deducting depreciation and differsfrom NCF (net cash flow), which is the amount calculated by adding the gain on investment from security deposits,
etc. to NOI and deducting capital expenditures. The same shall apply hereinafter in this document.
(Note 4) “Appraisal NOI yield” is calculated by the formula below and rounded down to one decimal place. In the column of
total appraisal NOI yield, the average appraisal NOI yield, which is calculated by dividing the total appraisal NOI of
the respective real estate in trust by the total acquisition price, is shown (rounded down to the first decimal place).
Appraisal NOI yield = Appraisal NOI of the respective real estate in trust / Acquisition price of the respective realestate in trust37

８．Output Indicators
Capital Expenditures of Assets Under Management(as of the end of 17th FP)
Company Profile of Operators (as of the end of 17th FP)
Operator name16th FP (Ending January 2023) Actual

Name of real estate (Location)

PurposeConstruction costs(thousands of yen)

PeriodHeadquarters location

Representative

Founded

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

Representative
Director
Nobuyuki Tamai

May
1994

GREEN LIFE HIGASHI 1-4-16, Yaesu,
NIHON Co., Ltd.
Chuo-ku, Tokyo

Representative
Director
Nobuyuki Tamai

July
2003

GREEN LIFE Co., Ltd.

Niigata Rehabilitation Hospital(Niigata-shi, Niigata)

Rooftop waterproofing andrenovation of exterior
walls of south building

From: October 2022
To: January 2023

50,000ASHEIM Hikarigaoka(Nerima-ku, Tokyo)

Renewal of air conditioners
in common areas

From: November 2022
To: December 2022

19,250

Verde Minowa(Takasaki-shi, Gunma)

Renewal of 2 units of main building
boilerFrom: January 2023
To: January 2023

16,210

Sompo Care Inc.

4-12-8HigashiShinagawa,Shinagawa-ku, Tokyo

Representative
Director
Ken Endo

May
1997

Other real estate, etc.

－－

66,867

Kyowakai Medical
Corporation

1-7-13, Hiuchi,
Kawanishi-shi, Hyogo

Director Toru
Kitagawa

August1982

Benesse Style Care
Co., Ltd.

2-3-1, Nishi-Shinjuku,
Shinjuku-ku, Tokyo

Representative
Director
Shinya Takiyama

September
1995

Representative
Director
Hiroshi Sonoda

July
2006

Total



152,328

Proud Life Inc.

17th FP (Ending July 2023) Actual

Name of real estate (Location)

PurposeConstruction costs(thousands of yen)

PeriodVerde Hotaka
Renovation of the exterior wall of the(Kawaba-mura, Tone-gun, Gunma) South Building

From: May 2023
To: July 2023

62,457

SOMPO CARE La vie Re
Machidaonoji(Machida-shi, Tokyo)

Renewal of air conditioners
in common areas

From: May 2023
To: May 2023

16,280

Rooftop waterproofing

From: April 2023
To: May 2023

9,728

－

107,701

SAWAYAKA Tagawakan(Tagawa-shi, Fukuoka)
Other real estate

－
Total



196,167

18th FP (Ending January 2024) Plan

Name of real estate (Location)

Purpose

PeriodEstimated construction costs(thousands of yen)
Total
Payment Total amountAmount during period already paid

SHIP Senri Building(Toyonaka-shi, Osaka)

Ventilation retrofit

From: November 2023
To: December 2023

39,000－－

SOMPO CARE La vie Re
Machidaonoji(Machida-shi, Tokyo)

Renewal of air conditioners From: November 2023
in common areas
To: December 2023

30,000－－SHIP Senri Building(Toyonaka-shi, Osaka)

Hot water piping
joint repair

From: October 2023
To: December 2023

27,500－－Nichii Home Nishikokubunji(Kokubunji-shi, Tokyo)

Roof repair

From: November 2023
To: December 2023

7,740

－

－

Sawayaka Club
Co.,Ltd.

1-2-4,Isago,
Kawasakiku,Kawasaki-shi,
Kanagawa
2-10-10 Kumamoto,
Kokurakitaku,Kitakyushu-shi,
Fukuoka

Representative
DecemberDirector
2004
Fumiharu Uchiyama

Capital stockor total assets(millions of yen)

Attribute

Consolidated subsidiary of
Ship Healthcare Holdings
Inc. which is listed on the
TSE Prime Market
Consolidated subsidiary of
Ship Healthcare Holdings
50
Inc. which is listed on the
TSE Prime Market
Consolidated subsidiary of
Sompo Holdings, Inc.,
3,925
which is listed on the TSE
Prime Market
50

6,920 ―
Consolidated subsidiary ofBenesse Holdings, Inc.,
which is listed on the TSE
Prime Market
Consolidated subsidiary ofSony Group Corporation,
3
which is listed on the TSE
Prime Market
Consolidated subsidiary of
UCHIYAMA HOLDINGS Co.,
100
Ltd., which is listed on the
TSE Standard Market
100

Kawashima
Corporation

248-2, Higashiinohara,
Kimitsu-shi, Chiba

Verde Corporation

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

Representative
Director
Teruo Kawashima
Representative
Director
Tomoyuki Higuchi

Medical Corporation
AIKOKAI761 Kizaki, Kita-ku,
Niigata-shi, Niigata

Director
Hiromu Ikeda

November
1993

344

2-2,
AS PARTNERS Co.,Ltd. Kanda surugadai,
Chiyoda-ku, Tokyo

Representative
DirectorTakeshi Uemura

November
2004

122 Unlisted company

JAPAN LIFEDESIGN
Inc.

1-7-1, Akasaka,
Minato-ku, Tokyo

Representative
Director
Shosetsu Ito

April
2004

Nichii Carepalace
Company

4-6, Kandasurugadai,
Chiyoda-ku,Tokyo

Representative
Director
Yukio Akiyama

June
1964

SENIOR LIFE
SUPPORT Co.,Ltd

2-5-24, Aoki,
Kawaguchi-shi,
Saitama

Representative
Director
Hidenori Shimane

November
2006

September
1990

50 Unlisted company

June
1970

30 Unlisted company
A medical corporation
which belongs to NSG
Group with sales of over
120 billion yen (Note 2)

Unlisted company
Capital partnership with
Nomura Real Estate
Holdings, Inc.
Unlisted company
80 Consolidated subsidiary of
NICHIIGAKKAN CO., LTD.
Affiliated company of
ZENSHO HOLDINGS
30
Co.,Ltd., which is listed on
the TSE Prime Market

340

14-1-32, Nanajou,
Representative
February
Hiragishi, Toyohira-ku,
Director
100 Unlisted company
1979
Sapporo-shi, Hokkaido Akihiro Wakatsuki
Representative
4-3-5,
Hokima,AugustMeisho Co., Ltd.
Director
10 Unlisted company
Adachi-ku,Tokyo
1998
Chiyoshi Fujita(Note 1) “Headquarters location,” “Representative,” “Founded” and “Capital stock or total assets” are based on theinformation in the registry as of July 5, 2023. Only one person is described in the "Representative," "Capital stockor total assets" is rounded off to the nearest million yen.
(Note 2) Indicates the actual figures in September 2022 based on NSG Groupʼs website.
NOAH KONZER
Co.,Ltd38

９．Current Status and Issues Surrounding Medical and Nursing Care

With the aging of the population, it is forecast that the number of people eligible to receive nursing
care will continue to increase and that it will become more difficult than ever to take care of membersin the same household due to the declining birthrate and change in family structure. In order to
respond to the increasing needs for nursing care, it is necessary to secure caregivers and promote thesupply of healthcare facilities. It is expected that the number of deaths due to aging will increase andthe number of people who spend their final days at homes and facilities for the elderly other than
medical institutions will increase rapidly. In the future, the role of facilities for the elderly, etc. bycaregivers will be emphasized, and cooperation between medical services (in-home medical care) at
homes and facilities for the elderly by medical institutions and institutions related to medical service
and nursing care will be required.

Various Issues Derived from Declining Birthrate and Aging Population
Growing Demand for Nursing Care Services and Change in Medical Services

Progress in Population Decline and Aging

Japanʼs population of elderly people aged 65 or older is estimated to be 36.23 million (as of
September 15,2023), representing 29.1% of the total population, which makes it the most aged
society in the world. Due to the population aged 65 or older growing while the total population isdecreasing and the birthrate declining, the aging rate will continue to increase, with the National
Institute of Population and Social Security Researchʼs “Population Projection for Japan (2023
Projection)” estimating that it will reach 33.9% in 2038, resulting in a society where one in threecitizens are aged 65 years or older. As the proportion of people aged 75 or older in particular
continues to rise, the caregiver labor shortage caused by the declining birthrate and the increase incare needs due to the aging of society are starting to have a major impact on the medical and careindustries.

[Change in the Number of People Eligible to Receive Nursing Care by Degree of Nursing Care Required]
8million people

Require assistance
Require assistance level 2
Require nursing care level 1
Require nursing care level 3
Require nursing care level 5

7million people[Outlook for Change in Total Population and Aging Rate]（10 thousand people）

75 years old or older

65-74 years old

Ratio of 75 years old and over

Ratio of 65 years old and over40%

15,000
実績値

推計値

561

6million people

64 years old or younger

36.3%

10,1614million people

9,218

10,71810,854

20.1%

0

776
471
1985

3.9%

9.1%
5.7%

1,407

20.9% 20%
6,935

1,734

1,709

1,498

1,535

1,668

1,109
717

1,160

1,613

1,825

2,155

2,238

2,277

1995

2005

2015

2020

2025

2035

2045

3million people

606

620

641

658

669

682

690

345

384

409

298
256

2million people
1million people

14.5%

12.7%

10.3%

19.2%

17.5%

14.5%

5,000

7,891

8,673

8,788

30%

29.6%

28.0%

26.3%

584

632

531
Increased by 2.6 times
506
during the period from485
467
2000 to 2021
453
432 440

5million people

32.3%
10,000Require assistance level 1
Transitional
Require nursing care level 2
Require nursing care level 4

10%0million people
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

(Source) “Nursing Care Insurance Business Status Report“ of Ministry of Health, Labour and Welfare
0%(Source) Created by HAM based on the Ministry of Internal Affairs and Communications Statistics Bureau 2020 Census and the
National Institute of Population and Social Security Researchʼs “Population Projection for Japan (2023 Projection)”(Source) Website of the Ministry of Internal Affairs and Communications Statistics Bureau, Statistics Topics No. 132,
“A Statistical View of Japanʼs Elderly Population: On the Occasion of Respect-for-the-Aged Day”

[Change in Number of Births and Birth Rate]

3.0million people

4.54

5
1949
2,696,638 people, the largest
number of births since 1947

2.5million people

Number of births (left axis)

Total fertility rate (right axis)
4
2022
770,759 people, the smallest
number of births since 1947

2.0million people

1.5million people

3

1.26

2

1.0million people
1

0.5million people

0.0million people

1947 1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

(Source) “Demographic Statistics (2022)“ of Ministry of Health, Labour and Welfare

2000

2005

2010

2015

2020

0

(Source) KPMG Healthcare Japan Co., Ltd(Note) CAGR (compound average growth rate) is the annual average growth rate obtained using the geometric mean
per year based on the growth rate over multiple years.

39９．Current Status and Issues Surrounding Medical and Nursing Care
(Reference) Environmental Improvement for Upgrading and Expanding Healthcare Facilities

Various Issues Derived from Declining Birthrate and Aging Population
Healthcare Facilities Requiring the Promotion of SupplyIn the Basic Housing Policy (National Plan) approved by the Cabinet on March 19, 2021, thegoal is to form and develop communities where diverse generations support each other andthe elderly can live in good health and peace of mind, and a target was set to raise the ratioof senior housing to the senior population from 2.5% in 2018 to 4% by 2030.
Outcomeindicator

Ratio of Housing for the Elderly as a Percentage of the Elderly Population

Resident Capacity

Resident Capacity

Resident Capacity（Note）

thousand people

thousand people

thousand people

thousand people

2005

2014

2018

Resident Capacity

690

230
0.9

1,480

890

2030

４％

2.5

2.1

％
％
％
(Note) Resident capacity is estimated based on the outcome indicator for the ratio of housing for the elderly as apercentage of the elderly population. In the plan, Housing for elderly means paid nursing home, serviced
housing for the elderly, group homes and Geriatric health services facilities.

[Capacity and Number of Users of Facilities and Housing for the Elderly](Unit: units, people)

Facilities covered by public aid providing long-term care to the elderly

700,000(intensive care homes for the elderly)Long-term care health facilities (nursing and health facilities for the elderly)

638,900
635,879

Long-term care medical facility

600,000

In the “Japan Revitalization Strategy-JAPAN is BACK-” dated June 14, 2013, thegovernment announced its policy to “enact a guideline concerning acquisition andmanagement of housing for the elderly, etc. for the utilization of healthcare REITs with an
aim to utilize private fund” as part of urban development to enable the elderly, etc. to walkand live safely. Following this policy, the Ministry of Land, Infrastructure, Transport andTourism enacted the “Guideline related to the utilization of healthcare REITs targeting
housing for the elderly, etc.” on June 27, 2014, and the “Guideline related to REITs
targeting hospital real estate” on June 26, 2015, and guidelines for utilizing healthcare
REITs were established. In addition, in the Action Plan for a New Form of Capitalism
Follow-up (approved by the Cabinet on June 7, 2022), the government has set a target of"reviewing the guidelines for the utilization of healthcare REITs during FY2022 with the aimof increasing the total assets of REITs, etc. to about 40 trillion yen by around 2030 in orderto form a high-quality stock of real estate, etc." In response to this, the "Guideline related
to the utilization of healthcare REITs targeting housing for the elderly, etc." was revised on
March 28, 2023 to contribute to the acquisition of healthcare facilities by REITs, and ahandbook explaining the contents of the guideline was created. As a measure to spread
healthcare REITs, seminars targeting related business operators jointly held by the
Financial Services Agency, the Ministry of Land, Infrastructure, Transport and Tourism, theTokyo Stock Exchange, and the Association For Real Estate Securitization have been held
several times a year, and efforts by the public and private sectors are being made.

Integrated facility for medical and long-term care
Nursing home for the elderly

500,000

Low-cost paid nursing home
400,000

Paid nursing home356,200

Serviced housing for the elderly
300,000

Long-term daily care for dementia patients in communal living situation

272,870(Group homes)
200,000

213,300

100,000

95,31862,15337,90013,400

0
2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

(Source) Prepared by the Asset Management Company based on the “Statistics on the Actual Status of Nursing Care Benefits,etc.“ and “Survey on Social Welfare Facilities, etc.“ of Ministry of Health, Labour and Welfare, “Information Provision
System of serviced housing for the elderly “ on the website of the Senior Housing Association.
(Note) The number of users is shown for facilities covered by public aid providing long-term care to the elderly, Long-term carehealth facilities, long-term care medical facility and long-term daily care for dementia patients in communal living situation(Group homes).

40

９．Current Status and Issues Surrounding Medical and Nursing Care
Various Issues in Nursing Care

Personnel Shortage in the Nursing Care Industry

In fiscal 2022, the jobs-to-applicants ratio for nursing care-related occupations was 3.71
times, which is higher than that for all occupations.
Based on information such as the projected volume of nursing care services in the 8th
Nursing Care Insurance Business Plan, the number of required nursing care personnel, as
estimated by prefectural governments, will be shortage of approximately 690 thousand in
fiscal 2040.

[Jobs-to-Applicants Ratio (All Industries and Nursing Care-Related Occupations) and
Unemployment Rate]
6％

Abuse of the Elderly in Nursing Care

Abuse of the elderly in nursing care is also a major issue. There are various reasons forabuse, but there are many cases in which abuse is caused by the heavy burden of nursing
care, and there is a need to expand nursing care services responding to the need to reducethe burden of caregivers.
In addition, although the number of cases of abuse in nursing care facilities smaller thanthat of abuse by families, there are certain number of abuse in nursing care facilities,
nursing care business operators are taking actions toward workers at nursing care facilities
including improvement of the knowledge on abuse and holding trainings and preparing
manuals with an aim to prevent abuse and inappropriate care.

Jobs-to-applicants ratio (all industries)[Change in the Number of Cases of Elderly Abuse]

Jobs-to-applicants ratio (nursing care-related jobs)
5％

Unemployment rate

Caused by family members, relatives, people living together with such elderly, etc.(left axis)
3.71x

4％

20,000 cases

10,000 cases

Caused by workers at nursing care facilities(right axis)

2.6%

3％

15,000 cases
14,8892％
1.16x

12,56915,615

16,668 16,599
15,202

15,731 15,739 15,976

16,384

17,078 17,249 16,928 17,281

16,426 7,500 cases

13,273

10,000 cases

1％

5,000 cases0％2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

5,000 cases(Source) Ministry of Health, Labour and Welfare, “Job Placement Service Statistics,” and Ministry of Internal Affairs
and Communications, “Labor Force Survey”

Number of nursing care human resources required

2.43 million people

2.5 million people
2.11 million people

2.33 million people
Shortage: Approx.
Shortage: Approx.
320 thousand people
220 thousand people

54

62

70

76

96

151

155

221

300

408

452

510

621

644

595

0 cases[Needs for Nursing Care Human Resources Towards 2040]
3.0 million people

2,500 cases739
0 cases
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

2.80 million people(Source) “Survey Results on the Status of Response Based on the “Act on the Prevention of Elder Abuse,Support for Caregivers of Elderly Persons and Other Related Matters“ in Fiscal 2019“ of Ministry of
Health, Labour and Welfare

Shortage: Approx.
690 thousand people

2.0 million people

1.5 million people
Fiscal 2019

Fiscal 2023

Fiscal 2025

Fiscal 2040

(Source) Ministry of Health, Labour and Welfare, “Number of Nursing Care Personnel Required Based on 8th Nursing
Care Insurance Business Plan – Appendix 1”

41

９．Current Status and Issues Surrounding Medical and Nursing Care
Actions by the Government and Local Governments

Further Increase in Social Security Benefits (Medical and Nursing Care)

There is a need to respond to the increasing and diversifying demand for medical andnursing care services within limited medical resources as well as establish a system that
effectively and efficiently provides high-quality and appropriate medical care. The “Regional
Healthcare Vision“ has been institutionalized by the “Act for Securing Comprehensive Medicaland Long-term Care in the Community“ aiming to establish a medical care provision systemthat can even withstand the super-aged society (Note ).

With the progress in aging population and declining birthrate, social security benefits inJapan are forecast to increase significantly, which is a major issue.

[Future Outlook for Social Security Benefits Towards 2040]
Pension

Medical

Nursing careChildcare

Other

Regional Healthcare Vision is an initiative to realize an efficient medical care provision systemby estimating the number of beds required in 2025 for each of the four medical functions
based on the future population projections and promoting functional differentiation of
hospital bed and coordination of hospitals through consultation by local medical staff.

188.2 – 190.0

200 trillion yen

Establishment of Regional Healthcare Vision and Promotion of Differentiation and
Coordination of Medical Functions

9.4
13.1
140.2 – 140.6
121.3

100 trillion yen

6.7
7.9
10.7
39.2

25.8

7.7
10.0
15.3
66.7 –
68.5
47.4 – 47.8

Medical institution

150 trillion yen

50 trillion yen
56.7

59.9

Fiscal 2040
(based on plan)(Source) “Future Outlook for Social Security Towards 2040“ of the Cabinet Secretariat, Cabinet Office,Ministry of Finance, Ministry of Health, Labour and Welfare

Establishment of Regional Comprehensive Care System
With the further increase in demand for medical and nursing care after 2025 when the baby
boomers will be 75 or older, the government (Ministry of Health, Labour and Welfare) is
promoting the construction of a regional comprehensive care system that integrally provides
housing, medical service, nursing care, prevention and life support to enable the elderly tocontinue living in familiar areas until the end of their lives to the maximum extent possible
with an aim to maintain the dignity of the elderly and support independent life.
It is believed that the extension of healthy life expectancy and a society that supports theelderly by utilizing not only public services but also the power of the community can berealized with the regional comprehensive care system in accordance with the actual
circumstances of each region, leading to the securement of the sustainability of the social
security system.

Prefectural
government

Fiscal 2025(based on plan)

Voluntary
selectionof medicalcarefunctions73.2

0 trillion yen
Fiscal 2018

Treatment
imbalance
andfinancialconcerns
due tooverempha
sis onadvanced
acutestages(Hospital
Ward A)
Advanced acutestage function(Hospital
Ward B)
Acute stage
function(Hospital
Ward C)
Recovery stage
function(Hospital
Ward D)
Chronic stage
function

Reporting on current
status of medical carefunctions and future
direction

Establishing “Regional Healthcare Vision” using
reports on medical functions, etc. and promoting
further function differentiation

Current hospital bed
function(as of 2020)

Number of beds to berequired in 2025

Total 1,209,000 beds

Total 1,191,000 beds
Advanced acutestage
131,000 beds
(11%)

Advanced acutestage
156,000 beds
(13%)

Decrease byapprox. 25%

Acute stage
401,000 beds
(34%)

Acute stage
547,000 beds
(45%)

Recovery stage
375,000 beds
(31%)

Recovery stage
189,000 beds
(16%)

Increase byapprox. 2 times
Chronic stage
284,000 beds
(24%)

Decrease byapprox. 10%
Chronic stage
317,000 beds
(26%)

Shift to nursing
care facilities, inhome medicalcare, etc.

Nursing care facilities,
in-home medical care,etc.
Approx. 300,000
people(Note) “Super-aged society” refers to a society in which the elderly population aged 65 or older (aging rate) accounts for
21% or more of the total population(Source) Created by HAM based on Ministry of Health, Labour and Welfareʼs “Regional Healthcare Vision”(October 9, 2020).
(Source) “Current Hospital Bed Function (as of 2020)” created by HAM based on a document entitled “About the 2020
Hospital Bed Function Report,” which was created by Ministry of Health, Labour and Welfare based on a 2020
hospital bed usage report; “Number of Beds to Be Required in 2025” created by HAM based on Ministry of
Health, Labor and Welfareʼs “Initiatives for Medical/Nursing Care Reform” (June 22, 2017).

42

９．Current Status and Issues Surrounding Medical and Nursing Care
Actions by the Government and Local Governments


Initiatives to Prevent Abuse of the Elderly
Various initiatives are being taken by the government and local governments to prevent
abuse of the elderly.
・Establishment of elder abuse prevention networks (e.g., "early detection and monitoring
network" of community welfare volunteers and residents, "intervention support network of
relevant professional organizations" of administrative agencies and legal professionals, etc.)
・ Conducted annual surveys based on the "Act on Prevention of Elder Abuse and Support
for Caregivers of Elderly Persons".
・Development of abuse response manual・Establish a system of cooperation and collaboration with related organizations, privateorganizations, etc.
・ Publicize the name of the response desk and the names of the elder abuse response
cooperators, etc.

Improvement of the environment for securing nursing care personnel
In order to meet the ever-increasing demand for nursing care services, the government willtake measures to "improve compensation for nursing care workers," "secure and develop
diverse human resources," "prevent turnover, promote retention, and improve productivity,""make the nursing care workforce more attractive," and "improve the environment for
accepting foreign personnel.

（ Source） Ministry of Health, Labour and Welfare the Social Security Council Materials

43

Disclaimer
This 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 andincorporate certain subjective assumptions about uncertain factors that may affect future results. Accordingly, thesestatements are inherently not guarantees of future performance and actual results may differ materially.
The opinions, outlooks and estimates contained in this material reflect our view and judgment based on information
as of the date when this material is prepared and involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness and validity of information contained inthis 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 yourown judgment and responsibility.

Asset management company:

Healthcare Asset Management Co., Ltd.
(Financial service provider registration: Director of Kanto Local Finance Bureau(Kinsho) No. 2815, member of the Investment Trusts Association, Japan)

44