Hospital

Financial Results Briefing Materials
Fiscal Period Ended July 2019
(9th Fiscal Period)

Paidnursing home

September 18, 2019

Asset Management Company

Servicedhousing forthe elderly

Securities Code: 3455

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

Contents

Ⅰ

Ⅱ

Financial Summary

Ⅲ

Actions for Enhancement of Unitholder Value

1. Topics

P3

1. Road Map to External GrowthP15

2. 9th Fiscal Period (Ended July 2019)
Financial Highlights
3. Actual Results for
9th Fiscal Period (Ended July 2019)
4. 10th Fiscal Period (Ending January 2020) and11th Fiscal Period (Ending July 2020) Earnings
Forecasts
5. Overview of Public Offering (February 2019)P4

2. Expansion of Pipeline

P16

P5

3. Actions for Development Projects

P18

4. Actions for Hospital Real EstateP19

5. Actions for ESG

P20

6. Financial Status

P8

7. Changes in Distribution Per Unit

P9

8. Changes in Unit Price

P10

P6
P7

Ⅳ

Appendix

Status of Asset Management
1. Portfolio Highlights

P12

2. Stable Cash Flow in the Long Term

P13

1

Financial SummaryⅠ
2

I Financial Summary

1. Topics

1

Actual Results
 Operating revenue2: 2,008 million yen (+707 million yen from previous fiscal period, +2 million yen from forecast (Note 1))

 Distribution per unit (Note 2) : 3,643 yen(+523 yen from previous fiscal period, +88 yen from forecast) NAV per unit(+948 yen from previous fiscal period): 118,986 yen

Status of Management
 Acquired 8 properties including “SHIP SENRI BUILDING,” a flagship property, through public offering Asset size expanded to 35 properties/64.8 billion yen and unrealized gain to 4.7 billion yen (Note 3)

3

Financial Status
 Total amount of loans: 32.45 billion yen (+10 billion yen from end of previous fiscal period), LTV: 47.5% (-3.2% from end of
previous fiscal period) First debt financing through social loans by a J-REIT

4

Actions for ESG
 Supported the improvement of efficiency of nursing care business of operators with the introduction of ICT system by HCM(Note 1): Figure disclosed in the Financial Report for Fiscal Period Ended January 2019 dated March 15, 2019.
(Note 2): Distribution per unit for the 8th FP (3,120 yen) = Distribution of earnings (2,661 yen) + Distribution of reserve for temporary difference adjustments (133 yen) + Other distribution in excess of earnings(return of capital) (326 yen)
Distribution per unit for the 9th FP (3,643 yen) = Distribution of earnings (3,325 yen) + Distribution of reserve for temporary difference adjustments (38 yen) + Other distribution in excess of earnings(return of capital) (280 yen)
(Note 3): Asset size is calculated based on acquisition price; and unrealized gain is calculated as: Appraisal value at the end of 9th FP - book value at the end of 9th FP.

3

I Financial Summary

2. 9th Fiscal Period (Ended July 2019) Financial Highlights
Figures in parenthesis indicate the change from the end of previous period

Asset (Assets)
Number of properties

Total acquisition priceTotal appraisal value

Unrealized gain

Average appraisal NOI yield

Debt (Liabilities)
35 Properties(+8 properties)
64.8 billion yen(+22.7 billion yen)
70.4 billion yen

Average remaining terms tomaturity
Average borrowing interest
rate(+24.6 billion yen)

Ratio of long-term loans

4.7 billion yen

Ratio of loans with fixedinterest rates(+1.6 billion yen)
5.6%

Operational rate

99.9%

Ratio of fixed rents

100%

Ratio of investment in threemajor metropolitan areas

86.1%

Average Remaining Lease
Term

Total amount of loans(+0.6%)
14.6 years(+0.4 years)

32.45 billion yen(+10.0 billion yen)
2.6 years(+0.4 years)
0.55%(-0.03%)76.3%(+18.4%)96.9%(+9.1%)
47.5%

LTV(-3.2%)

Long-Term Issuer Rating(JCR)

A (Stable)

Equity (Net assets)
Total sum of fair value

Distribution per unit
Distribution in excess ofearnings (Note 1)(Equivalent to return of capital)

NAV per unit

41.4 billion yen(+18.8 billion yen)
3,643 yen(+523 yen)

280 yen
118,986 yen(+948 yen)

4
(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).

I Financial Summary

3. Actual Results for 9th Fiscal Period (Ended July 2019)
Revenue and profit increased significantly due to property acquisition, realizing an
increase in distribution per unit by 523 yen(Unit: million yen)

8th Fiscal
Period

9th Fiscal Period Actual Results(Comparison with Forecast)

9th Fiscal Period(Ended July 2019)(Ended January 2019)

Forecast(Note 2)

ActualComparison
with Forecast

(A)

(B)

(C)

(C)- (B)Operating revenue

1,301

2,006

2,008

+2

+707

+54.4

Operating expenses

654

828

818

-9

+164

+25.2

9th Fiscal Period Actual Results(Comparison with 8th Fiscal Period)

Expenses related
to rent business

448

595

586

-8

+137

+30.7

Difference in operating revenue (+707)(Depreciation)

315

440

436

-3

+121

+38.4

Operating income

647

1,178

1,189

+11

+542

+83.9

Ordinary
income

540

1,018

1,047

+28

+506

+93.7

Net income

539

1,017

1,046

+28

+506

+93.8

Distribution
per unit
(yen)

3,120

3,555

3,643

+88

+523

+16.8

Distribution of
earnings

2,661

+93

+569

+20.4

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

NAV per unit (yen)

133

3,270

3,325
38

Comparison with
8th Fiscal Period

Difference in operating expenses (-9)

Actual(C)- (A)(C)- (A)(A)(％) (Note 3)

326

285

280

-5

-46

-14.1

118,038-

118,986

-

+948

+0.8

 Decrease in expenses related to rent business (-8)
 Repair expenses (-6)
 Depreciation (-3)

Difference in non-operating revenue (+16)
 Insurance income (+15)

 Increase in rent revenue (+707)

Difference in operating expenses (+164)
 Increase in expenses related to rent business (+137)
 Depreciation (+121)
 Management service expenses (+9)
 Increase in asset management fee (+21)
 Increase in administrative service fees (+4)

Difference in non-operating revenue (+16)
 Insurance income (+15)

Difference in non-operating expenses (+52)
 Increase in expenses due to new borrowings
 Interest expenses (+25)
 Loan fees (+20)
 Increase in investment unit issuance expenses due to public offering (+6)(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2): The forecast for the 9th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended January 2019” dated March 15, 2019.
(Note 3): Figures are rounded to the first decimal place.

5

I Financial Summary

4. 10th Fiscal Period (Ending January 2020) and11th Fiscal Period (Ending July 2020) Earnings Forecasts

In the 10th FP, profit is expected to decrease with the increase in asset management fee
due to the expansion of asset size and the impact of the consumption tax increase, etc.
(Unit: million yen)

9th Fiscal
Period10th Fiscal Period(Ending January 2020)(Ended July 2019)

ActualForecast(A)(B)

Operating revenue

2,008

Operatingexpenses

10th Fiscal Period Forecast(Comparison with 9th Fiscal Period )11th Fiscal Period(Ending July 2020)

Comparison with
9th Fiscal Period(B)- (A)(B)- (A)(A)(％) (Note 2)

2,012

+3

+0.2

818

910

+92

Expenses related
to rent business

586

602

(Depreciation)

436

Operating income

Forecast

Comparison with 10th
Fiscal Period Forecast

Difference in operating revenue (+3)
 Rent increase due to system investment (EGAO link) (+3)

Difference in operating expenses (+92)(C)- (B)(C)- (B)(B)(％) (Note 2)

2,012

0

0

+11.2

966

+55

+6.1

+16

+2.7

659

+56

+9.4

442

+6

+1.4

445

+3

+0.7

1,189

1,101

-88

-7.4

1,046

-55

-5.0

Ordinary
income

1,047

940

-106

-10.2

891

-48

-5.2

Net income

1,046

939

-106

-10.2

890

-48

-5.2

 Increase in expenses related to rent business (+56)
 Expensing of property / city planning tax for properties acquired in 9th
FP (+48)
 Repair expenses (+3)
 Depreciation (+3)

Distribution
per unit (yen)

3,643

3,304

-339

-9.3

3,150

-154

-4.7

Difference in non-operating expenses (-6)

Distribution
per unit (yen)(Excluding distribution
in excess of earnings(return of capital)

3,363

3,020

-343

-10.2

2,864

-156

-5.2

Distribution in excessof earnings

280

284

+4

+1.4

286

+2

+0.7

(C)

 Increase in expenses related to rent business (+16)
 Repair expenses (+7)
 Depreciation (+6)
 Increase in asset management fee (+56)
 Increase in tax payment(+7)
 Consumption tax (+4)
 Research expenses (+4)
 Increase in administrative service fees (+3)

Difference in non-operating revenue (-16)
 Absence of insurance income (-15)

Forecast for the 11th Fiscal Period(Comparison with 10th Fiscal Period forecast)Difference in operating expenses (+55)

 Decrease in investment unit issuance expenses (public offering conducted
in 5th FP) (-4)(Note 1))

(return of capital) (Note 1)(Note 1): Distribution in excess of earnings refers to distribution carried out
targeting around 20% of depreciation equivalent (return of capital).
(Note 2): Figures are rounded to the first decimal place.

6

I Financial Summary

5. Overview of the Public Offering (February 2019)
HCM expanded its quality portfolio including hospital real estate through the second
public offering since IPO
Overview of the offering

Investment highlights

Launch date

January 11, 2019

Price determination date

January 22, 2019

Payment dateFebruary 1, 2019

Number of new investment units
issued (Note 1)
Total number of investment units
outstanding (after public offering)

117,894 units
311,001 units

Issue price / issue value

111,442 yen /107,555 yen

Amount paid in (Note 1)

12.68 billion yen

 Acquisition of a flagship property: Complex comprising ahospital and a paid nursing home
 Actions on development projects of healthcare facilities andexpansion of asset acquisition
 Sustainable external growth utilizing a variety of sponsor
support Promotion of stable financial operation and distribution policy
to enhance unitholder value

7(Note 1) Including those for third-party allotment on February 27, 2019 (payment date).

I Financial Summary

6. Financial Status
Established a bank formation centering on Sumitomo Mitsui Banking Corporation, andmaintained the LTV level at around 50%
Change in LTV and Total Amount of Loans

Status of Interest-Bearing Liabilities(billion yen)

End of
8th FP

End of
9th FP

ChangeTotal amount of loans(billion yen)

22.45

32.45

+10.00(Social loans (Note 1))(billion yen)

－

5.55

+5.55

LTV

(%)

50.6

47.5

-3.2

Ratio of loans with fixed interest
rates

(%)

87.8

96.9

+9.2

Ratio of long-term loans

(%)

57.9

76.3

+18.4

Average remaining terms tomaturity
Average borrowing interest rate

(year)
(%)

2.2
0.58

2.6
0.55

+0.4

LTV (right axis)
借入金総額（左軸）

50.2

300
30.0

20.0
200

(%)

Total amount of Loans (left axis)

400
40.0

52

LTV（右軸）

50.6

50.2

50

48.9

48.4

51

48.8

48.8

49

47.5
100
10.0

0

13.0

14.0

14.0

20.7

20.7

20.7

22.45

32.45

2nd FP

第３期末
Ended

3rd FP

第４期末
Ended

4th FP

第５期末Ended

5th FP

第６期末
Ended

6th FP

第７期末
Ended

7th FP

第８期末
Ended

8th FP

第9期末
Ended

第２期末
Ended

-0.03

January 2016 July 2016 January 2017 July 2017 January 2018 July 2018 January 2019

9th FP

48
47
46

July 2019(Note 1): Social loans: Loans where the use of proceeds is limited to projects that consider social aspects.

Diversification of Maturities

Diversification of Lenders

Higashi-Nippon Bank

0.5 billion yen (1.5%)

Mie Bank

0.75 billion yen (2.3%)

77 Bank

0.95 billion yen (2.9%)

Bank of Fukuoka

1.25 billion yen (3.9%)

Hiroshima Bank

1.25 billion yen (3.9%)

Dai-ichi Life Insurance

1.25 billion yen (3.9%)

Shinkin Central Bank

1.45 billion yen (4.5%)

Nishi-Nippon City Bank

1.75 billion yen (5.4%)

Nippon Life Insurance

2.6 billion yen (8.0%)

Resona Bank

2.7 billion yen (8.3%)

The Gunma Bank
0.5 billion yen (1.5%)(billion yen)
100
10.0
80
8.0

長期借入金
Long-term
loans

短期借入金
Short-term
loans

1.0

60
6.0
SMBC
12.05 billion yen(37.1%)

40
4.0

2.0
20
Sumitomo Mitsui Trust Bank
5.45 billion yen (16.8%)

0
0

8.0

7.0

6.7

6.75

3.0
10th
FP

第10期

11th
FP

第11期

12th
FP

第12期

13th
FP

第13期

14th
FP

第14期

15th
FP

第15期

16th
FP

第16期

17th
FP

第17期

18th
FP

第18期

8

I Financial Summary

7. Changes in Distribution Per Unit
(yen)
3,800
3,643
3,600

（注1）

利益超過分配金
Distribution in excess of earnings (Note 1)
3,400

3,363

分配金
Distribution

3,200

（注2）

3,304
3,150

3,120

分配金（一時効果除く）
Distribution (Excluding temporary effect) (Note 2)

3,180

3,020

3,000

2,800

2,730

2,697

2,699

2,653

2,440
2,400

2,000

0

2,864

2,864

2,786

2,699

2,600

2,200

2,864

2,794

2,340

2,296

2nd
第2期FP
Ended Jan.
2016年
2016
1月期

2,589
2,508

2,425

2,328

3rd
FP
第3期
Ended July
2016年
2016
7月期

4th
FP
第4期
Ended Jan.
2017年
2017
1月期

5th
FP
第5期
Ended July
2017年
2017
7月期

6th
FP
第6期
Ended Jan.
2018年
2018
1月期

7th
FP
第7期
Ended July
2018年
2018
7月期

8th
FP
第8期
Ended Jan.
2019年
2019
1月期

9th
FP
第9期
Ended July
2019年
2019
7月期

10th FP
第10期
Ending Jan.
2020年
2020
(Forecast)
1月期
（予想）

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

11th
第11期FP
Ending July
2020年
2020
(Forecast)
7月期
（予想）

9

I Financial Summary

8. Changes in Unit Price
The unit price of HCM outperformed the TSE REIT Index in general by the acquisition of
hospital real estate and external growth through public offering.
Trade volume has also been on the rise since the public offering in February 2019.
TSE REIT Index

Trade volume (right axis)

(yen)

HCM

(unit)
6,000
23,000140,000
September 2018
Announcement of proposing
execution of distribution in excess ofearnings as a matter to be resolved
at the unitholders’ meeting

135,000
130,000

February 2019
Conducted the second public
offering since IPO

5,000

125,000
120,000
115,000

February 2017
Conducted the firstpublic offering since IPO

4,000

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

3,000

110,000
105,000

2,000

100,000
95,0001,000

90,00085,0002017/1/31（103,700 yen)(Note 2)0
2017/7/31

2018/1/31

2018/7/31

2019/1/31

2019/7/31(99,600 yen)(107,000 yen)(111,600 yen)

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

(Note 1): TSE REIT index is indexed with the closing price on January 31, 2017, as 100.
(Note 2): The closing price of the investment units of HCM at each point of time is indicated10Status of Asset Management

Ⅱ11

Ⅱ Status of Asset Management

1. Portfolio Highlights
Portfolio Highlights

Number of Properties

Total Acquisition Price

Total Appraisal Value(Note 1)

Average
Appraisal NOI Yield

35 properties

64.8 billion yen

70.4 billion yen(+24.6 billion yen)

5.6 %Average Building Age(Note 1)

Average Remaining
Lease Term (Note 1)

Ratio of Fixed Rents

Operational Rate

15.0 years

14.6 years

100 %99.9 %(+8 properties)(+22.7 billion yen)(-0.1 years)(+0.4 years)(-0.1%)(-0.1%)(Note 1): Figures in parentheses are comparison with the end of 8th FP.

Portfolio Diversification (Note 2)Complex of paid nursing home, medical service-related
facilities, etc.
19.9％

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

Chubu area
2.0％Core cities
11.3％

By
GeographicalArea

By Type

Paid nursing home
72.1％

Other areas
2.6％
Three Major Metropolitan areas
86.1％
Tokyo metropolitan area
41.1％

Kinki area
43.0％

(Note 1): “Average Building Age” and “Average Remaining Lease Term” are calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with July 31, 2019, as the reference date, rounded down to the firstdecimal place. When there is more than one building, they are calculated by weighted averaging with areas. “Appraisal Value” is indicated based on the appraisal report with July 31, 2019, as the appraisal date.
(Note 2): The figures in the graphs are calculated based on acquisition price, rounded to the first decimal place.

12

Ⅱ Status of Asset Management

2. Stable Cash Flow in the Long Term
HCM concludes long-term and fixed-rent lease agreements with carefully selected operatorsin principle, and strives to secure stable cash flow through continuous monitoring.
Long-Term Fixed-Rent Lease Agreements

Careful selection and monitoring of operator
Good judgement regarding the operational capability
and management stability of operators, who arelessees, is very important to secure stable rent income

20 years or more
20.5%

Less than
10 years

Averageremaininglease term
14.6 years

37.3%(Note1)

10 years or more but
less than 20 years

Business due diligence(including those after
acquisition)
Management
CompliancesystemBusiness
profile/activities

FinancialstatusRatio offixed rents
100%

42.2％

Operation
status Currently owns healthcare facilities operated by 12
operators including major companies operating
nationwide
 Monitors regularly measures for prevention of elder
abuse, etc. and safety management system taken by
operators in addition to the operational status andfinancial status

Proactive capital expenditure(example of capital investment in 9th FP)
Property

Details

Investment
AmountGrandaTsuruma-Yamato

Exterior wall painting
and renovation ofrooftop waterproof

33.3
million yen

GOOD TIME HOME
Fudo-mae

Renewal of 10 air
conditioning systems
in common areas

17.9
million yen

ASHEIM
Bunkyohakusan

Introduction of EGAO
link

20.9
million yen(Note 1): The figure is calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with July 31, 2019 as reference date, rounded down to the first decimal place.

13

Actions for Enhancement ofUnitholder ValueⅢ
14

Ⅲ Actions for Enhancement of Unitholder Value

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

March 2016

February 2017

November 2017

October 2018

• Acquired 2 properties(1.3 billion yen)

• Conducted the firstpublic offering• Acquired 6 properties(13.4 billion yen)

• Acquired J-REIT’s first
hospital real estate for2 billion yen• Acquired 2 properties(1.6 billion yen)February 2019
• Conducted second public
offering• Acquired 8 properties(22.7 billion yen) including
hospital real estate40(Note 1)

64.8

Asset size
Number of properties

35
30
38.4

40.5

40.5

42.1

Pipeline

23.6

16

16

第1期
1st
FP
Ended
2015年
July 2015

第2期
2nd
FP
Ended
2016年
January 2016

7月期

1月期

25.0

25.0

24

25

50
500
40
400

27

25
23.6

70
700
60
600

35

15

100

100
<Target >(Number ofproperties)

20(billion yen)

30
300

25

20
200
18

18

第3期
3rd
FP
Ended
2016年
July 2016

第4期
4th
FP
Ended
2017年
January 2017

7月期

1月期

第5期
5th
FP
Ended
2017年
July 2017
7月期

第6期
6th
FP
Ended
2018年
January 2018
1月期

第7期
7th
FP
Ended
2018年
July 2018
7月期

第8期
8th
FP
Ended
2019年
January 2019
1月期

第9期
9th
FP
Ended
2019年
July 2019

10
100

7月期

15
(Note 1): The target may not be achieved due to future events, market environment and other factors.

Ⅲ Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (1)HCM will focus on further expansion of pipeline by strengthening its “system to gather
quality deals and information” utilizing its wide-ranging network and various functions.
Pipeline totaling around 10.0 billion yen (Part)
Paid nursing home

Paid nursing home

Establishment of a system to gather
quality deals and information
Facilities andhousing for theelderly

Facilities andhousing forthe elderly(already
opened)(to bedeveloped)

Medicalservicerelated
facilities

Pipeline(properties for which firstrefusal rights have beenobtained)

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

Paid nursing home

AMICA VILLA INAGE(Chiba-shi, Chiba)

Paid nursing home

Sawayaka Seaside Kuki-no-umi(Kitakyushu-shi, Fukuoka)

SAWAYAKA Higashiosakakan(Higashiosaka-shi, Osaka)

Paid nursing home (to be developed)

Paid nursing home (to be developed)

Medical Rehabilitation Home Granda
Yamahana(Sapporo-shi, Hokkaido)

Medical Rehabilitation Home Granda
Toyota-Motomachi(Toyota-shi, Aichi)(Note 1): In case a sponsor or an SPC formed by a sponsor, etc. decides to sell a healthcare facility they own, HCM has the first refusal rights to acquire the property. However, the acquisition is undecided and there is no guarantee that HCM will
acquire the property in the future. The above properties are some of healthcare facilities owned by sponsors or SPCs formed by sponsors, etc.

16

Ⅲ Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (2)HCM aims to expand and strengthen information flow and property acquisition methods
through its network with sponsors as well as operators, developers and owners.
System to Gather Quality Deals and Information
Facilities andhousing for theelderly(already opened)

Operators

Facilities andhousing for theelderly(to be developed)

Expert know-how

Various routes
Sponsor andsupporting company
networks

Supportagreement

Asset management

Developers
Housebuilders

Extensive networks

company’s own
network

Expert know-how

Nursing care andmedical service
Fund management
Finance

Supportagreement

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

Extensive
warehousing
functions

Medicalservice-related
facilities

Utilization ofbridge SPCs
Utilization of
warehousing ofsponsors and others

Warehousing function

Medical corporation

Capture quality deals on a negotiationbasis at the appropriate timing

17

Ⅲ Actions for Enhancement of Unitholder Value

3. Actions for Development projects
HCM will promote actions for development projects by utilizing its network in theindustry and various functions.
Strengths of HCM
Abundant real estate
information through thesponsor network, etc.

Knowledge on thehealthcare industry and awide network●Information on sales/purchase andeffective utilization of development sites●Good judgement and introduction of
credible operators●Capturing operators’ needs for opening a
new facility

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

Acquisition at the appropriate timing
after completion of buildings

Case example

Characteristics of development projects
Upgrades and expansionof healthcare facilities
Flexibility ,notdependent uponland utilization byindividual owners
Enlargement ofproperty size

New development
utilizing healthcare
REITs

example 1 (Sapporo-shi, Hokkaido)

New relocation project of existing paid nursing home
Matched the sales information of land obtained independently by the
support company of HCM and the relocation needs of operators
 Support company led the entire development process including
everything from the acquisition of land to warehousing after completion.
Established in November 2018.


example 2 (Itabashi-ku, Tokyo)

New development project of paid nursing home
Major housebuilder acquired the development site and the building iscurrently under construction based on the assumption that the sponsorof HCM will purchase the building after completion
 A lease agreement(tentative) has been concluded with the operator atof the start of construction
18





Development based on operators’ actual plan to open
new facilities⇒ Tenant/leasing risk is limited

Ⅲ Actions for Enhancement of Unitholder Value

4. Actions for Hospital Real Estate
HCM aims for stable acquisition and management of quality hospital real estate as the only
J-REIT owning hospital real estate
Strengths of HCM

Management Policy of HCM, etc.

1

Major investment target

A hospital which can play an important role in the Regional
Healthcare Vision
 May acquire a medical mall, health check-up center, etc. otherthan hospitals

SHIP HEALTHCARE’s abundant insight and various support experiencein “medical business” and SMBC/NEC Capital’s financing and financing
know-how for “medical business”

A broad network with the three main sponsor companies and theparties related to the “system to gather quality deals and information”

Solid management performance, as the only J-REIT owning hospital
real estate

2Investment management system complying with the“Hospital Real Estate Guidelines” (Note 1)

Allocation of experts familiar with hospital business in the
Asset Management Company
 In principle, no investment that involves hospital operation
 Conclusion of a fixed-rent/long-term lease agreement, inprinciple


Stable management based on expertisein hospital business and a trust relationshipwith hospital personnel

Size of hospital real estate market

3
Investment ratio

Together with facilities and housing for the elderly, accounting
for 80% or more of the portfolio
 No upper limit set for hospital real estate alone





4

Promotion activities for market expansion

Participation in seminars for medical/nursing care facilitiesrelated operators
 Lectures at industry group meetings(Congress of Japan Hospital Association, etc.)

Hospital real estate accounts for over 50%of the entire healthcare facility real estatemarket (approximately 23 trillion yen)
Mostly self-owned by medical corporations,etc. and ratio of quake-resistant hospitals
remain at 74.5% (Note 3)⇔Ratio of quake-resistant paid nursing
homes is 95% or more

(Note 3): Ministry of Health, Labour and Welfare’s 2018 “Survey on Seismic Retrofit of Hospitals”)

Hospital
real estate Healthcare
51%
facility realestate market
45 trillion yen(Note 2)

Paid nursing
home
13%

ServicedGrouphousing for thehomeselderly6%4%Large potential investment opportunity(Note 1): “Hospital Real Estate Guidelines” refers to “Guidelines Concerning REITs Targeting Hospital Real Estate” published on June 26, 2015 by the Ministry of Land, Infrastructure, Transport and Tourism.
(Note 2): Prepared by the Asset Management Company based on preliminary calculation by KPMG Healthcare Japan Co., Ltd.

Three long-termcare insurance
facilities
26%

19

Ⅲ Actions for Enhancement of Unitholder Value

5. Actions for ESG (1)HCM and the Asset Management Company will aim to realize the investment philosophy and enhance unitholder value
over the medium to long term by practicing asset management that is considerate of Environment, Social andGovernance (ESG).
Reduction of environmental burden (E)Basic ESG PolicyPromotion in collaboration with various in-house/outside
stakeholders including operators, hospital personnel,
sponsors, executives and employeesReduction of environmental burden (E)Renovation work for improving the efficiency of outdoor air
conditioner unit (Kobe Gakuentoshi Building)－ Reduced renovation costs by approximately one-third byusing the government’s subsidy program－ Energy consumption is expected to be reduced byapproximately 8%

Efforts to solve social issues (S)Newly established employment support facility for thedisabled (GreenLife Moriguchi)－ Effective utilization of the former site of day-care center for
employees
 Supported the improvement of efficiency of nursing carebusiness of operators with the introduction of ICT system－Introduction of “EGAO link”(ASHEIM Bunkyohakusan, ASHEIM Hikarigaoka)


Resolution of social issues
in an aging society (S)Establishment of governance system (G)Establishment of governance system (G)Information disclosure to investors andother stakeholders

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

Information disclosure to investors and otherstakeholders
First debt financing through social loans by J-REIT－ Periodic information transmission through impact reports(scheduled to be issued in December 2019)20

Ⅲ Actions for Enhancement of Unitholder Value

5. Actions for ESG (2)Supported the improvement of operational efficiency at nursing care site by conducting system investment utilizing ICT.
The operator realized the leveling of introduction cost as a result of the bearing of initial cost by HCM.
Issues surrounding the nursing care industry and actions by HCM

System of EGAO link

＜Issues surrounding the nursing care industry＞



Securement of
nursing personnel

Improvement ofwork environment

Improvement of productivity ofnursing care services

A system to link sleep sensor, nurse call and electronic medical chart using nurse
call gateway and integrate them into a single smartphone
System of

SensorC Sleep SCAN
• 24-hour monitoring of
respiratory condition• Capable of sleep assessment• Capable of individual setting of call notificationin the phase of sleep→arousal→uprise→bed
leaving
PARAMOUNT BED

Conducted capital investment tosolve such issues<Actions by HCM>Introduced a system utilizing ICT (EGAO link)

Leveled the introduction cost with the bearing of initial cost by HCM and payment
of increased rent (equivalent to depreciation) by the operator
ASHEIM Bunkyohakusan (completed introduction in July 2019, 20.9 million yen)
ASHEIM Hikarigaoka (completed introduction in August 2019, 23.7 million yen)

Monitoring of
sleep, arousal,
bed leaving
and respiratory
conditionCallnotification

Content of call Care Karte System
A CARECARTE
Automatic•A system specializing inrecordingNurse Call
B Vi-nurse•A wide range ofcompatibility withvarious sensors,
cameras, recording
systems andsmartphones

recording from an on-site
perspective. Having highcustomization strength
for corporations. Responding
also to video and
FUJI DATA SYSTEM
image recording.

AiphoneCall signal
D Nurse Call Gateway
Established a network system linking
nurse calls with smartphones at
Sumitomo Densetsu Co., Ltd.
medical care facilities

Making nurse calls by switching to signals
for smartphones
Smartphone

Sharing ofrecorded
information

Capable of understanding the condition,
inputting record and answering callswith a single smartphone(Source) Prepared by the Asset Management Company based on the material of AS PARTNERS Co., Ltd.
＜Issues surrounding healthcare facilities＞○Duplicated work, long working hours○Difficulty in securing personnel⇒Deterioration of service quality
Nursing home

＜Contribution by REITs in the utilization of technology＞○Improvement of operational efficiency○Reduction of working hours⇒ Expecting a ripple effect in the industry by disclosing the
introduction effect through materials of REITs
Residents

Effect of introduction of EGAO linkContributed to qualitative improvement of nursing care services throughimprovement of operational efficiency of nursing care business and reduction ofworking hours due to ICT investment.

Operator
REIT (Investment Corporation)

Capital investment

Rent (leveling of
payment of
introduction cost)
Improvement ofservice quality

・ Intend to improve operational
efficiency and service quality byintroducing ICT devices.
・ Difficult to introduce them
immediately as capital
investment is a heavy burden.

22
Nursing home

Reducing night-time regular inspection by using watching sensors

Significantly reducing the time for preparing nursing care records
through smartphone input

Reducing the number of nurse calls through monitoring
using smartphones

21

Appendix

Ⅳ
22

Ⅳ Appendix

Portfolio Map

Ratio of investment inthree major metropolitan areas

Strategic
investment inthree major
metropolitan
areas

86.1%

Chubu area
Other areas

19

1

16

11.3％

Core cities
1
1 18
1

2.0％

Tokyo metropolitan area

41.1％

22

2.6％

8

29
3

13

9

12
11
5

21

7

30

6

Bonsejour Chitose-funabashi

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

6

43.0％
2

AQUAMARINE Nishinomiyahama

5

Kinki area

17

1
2

20

24

31
14

2
10

15

4
27 26 25
23

28

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

Paid nursing
home

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation Home Bonsejour
Komaki7

ASHEIM Hikarigaoka

8

ASHEIM Bunkyohakusan

9

SOMPO CARE La vie Re Machidaonoji

10

SOMPO CARE La vie Re Azamino

11
12

SAWAYAKA Tachibanakan

12

SAWAYAKA Mekarikan

13

SAWAYAKA Tagawakan

14

GOOD TIME HOME Fudo-mae

15Bonsejour Yotsugi

16

Medical Home Bonsejour Itami

17

Kobe Gakuentoshi Building(Happine Kobegakuentoshi)

18

GreenLife Moriguchi

19

Happine Kobe Uozaki Nibankan

20Granda Tsuruma-Yamato

21

Smiling Home Medice Adachi

22

AIKOEN ICHIBANKAN Building(AIKOEN ICHIBANKAN)

23

Hanakotoba Minami

24

Hanakotoba Miura

25

SOMPO CARE La vie Re Hama-Kawasaki

26

Hanakotoba Shin-Yokohama

27

Hanakotoba Shin-Yokohama Ⅱ

2

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

28

Hanakotoba Odawara

1

Niigata Rehabilitation Hospital

29

Verde Minowa

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

11

SHIP SENRI BUILDING

23

Ⅳ Appendix

Details of Portfolio (As of the end of 9th Fiscal Period) (1)Paid nursing home

1

2

3

4

5

AQUAMARINE
Nishinomiyahama

Bonsejour
Chitose-funabashi

Bonsejour Hino

BonsejourMusashi-shinjo

Medical Rehabilitation Home
Bonsejour
Hadanoshibusawa

Location

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

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

438-1, Ochikawa,
Hino-shi, Tokyo

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

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

Nearest Station

Hanshin Nishinomiya Station on
Hanshin Main Line

Chitose-funabashi Station on
Odakyu Odawara Line

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

Shibusawa Station on
Odakyu Odawara Line

Construction
Completion

May 2007

March 1988

May 1990

February 1985

July 1991

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

119 million yen

49 million yen

43 million yen

36 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.1%

5.9%

6.0%

6.2%

6.4%

Appraisal Value (Note 1)

2,140 million yen

974 million yen

818 million yen

643 million yen

850 million yen

Acquisition Price (ratio)

1,950 million yen (3.0％)

824 million yen (1.3％)

724 million yen (1.1％)

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

Site area

2,587.93 m²

1,020.92 m²

2,211.28 m²

1,233.49 m²

2,588.04 m²

Leasable area

5,274.54 m²

2,342.17 m²

1,984.17 m²

1,710.43 m²

3,435.79 m²

Structure/
Number of floor (Note 2)

RC, 5F

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

Number of Rooms/Resident Capacity

90 rooms, 100 people

42 rooms, 47 people

56 rooms, 58 people

46 rooms, 49 people

100 rooms, 101 people

Occupancy Rate (Note 3)

100%

95.7%

93.1%

89.8%

93.1%

Operator

GREEN LIFE

Benesse style Care

Benesse style Care

Benesse style Care

Benesse style Care

Remaining years oflease agreement (Note 4)

17.8 years

6.8 years

6.8 years

7.3 years

7.8 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2019. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2019, rounded down to the first decimal place.

24

Ⅳ Appendix

Details of Portfolio (As of the end of 9th Fiscal Period) (2))

Paid nursing home

6

7

8

9

10

Medical Rehabilitation Home
Bonsejour Komaki

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

Sompo CARE La vie Re
Machidaonoji

Sompo CARE La vie Re
AzaminoLocation

3-1, Shiroyama,
Komaki-shi, Aichi

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

4-36-13, Hakusan,
Bunkyo-ku, Tokyo

1612, Onojimachi,
Machida-shi, Tokyo

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

Nearest Station

Ajioka Station
on Meitetsu Komaki Line

Shakujii-koen Station on
Seibu Ikebukuro Line

Hakusan Station on
Toei Subway Mita Line

Construction
Completion

March 1991

March 2006

February 2007

October 2007

March 2004

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

92 million yen

76 million yen

74 million yen

193 million yen

156 million yen

Appraisal NOI yield (Note 1)

7.3%

5.5%

5.1%

5.3%

5.1%

Appraisal Value (Note 1)

1,450 million yen

1,570 million yen

1,650 million yen

3,790 million yen

3,230 million yen

Acquisition Price (ratio)

1,270 million yen (2.0％)

1,385 million yen (2.1％)

1,430 million yen (2.2％)

3,580 million yen (5.5％)

3,050 million yen (4.7％)

Site area

8,229.85 m²

2,868.46 m²

540.29 m²

7,404.13 m²

2,748.64 m²

Leasable area

8,858.49 m²

3,628.60 m²

2,507.25 m²

7,720.17 m²

5,789.25 m²

Structure/
Number of floor (Note 2)

SRC, 10FRC, 3FRC, 8F

RC, B1F/6F

RC, B1F/5F

Number of Rooms/Resident Capacity

124 rooms, 165 people

83 rooms, 89 people

50 rooms, 52 people

163 rooms, 169 people

145 rooms, 145 people

Occupancy Rate (Note 3)

74.5%

91.0%

94.2%

68.0%

67.6%

Operator

Benesse style Care

AS PARTNERS

AS PARTNERS

Sompo Care

Sompo Care

Remaining years oflease agreement (Note 4)

7.8 years

14.6 years

7.6 years

8.2 years

7.9 years

Keio Nagayama
Station on Keio
Sagamihara Line

Odakyu Nagayama
Station on Odakyu
Tama Line

Nakagawa Station on
Yokohama Municipal Subway BlueLine

(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2019. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2019, rounded down to the first decimal place.

25

Ⅳ Appendix

Details of Portfolio (As of the end of 9th Fiscal Period) (3)Paid nursing home

11

12

13

14

15

SAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME
Fudo-mae

Bonsejour Yotsugi

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

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

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

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

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

Nearest Station

Sasahara Station on
JR Kagoshima Honsen Line

Mojiko Station on
JR Kagoshima Honsen Line

Fudo-mae Station on
Tokyu Meguro Line

Yotsugi Station on
Keisei Railway Oshiage Line

Construction
Completion

Magarikane Station on
Heisei Chikuho Railway Tagawa
Line

October 2005

November 2005

January 2006

March 1992

March 1989

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2016

Appraisal NOI (Note 1)

95 million yen

87 million yen

26 million yen

92 million yen

48 million yen

Appraisal NOI yield (Note 1)

6.3%

6.3%

6.6%

5.2%

5.8%

Appraisal Value (Note 1)

1,590 million yen

1,450 million yen

411 million yen

1,950 million yen

886 million yen

Acquisition Price (ratio)

1,520 million yen (2.3％)

1,380 million yen (2.1％)

390 million yen (0.6％)

1,740 million yen (2.7％)

824 million yen (1.3％)

Site area

3,359.66 m²

3,758.26 m²

4,300.90 m²

1,206.60 m²

1,136.46m²

Leasable area

5,652.94 m²

4,720.46 m²

2,366.20 m²

3,400.20 m²

1,962.89m²

Structure/
Number of floor (Note 2)

RC, B1F/6F

RC, 4FRC, 3F

RC（S in part）, B1F/5F

RC, 5F

Number of Rooms/Resident Capacity

104 rooms, 104 people

95 rooms, 95 people

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

Occupancy Rate (Note 3)

100%

97.9%

98.3%

86.6%

90.8%

Operator

Sawayaka Club

Sawayaka Club

Sawayaka ClubJAPAN LIFE DESIGN

Benesse Style Care

Remaining years oflease agreement (Note 4)

8.5 years

8.5 years

8.5 years

7.3 years

6.4 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2019. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2019, rounded down to the first decimal place.

26

Ⅳ Appendix

Details of Portfolio (As of the end of 9th Fiscal Period) (4)Paid nursing home

16

17

18

19

20

Medical home Bonsejour Itami

Kobe Gakuentoshi Building(Happine Kobegakuentoshi)

GreenLife Moriguchi

Happine Kobe Uozaki
Nibankan

Granda Tsuruma-Yamato

Location

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

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

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

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

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

Nearest Station

Hankyu Itami Station on
Hankyu Railway Itami Line

Dainichi Station on Osaka
Municipal Subway Tanimachi Lineand Osaka Monorail

Uozaki Station on
Hanshin Electric Railway

Tsuruma Station on
Odakyu Enoshima Line

Construction
Completion

Gakuentoshi Station on
Kobe Municipal Subway SeishinYamate Line

March 1988

January 2009

September 2006

March 2010

March 1998

Acquisition Period

Fiscal period ended July 2016

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

36 million yen

225 million yen

220 million yen

48 million yen

53 million yen

Appraisal NOI yield (Note 1)

7.1%

5.2%

5.3%

5.2%

5.3%

Appraisal Value (Note 1)

557 million yen

4,410 million yen

4,400 million yen

995 million yen

1,060 million yen

Acquisition Price (ratio)

514 million yen (0.8％)

4,320 million yen (6.7％)

4,150 million yen (6.4％)

930 million yen (1.4％)

1,000 million yen (1.5％)

Site area

1,976.11 m²

2,742.81 m²

5,872.83 m²

932.94㎡

2,877.11㎡

Leasable area

2,129.87 m²

12,636.48 m²

8,356.85 m²

1,772.89 m²

3,427.08 m²

Structure/
Number of floor (Note 2)

SRC, 11F

RC, B1F/9F

SRC, 9F

S, B1F/4F

RC (S in part), 5F

Number of Rooms/Resident Capacity

62 rooms, 64 people

131 rooms, 138 people

155 rooms, 189 people

47 rooms, 47 people

73 rooms, 90 people

Occupancy Rate (Note 3)

96.9%

93.5%

100%

100%

80.0%

Operator

Benesse Style Care

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse Style Care

Remaining years oflease agreement (Note 4)

7.8 years

21.6 years

20.2 years

21.6 years

2.6 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2019. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2019, rounded down to the first decimal place.

27

Ⅳ Appendix

Details of Portfolio (As of the end of 9th Fiscal Period) (5)Paid nursing home

21

22

23

24

25

Smiling Home
Medice Adachi

AIKOEN ICHIBANKAN Building(AIKOEN ICHIBANKAN)

Hanakotoba
Minami

Hanakotoba
Miura

SOMPO CARE La vie Re HamaKawasaki

Location

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

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

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

3-5, Suwacho, Miura-shi,
Kanagawa

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

Nearest Station

Rokucho Station on
Tsukuba Express

Niigata Station on
JR Shinetsu Main Line

Misakiguchi Station on
Keikyu Kurihama Line

Odasakae Station on JR Nambu
Line

Construction
Completion

Yoshinocho Station on
Yokohama Municipal Subway BlueLine

November 2005

February 2010

February 2010

June 2007

March 2007

Acquisition Period

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended January 2019

Fiscal period ended January 2019

Fiscal period ended July 2019

Appraisal NOI (Note 1)

119 million yen

45 million yen

56 million yen

35 million yen

89 million yen

Appraisal NOI yield (Note 1)

5.3%

5.9%

5.2%

5.7%

5.2%

Appraisal Value (Note 1)

2,440 million yen

862 million yen

1,190 million yen

664 million yen

1,820 million yen

Acquisition Price (ratio)

2,253 million yen (3.5％)

770 million yen (1.2％)

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

1,710 million yen (2.6%)

Site area

2,069.41m²

2,597.52 m²

428.76 m²

1,017.55 m²

2,832.33 m²

Leasable area

3,870.98 m²

4,311.20 m²

1,710.68 m²

1,959.64 m²

4,060.21 m²

Structure/
Number of floor (Note 2)

RC, 4F

S, 5F

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

Number of Rooms/Resident Capacity

82 rooms, 82 people

90 rooms, 90 people

51 rooms, 51 people

53 rooms, 54 people

58 rooms, 58 people

Occupancy Rate (Note 3)

87.8%

100.0%

94.1%

98.1%

75.9%

Operator

GREEN LIFE HIGASHINIHON Co., Ltd.

Medical Corporation AIKOKAI

Proud Life Inc.

Proud Life Inc.

Sompo Care

Remaining years oflease agreement (Note 4)

17.5 years

17.0 years

13.3 years

13.3 years

8.4 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2019. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2019, rounded down to the first decimal place.

28

Ⅳ Appendix

Details of Portfolio (As of the end of 9th Fiscal Period) (6)Paid nursing home

27

28

29

30

Hanakotoba
Shin-Yokohama

Hanakotoba
Shin-Yokohama Ⅱ

Hanakotoba Odawara

Verde Minowa

Verde Hotaka

1-11-5, Shinyokohama,
Kohoku-ku, Yokohama-shi,
Kanagawa
Shin-Yokohama Station on
Yokohama Municipal Subway BlueLine and JR Yokohama Line

1-11-11, Shinyokohama,
Kohoku-ku, Yokohama-shi,
Kanagawa
Shin-Yokohama Station on
Yokohama Municipal Subway BlueLine and JR Yokohama Line

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

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

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

Kamonomiya Station on JR
Tokaido Line

Takasaki Station on JR Takasaki
Line

Numata Station on JR Joetsu Line

March 2004

April 2007

September 2009

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

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

Acquisition Period

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Appraisal NOI (Note 1)

109 million yen

22 million yen

49 million yen

109 million yen

90 million yen

Appraisal NOI yield (Note 1)

5.2%

5.8%

5.6%

6.7%

7.0%

Appraisal Value (Note 1)

2,230 million yen

401 million yen

948 million yen

1,700 million yen

1,360 million yen

Acquisition Price (ratio)

2,071 million yen (3.2％)

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

1,620 million yen (2.5%)

1,290 million yen (2.0%)

Site area

894.00 m²

375.00 m²

1,202.12 m²

7,550.81 m²

4,375.31 m²

Leasable area

5,230.23 m²

1,837.29 m²

2,203.42 m²

11,098.17 m²

6,352.86 m²

Structure/
Number of floor (Note 2)

RC, 9F

RC, B1F/7F

RC, 4F

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

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

Number of Rooms/Resident Capacity

136 rooms, 136 people

29 rooms, 30 people

60 rooms, 65 people

174 rooms, 206 people

121 rooms, 174 people

Occupancy Rate (Note 3)

95.6%

73.3%

93.8%

97.6%

98.9%

Operator

Proud Life Inc.

Proud Life Inc.

Proud Life Inc.

Verde Corporation

Verde Corporation

Remaining years oflease agreement (Note 4)

13.3 years

13.3 years

13.3 years

7.8 years

7.8 years

26

Location
Nearest Station
Construction
Completion(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2019. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place. (However, the occupancy rate as of the end of July based on theinterview with the operator is indicated for Hanakotoba Shin-Yokohama II)(Note 4): Remaining years of lease agreement is as of July 31, 2019, rounded down to the first decimal place.

29

Ⅳ Appendix

Details of Portfolio (As of the end of 9th Fiscal Period) (7)Paid nursing homeServiced housing for the elderly

31

1

Sunny Life Kita-Shinagawa

SOMPO CARE Sompo no ie S
Awajiekimae

Location

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

Nearest Station

Shimbamba Station on Keikyu
LineConstruction
Completion

September 2018

Acquisition Period

3-20-26, Awaji,
Higashiyodogawa-ku,
Osaka-shi, Osaka
Awaji Station on
Hankyu Railway Kyoto and Senri
Lines

2

Medical service-related facilities, etc.

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

1

1

SOMPO CARE Sompo no ie S
Niigata Rehabilitation Hospital
Kobekamisawa

SHIP SENRI BUILDING

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

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

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

Kamisawa Station on
Kobe Municipal Subway SeishinYamate Line

Hayadori Station on JR Hakushin
Line

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

June 2009

June 2009

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

September 2008

Fiscal period ended July 2019

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended January 2018

Fiscal period ended July 2019

Appraisal NOI (Note 1)

91 million yen

116 million yen

72 million yen

152 million yen

680 million yen

Appraisal NOI yield (Note 1)

4.9%

6.0%

6.0%

7.4%

5.2%

Appraisal Value (Note 1)

1,970 million yen

2,170 million yen

1,340 million yen

2,260 million yen

14,300 million yen

Acquisition Price (ratio)

1,825 million yen (2.8％)

1,930 million yen (3.0％)

1,200 million yen (1.8％)

2,060 million yen (3.2％)

12,920 million yen (19.9%)

Site area

1,105.12 m²

1,251.26 m²

743.22 m²

15,056.85 m²

4,202.65 m²

Leasable area

2,135.54 m²

5,745.15 m²

4,058.35 m²

13,476.55 m²

24,813.85 m²

Structure/
Number of floor (Note 2)

S, 3F

RC, 12F

S, 9F

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

RC, B1/11F
Hospital: 400 beds
Paid nursing home: 181 rooms,
200 people

Number of Rooms/Resident Capacity

66 rooms, 66 people

137 rooms/137 people (Note 3)

85 rooms, 85 people

168 beds

Occupancy Rate (Note 4)

90.9％

99.3%

98.8%

－

Paid nursing home: 100 %Operator

Kawashima Corporation

Sompo Care

Sompo Care

Medical Corporation AIKOKAI

Kyowakai Medical Corporation
GREENLIFE

Remaining years oflease agreement (Note 5)

24.2 years

15.0 years

15.0 years

27.6 years

19.2 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2019. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Number of rooms/resident capacity as a serviced housing for the elderly is 136 rooms/136 people(Note 4): Occupancy Rate indicates the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place. (However, the occupancy rate as of the end of June based on theinterview with the operator is indicated for Sunny Life Kita-Shinagawa)(Note 5): Remaining years of lease agreement is as of July 31, 2019, rounded down to the first decimal place.

30

Ⅳ Appendix

Operator List (1)Operator name

Number of facilities(Note 1)
Facilities andhousing forthe elderly

Hospital

GREEN LIFE Inc.

25－

GREEN LIFE HIGASHI NIHON
Co., Ltd.

36－

Sompo Care Inc.

Benesse Style Care Co., Ltd.

441

323

－

Attribute

Remarks

Facilities owned by HCM

Consolidated subsidiaryof SHIP HEALTHCAREHOLDINGS, INC., which
is listed on the TSE First
SectionA nursing care business that plays a central rolein the Lifecare Business of SHIP HEALTHCAREHOLDINGS, INC. Operates nursing care facilities
nationwide.

AQUAMARINE Nishinomiyahama
Kobe Gakuentoshi Building
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
Smiling Home Medice Adachi
SHIP SENRI BUILDING (Well House Senri-Chuo)

Consolidated subsidiaryof Sompo Holdings, Inc.,
which is listed on the TSEFirst Section

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

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

Consolidated subsidiaryof Benesse Holdings, Inc.,
which is listed on the TSEFirst Section

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

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

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

SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

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

ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan

Sawayaka Club Co., Ltd.

85－

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

AS PARTNERS Co., Ltd.

17－

Unlisted company

31(Note 1): “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of July 31, 2019).

Ⅳ Appendix

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

Operator nameJAPAN LIFEDESIGN Inc.

Medical Corporation AIKOKAI

Kyowakai Medical Corporation

Kawashima Corporation

Facilities andhousing forthe elderly

3

10

4
(Note 2)116

Attribute

Remarks

Facilities owned by HCM

Hospital－

Unlisted company
Capital partnership byNomura Real Estate
Holdings, Inc.

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

GOOD TIME HOME Fudo-mae

2

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

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

AIKOEN ICHIBANKAN Building (AIKOUENICHIBANKAN)
Niigata Rehabilitation Hospital－

A major medical corporation operating a wide
range of businesses including six hospitals(2,024 beds), four long-term care healthfacilities (495 beds) and home care support.
Provides safe and convenient medical/nursing
care services for all, from those in an acutestage to those in need of rehabilitation, athome medical/nursing care.

SHIP SENRI BUILDING (Senri-Chuo Hospital)

Sunny Life Kita-Shinagawa

6－Unlisted company

A major nursing care business operator
operating nationwide centering on the Tokyo
Metropolitan Area, with Sunny Life as the mainbrand and under the motto “Encourage theelderly and the family to get relieved fromexhausting nursing care.” None of theirfacilities requires initial fees.
Former Yuuai Holdings Group company.
Operates paid nursing homes, etc. under the“Hanakotoba” brand centering on Kanagawa.
Came under Sony Financial Holdings Inc. in2017.

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

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

Verde Minowa
Verde Hotaka

Proud Life Inc.

26－

Consolidated subsidiaryof Sony Financial
Holdings Inc., which islisted on the TSE First
SectionVerde Corporation

5－

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

32

Ⅳ Appendix

Summary of Appraisal Report (1)Summary of Appraisal Report
Property nameAppraisal company

End of January 2019

Appraisal value Direct capitalization method
DCF method(million yen)
(Note 1)
Terminal
Indicated Capitalization Indicated(A)
Discount rate capitalization
rate
value
value
(％)
rate
(％)
(million yen)(million yen)(％)

Appraisal NOI(million yen)
(Note 2)

Appraisal value(million yen)(B)

Difference(million yen)(A)- (B)Rich Appraisal InstituteCo., Ltd.

2,140

2,160

5.3

2,130

5.0

5.5

119

2,140

0

Bonsejour Chitose-funabashi

The Tanizawa Sogo Appraisal
Co., Ltd.

974

993

4.4

966

4.5

4.6

49

974

0

Bonsejour Hino

The Tanizawa Sogo Appraisal
Co., Ltd.

818

832

4.8

812

4.9

5.0

43

818

0

Bonsejour Musashi-shinjo

The Tanizawa Sogo Appraisal
Co., Ltd.

643

653

5.1

638

5.2

5.3

36

643

0

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa

The Tanizawa Sogo Appraisal
Co., Ltd.

850

864

5.0

844

5.1

5.2

47

850

0

Medical Rehabilitation Home Bonsejour Komaki

The Tanizawa Sogo Appraisal
Co., Ltd.

1,450

1,460

5.5

1,440

5.6

5.7

92

1,450

0

ASHEIM Hikarigaoka

Japan Real Estate Institute

1,570

1,580

4.8

1,560

4.6

5.0

76

1,570

0

ASHEIM Bunkyohakusan

Japan Real Estate Institute

1,650

1,670

4.4

1,630

4.2

4.6

74

1,630

+20

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate Institute

3,790

3,830

4.9

3,740

4.7

5.1

193

3,810

-20

SOMPO CARE La vie Re Azamino

Japan Real Estate Institute

3,230

3,270

4.6

3,190

4.4

4.8

156

3,270

-40

SAWAYAKA Tachibanakan

Japan Real Estate Institute

1,590

1,600

5.6

1,570

5.4

5.8

95

1,580

+10

SAWAYAKA Mekarikan

Japan Real Estate Institute

1,450

1,460

5.7

1,440

5.5

5.9

87

1,450

0

SAWAYAKA Tagawakan

Japan Real Estate Institute

411

414

5.8

408

5.6

6.0

26

412

-1

GOOD TIME HOME Fudo-mae

Japan Real Estate Institute

1,950

1,970

4.4

1,920

4.2

4.6

92

1,940

+10

Bonsejour Yotsugi

The Tanizawa Sogo Appraisal
Co., Ltd.

886

902

4.7

879

4.8

4.9

48

886

0

Medical Home Bonsejour Itami

The Tanizawa Sogo Appraisal
Co., Ltd.

557

566

5.1

553

5.2

5.3

36

557

0

Kobe Gakuentoshi Building(Happine Kobegakuentoshi)

DAIWA REAL ESTATEAPPRAISAL CO.,LTD.

4,410

4,470

4.7

4,390

4.5

4.9

225

4,420

-10

GreenLife Moriguchi

DAIWA REAL ESTATEAPPRAISAL CO.,LTD.

4,400

4,460

4.6

4,370

4.4

4.8

220

4,410

-10

Happine Kobe Uozaki Nibankan

DAIWA REAL ESTATEAPPRAISAL CO.,LTD.

995

1,010

4.6

988

4.4

4.8

48

995

0

Granda Tsuruma-Yamato

The Tanizawa Sogo Appraisal
Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

1,060

0

Smiling Home Medice Adachi

The Tanizawa Sogo Appraisal
Co., Ltd.

2,440

2,470

4.7

2,430

4.8

4.9

119

2,440

0

AQUAMARINE Nishinomiyahama(Note 1): “Appraisal value” is based on the appraisal report with July 31, 2019, as the appraisal date.
(Note 2): “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with July 31, 2019, as the appraisal date, and is rounded down to the nearest million yen. The above appraisal
NOI is NOI obtained by direct capitalization method.

33

Ⅳ Appendix

Summary of Appraisal Report (2)Summary of Appraisal Report
Property nameAppraisal company

AIKOEN ICHIBANKAN Building(AIKOEN ICHIBANKAN)

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

Direct capitalization
methodEnd of January 2019 (Note 3)

DCF method

Terminal
Indicated Capitalization IndicatedDiscount rate capitalization
value
rate
value
(％)
rate
(％)
(million yen)(million yen)(％)

Appraisal NOI(million yen)
(Note 2)

Appraisal value(million yen)(B)

Difference(million yen)(A)- (B)The Tanizawa Sogo Appraisal
Co., Ltd.

862

866

5.2

860

5.3

5.4

45

863

-1

Hanakotoba Minami

Japan Real Estate Institute

1,190

1,200

4.6

1,170

4.4

4.8

56

1,190

0

Hanakotoba Miura

The Tanizawa Sogo Appraisal
Co., Ltd.

664

671

4.9

661

5.0

5.1

35

664

0

SOMPO CARE La vie Re Hama-Kawasaki

JLL Morii Valuation & Advisory
K.K.

1,820

1,850

4.6

1,790

4.4

4.8

89

1,820

0

Japan Real Estate Institute

2,230

2,260

4.5

2,200

4.3

4.7

109

2,230

0

Hanakotoba Shin-Yokohama Ⅱ

Japan Real Estate Institute

401

403

4.8

398

4.6

5.0

22

401

0

Hanakotoba Odawara

The Tanizawa Sogo Appraisal
Co., Ltd.

948

960

4.9

943

4.8/5.0

5.1

49

948

0

Verde Minowa

DAIWA REAL ESTATEAPPRAISAL CO.,LTD.

1,700

1,710

5.0

1,690

4.8

5.2

109

1,700

0

Verde Hotaka

DAIWA REAL ESTATEAPPRAISAL CO.,LTD.

1,360

1,370

5.6

1,350

5.4

5.8

90

1,360

0

Sunny Life Kita-Shinagawa

DAIWA REAL ESTATEAPPRAISAL CO.,LTD.

1,970

2,000

4.5

1,950

4.3

4.7

91

1,960

+10

SOMPO CARE Sompo no ie S Awajiekimae

Japan Real Estate Institute

2,170

2,190

5.2

2,140

5.0

5.4

116

2,170

0

SOMPO CARE Sompo no ie S Kobekamisawa

Japan Real Estate Institute

1,340

1,350

5.2

1,320

5.0

5.4

72

1,340

0

Niigata Rehabilitation Hospital

Japan Real Estate Institute

2,260

2,270

6.6

2,250

6.4

6.8

152

2,260

0

SHIP SENRI BUILDINGThe Tanizawa Sogo Appraisal
Co., Ltd.

14,30014,4004.5

14,2004.5/4.6

4.7

680

14,300070,47971,204－69,870

－

－

3,665

70,511-32

Hanakotoba Shin-Yokohama

Total(Note 1): “Appraisal value” is based on the appraisal report with July 31, 2019, as the appraisal date.
(Note 2): “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with July 31, 2019, as the appraisal date, and is rounded down to the nearest million yen. The above appraisal
NOI is NOI obtained by direct capitalization method.
(Note 3): Appraisal value based on the appraisal report with November 30, 2018, as the appraisal date is indicated for the 8 properties acquired on February 1, 2019.

34

Ⅳ Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 9th Fiscal Period)(Unit: thousand yen)

Real estate lease business revenue
Property nameRent
revenueOtherrevenue

AQUAMARINE Nishinomiyahama
Bonsejour Chitose-funabashi
Bonsejour Hino
Bonsejour Musashi-shinjo
Medical Rehabilitation Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation Home Bonsejour Komaki
ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan
SOMPO CARE La vie Re Machidaonoji
SOMPO CARE La vie Re Azamino
SAWAYAKA Tachibanakan

Real estate lease business expenses

Not disclosed(Note 1)SAWAYAKA Mekarikan
SAWAYAKA Tagawakan
GOOD TIME HOME Fudo-mae
Bonsejour Yotsugi
Medical Home Bonsejour Itami
Kobe Gakuentoshi Building(Happine Kobegakuentoshi)
GreenLife Moriguchi
Happine Kobe Uozaki Nibankan
Granda Tsuruma-Yamato

Propertytax

Outsourcing

Repairexpenses

Depreciation
andamortization

NOI (Note 2)

Other23,183

3,004

2,100

2,504

189

14,985400

59,144

5,568

1,794

224

-

95

3,048

404

21,358

5,057

1,240

213

-

73

3,130

400

19,478

4,091

1,012

167

-

64

2,447

400

16,133

8,386

1,824

213

-

131

5,817

400

21,08014,098

4,566

201

-

302

8,627

400

39,516

12,893

3,687

388

1,006

138

7,272

400

38,17810,556

2,502

388

-

103

7,161

400

36,73044,301

5,878

780

745

306

36,190400

96,88933,712

4,795

780

1,580

224

25,933400

77,424

26,185

2,660

1,140

-

263

21,721

400

47,41025,635

2,978

1,140

-

167

20,949400

43,597

8,320

1,122

1,140

-

79

5,578

400

12,951

12,609

3,092

600

282

144

8,089

400

46,479

4,942

970

223

-

62

3,286

400

20,712

6,503

1,377

371

-

95

4,260

400

13,93952,163

9,599

900

1,346

490

39,427400

112,763

34,536

6,956

1,388

1,733

321

23,735400

109,199

9,699

1,401

1,200

177

76

6,444

400

24,244

7,143

1,938

618

-

128

4,058

400

27,164(Note 1): ”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants.
The total is the sum of amounts received as rent for the fiscal period under review based on the lease agreements.
(Note 2): “NOI”=Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

Insurance
expenses35

Ⅳ Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 9th Fiscal Period)(Unit: thousand yen)

Real estate lease business revenue
Property nameRent
revenueOtherrevenue

Smiling Home Medice Adachi
AIKOEN ICHIBANKAN Building(AIKOEN ICHIBANKAN)
Hanakotoba Minami
Hanakotoba Miura
SOMPO CARE La vie Re Hama-Kawasaki
Hanakotoba Shin-Yokohama
Hanakotoba Shin-Yokohama Ⅱ
Not disclosed(Note 1)

Hanakotoba Odawara
Verde Minowa
Verde Hotaka
Sunny Life Kita-Shinagawa
SOMPO CARE Sompo no ie S Awajiekimae
SOMPO CARE Sompo no ie S Kobekamisawa
Niigata Rehabilitation Hospital
SHIP SENRI BUILDING
Total

2,008,674

2,000,800

Real estate lease business expenses

7,874

Propertytax

Outsourcing

Repairexpenses

Depreciation
andamortization

NOI (Note 2)

Other

13,316

3,231

540

454

150

8,541

400

59,952

8,559

2,563

780

90

95

4,630

400

22,731

6,648

1,545

600

47

64

3,991

400

27,943

6,548

1,536

600

80

76

3,855

400

17,70614,152

-

2,770

-

175

10,809396

46,764

10,285

-

900

359

210

8,418

396

60,045

2,929

-

600

-

78

1,853

396

13,737

6,341

-

600

-

84

5,260

396

26,531

19,941

-

1,020

196

433

17,894396

61,92922,376

-

1,020

549

212

19,701892

47,435

7,362

-

600

-

99

6,265

396

48,40327,311

4,931

510

300

234

20,934400

58,081

17,144

2,912

510

566

147

12,608400

35,754

26,323

9,860

1,030

-

328

14,604500

78,16147,889

-

1,500

-

994

44,997396

368,910586,72188,986

27,761

6,847

436,533

14,574

1,858,487

12,018(Note 1): ”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants.
The total is the sum of amounts received as rent for the fiscal period under review based on the lease agreements.
(Note 2): “NOI”=Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

Insurance
expenses36

Ⅳ Appendix

Balance Sheet and Statement of Income for the 9th Fiscal Period
Balance Sheet

Statement of Income(Unit: thousand yen)

(Unit: thousand yen)
8th Fiscal Period(Ended January 2019)

9th Fiscal Period(Ended July 2019)

8th Fiscal Period(Ended January 2019)

AssetsCurrent assets

1,500,281

2,329,873

Cash and deposits

1,318,873

1,897,300

108,051

142,524－

16

73,355

110,615

Cash and deposits in trust
Operating accounts receivable
Prepaid expenses

Operating revenue
Lease business revenue
Other lease business revenue
Operating expenses

9th Fiscal Period(Ended July 2019)

1,301,210

2,008,674

1,294,178

2,000,800

7,031

7,874

654,208

818,931－

179,416

Expenses related to rent business

448,967

586,721

Non-current assets

42,817,455

65,958,581

Asset management fee

122,274

144,071

Property, plant and equipment

42,714,752

65,729,194

Buildings in trust

21,584,524

29,538,375

Asset custody fee

2,164

3,207

Structures in trust

70,97076,701

Administrative service fees

15,482

19,416

Machine and device in trust

11,446

10,773

Directors’ compensations

3,000

3,000

Tools, furniture and fixtures in trust

34,04658,39321,009,170

36,044,949

Property tax

16,886

17,685

Consumption taxes receivable

Land in trust

4,594

－

Intangible assets

3,465

40,596

Investments and other assets

99,237

188,790

Deferred assets

9,964

37,10344,327,701

68,325,557

Construction in progress in trust

Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Note 1)
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivatives liabilities
Other
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Valuation and translation adjustments(Deferred gains and losses on hedges)
Total net assets
Total liabilities
and net assets（注1）：1年内返済予定の長期借入金を含みます。

9,942,694
40,8689,450,000
88,452
145,439
950
5,243
211,457283
14,070,373
13,000,000
1,009,999
34,60425,769－24,013,068
20,340,403
19,800,696
539,706

8,290,182
11,7167,700,000
73,843
174,390967－
329,19172
26,609,080
24,750,000
1,734,009
86,76637,784520
34,899,262
33,464,079
32,392,149
1,071,929-25,769-37,784

20,314,633
44,327,701

33,426,294
68,325,557

Other operating expenses
Operating income
Non-operating income
Reversal of distribution payable

45,43344,829647,002

1,189,743

537

16,614

533

f

1,608

Interest income

35Insurance income－

15,000Non-operating expenses

106,914

159,310

Interest expenses

65,04690,543

Investment unit issuance expenses

4,982

11,40636,88557,359Ordinary income

540,625

1,047,048

Income before income taxes

540,625

1,047,048

Borrowing expenses

946

968

Income taxes - current

950

968

Income taxes - deferred-4-0539,678

1,046,080

Total income taxes

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)(Note 1): Figures include current portion of long-term loans payable.

27

25,848539,706

1,071,929

37

IV Appendix

Environment Surrounding Healthcare Facilities
Rising Elderly Ratio and Increase in Elderly Single Households
Outlook of Change in Japan’s Population and Elderly Ratio(10 thousand people)
15,000█ 65-74 years old

64歳以下█ 75 years old or older

14.6%

10.3%

40%

65～74歳

20.2%

10,0005,0 00Estimate

ActualRatio of 65 years
old or older█ 64 years old or younger

10,161

32.8%

30.0%

26.6%

36.8%

9,322

8,577

7,740

6,723

10,854

10,718
1,109
717

1,407
1,160

1,754
1,632

1,497
2,180

1,522
2,260

1,643

776
471
昭和60年

平成７年
1995

平成17年

平成27年

平成37年

平成47年

平成57年

0

1985

2005

2015

2025

2,277

2035

20%

2045

Estimate

Actual█ Other households█ Couple with no other members

30,000

30.7%

28.5%

20,000

5,403

4,648
0

37.4%

39.0%

40.0%

50%

35.7%

6,879

6,756

6,606

6,510

6,590

30%

6,277

6,740

6,763

6,693

6,666

6,870

20%

34.0%

32.6%
6,650

5,818

5,033

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

3,865

4,980

6,253

7,025

7,512

7,959

8,418

8,963

2005

2010

2015

2020

2025

2030

2035

2040

June
2014

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

June
2015

Guidelines Concerning REITs
Targeting Hospital Real Estate

March
2016

Housing Life Basic Plan
(nationwide plan)0%

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

Upgrades and Expansion of Healthcare Facilities Backed
by Government Policy

40%

Resident capacity
Resident capacity

230

0%

thousand people(Source) “Projection of the Number of Households for Japan (Nationwide Projection)” (Projection for January 2013)
and (Projection for 2018) by the National Institute of Population and Social Security Research

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

Supply Status of Paid Nursing Homes(Resident capacity)

600,000

Supply rate

█ Resident capacity

1.0%

400,000
200,000

0.5%

0.5%

0.6%

0.6%

0.7%

2006

2007

2008

2009

2010

1.2%

1.3%

0.7%

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

1.1%

315,234 350,990

2011

2012

2013

391,144 424,828

2014

2015

1.4%

1.5%

2.0%
1.5%

482,792 518,507

1.0%

2016

2017

200,000

100,000
50,000
0

0.18%
0.01%
3,448

56,1370.29%
89,122

0.36%
114,3150.42%

135,352

0.46%

0.50% 0.54%

151,667 166,279

0.57% 0.59%

181,083 191,871

0.61% 0.62% 0.64%

202,505 210,859

1,460

thousand people

2014

2.1％

2025

４％

Current Status of Reconstruction of Hospitals, etc.
 Hospitals that were constructed in the 1960’s and 1970’s and do not meet theearthquake resistance standards still exist.
Ratio of quake-resistant paid nursing homes is 95% or more while that of quakeresistant hospitals remains at 74.5%.
(Ministry of Health, Labour and Welfare’s 2018 “Survey on Seismic Retrofit of Hospitals”)

0.0%

1.00%

150,000

thousand people

Resident capacity<“Act for Partial Revision of the Act on Promotion of Seismic Retrofitting of Buildings” was enforced in November 2013>(Units)250,000
Supply rate for 65 years old or older

2005

0.9％

690

Outcome indicator

0.5%

Supply Status of Serviced Housing for the Elderly█ Number of units

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

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

10%

Promotion of Further Supply of Healthcare Facilities

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

0.66% 0.67% 0.69%

218,195 225,374 231,973

238,289 245,728

Dec.
June Dec. June
2011年 June
2012年 Dec. June
2013年 Dec.
2013年 June
2014年 Dec.
2014年
2015年June
2015年Dec.
2016年June
2016年Dec.
2017年June
2017年Dec.
2018年
2018年
2019年
12月
6月
6月
12月 2014
6月
12月
6月 2015
12月 2015
6月 2016
12月 2016
6月 2017
12月2017
6月
12月
6月
2011
2012
2012 2013201320142018 2018 2019

0.50%

0.00%

(Hospital: Having more than 3 floors above ground and a total floor area of 5,000 m² or more)

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

38

Ⅳ Appendix

Regional Comprehensive Care System

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

Image of Regional Comprehensive Care System
When you get sickWhen you need nursing care
Nursing care

Medical care

• Acute care hospital• Subacute stage, recovery stage
Rehabilitation hospital

Daily medical care
• Primary care doctor• Regional cooperative
hospital• Regional comprehensive
support center• Care manager

Hospital visit&
stay

Outpatient nursing care&admission

Residence• House• Serviced housing for the elderly, etc.
We coordinate consultation
business and services

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

To live a healthy life foreverLife support & nursing care prevention

 Facility and home service• Facilities covered by public
aid providing long-termcare to the elderly• Long-term care healthfacility• Communal daily long-term
nursing care for a dementia
patient• Daily life long-term nursing
care for those admitted to a
specified facility, etc.

* Regional
comprehensive
caresystemsareexpected to be established for each area in thesphere of everyday life (specifically junior highschool districts) where necessary services areprovided within about 30 minutes

Golden age club, local government, volunteer, NPO, etc.
Source: Website of Ministry of Health, Labour and Welfare39

Ⅳ Appendix

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

(Hospital Ward A)
Advanced acute

Medical institutions

stage function

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

Current Functions of Hospital Beds
(as of July 2015)

Number of Beds to be Required in
2025

Total 1.331 million beds

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

Advanced acute stage
169,000 beds
(14％)

(Hospital Ward B)
Select medical
function
voluntarily

Acute stage function(Hospital Ward C)
Recovery stage function(Hospital Ward D)
Chronic stage function

Decrease by approx. 30%

Acute stage
593,000 beds
(48％)

Increase by approx. 3 times

Recovery stage
375,000 beds
(31％)

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

Prefectural
government

Acute stage
401,000 beds
(34％)

Report current status
and future directionof medical functions

Chronic stage
354,000 beds
(28％)

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

Unused, etc.
87,000 beds

Shift to nursing care facilities,
in-home medical care, etc.

Chronic stage
284,000 beds
(24％)

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

(Source): Prepared by the Asset Management Company based on “Initiatives for Medical/Nursing Care
Reform” (June 22, 2017) by the Ministry of Health, Labour and Welfare40

Ⅳ Appendix

HCM’s Investment Philosophy and Three Features

Investment Philosophy

Three Features

Serve as a conduit between the nursing careand medical service industries and thecapital markets

Investment in healthcare facilities for which demandis expected to grow• Increase in demand due to further advancement of aging
society• Upgrading and expansion of healthcare facilities backed
by government policy
Strong support from sponsors

Develop a portfolio
specialized in healthcare
facilities,
for which demand is
expected to growPromote the supply ofhealthcare facilities
as social infrastructure

We seek to realize a society
where all people can live vibrantly
and with peace of mind

• Utilization of advanced expertise in “nursing care and•medical service,” “fund management” and “finance” heldby SHIP HEALTHCARE, NEC Capital and SMBC
Securement of property acquisition opportunities byutilizing extensive networks

Stable cash flow in the long term

• Conclusion of long-term fixed-rent lease agreements with•credible operators
Proper portfolio management based on strong relationshipwith operators

41

Ⅳ Appendix

HCM’s Network

Asset Custody Company
Administrative Agent
Administrator of theUnitholders’ Registry

HCM

Sumitomo Mitsui Trust Bank

Healthcare & Medical
Investment Corporation

Accounting Auditor

General meeting ofunitholders

PricewaterhouseCoopers
Aarata LLC

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

Sponsor Support Companies

Support Companies

Asset Management
Agreement

Sumitomo Mitsui Finance andLeasing
Yoei
GinsenKobe Tochi Tatemono
Muromachi Building

SponsorSupportAgreement

Asset Management Company

Healthcare
Asset Management Co., Ltd.

Pipeline
SupportAgreement

SMBC Trust Bank Ltd.
RISA Partners, Inc.
Max-Realty Inc.
SMFL MIRAI Partners
CO., Ltd42

Ⅳ Appendix

Information Related to Investment Units (As of the end of 9th fiscal period)
Status of Unitholders

List of Top Unitholders

Ratio of Number of Investment Unitsby Unitholder Type
Foreign investors
8.6%
Other companies
5.6%
Securities
companies
4.4%

Total
311,001
units

Ratio of Number of Unitholders
by Unitholder Type

Other companies
1.4%
Foreign investors
0.6%

Securities companies
0.1%
Financial institutions
0.3%

Individuals, etc.
36.0%

Total
16,644peopleFinancial
institutions
45.4%

Individuals, etc.
97.6%

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

1.2
5.2

1.1
4.6

1.1
5.3

8.5

7.6

7.2

3.1
6.6
7.1

46.6

50.1

8.6
5.6

5th FP
第5期

40.1

6th FP
第6期

Ownership
ratio
(%)

１

Japan Trustee Services Bank Ltd.
(Trust Account)

65,22521.0

２

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

34,281

11.0

３

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

11,355

3.7

４

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

10,5693.4

5Morgan Stanley MUFG Securities Co., Ltd.

5,312

1.7

6

NORTHERN TRUST CO.(AVFC) RE
FIDELITY FUNDS

5,264

1.7

7

JPMorgan Securities Japan Co., Ltd.

4,842

1.6

NEC Capital Solutions Limited

4,000

1.3

SHIP HEALTHCARE HOLDINGS INC.

4,000

1.3

Sumitomo Mitsui Banking Corporation

4,000

1.3

148,848

47.9

Securities companies

Other companies
48.0

45.4

Financial institutions
Individuals, etc.

48.5

Name

4.4

Foreign investors
36.6

Ranking

Number ofinvestment
units owned(units)

36.3

35.2

36.0

7th FP
第7期

8th FP
第8期

9th FP
第9期(Note 1): Ratios in the graphs are rounded to the first decimal place.

8

Total

43

Ⅳ Appendix

Overview of Unitholder Special Benefit Plan
Company Name
Benesse Senior Support Co., Ltd.

Details of Special BenefitsFree consultation on nursing care

Sompo Care Inc.



Discount advance payment or monthly fee

JAPAN LIFE DESIGN Inc.

Free trial move-in (two-days and one-night with meals)
Discount initial fees

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

Free trial move-in (two-days and one-night with meals)
Tour with free lunch

Sawayaka Club Co., Ltd.



Discount monthly fee for initial monthFree trial move-in (two-days and one-night with meals)
Tour with free lunch

AS PARTNERS Co., Ltd.






Discount initial fees
Discount monthly fee
Free trial move-in (four-days and three-nights)
Tour with free lunch

Proud Life Inc.



Discount deposit or initial fees

(Benesse’s consultation
room for nursing care)(Note 1): Details of special benefits are for people who are unitholders as of the end of 9th fiscal period and are subject to change.

44

Ⅳ Appendix

Profile of Asset Management Company
Organizational Structure

Profile of the Company
Trade name

Healthcare Asset Management Co., Ltd.

Location

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

FoundedNovember 28, 2013

Capital stock

150 million yen

President andRepresentative

Seiji Yoshioka

Shareholders

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

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

4.6%

Ginsen

4.6%

Kobe Tochi Tatemono

4.6%

Muromachi Building

4.6%

Compliance Committee
Representative Director

Internal Audit Office

Investment
Department

Compliance Office

Asset Management
Department

Financial & Administration
Department

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

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

45

Ⅳ Appendix

Profile of Major Sponsors
SHIP HEALTHCARE HOLDINGS, INC.

With a stated mission to “create an environment of people protecting life,”
SHIP HEALTHCARE HOLDINGS, INC. focuses on the five business domainsof medical, health, welfare, nursing care and services. Centering aroundthe partnership with medical institutions, the entire group companies carryout a variety of nursing care and medical service-related businesses,
ranging from consultation on reconstruction, development, etc. of hospitals
and such to operation of nursing homes and dispensing pharmacy business.

Headquarters
location

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

Representative

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

FoundedAugust 1992

Capital stock

15,553.01 million yen

Sales

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

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

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

Representative President: Tomoo Imazeki
FoundedNovember 1978

Capital stock

3,776.88 million yen

Sales

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

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

Headquarters
location

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

Representative President and CEO: Makoto Takashima
Capital stock

1,770.9 billion yen

46

Disclaimer
This presentation material contains forward-looking statements including forecasts,
outlooks, goals and plans. These statements are based on the information
available as of the date when this material is prepared (September 13, 2019) andincorporate certain subjective assumptions about uncertain factors that may affectfuture results. Accordingly, these statements are inherently not guarantees of
future performance and actual results may differ materially.
The opinions, outlooks and estimates contained in this material reflect our viewand judgment based on information as of the date when this material is preparedand involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness andvalidity of information contained in this material. It is not promised that
information contained in this material will always be updated.
Contents of this material are subject to change without notice.
This material is not intended as a solicitation for investment. Any investment
decision must be made based on your own judgment and responsibility.

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