Financial Results
Briefing materials
Financial Period Ended July 2021
（13 th Fiscal Period）
September 15, 2021

Asset Management Company

Securities Code: 3455

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

Contents

Ⅰ

Financial SummaryⅡ

1. Highlights for 13th Fiscal Period (Ended July
2021)

P3

2. Impact of COVID-19

P4

3. Major Indexes for 13th Fiscal Period(Ended July 2021)
4. Actual Results for 13th Fiscal Period(Ended July 2021)
5. Earnings Forecasts for
14th Fiscal Period (Ending January 2022) and15th Fiscal Period (Ending July 2022)

P5

6. Financial Status

P8

7. Changes in Distribution Per Unit

P6

Ⅲ

Status of Asset Management
1. Portfolio Highlights

P13

2. Stable Cash Flow in the Long Term

P14

3. Reorganization of Asset Management
Company

P16

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

P18

2. Expansion of Pipeline

P19
P21

P9

3. Actions for Projects of Facilities and Housing
for the Elderly
4. Actions for Hospital Projects

P22

8. Changes in Unrealized Gain

P10

5. Actions for ESG

P23

9. Changes in Unit Price

P11

P7

Ⅳ

Appendix1

Financial Summary2

I Financial Summary

1. Highlights for 13th Fiscal Period (Ended July 2021)

1 PerformanceOperating revenue:2,073 million yen (+14 million yen from previous fiscal period, +0 million yen from forecast)
Net income:921 million yen (+11 million yen from previous fiscal period, +9 million yen from forecast)Distribution per unit :3,266 yen(+40 yen from previous fiscal period, +30 yen from forecast)
NAV per unit
:120,907 yen(+1,639 yen from previous fiscal period)

2 Financial StatusInterest-bearing liabilities totaled 33.15 billion yen (±0 billion yen from previous fiscal period), with LTV at 48.1%(△0.1% from previous fiscal period)
Improving the outlook for long-term issuer ratings (JCR : A Stable → A Positive)

3

Management Status
 Asset size is 37 properties/67.0 billion yen, with unrealized gain standing at 5.6 billion yen
 Newly acquired Nichii Home Nishikokubunji, a paid nursing home with care service
 The pipeline has expanded to approximately 25 billion yen in total The portfolio operational rate is 100%. No rent reduction/exemption, deferral of rent payment

3

I Financial Summary

2. Impact of COVID-19
The impact of the spread of COVID-19 on the management status of
HCM is little.
 Stable rent revenue secured<Long-Term Fixed-Rent Lease Agreements>
Averageremaining leaseterm Long-term fixed-rent lease agreements have beenconcluded with carefully selected operators.

12.7 years

 There has been no rent reduction/exemption, deferral of

Ratio of fixed
rents

100%

Portfolio
operational
rate

100%

rent payment, or mid-term cancellation of leaseagreements.

 Stable facility operations continued
 Strengthening measures against infectious diseases by

operators<Operatorsʼ measures against infectious diseases>Creating a corresponding manual・Thorough operation
Conducting thorough medical checks for residents and the staff
Restricting entry of facilities and conducting online visits
Installation of Air cleaner, sterilizer, etc.

 Average occupancy rate (Note) of the facilities is kept at ahigh level of 91.1%.

(Note) The average occupancy rate indicates the ratio obtained by dividing the total number of residents by the total capacity, rounded
off to the first decimal place. The number of residents used in the calculation is described in the latest Property DisclosureStatement of Important Matters, which the Asset Management Company obtained as of the date of preparing this document, forthe facilities and housing for the elderly owned by HCM.

 Continue asset management with consideration for infection prevention
 Visits to facilities for property surveys, etc. are carried out within the minimum necessary range
 Review of schedule for repair works which are not urgent

4

Ⅰ Financial Summary

3. Major Indexes for 13th Fiscal Period (Ended July 2021)
Figures in parentheses indicate the change
from the end of previous period

Asset (Assets)

Debt (Liabilities)

Number of properties

37 propertiesc(+1 property)

Total acquisition price67.0 billion yen)(+0.7 billion yen)

Total appraisal value

Unrealized gain

Average appraisal NOI
yield

Portfolio operational rate

Ratio of fixed rents
Ratio of investment inthree major
metropolitan areas
Average remaining leaseterm

72.5 billion yen)(+1 billion yen)
5.6 billion yen)(+0.5 billion yen)interest-bearing liabilities

33.15 billion yen)(±0 billion yen)

Average remaining terms
to maturity

2.4 years)(△0.5 years)

Total amount of

Average borrowinginterest rate
Ratio of long-term debt

100%)

fixed interest rates(±0%)
48.1%)

LTV(△0.1%)

Long-Term Issuer Rating(JCR)(+0.2%)
12.7 years)(△0.6 years)

A (Positive)

Equity (Net assets)
Total sum of fair value(±0%)
86.5%_

(±0%)
100%)

(±0%)

（±0%)

78.9%)

Ratio of debt with

5.6%)

100%)

0.57%)(±0%)

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

NAV per unit

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

47.5 billion yen)(+5.7 billion yen)
3,266 yen)(+40 yen)
304 yen)(+4 yen)
120,907 yen)(+1,639 yen)5

Ⅰ Financial Summary

4. Actual Results for 13th Fiscal Period (Ended July 2021)
Achieved distribution per unit of 3,266 yen, +40 yen over previous period, due to a newproperty acquisition.
(Unit: million yen)

12th fiscal
period13th Fiscal Period Actual Results(Comparison with Forecast)

13th Fiscal Period(Ended July 2021)(Ended January
2021)
ActualForecast(Note 2)

Actual

(A)

(B)

(C)

Operating revenue

2,058

2,072

Operating expenses

990

Expenses related to rent
business

Comparison with
Comparison with 12th Fiscal Period
Forecast(C)-(B)(C)-(A)(C)-(A)（A）(％)

2,073

+0

+14

+0.7

1,002

994

△7

+4

+0.4

678

697

690

△6

+12

+1.8

(Depreciation)

467

474

473

△0

+6

+1.4

General and administrative
expenses

311

305

303

△1

△8

△2.6

1,067

1,070

1,078

+8

+10

+1.0

Non-operating income

1

－

1

+1

+0

+22.6

Non-operating expenses

158

157

157

+0

△0

△0.1

Ordinary income

910

912

922

+9

+11

+1.2

Net income

910

911

921

+9

+11

+1.2

Distribution per unit (yen)

3,226

3,236

3,266

+30

+40

+1.2

+30

+36

+1.2

±0

+4

+1.3

Operating income

Distribution of earnings

2,880

Distribution of reserve fortemporary difference
adjustments

46

Distribution in excess of earnings(return of capital) (Note 1)

300

2,932
304

2,962
－
304

Difference in operating expenses (△7)
 Decrease in expenses related to rent business(△6)
 Repair expenses (△5)
 Decrease in general and administrative expenses(△1)
 Survey fee (renewal of ER)(△2)

13th Fiscal Period Actual Results(Comparison with 12th Fiscal Period)
Difference in operating revenue (+14)
 Rent revenue from property acquired in the
13th fiscal period
Difference in operating expenses (+4)
 Increase in expenses related to rent
business(+12)
 Expensing of property/city planning tax forproperty acquired in 11th FP (+2)
 Repair expenses (+2)
 Depreciation (+6)
 Decrease in general and administrative expenses(△8)
 Expenses related to investors meeting (△7)(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 13th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended January 2021” dated March 16, 2021.

6

Ⅰ Financial Summary

5. Earnings Forecasts for 14th Fiscal Period (Ending January 2022) and15th Fiscal Period (Ending July 2022)

As for the 14th fiscal period, there are no major changes from the initial forecast anddistribution per unit is expected to be 3,236 yen (△30 yen from the previous period, ±0 yen
from initial forecast).
(Unit: million yen)
13th Fiscal
Period15th Fiscal Period

14th Fiscal Period(ending July 2022)(ending January 2022)(ending July
2021)

14th Fiscal Period Forecast (Comparison
with 13th Fiscal Period Results)
Difference in operating revenue (+7)(Note 2)

Forecast

Comparison
with initial
forecast

Comparison
with 13th fiscal
periodForecast

Comparison
with 14th fiscal
period forecast

(A)

(B)

(C)

(C)-(B)(C)-(A)(D)(D)-(C)Operating revenue

2,073

2,079

2,080

+0

+7

2,080

±0

Operating expenses

994

1,009

1,009

+0

+15

1,019

+9

Expenses related to rent
business

690

702

705

+2

+14

710

+4

(Depreciation)

473

481

481

△0

+7

484

+3

General and administrative
expenses

303

306

304

△1

+1

309

+4

Operating income

1,078

1,070

1,070

△0

△8

1,061

△9

Non-operating income

1

－

－

±0

△1

－

±0

Difference in operating expenses (+9)

Non-operating expenses

157

159

159

△0

+1

149

△9

Ordinary income

922

911

911

+0

△10

911

+0

Net income

921

910

910

+0

△10

910

+0

Distribution per unit
(yen)

3,266

3,236

3,236

±0

△30

3,238

+2

 Increase in expenses related to rent
business(+4)
 Depreciation (+3)
 Expensing of property/city planning tax forproperty acquired in 13th FP (+1)
 Increase in general and administrative expenses(+4)
 Survey fee (renewal of ER)

Distribution per unit

2,962

2,927

2,927

±0

△35

2,928

+1

Initial forecast

Actual(Excluding distribution in excess ofearnings (return of capital)(Note1))

Distribution in excess ofearnings(return of capital) (Note 1)

304

309

309

±0

+5

310

+1

 Full-period contribution of rent revenue fromproperty acquired in the 13th
fiscal period (+6)
Difference in operating expenses (+15)
 Increase in expenses related to rent
business(+14)
 Repair expenses (+6)
 Depreciation (+7)

15th Fiscal Period Forecast (Comparison
with 14th Fiscal Period Forecast)Difference in Non-operating expenses (△9)
Decrease in interest expenses (△3)
Reduction of investment unit issuance expenses(public offering conducted in 9th FP) (△6)(Note 1) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2) The initial forecast for the 14th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended January 2021” dated March 16, 2021.

7

Ⅰ Financial Summary

6. Financial Status
We have built a stable financial base under the bank formation centering on Sumitomo Mitsui Banking
Corporation.
Status of Interest-Bearing Liabilities

Change in LTV and Total Interest-Bearing Liabilities

End of12th FP

Total amount of(billioninterest-bearing Liabilities yen)(billion（Social bonds）
yen)
Average remaining terms to(years)maturity
Ratio of debt with fixed（%）
interest rates

End of13th FP

Change

33.15

33.15

±0

40

2.0

2.0

±0

30

2.9

2.4

△0.5

20

100

100

±0

10

LTV

（%）

48.2

48.1

△0.1

Average borrowinginterest rate

（%）

0.57

0.57

±0

Diversification of Lenders

4.0%
4.0%
4.0%

Total amount

31.15 billion yen

4.7%
Lender

5.6%

14 companies

8.3%
8.7%

17.5%

32.9%

Target LTV is around 50％(billion yen)

（％）

52.0

Total interest-bearing liabilities (left axis)
LTV (right axis)

51.0
50.0
49.0

0

48.2

48.1

47.6

47.5

48.1

32.45

32.45

33.15

33.15

33.15

9th FP

10th FP

11th FP

12th FP

13th FP

48.0
47.0
46.0

(Note) LTV is based on total assets. LTV (market value base) is 44.5%.

Diversification of Maturities
Amount（billion
yen）

Ratio
（%）

■Sumitomo Mitsui Banking
Corporation

10.25

32.9

■Sumitomo Mitsui Trust Bank

5.45

17.5

■Resona Bank

2.70

8.7

■Nippon Life Insurance

2.60

8.3

■Nishi-Nippon City Bank

1.75

5.6

■Shinkin Central Bank

1.45

4.7

■Dai-ichi Life Insurance Company

1.25

4.0

■Hiroshima Bank

1.25

4.0

■Bank of Fukuoka

1.25

4.0

■77 Bank

0.95

3.0

■San ju San Bank

0.75

2.4

■Higashi-Nippon Bank

0.50

1.6

■Gunma Bank

0.50

1.6

■Bank of Yokohama

0.50

1.6

合計

31.15

100.0

Average remaining terms to maturity: 2.4 years(billion yen)
10

Long-term loans
Investment corporation bonds(social bonds)

8
6
4

9.25
7.25

7.00

4.45

2

3.20

2.0

0
14th

15th

16th

17th

18th

19th

20th

21st

22nd

30th

FP

FP

FP

FP

FP

FP

FP

FP

FP

FP

8

Ⅰ Financial Summary

7. Changes in Distribution Per Unit
HCMʼs distribution per unit is stable even under the COVID-19 pandemic. HCM aims to maintainstable distribution as a defensive sector.
(yen)

3,800
Distribution in excess of earnings
3,600

3,400

(Note 1)

3,643

Distribution (Note 2)Distribution (Excluding temporary effect）(Note 3)

3,200

3,320

3,240

3,226

2,951

2,926

3,266

3,236

3,238

2,927

2,928

2,924

2,928

3,120
3,180

3,000

3,035

2,794

2,800

2,697

2,653

2,699

2,943

2,918

2,962
2,957

2,879

2,786

2,699

2,600
2,440
2,400

3,363

2,589
2,508

2,425

2,200

2,000
0

4th FP

5th

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

14th FP

15th FP

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

January

July

January

July

January

July

January

July

January

July

January

July

2017

2017

2018

2018

2019

2019

2020

2020

2021

2021

2022

2022

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

9

Ⅰ Financial Summary

8. Changes in Unrealized Gain
Since the IPO, unrealized gains have been increasing steadily.
(million
yen)
（百万円）

(%)

7,000

10.0
Unrealized gain (left axis)
8.5

Unrealized gain ratio (right axis)

6,000

7.0

6.8

5,000

7.2

7.7

4,711

5.6

7.7
5,653

5,165
6.1

4,000

7.2

7.5

4,901

6.0
5.0

3,000
2,878

3.3

3,081

4.0

2,543
2,000

3.0

2,212
1,749

1,000

2.0

1,152

1.0

811
0

8.0
7.0

5,094

4.4

1.7

9.0

420
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

July

January

July

January

July

January

July

January

July

January

July

January

July

2015

2016

2016

2017

2017

2018

2018

2019

2019

2020

2020

2021

2021

0.0

10

Ⅰ Financial Summary

9. Changes in Unit Price
The investment unit price temporarily dropped to 80,000 yen but has been around 150,000
yen for the moment.
September 10, 2021
152,600 yen(yen)
160,000

HCM Trading volume (right axis)

150,000

TSE REIT Index

140,000

130,000

120,000

22,0008,000

January 2020
Japan's first COVID-19 infection
case confirmed

HCM

November 2017
Announcement of the firstacquisition of hospital realestate by a J-REIT(unit)

7,000
September 2018
Announcement of proposing
execution of distribution inexcess of earnings as a matterto be resolved at the general
meeting of unitholders

6,000

5,000

4,000

110,000

100,000

3,000
January 2019
Conducted the second public
offering since IPO

90,000March 19, 2020
80,000 yen
2,000

80,0001,000

70,00060,0002017/7/31
Jul.
31, 2017

2018/1/31
Jan.
31, 2018

2018/7/31
Jul.
31, 2018

2019/1/31
Jan.
31, 2019(Note) TSE REIT Index is relativized to the closing price on July 31, 2017.

2019/7/31
Jul.
31, 2019

2020/1/31
Jan.
31, 2020

2020/7/31
Jul.
31, 2020

2021/1/31
Jan.
31, 202102021/7/31
Jul.
31, 2021

11

Status of Asset Management

12

Ⅱ Status of Asset Management

1. Portfolio Highlights
Key Data

Number ofproperties

Total acquisition
price

Total appraisal
value (Note 1)

Average appraisal
NOI yield

37

67.0 billion yen

72.5 billion yen

5.6%

Average buildingage (Note 1)

Average remaining
lease term (Note 1)

Ratio of fixed rents

Portfolio operationalrate

17.0 years

12.7 years

100%

100%

(+0.7 billion yen)(+1 property)(△0.6 years)(+0.7 years)(+1 billion yen)

(±0%)

(±0%)

(±0%)

(Note 1) “Total appraisal value” is indicated based on the appraisal report with July 31, 2021, as the appraisal date. “Average building age” and “Average remaining lease term” are average values with July 31, 2021, as
the base date, calculated by dividing the remaining years to maturity by 365 and weighted by acquisition price. The figures are rounded down to the first decimal place. For properties having multiple buildings,
they indicate weighted-average figures based on area.
(Note 2) Figures in parentheses are comparison with the end of the 12th FP..

Diversification Status (Note)
Other areas

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

2.6%Core cities

19.3%

11.0%

Medical servicerelated facilities, etc.

Chubu area

3.1%

1.9%

By Type

By Area
Paid nursing homeServiced housing

Tokyo Metropolitan

73.0%

area
43.0%

Kinki area
41.6%

for the elderly

Three Major
Metropolitan areas
86.5%

4.7%
(Note) The figures in the graphs are calculated based on acquisition price, rounded off to the first decimal place.

13

Ⅱ Status of Asset Management

2. Stable Cash Flow in the Long Term (1)HCM has concluded long-term fixed-rent agreements in principle with carefully selected operators.
HCM secures stable cash flows by thorough business DD and continuous monitoring.
Good Judgement and Monitoring of Operators

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

Management
stability

Carefully Selected, Excellent Operators

HCM has 13 operators with strong track records and highcreditworthiness, including industry-leading SOMPO Care, Benesse
Style Care and GREEN LIFE that belongs to SHIP HEALTHCARE.
Kyowakai is a major medical corporation that operates 6 hospitals(2,026 beds) and 4 nursing care health facilities (495 beds), etc.
Top Operators (Based on Acquisition Price) (Note 1)
Operator

Total capacity (Note 2)

Share (%)

4,431 people(ranked 21st in Japan) (Note 3)

28.2

27,907 people(ranked 1st in Japan)

17.1

Kyowakai Medical Corporation

-

11.4

Benesse Style Care Co., Ltd.

19,477 people(ranked 2nd in Japan)

9.6

GREEN LIFE Co., Ltd.
GREEN LIFE HIGASHI NIHON Co., Ltd.
Sompo Care Inc.

Business due diligence(before / after acquisition)
 Quantitative and qualitative assessment and analysis
 Regular visits to facilities and on-site inspections(interviews with facility directors, etc.)(Note 1)
(Note 2)
(Note 3)The operators of SHIP Senri Building are separated based on an area basis, with Kyowakai Medical
Corporation for the Senri-Chuo Hospital portion and GREEN LIFE for the other portions.
(From) Weekly Senior Housing Newspaper, August 4・11, 2021 issue (No. 637)
Indicates the figure of Ship Healthcare Holdings Co., Ltd. as a whole.

Long-Term Fixed-Rent Lease Agreements
20 years or more
5.8%

Business
profile/activities

Operational
status offacilities

Financial status

Organizational
management

Compliance

Employment
environment(Abuse prevention
measures)(Securing staff ・Retention)

Ratio offixed rents
100%

Averageremaininglease term
12.7 years

Less than
10 years
37.2%(Note)

10 years or more but lessthan 20 years
57.0%(Note) The figure is based on July 31, 2021, as reference date and calculated by weighted averaging withacquisition prices, rounded down to the first decimal place.

14

Ⅱ Status of Asset Management

2. Stable Cash Flow in the Long Term (2)Portfolio operational rate of HCM has been almost 100% since the IPO, and average occupancy rate ofeach facility has been maintained at 90% or more at the moment.
Change in Portfolio Operational Rate and Average Occupancy Rate
（％）
100

100

100

100

100

100

100

99.9

100

91.6

91.5

100

100

92.6

92.4

100

95
91.1

90
87.7
86.7
85

84.4

85.2

84.9

portfolio operational rate

85.3

average occupancy rate8075
3rd FP

4th FP

5th

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

July

January

July

January

July

January

July

January

July

January

July

2016

2017

2017

2018

2018

2019

2019

2020

2020

2021

2021

(Note) Portfolio operational rate indicates the ratio of the rented area to the leasable area of the assets as of the end of each fiscal year, and is rounded off to the first decimal place. Average occupancy rate is the rate obtained by
dividing the total number of residents by the total capacity for the facilities and housing for the elderly shown in the Property Disclosure Statement of Important Matters provided by the operator and is rounded off to the firstdecimal place.

15

Ⅱ Status of Asset Management

3. Reorganization of Asset Management Company
Healthcare Business Promotion Department will be newly established, to strengthen and expand
investment in healthcare assets, as well as to enhance portfolio management, by leveraging theknowledge in the healthcare field.
Organization

Healthcare Business Promotion Department
As of October 1, 2021

Investment Department

General Meeting of
Shareholders

Expansion of volume

Audit & Supervisory
Board Member

volumeBoard of Directors

Management Committee

Asset Management
Department

Compliance Committee

Quality improvement

Representative Director

Internal Audit Office

Investment
Department





Asset
Management
Department

qualityCompliance Office(Newly established)
Healthcare
Business
Promotion
Department

Financial &Administration
Department

The operations that required expertise in the healthcare field, such as
business due diligence, which were previously carried out by the AssetManagement Department, will be transferred to the newly established
Healthcare Business Promotion Department.
The Asset Management Department concentrates on asset
management such as leasing and maintenance of owned properties,
and focuses on improving the quality of the portfolio.

Healthcare Business
Promotion Department
Knowledge in the healthcare
fieldknowledge＜Main operations of Healthcare Business Promotion Department＞
 Business evaluation of healthcare facilities (including hospitals)
 Business evaluation of operators who operate healthcare facilities Survey and analysis of market trends, etc. in the healthcare field Confirmation of compliance with healthcare-related laws andregulations


The head of Healthcare Business Promotion Department is an "expert
who fully understands the business characteristics of healthcare
facilities" defined by the Ministry of Land, Infrastructure, Transport andTourism in the guidelines (Note).
(Note) "Guideline of utilizing healthcare REIT for elderly housing" published by the Ministryof Land, Infrastructure, Transport and Tourism on June 27, 2014 and "Guideline of
REIT for hospital real estate" published on June 26, 2015.

16

Actions for Enhancement ofUnitholder Value

17

Ⅲ Actions for Enhancement of Unitholder Value

1. Road Map to External Growth
HCM aims to reach 100 billion yen in asset size over the medium term throughcontinuous property acquisition.
Change in Asset Size and Number of Properties
November 2017

February 2017

February 2019

・ Acquired J-REITʼs first
hospital real estate for 2
billion yen

・ Conducted the firstpublic offering
・ Acquired 6 properties(13.4 billion yen)・Conducted the second
public offering
・ Acquired 8 properties(22.7 billion yen) including
hospital real estate

March 2021

・Acquired Nichii Home
Nishikokubunji（0.7 billion yen）

(Number ofproperties)(billion yen)

50

<Target>Asset size
45

100.0

Number of properties

100
90(Note)

80
40
64.8

64.8

35
35

35

66.3

66.3

36

36

67
37

70

Pipeline

60
50

30
38.4

40.5

40.5

42.1
40
27

25
23.6

24

25

25

30

20

20

16

10

15
1st FP
Ended
July
2015

5th FP
Ended
July
2017

6th FP
Ended
January
2018

7th FP
Ended
July
2018

8th FP
Ended
January
2019(Note) The target may not be achieved due to future events, market environment and other factors.

9th FP
Ended
July
2019

10th FP
Ended
January
2020

11th FP
Ended
July
2020

12th FP
Ended
January2021

13th FP
Ended
July
2021

18

Ⅲ Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (1)HCM aims to expand and strengthen the pipeline through a “gathering system” that utilizes wide-ranging
networks with the sponsors as well as operators and developers, etc. and their various functions.
System to Gather Quality Deals and Information

Facilities andhousing for theelderly(already opened)

Operators

Facilities andhousing for theelderly(to be developed)

Expert know-how

Wide-ranging
networks
Sponsor andsupporting company(Note) networks

Supportagreement

Supportagreement

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

Various
warehousing
functions

Medical servicerelated facilities,
etc.

Utilization ofbridge SPCs

Nursing care andmedical service

Developers
Homebuilders

Wide-ranging
networks

Asset managementcompanyʼs own
networkFund management

Utilization of
warehousing ofsponsors and others

Finance

Expert know-how

Various warehousing
functions

Medicalcorporations

Capture quality deals on anegotiation basis at theappropriate timing(Note) "Supporting company" refers to a company that has entered into the pipeline support agreement, which provides the first refusal rights, etc. regarding property transfers to HCM, with the Asset Management Company.

19

Ⅲ Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (2)Establishment of a system to gather quality
deals and information
Facilities and housing
for the elderly(already opened)

Facilities and housing
for the elderly(to be developed)

Medical servicerelated facilities,
etc.

Pipeline totaling around 25 billion yen
Paid nursing home

SAWAYAKA Higashiosakakan(Higashiosaka-shi, Osaka; 94 rooms)
Paid nursing home

Madoka Minami-Urawa(Kawaguchi-shi, Saitama; 54 rooms)

Paid nursing home

Paid nursing home (to be developed)

Noah Garden Legend(Sapporo-shi, Hokkaido; 72 rooms)

Charm Hanakoganei(Kodaira-shi, Tokyo; 66 rooms)

Paid nursing home

Paid nursing home

Royal Kawaguchi(Kawaguchi-shi, Saitama; 56 rooms)

SOMPO CARE
La vie Re Kobe-Ikawadani(Kobe-shi, Hyogo; 80 rooms)(Note) In case a sponsor or an SPC formed by a sponsor, etc. decides to sell a healthcare facility they own, HCM has the first refusal rights to acquire the property. However, the acquisition isundecided 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.

20

Ⅲ Actions for Enhancement of Unitholder Value

3. Actions for Projects of Facilities and Housing for the Elderly
Properties in Operation

Development of Properties

Sale & Leaseback

Change of Ownership(Property owner = Operator)(Property owner = Party other than operator)

 Strengthening of financial
standing
 Meticulous maintenance andmanagement of properties
 Financing for M&As

 Exit of effective-use(investment) projects
 Changes in business policy Flexible development of new
facilities, not based on
effective use of land bylandlords.
 Larger building size

Case Example
Change of ownership case ofresidential type paid nursing home.
Acquired by a sponsor on thepremise of future sale to HCM,
seizing the rare opportunity ofasset replacement by a large realestate company. Good relationshipwith the operator also contributed.

Paid nursing home

Sunny Life Funabashi(Funabashi-shi, Chiba;
185 rooms)

 Securing buyers after
development andcompletion

New development utilizing healthcare REITs

Sales of real estate to healthcare REITs
which are long-term holders



Developers, etc.

Operators⇒ Leasing risks are limited as operators
are generally fixed beforehandCase Example
New development of paid
nursing home with care service.
Responded to a large
developerʼs needs to secure abuyer after the completion. The
sponsor took the lead inlaunching a new bridge SPC andacquired on the premise oftransfer to HCM. Opened in
September 2021.

Paid nursing home

Sunny Life Higashiyamato(Higashiyamato-shi, Tokyo;
67 rooms)

21

Ⅲ Actions for Enhancement of Unitholder Value

4. Actions for Hospital Projects
Investment & Management Policy
1

Opportunity of REIT Investment (Utilization)


Major investment target
 Real estate of stably managed hospitals(Hospitals expected to play a definite role in the Regional
Healthcare Vision) ⇔ Different from business rehabilitation
funds
 Medical malls and health checkup centers, etc. may also
be incorporated into portfolioSize of hospital real estate marketMarket size is approximately 23 trillion yen (Note), and hospital real estate accounts for over
50% of the entire healthcare facility real estate market (approximately 51%)



Mostly self-owned by medical corporations, etc.

Major hospital needs

Rebuilding, extension, securing of relocation site with the intention of strengthening medical
functions

Financing for floor expansion and M&A to expand their business

Strengthen financial status, Diversification of financing methods, Cash flow management

Concentration of management resources on the main business, Outsourcing of real estatebusinessImproving the brand of operating facilities

2
Investment & Management complying with the “Hospital
Real Estate Guidelines”
 Allocation of experts familiar with hospital business in the
Asset Management Company
 Conclusion of a long-term fixed-rent lease agreement, inprinciple(Note) Calculated by the Asset Management Company based on the estimate value by KPMG Healthcare Japan Co.,
Ltd. as of June 2016.

Case Example

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

SHIP Senri Building(Senri-Chuo Hospital)

Location

Toyonaka-shi, Osaka

Operators

Kyowakai Medical
Corporation

Number of beds 400
Promotion for market expansion
 Participation in seminars for medical/nursing care facilitiesrelated operators
 Lectures at industry group meetings (Congress of Japan
Hospital Association, etc.)

Name






Large-scale multi-use healthcare facility, combining a hospital and apaid nursing home
Developed and master leased in its entirety by a group company ofSHIP HEALTHCARE
Senri Chuo Hospital, a major tenant, opened when the property
was completed (2008) as a hospital mainly responsible forsubacute and chronic care
HCM acquired it by utilizing the warehousing functions of the22
sponsorⅢ Actions for Enhancement of Unitholder Value

5. Actions for ESG (1)HCM and the Asset Management Company aim to realize the investment philosophy and enhanceunitholder value over the medium to long term by practicing asset management that is considerate of ESG(Environment, Social and Governance).
Issues that need to be solved

Specific Actions

Highly relevant SDGs

・ Green lease (Kobe Gakuentoshi Building)

Environment

・ Energy conservation and reduction of CO2 emissions

・ Elimination of the shortage of supply of housing forthe elderly against the elderly population
・ Prevention of job separation due to nursing carethrough the promotion of supply of nursing carefacilities

Social・ Improvement of business efficiency and reduction ofwork burden for nursing care staff
・ Prevention of abuse of residents and harassment offacility staff
・ Response to the deterioration of hospitals andpromotion of earthquake resistance・ Work-life balance, health of staff, etc.

・ Renovation work for improving the efficiency of
air conditioning system using subsidies(GreenLife Moriguchi and Kobe Gakuentoshi Building)・ Procured funds through social finance (social loans andsocial bonds)
・ Issued Impact Reports that summarize endeavors
toward addressing social issues (every December)・ Supported the improvement of efficiency of nursing carebusiness of operators with the introduction of ICT system- Introduced EGAO link, a system for enhancing
efficiency of nursing care services (ASHEIM
Hikarigaoka and ASHEIM Bunkyohakusan)・ Employment support for people with disabilities(GreenLife Moriguchi)
・ Established a remote work system (Asset Management
Company)・ Implemented countermeasures against the spread of
COVID-19・ Transparency in decision making

Governance・ Separation of Executive Director of HCM and CEO of theAsset Management Company (resolved at the general
meeting of unitholders in October 2020)

・ Fair transaction (Appropriate management of conflictsof interest)
・ Established warehousing rules for transactions withinterested parties
・ Management of various risks (including elimination ofantisocial forces)

・ Established a “Customer-Oriented Committee” at theAsset Management Company

23

Ⅲ Actions for Enhancement of Unitholder Value

5. Actions for ESG 〜 Environment 〜Green Lease

Energy Saving Renovation WorkHCM introduced the green lease agreement with thetenant that rent a whole building of “Kobe Gakuentoshi
Building (Hapine Kobe Gakuentoshi)”

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

Replace the control board and compressor of the outdoor unit of thecommon 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)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

Control board

Light Bulb
Replacement Cost
23％

Cost reduction for
the tenant due tothe Green Lease
50％

Electricity Cost
77％
69％ Reductionof Electricity Cost

New
compressor

Green Lease Fee(Add to the rent)
26％

Electricity Cost
24％
Before the
Implementation

After theImplementation

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 the working environment, andboth sides can benefit from cost reductions, etc.

24

Ⅲ Actions for Enhancement of Unitholder Value

5. Actions for ESG 〜 Social 〜
Improving the Efficiency of Nursing Care Operations Using
ICT (EGAO link)

Social Finance（Note）


Established a social finance framework to provide
investment opportunities for investors who have strong
interest in ESG investment, through social finance.



JCR Social Finance Framework Evaluation The highest evaluation
Social １(F)SocialbondSocialloan

Date of issue︓January 2020
Amount of issue ︓2 billion yen＜Effect of Introducing EGAO Link at ASHEIM Bunkyohakusan＞
Reduction of care staff

Period︓10 years
Interest rate︓0.78%
Rating︓A（JCR）

Social loan balance: 21.15 billion yen(about 68% of the loan balance)※ New loans after February 2019 are all social loans.

Sept. 30, 2020

Staff per month

26.9 people

23.4 people▲3.5 people

Total working hours

4,734 hours

4,118 hours▲616 hours

Life rehabilitation
Individual activities

Disclosure of ESG
Issuance of Impact Report summarizing actions to solve
issues which the medical and nursing care industries arefacing (every December, on HP)

July 31, 2019

Difference

Improving quality of nursing care services（Note）Social finance is the finance for the purpose of generating social and publicbenefits such as solving social problems and revitalizing the region.

Introduced a system (EGAO link) that can respond to nurse
calls, create nursing care records and grasp the situation in
the resident's bed in real time on a smartphone at "ASHEIM
Bunkyohakusan" and others.

July 31, 2019

Sept. 30, 2020

Difference

608 sessions

1,822 sessions＋1,214 sessions

20 hours

54 hours+34 hours

Employment support for people with disabilities


Utilizing the vacant lot in "GreenLife Moriguchi", the operator
implemented a employment support project for people withdisabilities through hydroponics of vegetables

25

Ⅲ Actions for Enhancement of Unitholder Value

5. Actions for ESG 〜 Governance 〜
Decision-Making Flow Concerning Acquisition of Assets Under
Management

Basic Policy of Management
Implementation of customer-oriented business operation

Strengthening autonomous compliance framework

Proposal of acquisition plan by the Investment Department(Property due diligence by the Investment Department)
When the candidate
asset undermanagement to beacquired is ahealthcare facility or
hospital real estate

Appropriate Management of Conflicts of Interest


Related party is defined in broader terms than interested
party, etc. under the Investment Trust Law, and establisheda system to carry out transactions after conducting rigorous
examinations.
interested party, etc.
under theInvestment Trust Law

Preparation of evaluation reports andsubmission to the Investment
Department by the Healthcare
Business Promotion Department orby external experts (if necessary)

When thetransaction falls
under the categoryof related-party
transactions, or if
the Compliance
Officer judges that itis necessary toconsider the legal
compliance issues
concerning the
proposed income
plan.

related party

Acquisition fee for property acquisition from related party
Acquisition price×0.5%（usually 1.0%）is upper limit

From November 1, 2020, the system in which CEO of asset
management company concurrently serves as executive
director of HCM was dissolved.
Investment corporation

asset

managementcompany

Appropriate
check and balance
Executive Director

Yuji Fujise

Instructions
forcancellationor change ofcontent

Approval by Compliance Officer
Confirmation of existence or non-existence of issues on legal
compliance and other compliance (hereinafter, "legal
compliance issues")

Separation of Executive Director of HCM and CEO of the AssetManagement Company

When thecandidate asset
undermanagement
to be acquired
is a property
other thanhealthcare
facility or
hospital realestateDeliberation and resolution of theexistence or non-existence of legal
compliance issues by the Compliance
Committee

Instruction
s forcancellationor changeof content

The Investment Department presents the proposed
acquisition plan to the Management Committee

Deliberation and resolution at the Management Committee(The Compliance Officer may order the suspension of deliberation
and resolution by the Management Committee when it is judged that
there are issues such as legal violation in the procedures ofproceedings and the content of deliberation.)

Reporting to the Board of Directors and HCM

CEO

Seiji Yoshioka(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 theInvestment Trust Act, prior approval of the HCM's Board of
Directors shall be obtained.)

26

Appendix27

Ⅳ Appendix

Portfolio Map

Ratio of investment inthree major
metropolitan areas

Strategic
investment inthree major
metropolitan
areas

41.6%

Chubu area

Other areas

1.9%

2 19 1

16

11.0%

1
1 18

Tokyo metropolitan area

1

43.0%

22

2.6%

29
3

13

20

24

15

31
14

2
10

11

8

33

9

12
5

21

7

30

6

Bonsejour Chitose-funabashi

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

6Core cities

17

AQUAMARINE Nishinomiyahama

5

86.5%

Kinki area

12

4
27 26 25
23

28
32
Serviced housing for theelderly
Medical service-related
facilities, etc.
Complex of paid nursing
homes, medical servicerelated facilities, etc.

1

SOMPO CARE Sompo no ie
Awajiekimae

2

SOMPO CARE Sompo no ie
Kobekamisawa

1

Niigata Rehabilitation Hospital

1

SHIP SENRI BUILDING

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 (Hapine Kobe
Gakuentoshi)

18

GreenLife Moriguchi Home for The Aged

19

Hapine Kobe Uozaki Nibankan

20Granda Tsuruma-Yamato

21

Smiling Home Medice Adachi

22

Aikoen Ichibankan Building (Aikoen
Ichibankan)

23

Hanakotoba Minami

24

Hanakotoba Miura

25

SOMPO CARE La vie Re Hama-Kawasaki

26

Hanakotoba Shin-Yokohama

27

Hanakotoba Shin-Yokohama II

28

Hanakotoba Odawara

29

Verde Minowa

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

32

Sunny Life Kamakura

33 Nichii Home Nishikokubunji

28

Ⅳ Appendix

Details of Portfolio (1)Paid nursing home
1

2

3

4

5

AQUAMARINE
Nishinomiyahama

Bonsejour Chitose-funabashi

Bonsejour Hino

Bonsejour Musashi-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 Stationon the Hanshin Main Line

Chitose-Funabashi Stationon the Odakyu Odawara Line

Mogusaen Stationon the Keio LineMusashi-Shinjo Stationon the 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)

117 million yen

49 million yen

43 million yen

36 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.0%

5.9%

6.0%

6.2%

6.4%

Appraisal value (Note 1)

2,060 million yen

974 million yen

818 million yen

643 million yen

850 million yen

Acquisition price (ratio)

1,950 million yen (2.9%)824 million yen (1.2%)

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 floors (Note 2)

RC, 5F

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

Number ofrooms/resident capacity

90 rooms, 100 people

42 rooms, 47 people

56 rooms, 58 people

46 rooms, 49 people

100 rooms, 101 people

occupancy rate (Note 3)

100.0%

91.5%

86.2%

89.8%

96.0%

Operator

GREEN LIFE

Benesse Style Care

Benesse Style Care

Benesse Style Care

Benesse Style Care

Remaining years of leaseagreement (Note 4)

15.8 years

4.8 years

4.8 years

5.3 years

5.8 years

29

Ⅳ Appendix

Details of Portfolio (2)Paid nursing home

)

6

7

8

Medical Rehabilitation Home
Bonsejour Komaki

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

Location

3-1 Shiroyama,
Komaki-shi, Aichi

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

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

Nearest station

Ajioka Stationon the Meitetsu Komaki Line

Shakujii-Koen Stationon the Seibu Ikebukuro Line

Hakusan Stationon the Toei Subway Mita Line

Construction completion

March 1991

March 2006

Acquisition period

Fiscal period ended July 2015

Appraisal NOI (Note 1)

9

10

SOMPO CARE La vie Re
Machidaonoji

SOMPO CARE La vie Re
Azamino1612 Onojimachi,
Machida-shi, Tokyo
OdakyuKeio Nagayama
Nagayama
StationStationon the Keioon the Odakyu
Sagamihara
Line
Tama Line

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

February 2007

October 2007

March 2004

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

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

1,490 million yen

1,650 million yen

3,780 million yen

3,230 million yen

Acquisition price (ratio)

1,270 million yen (1.9%)

1,385 million yen (2.1%)

1,430 million yen (2.1%)

3,580 million yen (5.3%)

3,050 million yen (4.5%)

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 floors (Note 2)

SRC RC S, 10F

RC, 3FRC, 8F

RC, B1 6F

RC, B1 5F

Number ofrooms/resident capacity

124 rooms, 165 people

83 rooms, 89 people

50 rooms, 52 people

163 rooms, 169 people

145 rooms, 145 people

occupancy rate (Note 3)

79.4%

92.1%

82.7%

66.9%

84.1%

Operator

Benesse Style Care

AS PARTNERS

AS PARTNERS

Sompo Care

Sompo Care

Remaining years of leaseagreement (Note 4)

5.8 years

12.6 years

5.6 years

6.2 years

5.9 years

Nakagawa Stationon the Yokohama Municipal
Subway Blue Line30

Ⅳ Appendix

Details of Portfolio (3)Paid nursing home
11

12

13

SAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME Fudo-mae

Bonsejour Yotsugi

173-15 Oaza Ryugeji,Hakata-ku, Fukuoka-shi, Fukuoka
Sasahara Stationon the JR Kagoshima HonsenLine

1-9-15 Okubo, Moji-ku,
Kitakyushu-shi, Fukuoka
Mojiko Stationon the JR Kagoshima HonsenLine393-1 Oaza Ita,
Tagawa-shi, Fukuoka
Magarikane Stationon the Heisei Chikuho Railway
Tagawa Line

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

3-1-11 Higashiyotsugi,
Katsushika-ku, Tokyo
Yotsugi Stationon the Keisei Railway OshiageLineConstruction completion

October 2005

November 2005

January 2006

March 1992

March 1989

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2016

Appraisal NOI (Note 1)

93 million yen

85 million yen

25 million yen

91 million yen

48 million yen

Appraisal NOI yield (Note 1)

6.1%

6.2%

6.4%

5.2%

5.8%

Appraisal value (Note 1)

1,520 million yen

1,400 million yen

377 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 (2.6%)

824 million yen (1.2%)

Site area

3,359.66 m²

3,758.26 m²

4,300.90 m²

1,206.60 m²

1,136.46 m²

Leasable area

5,652.94 m²

4,720.46 m²

2,366.20 m²

3,400.20 m²

1,962.89 m²

Structure/
number of floors (Note 2)

RC, B1 6FRC, 4FRC, 3F

RC, B1 5F

RC, 5F

Number ofrooms/resident capacity

104 rooms, 104 people

95 rooms, 95 people

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

occupancy rate (Note 3)

100.0%

96.8%

100.0%

86.6%

86.2%

Operator

Sawayaka Club

Sawayaka Club

Sawayaka ClubJAPAN LIFEDESIGN

Benesse Style Care

Remaining years of leaseagreement (Note 4)

6.5 years

6.5 years

6.5 years

5.3 years

4.4 years

Location
Nearest station

14

Fudo-mae Stationon the Tokyu Meguro Line

15

31

Ⅳ Appendix

Details of Portfolio (4)Paid nursing home
18

19

20

16

17

Medical Home Bonsejour Itami

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

GreenLife Moriguchi Home for
Hapine Kobe Uozaki Nibankan
The Aged

Location

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

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

Nearest station

Hankyu Itami Stationon the Hankyu Railway Itami
Line

Gakuentoshi Stationon the Kobe Municipal Subway
Seishin-Yamate Line

6-17-34 Satanakamachi,
8-10-7 Uozakiminamimachi,
Moriguchi-shi, Osaka
Higashinada-ku, Kobe-shi, Hyogo
Dainichi Stationon the Osaka Municipal Subway
Uozaki Station
Tanimachi Line and Osakaon the Hanshin Electric Railway
Monorail

Construction completion

March 1989

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

227 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

4,450 million yen

4,400 million yen

974 million yen

1,060 million yen

Acquisition price (ratio)

514 million yen (0.8%)

4,320 million yen (6.4%)

4,150 million yen (6.2%)

930 million yen (1.4%)

1,000 million yen (1.5%)

Site area

1,976.11 m²

2,742.81 m²

5,872.83 m²

932.94 m²

2,877.11 m²

Leasable area

2,129.87 m²

12,636.48 m²

8,356.85 m²

1,772.89 m²

3,427.08 m²

Structure/
number of floors (Note 2)

SRC, 11F (Exclusive portion)

RC, B1 9F

S RC, 9F

S, B1 4F

RC S, 5F

Number ofrooms/resident capacity

62 rooms, 64 people

131 rooms, 138 people

155 rooms, 189 people

47 rooms, 47 people

73 rooms, 90 people

occupancy rate (Note 3)

85.9%

96.4%

100.0%

100.0%

76.7%

Operator

Benesse Style Care

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse Style Care

Remaining years of leaseagreement (Note 4)

5.8 years

19.6 years

18.2 years

19.6 years

0.6 years

Granda Tsuruma-Yamato

2-3-41 Shimotsuruma,
Yamato-shi, Kanagawa
Tsuruma Stationon the Odakyu Enoshima Line32

Ⅳ Appendix

Details of Portfolio (5)Paid nursing home
21

22

23

24

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

3-5 Suwacho,
Miura-shi, Kanagawa

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

Nearest station

Rokucho Stationon the Tsukuba Express

Niigata Stationon the JR Shinetsu Main Line

Misakiguchi Stationon the Keikyu Kurihama Line

Odasakae Stationon the JR Nambu Line

Construction completion

November 2005

February 2010

June 2007

March 2007

Acquisition period

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

120 million yen

45 million yen

56 million yen

35 million yen

89 million yen

Appraisal NOI yield (Note 1)

5.3%

5.8%

5.2%

5.6%

5.2%

Appraisal value (Note 1)

2,500 million yen

860 million yen

1,180 million yen

668 million yen

1,810 million yen

Acquisition price (ratio)

2,253 million yen (3.4%)

770 million yen (1.1%)

1,071 million yen (1.6%)

615 million yen (0.9%)

1,710 million yen (2.6%)

Site area

2,069.41 m²

2,597.52 m²

428.76 m²

1,017.55 m²

2,832.33 m²

Leasable area

3,870.98 m²

4,311.20 m²

1,710.68 m²

1,959.64 m²

4,060.21 m²

Structure/
number of floors (Note 2)

RC, 4F

S, 5F

RC, 7FRC, 4FRC, 4F (exclusively-owned
portion)Number ofrooms/resident capacity

82 rooms, 82 people

90 rooms, 90 people

51 rooms, 51 people

53 rooms, 54 people

58 rooms, 58 people

occupancy rate (Note 3)

91.5%

93.3%

94.1%

96.3%

87.9%

Operator

GREEN LIFE HIGASHI NIHON
Co., Ltd.

Medical Corporation AIKOKAI

Proud Life Inc.

Proud Life Inc.

Sompo Care

Remaining years of leaseagreement (Note 4)

15.5 years

15.0 years

11.3 years

11.3 years

6.4 years

2-4-38 Shinkawacho,
Minami-ku, Yokohama-shi,
Kanagawa
Yoshinocho Stationon the Yokohama Municipal
Subway Blue Line
February 2010

Fiscal period ended January 2019 Fiscal period ended January 201925

Fiscal period ended July 201933

Ⅳ Appendix

Details of Portfolio (6)Paid nursing home
26

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 Stationon the Yokohama Municipal
Subway Blue Line and the JR
Yokohama Line

1-11-11 Shinyokohama, Kohokuku,
Yokohama-shi, Kanagawa
Shin-Yokohama Stationon the Yokohama Municipal
Subway Blue Line and the JR
Yokohama Line

Construction completion

March 2004

Acquisition period

Location

3-9-12 Sakawa,
Odawara-shi, Kanagawa

839-4 Azamachiyabo, Kamishiba,
1221 Azamaebara,
Misatomachi, Takasaki-shi,
Oazanamashina, Kawaba-mura,
Gunma
Tone-gun, Gunma
Numata Stationon the JR Joetsu Line

Kamonomiya Stationon the JR Tokaido Line

Takasaki Stationon the JR Takasaki Line

April 2007

September 2009

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

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

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

21 million yen

49 million yen

109 million yen

91 million yen

Appraisal NOI yield (Note 1)

5.2%

5.8%

5.6%

6.7%

6.9%

Appraisal value (Note 1)

2,230 million yen

376 million yen

946 million yen

1,700 million yen

1,430 million yen

Acquisition price (ratio)

2,071 million yen (3.1%)

375 million yen (0.6%)880 million yen (1.3%)

1,620 million yen (2.4%)

1,328 million yen (2.0%)

Site area

894.00 m²

375.00 m²

1,202.12 m²

７,920.29 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 floors (Note 2)

RC, 9F

RC, B1 7FRC, 4F

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

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

Number ofrooms/resident capacity

136 rooms, 136 people

29 rooms, 30 people

60 rooms, 65 people

174 rooms, 206 people

121 rooms, 174 people

occupancy rate (Note 3)

84.6%

93.3%

93.8%

93.7%

97.7%

Operator

Proud Life Inc.

Proud Life Inc.

Proud Life Inc.

Verde Corporation

Verde Corporation

Remaining years of leaseagreement (Note 4)

11.3 years

11.3 years

11.3 years

5.8 years

5.8 years

Nearest station

34

Ⅳ Appendix

Details of Portfolio (7)Paid nursing home3132Serviced housing for the elderly

33

1

２

SOMPO CARE Sompo no ie
Awajiekimae

SOMPO CARE Sompo no ie
Kobekamisawa

Sunny Life Kita-Shinagawa

Sunny Life Kamakura

Nichii Home Nishikokubunji

Location

3-8-6 Kitashinagawa, Shinagawaku, Tokyo

214-4 Aza Kichime,
Kamimachiya,
Kamakura-shi, Kanagawa

2-11-22
Nishikoigakubo,
Kokubunji-shi, Tokyo

Nearest station

Shimbamba Stationon the Keikyu Line

Shonan-Machiya Stationon the Shonan Monorail

Nishikokubunji Stationon the JR Chuo Line

Construction completion

September 2018

September 2014

September 1990

June 2009

June 2009

Acquisition period

Fiscal period ended July 2019

Fiscal period ended July 2020

Fiscal period ended July 2021

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

90 million yen

76 million yen

36 million yen

116 million yen

72 million yen

Appraisal NOI yield (Note 1)

4.9%

5.3%

5.0％

6.0%

6.0%

Appraisal value (Note 1)

2,000 million yen

1,580 million yen

762 million yen

2,170 million yen

1,340 million yen

Acquisition price (ratio)

1,825 million yen (2.7%)

1,418 million yen (2.1%)

720 million yen（1.1％）

1,930 million yen (2.9%)

1,200 million yen (1.8%)

Site area

1,105.12 m²

2,055.67 m2

1,948.41 ㎡

1,251.26 m²

743.22 m²

Leasable area

2,135.54 m²

3,817.91 m2

1,559.99 ㎡

5,745.15 m²

4,058.35 m²

Structure/
number of floors (Note 2)

S, 3F

S, 5F

S, 3F

RC, 12F

S, 9F

Number ofrooms/resident capacity

66 rooms, 66 people

128 rooms, 128 people

46 rooms, 46 people

137rooms, 137 people

85 rooms, 85 people

occupancy rate (Note 3)

98.5%

97.7%

97.8％

86.9%

83.5%

Operator

Kawashima Corporation

Kawashima Corporation

Nichii Carepalace

Sompo Care

Sompo Care

Remaining years of leaseagreement (Note 4)

22.2 years

18.2 years

1.6 years

13.0 years

13.0 years

3-20-26 Awaji,
8-2-5 Kamisawadori, Hyogo-ku,
Higashiyodogawa-ku,
Kobe-shi, Hyogo
Osaka-shi, Osaka
Awaji Station
Kamisawa Stationon the Hankyu Railway Kyoto and on the Kobe Municipal Subway
Senri Lines
Seishin-Yamate Line35

Ⅳ Appendix

Details of Portfolio (8)Medical service-related facilities, etc.

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

1

1

Niigata Rehabilitation Hospital

SHIP SENRI BUILDING

Location

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

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

Nearest station

Hayadori Stationon the JR Hakushin Line

Senri-Chuo Stationon the Kita-Osaka Kyuko Namboku Line and the Osaka Monorail

Construction completion

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

September 2008

Acquisition period

Fiscal period ended January 2018

Fiscal period ended July 2019

Appraisal NOI (Note 1)

153 million yen

679 million yen

Appraisal NOI yield (Note 1)

7.4%

5.2%

Appraisal value (Note 1)

2,260 million yen

14,200 million yen

Acquisition price (ratio)

2,060 million yen (3.1%)

12,920 million yen (19.3%)

Site area

15,056.85 m²

4,202.65 m²

Leasable area

13,476.55 m²

24,813.85 m²

Structure/
number of floors (Note 2)

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

RC, B1 11F

Number ofrooms/resident capacity

168 beds

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

occupancy rate (Note 3)-

Paid nursing home: 100 %Operator

Medical Corporation AIKOKAI

Kyowakai Medical Corporation
GREEN LIFE

Remaining years of leaseagreement (Note 4)

25.6 years

17.2 years(Note 1) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2021. 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) The bed occupancy rate indicates the ratio obtained by dividing the number of residents by the capacity, rounded off to the first decimal place. The number of residents used in the calculation is described in the latest
Property Disclosure Statement of Important Matters, which the Asset Management Company obtained as of the date of preparing this document, for the facilities and housing for the elderly owned by HCM.
(Note 4) Remaining years of lease agreement is as of July 31, 2021, rounded down to the first decimal place.

36

Ⅳ Appendix

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

Operator nameGREEN LIFE Co., Ltd.
GREEN LIFE HIGASHINIHONCo., Ltd.

Sompo Care Inc.

Kyowakai Medical
Corporation

Benesse Style Care
Co., Ltd.

Proud Life Inc.

Sawayaka Club Co.,
Ltd.

Attribute

Facilities andhousing forthe elderly

Hospital

28

－

38

452

4

(Note 4)

339

29

90

Remarks

Facilities owned by HCM

Share
(%)

(Note 2)A consolidated
subsidiary of SHIPHEALTHCAREHOLDINGS, INC.,
which is listed on
the TSE First
SectionA nursing care business that plays a central
role in the Lifecare Business of SHIPHEALTHCARE HOLDINGS, INC. Operates
nursing care facilities nationwide.

AQUAMARINE Nishinomiyahama
Kobe Gakuentoshi Building (Hapine Kobe Gakuentoshi)
GreenLife Moriguchi Home for The Aged
Hapine Kobe Uozaki Nibankan
Smiling Home Medice Adachi
SHIP SENRI BUILDING

A consolidated
subsidiary of
Sompo Holdings,
Inc., which is listedon the TSE First
SectionMainly operates paid nursing homes with careservice under the Sompo Care La vie Re
brand and mid-to low-end homes under the
SOMPO CARE Sompo no ie brand and the
SOMPO CARE Sompo no ie S brand, centeringon three major metropolitan areas.

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

17.1

6

-

A major medical corporation operating a wide
range of businesses including six hospitals(2,026 beds), four long-term care healthfacilities (495 beds), and home care support.
Provides safe and convenient medical/nursing
care services ranging from acute-stage
medical care to rehabilitation, home medicalcare, and nursing care.

SHIP SENRI BUILDING (Senri-Chuo Hospital)

11.4

－

A consolidated
subsidiary ofBenesse Holdings,
Inc., which is listedon the TSE First
SectionOperates 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

9.6－

A consolidated
subsidiary of Sony
Group Corporation,
which is listed on
the TSE First
SectionA former Yuuai Holdings Group company.
Operates paid nursing homes, etc. under the“Hanakotoba” brand, centering on Kanagawa
Prefecture. Affiliated with Sony Financial
Holdings Inc. since 2017.

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

7.5－

A consolidated
subsidiary of
UCHIYAMAHOLDINGS Co.,
Ltd., which is listedon the TSE First
SectionOperates facilities under the SAWAYAKA
brand (low price range without advance fees)around Japan, centering on Fukuoka
Prefecture.

SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

4.9

－

－

28.2

(Note 3)37

Ⅳ Appendix

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

Operator nameFacilities andhousing forthe elderly

Attribute

Remarks

Facilities owned by HCM

Hospital

Share
(%)

(Note 2)

Kawashima
Corporation

136－

Unlisted company

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

Verde Corporation

6－

Unlisted company

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

Verde Minowa
Verde Hotaka

4.4Operating 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 (Aikoen Ichibankan)
Niigata Rehabilitation Hospital

4.2

Sunny Life Kita-Shinagawa
Sunny Life Kamakura

4.8

Medical Corporation
AIKOKAI

122

A medical
corporation which
belongs to NSG
Group with sales ofover 110 billion
yen (Note 5)

AS PARTNERS Co.,
Ltd.

22

－

Unlisted company

Operates paid nursing homes and day service
facilities under the ASHEIM brand in theTokyo Metropolitan Area.

ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan

4.2－

Unlisted company(Capitalpartnership 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 SOUSEIJIGYOUDAN Co., Ltd., the parent company,
and other subsidiaries.

GOOD TIME HOME Fudo-mae

2.6－

A consolidated
subsidiary of
NICHIIGAKKAN
CO., LTD., whichis unlistedcompany

Nichii Carepalace Company operates "Nichii
Home", a paid nursing home, and "Iris
Garden", serviced housing for the elderly,
mainly in the Tokyo metropolitan area. It is acore company that promotes in-homenursing care for the Nichii Group, which
operates nationwide, focusing on nursing
care, medical care, and education.

JAPAN LIFEDESIGN
Inc.

Nichii Carepalace
Company3

81

Nichii Home Nishikokubunji

1.1(Note 1) “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of March 31, 2021).
(Note 2) Shares based on acquisition price are indicated. Furthermore, the operators of SHIP Senri Building are separated based on an area basis, with Kyowakai Medical Corporation for the Senri-Chuo Hospital portion and GREEN LIFE Co., Ltd.
for the other portions.
(Note 3) The share of GREEN LIFE HIGASHI NIHON Co., Ltd. is 3.4%.
(Note 4) Only the number of long-term care health facilities is indicated.
(Note 5) Indicates the actual figures in fiscal 2019 based on NSG Groupʼs website.

38

Ⅳ Appendix

Summary of Appraisal Report (1)Summary of Appraisal Report (Note 1)

Property nameAppraisal company

Appraisal value(million yen)(A)

Direct capitalization
methodDCF method

Indicatedvalue(million yen)

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)End of January
2021
Appraisal value(million yen)(B)

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

AQUAMARINE Nishinomiyahama

Rich Appraisal
Institute Co., Ltd.

2,060

2,070

5.3

2,050

5.0

5.5

117

2,060

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

1,490

1,490

4.8

1,480

4.6

5.0

76

1,490

0

ASHEIM Bunkyohakusan

Japan Real Estate
Institute

1,650

1,660

4.4

1,630

4.2

4.6

74

1,650

0

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate
Institute

3,780

3,820

4.9

3,730

4.7

5.1

193

3,780

0

SOMPO CARE La vie Re Azamino

Japan Real Estate
Institute

3,230

3,270

4.6

3,190

4.4

4.8

156

3,230

0

SAWAYAKA Tachibanakan

Japan Real Estate
Institute

1,520

1,530

5.6

1,500

5.4

5.8

93

1,530

△10

SAWAYAKA Mekarikan

Japan Real Estate
Institute

1,400

1,410

5.7

1,390

5.5

5.9

85

1,400

0

SAWAYAKA Tagawakan

Japan Real Estate
Institute

377

380

5.8

374

5.6

6.0

25

379

△2

GOOD TIME HOME Fudo-mae

Japan Real Estate
Institute

1,950

1,970

4.4

1,920

4.2

4.6

91

1,950

0

Bonsejour Yotsugi

The Tanizawa Sogo
Appraisal Co., Ltd.

886

902

4.7

879

4.8

4.9

48

886

0

Medical Home Bonsejour Itami

The Tanizawa Sogo
Appraisal Co., Ltd.

557

566

5.1

553

5.2

5.3

36

557

0

Kobe Gakuentoshi Building (Hapine Kobe Gakuentoshi)

Daiwa Real EstateAppraisal Co., Ltd.

4,450

4,510

4.7

4,430

4.5

4.9

227

4,410

+40

GreenLife Moriguchi Home for The Aged

Daiwa Real EstateAppraisal Co., Ltd.

4,400

4,460

4.6

4,370

4.4

4.8

220

4,400

0

Hapine Kobe Uozaki Nibankan

Daiwa Real EstateAppraisal Co., Ltd.

974

987

4.7

968

4.5

4.9

48

974

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

39

Ⅳ Appendix

Summary of Appraisal Report (2)Summary of Appraisal Report (Note 1)

Property nameAppraisal company

Appraisal value(million yen)(A)

Direct capitalization
methodDCF method

Indicatedvalue(million yen)

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)End of January
2021
Appraisal value(million yen)(B)

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

Smiling Home Medice Adachi

The Tanizawa Sogo
Appraisal Co., Ltd.

2,500

2,540

4.6

2,480

4.7

4.8

120

2,460

+40

AIKOEN ICHIBANKAN Building

The Tanizawa Sogo
Appraisal Co., Ltd.

860

864

5.2

858

5.3

5.4

45

861

△1

Hanakotoba Minami

Japan Real Estate
Institute

1,180

1,200

4.6

1,160

4.4

4.8

56

1,180

0

Hanakotoba Miura

The Tanizawa Sogo
Appraisal Co., Ltd.

668

676

4.8

664

4.9

5.0

35

663

+5

SOMPO CARE La vie Re Hama-Kawasaki

JLL Morii Valuation &Advisory K.K.

1,810

1,840

4.6

1,780

4.4

4.8

89

1,820

△10

Hanakotoba Shin-Yokohama

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

376

378

5.1

373

4.9

5.3

21

377

△1

Hanakotoba Odawara

The Tanizawa Sogo
Appraisal Co., Ltd.

946

961

4.9

940

4.8〜5.0

5.1

49

946

0

Verde Minowa

Daiwa Real EstateAppraisal Co., Ltd.

1,700

1,710

5.0

1,690

4.8

5.2

109

1,690

+10

Verde Hotaka

Daiwa Real EstateAppraisal Co., Ltd.

1,430

1,440

5.4

1,420

5.2

5.6

91

1,430

０

Sunny Life Kita-Shinagawa

Daiwa Real EstateAppraisal Co., Ltd.

2,000

2,030

4.4

1,980

4.2

4.6

90

1,950

+50

Sunny Life Kamakura

The Tanizawa Sogo
Appraisal Co., Ltd.

1,580

1,600

4.5

1,570

4.6

4.7

76

1,550

+30

Nichii Home Nishikokubunji

Daiwa Real EstateAppraisal Co., Ltd.

762

772

4.3

757

4.1

4.5

36

―

+762

SOMPO CARE Sompo no ie 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 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

153

2,260

0

SHIP SENRI BUILDINGThe Tanizawa Sogo
Appraisal Co., Ltd.

14,20014,4004.5

14,100

4.5〜4.6

4.7

679

14,100+100

72,53173,378―71,896

―

―

3,771

71,518+1,013

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

“Appraisal value” is based on the appraisal report with July 31, 2021, as the appraisal date.
“Discount rate” represents a yield used to discount net cash flow during an analysis period and terminal value at the end of an analysis period back to present value. The indicated figures are those used by the respective
appraisal organizations. For Hanakotoba Odawara, the rate is 4.8% for 1~2 years and 5.0% for 3 years onward; and for SHIP Senri Building, the rate is 4.5% for 1~2 years and 4.6% for 3 years onward.
“Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with July 31, 2021 as the appraisal date, rounded down to the nearest million yen. In addition, NOI
is revenue before deducting depreciation and differs from NCF (net cash flow), which is the amount calculated by adding the gain on investment from security deposits, etc. to NOI and deducting capital expenditures. The
same shall apply hereinafter in this document.

40

Ⅳ Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 13th Fiscal Period)(Unit: thousand yen)

Property nameReal estate lease businessrevenue

Real estate lease business expenses

Rent
revenue

RepairexpensesOtherrevenue

Property tax

Outsourcing

Insurance
expenses

Depreciation
andamortization

NOI (Note 2)
Other

AQUAMARINE Nishinomiyahama

25,746

4,271

2,100

2,476

232

16,265400

57,862

Bonsejour Chitose-funabashi

5,583

1,794

225

―

112

3,048

402

21,405

Bonsejour Hino

5,070

1,240

214

―

85

3,130

400

19,493

Bonsejour Musashi-shinjo

4,103

1,012

167

―

75

2,447

400

16,172

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa

8,402

1,816

213

―

154

5,817

400

21,122

Medical Rehabilitation Home Bonsejour Komaki

14,138

4,555

201

―

355

8,627

400

39,618ASHEIM Hikarigaoka

17,767

3,824

381

2,100

196

10,864400

38,847ASHEIM Bunkyohakusan

12,141

2,575

381

―

129

8,653

400

38,700

SOMPO CARE La vie Re Machidaonoji

45,989

5,950

780

202

392

38,264400

97,27534,124

4,703

780

1,326

285

26,629400

77,70526,512

2,665

1,140

―

371

21,936400

47,277SAWAYAKA Mekarikan

26,049

2,963

1,140

―

273

21,272400

43,456SAWAYAKA Tagawakan

9,033

1,109

1,140

630

119

5,634

400

12,285GOOD TIME HOME Fudo-mae

15,216

3,051

600

404

182

10,579400

46,362

Bonsejour Yotsugi

4,925

940

223

―

73

3,286

400

20,766

Medical Home Bonsejour Itami

6,520

1,377

371

―

111

4,260

400

13,977

Kobe Gakuentoshi Building (Hapine Kobe
Gakuentoshi)

53,353

9,564

900

1,846

579

40,063400

112,210

GreenLife Moriguchi Home for The Aged

36,156

6,920

1,363

2,671

379

24,421

400

108,264

Hapine Kobe Uozaki Nibankan

9,645

1,395

1,200

89

90

6,470

400

24,325Granda Tsuruma-Yamato

7,412

1,934

618

150

152

4,158

400

26,994

SOMPO CARE La vie Re Azamino
SAWAYAKA Tachibanakan

Not disclosed (Note 1)41

Ⅳ Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 13th Fiscal Period)(Unit: thousand yen)

Real estate lease businessrevenue
Property nameRent
revenue

Real estate lease business expenses

Otherrevenue

Propertytax

Outsourcing

RepairexpensesInsurance
expenses

Depreciation
andamortization

NOI (Note 2)
Other

Smiling Home Medice Adachi

16,202

3,279

540

793

177

11,013400

60,018

AIKOEN ICHIBANKAN Building

8,542

2,554

780

65

112

4,630

400

22,749Hanakotoba Minami

10,189

1,539

600

2,456

79

5,114

400

25,524

Hanakotoba Miura

8,885

1,549

600

432

88

5,814

400

17,329SOMPO CARE La vie Re Hama-Kawasaki

18,816

3,433

2,770

472

206

11,533400

45,068

Hanakotoba Shin-Yokohama

19,191

4,383

900

4,715

249

8,543

400

51,264

Hanakotoba Shin-Yokohama II

5,779

2,499

600

210

92

1,977

400

11,010

8,538

1,366

600

603

99

5,469

400

24,53125,650

5,190

1,020

―

508

18,531400

56,806

Verde Hotaka

25,001

2,177

1,020

776

249

20,378400

45,482Sunny Life Kita-Shinagawa

10,181

2,794

600

―

119

6,265

401

45,584

Sunny Life Kamakura

12,745

2,796

720

―

178

8,650

400

38,804

Nichii Home Nishikokubunji

2,026

―

450

―

61

1,240

273

13,661

SOMPO CARE Sompo no ie Awajiekimae

27,064

4,911

510

―

290

20,952400

58,345

SOMPO CARE Sompo no ie Kobekamisawa

16,838

2,904

510

160

183

12,680400

36,131

Niigata Rehabilitation Hospital

27,211

9,671

1,030

―

387

15,622500

78,291SHIP SENRI BUILDING

80,23927,500

1,500

―

1,183

49,655400

341,218

690,998

142,218

28,893

22,5798,622

473,904

14,7781,855,945

Hanakotoba Odawara
Verde Minowa

Not disclosed

Total(Note 1)
(Note 2)

(Note 1)

2,073,038 2,062,148

10,889”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.
“NOI” = Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

42

Ⅳ Appendix

Balance Sheet and Statement of Income for the 13th Fiscal Period

Balance Sheet

Statement of Income(Unit: thousand yen)

(Unit: thousand yen)
12th Fiscal Period
ended January 2021

12th Fiscal Period
ended January 2021

13th Fiscal Period
ended July 2021
Operating revenue

AssetsCurrent assets

2,101,451

1,806,355

Lease business revenue

Cash and deposits

1,792,280

1,482,160

Other lease business revenue

180,725

207,158

Cash and deposits in trust
Operating accounts receivable

13th Fiscal Period
ended July 2021

2,058,370

2,073,038

2,047,415

2,062,148

10,954

10,889990,458

994,481

Expenses related to rent business

678,866

690,998

Asset management fee

200,051

197,621

Operating expenses

－

3,042

Prepaid expenses

128,445

113,994

Non-current assets

66,640,351

67,053,357

Asset custody fee

3,435

3,432

Property, plant and equipment

66,423,062

66,877,828

Administrative service fees

22,156

21,461Intangible assets

Directorsʼ compensations

3,900

4,800

Property tax

28,11527,787596

397

Investments and other assets

216,691

175,131

Deferred assets

31,582

24,117

Investment unit issuance expenses

12,8486,424

Operating income

18,733

17,693

68,773,384

68,883,830

Investment corporation bond issuance costs
Total assets
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable

7,668,378

7,797,089

50,377

79,8277,000,000

7,000,000

Accounts payable – other

31,796

121,248

Accrued expenses

241,316

238,140

Income taxes payable
Accrued consumption taxes
Advances received
Deposits received

907

887

7,970

15,496

335,882

341,362

Other operating expenses

53,934

48,3801,067,911

1,078,556

Non-operating income

1,106

1,356

Interest income

98Insurance income－

762

Reversal of distribution payableNon-operating expenses
Interest expenses
Interest expenses on investment corporationbonds
Amortization of investment unit issuance
expenses
Amortization of investment corporation bondissuance costs
Borrowing expenses

1,096

584

158,052

157,82187,94786,600

7,800

7,800

6,424

6,424

1,040

1,040

54,83955,955

Ordinary income

910,964

922,091

Income before income taxes

910,964

922,091

Income taxes - current

908

888

Income taxes - deferred

2

0

911

889
921,201

126

126

Non-current liabilities

28,104,072

28,121,947

Investment corporation bonds

2,000,000

2,000,000

Long-term loans payable

24,150,000

24,150,000

Tenant leasehold and security deposits
Tenant leasehold and security deposits intrust
Deferred tax liabilities

1,805,509

1,865,509

86,766

86,766

Net income

910,053－

1,217

47,53061,901

61,746

18,453Retained earnings brought forward
Unappropriated retained earnings (undisposed
loss)

957,584

983,103

Derivatives liabilities
Other

50

－

35,772,451

35,919,037

Unitholdersʼ equity

33,062,679

32,980,592

Unitholders' capital, net

32,105,095

31,997,489

Total liabilities

Total income taxes

Net assets

Surplus
Valuation and translation adjustments
Deferred gains or losses on hedges

957,584

983,103△ 61,746△15,799△ 61,746△15,799

Total net assets

33,000,933

32,964,792

Total liabilities and net assets

68,773,384

68,883,830

43

Ⅳ Appendix

Information Related to Investment Units(As of the end of the 13th fiscal period)

Status of Unitholders

Other companies
4.9%

Ratio of Number of
Investment Unitsby Unitholder Type
Foreigninvestors
9.0%

Individuals,
etc,
31.2%

Total
311,001
units

Securities
companies
5.9%

List of Top Unitholders

Ratio of Number ofUnitholders
Securitiesby Unitholder Typecompanies
0.1%

Ranking

Other companies
1.5%

Financial
institutions
0.3%

Total
15,612
peopleForeigninvestors
0.7%

Individuals,
etc,
97.4%

Custody Bank of Japan, Ltd.
(Trust Account)

82,38026.5

2

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

29,775

9.6

3

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

11,577

3.7

4

NORTHERN TRUST CO. (AVFC) RE
FIDELITY FUNDS

11,422

3.7

5

Custody Bank of Japan, Ltd.
(Securities Investment Trust Account)

8,626

2.8

6

Morgan Stanley MUFG Securities Co.,
Ltd.

6,084

2.0

7

Nomura Securities Co., Ltd.

4,925

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

166,78953.6(Note) Increased by 52 from the previous fiscal period

Changes in Ratio of Number of Investment Units by
Unitholder Type (most recent 5 fiscal periods)
8.6%
5.6%
4.4%

7.4%
5.2%
4.7%

9.1%
4.9%
4.2%

9.9%
5.0%
4.2%

9.0%
4.9%
5.9%
Foreigninvestors

45.4%

50.3%

49.6%

49.6%

49.0%

Other
companies
Securities
companies
Financial
institutions

36.0%

32.4%

32.2%

31.3%

31.2%

9th FP

10th FP

11th FP

12th FP

13th FP(Note)The ratio of each index is rounded off to the first decimal place.

Individuals, etc,

Ownership ratio(%)

１(Note)

Financial institutions
49.0%

Name

Number ofinvestment
units owned(units)

8

Total

44

Ⅳ Appendix

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

Upgrades and Expansion of Healthcare Facilities
June
Backedby Government Policy
2015

Outlook of Change in Japanʼs Population and Elderly Ratio(10 thousand people)

15,000

Actual
65~74歳65-74 years
old75 years old
Percentage
over
75歳以上の割合

75歳以上
75 years old or older
64歳以下
64 years old
or65
younger
Percentage
overyears old
65歳以上の割合

Estimate

36.8%
32.8%

30.0%

10,000
5,000

14.5%

0

1985
1985年

1,109
717

17.8%

7,740 19.6%

6,723

21.4%

9.1%
1,407
1,160

1,734
1,613

1,497
2,180

1,522
2,260

1,643
2,277

2005
2005年

2015
2015年

2025
2025年

2035
2035年

2045
2045年

5.7%

1995
1995年

8,577
12.7%

10.3%
776 3.9%
471

9,218

20.1%

March
2021

30%

26.3%
10,161

10,71810,854

40%

10%
0%

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

the National Institute of Population and Social Security Research

Ratio of Elderly Single Households in Elderly Households
Couplewith no夫婦のみ
other members

Other
その他

30,000

Actual34.0%

20,000Ratio
of single elderly
単独高齢者割合

Single単独

Estimate

39.0%

37.4%

35.7%

6,879

9,365

6,590

6,756

6,606

6,510

6,763

6,693

6,666

6,870

6,740

6,420

5,525

7,512

7,959

8,418

8,963

7,025

5,928

4,791

30%

2020
2020年

2025
2025年

2030
2030年

2035
2035年

230

thousand people

thousand people

thousand people

2005

2014

2018

thousand people

1,490

890

690

0.9％

10%
0%

2015
2015年

Resident Capacity（Note）

20%

0
2010
2010年

Resident Capacity

Resident Capacity

9,022

10,000Resident Capacity

50%

40.0%

40%

27.3%

24.8%

A target to raise the ratio of housing for the elderly
as a percentage of the elderly population to 4% by
2030 was set.

20%

Source: Statistics Bureau, Ministry of Internal Affairs and Communications “2015 census“ and “Population Projection for Japan (2017 projection)” by(Thousand households)

Housing Life Basic Plan
(nationwide plan)

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 a percentage of the elderly population.

2040
2040年

Source: Statistics Bureau, Ministry of Internal Affairs and Communications “2015 census“ and “Household Projection for Japan (Nationwide Projection)”(2018 projection) by the National Institute of Population and Social Security Research

Promotion of Further Supply of Healthcare Facilities

Current Status of Reconstruction of Hospitals, etc.

Although supply of facilities and housing for the elderly is on the rise each year, the supply
rate of paid nursing homes against the elderly population was a mere 1.6% in 2019, andpromotion of further supply is needed.

Supply Status of Paid Nursing Homes(people)600,000

定員数（人）
Resident
capacity

400,000

1.0%
0.7%

1.1%

Supply rate for 65 years ole or older
65歳以上人口に対する供給率
1.5%
1.4%
1.3%
1.2%

1.6%

2.0%
1.5%

0.7%

1.0%
0.5%

216,174

Ratio of quake-resistant paid nursing homes is 95% or more while that ofquake-resistant hospitals remains at 77.3%.
Quake-resistant statues of hospitals


1.6%

200,000
195,972

Hospitals that were constructed in the 1960ʼs and 1970ʼs and do not meetthe earthquake resistance standards still exist.



315,234

350,990391,144424,828

482,792

518,507552,350

576,116

0

8,000

0.0%
2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

0.70%

0.72%

6,000

Supply Status of Serviced Housing for the Elderly
Numberof units
戸数300,000

200,000

65歳以上人口に対する供給率
Supplyrate for 65 years ole or older

0.50%

0.57%

0.61%

0.64%

0.67%

0.42%

Number of hospitals with earthquake resistance in some buildings
⼀部の建物に耐震性がある病院数

Number of hospitals where all buildings are not earthquake resistant
全ての建物に耐震性がない病院数

Number of hospitals whose seismic resistance of buildings is
建物の耐震性が不明である病院数
unknown

1,955

1,747

1,569

1,466

122
729

131
719

141
704

141
674

1,344
123
664

1,344
113
633

1,153
100
619

5,687

5,880

6,050

6,130

6,231

6,318

6,382

2014年…
2014
survey2015年…
2015
survey2016年…
2016
survey2017年…
2017
survey2018年…
2018
survey2019年…
2019
survey2020年…
2020
survey

1.00%

4,000

0.50%

0.29%

Number of hospitals with earthquake resistance in all buildings
全ての建物に耐震性のある病院数

2,000

100,000
0.01%
3,448
0

89,122

135,352

166,279

191,871

210,859

225,374

238,289

250,3520

262,021

2016
2017
2019
2020
2011
2012
2013
2014
2015
2018
2011年12月
2012年12月
2013年12月
2014年12月
2015年12月
2016年12月
2017年12月
2018年12月
2019年12月
2020年12月
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.
Dec.

0.00%

Source: Ministry of Health, Labor and Welfare “Survey of hospital seismic repairs (2020 survey)”

45

Ⅳ Appendix

Environment Surrounding Healthcare Facilities (2)Nursing care fees which are revised every 3 years, were revised in FY 2021. This was the firstrevision of nursing care fees under the COVID-19 pandemic.
Overview of Nursing Care Fee Revision in Fiscal 2021
Revision rate ︓ +0.70％ （0.05% of it is special evaluations for dealing with COVID-19（Until the end of September 2021））
This is the second consecutive positive revision. Based on the following perspectives, the allocation focus on independence support andinnovation at the nursing care site.
Major viewpoints of the revision

3.Promotion of actions for independence support and prevention of severity

1.Strengthening responsiveness to infectious diseases and disasters

4.Securing nursing care personnel and innovation nursing care place

2.Promotion of comprehensive community care system

5.Ensuring the stability and sustainability of the system

Changes Made by Recent Revisions
Revision period (FY)

Major points upon revision

Revision rate

2009





Securement of personnel by nursing care business operators and improvement of working conditions
Cooperation with medical services and enhanced care for people with dementia
Provision of efficient services and securement of new services

3.00％

2012






Improvement of in-home services and more focused efforts on facilities
Improvement and increased focus of efforts on services to support independent living
Cooperation between medical services and nursing care services, and division of functions
Securement of nursing personnel and evaluation of service quality

1.20％

2014（temporary）

Response to consumption tax hike (8%)

0.63％

2015

Further strengthening of response to people requiring moderate to severe level of nursing care and the elderlywith dementia
 Promotion of measures to secure nursing personnel
 Improvement in evaluation of services and establishment of efficient service provision system

2017（temporary）



Improvement of working conditions for nursing personnel△2.27％
1.14％

Promote regional comprehensive care system
Realize high-quality nursing care services that contribute to supporting unassisted living and preventing ofincrease in severity
 Secure various human resources and improve productivity
 Secure stability and sustainability of the system through making nursing care services more appropriate andfocused

0.54％

Please refer to the above.

0.70％




2018

2021

46

Ⅳ Appendix

Environment Surrounding Healthcare Facilities (3)Regional Comprehensive Care System○ We will establish a regional comprehensive care system that provides residences, medical care, nursing care, preventative medicine and life support in an
integrated manner to offer 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 with dementia live as the number of
elderly with dementia is expected to increase in the future.
○ There is a large regional difference concerning the progress of aging. There are, for example, large cities with the overall population remaining flat but the
population of people aged 75 years old or older increasing rapidly and rural areas with the population of people aged 75 years old or older increasingslightly 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 sick...
Medical care••

When you need nursing care...
Nursing careAcute care hospital
Subacute and recovery phase/recovery
phase rehabilitation hospital

Hospital visit&
stay

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

Outpatient nursing care&admission

Residence• Regional comprehensive
support center• Care manager

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

Own house
Serviced housing for the elderly, etc.

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

Patients
with dementia

To live a healthy life forever...

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

Golden age club, local government, volunteer, NPO, etc.
Source: Website of Ministry of Health, Labor and Welfare47

Ⅳ Appendix

Environment Surrounding Healthcare Facilities (4)About Regional Healthcare Vision“Regional Healthcare Vision” is to estimate and stipulate medical demand (number of patients) and required number of beds in 2025 for each
medical function in each area of the vision (secondary medical area) in order to promote functional differentiation and coordination of
hospital wards.
Following this, prefectural governments and medical staff will respond to realize the formulated initiative.
Current hospital bed functions(as of July 2015)

Number of Beds to be Requiredin 2025

Total 1.331 million beds

Total 1.191 million beds (Note)(Hospital Ward A)

Medical institution

Advanced acutestage function

Distortion of
medical balance
and financial
concerns due tooveremphasis on
advanced acutestage(Hospital Ward B)

Voluntarily
selectmedicalfunction

Acute stage
function

Decrease by approx. 30%

Acute stage
401,000 beds
(34%)

Acute stage
593,000 beds
(48%)

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

Prefectural
government

Advanced acute stage
131,000 beds
(11%)

Advanced acute stage
169,000 beds
(14%)

Recovery stage
129,000 beds
(10%)

Increase by approx. 3 times

Decrease by approx. 20%

Report current status andfuture direction of 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 carefacilities, in-home medicalcare, etc.

Recovery stage
375,000 beds
(31%)

Chronic stage
284,000 beds
(24%)

Nursing care facilities,
in-home medical care,etc.
Approx.
300,000 people(Source) Prepared by the Asset Management Company based on “Initiatives for Medical/Nursing Care
Reform” (June 22, 2017) by the Ministry of Health, Labour and Welfare(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.

(Note)

Total of Cabinet Secretariatʼs estimates (June 2015). Within the range of 1.148 million beds
to 1.191 million beds.

48

Ⅳ Appendix

Environment Surrounding Healthcare Facilities (5)Facilities and Housing for the Elderly

Characteristics

Mainfounder

Paid nursing homes with careservice

These are paid nursing homes for the elderly that fall under the prefectural governmentʼs designation of “Daily Life
Long-Term Care Admitted to a Specified Facility” for long-term insurance. Facility staff provide nursing care services
when residents need nursing care, and the nursing care fee is a fixed amount (fixed) based on the level of nursing
care required for respective residents. Facilities must be designated in order to open (restrictions apply).

For-profit
Entities

Residential type paid nursing
homes

Unlike paid nursing homes with care service, these are paid nursing homes for the elderly in which residents
themselves enter separate contracts with external operators to receive nursing care services in the case they neednursing care. The nursing care fee is based on the amount of nursing care services the resident used (variable).
Facilities need to notify the government in order to open.

For-profit
Entities

Serviced housing for the elderly(Sakouju)

This is rental housing for the elderly that meets registration standards for size, facilities, etc. At a minimum, it must
provide safety confirmation and living consultation services. Facilities must register in order to open.

For-profit
entities

Long-term daily care fordementia patients in communal
living situation(Group homes)

These are one type of community-based long-term care service business stipulated by the Long-Term Care
Insurance Act. Their purpose is to delay the progress of dementia of users, who are people requiring nursing careand in the state of dementia, through communal living in small groups of up to nine people per unit with assistanceand functional training.

For-profit
Entities

Facilities covered by public aid
providing long-term care to theelderly(intensive care homes for theelderly)

These are welfare facilities for the elderly for people requiring nursing care on a continual and steady basis but havedifficulty receiving it at home. With stricter admission requirements since April 2015, these facilities in principle
target elderly people requiring long-term care level 3 or higher.

Social welfare
corporations

Long-term care health facilities(nursing and health facilities forthe elderly)

These are facilities to provide medical treatment, nursing care under medical supervision, functional training andother necessary medical services as well as everyday care with the aim of returning people requiring nursing care toa self-independent state and living at their own homes.

MedicalCorporations

Integrated facilities for medical
and long-term care

Established in April 2018, these are facilities that provide everyday medical supervision, a certain level of nursing
care and residential functions to elderly people who require long-term recuperation. End-of-life care and deathwatch
are also available.

MedicalCorporations

Type

49

Ⅳ Appendix

HCMʼs Investment Philosophy and Three Features
Three Features

Investment Philosophy

Investment in healthcare facilities for which
demand is expected to grow• Increase in demand due to further advancement of aging
Serve as a conduit between the nursing care andmedical service industries and the capital markets

Develop a portfolio specialized inhealthcare facilities, for which
demand is expected to growPromote the supply of healthcare
facilities as social infrastructuresociety• Upgrades and expansion of healthcare facilities backed bygovernment policy

Strong support from sponsors• Utilization of advanced expertise in “nursing care andmedical service,” “fund management” and “finance” heldby SHIP HEALTHCARE, NEC Capital and SMBC

• Securement of property acquisition opportunities byutilizing extensive networks

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

Stable cash flow in the long term•

Conclusion of long-term fixed-rent lease agreementswith credible operators•

Proper portfolio management based on strong
relationship with operators

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Ⅳ Appendix

HCMʼs Network

Asset Custody Company
Administrative Agent
Administrator of the Unitholdersʼ
Registry

HCM

Sumitomo Mitsui Trust Bank
Healthcare & Medical
Investment Corporation

Accounting Auditor

General meeting of unitholders

PricewaterhouseCoopers Aarata LLC

Board of Directors

Yuji Yoshioka
FujiseExecutive Director: Seiji
Supervisory Officer: Yasuo Shida
Supervisory Officer: Sachihiko
Fujimoto

Sponsor Support Companies

Support Companies

Asset Management
Agreement

SMBC Trust Bank Ltd.
RISA Partners, Inc.

Asset Management Company
Sumitomo Mitsui Finance andLeasing
Yoei

Sponsor Support
Agreement

Pipeline Support
Agreement

GinsenKobe Tochi Tatemono
Muromachi Building

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

Healthcare
Asset Management Co., Ltd.

51

Ⅳ Appendix

Overview of Unitholder Special Benefit Plan
With the cooperation of operators, we offer unitholder special benefits.
Company Name

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

Proud Life Inc.



Discount initial fee or deposit

Lifecare Design Inc.



Discount initial fee

Nichii Carepalace Company



Discount initial fee

Benesse Senior Support Co., Ltd.

Sompo Care Inc.

JAPAN LIFEDESIGN Inc.
GREEN LIFE Co., Ltd.
GREEN LIFE HIGASHI NIHON Co.,Ltd.
Sawayaka Club Co., Ltd.

AS PARTNERS Co., Ltd.

(Benesseʼs consultation
department for nursing care)(Note) The special benefits are for unitholders as of the end of July 2021 and are subject to change in the future.

Tour with free lunchFree trial move-in (four-days andthree-nights)

Tour with free lunch

52

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

CEO

Seiji Yoshioka

Shareholders

As of October 1, 2021
General Meeting of
Shareholders
Audit & Supervisory
Board Member

Board of Directors

SHIP HEALTHCARE HOLDINGS, INC.

33.3%

NEC Capital Solutions Limited

33.3%

Sumitomo Mitsui Banking Corporation

5.0%

Sumitomo Mitsui Finance and Leasing Company,

4.8%

LimitedManagement Committee

Compliance Committee

Representative Director

Internal Audit Office

SMBC Nikko Securities Inc.

4.8%

Yoei

4.7%

Ginsen4.7%

Kobe Tochi Tatemono

4.7%

Muromachi Building

4.7%

Investment
Department(Newly established)
Healthcare
Asset
Business
Management
Promotion
Department
Department

Compliance OfficeFinancial &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

53

Ⅳ Appendix

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

Headquarters
location

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

Representative

Chairman: Kunihisa Furukawa
President: Futoshi Ohashi

FoundedAugust 1992

Capital stock

15,553 million yen

Sales

497,156 million yen on a consolidated basis(fiscal period ended March 2021)

NEC Capital Solutions Limited

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

Headquarters
location

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

Representative

President: Tomoo Imazeki

FoundedNovember 1978

Capital stock

3,776 million yen

Sales

209,914 million yen(fiscal period ended March 2021)

Sumitomo Mitsui Banking Corporation

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

Headquarters
location

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

Representative

President and CEO: Makoto Takashima

Capital stock

1,770,996 million yen

54

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 15, 2021) 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.

55