This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

(REIT) Financial Report for Fiscal Period Ended January 2019
March 15, 2019

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

Representative:

Seiji Yoshioka, Executive Director

REIT Securities Issuer

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

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

April 25, 2019
April 19, 2019

Preparation of supplementary financial results briefing materials: Yes
Holding of financial results briefing session:
Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for Fiscal Period Ended January 2019 (from August 1, 2018 to January 31, 2019)(1) Management Status(% figures are the rate of period-on-period increase (decrease))
Fiscal period
Ended Jan. 2019
Ended Jul. 2018
Fiscal period

Operating revenue
million yen
%
1,301
2.7
1,267
3.9

Operating income
million yen
%
647
3.5
625
0.2

Net income per unit

Return on equity

yen
2,794
2,698

Ended Jan. 2019
Ended Jul. 2018

%
2.7
2.6

Ordinary income
million yen
%
540
3.6
522
1.7
Ratio of ordinary income
to total assets
%
1.2
1.2

Net income
million yen
539
521

%
3.6
1.7

Ratio of ordinary income
to operating revenue
%
41.5
41.2

(2) Distributions Status
Distribution
per unit

Distribution
per unit

Total
Total
Distribution
Total
Distribution Ratio ofin excess of distributions distributions distributions
payout distributions(including(excluding(including(excluding
earnings perin excess of
distribution in distribution in excess
distribution in
distribution inratio to net assets
unit
earnings
excess of earnings)
of earnings)
excess of earnings) excess of earnings)
yen
3,120
2,699

yen
2,661
2,699

Ended Jan. 2019
Ended Jul. 2018

yen
459
0

million yen
602
521

million yen
513
521

million yen
88
0

%
95.2
100.0

%
2.5
2.6

(Note 1) The breakdown of total distributions in excess of earnings for the fiscal period ended January 2019 (88 million yen (459 yen per unit)) is 25 million yen(133 yen per unit) as a total distribution amount from reserve for temporary difference adjustments due to arising of deferred losses on hedges (25million yen) recorded as net asset deduction items, and 62 million yen (326 yen per unit) as a total distribution amount from distribution reducing
unitholders’ capital for tax purposes.
(Note 2) The ratio of decreasing surplus due to execution of distribution in excess of earnings (return of capital) is 0.002 for the fiscal period ended January
2019. The ratio of decreasing surplus is calculated based on Article 23, Paragraph 1, Item (v) of the Order for Enforcement of the Corporation Tax Act.
(Note 3) Payout ratio is calculated using the following formula.
Payout ratio = Distribution per unit (excluding distributions in excess of earnings) / Net income per unit x 100(3) Financial Position
Fiscal period
Ended Jan. 2019
Ended Jul. 2018
(Note)

Total assets
million yen
44,32742,438

Net assets
million yen
20,314
20,322Equity ratio
%
45.8
47.9

Net assets per unit
yen
105,198
105,238

Partial Amendments to Accounting Standard for Tax Effect Accounting (ASBJ Statement No. 28 announced on February 16, 2018) is applied from the
beginning of the fiscal year under review, and the financial position for the fiscal period ended July 2018 indicates figures to which said accounting
standards were retrospectively applied.

-1-This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(4) Status of Cash Flows
Fiscal period

Net cashprovided by (used in) operating
activities

Net cashprovided by (used in) investing
activities

Net cashprovided by (used in) financing
activities

Cash and cash equivalents at endof period

million yen
930
980

million yen(1,788)(54)

million yen
1,196
(600)

million yen
1,401
1,062

Ended Jan. 2019
Ended Jul. 2018

2. Earnings Forecast for Fiscal Period Ending July 2019 (from February 1, 2019 to July 31, 2019) andEarnings Forecast for Fiscal Period Ending January 2020 (from August 1, 2019 to January 31, 2020)(% figures are the rate of period-on-period increase (decrease))

Fiscal periodEnding Jul. 2019
Ending Jan. 2020

Operating revenue

million yen
2,006
2,006

Operating income% million yen
54.2
1,178
0.0
1,101

Ordinary income% million yen
82.1
1,018
(6.5)
939

Net income% million yen
88.3
1,017
(7.7)
938

(Reference) Forecast net income per unit (fiscal period ending July 2019)
Forecast net income per unit (fiscal period ending January 2020)

%
88.5
(7.7)

Distribution perDistribution inunit (excludingexcess of
distribution inearnings per
excess ofunit
earnings)
yen
3,270
3,017

yen
285
285

Distribution
per unit(including
distribution
in excess ofearnings)
yen
3,555
3,302

3,279 yen
3,017 yen

* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement① Changes in accounting policies accompanying amendments to accounting standards, etc.: No② Changes in accounting policies other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatement:No(2) Total Number of Investment Units Issued and Outstanding① Total number of investment units issued and outstanding (including own investment units) at end of period
193,107 units
Fiscal period ended January 2019 193,107 units
Fiscal period ended July 2018
② Number of own investment units at end of period
Fiscal period ended January 2019
- units
Fiscal period ended July 2018
- units(Note) For the number of investment units serving as the basis for calculation of net income per unit, please see “Notes
on Per Unit Information” on page 31.
* Presentation of Status of Implementation of Audit Procedures
At the time of disclosure of this financial report, audit procedures for financial statements pursuant to the Financial Instruments
and Exchange Act have not been completed.
* Explanation of Appropriate Use of Earnings Forecast, and Other Matters of Special Note
The forecast is a future prospect judged by HCM based on information currently available and includes many uncertain factors.
Actual operating revenue, operating income, ordinary income, net income, distribution per unit (excluding distribution in excess ofearnings), distribution in excess of earnings per unit and distribution per unit (including distribution in excess of earnings) are
subject to change due to changes in circumstances. In addition, the forecast is not a guarantee of the amount of distribution anddistribution in excess of earnings. For the assumptions underlying the above forecast, please see “Assumptions Underlying
Earnings Forecast for Fiscal Period Ending July 2019 and Fiscal Period Ending January 2020” on pages 11 and 12.

-2-This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Table of Contents
1. Related Parties of HCM .......................................................................................................................................................- 4 2. Management Policy and Management Status ....................................................................................................................- 4 (1) Management Policy .....................................................................................................................................................- 4 (2) Management Status ....................................................................................................................................................- 4 ① Overview of the Current Fiscal Period ...................................................................................................................- 4 ② Outlook for the Next Fiscal Period .........................................................................................................................- 6 (3) Investment Risks ........................................................................................................................................................- 12 3. Financial Statements .........................................................................................................................................................- 13 (1) Balance Sheet ............................................................................................................................................................- 13 (2) Statement of Income .................................................................................................................................................- 15 (3) Statement of Unitholders’ Equity ..............................................................................................................................- 16 (4) Statement of Cash Distributions ................................................................................................................................- 17 (5) Statement of Cash Flows ...........................................................................................................................................- 19 (6) Notes on the Going Concern Assumption..................................................................................................................- 20 (7) Notes on Matters Concerning Significant Accounting Policies ...................................................................................- 20 (8) Notes on Changes in Presentation or Classification ...................................................................................................- 21 (9) Notes on Financial Statements ..................................................................................................................................- 21 (10) Changes in Total Number of Investment Units Issued and Outstanding ....................................................................- 33 4. Change in Directors ...........................................................................................................................................................- 33 (1) Change in Directors of HCM.......................................................................................................................................- 33 (2) Change in Directors of the Asset Management Company .........................................................................................- 33 5. Reference Information ......................................................................................................................................................- 34 (1) Investment Status ......................................................................................................................................................- 34 (2) Investment Real Estate Properties .............................................................................................................................- 35 ① Acquisition prices, etc. of investment real estate properties and their shares of investment.............................- 35 ② Buildings of investment real estate properties and their leasing status ..............................................................- 36 ③ Summary of Appraisal Report..............................................................................................................................- 38 ④ Status of Capital Expenditures of Assets under Management.............................................................................- 39 ⑤ Information of Major Tenants .............................................................................................................................- 40 ⑥ Portfolio Overview...............................................................................................................................................- 41 --3-

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

1.

Related Parties of HCM
Disclosure is omitted because there is no significant change from “Structure of HCM” in the most recent securities report(submitted on October 26, 2018).

2.

Management Policy and Management Status(1) Management Policy
Disclosure is omitted because there is no significant change from “Investment Policy,” “Investment Targets” and“Distribution Policy” in the most recent securities report (submitted on October 26, 2018).
(2) Management Status① Overview of the Current Fiscal Period(a) Brief History of HCM
Healthcare & Medical Investment Corporation(hereinafter, “HCM”) was established under the Act on Investment Trusts
and Investment Corporations (Act No. 198 of 1951, as amended; hereinafter, the “Investment Trusts Act”) with
Healthcare Asset Management Co., Ltd. (hereinafter, the “Asset Management Company” or “HAM”) as the organizer andinvestments in capital of 200 million yen (2,000 investment units) on December 9, 2014. An issuance of new investment
units through public offering (106,500 units) was implemented on March 18, 2015, and HCM was listed on the Real
Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (securities code: 3455) on March 19, 2015. In
addition, an issuance of new investment units through third-party allotment (12,000 units) in line with public offering
was implemented on April 21, 2015.
Following the above, HCM implemented issuance of new investment units through public offering (69,150 units) on
February 1, 2017 as well as issuance of new investment units through third-party allotment (3,457 units) on March 1,
2017 in line with the public offering. As a result, the total number of investment units issued and outstanding stands at
193,107 units as of the end of the current fiscal period.
(b) Investment Environment and Performancea. Investment Environment
HCM was established on the background of the social situation in which expansion and enhancement of nursing careservices and medical services by healthcare facilities has become an urgent issue, at the time when the population whichbears nursing care continues to shrink while aging advances the fastest in developed nations and the number andpercentage of the elderly among the total population is expected to remain on the rise for the time being.
The government has also set a target in “Housing Life Basic Plan (nationwide plan)”,to increase the ratio of housing
supply for the elderly to 4% in 2025 from 2.1% in 2014.
HCM seeks to realize a society where all people can live vibrantly and with peace of mind as well as to secure stable
income and to achieve steady growth of the portfolio. HCM will make a stable investment in healthcare facilities, forwhich social demand is growing, to promote appropriate maintenance/management and new supply.
b. Performance
HCM acquired two properties (Hanakotoba Minami and Hanakotoba Miura) on October 1, 2018 with a total acquisition
price of 1,686 million yen.
2

As a result, HCM owns 27 properties with a total leasable area of 124,160.80 m , and the total number of tenants stands
at 33 with an occupancy rate of 100.0% at the end of the current fiscal period.
(c) Overview of Financing
HCM upholds stable financial management as its basic policy for securing stable income and maintaining and enhancing
asset value over the medium to long term. In the current fiscal period, HCM borrowed 1,750 million yen on October 1,
2018 to cover part of the acquisition and costs of the above two properties and related expenses. Furthermore, HCM
refinanced 1,000 million yen of loans due for repayment on January 31, 2019.
As a result, unitholders’ capital at the end of the current fiscal period stands at 19,800 million yen, the total number of-4-This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
investment units issued and outstanding at 193,107 units, and the total interest-bearing liabilities at 22,450 million yen.
As of the end of the current fiscal period, the ratio of interest-bearing liabilities (loan amount) to total assets (hereinafter,“LTV”) is 50.6%.
HCM’s rating as of January 31, 2019 is as follows.
Rating Agency

Rating category

RatingOutlookJapan Credit Rating
Agency, Ltd. (JCR)

Long-term issuer rating

A (single-A)

StableHCM submitted a shelf registration statement of investment corporation bonds (excluding short-term investment
corporation bonds) to the commissioner of the Kanto Local Finance Bureau on December 21, 2017. The following is theoutline of the statement.
Planned amount of issuance

100 billion yen or less

Planned period of issuance

From December 29, 2017 to December 28, 2019

Use of fundAcquisition of specified assets (as defined in Article 2, Paragraph 1 of the Investment
Trusts Act), repayment of borrowings, redemption of investment corporation bonds(including short-term investment corporation bonds), return of tenant leasehold andsecurity deposits, payment for repair expenses, etc., operating fund, etc.

(d) Overview of Business Performance and Distributions
As a result of the management described above, business performance in the current fiscal period was operating
revenue of 1,301 million yen, operating income of 647 million yen, ordinary income of 540 million yen and net income of
539 million yen.
With respect to cash distributions, HCM has decided to distribute 513,857,727 million yen, which is the maximum
integral multiple to 193,107 investment units issued and outstanding as the distribution of earnings, not exceeding theamount obtained after deducting the reversal of reserve for temporary difference adjustments (as defined in Article 2,
Paragraph 2, Item (30) of the Ordinance on Accountings of Investment Corporations) from unappropriated retained
earnings to be eligible for special provisions of the tax system on investment corporations (Article 67-15 of the Act on
Special Measures Concerning Taxation (Act No. 26 of 1957, including subsequent revisions; hereinafter the “Special
Taxation Measures Act”)), that allows HCM to deduct the amount of profit distribution from its taxable income.
Accordingly, distribution per unit for the period was 2,661 yen.
In addition, HCM is to make distribution in excess of earnings, of which amount is to be determined by HCM as an amountequivalent to net asset deduction items (as defined in Article 2, Paragraph 2, Item (30) (b) of the Ordinance on Accountingsof Investment Corporations), considering the impact of net asset deduction items on distribution, pursuant to the policy
for cash distribution in excess of earnings provided in Article 36, Paragraph 2 of its Articles of Incorporation. In the current
fiscal period, since deferred losses on hedges of 25 million yen was recorded as net asset deduction items, HCM decided tomake distribution of reserve for temporary difference adjustments in the amount of 25,683,231 yen. As a result, distribution
in excess of earnings per unit (of reserve for temporary difference adjustments) came to 133 yen.
Furthermore, in accordance with the policy for cash distribution in excess of earnings provided in Article 36, Paragraph 2 of
its Articles of Incorporation, HCM is to conduct distribution in excess of earnings (return of capital that falls under the
category of distribution reducing unitholders’ capital for tax purposes) in each period on a continuous basis. In the current
fiscal period, HCM has decided to distribute 62,952,882 yen, an amount roughly equivalent to 20% of depreciation recordedin the current fiscal period, as distribution in excess of earnings. As a result, distribution in excess of earnings per unit (ofother distribution in excess of earnings) came to 326 yen.

-5-

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Note 1) Distribution in excess of earnings is distributed up to the amount equivalent to 20/100 of the depreciation
recorded in the accounting period immediately before the accounting period when HCM will pay the said
distribution, sufficiently taking into consideration the amount of capital expenditure necessary for maintaining
and improving the competitiveness of HCM’s Assets Under Management, the financial position of HCM and otherfactors.
However, distribution in excess of earnings may be conducted up to an amount lower than the above amount or
may not be conducted when the implementation of distribution in excess of earnings up to the said amount isjudged to be inappropriate based on the economic environment surrounding HCM, trends of the real estatemarket and leasing market, status of HCM’s Assets Under Management and financial conditions.
(Note 2) Under the rules of The Investment Trusts Association, Japan (hereinafter, “The Investment Trusts Association”),
closed-end type investment corporations are allowed to conduct distribution in excess of earnings up to an
amount equivalent to 60/100 of the depreciation recorded on the last day of the accounting period.
② Outlook for the Next Fiscal Period(a) Investment Environment
In Japan, while the number of elderly households is increasing, the population which bears nursing care is on the decline,
providing of nursing care services and medical services for a certain percentage of elderly households is inevitably
needed. The expansion of the supply of healthcare facilities especially facilities and housing for the elderly is required in
response to the expanding demand for nursing care and medical services.
While nursing care in the same household is forecasted to be difficult due to aging and change of family structure, newdevelopment and expansion of healthcare facilities is required to respond to the growing
medical services, and measures to achieve them are being promoted.

demand for nursing care and

The Headquarters for Japan's Economic Revitalization announced a policy to “enact a guideline concerning acquisition
and management of housing for the elderly, etc. for the utilization of healthcare REITs with an aim to utilize private fund”
as part of urban development to enable the elderly, etc. to walk and live safely in the “Japan Revitalization Strategy JAPAN is BACK-“ as of June 14, 2013.
Following this policy, the Ministry of Land, Infrastructure, Transport and Tourism announced the “Guideline related tothe utilization of healthcare REITs targeting housing for the elderly, etc.” on June 27, 2014 and the “Guideline related to
REITs targeting hospital real estate” on June 26, 2015, as well as indicated the points to be noted in transactions ofhealthcare facilities such as the positioning of key executive with certain experience. With the enactment of theseguidelines, it is considered that the opportunity for the operator to utilize healthcare REITs will increase.
In addition, “Housing Life Basic Plan (nationwide plan)” that was decided by the cabinet as of March 18, 2016 states aperformance indicator of increasing the ratio of housing for the elderly to the elderly population to 4% in 2025 from
2.1% in 2014 based on the goal to “realize a housing life where the elderly can live independently”.
As for the environment surrounding medical service-related facilities, etc., the government of Japan has promoted a“regional comprehensive care system,” a future vision concerning the reorganization of medical service and nursing carefunctions for providing more effective and efficient medical and nursing care services through subdividing roles of thefunctions of hospitals and hospital beds for the needs of patients and enhancing cooperation in medical service andnursing care conceived in accordance with the increase of the elderly population in Japan. The government has further
divided the functions of beds in medical institutions in line with the conditions of patients, aiming to provide appropriate
medical service to all patients at an appropriate location in order to effectively utilize limited medical resources, andestablished guidelines (March 2015) for planning a community healthcare vision in prefectures. Prefectures haveestablished a vision for community healthcare to adequately promote well-balanced, specialized medical functions andcooperation to suit the community, and will promote subdividing medical functions in accordance with medical needs by
newly including such vision in medical planning.
Furthermore, it is said that there are approximately 8,400 hospitals (referring to “a facility for the hospitalization of notless than 20 patients, where physicians or dentists carry out medical practices or dental practices for the public or otherspecific groups of people” as defined in Article 1-5, Paragraph 1 of the Medical Care Act) in Japan but the ratio ofearthquake-resistant hospitals in Japan remains at 72.9% according to a survey conducted in fiscal 2017. Hospitals are-6-This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
used by an unspecified large number of people every day and can also be used as a community base in case of a disaster.
Earthquake resistance is an urgent issue even from the viewpoint of strengthening the country's infrastructure.
Therefore, hospitals have capital investment needs, such as newly building hospital wards to meet the division offunctions and changing current wards to meet other needs, making buildings earthquake-resistant and reconstructing
buildings, and capital needs surrounding hospitals are projected to increase going forward.
Therefore, the market for healthcare facilities with a particular emphasis on the keywords “nursing care,” “medical
service” and “health,” which HCM sets as acquisition targets, is believed to further expand in the future.
(b) Future Management Policy and Challenges to Address
With recognition of the above investment environment, HCM aims to secure stable revenue and steady growth of theportfolio while seeking to realize a society where all people can live vibrantly and with peace of mind, and manages
assets based on the following policies.
a. Asset management policy for properties owned
Healthcare facilities possess a unique property feature in which not only location or specifications of buildings, but also
the operational capability of the operator and management stability have a large impact on their value as real estate.
When HCM acquires a healthcare facility, we aim to secure stable revenue for the medium to long term by, in principle,
concluding a long-term lease agreement with fixed rent with the operator that operates the healthcare facility.
HCM conducts due diligence on the business feasibility of facilities, including analyzing the management and financial
conditions of operators, along with real estate due diligence, in order to secure stable revenue over the medium to longterm; and also implements continuous monitoring even after the acquisition.
b. Property acquisition policy
HCM may utilize the comprehensive capabilities of its sponsors, etc. including professional know-how and customer base,first refusal rights provided in the support agreements, based on the support agreements which the Asset Management
Company has concluded with 12 sponsor companies and such.
Furthermore, the Asset Management Company may, for the purpose of making flexible property acquisition, request
sponsors, etc. to temporarily own a property (warehousing) on the premise it be transferred to HCM.
HCM aims to maximize unitholder value over the medium to long term by best utilizing the extensive network andwarehousing function of the sponsors, etc. and works for sustainable growth of the asset size as mentioned above.
c. Financing policy
HCM intends to build a stable financial base, to consider market condition upon financing, with aim to secure stablerevenue over the medium to long term and maximize unitholder value.
With stable growth of HCM over the long term in mind, equity financing will be carried out flexibly, taking into
consideration a multitude of factors including the timing of the acquisition of newly-acquired real estate-related assets
and the possibility of utilizing the sponsor’s warehousing capabilities, LTV, the timing for the repayment of interestbearing liabilities and the period remaining until repayment, as well as market conditions, while also considering thedilution of the rights of existing unitholders and the resulting decline, etc. in the trading price of investment units.
As to debt financing, stable and flexible leverage control will be implemented by diversifying repayment due dates andsetting upper limit of LTV at 65% (may, however, exceed 65% temporarily). In addition, stable bank formation will beestablished by receiving financial advice from Sumitomo Mitsui Banking Corporation, one of the sponsors, based on thesponsor support agreement concluded between the bank and the Asset Management Company.
(c) Significant Subsequent Eventsa. Acquisition of Assets
HCM concluded a purchase agreement related to the acquisition of the following eight trust beneficiary interests in realestate on January 11, 2019 and acquired them (hereinafter, the “Assets Acquired in the 9th fiscal period”) on February 1,-7-

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
2019.
Acquisition price

Property nameLocation

SOMPO CARE La vie Re
Hama-Kawasaki

Kawasaki-shi, Kanagawa

1,710

Hanakotoba Shin-Yokohama

Yokohama-shi, Kanagawa

2,071

Hanakotoba Shin-Yokohama II

Yokohama-shi, Kanagawa

375

Hanakotoba Odawara

Odawara-shi, Kanagawa

880

Verde Minowa

Takasaki-shi, Gunma

1,620

Verde Hotaka

Kawaba-mura, Tone-gun,
Gunma

1,290

Sunny Life Kita-Shinagawa

Shinagawa-ku, Tokyo

1,825

SHIP Senri Building

Toyonaka-shi, Osaka

12,920Total (8 properties)-

22,691(million yen)(Note)

Date of acquisition

February 1, 2019-

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

b. Issuance of New Investment Units
Based on the resolutions at the board of directors’ meetings held on January 11, 2019 and January 22, 2019, HCM issued
new investment units (112,280 units) by public placement in order to partially fund the acquisition of the Assets
Acquired in the 9th fiscal period and issued new investment units (5,614 units) by third-party allotment with SMBC Nikko
Securities Inc. as an allotted party for the purpose of repaying loans or partially funding acquisition of specified assets
with cash on hand in the future. New investment units issued by public offering and by third-party allotment were paidin on February 1, 2019 and on February 27, 2019, respectively, and the amount paid-in came to 12,680 million yen. As
a result, HCM’s unitholders’ capital stands at 32,480 million yen and the total number of investment units issued andoutstanding stands at 311,001 units.
Issuance of new investment units by public offering
Number of new investment units issued: 112,280 units
issue price (offer price)
Total issuing price (offer price): 111,442 yen per unit
: 12,512,707,760 yen

Paid-in amount (issue value)amount paid-in (issue value): 107,555 yen per unit
: 12,076,275,400 yen

Payment day: February 1, 2019 (Friday)

Issuance of new investment units by third-party allotment
Number of new investment units issued: 5,614 units
Paid-in amount (issuing value)
Total paid-in amount (issuing value): 107,555 yen per unit
: 603,813,770 yen

Due date of payment
Allotted party: February 27, 2019 (Wednesday): SMBC Nikko Securities Inc.

-8-

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
c. Borrowing of Funds
HCM implemented the following borrowings to partially fund the acquisition of the Assets Acquired in the 9th fiscal
period and related expenses, as well as to carry out early repayment of existing loans.
LenderLoanamount(million yen)Interest rate
(Note 1)

Drawdown
date

Repayment
date

Repayment method

Security

Lump-sum
repayment on
principal repayment
date

Unsecured
andunguaranteed--

Nippon Life
Insurance Company
The Hiroshima Bank,
Ltd.

0.45353%
2,000

The Dai-ichi Life
Insurance Company
LimitedJanuary 31,
2022(Fixed interest
rate)

Sumitomo Mitsui
Trust Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Resona Bank, Ltd.
The Nishi-Nippon
City Bank, Ltd.

4,000

0.41988%

January 31,
2023(Note 2)

Shinkin Central Bank
The Bank ofFukuoka, Ltd.

February 1,
2019

The Gunma Bank,
Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Trust Bank, Ltd.
Resona Bank, Ltd.
The Nishi-Nippon
City Bank, Ltd.

5,750

Shinkin Central Bank

0.53900%

January 31,
2024(Note 2)The Bank ofFukuoka, Ltd.
The Gunma Bank,Ltd.
The 77 Bank, Ltd.
Total

11,750---(Note 1) Loan fees and other fees to be paid to the lenders are not included.
(Note 2) Interest rate swap agreements have been concluded and the indicated interest rates are those substantively fixed by the agreements.

(d) Earnings Forecast Outlook
The following earnings forecast is expected for the fiscal period ending July 2019 (from February 1, 2019 to July 31, 2019)
and the fiscal period ending January 2020 (from August 1, 2019 to January 31, 2020). For the assumptions underlying
this outlook, please see “Assumptions Underlying Earnings Forecast for Fiscal Period Ending July 2019 and Fiscal PeriodEnding January 2020” below.
For the fiscal period ending July 2019 (from February 1, 2019 to July 31, 2019) and the fiscal period ending January 2020
(from August 1, 2019 to January 31, 2020, it is assumed that there is no change in the fair value of interest rate swaps,
and of distribution in excess of earnings, that from reserve for temporary difference adjustments is not expected.

-9-This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Fiscal period ending July 2019 (from February 1, 2019 to July 31, 2019)
Operating revenue
Operating income

2,006 million yen
1,178 million yen

Ordinary income
Net income

1,018 million yen
1,017 million yen

Distribution per unit
(excluding distribution

3,270 yeninexcessofearnings)
Distribution in excess of earnings per unit

285 yenDistribution per unit
(including distribution in excess of earnings)

3,555 yen

Fiscal period ending January 2020 (from August 1, 2019 to January 31, 2020)
Operating revenue
Operating income

2,006 million yen
1,101 million yen

Ordinary income
Net income

939 million yen
938 million yen

Distribution per unit
(excluding distribution

3,017 yeninexcessofearnings)
Distribution in excess of earnings per unit
Distribution per unit
(including distribution in excess of earnings)

285 yen3,302 yen

(Note) As to the forecast figures above, actual operating revenue, operating income, ordinary income, net income, distribution per unit
(excluding distribution in excess of earnings), distribution in excess of earnings per unit and distribution per unit (including
distribution in excess of earnings) may differ as a result of discrepancies from assumptions arising due to additional acquisitionor sale of real estate, etc., change in the real estate market, etc., fluctuation of interest rates, changes in other situations
surrounding HCM in the future and other factors. In addition, the forecast is not a guarantee of the amount of distribution or
distribution in excess of earnings.

- 10 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Assumptions Underlying Earnings Forecast for Fiscal Period Ending July 2019 and Fiscal Period Ending January 2020
Item

Assumptions
・Fiscal period ending July 2019 (9th fiscal period): from February 1, 2019 to July 31, 2019 (181 days)
Accounting period・Fiscal period ending January 2020 (10th fiscal period): from August 1, 2019 to January 31, 2020 (184 days)
・It is assumed that there will be no changes (acquisition of new properties, sale of the assets undermanagement, etc.) in the trust beneficiary interests in real estate (35 properties in total) owned by
Assets under
HCM as of the date of this document (hereinafter, the “Assets Under Management”) through to the
management
end of the fiscal period ending January 2020.
・There may actually be changes due to acquisition of new properties , or sale of the Assets Under
Management, etc. in the future.
・Lease business revenue from the Assets Under Management is calculated by considering and analyzing
Operatingthe lease agreement of each Asset Under Management effective as of the date of this document,
revenuetenants and market condition, etc.
・For operating revenue, it is assumed that there will be no default or non-payment of rents by tenants.
・The main breakdown of rental business expenses, the major component of operating expense, is as follows.
Fiscal period ending July Fiscal period ending January 2020
2019
Property tax
90 million yen
90 million yen
Repair expenses
18 million yen
19 million yen
Depreciation
440 million yen
442 million yen
Other expenses related to 45 million yen
46 million yen
rent business・Out of rental business expenses, the major component of operating expense, expenses other thandepreciation is calculated based on the past figures reflecting factors for change in expenses.
・In purchasing and selling real estate in general, real property tax and urban planning tax are calculated byOperatingperiod distribution with previous owners and settled at the time of acquisition, but as HCM incudes thisexpensessettlement money in acquisition cost, they are not recoded as expenses in the year of acquisition.
Accordingly, real property tax and urban planning tax of the Assets Acquired in the 9th fiscal period will
not be recorded as expenses in the fiscal period ending July 2019 and the fiscal period ending January
2020, and such for fiscal 2020 will be recorded as expenses from the fiscal period ending July 2020.
Moreover, the total amount of real property tax and urban planning tax to be included in theacquisition cost of the Assets Acquired in the 9th fiscal period is 90 million yen.
・For repair expenses, the Asset Management Company records the expenses ,it deems necessary foreach property in each period. However, as repair expenses may increase or additional repair may berequired due to unpredictable factors, actual expanses may differ significantly from the forecast.
・Depreciation is calculated by using the straight-line method including ancillary expenses.
・The asset management fee paid to the Asset Management Company is assumed to be 142 million yen
for the fiscal period ending July 2019 and 200 million yen for the fiscal period ending January 2020.
・ Investment unit issuance expenses accompanying the issuance of new investment units are
depreciated evenly over 3 years and are assumed to be 10 million yen for the fiscal period ending July
Non-operating2019 and 10 million yen for the fiscal period ending January 2020.
expenses・Interest expenses and other borrowing related expenses are assumed to be 148 million yen for the
fiscal period ending July 2019 and 151 million yen for the fiscal period ending January 2020.
・As of the date of the document, HCM has a balance of loans outstanding of 32,450 million yen. It is
assumed that there will be no change in the balance of loans outstanding at the end of the fiscal periodLoans
ending July 2019 and the fiscal period ending January 2020 after the refinancing of 7,700 million yen ofloans due for repayment on January 31, 2020.
・The assumption is the total number of investment units issued and outstanding as of the date of thisdocument, which is 311,001 units. And the assumption is that there will be no change in the number ofinvestment units due to issuance of new investment units, etc. through to the end of the fiscal period
Investment units
ending January 2020.
・Distribution per unit is calculated based on the forecasted number of units issued and outstanding at
the end of period of 311,001 units for the fiscal period ending July 2019 and for the fiscal period ending
January 2020, respectfully.
・Distribution per unit (excluding distribution in excess of earnings) is calculated with the assumption being
Distribution per unit
the cash distribution policy provided in the Articles of Incorporation of HCM.
(excluding distribution ・Distribution per unit (excluding distribution in excess of earnings) may vary due to various factors,
including fluctuation in rent revenue accompanying change in Assets Under Management, change inin excess of earnings)
tenants, etc. or incurrence of unexpected repairs.
・Distribution in excess of earnings per unit is calculated pursuant to the policies provided in the Articles
of Incorporation of HCM, policies provided below, other applicable laws and regulations, rules of selfregulatory organizations, etc. The total amount of distribution in excess of earnings is assumed to be 88
million yen for the fiscal period ending July 2019 and the fiscal period ending January 2020,
Distribution in excess ofrespectively.
earnings per unit
・The total amount of distribution in excess of earnings is distributed up to the amount equivalent to
20/100 of the depreciation recorded in the accounting period immediately before the accounting
period when HCM will pay the said distribution, sufficiently taking into consideration the amount of
capital expenditure necessary for maintaining and improving the competitiveness of HCM’s Assets
Under Management and the financial position of HCM.
- 11 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Item
Assumptions
・However, distribution in excess of earnings may be conducted up to an amount lower than the above
amount or may not be conducted when the implementation of distribution in excess of earnings up to
the said amount is judged to be inappropriate based on the economic environment surrounding HCM,
trends of the real estate market and leasing market, status of HCM’s Assets Under Management andfinancial conditions.
・For the fiscal period ending July 2019 and the fiscal period ending January 2020, the assumption is that
there is no change in the fair value of interest rate swaps, and of distribution in excess of earnings, thatfrom reserve for temporary difference adjustments is not expected.
・The assumption is that there will be no revision of laws and regulations, tax systems, accounting
standards, securities listing regulations, rules of The Investment Trusts Association, Japan, etc. that will
Other
impact the forecast figures above.
・The assumption is that there will be no unforeseen serious change in general economic trends, realestate market conditions, etc.
(3) Investment Risks
Disclosure is omitted as there is no significant change from “Investment Risks” in the securities registration statement(submitted on January 11, 2019).

- 12 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

3.

Financial Statements(1) Balance Sheet(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2018)

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

Current fiscal period(As of Jan. 31, 2019)

1,018,147
44,70875,524
1,138,381

22,637,736(1,649,802)
20,987,933
74,248(4,834)
69,414
11,556(1,416)
10,13932,858(3,513)29,34420,052,662－
41,149,494- 13 -

1,318,873
108,051
73,3551,500,281*1

23,545,014(1,960,490)
21,584,524
76,898(5,927)70,97013,456(2,010)11,446
40,623(6,577)34,04621,009,170
4,594
42,714,752

4,574
4,574

3,465
3,465

10,000120,867455－
131,323
41,285,392

10,00089,220－16
99,23742,817,455

14,947
14,94742,438,720

9,964
9,964
44,327,701

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2018)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Deferred tax liabilities
Derivatives liabilities
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 14 -

Current fiscal period(As of Jan. 31, 2019)18,5571,000,000－
21,163
141,850857
9,798
204,95372
1,397,253

40,8682,750,000
6,700,000
88,452
145,439
950
5,243
211,457283
9,942,694

19,700,000
1,009,999
9,104
131
－
20,719,235
22,116,488

13,000,000
1,009,999
34,604－25,76914,070,373
24,013,068

19,800,696

19,800,696

521,223
521,223
20,321,920

539,706
539,706
20,340,403

312
312
*2
20,322,232
42,438,720(25,769)(25,769)*2
20,314,633
44,327,701

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(2) Statement of Income(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018
Operating revenue
Lease business revenue
Other lease business revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations
Property tax
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Insurance income
Interest on refund of consumption taxes and other
Reversal of distribution payable
Total non-operating income
Non-operating expenses
Interest expenses
Investment unit issuance expenses
Borrowing expenses
Total non-operating expenses
Ordinary income
Extraordinary income
Subsidy income
Total extraordinary income
Extraordinary losses
Loss on tax purpose reduction entry of non-current assets
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)*1

1,260,324*1
6,948
1,267,273*1- 15 -

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019441,644
119,445
2,118
15,4063,000
15,942
44,578642,135
625,137*1

1,294,178*1
7,031
1,301,210*1

448,967
122,274
2,164
15,4823,000
16,88645,433654,208
647,002

7
3,397
79
－
3,484

3
－
－
533
537

61,4495,903
39,266
106,619522,001

65,046
4,982
36,885
106,914
540,625

－
－

*2

－
－
522,001
858
2
860
521,14182
521,223

*3

6,489
6,489

6,489
6,489
540,625950(4)
946
539,67827
539,706

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(3) Statement of Unitholders’ Equity
Previous fiscal period (from February 1, 2018 to July 31, 2018)(Unit: thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginningof current period
Changes of items
during period

Unappropriatedretained earnings(undisposed loss)

Total
surplusDeferred
gains orlosses onhedgesTotalvaluation andtranslation
adjustments

512,395

20,313,091

Dividends of surplus(512,312)(512,312)(512,312)(512,312)

Net income

521,141

521,141

521,141

521,141-*1

19,800,696

-

-

Total
net assets

512,395

Changes of items
other thanunitholders’ equity
during the period,net
Total changes of items
during the period
Balance at the end ofcurrent period

19,800,696

Total
unitholders’equity20,313,091

312

312

312

8,828

8,828

8,828

312

312

9,140

521,223

521,223

20,321,920

312

312

20,322,232

Current fiscal period (from August 1, 2018 to January 31, 2019)(Unit: thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unitholders’capitalBalance at beginningof current period
Changes of items
during period

Unappropriatedretained earnings(undisposed loss)

Deferred
gains orlosses onhedgesTotalvaluation andtranslation
adjustments

312

312

Total
net assets

521,223

521,223

20,321,920

Dividends of surplus(521,195)(521,195)(521,195)(521,195)

Net income

539,678

539,678

539,678

539,678

Changes of items
other thanunitholders’ equity
during period, net
Total changes of items
during the period
Balance at end ofcurrent the period

19,800,696

Total
surplusTotal
unitholders’equity*1

20,322,232(26,081)(26,081)(26,081)-

18,48318,48318,483(26,081)(26,081)(7,598)19,800,696

539,706

539,706

20,340,403(25,769)(25,769)

20,314,633- 16 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(4) Statement of Cash Distributions(Unit: yen)Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019

Unappropriated retained earnings

521,223,376

539,706,448

II. Distribution in excess of earnings-

88,636,113-

25,683,231-

62,952,882

III. Amount of distributions

521,195,793

602,493,840[distributions per unit][2,699][3,120]I.

Of which, reserve for temporary difference
adjustments
Of which, other deduction from unitholders’capital521,195,793

513,857,727(Of which, distributions of earnings per unit)[2,699][2,661]

Of which, reserve for temporary difference-

25,683,231

-

[133]

-

62,952,882

-

[326]

27,58325,848,721

Of which, distributions of earnings

adjustments(Of which, distributions in excess of earnings
per unit (of reserve for temporary difference
adjustments))
Of which, other distributions in excess ofearnings(Of which, distributions in excess of earnings
per units (of other distributions in excess ofearnings))
IV. Retained earnings carried forward

Method of calculation of amount of distributions

In accordance with the cash
distribution policy described in
Article 36, Paragraph 1 of its Articles
of Incorporation, HCM determinesthat the amount of distribution shallexceed the amount equivalent to
90% of its distributable profit as
stipulated in Article 67-15 of the Act
on Special Measures Concerning
Taxation, and shall be up to its profits
as the maximum amount. Following
this policy, HCM has decided that itshall distribute 521,195,793yen,
which is the maximum integral
multiple to 193,107 units issued andoutstanding as the distribution of
earnings. HCM has decided not tomake cash distribution in excess ofearnings defined in Article 36,
Paragraph 2 of HCM’s Articles ofIncorporation.

- 17 -In accordance with the cash
distribution policy described in
Article 36, Paragraph 1 of its Articles
of Incorporation, HCM determinesthat the amount of distribution shallexceed the amount equivalent to
90% of its distributable profit as
stipulated in Article 67-15 of the Act
on Special Measures Concerning
Taxation, and shall be up to its profits
as the maximum amount. Following
this policy, HCM has decided to
distribute 513,857,727yen, which is
the maximum integral multiple to193,107 units issued and outstanding
as the distribution of earnings, notexceeding the amount obtained after
deducting the reversal of reserve fortemporary difference adjustments(as defined in Article 2, Paragraph 2,
Item (30) of the Ordinance on
Accountingsof
Investment
Corporations) from unappropriatedretainedearnings.
Accordingly,
distribution per unit for the period
was 2,661 yen.
In addition, HCM is to make
distribution in excess of earnings, ofwhich amount is to be determined byThis translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
HCM as an amount equivalent to net
asset deduction items (as defined in
Article 2, Paragraph 2, Item (30) (b) of
the Ordinance on Accountings ofInvestment
Corporations),
considering the impact of net asset
deduction items on distribution,
pursuant to the policy for cash
distribution in excess of earnings
provided in Article 36, Paragraph 2 of
its Articles of Incorporation. During
the current fiscal period, sincedeferred losses on hedges of 25
million yen was recorded as net asset
deduction items, HCM decided tomake distribution of reserve fortemporary difference adjustments inthe amount of 25,683,231 yen. As aresult, distribution in excess ofearnings per unit (of reserve fortemporary difference adjustments)
Method of calculation of amount of distributions
came to 133 yen.
Furthermore, in accordance with thepolicy for cash distribution in excess ofearnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation, HCM is to conduct
distribution in excess of earnings(return of capital that falls under the
category of distribution reducing
unitholders’ capital for tax purpose) in
each period on a continuous basis.
During the current fiscal period, HCM
has decided to distribute 62,952,882
yen, an amount roughly equivalent to
20% of depreciation recorded in thecurrent fiscal period, as distribution inexcess of earnings. As a result,distribution in excess of earnings perunit (of other distribution in excess ofearnings) came to 326 yen.
(Note 1) Distribution in excess of earnings is distributed up to the amount equivalent to 20/100 of the depreciation recordedin the accounting period immediately before the period when HCM will pay this distribution, sufficiently taking into
consideration the amount of capital expenditure necessary for maintaining and improving the competitiveness of
HCM’s Assets Under Management and the financial position of HCM.
However, distribution in excess of earnings may be conducted up to an amount lower than the above amount or
may not be conducted when the implementation of distribution in excess of earnings up to this amount is judged to
be inappropriate based on the economic environment surrounding HCM, trends of the real estate market andleasing market, status of HCM’s Assets Under Management and financial conditions.
(Note 2) Under the rules of The Investment Trusts Association, closed-end investment corporations are allowed to conduct
distribution in excess of earnings up to an amount equivalent to 60/100 of the depreciation recorded on the last dayof the accounting period.

- 18 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(5) Statement of Cash Flows(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018
Cash flows from operating activities
Income before income taxes
Depreciation
Loss on tax purpose reduction entry of non-current assets
Borrowing related expenses
Investment unit issuance expenses
Interest income
Interest on refund
Interest expenses
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Increase (decrease) in Long-term advances received
Increase (decrease) in deposits received
Other, net
SubtotalInterest income received
Interest on refund received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Payments of tenant leasehold and security deposits in trust
Net cash provided by(used in)investing activities
Cash flows from financing activities
Payments for restricted deposits in trust
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Borrowing related expenses
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 19 -

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019

522,001
309,062－
39,266
5,903
(7)
(79)
61,449101,055(4,318)(4,296)
3,624
9,798(1,389)
1,533
(50)
－
－
1,043,552
7
79(62,222)(900)
980,516

540,625
316,547
6,489
36,8854,982(3)－65,046－
3,660
22,310(5,844)(4,554)
3,260
6,503
－
210
(533)
995,5853－(64,718)(857)
930,013(54,656)－(54,656)(1,813,752)
25,500(1,788,252)－
1,000,000(1,000,000)
7,000,000(7,000,000)(89,218)(511,422)(600,641)
325,218
737,638*1
1,062,856(25,500)
2,750,000(1,000,000)－－(6,730)(520,961)
1,196,808
338,568
1,062,856*1
1,401,425

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(6) Notes on the Going Concern Assumption
Not applicable.
(7) Notes on Matters Concerning Significant Accounting Policies
1. Method of depreciation of (1) Property, plant and equipment
non-current assets
The straight-line method is adopted.
The useful life of principal property, plant and equipment is as follows:
Buildings in trust
6-69 years
Structures in trust
10-53 years
Machine and device in trust
10 years
Tools, furniture and fixtures in trust 6-15 years(2) Intangible assets
The straight-line method is adopted.
2. Accounting for deferred
Investment unit issuance expenses
assetsDepreciated evenly over 3 years.
3. Standards for
Accounting for fixed asset tax, etc.
revenue and expense
For fixed asset tax, city planning tax, depreciable asset tax, etc. on real estate, etc.
owned, the accounting is that, of the tax amount assessed and determined, therecognition
amount corresponding to the concerned accounting period is expensed as expenses
related to rent business.
In connection with the acquisition of real estate including trust beneficiary interests inreal estate, the amount equivalent to real property tax, etc. for the initial fiscal year,
which was settled with the seller, is not recorded as expenses but included in the costof acquisition of the concerned real estate, etc. There was no amount equivalent toreal property tax, etc. included in the cost of acquisition of real estate, etc. for theprevious fiscal period, and the amount was 1,558 thousand yen for the current fiscal
period.
4. Method of Hedge(1) Hedge accounting approach
Accounting
Deferred hedge accounting. Special treatment is applied for interest rate swap
transactions that satisfy the requirements for special treatment.
(2) Hedging instruments and hedge items
Hedging instruments: Interest rate swap transaction
Hedge items: Interest on loans(3) Hedging policy
HCM conducts interest rate swap transactions for hedging risks provided in the
Articles of Incorporation of HCM, pursuant to the risk management basic policy.
(4) Method of assessing hedge effectivenessHedge effectiveness is assessed by comparing the cumulative fluctuation of cash
flows for hedging instruments and the cumulative fluctuation of cash flows forhedge items and confirming the ratio of both fluctuations. However, theassessment of hedge effectiveness for interest rate swap transactions that satisfy
the requirements for special treatment is omitted.
5. Cash and cash
Cash and cash equivalents in the statement of cash flows comprise cash on hand andequivalentsas stated in the cash in trust, demand deposits and deposits in trust, and short-term investments withstatement of cash flows
a maturity of three months or less from the date of acquisition that are readily
convertible to cash and that are subject to an insignificant risk of changes in value.
6.

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

- 20 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(8) Notes on Changes in Presentation or Classification[Change in Line with Application of “Partial Amendments to ‘Accounting Standard for Tax Effect Accounting’”]
By applying “Partial Amendments to ‘Accounting Standard for Tax Effect Accounting’” (ASBJ Statement No. 28, February 16,2018) from the beginning of the current fiscal period, presentation method is changed to classifying deferred tax assets underinvestments and other assets and deferred tax liabilities under non-current liabilities.
As the result, deferred tax assets under current assets (12 thousand yen) in the balance sheet for the previous fiscal period is
included in deferred tax liabilities under non-current liabilities (131 thousand yen) in that for the current fiscal period.
[Additional Information][Notes on Reserve and Reversal of Reserve for Temporary Difference Adjustments]
Previous fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.
Current fiscal period (from August 1, 2018 to January 31, 2019)
1. Reasons, related assets and amounts of reserve
Due to arising of deferred losses on hedges (net asset deduction items) at the end of the fiscal year under review fromassessment of fair value of interest rate swap transactions to which hedge accounting is applied, 25,683 thousand yen of reserve
for temporary difference adjustments is recorded.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of reserve for temporary difference
adjustments will be reversed(9) Notes on Financial Statements[Notes on Balance Sheet]*1 Reduction entry amount of property, plant and equipment received as governmental subsidy, etc.
(Unit: thousands of yen)

Buildings in trust

Current fiscal period(As of Jul. 31, 2018)

Previous fiscal period(As of Jan. 31, 2019)

-

6,489

*2 Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations(Unit: thousands of yen)- 21 -

Previous fiscal period(As of Jul. 31, 2018)

Current fiscal period(As of Jan. 31, 2019)50,00050,000This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
[Notes on Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019

A. Operating revenue from real estate leasing
Revenue related to rent business
Rent revenue
Other revenue related to rent business
Other revenue
Total operating revenue from real estate leasing

1,260,324

1,294,178

6,948

7,031

1,267,273

1,301,210

B. Operating expenses from real estate leasing
Expenses related to rent business
Property tax

87,22487,213

Outsourcing expenses
Repair expenses

17,55015,504

18,35013,757

Insurance expenses
Depreciation

3,306
307,953

3,565
315,438

10,104

10,643

Total operating expenses from real estate leasing

Other expenses related to rent business

441,644448,967

C. Operating income (loss) from real estate leasing [A-B]

825,628852,242*2 Breakdown of Subsidy income
Previous fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.
Current fiscal period (from August 1, 2018 to January 31, 2019)
Subsidy income is from Subsidies for countermeasures to control carbon dioxide emissions project etc. in FY2018.
*3 Loss on reduction of non-current assets is the value directly deducted from acquired value, due to the acceptance ofsubsidies. The breakdown is as follows.
(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2018)
Buildings in trust

Current fiscal period(As of Jan. 31, 2019)
-

6,489

[Notes on Statement of Unitholders’ Equity]*1 Total number of investment units authorized and total number of investment units issued and outstanding
Previous fiscal period
Current fiscal period
From: Feb. 1, 2018
From: Aug. 1, 2018
To: Jul. 31, 2018
To: Jan. 31, 2019
Total number of investment units authorized
Total number of investment units issued and outstanding- 22 -

10,000,000 units

10,000,000 units

193,107 units

193,107 units

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
[Notes on Statement of Cash Flows]*1 Reconciliation of cash and cash equivalents at end of period to the amount of balance sheet items(Unit: thousands of yen)

Cash and deposits
Cash and deposits in trust
Restricted deposits in trust (Note)
Cash and cash equivalents

Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019

1,018,147
44,7081,318,873
108,051-(25,500)

1,062,856

1,401,425(Note) Restricted deposits in trust refer to deposits in trust reserved for refund of leasehold received from tenants, etc.
[Notes on Operating Leases Transactions]Non-cancellable operating leases (as lessor)(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2018

Current fiscal period
As of Jan. 31, 2019

Not later than 1 year
Later than 1 year

2,142,929
14,286,257

2,242,742
13,499,806

Total

16,429,186

15,742,548[Notes on Financial Instruments]
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
Pursuant to the policy of conducting stable and sound financial management, HCM raises funds for asset acquisition,
repayment of loans, etc. by means of loans from banks or issuance of new investment units, etc. As to finance by loans,
HCM pays attention to extending loan periods, fixing interest rates, diversifying repayment dates and such to secure
financial stability and avoid a risk of interest rate rise in the future.
Derivative transactions shall be limited to those invested for the purpose of hedging the risk of fluctuations in interest
rates on loans, etc. and other risks.
(2) Description of financial instruments and associated risks, and risk management system
Loans are used primarily for acquisition of trust beneficiary interests in real estate.
Although loans are exposed to liquidity risks on the repayment date, impact of the market interest rate rise on the
management of HCM is limited by appropriately managing the ratio of interest-bearing liabilities, and such risks arecontrolled by diversifying repayment dates.
Although loans with floating interest rates are exposed to interest rate fluctuation risks, the ratios of loan balanceswith floating rates and fixed rates against the entire loans are adjusted according to the financing environment.
Furthermore, derivative transactions (interest rate swap transactions) have been used for part of loans with floating
rates to avoid interest fluctuation risks and to fix interest payment. Execution/management of derivative transactions
carried out for the purpose of hedging interest rate fluctuation risks is conducted pursuant to provisions that stipulate
the basic policy of risk management.
Although tenant leasehold and security deposits are deposits from tenants and are exposed to liquidity risks at thetime of refunding upon tenants’ move-outs, HCM controls liquidity risks by maintaining liquidity at hand, etc.
For deposits, such risks are controlled by setting lower limit to the credit rating of financial institutions at which
deposits are made (excluding deposits for settlement), etc.
(3) Supplementary explanation to matters concerning fair value, etc. of financial instruments
The fair value of financial instruments, aside from values based on market price, includes values based on reasonablecalculation when no market price is available. Certain assumptions are adopted in the calculation of the concernedvalues. Accordingly, there may be cases where the concerned values will differ when different assumptions are
adopted.

- 23 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
2.

Matters concerning fair value, etc. of financial instruments
Carrying amount, fair value and difference between the two were as follows. The financial instruments whose fair values
are deemed extremely difficult to determine are excluded from the table below. (Please refer to (Note 2).)Previous fiscal period (from February 1, 2018 to July 31, 2018)(Unit: thousands of yen)
Carrying amount(1) Cash and deposits

1,018,147(2) Cash and deposits in trust
Total assets(3) Short-term loans payable

Total liabilities

1,018,147-

44,70844,708-1,062,856

1,062,856-

1,000,000

1,000,000

-

-

-

-

19,700,000

19,669,884(30,115)

20,700,000

20,669,884(30,115)

455

455

-

(4) Current portion of long-term loans payable(5) Long-term loans payable

Amount ofdifference

Fair value(6) Derivatives transaction
Current fiscal period (from August 1, 2018 to January 31, 2019)(Unit: thousands of yen)
Carrying amount(1) Cash and deposits(2) Cash and deposits in trust
Total assets

Fair value

Amount ofdifference

1,318,873

1,318,873-

108,051

108,051-

1,426,925

1,426,925-(3) Short-term loans payable

2,750,000

2,750,000-(4) Current portion of long-term loans payable

6,700,000

6,698,637(1,362)(5) Long-term loans payable

13,000,000

12,999,936(63)

22,450,000

22,448,573(1,426)(25,769)(25,769)

Total liabilities(6) Derivatives transaction-(Note 1) Method of calculation of the fair value of financial instruments and matters concerning derivative transactions(1) Cash and deposits; (2) Cash and deposits in trust; (3) Short-term loans payable
Because these are settled in a short period of time, the fair value is approximately the same as the book value and thus stated at thatbook value.
(4) Current portion of long-term loans payable; (5) Long-term loans payable
For those with floating interest rates that reflect market interest rates within a short period of time, the book value is deemed areasonable approximation of the fair value as there are no significant changes in HCM’s credit standing after borrowing; therefore, thebook value is used as the fair value equivalent. Those with fixed interest rates are calculated by discounting the sum of principal andinterest (*) at a reasonable rate estimated for a similar loan that is made corresponding to the remaining period.
(*) For long-term loans with floating interest rate to which special treatment for interest rate swaps is applied (please refer to “Derivative
Transactions” below), the sum of principal and interest under the interest rates after the interest rate swaps are indicated.
(6) Derivative transactions
Please refer to “Notes on Derivative Transactions” below.
(Note 2) Financial instruments for which estimation of fair value is recognized to be difficult.
(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2018)
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust

Current fiscal period(As of Jan. 31, 2019)

1,009,999

1,009,999

9,104

34,604

Tenant leasehold and security deposits and Tenant leasehold and security deposits in trust are not subject to valuation at fair value, because areasonable estimation of cash flows is recognized to be extremely difficult due to there being no market price and difficulty of calculating the actual
deposit period from when lessees move in to when they move out.

- 24 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Note 3) Amount of redemption of monetary claims scheduled to be due after the account closing datePrevious fiscal period (As of July 31, 2018)(Unit: thousands of yen)
Not later than 1 year
Cash and deposits

1,018,147

Cash and deposits in trust

44,708

Total

1,062,856

Current fiscal period (As of January 31, 2019)(Unit: thousands of yen)
Not later than 1 year
Cash and deposits

1,318,873

Cash and deposits in trust

108,051

Total

1,426,925(Note 4) Amount of repayment of loans scheduled to be due after the account closing datePrevious fiscal period (As of July 31, 2018)(Unit: thousands of yen)
Later than 4 years
and not
Later than 5 years
later than 5 years

Not later than 1 year

Later than 1 year
and not
later than 2 years

Later than 2 years
and not
later than 3 years

Later than 3 years
and not
later than 4 years

Short-termloans payable

1,000,000

-

-

-

-

-

Long-termloans payable-

6,700,000

3,000,000

5,000,000

4,000,000

1,000,000

1,000,000

6,700,000

3,000,000

5,000,000

4,000,000

1,000,000

Not later than 1 year

Later than 1 year
and not
later than 2 years

Later than 2 years
and not
later than 3 years

Later than 3 years
and not
later than 4 years

Short-termloans payable

2,750,000

-

-

-

-

Long-termloans payable

6,700,000

3,000,000

5,000,000

4,000,000

1,000,000

Total

9,450,000

3,000,000

5,000,000

4,000,000

1,000,000

Total

Current fiscal period (As of January 31, 2019)[Notes on Securities]
Previous fiscal period (As of July 31, 2018)
Not applicable.
Current fiscal period (As of January 31, 2019)
Not applicable.
[Notes on Derivative Transactions]1.

Derivative transactions to which hedge accounting is not applied
Previous fiscal period (As of July 31, 2018)
Not applicable.
Current fiscal period (As of January 31, 2019)
Not applicable.

- 25 -(Unit: thousands of yen)
Later than 4 years
and not
Later than 5 years
later than 5 years-

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
2.

Derivative transactions to which hedge accounting is applied
Previous fiscal period (As of July 31, 2018)(Unit: thousands of yen)Hedge
accounting
approachPrinciple
accounting
methodType, etc. of
derivativetransaction
Interest rate swap
transaction
Floating receivable;
fixed payable

Specialtreatment forinterest rate
swaps

Interest rate swap
transaction
Floating receivable;
fixed payable
Total

Main hedged
item

Contract amount, etc.
Due after one year

Fair value

Calculation
method forthe fair value

Long-term loans
payable4,000,000

4,000,000

455

Based on theprice presented
bycorrespondent
financial
institutions

Long-term loans
payable1,000,000

1,000,000(Note)-

5,000,000
5,000,000
455(Note) Since those with special treatment of interest rate swaps are treated integrally with hedged long-term loans payable, the market values ofsuch are shown as included in the market value in “(4) Current portion of long-term loans payable and (5) Long-term loans payable” in“[Notes on Financial Instruments], 2. Matters concerning fair value, etc. of financial instrument” above.

Current fiscal period (As of January 31, 2019)(Unit: thousands of yen)Hedge
accounting
approachPrinciple
accounting
methodType, etc. of
derivativetransaction
Interest rate swap
transaction
Floating receivable;
fixed payable

Specialtreatment forinterest rate
swaps

Interest rate swap
transaction
Floating receivable;
fixed payable
Total(Note 1)
(Note 2)Main hedged
item

Contract amount, etc.
Due after one year

Fair value

Calculation
method forthe fair value

Long-term loans
payable13,750,000

13,750,000(25,769)(Note 1)

Based on theprice presented
bycorrespondent
financial
institutions

Long-term loans
payable1,000,000

1,000,000(Note 2)-

14,750,000
14,750,000(25,769)
The figure includes the fair value of the interest rate swap contracts concluded on January 30, 2019 (total principal: 9,750,000
thousand yen, contract term: from February 1, 2019 to the repayment date of loans).
Since those with special treatment of interest rate swaps are treated integrally with hedged long-term loans payable, the market
values of such are shown as included in the market value in “(5) Long-term loans payable” in “[Notes on Financial Instruments], 2.
Matters concerning fair value, etc. of financial instrument” above.

[Notes on Retirement Benefits]
Previous fiscal period (As of July 31, 2018)
Not applicable.
Current fiscal period (As of January 31, 2019)
Not applicable.

- 26 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
[Notes on Tax-Effect Accounting]
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2018

Current fiscal period
As of Jan. 31, 2019

Deferred tax assets
Non-deductible accrued enterprise tax

12

16

-

8,119

Subtotal deferred tax assets
Valuation allowance

12
-

8,136
(8,119)Total deferred tax assets
Deferred tax liabilities

12

16

143

-

143
(131)

16

Deferred gains or losses on hedges

Deferred gains or losses on hedges
Total deferred tax liabilities
Net deferred tax assets
2.

Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate after application of tax-effect accounting(Unit: %)Previous fiscal period
As of Jul. 31, 2018
Statutory tax rate
[Adjustments]
Deductible distributions payable
Other
Effective income tax rate
after application of tax-effect accounting[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method, etc.]
Previous fiscal period (As of July 31, 2018)
Not applicable.
Current fiscal period (As of January 31, 2020)
Not applicable.
[Notes on Related-Party Transactions]
1.

Parent company, major corporate unitholder, etc.
Previous fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.
Current fiscal period (from August 1, 2018 to January 31, 2019)
Not applicable.

2.

Affiliated company, etc.
Previous fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.
Current fiscal period (from August 1, 2018 to January 31, 2019)
Not applicable.

3.

Fellow subsidiary, etc.
Previous fiscal period (from February 1, 2018 to July 31, 2018)
Not applicable.
Current fiscal period (from August 1, 2018 to January 31, 2019)
Not applicable.
- 27 -

Current fiscal period
As of Jan. 31, 2019

31.74

31.51

(31.69)0.11(31.45)
0.12

0.16

0.18

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
4.

Director, major individual unitholder, etc.
Previous fiscal period (from February 1, 2018 to July 31, 2018)

Capital stock
Relationship
Percentage
Transaction
Name ofor
Description of of voting
Concurrent
amountinvestments
company,
Description ofrights, etc. holding ofbusiness orClassification
Address
Business(thousandin capitaltransaction
etc. orheld by (in) director’s relationshipoccupation
yen)(thousandpersonHCM (%) position, etc.
yen)

Director, or
close
relative of
director

Seiji
Yoshioka--

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

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

119,445(Note)

Balance at
end ofAccount
perioditem(thousandyen)

Accruedexpenses

129,000

Of the amounts above, the transaction amount does not include consumption tax.

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

Current fiscal period (from August 1, 2018 to January 31, 2019)
Capital stock
Relationship
Percentage
Transaction
Name ofor
Description of of voting
Concurrent
amountinvestments
company,
Description ofrights, etc. holding ofbusiness orClassification
Address
Business(thousandin capitaltransaction
etc. orheld by (in) director’s relationshipoccupation
yen)(thousandpersonHCM (%) position, etc.
yen)

Director, or
close
relative of
director

Seiji
Yoshioka--

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

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

Of the amounts above, the transaction amount does not include consumption tax.

130,704(Note 1)
(Note 2)

Balance at
end ofAccount
perioditem(thousandyen)

Accruedexpenses

132,056(Note 1) The transaction amount for the payment of asset management fee to the Asset Management Company under “Description of transaction”
includes the property acquisition incentive portion included in the book value of individual real estate, etc. in the amount of 8,430 thousandyen.
(Note 2) Terms and conditions of transactions and decision-making approach to such, etc.
1. Terms and conditions of transactions are decided taking into account the actual market value.
2. The transaction is one that was conducted by Seiji Yoshioka as President and CEO of a third party (Healthcare Asset Management Co.,
Ltd.), and the amount of the asset management fee is based on the terms and conditions provided in the Articles of Incorporation of
HCM.

[Notes on Asset Retirement Obligations]
Previous fiscal period (as of July 31, 2018)
Not applicable.
Current fiscal period (as of January 31, 2019)
Not applicable.

- 28 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
[Notes on Investment and Rental Properties]
HCM owns healthcare facilities (27 properties in total) primarily in the Three Major Metropolitan Areas and Core Cities. The
carrying amount, amount of increase (decrease) during the period and fair value of these investment and rental properties are
as follows:(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019

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

41,408,406

41,149,494(258,911)

1,560,663

41,149,494

42,710,158

44,028,000

45,792,000(Note 1) “Carrying amount” is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Out of the amount of increase (decrease) during period for the previous fiscal period, the amount of decrease is mainly attributable todepreciation (307,953 thousand yen). Out of the amount of increase (decrease) during period for the current fiscal period, the amount of
increase is mainly attributable to the acquisition of 2 properties (1,766,255 thousand yen) and the amount of decrease is mainly
attributable to depreciation (315,438 thousand yen).
(Note 3) “Fair value at end of period” is the appraisal value or investigation value by an outside real estate appraiser.

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

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

2.

Related information
Previous fiscal period (from February 1, 2018 to July 31, 2018)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas➀ Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.
➁ Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers
Information on net sales to a single external customer is omitted because consent has not been obtained from thetenant.
Current fiscal period (from August 1, 2018 to January 31, 2019)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas➀ Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.

- 29 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
➁ Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers
Information on net sales to a single external customer is omitted because consent has not been obtained from thetenant.
[Notes on Per Unit Information]
Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019

Net assets per unit

105,238 yen

105,198 yen

Net income per unit

2,698 yen

2,794 yen

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

Previous fiscal period
From: Feb. 1, 2018
To: Jul. 31, 2018

Current fiscal period
From: Aug. 1, 2018
To: Jan. 31, 2019

521,141

539,678--

521,141

539,678

193,107

193,107

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

1. Acquisition of Assets
HCM concluded a purchase agreement related to the acquisition of the following Assets Acquired in the 9th fiscal period on
January 11, 2019 and acquired them on February 1, 2019.

Acquisition price(million yen)

Property nameLocation

SOMPO CARE La vie Re
Hama-Kawasaki

Kawasaki-shi, Kanagawa

1,710

Hanakotoba Shin-Yokohama

Yokohama-shi, Kanagawa

2,071

Hanakotoba Shin-Yokohama II

Yokohama-shi, Kanagawa

375

Hanakotoba Odawara

Odawara-shi, Kanagawa

880

Verde Minowa

Takasaki-shi, Gunma

1,620

Verde Hotaka

Kawaba-mura, Tone-gun,
Gunma

1,290

Sunny Life Kita-Shinagawa

Shinagawa-ku, Tokyo

1,825

SHIP Senri Building

Toyonaka-shi, Osaka

12,920Total (8 properties)-

22,691

Date of acquisition

February 1, 2019-

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

- 30 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
2. Issuance of New Investment Units
Based on the resolutions at the board of directors’ meetings held on January 11, 2019 and January 22, 2019, HCM issued
new investment units (112,280 units) by public offering in order to partially raise funds for the acquisition of the Assets
Acquired in the 9th fiscal period and issued new investment units (5,614 units) by third-party allotment with SMBC Nikko
Securities Inc. as an allotted party for the purpose of repaying loans or partially funding acquisition of specified assets
with cash on hand in the future. New investment units issued by public offering and by third-party allotment were paidin on February 1, 2019 and on February 27, 2019, respectively, and the total paid-in amount came to 12,680 million yen.
As a result, HCM’s unitholders’ capital stands at 32,480 million yen and the total number of investment units issued andoutstanding stands at 311,001 units.
Issuance of new investment units by public offering
Number of new investment units issued: 112,280 units
Issue price (offer price)
Total issue price (offer price): 111,442 yen per unit
: 12,512,707,760 yen

Paid-in amount (issue value)
Total paid-in amount (issue value): 107,555 yen per unit
: 12,076,275,400 yen

Payment date

: February 1, 2019 (Friday)

Issuance of new investment units by third-party allotment
Number of new investment units issued: 5,614 units
Paid-in amount (issue value)
Total paid-in amount (issue value): 107,555 yen per unit
: 603,813,770 yen

Payment date
Allotted party: February 27, 2019 (Wednesday): SMBC Nikko Securities Inc.

- 31 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
3. Borrowing of Funds
HCM borrowed to partially fund the acquisition of the Assets Acquired in the 9th fiscal period and related expenses andto carry out early repayment of existing loans.
LenderLoanamount(million yen)Interest rate

2,000

(Fixed interest
rate)(Note 1)

Drawdown
date

Repayment
date

Repayment method

Security

Lump-sum
repayment on
principal repayment
date

Unsecured
andunguaranteed--

Nippon Life
Insurance Company
The Hiroshima Bank,
Ltd.

0.45353%

The Dai-ichi Life
Insurance Company
LimitedJanuary 31,
2022

Sumitomo Mitsui
Trust Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Resona Bank, Ltd.
The Nishi-Nippon
City Bank, Ltd.

4,000

0.41988%

January 31,
2023(Note 2)

Shinkin Central Bank
The Bank ofFukuoka, Ltd.

February 1,
2019

The Gunma Bank,
Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Trust Bank, Ltd.
Resona Bank, Ltd.
The Nishi-Nippon
City Bank, Ltd.

5,750

Shinkin Central Bank

0.53900%

January 31,
2024(Note 2)The Bank ofFukuoka, Ltd.
The Gunma Bank,Ltd.
The 77 Bank, Ltd.
Total

11,750---(Note 1) Loan fees and other fees to be paid to the lenders are not included.
(Note 2) Interest rate swap agreements have been concluded and the indicated interest rates are those substantively fixed by the agreements.

- 32 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(10) Changes in Total Number of Investment Units Issued and Outstanding
The following are changes in total number of investment units issued and outstanding and unitholders’ capital since theestablishment of HCM leading up to January 31, 2019.
Total number of
Date

Description

investment units
issued and outstanding

Unitholders’ capital(millions of yen)

Remarks(units)ChangeDecember 9, 2014
March 18, 2015

Establishment throughprivate placement
Capital increase throughpublic offering

Balance

ChangeBalance

2,000

2,000

200

200

(Note 1)

106,500

108,500

11,246

11,446(Note 2)

April 21, 2015

Capital increase throughthird-party allotment

12,000120,500

1,267

12,713(Note 3)February 1, 2017

Capital increase throughpublic offering

69,150189,650

6,749

19,463(Note 4)

3,457

193,107337

19,800(Note 5)

March 1, 2017

Capital increase throughthird-party allotment(Note 1) HCM was established with paid-in amount of 100,000 yen per unit.
(Note 2) New investment units were issued through public offering with issue price of 110,000 yen (paid-in amount of 105,600 yen) per unit.
(Note 3) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 105,600 yen per unit.
(Note 4) New investment units were issued through public offering with issue price of 101,244 yen (paid-in amount of 97,609 yen) per unit.
(Note 5) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 97,609 yen per unit.

4.

Change in Directors(1) Change in Directors of HCM
Not applicable.
(2) Change in Directors of the Asset Management Company
Not applicable.

- 33 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

5.

Reference Information(1) Investment Status
Current fiscal period (as of Jan. 31, 2019)
Asset type

Trust beneficiaryinterests in realestateTotal amount owned(millions of yen)
(Note 1)

As a percentage of total
assets(%) (Note 2)

Three Major
Metropolitan Areas(Note 3)33,48075.5Core Cities (Note 4)

3,613

8.2

Other area (Note 5)

391

0.9

Three Major
Metropolitan Areas(Note 3)

3,171

7.2

Core Cities (Note 4)--

Other area (Note 5)

Asset use
Homes andfacilities forthe elderly

Area

Paid nursing
homeServicedhousing forthe elderly--

Group homes for the elderly withdementia--

Other facilities for the elderly--

40,657

91.7

2,052

4.6

-

-

42,71096.4

Deposits and other assets

1,617

3.6

Total amount of assets

44,327100.0

Subtotal
Medical service-related facilities, etc.
Other
Total

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

- 34 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(2) Investment Real Estate Properties① Acquisition prices, etc. of investment real estate properties and their shares of investment
Overview of trust beneficiary interests in real estate that HCM owns as of January 31, 2019 is as follows.
Type ofspecified
asset

Area

Property nameAcquisition price
Share of investment(millions of yen)(%) (Note 2)(Note 1)

Bonsejour Chitose-funabashi

824

2.0

828

974

Bonsejour Hino

724

1.7

728

818

Bonsejour Musashi-shinjo

582

1.4

585

643

728

1.7

729

850

3,580

8.5

3,555

3,810

3,050

7.2

3,118

3,270

1,385

3.3

1,403

1,570

1,430

3.4

1,430

1,630

1,740

4.1

1,818

1,940

824

2.0

835

886

Granda Tsuruma-Yamato

1,000

2.4

1,028

1,060

Smiling Home Medice Adachi

2,253

5.3

2,298

2,440

Hanakotoba Minami

1,071

2.5

1,109

1,190

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa
SOMPO CARE La vie Re
Machidaonoji
SOMPO CARE La vie Re
AzaminoASHEIM Hikarigaoka
Tokyo
Metropolitan area ASHEIM Bunkyohakusan
GOOD TIME HOME Fudo-mae
Bonsejour Yotsugi

Hanakotoba Miura

615

1.5

651

664

Subtotal

19,80646.9

20,122

21,745

1,950

4.6

1,972

2,140

1,930

4.6

1,953

2,170

1,200

2.8

1,218

1,340

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

Trustbeneficiaryinterests inreal estate

Kinki area

Chubu area

Core cities

Other area

Current fiscal period(as of Jan. 31, 2019)
Carrying amount
Period-end(millions of yen)
appraisal value(millions of yen)
(Note 3)(Note 4)

Medical Home Bonsejour Itami

514

1.2

522

557

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

4,320

10.2

4,382

4,420

GreenLife Moriguchi

4,150

9.8

4,245

4,410

Hapine Kobe Uozaki Nibankan

930

2.2

956

995

Subtotal

14,99435.5

15,251

16,032

Medical Rehabilitation Home
Bonsejour Komaki

1,270

3.0

1,277

1,450

Subtotal

1,270

3.0

1,277

1,450

SAWAYAKA Tachibanakan

1,520

3.6

1,470

1,580

SAWAYAKA Mekarikan

1,380

3.3

1,347

1,450

AIKOEN ICHIBANKAN Building

770

1.8

795

863

Niigata Rehabilitation Hospital

2,060

4.9

2,052

2,260

Subtotal

5,730

13.6

5,666

6,153

390

0.9

391

412

390

0.9

391

412

42,190100.042,71045,792SAWAYAKA Tagawakan
Subtotal

Total (27 properties)(Note 1) ”Acquisition price” does not include acquisition-related expenses, property tax, urban planning tax, consumption tax and local
consumption tax.
(Note 2) ”Share of investment” refers to the acquisition price of each property as a percentage of the total acquisition price, and the figures arerounded to one decimal place.
(Note 3) ”Carrying amount” indicates book value after depreciation and amortization as of January 31, 2019.
(Note 4) “Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2019, prepared by realestate appraisers of Japan Real Estate Institute, the Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd. and Daiwa Real
Estate Appraisal Co., Ltd., based on the Articles of Incorporation of HCM and the rules set by the Investment Trusts Association, Japan.

- 35 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
② Buildings of investment real estate properties and their leasing status
Annual rent of each property is not disclosed as consent from the tenants have not been obtained. The total annual rent
from real estate in trust owned by HCM as of January 31, 2019 is 2,654 million yen (Note).
(Note) The amount is obtained by multiplying total of monthly rent in lease agreements effective as of January 31, 2019 by 12 (including tax, etc.),
and is rounded down to the nearest million yen.

Area

Metropolitan
area

Kinki area

Chubu area

Core cities

Other area

Property nameConstruction
completion(Note 2)

RC/B1 6F

Mar. 8, 1988

2,342.17

2,342.17

1

100.0

RC/3F

May 2, 1990

1,984.17

1,984.17

1

100.0

RC/4F

Feb. 21, 1985

1,710.43

1,710.43

1

100.0

RC/5F

Jul. 17, 1991

3,435.79

3,435.791

100.0

RC/B1 6F

Oct. 29, 2007

7,720.17

7,720.171

100.0

RC/B1 5F

Mar. 1, 2004

5,789.25

5,789.25

1

100.0

RC/3F

Mar. 6, 2006

3,628.60

3,628.60

1

100.0

RC/8F

Feb. 27, 2007

2,494.78

2,494.782

100.0

Mar. 18, 1992

3,400.20

3,400.201

100.0

Mar. 28, 1989

1,962.89

1,962.89

1

100.0

Mar. 6, 1998

3,427.08

3,427.08

1

100.0

RC/4F

Nov. 16, 2005

3,870.98

3,870.98

2

100.0

RC/7F

Feb. 24, 2010

1,710.68

1,710.68

1

100.0

RC/4F
SubtotalJun. 27, 2007

1,959.64
45,436.83

1,959.64
45,436.83

1
16

100.0
100.0

RC/5F

May 18, 2007

5,157.26

5,157.262

100.0

RC/12F

Jun. 12, 2009

5,658.53

5,658.53

1

100.0

S/9F

Jun. 11, 2009

3,626.25

3,626.251

100.0

SRC/11F

Mar. 3, 1989

2,129.87

2,129.87

1

100.0

RC/B1 9F

Jan. 7, 2009

12,636.48

12,636.48

1

100.0

SRC/9F

Sept. 6, 2006

8,356.85

8,356.85

1

100.0

S/B1 4F

Mar. 31, 2010

1,772.89

1,772.89

1

100.0

39,338.13

39,338.13

8

100.0

8,858.49

8,858.491

100.0

8,858.49

8,858.491

100.0

Bonsejour Chitosefunabashi
Bonsejour Hino
BonsejourMusashi-shinjo
MedicalRehabilitation
Home Bonsejour
Hadanoshibusawa
SOMPO CARE La
vie ReMachidaonoji
SOMPO CARE La
vie Re Azamino
ASHEIM
Hikarigaoka
ASHEIM
Bunkyohakusan
GOOD TIME HOME
Fudo-mae
Bonsejour Yotsugi
Granda TsurumaYamato
Smiling Home
Medice Adachi
Hanakotoba
Minami
Hanakotoba Miura

RC (partly
S)/B1 5F
RC/5F
RC (partly
S)/5F

AQUAMARINE
Nishinomiyahama
SOMPO CARE
Sompo no ie
Awajiekimae
SOMPO CARE
Sompo no ie
Kobekamisawa
Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building (Hapine
Kobe Gakuentoshi)
GreenLife
Moriguchi
Hapine Kobe
Uozaki Nibankan

Subtotal

MedicalRehabilitation
Home Bonsejour
KomakiSAWAYAKA
Tachibanakan
SAWAYAKA
Mekarikan
AIKOENICHIBANKAN
Building
NiigataRehabilitation
Hospital

Total leasable
Total leased area No. of tenants
Occupancy ratearea
(companies)(m2)(%) (Note 6)(m2)(Note 5)(Note 4)(Note 3)Structure/ No. offloors(Note 1)

SRC/10F

Mar. 13, 1991

Subtotal
RC/B1 6F

Oct. 31, 2005

5,652.94

5,652.94

1

100.0

RC/4F

Nov. 15, 2005

4,720.46

4,720.46

1

100.0

S/5F

Feb. 4, 2010

4,311.20

4,311.20

4

100.0①RC/3F②S/5F①Apr. 20, 1990
②Feb. 28, 2001

13,476.55

13,476.55

1

100.0

28,161.15

28,161.15

7

100.0

2,366.20

2,366.201

100.0

2,366.20
124,160.80

2,366.20
124,160.80

1
33

100.0
100.0

Subtotal

SAWAYAKA
Tagawakan

RC/3F
Total

Jan. 20, 2006

Subtotal- 36 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Note 1) ”Structure/ No. of floors” indicates information provided in the real estate registry of the building of each owned asset. “S” refers to steel
structure, “RC” refers to reinforced concrete structure, “SRC” refers to steel-reinforced concrete structure, “B” refers to basement floor and“F” refers to floors above ground.
(Note 2) ”Construction completion” indicates date of new construction provided in the real estate registry of the building of each owned asset.
(Note 3) “Total leasable area” indicates the areas believed to be leasable based on the lease agreement or the drawing of each building.
(Note 4) “Total leased area” indicates the areas, out of the total leasable area, for which actual lease agreements have been concluded and are leased.
(Note 5) ”No. of tenants” indicates the number of tenants of each building based on the lease agreements. For the section of healthcare facilities inwhich the trustee of each owned asset and HCM conclude a lease agreement (master lease agreement) with an aim to have HCM sublease to
the master lease company (section of paid nursing home with nursing care for Smiling Home Medice Adachi), the master lease company
which operates the healthcare facilities in the respective sections (operator) is counted as a tenant, and accordingly indicated as the numberof tenants. However, for the sections that are not subject to the lease agreement (master lease agreement) between the trustee and HCM,
the number of lessees leasing a building from the trustee is counted as the number of tenants and indicated accordingly.
(Note 6) ”Occupancy rate” indicates the total leased area as a percentage of the total leasable area of each owned asset as of January 31, 2019, and isrounded to one decimal place.

- 37 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
③ Summary of Appraisal Report
Summary of Appraisal Report
Property nameAppraisal value
Appraisal company(millions of yen)

Direct capitalization method
Indicated value(millions of yen)

Capitalization
rate (%)

DCF method
Indicated value(millions of yen)Appraisal NOI
Terminal(millions of yen)
Discount
capitalization(Note 2)rate (%)
rate (%)

AQUAMARINE
Rich Appraisal
2,140
2,150
5.3
2,130
5.0
5.5
118
Nishinomiyahama Institute Co., Ltd.
Bonsejour
The Tanizawa Sogo
974
993
4.4
966
4.5
4.6
49
Chitose-funabashi Appraisal Co., Ltd.
The Tanizawa Sogo
Bonsejour Hino
818
832
4.8
812
4.9
5.0
43
Appraisal Co., Ltd.
Bonsejour
The Tanizawa Sogo
643
653
5.1
638
5.2
5.3
36
Musashi-shinjo
Appraisal Co., Ltd.
MedicalRehabilitation
The Tanizawa Sogo
850
864
5.0
844
5.1
5.2
47
Home Bonsejour Appraisal Co., Ltd.
Hadanoshibusawa
MedicalRehabilitation
The Tanizawa Sogo
1,450
1,460
5.5
1,440
5.6
5.7
92
Home Bonsejour Appraisal Co., Ltd.
KomakiASHEIM
Japan Real Estate
1,570
1,590
4.8
1,550
4.6
5.0
76
Hikarigaoka
Institute
ASHEIM
Japan Real Estate
1,630
1,650
4.4
1,610
4.2
4.6
73
Bunkyohakusan Institute
SOMPO CARE La
Japan Real Estate
3,810
3,850
4.9
3,760
4.7
5.1
192
vie ReInstitute
Machidaonoji
SOMPO CARE La Japan Real Estate
3,270
3,310
4.6
3,220
4.4
4.8
155
vie Re Azamino
Institute
SAWAYAKA
Japan Real Estate
1,580
1,590
5.6
1,560
5.4
5.8
95
Tachibanakan
Institute
SAWAYAKA
Japan Real Estate
1,450
1,460
5.7
1,440
5.5
5.9
87
Mekarikan
Institute
SAWAYAKA
Japan Real Estate
412
415
5.8
409
5.6
6.0
26
Tagawakan
Institute
GOOD TIME
Japan Real Estate
1,940
1,960
4.4
1,910
4.2
4.6
91
HOME Fudo-mae Institute
The Tanizawa Sogo
Bonsejour Yotsugi
886
902
4.7
879
4.8
4.9
48
Appraisal Co., Ltd.
Medical HomeThe Tanizawa Sogo
557
566
5.1
553
5.2
5.3
36
Bonsejour Itami Appraisal Co., Ltd.
Kobe Gakuentoshi
Building (Hapine Daiwa Real Estate
4,420
4,480
4.7
4,400
4.5
4.9
225
Kobe
Appraisal Co., Ltd.
Gakuentoshi)
GreenLife
Daiwa Real Estate
4,410
4,470
4.6
4,380
4.4
4.8
221
Moriguchi
Appraisal Co., Ltd.
Hapine Kobe
Daiwa Real Estate
995
1,010
4.6
989
4.4
4.8
48
Uozaki Nibankan Appraisal Co., Ltd.
Granda Tsuruma- The Tanizawa Sogo
1,060
1,070
4.7
1,050
4.8
4.9
53
YamatoAppraisal Co., Ltd.
Smiling HomeThe Tanizawa Sogo
2,440
2,470
4.7
2,430
4.8
4.9
119
Medice Adachi
Appraisal Co., Ltd.
AIKOENThe Tanizawa Sogo
863
867
5.2
861
5.3
5.4
45
ICHIBANKAN
Appraisal Co., Ltd.
Building
Hanakotoba
Japan Real Estate
1,190
1,200
4.6
1,170
4.4
4.8
56
Minami
Institute
Hanakotoba
The Tanizawa Sogo
664
672
4.9
661
5.0
5.1
35
Miura
Appraisal Co., Ltd.
SOMPO CARE
Japan Real Estate
2,170
2,190
5.2
2,150
5.0
5.4
116
Sompo no ie
Institute
Awajiekimae
SOMPO CARE
Japan Real Estate
1,340
1,350
5.2
1,330
5.0
5.4
72
Sompo no ie
Institute
Kobekamisawa
Niigata
Japan Real Estate
2,260
2,270
6.6
2,250
6.4
6.8
153
Rehabilitation
Institute
Hospital
Total
45,792
46,29445,3922,420(Note 1) Figures are based on appraisal reports with appraisal date of January 31, 2019.
(Note 2) ”Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with January 31, 2019 asappraisal date, and is rounded down to the nearest million yen. The same shall apply hereinafter in this document.

- 38 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
④ Capital Expenditures of Assets under Managementa.

Schedule of Capital Expenditures
Of capital expenditures associated with repair work, etc. currently planned for assets owned by HCM as ofJanuary 31, 2019, the following are the major estimated amounts. The estimated construction costs include theportion separately charged to expenses in accounting.
Estimated construction costs(thousands of yen)
Name of real estate, etc.

PurposeGranda Tsuruma-Yamato(Yamato-shi, Kanagawa)Exterior wall painting and

ASHEIM Hikarigaoka(Nerima-ku, Tokyo)

Work on nurse call systems andSmiling Home Medice Adachi(Adachi-ku, Tokyo)

Renewal of air conditioners in

ASHEIM Bunkyohakusan(Bunkyo-ku, Tokyo)

Work on nurse call systems andGOOD TIME HOME Fudo-mae(Shinagawa-ku, Tokyo)

Renewal of air conditioners in

SAWAYAKA Tagawakan(Tagawa-shi, Fukuoka)

Reinforcement work for wallb.

renewal of rooftop waterproof
other equipment
common areas
other equipment
common areas
tiles in the kitchen

Scheduled period

TotalamountPayment
duringperiodTotalamountalready paid

From: January 2019
To: April 2019

34,000--

From: March 2019
To: June 2019

26,000--

From: March 2019
To: June 2019

25,000--

From: March 2019
To: June 2019

20,000--

From: March 2019
To: June 2019

20,000--

From: March 2019
To: June 2019

5,000

-

-

Capital Expenditures During Period
Of construction work falling under the category of capital expenditures conducted in the current fiscal period for
assets owned by HCM as of January 31, 2019, the following are the major amounts. The capital expenditures in
the current fiscal period amounted to 109,846 thousand yen and repair expenses separately charged to expenses
amounted to 13,757 thousand yen for a combined total of 123,603 thousand yen of construction work
implemented.
Name of real estate, etc.

Purpose

PeriodConstruction costs(thousands of yen)

SOMPO CARE La vie Re Azamino(Yokohama-shi, Kanagawa)Exterior wall renovation(periphery)

From: August 2018
To: December 2018

43,153SAWAYAKA Mekarikan(Kitakyushu-shi, Fukuoka)

Replacement of floor materials(damaged by torrential rain)

From: November 2018
To: January 201914,093

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

Renewal of distribution
switchboard parts for powerreceiving/ transforming
equipment

From: October 2018
To: November 2018

8,872

-

43,727

Other real estate, etc.

Total

109,846- 39 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
⑤ Information of Major Tenants”Major tenants” refers to tenants whose leased areas occupy 10% or more of total leased area of the entire portfolio at theend of the current fiscal period (on January 31, 2019). The annual rent and tenant leasehold and security deposits of each
property are not disclosed as consent from the tenants has not been obtained.
Tenant nameGREEN LIFE Co., Ltd.

Benesse Style Care
Co., Ltd.

Sompo Care Inc.

Medical Corporation
AIKOKAI
Sawayaka Club Co.,Ltd.

Property name
AQUAMARINE Nishinomiyahama
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
Total
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
Total
SOMPO CARE La vie Re Machidaonoji
SOMPO CARE La vie Re Azamino
SOMPO CARE Sompo no ie
Awajiekimae
SOMPO CARE Sompo no ie
Kobekamisawa
Total
AIKOEN ICHIBANKAN Building
Niigata Rehabilitation Hospital
Total
SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan
Total

Leased area (m2)(Note 1)

Contract expiration date
(Note 2)

Appraisal NOI(millions of yen)
(Note 3)118

Share(%) (Note 4)

5,189.42

May 31, 2037

12,636.48

March 28, 2041

225

10.1

4.2

8,356.85
1,772.89
27,955.64
2,342.17
1,984.17
1,710.43

October 19, 2039
March 28, 2041
May 24, 2026
May 24, 2026
November 23, 2026

221
48
614
49
43
36

6.7
1.4
22.4
1.9
1.6
1.4

3,435.79

May 21, 2027

47

2.8

8,858.49

May 21, 2027

92

7.1

1,962.89
2,129.87
3,427.08
25,850.89
7,720.17
5,789.25

January 5, 2026
May 21, 2027
March 31, 2022
October 31, 2027
June 27, 2027

48
36
53
408
192
155

1.6
1.7
2.7
20.7
6.2
4.6

5,745.15

July 31, 2034

116

4.6

4,058.35

July 31, 2034

72

3.3

23,312.92
3,806.36
13,476.55
17,282.91
5,652.94
4,720.46
2,366.20
12,739.60

August 4, 2036
March 23, 2047
January 29, 2028
January 29, 2028
January 29, 2028
-

537
45
153
198
95
87
26
209

18.7
3.0
10.8
13.8
4.5
3.8
1.9
10.2

(Note 1) ”Leased area” indicates not the area described in the drawing of each building but the area stated in lease agreements concluded with each
operator as of January 31, 2019. The same shall apply in ⑤.
(Note 2) ”Contract expiration date” indicates the contract expiration date stated in the lease agreement with the operator as the lessee.
(Note 3) ”Appraisal NOI” indicates figures calculated for each property by including lessees other than the operators.
(Note 4) ”Share” indicates the leased area of each property as a percentage of the total leased area of the properties owned by HCM as of January 31,
2019, and is rounded to one decimal place.
(Note 5) The above table has been revised based on the release dated April 25, 2019.

- 40 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
⑥ Portfolio Overview
a. Overview of Homes and Facilities for the Elderly

Property name

AQUAMARINE
Nishinomiyahama
Bonsejour Chitosefunabashi
Bonsejour Hino
Bonsejour Musashishinjo
MedicalRehabilitation Home
Bonsejour
Hadanoshibusawa
MedicalRehabilitation Home
Bonsejour Komaki
ASHEIM Hikarigaoka
ASHEIM
Bunkyohakusan
SOMPO CARE La vie
Re Machidaonoji
SOMPO CARE La vie
Re Azamino
SAWAYAKA
Tachibanakan
SAWAYAKA
Mekarikan
SAWAYAKA
Tagawakan
GOOD TIME HOME
Fudo-mae
Bonsejour Yotsugi
Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building(Hapine Kobe
Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki
Nibankan
Granda TsurumaYamato
Smiling Home
Medice Adachi
AIKOEN ICHIBANKAN
Building
Hanakotoba Minami
Hanakotoba Miura
SOMPO CARE Sompo
no ie Awajiekimae
SOMPO CARE Sompo
no ie Kobekamisawa

No. ofrooms(rooms)(Note 1)

No. ofresidents(persons)(Note 1)

Capacity(persons)(Note 1)

Occupancy
rate (%)(Note 2)

Preparation dateof Property
DisclosureStatement ofimportant matters(Note 3)

Type of facility

Operator

Paid nursing home

GREEN LIFE Co., Ltd.

Paid nursing home

Benesse Style Care Co., Ltd.

42

47

45

95.7

October 1, 2018

Paid nursing home

Benesse Style Care Co., Ltd.

56

58

54

93.1

October 1, 2018

Paid nursing home

Benesse Style Care Co., Ltd.

46

49

44

89.8

October 1, 2018

Paid nursing home

Benesse Style Care Co., Ltd.

100

101

94

93.1

October 1, 2018

Residential type paid
nursing home

Benesse Style Care Co., Ltd.

124

165

111

67.3

October 1, 2018

90

100

96

96.0

July 1, 2018

Paid nursing home

AS PARTNERS Co., Ltd.

83

89

81

91.0

August 1, 2018

Paid nursing home

AS PARTNERS Co., Ltd.

50

52

45

86.5

July 1, 2018

Paid nursing home

Sompo Care Inc.

163

169

112

66.3

July 1, 2018

Paid nursing home

Sompo Care Inc.

145

145

84

57.9

July 1, 2018

Paid nursing home

Sawayaka Club Co., Ltd.

104

104

103

99.0

July 1, 2018

Paid nursing home

Sawayaka Club Co., Ltd.

95

95

93

97.9

July 1, 2018

Paid nursing home

Sawayaka Club Co., Ltd.

60

60

56

93.3

July 1, 2018

Paid nursing homeJAPAN LIFEDESIGN Inc.

61

67

63

94.0

August 1, 2018

Paid nursing home
Residential type paid
nursing home

Benesse Style Care Co., Ltd.

61

65

59

90.8

October 1, 2018

Benesse Style Care Co., Ltd.

62

64

62

96.9

October 1, 2018

Paid nursing home

GREEN LIFE Co., Ltd.

128

138

127

92.0

July 1, 2018

Paid nursing home

GREEN LIFE Co., Ltd.

155

189

184

97.4

July 1, 2018

Paid nursing home

GREEN LIFE Co., Ltd.

47

47

46

97.9

July 1, 2018

Paid nursing home

Benesse Style Care Co., Ltd.

73

90

72

80.0

October 1, 2018

82

82

71

86.6 November 1, 2018

90

90

89

98.9

51
53
137
(Note 4)51
54
137
(Note 4)51
50

100.0 November 28, 201892.6 October 1, 2018123

89.8 November 1, 2018

85

85

84

98.8 November 1, 2018

2,243

2,393

2,099

Paid nursing home
Paid nursing home
Paid nursing home
Paid nursing homeServiced housing for theelderly
Serviced housing for theelderly
Total

GREEN LIFE HIGASHI NIHON
Co., Ltd.
Medical Corporation
AIKOEN
Proud Life Inc.
Proud Life Inc.
Sompo Care Inc.
Sompo Care Inc.

87.7

July 1, 2018-

(Note 1) ”No. of rooms,” “Capacity” and “No. of residents” indicate figures stated in Property Disclosure Statement of Important Matters (hereinafter
the “Property Disclosure Statement of Important Matters”) of the paid nursing home provided by the operators or figures posted on thewebsite of each property prepared by the operators as of January 31, 2019.
(Note 2) ”Occupancy rate” indicates the occupancy rate stated in the Property Disclosure Statement of Important Matters or the rate obtained by
dividing the number of residents by capacity, rounded to one decimal place.
(Note 3) ”Preparation date of Property Disclosure Statement of Important Matters” indicates the date of application, reference date or preparation
date stated on the document.
(Note 4) Actual number of rooms and capacity for serviced housing for the elderly are 136 rooms and 136 persons, respectively.

- 41 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
b. Overview of Medical Service-Related Facilities, etc.
Property
Niigata Rehabilitation Hospital
nameDate ofJune 1990
Operator
Medical Corporation AIKOKAI
establishment(established as Oyama Hospital, the precursor)
Type of

Hospital

Authorized
number of beds

168 beds (general bed: 108 beds/convalescentstage beds: 60 beds)

Rehabilitation, orthopedic surgery, internal
medicine, neurology, dental & dental andoral surgery

Facilitycertification

Training facility certified by the Japanese Associationof Rehabilitation Medicine
Training facility certified by Japan Society of
Ultrasonics in Medicine specialists

facility
Subject of
medicaltreatment

Main facility
criteria

External
evaluation

Hospitalizationfee

Hospital ward on 2nd floor (48 beds)

Hospitalization fee of hospital ward for comprehensive community care 1

Hospital ward on 3rd floor (60 beds)·Basic hospitalization fee for general hospital ward (local general hospitalizationfee 1)· Medical management fee for comprehensive community care 1

Hospital ward on 4th floor (60 beds) Hospitalization fee of hospital ward for rehabilitation at recovery stage 1

Emergency medical care management addition, specimen examination management addition I, fee forcoordinated guidance on cancer treatment, rehabilitation fee for cerebrovascular disease, etc. I,
Othersrehabilitation fee for locomotor I, rehabilitation fee for respiratory apparatus II, fee for group
communication therapy, etc.
Hospital certified by Japan Council for Quality Health Care. (Certification number: JC1424-3) 3rdG:Ver.1.1
Added function Rehabilitation function (Certification number: JC1424-R2) Ver.3.0- 42 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
c. Leasing status
Area

Tokyo
Metropolitan
area

Kinki area

Chubu area

Core cities

Other

Property name
Bonsejour Chitose-funabashi
Bonsejour Hino
Bonsejour Musashi-shinjo
Medical Rehabilitation Home
Bonsejour Hadanoshibusawa
SOMPO CARE La vie Re Machidaonoji
SOMPO CARE La vie Re Azamino
ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan
GOOD TIME HOME Fudo-mae
Bonsejour Yotsugi
Granda Tsuruma-Yamato
Smiling Home Medice Adachi
Hanakotoba Minami
Hanakotoba Miura
Subtotal
AQUAMARINE Nishinomiyahama
SOMPO CARE Sompo no ie
Awajiekimae
SOMPO CARE Sompo no ie
Kobekamisawa
Medical Home Bonsejour Itami
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
Subtotal
Medical Rehabilitation Home
Bonsejour Komaki
Subtotal
SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
AIKOEN ICHIBANKAN Building
Niigata Rehabilitation Hospital
Subtotal
SAWAYAKA Tagawakan
Subtotal
Total

Current fiscal period (from August 1, 2018 to January 31, 2019)
Revenue related toPercentage of total
Occupancy rate
No. of tenants
rent businessrevenue related to(as of the end of(Note 1)(during the period)
rent business (%)
period) (%)(millions of yen)
1
100.0
1
100.0
1
100.0
1

100.0

1
1
1
2
1
1
1
2
1
1
16
2

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

1

100.0

1

100.0

1

100.0

1

100.0

1
1
8

100.0
100.0
100.0

1

100.0

1
1
1
4
1
7
1
1
33

100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0

Not disclosed(Note 2)

1,294

100.0

(Note 1) ”No. of tenants” indicates the number of tenants of each building based on the lease agreements. For the section of healthcare facilities inwhich the trustee of each owned asset and HCM conclude a lease agreement (master lease agreement) with an aim to have HCM sublease to
the master lease company (section of paid nursing home with nursing care for Smiling Home Medice Adachi), the master lease company
which operates the healthcare facilities in the respective sections (operator) is counted as a tenant, and accordingly indicated as the numberof tenants. However, for the sections that are not subject to the lease agreement (master lease agreement) between the trustee and HCM,
the number of lessees leasing a building from the trustee is counted as the number of tenants and indicated accordingly.
(Note 2) ”Revenue related to rent business” and “Percentage of total revenue related to rent business” of each property are not disclosed as consent
for disclosure of revenue related to rent business has not been obtained from the tenants. The total is the sum of amounts received as rent
for the current fiscal period based on the lease agreements.

- 43 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
d. Earnings Performance

Property nameCurrent fiscal period (from August 1, 2018 to January 31, 2019)
Real estate lease business revenue
Real estate lease business expenses
Rent
revenue

AQUAMARINE
Nishinomiyahama
Bonsejour
Chitose-funabashi
Bonsejour Hino
BonsejourMusashi-shinjo
MedicalRehabilitation
Home Bonsejour
Hadanoshibusawa
MedicalRehabilitation
Home Bonsejour
KomakiASHEIM
Hikarigaoka
ASHEIM
Bunkyohakusan
SOMPO CARE La
vie ReMachidaonoji
SOMPO CARE La
vie Re Azamino
SAWAYAKA
Tachibanakan
SAWAYAKA
Mekarikan
SAWAYAKA
Tagawakan
GOOD TIME
Not disclosed
HOME Fudo-mae(Note 2)
Bonsejour Yotsugi
Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building(Hapine Kobe
Gakuentoshi)
GreenLife
Moriguchi
Hapine Kobe
Uozaki Nibankan
Granda TsurumaYamato
Smiling Home
Medice Adachi
AIKOENICHIBANKAN
Building
Hanakotoba
Minami
Hanakotoba
Miura
SOMPO CARE
Sompo no ie
Awajiekimae
SOMPO CARE
Sompo no ie
Kobekamisawa
NiigataRehabilitation
Hospital
Total
1,301,210
1,294,178

Insurance Repair
Property
Outsourcing
Depreciation Othertax
expenses expenses

Otherrevenue

7,031(Unit: thousands of yen)
NOI
(Note 3)23,209

4,478

2,100

151

1,219

14,860400

58,994

5,544

1,790

224

76

-

3,048

404

21,425

5,042

1,240

213

58

-

3,130

400

19,521

4,064

998

167

51

-

2,447

400

16,186

8,365

1,829

213

104

-

5,817

400

21,11014,038

4,568

201

241

-

8,627

400

39,59912,047

3,698

388

110

189

7,258

400

39,011

10,234

2,494

388

82

-

6,868

400

36,46645,889

5,843

780

244

2,508

36,112400

95,08532,049

4,749

780

179

450

25,489400

78,54026,133

2,666

1,140

209

-

21,718400

47,321

25,493

2,988

1,140

133

-

20,831400

43,621

8,308

1,126

1,140

63

-

5,578

400

12,964

11,769

3,051

600

115

373

7,228

400

46,459

4,927

968

223

49

-

3,286

400

20,708

6,480

1,374

371

75

-

4,260

400

13,97250,521

9,547

900

382

55

39,236400

114,215

38,424

6,937

1,388

251

6,006

23,439400

105,015

9,509

1,405

1,200

60

-

6,444

400

24,434

6,848

1,938

618

100

-

3,791

400

27,10012,837

3,219

540

117

545

8,013

400

59,904

8,765

2,566

780

75

313

4,630

400

22,525

3,362

-

400

31

-

2,661

269

19,698

3,250

-

400

37

-

2,543

269

12,89528,202

4,942

510

186

1,228

20,934400

57,195

17,418

2,916

510

118

865

12,608400

35,484

26,228

9,872

1,030

257

-

14,569500

78,220448,967

87,21318,3503,565

13,757315,438 10,643

1,167,680(Note 1) All figures indicated are rounded down to thousand yen.
(Note 2) ”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has
not been obtained from tenants. The total is the sum of amounts received as rent for the current fiscal period based on the lease agreements.
(Note 3) “NOI” = Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization- 44 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
e. Diversification by type
Brand

Paid nursing homes

Number ofproperties

Share (%)
(Note 2)24

37,00040,022

87.7

2

3,130

3,510

7.4

1

2,060

2,260

4.9

27

42,19045,792100.0

Serviced housing for theelderly
Medical service-related
facilities, etc.
Total

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

Acquisition price(millions of yen)

(Note 1) ”Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2019, prepared by realestate appraisers of Japan Real Estate Institute, the Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd. and Daiwa Real
Estate Appraisal Co., Ltd. based on the Articles of Incorporation of HCM and the rules set by the Investment Trusts Association, Japan.
(Note 2) ”Share” refers to the percentage of the total acquisition price, and the figures are rounded to one decimal place.

f. Diversification by area
Classification/region
Three Major Metropolitan

Number ofproperties

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

Acquisition price(millions of yen)

Share (%)
(Note 2)

22

36,07039,22785.5

1419,806

21,745

46.9

Kinki Area

7

14,994

16,03235.5

Chubu Area

1

1,270

1,450

3.0

Core Cities

4

5,730

6,153

13.6

Other Areas

1

390

412

0.9

27

42,19045,792

100.0

Areas
Tokyo
Area

Metropolitan

Total(Note 1) ”Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2019, prepared by realestate appraisers of Japan Real Estate Institute, the Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd., and Daiwa Real
Estate Appraisal Co., Ltd. based on the Articles of Incorporation of HCM and the rules set by the Investment Trusts Association, Japan.
(Note 2) ”Share” refers to the percentage of the total acquisition price, and the figures are rounded to one decimal place.

- 45 -

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
g.

Diversification by the number of rooms
Number of rooms

Number ofproperties

Acquisition price(millions of yen)

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

Share (%)
(Note 2)Homes and facilities for theelderly

26

40,13043,53295.1

100 rooms or more

8

20,54821,96048.7

50 rooms or more,
but less than 100
rooms

15

17,246

18,96040.9

Less than 50 rooms

3

2,336

2,612

5.5

1

2,060

2,260

4.9

27

42,19045,792100.0

Medical Service-Related
Facilities, etc.
Total

(Note 1) ”Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2019, prepared by realestate appraisers of Japan Real Estate Institute, the Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd. and Daiwa Real
Estate Appraisal Co., Ltd. based on the Articles of Incorporation of HCM and the rules set by the Investment Trusts Association, Japan.
(Note 2) ”Share” refers to the percentage of the total acquisition price, and the figures are rounded to one decimal place.

- 46 -