Financial Results
Briefing Materials
Fiscal Period Ended January 2021
（12th Fiscal Period）
March 16, 2021

Asset Management Company

Securities Code: 3455

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

Contents

Ⅰ

Ⅱ

TopicsⅢ

1. Highlights for 12th Fiscal Period (Ended
January 2021)

P3

2. Impact of COVID-19

P4

3. New Property Acquisition

P5

Ⅳ

Financial Summary
1. Major Indexes for 12th Fiscal Period(Ended January 2021)
2. Actual Results for 12th Fiscal Period(Ended January 2021)
3. Earnings Forecasts for13th Fiscal Period (Ending July 2021) and14th Fiscal Period (Ending January 2022)

Status of Asset Management
1. Portfolio Highlights

P15

2. Stable Cash Flow in the Long Term

P16

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

P18

P7

2. Expansion of Pipeline

P19

P8

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

P21

P9

4. Actions for Hospital Projects

P22

5. Actions for ESG

P23

4. Financial Status

P10

5. Changes in Distribution Per Unit

P11

6. Changes in Average Appraisal NOI Yield・
Unrealized Gain

P12

7. Changes in Unit Price

P13

Ⅴ

Appendix1Topics2

I Topics

1. Highlights for 12th Fiscal Period (Ended January 2021)

1 PerformanceOperating revenue:2,058 million yen (+34 million yen from previous fiscal period, △0 million yen from forecast)
Net income:910 million yen (△7 million yen from previous fiscal period, +5 million yen from forecast)Distribution per unit :3,226 yen(△14 yen from previous fiscal period, +21 yen from forecast)
NAV per unit
:119,268 yen(△574 yen from previous fiscal period)

2 Financial Status

Refinancing as a social loan (3.7 billion yen)Interest-bearing liabilities totaled 33.15 billion yen (±0 billion yen from previous fiscal period), with LTV
at 48.2% (+0.1% from previous fiscal period)
Long-term issuer rating (JCR): A (Stable)

3

Management Status
 Asset size is 36 properties/66.3 billion yen, with unrealized gain standing at 5 billion yen
 The pipeline has expanded to approximately 22 billion yen in total The portfolio operational rate is 100%. No rent reduction/exemption, deferral of rent payment

3

I Topics

2. Impact of COVID-19
The impact of the spread of COVID-19 on the management status of HCM is little.
Impact on Revenue
Stable rent revenue securedLong-term fixed-rent lease agreements have been concluded with carefully
selected operators.



There has been no rent reduction/exemption, deferral of rent payment, or
mid-term cancellation of lease agreements with tenants, including
subtenants.
Stable facility operations continued

anti-infection measures implemented thoroughly by operators



Average occupancy rate

(Note)of the facilities is kept at a high level of 92.4%.

<Long-Term Fixed-Rent Lease Agreements>
Averageremaining leaseterm

13.3 years

Ratio of fixed
rents

100%

Portfolio
operational
rate

100%

<Examples of countermeasures against COVID-19>Creating a corresponding manual・Thorough operation
Conducting thorough medical checks for residents and the staff
Restricting entry of facilities and conducting online visits
Installation of Air cleaner, sterilizer, etc.

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

Impact on External GrowthNo significant changes in the investment environment of healthcare facilities



There are some restrictions on DD activities from the viewpoint of infection prevention, but we take appropriate measures.

Impact on Unit Price

Evaluation of steady demand for healthcare facilities and long-term stable earnings



Investment unit prices nearly recovered to the level before the pandemic

4

I Topics

2. New Property Acquisition
On March 16, 2021, we signed a purchase and sale agreement for the paid nursing home
"Nichii Home Nishikokubunji".
Overview of Property to be Acquired

Overview of the Operator
Company name

Nichii Carepalace Company

Representative

President Masatoshi Saito

Location

2-9, Kandasurugadai, Chiyoda-ku,Tokyo

FoundedJune 1964

Capital stock

80 million yen

Property name

Nichii Home Nishikokubunji

Shareholder

NICHIIGAKKAN CO., LTD.（100%）

Type

Paid nursing home

Location

Kokubunji-shi,Tokyo

Number of operating
Facilities (Note)

81 facilities

Operator

Nichii Carepalace Company

Opening date

April 2003

Appraisal value

760 million yen (Appraisal date December 1, 2020)

Planned acquisition date

March 29, 2021

Planned acquisition price

720 million yen

Appraisal NOI yield

5.0%

Number of rooms/Resident capacity

46 rooms / 46 people

Occupancy rate (Note)

97.8%

Seller

Odakyu Real Estate Co., Ltd.

(Note) Occupancy rate is based on the Property Disclosure Statement of Important Matters dated December 1, 2020.

Points of the acquisition
HCMʼs first acquisition of a facility operated by
Excellenta Nichii Group company, one of the largest inoperator
the nursing care industry.
Good location

Sourcing

Conveniently located in a quiet residentialarea, about a 4-minute walk from JR NishiKokubunji station and.
Captured an investment opportunity in theownership-change deal through the longtime relationship with both the seller and theoperator

Nichii Carepalace Company operates "Nichii Home", a paid nursing home, and "Iris

Comments

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

(Note) The figure indicates a figure tallied by the Asset Management Company based on the information obtained from thecompany and information provided on its website (as of March 1, 2021).

Portfolio Status after Acquisition
End ofJanuary 2021
Number of properties(properties)
acquisition price(billion yen)
appraisal value(billion yen)
Average appraisal
NOI yield (Note 1)

Newly
acquired
Property

After newacquisition

36

1

37

66.3

0.7

67.0

71.5

0.7

72.2

5.6

5.0

5.6

12

1

13

Ratio of investmentin three major
metropolitan areas（%）

86.3

100

86.5

LTV（%）(Note 2)

48.2

－

48.2

Number of Operators(Note 1) It is calculated by the appraisal NOI based on the appraisal of owned assets ÷ acquisition price of owned
assets, and is rounded down to the first decimal place. The same shall apply hereinafter in this document.
(Note 2) LTV after new acquisition is an estimate reflecting the planned acquisition price this time based on the price, in the figure
as of the end of January 2021.

5Financial Summary

6

Ⅱ Financial Summary

1. Major Indexes for 12th Fiscal Period (Ended January 2021)
Figures in parentheses indicate the change
from the end of previous period

Asset (Assets)

Debt (Liabilities)

Number of properties

36 propertiesc(±0 property)

Total acquisition price66.3 billion yen)(±0 billion yen)

Total appraisal value

Unrealized gain

Average appraisal NOI
yield

Portfolio operational rate

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

71.5 billion yen)(△0.3 billion yen)
5.0 billion yen)(△0 billion yen)interest-bearing liabilities

33.15 billion yen)(±0 billion yen)

Average remaining terms
to maturity

2.9 years)(±0 years)

Total amount of

Average borrowinginterest rate
Ratio of long-term debt

100%)

fixed interest rates(+2.1%)
48.2%)

LTV(+0.1%)

Long-Term Issuer Rating
(JCR)

(±0%)
13.3 years)(△0.5 years)

A (Stable)

Equity (Net assets)
Total sum of fair value

(±0%)
86.3%

(△9.9%)
100%)

(±0%)

（±0%)

78.9%)

Ratio of debt with

5.6%)

100%)

0.57%)(±0%)

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

NAV per unit

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

41.8 billion yen)(+5.9 billion yen)
3,226 yen)(△14 yen)
300 yen)(+11 yen)
119,268 yen)(+574 yen)7

Ⅱ Financial Summary

2. Actual Results for 12th Fiscal Period (Ended January 2021)
Achieved distribution per unit of 3,226 yen, +21 yen over forecast, while sales increased andprofit decreased compared to the previous period.
(Unit: million yen)
11th Fiscal
Period12th fiscal period(Ended January 2021)(Ended July 2020)

ActualForecast(Note 2)

ActualComparison
with Forecast

Comparison with 11th
Fiscal Period

(A)

(B)

(C)

(C)-(B)

Operating revenue

2,023

2,058

2,058

△0

+34

+1.7

Operating expenses

951

995

990

△4

+38

+4.1

Expenses related torent business

652

680

678

△1

+26

+4.1

(Depreciation)

450

461

467

+6

+16

+3.7

Operating income

1,072

1,063

1,067

+4

△4

△0.4

Ordinary income

918

905

910

+5

△7

△0.9

Net income

917

904

910

+5

△7

△0.9

(C)-(A)(C)-(A)(A)(%)

12th Fiscal Period Actual Results(Comparison with Forecast)Difference in operating expenses (△4)
 Decrease in expenses related to rent business(△1)
 Repair expenses (△8)
 Depreciation (+6)
 Decrease in general and administrative expenses(△2)
 Survey fee (ER fee)(△2)

12th Fiscal Period Actual Results(Comparison with 11th Fiscal Period)
Difference in operating revenue (+34)
 Full-period contribution of rent revenue fromproperties acquired in the 11th fiscal period
Difference in operating expenses (+38)

Distribution per unit (yen)3,240Distribution of earnings

2,928

Distribution of reserve
for temporary
difference adjustments

23

Distribution in excess ofearnings289(return of capital) (Note 1)

NAV per unit (yen)119,842

3,205

3,226

+21

△14

△0.4

+18

△25

△0.8

300

+3

+11

+3.8

－ 119,268

－

△574

△0.5

2,880
2,908

297

46

 Increase in lease business expenses (+26)
 Repair expenses (+8)
 Depreciation (+16)
 Increase in general and administrative expenses(+12)
 Asset management fee (+3)
 Expenses related to investors meeting (+7)
Difference in Non-operating expenses (+2)
 Interest expenses etc.

(Note 1) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2) The forecast for the 12th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended July 2020” dated September 15, 2020.

8

Ⅱ Financial Summary

3. Earnings Forecasts for 13th Fiscal Period (Ending July 2021) and14th Fiscal Period (Ending January 2022)

In the 13th fiscal period, due to the new property acquisition, distribution per unit isexpected to be 3,236 yen (+10 yen from the previous period, +26 yen from initial forecast).
(Unit: million yen)
12th Fiscal
Period13th Fiscal Period(ending July 2021)(Ended January
2021)

Actual14th Fiscal Period

Initialforecast(Note 2)(ending January 2022)

Comparison
Comparison
with 12th
Forecast
Forecast with initialfiscalforecast
periodComparison
with 13th
fiscalperiodforecast

13th Fiscal Period Forecast (Comparison
with 12th Fiscal Period Results)
Difference in operating revenue (+14)


Rent revenue from property acquired in the 13th
fiscal period

Difference in operating expenses (+12)
Increase in expenses related to rent business(+18)
 Expensing of property/city planning tax forproperties acquired in 11th FP (+2)
 Repair expenses (+7)
 Depreciation (+6)
 Decrease in general and administrative expenses(△6)
 Expenses related to the general meeting ofunitholders (△7)
 Survey fee (ER fee)(+1)


(A)

(B)

(C)

(C)-(B)(C)-(A)

Operating revenue

2,058

2,058

Operating expenses

990

Expenses related torent business(D)(D)-(C)

2,072

+14

+14

2,079

+6

992

1,002

+9

+12

1,009

+6

678

688

697

+8

+18

702

+5

(Depreciation)

467

468

474

+6

+6

481

+6

Operating income

1,067

1,066

1,070

+4

+2

1,070

+0

Ordinary income

910

905

912

+7

+1

911

△1

Net income

910

904

911

+7

+1

910

△1

14th Fiscal Period Forecast (Comparison
with 13th Fiscal Period Forecast)Difference in operating revenue (+6)
 Full-period contribution of rent revenue fromproperties scheduled to be acquired in the 13th
fiscal period
Difference in operating expenses (+6)

Distribution per unit
(yen)

3,226

3,210

3,236

+26

+10

3,236

±0

Distribution per unit

2,926

2,908

2,932

+24

+6

2,927

△5

300

302

304

+2

+4

309

+5

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

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

Increase in lease business expenses (+5)
 Depreciation (+6)
 Increase in general and administrative expenses(+1)
 Asset management fee (+2)
(Note 1) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2) The initial forecast for the 13th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended July 2020” dated September 15, 2020.

9

Ⅱ Financial Summary

4. Financial Status
Refinance (3.7 billion yen) carried out in January 2021. We have built a stable financial base by extending
the borrowing period and fixing interest rates under the bank formation centering on Sumitomo Mitsui
Banking Corporation
Status of Interest-Bearing Liabilities

Change in LTV and Total Interest-Bearing Liabilities

End of11th FP

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

End of12th FP

Change

33.15

33.15

±0

40
35

LTV (right axis)

2.0

2.0

±0

30

50.6

2.9

2.9

±0

97.9

100

+2.1

（%）

48.1

48.2

+0.1

Average borrowinginterest rate

（%）

0.57

0.57

±0

4.0%

31.15 billion yen

4.7%
Lender

5.6%

14 companies

8.3%
8.7%

17.5%

32.9%

（％）

52.0
51.0
50.0

25

49.0

20
15

48.1

48.2

48.0

47.6

47.5

47.0

5

22.45

32.45

32.45

33.15

33.15

8th FP

9th FP

10th FP

11th FP

12th FP

0

Diversification of Lenders

Total amount

Total interest-bearing liabilities (left axis)

10

LTV

4.0%
4.0%

Target LTV is around 50％(billion yen)

46.0

Diversification of Maturities
Amount（billion
yen）

Ratio
（%）

■Sumitomo Mitsui Banking
Corporation

10.25

32.9

■Sumitomo Mitsui Trust Bank

5.45

17.5

■Resona Bank

2.70

8.7

■Nippon Life Insurance

2.60

8.3

■Nishi-Nippon City Bank

1.75

5.6

■Shinkin Central Bank

1.45

4.7

■Dai-ichi Life Insurance Company

1.25

4.0

■Hiroshima Bank

1.25

4.0

■Bank of Fukuoka

1.25

4.0

■77 Bank

0.95

3.0

■Mie Bank

0.75

2.4

■Higashi-Nippon Bank

0.50

1.6

■Gunma Bank

0.50

1.6

■Bank of Yokohama (new lender)

0.50

1.6

合計

31.15

100.0

Average remaining terms to maturity: 2.9 years.
(billion yen)

10
Investment corporation bonds(social bonds)
8

Long‐term loans(January 2021 refinanced）
0.5

6
4
2

Long‐term loans

9.25
7.0

6.75
4.5

3.2

2.0

0
14th FP 15th FP 16th FP 17th FP 18th FP 19th FP 20th FP 21st FP 22nd FP

30th FP

10

Ⅱ Financial Summary

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

3,800
Distribution in excess of earnings

3,600

3,643

(Note 1)

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

3,400

3,200

3,363

3,320

3,236

2,951

2,926

2,932

2,927

2,918

2,929

2,923

2,943

2,794

2,800

2,697

2,653

2,699

2,879
2,786

2,699

2,600
2,440

2,0000

3,236

3,035

3,000

2,200

3,226

3,120

3,180

2,400

3,240

2,340

2,589
2,508

2,425

2,328

3rd FP
4th FP
5th
6th FP
7th FP
8th FP
9th FP
10th FP
11th FP
12th FP
13th FP
14th FP
Ended July 2016 Ended January Ended July 2017 Ended January Ended July 2018 Ended January Ended July 2019 Ended January Ended July 2020 Ended January Ended July 2021 Ended January
2017
2018
2019
2020
2021
（forecast）
2022（forecast）(Note 1) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2) The amount obtained by subtracting distribution in excess of earnings of distribution per unit is indicated.
(Note 3) Temporary effect refers to temporary revenues (insurance income, etc.), property tax and urban planning tax which have not been expensed due to property acquisition.

11

Ⅱ Financial Summary

6. Changes in Average Appraisal NOI Yield・Unrealized Gain
Since the IPO, the average appraisal NOI yield has been stable, and unrealized gains have been
increasing steadily.
(million
yen)
（百万円）
5.9%

10,000
5.8%

5.8%

5.8%

5.8%

9,000

5.7%

5.7%

5.7%
5.7%

8,000

5.6%

含み益
Unrealized gain
7,000

5.6%

5.6%

5.6%

5.6%

Average appraisal NOI yield
平均鑑定NOI利回り

5.5%

6,000

4,711

5,000

4,901

5,165

5,094
5.3%

4,000
2,878

3,000

3,081

5.1%

2,543
2,212
1,749

2,000

4.9%

1,152
1,000

0

811
420

1st
FP
第1期
Ended
2015年
July
7⽉期
2015

2nd FP
第2期
Ended
2016年
January
1⽉期
2016

3rd FP
第3期
Ended
2016年
July
7⽉期
2016

4th
FP
第4期
Ended
2017年
January
1⽉期
2017

5th
FP
第5期
Ended
2017年
July
7⽉期
2017

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

7th
FP
第7期
Ended
2018年
July
7⽉期
2018

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

9th FP
第9期
Ended
2019年
July
7⽉期
2019

10th FP
第10期
Ended
2020年
January
1⽉期
2020

11th FP
第11期
Ended
2020年
July
7⽉期
2020

12th FP
第12期
Ended
2021年
January
1⽉期
2021

4.7%

12

Ⅱ Financial Summary

7. Changes in Unit Price
The investment unit price temporarily dropped to 80,000 yen but has bounced back to
130,000 yen level at the moment.
(yen)

HCM出来⾼（右軸）Trading volume (right axis)

150,000

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

HCM
HCM

TSE REIT Index
東証REIT指数
140,000

22,0008,000
March 5, 2021
133,600 yen
7,000

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

130,000

120,000(unit)

6,000

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

5,000

110,000
4,000
100,000
January 2019
Conducted the second public
offering since IPO

90,0003,000

March 19, 2020
80,000 yen

2,000

80,0001,000

70,000060,0002017/7/31
Jul.
31, 2017

2018/1/31
Jan.
31, 2018

2018/7/31
Jul.
31, 2018(Note) TSE REIT Index is relativized to the closing price on July 31, 2017.

2019/1/31
Jan.
31, 2019

2019/7/31
Jul.
31, 2019

2020/1/31
Jan.
31, 2020

2020/7/31
Jul.
31, 2020

2021/1/31
Jan.
31, 2021

13

Status of Asset Management

14

Ⅲ Status of Asset Management

1. Portfolio Highlights
Key Data

Number ofproperties

Total acquisition
price

Total appraisal
value (Note 1)

Average appraisal
NOI yield

36

66.3 billion yen

71.5 billion yen

5.6%

Average buildingage (Note 1)

Average remaining
lease term (Note 1)

Ratio of fixed rents

Portfolio operationalrate

16.3 years

13.3 years

100%

100%

(±0 billion yen)(±0 property)(△0.5 years)(+0.5 years)(△0.3 billion yen)

(±0%)

(±0%)

(±0%)

(Note 1) “Total appraisal value” is indicated based on the appraisal report with January 31, 2021, as the appraisal date. “Average building age” and “Average remaining lease term” are average values with January
31, 2021, as the base date, calculated by dividing the remaining years to maturity by 365 and weighted by acquisition price. The figures are rounded down to the first decimal place. For properties having
multiple buildings, they indicate weighted-average figures based on area.
(Note 2) Figures in parentheses are comparison with the end of the 11th FP.

Diversification Status (Note)
Complex of paid nursing home,
medical service-related
facilities, etc.
19.5%

Core cities
11.1%

Medical servicerelated facilities
3.1%

Other areas
2.6%

Chubu area
1.9%

By Type

Paid nursing home
72.7%

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

Tokyo
Metropolitanarea
By Area 42.3%

Kinki area
42.1%

Three Major
Metropolitan areas
86.3%

15

Ⅲ Status of Asset Management

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

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

Management
stability

Carefully Selected, Excellent Operators

HCM has 12 operators with strong track records and highcreditworthiness, including industry-leading SOMPO Care, Benesse
Style Care and GREEN LIFE that belongs to SHIP HEALTHCARE.
Kyowakai is a major medical corporation that operates six
hospitals (2,026 beds) and four nursing care health facilities (495beds), etc.
Top Operators (Based on Acquisition Price) (Note 1)
Operator

Total capacity (Note 2)

Share (%)

4,373 people(ranked 22nd in Japan) (Note 3)

28.5

25,740 people(ranked 1st in Japan)

17.3

Kyowakai Medical Corporation

-

11.5

Benesse Style Care Co., Ltd.

18,886 people(ranked 2nd in Japan)

9.7

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

Business due diligence(before / after acquisition)
 Quantitative and qualitative assessment and analysis
 Regular visits to facilities and on-site inspections(interviews with facility directors, etc.)

Business
profile/activities

Operational
status offacilities

Financial status

Organizational
management

Compliance

Employment
environment(Abuse prevention
measures)(Securing staff ・Retention)(Note 1)
(Note 2)
(Note 3)The operators of SHIP Senri Building are separated based on an area basis, with Kyowakai Medical
Corporation for the Senri-Chuo Hospital portion and GREEN LIFE for the other portions.
(From) Weekly Senior Housing Newspaper, August 5-12, 2020 issue (No. 594)
Indicates the figure of Ship Healthcare Holdings Co., Ltd. as a whole.

Long-Term Fixed-Rent Lease Agreements
20 years or more
13.8%

Ratio offixed rents
100%

Averageremaininglease term
13.3 years

Less than
10 years
36.5%(Note)

10 years or more but
less than 20 years
49.7%(Note) The figure is calculated by weighted averaging with acquisition prices after dividing remaining
lease days by 365, with January 31, 2021, as reference date, rounded down to the first decimal
place.

16

Actions for Enhancement ofUnitholder Value

17

Ⅳ Actions for Enhancement of Unitholder Value

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

February 2017

February 2019

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

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

March 2021

・Nichii Home
Nishikokubunji（0.7 billion yen）
scheduled to be acquired(Number ofproperties)(billion yen)

50

<Target>

100.0

45

(Note)

100
90
80

40
64.8

Asset size

64.8

35
35

Number of properties

35

66.3

66.3

36

36

67
37

70

Pipeline

60
50

30
38.4

40.5

40.5

42.1
40
27

25
23.6

24

25

25

30

20

20

16

10

15
1st FP
Ended
July
2015

5th FP
Ended
July
2017

6th FP
Ended
January
2018

7th FP
Ended
July
2018

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

9th FP
Ended
July
2019

10th FP
Ended
January
2020

11th FP
Ended
July
2020

12th FP
Ended
January2021

13th FP
Ended
July
2021
(Forecast)18

Ⅳ Actions for Enhancement of Unitholder Value

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

Facilities andhousing for theelderly(already opened)

Operators

Facilities andhousing for theelderly(to be developed)

Expert know-how

Various routes
Sponsor andsupporting company(Note) networks

Supportagreement

Supportagreement

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

Extensive
warehousing
functions

Medical servicerelated facilities,
etc.

Utilization ofbridge SPCs

Nursing care andmedical service

Developers
Homebuilders

Extensive networks

Asset managementcompanyʼs own
networkFund management

Utilization of
warehousing ofsponsors and others

Finance

Expert know-how

Warehousing functions

Medicalcorporations

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

19

Ⅳ Actions for Enhancement of Unitholder Value

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

Facilities and housing
for the elderly(to be developed)

Medical servicerelated facilities,
etc.

Pipeline totaling around 22 billion yen
Paid nursing home

AMICA VILLA INAGE(Chiba-shi, Chiba; 85 rooms)
Paid nursing home

Granda Minami-Urawa(Kawaguchi-shi, Saitama; 58 rooms)

Paid nursing home

SOMPO CARE
La vie Re Kobe-Ikawadani(Kobe-shi, Hyogo; 80 rooms)
Paid nursing home

Sawayaka Sanokan(Sano-shi, Tochigi; 50 rooms)

Paid nursing home (to be developed)

Sunny Life Itabashi Shimura(Itabashi-ku, Tokyo; 83 rooms)
Paid nursing home (to be developed)

Medical Rehabilitation Home
Granda Yamahana(Sapporo-shi, Hokkaido; 52 rooms)(Note) In case a sponsor or an SPC formed by a sponsor, etc. decides to sell a healthcare facility they own, HCM has the first refusal rights to acquire the property. However, the acquisition isundecided and there is no guarantee that HCM will acquire the property in the future. The above properties are some of healthcare facilities owned by sponsors or SPCs formed by sponsors, etc.

20

Ⅳ Actions for Enhancement of Unitholder Value

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

Development of Properties

Sale & Leaseback

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

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

 Exit of effective-use(investment) projects
 Changes in business policy Flexible opening unrelated toeffective-use projects bylandlords
 Larger building size

Case Example
A sale & leaseback case. In
response to the operator's asset
replacement needs, based on its
medium- to long-term financial
strategies, the new fundestablished by a sponsor acquired
the facility in January 2021 on thepremise that it will be sold to HCM
in the future.

⇒ Leasing risks are limited as operators
are generally fixed beforehand

NOAH GARDEN Bloom View
(Sapporo-shi, Hokkaido;
54 rooms)

 Securing buyers after
development andcompletion

New development utilizing healthcare REITs

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



Developers, etc.

Operators

Case Example
The sponsor acquired the landin advance under theassumption of future sale to
HCM. In this case, the sponsor
led the entire project until thebuilding was completed incollaboration with the builder.
Opened in March 2021.

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

21

Ⅳ Actions for Enhancement of Unitholder Value

4. Actions for Hospital Projects
Investment & Management Policy
1

Opportunity of REIT Investment (Utilization)


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



Mostly self-owned by medical corporations, etc.

Major hospital needs

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

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

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

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

2
Investment & Management complying with the “Hospital
Real Estate Guidelines”
 Allocation of experts familiar with hospital business in the
Asset Management Company
 Conclusion of a long-term fixed-rent lease agreement, inprinciple

3
Investment ratio Together with facilities and housing for the elderly,
accounting for 80% or more of the portfolio
 No upper limit set for hospital real estate alone(Note) Calculated by the Asset Management Company based on the estimate value by KPMG Healthcare Japan Co.,
Ltd. as of June 2016.

Case Example
Property Name

Niigata Rehabilitation Hospital

Location

Niigata-shi, Niigata

Operator

Medical Corporation AIKOKAI

Number of beds

168 beds

 Captured needs for securitization of medical corporations.

4
Promotion for market expansion
 Participation in seminars for medical/nursing care facilitiesrelated operators
 Lectures at industry group meetings (Congress of Japan
Hospital Association, etc.)

 HCM acquired the property in November 2017 by utilizing thewarehousing function of Sumitomo Mitsui Finance and Leasing, one of thesponsors. It is the first case that J-REIT included hospital real estate in
the portfolio.
 Concluded a long-term (30 years) and fixed-rent lease agreement withthe medical corporation.
 HCM acquired only the land, skeleton of the building, elevators and the
medical corporation continues to own medical equipment and others.

22

Ⅳ Actions for Enhancement of Unitholder Value

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

Environment

・ Energy conservation and reduction of CO2
emissions

Specific Actions

Highly relevant SDGs

・ Renovation work for improving the efficiency of
air conditioning system using subsidies(GreenLife Moriguchi and Kobe Gakuentoshi
Building)

・ Elimination of the shortage of supply of housing ・ Procured funds through social finance (social loans
and social bonds)
for the elderly against the elderly population
・ Issued Impact Reports that summarize endeavors
・ Prevention of job separation due to nursing
toward addressing social issues (every December)care through the promotion of supply of nursing
care facilities
・ Supported the improvement of efficiency ofSocial・ Improvement of business efficiency andreduction of work burden for nursing care staff
・ Prevention of abuse of residents andharassment of facility staff
・ Response to the deterioration of hospitals andpromotion of earthquake resistance・ Established a remote work system (AssetManagement Company)

・ Work-life balance, health of staff, etc.

・ Implemented countermeasures against the spreadof COVID-19

・ Transparency in decision making

Governancenursing care business of operators with theintroduction of ICT system- Introduced EGAO link, a system for enhancing
efficiency of nursing care services (ASHEIM
Hikarigaoka and ASHEIM Bunkyohakusan)

・ Fair transaction (Appropriate management ofconflicts of interest)
・ Management of various risks (including
elimination of antisocial forces)

・ Separation of Executive Director of HCM and CEO of
the Asset Management Company (resolved at thegeneral meeting of unitholders in October 2020)
・ Established warehousing rules for transactions
with interested parties
・ Established a “Customer-Oriented Committee” atthe Asset Management Company

23

Ⅳ Actions for Enhancement of Unitholder Value

5. Actions for ESG (2) －Support for improving the efficiency oflong-term care work－
Effect of Introducing EGAO Link at ASHEIM Bunkyohakusan (July 2019 - September 2020)■System of EGAO Link
A system enabling understanding of situation, record input and response
to calls with smartphones possessed by the staff by linking sleep sensor,
nurse call and electronic medical chart with nurse call gateway
System of
SensorNurse Call

C Sleep SCAN

B Vi-nurse
Call notification• 24-hour monitoring of
respiratory condition• Capable of sleep assessment• Capable of individual setting of call
PARAMOUNT BED
notification in the phaseof sleep → arousal → uprise → bed leaving

Care Karte System
Content of call
Automatic recording•A wide range ofcompatibility withvarious sensors,
cameras, recording
systems andsmartphones

A CARECARTE• A system specializing inrecording from an on-site
perspective. Having highcustomization strength
for corporations. Responding

Aiphonealso to video andimage recording.

Call signal

FUJI DATA SYSTEM

D Nurse Call Gateway
Monitoring of sleep,
arousal, bed leaving
and respiratory
condition• Established a network system linking nurse
calls with smartphones at medical carefacilities
Making nurse calls by switching to signals for
smartphones

Smartphone

Sharing of recorded
information

Sumitomo Densetsu Co., Ltd.

Capable of understanding the condition,
inputting record and answering calls with asingle smartphone(Source) AS PARTNERS Co., Ltd.

■ Reduction of care staff
As of the end of September 2020, the number of persons had been
reduced by 3.5 people/month and working hours had been reduced by
616 hours/month.
July 31, 2019
Number of residents
Ratio of staff toresidents
Full-time employees

Sept. 30, 2020

Difference

48 people

43 people▲5 people

1.78:1

1.84:1▲0.06

14.5 people

12.5 people▲2 people

Contract employees

2 people2 people0 people

Part-time employees

5.6 people

6.9 people+1.3 people

Temporary workers

2 people0 people▲2 people

Nursing staff

2.8 people

2.0 people▲0.8 people

Staff per month

26.9 people

23.4 people▲3.5 people

Total working hours

4,734 hours

4,118 hours▲616 hours■Reducing burden of night-shift work for care staff
1. On September 30, 2019, we switched from a system with two nightshift staff and one semi-night-shift staff to a system with two night-shiftby reducing the semi-night shift, and as of September 30, 2020, wewere maintaining the new system.
2. As of September 30, 2020, following the reducing of the semi-night
shift, night-shift workers were still able to take two hours of breaks
every day.
3. Regular night inspections were terminated on October 1, 2019, and asof September 30, 2020, we had received no comments about it from
customers or the regulatory authority.
July 31, 2019

Number of night
shiftsTotal working
hours/month
Regular rounds

Sept. 30, 2020

Difference

2.5 people

2 people▲0.5 people

40 hours

32 hours▲8 hours

4 times(approx. 4 hours)

0 times▲4 times(▲4 hours)■Improving quality of nursing care services
The number of life rehabilitation sessions (a method for maintaining andimproving activities of daily living for the purpose of using residentsʼ
residual functions) that was provided increased by 1,214 sessions.
In addition, we are working to improve operations with the goal of
obtaining two hours per day, or 60 hours per month, to provide individual
activities (activities aimed at revitalizing each resident mentally andphysically). When EGAO Link was first introduced, individual activities wereused 20 hours a month, but as of September 30, 2020, it had increased
by 34 hours.
July 31, 2019
Life rehabilitation
Individual activities

Sept. 30, 2020

Difference

608 sessions

1,822 sessions+1,214 sessions

20 hours

54 hours+34 hours■ Summary and future actions
We are making good progress in reducing the number of employees and theburden of night-shift work. In terms of future actions, we will improvepolypharmacy (improving the harmful effects of medication by using
multiple drugs in combination) by utilizing electronic medical record data,
sleep data, etc. in nursing care records.

24

Ⅳ Actions for Enhancement of Unitholder Value

5. Actions for ESG (3) －Infectious disease countermeasures－Installation of Airness (low-concentration ozone generators)
 Green Life Co., Ltd. and Green Life Higashi Nihon Co., Ltd., which are both Ship Healthcare group companies have installed Airness(low-concentration ozone generators) at all of their facilities.
 Ozone, which has a strong oxidizing capacity, is used for deodorization and sterilization. In the medical and nursing care fields, it isused as a solution to improve air quality (e.g., odors), to provide livability and comfort, and to secure safety and health of
employees.
 Ongoing findings from research by universities and specialized institutions have been published indicating that the ozone generated
by this device is effective in inactivating the COVID-19 coronavirus.
[HCM-Owned Facility with Airness Installed]
・ Aquamarine Nishinomiyahama

・ Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

・ GreenLife Moriguchi

・ Hapine Kobe Uozaki Nibankan

・ Smiling Home Medice Adachi

・ SHIP Senri Building(Welhouse Senri Chuo)【Example of Installation of Airness 】

Smiling Home Medice Adachi

25Appendix

26

V Appendix

Portfolio Map

Ratio of investment inthree major
metropolitan areas

Strategic
investment inthree major
metropolitan
areas

42.1%

Chubu area

Other areas

1.9%

2 19 1

16

1
1 18
1

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

9

SOMPO CARE La vie Re Machidaonoji

10

SOMPO CARE La vie Re Azamino

11
12

SAWAYAKA Tachibanakan

SAWAYAKA Tagawakan

14

GOOD TIME HOME Fudo-mae

Tokyo metropolitan area

15

Bonsejour Yotsugi

16

Medical Home Bonsejour Itami

17

Kobe Gakuentoshi Building (Hapine Kobe
Gakuentoshi)

18

GreenLife Moriguchi Home for The Aged

19

Hapine Kobe Uozaki Nibankan

20Granda Tsuruma-Yamato

21

Smiling Home Medice Adachi

22

4

Aikoen Ichibankan Building (Aikoen
Ichibankan)

23

Hanakotoba Minami

27 26 25

24

Hanakotoba Miura

21
8

29
3

13

10

11
20

24

15

31
14

2

9

12

23

28
32

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

ASHEIM Bunkyohakusan

11.1%

7

Serviced housing for theelderly

ASHEIM Hikarigaoka

8

SAWAYAKA Mekarikan

30

5

7

12

42.3%

2.6%

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation Home Bonsejour
Komaki13

22

6Bonsejour Chitose-funabashi

6

Core cities

17

AQUAMARINE Nishinomiyahama

5

86.3%

Kinki area

1
2

1

SOMPO CARE Sompo no ie
Awajiekimae

2

SOMPO CARE Sompo no ie
Kobekamisawa

1

Niigata Rehabilitation Hospital

1

SHIP SENRI BUILDING

Paid nursing
home

25

SOMPO CARE La vie Re Hama-Kawasaki

26

Hanakotoba Shin-Yokohama

27

Hanakotoba Shin-Yokohama II

28

Hanakotoba Odawara

29

Verde Minowa

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

32

Sunny Life Kamakura

27

V Appendix

Details of Portfolio (1)Paid nursing home
1

2

3

4

5

AQUAMARINE
Nishinomiyahama

Bonsejour Chitose-funabashi

Bonsejour Hino

Bonsejour Musashi-shinjo

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

Location

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

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

438-1 Ochikawa,
Hino-shi, Tokyo

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

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

Nearest station

Hanshin Nishinomiya Stationon the Hanshin Main Line

Chitose-Funabashi Stationon the Odakyu Odawara Line

Mogusaen Stationon the Keio LineMusashi-Shinjo Stationon the JR Nambu Line

Shibusawa Station
on Odakyu Odawara Line

Construction completion

May 2007

March 1988

May 1990

February 1985

July 1991

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

117 million yen

49 million yen

43 million yen

36 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.0%

5.9%

6.0%

6.2%

6.4%

Appraisal value (Note 1)

2,060 million yen

974 million yen

818 million yen

643 million yen

850 million yen

Acquisition price (ratio)

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

724 million yen (1.1%)

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

Site area

2,587.93 m²

1,020.92 m²

2,211.28 m²

1,233.49 m²

2,588.04 m²

Leasable area

5,274.54 m²

2,342.17 m²

1,984.17 m²

1,710.43 m²

3,435.79 m²

Structure/
number of floors (Note 2)

RC, 5F

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

Number ofrooms/resident capacity

90 rooms, 100 people

42 rooms, 47 people

56 rooms, 58 people

46 rooms, 49 people

100 rooms, 101 people

occupancy rate (Note 3)

100.0%

85.1%

91.4%

93.9%

98.0%

Operator

GREEN LIFE

Benesse Style Care

Benesse Style Care

Benesse Style Care

Benesse Style Care

Remaining years of leaseagreement (Note 4)

16.3 years

5.3 years

5.3 years

5.8 years

6.3 years

28

V Appendix

Details of Portfolio (2)Paid nursing home

)

6

7

8

Medical Rehabilitation Home
Bonsejour Komaki

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

Location

3-1 Shiroyama,
Komaki-shi, Aichi

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

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

Nearest station

Ajioka Stationon the Meitetsu Komaki Line

Shakujii-Koen Stationon the Seibu Ikebukuro Line

Hakusan Stationon the Toei Subway Mita Line

Construction completion

March 1991

March 2006

Acquisition period

Fiscal period ended July 2015

Appraisal NOI (Note 1)

9

10

SOMPO CARE La vie Re
Machidaonoji

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

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

February 2007

October 2007

March 2004

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

92 million yen

76 million yen

74 million yen

193 million yen

156 million yen

Appraisal NOI yield (Note 1)

7.3%

5.5%

5.1%

5.3%

5.1%

Appraisal value (Note 1)

1,450 million yen

1,490 million yen

1,650 million yen

3,780 million yen

3,050 million yen

Acquisition price (ratio)

1,270 million yen (1.9%)

1,385 million yen (2.1%)

1,430 million yen (2.2%)

3,580 million yen (5.4%)

3,050 million yen (4.6%)

Site area

8,229.85 m²

2,868.46 m²

540.29 m²

7,404.13 m²

2,748.64 m²

Leasable area

8,858.49 m²

3,628.60 m²

2,507.25 m²

7,720.17 m²

5,789.25 m²

Structure/
number of floors (Note 2)

SRC RC S, 10F

RC, 3FRC, 8F

RC, B1 6F

RC, B1 5F

Number ofrooms/resident capacity

124 rooms, 165 people

83 rooms, 89 people

50 rooms, 52 people

163 rooms, 169 people

145 rooms, 145 people

occupancy rate (Note 3)

76.4%

88.8%

84.6%

66.9%

84.1%

Operator

Benesse Style Care

AS PARTNERS

AS PARTNERS

Sompo Care

Sompo Care

Remaining years of leaseagreement (Note 4)

6.3 years

13.1 years

6.1 years

6.7 years

6.4 years

Nakagawa Stationon the Yokohama Municipal
Subway Blue Line29

V Appendix

Details of Portfolio (3)Paid nursing home
11

12

13

SAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME Fudo-mae

Bonsejour Yotsugi

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

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

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

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

October 2005

November 2005

January 2006

March 1992

March 1989

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2016

Appraisal NOI (Note 1)

93 million yen

85 million yen

25 million yen

91 million yen

48 million yen

Appraisal NOI yield (Note 1)

6.1%

6.2%

6.4%

5.2%

5.8%

Appraisal value (Note 1)

1,530 million yen

1,400 million yen

379 million yen

1,950 million yen

886 million yen

Acquisition price (ratio)

1,520 million yen (2.3％)

1,380 million yen (2.1％)

390 million yen (0.6％)

1,740 million yen (2.6%)

824 million yen (1.2%)

Site area

3,359.66 m²

3,758.26 m²

4,300.90 m²

1,206.60 m²

1,136.46 m²

Leasable area

5,652.94 m²

4,720.46 m²

2,366.20 m²

3,400.20 m²

1,962.89 m²

Structure/
number of floors (Note 2)

RC, B1 6FRC, 4FRC, 3F

RC, B1 5F

RC, 5F

Number ofrooms/resident capacity

104 rooms, 104 people

95 rooms, 95 people

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

occupancy rate (Note 3)

97.1%

97.9%

98.3%

86.6%

95.4%

Operator

Sawayaka Club

Sawayaka Club

Sawayaka ClubJAPAN LIFEDESIGN

Benesse Style Care

Remaining years of leaseagreement (Note 4)

7.0 years

7.0 years

7.0 years

5.8 years

4.9 years

Location
Nearest station

14

Fudo-mae Stationon the Tokyu Meguro Line

1530

V Appendix

Details of Portfolio (4)Paid nursing home
18

19

20

16

17

Medical Home Bonsejour Itami

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

GreenLife Moriguchi Home for
Hapine Kobe Uozaki Nibankan
The Aged

Location

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

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

Nearest station

Hankyu Itami Stationon the Hankyu Railway Itami
Line

Gakuentoshi Stationon the Kobe Municipal Subway
Seishin-Yamate Line

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

Construction completion

March 1989

January 2009

September 2006

March 2010

March 1998

Acquisition period

Fiscal period ended July 2016

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

36 million yen

225 million yen

220 million yen

48 million yen

53 million yen

Appraisal NOI yield (Note 1)

7.1%

5.2%

5.3%

5.2%

5.3%

Appraisal value (Note 1)

557 million yen

4,410 million yen

4,400 million yen

974 million yen

1,000 million yen

Acquisition price (ratio)

514 million yen (0.8%)

4,320 million yen (6.5%)

4,150 million yen (6.3%)

930 million yen (1.4%)

1,000 million yen (1.5%)

Site area

1,976.11 m²

2,742.81 m²

5,872.83 m²

932.94 m²

2,877.11 m²

Leasable area

2,129.87 m²

12,636.48 m²

8,356.85 m²

1,772.89 m²

3,427.08 m²

Structure/
number of floors (Note 2)

SRC, 11F (Exclusive portion)

RC, B1 9F

S RC, 9F

S, B1 4F

RC S, 5F

Number ofrooms/resident capacity

62 rooms, 64 people

131 rooms, 138 people

155 rooms, 189 people

47 rooms, 47 people

73 rooms, 90 people

occupancy rate (Note 3)

95.3%

99.3%

100.0%

100.0%

77.8%

Operator

Benesse Style Care

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse Style Care

Remaining years of leaseagreement (Note 4)

6.3 years

20.1 years

18.7 years

20.1 years

1.1 years

Granda Tsuruma-Yamato

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

31

V Appendix

Details of Portfolio (5)Paid nursing home
21

22

23

24

Smiling Home Medice Adachi

Aikoen Ichibankan Building(Aikoen Ichibankan)

Hanakotoba Minami

Hanakotoba Miura

SOMPO CARE La vie Re HamaKawasaki

Location

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

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

3-5 Suwacho,
Miura-shi, Kanagawa

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

Nearest station

Rokucho Stationon the Tsukuba Express

Niigata Stationon the JR Shinetsu Main Line

Misakiguchi Stationon the Keikyu Kurihama Line

Odasakae Stationon the JR Nambu Line

Construction completion

November 2005

February 2010

June 2007

March 2007

Acquisition period

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

120 million yen

45 million yen

56 million yen

35 million yen

90 million yen

Appraisal NOI yield (Note 1)

5.3%

5.9%

5.2%

5.7%

5.2%

Appraisal value (Note 1)

2,460 million yen

861 million yen

1,180 million yen

663 million yen

1,820 million yen

Acquisition price (ratio)

2,253 million yen (3.4%)

770 million yen (1.2%)

1,071 million yen (1.6%)

615 million yen (0.9%)

1,710 million yen (2.6%)

Site area

2,069.41 m²

2,597.52 m²

428.76 m²

1,017.55 m²

2,832.33 m²

Leasable area

3,870.98 m²

4,311.20 m²

1,710.68 m²

1,959.64 m²

4,060.21 m²

Structure/
number of floors (Note 2)

RC, 4F

S, 5F

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

82 rooms, 82 people

90 rooms, 90 people

51 rooms, 51 people

53 rooms, 54 people

58 rooms, 58 people

occupancy rate (Note 3)

92.7%

100.0%

98.0%

100.0%

87.9%

Operator

GREEN LIFE HIGASHI NIHON
Co., Ltd.

Medical Corporation AIKOKAI

Proud Life Inc.

Proud Life Inc.

Sompo Care

Remaining years of leaseagreement (Note 4)

16.0 years

15.5 years

11.8 years

11.8 years

6.9 years

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

Fiscal period ended January 2019 Fiscal period ended January 201925

Fiscal period ended July 201932

V Appendix

Details of Portfolio (6)Paid nursing home
26

27

28

29

30

Hanakotoba Shin-Yokohama

Hanakotoba
Shin-Yokohama II

Hanakotoba Odawara

Verde Minowa

Verde Hotaka

1-11-5 Shinyokohama,
Kohoku-ku, Yokohama-shi,
Kanagawa
Shin-Yokohama Stationon the Yokohama Municipal
Subway Blue Line and the JR
Yokohama Line

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

Construction completion

March 2004

Acquisition period

Location

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

839-4 Azamachiyabo, Kamishiba,
1221 Azamaebara,
Misatomachi, Takasaki-shi,
Oazanamashina, Kawaba-mura,
Gunma
Tone-gun, Gunma

Kamonomiya Stationon the JR Tokaido Line

Takasaki Stationon the JR Takasaki Line

Numata Stationon the JR Joetsu Line

April 2007

September 2009

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

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

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Appraisal NOI (Note 1)

109 million yen

22 million yen

49 million yen

109 million yen

91 million yen

Appraisal NOI yield (Note 1)

5.2%

5.8%

5.6%

6.7%

6.9%

Appraisal value (Note 1)

2,230 million yen

377 million yen

946 million yen

1,690 million yen

1,430 million yen

Acquisition price (ratio)

2,071 million yen (3.1%)

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

1,620 million yen (2.4%)

1,328 million yen (2.0%)

Site area

894.00 m²

375.00 m²

1,202.12 m²

７,920.29 m2

4,375.31 m²

Leasable area

5,230.23 m²

1,837.29 m²

2,203.42 m²

11,098.17 m²

6,352.86 m²

Structure/
number of floors (Note 2)

RC, 9F

RC, B1 7FRC, 4F

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

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

Number ofrooms/resident capacity

136 rooms, 136 people

29 rooms, 30 people

60 rooms, 65 people

174 rooms, 206 people

121 rooms, 174 people

occupancy rate (Note 3)

94.9%

93.3%

98.5%

92.7%

98.9%

Operator

Proud Life Inc.

Proud Life Inc.

Proud Life Inc.

Verde Corporation

Verde Corporation

Remaining years of leaseagreement (Note 4)

11.8 years

11.8 years

11.8 years

6.3 years

6.3 years

Nearest station

33

V Appendix

Details of Portfolio (7)Serviced housing for the elderly

Paid nursing home
31

32

1

2

Sunny Life Kita-Shinagawa

Sunny Life Kamakura

SOMPO CARE Sompo no ie
Awajiekimae

SOMPO CARE Sompo no ie
Kobekamisawa

Location

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

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

Nearest station

Shimbamba Stationon the Keikyu Line

Shonan-Machiya Stationon the Shonan Monorail

Construction completion

September 2018

September 2014

June 2009

June 2009

Acquisition period

Fiscal period ended July 2019

Fiscal period ended July 2020

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

89 million yen

76 million yen

116 million yen

72 million yen

Appraisal NOI yield (Note 1)

4.9%

5.3%

6.0%

6.0%

Appraisal value (Note 1)

1,950 million yen

1,550 million yen

2,170 million yen

1,340 million yen

Acquisition price (ratio)

1,825 million yen (2.8%)

1,418 million yen (2.1%)

1,930 million yen (2.9%)

1,200 million yen (1.8%)

Site area

1,105.12 m²

2,055.67 m2

1,251.26 m²

743.22 m²

Leasable area

2,135.54 m²

3,817.91 m2

5,745.15 m²

4,058.35 m²

Structure/
number of floors (Note 2)

S, 3F

S, 5F

RC, 12F

S, 9F

Number ofrooms/resident capacity

66 rooms, 66 people

128 rooms, 128 people

137rooms, 137 people

85 rooms, 85 people

occupancy rate (Note 3)

98.5%

97.7%

94.2%

82.4%

Operator

Kawashima Corporation

Kawashima Corporation

Sompo Care

Sompo Care

Remaining years of leaseagreement (Note 4)

22.7 years

18.7 years

13.5 years

13.5 years

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

8-2-5 Kamisawadori, Hyogo-ku,
Kobe-shi, Hyogo
Kamisawa Stationon the Kobe Municipal Subway
Seishin-Yamate Line34

V Appendix

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

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

1

1

Niigata Rehabilitation Hospital

SHIP SENRI BUILDING

Location

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

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

Nearest station

Hayadori Stationon the JR Hakushin Line

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

Construction completion

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

September 2008

Acquisition period

Fiscal period ended January 2018

Fiscal period ended July 2019

Appraisal NOI (Note 1)

152 million yen

680 million yen

Appraisal NOI yield (Note 1)

7.4%

5.2%

Appraisal value (Note 1)

2,260 million yen

14,100 million yen

Acquisition price (ratio)

2,060 million yen (3.1%)

12,920 million yen (19.5%)

Site area

15,056.85 m²

4,202.65 m²

Leasable area

13,476.55 m²

24,813.85 m²

Structure/
number of floors (Note 2)

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

RC, B1 11F

Number ofrooms/resident capacity

168 beds

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

occupancy rate (Note 3)-

Paid nursing home: 100 %Operator

Medical Corporation AIKOKAI

Kyowakai Medical Corporation
GREEN LIFE

Remaining years of leaseagreement (Note 4)

26.1 years

17.7 years(Note 1) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2021. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2) As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3) The bed occupancy rate indicates the ratio obtained by dividing the number of residents by the capacity, rounded off to the first decimal place. The number of residents used in the calculation is described in the latest
Property Disclosure Statement of Important Matters, which the Asset Management Company obtained as of the date of preparing this document, for the facilities and housing for the elderly owned by HCM.
(Note 4) Remaining years of lease agreement is as of January 31, 2021, rounded down to the first decimal place.

35

V Appendix

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

Operator nameGREEN LIFE Co.,Ltd.
GREEN LIFEHIGASHI NIHON
Co., Ltd.

Sompo Care Inc.

Kyowakai Medical
Corporation

Benesse Style
Care Co., Ltd.

Proud Life Inc.

Attribute

Facilities
and housing
for theelderly

Hospital

28

-

38

434

4

(Note 4)330

27

Remarks

Facilities owned by HCM

Share
(%)

(Note 2)

Consolidated
subsidiary of SHIPHEALTHCAREHOLDINGS, INC.,
which is listed on the
TSE First Section

A nursing care business that plays acentral role in the Lifecare Business ofSHIP HEALTHCARE HOLDINGS, INC.
Operates nursing care facilities
nationwide.

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

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

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

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

17.1

-

A major medical corporation operating awide range of businesses including six
hospitals (2,026 beds), four long-termcare health facilities (495 beds), andhome care support. Provides safe andconvenient medical/nursing careservices ranging from acute-stage
medical care to rehabilitation, home
medical care, and nursing care.

SHIP SENRI BUILDING (Senri-Chuo Hospital)

11.4

-

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

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

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

9.6-

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

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

7.5

-

-

6

28.2

(Note 3)36

V Appendix

Operator List (2)Number of
facilities
Operator name

Sawayaka Club Co., Ltd.

Kawashima Corporation

Verde Corporation(Note 1)

Facilities andhousing forthe elderly

86

126

5

Attribute

Remarks

Facilities owned by HCM

Share
(%)

(Note 2)

Hospital

A consolidated subsidiary of
UCHIYAMA HOLDINGS Co.,
Ltd., which is listed on the
TSE First Section

Operates facilities under the
SAWAYAKA brand (low price range
without advance fees) around Japan,
centering on Fukuoka Prefecture.

SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

4.9

Unlisted company

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

Sunny Life Kita-Shinagawa
Sunny Life Kamakura

4.8-

Unlisted company

A core company of the Hotaka Kai
Group, a nursing care/welfare businessgroup holding the largest number ofrooms in Gunma Prefecture.

Verde Minowa
Verde Hotaka

4.4Operating hospitals and clinics as wellas paid nursing home with careservice, group home and long-termcare health facilities in Niigata
Prefecture

Aikoen Ichibankan Building(Aikoen Ichibankan)
Niigata Rehabilitation Hospital

4.2

-

-

Medical Corporation
AIKOKAI

11

2

A medical corporation
which belongs to NSG
Group with sales of over
100 billion yen (Note 5)

AS PARTNERS Co., Ltd.

20-

Unlisted company

Operates paid nursing homes and dayservice facilities under the ASHEIM
brand in the Tokyo Metropolitan Area.

ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan

4.2-

Unlisted company(Capital partnership byNomura Real Estate
Holdings, Inc.)

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

GOOD TIME HOME Fudo-mae

2.6JAPAN LIFEDESIGN Inc.

3

(Note 1) “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of March 31, 2020).
(Note 2) Shares based on acquisition price are indicated. Furthermore, the operators of SHIP Senri Building are separated based on an area basis, with Kyowakai Medical Corporation for the Senri-Chuo Hospital portion and GREEN LIFE Co., Ltd.
for the other portions.
(Note 3) The share of GREEN LIFE HIGASHI NIHON Co., Ltd. is 3.4%.
(Note 4) Only the number of long-term care health facilities is indicated.
(Note 5) Indicates the actual figures in fiscal 2018 based on NSG Groupʼs website.

37

V Appendix

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

Property nameAppraisal company

Appraisal value(million yen)(A)

Direct capitalization
methodDCF method

Indicatedvalue(million yen)

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)End of July 2020
Appraisal value(million yen)(B)

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

AQUAMARINE Nishinomiyahama

Rich Appraisal
Institute Co., Ltd.

2,060

2,070

5.3

2,050

5.0

5.5

117

2,140

△80

Bonsejour Chitose-funabashi

The Tanizawa Sogo
Appraisal Co., Ltd.

974

993

4.4

966

4.5

4.6

49

974

0

Bonsejour Hino

The Tanizawa Sogo
Appraisal Co., Ltd.

818

832

4.8

812

4.9

5.0

43

818

0

Bonsejour Musashi-shinjo

The Tanizawa Sogo
Appraisal Co., Ltd.

643

653

5.1

638

5.2

5.3

36

643

0

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

The Tanizawa Sogo
Appraisal Co., Ltd.

850

864

5.0

844

5.1

5.2

47

850

0

Medical Rehabilitation Home Bonsejour Komaki

The Tanizawa Sogo
Appraisal Co., Ltd.

1,450

1,460

5.5

1,440

5.6

5.7

92

1,450

0

ASHEIM Hikarigaoka

Japan Real Estate
Institute

1,490

1,500

4.8

1,480

4.6

5.0

76

1,570

△80

ASHEIM Bunkyohakusan

Japan Real Estate
Institute

1,650

1,660

4.4

1,630

4.2

4.6

74

1,650

0

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate
Institute

3,780

3,820

4.9

3,730

4.7

5.1

193

3,780

0

SOMPO CARE La vie Re Azamino

Japan Real Estate
Institute

3,230

3,270

4.6

3,190

4.4

4.8

156

3,230

0

SAWAYAKA Tachibanakan

Japan Real Estate
Institute

1,530

1,540

5.6

1,510

5.4

5.8

93

1,530

0

SAWAYAKA Mekarikan

Japan Real Estate
Institute

1,400

1,410

5.7

1,390

5.5

5.9

85

1,400

0

SAWAYAKA Tagawakan

Japan Real Estate
Institute

379

382

5.8

376

5.6

6.0

25

380

△1

GOOD TIME HOME Fudo-mae

Japan Real Estate
Institute

1,950

1,970

4.4

1,920

4.2

4.6

91

1,950

0

Bonsejour Yotsugi

The Tanizawa Sogo
Appraisal Co., Ltd.

886

902

4.7

879

4.8

4.9

48

886

0

Medical Home Bonsejour Itami

The Tanizawa Sogo
Appraisal Co., Ltd.

557

566

5.1

553

5.2

5.3

36

557

0

Kobe Gakuentoshi Building (Hapine Kobe Gakuentoshi)

Daiwa Real EstateAppraisal Co., Ltd.

4,410

4,470

4.7

4,390

4.5

4.9

225

4,420

△10

GreenLife Moriguchi Home for The Aged

Daiwa Real EstateAppraisal Co., Ltd.

4,400

4,460

4.6

4,370

4.4

4.8

220

4,400

0

Hapine Kobe Uozaki Nibankan

Daiwa Real EstateAppraisal Co., Ltd.

974

987

4.7

968

4.5

4.9

48

995

△21

Granda Tsuruma-Yamato

The Tanizawa Sogo
Appraisal Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

1,060

0

38

V Appendix

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

Property nameAppraisal company

Appraisal value(million yen)(A)

Direct capitalization
methodDCF method

Indicatedvalue(million yen)

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)End of July 2020
Appraisal value(million yen)(B)

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

Smiling Home Medice Adachi

The Tanizawa Sogo
Appraisal Co., Ltd.

2,460

2,490

4.7

2,440

4.8

4.9

120

2,460

0

AIKOEN ICHIBANKAN Building

The Tanizawa Sogo
Appraisal Co., Ltd.

861

866

5.2

859

5.3

5.4

45

865

△4

Hanakotoba Minami

Japan Real Estate
Institute

1,180

1,200

4.6

1,160

4.4

4.8

56

1,190

△10

Hanakotoba Miura

The Tanizawa Sogo
Appraisal Co., Ltd.

663

671

4.9

659

5.0

5.1

35

665

△2

SOMPO CARE La vie Re Hama-Kawasaki

JLL Morii Valuation &Advisory K.K.

1,820

1,850

4.6

1,780

4.4

4.8

90

1,820

0

Hanakotoba Shin-Yokohama

Japan Real Estate
Institute

2,230

2,260

4.5

2,200

4.3

4.7

109

2,230

0

Hanakotoba Shin-Yokohama II

Japan Real Estate
Institute

377

379

5.1

375

4.9

5.3

22

401

△24

Hanakotoba Odawara

The Tanizawa Sogo
Appraisal Co., Ltd.

946

960

4.9

940

4.8〜5.0

5.1

49

948

△2

Verde Minowa

Daiwa Real EstateAppraisal Co., Ltd.

1,690

1,710

5.0

1,680

4.8

5.2

109

1,700

△10

Verde Hotaka

Daiwa Real EstateAppraisal Co., Ltd.

1,430

1,440

5.4

1,420

5.2

5.6

91

1,430

０

Sunny Life Kita-Shinagawa

Daiwa Real EstateAppraisal Co., Ltd.

1,950

1,980

4.5

1,930

4.3

4.7

89

1,950

0

Sunny Life Kamakura

The Tanizawa Sogo
Appraisal Co., Ltd.

1,550

1,560

4.6

1,540

4.7

4.8

76

1,550

0

SOMPO CARE Sompo no ie Awajiekimae

Japan Real Estate
Institute

2,170

2,190

5.2

2,140

5.0

5.4

116

2,170

0

SOMPO CARE Sompo no ie Kobekamisawa

Japan Real Estate
Institute

1,340

1,350

5.2

1,320

5.0

5.4

72

1,340

0

Niigata Rehabilitation Hospital

Japan Real Estate
Institute

2,260

2,270

6.6

2,250

6.4

6.8

152

2,260

0

SHIP SENRI BUILDINGThe Tanizawa Sogo
Appraisal Co., Ltd.

14,10014,4004.5

14,000

4.5〜4.6

4.7

680

14,200△100

71,51872,455―70,879

―

―

3,735

71,862△344

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

“Appraisal value” is based on the appraisal report with January 31, 2021, as the appraisal date.
“Discount rate” represents a yield used to discount net cash flow during an analysis period and terminal value at the end of an analysis period back to present value. The indicated figures are those used by the respective
appraisal organizations. For Hanakotoba Odawara, the rate is 4.8% for 1~2 years and 5.0% for 3 years onward; and for SHIP Senri Building, the rate is 4.5% for 1~3 years and 4.6% for 4 years onward.
“Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with January 31, 2021 as the appraisal date, rounded down to the nearest million yen. In addition,
NOI is revenue before deducting depreciation and differs from NCF (net cash flow), which is the amount calculated by adding the gain on investment from security deposits, etc. to NOI and deducting capital expenditures. The
same shall apply hereinafter in this document.

39

V Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 12th Fiscal Period)(Unit: thousand yen)

Property nameReal estate lease businessrevenue

Real estate lease business expenses

Rent
revenue

RepairexpensesOtherrevenue

Property tax

Outsourcing

Insurance
expenses

Depreciation
andamortization

NOI (Note 2)
Other

AQUAMARINE Nishinomiyahama

28,509

4,264

2,100

5,469

222

16,053400

54,886

Bonsejour Chitose-funabashi

5,585

1,794

224

―

112

3,048

404

21,388

Bonsejour Hino

5,070

1,240

214

―

86

3,130

400

19,473

Bonsejour Musashi-shinjo

4,102

1,011

167

―

75

2,447

400

16,155

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa

8,406

1,820

213

―

154

5,817

400

21,093

Medical Rehabilitation Home Bonsejour Komaki

14,148

4,565

201

―

355

8,627

400

39,535ASHEIM Hikarigaoka

14,542

3,824

381

―

162

9,773

400

40,980ASHEIM Bunkyohakusan

12,160

2,621

381

―

129

8,626

400

38,654

SOMPO CARE La vie Re Machidaonoji

46,518

5,905

780

1,168

392

37,871400

96,35333,619

4,742

780

840

285

26,571

400

78,174

26,493

2,655

1,140

―

371

21,927400

47,290SAWAYAKA Mekarikan

25,999

2,964

1,140

―

273

21,222400

43,456SAWAYAKA Tagawakan

8,403

1,108

1,140

―

119

5,635

400

12,929GOOD TIME HOME Fudo-mae

14,648

3,099

600

380

182

9,986

400

46,338

Bonsejour Yotsugi

4,952

968

223

―

73

3,286

400

20,722

Medical Home Bonsejour Itami

6,519

1,376

371

―

111

4,260

400

13,955

Kobe Gakuentoshi Building (Hapine Kobe
Gakuentoshi)

52,158

9,577

900

857

579

39,844400

113,185

GreenLife Moriguchi Home for The Aged

37,304

6,937

1,363

4,008

379

24,215400

106,910

Hapine Kobe Uozaki Nibankan

9,844

1,400

1,200

283

90

6,470

400

24,125Granda Tsuruma-Yamato

7,300

1,938

618

―

152

4,191

400

27,057

SOMPO CARE La vie Re Azamino
SAWAYAKA Tachibanakan

Not disclosed (Note 1)40

V Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 12th Fiscal Period)(Unit: thousand yen)

Real estate lease businessrevenue
Property nameRent
revenue

Real estate lease business expenses

Otherrevenue

Propertytax

Outsourcing

RepairexpensesInsurance
expenses

Depreciation
andamortization

NOI (Note 2)
Other

Smiling Home Medice Adachi

15,771

3,229

540

772

177

10,653400

60,089AIKOEN ICHIBANKAN Building

8,813

2,559

780

330

112

4,630

400

22,478

Hanakotoba Minami

8,405

1,539

600

708

79

5,078

400

27,272

Hanakotoba Miura

8,587

1,540

600

410

88

5,547

400

17,360

SOMPO CARE La vie Re Hama-Kawasaki

18,546

3,415

2,770

394

206

11,359400

45,171

Hanakotoba Shin-Yokohama

14,796

4,384

900

402

249

8,460

400

55,576

Hanakotoba Shin-Yokohama II

6,174

2,500

600

727

92

1,853

400

10,491

8,284

1,378

600

502

99

5,304

400

24,61925,967

5,256

1,020

650

508

18,132400

56,073

Verde Hotaka

24,571

2,220

1,020

744

249

19,937400

45,495Sunny Life Kita-Shinagawa

10,331

2,943

600

―

119

6,265

401

45,434

Sunny Life Kamakura

10,352

―

720

404

177

8,650

400

41,197

SOMPO CARE Sompo no ie Awajiekimae

27,056

4,919

510

―

275

20,952400

58,353

SOMPO CARE Sompo no ie Kobekamisawa

17,160

2,904

510

530

183

12,632400

35,761

Niigata Rehabilitation Hospital

27,780

9,844

1,030

600

387

15,418500

77,518SHIP SENRI BUILDING

79,97527,236

1,500

―

1,183

49,655400

341,482

678,866

139,689

28,442

20,182

8,502

467,542

14,506

1,847,045

Hanakotoba Odawara
Verde Minowa

Total(Note 1)
(Note 2)Not disclosed (Note 1)

2,058,370 2,047,415

10,954”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants. The total is the sum of amounts received as rent
for the fiscal period under review based on the lease agreements.
“NOI” = Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

41

V Appendix

Balance Sheet and Statement of Income for the 12th Fiscal Period

Balance Sheet

Statement of Income(Unit: thousand yen)

(Unit: thousand yen)
11th Fiscal Period
ended July 2020

11th Fiscal Period
ended July 2020

12th Fiscal Period
ended January 2021
Operating revenue

AssetsCurrent assets

1,889,055

2,101,451

Lease business revenue

Cash and deposits

1,624,242

1,792,280

Other lease business revenue

145,223

180,725

Cash and deposits in trust

Operating expenses

12th Fiscal Period
ended January 2021

2,023,819

2,058,370

2,015,035

2,047,415

8,783

10,954

951,651

990,458

Prepaid expenses

119,589

128,445

Expenses related to rent business

652,411

678,866

Non-current assets

66,926,310

66,640,351

Asset management fee

196,932

200,051

Property, plant and equipment

66,696,041

66,423,062

Asset custody fee

3,408

3,435

795

596

Administrative service fees

21,48022,156

Investments and other assets

229,473

216,691

Directorsʼ compensations

3,000

3,900

Deferred assets

39,04731,582

Property tax

26,307

28,115Intangible assets

Investment unit issuance expenses

19,272

12,848Investment corporation bond issuance costs

19,774

18,733

68,854,413

68,773,384

Total assets
Liabilities

4,351,659

7,668,378

Operating accounts payable

13,05550,377

Short-term loans payable

700,000－

3,000,000

7,000,000

Current liabilities

Current portion of long-term loans payable
Accounts payable – other44,45831,796

Accrued expenses

236,790

241,316966

907

Accrued consumption taxes

18,3597,970

Advances received

337,618

335,882

Deposits received

410

126

31,389,820

28,104,072

Income taxes payableNon-current liabilities
Investment corporation bonds

2,000,000

2,000,000

Long-term loans payable

2,745,000

24,150,000

Tenant leasehold and security deposits
Tenant leasehold and security deposits intrust
Derivatives liabilities

1,805,509

1,805,509

86,766

48,11153,934

1,072,167

1,067,911

Non-operating income

2,398

1,106

Interest income

10

9

1,891

－

Reversal of distribution payable

367

1,096

Other

128

－

155,669

158,052

86,08987,947

7,800

7,800

6,424

6,424

1,040

1,040

Other operating expenses
Operating income

Insurance income

Non-operating expenses
Interest expenses
Interest expenses on investment corporationbonds
Amortization of investment unit issuance
expenses
Amortization of investment corporation bondissuance costs
Borrowing expenses

54,31454,839Ordinary income

918,896

910,964

Income before income taxes

918,896

910,964

Income taxes - current

968

908

Income taxes - deferred

86,766△7

2

Total income taxes

960

911

47,336

61,746

Net income

917,935

910,053207

50

40,20647,53035,742,479

35,772,451

Retained earnings brought forward
Unappropriated retained earnings (undisposed
loss)

958,141

957,584

Unitholdersʼ equity

33,160,269

33,062,679

Unitholders' capital, net

32,202,128

32,105,095

OtherTotal liabilities
Net assets

Surplus958,141

957,584

Valuation and translation adjustments△47,336△ 61,746△47,336△ 61,746

Total net assets

33,112,933

33,000,933

Total liabilities and net assets

68,854,413

68,773,384

Deferred gains or losses on hedges

42

V Appendix

Information Related to Investment Units(As of the end of the 12th fiscal period)

Status of Unitholders

Other companies
5.0%
Securities
companies
4.2%

Ratio of Number ofInbestment Unitsby Unitholder Type
Foreigninvestors
9.9%

Total
311,001units

Individuals,
etc,
31.3%

List of Top Unitholders

Rario of Number ofUnitholders
by Unitholder Type
Securities
companies
0.1%
Financial
institutions
0.3%

Ranking

Other companies
1.5%
Custody Bank of Japan, Ltd.
(Trust Account)

80,49025.9(Note)

2

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

31,578

10.2

Individuals,
etc,
97.5%

3

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

12,862

4.1

4

NORTHERN TRUST CO. (AVFC) RE
FIDELITY FUNDS

12,107

3.9

5

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

8,305

2.7

6

Morgan Stanley MUFG Securities Co.,
Ltd.

5,727

1.8

7

Credit Suisse AG

5,093

1.6

NEC Capital Solutions Limited

4,000

1.3

SHIP HEALTHCARE HOLDINGS INC.

4,000

1.3

Sumitomo Mitsui Banking Corporation

4,000

1.3

168,16254.1

Foreigninvestors
0.6%(Note) Decreased by 223 from the previous fiscal period

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

7.4%
5.2%
4.7%

9.1%
4.9%
4.2%

9.9%
5.0%
4.2%
Foreigninvestors

48.0%

45.4%

50.3%

49.6%

49.6%

Other
companies
Securities
companies
Financial
institutions

35.2%

8th
FP
第8期
(Note)

36.0%

9th FP
第9期

32.4%

32.2%

31.3%

10th FP
第10期

11th FP
第11期

12th
FP
第12期

Ratios in the graphs are rounded to the first decimal place.

Ownership ratio
(%)

１

Total
15,560peopleFinancial
institutions
49.6%

6.6%
7.1%
3.1%

Name

Number ofinvestment
units owned(units)8

Individuals, etc,

Total

43

V Appendix

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

Upgrades and Expansion of Healthcare Facilities
Backed by Government Policy

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

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

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

15000

Estimate

36.8%
32.8%

30.0%

10000
10,71810,854

5000

1985
1985年

1,109
717

6,723

21.4%

9.1%
1,407
1,160

1,734
1,613

1,497
2,180

1,522
2,260

1,643
2,277

2005
2005年

2015
2015年

2025
2025年

2035
2035年

2045
2045年

5.7%

1995
1995年

17.8%

7,740 19.6%

12.7%

10.3%
776 3.9%
471

0

20.1%

14.5%

8,577

9,218

20%
10%
0%

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

Other
その他

(Thousand households)

30,000

ActualEstimate

34.0%

20,000

39.0%

37.4%

35.7%

9,365

Guidelines Concerning
REITs Targeting Hospital
Real Estate

March
2016

Housing Life Basic Plan
(nationwide plan)

40.0%

Outcomeindicator

50%

6,590

6,879

6,756

6,606

6,510

6,763

6,693

6,666

6,870

6,740

Resident Capacity

6,420

5,525

5,928

7,025

7,512

7,959

8,418

8,963

4,791
2010
2010年

2015
2015年

2020
2020年

2025
2025年

2030
2030年

2035
2035年

2040
2040年

Resident Capacity

20%

230

10%

thousand people

690

thousand people

thousand people

0%

0

2005

定員数（人）
Resident
capacity

400,000

1.0%
0.7%

0.7%

195,972

216,174

1.1%

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

1.6%

391,144424,828

482,792

518,507552,350

2011

2012

2013

2014

2015

2016

2017

0.5%

8,000

0.0%

7,000

2018

2019

0.70%

0.72%

6,000

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

200,000

0.50%

0.61%

0.64%

0.67%

1.00%

0.50%

0.29%

1,955

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

1,747

1,569

1,466
141
674

1,344
123
664

1,344
113
633

118
771

122
729

131
719

141
704

5,476

5,687

5,880

6,050

6,130

6,231

6,318

2013年
2013
調査
survey

2014年
2014
調査
survey

2015年
2015
調査
survey

2016年
2016
調査
survey

2017年
2017
調査
survey

2018年
2018
調査
survey

2019年
2019
調査
survey

2,000
1,000

100,000
89,122

2,159

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

4,000
3,000

0.42%

0.01%
3,448

Number of hospitals with earthquake resistance in all buildings
全ての建物に耐震性のある病院数
全ての建物に耐震性がない病院数
Number of hospitals where all buildings are not earthquake resistant

5,000

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

0.57%

9,000

576,116

0
2010

2.0%
1.5%

200,000
350,990

Ratio of quake-resistant paid nursing homes is 95% or more while that ofquake-resistant hospitals remains at 76.0%.
Quake-resistant statues of hospitals


1.6%

1.0%

315,234

2.1%

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



Supply Status of Paid Nursing Homes
600,000

４%

Current Status of Reconstruction of Hospitals, etc.

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

2025

2014

0.9%

Promotion of Further Supply of Healthcare Facilities

0

1,470

Resident Capacity

30%

9,022

10,000With an aim to realize home life that enables theelderly to live independently, a target to raise theratio of housing for the elderly as a percentage ofthe elderly population from 2.1% in 2014 to 4%
by 2025 was set.

40%

27.3%

24.8%

June
2015

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

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

Ratio
of single elderly
単独高齢者割合

Single単独

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

30%

26.3%
10,161

40%

June
2014

135,352

166,279

191,871

210,859

225,374

238,289

250,3520

262,021

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

0.00%

Source: Ministry of Health, Labor and Welfare “Survey of hospital seismic repairs (Reiwa first year survey)

44

V Appendix

Environment Surrounding Healthcare Facilities (2)Quantitative Expansion for Achieving “Zero Care Leave” and Improvement of Nursing Care Service Quality

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

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

 Facilities currently receiving subsidies
 Facility upgrade costs
4.48 million yen per resident
 Nursing home with care service
designated as operators engaged indaily life long-term nursing care forthose admitted to a specified facility

 Opening preparation expenses
839,000 yen per resident* Facility upgrade costs are provided only tosmall-scale facilities (capacity of 29 people orless).

 Support of lump-sum payment for theestablishment of fixed-term leasehold
1/4 of roadside value* Nursing home for the elderly and care house
are also currently receiving subsidies.

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

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

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

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

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

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

45

V Appendix

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

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

1.Strengthening responsiveness to infectious diseases and disasters

4.Securing nursing care personnel and innovation nursing care place

2.Promotion of comprehensive community care system

5.Ensuring the stability and sustainability of the system

Changes Made by Recent Revisions
Revision period (FY)

Major points upon revision

Revision rate

2009





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

3.00％

2012






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

1.20％

2014（temporary）

Response to consumption tax hike (8%)

0.63％

2015

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

2017（temporary）



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

2018

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

0.54％

2021

Please refer to the above.

0.70％




46

V Appendix

Environment Surrounding Healthcare Facilities (4)Regional Comprehensive Care System○ We will establish a regional comprehensive care system that provides residences, medical care, nursing care, preventative medicine and life support in an
integrated manner to offer an environment where the elderly can continue living in an area they are used to, even after they come to require nursing care,in around 2025 when the baby-boomer generation will be 75 or older.
○ Establishment of a regional comprehensive care system is necessary to support the lives in regions where elderly with dementia live as the number of
elderly with dementia is expected to increase in the future.
○ There is a large regional difference concerning the progress of aging. There are, for example, large cities with the overall population remaining flat but the
population of people aged 75 years old or older increasing rapidly and rural areas with the population of people aged 75 years old or older increasingslightly although the overall population decreasing.
It is necessary for municipalities and prefectural governments, which are the insurer, to create a regional comprehensive care system based on autonomy
and independence and in accordance with regional characteristics.

Image of Regional Comprehensive Care System
When you get sick...
Medical care••

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

Hospital visit&
stay

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

Outpatient nursing care&admission

Residence• Regional comprehensive
support center• Care manager

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

Own house
Serviced housing for the elderly, etc.

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

Patients
with dementia

To live a healthy life forever...

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

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

V Appendix

Environment Surrounding Healthcare Facilities (5)About Regional Healthcare Vision“Regional Healthcare Vision” is to estimate and stipulate medical demand (number of patients) and required number of beds in 2025 for each
medical function in each area of the vision (secondary medical area) in order to promote functional differentiation and coordination of
hospital wards.
Following this, prefectural governments and medical staff will respond to realize the formulated initiative.
Current hospital bed functions(as of July 2015)

Number of Beds to be Requiredin 2025

Total 1.331 million beds

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

Medical institution

Advanced acutestage function

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

Advanced acute stage
131,000 beds
(11%)

Advanced acute stage
169,000 beds
(14%)

(Hospital Ward B)

Voluntarily
selectmedicalfunction

Acute stage
function

Decrease by approx. 30%

Acute stage
593,000 beds
(48%)

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

Increase by approx. 3 times

Chronic stage
function

Recovery stage
375,000 beds
(31%)

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

Prefectural
government

Acute stage
401,000 beds
(34%)

Report current status andfuture direction of medical
functions

Chronic stage
354,000 beds
(28%)

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

Unused, etc.
87,000 beds

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

Chronic stage
284,000 beds
(24%)

Nursing care facilities,
in-home medical care,etc.
Approx.
300,000 people(Source) Prepared by the Asset Management Company based on “Initiatives for Medical/Nursing Care
Reform” (June 22, 2017) by the Ministry of Health, Labour and Welfare(Note 1) The upper chart is prepared by the Asset Management Company based on the “Community Healthcare Initiative”
of the Ministry of Health, Labour and Welfare.

(Note)

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

48

V Appendix

HCMʼs Investment Philosophy and Three Features
Three Features

Investment Philosophy

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

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

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

• Securement of property acquisition opportunities byutilizing extensive networks

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

Stable cash flow in the long term•

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

Proper portfolio management based on strong
relationship with operators

49

V Appendix

HCMʼs Network

Asset Custody Company
Administrative Agent
Administrator of the Unitholdersʼ
Registry

HCM

Sumitomo Mitsui Trust Bank
Healthcare & Medical
Investment Corporation

Accounting Auditor

General meeting of unitholders

PricewaterhouseCoopers Aarata LLC

Board of Directors

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

Sponsor Support Companies

Support Companies

Asset Management
Agreement

SMBC Trust Bank Ltd.
RISA Partners, Inc.

Asset Management Company
Sumitomo Mitsui Finance andLeasing
Yoei

Sponsor Support
Agreement

Pipeline Support
Agreement

GinsenKobe Tochi Tatemono
Muromachi Building

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

Healthcare
Asset Management Co., Ltd.

50

V Appendix

Overview of Unitholder Special Benefit Plan
Company Name

Details of Special BenefitsFree consultation on nursingcareDiscount initial fee or monthlyfeeFree trial move-in (two-days andone-night with meals)Discount initial feesFree trial move-in (two-days andone-night with meals)Tour with free lunchDiscount monthly fee for initial
month



Free trial move-in (two-days andone-night with meals)Discount initial feesDiscount monthly fee

Proud Life Inc.



Discount initial fees or deposit（Introduced from the 12th FP）
Lifecare Design Inc.



Discount initial fee

Benesse Senior Support Co., Ltd.

Sompo Care Inc.

(Benesseʼs consultation
department for nursing care)

JAPAN LIFEDESIGN Inc.

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

Sawayaka Club Co., Ltd.

AS PARTNERS Co., Ltd.

(Note) Details of special benefits are for people who are unitholders as of the end of 12th fiscal period and are subject to changeTour with free lunchFree trial move-in (four-days
and three-nights)

Tour with free lunch

51

V Appendix

Profile of Asset Management Company
Organizational Structure

Profile of the Company

Trade name

Healthcare Asset Management Co., Ltd.

Location

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

FoundedNovember 28, 2013

Capital stock

150 million yen

CEO

Seiji Yoshioka

Shareholders

General Meeting of
Shareholders
Audit & Supervisory
Board Member

Board of Directors

Management Committee

SHIP HEALTHCARE HOLDINGS, INC.

33.3%

NEC Capital Solutions Limited

33.3%

Sumitomo Mitsui Banking Corporation

5.0%

Sumitomo Mitsui Finance and Leasing Company,

4.8%

Compliance Committee

Representative Director

Internal Audit OfficeCompliance Office

LimitedSMBC Nikko Securities Inc.

4.8%

Yoei

4.7%

Ginsen4.7%

Kobe Tochi Tatemono

4.7%

Muromachi Building

4.7%

Investment Department

Asset Management
Department

Financial & Administration
Department

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

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

52

V Appendix

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

Headquarters
location

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

Representative

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

FoundedAugust 1992

Capital stock

15,553 million yen

Sales484,395 million yen on a consolidated basis(fiscal period ended March 2020)

NEC Capital Solutions Limited

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

Headquarters
location

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

Representative

President: Tomoo Imazeki

FoundedNovember 1978

Capital stock

3,776 million yen

Sales

197,438 million yen(fiscal period ended March 2020)

Sumitomo Mitsui Banking Corporation

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

Headquarters
location

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

Representative

President and CEO: Makoto Takashima

Capital stock

1,770,996 million yen

53

memo

54

Disclaimer
This presentation material contains forward-looking statements including forecasts,
outlooks, goals and plans. These statements are based on the information
available as of the date when this material is prepared (March 16, 2021) andincorporate certain subjective assumptions about uncertain factors that may affectfuture results. Accordingly, these statements are inherently not guarantees of
future performance and actual results may differ materially.
The opinions, outlooks and estimates contained in this material reflect our viewand judgment based on information as of the date when this material is preparedand involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness andvalidity of information contained in this material. It is not promised that
information contained in this material will always be updated.
Contents of this material are subject to change without notice.
This material is not intended as a solicitation for investment. Any investment
decision must be made based on your own judgment and responsibility.

55