Financial Results
Briefing Materials
Fiscal Period Ended July 2020
（11th Fiscal Period）
September 15, 2020

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

Financial Summary

Ⅲ

Actions for Enhancement of Unitholder Value

1. Topics for 11th Fiscal Period (Ended July
2020)

P3

2. Impact of the Spread of COVID-19

P4

3. Changes in Unit Price

P53.

4. Major Indexes for 11th Fiscal Period(Ended July 2020)
5. Actual Results for 11th Fiscal Period(Ended July 2020)
6. 12th Fiscal Period (Ending January 2021) and13th Fiscal Period (Ending July 2021)
Earnings Forecasts

P6

4. Actions for Hospital Projects

P20

5. Actions for ESG

P21

7. External GrowthP9

8. Financial Status

P10

9. Changes in Distribution Per Unit

P11

P7
P8

Ⅳ

1. Road Map to External Growth

P16

2. Expansion of Pipeline

P17

Actions for Projects of Facilities and Housing
for the Elderly

P19

Appendix

Status of Asset Management
1. Portfolio Highlights

P13

2. Stable Cash Flow in the Long Term

P14

1

Financial SummaryⅠ
2

I Financial Summary

1. Topics for 11th Fiscal Period (Ended July 2020)

1 PerformanceOperating revenue:2,023 million yen (+10 million yen from previous fiscal period, +8 million yen from forecast)
Net income:917 million yen (△25 million yen from previous fiscal period, +26 million yen from forecast)Distribution per unit :3,240 yen(△80 yen from previous fiscal period, +90 yen from forecast)
NAV per unit
:119,842 yen(+539 yen from previous fiscal period)

2 Financial StatusInterest-bearing liabilities totaled 33.15 billion yen (+ 0.7 billion yen from previous fiscal period), with
LTV at 48.1% (+ 0.5% from previous fiscal period)
Long-term issuer rating (JCR): A (Stable)

3

Management Status
 Asset size expanded to 36 properties/66.3 billion yen, with unrealized gain standing at 5.1 billion yen.
 Newly acquired Sunny Life Kamakura, a paid nursing home
 Additionally acquired part of the land for Verde Hotaka (already acquired in 9th FP) to fully own theproperty.
 The pipeline has expanded to approximately 17 billion yen in total.
 The portfolio occupancy rate is 100%.

3

I Financial Summary

2. Impact of the Spread of COVID-19
The impact of the spread of COVID-19 on the management status of HCM has been limited.
Impact on the Existing Portfolio
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<Long-Term Fixed-Rent Lease Agreements>
Averageremaining leaseterm

13.8 years

With anti-infection measures implemented thoroughly, there have been nocases of infection among residents (as of the end of the 11th fiscal period).



Average occupancy rateof the facilities is kept at a high level of 92.6%.

100%

Portfolio
occupancy
rate

100%

<Examples of Efforts Under the COVID-19 Pandemic>

(Note)

Ratio of fixed
rents



Conducting thorough medical checks for residents and the staff
Restricting entry of visitors and contractors and conducting
online visits
Granting special service bonuses to the staff(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 thelatest 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.

Impact on External GrowthNo significant changes in the investment environment (such as acquisition criteria, transaction yields and appraisals) of healthcare
facilities
Demand remains solid and strong for healthcare facilities in the super-aged society.

Impact on Financial Aspects
No significant changes in the lending attitude among lenders.

COVID-19 has had no negative impact on the performance of HCM at present.
HCM will firmly hold the asset management policy, which remains unchanged,
and focus on expanding and stably operating the portfolio.
4

I Financial Summary

3. Changes in Unit Price
The HCM investment unit price temporarily dropped to below 80,000 yen but has remained ataround 120,000 yen for the moment.
(yen)

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

Trading volume (right axis)

150,000

HCM(unit)

22,0008,000

TSE REIT Index
September 2018
Announcement of proposing
execution of distribution in excess ofearnings as a matter to be resolved
at the unitholders’ meeting

140,000

130,000

120,000

7,000
September 4, 2020
121,000 yen
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

70,00060,0002017/7/31
Jul. 31, 20172018/1/31
Jan.
31, 2018

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

Jan.
31,201920192019/1/31
Jan.
31,

2019/7/31
Jul. 31, 20192020/1/31
Jan. 31, 2020

2020/7/31
Jul.
31, 2020

05

I Financial Summary

4. Major Indexes for 11th Fiscal Period (Ended July 2020)

Figures in parentheses indicate the change
from the end of previous period

Assets (Assets)
Number of properties

Total acquisition priceTotal appraisal value

Unrealized gain

Average appraisal NOI
yield

Portfolio occupancy rate

Ratio of fixed rents
Ratio of investment inthree major
metropolitan areas
Average remaining lease
term

Debt (Liabilities)
36 properties)

Total amount of

33.15 billion yen(+1 property)

interest-bearing liabilities(+0.7 billion yen)

66.3 billion yen)

Average remaining terms
to maturity

2.9 years(+1.4 billion yen)
71.8 billion yen)(+1.4 billion yen)
5.1 billion yen)(+0.2 billion yen)

Average borrowinginterest rate
Ratio of long-term debt
Ratio of debt with
fixed interest rates

5.6%)

100%)
（±0%)
100%)

(+0.2%)
13.8 years)(△0.4 years)(△0.01%)88.8%(△2.0%)
97.9%(△2.1%)(+0.5%)

Long-Term Issuer Rating(JCR)

A (Stable)

Equity (Net assets)
Total sum of fair value

(±0%)
86.3%

0.57%

48.1%

LTV

(±0%)

(△0.6 years)

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).

35.8 billion yen(△6.8 billion yen)
3,240 yen(△80 yen)
289 yen(+4 yen)
119,842 yen(+539 yen)

6

I Financial Summary

5. Actual Results for 11th Fiscal Period (Ended July 2020)
Achieved distribution per unit of 3,240 yen, +90 yen over forecast, due to an increase in rent
revenue with new property acquisitions as well as a decrease in repair expenses, etc.
(Unit: millions of yen)
10th Fiscal
Period11th fiscal period

ActualForecast(Note 2)

ActualComparison
with Forecast

(A)

(B)

(C)

(C)-(B)

Operating revenue

2,013

2,015

2,023

+8

+10

+0.5

Operating expenses

909

968

951

△16

+41

+4.6

Expenses related torent business

601

661

652

△9

+51

+8.5

(Depreciation)

443

448

450

+2

+6

+1.6

Operating income

1,103

1,047

1,072

+24

△31

△2.8

Ordinary income

944

891

918

+26

△25

△2.7

Net income

943

890

917

+26

△25

△2.7

(Ended July 2020)(Ended January
2020)

11th Fiscal Period Actual Results(Comparison with Forecast)Difference in operating revenue (+8)

Comparison with 10th
Fiscal Period(C)-(A)(C)-(A)(A)(%)

 Increase in lease business revenue (+8)
 Acquisition of new properties (+7)
Difference in operating expenses (△16)

 Decrease in expenses related to rent business (△9)
 Repair expenses (△11)
 Depreciation (+2)
 Decrease in general and administrative expenses (△7)
 IR expenses (△2)
 Legal fees (△3)
11th Fiscal Period Actual Results(Comparison with 10th Fiscal Period)
Difference in operating revenue (+10)
 Increase in rent business revenue (+10)
 Acquisition of new properties (+7)
 Invitation of new tenants (+2)
Difference in operating expenses (+41)

Distribution per unit (yen)3,320Distribution of earnings

3,027

3,150

3,240

+90

△80

+87

△84

2,928
2,864

 Increase in lease business expenses (+51)
 Expensing of property/city planning tax forproperties acquired in 9th FP (+49)
 Decrease in general and administrative expenses (△9)△2.8  Asset management fee (△3)
 IR expenses (△1)△2.4Distribution of reserve
for temporary
difference adjustments

8

Distribution in excess ofearnings

285

286

289

+3

+4

+1.4

119,303-

119,842

-

+539

+0.5

(return of capital) (Note 1)

NAV per unit (yen)23(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 11th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended January 2020” dated March 17, 2020.

7

I Financial Summary

6. 12th Fiscal Period (Ending January 2021) and13th Fiscal Period (Ending July 2021) Earnings Forecasts

In the 12th fiscal period, rent revenue from the properties acquired in the previous fiscal
period will contribute throughout the period.
Distribution per unit is expected to be 3,205 yen (+80 yen from initial forecast).
(Unit: millions of yen)

11th Fiscal
Period12th Fiscal Period(Ended July 2020)

ActualInitialforecast(Note 2)(ending July 2021)

Comparison
Comparison
with 11th
Forecast with initial
Forecast
fiscalforecast
period

(A)

(B)

(C)

Operating revenue

2,023

2,015

Operating expenses

951

Expenses related torent business(C)-(A)

2,058

+42

+34

2,058

0

976

995

+18

+43

992

△2

652

667

680

+12

+28

688

+8

(Depreciation)

450

453

461

+8

+10

468

+6

Operating income

1,072

1,039

1,063

+24

△8

1,066

+2

Ordinary income

918

882

905

+22

△13

905

0

Net income

917

881

904

+22

△13

904

0

Distribution per unit
(yen)

3,240

3,125

3,205

+80

△35

3,210

+5

2,951

2,835

2,908

+73

△43

2,908

0

289

290

297

+7

+8

302

+5

Distribution per unit

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

Comparison
with 12th
fiscalperiodforecast(C)-(B)(Excluding distribution in excess ofearnings (return of capital)(Note1))

12th Fiscal Period Forecast (Comparison
with 11th Fiscal Period Results)

13th Fiscal Period(ending January 2021)(D)-(C)

Difference in operating revenue (+34)
Full-period contribution of rent revenue fromproperties acquired in the 11th fiscal period (+35)

Difference in operating expenses (+43)
 Increase in expenses related to rent business (+28)
 Repair expenses (+16)
 Depreciation (+10)
 Increase in general and administrative expenses(+15)
 Expenses related to general meeting of
unitiholders (+7)
 Continuous ER expenses, etc. (+4)
13th Fiscal Period Forecast (Comparison
with 12th Fiscal Period Forecast)Difference in operating expenses (△2)
Increase in lease business expenses (+8)
Expensing of property/city planning tax forproperties acquired in 11th FP (+2)
 Depreciation (+6)
 Decrease in general and administrative expenses(△10)
 Asset management fee (△2)
 Expenses related to investors meeting (△7)
(Note 1) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2) The initial forecast for the 12th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended January 2020” dated March 17, 2020.

8

I Financial Summary

7. External Growth
HCM newly acquired properties by utilizing sponsor support and continued working to expand the pipeline.
[New Acquisition] Sunny Life Kamakura[Additional Acquisition] Verde Hotaka (land)
Asset type
Location

Paid nursing home with careservice
Kawaba-mura, Tone-gun,
Gunma

Operator

Verde Corporation

Acquisition date

April 1, 2020
38 million yen

Asset type

Residential type paid nursing home

Acquisition price

Location

Kamakura-shi, Kanagawa

Operator

Kawashima Corporation

OpenedNovember 2014

Appraisal value

1,550 million yen (appraisal date: May 31, 2020)

Acquisition dateJune 29, 2020

Expansion of Pipeline

Acquisition price

1,418 million yenAppraisal NOI yield

5.3%

No. of rooms/capacity

128 rooms, 128 people

Occupancy rate (Note)

98.4%

SellerGodo Kaisha MYGK 3-Go

(Note) Occupancy rate is based on the Property Disclosure Statement of Important Matters dated October 1, 2019.



Key points of acquisition
Strong sponsor
support

Property acquisition through negotiated transaction
utilizing the network and warehousing function of thesponsors.

Good location

Approximately a 3-minute walk from the nearest station,
the location offers good traffic convenience. On top of it,rich services and competitive pricing keep the bed
occupancy rate high.

Excellent
operator

Kawashima Corporation is a leading company in theindustry, operating paid nursing homes nationwide with
"Sunny Life" as its main brand (having total capacity of
12,056 people, the fifth largest in Japan) (Note).
(Note) (From) Weekly Senior Housing Newspaper, August 5-12, 2020 issue (No. 594)

Key points of acquisition
Additionally acquired part of the land for Verde Hotaka, which HCM had
acquired in February 2019, to fully own the property. Effectively reduced
annual leasing expenses (land rent) by 1 million yen.

Proactively expanded the pipeline by utilizing sponsor support.
17 billion yen+4 billion yen
13 billion yen

March 2020
Paid nursing home

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

September 2020
Paid nursing home

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

Paid nursing home

Medical Home Bonsejour
Yamahana(Sapporo-shi, Hokkaido;
60 rooms)

9

I Financial Summary

8. Financial Status
The bank formation centering on Sumitomo Mitsui Banking Corporation and the LTV level
maintained at around 50%.
Status of Interest-Bearing Liabilities

Total amount of(billion yen)interest-bearing Liabilities(Investment corporation
bonds)(billion yen)

LTV

(%)

Ratio of debt with fixedinterest rates(%)

Average borrowinginterest rate(%)

Change in LTV and Total Interest-Bearing Liabilities
End of11th FP

Change

32.45

33.15

+0.7

2.0

2.0

±0

47.6

48.1

+0.5

15.0

△2.1

10.0

100
0.58

Diversification of Lenders
Mie Bank
0.75 billion yen(2.4%)
77 Bank
0.95 billion yen(3.0%)

Higashi-Nippon Bank
0.5 billion yen (1.6%)

0.57

△0.01

30.0

5.0

50.0

47.5

47.6

49.0
48.0

20.7

22.45

32.45

32.45

33.15

End
FP
7th of
FP7th
End

End
FP
8th of
FP8th
End

End
9th of
FP 9th
EndF

End
of FP
10th
FP
10th
End

End
of FP
11th
FP
11th
End

47.0
46.0

Average remaining terms to maturity: 2.9 years.

7.0

6.75

6.0
6

4.45
3.0

2.0
2
Sumitomo Mitsui
Trust Bank
5.45 billion yen(17.5%)

Long-term loans
Short-term loans
Investment corporation bonds

9.25

8.0
8

4.0
4

Resona Bank
2.7 billion yen(8.7%)

48.1

Diversification of Maturities

Sumitomo Mitsui
Banking Corporation
10.75 billion yen(34.5%)

Nippon Life Insurance
2.6 billion yen (8.3%)

52.0
51.0

48.8

20.0

10.0
10

Dai-ichi Life
Insurance
Company
1.25 billion yen(4.0%)

(%)

50.6

25.0

0
0.0

LTV (right axis)(billion yen)

Hiroshima Bank
1.25 billion yen(4.0%)

Nishi-Nippon CityBank
1.75 billion yen(5.6%)

97.9

Total interest-bearing liabilities (left axis)

35.0

Gunma Bank
0.5 billion yen(1.6%)

Bank of Fukuoka
1.25 billion yen (4%)

Shinkin Central
Bank1.45 billion yen(4.7%)(billion yen)

End of10th FP

0
0.0

2.0
0.7

12th 13th 14th 15th 16th 17th 18th 19th 20th

30th

FP

FP

FP

FP

FP

FP

FP

FP

FP

FP

10

I Financial Summary

9. Changes in Distribution Per Unit
HCM’s distribution excluding temporary effect has increased even under the COVID-19 pandemic.
HCM does not expect a significant decrease for the 11th fiscal period and thereafter, and aims todeliver stable distributions as a defensive sector.

(yen)

3,800

3,643

Distribution in excess of earnings (Note 1)

3,600

Distribution (Note 2)

3,400

Distribution (Excluding temporary effect)

3,200

3,120

3,000
2,800

2,794
2,730

2,697

2,653

2,600

2,440
2,340

2,400
2,200
2,000
0

3,363

(Note 3)

2,296

2,589

2,425

3,240

3,205

3,210

2,908

2,908

2,900

2,908

3,035

3,180

2,951

2,879

2,699

2,699

3,320

2,943

2,786

2,508

2,328

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

Ended Jan. 2016

Ended Jul. 2016

Ended Jan. 2017

Ended Jul. 2017

Ended Jan. 2018

Ended Jul. 2018

Ended Jan. 2019

Ended Jul. 2019

Ended Jan. 2020

Ended Jul. 2020

Ending Jan. 2021

Ending Jul. 2021

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

11

Status of Asset Management

Ⅱ
12

II Status of Asset Management

1. Portfolio Highlights
Key Data

Number ofproperties

Total acquisition
price

Total appraisal
value (Note 1)

Average appraisal
NOI yield

36

66.3 billion yen

71.8 billion yen

5.6%

Average buildingage (Note 1)

Average remaining
lease term (Note 1)

Ratio of fixed rents

Portfolio occupancyrate

15.8 years

13.8 years

100%

100%

(+1.4 billion yen)(+1 property)(△0.4 years)(+0.3 years)(+1.4 billion yen)

(±0%)

(±0%)

(±0%)

(Note 1) “Total appraisal value” is indicated based on the appraisal report with July 31, 2020, as the appraisal date. “Average building age” and “Average remaining lease term” are average values with July 31,
2020, 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 10th FP.

Diversification Status (Note)
Complex of paid nursing home,
medical service-related
facilities, etc.
19.5%
Medical servicerelated facilities
3.1%
Serviced housing
for the elderly
4.7%

Other areas
2.6%

Core cities
11.1%

Chubu area
1.9%

By Type

Paid nursing home
72.7%

Tokyo
Metropolitan
By
area
Geographical 42.3%

Kinki area
42.1%

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

Area

Three Major
Metropolitan areas
86.3%

13

II 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 continuously monitoring them throughout the period.
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 (2,024 beds) and four long-term care health facilities(495 beds), 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

Compliance

FinancialstatusAbuseprevention
measures

Operational
status offacilities
Safetymanagement(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%

Averageremaininglease term
13.8 years

Less than
10 years
36.5%

Ratio offixed rents
100%(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 July 31, 2020, as reference date, rounded down to the first decimal place.

14

Actions for Enhancement ofUnitholder Value

Ⅲ
15

III Actions for Enhancement of Unitholder Value

1. Road Map to External Growth
HCM aims for an asset size of 100 billion yen over the medium term.
With continuous property acquisitions, the asset size has grown by approximately
2.8 times since IPO to 66.3 billion yen.
Change in Asset Size and Number of Properties
February 2017

March 2016

・ Conducted the first public
offering
・ Acquired 6 properties(13.4 billion yen)・ Acquired 2 properties(1.3 billion yen)

November 2017

・ Acquired J-REIT’s first
hospital real estate for 2
billion yen

October 2018

・ Acquired 2 properties(1.6 billion yen)February 2019

June 2020・Conducted the second public
offering
・ Acquired 8 properties (22.7
billion yen) including hospital
real estate・ Acquired Sunny Life
Kamakura (1.4 billion yen)(billion yen)100

(Number ofproperties)<Target>

40

64.8

64.8

Asset size

35

35

Number of properties

30

38.4

40.5

40.5

25

25

25
23.6

23.6

16

16

1st FP

25.0

25.0

24

35

(Note)

70
70.0
60
60.0

36

50
50.0

42.1

Pipeline

40.0
40

27
30.0
30

20
15

100.0

66.3

20.0
20
18

18

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

Ended Jul.

Ended Jan.

Ended Jul.

Ended Jan.

Ended Jul.

Ended Jan.

Ended Jul.

Ended Jan.

Ended Jul.

Ended Jan.

Ended Jul.

2015

2016

2016

2017

2017

2018

2018

2019

2019

2020

2020

10.0
10

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

16

III Actions for Enhancement of Unitholder Value

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

Facilities andhousing for theelderly(already opened)

Operators

Facilities andhousing for theelderly(to be developed)

Developers
Homebuilders

Extensive networks

Expert know-how

Various routes
Sponsor andsupporting company(Note) networks

Supportagreement

Asset managementcompany’s own
network

Expert know-how

Nursing care andmedical service
Fund management
Finance

Supportagreement

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

Extensive
warehousing
functions

Medical servicerelated facilities,
etc.

Utilization ofbridge SPCs

Utilization of
warehousing ofsponsors and others

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.

17

III Actions for Enhancement of Unitholder Value

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

Facilities and housing
for the elderly(to be developed)

Medical servicerelated facilities,
etc.

Pipeline totaling around 17 billion yen
Paid nursing home

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

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

Paid nursing home

SAWAYAKA Higashiosakakan(Higashiosaka-shi, Osaka; 94 rooms)
Serviced housing for the elderly

Noah Garden Casa Ritz
(Sapporo-shi, Hokkaido; 49 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
Toyota-Motomachi(Toyota-shi, Aichi; 75 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.

18

III Actions for Enhancement of Unitholder Value

3. Actions for Projects of Facilities and Housing for the Elderly
Properties That Have Already Been Opened
Sale & Leaseback

Properties to Be Developed(Property owner = Operator)(Property owner = Party other than operator)

Change of Ownership

Operators

 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⇒ Leasing risks are limited as operators
are generally fixed beforehandCase Example
A project to relocate an existing
paid nursing home.

A project of changing ownershipfor an existing paid nursing home,which also has a day service facility
and a clinic.
One of HCM’s sponsors captured
the asset replacement need of theprevious owner and has alreadyacquired the property on thepremise of transferring it to HCM.

 Securing buyers after
development andcompletion

New development utilizing healthcare REITs

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



Developers, etc.

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

One of HCM’s supporting companies
matched the information on landsale it obtained with the relocationneed of the operator and led thedevelopment process. The facility
opened in November 2018.

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

19

III Actions for Enhancement of Unitholder Value

4. Actions for Hospital Projects
Investment & Management Policy1Major 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

2

3

4

Opportunity of REIT Investment (Utilization)

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Market size is approximately 23 trillion yen (Note 1), 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Strengthening financial standing

Refinancing and liquidation of assets in line with businesssuccession



M&A financing

Strengthening and transforming medical functions



Reconstruction and extension/renovation of buildings(Note) Calculated by the Asset Management Company based on the estimate value by KPMG Healthcare Japan Co., Ltd.
as of June 2016.

Case Example

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

Name

SHIP Senri Building(Senri-Chuo Hospital)

Location

Toyonaka-shi, Osaka

Operators

Kyowakai Medical
Corporation

Number of beds 400

Large-scale multi-use healthcare facility, combining a hospital and apaid nursing home
 Developed and master leased in its entirety by a group company ofSHIP HEALTHCARE Senri Chuo Hospital, a major tenant, opened when the property
was completed (2008) as a hospital mainly responsible forsubacute and chronic care
 HCM acquired it by utilizing the warehousing functions of the20
sponsor]Promotion for market expansion
 Participation in seminars for medical/nursing care facilitiesrelated operators
 Lectures at industry group meetings (Congress of Japan
Hospital Association, etc.)

Size of hospital real estate market

III Actions for Enhancement of Unitholder Value

5. Actions for ESG

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 ofEnvironment, Social and Governance (ESG).
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
for the elderly against the elderly population
・ Procured funds through social finance (social loans
and social bonds)
・ Prevention of job separation due to nursing
care through the promotion of supply of nursing ・ Issued Impact Reports that summarize endeavors
care facilities (especially women)
toward addressing social issues

Social・ 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

Governance・ Supported the improvement of efficiency of
nursing 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)・ Work-life balance

・ Established a remote work system (AssetManagement Company)

・ Transparency in decision making

・ Established a “Customer-Oriented Committee” atthe Asset Management Company

・ Fair transaction (prevention of conflicts ofinterest)

・ Established warehousing rules for transactions
with interested parties

・ Management of various risks (including
elimination of antisocial forces)

・ Separate Executive Director of HCM and CEO of theAsset Management Company (to be resolved at thegeneral meeting of unitholders in October 2020)

21

memo

22

Appendix

Ⅳ
23

IV 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

11.1%

1
1 18

Tokyo metropolitan area

1

42.3%

22

2.6%

30

8

29
3
9

12
5
6

21

7

13

11

Bonsejour Chitose-funabashi

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

6Core cities

17

AQUAMARINE Nishinomiyahama

5

86.3%

Kinki area

1
2

20

24

31
14

2
10

15

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

2

ASHEIM Hikarigaoka

8

ASHEIM Bunkyohakusan

9

SOMPO CARE La vie Re Machidaonoji

10

SOMPO CARE La vie Re Azamino

11
12

SAWAYAKA Tachibanakan

12

SAWAYAKA Mekarikan

13

SAWAYAKA Tagawakan

14

GOOD TIME HOME Fudo-mae

15Bonsejour Yotsugi

16

Medical Home Bonsejour Itami

17

Kobe Gakuentoshi Building (Hapine Kobe
Gakuentoshi)

18

GreenLife Moriguchi Home for The Aged

19

Hapine Kobe Uozaki Nibankan

20Granda Tsuruma-Yamato

21

Smiling Home Medice Adachi

22

Aikoen Ichibankan Building (Aikoen
Ichibankan)

23

27 26 25

24

Hanakotoba Miura

23

25

SOMPO CARE La vie Re Hama-Kawasaki

26

Hanakotoba Shin-Yokohama

27

Hanakotoba Shin-Yokohama II

28

Hanakotoba Odawara

32
1

7

4

28

Serviced housing for theelderly

Paid nursing
home

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation Home Bonsejour
KomakiSOMPO CARE Sompo no ie
Awajiekimae
SOMPO CARE Sompo no ie
Kobekamisawa

1

Niigata Rehabilitation Hospital

1

SHIP SENRI BUILDING

Hanakotoba Minami

29

Verde Minowa

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

32

Sunny Life Kamakura

24

IV Appendix

Details of Portfolio (1)Paid nursing home
1

2

3

4

5

AQUAMARINE
Nishinomiyahama

Bonsejour Chitose-funabashi

Bonsejour Hino

Bonsejour Musashi-shinjo

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

Location

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

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

438-1 Ochikawa,
Hino-shi, Tokyo

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

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

Nearest station

Hanshin Nishinomiya Stationon the Hanshin Main Line

Chitose-Funabashi Stationon the Odakyu Odawara Line

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

Shibusawa Station
on Odakyu Odawara Line

Construction completion

May 2007

March 1988

May 1990

February 1985

July 1991

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

119 million yen

49 million yen

43 million yen

36 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.1%

5.9%

6.0%

6.2%

6.4%

Appraisal value (Note 1)

2,140 million yen

974 million yen

818 million yen

643 million yen

850 million yen

Acquisition price (ratio)

1,950 million yen (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%

87.2%

96.6%

91.8%

94.1%

Operator

GREEN LIFE

Benesse Style Care

Benesse Style Care

Benesse Style Care

Benesse Style Care

Remaining years of leaseagreement (Note 4)

16.8 years

5.8 years

5.8 years

6.3 years

6.8 years

25

IV Appendix

Details of Portfolio (2)Paid nursing home

)

6

7

8

Medical Rehabilitation Home
Bonsejour Komaki

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

Location

3-1 Shiroyama,
Komaki-shi, Aichi

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

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

Nearest station

Ajioka Stationon the Meitetsu Komaki Line

Shakujii-Koen Stationon the Seibu Ikebukuro Line

Hakusan Stationon the Toei Subway Mita Line

Construction completion

March 1991

March 2006

Acquisition period

Fiscal period ended July 2015

Appraisal NOI (Note 1)

9

10

SOMPO CARE La vie Re
Machidaonoji

SOMPO CARE La vie Re
Azamino1612 Onojimachi,
Machida-shi, Tokyo
Keio Nagayama
OdakyuStation
Nagayama
on the Keio
Station
Sagamiharaon the Odakyu
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

1,570 million yen

1,650 million yen

3,780 million yen

3,230 million yen

Acquisition price (ratio)

1,270 million yen (1.9%)

1,385 million yen (2.1%)

1,430 million yen (2.2%)

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%

69.8%

84.1%

Operator

Benesse Style Care

AS PARTNERS

AS PARTNERS

Sompo Care

Sompo Care

Remaining years of leaseagreement (Note 4)

6.8 years

13.6 years

6.6 years

7.2 years

6.9 years

Nakagawa Stationon the Yokohama Municipal
Subway Blue Line26

IV Appendix

Details of Portfolio (3)Paid nursing home
11

12

13

SAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME Fudo-mae

Bonsejour Yotsugi

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

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

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

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

October 2005

November 2005

January 2006

March 1992

March 1989

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2016

Appraisal NOI (Note 1)

93 million yen

85 million yen

25 million yen

91 million yen

48 million yen

Appraisal NOI yield (Note 1)

6.1%

6.2%

6.4%

5.2%

5.8%

Appraisal value (Note 1)

1,530 million yen

1,400 million yen

380 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%

89.2%

Operator

Sawayaka Club

Sawayaka Club

Sawayaka ClubJAPAN LIFEDESIGN

Benesse Style Care

Remaining years of leaseagreement (Note 4)

7.5 years

7.5 years

7.5 years

6.3 years

5.4 years

Location
Nearest station

14

Fudo-mae Stationon the Tokyu Meguro Line

15

27

IV Appendix

Details of Portfolio (4)Paid nursing home
18

19

20

16

17

Medical Home Bonsejour Itami

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

GreenLife Moriguchi Home for
Hapine Kobe Uozaki Nibankan
The Aged

Location

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

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

Nearest station

Hankyu Itami Stationon the Hankyu Railway Itami
Line

Gakuentoshi Stationon the Kobe Municipal Subway
Seishin-Yamate Line

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

Construction completion

March 1989

January 2009

September 2006

March 2010

March 1998

Acquisition period

Fiscal period ended July 2016

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

36 million yen

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

4,420 million yen

4,400 million yen

995 million yen

1,060 million yen

Acquisition price (ratio)

514 million yen (0.8%)

4,320 million yen (6.5%)

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%

81.1%

Operator

Benesse Style Care

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse Style Care

Remaining years of leaseagreement (Note 4)

6.8 years

20.6 years

19.2 years

20.6 years

1.6 years

Granda Tsuruma-Yamato

2-3-41 Shimotsuruma,
Yamato-shi, Kanagawa
Tsuruma Stationon the Odakyu Enoshima Line28

IV Appendix

Details of Portfolio (5)Paid nursing home
21

22

23

24

Smiling Home Medice Adachi

Aikoen Ichibankan Building(Aikoen Ichibankan)

Hanakotoba Minami

Hanakotoba Miura

SOMPO CARE La vie Re HamaKawasaki

Location

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

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

3-5 Suwacho,
Miura-shi, Kanagawa

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

Nearest station

Rokucho Stationon the Tsukuba Express

Niigata Stationon the JR Shinetsu Main Line

Misakiguchi Stationon the Keikyu Kurihama Line

Odasakae Stationon the JR Nambu Line

Construction completion

November 2005

February 2010

June 2007

March 2007

Acquisition period

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

120 million yen

45 million yen

56 million yen

35 million yen

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

865 million yen

1,190 million yen

665 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)

96.3%

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)

16.5 years

16.0 years

12.3 years

12.3 years

7.4 years

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

Fiscal period ended January 2019 Fiscal period ended January 201925

Fiscal period ended July 201929

IV Appendix

Details of Portfolio (6)Paid nursing home
26

27

28

29

30

Hanakotoba Shin-Yokohama

Hanakotoba
Shin-Yokohama II

Hanakotoba Odawara

Verde Minowa

Verde Hotaka

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

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

Construction completion

March 2004

Acquisition period

Location

3-383-10 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

401 million yen

948 million yen

1,700 million yen

1,430 million yen

Acquisition price (ratio)

2,071 million yen (3.1%)

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

1,620 million yen (2.4%)

1,328 million yen (2.0%)

Site area

894.00 m²

375.00 m²

1,202.12 m²

７,920.29 m2

4,375.31 m²

Leasable area

5,230.23 m²

1,837.29 m²

2,203.42 m²

11,098.17 m²

6,352.86 m²

Structure/
number of floors (Note 2)

RC, 9F

RC, B1 7FRC, 4F

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

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

Number ofrooms/resident capacity

136 rooms, 136 people

29 rooms, 30 people

60 rooms, 65 people

174 rooms, 206 people

121 rooms, 174 people

occupancy rate (Note 3)

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)

12.3 years

12.3 years

12.3 years

6.8 years

6.8 years

Nearest station

30

IV 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)

90 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)

87.9%

98.4%

96.4%

88.2%

Operator

Kawashima Corporation

Kawashima Corporation

Sompo Care

Sompo Care

Remaining years of leaseagreement (Note 4)

23.2 years

19.2 years

14.0 years

14.0 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 Line31

IV Appendix

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

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

1

1

Niigata Rehabilitation Hospital

SHIP SENRI BUILDING

Location

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

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

Nearest station

Hayadori Stationon the JR Hakushin Line

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

Construction completion

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

September 2008

Acquisition period

Fiscal period ended January 2018

Fiscal period ended July 2019

Appraisal NOI (Note 1)

152 million yen

680 million yen

Appraisal NOI yield (Note 1)

7.4%

5.2%

Appraisal value (Note 1)

2,260 million yen

14,200 million yen

Acquisition price (ratio)

2,060 million yen (3.1%)

12,920 million yen (19.5%)

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)

26.6 years

18.2 years(Note 1) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2020. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2) As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3) The bed occupancy rate indicates the ratio obtained by dividing the number of residents by the capacity, rounded off to the first decimal place. The number of residents used in the calculation is described in the latest
Property Disclosure Statement of Important Matters, which the Asset Management Company obtained as of the date of preparing this document, for the facilities and housing for the elderly owned by HCM.
(Note 4) Remaining years of lease agreement is as of July 31, 2020, rounded down to the first decimal place.

32

IV 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.

Remarks

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

17.3

-

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)

11.5

-

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

9.7-

A consolidated
subsidiary of SonyFinancial Holdings
Inc., which is listedon 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

7.6

Hospital

28

-

38

434

4

(Note 4)

330

27

-

-

6

Facilities owned by HCM

Share
(%)

Attribute

Facilities
and housing
for theelderly(Note 2)28.5

(Note 3)33

IV Appendix

Operator List (2)Number of
facilities
Operator name

Sawayaka Club Co., Ltd.

(Note 1)

Facilities andhousing forthe elderly

Hospital

86-

Facilities owned by HCM

Share
(%)

Attribute

Remarks

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

5.0

Sunny Life Kita-Shinagawa
Sunny Life Kamakura

4.9(Note 2)

Kawashima Corporation

126-

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.

Verde Corporation

5-

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

4.3

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

Capital partnership byNomura Real Estate
Holdings, Inc., which is anunlisted company

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, 2019).
(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 Group’s website.

34

IV Appendix

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

Property nameAppraisal company

Appraisal value(million yen)(A)

Direct capitalization
methodEnd of January 2020

DCF method

Indicatedvalue(million yen)

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)

Appraisal value(million yen)(B)

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

AQUAMARINE Nishinomiyahama

Rich Appraisal
Institute Co., Ltd.

2,140

2,160

5.3

2,130

5.0

5.5

119

2,140

0

Bonsejour Chitose-funabashi

The Tanizawa Sogo
Appraisal Co., Ltd.

974

993

4.4

966

4.5

4.6

49

974

0

Bonsejour Hino

The Tanizawa Sogo
Appraisal Co., Ltd.

818

832

4.8

812

4.9

5.0

43

818

0

Bonsejour Musashi-shinjo

The Tanizawa Sogo
Appraisal Co., Ltd.

643

653

5.1

638

5.2

5.3

36

643

0

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

The Tanizawa Sogo
Appraisal Co., Ltd.

850

864

5.0

844

5.1

5.2

47

850

0

Medical Rehabilitation Home Bonsejour Komaki

The Tanizawa Sogo
Appraisal Co., Ltd.

1,450

1,460

5.5

1,440

5.6

5.7

92

1,450

0

ASHEIM Hikarigaoka

Japan Real Estate
Institute

1,570

1,580

4.8

1,560

4.6

5.0

76

1,580

△10

ASHEIM Bunkyohakusan

Japan Real Estate
Institute

1,650

1,660

4.4

1,630

4.2

4.6

74

1,660

△10

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate
Institute

3,780

3,820

4.9

3,740

4.7

5.1

193

3,790

△10

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

1,410

△10

SAWAYAKA Tagawakan

Japan Real Estate
Institute

380

382

5.8

377

5.6

6.0

25

381

△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.

4,420

4,470

4.7

4,400

4.5

4.9

225

4,420

0

GreenLife Moriguchi Home for The Aged

Daiwa Real EstateAppraisal Co., Ltd.

4,400

4,460

4.6

4,380

4.4

4.8

220

4,400

0

Hapine Kobe Uozaki Nibankan

Daiwa Real EstateAppraisal Co., Ltd.

995

1,010

4.6

989

4.4

4.8

48

995

0

Granda Tsuruma-Yamato

The Tanizawa Sogo
Appraisal Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

1,060

0

35

IV Appendix

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

Property nameAppraisal company

Appraisal value(million yen)(A)

Direct capitalization
methodEnd of January 2020

DCF method

Indicatedvalue(million yen)

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)

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

2,450

4.8

4.9

120

2,460

0

AIKOEN ICHIBANKAN Building

The Tanizawa Sogo
Appraisal Co., Ltd.

865

866

5.2

864

5.3

5.4

45

865

0

Hanakotoba Minami

Japan Real Estate
Institute

1,190

1,200

4.6

1,170

4.4

4.8

56

1,190

0

Hanakotoba Miura

The Tanizawa Sogo
Appraisal Co., Ltd.

665

671

4.9

662

5.0

5.1

35

665

0

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

2,240

△10

Hanakotoba Shin-Yokohama II

Japan Real Estate
Institute

401

403

4.8

399

4.6

5.0

22

401

0

Hanakotoba Odawara

The Tanizawa Sogo
Appraisal Co., Ltd.

948

960

4.9

943

4.8 - 5.0

5.1

49

948

0

Verde Minowa

Daiwa Real EstateAppraisal Co., Ltd.

1,700

1,710

5.0

1,690

4.8

5.2

109

1,700

0

Verde Hotaka

Daiwa Real EstateAppraisal Co., Ltd.

1,430

1,440

5.4

1,420

5.2

5.6

91

1,360

+70

Sunny Life Kita-Shinagawa

Daiwa Real EstateAppraisal Co., Ltd.

1,950

1,980

4.5

1,930

4.3

4.7

90

1,970

△20

Sunny Life Kamakura

The Tanizawa Sogo
Appraisal Co., Ltd.

1,550

1,560

4.6

1,540

4.7

4.8

76

-

+1,550

SOMPO CARE Sompo no ie Awajiekimae

Japan Real Estate
Institute

2,170

2,190

5.2

2,150

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.

14,20014,4004.5

14,100

4.5 - 4.6

4.7

680

14,300△100

71,862

72,672-

71,266

-

-

3,736

70,413+1,449Total(Note 1)
(Note 2)
(Note 3)

“Appraisal value” is based on the appraisal report with July 31, 2020, 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 fiscal 2019 to fiscal 2021 and 5.0% for fiscal 2022 onward; and for SHIP Senri Building, the rate is 4.5% for fiscal 2019 to fiscal 2021 and 4.6% for fiscal
2022 onward.
“Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with July 31, 2020 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.

36

IV Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 11th Fiscal Period)(Unit: thousand yen)

Property nameReal estate lease businessrevenue

Real estate lease business expenses

Rent
revenue

Insurance
expenses

Depreciation
andamortization

Other

Other
revenue

Property tax

Outsourcing

Repairexpenses

NOI (Note 2)

AQUAMARINE Nishinomiyahama

23,803

4,264

2,100

1,220

200

15,616400

59,156

Bonsejour Chitose-funabashi

5,575

1,794

224

-

101

3,048

404

21,448

Bonsejour Hino

5,062

1,240

214

-

77

3,130

400

19,520

Bonsejour Musashi-shinjo

4,096

1,012

167

-

68

2,447

400

16,224

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa

8,391

1,820

213

-

139

5,817

400

21,164

Medical Rehabilitation Home Bonsejour Komaki

14,115

4,565

201

-

321

8,627

400

39,755ASHEIM Hikarigaoka

15,614

3,825

381

1,392

147

9,467

400

39,789ASHEIM Bunkyohakusan

12,145

2,621

381

-

115

8,626

400

38,668

SOMPO CARE La vie Re Machidaonoji

45,723

5,905

780

1,062

347

37,229400

96,50532,672

4,742

780

142

252

26,355400

78,882

26,429

2,655

1,140

-

320

21,913400

47,338SAWAYAKA Mekarikan

25,778

2,970

1,140

-

229

21,039400

43,494SAWAYAKA Tagawakan

8,385

1,108

1,140

-

101

5,635

400

12,933

GOOD TIME HOME Fudo-mae

14,469

3,099

600

778

161

9,429

400

45,960

Bonsejour Yotsugi

4,947

970

223

-

66

3,286

400

20,761

Medical Home Bonsejour Itami

6,509

1,377

371

-

101

4,260

400

14,020

Kobe Gakuentoshi Building (Hapine Kobe
Gakuentoshi)

51,138

9,577

900

-

523

39,737400

114,098

GreenLife Moriguchi Home for The Aged35,285

6,937

1,363

2,088

343

24,152400

108,866

Hapine Kobe Uozaki Nibankan

9,546

1,400

1,200

-

81

6,464

400

24,417

Granda Tsuruma-Yamato

7,285

1,938

618

-

137

4,191

400

27,156

SOMPO CARE La vie Re Azamino
SAWAYAKA Tachibanakan

Not disclosed (Note 1)

37

IV Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 11th Fiscal Period)(Unit: thousand yen)

Real estate lease businessrevenue
Property nameRent
revenue

Real estate lease business expenses

Otherrevenue

Propertytax

NOI (Note 2)

Outsourcing

RepairexpensesInsurance
expenses

Depreciation
andamortization

Other

Smiling Home Medice Adachi

14,608

3,229

540

260

160

10,019400

60,618

AIKOEN ICHIBANKAN Building

9,372

2,560

780

900

102

4,630

400

21,918

Hanakotoba Minami

6,727

1,541

600

120

71

3,994

400

27,866

Hanakotoba Miura

6,772

1,541

600

-

81

4,150

400

17,777

SOMPO CARE La vie Re Hama-Kawasaki

18,662

3,416

2,770

680

186

11,207400

44,904

Hanakotoba Shin-Yokohama

16,049

4,388

900

1,717

225

8,418

400

54,281

Hanakotoba Shin-Yokohama II

5,436

2,499

600

-

83

1,853

400

11,230

8,054

1,356

600

325

89

5,282

400

24,851

25,481

5,256

1,020

319

460

18,025400

56,452

Verde Hotaka

23,954

2,222

1,020

180

225

19,743563

45,894

Sunny Life Kita-Shinagawa

10,318

2,944

600

-

108

6,265

400

45,446

Sunny Life Kamakura

3,113

-

128

-

29

2,883

72

7,406

SOMPO CARE Sompo no ie Awajiekimae

27,014

4,921

510

-

248

20,934400

58,378

SOMPO CARE Sompo no ie Kobekamisawa

17,545

2,908

510

955

163

12,608400

35,353

Niigata Rehabilitation Hospital

26,829

9,849

1,030

-

350

15,099500

78,149SHIP SENRI BUILDING

75,492

27,236

1,500

-

1,069

45,286

400

341,595

652,411

139,701

27,85012,141

7,495

450,881

14,341

1,822,288

Hanakotoba Odawara
Verde Minowa

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

2,023,819 2,015,035

8,783”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

38

IV Appendix

Balance Sheet and Statement of Income for the 11th Fiscal Period
Balance Sheet

Statement of Income(Unit: thousands of yen)
10th Fiscal Period
ended January 2020

(Unit: thousand yen)

11th Fiscal Period
ended July 2020

10th Fiscal Period
ended January 2020

AssetsOperating revenue

11th Fiscal Period
ended July 2020

2,013,274

2,023,819

2,004,334

2,015,035

Current assets

2,450,025

1,889,055

Lease business revenue

Cash and deposits

2,160,660

1,624,242

Other lease business revenue

Cash and deposits in trust

177,603145,223

Prepaid expenses

110,995

119,589766-

Non-current assets

65,726,997

66,926,310

Asset custody fee

3,407

3,408

Property, plant and equipment

65,473,380

66,696,041

Administrative service fees

22,67921,480

Other

8,939

8,783

909,860

951,651

Expenses related to rent business

601,131652,411

Asset management fee

200,660

196,932

Operating expenses

Intangible assets

39,487795

Investments and other assets

214,129

229,473

Deferred assets

46,511

39,047

Investment unit issuance expenses

25,696

19,272

Operating income

20,815

19,774

68,223,535

68,854,413

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

53,45948,111

1,103,413

1,072,167

Non-operating income

1,786

2,398

Interest income

710

Insurance income

-

1,891
-

Interest on refund of consumption taxes

358

Refund of fixed asset taxes

766

-

-

700,000

Reversal of distribution payable

651

367

44,458

Accrued expenses

239,697

236,790812

966

Accrued consumption taxes

25,721

18,359Advances received

329,047

337,61872

410

31,311,236

31,389,820

Investment corporation bonds

2,000,000

2,000,000

Long-term loans payable

27,450,000

2,745,000

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

1,734,009

1,805,509

86,766

86,76640,09747,336362

207

34,988,775

35,742,479

Total liabilities

Other operating expenses

13,0553,000,000

Other

26,307

4,351,659

41,888Deposits received

3,000

25,52140,2983,000,000

Non-current liabilities

3,000

Property tax

3,677,538

Accounts payable – other
Income taxes payable

Directors’ compensations

Net assets
Unitholders’ equity

33,274,857

33,160,269

Unitholders' capital, net

32,293,251

32,202,128

Surplus981,606

958,141

Valuation and translation adjustments△40,097△47,336

Deferred gains or losses on hedges△40,097△47,336

Total net assets

33,234,759

33,112,933

Total liabilities and net assets

68,223,535

68,854,413

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

2

128

160,622

155,669

91,751

86,08942

7,800

11,406

6,424

-

1,040

57,421

54,314

944,576

918,896

Extraordinary income

3,552

-

Subsidy income

3,552

-

3,552

-

Extraordinary losses
Loss on tax purpose reduction entry of noncurrent assets
Income before income taxes

3,552

-

944,576

918,896

Income taxes - current

813

968

Income taxes - deferred

7

△7

821

960

Net income

943,755

917,935

Retained earnings brought forward
Unappropriated retained earnings (undisposed
loss)

37,85140,206

981,606

958,141

Total income taxes

39

IV Appendix

Information Related to Investment Units(As of the end of the 11th fiscal period)
Status of Unitholders
Ratio of Number of
Investment Units by
Unitholder Type
Other
companies
4.9%
Securities
companies
4.2%

Foreigninvestors
9.1%
Individuals, etc.
32.2%

List of Top Unitholders
Ratio of Number of Unitholders
by Unitholder Type
Other
companies
1.4% Foreign
investors
0.6%

Securities
companies
0.1%
Financial
institutions
0.3%

Total
311,001
units

77,325

24.9

Total
15,783
people2

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

32,42910.4

Individu
als, etc.
97.6%

3

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

13,564

4.4

4

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

9,463

3.0

5

NORTHERN TRUST CO. (AVFC) RE
FIDELITY FUNDS

7,627

2.5

6

Morgan Stanley MUFG Securities Co.,
Ltd.

6,005

1.9

7

Credit Suisse AG

5,413

1.7

NEC Capital Solutions Limited

4,000

1.3

SHIP HEALTHCARE HOLDINGS INC.

4,000

1.3

Sumitomo Mitsui Banking Corporation

4,000

1.3

163,826

52.7(Note)

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

50.1%

48.0%

4.4%
8.6%
5.6%

45.4%

4.7%
7.4%
5.2%

50.3%

4.2%
9.1%
4.9%

49.6%

Securities
companies
Foreigninvestors
Other
companies
Financial
institutions

36.3%

35.2%

36.0%

32.4%

32.2%

7th FP

8th FP

9th FP

10th FP

11th FP(Note)

Ownership ratio(%)

Custody Bank of Japan, Ltd.
(Trust Account)(Note) Increased by 63 from the previous fiscal period

3.1%
6.6%
7.1%

Name

１

Financial
institutions
49.6%

1.1%
5.3%
7.2%

Ranking

Number ofinvestment
units owned(units)Ratios in the graphs are rounded to the first decimal place.

Individuals,
etc.

8

Total

40

IV 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 Japan’s Population and Elderly Ratio(10 thousand people)

15,00064 years old
64歳以下oryounger

20.2%

10,000

14.6%

10.3%

5,0 00

Actual10,161

Estimate

40%

65-74
years old65～74歳

26.6%

36.8%

32.8%

30.0%

9,322

8,577

7,740

6,723

10,854

10,718
1,109
717

1,407
1,160

1,754
1,632

1,497
2,180

1,522
2,260

1,643

776
471
昭和60年
1985

平成７年
1995

平成17年
2005

平成27年
2015

平成37年
2025

平成47年
2035

平成57年
2045

0

20%

2,277

0%

Ratio of Elderly Single Households in Elderly Households
30,00020,000Elderly households(65 years old or older)

40.0%

50%

37.4%

6,879

6,756

6,606

6,510

6,590

30%

6,277

6,740

6,763

6,693

6,666

6,870

20%

34.0%

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

June
2015

Guidelines Concerning
REITs Targeting Hospital
Real Estate

March
2016

Housing Life Basic Plan
(nationwide plan)

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.
With 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.

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

Ratio of single
elderly

35.7%

6,650

5,403

4,648

Estimate

39.0%

32.6%

5,818

5,033

0

Couple with noother members

30.7%

28.5%

10,000(Source)

ActualOther
households(Thousand households)

June
2014

3,865

4,980

6,253

7,025

7,512

7,959

8,418

8,963

2005

2010

2015

2020

2025

2030

2035

2040

Outcomeindicator

40%

Resident Capacity
Resident Capacity

230

10%

thousand people

0%

2005

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

0.9%

690

thousand people
2014

2.1%

Resident Capacity

1,460

thousand people
2025

４%

Promotion of Further Supply of Healthcare Facilities

Current Status of Reconstruction of Hospitals, etc.

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

Supply Status of Paid Nursing Homes

(Resident capacity)

600,000

Resident capacity

Supply rate

400,000
200,000

0.5%

0.6%

0.5%

0.6%

0.7%

1.1%

1.0%

0.7%

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

315,234 350,990

1.2%

1.3%

391,144 424,828

1.5%

1.5%

1.4%

482,792 518,507

549,759

2008

2009

2010

2011

2012

2013

2014

0.5%

200,000
150,000
100,000

0

0.18%

0.29%

0.36%

114,3150.42%

135,352

0.46% 0.50%

151,667 166,279

0.59%
0.54% 0.57%

181,083 191,871

2016

2017

2018
（％）

Number of units
Supply rate for 65 years old or older

250,0002015

0.66% 0.67%
0.61% 0.62% 0.64%

202,505 210,859

Ratio of quake-resistant paid nursing homes is 95% or more while that ofquake-resistant hospitals remains at 76.0%.
(Ministry of Health, Labour and Welfare’s 2019 “Survey on Seismic Retrofitof Hospitals”)

1.0%

0.0%

2007

Supply Status of Serviced Housing for the Elderly

50,000

2.0%
1.5%

0

2006

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

1.00%

0.69%

218,195 225,374 231,973

238,289 245,728

0.01% 56,137

89,122

2011

2012

2012

2013

2013

2014

2014

Jun.

2015

2016

2016

2017

2017

2018

2018

2019

Dec.

Jun.

Dec.

Jun.

Dec.

Jun.

Dec.

2015

Dec.

Jun.

Dec.

Jun.

Dec.

Jun.

Dec.

Jun.

3,448

0.50%

0.00%

<“Act for Partial Revision of the Act on Promotion of Seismic Retrofitting of
Buildings” was enforced in November 2013>(Hospital: Having more than 3 floors above ground and a total floor area of
5,000 m² or more)

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

41

IV Appendix

Environment Surrounding Healthcare Facilities (2)Quantitative
QuantitativeExpansion
Expansionfor
forAchieving
Achieving“Zero“ZeroCare
CareLeave”
Leave”andandImprovement
Improvementof
ofNursingNursingCare
CareService
ServiceQuality
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

 Nursing home with care service
designated as operators engaged indaily life long-term nursing care forthose admitted to a specified facility* Facility upgrade costs are provided only tosmall-scale facilities (capacity of 29 people orless).
* Nursing home for the elderly and care house
are also currently receiving subsidies.

 Facility upgrade costs
4.48 million yen per resident
 Opening preparation expenses
839,000 yen per resident Support of lump-sum payment for theestablishment of fixed-term leasehold
1/4 of roadside value(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

42

IV Appendix

Regional Comprehensive Care System
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••Acute care hospital
Subacute and recovery phase/recovery
phase rehabilitation hospital

When you need nursing care...
Nursing care

Hospital visit&
stay

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

Outpatient nursing care&admission

Residence• Regional comprehensive
support center• Care manager••
We coordinate consultation
business and services

Own house
Serviced housing for the elderly, etc.

Patients
with dementia

 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

To live a healthy life forever...

Life support & nursing care prevention

 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.

* 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 Welfare

43

IV Appendix

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

Recovery stage
375,000 beds
(31%)

Chronic stage
284,000 beds
(24%)

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

(Note)

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

44

IV Appendix

HCM’s Investment Philosophy and Three Features

Three Features

Investment Philosophy

Investment in healthcare facilities for which demandis expected to growServe 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 infrastructure• Increase in demand due to further advancement of aging society• Upgrades and expansion of healthcare facilities backed bygovernment policy

Strong support from sponsors• Utilization of advanced expertise in “nursing care and medical
service,” “fund management” and “finance” held by SHIPHEALTHCARE, NEC Capital and SMBC

• Securement of property acquisition opportunities by utilizing
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 agreements withcredible operators
Proper portfolio management based on strong relationship with
operators

45

IV Appendix

HCM’s Network

Asset Custody Company
Administrative Agent
Administrator of the Unitholders’Registry

HCM

Sumitomo Mitsui Trust Bank
Healthcare & Medical
Investment Corporation

Accounting Auditor

General meeting of unitholders

PricewaterhouseCoopers Aarata LLC

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

Sponsor Support Companies

Support Companies

Asset Management
Agreement

SMBC Trust Bank Ltd.
RISA Partners, Inc.

Sumitomo Mitsui Finance andLeasing
Yoei

Asset Management Company
Sponsor Support
Agreement

Pipeline Support
Agreement

GinsenKobe Tochi Tatemono
Muromachi Building

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

Healthcare
Asset Management Co., Ltd.

46

IV Appendix

Overview of Unitholder Special Benefit Plan
Company Name

Benesse Senior Support Co., Ltd.

Sompo Care Inc.

JAPAN LIFEDESIGN Inc.

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

Sawayaka Club Co., Ltd.

AS PARTNERS Co., Ltd.

Proud Life Inc.

(Benesse’s consultation
room for nursing care)

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

Tour with free lunchDiscount deposit or initial fees

(Note 1) Details of special benefits are for people who are unitholders as of the end of 11th fiscal period and are subject to change.

47

IV Appendix

Profile of Asset Management Company
Organizational Structure

Profile of the Company
Trade name

Healthcare Asset Management Co., Ltd.

Location

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

FoundedNovember 28, 2013

Capital stock

150 million yen

CEO

Seiji Yoshioka
SHIP HEALTHCARE HOLDINGS, INC.
NEC Capital Solutions Limited
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Finance and Leasing Company, Limited

Shareholders

SMBC Nikko Securities Inc.
Yoei
GinsenKobe Tochi Tatemono
Muromachi Building

General Meeting of
Shareholders
Audit & Supervisory
Board Member
Board of Directors
Management Committee
33.3%

Representative Director

33.3%
5.0%
4.8%

Compliance Committee

Internal Audit OfficeCompliance Office

4.8%
4.7%
4.7%
4.7%

Investment Department

Asset Management
Department

Financial & Administration
Department

4.7%

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

48

IV Appendix

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

Headquarters
location

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

Representative

Chairman 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

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memo

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Disclaimer
This presentation material contains forward-looking statements including forecasts,
outlooks, goals and plans. These statements are based on the information
available as of the date when this material is prepared (September 15, 2020) andincorporate certain subjective assumptions about uncertain factors that may affectfuture results. Accordingly, these statements are inherently not guarantees of
future performance and actual results may differ materially.
The opinions, outlooks and estimates contained in this material reflect our viewand judgment based on information as of the date when this material is preparedand involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness andvalidity of information contained in this material. It is not promised that
information contained in this material will always be updated.
Contents of this material are subject to change without notice.
This material is not intended as a solicitation for investment. Any investment
decision must be made based on your own judgment and responsibility.

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