Hospital

Financial Results Briefing Materials

Servicedhousing
for theelderly

Fiscal Period Ended July 2018
(7th Fiscal Period)
September 19, 2018

Paid nursing
homeThis 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.
Securities Code: 3455
Asset Management Company

Ⅰ

Topics
1. 7th Fiscal Period (Ended July 2018) Highlights
2.

8th Fiscal Period (Ending January 2019) Onward
Highlights

3. New Property Acquisition
4. Change in Distribution Per Unit
5.

Ⅱ

Distribution Per Unit
(After Temporary Effect Adjustment)

Ⅲ
P3

1. Three Actions

P16

P4

2. Road Map to External Growth

P17

P5-6

3. Expansion of Pipeline

P18-20P7

4. Actions for Acquisition of Hospital Real EstateP21-22P8

5. Continuous of Distribution in Excess of Earnings

P23

6. Actions for ESG

P24

Financial SummaryⅣ

1. 7th Fiscal Period (Ended July 2018) Financial Highlights

P10

2. Actual Results for 7th Fiscal Period (Ended July 2018)

P11

3.

8th Fiscal Period (Ending January 2019) and9th Fiscal Period (Ending July 2019) Earnings Forecasts

Actions for Enhancement of Unitholder Value

Appendix

P12

4. Change Factors for Distribution Per Unit

P13

5. Financial Status

P14

1

Topics2

I Topics

1. 7th Fiscal Period (Ended July 2018) Highlights

1

Actual Results
 Operating revenue:

1,267 million yen (+48 million yen from previous fiscal period)

 Net income:

521 million yen (+8 million yen from previous fiscal period) Distribution per unit : NAV per unit

2:2,699 yen (+46 yen from previous fiscal period, +50 yen from forecast (Note 1))
117,445 yen (+1,736 yen from previous fiscal period)

Status of Management
 Asset size: 25 properties/40.5 billion yen (Note 2), with 2.8 billion yen of unrealized gain The only J-REIT owning hospital real estate Pipeline expanded to over 30 billion yen (Note 3) through utilization of bridge funds formed by the sponsors, etc.

3

Financial Status
 Total amount of loans of 20.7 billion yen, 8 billion yen of which is refinanced.
 Ratio of long-term loans: 95.2% (+33.8% from end of previous fiscal period), average remaining terms tomaturity: 2.8 years (+0.8 years from end of previous fiscal period), LTV: 48.8% (±0.0% from end of previous
fiscal period)
 Long-Term Issuer Rating: A (Stable) (Note 4)(Note 1): Figure disclosed in the Financial Report for Fiscal Period Ended January 2018 dated March 14, 2018.
(Note 2): Based on acquisition prices.
(Note 3): The total amount of pipeline properties includes planned acquisition prices of properties being developed by sponsors or support companies.
(Note 4): Rating Agency: Japan Credit Rating Agency, Ltd. (JCR).

3

I Topics

2. 8th Fiscal Period (Ending January 2019) Onward Highlights

1

Expansion of Portfolio
 Acquisition of two paid nursing homes with care service in the Tokyo Metropolitan Area planned in October 2018
 Asset size to be expanded from 40.5 billion yen to 42.1 billion yen (Note 1)

2

Action to Improve Capital Efficiency
 Execution of continuous distribution in excess of earnings (planned) (Note 2)

3

8th Fiscal Period (Ending January 2019) and 9th Fiscal Period (Ending July 2019)
Earnings Forecast
 Operating revenue:

8th FP 1,301 million yen (+33 million yen from 7th FP),
9th FP 1,318 million yen

 Net income:

8th FP 535 million yen (+14 million yen from 7th FP),
9th FP 541 million yen

 Distribution per unit
(Including distribution in excess of earnings): 8th FP 3,100 yen,
9th FP 3,130 yen(Excluding distribution in excess of earnings) 8th FP 2,773 yen (+74 yen from 7th FP),:
9th FP 2,801 yen(Note 1): Based on acquisition prices.
(Note 2): Execution of continuous distribution in excess of earnings is subject to resolution at the third general meeting of unitholders to be held on October 30, 2018, regarding amendment to the Articles of Incorporation to add a provision
specifying a policy to execute continuous distribution in excess of earnings every fiscal period, in principle. The same shall apply hereinafter.

4

I Topics

3. New Property Acquisition (1)HCM concluded, on September 14, 2018, a purchase agreement for acquisition of two properties (Hanakotoba Minami and
Hanakotoba Miura) for a (planned) acquisition price of 1.68 billion yen with a bridge fund formed by sponsors.
Overview of Property to be Newly Acquired (Hanakotoba Minami)

Overview of Property to be Newly Acquired (Hanakotoba Miura)

Hanakotoba Miura

Hanakotoba Minami

Property nameHanakotoba Minami

Property nameHanakotoba MiuraType

Paid nursing home with care service

Type

Paid nursing home with care service

Location

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

Location

3-5 Suwacho, Miura-shi, Kanagawa

Operator

Proud Life Inc.

Operator

Proud Life Inc.

Opening date

April 2010

Opening dateAugust 2007

Appraisal value

1,190 million yen (Appraisal date: August 31, 2018)

Appraisal value

664 million yen (Appraisal date: August 1, 2018)

Planned acquisition price

1,071 million yen

Planned acquisition price

615 million yen

Appraisal NOI yield

5.2%

Appraisal NOI yield

5.7%

Remaining years of leaseagreement

14.1 years

Remaining years of leaseagreement

14.1 years

No. of rooms/Resident capacity

51 rooms/51 people

No. of rooms/Resident capacity

53 rooms / 54 people

Occupancy rate (Note 1)

100%

Occupancy rate (Note 1)

96.3%

SellerGodo Kaisha MYGK1 No.1

SellerGodo Kaisha MYGK1 No.1

Other

Located approximately a 4-minute walk from
Yoshinocho Station on the Yokohama Municipal
Subway Blue Line, the property offers excellent
transport convenience and thus has advantages insoliciting residents and securing employees. All
rooms are for single occupancy with an ample spaceof around 18 m2. With no initial fees and monthly
fees of 200,000 yen or less, it enjoys a highoccupancy rate.

Other

Southwestern part of Miura Peninsula where theproperty stands is a place of scenic beauty withleisure spots such as marinas and aquariums,
vacation homes and high-priced nursing homes.
Transport access is generally favorable as it islocated close to a bus stop. Residents are not only
from surrounding areas but also from further areas
including Yokohama and Tokyo.

5(Note 1): The occupancy rate is based on the Property Disclosure Statement of Important Issues dated July 1, 2018

I Topics

3. New Property Acquisition (2)The operator is Proud Life Inc., a subsidiary of Sony Lifecare Inc. which is under Sony Financial Holdings Inc. It operates 26
facilities (resident capacity: 1,344 people) mainly in Kanagawa Prefecture as well as in Tokyo and four other prefectures.

Overview of the Operator
Company name

Proud Life Inc.

Representative

Representative Director and President: Hiroshi Sonoda

Location

2-8-4 Kitasaiwai, Nishi-ku, Yokohama-shi, Kanagawa

FoundedJuly 2006

Capital stock

3 million yen

Shareholder

Sony Lifecare Inc. (100%)

No. of operating
facilities (Note 1)

26 facilities

Former Yuuai Holdings Group company. Operates paid
nursing homes under the “Hanakotoba” brand, etc. in theTokyo Metropolitan Area centering on Kanagawa andComments

Tokyo as well as in northern Kanto, Shinetsu and Tohoku
areas.
Came under Sony Financial Holdings Inc. in 2017, andcurrently operates 26 facilities (resident capacity: 1,344
people) in Tokyo and five other prefectures.

Portfolio Status after Acquisition (as of October 1, 2018)

End of 7th FP

Newly
acquiredproperties

After newacquisition

Number of properties(properties)

25

2

27

(Planned)acquisition price(billion yen)

40.5

1.6

42.1

Total appraisal value(billion yen)

44.0

1.8

45.8

Average appraisal
NOI yield
(%)

5.7

5.4

5.7

Number of Operators

8

1

9

Ratio of investmentin three major
metropolitan areas
(%)

84.9

100

85.5

LTV
(%) (Note 2)

48.8

－

50.8

(Note 1): The figure indicates a figure tallied by the Asset Management Company based on the information obtained from the company and information provided on its website (as of August 31, 2018).
(Note 2):LTV after new acquisition is an estimate reflecting the planned acquisition price this time and the loan amount based on the price, in the figure as of the end of 7th Fiscal Period.

6

I Topics

4. Change in Distribution Per Unit
(yen)
3,200

Distribution per unit (excluding distribution in excess of earnings)
Distribution per unit (distribution in excess of earnings)

3,100

3,130
329

327
2,800

2,801

2,730

2,699

2,697

2,773

2,653
2,600

2,440
2,400

2,340

2,200
2nd FP
Ended Jan. 2016

3rd FP
Ended July 2016

4th FP
Ended Jan. 2017

5th FP
Ended July 2017

6th FP
Ended Jan. 2018

7th FP
Ended July 2018

8th FP
Ending Jan. 2019
(Forecast)

9th FP
Ending July 2019
(Forecast)

7(Note 1): Distribution in excess of earnings to be executed from the 8th Fiscal Period (ending January 2019).

I Topics

5. Distribution Per Unit (After Temporary Effect Adjustment (Note 1))(yen)

Distribution per unit (excluding distribution in excess of earnings)

3,200

Distribution after temporary effect adjustment (Note 1)

3,100

Distribution in excess of earnings

3,130

2,800

2,730

2,697

2,699

2,738

2,653
2,600

2,652

2,440
2,400

2,200

2,776

2,340

2,516
2,443

2,374

2,281
2,218

0
2nd FP
Ended Jan. 2016

3rd FP
Ended July 2016

4th FP
Ended Jan. 2017

5th FP
Ended July 2017

6th FP
Ended Jan. 2018

7th FP
Ended July 2018

8th FP
Ending Jan. 2019
(Forecast)

9th FP
Ending July 2019
(Forecast)

8(Note 1): Temporary effect refers to temporary revenues (insurance income, etc.), property tax and urban planning tax and investment unit issuance expenses which have not been expensed.

Financial Summary

9II Financial Summary

1. 7th Fiscal Period (Ended July 2018) Financial Highlights
Asset (Assets)
Number of properties

Debt (Liabilities)
25 Properties

Total amount of loans

20.7 billion yen

Average remaining terms tomaturity
Total acquisition priceTotal appraisal value

Unrealized gain
(Ratio of unrealized gain) (Note 1)

40.5 billion yen

44.0 billion yen

2.8 billion yen(6.9%)

5.7%

Operational rate

100%

Ratio of fixed rents

100%

Ratio of investment in three major
metropolitan areas

84.9%

13.7 years(+0.8 years from end of previous fiscal period)
0.61%(+0.03% from end of previous fiscal period)
95.2%

Ratio of long-term loans(+33.8% from end of previous fiscal period)(+0.1 billion yen from previous fiscal period)

Average appraisal NOI yield

Average Remaining Lease Term

Average borrowing interest rate

2.8 years

Ratio of loans with fixed interest
rates

95.2%

LTV

48.8%

Long-Term Issuer Rating (JCR)

A (Stable)

Equity (Net assets)
Total sum of fair value

Distribution per unit

NAV per unit

21.5 billion yen

2,699 yen(+46 yen from previous fiscal period)

117,445 yen(+1,736 yen from end of previous fiscal period)

10(Note 1): Unrealized gain is calculated as: Appraisal value at the end of 7th FP - Book value at the end of 7th FP
Ratio of unrealized gain is calculated as: Unrealized gain (Appraisal value at the end of 7th FP - Book value at the end of 7th FP) / Book value at the end of 7th FP

II Financial Summary

2. Actual Results for 7th Fiscal Period (Ended July 2018)
Full-period contribution of rent income from hospital real estate acquired in the previous fiscal period (6th FP). Increased
distribution per unit by 46 yen.
(Unit: million yen)
6th Fiscal
Period(Ended July 2018)(Ended January 2018)

Actual(A)
Operatingrevenue

7th Fiscal Period Actual Results(Comparison with Forecast)

7th Fiscal Period
Forecast(Note 1)

(B)

1,219

Actual

(C)

1,267

1,267

Comparison
with Forecast(C)- (B)+0

Difference in operating expenses (-4)

Comparison with
6th Fiscal Period(C)- (A)+48

 Decrease in expenses related to rent business (-4)
 Repair expenses (-3)(C)- (A)(A)(％) (Note 2)

Difference in non-operating revenue (+3)

+3.9

Difference in non-operating expenses (-1)

 Increase in insurance income Decrease in interest expenses, etc.
Operatingexpenses

595

646

642

-4

+47

+7.9

Expenses related
to rent business

392

445

441

-4

+49

+12.7

7th Fiscal Period Actual Results(Comparison with 6th Fiscal Period)
Difference in operating revenue (+48)(Depreciation)

298

307

307

+0

+9

+3.1

Operatingincome

624

620

625

+4

+0

+0.2

 Full-period contribution of rent income from properties acquired in the 6th
Fiscal Period, etc. (+49)
 Review of some tenantsʼ rent (-1) (Note 3)

Difference in operating expenses (+47)
 Increase in expenses related to rent business (+49)

Ordinary
income

513

512

522

+9

+8

+1.7

Net income

512

511

521

+9

+8

+1.7

 Property taxes (+35)→ Expensing of ﬁxed asset tax and city planning tax for properties acquired in 5th
and 6th FPs
 Depreciation (+9)
 Repair expenses (+3)

Difference in non-operating revenue (+3)

Distribution
per unit
(yen)

2,653

NAV per unit
(yen)

115,709

2,649

2,699

+50

+46

+1.7

 Increase in insurance income

Difference in non-operating expenses (-4)―

117,445―＋1,736―

 Decrease in investment unit issuance expenses, etc.

(Note 1): The forecast for the 7th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended January 2018” dated March 14, 2018.
(Note 2): Figures are rounded to the first decimal place.
(Note 3): AQUAMARINE Nishinomiyahama houses a nursery school as a tenant (leased area: 85.12 m2). The rent level was reviewed during the 7th Fiscal Period as the rent was significantly higher compared to the rent level in the surrounding
area.

11

II Financial Summary

3. 8th Fiscal Period (Ending January 2019) and9th Fiscal Period (Ending July 2019) Earnings Forecasts

Revenue and profits are forecast to increase in both the 8th and 9th Fiscal Periods due to new property acquisition in the 8th
Fiscal Period. Distribution per unit (including distribution in excess of earnings) is expected to surpass 3,000 yen.
(Unit: million yen)
7th Fiscal
Period

8th Fiscal Period(Ended July 2018)

Actual(A)

Forecast(B)(Ending July 2019)

Comparison with
7th Fiscal Period(B)- (A)8th Fiscal Period Forecast(Comparison with 7th Fiscal Period )9th Fiscal Period(Ending January 2019)

Forecast(B)- (A)(A)(％) (Note 1)(C)

Comparison with 8th
Fiscal Period Forecast(C)- (B)(C)- (B)(B)(％) (Note 1)

Difference in operating revenue (+33)
 Increase in rent income due to property acquisition

Difference in operating expenses (+12)

Operatingrevenue

1,267

1,301

+33

+2.7

1,318

+17

+1.3

Operatingexpenses Increase in expenses related to rent business (+11)
Depreciation (+9)
 Increase in expenses related to general meeting of unitholders (+4)
 Reduction of expertsʼ fees (-2)

642

654

+12

+2.0

666

+11

+1.8

Difference in non-operating revenue (-3)

Expenses related
to rent business

441

452

+11

+2.6

462

+9

+2.2

(Depreciation)

307

317

+9

+2.9

322

+5

+1.8

Operatingincome

625

646

+21

+3.4

651

+5

+0.8

Ordinary
income

522

536

+14

+2.8

542

+5

+1.0

Net income

521

535

+14

+2.8

541

+5

+1.0

Distribution
per unit
(yen)

2,699

3,100

+401

+14.9

3,130

+30

+1.1

Excluding
distribution inexcess of
earnings

2,699

2,773

+74

+2.7

2,801

+28

+1.0

Distribution inexcess of
earnings

―

327

+327

―

329

+2

+0.6

 Decrease in insurance income

Difference in non-operating expenses (+3)
 Increase in interest expenses, etc. (+6)
 Decrease in loan fees, etc. (-3)

Forecast for the 9th Fiscal Period(Comparison with 8th Fiscal Period forecast)Difference in operating revenue (+17)
 Full-period contribution of rent income from properties acquired in the 8th
Fiscal Period

Difference in operating expenses (+11)
 Increase in expenses related to rent business (+9)
 Depreciation (+5)
 Property taxes (+3)

 Increase in asset management fee (+4)
 Decrease in expenses related to general meeting of unitholders. (-4)

12(Note 1): Figures are rounded to the first decimal place.

II Financial Summary

4. Change Factors for Distribution Per Unit
Distributions for the 8th and 9th Fiscal Periods are expected to increase due to an increase in rent income accompanying
property acquisition.

(yen)

Distribution (excluding distribution in excess of earnings)

Distribution (distribution in excess of earnings)

3,200

Factor for distribution increase

Factor for distribution decrease

9th FP
Forecast

8th FP
Forecast
Full-period
contributionof rent
income fromproperties
acquired in
the 6th Fiscal
Period

3,000

2,800

+256

Review ofsometenantsʼ rent

-8

Increase in
expensesrelated torent business-256

6th FP
ActualIncrease inrent income
due topropertyacquisition

Decrease in
otheroperatingexpenses+13

Increase ininsurance
income+17

Decrease ininvestment
unit issuance
expenses,etc.

Increase inoperatingexpenses-66

327
Decrease ininsurance
income-18+174
7th FP
ActualIncrease ininterest
expenses-35

Decrease inloan fees,etc.

Full-period
contributionof rent
income fromproperties
acquired in
the 8th Fiscal
Period+88329
Increase inoperatingexpenses

-61

+19

+23

2,600

2,2000

2,699

2,653

6th FP
ActualMain change factors

2,400

7th FP (Ended July 2018)
Actual

8th FP (Ending January 2019)
Forecast

Full-period contribution of rent income from properties acquired in the 6th
Fiscal Period
Review of some tenantsʼ rent

+256 yen

Increase in rent income due to property acquisition

9th FP (Ending July 2019)
Forecast+174 yen-8 yen-256 yen

Increase in operating expenses-66 yenDecrease in other operating expenses+13 yenDecrease in insurance income-18 yenIncrease in insurance income+17 yenDecrease in investment unit issuance expenses+23 yenIncrease in interest expenses-35 yenDecrease in loan fees, etc.

+19 yenIncrease in expenses related to rent business

Increase in expenses accompanying acquisition of hospital
Increase in expenses due to factors other than acquisition of hospital

その他(-105 yen)(-151 yen)

+8 yen

2,801

2,773

Full-period contribution ofrent income fromproperties acquired in the
8th Fiscal Period+88 yenIncrease in operating
expenses-61 yen13

II Financial Summary

5. Financial Status
Conducted refinancing of 8 billion yen in March 2018 to seek further financial stability through extension of loan periods anddiversification of maturities.
Status of Interest-Bearing Liabilities
Total amount of
loans

LTV

20.7 billion yen

48.8%

Diversification of Lenders
Ratio of loans with
fixed interest rates

 Solid lender formation centering on the sponsor SMBC has been established.
(Amount, %)SMBC

8.5 billion yen, 41.1%

Sumitomo Mitsui Trust Bank(±0 yen from end of previous fiscal period)

Ratio oflong-term loans

95.2%(±0 yen from end of previous fiscal period)(±0 yen from end of previous fiscal period)

Average remaining
terms to maturity

95.2%(+33.8% from end of previous fiscal period)

Resona Bank

0.61%(+0.8 years from end of previous fiscal period)

1.6 billion yen, 7.7%
1.6 billion yen, 7.7%

Shinkin Central Bank

0.75 billion yen, 3.6%

Nishi-Nippon City Bank

0.75 billion yen, 3.6%

Bank of Fukuoka

0.75 billion yen, 3.6%

Mie Bank

0.75 billion yen, 3.6%

77 Bank

0.75 billion yen, 3.6%

Dai-ichi Life Insurance

0.75 billion yen, 3.6%

Average borrowinginterest rate

2.8 years

3.25 billion yen, 15.7%

Nippon Life Insurance

Hiroshima Bank(+0.03% from end of previous fiscal period)

0.75 billion yen, 3.6%

Higashi-Nippon Bank

Change in LTV and Total Amount of Loans

0.50 billion yen, 2.4%

Diversification of Maturities

 Operating to keep LTV at around 50%, supported by stable funding capability.
(billion yen)(%)

Total interest-bearing liabilities
LTV

25.0

50.2

50.5

50.2

50.0

20.0
15.0

48.8

48.4

10.0

49.5

48.9

48.8

48.8

10.0

Existing loans

13.0

13.0

14.0

14.0

20.7

20.7

20.7

1st FP
Ended
July
2015

2nd FP
Ended
January2016

3rd FP
Ended
July
2016

4th FP
Ended
January2017

5th FP
Ended
July
2017

6th FP
Ended
January
2018

7th FP
Ended
July
2018

48.0
47.5

Refinancing

8.0
6.0
4.0

8.0

6.7

48.5

5.0
0

49.0

(billion yen)

2.0
0

Fixed

5.0
3.0

1.0

Floating

Fixed

Fixed

4.0

Fixed

1.0

7th FP 8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP 18th FP
Ended Ending Ending Ending Ending Ending Ending Ending Ending Ending Ending Ending
July January July January July January July January July January July January
2023
2024
2023
2022
2022
2021
2020
2021
2020
2019
2019
2018

Fixed

14

Actions for Enhancement ofUnitholder Value

15

III Actions for Enhancement of Unitholder Value

1. Three Actions

1

Expansion of Excellent Pipeline
 Establishment and utilization of a system to gather quality deals and information
 Continuation of actions for capturing opportunities to invest in hospital real estate

2

Execution of Continuous Distribution in Excess of Earnings (Planned)
 Distribution Measures that Contribute to Improvement of Capital Efficiency
 Execution of distribution in excess of earnings targeting around 20% of depreciation cost3

Actions for ESG
 Establishment of basic ESG policy
 Promotion of actions to reduce environmental burden and to solve social issues rising in the aging society, as well
as of establishment of governance system, through collaboration with in-house/outside stakeholders.

16III Actions for Enhancement of Unitholder Value

2. Road Map to External Growth
HCM projects an asset size of 100 billion yen over the medium term. (Note 1)
HCM acquired 11 properties/18.5 billion yen, including hospital real estate, in about 3.5 years since IPO, and the asset size is
expected to grow about 1.8 times to 42.1 billion yen. (Note 2)
Change in Asset Size and Number of Properties
March 2016
Acquired 2 properties (1.3 billion yen)February and March 2017
Acquired 6 properties (13.4 billion yen) through the 1st PO

November 2017
Acquired J-REITʼs first hospital realestate for 2 billion yen

October 2018
Plans to acquire 2 properties(1.6 billion yen)(billion yen)100

Bonsejour Yotsugi

Kobe Gakuentoshi
BuildingGreenLife Moriguchi
Home for The Aged

Hapine Kobe Uozaki
Nibankan

Hanakotoba Minami
Niigata Rehabilitation Hospital

Medical Home
Bonsejour Itami

GrandaTsuruma-Yamato

Smiling Home
Medice Adachi

AIKOEN ICHIBANKAN
Building

Hanakotoba Miura(No. of properties)
40

100<Target >Asset size
No. of properties

35

38.4

40.5

40.5

42.1

500
50

(Note 1)

400
40

30

25

23.6

23.6

25.0

24

25

27

300
30

20
200

20

15

25.0

25

18

18

2nd FP
第2期
Ended
2016年
January2016

3rd FP
第3期
Ended
2016年
July
2016

4th FP
第4期
Ended
2017年
January2017

5th FP
第5期
Ended
2017年
July
2017

6th FP
第6期
Ended
2018年
January
2018

7th FP
第7期
Ended
2018年
July
2018

1月期

7月期

1月期

7月期

1月期

7月期

16

16

1st FP
第1期
Ended
2015年
July
2015
7月期

(Note 1): The target may not be achieved due to future events, market environment and other factors.
(Note 2): Including 2 properties to be acquired in October 2018.

8th FP
第8期
Ending2019年
January
2019(forecast)
1月期

Mid-term goal
中期目標

10
100

17

III Actions for Enhancement of Unitholder Value

3. Expansion of Pipeline (1)HCM holds a total of over 30 billion yen (Note 1) pipeline as of the end of 7th Fiscal Period. HCM aims to achieve an asset size of
100 billion over the medium term by focusing on expansion of pipeline through a system to gather quality deals andinformation utilizing sponsor support.
Over 30 Billion Yen Pipeline in Total (Example)
Hospital/paid nursing home

SHIP Senri Building(Toyonaka-shi, Osaka)
Paid nursing home

Verge Minowa(Takasaki-shi, Gunma)

Paid nursing home

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

Vivace Tajimacho(SOMPO CARE La vie Re Hama-Kawasaki)(Kawasaki-shi, Kanagawa)Paid nursing home

Hanakotoba Shinyokohama(Yokohama-shi, Kanagawa)Paid nursing home

Medical Rehabilitation Home
Granda Toyota-Motomachi(Toyota-shi, Aichi)

Focus on capturing deals on prime healthcare facilities (already opened or to be
newly developed) utilizing extensive networks and functions as well as specialized
know-how possessed by sponsors(Note 1): In case a sponsor or an SPC formed by a sponsor, etc. decides to sell a healthcare facility they own, HCM has the first refusal rights to acquire the property. However, the acquisition is undecided and there is no guarantee that HCM will
acquire the property in the future. The total pipeline amount includes planned acquisition prices of properties that are being developed by sponsors or support companies. The above properties are some of healthcare facilities owned bysponsors or SPCs formed by sponsors, etc.

18

III Actions for Enhancement of Unitholder Value

3. Expansion of Pipeline (2)HCM has focused on building a system to gather more specialized information by developing networks of operators, medical
corporations, developers, housebuilders, etc.
System to Gather Quality Deals and Information

OwnersFacilities and housing forthe elderly

Operators(Individuals, business
operators, funds, etc.)(already opened)

Expert know-how
Facilities andhousing for theelderly(to be developed)

Developers
Housebuilders

Extensive networks

Extensive
sourcing routes

Supportagreement

Sponsor andsupporting company
networks
Asset managementcompanyʼs own
network

Expert know-how

Supportagreement

Extensive
warehousing
functionsUtilization ofbridge SPCs

Nursing care and medical service
Fund management
Finance

Medicalservice-related
facilities

Utilization of balance
sheets of sponsors
and others

Warehousing function

Medicalcorporation

Capture quality deals on a negotiationbasis at the right timing

19

III Actions for Enhancement of Unitholder Value

3. Expansion of Pipeline (3)Pipeline has steadily increased, including development cases. (The following are some of properties for which HCM obtained
first refusal rights in or after the 6th Fiscal Period.)
AMICA VILLA INAGE (already opened)

Sunny Life Kita-Shinagawa (to be developed)
Paid nursing home

Paid nursing home

AMICA VILLA INAGE

Sunny Life
Kita-Shinagawa

Location

Inage-ku, Chiba-shi, Chiba

Location

Shinagawa-ku, Tokyo

Operator

HCM (ALSOK Group)

Operator

Kawashima Corporation

Opening date

May 2008

Opening dateNovember 2018 (planned)

No. of rooms/Resident capacity

85 rooms/95 people

No. of rooms/Resident capacity

Case overview

A bridge fund formed by sponsors acquired the property from theprevious owner (a business company).

Case overview

66 rooms/66 people
Effective utilization of a former company housing site which was
owned by the sponsor (SMBC). Our team led every process fromselection of the operator to construction/owning of the building.

Sawayaka Seaside Kuki-no-umi (already opened)
Paid nursing home

Granda Yamahana (to be developed)
Paid nursing home

Sawayaka Seaside
Kuki-no-umi

Granda Yamahana

Location

Wakamatsu-ku, Kitakyushu-shi, Fukuoka

Location

Chuo-ku, Sapporo-shi, Hokkaido

Operator

Sawayaka Club

Operator

Benesse Style Care

Opening dateJune 2017

Opening dateNovember 2018 (planned)

No. of rooms/Resident capacity

80 rooms/80 people

No. of rooms/Resident capacity

Case overview

Captured needs for real estate liquidation of the property
developed/owned by operators by utilizing sponsorsʼ networks
and warehousing functions.

Case overview

52 rooms/56 people
Case involving relocation/reconstruction of existing nursing home.
Max-Realty, the support company, captured the operatorʼs suchneeds, and led every process of development including landacquisition.

20

III Actions for Enhancement of Unitholder Value

4. Actions for Acquisition of Hospital Real Estate (1)As understanding of REITs by medical corporations has deepened, opportunities for investment in hospital real estate are likely
to increase going forward.
Environment Surrounding Hospitals

Opportunity for REITsʼ Investment in Hospitals

 The governmentʼs measures towards 2025 when the baby-boom generation
become 75 or older
 Establishment of Regional Comprehensive Care System (see p.44)
 Actualization of the Regional Healthcare Vision (see pp. 45-46)
̶ Promotion of functional differentiation and coordination of hospital beds thatcomply with the medical demand in the area of the vision (secondary
medical area).

 The hospital real estate accounts for more than half of the entire healthcare
facility market and is mostly owned by medical corporations, etc. themselves

Serviced housing for the elderly
4%Group homes6% Strengthening of financial standing Refinancing and realization of assets in line with business succession
 M&A
 Multi-use development
 Strengthening of medical functions/fund procurement for conversion
 Reconstruction and extension/renovation of buildings (Ratio of quake-resistanthospitals: 72.9％ (2017 survey by Ministry of Health, Labour and Welfare)Market Size of Hospital Real Estate (Note 1)

Paid nursing home
13%

Main needs of hospitals

Other Exit strategy of business revitalization funds

Strengths of HCM
Hospital
real estate
51%

Healthcare
facility realestate market
45 trillion yen

 SHIP HEALTHCAREʼs abundant insights and various support experience in“medical business” and SMBC/NEC Capitalʼs financing and financing know-how
for “medical business”
 A broad network with the three main sponsor companies and the parties related
to the “system to gather quality deals and information”(as of June 30, 2016)

Three long-termcare insurance facilities
26%

Stable management foundation based on expertise in hospitalbusiness and a trust relationship with hospital personnel

21(Note 1): Prepared by the Asset Management Company based on preliminary calculation by KPMG Healthcare Japan Co., Ltd.

III Actions for Enhancement of Unitholder Value

4. Actions for Acquisition of Hospital Real Estate (2)HCM will acquire prime hospital real estate, through utilization of expertise in hospital business, and will seek stable operation
by establishing a trust relationship with hospital personnel.
Management Policy of HCM, etc.

1

Major investment target A hospital able to play an important role in the Regional Healthcare Vision Possible to include a medical mall, health check-up center, etc. other than hospitals
 In principle, no investment that involves hospital operation (ex: investment for business revitalization, etc.)

2

Investment management system complying with the “Hospital Real Estate
Guidelines” (Note 1)
 Allocation of experts familiar with hospital business in the Asset Management Company
 Compliance with the provisions and notices of the Medical Care Act, etc.
 Conclusion of a fixed-rent/long-term lease agreement, in principle

3

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

4

Promotion activities for market expansion
 Participation in seminars for medical/nursing care facilities-related operators(organized by Ministry of Land, Infrastructure, Transport and Tourism, Financial Services Agency, etc.)
 Lectures at industry group meetings (Congress of Japan Hospital Association, etc.)(Note 1): “Hospital Real Estate Guidelines” refers to “Guidelines Concerning REITs Targeting Hospital Real Estate” published on June 26, 2015 by the Ministry of Land, Infrastructure, Transport and Tourism.

22

III Actions for Enhancement of Unitholder Value

5. Continuation of Distribution in Excess of Earnings
Concerning distribution per unit for 8th Fiscal Period onward, HCM has decided to propose an addition of a provision specifyinga policy to execute continuous distribution in excess of earnings every fiscal period, in principle, to the Articles of Incorporation
at the general meeting of unitholders to be held in October 2018.
Overview of Execution

Background to Execution

 HCM will execute continuous distribution in excess of earnings every fiscal period
in principle, up to the amount around 20/100 of the depreciation cost recorded in
the calculation period immediately before the period when HCM will pay the said
distribution by sufficiently taking into consideration the amount of capital
expenditure necessary for maintaining and improving the competitiveness of
HCMʼs Assets Under Management and the financial position of HCM.

Up to the amount around 20/100 of the depreciation cost
Level of distribution inrecorded in the calculation period immediately before theexcess of earnings
period when HCM will pay the said distribution.
Execution period

Distribution in excess of earnings starting in 8th Fiscal Period,in principle

Distribution in Excess of Earnings (Image) Depreciation cost for 7th Fiscal Period was 307 million yen, which was roughly
24% of operating revenue (1,267 million yen), and thus a ratio of depreciation
cost against operating revenue is high.
 On the other hand, the amount of capital expenditure actually required tends toremain small compared to the amount recorded as depreciation cost.

Execute continuous distribution in excess of earnings fromperspective of capital efficiency for utilizing reserved fund

Actual Operating Revenue, Depreciation cost andAmount of Capital Expenditure
Operating revenue

Expenses related
to rent business,
non-operating
expenses,
etc.

Lease businessrevenue

Distribution in excess ofearnings targeting around 20%
of depreciation cost(return of capital)(Unit: million yen)

Depreciation cost
Amount of capital expenditure

Depreciationcost

Net income

Distribution in excessof earnings

Distribution(profit)

1st FP(Ended July 2015)

3rd FP
5th FP
7th FP(Ended July 2016)(Ended July 2017)(Ended July 2018)
2nd FP
4th FP
6th FP(Ended January 2016)(Ended January 2017)(Ended January 2018)23

III Actions for Enhancement of Unitholder Value

6. Actions for ESG
In order for HCM and the Asset Management Company to practice asset management that is considerate of Environment, Socialand Governance (ESG), the Asset Management Company has established “Basic ESG Policy.”
Basic Policy
 The Asset Management Company aims to contribute to the aging society andmaximize unitholder value over the medium to long terms by promoting supply
of healthcare facilities as social infrastructure as well as by building a portfolio
specializing in healthcare facilities, in order to realize “a society where all people
can live vibrantly and with peace of mind” as HCM upholds in its principle.
 Based on the recognition that conducting asset management that is considerateof ESG, such as reducing environmental burden, making efforts to solve social
issues in aging society and establishing governance system, is essential for
HCMʼs principle and enhancing unitholder value, the Asset Management
Company will collaborate with various in-house/outside stakeholders including
operators, hospital personnel, sponsors, executives and employees.

Specific Policies
 Reduction of environmental burden (E) Introduction of facilities, etc. that contribute to improvement of energy
efficiency and energy saving
 Focus on resource saving and reduction of waste upon drawing andimplementing capital expenditure and repair plans Efforts to solve social issues in aging society (S) Efforts with operators and hospital personnel
̶ Establishment of a close trust relationship through dialogue
̶ Peace of mind and safety of healthcare facility users and consideration forenvironment̶ Public announcement of efforts by operators and hospital personnel toimprove work environment, etc. at healthcare facilities
 Efforts with sponsors
Stable asset management and growth of the portfolio over the medium tolong term, utilizing expertise held by sponsors
 Efforts with executives and employees
Enhancement of ESG awareness by executive and employees throughcontinuous trainings
 Efforts with outsourcees and other business partners
Request understanding of ESG efforts and cooperation
 Contribution to local communities
Contribution to an increase in the ratio of healthcare facilities to the elderly
population in a local community and to realization of the Regional Healthcare
Vision Establishment of governance system (G) Establishment of disciplined compliance system through continuous inhouse/outside trainings
 Establishment of internal systems(Securement of transparency of decision-making, avoidance of conflict ofinterests, reduction of various risks, etc.)
 Information disclosure to investors and other stakeholders
 Active disclosure of information on the above to investors, etc.

24Appendix

25

Portfolio Information

26

IV Appendix

Portfolio Highlights
Portfolio Highlights

Number of Properties

25 properties

Total Acquisition Price

40.5 billion yen

Total Appraisal Value(Note 1)

Average
Appraisal NOI Yield

44.0 billion yen

5.7 %(±0 properties from previous fiscal period)(±0 yen from previous fiscal period)(+0.1 billion yen from previous fiscal period)

Average Building Age

Average Remaining
Lease Term (Note 1)

Ratio of Fixed Rents

Operational Rate

13.7 years

100 %

100 %

(Note 1)14.8 years(+0.5 years from previous fiscal period(Note 2)(-0.5 years from previous fiscal period(±0.0% from previous fiscal period)

Portfolio Diversification (Note 3)
Other areas
1.0％

Hospital

5.1％ (1 property)Core cities
14.1％

Serviced housing
for the elderly
7.7％ (2 properties)

GREEN LIFEHIGASHI NIHON Co., Ltd.
5.6％

By
GeographicalArea

Kinki area
37.0％

Paid nursing home
87.2％ (22 properties)

GREEN LIFE

AS PARTNERS
7.0％

Chubu area
3.1％

By TypeJAPAN LIFE DESIGN

4.3％

Medical Corporation
AIKOKAI
7.0％
Tokyo metropolitan area
44.7％
Sawayaka Club
8.1％

Three Major Metropolitan areas
84.9％

Benesse Style Care
16.0％

28.0％

By Operator

Sompo Care
24.1％

(Note 1): “Average Building Age” and “Average Remaining Lease Term” are calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with July 31, 2018 as reference date, rounded down to the firstdecimal place. When there is more than one building, they are calculated by weighted averaging with areas. “Appraisal Value” is indicated based on the appraisal report with July 31, 2018 as the appraisal date.
(Note 2): Some of the agreements include a rent revision clause and the time arrived for GreenLife Moriguchi Home for The Aged in 8th Fiscal Period.
(Note 3): The figures in the graphs are calculated based on acquisition prices, rounded to the first decimal place.

27

IV Appendix

Stable Cash Flow in the Long Term
HCM carefully selects credible operators and concludes long-term and fixed-rent lease agreements with operators in principle.
Stable Cash Flow in the Long Term

Carefully Selected Operators

 HCM concludes long-term fixed-rent lease agreements with operators inprinciple. Therefore, rent HCM receives is not directly affected by occupancy
rates or performance of facilities operated by the operators, enabling HCM to
expect stable rent income.

Good judgement in selecting operators, who are lessees,is very important for receiving stable rent income<General cash flow at paid nursing homes with care service>

Residents
Monthly fees

Municipality,
etc.

Operators(Upfront entrance fees)

Nursing care fees

Fixed rent

Due DiligenceLong-termlease agreements

Business history/
activities

Financial status

Repair Expenses

20 years or
more
18.0%

Less than 10 years
48.2%

Averageremaining leaseterm
13.7 years(Note1)

Operational status
of facilities

Appropriate Maintenance and Management of Properties

Long-Term Fixed-Rent Lease Agreements

10 years or more but
less than 20 years
33.7%

Management
compliancestructure

Capital Expenditure(million yen)

Ratio offixed rents
100%(million yen)

1st FP

1st FP

2nd FP

2nd FP

3rd FP

3rd FP

4th FP

4th FP

5th FP

5th FP

6th FP

6th FP

7th FP

7th FP

28(Note 1): The figure is calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with the end of the 7th Fiscal Period (July 31, 2018) as reference date, rounded down to the first decimal place.

IV Appendix

Portfolio Map
Tokyo metropolitan area

Ratio of investment inthree major metropolitan areas

Strategic
investment inthree major
metropolitan
areas

84.9%

Core cities
14

44.7％

Bonsejour Chitose-funabashi

3

4Bonsejour Musashi-shinjo

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

14.1％
5

6

SOMPO CARE La vie
Re Machidaonoji

SOMPO CARE La vie Re
Azamino7

8

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

SAWAYAKA Mekarikan

24

Kinki area

AIKOEN ICHIBANKAN Building

10

15

11

12

37.0％

18
9

Niigata Rehabilitation Hospital

Other areas

1.0％

15

SAWAYAKA Tagawakan

2

Bonsejour Hino

16

SAWAYAKA Tachibanakan

1

17

AQUAMARINE Nishinomiyahama

Chubu area

SOMPO CARE
Sompo no ie S
Awajiekimae

3.1％

13

Medical Rehabilitation Home
Bonsejour Komaki

20

Kobe Gakuentoshi Building

SOMPO CARE
Sompo no ie S
Kobekamisawa

21

GreenLife Moriguchi Homefor The Aged

Medical Home
Bonsejour Itami

22

Hapine Kobe Uozaki Nibankan

GOOD TIME HOME
Fudo-mae

19

Granda Tsuruma-Yamato

Bonsejour Yotsugi

23

Smiling Home
Medice Adachi

29

IV Appendix

Operator List
Operator nameGREEN LIFE Inc.

GREEN LIFE HIGASHINIHON Co., Ltd.

Sompo Care Inc.

No. offacilities(Note 1)

25

36

448

Attribute

Remarks

Consolidated subsidiary of SHIPHEALTHCARE HOLDINGS, INC.,
which is listed on the TSE First
SectionOperates 67 facilities nationwide at GREEN LIFE Inc.
and GREEN LIFE HIGASHI NIHON Inc. as a nursing
care business that plays a central role in the Lifecare
Business of SHIP HEALTHCARE HOLDINGS, INC.

Consolidated subsidiary of Sompo
Holdings, Inc., which is listed on
the TSE First 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.

Facilities owned by HCM

AQUAMARINE Nishinomiyahama
Kobe Gakuentoshi Building
GreenLife Moriguchi Home for The Aged
Hapine Kobe Uozaki Nibankan
Smiling Home
Medice Adachi

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

Investment ratio

33.6%

24.1%

Benesse Style Care Co., Ltd.

311

Consolidated subsidiary ofBenesse Holdings, Inc., which islisted on the TSE First Section

Operates seven brands in Tokyo, Osaka, Nagoya, andelsewhere in Japan. The brands are mainly mid- tohigh-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

Sawayaka Club Co., Ltd.

71

Consolidated subsidiary of
UCHIYAMA HOLDINGS Co., Ltd.,
which is listed on the TSE First
SectionOperates low-price facilities with no upfront entrance
fees under the SAWAYAKA brand in Fukuoka
Prefecture and elsewhere in Japan.

SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

8.1%

AS PARTNERS Co., Ltd.

15

Unlisted company

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

ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan

7.0%JAPAN LIFEDESIGN Inc.

3

Unlisted company
Capital partnership by Nomura
Real Estate Holdings, Inc.

Operates paid nursing homes under the GOOD TIMEHOME brand in Tokyo. Operates in Kyushu andHokkaido besides the Tokyo Metropolitan Area
through SOUSEI JIGYOUDAN Co., Ltd., the parent
company, and other subsidiaries.

Medical Corporation
AIKOKAI

10

A medical corporation which
belongs to NSG Group with salesof over 60 billion yen (Note 2)

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

GOOD TIME HOME Fudo-mae

AIKOEN ICHIBANKAN Building
Niigata Rehabilitation Hospital(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 September 30, 2017).
(Note 2): Indicates the actual figures in fiscal 2016 based on NSG Groupʼs website.

15.9%

4.3%

7.0%

30

IV Appendix

Summary of Appraisal Report
Summary of Appraisal Report
Property nameAppraisal value(million yen)
(Note 1)
(A)

Appraisal company

Direct capitalization method

End of January 2018

DCF method

Indicated value Capitalization rate Indicated value(％)(million yen)(million yen)

Discount rate(％)

Terminal
capitalization rate(％)

Appraisal NOI(million yen)
(Note 2)

Appraisal value(million yen)(B)

Difference(millionyen)(A)- (B)Rich Appraisal Institute Co., Ltd.

2,140

2,150

5.3

2,130

5.0

5.5

118

2,120

+20

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

1,590

4.8

1,550

4.6

5.0

76

1,570

0

ASHEIM Bunkyohakusan

Japan Real Estate Institute

1,630

1,650

4.4

1,610

4.2

4.6

73

1,630

0

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate Institute

3,810

3,850

4.9

3,760

4.7

5.1

192

3,810

0

SOMPO CARE La vie Re Azamino

Japan Real Estate Institute

3,270

3,310

4.6

3,220

4.4

4.8

155

3,270

0

SAWAYAKA Tachibanakan

Japan Real Estate Institute

1,580

1,590

5.6

1,560

5.4

5.8

95

1,580

0

SAWAYAKA Mekarikan

Japan Real Estate Institute

1,450

1,460

5.7

1,440

5.5

5.9

87

1,450

0

SAWAYAKA Tagawakan

Japan Real Estate Institute

412

415

5.8

408

5.6

6.0

26

412

0

GOOD TIME HOME Fudo-mae

Japan Real Estate Institute

1,930

1,960

4.4

1,900

4.2

4.6

91

1,940

-10

The Tanizawa Sogo Appraisal Co., Ltd.

886

902

4.7

879

4.8

4.9

48

886

0

AQUAMARINE Nishinomiyahama

Bonsejour Yotsugi

The Tanizawa Sogo Appraisal Co., Ltd.

557

566

5.1

553

5.2

5.3

36

557

0

Kobe Gakuentoshi Building (Happine Kobegakuentoshi)

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

4,520

4,580

4.6

4,490

4.4

4.8

225

4,520

0

GreenLife Moriguchi Home for The AgedDAIWA REAL ESTATE APPRAISAL CO.,LTD.

4,410

4,470

4.6

4,380

4.4

4.8

221

4,410

0

Happine Kobe Uozaki Nibankan

DAIWA REAL ESTATE APPRAISAL 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

Smiling Home Medice Adachi

The Tanizawa Sogo Appraisal Co., Ltd.

2,440

2,470

4.7

2,430

4.8

4.9

119

2,390

+50

AIKOEN ICHIBANKAN Building (AIKOEN ICHIBANKAN)

The Tanizawa Sogo Appraisal Co., Ltd.

863

867

5.2

861

5.3

5.4

45

847

+16

SOMPO CARE Sompo no ie S Awajiekimae

Japan Real Estate Institute

2,170

2,190

5.2

2,140

5.0

5.4

116

2,170

0

SOMPO CARE Sompo no ie S Kobekamisawa

Japan Real Estate Institute

1,340

1,350

5.2

1,330

5.0

5.4

72

1,340

0

Niigata Rehabilitation Hospital

Japan Real Estate Institute

2,260

2,270

6.6

2,250

6.4

6.8

153

2,260

0

44,02844,522－

43,630

－

－

2,329

43,952+76

Medical Home Bonsejour Itami

Total(Note 1): “Appraisal Value” is based on the appraisal report with July 31, 2018 as the appraisal date.
(Note 2): ”Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with July 31, 2018 as the appraisal dates, and is rounded down to the nearest million yen. The above appraisal
NOI is NOI obtained by direct capitalization method.

31

IV Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 7th Fiscal Period)(Unit: thousand yen)

Real estate lease business revenue for
7th Fiscal Period
Property nameRent
revenue

Real estate lease business expenses for 7th Fiscal Period

Other
revenue

Propertytax

Outsourcing

Insurance
expenses

Repairexpenses

Depreciation
andamortization

NOI (Note 2)
Other

AQUAMARINE Nishinomiyahama

26,037

4,478

2,100

142

4,196

14,720400

56,290

Bonsejour Chitose-funabashi

5,539

1,790

224

71

－

3,048

404

21,360

Bonsejour Hino

5,039

1,240

213

54

－

3,130

400

19,443

Bonsejour Musashi-shinjo

4,062

998

167

48

－

2,447

400

16,155

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

8,359

1,830

213

98

－

5,817

400

21,084

Medical Rehabilitation Home Bonsejour Komaki

14,024

4,568

201

226

－

8,627

400

39,559ASHEIM Hikarigaoka

14,384

3,699

388

104

2,558

7,234

400

36,649ASHEIM Bunkyohakusan

10,229

2,494

388

77

－

6,868

400

36,471

SOMPO CARE La vie Re Machidaonoji

43,982

5,843

780

230

767

35,960400

96,840

SOMPO CARE La vie Re Azamino

31,082

4,750

780

168

256

24,726400

78,744SAWAYAKA Tachibanakan

26,090

2,666

1,140

196

－

21,687400

47,331

25,466

2,993

1,140

125

－

20,808400

43,624

8,304

1,128

1,140

59

－

5,576

400

12,965GOOD TIME HOME Fudo-mae

13,684

3,051

600

108

2,676

6,848

400

44,163

Bonsejour Yotsugi

4,926

970

223

46

－

3,286

400

20,736

Medical Home Bonsejour Itami

6,477

1,375

371

70

－

4,260

400

13,932

Kobe Gakuentoshi Building (Happine Kobegakuentoshi)

50,956

9,547

900

358

647

39,103400

113,646

GreenLife Moriguchi Home for The Aged

35,424

6,937

1,388

236

3,527

22,933400

107,509

Happine Kobe Uozaki Nibankan

9,600

1,405

1,200

56

95

6,443

400

24,342Granda Tsuruma-Yamato

6,842

1,938

618

94

－

3,791

400

27,208Smiling Home Medice Adachi

12,434

3,219

540

111

240

7,923

400

60,217

AIKOEN ICHIBANKAN Building (AIKOEN ICHIBANKAN)

8,928

2,567

780

70

480

4,630

400

22,363

SOMPO CARE Sompo no ie S Awajiekimae

26,954

4,944

510

175

－

20,924400

58,428

SOMPO CARE Sompo no ie S Kobekamisawa

16,606

2,917

510

111

60

12,608400

36,291SAWAYAKA Mekarikan
Not disclosed(Note 1)SAWAYAKA Tagawakan

Niigata Rehabilitation Hospital
Total

1,267,273

1,260,324

6,948

26,210

9,874

1,030

260

－

14,545500

78,214

441,644

87,224

17,5503,306

15,504

307,953

10,104

1,133,582(Note 1): ”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants.
The total is the sum of amounts received as rent for the fiscal period under review based on the lease agreements.
(Note 2): “NOI”=Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

32

IV Appendix

Details of Portfolio (As of the end of 7th Fiscal Period) (1)Paid nursing home with care service
AQUAMARINE
Nishinomiyahama

Bonsejour
Chitose-funabashi

Bonsejour Hino

BonsejourMusashi-shinjo

Medical Rehabilitation Home
Bonsejour
Hadanoshibusawa

Location

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

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

438-1, Ochikawa,
Hino-shi, Tokyo

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

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

Nearest Station

Hanshin Nishinomiya Station on
Hanshin Main Line

Chitose-funabashi Station on
Odakyu Odawara Line

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

Shibusawa Station on
Odakyu Odawara Line

Construction
Completion

May 2007

March 1988

May 1990

February 1985

July 1991

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

118 million yen

49 million yen

43 million yen

36 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.1%

6.0%

6.0%

6.3%

6.5%

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 (4.8％)824 million yen (2.0％)

724 million yen (1.8％)

582 million yen (1.4％)

728 million yen (1.8％)

Site area

2,587.93 m²

1,020.92 ㎡

2,211.28 m²

1,233.49 m²

2,588.04 m²

Leasable area

5,157.26 m²

2,342.17 m²

1,984.17 m²

1,710.43 m²

3,435.79 m²

Structure/
No. of floor (Note 2)

RC, 5F

RC, B1F/6F

RC, 3FRC, 4FRC, 5F

No. of Rooms/Resident Capacity

90 rooms, 100 people

42 rooms, 47 people

56 rooms, 58 people

46 rooms, 49 people

100 rooms, 101 people

Occupancy Rate (Note 3)

96.0%

87.2%

96.6%

81.6%

85.1%

Operator

GREEN LIFE

Benesse style Care

Benesse style Care

Benesse style Care

Benesse style Care

Remaining years oflease agreement (Note 4)

18.8 years

7.8 years

7.8 years

8.3 years

8.8 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2018. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2018, rounded down to the first decimal place.

33

IV Appendix

Details of Portfolio (As of the end of 7th Fiscal Period) (2)Housing type paid
nursing home

Paid nursing home with care service

Medical Rehabilitation Home
Bonsejour Komaki

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

Sompo CARE La vie Re
Machidaonoji

Sompo Care La vie Re
AzaminoLocation

3-1, Shiroyama,
Komaki-shi, Aichi

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

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

1612, Onojimachi,
Machida-shi, Tokyo

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

Nearest Station

Ajioka Station
on Meitetsu Komaki Line

Shakujii-koen Station on
Seibu Ikebukuro Line

Hakusan Station on
Toei Subway Mita Line

Construction
Completion

March 1991

March 2006

February 2007

October 2007

March 2004

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

92 million yen

76 million yen

73 million yen

192 million yen

155 million yen

Appraisal NOI yield (Note 1)

7.3%

5.6%

5.1%

5.4%

5.1%

Appraisal Value (Note 1)

1,450 million yen

1,570 million yen

1,630 million yen

3,810 million yen

3,270 million yen

Acquisition Price (ratio)

1,270 million yen (3.1％)

1,385 million yen (3.4％)

1,430 million yen (3.5％)

3,580 million yen (8.8％)

3,050 million yen (7.5％)

Site area

8,229.85 m²

2,868.46 m²

540.29 m²

7,404.13 m²

2,748.64 m²

Leasable area

8,858.49 m²

3,628.60 m²

2,494.78 m²

7,720.17 m²

5,789.25 m²

Structure/
No. of floor (Note 2)

SRC, 10FRC, 3FRC, 8F

RC, B1F/6F

RC, B1F/5F

No. of Rooms/Resident Capacity

124 rooms, 165 people

83 rooms, 89 people

50 rooms, 52 people

163 rooms, 169 people

145 rooms, 145 people

Occupancy Rate (Note 3)

68.5%

88.8%

86.5%

66.3%

57.9%

Operator

Benesse style Care

AS PARTNERS

AS PARTNERS

Sompo Care

Sompo Care

Remaining years oflease agreement (Note 4)

8.8 years

15.6 years

8.6 years

9.2 years

8.9 years

Keio Nagayama Station
on Keio Sagamihara
Line

Odakyu Nagayama
Station on Odakyu
Tama Line

Nakagawa Station on
Yokohama Municipal Subway Blue Line

(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2018. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2018, rounded down to the first decimal place.

34

IV Appendix

Details of Portfolio (As of the end of 7th Fiscal Period) (3)Paid nursing home with care service
SAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME
Fudo-mae

Bonsejour Yotsugi

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

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

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

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

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

Nearest Station

Sasahara Station on
JR Kagoshima Honsen Line

Mojiko Station on
JR Kagoshima Honsen Line

Magarikane Station on
Heisei Chikuho Railway Tagawa Line

Fudo-mae Station on
Tokyu Meguro Line

Yotsugi Station on
Keisei Railway Oshiage Line

Construction
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)

95 million yen

87 million yen

26 million yen

91 million yen

48 million yen

Appraisal NOI yield (Note 1)

6.3%

6.3%

6.7%

5.3%

5.8%

Appraisal Value (Note 1)

1,580 million yen

1,450 million yen

412 million yen

1,930 million yen

886 million yen

Acquisition Price (ratio)

1,520 million yen (3.8％)

1,380 million yen (3.4％)

390 million yen (1.0％)

1,740 million yen (4.3％)

824 million yen (2.0％)

Site area

3,359.66 m²

3,758.26 m²

4,300.90 m²

1,206.60 m²

1,136.46㎡

Leasable area

5,652.94 m²

4,720.46 m²

2,366.20 m²

3,400.20 m²

1,962.89㎡

Structure/
No. of floor (Note 2)

RC, B1F/6F

RC, 4FRC, 3F

RC（S in part）, B1F/5F

RC, 5F

No. of Rooms/Resident Capacity

104 rooms, 104 people

95 rooms, 95 people

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

Occupancy Rate (Note 3)

99.0%

97.9%

93.3%

94.0%

87.7%

Operator

Sawayaka Club

Sawayaka Club

Sawayaka ClubJAPAN LIFE DESIGN

Benesse Style Care

Remaining years oflease agreement (Note 4)

9.5 years

9.5 years

9.5 years

8.3 years

7.4 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2018. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of July 31, 2018, rounded down to the first decimal place.

35

IV Appendix

Details of Portfolio (As of the end of 7th Fiscal Period) (4)Housing type paid
nursing home
Medical home Bonsejour
Itami

Serviced housing for the elderly

Paid nursing home with care service

SOMPO CARE Sompo no ie S SOMPO CARE Sompo no ie S Kobe Gakuentoshi Building
Awajiekimae
Kobekamisawa(Happine Kobegakuentoshi)

GreenLife Moriguchi Homefor The Aged

Location

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

3-20-26, Awaji, Higashiyodogawa-ku,
Osaka-shi, Osaka

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

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

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

Nearest Station

Hankyu Itami Station on
Hankyu Railway Itami Line

Awaji Station on
Hankyu Railway Kyoto and Senri Lines

Kamisawa Station on
Kobe Municipal Subway Seishin-Yamate
Line

Gakuentoshi Station on
Kobe Municipal Subway Seishin-Yamate
Line

Dainichi Station on Osaka Municipal
Subway Tanimachi Line and Osaka
Monorail

Construction
Completion

March 1989

June 2009

June 2009

January 2009

September 2006

Acquisition Period

Fiscal period ended July 2016

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

36 million yen

116 million yen

72 million yen

225 million yen

221 million yen

Appraisal NOI yield (Note 1)

7.2%

6.0%

6.0%

5.2%

5.3%

Appraisal Value (Note 1)

557 million yen

2,170 million yen

1,340 million yen

4,520 million yen

4,410 million yen

Acquisition Price (ratio)

514 million yen (1.3％)

1,930 million yen (4.8％)

1,200 million yen (3.0％)

4,320 million yen (10.7％)

4,150 million yen (10.2％)

Site area

1,976.11 m²

1,251.26 m²

743.22 m²

2,742.81 m²

5,872.83 m²

Leasable area

2,129.87 m²

5,658.53 m²

3,626.25 m²

12,636.48 m²

8,356.85 m²

Structure/
No. of floor (Note 2)

SRC, 11F

RC, 12F

S, 9F

RC, B1F/9F

SRC, 9F

No. of Rooms/Resident Capacity

62 rooms, 64 people

137 rooms/137 people (Note 3)

85 rooms, 85 people

128 rooms, 138 people

155 rooms, 189 people

Occupancy Rate (Note 4)

95.3%

86.9%

97.6%

92.0%

89.9%

Operator

Benesse Style Care

Sompo Care

Sompo Care

GREEN LIFE

GREEN LIFE

Remaining years oflease agreement (Note 5)

8.8 years

16.0 years

16.0 years

22.6 years

11.2 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2018. 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 number of rooms as serviced housing for the elderly is 136 rooms.
(Note 4): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 5): Remaining years of lease agreement is as of July 31, 2018, rounded down to the first decimal place.

36

IV Appendix

Details of Portfolio (As of the end of 7th Fiscal Period) (5)Paid nursing home with care service

Hospital real estate

Happine Kobe Uozaki
Nibankan

Granda Tsuruma-Yamato

Smiling Home
Medice Adachi

AIKOEN ICHIBANKAN
Building(AIKOEN ICHIBANKAN)

Niigata Rehabilitation
Hospital

Location

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

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

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

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

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

Nearest Station

Uozaki Station on
Hanshin Electric Railway

Tsuruma Station on
Odakyu Enoshima Line

Rokucho Station on
Tsukuba Express

Niigata Station on
JR Shinetsu Main Line

Hayadori Station on JR Hakushin Line

Construction
Completion

March 2010

March 1998

November 2005

February 2010

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

Acquisition Period

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended January 2018

Appraisal NOI (Note 1)

48 million yen

53 million yen

119 million yen

45 million yen

153 million yen

Appraisal NOI yield (Note 1)

5.2%

5.4%

5.3%

5.9%

7.4%

Appraisal Value (Note 1)

995 million yen

1,060 million yen

2,440 million yen

863 million yen

2,260 million yen

Acquisition Price (ratio)

930 million yen (2.3％)

1,000 million yen (2.5％)

2,253 million yen (5.6％)

770 million yen (1.9％)

2,060 million yen (5.1％)

Site area

933.33㎡

2,877.11㎡

2,069.41㎡

2,597.52 m²

15,056.85 m²

Leasable area

1,772.89 m²

3,427.08 m²

3,870.98 m²

4,311.20 m²

13,476.55 m²

Structure/
No. of floor (Note 2)

S, B1F/4F

RC (S in part), 5F

RC, 4F

S, 5F

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

No. of Rooms/Resident Capacity

47 rooms, 47 people

73 rooms, 90 people

82 rooms, 82 people

90 rooms, 90 people

168 beds (Note 3)

Occupancy Rate (Note 4)

97.9%

75.6%

79.3%

98.9%

－

Operator

GREEN LIFE

Benesse Style Care

GREEN LIFE HIGASHINIHON Co., Ltd.

Medical Corporation AIKOKAI

Medical Corporation AIKOKAI

Remaining years oflease agreement (Note 5)

22.6 years

3.6 years

18.5 years

18.0 years

28.6 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2018. 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): As to No. of Rooms/Resident Capacity for Niigata Rehabilitation Hospital, the number of beds is indicated.
(Note 4): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 5): Remaining years of lease agreement is as of July 31, 2018, rounded down to the first decimal place.

37

IV Appendix

Overview of Operators (After Acquisition of Assets to be Acquired)
Overview of Operators (After Acquisition of Assets to be Acquired)

GREEN LIFE Co., Ltd

Sawayaka Club Co., Ltd.

GREEN LIFE HIGASHI NIHON Co., Ltd.

Sompo Care Inc.

Headquarters
location

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

Headquarters
location

1-4-16 Yaesu, Chuo-ku,
Tokyo

Headquarters
location

2-10-10, Kumamoto,
Kokurakita-ku, Kitakyushu-shi,
FukuokaHeadquarters
location

4-12-8, Higashishinagawa,Shinagawa-ku, Tokyo

Representative

Representative Director andPresident Keiji Arai

Representative

Representative Director andPresident Keiji Arai

Representative

Representative Director andPresident Bunji Uchiyama

Representative

President and Chief Executive
Officer Ken Endo

FoundedCapital stock

Parentcompany

FoundedMay 1994

Capital stock

50 million yen
SHIP HEALTHCAREHOLDINGS, INC.
(TSE 1st Section, Code No.
3360)

Benesse Style Care Co., Ltd.

Parentcompany

90 million yen

Headquarters
location

2-3-1, Nishi-Shinjuku,
Shinjuku-ku, Tokyo

Headquarters
location

1-7-1,
Tokyo

Representative

Representative Director andPresident Shinya Takiyama

Representative

Representative Director andPresident Shoetsu Ito

September 1995

FoundedCapital stock

100 million yen

Capital stock

Parentcompany

Benesse Holdings, Inc.
(TSE 1st Section, Code No.
9783)

Parentcompany

December 2004

FoundedCapital stock

200.8 million yen

Capital stock

SHIP HEALTHCAREHOLDINGS, INC.
(TSE 1st Section, Code No.
3360)

JAPAN LIFE DESIGN Inc.

FoundedFoundedJuly 2003

Akasaka, Minato-ku,

April 2004

340 million yen
SOUSEI JIGYODAN Co., Ltd.
(51%)
Nomura Real Estate Holdings,
Inc. (49%)

Parentcompany

AS PARTNERS Co., Ltd.

UCHIYAMA HOLDINGS Co.,Ltd.
(TSE 1st Section, Code No.
6059)

1-5-2, Yurakucho,
Chiyoda-ku, Tokyo

Headquarters
location

Representative

Representative Director andPresident Takeshi Uemura

Representative CEO Hiromu Ikeda

761 Kizaki, Kita-ku, Niigatashi, Niigata

Proud Life Inc.
Headquarters
location

2-8-4 Kitasaiwai, Nishi-ku,
Yokohama-shi, Kanagawa

Representative

Representative Director andPresident Hiroshi Sonoda

FoundedNovember 2004

FoundedNovember 1993

FoundedCapital stock

40 million yen

Total Assets

1,547 million yen

Capital stockGroup

NSG Group

3,925.16 million yen

Sompo Holdings, Inc.
(TSE 1st Section, Code No.
8630)

Parentcompany

Medical Corporation AIKOKAI

Headquarters
location

November 1992

Parentcompany

July 2006

3 million yen

Sony Lifecare Inc.

38

Financial Information

39

IV Appendix

Balance Sheet and Statement of Income for the 7th Fiscal Period
Balance Sheet

Statement of Income(Unit: thousand yen)
6th Fiscal Period(Ended Jan. 2018) (A)(Unit: thousand yen)

Changefrom previous
period (B)-(A)7th Fiscal Period(Ended July 2018) (B)

6th Fiscal Period
7th Fiscal Period(Ended Jan. 2018) (Ended July 2018)(A)(B)

AssetsCurrent assets

893,241

1,138,393+245,152

Cash and deposits

660,349

1,018,147+357,798

Cash and deposits in trust

77,28844,708-32,579

Prepaid expenses

54,53375,524+20,990

Consumption taxes refund receivable

101,055－-101,055

Deferred tax assets

14

12

-2

Non-current assets

41,511,676

41,285,392-226,284

Property, plant and equipment

41,408,406

41,149,494-258,911

Buildings in trust

21,263,549

20,987,933-275,615

Structures in trust

70,48969,414-1,075

Machine and device in trust

10,341

10,139-202

Tools, furniture and fixtures in trust

11,36329,344+17,981

20,052,662

20,052,662

0Land in trust
Intangible assets

5,683

4,574

-1,108Investments and other assets

97,586

131,323+33,736

Deferred assets

20,85014,947-5,90342,425,768

42,438,732+12,964

8,393,522

1,397,253-6,996,269

22,854

18,557-4,2968,000,000

1,000,000-7,000,000

Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Note 2)

Operating revenue
Lease business revenue

Comparison with previous fiscal
periodChangeChange (%)(B)-(A)(Note 1)

1,219,220

1,267,273+48,053+4.0

1,213,394

1,260,324+46,930

+3.9

5,825

6,948

+1,122+19.3

595,051

642,135+47,084+7.9

Expenses related to rent business

392,047441,644+49,597+12.7

Asset management fee

Other lease business revenue
Operating expenses

120,719

119,445-1,274-1.1

Asset custody fee

2,115

2,118

+3

+0.2

Administrative service fees

16,441

15,406-1,034-6.3

Directorsʼ compensations

3,000

3,000

－

－

Property tax

16,434

15,942-492-3.0

Other operating expenses

44,29344,578+285+0.6

624,168

625,137

+968

+0.2

Non-operating income

171

3,484

+3,313+1936.2

Interest income

10

7

-3

+1.8

Operating income

－

3,397

+3,397

－

160

79

-80

-101.0Non-operating expenses

111,094

106,619-4,474-4.0

Insurance income
Interest on refund of consumption taxes and otherAccounts payable - other

22,262

21,163-1,099Accrued expenses

144,013

141,850-2,162

899

857

-41

－

9,798

＋9,798Interest expenses

60,34861,449+1,101+1.8

203,420

204,953+1,533

Investment unit issuance expenses

10,5095,903-4,605-43.8

Borrowing related expenses

39,96639,266

-700

-1.8

270

－

-270

－

Ordinary income

513,245

522,001+8,755+1.7

Income before income taxes

513,245

522,001+8,755

+1.7

900

860

-40

-4.7

Income taxes - current

900

858

-42

-4.7

Income taxes - deferred

0

2

+2

+5.9

512,344

521,141+8,796+1.7

Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Non-current liabilities

72

72

0

13,719,154

20,719,247+7,000,093

Long-term loans payable

12,700,000

19,700,000+7,000,000

Tenant leasehold and security deposits

1,009,999

1,009,999

0

9,104

9,104

0

Deferred tax liabilities

－

143

＋143

Other

50

－

-50

22,112,676

22,116,500+3,823Unitholdersʼ equity

20,313,091

20,321,920+8,828Unitholdersʼ capital

19,800,696

19,800,696

0512,395

521,223+8,828Tenant leasehold and security deposits in trust

Total liabilities
Net assets

Surplus
Total net assets

20,313,091

20,322,232+9,140Total liabilities and net assets

42,425,768

42,438,732+12,964(Note 1): Figures are rounded to the first decimal place.
(Note 2): Figures include current portion of long-term loans payable.

Other

Total income taxes

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

50

82

+31

+38.9

512,395

521,223+8,828+1.7

40

Healthcare-Related Facilities
Information

41

IV Appendix

Environment Surrounding Healthcare Facilities
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
Ratio of 65 years old or older█ 64 years old or younger(10 thousand people)

15,000█ 65-74 years old

Actual█ 75 years old or older

14.6%

10.3%
10,854

10,718

776
471
1985

1,109
717
1995

0

40%

65〜74歳

20.2%

10,0005,000

Estimate

64歳以下

10,161
1,407
1,160
2005

32.8%

30.0%

26.6%

█ Other households█ Couple with no other members

9,322

8,577

7,740

6,723

20,00010,000

30.7%

28.5%

5,818

5,033

5,403

4,648

1,754
1,632

1,497
2,180

1,522
2,260

2,277

2015

2025

2035

2045

0

1,643
0%

34.0%

35.7%

37.4%

39.0%

40.0%

50%

32.6%

6,879

6,756

6,606

6,510

6,590

30%

6,650
6,277

6,740

6,763

6,693

6,666

6,870

20%

7,512

7,959

8,418

8,963

2025

2030

2035

2040

3,865

4,980

6,253

2005

2010

2015

2020

Guidelines Concerning
REITs Targeting Hospital
Real Estate

March
2016

Housing Life Basic Plan
(nationwide plan)

Resident capacity

230

10%

400,000
200,000
0

定員数

0.5%

0.5%

1.0%

供給率

0.6%

0.6%

0.7%

123,155 147,981 176,935 183,245 195,972 216,174
2006

2007

2008

2009

2010

1.1%

1.3%

1.2%

0.7%

1.5%
1.0%

482,792
391,144 424,828
315,234 350,990

2011

2012

2013

2014

2015

2016

0.0%

200,000

0⼾数Supply rate for 65 years old or older

65歳以上⼈⼝に対する供給率
0.61% 0.62% 0.64%
0.54% 0.57% 0.59%
0.46% 0.50%
0.42%
0.36%

0.29%
0.18%
0.01%
225,374
3,448 56,137 89,122 114,315 135,352 151,667 166,279 181,083 191,871 202,505 210,859 218,195
Dec.
2011

June
2012

Dec.
2012

June
2013

Dec.
2013

June
2014

Dec.
2014

2014

thousand people

2.1％

2025

４％

 Hospitals that were constructed in 1960ʼs and 1970ʼs and do not meet theearthquake resistance standards still exist.
Ratio of quake-resistant paid nursing homes is 95% or more while that of quakeresistant hospitals remain at 72.9%.
(Ministry of Health, Labour and Welfareʼs 2017 “Survey on Seismic Retrofit of
Hospitals”)<“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)(Units)█ No. of units

2005

1,460

0.5%

Supply status of serviced housing for the elderly
400,000

thousand people

Resident capacity

Current Status of Reconstruction of Hospitals, etc.

(Resident capacity)

1.4%

thousand people

0.9％

Supply status of paid nursing homes
Supply rate

690

Outcome indicator

0%

Although supply of facilities and housing for the elderly has been on the rise every year,
supply rate of paid nursing homes against the elderly population was a mere 1.4% in 2016,
and promotion of further supply is needed.

█ Resident capacity

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

Resident capacity

40%

Promotion of Further Supply of Healthcare Facilities

600,000

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

Ratio of housing for the elderly as a percentage of theelderly population

Estimate

7,025

June
2015

20%

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

Actual30,000

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

36.8%

Ratio of elderly single households in elderly households(Thousand households)

June
2014

June
2015

Dec.
2015

June
2016

Dec.
2016

June
2017

Dec.
2017

1.0%

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

0.5%

0.0%

42

IV Appendix

Revision to Nursing Care Fee and Medical Fee
Fiscal 2018 is an important fiscal year when medical fees and nursing care fees will be revised at the same time, which happens
once every 6 years, and fiscal year in which a roadmap for the division of roles between medical care and nursing care as well
as development of a seamless collaborative system towards fiscal 2025, when all baby boomers become 75 years or older, will
be presented.
Overview of Nursing Care Fee Revision in Fiscal 2018

Overview of Medical Fee Revision in Fiscal 2018

 Revision rate: +0.54%

 Revision rate: +0.55% (core) Promote regional comprehensive care system

 Establish a regional comprehensive care system and strengthen cooperation
between medical services and nursing care services

 Realize high-quality nursing care services that contribute to supporting
unassisted living and preventing of increase in severity

 Promote differentiation/cooperation of medical functions from acute stage torecovery stage, chronic stage and in-home medical care

 Secure various human resources and improve productivity
 Secure stability and sustainability of the system through making nursing careservices more appropriate and focused Promote provision of efficient medical/nursing care services, including
utilization of ICT, that leads to reduction of on-site workload

Changes Made in Recent Revisions (%)

Changes Made by Recent Revisions(%)
Revision period

Main points upon revision

Revision
rate

Medical fees (core) Securement of personnel by nursing care business operators and improvement of

Fiscal 2009

working conditions

 Cooperation with medical services and enhanced care for people with dementia

3.0％

Drug prices, etc.

Medical fee

Dental fee

Dispensing
feeDrug prices,
etc.

Material cost

 Provision of efficient services and securement of new services

 Improvement of in-home services and more focused efforts on facilities

Fiscal 2012

Fiscal 2014
(extraordinary) Improvement and increased focus of efforts on services to support independent living
 Cooperation between medical services and nursing care services, and division of

1.2％

 Response to consumption tax hike (8%)

0.63％functions Securement of nursing personnel and evaluation of service quality

 Further strengthening of response to people requiring moderate to severe level of

Fiscal 2015

Fiscal 2017
(extraordinary)Fiscal 2018

nursing care and the elderly with dementia.
 Promotion of measures to secure nursing personnel
 Improvement in evaluation of services and establishment of efficient service provisionsystem

2010

+1.55

+1.74

+2.09

+0.52

-1.23

-0.13

2012

+1.38

+1.55

+1.70

+0.46

-1.26

-0.12

2014

+0.73

+0.82

+0.99

+0.22

-0.58

-0.05

2016

+0.49

+0.56

+0.61

+0.17

-1.22

-0.11

2018

+0.55

+0.63

+0.69

+0.19

-1.65

-0.09

-2.27％

 Improvement of working conditions for nursing personnel

1.14％

Please refer to the above.

0.54％

43

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 the area they are used to, even after they come to require nursing care, in around2025 when the baby boom generation will become 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 withdementia 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 75 years-old or older increasing rapidly and rural areas with the population of 75 years-old or older increasing slightly but the overall population decreasing.
It is necessary for municipalities and prefectural governments, which are the insurer, to create the regional comprehensive care system based on autonomy
and independence and in accordance with regional characteristics.

Image of regional comprehensive care system
When you get sickWhen you need nursing care
Nursing care

Medical care

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

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

House
Serviced housing for the elderly, etc.

 Facility and home service• Facilities covered by public aid
providing long-term care to theelderly• Long-term care health facility• 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 foreverLife support & nursing care prevention* Regional comprehensive care systems are expected tobe established 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, Labour and Welfare

44

IV Appendix

Regional Healthcare Vision (1)About Regional Healthcare Vision“Regional Healthcare Vision” is to estimate and stipulate medical demand (number of patients) and required number of beds in2025 for each medical function in each area of the vision (secondary medical area) in order to promote functional differentiationand coordination of hospital wards.
Following this, prefectural governments and medical staff will respond to realize the formulated initiative.

(Hospital Ward A)
Advanced acutestage function

Necessary response to realize the Regional Healthcare Vision

1. Enhance healthcare of recovery stages (converting hospital wards fromacute stage function) Necessary to make voluntary efforts such as converting hospital wards focusing on the acute stage to

Medical institutions

hospital wards focusing on the recovery stage (medical care for rehabilitation and return to home)

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

 Assist the development of necessary facilities and equipment with “Community Healthcare and(Hospital Ward B)
Acute stage function
Select medical
function
voluntarily

Nursing Care Comprehensive Fund,” and lead the conversion of hospital wards

 Necessary to set an appropriate medical fee that wonʼt prevent the conversion, considering thefact that the number of nurses, etc. required for each function differs

2. Review the outlook of demand and supply of medical staff, and discuss thenumber of staff to be trained(Hospital Ward C)
Recovery stage function(Hospital Ward D)
Chronic stage function

3. Concerning securement of medical and nursing care services responding to
medical needs at the chronic stage
 It is necessary to secure the necessary number of hospital beds for the chronic stage as well as

medical and nursing care services including in-home medical care, nursing care facilities andhousing for the elderly to enable everyone to receive appropriate medical and nursing care at
appropriate places according to their condition in order to respond to the needs for medical andnursing care at the chronic stage over the next 10 years. Medical and nursing care services will besteadily secured while promoting functional differentiation and coordination of hospital wards atthe same timedevelop in-home medical care, nursing care facilities, etc. by effectively utilizing“Community Healthcare and Nursing Care Comprehensive Fund”

Prefectural
government

 Steadily

Report current status
and future directionof medical functions

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

To be discussed and coordinated at “Regional Healthcare Vision Coordination
Council” to realize the Vision

45(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.

IV Appendix

Regional Healthcare Vision (2)Aiming to Change Medical Provision System
Current Functions of Hospital Beds (as of July 2015)

Number of Beds to be Required in 2025

Total 1.331 million beds

Total 1.191 million beds (Note 1)
Advanced acute stage
131,000 beds (11％)

Advanced acute stage
169,000 beds (14％)

Decrease by approx. 30%

Acute stage
401,000 beds (34％)

Acute stage
593,000 beds (48％)

Increase by approx. 3 times

Recovery stage
375,000 beds (31％)

Decrease by approx. 20%

Chronic stage
284,000 beds (24％)

Recovery stage
129,000 beds (10％)

Chronic stage
354,000 beds (28％)

Unused, etc.
87,000 beds

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

Nursing care facilities,
in-home medical care, etc.
Approx. 300,000 people(Note 1): Total of Cabinet Secretariatʼs estimates (June 2015). Within the range of 1.148 million beds to 1.191 million beds.
(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 Welfare46

IV Appendix

U.S. Healthcare REIT Market
The healthcare REIT sector now accounts for roughly 10% ($98.7 billion) by total market value in the U.S. REIT market.
Change in Total Market Value of U.S. REIT Market

Main Investment Targets

 Total market value of the entire U.S. REIT market is $1,062.8 billion as ofDecember 31, 2017.
($ billion )Investment target
Senior housing

Rental housing for the independent elderly (Independent
Living) and rental housing with nursing care for the elderly(Assisted Living)

Skilled nursing facilities

Facilities with skilled nursing.
Full-time nurses provide medical care (including rehabilitation).

Medical office buildings

Large-scale medical malls.
Doctorʼs offices and clinics are housed.

12,0001,2001062.810,000
1,000

957.4
882.2
833.5

Hospitals

8,000
800

606.4

6,000
600

541.4

407.4

4,000
400

358.8
247.7

2,000
200

95.7

42.3

98.3

98.7

The top three account for approximately 60% of the market share(as of December 31, 2017, based on total market value)

70.0

54.6

Name

00
2010

Industrial/Office
Diversified

2011

2012

2013

2014

2015

RetailLodging/Resorts

Others (Note 1)(Note 1): “Others” includes self storage, timber, infrastructure, data centers and specialty sectors.
(Source): NAREIT REIT Watch

Life science facilities

Business parks, etc. with life science-related companies,
organizations, etc., such as biotechnology companies,
pharmaceutical companies, medical device development
companies and research institutions.

Overview of U.S. Healthcare REITs

68.4

25.2

2009

̶

90.7

173.3 34.0

2008

Overview

2016

2017

Residential
Health Care

Total market value($ million)

Ratio

Welltower

23,35023.7%

Ventas21,296

21.6%

HCP

12,22012.4%

Subtotal

56,866

57.6%

Total (of all 19 REITs)

98,652

100％

47

Profile of HCM and the AssetManagement Company

48

IV Appendix

HCMʼs Investment Philosophy

Serve as a conduit between the nursing care and medical
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

We seek to realize a society where all people
can live vibrantly and with peace of mind
49

IV Appendix

HCMʼs Three Features

1

Investment in healthcare facilities,
the demand of which is expected to grow• Increase in demand due to further advancement of aging society• Upgrades and expansion of healthcare facilities backed by government policy
2Strong support from sponsors• Utilization of advanced expertise in “nursing care and medical service,” “fundmanagement” and “finance” held by SHIP HEALTHCARE, NEC Capital and SMBC
• Securement of property acquisition opportunities by utilizing extensive networks
3

Stable cash flow in the long term

• Conclusion of long-term fixed-rent lease agreements with credible operators• Proper portfolio management based on strong relationship with operators
50

IV Appendix

HCMʼs Network
HCMʼs network is as shown below.
Asset Custody Company
Administrative Agent
Administrator of theUnitholdersʼ 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

Asset Management Company
Sumitomo Mitsui Finance andLeasing
Yoei

Sponsor Support
Agreement

Pipeline Support
Agreement

GinsenKobe Tochi Tatemono
Muromachi Building

Healthcare
Asset Management Co., Ltd.

51

IV Appendix

Information Related to Investment Units (As of the end of 7th fiscal period)
Ratio of Number of Investment Units by Unitholder TypeEnd of 6th FP (ended Jan. 2018)

End of 7th FP (ended July 2018)

Foreign individuals
4.6%
Individuals, etc.
Other companies
40.1%
7.6%
Securities
companies
1.1%

Foreign individuals
5.3%
Individuals, etc.
Other companies
36.3%
7.2%
Securities
companies
1.1%

Total

Total

193,107
units

193,107
units

Financial institutions
46.6%

List of Top Unitholders
Ranking

Financial institutions
0.4%
Foreign individuals
0.5%
Securities
companies
0.1%

Other companies
1.6%

End of 7th FP (ended July 2018)
Financial institutions
0.4%
Foreign individuals
0.6%
Securities
companies
0.2%

Other companies
1.5%

34,240

17.7%

2

Japan Trustee Services Bank Ltd.
(Trust Account)

27,596

14.3%

3

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

9,983

5.2%

4

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

6,932

3.6%

NEC Capital Solutions Limited

4,000

2.1%

SHIP HEALTHCARE HOLDINGS INC.

4,000

2.1%

Sumitomo Mitsui Banking Corporation

4,000

2.1%

8

STATE STREET BANK AND TRUSTCOMPANY 505012

1,975

1.0%

9

Osaka Shinkin Bank

1,895

1.0%

10

BARCLAYS CAPITAL SECURITIES LIMITED

1,414

0.7%

96,035

49.7%

Total

Total

Total

13,226
people12,534peopleIndividuals, etc.
97.4%

Individuals, etc.
97.3%

Ownership ratio(%)

The Master Trust Bank of Japan, Ltd.
(Trust Account)5

End of 6th FP (ended Jan. 2018)

Name

1

Financial institutions
50.1%

Ratio of Number of Unitholders by Unitholder Type

Number ofinvestment units
owned(units)52(Note 1): Ratios in the graphs are rounded to the first decimal place.

IV Appendix

Changes in Unit Price
The unit price has turned upward after the announcement of acquisition of Niigata Rehabilitation Hospital on November 1, 2017,and currently remains at a level above the issue price upon IPO.
After IPO
(yen)

After Beginning of 2017
(unit)(a)180,000(yen)

10,000120,000

8,000

114,000

6,000

108,000(a)0Mar. 18,
2015

Oct. 9,2015

May 1,
2016

Nov. 22,2016

June 15,2017

Trade Volume (right axis)
(a)

(c)

2,000

96,000090,000(d)(e)(unit)(f)

10,0008,000

Issue price upon
IPO
110,000 yen

6,000

Issue price uponprevious PO
101,244 yen

4,000

Issue price upon IPO
110,000 yen

120,000(b)

102,000(c)

As ofJuly 31, 2018
111,600 yen

150,000

4,000

(b)

Jan. 6,
2018

July 31,2018

March 14, 2017 Announcement of financial results for the fiscal period ended January 2017

Apr. 9,2017

July 14,2017

Trade Volume (right axis)(d)(e)

July 24, 2017 Announcement of new obtainment of credit rating (A (Stable))(Note 1): As of July 31, 2018. TSE REIT index is indexed with the closing price of HCMʼs investment unit on January 4, 2018 as the base.
(Source): Materials publicized by the company; Bloomberg

0Jan. 4,2017

Unit Price

January 12, 2017 Announcement of the first public offering

2,000

(f)

Oct. 17,2017
Unit PriceJan. 21,2018

Apr. 26,
2018

July 31,2018

TSE REIT Index (left axis)

September 14, 2017 Announcement of financial results for the fiscal period ended July 2017
November 1, 2017 Announcement of acquisition of Niigata Rehabilitation Hospital
March 14, 2018 Announcement of financial results for the fiscal period ended January 2018

53

IV Appendix

Overview of Unitholder Special Benefit Plan

Company Name

Details of Special Benefits

Sompo Care Inc.

JAPAN LIFE DESIGN Inc.

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

Benesse Senior Support Co., Ltd.

Sawayaka Club Co., Ltd.

AS PARTNERS Co., Ltd.

(ベネッセの介護相談室)Discount advance payment or monthly feeDiscount monthly fee (rent, management fees, etc.)Free trial move-in (two-days and one-night with meals)Discount upfront entrance feesFree trial move-in (two-days and one-night with meals)Tour with free lunchFree consultation on nursing careDiscount monthly fee for initial monthFree trial move-in (two-days and one-night with meals)Tour with free lunchDiscount upfront entrance feesDiscount monthly feeFree trial move-in (four-days and three-nights)

Tour with free lunch

54(Note 1): Details of special benefits are for people who are unitholders as of the end of 7th fiscal period and are subject to change.

IV Appendix

IR Activities
HCM held information sessions mainly for individual investors and also for overseas investors and operators of medical/nursing
care facilities, not only in major cities but in regional cities as well. HCM is also upgrading its website to make it easier for
unitholders to use.
IR activities

WebsiteDate

DetailsVenue

May 28,2018

Nihon Securities Journal seminar
Company information session & lecture on stocks for individual investors

NagoyaJune 13 to 15,
2018

Asia IR(Visited investors in Hong Kong and Singapore)

http://www.hcm3455.co.jp/en/
FAQ

Hong Kong
Singapore

June 24,
2018

J-REIT seminar 2018 in Osaka(Organized by SMBC Nikko Securities Inc.)

Osaka

July 12,2018

IR seminar for individual investors(Organized by The Securities Analysts Association of Japan)

Osaka

July 18,2018

IR seminar for individual investors(Organized by The Securities Analysts Association of Japan)

Tokyo

July 31,
2018

J-REIT Nationwide Promotion Caravan
Company information session & lecture on stocks for individual investors(Organized by The Association for Real Estate Securitization)

Osaka

Latest information/
Press release

Lectures, etc.
Date

DetailsVenue

May 18,2018

Special seminar for operators of medical/nursing care facilities(Co-organized by the Financial Services Agency, Ministry of Land,
Infrastructure, Transport and Tourism, Tokyo Stock Exchange, Inc. and
The Association for Real Estate Securitization)

Kagoshima

June 22,2018

Special seminar for operators in Sendai(Co-organized by The Association for Real Estate Securitization andAsset Brains Sendai Network)

Sendai

The 68th Congress of Japan Hospital Association Luncheon Seminar“Finance of medical institutions and utilization of healthcare REITs”

Kanazawa

June 29,2018

Distribution information(Note 1): Details of special benefits are for people who are unitholders as of the end of 7th fiscal period and are subject to change.

Latest fund information

Latest financial documents

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IV Appendix

Profile of Asset Management Company
Organizational Structure

Profile of the Company
Trade name

Healthcare Asset Management Co., Ltd.

Location

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

FoundedNovember 28, 2013

Capital stock

150 million yen

President andRepresentative

Seiji Yoshioka

Shareholders

General Meeting of
Shareholders
Audit & Supervisory
Board Member

Board of Directors

SHIP HEALTHCARE HOLDINGS, INC.

33.3%

NEC Capital Solutions Limited

33.3%

Sumitomo Mitsui Banking Corporation

5.0%

Sumitomo Mitsui Finance and Leasing Company, Limited

4.8%

SMBC Nikko Securities Inc.

4.8%

Yoei

4.6%

Ginsen

4.6%

Kobe Tochi Tatemono

4.6%

Muromachi Building

4.6%

Management Committee

Compliance Committee

Representative Director

Internal Audit Office

Investment
Department

Compliance Office

Asset Management
Department

Financial & Administration
Department

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

License as a building lots and buildings business operator(Governor of Tokyo (1) No. 96339)
License as an entrusted agency services for transactions(Minister of Land, Infrastructure, Transport and Tourism No. 85)

56

IV Appendix

Profile of Major Sponsors
SHIP HEALTHCARE HOLDINGS, INC.
Headquarters
location

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

Representative

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

FoundedAugust 1992

Capital stock

15,553.01 million yen

Sales425.5 billion yen on a consolidated basis

With a stated mission to “create an environment of people protecting life,”
SHIP HEALTHCARE HOLDINGS, INC. carries out a wide-range of nursing careand medical service-related businesses in four domains on a group basis:
the Lifecare Business, in which it operates paid nursing homes; the Total
Pack Produce Business, in which it offers comprehensive, optimal solution
services to meet the needs for hospital launch/relocation and building
extension/renovation of medical institutions; the Medical Supplies Business,in which it sells medical supplies and other products; as well as the
Dispensing Pharmacy Business.

NEC Capital Solutions
Headquarters
location

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

Representative President: Tomoo Imazeki
FoundedNovember 1978

Capital stock

3,776.88 million yen

Sales

231.4 billion yen on a consolidated basis

As NEC Groupʼs comprehensive financial services company, in addition to its
mainstay leasing business and ICT-related service business, NEC Capital
Solutions Limited is engaged in investments, loans, and advisory services inthe business domains of “companies,” “credits,” and “assets,” through RISA
Partners, Inc., its subsidiary which has a track record in the fund business,
etc.

Sumitomo Mitsui Banking
Headquarters
location

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

Representative President and CEO: Makoto Takashima
Capital stock

As the core company of the SMBC Group, SMBC possesses one of thestrongest sales foundations in Japan as well as the ability to executestrategies quickly, and is capable of providing financial services through its
influential group companies.

1,770.9 billion yen

57(Note 1): Sales are the figures settled for the fiscal year ended March 2018.

IV Appendix

Profile of Other Related Companies
Profile of other sponsor companies

Sumitomo Mitsui Finance and Leasing Company, Limited

SMBC Nikko Securities Inc.

Yoei Co., Ltd.

Headquarters
location

1-3-2 Marunouchi, Chiyoda-ku, Tokyo

Headquarters
location

3-3-1 Marunouchi, Chiyoda-ku, Tokyo

Headquarters
location

7-14-16 Ginza, Chuo-ku, Tokyo

Representative

Chairman of the Board: Kazuhisa Togashi
President: Masaki Tachibana

Representative

President (Representative Director):
Yoshihiko Shimizu

Representative

Representative Director & President:
Nobuo Iida

FoundedFebruary 1963

FoundedJuly 1918

FoundedDecember 1953

Capital stock

15 billion yen

Capital stock

10 billion yen

Capital stock

300 million yen

GINSEN CO., LTD.

Kobe Tochi Tatemono Co.,Ltd.

Muromachi Building Co.,Ltd.

Headquarters
location

4-6-12 Koraibashi, Chuo-ku, Osaka-shi, Osaka

Headquarters
location

15 Naniwamachi, Chuo-ku, Kobe-shi, Hyogo

Headquarters
location

4-1-4 Nihonbashimuromachi, Chuo-ku, Tokyo

Representative

President: Keiichi Ando

Representative

President: Hikota Koshika

Representative

President Koichi Danno

FoundedMay 1954

FoundedDecember 1950

FoundedDecember 1952

Capital stock

370 million yen

Capital stock

30 million yen

Capital stock

10 million yen

Profile of support companies

SMBC Trust Bank Ltd.

RISA Partners, Inc.,.

Headquarters
location

1-3-1 Nishi-shinbashi, Minato-ku,
Tokyo

Headquarters
location

Representative

Representative Director, President:
Fumiaki Kurahara

Representative President: Yoshio Narukage

FoundedFebruary 1986

Capital stock

87.55 billion yen

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

FoundedJuly 1998

Capital stock

100 million yen

MaxRealty Inc.

Orion Partners Japan

Headquarters
location

2-4-2 Nagatacho, Chiyoda-ku,
Tokyo

Headquarters
location

Representative

Representative Directors:
Hideo Karashima, Yasumasa Kai

Representative Steven J. Bass

FoundedNovember 2002

Capital stock

150 million yen

1-25-5 Higashi-azabu, Minato-ku,
TokyoFoundedDecember 2007

Capital stock

100 million yen

58

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 14, 2018) and incorporate certain subjective assumptions about uncertain
factors that may affect future 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 view and judgment basedon information as of the date when this material is prepared and involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness and validity 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 madebased on your own judgment and responsibility.

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