This translation of materials is provided solely for information purposes. Should there be any discrepancy between thistranslation and the Japanese original, the latter shall prevail.

Financial Results Briefing Materials
Fiscal Period Ended July 2017
(5th Fiscal Period)

Asset Management Company

Securities Code: 3455

Table of Contents

Ⅰ Financial Summary
1. Topics

Ⅲ Growth Strategy

1. Road Map to External Growth

2. Actual results for the 5th Fiscal Period

2. Action Strategy

3. 6th Fiscal Period and 7th Fiscal Period
Earnings Forecast

3. Case Examples of Actions for Expansionof Pipeline

4. Financial Status
5. Obtainment of Credit Rating
6. Changes in Distribution Per Unit

Ⅱ Status of Management
1. Portfolio Highlights

Ⅳ Appendix

2. Portfolio Map
3. Portfolio List
4. Operator List

1

Financial SummaryⅠ
2

I Financial Summary

1. Topics (1)Property Acquisition through Public Offering▉ Conducted the first public offering since IPO and acquired 6 paid nursing homes for 13.4 billion yen
Newly acquired properties

Acquisition date

Kobe Gakuentoshi Building
Moriguchi-Sata Lagare
Hapine Kobe Uozaki Nibankan

February 1,
2017Granda Tsuruma-Yamato
Smiling Home Medice Adachi
AIKOEN ICHIBANKAN Building

March 3,2017

Total/Average

Acquisition price(million yen)Appraisal value(million yen)
(Note 1)

Appraisal NOI yield(%)(Note 2)

4,320

4,530

5.2

4,150

4,410

5.3

930

996

5.2

1,000

1,060

5.3

2,253

2,380

5.3

770

843

5.8

13,423

14,2195.3

Expansion of Pipeline
System to gather quality deals and information

Number ofproperties

24(+6 properties from previous fiscal period)

Asset size (Note 3)

38.4 billion yen(+13.4 billion yen from previous fiscal period)(Note 1) “Appraisal Value” of the acquired properties on the left is indicated based on the appraisal
report with October 31, 2016 as the appraisal date.
(Note 2) “Appraisal NOI yield” is appraisal value at time of acquisition divided by acquisition price,rounded down to the first decimal place. The same shall apply hereinafter in this document.
(Note 3) Asset size is indicated based on property acquisition price (excluding acquisition expenses
and taxes.)

Strengthening of support functions▉ Concluded pipeline support agreement with MaxRealty Inc.
▉ Formation of a new bridge fund by the sponsors▉ Pipeline over 25 billion yen in total▉ Obtained first refusal right related to hospital
real estate (Niigata Rehabilitation Hospital)

Strengthening of deal sources andwarehousing functions

3

I Financial Summary

1. Topics (2)Obtainment of Credit Rating

Financial Status▉ Obtained Long-Term Issuer Rating A (Stable)▉ Conducting long-term fixing of loans(Note 1)

▶First rating as healthcare REIT (Note 2)▶ Supporting the growth and stability of HCM▶ Loan balance

20.7 billion yen(+6.7 billion yen from previous fiscal period）

▶ LTV

48.9%
(-1.3% from previous fiscal period）▶ Ratio of loans with fixed interest rates

To diversify financing method and expand the baseof investors

95.2%(+45.2% from previous fiscal period）▶ Average remaining term to maturity

2.5 years(+1.9 years from previous fiscal period）(Note 1) Rating Agency Japan Credit Rating Agency, Ltd. (JCR)(Note 2) Indicated based on public information

Financial Highlights
Operating Results for 5th Fiscal Period▉ Operating revenue

1,162 million yen(+378 million yen from previous fiscal period）▉ Net income

520 million yen(+226 million yen from previous fiscal period）▉ Distribution per unit

Earnings Forecast▉ 6th Fiscal Period
Distribution per unit forecast

2,483 yen▉ 7th Fiscal Period
Distribution per unit forecast

2,363 yen

2,697 yen(+257 yen from previous fiscal period）

4

I Financial Summary

2. Actual results for the 5th Fiscal Period▉ With the increase in operating revenue due to the acquisition of 6 properties, increased distribution by 32
yen from the forecast, or 257 yen from the previous fiscal period(Unit: million yen)
4th Fiscal Period

Actual(A)
Operatingrevenue(Ended July 2017)

Forecast (Note)
(B)

784

Main Factors of Difference(Comparison with Forecast)

5th Fiscal Period(Ended January 2017)

Actual

(C)

1,163

1,162

Comparison
with Forecast(C)-(B)

Comparison with 4th Fiscal
Period(C)-(A)

0+378●Decrease in expenses related to rent business (-3)• Repair expenses (-5)• Depreciation (+2)(C)-(A)(A)●Other operating expenses (-4)(%)• Decrease in advertising expenses, etc.

+48.2

Operatingexpenses

430

542

535

-7

+104

+24.4

Expenses related
to rent business

284

383

379

-3

+95

+33.6

(Depreciation)

204

285

288

+2

+83

+41.0

627

+6

Operatingincome354

621

Ordinary income

294

515

521

+5

+226

+77.0

Net income

293

514

520

+6

+226

+77.2

+273

Difference in operating expenses (-7)+77.3

Main Factors of Difference(Comparison with 4th Fiscal Period)
Difference in operating revenue (+378)●Contribution of rent income from properties acquiredin the 5th Fiscal Period (+378)

Difference in operating expenses (+104)●Increase in expenses related to rent business (+95)• Depreciation (+83)• Management service expenses (+5)
• Property taxes (Fixed asset tax and city planning tax) (+2)●Increase in asset management fee (+5)●Increase in administrative services fee, etc. (+2)

Difference in non-operating expenses (+46)●Increase in interest expenses (+29)●Increase in borrowing related expenses (+12)●Increase in investment unit issuance expenses (+4)

Distribution
per unit
(yen)

2,440

2,665

2,697

+32

+257

+10.5

NAV per unit
(yen)

120,027

─

113,996─

-6,031

─(Note) The forecast for the 5th Fiscal Period (B) is the forecast figure announced in the Financial Report for the 4th Fiscal Period dated March 13, 2017.

5

I Financial Summary

3. 6th Fiscal Period and 7th Fiscal Period Earnings Forecast▉ Increase in revenue and decrease in profits are expected with the increase in operating expenses in the 6th
Fiscal Period(Unit: Million yen)
5th Fiscal
Period

6th Fiscal Period

ActualForecast(A)(B)

Operatingrevenue

1,162

Operatingexpenses
Expenses related
to rent business(Depreciation)

Operatingincome7th Fiscal Period(Ending January 2018)(Ended July 2017)(Ending July 2018)

Comparison with 5th Fiscal
Period(B)-(A)(B)-(A)
(A)
(%)

1,179

+17

535

588

+53

+10.0

379

392

+12

+3.2

+1.5

Forecast
(C)

0

612

+24

●Full-period contribution of rent income fromproperties acquired in the 5th Fiscal Period (+17)

Difference in operating expenses (+53)(C)-(B)
(B)
(%)

1,179

418

Difference in operating revenue (+17)

Comparison with 6th Fiscal
Period(C)-(B)

6th Fiscal Period Forecast(Comparison with 5th Fiscal Period )●Increase in expenses related to rent business (+12)

0• Repair expenses (+8)• Depreciation (+3)●Increase in asset management fee (+34)●Increase in administrative services fee, etc. (+2)

+26

+4.1
+6.8

288

291

+3

+1.2

292

+1

+0.4

627

591

-36

-5.8

566

-24

-4.1

●Increase in property taxes (consumption tax) (+3)

Difference in non-operating expenses (+4)●Increase in interest expenses, etc.

Forecast for the 7th Fiscal Period(Comparison with 6th Fiscal Period forecast)Difference in operating revenue (0)Difference in operating expenses (+24)●Increase in expenses related to rent business (+26)• Property taxes (Fixed asset tax and city planning tax） (+25)

Ordinary income

521

480

-41

-7.9

457

-23

-4.8

Net income

520

479

-41

-7.9

456

-23

-4.8

Distribution
per unit
(yen)

2,697

2,483

-214

-7.9

2,363

-120

-4.8

6

I Financial Summary

4. Financial Status
Status of Interest-Bearing Liabilities

Diversification of lenders
Bank formation centering on the main sponsor SMBC

Total amount ofloans

LTV (Note)

Ratio of loans with
fixed interest rates

20.7 billion yen

48.9%

95.2%

（-1.3% from previous fiscal period）（+45.2% from previous fiscal period）

Ratio oflong-term loans

Average remaining
terms to maturity

Average borrowinginterest rate

61.4%

2.5 years（+11.4% from previous fiscal period）（+1.9 year from previous fiscal period）

8.5 billion yen (41.1%)

三井住友信託銀行
Sumitomo Mitsui
Trust Bank

3.25 billion yen (15.7%)

Nippon Life日本生命保険
Insurance（+6.7 billion yen from previous fiscal period）

0.58%

1.6 billion yen (7.7%)

りそな銀行
ResonaBank

1.6 billion yen (7.7%)

信金中央金庫
Shinkin Central
Bank0.75 billion yen (3.6%)

西日本シティ銀行
Nishi-Nippon
City Bank

0.75 billion yen (3.6%)

福岡銀行
Bank of Fukuoka

0.75 billion yen (3.6%)

三重銀行
Mie
Bank

0.75 billion yen (3.6%)

七十七銀行
77 Bank

0.75 billion yen (3.6%)

Dai-ichi Life第一生命保険
Insurance

0.75 billion yen (3.6%)（+0.23% from previous fiscal period）

広島銀行
HiroshimaBank0.75 billion yen (3.6%)

Higashi-Nippon
Bank
東日本銀行

Change in LTV and total amount of loans

借入金総額（左軸）
Total interest-bearing liabilities（left axis）

LTV（右軸）LTV（right axis）

50.2

Stable financial operation with extended loan periods, fixed interest rates
and diversified maturities

(%)

50.2

(billion yen)

Refinanced on March 21, 2017

1.0

Newly borrowed on February 1
and March 3
Floating

48.9

48.8

13.0

13.0

14.0

14.0

End of 1st FP

End of 2nd FP

End of 3rd FP

End of 4th FP

第２期末

第３期末

第４期末

7.0
Floating

Fixed

End of 5th FP

Fixed

3.0
Fixed

20.7

第５期末

Existing loans
3.0

7.0

48.4

第１期末

0.50 billion yen (2.4%)

Diversification of maturities

To keep the LTV level at around 50% for the time being supported bystable funding capability(yen)(Amount, %)三井住友銀行
SMBC

3.7

5th
FP
第5期

6th
FP
第6期

2017
平成29年

7th
FP
第7期

8th
FP
第8期

2018
平成30年

2.0

1.0

9th
FP 10th
FP 11th
FP 16th
FP 17th
FP 12th
FP 13th
FP 14th
FP 15th
FP 18th
FP
第9期
第10期
第11期
第12期
第13期
第14期
第15期
第16期
第17期
第18期
2019
平成31年

平成32年
2020

2021
平成33年

2022
平成34年

平成35年
2023

7
(Note) LTV= Total amount of loans/Total assets as of the end of the fiscal period ended July 2017

Fixed

I Financial Summary

5. Obtainment of Credit Rating▉ Obtained Rating A for the first time as healthcare REIT (Note)
Rating Agency

Target/Rating

Outlook▌Diversification of financing method

Japan Credit Rating
Agency, Ltd.
(JCR)

Long-Term Issuer Rating:A

Stable▌Expansion of the base of investors(Note) Indicated based on public information.

Points of evaluation▉ Volatility of rent income is limited with theconclusion of long-term fixed-rent leaseagreement with credible operators▉ Most of the properties owned are located inurban areas where the number of elderly is
expected to increase▉ External growth is expected with theacquisition of a new pipeline utilizing
sponsor support▉ Financial stability increased with the shift
to long-term fixed-rate loans

Distribution yield and asset size of properties witha rating of A
5.8%
5.6%

HCM

5.4%

INV
NRT

5.2%

ONE

5.0%

KRR

4.8%
4.6%
4.4%

HFR

4.2%
4.0%

0

0

500

50

1,000

100

1,500

150

2,000

200

2,500

250

3,000

300

3,500

350

(billion yen)(Source) Prepared by the Asset Management Company based on materials publicized by each company and theclosing price as of July 31, 2017.

Abbreviations
HCM: Healthcare & Medical Investment Corporation,
NRT: NIPPON REIT Investment Corporation,
INV: Invincible Investment Corporation,

ONE: One REIT, Inc.
HFR: Heiwa Real Estate REIT, Inc.,
KRR: Kenedix Retail REIT Corporation

8

I Financial Summary

6. Change in Distribution Per Unit
3,000

(yen)

予想分配金
Distribution per unit forecast
2,730

2,697
2,665

(Note 1)

2,500

実績分配金
Actual distribution(Note 3)

2,500

2,440

(Note 2)

2,340

2,483
(forecast)

2,360

Announced forecast

2,363(forecast)(Note 1)

2,100
2,000

1,500

1,000

第２期

2nd FP

第３期

3rd FP

第４期

4th FP(Note 1) The forecast figure disclosed in the Financial Report for Fiscal Period Ended July 2015 dated September 15, 2015.
(Note 2) The forecast figure disclosed in the Financial Report for Fiscal Period Ended July 2016 dated September 14, 2016.
(Note 3) The forecast figure disclosed in the Financial Report for Fiscal Period Ended January 2017 dated March 13, 2017.

第５期

5th FP

第６期

6th FP

第７期

7th FP

9

Status of Management

Ⅱ
10

II Status of Management

1. Portfolio Highlights
Number of Properties

24 properties

Total Acquisition Price

Total Appraisal Value

Averageappraisal NOI yield（+6 properties from previous fiscal period）（+13.4 billion yen from previous fiscal period)

38.4 billion yen

41.7 billion yen

5.6 %Average Building Age

Average Remaining
Lease Term

Number of Operators

Occupancy Rate

9 companies

100 %13.7 years（-1.3 years from previous fiscal period

13.9 years（+1.6 years from previous fiscal period

Portfolio Diversification
Serviced housing
for the elderly

8.1％ (2 properties)（+2 companies from previous fiscal period)

Other areas

1.0％

9.5％

Chubu areaTokyo
metropolitan area
47.1％

By
GeographicalArea
Kinki area

91.9％ (22 properties)

GREEN LIFEHIGASHI NIHON Co., Ltd.

5.9％

GREEN LIFE

29.5％

AS PARTNERS

7.3％

Sompo Care Message

39.0％

Paid nursing home

Medical Corporation
AIKOKAI

4.5％ 2.0％

Core cities

3.3％

By typeJAPAN LIFE DESIGN

8.1％

By Operator

Sawayaka Club

8.6％

Three Major Metropolitan areas

89.4％

Benesse Style Care

16.8％

Sompo Care Next

17.2％

(Note 1) “Average Building Age” and “Average Remaining Lease Term” are calculated by weighted averaging with acquisition prices, with the end of the 5th Fiscal Period (July 31, 2017) as reference date, rounded down to the first decimal
place. “Appraisal Value” is indicated based on the appraisal report with July 31, 2017 as the appraisal date.
(Note 2) The figures for “By type,” “By Geographical Area” and “By operator” are calculated based on acquisition prices, rounded off to the first decimal place.

11

II Status of Management

2. Portfolio Map
Ratio of investment inthree major metropolitan areas

Strategic
investment inthree major
metropolitan
areas

47.1％

89.4%

Core cities
14

Tokyo metropolitan area

Bonsejour Chitose-funabashi

9.5％

SAWAYAKA Mekarikan

24

Kinki area
AIKOEN ICHIBANKAN Building

Other areas

10

11

12

3

4

Bonsejour Musashi-shinjo

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

5

6

SOMPO CARE La vie
Re Machidaonoji

SOMPO CARE La vie Re
Azamino

7

8

39.0％

18

1.0％

ASHEIM Hikarigaoka

9

15

2

Bonsejour Hino

16

SAWAYAKA Tachibanakan

1

ASHEIM Bunkyohakusan

17

AQUAMARINE Nishinomiyahama

Chubu area
SAWAYAKA Tagawakan

Properties acquired in
the 5th Fiscal Period

3.3％

13

Medical Rehabilitation Home
Bonsejour Komaki

Sompo no ie S
Awajiekimae

20

Kobe Gakuentoshi Building

Medical Home
Bonsejour Itami

Sompo no ie S
Kobekamisawa

21

Moriguchi-Sata Lagare

22

Hapine Kobe Uozaki Nibankan

GOOD TIME HOME
Fudo-mae

19

Granda Tsuruma-Yamato

Bonsejour Yotsugi

23

Smiling Home
Medice Adachi

1212II Status of Management

3. Portfolio List
Operator

GREEN LIFE

Benesse Style Care

AS PARTNERS

Sompo Care Next

Property Name

Type

Location

Acquisition Price(million yen)
(Note 1)

Appraisal Value(million yen)
(Note 2)

Appraisal
NOI Yield(%)

Number ofrooms(rooms)Resident
capacity(people)Occupancyrate(%)

Date of figures

RemarkAQUAMARINE Nishinomiyahama

with care service

Nishinomiya-shi, Hyogo

1,950

2,190

6.2

90

100

97.0 July 2017

Disclosure statement

Kobe Gakuentoshi Building(Happine Kobegakuentoshi)

with care service

Kobe-shi, Hyogo

4,320

4,530

5.2

128

138

93.5 July 2017

Disclosure statement

Moriguchi-Sata Lagare

with care service

Moriguchi-shi, Osaka

4,150

4,410

5.3

155

189

93.1 July 2017

Disclosure statement
Disclosure statement

Happine Kobe Uozaki Nibankan

with care service

Kobe-shi, Hyogo

930

997

5.2

47

47

100.0 July 2017

Bonsejour Chitose-funabashi

with care service

Setagaya-ku, Tokyo

824

974

5.9

42

47

90.4 January 2017

(Note 3)

Bonsejour Hinowith care service

Hino-shi, Tokyo

724

818

6.0

56

58

100.0 January 2017

(Note 3)

Bonsejour Musashishinjo

with care service

Kawasaki-shi, kanagawa

582

643

6.2

46

49

91.3 January 2017

(Note 3)

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa
Medical Rehabilitation Home
Bonsejour Komaki

with care service

Hadano-shi, Kanagawa

728

850

6.4

100

101

81.0 January 2017

(Note 3)

Housing-type

Komaki-shi, Aichi

1,270

1,450

7.3

124

165

87.8 January 2017

(Note 3)

Bonsejour Yotsugi

with care service

Katsushika-ku, Tokyo

824

886

5.8

61

65

80.3 January 2017

(Note 3)

Medical Home Bonsejour Itami

Housing-type

Itami-shi, Hyogo

514

557

7.1

62

64

93.5 January 2017

(Note 3)

Granda Tsuruma-Yamatowith care service

Yamato-shi, Kanagawa

1,000

1,060

5.3

73

90

98.6 January 2017

(Note 3)ASHEIM Hikarigaokawith care service

Nerima-ku, Tokyo

1,385

1,570

5.5

83

89

91.0 July 2017

Disclosure statement

ASHEIM Bunkyohakusan

with care service

Bunkyo-ku, Tokyo

1,430

1,630

5.1

50

52

92.3 July 2017

Disclosure statement

SOMPO CARE La vie Re Machidaonoji

with care service

Machida-shi, Tokyo

3,580

3,810

5.3

163

169

62.1 July 2017

Disclosure statement

SOMPO CARE La vie Re Azaminio

with care service

Yokohama-shi, Kanagawa

3,050

3,270

5.1

145

145

60.0 July 2017

Disclosure statement

SAWAYAKA Tachibanakan

with care service

Fukuoka-shi, Fukuoka

1,520

1,580

6.2

104

104

95.2 July 2017

Disclosure statement

Sawayaka ClubSAWAYAKA Mekarikan

with care service

Kitakyushu-shi, Fukuoka

1,380

1,450

6.3

95

95

97.9 July 2017

Disclosure statement

SAWAYAKA Tagawakan

with care service

Tagawa-shi, Fukuoka

390

412

6.6

60

60

96.7 July 2017

Disclosure statement

JAPAN LIFE DESIGNGOOD TIME HOME Fudo-mae

with care service

Shinagawa-ku, Tokyo

1,740

1,940

5.3

61

67

91.0 July 2017

Disclosure statement

GREEN LIFE HIGASHINIHON Co., Ltd.
Medical Corporation
AIKOKAI

Smiling Home Medice Adachi

with care service

Adachi-ku, Tokyo

2,253

2,390

5.3

82

82

97.6 July 2017

Disclosure statement

AIKOEN ICHIBANKAN Building(AIKOEN ICHIBANKAN)

with care service

Niigata-shi, Niigata

770

849

5.9

90

90

92.2 July 2017

Disclosure statement

Serviced housing for theelderly
Serviced housing for theelderly

Osaka-shi, Osaka

1,930

2,170

6.0

137

137

93.4

(Note 5)

─Kobe-shi, Hyogo

1,200

1,340

6.0

85

85

88.2

(Note 5)

─38,444

41,776

5.6

2,139

2,288

─

Sompo Care Message

Sompo no ie S Awajiekimae(Note 4)
Sompo no ie S Kobekamisawa

Total / Average─(Note 1) Acquisition price does not include acquisition expenses, consumption tax, etc.
(Note 2) Indicated based on the appraisal report with July 31, 2017 as the appraisal date. The same shall apply hereinafter in this document.
(Note 3) The occupancy rate is the occupancy rate based on a survey conducted by Tamura Planning & Operating Co., Ltd. (hereinafter referred to as “Tamura Planning”). Calculation of the occupancy rate by Tamura Planning is based on
number of rooms, while calculation of the occupancy rate in the Property Disclosure Statement of Important Issues is on a resident capacity basis. Accordingly, the Property Disclosure Statement of Important Issues and actual figures
may differ.
(Note 4) The number of rooms as serviced housing for the elderly is 136 rooms. The same shall apply hereinafter in this document.
(Note 5) The occupancy rate is the occupancy rate estimated by the asset management company based on the number of rooms as at the end of July 2017 disclosed on the property website. Accordingly, it may differ from the actual
occupancy rate.

13

II Status of Management

4. Operator List
Operator name

Number of
facilities

Attribute(Note 1)

GREEN LIFE Inc.

25

GREEN LIFE HIGASHI NIHON
Co., Ltd.

36

Sompo Care Next Inc.

117

Consolidated subsidiary of SHIPHEALTHCARE HOLDINGS, INC.,
which is listed on the TSE First
SectionConsolidated subsidiary of Sompo
Holdings, Inc., which is listed on
the TSE First Section

Remarks

Operates 67 facilities nationwide at GREEN LIFE Inc. and GREEN LIFEHIGASHI NIHON Inc. as a nursing care business that plays a central
role in the Lifecare Business of SHIP HEALTHCARE HOLDINGS, INC.
Mainly operates paid nursing homes with service under the Sompo
Care La vie Re brand and other brands, mainly in the Greater Tokyo
Area (Formerly Watami No Kaigo Co., Ltd.)
Operates mid- to low-end paid nursing homes under the Sompo no ie
brand and serviced housing for the elderly under the Sompo no ie S
brand, mainly in Tokyo, Osaka, Nagoya, and also elsewhere in Japan.
(Formerly, Message Co., Ltd.)

Sompo Care Message Inc.

334

Benesse Style Care Co., Ltd.

308

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

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

Sawayaka Club Co., Ltd.

70

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.

AS PARTNERS Co., Ltd.

14

Unlisted company

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

3

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

Operates paid nursing homes under the GOOD TIME HOME brand inTokyo. Including the facilities of SOUSEI JIGYOUDAN Co., Ltd., theparent company, the company operates 31 facilities.

10

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

Operating hospitals and clinics as well as paid nursing home with careservice, group home and long-term care health facilities in Niigata
PrefectureJAPAN LIFEDESIGN Inc.

Medical Corporation AIKOKAI

14(Note 1) “Number of facilities” indicates figures tallied by the Asset Management Company based on the information in the announced materials such as the securities report of each company as of the end of June 2017.
(Note 2) Indicates the actual figures in fiscal 2015 based on NSG Group’s website.

14

Growth Strategy

Ⅲ15

III Growth Strategy

1. Road Map to External Growth

資産規模目標TargetAsset Size
 Expecting an asset size of 100 billion yen over the medium term (Note) Utilization of existing pipeline and creation of new acquisition opportunity
Aim to create new acquisition opportunities by utilizing
extensive networks and warehousing function

Jump

Aim to expand the asset size with an eye to thepossibility of acquiring hospital real estate while
utilizing the pipeline

Step

Succeeded to “hop”
through the first public
offering

Pipeline

25.0

billion yen<Target>

Hop

23.6

100.0

38.4

billion yen

billion yen

billion yen

IPO

March 2016

March 2017

Mid-term goal
16

(Note) The targets announced in the financial results briefing sessions held September 15, 2017. These targets may not be achieved due to future events, market environment and other factors.

III Growth Strategy

2. Action Strategy (1)▉ With over 25 billion yen pipeline in total, focus on further
expansion

Building a System to gather quality deals andinformation
Facilities andhousing for theelderly

Facilities andhousing for theelderly(already opened)(to be developed)

Medicalservice-related
facilities

Sponsor Pipeline(Possess first refusal rights) (Note)

Paid nursing home with care service

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

SOMPO CARE
La vie Re Hama-Kawasaki(Kawasaki-shi, Kanagawa)Paid nursing home with care service

Verge minowa(Takasaki-shi, Gunma)(Note) Includes properties acquired by support SPCs (HC Vega and HC Altair) invested by the sponsor. These are not assets that HCM
has decided to acquire and there is also no guarantee that HCM will be able to acquire these in the future.

Paid nursing home with care service

Hospital

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

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

Long Life Kobe-Aotani(Kobe-shi, Hyogo)

In case a support SPC or sponsor decides to sell a healthcare facility
they own, HCM has the first refusal rights to acquire the property. The
following properties are some of healthcare facilities owned by support
SPCs or sponsors.

17III Growth Strategy

2. Action Strategy (2)Building a system to gather quality deals and information
Facilities andhousing for theelderly

Operators

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

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

Extensive
sourcing routes

Supportagreement

Sponsor andsupporting company
networks
Asset managementcompany’s own
network

Supportagreement

Extensive
warehousing
functionsUtilization ofbridge SPCs

Nursing care and medical service
Fund management
FinanceUtilization of balance
sheets of sponsors
and others

Developers
Housebuilders

Extensive networks

Medicalservice-related
facilities

Medicalcorporation

Expert know-how

Warehousing function

Capture quality deals on a negotiationbasis at the right timing

18

III Growth Strategy

3. Case examples of actions for expansion of pipeline (1)Medical Service-Related Facilities (hospitals, medical mall), etc.

Medical Service-Related Facilities(hospitals, medical mall), etc.

Reconstructing and making buildings quake-resistant
M&A financing
Strengthening financial standing
Demand for capital generated from business succession
and recombination of finance
Strengthening functions and changing business model
Exit strategy of business revitalization fundMain investment target (hospital)

Case Example 1: Liquidation of hospital real estate
Captured needs for real estate liquidation of the medical
corporation through sponsor’s network. Acquired one of the
major rehabilitation hospitals in Niigata through Sumitomo Mitsui
Finance and Leasing Co., Ltd, one of the sponsors, in March2017 following the acquisition of paid nursing home (AIKOENICHIBANKAN) operated by the said corporation.

Property Name

Niigata Rehabilitation Hospital

Location

761Kizaki, Kita-ku, Niigata-shi, Niigata▉ A hospital that can play animportant role in the
Regional Healthcare Vision

Operator

Medical Corporation AIKOKAI

Subject of medical
treatment

Rehabilitation, orthopedic surgery, internal medicine, neurology, dental & dental and oral surgery

Number of hospital beds

168 beds (general bed: 108 beds, chronic stage bed: 60 beds)• Financial standing and business ofthe medical corporation which is
the lessee

Site area

15,056.85 m²

Total floor area

13,476.55 m²

Characteristics

A mixed-use rehabilitation facility with functions centering on rehabilitation in the recovery stage
as well as other functions such as prevention of fall down, sport rehabilitation and outpatient
rehabilitation for in-home care support
Set as hospital function evaluation ver.6, added function & rehabilitation function (recovery stage)ver.2 by Japan Council for Quality Health Care.

• Position in the secondary medical
area

19

III Growth Strategy

3. Case examples of actions for expansion of pipeline (2)(to be developed)

Facilities andhousing for theelderly

Facilities and housing for the elderly(properties in operation)

Facilities and Housing for the Elderly (Paid nursing home & serviced housing for the elderly)
Strengthening financial standing
Avoiding risks of owning real estate
Inheritance(exit strategy of the utilization for the benefit of land owners)

Changing business policy
M&A financing
Focusing on healthcare businessNew development unrelated to utilization for the benefitof land owners

Multi-use/large-scale development

La Vie en Rose Takatsuki(Takatsuki-shi, Osaka)
Operator: JAPAN LONGLIFE
No. of rooms: 45 rooms
Resident capacity: 45 people

Case Example 2: Owner change (Paid nursing home)
Captured the needs of the real estate company (owner) for
selling the property through the asset management company’s
own network. Acquired using a bridge SPC formed by thesponsor, not by bidding but on a negotiation basis.

Medical Rehabilitation Home Granda
Toyota-Motomachi(Toyota-shi, Aichi)
Operator: Benesse Style Care Co., Ltd.
No. of rooms: 75 rooms
Resident capacity: 85 people

Case Example 3: New development (Paid nursing home)
Development case utilizing warehousing function of Sumitomo
Mitsui Finance and Leasing Co., Ltd., one of the sponsors.
Cooperated with the operator and housebuilder from landacquisition and reduced development risks and transaction costs.
Opened in November 2016.

20

AppendixⅣ
21

IV Appendix

HCM’s 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 peaceof mind22

IV Appendix

HCM’s 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

2 Strong support from sponsors

 Utilization of advanced expertise in “nursing care and medical service,”“fund management” and “finance” held by SHIP HEALTHCARE, NEC Capitaland 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
23

IV Appendix

Environment Surrounding Healthcare Facilities
Upgrades and expansion of healthcare facilities backed
by government policy

Rising elderly ratio and increase in elderly single households
Outlook of change in Japan’s population and elderly ratio(10 thousand people)
15,000█ 64 years old or younger

Ratio of 65 years old or older█ 65-74 years old

Actual█ 75 years old or older

40%

Estimate

32.8%

30.0%

10,000

14.6%

10.3%

10,71810,854
776
471
1985
昭和60年

0

10,161
1,407
1,160

1,109
717
1995
平成７年

2005
平成17年

20%

9,322

8,577

7,740

6,723

1,754

1,497

1,522

1,643

1,632

2,180

2,260

2,277

2015
平成27年

2025
平成37年

2035
平成47年

2045
平成57年

Ratio of elderly single households in elderly households(Thousand households)
25,000█ Other households█ Couple with no other members

Actual

20,00015,000

5,818

5,033

10,000

4,648

5,000
0

6,453

6,512

6,209

5,403

6,338

6,485
6,328

6,254

3,865

4,980

6,008

6,679

7,007

7,298

7,622

2005
平成17年

2010
平成22年

2015
平成27年

2020
平成32年

2025
平成37年

2030
平成42年

2035
平成47年

0%

10%
0%

1.0%

400,000
0.5%

0.5%

147,981

176,935

183,245

195,972

216,174

2006
平成18年

2007
平成19年

2008
平成20年

2009
平成21年

2010
平成22年

2011
平成23年

Supply status of serviced housing for the elderly

315,234

350,990391,144424,828

2012
平成24年

2013
平成25年

2014
平成26年

2015
平成27年

Supply rate for 65 years old or older
65歳以上人口…

0.01%
3,448
0

0.18%
56,1371.5%

0.29%
89,122

0.36%

114,315

Resident capacity
Resident capacity

230

thousand people

0.9％

690

thousand people

Outcome indicator

Resident capacity

1,460

thousand people

2014

2.1％

2025

４％

Current status of reconstruction of hospitals, etc.
Hospitals that were constructed around 1965-1985 and do not meetthe earthquake resistance standards still exist

0.5%(Hospital: Having more than 3 floors above ground and a total floor area of 5,000 m² or more)

0.0%

Seismic diagnosis which wasn’t compulsory and reporting of the results are
obligated

1.0%

No. of units
戸数200,000

Ratio of housing for the elderly as a percentage of theelderly population<“Act for Partial Revision of the Act on Promotion of Seismic Retrofitting of Buildings” was enforced in November 2013>

123,155(Units)400,000

1.3%

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

1.0%

200,000
0

1.2%

0.7%

0.7%

0.6%

0.6%

1.1%

Housing Life Basic Plan
(nationwide plan)2005

Supply status of paid nursing homes
Supply
供給率rate

March
2016

20%

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 1.3% in 2015,
and promotion of further supply is needed.
Resident
定員数 capacity

Guidelines Concerning
REITs Targeting Hospital
Real Estate

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

30%

Promotion of further supply of Healthcare facilities(Resident capacity)
600,000

June
2015

10%

40%
37.7%

36.3%

34.8%
6,694

33.3%
6,870

31.8%
6,669

30.7%

28.5%

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

Estimate

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

30%

26.6%

20.2%
5,000

36.8%

June
2014

0.42%

0.46%

135,352

151,667

0.50%

0.54%

0.56%

Making 71.5% of all hospitals⇔95% or more of paid nursing home quake-resistant(Ministry of Health, Labor and Welfare’s 2016 “Survey on Seismic Retrofit of Hospitals”)

0.5%
166,279

181,083

191,871

Dec. 2011
June 2012 平成24年12月
Dec. 2012
June 2013 平成25年12月
Dec. 2013
June 2014 平成26年12月
Dec. 2014
June 2015 平成27年12月
Dec. 2015
平成23年12月
平成24年6月
平成25年6月
平成26年6月
平成27年6月

0.0%

Investment in reconstruction, etc. is urgently necessary24IV Appendix

Environment Surrounding Healthcare Facilities
Regional comprehensive care system

Regional comprehensive care system⃝⃝⃝⃝

We will establish a regional comprehensive care system that provides residences, nursing care, prevention 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 once
they require nursing care, in around 2025 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 with dementia is expected to increase in the future.
There is a large regional difference concerning the progress of aging in large cities where the overall population remains flat andthe population of 75 years-old or older is increasing rapidly and rural areas where the population of 75 years-old or older isincreasing slightly although the overall population is decreasing.
It is necessary for municipalities and prefectural governments, which are the insurer, to create the regional comprehensive caresystem 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

Daily medical care
• Primary care doctor• Regional
cooperative hospital

Hospital visit&
stay

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

Outpatient nursing care&admissionHouse
Serviced housing for the elderly, etc.

 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
group home
• Short-term admission for daily life long-term
nursing care
• 24-hour home-visit service• Combined service(Multifunctional long-term nursing care in asmall group home + home-visit nursing), etc.

Patients
with dementia

 Nursing care prevention service

To live a healthy life foreverLife support & nursing care prevention

 Facility and home service• Facilities covered by public
aid providing long-termcare to the elderly• Long-term care healthfacility• Communal daily long-term
nursing care for adementia patient• Daily life long-term nursing
care for those admitted toa specified facility, etc.

* Regional comprehensive care systems are
expected to be established for each area inthe sphere of everyday life (specifically juniorhigh school districts) where necessary
services are provided within about 30 minutes

25

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

IV Appendix

Environment Surrounding Healthcare Facilities
About Regional Healthcare Vision⃝ It is decided that prefectural governments must establish “Regional Healthcare Vision” for each secondary medical area
by March 2018 due to the enactment of “Act for Securing Comprehensive Medical and Long-term Care in theCommunity” in the 2014 ordinary Diet session.
* “Regional Healthcare Vision” is to estimate and stipulate medical demand and required number of beds in 2025 for each medical function in order to promotefunctional differentiation and coordination of hospital beds to prepare for 2025.
* Ministry of Health, Labor and Welfare established “Guideline” that stipulates estimating methods in March 2015 for prefectural governments to start formulating“Regional Healthcare Vision.

Medical institutions(Hospital Ward A)
Advanced acute(Content of “Regional Healthcare Vision”)
1.

• Estimate for each of the four functions, which are advanced acute stage,acute stage, recovery stage and chronic stagestage function

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

Acute stage function(Hospital Ward C)

Medical demand and required number of hospital beds in 2025

• Estimate for each area of the vision within prefecture (in principal,
secondary medical area)
2.

Measures to realize medical provision system to aim for(Example)
Preparation of facilities, securing and training of medical staff, etc. to promote
differentiation and coordination of medical functions.

Recovery stage function(Hospital Ward D)

Prefecture
government

Chronic stage function
Differentiation and coordination of functions to be discussed and adjusted at“Regional Healthcare Vision Coordination Council”

Report current status
and future directionof medical functions

Establish “Regional Healthcare Vision” by utilizing reports on medical functions, etc.
and promote further functional differentiation
Source: Prepared by the Asset Management Company based on Ministry of Health, Labor and Welfare’s “Regional Healthcare Vision.”26

IV Appendix

Environment Surrounding Healthcare Facilities
Aiming to change medical provision system

Image in 2013
≪Nationwide≫
One forseven

357,569 beds

41.3%

Hospital’s general wards*Excluding 23,022 beds under provisional measures

One forten

210,566 beds

One forthirteen

26,926 beds

One forfifteen

Hospital’srecuperation
wards

24.3%

3.1%

Image of reform set for 2025
≪Tokyo≫≪Nationwide≫

47,338 beds

Advanced acute stage
180,000 beds

13.7%

15,888 beds

General acute stage
350,000 beds

26.7%

42,275 beds

Recovery stage
260,000 beds

19.8%

34,628 beds

21.4%

20,973 beds

*Excluding 1,301 beds underprovisional measures

14,793 beds

≪Tokyo≫3,431 beds

54,301 beds

6.3%

3,931 beds

216,653 beds

25.0%

13,998 beds

Long-term recuperation

280,000 beds

27
Source: “Issues in Establishing and Realizing Regional Healthcare Vision” by the Bureau of Social Welfare and Public Health, Tokyo Metropolitan Government

IV Appendix

Strong Support from Sponsors▉ Stable asset management base utilizing specialized functions and know-how of major sponsors

Nursing care and medical service

Main support
 Provision of professional know-how
through human resource dispatch, etc.
 Advice on business due diligence at
healthcare facilities

Fund
management
ファンド運営

Finance

Main support

Main support

 Advice on investigation and evaluationof investment assets
 Provision of warehousing functions

 Financial advice
 Introducing customers with needs forliquidation, etc. at healthcare facilities

28

IV Appendix

Stable cash flow in the long term Conclude long-term fixed-rent lease agreements with operators in principle
 Carefully select credible operators based on business due diligence
Stable cash flow in the long term

Carefully selected operators<In case of paid nursing homes with care service>Good judgement in selecting operators, who are lessees, isindispensable for receiving stable rent income

Operators(Upfront entrance fees)
Residents
Monthly fees

Municipality,etc.

Nursing care fees

Fixed rent

Business due diligenceLong-termlease agreements

HCM concludes long-term fixed-rent lease agreements with operators in principle.
Therefore, rent HCM receives is not directly affected by occupancy rates orincome/expenditure of facilities operated by the operators, enabling HCM to expect
stable rent income.

Remaining years of leaseagreement(Note)
Over 20 years
13.6%

Average:
13.9
years
10 years or more but
less than 20 years
53.3%

Ratio of fixed rents

Less than
10 years
32.9%

100％

Management
compliance structure

Business history/
activities

Operational status
of facilities

Financial status

Appropriate Maintenance and Management of Properties
0

5

10

15

(million yen)

20

0

1st FP
第1期

1st FP

2nd FP
第2期

2nd FP

3rd FP
第3期

3rd FP

4th FP
第4期

4th FP

5th FP
第5期

5th FP

6th FP
第6期(forecast)(forecast)

7th FP
第7期(forecast)(forecast)

10

20

30

40

50

(million yen)

60

70

6th FP
7th FP

Repair expenses

Capital expenditure(Note) “Remaining years of lease agreement” is calculated by weighted averaging with acquisition prices, with the end of the 5th Fiscal Period (July 31, 2017) as reference date, rounded down to the first decimal place.

29

IV Appendix

Overview of Operators
GREEN LIFE Co., Ltd
Headquarters location 3-20-8, Kasuga, Suita-shi, Osaka
Representative

GREEN LIFE Co., Ltd. considers its nursing homes “an extensionof the family,” and where residents can enjoy a peaceful, safe,
and comfortable lifestyle. As a company engaged in long-termcare business under SHIP HEALTHCARE HOLDINGS, INC. andgroup of companies including GREEN LIFE HIGASHI NIHON Inc.,
GREEN LIFE Co., Ltd. operates facilities nationwide.

Benesse Style Care Co., Ltd. operates seven brands in Tokyo,
Osaka, Nagoya, and elsewhere in Japan. The brands are mainly
mid- to high-end, such as Bonsejour and GRANNY AND GRANDA,
thus allowing residents to select “a lifestyle that suits them.”

Representative Director and President Keiji Arai

FoundedMay 1994

Capital stock

50 million yen

Listed or unlisted

Unlisted

Parent company

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

GREEN LIFE HIGASHI NIHON Co., Ltd.
Headquarters location

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

Representative

Representative Director and President Keiji Arai

FoundedJuly 2003

Capital stock

90 million yen

Listed or unlisted

Unlisted

Parent company

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

Benesse Style Care Co., Ltd.
Headquarters location

Shinjuku Monolith Building 5th floor, 2-3-1, NishiShinjuku, Shinjuku-ku, Tokyo

Representative

Representative Director and President Shinya Takiyama

Founded

September 1995

Capital stock

100 million yen

Listed or unlisted

Unlisted

Parent company

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

Sawayaka Club Co., Ltd.
Sawayaka Club Co., Ltd. operates low-price facilities with no
upfront entrance fees under the SAWAYAKA brand, in Fukuoka
Prefecture and elsewhere in Japan, based on the belief in
repaying older generations that gave their all for the developmentof Japan.

Headquarters location

2-10-10, Kumamoto, Kokurakita-ku, Kitakyushu-shi,
Fukuoka

Representative

Representative Director and President Bunji Uchiyama

FoundedDecember 2004

Capital stock

200.8 million yen

Listed or unlisted

Unlisted

Parent company

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

30

IV Appendix

Overview of Operators
Sompo Care Next Inc.

Sompo Care Next Inc. mainly operates paid nursing homes withservice under the Sompo Care La vie Re brand and other brands,
mainly in the Greater Tokyo Area, under the concept that “homes
exist solely for the happiness of their residents.

Headquarters location

Shinagawa Seaside east tower 12th floor, 4-12-8,
Higashishinagawa, Shinagawa-ku, Tokyo

Representative

President and Chief Executive Officer Ken Endo

FoundedNovember 1992

Capital stock

5,095 million yen

Listed or unlisted

Unlisted

Parent company

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

Sompo Care Message Inc.

Sompo Care Message Inc. aims to offer an environment where
the elderly can continue living in the area to which they areaccustomed, even when they begin to require nursing care.
Sompo Care Message Inc. operates mid- to low-end facilities
under the Sompo no ie and Sompo no ie S brands mainly inTokyo, Osaka, Nagoya, and also elsewhere in Japan.

Headquarters location

Shinagawa Seaside east tower 12th floor, 4-12-8,
Higashishinagawa, Shinagawa-ku, Tokyo

Representative

President and Chief Executive Officer Ken Endo

FoundedMay 1997

Capital stock

3,925.16 million yen

Listed or unlisted

Unlisted

Parent company

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

AS PARTNERS Co., Ltd.

AS PARTNERS Co., Ltd. operates paid nursing homes and dayservice facilities under the ASHEIM brand in the Greater Tokyo
Area, based on the philosophy of “a rich life in your own way,with your own strength until the end.”

Headquarters location

Toho Twin Bldg. 6F, 1-5-2, Yurakucho, Chiyoda-ku,
Tokyo

Representative

Representative Director and President Takeshi Uemura

FoundedNovember 2004

Capital stock

40 million yen

Listed or unlisted

Unlisted31

IV Appendix

Overview of Operators
JAPAN LIFE DESIGN Inc.

JAPAN LIFEDESIGN Inc. operates paid nursing homes under the
GOOD TIME HOME brand in Tokyo. Including the facilities of theparent company SOUSEI JIGYOUDAN Co., Ltd. and its
subsidiaries, JAPAN LIFEDESIGN Inc. operates 31 facilities.

Headquarters location

Akasaka Enoki-zaka Mori Building 6th floor, 1-7-1,
Akasaka, Minato-ku, Tokyo

Representative

Representative Director and President Shoetsu Ito

FoundedApril 2004

Capital stock

340 million yen

Listed or unlisted

Unlisted

Parent company

SOUSEI JIGYODAN Co., Ltd.

MedicalCorporation
AIKOKAI

Medical Corporation AIKOKAI
Headquarters location 761 Kizaki, Kita-ku, Niigata-shi, Niigata

AIKOKAI is a medical corporation that belongs to NSG Group,
which broadly operates business in the fields of education andmedical/welfare, and operates hospitals, clinics, long-term carehealth facilities and such in Niigata prefecture. With the networkof “medical service/nursing care/welfare” established by NSG
Group, it provides necessary services seamlessly to suit the needs
and conditions of the elderly.

Representative

CEO Hiromu Ikeda

FoundedNovember 1993

Total Assets

1,547 million yen

Listed or unlisted

Unlisted32

IV Appendix

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

Appraisal company

Summary of Appraisal Report
Direct capitalization method

End of January 2017

DCF method

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

Discount rate（％）

Terminal
capitalization rate（％）

Appraisal NOI(million yen)
(Note 2)Difference(million yen)(A)-(B)

Appraisal value(million yen)
(B)

Rich Appraisal Institute Co., Ltd.

2,190

2,210

5.3

2,180

5.0

5.5

121

2,190

0

Bonsejour Chitose-funabashi

The Tanizawa Sogo Appraisal Co., Ltd.

974

993

4.4

966

4.5

4.6

49

974

0

Bonsejour Hino

The Tanizawa Sogo Appraisal Co., Ltd.

818

832

4.8

812

4.9

5.0

43

818

0

Bonsejour Musashi-shinjo

The Tanizawa Sogo Appraisal Co., Ltd.

643

653

5.1

638

5.2

5.3

36

643

0

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

The Tanizawa Sogo Appraisal Co., Ltd.

850

864

5.0

844

5.1

5.2

47

850

0

Medical Rehabilitation Home Bonsejour Komaki

The Tanizawa Sogo Appraisal Co., Ltd.

1,450

1,460

5.5

1,440

5.6

5.7

92

1,450

0

ASHEIM Hikarigaoka

Japan Real Estate Institute

1,570

1,590

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

1,620

+10

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate Institute

3,810

3,850

4.9

3,770

4.7

5.1

192

3,810

0

SOMPO CARE La vie Re Azamino

Japan Real Estate Institute

3,270

3,310

4.6

3,230

4.4

4.8

156

3,270

0

SAWAYAKA Tachibanakan

Japan Real Estate Institute

1,580

1,590

5.6

1,560

5.4

5.8

95

1,600

-20

SAWAYAKA Mekarikan

Japan Real Estate Institute

1,450

1,460

5.7

1,440

5.5

5.9

87

1,470

-20

SAWAYAKA Tagawakan

Japan Real Estate Institute

412

415

5.8

409

5.6

6.0

26

414

-2

GOOD TIME HOME Fudo-mae

Japan Real Estate Institute

1,940

1,970

4.4

1,910

4.2

4.6

92

1,940

0

Bonsejour Yotsugi

The Tanizawa Sogo Appraisal Co., Ltd.

886

902

4.7

879

4.8

4.9

48

886

0

Medical Home Bonsejour Itami

The Tanizawa Sogo Appraisal Co., Ltd.

557

566

5.1

553

5.2

5.3

36

557

0

Sompo no ie S Awajiekimae

Japan Real Estate Institute

2,170

2,190

5.2

2,150

5.0

5.4

116

2,170

0

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

27,54027,855

─27,271

─

─

1,465

27,572-32

AQUAMARINE Nishinomiyahama

Subtotal
Kobe Gakuentoshi Building (Happine Kobegakuentoshi)

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

4,530

4,590

4.6

4,500

4.4

4.8

226

Moriguchi-Sata Lagare

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

4,410

4,470

4.6

4,390

4.4

4.8

221

Happine Kobe Uozaki Nibankan

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

997

1,010

4.6

991

4.4

4.8

48

Granda Tsuruma-Yamato

The Tanizawa Sogo Appraisal Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

Smiling Home Medice Adachi

The Tanizawa Sogo Appraisal Co., Ltd.

2,390

2,420

4.8

2,370

4.9

5.0

119

AIKOEN ICHIBANKAN Building (AIKOEN ICHIBANKAN)

The Tanizawa Sogo Appraisal Co., Ltd.

849

850

5.3

848

5.4

5.5

45

Subtotal

14,236

14,410─

14,149

─

─

715

Total

41,77642,265

─

41,420

─

─

2,180

(Note 1) “Appraisal Value” is based on the appraisal report with July 31, 2017 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, 2017 as the appraisal dates, and is rounded down to the nearest million yen. The above
appraisal NOI is NOI obtained by direct capitalization method.

33

IV Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 5th Fiscal Period)(Unit: thousand yen)
Real estate lease business revenue
Property nameRent
revenue

Real estate lease business expenses

Otherrevenue

Propertytax

Outsourcing

Insurance
expenses

Repairexpenses

Depreciation
andamortization

Other

NOI
(Note 2)AQUAMARINE Nishinomiyahama

23,085

4,546

2,100

123

1,398

14,516400

60,361

Bonsejour Chitose-funabashi

5,514

1,774

224

61

─

3,048

404

21,405

Bonsejour Hino

4,999

1,208

213

47

─

3,130

400

19,496

Bonsejour Musashi-shinjo

4,038

981

167

41

─

2,447

400

16,199

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

8,351

1,835

213

84

─

5,817

400

21,130

Medical Rehabilitation Home Bonsejour Komaki

14,002

4,578

201

195

─

8,627

400

39,711ASHEIM Hikarigaoka

14,192

3,698

388

90

2,410

7,204

400

36,811ASHEIM Bunkyohakusan

10,212

2,487

388

67

─

6,868

400

36,488

SOMPO CARE La vie Re Machidaonoji

44,172

5,898

780

199

1,435

35,458400

96,118

SOMPO CARE La vie Re Azamino

30,413

4,678

780

146

695

23,712400

78,503SAWAYAKA Tachibanakan

26,002

2,671

1,140

169

─

21,621400

47,35325,460

3,013

1,140

108

─

20,798400

43,621

8,178

1,057

1,140

51

─

5,529

400

13,044

GOOD TIME HOME Fudo-mae

11,460

2,919

600

94

1,557

5,889

400

45,428

Bonsejour Yotsugi

4,956

996

223

49

─

3,286

400

20,647

Medical Home Bonsejour Itami

6,467

1,378

371

56

─

4,260

400

13,929

Kobe Gakuentoshi Building (Happine Kobegakuentoshi)

40,669

─

900

314

66

38,992396

123,822

Moriguchi-Sata Lagare

28,401

─

1,388

207

3,743

22,665396

114,263

Happine Kobe Uozaki Nibankan

8,208

─

1,200

49

124

6,438

396

25,729Granda Tsuruma-Yamato

5,036

─

618

82

173

3,766

396

28,986

Smiling Home Medice Adachi

7,566

─

493

83

90

6,568

330

52,246

AIKOEN ICHIBANKAN Building (AIKOEN ICHIBANKAN)

4,883

─

641

52

─

3,858

330

20,906

Sompo no ie S Awajiekimae

26,990

4,959

510

151

48

20,920400

58,388

Sompo no ie S Kobekamisawa

16,591

2,917

510

96

59

12,608400

36,306

379,857

51,604

16,3352,626

11,801

288,036

9,453

1,070,900

SAWAYAKA Mekarikan

Not disclosed(Note 1)SAWAYAKA Tagawakan

Total

1,162,722

1,157,067

5,654(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

34

IV Appendix

Details of Portfolio（As of the 5th Fiscal Period）
AQUAMARINE
Nishinomiyahama

Bonsejour Chitosefunabashi

Bonsejour Hino

BonsejourMusashi-shinjo

Medical Rehabilitation
Home Bonsejour
Hadanoshibusawa

Medical Rehabilitation
Home Bonsejour Komaki

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

3-1, Shiroyama,
Komaki-shi, Aichi

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

Ajioka Station
on Meitetsu Komaki Line

Construction
Completion

May 2007

March 1988

May 1990

February 1985

July 1991

March 1991

Site area

2,587.93 m²

1,020.92 m²

2,211.28 m²

1,233.49 m²

2,588.04 m²

8,229.85 m²

Leasable area

5,157.26 m²

2,342.17 m²

1,984.17 m²

1,710.43 m²

3,435.79 m²

8,858.49 m²

Type

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Housing type paid nursing home

Structure/No. of floor(Note 1)

RC,5F

RC, B1F/6F

RC, 3FRC, 4FRC, 5F

SRC, 10F

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

124 rooms, 165 people

Operator

GREEN LIFE

Benesse style Care

Benesse style Care

Benesse style Care

Benesse style Care

Benesse style Care

Remaining years oflease agreement(Note 2)19.8 years

8.8 years

8.8 years

9.3 years

9.8 years

9.8 years

Appraisal NOI(Note 3)121 million yen

49 million yen

43 million yen

36 million yen

47 million yen

92 million yen

Appraisal NOI yield(Note 3)

6.2%

5.9%

6.0%

6.2%

6.4%

7.3%

Appraisal Value(Note 3)

2,190 million yen

974 million yen

818 million yen

643 million yen

850 million yen

1,450 million yen

Acquisition Price

1,950 million yen

824 million yen

724 million yen

582 mullion yen

728 million yen

1,270 million yen(Note 1) 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 2) Figures in Remaining years of lease agreement are as of July 31, 2017.
(Note 3) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2017.

35

IV Appendix

Details of Portfolio（As of the 5th Fiscal Period）
ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

Sompo CARE La vie Re
Machidaonoji

Sompo Care La vie Re
AzaminoSAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

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

173-15, Oaza Ryugeji, Hakata-ku,
Fukuoka-shi, Fukuoka

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

Nakagawa Station on
Yokohama Municipal Subway Blue Line

Sasahara Station on
JR Kagoshima Honsen Line

Mojiko Station on
JR Kagoshima Honsen Line

1612, Onojimachi, Machida-shi,Tokyo

Location

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

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

1612, Onojimachi,
Machida-shi, Tokyo

Nearest Station

Shakujii-koen Station on
Seibu Ikebukuro Line

Hakusan Station on
Toei Subway Mita Line

Construction
Completion

March 2006

February 2007

October 2007

March 2004

October 2005

November 2005

Site area

2,868.46 m²

540.29 m²

7,404.13 m²

2,748.64 m²

3,359.66 m²

3,758.26 m²

Leasable area

3,628.60 m²

2,494.78 m²

7,720.17 m²

5,789.25 m²

5,652.94 m²

4,720.46 m²

Type

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Structure/No. of floor(Note 1)RC, 3FRC, 8F

RC, B1F/6F

RC, B1F/5F

RC, B1F/6F

RC, 4F

No. of Rooms/Resident Capacity

83 rooms, 89 people

50 rooms, 52people

163 rooms, 169 people

145 rooms, 145 people

104 rooms, 104 people

95 rooms, 95 people

Operator

AS PARTNERS

AS PARTNERS

Sompo Care Next

Sompo Care Next

Sawayaka Club

Sawayaka Club

Remaining years oflease agreement(Note 2)

16.6 years

9.6 years

10.2 years

9.9 years

10.5 years

10.5 years

Appraisal NOI(Note 3)76 million yen

73 million yen

192 million yen

156 million yen

95 million yen

87 million yen

Appraisal NOI yield(Note 3)

5.5%

5.1%

5.3%

5.1%

6.2%

6.3%

Appraisal Value(Note 3)

1,570 million yen

1,630 million yen

3,810 million yen

3,270 million yen

1,580 million yen

1,450 million yen

Acquisition Price

1,385 million yen

1,430 million yen

3,580 million yen

3,050 million yen

1,520 million yen

1,380 million yen

Keio Nagayama
Station on Keio
Sagamihara Line

Odakyu Nagayama
Station on Odakyu
Tama Line(Note 1) 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 2) Figures in Remaining years of lease agreement are as of July 31, 2017.
(Note 3) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2017.

36

IV Appendix

Details of Portfolio（As of the 5th Fiscal Period）
SAWAYAKA
Tagawakan

GOOD TIME HOME Fudo-mae

Bonsejour Yotsugi

Medical home Bonsejour Itami

Sompo no ie S Awajiekimae

Sompo no ie S Kobekamisawa

Location393-1, Oaza Ita,
Tagawa-shi, Fukuoka

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

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

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

Nearest Station

Magarikane Station on
Heisei Chikuho Railway Tagawa Line

Fudo-mae Station on
Tokyu Meguro Line

Yotsugi Station on
Keisei Railway Oshiage Line

Hankyu Itami Station on
Hankyu Railway Itami Line

Awaji Station on
Hankyu Railway Kyoto and Senri
LinesKamisawa Station on
Kobe Municipal Subway SeishinYamate Line

Construction
Completion

January 2006

March 1992

March 1989

March 1989

June 2009

June 2009

Site area

4,300.90 m²

1,206.60 m²

1,136.46 m²

1,976.11 m²

1,251.26 m²

743.22 m²

Leasable area

2,366.20 m²

3,400.20 m²

1,962.89 m²

2,129.87 m²

5,658.53 m²

3,626.25 m²

Type

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Housing type paid nursing homeServiced housing for the elderly

Serviced housing for the elderly

Structure/No. of floor(Note 1)RC, 3F

RC（S in part）, B1F/5F

RC, 5F

SRC, 11F

RC, 12F

S, 9F

No. of Rooms/Resident Capacity

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

62 rooms, 64 people

137 rooms, 137 people (Note 4)

85 rooms, 85 people

Operator

Sawayaka ClubJAPAN LIFE DESIGN

Benesse Style Care

Benesse Style Care

Sompo Care Message

Sompo Care Message

Remaining years oflease agreement(Note 2)10.5 years

9.3 years

8.4 years

9.8 years

17.0 years

17.0 years

Appraisal NOI(Note 3)26 million yen

92 million yen

48 million yen

36 million yen

116 million yen

72 million yen

Appraisal NOI yield(Note 3)

6.6%

5.3%

5.8%

7.1%

6.0%

6.0%

Appraisal Value(Note 3)412 million yen

1,940 million yen

886 million yen

557 million yen

2,170 million yen

1,340 million yen

Acquisition Price

390 million yen

1,740 million yen

824 million yen

514 million yen

1,930 million yen

1,200 million yen(Note 1) 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 2) Figures in Remaining years of lease agreement are as of July 31, 2017.
(Note 3) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2017.
(Note 4) The number of rooms as serviced housing for the elderly is 136 rooms.

37

IV Appendix

Details of Portfolio（As of the 5th Fiscal Period）
Kobe Gakuentoshi Building(Happine Kobegakuentoshi)

Moriguchi-Sata Lagare

Happine Kobe Uozaki Nibankan

Granda Tsuruma-Yamato

Smiling Home Medice Adachi

AIKOEN ICHIBANKAN Building(AIKOEN ICHIBANKAN)

Location

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

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

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

Nearest Station

Gakuentoshi Station on
Kobe Municipal Subway SeishinYamate Line

Dainichi Station on Osaka Municipal
Subway Tanimachi Line and Osaka
Monorail

Uozaki Station on
Hanshin Electric Railway

Tsuruma Station on
Odakyu Enoshima Line

Rokucho Station on
Tsukuba Express

Niigata Station on
JR Shinetsu Main Line

Construction
Completion

January 2009

September 2006

March 2010

March 1998

November 2005

February 2010

Site area

2,742.81 m²

5,872.83 m²

933.33 m²

2,877.11 m²

2,069.41 m²

2,597.52 m²

Leasable area

12,636.48 m²

8,356.85 m²

1,772.89 m²

3,427.08 m²

3,870.98 m²

4,311.20 m²

Type

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Paid nursing homewith care service

Structure/No. of floor(Note 1)

RC, B1F/9F

SRC, 9F

S, B1F/4F

RC (S in part), 5F

RC, 4F

S, 5F

No. of Rooms/Resident Capacity

128 rooms, 138 people

155 rooms, 189 people

47 rooms, 47 people

73 rooms, 90 people

82 rooms, 82 people

90 rooms, 90 people

Operator

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse Style Care

GREEN LIFE HIGASHINIHON Co., Ltd.

Medical Corporation AIKOKAI

Remaining years oflease agreement(Note 2)23.6 years

12.2 years

23.6 years

4.6 years

19.5 years

19.0 years

Appraisal NOI(Note 3)226 million yen

221 million yen

48 million yen

53 million yen

119 million yen

45 million yen

Appraisal NOI yield(Note 3)

5.2%

5.3%

5.2%

5.3%

5.3%

5.9%

Appraisal Value(Note 3)4,530 million yen

4,410 million yen

997 million yen

1,060 million yen

2,390 million yen

849 million yen

Acquisition Price

4,320 million yen

4,150 million yen

930 million yen

1,000 million yen

2,253 million yen

770 million yen(Note 1) 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 2) Figures in Remaining years of lease agreement are as of July 31, 2017.
(Note 3) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2017.

38

IV Appendix

Balance Sheet （As of the End of the 5th Fiscal Period）
4th Fiscal Period(Ended Jan. 2017)(thousand yen)(A)

5th Fiscal Period(Ended July 2017)(thousand yen)
(B)

Changefrom previous period(thousand yen)(B)-(A)

Assets

4th Fiscal Period(Ended Jan. 2017)(thousand yen)(A)

2,050,259

2,627,424+577,164

Current liabilities

Cash and deposits

1,977,537

2,436,139+458,602

Operating accounts payable

Cash and deposits in trust

38,17040,237+2,067

Prepaid expenses

7,266,229

8,349,727+1,083,498

26,6359,426-17,209

Short-term loans payable

1,000,000

1,000,0000Current portion of long-termloans payable

6,000,000

7,000,000+1,000,000

Accounts payable - other

17,91347,581+29,667

Accrued expenses

93,785103,030+9,244

855

901

+46

1,408

－

-1,408Advances received

120,536

188,714+68,178

Deposits received

5,094

72

-5,021

Non-current liabilities

7,631,259

13,674,371+6,043,112

Long-term loans payable

7,000,000

12,700,000+5,700,000

631,259

965,059+333,800－

9,104+9,104

－

208

+208

14,897,489

22,024,099+7,126,610

Unitholders’ equity

13,007,637

20,321,556+7,313,919

Unitholders’ capital

12,713,600

19,800,696+7,087,096

294,037

520,859+226,822

Total net assets

13,007,637

20,321,556+7,313,919

Total liabilities and net assets

27,905,126

42,345,656+14,440,529

34,53972,813+38,273

Consumption taxes refund
receivable－

78,218+78,218

Deferred tax assets

12

14

+2

Non-current assets

25,842,891

39,686,871+13,843,980

Income taxes payable

Property, plant andequipment

25,822,300

39,563,150+13,740,849

Accrued consumption taxes

Buildings in trust

13,874,146

20,178,744+6,304,597

Structures in trust

47,77055,958+8,188

Machine and device in trust

7,155

6,794

-360

Tools, furniture and fixtures in
trust

2,106

8,354

+6,247

11,891,121

19,313,297+7,422,176

Intangible assets

5,712

4,802

-909

Investments and other assets

14,878

118,919+104,040

Other

Deferred assets

11,97431,359+19,385

Total liabilities

27,905,126

42,345,656+14,440,529

Total assets

Changefrom previous period(thousand yen)(B)-(A)

Liabilities

Current assets

Land in trust

5th Fiscal Period(Ended July 2017)(thousand yen)
(B)

Tenant leasehold and security
deposits
Tenant leasehold and security
deposits in trust

Net assets

Surplus39

IV Appendix

Statement of Income for the 5th Fiscal Period
4th Fiscal Period(Ended Jan. 2017)(thousand yen)(A)
Operating revenue

Comparison with previous fiscal period

5th Fiscal Period(Ended July 2017)(thousand yen)
(B)

Change(thousand yen)(B)-(A)（B）-（A）（A）（％）

784,304

1,162,722+378,418+48.2

779,420

1,157,067+377,647

+48.5

4,883

5,654

+770

+15.8

430,223

535,053+104,830+24.4

Expenses related to rent business

284,233

379,857+95,624+33.6

Asset management fee

77,58583,495+5,910+7.6

Asset custody fee

1,392

1,964

+571

+41.1

Administrative service fees

11,387

13,563+2,175+19.1

Directors’ compensations

3,000

3,000

0

0

Property tax

12,504

13,522+1,017+8.1

Lease business revenue
Other lease business revenue
Operating expenses

Other operating expenses

40,11939,650-469-1.2

354,080

627,668+273,587+77.3

Non-operating income

8

9

0

+10.2

Interest income

8

9

0

+10.2

Non-operating expenses

59,267

105,934+46,666+78.7

Interest expenses

24,84053,925+29,085+117.1

Investment unit issuance expenses

5,526

10,509+4,982+90.1

Borrowing related expenses

28,90041,499+12,599+43.6

Ordinary income

294,821521,743+226,921+77.0

Income before income taxes

294,821521,743+226,921+77.0

Operating income

Total income taxes

858

900

+42

+4.9

Income taxes - current

856

903

+46

+5.4

Income taxes - deferred

2

-2

-4

-206.0293,962

520,842+226,879

+77.2

74

17

-57

-76.6

294,037

520,859+226,822+77.1

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

40

IV Appendix

Information related to Investment Units (As of the end of 5th fiscal period)
Attributes of unitholders (Note 1)
3rd FP(Ended July 2016)
Number of investment
units by holder

Number ofinvestment
units(units)List of top unitholders (Note 2)

4th FP(Ended January 2017)

Ratio
(%)

Number ofinvestment
units(units)Ratio(%)

5th FP(Ended July 2017)
Number ofinvestment
units(units)58,441

48.4

57,06547.3

93,701

48.5

Financial institutions

41,952

34.8

42,78635.5

70,743

36.6

Major city banks, etc.

4,000

3.3

4,000

3.3

4,000

2.0

Regional banks

4,208

3.4

3,179

2.6

2,008

1.0

24,932

20.6

27,50222.8

54,021

27.9

Life insurance companies

1,322

1.0

1,322

1.0

1,322

0.6

Shinkin banks

5,999

4.9

5,986

4.9

8,031

4.1

Others

1,491

1.2

797

0.6

1,361

0.7

Securities companies

1,588

1.3

1,590

1.3

2,314

1.1

Other companies

14,68412.1

14,49312.0

16,381

8.4

Foreign individuals, etc.

3,835

3.1

4,566

3.7

9,968

5.1

120,500

100.0

120,500

100.0

193,107

100.0

Total

3rd FP(Ended July 2016)
Number of unitholders
by holder

Individuals, etc.
Financial institutions
Major city banks, etc.
Regional banks
Trust banks

Number ofunitholders(persons/
companies)

4th FP(Ended January 2017)

Ratio
(%)

Number ofunitholders(persons/
companies)

Ratio
(%)

5th FP(Ended July 2017)
Number ofunitholders(persons/
companies)

Ratio
(%)

9,877

96.7

9,800

96.8

13,917

97.5

49

0.4

47

0.4

50

0.3

1

0.0

1

0.0

1

0.0

10

0.0

9

0.0

7

0.0

6

0.0

9

0.0

9

0.0

1

0.0

1

0.0

1

0.0

Shinkin banks

21

0.2

19

0.1

19

0.1

Others

10

0.0

8

0.0

13

0.0

Securities companies

24

0.2

23

0.2

20

0.1

Other companies

203

1.9

183

1.8

223

1.5

Life insurance companies

Foreign individuals, etc.
Total

Number ofinvestment
units owned(units)Ownership
ratio
(%)

１

Japan Trustee Services Bank Ltd.
(Trust Account)

22,909

11.86

２

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

17,047

8.82

３

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

9,076

4.69

４

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

4,392

2.27

NEC Capital Solutions Limited

4,000

2.07

SHIP HEALTHCARE HOLDINGS INC.

4,000

2.07

Sumitomo Mitsui Banking Corporation

4,000

2.07

８

Yamato Shinkin Bank

2,000

1.03

９

STATE STREET BANK AND TRUST COMPANY 505012

1,945

1.00

10

DEUTSCHE BANK AG, LONDON 610

1,768

0.91

71,137

36.83

Ratio
(%)

Individuals, etc.

Trust banks

Name

Ranking

53

0.5

65

0.6

61

0.4

10,206100.0

10,118100.0

14,271

100.0

5

Total

(Note 1) Ratios and Ownership ratios in the tables are rounded down to the first decimal place.
(Note 2) Ratios and Ownership ratios in the table are rounded down to the second decimal place.

41

IV Appendix

Changes in Unit Price
Changes in Unit Price and Trade Volume(unit)(yen)

180,000

出来高（右軸）
Trade Volume (right axis)

10,000170,000

HCM’s Unit Price (left axis)
HCM投資口価格(左軸)9,000

160,000

8,000

150,000

7,000

140,000

6,000

130,000

5,000

120,000

4,000

110,000

3,000

100,000

2,000

90,0001,000

80,000平成27年3月

Mar. 2015

平成27年6月

June 2015

平成27年9月

Sept. 2015

平成27年12月

Dec. 2015

平成28年3月

Mar. 2016平成28年6月

June 2016平成28年9月

Sept. 2016

Relative Comparison of Unit Price and TSE REIT Index (2017)平成28年12月

Dec. 2016

平成29年3月

Mar. 2017平成29年6月(unit)

出来高（右軸）
Trade Volume (right axis)

105

10,000

HCM投資口価格（左軸）HCM’s Unit Price (left axis)

9,000

東証REIT指数（左軸）TSE REIT Index (left axis)

1000June 2017

8,000
7,000
6,000

95

5,000
4,000

90

3,000
2,000

85

1,000
80

平成29年1月

Jan. 2017平成29年2月

Feb. 2017平成29年3月

Mar. 2017(Note) Unit price and TSE REIT index are indexed with January 4, 2017 as 100.

平成29年4月

Apr. 2017平成29年5月

May 2017

平成29年6月

June 2017平成29年7月

July 2017平成29年8月

Aug. 2017

042

IV Appendix

Overview of Unitholder Special Benefit Plan

Sompo Care Next Inc.
• Discount advance payment ormonthly fee• Tour with free lunch

Sompo Care Message Inc.

• Discount monthly fee(rent, management fees, etc.)

Benesse Senior Support Co., Ltd.
JAPAN LIFE DESIGN Inc.
• Free trial move-in(two-days and one-night with meals)• Discount upfront entrance fees

GREEN LIFE HIGASHI NIHON Co., Ltd.
GREEN LIFE Co., Ltd.
• Free trial move-in(two-days and one-night with meals)• Tour with free lunch

Sawayaka Club Co., Ltd.
• Discount monthly fee for initial month• Free trial move-in(two-days and one-night with meals)• Tour with free lunch(Note) Details of special benefits are for people who are unitholders as of the end of 5th fiscal period and are subject to change.

(Benesse’s consultation room for nursing care)• Free consultation on nursing care

Sompo Care Message Inc.
• Discount upfront entrance fees
• Discount monthly fee(management fees)• Free trial move-in(four-days and three-nights)• Tour with free lunch

43

IV Appendix

HCM’s Network

Sponsors
Sumitomo Mitsui Finance and Leasing
SMBC Friend Securities
GinsenAsset Custody Company
Administrative Agent
Administrator of theUnitholders’ Registry

Muromachi Building
Yoei
Kobe Tochi Tatemono

Sponsor Support Agreement
Support Companies

Sumitomo Mitsui TrustBank
Accounting Auditor

PricewaterhouseCoopers
Aarata LLC

Healthcare & Medical
Investment Corporation

Asset
Management

Pipeline Support
Agreement

SMBC Trust BankRISA Partners
Max-Realty
Orion, etc.

Asset Management Company
Healthcare AssetManagement Co., Ltd.

・Provide professional know-how
・Provide human resources
・Provide property information, etc.

44

IV Appendix

Profile of Asset Management Company
Profile of Asset Management 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
SHIP HEALTHCARE HOLDINGS, INC. (33.3%)

Structure of Asset Management Company

General Meeting of
Shareholders
Audit & Supervisory
Board Member

Board of Directors

Management Committee

Compliance Committee

NEC Capital Solutions Limited (33.3%)
Major shareholders

Sumitomo Mitsui Banking Corporation (5.0%)

Representative Director

Sumitomo Mitsui Finance and Leasing Company, Limited (4.8%)
SMBC Friend Securities Co., Ltd. (4.8%)

Internal Audit OfficeCompliance Office

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)

Investment
Department

Asset Management
Department

Financial & Administration
Department

License as an entrusted agency services for transactions(Minister of Land, Infrastructure, Transport and Tourism No. 85)

45

IV Appendix

Profile of Major Sponsors

SHIP HEALTHCARE HOLDINGS, INC.
With a stated mission to “create an environment of people protecting life,”
SHIP HEALTHCARE HOLDINGS, INC. carries out a wide-range of nursing
care and medical service-related businesses in four domains on a groupbasis: the Lifecare Business, in which it operates paid nursing homes; theTotal Pack Produce Business, in which it offers comprehensive, optimal
solution services to meet the needs for hospital launch/relocation andbuilding 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.

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

Sales

408.4 billion yen on a consolidated basis(fiscal period ended March 2017)

NEC Capital Solutions
Headquarters location 2-15-3 Konan, Minato-ku, Tokyo

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

Representative

President Tomoo Imazeki

FoundedNovember 1978

Capital stock

3,776.88 million yen

Sales

215.7 billion yen on a consolidated basis(fiscal period ended March 2017)

Sumitomo Mitsui Banking
Headquarters location 1-1-2 Marunouchi, Chiyoda-ku, TokyoAs the core company of the Sumitomo Mitsui Financial Group, SMBC
possesses one of the strongest sales foundations in Japan as well as theability to execute strategies quickly, and is capable of providing financial
services through its influential group companies.

Representative

President Makoto Takashima

Capital stock

1,770.9 billion yen

46

Disclaimer
This presentation material contains forward-looking statements including forecasts, outlooks, goals
and plans. These statements are based on the information available as of the date when this material
is prepared (September 15, 2017) 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.

47