14th Fiscal Period
Semi-Annual Reportfrom August 1, 2021 to January 31, 2022

Healthcare & Medical Investment Corporation

To Our Unitholders
We would like to express our sincere gratitude for your continued support.
We are pleased to report on the management status of Healthcare & Medical Investment Corporation (hereinafter,“HCM”) for the 14th fiscal period (August 1, 2021, to January 31, 2022).
For the fiscal period under review, HCM recorded operating revenue of 2,080 million yen, operating income of 1,072
million yen, ordinary income of 913 million yen, and net income of 913 million yen. As a result, distributions per unit
was 3,244 yen (including distributions in excess of earnings), surpassing the forecast announced on September 14,
2021. For the 15th fiscal period, distributions per unit of 3,347 yen (including distributions in excess of earnings) is
forecast due to the new acquisition of 10 properties made through public offering.
Ever since its listing, HCM has aimed to realize a society where all people can live vibrantly and with peace of mind
through its continuous investment in and stable ownership of facilities and housing for the elderly and healthcare,facilities such as medical service-related facilities, which are expected to see further growth in demand in line withthe continued aging of society, over the long term.
Although the spread of COVID-19 has not ended in Japan and the situation still calls for caution, the impact on HCM’s
performance at this point in time is minimal.
In the next fiscal period onward, we will continue to work to maximize unitholder value through continuous growthof our portfolio and securement of stable income based on fixed-rent long-term lease contracts with excellent
operators and by proactively leveraging the specialized capabilities and know-how in the areas of “nursing care andmedical service,” “fund management,” and “finance” possessed by our main sponsors, SHIP HEALTHCARE HOLDINGS,
INC., NEC Capital Solutions Limited, and Sumitomo Mitsui Banking Corporation. We appreciate your continued
support and patronage.

Yuji Fujise

Executive Director
Healthcare & Medical Investment Corporation- 1 -Overview of Asset Management
1. Investment Performance of HCM
Operation Results and Financial Positions
By fiscal period
Operating revenue(millions of yen)
[Operating revenue from real
(millions of yen)estate leasing business]
Operating expenses(millions of yen)
[Operating expenses from real
(millions of yen)estate leasing business]
Operating income(millions of yen)
Ordinary income(millions of yen)
Net income(millions of yen)
Total assets(millions of yen)[Comparison with the previous(%)
fiscal period]
Net assets(millions of yen)[Comparison with the previous(%)
fiscal period]
Interest-bearing debts(millions of yen)
Unitholders' capital, net (Note 4)(millions of yen)
Total number of investment units(units)issued and outstanding
Net asset value per unit (NAV)(yen)
Total distributions(millions of yen)
Distributions per unit(yen)[Distributions of earnings per unit](yen)[Allowance for temporary(yen)difference adjustments per unit][Distributions in excess of earnings(yen)
per unit from other distributions]
Ratio of ordinary income to total(%)
assets (Note 5)[Annualized](%)
Return on equity (Note 5)(%)[Annualized](%)
Equity ratio at end of period (Note 5)(%)[Changes from the previous fiscal
period]Dividend payout ratio (Note 5)(%)
Other Reference Information
Number of operation days
(days)
Number of investment properties at(properties)
end of period
Depreciation (Note 6)(millions of yen)
Capital expenditures (Note 7)(millions of yen)
NOI (Net operating income) (Note 5)(millions of yen)
FFO (Funds from operation) (Note 5)(millions of yen)
FFO per unit (Note 5)(yen)
LTV (Loan to value) (Note 5)(%)

10th fiscal
period11th fiscal
period12th fiscal
period13th fiscal
period14th fiscal
periodFrom: Aug. 1 2019
To: Jan. 31 2020

From: Feb. 1 2020
To: Jul. 31 2020

From: Aug. 1 2020
To: Jan. 31 2021

From: Feb. 1 2021
To: Jul. 31 2021

2,013

2,023

2,058

2,073

2,080

909

951

990

994

1,007

2,013

2,023

2,058

2,073

From: Aug. 1 2021
To: Jan. 31 2022

2,080

601

652

678

690

701

1,103
944
943
68,223

1,072
918
917
68,854

1,067
910
910
68,773

1,078
922
921
68,883

1,072
913
913
68,778

(0.1)

0.9

(0.1)

0.2

(0.2)

33,234

33,11233,00032,96432,867

(0.6)

(0.4)

(0.3)

(0.1)

(0.3)

32,45032,33033,15032,24233,15032,15233,15032,05833,15031,964

311,001

311,001

311,001

311,001

311,001

106,863
1,032
3,320
3,027

106,472
1,007
3,240
2,928

106,111
1,003
3,226
2,880

105,995
1,015
3,266
2,962

105,681
1,008
3,244
2,936

8

23

46

－

－

285

289

300

304

308

1.4

1.3

1.3

1.3

1.3

2.7
2.8
5.6
48.7

2.7
2.8
5.5
48.1

2.6
2.8
5.5
48.0

2.7
2.8
5.6
47.9

2.6
2.8
5.5
47.8

(0.2)

(0.6)

(0.1)

(0.1)

(0.1)

99.8

99.2

98.4

100.0

100.0

184

182

184

181

184

35

36

36

37

37

443
188
1,856
1,387
4,461
47.6

451
82
1,822
1,369
4,401
48.1

467
194
1,847
1,377
4,430
48.2

474
167
1,855
1,395
4,486
48.1

479
128
1,858
1,392
4,478
48.2

(Note 1)
(Note 2)
(Note 3)(Note 4)

HCM’s operating period is six months per fiscal period, from February 1 to July 31 and from August 1 to January 31 of the following year.
Operating revenue does not include consumption taxes.
Unless otherwise stated, all amounts are rounded down to the nearest unit, and all percentages are rounded to the first decimal place.
The figure indicates the amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital. The amount does not take into accountthe change in unitholders’ capital in line with the implementation of distributions in excess of earnings of allowance for temporary difference adjustments.
(Note 5) The following formulas are used in calculation of their respective target values.

Ratio of ordinary income to total assets Ordinary income / [(Total assets at beginning of period + Total assets at end of period) / 2] × 100
Return on equity
Net income / [(Net assets at beginning of period + Net assets at end of period) / 2] × 100
Equity ratio at end of period
Net assets at end of period / Total assets at end of period × 100
Dividend payout ratio = Distributions per unit (not including distributions in excess of earnings) / Net income per unit ×
Dividend payout ratio
100
Real estate leasing business revenue - Real estate leasing business expenses + Depreciation for investment and leasing
NOI (Net operating income)properties
Net income + Depreciation (For the 10th fiscal period, depreciation for investment and leasing properties) – Gain or loss
FFO (Funds from operation)
on sales of real estate
FFO per unit
FFO / Total number of investment units issued and outstanding
LTV (Loan to value)Interest-bearing debts / Total assets at end of period × 100(Note 6) For the 10th fiscal period, only depreciation for investment and leasing properties is shown.
(Note 7) Capital expenditures for investment and leasing properties are shown.

- 2 -2. State of Asset Management in the Period(1) Brief History of HCM

HCM was established under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as
amended; hereinafter, the “Investment Trust Act”) with Healthcare Asset Management Co., Ltd. (hereinafter, the “AssetManagement Company” or “HAM”) as the organizer on December 9, 2014. HCM was listed on the Real Estate
Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, the “Tokyo Stock Exchange”) on March
19, 2015 (securities code: 3455).
The total number of investment units issued and outstanding as of the end of the fiscal period ended January 2022
(August 1, 2021 to January 31, 2022) (hereinafter, the “14th fiscal period” or the “current fiscal period”) stands at
311,001 units.

(2) Investment Environment and Performancea. Investment Environment
HCM was established against the background of a social situation in which expansion and enhancement of nursing careservices and medical services by healthcare facilities has become an urgent issue, at a time when the population thatbears nursing care continues to shrink while aging advances at the fastest rate among developed nations and thenumber and percentage of the elderly among the total population is expected to remain on the rise for the time being.
The government has also set a target in “Housing Life Basic Plan (nationwide plan)” to increase the ratio of housing
supply for the elderly from 2.5% in 2018 to 4% in 2030.
HCM invests in and owns healthcare facilities, for which social demand is growing, in a stable manner to promote
appropriate maintenance/management and new supply of such facilities. By doing so, HCM seeks to realize a society
where all people can live vibrantly and with peace of mind, as well as to secure stable income and to achieve steady
growth of its portfolio.

b. Performance
During the current fiscal period, HCM made no acquisitions or transfers of assets.
As of the end of the current fiscal period, HCM owns 37 properties with a total leasable area of 187,918.74 m2, andthe operational rate stands at 100.0%.
The Japanese economy is expected to remain in a severe situation for some time given the spread of the coronavirus
disease 2019 (COVID-19). Uncertainty still continues in the real estate market, especially around retail facilities andhotels. However, COVID-19 has had no negative impact on the performance of HCM as of the end of the current fiscal
period, as HCM has generally concluded long-term and fixed-rent lease agreements with the operators of the healthcare
facilities it owns. Moreover, there has been no rent reduction/exemption or deferment of rent payment with thetenants. Nevertheless, it is unpredictable whether COVID-19 will spread further, and close attention must continue tobe paid to how the situation will evolve going forward.

(3) Overview of Financing

HCM upholds stable financial management as its basic policy for securing stable income and maintaining and enhancing
asset value over the medium to long term.
In the current fiscal period, HCM refinanced 7,000 million yen in loans due for repayment on January 31, 2022.
As a result, unitholders’ capital (net) (Note) at the end of the current fiscal period stands at 31,964 million yen, thetotal number of investment units issued and outstanding at 311,001 units, and total interest-bearing liabilities at 33,150
million yen.
(Note)

The figure indicates the amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital. The amount does not take into
account the change in unitholders’ capital in line with the implementation of distributions in excess of earnings of allowance for temporary difference
adjustments.

As of the end of the current fiscal period, the ratio of LTV” is 48.2%.
HCM’s rating as of January 31, 2022 is as follows.
Rating Agency

Rating Category

RatingOutlookJapan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating

A (single-A)

Positive- 3 -(4) Overview of Business Performance and Distributions

As a result of the management described above, for the current fiscal period, operating revenue stood at 2,080 million
yen, operating income at 1,072 million yen, ordinary income at 913 million yen and net income at 913 million yen.
In accordance with the cash distributions policy described in Article 36, Paragraph 1 of its Articles of Incorporation,
HCM determines that the amount of distributions shall exceed the amount equivalent to 90% of its distributable profit
as stipulated in Article 67-15 of the Act on Special Measures Concerning Taxation, and shall be up to its profits as definedin Article 136, Paragraph 1 of the Investment Trust Act. Following this policy, HCM has decided that it shall distribute
913,098,936 yen as the distributions of earnings, which is roughly the entire amount arrived at after deducting thereversal of allowance for temporary difference adjustments (as defined in Article 2, Paragraph 2, Item (30) of the
Calculation Rules for Investment Corporations) from profits as defined in Article 136, Paragraph 1 of the Investment
Trust Act. Accordingly, the distributions of earnings per unit were 2,936 yen.
Furthermore, in accordance with the policy for cash distributions in excess of earnings provided in Article 36,
Paragraph 2 of its Articles of Incorporation, HCM is to its distributions in excess of earnings (return of capital that falls
under the category of distributions reducing unitholders’ capital for tax purposes) in each period on a continuous basis,
as a rule. During the current fiscal period, HCM decided to distribute 95,788,308 yen, an amount roughly equivalent to
20% of depreciation recorded in the current fiscal period, as distributions in excess of earnings. Accordingly, distributions
in excess of earnings per unit (of distributions in excess of earnings from other distributions) came to 308 yen.
As a result, distributions per unit came to 3,244 yen.
(Note 1) Distributions in excess of earnings are distributed up to the amount equivalent to 20% of the depreciation recorded in the accounting period immediately
before the accounting period when HCM will pay said distributions, sufficiently taking into consideration the amount of capital expenditures necessary for
maintaining and improving the competitiveness of HCM’s assets under management, the financial position of HCM and other factors.
However, distributions in excess of earnings may be conducted up to an amount lower than the above amount or may not be conducted when theimplementation of distributions in excess of earnings up to the said amount is judged to be inappropriate based on the economic environment surrounding
HCM, trends of the real estate market and leasing market, status of HCM’s assets under management and financial conditions.
(Note 2) Under the rules of The Investment Trusts Association, Japan (hereinafter, “The Investment Trusts Association”), closed-end investment corporations are allowed
to conduct their distributions in excess of earnings up to an amount equivalent to 60% of the depreciation recorded on the last day of the accounting period.

3. Status of Capital Increases
Changes in the total number of investment units issued and outstanding and unitholders’ capital over the past five years
are as follows.
Date

February 01, 2017
March 01, 2017
February 01, 2019
February 27, 2019
April 19, 2019

October 18, 2019

April 21, 2020

October 21, 2020

April 21, 2021

October 21, 2021

Notes
Capital increase
through public
offering
Capital increase
through third-party
allotment
Capital increase
through public
offering
Capital increase
through third-party
allotment
Distributions inexcess of earnings(refund ofinvestment)
Distributions inexcess of earnings(refund ofinvestment)
Distributions inexcess of earnings(refund ofinvestment)
Distributions inexcess of earnings(refund ofinvestment)
Distributions inexcess of earnings(refund ofinvestment)
Distributions inexcess of earnings(refund ofinvestment)

Total number ofinvestment units issued
and outstanding (units)
Increase
Balance(Decrease)

Unitholders’ capital(millions of yen)

Unitholders’ capital (net)(millions of yen) (Note 1)

Increase(Decrease)

Balance

Increase(Decrease)

Remarks

Balance69,150189,650

6,749

19,463

6,749

19,463(Note 2)

3,457

193,107337

19,800337

19,800(Note 3)112,280

305,387

12,07631,876

12,07631,876(Note 4)

5,614

311,001603

32,480603

32,480(Note 5)－

311,001－

32,480(62)

32,417(Note 6)－

311,001－

32,480(87)

32,330(Note 7)－

311,001－

32,480(88)

32,242(Note 8)－311,001－

32,480(89)

32,152(Note 9)－311,001－

32,480(93)

32,058(Note 10)－311,001－

32,480(94)

31,964(Note 11)- 4 -(Note 1) The figure indicates the amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital. The amount does not take into
account the change in unitholders’ capital in line with the implementation of distributions in excess of earnings of allowance for temporary difference
adjustments.
(Note 2) New investment units were issued through public offering with issue price of 101,244 yen (paid-in amount of 97,609 yen) per unit.
(Note 3) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 97,609 yen per unit.
(Note 4) New investment units were issued through public offering with issue price of 111,442 yen (paid-in amount of 107,555 yen) per unit.
(Note 5) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 107,555 yen per unit.
(Note 6) HCM resolved at the board of directors’ meeting held on March 15, 2019, to set cash distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) at 326 yen per unit as cash distributions for the 8th fiscal period (fiscal period ended
January 2019), and started the payout on April 19, 2019.
(Note 7) HCM resolved at the board of directors’ meeting held on September 13, 2019, to set cash distributions in excess of earnings (return of capital that falls under
the category of distributions reducing unitholders’ capital for tax purposes) at 280 yen per unit as cash distributions for the 9th fiscal period (fiscal period ended
July 2019), and started the payout on October 18, 2019.
(Note 8) HCM resolved at the board of directors’ meeting held on March 17, 2020, to set cash distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) at 285 yen per unit as cash distributions for the 10th fiscal period (fiscal period ended
January 2020), and started the payout on April 21, 2020.
(Note 9) HCM resolved at the board of directors’ meeting held on September 15, 2020, to set cash distributions in excess of earnings (return of capital that falls under
the category of distributions reducing unitholders’ capital for tax purposes) at 289 yen per unit as cash distributions for the 11th fiscal period (fiscal period
ended July 2020), and started the payout on October 21, 2020.
(Note 10) HCM resolved at the board of directors’ meeting held on March 16, 2021, to set cash distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) at 300 yen per unit as cash distributions for the 12th fiscal period (fiscal period ended
January 2021), and started the payout on April 21, 2021.
(Note 11) HCM resolved at the board of directors’ meeting held on September 14, 2021, to set cash distributions in excess of earnings (return of capital that falls under
the category of distributions reducing unitholders’ capital for tax purposes) at 304 yen per unit as cash distributions for the 13th fiscal period (fiscal period
ended July 2021), and started the payout on October 21, 2021.

Investment units’ price performance
The investment units’ high and low closing prices on the TSE’s J-REIT Market are tabulated below by fiscal period.
10th fiscal period

11th fiscal period

12th fiscal period

13th fiscal period

14th fiscal period

From August 1, 2019
To January 31, 2020

From February 1, 2020
To July 31, 2020

From August 1, 2020
To January 31, 2021

From February 1, 2021
To July 31, 2021

From August 1, 2021
To January 31, 2022

High

143,200 yen

138,200 yen

135,800 yen

158,200 yen

162,600 yen

Low

126,400 yen

80,000 yen

113,400 yen

130,600 yen

131,000 yen

Fiscal period- 5 -4. Distributions
In accordance with the cash distributions policy described in Article 36, Paragraph 1 of its Articles of Incorporation, HCM
determines that the amount of distributions shall exceed the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Act on Special Measures Concerning Taxation, and shall be up to its profits as defined in
Article 136, Paragraph 1 of the Investment Trust Act. Following this policy, HCM has decided that it shall distribute
913,098,936 yen as the distributions of earnings, which is roughly the entire amount arrived at after deducting thereversal of allowance for temporary difference adjustments (as defined in Article 2, Paragraph 2, Item (30) of the
Calculation Rules for Investment Corporations) from profits as defined in Article 136, Paragraph 1 of the Investment Trust
Act. Accordingly, the distributions of earnings per unit was 2,936 yen.
Furthermore, in accordance with the policy for cash its distributions in excess of earnings provided in Article 36,
Paragraph 2 of its Articles of Incorporation, HCM is to conduct distributions in excess of earnings (return of capital that
falls under the category of distributions reducing unitholders’ capital for tax purposes) in each period on a continuous
basis, as a rule. During the current fiscal period, HCM decided to distribute 95,788,308 yen, an amount roughly equivalent
to 20% of depreciation recorded in the current fiscal period, as distributions in excess of earnings. Accordingly,
distributions in excess of earnings per unit (of distributions in excess of earnings from other distributions) came to 308
yen.
As a result, distributions per unit came to 3,244 yen.
Fiscal period
Total unappropriated retained
earnings(thousands ofyen)(thousands of
Retained earnings carried forward
yen)(thousands ofTotal distributions
yen)
(yen)
[Distributions per unit](thousands ofTotal distributions of earnings
yen)
(yen)
[Distributions of earnings per unit](thousands ofDistributions in excess of earnings
yen)[Distributions in excess of earnings(yen)
per unit]
Distributions in excess of earnings(thousands of
from
yen)
allowance for temporary difference
adjustments[Distributions in excess of earnings
from
(yen)
allowance for temporary difference
adjustments per unit]
Distributions in excess of earnings(thousands offrom distributions under tax law
yen)
resulting in a redemption ofunitholders’ capital[Distributions in excess of earnings
from distributions under tax law(yen)
resulting in a redemption ofunitholders’ capital per unit]

10th fiscal
period11th fiscal
period12th fiscal
period13th fiscal
period14th fiscal
periodFrom Aug. 1, 2019
To Jan. 31, 2020

From Feb. 1, 2020
To Jul. 31, 2020

From Aug. 1, 2020
To Jan. 31, 2021

From Feb. 1, 2021
To Jul. 31, 2021

From Aug. 1, 2021
To Jan. 31, 2022

981,606

958,141

957,584

983,103

929,041

40,20647,53061,901

15,971

11,027

1,032,523

1,007,643

1,003,289

1,015,729

1,008,887[3,320][3,240][3,226][3,266][3,244]

941,400

910,610895,682

921,184

913,098[3,027][2,928][2,880][2,962][2,936]

91,123

97,032

107,606

94,544

95,788

[293]

[312]

[346]

[304]

[308]

2,488

7,153

14,306

－

－

[8]

[23]

[46]

[－]

[－]

88,63589,87993,30094,544

95,788

[285]

[289]

[300]

[304]

[308]

(Note 1) Distributions in excess of earnings are distributed up to the amount equivalent to 20% of the depreciation recorded in the accounting period immediately before
the accounting period when HCM will pay the said distributions, sufficiently taking into consideration the amount of capital expenditures necessary for maintaining
and improving the competitiveness of HCM’s assets under management, the financial position of HCM and other factors.
However, distributions in excess of earnings may be conducted up to an amount lower than the above amount or may not be conducted when the implementationof distributions in excess of earnings up to the said amount is judged to be inappropriate based on the economic environment surrounding HCM, trends of the realestate market and leasing market, status of HCM’s assets under management and financial conditions.
(Note 2) Under the rules of The Investment Trusts Association, closed-end investment corporations are allowed to conduct their distributions in excess of earnings up to an
amount equivalent to 60% of the depreciation recorded on the last day of the accounting period.

- 6 -5. Future Management Policy(1) Investment Environment

In Japan, while the number of elderly households is increasing, the population that bears nursing care is on the decline,
and a provision of nursing care services and medical services at external facilities for a certain percentage of elderly
households will inevitably be needed. The expansion of the supply of healthcare facilities, especially facilities andhousing for the elderly, is required in response to the expanding demand for nursing care and medical services.
While nursing care in the same household is forecast to be more difficult than ever before due to extreme aging andchange to the family structure, new development and expansion of healthcare facilities is required to respond to thegrowing demand for nursing care and medical services, and measures to achieve them are being promoted.
In “Japan Revitalization Strategy -JAPAN is BACK-“ dated June 14, 2013, the Headquarters for Japan's Economic
Revitalization announced a policy to “enact a guideline concerning acquisition and management of properties including
housing for the elderly to promote the utilization of healthcare REITs in an effort to utilize private funds” as part of urban
development to enable the elderly to walk and live safely.
Following this policy, the Ministry of Land, Infrastructure, Transport and Tourism enacted the “Guideline Related to
the Utilization of Healthcare REITs Targeting Housing for the Elderly” on June 27, 2014, and the “Guideline Related to
REITs Targeting Hospital Real Estate” on June 26, 2015, as well as indicated the points to be noted in transactions ofhealthcare facilities, such as the positioning of key executives with certain experience. With the enactment of theseguidelines, it is believed that opportunities for operators to utilize healthcare REITs will increase.
In addition, the “Housing Life Basic Plan (nationwide plan)” decided by the cabinet on March 19, 2021, set a
performance indicator, which calls for increasing the ratio of housing for the elderly to the elderly population from 2.5%
in 2018 to 4% in 2030, based on the goal of “formation of communities and building of cities where various generations
support each other and the elderly can live with good health and peace of mind.”Note that fiscal 2021 was the year when nursing care fees were revised, as revision occurs once every three years.
This was the first revision of nursing care fees since the outbreak of the COVID-19 pandemic.
Regarding the environment surrounding healthcare-related facilities, social welfare costs are expected to increase
alongside Japan’s aging population, and demand for medical and long-term care services is expected to increase aheadof 2025, when the baby boomer generation will be 75 years old or older. Meanwhile, there are significant regionalvariances in the growth of the elderly population. To address these issues, studies and actions are underway to establish
a regional comprehensive care system through a review of the medical care system and to realize a regional healthcare
vision (Note 1).
In Japan, under a regional comprehensive care system, work is underway to build an integrated framework ofresidences, medical care, nursing care, preventative medicine and lifestyle support suitable for each region so that theelderly can continue to live in the area they are used to in the way they would like, even after they come to requirenursing care.
The government has further divided the functions of beds in medical institutions in line with the conditions ofpatients, aiming to provide appropriate medical service to all patients at an appropriate location in order to effectively
utilize limited medical resources, and enacted systemic reforms in healthcare systems, such as establishing guidelines(March 2015) for planning a community healthcare vision in prefectures. Prefectures have formulated the community
healthcare vision for the purpose of realizing a system encouraging the effective and efficient allocation of resources
commensurate with the healthcare functions in each of the national government-designated regions, and providing ahigher quality of healthcare services in beds appropriate for the condition of patients, from acute to convalescent andchronic phases, for each disease. The community healthcare vision is designed to estimate and stipulate medical
demand (number of patients) and required number of beds in 2025 for each medical function in each area of the vision(secondary medical area) in order to promote functional differentiation and coordination of hospital wards. Presently,
prefectural governments and healthcare professionals are working together via regional healthcare vision councils andother channels to realize this vision.
Furthermore, the number of hospitals across Japan is estimated to be about 8,200. However, some of these werebuilt in the 1960s and 1970s and do not meet earthquake-resistance standards amid Japan’s earthquake-prone
environment. The earthquake resistance rate of hospitals in Japan is only 77.3% as of an FY2020 survey, compared tomore than 95% for paid nursing homes (Note 2) (Note 3). Hospitals are used by an unspecified large number of people
every day and can also be used as a community base in case of a disaster. Earthquake resistance is an urgent issue evenfrom the viewpoint of strengthening the country's infrastructure. Therefore, HCM believes that there is a great needamong hospitals for funding to rebuild or expand their buildings to make them more earthquake resistant.
In addition to the above, medical corporations are also expected to face needs for capital investment, M&A-driven
funding procurement and asset sales for the enhancement or conversion of medical functions, including multi-use
development (Note 4) and reconstruction and expansion of buildings due to earthquake resistance. Furthermore, HCM
believes, in the instance of realizing held assets for the purpose of strengthening financial position, liquidation of(generating funds from) held assets for a hospital owner’s business succession or inheritance, or sale of hospital realestate for refinancing, that real estate investment corporations will have opportunities related to these assets.
The market size of hospital real estate in Japan accounts for a majority of the total healthcare facility real estatemarket, and the majority of hospital real estate is owned by medical corporations (Note 5). HCM believes that whenhospital real estate is liquidated, it may become a target for investment by real estate investment corporations.
As described above, HCM believes that, amid the funding needs of medical corporations, and as a method for
procuring funds related to hospital management and part of strengthening financial positions, opportunities forleveraging real estate investment corporations in hospital real estate will expand further.
Therefore, the market for healthcare facilities with a particular emphasis on the keywords “nursing care,” “medical
service” and “health,” which HCM sets as acquisition targets, is believed to further expand in the future.
On the other hand, there are growing concerns about economic deterioration due to the spread of COVID-19.

- 7 -However, HCM believes that its income will not be impacted immediately, as the healthcare facilities it owns are, as arule, operated under long-term lease agreements with fixed rents, and the operating status by the operators and theirfinancial conditions are continuously monitored. Nevertheless, it is unpredictable whether COVID-19 will spread further,and close attention must be paid to how the situation will evolve going forward.
(Note 1) In the section about the reorganization of medical and nursing care functions (future vision) of “Promotion of Home Medical and Nursing Care" by the project
team for promoting home medical and nursing care as published by the Ministry of Health, Labour and Welfare, it is stated that "a more effective and efficient
medical and nursing care service provision system will be built through a role division for hospital and hospital bed functions according to patient needs andby strengthening cooperation among medical institutions and between medical and nursing care services.”(Note 2) According to the Ministry of Health, Labour and Welfare's "Status of Earthquake Resistance of Social Welfare Facilities" (released on December 25, 2017), theratio of earthquake-resistant paid nursing homes is 96.3%.
(Note 3) According to the "Results of the Survey on Seismic Retrofit of Hospitals" (released on July 20, 2021) by the Ministry of Health, Labour and Welfare, the ratio ofearthquake-resistant hospitals is 77.3%, of which the ratio was 93.6% for disaster base hospitals and emergency medical care centers. Note that in thesesurveys, hospitals with buildings constructed before 1981 (before the enforcement of the revised Building Standards Act of 1980) that have not been assessed
as resistant to earthquakes are included in calculations as buildings with unknown earthquake resistance.
(Note 4) “Multi-use development” refers to the development of real estate with multiple functions and uses, such as healthcare facilities that combine facilities for theelderly, residences, and medical facilities.
(Note 5) Figures are based on preliminary calculations by KPMG Healthcare Japan Co., Ltd.

(2) Future Management Policy and Challenges to Address

With recognition of the above investment environment, HCM aims to secure stable income and steady growth of theportfolio while seeking to realize a society where all people can live vibrantly and with peace of mind, and manages assets
based on the following policies.
a. Asset management policy for properties owned
Healthcare facilities possess a unique property feature in which not only location or specifications of buildings but
also the operational capability of the operator and management stability have a large impact on their value as realestate. When HCM acquires a healthcare facility, we aim to secure stable income for the medium to long term by, inprinciple, concluding a long-term lease agreement with fixed rent with the operator that operates the healthcare
facility.
HCM conducts due diligence on the business feasibility of facilities, including analyzing the management andfinancial conditions of operators, along with real estate due diligence, in order to secure stable revenue over the
medium to long term. We also implement continuous monitoring even after the acquisition.
b. Property acquisition policy
HCM may utilize the comprehensive capabilities of its sponsors, including professional know-how and customer base,as well as first refusal rights provided in the support agreements, based on the support agreements which the AssetManagement Company has concluded with sponsor companies and such.
Furthermore, the Asset Management Company may, for the purpose of making flexible property acquisition,
request sponsors to temporarily own a property (warehousing) on the premise it be transferred to HCM.
As such, HCM aims to maximize unitholder value over the medium to long term by best utilizing the extensive
network and warehousing function of the sponsors and works for sustainable growth of the asset size.
c. Financial policy
HCM intends to build a stable financial base with an aim to secure stable income over the medium to long term andmaximize unitholder value, and conducts financing in consideration of the trends in the financial market.
With stable growth of HCM over the long term in mind, equity financing will be carried out flexibly, taking into
consideration a multitude of factors, including the timing of the acquisition of newly acquired real estate-related
assets and the possibility of utilizing the sponsor’s warehousing capabilities, LTV, the timing of the repayment ofinterest-bearing liabilities and the period remaining until repayment, as well as market conditions, while also
considering the dilution of the rights of existing unitholders and the resulting decline in the trading price ofinvestment units.
As to debt financing, stable and flexible leverage control will be implemented by diversifying repayment dates andsetting the upper limit of LTV at 65% (which may, however, exceed 65% temporarily). In addition, a stable bankformation will be established by receiving financial advice from Sumitomo Mitsui Banking Corporation, one of thesponsors, based on the sponsor support agreement concluded between the bank and the Asset Management
Company.

- 8 -6. Significant Subsequent Eventsa. Acquisition of assets
On January 17, 2022, HCM entered into a purchase agreement for the acquisition of trust beneficiary interests in thefollowing 10 real estate properties (hereinafter, "Assets to Be Acquired in the 15th Fiscal Period"), and on February 1,
2022, HCM acquired SOMPO CARE La vie Re Kobeikawadani, SOMPO CARE Sompo no ie Sayama, Royal Kawaguchi,
NOAH GARDEN LEGEND, NOAH GARDEN L Grace and NOAH GARDEN CASA RICH. Acquisition of NOAH GARDEN Season
Bell, Heartland Kawaguchi Meiseien, Granda Minamiurawa, and Madoka Minamiurawa are scheduled to be completed
in March 2022.
Property
number
Paid nursing
home-34
Paid nursing
home-35
Paid nursing
home-36
Paid nursing
home-37
Paid nursing
home-38
Paid nursing
home-39
Paid nursing
home-40
Paid nursing
home-41
Paid nursing
home-42
Serviced housing
for the elderly-3
Total(Note)

Property name
SOMPO CARE La vie Re Kobeikawadani
SOMPO CARE Sompo no ie Sayama
Royal Kawaguchi
NOAH GARDEN LEGENDNOAH GARDEN L Grace
NOAH GARDEN Season BellHeartland Kawaguchi Meiseien
Granda Minamiurawa
Madoka Minamiurawa
NOAH GARDEN CASA RICH
─

Location
Kobe-shi,
Hyogo
Sakai-shi,
Osaka
Kawaguchi-shi,
Saitama
Sapporo-shi,
Hokkaido
Sapporo-shi,
Hokkaido
Sapporo-shi,
Hokkaido
Kawaguchi-shi,
Saitama
Kawaguchi-shi,
Saitama
Kawaguchi-shi,
Saitama
Sapporo-shi,
Hokkaido─

Acquisition price(Note)(millions of yen)

Date of acquisition

1,288

Feb. 1, 2022

600

Feb. 1, 2022

1,260

Feb. 1, 2022

859

Feb. 1, 2022

622

Feb. 1, 2022

1,350

Mar. 30, 2022

2,000

Mar. 30, 2022

1,022Mar. 30, 2022

822

Mar. 30, 2022

1,619

Feb. 1, 2022

11,442─Acquisition price does not include acquisition-related expenses, property tax, city planning tax, consumption tax and local consumption tax.

b. Issuance of new investment units
In accordance with the resolutions of the Board of Directors on January 17, 2022, and January 25, 2022, HCM
determined to issue 46,190 new investment units through public offering and 2,309 new investment units via thirdparty allotment with SMBC Nikko Securities Inc. as an allotted party, and to use the proceeds to fund a portion of theacquisition of the Assets to Be Acquired in the 15th Fiscal Period. Payment for the new investment units through public
offering and third-party allotment was completed on February 1, 2022 and March 1, 2022, respectively, with a total
payment of 5,843 million yen. As a result, total unitholders' capital amounted to 38,323 million yen and the total numberof investment units issued and outstanding was 359,500 units.
Issuance of New Investment Units through Public Offering (Primary Offering)Number of new investment units issued: 46,190 units
Issue price (offer price): 124,764 yen per unit
Total issue price (total offer price): 5,762,849,160 yen
Paid-in amount (issue amount): 120,477 yen per unit
Total paid-in amount (total issue amount): 5,564,832,630 yen
Payment date
: February 1, 2022 (Tue.)
Issuance of New Investment Units through Third-Party Allotment
Number of new investment units issued: 2,309 units
Paid-in amount (issue amount): 120,477 yen per unit
Total paid-in amount (total issue amount): 278,181,393 yen
Payment date
: March 1, 2022 (Tue.)Allotted party: SMBC Nikko Securities Inc.

- 9 -

c. Borrowings
HCM decided on January 17, 2022, to conduct borrowings to allocate to a portion of the acquisition and its related
expenses for the Assets to Be Acquired in the 15th Fiscal Period. A summary of the borrowings to be made in conjunction
with this decision is as follows.
Type

LenderBorrowingamountInterest rate
(Note 4)

Drawdown
Borrowing method
date

Repayment
date

March 30,
2023

Short
term

Sumitomo
Mitsui Banking
Corporation

Base interest rate
2
March 30,(JBA 3-month
billion yen Japanese yen TIBOR)
2022+ 0.25%Long
term

A syndicate oflenders
arranged by
Sumitomo
Mitsui Banking
Corporation(Note 2)
A syndicate oflenders
arranged by
Sumitomo
Mitsui Banking
Corporation(Note 3)

Borrowings basedon the individual
term loan
agreement as ofMarch 28, 2022,with the company
on the left as alenderBase interest rate
(JBA 3-month
700
Japanese yen TIBOR)
million yen+ 0.35%(Note 5)(Note 6)
March 30,
2022
Base interest rate
(JBA 3-month
2.8
Japanese yen TIBOR)
billion yen+ 0.55%(Note 5)(Note 6)

Borrowings basedon the individual
term loan
agreement as ofMarch 28, 2022,with the company
on the left as alenderRepayment
methodRemarks

Lump-sum
Unsecured andJanuary 31, repayment
unguaranteed2026
on maturity

January 31,
2028(Note 1) The borrowing is subject to a number of conditions, including the execution of an agreement relating to the loan that is reasonably satisfactory to the lenders
mentioned above and the satisfaction of all lending preconditions, which are to be separately determined.
(Note 2) The loan syndicate is composed of Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank, Limited.
(Note 3) The loan syndicate is composed of Sumitomo Mitsui Banking Corporation, Resona Bank, Limited, Shinkin Central Bank, The Bank of Fukuoka, Ltd., The Dai-ichi Life
Insurance Company, Limited, The 77 Bank, Ltd., The Gunma Bank, Ltd. and The Bank of Yokohama, Ltd.
(Note 4) The first interest payment date is April 30, 2022, and subsequent interest payments will be due on the last day of January, April, July and October of every year
thereafter, as well as on the principal repayment date (whenever the date of interest payment is not a business day, such payment will be made on the next business
day; whenever the date of interest payment falls on day of the next month, such payment will be made on the last business day of the current month). For theJapanese yen TIBOR published by the JBA TIBOR Administration, please refer to the JBA TIBOR Administration’s website(https://www.jbatibor.or.jp/english/rate/).
(Note 5) Loan fees and other fees paid to lenders are not included.
(Note 6) HCM plans to enter into an interest rate swap agreement to effectively establish a fixed interest rate. The details of this agreement will be announced once the interest
rate is determined.

- 10 -

Overview of HCM
1. Status of Capitalization
10th fiscal period 11th fiscal period 12th fiscal period 13th fiscal period 14th fiscal period

Fiscal period
Total number ofinvestment units
authorized
Total number ofinvestment units issued
and outstanding
Unitholders' capital, net(Note)
Number of unitholders(Note)(as of Jan. 31, 2020)(as of Jul. 31, 2020)(as of Jan. 31, 2021)(as of Jul. 31, 2021)(as of Jan. 31, 2022)(units)

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000(units)311,001

311,001

311,001

311,001

311,001

32,33032,24232,152

32,05831,964

15,69815,783

15,56015,612

15,490(millionsof yen)(persons)

The figure indicates the amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital. The amount does not take into
account the change in unitholders’ capital in line with the implementation of distributions in excess of earnings of allowance for temporary difference
adjustments.

2. Matters Concerning Investment Units
Top 10 unitholders ranked by percentage of outstanding investment units owned at January 31, 2022, are listed below.
No. of investment
units held
(units)
83,724

Name
Custody Bank of Japan, Ltd. (Trust Account)

Percentage of outstanding
units owned (%)
26.92

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

36,993

11.89

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

10,016

3.22

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

7,913

2.54

NORTHERN TRUST CO. (AVFC) RE FIDELITY FUNDS

7,627

2.45

NEC Capital Solutions Limited

4,000

1.29

SHIP HEALTHCARE HOLDINGS, INC.

4,000

1.29

Sumitomo Mitsui Banking Corporation

4,000

1.29

DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO

3,560

1.14

GOLDMAN SACHS INTERNATIONAL

3,436

1.10

165,269

53.14

Total

3. Matters Concerning Directors(1) Executive Director, Supervisory Directors and Accounting Auditor in the Current Fiscal Period
PositionName

Key concurrent holding of positions

Executive
Director

Yuji Fujise

Shimada Hamba & Osajima Lawyer

Supervisory
Officer

Yasuo Shida

Blakemore & Mitsuki Partner

Sachihiko Fujimoto

Hayabusa Asuka Law Offices Counsel

Total amount of compensation foreach position during period(thousands of yen)
1,800

(Note 1) (Note 2)(Note 1) (Note 2)

Accounting PricewaterhouseCoopers Aarata
Auditor (Note 3) LLC

―

3,000
7,500

(Note 1) The amount paid in the current period.
(Note 2) None of the executive director or supervisory officers own HCM’s investment units in their own name or in the name of another. In addition, supervisory directors
may be directors of other corporations other than those stated above, but none of them, including those above, have vested interest in the HCM or the AssetManagement Company.
(Note 3) For the “Accounting Auditor,” the remuneration for the audit for the current period is 7,500 thousand yen.

(2) Policy on Dismissal and Non-reappointment of Accounting Auditor

The accounting auditor shall be dismissed when any of the items of Article 105, Paragraph 1 of the Investment Trusts
Act is deemed to apply, and non-reappointment shall be reviewed by HCM’s Board of Directors, with comprehensive
consideration to the quality of audits, the amount of audit fees, and various other circumstances.

- 11 -

4. Matters Related to Directors Liability Insurance Agreements
HCM has concluded directors liability insurance agreements, as follows.
Scope of Insured Parties

Overview of Directors Liability Insurance Agreement Content(Summary of covered incidents)
HCM has concluded a directors liability insurance agreement with an insurance company as
stipulated in Article 116-3, Paragraph 1 of the Investment Trusts Act. This agreement covers
damages that may arise from an insured person being held liable for the performance of theirduties or being subject to claims related to such liability.

All executive and supervisory directors(Percentage of premiums paid)
Premiums are fully borne by HCM for all insured parties.
(Measures to ensure that the appropriateness of the execution of director duties is not
impaired)
Exemptions are stipulated in the agreement, such as for non-coverage of damages caused by
willful misconduct or gross negligence.

5. Asset Management Company, Asset Custodian and General Administrators
The asset management company, asset custodian and general administrators as of January 31, 2022, are as follows:
Entrustment category

Name

Asset management company

Healthcare Asset Management Co., Ltd.

Asset custodian

Sumitomo Mitsui Trust Bank, Limited

General administrator(accounting matters, running of the organization,transfer agent for investment units)

Sumitomo Mitsui Trust Bank, Limited

General administrator(administration of investment corporation bonds)

Sumitomo Mitsui Trust Bank, Limited- 12 -

Status of Investment Assets of HCM
1. Composition of Assets of HCM

Asset type

Asset use

Area

Three Major
Metropolitan Areas(Note 3)
Core Cities (Note 4)

Paid nursing
homeCore Cities (Note 4)

Other Areas(Note 5)
Group homes for the elderly withdementia
Other facilities for the elderly

Trust
beneficiaryinterests inreal estate

SubtotalThree Major
Metropolitan Areas(Note 3)

Medical service-related
facilities

Multi-use
facilities

Core Cities (Note 4)
Other Areas(Note 5)
SubtotalComplex of
paid nursing
homes, medical
service related
facilities

14th fiscal period(as of Jul. 31, 2021)(as of Jan. 31, 2022)

Total amount As a percentage Total amount As a percentage
owned
of
owned
of
(millions of yen) total assets (millions of yen) total assets(Note 1)(%) (Note 2)(Note 1)(%) (Note 2)

Other Areas(Note 5)Three Major
Metropolitan Areas(Note 3)Homes andfacilities
Serviced
for thehousing for theelderlyelderly

13th fiscal period

42,04661.0

41,800

60.8

5,061

7.3

5,011

7.3

1,710

2.5

1,688

2.5

3,006

4.4

3,027

4.4

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

51,82475.2

51,528

74.9

―

―

―

―

2,097

3.0

2,085

3.0

―

―

―

―

2,097

3.0

2,085

3.0

Three Major
Metropolitan Areas(Note 3)

12,95518.8

12,906

18.8

Core Cities (Note 4)

―

―

―

―

Other Areas(Note 5)

―

―

―

―

Subtotal

12,95518.8

12,906

18.8

Other
Total

―

―

―

―

66,87797.1

66,52096.7

Deposits and other assets

2,006

2.9

2,257

3.3

Total assets

68,883100.0

68,778100.0(Note 1) “Total amount owned” is the carrying amount (in the case of trust beneficiary interests in real estate, the book value after depreciation and amortization).
(Note 2) Figures in “As a percentage of total assets” are rounded to one decimal place.
(Note 3) “Three Major Metropolitan Areas” refers to the Tokyo Metropolitan Area (Tokyo, Kanagawa, Saitama, Chiba prefectures), Kinki Area (Osaka, Kyoto, Hyogo
prefectures) and Chubu Area (Aichi prefecture).
(Note 4) “Core Cities” refers to designated cities, prefectural capitals and regional core cities other than the Three Major Metropolitan Areas. Regional core cities refers tocities with a population of 200,000 or more.
(Note 5) “Other Areas” refers to areas other than the Three Major Metropolitan Areas and Core Cities.

- 13 -

2. Major Assets Held
The following is an overview of the major portfolio assets (top ten properties in terms of book value) held by HCM as ofJanuary 31, 2022.
Carrying
amount(millions ofyen)leasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

Occupancy
rate(%)(Note 3)As a percentage of
total operating revenue
from real estate leasing
business(%)(Note 4)

SHIP Senri Building

12,906

24,813.85

24,813.85

100.0

Not disclosed

Paid nursing
home・Medical
service-related
facilities

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

4,174

12,636.48

12,636.48

100.0

Not disclosed

Paid nursing
homeGreenLife Moriguchi

4,139

8,356.85

8,356.85

100.0

Not disclosed

Paid nursing
home

SOMPO CARE La vie Re
Machidaonoji

3,382

7,720.17

7,720.17

100.0

Not disclosed

Paid nursing
home

SOMPO CARE La vie Re
Azamino2,982

5,789.25

5,789.25

100.0

Not disclosed

Paid nursing
homeSmiling Home Medice
Adachi

2,304

3,870.98

3,870.98

100.0

Not disclosed

Paid nursing
home

Hanakotoba Shin-Yokohama

2,113

5,230.23

5,230.23

100.0

Not disclosed

Paid nursing
homeNiigata Rehabilitation
Hospital

2,085

13,476.55

13,476.55

100.0

Not disclosed

Medical servicerelated facilities

AQUAMARINE
Nishinomiyahama

1,909

5,274.54

5,274.54

100.0

Not disclosed

Paid nursing
home

SOMPO CARE Sompo no ie
Awajiekimae

1,859

5,745.15

5,745.15

100.0

Not disclosed

Serviced housing
for the elderly

Total

37,857

92,914.05

92,914.05

100.0

68.2

Name of real estate(Note 1)
(Note 2)
(Note 3)(Note 4)

Primary use―“Leasable area” indicates figures based on the lease agreement of each building.
“Leased area” indicates the areas out of the leasable area for which actual lease agreements have been concluded and are leased.
”Occupancy rate” indicates the leased area as a percentage of the leasable area of each owned asset as of January 31, 2022, and is rounded to one decimal place.
“As a percentage of total operating revenue from real estate leasing business,” for each property is not disclosed as consent for disclosure of real estate leasing
business revenue has not been obtained from tenants. The total value is rounded to the first decimal place.

- 14 -

3. Details of Real Estate and Other Assets
The following is an overview of the assets held by the Investment Corporation as of January 31, 2022.
Total leasable
area
(m2)

Carrying
amount(millions ofyen)(Note 1)

Period-end
appraisalvalue(millions ofyen)(Note 2)

Location

Type ofownership

AQUAMARINE Nishinomiyahama

Nishinomiya-shi, Hyogo

Trust beneficiaryinterests in realestate5,274.54

1,909

2,100

Bonsejour Chitosefunabashi

Setagaya-ku, Tokyo

Trust beneficiaryinterests in realestate2,342.17810

974

Bonsejour Hino

Hino-shi, Tokyo

Trust beneficiaryinterests in realestate1,984.17709

818

Bonsejour Musashi-shinjo

Kawasaki-shi, Kanagawa

Trust beneficiaryinterests in realestate1,710.43

571

643

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

Hadano-shi, Kanagawa

Trust beneficiaryinterests in realestate3,435.79694

850

Medical Rehabilitation Home
Bonsejour Komaki

Komaki-shi, Aichi

Trust beneficiaryinterests in realestate8,858.49

1,225

1,450

ASHEIM Hikarigaoka

Nerima-ku, Tokyo

Trust beneficiaryinterests in realestate3,628.60

1,413

1,520

ASHEIM Bunkyohakusan

Bunkyo-ku, Tokyo

Trust beneficiaryinterests in realestate2,507.25

1,406

1,680

SOMPO CARE La vie Re Machidaonoji

Machida-shi, Tokyo

Trust beneficiaryinterests in realestate7,720.17

3,382

3,940

SOMPO CARE La vie Re Azamino

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate5,789.25

2,982

3,300

SAWAYAKA Tachibanakan

Fukuoka-shi, Fukuoka

Trust beneficiaryinterests in realestate5,652.94

1,346

1,550

SAWAYAKA Mekarikan

Kitakyushu-shi, Fukuoka

Trust beneficiaryinterests in realestate4,720.46

1,241

1,430

SAWAYAKA Tagawakan

Tagawa-shi, Fukuoka

Trust beneficiaryinterests in realestate2,366.20

364

383

GOOD TIME HOME Fudo-mae

Shinagawa-ku, Tokyo

Trust beneficiaryinterests in realestate3,400.20

1,849

1,990

Bonsejour Yotsugi

Katsushika-ku, Tokyo

Trust beneficiaryinterests in realestate1,962.89816

886

Medical Home Bonsejour Itami

Itami-shi, Hyogo

Trust beneficiaryinterests in realestate2,129.87

496

557

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

Kobe-shi, Hyogo

Trust beneficiaryinterests in realestate12,636.48

4,174

4,540

GreenLife Moriguchi

Moriguchi-shi, Osaka

Trust beneficiaryinterests in realestate8,356.85

4,139

4,500

Hapine Kobe Uozaki Nibankan

Kobe-shi, Hyogo

Trust beneficiaryinterests in realestate1,772.89

918

995

Name of real estate- 15 -Name of real estate

Type ofownership

Location

Total leasable
area
(m2)

Carrying
amount(millions ofyen)(Note 1)

Period-end
appraisalvalue(millions ofyen)(Note 2)Granda Tsuruma-Yamato

Yamato-shi, Kanagawa

Trust beneficiaryinterests in realestate3,427.08

1,036

1,060

Smiling Home Medice Adachi

Adachi-ku, Tokyo

Trust beneficiaryinterests in realestate3,870.98

2,304

2,500

AIKOEN ICHIBANKAN Building

Niigata-shi, Niigata

Trust beneficiaryinterests in realestate4,311.20

767

860

Hanakotoba Minami

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate1,710.68

1,083

1,240

Hanakotoba Miura

Miura-shi, Kanagawa

Trust beneficiaryinterests in realestate1,959.64

658

668

SOMPO CARE Lavie Re HamaKawasaki

Kawasaki-shi, Kanagawa

Trust beneficiaryinterests in realestate4,060.21

1,714

1,810

Hanakotoba Shin-Yokohama

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate5,230.23

2,113

2,330

Hanakotoba Shin-Yokohama II

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate1,837.29

397

383

Hanakotoba Odawara

Odawara-shi, Kanagawa

2,203.42

899

947

Verde Minowa

Takasaki-shi, Gunma

11,098.17

1,656

1,700

Verde Hotaka

Kawaba-mura,Tone-gun, Gunma

6,352.86

1,324

1,430

Sunny Life Kita-Shinagawa

Shinagawa- ku, Tokyo

2,135.54

1,854

2,040

Sunny Life Kamakura

Kamakura-shi, Kanagawa

3,817.91

1,482

1,580

Nichii Home Nishikokubunji

Kokubunji-shi, Tokyo

1,559.99

752

761

SOMPO CARE Sompo no ie
Awajiekimae

Osaka-shi, Osaka

5,745.15

1,859

2,210

SOMPO CARE Sompo no ie
Kobekamisawa

Kobe-shi, Hyogo

4,058.35

1,168

1,360

Niigata Rehabilitation Hospital

Niigata-shi, Niigata

13,476.55

2,085

2,300

SHIP Senri Building

Toyonaka-shi, Osaka

24,813.85

12,906

14,200187,918.74

66,52073,485

Trust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTotal(Note 1)
(Note 2)“Carrying amount” indicates book value after depreciation and amortization as of January 31, 2022.
“Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2022

- 16 -

The leasing status of real estate and other assets owned by HCM is as follows.
13th fiscal period

14th fiscal period

From Feb. 1, 2021
To Jul. 31, 2021

Name of real estate

No. oftenants(Note 1)

AQUAMARINE Nishinomiyahama

2

Bonsejour Chitosefunabashi

1

Bonsejour Hino

1

Bonsejour Musashi-shinjo

1

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

1

Medical Rehabilitation Home
Bonsejour Komaki

1

ASHEIM Hikarigaoka

1

ASHEIM Bunkyohakusan

2

SOMPO CARE La vie Re
Machidaonoji

1

SOMPO CARE La vie Re
Azamino1

SAWAYAKA Tachibanakan

1

SAWAYAKA Mekarikan

1

SAWAYAKA Tagawakan

1

GOOD TIME HOME Fudo-mae

1Bonsejour Yotsugi

1

Medical Home Bonsejour Itami

1

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

1

GreenLife Moriguchi

1

Hapine Kobe Uozaki Nibankan

1Granda Tsuruma-Yamato

1

Smiling Home Medice Adachi

2

As a
Real estate
percentage
leasing
Occupancyof totalbusiness
rateleasingrevenue(%)
business(millionsrevenueof yen)(%)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)- 17 -

From Aug. 1, 2021
To Jan. 31, 2022

No. oftenants(Note 1)

2
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
2

As a
Real estate
percentage
leasing
Occupancyof totalbusiness
rateleasingrevenue(%)
business(millions ofrevenue
yen)
(%)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)

13th fiscal period

14th fiscal period

From Feb. 1, 2021
To Jul. 31, 2021

Name of real estate

No. oftenants(Note 1)AIKOEN ICHIBANKAN Building

4

Hanakotoba Minami

1

Hanakotoba Miura

1

SOMPO CARE La vie Re
Hama-Kawasaki

5

Hanakotoba Shin-Yokohama

1

Hanakotoba Shin-Yokohama II

1

Hanakotoba Odawara

1

Verde Minowa

1

Verde Hotaka

1

Sunny Life Kita-Shinagawa

1

Sunny Life Kamakura

1

Nichii Home Nishikokubunji

1

SOMPO CARE Sompo no ie
Awajiekimae

1

SOMPO CARE Sompo no ie
Kobekamisawa

1

Niigata Rehabilitation Hospital

1

SHIP Senri Building

1

Total

47

As a
Real estate
percentage
leasing
Occupancyof totalbusiness
rateleasingrevenue(%)
business(millionsrevenueof yen)(%)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
100.0
2,062
100.0

From Aug. 1, 2021
To Jan. 31, 2022

No. oftenants(Note 1)

4
1
1
5
1
1
1
1
1
1
1
1
1
1
1
1
47

As a
Real estate
percentage
leasing
Occupancyof totalbusiness
rateleasingrevenue(%)
business(millions ofrevenue
yen)
(%)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
100.0
2,069
100.0

(Note 1) “No. of tenants” indicates the number of tenants of each building based on the lease agreements. For the section of healthcare facilities in which the trustee of
each owned asset and HCM conclude a lease agreement (master lease agreement) with an aim to have HCM sublease to the master lease company (section of
paid nursing home with nursing care for Smiling Home Medice Adachi), the master lease company (operator) is counted as a tenant, and accordingly indicated as
the number of tenants; while for the properties subject to pass-through-type master lease agreement where rents from end tenants are received intact, inprinciple, the total number of end tenants is indicated as the number of tenants. However, for the sections that are not subject to the lease agreement (master
lease agreement) between the trustee and HCM, the number of lessees leasing a building from the trustee is counted as the number of tenants and indicatedaccordingly.
(Note 2) “Real estate leasing business revenue” and “As a percentage of total leasing business revenue” for each property is not disclosed as consent for disclosure of leasing
business revenue has not been obtained from tenants. The total is the sum of amounts received as rent per period based on the lease agreements.

- 18 -

4. Contract Amounts and Market Values of Specified Transactions
The following table shows the contract amounts and market values of specified transactions by HCM as of January
31, 2022.
Classification

Type

Contract amount (thousands of yen) (Note 1)
Due after 1 year

Interest rate swap
transaction
Non-market transaction
Floating receivable; fixedpayableTotal

Market value(thousands of yen)
(Note 2) (Note 3)

28,300,000

20,300,000(2, 235)

28,300,000

20,300,000(2,235)(Note 1) The contract amount for interest rate swap transactions is based on the notional principal amount.
(Note 2) The value is calculated by the counterparty of the relevant transaction contract based on the prevailing market interest rate.
(Note 3) Of the market value amounts, transactions for which exceptional accounting treatment for interest rate swaps is applied in accordance with the AccountingStandard for Financial Instruments are not assessed at market value in the balance sheets.

5. Status of Other Assets
As of January 31, 2022, there are no other specified assets for investment other than those listed in "3. Details of Real
Estate and Other Assets,” above.

6. Status of Asset Holdings by Country and Region
Not applicable for countries and regions outside of Japan.

- 19 -

Capital Expenditures for Held Real Estate
1. Capital Expenditures
Of capital expenditures associated with repair work currently planned for assets owned by HCM as of January 31, 2022,
the following are the major estimated amounts. The estimated construction costs include the portion separately charged
to expenses in accounting.
Name of real estate (Location)
ASHEIM Hikarigaoka(Nerima-ku, Tokyo)
Niigata Rehabilitation Hospital(Niigata-shi, Niigata)GreenLife Moriguchi(Moriguchi-shi, Osaka)
SAWAYAKA Tagawakan(Tagawa-shi, Fukuoka)
SAWAYAKA Tagawakan(Tagawa-shi, Fukuoka)

PurposeRenewal of air
conditioners in common
areas
Renovation of exterior
walls of machine room andstorage room forhazardous materials
Renewal of flooringmaterials for corridors on
floors 3-8
Rooftop waterproofing
Renewal of bathroom tile

Scheduled period

Estimated construction costs(thousands of yen)
Total
Payment
Total amountamountduring period
already paid

From: May 2022
To: July 2022

30,000――

From: April 2022
To: July 2022

15,200――

From: May 2022
To: July 2022

15,000

―

―

5,830

―

―

4,180

―

―

From: May 2022
To: July 2022
From: June 2022
To: July 2022

2. Capital Expenditures During Period
Of construction work falling under the category of capital expenditures conducted in the current fiscal period for assets
owned by HCM as of January 31, 2022, the following are the major amounts. The capital expenditures in the current
fiscal period amounted to 128,460 thousand yen. Combined with the repair expenses separately charged to expenses
amounting to 26,664 thousand yen, HCM implemented a total of 155,124 thousand yen of construction work.
Name of real estate (Location)
SOMPO CARE Sompo no ie
Awajiekimae(Osaka-shi, Osaka)
SOMPO CARE Sompo no ie
Kobekamisawa(Kobe-shi, Hyogo)
AQUAMARINE Nishinomiyahama(Nishinomiya-shi, Hyogo)
SAWAYAKA Mekarikan(Kitakyushu-shi, Fukuoka)

Construction costs(thousands of yen)

Purpose

PeriodRenovation of exterior walls

From: October 2021
To: January 2022

30,920Renovation of exterior walls

From: November 2021
To: January 2022

23,617

Renewal of 66 air conditioner
units in rooms
Renewal of air conditioners incommon areas on floors 1-3

From: November 2021
To: January 2022
From: November 2021
To: November 2021――

Other real estate
Total

8,217
6,566
59,138
128,460

3. Reserves for Long-term Repair Plans
Not applicable.

- 20 -

Transactions During the Period
1. Transactions of Real Estate and Asset-Backed Securities, Infrastructure Assets andInfrastructure-Related Assets
Not applicable.

2. Transactions of Other Assets
Not applicable.

3. Survey of Specified Asset Value(1) Real estate
Not applicable.

(2) Other

1) Name of surveying party
PwC PricewaterhouseCoopers Aarata LLC
2) Overview of survey results and method
Transactions requested for investigation were one interest rate swap transaction between August 1, 2021 and January
31, 2022. For this interest rate swap transaction, PwC PricewaterhouseCoopers Aarata LLC was commissioned to conduct
a survey regarding the name of the counterparty, the contractual figures, and the term of the transaction, as well ascomparable prices in accordance with Article 201, Paragraph 2 of the Investment Trusts Act. We have obtained a survey
report based on the Practical Guidelines for Professional Services 4460 "Practical Guidelines for Agreed-Upon Procedures
for Survey of Value of Specified Assets of Investment Trusts and Investment Corporations" issued by the JapaneseInstitute of Certified Public Accountants (JICPA).
This survey is not part of an audit of financial statements and does not provide assurance as to the reasonableness ofprices or internal control systems.

4. Transactions with Interested Persons (Note 1)(1) Transactions with interested persons
Not applicable.

(2) Amount of fees paid
Classification

Total Amount of Fees Paid
(A)
(thousands of yen)Interest expenses (Note 3)

88,014

Borrowing expenses (Note 4)

55,789

Breakdown of Transactions with Interested Persons
Payment Recipient
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation

Payment Amount (B)(thousands of yen)

Share of Total
B / A (%)
(Note 2)

31,11335.35

39,63871.05(Note 1) The term “interested persons” refers to interested persons for HCM’s asset management company as defined in Article 123 of Order for Enforcement of the Act
on Investment Trusts and Investment Corporations and Article 26, Paragraph 1, Item 27 of the Regulations Concerning Investment Management Report ofInvestment Trusts and Investment Corporations of The Japan Investment Trusts Association. The above table adds transactions with interested persons (including
special purpose companies to which interested persons are entrusted with asset management; however, this excludes the asset management company itself) as
defined in the internal rules of the asset management company.
(Note 2) Percentages (%) of each total amount are rounded to the second decimal place.
(Note 3) Payment Amount (B) includes current period expenses, including accrued interest as well as interest paid.
(Note 4) Payment Amount (B) lists expenses for each period, excluding amounts equivalent to non-deductible consumption tax of the 136,049 thousand yen paid in the
5th fiscal period, 60,414 thousand yen paid in the 7th fiscal period, 6,000 thousand yen paid in the 8th fiscal period, 118,100 thousand yen paid in the 9th fiscal
period, 58,200 thousand yen paid in the 10th fiscal period, 39,200 thousand yen paid in the 12th fiscal period, 2,000 thousand yen paid in the 13th fiscal period,and 70,160 thousand yen paid in the 14th fiscal period.

5. Transactions with the Asset Management Company for its Concurrent Businesses
Healthcare Asset Management Co., Ltd., HCM's asset management company, does not concurrently engage in any Type1 Financial Instruments Business, Type 2 Financial Instruments Business, Building Lots and Buildings Transaction Business,or Specified Joint Real Estate Ventures, and there are no applicable transactions.

- 21 -

Other
1. Disclosure of Proprietary Investment Trust Beneficiary CertificatesNot applicable.

2. Notices(1) General Meeting of Unitholders
Not applicable.

(2) HCM Board of Directors
Approval Date

Approval Items

Overview

January 17, 2022

Execution of new investment
unit underwriting agreement

In the issuance of new investment units and the secondary offering ofinvestment units approved at the meeting of the Board of Directors
held on the same day, general administrative services for the offeringof new investment units were entrusted to SMBC Nikko Securities Inc.
and Nomura Securities Co., Ltd.

3. Disclosure of Overseas Real Estate Holding Corporations and their Held Real Estate
Not applicable.

4. Handling of Fractional Amounts and Percentages
In this document, unless otherwise indicated, amounts are rounded down to the nearest unit and percentages are rounded to the nearest
whole number.

- 22 -

1. Financial Statements(1) Balance Sheet(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2021)

Current fiscal period(As of Jan. 31, 2022)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Derivative receivables
Total current assets

1,482,160

1,689,721

207,158

181,881

3,042

2,081

113,994

125,455-

2,778

1,806,355

2,001,918

Non-current assets
Property, plant and equipment
Buildings in trust*1

33,266,152*1

33,351,590

Accumulated depreciation(4,163,853)(4,617,889)

Buildings in trust, net

29,102,298

28,733,700

91,85596,187

Accumulated depreciation(12,609)(14,208)

Structures in trust, net

79,245

81,978

Machinery and equipment in trust

19,49919,499

Accumulated depreciation(6,074)(7,049)Machinery and equipment in trust, net

13,425

12,450Tools, furniture and fixtures in trust

259,026

297,717

Accumulated depreciation(65,260)(88,209)

Tools, furniture and fixtures in trust, net

193,766

209,508

37,482,822

37,482,822

6,270

5,113

66,877,828

66,525,573

Software397

198

Total intangible assets

397

198

Security deposits

10,00010,000Long-term prepaid expenses

161,246

193,588

Derivative receivables

3,871

30,514

Deferred tax assets

13

12

175,131

234,115

67,053,357

66,759,887

Investment unit issuance costs

6,424

-

Investment corporation bond issuance costs

17,693

16,652

Total deferred assets

24,117

16,652

68,883,830

68,778,458

Structures in trust

Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets

Investments and other assets

Total investments and other assets
Total non-current assets
Deferred assets

Total assets
The accompanying notes are an integral part of these financial statements.

- 23 -

(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2021)

Current fiscal period(As of Jan. 31, 2022)

Liabilities
Current liabilities
Operating accounts payable

79,82762,1907,000,000

9,250,000

Accounts payable - other121,248

104,024

Accrued expenses

238,140

240,609887

866

Consumption taxes payable

15,496

17,631

Advances received

341,362

338,838

Deposits received

126

795

Derivative liabilities

-

1,705

7,797,089

10,016,661

Investment corporation bonds

2,000,000

2,000,000

Long-term loans payable

24,150,000

21,900,000

Tenant leasehold and security deposits

1,865,509

1,865,509

Tenant leasehold and security deposits in trust

86,766

86,766

Deferred tax liabilities

1,217

10,473

Derivative liabilities

18,45331,99728,121,947

25,894,748

35,919,037

35,911,409

32,480,785

32,480,785

Current portion of long-term loans payable

Income taxes payable

Total current liabilities
Non-current liabilities

Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Allowance for temporary difference
adjustments*3(61,448)*3(15,501)

Other deduction from unitholders' capital(421,848)(516,392)

Total deduction from unitholders' capital(483,296)(531,894)

31,997,489

31,948,891

Unappropriated retained earnings(undisposed loss)

983,103

929,041

Total surplus

983,103

929,041

32,980,592

32,877,933

Deferred gains or losses on hedges(15,799)(10,884)

Total valuation and translation adjustments(15,799)(10,884)

Unitholders' capital, net
Surplus

Total unitholders’ equity
Valuation and translation adjustments

Total net assets*2

Total liabilities and net assets

32,964,792
68,883,830

The accompanying notes are an integral part of these financial statements.

- 24 -*2

32,867,048
68,778,458

(2) Statement of Income(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Operating revenue
Leasing business revenues*12,062,148

Other revenue related to leasing business*1

10,889Total operating revenue

2,073,038*1

2,069,514*1

10,9212,080,436

Operating expenses
Expenses related to leasing business*1

Asset management fee

690,998*1

701,277

197,621200,330

Asset custody fee

3,432

3,430

Administrative service fees

21,461

21,551

Directors’ compensation

4,800

4,800

Property tax

27,78728,457

Other operating expenses

48,38048,051

Total operating expenses

994,481

1,007,899

1,078,556

1,072,537

Interest income

86Insurance income

762-

Reversal of distributions payable

584

463

1,356

469

Interest expenses

86,60088,014

Interest expenses on investment corporation bonds

7,800

7,800

Amortization of investment unit issuance costs

6,424

6,424

Amortization of investment corporation bond issuance
costs

1,040

1,040

Borrowing expenses

55,95555,789Total non-operating expenses

157,821

159,068

Ordinary income

922,091

913,938

Income before income taxes

922,091

913,938

Income taxes - current

888

867

Income taxes - deferred

0

1

889

868

Net income

921,201

913,069

Retained earnings brought forward

61,901

15,971

Unappropriated retained earnings (undisposed loss)

983,103

929,041

Operating income
Non-operating income

Total non-operating income
Non-operating expenses

Total income taxes

The accompanying notes are an integral part of these financial statements.

- 25 -

(3) Statement of Unitholders' Equity
Previous fiscal period (from February 1, 2021, to July 31, 2021)(Unit: thousands of yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’capitalBalance at beginning ofcurrent period
Changes of items during
periodAllowance fortemporarydifference
adjustments

32,480,785(47,142)

Other deduction Total deduction
from unitholders' from unitholders'
capitalcapital(328,547)

Unitholders'
capital, net(375,690)

32,105,095(14,306)(14,306)(93,300)(93,300)(93,300)

Dividends of surplus
Distributions in excessof earnings fromallowance fortemporary difference
adjustments
Distributions in excessof earnings from other
distributions(14,306)

Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
period*1－(14,306)(93,300)(107,606)(107,606)

32,480,785(61,448)(421,848)(483,296)

31,997,489(Unit: thousands of yen)

Valuation and translation
adjustments

Unitholders’ equity
Surplus

Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus

Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
periodTotal net assets

Total surplus

957,584

957,584

33,062,679(895,682)(895,682)(895,682)(895,682)(14,306)(14,306)(93,300)(93,300)

921,201

921,201

Distributions in excessof earnings fromallowance fortemporary difference
adjustments
Distributions in excessof earnings from other
distributions
Net income

Total valuation
Total unitholders’ Deferred gains or
and translation
equitylosses on hedges
adjustments

Unappropriatedretained earnings(undisposed loss)

921,201

921,201(61,746)(61,746)

33,000,933

45,94645,94645,94625,51925,519(82,087)

45,94645,946(36,140)

983,103

983,103

32,980,592(15,799)(15,799)

32,964,792

The accompanying notes are an integral part of these financial statements.

- 26 -

Current fiscal period (from August 1, 2021, to January 31, 2022)(Unit: thousands of yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’capitalBalance at beginning ofcurrent period
Changes of items during
periodAllowance fortemporarydifference
adjustments

32,480,785(61,448)

Other deduction Total deduction
from unitholders' from unitholders'
capitalcapital(421,848)

Unitholders'
capital, net(483,296)

31,997,489

45,94645,946(94,544)(94,544)(94,544)

Dividends of surplus
Reversal of allowancefor temporary
difference adjustments
Distributions in excessof earnings from other
distributions

45,946

Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
period*1－

45,946(94,544)(48,597)(48,597)

32,480,785(15,501)(516,392)(531,894)

31,948,891(Unit: thousands of yen)

Valuation and translation
adjustments

Unitholders’ equity
Surplus

Balance at beginning ofcurrent period
Changes of items during
periodDividends of surplus
Reversal of allowancefor temporary
difference adjustments
Distributions in excessof earnings from other
distributions
Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
periodTotal valuation
Total unitholders’ Deferred gains or
and translation
equitylosses on hedges
adjustments

Total net assets

Unappropriatedretained earnings(undisposed loss)

Total surplus

983,103

983,103

32,980,592(921,184)(921,184)(921,184)(921,184)(45,946)(45,946)－－(94,544)(94,544)913,069

913,069

913,069

913,069(15,799)(15,799)

32,964,792

4,915

4,915

4,915

(54,061)(54,061)(102,659)

4,915

4,915

(97,743)

929,041

929,041

32,877,933(10,884)(10,884)

32,867,048

The accompanying notes are an integral part of these financial statements.

- 27 -

(4) Statement of Cash Distributions(Unit: yen)
Type
I.

Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Unappropriated retained earnings

983,103,252

929,041,635

II. Distributions in excess of earnings

94,544,304
94,544,304

95,788,308
95,788,308

III. Incorporation into unitholders’ capital

45,946,358

4,915,566

Reversal of allowance for temporary
difference adjustments

45,946,358

4,915,566

1,015,729,266[3,266]921,184,962[2,962]

1,008,887,244[3,244]
913,098,936[2,936]

94,544,304

95,788,308

[304]

[308]

15,971,932

11,027,133

Other deduction from unitholders’ capital

IV. Distributions[Distributions per unit]
Distributions of earnings(Distributions of earnings per unit)
Distributions in excess of earnings fromother distributions(Distributions in excess of earnings per unit
(for distributions in excess of earnings fromother distributions ))V. Retained earnings carried forward

Calculation method for distributions

In accordance with the cash
distributions policy described in Article
36, Paragraph 1 of its Articles ofIncorporation, HCM determines thatthe amount of distributions shallexceed the amount equivalent to 90%
of its distributable profit as stipulated
in Article 67-15 of the Act on Special
Measures Concerning Taxation, andshall be up to its profits as defined in
Article 136, Paragraph 1 of theInvestment Trust Act. Following thispolicy, HCM has decided that it shall
distribute 921,184,962 yen as the
distributions of earnings, which isroughly the entire amount arrived atafter deducting the reversal of
allowance for temporary difference
adjustments (as defined in Article 2,
Paragraph 2, Item (30) of the
Calculation Rules for Investment
Corporations) from profits as definedin Article 136, Paragraph 1 of theInvestment Trust Act. Accordingly,
distributions of earnings per unit was
2,962 yen.
Furthermore, in accordance with thepolicy for cash distributions in excessof earnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation, HCM is to conduct
distributions in excess of earnings(return of capital that falls under the
category of distributions reducing
unitholders’ capital for tax purposes)
in each period on a continuous basis.
During the current fiscal period, HCM
has decided to distribute 94,544,304
yen, an amount roughly equivalent to- 28 -In accordance with the cash
distributions policy described in Article
36, Paragraph 1 of its Articles ofIncorporation, HCM determines thatthe amount of distributions shallexceed the amount equivalent to 90%
of its distributable profit as stipulated
in Article 67-15 of the Act on Special
Measures Concerning Taxation, andshall be up to its profits as defined in
Article 136, Paragraph 1 of theInvestment Trust Act. Following thispolicy, HCM has decided that it shall
distribute 913,098,936 yen as the
distributions of earnings, which isroughly the entire amount arrived atafter deducting the reversal of
allowance for temporary difference
adjustments (as defined in Article 2,
Paragraph 2, Item (30) of the
Calculation Rules for Investment
Corporations) from profits as definedin Article 136, Paragraph 1 of theInvestment Trust Act. Accordingly,
distributions of earnings per unit was
2,936 yen.
Furthermore, in accordance with thepolicy for cash distributions in excessof earnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation, HCM is to conduct
distributions in excess of earnings(return of capital that falls under the
category of distributions reducing
unitholders’ capital for tax purposes)
in each period on a continuous basis.
During the current fiscal period, HCM
has decided to distribute 95,788,308
yen, an amount roughly equivalent toTypeCalculation method for distributions(Note 1)

Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

20% of the depreciation recorded in
the current fiscal period, as
distributions in excess of earnings. As aresult, distributions in excess ofearnings per unit (of distributions inexcess of earnings from other
distributions) came to 304 yen.
As a result, distributions per unit came
to 3,266 yen.

20% of the depreciation recorded in
the current fiscal period, as
distributions in excess of earnings. As aresult, distributions in excess ofearnings per unit (of distributions inexcess of earnings from other
distributions) came to 308 yen.
As a result, distributions per unit came
to 3,244 yen.

Distributions in excess of earnings are distributed up to the amount equivalent to 20% of the depreciation recorded in the accounting period
immediately before the accounting period when HCM will pay said distributions, sufficiently taking into consideration the amount of capital
expenditure necessary for maintaining and improving the competitiveness of HCM’s assets under management, the financial position of HCM
and other factors.
However, distributions in excess of earnings may be conducted up to an amount lower than the above amount or may not be conducted when
the implementation of distributions in excess of earnings up to the said amount is judged to be inappropriate based on the economic
environment surrounding HCM, trends of the real estate market and leasing market, status of HCM’s assets under management and financial
conditions.

(Note 2)

Under the rules of The Investment Trusts Association, closed-end investment corporations are allowed to conduct distributions in excess ofearnings up to an amount equivalent to 60% of the depreciation recorded on the last day of the accounting period.

- 29 -

(5) Statement of Cash Flows(Unit: thousands of yen)
Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021
Cash flows from operating activities
Income before income taxes

922,091

913,938

Depreciation

474,103479,758

Amortization of investment corporation bond issuance
costs

1,040

1,040

Borrowing expenses

55,95555,789Amortization of investment unit issuance costs

6,424

6,424

(8)

(6)

Interest expenses

94,40095,814

Decrease (increase) in operating accounts receivable(3,042)960

Decrease (increase) in prepaid expenses(1,784)(302)

Increase (decrease) in operating accounts payable

29,450(17,637)

Increase (decrease) in accounts payable - other(6,607)

4,228

Increase (decrease) in consumption taxes payable

7,526

2,135

Increase (decrease) in accrued expenses(2,698)2,969

Increase (decrease) in advances received

5,480(2,524)

Decrease (increase) in long-term prepaid expenses

7,309

4,458

－

668

(635)

(463)

1,589,005

1,547,2528

6(94,879)(96,314)

(908)

(888)

1,493,226

1,450,055

Purchase of property, plant and equipment in trust(832,014)(148,208)

Proceeds from tenant leasehold and security deposits

60,000-(772,014)(148,208)－

7,000,000

Interest income

Increase (decrease) in deposits received
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities

Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term loans payable
Repayments of long-term loans payable－(7,000,000)(1,598)(103,748)

Dividends paid

(1,003,300)(1,015,814)

Net cash provided by (used in) financing activities(1,004,898)(1,119,562)

Net increase (decrease) in cash and cash equivalents(283,687)

182,284

Cash and cash equivalents at beginning of period

1,886,239

1,602,552*1 1,602,552*1 1,784,836

Borrowing expenses

Cash and cash equivalents at end of period
The accompanying notes are an integral part of these financial statements.

- 30 -

(6) Notes to Financial Statements[Organization]
Healthcare & Medical Investment Corporation (hereinafter, “HCM”) was established under the Act on Investment Trusts andInvestment Corporations (Act No. 198 of 1951, as amended; hereinafter, the “Investment Trust Act”) with Healthcare AssetManagement Co., Ltd. (hereinafter, the “Asset Management Company” or “HAM”) as the organizer on December 9, 2014. HCM
was listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, the “Tokyo Stock
Exchange”) on March 19, 2015 (securities code: 3455).
The total number of investment units issued and outstanding as of the end of the fiscal period ended January 2022 (August 1,
2021 to January 31, 2022) (hereinafter, the “14th fiscal period” or the “current fiscal period”) stands at 311,001 units.
[Basis of Presentation]
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trusts
Act, the Financial Instruments and Exchange Act of Japan and other related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (hereinafter, “Japanese GAAP”), which are different in certain aspects as to theapplication and disclosure requirements from International Financial Reporting Standards (hereinafter, “IFRS”) or accounting
principles generally accepted in the United States of America (hereinafter, “U.S. GAAP”).
The accompanying financial statements are the translation of the financial statements presented in the securities report of theInvestment Corporation submitted to the Kanto Local Finance Bureau, which have been prepared in compliance with Japanese
GAAP, translated into English.
Amounts less than one thousand yen have been omitted. As a result, the totals presented in the accompanying financial
statements in yen do not necessarily agree with the sums of the individual amounts. The Investment Corporation does not havesubsidiaries and thus does not prepare consolidated financial statements.
The accounting periods of the Investment Corporation are six-month periods ending at the end of February and the end of Augustof each year.
[Going Concern Assumption]
Not applicable.
[Summary of Significant Accounting Policies](1) Property, plant and equipment
1. Method of depreciation of nonThe straight-line method is adopted.
current assets
The useful life of principal property, plant and equipment is as follows.
Buildings in trust
5-69 years
Structures in trust
10-53 years
Machinery and equipment in trust
10 years
Tools, furniture and fixtures in trust
6-15 years(2) Intangible assets
The straight-line method is adopted.
2. Accounting for deferred assets

3. Standards for revenue andexpense recognition(1) Investment unit issuance costs
Depreciated evenly over 3 years.
(2) Investment corporation bond issuance costs
Amortized using the straight-line method over the maturity period.
(1) Accounting for property taxes
For property tax, city planning tax, depreciable asset tax on real estate. owned, theaccounting is that, of the tax amount assessed and determined, the amountcorresponding to the concerned accounting period is expensed as expenses related toleasing business.
In connection with the acquisition of real estate, including trust beneficiary interests inreal estate, the amount equivalent to real property tax for the initial fiscal year, which
was settled with the seller, is not recorded as expenses but included in the cost of
acquisition of the concerned real estate. The amount equivalent to property tax includedin the cost of acquisition of real estate was 1,825 thousand yen for the previous fiscal
period and none for the current fiscal period.

- 31 -

4. Method of hedge accounting

5. Scope of cash and cash
equivalents stated in thestatement of cash flows
6. Other matters serving as thebasis for preparation of financial
statements(2) Accounting standard for revenue recognition
The contents of major performance obligations concerning revenue arising fromcontracts with customers of HCM and the general timing to satisfy such performanceobligations (general timing to recognize the revenue) are as follows.
Sale of real estateWith regard to sale of real estate, revenue is recorded when the buyer (customer)
obtains control of the real estate as a result of HCM fulfilling the delivery obligation set
forth in the contract pertaining to the sale of real estate.
(1) Hedge accounting approach
Deferred hedge accounting. Special treatment is applied for interest rate swap
transactions that satisfy the requirements for special treatment.
(2) Hedging instruments and hedged items
Hedging instrument: Interest rate swap transactions
Hedged items: Interest on loans(3) Hedging policy
HCM conducts interest rate swap transactions for the purpose of hedging the risks
provided in its Articles of Incorporation, pursuant to the risk management basic policy.
(4) Method of assessing hedge effectivenessHedge effectiveness is assessed by comparing the cumulative fluctuation of cash flows
for hedging instruments and the cumulative fluctuation of cash flows for hedge items
and confirming the ratio of both fluctuations. However, the hedge effectivenessassessment is omitted for interest rate swap transactions that satisfy the requirements
for special treatment.
Cash and cash equivalents in the statement of cash flows are comprised of cash on handand cash in trust, demand deposits and deposits in trust, and short-term investments witha maturity of three months or less from the date of acquisition that are readily convertible
into cash and that are subject to an insignificant risk of changes in value.
(1) Accounting policy for trust beneficiary interests in real estate
Concerning trust beneficiary interests in real estate owned, all accounts of assets andliabilities within trust assets, as well as all accounts of revenue and expenses from thetrust assets are recognized in the relevant line item account of the balance sheet andthe statement of income.
The following material items for the trust assets recognized in the relevant line item
account are separately listed on the balance sheet.
1) Cash and deposits in trust2) Buildings in trust; structures in trust; machinery and equipment in trust; tools,
furniture and fixtures in trust; land in trust; Construction in progress in trust3) Tenant leasehold and security deposits in trust(2) Accounting for consumption tax
Consumption tax and local consumption tax are excluded from transaction amounts.
Non-deductible consumption taxes on the acquisition of assets is included in the cost of
the acquisition of each asset.

[Changes in Accounting Policies］
1. Application of the Accounting Standard for Revenue Recognition
The Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, March 31, 2020) has been applied from the
beginning of the current fiscal period. As a result, when control of the promised goods or services is transferred to the customer,
revenue is to be recognized at the amount expected to be received in exchange for those goods or services. The effect of thischange on the financial statements is immaterial.
In accordance with the transitional treatment stipulated in Paragraph 89-3 of the Accounting Standard for Revenue
Recognition, notes related to revenue recognition for the previous period are not presented.
2. Application of Accounting Standard for Fair Value Measurement
The Accounting Standard for Fair Value Measurement (ASBJ Statement No. 30, July 4, 2019) has been applied from the
beginning of the current fiscal period. In accordance with the transitional treatment prescribed in Paragraph 19 of the
Accounting Standard for Fair Value Measurement and Paragraph 44-2 of the Accounting Standard for Financial Instruments(ASBJ Statement No. 10, July 4, 2019), the new accounting policy prescribed by the Accounting Standard for Fair Value
Measurement will be applied going forward. The effect of this change on the financial statements is immaterial.

- 32 -

[Additional Information][Provision and Reversal of Allowance for Temporary Difference Adjustments]
Previous fiscal period (from February 1, 2021, to July 31, 2021)
1. Reasons, related assets and amounts of reversal
Due to the decrease of deferred losses on hedges of 45,946 thousand yen within the statement of cash distributions from theassessment of fair value of interest rate swap transactions to which hedge accounting is applied, 45,946 thousand yen ofallowance for temporary difference adjustments for elimination of the amount has been reversed.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of allowance for temporary difference
adjustments will be reversed.
Current fiscal period (from August 1, 2021, to January 31, 2022)
1. Reasons, related assets and amounts of reversal
Due to the decrease of deferred losses on hedges of 4,915 thousand yen within the statement of cash distributions from theassessment of fair value of interest rate swap transactions to which hedge accounting is applied, 4,915 thousand yen ofallowance for temporary difference adjustments for elimination of the amount has been reversed.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of allowance for temporary difference
adjustments will be reversed.
[Balance Sheet]*1 Government grants received related to assets acquired were deducted from the carrying amount of property, plant andequipment. The amount deducted from the carrying amount was below.
(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2021)
Buildings in trust

Current fiscal period(As of Jan. 31, 2022)

10,041

10,041*2 Minimum net assets of at least ¥50 million as required by the Investment Trust Law(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2021)

Current fiscal period(As of Jan. 31, 2022)

50,00050,000*3 Allowance for temporary difference adjustments
Previous fiscal period (from February 1, 2021, to July 31, 2021)
1. Reasons, related assets and amounts

Related assets

ReasonInitialamount(Unit: thousands of yen)
Balance at Reserved Reversed Balance at
beginning amount in amount in
end ofReason forof current current
current
current
reversal
periodperiodperiodperiodLoss on interest-rate
Deferred gains or losses
swaps recognized at theon hedges
end of current period

25,68347,142

14,306―61,448―

Total

25,68347,142

14,306―61,448―

2. Method of reversal(1) Deferred gains or losses on hedges
The allowance will be revered corresponding to future change in values of the hedging derivatives.

- 33 -

Current fiscal period (from August 1, 2021, to January 31, 2022)
1. Reasons, related assets and amounts

Related assets

ReasonInitialamountLoss on interest-rate
Deferred gains or losses
swaps recognized at theon hedges
end of current period

25,683

Total

25,683(Unit: thousands of yen)
Balance at Reserved Reversed Balance at
beginning amount in amount in
end ofReason forof current current
current
current
reversal
periodperiodperiodperiodChanges in
the fair
61,448―(45,946)
15,501 value ofderivativetransactions
61,448―(45,946)

15,501―

2. Method of reversal(1) Deferred gains or losses on hedges
The allowance will be revered corresponding to future change in values of the hedging derivatives.
[Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing business(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021
Operating revenue from real estateleasing businessLeasing business revenues
Rent revenue
Other revenue related to leasing business
Other revenue
Total operating revenue from real estateleasing business
B. Operating expenses from real estateleasing business
Expenses related to leasing business
Property tax
Outsourcing expenses
Repair expenses
Insurance expenses

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

A.

Depreciation
Other expenses related to leasing businessTotal operating expenses from real estateleasing business
C. Operating income (loss) from real estateleasing business [A-B]

2,062,148

2,069,514

10,88910,921

2,073,038

2,080,436

142,218
28,893
22,5798,622
473,904
14,778142,184
29,283
26,664
8,683
479,559
14,903690,998

701,277

1,382,040

1,379,159[Statement of Unitholders’ Equity]*1 Total number of investment units authorized and total number of investment units issued and outstanding
Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021
Total number of investment units
authorized
Total number of investment units
issued and outstanding

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

10,000,000 units

10,000,000 units

311,001 units

311,001 units- 34 -

[Statement of Cash Flows]*1 Reconciliation of cash and cash equivalents at end of period and relevant amount on the balance sheet(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

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

1,482,160
207,158(86,766)

1,689,721
181,881(86,766)

Cash and cash equivalents

1,602,552

1,784,836(Note) Restricted deposits in trust refer to deposits in trust reserved for refunds of leaseholds received from tenants.

[Operating Lease Transactions]Non-cancellable operating leases (lessor side)(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2021

Current fiscal period
As of Jan. 31, 2022

Due within 1 year
Due after 1 year

3,106,350
10,166,481

2,771,384
8,910,935

Total

13,272,832

11,682,320[Financial Instruments]
1. Our policy on financial instruments(1) Policy for financial instruments
Pursuant to the policy of conducting stable and sound financial management, HCM raises funds for asset acquisition,
repayment of loans by means of loans from banks, issuance of investment corporation bonds or issuance of new investment
units. As to finance by loans and issuance of investment corporation bonds, HCM pays attention to extending periods, fixing
interest rates, diversifying repayment dates and such to secure financial stability and avoid the risk of rise in interest rates
in the future.
Derivative transactions shall be limited to those invested in for the purpose of hedging the risk of fluctuations in interest
rates on HCM’s loans.
(2) Description of financial instruments and associated risks, and risk management system
Loans and proceeds from issuance of investment corporation bonds are used primarily for the acquisition of trust
beneficiary interests in real estate and repayment of debts.
Although borrowings and investment corporation bonds are exposed to liquidity risks on the repayment or maturity date,the impact of rising market interest rates on the management of HCM is limited through appropriate management of theratio of interest-bearing liabilities, and such risks are controlled through diversification of repayment and redemption dates.
Although borrowings with floating interest rates are exposed to interest rate fluctuation risks, the ratios of loan balanceswith floating rates and fixed rates against all loans are adjusted according to the financing environment. Furthermore,derivative transactions (interest rate swap transactions) have been used for part of loans with floating rates to avoid interest
fluctuation risks and to fix interest payment. Execution/management of derivative transactions carried out for the purposeof hedging interest rate fluctuation risks is conducted pursuant to provisions that stipulate the basic policy of risk
management.
Although tenant leasehold and security deposits as well as tenant leasehold and security deposits in trust are deposits fromtenants and are exposed to liquidity risks at the time of refunding upon tenants’ vacancies, HCM controls liquidity risks by
securing liquidity at hand to a certain degree and other measures.

- 35 -

For deposits, such risks are controlled by setting lower limits to the credit rating of financial institutions at which deposits
are made (excluding deposits for settlement).
(3) Supplementary explanation to fair value of financial instruments
Certain assumptions are adopted in the calculation of the fair value of financial instruments. Accordingly, there may becases where the concerned values will differ when different assumptions are adopted.
2. Fair value of financial instruments
Carrying amount, fair value and difference between the two were as follows. Notes to "Cash and deposits" and "Cash anddeposits in trust" have been omitted because their fair values approximate their book values. This is due to their nature as
cash and as accounts settled over the short term. In addition, "Tenant leasehold and security deposits," "Tenant leasehold
and security deposits in trust," "Accounts payable - other," "Operating accounts payable," "Accrued expenses," "Security
deposits," and "Operating accounts receivable" are immaterial and have been omitted.
Previous fiscal period (from February 1, 2021, to July 31, 2021)(Unit: thousands of yen)
Carrying amount

Fair value

Difference(1) Current portion of long-term loans payable

7,000,000

7,006,414

6,414(2) Investment corporation bonds

2,000,000

2,006,000

6,000(3) Long-term loans payable

24,150,000

24,149,543(456)

33,150,000

33,161,957

11,957(14,581)(14,581)―

Total liabilities(4) Derivative transactions

Current fiscal period (from August 1, 2021, to January 31, 2022)(Unit: thousands of yen)

Carrying amount

Fair value

Difference(1) Current portion of long-term loans payable

9,250,000

9,249,951(48)(2) Investment corporation bonds

2,000,000

1,993,800(6,200)(3) Long-term loans payable

21,900,000

21,895,362(4,637)33,150,000

33,139,114(10,885)

(410)

(410)

―

Total liabilities(4) Derivative transactions(Note 1) Method of calculation of the fair value of financial instruments and matters concerning derivative transactions(1) Current portion of long-term loans payable; (3) Long-term loans payable
For those with floating interest rates that reflect market interest rates within a short period of time, the book value is deemed to be areasonable approximation of the fair value as there are no significant changes in HCM’s credit standing after borrowing; therefore, thebook value is used as the fair value equivalent. Those with fixed interest rates are calculated by discounting the sum of principal and interest(*) at a reasonable rate estimated for a similar loan that is made corresponding to the remaining period.
(*) For long-term loans with floating interest rates to which special treatment for interest rate swaps is applied (please refer to “Derivative
Transactions” below), the sum of principal and interest under the interest rates after the interest rate swaps are indicated.
(2) Investment corporation bonds
Figures are calculated based on the reference statistics of transactions provided by the Japan Securities Dealers Association.
(4) Derivative transactions
Please refer to “Derivative Transactions” below.
(Note 2) Amount of repayment of borrowings and other interest-bearing liabilities scheduled to be due after the account closing datePrevious fiscal period (As of July 31, 2021)(Unit: thousands of yen)

Investment
corporationbonds

Due after 1 year Due after 2 years Due after 3 years Due after 4 years
Due within 1 year
and within 2 years and within 3 years and within 4 years and within 5 years

―

―

―

- 36 -――

Due after
5 years

2,000,000

Due within 1 year

Due after 1 year Due after 2 years Due after 3 years Due after 4 years
and within 2 years and within 3 years and within 4 years and within 5 years

Due after
5 years

Long-term loans
payable7,000,000

9,250,000

7,250,000

4,450,000

3,200,000

―

Total

7,000,000

9,250,000

7,250,000

4,450,000

3,200,000

2,000,000

Current fiscal period (As of January 31, 2022)(Unit: thousands of yen)

Investment
corporationbonds
Long-term loans
payableTotal

Due after 1 year Due after 2 years Due after 3 years Due after 4 years
Due within 1 year
and within 2 years and within 3 years and within 4 years and within 5 years

Due after
5 years

―

―

―

―

―

2,000,000

9,250,000

7,250,000

5,550,000

3,200,000

5,900,000―

9,250,000

7,250,000

5,550,000

3,200,000

5,900,000

2,000,000[Securities]
Previous fiscal period (As of July 31, 2021)
Not applicable.
Current fiscal period (As of January 31, 2022)
Not applicable.
[Derivative Transactions]
1. Derivative transactions to which hedge accounting is not applied
Previous fiscal period (As of July 31, 2021)
Not applicable.
Current fiscal period (As of January 31, 2022)
Not applicable.
2. Derivative transactions to which hedge accounting is applied
The following table shows the contracted amount or principal amount equivalent or the like set forth in the contract as of
the balance sheet date for each hedge accounting method.
Previous fiscal period (As of July 31, 2021)(Unit: thousands of yen)
Method ofhedge
accounting

Derivative Instruments

Hedged item

Contract amountDue after 1
year

Fair value

Method ofcalculation for thefair value

Principle
accounting
methodInterest rate swap
transaction
Long-term loans
Floating receivable; fixed payablepayable21,400,000

21,400,000(14,581)Specialtreatment forinterest rate
swaps

Interest rate swap
transaction
Long-term loans
Floating receivable; fixed payablepayableBased on theprice presented
by corresponding
financial
institutions

1,000,000

1,000,000(Note)―

22,400,000

22,400,000(14,581)―

Total(Note) Since those with special treatment of interest rate swaps are treated integrally with hedged long-term loans payable, the market values of suchare shown as included in the fair value in “(3) Long-term loans payable” in “[Financial Instruments], 2. Fair value of financial instruments” above.

- 37 -

Current fiscal period (As of January 31, 2022)
Method ofhedge
accounting

Derivative Instruments(Unit: thousands of yen)
Hedged item

Contract amountDue after 1
year

Method ofFair value calculation for thefair value

Principle
accounting
methodInterest rate swap
transaction
Floating receivable;
fixed payable

Long-term loans
payable27,300,000

19,300,000(410)

Specialtreatment forinterest rate
swaps

Interest rate swap
transaction
Floating receivable;
fixed payable

Based on theprice presented
by corresponding
financial
institutions

Long-term loans
payable1,000,000

1,000,000(Note)―

28,300,000

20,300,000

(410)

―

Total

(Note) Since those with special treatment of interest rate swaps are treated integrally with hedged long-term loans payable, the market values of suchare shown as included in the fair value in “(3) Long-term loans payable” in “[Financial Instruments], 2. Fair value of financial instruments” above.

[Retirement Benefits]
Previous fiscal period (As of July 31, 2021)
Not applicable.
Current fiscal period (As of January 31, 2022)
Not applicable.
[Tax-Effect Accounting]
1. Breakdown of deferred tax assets and deferred tax liabilities(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2021

Current fiscal period
As of Jan. 31, 2022

Deferred tax assets
Non-deductible accrued enterprise tax

13

12

Deferred gains or losses on hedges

5,805

10,603

Subtotal deferred tax assets

5,819

10,615

Valuation allowance(5,805)(10,603)

Total deferred tax assets
Deferred tax liabilities
Deferred gains or losses on hedges

13

12(1,217)(10,473)

Net deferred tax assets (liabilities)(1,204)(10,461)

2. Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate
(Unit: %)Previous fiscal period
As of Jul. 31, 2021
Statutory tax rate
[Adjustments]
Deductible distributions payable
Other
Effective income tax rate

- 38 -

Current fiscal period
As of Jan. 31, 2022

31.46

31.46

(31.43)0.07(31.43)(0.03)

0.10

0.00

[Share of Profit (Loss) of Affiliates Accounted for Using Equity Method]
Previous fiscal period (As of July 31, 2021)
Not applicable.
Current fiscal period (As of January 31, 2022)
Not applicable.
[Related-Party Transactions]
1. Parent company, major corporate unitholders.
Previous fiscal period (from February 1, 2021, to July 31, 2021)
Not applicable.
Current fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
2. Affiliated company and other
Previous fiscal period (from February 1, 2021, to July 31, 2021)
Not applicable.
Current fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
3. Fellow subsidiary company and other
Previous fiscal period (from February 1, 2021, to July 31, 2021)
Not applicable.
Current fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
4. Director, major individual unitholder and other
Previous fiscal period (from February 1, 2021, to July 31, 2021)
Not applicable.
Current fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
[Asset Retirement Obligations]
Previous fiscal period (As of July 31, 2021)
Not applicable.
Current fiscal period (As of January 31, 2022)
Not applicable.

- 39 -

[Investment and Leasing Properties]
HCM owns healthcare facilities (37 properties in total) primarily in the Three Major Metropolitan Areas and Core Cities. The
carrying amount, amount of increase (decrease) during the period and fair value of these investment and leasing properties
are as follows:(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Carrying amount
Balance at beginning of period

66,423,062

66,877,828

Amount of increase (decrease)during period

454,765(352,254)

66,877,828

66,525,573

72,531,000

73,485,000

Balance at end of period
Fair value at end of period(Note 1) “Carrying amount” is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Out of the amount of increase (decrease) during the previous fiscal period, the amount of increase is mainly attributable to acquisition (755,067
thousand yen) comprised of the property acquisition of Nichii Home Nishikokubunji. The amount of decrease is mainly attributable todepreciation (473,904 thousand yen). Out of the amount of increase (decrease) during the current fiscal period, the amount of decrease ismainly attributable to depreciation (479,559 thousand yen).
(Note 3) “Fair value at end of period” is the appraisal value or survey value by an outside real estate appraiser.

The profit (loss) concerning investment and leasing properties is as stated in “Statement of Income” above.
[Revenue Recognition]
Current fiscal period (from August 1, 2021, to January 31, 2022)
Information has been omitted due to the immateriality of the eligible revenue.
[Segment Information]
1.

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

2. Related information
Previous fiscal period (from February 1, 2021, to July 31, 2021)(1) Information on products and services
Disclosure has been omitted because net sales to external customers for a single products and services category
exceeds 90% of operating revenue on the statement of income.
(2) Information on geographic areas
1) Operating revenues

2)

Disclosure has been omitted because net sales to external customers in Japan exceeds 90% of operating
revenue on the statement of income.
Property, plant and equipment

Disclosure has been omitted because the amount of property, plant and equipment located in Japan exceeds
90% of the amount of property, plant and equipment on the balance sheet.
(3) Information on major customers
Disclosure has been omitted because consent has not been obtained from the tenant.

- 40 -

Current fiscal period (from August 1, 2021, to January 31, 2022)(1) Information on products and services
Disclosure has been omitted because net sales to external customers for a single products and services category
exceeds 90% of operating revenue on the statement of income.
(2) Information on geographic areas
1) Operating revenues
Disclosure has been omitted because net sales to external customers in Japan exceeds 90% of operating
revenue on the statement of income.
2) Property, plant and equipment
Disclosure has been omitted because the amount of property, plant and equipment located in Japan exceeds
90% of the amount of property, plant and equipment on the balance sheet.
(3) Information on major customers
Disclosure has been omitted because consent has not been obtained from the tenant.
[Per Unit Information]
Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Net assets per unit

105,995 yen

105,681 yen

Net income per unit

2,962 yen

2,935 yen

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

Previous fiscal period
From: Feb. 1, 2021
To: Jul. 31, 2021
Net income (thousands of yen)

Current fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

921,201

913,069――

Net income attributable to common investment units(thousands of yen)921,201

913,069

Average number of investment units during period (units)

311,001

311,001

Amount not attributable to common unitholders (thousands of yen)

- 41 -

[Significant Subsequent Events]
1. Acquisition of assets
On January 17, 2022, HCM entered into a purchase agreement for the acquisition of the Assets to Be Acquired in the 15th
Fiscal Period, and on February 1, 2022, HCM acquired SOMPO CARE La vie Re Kobeikawadani, SOMPO CARE Sompo no ie
Sayama, Royal Kawaguchi, NOAH GARDEN LEGEND, NOAH GARDEN L Grace and NOAH GARDEN CASA RICH. Acquisition of
NOAH GARDEN Season Bell, Heartland Kawaguchi Meiseien, Granda Minamiurawa, and Madoka Minamiurawa is scheduled
to be completed in March 2022.

Property
number

Property nameLocation

Acquisition price(Note)(millions of yen)

Date ofacquisition

Paid nursing
home-34

SOMPO CARE La vie Re Kobeikawadani

Kobe-shi, Hyogo

1,288

Feb. 1, 2022

Paid nursing
home-35

SOMPO CARE Sompo no ie Sayama

Sakai-shi, Osaka

600

Feb. 1, 2022

Paid nursing
home-36

Royal Kawaguchi

Kawaguchi-shi, Saitama

1,260

Feb. 1, 2022

Paid nursing
home-37

NOAH GARDEN LEGEND

Sapporo-shi, Hokkaido

859

Feb. 1, 2022

Paid nursing
home-38

NOAH GARDEN L Grace

Sapporo-shi, Hokkaido

622

Feb. 1, 2022

Paid nursing
home-39NOAH GARDEN Season Bell

Sapporo-shi, Hokkaido

1,350

Mar. 30, 2022

Paid nursing
home-40

Heartland Kawaguchi Meiseien

Kawaguchi-shi, Saitama

2,000

Mar. 30, 2022

Paid nursing
home-41

Granda Minamiurawa

Kawaguchi-shi, Saitama

1,022

Mar. 30, 2022

Paid nursing
home-42

Madoka Minamiurawa

Kawaguchi-shi, Saitama

822

Mar. 30, 2022

Servicedhousing forthe elderly-3

NOAH GARDEN CASA RICH

Sapporo-shi, Hokkaido

1,619

Feb. 1, 2022

─11,442─

Total(Note)

─Acquisition price does not include acquisition-related expenses, property tax, city planning tax, consumption tax and local consumption tax.

2. Issuance of new investment units
In accordance with the resolutions of the Board of Directors on January 17, 2022, and January 25, 2022, HCM determined toissue 46,190 new investment units through public offering and 2,309 new investment units via third-party allotment withSMBC Nikko Securities Inc. as an allotted party and to use the proceeds to fund a portion of the acquisition for Assets to Be
Acquired in the 15th Fiscal Period. Payment for the new investment units through public offering and third-party allotment
was completed on February 1, 2022, and March 1, 2022, respectively, with a total payment of 5,843 million yen. As a result,
total unitholders' capital amounted to 38,323 million yen and the total number of investment units issued and outstanding
was 359,500 units.
Issuance of New Investment Units through Public Offering (Primary Offering)Number of new investment units issued: 46,190 units

Issue price (offer price): 124,764 yen per unit

Total issue price (total offer price): 5,762,849,160 yen

Paid-in amount (issue amount): 120,477 yen per unit

Total paid-in amount (total issue amount): 5,564,832,630 yen

Payment date

: February 1, 2022 (Tue.)- 42 -

Issuance of New Investment Units through Third-Party Allotment
Number of new investment units issued: 2,309 units
Paid-in amount (issue amount): 120,477 yen per unit

Total paid-in amount (total issue amount): 278,181,393 yen

Payment date

: March 1, 2022 (Tue.)Allotted party: SMBC Nikko Securities Inc.

- 43 -

3. Borrowings
HCM conducted the following borrowings to allocate to a portion of the acquisition and its related expenses for the Assets
Acquired in the 15th Fiscal Period.
Type

Short
term

LenderSumitomo Mitsui
Banking
Corporation

Borrowing amount2 billion yen

Interest rate
(Note 1)

Base interest rate
(JBA 3-month
Japanese yen
TIBOR) + 0.25%

Drawdown
date

Borrowing
methodRepayment
date

March 30,
2022

Borrowings
based on theindividual termloan agreement
as of March 28,
2022, with thecompany on theleft as a lender

March 30,
2023

Repayment
methodRemarks

A syndicate of
Lump-sum
Unsecuredlenders arranged
repayment
andby Sumitomo
January 31,
0.543%
Borrowings
on maturity unguaranteed
700 million yen
Mitsui Banking2026
based on the(Note 4)
Corporation (Noteindividual termLong 2)
March 30, loan agreement
term A syndicate of2022
as of March 28,
2022, with thelenders arranged
company on the January 31,
by Sumitomo
0.822%
2.8 billion yenleft as a lender
Mitsui Banking
2028(Note 4)
Corporation (Note3)(Note 1) Loan fees and other fees paid to lenders are not included.
(Note 2) The loan syndicate is composed of Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust Bank, Limited.
(Note 3) The loan syndicate is composed of Sumitomo Mitsui Banking Corporation, Resona Bank, Limited, Shinkin Central Bank, The Bank ofFukuoka, Ltd., The Dai-ichi Life Insurance Company, Limited, The 77 Bank, Ltd., The Gunma Bank, Ltd. and The Bank of Yokohama,
Ltd.
(Note 4) As HCM entered into an interest rate swap agreement, the interest rate which was effectively fixed based on such agreement isindicated- 44 -

(7) [Supplementary Schedules]
1) Securities(a) Stocks
Not applicable.
(b) Securities other than stocks
Not applicable.
2) Contracted amount and fair value of derivative transactions and forward exchange transactions(Unit: thousands of yen)Classification

Contracted amount (Note 1)

Type

Due after 1 year

Fair value(Note 2) (Note 3)

Transaction other than Interest rate swap transaction
market transaction
Floating receivable; fixed payable

28,300,000

20,300,000(2,235)

Total

28,300,000

20,300,000(2,235)(Note 1) The contracted amount for interest rate swap transactions is based on the notional principal amount.
(Note 2) The value is calculated by the counterparty of the relevant transaction contract based on the prevailing market interest rate.
(Note 3) Of the fair value amounts, transactions for which exceptional accounting treatment for interest rate swaps is applied in accordance with the
Accounting Standard for Financial Instruments (ASBJ Statement No. 10, March 10, 2008) are not assessed at fair value in the balance sheets.

- 45 -

3) Property, plant and equipment and intangible assets

Intangible
assetsProperty, plant and equipment(Unit: thousands of yen)
DecreaseduringperiodAccumulated depreciation
Balance at
Net balanceend ofat end ofor
For theperiodperiodaccumulated
periodamortization

Asset type

Balance at Increase
beginning of during
periodperiodBuildings intrust

33,266,152

85,438

─ 33,351,590

Structures in
trust

91,8554,331

─

96,187

14,2081,599

81,978

─

19,499──

19,4997,049

974

12,450─

259,026

38,690─

297,717

88,20922,948

209,508─Land in trust

37,482,822

── 37,482,822

── 37,482,822

─Constructionin progress in
trust

6,270

5,113

5,113

─

─

Subtotal

71,125,625

133,574

6,270 71,252,929

4,727,356

Software

11,088──

11,088

10,889

198

198

─

Subtotal

11,088──

11,088

10,889

198

198

─

71,136,714

133,574

6,270 71,264,018

4,738,246

479,758 66,525,772

─Machinery andequipment in
trust
Tools,
furniture andfixtures in
trust

Total

6,270

4,617,889

Notes

454,035 28,733,700

5,113

─

(Note 1)

479,559 66,525,573

─(Note 1) Construction in progress in trust is primarily for unacquired properties.

4) Other specified assets
Trust beneficiary interests in real estate are included in “3) Property, plant and equipment and intangible assets,” above.
5) Investment corporation bonds(Unit: thousands of yen)
Issue

Balance at Decrease Balance atInterest
Issuance date beginning of during
end ofrate
periodperiodperiodMaturity
date

January 30,
2030

No. 1 Unsecured Investment
Corporation Bond
(With pari passu conditions January 30,
between specified investment
2020
corporation bonds)(Social bond)Total

2,000,000－

2,000,000 0.780%

2,000,000－

2,000,000

Use

Remarks

Repayment Unsecuredof loans
andpayable unguaranteed(Note) The maturity schedule for investment corporation bonds within five years of the balance sheet date are as follows.
(Unit: thousands of yen)

Investment
corporation bonds

Due within 1 year

Due after 1 year andwithin 2 years

Due after 2 years andwithin 3 years

Due after 3 years andwithin 4 years

Due after 4 years andwithin 5 years

－

－

－

－

－

- 46 -

6) Loans
Category
LenderDrawdown
Date

Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Nippon Life Insurance
Company

700,000─

700,000─

400,000─

400,000─

100,000─

100,000

─Resona Bank, Limited

100,000─

100,000─

Shinkin Central Bank

100,000─

100,000─

100,000─

100,000─

100,000─

100,000

─

San ju San Bank, Ltd.

100,000─

100,000

─The 77 Bank, Ltd.

100,000─

100,000

─

The Dai-ichi Life
Insurance Company,
Limited

100,000─

100,000─

Hiroshima Bank, Ltd.

100,000─

100,000─

1,600,000

─

1,600,000

─200,000─

200,000─

200,000─

200,000─

200,000─

200,000─

200,000─

200,000─

200,000─

200,000─

200,000─

200,000

─

San ju San Bank, Ltd.

200,000─

200,000

─

Nippon Life Insurance
Company

1,000,000

─

1,000,000

─

500,000─

500,000─

500,000─

500,000──

2,000,000

─

2,000,000

─

1,000,000

─

1,000,000

─

500,000─

500,000─

500,000─

500,000─

1,000,000

─

1,000,000

─

1,100,000

─

1,100,000

─

550,000

The Nishi-Nippon City
Bank, Ltd.
The Bank of Fukuoka,
Ltd.

March 3,2017

Sumitomo Mitsui
Banking Corporation
Nippon Life Insurance
Company
Current portion of long-term loans payable

Balance atIncrease
Decrease
Balance at
Average
beginning ofduring period during period end of period interest Repayment Repayment
periodrate(thousands of (thousands of (thousands ofdatemethod(thousands of
yen)
yen)
yen)
(Note1)yen)

Resona Bank, Limited
Shinkin Central Bank
The Nishi-Nippon City
Bank, Ltd.
The Higashi-Nippon
Bank, Limited
The Bank of Fukuoka,
Ltd.

Hiroshima Bank, Ltd.
The Dai-ichi Life
Insurance Company,
LimitedSumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

March 21,2017

February 1,
2019

March 20,2018

The 77 Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
The Nishi-Nippon City
Bank, Ltd.

February 1,
2019

Use

Remarks

0.78%

Lump-sum
January 31, repayment
Unsecured/(Note 3)2022
onNonguaranteedmaturity

0.78%

Lump-sum
January 31, repayment
Unsecured/(Note 3)2022
onNonguaranteedmaturity

0.45%

Lump-sum
January 31, repayment
Unsecured/(Note 3)2022
onNonguaranteedmaturity

0.58%(Note 2)Lump-sum
January 31, repayment
Unsecured/(Note 3)2023
onNonguaranteedmaturity─

550,000

Lump-sum
January 31, repayment
Unsecured/(Note 3)2023
onNonguaranteedmaturity─

500,000─

0.42%
500,000(Note 2)

Shinkin Central Bank

─350,000─

350,000

The Bank of Fukuoka,Ltd.

─

250,000─

250,000

The Gunma Bank, Ltd.

─

250,000─

250,000- 47 -

Category

Current portion of long-termloans payable

LenderBalance atIncrease
Decrease
Balance at
Average
beginning ofDrawdown
during period during period end of period interest Repayment Repayment
periodrate
Date(thousands of (thousands of (thousands ofdatemethod(thousands of
yen)
yen)
yen)
(Note1)yen)

Nippon Life Insurance
Company
The 77 Bank, Ltd.
The Dai-ichi Life
Insurance Company,
LimitedJanuary 31,
2020

Hiroshima Bank, Ltd.
Subtotal
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

March 3,2017

March 20,2018

The 77 Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

800,000─

800,000─

150,000─

150,000─

150,000─

150,000─

150,000─

150,000

7,000,000

9,250,000

7,000,000

9,250,000

1,000,000

──

1,000,000

2,000,000

─

2,000,000

─

1,000,000

─

1,000,000

─

500,000─

500,000─

500,000─

500,000─

1,000,000

─

1,000,000

─

1,100,000

─

1,100,000

─

550,000

─

0.43%

0.89%
(Note 2)Lump-sum
January 31, repayment
Unsecured/(Note 3)
Nonguaranteed2024
onmaturity

0.58%(Note 2)Lump-sum
January 31, repayment
Unsecured/(Note 3)2023
onNonguaranteedmaturity

550,000

─Lump-sum
January 31, repayment
Unsecured/(Note 3)2023
onNonguaranteedmaturity

500,000─

500,000

Shinkin Central Bank

350,000─

350,000

─

The Bank of Fukuoka,
Ltd.

250,000─

250,000

─

The Gunma Bank, Ltd.

250,000─

250,000─

2,550,000──

2,550,000

1,100,000

──

1,100,000

550,000──

550,000

500,000──

500,000

350,000──

350,000

The Bank of Fukuoka,
Ltd.

250,000──

250,000

The Gunma Bank, Ltd.

250,000──

250,000

The 77 Bank, Ltd.

200,000──

200,000

Nippon Life Insurance
Company

800,000─

800,000─

150,000─

150,000─February 1,
2019

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

The 77 Bank, Ltd.
The Dai-ichi Life
Insurance Company,
LimitedFebruary 1,
2019

January 31,
2020

150,000─

150,000─

Hiroshima Bank, Ltd.

150,000─

150,000

─

Sumitomo Mitsui Trust
Bank, Limited

850,000──

850,000

Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation

January 31,
2020

Remarks

Lump-sum
January 31, repayment
Unsecured/(Note 3)2023
onNonguaranteedmaturity

0.42%─(Note 2)The Nishi-Nippon City
Bank, Ltd.

Long-term loans

─

Use

0.54%
(Note 2)Lump-sum
January 31, repayment
Unsecured/(Note 3)2024
onNonguaranteedmaturity

0.43%

Lump-sum
January 31, repayment
Unsecured/(Note 3)2023
onNonguaranteedmaturity

Lump-sum
Unsecured/
January 31, repayment(Note 3)2025
onNonguaranteedmaturity

800,000

─

─

0.54%
800,000(Note 2)700,000──

700,000- 48 -

Category
LenderShinkin Central Bank

Balance atIncrease
Decrease
Balance at
Average
beginning ofDrawdown
during period during period end of period interest Repayment Repayment
periodrate
Date(thousands of (thousands of (thousands ofdatemethod(thousands of
yen)
yen)
yen)
(Note1)yen)
450,000──

450,000

450,000──

450,000

450,000──

450,000

450,000──

450,000

300,000──

300,000

500,000──

500,000

700,000──

700,000

1,000,000

──

1,000,000

500,000──

500,000

500,000──

500,000

500,000──

500,000─

100,000─

100,000─

1,000,000

─

1,000,000

─

2,200,000

─

2,200,000

─

400,000─

400,000

Resona Bank, Limited

─300,000─

300,000

The Nishi-Nippon City
Bank, Ltd.

─

300,000─

300,000

Shinkin Central Bank

─

300,000

The Nishi-Nippon City
Bank, Ltd.
The Bank of Fukuoka,Ltd.
San ju San Bank, Ltd.

January 31,
2020

January 31,
2020

The Higashi-Nippon
Bank, Limited
Nippon Life Insurance
Company
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Dai-ichi Life
Insurance Company,
LimitedJanuary 29,
2021

January 29,
2021

Long-term loans

Hiroshima Bank, Ltd.
The Bank of Yokohama,
Ltd.
Sumitomo Mitsui
Banking Corporation
Nippon Life Insurance
Company
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited

The Dai-ichi Life
Insurance Company,
LimitedJanuary 31,
2022

January 31,
2022

Use

Remarks

Lump-sum
0.54% January 31, repayment
Unsecured/(Note 3)2025
onNonguaranteed(Note 2)maturity

0.35%

Lump-sum
Unsecured/
January 31, repayment(Note 3)
Nonguaranteed2024
onmaturity

0.49%(Note 2)Lump-sum
January 31, repayment
Unsecured/(Note 3)
Nonguaranteed2026
onmaturity

0.39%

Lump-sum
January 31, repayment
Unsecured/(Note 3)
Nonguaranteed2025
onmaturity─

300,000
Lump-sum
January 31, repayment
Unsecured/(Note 3)2027
onNonguaranteedmaturity─

600,000─

0.61%
600,000(Note 2)Hiroshima Bank, Ltd.

─

900,000─

900,000

The Bank of Fukuoka,Ltd.

─300,000─

300,000

The 77 Bank, Ltd.

─100,000─

100,000

San ju San Bank, Ltd.

─

300,000─

300,000

The Higashi-Nippon
Bank, Limited

─200,000─

200,000

Subtotal

24,150,000

7,000,000

9,250,000

21,900,000

Total

31,150,000

16,250,000

16,250,000

31,150,000- 49 -

(Note1) ”Average Interest rates” are the lending rate for each loan agreement, shown rounded up to the second decimal place.
(Note2) The interest rate for this borrowing is, in effect, fixed due to the execution of an interest rate swap agreement. The adjusted interest rate in considerationof swap transactions is stated.
(Note3) The funds are to be used for the acquisition of properties and for the payment of a portion of the related expenses or repayment of existing loans.
(Note4) The following is the amount of long-term loans payable (excluding “Current portion of long-term loans payable”) scheduled to be due for repayment ineach year within five years of the balance sheet date.
(Unit: thousands of yen)

Long-term loans
payableDue after 1 year and Due after 2 year and Due after 3 years and Due after 4 years andwithin 2 years
within 3 years
within 4 years
within 5 years
7,250,000

5,550,000- 50 -

3,200,000

5,900,000