Hospital

Financial Results Briefing Materials
Fiscal Period Ended January 2019(8th Fiscal Period)

Paidnursing home

March 20, 2019

Asset Management Company

Servicedhousing forthe elderly

Securities Code: 3455

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

Contents
Ⅰ

TopicsⅢ

Status of Asset Management

1. 8th Fiscal Period (Ended January 2019) Highlights

P3

1. Portfolio Highlights (After Public Offering)P19

2. 9th Fiscal Period (Ending July 2019) Onward Highlights

P4

2. Stable Cash Flow in the Long Term

P20

3. Overview of Public Offering

P5

4. New Property Acquisition

P6

5. Change in Distribution Per Unit

P9

6. Changes in Unit Price

P10

Ⅱ

Ⅳ

Financial Summary
1.

8th Fiscal Period (Ended January 2019)
Financial Highlights

P12

2.

Actual Results for
8th Fiscal Period (Ended January 2019)

P13

3.

9th Fiscal Period (Ending July 2019) and10th Fiscal Period (Ending January 2020) Earnings Forecasts

P14

4. Financial Status

P15

Ⅴ

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

P22

2. Expansion of Pipeline

P23

3. Actions for Development Cases

P25

4. Actions for Acquisition of Hospital Real EstateP26

5. Actions for ESG

P27

Appendix1Topics

Ⅰ
2

I Topics

1. 8th Fiscal Period (Ended January 2019) Highlights

1

Actual Results
 Operating revenue: 1,301 million yen (+33 million yen from previous fiscal period, +0 million yen from forecast (Note 1))

 Net income:

 Distribution per unit

: 3,120 yen (Note 2)

539 million yen (+18 million yen from previous fiscal period, +4 million yen from forecast)(Excluding distribution in : 2,794 yen
excess of earnings (Note 3))
 NAV per unit

2

: 118,038 yen(+20 yen from forecast) (Execution of distribution in excess of earnings from 8th FP)(+95 yen from previous fiscal period, +21 yen from forecast)(+593 yen from end of previous fiscal period)

Status of Management
 Acquired two paid nursing homes with care service in the Tokyo Metropolitan Area
 Asset size expanded to 27 properties/42.1 billion yen, with 3.0 billion yen of unrealized gain (Note 4)

3

Financial Status
 New loans to fund property acquisition
 Total amount of loans: 22.45 billion yen (+1.75 billion yen from end of previous fiscal period), LTV: 50.6% (+1.8% from end of
previous fiscal period), ratio of long-term loans: 57.9% (-37.3% from end of previous fiscal period), average borrowing interest rate:
0.58％ (-0.02% from end of previous fiscal period)
 Long-Term Issuer Rating: A (Stable) (Note 5)(Note 1): Figure disclosed in the Financial Report for Fiscal Period Ended July 2018 dated September 14, 2018.
(Note 2): Distribution per unit=Distribution of earnings 2,661 yen + Distribution with reserve for temporary difference adjustments 133 yen +Other distribution in excess of earnings (return of capital) 326 yen.
(Note 3): Refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 4): Asset size is calculated based on acquisition prices; and unrealized gain is calculated as: appraisal value at the end of 8th FP - book value at the end of 8th FP.
(Note 5): Rating Agency: Japan Credit Rating Agency, Ltd. (JCR).

3

I Topics

2. 9th Fiscal Period (Ending July 2019) Onward Highlights

1

Expansion of Portfolio through Public Offering Conducted the second public offering since IPO and newly acquired 8 properties for 22.7 billion yen from the sponsors and support
SPCs (February 2019)
 New assets include the second hospital real estate acquired by a J-REIT and the first property developed by the sponsors for HCM
 Expanded asset size to 35 properties/64.8 billion yen, approximately 2.7 times the size at the time of IPO (Note 1)

2

3

9th Fiscal Period (Ending July 2019) and 10th Fiscal Period (Ending January 2020)
Earnings Forecast
 Operating revenue:

9th FP 2,006 million yen (+705 million yen from previous fiscal period),
10th FP 2,006 million yen

 Net income:

9th FP 1,017 million yen (+477 million yen from previous fiscal period),
10th FP 938 million yen

 Distribution per unit:

9th FP 3,555 yen (+435 yen from previous fiscal period),
10th FP 3,302 yen(Excluding distribution in excess of earnings) (Note 2) :9th FP 3,270 yen (+476 yen from previous fiscal period),
10th FP 3,017 yen

Financial Operation
 Debt financing through social loans Effective utilization of cash on hand, including continuous execution of distribution in excess of earnings(Note 1): Calculated based on acquisition prices.
(Note 2): Refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).

4

I Topics

3. Overview of the Public Offering
Raised approximately 12.6 billion yen of equity through the second public offering since IPO (first time in two years).
Overview of the offering

Investment highlights
 Acquisition of a multi-use healthcare facility, a flagshipproperty combining a hospital and a paid nursing home

Launch date

January 11, 2019

Price determination date

January 22, 2019

Payment dateFebruary 1, 2019

Number of new investment units issued (Note 1)

117,894 units

Total number of investment units
outstanding (after public offering)

311,001 units

Issue price / issue value

111,442 yen / 107,555 yen

Amount paid in (Note 1)

12.68 billion yen

 Actions on development projects of healthcare facilities andexpansion of asset acquisition
 Sustainable external growth utilizing a variety of sponsor
support Promotion of stable financial operation and distribution
policy to enhance unitholder value(Note 1): “Number of new investment units issued” and “Amount paid in” include those for third-party allotment on February 27, 2019 (payment date).

Change in portfolio indicators

Number of properties

As of
end of 7th FP

25

Properties acquired in
8th FP (loans)

Properties acquired in
9th FP (public offering)

After public offering

2

8

35

(as of February 1, 2019)

Total acquisition price40.5 billion yen

1.6 billion yen

22.7 billion yen

64.8 billion yen

Total appraisal value

44.0 billion yen

1.8 billion yen

24.7 billion yen

70.5 billion yen

Average appraisal NOI yield

5.7％

5.4%

5.6%

8

4 (new)

12

Occupancy rate

100.0％

99.8%

99.9%

Remaining years of lease agreement
Ratio of investment in three major
metropolitan areas
LTV (Note 2)

13.7 years

16.8 years

15.2 years

84.9%

88.1%

86.1%

48.8%

－

48.4%

Number of operators(Note 2): LTV after public offering is estimated based on total assets at the end of the 8th FP, reflecting public offering conducted and loans taken out in the 9th FP.

5

I Topics

4. New Property Acquisition (1)Acquired 8 properties for 22.7 billion yen from the sponsors and support SPCs on February 1, 2019
SHIP SENRI BUILDING
Hospital

Paid nursing home

SOMPO CARE La vie Re Hama-Kawasaki
Paid nursing home

Location

Toyonaka-shi, Osaka

Location

Kawasaki-shi, Kanagawa

Operator

Kyowakai Medical Corporation
GREENLIFE Co., Ltd.

Operator

Sompo Care Inc.

Appraisal value

14,300 million yen

Appraisal value

1,820 million yen

Acquisition price

12,920 million yen

Acquisition price

1,710 million yen

Appraisal NOI yield

5.2%

Appraisal NOI yield

5.2%

Number of beds
Number of Rooms/
Resident Capacity

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

Number of Rooms/ Resident
Capacity

58 rooms/ 58 people

Property features

Property features• A large-scale multi-use healthcare facility directly connected to Senri-Chuo Station, the gateway to Senri New Town.
• Completed in September 2008. Acquisition price was approximately 13.0 billion yen, the largest among HCM portfolio.
• The main tenants are a hospital (400 beds) and a paid nursing homes with care service (resident capacity of 200 people).
• The property also includes a pharmacy, home-visit nursing care office, an organic restaurant, etc.

• Located in a highly convenient area being approximately a 10-minute bus ride from JR Kawasaki Station and with a large
retail facility across the street. Opened in January 2008.
• Serves as a multi-use facility of nursing care with a day-service center (outpatient care service), a group home, a pharmacy,
etc. within the same building.

• Master leased by a group company of SHIP HEALTHCARE.

Sunny Life Kita-Shinagawa
Paid nursing home

Development

Hanakotoba Odawara

Location

Shinagawa-ku, Tokyo

Operator

Paid nursing home

Location

Odawara-shi, Kanagawa

Kawashima Corporation

Operator

Proud Life Inc.

Appraisal value

1,960 million yen

Appraisal value

948 million yen

Acquisition price

1,825 million yen

Acquisition price

880 million yen

Appraisal NOI yield

4.9%

Appraisal NOI yield

5.6%

66 rooms/ 66 people

Number of Rooms/ Resident
Capacity

60 rooms/ 65 people

Number of Rooms/ Resident
Capacity

Property features

Property features• A paid nursing home with care service constructed on the former site of company housing of SMBC and opened in
November 2018.

• Located in a residential area fairly close to Sagami Bay, approximately a 15-minute bus ride from the JR Odawara Station.
Opened in October 2009.

• Located in a quiet residential district in central Tokyo and offering excellent transportation convenience.

• With a clinic and a daycare center (outpatient rehabilitation), it is recognized for its excellent living environment and wide
range of services.

• With no initial fee and monthly fees of 200,000 yen or less, the occupancy rate as of December 20, 2018 was already
54.5%.

6

I Topics

4. New Property Acquisition (2)Hanakotoba Shin-Yokohama
Paid nursing home

Verde Minowa

Location

Yokohama-shi, Kanagawa

Operator

Paid nursing home

LocationTakasaki-shi, Gunma

Proud Life Inc.

Operator

Verde Corporation

Appraisal value

2,230 million yen

Appraisal value

1,700 million yen

Acquisition price

2,071 million yen

Acquisition price

1,620 million yen

Appraisal NOI yield

5.2%

Appraisal NOI yield

6.7%

Number of Rooms/ Resident
Capacity

136 rooms/ 136 people

Number of Rooms/ Resident
Capacity

174 rooms/ 206 people

Property features

Property features• The largest paid nursing home with care service among those operated by Proud Life. Opened in April 2004.

• The largest paid nursing home with care service owned by HCM (resident capacity of 206 people). Opened in June 1988.

• Excellent location within walking distance of JR Shin-Yokohama Station.

• Offers good daily convenience as it is located approximately a 25-minute bus ride from JR Takasaki Station and has asupermarket, medical institutions, etc. nearby.

• Nurses are stationed around the clock and rehabilitation by specialized trainers is also provided.

Hanakotoba Shin-Yokohama Ⅱ
Paid nursing home

• Enjoys high occupancy rates capitalizing on its long operational track record and competitive pricing under the concept of “apleasant nursing home that provides peace of mind, safety and freedom.”

Verde Hotaka

Location

Yokohama-shi, Kanagawa

Operator

Paid nursing home

Location

Kawaba-mura, Tone-gun, Gunma

Proud Life Inc.

Operator

Verde Corporation

Appraisal value

401 million yen

Appraisal value

1,360 million yen

Acquisition price375 million yen

Acquisition price

1,290 million yen

Appraisal NOI yield

5.8%

Appraisal NOI yield

7.0%

21 rooms/ 22 people

Number of Rooms/ Resident
Capacity

121 rooms/ 174 people

Number of Rooms/ Resident
Capacity

Property features

Property features• Located adjacent to Hanakotoba Shin-Yokohama. Opened in June 2007.

• Located in an area with abundant nature, approximately a 6-minute car ride from the Numata IC on Kan-etsu Expressway.

• Excellent location within walking distance of JR Shin-Yokohama Station.

• Having been extended and reconstructed after the opening in November 1982, it has become one of the largest paid
nursing homes with care service in the area with resident capacity of 174 people.

• Adopts “Familiar and home-like nursing home” as its slogan.
• Ensures close cooperation with medical experts with onsite clinic.

• Maintained high occupancy rates with many residents coming not only from neighboring areas but also from
Niigata Prefecture around the prefectural boarder attracted by an operational track record stretching backover 35 years as well as competitive pricing.

7

I Topics

4. New Property Acquisition (3)(Reference) Properties acquired in 8th FP

New operators

Hanakotoba Minami
Paid nursing home

Location

Yokohama-shi, Kanagawa

Operator

Proud Life Inc.

Appraisal value

1,190 million yen

Acquisition price

1,071 million yen

Appraisal NOI yield

5.2%

Number of Rooms/ Resident
Capacity

51 rooms/ 51 people

Property features

Kyowakai Medical
Corporation• Group companies provide consistent, community-based quality
medical/nursing care services for all, from those in an acutestage to those in need of at-home medical/nursing care.

Kawashima
Corporation• With no initial and monthly fees of 200,000 yen or less, the occupancy rate as of November 28, 2018 was 100%.

Paid nursing home

Proud Life Inc.
Location

Miura-shi, Kanagawa

Operator

Proud Life Inc.

Appraisal value

664 million yen

Acquisition price

615 million yen

Appraisal NOI yield

5.7%

Number of Rooms/ Resident
Capacity

53 rooms/ 54 people

Property features• Opened in August 2007. Located in a residential area near Misaki Port, there are leisure facilities, second houses, etc.
scattered around in the surrounding areas due to abundant nature and a mild climate.

• A major nursing care business operator operating 115 facilities(resident capacity of 10,297 people) nationwide centering on
the Tokyo Metropolitan Area, with Sunny Life as the mainbrand.
• With no initial fee, monthly fees are set to be as affordable aspossible. Residents referred by a family member or a related
party accounts for the largest percentage, and the averageoccupancy rate has remained at a high level.

• Opened in April 2010. Located approximately a 4-minute walk from the nearest station in the center of Yokohama City, itoffers excellent transport convenience and thus has advantages for soliciting residents and securing employees.

Hanakotoba Miura• A major medical corporation operating a wide range ofbusinesses including six hospitals (2,024 beds), four long-termcare health facilities (495 beds) and home care support mainlyin the southeastern part of Hyogo Prefecture and the
Hokusetsu area of Osaka Prefecture.

• Founded in 2002, it came under Sony Financial Holdings Inc. in2017.
• Operates 26 paid nursing homes, etc. (resident capacity of
1,344 people) under “Hanakotoba” brand in Tokyo and fiveother prefectures centering on Kanagawa Prefecture.

Verde Corpration• Established in 1970. A core company of the Hotaka Kai Group,
a nursing care/welfare business group holding the largest
number of rooms (21 facilities with resident capacity of 1,679
people) in Gunma Prefecture.
• Operates paid nursing homes (5 facilities with resident capacityof 515 people), etc.

• Offering generally good transportation access, it attracts residents not only from neighboring cities but also from further
areas including Yokosuka City and Tokyo.

8

I Topics

5. Change in Distribution Per Unit
Distribution per unit (excluding temporary effect portion, etc.) is generally on the rise.

(yen)Distribution in excess of earnings (Note 2)

3,600

Distribution (Temporary effect portion)

Distribution of reserve
for temporary
difference adjustments

Distribution (Excluding temporary effect portion) (Note 3)

2,730

1,600
0

2,697

2,340

2,400

2,000

3,302

3,120

3,200

2,800

3,555

2,653

2,699

2,440
3,076

2,218

第2期

2nd FP
2016年
Ended Jan.
1月期
2016

2,281

第3期

3rd FP
2016年
Ended July
7月期
2016

2,374

第4期

4th FP
2017年
Ended Jan.
1月期
2017

2,516

第5期

5th FP
2017年
Ended July
7月期
2017

2,443

第6期

6th FP
2018年
Ended Jan.
1月期
2018

2,652

第7期

7th FP
2018年
Ended July
7月期
2018

第8期

8th FP
2019年
Ended Jan.
1月期
2019

(Note 1): Temporary effect refers to temporary revenues (insurance income, etc.), property tax and urban planning tax and investment unit issuance expenses which have not been expensed.
(Note 2): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 3): For 8th FP, the figure includes distribution of reserve for temporary difference adjustments.

2,823

2,752

第9期

9th FP
2019年
Ending July
7月期
2019
（予想）
(Forecast)

第10期

10th FP
2020年
Ending Jan.
1月期
2020
（予想）
(Forecast)9

I Topics

6. Changes in Unit Price
The unit price of HCM outperformed the TSE REIT Index significantly due to various measures including the first acquisition of
hospital real estate by a J-REIT and continuous distribution in excess of earnings. It remained solid even after the second public
offering since IPO, and trade volume has also been on the rise.
Decision on continuous execution of distribution inexcess of earnings

First acquisition of hospital real estate by a J-REIT(yen)
121,000

Trade volume (right axis)
TSE REIT Index

September 2018
Announcement of proposing execution of distribution inexcess of earnings as a matter to be resolved.

HCM(left axis)

115,000

109,000

Second public offering
Asset size to grow 1.6 times(unit)
23,000
4,000

3,500

November 2017
Announcement first acquisition of hospital real estate
by a J-REIT (Niigata Rehabilitation Hospital)

3,000

February 2017
First public offering since IPO

2,500
January 2019
Announcement of second public offering since IPO

103,000

2,000

1,500

97,0001,000
91,000500

85,0002017/2/2
Feb. 2,2017

2017/5/21
May 21,2017

2017/9/6
Sept. 6,2017

(Note 1): TSE REIT index is indexed with the closing price on February 2, 2017 as 100.

2017/12/23
Dec. 23,20172018/4/10
Apr. 10,20182018/7/27
July 27,20182018/11/12
Nov. 12,20180

2019/2/28
Feb. 28,201910

Financial SummaryⅡ
11

II Financial Summary

1. 8th Fiscal Period (Ended January 2019) Financial Highlights
Debt (Liabilities)

Asset (Assets)
Number of properties

Total acquisition priceTotal appraisal value

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

27 Properties(+1.75 billion yen from end of previous fiscal period)(+2 properties from end of previous fiscal period)

42.1 billion yen(+1.6 billion yen from end of previous fiscal period)

Average remaining terms to maturity
Average borrowing interest rate

45.7 billion yen

Ratio of long-term loans(+1.8 billion yen from end of previous fiscal period)(7.2%)

5.7%

Operational rate

100%

Ratio of fixed rents

100%

Ratio of investment in three major
metropolitan areas

85.5%(+0.6% from end of previous fiscal period)

2.2 years(-0.6 years from end of previous fiscal period)

0.58%(-0.02% from end of previous fiscal period)

57.9%(-37.3% from end of previous fiscal period)

87.8%

Ratio of loans with fixedinterest rates

3.0 billion yen

Average appraisal NOI yield

Average Remaining Lease Term

22.45 billion yen

Total amount of loans(-7.4% from end of previous fiscal period)

50.6%

LTV

(+1.8% from end of previous fiscal period)

Long-Term Issuer Rating (JCR)

A (Stable)

Equity (Net assets)
Total sum of fair value

22.6 billion yen

Distribution per unit

3,120 yen

Distribution in excess of earnings

14.2 years(+0.5 years from end of previous fiscal period)(Note 2)(Equivalent to return of capital)

NAV per unit

(Note 1): Unrealized gain is calculated as: Appraisal value at the end of 8th FP - Book value at the end of 8th FP
Ratio of unrealized gain is calculated as: Unrealized gain (Appraisal value at the end of 8th FP - Book value at the end of 8th FP) / Book value at the end of 8th FP(Note 2): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).

326 yen
118,038 yen(+593 yen from end of previous fiscal period)

12

II Financial Summary

2. Actual Results for 8th Fiscal Period (Ended January 2019)
Revenue and profits increased due to property acquisition during the fiscal period, realizing an increase in distribution per unit
by 95 yen excluding distribution in excess of earnings (Note 1)(Unit: million yen)
7th Fiscal
Period(Ended January 2019)(Ended July 2018)

Forecast

Actual(Note 2)(A)

8th Fiscal Period Actual Results(Comparison with Forecast)

8th Fiscal Period(B)

Actual(C)

Comparison
with Forecast(C)- (B)

Difference in operating expenses (-0)

Comparison with
7th Fiscal Period(C)- (A) Decrease in expenses related to rent business (-4)(C)- (A)(A)(％) (Note 3)

Operating revenue

1,267

1,301

1,301

+0

+33

+2.7

Operating expenses

642

654

654

-0

+12

+1.9

Expenses related
to rent business

441

452

448

-4

+7

+1.7

(Depreciation)

307

317

315

-1

+7

+2.4

Operating income

625

646

647

+0

+21

+3.5

Ordinary
income

522

536

540

+4

+18

+3.6

Net income

521

535

539

+4

+18

+3.6

Distribution
per unit
(yen)

2,699

3,100

3,120

+20

+421

+15.6

Distribution of
earnings

2,699

+21

+95

+3.5

2,773

2,661

－

Distribution in excessofearnings (Note 1)

－

327

326

-1

+326

－

117,445－

118,038

－

＋593

－

NAV per unit (yen) Increase in other operating expenses (+3)
 Distribution-related expenses (+2)

Difference in non-operating expenses (-2)
 Decrease in interest expenses, etc. (-3)

8th Fiscal Period Actual Results(Comparison with 7th Fiscal Period)
Difference in operating revenue (+33)
 Rent income due to property acquisition during the fiscal period, etc.
(+33)

Difference in operating expenses (+12)
 Increase in expenses related to rent business (+7)

 Depreciation (+7)
 Expenses related to general meeting of unitholders (+3)
 Asset management fee (+2)

Difference in non-operating revenue (-2)

Distribution of reserve
for temporary
difference adjustments

133

 Repair expenses (-2)
 Depreciation (-1)

 Decrease in insurance income, etc. (-2)(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2): The forecast for the 8th Fiscal Period (B) is the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended July 2018” dated September 14, 2018.
(Note 3): Figures are rounded to the first decimal place.

13

II Financial Summary

3. 9th Fiscal Period (Ending July 2019) and10th Fiscal Period (Ending January 2020) Earnings Forecasts

Approximate increase in revenue of 700 million yen is forecast in the 9th Fiscal Period due to property acquisition throughpublic offering, and distribution per unit (including distribution in excess of earnings) is expected to increase by over 400 yen.
(Unit: million yen)
8th Fiscal
Period

9th Fiscal Period(Ending July 2019)(Ended January
2019)

9th Fiscal Period Forecast(Comparison with 8th Fiscal Period )10th Fiscal Period(Ending January 2020)

Comparison with
8th Fiscal Period

Forecast(A)(B)

Operatingrevenue

1,301

2,006

Operatingexpenses

654

828

+174

+26.6

904

+76

+9.2

Expenses related
to rent business

448

595

+146

+32.6

599

+4

+0.7

(Depreciation)

315

440

+124

+39.5

442

+2

+0.6

Operatingincome

647

1,178

+531

+82.1

1,101

-76

-6.5

Ordinary
income

540

1,018

+477

+88.3

939

-78

-7.7

Net income

539

1,017

+477

+88.5

938

-78

-7.7

3,120

3,555

+435

+13.9

3,302

-253

-7.1

2,794

3,270

+476

+17.0

3,017

-253

-7.7

Distribution
per unit (yen)(Including distribution inexcess of earnings(Note1))

Distribution
per unit (yen)(Excluding distribution inexcess of earnings(Note1))

Forecast

Comparison with 9th
Fiscal Period Forecast

Actual(B)- (A)(B)- (A)(A)(％) (Note 2)

(C)

+705

+54.2

2,006

(C)- (B)(C)- (B)(B)(％) (Note 2)00

Difference in operating revenue (+705)
 Increase in rent income due to property acquisition

Difference in operating expenses (+174)
 Increase in expenses related to rent business (+146)
Depreciation (+124)
 Increase in asset management fee (+20)

Difference in non-operating expenses (+52)(Note 1): Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2): Figures are rounded to the first decimal place.

 Increase in interest expenses, etc. (+26)
 Increase in loan fees, etc. (+20)
 Increase in investment unit issuance expenses (+5)

Forecast for the 10th Fiscal Period(Comparison with 9th Fiscal Period forecast)Difference in operating expenses (+76)
 Increase in asset management fee (+57)
 Increase in expenses related to rent business (+4)
 Depreciation (+2)
 Increase in taxes and dues (+4)
 Increase in research expenses (+4)

Difference in non-operating expenses (+2)
 Increase in interest expenses, etc. (+1)

14

II Financial Summary

4. Financial Status
Sought further financial stability through extension of loan periods and diversification of maturities.
Status of Interest-Bearing Liabilities
End of 8th FP
Total amount ofloans

Diversification of Lenders
Afterpublic offering Solid lender formation centering on the sponsor SMBC has been established.
(After public offering)

Change(as of February 1, 2019)(billion yen)

22.45（+1.75）

LTV

(%)

50.6
（+1.8）

48.4-2.2

Ratio of loans with fixedinterest rates

(%)

87.8
（-7.4）

96.9+9.2

Ratio of long-term loans

(%)

57.9
（-37.3）

76.3

＋18.4

Average remaining terms
to maturity(year)

2.2（-0.6）

3.0+0.8

Average borrowinginterest rate

(%)

0.58
（-0.02）

0.56

-0.02

32.45

+10.00Higashi-Nippon Bank

0.5 billion yen (1.5%)

Mie Bank

0.75 billion yen (2.3%)

77 Bank

0.95 billion yen (2.9%)

Bank of Fukuoka

1.25 billion yen (3.9%)

Hiroshima Bank

1.25 billion yen (3.9%)

Dai-ichi Life Insurance

1.25 billion yen (3.9%)

Shinkin Central Bank

1.45 billion yen (4.5%)

Nishi-Nippon City Bank

1.75 billion yen (5.4%)

Nippon Life Insurance

2.6 billion yen (8.0%)

Resona Bank

2.7 billion yen (8.3%)(Note 1): Figures in parentheses are comparison with the end of 7th FP.

Change in LTV and Total Amount of Loans

The Gunma Bank
0.5 billion yen (1.5%)

SMBC
12.05 billion yen(37.1%)

Sumitomo Mitsui Trust Bank
5.45 billion yen (16.8%)

Diversification of Maturities

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

Total amount of Loans (left axis)
LTV (right axis)

40.0

30.0
50.2
20.0

48.9

48.4

10.0

52

8.0

51

50.6

50.2
48.8

48.8

48.4

49
48

13.0

14.0

14.0

20.7

20.7

20.7

2nd FP
Ended
January 2016

3rd FP
Ended
July 2016

4th FP
Ended
January 2017

5th FP
Ended
July 2017

6th FP
Ended
January 2018

7th FP
Ended
July 2018

22.45

32.45

After
8th FP
Public Offering
Ended
January 2019

(Note 2): LTV after public offering is estimated based on total assets at the end of the 8th FP, reflecting public
offering conducted and loans taken out in the 9th FP.

47

Loans as of the end of 8th FP
Loans after public offering

6.0

2.0

50

10.0

0

(billion yen)

(%)
53

7.7

4.0

5.75
5.0

2.0
0

4.0

4.0

3.0
0
9th
FP

0
10th
FP

11th
FP

0

0
12th
FP

13th
FP

14th
FP

15th
FP

16th
FP

0

1.0

0

0

17th
FP

18th
FP

19th
FP

20th
FP

15

II Financial Summary(Reference) HCM’s Distribution in Excess of Earnings
In addition to continuous distribution exceeding net income posted in accounting (equivalent to return of capital), HCM may
distribute reserve for temporary difference adjustments from deferred losses on hedges, etc. as distribution in excess ofearnings. By conducting distribution of reserve for temporary difference adjustments, HCM will conduct distribution based on
net income regardless of valuation gain or loss of derivative transactions (Note 1)[Deferred gains and losses on hedges]
When deferred valuation gains and losses on hedges < 0Distribution in excess of net income
posted in accounting(Equivalent to 20% of depreciation)
Valuationloss

Net income(Statement of income)Distribution of reserve
for temporary
difference adjustments

Profit defined in theInvestment Trusts Act(Distribution of profit)

Distribution based on net income
posted in accounting

Total distribution[Deferred gains and losses on hedges]
When deferred valuation gains and losses on hedges > 0

Distribution in excess of net income
posted in accounting(Equivalent to 20% of depreciation)

Valuation
gain

Distribution based on net income
posted in accounting

Net income(Statement of income)

Profit defined in theInvestment Trusts Act(Distribution of profit)(Note 1): HCM conducts derivative transactions, limiting to those for hedging interest rate fluctuation risks.

Total distribution

16

memo

17

Status of Asset Management

Ⅲ18

III Status of Asset Management

1. Portfolio Highlights (After conducting public offering)
Portfolio Highlights

Number of Properties

Total Acquisition Price

Total Appraisal Value(Note 1)

Average
Appraisal NOI Yield

35 properties

64.8 billion yen

70.5 billion yen(+26.4 billion yen)

5.6 %Average Building Age(Note 1)

Average Remaining
Lease Term (Note 1)

Ratio of Fixed Rents

Operational Rate

14.5 years

15.2 years

100 %99.9 %(+10 properties)(+24.3 billion yen)(-0.2 years)(+1.4 years)(-0.1%)(-0.1%)(Note 1): Figures in parentheses are comparison with the end of 7th FP.

Portfolio Diversification (Note 2)
Paid nursing home, medical service-related facilities, etc.
19.9％

Medical service-related facilities
3.2％
Serviced housing for the elderly
4.8％

Chubu area
2.0％Core cities
11.3％

Tokyo metropolitan area
41.1％

By
GeographicalArea

By Type

Paid nursing home
72.1％

Other areas
2.6％

Kinki area
43.0％

Three Major Metropolitan areas
86.1％(Note 1): “Average Building Age” and “Average Remaining Lease Term” are calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with February 1, 2019 as reference date, rounded down to the firstdecimal place. When there is more than one building, they are calculated by weighted averaging with areas. “Appraisal Value” is indicated based on the appraisal report with January 31, 2019 (November 30, 2018 for the eight properties
acquired on February 1, 2019) as the appraisal date.
(Note 2): The figures in the graphs are calculated based on acquisition prices, rounded to the first decimal place.

19

III Status of Asset Management

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

Carefully Selected Operators

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

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

Residents
Monthly fees

Municipality,etc.

Nursing care fees

Operators(initial fees)

Fixed rent

Due DiligenceLong-termlease agreements

Management
compliancestructure

Business history/
activities

Financial status

Appropriate Maintenance and Management of Properties

Long-Term Fixed-Rent Lease Agreements

Repair Expenses

Capital Expenditure(million yen)

20 years or more
20.4%

Less than 10 years
37.2%

Averageremaining leaseterm
15.2 years(Note1)

10 years or more but
less than 20 years
42.2%

Operational status
of facilities

Ratio offixed rents
100%(million yen)

1st FP

1st FP

2nd FP

2nd FP

3rd FP

3rd FP

4th FP

4th FP

5th FP

5th FP

6th FP

6th FP

7th FP

7th FP

8th FP

8th FP

20(Note 1): The figure is calculated by weighted averaging with acquisition prices after dividing remaining lease days by 365, with February 1, 2019 as reference date, rounded down to the first decimal place.

Actions for Enhancement ofUnitholder ValueⅣ
21

IV Actions for Enhancement of Unitholder Value

1. Road Map to External Growth
HCM projects an asset size of 100 billion yen over the medium term. (Note 1)
With continuous property acquisition since IPO, the asset size expanded about 2.7 times to 64.8 billion yen.
Change in Asset Size and Number of Properties
March 2016

February 2017

• Acquired 2 properties(1.3 billion yen)

• Conducted the first public
offering• Acquired 6 properties(13.4 billion yen)

November 2017

October 2018

• Acquired J-REIT’s first
hospital real estate for 2
billion yen• Acquired 2 properties(1.6 billion yen)February 2019
• Conducted second public
offering• Acquired 8 properties (22.7
billion yen) including hospital
real estate(billion yen)
100
100
<Target >(Number of properties)(Note 1)

64.8

40

70
700

Asset size

60
600

Number of properties

35

35
30
38.4

40.5

40.5

15

Pipeline

23.6

23.6

16

16

第1期
1st
FP
Ended
2015年
July 2015

第2期
2nd
FP
Ended
2016年
January 2016

7月期

1月期

25.0

25.0

24

25

50
500
40
400

27

25

20

42.1

25

30
300
200
20

18

18

第3期
3rd
FP
Ended
2016年
July 2016

第4期
4th
FP
Ended
2017年
January 2017

7月期

1月期

第5期
5th
FP
Ended
2017年
July 2017
7月期

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

第7期
7th
FP
Ended
2018年
July 2018
7月期

第8期
2019年2月2019February
8th
FP
Ended
After
public offering
2019年
公募増資後
January 2019

100
10

1月期

22
(Note 1): The target may not be achieved due to future events, market environment and other factors.

IV Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (1)HCM aims for continuous growth of its portfolio by focusing on further expansion of pipeline through a “system to gather
quality deals and information,” utilizing sponsor support.
Pipeline totaling around 6.0 billion yen
Paid nursing home

Establishment of a system to gather
quality deals and information

Facilities andhousing for theelderly(already opened)

Facilities andhousing for theelderly(to be developed)

AMICA VILLA INAGE(Chiba-shi, Chiba)

Medicalservice-related
facilities

Paid nursing home

home

Sawayaka Seaside Kuki-no-umi(Kitakyushu-shi, Fukuoka)

Sponsor pipeline

Paid nursing home (to be developed)

Paid nursing home

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

Paid nursing home (to be developed)(First refusal rights obtained)

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

Medical Rehabilitation Home Granda
Toyota-Motomachi(Toyota-shi, Aichi)(Note 1): In case a sponsor or an SPC formed by a sponsor, etc. decides to sell a healthcare facility they own, HCM has the first refusal rights to acquire the property. However, the acquisition is undecided and there is no guarantee that HCM will
acquire the property in the future. The total pipeline amount includes planned acquisition prices of properties that are being developed by sponsors or support companies. The above properties are some of healthcare facilities owned bysponsors or SPCs formed by sponsors, etc.

23

IV Actions for Enhancement of Unitholder Value

2. Expansion of Pipeline (2)HCM strives to get excellent deals through sponsor support and its broad network of operators, developers, etc.

System to Gather Quality Deals and Information

OwnersFacilities and housing forthe elderly

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

Facilities andhousing for theelderly(to be developed)

Developers
Housebuilders

Extensive networks

Expert know-how
Extensive
sourcing routes

Supportagreement

Sponsor andsupporting company
networks
Asset managementcompany’s own
network

Expert know-how

Supportagreement

Extensive
warehousing
functionsUtilization ofbridge SPCs

Nursing care and medical service
Fund management
FinanceUtilization of
warehousing ofsponsors and others

Warehousing function

Medicalservice-related
facilities

Medicalcorporation

Capture quality deals on a negotiationbasis at the right timing

24

IV Actions for Enhancement of Unitholder Value

3. Actions for Development Cases
HCM has built up the pipeline by actions on development cases of healthcare facilities utilizing sponsor support.

Abundant real estate information
through the sponsor network, etc.
 Sales/purchase information
 Effective utilization of land

Knowledge on the healthcare
industry and a wide network
 Good judgement in selecting
operators
 Capturing operators’ needs for
opening a facility

Extensive sponsor functions
 Warehousing function
 Drawing and management ofdevelopment plans

Acquisition at an appropriate timing
after completion of buildings

Strengths of HCMAccumulation of information on real estate including development sites
through the networks of the sponsors and the Asset Management
Company.
Careful selection of credible operators against the backdrop of HCM’s
knowledge and network on the healthcare industry.
Leading the development process from selection of fine operators andacquisition of land to warehousing after the completion of buildings,
utilizing the extensive sponsor functions.

Case example
Property Name

Sunny Life Kita-Shinagawa

Location

Shinagawa-ku, Tokyo

Operator

Kawashima Corporation

Facility typepaid nursing home with care service

Number of Rooms/ Resident
Capacity

66 rooms/ 66 people The needs of an operator for opening a facility and the needs of SMBC for
selling its former company housing site were matched.
 Yoei, the sponsor, constructed a paid nursing home as a developer.
 It was opened in November 2018 and acquired by HCM in February 2019.

25

IV Actions for Enhancement of Unitholder Value

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

1

Major investment target A hospital which can play an important role in the Regional Healthcare Vision
 May acquire a medical mall, health check-up center, etc. other than hospitals

Strengths of HCM
 SHIP HEALTHCARE’s abundant insight and various support experience in“medical business” and SMBC/NEC Capital’s financing and financing know-how
for “medical business”
 A broad network with the three main sponsor companies and the parties related
to the “system to gather quality deals and information”

 In principle, no investment that involves hospital operation

2

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

3

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

4

Stable management based on expertise in hospital business anda trust relationship with hospital personnel

Case example
Property Name

Niigata Rehabilitation Hospital

Location

Niigata-shi, Niigata

Operator

Medical Corporation AIKOKAI

Number of beds

168 beds

 Captured needs for securitization of medical corporations.
 HCM acquired the property in November 2017 by utilizing the warehousing
function of Sumitomo Mitsui Finance and Leasing, the sponsor. It the firstinclusion of hospital real estate in a portfolio by a J-REIT.

Promotion activities for market expansion

 Concluded a long-term (30 years) and fixed-rent lease agreement with the
medical corporation.

 Participation in seminars for medical/nursing care facilities-related operators

 HCM acquired only the land, skelton of the building, elevators and such; andthe medical corporation continues to own medical equipment and such.

 Lectures at industry group meetings(Congress of Japan Hospital Association, etc.)(Note 1): “Hospital Real Estate Guidelines” refers to “Guidelines Concerning REITs Targeting Hospital Real Estate” published on June 26, 2015 by the Ministry of Land, Infrastructure, Transport and Tourism.

26

IV Actions for Enhancement of Unitholder Value

5. Actions for ESG
HCM and the Asset Management Company will aim to realize the investment philosophy and enhance unitholder value over the
medium to long term by practicing asset management that is considerate of Environment, Social and Governance (ESG).

Basic ESG Policy
 Promotion in collaboration with various in-house/outside stakeholders including
operators, hospital personnel, sponsors, executives and employees

Reduction of environmental burden (E)Efforts to solve social issues in an aging society (S)Establishment of governance system (G)Information disclosure to investors and other stakeholders

Finance through social loans
 Formulation of social finance framework-

Promotion of finance of which use is limited to projects expected large
contributions to society-

Acquired the highest evaluation of “Social 1 (F)” from JCR in recognition of
the pro-social nature, management/operation system, transparency, etc. offund use Finance by social loans-

Based on the above framework, took out social loans in February 2019 tofund property acquisition-

Acquired the highest rating of “Social 1” from JCR with regard to Japan’s firstsocial loans of which fund use complies with the Social Bond Principles (Note1) and the targets of SDGs (Note 2).

-

Plans to release reports on fund management status, actions for SDGs, etc.
on the HCM’s website and such.

-

Part of the loans was SMBC’s “SDGs Social Loan.”

Actions for reduction of environmental burden (E) Upgraded the air conditioner to an energy-saving type (GreenLife Moriguchi )-Reduced upgrading cost by around 50% (6.4 million yen) by using thegovernment’s subsidy program-

Energy consumption is likely to decrease by around 13% compared with
before the introduction.

(Note 1): The Social Bond Principles are guidelines drawn up by International Capital Market Association (ICMA) for conducting social financing. They have four components: (1) Use of Proceeds (2) Process for Project Evaluation and Selection(3) Management of Proceeds and (4) Reporting.
(Note 2): SDGs is an abbreviation for Sustainable Development Goals. They have 17 goals and 169 targets concerning poverty, equality, education, environment and other issues to realize a world where “no one will be left behind” by 2030, andwere adopted by all United Nations Member States in 2015.

27

Appendix

Ⅴ28

Ⅴ Appendix

Portfolio Map
Paid nursing home
Strategic
investment inthree major
metropolitan
areas

Ratio of investment inthree major metropolitan areas

86.1%
43.0％

Core cities

Other areas

AQUAMARINE Nishinomiyahama

2

Bonsejour Chitose-funabashi

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

5

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa

6

Kinki area

Chubu area

1

11.3％

Tokyo metropolitan area

2.0％

41.1％

2.6％

Serviced housing for the elderly

Medical Rehabilitation Home Bonsejour Komaki

7

ASHEIM Hikarigaoka

8

ASHEIM Bunkyohakusan

9

SOMPO CARE La vie Re Machidaonoji

10

SOMPO CARE La vie Re Azamino

11

SAWAYAKA Tachibanakan

12

SAWAYAKA Mekarikan

13

SAWAYAKA Tagawakan

14

GOOD TIME HOME Fudo-mae

15Bonsejour Yotsugi

16

Medical Home Bonsejour Itami

17

Kobe Gakuentoshi Building (Happine Kobegakuentoshi)

18

GreenLife Moriguchi

19

Happine Kobe Uozaki Nibankan

20Granda Tsuruma-Yamato

21

Smiling Home Medice Adachi

22

AIKOEN ICHIBANKAN Building (AIKOEN ICHIBANKAN)

23

Hanakotoba Minami

24

Hanakotoba Miura

25

SOMPO CARE La vie Re Hama-Kawasaki

1

SOMPO CARE Sompo no ie S Awajiekimae

26

Hanakotoba Shin-Yokohama

2

SOMPO CARE Sompo no ie S Kobekamisawa

27

Hanakotoba Shin-Yokohama Ⅱ

28

Hanakotoba Odawara

29

Verde Minowa

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

Medical service-related facilities, etc.
1

Niigata Rehabilitation HospitalComplex of paid nursing homes, medical service-related
facilities, etc.
1

SHIP SENRI BUILDING

29

Ⅴ Appendix

Details of Portfolio (As of the end of 8th Fiscal Period) (1)Paid nursing home

1

2

3

4

5

AQUAMARINE
Nishinomiyahama

Bonsejour
Chitose-funabashi

Bonsejour Hino

BonsejourMusashi-shinjo

Medical Rehabilitation Home
Bonsejour
Hadanoshibusawa

Location

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

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

438-1, Ochikawa,
Hino-shi, Tokyo

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

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

Nearest Station

Hanshin Nishinomiya Station on
Hanshin Main Line

Chitose-funabashi Station on
Odakyu Odawara Line

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

Shibusawa Station on
Odakyu Odawara Line

Construction
Completion

May 2007

March 1988

May 1990

February 1985

July 1991

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

118 million yen

49 million yen

43 million yen

36 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.0%

5.9%

6.0%

6.2%

6.4%

Appraisal Value (Note 1)

2,140 million yen

974 million yen

818 million yen

643 million yen

850 million yen

Acquisition Price (ratio)

1,950 million yen (3.0％)

824 million yen (1.3％)

724 million yen (1.1％)

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

Site area

2,587.93 m²

1,020.92 ㎡

2,211.28 m²

1,233.49 m²

2,588.04 m²

Leasable area

5,157.26 m²

2,342.17 m²

1,984.17 m²

1,710.43 m²

3,435.79 m²

Structure/
Number of floor (Note 2)

RC, 5F

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

Number of Rooms/Resident Capacity

90 rooms, 100 people

42 rooms, 47 people

56 rooms, 58 people

46 rooms, 49 people

100 rooms, 101 people

Occupancy Rate (Note 3)

96.0%

95.7%

93.1%

89.8%

93.1%

Operator

GREEN LIFE

Benesse style Care

Benesse style Care

Benesse style Care

Benesse style Care

Remaining years oflease agreement (Note 4)

18.3 years

7.3 years

7.3 years

7.8 years

8.3 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019). Appraisal NOI is rounded down to the nearest million yen andAppraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of February 1, 2019, rounded down to the first decimal place.

30

Ⅴ Appendix

Details of Portfolio (As of the end of 8th Fiscal Period) (2)Paid nursing home

6

7

8

9

10

Medical Rehabilitation Home
Bonsejour Komaki

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

Sompo CARE La vie Re
Machidaonoji

Sompo CARE La vie Re
AzaminoLocation

3-1, Shiroyama,
Komaki-shi, Aichi

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

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

1612, Onojimachi,
Machida-shi, Tokyo

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

Nearest Station

Ajioka Station
on Meitetsu Komaki Line

Shakujii-koen Station on
Seibu Ikebukuro Line

Hakusan Station on
Toei Subway Mita Line

Construction
Completion

March 1991

March 2006

February 2007

October 2007

March 2004

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

92 million yen

76 million yen

73 million yen

192 million yen

155 million yen

Appraisal NOI yield (Note 1)

7.3%

5.5%

5.1%

5.3%

5.1%

Appraisal Value (Note 1)

1,450 million yen

1,570 million yen

1,630 million yen

3,810 million yen

3,270 million yen

Acquisition Price (ratio)

1,270 million yen (2.0％)

1,385 million yen (2.1％)

1,430 million yen (2.2％)

3,580 million yen (5.5％)

3,050 million yen (4.7％)

Site area

8,229.85 m²

2,868.46 m²

540.29 m²

7,404.13 m²

2,748.64 m²

Leasable area

8,858.49 m²

3,628.60 m²

2,494.78 m²

7,720.17 m²

5,789.25 m²

Structure/
Number of floor (Note 2)

SRC, 10FRC, 3FRC, 8F

RC, B1F/6F

RC, B1F/5F

Number of Rooms/Resident Capacity

124 rooms, 165 people

83 rooms, 89 people

50 rooms, 52 people

163 rooms, 169 people

145 rooms, 145 people

Occupancy Rate (Note 3)

67.3%

91.0%

86.5%

66.3%

57.9%

Operator

Benesse style Care

AS PARTNERS

AS PARTNERS

Sompo Care

Sompo Care

Remaining years oflease agreement (Note 4)

8.3 years

15.1 years

8.1 years

8.7 years

8.4 years

Keio Nagayama Station
on Keio Sagamihara
Line

Odakyu Nagayama
Station on Odakyu
Tama Line

Nakagawa Station on
Yokohama Municipal Subway Blue Line

(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019). Appraisal NOI is rounded down to the nearest million yen andAppraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of February 1, 2019, rounded down to the first decimal place.

31

Ⅴ Appendix

Details of Portfolio (As of the end of 8th Fiscal Period) (3)Paid nursing home

11

12

13

14

15

SAWAYAKA Tachibanakan

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME
Fudo-mae

Bonsejour Yotsugi

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

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

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

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

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

Nearest Station

Sasahara Station on
JR Kagoshima Honsen Line

Mojiko Station on
JR Kagoshima Honsen Line

Magarikane Station on
Heisei Chikuho Railway Tagawa Line

Fudo-mae Station on
Tokyu Meguro Line

Yotsugi Station on
Keisei Railway Oshiage Line

Construction
Completion

October 2005

November 2005

January 2006

March 1992

March 1989

Acquisition Period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2016

Appraisal NOI (Note 1)

95 million yen

87 million yen

26 million yen

91 million yen

48 million yen

Appraisal NOI yield (Note 1)

6.2%

6.3%

6.6%

5.2%

5.8%

Appraisal Value (Note 1)

1,580 million yen

1,450 million yen

412 million yen

1,940 million yen

886 million yen

Acquisition Price (ratio)

1,520 million yen (2.3％)

1,380 million yen (2.1％)

390 million yen (0.6％)

1,740 million yen (2.7％)

824 million yen (1.3％)

Site area

3,359.66 m²

3,758.26 m²

4,300.90 m²

1,206.60 m²

1,136.46㎡

Leasable area

5,652.94 m²

4,720.46 m²

2,366.20 m²

3,400.20 m²

1,962.89㎡

Structure/
Number of floor (Note 2)

RC, B1F/6F

RC, 4FRC, 3F

RC（S in part）, B1F/5F

RC, 5F

Number of Rooms/Resident Capacity

104 rooms, 104 people

95 rooms, 95 people

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

Occupancy Rate (Note 3)

99.0%

97.9%

93.3%

94.0%

90.8%

Operator

Sawayaka Club

Sawayaka Club

Sawayaka ClubJAPAN LIFE DESIGN

Benesse Style Care

Remaining years oflease agreement (Note 4)

9.0 years

9.0 years

9.0 years

7.8 years

6.9 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019). Appraisal NOI is rounded down to the nearest million yen andAppraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of February 1, 2019, rounded down to the first decimal place.

32

Ⅴ Appendix

Details of Portfolio (As of the end of 8th Fiscal Period) (4)Paid nursing home

16

17

18

19

20

Medical home Bonsejour
Itami

Kobe Gakuentoshi Building(Happine Kobegakuentoshi)

GreenLife Moriguchi

Happine Kobe Uozaki
Nibankan

Granda Tsuruma-Yamato

Location

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

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

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

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

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

Nearest Station

Hankyu Itami Station on
Hankyu Railway Itami Line

Gakuentoshi Station on
Kobe Municipal Subway Seishin-Yamate Line

Dainichi Station on Osaka Municipal Subway
Tanimachi Line and Osaka Monorail

Uozaki Station on
Hanshin Electric Railway

Tsuruma Station on
Odakyu Enoshima Line

Construction
Completion

March 1988

January 2009

September 2006

March 2010

March 1998

Acquisition Period

Fiscal period ended July 2016

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

36 million yen

225 million yen

221 million yen

48 million yen

53 million yen

Appraisal NOI yield (Note 1)

7.1%

5.2%

5.3%

5.2%

5.3%

Appraisal Value (Note 1)

557 million yen

4,420 million yen

4,410 million yen

995 million yen

1,060 million yen

Acquisition Price (ratio)

514 million yen (0.8％)

4,320 million yen (6.7％)

4,150 million yen (6.4％)

930 million yen (1.4％)

1,000 million yen (1.5％)

Site area

1,976.11 m²

2,742.81 m²

5,872.83 m²

933.33㎡

2,877.11㎡

Leasable area

2,129.87 m²

12,636.48 m²

8,356.85 m²

1,772.89 m²

3,427.08 m²

Structure/
Number of floor (Note 2)

SRC, 11F

RC, B1F/9F

SRC, 9F

S, B1F/4F

RC (S in part), 5F

Number of Rooms/Resident Capacity

62 rooms, 64 people

128 rooms, 138 people

155 rooms, 189 people

47 rooms, 47 people

73 rooms, 90 people

Occupancy Rate (Note 3)

96.9%

92.0%

97.4%

97.9%

80.0%

Operator

Benesse Style Care

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse Style Care

Remaining years oflease agreement (Note 4)

8.3 years

22.1 years

20.7 years

22.1 years

3.1 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019). Appraisal NOI is rounded down to the nearest million yen andAppraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of February 1, 2019, rounded down to the first decimal place.

33

Ⅴ Appendix

Details of Portfolio (As of the end of 8th Fiscal Period) (5)Paid nursing home

21

22

23

24

25

Smiling Home
Medice Adachi

AIKOEN ICHIBANKAN
Building(AIKOEN ICHIBANKAN)

Hanakotoba
Minami

Hanakotoba
Miura

SOMPO CARE La vie Re
Hama-Kawasaki

Location

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

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

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

3-5, Suwacho, Miura-shi, Kanagawa

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

Nearest Station

Rokucho Station on
Tsukuba Express

Niigata Station on
JR Shinetsu Main Line

Yoshinocho Station on
Yokohama Municipal Subway Blue Line

Misakiguchi Station on
Keikyu Kurihama Line

Odasakae Station on JR Nambu Line

Construction
Completion

November 2005

February 2010

February 2010

June 2007

March 2007

Acquisition Period

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended January 2019

Fiscal period ended January 2019

Fiscal period ending July 2019

Appraisal NOI (Note 1)

119 million yen

45 million yen

56 million yen

35 million yen

90 million yen

Appraisal NOI yield (Note 1)

5.3%

5.9%

5.2%

5.7%

5.2%

Appraisal Value (Note 1)

2,440 million yen

863 million yen

1,190 million yen

664 million yen

1,820 million yen

Acquisition Price (ratio)

2,253 million yen (3.5％)

770 million yen (1.2％)

1,071 million yen (1.7%)615 million yen (0.9%)

1,710 million yen (2.6%)

Site area

2,069.41㎡

2,597.52 m²

428.76 m²

1,017.55 m²

2,832.33 m²

Leasable area

3,870.98 m²

4,311.20 m²

1,710.68 m²

1,959.64 m²

4,060.21 m²

Structure/
Number of floor (Note 2)

RC, 4F

S, 5F

RC, 7FRC, 4FRC, 4F(Exclusive portion)

Number of Rooms/Resident Capacity

82 rooms, 82 people

90 rooms, 90 people

51 rooms, 51 people

53 rooms, 54 people

58 rooms, 58 people

Occupancy Rate (Note 3)

86.6%

98.9%

100.0%

92.6%

82.8%

Operator

GREEN LIFE HIGASHINIHON Co., Ltd.

Medical Corporation AIKOKAI

Proud Life Inc.

Proud Life Inc.

Sompo Care

Remaining years oflease agreement (Note 4)

18.0 years

17.5 years

13.8 years

13.8 years

8.9 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019). Appraisal NOI is rounded down to the nearest million yen andAppraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of February 1, 2019, rounded down to the first decimal place.

34

Ⅴ Appendix

Details of Portfolio (As of the end of 8th Fiscal Period) (6)Paid nursing home

26

27

28

29

30

Hanakotoba
Shin-Yokohama

Hanakotoba
Shin-Yokohama Ⅱ

Hanakotoba Odawara

Verde Minowa

Verde Hotaka

Location

1-11-5, Shinyokohama, Kohoku-ku,
Yokohama-shi, Kanagawa

1-11-11, Shinyokohama, Kohoku-ku,
Yokohama-shi, Kanagawa

3-383-10, Sakawa, Odawara-shi,
Kanagawa

839-4, Azamachiyabo, Kamishiba,
Misatomachi, Takasaki-shi, Gunma

1221, Azamaebara, Oazanamashina,
Kawaba-mura, Tone-gun, Gunma

Nearest Station

Shin-Yokohama Station on Yokohama Municipal
Subway Blue Line and JR Yokohama Line

Shin-Yokohama Station on Yokohama Municipal
Subway Blue Line and JR Yokohama Line

Kamonomiya Station on JR Tokaido Line

Takasaki Station on JR Takasaki Line

Numata Station on JR Joetsu Line

Construction
Completion

March 2004

April 2007

September 2009

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

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

Acquisition Period

Fiscal period ending July 2019

Fiscal period ending July 2019

Fiscal period ending July 2019

Fiscal period ending July 2019

Fiscal period ending July 2019

Appraisal NOI (Note 1)

109 million yen

22 million yen

49 million yen

109 million yen

90 million yen

Appraisal NOI yield (Note 1)

5.2%

5.8%

5.6%

6.7%

7.0%

Appraisal Value (Note 1)

2,230 million yen

401 million yen

948 million yen

1,700 million yen

1,360 million yen

Acquisition Price (ratio)

2,071 million yen (3.2％)

375 million yen (0.6％)880 million yen (1.4%)

1,620 million yen (2.5%)

1,290 million yen (2.0%)

Site area

894.00 ㎡

375.00 m²

1,202.12 m²

7,550.81 m²

4,375.31 m²

Leasable area

5,230.23 m²

1,837.29 m²

2,203.42 m²

11,098.17 m²

6,352.86 m²

Structure/
Number of floor (Note 2)

RC, 9F

RC, B1F/7F

RC, 4F

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

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

Number of Rooms/Resident Capacity

136 rooms, 136 people

21 rooms, 22 people

60 rooms, 65 people

174 rooms, 206 people

121 rooms, 174 people

Occupancy Rate (Note 3)

92.6%

95.5%

92.3%

97.6%

98.3%

Operator

Proud Life Inc.

Proud Life Inc.

Proud Life Inc.

Verde Corporation

Verde Corporation

Remaining years oflease agreement (Note 4)

13.8 years

13.8 years

13.8 years

8.3 years

8.3 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019). Appraisal NOI is rounded down to the nearest million yen andAppraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of February 1, 2019, rounded down to the first decimal place.

35

Ⅴ Appendix

Details of Portfolio (As of the end of 8th Fiscal Period) (7)Paid nursing home31
Sunny Life Kita-Shinagawa

Serviced housing for the elderly

1

2

SOMPO CARE Sompo no ie S SOMPO CARE Sompo no ie S
Awajiekimae
Kobekamisawa

Medical service-related facilities, etc.

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

1

1

Niigata Rehabilitation
Hospital

SHIP SENRI BUILDING

Location

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

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

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

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

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

Nearest Station

Shimbamba Station on Keikyu Line

Awaji Station on
Hankyu Railway Kyoto and Senri Lines

Kamisawa Station on
Kobe Municipal Subway Seishin-Yamate Line

Hayadori Station on JR Hakushin Line

Senri-Chuo Station on Kita-Osaka Kyuko
Namboku Line and Osaka Monorail

Construction
Completion

September 2018

June 2009

June 2009

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

September 2008

Acquisition Period

Fiscal period ending July 2019

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended January 2018

Fiscal period ending July 2019

Appraisal NOI (Note 1)

90 million yen

116 million yen

72 million yen

153 million yen

681 million yen

Appraisal NOI yield (Note 1)

4.9%

6.0%

6.0%

7.4%

5.2%

Appraisal Value (Note 1)

1,960 million yen

2,170 million yen

1,340 million yen

2,260 million yen

14,300 million yen

Acquisition Price (ratio)

1,825 million yen (2.8％)

1,930 million yen (3.0％)

1,200 million yen (1.9％)

2,060 million yen (3.2％)

12,920 million yen (19.9%)

Site area

1,105.12 ㎡

1,251.26 m²

743.22 m²

15,056.85 m²

4,202.65 m²

Leasable area

2,135.54 m²

5,658.53 m²

3,626.25 m²

13,476.55 m²

24,813.85 m²

Structure/
Number of floor (Note 2)

S, 3F

RC, 12F

S, 9F

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

RC, B1/11F

Number of Rooms/Resident Capacity

66 rooms, 66 people

137 rooms/137 people (Note 3)

85 rooms, 85 people

168 beds (Note 3)

Hospital: 400 beds (Note 3)
Paid nursing home: 181 rooms, 200 people

Occupancy Rate (Note 3)

－

86.9%

97.6%

－

Paid nursing home: 100 %Operator

Kawashima Corporation

Sompo Care

Sompo Care

Medical Corporation AIKOKAI

Kyowakai Medical Corporation
GREENLIFE

Remaining years oflease agreement (Note 4)

24.7 years

15.5 years

15.5 years

28.1 years

19.7 years(Note 1): Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019). Appraisal NOI is rounded down to the nearest million yen andAppraisal NOI yield to the first decimal place.
(Note 2): As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3): Occupancy Rate indicates the occupancy rate stated in the Property Disclosure Statement of Important Issues, or the ratio obtained by dividing the number of residents by resident capacity, rounded to the first decimal place.
(Note 4): Remaining years of lease agreement is as of February 1, 2019, rounded down to the first decimal place.

36

Ⅴ Appendix

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

Operator name

Attribute

Facilities andhousing forthe elderly

Hospital

GREEN LIFE Inc.

25－

GREEN LIFE HIGASHI NIHON Co.,
Ltd.

36

－

Sompo Care Inc.

444－

Remarks

Facilities owned by HCM

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

AQUAMARINE Nishinomiyahama
Kobe Gakuentoshi Building
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
Smiling Home Medice Adachi
SHIP SENRI BUILDING (Well House Senri-Chuo)

Consolidated subsidiary of
Sompo Holdings, Inc., which
is listed on the TSE First
SectionMainly operates paid nursing homes with care service
under the Sompo Care La vie Re brand and mid- to
low-end homes under the SOMPO CARE Sompo no ie
brand and the SOMPO CARE Sompo no ie S brand,
centering on three major metropolitan areas.

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

Benesse Style Care Co., Ltd.

316－

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

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

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

Sawayaka Club Co., Ltd.

79－

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

Operates low-price facilities with no initial fees under
the SAWAYAKA brand in Fukuoka Prefecture andelsewhere in Japan.

SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

AS PARTNERS Co., Ltd.

15－

Unlisted company

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

ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan(Note 1): “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of March 31, 2018).
(Note 2): Only the number of long-term care health facilities is indicated.

37

Ⅴ Appendix

Operator List (2)Number of facilities(Note 1)

Operator nameFacilities andhousing forthe elderly

Attribute

Remarks

Facilities owned by HCM

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

GOOD TIME HOME Fudo-mae

Hospital

JAPAN LIFEDESIGN Inc.

3－

Unlisted company
Capital partnership byNomura Real Estate Holdings,
Inc.

Medical Corporation AIKOKAI

10

2

A medical corporation which
belongs to NSG Group withsales of over 60 billion yen

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

AIKOEN ICHIBANKAN Building (AIKOUEN ICHIBANKAN)
Niigata Rehabilitation Hospital－

A major medical corporation operating a wide range ofbusinesses including six hospitals (2,024 beds), four
long-term care health facilities (495 beds) and homecare support. Provides safe and convenient
medical/nursing care services for all, from those in anacute stage to those in need of rehabilitation, at-homemedical/nursing care.

SHIP SENRI BUILDING (Senri-Chuo Hospital)

Sunny Life Kita-Shinagawa(Note 3)

Kyowakai Medical Corporation

Kawashima Corporation

4(Note 2)

115

6

－

Unlisted company

A major nursing care business operator operating
nationwide centering on the Tokyo Metropolitan Area,
with Sunny Life as the main brand and under the
motto “Encourage the elderly and the family to getrelieved from exhausting nursing care.” None of theirfacilities requires initial fees.
Former Yuuai Holdings Group company. Operates paid
nursing homes, etc. under the “Hanakotoba” brandcentering on Kanagawa. Came under Sony Financial
Holdings Inc. in 2017.

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

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

Verde Minowa
Verde Hotaka

Proud Life Inc.

26－

Consolidated subsidiary ofSony Financial Holdings Inc.,
which is listed on the TSEFirst Section

Verde Corporation

5－

Unlisted company(Note 1): “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of March 31, 2018. For Kyowakai
Medical Corporation, Kawashima Corporation and Verde Corporation, as of October 31, 2018).
(Note 2): Only the number of long-term care health facilities is indicated.
(Note 3): Indicates the actual figures in fiscal 2016 based on NSG Group’s website.

38

Ⅴ Appendix

Summary of Appraisal Report (1)Property nameAppraisal company

Appraisal value(million yen)
(Note 1)
(A)

Summary of Appraisal Report
Direct capitalization method

End of July 2018

DCF method

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

Discount rate(％)

Terminal
capitalization rate(％)

Appraisal NOI(million yen)
(Note 2)

Appraisal value(million yen)(B)

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

2,140

2,150

5.3

2,130

5.0

5.5

118

2,140

0

Bonsejour Chitose-funabashi

The Tanizawa Sogo Appraisal Co., Ltd.

974

993

4.4

966

4.5

4.6

49

974

0

Bonsejour Hino

The Tanizawa Sogo Appraisal Co., Ltd.

818

832

4.8

812

4.9

5.0

43

818

0

Bonsejour Musashi-shinjo

The Tanizawa Sogo Appraisal Co., Ltd.

643

653

5.1

638

5.2

5.3

36

643

0

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

The Tanizawa Sogo Appraisal Co., Ltd.

850

864

5.0

844

5.1

5.2

47

850

0

Medical Rehabilitation Home Bonsejour Komaki

The Tanizawa Sogo Appraisal Co., Ltd.

1,450

1,460

5.5

1,440

5.6

5.7

92

1,450

0

ASHEIM Hikarigaoka

Japan Real Estate Institute

1,570

1,590

4.8

1,550

4.6

5.0

76

1,570

0

ASHEIM Bunkyohakusan

Japan Real Estate Institute

1,630

1,650

4.4

1,610

4.2

4.6

73

1,630

0

SOMPO CARE La vie Re Machidaonoji

Japan Real Estate Institute

3,810

3,850

4.9

3,760

4.7

5.1

192

3,810

0

SOMPO CARE La vie Re Azamino

Japan Real Estate Institute

3,270

3,310

4.6

3,220

4.4

4.8

155

3,270

0

SAWAYAKA Tachibanakan

Japan Real Estate Institute

1,580

1,590

5.6

1,560

5.4

5.8

95

1,580

0

SAWAYAKA Mekarikan

Japan Real Estate Institute

1,450

1,460

5.7

1,440

5.5

5.9

87

1,450

0

SAWAYAKA Tagawakan

Japan Real Estate Institute

412

415

5.8

409

5.6

6.0

26

412

0

GOOD TIME HOME Fudo-mae

Japan Real Estate Institute

1,940

1,960

4.4

1,910

4.2

4.6

91

1,930

+10

Bonsejour Yotsugi

The Tanizawa Sogo Appraisal Co., Ltd.

886

902

4.7

879

4.8

4.9

48

886

0

Medical Home Bonsejour Itami

The Tanizawa Sogo Appraisal Co., Ltd.

557

566

5.1

553

5.2

5.3

36

557

0

Kobe Gakuentoshi Building (Happine Kobegakuentoshi)

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

4,420

4,480

4.7

4,400

4.5

4.9

225

4,520

-100

GreenLife Moriguchi

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

4,410

4,470

4.6

4,380

4.4

4.8

221

4,410

0

Happine Kobe Uozaki Nibankan

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

995

1,010

4.6

989

4.4

4.8

48

995

0

Granda Tsuruma-Yamato

The Tanizawa Sogo Appraisal Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

1,060

0

Smiling Home Medice Adachi

The Tanizawa Sogo Appraisal Co., Ltd.

2,440

2,470

4.7

2,430

4.8

4.9

119

2,440

0

AQUAMARINE Nishinomiyahama(Note 1): “Appraisal Value” is based on the appraisal report with January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019) as the appraisal date.
(Note 2): “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019) as theappraisal date, and is rounded down to the nearest million yen. The above appraisal NOI is NOI obtained by direct capitalization method.

39

Ⅴ Appendix

Summary of Appraisal Report (2)Property nameAppraisal value(million yen)
(Note 1)
(A)

Appraisal company

Summary of Appraisal Report
Direct capitalization method

End of July 2018

DCF method

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

Discount rate(％)

Terminal
capitalization rate(％)

Appraisal NOI(million yen)
(Note 2)The Tanizawa Sogo Appraisal Co., Ltd.

863

867

5.2

861

5.3

5.4

45

Hanakotoba Minami

Japan Real Estate Institute

1,190

1,200

4.6

1,170

4.4

4.8

56

Hanakotoba Miura

The Tanizawa Sogo Appraisal Co., Ltd.

664

672

4.9

661

5.0

5.1

35

JLL Morii Valuation & Advisory K.K.

1,820

1,850

4.6

1,790

4.4

4.8

90

Hanakotoba Shin-Yokohama

Japan Real Estate Institute

2,230

2,260

4.5

2,200

4.3

4.7

109

Hanakotoba Shin-Yokohama Ⅱ

Japan Real Estate Institute

401

404

4.8

398

4.6

5.0

22

The Tanizawa Sogo Appraisal Co., Ltd.

948

960

4.9

943

4.8/5.0

5.1

49

Verde Minowa

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

1,700

1,710

5.0

1,690

4.8

5.2

109

Verde Hotaka

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

1,360

1,370

5.6

1,350

5.4

5.8

90

Sunny Life Kita-Shinagawa

DAIWA REAL ESTATE APPRAISAL CO.,LTD.

1,960

1,990

4.5

1,940

4.3

4.7

90

SOMPO CARE Sompo no ie S Awajiekimae

Japan Real Estate Institute

2,170

2,190

5.2

2,150

5.0

5.4

SOMPO CARE Sompo no ie S Kobekamisawa

Japan Real Estate Institute

1,340

1,350

5.2

1,330

5.0

Niigata Rehabilitation Hospital

Japan Real Estate Institute

2,260

2,270

6.6

2,250

The Tanizawa Sogo Appraisal Co., Ltd.

14,30014,4004.5

Total

70,511

71,238－

AIKOEN ICHIBANKAN Building (AIKOEN ICHIBANKAN)

SOMPO CARE La vie Re Hama-Kawasaki

Hanakotoba Odawara

SHIP SENRI BUILDING

Difference(millionyen)(A)- (B)

Appraisal value(million yen)
(B)
863

0

116

2,170

0

5.4

72

1,340

0

6.4

6.8

153

2,260

0

14,2004.5/4.6

4.7

681

69,903

－

－

3,647

44,028-90(Note 1): “Appraisal Value” is based on the appraisal report with January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019) as the appraisal date.
(Note 2): “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with January 31, 2019 (November 30, 2018 for the eight properties acquired on February 1, 2019) as theappraisal date, and is rounded down to the nearest million yen. The above appraisal NOI is NOI obtained by direct capitalization method.

40

Ⅴ Appendix

Status of Income/Expenditure of Owned Properties(As of the End of the 8th Fiscal Period)(Unit: thousand yen)

Real estate lease business revenue for
8th Fiscal Period
Property nameRent
revenue

Real estate lease business expenses for 8th Fiscal Period

Other
revenue

Propertytax

Outsourcing

Insurance
expenses

Repairexpenses

Depreciation
andamortization

NOI (Note 2)
Other

AQUAMARINE Nishinomiyahama

23,209

4,478

2,100

151

1,219

14,860400

58,994

Bonsejour Chitose-funabashi

5,544

1,790

224

76

－

3,048

404

21,425

Bonsejour Hino

5,042

1,240

213

58

－

3,130

400

19,521

Bonsejour Musashi-shinjo

4,064

998

167

51

－

2,447

400

16,186

Medical Rehabilitation Home Bonsejour Hadanoshibusawa

8,365

1,829

213

104

－

5,817

400

21,110

Medical Rehabilitation Home Bonsejour Komaki

14,038

4,568

201

241

－

8,627

400

39,599ASHEIM Hikarigaoka

12,047

3,698

388

110

189

7,258

400

39,011ASHEIM Bunkyohakusan

10,234

2,494

388

82

－

6,868

400

36,466

SOMPO CARE La vie Re Machidaonoji

45,889

5,843

780

244

2,508

36,112400

95,085

SOMPO CARE La vie Re Azamino

32,049

4,749

780

179

450

25,489400

78,540SAWAYAKA Tachibanakan

26,133

2,666

1,140

209

－

21,718400

47,321SAWAYAKA Mekarikan

25,493

2,988

1,140

133

－

20,831400

43,621

8,308

1,126

1,140

63

－

5,578

400

12,964

11,769

3,051

600

115

373

7,228

400

46,459SAWAYAKA Tagawakan
Not disclosed(Note 1)

GOOD TIME HOME Fudo-mae
Bonsejour Yotsugi

4,927

968

223

49

－

3,286

400

20,708

Medical Home Bonsejour Itami

6,480

1,374

371

75

－

4,260

400

13,972

Kobe Gakuentoshi Building (Happine Kobegakuentoshi)

50,521

9,547

900

382

55

39,236400

114,215

GreenLife Moriguchi

38,424

6,937

1,388

251

6,006

23,439400

105,015

Happine Kobe Uozaki Nibankan

9,509

1,405

1,200

60

－

6,444

400

24,434Granda Tsuruma-Yamato

6,848

1,938

618

100

－

3,791

400

27,100Smiling Home Medice Adachi

12,837

3,219

540

117

545

8,013

400

59,904

AIKOEN ICHIBANKAN Building (AIKOEN ICHIBANKAN)

8,765

2,566

780

75

313

4,630

400

22,525

Hanakotoba Minami

3,362

－

400

31

－

2,661

269

19,698

Hanakotoba Miura

3,250

－

400

37

－

2,543

269

12,895

SOMPO CARE Sompo no ie S Awajiekimae

28,202

4,942

510

186

1,228

20,934400

57,195

SOMPO CARE Sompo no ie S Kobekamisawa

17,418

2,916

510

118

865

12,608400

35,484

Niigata Rehabilitation Hospital

26,228

9,872

1,030

257

－

14,569500

78,220448,967

87,21318,3503,565

13,757315,438

10,643

1,167,680

Total

1,301,210

1,294,178

7,031(Note 1): ”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants.
The total is the sum of amounts received as rent for the fiscal period under review based on the lease agreements.
(Note 2): “NOI”=Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization

41

Ⅴ Appendix

Balance Sheet and Statement of Income for the 8th Fiscal Period
Balance Sheet

Statement of Income(Unit: thousand yen)

(Unit: thousand yen)
7th Fiscal Period(Ended July 2018)

7th Fiscal Period(Ended July 2018)

8th Fiscal Period(Ended January 2019)

AssetsCurrent assets

1,138,381

1,500,281

Cash and deposits

1,018,147

1,318,873

Cash and deposits in trust

44,708108,051

Prepaid expenses

75,52473,355

Non-current assets

41,285,392

42,817,455

Property, plant and equipment

41,149,494

42,714,752

Buildings in trust

20,987,933

21,584,524

Structures in trust

69,41470,970Machine and device in trust

10,13911,446

Tools, furniture and fixtures in trust
Land in trust
Construction in progress in trust

29,344

34,046

20,052,662

21,009,170

－

4,594

4,574

3,465

Investments and other assets

131,323

99,237

Deferred assets

14,947

9,964

42,438,720

44,327,701

1,397,253

9,942,694

18,55740,8681,000,000

9,450,000

Intangible assets

Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable(Note 1)

Accounts payable - other

21,16388,452

Accrued expenses

141,850

145,439

857

950

9,798

5,243

Advances received

204,953

211,457

Deposits received

72

283

Income taxes payable
Accrued consumption taxes

Operating revenue
Lease business revenue

8th Fiscal Period(Ended January 2019)

1,267,273

1,301,210

1,260,324

1,294,178

6,948

7,031

642,135

654,208

Expenses related to rent business

441,644448,967

Asset management fee

119,445

122,274

Asset custody fee

2,118

2,164

Administrative service fees

15,406

15,482

Directors’ compensations

3,000

3,000

Property tax

15,942

16,886

Other lease business revenue
Operating expenses

44,57845,433625,137

647,002

3,484

537

Reversal of distribution payable－

533

Interest income

7

3

3,397

－

Other operating expenses
Operating income
Non-operating income

Insurance income

79－

Non-operating expenses

106,619

106,914

Interest expenses

61,44965,046

Interest on refund of consumption taxes and other

Investment unit issuance expenses

5,903

4,982

Borrowing related expenses

39,26636,885

Non-current liabilities

20,719,235

14,070,373

Long-term loans payable

19,700,000

13,000,000

Ordinary income

522,001

540,625

Tenant leasehold and security deposits

1,009,999

1,009,999

9,104

34,604

Income before income taxes

522,001

540,625

131－

Tenant leasehold and security deposits in trust
Deferred tax liabilities
Derivatives liabilities
Total liabilities－

25,76922,116,488

24,013,068

Net assets
Unitholders’ equity

20,321,920

20,340,403

Unitholders’ capital

19,800,696

19,800,696

521,223539,706

312-25,769

Surplus
Valuation and translation adjustments(Deferred gains and losses on hedges)
Total net assets

20,322,232

20,314,633

Total liabilities and net assets

42,438,720

44,327,701

Total income taxes
Income taxes - current
Income taxes - deferred
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)(Note 1): Figures include current portion of long-term loans payable.

860

946

858

950

2

-4

521,141

539,6788227

521,223539,706

42

V Appendix

Size of Healthcare Facility Real Estate Market
Group homes6%Serviced housing for the elderly
Facilities for people
requiring no assistance

5%

17%

Serviced housing for the elderly
4%
Paid nursing home
13%

Size of real estate
securitization market

Healthcare facility
real estate market
45 trillion yen

Approx.
300 billion yen
to350 billion yen

Facilities for people requiring nursing care78%
 Of healthcare facilities, the real estate market sizeof paid nursing homes and serviced housing forthe elderly is around 7.5 trillion yen.

 Of which, real estate securitization outstanding is

4-5%.

(as of June 2016)

Three long-term careinsurance facilities
26%

Hospital real estate51%
 Hospital real estate accounts for over 50% of theentire healthcare facility real estate market, and ismostly self-owned by medical corporations, etc.

43
(Note): Prepared by the Asset Management Company based on preliminary calculation by KPMG Healthcare Japan Co., Ltd.

V Appendix

Environment Surrounding Healthcare Facilities
Rising Elderly Ratio and Increase in Elderly Single Households
Outlook of change in Japan’s population and elderly ratio
Ratio of 65 years old or older█ 64 years old or younger(10 thousand people)

15,000█ 65-74 years old

Actual█ 75 years old or older

14.6%

10.3%
10,854

10,718

776
471
1985

1,109
717
1995

0

40%

65～74歳

20.2%

10,0005,000

Estimate

64歳以下

26.6%

36.8%

32.8%

30.0%

9,322

8,577

7,740

6,723

1,407
1,160

1,754
1,632

1,497
2,180

1,522
2,260

1,643

2005

2015

2025

2035

2045

10,161

2,277

20%

0%

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

20,00010,000

30.7%

28.5%

5,818

5,033

0

Estimate

34.0%

35.7%

37.4%

39.0%

40.0%

50%

32.6%

6,879

6,756

6,606

6,510

6,590

30%

6,650

6,763

6,693

6,666

6,870

20%

6,277

6,740

3,865

4,980

6,253

7,025

7,512

7,959

8,418

8,963

2005

2010

2015

2020

2025

2030

2035

2040

5,403

4,648

0

定員数

0.5%

1.0%

供給率

0.6%

0.6%

0.7%

0.7%

123,155 147,981 176,935 183,245 195,972 216,174
2007

2008

2009

2010

1.1%

1.3%

1.2%

1.4%

1.5%
1.0%

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

2011

2012

2013

200,000

0

戸数

2014

2015

2016

Resident capacity

230

thousand people

June
2012

Dec.
2012

Supply rate for 65 years old or older

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

June
2013

Dec.
2013

June
2014

Dec.
2014

690

thousand people

Outcome indicator

Resident capacity

1,460

thousand people

2014

2.1％

2025

４％

Current Status of Reconstruction of Hospitals, etc.
 Hospitals that were constructed in 1960’s and 1970’s and do not meet theearthquake resistance standards still exist.
Ratio of quake-resistant paid nursing homes is 95% or more while that of quakeresistant hospitals remain at 72.9%.
(Ministry of Health, Labour and Welfare’s 2017 “Survey on Seismic Retrofit of Hospitals”)

0.0%<“Act for Partial Revision of the Act on Promotion of Seismic Retrofitting of Buildings” was enforced in November 2013>(Hospital: Having more than 3 floors above ground and a total floor area of 5,000 m² or more)

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

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

0.5%

(Units)█ Number of units

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

Resident capacity

2005

Supply status of serviced housing for the elderly
400,000

Housing Life Basic Plan
(nationwide plan)Supply rate

█ Resident capacity

2006

March
2016

0.9％

(Resident capacity)

200,000

Guidelines Concerning
REITs Targeting Hospital
Real Estate0%

Supply status of paid nursing homes

0.5%

June
2015

10%

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

400,000

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

40%

Promotion of Further Supply of Healthcare Facilities

600,000

June
2014

Ratio of housing for the elderly as a percentage of theelderly population█ Elderly households (65 years old or older)
Ratio of single elderly

Actual30,000Upgrades and Expansion of Healthcare Facilities Backed
by Government Policy

June
2015

Dec.
2015

June
2016

Dec.
2016

June
2017

Dec.
2017

1.0%

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

0.5%

0.0%

44

V Appendix

Revision to Nursing Care Fee and Medical Fee
Overview of Nursing Care Fee Revision in Fiscal 2018

Overview of Medical Fee Revision in Fiscal 2018

 Revision rate: +0.54%

 Revision rate: +0.55% (core) Promote regional comprehensive care system
 Realize high-quality nursing care services that contribute tosupporting unassisted living and preventing of increase in severity
 Secure various human resources and improve productivity
 Secure stability and sustainability of the system through making
nursing care services more appropriate and focused

Main points upon revision Promote differentiation/cooperation of medical functions from acutestage to recovery stage, chronic stage and in-home medical care
 Promote provision of efficient medical/nursing care services, including
utilization of ICT, that leads to reduction of on-site workload

Changes Made in Recent Revisions (%)

Changes Made by Recent Revisions
Revision period

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

Revision
rate

Medical fees (core)

Drug prices, etc.

 Securement of personnel by nursing care business operators andFiscal 2009

improvement of working conditions

 Cooperation with medical services and enhanced care for people withdementia Provision of efficient services and securement of new services

3.0％

 Improvement of in-home services and more focused efforts on facilities
 Improvement and increased focus of efforts on services to support

Fiscal 2012independent living
 Cooperation between medical services and nursing care services, anddivision of functions
 Securement of nursing personnel and evaluation of service quality

Fiscal 2014
 Response to consumption tax hike (8%)(extraordinary)Fiscal 2015

Fiscal 2017
 Improvement of working conditions for nursing personnel(extraordinary)Fiscal 2018

Please refer to the above.

Dental fee

Dispensing
feeDrug prices,
Material cost
etc.

2010

+1.55

+1.74

+2.09

+0.52

-1.23

-0.13

2012

+1.38

+1.55

+1.70

+0.46

-1.26

-0.12

2014

+0.73

+0.82

+0.99

+0.22

-0.58

-0.05

2016

+0.49

+0.56

+0.61

+0.17

-1.22

-0.11

2018

+0.55

+0.63

+0.69

+0.19

-1.65

-0.09

1.2％

0.63％

 Further strengthening of response to people requiring moderate to severe

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

Medical fee-2.27％

1.14％
0.54％

45

V Appendix

Regional Comprehensive Care System
Regional Comprehensive Care System
 We will establish a regional comprehensive care system that provides residences, medical care, nursing care, preventative medicine and life support in an
integrated manner to offer an environment where the elderly can continue living in an area they are used to, even after they come to require nursing care, in around2025 when the baby-boomer generation will be 75 or older.
 Establishment of a regional comprehensive care system is necessary to support the lives in regions where elderly with dementia live as the number of elderly withdementia is expected to increase in the future.
 There is a large regional difference concerning the progress of aging. There are, for example, large cities with the overall population remaining flat but the
population of people aged 75 years old or older increasing rapidly and rural areas with the population of people aged 75 years old or older increasing slightly although
the overall population decreasing. It is necessary for municipalities and prefectural governments, which are the insurer, to create a regional comprehensive
care system based on autonomy and independence and in accordance with regional characteristics.

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

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

Hospital visit&
stay

Daily medical care
• Primary care doctor• Regional cooperative
hospital

Outpatient nursing care&admission

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

House
Serviced housing for the elderly, etc.

Patients
with dementia

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

To live a healthy life foreverLife support & nursing care prevention

 Facility and home service• Facilities covered by public aid
providing long-term care to theelderly• Long-term care health facility• Communal daily long-term
nursing care for a dementia
patient• Daily life long-term nursing carefor those admitted to a specified
facility, etc.

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

Golden age club, local government, volunteer, NPO, etc.
Source: Website of Ministry of Health, Labour and Welfare46

V Appendix

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

(Hospital Ward A)
Advanced acute

Medical institutions

stage function

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

Current Functions of Hospital Beds
(as of July 2015)

Number of Beds to be Required in
2025

Total 1.331 million beds

Total 1.191 million beds (Note 2)
Advanced acute stage
131,000 beds
(11％)

Advanced acute stage
169,000 beds
(14％)

(Hospital Ward B)
Select medical
function
voluntarily

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

Decrease by approx. 30%

Acute stage
593,000 beds
(48％)

Increase by approx. 3 times

Recovery stage
375,000 beds
(31％)

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

Prefectural
government

Acute stage
401,000 beds
(34％)

Report current status
and future directionof medical functions

Chronic stage
354,000 beds
(28％)

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

Unused, etc.
87,000 beds

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

Chronic stage
284,000 beds
(24％)

Nursing care facilities,
in-home medical care,etc.
Approx. 300,000 people(Note 2): Total of Cabinet Secretariat’s estimates (June 2015). Within the range of 1.148 million beds
to 1.191 million beds.
(Note 1): The upper chart is prepared by the Asset Management Company based on the “Community Healthcare
Initiative” of the Ministry of Health, Labour and Welfare.

(Source): Prepared by the Asset Management Company based on “Initiatives for Medical/Nursing Care
Reform” (June 22, 2017) by the Ministry of Health, Labour and Welfare47

V Appendix

HCM’s Investment Philosophy and Three Features
Investment Philosophy

Serve as a conduit between the nursing care and medical service industries and the capital markets
Develop a portfolio specialized in healthcare facilities,
for which demand is expected to growPromote the supply of healthcare facilities
as social infrastructure

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

1

Investment in healthcare facilities, the demand of which is expected to grow••2

Upgrades and expansion of healthcare facilities backed by government policy

Strong support from sponsors••
3

Increase in demand due to further advancement of aging society

Utilization of advanced expertise in “nursing care and medical service,” “fund management” and “finance” held by SHIP HEALTHCARE, NEC Capital and SMBC
Securement of property acquisition opportunities by utilizing extensive networks

Stable cash flow in the long term••

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

48

V Appendix

HCM’s Network
HCM’s network is as shown below.
Asset Custody Company
Administrative Agent
Administrator of theUnitholders’ Registry

HCM

Sumitomo Mitsui Trust Bank
Healthcare & Medical
Investment Corporation

Accounting Auditor

General meeting of unitholders

PricewaterhouseCoopers Aarata LLC

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

Sponsor Support Companies

Support Companies

Asset Management
Agreement

Asset Management Company
Sumitomo Mitsui Finance andLeasing
Yoei

Sponsor Support
Agreement

Pipeline Support
Agreement

GinsenKobe Tochi Tatemono
Muromachi Building

Healthcare
Asset Management Co., Ltd.

49

V Appendix

Information Related to Investment Units (As of the end of 8th fiscal period)
List of Top Unitholders

Status of Unitholders
Ratio of Number of Investment Unitsby Unitholder Type
Foreign investors
6.6%
Other companies
7.1%
Securities
companies
3.1%

Ratio of Number of Unitholders
by Unitholder Type
Securities companies
0.2%
Financial institutions
0.3%

Other companies
1.5%
Foreign investors
0.7%

Individuals, etc.
35.2%
Total

Total

193,107
units

12,189peopleFinancial institutions
48.0%

12.6

37.9

44.5

1st
FP
第1期
Individuals, etc.

2.1
1.0
12.7

34.4

1.3
3.2

12.2

34.8

1.3
3.8

1.2
5.2
8.5

12.0

35.5

36.6

49.9

48.5

47.4

48.5

2nd
FP
第2期

3rd
FP
第3期

4th
FP
第4期

5th
FP
第5期

Financial institutions

Other companies(Note 1): Ratios in the graphs are rounded to the first decimal place.

1.1
4.6
7.6

46.6

1.1
5.3
7.2

50.1

30,881

16.0%

2

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

29,935

15.5%

3

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

8,656

4.5%

4

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

5,570

2.9%

NEC Capital Solutions Limited

4,000

2.1%

SHIP HEALTHCARE HOLDINGS INC.

4,000

2.1%

Sumitomo Mitsui Banking Corporation

4,000

2.1%

8

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

3,171

1.6%

9

BNYM AS AGT/CLTS 10 PERCENT

2,463

1.3%

10

Osaka Shinkin Bank

1,895

1.0%

94,571

49.0%

36.3

35.2

6th FP
第6期

7th FP
第7期

8th
FP
第8期

Foreign investors

5

3.1

40.1

Securities companies

Ownership
ratio
(%)

Japan Trustee Services Bank Ltd.
(Trust Account)

6.6
7.1

48.0

Number ofinvestment
units owned(units)Name

1

Individuals, etc.
97.3%

Change in Ratio of Number of Investment Units by Unitholder Type
2.1
2.8

Ranking

Total

50

V Appendix

Overview of Unitholder Special Benefit Plan
Company Name

Details of Special Benefits

Sompo Care Inc.



Discount advance payment or monthly fee
Discount monthly fee (rent, management fees, etc.)

JAPAN LIFE DESIGN Inc.

Free trial move-in (two-days and one-night with meals)
Discount initial fees

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

Free trial move-in (two-days and one-night with meals)
Tour with free lunchFree consultation on nursing care

Sawayaka Club Co., Ltd.



Discount monthly fee for initial monthFree trial move-in (two-days and one-night with meals)
Tour with free lunch

AS PARTNERS Co., Ltd.






Discount initial fees
Discount monthly fee
Free trial move-in (four-days and three-nights)
Tour with free lunch

Proud Life Inc.



Discount deposit or initial fees

Benesse Senior Support Co., Ltd.

(ベネッセの介護相談室)

51(Note 1): Details of special benefits are for people who are unitholders as of the end of 8th fiscal period and are subject to change.

V Appendix

Profile of Asset Management Company
Organizational Structure

Profile of the Company
Trade name

Healthcare Asset Management Co., Ltd.

Location

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

FoundedNovember 28, 2013

Capital stock

150 million yen

President andRepresentative

Seiji Yoshioka

Shareholders

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

SHIP HEALTHCARE HOLDINGS, INC.

33.3%

NEC Capital Solutions Limited

33.3%

Sumitomo Mitsui Banking Corporation

5.0%

Sumitomo Mitsui Finance and Leasing Company, Limited

4.8%

SMBC Nikko Securities Inc.

4.8%

Yoei

4.6%

Ginsen

4.6%

Kobe Tochi Tatemono

4.6%

Muromachi Building

4.6%

Compliance Committee
Representative Director

Internal Audit Office

Investment
Department

Compliance Office

Asset Management
Department

Financial & Administration
Department

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

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

52

V Appendix

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

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

Representative

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

FoundedAugust 1992

Capital stock

15,553.01 million yen

Sales425.5 billion yen on a consolidated basis

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

NEC Capital Solutions Limited
Headquarters
location

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

Representative President: Tomoo Imazeki
FoundedNovember 1978

Capital stock

3,776.88 million yen

Sales

231.4 billion yen on a consolidated basis

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

Sumitomo Mitsui Banking Corporation
Headquarters
location

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

Representative President and CEO: Makoto Takashima
Capital stock

1,770.9 billion yen

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

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

memo

54

Disclaimer
This presentation material contains forward-looking statements including forecasts, outlooks, goals
and plans. These statements are based on the information available as of the date when this material
is prepared (March 15, 2019) and incorporate certain subjective assumptions about uncertain factorsthat may affect future results. Accordingly, these statements are inherently not guarantees of future
performance and actual results may differ materially.
The opinions, outlooks and estimates contained in this material reflect our view and judgment basedon information as of the date when this material is prepared and involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness and validity of information
contained in this material. It is not promised that information contained in this material will always be
updated.
Contents of this material are subject to change without notice.
This material is not intended as a solicitation for investment. Any investment decision must be madebased on your own judgment and responsibility.

55