Healthcare & Medical Investment Corporation
Independent Auditor’s Report
January 31, 2023

Independent Auditor’s Report
To the Board of Directors of Healthcare & Medical Investment Corporation
OpinionWe have audited the financial statements of Healthcare & Medical Investment Corporation (theCompany), which comprise the balance sheet as at January 31, 2023, and the statement of income,statement of unitholders' equity, statement of cash distributions and statement of cash flows for the six
months period then ended, and notes to financial statements and supplementary schedules.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at January 31, 2023, and its financial performance and its cash
flows for the six months period then ended in accordance with accounting principles generally acceptedin Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
Other Information
The other information comprises the information included in the semi-annual report, but does notinclude the financial statements and our auditor’s report thereon. Management is responsible for theother information. In addition, those charged with governance are responsible for overseeing
the Company’s reporting process of the other information.
Our opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this otherinformation, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements inaccordance with accounting principles generally accepted in Japan, and for such internal control as
PricewaterhouseCoopers Aarata LLC
Otemachi Park Building, 1-1-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan
T: +81 (3) 6212 6800, F: +81 (3) 6212 6801, www.pwc.com/jp/assurancemanagement determines is necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability tocontinue as a going concern and disclosing, as applicable, matters related to going concern.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole arefree from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that anaudit conducted in accordance with auditing standards generally accepted in Japan will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
 Obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, while the purpose of the financial statement audit is not
to express an opinion on the effectiveness of the Company’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’sreport to the related disclosures in the financial statements or, if such disclosures are inadequate, tomodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Company to cease to continue
as a going concern.
 Evaluate whether the presentation and disclosures of the financial statements are in accordance withaccounting principles generally accepted in Japan, the overall presentation, structure and content of
the financial statements, including the disclosures, and whether the financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
We communicate with management regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

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We also provide management with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
Interest required to be disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

自動署名EL

自動署名Co1

Hideo Ohta

Takashi Sato

Designated Engagement Partner
Certified Public Accountant

Designated Engagement Partner
Certified Public Accountant

April 26, 2023

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16th Fiscal Period
Semi-Annual Reportfrom August 1, 2022 to January 31, 2023

Healthcare & Medical Investment Corporation

To Our Unitholders
We would like to express our sincere gratitude for your continued support.
We are pleased to report on the management status of Healthcare & Medical Investment Corporation (hereinafter,“HCM”) for the 16th fiscal period (August 1, 2022, to January, 2023).
For the fiscal period under review, HCM recorded operating revenue of 2,632 million yen, operating income of 1,453
million yen, ordinary income of 1,279 million yen, and net income of 1,278 million yen. As a result, distributions perunit was 3,557 yen, surpassing the forecast announced on September 21, 2022. In the current fiscal period, HCM
decided not to make distributions in excess of earnings, taking into consideration the level of profit distribution inassociation with the gain on sale of real estate properties. For the 17th fiscal period, distributions per unit of 3,265
yen (including distributions in excess of earnings) is forecast.
Ever since its listing, HCM has aimed to realize a society where all people can live vibrantly and with peace of mind
through its continuous investment in and stable ownership of facilities and housing for the elderly and healthcare,facilities such as medical service-related facilities, which are expected to see further growth in demand in line withthe continued aging of society, over the long term.
Although the spread of COVID-19 has not ended in Japan and the situation still calls for caution, the impact on HCM’s
performance at this point in time is minimal.
In the next fiscal period onward, we will continue to work to maximize unitholder value through continuous growthof our portfolio and securement of stable income based on fixed-rent long-term lease contracts with excellent
operators and by proactively leveraging the specialized capabilities and know-how in the areas of “nursing care andmedical service,” “fund management,” and “finance” possessed by our main sponsors, SHIP HEALTHCARE HOLDINGS,
INC., NEC Capital Solutions Limited, and Sumitomo Mitsui Banking Corporation. We appreciate your continued
support and patronage.

Yuji Fujise
Executive Director
Healthcare & Medical Investment Corporation-1-

Overview of Asset Management
1. Investment Performance of HCM
Operation Results and Financial Positions
By fiscal period
Operating revenue(millions of yen)
[Operating revenue from real
(millions of yen)estate leasing business]
Operating expenses(millions of yen)
[Operating expenses from real
(millions of yen)estate leasing business]
Operating income(millions of yen)
Ordinary income(millions of yen)
Net income(millions of yen)
Total assets(millions of yen)[Comparison with the previous(%)
fiscal period]
Net assets(millions of yen)[Comparison with the previous(%)
fiscal period]
Interest-bearing debts(millions of yen)
Unitholders' capital, net (Note 3)(millions of yen)
Total number of investment units(units)issued and outstanding
Net asset value per unit (NAV)(yen)
Total distributions(millions of yen)
Distributions per unit(yen)[Distributions of earnings per unit](yen)[Allowance for temporary(yen)difference adjustments per unit][Distributions in excess of earnings(yen)
per unit from other distributions]
Ratio of ordinary income to total(%)
assets (Note 4)[Annualized](%)
Return on equity (Note 4)(%)[Annualized](%)
Equity ratio at end of period (Note 4)(%)[Changes from the previous fiscal
period]Dividend payout ratio (Note 4)(%)
Other Reference Information
Number of operation days
(days)
Number of investment properties at(properties)
end of period
Depreciation(millions of yen)
Capital expenditures (Note 5)(millions of yen)
NOI (Net operating income) (Note 4)(millions of yen)
FFO (Funds from operation) (Note 4)(millions of yen)
FFO per unit (Note 4)(yen)
LTV (Loan to value) (Note 4)(%)

12th fiscal
period13th fiscal
period14th fiscal
period15th fiscal
period16th fiscal
periodFrom: Aug. 1 2020
To: Jan. 31 2021

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

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

From: Feb. 1 2022
To: Jul. 31 2022

From: Aug. 1 2022
To: Jan. 31 2023

2,058

2,073

2,080

2,371

2,632

2,058

2,073

2,080

2,371

2,427

990

994

1,007

1,105

1,178

678

690

701

784

801

1,067
910
910
68,773

1,078
922
921
68,883

1,072
913
913
68,778

1,265
1,101
1,100
80,357

1,453
1,279
1,278
81,243

(0.1)

0.2

(0.2)

16.8

1.1

33,00032,96432,86738,80038,968

(0.3)

(0.1)

(0.3)

18.1

0.4

33,15032,15233,15032,05833,15031,96438,65037,711

39,15037,601

311,001

311,001

311,001

359,500

359,500

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

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

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

107,930
1,210
3,367
3,059

108,395
1,278
3,557
3,557

46

-

-

1

-

300

304

308

307

-

1.3

1.3

1.3

1.5

1.6

2.6
2.8
5.5
48.0

2.7
2.8
5.6
47.9

2.6
2.8
5.5
47.8

3.0
3.1
6.2
48.3

3.1
3.3
6.5
48.0

(0.1)

(0.1)

(0.1)

0.5

(0.3)

98.4

100.0

100.0

100.0

100.0

184

181

184

181

184

36

37

37

47

48

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

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

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

552
111
2,138
1,652
4,596
48.1

563
152
2,189
1,637
4,555
48.2

(Note 1) HCM’s operating period is six months per fiscal period, from February 1 to July 31 and from August 1 to January 31 of the following year.
(Note 2) Unless otherwise stated, all amounts are rounded down to the nearest unit, and all percentages are rounded to the first decimal place.
(Note 3) The figure indicates the amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital. The amount does not take into accountthe change in unitholders’ capital in line with the implementation of distributions in excess of earnings of allowance for temporary difference adjustments.
(Note 4) The following formulas are used in calculation of their respective target values.
Ratio of ordinary income to total assets Ordinary income / [(Total assets at beginning of period + Total assets at end of period) / 2] × 100
Return on equity
Net income / [(Net assets at beginning of period + Net assets at end of period) / 2] × 100
Equity ratio at end of period
Net assets at end of period / Total assets at end of period × 100
Dividend payout ratio = Distributions per unit (not including distributions in excess of earnings) / Net income per unit ×100
Dividend payout ratio
Payout ratio for 15th fiscal period is calculated using the following formula since issuance of new investment units was
executed.
Dividend payout ratio = Total distributions (not including distributions in excess of earnings) / Net income × 100
Real estate leasing business revenue - Real estate leasing business expenses + Depreciation for investment and leasing
NOI (Net operating income)properties
FFO (Funds from operation)
Net income + Depreciation – Gain or loss on sales of real estate
FFO per unit
FFO / Total number of investment units issued and outstanding
LTV (Loan to value)Interest-bearing debts / Total assets at end of period × 100(Note 5) Capital expenditures for investment and leasing properties are shown.

-2-2. State of Asset Management in the Period(1) Brief History of HCM
HCM was established under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as
amended; hereinafter, the “Investment Trust Act”) with Healthcare Asset Management Co., Ltd. (hereinafter, the “AssetManagement Company” or “HAM”) as the organizer on December 9, 2014. HCM was listed on the Real Estate
Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, the “Tokyo Stock Exchange”) on March
19, 2015 (securities code: 3455).
The total number of investment units issued and outstanding as of the end of the fiscal period ended January 2023
(August 1, 2022 to January 31, 2023) (hereinafter, the “16th fiscal period” or the “current fiscal period”) stands at
359,500 units.

(2) Investment Environment and Performancea. Investment Environment
HCM was established against the background of a social situation in which expansion and enhancement of nursing careservices and medical services by healthcare facilities has become an urgent issue, at a time when the population thatbears nursing care continues to shrink while aging advances at the fastest rate among developed nations and thenumber and percentage of the elderly among the total population is expected to remain on the rise for the time being.
The government has also set a target in “Housing Life Basic Plan (nationwide plan)” to increase the ratio of housing
supply for the elderly from 2.5% in 2018 to 4% in 2030.
HCM invests in and owns healthcare facilities, for which social demand is growing, in a stable manner to promote
appropriate maintenance/management and new supply of such facilities. By doing so, HCM seeks to realize a society
where all people can live vibrantly and with peace of mind, as well as to secure stable income and to achieve steady
growth of its portfolio.
b. Performance
During the current fiscal period, HCM sold " Medical Rehabilitation Home Bonsejour Komaki " on September 27, 2022
for a disposition price of 1,450 million yen, acquired "Nichii Home Inage" on September 30, 2022 for an acquisition
price of 1,508 million yen, and acquired " Hanakotoba Oppama " on November 10, 2022 for an acquisition price of 500
million yen.
As of the end of the current fiscal period, HCM owns 48 properties with a total leasable area of 217,545.72 m2, andthe operational rate stands at 100%.
With regards to the Japanese economy, although the restrictions on activities related to COVID-19 have been lifted,
and moves toward the normalization of economic and social activities are expected, the effects of the ongoing monetary
tightening policies of major countries, including European nations and the United States, the resulting depreciation of
the yen, and the prolonged global surge in energy and raw material prices against the backdrop of the deteriorating
situation in Ukraine are becoming apparent and require close attention in the future.
In addition, in December 2021, HAM established the "Sustainability Promotion System Regulations" and the ESG
Committee in order to implement the "Basic Policy on ESG" in September 2018. As a result of its sustainability
promotion activities, HCM received a "1 Star" rating in the GRESB Real Estate Assessment 2022 Survey, an international
benchmark assessment that measures ESG considerations, and an "A Level" in the GRESB Disclosure Assessment, thehighest level of the five-level rating system. In order to realize the philosophy of HCM, "A society where all people canlive vibrantly and with peace of mind," HAM aims to contribute to the aged society and maximize unitholder value overthe medium to long term by promoting the supply of healthcare facilities as social infrastructure and building a portfolio
specializing in healthcare facilities.

-3-(3) Overview of Financing
HCM upholds stable financial management as its basic policy for securing stable income and maintaining and enhancing
asset value over the medium to long term.
In the current fiscal period, HCM borrowed 500 million yen on September 30, 2022 to fund the acquisition of "Nichii
Home Inage" and part of the acquisition-related expenses, and refinanced 9,750 million yen in loans that were due forrepayment on January 31, 2023.
As a result, unitholders’ capital (net) (Note) at the end of the current fiscal period stands at 37,601 million yen, thetotal number of investment units issued and outstanding at 359,500 units, and total interest-bearing liabilities at 39,150
million yen.
(Note)

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

As of the end of the current fiscal period, the ratio of LTV” is 48.2%.
HCM’s rating as of January 31, 2023 is as follows.
Rating Agency

Rating Category

RatingOutlookJapan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating

A+

Stable(4) Overview of Business Performance and Distributions
As a result of the management described above, for the current fiscal period, operating revenue stood at 2,632 million
yen, operating income at 1,453 million yen, ordinary income at 1,279 million yen and net income at 1,278 million yen.
In accordance with the cash distributions policy described in Article 36, Paragraph 1 of its Articles of Incorporation,
HCM determines that the amount of distributions shall exceed the amount equivalent to 90% of its distributable profit
as stipulated in Article 67-15 of the Act on Special Measures Concerning Taxation, and shall be up to its profits as definedin Article 136, Paragraph 1 of the Investment Trust Act. Following this policy, HCM has decided that, of the amount of
unappropriated retained earnings for the fiscal period less the reversal amount of the allowance for temporary
differences (as defined in Article 2, Paragraph 2, Item (30) of the Regulation on Accountings of Investment
Corporations ), it shall distribute approximately the entire amount of 1,278,741,500 yen as distribution of earnings.
Accordingly, the distributions of earnings per unit were 3,557 yen.
Furthermore, in accordance with the policy for cash distributions in excess of earnings provided in Article 36,
Paragraph 2 of its Articles of Incorporation, HCM is to its distributions in excess of earnings (return of capital that falls
under the category of distributions reducing unitholders’ capital for tax purposes) in each period on a continuous basis,
as a rule.
However, as mentioned above, as a result of the disposition of "Medical Rehabilitation Home Bon Sejour Komaki", again on sale of the real estate properties was generated, and in consideration of profit reflecting such gain on sale, HCM
decided not to make continuous distributions in excess of earnings during the current period.
As a result, distributions per unit came to 3,557 yen.
(Note 1) Distributions in excess of earnings are distributed up to the amount equivalent to 20% of the depreciation recorded in the accounting period immediately
before the accounting period when HCM will pay said distributions, sufficiently taking into consideration the amount of capital expenditures necessary for
maintaining and improving the competitiveness of HCM’s assets under management, the financial position of HCM and other factors.
However, distributions in excess of earnings may be conducted up to an amount lower than the above amount or may not be conducted when theimplementation of distributions in excess of earnings up to the said amount is judged to be inappropriate based on the economic environment surrounding
HCM, trends of the real estate market and leasing market, status of HCM’s assets under management and financial conditions.
(Note 2) Under the rules of The Investment Trusts Association, Japan (hereinafter, “The Investment Trusts Association”), closed-end investment corporations are allowed
to conduct their distributions in excess of earnings up to an amount equivalent to 60% of the depreciation recorded on the last day of the accounting period.

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

February 1, 2019
February 27, 2019

April 19, 2019

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

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

Unitholders’ capital(millions of yen)

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

Increase(Decrease)

Balance

Increase(Decrease)

Remarks

Balance112,280

305,387

12,07631,876

12,07631,876(Note 2)5,614

311,001603

32,480603

32,480(Note 3)-311,001-

32,480(62)

32,417(Note 4)-4-

October 18, 2019

April 21, 2020

October 21, 2020

April 21, 2021

October 21, 2021

February 1, 2022
March 1, 2022

April 21, 2022

October 21, 2022

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

311,001-

32,480(87)

32,330(Note 5)-

311,001-

32,480(88)

32,242(Note 6)-

311,001-

32,480(89)

32,152(Note 7)-

311,001-

32,480(93)

32,058(Note 8)-311,001-

32,480(94)

31,964(Note 9)46,190357,191

5,564

38,045

5,564

37,529(Note 10)2,309

359,500

278

38,323278

37,807(Note 11)-359,500-

38,323(95)

37,711(Note 12)-359,500-

38,323(110)

37,601(Note 13)

(Note 1) The figure indicates the amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital. The amount does not take into
account the change in unitholders’ capital in line with the implementation of distributions in excess of earnings of allowance for temporary difference
adjustments.
(Note 2) New investment units were issued through public offering with issue price of 111,442 yen (paid-in amount of 107,555 yen) per unit.
(Note 3) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 107,555 yen per unit.
(Note 4) HCM resolved at the board of directors’ meeting held on March 15, 2019, to set cash distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) at 326 yen per unit as cash distributions for the 8th fiscal period (fiscal period ended
January 2019), and started the payout on April 19, 2019.
(Note 5) HCM resolved at the board of directors’ meeting held on September 13, 2019, to set cash distributions in excess of earnings (return of capital that falls under
the category of distributions reducing unitholders’ capital for tax purposes) at 280 yen per unit as cash distributions for the 9th fiscal period (fiscal period ended
July 2019), and started the payout on October 18, 2019.
(Note 6) HCM resolved at the board of directors’ meeting held on March 17, 2020, to set cash distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) at 285 yen per unit as cash distributions for the 10th fiscal period (fiscal period ended
January 2020), and started the payout on April 21, 2020.
(Note 7) HCM resolved at the board of directors’ meeting held on September 15, 2020, to set cash distributions in excess of earnings (return of capital that falls under
the category of distributions reducing unitholders’ capital for tax purposes) at 289 yen per unit as cash distributions for the 11th fiscal period (fiscal period
ended July 2020), and started the payout on October 21, 2020.
(Note 8) HCM resolved at the board of directors’ meeting held on March 16, 2021, to set cash distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) at 300 yen per unit as cash distributions for the 12th fiscal period (fiscal period ended
January 2021), and started the payout on April 21, 2021.
(Note 9) HCM resolved at the board of directors’ meeting held on September 14, 2021, to set cash distributions in excess of earnings (return of capital that falls under
the category of distributions reducing unitholders’ capital for tax purposes) at 304 yen per unit as cash distributions for the 13th fiscal period (fiscal period
ended July 2021), and started the payout on October 21, 2021.
(Note 10) New investment units were issued through public offering with issue price of 124,764 yen (paid-in amount of 120,477 yen) per unit.
(Note 11) New investment units were issued through third-party allotment in line with public offering, with paid-in amount of 120,477 yen per unit.
(Note 12) HCM resolved at the board of directors’ meeting held on March 18, 2022, to set cash distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) at 308 yen per unit as cash distributions for the 14th fiscal period (fiscal period ended
January 2022), and started the payout on April 21, 2022.
(Note 13) HCM resolved at the board of directors’ meeting held on September 14, 2022, to set cash distributions in excess of earnings (return of capital that falls under
the category of distributions reducing unitholders’ capital for tax purposes) at 307 yen per unit as cash distributions for the 15th fiscal period (fiscal period
ended July 2022), and started the payout on October 21, 2022.

Investment units’ price performance
The investment units’ high and low closing prices on the TSE’s J-REIT Market are tabulated below by fiscal period.
12th fiscal period

13th fiscal period

14th fiscal period

15th fiscal period

16th fiscal period

From August 1, 2020
To January 31, 2021

From February 1, 2021
To July 31, 2021

From August 1, 2021
To January 31, 2022

From February 1, 2022
To July 31, 2022

From August 1, 2022
To January 31, 2023

High

135,800 yen

158,200 yen

162,600 yen

176,400 yen

204,500 yen

Low

113,400 yen

130,600 yen

131,000 yen

134,700 yen

162,000 yen

Fiscal period-5-4. Distributions
In accordance with the cash distributions policy described in Article 36, Paragraph 1 of its Articles of Incorporation, HCM
determines that the amount of distributions shall exceed the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Act on Special Measures Concerning Taxation, and shall be up to its profits as defined in
Article 136, Paragraph 1 of the Investment Trust Act. Following this policy, HCM has decided that, of the amount of
unappropriated retained earnings for the fiscal period less the reversal amount of the allowance for temporary
differences (as defined in Article 2, Paragraph 2, Item (30) of the Regulation on Accountings of Investment Corporations ),it shall distribute approximately the entire amount of 1,278,741,500 yen as the distribution of earnings. Accordingly, thedistributions of earnings per unit were 3,557 yen.
Furthermore, in accordance with the policy for cash its distributions in excess of earnings provided in Article 36,
Paragraph 2 of its Articles of Incorporation, HCM is to conduct distributions in excess of earnings (return of capital that
falls under the category of distributions reducing unitholders’ capital for tax purposes) in each period on a continuous
basis, as a rule.
However, in the fiscal period under review, a gain on sale of the real estate properties was generated, and inconsideration of profit reflecting such gain on sale, HCM decided not to make continuous distributions in excess ofearnings during the current period.
As a result, distributions per unit came to 3,557 yen.
Fiscal period
Total unappropriated retained
earnings(thousands ofyen)(thousands of
Retained earnings carried forward
yen)(thousands ofTotal distributions
yen)
(yen)
[Distributions per unit](thousands ofTotal distributions of earnings
yen)
(yen)
[Distributions of earnings per unit](thousands ofDistributions in excess of earnings
yen)[Distributions in excess of earnings(yen)
per unit]
Distributions in excess of earnings(thousands of
from
yen)
allowance for temporary difference
adjustments[Distributions in excess of earnings
from
(yen)
allowance for temporary difference
adjustments per unit]
Distributions in excess of earnings(thousands offrom distributions under tax law
yen)
resulting in a redemption ofunitholders’ capital[Distributions in excess of earnings
from distributions under tax law(yen)
resulting in a redemption ofunitholders’ capital per unit]

12th fiscal
period13th fiscal
period14th fiscal
period15th fiscal
period16th fiscal
periodFrom Aug. 1, 2020
To Jan. 31, 2021

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

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

From Feb. 1, 2022
To Jul. 31, 2022

From Aug. 1, 2022
To Jan. 31, 2023

957,584

983,103

929,041

1,111,161

1,289,825

61,901

15,971

11,027

11,451138

1,003,289

1,015,729

1,008,887

1,210,436

1,278,741[3,226][3,266][3,244][3,367][3,557]

895,682

921,184

913,098

1,099,710

1,278,741[2,880][2,962][2,936][3,059][3,557]

107,606

94,544

95,788110,726

-

[346]

[304]

[308]

[308]

[-]

14,306

-

-

359

-

[46]

[-]

[-]

[1]

[-]

93,30094,544

95,788110,366

-

[300]

[304]

[308]

[307]

[-]

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

-6-5. Future Management Policy(1) Investment Environment
In Japan, while the number of elderly households is increasing, the population that bears nursing care is on the decline,
and a provision of nursing care services and medical services at external facilities for a certain percentage of elderly
households will inevitably be needed. The expansion of the supply of healthcare facilities, especially facilities andhousing for the elderly, is required in response to the expanding demand for nursing care and medical services.
While nursing care in the same household is forecast to be more difficult than ever before due to extreme aging andchange to the family structure, new development and expansion of healthcare facilities is required to respond to thegrowing demand for nursing care and medical services, and measures to achieve them are being promoted.
In “Japan Revitalization Strategy -JAPAN is BACK-“ dated June 14, 2013, the Headquarters for Japan's Economic
Revitalization announced a policy to “enact a guideline concerning acquisition and management of properties including
housing for the elderly to promote the utilization of healthcare REITs in an effort to utilize private funds” as part of urban
development to enable the elderly to walk and live safely.
Following this policy, the Ministry of Land, Infrastructure, Transport and Tourism enacted the “Guideline Related to
the Utilization of Healthcare REITs Targeting Housing for the Elderly” on June 27, 2014, and the “Guideline Related to
REITs Targeting Hospital Real Estate” on June 26, 2015, as well as indicated the points to be noted in transactions ofhealthcare facilities, such as the positioning of key executives with certain experience. With the enactment of theseguidelines, it is believed that opportunities for operators to utilize healthcare REITs will increase.
In addition, the “Housing Life Basic Plan (nationwide plan)” decided by the cabinet on March 19, 2021, set a
performance indicator, which calls for increasing the ratio of housing for the elderly to the elderly population from 2.5%
in 2018 to 4% in 2030, based on the goal of “formation of communities and building of cities where various generations
support each other and the elderly can live with good health and peace of mind.”
Regarding the environment surrounding healthcare-related facilities, social welfare costs are expected to increase
alongside Japan’s aging population, and demand for medical and long-term care services is expected to increase aheadof 2025, when the baby boomer generation will be 75 years old or older. Meanwhile, there are significant regionalvariances in the growth of the elderly population. To address these issues, studies and actions are underway to establish
a regional comprehensive care system through a review of the medical care system and to realize a regional healthcare
vision (Note 1).
In Japan, under a regional comprehensive care system, work is underway to build an integrated framework ofresidences, medical care, nursing care, preventative medicine and lifestyle support suitable for each region so that theelderly can continue to live in the area they are used to in the way they would like, even after they come to requirenursing care.
The government has further divided the functions of beds in medical institutions in line with the conditions ofpatients, aiming to provide appropriate medical service to all patients at an appropriate location in order to effectively
utilize limited medical resources, and enacted systemic reforms in healthcare systems, such as establishing guidelines(March 2015) for planning a community healthcare vision in prefectures. Prefectures have formulated the community
healthcare vision for the purpose of realizing a system encouraging the effective and efficient allocation of resources
commensurate with the healthcare functions in each of the national government-designated regions, and providing ahigher quality of healthcare services in beds appropriate for the condition of patients, from acute to convalescent andchronic phases, for each disease. The community healthcare vision is designed to estimate and stipulate medical
demand (number of patients) and required number of beds in 2025 for each medical function in each area of the vision(secondary medical area) in order to promote functional differentiation and coordination of hospital wards. Presently,
prefectural governments and healthcare professionals are working together via regional healthcare vision councils andother channels to realize this vision.
Furthermore, the number of hospitals across Japan is estimated to be about 8,200. However, some of these werebuilt in the 1960s and 1970s and do not meet earthquake-resistance standards amid Japan’s earthquake-prone
environment. The earthquake resistance rate of hospitals in Japan is only 78.7% as of an FY2021 survey, compared tomore than 95% for paid nursing homes (Note 2) (Note 3). Hospitals are used by an unspecified large number of people
every day and can also be used as a community base in case of a disaster. Earthquake resistance is an urgent issue evenfrom the viewpoint of strengthening the country's infrastructure. Therefore, HCM believes that there is a great needamong hospitals for funding to rebuild or expand their buildings to make them more earthquake resistant.
In addition to the above, medical corporations are also expected to face needs for capital investment, M&A-driven
funding procurement and asset sales for the enhancement or conversion of medical functions, including multi-use
development (Note 4) and reconstruction and expansion of buildings due to earthquake resistance. Furthermore, HCM
believes, in the instance of realizing held assets for the purpose of strengthening financial position, liquidation of(generating funds from) held assets for a hospital owner’s business succession or inheritance, or sale of hospital realestate for refinancing, that real estate investment corporations will have opportunities related to these assets.
The market size of hospital real estate in Japan accounts for a majority of the total healthcare facility real estatemarket, and the majority of hospital real estate is owned by medical corporations (Note 5). HCM believes that whenhospital real estate is liquidated, it may become a target for investment by real estate investment corporations.
As described above, HCM believes that, amid the funding needs of medical corporations, and as a method for
procuring funds related to hospital management and part of strengthening financial positions, opportunities forleveraging real estate investment corporations in hospital real estate will expand further.
Therefore, the market for healthcare facilities with a particular emphasis on the keywords “nursing care,” “medical
service” and “health,” which HCM sets as acquisition targets, is believed to further expand in the future.
In addition, although the restrictions on activities related to COVID-19 have been lifted, and moves toward thenormalization of economic and social activities are expected, the effects of the ongoing monetary tightening policies ofmajor countries, including European nations and the United States, the resulting depreciation of the yen, and the-7-prolonged global surge in energy and raw material prices against the backdrop of the deteriorating situation in Ukraine
are becoming apparent and require close attention in the future.
(Note 1) In the section about the reorganization of medical and nursing care functions (future vision) of “Promotion of Home Medical and Nursing Care" by the project
team for promoting home medical and nursing care as published by the Ministry of Health, Labour and Welfare, it is stated that "a more effective and efficient
medical and nursing care service provision system will be built through a role division for hospital and hospital bed functions according to patient needs andby strengthening cooperation among medical institutions and between medical and nursing care services.”(Note 2) According to the Ministry of Health, Labour and Welfare's "Status of Earthquake Resistance of Social Welfare Facilities" (released on December 27, 2021), theratio of earthquake-resistant paid nursing homes is 96.9%.
(Note 3) According to the "Results of the Survey on Seismic Retrofit of Hospitals" (released on August 26, 2022) by the Ministry of Health, Labour and Welfare, the ratioof earthquake-resistant hospitals is 78.7%, of which the ratio was 94.6% for disaster base hospitals and emergency medical care centers. Note that in thesesurveys, hospitals with buildings constructed before 1981 (before the enforcement of the revised Building Standards Act of 1980) that have not been assessed
as resistant to earthquakes are included in calculations as buildings with unknown earthquake resistance.
(Note 4) “Multi-use development” refers to the development of real estate with multiple functions and uses, such as healthcare facilities that combine facilities for theelderly, residences, and medical facilities.
(Note 5) Figures are based on preliminary calculations by KPMG Healthcare Japan Co., Ltd.

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

-8-

6. Significant Subsequent Events
Not applicable.
(Reference Information)

HCM decided on March 17, 2023 to borrow the following funds to fund the repayment of 2,000 million yen in existingloans maturing on March 30, 2023.
Type

Short
term

LenderSumitomo
Mitsui Banking
Corporation

BorrowingamountInterest rate
(Note 2)

Drawdown
Borrowing method
date

Repayment
date

Repayment
methodBorrowings basedon the individual
term loan
agreement as ofMarch 28, 2023,
with the company
on the left as alenderMarch 30,2024

Lump-sum
Unsecured andrepayment
unguaranteedon maturity

Base interest rate
2
March 30,(JBA 1-month
billion yen Japanese yen TIBOR)
2023+ 0.25%

Remarks(Note 1) The borrowing is subject to a number of conditions, including the execution of an agreement relating to the loan that is reasonably satisfactory to the lenders
mentioned above and the satisfaction of all lending preconditions, which are to be separately determined.
(Note 2) The first interest payment date is April 28, 2023, and subsequent interest payments will be due on the 30th of every month thereafter, and on the principal repayment
date (whenever the date of interest payment is not a business day, such payment will be made on the next business day; whenever the date of interest payment falls
on day of the next month, such payment will be made on the last business day of the current month). For the Japanese yen TIBOR published by the JBA TIBOR
Administration, please refer to the JBA TIBOR Administration’s website(https://www.jbatibor.or.jp/english/rate/).

-9-Overview of HCM
1. Status of Capitalization
12th fiscal period 13th fiscal period 14th fiscal period 15th fiscal period 16th fiscal period

Fiscal period
Total number ofinvestment units
authorized
Total number ofinvestment units issued
and outstanding
Unitholders' capital, net(Note)
Number of unitholders(Note)(as of Jan. 31, 2021)(as of Jul. 31, 2021)(as of Jan. 31, 2022)(as of Jul. 31, 2022)(as of Jan. 31, 2023)(units)

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000(units)311,001

311,001

311,001

359,500

359,500

32,152

32,05831,96437,71137,601

15,56015,612

15,49015,30814,986(millionsof yen)(persons)

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

2. Matters Concerning Investment Units
Top 10 unitholders ranked by percentage of outstanding investment units owned at January 31, 2023, are listed below.
No. of investment
units held
(units)90,151

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

Percentage of outstanding
units owned (%)
25.08

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

59,637

16.59

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

14,857

4.13

NORTHERN TRUST CO. (AVFC) RE FIDELITY FUNDS

11,587

3.22

Morgan Stanley MUFG Securities Co., Ltd.

6,333

1.76

JP MORGAN CHASE BANK 385781

4,458

1.24

NEC Capital Solutions Limited

4,000

1.11

SHIP HEALTHCARE HOLDINGS, INC.

4,000

1.11

Sumitomo Mitsui Banking Corporation

4,000

1.11

SMBC Nikko Securities Inc.

3,382

0.94

202,405

56.30

Total

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

Key concurrent holding of positions

Yuji Fujise

Shimada Hamba & Osajima Lawyer

Sachihiko Fujimoto

Hayabusa Asuka Law Offices Counsel

Kaori Sato

Torikai Law Office Partner

Yasuo Shida

Blakemore & Mitsuki Partner (Note 5)

Total amount of compensation foreach position during period(thousands of yen)
2,100

(Note 1) (Note 2)

Supervisory
Director(Note 1) (Note 2)(Note 3)

Accounting PricewaterhouseCoopers Aarata
Auditor (Note 4) LLC

―

3,000

11,000(Note 1) The amount paid in the current period.
(Note 2) None of the executive director or supervisory directors own HCM’s investment units in their own name or in the name of another. In addition, supervisory directors
may be directors of other corporations other than those stated above, but none of them, including those above, have vested interest in the HCM or the AssetManagement Company.
(Note 3) Yasuo Shida retired from the supervisory director of HCM as of October 31, 2022, and Kaori Sato became a new supervisory director as of November 1, 2022.
(Note 4) For the “Accounting Auditor,” the remuneration for the audit for the current period is 11,000 thousand yen.
(Note 5) As he retired from the supervisory director as of October 31, 2022, the matters concerning concurrent positions, etc. during his term of office are stated.

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

- 10 -

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

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

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

5. Asset Management Company, Asset Custodian and General Administrators
The asset management company, asset custodian and general administrators as of January 31, 2023, are as follows:
Entrustment category

Name

Asset management company

Healthcare Asset Management Co., Ltd.

Asset custodian

Sumitomo Mitsui Trust Bank, Limited

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

Sumitomo Mitsui Trust Bank, Limited (Note)

General administrator (administration of investment corporation bonds)

Sumitomo Mitsui Trust Bank, Limited(Note)In accordance with the resolution of Investment Corporation board of directors held on December 6, 2022, HCM's administrative services (the administration of
the General Unitholders' Meeting and board of directors, excluding clerical work related to the dispatch of documents related to the general meeting of unitholders,receipt of voting documents, and counting of votes) was changed to HAM as of February 1, 2023.

- 11 -

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

Asset type

Asset use

Area

Paid nursing
home

48,94060.9

49,617

61.1

Core Cities (Note 4)

8,011

10.0

7,936

9.8

1,668

2.1

1,643

2.0

2,993

3.7

2,959

3.6

1,715

2.1

1,701

2.1

-

-

-

-

-

-

-

-

Core Cities (Note 4)

Other facilities for the elderly

-

-

-

-

63,32978.8

63,858

78.6

Three Major
Metropolitan Areas(Note 3)

-

-

-

-

Core Cities (Note 4)

Subtotal

Medical service-related
facilities(as of Jan, 31, 2023)

Three Major
Metropolitan Areas(Note 3)

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

Trust
beneficiaryinterests inreal estate

16th fiscal period(as of Jul. 31, 2022)

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

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

15th fiscal period

2,084

2.6

2,117

2.6

Other Areas(Note 5)

-

-

-

-

Subtotal

2,084

2.6

2,117

2.6

Three Major
Metropolitan Areas(Note 3)

12,85816.0

12,812

15.8

Core Cities (Note 4)

-

-

-

-

Other Areas(Note 5)

-

-

-

-

Subtotal

12,85816.0

12,812

15.8

-

-

-

-

78,272

97.4

78,78897.0

Deposits and other assets

2,085

2.6

2,454

3.0

Total assets

80,357100.0

81,243100.0

Multi-use
facilities

Complex of
paid nursing
homes, medical
service related
facilities

Other
Total

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

- 12 -

2. Major Assets Held
The following is an overview of the major portfolio assets (top ten properties in terms of book value) held by HCM as ofJanuary 31, 2023.
Carrying
amount(millions ofyen)leasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

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

SHIP Senri Building

12,812

24,813.85

24,813.85

100.0

Not disclosed

Paid nursing
home・Medical
service-related
facilities

GreenLife Moriguchi

4,139

8,356.85

8,356.85

100.0

Not disclosed

Paid nursing
home

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

4,099

12,636.48

12,636.48

100.0

Not disclosed

Paid nursing
home

SOMPO CARE La vie Re
Machidaonoji

3,312

7,720.17

7,720.17

100.0

Not disclosed

Paid nursing
home

SOMPO CARE La vie Re
Azamino2,933

5,789.25

5,789.25

100.0

Not disclosed

Paid nursing
homeSmiling Home Medice
Adachi

2,284

3,870.98

3,870.98

100.0

Not disclosed

Paid nursing
homeNiigata Rehabilitation
Hospital

2,117

13,476.55

13,476.55

100.0

Not disclosed

Medical servicerelated facilities

Hanakotoba Shin-Yokohama

2,096

5,230.23

5,230.23

100.0

Not disclosed

Paid nursing
homeHeartland Kawaguchi
Meiseien

2,067

3,885.90

3,885.90

100.0

Not disclosed

Paid nursing
home

AQUAMARINE
Nishinomiyahama

1,882

5,274.54

5,274.54

100.0

Not disclosed

Paid nursing
home

Total

37,747

91,054.80

91,054.80

100.0

47.3

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

Primary use“Leasable area” indicates figures based on the lease agreement of each building.
“Leased area” indicates the areas out of the leasable area for which actual lease agreements have been concluded and are leased.
” Occupancy rate” indicates the leased area as a percentage of the leasable area of each owned asset as of January 31, 2023, and is rounded to one decimal place.
“As a percentage of total operating revenue from real estate leasing business,” for each property is not disclosed as consent for disclosure of real estate leasing
business revenue has not been obtained from tenants. The total value is rounded to the first decimal place.

- 13 -

3. Details of Real Estate and Other Assets
The following is an overview of the assets held by HCM as of January 31, 2023.
Total leasable
area
(m2)

Carrying
amount(millions ofyen)(Note 1)

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

Location

Type ofownership

AQUAMARINE Nishinomiyahama

Nishinomiya-shi, Hyogo

Trust beneficiaryinterests in realestate5,274.54

1,882

2,100

Bonsejour Chitosefunabashi

Setagaya-ku, Tokyo

Trust beneficiaryinterests in realestate2,342.17804

997

Bonsejour Hino

Hino-shi, Tokyo

Trust beneficiaryinterests in realestate1,984.17703

834

Bonsejour Musashi-shinjo

Kawasaki-shi, Kanagawa

Trust beneficiaryinterests in realestate1,710.43

566

643

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

Hadano-shi, Kanagawa

Trust beneficiaryinterests in realestate3,435.79

682

850

ASHEIM Hikarigaoka

Nerima-ku, Tokyo

Trust beneficiaryinterests in realestate3,628.60

1,409

1,590

ASHEIM Bunkyohakusan

Bunkyo-ku, Tokyo

Trust beneficiaryinterests in realestate2,507.25

1,392

1,790

SOMPO CARE La vie Re Machidaonoji

Machida-shi, Tokyo

Trust beneficiaryinterests in realestate7,720.17

3,312

4,140

SOMPO CARE La vie Re Azamino

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate5,789.25

2,933

3,480

SAWAYAKA Tachibanakan

Fukuoka-shi, Fukuoka

Trust beneficiaryinterests in realestate5,652.94

1,304

1,610

SAWAYAKA Mekarikan

Kitakyushu-shi, Fukuoka

Trust beneficiaryinterests in realestate4,720.46

1,198

1,480

SAWAYAKA Tagawakan

Tagawa-shi, Fukuoka

Trust beneficiaryinterests in realestate2,366.20

353

398

GOOD TIME HOME Fudo-mae

Shinagawa-ku, Tokyo

Trust beneficiaryinterests in realestate3,400.20

1,834

2,100

Bonsejour Yotsugi

Katsushika-ku, Tokyo

Trust beneficiaryinterests in realestate1,962.89809

905

Medical Home Bonsejour Itami

Itami-shi, Hyogo

Trust beneficiaryinterests in realestate2,129.87

488

557

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

Kobe-shi, Hyogo

Trust beneficiaryinterests in realestate12,636.48

4,099

4,600

GreenLife Moriguchi

Moriguchi-shi, Osaka

Trust beneficiaryinterests in realestate8,356.85

4,139

4,650

Hapine Kobe Uozaki Nibankan

Kobe-shi, Hyogo

Trust beneficiaryinterests in realestate1,772.89

910

1,000

Granda Tsuruma-Yamato

Yamato-shi, Kanagawa

Trust beneficiaryinterests in realestate3,427.08

1,028

1,060

Name of real estate- 14 -

Type ofownership

Total leasable
area
(m2)

Carrying
amount(millions ofyen)(Note 1)

Period-end
appraisalvalue(millions ofyen)(Note 2)Name of real estate

Location

Smiling Home Medice Adachi

Adachi-ku, Tokyo

Trust beneficiaryinterests in realestate3,870.98

2,284

2,560

AIKOEN ICHIBANKAN Building

Niigata-shi, Niigata

Trust beneficiaryinterests in realestate4,311.20

759

838

Hanakotoba Minami

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate1,710.68

1,079

1,270

Hanakotoba Miura

Miura-shi, Kanagawa

Trust beneficiaryinterests in realestate1,959.64

649

668

Kawasaki-shi, Kanagawa

Trust beneficiaryinterests in realestate4,060.21

1,706

1,850

Hanakotoba Shin-Yokohama

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate5,230.23

2,096

2,460

Hanakotoba Shin-Yokohama II

Yokohama-shi, Kanagawa

Trust beneficiaryinterests in realestate1,837.29

393

384

Hanakotoba Odawara

Odawara-shi, Kanagawa

Trust beneficiaryinterests in realestate2,203.42892

946

Verde Minowa

Takasaki-shi, Gunma

11,098.17

1,643

1,730

Verde Hotaka

Kawaba-mura,Tone-gun, Gunma

6,352.86

1,290

1,460

Sunny Life Kita-Shinagawa

Shinagawa- ku, Tokyo

2,135.54

1,842

2,090

Sunny Life Kamakura

Kamakura-shi, Kanagawa

3,817.91

1,465

1,620

Nichii Home Nishikokubunji

Kokubunji-shi, Tokyo

1,559.99753

777

3,824.54

1,355

1,300

1,997.87657

647

3,484.02

1,317

1,340

2,736.89910

910

2,075.25

659

660

4,602.26

1,461

1,520

3,885.90

2,067

2,230

2,373.25

1,068

1,100

1,918.98

856

883

SOMPO CARE
Kawasaki

Lavie

Re

Hama-

SOMPO CARE Lavie Re Kobeikawadani Kobe-shi, Hyogo
SOMPO CARE Sompo no ie Sayama

Sakai-shi, Osaka

Royal Kawaguchi

Kawaguchi-shi, Saitama

NOAH GARDEN LEGEND

Sapporo-shi, Hokkaido

NOAH GARDEN L Grace

Sapporo-shi, Hokkaido

NOAH GARDEN Season Bell

Sapporo-shi, Hokkaido

Heartland Kawaguchi Meiseien

Kawaguchi-shi, Saitama

Granda Minamiurawa

Kawaguchi-shi, Saitama

Madoka Minamiurawa

Kawaguchi-shi, Saitama

Trust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestate- 15 -Name of real estate

Type ofownership

Location

Nichii Home Inage

Chiba-shi, Chiba

Hanakotoba Oppama

Yokosuka-shi, Kanagawa

SOMPO CARE Sompo no ie
Awajiekimae

Osaka-shi, Osaka

SOMPO CARE Sompo no ie
Kobekamisawa

Kobe-shi, Hyogo

NOAH GARDEN CASA RICH

Sapporo-shi, Hokkaido

Niigata Rehabilitation Hospital

Niigata-shi, Niigata

SHIP Senri Building

Toyonaka-shi, Osaka

Trust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTrust beneficiaryinterests in realestateTotal(Note 1)
(Note 2)

Total leasable
area
(m2)

Carrying
amount(millions ofyen)(Note 1)

Period-end
appraisalvalue(millions ofyen)(Note 2)4,700.07

1,588

1,670

1,899.46544

509

5,745.15

1,816

2,350

4,058.35

1,142

1,420

4,986.98

1,701

1,730

13,476.55

2,117

2,300

24,813.85

12,812

14,200217,545.72

78,78888,206“Carrying amount” indicates book value after depreciation and amortization as of January 31, 2023.
“Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2023

- 16 -

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

Name of real estate

15th fiscal period

16th fiscal period

From Feb. 1, 2022
To Jul. 31, 2022

From Aug. 1, 2022
To Jan. 31, 2023

No. oftenants(Note 1)

Occupancy
rate(%)

AQUAMARINE Nishinomiyahama

2

100.0

Bonsejour Chitosefunabashi

1

100.0

Bonsejour Hino

1

100.0

Bonsejour Musashi-shinjo

1

100.0

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

1

100.0

Medical Rehabilitation Home
Bonsejour Komaki

1

100.0

ASHEIM Hikarigaoka

1

100.0

ASHEIM Bunkyohakusan

2

100.0

SOMPO CARE La vie Re
Machidaonoji

1

100.0

SOMPO CARE La vie Re
Azamino1

100.0

SAWAYAKA Tachibanakan

1

100.0

SAWAYAKA Mekarikan

1

100.0

SAWAYAKA Tagawakan

1

100.0

GOOD TIME HOME Fudo-mae

1

100.0

Bonsejour Yotsugi

1

100.0

Medical Home Bonsejour Itami

1

100.0

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

1

100.0

GreenLife Moriguchi

1

100.0

Hapine Kobe Uozaki Nibankan

1

100.0

Granda Tsuruma-Yamato

1

100.0

Smiling Home Medice Adachi

2

100.0

As a
Real estate
percentage
leasingof totalbusinessleasingrevenuebusiness(millionsrevenueof yen)(%)
Not
Notdisclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)- 17 -

No. oftenants(Note 1)

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

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

Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)Name of real estate

15th fiscal period

16th fiscal period

From Feb. 1, 2022
To Jul. 31, 2022

From Aug. 1, 2022
To Jan. 31, 2023

No. oftenants(Note 1)

Occupancy
rate(%)

AIKOEN ICHIBANKAN Building

3

95.7

Hanakotoba Minami

1

100.0

Hanakotoba Miura

1

100.0

SOMPO CARE La vie Re
Hama-Kawasaki

5

100.0

Hanakotoba Shin-Yokohama

1

100.0

Hanakotoba Shin-Yokohama II

1

100.0

Hanakotoba Odawara

1

100.0

Verde Minowa

1

100.0

Verde Hotaka

1

100.0

Sunny Life Kita-Shinagawa

1

100.0

Sunny Life Kamakura

1

100.0

Nichii Home Nishikokubunji

1

100.0

SOMPO CARE Lavie Re
Kobeikawadani

1

100.0

SOMPO CARE Sompo no ie
Sayama1

100.0Royal Kawaguchi

1

100.0

NOAH GARDEN LEGEND

1

100.0

NOAH GARDEN L Grace

1

100.0

NOAH GARDEN Season Bell

1

100.0

Heartland Kawaguchi Meiseien

1

100.0

Granda Minamiurawa

1

100.0

Madoka Minamiurawa

1

100.0

As a
Real estate
percentage
leasingof totalbusinessleasingrevenuebusiness(millionsrevenueof yen)(%)
Not
Notdisclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)
Not
Not
disclosed disclosed(Note 2)
(Note 2)- 18 -

No. oftenants(Note 1)

3
1
1
5
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

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

15th fiscal period

16th fiscal period

From Feb. 1, 2022
To Jul. 31, 2022

From Aug. 1, 2022
To Jan. 31, 2023

As a
Real estate
percentage
leasing
Occupancyof totalbusiness
rateleasingrevenue(%)
business(millionsrevenueof yen)(%)

No. oftenants(Note 1)

No. oftenants(Note 1)

Nichii Home Inage

-

-

-

-

1

Hanakotoba Oppama

-

-

-

-

1

SOMPO CARE Sompo no ie
Awajiekimae

1

SOMPO CARE Sompo no ie
Kobekamisawa

1

NOAH GARDEN CASA RICH

1

Niigata Rehabilitation Hospital

1

SHIP Senri Building

1

Total

56

Not
100.0 disclosed(Note 2)Not
100.0 disclosed(Note 2)Not
100.0 disclosed(Note 2)Not
100.0 disclosed(Note 2)Not
100.0 disclosed(Note 2)
99.9
2,360

Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
Not
disclosed(Note 2)
100.0

1
1
1
1
1
57

As a
Real estate
percentage
leasing
Occupancyof totalbusiness
rateleasingrevenue(%)
business(millions ofrevenue
yen)
(%)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
Not
Not
100.0 disclosed disclosed(Note 2)
(Note 2)
100.0
2,417
100.0

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

- 19 -

4. Contract Amounts and Market Values of Specified Transactions
The following table shows the contract amounts and market values of specified transactions by HCM as of January
31, 2023.
Classification

Type

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

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

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

31,050,000

24,300,000

135,167

31,050,000

24,300,000

135,167(Note 1) The contract amount for interest rate swap transactions is based on the notional principal amount.
(Note 2) The value is calculated by the counterparty of the relevant transaction contract based on the prevailing market interest rate.
(Note 3) Of the market value amounts, transactions for which exceptional accounting treatment for interest rate swaps is applied in accordance with the AccountingStandard for Financial Instruments are not assessed at market value in the balance sheets.

5. Status of Other Assets
As of January 31, 2023, there are no other specified assets for investment other than those listed in "3. Details of Real
Estate and Other Assets,” above.

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

- 20 -

Capital Expenditures for Held Real Estate
1. Capital Expenditures
Of capital expenditures associated with repair work currently planned for assets owned by HCM as of January 31, 2023,
the following are the major estimated amounts. The estimated construction costs include the portion separately charged
to expenses in accounting.
Name of real estate (Location)
Verde Hotaka(Kawaba-mura, Tone-gun, Gunma)
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)(Kobe-shi, Hyogo)
SOMPO CARE La vie Re
Machidaonoji(Machida City, Tokyo)
SAWAYAKA Tagawakan(Tagawa-shi, Fukuoka)

Scheduled period

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

Renovation of exterior
walls of south building

From: Apr. 2023
To: Jul. 2023

58,300--

Renewal of accumulated
power meter

From: Jun. 2023
To: Jun. 2023

16,600--

Renewal of air conditioners
in common areas

From: May. 2023
To: Jun. 2023

15,000--

Rooftop waterproofing

From: May. 2023
To: Jun. 2023

9,000

-

-

Purpose

2. Capital Expenditures During Period
Of construction work falling under the category of capital expenditures conducted in the current fiscal period for assets
owned by HCM as of January 31, 2023, the following are the major amounts. The capital expenditures in the current
fiscal period amounted to 152,328 thousand yen. Combined with the repair expenses separately charged to expenses
amounting to 31,894 thousand yen, HCM implemented a total of 184,222 thousand yen of construction work.
Name of real estate (Location)

Construction costs(thousands of yen)

Purpose

PeriodNiigata Rehabilitation Hospital(Niigata-shi, Niigata)

Rooftop waterproofing andrenovation of exterior walls ofsouth building

From: Oct. 2022
To: Jan. 2023

50,000ASHEIM Hikarigaoka(Nerima-ku, Tokyo)

Renewal of air conditioners incommon areas

From: Nov. 2022
To: Dec. 2022

19,250

Verde Minowa(Takasaki-shi, Gunma)
Other real estate

Renewal of two boilers in themain building-

From: Jan. 2023
To: Jan. 2023
-

Total

16,21066,867
152,328

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

- 21 -

Transactions During the Period
1. Transactions of Real Estate and Asset-Backed Securities, Infrastructure Assets andInfrastructure-Related Assets
Acquisition
Property nameMedicalRehabilitation Home
Bonsejour Komaki
Nichii Home Inage
Hanakotoba
OppamaTotal

Acquisition
price (Note)

Date ofacquisition(millions ofyen)-

Disposition
Disposition
Carrying
priceamount(Note 1)(millions of(millions ofyen)

Date ofdisposition

Gain/loss
on sale(Note 2)

(millions of
yen)

yen)

-

Sep. 27, 2022

1,450

1,214

204

Sep. 30, 2022

1,508

-

-

-

-

Nov. 10, 2022

500

-

-

-

-

-

2,008

-

1,450

1,214

204

(Note 1) Acquisition price and Disposition price do not include acquisition or disposition costs, fixed property tax, city planning tax, consumption tax, local consumption tax,
etc.
(Note 2) Gain/loss on sale is the sale price less book value and other selling expenses.

2. Transactions of Other Assets
Not applicable.

3. Survey of Specified Asset Value(1) Real estate
Type ofownership

Area

Trust
beneficiaryinterests inreal estate
Trustbeneficiaryinterests inreal estate

Three
Major
Metropolit
an Areas
Three
Major
Metropolit
an Areas

Trustbeneficiaryinterests inreal estate

Three
Major
Metropolit
an Areas

Acquisitionordisposition

Property nameDate ofacquisitionordisposition

Acquisition
price or
disposition
price(Note 1)(millions ofyen)

Acquisition

Nichii Home Inage

Sep. 30, 2022

1,508

1,660

Rich Appraisal Instituteco., Ltd.

Jul. 31, 2022

Acquisition

Hanakotoba
OppamaNov. 10, 2022

500

504

Tanizawa Sogo
Appraisal Co., Ltd.

Jul. 31, 2022

2,008

2,164

1,450

1,450

1,450

1,450

Total

Disposition

MedicalRehabilitation
Home Bonsejour
KomakiSep. 27, 2022

Total

Appraisalvalue(millions ofyen)Real estate appraisalorganization

Valuation
date

Tanizawa Sogo
Appraisal Co., Ltd.
--

Jul. 31, 2022-

(Note 1) Acquisition price and Transfer price do not include acquisition or transfer costs, fixed property tax, city planning tax, consumption tax, local consumption tax, etc.
(Note 2) The appraisal value indicated above was prepared by the appraiser based on the Real Estate Appraisal Standards, Specific Thesis Chapter 3: “Appraisal on Prices ofReal Estate Subject to Securitization.”(2) Other
1) Name of surveying party
PwC PricewaterhouseCoopers Aarata LLC
2) Overview of survey results and method
Transactions requested for investigation were 2 interest rate swap transaction between August 1, 2022 and January 31,
2023. For this interest rate swap transaction, PwC PricewaterhouseCoopers Aarata LLC was commissioned to conduct asurvey regarding the name of the counterparty, the contractual figures, and the term of the transaction, as well ascomparable prices in accordance with Article 201, Paragraph 2 of the Investment Trusts Act. We have obtained a survey
report based on the Practical Guidelines for Professional Services 4460 "Practical Guidelines for Agreed-Upon Procedures
for Survey of Value of Specified Assets of Investment Trusts and Investment Corporations" issued by the JapaneseInstitute of Certified Public Accountants (JICPA).
This survey is not part of an audit of financial statements and does not provide assurance as to the reasonableness ofprices or internal control systems.

- 22 -

4. Transactions with Interested Persons (Note 1)(1) Transactions with interested persons
Transaction amount (millions of yen) (Note 2) (Note 3)Classification
Total

Purchase amountSale amount

2,008

1,450

Breakdown of transactions with interested persons, etc.
NEC Capital Solutions Limited

1,508[75.10%]

-

[-%]

Total

1,508

[75.10%]-[-%](2) Amount of fees paid
Classification

Total Amount of Fees Paid
(A)
(thousands of yen)Interest expenses (Note 4)

101,400

Borrowing expenses (Note 5)

60,164

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

Payment Amount (B)(thousands of yen)

Share of Total
B / A (%)
(Note 3)31,49831.06

40,82567.86(Note 1) The term “interested persons” refers to interested persons for HCM’s asset management company as defined in Article 123 of Order for Enforcement of the Act
on Investment Trusts and Investment Corporations and Article 26, Paragraph 1, Item 27 of the Regulations Concerning Investment Management Report ofInvestment Trusts and Investment Corporations of The Japan Investment Trusts Association. The above table adds transactions with interested persons (including
special purpose companies to which interested persons are entrusted with asset management; however, this excludes the asset management company itself) as
defined in the internal rules of the asset management company.
(Note 2) Purchase amount does not include acquisition-related expenses, property tax, city planning tax, consumption tax and local consumption tax.
(Note 3) Percentages (%) of each total amount are rounded to the second decimal place.
(Note 4) Payment Amount (B) includes current period expenses, including accrued interest as well as interest paid.
(Note 5) Payment Amount (B) lists expenses for each period, excluding amounts equivalent to non-deductible consumption tax of the 60,414 thousand yen paid in the 7th
fiscal period, 118,100 thousand yen paid in the 9th fiscal period, 58,200 thousand yen paid in the 10th fiscal period, 39,200 thousand yen paid in the 12th fiscal
period , 70,160 thousand yen paid in the 14th fiscal period, 54,170 thousand yen paid in the 15th fiscal period, and 136,550 thousand yen paid in the 16th fiscal
period.

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

- 23 -

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

2. Notices(1) General Unitholders' Meeting
The fifth general meeting of unitholders of HCM was held during the fiscal period under review. A summary of theitems approved at the general meeting of unitholders is as follows.
Approval Date

October 27, 2022

Matters for approval

Summary

Partial amendment to the Articles ofIncorporation
1 Executive Director elected
1 Substitute Executive Director elected
2 Supervisory Directors elected

Partial amendment to the Articles of Incorporation, election of an
executive director, election of a substitute executive director, andelection of 2 supervisory directors.

(2) Investment Corporation Board of Directors
The following is a summary of major contracts entered into or amended during the fiscal period that were approved
by HCM's board of directors.
Approval Date

Matters for approval

Summary

August 24, 2022

Execution of Memorandum ofUnderstanding regarding the Unitholders'
Register Administration Agreement

With regard to the administration agreement for the unitholders'register, dated November 28, 2014, concluded with Sumitomo
Mitsui Trust Bank, Limited, a memorandum of understanding was
signed that stipulates the new additional administration andadministration fees to be added in accordance with theimplementation of the electronic provision system for generalunitholders' meeting materials on September 1, 2022.

December 6, 2022

Execution of Memorandum ofUnderstanding regarding Amendment to
The General Administrative Agreement

In connection with the conclusion of an agreement to entrust
HCM's administrative services (the administration of the General
Unitholders' Meeting and board of directors) to HAM, amemorandum of understanding regarding The General
Administrative Agreement dated December 10, 2014 between
Sumitomo Mitsui Trust Bank, Limited.

December 6, 2022

Execution of The General Administrative
Agreement

An agreement was concluded to entrust HCM's administrative
services (the administration of the General Unitholders' Meetingand board of directors) to HAM.

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

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

- 24 -

1. Financial Statements(1) Balance Sheet(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2022)

Current fiscal period(As of Jan. 31, 2023)

AssetsCurrent assets
Cash and deposits

1,311,232

1,539,878

Cash and deposits in trust

297,360

272,156

Operating accounts receivable

23,74551,052

Prepaid expenses

121,812137,266

Consumption taxes receivable

41,022

-

910

7,709

1,406

-

1,797,490

2,008,064

Derivative receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust*1

39,663,574*1

40,234,862

Accumulated depreciation(5,138,841)(5,538,328)

Buildings in trust, net

34,524,732

34,696,533

129,916

129,916

Accumulated depreciation(16,503)(18,846)

Structures in trust, net

113,413

111,069

Machinery and equipment in trust

19,961

19,961

Accumulated depreciation(8,027)(9,025)

Machinery and equipment in trust, net

11,933

10,935Tools, furniture and fixtures in trust

350,622368,211

Accumulated depreciation(115,778)(145,749)

Tools, furniture and fixtures in trust, net

234,844

222,462

Land in trust

43,387,881

43,747,992

Total property, plant and equipment

78,272,804

78,788,993

Software

3,097

2,771

Total intangible assets

3,097

2,771

Security deposits

10,00010,000Long-term prepaid expenses

194,794

253,281

Derivative receivables

35,304

142,71114

4

240,114405,997

78,516,016

79,197,762

Investment unit issuance costs

28,713

22,970Investment corporation bond issuance costs

15,611

14,570Total deferred assets

44,32437,541

Structures in trust

Intangible assets

Investments and other assets

Deferred tax assets
Total investments and other assets
Total non-current assets
Deferred assets- 25 -

Total assets

80,357,832

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

- 26 -

81,243,368

(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2022)

Current fiscal period(As of Jan, 31, 2023)

Liabilities
Current liabilities
Operating accounts payable

82,36755,678

Short-term loans payable

2,000,000

2,000,000

Current portion of long-term loans payable

9,250,000

7,250,000

Accounts payable - other34,971

103,501

Accrued expenses

247,646

295,543

913

702

5,456

105,273

Advances received

398,493

397,489

Deposits received

126

162

Derivative liabilities

895-

12,020,870

10,208,351

Investment corporation bonds

2,000,000

2,000,000

Long-term loans payable

25,400,000

27,900,000

Tenant leasehold and security deposits

1,921,309

1,936,482

Tenant leasehold and security deposits in trust

167,616

167,616

Deferred tax liabilities

11,39347,322Derivative liabilities

35,216

14,977521

365

29,536,057

32,066,763

41,556,928

42,275,114

38,323,799

38,323,799

Income taxes payable
Consumption taxes payable

Total current liabilities
Non-current liabilities

Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Allowance for temporary difference
adjustments*3(10,586)*3(10,945)

Other deduction from unitholders' capital(612,180)(722,547)

Total deduction from unitholders' capital(622,767)(733,493)

37,701,032

37,590,306

Unappropriated retained earnings(undisposed loss)

1,111,161

1,289,825

Total surplus

1,111,161

1,289,825

38,812,194

38,880,132

Deferred gains or losses on hedges(11,290)88,121

Total valuation and translation adjustments(11,290)88,121

Unitholders' capital, net
Surplus

Total unitholders’ equity
Valuation and translation adjustments

Total net assets*2

Total liabilities and net assets

38,800,904
80,357,832

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

- 27 -*2

38,968,253
81,243,368

(2) Statement of Income(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Operating revenue
Leasing business revenues*1

Other revenue related to leasing business

2,360,228*1

Gain on sale of real estate properties

10,928-

Total operating revenue

2,371,156*1

2,417,024*1*2

10,583
204,649

2,632,258

Operating expenses
Expenses related to leasing business*1

Asset management fee

784,089*1

801,972

203,435

246,843

Asset custody fee

3,864

4,063

Administrative service fees

23,40424,293

Directors’ compensation

4,800

5,100

Property tax

30,62831,166

Other operating expenses

55,37964,937

Total operating expenses

1,105,602

1,178,377

1,265,553

1,453,880

7

5

1,566

254

-

81

474

1,000

-

14

2,048

1,355

Interest expenses

93,992

101,400

Interest expenses on investment corporation bonds

7,800

7,800

Amortization of investment unit issuance costs

5,742

5,742

Amortization of investment corporation bond issuance
costs

1,040

1,040

Borrowing expenses

57,97960,164

Total non-operating expenses

166,555

176,148

Ordinary income

1,101,046

1,279,087

Income before income taxes

1,101,046

1,279,087

Income taxes - current

914

703

Income taxes - deferred

(2)

10

911

713

1,100,134

1,278,374

11,027

11,451

1,111,161

1,289,825

Operating income
Non-operating income
Interest income
Insurance income
Interest on tax refund
Reversal of distributions payable
Other
Total non-operating income
Non-operating expenses

Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)
The accompanying notes are an integral part of these financial statements.

- 28 -

(3) Statement of Unitholders' Equity
Previous fiscal period (from February 1, 2022, to July 31, 2022)(Unit: thousands of yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’capitalBalance at beginning ofcurrent period
Changes of items during
periodIssuance of new
investment units

Allowance fortemporarydifference
adjustments

32,480,785(15,501)

Other deduction Total deduction
from unitholders' from unitholders'
capitalcapital(516,392)(531,894)

5,843,014

Unitholders'
capital, net

31,948,891

5,843,014

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

4,915

4,915

4,915

(95,788)(95,788)(95,788)

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

5,843,014

4,915(95,788)(90,872)

5,752,141

38,323,799(10,586)(612,180)(622,767)

37,701,032(Unit: thousands of yen)

Valuation and translation
adjustments

Unitholders’ equity
Surplus

Balance at beginning ofcurrent period
Changes of items during
periodIssuance of new
investment units
Dividends of surplus
Reversal of allowancefor temporary
difference adjustments
Distributions in excessof earnings from other
distributions
Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
periodUnappropriatedretained earnings(undisposed loss)

Total surplus

929,041

929,041

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

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

Total net assets

32,867,048

5,843,014

5,843,014(913,098)(913,098)(913,098)(913,098)(4,915)(4,915)--(95,788)(95,788)

1,100,134

1,100,134

1,100,134

1,100,134

(406)

(406)

(406)

182,120

182,120

5,934,261

(406)

(406)

5,933,855

1,111,161

1,111,161

38,812,194(11,290)(11,290)

38,800,904

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

- 29 -

Current fiscal period (from August 1, 2022, to January 31, 2023)(Unit: thousands of yen)
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’capitalBalance at beginning ofcurrent period
Changes of items during
periodAllowance fortemporarydifference
adjustments

38,323,799(10,586)

Other deduction Total deduction
from unitholders' from unitholders'
capitalcapital(612,180)

Unitholders'
capital, net(622,767)

37,701,032

(359)

(359)

(110,366)(110,366)(110,366)

Dividends of surplus
Distributions in excessof earnings fromallowance fortemporary difference
adjustments
Distributions in excessof earnings from other
distributions(359)

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

*1

-

(359)

(110,366)(110,726)(110,726)

38,323,799(10,945)(722,547)(733,493)

37,590,306(Unit: thousands of yen)

Valuation and translation
adjustments

Unitholders’ equity
Surplus

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

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

Total surplus

1,111,161

1,111,161

38,812,194(1,099,710)(1,099,710)(1,099,710)(1,099,710)

(359)

(359)

(110,366)(110,366)

1,278,374

1,278,374

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

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

Unappropriatedretained earnings(undisposed loss)

1,278,374

1,278,374(11,290)(11,290)

38,800,904

99,411

99,411

99,411

178,663

178,663

67,937

99,411

99,411

167,349

1,289,825

1,289,825

38,880,132

88,121

88,121

38,968,253

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

- 30 -

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

Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

I.

Unappropriated retained earnings

1,111,161,945

1,289,825,791

II.

Distributions in excess of earnings

110,726,000-

359,500-

110,366,500-

III. Incorporation into unitholders’ capital-

10,945,922

Reversal of allowance for temporary
difference adjustments-

10,945,922

1,210,436,500[3,367]

1,278,741,500[3,557]

1,099,710,500[3,059]1,278,741,500[3,557]359,500

-

[1]

[-]

110,366,500

-

[307]

[-]

11,451,445

138,369

Allowance for temporary difference
adjustments
Other deduction from unitholders’ capital

IV. Distributions[Distributions per unit]
Distributions of earnings[Distributions of earnings per unit]
Allowance for temporary difference
adjustments[Distributions in excess of earnings per unit
(Allowance for temporary difference
adjustments) ]Distributions in excess of earnings fromother distributions[Distributions in excess of earnings per unit
(Distributions in excess of earnings fromother distributions) ]V.

Retained earnings carried forward- 31 -

Type

Calculation method for distributions(Note 1)

Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

In accordance with the cash distributions policy
described in Article 36, Paragraph 1 of its Articles ofIncorporation, HCM determines that the amount of
distributions shall exceed the amount equivalent to
90% of its distributable profit as stipulated in Article
67-15 of the Act on Special Measures Concerning
Taxation, and shall be up to its profits as defined in
Article 136, Paragraph 1 of the Investment Trust
Act. Following this policy, HCM has decided that, of
profits as defined in Article 136, Paragraph 1 of theInvestment Trusts Act, it shall distribute
1,099,710,500 yen, which is the maximum integral
multiple of 359,500 units issued and outstanding as
distributions of earnings. Accordingly, thedistributions of earnings per unit were 3,059 yen.
In addition, HCM is to make distributions in excessof earnings, of which amount is to be determinedby HCM as an amount equivalent to net asset
deduction items (as defined in Article 2, Paragraph2, Item (30) (b) of the Ordinance on Accountings ofInvestment Corporations), considering the impact
of net asset deduction items on distribution,
pursuant to the policy for cash distribution inexcess of earnings provided in Article 36, Paragraph
2 of its Articles of Incorporation. During the current
fiscal period, since deferred losses on hedges of 0.4
million yen was recorded as net asset deduction
items, HCM decided to make distributions ofallowance for temporary difference adjustments inthe amount of 359,500 yen. As a result,distributions in excess of earnings per unit
(allowance for temporary difference adjustments)
came to 1 yen.
Furthermore, in accordance with the policy for cash
distributions in excess of earnings provided in
Article 36, Paragraph 2 of its Articles ofIncorporation, HCM is to conduct distributions inexcess of earnings (return of capital that falls under
the category of distributions reducing unitholders’capital for tax purposes) in each period on acontinuous basis. During the current fiscal period,
HCM has decided to distribute 110,366,500 yen, anamount roughly equivalent to 20% of thedepreciation recorded in the current fiscal period,
as distributions in excess of earnings. As a result,distributions in excess of earnings per unit (ofdistributions in excess of earnings from other
distributions) came to 307 yen.
As a result, distributions per unit came to 3,367 yen.

In accordance with the cash distributions policy
described in Article 36, Paragraph 1 of its Articles ofIncorporation, HCM determines that the amount of
distributions shall exceed the amount equivalent to
90% of its distributable profit as stipulated in Article
67-15 of the Act on Special Measures Concerning
Taxation, and shall be up to its profits as defined in
Article 136, Paragraph 1 of the Investment Trust
Act. Following this policy, HCM has decided that, of
the amount of unappropriated retained earnings
for the fiscal period less the reversal amount of theallowance for temporary differences (as defined in
Article 2, Paragraph 2, Item (30) of the Regulationon Accountings of Investment Corporations), it shall
distribute approximately the entire amount of
1,278,741,500 yen as the distribution of earnings.
Accordingly, the distributions of earnings per unit
were 3,557 yen.
Furthermore, in accordance with the policy for cash
its distributions in excess of earnings provided in
Article 36, Paragraph 2 of its Articles ofIncorporation, HCM is to conduct distributions inexcess of earnings (return of capital that falls under
the category of distributions reducing unitholders’capital for tax purposes) in each period on acontinuous basis, as a rule.
However, in the fiscal period under review, a gain onsale of the real estate properties was generated,
and in consideration of profit reflecting such gain on
sale, HCM decided not to make continuous
distributions in excess of earnings during thecurrent period.
As a result, distributions per unit came to 3,557 yen.

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

(Note 2)

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

- 32 -

(5) Statement of Cash Flows(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Cash flows from operating activities
Income before income taxes
Depreciation

1,101,046

1,279,087

552,155

563,971

Amortization of investment corporation bond issuance
costs

1,040

1,040

Borrowing expenses

57,97960,164

Amortization of investment unit issuance costs

5,742

5,742

Interest income

(7)

(5)

Interest on tax refund

-

(81)

Interest expenses

101,792

109,200

Decrease (increase) in operating accounts receivable(21,663)(27,307)

Decrease (increase) in consumption taxes receivable(41,022)41,022

Decrease (increase) in prepaid expenses(2,883)

1,600

Increase (decrease) in operating accounts payable

20,177(26,689)

Increase (decrease) in accounts payable - other(1,872)(845)

Increase (decrease) in consumption taxes payable(12,175)

99,817

Increase (decrease) in accrued expenses

5,850

48,827

Increase (decrease) in advances received

59,654(1,003)

Decrease (increase) in long-term prepaid expenses

7,087

10,125

Increase (decrease) in deposits received

(668)

36

-

1,214,138(1,359)250

1,830,875

3,379,092

Interest income received

75Interest on tax refund received-

81(100,606)(110,131)

(867)

(913)

1,729,408

3,268,134(12,366,585)(2,225,327)

Purchase of intangible assets(3,260)-

Proceeds from tenant leasehold and security deposits

55,80059,926

Repayments of tenant leasehold and security deposits-(44,754)

Proceeds from tenant leasehold and security deposits
in trust

80,850-(12,233,196)(2,210,155)

Payments into restricted deposits in trust(80,850)-

Proceeds from short-term loans payable

2,000,000

500,000

Repayments of short-term loans payable-(500,000)

Proceeds from long-term loans payable

3,500,000

9,750,000-(9,250,000)(59,747)(145,123)

Decrease due to sale of property, plant and equipmentin trust
Other, net
SubtotalInterest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust

Net cash provided by (used in) investing activities
Cash flows from financing activities

Repayments of long-term loans payable
Borrowing expenses- 33 -

Proceeds from issuance of investment units

5,808,558-

Dividends paid

(1,008,033)(1,209,413)

Net cash provided by (used in) financing activities

10,159,927(854,536)

Net increase (decrease) in cash and cash equivalents(343,860)

203,442

Cash and cash equivalents at beginning of period

1,784,836

1,440,976*1 1,440,976*1 1,644,419

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

- 34 -

(6) Notes to Financial Statements[Organization]
Healthcare & Medical Investment Corporation (hereinafter, “HCM”) was established under the Act on Investment Trusts andInvestment Corporations (Act No. 198 of 1951, as amended; hereinafter, the “Investment Trust Act”) with Healthcare AssetManagement Co., Ltd. (hereinafter, the “Asset Management Company” or “HAM”) as the organizer on December 9, 2014. HCM
was listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, the “Tokyo Stock
Exchange”) on March 19, 2015 (securities code: 3455).
The total number of investment units issued and outstanding as of the end of the fiscal period ended January 2023 (August 1,
2022 to January 31, 2023) (hereinafter, the “16th fiscal period” or the “current fiscal period”) stands at 359,500 units.
[Basis of Presentation]
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trusts
Act, the Financial Instruments and Exchange Act of Japan and other related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (hereinafter, “Japanese GAAP”), which are different in certain aspects as to theapplication and disclosure requirements from International Financial Reporting Standards (hereinafter, “IFRS”) or accounting
principles generally accepted in the United States of America (hereinafter, “U.S. GAAP”).
The accompanying financial statements are the translation of the financial statements presented in the securities report of theInvestment Corporation submitted to the Kanto Local Finance Bureau, which have been prepared in compliance with Japanese
GAAP, translated into English.
Amounts less than one thousand yen have been omitted. As a result, the totals presented in the accompanying financial
statements in yen do not necessarily agree with the sums of the individual amounts. HCM does not have subsidiaries and thus
does not prepare consolidated financial statements.
The accounting periods of HCM are six-month periods ending at the end of February and the end of August of each year.
[Going Concern Assumption]
Not applicable.
[Summary of Significant Accounting Policies]
1. Method of depreciation of non(1) Property, plant and equipment
current assets
The straight-line method is adopted.
The useful life of principal property, plant and equipment is as follows.
Buildings in trust
5-69 years
Structures in trust
10-53 years
Machinery and equipment in trust
10 years
Tools, furniture and fixtures in trust
6-15 years(2) Intangible assets
The straight-line method is adopted.
2. Accounting for deferred assets

3. Standards for revenue andexpense recognition(1) Investment unit issuance costs
Depreciated evenly over 3 years.
(2) Investment corporation bond issuance costs
Amortized using the straight-line method over the maturity period.
(1) Accounting for property taxes
For property tax, city planning tax, depreciable asset tax on real estate. owned, theaccounting is that, of the tax amount assessed and determined, the amountcorresponding to the concerned accounting period is expensed as expenses related toleasing business.
In connection with the acquisition of real estate, including trust beneficiary interests inreal estate, the amount equivalent to real property tax for the initial fiscal year, which
was settled with the seller, is not recorded as expenses but included in the cost of
acquisition of the concerned real estate. The amount equivalent to property tax includedin the cost of acquisition of real estate was 37,599 thousand yen for the previous fiscal
period and 2,041 thousand yen for the current fiscal period.

- 35 -

4. Method of hedge accounting

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

[Additional Information][Provision and Reversal of Allowance for Temporary Difference Adjustments]
Previous fiscal period (from February 1, 2022, to July 31, 2022)
1.Reasons, related assets and amounts of reserve
Due to the recognition of deferred losses on hedges (net asset deduction items), which was a result of applying hedge
accounting to the assessment of interest rate swap transactions, 359 thousand yen of allowance for temporary difference
adjustments has been recorded in the statement of cash distributions.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of allowance for temporary difference
adjustments will be reversed.
Current fiscal period (from August 1, 2022, to January 31, 2023)
1. Reasons, related assets and amounts of reversal
Due to the decrease of deferred losses on hedges of 10,945 thousand yen within the statement of cash distributions from theassessment of fair value of interest rate swap transactions to which hedge accounting is applied, 10,945 thousand yen ofallowance for temporary difference adjustments for elimination of the amount has been reversed.

- 36 -

2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of allowance for temporary difference
adjustments will be reversed.
[Balance Sheet]*1 Government grants received related to assets acquired were deducted from the carrying amount of property, plant andequipment. The amount deducted from the carrying amount was below.
(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2022)
Buildings in trust

Current fiscal period(As of Jan. 31, 2023)

10,041

10,041*2 Minimum net assets of at least ¥50 million as required by the Investment Trust Law(Unit: thousands of yen)Previous fiscal period(As of Jul. 31, 2022)

Current fiscal period(As of Jan. 31, 2023)

50,00050,000*3 Allowance for temporary difference adjustments
Previous fiscal period (from February 1, 2022, to July 31, 2022)
1. Reasons, related assets and amounts(Unit: thousands of yen)
Related assets

ReasonDeferred gains or losses
on hedges

InitialamountLoss on interest-rate
swaps recognized at theend of current period

Balance at Reserved Reversed Balance at
beginning amount in amount in
end ofReason forof current
current
current
current
reversal
periodperiodperiodperiodChanges in
the fair

25,683

15,501-(4,915)

10,586

25,683

15,501-(4,915)

10,586value ofderivativetransactions

Total
2. Method of reversal(1) Deferred gains or losses on hedges

The allowance will be reversed corresponding to future changes in the values of the hedging derivatives.
Current fiscal period (from August 1, 2022, to January 31, 2023)
1. Reasons, related assets and amounts

Related assets

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

25,683

10,586359-

10,945-

Total

25,683

10,586359-

10,945-

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

- 37 -

[Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing business(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

A.

Operating revenue from real estateleasing businessLeasing business revenues

2,360,228

2,417,024

10,928

10,5832,371,156

2,427,608

Property tax

143,989

141,560

Outsourcing expenses

34,956

36,466

Repair expenses

25,84531,894

Rent revenue
Other revenue related to leasing business
Other revenue
Total operating revenue from real estateleasing business
B. Operating expenses from real estateleasing business
Expenses related to leasing businessInsurance expenses

10,093

10,417

Depreciation

551,793563,645

17,41017,987784,089

801,972

1,587,067

1,625,635

Other expenses related to leasing businessTotal operating expenses from real estateleasing business
C. Operating income (loss) from real estateleasing business [A-B]*2 Breakdown of gain on sale of real estate properties(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Medical Rehabilitation Home
Bonsejour Komaki
Proceeds from sales of real estate-

1,450,000

Cost of sales of real estate-

1,214,138

Other expenses-

31,211Gain on sale of real estate properties-

204,649[Statement of Unitholders’ Equity]*1 Total number of investment units authorized and total number of investment units issued and outstanding
Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022
Total number of investment units
authorized
Total number of investment units
issued and outstanding

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

10,000,000 units

10,000,000 units

359,500 units

359,500 units- 38 -

[Statement of Cash Flows]*1 Reconciliation of cash and cash equivalents at end of period and relevant amount on the balance sheet(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

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

1,311,232

1,539,878

297,360(167,616)

272,156(167,616)

Cash and cash equivalents

1,440,976

1,644,419(Note) Restricted deposits in trust refer to deposits in trust reserved for refunds of leaseholds received from tenants.

[Operating Lease Transactions]Non-cancellable operating leases (lessor side)(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2022

Current fiscal period
As of Jan. 31, 2023

Due within 1 year
Due after 1 year

2,752,188

2,302,673

11,830,827

11,702,017

Total

14,583,016

14,004,691[Financial Instruments]
1. Our policy on financial instruments(1) Policy for financial instruments
Pursuant to the policy of conducting stable and sound financial management, HCM raises funds for asset acquisition,
repayment of loans by means of loans from banks, issuance of investment corporation bonds or issuance of new investment
units. As to finance by loans and issuance of investment corporation bonds, HCM pays attention to extending periods, fixing
interest rates, diversifying repayment dates and such to secure financial stability and avoid the risk of rise in interest rates
in the future.
Derivative transactions shall be limited to those invested in for the purpose of hedging the risk of fluctuations in interest
rates on HCM’s loans.
(2) Description of financial instruments and associated risks, and risk management system
Loans and proceeds from issuance of investment corporation bonds are used primarily for the acquisition of trust
beneficiary interests in real estate and repayment of debts.
Although borrowings and investment corporation bonds are exposed to liquidity risks on the repayment or maturity date,the impact of rising market interest rates on the management of HCM is limited through appropriate management of theratio of interest-bearing liabilities, and such risks are controlled through diversification of repayment and redemption dates.
Although borrowings with floating interest rates are exposed to interest rate fluctuation risks, the ratios of loan balanceswith floating rates and fixed rates against all loans are adjusted according to the financing environment. Furthermore,derivative transactions (interest rate swap transactions) have been used for part of loans with floating rates to avoid interest
fluctuation risks and to fix interest payment. Execution/management of derivative transactions carried out for the purposeof hedging interest rate fluctuation risks is conducted pursuant to provisions that stipulate the basic policy of risk
management.
Although tenant leasehold and security deposits as well as tenant leasehold and security deposits in trust are deposits fromtenants and are exposed to liquidity risks at the time of refunding upon tenants’ vacancies, HCM controls liquidity risks by
securing liquidity at hand to a certain degree and other measures.

- 39 -

For deposits, such risks are controlled by setting lower limits to the credit rating of financial institutions at which deposits
are made (excluding deposits for settlement).
(3) Supplementary explanation to fair value of financial instruments
Certain assumptions are adopted in the calculation of the fair value of financial instruments. Accordingly, there may becases where the concerned values will differ when different assumptions are adopted.
2. Fair value of financial instruments
Carrying amount, fair value and difference between the two were as follows. Notes to "Cash and deposits," "Cash anddeposits in trust" and “short-term loans payable” have been omitted because their fair values approximate their bookvalues. This is due to their nature as cash and as accounts settled over the short term.
Previous fiscal period (from February 1, 2022, to July 31, 2022)(Unit: thousands of yen)
Carrying amount

Fair value

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

9,250,000

9,249,754(245)(2) Investment corporation bonds

2,000,000

1,990,800(9,200)(3) Long-term loans payable

25,400,000

25,393,195(6,804)36,650,000

36,633,750(16,249)

102

102

-

Total liabilities(4) Derivative transactions

Current fiscal period (from August 1, 2022, to January 31, 2023)(Unit: thousands of yen)

Carrying amount

Fair value

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

7,250,000

7,249,518(481)(2) Investment corporation bonds

2,000,000

1,956,600(43,400)(3) Long-term loans payable

27,900,000

27,886,698(13,301)

37,150,000

37,092,817(57,182)

135,443

135,443-

Total liabilities(4) Derivative transactions(Note 1) Method of calculation of the fair value of financial instruments and matters concerning derivative transactions(1) Current portion of long-term loans payable; (3) Long-term loans payable
For those with floating interest rates that reflect market interest rates within a short period of time, the book value is deemed to be areasonable approximation of the fair value as there are no significant changes in HCM’s credit standing after borrowing; therefore, thebook value is used as the fair value equivalent. Those with fixed interest rates are calculated by discounting the sum of principal and interest(*) at a reasonable rate estimated for a similar loan that is made corresponding to the remaining period.
(*) For long-term loans with floating interest rates to which special treatment for interest rate swaps is applied (please refer to “Derivative
Transactions” below), the sum of principal and interest under the interest rates after the interest rate swaps are indicated.
(2) Investment corporation bonds
Figures are calculated based on the reference statistics of transactions provided by the Japan Securities Dealers Association.
(4) Derivative transactions
Please refer to “Derivative Transactions” below.
(Note 2) Amount of repayment of borrowings and other interest-bearing liabilities scheduled to be due after the account closing datePrevious fiscal period (As of July 31, 2022)(Unit: thousands of yen)
Due after 1 year Due after 2 years Due after 3 years Due after 4 years
Due within 1 year
and within 2 years and within 3 years and within 4 years and within 5 years
Investment
corporationbonds
Long-term loans
payableTotal

Due after
5 years

-

-

-

-

-

2,000,000

9,250,000

7,250,000

5,550,000

3,900,000

5,900,000

2,800,000

9,250,000

7,250,000

5,550,000

3,900,000

5,900,000

4,800,000- 40 -

Current fiscal period (As of January 31, 2023)(Unit: thousands of yen)
Due after 1 year Due after 2 years Due after 3 years Due after 4 years
Due within 1 year
and within 2 years and within 3 years and within 4 years and within 5 years

Due after
5 years

Investment
corporationbonds
Long-term loans
payable

-

-

-

-

-

2,000,000

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

4,000,000

Total

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

6,000,000[Securities]
Previous fiscal period (As of July 31, 2022)
Not applicable.
Current fiscal period (As of January 31, 2023)
Not applicable.
[Derivative Transactions]
1. Derivative transactions to which hedge accounting is not applied
Previous fiscal period (As of July 31, 2022)
Not applicable.
Current fiscal period (As of January 31, 2023)
Not applicable.
2. Derivative transactions to which hedge accounting is applied
The following table shows the contracted amount or principal amount equivalent or the like set forth in the contract as of
the balance sheet date for each hedge accounting method.
(Unit: thousands of yen)Previous fiscal period (As of July 31, 2022)
Method ofhedge
accounting

Contract amount
Derivative Instruments

Hedged item

Due after 1
year

Fair value

Method ofcalculation for thefair value

Principle
accounting
methodInterest rate swap
transaction
Long-term loans
Floating receivable; fixed payablepayable30,800,000

22,800,000102

Based on theprice presented
by corresponding
financial
institutions

Specialtreatment forinterest rate
swaps

Interest rate swap
transaction
Long-term loans
Floating receivable; fixed payablepayable1,000,000

1,000,000(Note)-

31,800,000

23,800,000

102

Total

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

Current fiscal period (As of January 31, 2023)
Method ofhedge
accounting
Principle
accounting
method(Unit: thousands of yen)Contract amount

Derivative Instruments
Interest rate swap
transaction
Floating receivable;
fixed payable

Hedged item

Long-term loans
payable- 41 -

Due after 1
year

30,050,000

24,300,000

Fair value

Method ofcalculation for thefair value

135,443

Based on theprice presented
by corresponding
financial
institutions

Method ofhedge
accounting
Specialtreatment forinterest rate
swaps

Contract amount
Derivative Instruments
Interest rate swap
transaction
Floating receivable;
fixed payable

Hedged item

Long-term loans
payableTotal

Due after 1
year

Fair value

Method ofcalculation for thefair value-

1,000,000-(Note)

31,050,000

24,300,000

135,443(Note) Since those with special treatment of interest rate swaps are treated integrally with hedged long-term loans payable, the market values of suchare shown as included in the fair value in “(3) Long-term loans payable” in “[Financial Instruments], 2. Fair value of financial instruments” above.

[Retirement Benefits]
Previous fiscal period (As of July 31, 2022)
Not applicable.
Current fiscal period (As of January 31, 2023)
Not applicable.
[Tax-Effect Accounting]
1. Breakdown of deferred tax assets and deferred tax liabilities(Unit: thousands of yen)Previous fiscal period
As of Jul. 31, 2022

Current fiscal period
As of Jan. 31, 2023

Deferred tax assets
Non-deductible accrued enterprise tax

14

4

Deferred gains or losses on hedges

11,3604,711

Subtotal deferred tax assets

11,375

4,716

Valuation allowance(11,360)(4,711)

14

4(11,393)(47,322)(11,378)(47,317)

Total deferred tax assets
Deferred tax liabilities
Deferred gains or losses on hedges
Net deferred tax assets (liabilities)

2. Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate
(Unit: %)Previous fiscal period
As of Jul. 31, 2022
Statutory tax rate
[Adjustments]
Deductible distributions payable

Current fiscal period
As of Jan. 31, 2023

31.46

31.46

(31.43)(31.45)

Other

0.05

0.05

Effective income tax rate

0.08

0.06

[Share of Profit (Loss) of Affiliates Accounted for Using Equity Method]
Previous fiscal period (As of July 31, 2022)
Not applicable.
Current fiscal period (As of January 31, 2023)
Not applicable.

- 42 -

[Related-Party Transactions]
1. Parent company, major corporate unitholders.
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.
2. Affiliated company and other
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.
3. Fellow subsidiary company and other
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.
4. Director, major individual unitholder and other
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.
[Asset Retirement Obligations]
Previous fiscal period (As of July 31, 2022)
Not applicable.
Current fiscal period (As of January 31, 2023)
Not applicable.

- 43 -

[Investment and Leasing Properties]
HCM owns healthcare facilities (48 properties in total) primarily in the Three Major Metropolitan Areas and Core Cities. The
carrying amount, amount of increase (decrease) during the period and fair value of these investment and leasing properties
are as follows:(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Carrying amount
Balance at beginning of period
Amount of increase (decrease)during period
Balance at end of period
Fair value at end of period

66,525,573

78,272,804

11,747,231

516,188

78,272,804

78,788,993

86,364,000

88,206,000(Note 1) “Carrying amount” is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Out of the amount of increase (decrease) during the previous fiscal period, the amount of increase is mainly attributable to acquisitions(12,192,953 thousand yen). The amount of decrease is mainly attributable to depreciation (551,793 thousand yen). Out of the amount of
increase (decrease) during the current fiscal period, the amount of increase is mainly attributable to acquisitions (2,141,644 thousand yen).
The amount of decrease is mainly attributable to disposition (1,214,138 thousand yen) and depreciation (563,645 thousand yen).
(Note 3) “Fair value at end of period” is the appraisal value or survey value by an outside real estate appraiser.

The profit (loss) concerning investment and leasing properties is as stated in “Statement of Income” above.
[Revenue Recognition]
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Information has been omitted due to the immateriality of the eligible revenue.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Information has been omitted due to the immateriality of the eligible revenue.
[Segment Information]
1.

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

2.

Related information

Previous fiscal period (from February 1, 2022, to July 31, 2022)(1) Information on products and services
Disclosure has been omitted because net sales to external customers for a single products and services category
exceeds 90% of operating revenue on the statement of income.
(2) Information on geographic areas
1) Operating revenues

2)

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

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

- 44 -

Current fiscal period (from August 1, 2022, to January 31, 2023)(1) Information on products and services
Disclosure has been omitted because net sales to external customers for a single products and services category
exceeds 90% of operating revenue on the statement of income.
(2) Information on geographic areas
1) Operating revenues
Disclosure has been omitted because net sales to external customers in Japan exceeds 90% of operating
revenue on the statement of income.
2)

Property, plant and equipment
Disclosure has been omitted because the amount of property, plant and equipment located in Japan exceeds

90% of the amount of property, plant and equipment on the balance sheet.
(3) Information on major customers
Disclosure has been omitted because consent has not been obtained from the tenant.
[Per Unit Information]
Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Net assets per unit

107,930 yen

108,395 yen

Net income per unit

3,063 yen

3,555 yen

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

Net income (thousands of yen)Amount not attributable to common unitholders (thousands of yen)
Net income attributable to common investment units(thousands of yen)
Average number of investment units during period (units)- 45 -

Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

1,100,134

1,278,374--

1,100,134

1,278,374

359,142

359,500

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

Type
Due after 1 year

Fair value(Note 2) (Note 3)

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

31,050,000

24,300,000

135,167

Total

31,050,000

24,300,000

135,167(Note 1) The contracted amount for interest rate swap transactions is based on the notional principal amount.
(Note 2) The value is calculated by the counterparty of the relevant transaction contract based on the prevailing market interest rate.
(Note 3) Of the fair value amounts, transactions for which exceptional accounting treatment for interest rate swaps is applied in accordance with the
Accounting Standard for Financial Instruments (ASBJ Statement No. 10, March 10, 2008) are not assessed at fair value in the balance sheets.

- 46 -

3) Property, plant and equipment and intangible assets

Property, plant and equipment(Unit: thousands of yen)

Asset type

IncreaseduringperiodBuildings intrust

39,663,574

1,290,218

Structures intrust

129,916--

129,916

18,8462,343

111,069-

19,961--

19,961

9,025

998

10,935-

350,622

17,589-368,211

145,749

29,971

222,462-

Land in trust

43,387,881

986,165

626,053 43,747,992-

Subtotal

83,551,955

2,293,972

1,344,983 84,500,944

5,711,950

14,349--14,349

11,577

326

2,771

-

14,349--14,349

11,577

326

2,771

-

83,566,304

2,293,972

1,344,983 84,515,293

5,723,528

Machinery andequipment in
trust
Tools,
furniture andfixtures intrust

Intangible
assets

Accumulated depreciation
Balance at
Net balanceend ofat end ofor
For theperiodperiodaccumulated
periodamortization

Balance at
beginning of
periodSoftwareSubtotal
Total

Decreaseduringperiod718,930 40,234,862

5,538,328

Notes

530,332 34,696,533 (Note 1)- 43,747,992 (Note 1)
563,645 78,788,993-

563,971 78,791,765(Note 1) The main reasons for the increase in "Buildings in trust" and "Land in trust" during the current period was the acquisition of 2 properties (Nichii
Home Inage and Hanakotoba Oppama).

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

Balance at Decrease Balance atInterest
Issuance date beginning of during
end ofrate
periodperiodperiodNo. 1 Unsecured Investment
Corporation Bond
(With pari passu conditions January 30,
between specified investment
2020
corporation bonds)(Social bond)Total

2,000,000- 2,000,000 0.780%

2,000,000- 2,000,000

Maturity
date

January 30,
2030

Use

Remarks

Repayment Unsecuredof loans
andpayable unguaranteed(Note) The maturity schedule for investment corporation bonds within five years of the balance sheet date are as follows.
(Unit: thousands of yen)
Due after 1 year andwithin 2 years

Due within 1 year
Investment
corporation bonds-

Due after 2 years andwithin 3 years-

Due after 3 years andwithin 4 years-- 47 -

Due after 4 years andwithin 5 years--

6) Loans

Category

Short-termloans payable

LenderSumitomo Mitsui
Banking Corporation

Sumitomo Mitsui
Banking Corporation

Balance atIncrease
Decrease
Balance at
Average
beginning ofDrawdown
during period during period end of period interest Repayment Repayment
periodUse
RemarksDate(thousands of (thousands of (thousands of
rate
date
method(thousands of
yen)
yen)
yen)
(Note1)yen)
Lump-sum
March 30,
March 30, repayment
Unsecured/
2,000,000
2,000,000 0.31%(Note 3)
2022
2023
on
Nonguaranteedmaturity
Lump-sum
September
January 31, repayment
Unsecured/30,
500,000
500,000- 0.31%(Note 3)2023
onNonguaranteed2022
maturity

Subtotal

2,000,000

500,000

500,000

2,000,000

2,000,000-

2,000,000-

1,000,000-

1,000,000-

500,000-

500,000

500,000-

500,000-

1,000,000-

1,000,000-

1,100,000-

1,100,000-

550,000-

550,000-

500,000-

500,000-

Shinkin Central Bank

350,000-

350,000-

The Bank of Fukuoka,
Ltd.

250,000-

250,000-

The Gunma Bank, Ltd.

250,000-

250,000-

Nippon Life Insurance
Company

800,000-

800,000-

150,000-

150,000-

150,000-

150,000-

150,000-

150,000--

1,000,000-

1,000,000-

2,550,000-

2,550,000-

1,100,000-

1,100,000-

550,000-

550,000-

500,000-

500,000-

350,000-

The Bank of Fukuoka,
Ltd.

-

250,000-

250,000

The Gunma Bank, Ltd.

-

250,000-

250,000

The 77 Bank, Ltd.

-

200,000-

200,000

Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

March 20,2018

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

Current portion of long-term loans payable

The Nishi-Nippon City
Bank, Ltd.

February 1,
2019

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

Hiroshima Bank, Ltd.

Sumitomo Mitsui
Banking Corporation

March 3,2017

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

February 1,
2019

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

Lump-sum
0.42% January 31, repayment
Unsecured/(Note 3)(Note 2)2023
onNonguaranteedmaturity

0.43%- 48 -

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

Lump-sum
0.89% January 31, repayment
Unsecured/(Note 3)(Note 2)2024
onNonguaranteedmaturity

Lump-sum
0.54% January 31, repayment
Unsecured/(Note 3)(Note 2)2024
onNonguaranteed
350,000
maturityCategory
Lender

Nippon Life Insurance
Company

Balance atIncrease
Decrease
Balance at
Average
beginning ofDrawdown
during period during period end of period interest Repayment Repayment
periodDate(thousands of (thousands of (thousands of
rate
date
method(thousands of
yen)
yen)
yen)
(Note1)yen)

January 29,
2021-

500,000-

500,000

9,250,000

7,250,000

9,250,000

7,250,000

1,000,000-

1,000,000-

2,550,000-

2,550,000-

1,100,000-

1,100,000-

550,000-

550,000-

500,000-

500,000-

350,000-

350,000

The Bank of Fukuoka,
Ltd.

250,000-

250,000-

The Gunma Bank, Ltd.

250,000-

250,000-

The 77 Bank, Ltd.

200,000-

200,000-

Sumitomo Mitsui Trust
Bank, Limited

850,000--

850,000

Resona Bank, Limited

800,000--

800,000

Sumitomo Mitsui
Banking Corporation

700,000--

700,000

450,000--

450,000

450,000--

450,000--

450,000

San ju San Bank, Ltd.

450,000--

450,000

The Higashi-Nippon
Bank, Limited

300,000--

300,000

Subtotal
Sumitomo Mitsui
Banking Corporation

March 3,2017

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

Long-term loans payable

Shinkin Central Bank

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

Nippon Life Insurance
Company
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Dai-ichi Life
Insurance Company,
LimitedFebruary 1,
2019

January 31,
2020

January 29,
2021

January 29,
2021

Hiroshima Bank, Ltd.
The Bank of Yokohama,
Ltd.
Sumitomo Mitsui
Banking Corporation
January 31,
2022
Nippon Life Insurance
Company
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust January 31,
Bank, Limited
2022
Resona Bank, Limited

0.35%

Use

Remarks

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

Lump-sum
0.89% January 31, repayment
Unsecured/(Note 3)(Note 2)2024
onNonguaranteedmaturity

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

Lump-sum
0.54% January 31, repayment
Unsecured/(Note 3)(Note 2)2025
onNonguaranteed
450,000
maturity

500,000-

500,000-

700,000--

700,000

1,000,000--

1,000,000

0.35%

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

500,000--

500,000--

Lump-sum
0.49% January 31, repayment
Unsecured/
500,000(Note 3)(Note 2)2026
onNonguaranteedmaturity
500,000

500,000--

500,000

100,000--

100,000
0.39%

1,000,000--

1,000,000

2,200,000--

2,200,000

400,000--

300,000--- 49 -

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

Lump-sum
0.61% January 31, repayment
Unsecured/
400,000(Note 3)(Note 2)2027
onNonguaranteedmaturity
300,000

Category
LenderUse

Remarks

The Nishi-Nippon City
Bank, Ltd.

300,000--

300,000

Shinkin Central Bank

300,000--

300,000

The Dai-ichi Life
Insurance Company,
Limited

600,000--

600,000

900,000--

900,000

300,000--

Lump-sum
0.61% January 31, repayment(Note 3)(Note 2)2027
onmaturity
300,000

The 77 Bank, Ltd.

100,000--

100,000

San ju San Bank, Ltd.

300,000--

300,000

200,000--

200,000

100,000--

100,000

600,000--

100,000--

100,000

Resona Bank, Limited

500,000--

500,000

Shinkin Central Bank

800,000--

800,000

300,000--

300,000

300,000--

The Dai-ichi Life
Insurance Company,
Limited

300,000--

300,000

The Gunma Bank, Ltd.

250,000--

250,000

250,000--

250,000-

550,000-

550,000-

600,000-

600,000-

400,000-

400,000-

800,000-

Lump-sum
0.72% January 31, repayment
Unsecured/(Note 3)(Note 2)2026
onNonguaranteedmaturity
800,000-

150,000-

150,000-

450,000-

450,000-

1,500,000-

1,500,000-

350,000-

350,000-

250,000-

Hiroshima Bank, Ltd.

-

150,000-

Lump-sum
1.10% January 31, repayment
Unsecured/
250,000(Note 3)(Note 2)2028
onNonguaranteedmaturity
150,000

The 77 Bank, Ltd.

-

300,000-

300,000-

250,000-

250,000-

2,000,000-

2,000,000-

300,000--

250,000-

Hiroshima Bank, Ltd.
The Bank of Fukuoka,
Ltd.

The Higashi-Nippon
Bank, Limited
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation

The Bank of Fukuoka,
Ltd.
The 77 Bank, Ltd.
Long-term loans payable

Balance atIncrease
Decrease
Balance at
Average
beginning ofDrawdown
during period during period end of period interest Repayment Repayment
periodDate(thousands of (thousands of (thousands of
rate
date
method(thousands of
yen)
yen)
yen)
(Note1)yen)

January 31,
2022

March 30,2022

March 30,
2022

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

January 31,
2023

Resona Bank, Limited
The Nishi-Nippon City
Bank, Ltd.

January 31,
2023

SBI Shinsei Bank,
LimitedSumitomo Mitsui
Banking Corporation
Resona Bank, Limited
Shinkin Central Bank

January 31,
2023- 50 -

Unsecured/
Nonguaranteed

Lump-sum
0.54% January 31, repayment
Unsecured/(Note 3)(Note 2)2026
onNonguaranteed
600,000
maturity

Lump-sum
0.82% January 31, repayment
Unsecured/(Note 3)2028
onNonguaranteed
300,000 (Note 2)
maturity

Lump-sum
1.29% January 31, repayment
Unsecured/
300,000(Note 3)(Note 2)2029
onNonguaranteed]maturity
250,000

CategoryLong-term loans payable

LenderBalance atIncrease
Decrease
Balance at
Average
beginning ofDrawdown
during period during period end of period interest Repayment Repayment
periodDate(thousands of (thousands of (thousands of
rate
date
method(thousands of
yen)
yen)
yen)
(Note1)yen)

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

-

350,000-

350,000-

250,000-

250,000-

350,000-

350,000

The Gunma Bank, Ltd.

-

250,000-

250,000

SBI Shinsei Bank,
Limited

-250,000-

250,000

Subtotal

25,400,000

9,750,000

7,250,000

27,900,000

Total

36,650,000

17,500,000

17,000,000

37,150,000

The 77 Bank, Ltd.

January 31,
2023

Use

Remarks

Lump-sum
1.29% January 31, repayment
Unsecured/(Note 3)(Note 2)2029
onNonguaranteedmaturity(Note1) ” Average Interest rates” are the lending rate for each loan agreement, shown rounded up to the second decimal place.
(Note2) The interest rate for this borrowing is, in effect, fixed due to the execution of an interest rate swap agreement. The adjusted interest rate in considerationof swap transactions is stated.
(Note3) The funds are to be used for the acquisition of properties and for the payment of a portion of the related expenses or repayment of existing loans.
(Note4) The following is the amount of long-term loans payable (excluding “Current portion of long-term loans payable”) scheduled to be due for repayment ineach year within five years of the balance sheet date.
(Unit: thousands of yen)
Due after 1 year and Due after 2 year and Due after 3 years and Due after 4 years andwithin 2 years
within 3 years
within 4 years
within 5 years
Long-term loans
payable5,550,000

6,400,000- 51 -

5,900,000

6,050,000