This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

(REIT) Financial Report for Fiscal Period Ended July 2022

Securities Code:Healthcare & Medical Investment
Corporation (HCM)
3455

Representative:

Yuji Fujise, Executive Director

REIT Securities Issuer

September 14, 2022

Stock Exchange Listing: Tokyo Stock Exchange
URL: https://hcm3455.co.jp/en/

Asset Management Company: Healthcare Asset Management Co., Ltd.
Representative:
Seiji Yoshioka, President & CEO
Contact:
Atsumasa Furuya, Head of Finance & Administration Department
TEL: +81-3-5282-2922
Scheduled date of submission of securities report:
Scheduled date of commencement of distribution payment:

October 25, 2022
October 21, 2022

Preparation of supplementary financial results briefing materials: Yes
Holding of financial results briefing session:
Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for Fiscal Period Ended July 2022 (from February 1, 2022, to July 31, 2022)(1) Management Status(% figures are the rate of period-on-period increase (decrease))
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income
million yen%
million yen%
million yen%
million yen%
Ended Jul. 2022
2,371
14.0
1,265
18.0
1,101
20.5
1,100
20.5
Ended Jan. 2022
2,080
0.4
1,072
(0.6)
913
(0.9)
913
(0.9)
Net income per unit

Fiscal period

Return on equity

yen
3,063
2,935

Ended Jul. 2022
Ended Jan. 2022

%
3.1
2.8

Ratio of ordinary income
to total assets
%
1.5
1.3

Ratio of ordinary income
to operating revenue
%
46.4
43.9

(2) Distributions Status
Distribution
per unit

Distribution
per unit

Total
Total
Distribution
Total
Distribution Ratio ofin excess of distributions distributions distributions
payout distributions(including(excluding(including(excluding
earnings perin excess of
distribution in
distribution in distribution in excess
distribution in
ratio
to net assets
unit
earnings
excess of earnings)
of earnings)
excess of earnings) excess of earnings)
yen
3,367
3,244

yen
3,059
2,936

Ended Jul. 2022
Ended Jan. 2022

yen
308
308

million yen
1,210
1,008

million yen
1,099
913

million yen
110
95

%
100.0
100.0

%
2.9
2.8

(Note 1) Total distributions in excess of earnings of 110 million yen (308 yen per unit) for the fiscal period ended July 2022 are comprised of (1) total distribution
amount from reserve for temporary difference adjustment of 0.3 million yen (1 yen per unit ) due to the occurrence of deferred losses on hedges of 0.4
million yen recorded as net asset deduction items for the current fiscal period and (2) total distribution amount of 110 million yen (307 yen per unit)
from distribution reducing unitholders’ capital for tax purposes.
Total distributions in excess of earnings of 95 million yen (308 yen per unit) for the fiscal period ended January 2022 are distribution reducing unitholders’capital for tax purposes.
(Note 2) The ratio of decreasing surplus due to execution of distribution in excess of earnings (distribution reducing unitholders’ capital for tax purposes) was
0.003 for the fiscal period ended July 2022 and 0.003 for the fiscal period ended January 2022. The ratio of decreasing surplus is calculated based on
Article 23, Paragraph 1, Item (v) of the Order for Enforcement of the Corporation Tax Act.
(Note 3) Payout ratio for the fiscal period ended July 2022 is calculated using the following formula since issuance of new Investment units was executed.
Payout ratio = Total distribution (excluding distributions in excess of earnings) / Net income x 100(3) Financial Position
Fiscal period
Ended Jul. 2022
Ended Jan. 2022

Total assets
million yen
80,357
68,778

Net assets
million yen
38,80032,867-1-

Equity ratio
%
48.3
47.8

Net assets per unit
yen
107,930
105,681This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(4)

Status of Cash FlowsNet cashprovided by (used in) operating
activities
million yen
1,729
1,450

Fiscal period

Ended Jul. 2022
Ended Jan. 2022

Net cashprovided by (used in) investing
activities
million yen(12,233)(148)

Net cashCash and cash equivalents at end
provided by (used in) financingof period
activities
million yen
million yen
10,1591,440(1,119)1,784

2. Earnings Forecast for the Fiscal Period Ending January 2023 (from August 1, 2022 to January 31, 2023) and Earnings Forecast for the
Fiscal Period Ending July 2023 (from February 1, 2023 to July 31, 2023)(% figures are the rate of period-on-period increase (decrease))

Fiscal period

Operating revenue

Ending Jan. 2023
Ending Jul. 2023

million yen
2,419
2,419

Operating income% million yen
2.1
1,241
0.0
1,251

Ordinary income% million yen
(1.9)
1,065
0.8
1,064

Distribution perDistribution inunit (excludingexcess of
distribution inearnings per
excess ofunit
earnings)

Net income% million yen
(3.2)
1,064
(0.2)
1,063

(Reference) Forecast net income per unit (fiscal period ending January 2023)
Forecast net income per unit (fiscal period ending July 2023)

%
(3.2)
(0.2)

yen
2,962
2,957

yen
313
312

Distribution
per unit(including
distribution
in excess ofearnings)
yen
3,275
3,269

2,962 yen
2,957 yen

* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement① Changes in accounting policies accompanying amendments to accounting standards, etc.: No② Changes in accounting policies other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatement:No(2) Total Number of Investment Units Issued and Outstanding① Total number of investment units issued and outstanding (including treasury investment units) at end of period
359 500 units
311,001 units
Fiscal period ended July 2022
Fiscal period ended January 2022
② Number of treasury investment units at end of period
Fiscal period ended July 2022
- units(Note)

Fiscal period ended January 2022

- units

For the number of investment units serving as the basis for calculation of net income per unit, please see “Notes on Per Unit Information”
on page 31.

* This financial report is exempt from the audit by a certified public accountant or an auditing firm.
* Special noteThis forecast is a future prospect determined by HCM based on information currently available and includes many uncertain factors.
Actual operating revenue, operating income, ordinary income, net income, distribution per unit (excluding distribution in excess ofearnings), distribution in excess of earnings per unit and distribution per unit (including distribution in excess of earnings) are subject
to change due to changes in circumstances. In addition, the forecast is not a guarantee of the amount of distribution and distribution
in excess of earnings. For the assumptions underlying the above forecast, please see “Assumptions Underlying Earnings Forecast for
Fiscal Period Ending January 2023 and Fiscal Period Ending July 2023” on pages 10 and 11.

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This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Table of Contents
1. Management Status ................................................................................................................................................................ 4(1) Management Status ........................................................................................................................................................ 4
2. Financial Statements ............................................................................................................................................................. 12(1) Balance Sheet ................................................................................................................................................................ 12(2) Statement of Income ..................................................................................................................................................... 14(3) Statement of Unitholders' Equity .................................................................................................................................. 15(4) Statement of Cash Distributions .................................................................................................................................... 17(5) Statement of Cash Flows ............................................................................................................................................... 20(6) Notes on the Going Concern Assumption...................................................................................................................... 21(7) Notes on Matters Concerning Significant Accounting Policies ....................................................................................... 21(8) Notes on Financial Statements ...................................................................................................................................... 22(9) Changes in Total Number of Investment Units Issued and Outstanding ........................................................................ 32
3. Reference Information .......................................................................................................................................................... 34(1) Information on Prices of Assets Under Management, Etc. ............................................................................................ 34(2) Status of Capital Expenditures ....................................................................................................................................... 51-3-

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
1.

Management Status(1) Management Status① Overview of the Current Fiscal Period(a) Brief History of HCM
Healthcare & Medical Investment Corporation (hereinafter, “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 “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).
During the fiscal period ended July 2022 (February 1, 2022 to July 31, 2022) (hereinafter, the “15th fiscal period” or the“current fiscal period”), HCM made a public offering (48,499 units, including third-party allotment in line with thesecondary offering by over-allotment). As a result, the total number of investment units issued and outstanding stands at
359,500 units as of the end of the current fiscal period.
(b) 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 that bears
nursing care continues to shrink while aging advances at the fastest rate among developed nations and the number andpercentage 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 growthof its portfolio.
b. Performance
During the current fiscal period, HCM acquired 6 properties (SOMPO CARE La vie Re Kobeikawadani, SOMPO CARE
Sompo no ie Sayama, Royal Kawaguchi, NOAH GARDEN LEGEND, NOAH GARDEN L Grace and NOAH GARDEN CASA
RICH) on February 1, 2022 at a total acquisition price of 6,248 million yen, and acquired 4 properties (NOAH GARDEN
Season Bell, Heartland Kawaguchi Meiseien, Granda Minamiurawa, and Madoka Minamiurawa) on March 30, 2022 at
a total acquisition price of 5,194 million yen.
As of the end of the current fiscal period, HCM owns 47 properties with a total leasable area of 219,804.68 m2, and theoperational rate stands at 99.9%.
The Japanese economy is expected to remain in a severe situation for some time given the spread of the coronavirus
disease 2019 (COVID-19). Uncertainty still continues in the real estate market, especially around retail facilities and hotels.
However, COVID-19 has had no negative impact on the performance of HCM as of the end of the current fiscal period, as
HCM has generally concluded long-term and fixed-rent lease agreements with the operators of the healthcare facilities it
owns. Moreover, there has been no rent reduction/exemption or deferment of rent payment with the tenants.
Nevertheless, it is unpredictable whether COVID-19 will spread further, and close attention must continue to be paid to
how the situation will evolve going forward.
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. In order to realize the philosophy of HCM,
"A society where all people can live vibrantly and with peace of mind," HAM aims to contribute to the aged society andmaximize unitholder value over the medium to long term by promoting the supply of healthcare facilities as social
infrastructure and building a portfolio specializing in healthcare facilities.
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This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
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(c) 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, in line with the acquisition of the above 10 properties, HCM issued 46,190 new investment
units through public offering with a payment date of February 1, 2022, and issued 2,309 new investment units throughthird-party allotment on March 1, 2022, in line with the public offering.
In addition, HCM borrowed 5,500 million yen on March 30, 2022, to cover part of the acquisition and costs for theabove 10 properties.
As a result, unitholders’ capital (net) (Note) at the end of the current fiscal period stands at 37,711 million yen, the total
number of investment units issued and outstanding at 359,500 units, and total interest-bearing liabilities at 38,650 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 distribution in excess of earnings ofallowance for temporary difference adjustments.

As of the end of the current fiscal period, the ratio of interest-bearing liabilities to total assets (hereinafter, “LTV”) is 48.1%.
HCM’s rating as of July 31, 2022 is as follows.
Rating Agency
Rating Category
Japan Credit Rating
Long-term issuer rating
Agency, Ltd. (JCR)

RatingOutlookA+

Stable(d) Overview of Business Performance and Distributions
As a result of the management described above, for the current fiscal period, operating revenue stood at 2,371 million
yen, operating income at 1,265 million yen, ordinary income at 1,101 million yen and net income at 1,100 million yen.
In accordance with the cash distribution policy described in Article 36, Paragraph 1 of its Articles of Incorporation, HCM
determines that the amount of distribution 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 the Investment Trust Act, it shall distribute 1,099,710,500 yen, which is maximum integral
multiple of 359,500 units issued and outstanding as distributions of earnings. Accordingly, distribution of earnings per unit
was 3,059 yen.
In addition, HCM is to make distribution in excess of earnings, of which amount is to be determined by HCM as an amountequivalent to net asset deduction items (as defined in Article 2, Paragraph 2, Item (30) (b) of the Ordinance on Accountingsof Investment Corporations), considering the impact of net asset deduction items on distribution, pursuant to the policy
for cash distribution in excess of earnings provided in Article 36, Paragraph 2 of its Articles of Incorporation. During thecurrent fiscal period, since deferred losses on hedges of 0.4 million yen was recorded as net asset deduction items, HCM
decided to make distributions of allowance for temporary difference adjustments in the amount of 359,500 yen. As aresult, distributions in excess of earnings per unit (allowance for temporary difference adjustments) came to 1 yen.
Furthermore, in accordance with the policy for cash distribution in excess of earnings provided in Article 36, Paragraph 2of its Articles of Incorporation, HCM is to conduct distribution in excess of earnings (return of capital that falls under the
category of distribution reducing unitholders’ capital for tax purpose) in each period on a continuous basis, as a rule.
During the current fiscal period, HCM decided to distribute 110,366,500 yen, an amount roughly equivalent to 20% ofdepreciation recorded in the current fiscal period, as distribution in excess of earnings. Accordingly, distribution in excessof earnings per unit (of other distribution in excess of earnings from other distributions) came to 307 yen.
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This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
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As a result, distribution per unit came to 3,367 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 distribution, sufficiently taking into consideration the amountof capital expenditures necessary for maintaining and improving the competitiveness of HCM’s assets under management, the financial
position of HCM and other factors.
However, distribution in excess of earnings may be conducted up to an amount lower than the above amount or may not be conductedwhen the implementation of distribution in excess of earnings up to the said amount is judged to be inappropriate based on theeconomic environment surrounding HCM, trends of the real estate market and leasing market, status of HCM’s assets undermanagement 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 distribution in excess of earnings up to an amount equivalent to 60% of the depreciation
recorded on the last day of the accounting period.

➁ Outlook for the Next Fiscal Period(a) Investment Environment
In Japan, while the number of elderly households is increasing, the population that bears nursing care is on the decline,
and provision of nursing care services and medical services at external facilities for a certain percentage of elderly
households is inevitably needed. The expansion of the supply of healthcare facilities, especially facilities and housing forthe 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 super aging and change
of family structure, new development and expansion of healthcare facilities is required to respond to the growing 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, etc. to walk and live safely.
Following this policy, the Ministry of Land, Infrastructure, Transport and Tourism enacted the “Guideline Related to theUtilization of Healthcare REITs Targeting Housing for the Elderly, Etc.” 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 performanceindicator, 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 supporting eachother and the elderly can live with good health and peace of mind.”Note that fiscal 2021 was the year when nursing care fees were revised, as revision occurs once every three years. This
becomes the first revision of nursing care fees since the outbreak of the COVID-19 pandemic.
Regarding the environment surrounding Medical service-related facilities, etc., social welfare costs are escalate to increase
alongside Japan’s aging population, and demand for medical and long-term care services is expected to increase ahead of2025, when the baby boomer generation will be 75 years old or older. Meanwhile, there are significant regional variancesin 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 (Note1).
In Japan, under a regional comprehensive care system, work is underway to build an integrated framework of residences,medical care, nursing care, preventative medicine and lifestyle support suitable for each region so that the elderly cancontinue to live to the end of their lives in the area they are used to in the way they would like, even after they come torequire nursing care.
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Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
The government has further classified the functions of beds in medical institutions in line with the conditions of patients,
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) forplanning a community healthcare vision in prefectures. Prefectures have formulated the community healthcare vision forthe purpose of realizing a system encouraging the effective and efficient allocation of resources commensurate with the
medical functions in each of the national government-designated regions, and providing a higher quality of medical
services in beds appropriate for the condition of patients, from acute to convalescent and chronic 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 promotefunctional differentiation and cooperation between hospitals. Presently, prefectural governments and healthcare
professionals are working together via regional healthcare vision councils and other channels to realize this vision.
Furthermore, the number of hospitals across Japan is estimated to be about 8,200. However, some of these were built 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 to more 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 even from the viewpoint ofstrengthening the national resilience. Therefore, HCM believes that there is a great need among hospitals for funding torebuild 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 for the enhancement
or conversion of medical functions, including multi-use development (Note 4) and reconstruction and expansion ofbuildings due to earthquake resistance, M&A-driven funding procurement and asset sales. Furthermore, HCM believes,hospitals or medical corporations can use real estate investment corporations as a means of liquidating their needs forthe purpose of strengthening financial position, or for a hospital owner’s business succession or inheritance or sale ofhospital real estate.
The market size of hospital real estate in Japan accounts for a majority of the total healthcare facility real estate market,
and the majority of hospital real estate is owned by medical corporations, etc. (Note 5). HCM believes that when hospital
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, opportunities for leveraging realestate investment corporations in hospital real estate will expand further as a method for procuring funds related tohospital management and part of strengthening financial positions.
Therefore, the market for healthcare facilities with a particular emphasis on the keywords “nursing care,” “medical service”
and “health,” which HCM sets as acquisition targets, is believed to further expand in the future.
On the other hand, there are growing concerns about economic deterioration due to the spread of COVID-19. However,HCM believes that its income will not be impacted immediately, as the healthcare facilities it owns are, as a rule, operated
under long-term lease agreements with fixed rents, and the operating status by the operators and their financial conditions
are continuously monitored. Nevertheless, it is unpredictable whether COVID-19 will spread further, and close attention
must be paid to how the situation will evolve going forward.
(Note 1) In the section about 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 and by strengthening cooperation among medical institutions andbetween 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, Etc. " (releasedon December 25, 2017), the ratio of earthquake-resistant paid nursing homes is 96.3%.

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This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Note 3) According to the "Results of the Survey on Seismic Retrofit of Hospitals" (released on August 26, 2022) by the Ministry of Health, Labourand Welfare, the ratio of 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 these surveys, 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 withunknown earthquake resistance.
(Note 4) “Multi-use development” refers to the development of real estate with multiple functions and uses, such as healthcare facilities thatcombine facilities for the elderly, residences, and medical facilities.
(Note 5) Figures are based on preliminary calculations by KPMG Healthcare Japan Co., Ltd.

(b) 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 real estate.
When HCM acquires a healthcare facility, we aim to secure stable income for the medium to long term by, in principle,
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 and financial
conditions of operators, along with real estate due diligence, in order to secure stable revenue over the medium to longterm. 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, etc. 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, etc. 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 for the repayment of interest-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, etc. in the trading price of investment units.
As to debt financing, stable and flexible leverage control will be implemented by diversifying repayment dates and setting
the upper limit of LTV at 65% (which may, however, exceed 65% temporarily). In addition, a stable bank formation will beestablished by receiving financial advice from Sumitomo Mitsui Banking Corporation, one of the sponsors, based on thesponsor support agreement concluded between the bank and the Asset Management Company.
(c) Significant Subsequent Events
Not applicable.

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Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(d) Earnings Forecast Outlook
HCM forecasts the following earnings for the fiscal period ending January 2023 (from August 1, 2022 to January 31, 2023)
and the fiscal period ending July 2023 (from February 1, 2023 to July 31, 2023). For the assumptions underlying this outlook,please see “Assumptions Underlying Earnings Forecast for Fiscal Period Ending January 2023 and Fiscal Period Ending July2023” below.
For the fiscal period ending January 2023 (from August 1, 2022 to January 31, 2023) and the fiscal period ending July 2023
(from February 1, 2023 to July 31, 2023), it is assumed that there is no change in the fair value of interest rate swaps, and
HCM has no plan to present to conduct distribution in excess of earnings of reserve for temporary difference adjustments.
Fiscal period ending January 2023 (from August 1, 2022, to January 31, 2023)
Operating revenue

2,419 million yen

Operating income

1,241 million yen

Ordinary income

1,065 million yen

Net income
Distribution per unit
(excluding distribution in excess of earnings)
Distribution in excess of earnings per unit
Distribution per unit
(including distribution in excess of earnings)

1,064 million yen
2,962 yen
313 yen
3,275 yen

Fiscal period ending July 2023 (from February 1, 2023 to July 31, 2023)
Operating revenue

2,419 million yen

Operating income

1,251 million yen

Ordinary income

1,064 million yen

Net income

1,063 million yen

Distribution per unit
(excluding distribution in excess of earnings)

2,957 yen

Distribution in excess of earnings per unit
Distribution per unit
(including distribution in excess of earnings)(Note)

312 yen3,269 yen

Please note that actual operating revenue, operating income, ordinary income, net income, distribution per unit (excluding distribution inexcess of earnings), distribution in excess of earnings per unit and distribution per unit (including distribution in excess of earnings) may
differ from the forecast figures above as a result of discrepancies from assumptions arising due to additional real estate acquisition or salein the future, trends in the real estate market, fluctuation of interest rates and changes in other situations surrounding HCM, among otherfactors. In addition, the forecast is not a guarantee of the amount of distribution or distribution in excess of earnings.

-9-This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Assumptions Underlying Earnings Forecast for Fiscal Period Ending January 2023 and Fiscal Period Ending July 2023
Item
Accounting period

Assumptions
・・

Fiscal period ending January 2023 (16th FP) (from August 1, 2022, to January 31, 2023) (184 days)
Fiscal period ending July 2023 (17th FP) (from February 1, 2023, to July 31, 2023) (181 days)

・It is assumed that there will be no changes (acquisition of new properties, sale of the assets undermanagement, etc.) in the trust beneficiary interests in real estate (47 properties in total) owned by HCM
as of the date of this document (hereinafter, the “Assets Under Management”) through to the end of the
fiscal period ending July 2023.
There may actually be changes due to acquisition of new properties, or sale of the Assets Under
Management, etc. in the future.
Lease business revenue from Assets Under Management is calculated by considering and analyzing suchfactors as the lease agreement of each Asset Under Management effective as of the date of this document,
tenant trends and market conditions.
It is assumed that there will be no default or non-payment of rents by tenants.
The main breakdown of expenses related to rent business, the major component of operating expense, isas follows.
Fiscal period ending
Fiscal period ending
January 2023
July 2023
Property tax
143 million yen
166 million yen
Repair expenses
39 million yen
29 million yen
Depreciation
561 million yen
559 million yen
Other expenses related to rent business63 million yen
63 million yen

Assets undermanagement
・・
Operatingrevenue・・Out of the expenses related to rent business, the major component of operating expense, expenses otherthan depreciation are calculated based on the past figures and by reflecting factors for change in expenses.
・ In purchasing and selling real estate in general, property tax and city planning tax are calculated on a pro
rata basis with previous owners and settled at the time of acquisition, but as HCM includes this settlementmoney in acquisition cost, they are not recoded as expenses in the year of acquisition. Accordingly,
property tax and city planning tax of the Assets to Be Acquired in the fiscal period ending July 2022 will
not be recorded as expenses in the fiscal period ending January 2023, and such for fiscal 2023 will berecorded as expenses from the fiscal period ending July 2023.
・ For repair expenses, the Asset Management Company records the expenses it deems necessary for each
property in each operating period. However, as repair expenses may increase or decrease, or additional
repair may be required due to unpredictable factors, actual expenses may differ significantly from theforecast.
・ Depreciation is calculated by using the straight-line method including ancillary expenses.
・ The asset management fee paid to the Asset Management Company is assumed to be 233 million yen for
the fiscal period ending January 2023 and 230 million yen for the fiscal period ending July 2023.
・ Investment unit issuance expenses accompanying the issuance of new investment units are depreciatedevenly over 3 years and are assumed to be 5 million yen for the fiscal period ending January 2023 and 5
million yen for the fiscal period ending July 2023.
・ Investment corporation bond issuance costs associated with the issuance of investment corporation bonds
are amortized using the straight-line method over the period up to redemption, and are assumed to be 1
million yen in the fiscal period ending January 2023 and 1 million yen in the fiscal period ending July 2023.
・ Interest expenses, interest expenses on investment corporation bonds and other borrowing-related
expenses are assumed to be 168 million yen for the fiscal period ending January 2023 and 180 million yen
for the fiscal period ending July 2023.
・ As of the date of the document, HCM has a balance of interest-bearing liabilities of 38,650 million yen. It
is assumed that there will be no change in the balance of interest-bearing liabilities at the end of the fiscal
period ending January 2023 and the fiscal period ending July 2023, with an assumption that 9,250 million
yen of loans due for repayment in the fiscal period ending January 2023 (repayment date: January 31,2023) and 2,000 million yen of loans due for repayment in the fiscal period ending July 2023 (repayment
date: March 30, 2023) will be refinanced for the same amount.
・ The total number of investment units issued and outstanding is assumed to be 359,500 units as of the dateof this document, and it is assumed that there will be no change in the number of investment units due toissuance of new investment units, etc. through to the end of the fiscal period ending July 2023.
・ Distribution per unit is calculated based on the forecast number of units issued and outstanding at the endof period of 359,500 units for the fiscal period ending January 2023 and for the fiscal period ending July
2023.
・

OperatingexpensesNon-operating
expenses

Interest-bearing
liabilities

Investment units- 10 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Item
Distribution perunit (excluding
distribution inexcess of
earnings)

Assumptions
・
・

・

・
Distribution inexcess of earnings
per unit

・

・

・
Other
・

Distribution per unit (excluding distribution in excess of earnings) is calculated on the premise of the cash
distribution policy provided in the Articles of Incorporation of HCM.
Distribution per unit (excluding distribution in excess of earnings) may vary due to various factors,
including fluctuation in rent revenue accompanying change in Assets Under Management, change intenants, etc. or incurrence of unexpected repairs.
Distribution in excess of earnings per unit is calculated pursuant to the policies provided in the Articles ofIncorporation of HCM, policies provided below, other applicable laws and regulations, rules of selfregulatory organizations, etc.The total amount of distribution in excess of earnings is assumed to be 112
million yen for the fiscal period ending January 2023 and 112 million yen for the fiscal period ending July2023.
The total amount of distribution in excess of earnings is 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 distribution, sufficiently taking into consideration the amount of capital expenditurenecessary for maintaining and improving the competitiveness of HCM’s Assets Under Management andthe financial position of HCM.
However, distribution 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 distribution in excess of earnings up to thesaid amount is judged to be inappropriate based on the economic environment surrounding HCM, trendsof the real estate market and leasing market, status of HCM’s assets under management and financial
conditions.
For the fiscal period ending January 2023 and the fiscal period ending July 2023, it is assumed that there
is no loss in the fair value of interest rate swaps, and HCM has no plan at present to conduct distribution
in excess of earnings from the reserve for temporary difference adjustments.
The assumption is that there will be no revision of laws and regulations, tax systems, accounting standards,
securities listing regulations set forth by the Tokyo Stock Exchange, rules of The Investment Trusts
Association, Japan, etc. that will impact the forecast figures above.
The assumption is that there will be no unforeseen serious change in general economic trends, real estatemarket conditions, etc.

- 11 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
2.

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

Previous fiscal period(As of Jan. 31, 2022)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Derivatives receivables
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Security deposits
Long-term prepaid expenses
Derivative receivables
Deferred tax assets
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance costs
Investment corporation bond issuance costs
Total deferred assets
Total assets- 12 -

1,689,721
181,881
2,081
125,4552,778
2,001,918

1,311,232
297,360
23,745
121,81241,022910
1,406
1,797,490*1 33,351,590(4,617,889)
28,733,700
96,187(14,208)
81,97819,499(7,049)12,450297,717(88,209)
209,508
37,482,822
5,113
66,525,573*1 39,663,574(5,138,841)
34,524,732
129,916(16,503)
113,413
19,961(8,027)
11,933
350,622(115,778)
234,844
43,387,881
78,272,804

198
198

3,097
3,097

10,000
193,588
30,514
12
234,115
66,759,887

10,000194,79435,30414
240,11478,516,016

16,652
16,652
68,778,458

28,713
15,611
44,32480,357,832

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Previous fiscal period(As of Jan. 31, 2022)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable

62,1909,250,000
104,024
240,609866

Consumption taxes payable(Unit: thousands of yen)
Current fiscal period(As of Jul. 31, 2022)

82,3672,000,000
9,250,000
34,971
247,646913

17,631

5,456

338,838795
1,705
10,016,661

398,493126
895
12,020,870

2,000,000
21,900,000

2,000,000
25,400,000

Tenant leasehold and security deposits

1,865,509

1,921,309

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

86,766
10,47331,99725,894,748

167,616
11,39335,216521
29,536,057

35,911,409

41,556,928

32,480,785

38,323,799*3 (15,501)(516,392)(531,894)
31,948,891*3 (10,586)(612,180)(622,767)
37,701,032

929,041

1,111,161

929,041
32,877,933

1,111,161
38,812,194(10,884)(10,884)*2 32,867,048
68,778,458(11,290)(11,290)*2 38,800,904
80,357,832

Advances received
Deposits received
Derivative liabilities
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term loans payable

Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Allowance for temporary difference
Other deduction from unitholders' capital
Total deduction from unitholders' capital
Unitholders' capital, net
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 13 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(2) Statement of Income(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Operating revenue
Leasing business revenues
Other revenue related to leasing businessTotal operating revenue
Operating expenses
Expenses related to leasing business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations
Property tax
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Insurance income
Reversal of distribution payable
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment unit issuance costs
Amortization of investment corporation bond issuance
costs
Borrowing expenses
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)- 14 -

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

*1 2,069,514*1 10,921
2,080,436*1 2,360,228*1 10,928
2,371,156*1 701,277
200,330
3,430
21,551
4,800
28,45748,051
1,007,899
1,072,537*1 784,089
203,435
3,864
23,4044,800
30,62855,3791,105,602
1,265,553

6
463
469

7
1,566
474
2,048

88,0147,800
6,424

93,992
7,800
5,742

1,040

1,040

55,789159,068
913,938
913,938867
1
868
913,069
15,971
929,041

57,979166,555
1,101,046
1,101,046
914
(2)
911
1,100,134
11,027
1,111,161

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(3) Statement of Unitholders' Equity
Previous fiscal period (from August 1, 2021, to January 31, 2022)(Unit: thousands of yen)

Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’capitalBalance at beginning ofcurrent period
Changes of items during
periodAllowance fortemporarydifference
adjustments

32,480,785

Other deduction Total deduction
from unitholders' from unitholders'
capitalcapital(61,448)(421,848)

Unitholders'
capital, net(483,296)

31,997,489

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

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

45,946

Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
period-45,946(94,544)(48,597)(48,597)*1 32,480,785(15,501)(516,392)(531,894)

31,948,891(Unit: thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus

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

Total net assets

Unappropriatedretained earnings(undisposed loss)

Total surplus

983,103

983,103

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

913,069

913,069

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

32,964,792

4,915

4,915

4,915

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

4,915

4,915

(97,743)

929,041

929,041

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

32,867,048- 15 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Current 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
from
unitholders'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

5,843,014

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

5,752,141*1 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
periodUnappropriatedretainedearnings(undisposed
loss)
929,041

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets

Total surplus

Totalunitholders’equity929,041

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

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- 16 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(4) Statement of Cash Distributions(Unit: yen)
Type
I.

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

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

Unappropriated retained earnings

929,041,635

1,111,161,945

II. Distribution in excess of earnings

95,788,308

110,726,000-

359,500

95,788,308

110,366,500

4,915,566-

4,915,566-

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

1,210,436,500[3,367]
1,099,710,500[2,936]-[3,059]359,500[-][1]

95,788,308

110,366,500

[308]

[307]

11,027,133

11,451,445

Allowance for temporary difference
adjustments
Other deduction from unitholders’ capital
III. Incorporation into unitholders’ capital
Reversal of allowance for temporary
difference adjustments
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- 17 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Calculation method for distributions

In accordance with the cash
distributions policy described in Article
36, Paragraph 1 of its Articles ofIncorporation, HCM determines thatthe amount of distributions shallexceed the amount equivalent to 90%
of its distributable profit as stipulated
in Article 67-15 of the Act on Special
Measures Concerning Taxation, andshall be up to its profits as defined in
Article 136, Paragraph 1 of theInvestment Trust Act. Following thispolicy, HCM has decided that it shall
distribute 913,098,936 yen as the
distributions of earnings, which isroughly the entire amount arrived atafter deducting the reversal of
allowance for temporary difference
adjustments (as defined in Article 2,
Paragraph 2, Item (30) of the
Calculation Rules for Investment
Corporations) from profits as definedin Article 136, Paragraph 1 of theInvestment Trust Act. Accordingly,
distributions of earnings per unit was
2,936 yen.
Furthermore, in accordance with thepolicy for cash distributions in excessof earnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation, HCM is to conduct
distributions in excess of earnings(return of capital that falls under the
category of distributions reducing
unitholders’ capital for tax purposes)
in each period on a continuous basis.
During the current fiscal period, HCM
has decided to distribute 95,788,308
yen, an amount roughly equivalent to
20% of the depreciation recorded in
the current fiscal period, as
distributions in excess of earnings. As aresult, distributions in excess ofearnings per unit (of distributions inexcess of earnings from other
distributions) came to 308 yen.
As a result, distributions per unit came
to 3,244 yen.

- 18 -In accordance with the cash
distributions policy described in Article
36, Paragraph 1 of its Articles ofIncorporation, HCM determines thatthe amount of distributions shallexceed the amount equivalent to 90%
of its distributable profit as stipulated
in Article 67-15 of the Act on Special
Measures Concerning Taxation, andshall be up to its profits as defined in
Article 136, Paragraph 1 of theInvestment Trust Act. Following thispolicy, HCM has decided that, of
profits as defined in Article 136,
Paragraph 1 of the Investment Trusts
Act, it shall distribute 1,099,710,500
yen, which is the maximum integral
multiple to 359,500 units issued andoutstanding as the distributions ofearnings.
Accordingly,
thedistributions of earnings per unit were3,059 yen.
In addition, HCM is to make
distributions in excess of earnings, ofwhich amount is to be determined by
HCM as an amount equivalent to net
asset deduction items (as defined in
Article 2, Paragraph 2, Item (30) (b) of
the Ordinance on Accountings ofInvestment Corporations), considering
the impact of net asset deduction
items on distribution, pursuant to thepolicy for cash distribution in excess ofearnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation. During the current fiscal
period, since deferred losses onhedges of 0.4 million yen was recorded
as net asset deduction items, HCM
decided to make distributions ofallowance for temporary difference
adjustments in the amount of 359,500
yen. As a result, distributions in excessof earnings per unit (allowance fortemporary difference adjustments)
came to 1 yen.
Furthermore, in accordance with thepolicy for cash distributions in excessof earnings provided in Article 36,
Paragraph 2 of its Articles ofIncorporation, HCM is to conduct
distributions in excess of earnings(return of capital that falls under the
category of distributions reducing
unitholders’ capital for tax purposes)
in each period on a continuous basis.
During the current fiscal period, HCM
has decided to distribute 110,366,500
yen, an amount roughly equivalent to
20% of the depreciation recorded in
the current fiscal period, as
distributions in excess of earnings. As aresult, distributions in excess ofearnings per unit (of distributions inexcess of earnings from other
distributions) came to 307 yen.
As a result, distributions per unit came
to 3,367 yen.

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Note 1)

Distribution in excess of earnings is 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 distribution, 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, distribution 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 distribution 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 distribution in excess ofearnings up to an amount equivalent to 60% of the depreciation recorded on the last day of the accounting period.

- 19 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(5) Statement of Cash Flows(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of investment corporation bond issuance
costs
Borrowing expenses
Amortization of investment unit issuance costs
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses

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

913,938
479,758

1,101,046
552,155

1,040

1,040

55,7896,424(6)95,814960(302)

57,9795,742(7)
101,792(21,663)(41,022)(2,883)

Increase (decrease) in operating accounts payable(17,637)

20,177

Increase (decrease) in accounts payable - other
Increase (decrease) in consumption taxes payable
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in deposits received
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Proceeds from tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits
in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Payments into cash and deposits in trust
Proceeds from short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable

4,228
2,135
2,969
(2,524)
4,458
668
(463)
1,547,252
6(96,314)(888)
1,450,055(1,872)(12,175)
5,850
59,654
7,087(668)(1,359)1,830,875
7(100,606)(867)
1,729,408(148,208)-(12,366,585)(3,260)55,800-80,850(148,208)(12,233,196)

7,000,000(7,000,000)(80,850)
2,000,000
3,500,000-(103,748)(59,747)

Borrowing expenses
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 20 --

5,808,558(1,015,814)(1,119,562)
182,284
1,602,552(1,008,033)
10,159,927(343,860)
1,784,836*1 1,784,836*1 1,440,976

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(6) Notes on the Going Concern Assumption
Not applicable.
(7) Notes on Matters Concerning 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 (1) Investment unit issuance expenses
Depreciated evenly over 3 years.
(2) Investment corporation bond issuance costs
Amortized using the straight-line method over the period up to redemption.
3. Standards for revenue and(1) Accounting for property taxes
expense recognition
For property tax, city planning tax, depreciable asset tax, etc. on real estate, etc. owned,
the accounting is that, of the tax amount assessed and determined, the amountcorresponding to the concerned accounting period is expensed as expenses related torent business.
In connection with the acquisition of real estate including trust beneficiary interests inreal estate, the amount equivalent to real property tax, etc. for the initial fiscal year,
which was settled with the seller, is not recorded as expenses but included in the costof acquisition of the concerned real estate, etc. The amount equivalent to property tax
included in the cost of acquisition of real estate was none for the previous fiscal period
and 37,599 thousand yen for the current fiscal period.
(2) Accounting standard for revenue recognition
The following is a description of the major performance obligations related to revenue
arising from contracts with HCM customers and the normal point in time at which such
performance obligations are satisfied (the normal point in time at which revenue isrecognized).
Sale of real estate, etc.
With 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.
4. Method of hedge accounting(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 hedge items
Hedging instrument: Interest rate swap transactions
Hedge 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.
5. Scope of cash and cash
Cash and cash equivalents in the statement of cash flows are comprised of cash on handequivalents as stated in theand cash in trust, demand deposits and deposits in trust, and short-term investments withstatement of cash flows
a 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.

- 21 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
6. Other significant matters serving
as the basis for preparation offinancial statements(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 account item of the balance sheet and thestatement of income.
The following material items for the trust assets recognized in the relevant account item
account are separately listed on the balance sheet.
① Cash and deposits in trust② Buildings in trust; structures in trust; machinery and equipment in trust; tools,
furniture and fixtures in trust; land in trust , Construction in progress in trust③ Tenant leasehold and security deposits in trust(2) Accounting for non- deductible consumption tax
Non-deductible consumption taxes on the acquisition of assets is included in the cost of
acquisition of each asset.

[Additional Information][Provision and Reversal of Allowance for Temporary Difference Adjustments]
Previous fiscal period (from August 1, 2021, to January 31, 2022)
1. Reasons, related assets and amounts of reversal
Due to the decrease of deferred losses on hedges of 4,915 thousand yen by statement of cash distributions from assessmentof fair value of interest rate swap transactions to which hedge accounting is applied, 4,915 thousand yen of reserve fortemporary difference adjustments for elimination of the amount is reversed.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of reserve for temporary difference
adjustments will be reversed.
Current fiscal period (from February 1, 2022, to July 31, 2022)
1. Reasons, related assets and amounts of reversal
Due to arising of deferred losses on hedges (net asset deduction items) by statement of cash distributions from assessment offair value of interest rate swap transactions to which hedge accounting is applied, 359 thousand yen of allowance for temporary
difference adjustments is recorded.
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 reserve for temporary difference
adjustments will be reversed.
(8) Notes on Financial Statements[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 Jan. 31, 2022)
Buildings in trust

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

10,041

10,041*2 Minimum net assets as provided in Article 67, Paragraph 4 of the Investment Trust Act(Unit: thousands of yen)Previous fiscal period(As of Jan. 31, 2022)
50,000*3 Allowance for temporary difference adjustments- 22 -

Current fiscal period(As of Jul. 31, 2022)
50,000This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Previous fiscal period (from August 1, 2021, to January 31, 2022)
1. Reasons, related assets and amounts of reserve(Unit: thousands of yen)
Related assets

ReasonLoss on interestrate swaps
recognized at theend of current
periodDeferred gains orlosses on hedges

Total

InitialamountBalance at Reserved Reversed Balance at
beginning amount in amount in
end ofof current
current
current
current
periodperiodperiodperiod25,68361,448-(45,946)

15,501

25,68361,448-(45,946)

15,501

Reason forreversal
Changes in
the fairvalue ofderivativetransactions-

2. Method of reversal(1) Deferred gains or losses on hedges
Reversal is planned to be made in accordance with the change in fair value of derivative transactions, which are hedge
instruments.
Current fiscal period (from February 1, 2022, to July 31, 2022)
1. Reasons, related assets and amounts of reserve/reversal(Unit: thousands of yen)
Related assets

ReasonLoss on interestrate swaps
recognized at theend of current
periodDeferred gains orlosses on hedges
Total

InitialamountBalance at Reserved Reversed Balance at
beginning amount in amount in
end ofof current current
current
current
periodperiodperiodperiod25,683

15,501-(4,915)

10,586

25,683

15,501-(4,915)

10,586

Reason forreversal
Changes in
the fairvalue ofderivativetransactions-

2. Method of reversal(1) Deferred gains or losses on hedges
Reversal is planned to be made in accordance with the change in fair value of derivative transactions, which are hedge
instruments.

- 23 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
[Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing business(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022
Operating revenue from real estateleasing businessLeasing business revenues
Rent revenue
Other revenue related to leasing business
Other revenue
Total operating revenue from real estateleasing business
B. Operating expenses from real estateleasing business
Expenses related to leasing business
Property tax
Outsourcing expenses
Repair expenses
Insurance expenses

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

A.

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

2,069,514

2,360,228

10,921

10,9282,080,436

2,371,156

142,184
29,283
26,664
8,683

143,989
34,95625,845
10,093

479,559

551,793

14,903

17,410701,277

784,089

1,379,159

1,587,067[Statement of Unitholders’ Equity]*1

Total number of investment units authorized and total number of investment units issued and outstanding
Previous fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022

Total number of investment units
authorized
Total number of investment units
issued and outstanding

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

10,000,000 units

10,000,000 units

311,001 units

359,500 units[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: Aug. 1, 2021
To: Jan. 31, 2022

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

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

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

1,311,232

Cash and cash equivalents

1,784,836

1,440,976(Note)

Restricted deposits in trust refer to deposits in trust reserved for refund of leasehold received from tenants, etc.

- 24 -

297,360(167,616)

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
[Notes on Operating Lease Transactions]Non-cancellable operating leases (as lessor)(Unit: thousands of yen)Previous fiscal period
As of Jan. 31, 2022

Current fiscal period
As of Jul. 31, 2022

Due within 1 year
Due after 1 year

2,771,384
8,910,935

2,752,188
11,830,827

Total

11,682,320

14,583,016[Notes on Financial Instruments]
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
Pursuant to the policy of conducting stable and sound financial management, HCM raises funds for asset acquisition,
repayment of loans, etc. by means of loans from banks, issuance of investment corporation bonds or issuance of new
investment units, etc. As to finance by loans and issuance of investment corporation bonds, HCM pays attention toextending periods, fixing interest rates, diversifying repayment dates and such to secure financial stability and avoid therisk of rise in interest rates in the future.
Derivative transactions shall be limited to those invested 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 acquisition of trust
beneficiary interests in real estate and repayment of debts.
Although loans and investment corporation bonds are exposed to liquidity risks on the repayment or redemption date,the impact of rising market interest rates on the management of HCM is limited through appropriate management of
the ratio of interest-bearing liabilities, and such risks are controlled through diversification of repayment andredemption dates.
Although loans with floating interest rates are exposed to interest rate fluctuation risks, the ratios of loan balances withfloating rates and fixed rates against the entire 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 forthe purpose of hedging interest rate fluctuation risks is conducted pursuant to provisions that stipulate the basic policyof risk management.
Although tenant leasehold and security deposits as well as tenant leasehold and security deposits in trust are deposits
from tenants and are exposed to liquidity risks at the time of refunding upon tenants’ move-outs, HCM controls liquidity
risks by securing liquidity at hand to a certain degree and other measures.
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), etc.
(3) Supplementary explanation to matters concerning fair value, etc. 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.

Matters concerning fair value, etc. of financial instruments
Carrying amount, fair value and difference between the two were as follows. Notes to "Cash and deposits","Cash and deposits
in trust" and " short-term loan " have been omitted because their fair values approximate their book values. This is due totheir nature as cash and as accounts settled over the short term. In addition, "Tenant leasehold and security deposits,""Tenant leasehold and security deposits in trust," "Accounts payable - other," "Operating accounts payable," "Accrued
expenses," "Security deposits," and "Operating accounts receivable" are immaterial and have been omitted.

- 25 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Previous fiscal period (from August 1, 2021, to January 31, 2022)(Unit: thousands of yen)
Carrying amount

Fair value

Amount of difference(1) Current portion of long-term loans payable

9,250,000

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

2,000,000

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

21,900,000

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

33,139,114(10,885)

(410)

(410)

-

Total liabilities(4) Derivative transactions

Current fiscal period (from February 1, 2022, to July 31, 2022)(Unit: thousands of yen)
Carrying amount

Fair value

Amount of 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) Derivatives 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 a reasonableapproximation of the fair value as there are no significant changes in HCM’s credit standing after borrowing; therefore, the book value is usedas 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 rate 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 Japan Securities Dealers Association.
(4) Derivative transactions
Please refer to “Notes on Derivative Transactions” below.
(Note 2) Amount of repayment of loans and other interest-bearing liabilities scheduled to be due after the account closing datePrevious fiscal period (As of January 31, 2022)

Investment
corporationbonds
Long-term loans
payableTotal(Unit: thousands of yen)
Due after 1 year Due after 2 years Due after 3 years Due after 4 years
Due after
Due within 1 year
and within 2 years and within 3 years and within 4 years and within 5 years
5 years

-

-

-

-

-

2,000,000

9,250,000

7,250,000

5,550,000

3,200,000

5,900,000-

9,250,000

7,250,000

5,550,000

3,200,000

5,900,000

2,000,000- 26 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Current fiscal period (As of July 31, 2022)

Investment
corporationbonds
Long-term loans
payableTotal(Unit: thousands of yen)
Due after 1 year Due after 2 years Due after 3 years Due after 4 years
Due after
Due within 1 year
and within 2 years and within 3 years and within 4 years and within 5 years
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[Notes on Securities]
Previous fiscal period (As of January 31, 2022)
Not applicable.
Current fiscal period (As of July 31, 2022)
Not applicable.
[Notes on Derivative Transactions]
1. Derivative transactions to which hedge accounting is not applied
Previous fiscal period (As of January 31, 2022)
Not applicable.
Current fiscal period (As of July 31, 2022)
Not applicable.
2. Derivative transactions to which hedge accounting is applied
The following table shows the contracted amount or principal amount equivalent or the like set forth in the contract as of
the balance sheet date for each hedge accounting method.
Previous fiscal period (As of January 31, 2022)
Method ofhedge
accounting
Principle
accounting
methodSpecialtreatment forinterest rate
swaps

Derivative
Instruments
Interest rate swap
transaction
Floating receivable;
fixed payable
Interest rate swap
transaction
Floating receivable;
fixed payable(Unit: thousands of yen)

Hedged item

Due after 1
year

Fair value

Calculation method
for the fair value

Based on the pricepresented by(410)
corresponding
financial institutions

Long-term loans
payable27,300,000

19,300,000

Long-term loans
payable1,000,000

1,000,000(Note)-

28,300,000

20,300,000

(410)

-

Total
(Note)

Contract amount, etc.

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

- 27 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Current fiscal period (As of July 31, 2022)
Method ofhedge
accounting
Principle
accounting
methodSpecialtreatment forinterest rate
swaps

Derivative
Instruments
Interest rate swap
transaction
Floating receivable;
fixed payable
Interest rate swap
transaction
Floating receivable;
fixed payable(Unit: thousands of yen)
Hedged item

Due after 1
year

Fair value

Method ofcalculation for thefair value

Long-term loans
payable30,800,000

22,800,000102

Based on the pricepresented bycorrespondent
financial institutions

Long-term loans
payable1,000,000

1,000,000(Note)-

31,800,000

23,800,000

(102)

-

Total
(Note)

Contract amount, etc.

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

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

Current fiscal period
As of Jul. 31, 2022

Deferred tax assets
12

14

Deferred gains or losses on hedges

10,603

11,360Subtotal deferred tax assets

10,615

11,375

Valuation allowance(10,603)(11,360)12

14(10,473)(11,393)(10,461)(11,378)

Non-deductible accrued enterprise tax

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 Jan. 31, 2022
Statutory tax rate
[Adjustments]
Deductible distributions payable
Other
Effective income tax rate

31.46

31.46

(31.43)(0.03)
0.00(31.43)0.05
0.08[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method, Etc.]
Previous fiscal period (As of January 31, 2022)- 28 -

Current fiscal period
As of Jul. 31, 2022

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Not applicable.
Current fiscal period (As of July 31, 2022)
Not applicable.
[Notes on Related-Party Transactions]
1.

Parent company, major corporate unitholders, etc.
Previous fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
Current fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.

2.

Affiliated company, etc.
Previous fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
Current fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.

3.

Fellow subsidiary, etc.
Previous fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
Current fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.

4.

Director, major individual unitholder, etc.
Previous fiscal period (from August 1, 2021, to January 31, 2022)
Not applicable.
Current fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.

[Notes on Asset Retirement Obligations]
Previous fiscal period (As of January 31, 2022)
Not applicable.
Current fiscal period (As of July 31, 2022)
Not applicable.
[Investment and Leasing Properties]
HCM owns healthcare facilities (47 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: Aug. 1, 2021
To: Jan. 31, 2022

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

Carrying amount
Balance at beginning of period
Amount of increase (decrease)during period- 29 -

66,877,828

66,525,573(352,254)

11,747,231

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Previous fiscal period
From: Aug. 1, 2021
To: Jan. 31, 2022
Balance at end of period
Fair value at end of period

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

66,525,573

78,272,804

73,485,000

86,364,000(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 decrease is mainly attributable to depreciation(479,559 thousand yen). Out of the amount of increase (decrease) during the current fiscal period, the amount of increase is mainly
attributable to acquisition (12,192,953 thousand yen). The amount of decrease is mainly attributable to depreciation (551,793 thousandyen).
(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 August 1, 2021, to January 31, 2022)
Information has been omitted due to the immateriality of the eligible revenue.
Current fiscal period (from February 1, 2022, to July 31, 2022)
Information has been omitted due to the immateriality of the eligible revenue.
[Segment Information]
1.

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

2.

Related information

Previous fiscal period (from August 1, 2021, to January 31, 2022)(1) Information on products and services
Disclosure has been omitted because net sales to external customers for a single products and services category
exceeds 90% of operating revenue on the statement of income.
(2) Information on geographic areas
1) Operating revenues

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 Japanexceeds 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.

- 30 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Current 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
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 Japanexceeds 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: Aug. 1, 2021
To: Jan. 31, 2022

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

Net assets per unit

105,681 yen

107,930 yen

Net income per unit

2,935 yen

3,063 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 ofyen)
Net income attributable to common investment units(thousands of yen)
Average number of investment units during period (units)[Notes on Significant Subsequent Events]
Not applicable.

- 31 -

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

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

913,069

1,100,134--

913,069

1,100,134

311,001

359,142This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(9) Changes in Total Number of Investment Units Issued and Outstanding
The following are changes in total number of investment units issued and outstanding and unitholders’ capital over the mostrecent five years up to the end of the current fiscal period.
Date

Notes

Total number of investment
units issued and outstanding(units)Increase(Decrease)

February 1, 2019
February 27, 2019

April 19, 2019

October 18, 2019

April 21, 2020

October 21, 2020

April 21, 2021

October 21, 2021

February 1, 2022
March 1, 2022

April 21, 2022

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

BalanceUnitholders’ capital(millions of yen)
Increase(Decrease)

BalanceUnitholders' capital (net)(millions of yen) (Note 1)
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)-

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)(Note 1) The figure indicates the amount obtained by subtracting deduction from unitholders’ capital from unitholders’ capital. The amount does nottake into account the change in unitholders’ capital in line with the implementation of distribution in excess of earnings of reserve fortemporary difference adjustments.
(Note 2) New investment units were issued through public offering with an 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 a 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 distribution in excess of earnings (return of capital that
falls under the category of distribution reducing unitholders’ capital for tax purposes) at 326 yen per unit as cash distribution 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 distribution in excess of earnings (return of capitalthat falls under the category of distribution reducing unitholders’ capital for tax purposes) at 280 yen per unit as cash distribution 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 distribution in excess of earnings (return of capital that
falls under the category of distribution reducing unitholders’ capital for tax purposes) at 285 yen per unit as cash distribution 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 distribution in excess of earnings (return of capitalthat falls under the category of distribution reducing unitholders’ capital for tax purposes) at 289 yen per unit as cash distribution 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 distribution in excess of earnings (return of capital that
falls under the category of distribution reducing unitholders’ capital for tax purposes) at 300 yen per unit as cash distribution for the 12th
fiscal period (fiscal period ended January 2021), and started the payout on April 21, 2021.

- 32 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Note 9) HCM resolved at the Board of Directors’ meeting held on September 14, 2021, to set cash distribution in excess of earnings (return of capitalthat falls under the category of distribution reducing unitholders’ capital for tax purposes) at 304 yen per unit as cash distribution 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 capitalthat 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.

- 33 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

3.

Reference Information(1) Information on Prices of Assets Under Management, Etc.
① Investment Status

Asset type

Asset use

Area

Trust beneficiary Homes andPaid nursing
interests in real facilities for the homeestateelderly

Servicedhousing for theelderly

Three Major
Metropolitan Areas(Note 3)Current fiscal period(as of July 31, 2022)
Total amount owned
As a percentage of total(millions of yen)assets(Note 1)(%)
(Note 2)
48,94060.9Core Cities (Note 4)

8,011

10.0

Other Areas (Note 5)

1,668

2.1

Three Major
Metropolitan Areas(Note 3)

2,993

3.7

Core Cities (Note 4)

1,715

2.1

Other Areas (Note 5)

-

-

-

-

-

-

63,32978.8

Three Major
Metropolitan Areas(Note 3)--

Core Cities (Note 4)

2,084

2.6

Other Areas (Note 5)--Group homes for the elderly withdementia
Other facilities for the elderly
Subtotal
Medical service-related facilities

Multi-use
facilities

Complex of
paid nursing
homes,medical
service related
facilities

Subtotal

2,084

2.6

Three Major
Metropolitan Areas(Note 3)

12,85816.0Core Cities (Note 4)--

Other Areas (Note 5)--

12,85816.0--

78,272

97.4

Subtotal
Other
Total
Deposits and other assets

2,085

2.6

Total assets

80,357100.0

Total liabilities

41,556

51.7

Total net assets

38,80048.3(Note 1) “Total amount owned” is the carrying amount (in the case of trust beneficiary interests in real estate, the book value after depreciation andamortization).
(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. Regionalcore cities refers to cities 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.

- 34 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
② Investment Assets(a) Major Investment Securities
Not applicable.
(b) Investment Real Estate Properties
Not applicable.
(c) Other Major Investment Assets
a. Overview of Real Estate in Trust
Overview of trust beneficiary interests in real estate (hereinafter, “real estate in trust”) that HCM owns as of July 31, 2022, is
as follows.
(i) Acquisition prices, etc. and shares of investment
Overview of trust beneficiary interests in real estate that HCM owns as of July 31, 2022, is as follows.
Type ofspecified
asset

Area

Acquisition price(millions of yen)
(Note 1)

Property name

824

1.0

807

997

724

0.9

706

818

Bonsejour Musashi-shinjo

582

0.7

568

643

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

728

0.9

688

850

ASHEIM Hikarigaoka

1,385

1.8

1,402

1,560

ASHEIM Bunkyohakusan

1,430

1.8

1,400

1,750

3,580

4.6

3,347

4,050

3,050

3.9

2,957

3,400

1,740

2.2

1,842

2,050

824

1.0

812

886

Granda Tsuruma-Yamato

1,000

1.3

1,032

1,060

Smiling Home Medice Adachi

2,253

2.9

2,293

2,500

Hanakotoba Minami

1,071

1.4

1,079

1,240

Hanakotoba Miura

Bonsejour Yotsugi

615

0.8

656

668

SOMPO CARE La vie Re HamaKawasaki

1,710

2.2

1,706

1,810

Hanakotoba Shin-Yokohama

2,071

2.6

2,105

2,400

Hanakotoba Shin-Yokohama II

375

0.5

395

383

Hanakotoba Odawara

880

1.1

897

946

Sunny Life Kita-Shinagawa

1,825

2.3

1,848

2,040

Sunny Life Kamakura

1,418

1.8

1,474

1,620

Nichii Home Nishikokubunji

720

0.9

753

760

Royal Kawaguchi

1,260

1.6

1,321

1,310

Heartland Kawaguchi Meiseien

2,000

2.5

2,078

2,180

Granda Minamiurawa

1,022

1.3

1,073

1,100

Madoka Minamiurawa

822

1.0

859

883

33,90943.2

34,10837,904

1,950

2.5

1,895

2,100

1,930

2.5

1,837

2,250

1,200

1.5

1,155

1,390

514

0.7

492

557

4,320

5.5

4,140

4,540

Subtotal

Kinki Area

Period-end
appraisal value(millions of yen)
(Note 4)

Bonsejour Chitose-funabashi

GOOD TIME HOME Fudo-mae

Trustbeneficiaryinterests inreal estate

Carrying amount(millions of yen)
(Note 3)

Bonsejour Hino

SOMPO CARE La vie Re
Machidaonoji
SOMPO CARE La vie Re
AzaminoTokyo
Metropolitan
Area

Share ofinvestment(%)(Note 2)AQUAMARINE
Nishinomiyahama
SOMPO CARE Sompo no ie S
Awajiekimae
SOMPO CARE Sompo no ie S
Kobekamisawa
Medical Home Bonsejour
Itami
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)- 35 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Type ofspecified
asset

Area

Property nameAcquisition price(millions of yen)
(Note 1)

GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
SHIP Senri Building
Kinki Area

Chubu Area

Trust
beneficiaryinterests inreal estate

SOMPO CARE La vie Re
Kobeikawadani
SOMPO CARE Sompo no ie
SayamaPeriod-end
appraisal value(millions of yen)
(Note 4)

4,150

5.3

4,151

4,500

930

1.2

912

995

12,92016.5

12,858

14,200

1,288

1.6

1,361

1,300

600

0.8

660

647

Subtotal

29,80238.0

29,46732,479

1,270

1.6

1,217

1,450

Subtotal

1,270

1.6

1,217

1,450

SAWAYAKA Tachibanakan

1,520

1.9

1,325

1,580

SAWAYAKA Mekarikan

1,380

1.8

1,220

1,450

770

1.0

764

860

Verde Minowa

1,620

2.1

1,646

1,700

Niigata Rehabilitation Hospital

2,060

2.6

2,084

2,300

NOAH GARDEN LEGEND

859

1.1

918

910

NOAH GARDEN L Grace

622

0.8

664

660

NOAH GARDEN Season Bell

1,350

1.7

1,472

1,520

NOAH GARDEN CASA RICH

1,619

2.1

1,715

1,730

11,80015.0

11,811

12,710

390

0.5

358

391

1,328

1.7

1,310

1,430

1,718

2.2

1,668

1,821

78,499100.0

78,27286,364

Subtotal
SAWAYAKA Tagawakan
Other Areas

Carrying amount(millions of yen)
(Note 3)

Medical Rehabilitation Home
Bonsejour Komaki

AIKOEN ICHIBANKAN Building

Core Cities

Share ofinvestment(%)(Note 2)

Verde Hotaka
Subtotal

Total (47 properties)(Note 1) “Acquisition price” does not include acquisition-related expenses, property tax, city planning tax, consumption tax and local
consumption tax.
(Note 2) “Share of investment” refers to the acquisition price of each property as a percentage of the total acquisition price, and the figures arerounded to one decimal place.
(Note 3) “Carrying amount” indicates book value after depreciation and amortization as of July 31, 2022.
(Note 4) “Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of July 31, 2022, prepared by realestate appraisers of Japan Real Estate Institute, The Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd., Daiwa Real
Estate Appraisal Co., Ltd. and JLL Morii Valuation & Advisory K.K., based on the Articles of Incorporation of HCM and the rules set by theInvestment Trusts Association, Japan.

- 36 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(ii) Buildings and their leasing status
The annual rent and tenant leasehold and security deposits of each property are not disclosed as consent from the tenants
has not been obtained. The total annual rent from real estate in trust owned by HCM as of July 31, 2022, is 4,919 million
yen (Note).
(Note) The amount is obtained by multiplying the total of monthly rent in lease agreements effective as of July 31, 2022, by 12 (including
tax, etc.), and is rounded down to the nearest million yen.
Structure/ No. ofConstruction
Property
floorscompletion
name(Note 1)
(Note 2)
Paid nursing
AQUAMARINE
RC/5F
May 18, 2007
home-1
Nishinomiyahama
Paid nursing
Bonsejour
RC/B1 6F
Mar. 8, 1988
home-2
Chitose-funabashi
Paid nursing
Bonsejour Hino
RC/3F
May 2, 1990
home-3
Paid nursing
Bonsejour
RC/4F
Feb. 21, 1985
home-4
Musashi-shinjo
MedicalPaid nursing
Rehabilitation
RC/5F
Jul. 17, 1991
home-5Home Bonsejour
Hadanoshibusawa
MedicalPaid nursing
Rehabilitation
SRC RC S/10F
Mar. 13, 1991
home-6
Home Bonsejour
Komaki
Paid nursing
ASHEIM
RC/3F
Mar. 6, 2006
home-7
Hikarigaoka
Paid nursing
ASHEIM
RC/8F
Feb. 27, 2007
home-8
Bunkyohakusan
SOMPO CARE La
Paid nursingvie ReRC/B1 6F
Oct. 29, 2007
home-9Machidaonoji
Paid nursing
SOMPO CARE La
RC/B1 5F
Mar. 1, 2004
home-10vie Re Azamino
Paid nursing
SAWAYAKA
RC/B1 6F
Oct. 31, 2005
home-11
Tachibanakan
Paid nursing
SAWAYAKA
RC/4F
Nov. 15, 2005
home-12
Mekarikan
Paid nursing
SAWAYAKA
RC/3F
Jan. 20, 2006
home-13
Tagawakan
Paid nursing
GOOD TIME
RC/B1 5F
Mar. 18, 1992
home-14
HOME Fudo-mae
Paid nursing
Bonsejour Yotsugi
RC/5F
Mar. 28, 1989
home-15
SRC/11F
Paid nursing
Medical Home
(exclusivelyMar. 3, 1989
home-16
Bonsejour Itami
owned portion)
Kobe Gakuentoshi
Paid nursing
Building (Hapine
RC/B1 9F
Jan. 7, 2009home-17
Kobe
Gakuentoshi)
Paid nursing
GreenLifeS RC/9F
Sep. 6, 2006
home-18
Moriguchi
Paid nursing
Hapine Kobe
S/B1 4F
Mar. 31, 2010
home-19
Uozaki Nibankan
Paid nursing
Granda TsurumaRC S/5F
Mar. 6, 1998
home-20
YamatoPaid nursing
Smiling Home
RC/4F
Nov. 16, 2005
home-21
Medice Adachi
AIKOEN
Paid nursing
ICHIBANKAN
S/5F
Feb. 4, 2010
home-22
Building
Paid nursing
Hanakotoba
RC/7F
Feb. 24, 2010
home-23
Minami
Paid nursing
Hanakotoba Miura
RC/4F
Jun. 27, 2007
home-24
SOMPO CARE La
RC/4F
Paid nursingvie Re Hama(exclusivelyMar. 8, 2007
home-25
Kawasakiowned portion)
Paid nursing
Hanakotoba ShinRC/9F
Mar. 15, 2004
home-26
Yokohama
Paid nursing
Hanakotoba ShinRC/B1 7F
Apr. 25, 2007
home-27
Yokohama II
Paid nursing
Hanakotoba
RC/4F
Sep. 16, 2009home-28
OdawaraPaid nursing①S/5F①Nov. 20, 2003
Verde Minowa
home-29②S RC/8F②Feb. 28, 1974
Property
number- 37 -

leasable area(m2)
(Note 3)

Leased area(m2)
(Note 4)

No. of tenants(companies)(Note 5)

Operational
rate (%)(Note 6)

5,274.54

5,274.542

100.0

2,342.17

2,342.171

100.0

1,984.17

1,984.171

100.0

1,710.43

1,710.431

100.0

3,435.79

3,435.791

100.0

8,858.49

8,858.491

100.0

3,628.60

3,628.601

100.0

2,507.25

2,507.252

100.0

7,720.17

7,720.171

100.0

5,789.25

5,789.25

1

100.0

5,652.94

5,652.941

100.0

4,720.46

4,720.461

100.0

2,366.20

2,366.201100.0

3,400.20

3,400.20

1

100.0

1,962.89

1,962.891

100.0

2,129.87

2,129.87

1

100.0

12,636.48

12,636.48

1

100.0

8,356.85

8,356.851

100.0

1,772.89

1,772.891

100.0

3,427.08

3,427.081

100.0

3,870.98

3,870.982

100.0

4,311.20

4,125.973

95.7

1,710.68

1,710.68

1

100.0

1,959.64

1,959.641

100.0

4,060.21

4,060.215

100.0

5,230.23

5,230.231

100.0

1,837.29

1,837.291

100.0

2,203.42

2,203.42

1

100.0

11,098.17

11,098.17

1

100.0

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Property
number
Paid nursing
home-30
Paid nursing
home-31
Paid nursing
home-32
Paid nursing
home-33
Paid nursing
home-34
Paid nursing
home-35
Paid nursing
home-36
Paid nursing
home-37
Paid nursing
home-38
Paid nursing
home-39

Property
name
Verde Hotaka
Sunny Life KitaShinagawa
Sunny Life
Kamakura
Nichii Home
Nishikokubunji
SOMPO CARE La
vie ReKobeikawadani
SOMPO CARE
Sompo no ie
Sayamaleasable area(m2)
(Note 3)

Leased area(m2)
(Note 4)

No. of tenants(companies)(Note 5)

Operational
rate (%)(Note 6)

6,352.86

6,352.86

1

100.0

S/3F

Sep. 20, 2018

2,135.54

2,135.54

1

100.0

S/5F

Sep. 19, 2014

3,817.91

3,817.91

1

100.0

S/3F

Sep. 29, 1990

1,559.99

1,559.99

1

100.0

RC S/4F

Apr. 24, 2009

3,824.54

3,824.54

1

100.0

S/3F

Aug. 15, 2005

1,997.87

1,997.87

1

100.0

RC/3F

Oct. 1, 2008

3,484.02

3,484.02

1

100.0

RC/4F

Oct. 10, 2015

2,736.89

2,736.89

1

100.0

RC/4F

Oct. 27, 2017

2,075.25

2,075.25

1

100.0

RC/5F

Dec. 10, 2019

4,602.26

4,602.26

1

100.0

RC/6F

Jan. 30, 2006

3,885.90

3,885.90

1

100.0

S/3F

Jul. 15, 2011

2,373.25

2,373.25

1

100.0

S/3F

Apr. 11, 2005

1,918.98

1,918.98

1

100.0

RC/12F

Jun. 12, 2009

5,745.15

5,745.15

1

100.0

S/9F

Jun. 11, 2009

4,058.35

4,058.35

1

100.0

RC/5F

Mar. 27, 2015

4,986.98

4.986.98

1

100.0①RC/3F②S/5F①Apr. 20, 1990
②Feb. 28, 2001

13,476.55

13,476.55

1

100.0

RC/B1 11F

Sep. 5, 2008

24,813.85

24,813.85

1

100.0

-

-

219,804.68

219,619.45

56

99.9

Royal Kawaguchi

NOAH GARDEN
LEGENDNOAH GARDEN L
Grace
NOAH GARDEN
Season BellHeartland
Paid nursing
Kawaguchi
home-40
Meiseien
Paid nursing
Grandahome-41
Minamiurawa
Paid nursing
Madokahome-42
Minamiurawa
SOMPO CARE
Serviced housing
Sompo no ie S
for the elderly -1
Awajiekimae
SOMPO CARE
Serviced housing
Sompo no ie S
for the elderly -2
Kobekamisawa
Serviced housing NOAH GARDEN
for the elderly -3 CASA RICH
Niigata
Medical serviceRehabilitation
related facilities-1
HospitalComplex of paid
nursinghomes,medical SHIP Senri Building
service related
facilities,etc.-1
Total(Note 1)

Structure/ No. ofConstruction
floorscompletion(Note 1)
(Note 2)
①S SRC/5F①Sep. 29, 1982
②S/2F
②Jul. 1, 1989

“Structure/No. of floors” indicates information provided in the real estate registry of the building of each owned asset. “S” refers
to steel structure, “RC” refers to reinforced concrete structure, “SRC” refers to steel-reinforced concrete structure, “B” refers tobasement floor and “F” refers to floors above ground.

(Note 2)

“Construction completion” indicates the date of new construction provided in the real estate registry of the building of each

(Note 3)

“Leasable area” indicates figures based on the lease agreement of each building.

(Note 4)

“Leased area” indicates the areas out of the leasable area for which actual lease agreements have been concluded and are leased.

(Note 5)

“No. of tenants” indicates the number of tenants of each building based on the lease agreements. For the section of healthcare

owned asset.

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 master lease agreement where rents from end tenants are received intact, in principle,
the total number of end tenants is indicated as the number of tenants. However, for the sections that are not subject to the leaseagreement (master lease agreement) between the trustee and HCM, the number of lessees leasing a building from the trustee iscounted as the number of tenants and indicated accordingly.
(Note 6)

”Operational rate” indicates the leased area as a percentage of the leasable area of each owned asset as of July 31, 2022, and isrounded to one decimal place.

- 38 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(iii) Overview of homes and facilities for the elderly
Property number
Paid nursing
home-1
Paid nursing
home-2
Paid nursing
home-3
Paid nursing
home-4
Paid nursing
home-5
Paid nursing
home-6
Paid nursing
home-7
Paid nursing
home-8Paid nursing
home-9Paid nursing
home-10
Paid nursing
home-11
Paid nursing
home-12Paid nursing
home-13
Paid nursing
home-14
Paid nursing
home-15
Paid nursing
home-16
Paid nursing
home-17
Paid nursing
home-18
Paid nursing
home-19
Paid nursing
home-20

Property name
AQUAMARINE
Nishinomiyahama
Bonsejour Chitosefunabashi
Bonsejour Hino
Bonsejour Musashishinjo
Medical Rehabilitation
Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation
Home Bonsejour
KomakiASHEIM Hikarigaoka
ASHEIM
Bunkyohakusan
SOMPO CARE La vie
Re Machidaonoji
SOMPO CARE La vie
Re Azamino
SAWAYAKA
Tachibanakan

Type of facility

Paid nursing home
Paid nursing home
Paid nursing home
Paid nursing home

No. ofresidents(persons)(Note 1)

Occupancy
rate(%)(Note 2)

90

100

99

99.0

July 1, 2022

42

47

37

78.7

May 1, 2022

56

58

50

86.2

May 1, 2022

46

49

45

91.8

June 1, 2022

Benesse Style
Care Co., Ltd.

100

101

88

87.1

April 1, 2022

Residential typepaid nursing home

Benesse Style
Care Co., Ltd.

124

165

130

78.8

April 1, 2022

83

89

81

91.0

April 1, 2022

50

52

43

82.7

April 1, 2022

163

169

114

67.5

April 1, 2022

145

145

144

99.3

June 1, 2022

104

104

99

95.2

April 1, 2022

95

95

77

81.1

April 1, 2022

60

60

58

96.7

April 1, 2022

61

67

58

86.6

October 1, 2021

61

65

53

81.5

April 1, 2022

62

64

53

82.8

April 1, 2022

131

138

128

92.8

July 1, 2022

155

189

189

100.0

August 12, 2022

47

47

45

95.7

August 1, 2022

73

90

69

76.7

May 1, 2022

82

82

77

93.9

June 1, 2022

90

90

82

91.1

May 1, 2022

Paid nursing home
Paid nursing home
Paid nursing home
Paid nursing home
Paid nursing home

Paid nursing home
Paid nursing home

Bonsejour Yotsugi

Paid nursing home

Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building (Hapine Kobe
Gakuentoshi)

Residential typepaid nursing home

GreenLife Moriguchi

Paid nursing home

Hapine Kobe Uozaki
Nibankan
Granda TsurumaYamato

GREEN LIFE Co.,Ltd.
Benesse Style
Care Co., Ltd.
Benesse Style
Care Co., Ltd.
Benesse Style
Care Co., Ltd.

Capacity(persons)(Note 1)

Paid nursing home

SAWAYAKA Mekarikan Paid nursing home
SAWAYAKA
Tagawakan
GOOD TIME HOME
Fudo-mae

Operator

Preparation date of
Property DisclosureStatement ofImportant Matters(Note 3)

No. ofrooms(rooms)(Note 1)

Paid nursing home

Paid nursing home
Paid nursing home

AS PARTNERS
Co., Ltd.
AS PARTNERS
Co., Ltd.
Sompo CareInc.
Sompo CareInc.
Sawayaka Club
Co., Ltd.
Sawayaka Club
Co., Ltd.
Sawayaka Club
Co., Ltd.
JAPAN
LIFEDESIGN Inc.
Benesse Style
Care Co., Ltd.
Benesse Style
Care Co., Ltd.
GREEN LIFE Co.,Ltd.
GREEN LIFE Co.,Ltd.
GREEN LIFE Co.,Ltd.
Benesse Style
Care Co., Ltd.
GREEN LIFEHIGASHINIHON Co., Ltd.
MedicalCorporation
AIKOKAI

Paid nursing
home-21

Smiling Home Medice
Adachi

Paid nursing home

Paid nursing
home-22

AIKOEN ICHIBANKAN
Building

Paid nursing home

Hanakotoba Minami

Paid nursing home

Proud Life Inc.

51

51

46

90.2

May 1, 2022

Hanakotoba Miura

Paid nursing home

Proud Life Inc.

53

54

46

85.2

May 1, 2022

Paid nursing
home-25

SOMPO CARE La vie
Re Hama-Kawasaki

Paid nursing home

Sompo Care
Inc.

58

58

52

89.7

April 1, 2022

Paid nursing
home-26
Paid nursing
home-27
Paid nursing
home-28
Paid nursing
home-29
Paid nursing
home-30
Paid nursing
home-31
Paid nursing
home-32

Hanakotoba ShinYokohama
Hanakotoba ShinYokohama II

Paid nursing home

Proud Life Inc.

136

136

118

86.8

April 1, 2022

Paid nursing home

Proud Life Inc.

29

30

29

96.7

April 1, 2022

Hanakotoba Odawara

Paid nursing home

Proud Life Inc.

60

65

63

96.9

November 1, 2022

Verde Minowa

Paid nursing home

174

206

193

93.7

March 1, 2022

Verde Hotaka

Paid nursing home

121

174

172

98.9

April 1, 2022

Sunny Life KitaShinagawa

Paid nursing home

66

66

59

89.4

April 1, 2022

128

128

114

89.1

July 1, 2022

Paid nursing
home-23
Paid nursing
home-24

Sunny Life Kamakura

Residential typepaid nursing home

Verde
Corporation
Verde
Corporation
Kawashima
Corporation
Kawashima
Corporation- 39 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

Property number

Property name

Type of facility

Operator
Nichii
Carepalace
Company
Sompo CareInc.
Sompo CareInc.
SENIOR LIFE
SUPPORT
Co.,Ltd.
NOAH KONZER
Co.,Ltd
NOAH KONZER
Co.,Ltd
NOAH KONZER
Co.,Ltd

Paid nursing
home-33

Nichii Home
Nishikokubunji

Paid nursing
home-34
Paid nursing
home-35

SOMPO CARE Lavie
Re Kobeikawadani
SOMPO CARE Sompo
no ie Sayama

Paid nursing
home-36

Royal Kawaguchi

Paid nursing home

Paid nursing
home-37
Paid nursing
home-38
Paid nursing
home-39
Paid nursing
home-40NOAH GARDEN
LEGENDNOAH GARDEN
L Grace
NOAH GARDEN
Season BellHeartland Kawaguchi
Meiseien

Residential typepaid nursing home
Residential typepaid nursing home
Residential typepaid nursing home

Paid nursing
home-41

GrandaMinamiurawa

Paid nursing home

Paid nursing
home-42

MadokaMinamiurawa

Paid nursing home

SOMPO CARE Sompo
no ie S Awajiekimae
SOMPO CARE Sompo
no ie S Kobekamisawa
NOAH GARDENCASA RICH

Serviced housing
for the elderly
Serviced housing
for the elderly
Serviced housing
for the elderly

SHIP Senri Building(Note 4)

Hospital, paid
GREEN LIFE Co.,
nursing home withLtd.
nursing homeServiced housing
for the elderly -1
Serviced housing
for the elderly -2
Serviced housing
for the elderly -3
Complex of paid
nursinghomes,medical
service related
facilities,etc.-1

Total

Paid nursing home
Paid nursing home
Paid nursing home

Paid nursing home-

MEISHO.Co.,Ltd
BenesseStyle Care
Co., Ltd.
BenesseStyle Care
Co., Ltd.
Sompo CareInc.
Sompo Care
Inc.
NOAH KONZER
Co.,Ltd-

Preparation date of
Property DisclosureStatement ofImportant Matters(Note 3)

No. ofrooms(rooms)(Note 1)

Capacity(persons)(Note 1)

No. ofresidents(persons)(Note 1)

Occupancy
rate(%)(Note 2)

46

46

43

93.5

April 1, 2022

80

80

67

83.8

April 1, 2022

50

50

46

92.0

April 1, 2022

56

56

49

87.5

April 1, 2022

72

72

59

81.9

September 21, 2021

51

51

47

92.2

September 21, 2021

136

136

90

66.2

September 21, 2021

97

100

100

100.0

June 15, 2022

58

60

54

90.0

April 1, 2022

54

54

47

87.0

April 1, 2022

137

137

116

84.7

April 1, 2022

85

85

74

87.1

April 1, 2022

115

115

98

85.2

September 21, 2021

181

200

200

100.0

July 1, 2022

4,014

4,276

3,801

88.9

-

(Note 1) “No. of rooms,” “Capacity” and “No. of residents” indicate figures based on figures stated in Property Disclosure Statement of Important Matters(hereinafter the “Property Disclosure Statement of Important Matters”) of paid nursing homes provided by the operators.
(Note 2) “Occupancy rate” indicates the occupancy rate obtained by dividing the number of residents by capacity, rounded to one decimal place.
(Note 3) “Preparation date of Property Disclosure Statement of Important Matters” indicates the date of application, reference date or preparation date statedon the document.
(Note 4) SHIP Senri Building is a property with a hospital and paid nursing home, and the above table provides an overview of the facilities related to its paid
nursing home.

- 40 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(iv) Overview of medical service-related facilities, etc.
Property number

Medical service-related facilities-1

Property name

Niigata Rehabilitation Hospital

Operator

Medical Corporation AIKOKAI

Type of facility

Hospital

Subject of
medicaltreatment

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

Facility criteria(Hospitalization
fee)
External
evaluation

Date ofestablishment

June 1990(established as Oyama Hospital, the precursor)

Authorized number 168 beds (general beds: 108 beds/convalescentof beds
stage beds: 60 beds)
Facility certification

Training facilities certified by the Japanese
Association of Rehabilitation Medicine

2nd floor (48 beds) Hospitalization fee of hospital ward for comprehensive community care 1
3rd floor (60 beds) Basic hospitalization fee for general hospital ward (acute hospitalization fee 4)
Medical management fee for comprehensive community care 1
4th floor (60 beds) Hospitalization fee of hospital ward for rehabilitation at recovery stage 1
Hospital certified by Japan Council for Quality Health Care (Certification number: JC1424-3) 3rdG:Ver.1.1
Added function Rehabilitation function (Certification number: JC1424-R2) Ver.3.0

Property
numberComplex of paid nursing homes,medical service related facilities,etc.-1

Property nameSHIP Senri Building (Senri-Chuo Hospital) (Note)

Operator

Medical Corporation Kyowakai

Date ofestablishment

October 2008

Type of facility

Hospital

Authorized numberof beds

400 beds (400 general beds)

Subject of
medicaltreatment

Facility criteria(Hospitalizatio
n fee)

Rehabilitation, orthopedics,
Training facilities certified by the Japaneseneurosurgery, surgery, internal medicine Facility certification
Association of Rehabilitation Medicine
and neurology
West 6th floor (25 beds) Palliative care hospital
East 6th floor (25 beds) Facilities for the disabled,
ward hospitalization fee 2
etc. 2 10:1 Basic hospitalization fee
West 5th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

East 5th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

West 4th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

East 4th floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

West 3rd floor (50 beds) Facilities for the disabled,
etc. 2 10:1 Basic hospitalization fee

East 3rd floor (50 beds) Recovery phaserehabilitation ward hospitalization fee 1

West 2nd floor (50 beds) Recovery phaserehabilitation ward hospitalization fee 1
External
evaluation

Hospital certified by Japan Council for Quality Health Care (Certification number: JC2382) 3rdG:Ver.2.0(Note) SHIP Senri Building is a property with a hospital and paid nursing home, and the above table provides an overview of the facilities related to its hospital.

- 41 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(v) Earnings performance(Unit: thousands of yen)
Current fiscal period (from February 1, 2022, to July 31, 2022)
Property nameOperating revenue from real estate leasing
Rent revenue

Operating expenses from real estate leasing

Other
revenue

Property Outsourcing Repair Insurance
Other,
Depreciation
tax
expenses expenses expenses
net

NOI(Note 3)

AQUAMARINE
Nishinomiyahama

24,765

4,249

2,100

468

236

17,310400

59,888

Bonsejour Chitosefunabashi

5,607

1,813

225

-

119

3,048

401

21,366

Bonsejour Hino

5,078

1,247

214

-

85

3,130

400

19,496

4,126

1,031

167

-

80

2,447

400

16,138

8,399

1,813

213

-

154

5,817

400

21,097

14,137

4,553

201

-

355

8,627

400

39,542ASHEIM Hikarigaoka

16,645

3,868

381

522

212

11,260400

40,364ASHEIM
Bunkyohakusan

12,530

2,572

381

250

129

8,795

400

38,453

SOMPO CARE La vie Re
Machidaonoji

48,621

5,945

780

1,959

392

39,144400

95,522

SOMPO CARE La vie Re
Azamino34,224

4,705

780

3,512

285

24,540400

75,520SAWAYAKA
Tachibanakan

26,620

2,669

1,200

-

370

21,980400

47,213

26,486

2,984

1,200

-

273

21,628400

43,375

8,487

1,108

1,200

-

119

5,659

400

12,856

GOOD TIME HOME
Fudo-mae

15,164

3,061

600

190

182

10,730400

46,566

Bonsejour Yotsugi

4,934

950

223

-

73

3,286

400

20,660

6,533

1,390

371

-

111

4,260

400

13,94952,509

9,568

900

303

579

40,758400

114,648

GreenLife Moriguchi

39,791

6,999

1,363

3,220

379

27,428400

107,636

Hapine Kobe Uozaki
Nibankan

9,684

1,393

1,200

122

90

6,478

400

24,294Granda TsurumaYamato

7,262

1,934

618

-

152

4,158

400

27,144

Smiling Home Medice
Adachi20,140

3,327

540

4,191

177

11,503400

56,571AIKOEN ICHIBANKAN
Building

8,477

2,552

780

-

112

4,632

400

20,564

Hanakotoba Minami

9,495

1,543

600

1,711

79

5,161

400

26,265

Hanakotoba Miura

9,902

1,555

600

998

88

6,260

400

16,766

Bonsejour Musashishinjo
Medical Rehabilitation
Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation
Home Bonsejour
KomakiSAWAYAKA Mekarikan
SAWAYAKA Tagawakan

Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building (Hapine Kobe
Gakuentoshi)

Not disclosed(Note 2)- 42 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Current fiscal period (from February 1, 2022, to July 31, 2022)
Property nameOperating revenue from real estate leasing
Rent revenue

Operating expenses from real estate leasing

Other
revenue

Property Outsourcing Repair Insurance
Other,
Depreciation
tax
expenses expenses expenses
net

NOI(Note 3)

SOMPO CARE La vie Re
Hama-Kawasaki

18,846

3,463

2,770

113

206

11,891400

45,396

Hanakotoba ShinYokohama

17,431

4,413

900

2,926

249

8,543

400

53,024

Hanakotoba ShinYokohama II

5,674

2,521

600

-

92

2,061

400

11,198

Hanakotoba Odawara

9,260

1,393

600

787

99

5,981

400

24,320

Verde Minowa

26,964

5,242

1,020

260

508

19,533400

56,477

Verde Hotaka

26,616

2,211

1,020

1,625

249

21,110400

44,600Sunny Life KitaShinagawa

10,185

2,798

600

-

119

6,265

401

45,580Sunny Life Kamakura

12,719

2,769

720

-

179

8,650

400

38,830Nichii Home
Nishikokubunji

4,029

1,220

660

25

92

1,631

400

18,743

SOMPO CARE Lavie Re
Kobeikawadani

10,240

-

750

681

191

8,218

400

35,184

SOMPO CARE Sompo
no ie Sayama

3,951

-

750

-

104

2,700

396

17,658

8,413

-

1,647

1,097

182

5,087

399

33,874

NOAH GARDEN LEGEND

8,211

-

300

-

130

7,615

165

26,403

NOAH GARDEN L Grace

6,025

-

300

-

102

5,458

165

19,454

NOAH GARDEN Season
Bell

10,107

-

487

-

141

9,206

271

29,325

Heartland Kawaguchi
Meiseien

10,086

-

487

-

148

9,177

271

36,607

Granda Minamiurawa

4,577

-

325

-

89

4,026

135

18,462

Madoka Minamiurawa

3,175

-

325

60

71

2,582

135

14,546

SOMPO CARE Sompo
no ie S Awajiekimae

28,052

4,903

510

710

298

21,230400

57,635

SOMPO CARE Sompo
no ie S Kobekamisawa

16,897

2,912

510

-

183

12,892400

36,284

NOAH GARDEN CASA
RICH

14,748

-

300

-

238

14,044165

50,074

Niigata Rehabilitation
Hospital

27,754

9,656

1,030

112

387

16,068500

78,193

SHIP Senri Building

80,48827,640

1,500

-

1,183

49,764400

341,078

Royal Kawaguchi

Not disclosed(Note 2)

- 43 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Current fiscal period (from February 1, 2022, to July 31, 2022)
Property nameOperating revenue from real estate leasing
Rent revenue

Total

2,371,156

2,360,228

Operating expenses from real estate leasing

Other
revenue

10,928Property Outsourcing Repair Insurance
Other,
Depreciation
tax
expenses expenses expenses
net

784,089 143,989

34,95625,845

10,093551,793 17,410

NOI(Note 3)

2,138,860(Note 1)All figures indicated are rounded down to the nearest thousand yen.

(Note 2)

“Operating revenue from real estate leasing”, “Rent revenue” and “Other revenue” of each property are not disclosed as consent for disclosure has
not been obtained from tenants. The total is the sum of amounts received as rent for the current fiscal period based on the lease agreements.

(Note 3)

“NOI” = Real estate lease business revenue – real estate lease business expenses + depreciation and amortization- 44 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(vi) Summary of appraisal report
HCM has obtained an appraisal report for each real estate in trust from one of the following: Rich Appraisal Institute Co.,
Ltd., The Tanizawa Sogo Appraisal Co., Ltd., Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd., JLL Morii
Valuation & Advisory K.K.
The following is a summary of the appraisal report for each real estate in trust acquired by HCM with July 31, 2022, as theappraisal date. The real estate appraisal report only states judgments and opinions of the appraiser as of a specific point
in time and does not guarantee the appropriateness, accuracy and feasibility of transactions at the presented appraisal
value. Rich Appraisal Institute Co., Ltd., The Tanizawa Sogo Appraisal Co., Ltd., Japan Real Estate Institute, Daiwa Real
Estate Appraisal Co., Ltd. and JLL Morii Valuation & Advisory K.K., which appraised the properties, have no special interest
in HCM.
Summary of Appraisal Report (Note 1)
DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedDiscount
Indicated(millions
Capitalization
Terminal
yen)
rate
value
value
rate
capitalization of yen)(%)(millions of(millions of(Note 3)(%)
rate (%)(Note 2)yen)
yen)Appraisal
NOI
yield
(%)
(Note 4)

Property number

Property nameAppraisalcompany

Paid nursing
home-1

AQUAMARINE
Nishinomiyahama

Rich Appraisal
Institute Co.,
Ltd.

2,100

2,110

5.2

2,090

4.9

5.4

117

6.0

Paid nursing
home-2

Bonsejour
Chitose-funabashi

The Tanizawa
Sogo Appraisal
Co., Ltd.

997

1,020

4.3

987

4.4

4.5

48

5.9

Paid nursing
home-3

Bonsejour Hino

The Tanizawa
Sogo Appraisal
Co., Ltd.

818

832

4.8

812

4.9

5.0

43

6.0

Paid nursing
home-4

BonsejourMusashi-shinjo

The Tanizawa
Sogo Appraisal
Co., Ltd.

643

653

5.1

638

5.2

5.3

39

6.8

The Tanizawa
Sogo Appraisal
Co., Ltd.

850

864

5.0

844

5.1

5.2

47

6.5

The Tanizawa
Sogo Appraisal
Co., Ltd.

1,450

1,460

5.5

1,440

5.6

5.7

92

7.3

Paid nursing
home-5
Paid nursing
home-6

MedicalRehabilitation
Home Bonsejour
Hadanoshibusawa
MedicalRehabilitation
Home Bonsejour
Komaki

Paid nursing
home-7ASHEIM
Hikarigaoka

Japan Real
EstateInstitute

1,560

1,560

4.6

1,550

4.4

4.7

76

5.5

Paid nursing
home-8ASHEIM
Bunkyohakusan

Japan Real
EstateInstitute

1,750

1,760

4.2

1,740

4.0

4.3

74

5.2

Paid nursing
home-9SOMPO CARE La
vie ReMachidaonoji

Japan Real
EstateInstitute

4,050

4,070

4.6

4,020

4.4

4.7

193

5.3

Paid nursing
home-10

SOMPO CARE La
vie Re Azamino

Japan Real
EstateInstitute

3,400

3,420

4.4

3,370

4.2

4.5

156

5.1

Paid nursing
home-11SAWAYAKA
Tachibanakan

Japan Real
EstateInstitute

1,580

1,590

5.4

1,560

5.2

5.6

93

6.1

Paid nursing
home-12SAWAYAKA
Mekarikan

Japan Real
EstateInstitute

1,450

1,460

5.5

1,430

5.3

5.7

85

6.2

Paid nursing
home-13SAWAYAKA
Tagawakan

Japan Real
EstateInstitute

391

394

5.6

387

5.4

5.8

25

6.4

Paid nursing
home-14

GOOD TIMEHOME Fudo-mae

Japan Real
EstateInstitute

2,050

2,070

4.2

2,030

4.0

4.3

91

5.2

- 45 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Summary of Appraisal Report (Note 1)
DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedDiscount
Indicated(millions
Capitalization
Terminal
yen)
rate
value
value
rate
capitalization of yen)(%)(millions of(millions of(Note 3)(%)
rate (%)(Note 2)yen)
yen)Appraisal
NOI
yield
(%)
(Note 4)

Property number

Property nameAppraisalcompany

Paid nursing
home-15

Bonsejour Yotsugi

The Tanizawa
Sogo Appraisal
Co., Ltd.

886

902

4.7

879

4.8

4.9

47

5.7

Paid nursing
home-16

Medical Home
Bonsejour Itami

The Tanizawa
Sogo Appraisal
Co., Ltd.

557

566

5.1

553

5.2

5.3

38

7.5

Paid nursing
home-17

Kobe Gakuentoshi
Building

4,540

4,600

4.6

4,520

4.4

4.8

227

5.2

Paid nursing
home-18

GreenLife
Moriguchi

4,500

4,560

4.5

4,470

4.3

4.7

220

5.3

Paid nursing
home-19

Hapine Kobe
Uozaki Nibankan

995

1,010

4.6

988

4.4

4.8

48

5.2

Paid nursing
home-20

Granda TsurumaYamato

The Tanizawa
Sogo Appraisal
Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

5.3

Paid nursing
home-21

Smiling Home
Medice Adachi

The Tanizawa
Sogo Appraisal
Co., Ltd.

2,500

2,540

4.6

2,480

4.7

4.8

120

5.3

Paid nursing
home-22

AIKOENICHIBANKAN
Building

The Tanizawa
Sogo Appraisal
Co., Ltd.

860

864

5.2

858

5.3

5.4

45

5.8

Paid nursing
home-23

Hanakotoba
MinamiJapan Real
EstateInstitute

1,240

1,250

4.4

1,230

4.2

4.5

56

5.2

Paid nursing
home-24

Hanakotoba
Miura

The Tanizawa
Sogo Appraisal
Co., Ltd.

668

676

4.8

664

4.9

5.0

35

5.6

Paid nursing
home-25

SOMPO CARE La
vie Re HamaKawasaki

JLL Morii
Valuation &Advisory K.K.

1,810

1,840

4.6

1,780

4.4

4.8

89

5.2

Paid nursing
home-26

Hanakotoba ShinYokohama

Japan Real
EstateInstitute

2,400

2,420

4.2

2,380

4.0

4.3

109

5.2

Paid nursing
home-27

Hanakotoba ShinYokohama II

Japan Real
EstateInstitute

383

385

5.0

380

4.8

5.2

21

5.8

Paid nursing
home-28

Hanakotoba
Odawara

The Tanizawa
Sogo Appraisal
Co., Ltd.

946

959

4.9

940

4.8～5.0

5.1

49

5.6

Paid nursing
home-29

Verde Minowa

1,700

1,710

5.0

1,690

4.8

5.2

109

6.7

Paid nursing
home-30

Verde Hotaka

1,430

1,440

5.4

1,420

5.2

5.6

91

6.9

Paid nursing
home-31

Sunny Life KitaShinagawa

2,040

2,070

4.3

2,020

4.1

4.5

90

4.9

Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.

Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.
Daiwa Real
EstateAppraisal Co.,Ltd.

- 46 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Summary of Appraisal Report (Note 1)

Property number

Property nameAppraisalcompany

DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedDiscount
Indicated(millions
Capitalization
Terminal
yen)
rate
value
value
rate
capitalization of yen)(%)(millions of(millions of(Note 3)(%)
rate (%)(Note 2)yen)
yen)Appraisal
NOI
yield
(%)
(Note 4)

Paid nursing
home-32

Sunny Life
Kamakura

The Tanizawa
Sogo Appraisal
Co., Ltd.

1,620

1,640

4.4

1,610

4.5

4.6

76

5.3

Paid nursing
home-33

Nichii Home
Nishikokubunji

Daiwa Real
EstateAppraisal Co.,
Ltd.

760

772

4.3

755

4.1

4.5

36

5.0

Paid nursing
home-34

SOMPO CARE La
vie ReKobeikawadaniRich Appraisal
Institute Co.,
Ltd.

1,300

1,320

4.3

1,290

4.1

4.5

63

4.9

Paid nursing
home-35

SOMPO CARE
Sompo no ie
SayamaRich Appraisal
Institute Co.,
Ltd.

647

656

4.7

643

4.5

4.9

32

5.4

Paid nursing
home-36

Royal Kawaguchi

Daiwa Real
EstateAppraisal Co.,
Ltd.

1,310

1,320

4.3

1,300

4.1

4.5

62

4.9

Paid nursing
home-37

NOAH GARDEN
LEGENDThe Tanizawa
Sogo Appraisal
Co., Ltd.

910

920

5.1

910

5.2

5.3

48

5.6

Paid nursing
home-38

NOAH GARDEN L
Grace

The Tanizawa
Sogo Appraisal
Co., Ltd.

660

660

5.1

660

5.2

5.3

35

5.6

Paid nursing
home-39NOAH GARDEN
Season BellThe Tanizawa
Sogo Appraisal
Co., Ltd.

1,520

1,530

5.0

1,520

5.1

5.2

78

5.8

Paid nursing
home-40

Heartland
Kawaguchi
Meiseien

Japan Real
EstateInstitute

2,180

2,190

4.3

2,160

4.1

4.4

100

5.0

Paid nursing
home-41

GrandaMinamiurawa

Rich Appraisal
Institute Co.,
Ltd.

1,100

1,110

4.1

1,090

3.9

4.2

49

4.8

Paid nursing
home-42

MadokaMinamiurawa

Rich Appraisal
Institute Co.,
Ltd.

883

893

4.1

879

3.9

4.2

39

4.8

SOMPO CARE
Serviced housing
Sompo no ie S
for the elderly -1
Awajiekimae

Japan Real
EstateInstitute

2,250

2,270

5.0

2,230

4.8

5.2

116

6.0

SOMPO CARE
Serviced housing
Sompo no ie S
for the elderly -2
Kobekamisawa

Japan Real
EstateInstitute

1,390

1,400

5.0

1,370

4.8

5.2

72

6.0

Serviced housing NOAH GARDEN
for the elderly -3 CASA RICH

The Tanizawa
Sogo Appraisal
Co., Ltd.

1,730

1,740

5.1

1,720

5.2

5.3

91

5.6

Niigata
Medical serviceRehabilitation
related facilities-1
Hospital

Japan Real
EstateInstitute

2,300

2,310

6.5

2,290

6.3

6.7

153

7.4

Complex of paid
nursing
SHIP Senrihomes,medical
Building
service related
facilities,etc.-1

The Tanizawa
Sogo Appraisal
Co., Ltd.

14,20014,4004.5

14,1004.5～4.6

4.7

679

5.2

86,36487,256-85,727

-

-

4,378

5.5

Total

- 47 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(Note 1) “Appraisal value” is based on the appraisal report with July 31, 2022, as the appraisal date.
(Note 2) “Discount rate” represents a yield used to discount net cash flow during an analysis period and terminal value at the end of an analysis period backto present value, and figures used by respective appraisal organizations are shown. For Hanakotoba Odawara, 4.8% for the first fiscal year and 5.0%
from the second fiscal year, and for SHIP Senri Building, 4.5% for the first fiscal year and 4.6% from the second fiscal year.
(Note 3) “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in the real estate appraisal report with July 31, 2022,
as the appraisal date and is rounded down to the nearest million yen. In addition, NOI is revenue before deducting depreciation and differs from NCF(net cash flow), which is the amount calculated by adding the gain on investment from security deposits, etc. to NOI and deducting capital
expenditures. The same shall apply hereinafter in this document.
(Note 4) “Appraisal NOI yield” is calculated by the formula below and rounded down to one decimal place. In the column of total appraisal NOI yield, theaverage appraisal NOI yield, which is calculated by dividing the total appraisal NOI of the respective real estate in trust by the total acquisition price,
is shown (rounded down to the first decimal place). Appraisal NOI yield = Appraisal NOI of the respective real estate in trust / Acquisition price of therespective real estate in trust(vii) Information on major tenants“Major tenants” refers to tenants whose leased areas occupy 10% or more of total leased area of the entire portfolio at
the end of the current fiscal period (on July 31, 2022). The annual rent and tenant leasehold and security deposits of each
property are not disclosed as consent from the tenants has not been obtained.
LeasedShareContract
Contract renewal method,
area
Tenant name
Property nameexpiration date
(%)
etc.
2
(m )
(Note 3)(Note 2)
(Note 4)(Note 1)
Midterm cancellation not
SOMPO CARE La vie Re
October 31,
allowed for 15 years from
7,720.17
3.5
Machidaonoji
2027
the start date of leasing.
Midterm cancellation not
SOMPO CARE La vie Re
June 27,
allowed for 15 years from5,789.25
2.6
Azamino2027
the start date of leasing.
Midterm cancellation not
SOMPO CARE La vie Re
December 31,
allowed for 15 years from2,535.29
1.2
Hama-Kawasaki
2027
the start date of leasing.
Midterm cancellation not
SOMPO CARE La vie Re
March 30,
3,824.54
1.7
allowed for 10 years from2036
Sompo Care Inc. Kobeikawadani
the start date of leasing.
Cancellation allowed if
SOMPO CARE Sompo no ie
September 30,
requested 1 year prior or
1,997.87
0.9
2025
Sayamaearlier.
Cancellation allowed if
SOMPO CARE Sompo no ie S
5,745.15
2.6
July 31, 2034 requested 1 year prior or
Awajiekimae
earlier.
Cancellation allowed if
SOMPO CARE Sompo no ie S
4,058.35
1.8
July 31, 2034 requested 1 year prior or
Kobekamisawa
earlier.
Total
31,670.62
14.4
Cancellation not allowed
May 24,through to the end of theBonsejour Chitose-funabashi
2,342.17
1.1
2026
contract.
Cancellation not allowed
May 24,
Bonsejour Hino
1, 984.17
0.9
through to the end of the2026
contract.
Cancellation not allowed
November 23,
Bonsejour Musashi-shinjo
1,710.43
0.8
through to the end of the2026
contract.
Cancellation not allowed
Benesse Style
Medical Rehabilitation HomeMay 21,through to the end of the3,435.79
1.6
Care Co., Ltd.
Bonsejour Hadanoshibusawa
2027
contract.
Cancellation not allowed
Medical Rehabilitation HomeMay 21,through to the end of the8,858.49
4.0
Bonsejour Komaki
2027
contract.
Cancellation not allowed
January 5,
Bonsejour Yotsugi
1,962.89
0.9
through to the end of the2026
contract.
Cancellation not allowed
Medical Home Bonsejour
May 21,through to the end of the2,129.87
1.0
Itami
2027
contract.
- 48 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Leasedarea(m2)(Note 1)

Share(%)
(Note 2)

3,427.08

1.6

March 31,2024

Benesse Style Care Granda Minamiurawa
Co., Ltd.

2,373.25

1.1

July 14,2041

Madoka Minamiurawa

1,918.98

0.9

April 30,
2025

Total

30,143.12

13.7-

AQUAMARINE
Nishinomiyahama

5,189.42

2.4

May 31,
2037

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

12,636.48

5.8

March 28,2041

GreenLife Moriguchi

8,356.85

3.8

October 19,
2039

Hapine Kobe Uozaki
Nibankan

1,772.89

0.8

March 28,
2041

Total

27,955.64

12.7-

SHIP Senri Building

24,813.85

11.3

October 27,
2038

Total

24,813.85

11.3-

Tenant name

Property nameGranda Tsuruma-Yamato

GREEN LIFE
Co., Ltd.

Ship Healthcare
Estate Inc.

Contract
expiration date
(Note 3)Contract renewal method,
etc.
(Note 4)
Cancellation allowed if
requested 6 months prior or
earlier.
Cancellation allowed if
requested 6 months prior or
earlier.
Cancellation allowed if
requested 6 months prior or
earlier.
Cancellation not allowed
through to the end of thecontract.
Cancellation allowed if
requested 1 year prior or
earlier.
Cancellation allowed if
requested 6 months prior or
earlier.
Cancellation allowed if
requested 1 year prior or
earlier.
Midterm cancellation notallowed for 15 years fromthe start date of leasing.
-(Note 1) “Leased area” indicates the area stated in lease agreements concluded with each tenant as of July 31, 2022. When a master leaseagreement has been concluded, the area for which a lease agreement has been concluded with end tenants and actually leased is shownfor properties for which a pass-through master lease agreement under which rent from end tenants is received as is, in principle, isconcluded.
(Note 2) “Share” indicates the area of each property leased to its major tenants as a percentage of the total leased area of the properties owned
by HCM as of July 31, 2022, and is rounded to the first decimal place.
(Note 3) “Contract expiration date” indicates the contract expiration date stated in the lease agreement.
(Note 4) “Contract renewal method, etc.” indicates the details of contract renewal method, etc. stated in the lease agreement.

(viii) Portfolio overview (portfolio diversification)(a) By typeClassification
Paid nursing homeServiced housing for theelderly
Medical service-related
facilities, etc.
Complex of paid nursing
homes,medical service
related facilities,etc.
Total

Number ofproperties

Acquisition price(millions of yen)

Period-end
appraisal value(millions of yen)
(Note 1)

Share (%)
(Note 2)42

58,77064,494

74.9

3

4,749

5,370

6.0

1

2,060

2,300

2.6

1

12,92014,20016.5

47

78,49986,364100.0(Note 1) “Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of July 31, 2022, prepared by realestate appraisers of Japan Real Estate Institute, The Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd., Daiwa Real
Estate Appraisal Co., Ltd. and JLL Morii Valuation & Advisory K.K., based on the Articles of Incorporation of HCM and the rules set by theInvestment Trusts Association, Japan. The same shall apply hereinafter.
(Note 2) “Share” refers to the percentage of the total acquisition price, and is shown rounded to the first decimal place. The same shall apply
hereinafter.

- 49 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(b) By area
Classification/region
Three Major Metropolitan
Areas
Tokyo Metropolitan
Area

Number ofproperties

Acquisition price(millions of yen)

Period-end
appraisal value(millions of yen)

Share (%)

36

64,981

71,83382.8

25

33,90937,904

43.2

Kinki Area

10

29,802

32,47938.0

Chubu Area

1

1,270

1,450

1.6

Core Cities

9

11,80012,710

15.0

Other Areas

2

1,718

1,821

2.2

47

78,49986,364

100.0

Total

- 50 -

This translation of the original Japanese Financial Report (kessan tanshin ) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(c) By number of rooms
The table below shows diversification in accordance with the number of rooms at homes and facilities for the elderly
concerning assets which fall under the category of homes and facilities for the elderly (excluding medical servicerelated facilities, etc.) among assets held.
Period-end appraisal
Number of
Acquisition price
Number of rooms
value
Share (%)
properties(millions of yen)(millions of yen)
100 rooms or more

14

29,95433,02047.2

50 rooms or more, but lessthan 100 rooms

26

30,13433,066

47.4

Less than 50 rooms

5

3,431

3,778

5.4

Total

45

63,51969,864100.0(Note)

Well House Senri-Chuo (No. of rooms: 181) operated by GREEN LIFE Co., Ltd., a tenant at SHIP Senri Building (paid nursing home section),
which is a complex of paid nursing home, medical service-related facilities, and other facilities, is not included in the above table since
it is difficult to calculate the acquisition prices and period-end appraisal values separately for the paid nursing home section and the
medical service-related facilities, etc. section.

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

PurposeRooftop waterproofing andrenovation of exterior walls ofsouth building
Renewal of air conditioners incommon areas
LED lighting
Rooftop waterproofing
Renewal of bathroom tile

Scheduled period

From: Oct. 2022
To: Dec. 2022
From: Nov. 2022
To: Dec. 2022
From: Sep. 2022
To: Jan. 2023
From: Nov. 2022
To: Dec. 2022
From: Nov. 2022
To: Dec. 2022

Estimated construction costs(thousands of yen)
Payment
Total
Total
duringamountamountperiod already paid
50,250--21,000--20,000

-

-

7,000

-

-

4,000

-

-

Capital Expenditures During the Period
Of construction work falling under the category of capital expenditures conducted in the current fiscal period for
assets owned by HCM as of July 31, 2022, the following are the major amounts. The capital expenditures in thecurrent fiscal period amounted to 111,185 thousand yen. Combined with the repair expenses separately charged
to expenses amounting to 25,845 thousand yen, HCM implemented a total of 137,031 thousand yen of
construction work.

Name of real estate(Location)
GreenLife Moriguchi(Moriguchi-shi, Osaka)

Niigata Rehabilitation Hospital(Niigata-shi, Niigata)GreenLife Moriguchi(Moriguchi-shi, Osaka)

PeriodRenewal of flooring materials
for corridors on floors 3-8
Renovation of exterior walls ofmachine room and storage
room for hazardous materials
Renewal of 74 air conditioner
units in rooms for floors 5-8

From: Apr. 2022
To: May. 2022
From: Mar. 2022
To: Jun. 2022

14,800

From: Dec. 2021
To: Mar. 2022

13,310--68,027

Other real estate
Total

c.

Construction costs(thousands of yen)

Purpose15,048111,185

Cash Reserves for Long-Term Repair Plans
Not applicable.
- 51 -