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 January 2023

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

Representative:

Yuji Fujise, Executive Director

REIT Securities Issuer

March 17, 2023

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:

April 27, 2023
April 21, 2023

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 January 2023 (from August 1, 2022, to January 31, 2023)(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 Jan. 2023
2,632
11.0
1,453
14.9
1,279
16.2
1,278
16.2
Ended Jul. 2022
2,371
14.0
1,265
18.0
1,101
20.5
1,100
20.5
Net income per unit

Fiscal period

Return on equity

yen
3,555
3,063

Ended Jan. 2023
Ended Jul. 2022

%
3.3
3.1

Ratio of ordinary income
to total assets
%
1.6
1.5

Ratio of ordinary income
to operating revenue
%
48.6
46.4

(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
3,557
3,367

yen
3,557
3,059

Ended Jan. 2023
Ended Jul. 2022

yen
0
308

million yen
1,278
1,210

million yen
1,278
1,099

million yen
110

%
100.0
100.0

%
3.3
2.9

(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.
(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. 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 Jan. 2023
Ended Jul. 2022

Total assets
million yen
81,24380,357

Net assets
million yen
38,96838,800-1-

Equity ratio
%
48.0
48.3

Net assets per unit
yen
108,395
107,930

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
3,268
1,729

Fiscal period

Ended Jan. 2023
Ended Jul. 2022

Net cashprovided by (used in) investing
activities
million yen(2,210)(12,233)

Net cashCash and cash equivalents at end
provided by (used in) financingof period
activities
million yen
million yen
(854)
1,644
10,1591,440

2. Earnings Forecast for the Fiscal Period Ending July 2023 (from February 1, 2023 to July 31, 2023) and Earnings Forecast for the Fiscal
Period Ending January 2024 (from August 1, 2023 to January 31, 2024)(% figures are the rate of period-on-period increase (decrease))

Fiscal period

Operating revenue

Ending Jul. 2023
Ending Jan. 2024

million yen
2,438
2,438

Operating income% million yen
(7.4)
1,264
0.0
1,254

Ordinary income% million yen(13.0)
1,063
(0.8)
1,051

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

Net income% million yen(16.9)
1,062
(1.1)
1,050

(Reference) Forecast net income per unit (fiscal period ending July 2023)
Forecast net income per unit (fiscal period ending January 2024)%(16.9)
(1.1)

yen
2,954
2,920

yen
311
315

Distribution
per unit(including
distribution
in excess ofearnings)
yen
3,265
3,235

2,954 yen
2,920 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
Fiscal period ended January 2023 359,500 units
Fiscal period ended July 2022
② Number of treasury investment units at end of period
Fiscal period ended January 2023
- units(Note)

Fiscal period ended July 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 33.

* 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 July 2023 and Fiscal Period Ending January 2024” on pages 11 and 12.

-2-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 ............................................................................................................................................................. 13(1) Balance Sheet ................................................................................................................................................................ 13(2) Statement of Income ..................................................................................................................................................... 15(3) Statement of Unitholders' Equity .................................................................................................................................. 16(4) Statement of Cash Distributions .................................................................................................................................... 18(5) Statement of Cash Flows ............................................................................................................................................... 21(6) Notes on the Going Concern Assumption...................................................................................................................... 22(7) Notes on Matters Concerning Significant Accounting Policies ....................................................................................... 22(8) Notes on Financial Statements ...................................................................................................................................... 24(9) Changes in Total Number of Investment Units Issued and Outstanding ........................................................................ 33
3. Reference Information .......................................................................................................................................................... 35(1) Information on Prices of Assets Under Management, Etc. ............................................................................................ 35(2) Status of Capital Expenditures ....................................................................................................................................... 52-3-

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).
The total number of investment units issued and outstanding as of the end of the fiscal period ended January 2023 (August
1, 2022 to January 31, 2023) (hereinafter, the “16th fiscal period” or the “current fiscal period”) stands at 359,500 units.
(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 to 4% in 2030 from 2.5% in 2018.
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 sold " Medical Rehabilitation Home Bonsejour Komaki " on September 27, 2022 fora disposition price of 1,450 million yen, acquired "Nichii Home Inage" on September 30, 2022 for an acquisition price of
1,508 million yen, and acquired " Hanakotoba Oppama " on November 10, 2022 for an acquisition price of 500 million yen.
As of the end of the current fiscal period, HCM owns 48 properties with a total leasable area of 217,545.72 m2, and theoperational rate stands at 100%.
With regards to the Japanese economy, although the restrictions on activities related to COVID-19 have been lifted, andmoves toward the normalization of economic and social activities are expected, the effects of the ongoing monetary
tightening policies of major countries, including European nations and the United States, the resulting depreciation of theyen, and the prolonged global surge in energy and raw material prices against the backdrop of the deteriorating situationin Ukraine are becoming apparent and require close attention in the future.
In addition, in December 2021, HAM established the "Sustainability Promotion System Regulations" and the ESG
Committee in order to implement the "Basic Policy on ESG" in September 2018. As a result of its sustainability promotion
activities, HCM received a "1 Star" rating in the GRESB Real Estate Assessment 2022 Survey, an international benchmark
assessment that measures ESG considerations, and an "A Level" in the GRESB Disclosure Assessment, the highest level ofthe five-level rating system. In order to realize the philosophy of HCM, "A society where all people can live vibrantly andwith peace of mind," HAM aims to contribute to the aged society and maximize unitholder value over the medium to longterm by promoting the supply of healthcare facilities as social infrastructure and building a portfolio specializing in
healthcare facilities.
(c) Overview of Financing-4-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.
HCM upholds stable financial management as its basic policy for securing stable income and maintaining and enhancing
asset value over the medium to long term.
In the current fiscal period, HCM borrowed 500 million yen on September 30, 2022 to fund the acquisition of "Nichii Home
Inage" and part of the acquisition-related expenses, and refinanced 9,750 million yen in loans that were due for repayment
on January 31, 2023.

As a result, unitholders’ capital (net) (Note) at the end of the current fiscal period stands at 37,601 million yen, the total
number of investment units issued and outstanding at 359,500 units, and total interest-bearing liabilities at 39,150 million
yen.
(Note) The figure indicates the amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital. The amount
does not take into account the change in unitholders’ capital in line with the implementation of 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 48.2%.
HCM’s rating as of January 31, 2023 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 2,632 million
yen, operating income at 1,453 million yen, ordinary income at 1,279 million yen and net income at 1,278 million yen.
In accordance with the cash 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 the amount of
unappropriated retained earnings for the fiscal period less the reversal amount of the allowance for temporary differences(as defined in Article 2, Paragraph 2, Item (30) of the Regulation on Accountings of Investment Corporations), it shall
distribute approximately the entire amount of 1,278,741,500 yen as distribution of earnings. Accordingly, the distributionsof earnings per unit were 3,557 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.
However, as mentioned above, as a result of the disposition of "Medical Rehabilitation Home Bon Sejour Komaki", a gainon sale of the real estate properties was generated, and in consideration of profit reflecting such gain on sale, HCM decided
not to make continuous distributions in excess of earnings during the current period.
As a result, distribution per unit came to 3,557 yen.
(Note 1) Distributions in excess of earnings are distributed up to the amount equivalent to 20% of the depreciation recorded in the accounting
period immediately before the accounting period when HCM will pay said distribution, sufficiently taking into consideration the amountof 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 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.

-5-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 2) Under the rules of The Investment Trusts Association, Japan (hereinafter, “The Investment Trusts Association”), closed-end investment
corporations are allowed to conduct distribution in excess of earnings up to an amount equivalent to 60% of the depreciation recordedon the last day of the accounting period.

② 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 a provision of nursing care services and medical services at external facilities for a certain percentage of elderly
households will inevitably be needed. The expansion of the supply of healthcare facilities, especially facilities and housing
for the elderly, is required in response to the expanding demand for nursing care and medical services.
While nursing care in the same household is forecast to be more difficult than ever before due to extreme aging andchange to the family structure, new development and expansion of healthcare facilities is required to respond to thegrowing demand for nursing care and medical services, and measures to achieve them are being promoted.
In “Japan Revitalization Strategy -JAPAN is BACK-“ dated June 14, 2013, the Headquarters for Japan's Economic
Revitalization announced a policy to “enact a guideline concerning acquisition and management of properties including
housing for the elderly to promote the utilization of healthcare REITs in an effort to utilize private funds” as part of urban
development to enable the elderly to walk and live safely.
Following this policy, the Ministry of Land, Infrastructure, Transport and Tourism enacted the “Guideline Related to theUtilization of Healthcare REITs Targeting Housing for the Elderly” on June 27, 2014, and the “Guideline Related to REITs
Targeting Hospital Real Estate” on June 26, 2015, as well as indicated the points to be noted in transactions of healthcare
facilities such as the positioning of key executives with certain experience. With the enactment of these guidelines, it isbelieved 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 support eachother and the elderly can live with good health and peace of mind.”
Regarding the environment surrounding healthcare-related facilities, social welfare costs are expected to increase
alongside Japan’s aging population, and demand for medical and long-term care services is expected to increase 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.
The government has further divided 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 thehealthcare 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 coordination of hospital wards. Presently, prefectural governments and healthcare
professionals are working together via regional healthcare vision councils and other channels to realize this vision.
-6-

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.

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 country's infrastructure. Therefore, HCM believes that there is a great need among hospitals for funding
to rebuild or expand their buildings to make them more earthquake resistant.
In addition to the above, medical corporations are also expected to face needs for capital investment, M&A-driven funding
procurement and asset sales for the enhancement or conversion of medical functions, including multi-use development(Note 4) and reconstruction and expansion of buildings due to earthquake resistance. Furthermore, HCM believes, in the
instance of realizing held assets for the purpose of strengthening financial position, liquidation of (generating funds from)held assets for a hospital owner’s business succession or inheritance, or sale of hospital real estate for refinancing, that
real estate investment corporations will have opportunities related to these assets.
The market size of hospital real estate in Japan accounts for a majority of the total healthcare facility real estate market,
and the majority of hospital real estate is owned by medical corporations (Note 5). HCM believes that when hospital realestate is liquidated, it may become a target for investment by real estate investment corporations.
As described above, HCM believes that, amid the funding needs of medical corporations, and as a method for procuring
funds related to hospital management and part of strengthening financial positions, opportunities for leveraging realestate investment corporations in hospital real estate will expand further.
Therefore, the market for healthcare facilities with a particular emphasis on the keywords “nursing care,” “medical service”
and “health,” which HCM sets as acquisition targets, is believed to further expand in the future.
In addition, although the restrictions on activities related to COVID-19 have been lifted, and moves toward thenormalization of economic and social activities are expected, the effects of the ongoing monetary tightening policies ofmajor countries, including European nations and the United States, the resulting depreciation of the yen, and theprolonged global surge in energy and raw material prices against the backdrop of the deteriorating situation in Ukraine
are becoming apparent and require close attention in the future.
(Note 1) In the section about 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 27, 2021), the ratio of earthquake-resistant paid nursing homes is 96.9%.
(Note 3) According to the "Results of the Survey on Seismic Retrofit of Hospitals" (released on August 26, 2022) by the Ministry of Health, 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-7-

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.
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. HCM also implements 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.
(Reference Information)
HCM decided on March 17, 2023 to borrow the following funds to fund the repayment of 2,000 million yen in existingloans maturing on March 30, 2023.
Type
LenderBorrowing Interest rate Drawdown Borrowing Repayment Repayment
Remarks
amount （Note2）
date
methoddatemethodShort
term

Sumitomo
Mitsui Banking
Corporation

2
billion yen

Base interest
rate(JBA 1-month
Japanese
yen TIBOR)+ 0.25%

March 30,
2023

-8-

Borrowings
based ontheindividual
term loan
agreement
as of March
28, 2023,
with thecompany on
the left as alenderMarch 30,2024

Lump-sum
repayment
on maturity

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

-9-

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.
(d) Earnings Forecast Outlook
HCM forecasts the following earnings for the fiscal period ending July 2023 (from February 1, 2023 to July 31, 2023) andthe fiscal period ending January 2024 (from August 1, 2023 to January 31, 2024). For the assumptions underlying thisoutlook, please see “Assumptions Underlying Earnings Forecast for Fiscal Period Ending July 2023 and Fiscal Period Ending
January 2024” below.
For the fiscal period ending July 2023 (from February 1, 2023 to July 31, 2023) and the fiscal period ending January 2024
(from August 1, 2023 to January 31, 2024), 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 July 2023 (from February 1, 2023, to July 31, 2023)
Operating revenue

2,438 million yen

Operating income

1,264 million yen

Ordinary income

1,063 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)

1,062 million yen
2,954 yen
311 yen3,265 yen

Fiscal period ending January 2024 (from August 1, 2023, to January 31, 2024)
Operating revenue

2,438 million yen

Operating income

1,254 million yen

Ordinary income

1,051 million yen

Net income

1,050 million yen

Distribution per unit
(excluding distribution in excess of earnings)

2,920 yen

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

315 yen
3,235 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.

- 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.
Assumptions Underlying Earnings Forecast for Fiscal Period Ending July 2023 and Fiscal Period Ending January 2024
Item
Accounting period

Assumptions
・・

Fiscal period ending July 2023 (17th FP) (from February 1, 2023, to July 31, 2023) (181 days)
Fiscal period ending January 2024 (18th FP) (from August 1, 2023, to January 31, 2024) (184 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 (48 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 January 2024.
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
July 2023
January 2024
Property tax
167 million yen
167 million yen
Repair expenses
29 million yen
30 million yen
Depreciation
559 million yen
566 million yen
Other expenses related to rent business65 million yen
66 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 ended July 2022 and thefiscal period ended January 2023 will be recorded 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 July 2023 and 235 million yen for the fiscal period ending January 2024.
・ 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 July 2023 and 5 million
yen for the fiscal period ending January 2024.
・ 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 July 2023 and 1 million yen in the fiscal period ending January 2024.
・ Interest expenses, interest expenses on investment corporation bonds and other borrowing-related
expenses are assumed to be 194 million yen for the fiscal period ending July 2023 and 196 million yen for
the fiscal period ending January 2024.
・ As of the date of the document, HCM has a balance of interest-bearing liabilities of 39,150 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 July 2023 and the fiscal period ending January 2024, with an assumption that 2,000 million
yen of loans due for repayment in the fiscal period ending July 2023 (repayment date: March 30, 2023)
and 7,250 million yen of loans due for repayment in the fiscal period ending January 2024 (repayment
date: January 31, 2024) 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 January 2024.
・ 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 July 2023 and for the fiscal period ending January
2024.
・OperatingexpensesNon-operating
expenses

Interest-bearing
liabilities

Investment units- 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.
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 111
million yen for the fiscal period ending July 2023 and 113 million yen for the fiscal period ending January2024.
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 July 2023 and the fiscal period ending January 2024, 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.

- 12 -

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
Previous fiscal period(As of Jul. 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
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets(Unit: thousands of yen)
Current fiscal period(As of Jan. 31, 2023)

1,311,232
297,360
23,745
121,81241,022910
1,406
1,797,490*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
3,097
3,097

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- 13 -

1,539,878
272,156
51,052
137,266
7,709
2,008,064*1

40,234,862(5,538,328)
34,696,533
129,916(18,846)
111,069
19,961(9,025)
10,935368,211(145,749)
222,462
43,747,992
78,788,993
2,771
2,771

10,00010,000194,79435,30414
240,11478,516,016

253,281
142,711
4
405,997
79,197,762

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

22,97014,57037,541
81,243,368

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 Jul. 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
Consumption taxes payable(Unit: thousands of yen)
Current fiscal period(As of Jan. 31, 2023)

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

55,6782,000,000
7,250,000
103,501
295,543702

5,456

105,273

398,493126
895
12,020,870

397,489
162
10,208,351

2,000,000
25,400,000

2,000,000
27,900,000

Tenant leasehold and security deposits

1,921,309

1,936,482

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

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

167,616
47,322
14,977365
32,066,763

41,556,928

42,275,114

38,323,799

38,323,799*3 (10,586)(612,180)(622,767)
37,701,032*3 (10,945)(722,547)(733,493)
37,590,306

1,111,161

1,289,825

1,111,161
38,812,194

1,289,825
38,880,132(11,290)(11,290)*2 38,800,904
80,357,832

88,121
88,121*2 38,968,253
81,243,368

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- 14 -

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

Operating revenue
Leasing business revenues
Other revenue related to leasing business
Gain on sale of real estate properties
Total 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
Interest on tax refund
Reversal of distribution payable
Other
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)*1

2,360,228
10,9282,371,156*1

784,089
203,435
3,864
23,4044,800
30,62855,3791,105,602
1,265,553*1- 15 -

Current fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023
*12,417,024
10,583*2 204,649
2,632,258*1

801,972
246,843
4,063
24,293
5,100
31,16664,937
1,178,377
1,453,880

*1

7
1,566
474
2,048

5
254
81
1,000
14
1,355

93,992
7,800
5,742

101,400
7,800
5,742

1,040

1,040

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

60,164
176,148
1,279,087
1,279,087
703
10
713
1,278,374
11,451
1,289,825

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 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

Other deduction Total deduction
from unitholders' from unitholders'
capitalcapital(15,501)(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
Distribution in excess ofearnings 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
periodUnappropriatedretained earnings(undisposed loss)

Total surplus

929,041

929,041

Total valuation
Total unitholders’ Deferred gains or
and translation
equitylosses on hedges
adjustments
32,877,933(10,884)(10,884)

Total net assets

32,867,048

5,843,014

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

1,100,134

1,100,134

1,100,134

1,100,134

(406)

(406)

(406)

182,120

182,120

5,934,261

(406)

(406)

5,933,855

1,111,161

1,111,161

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

38,800,904- 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.
Current fiscal period (from August 1, 2022, to January 31, 2023)(Unit: thousands of yen)

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

38,323,799(10,586)

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

Unitholders'
capital, net(622,767)

37,701,032

(359)

(359)

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

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

Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
period-(359)(110,366)(110,726)(110,726)*1 38,323,799(10,945)(722,547)(733,493)

37,590,306(Unit: thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus

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

Unappropriatedretainedearnings(undisposed
loss)

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets

Total surplus

Totalunitholders’equity1,111,161

1,111,161

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

38,800,904(1,099,710)(1,099,710)(1,099,710)(1,099,710)

(359)

(359)

(110,366)(110,366)

1,278,374

1,278,374

Distributions in excessof earnings fromallowance fortemporary difference
adjustments
Distributions in excessof earnings from other
distributions
Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
period1,278,374

1,278,374

99,411

99,411

99,411

178,663

178,663

67,937

99,411

99,411

167,349

1,289,825

1,289,825

38,880,132

88,121

88,121

38,968,253- 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.
(4) Statement of Cash Distributions(Unit: yen)
Type
I.

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

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

Unappropriated retained earnings

1,111,161,945

1,289,825,791

II. Distribution in excess of earnings

110,726,000-

359,500-

110,366,500-

III. Incorporation into unitholders’ capital-

10,945,922

Reversal of allowance for temporary
difference adjustments-

10,945,922

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

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

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

-

[1]

[-]

110,366,500

-

[307]

[-]

11,451,445

138,369

Allowance for temporary difference
adjustments
Other deduction from unitholders’ capital

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

Retained earnings carried forward- 18 -

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

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

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

Method of calculation of amount of distributions

In accordance with the cash
distributions policy described in
Article 36, Paragraph 1 of its Articles
of Incorporation, HCM determinesthat the 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 of 359,500 units issued andoutstanding as 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 the policy for cash
distribution in excess of earnings
provided in Article 36, Paragraph 2 of
its Articles of Incorporation. During
the current fiscal period, sincedeferred losses on hedges of 0.4
million yen was recorded as net asset
deduction items, HCM decided tomake distributions of allowance fortemporary difference adjustments inthe amount of 359,500 yen. As aresult, distributions in excess ofearnings 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.

In accordance with the cash
distributions policy described in
Article 36, Paragraph 1 of its Articles
of Incorporation, HCM determinesthat the 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 theamount of unappropriated retained
earnings for the fiscal period less thereversal amount of the allowance fortemporary differences (as defined in
Article 2, Paragraph 2, Item (30) of theRegulation on Accountings ofInvestment Corporations), it shall
distribute approximately the entire
amount of 1,278,741,500 yen as the
distribution of earnings. Accordingly,
the distributions of earnings per unit
were 3,557 yen.
Furthermore, in accordance with thepolicy for cash its distributions inexcess of 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,
as a rule.
However, in the fiscal period underreview, a gain on sale of the realestate properties was generated, andin consideration of profit reflecting
such gain on sale, HCM decided not tomake continuous distributions inexcess of earnings during the current
period.
As a result, distributions per unit came
to 3,557 yen.

- 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.

Type

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

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

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
a result, 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.
(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 amount of capital
expenditure necessary for maintaining and improving the competitiveness of HCM’s assets under management, the financial position of HCM
and other factors.
However, distributions in excess of earnings may be conducted up to an amount lower than the above amount or may not be conductedwhen the implementation of distributions in excess of earnings up to the said amount is judged to be inappropriate based on the economic
environment surrounding HCM, trends of the real estate market and leasing market, status of HCM’s assets under management and financial
conditions.

(Note 2)

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

- 20 -

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: Feb. 1, 2022
To: Jul. 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 on tax refund
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses

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

1,101,046
552,155

1,279,087
563,971

1,040

1,040

57,9795,742(7)
101,792(21,663)(41,022)(2,883)60,164
5,742
(5)
(81)
109,200(27,307)
41,022
1,600

Increase (decrease) in operating accounts payable

20,177(26,689)

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
Decrease due to sale of property, plant and equipmentin trust
Other, net
SubtotalInterest income received
Interest on tax refund 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
Repayments of 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
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable(1,872)(12,175)
5,850
59,654
7,087
(668)

(845)
99,817
48,827(1,003)
10,12536-

1,214,138(1,359)1,830,875
7(100,606)(867)
1,729,408

250
3,379,092
5
81(110,131)(913)
3,268,134(12,366,585)(3,260)55,800-(2,225,327)
59,926(44,754)

80,850-(12,233,196)(2,210,155)(80,850)
2,000,000
3,500,000-

500,000(500,000)
9,750,000(9,250,000)(59,747)(145,123)

Borrowing expenses
Proceeds from issuance of investment units

5,808,558-

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(1,008,033)
10,159,927(343,860)
1,784,836(1,209,413)(854,536)
203,442
1,440,976*1 1,440,976*1 1,644,419

Cash and cash equivalents at end of period- 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) 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 costs
Depreciated evenly over 3 years.
(2) Investment corporation bond issuance costs
Amortized using the straight-line method over the maturity period.
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 for the initial fiscal year, which
was settled with the seller, is not recorded as expenses but included in the cost of
acquisition of the concerned real estate. The amount equivalent to property tax
included in the cost of acquisition of real estate was 37,599 thousand yen for theprevious fiscal period and 2,041 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 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.

- 22 -

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, etc. owned, all accounts of assets
and liabilities within trust assets as well as all accounts of revenue and expenses fromthe trust assets are recognized in the relevant account item of the balance sheet andthe statement 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 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 February 1, 2022, to July 31, 2022)
1. Reasons, related assets and amounts of reversal
Due to the recognition of deferred losses on hedges (net asset deduction items), which was a result of applying hedge
accounting to the assessment of interest rate swap transactions, 359 thousand yen of allowance for temporary difference
adjustments has been recorded in the statement of cash distributions.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period-end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of reserve for temporary difference
adjustments will be reversed.
Current fiscal period (from August 1, 2022, to January 31, 2023)
1. Reasons, related assets and amounts of reversal
Due to the decrease of deferred losses on hedges of 10,945 thousand yen within the statement of cash distributions from theassessment of fair value of interest rate swap transactions to which hedge accounting is applied, 10,945 thousand yen ofallowance for temporary difference adjustments for elimination of the amount has been reversed.
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.

- 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.
(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 Jul. 31, 2022)
Buildings in trust

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

10,041

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

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

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

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
The allowance will be reversed corresponding to future changes in the values of the hedging derivatives.
Current fiscal period (from August 1, 2022, to January 31, 2023)
1. Reasons, related assets and amounts(Unit: thousands of yen)
ReasonInitialamountLoss on interestrate swaps
recognized at theend of current
periodBalance at Reserved Reversed Balance at
beginning amount in amount in
end ofof current current
current
current
periodperiodperiodperiod25,683

10,586359-

10,945-25,683

10,586359-

10,945-

Related assets

Deferred gains orlosses on hedges
Total

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

- 24 -

Reason forreversal

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: Feb. 1, 2022
To: Jul. 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: Aug. 1, 2022
To: Jan. 31, 2023

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]*22,360,228

2,417,024

10,928

10,5832,371,156

2,427,608

143,989
34,95625,845
10,093

141,560
36,46631,894
10,417551,793563,645

17,41017,987784,089

801,972

1,587,067

1,625,635

Breakdown of gain on sale of real estate properties(Unit: thousands of yen)Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

Medical Rehabilitation Home
Bonsejour Komaki
Proceeds from sales of real estate

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

1,450,000

Cost of sales of real estate-

1,214,138

Other expenses-

31,211Gain on sale of real estate properties-

204,649[Statement of Unitholders’ Equity]*1

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

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

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

10,000,000 units

10,000,000 units

359,500 units

359,500 units[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)

- 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: Feb. 1, 2022
To: Jul. 31, 2022

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

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

1,311,232

1,539,878

297,360(167,616)

272,156(167,616)

Cash and cash equivalents

1,440,976

1,644,419(Note)

Restricted deposits in trust refer to deposits in trust reserved for refunds of leaseholds received from tenants.

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

Current fiscal period
As of Jan. 31, 2023

Due within 1 year
Due after 1 year

2,752,188
11,830,827

2,302,673
11,702,017

Total

14,583,016

14,004,691[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. by means of loans from banks, issuance of investment corporation bonds or issuance of new
investment units. As to finance by loans and issuance of investment corporation bonds, HCM pays attention to extending
periods, fixing interest rates, diversifying repayment dates and such to secure financial stability and avoid the risk of risein interest rates in the future.
Derivative transactions shall be limited to those invested in for the purpose of hedging the risk of fluctuations in interest
rates on HCM’s loans.
(2) Description of financial instruments and associated risks, and risk management system
Loans and proceeds from issuance of investment corporation bonds are used primarily for acquisition of trust
beneficiary interests in real estate and repayment of debts.
Although borrowings and investment corporation bonds are exposed to liquidity risks on the repayment or maturity
date, the impact of rising market interest rates on the management of HCM is limited through appropriate managementof the ratio of interest-bearing liabilities, and such risks are controlled through diversification of repayment andredemption dates.
Although borrowings with floating interest rates are exposed to interest rate fluctuation risks, the ratios of loan balanceswith floating rates and fixed rates against all loans are adjusted according to the financing environment. Furthermore,derivative transactions (interest rate swap transactions) have been used for part of loans with floating rates to avoid
interest fluctuation risks and to fix interest payment. Execution/management of derivative transactions carried out 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’ vacancies, 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- 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.
Certain assumptions are adopted in the calculation of the fair value of financial instruments Accordingly, there may becases where the concerned values will differ when different assumptions are adopted.
2.

Fair value of financial instruments
Carrying amount, fair value and difference between the two were as follows. Notes to "Cash and deposits," "Cash anddeposits in trust" and “short-term loans payable” have been omitted because their fair values approximates their bookvalues. This is due to their nature as cash and as accounts settled over the short term. In addition, "Tenant leasehold andsecurity deposits," "Tenant leasehold and security deposits in trust," "Accounts payable - other," "Operating accounts
payable," "Accrued expenses," "Security deposits," and "Operating accounts receivable" are immaterial, so notes have been
omitted.
Previous fiscal period (from February 1, 2022, to July 31, 2022)(Unit: thousands of yen)
Carrying amount

Fair value

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

9,250,000

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

2,000,000

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

25,400,000

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

36,633,750(16,249)

102

102

Total liabilities(4) Derivative transactions-

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

Fair value

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

7,250,000

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

2,000,000

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

27,900,000

27,886,698(13,301)

37,150,000

37,092,817(57,182)

135,443

135,443-

Total liabilities(4) 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 to be areasonable approximation of the fair value as there are no significant changes in HCM’s credit standing after borrowing; therefore, the bookvalue is used as the fair value equivalent. Those with fixed interest rates are calculated by discounting the sum of principal and interest (*) ata 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 borrowings and other interest-bearing liabilities scheduled to be due after the account closing datePrevious fiscal period (As of July 31, 2022)

Investment
corporationbonds
Long-term loans
payable(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- 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.
Due within 1 year

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

9,250,000

Total

7,250,000

5,550,000

3,900,000

5,900,000

Due after
5 years

4,800,000

Current fiscal period (As of January 31, 2023)

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

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

4,000,000

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

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

Long-term loans
payable30,800,000

22,800,000102

Based on the pricepresented bycorresponding
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 “[Financial Instruments], 2. Fair value offinancial instruments” above.

- 28 -

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 January 31, 2023)
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
payable30,050,000

24,300,000

135,443

Based on the pricepresented bycorrespondent
financial institutions

Long-term loans
payable1,000,000-(Note)-

31,050,000

24,300,000

135,443-

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 “[Financial Instruments], 2. Fair value offinancial instruments” above.

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

Current fiscal period
As of Jan. 31, 2023

Deferred tax assets
Non-deductible accrued enterprise tax
Deferred gains or losses on hedges

14

4

11,3604,711

Subtotal deferred tax assets

11,375

4,716

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

14

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

Total deferred tax assets
Deferred tax liabilities
Deferred gains or losses on hedges
Net deferred tax assets (liabilities)
2.

Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate
(Unit: %)Previous fiscal period
As of Jul. 31, 2022

Current fiscal period
As of Jan. 31, 2023

31.46

31.46

(31.43)0.05
0.08(31.45)0.05
0.06

Statutory tax rate
[Adjustments]
Deductible distributions payable
Other
Effective income tax rate
[Share of Profit (Loss) of Affiliates Accounted for Using Equity Method]
Previous fiscal period (As of July 31, 2022)- 29 -

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 January 31, 2023)
Not applicable.
[Related-Party Transactions]
1.

Parent company, major corporate unitholders
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.

2.

Affiliated company and other
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.

3.

Fellow subsidiary company and other
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.

4.

Director, major individual unitholder and other
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Not applicable.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.

[Asset Retirement Obligations]
Previous fiscal period (As of July 31, 2022)
Not applicable.
Current fiscal period (As of January 31, 2023)
Not applicable.

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

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

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

66,525,573

78,272,804

11,747,231

516,188

78,272,804

78,788,993

86,364,000

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

The profit (loss) concerning investment and leasing properties is as stated in “Statement of Income” above.
[Revenue Recognition]
Previous fiscal period (from February 1, 2022, to July 31, 2022)
Information has been omitted due to the immateriality of the eligible revenue.
Current fiscal period (from August 1, 2022, to January 31, 2023)
Information has been omitted due to the immateriality of the eligible revenue.
[Segment Information]
1. Segment information
Disclosure has been omitted because HCM operates a single segment, which is the real estate leasing business.
2.

Related information
Previous fiscal period (from February 1, 2022, to July 31, 2022)(1) Information on products and services
Disclosure has been omitted because net sales to external customers for a single products and services category exceeds
90% of operating revenue on the statement of income.
(2) Information on geographic areas① Operating revenues
Disclosure has been omitted because net sales to external customers in Japan exceeds 90% of operating revenue on
the statement of income.
② Property, plant and equipment
Disclosure has been omitted because the amount of property, plant and equipment located in Japan exceeds 90% of
the amount of property, plant and equipment on the balance sheet.
(3) Information on major customers
Disclosure has been omitted because consent has not been obtained from the tenant.
Current fiscal period (from August 1, 2022, to January 31, 2023)(1) Information on products and services
Disclosure has been omitted because net sales to external customers for a single products and services category exceeds- 31 -

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.
90% of operating revenue on the statement of income.
(2) Information on geographic areas① Operating revenues
Disclosure has been omitted because net sales to external customers in Japan exceeds 90% of operating revenue on
the statement of income.
② Property, plant and equipment
Disclosure has been omitted because the amount of property, plant and equipment located in Japan exceeds 90% of
the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers
Disclosure has been omitted because consent has not been obtained from the tenant.
[Per Unit Information]
Previous fiscal period
From: Feb. 1, 2022
To: Jul. 31, 2022

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

Net assets per unit

107,930 yen

108,395 yen

Net income per unit

3,063 yen

3,555 yen

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

Net income (thousands of yen)Amount not attributable to common unitholders (thousands of yen)
Net income attributable to common investment units(thousands of yen)
Average number of investment units during period (units)[Significant Subsequent Events]
Not applicable.

- 32 -

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

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

1,100,134

1,278,374--

1,100,134

1,278,374

359,142

359,500

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

October 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)
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)-359,500-

38,323(110)

37,601(Note 13)

(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.

- 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.
(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.
(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 capital that
falls under the category of distributions reducing unitholders’ capital for tax purposes) at 308 yen per unit as cash distributions for the 14th
fiscal period (fiscal period ended January 2022), and started the payout on April 21, 2022.
(Note 13) HCM resolved at the board of directors’ meeting held on September 14, 2022, to set cash distributions in excess of earnings (return of capitalthat falls under the category of distributions reducing unitholders’ capital for tax purposes) at 307 yen per unit as cash distributions for the
15th fiscal period (fiscal period ended July 2022), and started the payout on October 21, 2022.

- 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.

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

Three Major
Metropolitan Areas(Note 3)Servicedhousing for theelderly

49,617

61.1

Core Cities (Note 4)

7,936

9.8

Other Areas (Note 5)

1,643

2.0

Three Major
Metropolitan Areas(Note 3)

2,959

3.6

Core Cities (Note 4)

1,701

2.1

Other Areas (Note 5)

-

-

-

-

-

-

63,858

78.6

Three Major
Metropolitan Areas(Note 3)--

Core Cities (Note 4)

2,117

2.6

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

Multi-use
facilities

Current fiscal period(as of January 31, 2023)
Total amount owned
As a percentage of total(millions of yen)assets(Note 1)(%)
(Note 2)Complex of
paid nursing
homes,medical
service related
facilities,etc.

Subtotal

2,117

2.6

Three Major
Metropolitan Areas(Note 3)

12,812

15.8

Core Cities (Note 4)--

Other Areas (Note 5)--

12,812

15.8--

78,78897.0

Subtotal
Other
Total
Deposits and other assets

2,454

3.0

Total assets

81,243100.0

Total liabilities

42,27552.0

Total net assets

38,96848.0(Note 1) “Total amount owned” is the carrying amount (in the case of trust beneficiary interests in real estate, the book value after depreciation 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 Metropolitan Areas. Regional corecities refers to cities with a population of 200,000 or more.
(Note 5) “Other Areas” refers to areas other than the Three Metropolitan Areas and Core Cities.

- 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.
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 January 31, 2023,
is as follows.
(i) Acquisition prices, etc. and shares of investment
Overview of trust beneficiary interests in real estate that HCM owns as of January 31,2023, is as follows.
Type ofspecified
asset

Area

Acquisition price(millions of yen)
(Note 1)

Property name

824

1.0

804

997

724

0.9

703

834

Bonsejour Musashi-shinjo

582

0.7

566

643

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

728

0.9

682

850

ASHEIM Hikarigaoka

1,385

1.7

1,409

1,590

ASHEIM Bunkyohakusan

1,430

1.8

1,392

1,790

3,580

4.5

3,312

4,140

3,050

3.8

2,933

3,480

1,740

2.2

1,834

2,100

824

1.0

809

905

Granda Tsuruma-Yamato

1,000

1.3

1,028

1,060

Smiling Home Medice Adachi

2,253

2.8

2,284

2,560

Hanakotoba Minami

1,071

1.4

1,079

1,270

Hanakotoba Miura

Bonsejour Yotsugi

615

0.8

649

668

SOMPO CARE La vie Re HamaKawasaki

1,710

2.2

1,706

1,850

Hanakotoba Shin-Yokohama

2,071

2.6

2,096

2,460

Hanakotoba Shin-Yokohama II

375

0.5

393

384

Hanakotoba Odawara

880

1.1

892

946

Sunny Life Kita-Shinagawa

1,825

2.3

1,842

2,090

Sunny Life Kamakura

1,418

1.8

1,465

1,620

Nichii Home Nishikokubunji

720

0.9

753

777

Royal Kawaguchi

1,260

1.6

1,317

1,340

Heartland Kawaguchi Meiseien

2,000

2.5

2,067

2,230

Granda Minamiurawa

1,022

1.3

1,068

1,100

Madoka Minamiurawa

822

1.0

856

883

Nichii Home Inage

1,508

1.9

1,588

1,670

Hanakotoba Oppama

500

0.6

544

509

35,91745.3

36,08440,746

1,950

2.5

1,882

2,100

1,930

2.4

1,816

2,350

1,200

1.5

1,142

1,420

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- 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.
Type ofspecified
asset

Area

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

Medical Home Bonsejour
Itami
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
SHIP Senri Building
SOMPO CARE La vie Re
Kobeikawadani
SOMPO CARE Sompo no ie
SayamaSubtotal

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

514

0.6

488

557

4,320

5.5

4,099

4,600

4,150

5.2

4,139

4,650

930

1.2

910

1,000

12,92016.3

12,812

14,200

1,288

1.6

1,355

1,300

600

0.8

657

647

29,802

37.6

29,30532,824SAWAYAKA Tachibanakan

1,520

1.9

1,304

1,610

1,380

1.7

1,198

1,480

770

1.0

759

838

Verde Minowa

1,620

2.0

1,643

1,730

Niigata Rehabilitation Hospital

2,060

2.6

2,117

2,300

NOAH GARDEN LEGEND

859

1.1

910

910

NOAH GARDEN L Grace

622

0.8

659

660

NOAH GARDEN Season Bell

1,350

1.7

1,461

1,520

NOAH GARDEN CASA RICH

1,619

2.0

1,701

1,730

11,80014.9

11,755

12,778

390

0.5

353

398

1,328

1.7

1,290

1,460

Subtotal
SAWAYAKA Tagawakan
Other Areas

Carrying amount(millions of yen)
(Note 3)SAWAYAKA Mekarikan
AIKOEN ICHIBANKAN Building

Core Cities

Share ofinvestment(%)(Note 2)

Verde Hotaka
Subtotal

Total (48 properties)

1,718

2.2

1,643

1,858

79,237100.0

78,78888,206(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 January 31, 2023.
(Note 4) “Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2023, 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.

- 37 -

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 January 31, 2023, is 4,959
million yen (Note).
(Note) The amount is obtained by multiplying the total of monthly rent in lease agreements effective as of January 31, 2023, by 12 (including
tax, etc.), and is rounded down to the nearest million yen.
Property
number
Paid nursing
home-1
Paid nursing
home-2
Paid nursing
home-3
Paid nursing
home-4

Property
name
AQUAMARINE
Nishinomiyahama
Bonsejour Chitosefunabashi
Bonsejour Hino

Bonsejour Musashishinjo
Medical Rehabilitation
Paid nursing
Home Bonsejour
home-5
Hadanoshibusawa
Paid nursing
ASHEIM Hikarigaoka
home-7
Paid nursing ASHEIM
home-8
Bunkyohakusan
Paid nursing SOMPO CARE La vie
home-9Re Machidaonoji
Paid nursing SOMPO CARE La vie
home-10
Re Azamino
Paid nursing SAWAYAKA
home-11
Tachibanakan
Paid nursing
SAWAYAKA Mekarikan
home-12Paid nursing SAWAYAKA
home-13
Tagawakan
Paid nursing GOOD TIME HOME
home-14
Fudo-mae
Paid nursing
Bonsejour Yotsugi
home-15
Paid nursing Medical Home
home-16
Bonsejour Itami
Kobe Gakuentoshi
Paid nursing
Building (Hapine Kobe
home-17
Gakuentoshi)
Paid nursing
GreenLife Moriguchi
home-18
Paid nursing Hapine Kobe Uozaki
home-19
Nibankan
Paid nursing Granda Tsurumahome-20
YamatoPaid nursing Smiling Home Medicehome-21Adachi
Paid nursing AIKOEN ICHIBANKAN
home-22
Building
Paid nursing
Hanakotoba Minami
home-23
Paid nursing
Hanakotoba Miura
home-24
Paid nursing SOMPO CARE La vie
home-25
Re Hama-Kawasaki
Paid nursing
home-26
Paid nursing
home-27
Paid nursing
home-28

Hanakotoba ShinYokohama
Hanakotoba ShinYokohama II
Hanakotoba Odawara

Paid nursing
Verde Minowa
home-29

Structure/ No. Constructionof floorscompletion(Note 1)
(Note 2)

leasable area (m2)(Note 3)

Leased area(m2)
(Note 4)

No. ofOperational
tenants
rate (%)(companies)(Note 6)(Note 5)

RC/5F

May 18, 2007

5,274.54

5,274.542

100.0

RC/B1 6F

Mar. 8, 1988

2,342.17

2,342.17

1

100.0

RC/3F

May 2, 1990

1,984.17

1,984.17

1

100.0

RC/4F

Feb. 21, 1985

1,710.43

1,710.43

1

100.0

RC/5F

Jul. 17, 1991

3,435.79

3,435.79

1

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

1,962.89

1

100.0

Mar. 3,
1989

2,129.87

2,129.87

1

100.0

RC/B1 9F

Jan. 7, 2009

12,636.48

12,636.48

1

100.0

S RC/9F

Sep. 6, 2006

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

4,311.20

3

100.0

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

RC/3F
RC/8F
RC/B1 6F
RC/B1 5F
RC/B1 6F
RC/4F
RC/3F
RC/B1 5F
RC/5F
SRC/11F(exclusivelyowned
portion)S/B1 4F
RC S/5F
RC/4F
S/5F
RC/7F
RC/4F
RC/4F
(exclusivelyowned
portion)
RC/9F
RC/B1 7F
RC/4F
①S/5F
②S RC/8F

Mar. 6,
2006
Feb. 27,2007
Oct. 29,
2007
Mar. 1,2004
Oct. 31,2005
Nov. 15,
2005
Jan. 20,
2006
Mar. 18,
1992
Mar. 28,
1989

Mar. 31,2010
Mar. 6,
1998
Nov. 16,2005
Feb. 4, 2010
Feb. 24,
2010
Jun. 27,
2007
Mar. 8,
2007
Mar. 15,
2004
Apr. 25,
2007
Sep. 16,2009①Nov. 20,2003
②Feb. 28,
1974

- 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.
Property
number

Property
namePaid nursing
Verde Hotaka
home-30
Paid nursing
home-31
Paid nursing
home-32
Paid nursing
home-33

Structure/ No. Constructionof floorscompletion(Note 1)
(Note 2)
①S SRC/5F②S/2F

Leased area(m2)
(Note 4)

No. ofOperational
tenants
rate (%)(companies)(Note 6)(Note 5)

①Sep. 29,
1982
②Jul. 1,
1989

6,352.86

6,352.86

1

100.0

Sunny Life KitaShinagawa

S/3F

Sep. 20, 2018

2,135.54

2,135.54

1

100.0

Sunny Life Kamakura

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/4F

Feb. 9, 2008

4,700.07

4,700.07

1

100.0

S/5F

Jul. 23, 2011

1,899.46

1,899.46

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

1100.0①Apr. 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

-

-

217,545.72

217,545.72

57

100.0

Nichii Home
Nishikokubunji
SOMPO CARE La vie
Paid nursingRe
home-34
Kobeikawadani
Paid nursing SOMPO CARE Sompo
home-35
no ie Sayama
Paid nursing
Royal Kawaguchi
home-36
Paid nursing NOAH GARDEN
home-37LEGEND
Paid nursing NOAH GARDEN L
home-38
Grace
Paid nursing NOAH GARDEN
home-39
Season Bell
Paid nursing Heartland Kawaguchi
home-40
Meiseien
Paid nursing
Granda Minamiurawa
home-41
Paid nursing
Madoka Minamiurawa
home-42
Paid nursing
Nichii Home Inage
home-43
Paid nursing
Hanakotoba Oppama
home-44
Serviced
SOMPO CARE Sompo
housing forno ie S Awajiekimae
the elderly -1
Serviced
SOMPO CARE Sompo
housing forno ie S Kobekamisawa
the elderly -2
Serviced
NOAH GARDEN CASA
housing for
RICH
the elderly -3

MedicalNiigata Rehabilitation ①RC/3F
service-related
Hospital②S/5F
facilities-1
Complex of
paid nursing
homes,medical SHIP Senri Building
service related
facilities,etc.-1
Total(Note 1)

leasable area (m2)(Note 3)

“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)

“Occupancy rate” indicates the leased area as a percentage of the leasable area of each owned asset as of January 31, 2023

, and is rounded to one decimal place.

- 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.
(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

Property name

AQUAMARINE
Nishinomiyahama
Bonsejour Chitosefunabashi
Bonsejour Hino

Type of facility

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

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

Bonsejour Musashishinjo
MedicalRehabilitation Home Paid nursing
Bonsejour
home
Hadanoshibusawa
Paid nursing
ASHEIM Hikarigaoka
home
ASHEIM
Paid nursing
Bunkyohakusan
home
SOMPO CARE La vie Paid nursing
Re Machidaonoji
home
SOMPO CARE La vie Paid nursing
Re Azamino
home
SAWAYAKA
Paid nursing
Tachibanakan
home
SAWAYAKA
Paid nursing
Mekarikan
home
SAWAYAKA
Paid nursing
Tagawakan
home

Paid nursing
home-14

GOOD TIME HOME
Fudo-mae

Paid nursing
home-15

Bonsejour Yotsugi

Paid nursing
home-16

Medical Home
Bonsejour Itami

Paid nursing
home-17

Kobe Gakuentoshi
Building (Hapine
Kobe Gakuentoshi)

Paid nursing
home-5

Paid nursing
home

Capacity(persons)(Note 1)

No. ofresidents(persons)(Note 1)

Occupancy
rate(%)(Note 2)

90

100

99

99.0

July 1, 2022

42

47

37

78.7

December 1, 2022

56

58

54

93.1

December 1, 2022

46

49

47

95.9

December 1, 2022

100

101

90

89.1

December 1, 2022

83

89

77

86.5

October 1, 2022

50

52

48

92.3

October 1, 2022

163

169

136

80.5

October 1, 2022

145

145

139

95.9

October 1, 2022

104

104

98

94.2

October 1, 2022

95

95

85

89.5

October 1, 2022

60

60

59

98.3

July 29, 2022

61

67

57

85.1

October 1, 2022

61

65

53

81.5

December 1, 2022

62

64

46

71.9

December 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

66

73.3

December 1, 2022

82

82

74

90.2

November 1,
2022

90

90

81

90.0

November 1,
2022

Proud Life Inc.

51

51

48

94.1

Proud Life Inc.

53

54

54

100.0

Sompo Care
Inc.

58

58

52

89.7

October 1, 2022

Proud Life Inc.

136

136

123

90.4

November 1,
2022

Proud Life Inc.

29

30

29

96.7

October 1, 2022

Proud Life Inc.

60

65

64

98.5

October 1, 2022

174

206

198

96.1

October 1, 2022

121

174

172

98.9

April 1, 2022

66

66

57

86.4

October 1, 2022

Operator

Benesse Style
Care Co., Ltd.
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.

Paid nursinghome
Residential type
Benesse Style
paid nursing
Care Co., Ltd.
home
GREEN LIFE
Co., Ltd.

Hapine Kobe Uozaki
Nibankan
Granda TsurumaYamato

Paid nursing
home
Paid nursing
home
Paid nursing
home

Paid nursing
home-21

Smiling Home
Medice Adachi

Paid nursing
home

Paid nursing
home-22

AIKOEN ICHIBANKAN Paid nursing
Building
home

GREEN LIFE
Co., Ltd.
GREEN LIFE
Co., Ltd.
Benesse Style
Care Co., Ltd.
GREEN LIFEHIGASHINIHON Co., Ltd.
MedicalCorporation
AIKOKAI

Paid nursing
home-23
Paid nursing
home-24

GreenLife Moriguchi

Hanakotoba Minami
Hanakotoba Miura

Paid nursing
home
Paid nursing
home

Paid nursing
home-25

SOMPO CARE La vie
Re Hama-Kawasaki

Paid nursing
home

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

Hanakotoba ShinYokohama
Hanakotoba ShinYokohama II
Hanakotoba
OdawaraPaid nursing
home
Paid nursing
home
Paid nursing
home
Paid nursing
home
Paid nursing
home
Paid nursinghomeVerde Minowa
Verde Hotaka
Sunny Life KitaShinagawa

No. of rooms(rooms)(Note 1)

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

Paid nursing
home

Paid nursing
home-18
Paid nursing
home-19
Paid nursing
home-20

Preparation dateof Property
DisclosureStatement ofImportant
Matters(Note 3)

Verde
Corporation
Verde
Corporation
Kawashima
Corporation- 40 -

November 1,
2022
November 1,
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.

Property
number

Property namePaid nursing
home-32

Sunny Life
Kamakura

Paid nursing
home-33

Nichii Home
Nishikokubunji

Paid nursing
home-34

SOMPO CARE Lavie
Re Kobeikawadani
SOMPO CARE
Sompo no ie
SayamaPaid nursing
home-35

Type of facility

89.1

July 1, 2022

46

46

42

91.3

January 1, 2023

80

80

66

82.5

October 1, 2022

50

42

84.0

October 1, 2022

Paid nursing
home

SENIOR LIFE
SUPPORT
Co.,Ltd.

56

56

51

91.1

October 1, 2022

NOAH KONZER
Co.,Ltd

72

72

52

72.2

August 12, 2022

NOAH KONZER
Co.,Ltd

51

51

47

92.2

August 12, 2022

NOAH KONZER
Co.,Ltd

136

136

97

71.3

August 12, 2022

MEISHO.Co.,Ltd

97

100

100

100.0

November 15,
2022

58

60

51

85.0

December 1, 2022

54

54

53

98.1

December 1, 2022

85

95

58

61.1

March 1, 2022

Proud Life Inc.

59

59

57

96.6

November 1,
2022

Sompo Care
Inc.

137

137

102

74.5

October 1, 2022

Sompo Care
Inc.

85

85

74

87.1

April 1, 2022

NOAH KONZER
Co.,Ltd

115

115

85

73.9

August 12, 2022

Hospital, paid
nursing homewith nursing
home

GREEN LIFE Co.,
Ltd.

181

200

200

100.0

July 1, 2022

-

-

4,034

4,265

3,796

89.0

-

Paid nursing
home-38

NOAH GARDEN
L Grace

Paid nursing
home-39NOAH GARDEN
Season Bell

Paid nursing
home-40

Heartland
Kawaguchi
Meiseien

Paid nursing
home-41

GrandaMinamiurawa

Paid nursing
home

Paid nursing
home-42

MadokaMinamiurawa

Paid nursing
home

Paid nursing
home-43

Nichii Home Inage

Paid nursing
home

Total

114

50

NOAH GARDEN
LEGENDSHIP Senri Building(Note 4)128

Sompo Care
Inc.

Paid nursing
home-37

NOAH GARDENCASA RICH

128

Paid nursing
homeRoyal Kawaguchi

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

Capacity(persons)(Note 1)

Occupancy
rate(%)(Note 2)

No. of rooms(rooms)(Note 1)

Residential typeKawashima
paid nursing
Corporation
home
Nichii
Paid nursing
Carepalace
home
Company
Paid nursing
Sompo Care
home
Inc.

Paid nursing
home-36

Paid nursing
home-44
Servicedhousing for theelderly -1
Servicedhousing for theelderly -2
Servicedhousing for theelderly -3
Complex of paid
nursinghomes,medical
service related
facilities,etc.-1

Operator

Preparation dateof Property
DisclosureStatement ofImportant
Matters(Note 3)

No. ofresidents(persons)(Note 1)

Residential typepaid nursinghome
Residential typepaid nursinghome
Residential typepaid nursing
home
Paid nursing
home

Paid nursing
homeServicedhousing for theelderly
Servicedhousing for theelderly
Servicedhousing for theelderly

BenesseStyle Care
Co., Ltd.
BenesseStyle Care
Co., Ltd.
Nichii
Carepalace
Company(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.

- 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.
(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)

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 1External
evaluation

Hospital certified by Japan Council for Quality Health Care (Certification number: JC1424-3) 3rdG:Ver.1.1(Under
Renewal Review)

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,
neurosurgery, surgery, internal medicine,
Training facilities certified by the Japanese
Facility certificationneurology and Palliative care internal
Association of Rehabilitation Medicine
medicine
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.

- 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.
(v) Earnings performance(Unit: thousands of yen)
Current fiscal period (from August 1, 2022, to January 31, 2023)
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

26,760

4,249

2,100

2,175

236

17,599400

58,181

Bonsejour Chitosefunabashi

5,610

1,813

225

-

122

3,048

401

21,371

Bonsejour Hino

5,078

1,247

214

-

85

3,130

400

19,473

4,128

1,030

167

-

82

2,447

400

16,136

8,399

1,813

213

-

154

5,817

400

21,114

5,447

2,158

62

-

225

2,875

124

11,427ASHEIM Hikarigaoka

16,407

3,868

381

72

212

11,471400

40,813ASHEIM
Bunkyohakusan

12,304

2,572

381

-

129

8,819

400

39,003

SOMPO CARE La vie Re
Machidaonoji

49,166

5,945

780

2,457

392

39,190400

95,024

SOMPO CARE La vie Re
Azamino33,085

4,705

780

2,500

285

24,413400

76,528SAWAYAKA
Tachibanakan

26,635

2,669

1,200

-

370

21,994400

47,21626,483

2,982

1,200

-

273

21,628400

43,378

8,485

1,106

1,200

-

119

5,659

400

12,858GOOD TIME HOME
Fudo-mae

16,856

3,061

600

1,935

182

10,677400

44,821

Bonsejour Yotsugi

4,933

949

223

-

73

3,286

400

20,718

6,531

1,388

371

-

111

4,260

400

13,951

53,775

9,568

900

1,184

579

41,142400

113,767

GreenLife Moriguchi

43,543

6,999

1,363

6,344

379

28,056400

104,512

Hapine Kobe Uozaki
Nibankan

9,579

1,393

1,200

-

90

6,495

400

24,416Granda TsurumaYamato

7,262

1,934

618

-

152

4,158

400

27,065

Smiling Home Medice
Adachi16,011

3,327

540

-

177

11,567400

60,763

AIKOEN ICHIBANKAN
Building

11,338

2,551

780

2,850

112

4,644

400

18,110

Hanakotoba Minami

8,680

1,541

600

799

79

5,260

400

27,180

Hanakotoba Miura

10,347

1,553

600

1,380

88

6,325

400

16,377

Bonsejour Musashishinjo
Medical Rehabilitation
Home Bonsejour
Hadanoshibusawa
Medical Rehabilitation
Home Bonsejour
Komaki (Note 4)

SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

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

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 August 1, 2022, to January 31, 2023)
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

19,714

3,463

2,770

480

206

12,393400

45,030

Hanakotoba ShinYokohama

18,364

4,412

900

3,859

249

8,543

400

52,091

Hanakotoba ShinYokohama II

6,474

2,521

600

800

92

2,061

400

10,398

Hanakotoba Odawara

9,360

1,388

600

700

99

6,172

400

24,412

Verde Minowa

27,058

5,242

1,020

-

508

19,887400

56,737

Verde Hotaka

25,692

2,208

1,020

380

249

21,435400

45,848Sunny Life KitaShinagawa

10,185

2,798

600

-

119

6,265

401

45,580Sunny Life Kamakura

13,607

2,767

720

889

179

8,650

400

37,942

Nichii Home
Nishikokubunji

4,265

1,220

660

50

92

1,842

400

18,714

SOMPO CARE Lavie Re
Kobeikawadani

10,892

-

750

1,309

189

8,243

400

34,578

SOMPO CARE Sompo
no ie Sayama

4,010

-

750

57

103

2,700

400

17,589

8,145

-

1,647

754

180

5,159

402

34,214

NOAH GARDEN LEGEND

8,533

-

300

320

129

7,615

167

26,082

NOAH GARDEN
L Grace

6,026

-

300

-

101

5,458

166

19,453

NOAH GARDEN Season
Bell12,420

-

720

40

212

11,047400

43,248Heartland Kawaguchi
Meiseien

12,357

-

720

-

223

11,013400

54,036Granda Minamiurawa

5,923

-

480

277

134

4,831

200

26,979

Madoka Minamiurawa

3,909

-

480

-

107

3,121

200

21,562

Nichii Home Inage

8,532

-

605

22

176

7,456

271

29,985

Hanakotoba Oppama

1,995

-

270

-

52

1,490

181

6,743

SOMPO CARE Sompo
no ie S Awajiekimae

27,341

4,902

510

-

298

21,230400

58,346

SOMPO CARE Sompo
no ie S Kobekamisawa

17,151

2,910

510

255

183

12,892400

36,031NOAH GARDEN CASA
RICH

14,748

-

300

-

236

14,044

166

50,074

Royal Kawaguchi

Not disclosed(Note 2)- 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.
Current fiscal period (from August 1, 2022, to January 31, 2023)
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)

Niigata Rehabilitation
Hospital

27,856

9,654

1,030

-

387

16,285500

78,308SHIP Senri Building

80,552

27,640

1,500

-

1,182

49,829400

341,078

801,972 141,560

36,46631,894

10,417563,645 17,987

2,189,281

Total

2,427,608

2,417,024

10,583(Note 1)All figures indicated are rounded down to the nearest thousand yen.

(Note 2)

“Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not beenobtained 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(Note 4)

The figures are through the disposition date of September 27, 2022.

- 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.
(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 January 31, 2023, as
the appraisal date. The real estate appraisal report only states judgments and opinions of the appraiser as of a specificpoint 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.

834

849

4.7

827

4.8

4.9

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

Paid nursing
home-5

MedicalThe Tanizawa
Rehabilitation
Sogo Appraisal
Home BonsejourCo., Ltd.
Hadanoshibusawa

850

864

5.0

844

5.1

5.2

47

6.5

Paid nursing
home-7ASHEIM
Hikarigaoka

Japan Real
EstateInstitute

1,590

1,590

4.5

1,590

4.3

4.6

76

5.5

Paid nursing
home-8ASHEIM
Bunkyohakusan

Japan Real
EstateInstitute

1,790

1,800

4.1

1,780

3.9

4.2

74

5.2

Paid nursing
home-9SOMPO CARE La
vie ReMachidaonoji

Japan Real
EstateInstitute

4,140

4,160

4.5

4,110

4.3

4.6

193

5.3

Paid nursing
home-10

SOMPO CARE La
vie Re Azamino

Japan Real
EstateInstitute

3,480

3,500

4.3

3,450

4.1

4.4

156

5.1

Paid nursing
home-11SAWAYAKA
Tachibanakan

Japan Real
EstateInstitute

1,610

1,620

5.3

1,590

5.1

5.5

93

6.1

Paid nursing
home-12SAWAYAKA
Mekarikan

Japan Real
EstateInstitute

1,480

1,490

5.4

1,460

5.2

5.6

85

6.2

Paid nursing
home-13SAWAYAKA
Tagawakan

Japan Real
EstateInstitute

398

401

5.5

395

5.3

5.7

25

6.4

Paid nursing
home-14

GOOD TIMEHOME Fudo-mae

Japan Real
EstateInstitute

2,100

2,120

4.1

2,080

3.9

4.2

91

5.2

Paid nursing
home-15

Bonsejour Yotsugi

The Tanizawa
Sogo Appraisal
Co., Ltd.

905

922

4.6

897

4.7

4.8

47

5.7

- 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

Paid nursing
home-16

Medical Home
Bonsejour Itami

The Tanizawa
Sogo Appraisal
Co., Ltd.

Paid nursing
home-17

Kobe Gakuentoshi
Building

Paid nursing
home-18

GreenLife
Moriguchi

Paid nursing
home-19

Hapine Kobe
Uozaki Nibankan

Paid nursing
home-20

Granda TsurumaYamato

Paid nursing
home-21

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)

557

566

5.1

553

5.2

5.3

38

7.5

4,600

4,660

4.5

4,580

4.3

4.7

226

5.2

4,650

4,720

4.4

4,620

4.2

4.6

220

5.3

1,000

1,020

4.5

997

4.3

4.7

48

5.2

The Tanizawa
Sogo Appraisal
Co., Ltd.

1,060

1,070

4.7

1,050

4.8

4.9

53

5.3

Smiling Home
Medice Adachi

The Tanizawa
Sogo Appraisal
Co., Ltd.

2,560

2,590

4.5

2,540

4.6

4.7

120

5.3

Paid nursing
home-22

AIKOENICHIBANKAN
Building

The Tanizawa
Sogo Appraisal
Co., Ltd.

838

840

5.1

837

5.2

5.3

43

5.6

Paid nursing
home-23

Hanakotoba
MinamiJapan Real
EstateInstitute

1,270

1,280

4.3

1,260

4.1

4.4

56

5.2

Paid nursing
home-24

Hanakotoba
Miura

The Tanizawa
Sogo Appraisal
Co., Ltd.

668

676

4.8

665

4.9

5.0

35

5.6

Paid nursing
home-25

SOMPO CARE La
vie Re HamaKawasaki

JLL Morii
Valuation &Advisory K.K.

1,850

1,880

4.5

1,820

4.3

4.7

89

5.2

Paid nursing
home-26

Hanakotoba ShinYokohama

Japan Real
EstateInstitute

2,460

2,480

4.1

2,440

3.9

4.2

109

5.2

Paid nursing
home-27

Hanakotoba ShinYokohama II

Japan Real
EstateInstitute

384

385

5.0

382

4.8

5.2

21

5.8

Paid nursing
home-28

Hanakotoba
Odawara

The Tanizawa
Sogo Appraisal
Co., Ltd.

946

959

4.9

941

5.0

5.1

49

5.6

Paid nursing
home-29

Verde Minowa

1,730

1,740

4.9

1,720

4.7

5.1

109

6.7

Paid nursing
home-30

Verde Hotaka

1,460

1,470

5.3

1,450

5.1

5.5

91

6.9

Paid nursing
home-31

Sunny Life KitaShinagawa

2,090

2,120

4.2

2,070

4.0

4.4

90

4.9

Paid nursing
home-32

Sunny Life
Kamakura

1,620

1,640

4.4

1,610

4.5

4.6

76

5.3

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.
The Tanizawa
Sogo Appraisal
Co., Ltd.

- 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.
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-33

Nichii Home
Nishikokubunji

Daiwa Real
EstateAppraisal Co.,
Ltd.

777

790

4.2

771

4.0

4.4

36

5.0

Paid nursing
home-34

SOMPO CARE
Lavie Re
KobeikawadaniRich 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.

1,340

1,350

4.2

1,330

4.0

4.4

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

2,230

2,240

4.2

2,210

4.0

4.3

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

Paid nursing
home-43

Nichii Home Inage

Rich Appraisal
Institute Co.,
Ltd.

1,670

1,700

4.6

1,660

4.4

4.8

83

5.5

Paid nursing
home-44

Hanakotoba
OppamaThe Tanizawa
Sogo Appraisal
Co., Ltd.

509

512

4.4

508

4.5

4.6

25

5.0

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

Japan Real
EstateInstitute

2,350

2,370

4.8

2,320

4.6

5.0

116

6.0

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

Japan Real
EstateInstitute

1,420

1,430

4.9

1,400

4.7

5.1

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

678

5.2

- 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.
Summary of Appraisal Report (Note 1)

Property number

Property name

Total

Appraisalcompany

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)

88,206

89,126-

87,574

-

-

4,390

Appraisal
NOI
yield
(%)
(Note 4)

5.5

(Note 1) “Appraisal value” is based on the appraisal report with January 31, 2023, 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 SHIP Senri Building, 4.5% for the first fiscal year and 4.6% fromthe second fiscal year.
(Note 3) “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in the real estate appraisal report with January 31,
2023, as the appraisal date and is rounded down to the nearest million yen. In addition, NOI is revenue before deducting depreciation and differsfrom 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- 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.
(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 January 31, 2023). The annual rent and tenant leasehold and security deposits ofeach property are not disclosed as consent from the tenants has not been obtained.
LeasedShareContract
area
expiration date(%)
Tenant name
Property name2(m )(Note 3)(Note 2)
(Note 1)
SOMPO CARE La vie Re
October 31,
7,720.17
3.5
Machidaonoji
2027
SOMPO CARE La vie Re
June 27,
5,789.25
2.7
Azamino2027
SOMPO CARE La vie Re
December 31,
2,535.29
1.2
Hama-Kawasaki
2027
SOMPO CARE Lavie Re
3,824.54
1.8 March 30, 2036
Sompo Care Inc. Kobeikawadani
SOMPO CARE Sompo no ie
September 30,
1,997.87
0.9
Sayama2025
SOMPO CARE Sompo no ie S
July 31,5,745.15
2.6
Awajiekimae
2034
SOMPO CARE Sompo no ie S
July 31,
4,058.35
1.9
Kobekamisawa
2034
Total
31,670.62
14.6―
AQUAMARINEMay 31,
5,189.42
2.4
Nishinomiyahama
2037
Kobe Gakuentoshi Building
March 28,
12,636.48
5.8(Hapine Kobe Gakuentoshi)
2041
GREEN LIFE
October 19,
GreenLife Moriguchi
8,356.85
3.8
Co., Ltd.
2039
Hapine Kobe Uozaki
March 28,
1,772.89
0.8
Nibankan
2041
Total
27,955.64
12.9―
October 27,
24,813.85
11.4
Ship Healthcare SHIP Senri Building
2038
Estate Inc.
Total
24,813.85
11.4―(Note 1) “Leased area” indicates the area stated in lease agreements concluded with each tenant as of January 31, 2023. 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 January 31, 2023, and is rounded to the first decimal place.
(Note 3) “Contract expiration date” indicates the contract expiration date 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)43

59,50866,206

75.1

3

4,749

5,500

6.0

1

2,060

2,300

2.6

1

12,92014,20016.3

4879,237

88,206100.0(Note 1) “Period-end appraisal value” indicates amounts stated in the appraisal report with appraisal date of January 31, 2023, prepared by realestate appraisers of Japan Real Estate Institute, The Tanizawa Sogo Appraisal Co., Ltd., Rich Appraisal Institute Co., Ltd., Daiwa Real- 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.
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.

(b) By area
Classification/region
Three Major Metropolitan
Areas
Tokyo Metropolitan
Area

Number ofproperties

Period-end
appraisal value(millions of yen)

Acquisition price(millions of yen)

Share (%)

37

65,71973,57082.9

2735,91740,746

45.3

Kinki Area

10

29,80232,82437.6

Chubu Area

0

-

-

-

Core Cities

9

11,80012,778

14.9

Other Areas

2

1,718

1,858

2.2

48

79,237

88,206

100.0

Total

- 51 -

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

13

28,68432,20044.6

50 rooms or more, but lessthan 100 rooms

28

32,14235,70550.0

Less than 50 rooms

5

3,431

3,801

5.3

Total

46

64,25771,706100.0(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 itis 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 January
31, 2023, the following are the major estimated amounts. The estimated construction costs include the portion
separately charged to expenses in accounting.
Property name
(Location)
Verde Hotaka(Kawaba-mura, Tone-gun, Gunma)
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)(Kobe-shi, Hyogo)
SOMPO CARE La vie Re Machidaonoji(Machida City, Tokyo)
SAWAYAKA Tagawakan(Tagawa-shi, Fukuoka)b.

PurposeScheduled period

Renovation of exterior walls ofsouth building

From: Apr. 2023
To: Jul. 2023

Renewal of accumulated power
meter

From: Jun. 2023
To: Jun. 2023

Renewal of air conditioners incommon areas

From: May. 2023
To: Jun. 2023
From: May. 2023
To: Jun. 2023

Rooftop waterproofing

Estimated construction costs(thousands of yen)
Payment
Total
Total
duringamountamountperiod already paid
58,300--16,600--15,000

-

-

9,000

-

-

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 January 31, 2023, the following are the major amounts. The capital expenditures in thecurrent fiscal period amounted to 152,328 thousand yen. Combined with the repair expenses separately charged
to expenses amounting to 31,894 thousand yen, HCM implemented a total of 184,222 thousand yen of
construction work.

Property name
(Location)

Niigata Rehabilitation Hospital(Niigata-shi, Niigata)
ASHEIM Hikarigaoka(Nerima-ku, Tokyo)
Verde Minowa(Takasaki-shi, Gunma)

PurposeRooftop waterproofing andrenovation of exterior walls ofsouth building
Renewal of air conditioners incommon areas
Renewal of two boilers in themain building

From: Nov. 2022
To: Dec. 2022
From: Jan. 2023
To: Jan. 2023--

Other real estate
Total

c.

Scheduled period
From: Oct. 2022
To: Jan. 2023

Construction costs(thousands of yen)
50,00019,25016,21066,867
152,328

Cash Reserves for Long-Term Repair Plans
Not applicable.

- 52 -