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

(REIT) Financial Report for Fiscal Period Ended July 2023
September 15, 2023

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

Representative:

Yuji Fujise, Executive Director

REIT Securities Issuer

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

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

October 30, 2023
October 20, 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 July 2023 (from February 1, 2023, to July 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 Jul. 2023
2,438
(7.4)
1,268
(12.8)
1,068(16.4)
1,068(16.5)
Ended Jan. 2023
2,632
11.0
1,453
14.9
1,279
16.2
1,278
16.2
Fiscal period

Net income per unit

Return on equity

yen
2,970
3,555

Ended Jul. 2023
Ended Jan. 2023

%
2.8
3.3

Ratio of ordinary income
to total assets
%
1.3
1.6

Ratio of ordinary income
to operating revenue
%
43.8
48.6

(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
in excess ofearnings per
distribution in
distribution in distribution in excess
distribution in
ratio
to net assets
unit
earnings
of earnings)
excess of earnings) excess of earnings)
excess of earnings)
yen
3,282
3,557

yen
2,828
3,557

Ended Jul. 2023
Ended Jan. 2023

yen
454
0

million yen
1,179
1,278

million yen
1,016
1,278

million yen
163
‐

%
95.2
100.0

%
2.6
3.3

(Note 1) Total distributions in excess of earnings of 163 million yen (454 yen per unit) for the fiscal period ended July 2023 are comprised of (1) total distribution
amount from reserve for temporary difference adjustment of 51 million yen (143 yen per unit ) due to a change in deferred gains or losses on hedges
recorded as net asset deduction items for the current fiscal period and (2) total distribution amount of 111 million yen (311 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 2023. 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.

(3) Financial Position
Fiscal period
Ended Jul. 2023
Ended Jan. 2023

Total assets
million yen
80,78981,243

Net assets
million yen
38,61738,968‐1‐

Equity ratio
%
47.8
48.0

Net assets per unit
Yen
107,421
108,395

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 Flows

Ended Jul. 2023

Net cashprovided by (used in) operating
activities
million yen
1,501

Net cashprovided by (used in) investing
activities
million yen(184)

Net cashprovided by (used in) financing
activities
million yen(1,280)Ended Jan. 2023

3,268

(2,210)(854)

Fiscal period

Cash and cash equivalents at endof period
million yen
1,680
1,644

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

Fiscal period

Operating revenue

Ending Jan. 2024
Ending Jul. 2024

million yen
2,438
2,438

Operating income% million yen
(0.0)
1,255
0.0
1,253

Ordinary income% million yen
(1.0)
1,051
(0.1)
1,037

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

Net income% million yen
(1.7)
1,050
(1.3)
1,036

(Reference) Forecast net income per unit (fiscal period ending January 2024)
Forecast net income per unit (fiscal period ending July 2024)

%
(1.7)
(1.3)

yen
2,920
2,884

yen
315
316

Distribution
per unit(including
distribution
in excess ofearnings)
yen
3,235
3,200

2,920 yen
2,884 yen

* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement
1) Changes in accounting policies accompanying amendments to accounting standards, etc.: No
2) Changes in accounting policies other than ①:
No3) Changes in accounting estimates:
No4) Retrospective restatement:No(2) Total Number of Investment Units Issued and Outstanding
1) Total number of investment units issued and outstanding (including treasury investment units) at end of period
359,500 units
359,500 units
Fiscal period ended July 2023
Fiscal period ended January 2023
2) Number of treasury investment units at end of period
Fiscal period ended July 2023
‐ units(Note)

Fiscal period ended January 2023

‐ 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 32.

* This financial report is exempt from the audit by a certified public accountant or an auditing firm.
* Special noteThis forecast is a future prospect determined by HCM based on information currently available and includes many uncertain factors.
Actual operating revenue, operating income, ordinary income, net income, distribution per unit (excluding distribution in excess ofearnings), distribution in excess of earnings per unit and distribution per unit (including distribution in excess of earnings) are subject
to change due to changes in circumstances. In addition, the forecast is not a guarantee of the amount of distribution and distribution
in excess of earnings. For the assumptions underlying the above forecast, please see “Assumptions Underlying Earnings Forecast for
Fiscal Period Ending January 2024 and Fiscal Period Ending July 2024” on pages 10 and 11.

‐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 ............................................................................................................................................................. 12(1) Balance Sheet ................................................................................................................................................................ 12(2) Statement of Income ..................................................................................................................................................... 14(3) Statement of Unitholders' Equity .................................................................................................................................. 15(4) Statement of Cash Distributions .................................................................................................................................... 17(5) Statement of Cash Flows ............................................................................................................................................... 20(6) Notes on the Going Concern Assumption...................................................................................................................... 21(7) Notes on Matters Concerning Significant Accounting Policies....................................................................................... 21(8) Notes on Financial Statements ...................................................................................................................................... 23(9) Status of Capital Increases ............................................................................................................................................. 34
3. Reference Information .......................................................................................................................................................... 36(1) Information on Prices of Assets Under Management, Etc. ............................................................................................ 36(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 Status
1) 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 July 2023 (February
1, 2023 to July 31, 2023) (hereinafter, the “17th fiscal period” or the “current fiscal period”) stands at 359,500 units.
(b) Investment Environment and Performancea. Investment Environment
HCM was established as a result of the social challenge in which expansion and enhancement of nursing care services
and medical services by healthcare facilities has become an urgent issue due to the increasing healthcare requirementsof aging populations within developed nations that has been further magnified by a continuing nursing care shortage.
The government has also set a target in “Housing Life Basic Plan (nationwide plan)” to increase the ratio of housing
supply for the elderly from 2.5% in 2018 to 4% by 2030.
HCM invests in and owns healthcare facilities, for which social demand is growing, in a stable manner to promote
appropriate maintenance/management and new supply of such facilities. By doing so, HCM seeks to realize a society
where all people can live vibrantly and with peace of mind, as well as to secure stable income and to achieve steady
growth of its portfolio.
b. Performance
During the current fiscal period, HCM made no acquisition or disposition of assets.
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, economic activities have gradually normalized and have begun to steadily
recover due to the lifting of restrictions on activities related to the coronavirus infection (COVID‐19). On the other hand,
we need to continue to monitor the downside risks to the economy due to the prolonged situation in Ukraine and theresulting price hikes, as well as the effects of the global monetary tightening.
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 levelof the five‐level rating system. In order to realize the philosophy of HCM, "A society where all people can live vibrantly
and with peace of mind," HAM aims to contribute to the aged society and maximize unitholder value over the medium
to long‐term by promoting the supply of healthcare facilities as social infrastructure and building a portfolio specializingin healthcare facilities.
(c) Overview of Financing
HCM upholds stable financial management as its basic policy for securing stable income and maintaining and enhancing
asset value over the medium to long‐term.
In the current fiscal period, HCM refinanced 2,000 million yen in loans that were due for repayment on March 30, 2023.
‐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.
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 48.5%.
HCM’s rating as of July 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 performance described above, for the current fiscal period, operating revenue stood at 2,438 million yen,operating income at 1,268 million yen, ordinary income at 1,068 million yen and net income at 1,068 million yen.
In accordance with the cash distributions policy described in Article 36, Paragraph 1 of its Articles of Incorporation, HCM
determines that the amount of distributions shall exceed the amount equivalent to 90% of its distributable profit as
stipulated in Article 67‐15 of the Act on Special Measures Concerning Taxation, and shall be up to its profits as defined in
Article 136, Paragraph 1 of the Investment Trust Act. Following this policy, HCM has decided that, of profits as defined in
Article 136, Paragraph 1 of the Investment Trust Act, it shall distribute 1,016,666,000 yen, which is the maximum integral
multiple of 359,500 units issued and outstanding as distributions of earnings. Accordingly, distributions of earnings perunit were 2,828 yen.
In addition, HCM is to make distributions in excess of earnings, of which the 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 of Investment Corporations), considering the impact of net asset deduction items on distributions, pursuant
to the policy for cash distributions in excess of earnings provided in Article 36, Paragraph 2 of its Articles of Incorporation.
During the current fiscal period, since a change in deferred gains or losses on hedges were recorded as net asset deduction
items, HCM decided to make distributions of allowance for temporary difference adjustments in the amount of 51,408,500
yen. As a result, distributions in excess of earnings per unit (allowance for temporary difference adjustments) came to 143
yen.
Furthermore, in accordance with the policy for cash distributions in excess of earnings provided in Article 36, Paragraph 2of its Articles of Incorporation, HCM is to make its distributions in excess of earnings (return of capital that falls under the
category of distributions reducing unitholders’ capital for tax purposes) in each period on a continuous basis, as a rule.
During the current fiscal period, HCM decided to distribute 111,804,500 yen, an amount roughly equivalent to 20% ofdepreciation recorded in the current fiscal period, as distributions in excess of earnings. Accordingly, distributions in excessof earnings per unit (of distributions in excess of earnings from other distributions) came to 311 yen.
As a result, distribution per unit came to 3,282 yen.
(Note 1) Distributions in excess of earnings are distributed up to the amount equivalent to 20% of the depreciation recorded in the accounting
period immediately before the accounting period when HCM will pay said distribution, sufficiently taking into consideration the amountof capital expenditures necessary for maintaining and improving the competitiveness of HCM’s assets under management, the financial
position of HCM and other factors.
However, 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 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 their distributions in excess of earnings up to an amount equivalent to 60% of the depreciation
recorded on the last day of the accounting period.

‐6‐

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)

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.
As nursing care in the same household is forecast to be more difficult than ever before due to extreme aging and change
to family structures, new development and expansion of healthcare facilities are required to respond to the growing
demand for nursing care and medical services, and measures to achieve them are being promoted.
In “Japan Revitalization Strategy ‐JAPAN is BACK‐“ dated June 14, 2013, the Headquarters for Japan's Economic
Revitalization announced a policy to “enact a guideline concerning acquisition and management of properties including
housing for the elderly to promote the utilization of healthcare REITs in an effort to utilize private funds” as part of urban
development to enable the elderly 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 indicating 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%
by 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 in the area they are used to in the way they would like, even after they come to require 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 services to all patients at an appropriate location in order to effectively utilize
limited medical resources, and enacted systemic reforms in healthcare systems, such as establishing guidelines (March
2015) for planning a community healthcare vision in prefectures. Prefectures have formulated the community healthcare
vision for the purpose of realizing a system encouraging the effective and efficient allocation of resources commensuratewith the healthcare functions in each of the national government‐designated regions, and providing a higher quality ofhealthcare services in beds appropriate for the condition of patients, from acute to convalescent and chronic phases, foreach 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) inorder to promote functional differentiation and coordination of hospital wards. Presently, prefectural governments andhealthcare professionals are working together via regional healthcare vision councils and other channels to realize thisvision.

‐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.
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 services”
and “health,” which HCM sets as acquisition targets, is believed to further expand 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" (released on
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 realize a society where all people can live vibrantly
and with peace of mind, and to increase unitholder value through securing stable income and steady growth of theportfolio.

(c) Significant Subsequent Events
Not applicable.

‐8‐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 January 2024 (from August 1, 2023 to January 31, 2024)
and the fiscal period ending July 2024 (from February 1, 2024 to July 31, 2024). For the assumptions underlying this outlook,please see “Assumptions Underlying Earnings Forecast for Fiscal Period Ending January 2024 and Fiscal Period Ending July2024” below.
For the fiscal period ending January 2024 (from August 1, 2023 to January 31, 2024) and the fiscal period ending July 2024
(from February 1, 2024 to July 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 January 2024 (from August 1, 2023, to January 31, 2024)
Operating revenue

2,438 million yen

Operating income

1,255 million yen

Ordinary income

1,051 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)

1,050 million yen
2,920 yen
315 yen
3,235 yen

Fiscal period ending July 2024 (from February 1, 2024, to July 31, 2024)
Operating revenue

2,438 million yen

Operating income

1,253 million yen

Ordinary income

1,037 million yen

Net income

1,036 million yen

Distribution per unit
(excluding distribution in excess of earnings)

2,884 yen

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

316 yen
3,200 yen

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

‐9‐This translation of the original Japanese Financial Report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Assumptions Underlying Earnings Forecast for Fiscal Period Ending January 2024 and Fiscal Period Ending July 2024
Item
Accounting period

Assumptions
・ Fiscal period ending January 2024 (18th FP) (from August 1, 2023, to January 31, 2024) (184 days)
・ Fiscal period ending July 2024 (19th FP) (from February 1, 2024, to July 31, 2024) (182 days)・

Assets undermanagement
・・
Operatingrevenue・・Operatingexpenses

・
・

・

・
・
・

Non‐operating
expenses・・・Interest‐bearing
liabilities

・
Investment units

Distribution perunit (excluding
distribution inexcess of
earnings)

・・・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 July 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
January 2024
July 2024
Property tax
168 million yen
168 million yen
Repair expenses
29 million yen
29 million yen
Depreciation
566 million yen
568 million yen
65 million yen
65 million yen
Other expenses related to rent businessOut 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.
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 234 million yen for
the fiscal period ending January 2024 and 231 million yen for the fiscal period ending July 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 January 2024 and 5
million yen for the fiscal period ending July 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 January 2024 and 1 million yen in the fiscal period ending July 2024.
Interest expenses, interest expenses on investment corporation bonds and other borrowing‐related
expenses are assumed to be 197 million yen for the fiscal period ending January 2024 and 209 million yen
for the fiscal period ending July 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 January 2024 and the fiscal period ending July 2024, with an assumption that 7,250 million
yen of loans due for repayment in the fiscal period ending January 2024 (repayment date: January 31,2024) and 2,000 million yen of loans due for repayment in the fiscal period ending July 2024 (repayment
date: March 30, 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 July 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 January 2024 and for the fiscal period ending July
2024.
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.
‐ 10 ‐

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

Assumptions
・・Distribution inexcess of earnings
per unit

・

・

・
Other
・

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 self‐
regulatory organizations, etc. The total amount of distribution in excess of earnings is assumed to be 113
million yen for the fiscal period ending January 2024 and 113 million yen for the fiscal period ending July2024.
The total amount of distribution in excess of earnings is distributed up to the amount equivalent to 20%of the depreciation recorded in the accounting period immediately before the accounting period when
HCM will pay said distribution, sufficiently taking into consideration the amount of capital expenditurenecessary for maintaining and improving the competitiveness of HCM’s Assets Under Management andthe financial position of HCM.
However, distribution in excess of earnings may be conducted up to an amount lower than the above
amount or may not be conducted when the implementation of distribution in excess of earnings up to thesaid amount is judged to be inappropriate based on the economic environment surrounding HCM, trendsof the real estate market and leasing market, status of HCM’s assets under management and financial
conditions.
For the fiscal period ending January 2024 and the fiscal period ending July 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.

‐ 11 ‐

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

Financial Statements(1) Balance Sheet
Previous fiscal period(As of Jan. 31, 2023)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Derivatives receivables
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 Jul. 31, 2023)

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

Security deposits
Long‐term prepaid expenses
Derivative receivables
Deferred tax assets
Total investments and other assets
Total non‐current assets
Deferred assets
Investment unit issuance costs
Investment corporation bond issuance costs
Total deferred assets
Total assets‐ 12 ‐

1,613,659
234,734
51,925
122,748
50,592‐
2,073,660*140,397,268(6,063,477)
34,333,790
129,916(21,190)108,726
21,776(10,084)
11,691
399,983(177,267)
222,715
43,747,992
78,424,916
2,445
2,445

10,00010,000253,281
142,711
4
405,997
79,197,762

202,955
44,465
12
257,432
78,684,795

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

17,227
13,53030,75880,789,213

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

Previous fiscal period(As of Jan. 31, 2023)
Liabilities
Current liabilities
Operating accounts payable
Short‐term loans payable
Current portion of long‐term loans payable
Accounts payable ‐ otherAccrued expenses
Income taxes payable

55,6782,000,000
7,250,000
103,501
295,543
702(Unit: thousands of yen)
Current fiscal period(As of Jul. 31, 2023)

17,0372,000,000
7,250,000
111,882
271,803
863

Consumption taxes payable

105,273

17,558Advances received
Deposits received
Derivative liabilities
Total current liabilities
Non‐current liabilities
Investment corporation bonds
Long‐term loans payable

397,489
162‐
10,208,351

401,721162
122
10,071,151

2,000,000
27,900,000

2,000,000
27,900,000

Tenant leasehold and security deposits

1,936,482

1,936,482

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

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

167,616
13,98881,819208
32,100,115

42,275,114

42,171,267

38,323,799

38,323,799(10,945)‐(722,547)(733,493)
37,590,306(722,547)(722,547)
37,601,252

1,289,825

1,068,158

1,289,825
38,880,132

1,068,158
38,669,411

88,121
88,121*2 38,968,253
81,243,368(51,465)(51,465)*2 38,617,946
80,789,213

Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Allowance for temporary difference
adjustments
Other deduction from unitholders' capital
Total deduction from unitholders' capital
Unitholders' capital, net*3

Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets‐ 13 ‐

This translation of the original Japanese Financial Report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(2) Statement of Income(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023
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)‐ 14 ‐

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

*1 2,417,024*1 2,428,260*1 10,583*1 10,337*2 204,649

2,632,258‐
2,438,597*1 801,972*1 820,379

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

233,430
2,830
16,6535,400
33,03358,456
1,170,184
1,268,413

5
254
81
1,000
14
1,355

8
2,336
‐
458
‐
2,803

101,400
7,800
5,742

128,917
7,800
5,742

1,040

1,040

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

58,838202,338
1,068,877
1,068,877
864
(7)
857
1,068,020
138
1,068,158

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

Other deduction Total deduction
from unitholders' from unitholders'
capitalcapital(10,586)(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

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

Total surplus

1,111,161

1,111,161

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

(359)

(359)

(110,366)(110,366)

1,278,374

1,278,374

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

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

Unappropriatedretained earnings(undisposed loss)

1,278,374

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

38,800,904

99,411

99,411

99,411

178,663

178,663

67,937

99,411

99,411

167,349

1,289,825

1,289,825

38,880,132

88,121

88,121

38,968,253‐ 15 ‐

This translation of the original Japanese Financial Report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Current fiscal period (from February 1, 2023, to July 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(10,945)

Other deduction Total deduction
from
from
unitholders'unitholders'
capitalcapital(722,547)

Unitholders'
capital, net(733,493)

37,590,306

10,945

10,945

Dividends of surplus
Reversal of allowancefor temporary
difference adjustments

10,945

Net income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
period‐10,945‐

10,945

10,945*1 38,323,799‐(722,547)(722,547)

37,601,252(Unit: thousands of yen)
Valuation and translation
adjustments

Unitholders’ equity
Surplus
Unappropriatedretainedearnings(undisposed
loss)

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments

Total net assets

Total surplus

Totalunitholders’equity1,289,825

1,289,825

38,880,132

88,121

88,121

38,968,253

Dividends of surplus(1,278,741)(1,278,741)(1,278,741)(1,278,741)

Reversal of allowancefor temporary
difference adjustments(10,945)(10,945)‐‐

1,068,020

1,068,020

1,068,020

1,068,020

Balance at beginning ofcurrent period
Changes of items during
periodNet income
Changes of items otherthan unitholders’ equity
during period, net
Total changes of items
during the period
Balance at end of current
period(139,586)(139,586)(139,586)(221,667)(221,667)(210,721)(139,586)(139,586)(350,307)

1,068,158

1,068,158

38,669,411(51,465)(51,465)

38,617,946‐ 16 ‐

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

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

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

Unappropriated retained earnings

1,289,825,791

1,068,158,773

II. Distribution in excess of earnings‐

163,213,000‐

51,408,500‐

111,804,500

III. Incorporation into unitholders’ capital

10,945,922‐

Reversal of allowance for temporary
difference adjustments

10,945,922‐

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

1,179,879,000[3,282]
1,016,666,000[2,828]‐51,408,500

[‐]

[143]

‐

111,804,500

[‐]

[311]

138,369

51,492,773

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‐ 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.

Type

Calculation method for distributions

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

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

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.

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 Trust
Act, it shall distribute 1,016,666,000
yen, which is the maximum integral
multiple of 359,500 units issued andoutstanding as distributions ofearnings. Accordingly, distributions ofearnings per unit were 2,828 yen.
In addition, HCM is to make
distributions in excess of earnings, ofwhich the amount is to be
determined by HCM as an amountequivalent to net asset deduction
items (as defined in Article 2,
Paragraph 2, Item (30) (b) of theOrdinance on Accountings ofInvestment Corporations), considering
the impact of net asset deduction
items on distributions, pursuant to
the policy for cash distributions inexcess of earnings provided in Article
36, Paragraph 2 of its Articles ofIncorporation. During the current
fiscal period, since a change indeferred gains or losses on hedges
were recorded as net asset deduction
items, HCM decided to make
distributions of allowance fortemporary difference adjustments inthe amount of 51,408,500 yen. As aresult, distributions in excess ofearnings per unit (allowance fortemporary difference adjustments)
came to 143 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 make its
distributions in excess of earnings(return of capital that falls under the
category of distributions reducing
unitholders’ capital for tax purposes)
in each period on a continuous basis,
as a rule.
During the current fiscal period, HCM
decided to distribute 111,804,500
yen, an amount roughly equivalent to
20% of depreciation recorded in thecurrent fiscal period, as distributions
in excess of earnings. Accordingly,‐ 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: Aug. 1, 2022
To: Jan. 31, 2023

distributions in excess of earnings perunit (of distributions in excess ofearnings from other distributions)came to 311 yen.
As a result, distributions per unit
came to 3,282 yen.

Calculation method for distributions(Note 1)

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

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.

‐ 19 ‐

This translation of the original Japanese Financial Report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(5) Statement of Cash Flows(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023
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: Feb. 1, 2023
To: Jul. 31, 2023

1,279,087
563,971

1,068,877
560,456

1,040

1,040

60,164
5,742
(5)
(81)
109,200(27,307)
41,022
1,600

58,8385,742(8)‐136,717(872)(50,592)(1,848)

Increase (decrease) in operating accounts payable(26,689)(38,640)

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
Proceeds from tenant leasehold and security deposits
Repayments of tenant leasehold and security deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short‐term loans payable
Repayments of short‐term loans payable
Proceeds from long‐term loans payable
Repayments of long‐term loans payable(845)
99,817
48,827(1,003)
10,12536(3,173)(87,715)(23,739)
4,232
9,801
‐

1,214,138‐

250
3,379,092
5
81(110,131)(913)
3,268,134(501)
1,638,615
8‐(136,718)(703)
1,501,201(2,225,327)
59,926(44,754)(2,210,155)(184,121)‐‐(184,121)

500,000(500,000)
9,750,000(9,250,000)

2,000,000(2,000,000)‐‐(145,123)(2,655)(1,209,413)(854,536)
203,442
1,440,976(1,278,065)(1,280,721)
36,3581,644,419*1 1,644,419*1 1,680,777

Borrowing expenses
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period‐ 20 ‐

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
The straight‐line method is adopted.
current assets
The useful life of principal property, plant and equipment is as follows.
Buildings in trust
5‐69 years
Structures in trust
10‐53 years
Machinery and equipment in trust
10 years
Tools, furniture and fixtures in trust
6‐15 years(2) Intangible assets
The straight‐line method is adopted.
2. Accounting for deferred assets (1) Investment unit issuance costs
Depreciated evenly over 3 years.
(2) Investment corporation bond issuance costs
Amortized using the straight‐line method over the maturity period.
(1) Accounting for property taxes
3. Standards for revenue andFor property tax, city planning tax, depreciable asset tax on real estate owned, theexpense recognition
accounting is that, of the tax amount assessed and determined, the amountcorresponding to the concerned accounting period is expensed as expenses related to
the leasing 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 2,041 thousand yen for the previous
fiscal period and not applicable for the current fiscal period.
(2) Accounting standard for revenue recognition
The contents of major performance obligations concerning revenue arising fromcontracts with customers of HCM and the general timing to satisfy such performanceobligations (general timing to recognize the revenue) are as follows:
Sale of real estateWith regard to the sale of real estate, revenue is recorded when the buyer (customer)
obtains control of the real estate as a result of HCM fulfilling the delivery obligation set
forth in the contract pertaining to the sale of real estate.
(1) Hedge accounting approach
4. Method of hedge accounting
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 basic policy of risk
management.
(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.

‐ 21 ‐

This translation of the original Japanese Financial Report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
6. Other matters serving as thebasis for preparation of financial
statements(1) Accounting policy for trust beneficiary interests in real estate
Concerning trust beneficiary interests in real estate owned, all accounts of assets andliabilities within trust assets, as well as all accounts of revenue and expenses from thetrust assets are recognized in the relevant account line item of the balance sheet andthe statement of income.
The following material items for the trust assets recognized in the relevant line item
account are separately listed on the balance sheet.
1) Cash and deposits in trust2) Buildings in trust; structures in trust; machinery and equipment in trust; tools,
furniture and fixtures in trust; land in trust3) Tenant leasehold and security deposits in trust(2) Accounting for non‐ deductible consumption tax
Non‐deductible consumption taxes on the acquisition of assets is included in the cost of
the acquisition of each asset.

[Additional Information][Provision and Reversal of Allowance for Temporary Difference Adjustments]
Previous fiscal period (from August 1, 2022, to January 31, 2023)
1. Reasons, related assets and amounts of reserve
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 allowance for temporary difference
adjustments will be reversed.
Current fiscal period (from February 1, 2023, to July 31, 2023)
1. Reasons, related assets and amounts of reversal
Due to the recognition of a change in deferred gains or losses on hedges (net asset deduction items), which was a result ofapplying hedge accounting to the assessment of interest rate swap transactions, 51,408 thousand yen of allowance fortemporary difference adjustments have been recorded in the statement of cash distributions.
2. Method of reversal
In accordance with elimination of deferred losses on hedges (net asset deduction items) by period‐end reassessment of saidinterest rate swap transactions in the next period onward, a corresponding amount of allowance for temporary difference
adjustments will be reversed.

‐ 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.
(8) Notes on Financial Statements[Balance Sheet]*1 Government grants received related to assets acquired were deducted from the carrying amount of property, plant andequipment. The amount deducted from the carrying amount was below.
(Unit: thousands of yen)Previous fiscal period(As of Jan. 31, 2023)
Buildings in trust

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

10,041

10,041*2 Minimum net assets of at least 50 million yen as required by the Investment Trust Law(Unit: thousands of yen)Previous fiscal period(As of Jan. 31, 2023)

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

50,00050,000*3 Allowance for temporary difference adjustments
Previous fiscal period (from August 1, 2022, to January 31, 2023)
1. Reasons, related assets and amounts(Unit: thousands of yen)
Related assets

Deferred gains orlosses on hedges

ReasonInitialamountBalance at Reserved Reversed Balance at
beginning amount in amount in
end ofcurrentof current current
current
periodperiodperiodperiodLoss on interest‐
rate swaps
recognized at theend of current
period25,683

10,586359‐

10,945‐25,683

10,586359‐

10,945‐

Total

Reason forreversal

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 February 1, 2023, to July 31, 2023)
1. Reasons, related assets and amounts(Unit: thousands of yen)
ReasonRelated assets

Loss on interest‐
rate 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

10,945‐(10,945)‐

25,683

10,945‐(10,945)‐

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

‐ 23 ‐

Reason forreversal
Changes in
the fairvalue ofderivativetransactions‐

This translation of the original Japanese Financial Report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
[Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing business(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023
Operating revenue from real estateleasing businessLeasing business revenues
Rent revenue
Other revenue related to leasing business
Other revenue
Total operating revenue from real estateleasing business
B. Operating expenses from real estateleasing business
Expenses related to leasing business
Property tax
Outsourcing expenses
Repair expenses
Insurance expenses

Current fiscal period
From: Feb. 1, 2023
To: Jul. 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]*22,417,024

2,428,260

10,583

10,3372,427,608

2,438,597

141,560
36,46631,894
10,417

168,336
37,02926,083
10,377563,645

560,130

17,987

18,421801,972

820,379

1,625,635

1,618,218

Breakdown of gain on sale of real estate properties(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

Medical Rehabilitation Home
Bonsejour Komaki
Proceeds from sales of real estate

1,450,000‐

Cost of sales of real estate

1,214,138‐

Other expenses

31,211‐Gain 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: Aug. 1, 2022
To: Jan. 31, 2023

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

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

10,000,000 units

10,000,000 units

359,500 units

359,500 units‐ 24 ‐

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 Cash Flows]*1 Reconciliation of cash and cash equivalents at end of period and relevant amount on the balance sheet(Unit: thousands of yen)Previous fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

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

1,539,878
272,156(167,616)

1,613,659
234,734(167,616)

Cash and cash equivalents

1,644,419

1,680,777(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 Jan. 31, 2023

Current fiscal period
As of Jul. 31, 2023

Due within 1 year
Due after 1 year

2,302,673
11,702,017

1,933,571
10,824,184

Total

14,004,691

12,757,756[Financial Instruments]
1. Our policy on 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. In respect of financing loans and issuing investment corporation bonds, HCM pays attention toextending periods, fixing interest rates and diversifying repayment dates in order to secure financial stability and avoid
the risk of rise in interest rates in the future.
Derivative transactions shall be limited to those invested in for the purpose of hedging the risk of fluctuations in interest
rates on HCM’s loans.
(2) Description of financial instruments and associated risks, and risk management system
Loans and proceeds from issuance of investment corporation bonds are used primarily for 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).
‐ 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.

(3) Supplementary explanation to fair value of financial instruments
Certain assumptions are adopted in the calculation of the fair value of financial instruments. Accordingly, there may becases where the concerned values will differ when different assumptions are adopted.
2.

Fair value of financial instruments
Carrying amount, fair value and difference between the two were as follows. Notes to "Cash and deposits," "Cash anddeposits in trust" and “short‐term loans payable” have been omitted because their fair values approximates their bookvalues. This is due to their nature as cash and as accounts settled over the short term.
Previous fiscal period (from August 1, 2022, to January 31, 2023)(Unit: thousands of yen)
Carrying amount

Fair value

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

7,250,000

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

2,000,000

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

27,900,000

27,886,698(13,301)

37,150,000

37,092,817(57,182)

135,443

135,443‐

Total liabilities(4) Derivative transactions

Current fiscal period (from February 1, 2023, to July 31, 2023)(Unit: thousands of yen)
Carrying amount

Fair value

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

7,250,000

7,250,033

33(2) Investment corporation bonds

2,000,000

1,970,200(29,800)(3) Long‐term loans payable

27,900,000

27,889,740(10,259)

37,150,000

37,109,974(40,025)(37,476)(37,476)‐

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 (*)
at a reasonable rate estimated for a similar loan that is made corresponding to the remaining period.
(*) For long‐term loans with floating interest rate to which special treatment for interest rate swaps is applied (please refer to “Derivative
Transactions” below), the sum of principal and interest under the interest rates after the interest rate swaps are indicated.
(2) Investment corporation bonds
Figures are calculated based on the reference statistics of transactions provided by Japan Securities Dealers Association.
(4) Derivative transactions
Please refer to “Notes on Derivative Transactions” below.

‐ 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.
(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 January 31, 2023)(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
Investment
corporationbonds
Long‐term loans
payable

‐

‐

‐

‐

‐

2,000,000

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

4,000,000

Total

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

6,000,000

Current fiscal period (As of July 31, 2023)

Due within 1 year

(Unit: thousands of yen)
Due after 1 year Due after 2 years Due after 3 years Due after 4 years
Due after
and within 2 years and within 3 years and within 4 years and within 5 years
5 years

Investment
corporationbonds
Long‐term loans
payable

‐

‐

‐

‐

‐

2,000,000

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

4,000,000

Total

7,250,000

5,550,000

6,400,000

5,900,000

6,050,000

6,000,000[Securities]
Previous fiscal period (As of January 31, 2023)
Not applicable.
Current fiscal period (As of July 31, 2023)
Not applicable.

‐ 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.
[Derivative Transactions]
1. Derivative transactions to which hedge accounting is not applied
Previous fiscal period (As of January 31, 2023)
Not applicable.
Current fiscal period (As of July 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 January 31, 2023)
Method ofhedge
accounting
Principle
accounting
methodSpecialtreatment forinterest rate
swaps

Contract amount

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

Hedged item

Fair value

Method of calculation
for the fair value

Long‐term loans
payable30,050,000

24,300,000

135,443

Based on the pricepresented bycorresponding
financial institutions

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

31,050,000

24,300,000

135,443‐

Total(Note)

Due after 1
year

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.

Current fiscal period (As of July 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)Contract amount
Hedged item

Method ofcalculation for thefair value

Based on the pricepresented by(37,476)
correspondent
financial institutions

Long‐term loans
payable30,050,000

24,300,000

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

31,050,000

24,300,000(37,476)‐

Total(Note)

Due after 1
year

Fair value

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 January 31, 2023)
Not applicable.
Current fiscal period (As of July 31, 2023)
Not applicable.

‐ 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.
[Tax‐Effect Accounting]
1. Breakdown of deferred tax assets and deferred tax liabilities(Unit: thousands of yen)Previous fiscal period
As of Jan. 31, 2023

Current fiscal period
As of Jul. 31, 2023

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

2.

12

4,711

25,778Subtotal deferred tax assets

4,716

25,791

Valuation allowance(4,711)(25,778)

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

412(47,322)(13,988)

Net deferred tax assets (liabilities)(47,317)(13,976)

Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate
(Unit: %)Previous fiscal period
As of Jan. 31, 2023

Current fiscal period
As of Jul. 31, 2023

31.46

31.46

(31.45)0.05
0.06(31.44)0.06
0.08

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 January 31, 2023)
Not applicable.
Current fiscal period (As of July 31, 2023)
Not applicable.
[Related‐Party Transactions]
1. Parent company, major corporate unitholders.
Previous fiscal period (from August 1, 2022, to January 31, 2023)
Not applicable.
Current fiscal period (from February 1, 2023, to July 31, 2023)
Not applicable.
2.

4

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

‐ 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.
3.

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

4.

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

[Asset Retirement Obligations]
Previous fiscal period (As of January 31, 2023)
Not applicable.
Current fiscal period (As of July 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: Aug. 1, 2022
To: Jan. 31, 2023

Current fiscal period
From: Feb. 1, 2023
To: Jul. 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

78,272,804

78,788,993

516,188(364,076)

78,788,993

78,424,916

88,206,000

88,769,000(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(2,141,644 thousand yen). The amount of decrease is mainly attributable to depreciation (1,214,138 thousand yen).and depreciation(563,645 thousand yen). Out of the amount of increase (decrease) during the current fiscal period, the amount of decrease is mainly
attributable to depreciation (560,130 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 August 1, 2022, to January 31, 2023)
Information has been omitted due to the immateriality of the eligible revenue.
Current fiscal period (from February 1, 2023, to July 31, 2023)
Information has been omitted due to the immateriality of the eligible revenue.

‐ 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.
[Segment Information]
1. Segment information
Disclosure has been omitted because HCM operates a single segment, which is the real estate leasing business.
2.

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

[Per Unit Information]
Previous fiscal period
From: Aug. 1, 2022
To: Jan. 31, 2023

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

Net assets per unit

108,395 yen

107,421 yen

Net income per unit

3,555 yen

2,970 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)‐ 32 ‐

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

Current fiscal period
From: Feb. 1, 2023
To: Jul. 31, 2023

1,278,374

1,068,020‐‐

1,278,374

1,068,020

359,500

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.
[Significant Subsequent Events]
Not applicable.

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

Date

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

‐ 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.
(Note 8) HCM resolved at the board of directors’ meeting held on March 16, 2021, to set cash distributions in excess of earnings (return of capital that
falls under the category of distributions reducing unitholders’ capital for tax purposes) at 300 yen per unit as cash distributions for the 12th
fiscal period (fiscal period ended January 2021), and started the payout on April 21, 2021.
(Note 9) HCM resolved at the board of directors’ meeting held on September 14, 2021, to set cash distribution in excess of earnings (return of capitalthat falls under the category of distributions reducing unitholders’ capital for tax purposes) at 304 yen per unit as cash distributions for the
13th fiscal period (fiscal period ended July 2021), and started the payout on October 21, 2021.
(Note 10) New investment units were issued through public offering with issue price of 124,764 yen (paid‐in amount of 120,477 yen) per unit.
(Note 11) New investment units were issued through third‐party allotment in line with public offering, with paid‐in amount of 120,477 yen per unit.
(Note 12) HCM resolved at the board of directors’ meeting held on March 18, 2022, to set cash distributions in excess of earnings (return of capital that
falls under the category of distributions reducing unitholders’ capital for tax purposes) at 308 yen per unit as cash distributions for the 14th
fiscal period (fiscal period ended January 2022), and started the payout on April 21, 2022.
(Note 13) HCM resolved at the board of directors’ meeting held on September 14, 2022, to set cash distributions in excess of earnings (return of 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.

‐ 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.

3.

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

Asset type

Asset use

Area

Paid nursinghomeHomes andfacilities forthe elderly

Servicedhousing forthe elderly

Current fiscal period(as of July 31, 2023)
Total amount owned
As a percentage of total(millions of yen)assets(Note 1)(%)
(Note 2)Three Major
Metropolitan Areas(Note 3)49,37061.1

Core Cities (Note 4)

7,871

9.7

Other Areas (Note 5)

1,705

2.1

Three Major
Metropolitan Areas(Note 3)

2,925

3.6

Core Cities (Note 4)

1,687

2.1

Other Areas (Note 5)

‐

‐

‐

‐

‐

‐

63,56078.7

Three Major
Metropolitan Areas(Note 3)‐‐

Core Cities (Note 4)

2,101

2.6

Other Areas (Note 5)‐‐Group homes for the elderly withdementia
Other facilities for the elderly
Trust
beneficiaryinterests in realestateSubtotal

Medicalfacilities

Multi‐use
facilities

service‐related

Complex of
paid nursing
homes,
medical‐servicerelatedfacilities

Subtotal

2,101

2.6

Three Major
Metropolitan Areas(Note 3)

12,763

15.8

Core Cities (Note 4)‐‐

Other Areas (Note 5)‐‐

12,763

15.8‐‐

78,424

97.1

Subtotal

Other
Total
Deposits and other assets

2,364

2.9

Total assets

80,789100.0

Total liabilities

42,171

52.2

Total net assets

38,61747.8(Note 1) “Total amount owned” is the carrying amount (in the case of trust beneficiary interests in real estate, the book value after depreciation andamortization).
(Note 2) Figures in “As a percentage of total assets” are rounded to one decimal place.
(Note 3) “Three Major Metropolitan Areas” refers to the Tokyo Metropolitan Area (Tokyo, Kanagawa, Saitama, Chiba prefectures), Kinki Area (Osaka,
Kyoto, Hyogo prefectures) and Chubu Area (Aichi prefecture).
(Note 4) “Core Cities” refers to designated cities, prefectural capitals and regional core cities other than the Three Major Metropolitan Areas. Regionalcore cities refers to cities with a population of 200,000 or more.
(Note 5) “Other Areas” refers to areas other than the Three Major Metropolitan Areas and Core Cities.

‐ 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.
2) Investment Assets(a) Major Investment Securities
Not applicable.
(b) Investment Real Estate Properties
Not applicable.
(c) Other Major Investment Assets
a. Overview of Real Estate in Trust
Overview of trust beneficiary interests in real estate (hereinafter, “real estate in trust”) that HCM owns as of July 31, 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 July 31,2023, is as follows.
Type ofspecified
asset

Area

Acquisition price(millions of yen)
(Note 1)

Property name

824

1.0

801

997

724

0.9

700

834

Bonsejour Musashi‐shinjo

582

0.7

563

643

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

728

0.9

676

850

ASHEIM Hikarigaoka

1,385

1.7

1,401

1,600

ASHEIM Bunkyohakusan

1,430

1.8

1,386

1,790

3,580

4.5

3,291

4,230

3,050

3.8

2,918

3,560

1,740

2.2

1,825

2,100

824

1.0

806

905

Granda Tsuruma‐Yamato

1,000

1.3

1,024

1,030

Smiling Home Medice Adachi

2,253

2.8

2,273

2,500

Hanakotoba Minami

1,071

1.4

1,078

1,270

Hanakotoba Miura

Bonsejour Yotsugi

615

0.8

643

682

SOMPO CARE La vie Re
Hama‐Kawasaki

1,710

2.2

1,700

1,850

Hanakotoba Shin‐Yokohama

2,071

2.6

2,088

2,520

Hanakotoba Shin‐Yokohama II

375

0.5

391

384

Hanakotoba Odawara

880

1.1

888

964

Sunny Life Kita‐Shinagawa

1,825

2.3

1,836

2,090

Sunny Life Kamakura

1,418

1.8

1,457

1,620

Nichii Home Nishikokubunji

720

0.9

755

777

Royal Kawaguchi

1,260

1.6

1,313

1,340

Heartland Kawaguchi Meiseien

2,000

2.5

2,065

2,280

Rehabilitation Home Granda
Minamiurawa (Note 5)

1,022

1.3

1,063

1,100

822

1.0

855

883

1,508

1.9

1,579

1,670

500

0.6

541

514

35,91745.3

35,92940,993

1,950

2.5

1,865

2,100

1,930

2.4

1,795

2,390

1,200

1.5

1,129

1,450

Madoka Minamiurawa
Nichii Maison Inage (Note 5)
Hanakotoba Oppama
Subtotal

Kinki Area

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

Bonsejour Hino

GOOD TIME HOME Fudo‐mae

Trustbeneficiaryinterests inreal estate

Carrying amount(millions of yen)
(Note 3)

Bonsejour Chitose‐funabashi

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‐ 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.
Type ofspecified
asset

Area

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

Medical Home Bonsejour
Itami
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)
GreenLife Moriguchi
Kinki Area

Hapine Kobe Uozaki Nibankan

514

0.6

483

557

4,320

5.5

4,059

4,700

4,150

5.2

4,126

4,750

1.2

904

1,030

16.3

12,763

14,200

1,288

1.6

1,347

1,300

600

0.8

654

647

29,802

37.6

29,13033,124SAWAYAKA Tachibanakan

1,520

1.9

1,285

1,640

SAWAYAKA Mekarikan

1,380

1.7

1,182

1,480

770

1.0

754

827

Verde Minowa

1,620

2.0

1,642

1,730

Niigata Rehabilitation Hospital

2,060

2.6

2,101

2,300

NOAH GARDEN LEGEND

859

1.1

902

910

NOAH GARDEN L Grace

622

0.8

653

660

AIKOEN ICHIBANKAN Building

NOAH GARDEN Season Bell

1,350

1.7

1,449

1,520

NOAH GARDEN CASA RICH

1,619

2.0

1,687

1,730

11,80014.9

11,66012,797

390

0.5

361

405

1,328

1.7

1,343

1,450

Subtotal
SAWAYAKA Tagawakan
Other Areas

Period‐end
appraisal value(millions of yen)
(Note 4)930

SubtotalCore Cities

Carrying amount(millions of yen)
(Note 3)

12,920SHIP Senri Building
SOMPO CARE La vie Re
Kobeikawadani
SOMPO CARE Sompo no ie
SayamaTrustbeneficiaryinterests inreal estate

Share ofinvestment(%)(Note 2)

Verde Hotaka
Subtotal

Total (48 properties)

1,718

2.2

1,705

1,855

79,237100.0

78,424

88,769(Note 1) “Acquisition price” does not include acquisition‐related expenses, property tax, city planning tax, consumption tax and local
consumption tax.
(Note 2) “Share of investment” refers to the acquisition price of each property as a percentage of the total acquisition price, and the figures arerounded to one decimal place.
(Note 3) “Carrying amount” indicates book value after depreciation and amortization as of July 31, 2023.
(Note 4) “Period‐end appraisal value” indicates amounts stated in the appraisal report with appraisal date of July 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.
(Note 5) The "Name of real estate" has been changed from "Granda Minamiurawa" to "Rehabilitation Home Granda Minamiurawa" and from
"Nichii Home Inage" to "Nichii Maison Inage". The same applies hereinafter in this document.

‐ 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.
(ii) Buildings and their leasing status
The annual rent and tenant leasehold and security deposits of each property are not disclosed as consent from the tenants
has not been obtained. The total annual rent from real estate in trust owned by HCM as of July 31, 2023, is 4,957 million
yen (Note).
(Note) The amount is obtained by multiplying the total of monthly rent in lease agreements effective as of July 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 Chitose‐
funabashi
Bonsejour Hino

Bonsejour Musashi‐
shinjoMedical 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 Tsuruma‐
home‐20
YamatoPaid nursing Smiling Home Medicehome‐21Adachi
Paid nursing AIKOEN ICHIBANKAN
home‐22
Building
Paid nursing
Hanakotoba Minami
home‐23
Paid nursing
Hanakotoba Miurahome‐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
Shin‐Yokohama
Hanakotoba
Shin‐Yokohama 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

RC/3F
RC/8F
RC/B1 6F
RC/B1 5F
RC/B1 6F
RC/4F
RC/3F
RC/B1 5F
RC/5F

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

SRC/11F(exclusively‐
owned
portion)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

S/B1 4F
RC S/5F
RC/4F
S/5F
RC/7F
RC/4F
RC/4F
(exclusively‐
owned
portion)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,
RC/B1 7F
2007
Sep. 16,
RC/4F
2009①Nov. 20,
①S/5F
2003
②S RC/8F ②Feb. 28,
1974
RC/9F

‐ 39 ‐

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

Property
number

Property
namePaid nursing
Verde Hotaka
home‐30
Sunny Life
Kita‐Shinagawa
Sunny Life
Kamakura
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
home‐38
L Grace
Paid nursing NOAH GARDEN
home‐39
Season Bell
Paid nursing Heartland Kawaguchi
home‐40
Meiseien
Paid nursing Rehabilitation Home
home‐41
Granda Minamiurawa
Paid nursing
Madoka Minamiurawa
home‐42
Paid nursing
Nichii Maison Inage
home‐43
Paid nursing
Hanakotoba Oppama
home‐44
Serviced
SOMPO CARE Sompo
housing forno ie S Awajiekimae
the elderly ‐1Serviced
SOMPO CARE Sompo
housing forno ie S Kobekamisawa
the elderly ‐2Serviced
NOAH GARDEN
housing for
CASA RICH
the elderly ‐3Structure/ No. Constructionof floorscompletion(Note 1)
(Note 2)
①Sep. 29,
①S SRC/5F 1982
②S/2F
②Jul. 1,
1989

Paid nursing
home‐31
Paid nursing
home‐32
Paid nursing
home‐33

MedicalNiigata Rehabilitation
service‐related
Hospitalfacilities, etc.‐1
Paid nursing
homes,medical
SHIP Senri Building
service related
facilities, etc.‐1
Total(Note 1)

leasable area (m2)(Note 3)

Leased area(m2)
(Note 4)

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

6,352.86

6,352.86

1

100.0

S/3F

Sep. 20, 2018

2,135.54

2,135.54

1

100.0

S/5F

Sep. 19, 2014

3,817.91

3,817.91

1

100.0

S/3F

Sep. 29, 1990

1,559.99

1,559.99

1

100.0

RC S/4F

Apr. 24, 2009

3,824.54

3,824.54

1

100.0

S/3F

Aug. 15, 2005

1,997.87

1,997.87

1

100.0

RC/3F

Oct. 1, 2008

3,484.02

3,484.02

1

100.0

RC/4F

Oct. 10, 2015

2,736.89

2,736.89

1

100.0

RC/4F

Oct. 27, 2017

2,075.25

2,075.25

1

100.0

RC/5F

Dec. 10, 2019

4,602.26

4,602.26

1

100.0

RC/6F

Jan. 30, 2006

3,885.90

3,885.90

1

100.0

S/3F

Jul. 15, 2011

2,373.25

2,373.25

1

100.0

S/3F

Apr. 11, 2005

1,918.98

1,918.98

1

100.0

RC/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

1

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

13,476.55

13,476.55

1

100.0

RC/B1 11F

Sep. 5, 2008

24,813.85

24,813.85

1

100.0

‐

‐

217,545.72

217,545.72

57

100.0

“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
owned asset.

(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
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 July 31, 2023, and isrounded to one decimal place.

‐ 40 ‐

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

100

100.0

July 1, 2023

42

47

37

78.7

April 1, 2023

56

58

57

98.3

May 1, 2023

46

49

41

83.7

May 1, 2023

100

101

93

92.1

April 1, 2023

83

89

77

86.5

May 1, 2023

50

52

47

90.4

May 1, 2023

163

169

136

80.5

April 1, 2023

145

145

139

95.9

October 1, 2022

104

104

102

98.1

June 1, 2023

95

95

75

78.9

June 1, 2023

60

60

58

96.7

June 1, 2023

61

67

57

85.1

January 1, 2023

61

65

54

83.1

May 1, 2023

62

64

53

82.8

May 1, 2023

131

138

137

99.3

May 1, 2023

155

189

189

100.0

June 1, 2023

47

47

47

100.0

July 1, 2023

73

90

66

73.3

June 1, 2023

82

82

79

96.3

July 1, 2023

90

90

86

95.6

June 1, 2023

Proud Life Inc.

50

50

47

94.0

August 1, 2023

Proud Life Inc.

53

54

51

94.4

May 1, 2023

Sompo Care
Inc.

58

58

52

89.7

April 1, 2023

Proud Life Inc.

136

136

125

91.9

April 1, 2023

Proud Life Inc.

29

30

30

100.0

April 1, 2023

Proud Life Inc.

60

65

64

98.5

April 1, 2023

174

206

196

95.1

April 16, 2023

121

174

171

98.3

April 1, 2023

66

66

57

86.4

December 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 Tsuruma‐
YamatoPaid 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
Shin‐Yokohama
Hanakotoba
Shin‐Yokohama II
Hanakotoba
OdawaraPaid nursing
home
Paid nursing
home
Paid nursing
home
Paid nursing
home
Paid nursing
home
Paid nursinghomeVerde Minowa
Verde Hotaka
Sunny Life
Kita‐Shinagawa

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‐ 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.

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
Paid nursing
home‐36

Royal Kawaguchi

Paid nursing
home‐37

NOAH GARDEN
LEGEND

Paid nursing
home‐38

NOAH GARDEN
L Grace

Paid nursing
home‐39NOAH GARDEN
Season Bell

Paid nursing
home‐40
Paid nursing
home‐41

Heartland
Kawaguchi
Meiseien
Rehabilitation
Home Granda
Minamiurawa

Type of facility

89.1

July 1, 2022

46

46

42

91.3

April 1, 2023

80

80

66

82.5

April 1, 2023

50

42

84.0

April 1, 2023

Paid nursing
home

SENIOR LIFE
SUPPORT Co.,
Ltd.

56

56

53

94.6

April 1, 2023

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

83

83.0

May 1, 2023

58

60

54

90.0

May 1, 2023

54

54

46

85.2

April 1, 2023

85

95

58

61.1

April 1, 2023

Proud Life Inc.

59

59

56

94.9

April 1, 2023

Sompo Care
Inc.

137

137

102

74.5

October 1, 2022

Sompo Care
Inc.

85

85

84

98.8

April 1, 2023

NOAH KONZER
Co., Ltd

115

115

85

73.9

August 12, 2022

GREEN LIFE Co.,
Ltd.

181

200

200

100.0

April 1, 2023

‐

4,033

4,264

3,804

89.2

‐

Residential typepaid nursinghome
Residential typepaid nursinghome
Residential typepaid nursing
home
Paid nursing
home
Paid nursing
homeNichii Maison Inage

Paid nursing
home

Total

114

50

Paid nursing
home‐43SHIP Senri Building(Note 4)128

Sompo Care
Inc.

Paid nursing
home

NOAH GARDENCASA RICH

128

Paid nursing
home

MadokaMinamiurawa

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‐42

Paid nursing
home‐44
Servicedhousing for theelderly ‐1Servicedhousing for theelderly ‐2Servicedhousing for theelderly ‐3Paid nursing
homes, medical
service related
facilities, etc.‐1

Operator

Preparation dateof Property
DisclosureStatement ofImportant
Matters(Note 3)

No. ofresidents(persons)(Note 1)

Paid nursing
homeServicedhousing for theelderly
Servicedhousing for theelderly
Servicedhousing for theelderly
Hospital, paid
nursing homewith nursing
home‐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.

‐ 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.
(iv) Overview of medical service‐related facilities, etc.
Property number

Medical service‐related facilities, etc.‐1

Property name

Niigata Rehabilitation Hospital

Operator

Medical Corporation AIKOKAI

Type of facility

Hospital

Subject of
medicaltreatment

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

Facility criteria(Hospitalization
fee)

External
evaluation

Date ofestablishment

June 1990(established as Oyama Hospital, the precursor)

Authorized number 168 beds (general beds: 108 beds/convalescent‐of beds
stage beds: 60 beds)
Facility certification

Training facilities certified by the Japanese
Association of Rehabilitation Medicine

2nd floor (48 beds) Hospitalization fee of hospital ward for comprehensive community care 1
3rd floor (60 beds) Basic hospitalization fee for general hospital ward (acute hospitalization fee 4)
Medical management fee for comprehensive community care 1
4th floor (60 beds) Hospitalization fee of hospital ward for rehabilitation at recovery stage 1

Hospital certified by Japan Council for Quality Health Care (Certification number: JC1424‐4) 3rdG:Ver. 2.0

Property
number

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.

‐ 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.
(v) Earnings performance(Unit: thousands of yen)
Current fiscal period (from February 1, 2023, to July 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

25,012

4,264

2,100

326

236

17,684400

60,014

Bonsejour Chitose‐
funabashi

5,629

1,831

225

‐

122

3,048

401

21,426

Bonsejour Hino

5,083

1,247

214

‐

91

3,130

400

19,490

4,128

1,031

167

‐

82

2,447

400

16,210

8,405

1,810

213

‐

163

5,817

400

21,090ASHEIM Hikarigaoka

16,836

3,821

381

84

212

11,936400

40,850ASHEIM
Bunkyohakusan

12,349

2,580

381

‐

129

8,857

400

38,995

SOMPO CARE La vie Re
Machidaonoji

49,169

6,038

780

1,962

392

39,596400

95,426

SOMPO CARE La vie Re
Azamino32,668

4,686

780

1,889

285

24,627400

77,158SAWAYAKA
Tachibanakan

23,942

2,668

1,200

‐

370

19,303400

47,214SAWAYAKA Mekarikan

23,165

2,985

1,200

‐

273

18,307400

43,375

7,865

1,108

1,200

‐

119

5,037

400

12,856

17,558

3,061

600

2,716

182

10,485513

43,927

4,938

949

223

‐

78

3,286

400

20,740

6,551

1,402

371

‐

117

4,260

400

13,97054,099

9,585

900

1,364

620

41,229400

113,530

GreenLife Moriguchi

39,318

7,139

1,363

3,241

405

26,769400

107,450

Hapine Kobe Uozaki
Nibankan

9,624

1,391

1,200

‐

96

6,536

400

24,411

Granda Tsuruma‐
Yamato

7,536

1,934

618

274

152

4,158

400

26,871

Smiling Home Medice
Adachi

16,628

3,327

540

560

177

11,624400

60,203

AIKOEN ICHIBANKAN
Building

8,587

2,550

780

‐

112

4,644

500

21,651

Hanakotoba Minami

8,196

1,563

600

74

79

5,479

400

27,882

Hanakotoba Miura

9,440

1,559

600

464

88

6,327

400

17,287

SOMPO CARE La vie Re
Hama‐Kawasaki

19,613

3,491

2,770

28

206

12,716400

45,454

Bonsejour Musashi‐
shinjoMedical Rehabilitation
Home Bonsejour
Hadanoshibusawa

SAWAYAKA Tagawakan
GOOD TIME HOME
Fudo‐mae
Bonsejour Yotsugi
Medical Home
Bonsejour Itami
Kobe Gakuentoshi
Building (Hapine Kobe
Gakuentoshi)

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 February 1, 2023, to July 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)

Hanakotoba Shin‐Yokohama

14,677

4,443

900

141

249

8,543

400

55,778

Hanakotoba Shin‐Yokohama II

5,701

2,547

600

‐

92

2,061

400

11,172

Hanakotoba Odawara

9,092

1,396

600

348

99

6,248

400

24,756

Verde Minowa

29,500

5,268

1,020

1,535

508

20,768400

55,176

Verde Hotaka

28,230

2,259

1,020

2,342

249

21,959400

43,834

Sunny Life Kita‐
Shinagawa

10,271

2,805

600

80

119

6,265

400

45,494

Sunny Life Kamakura

13,572

2,747

720

863

179

8,661

400

37,989Nichii Home
Nishikokubunji

4,522

1,236

660

155

92

1,978

400

18,537

SOMPO CARE Lavie Re
Kobeikawadani

12,752

2,943

750

192

189

8,276

400

32,724

SOMPO CARE Sompo
no ie Sayama

5,536

1,448

750

134

103

2,700

400

16,063

Royal Kawaguchi

11,243

2,832

1,647

979

180

5,200

402

31,157

10,200

1,988

300

‐

129

7,615

167

24,414

NOAH GARDEN
L Grace

7,775

1,748

300

‐

101

5,458

166

17,705NOAH GARDEN Season
Bell

14,749

2,368

720

‐

213

11,047400

40,919Heartland Kawaguchi
Meiseien

15,317

2,856

720

‐

223

11,116400

51,179Rehabilitation Home
Granda Minamiurawa

8,163

1,777

480

740

134

4,831

200

24,735

Madoka Minamiurawa

6,161

1,101

480

1,100

108

3,172

200

19,360Nichii Maison Inage

16,301

3,127

900

2,712

210

8,951

400

38,849Hanakotoba Oppama

6,369

2,077

600

145

103

3,043

400

12,767

SOMPO CARE Sompo
no ie S Awajiekimae

27,484

4,897

510

136

298

21,242400

58,215

SOMPO CARE Sompo
no ie S Kobekamisawa

18,418

2,918

510

1,497

183

12,908400

34,780NOAH GARDEN CASA
RICH

18,575

3,827

300

‐

236

14,044

166

46,247

Niigata Rehabilitation
Hospital

28,390

9,644

1,030

‐

387

16,828500

78,318NOAH GARDEN LEGEND

Not disclosed(Note 2)‐ 45 ‐

This translation of the original Japanese Financial Report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
Current fiscal period (from February 1, 2023, to July 31, 2023)
Property nameOperating revenue from real estate leasing
Rent revenue

Total

Other
revenue

Not disclosed(Note 2)

SHIP Senri Building
2,438,597

2,428,260

Operating expenses from real estate leasing
Property Outsourcing Repair Insurance
Other,
Depreciation
tax
expenses expenses expenses
net

81,02010,337

NOI(Note 3)28,043

1,500

‐

1,182

49,894400

340,675

820,379 168,336

37,02926,083

10,377560,130

18,421

2,178,349(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‐ 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.
(vi) Summary of appraisal report
HCM has obtained an appraisal report for each real estate in trust from one of the following: Rich Appraisal Institute Co.,
Ltd., The Tanizawa Sogo Appraisal Co., Ltd., Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd., JLL Morii
Valuation & Advisory K.K.
The following is a summary of the appraisal report for each real estate in trust acquired by HCM with July 31, 2023, as theappraisal date. The real estate appraisal report only states judgments and opinions of the appraiser as of a specific point
in time and does not guarantee the appropriateness, accuracy and feasibility of transactions at the presented appraisal
value. Rich Appraisal Institute Co., Ltd., The Tanizawa Sogo Appraisal Co., Ltd., Japan Real Estate Institute, Daiwa Real EstateAppraisal 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 IndicatedIndicated
Discount(millions
Capitalization
Terminal
yen)
value
value
rate
rate
capitalization of yen)(millions of(millions of(%)(Note 3)(%)
rate (%)
yen)
yen)(Note 2)

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

MedicalRehabilitation
Home Bonsejour
Hadanoshibusawa

The Tanizawa
Sogo Appraisal
Co., Ltd.

850

864

5.0

844

5.1

5.2

47

6.5

Paid nursing
home‐7ASHEIM
Hikarigaoka

Japan Real
EstateInstitute

1,600

1,600

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

4,230

4,250

4.4

4,200

4.2

4.5

192

5.3

Paid nursing
home‐10

SOMPO CARE La
vie Re Azamino

Japan Real
EstateInstitute

3,560

3,590

4.2

3,530

4.0

4.3

156

5.1

Paid nursing
home‐11SAWAYAKA
Tachibanakan

Japan Real
EstateInstitute

1,640

1,650

5.2

1,620

5.0

5.4

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

405

408

5.4

402

5.2

5.6

25

6.4

Paid nursing
home‐14

GOOD TIMEHOME Fudo‐mae

Japan Real
EstateInstitute

2,100

2,110

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

‐ 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

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

DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedIndicated
Discount(millions
Capitalization
Terminal
yen)
value
value
rate
rate
capitalization of yen)(millions of(millions of(%)(Note 3)(%)
rate (%)
yen)
yen)(Note 2)

Appraisal
NOI
yield
(%)
(Note 4)

557

566

5.1

553

5.2

5.3

38

7.5

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

4,700

4,760

4.4

4,670

4.2

4.6

226

5.2

4,750

4,820

4.3

4,720

4.1

4.5

220

5.3

1,030

1,040

4.4

1,020

4.2

4.6

48

5.2

Granda Tsuruma‐
YamatoThe Tanizawa
Sogo Appraisal
Co., Ltd.

1,030

1,040

4.7

1,020

4.8

4.9

52

5.2

Paid nursing
home‐21

Smiling Home
Medice Adachi

The Tanizawa
Sogo Appraisal
Co., Ltd.

2,500

2,540

4.4

2,480

4.5

4.6

118

5.2

Paid nursing
home‐22

AIKOENICHIBANKAN
Building

The Tanizawa
Sogo Appraisal
Co., Ltd.

827

828

5.0

826

5.1

5.2

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.

682

690

4.7

678

4.8

4.9

35

5.6

Paid nursing
home‐25

SOMPO CARE La
vie ReHama‐Kawasaki

JLL Morii
Valuation &Advisory K.K.

1,850

1,880

4.5

1,810

4.3

4.7

89

5.2

Paid nursing
home‐26

Hanakotoba
Shin‐Yokohama

Japan Real
EstateInstitute

2,520

2,540

4.0

2,500

3.8

4.1

109

5.2

Paid nursing
home‐27

Hanakotoba
Shin‐Yokohama 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.

964

979

4.8

957

4.9

5.0

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

1,450

1,460

5.3

1,450

5.1

5.5

91

6.8

Paid nursing
home‐31

Sunny Life
Kita‐Shinagawa

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.
The Tanizawa
Sogo Appraisal
Co., Ltd.

‐ 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 nameAppraisalcompany

DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedIndicated
Discount(millions
Capitalization
Terminal
yen)
value
value
rate
rate
capitalization of yen)(millions of(millions of(%)(Note 3)(%)
rate (%)
yen)
yen)(Note 2)

Appraisal
NOI
yield
(%)
(Note 4)

Paid nursing
home‐33

Nichii Home
Nishikokubunji

Daiwa Real
EstateAppraisal Co.,
Ltd.

777

791

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

2,280

2,300

4.1

2,260

3.9

4.2

100

5.0

Paid nursing
home‐41

Rehabilitation
Home Granda
Minamiurawa

Rich Appraisal
Institute Co.,
Ltd.

1,110

1,120

4.1

1,100

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 Maison
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.

514

515

4.4

514

4.5

4.6

25

5.1

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

Japan Real
EstateInstitute

2,390

2,420

4.7

2,360

4.5

4.9

116

6.0

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

Japan Real
EstateInstitute

1,450

1,460

4.8

1,430

4.6

5.0

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

Medical service‐ Niigata
related facilities, Rehabilitationetc.‐1
Hospital

Japan Real
EstateInstitute

2,300

2,310

6.5

2,290

6.3

6.7

153

7.4

Paid nursing
homes,medical
service related
facilities, etc.‐1

The Tanizawa
Sogo Appraisal
Co., Ltd.

14,20014,4004.5

14,100

4.6

4.7

678

5.2

SHIP Senri
Building‐ 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.
Summary of Appraisal Report (Note 1)

Property number

Property name

Total

Appraisalcompany

DCF method
Appraisal Direct capitalization method
Appraisalvalue
NOI(millions of IndicatedIndicated
Discount(millions
Capitalization
Terminal
yen)
value
value
rate
rate
capitalization of yen)(millions of(millions of(%)(Note 3)(%)
rate (%)
yen)
yen)(Note 2)

88,76989,709‐88,108

‐

‐

4,387

Appraisal
NOI
yield
(%)
(Note 4)

5.5

(Note 1) “Appraisal value” is based on the appraisal report with July 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.
(Note 3) “Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in the real estate appraisal report with July 31, 2023,
as the appraisal date and is rounded down to the nearest million yen. In addition, NOI is revenue before deducting depreciation and differs from NCF(net cash flow), which is the amount calculated by adding the gain on investment from security deposits, etc. to NOI and deducting capital
expenditures. The same shall apply hereinafter in this document.
(Note 4) “Appraisal NOI yield” is calculated by the formula below and rounded down to one decimal place. In the column of total appraisal NOI yield, theaverage appraisal NOI yield, which is calculated by dividing the total appraisal NOI of the respective real estate in trust by the total acquisition price,
is shown (rounded down to the first decimal place). Appraisal NOI yield = Appraisal NOI of the respective real estate in trust / Acquisition price of therespective real estate in trust‐ 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.
(vii)Portfolio overview (portfolio diversification)(a) By typeClassification

Paid nursing home

Number ofproperties

Share (%)
(Note 2)43

59,50866,699

75.1

3

4,749

5,570

6.0

1

2,060

2,300

2.6

1

12,92014,20016.3

4879,23788,769100.0Serviced housing for theelderly
Medical service‐related
facilities, etc.
Paid nursing homes,medical
service related facilities, etc.
Total

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

Acquisition price(millions of yen)

(Note 1) “Period‐end appraisal value” indicates amounts stated in the appraisal report with appraisal date of July 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. 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

65,71974,11782.9

2735,91740,993

45.3

Kinki Area

10

29,802

33,12437.6

Chubu Area

0

‐

‐

‐

Core Cities

9

11,80012,797

14.9

Other Areas

2

1,718

1,855

2.2

48

79,23788,769

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 service‐related 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

28,68432,69044.6

50 rooms or more, but lessthan 100 rooms

28

32,14235,74850.0

Less than 50 rooms

5

3,431

3,831

5.3

Total

46

64,25772,269100.0(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 July 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)
SHIP Senri Building(Toyonaka‐shi, Osaka)
SOMPO CARE La vie Re Machidaonoji(Machida‐shi, Tokyo)
SHIP Senri Building (Toyonaka‐shi,
Osaka)
Nichii Home Nishikokubunji(Kokubunji‐shi, Tokyo)b.

PurposeScheduled period

Renovation of ventilating
facilities
Renewal of air conditioners incommon areas

From: Nov. 2023
To: Dec. 2023
From: Nov. 2023
To: Dec. 2023
From: Oct. 2023
To: Dec. 2023
From: Nov. 2023
To: Dec. 2023

Renovation of hot water piping
Renovation of rooftop

Estimated construction costs(thousands of yen)
Payment
Total
Total
duringamountamountperiod already paid
39,000‐‐30,000‐‐27,500

‐

‐

7,740

‐

‐

Capital Expenditures During the Period
Of construction work falling under the category of capital expenditures conducted in the current fiscal period for
assets owned by HCM as of July 31, 2023, the following are the major amounts. The capital expenditures in thecurrent fiscal period amounted to 196,167 thousand yen. Combined with the repair expenses separately charged
to expenses amounting to 26,083 thousand yen, HCM implemented a total of 222,251 thousand yen of
construction work.

Property name
(Location)
Verde Hotaka(Kawaba‐mura, Tone‐gun, Gunma)
SOMPO CARE La vie Re Machidaonoji(Machida‐shi, Tokyo)
SAWAYAKA Tagawakan(Tagawa‐shi, Fukuoka)

PurposeScheduled period

Renovation of exterior walls ofsouth building
Renewal of air conditioners incommon areas

From: May. 2023
To: Jul. 2023
From: May. 2023
To: May. 2023
From: Apr. 2023
To: May. 2023

Rooftop waterproofing

Other real estate

‐
Total

c.

‐

Construction costs(thousands of yen)
62,457
16,2809,728
107,701
196,167

Cash Reserves for Long‐Term Repair Plans
Not applicable.

‐ 52 ‐