As of December 20, 2017

Hopeful future
for Japan
Nippon Healthcare
Investment Corporation
Presentation Material for
The 7th Fiscal Period Ended October 2017
Securities code ： 3308

Contents
Disclaimer
Highlights of 7th Fiscal Period (Ended October 2017)

3

Section 1
Operating Results for 7th Fiscal Period
Operating Results for 7th Fiscal Period

5Forecast of Operating Results for 8th Fiscal Period
and 9th Fiscal Period
Distribution per Unit

6
7

Section 2External Growth
Change in Asset Size

9

Sourcing Route10

Section 3

Continuous Evaluation of Operators and Monitoring System 19
Implementation of Monitoring andRelationships with Operators

20

Introduction of Operators

21

Operator Initiatives (AI and System Introduction)

22

Section 4
Financial Status
Status of Interest-Bearing Liabilities(as of October 31, 2017)・・・・・・・・・・・・・・・・・・・・

24

Policy on Distributions in Excess of
Earnings/Index including NHI

25

Overview of the Unitholder Benefits Program・・・・・・・・・・・・・ 26
・・・・・・・・・・・・・・

Section 5

Environment Surrounding Healthcare Industry

Portfolio Analysis
Portfolio List (as of October, 2017)12

Status of Portfolio: Change in Occupancy Rates

13

Surrounding Status of Healthcare Facilities :Progress of aging society

29

Remaining Lease Contract Period of Each Property

14

Market Size by Segment( as of June 2016)30

Status of Portfolio: Fee Systems of Facilities

15

History of Revisions to Nursing Care Fees

31

Status of Portfolio (as of October 31, 2017)16

Portfolio Resident Attributes (as of October 31, 2017)17

Properties Renovated in the 7th Fiscal Period

18

Appendix

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

1Disclaimer

This material is solely for the purpose of providing information and is not intended for the purpose of offering or soliciting
investment, or as a recommendation to purchase or sell any specific product. Please refer any inquiries on potential
purchases of the investment units of Nippon Healthcare Investment Corporation to a securities dealer.
This document is not intended to provide information to meet the requirements of Japan’s new Financial Instruments andExchange Act or Act on Investment Trusts and Investment Corporations, or any associated cabinet orders, cabinet officeordinances, rules, or any rules governing companies listed on the Tokyo Stock Exchange, or any other applicable rules,
nor is it a disclosure document or statement of financial performance prepared in accordance with the provisions of anyof the foregoing.
This document contains forward-looking statements. However, these forward-looking statements are based on certain
assumptions and judgments made using currently available information, and there are a number of known and unknown
risks and uncertainties. These forward-looking statements are not a guarantee of future performance or management
results of Nippon Healthcare Investment Corporation, and actual results may materially differ from any explicit or implicit
forecasts contained herein.
Although the information contained in this document is the best available at the time of publication, no assurances can begiven regarding the accuracy and certainty of this information. The content of this document may be modified orwithdrawn without prior notice.
Reproduction or use of the contents included in this document without prior approval is prohibited.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

22

Highlights of 7th Fiscal Period (Ended October 2017)█ <Management status>Average occupancy rate for the entire portfolio at the end of the 7th Fiscal Period was 89.5%(up 2.9% from the 6th Fiscal Period)Implemented renovation of interior and exterior finishing at some facilities for the purpose of promoting andstably maintaining occupancy (Sawayaka Hinodekan: 16 million yen, Verger Hirakata: 11 million yen, etc.)Operators’ rent-paying capacity remained unchanged from the 6th Fiscal Period at 1.5█ <External growth>Continual property acquisitions utilizing sponsor’s bridge funds (approx. 10.0 billion yen)

█ <Financial status>


Staggered maturities by refinancing 2.3 billion yen

LTV was 46.2%, ratio of fixed rates was 76.5% and average remaining loan period was 2.3 years█ <Other>With Sompo Care Message joining the lineup of operators offering unitholder benefits,
unitholder benefits will be offered by all operators for the 7th Fiscal Period

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

3Section 1 Operating Results

for the 7th Fiscal Period

Operating Results for 7th Fiscal Period
Actual results for the 7th Fiscal Period
6th FP(ended Apr. 2017)(results)(unit: million yen)

7th FP(ended Oct. 2017)(results)

Difference

Increase factors

22
697
419
101
193
277
0
27
21
250
249

22
697
424
101
195
273
0
27
21
245
244

-0
+4
+0
+2
-4
+0
+0
+0
-5
-5

74,632

74,632

-

4,143

4,124

- 19

3,343

3,274

- 69

800

850

+ 50

Depreciation per unit (yen)

2,595

2,624

Ratio of distribution in excess of earnings to
depreciation per unit

30.8%

32.4%

Number of properties owned at end of the fiscal period
Operating revenue
Operating expenses
Property-related expense (excluding depreciation)
Depreciation
Operating income
Non-operating revenue
Non-operating expense
Interest expense
Ordinary income
Net income
Number of investment units issued and outstandingat the end of the fiscal period (units)
Distribution per unit (yen)(including distribution in excess of earnings)
Distribution per unit (excluding distribution inexcess of earnings)
Distribution per unit in excess of earnings

Depreciation(+2 million yen)Tax and public dues (Property-related expense)(+2 million yen)

Decrease factor
Repair Cost(-2 million yen)

(Reference)

Comparison of forecast and actual results for 7th Fiscal Period(unit: million yen)

Number of properties owned at end of the fiscal period
Operating revenue
Operating expenses
Net income
Distribution per unit (yen)(including distribution in excess of earnings)
Distribution per unit
(excluding distribution in excess of earnings)
Distribution per unit (in excess of earnings)

7th FP (ended Oct. 2017)(forecast)(Disclosed as of
21 Dec. 2017)

7th FP(ended Oct. 2017)(results)

22
697
426
242

22
697
424
244

-1
+1

4,100

4,124

+ 24

3,250

3,274

+ 24

850

850

-

DifferenceThis document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

5Forecast of Operating Results for 8th Fiscal Period and 9th Fiscal Period
Increase factors

Forecast of the 8th fiscal period

Depreciation(+3 million yen)

Utility Charges
Other fees(+3 million yen)(+2 million yen)

Decrease factor
Repair Cost(-5 million yen)
8th FP(ending Apr. 2018)(forecast)

Number of investment units issued and outstandingat the end of the fiscal period (units)
Distribution per unit (yen)(including distribution in excess of earnings)
Distribution per unit (excluding distribution in excess ofearnings)

Distribution per unit in excess of earnings

Difference fromthe 7th FP

74,632

-

4,100

-24

3,240

-34

860

+10

(Reference)

2,677

Ratio of distribution in excess of earnings to depreciation
per unit

32.1%

Increase factors

Forecast of the 9th fiscal period(unit: million yen)
9th FP(ending Oct. 2018)(forecast)
Number of properties ow ned at end of the fiscal period

Depreciation per unit (yen)Difference fromthe 8th FP

22

Operating revenue

697

Operating expenses

Asset Custody and Admin. Service fees(+6 million yen)

Depreciation(+2 million yen)

Decrease factor-

Repair Cost

-0

427

-0

Property-related expenses (excluding depreciation)

86

-13

Depreciation

202

+2

Operating income

270

-0

Non-operating revenue--

Non-operating expense

28+0Interest expense

21+0

Ordinary income

242

-0

Net income

241

-0

(-12 million yen)
9th FP(ending Oct. 2018)(forecast)

Number of investment units issued and outstandingat the end of the fiscal period (units)
Distribution per unit (yen)(including distribution in excess of earnings)
Distribution per unit (excluding distribution in excess ofearnings)

Distribution per unit in excess of earnings

Difference fromthe 8th FP

74,632

-

4,100

-

3,230

-10

870

+10

(Reference)
Depreciation per unit (yen)2,713

Ratio of distribution in excess of earnings to depreciation
per unit

32.1%

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

6

Distribution per Unit
Distribution per Unit
（YEN）

5,000

4,067

4,000

3,471
3,000

810

768

4,295
800

4,106

4,143

4,124

4,100

4,100

800

800

850

860

870

3,274

3,240

3,230

Distribution inexcess ofEarnings
per unit

2,000

2,661
1,000

3,299

3,495

3,306

3,343

End of the
3rd FP(ended October
2015)

End of the
4th FP(ended April
2016)

End of the
5th FP(ended October
2016)

End of the
6th FP(ended April
2017)

Distribution
per unit(excluding
distribution inexcess of
earnings)0

End of the
2nd FP(ended April
2015)

End of theForecast of the Forecast of the
7th FP
8th FP
9th FP(ended October (ending April (ending October
2017)
2018)
2018)

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

7Section 2

External GrowthChange in Asset Size
Continuous external growth through acquisition of carefully selected properties(million yen)

Listing asJapan’s first
healthcare
REIT

External growth through fundprocurement including the first public
offering by a listed healthcare REIT

Further expansion of asset size through formation ofbridge funds, etc. utilizing sponsor support (several
preferential negotiation rights in the Three Major
Metropolitan Areas including Tokyo have beenacquired.)

30,00025,00020,00018,60819,31819,31819,31816,05815,00010,00013,280Total of
Total of17
14
properties properties

Total of
Total of
Total of
Total of
22
22
22
21
properties
properties
properties
properties

5,000

0
Listing

End of the 3rd FP(ended October
2015)

End of the 4th FP(ended April 2016)

End of the 5th FP(ended October
2016)

End of the 6th FP(ended April 2017)

End of the 7th FP(ended October
2017)

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

9Sourcing Route
Properties acquiredin 3rd FP

14 properties
13,280 million yen

5 properties
3,750 million
yenChange ofownersSponsorgroup
2 properties
1,578 million
yen

13,990 million
yen

Sponsor’s
bridge funds
Approximately
10.0 billion yen

14properties
13,280
millionyen

Silver Heights
Hitsujigaoka No.3
Acquisition price:
1,200 million yen• M&A cases for businesssuccession• Needs for securing liquidity
on hand

Sales & Leaseback

Off-balancing in line with M&A

Asset
Management
Company’s
uniquenetwork

Advisor15 properties

3 properties/2,778 million yen

Properties acquired in 4th FP

Property acquired in 5th FP

4 properties/2,550 million yen

1 property/710 million yen

6th FP, 7th FP ~4 properties
Acquisition price: 2,550 million yen

・ Properties sold by developergroup which owns operators
・ Exclusive needs for facility
management

Proactively discussing
development properties
in addition to
information on existing
facilities obtained fromthe sourcing routes

2 properties
Acquisition price:
1,578 million yen• Properties introduced by
the sponsor group• Needs for asset
management from owners

Change of owners

Upon Listing

Sompo no ie
Nishitanabeekimae
Acquisition price:
710 million yen• Needs for asset
management fromownersAcquisition ofpreferential negotiationrights in the Three Major
Metropolitan Areas
including Tokyo in theamount of approximately
10.0 billion yen

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

10Section 3

Portfolio Analysis

Portfolio List (as of October, 2017)
Acquisition price(Note 2)No.
Acquisition period(Note 1)

Property nameOperator

Facility type

LocationPrice(millionyen)Appraisal Number of
6th FP
7th FP
value
Occupancy Occupancy
rooms
rates
(rooms)rates
Share of (million yen)
portfolio(Note 3)(Note 4) （Note5） （Note6）(%)

11

1st Fiscal Period

Charm Sweet Ryokuchi Koen

Fee-based homes for the elderly with nursing care

Charm Care Corporation

Toyonaka City, Osaka

1,950

10.1

3,060

128

96.0

98.4

22

2nd Fiscal Period

Super Court JR Nara-Ekimae

Residential-type fee-based homes for the elderly

Super Court

Nara City, Nara

1,569

8.1

1,750

155

89.6

86.4

3
3

1st Fiscal Period

Sompo Care LAVIERE Hiroshima Hikarigaoka

Fee-based homes for the elderly with nursing care

Hiroshima City, Hiroshima

960

5.0

1,230

80

83.7

80.0

Sagamihara City, Kanagawa

1,170

6.1

1,750

80

57.5

67.5

Yokosuka City, Kanagawa

1,839

9.5

2,060

104

92.3

86.5

Sompo Care Next

44

1st Fiscal Period

Sompo Care LAVIERE Sagamihara Chuo

Fee-based homes for the elderly with nursing care55

2nd Fiscal Period

Sompo Care LAVIERE Kinugasayama Koen

Fee-based homes for the elderly with nursing care66

1st Fiscal Period

Sawayaka Kaikyokan

Fee-based homes for the elderly with nursing care

Kitakyushu City, Fukuoka

630

3.3

899

65

100.0

93.8

77

1st Fiscal Period

Sawayaka Meisuikan

Fee-based homes for the elderly with nursing care

Kitakyushu City, Fukuoka

590

3.1

813

87

100.0

100.0

88

1st Fiscal Period

Sawayaka Heart Life Nishikyogoku

Residential-type fee-based homes for the elderly

Kyoto City, Kyoto

750

3.9

1,190

84

97.6

100.0

Sawayaka Club99

2nd Fiscal Period

Sawayaka Hinodekan

Fee-based homes for the elderly with nursing care

Niigata City, Niigata

773

4.0

921

50

100.0

100.0

10
10

2nd Fiscal Period

Sawayaka Riverside Kurinoki

Residential-type fee-based homes for the elderly

Niigata City, Niigata

266

1.4

324

33

82.0

92.3

11
11

2nd Fiscal Period

Sawayaka Obatake Sanbankan

Residential-type fee-based homes for the elderly

Kitakyushu City, Fukuoka

289

1.5

355

50

94.0

92.0

12
12

1st Fiscal Period

Nichii Care Center Fukushima Omori

Fee-based homes for the elderly with nursing care

Nichii Gakkan

Fukushima City, Fukushima

265

1.4

353

52

100.0

100.0

13
13

2nd Fiscal Period

La’nassica Arakogawa

Fee-based homes for the elderly with nursing care

Cedar

Nagoya City, Aichi

1,279

6.6

1,430

100

100.0

99.0

14
14

1st Fiscal Period

Verger Hirakata

Residential-type fee-based homes for the elderly

Nihon Kaigo

Hirakata City, Osaka

950

4.9

1,600

104

75.7

68.2

15
15

3rd Fiscal Period

Minna-no-ie Omiya Yoshinocho

Fee-based homes for the elderly with nursing care

Saitama City, Saitama

740

3.8

779

33

81.8

78.7

16
16

3rd Fiscal Period

Minna-no-ie Chuo-ku En’nami

Fee-based homes for the elderly with nursing care

Saitama City, Saitama

838

4.3

859

51

(Note 7)

58.8

17
17

3rd Fiscal Period

Silver Heights Hitsujigaoka No.3

Fee-based homes for the elderly with nursing care

Sapporo City, Hokkaido

1,200

6.2

1,340

109

94.5

90.0

18
18

4th Fiscal Period

Alpha Living Okayama Nishigawa Ryokudokoen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

730

3.8

789

53

65.4

81.8

19
19

4th Fiscal Period

Alpha Living Okayama Korakuen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

610

3.2

672

45

83.3

95.8

20
20

4th Fiscal Period

Alpha Living Takamatsu Ekimae

Residential-type fee-based homes for the elderly

Takamatsu City, Kagawa

605

3.1

641

43

97.7

88.6

21
21

4th Fiscal Period

Alpha Living Takamatsu Hyakkenmachi

Elderly housing with supportive services

Takamatsu City, Kagawa

605

3.1

628

50

92.5

88.8

22
22

5th Fiscal Period

Sompo no ie NishitanabeekimaeFee-based homes for the elderly with nursing care

Osaka City, Osaka

710

3.7

741

42

92.8

97.6

19,318100.0

24,184

1,598

-

-

11 operators(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)22 properties

WisnetSilver Heights Sapporo

Anabuki Medical Care

Sompo Care Message

Total

Red numbers refer to Three major metropolitan areas and blue numbers to Core cities. The background colors for Property name and Facility type columns indicate
types of facilities; orange for fee-based homes for the elderly with nursing care, blue for residential-type fee-based homes for the elderly and yellow-green for
elderly housing with supportive services.
“Acquisition price” is excluding consumption tax, local consumption tax and the various expenses required for the acquisition. “Share of portfolio” is the respective
acquisition price expressed as a percentage of the total of the acquisition prices, rounded to one decimal place. Therefore the total of “Share of portfolio” may bedifferent from the figure indicated in “Total.”“Appraisal value” is as of October 31, 2017.
“Number of rooms” is the figure indicated in the written explanation of important matters pertaining to the fee-based home for the elderly provided by the operator.
“Occupancy rate” is obtained by dividing the number of residents indicated in the written explanation of important matter received in June 2017 from operators by
the resident capacity, rounded down to one decimal place.
“Occupancy rate” is obtained by dividing the number of residents indicated in the written explanation of important matters received in December 2017 fromoperators by the resident capacity, rounded down to one decimal place.
The number of residents was zero at the end of April 2017 because Minna-no-ie Chuo-ku En’nami suspended operations from January 2017.

<Diversification of facilities>

Residential-type
29.9%
Fee-based homes
for the elderly 96.9%

Elderly housing withsupportive services
3.1%

With nursing care
67.0%

(Note) Total acquisition price by type as a percentage of thetotal acquisition price is indicated.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

(Note 7)

12

Status of Portfolio：Change in Occupancy Rates
Change in occupancy rates (overall)Occupancyrate(right(left axis)
Occupancy
rate
axis)

Total resident
capacity(rightaxis)
Nuber
of facilities
(left
axis)

(persons)

100.0%

1,800

90.0%

1,600

80.0%

1,400

70.0%

1,200

60.0%

1,000

50.0%
800

40.0%

600

30.0%

Oct. 2017

Sep. 2017

Aug. 2017

Jul. 2017

Jun. 2017

May. 2017

Apr. 2017

Mar. 2017

Feb. 2017

Jan. 2017

Dec. 2016

Nov. 2016

Oct. 2016

Sep. 2016

Aug. 2016

Jul. 2016

Jun. 2016

May. 2016

Apr. 2016

Mar. 2016

Feb. 2016

Jan. 2016

Dec. 2015

Nov. 2015

Oct. 2015

Sep. 2015

Aug. 2015

Jul. 2015

Jun. 2015

May. 2015

Apr. 2015

0Mar. 2015

0.0%
Feb. 2015

200
Jan. 2015

10.0%
Dec. 2014

400

Nov. 2014

20.0%

Stable occupancy rates
 The overall occupancy rate rose by 2.9% from 86.6% at the end of April 2017 to 89.5% at the end of October 2017.
 The period average rose by 1.0% from 86.3% for the 6th Fiscal Period to 87.3% for the 7th Fiscal Period.
(Note) Occupancy rates are obtained by dividing the number of residents based on interviews with all facilities, by resident capacity.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

13

Remaining Lease Contract Period of Each Property(Note) “Remaining Lease Contract Period” indicates period remaining as of October 31, 2017. “Average remaining period” is a weighted average with acquisition prices,rounded to one decimal place.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

14

Status of Portfolio: Fee Systems of Facilities(Note1)“One-time entrance fee” indicates one-time entrance fee stated in the written explanation of important matters or in the price list acquired from the operators. “Monthly fee” indicates themonthly fee for a standard single room stated in the written explanation of important matters or in the price list acquired from the operators (excluding the co-payment amount of nursing
care insurance services). One-time entrance fee and monthly rent for facilities with one-time entrance fee are indicated on a one-time entrance fee basis (one-time entrance fee andmonthly fee are indicated separately) whereas those for facilities without one-time entrance fee are indicated on a monthly payment basis.

(Note2)

Minna-no-ie Chuo-ku En’nami (Former monthly fee 168,800 yen) and Silver Heights Hitsujigaoka No.3 (Former monthly fee 162,540 yen) revised fees in October 2017; and Alpha Living
Takamatsu Hyakkenmachi (Former One-time entrance fee 960,000 yen and monthly fee 152,000 – 212,000 yen) revised fees in May 2017.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

15

Status of Portfolio (as of October 31, 2017)
Rent-Paying Capacity

More than
2.0x
12.1%

Proportion of Nursing Care Fee

Proportion of Entrance Fee
Amortization Income

More than 60%,
but 70% or less
5.6%

More than 15%,
but 20% or less2.7%

1.2x or less
29.7%

Rent-Paying
Capacity (Note 1)
Average 1.5x
(On appraisal basis:
Average 1.7x)More than 1.2x,
but 1.5x or less
19.7%

More than 1.5x,
but 2.0x or less
38.6%

(Note 1) “Rent-paying capacity” refers to themultiple obtained by dividing therespective acquired asset’s mostrecent EBITDAR by rent.
* EBITDAR＝asset’s operating
income+ depreciation + rent

Proportion of
Nursing
Care Fee(Note 2)
Average 49.8%
More than 50%,
but 60% or less
50.9%

50% or less
43.5%

(Note 2) “Proportion of nursing care fee”
refers to the proportion of theacquired asset’s net sales that isaccounted for by nursing care fee(including residents’ co-payment
portion).

More than
5%, but
15% or less
36.8%

Proportion of
Entrance Fee
Amortization
Income(Note 3)
Average 4.1%

5% or less
60.6%

(Note 3) “Proportion of entrance fee
amortization income” refers to the
proportion of the acquired asset’s net
sales that is accounted for byentrance fee amortization income.

(*) Data are based on information on business income and expenditures from October 2016 to September 2017 disclosed by the respective operator. However, data for Nichii Care
Center Fukushima Omori are based on information on business income and expenditures from July 2016 to June 2017; for La’nassica Arakogawa from April 2016 to March 2017,
and for Silver Heights Hitsujigaoka No.3 from September 2016 to August 2017.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

16

Portfolio Resident Attributes (as of October 31, 2017)
Gender(Note1)

Age Group(Note2)

Level of Requiring Nursing Care or Support(Note 3)
Independent Other
Requiring
1.3%
0.2% Requiring nursing
support level 1
care level 5

Under 65
65 years years
or over, 1.9%
but under
75 years

Requiring support
level 2

6.9%

Male
28.4%

Female
71.6%

6.6%

5.6%

75 yearsor over,but under
85 years

27.6%

8.5%

85 yearsor over

63.6%

Average
Requiring nursing
requiredcare level 1
level of21.5%
nursing care
2.3
Requiring nursing
care level 2

Requiring
nursingcare level 4

15.5%

Requiring
nursingcare level 3

18.0%

22.7%
(Note 1) The graph indicates the ratio of thenumber of residents per gender
expressed as a percentage of the total
number of residents.

(Note 2) The graph indicates the ratio of thenumber of residents per age groupexpressed as a percentage of the total
number of residents (except for residents
at Sompo Care LAVIERE Sagamihara
Chuo and Sompo Care LAVIERE
Kinugasayama Koen as there is no suchinformation stated in the written
explanation of important matters).

(Note3) The graph indicates the ratio of the number ofresidents per level of requiring nursing care or
support expressed as a percentage of the total
number of residents.
“Average level of nursing care” indicates thefigure obtained by multiplying the respective
number of residents categorized as
independent, requiring support level 1,
requiring support level 2, requiring nursing
care levels 1-5 and other by 0, 0.375, 1, 1-5
and 1 respectively, and dividing the sum total
by the number of residents.

(*) Data are based on figures stated in the written explanation of important matters (July, 2017-November,2017) provided by each operator. All percentage figures are rounded
to one decimal place. “Average required level of nursing care” is rounded down to the first decimal place.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

17

Properties Renovated in the 7th Fiscal Period
Sawayaka Hinodekan (Acquisition price: 773 million yen)

Sompo Care LAVIERE Sagamihara Chuo (Acquisition price: 1,170 million yen)

 Site Features

Located approximately 1.2km
from Sagamihara Station on the
JR Yokohama Line

Site Features
Located approximately 1.7km
from Niigata Station on the JR
Joetsu Shinkansen and Shinetsu Main Line

 Property Features

Property Features

The Property provides rooms of
18m2 or more, which is thestandard size for rooms designed
for people requiring long-termcare, and the rooms are equippedwith sink, toilet and bed.

The Property provides
standard size private rooms for
specified facilities designed forpeople requiring long-termcare, and the rooms areequipped with sink and toilet.

Renovation of exterior walls(Construction amount: 16 million yen)

Beautification of 1F entrance portion(Construction amount: 3 million yen)
Entrance
Elevator

Before construction work

After construction work

Before construction work

After construction work

At Sawayaka Hinodekan, implemented renovation work contributing to high occupancy rates (100%) by conducting repair work for maintaining the esthetic appearance in order tostay competitive with rival properties in the surrounding area.
At Sompo Care LAVIERE Sagamihara Chuo, the interior finishing was renovated from the stately one from the time it was constructed 10 years ago to one now based on lightcolor tones. The occupancy rate was up 10 percentage points from the end of the 6th Fiscal Period to 67.5% at the end of the 7th Fiscal Period.
Proactive implementation of necessary repair work has led to higher satisfaction of not only the residents and their families but also of facility employees, and has also resulted in astronger relationship with the operator.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

18

Continuous Evaluation of Operators and Monitoring System
Business operation cycle

Facility management/Monitoring system The Asset Management Company of NHI strives to enhance value of facilities

Common items for evaluation at the time of new acquisition andcontinuous evaluation

by regularly collecting information on the operation from the operators and thefacilities (directors) in cooperation with PM companies, etc.

Asset
Management
Company Quality and variety of services that the operator provides
 Credibility and operational skills of the operator

Quantitative Perspective• Stability, profitability, growth potential and productivity of the operator’s finances• Stability, profitability, growth potential of the operator’s healthcare business• The company’s history and the number of years in business (The items are
confirmed on the basis that such financial data, etc. be provided by the operator.)

PM company• Checking facility operation status• Formulating repair, etc. plans

Qualitative Perspective• The operator’s attitude towards information disclosure

Operators• Degree of importance, etc. of healthcare-related business in the operator group

Facility(director)• Strength, securement of human resources, etc. at the healthcare facility• Working environment and employment situation of facility workers• Compliance system at the operator or at each facility (Documents provided by
the operator, results of interviews and research by outside experts, etc. are used
for confirming the items.)• Overall facility supervision• Operation/management• Solicitation of residents• Overall facility operation• Responses to residents• Responses to inquiries/applications
from potential residents

Conducting the same evaluation as at the time of acquisition even after acquisition

 Four members are placed in the Healthcare Management Team.
(Including those holding concurrent positions).
 Regularly conduct the same evaluation as at the time of property
acquisition.
 In addition, visit facilities, etc. and conduct facility monitoring,interviews, etc. including the following.

 Monitoring (Twice or more/year)• The Asset Management Company and PM companies visit operators’ facilities andconduct examinations every fiscal period.
 Interviewing (Once or more/year)• Confirming the following items with directors and care providers at facilities:(1) Responses to residents(2) Employees training program(3) Status of governance (including items to check for prevention of resident
mistreatment)This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

19

Implementation of Monitoring and Relationships with Operators
On-site monitoring█ Sompo Care LAVIERE
Kinugasayama Koen

█ Minna-no-ie
Omiya Yoshinocho█ Charm Suite
Ryokuchi Koen

█ Alpha Living■ Facility visit and interview(September 2017)■ Facility visit and interview(October 2017)■ Facility visit and interview(October 2017)■ Facility visit and interview(October 2017)

Okayama Nishigawa Ryokudokoen

Relationships with operators█ Sompo Care LAVIERE Kinugasayama Koen

█ Minna-no-ie Chuo-ku En’nami■ Respect for the Aged Day (September 2017):
Delivered a congratulatory address as owner on invitation at
the Respect for the Aged Ceremony hosted by the facility■ Resumed operations (September 2017):
Lent a hand, such as moving possessions for residents,
upon the facility’s resumption of operations

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

20

Introduction of Operators
Highly reliable operators
Operator

Number of Number ofmanaged operating
facilities
rooms(Note1,2)(Note1)

Nichii Gakkan

425

13,793

Sompo Care Message

317

17,273

Wisnet127

3,556

Sompo Care Next

117

8,826

Sawayaka Club

74

4,270

Super Court

48

3,209

Established

August, 1973

Attributes

Listed on the first section of the Tokyo Stock
Exchange

Subsidiary of Sompo Holdings, Inc., a company
listed on the first section of the Tokyo Stock
Exchange
Subsidiary of Sohgo Security Service Co,. Ltd., a
January, 1998 company listed on the first section of the Tokyo
Stock Exchange
Subsidiary of Sompo Holdings, Inc., a company
November, 1992 listed on the first section of the Tokyo Stock
Exchange
Subsidiary of Uchiyama Holdings Co., Ltd., a
December, 2004 company listed on the first section of the Tokyo
Stock Exchange
May, 1997

May, 1995－

Diversification of Operators

Sompo Care Message 3.7%
Nihon Kaigo Iryo Center 4.9%
Silver Heights Sapporo
6.2%
Cedar 6.6%
Super Court 8.1%

Nichii Gakkan 1.4%
Sompo Care
Next 20.5%

Sawayaka
Club 17.1%

Wisnet 8.2%
Charm Care
Corporation 10.1%

AnabukiMedical Care 13.2%

Cedar

42

2,254

April, 1981

Listed on JASDAQ Standard on the Tokyo Stock
Exchange

Charm Care Corporation

40

2,866

August, 1984

Listed on JASDAQ Standard on the Tokyo Stock
Exchange

Asset size in which lease agreement
is concluded with a single operator

Anabuki Medical Care

29

1,291

June, 2009

Subsidiary of Anabuki Kosan Inc., a company listedon the first section of the Tokyo Stock Exchange

40% or less

Nihon Kaigo Iryo Center

25

1,033

October, 1997

Silver Heights Sapporo(Note1)(Note2)3

321－

December, 1961 －(Note) The total acquisition price by operator as a percentage ofthe total acquisition price is indicated, rounded to one
decimal place.

Number of managed facilities and Number of operating rooms indicate the number of facilities and the number of rooms
for fee-based homes for the elderly, group homes and elderly housing with supportive services based on operators’
websites and interviews with them (as of November 30, 2017).
Operators are listed in order of the number of facilities they manage.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

21

Operator Initiatives (AI and System Introduction)
Nichii Gakkan

Sompo Care Group(Sompo Care Message and Sompo Care Next)

Anabuki Medical Care

Agrees to business alliance in the
medical and long-term care fields
with NEC (November 2017)

Sompo Japan Nipponkoa Insurance Inc.
invests in Care Design Institute Inc.
(October 2017)

Commences operating
care record management systemdeveloped in-house (September 2017)

 Nichii Gakkan commenced joint research fordevelopment of long-term care and self-reliancesupport services for the elderly utilizing artificial
intelligence (AI).

 Based on the decision to take part in“development of AI-based care planningsystems,” Sompo Japan Nipponkoa InsuranceInc., which is a domestic business company in the
Sompo Holdings Group, invested in Care Design
Institute Inc. (CDI), which develops and provides
AI-based care planning systems.

 Anabuki Medical Care commenced operation of“Medical Care System” jointly developed with
Anabuki College Service for care record form
management and work shifts for the purpose ofminimizing the work burden on staff.

 Where the creation of care plans designed forelderly persons individually is usually performed
manually by care managers, the joint research will
involve utilizing one of NEC’s AI technologies,“Heterogeneous Mixture Learning Technology,”
for that process. This technology that
automatically detects patterns from a wide rangeof data will be used to learn and analyze various
data on the elderly in an aim for proposal of
optimal care plans for elderly persons individually.
 The plan is to not only create care plans forphysical care, such as assistance in bathing andassistance in attending outpatient appointments,and livelihood support, such as cooking andcleaning, but also to create care plans promoting
effective mobility improvement, etc. that areevidence-based through AI.
 The aim is to help long-term care business
operators minimize the burden on care managers
and other on-site staff and foster humanresources capable of creating more highly
effective care plans.

 Going forward, realization of care managementthat leads to support for self-reliance andprevention of deterioration in conditions will be
aimed by working together with CDI to create careplans according to the health and living conditionsof the persons requiring support or long-term carethrough utilization of AI.

 With introduction of this system, shift rostering,checking of the status of inputting provision
records, extraction of medical information andlong-term care, etc. livelihood information andcalculation of productivity metrics are automated,enabling time savings from enhancement ofoperational efficiency and serving to enhance thequality of services, make up for labor shortages
and prevent care accidents.

 CDI develops and provides systems realizing caremanagement that leads to support for self-relianceby creating care plans according to the health andliving conditions of the persons requiring support
or long-term care through utilization of AI.
 By providing various data that would serve todevelop such AI and by taking part in theoperation of the business, the Sompo Care Groupwill keep realizing “custom-made care” designed
for users individually while also contributing tosolving the issues faced by the long-term careindustry.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

22Section 4

Financial Status

Status of Interest-Bearing Liabilities (as of October 31, 2017)
Status of Interest-Bearing Liabilities (as of October 31, 2017)

LTV(Note)

Current
Portion ofLong-term

46.2％

Averageremaining
period (Note)

2.3 years(Note) LTV and average remaining period indicate figures
calculated as of October 31, 2017, rounded to the firstdecimal place. LTV is calculated based on total assets.

Ratio of Long-Term Loans Payable andShort-Term Loans Payable
Short-term loans
payable andcurrent portion of
long-term loans payable

Ratio of Fixed Rates andFloating Rates

Repayment Schedule(million yen)

Ratio of floating rate

3,000

23.5%
2,500

26.5%

2,000
1,500

Long-termloans payable

73.5%

1,000

Ratio of fixed rate

500

76.5%
0

(*) Interest rates are rounded to the third decimal place.
(**) For loans of which floating interest rates have been converted to, in effect, fixed rates through a swap
agreement, interest rate indicates the rate after such conversion.

8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP
ending ending ending ending ending ending ending ending ending ending
Apr.
Oct.
Apr.
Oct.
Apr.
Oct.
Apr.
Oct.
Apr.
Oct.
2018 2018 2019 2019 2020 2020 2021 2021 2022 2022

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

24

Policy on Distributions in Excess of Earnings

Implementation of distributions in excess of earnings
taking advantage of features of healthcare assets

Implement distributions in excess ofearnings every accounting period with

High depreciation ratio

an upper limit of 40% ofRegarding facilities owned by NHI, the ratio ofbuildings to the entire asset is high, at nearly 70%.
 The ratio of depreciation without cash payout is high.


depreciation
Rental business
expenseand
SG&A expenseLow burden of construction expenses

Repairs to be borne by NHI are limited to building
frames and main structural sections
 Expenses required for update of equipment tend tobe low

RentalincomeDepreciation

Minimizing impact on finance byconducting distributions in excess ofearnings with upper limit of 40% ofdepreciation for each period

Distributions inexcess of earnings



Incomebefore taxes

Distributions(income)Distributions
tounitholders

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

25

Overview of the Unitholder Benefits Program

With the cooperation ofoperators who are the tenants,
the unitholder benefits
program will be offered
to unitholders as of the end of
fiscal period ended April 2017.

<COCO Juku>
 Free enrollment and discount from tuition< COCO Juku Junior > Free enrollment<New York University-Professional Departmentof American Language Institute Tokyo school>
 Free enrollment and discount from tuition

 Discount coupon for the initial
lump sum payment (200,000 yen
discount from the initial lump sum payment, or in the case of theplan of 0 yen initial lump sum
payment, discount the amountequivalent to the monthly rent) Free voucher for an overnight trial
stay (with meals) Free voucher for an overnight
trial stay (with meals) Free voucher for a one-day
facility tour (with lunch
provided)<For the contract of lump sum payment plan> Discount from the initial lump sum payment(200,000 yen or 3% discount from the initial
lump sum payment, whichever is thegreater)<For the contract of monthly payment plan> From the monthly payment, persistent
discount of 3% of the amount equivalent to
the monthly rent (until the end of thecontract term) Free one-day facility tour (with lunch
provided) Free voucher for an overnight
trial stay (with meals)

 10% discount coupon for the
first monthly payment
 Free voucher for an overnight
trial stay (with meals) Free voucher for a one-day
facility tour (with lunch
provided) Discount on occupancy
expenses (discount of 2
month’s rent of the facility
upon moving in)<Nichii Life>
 Discount voucher for house keeping,childcare and long-term care service

 Discount coupon for the initial
lump sum payment (5%discount) Free voucher for an overnight
trial stay (with meals) Free voucher for a facility tour
(with lunch provided) Furniture presented to the newresident for the below “Facilities
Available” (chosen from the catalog
Anabuki Medical Care provides) (worth 50,000 yen excluding tax, in
excess of 50,000 yen the difference
shall be paid by the resident, can alsochoose two or more pieces offurniture if it is within 50,000 yen)

 Free voucher for an overnight trial stay(with meals) one-time-only Free voucher for a facility tour (withlunch provided) one-time-only 50,000 yen cash back for the monthly
payment for the new resident (one-time-only, need to stay more than
three months after moving into thefacility)<Nursing homes “Sompo no ie”>
 From the monthly payment, discount of theamount equivalent to 1 month’s rent andmaintenance fees of the available facility<Elderly housing with supportive services“Sompo no ie S”>
 From the monthly payment, discount of theamount equivalent to 1 month’s rent,
common area fees and life support services
fees of the available facility

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

26

Memorandum

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

27Section 5

Environment Surrounding
Healthcare Industry

Surrounding Status of Healthcare Facilities : Progress of aging society
Domestic demographics by age
Population(10 thousand)

14,000

Actual figures

12,00010,000
8,000
2,979

3,012

2,843

2,553

2,515

2,722

2,751

2,603

(％)

Estimatedfigures

1,847 1,752 1,680 1,611 1,457 1,324
2,249 2,001
26.7

29.1 30.3

23.0

20.2

36.1
1,2041,129
31.6 33.4

1,073

39.9
37.7 38.8 39.4

939

861

30.0
791

700

17.9

600

12.9

6.1
229.0

31.0

46.0

74.2

男性
Male

105.1

138.6

2010年

94.8
23.3

340.5

174.2

2000年

131.3

68.8
19.3

281.4

2005年

5.2

1995年

4.6

1990年

4.3

9.7

11.1

女性
Female

411.9

188.9

2015年

8.0

1985年

0

男性
Male

15.0
10.0
5.0
0.0

2060年

2055年

2050年

2045年

2040年

2035年

2025年

2030年
22.6

23.1

13.9

14.6

15.4

450.6

217.3

471.0

229.6

2025年

12.9
11.2

1980年

100

21.9

2020年

14.7

300
200

21.3

(%)

16.2

500
400

19.0

20.3

20.0

Population aging rate (rate of population 65 years or older)
高齢化率（65歳以上人口割合）

Estimatedfigures

Actual figures

25.0

女性
Female

486.5

243.3

23.4

16.3
501.4

260.8

(%)
26
24
22
20
18
16
14
12
10
8
6
4
2
0

2035年

Changes and ratio of elderly population living alone
Population(10 thousand)
800

2020年

2015年

2010年

2005年

0-14
0～14歳
years old

15-64
15～64歳
years old

2030年

65-74
65～74歳
years old

2000年

1995年

1990年

1985年

1980年

1975年

1970年

1965年

1960年

1955年

1950年

75 years
75歳以上
or older

40.0
35.0

1,012

7,084 6,773
17.4
6,343 5,7875,353 5,001 4,706 4,418
7,708 7,341
14.6
7,883 8,251
8,409 8,103
7,581
8,622
10.3 12.1
4,000
6,047 6,744 7,212
9.1
5,517
8,716
5,017
7.1 7.9
6.3
8,590
1,479 1,407 1,495 1,645 1,600 1,383 1,225 1,128
4.9 5.3 5.7
1,517 1,752 1,733
2,000
1,407
1,109 1,301
2,179 2,278 2,245 2,223 2,257 2,385 2,401 2,336
338 376 434 516 602 699 776 892
309
1,160 1,407 1,641 1,879
0 107 139 164 189 224 284 366 471 597 717 900
6,000

45.0

(Source) Cabinet Office “White Paper on Aging Society 2016”

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

29Market Size by Segment( as of June 2016)
Market size of fee-based home for the elderly requiring nursing care is large, therefore there is much room for NHI to expand
Market size by price (Fee-based homes for the elderly requiring
nursing care/who are independent)

Market size by facility typeGroup Homes
Net Sales
791.5 bil. yen
No. of facilities
13,080（199,817 rooms）

Fee-based for the elderly (forthose requiring nursing care)High

Net Sales 1,483.8 bil. yen
No. of facilities
12,074（396,961 rooms）

Total
2,862.8billion yen

51.8％

15.6％
5.0％

Elderly housing with supportive
services
Net Sales
445.6 bil. yen
No. of facilities
5,751（184,151 rooms）

Zone of
Owned properties

Fee-based homes for theelderly (for those who are
independent)
Net Sales
141.9 bil. yen
No. of facilities
466（35,391 rooms）

14.5 billion yen（1,236 rooms）

500 thousand
yen/month

Price (assumed monthly fees)

27.6％

85.1 billion yen（9,589 rooms）

Low

600 thousand
yen/month31.1 billion yen（5,584 rooms）

130.8 billion yen（21,252 rooms）
350 thousand
yen/month

400 thousand
yen/month337.2 billion yen（73,528 rooms）
200 thousand
yen/month84.1 billion yen（22,354 rooms）
200 thousand
yen/month

930.6 billion yen（292,592 rooms）

Requiring nursing care
Source：KPMG Healthcare Japan Co., Ltd

12.2 billion yen（6,217 rooms）

Independent

Residents’ physical condition

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

30

History of Revisions to Nursing Care Fees
Time of revision

Main points of revision

FY 2003 revision

・・

FY 2005 revision(Enforced in
October 2005)

FY 2006 revision

FY 2009 revisionEnhancement of appropriateness of facility services, etc.
 Improvement in service quality and appropriateness
Adjusting service fees by taking into account the difference in income and expenditure of facilities Assessment of at-home services for encouraging self-support
Enhancing livelihood support of home-visit nursing care, additional payment for rehabilitation
implemented individually, etc.

 Improvement in working conditions of care providers
 Securement of care providers / improvement of working conditions of care providers
・Additional payment in accordance with care providers’ expertise, career, etc.

FY 2012 revision[Facility：-4.0%]-0.5%【-2.4%】[At-home：-0.1%]【-1.0%】[Facility：±0.0%] 【-4.0%】【】: Rate of revision including
revision in FY2005+3.0%[At-home：＋1.7%][Facility：＋1.3%]+1.2%

Response to increased burden due to the consumption tax hike

+ 0.63%



FY 2015 revision

 Initiatives for building a “community comprehensive care system”
 Further reinforcement of care for those requiring medium- to high- levels of nursing care and thosewith dementia
 Promotion of securing care staff
 Enhancement of appropriateness of service assessment and establishment of efficient system forproviding services

FY 2017 revision[At-home：＋0.1%]

Securement of improved working conditions for care staff and promotion of community
comprehensive care
 Foundation of additional payment for improving working conditions
 Establishment of new services such as around-the-clock periodical door-to-door service

FY 2014 revision



-2.3%

Securement of fairness between at-home care and facility services, etc.
 Review of nursing care fees related to living costs and meal costs

 Promotion of encouraging self-support and at-home nursing care
 Promotion of nursing care prevention and rehabilitation
・ Changing prevention benefits provision from piecework payment to comprehension
payment by monthReinforcement of support for those requiring medium- to high- levels of nursing care・ Additional payment for home-visit long-term care and home-visit nursing care provided tothose requiring high level of cares, etc.

Rate of revision

Improvement in working conditions of care providers
 Established a new system to raise salary in accordance with care provider experience or
qualifications and raised monthly salary by 10,000 yen-worth on average.

[At-home：＋1.0%][Facility：＋0.2%]-2.27%[At-home：-1.42%][Facility：-0.85%]＋1.14％[At-home：＋0.72％][Facility：＋0.42％]

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

31

Appendix

Portfolio Map (as of October 31, 2017)
Owned properties are diversified over 13 prefectures
RegionDefinition

The greater Tokyo area: Tokyo, Kanagawa, Chiba
Three Major and Saitama prefectures
Metropolitan The Chukyo area: Aichi, Mie and Gifu prefecturesAreas
The Kinki area: Osaka, Kyoto, Hyogo, Nara andShiga prefectures

Targetincorporation
ratio

Incorporation
ratio (*)

50% or more

61.1%

Core City
Areas

Cities outside the Three Major Metropolitan Areas
with populations of 200,000 or more

50% or less

38.9%

Other

Cities outside the Three Major Metropolitan Areasand the Core City Areas with populations under
200,000

10% or less

0.0%(*) Incorporation ratio is based on the acquisition price.

(Note) Red numbers refer to Three major metropolitan areas and blue numbers to Core City Areas.
Facility names with orange background are fee-based homes for the elderly with nursing care, those with blue background areresidential-type fee-based homes for the elderly, and those with yellow-green are elderly housing with supportive services.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

33

Introduction of Operators (1)Company name

Nichii Gakkan Company

Company name

Sawayaka Club Co., Ltd.

Head office

2-9 Kanda-Surugadai, Chiyoda-ku, Tokyo

Head office

2-10-10 Kumamoto, Kokura-kita-ku, Kitakyushu-shi, Fukuoka

Representative director Representative director, Fumiharu Uchiyama

Representative director Chairman, President and CEO, Nobusuke Mori
Established

August 2, 1973

Capital11,933 million yen

Attributes(listed market)

Listed company(First Section of the Tokyo Stock Exchange, Securities code: 9792)

Principal businesses

Medical Support Business, Nursing Care and Health Care Business, Education
Business and Child-care Business

Established

December 1, 2004

Capital

200 million yen

Attributes(listed market)

Consolidated subsidiary of Uchiyama Holdings Co., Ltd.
(First Section of the Tokyo Stock Exchange, Securities code: 6059)

Principal businesses

Operation of fee-based homes for the elderly, elderly housing with supportive
services, group homes, short-stay facilities, helper stations, care plan centers,
nursing care day service centers and multifunctional nursing care in a small
group home setting

Parent company

Uchiyama Holdings Co., Ltd.

Nichii Care Center Fukushima Omori
Sawayaka Hinodekan
Company name

Sompo Care Next Inc.

Head office

4-12-8 Higashi Shinagawa, Shinagawa-ku, Tokyo

Established

November 11, 1992

Capital

5,095 million yen

Attributes(listed market)

Consolidated subsidiary of Sompo Holdings, Inc. (First Section of the Tokyo
Stock Exchange, Securities code: 8630)

Principal businesses

Fee-based nursing homes for the elderly, fee-based assisted-living homes forthe elderly, outpatient day long-term care (day service) business, home-visit
long-term care (home help service) business, home-visit nursing business, inhome long-term care support business

Parent company

Sompo Holdings, Inc.

Sompo Care LAVIERE
Hiroshima Hikarigaoka

Sawayaka Kaikyokan

シダー

Representative director Representative director, Ken Endo

Sompo Care LAVIERE
Kinugasayama Koen

Sawayaka Obatake Sanbankan Sawayaka Meisuikan

Company name

Cedar Co., Ltd.

Head office

1-7-19 Obatake, Kokura-kita-ku, Kitakyushu-shi, Fukuoka

Representative director Representative director, Takayasu Zakoda
Established

April 25, 1981

Capital

432 million yen

Attributes(listed market)

Listed company(JASDAQ of the Tokyo Stock Exchange, Securities code: 2435)
Operation of fee-based homes for the elderly, elderly housing with supportive
services, group homes, short-stay facilities, helper stations, care plan centers,
nursing care day service centers and multifunctional nursing care in a small
group home setting

Principal businesses

Sompo Care LAVIERE
Sagamihara Chuo

La’nassica Arakogawa

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

34

Introduction of Operators (2)Company nameCharm Care Corporation

Company nameNihon Kaigo Iryo Center Co., Ltd.

Head office

3-6-32 Nakanoshima, Kita-ku, Osaka-shi, Osaka

Head office2-4-1 Hannancho, Abeno-ku, Osaka-shi, Osaka

Representative director Representative director, Takahiko Shimomura
Established

August 22, 1984

Capital

192 million yen

Attributes(listed market)

Listed company(JASDAQ of the Tokyo Stock Exchange, Securities code: 6062)
Operation of fee-based nursing homes for the elderly with care and fee-based
assisted-living homes for the elderly

Principal businesses

Representative director Representative director, Yusuke Taniguchi
Established

October 7, 1997

Capital50 million yen

Attributes(listed market)

Unlisted company

Principal businesses

In-home nursing care support business, home-visit nursing care business,
operation of rental housing for the elderly, selling and rental of equipment
covered by public aid, care worker training business, real estate business

Charm Sweet Ryokuchi Koen

Verger Hirakata

Company nameSuper Court Co., Ltd.

Head office

1-7-7 Nishihonmachi, Nishi-ku, Osaka-shi, Osaka

Representative director Representative director, Akiyoshi Yamamoto

Company name

Wisnet Co., Ltd.

EstablishedMay 19, 1995

Head office2-795 Mihashi, Omiya-ku, Saitama-shi, Saitama

Capital50 million yen

Attributes(listed market)

Unlisted company

Representative director Representative director, Yuuichi Miyazawa
Established

January 1998

Capital390 million yen

Principal businesses

Operation/management of fee-based homes for the elderly and housing for theelderly, operation/management of buildings and condominiums,
planning/design/construction of rental apartments, a nursing care worker
nurturing and training business, etc.

Attributes(listed market)

Consolidated subsidiary of Sohgo Security Service CO,. LTD., (First Section of
the Tokyo Stock Exchange, Securities code: 2331)

Parent company

Super Holdings Co., Ltd.

Principal business

Operation and management of group home for dementia, fee-based homes forthe elderly with nursing care, elderly housing with supportive services, helper
station, day service center, small scale multi-function home care, home care
support office, visiting nursing staion

Super Court JR Nara-Ekimae

Minna-no-ie Omiya Yoshinocho

Minna-no-ie Chuo-ku En’namiThis document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

35

Introduction of Operators (3)Company nameHead office

Silver Heights Sapporo Co., Ltd.

Company name

Sompo Care Message Inc.

3-41, Fukuzumisanjou, Toyohira-ku, Sapporo-shi, Hokkaido

Head office522-1, Nishiichi, Minami-ku, Okayama-shi, Okayama

Representative director Representative director, Hirofumi Kaneko

Representative director Representative director, Tetsuya Kikui

Established

December 1961

EstablishedMay 1997

Capital50 million yen

Capital3,925 million yen

Attributes(listed market)

Unlisted company

Attributes(listed market)

Consolidated subsidiary of Sompo Holdings, Inc. (First Section of the Tokyo Stock
Exchange, Securities code: 8630)

Principal businesses

Principal businesses

Operation of fee-based homes for the elderly, homecare service specified in theLong-Term Care Insurance Act, homecare support specified in the Long-Term Care
Insurance Act, purchase/sales, arrangement, lease and management of real estate,etc.

Operation of fee-based homes for the elderly, elderly housing with supportive
services and group homes; Home-visit care (home assistance) service business

Parent company

Sompo Holdings Inc.

Silver Heights Hitsujigaoka No.3
Sompo no ie
NishitanabeekimaeCompany nameAnabuki Medical Care Inc.

Head office2-8, Togiyamachi, Takamatsu, Kagawa

Representative director Representative director, Yoshihisa Otani
Established

June 2009

Capital

80 million yen

Attributes(listed market)

Consolidated subsidiary of Anabuki Kosan Inc.
(First Section of the Tokyo Stock Exchange, Securities code: 8928)
Nursing care-related business (nursing care business, operation of fee-based
homes for the elderly, etc.), real estate management, advertising, etc.

Principal businesses

Alpha Living Okayama
Nishigawa
Ryokudokoen

Alpha Living Okayama Korakuen

Alpha Living Takamatsu
EkimaeAlpha Living
Takamatsu
Hyakkenmachi

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

36

Ranking of Operators Based on the Number of Rooms
RankingCompany name(Note 1)
1 Sompo Holdings Inc. (Note 3)

Fee-based homes for the elderly withnursing care
Number of
Number of rooms
facilities
291
18,110Residential-type fee-based homes
for the elderly
Number of
Number of rooms
facilities
3
91

Other housing for the elderly
Number of
facilities
133

Total (Note 2)

Number of
rooms
7,744

Number of
facilities
448

Number ofrooms
26,4212 Company A

251

13,338

55

3,224

3

159

311

16,7393 Nichiigakkan Co., Ltd.

139

8,473

2

100

6

238

425

13,7934 Company B

125

7,912

43

2,705

-

-

168

10,6175 Company C

68

5,568

32

2,940

-

-

101

8,520

6 Company D

17

1147

9

174

15

321

165

7,739

7 Company E

39

2283

60

3821

1

81

105

6,239

8 Company F

9

630

1

26

8

150

272

5,692

9 Company G

73

4,651

5

386

4

191

92

5,457

10 Company H

8

228

8

197

90

4911

109

5,381

11 Company I

18

1,691

14

1097

2

163

51

4,929

12 UCHIYAMA HOLDINGS Co.,Ltd. (Note 4)

43

3,146

15

921

-

-

80

4,823

13 Company J

34

1,697

3

106

92

3011

129

4,814

14 Company K

50

3,525

8

467

5

273

68

4,373

15 Company L

13

3,533

43

824

-

-

56

4,357

16 ALSOK Group (Note 5)

46

2,165

4

148

6

215

139

4,192

17 Company M

38

1,759

7

165

8

293

158

4,156

18 Company N

27

2127

-

-

14

1,073

73

3,794

19 Company O

3

290

-

-

1

20

21

3,510

20 Company P

-

-

-

-

108

3,357

108

3,357

21 Super Court Co., Ltd.

16

1,037

27

1,958

1

59

44

3,054

22 Charm Care Corporation

36

2511

3

280

-

-

39

2,791

23 Company Q

3

111

4

102

5

192

59

2,732

24 Company R

26

1,457

-

-

-

-

92

2,663

25 Company S

21

2052

-

-

6

494

28

2,573

26 Company T

5

379

23

2016

2

166

30

2,561

27 Company U

7

290

8

182

6

175

63

2,456

28 Company V

20

1596

9

479

5

296

39

2,443

29 Cedar Co., Ltd.

41

2,370

-

-

-

-

44

2,415

30 Company W

7

2,183

-

-

-

-

7

2,183

(Note 1) The companies are ranked in descending order according to the number of rooms in the
total column.
(Note 2) The total figures include group homes for the elderly with dementia and other facilities forthe elderly operated by related companies.
(Source) Shukan Koreisha Jutaku Shimbun (Weekly elderly housing newspaper)(Note 3) The figures are sum of Sompo Care Message and Sompo Care Next’s.
(Note 4) UCHIYAMA HOLDINGS is a parent company of Sawayaka Club.
(Note 5) The figures are those of Wisnet.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

37

Management Back-up Agreement

Hokkaido Area
No. of Operators: 5
Asset
Management

NHI
Ownership

Healthcare
facility

Healthcare
facility

Healthcare
facility

A

B

C

Operator

Operator

Operator

A

B

C

Management Back-up Contractors

Asset Management
Company
Each Operator has
concluded amanagement
back-upagreement with
NHI.

Chubu Area
No. of Operators: 5
Chugoku Area
No. of Operators: 5
Tohoku Area
No. of Operators: 4

Discuss handoverof operation toother operators incase ofcontingency

Kanto Area
No. of Operators: 7

Kinki Area
No. of Operators: 9
Shikoku Area
No. of Operators: 5
Kyushu Area
No. of Operators: 5

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

38

Appraisal Value at End of Fiscal Period (as of October 31, 2017)
End of 6th FP

End of 7th FP
Overview of appraisal report
Property nameAppraiser

Appraisalvalue

Direct capitalization method
Price(million yen) (million yen)

DCF method

Cap rate

Price

Discount rate Terminal cap(%)(million yen)rate (%)(%)

Appraisal
NOI(million yen)Appraisal
value

Difference(End of 7th
FP - End of
6th FP)(million yen) (million yen)

Nichii Care Center Fukushima Omori

Japan Real Estate Institute

353

356

5.7

349

5.5

5.9

22

353

-

Sompo Care LAVIERE Hiroshima Hikarigaoka

Japan Real Estate Institute

1,230

1,240

5.2

1,210

5.0

5.4

69

1,230

-

Sompo Care LAVIERE Sagamihara Chuo

Daiw a Real Estate Appraisal

1,750

1,770

4.9

1,740

4.7

5.1

88

1,750

-

Charm Sw eet Ryokuchi Koen

Daiw a Real Estate Appraisal

3,060

3,100

4.6

3,040

4.4

4.8

144

3,060

-

Saw ayaka Kaikyokan

Japan Real Estate Institute

899

907

5.3

890

5.1

5.5

50

899

-

Saw ayaka Meisuikan

Japan Real Estate Institute

813

819

5.3

807

5.1

5.5

47

813

-

Saw ayaka Heart Life Nishikyogoku

Daiw a Real Estate Appraisal

1,190

1,200

5.0

1,180

4.8

5.2

60

1,210

-20

Verger Hirakata

Daiw a Real Estate Appraisal

1,600

1,610

5.2

1,590

5.0

5.4

85

1,590

10

Sompo Care LAVIERE Kinugasayama Koen

The Tanizaw a Sōgō Appraisal

2,060

2,080

4.8

2,050

4.9

5.0

100

2,060

-

La'nassica Arakogaw a

The Tanizaw a Sōgō Appraisal

1,430

1,440

5.1

1,430

5.2

5.3

74

1,430

-

Saw ayaka Hinodekan

Daiw a Real Estate Appraisal

921

933

5.0

916

4.8

5.2

47

939

-18

Saw ayaka Riverside Kurinoki

Daiw a Real Estate Appraisal

324

330

5.0

322

4.8

5.2

17

324

-

Saw ayaka Obatake Sanbankan

Daiw a Real Estate Appraisal

355

360

5.1

353

4.9

5.3

18

355

-

Super Court JR Nara-Ekimae

The Tanizaw a Sōgō Appraisal

1,750

1,770

5.0

1,740

5.1

5.2

91

1,750

-

Minna-no-ie Omiya Yoshinocho

The Tanizaw a Sōgō Appraisal

779

787

4.9

776

5.0

5.1

39

799

-20

Minna-no-ie Chuo-ku En’nami

Japan Real Estate Institute

859

869

4.9

848

4.7

5.1

44

903

-44

Silver Heights Hitsujigaoka No.3

Daiw a Real Estate Appraisal

1,340

1,350

4.9

1,330

4.7

5.1

70

1,330

10

Alpha Living Okayama Nishigawa Ryokudokoen

Daiw a Real Estate Appraisal

789

803

4.5

783

4.3

4.7

37

789

-

Alpha Living Okayama Korakuen

Daiw a Real Estate Appraisal

672

684

4.6

667

4.4

4.8

32

672

-

Alpha Living Takamatsu Ekimae

Daiw a Real Estate Appraisal

641

653

4.6

636

4.4

4.8

30

641

-

Alpha Living Takamatsu Hyakkenmachi

Daiw a Real Estate Appraisal

628

635

4.7

625

4.5

4.9

31

627

1

Sompo no ie Nishitanabeekimae

The Tanizaw a Sōgō Appraisal

741

749

4.7

738

4.8

4.9

36

741

-

24,18424,445-24,020

-

-

1,243

24,265-81

Total

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

39

Portfolio List (1)Property nameLocation(residential address)

AccessNichii Care Center
Fukushima Omori

Sompo Care LAVIERE
Hiroshima Hikarigaoka

Sompo Care LAVIERE
Sagamihara Chuo

21-3 Omori Ojibouchi,
Fukushima-shi, Fukushima

2-40 Hikarigaoka,
Higashi-ku, Hiroshima-shi,
Hiroshima

Approximately 2.2km from
Fukushima Station on the
JR Tohoku Main Line

Approximately 1.1km fromApproximately 1.2km from
Hiroshima Station on the JR Sagamihara Station on the
Sanyo Main Line
JR Yokohama Line

Charm Sweet
Ryokuchi Koen

Sawayaka Kaikyokan

3-6-3 Chuo, Chuo-ku,
3-2-21 Nishiizumigaoka,
Sagamihara-shi, Kanagawa Toyonaka-shi, Osaka

1-11-13 Hama-machi,
Wakamatsu-ku,
Kitakyushu-shi, Fukuoka

Approximately 1.4km from
Ryokuchi-koen Station on
the Kita-Osaka Kyuko
Railway Namboku Line

Approximately 1.1km from
Wakamatsu Station on the
JR Chikuhō Main Line

Acquisition price(million yen)

265

960

1,170

1,950

630

Real estateappraisal value(million yen) (Note 1)

353

1,230

1,750

3,060

899

NOI yield (%) (Note 2)

8.5

7.2

7.6

7.4

8.0

Depreciation(million yen) (Note 3)

5

10

10

15

7

Structure / floors (Note 4)

S/3F

RC/7F

RC/5F

RC/6F

RC/B1・5F

Leasable area (m2)

1,964.68

4,133.82

3,732.95

5,329.73

2,694.42

Total leased area (m2)

1,964.68

4,133.82

3,732.95

5,329.73

2,694.42

Number of rooms (rooms)

52

80

80

128

65

Occupancy rate (%) (Note 5)

100.0

80.0

67.5

98.4

93.8

Charm Care Corporation

Sawayaka Club Co., Ltd.

20.8

16.4

Operator
Remaining lease contract
period (year) (Note 6)(Note 1)
(Note 2)
(Note 3)(Note 4)

Nichii Gakkan Company
16.4

Sompo Care Next Inc.
16.4

Appraisal values are as of October 31, 2017.
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
Figures for depreciation are actual figures of the 7th FP ended in October 31, 2017.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

Sompo Care Next Inc.
16.4

(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written
explanation of important matter by the number of rooms, rounded to one decimal place.
(Note 6) Remaining lease contract periods are as of October 31, 2017.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

40

Portfolio List (2)Sawayaka Meisuikan

Sawayaka Heart Life
Nishikyogoku

Location(residential address)

5-7-6 Higashinarumizu,
Yahatanishi-ku,
Kitakyushu-shi, Fukuoka

8 Tsutsumishita-cho,Nishikyogoku, Ukyo-ku,
Kyoto-shi, Kyoto

AccessApproximately 2km from
Kurosaki Station on the JR
Kagoshima Main Line

Approximately 1.2km fromApproximately 3.5km from
Nishikyogoku Station on the Kuzuha Station on the
Hankyu Kyoto Line
Keihan Main Line

Property name

Sompo Care LAVIERE
Kinugasayama Koen

Verger Hirakata

2-20-4 Koyamichi,
Hirakata-shi, Osaka

La’nassica Arakogawa

4-8-15 Koyabe,
Yokosuka-shi, Kanagawa

4-34-1 Takagi-cho,Minato-ku, Nagoya-shi, Aichi

Approximately 1.2km from
Kinugasa Station on the JR
Yokosuka Line

Approximately 1.4km from
Arakogawa-koen Station on
the Nagoya Rinkai-kosoku
Railway Aonami Line

Acquisition price(million yen)

590

750

950

1,839

1,279

Real estateappraisal value(million yen) (Note 1)

813

1,190

1,600

2,060

1,430

NOI yield (%) (Note 2)

8.1

8.1

9.0

5.5

5.8

Depreciation(million yen) (Note 3)

7

6

10

16

17

Structure / floors (Note 4)

RC/6F

RC/B1・6F

RC/5F

S/4F

RC/B1・5F

Leasable area (m2)

4,553.67

2,459.19

2,925.25

4,265.88

3,590.40

Total leased area (m2)

4,553.67

2,459.19

2,925.25

4,265.88

3,590.40

Number of rooms (rooms)

87

84

104

104

100

Occupancy rate (%) (Note 5)

100.0

100.0

68.2

86.5

99.0

Operator
Remaining lease contract
period (year) (Note 6)(Note 1)
(Note 2)
(Note 3)(Note 4)

Sawayaka Club Co., Ltd.

Sawayaka Club Co., Ltd.

16.4

16.4

Appraisal values are as of October 31, 2017.
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
Figures for depreciation are actual figures of the 7th FP ended in October 31, 2017.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

Nihon Kaigo
Iryo Center Co., Ltd.
16.4

Sompo Care Next Inc.

Cedar Co., Ltd.

16.9

10.4

(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written
explanation of important matter by the number of rooms, rounded to one decimal place.
(Note 6) Remaining lease contract periods are as of October 31, 2017.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

41

Portfolio List (3)Sawayaka Riverside
Kurinoki

Sawayaka Obatake
Sanbankan

2-2-33 Hinode,Chuo-ku,
Niigata-shi, Niigata

2-2-43 Hinode,Chuo-ku,
Niigata-shi, Niigata

1-6-37 Obatake,
Kokurakita-ku,
Kitakyushu-shi,
Fukuoka

1-5-35 Omiyacho,
Nara-shi, Nara

2-214-3 Yoshinocho,
Kita-ku, Saitama-shi,
Saitama

5-5-17 En'nami,
Chuo-ku, Saitama-shi,
Saitama

Approximately 1.7km
from Niigata Station on
the JR Joetsu
Shinkansen andShinetsu Main Line

Approximately 1.65km
from Niigata Station on
the JR Joetsu
Shinkansen andShinetsu Main Line

Approximately 2.5km
from Kokura Station on
the JR Kagoshima MainLine

Approximately 280m
from Nara Station on
the JR Kansai MainLine

Approximately 2.5km
from Miyahara Stationon the JR Takasaki
Line

Approximately 2.4km
from Kitayono Stationon the JR Saikyo Line

Acquisition price(million yen)

773

266

289

1,569

740

838

Real estateappraisal value(million yen) (Note 1)

921

324

355

1,750

779

859

NOI yield (%) (Note 2)

6.2

6.4

6.5

5.8

5.3

5.3

Depreciation(million yen) (Note 3)

8

3

4

17

7

8

Property nameLocation(residential address)

Access

Structure / floors (Note 4)

Sawayaka
Hinodekan

S/3F

S/4F

S/3F

Super Court JR
Nara-Ekimae

RC/7F

Minna-no-ie
Omiya Yoshinocho

RC/4F

Minna-no-ie
Chuo-ku En’nami

RC/3F

Leasable area (m2)

2,674.37

1,349.39

1,411.78

5,057.07

1,800.03

1,963.03

Total leased area (m2)

2,674.37

1,349.39

1,411.78

5,057.07

1,800.03

1,963.03

Number of rooms (rooms)

50

33

50

155

33

51

Occupancy rate (%) (Note 5)

100.0

92.3

92.0

86.4

78.7

58.8

Sawayaka Club Co.,Ltd.

Sawayaka Club Co.,Ltd.

Sawayaka Club Co.,
Ltd.

Super Court Co., Ltd.

17.1

17.1

17.1

21.7

Operator
Remaining lease contract
period (year) (Note 6)

Wisnet Co., Ltd.
19.3

Wisnet Co., Ltd.
26.4

(Note 1)
(Note 2)
(Note 3)(Note 4)

Appraisal values are as of October 31, 2017.
(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
explanation of important matter by the number of rooms, rounded to one decimal place.
Figures for depreciation are actual figures of the 7th FP ended in October 31, 2017.
(Note 6) Remaining lease contract periods are as of October 31, 2017.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

42

Portfolio List (4)Property nameLocation(residential address)

Alpha Living
Okayama Nishigawa
Ryokudokoen

Silver Heights
Hitsujigaoka No.3

15-4-38, Tsukisamu
6-2 Chuo-cho, Kita-ku,
Higashi Shijo, Toyohira- Okayama-shi,ku, Sapporo-shi,
Okayama
Hokkaido

Alpha Living
Okayama Korakuen

Alpha Living Takamatsu
Ekimae1-11-4, Hama, Naka-ku, 1-6, Nishiuchi-machi,
Takamatsu-shi,
Okayama-shi,
KagawaOkayamaAlpha Living
Takamatsu
Hyakkenmachi

Sompo no ie
Nishitanabeekimae

8-11, Hyakken-machi,
Takamatsu-shi,
Kagawa1-1-21 Nishitanabe-cho,
Abeno-ku, Osaka-shi,
Osaka

Approximately 1.2km
from Nango
Juhatchome Station on
the Tozai Line of the
Sapporo Municipal
SubwayApproximately 1.5km
from Okayama Stationon the JR Sanyo MainLine

Approximately 1.9km
from Okayama Stationon the JR Sanyo MainLine

Approximately a fiveminute walk from
Takamatsu Station on
the JR Yosan Line

Acquisition price(million yen)

1,200

730

610

605

605

710

Real estateappraisal value(million yen) (Note 1)

1,340

789

672

641

628

741

NOI yield (%) (Note 2)

5.9

5.1

5.3

5.1

5.2

5.1

Depreciation(million yen) (Note 3)

8

7

4

6

6

5

Access

Structure / floors (Note 4)

RC/3F

RC/7F

RC/4F

RC/6F

Approximately a twoApproximately 1.1km
from Takamatsu Station minute walk from
Nishitanabe Station on
on the JR Yosan Linethe Osaka Municipal
Subway Midosuji Line.

RC/10F

RC/9F

Leasable area (m2)

7,267.56

2,124.16

2,128.44

1,848.06

1,929.16

2,095.79

Total leased area (m2)

7,267.56

2,124.16

2,128.44

1,848.06

1,929.16

2,095.79

Number of rooms (rooms)

109

53

45

43

50

42

Occupancy rate (%) (Note 5)

90.0

81.8

95.8

88.6

88.8

97.6

Silver Heights SapporoCo., Ltd.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Sompo Care Message
Inc.

18.1

17.7

17.7

17.7

17.7

9.4

Operator
Remaining lease contract
period (year) (Note 6)(Note 1)
(Note 2)
(Note 3)(Note 4)

Appraisal values are as of October 31, 2017.
(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
explanation of important matter by the number of rooms, rounded to one decimal place.
Figures for depreciation are actual figures of the 7th FP ended in October 31, 2017.
(Note 6) Remaining lease contract periods are as of October 31, 2017.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

43

Status of Income (Loss) of Investment Real Estate Properties(as of October 31, 2017)(Unit: thousand yen)
7th Fiscal Period (from May 1, 2017 to October 31, 2017)
Property name

Property-related
operating revenue(Note 1)

Property-related operating expenses
Consignment
expensesUtilityexpenses

Taxes anddues

Non-life
insurance
expenses

Repairexpenses

Depreciation

NOI(Note 2)

Other

Nichii Care Center Fukushima Omori

7,807

147

-

852

38

386

5,183

1,200

11,775

Sompo Care LAVIERE Hiroshima Hikarigaoka

15,808

575

-

2,873

84

1,902

10,372-

34,769Sompo Care LAVIERE Sagamihara Chuo

16,378

737

-

2,306

84

3,016

10,234-42,275Charm Suite Ryokuchi Koen

21,362

1,238

-

4,515

115

-

15,493-72,881

Sawayaka Kaikyokan

9,756

608

-

1,824

81

-

7,241

-

25,930

Sawayaka Meisuikan

11,661

571

-

2,810

120

185

7,974

-

24,814

Sawayaka Heart Life Nishikyogoku

9,477

846

-

1,731

55

150

6,694

-

30,481Verger Hirakata

24,516

601

-

1,871

62

11,765

10,215-31,298

Sompo Care LAVIERE Kinugasayama Koen

21,402

921

-

3,972

102

-

16,406-50,631

La’nassica Arakogawa

20,126

645

-

2,283

82

-

17,116-37,78926,702

389

-

1,888

55

16,000

8,368

-

8,216

4,668

133

-

948

28

-

3,557

-

8,807

Sawayaka Obatake Sanbankan

5,326

151

-

834

28

-

4,311

-

9,665

Super Court JR Nara-Ekimae

22,203

1,373

-

3,004

108

-

17,718-46,305Minna-no-ie Omiya Yoshinocho

9,409

539

-

1,808

44

-

7,016

-

20,250Minna-no-ie Chuo-ku En’nami

13,216

588

378

2,195

47

1,217

8,788

-

20,963

Silver Heights Hitsujigaoka No.3

15,703

600

-

6,177

145

-

8,781

-

35,317

Alpha Living Okayama Nishigawa Ryokudokoen

9,872

375

-

1,823

46

-

7,626

-

18,635Alpha Living Okayama Korakuen

6,288

322

-

1,618

46

-

4,301

-

16,525Alpha Living Takamatsu Ekimae

8,153

366

-

1,295

43

-

6,448

-

15,558Alpha Living Takamatsu Hyakkenmachi

9,020

355

-

1,672

44

-

6,947

-

15,928

Sompo no ie Nishitanabeekimae

8,196

354

-

1,700

51

1,040

5,049

-

17,517

297,062

12,445378

50,0081,519

35,662

195,847

1,200

596,338

Sawayaka Hinodekan
Sawayaka Riverside Kurinoki

Total

Not disclosed

697,552(Note 1) “Property-related operating revenue” is not disclosed property by property because consent for disclosure has not been obtained from tenants.
(Note 2) NOI = Property-related operating revenue − Property-related operating expenses + Depreciation
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

44

Balance Sheets for 7th Fiscal Period Ended October 2017

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

45

Status of Unitholders as of the end of October 2017
Major unitholders (top 10)

Ownership ratio of investment units by category
Category of unitholders

Number ofunits atthe end of
7th FP

Number ofunits atthe end of
6th FP

Increase/decr
ease from theprevious FP

Ratio at theend of 7th
FP*

No.

Name

Number of
Number of
Increase/decr
units held atunits held atease from thethe end of 6th
the end of 7th
previous FP
FP
FP

Ratio at theend of 7thFP*

Individual/others

36,04838,6492,601

51.79%

1

Daiwa Securities Group Inc.

7,600

0

7,600

10.18%

Financial institutions

22,47019,266-3,20425.81%

2

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

5,336

1,110

6,446

8.64%

Major city banks

0

0

0

0.00%

3

Japan Trustee Services Bank Ltd.
(Trust Investment Trust Account)

5,472-1,014

4,458

5.97%

Regional banks

1,518

1,160

-358

1.55%

4

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

1,701

217

1,918

2.57%

Trust banks

17,261

14,737-2,52419.75%

5

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

4,035-2,577

1,458

1.95%

Life insurancecompanies

286

286

0

0.38%

6

Fukui Medical Credit Association

745

400

1,145

1.53%

Non-life insurancecompanies

0

0

0

0.00%

7

Daiwa Real Estate AssetManagement Co. Ltd.

1,000

0

1,000

1.34%

Other financial
institutions

3,405

3,083

-322

4.13%

8

Osaka Shinkin Bank

887

0

887

1.19%

Other domestic companies

12,404

12,280-124

16.45%

9

THE BANK OF NEW YORKMELLON 140044

850

0

850

1.14%

Foreigners

2,624

2,978

354

3.99%

10

UENOYA BUILDING Co. Ltd.

654

39

693

0.93%

Securities companies

1,086

1,459

373

1.95%

28,280-1,82526,45535.45%

Total

74,632

74,6320

100.00%

Total*Rounded to two decimal places.

*Rounded to two decimal places.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

46

IR Activities / Indices that include NHI
Held IR in regions of the country
Month / Year

Name of IR Event

Location

November 2016

J-REIT Fair for individual investors 2016 (cosponsored by ARES and TSE)Tokyo

December 2016

Special seminar for healthcare facility operators

Osaka

December 2016

Financial results briefing for institutional investors (5th FP)

Tokyo

January 2017

Briefing session on asset management for individual investors (5th FP)

Tokyo

February 2017

TSE IR Festa 2017

Tokyo

June 2017

Special seminar for healthcare facility operators

Fukuoka

June 2017

Financial results briefing for institutional investors (6th FP)

Tokyo

July 2017

Briefing session on asset management for individual investors (6th FP)Tokyo

J-REIT Fair for individual investors 2017 (cosponsored by ARES and TSE)

Tokyo

October 2017

Special seminar for healthcare facility operators (Fukuoka)

J-REIT Fair for individual investors 2017 (cosponsored by ARES and TSE)

Indices that include NHIMonth / Year
September 2015

Name of index
Thomson Reuters GPR / APREA Composite Index

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

47

IR Schedule

IR schedule

・Fiscal period ends: April and October

Nov.
Announcement offinancial results

Dec.

●

Jan.

・Securities code: 3308

Feb.

Mar.

Announcement of financial results
for fiscal period ended October

Payout of
distributions●

Commencement of payout of distributions
for fiscal period ended OctoberAsset management
report●Sending of asset management reportfor fiscal period ended OctoberMay
Announcement offinancial results

June

●

Apr.

July

Aug.

Sept.

End offiscal period

Oct.

Announcement of financial results
for fiscal period ended April

Payout of
distributions●

Commencement of payout of distributions
for fiscal period ended April

Asset management
report●Sending of asset management reportfor fiscal period ended April

End offiscal period

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

48

Guide to Website (http://www.nippon-healthcare.co.jp/en/)
Provides details on real estate under management, IR mail delivery service, etc.
Securities code

3308

・What are healthcare facilities?
・What are healthcare REITs?
・Guide to portfolio
・Unitholder benefits
・Introduction of operators

 IR mail delivery service

registration form
Service delivering the latest news releases,
occupancy rates, etc.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

49

Framework of stable cash flow

Operator’s Income

REIT’sIncomeDistribution
to Investors

Fixed rent

Dividends

Advance fees
Residents
Monthly charges,etc.

Municipalities, etc.

Nursing care service
operators

Long-term leaseagreements

Nippon Healthcare
Investment
Corporation

Investors
投資主
Investment

Nursing care fees

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

50Support and Independence<Same boat investment in NHI by the Daiwa
Securities Group Inc.>
Holding 10.2% of NHI’s investment units issued

Operator

Investment Corporation<Conclusion of sponsor support agreement>Sawayaka Club Co., Ltd.
Super Court Co., Ltd.
Nichiigakkan Company
Sompo Care Next Inc.
Cedar Co., Ltd.
Charm Care Corporation
Nihon Kaigo Iryo Center Co., Ltd.
Wisnet Co., Ltd.
Silver Heights Sapporo Co., Ltd.
Anabuki Medical Care Inc.
Sompo Care Message Inc.

Asset
Management

Cooperation in securement of personnel
Provision of information on properties, etc.

Asset Management Company<Conclusion of advisory agreement>
Provision of information on
management/operation of healthcare facilities
Provision of advisory work such as assisting andsupporting negotiations with operators
Provision of advice on market research/analysis
concerning assets under investment target<Invested 100% by Daiwa Securities Group Inc.>

SponsorAdvisorSupport51
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

51

Overview of Asset Management Company (1)Corporate Profile

Directors
As of December 1, 2017

Corporate nameDaiwa Real Estate Asset Management Co. Ltd.

Address

6-2-1 Ginza, Chuo-ku, Tokyo

Established

October 21, 2004

Paid-in capital

200 million yen

Representative Director

Akira Yamanouchi

Board of Directors

10
Executive directors: 5 / Executive auditors: 1
Non-executive directors: 2 / Non-executive auditors: 2

No. of Employees

63 (excluding dispatched employees)

Registered financial
instruments firm

Registration No. 355 (Financial Instruments),
Director-General, Kanto Local Finance Bureau (Kinsho)

Building lots andbuildings transaction
business license

License No. (3) 83920, Governor of Tokyo

Discretionary agent forreal estate transaction
approval

License No. 34, Minister of Land, Infrastructure,
Transportation and Tourism

Association membership

Member of The Investment Trusts Association, Japan
Member of Japan Investment Advisers Association
Member of Type II Financial Instruments Firms
Association

As of December 1, 2017
President and Representative
Director
Vice President andRepresentative Director
Vice President andRepresentative Director

Akira Yamanouchi
Yuji Shinotsuka
Yoshiki Nishigaki

Director

Toshio Fukushima

Director

Hajime Imbe

Director (non-executive)

Mikita Komatsu

Director (non-executive)

Naoya Otani

AuditorTamaki Shibayama

Auditor (non-executive)

Morimasa Matsuda

Auditor (non-executive)

Shinji Kiso

REITs which entrust the asset management to
the Asset Management Company
As of November 30, 2017
Daiwa Office Investment
Corporation

Listed REIT focusing on office buildings
Asset size: approximately 469.3 billion yen(54 properties)(*)

Daiwa Residential Private
Investment Corporation

Unlisted REIT focusing on residential properties
Asset size: approximately 100.5 billion yen(68 properties)

Nippon Healthcare Investment
Corporation

Japan’s first listed REIT focusing on healthcare
facilities
Asset size: approximately 19.3 billion yen(22 properties)（*） excluding silent partnership equity interest
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

52

Overview of Asset Management Company (2)Organization of Asset Management Company
Shareholders’ Meeting
Corporate Auditors
Board of Directors
Compliance Committee
Compliance Officer
Investment Committee (*)* Set up separately for each
investment corporation

President andRepresentative Director
Internal Control OfficeAcquisition and AssetManagement Division

Acquisition
Department

Origination
Department

Corporate Division

Private Fund Division

Asset
Management
Department

Private FundManagement
Department

Customer
Relations
Department

Finance
Department

Administration
Department

Office Investment Team

Office Management
Team

Finance Team

Residential Investment
Team

Residential
Management Team

Accounting Team

Healthcare
Investment Team

Healthcare
Management TeamManagement Team

Corporate
Planning
Department

Investment Planning
Team
Construction
Management Team

as of 1 December, 2017

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

53

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

54
54
54