As of December 22, 2016

Hopeful future
for Japan
Nippon Healthcare
Investment Corporation
Presentation Material for
The 5th Fiscal Period Ended October 2016

Contents
Disclaimer

Section 3

Characteristics of Nippon Healthcare
Investment Corporation

Portfolio Analysis
3

Section 1
Operating Results for 5th Fiscal Period
Operating Results for 5th Fiscal Period

5

Status of Portfolio: Change in Occupancy Rates

16

Status of Portfolio: Fee Systems of Facilities

17

Portfolio List (as of October 31, 2016)18

Status of Portfolio (as of October 31, 2016)19

Portfolio Resident Attributes (as of October 31, 2016)20

Forecast of Operating Results for 6th Fiscal Period6

and 7th Fiscal Period

Section 2

Section 4External Growth

Financial Conditions

Change in Asset Size

8

Property Acquired in 5th FP (ended October 2016)9

Sourcing Route10

Portfolio Map (as of October 31, 2016)
Introduction of Operators

11

Continuous Evaluation of Operators andMonitoring System

12

Report on Asset Management Department Activities

14

13

Status of Interest-Bearing Liabilities(as of October 31, 2016)・・・・・・・・・・・・・・・・・・・・

22

Policy on Distributions in Excess of
Earnings/Index including NHI

23

Overview of the Unitholder Benefits Program・・・・・・・・・・・・・ 24
・・・・・・・・・・・・・・

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

Characteristics of Nippon Healthcare Investment Corporation
1 Investment in social infrastructure to contribute to society

Nippon Healthcare Investment Corporation (NHI) will contribute to society by specializing in investment in healthcare facilities,
which are part of the social infrastructure.

2 Growth through investment in the growing senior market
Social demand for healthcare facilities is expected to grow in the medium to long term through further aging of the population.



NHI aims to expand assets under management in the medium to long term using our expertise on healthcare, extensive networkand fund raising capabilities.

3 Stable cash flowTo stabilize cash flow, NHI will sign long-term fixed-rent lease agreements with operators of healthcare facilities.

To stabilize management, NHI will consider business collaborations and mutual management backup with carefully selected
operators.

4 Unitholder return policy utilizing asset characteristics


NHI will implement unitholder returns through distributions in excess of earnings (refund of investment) utilizing the asset
characteristic of a high rate of depreciation.



NHI will consider unitholder benefits utilizing the characteristics of healthcare facilities.

5 Substantial support system and strong independence

NHI will develop the support system that brings together the comprehensive strengths of Daiwa Securities Group Inc. (sponsor),an expert finance company, and AIP Healthcare Japan GK (advisor), an expert healthcare company.



NHI’s asset management company is able to establish cooperative relations with a wide range of operators as it is very
independent with no participation of operator group.

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 5th Fiscal Period

Operating Results for 5th Fiscal Period
Actual results for the 5th Fiscal Period

No. of properties owned at the end of the fiscal period
Operating revenue
Operating expenses
Property-related expenses (excluding depreciation)
Depreciation
Operating income
Non-operating revenue
Non-operating expenses
Interest expense
Ordinary income
Net income
Number of investment units issued and outstanding at theend of the fiscal period (units)
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(Reference)
Depreciation per unit (yen)Ratio of distribution in excess of earnings to depreciation
per unit(unit: million yen)

4th FP
5th FP
ended Apr. 2016 ended Oct. 2016
(results)(results)
21
22
667
679
377
404
70
83
187
188
289
274
0
0
27
27
21
20
261
247
260
246

Increase factor

Difference
+1
+12
+27
+12
+1
-14
-0
-0
-0
-14
-14

74,632

74,632

-

4,295

4,106

-189

3,495

3,306

-189

800

800

-

2,506

2,524

31.9%

31.7%

Full-year contribution of revenue (rents andcommon area fees) from 4 properties
acquired during the previous fiscal period(+9 million yen)

Revenue (rents and common area fees) from1 property acquired during the fiscal period(+2 million yen)

Increase factor
Tax and public dues (property-related expense)(+10 million yen)

Asset custodian and administrative
agency compensation(+8 million yen)

Asset management fees(+3 million yen)Repair cost(+2 million yen)Comparison of forecast and actual results for 5th Fiscal Period(unit: million yen)

No. of properties owned at the 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

5th FP
ended Oct. 2016
5th FP(forecast)ended Oct. 2016
(disclosed on(results)
June 21, 2016)
21
22
676
679
404
404
243
246

Increase factor
Revenue (rents and common area fees) from1 property acquired during the fiscal period

Difference

+1
+2
-0
+3

4,060

4,106

+46

3,260

3,306

+46

800

800

-

(+2 million yen)

Increase factor
Repair cost(+3 million yen)

Decrease factor
Other commission 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.

(-2 million yen)5Forecast of Operating Results for 6th Fiscal Period and 7th Fiscal Period
Increase factor

Forecast of the 6th fiscal period(unit: million yen)
6th FP
ending Apr. 2017
(forecast)

Repair cost(+13 million yen)-

Depreciation(+5 million yen)

Decrease factor

Operating revenue

697

+18

Operating expenses

422

+17

Property-related expenses (excluding depreciation)

99

+15

Depreciation

194

+5

Operating income

274

+0

Non-operating revenue--0

Non-operating expenses

27+0Interest expense

21+0

Ordinary income

247

-0

Net income

246

-0

Asset custodian and administrative agency compensation

Forecast of the 7th fiscal period(unit: million yen)
Difference
from 6th FP

No. of properties owned at the end of the fiscal period

22-

Operating revenue

697

-0

Operating expenses

421

-0

Property-related expenses (excluding depreciation)

96-2

Depreciation

194

+0

Operating income

275

+0

Non-operating revenue--

Non-operating expenses

28+0Interest expense

21+0

Ordinary income

247

+0

Net income

246

+0

(-6 million yen)

6th FP
ending Apr. 2017
(forecast)
Number of investment units issued and outstanding at the end of
the fiscal period (units)
Distribution per unit (including distribution in excess of earnings)(yen)Distribution per unit (excluding distribution in excess ofearnings) (yen)Distribution in excess of earnings per unit (yen)(Reference)
Depreciation per unit (yen)Ratio of distribution in excess of earnings to depreciation per unit

7th FP
ending Oct. 2017
(forecast)(+17 million yen)

Increase factor

Difference
from 5th FP

22

No. of properties owned at the end of the fiscal period

Full-year contribution of revenue (rents and common area fees)from 1 property acquired during the previous fiscal period

Difference
from the 5th FP

74,632

-

4,100

-6

3,300

-6

800

-

2,600
30.8%

Increase factor
Tax and public dues (property-related expense)
Decrease factor
Repair cost(+2 million yen)(-4 million yen)
7th FP
ending Oct. 2017
(forecast)

Number of investment units issued and outstanding at the end of
the fiscal period (units)
Distribution per unit (including distribution in excess of earnings)(yen)Distribution per unit
(excluding distribution in excess of earnings) (yen)Distribution in excess of earnings per unit (yen)(Reference)
Depreciation per unit (yen)Ratio of distribution in excess of earnings to depreciation per unit

Difference fromthe 6th FP

74,632

-

4,100

-

3,300

-

800

-

2,612
30.6%

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Section 2

External GrowthChange in Asset Size
Continuous external growth through acquisition of carefully selected properties
Aim for further
expansion ofasset size

(million yen)

25,000+710 million yen+2,550 million yen
20,00019,318+2,778 million yen
Acquisition of
4 properties
Acquisition of
3 properties

15,00016,05818,608Acquisition of
1 property

45.5% increase

13,280Total of17 properties

10,000Total of
Total of
22 properties
21 properties

Total of14 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)

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.

8

Property Acquired in 5th FP (ended October 2016)
Sompo no ie Nishitanabeekimae

Sompo Care Message Inc. (New operator)

Acquisition price: 710 million yen (Acquisition date: October 6, 2016)
Operator: Sompo Care Message Inc.
Facility type: Fee-based homes for the elderly with nursing care

Sompo no ie
Nishitanabeekimae

Location

1-1-21 Nishitanabe-cho,
Abeno-ku, Osaka-shi, Osaka

Appraisalvalue

742 million yen (Note)Area

535.74m2

Total leased
area

2,095.79m2

Structure/
floors(1) RC/9F(2) RC/1F

Construction
completion

February 2007

 Site Features(Note) As of August 31, 2016

The Property is located an approximate two-minute walk from Nishitanabe Station on
the Osaka Municipal Subway Midosuji Line.

Company name

Sompo Care Message Inc.

Head office552-1 Nishiichi, Minami-ku, Okayama-shi, Okayama

Representative

Tetsuya Kikui, Representative Director

EstablishedMay 1997

Capital3,925 million yen

Attributes(listed market)

Listed company(JASDAQ Standard on the Tokyo Stock Exchange) (Note)

Business
activities

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

Other

Subsidiary of Sompo Holdings, Inc., a company listed on the firstsection of the Tokyo Stock Exchange(Note) Sompo Care Message Inc. is scheduled to be delisted on January 16, 2017.

Facilities operated

 Area Features

In Abeno Ward where the property is located, the population of elderly people aged
75 years or over is 13,800, accounting for 12.8% of the total population, which is alevel slightly above the national average of 12.2%. The population of elderly people
aged 75 years or over within 3km of the property is 85,200, accounting for 13.6% of
the total population, slightly above the ratio of Abeno Ward. On the other hand, thesupply ratio of facilities for people requiring nursing care/requiring support in Abeno
Ward is 19.9%, lower than the national average of 28.5%, and the supply ratio within
3km is also lower than national average at 24.3%. We believe that the supply offacilities for people requiring nursing care/requiring support has not reached the point
to fill demand.
 Property Features

Room area of the largest number of room type is relatively large at 25m2 and every
room is equipped with bathroom and mini-kitchen.

No. of facilities

Resident capacity

Fee-based homes for the elderly withnursing care

182

9,777

Elderly housing with supportive
services

125

7,279

Group homes and others

26

588

Total

333

17,644(Note) Actual results as of March 31, 2016
Source: The operator’s website, financial results briefing material, 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.

9Sourcing Route
Properties acquiredin 3rd FP

Upon Listing
14 properties
13,280 million yen

AssetManagement
Company’s
unique network
5 properties
3,750 million
yen

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

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

Alpha Living Okayama
Nishigawa Ryokudokoen
Acquisition price: 730
million yen
Alpha Living
Okayama Korakuen
Acquisition price:
610 million yen
Alpha Living
Takamatsu Ekimae
Acquisition price:
605 million yen• Proactively discussing
development
properties in addition
to information on
existing facilities
obtained from thesourcing routes

Alpha Living Takamatsu
Hyakkenmachi
Acquisition price:
605 million yen

2 properties
1,578 million
yen

Advisor15 properties
13,990 million
yen

14
properties
13,280
million yen• Also listing cases via
bridge funds fundedby the sponsor as partof sponsor support.

Minna-no-ie Omiya Yoshinocho
Acquisition price:
740 million yen
Minna-no-ie Chuo-ku En’nami
Acquisition price:
838 million yen• Discussing the cases
while acquiring
preferential
negotiation rights.

• Properties introduced by thesponsor group• Needs for asset managementfrom owners

Change of owners

Change of owners

・ Properties sold by developer groupwhich owns operators
・ Exclusive needs for facility
management

Sponsor group

6th FP~

Sompo no ie
Nishitanabeekimae
Acquisition price:
710 million yen• Needs for asset managementfrom owners

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Portfolio Map (as of October 31, 2016)
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.

11

Introduction of Operators(*) Operators are listed in order ofthe number of facilities they manage

Highly reliable operators
Operator

Number of Number ofmanaged operating
facilities
rooms(Note 1)
(Note 1)

EstablishedNichii Gakkan

421

13,560August, 1973

Sompo Care Message(Note2)

318

17,336

May, 1997

Wisnet126

3,576

Sompo Care Next

117

8,799

Sawayaka Club

69

4,128

Super Court

45

3,019

Attributes

Listed on the first section of the Tokyo Stock
Exchange
Listed on JASDAQ Standard on the Tokyo Stock Exchange
Subsidiary of Sompo Holdings, Inc., a company listed on thefirst 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, 1995

－

Cedar

41

2,169

April, 1981

Listed on JASDAQ Standard on the Tokyo Stock
Exchange

Charm Care Corporation

33

2,340

August, 1984

Listed on JASDAQ Standard on the Tokyo Stock
Exchange

Anabuki Medical Care

27

1,196

June, 2009

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

Nihon Kaigo Iryo Center

22

941

October, 1997

Silver Heights Sapporo

3321

December, 1961 －(Note1)

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%

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

40% or less－
(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 October 31, 2016).

(Note2) Sompo Care Message Inc. is scheduled to be delisted on January 16, 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.

12

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

 Six 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.

13

Report on Asset Management Department Activities
Relationship between asset management department personnel and facilities█ Sompo Care LAVIER Kinugasayama Koen
■ Tempura Caravan (July 2016): Serving freshly fried tempura to residents as part of measures to enhancesatisfaction of residents of facilities by Sompo Care Next’s head office█ La’nassica Arakogawa■ Respect-for-the-aged ceremony(September 2016)█ Alpha Living
Takamatsu
Hyakkenmachi■ Helping with daily chores at the facility(October 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.

14Section 3

Portfolio Analysis

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

Total resident capacity (right 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%
20.0%

400

10.0%

200

0.0%

0
Nov.
2014

Dec.
2014

Jan.
2015

Feb.
2015

Mar.
2015

Apr.
2015

May
2015

Jun.
2015

Jul.
2015

Aug.
2015

Sept.
2015

Oct.
2015

Nov.
2015

Dec.
2015

Jan.
2016

Feb.
2016

Mar.
2016

Apr.
2016

May
2016

Jun.
2016

Jul.
2016

Aug.
2016

Sept.
2016

Oct.
2016

Stable occupancy rates
 The overall occupancy rate has risen 0.4% from 87.3% at the end of April 2016 to 87.7% at the end of October 2016.
 The period average for the fiscal period ended October 2016 was 87.4%, unchanged from the period average for the fiscal
period ended April 2016 at 87.4%.
(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.

16

Status of Portfolio: Fee Systems of Facilities
Occupancy rate(%)

One-time entrance fee(thousand yen)Monthly fee(yen)Date of acquiring the written
explanation of important matters

Charm Suite Ryokuchi Koen

96.0

2,400～4,800

157,800～203,800

August 1, 2016

Super Court JR Nara-Ekimae

88.3

150,080

October 1, 2016

Sompo Care LAVIER Hiroshima Hikarigaoka

83.7

186,690

July 1, 2016

Sompo Care LAVIER Sagamihara Chuo (Note 2)

61.2

234,800～254,800

October 1, 2016

Sompo Care LAVIER Kinugasayama Koen

93.2

199,071

October 1, 2016

Sawayaka Kaikyokan

100.0

142,600～145,600

October 1, 2016

Sawayaka Meisuikan

100.0

103,440～138,440

October 1, 2016

Sawayaka Heart Life Nishikyogoku

94.0

161,600～181,600

July 1, 2016

Sawayaka Hinodekan

86.0

196,820

July 1, 2016

Sawayaka Riverside Kurinoki

92.3

157,762

October 1, 2016

Sawayaka Obatake Sanbankan

92.0

122,300

October 1, 2016

Nichii Care Center Fukushima Omori

100.0

162,743

October 1, 2016

La’nassica Arakogawa

95.0

152,340～154,340

October 1, 2016

Verger Hirakata

73.8

135,000

October 1, 2016

Minna-no-ie Omiya Yoshinocho

100.0

163,207

October 1, 2016

Minna-no-ie Chuo-ku En’nami

52.9

168,800

October 20, 2016

Silver Heights Hitsujigaoka No.3

92.7

2,000～4,000

162,540

October 1, 2016

61.8

1,380～2,760

137,000～159,000

October 1, 201662.5

1,620～3,000

148,000～189,000

October 1, 2016

90.9

1,200～2,400

149,000～185,000

October 1, 2016

96.2

960～1,920

152,000～212,000

October 1, 2016

175,000

September 1, 2016

Name of facility

Alpha Living Okayama Nishigawa Ryokudokoen (Note 2)
Alpha Living Okayama Korakuen
Alpha Living Takamatsu Ekimae(Note 2)

(Note 2)Alpha Living Takamatsu Hyakkenmachi
Sompo no ie Nishitanabeekimae(Note 2)85.7

4,500～6,800

3,800～7,800

1,260～2,100(Note 1) “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 the monthly
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 and monthly fee are indicatedseparately) whereas those for facilities without one-time entrance fee are indicated on a monthly payment basis. Occupancy rates are obtained by dividing the number of residents indicated in
the written explanation of important matter by resident capacity, rounded down to one decimal place.
(Note 2) Sompo Care LAVIERE Sagamihara Chuo revised fees in June 2016; and Alpha Living Okayama Nishigawa Ryokudokoen, Alpha Living Okayama Korakuen, Alpha Living Takamatsu Ekimae
and Alpha Living Takamatsu Hyakkenmachi in July 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.

17

Portfolio List (as of October 31, 2016)
Acquisition price(Note 2)

Appraisalvalue(million yen)
(Note 3)

Number ofrooms(rooms)(Note 4)

10.1

3,060

128

1,569

8.1

1,750

155

Hiroshima City, Hiroshima

960

5.0

1,230

80

Sagamihara City, Kanagawa

1,170

6.1

1,750

80

Fee-based homes for the elderly with nursing care

Yokosuka City, Kanagawa

1,839

9.5

2,060

104

Fee-based homes for the elderly with nursing care

Kitakyushu City, Fukuoka

630

3.3

897

65

Fee-based homes for the elderly with nursing care

Kitakyushu City, Fukuoka

590

3.1

812

87

Kyoto City, Kyoto

750

3.9

1,210

84

Niigata City, Niigata

773

4.0

938

50

No.
(Note 1)

Acquisition period

1

1st Fiscal Period

Charm Sweet Ryokuchi Koen

Fee-based homes for the elderly with nursing care

Charm Care Corporation

Toyonaka City, Osaka

1,950

2

2nd Fiscal Period

Super Court JR Nara-Ekimae

Residential-type fee-based homes for the elderly

Super Court

Nara City, Nara

3

1st Fiscal Period

Sompo Care LAVIERE Hiroshima Hikarigaoka

Fee-based homes for the elderly with nursing care4

1st Fiscal Period

Sompo Care LAVIERE Sagamihara Chuo

Fee-based homes for the elderly with nursing care5

2nd Fiscal Period

Sompo Care LAVIERE Kinugasayama Koen

6

1st Fiscal Period

Sawayaka Kaikyokan

7

1st Fiscal Period

Sawayaka Meisuikan

Property nameFacility typeOperator

LocationPrice(million yen)8

1st Fiscal Period

Sawayaka Heart Life Nishikyogoku

Residential-type fee-based homes for the elderly

9

2nd Fiscal Period

Sawayaka Hinodekan

Fee-based homes for the elderly with nursing care

Sompo Care Next

Sawayaka Club

Share ofportfolio(%)

10

2nd Fiscal Period

Sawayaka Riverside Kurinoki

Residential-type fee-based homes for the elderly

Niigata City, Niigata

266

1.4

323

33

11

2nd Fiscal Period

Sawayaka Obatake Sanbankan

Residential-type fee-based homes for the elderly

Kitakyushu City, Fukuoka

289

1.5

355

50

12

1st Fiscal Period

Nichii Care Center Fukushima Omori

Fee-based homes for the elderly with nursing care

Fukushima City, Fukushima

265

1.4

353

52

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

14

1st Fiscal Period

Verger Hirakata

Residential-type fee-based homes for the elderly

Nihon Kaigo

Hirakata City, Osaka

950

4.9

1,590

104

15

3rd Fiscal Period

Minna-no-ie Omiya Yoshinocho

Fee-based homes for the elderly with nursing care

Saitama City, Saitama

740

3.8

799

33

Nichii Gakkan

Wisnet16

3rd Fiscal Period

Minna-no-ie Chuo-ku En’nami

Fee-based homes for the elderly with nursing care17

3rd Fiscal Period

Silver Heights Hitsujigaoka No.3

Fee-based homes for the elderly with nursing care

Silver Heights Sapporo

Saitama City, Saitama

838

4.3

890

51

Sapporo City, Hokkaido

1,200

6.2

1,330

109

18

4th Fiscal Period

Alpha Living Okayama Nishigawa Ryokudokoen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

730

3.8

790

53

19

4th Fiscal Period

Alpha Living Okayama Korakuen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

610

3.2

672

45

20

4th Fiscal Period

Alpha Living Takamatsu Ekimae

Residential-type fee-based homes for the elderly

Takamatsu City, Kagawa

605

3.1

641

43

21

4th Fiscal Period

Alpha Living Takamatsu Hyakkenmachi

Elderly housing with supportive services

22

5th Fiscal Period

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

Anabuki Medical Care

11 operators 22 properties Total

Sompo Care Message

Takamatsu City, Kagawa

605

3.1

627

50

Osaka City, Osaka

710

3.7

744

42

19,318100.0

24,251

1,598<Diversification of facilities>(Note 1) Red numbers refer to Three major metropolitan areas and blue numbers to Core cities. The background colors for Property
Elderly housing withname and Facility type columns indicate types of facilities; orange for fee-based homes for the elderly with nursing care, blue forsupportive services
residential-type fee-based homes for the elderly and yellow-green for elderly housing with supportive services.
3.1%
Residential-type(Note 2) “Acquisition price” is excluding consumption tax, local consumption tax and the various expenses required for the acquisition.
29.9%“Share of portfolio” is the respective acquisition price expressed as a percentage of the total of the acquisition prices, rounded toWith nursing care
one decimal place. Therefore the total of “Share of portfolio” may be different from the figure indicated in “Total.”
67.0%(Note 3) “Appraisal value” is as of October 31, 2016 for other properties.
Fee-based homes(Note 4) “Number of rooms” is the figure indicated in the written explanation of important matters pertaining to the fee-based home for thefor the elderly 96.9%
elderly provided by the operator.
(Note) Total acquisition price by type as a percentage of the total 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.

18

Status of Portfolio (as of October 31, 2016)
Rent-Paying Capacity

Proportion of Nursing Care Fee

Proportion of Entrance Fee
Amortization Income

More than 60%,
but 70% or less
5.6%
1.2x or less
33.0%

More than 15%,
but 20% or less
8.0%

More than 2.0x
21.4%
Rent-Paying
Capacity (Note 1)
Average 1.5x

Proportion of
Nursing
Care Fee(Note 2)
Average 50.1%(On appraisal basis:
Average 1.7x)More than 1.2x,
but 1.5x or less
16.4%

More than 1.5x,
but 2.0x or less
29.2%

(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

50% or less
41.5%

More than
5%, but 15%
or less
31.4%

Proportion of
Entrance Fee
Amortization
Income(Note 3)
Average 4.6%

5% or less
60.6%

More than 50%,
but 60% or less
52.9%

(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).

(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 2015 to September 2016 disclosed by the respective operator. However, data for Nichii Care
Center Fukushima Omori are based on information on business income and expenditures from July 2015 to June 2016; for La'nassica Arakogawa from April 2015 to March
2016; for Silver Heights Hitsujigaoka No.3 from September 2015 to August 2016; and for Sompo no ie Nishitanabeekimae from July 2015 to June 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.

19

Portfolio Resident Attributes (as of October 31, 2016)
Gender(Note1)

Age Group(Note2)

Level of Requiring Nursing Care or Support(Note 3)

Under 65
65 years years
or over, 2.4%
but under
75 years

75 yearsor over,but under
85 years

28.7%

Independent

0.1%

Requiring
nursingcare level 4

7.9%

Male
27.0%

Female
73.0%

Other

14.4%
85 yearsor over

61.0%

Requiring
nursingcare level 3

18.5%

Requiring
nursingcare level 5

9.5%

1.1%

Requiringsupport level 1

5.8%
Requiring support
level 2

5.9%

Averagerequiredlevel ofnursing care
2.4

Requiring nursing
care level 1

22.4%

Requiring nursing
care level 2

22.1%(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-October,2016) provided by each operator.
All percentage figures are 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.

20Section 4

Financial Status

Status of Interest-Bearing Liabilities (as of October 31, 2016)
Status of Interest-Bearing Liabilities (as of October 31, 2016)
Term

LenderBalance(million yen)Type ofinterest

Interestrate(*)

Drawdown
date

Repayment
deadline

500

Floating

T+0.300%

October 6,
2016

September 29, 2017

Short-term
Mizuho Bankloans payable(**)
Current portion Mizuho Bankof long-term The Musashino Bank (**), (***)
loans payable Shinkin Central Bank

800
500

0.344%
Fixed

0.329%

500

0.355%

Mizuho Bank (**)

1,000

0.532%

Resona Bank (**)

1,200

0.532%

Sumitomo Mitsui Trust Bank (**)

1,200

0.431%

Mizuho Trust & Banking (**)

700

0.532%The Dai-ichi Life Insurance

500

0.431%(**)

Mizuho Bank
Long-termloans payable Mizuho Trust & Banking (**)

500
500

The Musashino Bank (**)
Resona Bank

(**)

Fixed

0.524%
0.524%

500

0.524%

May 29, 2020

2.5 years

May 29, 2020
May 29, 2020

Sumitomo Mitsui Trust Bank (**)

500

0.138% April 28, 2016

Short-term loans
payable andcurrent portion of
long-term loans payable

Averageremaining
period (Note)

October 31, 2018
October 31, 2019

June 1,2015

0.293%

Ratio of Long-Term Loans Payable andShort-Term Loans Payable

October 31, 2019

October 31, 2018

0.474%-

October 31, 2017

November 5,
2014

400

-

October 31, 2017
October 31, 2019

500

9,800

46.0％

October 31, 2017

November 5,
2014

Shinkin Central Bank (**)

Total

LTV(Note)

October 30, 2020

October 15,
2015

October 31, 2018
(Note) LTV and average remaining period indicate figures
calculated as of October 31, 2016, rounded to the firstdecimal place. LTV is calculated based on total assets.

April 30, 2020--

Ratio of Fixed Rates andFloating Rates

Repayment Schedule(million yen)

Ratio of floating rate

3,000

5.1%

2,500

23.5%

2,000
1,500
Long-termloans payable

76.5%

Ratio of fixed rate

94.9%(*) 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.
(***) Interest rates are converted on a one year=365 days basis.

1,000
500
0
6th FP
endingApr. 2017

7th FP
endingOct. 2017

8th FP
endingApr. 2018

9th FP
endingOct. 2018

10th FP
endingApr. 201911th FP
endingOct. 201912th FP
endingApr. 2020

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.

13th FP
endingOct. 202022

Policy on Distributions in Excess of Earnings /Index including NHI
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

Index including NHIMonth / year

Name of index

September 2015

Thomson Reuters GPR / APREA Investable REIT 100 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.

23

Overview of Unitholder Benefits Program
With the cooperation of operators who are the tenants, the unitholder benefits program will be offered
to unitholders as of the end of fiscal period ended October 2016.

Charm Care Corporation

Sompo Care Next, Inc.

Sawayaka Club Co., Ltd.

Discount coupon for entrance fee

Discount coupon for entrance fee

Discount on room fee

Free voucher for an overnight trial stay (with meals)

Discount on room fee

Free voucher for an overnight trial stay (with meals)

Free voucher for a one-day facility tour
(with lunch provided)

Free voucher for a one-day facility tour
(with lunch provided)

Cedar Co., Ltd.

Nichiigakkan Co., Ltd.

Nihon Kaigo Iryo Center Co., Ltd.

Free Enrollment and discount from
Tuition of COCO Juku, etc.

Free voucher for an overnight trial stay (with meals)

Discount voucher for homemaking, childcare andnursing-care at his/her own expense services

Free voucher for a one-day facility tour
(with lunch provided)

Wisnet Co., Ltd.

Discount on occupancy expenses

Silver Heights
SapporoCo., Ltd.
Discount coupon for entrance fee
Free voucher for an overnight trial stay(with meals)
Free voucher for a one-day facility tour
(with lunch provided)

Free voucher for an overnight trial stay (with meals)

Anabuki Medical
Care Inc.
Furniture presented to new residents ofAnabuki Medical Care’s facilities
that are owned by NHISuper Court
Co., Ltd.

Free voucher for an overnight trial stay(with meals)
Free voucher for a one-day facility tour
(with lunch provided)
Cash back for the monthly payment
for the new resident

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

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.

25

Appendix

Surrounding Status of Healthcare Facilities (1): 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.

27

Surrounding Status of Healthcare Facilities (2): Supply necessity of housing for elderly

Fill-Rate of Housing for Elderly to Elderly Population Target Rate for 2025
Based on the government policy target indicated in “Basic plans for housing forpeople (nationwide plans)” approved by the cabinet on March 18, 2016.
Fill-rate of housing for elderly toelderly population

Capacity of housing for elderly

1.6(million)
1.463
Fill-rate of housing for elderly to elderly population

Housing for elderly for approximately
770,000 is needed

Policy target by the
Ministry of Land,
Infrastructure,
Transportation
and Tourism

1.2

Approx. 0.77

(2014)(2025)
Urgent need of for widespread availabilityof housing for elderly

0.8

0.651

0.693

0.4

0.571

0.120

0.137

0.153

0.173

0.199

0.228

0.263

0.299

0.332

0.357

0.383

0.441

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0.0
2025

(出所)内閣府、厚生労働省、総務省、国立社会保障・人口問題研究所等(Source)Cabinet office, Ministry of Health, Labour and Welfare, Ministry of International Affairs and Communications, National Institute of Population and Social
Security Research, 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.

28

Market Size by Segment
Market size of fee-based homes for the elderly requiring nursing care is large, therefore there is much room for NHI to expand

Market size by facility typeFee-based homes for the elderly(for those requiring nursing care)Group homes
Net sales:High

797.3 billion yen

Net sales:

No. of facilities: 12,938(197,292 rooms)

No. of facilities: 11,063(377,618 rooms)

51.8％

14.9％
5.0％

Elderly housing with supportive services
417.2 billion yen

No. of facilities: 5,419(173,020 rooms)

500 thousand
yen/month

Price (assumed monthly fees)

Total
2,810.3
billion yen

13.7 billion yen(1,236 rooms)

80.8 billion yen(9,187 rooms)

1,455.5 billion yen

28.4％

Net sales

Market size by price (Fee-based homes for the elderly requiring
nursing care/who are independent)

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

133.1 billion yen(20,995 rooms)

400 thousand
yen/month

350 thousand
yen/month

83.3 billion yen(21,941 rooms)

342.5 billion yen(72,984 rooms)
200 thousand
yen/month

Zone of
Owned properties

200 thousand
yen/month12.2 billion yen(6,173 rooms)

899.2 billion yen(274,452 rooms)

Fee-based homes for the elderly(for those who are independent)
Net sales:

140.3 billion yen

No. of facilities: 476(34,934 rooms)

Low

Requiring nursing care

Source: KPMG Healthcare Japan Co., Ltd.

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.

29

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.

30Remaining Lease Contract Period of Each Property
Contract expiry date

Remaining lease
contract period

Minna-no-ie Chuo-ku En’nami

March 31, 2044

27.4Years
27.4
years

Minna-no-ie Omiya Yoshinocho

February 28, 2037

20.3Years
20.3
years

Super Court

Super Court JR Nara-Ekimae

July 14, 2039

22.7Years
22.7
years

Charm Care Corporation

Charm Sweet Ryokuchi Koen

August 28, 2038

21.8Years
21.8
years

Silver Heights Sapporo

Silver Heights Hitsujigaoka No.3

November 30, 2035

19.1Years
19.1
years

June 30, 2035

18.7
years
18.7Years

September 11, 2034

17.9Years
17.9
years

March 28, 2034

17.4Years
17.4
years

November 30, 2034

18.1
years
18.1Years

March 27, 2034

17.4
years
17.4Years

Nichii Care Center Fukushima Omori

March 31, 2034

17.4 years
17.4Years

Verger Hirakata

March 28, 2034

17.4 years
17.4Years

La’nassica Arakogawa

March 31, 2028

11.4 years
11.4Years

Sompo no ie Nishitanabeekimae

March 31, 2027

10.4 years
10.4Years

Operator
WisnetProperty name

Alpha Living Okayama Nishigawa Ryokudokoen
Anabuki Medical Care

Alpha Living Okayama Korakuen
Alpha Living Takamatsu Ekimae
Alpha Living Takamatsu Hyakkenmachi
Rest Villa Kinugasayama Koen

Sompo Care Next

Rest Villa Hiroshima Hikarigaoka
Rest Villa Sagamihara Chuo
Sawayaka Hinodekan
Sawayaka Riverside Kurinoki

Sawayaka Club

Sawayaka Obatake Sanbankan
Sawayaka Kaikyokan
Sawayaka Meisuikan
Sawayaka Heart Life Nishikyogoku

Nichii Gakkan
Nihon Kaigo Iryo Center
Cedar
Sompo Care Message Inc.

Average remaining period

18.5 years
18.5Years(Note) “Remaining Lease Contract Period” indicates period remaining as of October 31, 2016. “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.

31

(Reference) 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-2.3%[At-home：＋0.1%][Facility：-4.0%]

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-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%]

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+1.2%

Response to increased burden due to the consumption tax hike

+ 0.63%

FY 2014 revision

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

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.

32

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, Akihiko Terada
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.

33

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.

34

Introduction of Operators (3)Backup operator for Silver Heights Hitsujigaoka No.3
Company nameSilver Heights Sapporo Co., Ltd.

Head office

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

Living Platform, Ltd. agreed with Silver Heights Sapporo Co., Ltd. to provide mutual
managerial and financial support, and concluded, on September 7, 2015, a business
partnership agreement which confirms development of management system
together as group companies.

Representative director Representative director, Hirofumi Kaneko
Established

December 1961

Capital50 million yen

Attributes(listed market)

Company name

Living Platform, Ltd

Unlisted company

Head office

20-291, Minami Nijo-nishi, Chuo-ku, Sapporo-shi, Hokkaido

Representative director Representative director, Hirofumi Kaneko

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.

Established

June 2011

Capital79 million yen

Attributes(listed market)

Unlisted company

Principal businesses

Nursing care-related business (nursing care business, operation of fee- based
homes for the elderly, etc.), real estate management, advertising, etc.

Silver Heights Hitsujigaoka No.3

Company nameAnabuki Medical Care Inc.

Company name

Sompo Care Message Inc.

Head office2-8, Togiyamachi, Takamatsu, Kagawa

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

Representative director Representative director, Yoshihisa Otani

Representative director Representative director, Tetsuya Kikui

Established

June 2009

EstablishedMay 1997

Capital

80 million yen

Capital3,925 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.

Attributes(listed market)

Listed company(JASDAQ Standard on the Tokyo Stock Exchange, Securities Code: 2400)

Principal businesses

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.

Principal businesses(Note) Sompo Care Message Inc. is scheduled to be delisted on January 16, 2017.

Alpha Living Okayama
Nishigawa
Ryokudokoen

Alpha Living Okayama Korakuen

Alpha Living Takamatsu
EkimaeAlpha Living
Takamatsu
Hyakkenmachi

Sompo no ie
NishitanabeekimaeThis 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

Ranking of Operators Based on the Number of Rooms
Ranking(Note 1)Company name1 Sompo Holdings Inc. (Note 3)
2 Company A
3 Nichiigakkan Co., Ltd.
4 Company B
5 Company C
6 Company D
7 Company E
8 Company F
9 Company G
10 Company H
11 Company I
12 Company J
13 Company K
14 Company L
15 Sawayaka Club Co., Ltd.
16 Company M
17 ALSOK Group (Note 4)
18 Company N
19 Company O
20 Company P
21 Super Court Co., Ltd.
22 Company Q
23 Company R
24 Company S
25 Company T
26 Company U
27 Cedar Co., Ltd.
28 Company V
29 Charm Care Corporation
30 Company W

Fee-based homes for the elderlywith nursing care
Number of
Number of
facilities
rooms
294
18,310248
13,183
134
8,095
120
7,629
57
4,556
13
952
9
630
35
2,028
70
4,178
18
1,668
31
1,556
8
228
11
3,613
38
2,091
48
3,233
47
3,143
44
2,031
3
290
26
2,025
17
1,086
3
111
20
1,596
24
1,343
4
314
21
1,792
39
2,220
5
246
30
2,053
7
2,183

Residential-type fee-based
homes for the elderly
Number of
Number of
facilities
rooms
5
112
44
2,540
2
100
43
2,708
32
3,039
10
184
1
26
49
3,076
5
350
13
966
3
106
8
197
4
824
4
100
15
818
9
564
3
92
25
1,835
4
102
9
479
21
1,884
4
78
1
103
-

(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)

Other housing for the elderly
Number of
facilities
134
3
6
12
4
2
6
2
92
75
7
1
1
6
17
10
101
2
5
5
2
6
7
1
-

Number of
rooms
7,687
159
238
247
70
140
206
163
3,012
4,163
293
103
60
175
3,200
724
3,230
76
192
297
166
494
195
84
-

Total (Note 2)
Number of
facilities
454
297
417
163
90
150
257
90
90
48
126
94
15
153
75
62
133
20
67
101
44
59
39
80
27
28
42
68
32
7

Number ofrooms
26,585
15,90013,361
10,337
7,607
6,718
5,378
5,307
4,905
4,685
4,674
4,633
4,437
4,405
4,332
4,074
3,899
3,490
3,325
3,230
2,997
2,732
2,444
2,378
2,364
2,313
2,265
2,247
2,240
2,183

(Note 3) The figures are sum of Sompo Care Message and Sompo Care Next’s.
(Note 4) 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.

36

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.

37

Appraisal Value at End of Fiscal Period (as of October 31, 2016)
End of
4th FP

End of 5th FP

Difference(End of5th FP End of
4th FP)

Overview of appraisal report
Property nameAppraiser

Appraisalvalue

Direct capitalization
methodDCF method

Appraisal
NOI

Appraisalvalue(million yen)

Discount
rate(%)

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

5.7

349

5.5

5.9

22

349

4

1,240

5.2

1,210

5.0

5.4

69

1,220

10

1,750

1,770

4.9

1,740

4.7

5.1

88

1,720

30

Daiwa Real Estate Appraisal Co., Ltd.

3,060

3,100

4.6

3,040

4.4

4.8

144

3,030

30

Sawayaka Kaikyokan

Japan Real Estate Institute

897

906

5.3

888

5.1

5.5

50

886

11

Sawayaka Meisuikan

Japan Real Estate Institute

812

819

5.3

805

5.1

5.5

47

802

10

Sawayaka Heart Life Nishikyogoku

Daiwa Real Estate Appraisal Co., Ltd.

1,210

1,220

4.9

1,200

4.7

5.1

60

1,210

0

Verger Hirakata

Daiwa Real Estate Appraisal Co., Ltd.

1,590

1,610

5.2

1,580

5.0

5.4

85

1,570

20

Sompo Care LAVIERE
Kinugasayama Koen

The Tanizawa Sōgō Appraisal Co.,Ltd.
The Tanizawa Sōgō Appraisal Co.,
Ltd.

2,060

2,080

4.8

2,050

4.9

5.0

100

2,030

30

1,430

1,440

5.1

1,420

5.2

5.3

74

1,410

20

Price

Cap ratePrice(million yen)(million yen)(%)

Japan Real Estate Institute

353

357

Japan Real Estate Institute

1,230

Daiwa Real Estate Appraisal Co., Ltd.

Charm Sweet Ryokuchi Koen

Nichii Care Center Fukushima
Omori
Sompo Care LAVIERE
Hiroshima Hikarigaoka
Sompo Care LAVIERE
Sagamihara Chuo

La'nassica Arakogawa
Sawayaka Hinodekan

Daiwa Real Estate Appraisal Co., Ltd.

938

950

4.9

933

4.7

5.1

47

924

14

Sawayaka Riverside Kurinoki

Daiwa Real Estate Appraisal Co., Ltd.

323

329

5.0

321

4.8

5.2

17

319

4

Sawayaka Obatake Sanbankan

Daiwa Real Estate Appraisal Co., Ltd.

355

360

5.1

353

4.9

5.3

18

350

5

1,750

1,770

5.0

1,740

5.1

5.2

91

1,720

30

799

807

4.9

795

5.0

5.1

40

785

14

Super Court JR Nara-Ekimae
Minna-no-ie Omiya Yoshinocho

The Tanizawa Sōgō Appraisal Co.,Ltd.
The Tanizawa Sōgō Appraisal Co.,
Ltd.

Minna-no-ie Chuo-ku En’nami

Japan Real Estate Institute

890

900

4.9

880

4.7

5.1

44

885

5

Silver Heights Hitsujigaoka No.3

Daiwa Real Estate Appraisal Co., Ltd.

1,330

1,340

4.9

1,330

4.7

5.1

70

1,320

10

Alpha Living Okayama Nishigawa
Ryokudokoen

Daiwa Real Estate Appraisal Co., Ltd.

790

804

4.5

784

4.3

4.7

37

776

14

Alpha Living Okayama Korakuen

Daiwa Real Estate Appraisal Co., Ltd.

672

683

4.6

667

4.4

4.8

32

661

11

Alpha Living Takamatsu Ekimae

Daiwa Real Estate Appraisal Co., Ltd.

641

653

4.6

636

4.4

4.8

30

631

10

Alpha Living Takamatsu
Hyakkenmachi

Daiwa Real Estate Appraisal Co., Ltd.

627

635

4.7

624

4.5

4.9

31

617

10

Sompo no ie Nishitanabeekimae

The Tanizawa Sōgō Appraisal Co.,
Ltd.

744

748

4.7

742

4.7

4.9

36

-

-

24,251

24,521-

24,087

-

-

1,243

23,215292

Total(Note) Difference of appraisal value does not include properties acquired in the 5th FP.
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

Management Improvement Case of the Portfolio
La’nassica Arakogawa (Acquisition price: 1,279 million yen)
Operator

Site Area

1,829.55m2

Nagoya-shi designated specific facility resident
home for care

Total Floor Area

3,596.40m2

Care System

Care staff + Nursing staff : user = 1 : 3

Structure / floors

S / 4F

Nursing System

24 hour nurse resident facility

Condition of Rights

Rights to use method

Cooperative Medical
Organization

Nagoyaekisaikai hospital / Medical cooperation
Keiseikai Tikusasan Clinic / Medical cooperation
Jyunseikai Toyo hospital, others

Number of Rooms

100 rooms

Entering Requirement

Nursing care

Rooms (all private)

Room Size： 18.00〜19.65m2

Nursing Insurance Type

Location

MockupCedar Co., Ltd.

Takagi-cho, Minato-ku, Nagoya-shi, Aichi

Function Training
Room

Cafeteria

Upon acquisition
November 2014

Karaoke-room

June 1, 2008

Theater room

As a result of proposal / consultation on management and operation methods bymonitoring, management improved

La’nassica Arakogawa Change in Occupancy Rates
100%
95%
90%
85%
80%
75%
70%
65%
60%

Opening Date

Condition at the time of acquisition
・Lack of care staff and difficulty of recruitment influenced the acceptance of new residents.
 Stability of care staff and solution to lack of staff
・Newly allocated two move-in consultants and executed individual interview of all personnel with the director.
・Siphon improvement tasks of daily work and executed communication enhancement with each personnel.
・Reviewed schemes related to training, qualification, salaries and remuneration and conducted othermeasures in the operator and accordingly succeeded in securing human resources.
 Improvement in occupancy rates
・The director and the move-in staffs personally deployed active marketing to hospitals,
medical facilities, in-home long-term care support offices, health and welfare for the elderlyand expanded range of marketing and practiced reinforcement of marketing.
・Raised the occupancy rate at 100% at the end of April, 2016 and has been maintaining such a level.

11/4 12/4 13/4 14/4 14/12 15/3 15/6 15/9 15/12 16/3 16/6 16/9
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

Charm Sweet
Ryokuchi Koen

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

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

897

NOI yield (%) (Note 2)

8.6

7.2

7.6

7.4

8.0

Depreciation(million yen) (Note 3)

4

9

9

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

83.7

61.2

96.0

100.0

Charm Care Corporation

Sawayaka Club Co., Ltd.

21.8

17.4

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

Nichii Gakkan Company

Sompo Care Next Inc.

17.4

Appraisal values are as of October 31, 2016.
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
Figures for depreciation are actual figures of the 5th FP ended in Oct, 2016.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

17.4

Sompo Care Next Inc.
17.4

(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, 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.

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)

812

1,210

1,590

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

9

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

94.0

73.8

93.2

95.0

Sawayaka Club Co., Ltd.

Sawayaka Club Co., Ltd.

17.4

17.4

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

Appraisal values are as of October 31, 2016.
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
Figures for depreciation are actual figures of the 5th FP ended in Oct, 2016..
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

Nihon Kaigo
Iryo Center Co., Ltd.
17.4

Sompo Care Next Inc.

Cedar Co., Ltd.

17.9

11.4

(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, 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.

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)

938

323

355

1,750

799

890

NOI yield (%) (Note 2)

6.2

6.4

6.5

5.8

5.4

5.3

Depreciation(million yen) (Note 3)

8

3

4

17

6

8

Property nameLocation(residential address)

Access

Structure / floors (Note 4)

Sawayaka
Hinodekan

S/3F

S/4F

S/3F

Super Court JR
Nara-Ekimae

Minna-no-ie
Omiya Yoshinocho

RC/7F

Minna-no-ie
Chuo-ku En’nami

RC/4F

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)

86.0

92.3

92.0

88.3

100.0

52.9

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

Sawayaka Club Co.,
Ltd.
18.1

Sawayaka Club Co.,
Ltd.
18.1

Sawayaka Club Co.,
Ltd.
18.1

Super Court Co., Ltd.
22.7

Wisnet Co., Ltd.
20.3

Wisnet Co., Ltd.
27.4

(Note 1) Appraisal values are as of October 31, 2016.
(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written(Note 2) NOI yields are calculated by dividing the appraisal NOI by the acquisition price, rounded
explanation of important matter by the number of rooms, rounded to one decimal place.
to the first decimal place(Note 6) Remaining lease contract periods are as of October 31, 2016.
(Note 3) Figures for depreciation are actual figures of the 5th FP ended in Oct, 2016.
(Note 4) For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced
This document
is notconcretematerial structure.
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)

AccessAlpha 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
Approximately 1.2km
from Nango
Juhatchome Station on
the Tozai Line of the
Sapporo Municipal
SubwayAlpha Living Takamatsu
EkimaeAlpha Living
Okayama Korakuen

1-11-4, Hama, Naka-ku, 1-6, Nishiuchi-machi,
Takamatsu-shi,
Okayama-shi,
KagawaOkayama

Approximately 1.5km
from Okayama Stationon the JR Sanyo MainLine

Sompo no ie
Nishitanabeekimae

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

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

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

Approximately 1.9km
from Okayama Stationon the JR Sanyo MainLine

Alpha Living
Takamatsu
Hyakkenmachi

Acquisition price(million yen)

1,200

730

610

605

605

710

Real estateappraisal value(million yen) (Note 1)

1,330

790

672

641

627

744

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

0

Structure / floors (Note 4)

RC/3F

RC/7F

RC/4F

RC/6F

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)

92.7

61.8

62.5

90.9

96.2

85.7

Silver Heights SapporoCo., Ltd.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Sompo Care Message
Inc.

19.1

18.7

18.7

18.7

18.7

10.4

Operator
Remaining lease contract
period (year) (Note 6)(Note 1) Appraisal values are as of October 31, 2016.
(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written(Note 2) NOI yields are calculated by dividing the appraisal NOI by the acquisition price, rounded
explanation of important matter by the number of rooms, rounded to one decimal place.
to the first decimal place(Note 6) Remaining lease contract periods are as of October 31, 2016.
(Note 3) Figures for depreciation are actual figures of the 5th FP ended in Oct. 2016.
(Note 4) For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced
This document
is notconcretematerial structure.
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

Balance Sheets for 5th Fiscal Period Ended October 2016
4th FP
ActualAmount(million yen)

Current Assets

Ratio
7.8%

Amount(million yen)

1,487

4th FP
ActualAmount(million yen)

Ratio
Current Liabilities

7.0%

158

5th FP
ActualRatio
0.8%

Amount(million yen)
2,489

1,029

Operating account payables

23

24

Cash and deposits in trust

407

436

Short-term loans payable-

500

Other current assets

17

21

Current portion of long-termloans payable

-

1,800

Account payables – other57

75

Advances received

74

85

Other current liabilities

2

4

Tangible fixed assets

19,22892.2%

19,82793.0%

19,151

91.9%

19,757

92.7%

Buildings and others(including trust property)

11,622

11,808Land and others(including trust property)

7,528

7,949

Intangible fixed assets

43

0.2%

43

Leasehold rights and leasehold
rights in trust

40

40

Other intangible fixed assets22

Investments and other assets

33

Leasehold and security
deposits paid in trust

1010Long-term prepaid expenses

23

17

Total Assets

20,8470.2%

100.0%

27

21,315

Fixed Liabilities
Long-term loans payable

0.2%

Tenant leasehold and security
deposits

48.1%

8,230

9,300

7,500

719

730

11.7%

38.6%

10,17848.8%

10,72050.3%

Unitholders’ equity (net)

10,40849.9%

10,34848.5%

Unitholders’ equity

10,504

10,504

Deduction from unitholders’equity-95-155

Unappropriated retained earnings

260

1.2%

246

1.2%

Total Net Assets

10,66951.2%

10,595

49.7%

Total Liabilities and Net Assets

20,847100.0%

21,315100.0%

0.1%

100.0%

10,019

Ratio

Total Liabilities

Net Assets

Fixed Assets

Liabilities

1,193

Cash and deposits

Assets1,619

5th FP
ActualThis 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

Status of Unitholders as of the end of October 2016
Major unitholders (top 10)

Ownership ratio of investment units by category
Category of unitholders

Number ofunits atthe end of
4th FP

Number ofunits atthe end of
5th FP

Increase/decre
Ratio at thease from theend of 5th FP*
previous FP

No.

Name

Number of
Number of Increase/decr
units held at units held atease fromthe end of 4th the end of 5th the previous
FP
FP
FP

Ratio at theend of
5th FP*

Individual/others

38,06635,829-2,23748.01%

1

Daiwa Securities Group Inc.

7,600

0

7,600

10.18%

Financial institutions

19,83723,1873,350

31.07%

2

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

5,291

385

5,676

7.61%

Major city banks

0

0

0

0.00%

3

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

4,829

773

5,602

7.51%

Regional banks

1,595

1,792

197

2.40%

4

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

2,969

914

3,883

5.20%

Trust banks

14,975

17,7282,753

23.75%

5

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

1,416

457

1,873

2.51%

Life insurancecompanies

286

286

0

0.38%

6

Daiwa Real Estate AssetManagement Co. Ltd.

1,000

0

1,000

1.34%

Non-life insurancecompanies

0

0

0

0.00%

7

ＴＨＥ ＢＡＮＫ ＯＦ ＮＥＷ ＹＯＲＫＭＥＬＬＯＮ １４００４４

0

850

850

1.14%

Other financial
institutions

2,981

3,381

400

4.53%

8

Fukui Medical Credit Association

365

380

745

1.00%

Other domestic
companies

12,015

12,146131

16.27%

8

YONEZAWA SHINKIN BANK

700

0

700

0.94%

Foreigners

3,710

2,439

-1,271

3.27%

10

Osaka Shinkin Bank

607

83

690

0.92%

Securities companies

1,004

1,031

27

1.38%

Total

24,777

3,842

28,61938.35%

Total

74,632

74,6320

100.00%*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.

45

Introduction of Asset Management Company
Position of the Asset Management Company in Daiwa Securities Group

Daiwa Securities Group
Retail Division

Wholesale Division
Global Markets

Global Investment Banking

Daiwa Securities Co., Ltd.

Asset Management
Division

Investment
Division

Daiwa
Asset Management
Co., Ltd.

Daiwa
Corporate Investment
Co., Ltd.

Daiwa
PI Partners Co. Ltd.
Daiwa Next Bank, Ltd.

IR activities in Japan and abroad
Daiwa Real Estate
Asset Management
Co. Ltd.

Collaboration

Introducing
Properties/
FinanceDaiwa Institute of
Research Ltd.
Daiwa Institute of ResearchBusiness Innovation Ltd.

Daiwa SB
Investments Ltd.

WealthManagement
Department

Other

Whollyowned

Daiwa Securities
SMBC Principal
Investments Co. Ltd.

Daiwa Securities
Business Center Co.,Ltd.
Daiwa Property Co.,Ltd.

Branch Office

Real Estate Agency Business

Real Estate Brokerage Business
Introducing Properties

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

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.
Nichii Gakkan 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.>

SponsorAdvisorSupport47
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

Overview of Asset Management Company (1)Corporate Profile

Directors
As of November 30, 2016

Corporate name
Address

As of November 30, 2016

Daiwa Real Estate Asset Management Co. Ltd.

President and Representative
Director

Akira Yamanouchi

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

Vice President andRepresentative Director

Yuji Shinotsuka

Vice President andRepresentative Director

Yoshiki Nishigaki

Director

Naoyuki Owa

Director (non-executive)

Mikita Komatsu

Director (non-executive)

Akihiko Ogino

AuditorTamaki Shibayama

Auditor (non-executive)

Morimasa Matsuda

Auditor (non-executive)

Shinji Kiso

Established

October 21, 2004

Paid-in capital

200 million yen

Representative Director

Akira Yamanouchi

Board of Directors

9
Executive directors: 4 / Executive auditors: 1
Non-executive directors: 2 / Non-executive auditors: 2

No. of Employees

69 (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

REITs which entrust the asset management to
the Asset Management Company
As of November 30, 2016
Daiwa Office Investment
Corporation

Listed REIT focusing on office buildings
Asset size: approximately 467.7 billion yen(53 properties)

Daiwa Residential Private
Investment Corporation

Unlisted REIT focusing on residential properties
Asset size: approximately 90.7 billion yen(57 properties)

Nippon Healthcare Investment
Corporation

Japan’s first listed REIT focusing on healthcare
facilities
Asset size: approximately 19.3 billion yen(22 properties)

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

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

Compliance Officer
President andRepresentative Director
Internal Control OfficeAcquisition
Department

Origination
Department

Asset
Management
Department

Private FundManagement
Department

Customer
Relations
Department

Finance
Department

Office Investment Team

Office Management
Team

Finance Team

Residential Investment
Team

Residential
Management Team

Accounting Team

Healthcare
Investment Team

Healthcare
Management TeamManagement Team

Infrastructure Investment
Team

Investment Planning
Team
Construction
Management Team

Administration
Department

Corporate
Planning
Department

as of 30 November, 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.

49

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.

50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
51
51