As of June 20, 2017

Hopeful future
for Japan
Nippon Healthcare
Investment Corporation
Presentation Material for
The 6th Fiscal Period Ended April 2017

Contents
Disclaimer
Characteristics of Nippon Healthcare
Investment Corporation

Continuous Evaluation of Operators and Monitoring System 18
3

Section 1
Operating Results for 6th Fiscal Period
Operating Results for 6th Fiscal Period

5Forecast of Operating Results for 7th Fiscal Period
and 8th Fiscal Period

6

Section 2External Growth
Change in Asset Size

8

Portfolio Map (as of April 30, 2017)

9

Section 3

Monitoring Activities

19

Introduction of Operators

21

Operator Initiatives

22

Section 4
Financial Status
Status of Interest-Bearing Liabilities(as of April 30, 2017)・・・・・・・・・・・・・・・・・・・・

24

Policy on Distributions in Excess of
Earnings/Index including NHI

25

Overview of the Unitholder Benefits Program・・・・・・・・・・・・・ 26
・・・・・・・・・・・・・・
Section5

Environment Surrounding Healthcare Industry
Portfolio Analysis
Surrounding Status of Healthcare Facilities (1):Progress of aging society

28

13

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

29

Status of Portfolio: Fee Systems of Facilities

14

Market Size by Segment( as of June 2016)30

Status of Portfolio (as of April 30, 2017)15(Reference) History of Revisions to Nursing Care Fees

31

Portfolio List (as of April, 2017)11

Status of Portfolio: Change in Occupancy Rates

12

Remaining Lease Contract Period of Each Property

Portfolio Resident Attributes (as of April 30, 2017)
Value Enhanced Properties in 6th Fiscal Period(ended Apr. 2017)

16
17

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 6th Fiscal Period

Operating Results for 6th Fiscal Period
Actual results for the 6th Fiscal Period
5th FP(ended Oct. 2016)(results)(unit: million yen)
6th FP(ended Apr. 2017)(results)

Difference

Increase factor

22
679
404
83
188
274
0
27
20
247
246

22
697
419
101
193
277
0
27
21
250
249

+ 18
+ 15
+ 17
+5
+2
-0
+0
+0
+2
+2

74,632

74,632

-

4,106

4,143

+ 37

3,306

3,343

+ 37

800

800

-

Depreciation per unit (yen)

2,524

2,595

Ratio of distribution in excess of earnings to
depreciation per unit

31.7%

30.8%

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

Full-year contribution of revenue (rents andcommon area fees) from 1 properties(+17 million yen)

Increase factors
Repair cost(+15 million yen)

Depreciation(+5 million yen)

Decrease factor
Asset custodian and administrative
agency compensation(-6 million yen)

(Reference)

Comparison of forecast and actual results for 6th Fiscal Period(unit: million yen)

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

6th FP (ended Apr. 2017)(forecast)(Disclosed as of
21 Dec. 2016)

6th FP(ended Apr. 2017)(results)

22
697
422
246

22
697
419
249

-2
+3

4,100

4,143

+ 43

3,300

3,343

+ 43

800

800

-

Difference

Increase factor
Repair cost(+2 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 7th Fiscal Period and 8th Fiscal Period
Forecast of the 7th fiscal period

Increase factors
Depreciation(+2 million yen)Tax and public dues (property-related expense)(+2 million yen)

Decrease factor
Repair Cost(-2 million yen)
7th FP (ending Oct. 2017)(forecast)

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

Distribution per unit in excess of earnings

Difference fromthe 6th FP

74,632

-

4,100

-43

3,250

-93

850

+50

(Reference)
Depreciation per unit (yen)2,632

Ratio of distribution in excess of earnings to depreciation
per unit

32.3%

Forecast of the 8th fiscal period(unit: million yen)
8th FP(ending Apr. 2018)(forecast)Difference fromthe 7th FP

22-

Operating revenue

697

+0

Operating expenses

425

-0

Property-related expenses (excluding depreciation)

98-3

Depreciation

198

+1

Operating income

272

+0

Non-operating revenue--

Non-operating expense

29+1(Reference)

Interest expense

22+1

Depreciation per unit (yen)2,656

Ratio of distribution in excess of earnings to depreciation
per unit

32.4%

Number of properties ow ned at end of the fiscal period

Ordinary income

242

-0

Net income

241

-0

8th FP (ending Apr. 2018)(forecast)
Number of investment units issued and outstandingat the end of the fiscal period (units)
Distribution per unit (yen)(including distribution in excess of earnings)
Distribution per unit (excluding distribution in excess ofearnings)

Distribution per unit in excess of earnings

Difference fromthe 7th FP

74,632

-

4,100

-

3,240

-10

860

+10

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(million yen)

Listing as Japan’s
first healthcare
REIT

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

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

25,00019,31820,00018,60816,05815,00013,280Total of17 properties

10,000Total of
Total of
Total of
22 properties 22 properties
21 properties

Total of14 properties
5,000

0
Listing
Listing

End ofof thethe3rd3rdFP
FPEnd(endedOctober
2015)(ended October 2015)

End
FP
Endof
of thethe 4th
4th FP(ended(ended April
April 2016)
2016)

End
5thFP
FP
End ofof the 5th(ended2016)(ended October
October 2016)

End
Endof
ofthe
the 5th
6th FP(endedApril
April 2017)2017)(endedThis 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

Portfolio Map (as of April 30, 2017)
Owned properties are diversified over 13 prefectures
RegionDefinition

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

Targetincorporation
ratio

Incorporation
ratio (*)

50% or more

61.1%

Core City
Areas

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

50% or less

38.9%

Other

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

10% or less

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

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

9Section 3

Portfolio Analysis

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

Property nameOperator

Facility type

Location

Pr ic e(m illio n
ye n )

Appraisal Number ofOccupancy
value
rooms
rates
(rooms)Sh ar e o f (million yen)
（Note5）po r t fo lio(Note 3)(Note 4)(% )1
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

10.1

3,060

128

96.0

2
2

2nd Fiscal Period

Super Court JR Nara-Ekimae

Residential-type fee-based homes for the elderly

Super Court

Nara City, Nara

1,569

8.1

1,750

155

89.6

3
3

1st Fiscal Period

Sompo Care LAVIERE Hiroshima Hikarigaoka

Fee-based homes for the elderly with nursing care

960

5.0

1,230

80

83.7

Sagamihara City, Kanagawa

1,170

6.1

1,750

80

57.5

Yokosuka City, Kanagawa

1,839

9.5

2,060

104

92.3

4
4

1st Fiscal Period

Sompo Care LAVIERE Sagamihara Chuo

Fee-based homes for the elderly with nursing care

55

2nd Fiscal Period

Sompo Care LAVIERE Kinugasayama Koen

Fee-based homes for the elderly with nursing care

Hiroshima City, Hiroshima
Sompo Care Next

6
6

1st Fiscal Period

Sawayaka Kaikyokan

Fee-based homes for the elderly with nursing care

Kitakyushu City, Fukuoka

630

3.3

899

65

100.0

7
7

1st Fiscal Period

Sawayaka Meisuikan

Fee-based homes for the elderly with nursing care

Kitakyushu City, Fukuoka

590

3.1

813

87

100.0

8
8

1st Fiscal Period

Sawayaka Heart Life Nishikyogoku

Residential-type fee-based homes for the elderly

Kyoto City, Kyoto

750

3.9

1,210

84

97.6

Sawayaka Club99

2nd Fiscal Period

Sawayaka Hinodekan

Fee-based homes for the elderly with nursing care

Niigata City, Niigata

773

4.0

939

50

100.0

10
10

2nd Fiscal Period

Sawayaka Riverside Kurinoki

Residential-type fee-based homes for the elderly

Niigata City, Niigata

266

1.4

324

33

82.0

11
11

2nd Fiscal Period

Sawayaka Obatake Sanbankan

Residential-type fee-based homes for the elderly

Kitakyushu City, Fukuoka

289

1.5

355

50

94.0

12
12

1st Fiscal Period

Nichii Care Center Fukushima Omori

Fee-based homes for the elderly with nursing care

Nichii Gakkan

Fukushima City, Fukushima

265

1.4

353

52

100.0

13
13

2nd Fiscal Period

La’nassica Arakogawa

Fee-based homes for the elderly with nursing care

Cedar

Nagoya City, Aichi

1,279

6.6

1,430

100

100.0

14
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

75.7

15
15

3rd Fiscal Period

Minna-no-ie Omiya Yoshinocho

Fee-based homes for the elderly with nursing care

Saitama City, Saitama

740

3.8

799

33

81.8

16
16

3rd Fiscal Period

Minna-no-ie Chuo-ku En’nami

Fee-based homes for the elderly with nursing care

Saitama City, Saitama

838

4.3

903

51

(Note 6)17
17

3rd Fiscal Period

Silver Heights Hitsujigaoka No.3

Fee-based homes for the elderly with nursing care

Sapporo City, Hokkaido

1,200

6.2

1,330

109

94.5

18
18

4th Fiscal Period

Alpha Living Okayama Nishigawa Ryokudokoen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

730

3.8

789

53

65.4

19
19

4th Fiscal Period

Alpha Living Okayama Korakuen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

610

3.2

672

45

83.3

20
20

4th Fiscal Period

Alpha Living Takamatsu Ekimae

Residential-type fee-based homes for the elderly

Takamatsu City, Kagawa

605

3.1

641

43

97.7

21
21

4th Fiscal Period

Alpha Living Takamatsu Hyakkenmachi

Elderly housing with supportive services

Takamatsu City, Kagawa

605

3.1

627

50

92.5

22
22

5th Fiscal Period

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

Osaka City, Osaka

710

3.7

741

42

92.8

19,318100.0

24,265

1,598-

WisnetSilver Heights Sapporo

Anabuki Medical Care

Sompo Care Message

11 operators 22 properties Total(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)Red numbers refer to Three major metropolitan areas and blue numbers to Core cities. The background colors for Property name and Facility type columns
indicate types of facilities; orange for fee-based homes for the elderly with nursing care, blue for residential-type fee-based homes for the elderly and yellowgreen for elderly housing with supportive services.
“Acquisition price” is excluding consumption tax, local consumption tax and the various expenses required for the acquisition. “Share of portfolio” is therespective acquisition price expressed as a percentage of the total of the acquisition prices, rounded to one decimal place. Therefore the total of “Share of
portfolio” may be different from the figure indicated in “Total.”“Appraisal value” is as of April 30, 2017 for other properties.
“Number of rooms” is the figure indicated in the written explanation of important matters pertaining to the fee-based home for the elderly provided by theoperator.
“Occupancy rate” is obtained by dividing the number of residents indicated in the written explanation of important matters by the resident capacity, rounded
down to one decimal place.
“Minna-no-ie chuo-ku En’nami” has suspended business since January 2017, and the number of residents as of the end of April 2017 is zero. It is scheduled toresume operations in September 2017.

<Diversification of facilities>

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

Elderly housing withsupportive services
3.1%
With nursing care
67.0%

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

(Note 6)

11

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

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

Apr. 2017

Mar. 2017

Feb. 2017

Jan. 2017

Dec. 2016

Nov. 2016

Oct. 2016

Sep. 2016

Aug. 2016

Jul. 2016

Jun. 2016

May. 2016

Apr. 2016

Mar. 2016

Feb. 2016

Jan. 2016

Dec. 2015

Nov. 2015

Oct. 2015

Sep. 2015

Aug. 2015

Jul. 2015

Jun. 2015

May. 2015

Apr. 2015

0Mar. 2015

0.0%

Feb. 2015

200

Jan. 2015

10.0%

Dec. 2014

400

Nov. 2014

20.0%

Stable occupancy rates
 The overall occupancy rate has fallen by 1.1% from 87.7% at the end of October 2016 to 86.6% at the end of April 2017.
 The period average has fallen by 1.0% from 87.4% for the 5th Fiscal Period to 86.4% for the 6th Fiscal Period.
 Excluding the impact of Minna-no-ie Chuo-ku En’nami, the occupancy rate at the end of the 6th Fiscal Period was 89.4% and theperiod average occupancy rate 88.9%, both rising 0.5%.
(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.

12Remaining Lease Contract Period of Each Property
Contract expiry date

Remaining lease
contract period

Minna-no-ie Chuo-ku En’nami

March 31, 2044

26.9Years

Minna-no-ie Omiya Yoshinocho

February 28, 2037

19.8Years

Super Court

Super Court JR Nara-Ekimae

July 14, 2039

22.2Years

Charm Care Corporation

Charm Sweet Ryokuchi Koen

August 28, 2038

21.3Years

Silver Heights Sapporo

Silver Heights Hitsujigaoka No.3

November 30, 2035

18.6Years

June 30, 2035

18.2Years

September 11, 2034

17.4Years

March 28, 2034

16.9Years

November 30, 2034

17.6Years

March 27, 2034

16.9Years

Nichii Care Center Fukushima Omori

March 31, 2034

16.9Years

Verger Hirakata

March 28, 2034

16.9Years

La’nassica Arakogawa

March 31, 2028

10.9Years

Sompo no ie Nishitanabeekimae

March 31, 2027

9.9Years

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

18.0Years(Note) “Remaining Lease Contract Period” indicates period remaining as of April 30, 2017. “Average remaining period” is a weighted average with acquisition prices,rounded to one decimal place.

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

13

Status of Portfolio: Fee Systems of Facilities
Name of facility

Charm Sweet Ryokuchi Koen

One-time entrancefee (thousand yen)
(Note)

Monthly rent (yen)(Note)

2,400 ～4,800

157,800～203,800
237,800～243,800

Super Court JR Nara-Ekimae
Sompo Care LAVIERE Hiroshima Hikarigaoka

150,080
4,500 ～6,800

261,690～300,020

Sompo Care LAVIERE Sagamihara Chuo
Sompo Care LAVIERE Kinugasayama Koen

234,800～254,800
3,800 ～7,800

199,071
262,401～329,071

April 1, 2017
March 1, 2017
January 1, 2017
April 1, 2017
January 1, 2017

Sawayaka Kaikyokan

142,600～145,600

April 1, 2017

Sawayaka Meisuikan

103,440～138,440

April 1, 2017

Sawayaka Heart Life Nishikyogoku

161,600～181,600

April 1, 2017

Sawayaka Hinodekan

196,820

April 1, 2017

Sawayaka Riverside Kurinoki

157,742

April 1, 2017

Sawayaka Obatake Sanbankan

122,300

April 1, 2017

Nichii Care Center Fukushima Omori

162,743

April 1, 2017

La’nassica Arakogawa

1,260 ～2,100

152,340～154,340
189,340

April 1, 2017

Verger Hirakata

135,000

January 1, 2017

Minna-no-ie Omiya Yoshinocho

163,207

April 1, 2017

Minna-no-ie Chuo-ku En’nami

-

-

-

Silver Heights Hitsujigaoka No.3

2,000 ～4,000

162,540

April 1, 2017

Alpha Living Okayama Nishigawa Ryokudokoen
Alpha Living Okayama Korakuen
Alpha Living Takamatsu Ekimae
Alpha Living Takamatsu Hyakkenmachi
Sompo no ie Nishitanabeekimae(Note)

186,690

Date of acquiring the written
explanation of importantmatters

1,380

137,000 ～159,000

April 1, 2017

1,620 ～2,850

148,000～189,000

April 1, 2017

1,200
960

149,000～185,000
152,000 ～212,000

April 1, 2017
April 1, 2017

175,000

April 1, 2017

“One-time entrance fee” indicates one-time entrance fee stated in the written explanation of important matters or in the price list acquired from theoperators. “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 indicated separately)
whereas those for facilities without one-time entrance fee are indicated on a monthly payment basis. Occupancy rates are obtained by dividing thenumber of residents indicated in the written explanation of important matter by resident capacity, rounded down to one decimal place.

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

14

Status of Portfolio (as of April 30, 2017)
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
29.4%

More than 2.0x
28.7%

Rent-Paying
Capacity (Note 1)
Average 1.5x
(On appraisal basis:
Average 1.7x)More than 1.2x,
but 1.5x or less
20.0%

More than 15%,
but 20% or less
2.7%

More than 1.5x,
but 2.0x or less
21.9%

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

Proportion of
50% or lessNursing
48.2%
Care Fee(Note 2)
Average 49.6%

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

Proportion of
Entrance Fee
Amortization
Income(Note 3)
Average 4.4%

5% or less
60.6%

More than 50%,
but 60% or less
46.1%

(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 April 2016 to March 2017 disclosed by the respective operator. However, data for Nichii Care Center
Fukushima Omori are based on information on business income and expenditures from January 2016 to December 2016; for Silver Heights Hitsujigaoka No.3 from March 2016
to February 2017.

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

15

Portfolio Resident Attributes (as of April 30, 2017)
Gender(Note1)

Age Group(Note2)

Level of Requiring Nursing Care or Support(Note 3)
Independent Other
Requiring
1.5%
0.2% Requiring nursing
support level 1
care level 5

Under 65
65 years years
or over, 2.6%
but under
75 years

Requiring support
level 2

6.6%

Male
27.3%

Female72.7%

5.7%

Requiring
nursingcare level 4

5.9%

75 yearsor over,but under
85 years

28.6%

9.5%

85 yearsor over

62.1%

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

15.2%

Requiring
nursingcare level 3

18.3%

22.6%

(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 (October, 2016-April,2017) provided by each operator. Numbers related to Minna-no-ie Chuoku En’nami are excluded from the above graphs as it has suspended its operation since January, 2017 .
All percentage figures are rounded to one decimal place. “Average required level of nursing care” is rounded down to the first decimal place.

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

16

Value Enhanced Properties in 6th Fiscal Period (ended Apr. 2017)
Sawayaka Heart Life Nishikyogoku (Acquisition price: 750 million yen)

Strategically value enhanced property



Sawayaka Kaikyokan (Acquisition price: 630 million yen)
Strategically value enhanced property

Locational Features

 Locational Features

The property is located approximately
an 18-minute walk from Katsura
Station on the Hankyu Kyoto Line. It
stands in an area with Katsura Riverto the west and Tenjin to the east.
The property is located along thebay, a 15-minute walk from
Wakamatsu Station on the JR
Chikuho Main Line. It stands in an
urban district with a city office,community center, hospital andother structures.

Property Features

The property provides standard sizedprivate rooms designed for people
requiring long-term care and therooms are equipped with sink andtoilet.

Renovation of exterior walls <Renovation cost: 13.0 million yen>

<Before renovation><After renovation>

 Property Features

The property provides standard
sized private rooms

Renovation of exterior walls <Renovation cost: 13.1 million yen><Side view of the facility(after renovation)><Railing and wall (after renovation)>

Implemented value enhancement work for maintaining the esthetic appearance contributing to high occupancy rates (Nishikyogoku: 97.6%, Kaikyokan: 100%) in order tostay competitive with rival properties in the surrounding area.
Proactive implementation of necessary repair work has led to higher satisfaction of not only the residents and their families but also of facility employees, and has also
resulted in a stronger relationship with the operator.

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

17

Continuous Evaluation of Operators and Monitoring System
Business operation cycle
Common items for evaluation at the time of new acquisition andcontinuous evaluation

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

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

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

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

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

Qualitative Perspective• The operator’s attitude towards information disclosure

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

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

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

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

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

18

Monitoring Activities
On-site Monitoring█ Sompo Care LAVIERE
Hiroshima Hikarigaoka█ Sawayaka Kaikyokan█ Sawayaka Heart Life
Nishikyogoku█ Sawayaka Meisuikan■ Facility visit and interview(Mar. 2017)■ Facility visit and interview(Apr. 2017)■ Facility visit and interview(Apr. 2017)■ Facility visit and interview(Apr. 2017)█ Sompo Care LAVIERE Sagamihara Chuo
■ Sushi Caravan (April, 2017) : Served sushi to its facility residents as one of measures to improve customer
satisfaction by Sompo Care Next.

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

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.

20

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)(Note)

Nichii Gakkan

424

13,703

Sompo Care Message

319

17,393

Wisnet127

3,548

Sompo Care Next

117

8,799

Sawayaka Club

70

4,185

Super Court

46

3,091

Attributes

Established

August, 1973

Listed on the first section of the Tokyo Stock
Exchange

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

May, 1995

－

Cedar

41

2,169

April, 1981

Listed on JASDAQ Standard on the Tokyo Stock
Exchange

Charm Care Corporation

38

2,706

August, 1984

Listed on JASDAQ Standard on the Tokyo Stock
Exchange

Anabuki Medical Care

29

1,291

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(Note)

3

321

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－

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

Number of managed facilities and Number of operating rooms indicate the number of facilities and the number of rooms
for fee-based homes for the elderly, group homes and elderly housing with supportive services based on operators’
websites and interviews with them (as of May 31, 2017).

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

21

Operator Initiatives
Anabuki Medical Care Inc.

Charm Care Corporation█ Implementing measures to improve working conditions sequentially from May
2017 in order to secure competent care staff.

█ Newly established a scholarship program for foreign students studying
nursing care in Japan in order to secure care staff in the future Supports foreign students learning Japanese and nursing care knowledge/skills at training schools operated by Anabuki Group by
newly establishing a scholarship program for foreign students studying nursing care, With assured acquisition of certified care worker qualification, long-term employment will be possible through obtaining work visa.
 Six foreign students from the program joined Anabuki Medical Care Inc. in April 2017 with certified care worker qualification, which
are given upon graduation from the training school. Since joining the company, the former students have worked as caregivers at
Alpha Living, and repayment of scholarship funds will be exempted entirely after working for a certain period of time.

Initiatives on improving working conditions of care staff
1. Reestablishment of a career path system
2. Raising caregiver qualification allowance and night-shift allowance

Anabuki
PâtissierWelfare College,
Nursing Careand Welfare
Course(2 years)

3. Establishment of a system for limited regular employees
4. Extension of employment period (Establishment of an elder employee system)█ Example of improving working conditions (example of annual income)

Increase rate after
improvement ofworking conditionsFirst year
(22 years old)
Initial training

Fourth year
(26 years old)
Certified care worker

Sixth year
(28 years old)
Certified care worker

Eighth year
(30 years old)
Certified care worker

4.5%

7.8%

8.9%

11.1%

Overseasschools(Universities,
Japaneselanguageschools) ① EnteringschoolAnabukiBusiness
College
Japanese
Courses(1 year)② Furthereducation

Employed by
Anabuki Medical
Care Inc. (certifiedcare worker/regular
employee)

Obtainment of
Repayment ofcertified care
③ Findingscholarship funds
workeremployment is exempted after
qualification
working(national
continuously for aqualification)certain period oftime.

Qualification allowance: Initial training for care staff 3,000 yen → 6,000 yen
Those who completed training for working care staff: 5,000 yen → 10,000 yen (Twofold increase)
Night-shift allowance: 5,000 yen per shift → 7,000 yen per shift (1.4-fold increase)

Scholarshipprovision

Scholarshipprovision█ Establishment of a system for “limited regular employees”
Information
session in
Vietnam(Nov.
2016)<Improvement in working conditions when becoming a “limited regular employee” from a junioremployee>
Junior employee: Not eligible for bonus → Limited regular worker: Normally eligible for bonus
equivalent to 1.5-month salary＜(Reference) Revisions to Nursing Care Fees＞


FY2017 revision

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

＋1.14%[In-home: ＋0.72%][Facility: ＋0.42%]

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

22Section 4

Financial Status

Status of Interest-Bearing Liabilities (as of April 30, 2017)
Status of Interest-Bearing Liabilities (as of April 30, 2017)
Term
Short-term

Interest
Balance(million yen) rate type
500 Floating

LenderMizuho Bank

Current
Mizuho Bank (**)
portion(**) (***)
of long-term The Musashino Bankloans payable Shinkin Central Bank

800

0.344%
Fixed

October 31, 2017

500

0.355%

October 31, 2017

Sumitomo Mitsui Trust Bank (**)

1,200

0.431%

October 31, 2018

Resona Bank (**)

1,200

0.532%

October 31, 2019

1,000

0.532% November 5, 2014

October 31, 2019

700

0.532%

October 31, 2019500

0.431%

October 31, 2018

(**)
(**)

Mizuho Trust & Banking
The Dai-ichi Life InsuranceLong-term Mizuho Bank

(**)

500

Mizuho Trust & Banking (**)
The Musashino Bank

(**)

(**)

Resona Bank
Shinkin Central Bank
Sumitomo Mitsui Trust Bank (**)
Total

0.524%
0.524%

500

0.524%

500

0.474%

400

0.293%

500

0.138%

9,800

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

Fixed

500

-

-

LTV(Note)

October 31, 20170.329% November 5, 2014

Mizuho Bank

500

Drawdown
RepaymentInterest
datedeadlinerate(*)
T+0.300% October 6, 2016 September 29, 2017

46.1％

Averageremaining
period (Note)

May 29, 2020
June 1, 2015

2.0 years

May 29, 2020
May 29, 2020

October 15, 2015

October 30, 2020
October 31, 2018

April 28, 2016

April 30, 2020--

Ratio of Fixed Rates andFloating Rates(Note) LTV and average remaining period indicate figures
calculated as of April 30, 2017, rounded to the firstdecimal place. LTV is calculated based on total assets.

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%

1,000

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.

5000
7th FP
8th FP
9th FP
10th FP 11th FP 12th FP 13th FP
endingendingendingendingendingendingendingOct. 2017 Apr. 2018 Oct. 2018 Apr. 2019 Oct. 2019 Apr. 2020 Oct. 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.

24

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 Composite Index

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

25

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 April 2017.

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.

26

Section 5

Environment Surrounding
Healthcare Industry

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

12.9

12.9
8.0

300

6.1
229.0

31.0

46.0

74.2

2000年

94.8
23.3

281.4

340.5

174.2

1995年

131.3

68.8
19.3

1990年

0

5.2

1985年

100

4.6

1980年

200

4.3

9.7

11.1

男性
Male

105.1

138.6

2010年

11.2

19.0

2005年

500

17.9

女性
Female

411.9

188.9

男性
Male

15.0
10.0
5.0
0.0

2060年

2055年

2050年

2045年

2040年

2035年

2030年

2025年

20.0

21.9

13.9
450.6

217.3

22.6

23.1

14.6

15.4

471.0

229.6

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

14.7

16.2

21.3

2015年

600

20.3

(%)

2025年

700

400

Estimatedfigures

Actual figures

25.0

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

2030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

2020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.

28

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.

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

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

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

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

Total
2,862.8billion yen

51.8％

15.6％
5.0％

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

Zone of
Owned properties

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

14.5 billion yen（1,236 rooms）

500 thousand
yen/month

Price (assumed monthly fees)

27.6％

85.1 billion yen（9,589 rooms）

Low

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

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

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

930.6 billion yen（292,592 rooms）

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

12.2 billion yen（6,217 rooms）

Independent

Residents’ physical condition

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

30

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

Response to increased burden due to the consumption tax hike

+ 0.63%



FY 2015 revision

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

FY 2017 revision[At-home：＋0.1%]

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

FY 2014 revision



-2.3%

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

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

Rate of revision

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

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

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

31

Appendix

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.
Discussing the cases
while acquiring
preferential
negotiation rights inthe three major
metropolitan areas

Minna-no-ie Omiya Yoshinocho
Acquisition price:
740 million yen
Minna-no-ie Chuo-ku En’nami
Acquisition price:
838 million yen• 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.

33

Introduction of Operators (1)Nichii Gakkan Company

Company name

Sawayaka Club Co., Ltd.

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

Head office

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

Chairman, President and CEO, Akihiko Terada

Representative director Representative director, Fumiharu Uchiyama

August 2, 1973
11,933 million yen
Listed company(First Section of the Tokyo Stock Exchange, Securities code: 9792)
Medical Support Business, Nursing Care and Health Care Business, Education
Business and Child-care Business

Established

December 1, 2004

Capital

200 million yen

Attributes(listed market)

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

Principal businesses

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

Parent company

Uchiyama Holdings Co., Ltd.

Nichii Care Center Fukushima Omori
Sawayaka Hinodekan
Company name

Sompo Care Next Inc.

Head office

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

Established

November 11, 1992

Capital

5,095 million yen

Attributes(listed market)

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

Principal businesses

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

Parent company

Sompo Holdings, Inc.

Sompo Care LAVIERE
Hiroshima Hikarigaoka

Sawayaka Kaikyokan

シダー

Representative director Representative director, Ken Endo

Sompo Care LAVIERE
Kinugasayama Koen

Sawayaka Obatake Sanbankan Sawayaka Meisuikan

Company name

Cedar Co., Ltd.

Head office

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

Representative director Representative director, Takayasu Zakoda
Established

April 25, 1981

Capital

432 million yen

Attributes(listed market)

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

Principal businesses

Sompo Care LAVIERE
Sagamihara Chuo

La’nassica Arakogawa

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

34

Introduction of Operators (2)Company nameCharm Care Corporation

Company nameNihon Kaigo Iryo Center Co., Ltd.

Head office

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

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

Representative director Representative director, Takahiko Shimomura
Established

August 22, 1984

Capital

192 million yen

Attributes(listed market)

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

Principal businesses

Representative director Representative director, Yusuke Taniguchi
Established

October 7, 1997

Capital50 million yen

Attributes(listed market)

Unlisted company

Principal businesses

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

Charm Sweet Ryokuchi Koen

Verger Hirakata

Company nameSuper Court Co., Ltd.

Head office

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

Representative director Representative director, Akiyoshi Yamamoto

Company name

Wisnet Co., Ltd.

EstablishedMay 19, 1995

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

Capital50 million yen

Attributes(listed market)

Unlisted company

Representative director Representative director, Yuuichi Miyazawa
Established

January 1998

Capital390 million yen

Principal businesses

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

Attributes(listed market)

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

Parent company

Super Holdings Co., Ltd.

Principal business

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

Super Court JR Nara-Ekimae

Minna-no-ie Omiya Yoshinocho

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

35

Introduction of Operators (3)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)

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

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

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.

36

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.

37

Management Back-up Agreement

Hokkaido Area
No. of Operators: 5
Asset
Management

NHI
Ownership

Healthcare
facility

Healthcare
facility

Healthcare
facility

A

B

C

Operator

Operator

Operator

A

B

C

Management Back-up Contractors

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

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

Discuss handoverof operation toother operators incase ofcontingency

Kanto Area
No. of Operators: 7

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

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

38

Appraisal Value at End of Fiscal Period (as of April 30, 2017)
End of 5th FP

End of 6th FP
Overview of appraisal report
Property nameAppraiser

Appraisalvalue

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

DCF method

Cap rate

Price

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

Appraisal
NOI(million yen)Appraisal
value

Difference(End of 6th
FP - End of
5th FP)(million yen) (million yen)

Nichii Care Center Fukushima Omori

Japan Real Estate Institute

353

356

5.7

349

5.5

5.9

22

353

-

Sompo Care LAVIERE Hiroshima Hikarigaoka

Japan Real Estate Institute

1,230

1,240

5.2

1,210

5.0

5.4

69

1,230

-

Sompo Care LAVIERE Sagamihara Chuo

Daiw a Real Estate Appraisal

1,750

1,770

4.9

1,740

4.7

5.1

88

1,750

-

Charm Sw eet Ryokuchi Koen

Daiw a Real Estate Appraisal

3,060

3,100

4.6

3,040

4.4

4.8

144

3,060

-

Saw ayaka Kaikyokan

Japan Real Estate Institute

899

907

5.3

890

5.1

5.5

50

897

2

Saw ayaka Meisuikan

Japan Real Estate Institute

813

819

5.3

807

5.1

5.5

47

812

1

Saw ayaka Heart Life Nishikyogoku

Daiw a Real Estate Appraisal

1,210

1,220

4.9

1,200

4.7

5.1

60

1,210

-

Verger Hirakata

Daiw a Real Estate Appraisal

1,590

1,610

5.2

1,580

5.0

5.4

85

1,590

-

Sompo Care LAVIERE Kinugasayama Koen

The Tanizaw a Sōgō Appraisal

2,060

2,080

4.8

2,050

4.9

5.0

100

2,060

-

La'nassica Arakogaw a

The Tanizaw a Sōgō Appraisal

1,430

1,440

5.1

1,430

5.2

5.3

74

1,430

-

Saw ayaka Hinodekan

Daiw a Real Estate Appraisal

939

950

4.9

934

4.7

5.1

47

938

1

Saw ayaka Riverside Kurinoki

Daiw a Real Estate Appraisal

324

330

5.0

322

4.8

5.2

17

323

1

Saw ayaka Obatake Sanbankan

Daiw a Real Estate Appraisal

355

360

5.1

353

4.9

5.3

18

355

-

Super Court JR Nara-Ekimae

The Tanizaw a Sōgō Appraisal

1,750

1,770

5.0

1,740

5.1

5.2

91

1,750

-

Minna-no-ie Omiya Yoshinocho

The Tanizaw a Sōgō Appraisal

799

807

4.9

796

5.0

5.1

40

799

-

Minna-no-ie Chuo-ku En’nami

Japan Real Estate Institute

903

912

4.9

894

4.7

5.1

45

890

13

Silver Heights Hitsujigaoka No.3

Daiw a Real Estate Appraisal

1,330

1,340

4.9

1,330

4.7

5.1

70

1,330

-

Alpha Living Okayama Nishigaw a Ryokudokoen

Daiw a Real Estate Appraisal

789

803

4.5

783

4.3

4.7

37

790

-1

Alpha Living Okayama Korakuen

Daiw a Real Estate Appraisal

672

682

4.6

667

4.4

4.8

32

672

-

Alpha Living Takamatsu Ekimae

Daiw a Real Estate Appraisal

641

653

4.6

636

4.4

4.8

30

641

-

Alpha Living Takamatsu Hyakkenmachi

Daiw a Real Estate Appraisal

627

635

4.7

624

4.5

4.9

31

627

-

Sompo no ie Nishitanabeekimae

The Tanizaw a Sōgō Appraisal

741

749

4.7

738

4.8

4.9

36

744

-3

24,26524,533-24,113

-

-

1,244

24,251

14

Total

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

39

Portfolio List (1)Property nameLocation(residential address)

AccessNichii Care Center
Fukushima Omori

Sompo Care LAVIERE
Hiroshima Hikarigaoka

Sompo Care LAVIERE
Sagamihara Chuo

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

899

NOI yield (%) (Note 2)

8.5

7.2

7.6

7.4

8.0

Depreciation(million yen) (Note 3)

5

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

57.5

96.0

100.0

Charm Care Corporation

Sawayaka Club Co., Ltd.

21.3

16.9

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

Nichii Gakkan Company

Sompo Care Next Inc.

16.9

Appraisal values are as of April 30, 2017.
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 April 30, 2017.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

16.9

Sompo Care Next Inc.
16.9

(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 April 30, 2017.

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

40

Portfolio List (2)Sawayaka Meisuikan

Sawayaka Heart Life
Nishikyogoku

Location(residential address)

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

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

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

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

Property name

Sompo Care LAVIERE
Kinugasayama Koen

Verger Hirakata

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

La’nassica Arakogawa

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

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

Approximately 1.2km from
Kinugasa Station on the JR
Yokosuka Line

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

Acquisition price(million yen)

590

750

950

1,839

1,279

Real estateappraisal value(million yen) (Note 1)

813

1,210

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

97.6

75.7

92.3

100.0

Sawayaka Club Co., Ltd.

Sawayaka Club Co., Ltd.

16.9

16.9

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

Appraisal values are as of April 30, 2017.
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 April 30, 2017.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

Nihon Kaigo
Iryo Center Co., Ltd.
16.9

Sompo Care Next Inc.

Cedar Co., Ltd.

17.4

10.9

(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 April 30, 2017.

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

41

Portfolio List (3)Sawayaka Riverside
Kurinoki

Sawayaka Obatake
Sanbankan

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

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

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

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

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

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

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

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

Approximately 2.5km
from Kokura Station on
the JR Kagoshima MainLine

Approximately 280m
from Nara Station on
the JR Kansai MainLine

Approximately 2.5km
from Miyahara Stationon the JR Takasaki
Line

Approximately 2.4km
from Kitayono Stationon the JR Saikyo Line

Acquisition price(million yen)

773

266

289

1,569

740

838

Real estateappraisal value(million yen) (Note 1)

939

324

355

1,750

799

903

NOI yield (%) (Note 2)

6.2

6.4

6.5

5.8

5.5

5.4

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

RC/7F

Minna-no-ie
Omiya Yoshinocho

RC/4F

Minna-no-ie
Chuo-ku En’nami

RC/3F

Leasable area (m2)

2,674.37

1,349.39

1,411.78

5,057.07

1,800.03

1,963.03

Total leased area (m2)

2,674.37

1,349.39

1,411.78

5,057.07

1,800.03

1,963.03

Number of rooms (rooms)

50

33

50

155

33

51

Occupancy rate (%) (Note 5)

100.0

82.0

94.0

89.6

81.8

（Note 7）

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

Sawayaka Club Co.,Ltd.

Sawayaka Club Co.,Ltd.

Sawayaka Club Co.,
Ltd.

Super Court Co., Ltd.

17.6

17.6

17.6

22.2

Wisnet Co., Ltd.
19.8

Wisnet Co., Ltd.
26.9

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

Appraisal values are as of April 30, 2017.
(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
explanation of important matter by the number of rooms, rounded to one decimal place.
Figures for depreciation are actual figures of the 5th FP ended in April 30, 2017.
(Note 6) Remaining lease contract periods are as of April 30, 2017.
For description of structure, “S” refers to steel-framed structure and “RC” refers to(Note 7) Minna-no-ie chuo-ku En’nami has suspended business since January 2017, and thereinforced concrete structure.
number of residents as of the end of April 2017 is zero. It is scheduled to resume
2017
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or anyoperations
regulation inof September
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
SubwayApproximately 1.5km
from Okayama Stationon the JR Sanyo MainLine

Alpha Living
Okayama Korakuen

Alpha Living Takamatsu
Ekimae1-11-4, Hama, Naka-ku, 1-6, Nishiuchi-machi,
Takamatsu-shi,
Okayama-shi,
KagawaOkayama
Approximately 1.9km
from Okayama Stationon the JR Sanyo MainLine

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

Alpha Living
Takamatsu
Hyakkenmachi

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.

Acquisition price(million yen)

1,200

730

610

605

605

710

Real estateappraisal value(million yen) (Note 1)

1,330

789

672

641

627

741

NOI yield (%) (Note 2)

5.9

5.1

5.3

5.1

5.2

5.1

Depreciation(million yen) (Note 3)

8

7

4

6

6

5

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)

94.5

65.4

83.3

97.7

92.5

92.8

Silver Heights SapporoCo., Ltd.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Sompo Care Message
Inc.

18.6

18.2

18.2

18.2

18.2

9.9

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

Appraisal values are as of April 30, 2017.
(Note 5) Occupancy rates are obtained by dividing the number of residents indicated in the written
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
explanation of important matter by the number of rooms, rounded to one decimal place.
Figures for depreciation are actual figures of the 5th FP ended in April 30, 2017.
(Note 6) Remaining lease contract periods are as of April 30, 2017
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

43

Balance Sheets for 6th Fiscal Period Ended April 2017

The 5th FP
ActualAmount(million yen)

Cash and deposits in trust
Other current assets
Fixed Assets

AssetsTangible fixed assets
Buildings and others(including trust property)
Land and others(including trust property)

Intangible fixed assets

7.6%

Current Liabilities

2,489

Ratio

11.7%

Amount(million yen)

2,501

1,163

Operating account payables

24

55

436

431

Short-term loans payable

500

500

16

Current portion of long-termloans payable

1,800

1,800

Accounts payable – other75

55

Advances received

85

85

Other current liabilities

4

5

21
19,82793.0%

19,65892.4%

19,75792.7%

19,59392.1%

11,808

11,644

7,949

7,949

43
40

Other intangible fixedassets

2

Investments and other assets

27

Long-term prepaid
expenses
Total Assets

1,611

Amount(million yen)Ratio

The 6th FP
Actual

1,029

Leasehold rights and leasehold
rights in trust

Leasehold and security
deposits paid in trust

7.0%

Amount(million yen)

0.2%

0.1%

42

Fixed Liabilities

38.6%

8,230

7,500

7,500

40

Tenant leasehold and security
deposits

730

730

2

Total Liabilities

21
10

17

11

0.2%

8,230

Long-term loans payable10

21,315 100.0%

Liabilities

Cash and deposits

1,487

Ratio

The 5th FP
Actual0.1%

21,269 100.0%

Net Assets

Current Assets

The 6th FP
Actual

Ratio

11.8%

38.7%

10,72050.3%

10,731

50.5%

Unitholders’ equity (net)10,34848.5%

10,28848.4%

Unitholders’ equity

10,504

10,504

Deduction from unitholders’ equity

-155

-215

Unappropriated retained earnings

246

1.2%

249

1.2%

10,595

49.7%

10,538

49.5%

Total Net Assets
Total Liabilities and Net Assets

21,315 100.0%

21,269 100.0%

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

44

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

Ownership ratio of investment units by category
Category of unitholders

Number ofunits atthe end of
5th FP

Number ofunits atthe end of
6th FP

Increase/decr
ease from theprevious FP

Ratio at theend of 6th
FP*

No.

Name

Number of
Number of
Increase/decr
units held at units held atease from thethe end of 5th the end of 6th
previous FP
FP
FP

Ratio at theend of 6thFP*

Individual/others

35,82936,048219

48.30%

1

Daiwa Securities Group Inc.

7,600

0

7,600

10.18%

Financial institutions

23,18722,470-717

30.11%

2

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

5,602

-130

5,472

7.33%

Major city banks

0

0

0

0.00%

3

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

5,676

-340

5,336

7.15%

Regional banks

1,792

1,518

-274

2.03%

4

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

3,883

152

4,035

5.41%

Trust banks

17,72817,261-467

23.13%

5

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

1,873

-172

1,701

2.28%

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

Osaka Shinkin Bank

690

197

887

1.19%

Other financial
institutions

3,381

3,405

24

4.56%

8

THE BANK OF NEW YORKMELLON 140044

850

0

850

1.14%

Other domestic companies

12,146

12,404258

16.62%

9

Fukui Medical Credit Association

745

0

745

1.00%

Foreigners

2,439

2,624

185

3.52%

10

YONEZAWA SHINKIN BANK

700

0

700

0.94%

Securities companies

1,031

1,086

55

1.46%

Total

28,619-293

28,32637.95%

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

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

Name of IR Event

Location

July 2016• Daiwa J-REIT Festa 2016

Tokyo

July 2016• 3rd general meeting of unitholders• Briefing session on asset management for individual investors (4th FP)

Tokyo

November 2016

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

December 2016

• Special seminar for healthcare facility operators

Osaka

December 2016

• Financial results briefing for institutional investors (5th FP)

Tokyo

January 2017

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

Tokyo

February 2017

• TSE IR Festa 2017

Tokyo

June 2017（Plan）• Special seminar for healthcare facility operators

Fukuoka

Special seminar for healthcare facility operators（Osaka）

TSE IR Festa 2017

Indices that include NHIMonth / Year
September 2015

Name of Index
Thomson Reuters GPR / APREA Composite Index

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

46

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.

47

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>

AssetManagement

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

Asset Management Company

Sawayaka Club Co., Ltd.
Super Court Co., Ltd.
Nichiigakkan Company
Sompo Care Next Inc.
Cedar Co., Ltd.
Charm Care Corporation
Nihon Kaigo Iryo Center Co., Ltd.
Wisnet Co., Ltd.
Silver Heights Sapporo Co., Ltd.
Anabuki Medical Care Inc.
Sompo Care Message Inc.

<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.>

SponsorAdvisorSupport48
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 (1)Corporate Profile

Directors
As of May 31, 2017

Corporate name
Address

As of May 31, 2017

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

Hajime Imbe

Director (non-executive)

Mikita Komatsu

Director (non-executive)

Naoya Otani

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

10
Executive directors: 5 / 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 May 31, 2017
Daiwa Office Investment
Corporation

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

Daiwa Residential Private
Investment Corporation

Unlisted REIT focusing on residential properties
Asset size: approximately 100.5 billion yen(64 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.

49

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

President andRepresentative Director
Internal Control OfficeAcquisition and AssetManagement Division

Acquisition
Department

Origination
Department

Corporate Division

Private Fund Division

Asset
Management
Department

Private FundManagement
Department

Customer
Relations
Department

Finance
Department

Corporate
Planning
Department

Administration
Department

Office Investment Team

Office Management
Team

Finance Team

Residential Investment
Team

Residential
Management Team

Accounting Team

Healthcare
Investment Team

Healthcare
Management TeamManagement Team

Investment Planning
Team
Construction
Management Team

as of 31 May, 2017

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

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