As of June 19, 2018

Hopeful future
for Japan
Nippon Healthcare
Investment Corporation
Presentation Material for
The 8th Fiscal Period Ended April 2018
Securities code ： 3308

Contents
Disclaimer
Highlights of 8th Fiscal Period (Ended April 2018)3

Properties Renovated in the 8th Fiscal Period

Change of Asset Management Fee System

4

Continuous Evaluation of Operators and Monitoring System 22

Section 1
Operating Results for 8th Fiscal Period

Implementation of Monitoring and Relationships withOperators

23

Introduction of Operators

24
25

Operating Results for 8th Fiscal Period

7

History of Revisions to Nursing Care Fees

Forecast of Operating Results for 9th Fiscal Period
and 10th Fiscal Period
Distribution per Unit

8

Section 4

9

Section 2

21

Financial Status
Status of Interest-Bearing Liabilities(as of April 30, 2018)・・・・・・・・・・・・・・・・・・・・

External Growth
Change in Asset Size

11

Sourcing Route12

Section 3

27
Policy on Distributions in Excess of Earnings
28
Overview of the Unitholder Benefits Program・・・・・・・・・・・・・ 29
・・・・・・・・・・・・・・

Section 5
Portfolio Analysis

Environment Surrounding Healthcare Industry

Portfolio List (as of April, 2018)15

Status of Portfolio: Change in Occupancy Rates

16

Remaining Lease Contract Period of Each Property

17

Status of Portfolio: Fee Systems of Facilities

18

Status of Portfolio (as of April 30, 2018)19

Portfolio Resident Attributes (as of April 30, 2018)20

Surrounding Status of Healthcare Facilities :Progress of aging society

32

Market Size of Healthcare Facilities and Fee-based Homes
for the Elderly (by price)
33

Appendix

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

1Disclaimer

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

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

22

Highlights of 8th Fiscal Period (Ended April 2018)█<Management status>Average occupancy rate for the entire portfolio at the end of the 8th Fiscal Period was 91.2%, the highest level
since its listing (up 1.7% from the 7th Fiscal Period)Implemented renovation of interior and exterior finishing at some facilities for the purpose of promoting andstably maintaining occupancy (Verger Hirakata: 13.0 million yen, Charm Suite Ryokuchi Koen: 7.0 million yen,
etc.)



Operators’ rent-paying capacity remained unchanged from the 7th Fiscal Period at 1.5█<External growth>Continual property acquisitions utilizing sponsor’s bridge funds (approx. 10.0 billion yen)

█ <Financial status>Converted 1.8 billion yen of the existing debt loans with floating-rate to fixed-rate with concluding the interest-rate
swap agreementsLTV was 46.3%, ratio of fixed rates was 94.9% and average remaining loan period was 1.8 years

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

Change of Asset Management Fee System
Review of the asset management fee level and changes to the fee system to place weight to management performance
Management fee Ⅰ(based on assets under management)
Basis of the calculation

Management fee Ⅱ(based on property-related operating revenue)

Ratio（annual）

BeforeTotal Assets（Bool Value）

After

Total valuation amount（Appraisal value etc.）※Change from book value
to valuation amount basis

Basis of the calculation

Ratio

NOI

5.0%(Max)

Before0.3%(Max)No change
After

0.15%(Max)NOI

6.5%(Max)⇒Based on this change, total management fees for the 8th Fiscal period (Ended April 2018) would be decreased by 4.6
million yen (7.5% down). Please refer below for details.

Assumption of this change■■ Management fee Ⅰ ■■ Management fee Ⅱ
29

32

2017/10 Before(7th period)
After

38

18

29

31

2018/4 Before(8th period) After

38

17

30

31

Forecast

Before2018/10(9th period) After

39

18

30

31

Before
2019/4(10th period) After

39

17
0

10

20

30

40

50

Decreased
fee(Ratio)Increased
DPU(Ratio)- 4.8 Mil Yen（- 7.9％）+65 Yen(+1.6%)- 4.6 Mil Yen（- 7.5％）+62 Yen(+1.5%)- 4.6 Mil Yen（- 7.4％）+62 yen(+1.5%)- 4.4 Mil Yen（- 7.3％）+60 yen(+1.5%)

60 （Mil. yen）

(Note) The assumptions are based on the following provisions. 7th & 8th period: Before(Actual) After(recalculated for the full period). 9th (Before) & 10th (After) period: Forecasts
announced on June 18, 2018, both are based on the calculation for the full period. Management fee Ⅰ based on the assumption appraisal value would be the same as those of the end
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.
of 8th period. Please note that these forecasts and assumptions are based on certain provisions, so these may be different from actual figures.
NHI advises readers to make investment decisions at their own judgment.

4

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.

5Section 1 Operating Results

for the 8th Fiscal Period

Operating Results for 8th Fiscal Period
Actual results for the 8th Fiscal Period
7th FP(ended Oct. 2017)(results)(unit: million yen)
8th FP(ended Apr. 2018)(results)

Difference

Factor

22
697
424
101
195
273
0
27
21
245
244

22
697
424
100
198
273
1
27
21
247
246

+0
+0
-0
+2
+0
+1
-0
-0
+2
+2

74,632

74,632

-

4,124

4,163

+39

3,274

3,303

+29

850

860

+10

Depreciation per unit (yen)

2,624

2,657

Ratio of distribution in excess of earnings to
depreciation per unit

32.4%

32.4%

Number of properties owned at end of the fiscal period
Operating revenues
Operating expenses
Property-related expense (excluding depreciation)
Depreciation
Operating income
Non-operating revenues
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

Item
Depreciation
 Utility Charges+

2million yen

Increase+

2million yen

DecreaseRepair Cost-

3million yen

Repair Cost+

2million yen

Other Fees
 Depreciation
 Utility Charges-

2million yen

(Reference)

Comparison of forecast and actual results for 8th Fiscal Period
8th FP (ended Apr. 2018)(forecast)(Disclosed as of

Number of properties owned at end of the fiscal period
Operating revenues
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)

19 Dec. 2017)

8th FP(ended Apr. 2018)(results)

Difference

Factor

22
697
427
241

22
697
424
246

-0
-2
+4

4,100

4,163

+63

3,240

3,303

+63

860

860

-

Item

Increase

Decrease

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.

1million yen
1million yen

7Forecast of Operating Results for 9th Fiscal Period and 10th Fiscal Period
Factor

Forecast of the 9th fiscal period

Item
Asset Custody and Admin. Service Fees
Depreciation
 Advertising Expenses

Increase

Decrease

Repair Cost+++

7million yen-

9million yen

1million yen
1million yen

9th FP(ending Oct. 2018)(forecast)
Number of investment units issued and outstandingat the end of the fiscal period (units)
Distribution per unit (yen)(including distribution in excess of earnings)
Distribution per unit (excluding distribution in excess ofearnings)

Distribution per unit in excess of earnings

Difference fromthe 8th FP

74,632

-

4,100

-63

3,230

-73

870

+10

(Reference)
Depreciation per unit (yen)2,680

Ratio of distribution in excess of earnings to depreciation
per unit

32.5%

Factor

Forecast of the 10th fiscal period

Increase

Difference fromthe 9th FP

22

-

697

+0

423

-3

Property-related expenses (excluding depreciation)

95+4

Depreciation

201

+1

Operating income

274

+4

-

-

Number of properties ow ned at end of the fiscal period

Operating revenues
Operating expenses

Non-operating revenues

Repair Cost
Other Fees
 Depreciation
 Asset Custody and Admin. Service Fees Asset Management Fee Utility Charges
(unit: million yen)
10th FP(ending Apr. 2019)(forecast)

Item

Decrease



+
+
+
-

7million yen
4million yen
1million yen
7million yen
5million yen
2million yen

10th FP(ending Apr. 2019)(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

74,632

+0

4,160

+60

3,290

+60

870

+0

Non-operating expense

27-0Interest expense

21-0(Reference)

246

+4

Depreciation per unit (yen)

2,705

+4

Ratio of distribution in excess of earnings to depreciation
per unit

32.2%

Ordinary income
Net income

245

Difference fromthe 9th FP

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

8

Distribution per Unit
Distribution per Unit
（YEN）

5,000

4,067

4,000

3,471
3,000

810

768

4,295
800

4,106

4,143

4,124

4,163

4,100

4,160

800

800

850

860

870

870

3,306

3,343

3,274

3,303

3,230

3,290

Distribution
in excess of
Earnings
per unit

2,000

2,661
1,000

Distribution
per unit(excluding
distribution inexcess of
earnings)

3,299

3,495

0
End of the
End of the
End of the
End of the
End of the
End of the
End of the
2nd FP
3rd FP
4th FP
5th FP
6th FP
7th FP
8th FP(ended(ended(ended(ended(ended(ended(endedApril 2015) October 2015) April 2016) October 2016) April 2017) October 2017) April 2018)

Forecast of Forecast ofthethe
9th FP
10th FP(ending(ending
October 2018) April 2019)

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 2

External GrowthChange in Asset Size
Continuous external growth through acquisition of carefully selected properties
Listing asJapan’s first
healthcare REIT

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

Further expansion of asset size through formation of bridgefunds, etc. utilizing sponsor support (Several preferential
negotiation rights in the Three Major Metropolitan Areas
including Tokyo of around 10 billion yen have been acquired.)(million yen)

30,00025,00020,00018,60819,31819,31819,31819,31816,058
Total of Total of Total of
Total of Total of
22
22
22
22
21
properties
properties
properties
properties
Total of properties
Total of17
10,00014
properties
properties
15,00013,2805,000

0Listing

End of the 3rd FP End of the 4th FP End of the 5th FP End of the 6th FP End of the 7th FP End of the 8th FP(ended October (ended April 2016) (ended October (ended April 2017) (ended October (ended April 2018)
2015)
2016)
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.

11

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

4 properties
Acquisition price: 2,550 million yen

・ Properties sold by developer

Acquired properties in
the Three Major
Metropolitan Areas
including Tokyo throughformation of bridgefunds, etc. by sponsors(Preferential negotiationrights: acquired around10 billion yen)group which owns operators
・ Exclusive needs for facility
management

Sponsor’s
bridge funds

Daiwa Securities
Group Inc.
2 properties
1,578 million yen

14properties
13,280
millionyen

Change ofowners15 properties
13,990 million
yenChange of owners

Approximately
10.0 billion yen

Advisor2 properties
Acquisition price:
1,578 million yen• Properties introduced by
the sponsor group• Needs for asset
management from owners

6th FP ~Sompo no ie
Nishitanabeekimae
Acquisition price:
710 million yen• Needs for asset
management fromownersProactively discussing
development properties
in addition to information
on existing facilities
obtained from thesourcing routes

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

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.

13Section 3

Portfolio Analysis

Portfolio List (as of April, 2018)
Acquisition price(Note 2)No.
Acquisition period(Note 1)

Property nameFacility typeOperator

LocationPrice(millionyen)

Occupancy rates (%)

Appraisal Number of
rooms
value
Share of (million yen) (rooms)
portfolio(Note 4)(Note 3)

7th FP
8th FP
Difference（Note5） （Note6）

(%)

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

98.4

98.4

-0.0

2
2

2nd Fiscal Period

Super Court JR Nara-Ekimae

Residential-type fee-based homes for the elderly

Super Court

1,569

8.1

1,750

155

86.4

93.5

7.1

3
3

1st Fiscal Period

Sompo Care LAVIERE Hiroshima Hikarigaoka

Fee-based homes for the elderly with nursing care

Hiroshima City, Hiroshima

960

5.0

1,230

80

80.0

97.5

17.5

Sompo Care Next

Nara City, Nara

4
4

1st Fiscal Period

Sompo Care LAVIERE Sagamihara Chuo

Fee-based homes for the elderly with nursing care

Sagamihara City, Kanagawa

1,170

6.1

1,780

80

67.5

71.2

3.7

5
5

2nd Fiscal Period

Sompo Care LAVIERE Kinugasayama Koen

Fee-based homes for the elderly with nursing care

Yokosuka City, Kanagawa

1,839

9.5

2,050

104

86.5

90.3

3.8

6
6

1st Fiscal Period

Sawayaka Kaikyokan

Fee-based homes for the elderly with nursing care

Kitakyushu City, Fukuoka

630

3.3

898

65

93.8

98.4

4.6

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

100.0

0.0

8
8

1st Fiscal Period

Sawayaka Heart Life Nishikyogoku

Residential-type fee-based homes for the elderly

Kyoto City, Kyoto

750

3.9

1,140

84

100.0

98.8

-1.2

Sawayaka Club99

2nd Fiscal Period

Sawayaka Hinodekan

Fee-based homes for the elderly with nursing care

Niigata City, Niigata

773

4.0

920

50

100.0

100.0

0.0

10
10

2nd Fiscal Period

Sawayaka Riverside Kurinoki

Residential-type fee-based homes for the elderly

Niigata City, Niigata

266

1.4

323

33

92.3

94.8

2.5

11
11

2nd Fiscal Period

Sawayaka Obatake Sanbankan

Residential-type fee-based homes for the elderly

Kitakyushu City, Fukuoka

289

1.5

355

50

92.0

100.0

8.0

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

341

52

100.0

100.0

0.0

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

99.0

98.0

-1.0

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

68.2

70.0

1.8

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

777

33

78.7

93.9

15.2

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

860

51

58.8

64.7

5.9

17
17

3rd Fiscal Period

Silver Heights Hitsujigaoka No.3

Fee-based homes for the elderly with nursing care

Sapporo City, Hokkaido

1,200

6.2

1,340

109

90.0

93.6

3.6

18
18

4th Fiscal Period

Alpha Living Okayama Nishigawa Ryokudokoen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

730

3.8

787

53

81.8

87.2

5.4

19
19

4th Fiscal Period

Alpha Living Okayama Korakuen

Residential-type fee-based homes for the elderly

Okayama City, Okayama

610

3.2

671

45

95.8

89.5

-6.3

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

88.6

90.9

2.3

Takamatsu City, Kagawa

605

3.1

626

50

88.8

85.1

-3.7

Osaka City, Osaka

710

3.7

739

42

97.6

97.6

0.0

19,318100.0

24,121

1,598

-

-

21
21

4th Fiscal Period

Alpha Living Takamatsu Hyakkenmachi

Elderly housing with supportive services

22
22

5th Fiscal Period

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

11 operators(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)22 properties

WisnetSilver Heights Sapporo

Anabuki Medical Care

Sompo Care(Note 7)

Total

Red numbers refer to Three major metropolitan areas and blue numbers to Core cities. The background colors for Property name and Facility type columns indicate
types of facilities; orange for fee-based homes for the elderly with nursing care, blue for residential-type fee-based homes for the elderly and yellow-green for
elderly housing with supportive services.
“Acquisition price” is excluding consumption tax, local consumption tax and the various expenses required for the acquisition. “Share of portfolio” is the respective
acquisition price expressed as a percentage of the total of the acquisition prices, rounded to one decimal place. Therefore the total of “Share of portfolio” may bedifferent from the figure indicated in “Total.”“Appraisal value” is as of April 30, 2018.
“Number of rooms” is the figure indicated in the written explanation of important matters pertaining to the fee-based home for the elderly provided by the operator.
“Occupancy rate” is obtained by dividing the number of residents indicated in the written explanation of important matter received in December 2017 from operators
by the resident capacity, rounded down to one decimal place.
“Occupancy rate” is obtained by dividing the number of residents indicated in the written explanation of important matters received in May 2018 from operators by
the resident capacity, rounded down to one decimal place.
The corporate name of Sompo Care Message Inc. was changed to Sompo Care Inc. on April 1, 2018.

<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.

15

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

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

91.2％

(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. 2018

Mar. 2018

Feb. 2018

Jan. 2018

Dec. 2017

Nov. 2017

Oct. 2017

Sep. 2017

Aug. 2017

Jul. 2017

Jun. 2017

May. 2017

Apr. 2017

Feb. 2017

Mar. 2017

Jan. 2017

Dec. 2016

Nov. 2016

Oct. 2016

Sep. 2016

Jul. 2016

Aug. 2016

Jun. 2016

May. 2016

Apr. 2016

Mar. 2016

Feb. 2016

Jan. 2016

Dec. 2015

Nov. 2015

Oct. 2015

Sep. 2015

Aug. 2015

Jul. 2015

Jun. 2015

May. 2015

Apr. 2015

0Mar. 2015

0.0%

Feb. 2015

200

Jan. 2015

10.0%

Dec. 2014

400

Nov. 2014

20.0%

Stable occupancy rates
 The overall occupancy rate rose by 1.7% from 89.5% at the end of October 2017 to 91.2% at the end of April 2018.
 The period average rose by 3.5% from 87.3% for the 7th Fiscal Period to 90.8% for the 8th Fiscal Period.
(Note) Occupancy rates are obtained by dividing the number of residents based on interviews with all facilities, by resident capacity.

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

16

Remaining Lease Contract Period of Each Property(Note) “Remaining Lease Contract Period” indicates period remaining as of April 30, 2018. “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.

17

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

(Note2)

Charm Sweet Ryokuchi Koen (One-time entrance fee plan / Former monthly fee 157,800 - 203,800 yen, Non One-time entrance fee plan / Former monthly fee 237,800 - 243,800 yen)revised fees in February 2018, Mina-no-ie Omiya Yoshinocho (Former monthly fee 163,207 yen) and Mina-no-ie Chuo-ku En’nami (Former monthly fee 158,800 yen) revised fees in April
2018, Alpha Living Takamatsu Ekimae (Former monthly fee 149,000 – 185,000 yen) revised fees in November 2017 and; Alpha Living Takamatsu Hyakkenmachi (Former monthly fee
This document
is notmaterialyen)
disclosedin compliancewith the Financial Instruments
and Exchange
Actyen)or anyregulation
similarnature, nor is it intended for the purposes of solicitation.
160,000– 222,000
and Sompo
no ie Nishitanabeekimae(Former monthly
fee 175,000
revisedfees inofApril
2018.
NHI advises readers to make investment decisions at their own judgment.

18

Status of Portfolio (as of April 30, 2018)
Rent-Paying Capacity

1.2x or less
27.8%

More than
2.0x
18.0%

Rent-Paying
Capacity (Note 1)
Average 1.5x
(On appraisal basis:
Average 1.7x)More than 1.2x,
but 1.5x or less
21.2%

More than 1.5x,
but 2.0x or less
23.0%

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

Proportion of Nursing Care Fee

Proportion of Entrance Fee
Amortization Income

More than 60%,
but 70% or less
5.6%
More than
5%, but
15% or less
39.4%
Proportion of
Nursing
Care Fee(Note 2)
Average 50.2%

50% or less
37.4%

Proportion of
Entrance Fee
Amortization
Income(Note 3)
Average 3.8%

5% or less
60.6%

More than 50%,
but 60% or less
57.0%

(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 Aptil 2017 to March 2018 disclosed by the respective operator. However, data for Nichii Care Center
Fukushima Omori are based on information on business income and expenditures from January 2017 to December 2017; and for Silver Heights Hitsujigaoka No.3 from March2017 to February 2018.

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

19

Portfolio Resident Attributes (as of April 30, 2018)
Gender(Note1)

Age Group(Note2)

Level of Requiring Nursing Care or Support(Note 3)
Independent Other
Requiring
1.0%
0.2% Requiring nursing
support level 1
care level 5

Under 65
65 years years
or over, 1.8%
but under
75 years

Requiring support
level 2

7.4%

Male
28.4%

Female
71.6%

5.9%

5.2%

75 yearsor over,but under
85 years

25.8%

8.8%

85 yearsor over

Average
Requiring nursing
requiredcare level 1
level of23.7%
nursing care
2.3

64.9%
Requiring nursing
care level 2

Requiring
nursingcare level 4

15.7%

Requiring
nursingcare level 3

17.9%

21.6%
(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 (April 2018) provided by each operator. All percentage figures are rounded to one decimal
place. “Average required level of nursing care” is rounded down to the first decimal place.

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

20

Properties Renovated in the 8th Fiscal Period
Verger Hirakata (Acquisition price: 950 million yen)Charm Suite Ryokuchi Koen (Acquisition price: 1,950 million yen)

 Site Features

 Site Features

Located approximately 1.4km from
Ryokuchi Koen Station on the KitaOsaka Kyuko Railway Namboku Line

Located approximately 3.5km
from Kuzuha Station on the
Keihan Main Line Property Features

 Property Features

The Property has spacious commonuse areas. In addition to a cafeteria oneach floor, a hall has been establishedon the facility’s highest floor, which is
being used for activities, etc. In
addition, a fountain and flowerbed havebeen set up in the entrance lobby,
giving it a sense of luxury.

The Property provides
standard size private rooms forfacilities designed for people
requiring long-term care, andthe rooms are equipped withsinks and toilets.

Renovation of exterior walls(Construction amount: 13 million yen)

Renovation of exterior walls and rooftop waterproofing repair
work (Construction amount: 7 million yen)
Rooftop waterproofing repair work

Before construction work

After construction work

Before construction work

After construction work

“Verger Hirakata” and “Charm Suite Ryokuchi Koen” were constructed 10 years ago and repair work for maintaining the esthetic appearances have been
implemented in order to stay 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.

21

Continuous Evaluation of Operators and Monitoring System
Business operation cycle

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

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

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

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

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

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

Qualitative Perspective• The operator’s attitude towards information disclosure

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

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

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

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

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

22

Implementation of Monitoring and Relationships with Operators
On-site monitoring█ Super Court JR Nara-Ekimae█ Sawayaka Hinodekan■Facility visit and interview（April 2018）■Facility visit and interview（March 2018）

On-site monitoring█ Alpha Living
Okayama Korakuen█■Facility visit and interview（April 2018）■Facility visit and interview（April 2018）

Sompo no ie Nishitanabeekimae█ Nichii Care Center Fukushima Omori█ Silver Heights Hitsujigaoka No.3

■Facility visit and interview（April 2018）■Facility visit and interview（April 2018）

Relationships with operators█ Minna-no-ie Chuo-ku En’nami■Work experience at the facility (March 2018): For interactions withfacility employees and residents

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

23

Introduction of Operators
Highly reliable operators
Operator

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

Nichii Gakkan

425

13,822

Sompo Care

311

17,305

Wisnet125

3,497

Sompo Care Next

117

8,826

Sawayaka Club

80

4,735

Super Court

48

3,209

Established

August, 1973

Attributes

Listed on the first section of the Tokyo Stock
Exchange

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

May, 1995－

Charm Care Corporation

46

3,214

August, 1984

Listed on JASDAQ Standard on the Tokyo Stock
Exchange

Cedar

39

2,209

April, 1981

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

21

908

October, 1997

Silver Heights Sapporo(Note1)(Note2)

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, 2018).
Operators are listed in order of the number of facilities they manage.

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

24

History of Revisions to Nursing Care Fees
Time of revision
FY 2005 revision(Enforced in October
2005)

Main points of revision
 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

FY 2006 revision

FY 2009 revision

FY 2012 revision
FY 2014 revision

Rate of revision-0.5%【-2.4%】

Promotion of nursing care prevention and rehabilitation
・Changing prevention benefits provision from piecework payment to comprehension payment bymonth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 to thoserequiring high level of cares, etc.

【】: Rate of revision including
revision in FY2005

 Improvement in working conditions of care providers+3.0%

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

[At-home：-0.1%] 【-1.0%】[Facility：±0.0%] 【-4.0%】[At-home：＋1.7%][Facility：＋1.3%]

 Securement of improved working conditions for care staff and promotion of+1.2%

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[At-home：＋1.0%]

 Response to increased burden due to the consumption tax hike

＋0.63％[Facility：＋0.2%]

 Initiatives for building a “community comprehensive care system”

FY 2015 revision

FY 2017 revisionFurther reinforcement of care for those requiring medium- to high- levels of nursing care and those withdementia
Promotion of securing care staff
Enhancement of appropriateness of service assessment and establishment of efficient system forproviding services-2.27%

 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％[At-home：-1.42%][Facility：-0.85%][At-home：＋0.72％][Facility：＋0.42％]

 Promotion of establishing a system to provide high-quality and efficient long-term care service

FY 2018 revisionPromotion of community comprehensive care system
Realization of high-quality long-term care service contributing to self-reliance and prevention ofdeterioration in condition
Securement of diversified personnel and improvement of productivity
Securement of stability and sustainability of the system through enhancement of appropriateness andfocus in long-term care service+0.54％

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Section 4

Financial Status

Status of Interest-Bearing Liabilities (as of April 30, 2018)
Status of Interest-Bearing Liabilities (as of April 30, 2018)
Term
Short-term

Balance
Interest(million yen)
500 Floating

LenderMizuho Bank

Current Sumitomo Mitsui Trust Bank
Portion of The Dai-ichi Life InsuranceLong-term Shinkin Central Bank(**)

0.431%

500

0.431%

Fixed

0.293%

(**)

1,200

0.532%

(**)

1,000

0.532%

700

0.532%

500

0.524%

500

0.524%

Mizuho Trust & Banking(**)

Mizuho Bank (**)
Mizuho Trust & Banking
Long-term The Musashino Bank

(**)

(**)

500

Resona Bank (**)
Sumitomo Mitsui Trust Bank
Mizuho Bank

1,200
400

Resona Bank
Mizuho Bank(**)

Repayment
deadline
Tibor+0.300% September 29, 2017 September 28, 2018
Interest

(**)

(**)

October 15, 2015
November 5, 2014

October 31, 2019

June 1, 2015

May 29, 2020

October 15, 2015

October 30, 2020

500

0.138%

April 28, 2016

April 30, 2020

0.402%

500

0.265%(**)

500

0.365%-

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

46.3％

October 31, 2018

0.474%

9,800

LTV(Note)

Averageremaining
period (Note)

0.524%Fixed

800

The Musashino Bank
Total

November 5, 2014

500

(**)

Shinkin Central Bank

Drawdown-

1.8 years

October 31, 2022
October 30, 2020

October 31, 2017

April 28, 2022--

Ratio of Fixed Rates andFloating Rates(Note) LTV and average remaining period indicate figures
calculated as of April 30, 2018, rounded to the firstdecimal place. LTV is calculated based on total assets.

Repayment Schedule(million yen)
3,000

Ratio of floating rate

5.1%
2,500

26.5%

2,000
1,500

Long-termloans payable

73.5%

1,000

Ratio of fixed rate

500

94.9%
0

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

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

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

27

Policy on Distributions in Excess of Earnings

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

Implement distributions in excess ofearnings every accounting period with

High depreciation ratio

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

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

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

RentalincomeDepreciation

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

Distributions inexcess of earnings



Incomebefore taxes

Distributions(income)Distributions
tounitholders

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

28

Overview of the Unitholder Benefits Program

With the cooperation ofoperators who are the tenants,
the unitholder benefits
program will be offered
to unitholders as of the end of
fiscal period ended April 2018.

<COCO Juku>
 Free enrollment<New York University-Professional Departmentof American Language Institute Tokyo school>
 Free enrollment and discount from tuition<Nichii Life>
 Discount voucher for house keeping,childcare and long-term care service

 Discount coupon for the initial
lump sum payment (5%discount) Free voucher for an overnight
trial stay (with meals) Free voucher for a facility tour
(with lunch provided) Discount coupon for the initial
lump sum payment (200,000 yen
discount from the initial lump sum
payment, or in the case of the planof 0 yen initial lump sum payment,
discount the amount equivalent to
the monthly rent) Free voucher for an overnight trial
stay (with meals) Free voucher for an overnight
trial stay (with meals) Free voucher for a one-day
facility tour (with lunch
provided) Furniture presented to the newresident for the below “Facilities
Available”(chosen from the catalog Anabuki
Medical Care provides)(worth 50,000 yen excluding tax, in
excess of 50,000 yen the difference shallbe paid by the resident, can also choose
two or more pieces of furniture if it iswithin 50,000 yen)<For the contract of lump sum payment plan> Discount from the initial lump sum payment(200,000 yen or 3% discount from the initial
lump sum payment, whichever is thegreater)<For the contract of monthly payment plan> From the monthly payment, persistent
discount of 3% of the amount equivalent to
the monthly rent (until the end of thecontract term) Free one-day facility tour (with lunch
provided)

 10% discount coupon for the
first monthly payment
 Free voucher for an overnight
trial stay (with meals) Free voucher for a one-day
facility tour (with lunch
provided) Discount on occupancy
expenses (discount of 2
month’s rent of the facility
upon moving in) Free voucher for an overnight
trial stay (with meals) Free voucher for an overnight trial stay(with meals) one-time-only Free voucher for a facility tour (withlunch provided) one-time-only 50,000 yen cash back for the monthly
payment for the new resident(one-time-only, need to stay more than
three months after moving into the facility)

 Nursing homes “Sompo no ie”
From the monthly payment, discount of the amountequivalent to 1 month’s rent and maintenance fees of theavailable facility
Elderly housing with supportive services“Sompo no ie S”
From the monthly payment, discount of the amountequivalent to 1 month’s rent, common area fees and life
support services fees of the available facilityThis document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

29

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.

30Section 5

Environment Surrounding
Healthcare Industry

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

14,000

Actual figures

12,00010,000
8,000
2,979

3,012

2,843

2,553

2,515

2,722

2,751

2,603

(％)

Estimatedfigures

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

29.1 30.3

23.0

20.2

36.1
1,2041,129
31.6 33.4

1,073

39.9
37.7 38.8 39.4

939

861

30.0
791

700

17.9

600

12.9

6.1
229.0

31.0

46.0

74.2

男性
Male

105.1

138.6

2010年

94.8
23.3

340.5

174.2

2000年

131.3

68.8
19.3

281.4

2005年

5.2

1995年

4.6

1990年

4.3

9.7

11.1

女性
Female

411.9

188.9

2015年

8.0

1985年

0

男性
Male

15.0
10.0
5.0
0.0

2060年

2055年

2050年

2045年

2040年

2035年

2025年

2030年
22.6

23.1

13.9

14.6

15.4

450.6

217.3

471.0

229.6

2025年

12.9
11.2

1980年

100

21.9

2020年

14.7

300
200

21.3

(%)

16.2

500
400

19.0

20.3

20.0

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

Estimatedfigures

Actual figures

25.0

女性
Female

486.5

243.3

23.4

16.3
501.4

260.8

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

2035年

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

2020年

2015年

2010年

2005年

0-14
0～14歳
years old

15-64
15～64歳
years old

2030年

65-74
65～74歳
years old

2000年

1995年

1990年

1985年

1980年

1975年

1970年

1965年

1960年

1955年

1950年

75 years
75歳以上
or older

40.0
35.0

1,012

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

45.0

(Source) Cabinet Office “White Paper on Aging Society 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.

32

Market Size of Healthcare Facilities and Fee-based Homes
for the Elderly (by price)
Market size of fee-based homes for the elderly and elderly housing with supportive services is 8 trillion yen, 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) (as of June 2016)

Market size of healthcare facilities（as of Oct. 2017）
3 types of facilities
covered by nursing careinsurance services

Elderly housingwith supportive services
2,329.8 bil. yen（10.0％）

High

12,232.7 bil. yen（52.5％）

Zone of
Owned properties

Fee-based homes
for the elderly

5,987.0 bil. yen（25.7％）

Group Homes
2,740.9 bil. yen（11.8％）

14.5 billion yen（1,236 rooms）

500 thousand
yen/month

Price (assumed monthly fees)

Total
23,290.3
billion yen

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.

33

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.

34

Appendix

Portfolio Map (as of April 30, 2018)
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.

36

Introduction of Operators (1)Company name

Nichii Gakkan Company

Company name

Sawayaka Club Co., Ltd.

Head office

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

Head office

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

Representative director Representative director, Fumiharu Uchiyama

Representative director Chairman, President and CEO, Nobusuke Mori
Established

August 2, 1973

Capital11,933 million yen

Attributes(listed market)

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

Principal businesses

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

Established

December 1, 2004

Capital

200 million yen

Attributes(listed market)

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

Principal businesses

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

Parent company

Uchiyama Holdings Co., Ltd.

Nichii Care Center Fukushima Omori
Sawayaka Hinodekan
Company name

Sompo Care Next Inc.

Head office

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

Established

November 11, 1992

Capital

5,095 million yen

Attributes(listed market)

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

Principal businesses

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

Parent company

Sompo Holdings, Inc.

Sompo Care LAVIERE
Hiroshima Hikarigaoka

Sawayaka Kaikyokan

シダー

Representative director Representative director, Ken Endo

Sompo Care LAVIERE
Kinugasayama Koen

Sawayaka Obatake Sanbankan Sawayaka Meisuikan

Company name

Cedar Co., Ltd.

Head office

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

Representative director Representative director, Takayasu Zakoda
Established

April 25, 1981

Capital

432 million yen

Attributes(listed market)

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

Principal businesses

Sompo Care LAVIERE
Sagamihara Chuo

La’nassica Arakogawa

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

37

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.

38

Introduction of Operators (3)Company nameHead office

Silver Heights Sapporo Co., Ltd.

Company name

Sompo Care Inc.

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

Head office

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

Representative director Representative director, Hirofumi Kaneko

Representative director President, Ken Endo

Established

December 1961

EstablishedMay 1997

Capital50 million yen

Capital3,925 million yen

Attributes(listed market)

Unlisted company

Attributes(listed market)

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

Principal businesses

Principal businesses

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

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

Parent company

Sompo Holdings Inc.

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

Head office2-8, Togiyamachi, Takamatsu, Kagawa

Representative director Representative director, Yoshihisa Otani
Established

June 2009

Capital

80 million yen

Attributes(listed market)

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

Principal businesses

Alpha Living Okayama
Nishigawa
Ryokudokoen

Alpha Living Okayama Korakuen

Alpha Living Takamatsu
EkimaeAlpha Living
Takamatsu
Hyakkenmachi

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

39

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

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

Other housing for the elderly
Number of
facilities
133

Total (Note 2)

Number of
rooms
7,744

Number of
facilities
448

Number ofrooms
26,4212 Company A

251

13,338

55

3,224

3

159

311

16,7393 Nichiigakkan Co., Ltd.

139

8,473

2

100

6

238

425

13,7934 Company B

125

7,912

43

2,705

-

-

168

10,6175 Company C

68

5,568

32

2,940

-

-

101

8,520

6 Company D

17

1147

9

174

15

321

165

7,739

7 Company E

39

2283

60

3821

1

81

105

6,239

8 Company F

9

630

1

26

8

150

272

5,692

9 Company G

73

4,651

5

386

4

191

92

5,457

10 Company H

8

228

8

197

90

4911

109

5,381

11 Company I

18

1,691

14

1097

2

163

51

4,929

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

43

3,146

15

921

-

-

80

4,823

13 Company J

34

1,697

3

106

92

3011

129

4,814

14 Company K

50

3,525

8

467

5

273

68

4,373

15 Company L

13

3,533

43

824

-

-

56

4,357

16 ALSOK Group (Note 5)

46

2,165

4

148

6

215

139

4,192

17 Company M

38

1,759

7

165

8

293

158

4,156

18 Company N

27

2127

-

-

14

1,073

73

3,794

19 Company O

3

290

-

-

1

20

21

3,510

20 Company P

-

-

-

-

108

3,357

108

3,357

21 Super Court Co., Ltd.

16

1,037

27

1,958

1

59

44

3,054

22 Charm Care Corporation

36

2511

3

280

-

-

39

2,791

23 Company Q

3

111

4

102

5

192

59

2,732

24 Company R

26

1,457

-

-

-

-

92

2,663

25 Company S

21

2052

-

-

6

494

28

2,573

26 Company T

5

379

23

2016

2

166

30

2,561

27 Company U

7

290

8

182

6

175

63

2,456

28 Company V

20

1596

9

479

5

296

39

2,443

29 Cedar Co., Ltd.

41

2,370

-

-

-

-

44

2,415

30 Company W

7

2,183

-

-

-

-

7

2,183

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

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

40

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.

41

Appraisal Value at End of Fiscal Period (as of April 30, 2018)
End of 8th FP

End of 7th FP

Overview of appraisal report
Property nameAppraiser

Appraisalvalue

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

DCF method

Cap rate

Price

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

Appraisal
NOI(million yen)Appraisal
value

Difference(End of 8th
FP - End of
7th FP)(million yen) (million yen)

Nichii Care Center Fukushima Omori

Japan Real Estate Institute

341

344

5.7

338

5.5

5.9

21

353

-12

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

1,780

1,800

4.8

1,770

4.6

5.0

88

1,750

30

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

898

907

5.3

889

5.1

5.5

50

899

-1

Saw ayaka Meisuikan

Japan Real Estate Institute

813

819

5.3

806

5.1

5.5

47

813

-

Saw ayaka Heart Life Nishikyogoku

Daiw a Real Estate Appraisal

1,140

1,150

5.2

1,130

5.0

5.4

60

1,190

-50

Verger Hirakata

Daiw a Real Estate Appraisal

1,590

1,610

5.2

1,580

5.0

5.4

85

1,600

-10

Sompo Care LAVIERE Kinugasayama Koen

The Tanizaw a Sōgō Appraisal

2,050

2,080

4.8

2,040

4.9

5.0

100

2,060

-10

La'nassica Arakogaw a

The Tanizaw a Sōgō Appraisal

1,430

1,440

5.1

1,420

5.2

5.3

74

1,430

-

Saw ayaka Hinodekan

Daiw a Real Estate Appraisal

920

932

5.0

915

4.8

5.2

47

921

-1

Saw ayaka Riverside Kurinoki

Daiw a Real Estate Appraisal

323

329

5.0

321

4.8

5.2

17

324

-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

777

787

4.9

773

5.0

5.1

39

779

-2

Minna-no-ie Chuo-ku En’nami

Japan Real Estate Institute

860

870

4.9

849

4.7

5.1

44

859

1

Silver Heights Hitsujigaoka No.3

Daiw a Real Estate Appraisal

1,340

1,350

4.9

1,330

4.7

5.1

70

1,340

-

Alpha Living Okayama Nishigawa Ryokudokoen

Daiw a Real Estate Appraisal

787

801

4.5

781

4.3

4.7

37

789

-2

Alpha Living Okayama Korakuen

Daiw a Real Estate Appraisal

671

684

4.6

666

4.4

4.8

32

672

-1

Alpha Living Takamatsu Ekimae

Daiw a Real Estate Appraisal

641

652

4.6

636

4.4

4.8

30

641

-

Alpha Living Takamatsu Hyakkenmachi

Daiw a Real Estate Appraisal

626

633

4.7

623

4.5

4.9

31

628

-2

Sompo no ie Nishitanabeekimae

The Tanizaw a Sōgō Appraisal

739

748

4.7

735

4.8

4.9

36

741

-2

24,121

24,406-23,945

-

-

1,241

24,184-63

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.

42

Portfolio List (1)Property nameLocation(residential address)

AccessNichii Care Center
Fukushima Omori

Sompo Care LAVIERE
Hiroshima Hikarigaoka

Sompo Care LAVIERE
Sagamihara Chuo

21-3 Omori Ojibouchi,
Fukushima-shi, Fukushima

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

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

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

Charm Sweet
Ryokuchi Koen

Sawayaka Kaikyokan

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

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

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

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

Acquisition price(million yen)

265

960

1,170

1,950

630

Real estateappraisal value(million yen) (Note 1)

341

1,230

1,780

3,060

898

NOI yield (%) (Note 2)

8.3

7.2

7.6

7.4

8.0

Depreciation(million yen) (Note 3)

5

10

10

15

7

Structure / floors (Note 4)

S/3F

RC/7F

RC/5F

RC/6F

RC/B1・5F

Leasable area (m2)

1,964.68

4,133.82

3,732.95

5,329.73

2,694.42

Total leased area (m2)

1,964.68

4,133.82

3,732.95

5,329.73

2,694.42

Number of rooms (rooms)

52

80

80

128

65

Occupancy rate (%) (Note 5)

100.0

97.5

71.2

98.4

98.4

Charm Care Corporation

Sawayaka Club Co., Ltd.

20.3

15.9

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

Nichii Gakkan Company

Sompo Care Next Inc.

15.9

Appraisal values are as of April 30, 2018.
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
Figures for depreciation are actual figures of the 8th FP ended in April 30, 2018.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

15.9

Sompo Care Next Inc.
15.9

(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, 2018.

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

43

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

1,140

1,590

2,050

1,430

NOI yield (%) (Note 2)

8.1

8.1

9.0

5.5

5.8

Depreciation(million yen) (Note 3)

7

6

10

16

17

Structure / floors (Note 4)

RC/6F

RC/B1・6F

RC/5F

S/4F

RC/B1・5F

Leasable area (m2)

4,553.67

2,459.19

2,925.25

4,265.88

3,590.40

Total leased area (m2)

4,553.67

2,459.19

2,925.25

4,265.88

3,590.40

Number of rooms (rooms)

87

84

104

104

100

Occupancy rate (%) (Note 5)

100.0

98.8

70.0

90.3

98.0

Sawayaka Club Co., Ltd.

Sawayaka Club Co., Ltd.

15.9

15.9

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

Appraisal values are as of April 30, 2018.
NOI yields are calculated by dividing the appraisal NOI by the acquisition price.
Figures for depreciation are actual figures of the 8th FP ended in April 30, 2018.
For description of structure, “S” refers to steel-framed structure and “RC” refers to
reinforced concrete structure.

Nihon Kaigo
Iryo Center Co., Ltd.
15.9

Sompo Care Next Inc.

Cedar Co., Ltd.

16.4

9.9

(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, 2018.

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

44

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)

920

323

355

1,750

777

860

NOI yield (%) (Note 2)

6.2

6.4

6.5

5.8

5.3

5.3

Depreciation(million yen) (Note 3)

8

3

4

17

7

9

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

94.8

100.0

93.5

93.9

64.7

Sawayaka Club Co.,Ltd.

Sawayaka Club Co.,Ltd.

Sawayaka Club Co.,
Ltd.

Super Court Co., Ltd.

16.6

16.6

16.6

21.2

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

Wisnet Co., Ltd.
18.8

Wisnet Co., Ltd.
25.9

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

Appraisal values are as of April 30, 2018.
(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 8th FP ended in April 30, 2018.
(Note 6) Remaining lease contract periods are as of April 30, 2018.
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.

45

Portfolio List (4)Property nameLocation(residential address)

Alpha Living
Okayama Nishigawa
Ryokudokoen

Silver Heights
Hitsujigaoka No.3

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

Alpha Living
Okayama Korakuen

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

Sompo no ie
Nishitanabeekimae

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

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

Approximately 1.9km
from Okayama Stationon the JR Sanyo MainLine

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

Acquisition price(million yen)

1,200

730

610

605

605

710

Real estateappraisal value(million yen) (Note 1)

1,340

787

671

641

626

739

NOI yield (%) (Note 2)

5.9

5.1

5.3

5.1

5.2

5.1

Depreciation(million yen) (Note 3)

8

7

4

6

6

5

Access

Structure / floors (Note 4)

RC/3F

RC/7F

RC/4F

RC/6F

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

RC/10F

RC/9F

Leasable area (m2)

7,267.56

2,124.16

2,128.44

1,848.06

1,929.16

2,095.79

Total leased area (m2)

7,267.56

2,124.16

2,128.44

1,848.06

1,929.16

2,095.79

Number of rooms (rooms)

109

53

45

43

50

42

Occupancy rate (%) (Note 5)

93.6

87.2

89.5

90.9

85.1

97.6

Silver Heights SapporoCo., Ltd.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Anabuki Medical CareInc.

Sompo Care Message
Inc.

17.6

17.2

17.2

17.2

17.2

8.9

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

Appraisal values are as of April 30, 2018.
(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 8th FP ended in April 30, 2018.
(Note 6) Remaining lease contract periods are as of April 30, 2018.
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.

46

Status of Income (Loss) of Investment Real Estate Properties(as of April 30, 2018)(Unit: thousand yen)
8th Fiscal Period (from November 1, 2017 to April 30, 2018)
Property name

Property-related operating expenses

Property-related
operating revenues(Note 1)

Consignment
expensesUtilityexpenses

Taxes anddues

Non-life
insurance
expenses

Repairexpenses

Depreciation

NOI(Note 2)

Other

Nichii Care Center Fukushima Omori

8,335

164

-

1,022

37

555

5,356

1,200

11,420

Sompo Care LAVIERE Hiroshima Hikarigaoka

17,058

510

-

2,882

82

2,639

10,944-34,085

Sompo Care LAVIERE Sagamihara Chuo

13,644

740

-

2,304

81

255

10,262-45,037

Charm Suite Ryokuchi Koen

29,142

1,224

-

4,515

112

7,767

15,522-

65,130

Sawayaka Kaikyokan

9,746

609

-

1,823

79

-

7,234

-

25,932

Sawayaka Meisuikan

11,475

572

-

2,812

116

-

7,974

-

25,000

Sawayaka Heart Life Nishikyogoku

9,851

797

-

1,726

53

579

6,694

-

30,107

Verger Hirakata

26,746

604

-

1,871

61

13,627

10,581-

29,434

Sompo Care LAVIERE Kinugasayama Koen

21,727

919

-

3,971

99

330

16,406-50,315La’nassica Arakogawa

20,548

664

-

2,267

80

420

17,116-37,367

12,574

409

-

1,877

54

1,861

8,372

-

22,350

4,863

133

-

944

28

200

3,557

-

8,615

Sawayaka Obatake Sanbankan

5,424

237

-

834

27

-

4,325

-

9,580

Super Court JR Nara-Ekimae

24,904

1,374

-

3,003

105

2,659

17,761-

43,649Minna-no-ie Omiya Yoshinocho

9,868

884

-

1,806

43

-

7,135

-

19,910Minna-no-ie Chuo-ku En’nami

15,655

932

2,523

2,190

46

-

9,963

-

19,699Silver Heights Hitsujigaoka No.3

16,475

675

-

6,182

141

695

8,781

-

34,756Alpha Living Okayama Nishigawa Ryokudokoen

9,793

364

-

1,755

45

-

7,626

-

18,713Alpha Living Okayama Korakuen

6,315

304

-

1,659

45

-

4,306

-

16,498Alpha Living Takamatsu Ekimae

8,016

302

-

1,224

41

-

6,448

-

15,695Alpha Living Takamatsu Hyakkenmachi

8,947

302

-

1,654

43

-

6,947

-

15,999Sompo no ie Nishitanabeekimae

7,669

380

-

1,705

50

484

5,049

-

18,043298,788

13,1082,523

50,036

1,479

32,072

198,367

1,200

597,345

Sawayaka Hinodekan
Sawayaka Riverside Kurinoki

Total

Not disclosed

697,766(Note 1) “Property-related operating revenue” is not disclosed property by property because consent for disclosure has not been obtained from tenants.
(Note 2) NOI = Property-related operating revenue − Property-related operating expenses + Depreciation
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

47

Balance Sheets for 8th Fiscal Period Ended April 2018
The 7th FP
ActualAmount(million yen)
Current Assets

Amount(million yen)

Ratio

1,794

Current Liabilities

8.5%

2,814

The 8th FP
ActualRatio

Amount(million yen)

13.3%

Ratio

2,803

1,223

1,349

Operating account payables

59

58

Cash and deposits in trust

447

429

Short-term loans payable

500

500

Other current assets

22

15

Current portion of long-termloans payable

2,100

2,100

Accounts payable – other63

53

Advances received

85

85

Other current liabilities

5

6

Fixed Assets
Tangible fixed assets
Buildings and others(including trust property)
Land and others(including trust property)

Intangible fixed assets

19,52492.0%

19,351

91.5%

19,45791.7%

19,28491.2%

11,508

11,335

7,949

7,949

42

0.2%

42

Fixed Liabilities

0.2%

730

730

Tenant leasehold and security
deposits

Other intangible fixedassets

1

1

Total Liabilities

Investments and other assets

24

Long-term prepaid
expenses
Total Assets

25

10

10

14

15

21,218 100.0%

0.1%

21,146 100.0%

7,930
7,200

40

0.1%

37.4%

7,200

40

Leasehold and security
deposits paid in trust

7,930

Long-term loans payable

Leasehold rights and leasehold
rights in trust

Net Assets

Assets8.0%

Amount(million yen)

Liabilities

Cash and deposits

Ratio

1,693

The 7th FP
Actual

The 8th FP
Actual

13.3%

37.5%

10,744

50.6%

10,73350.8%

Unitholders’ equity (net)10,22948.2%

10,165

48.1%

Unitholders’ equity

10,504

10,504

Deduction from unitholders’ equity

-275

-338

Unappropriated retained earnings

244

1.2%

246

1.2%

10,473

49.4%

10,412

49.2%

Total Net Assets
Total Liabilities and Net Assets

21,218 100.0%

21,146 100.0%

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.

48

Status of Unitholders as of the end of April 2018
Major unitholders (top 10)

Ownership ratio of investment units by category
Category of unitholders

Number ofunits atthe end of
8th FP

Number ofunits atthe end of
7th FP

Increase/decr
ease from theprevious FP

Ratio at theend of 8th
FP*

No.

Name

Number of
Number of
Increase/decr
units held atunits held atease from thethe end of 7th
the end of 8th
previous FP
FP
FP

Ratio at theend of 8thFP*

Individual/others

38,64935,474- 3,175

47.53%

1

Daiwa Securities Group Inc.

7,600

-

7,600

10.18%

Financial institutions

19,266

19,832566

26.57%

2

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

6,446

879

7,325

9.81%

Major city banks

-

-

-

0.00%

3

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

4,458

191

4,649

6.23%

Regional banks

1,160

493

- 667

0.66%

4

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

1,918

536

2,454

3.29%

Trust banks

14,737

16,092

1,355

21.56%

5

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

1,458

- 176

1,282

1.72%

Life insurancecompanies

286

286

-

0.38%

6

STATE STREET BANK AND TRUSTCOMPANY 505001

664

369

1,033

1.38%

Non-life insurancecompanies

-

-

-

0.00%

7

Daiwa Real Estate AssetManagement Co. Ltd.

1,000

-

1,000

1.34%

Other financial
institutions

3,083

2,961

- 122

3.97%

8

SCB SG S/A SCB THAILAND AC FOR
CIMB-PRINCIPAL PROPERTY
JP000294300545

-

953

953

1.28%

Other domestic companies

12,28012,273-7

16.44%

9

Fukui Medical Credit Association

1,145

- 200

945

1.27%

Foreigners

2,978

6,199

3,221

8.31%

10

UENOYA BUILDING Co. Ltd.

693

210

903

1.21%

Securities companies

1,459

854

- 605

1.14%

25,382

2,762

28,14437.71%

Total

74,632

74,632-100.00%

Total*Rounded to two decimal places.

*Rounded to two decimal places.

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

49

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

Name of IR Event

Location

June 2017

Special seminar for healthcare facility operators

Fukuoka

June 2017

Financial results briefing for institutional investors (6th FP)

Tokyo

July 2017

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

Tokyo

October 2017

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

December 2017

Financial results briefing for institutional investors (7th FP)

Tokyo

January 2018

Briefing session on asset management for individual investors (7th FP)

Tokyo

February 2018

Special seminar for healthcare facility operators

Osaka

February 2018

Seminar for individual investors (sponsored by a security company)

March 2018

TSE IR Festa 2018

Tokyo

March 2018

Special seminar for healthcare facility operators

Tokyo

Special seminar for healthcare facility operators (Tokyo)

Yokohama

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

Indices that include NHIMonth / Year

Name of index

September2015 disclosed
Thomson
Reuters
GPR/ APREA
Composite
Index Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
This document
is not material
in compliancewith theFinancial
Instruments
and Exchange
NHI advises readers to make investment decisions at their own judgment.

50

IR Schedule

IR schedule

・Fiscal period ends: April and October ・Securities code: 3308
Nov.

Announcement offinancial results

Dec.

●

Jan.

Feb.

Mar.

Announcement of financial results
for fiscal period ended October

Payout of
distributions●

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

June

●

Apr.

July

Aug.

Sept.

End offiscal period

Oct.

Announcement of financial results
for fiscal period ended April

Payout of
distributions●

Commencement of payout of distributions
for fiscal period ended April

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

End offiscal period

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

51

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

3308

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

 IR mail delivery service

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

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

52

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.

53

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

Operator

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

Asset
Management

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

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

SponsorAdvisorSupport54
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

54

Real Estate and Infrastructure AM Business in Daiwa Securities Group Aims to respond to the changes in management environment and expand assets under management as well as investment fields toinfrastructure, logistics, hotel and overseas
Management environment
surrounding investors

Expansion of assets under management meeting various needs
Expansion anddiversification of assets
under management
Development of a newfund procurement
methodDifficulty in management
due to low interest rate
Diversification of investor
needs

Expansion of targeted assets under management

OfficeResidential

Healthcare

Industrial infrastructure,energy, etc.

Hotel
Overseas• Internal and external growth of REITs under management, etc. • Considering investments in overseas assets and Debt
investment• Expanding new fields such as infrastructure, logistics and hotel• Capturing significant growth opportunity through M&A, etc.
• Diversification of securitization scheme (overseas
investment, products for individuals)• Fund procurement utilizing FinTech in progress such as cloudfunding• Strengthening of base through collaboration and partnership2009

441.2 billion yen

2012

110.0 billion yen

2014

225.5 billion yen

201881.5 billion yen*1

201419.3 billion yen

2016

69.0 billion yen*2

2016

Private real estate fund2018
Making consideration for formation of real estate financial instruments backed by overseas real estate(also considering alliance with a local leading real estate AM company)

11.0 billion yen
9.2 billion yen*1 Sub-sponsor*2 Amount of investment commitment (notincluded in real estate AUM)

Real Estate AUM of Daiwa Securities Group 897.9 billion yen (including sub-sponsor)
Real Estate AUM of Daiwa Real 590.8 billion yen (as of July 19, 2018)
This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation.
NHI advises readers to make investment decisions at their own judgment.

55

Overview of Asset Management Company (1)Corporate Profile

Directors
As of June 1, 2018

As of June 1, 2018
Corporate nameDaiwa Real Estate Asset Management Co. Ltd.

Address

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

Established

October 21, 2004

Paid-in capital

200 million yen

Representative Director

Akira Yamanouchi

Board of Directors

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

No. of Employees

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

President and Representative
Director
Vice President andRepresentative Director
Vice President andRepresentative Director

Akira Yamanouchi
Yuji Shinotsuka
Yoshiki Nishigaki

Executive Managing Director

Toshio Fukushima

Director

Hajime Imbe

Director (non-executive)

Mikita Komatsu

Director (non-executive)

Naoya Otani

AuditorTamaki Shibayama

Auditor (non-executive)

Morimasa Matsuda

Auditor (non-executive)

Shinji Kiso

REITs which entrust the asset management to
the Asset Management Company
As of June 19, 2018
Daiwa Office Investment
Corporation

Listed REIT focusing on office buildings
Asset size: approximately 441.2 billion yen(56 properties)(*)

Daiwa Residential Private
Investment Corporation

Unlisted REIT focusing on residential properties
Asset size: approximately 110.0 billion yen(71 properties)

Nippon Healthcare Investment
Corporation

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

Daiwa Hotel Private Investment Private REIT focusing on hotels
Asset size: approximately 9.2 billion yen (3 properties)
Corporation（*） excluding silent partnership equity interest

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

56

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

Office Investment Team

Office Management
Team

Finance Team

Residential Investment
Team

Residential
Management Team

Accounting Team

Healthcare
Management TeamManagement Team

Healthcare
Investment Team
Hotel Investment Team

Corporate
Planning
Department

Administration
Department

HotelManagement Team
Investment Planning
Team
Construction
Management Team

as of 1 June, 2018

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

57

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.

58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.

59
5959