Index

17th Fiscal Period Executive Summary

Ⅰ

Financial Summary
1. Major Indexes for 17th Fiscal Period

P4

2. Actual Results for 17th Fiscal Period

P5

Factors for Increase/Decrease in Distributionsfor 17th Fiscal Period
Earnings Forecasts for4.
18th Fiscal Period and 19th Fiscal Period
Factors for Increase/Decrease in Distributions
5.
Forecast for 18th and 19th Fiscal Period

3.

Ⅱ

Ⅲ

Ⅳ

P6

Ⅴ

P7
P8

6. Changes in DPU/NAV Per Unit

P9

7. Changes in Unit Price

P10

Status of Asset Management

Ⅵ

Actions for External Growth
1. Road Map to External Growth

P21

2. External Growth Strategy

P22

3. Actions for Acquisition of Hospital Property

P24

ESG Initiatives
1. Materiality

P26

2. Environment

P27

3. Social

P28

4. Governance

P29

Environment Surrounding Healthcare Industry

1. Portfolio Highlights

P12

1. Supply and Demand of Healthcare Facilities

P31

2. Continuing Appraisal

P13

2. Regional Comprehensive Care System

P32

3. Changes in Unrealized Gain

P14

3. Regional Healthcare Vision

P33

4. Stable Cash Flow in the Long Term

P15

4. Facilities and Housing for the Elderly

P34

Ⅶ

Financial Strategy
1. Financial Status

P18

Appendix1

17th Fiscal Period Executive Summary
Performance

Operating revenue:2,438 million yen (+0 million yen from forecast, △193 million yen from previous fiscal period)

Net income:1,068 million yen (+5 million yen from forecast, △210 million yen from previous fiscal period)DPU
NAV per unit

:3,282 yen (+17 yen (+0.5%) from forecast, △275 yen (△7.7%) from previous fiscal period):132,912 yen（+1,879 yen (+1.4%) from previous fiscal period ）Financial Status
Interest-bearing liabilities is 39.15 billion yen (±0 million yen from previous fiscal period) and LTV is 48.5%(+0.3pt from previous fiscal period).

Continued the existing basic policy of long term, fixed interest rate and diversification of repayment due dates.

Long-term issuer ratings (JCR) is A+ (Stable).

Portfolio

Asset size is 48 properties/79.2 billion yen, No new assets acquired/disposed.

With the rise of appraisal value, the unrealized gains increased to 10.3 billion yen, and the unrealized gains ratio
expanded to 13.2%.

The operational rate maintained 100%. No lease termination, rent reduction/exemption, deferral of rent payment.

2

Financial Summary3

Ⅰ Financial Summary

1. Major Indexes for 17th Fiscal Period
Figures in parentheses indicate the change
from the end of previous period

Asset (Assets)

Debt (Liabilities)

Number of properties

48 propertiesc(±0 properties)

Total acquisition price79.2 billion yen)(±0 billion yen)

Total appraisal value

Unrealized gain

Average appraisal NOI
yield

Portfolio operational rate

Ratio of fixed rents

88.7 billion yen)(+0.5 billion yen)
10.3 billion yen)(+0.9 billion yen)

Total amount ofinterest-bearing liabilities
Average remaining terms
to maturity
Average borrowinginterest rate
Ratio of long-term debt

100.0%)

82.9%_

Average remaining lease
term

12.0 years)(±0pt)(△0.5 years)

0.70%)(±0pt)
76.4%)(±0pt)

fixed interest rates(±0pt)
48.5%)

LTV(+0.3pt)

Long-Term Issuer Rating(JCR)

A+ (Stable)

Equity (Net assets)
Market cap(±0pt)

Ratio of investment inthree major
metropolitan areas(△0.5 years)

94.9%)(±0pt)（±0pt)

2.8 years)

Ratio of debt with

5.5%)

100.0%)

39.15 billion yen)(±0 billion yen)

DPU
Distribution in excess ofearnings (Note)(Equivalent to return of capital)

NAV per unit

(Note) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).

55.0 billion yen)(△3.1 billion yen)
3,282 yen)(△275 yen)
311 yen)(+311 yen)
132,912 yen)(+1,879 yen)4

Ⅰ Financial Summary

2. Actual Results for 17th Fiscal Period
Decrease in revenue and income compared with previous fiscal period mainly due to the absenceof gain on asset replacement. However, net income increased by 5million yen compared with
forecast due to reductions in general and administrative expenses, etc.
(Unit: million yen)
16th fiscal
period17th Fiscal Period Actual Results(Comparison with 16th Fiscal Period)

17th Fiscal Period(Ended July 2023)(Ended January 2023)

ActualForecast(Note 2)

Actual

(A)

(B)

(C)

Operating revenue

2,632

2,438

Operating expenses

1,178

Expenses related to leasing
business

Comparison with 16th Fiscal Period

Comparison with
Forecast

Difference in operating revenue (△193)(C)-(A)(C)-(A)（A）(％)

2,438

△193

△7.4％

+0

1,173

1,170

△8

△0.7％

△3

801

822

820

+18

2.3％

△1

(Depreciation)

563

559

560

△3

△0.6％

+0

General and administrative
expenses

376

351

349

△26

△7.1％

△1

1,453

1,264

1,268

△185

△12.8％+3

Difference in Non-operating expenses (+26)

Non-operating income

1

－

2

+1

106.7％+2

 Increase in interest expenses (+27)

Non-operating expenses

176

201

202

+26

14.9％

+0

Ordinary income

1,279

1,063

1,068

△210

△16.4％+5

Net income

1,278

1,062

1,068

△210

△16.5％+5

DPU (yen)

3,557

3,265

3,282

△275

△7.7％

+17

3,557

2,954

2,828

△586

△16.5％+17

Operating income

Distribution of earnings
Distribution of allowance fortemporary difference
adjustments

0Distribution in excess of earnings(return of capital) (Note 1)

0

143
311

311

+311

(C)-(B) Full-period contribution of rent revenue fromproperties acquired in the 16th fiscal period (+11)
 Reduction of gain on asset replacement(△204)

Difference in operating expenses (△8)
 Increase in expenses related to leasing business (+18)
 Property taxes (+26)
 Repair expenses (△5)
 Depreciation (△3)
 Decrease in general and administrative expenses (△26)
 Asset management fee (△13)
 Administrative service fees (△8)
 Cost related to Investors meeting (△ 6)17th Fiscal Period Actual Results(Comparison with Forecast)Difference in operating expenses (△3)
 Decrease in expenses related to leasing business (△1)
 Repair expenses (△2)
 Decrease in general and administrative expenses (△ 1) Advertisement expenses (△1)
 Professional fees (△1)
 Consumption tax(+1)
Difference in Non-operating income (+2)
 Insurance income (+2)±0(Note 1) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2) The forecast for the 17th Fiscal Period (B) is the forecast figure announced in “(REIT) Financial Report for Fiscal Period Ended January 2023” dated March 23, 2023.

5

Ⅰ Financial Summary

3. Factors for Increase/Decrease in Distributions for 17th Fiscal Period

The main reasons for the decrease in distributions compared with the previous period wereincreases in property taxes and interest expenses, in addition to the absence of gain on
asset replacement.
Factors for Increase/Decrease in Distributions for 17th Fiscal Period（Comparison with 16th Fiscal Period）（yen）

Reduction ofGain onasset replacement
△569

2,988

Expensesrelated toleasingbusiness△51

General andadministrative
expenses+73

Increase in property
taxes（△74）
Decrease in repair
expenses（+16）
Decrease indepreciation（+9）

Decrease in asset
management fee （+37）
Decrease in administrative
service fees （+24）
Decrease in cost related toInvestors meeting （+18）

Non-operating
profit(loss)△68
Increase in interest
expenses（△76）
Increase in Insuranceincome （+5）

16th Fiscal Period

Leasingbusiness
revenues+30

Full-period
contribution ofrent revenue（+31）

Distribution
in excessof earnings
+311

2,971

17th Fiscal Period

Actual Results

Actual Results

Factors for Increase/Decrease in Distributions for 17th Fiscal Period（Comparison with Forecast）（yen）
Non-operating
profit(loss)+6
3,265（Including
distribution
in excess ofearnings）

Increase in Insuranceincome （+6）

Expenses related
to leasing
business+5
Decrease in repair
expenses(+8)

General andadministrative
expenses+4
Decrease in advertisement
expenses （+3）
Decrease in professionalfees（+3）

3,282（Including
distribution
in excess ofearnings）+17 yen

17th Fiscal Period

17th Fiscal Period

Forecast

Actual Results（Note） Listed only major difference factors.

6

Ⅰ Financial Summary

4. Earnings Forecasts for 18th Fiscal Period and 19th Fiscal Period

Operating revenue is expected to remain flat in the 18th and 19th fiscal period. On the other hand,net income is expected to decrease slightly, due to increase in depreciation as well as interest
expenses as a result of rising interest rates.
(Unit: million yen)

17th Fiscal
Period(ending July 2024)(ending January 2024)(ending July 2023)
Initial forecast

Actual19th Fiscal Period

18th Fiscal Period(Note 2)

Forecast(Note 3)Comparison with
17th fiscal period

Forecast(C)-(A)(D)(Note 3)Comparison with
17th fiscal period
forecast

Difference in operating expenses (+13)
 Increase in expenses related to leasing business (+9)
 Depreciation (+5)
 Repair expenses (+3)
 Increase in general and administrative expenses (+3)
 Survey fee (+2)
 Asset management fee (+1)
 Professional fees (+1)

(A)

(B)

(C)

Operating revenue

2,438

2,438

2,438

△0

2,438

±0

Operating expenses

1,170

1,183

1,183

+13

1,184

+1

Expenses related to leasing
business

820

829

829

+9

832

+3

(Depreciation)

560

566

566

+5

568

+2

 Insurance income (△2)

General and administrative
expenses

349

353

353

+3

351

△1

Difference in Non-operating expenses (+1)

Operating income

1,268

1,254

1,255

△13

1,253

△1

Non-operating income

2

－

－

△2

－

±0

Non-operating expenses

202

203

204

+1

216

+11

Ordinary income

1,068

1,051

1,051

△17

1,037

△13

Net income

1,068

1,050

1,050

△17

1,036

△13

DPU (yen)

3,282

3,235

3,235

△47

3,200

△35

2,971

2,920

2,920

△51

2,884

△36

311

315

315

+4

316

+1

DPU

(Excluding distribution in excess ofearnings (return of capital)(Note1))

Distribution in excess of earnings(return of capital) (Note 1)(D)-(C)

18th Fiscal Period Forecast (Comparison
with 17th Fiscal Period Results)

Difference in Non-operating income (△2)

 Increase in interest expenses (+2)

19th Fiscal Period Forecast (Comparison
with 18th Fiscal Period Forecast)Difference in operating expenses (+1)
 Increase in expenses related to leasing business (+3)
 Depreciation (+2)
 Decrease in general and administrative expenses (△1)
 Asset management fee (△2)

Difference in operating expenses (+11)


Increase in interest expenses (+12)(Note 1) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).
(Note 2) The initial forecast for the 18th Fiscal Period (B) is the forecast figure announced in “(REIT) Financial Report for Fiscal Period Ended January 2023” dated March 17, 2023.
(Note 3) The forecast for the 18th Fiscal Period (C) and The forecast for the 19th Fiscal Period (D) are the forecast figure announced in “ (REIT) Financial Report for Fiscal Period Ended July 2023” dated September 15, 2023.

7

Ⅰ Financial Summary

5. Factors for Increase/Decrease in Distributions Forecast
for 18th and 19th Fiscal Period

Aim to raise distributions by increasing operating revenues, flexible financing in line with
the interest rate environment, reviewing various expenses, etc.
Factors for Increase/Decrease in Distributions Forecast
for 19th（Comparison with 18th Fiscal Period Forecast）

Factors for Increase/Decrease in Distributions Forecast
for 18th（Comparison with 17th Fiscal Period Results）（yen）

Expensesrelated toleasingbusiness
Non-operating
General and△25
profit(loss)
administrative Distribution
in excessexpenses△13
of earnings△10+4

Non-operating
profit(loss)
Expensesrelated to△32leasingbusiness△8

Increase insurvey fee（△7）
Decrease in Insuranceincome （△6）
Increase in interest
expenses （△6）

3,282Increase indepreciation（△16）
Increase in repair
expenses（△9）

Distribution
General andadministrative in excessof earnings
expenses+1+4
Decrease in asset
management fee（+8）

Increase indepreciation（△8）
3,235Increase in interest
expenses （△34）

3,200

17th Fiscal Period

18th Fiscal Period

19th Fiscal Period

Actual Results

Forecast

Forecast（Note） Listed only major difference factors.

8

Ⅰ Financial Summary

6. Changes in DPU/NAV Per Unit
Planning to enhance unitholder value through stable growth in distributions over the medium
to long term and increase in NAV. NAV per unit increased to 132,912 yen at the end of the
17th fiscal period.
DPU／NAV Per Unit
(DPU:yen)

Distribution in excess of earnings per unit

4,000

Distributions (excluding distributions in excess of earnings due to return of capital)
3,643
NAV per unit
3,320

3,500

3,240

3,120
3,000

2,653

(NAV Per Unit:yen)(Note)

3,226

3,266

140,000
3,367

3,282

3,244

2,699

132,912
131,033

2,500
2,000

135,000

130,000

125,000

127,069
124,814

1,500
1,000
117,445500

3,557

118,038

118,986

119,303

119,842

119,268

120,000

120,907

115,000

115,709

110,000

0
6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

14th FP

15th FP

16th FP

17th FP

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

January

July

January

July

January

July

January

July

January

July

January

July

2018

2018

2019

2019

2020

2020

2021

2021

2022

2022

2023

2023

(Note) Distribution in excess of earnings refers to distribution carried out targeting around 20% of depreciation equivalent (return of capital).

9

Ⅰ Financial Summary

7. Changes in Unit Price
Generally outperformed the respective index in the volatile REIT market during the COVID-19
pandemic. Unit price remained above NAV per unit
TSE REIT Index

TSE REIT Residential Index

HCM

September and November 2022
Asset Replacement

160%
150%
140%

Unit price of HCM
100.0%/137,400 yen
NAV per unit︓119,303 yen（ As of January 31, 2020 ）September 2022
Announced inclusion in FTSE EPRA
Nareit Global Real Estate Index
January 2022
Conducted the third public offering

130%
120%

March 2020
COVID-19 crisis

110%
100%
90%
80%

(As of July 31,2023)
Unit price of HCM

70%

︓111.5%/153,200 yen

TSE REIT Residential Index︓96.3%
60%
50%
Jan.31,2020

TSE REIT Index
NAV per unit
Jul.31,2020

Jan.31,2021(Note) It is indicated as a percentage with January 31, 2020, as the base date.

Jul.31,2021

Jan.31,2022

Jul.31,2022

︓84.7%
︓132,912 yen
Jan.31,2023

Jul.31,2023

10

Status of Asset Management

11

Ⅱ

Status of Asset Management

1. Portfolio Highlights
Key Data

Number ofproperties

Total acquisition
price

Total appraisal
value (Note 1)

Average appraisal
NOI yield

48

79.2 billion yen

88.7 billion yen

5.5%

Average buildingage (Note 1)

Average remaining
lease term (Note 1)

Ratio of fixed rents

Portfolio operationalrate

17.6 years

12.0 years

100.0%

100.0%(±0 billion yen)(±0 properties)(+0.5 billion yen)(△0.5 years)(+0.5 years)(±0pt)(±0pt)(±0pt)

Diversification Status (Note 3)
By Area

By Type

Other

Complex of paid nursing home, medical
service-related facilities, etc.

facilities, etc.
2.6%

Healthcare facilities
100%

Serviced housing for theelderly
6.0%

2.2%

14.9%

Medical service-related

Three Major
Metropolitan areas
82.9%

Paid nursing

Kinki area

home

37.6%

75.1%

GREEN LIFE Co., Ltd. andareasCore cities

16.3%

Operators（Note 4）

Others33.8%

GREEN LIFE HIGASHI NIHON Co., Ltd.
23.8%

Number of operators
16 operators
Sompo Care Inc.
Tokyo Metropolitan
Proud Life Inc.
16.9%
area
7.0%
45.3%
Kyowakai Medical Corporation
Benesse Style Care Co., Ltd.
9.6%
8.9%

(Note 1) “Total appraisal value” is indicated based on the appraisal report with July 31, 2023, as the appraisal date. “Average building age” and “Average remaining lease term” are average values with July 31, 2023, as
the base date, calculated by dividing the remaining years to maturity by 365 and weighted by acquisition price. The figures are rounded down to the first decimal place. For properties having multiple buildings,
they indicate weighted-average figures based on area.
(Note 2) Figures in parentheses are comparison with the end of the 16th FP.
(Note 3) The figures in the graphs are calculated based on acquisition price, rounded off to the first decimal place.
(Note 4) The operators of SHIP Senri Building are separated based on an area basis, with Kyowakai Medical Corporation for the Senri-Chuo Hospital portion and GREEN LIFE for the other portions.

12Ⅱ

Status of Asset Management

2. Continuing Appraisal
Summary of Continuing Appraisal
16th Fiscal
Period17th Fiscal
PeriodPoP change

Number of
Properties

48 properties

48 properties±0 properties

Appraisal Value

88,206 million
yen

88,769 millionyen+563 million
yen

Average
Capitalization
Rate

4.80％

4.77％

(million yen)

90,000(Number of properties)

60

Appraisal Value（million yen）
Number of Properties

85,000

47

48

48

50

△0.03pt
40（Note 1）80,000

35

36

36

37

37

Changes per property（Comparison with previous Fiscal Period）
Appraisal Value

Capitalization Rate（Note 2）（ Number of Properties）

16th
FiscalPeriod17th
FiscalPeriodIncrease

28

16

Same

19

Decrease

1

86,36475,00088,206 88,769

20（ Number of Properties）

16th
FiscalPeriod17th
FiscalPeriodDecrease

26

15

28

Same

22

33

4

Increase00(Note 1) The figure is the weighted average of the direct capitalization method capitalization rate for each property
weighted by the appraisal value.
(Note 2) Direct capitalization method cap rate is shown.

30

70,00070,41365,000071,862 71,518 72,531

73,485100
10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP

13

Ⅱ

Status of Asset Management

3. Changes in Unrealized Gains
Unrealized gains have been increasing steadily, with the rise of appraisal value(million
yen)
（百万円）

(%)

12,000

15.0
Unrealized gains (left axis)
10,344

Unrealized gains ratio (right axis)

10,000

9,417
13.2

13.0

8,091
8,000

12.0

6,959
5,653

6,000
4,711

4,901

5,165

5,094

0

10.3
9.0

4,000

2,000

10.5

11.0

8.5

7.2

7.5

7.7

7.7

7.0

9th FP

10th FP

11th FP

12th FP

13th FP

14th FP

15th FP

16th FP

17th FP

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

July

January

July

January

July

January

July

January

July

2019

2020

2020

2021

2021

2022

2022

2023

2023

5.0

14

Ⅱ

Status of Asset Management

4. Stable Cash Flow in the Long Term①
By leveraging expertise in the healthcare field, HCM stably owns healthcare facilities
operated by carefully selected operators.
Business Evaluation of Healthcare Facilities and Operators
HCM has built a stable portfolio through businessdue diligence and monitoring.
Operators

Operations
capability

Management
stability

Carefully Selected Operators

16 operators with strong track records and high creditworthiness,
including industry-leading SOMPO Care, Benesse Style Care and
GREEN LIFE that belongs to SHIP HEALTHCARE.
Kyowakai is a major medical corporation that operates 6 hospitals(2,108 beds) and 4 geriatric health services facilities (495 beds), etc.
Top Operators (Based on Acquisition Price) (Note 1)
Operator

Total capacity (Note 2)

Share (%)

4,762 people(ranked 25th in Japan) (Note 3)

23.8

29,454 people(ranked 1st in Japan)

16.9

Kyowakai Medical Corporation-

9.6

Benesse Style Care Co., Ltd.

20,318 people(ranked 2nd in Japan)

8.9

GREEN LIFE Co., Ltd.
GREEN LIFE HIGASHI NIHON Co., Ltd.
Sompo Care Inc.

Business due diligence / Monitoring Quantitative and qualitative assessment and analysis
 Regular visits to facilities and on-site inspections(interviews with facility directors, etc.)
Business
profile/activities

Financial status

Business model

Compliance(Abuse prevention
measures)

Organizational
management(Note 1)
(Note 2)
(Note 3)The operators of SHIP Senri Building are separated based on an area basis, with Kyowakai Medical
Corporation for the Senri-Chuo Hospital portion and GREEN LIFE for the other portions.
(From) Weekly Senior Housing Newspaper, August 23・30, 2023 issue (No. 726)
Indicates the figure of Ship Healthcare Holdings Co., Ltd. as a whole.

Stable Rent Revenue in the Long Term
 Long-term fixed-rent lease agreements have been concluded with

Staff retainment・Development

carefully selected operators.

 No direct impact from rising utility costs, as these costs are borne byoperators in principle.

HAM has established the Healthcare Business
Promotion Department in-house (Note)
Responsible for business evaluation of healthcare
facilities and operators, as well as survey andanalysis of the healthcare industry.

20 years or more
12.7%

Ratio offixed rents
100%

Averageremaininglease term
12.0 years

Less than10
years
42.4%

(Note)

10 years or more but less than
20 years(Note) The head of Healthcare Business Promotion Department is an "expert who fully understands the businesscharacteristics of healthcare facilities" defined by the Ministry of Land, Infrastructure, Transport and Tourism in
the guidelines.

44.8%(Note) The figure is based on July 31, 2023, as reference date and calculated by weighted averaging withacquisition prices, rounded down to the first decimal place.

15

Ⅱ

Status of Asset Management

4. Stable Cash Flow in the Long Term②
Portfolio operational rate of HCM has been almost 100% since the IPO, and average occupancy
rate of each facility has been maintained at around 90% amid the COVID-19 pandemic.
Change in Portfolio Operational Rate and Average Occupancy Rate
（％）
100

100

100

100

100

100

99.9

100

91.6

91.5

100

100

92.6

92.4

100

100

91.1

91.3

99.9

100

100

88.9

89.0

89.2

100

95

90

87.7

86.7
85

84.4

85.2

84.9

85.3
portfolio operational rate

average occupancy rate8075
3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

14th FP

15th FP

16th FP

17th FP

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

July

January

July

January

July

January

July

January

July

January

July

January

July

January

July

2016

2017

2017

2018

2018

2019

2019

2020

2020

2021

2021

2022

2022

2023

2023

(Note) Portfolio operational rate indicates the ratio of the rented area to the leasable area of the assets as of the end of each fiscal year, and is rounded off to the first decimal place. Average occupancy rate is the rate obtained by
dividing the total number of residents by the total capacity for the facilities and housing for the elderly shown in the Property Disclosure Statement of Important Matters provided by the operator and is rounded off to the firstdecimal place.

16

Financial Strategy

17

Ⅲ Financial Strategy

1. Financial Status①
PolicyMarket Recognition

HCM Policy

 Long-term interest rates have been rising due to Continue to conduct financial management
considering financial soundness and its impact on

global monetary tightening and BOJ's review of YCC

distributions while closely monitoring interest rate

operations

trends Lenders' lending attitude remains unchanged

 Continue to control LTV around 50%
 Considering further diversification of maturities andlenders

Status of Interest-Bearing Liabilities

Change in LTV and Total Interest-Bearing Liabilities

End of16th FPEnd of17th FP

ChangeTotal amount ofinterest-bearing
Liabilities(billion
yen)

39.15

39.15

±0

（Social loans）(billion
yen)

36.15

36.15

±0

（Social bonds）(billion
yen)

2.0

2.0

±0

Average remaining terms tomaturity(years)

3.3

2.8

△0.5

Ratio of debt with fixedinterest rates

（%）

94.9

94.9

±0

LTV

（%）

48.2

48.5

+0.3

Average borrowing interest （ ）
%
rate

0.70

0.70

±0

40
30

33.15
48.2

20
10

44.9

Total interest-bearing liabilities
LTV (Net assets base)
LTV (Market value base)
39.15
38.65
33.15
33.15
48.1

44.5

0
12th FP

13th FP

48.2

48.1

48.2

39.15

48.5

50
48
46
44

43.8

43.7

43.2

43.0

14th FP

15th FP

16th FP

17th FP

42

18

Ⅲ

Financial Strategy

1. Financial Status②
Diversification of Lenders

Rating and Framework Evaluation
Amount（billion yen）

4.2%
4.2%
4.2%

Total amount37.15 billion
yen

4.7%

33.5%

Lenders

15

6.1%
6.2%

16.3%

8.6%

Ratio（%）■Sumitomo Mitsui Banking
Corporation

12.45

33.5

■Sumitomo Mitsui Trust Bank

6.05

16.3

■Resona Bank

3.2

8.6

■Nippon Life Insurance

2.3

6.2

■Shinkin Central Bank

2.25

6.1

■Nishi-Nippon City Bank

1.75

4.7

■Dai-ichi Life Insurance
Company

1.55

4.2■Hiroshima Bank

1.55

4.2

■Bank of Fukuoka

1.55

4.2

■77 Bank

1.25

3.4

■San ju San Bank

0.75

2.0

■Gunma Bank

0.75

2.0

■Bank of Yokohama

0.75

2.0

■Higashi-Nippon Bank

0.5

1.4

■SBI Shinsei Bank

0.5

1.4

Total

37.15

100

Issuer Rating（Outlook）

Rating Agency

Japan Credit Rating Agency,
Ltd. (JCR)

Long-Term Issuer Rating

External Evaluation Agency

A+（Stable）
Social Finance Framework
Evaluation(Note 1)

Japan Credit Rating Agency,Social 1(F)Ltd. (JCR)（The highest evaluation）(Note 1) JCR Social Finance Evaluation is an evaluation performed by Japan Credit Rating Agency, Ltd. (hereinafter,“JCR”) by confirming that the use of funds are in alignment with the Social Finance components of the principles
published by the International Capital Market Association (ICMA) and consistent with the SDGs.

Diversification of Maturities(billion yen)

Long-term loans

Refinanced

8

Short-term loans

Investment corporation bonds(Social bonds)

7
6
5
4

7.25

3

6.4

5.55

6.05

5.9

2
1

4
2

2

2

0
17th FP

18th FP

19th FP

20th FP

21st FP

22nd FP

23rd FP

24th FP

25th FP

26th FP

27th FP

28th FP

29th FP

30th FP

19

Actions for External Growth20

Ⅳ Actions for External Growth

1. Road Map to External GrowthWith continuous property acquisition, the asset size expanded to 79.2 billion yen.
The mid-term target of 100 billion yen asset size is likely to be reached.
Change in Asset Size and Number of Properties
March 2015

・ IPO
・ Acquired 16 properties(23.6 billion yen)February 2017

・ Conducted the firstpublic offering
・ Acquired 6 properties(13.4 billion yen)

November 2017

・ Acquired J-REITʼsfirst hospital
real estatefor 2 billion yen(Number ofproperties)

February 2019

・Conducted the second
public offering
・ Acquired 8 properties(22.7 billion yen)including hospital real estate

February 2022

・ Conducted the third
public offering
・ Acquired 10 properties(11.4 billion yen)

September and November 2022

・ Asset Replacement
・ Acquired 2 properties (2 billion yen),
Disposed 1property(billion yen)

65

100

Asset size

<Target> 90

Number of properties

55

78.4

64.8

64.8

66.3

66.3

67.0

25

40.5

40.5

23.6
24

25

25

48

48

(Note)

80

60
50

42.1
35

35

36

36

37

37
40
30

27

20

16
0
15

100.0

70
47

38.4

79.2

67.0

45

35

79.2

0
10
1st FP

5th FP

6th FP

7th FP

8th FP

9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

Ended

July

July

January

July

January

July

January

July

January

July

January

July

January

July

2015

2017

2018

2018

2019

2019

2020

2020

2021

2021

2022

2022

2023

2023

(Note) The target may not be achieved due to future events, market environment and other factors.

21

Ⅳ Actions for External Growth

2. External Growth Strategy①
PolicyThe Status of Pipeline Accumulation

System to gather quality
deals and information

Market Recognition
 Strong demand for healthcare real estate acquisitions
due to the participation of various players such as
foreign funds

Facilities andhousing for theelderly(in operation)

 Capitalization rates continue to decline and the trading
market is overheated

Facilities andhousing for theelderly(to be developed)

Medicalservicerelated
facilities, etc.

Total Pipeline over 30 billion yen (Note)
HCM Policy Expansion of high-quality pipeline utilizing wideranging networks with operators and developers, etc.
and their various functions (gathering system)

Pipeline Examples (Note)
Paid nursing home (to be developed)

Paid nursing home (in operation)

PD House Higashiosaka(Higashiosaka-shi, Osaka; 48 rooms)

Sunny Life Funabashi(Funabashi-shi, Chiba; 185 rooms)

Utilized a warehousing function of anon-sponsor company, to capture a
new developerʼs needs of exiting fromdevelopment project. A paid nursing
home specializing in Parkinson's
disease.

Change of ownership of paid
nursing home. Capturing a rareopportunity for asset replacement
by a major real estate company,
the sponsor's warehousing function
was utilized.

 Leverage sourcing capabilities as the only J-REIT
specializing in healthcare (strengthen HAM
proprietary channels)
 Consider flexibly investment targets (e.g., complex
facilities) and investment types (e.g., TK equity
investment, etc.)
 Improvement of portfolio quality over the medium tolong term through strategic asset replacement(Note)

HCM has the first refusal rights for the acquisition of the above property, however this does not meanthat HCM has decided to acquire the property, nor does it guarantee that HCM will acquire the property
in the future.

22

Ⅳ Actions for External Growth

2. External Growth Strategy②
HCM aims to expand the pipeline through a “gathering system” that utilizes wide-ranging
networks with operators and developers, etc. and their various functions.
System to Gather Quality Deals and Information

Warehousing
functions

Property
information
Asset Management Company

Sponsor Support Companies
Sponsorsupportagreement

Sumitomo Mitsui
Finance and Leasing

Yoei

GinsenKobe Tochi
Tatemono

Support Companies

Muromachi
Building

SMBC Trust Bank Ltd. / RISA Partners, Inc.
Max-Realty Inc. / SMFL Mirai Partners Co., Ltd.

Property
information

Developers
Homebuilders

Pipeline
supportagreement

Wide-ranging networks

Operators

OwnersHealthcare
Asset Management Co., Ltd.

Property
information(Individuals, business companies, funds, etc.)

Medical corporations

23

Ⅳ Actions for External Growth

3. Actions for Acquisition of Hospital Property
Investment & Management Policy

Opportunity of REIT Investment (Utilization)1
Major investment target
 Real estate of stably managed hospitals(Hospitals expected to play a definite role in the Regional
Healthcare Vision) ⇔ Different from business rehabilitation
funds
 Medical malls and health checkup centers, etc. may also
be incorporated into portfolio

2
Investment & Management complying with the “Hospital
Real Estate Guidelines”
 Allocation of experts familiar with hospital business in the
Asset Management Company
 Conclusion of a long-term fixed-rent lease agreement, inprinciple

Size of hospital real estate marketMarket size is approximately 23 trillion yen (Note), and hospital real estateaccounts for over 50% of the entire healthcare facility real estate market(approximately 51%)



Mostly self-owned by medical corporations, etc.

Major hospital needs

Rebuilding, extension, securing of relocation site with the intention ofstrengthening medical functions

Financing for floor expansion and M&A to expand their business

Strengthen financial status, Cash flow management

Concentration of management resources on the main business, Outsourcing ofreal estate businessImproving the brand of operating facilities(Note) Calculated by the Asset Management Company based on the estimate value by KPMG Healthcare Japan Co.,
Ltd. as of June 2016.

Case Example

3
Investment ratio Together with facilities and housing for the elderly,
accounting for 80% or more of the portfolio
 No upper limit sets for hospital real estate alone

4
Promotion for market expansion
 Lectures on utilization of Healthcare REIT at industry groupmeetings (Congress of Japan Hospital Association, etc.)
 Participation in seminars for medical care-related operators
hosted by the Financial Services Agency and the Ministry ofLand, Infrastructure, Transport and Tourism

Name

SHIP Senri Building(Senri-Chuo Hospital)

Name

Niigata Rehabilitation
Hospital

Location

Toyonaka-shi, Osaka

Location

Niigata-shi, Niigata

Operator

Kyowakai Medical
Corporation

Operator

Number of
beds

Medical Corporation
AIKOKAI

400

Number of
beds

168

24

ESG Initiatives

25

Ⅴ ESG Initiatives

1. Materiality
Worked to contribute to the aged society and enhance unitholder value over the medium tolong term through asset management that contributes to ESG.
Issues that need to be solved
・ Reduction of water resource consumption
・ Energy conservation and reduction of CO2 emissions

Environment

・ Response to natural disasters caused by climatechange (Resilience)・ Waste management and reduction
・ Elimination of the shortage of supply of housing forthe elderly against the elderly population
・ Prevention of job separation due to nursing carethrough the promotion of supply of nursing carefacilities

Social・ Improvement of business efficiency and reduction ofwork burden for nursing care staff
・ Prevention of abuse of residents and harassment offacility staff
・ Response to the deterioration of hospitals andpromotion of earthquake resistance・ Work-life balance, health of staff, etc.

Specific Actions

Highly relevant SDGs

・ Green lease (Kobe Gakuentoshi Building)・ Renovation work for improving the efficiency of
air conditioning system using subsidies(GreenLife Moriguchi and Kobe Gakuentoshi Building)・ Use of Environmentally Friendly Materials (GreenLife
Moriguchi)・Landslide Prevention Measures (Hanakotoba Oppama)・ Introduced EGAO link, a system for enhancing efficiencyof nursing care services (ASHEIM Hikarigaoka and
ASHEIM Bunkyohakusan)
・ Operator employment support for people with disabilities(GreenLife Moriguchi, SHIP SENRI BUILDING)
・ Tenant (Operator) Satisfaction Surveys
・ Employee satisfaction survey at the Asset Management
Company, continued implementation of Premium Friday,
introduction of a corporate-type defined contribution plan,and introduction of sick leave
・ Separation of Executive Director of HCM and CEO of theAsset Management Company (resolved at the investors
meeting in October 2020)

・ Establishment of a system in which an external third
party periodically verifies the operation status of thewarehousing rules in order to appropriately manage
・ Fair transaction (Appropriate management of conflicts
transactions with interested parties.
of interest)
・ Transparency in decision making

Governance・ Management of various risks (including elimination of ・ Continue to share examples of initiatives taken by eachantisocial forces)
department and exchange opinions at the "CustomerOriented Committee” of the Asset Management Company
・ Monthly compliance workshops held at the asset
management company

26

Ⅴ ESG Initiatives

2. Environment
Use of Environmentally Friendly Materials

External Evaluation/Environmental Certification



GRESB
Participation in the GRESB from 2022
HCM received a "1 Star" rating in the
GRESB Real Estate Assessment andthe highest "A Level" rating in the
GRESB Public Disclosure.



TCFD Recommendations
In March 2023, HCM announced its support for TCFD
(Task Force on Climate-related Financial Disclosure) andparticipated in the TCFD Consortium, an organization ofdomestic TCFD supporting companies

BELS Evaluation
2 properties have been rated by BELS(Building-housing
Energy-efficiency Labeling System)
Improving Resilience (adaptability to disasters, etc.)Environmentally friendly products were used when replacing
the floors（GreenLife Moriguchi）
 Half the amount of products weight consists of recycledmaterials, which reduced CO₂ emissions（recycled from discarded agricultural vinyl and scrap
materials generated during manufacturing）
 Easy to clean flooring, which improved sanitation
 Improved safety due to fewer steps


Although safety measures such as spraying mortar andinstalling a retaining wall had already been implemented tothe steep slopes extending from east to south side ofbuilding, HCM acquired the property only after the seller
implemented additional landslide prevention measures tostrengthen safety for the sake of long-term investment in
the healthcare facility.（Hanakotoba Oppama）【Before the implementingof the measures】

Area of flooring materials used

2,328 ㎡

Gross weight of flooring materials

20.5 Ton
CO₂ emissions

17.7 Ton

Ratio of recycled materials

50 ％Reduction ratio of CO₂ emissions

53 ％Usage of recycled materials

10.2 Ton
Reduction amount of CO₂ emissions

9.4 Ton*Reduction ratio of CO₂ emissions means the comparison to the same merchandise without recycled materials.

（Image of recycle）（Image of durable UV resin coating ）【After the implementingof the measures】

27

Ⅴ ESG Initiatives

3. Social
Stakeholder Engagement

System Investment Utilizing ICT(EGAO link)Introduced a system capable of understanding of situation,
input records, and response to calls with smartphone,supported the improvement of efficiency of nursing careservices.(ASHEIM Hikarigaoka, ASHEIM Bunkyohakusan)

HAM conducts a satisfaction survey of operators of its
properties on a regular basis (in principle once a year), andshares the results of this survey (requests, issues, etc.) withthe property management company to improve operator
satisfaction.
Survey results (conducted in February 2023)
Survey collection rate

Satisfaction NPS（Number of satisfaction－
Number of dissatisfaction ）2%
31%
Plus 31/46 properties

Answers 46/
46 properties

67%
100%
Answer Effect of Introduction of EGAO link
The quality of nursing care services is expected to improvethrough the improvement of business efficiency of nursing carestaff and the reduction of work burden through ICT investments.

No answer

Plus

Minus

NeutralInterviews with operators in the asset management report(optional page) introducing operatorsʼ features and initiatives.

Initiatives at HAM


Employee satisfaction survey
aims to pleasant work environment and increase productivity

Work-life balance and Benefits
encouraging to take paid leave
introduction of sick leave
introduction of cumulative investment system and corporate
defined contribution pension planSupport for qualification acquisition
assistance with expenses related to the acquisition ofqualifications as Real Estate Notary, ARES Certified Master,
Medical Management Specialist, etc.

28

Ⅴ ESG Initiatives

4. GovernanceDecision-Making Flow Concerning Acquisition of Assets Under
Management

Basic Management Policy
Implementation of customer-oriented business operation- HAM established the “Customer-Oriented Committee”.
 Strengthening autonomous compliance framework- Holding monthly compliance workshops.(More than 20
times a year)Appropriate Management of Conflicts of Interest


Related party is defined in broader terms than interested party,
etc. under the Investment Trust Law, and established a system
to carry out transactions through rigorous screening
procedures.
interested party, etc.
under theInvestment Trust Law

Investment Department

Proposal of acquisition plan by the Investment Department(Property due diligence by the Investment Department)

When the candidate asset under management to be

When the candidate asset under management to beacquired is a healthcare facility or hospital real estate

acquired is a property other than healthcare facility
or hospital real estate
Healthcare Business Promotion Department or External Experts (if necessary)
Preparation of evaluation reports about the management status of a facility
and submission to the Investment Department

Compliance Officer (CO) [ Responsible for compliance ]Confirmation by Compliance Officer of existence or non-existence of issues on legal compliance and other compliance(hereinafter, "legal compliance issues")

Instructions forcancellation orchangeofcontent

When the transaction falls under the category of related-party transactio,or if the ComplianceOfficer judges that it is necessary to consider the lecompliance issues concernig the proposed income plan

related party

Compliance Committee[Held prior to the Management Committee meeting when there is a related-party
transaction or legal compliance issue.]
Deliberation and resolution of the existence or non-existence of legal compliance issues by

Acquisition fee for property acquisition from related party andDisposition fee for property disposition to related party

the Compliance Committee.
Committee members: President & CEO, Full-time Director, Compliance Officer,
External member (External lawyer)

Acquisition or Disposition price×0.5%（usually 1.0%）is upper limit

Resolution requirements: Resolution by approval of a majority of attending committee
members; however, attendance and approval of the CO and

Separation of Executive Director of HCM and CEO of the AssetManagement Company



From November 1, 2020, the system in which CEO of asset
management company concurrently serves as executive
director of HCM was dissolved.
Investment corporation

asset

managementcompany

external committee member are required.
Management Committee[The final decision-making body for investment decisions, it deliberates and resolves on HCM's property acquisitions,etc., as delegated by the Board of Directors.]＊However, if the proposed acquisition plan falls under the category of interested-party transaction, which requires theapproval of HCM's Board of Directors under the Investment Trusts Act, such prior approval will be obtained.
Deliberation and resolution at the Management Committee (The Compliance Officer may order the suspension ofdeliberation and resolution by the Management Committee when it is judged that there are issues such as legal violationin the procedures of proceedings and the content of deliberation.)
Committee members: President & CEO, Full-time Director, Head of each department, External member (External Licensed
Real Estate Appraiser), CO (without voting rights)
Resolution requirements: A resolution must be passed with at least three-fourths of the committee members in attendancAppropriate
check and balance
Executive Director

Yuji Fujise

and the approval of at least three-fourths of the committee members in attendance (however, texternal committee members must approve).

CEO

Seiji Yoshioka

Board of Directors of HAM and HCM
Reportiong to the Board of Directors of HAM and HCM(However, if the proposed acquisition plan falls under the category of transaction with interested party, etc. that
requires approval of HCM's Board of Directors based on the Investment Trust Act, prior approval of the HCM's Board of
Directors shall be obtained.)29

Environment Surrounding
the Healthcare Industry30

Ⅵ Environment Surrounding the Healthcare Industry

1. Supply and Demand of Healthcare Facilities
Rising Elderly Ratio and Increase in Elderly Single
Households

Upgrades and Expansion of Healthcare Facilities
June
Backedby Government Policy
2015

Outlook of Change in Japanʼs Population and Elderly Ratio
75 years old or older
64 years old or younger
Ratio of 65 years old and over

(10 thousand people)

15,00010,161

10,00010,71814.5%

10,854
5,000

10.3%

0

776 3.9%
471

1,109
717

1985

1995

5.7%

1,407
1,160

26.3%

9.1%

2005

Estimate

8,673

8,788
14.5%

12.7%

32.3%

29.6%

28.0%

9,218

2…

65-74 years old
Ratio of 75 years old and over

Actual

17.5%

40%
36.3%

March
2021

30%

1,734
1,613

1,709
1,825

1,498
2,155

1,535

1,668

2,238

2,277

2015

2020

2025

2035

2045

10%
0%

Ratio of Housing for the Elderly as a Percentage of the Elderly Population
Outcomeindicator

the National Institute of Population and Social Security Research

Ratio of Elderly Single Households in Elderly Households
その他
Other

30,000

夫婦のみ
Couple with noother members
Actual

単独
Single

単独⾼齢者割合
Ratio of single elderly

Estimate

37.4%
20,000

24.8%
9,022

10,000
5,525
4,791

0

2010

2010年

27.3%

29.6%

39.0%

40%

9,365

9,090

6,756

6,606

6,510

6,848

6,763

6,693

6,666

6,420
5,928

6,717

2015

2015年

2020

2020年

7,959

2025

2030

2025年

2030年

8,418
2035

2035年

Resident Capacity

Resident Capacity

Resident Capacity（Note）

230

thousand people

thousand people

thousand people

2005

2014

2018

50%

40.0%

35.7%

7,512

A target to raise the ratio of housing for the elderly
as a percentage of the elderly population to 4% by
2030 was set.

7,891 19.2% 6,935 20.9%20%

Source: Statistics Bureau, Ministry of Internal Affairs and Communications “2020 census“ and “Population Projection for Japan (2023 projection)” by(Thousand households)

Housing Life Basic Plan
(nationwide plan)

6,590

30%

thousand people

20%

6,870

0.9％

10%

8,963

0%

2040

890

690

Resident Capacity

1,490
2030

４％

2.5％

2.1％

(Note) Resident capacity is estimated based on the outcome indicator for the ratio of housing for the elderly
as a percentage of the elderly population.

2040年

Source: Statistics Bureau, Ministry of Internal Affairs and Communications “2020 census“ and “Household Projection for Japan (Nationwide Projection)”(2018 projection) by the National Institute of Population and Social Security Research

Promotion of Further Supply of Healthcare Facilities

Current Status of Reconstruction of Hospitals, etc.

Although supply of facilities and housing for the elderly is on the rise each year, the supply
rate of paid nursing homes against the elderly population was a mere 1.8% in 2021, andpromotion of further supply is needed.
(people)Supply Status of Paid Nursing Homes
Resident capacity

600,000
400,000

1.5%

1.6%

1.6%

1.7%

1.8%

1.0%

1.1%

1.2%

1.3%

315,234

350,990391,144424,828

482,792

518,507552,350

576,116

609,472

634,395

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

0.75%

0.77%

1.5%

Supply Status of Serviced Housing for the Elderly
Number of units
0.50%

0.57%

Number of hospitals whose seismic resistance of buildings is unknown
Number of hospitals where all buildings are not earthquake resistant
Number of hospitals with earthquake resistance in some buildings
Number of hospitals with earthquake resistance in all buildings

0.5%
0.0%

0

200,000

2.0%

1.0%

200,000

300,000

Ratio of quake-resistant paid nursing homes is 95% or more while that ofquake-resistant hospitals remains at 77.3%.
Quake-resistant statues of hospitals


Supply rate for 65 years ole or older
1.4%

Hospitals that were constructed in the 1960ʼs and 1970ʼs and do not meetthe earthquake resistance standards still exist.



Supply rate for 65 years ole or older
0.72%
0.70%
0.67%
0.64%
0.61%

1.00%

8,000
6,000

1,955

1,747

1,569

1,466

122
729

131
719

141
704

141
674

1,344
123
664

1,344
113
633

1,153
100
619

1,070
99
586

5,687

5,880

6,050

6,130

6,231

6,318

6,382

6,467

2014

2015

2016

2017

2018

2019

2020

2021

4,000

0.42%

0.50%
2,000

100,000
135,352

166,279

191,871

210,859

225,374

238,289

250,352

262,021272,870

280,384

00.00%
2013 Dec. 2014 Dec. 2015 Dec. 2016 Dec. 2017 Dec. 2018 Dec. 2019 Dec.2020 Dec. 2021 Dec. 2022 Dec.

0

surveysurveysurveysurveysurveysurveysurveySource: Ministry of Health, Labor and Welfare “Survey of hospital seismic repairs (2021 survey)”

survey31

Ⅵ Environment Surrounding the Healthcare Industry

2. Regional Comprehensive Care System
Regional Comprehensive Care System○ We will establish a regional comprehensive care system that provides residences, medical care, nursing care, preventative medicine and life support in an
integrated manner to offer an environment where the elderly can continue living in an area they are used to, even after they come to require nursing care,in around 2025 when the baby-boomer generation will be 75 or older.
○ Establishment of a regional comprehensive care system is necessary to support the lives in regions where elderly with dementia live as the number of
elderly with dementia is expected to increase in the future.
○ There is a large regional difference concerning the progress of aging. There are, for example, large cities with the overall population remaining flat but the
population of people aged 75 years old or older increasing rapidly and rural areas with the population of people aged 75 years old or older increasingslightly although the overall population decreasing.
It is necessary for municipalities and prefectural governments, which are the insurer, to create a regional comprehensive care system based on autonomy
and independence and in accordance with regional characteristics.

Image of Regional Comprehensive Care System
When you get sick...
Medical care••

When you need nursing care...
Nursing careAcute care hospital
Subacute and recovery phase/recovery
phase rehabilitation hospital

Hospital visit&
stay

Daily medical care:• Primary care doctor• Regional cooperative
hospital

Outpatient nursing care&admission

Residence• Regional comprehensive
support center• Care manager

 In-home service:• Long-term home-visit nursing care, home-visit nursing,outpatient day long-term nursing care
• Multifunctional long-term nursing care in a small grouphome• Short-term admission for daily life long-term nursing care
• 24-hour home-visit service• Combined service(Multifunctional long-term nursing care in a small grouphome + home-visit nursing), etc.
 Nursing care prevention service••
We coordinate consultation
business and services

Own house
Serviced housing for the elderly, etc.

 Facility and home service• Long-term care welfare facility
for the elderly• Long-term care health facility forthe elderly• Communal daily long-term
nursing care for a dementia
patient• Daily life long-term nursing carefor those admitted to a specified
facility, etc.

Patients
with dementia

To live a healthy life forever...

Life support & nursing care prevention* Regional comprehensive care systems are expected to beestablished for each area in the sphere of everyday life
(specifically junior high school districts) where necessary
services are provided within about 30 minutes

Golden age club, local government, volunteer, NPO, etc.
Source: Website of Ministry of Health, Labor and Welfare32

Ⅵ Environment Surrounding the Healthcare Industry

3. Regional Healthcare Vision“Regional Healthcare Vision” is to estimate and stipulate medical demand (number of patients) and required number of beds in 2025 for each
medical function in each area of the vision (secondary medical area) in order to promote functional differentiation and coordination of
hospital wards.
Following this, prefectural governments and medical staff will respond to realize the formulated initiative.

Current hospital bed functions(as of 2020)(Hospital Ward A)

Total 1.209 million beds

Medical institution

Advanced acutestage function

Distortion of
medical balance
and financial
concerns due tooveremphasis on
advanced acutestage

Number of Beds to be Requiredin 2025

Advanced acute stage
156,000 beds
(13%)

Total 1.191 million beds (Note)

Decrease by approx. 25%(Hospital Ward B)

Voluntarily
selectmedicalfunction

Acute stage
function

Acute stage
401,000 beds
(34%)
Acute stage
547,000 beds
(45%)

(Hospital Ward C)
Recovery stage
function

Recovery stage
375,000 beds
(31%)

(Hospital Ward D)
Chronic stage
function

Increase by approx. 2 times

Recovery stage
189,000 beds
(16%)

Prefectural
government

Advanced acute stage
131,000 beds
(11%)

Report current status andfuture direction of medical
functions

Decrease by approx. 10%

Chronic stage
317,000 beds
(26%)

Establish “Regional Healthcare Vision” by utilizing reports on medical
functions, etc. and promote further functional differentiation

Shift to nursing carefacilities, in-home medicalcare, etc.

Chronic stage
284,000 beds
(24%)

Nursing care facilities, inhome medical care, etc.
Approx.
300,000 people(Source) Prepared by the Asset Management Company based on “Initiatives for Medical/Nursing Care
Reform” (June 22, 2017) by the Ministry of Health, Labour and Welfare(Note 1) The upper chart is prepared by the Asset Management Company based on the “Community Healthcare Initiative”
of the Ministry of Health, Labour and Welfare.

(Note)

Total of Cabinet Secretariatʼs estimates (June 2015). Within the range of 1.148 million beds
to 1.191 million beds.

33

Ⅵ Environment Surrounding the Healthcare Industry

4. Facilities and Housing for the Elderly

Characteristics

Mainfounder

Paid nursing homes with careservice

These are paid nursing homes for the elderly that fall under the prefectural governmentʼs designation of “Daily Life
Long-Term Care Admitted to a Specified Facility” for long-term insurance. Facility staff provide nursing care services
when residents need nursing care, and the nursing care fee is a fixed amount (fixed) based on the level of nursing
care required for respective residents. Facilities must be designated in order to open (restrictions apply).

For-profit
Entities

Residential type paid nursing
homes

Unlike paid nursing homes with care service, these are paid nursing homes for the elderly in which residents
themselves enter separate contracts with external operators to receive nursing care services in the case they neednursing care. The nursing care fee is based on the amount of nursing care services the resident used (variable).
Facilities need to notify the government in order to open.

For-profit
Entities

Serviced housing for the elderly(Sakouju)

This is rental housing for the elderly that meets registration standards for size, facilities, etc. At a minimum, it must
provide safety confirmation and living consultation services. Facilities must register in order to open.

For-profit
entities

Long-term daily care fordementia patients in communal
living situation(Group homes)

These are one type of community-based long-term care service business stipulated by the Long-Term Care
Insurance Act. Their purpose is to delay the progress of dementia of users, who are people requiring nursing careand in the state of dementia, through communal living in small groups of up to nine people per unit with assistanceand functional training.

For-profit
Entities

Facilities covered by public aid
providing long-term care to theelderly(intensive care homes for theelderly)

These are welfare facilities for the elderly for people requiring nursing care on a continual and steady basis but havedifficulty receiving it at home. With stricter admission requirements since April 2015, these facilities in principle
target elderly people requiring long-term care level 3 or higher.

Social welfare
corporations

Geriatric health services facilities

These are facilities to provide medical treatment, nursing care under medical supervision, functional training andother necessary medical services as well as everyday care with the aim of returning people requiring nursing care toa self-independent state and living at their own homes.

MedicalCorporations

Integrated facilities for medical
and long-term care

Established in April 2018, these are facilities that provide everyday medical supervision, a certain level of nursing
care and residential functions to elderly people who require long-term recuperation. End-of-life care and deathwatch
are also available.

MedicalCorporations

Type

34

Appendix

35

Ⅶ Appendix

Portfolio Map
Ratio of investment inthree major
metropolitan areas

82.9%
Strategic
investment inthree major
metropolitan
areasTokyo metropolitan area
39
21

7
3
9
20

8

33

15

31
14

2
10

37 38 3427 26 25
23

45.3%
Kinki area 37.6%
Core cities14.9%
Other areas 2.2%

1

34

22
17
34

2 19 1

16

35

1
1 18

30
29

35

4142
40
36

13
12
11

Paid nursing
home

5

24 44

43

28
32
Serviced housing
for the elderly
Medical servicerelated facilities,
etc.

Complex of paid
nursing homes,
medical servicerelated facilities, etc.

SOMPO CARE La vie Re
Kobe-ikawadani
SOMPO CARE Sompo no ie
Sayama1

AQUAMARINE
Nishinomiyahama

2

Bonsejour Chitose-funabashi

3

Bonsejour Hino

4

Bonsejour Musashi-shinjo

5

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

7

ASHEIM Hikarigaoka

8

ASHEIM Bunkyohakusan

9

SOMPO CARE La vie Re
Machidaonoji
SOMPO CARE La vie Re
Azamino10

Paid nursing
home

11

SAWAYAKA Tachibanakan

12

SAWAYAKA Mekarikan

13

SAWAYAKA Tagawakan

14

GOOD TIME HOME Fudo-mae

15Bonsejour Yotsugi

16
17

Medical Home Bonsejour
Itami
Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

18

GreenLife Moriguchi

36

Royal Kawaguchi

19

Hapine Kobe Uozaki Nibankan

37

NOAH GARDEN LEGEND

20Granda Tsuruma-Yamato

38

NOAH GARDEN L Grace

21

Smiling Home Medice Adachi

39

NOAH GARDEN Season Bell40

22Heartland Kawaguchi Meiseien

Aikoen Ichibankan Building(Aikoen Ichibankan)

41

Rehabilitation Home
Granda Minamiurawa

23

Hanakotoba Minami

24

Hanakotoba Miura

42

Madoka Minamiurawa

43

25

Nichii Maison Inage

SOMPO CARE La vie Re
Hama-Kawasaki

44

Hanakotoba Oppama

26

Hanakotoba Shin-Yokohama

27

1

SOMPO CARE Sompo no ie S
Awajiekimae

Hanakotoba Shin-YokohamaII

28

Hanakotoba Odawara

29

Verde Minowa

30

Verde Hotaka

31

Sunny Life Kita-Shinagawa

32

Sunny Life Kamakura

33

Nichii Home Nishikokubunji

3

SOMPO CARE Sompo no ie S
Kobekamisawa
NOAH GARDEN CASA RICH

1

Niigata Rehabilitation Hospital

2

1

SHIP SENRI BUILDING36

Ⅶ Appendix

Details of Portfolio①
Paid nursing home

4

5

1

2

3

AQUAMARINE
Nishinomiyahama

Bonsejour Chitose-funabashi

Bonsejour Hino

Bonsejour Musashi-shinjo

Medical Rehabilitation Home
Bonsejour Hadanoshibusawa

Location

4-15-2 Nishinomiyahama,Nishinomiya-shi, Hyogo

1-37-3 Funabashi,
Setagaya-ku, Tokyo

438-1 Ochikawa,
Hino-shi, Tokyo

773-2 Chitose, Takatsu-ku,
Kawasaki-shi, Kanagawa

1-6-60 Shibusawakami,
Hadano-shi, Kanagawa

Nearest station

Hanshin Nishinomiya Stationon the Hanshin Main Line

Chitose-Funabashi Stationon the Odakyu Odawara Line

Mogusaen Stationon the Keio LineMusashi-Shinjo Stationon the JR Nambu Line

Shibusawa Station
on Odakyu Odawara Line

Construction completion

May 2007

March 1988

May 1990

February 1985

July 1991

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Appraisal NOI (Note 1)

117 million yen

48 million yen

43 million yen

39 million yen

47 million yen

Appraisal NOI yield (Note 1)

6.0％

5.9％

6.0％

6.8％

6.5％

Appraisal value (Note 1)

2,100 million yen

997 million yen

834 million yen

643 million yen

850 million yen

Acquisition price (ratio)

1,950 million yen (2.5%)

824 million yen (1.0%)

724 million yen (0.9%)582 million yen (0.7%)728 million yen (0.9%)

Site area

2,587.93 m²

1,020.92 m²

2,211.28 m²

1,233.49 m²

2,588.04 m²

Leasable area

5,274.54 m²

2,342.17 m²

1,984.17 m²

1,710.43 m²

3,435.79 m²

Structure/
number of floors (Note 2)

RC, 5F

RC, B1 6FRC, 3FRC, 4FRC, 5F

Number ofrooms/resident capacity

90 rooms, 100 people

42 rooms, 47 people

56 rooms, 58 people

46 rooms, 49 people

100 rooms, 101 people

occupancy rate (Note 3)

100.0%

78.7%

98.3%

83.7%

92.1%

Operator

GREEN LIFE

Benesse Style Care

Benesse Style Care

Benesse Style Care

Benesse Style Care

Remaining years of leaseagreement (Note 4)

13.8 years

2.8 years

2.8 years

3.3 years

3.8 years

37

Ⅶ Appendix

Details of Portfolio②
Paid nursing home

)

7

8

9

10

ASHEIM Hikarigaoka

ASHEIM Bunkyohakusan

SOMPO CARE La vie Re
Machidaonoji

SOMPO CARE La vie Re
AzaminoLocation

4-3-23 Yahara,
Nerima-ku, Tokyo

4-36-13 Hakusan,
Bunkyo-ku, Tokyo

Nearest station

Shakujii-Koen Stationon the Seibu Ikebukuro Line

Hakusan Stationon the Toei Subway Mita Line

Construction completion

March 2006

February 2007

Acquisition period

Fiscal period ended July 2015

Appraisal NOI (Note 1)

1612 Onojimachi,
Machida-shi, Tokyo
Keio Nagayama
OdakyuNagayama
Stationon the Keio
Stationon the Odakyu
Sagamihara
Tama LineLine

11
SAWAYAKA Tachibanakan

19-24 Ayumigaoka, Tsuzuki-ku,
173-15 Oaza Ryugeji,
Yokohama-shi, Kanagawa
Hakata-ku, Fukuoka-shi, Fukuoka
Nakagawa Stationon the Yokohama Municipal
Subway Blue Line

Sasahara Stationon the JR Kagoshima Honsen
Line

October 2007

March 2004

October 2005

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

76 million yen

74 million yen

192 million yen

156 million yen

93 million yen

Appraisal NOI yield (Note 1)

5.5％

5.2％

5.3％

5.1％

6.1％

Appraisal value (Note 1)

1,600 million yen

1,790 million yen

4,230 million yen

3,560 million yen

1,640 million yen

Acquisition price (ratio)

1,385 million yen (1.7%)

1,430 million yen (1.8%)

3,580 million yen (4.5%)

3,050 million yen (3.8%)

1,520 million yen (1.9％)

Site area

2,868.46 m²

540.29 m²

7,404.13 m²

2,748.64 m²

3,359.66 m²

Leasable area

3,628.60 m²

2,507.25 m²

7,720.17 m²

5,789.25 m²

5,652.94 m²

Structure/
number of floors (Note 2)

RC, 3FRC, 8F

RC, B1 6F

RC, B1 5F

RC, B1 6F

Number ofrooms/resident capacity

83 rooms, 89 people

50 rooms, 52 people

163 rooms, 169 people

145 rooms, 145 people

104 rooms, 104 people

occupancy rate (Note 3)

86.5%

90.4%

80.5%

95.9%

98.1%

Operator

AS PARTNERS

AS PARTNERS

Sompo Care Inc.

Sompo Care Inc.

Sawayaka Club

Remaining years of leaseagreement (Note 4)

10.6 years

3.6 years

4.2 years

3.9 years

4.5 years

38

Ⅶ Appendix

Details of Portfolio③
Paid nursing home

16

12

13

14

15

SAWAYAKA Mekarikan

SAWAYAKA Tagawakan

GOOD TIME HOME Fudo-mae

Bonsejour Yotsugi

Medical Home Bonsejour Itami

1-9-15 Okubo, Moji-ku,
Kitakyushu-shi, Fukuoka
Mojiko Stationon the JR Kagoshima HonsenLine393-1 Oaza Ita,
Tagawa-shi, Fukuoka
Magarikane Stationon the Heisei Chikuho Railway
Tagawa Line

5-25-13 Nishigotanda,
Shinagawa-ku, Tokyo

3-1-11 Higashiyotsugi,
Katsushika-ku, Tokyo
Yotsugi Stationon the Keisei Railway OshiageLine

1-2-25 Chuo,
Itami-shi, Hyogo
Hankyu Itami Stationon the Hankyu Railway Itami
Line

Construction completion

November 2005

January 2006

March 1992

March 1989

March 1989

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2016

Fiscal period ended July 2016

Appraisal NOI (Note 1)

85 million yen

25 million yen

91 million yen

47 million yen

38 million yen

Appraisal NOI yield (Note 1)

6.2％

6.4％

5.2％

5.7％

7.5％

Appraisal value (Note 1)

1,480 million yen

405 million yen

2,100 million yen

905 million yen

557 million yen

Acquisition price (ratio)

1,380 million yen (1.7％)

390 million yen (0.5％)

1,740 million yen (2.2%)

824 million yen (1.0%)

514 million yen (0.6%)

Site area

3,758.26 m²

4,300.90 m²

1,206.60 m²

1,136.46 m²

1,976.11 m²

Leasable area

4,720.46 m²

2,366.20 m²

3,400.20 m²

1,962.89 m²

2,129.87 m²

Structure/
number of floors (Note 2)

RC, 4FRC, 3F

RC, B1 5F

RC, 5F

SRC, 11F (Exclusive portion)

Number ofrooms/resident capacity

95 rooms, 95 people

60 rooms, 60 people

61 rooms, 67 people

61 rooms, 65 people

62 rooms, 64 people

occupancy rate (Note 3)

78.9%

96.7%

85.1%

83.1%

82.8%

Operator

Sawayaka Club

Sawayaka ClubJAPAN LIFEDESIGN

Benesse Style Care

Benesse Style Care

Remaining years of leaseagreement (Note 4)

4.5 years

4.5 years

3.3 years

2.4 years

3.8 years

Location
Nearest station

Fudo-mae Stationon the Tokyu Meguro Line39

Ⅶ Appendix

Details of Portfolio④
Paid nursing home

21

17

18

19

20

Kobe Gakuentoshi Building(Hapine Kobe Gakuentoshi)

GreenLife Moriguchi

Hapine Kobe Uozaki Nibankan

Granda Tsuruma-Yamato

Smiling Home Medice Adachi

2-3-41 Shimotsuruma,
Yamato-shi, Kanagawa

3-35-10 Minamihanabatake,
Adachi-ku, Tokyo

Tsuruma Stationon the Odakyu Enoshima Line

Rokucho Stationon the Tsukuba Express

Location

1-1-2 Gakuennishimachi,
Nishi-ku, Kobe-shi, Hyogo

6-17-34 Satanakamachi,
8-10-7 Uozakiminamimachi,
Moriguchi-shi, Osaka
Higashinada-ku, Kobe-shi, Hyogo
Dainichi Stationon the Osaka Municipal Subway
Uozaki Station
Tanimachi Line and Osakaon the Hanshin Electric Railway
Monorail

Nearest station

Gakuentoshi Stationon the Kobe Municipal Subway
Seishin-Yamate Line

Construction completion

January 2009

September 2006

March 2010

March 1998

November 2005

Acquisition period

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Fiscal period ended July 2017

Appraisal NOI (Note 1)

226 million yen

220 million yen

48 million yen

52 million yen

118 million yen

Appraisal NOI yield (Note 1)

5.2％

5.3％

5.2％

5.2％

5.2％

Appraisal value (Note 1)

4,700 million yen

4,750 million yen

1,030 million yen

1,030 million yen

2,500 million yen

Acquisition price (ratio)

4,320 million yen (5.5%)

4,150 million yen (5.2%)

930 million yen (1.2%)

1,000 million yen (1.3%)

2,253 million yen (2.8%)

Site area

2,742.81 m²

5,872.83 m²

932.94 m²

2,877.11 m²

2,069.41 m²

Leasable area

12,636.48 m²

8,356.85 m²

1,772.89 m²

3,427.08 m²

3,870.98 m²

Structure/
number of floors (Note 2)

RC, B1 9F

S RC, 9F

S, B1 4F

RC S, 5FRC, 4F

Number ofrooms/resident capacity

131 rooms, 138 people

155 rooms, 189 people

47 rooms, 47 people

73 rooms, 90 people

82 rooms, 82 people

occupancy rate (Note 3)

99.3%

100.0%

100.0%

73.3%

96.3%

Operator

GREEN LIFE

GREEN LIFE

GREEN LIFE

Benesse Style Care

GREEN LIFE HIGASHI NIHON
Co., Ltd.

Remaining years of leaseagreement (Note 4)

17.6 years

16.2 years

17.6 years

0.6 years

13.5 years

40

Ⅶ Appendix

Details of Portfolio⑤
Paid nursing home

22

23

24

25

26

Aikoen Ichibankan Building(Aikoen Ichibankan)

Hanakotoba Minami

Hanakotoba Miura

SOMPO CARE La vie Re
Hama-Kawasaki

Hanakotoba Shin-Yokohama

Location

1-3239-1 Tamachi, Chuo-ku,
Niigata-shi, Niigata

2-4-38 Shinkawacho,
Minami-ku, Yokohama-shi,
Kanagawa

3-5 Suwacho,
Miura-shi, Kanagawa

23-1 Tajimacho, Kawasaki-ku,
Kawasaki-shi, Kanagawa

Nearest station

Niigata Stationon the JR Shinetsu Main Line

Yoshinocho Stationon the Yokohama Municipal
Subway Blue Line

Misakiguchi Stationon the Keikyu Kurihama Line

Odasakae Stationon the JR Nambu Line

Construction completion

February 2010

February 2010

June 2007

March 2007

March 2004

Acquisition period

Fiscal period ended July 2017

Fiscal period ended July 2019

Fiscal period ended July 2019

Appraisal NOI (Note 1)

43 million yen

56 million yen

35 million yen

89 million yen

109 million yen

Appraisal NOI yield (Note 1)

5.6％

5.2％

5.6％

5.2％

5.2％

Appraisal value (Note 1)

827 million yen

1,270 million yen

682 million yen

1,850 million yen

2,520 million yen

Acquisition price (ratio)

770 million yen (1.0%)

1,071 million yen (1.4%)

615 million yen (0.8%)

1,710 million yen (2.2%)

2,071 million yen (2.6%)

Site area

2,597.52 m²

428.76 m²

1,017.55 m²

2,832.33 m²

894.00 m²

Leasable area

4,311.20 m²

1,710.68 m²

1,959.64 m²

4,060.21 m²

5,230.23 m²

Structure/
number of floors (Note 2)

S, 5F

RC, 7FRC, 4FRC, 4F (exclusively-owned
portion)RC, 9F

Number ofrooms/resident capacity

90 rooms, 90 people

50 rooms, 50 people

53 rooms, 54 people

58 rooms, 58 people

136 rooms, 136 people

occupancy rate (Note 3)

95.6%

94.0%

94.4%

89.7%

91.9%

Operator

Medical Corporation AIKOKAI

Proud Life Inc.

Proud Life Inc.

Sompo Care Inc.

Proud Life Inc.

Remaining years of leaseagreement (Note 4)

13.0 years

9.3 years

9.3 years

4.4 years

9.3 years

Fiscal period ended January 2019 Fiscal period ended January 2019

1-11-5 Shinyokohama,
Kohoku-ku, Yokohama-shi,
Kanagawa
Shin-Yokohama Stationon the Yokohama Municipal
Subway Blue Line and the JR
Yokohama Line41

Ⅶ Appendix

Details of Portfolio⑥
Paid nursing home

Location

Nearest station

27

28

29

30

Hanakotoba
Shin-Yokohama II

Hanakotoba Odawara

Verde Minowa

Verde Hotaka

1-11-11 Shinyokohama, Kohokuku,
Yokohama-shi, Kanagawa
Shin-Yokohama Stationon the Yokohama Municipal
Subway Blue Line and the JR
Yokohama Line

3-9-12 Sakawa,
Odawara-shi, Kanagawa

31
Sunny Life Kita-Shinagawa

839-4 Aza Machiyabo, Kamishiba,
1221 Aza Maebara, Oaza
3-8-6 Kitashinagawa, ShinagawaMisatomachi, Takasaki-shi,Namashina, Kawaba-mura, Toneku, Tokyo
Gunma
gun, Gunma

Kamonomiya Stationon the JR Tokaido Line

Takasaki Stationon the JR Takasaki Line

Numata Stationon the JR Joetsu Line

Shimbamba Stationon the Keikyu Line

Construction completion

April 2007

September 2009

November 2003 (Building 1)
February 1974 (Building 2)

September 1982 (Building 1)
July 1989 (Building 2)

September 2018

Acquisition period

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Fiscal period ended July 2019

Appraisal NOI (Note 1)

21 million yen

49 million yen

109 million yen

91 million yen

90 million yen

Appraisal NOI yield (Note 1)

5.8％

5.6％

6.7％

6.8％

4.9％

Appraisal value (Note 1)

384 million yen

964 million yen

1,730 million yen

1,450 million yen

2,090 million yen

Acquisition price (ratio)

375 million yen (0.5%)880 million yen (1.1%)

1,620 million yen (2.0%)

1,328 million yen (1.7%)

1,825 million yen (2.3%)

Site area

375.00 m²

1,202.12 m²

７,920.29 m2

4,375.31 m²

1,105.12 m²

Leasable area

1,837.29 m²

2,203.42 m²

11,098.17 m²

6,352.86 m²

2,135.54 m²

Structure/
number of floors (Note 2)

RC, B1 7FRC, 4F

S, 5F (Building 1)
S RC, 8F (Building 2)

S SRC, 5F (Building 1)
S, 2F (Building 2)

S, 3F

Number ofrooms/resident capacity

29 rooms, 30 people

60 rooms, 65 people

174 rooms, 206 people

121 rooms, 174 people

66 rooms, 66 people

occupancy rate (Note 3)

100.0%

98.5%

95.1%

98.3%

86.4%

Operator

Proud Life Inc.

Proud Life Inc.

Verde Corporation

Verde Corporation

Kawashima Corporation

Remaining years of leaseagreement (Note 4)

9.3 years

9.3 years

3.8 years

3.8 years

20.2 years

42

Ⅶ Appendix

Details of Portfolio⑦
Paid nursing home

32

33

34

35

36

Sunny Life Kamakura

Nichii Home Nishikokubunji

SOMPO CARE La vie Re
Kobeikawadani

SOMPO CARE Sompo no ie
SayamaRoyal Kawaguchi

Location

214-4 Aza Kichime, Kamimachiya,
Kamakura-shi, Kanagawa

2-11-22 Nishikoigakubo,
Kokubunji-shi, Tokyo

548-1 Minaminoda, Higashi-ku
Sakai-shi, Osaka

2-5-24 Aoki,
Kawaguchi-shi, Saitama

Nearest station

Shonan-Machiya Stationon the Shonan Monorail

Nishikokubunji Stationon the JR Chuo Line

Sayama Stationon the Nankai Koya Line

Kawaguchi-Motogo Stationon the Saitama Railway

Construction completion

September 2014

September 1990

August 2005

October 2008

Acquisition period

Fiscal period ended July 2020

Fiscal period ended July 2021

Fiscal period ended July 2022

Fiscal period ended July 2022

Fiscal period ended July 2022

Appraisal NOI (Note 1)

76 million yen

36 million yen

63 million yen

32 million yen

62 million yen

Appraisal NOI yield (Note 1)

5.3％

5.0％

4.9％

5.4％

4.9％

Appraisal value (Note 1)

1,620 million yen

777 million yen

1,300 million yen

647 million yen

1,340 million yen

Acquisition price (ratio)

1,418 million yen (1.8%)

720 million yen（0.9％）

1,288 million yen（1.6％）

600 million yen（0.8％）

1,260 million yen (1.6%)

Site area

2,055.67 m2

1,948.41 ㎡

3,606.00 ㎡

2,264.75 ㎡

2,294.91㎡

Leasable area

3,817.91 m2

1,559.99 ㎡

3,824.54 ㎡

1,997.87 ㎡

3,484.02㎡

Structure/
number of floors (Note 2)

S, 5F

S, 3F

RC・S, 4F

S, 3F

RC, 3F

Number ofrooms/resident capacity

128 rooms, 128 people

46 rooms, 46 people

80 rooms, 80 people

50 rooms, 50 people

56 rooms, 56 people

occupancy rate (Note 3)

89.1%

91.3%

82.5%

84.0%

94.6%

Operator

Kawashima Corporation

Nichii Carepalace

Sompo Care Inc.

Sompo Care Inc.

SENIOR LIFE SUPPORT

Remaining years of leaseagreement (Note 4)

16.2 years

4.6 years

12.6 years

2.1 years

26.1 years

1745-1 Ariseazaozaki,
Ikawadanicho, Nishi-ku, kobe-shi,
Hyogo
Ikawadani Stationon the Kobe Municipal Subway
Seishin-Yamate Line
April 2009(New construction)
December 2015(Expansion)

43

Ⅶ Appendix

Details of Portfolio⑧
Paid nursing home

37

38

39

40

41

NOAH GARDEN LEGENDNOAH GARDEN L Grace

NOAH GARDEN Season BellHeartland Kawaguchi Meiseien

Rehabilitation Home Granda
Minamiurawa

3-10-17 Kamiaoki,
Kawaguchi-shi, Saitama

63-2 Aza Nishinotsuma, Koyaba,
Kawaguchi-shi, Saitama

Hatogaya Stationon the Saitama Railway

Minami-Urawa Stationon the JR Keihin-Tohoku Line

Nearest station

Kaminopporo Stationon the JR Chitose Line

Kaminopporo Stationon the JR Chitose Line

5-3-1 1-Jo, Fukuzumi,
Toyohira-ku, Sapporo-shi,
Hokkaido
Fukuzumi Stationon the Sapporo City Subway

Construction completion

October 2015

October 2017

December 2019

January 2006

July 2011

Acquisition period

Fiscal period ended July 2022

Fiscal period ended July 2022

Fiscal period ended July 2022

Fiscal period ended July 2022

Fiscal period ended July 2022

Appraisal NOI (Note 1)

48 million yen

35 million yen

78 million yen

100 million yen

49 million yen

Appraisal NOI yield (Note 1)

5.6％

5.6％

5.8％

5.0％

4.8%

Appraisal value (Note 1)

910 million yen

660 million yen

1,520 million yen

2,280 million yen

1,110 million yen

Acquisition price (ratio)

859 million yen (1.1%)

622 million yen (0.8%)1,350 million yen (1.7%)

2,000 million yen (2.5%)

1,022 million yen（1.3％）

Site area

9,012.28㎡

9,012.28㎡

3,636.38㎡

1,996.66㎡

2,620.05㎡

Leasable area

2,736.89㎡

2,075.25㎡

4,602.26㎡

3,885.90㎡

2,373.25㎡

Structure/
number of floors (Note 2)

RC, 4FRC, 4FRC, 5FRC, 6F

S, 3F

Number ofrooms/resident capacity

72 rooms, 72 people

51 rooms, 51 people

136 rooms, 136 people

97 rooms, 100 people

58 rooms, 60 people

occupancy rate (Note 3)

72.2%

92.2%

71.3%

83.0%

90.0%

Operator

NOAH KONZERNOAH KONZERNOAH KONZERMEISHO

Benesse Style Care

Remaining years of leaseagreement (Note 4)

26.6 years

26.6 years

28.6 years

8.1 years

17.9 years

Location

10-4-3 2-Jo, Utsukushigaoka,
10-4-1 2-Jo, Utsukushigaoka,
Kiyota-ku, Sapporo-shi, Hokkaido Kiyota-ku, Sapporo-shi, Hokkaido

44

Ⅶ Appendix

Details of Portfolio⑨
Paid nursing home

42

43

44

Madoka Minamiurawa

Nichii Maison Inage

Hanakotoba Oppama

Location

58 Aza Nishinotsuma, Oaza Koyaba,
Kawaguchi-shi, Saitama

2153-2 Miyanogicho, Inage-ku,
Chiba-shi, Chiba

1-1-11 Oppamacho, Yokosuka-shi,
Kanagawa

Nearest station

Minami-Urawa Stationon the JR Keihin-Tohoku Line

Inage Stationon the JR Sobu Line

Keikyu-Taura stationon the Keikyu Line

Construction completion

April 2005

February 2008

July 2011

Acquisition period

Fiscal period ended July 2022

Fiscal period ended January 2023

Fiscal period ended January 2023

Appraisal NOI (Note 1)

39 million yen

83 million yen

25 million yen

Appraisal NOI yield (Note 1)

4.8%

5.5%

5.1%

Appraisal value (Note 1)

883 million yen

1,670 million yen

514 million yen

Acquisition price (ratio)

822 million yen（1.0％）1508 million yen（1.9％）

500 million yen（0.6％）

Site area

2,620.05㎡

2,444.12㎡

1,499.82㎡

Leasable area

1,918.98㎡

4,700.07㎡

1,899.46㎡

Structure/
number of floors (Note 2)

S, 3F

RC, 4F

S, 5F

Number ofrooms/resident capacity

54 rooms, 54 people

85 rooms, 95 people

59 rooms, 59 people

occupancy rate (Note 3)

85.2%

61.1%

94.9%

Operator

Benesse Style Care

Nichii Carepalace

Proud Life Inc.

Remaining years of leaseagreement (Note 4)

1.7 years

9.6 years

29.3 years

45

Ⅶ Appendix

Details of Portfolio⑩
Serviced housing for the elderly

Location

Nearest station

Medical service-related
facilities, etc.

Paid nursing home・ medical
service-related facilities, etc.

1

1

2

3

1

SOMPO CARE Sompo no ie S
Awajiekimae

SOMPO CARE Sompo no ie S
Kobekamisawa

NOAH GARDEN CASA RICH

Niigata Rehabilitation Hospital

SHIP SENRI BUILDING

8-2-5 Kamisawadori, Hyogo-ku,
Kobe-shi, Hyogo

10-4-5 2-Jo, Utsukushigaoka,
Kiyota-ku, Sapporo-shi, Hokkaido

761 Kizaki, Kita-ku, Niigata-shi,
Niigata

1-4-3 Shinsenri-higashimachi,
Toyonaka-shi, Osaka

Kamisawa Stationon the Kobe Municipal Subway
Seishin-Yamate Line

Kaminopporo Stationon the JR Chitose Line

Hayadori Stationon the JR Hakushin Line

Senri-Chuo Stationon the Kita-Osaka Kyuko Namboku
Line and the Osaka Monorail

3-20-26 Awaji, Higashiyodogawaku,
Osaka-shi, Osaka
Awaji Stationon the Hankyu Railway Kyoto andSenri Lines

Construction completion

June 2009

June 2009

March 2015(New construction)
Octorber 2016(Expansion)

April 1990 (Building 1)
February 2001 (Building 2)

September 2008

Acquisition period

Fiscal period ended July 2015

Fiscal period ended July 2015

Fiscal period ended July 2022

Fiscal period ended January 2018

Fiscal period ended July 2019

Appraisal NOI (Note 1)

116 million yen

72 million yen

91 million yen

153 million yen

678 million yen

Appraisal NOI yield (Note 1)

6.0％

6.0％

5.6％

7.4％

5.2％

Appraisal value (Note 1)

2,390 million yen

1,450 million yen

1,730 million yen

2,300 million yen

14,200 million yen

Acquisition price (ratio)

1,930 million yen (2.4%)

1,200 million yen (1.5%)

1,619 million yen（2.0％）

2,060 million yen (2.6%)

12,920 million yen (16.3%)

Site area

1,251.26 m²

743.22 m²

9,012.28㎡

15,056.85 m²

4,202.65 m²

Leasable area

5,745.15 m²

4,058.35 m²

4,986.98㎡

13,476.55 m²

24,813.85 m²

Structure/
number of floors (Note 2)

RC, 12F

S, 9F

RC, 4F（SECOND COURT︓5F）

RC, 3F (Building 1)
S, 5F (Building 2)

RC, B1 11F

Number ofrooms/resident capacity

137rooms, 137 people

85 rooms, 85 people

115 rooms, 115 people

168 beds

Hospital: 400 beds
Paid nursing home: 181 rooms,
200 people

occupancy rate (Note 3)

74.5％

98.8%

73.9％

-

Paid nursing home: 100 %Operator

Sompo Care Inc.

Sompo Care Inc.

NOAH KONZER

Medical Corporation AIKOKAI

Kyowakai Medical Corporation
GREEN LIFE

Remaining years of leaseagreement (Note 4)

11.0 years

11.0 years

26.6 years

23.6 years

15.2 years(Note 1) Figures in Appraisal NOI, Appraisal NOI yield and Appraisal Value are as of July 31, 2023. Appraisal NOI is rounded down to the nearest million yen and Appraisal NOI yield to the first decimal place.
(Note 2) As for abbreviation used in Structure column, SRC refers to steel-reinforced concrete, RC refers to reinforced concrete and S refers to steel structure.
(Note 3) The bed occupancy rate indicates the ratio obtained by dividing the number of residents by the capacity, rounded off to the first decimal place. The number of residents used in the calculation is described in thelatest Property Disclosure Statement of Important Matters, which the Asset Management Company obtained as of the date of preparing this document, for the facilities and housing for the elderly owned by HCM.
(Note 4) Remaining years of lease agreement is as of July 31, 2023, rounded down to the first decimal place.

46

Ⅶ Appendix

Operator List①
Number of facilities(Note 1)

Operator nameGREEN LIFE Co., Ltd.
GREEN LIFE HIGASHINIHONCo., Ltd.

Sompo Care Inc.

Kyowakai Medical
Corporation

Benesse Style Care
Co., Ltd.

Proud Life Inc.

NOAH KONZER
Co.,Ltd

Attribute

Facilities andhousing forthe elderly

Hospital

29

－

39

452

4

(Note 4)

351

33

25

Remarks

Facilities owned by HCM

Share
(%)

(Note 2)A consolidated
subsidiary of SHIPHEALTHCAREHOLDINGS, INC.,
which is listed on
the TSE Prime
MarketA nursing care business that plays a central
role in the Lifecare Business of SHIPHEALTHCARE HOLDINGS, INC. Operates
nursing care facilities nationwide.

AQUAMARINE Nishinomiyahama
Kobe Gakuentoshi Building (Hapine Kobe Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
Smiling Home Medice Adachi
SHIP SENRI BUILDING

A consolidated
subsidiary of
Sompo Holdings,
Inc., which is listedon the TSE Prime
MarketMainly operates paid nursing homes with careservice under the Sompo Care La vie Re
brand and mid-to low-end homes under the
SOMPO CARE Sompo no ie brand and the
SOMPO CARE Sompo no ie S brand, centeringon three major metropolitan areas.

SOMPO CARE La vie Re Machidaonoji
SOMPO CARE La vie Re Azamino
SOMPO CARE Sompo no ie S Awajiekimae
SOMPO CARE Sompo no ie S Kobekamisawa
SOMPO CARE La vie Re Hama-Kawasaki
SOMPO CARE La vie Re Kobe-ikawadani
SOMPO CARE Sompo no ie Sayama

16.9

6

-

A major medical corporation operating a wide
range of businesses including six hospitals(2,108 beds), four long-term care healthfacilities (495 beds), and home care support.
Provides safe and convenient medical/nursing
care services ranging from acute-stage
medical care to rehabilitation, home medicalcare, and nursing care.

SHIP SENRI BUILDING (Senri-Chuo Hospital)

9.6－

A consolidated
subsidiary ofBenesse Holdings,
Inc., which is listedon the TSE Prime
MarketOperates seven brands in Tokyo, Osaka,
Nagoya, and elsewhere in Japan. The brands
are mainly mid-to high-end, such as
Bonsejour and GRANNY AND GRANDA.

Bonsejour Chitose-funabashi
Bonsejour Hino
Bonsejour Musashi-shinjo
Medical Rehabilitation Home Bonsejour Hadanoshibusawa
Bonsejour Yotsugi
Medical Home Bonsejour Itami
Granda Tsuruma-Yamato
Rehabilitation Home Granda Minamiurawa
Madoka Minamiurawa

8.9－

A consolidated
subsidiary of Sony
Group Corporation,
which is listed on
the TSE Prime
MarketA former Yuuai Holdings Group company.
Operates paid nursing homes, etc. under the“Hanakotoba” brand, centering on Kanagawa
Prefecture. Affiliated with Sony Financial
Holdings Inc. since 2017.

Hanakotoba Minami
Hanakotoba Miura
Hanakotoba Odawara
Hanakotoba Shin-Yokohama
Hanakotoba Shin-Yokohama II
Hanakotoba Oppama

7.0

Unlisted company

The company operates facilities and for theelderly in Sapporo City, and the number offacilities serviced housing for the elderly andthe number of units they operate rank first in
Hokkaido. The company is a comprehensive
welfare service provider also engaging in thedevelopment of medication support systems
and rental of assistive products with its
affiliated companies providing meal services,
designing and constructing medical/nursing
care facilities, etc.

NOAH GARDEN LEGENDNOAH GARDEN L Grace
NOAH GARDEN Season BellNOAH GARDEN CASA RICH

5.6

－

－

－

23.8

(Note 3)47

Ⅶ Appendix

Operator List②
Number of facilities(Note 1)

Operator name

Sawayaka Club Co.,Ltd.

Facilities andhousing forthe elderly

97

Attribute

Remarks

Facilities owned by HCM

Hospital

－

Share
(%)

(Note 2)A of UCHIYAMAHOLDINGS Co.,
Ltd., which is listedon the TSE
Standard Market

Operates facilities under the SAWAYAKA
brand (low price range without advance fees)around Japan, centering on Fukuoka
Prefecture.

SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan

4.2

Sunny Life Kita-Shinagawa
Sunny Life Kamakura

4.1

Kawashima
Corporation

154－

Unlisted company

A major nursing care business operator
operating nationwide centering on the Tokyo
Metropolitan Area, with Sunny Life as themain brand and under the motto “Encourage
the elderly and the family to get relieved
from exhausting nursing care.” None of theirfacilities requires initial fees.

Verde Corporation

6－

Unlisted company

A core company of the Hotaka Kai Group, anursing care/welfare business group holding
the largest number of rooms in Gunma
Prefecture.

Verde Minowa
Verde Hotaka

3.7

Operating hospitals and clinics as well as paid
nursing home with care service, group homeand long-term care health facilities in Niigata
Prefecture

Aikoen Ichibankan Building (Aikoen Ichibankan)
Niigata Rehabilitation Hospital

3.6

Medical Corporation
AIKOKAI

13

2

A medical
corporation which
belongs to NSG
Group with sales ofover 120 billion
yen (Note 5)

AS PARTNERS Co.,
Ltd.

24

－

Unlisted company

Operates paid nursing homes and day service
facilities under the ASHEIM brand in theTokyo Metropolitan Area.

ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan

3.6

Nichii Carepalace Company operates "Nichii
Home", a paid nursing home, and "Iris
Garden", serviced housing for the elderly,
mainly in the Tokyo metropolitan area. It is acore company that promotes in-homenursing care for the Nichii Group, which
operates nationwide, focusing on nursing
care, medical care, and education.

Nichii Home Nishikokubunji
Nichii Maison Inage

2.8

Nichii Carepalace
Company88－

A consolidated
subsidiary of
NICHIIGAKKAN
CO., LTD., whichis unlistedcompany

Meisho Co., Ltd.

31－

Unlisted company

Having Sonoda Medical Corporation as its
parent organization, the company operates
paid nursing homes and such in Tokyo,
Saitama and Chiba Prefectures.

Heartland Kawaguchi Meiseien

2.5－

Unlisted company(Capitalpartnership byNomura Real
Estate Holdings,
Inc.)

Operates paid nursing homes under the
GOOD TIME HOME brand in Tokyo. Operates
in Kyushu and Hokkaido besides the Tokyo
Metropolitan Area through SOUSEIJIGYOUDAN Co., Ltd., the parent company,
and other subsidiaries.

GOOD TIME HOME Fudo-mae

2.2－

A affiliate ofZensho Holdings
Co., Ltd., which islisted on the TSE
Prime Market

The company is a nursing care service
provider under the umbrella of Zensho
Holdings Co., Ltd., which operates foodservise and such.

Royal Kawaguchi

1.6JAPAN LIFEDESIGNInc.

SENIOR LIFE
SUPPORT Co.,Ltd32(Note 1) “Number of facilities” indicates figures tallied by the Asset Management Company based on information obtained from each company (including announced materials) and information on its website (as of March 31, 2023).
(Note 2) Shares based on acquisition price are indicated. Furthermore, the operators of SHIP Senri Building are separated based on an area basis, with Kyowakai Medical Corporation for the Senri-Chuo Hospital portion and GREEN LIFE Co., Ltd.
for the other portions.
(Note 3) The share of GREEN LIFE HIGASHI NIHON Co., Ltd. is 2.8%.
(Note 4) Only the number of long-term care health facilities is indicated.
(Note 5) Indicates the actual figures in September 2022 based on NSG Groupʼs website.

48

Ⅶ Appendix

Summary of Appraisal Report①
Summary of Appraisal Report (Note 1)

Property name

AQUAMARINE Nishinomiyahama
Bonsejour Chitose-funabashi
Bonsejour Hino
Bonsejour Musashi-shinjo
Medical Rehabilitation Home Bonsejour Hadanoshibusawa
ASHEIM Hikarigaoka
ASHEIM Bunkyohakusan
SOMPO CARE La vie Re Machidaonoji
SOMPO CARE La vie Re Azamino
SAWAYAKA Tachibanakan
SAWAYAKA Mekarikan
SAWAYAKA Tagawakan
GOOD TIME HOME Fudo-mae
Bonsejour Yotsugi
Medical Home Bonsejour Itami
Kobe Gakuentoshi Building (Hapine Kobe Gakuentoshi)
GreenLife Moriguchi
Hapine Kobe Uozaki Nibankan
Granda Tsuruma-Yamato
Smiling Home Medice Adachi
AIKOEN ICHIBANKAN Building
Hanakotoba Minami
Hanakotoba Miura
SOMPO CARE La vie Re Hama-Kawasaki
Hanakotoba Shin-Yokohama

Appraisal company

Rich Appraisal
Institute Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
JLL Morii Valuation &Advisory K.K.
Japan Real Estate
Institute

End of July 2023
Appraisal value(million yen)(A)

Direct capitalization
methodIndicatedvalue(million yen)

DCF method

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)End ofJanuary 2023
Appraisal value(million yen)(B)

Difference(million yen)(A)-(B)

2,100

2,110

5.2

2,090

4.9

5.4

117

2,100

0

997

1,020

4.3

987

4.4

4.5

48

997

0

834

849

4.7

827

4.8

4.9

43

834

0

643

653

5.1

638

5.2

5.3

39

643

0

850

864

5.0

844

5.1

5.2

47

850

0

1,600

1,600

4.5

1,590

4.3

4.6

76

1,590

+10

1,790

1,800

4.1

1,780

3.9

4.2

74

1,790

0

4,230

4,250

4.4

4,200

4.2

4.5

192

4,140

+90

3,560

3,590

4.2

3,530

4.0

4.3

156

3,480

+80

1,640

1,650

5.2

1,620

5.0

5.4

93

1,610

+30

1,480

1,490

5.4

1,460

5.2

5.6

85

1,480

0

405

408

5.4

402

5.2

5.6

25

398

+7

2,100

2,110

4.1

2,080

3.9

4.2

91

2,100

0

905

922

4.6

897

4.7

4.8

47

905

0

557

566

5.1

553

5.2

5.3

38

557

0

4,700

4,760

4.4

4,670

4.2

4.6

226

4,600

+100

4,750

4,820

4.3

4,720

4.1

4.5

220

4,650

+100

1,030

1,040

4.4

1,020

4.2

4.6

48

1,000

+30

1,030

1,040

4.7

1,020

4.8

4.9

52

1,060

△30

2,500

2,540

4.4

2,480

4.5

4.6

118

2,560

△60

827

828

5.0

826

5.1

5.2

43

838

△11

1,270

1,280

4.3

1,260

4.1

4.4

56

1,270

0

682

690

4.7

678

4.8

4.9

35

668

+14

1,850

1,880

4.5

1,810

4.3

4.7

89

1,850

0

2,520

2,540

4.0

2,500

3.8

4.1

109

2,460

+60

49

Ⅶ Appendix

Summary of Appraisal Report②
Summary of Appraisal Report (Note 1)

Property nameAppraisal company

Hanakotoba Shin-Yokohama II
Hanakotoba Odawara
Verde Minowa
Verde Hotaka
Sunny Life Kita-Shinagawa
Sunny Life Kamakura
Nichii Home Nishikokubunji
SOMPO CARE La vie Re Kobe-ikawadani
SOMPO CARE Sompo no ie Sayama
Royal Kawaguchi
NOAH GARDEN LEGENDNOAH GARDEN L Grace
NOAH GARDEN Season BellHeartland Kawaguchi Meiseien
Rehabilitation Home Granda Minamiurawa
Madoka Minamiurawa
Nichii Maison Inage
Hanakotoba Oppama
SOMPO CARE Sompo no ie S Awajiekimae
SOMPO CARE Sompo no ie S Kobekamisawa
NOAH GARDEN CASA RICH
Niigata Rehabilitation Hospital
SHIP SENRI BUILDING
Total(Note 1)
(Note 2)
(Note 3)

Japan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Rich Appraisal
Institute Co., Ltd.
Rich Appraisal
Institute Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
InstituteRich Appraisal
Institute Co., Ltd.
Rich Appraisal
Institute Co., Ltd.
Rich Appraisal
Institute Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.

End of July 2023
Appraisal value(million yen)(A)

Direct capitalization
methodIndicatedvalue(million yen)

DCF method

Capitalization
rate
(%)

Indicatedvalue(million yen)

Discount rate(%)
(Note 2)

Terminal
capitalization
rate (%)

Appraisal NOI(million yen)
(Note 3)End ofJanuary 2023
Appraisal value(million yen)(B)

Difference(million yen)(A)-(B)

384

385

5.0

382

4.8

5.2

21

384

0

964

979

4.8

957

4.9

5.0

49

946

+18

1,730

1,740

4.9

1,720

4.7

5.1

109

1,730

0

1,450

1,460

5.3

1,450

5.1

5.5

91

1,460

△10

2,090

2,120

4.2

2,070

4.0

4.4

90

2,090

0

1,620

1,640

4.4

1,610

4.5

4.6

76

1,620

0

777

791

4.2

771

4.0

4.4

36

777

0

1,300

1,320

4.3

1,290

4.1

4.5

63

1,300

0

647

656

4.7

643

4.5

4.9

32

647

0

1,340

1,350

4.2

1,330

4.0

4.4

62

1,340

0

910

920

5.1

910

5.2

5.3

48

910

0

660

660

5.1

660

5.2

5.3

35

660

0

1,520

1,530

5.0

1,520

5.1

5.2

78

1,520

0

2,280

2,300

4.1

2,260

3.9

4.2

100

2,230

+50

1,110

1,120

4.1

1,100

3.9

4.2

49

1,100

+10

883

893

4.1

879

3.9

4.2

39

883

0

1,670

1,700

4.6

1,660

4.4

4.8

83

1,670

0

514

515

4.4

514

4.5

4.6

25

509

+5

2,390

2,420

4.7

2,360

4.5

4.9

116

2,350

+40

1,450

1,460

4.8

1,430

4.6

5.0

72

1,420

+30

1,730

1,740

5.1

1,720

5.2

5.3

91

1,730

0

2,300

2,310

6.5

2,290

6.3

6.7

153

2,300

0

14,20014,4004.5

14,100

4.6

4.7

678

14,200088,76989,709―88,108

―

―

4,387

88,206+563“Appraisal value” is based on the appraisal report with July 31, 2023, as the appraisal date.
“Discount rate” represents a yield used to discount net cash flow during an analysis period and terminal value at the end of an analysis period back to present value. The indicated figures are those used by the respective appraisal organizations.
“Appraisal NOI” indicates net operating income obtained by direct capitalization method stated in real estate appraisal report with July 31, 2023 as the appraisal date, rounded down to the nearest million yen. In addition, NOI is revenue before
deducting depreciation and differs from NCF (net cash flow), which is the amount calculated by adding the gain on investment from security deposits, etc. to NOI and deducting capital expenditures. The same shall apply hereinafter in thisdocument.

50

Ⅶ Appendix

Status of Income/Expenditure of Properties①(Unit: thousand yen)

Real estate leasebusiness revenue
Property nameReal estate lease business expenses

Rent
Other
revenue revenue

Repairexpenses

Property tax Outsourcing

Depreciation
andamortization

Insurance
expenses

17th FP
NOI

16th FPNOI(Note 2)

Other

(Note 2)AQUAMARINE Nishinomiyahama

25,012

4,264

2,100

326

236

17,684400

60,014

58,181

Bonsejour Chitose-funabashi

5,629

1,831

225

-

122

3,048

401

21,426

21,371

Bonsejour Hino

5,083

1,247

214

-

91

3,130

400

19,49019,473

Bonsejour Musashi-shinjo

4,128

1,031

167

-

82

2,447

400

16,21016,136

Medical Rehabilitation Home Bonsejour
Hadanoshibusawa

8,405

1,810

213

-

163

5,817

400

21,09021,114

Medical Rehabilitation Home Bonsejour
Komaki (Note 3)

-

-

-

-

-

-

-

-

11,427ASHEIM Hikarigaoka

16,836

3,821

381

84

212

11,936400

40,85040,813ASHEIM Bunkyohakusan

12,349

2,580

381

-

129

8,857

400

38,99539,003

SOMPO CARE La vie Re Machidaonoji

49,169

6,038

780

1,962

392

39,596400

95,42695,02432,668

4,686

780

1,889

285

24,627400

77,15876,528SAWAYAKA Tachibanakan

23,942

2,668

1,200

-

370

19,303400

47,21447,216SAWAYAKA Mekarikan

23,165

2,985

1,200

-

273

18,307400

43,37543,378SAWAYAKA Tagawakan

7,865

1,108

1,200

-

119

5,037

400

12,856

12,858GOOD TIME HOME Fudo-mae

17,558

3,061

600

2,716

182

10,485513

43,92744,821

Bonsejour Yotsugi

4,938

949

223

-

78

3,286

400

20,74020,718

Medical Home Bonsejour Itami

6,551

1,402

371

-

117

4,260

400

13,97013,951

Kobe Gakuentoshi Building (Hapine Kobe
Gakuentoshi)

54,099

9,585

900

1,364

620

41,229400

113,530

113,767

GreenLife Moriguchi

39,318

7,139

1,363

3,241

405

26,769400

107,450

104,512

Hapine Kobe Uozaki Nibankan

9,624

1,391

1,200

-

96

6,536

400

24,411

24,416Granda Tsuruma-Yamato

7,536

1,934

618

274

152

4,158

400

26,871

27,065

Smiling Home Medice Adachi

16,628

3,327

540

560

177

11,624400

60,20360,763

AIKOEN ICHIBANKAN Building

8,587

2,550

780

-

112

4,644

500

21,651

18,110

Hanakotoba Minami

8,196

1,563

600

74

79

5,479

400

27,882

27,180

Hanakotoba Miura

9,440

1,559

600

464

88

6,327

400

17,287

16,377

SOMPO CARE La vie Re Hama-Kawasaki

19,613

3,491

2,770

28

206

12,716400

45,454

SOMPO CARE La vie Re Azamino

Not disclosed (Note 1)

45,030 51

Ⅶ Appendix

Status of Income/Expenditure of Properties②
Real estate lease businessrevenue
Property nameRent
revenue(Unit: thousand yen)

Real estate lease business expenses

Otherrevenue

Propertytax

Outsourcing

Depreciation
Insurance
andexpenses
amortization

Repairexpenses

17th FPNOI
Other(Note 2)16th FPNOI(Note 2)

Hanakotoba Shin-Yokohama

14,677

4,443

900

141

249

8,543

400

55,77852,091

Hanakotoba Shin-Yokohama II

5,701

2,547

600

-

92

2,061

400

11,172

10,398

Hanakotoba Odawara

9,092

1,396

600

348

99

6,248

400

24,756

24,412

Verde Minowa

29,500

5,268

1,020

1,535

508

20,768400

55,17656,737

Verde Hotaka

28,230

2,259

1,020

2,342

249

21,959400

43,83445,848Sunny Life Kita-Shinagawa

10,271

2,805

600

80

119

6,265

400

45,49445,580Sunny Life Kamakura

13,572

2,747

720

863

179

8,661

400

37,98937,942

Nichii Home Nishikokubunji

4,522

1,236

660

155

92

1,978

400

18,537

18,714

SOMPO CARE La vie Re Kobe-ikawadani

12,752

2,943

750

192

189

8,276

400

32,72434,578

SOMPO CARE Sompo no ie Sayama

5,536

1,448

750

134

103

2,700

400

16,063

17,58911,243

2,832

1,647

979

180

5,200

402

31,15734,214

10,200

1,988

300

-

129

7,615

167

24,41426,082

NOAH GARDEN L Grace

7,775

1,748

300

-

101

5,458

166

17,705

19,453

NOAH GARDEN Season Bell14,749

2,368

720

-

213

11,047400

40,91943,248Heartland Kawaguchi Meiseien

15,317

2,856

720

-

223

11,116400

51,17954,036

Rehabilitation Home Granda Minamiurawa

8,163

1,777

480

740

134

4,831

200

24,73526,979

Madoka Minamiurawa

6,161

1,101

480

1,100

108

3,172

200

19,36021,562

Nichii Maison Inage

16,301

3,127

900

2,712

210

8,951

400

38,84929,985

Hanakotoba Oppama

6,369

2,077

600

145

103

3,043

400

12,767

6,743

SOMPO CARE Sompo no ie S Awajiekimae

27,484

4,897

510

136

298

21,242400

58,21558,346

SOMPO CARE Sompo no ie S Kobekamisawa

18,418

2,918

510

1,497

183

12,908400

34,78036,031NOAH GARDEN CASA RICH

18,575

3,827

300

-

236

14,044

166

46,24750,074

Niigata Rehabilitation Hospital

28,390

9,644

1,030

-

387

16,828500

78,31878,308SHIP SENRI BUILDING

81,02028,043

1,500

-

1,182

49,894400

340,675

341,078

820,379

168,336

37,02926,083

10,377560,130

18,421 2,178,349

2,189,281

Royal Kawaguchi
NOAH GARDEN LEGEND

Total(Note 1)
(Note 2)
(Note 3)Not disclosed

2,438,597(Note 1)

2,428,260

10,337”Real estate lease business revenue,” “rent revenue” and “other revenue” of each property are not disclosed as consent for disclosure has not been obtained from tenants. The total is the sum of amounts received as rent for
the fiscal period under review based on the lease agreements.
“NOI” = Real estate lease business revenue – Real estate lease business expenses + depreciation and amortization
The figure is as of September 27, 2022 as its disposition date.

52

Ⅶ Appendix

Balance Sheet and Income Statement
Balance Sheet(Unit: thousand yen)

16th Fiscal Period
ended January 2023

17th Fiscal Period
ended July 2023

Statement of Income (Unit: thousand yen)

AssetsCurrent assets

2,008,064

2,073,660

Cash and deposits

1,539,878

1,613,659

272,156

234,734

Operating accounts receivable

51,052

51,925

Consumption taxes receivable

137,266

122,748－

50,592

7,709－

79,197,762
78,788,993
2,771
405,997
37,541
22,97014,57081,243,368

78,684,795
78,424,916
2,445
257,432
30,75817,227
13,53080,789,213

10,208,351

10,071,151

55,67817,0377,250,000

7,250,000

Short-term loans payable

2,000,000

2,000,000

Accounts payable – other103,501

111,882

295,543

271,803

702

863

Consumption taxes payable

105,273

17,558Advances received

397,489

401,721

Deposits received

162

162

Derivative liabilities－

122

32,066,763

32,100,115

2,000,000

2,000,000

27,900,000

27,900,000

1,936,482

1,936,482

167,616

167,616

Deferred tax liabilities

47,322

13,988Derivatives liabilities

14,977

81,819365
42,275,114

208
42,171,267

Unitholdersʼ capital

38,880,132

38,669,411

Unitholders' capital, net

37,590,306
1,289,825
88,121
88,121
38,968,253
81,243,368

37,601,252
1,068,158△51,465△51,465
38,617,946
80,789,213

Cash and deposits in trust

Prepaid expenses
Derivative receivables
Non-current assets
Property, plant and equipment
Intangible assets
Investments and other assets
Deferred assets
Investment unit issuance costs
Investment corporation bond issuance costs
Total assets

Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable

Accrued expenses
Income taxes payableNon-current liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in
trust

Other

Total liabilities
Net assets

Surplus
Valuation and translation adjustments
Deferred gains or losses on hedges
Total net assets
Total liabilities and net assets

16th Fiscal Period
ended January 2023

17th Fiscal Period
ended July 2023

2,632,258

2,438,597

2,417,024

2,428,260

10,583

10,337

204,649
1,178,377－
1,170,184

Expenses related to leasing business

801,972

820,379

Asset management fee

246,843

233,430

Operating revenue
Leasing business revenues
Other revenue related to leasing business
Gain on sales of real estate properties

Operating expenses

Asset custody fee
Administrative service fees
Directorsʼ compensation
Property tax
Other operating expenses

Operating income
Non-operating income
Interest income
Insurance income
Interest on tax refund
Reversal of distribution payable
Other

Non-operating expenses
Interest expenses
Interest expenses on investment corporationbonds
Amortization of investment unit issuancecosts
Amortization of investment corporation bondissuance costs

4,063

2,830

24,293

16,653

5,100

5,400

31,16633,03364,93758,456

1,453,880
1,355
5
254
81
1,000
14
176,148

1,268,413
2,803
8
2,336
－
458
－
202,338

101,400

128,917

7,800

7,800

5,742

5,742

1,040

1,040

60,164
1,279,087
1,279,087

58,8381,068,877
1,068,877

Income taxes - current

703

864

Income taxes - deferred

10

△7

713

857

1,278,374

1,068,020

Borrowing expenses
Ordinary income
Income before income taxes

Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

11,451138

1,289,825

1,068,158

53

Ⅶ Appendix

Information Related to Investment Units
Status of Unitholders

List of Top Unitholders

Ratio of Number of Investment Units Ratio of Number of Unitholders
by Unitholder Typeby Unitholder Type
Securities

4.1%
Securities
companies
2.7%

Individuals, etc,
25.8%

Total
359,500
units

Financial
institutions
0.2%

Total
15,878peopleForeigninvestors
1.1%

１

Custody Bank of Japan, Ltd.
(Trust Account)

89,98825.0

２

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

54,370

15.1

Individuals,
etc,
97.1%

３

NORTHERN TRUST CO. (AVFC) RE
FIDELITY FUNDS

14,587

4.1

４

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

14,371

4.0

5Morgan Stanley MUFG Securities Co.,
Ltd.

5,389

1.5

6

SSBTC CLIENT OMNIBUS ACCOUNT

4,806

1.3

7

JP MORGAN CHASE BANK 385781

4,491

1.2

8

NEC Capital Solutions Limited

4,000

1.1

8

SHIP HEALTHCARE HOLDINGS INC.

4,000

1.1

8

Sumitomo Mitsui Banking Corporation

4,000

1.1

200,00255.6(Note) Increased by 892 from the previous fiscal period

Changes in Ratio of Number of Investment Units by
Unitholder Type (most recent 5 fiscal periods)

49.0%

11.1%
5.1%
2.4%

50.8%

8.6%
4.3%
5.7%

55.6%

15.9%

17.6%

4.2%
3.6%

4.1%
2.7%

51.1%

49.7%

Foreigninvestors
Other
companies
Securities
companies
Financial
institutions

31.2%

30.5%

Individuals, etc,
25.8%

25.2%

25.8%
Total

13th FP(Note)

14th FP

Ownership
ratio
(%)

(Note)

Financial
institutions
49.7%

9.0%
4.9%
5.9%

Name

Other companies
1.4%

companies
0.1%

Foreigninvestors
Other companies 17.6%

Ranking

Number ofinvestment
units owned(units)15th FP

16th FPThe ratio of each index is rounded off to the first decimal place.

17th FP54

Ⅶ Appendix

HCMʼs Investment Philosophy and Three Features
Three Features

Investment Philosophy

Investment in healthcare facilities for which
demand is expected to grow• Increase in demand due to further advancement of aging
Serve as a conduit between the nursing care andmedical service industries and the capital markets

Develop a portfolio specialized inhealthcare facilities, for which
demand is expected to growPromote the supply of healthcare
facilities as social infrastructuresociety• Upgrades and expansion of healthcare facilities backed bygovernment policy

Strong support from sponsors• Utilization of advanced expertise in “nursing care andmedical service,” “fund management” and “finance” heldby SHIP HEALTHCARE, NEC Capital and SMBC

• Securement of property acquisition opportunities byutilizing extensive networks

We seek to realize a society where
all people can live vibrantly andwith peace of mind

Stable cash flow in the long term•

Conclusion of long-term fixed-rent lease agreementswith credible operators•

Proper portfolio management based on strong
relationship with operators

55

Ⅶ Appendix

Overview of Unitholder Special Benefit Plan
With the cooperation of operators, we offer unitholder special benefits.
Company Name

Details of Special BenefitsDiscount initial fee or monthly feeFree trial move-in (two-days and one-night with meals)Discount initial feeFree trial move-in (two-days and one-night with meals)Tour with free lunchDiscount monthly fee for initial monthFree trial move-in (two-days and onenight with meals)Discount initial feeDiscount monthly fee

Proud Life Inc.



Discount initial fee or deposit

Lifecare Design Inc.



Discount initial fee

Nichii Carepalace Company



Discount initial feeTour with free lunchDiscount deposit

Sompo Care Inc.

JAPAN LIFEDESIGN Inc.
GREEN LIFE Co., Ltd.
GREEN LIFE HIGASHI NIHON Co.,Ltd.
Sawayaka Club Co., Ltd.

AS PARTNERS Co., Ltd.

NOAH KONZER Co.,Ltd(Note) The special benefits are for unitholders as of the end of July 2023 and are subject to change in the future.

Tour with free lunchFree trial move-in (four-days andthree-nights)

Tour with free lunch

56

Ⅶ Appendix

Profile of Asset Management Company
Organizational Structure

Profile of the Company

Trade name

Healthcare Asset Management Co., Ltd.

Location

3-3 Kanda-Ogawamachi, Chiyoda-ku, Tokyo

FoundedNovember 28, 2013

Capital stock

150 million yen

CEO

Seiji Yoshioka

Shareholders

General Meeting of
Shareholders
Audit & Supervisory
Board Member

Board of Directors

SHIP HEALTHCARE HOLDINGS, INC.

33.3%

NEC Capital Solutions Limited

33.3%

Sumitomo Mitsui Banking Corporation

5.0%

Sumitomo Mitsui Finance and Leasing Company,

4.8%

LimitedManagement Committee

Compliance Committee

Representative Director

Internal Audit Office

SMBC Nikko Securities Inc.

4.8%

Yoei Co.,Ltd.

4.7%

Ginsen Co.,Ltd.

4.7%

Kobe Tochi Tatemono Co.,Ltd.

4.7%

Muromachi Building Co.,Ltd.

4.7%

Investment
Department

Asset
Management
Department

Compliance Office

Healthcare
Business
Promotion
Department

Financial &Administration
Department

Registered as a financial service provider
Director of Kanto Local Finance Bureau (Kinsho) No. 2815
Registration,
license, etc.

License as a building lots and buildings business operator
Governor of Tokyo (2) No. 96339
License as an entrusted agency services for transactions
Minister of Land, Infrastructure, Transport and Tourism No. 85

57

Ⅶ Appendix

Profile of Major Sponsors
SHIP HEALTHCARE HOLDINGS INC.
With a stated mission to “create an environment of people protecting life,”
SHIP HEALTHCARE HOLDINGS, INC. focuses on the five business domains of
medical, health, welfare, nursing care and services. Centering around thepartnership with medical institutions, the entire group companies carry out avariety of nursing care and medical service-related businesses, ranging fromconsultation on reconstruction, development, etc. of hospitals and such tooperation of nursing homes and dispensing pharmacy business.

Headquarters
location

3-20-8 Kasuga, Suita-shi, Osaka

Representative

Chairman: Kunihisa Furukawa
President: Futoshi Ohashi

FoundedAugust 1992

Capital stock

15,553 million yen

Sales572,285 million yen on a consolidated basis(fiscal period ended March 2023)

NEC Capital Solutions Limited

As the NEC Group's comprehensive financial services company, NEC Capital
Solutions Limited delivers finance services such as leasing and installment
payments to a broad customer base. In addition, it offers investments, loans,
and advisory services through funds, etc. in the business domains of“companies,” “credits,” and “assets,” mainly through its subsidiary, RISA
Partners, Inc.

Headquarters
location

2-15-3 Konan, Minato-ku, Tokyo

Representative

President: Masaaki Suganuma

FoundedNovember 1978

Capital stock

3,776 million yen

Sales

258,107 million yen(fiscal period ended March 2023)

Sumitomo Mitsui Banking Corporation

Positioned as the core company of the SMFG, SMBC possesses one of thestrongest sales foundations in Japan as well as the ability to executestrategies quickly, and is capable of providing financial services through its
influential group companies. Furthermore, it boasts one of the strongest
track record in Japan for financing listed real estate investment corporations.

Headquarters
location

1-1-2 Marunouchi, Chiyoda-ku, Tokyo

Representative

President and CEO: Akihiro Fukutome

Capital stock

1,770,996 million yen

58

Disclaimer
This presentation material contains forward-looking statements including forecasts,
outlooks, goals and plans. These statements are based on the information
available as of the date when this material is prepared (September 15, 2023) andincorporate certain subjective assumptions about uncertain factors that may affectfuture results. Accordingly, these statements are inherently not guarantees of
future performance and actual results may differ materially.
The opinions, outlooks and estimates contained in this material reflect our viewand judgment based on information as of the date when this material is preparedand involve risks and uncertainties.
No guarantee is made as to the accuracy, completeness, appropriateness andvalidity of information contained in this material. It is not promised that
information contained in this material will always be updated.
Contents of this material are subject to change without notice.
This material is not intended as a solicitation for investment. Any investment
decision must be made based on your own judgment and responsibility.

59