TSE 3460

3rd Period Results(Ended February 2017)

Japan Senior Living Partners, Inc. April 14, 2017

Table of Contents
Highlights of the 3rd fiscal period (2017/2)
3rd fiscal period (2017/2) financial results:
Performance highlight
Earning forecasts of 4th fiscal period (2017/8)
and 5th fiscal period (2018/2)
3rd fiscal period(2017/2) financial results:
Performance highlight
Portfolio performance (end-tenants)
Portfolio overview
Initiatives for maintenance and improvementof asset value
Initiatives to maintain and improve asset value(3rd fiscal period)
Change in operator of a key property
External growth activities
Unitholders’ special-benefit programs(3rd fiscal period (2017/2))
Financial Highlights(as of the end of 3rd fiscal period (2017/2))
Initiatives for IR activities

Appendices16

2

Surrounding Status of Healthcare Facilities

17

3

Investment Thesis

18

4
5
7
8

9
10
11
12
13
14
15

Growth strategy Aligned with National Policy
and Needs of Society
Investment targets policies and overview ofour portfolio
External Growth Strategy
Stable cash flow through a long-term leaseagreement with fixed rent and highmanagement capabilities
Status of Lease Agreements
Appraisal values(as of the end of 3rd fiscal period (2017/2))
Investment and Operator selection criteria

19
20
21
22
23
24
25

Back-up Operation Functions

26

Classification of senior living facilities by type
Typical earnings structure of senior living
facilities
Characteristics of senior living facilities by
type
Portfolio asset example ①

27

Portfolio asset example ②

31

Portfolio asset example ③

32

Qualifying for Care System in Japan(How to qualify the Nursing Level )Diverse Support from 6 Companies
with Proven Track Records
Unitholder Information(as of the end of 3rd fiscal period (2017/2))
Disclaimer

28
29
30

33
34
35
36

1

Highlights of the 3rd fiscal period (2017/2)
Highlights of the 3rd fiscal period (2017/2)
 As a result of focused negotiations based on the ORE strategy(Note) Maintained financial stability with an LTV of 42.3%, long-term

conducted after receiving a business succession request from the operator
was beneficial for both JSL and the former and new operators while also

fixed loan ratio of 93.3%, and an average loan term remaining

Debt

of Activa Biwa*, a key asset, JSL managed successful operator change that
securing stable performance (as of April 1, 2017)

until maturity of 3.3 years

 Debt capacity up to LTV of 50.0% was approx. 5bn yen

Asset*24.8% of our portfolio on an acquisition price basis

 Took initiatives to maintain and improve property value through additional
strategic Capex investment for Joy stage Hachioji

the better monitoring of the operational performance Continued to maintain a 100.0% occupancy rate (based on contract) in the
3rd fiscal period (Average of actual occupancy rate (based on end-tenants)

Equity Revised the provisions in the lease agreements for several properties for

DPU was 3,561 yen, up from the estimate of 3,500yen

NAV per unit was 200,879 yen, up by 2.3% from the 2nd fiscal
period

programs for the 3rd fiscal period

for the 2016/7-2016/12 was 85.9%)
Change in operator

Activa Biwa (Shiga)

Settled on an overview of the Unitholders’ special-benefit

Strategic Capex Investment

Acquisition price

6,940m yen

Property

Joy Stage Hachioji

Conclusion ofbusiness succession

Feb. 14, 2017

Location

Hachioji, Tokyo

Date of transfer ofrightsApr. 1, 2017

Acquisition price

3,675m yen

Former operator:
UNIMAT Retirement Community Co., Ltd.

Considered additional strategic investment based on theoperator’s needs as the property is more than 20 years old

Next steps
 Garner understanding about the features of
the healthcare REIT among investors andbuild up a track record of operational results
to enhance valuation
 Expand asset scale and improve the liquidityof investment units

New operator:
Activa Co., Ltd. (wholly-owned subsidiary of Resorttrust,
Inc.)

Construction aimed at increasing the value of the property tomaintain and improve the rent level Acquire medical facilities (e.g. hospitals) andfurther expand the portfolio(Note) The “ORE strategy” aims to provide solutions for operators’ real estate such as the most effective utilization of current facilities or opening of new facilities to achieve sustainable growth for the operators ofhealthcare-related facilities

23rd fiscal period (2017/2) financial results:
Performance highlight
PL statement—overview
2nd fiscal
period（2016/8）
Actual①(m. yen)(A)
2nd (Actual)vs3rd (Actual)Comparison
Change③-①

3rd fiscal
3rd fiscal period
period Forecast(2017/2）（announced on
Actual2016/10/17）③②(B)
3rd(Actual)vs3rd(Forecast)Comparison
Change③-②Operating revenue

980

987

988

8

0

Operating expense

604

618

614

9

△4

Operating income

375

369

374

△1

5

Non-operating
income

0

0

0

△0

△0

Non-operating
expense

72

71

71

△1

△0

Ordinary income

303

297

303

△0

5

Net income

302

296

301

△1

5

DPU (yen)

3,573

3,500

3,561

△ 12

61

(Reference)
2nd fiscal period(2016/8)
Total No. of issued
investment units
Leasing NOI (Note 1) (m.yen)
FFO (Note 2) (m.yen)
NAV per unit (Note 3) (yen)

3rd fiscal period(2017/2)

84,75084,750

850

839

606

606

196,328

200,879(A)
Major factors of difference(from the previous fiscal period) Increase in Operating revenue（+8）
・ Distribution contributing
thorough 3rd period regarding
silent partnership investmentcapital-equity obtained in 2nd
fiscal period ＋９
 Increase in Operating expense（+9）
・ Repair expense +10(B)
Major factors of differences(against Forecast) Decrease in Operating expense(△4)
・ Repair expense +2
・ Other operating expense △6(Note 1) Leasing NOI=“leasing business revenue” - “leasing business expense”＋ ” depreciation”(Note 2) FFO=“net income” ＋ “depreciation”(Note 3) NAV per unit ＝｛”period-end net asset amount” - “distribution amount”+（“period-end appraisal value” - “period-end book value”）｝
3/Total No. of issued investment units

Earning forecasts of 4th fiscal period (2017/8)
and 5th fiscal period (2018/2)
Earning forecasts of 4th fiscal period (2017/8)
and 5th fiscal period (2018/2)(A)
4th fiscal 4th (Forecast)periodvs（2017/8） 3rd (Actual)
Forecast
Comparison②
Change②-①

3rd fiscal
period(2017/2）
Actual①

DPU: Historical performanceand forecast(m. yen)(B)
5th(Forecast)vs
4th(Forecast)Comparison
Change③-②

5th fiscal
period(2018/2)
Forecast③

Distribution fromsilentpartnership(TK)

（yen）
4,000

3,573

3,561

3,500

3,500

163

145

142

3,518

3,398

3,355

3,358

2nd fiscal
period(2016/8)
Actual

3rd fiscal
period(2017/2)
Actual4th fiscal
period(2017/8)
Forecast

5th fiscal
period(2018/2)
Forcast

3,500

55

3,000

2,509

Operating revenue

988

988

0

987

△1

2,500

Operating expense

614

619

4

618

△0

2,000

Operating income

374

369

△4

369

△0

1,500

Non-operating income

0

0

-

0

-

Non-operating
expense

71

71

0

71

△0

Ordinary income

303

297

△5

297

0

Net income

301

296

△5

296

0

DPU (yen)

3,561

3,500

△ 61

3,500

-

2509
1,000

500

0
1st fiscal
period(2016/2)
Actual(A)
 Increase in Operating expense (+4)
Major factors of difference
・ Repair expense △９、 taxes ＋１、
depreciation＋1
4th fiscal period (Forecast) against 3rd fiscal
Other（General unitholders' meeting etc.）＋9
period (Actual) Comparison
43rd fiscal period(2017/2) financial results:
Performance highlight
Balance sheet—overview
Item(m. yen)

2nd fiscal
period(2016/8)
Actual

3rd fiscal
period(2017/2)
ActualMajor factors of difference(from the previous fiscal
period)ChangeCurrent assets

5,764

6,099

334

39

34

△4

28,22828,005

△ 222

1,039

1,039

-

327

312

△ 14

35,39835,491

93

1,000

1,000

-

321

341

19

Long-term borrowings
Leasehold and security
deposits received
Trust tenants lump sum
deposits
Total liabilities

14,00014,000

-

839

840

0

3,402

3,476

74

19,564

19,65894

Total net assets

15,834

15,833△1

Total liabilities and net assets

35,39835,491

93

Cash and deposits
Other
Noncurrent assets
Property, plant andequipment
Intangible assets
Investment, otherassetsTotal assets

 Decrease in PP&E （△222）
・Capex＋82
・Depreciation △304

Current liabilities
Short-term borrowings
Other

Noncurrent liabilities

5

memo

Portfolio performance (end-tenants)
 Has continued to offer proposals on repair & renovation, and proposals and consultation on operation &sales methods based on monitoring; and has maintained stable occupancy rate & portfolio revenue
Average of actual
occupancy rate
(Based on end-tenants) (Note 3)

Moving-in rate (Note 4)

Moving-out rate (Note 4)

18.1％（+6.6％）

18.8％（+2.0％）

Average nursing
level (Note 5)

Average age (Note 5)

1.7 （-）（+0.4yrs)

85.9％（-0.8％）

85.4yrs old* Figures in parentheses in “Average of actual occupancy rate,” “Moving-in rate,” and “Moving-out rate” represent the difference in the respective data between Jan. to Jun. 2016 and Jul. to Dec. 2016.
“Average nursing level” and “Average age” represent the difference between as of the end of Jun. 2016 and as of the end of Dec. 2016.

Moving-in and Moving-out trend(Jul.-Dec.2016）

Actual occupancy rate and Revenue trend(Jul.-Dec.2016）(m. yen)600(Residents)

85.9%

86.0%

85.9%

85.9%

85.9%

85.4%

90%

40

80%

500

70%

400

60%
300

510
200

488

483

498

510

501

100

30%

0

20%
Aug-2016

Sep-2016

売上高
RevenueOct-2016

Nov-2016

入居率
Actual Occupancy rate

Dec-2016

25

22

29

31

23

27

0

50%
40%

Jul-2016

20

-20

-30

-19

Net
decrease

-28

-27

-26

Sep-16
Sep-2016

Oct-16Oct-2016

Nov-16
Nov-2016

-33

6

-40
Jul-16
Jul-2016

Aug-16Aug-2016#入居件数
of Movingin# of Moving退去件数
out

Dec-16
Dec-2016# of Moving-in －# of Moving入居件数-退去件数
out(Note 1) “Actual occupancy rate (Based on end-tenants), (However,100.0% occupancy rate (Based on contract)) “Revenue,” “Moving-in,” and “Moving-out” are based on data from materials submitted by the operators.
However, the data of “Granda Mondo Yakujin” wes not disclosed because the operator did not authorize such disclosure, and accordingly was not included in the respective data items. “Revenue” represents
the value of the total revenue of senior living facilities, excluding “Granda Mondo Yakujin.”(Note 2) “Actual occupancy rate (Based on end-tenants)” = “Total no. of tenants in portfolio” divided by “Total no. of rooms” (rounded to the first decimal place)(Note 3) A simple average of the actual occupancy rates (Based on end-tenants) during the six months from Jul. to Dec. 2016 is presented.
(Note 4) Total “Moving-in” and total “Moving-out” were divided by the total capacity (during the six months from Jul. to Dec. 2016), and then annualized for presentation.
(Note 5) “Average nursing level” and “Average age” are as of the end of Dec. 2016 based on data from materials submitted by the operators.

7

Portfolio overview
Acquisition
price(m. yen)

Propertyno.

Facilitytype

S-1

With nursing

Joy Stage Hachioji

Hachioji, Tokyo

3,675

232

S-2

With nursing

Nichii Home Tama Plaza

Kawasaki,Kanagawa

2,500

S-3

With nursing

Nichii Home Nakano Minamidai

Nakano Ward,
Tokyo

S-4

Residence
type

Yuimaru Hijirigaoka

S-5

With nursing

S-6

Property nameLocation

No. of rooms

ActualOccupancyrate(Based on

As of:

Operator

91.4%

2016/10/1

NM LIFE Co., Ltd.

160

78.8%

2016/12/1

Nichii Carepalace Company

1,740

83

74.7%

2016/11/1

Nichii Carepalace Company

Tama, Tokyo

1,175

70

100.0%(Note 2)

2016/8/1

Community.Net Co., Ltd.

Irise Kamata/Yuseien

Ota Ward, Tokyo

1,100

48

100.0%(Note 2)

2016/12/1

Hasegawa Care Service Co., Ltd.

With nursing

Activa Biwa

Otsu, Shiga

6,940

384

80.2%

2016/7/1

Activa Co., Ltd. (Note 4)

S-7

With nursing

Sompo Care
Lavire Kobe Tarumi

Kobe, Hyogo

1,900

100

77.0%

2017/1/1

Sompo Care Next Inc

S-8

Residence
type

Granda Mondo Yakujin

Nishinomiya,
Hyogo

1,180

62

98.4%

2016/6/1

Benesse Style Care Co., Ltd.

S-9

With nursing

Excellent Nishinomiya

Nishinomiya,
Hyogo

750

67

100.0%(Note 2)

2017/1/1

Excellent Care System T Co., Ltd.

S-10

With nursing

Ten

Sapporo, Hokkaido

2,285

85

83.5%

2017/3/1

Social Welfare Corp. Note Fukushi Kai

S-11

Residencetype

Irise Nishioka

Sapporo, Hokkaido

800

83

81.9%

2017/1/1

Hasegawa Care Service Co., Ltd.

S-12

With nursing

Sawayaka Sakura Nibankan

Akita, Akita

960

92

100.0%

2016/8/1

Sawayaka Club Co., Ltd.

S-13

Residence
type

Alpha Eniwa Sta. Nishiguchi
Saikaihatsu Building

Eniwa, Hokkaido

1,600

73

72.6%

2016/9/1

Hasegawa Care Service Co., Ltd.

S-14

Elderly homewith service

Gran Hills Ogawarako

Kamikita District,
Aomori

1,360

103

100.0%(Note 2)

2016/8/1

Silver Town Ltd.

end-tenants)(Note 1)

Total/Average

27,965

1,642 86.4％(Note 3)(Note 1) Actual occupancy rates (Based on end-tenants) are calculated by dividing the no. of end-tenants, which is provided in the disclosure statement, by the no. of rooms, and is rounded to the first decimal place.
(However,100.0% occupancy rate (Based on contract)). Meanwhile, the rate of “Gran Hills Ogawarako“ is based on the data submitted by the operator.
(Note 2) Since the actual occupancy rates (Based on end-tenants) for “Yuimaru Hijirigaoka” (Actual occupancy rate: 110.0%), “Irise Kamata/Yuseien”(Actual occupancy rate: 104.2%)“Excellent Nishinomiya” (Actual
occupancy rate: 104.5％), and “Gran Hills Ogawarako” (117.5％) exceed 100%, the nominal rates are presented here respectively as 100%
(Note 3) The average of actual occupancy rate (Based on end-tenants) for “Yuimaru Hijirigaoka,” , “Irise Kamata/Yuseien”,“Excellent Nishinomiya” ,” and “Gran Hills Ogawarako,” was calculated the actual occupancy rates
respectively, as 100.0％.
8(Note 4) Activa Biwa was succeeded to the status of operator from UNIMAT Retirement Community Co., Ltd. to Activa Co., Ltd. (100% subsidiary of Resorttrust Inc.) on April 1, 2017.

Initiatives for maintenance and improvementof asset value
JSL Operation Cycle

Monitoring

Rental-rates will bemaintained/improved Will utilize regular site-visits,management reports,
comprehend the status, andevaluate the situations
 Will conduct management
interviews, etc.

Improvement
proposal
Strategic additional
investment（Efficient utilization of Capex ）ORE strategy
opportunities Sale and leaseback New development

Appropriate
maintenanceHigh actual occupancy rate and competitiveness will be kept
Asset value will be maintained/improved
Will offer improvement measures for operation/will provide M&A
information

Changes in depreciation and construction expense(actual / plan)

Monitoring in the 3rd fiscal period (2017/2)(m. yen)Visit to operators/facilities（ More than once in six months ）

400

405
307

306

304

303
200

■ Performance

Executed the revised lease agreement concerning
rent increases
Discuss review of classification of repair paying,
and conduct maintenance
Add the monitoring provision to the agreement

133

109
19
0

1st fiscal period(2016/2)
Actual47

18
2nd fiscal period(2016/8)
Actual

3rd fiscal period(2017/2)
Actual

賃料水準の維持・向上

Depreciation

4th fiscal period(2017/8)Plan

5th fiscal period(2018/2)
Plan

Construction expense (actuak/plan)（Note) Based on Homeowner association of Alpha Eniwa Sta. Nishiguchi Saikaihatsu Building(compartmentalized ownership),Reserve fund for maintenance fee is included.

9

Initiatives to maintain and improve asset value(3rd fiscal period)High-priority renovations were carried out following consultation with the operator
The cost of the added-value renovations was passed on through rent, contributing to maintaining and improving thevalue of the asset■Joy Stage Hachioji■Change in actual occupancy rate
Location

Hachioji, Tokyo

100.0%

Structure/
number offloors

RC/S, F6

95.0%

Completion of
construction

October 1995

90.0%

No. of rooms(capacity)

232（263）

85.0%

Unit size

In July 2014,
Iriscare. Inc.
purchased all of
the shares■Executed high-priority renovations①Added toilets and washstands to 10 rooms→ Promoted use for temporary care in the nursing care
② Attached double sashes to 171 rooms→ Produced heat shielding/insulation effects andChallenge is to maintainand increase the actual
occupancy ratesoundproofing effects and also reduced condensation③Changed lighting design and installed LED lighting in theentrance hall

14. 21m2 – 55. 12m2

→ Improved the image of the property

Examples of additional strategic Capex investments

BeforeAfter(Note) The renovation costs exclude
incidental expenses① Added toilets andwashstands
Renovation cost: 25.2m yen② Attached double
sashesRenovation cost: 14.4m yen③ Changed lighting design
and installed LED lighting
Renovation cost: 3.4m yen

10Change in operator of a key propertyManaged successful operator change that was beneficial for both JSL and the former and new operators thoroughfocused negotiations with these operators based on the ORE strategy

Change in operator through a business succession scheme (as of April 1, 2017)■Activa Biwa (Acquisition price: 6,940m yen*)
Name

Resorttrust, Inc. (listed on theFirst Section of the Tokyo andNagoya Stock Exchanges)

Business
description

Membership business,
hotel/restaurant business,
medical business

Sales

142,249m yen (FYE2016/3, on
a consolidated basis)Dateestablished

April 1973

No. of facilities

14 facilities■Conditions for approval Maintaining the conditions stipulated in
the current lease agreement

Application
for approval Joint guarantee by the parent company*
and continuing operational information

disclosure

Advanceapproval

 No rent reduction upon next rent revision*24.8% of our portfolio on an acquisition price basis

Location
No. of rooms(capacity)

Otsu, Shiga
384（445）■Change in actual occupancy rate
100.0%*Parent company: Resorttrust, Inc.

Expectations for Resorttrust Group
Effective renovation of the facility Improved quality of services
 Utilization of management resources(including approx. 170,000
membership customers)



Maintain and increase actual
occupancy rate

95.0%
90.0%
85.0%

Aim to stabilize profit in
the mid- to long-term

80.0%
75.0%
70.0%
2010/3 2011/3 2012/3 2013/3 2014/3 2015/3 2016/3 2016/7(Note)

No. of rooms(Note)

1,459 rooms Stock Acquired 100% of
the stocks

New operator
Activa Co., Ltd.
(newly-established corporation)
 Absorption-typecompany split
 Stock transfer

Former operator
UNIMAT Retirement
Community Co., Ltd.
(Note) At the time of writing, the number of healthcare facilities and rooms
included those operated by Trust Garden Inc. and Trust Grace Inc.,
consolidated subsidiaries, and also those of Active Biwa

11

External growth activities
Invested assets related to equity interest in silent partnership (KSLF8) （Note1）

Anesis Hyogo

Canadian Hill

Orage Suma

Anesis Teradacho

Rococo-riha

Property
nameCanadian Hill

Anesis Hyogo

Orage
Suma

Rococo-riha

AnesisTeradacho

Number of pipeline as of the 3rd fiscal
period (2017/2) (Note 4)

Location

Kobe, Hyogo

Kobe, Hyogo

Kobe, Hyogo

Toyonaka,
Osaka

Osaka,
Osaka

20

Completion
Date

Jan, 2002

Sep, 2005

Sep, 2010

Apr, 2011

Oct, 2010

By deal information type

Appraisal value（Million yen）

1,930

1,480

2,940

2,190

3,720

Other
1
5.0%

(Note2)250

140
No. of capacity

115

Averagebuilding age (Note3)

8.3yrs100（Elderly housingwith supportive
services ：40）

Total of appraisal values

12,260m.yen

100（Fee-based homes
for the elderly withnursing care：
100）

Minimum purchase price provided by
the preferential negotiation rights

11,650m.yen（Note 1) The operator of the managed assets is KouyuKai Healthcare Corporation.
JSL has preferential negotiation rights for asset purchase by notifying at the price more than
11,650m. yen by March 29, 2019.
（Note 2) “Appraisal value” is described as of Feb.28, 2017.
（Note 3) Average building age is calculated by weighted-average of each property’s building age by eachappraisal value.（rounded to the first decimal place）

By deal type
Ownerchange2
10.0%

Sale and leaseback
945.0%

By asset type

ORE
19

Land

95.0%

1
5.0%

New
Development
945.0%

Medical facilities
5

Senior living facilities

25.0%

14
70.0%

(Note4) The number of properties of which LOIs are effective and whichhave the preferential negotiating rights is shown.

12

Unitholders’ special-benefit programs(3rd fiscal period (2017/2))

JSL established the special-benefit program with the aim of contributing to the health and longevity of unitholders and their families.
The program offers special benefits not only at facilities that this investment corporation owns, but also at the following private
nursing homes managed by the following 9 operators.(Note 1)

Special benefits breakdown

at approx. 396 facilities

日本全国 合計約●●施設が対象

LIXIL SENIOR LIFE

Sompo Care Next Inc.
・≪On the condition of advancepayment≫ Discount on 3% of value
or 200,000 yen for resident; thehigher value will be applied・≪ On the condition of monthly
payment≫ 3% discount on monthly
usage charge・Same-day facility site-visit (withlunch) free of charge

115 facilities
Areas:
Tokyo, Saitama,
Chiba, Kanagawa,
Aichi, Osaka, Hyogo,
Hiroshima

Seikatsu Kagaku Un-Ei Co.,Ltd
・Same-day facility site-visit(with lunch) free of charge

24 facilities
Areas:
Tokyo, Saitama,
Kanagawa, Shizuoka,
Aichi, Kyoto, Osaka

CENTURY LIFE CORPORATION

10 facilities
・Same-day facility site-visit(with lunch) free of charge

Areas:
Tokyo, Saitama
Chiba, Kanagawa,
Osaka

Hasegawa Care Service Co., Ltd.

≪On the condition of advance payment≫
Discount on one-time payment forresident (300,000 yen)・Trial residence free of charge (1night, 2-day stay, with dinner andbreakfast)・Same-day facility site-visit (withlunch) free of charge

5 facilities
Areas:
Tokyo, Fukuoka

Nichii Carepalace Company
・Same-day facility site-visit (withlunch) free of charge
・Trial residence free of charge(1-night, 2-day stay, withdinner, lunch and breakfast)

72facilities
Areas:
Tokyo, Saitama,
Chiba, Kanagawa,Shizuoka

97 facilities
Areas:
Hokkaido, Tokyo, Saitama
Kanagawa, Chiba,
Nagano, Okinawa

Excellent Care System T Co., Ltd.
・10％ discount on usage charge
for first month・ Trial residence free of charge (1night, 2-day stay, with dinner andbreakfast)・Same-day facility site-visit (withlunch) free of charge

15 facilities
Areas:
Tokyo, Kanagawa,
Aichi, Kyoto, Hyogo,
Tokushima

NM LIFE Co., Ltd.

Sawayaka Club Corporation
・10％ discount on usage charge
for first month・ Trial residence free of charge(1-night, 2-day stay, withdinner and breakfast)・Same-day facility site-visit (withlunch) free of charge

・ Trial residence free of charge(1-night, 2-day stay, with dinnerand breakfast)・Same-day facility site-visit (withlunch) free of charge

57 facilities
Areas:
Hokkaido, Akita, Tochigi,
Saitama, Chiba, Niigata,
Aichi, Mie, Kyoto, Osaka
Hyogo, Ehime, Fukuoka,
Oita

・Discount on one-time payment forresident (200,000 yen discount)
・ Trial residence free of charge, up
to three times (1-night, 2-day stay,with dinner and breakfast)・Same-day facility site-visit (withlunch) free of charge (up to threetimes)

1 facility
Area:
Tokyo

(Note) The special benefits is applied private nursing homes that are managed by Sompo Care Next Inc., Seikatsu Kagaku Un-Ei Co.,Ltd., CENTURY LIFE CORPORATION, LIXIL Corporation(“LIXIL SENIOR LIFE”), Nichii Carepalace Company, Sawayaka Club Corporation, Hasegawa Care Service Co., Ltd, Excellent Care System Co., Ltd., and NMLIFE Corporation as of Feb. 28, 2017.13

Financial Highlights(as of the end of 3rd fiscal period (2017/2))
Overview of interest-bearing debt (Note 1)

Classification

Balance(millionyen)

Lender

0.4352%
per annum interest
rate

July 29, 2015

July 30,
2018

6,000

0.7287%
per annum interest
rate

July 29, 2015

July 29,
2020

4,500

1.1145%per annum interest
rate

July 29, 2015

July 29,
2022

Series 2-②(Short-Term)

Sumitomo Mitsui Banking Corporation

500

Series 1-D(long-term)

Shinsei Bank, Limited; Sumitomo Mitsui Banking
Corporation; Mitsubishi UFJ Trust and Banking
Corporation; Mizuho Bank, Ltd.; Nippon Life Insurance
Company
Shinsei Bank Limited; Sumitomo Mitsui Banking
Corporation; Mitsubishi UFJ Trust and Banking
Corporation; Mizuho Bank, Ltd.; Resona Bank; Mizuho
Trust & Banking Co., Ltd.
Shinsei Bank Limited; Sumitomo Mitsui Banking
Corporation; Mitsubishi UFJ Trust and Banking
Corporation; Mizuho Bank, Ltd.; Sompo Japan
Nipponkoa Insurance Inc.
Long-term borrowings total

14,000Borrowings total

15,000Mizuho Trust &Nippon Life

Banking

Insurance

3.3%

3.3%

3.3%
Sompo Japan Nipponkoa
Insurance
6.7%

July 31,2017



Average interest rate (Note 1)

0.92%

Long-term borrowing ratio

93.3%

LTV (Note 2)

42.3%

Shinsei Bank
29.0%

Mizuho Bank
8.7%

Mitsubishi UFJ Trust andSumitomo Mitsui

Banking

Banking

16.7%

29.0%

7,000
Lenders

Diversification of debt maturities
borrowing period
1 yr

3 yrs

5 yrs

7 yrs

Balance (m. yen)

6,000

Shinsei Bank, Limited

4,350

Sumitomo Mitsui Banking
Corporation

4,350

5,000

Mitsubishi UFJ Trust andBanking Corporation

2,500

4,000

Mizuho Bank, Ltd

1,300

3,000

Sompo Japan Nipponkoa
Insurance Inc.

1,000

2,000

Resona Bank

500

Mizuho Trust & Banking Co.,
Ltd

500

Nippon Life Insurance
Company

500

Total

(Note 1) The value is the aggregation of “base interest,” “spread” and “rate ofannualized upfront fee” (rounded to the second decimal place).
(Note 2) LTV = “balance of interest-bearing debt” divided by “total assets”(rounded to the first decimal place)(m. yen)

Outstanding borrowings by lender
Resona Bank

Financial status

1,000(Note 1) The repayment method for the debt financing are lump-sum repayment and the conditions are unsecured and unguaranteed.
“Series 1 (Series 1-B, Series 1-C, Series 1-D)” is the syndicate loan with Shinsei Bank as the arranger.
(Note 2) Long-term borrowings all have non-fixed interest rates; however, to hedge the risk of interest rate increase, interest rate swaps are
conducted. Accordingly, the interest rates shown are all fixed rates through interest rate swaps.,

Average remaining period to maturity 3.3 yrs

3,500

500

Series 1-C(long-term)

Repayment
date

July 29, 2016

Shinsei Bank, Limited;

Series 1-B(long-term)

2)

Borrowing
Date

Base interest rate
(JBA
one month yen
TIBOR)+0.3%

Series 2-①(Short-Term)

Short-term borrowings total

Interest rate (Note

6,000
4,500

3,500

1,000

1,000
0

15,000

4th fiscal period（2017/8）(Note)

6th fiscal period（2018/8）

10th fiscal period（2020/8）

14th fiscal period（2022/8）

Each bar in the chart illustrates the total debt amounts that reach maturity in each period.

14

Initiatives for IR activities

JSL has aimed to garner understanding about healthcare asset investments and expand our investor base through active
participation in seminars as well as proactive information disclosure and IR activities for each investor

Major IR activities
For domestic institutional investors

For foreign institutional investors

 IR for national and regional institutional
investors
 Individual meetings Participation in global conferences Individual meetings

For individual investors Participation in IR fairs for individual
investors

Report on IR activity results
Date

Event

Venue

Oct. 2016

Special seminar for healthcare facility-related vendors(Hosted by FSA, the Ministry of Land, Infrastructure, Transport and Tourism,
Tokyo Stock Exchange, and the Association for Real Estate Securitization)

Tokyo

Oct. 2016

SMBC Nikko J-REIT Fair 2016
(Lecture for individual investors)

Tokyo

Nov. 2016

Property Conference Tokyo 2016
(Individual meetings for foreign institutional investors)

Tokyo

Jan. 2017

Facility tour of Joy Stage Hachioji(Event for domestic institutional investors)

Tokyo

Feb. 2017

Nomura Global Real Estate Forum 2017
(Individual meetings for foreign institutional investors)

Tokyo

Feb. 2017

Tokyo Stock Exchange IR Festa 2017 (J-REIT Section)(Lecture for individual investors)

Tokyo■Tokyo Stock Exchange IR Festa 2017

■Facility tour (Joy Stage Hachioji)15

Appendices16

Surrounding Status of Healthcare Facilities
 The proportion of the aged 65 or over to the total population in Japan is expected to rise from
23.0% in 2010 to 29.1% in 2020 and 39.9% in 2050.

＜ Population trend over 65
in the three major metropolitan areas ＞＜ Domestic population trend by age ＞
ActualProjection（Source) National Institute of Population and Social Security Research「 Population Projections by area for Japan（March 2013)」(Source) National Institute of Population and Social Security Research「Population Projections for Japan」＜ Notification trend of fee-based homes for the elderly ＞(Rooms)＜Registration trend of serviced housing for the elderly ＞(facilities)

Facilities# of capacity

Facilities# of capacity

2006

2007

2008

2009

2010

2011

2012

(Source)Ministry of Health, Labour and Welfare （As of July 1)

2013（Source) Residence for elderly people with service system（Dec. 31,2016)17

Investment Thesis「Based on our investment thesis of contributing to society as a bridge between the capital markets and thehealthcare industry, supporting healthcare industry growth in various ways and seeking to maximize thesatisfaction of the residents/users, operators and unitholders who are all our stakeholders.」

Needs of Capital Markets’ Investors
 Diverse investment opportunities

 Investment seeking long-term stability

 Yield commensurate to risk

 Investments in growth sectors

 Investment with greater contribution to society

Needs of Operators
 Expansion and optimization of business Diversification of fund procurement Specialization in operation based on

methods
 Streamlining the balance sheet

separation of ownership and operation

Needs of Users
 Safety and security

 Meaningful active lives

 Healthy living

 Appropriate fees

 Reliablecare

medical treatment and  Convenience and independence Avoiding real estate ownership risks

Needs of Government Policies and Society
 Promotionof private initiatives todevelop social infrastructure Limited social security costs
 Comprehensive local care Regional revitalization

 Compact cities Housing complex generation

18

Growth strategy Aligned with National Policy
and Needs of Society External growth strategy with consideration of the contributions to the industry society Exploring opportunities of the new asset class of medical facilities (hospitals) as a J-REIT
Growth strategy aligned with national policy
and the needs of society
Activa Biwa

Yuimaru
Hijirigaoka

Housing
Complex
regeneration

Japaneseversion of
CCRC

Japaneseversion of
CCRC

Local / intergenerational
exchange

Alpha Eniwa
Sta.
Nishiguchi
Saikaihatsu
Building

Ten

Earthquake resistance of hospital

No of Hospitals
with earthquake
resistanceover the wholebuilding
5,687; 67.0%

Regional
revitalization

Compact
city

Japaneseversion of
CCRC

No of Hospitalwith no available
data onearthquake
resistanceover the building
1,955; 23.0%

Joy Stage
HachiojiJapaneseversion of
CCRC

Local / intergenerational
exchange(Note) For each of the above-mentioned facilities, JSL determined the corresponding social needs.

Earthquake
resistanceof hospitals

No of Hospitals withearthquake
resistance over somepart of building
729; 8.6%
No of Hospitals
with no earthquake
resistance over
the whole building
122; 1.4%(Source) Ministry of Health, Labor and Welfare’s “Survey on the statusof renovation of Earthquake-Resistant hospital structure(held in Mar. 31, 2015)(Note) The ratio of earthquake resistance of hospitals is calculated by
dividing the number of hospitals with earthquake resistance by
the number of hospital that responded to the survey.

19

Investment targets policies and overview ofour portfolio
 JSL aims at a diversity of facility types, regions, sizes and operators.
Investment Targets
Medical facilities

Senior living facilities
70% or more

Investment target ratio by area

Senior living facilities 70% or more

30% or less

Investment
targets

Fee-based homes for theelderly (with nursing care)Fee-based homes for theelderly (residential)
Fee-based homes for theelderly (health-type)Serviced housing forthe elderly
Other

Others20％ or less

Medical facilities 30% or less


Hospitals
Clinics
Medical malls

Investment
target ratio
by areaIntermediate nursing
homes
Other

Three major
metropolitan areasand core cities
80％ or more

Overview of our portfolio① Facility type② Operator③ Location⑤ Nursing level④ Scale(Note 3)

Excellent Care System T Co., Ltd.

4.9%
Fee-based homes
for the elderly (residential)

500 million yen
to less than
1 billion yen
3 properties
2,510 million yen

2.7%

Serviced housing for the elderly

Fee-based homes for the
Sawayaka Club Co., Ltd.
elderly
3.4%(with nursing care)Community.Net Co., Ltd.

78.1%

Activa Co., Ltd.

24.8%

4.2%

5 billion yen or
more 1 property
6,940 million yen

9.0%

24.8%

Benesse Style Care Co., Ltd.

4.2%

17.0%

Silver Town Ltd.

Breakdown byfacility typeLong-term
Care
Required- 5
6.7%

self-reliant
22.1%

Long-term
Care
Required- 4
12.2%

4.9%
Sompo Care next Inc.

6.8%

Breakdownby operator

Social Welfare Corp.
Note Fukushi Kai

Breakdown
by scale

Nichii Care Palace Company

15.2%

8.2%
Hasegawa Care Service
Co., Ltd.

NM LIFE Co., Ltd.

12.5%

13.1%

Long-term
Care
Required- 3
10.6%

1 billion yen
to less than
2 billion yen
7 properties
10,055 million yen

36.0%

2 billion yen to less than
3 billion yen 2 properties

3 billion yen
to less than
5 billion yen
1 property
3,675 million yen

Averagenursing level
1.7

Long-term Care
Required- 2
13.4%

Long-term Care
Required- 1
18.8%

SupportRequired-1
11.3%

SupportRequired-2
4.9%(Note 1) The three major metropolitan areas are the Kanto area, the Osaka metropolitan area and the Nagoya metropolitan area.
4,785 million yen
13.1%
The core cities are ordinance-designated cities, mid-size city areas and special cities, excluding the three major metropolitan areas.
17.1%(Note 2) The ratios presented in ①–④ above are based on acquisition prices.
(Note 3) The “Nursing level” represents the ratios, by support/Long-term Care level, of residents against the total no. of residents. The “Average nursing level” represents the “Total of (A x B)’s” divided by C: A=“No. of residents by nursing level defined by
the disclosure statement”; B=”0” for self-reliant, ”0.375” for Support Required-1, “1” for Support Required-1, or ”1-5” respectively for Long-term Care Required-1 to Long-term Care Required-5; and C=“Total no. of residents.” The data are
based on the disclosure statement or the operator’s submitted materials. The points of time for the data are based on the description on the page 8. For more information of “Nursing level”(Care System in Japan), refer to page 33.

20

External Growth Strategy
Use of multi-pipeline
Deals to change ownership

Sponsors’ network

Sale-and-leaseback deals

ORE Strategy

Operators
New development deals

Asset manager’s network
Deal to change ownership

ORE (Operator Real Estate) Strategy
Operator’s needs
Expansion and optimization of businessSpecialization in operation based on separation

Sale and leasebackof ownership and operation
Diversification of fund procurement methods

Streamlining the balance sheet
Avoiding real estate ownership risks

New development

ORE Strategy
Providing solutions through partnership

JSL/JSLP functions
Stable, long-term facility ownershipPrecise facility maintenanceTrust based on operational understanding

Sponsor functions

Support for new development
Provision of M&A information, etc.
 Operational support/suggestions for improvement

Sale-and-leaseback deals: six facilities, 14,900 m. yen (53.3％) (Note)

Activa Biwa (residential buildings)

Joy Stage Hachioji

Yuimaru Hijirigaoka

Sawayaka Sakura Nibankan(Note) Percentages indicate the value out of the total acquisition price.

Ten

Excellent NishinomiyaSupport for new development
Support for fund procurement

Operational support/suggestions

for improvement
Building/facility maintenanceNew development: four facilities, 5.7 bn. yen (20.5％)

Activa Biwa (care center buildings)

Alpha Eniwa Sta. Nishiguchi
Saikaihatsu Building

Gran Hills Ogawarako

Rest Villa Kobe Tarumi

21Stable cash flow through a long-term lease agreement with fixed rent andhigh management capabilities
 Long-term lease agreement with fixed rent
 Discerning operator selection
Stable cash flow through a long-term lease agreement with fixed rent
Average leasing period

Average remaining period oflease

Fixed-rent ratio

16.7 yrs

100.0%

23.8 yrs
20 years or more

100.0%

Lease
agreement
period5 years toless than
10 years: 1 property

8.9%

10 years to less than
15 years: 4 properties

Operator

Lease agreement
period remaining

100.0%

Fixed-rent ratio

42.7%
15 years toless than 20 years:
3 properties

19.3%(Note 1) The data is as of the end of the 3rd fiscal period (ended Feb. 2017). The ratios are based on acquisition prices.
(Note 2) If an acquisition asset involves multiple tenants, the data is based on the leasing agreement with the operator,
who is the major tenant.

The Highly Specialized, Abundantly Experienced Members of
Our Asset Manager(JSLP)
Officers and personnel
dispatched fromsponsors

Asset Manager’s
operational ability
enhancedHigh degree ofexpertise
Wealth ofexperience
Human networks

Stablecash flow
achieved

Established

Revenue(millionyen)(Note 1)20 years or more:
6 properties

29.1%

Selection of operator with management track record
Facilities
operated

No. of rooms(capacity)(Note 2)

(Note 2)

Listed/unlisted

Activa Co., Ltd.

June 2, 1975－(Note3)

1

445
（384）

100% subsidiary of Resorttrust Inc.
which is listed on the first section of theTokyo Stock Exchange and Nagoya Stock
Exchange

Nichii Carepalace
Company

June 22,
1964－(Note4)75

4,870（4,741）

Subsidiary of Nichii Gakkan Company,
which is listed on the first section of theTokyo Stock Exchange

NM LIFE Co., Ltd.

October 5,
1995

895

1

263
（232）

100% subsidiary of Iriscare Inc., which isunlisted

Hasegawa Care Service
Co., Ltd.

November 1,
2006

14,047

119

6,547（6,524）

UnlistedSocial Welfare Corp.
Note Fukushi Kai

June 13,
1983

5,814

41

1,501
（803）

Unlisted

Sompo Care Next Inc.

November 11,
1992

35,535116

8,769（8,507）

Subsidiary of Sompo Japan Nipponkoa
Holdings, Inc., which is listed on the firstsection of the Tokyo Stock Exchange

Benesse Style Care Co.,Ltd.

September 7,
1995

93,601305

17,037（16,385）

Consolidated subsidiary of Benesse
Holdings,Inc. which is listed on the firstsection of the Tokyo Stock Exchange

Community Net Co., Ltd.

June 24,
1998

1,370

10

925
（508）

Unlisted

Sawayaka Club Co., Ltd.

December 1,
2004

13,195

66

4,183(4,156）

Consolidated subsidiary of UCHIYAMAHOLDINGS Co., Ltd., which is listed on
the first section of the Tokyo Stock
Exchange

Excellent Care System T
Co., Ltd.

August 2,
2004

2,590

42

1,642
（1,220）Unlisted

February 25,
2003

155

3

188
（178）

Unlisted

Silver Town Ltd.

（Note1) The figures for "sales" are based on the information obtained by JSL as of March 31, 2016. However, NM LIFE Co., Ltd. is as of December
31,2016, Hasegawa Care Service Co., Ltd. is as of September 30, 2016, Excellent Care System T Co., Ltd. is as of July 31,2016 and Silver Town
Ltd. is as of August 31, 2016.
(Note2) The figures for “facilities operated” and “no. of room (capacity)” are as of December 31, 2016. However, Benesse Style Care Co., Ltd. is as ofJanuary 31, 2017.
(Note3) Activa Biwa was succeeded to the status of operator from UNIMAT Retirement Community Co., Ltd. to Activa Co., Ltd. on April 1, 2017. (100%22subsidiary of Resorttrust Inc.)(Note4) The sales figure for Nichii Carepalace Company is not disclosed because the company did not authorize such disclosure.

Status of Lease Agreements
No.

Type

Property nameOperator

Contract start

Cancellationprohibition period

Contract expiry

Remaining
contract
period(yrs)

Revision
periodof rent
conditions

S-01

With
nursing

Joy Stage Hachioji

NM LIFE Co., Ltd.

January 31, 2026

January 31, 2036

July 31, 2034

18.9

No principle（Note3)

-

-

S-02

With
nursingNichii Home Tama Plaza

Nichii Carepalace Company

August 1, 2002

August 1, 2018

July 31, 2022

5.4

3yrs

August 1, 2018

6th fiscal
PeriodS-03

WithnursingNichii Home Nakano Minamidai

Nichii Carepalace Company

April 1, 2007

March 31, 2027

March 31, 2027

10.1

3yrs

April 1, 20198th fiscal
periodS-04

Residence
type

Yuimaru Hijirigaoka

Community.Net Co., Ltd.

December 17, 2014

December 16, 2022

December 16, 2064

47.8

No principle（Note4)

-

-

S-05

With
nursing

Irise Kamata/Yuseien

Hasegawa Care Service Co.,Ltd.

July 1, 2012-

June 30, 2042

25.4

5yrs

July 1, 2017

4th fiscal
periodS-06

Withnursing

Activa Biwa

Activa Co., Ltd.

August 31, 2007

August 31, 2017

August 30, 2027

10.5

3yrs

August 31, 2018

6th fiscal
periodSompo Care
Lavire Kobe Tarumi (Note 4)

Sompo Care Next Inc

May 13, 2010

May 31, 2028

May 31, 2030

13.3

No principle（Note5)--Granda Mondo Yakujin

Benesse Style Care Co., Ltd.

July 31, 2014

July 30, 2037

July 30, 2037

20.4

No principle（Note5)

-

-

S-07

S-08

With
nursing
Residence
type

Rent revision
Rent revision of correspondDate
to fiscal
periodS-09

Withnursing

Excellent Nishinomiya

Excellent Care System T Co.,
Ltd.

October 8, 2014

October 7, 2022

October 7, 2034

17.6

No principle（Note4)

-

-

S-10

With
nursing

Ten

Social Welfare Corp. Note
Fukushi Kai

September 15, 2007

February 26, 2023

February 26, 2038

21.0

No principle（Note4)

-

-

S-11

Residencetype

Irise Nishioka

Hasegawa Care Service Co.,Ltd.

June 1, 2014

March 31, 2027

May 31, 2044

27.3

No principle（Note3)

-

-

S-12

With
nursing

Sawayaka Sakura Nibankan

Sawayaka Club Co., Ltd.

March 27, 2013

March 27, 2023

March 27, 2033

16.1

No principle（Note3)

-

-

S-13

Residence
type

Alpha Eniwa Sta. Nishiguchi
Saikaihatsu Building(Note6)

Hasegawa Care Service Co.,Ltd.

March 15, 2015

March 31, 2023

March 31, 2045

28.1

No principle（Note3)

-

-

S-14

Elderlyhome withserviceGran Hills Ogawarako

Silver Town Ltd.

April 27, 2007

May 31, 2024

October 31, 2029

12.7

3yrs
（Note7）

November 12,
2017

5th fiscal
period（Note１）If an acquisition asset involves multiple tenants, the data is based on the leasing agreement with the operator, who is the major tenant.
（Note２）The conditions of contract are all lease contract except “Gran Hills Ogawarako”, which is fixed-term leasehold contract.
（Note３）The lease agreements cannot be revised in principle during the leasing period; however, It enables consultation every two years for the rent increase due to inflation or interest rates rise.
（Note４）The lease agreements cannot be revised in principle during the leasing period; however, If it is deemed extremely unjust by the fluctuations of the economic conditions will enable consultation every three years,
if the consultation is not settled, tenant will assume the payment obligations of the current rent.
（Note５）The lease agreements cannot be revised in principle during the leasing period; however, If it is deemed extremely unjust by the fluctuations of the economic situation etc., it will be possible revision in consultation.
（Note６）The Lease Agreements of “Irise Eniwa,” which is located on the 4th–6th floors of Alpha Eniwa Sta. Nishiguchi Saikaihatsu Building, is described.
（Note７）Unless the property no defect or be usable, It is not possible to request of rent fee reduction.
23(Note 8) In the memorandum on the change in lease agreement dated April 1, 2017, we agreed Activa Co., Ltd.that the rent will not be decreased on August 31, 2018, and will be the same as or higher than the current rent.

Appraisal values(as of the end of 3rd fiscal period (2017/2))
End of 3rd fiscal period (as of Feb.28,2017)

No.

Property nameAppraiser

Acquisition
price(m. yen)Book value（A）(m. yen)（B）

Appraisalvalue(m. yen)（C）

Capitalization Appraisal value
method cap. Vs. Book value（D）（C）÷（B）-1

End of 2nd fiscal
period (as of
Aug.31,2016)
Appraisalvalue(m. yen)（E）

Appraisal value

Directcapitalization
method cap.
rate

Capitalization% change
Changemethod cap. Change（C）÷（E）
rate（C）-（E）（D）-（F）
-1
（F）

S-01

Joy Stage Hachioji

JREI

3,675

3,861

3,900

5.2%

1.0%

3,800

5.3%

100

2.6%

-0.1%

S-02

Nichii Home Tama Plaza

JREI

2,500

2,530

2,810

4.9%

11.1%

2,760

5.0%

50

1.8%

-0.1%

S-03

Nichii Home Nakano
Minamidai

JREI

1,740

1,769

2,020

4.2%

14.2%

2,020

4.3%

0

0.0%

-0.1%

S-04

Yuimaru Hijirigaoka

Tanizawa

1,175

1,213

1,330

4.6%

9.6%

1,410

4.7%

-80

-5.7%

-0.1%

S-05

Irise Kamata/Yuseien

JREI

1,100

1,116

1,190

4.5%

6.5%

1,190

4.6%

0

0.0%

-0.1%

S-06

Activa Biwa

JREI

6,940

7,128

7,310

5.4%

2.6%

7,300

5.5%

10

0.1%

-0.1%

S-07

Sompo Care
Lavire Kobe Tarumi

JREI

1,900

1,955

2,060

5.0%

5.3%

2,040

5.1%

20

1.0%

-0.1%

S-08

Granda Mondo Yakujin

Tanizawa

1,180

1,273

1,240

4.7%

-2.6%

1,260

4.8%

-20

-1.6%

-0.1%

S-09

Excellent Nishinomiya

JREI

750

766

931

5.2%

21.5%

918

5.3%

13

1.4%

-0.1%

S-10

Ten

JREI

2,285

2,432

2,600

6.2%

6.9%

2,560

6.3%

40

1.6%

-0.1%

S-11

Irise Nishioka

Tanizawa

800

867

887

5.0%

2.3%

877

5.1%

10

1.1%

-0.1%

S-12

Sawayaka Sakura Nibankan

JREI

960

997

1,030

5.5%

3.3%

1,010

5.6%

20

2.0%

-0.1%

S-13

Alpha Eniwa Sta. Nishiguchi
Saikaihatsu Building

Tanizawa

1,600

1,701

1,800

5.1%

5.8%

1,790

5.2%

10

0.6%

-0.1%

S-14

Gran Hills Ogawarako

JREI

1,360

1,433

1,430

6.9%

-0.2%

1,440

6.9%

-10

-0.7%

0.0%

27,96529,04530,5385.2%

5.1%

30,375

5.3%

163

0.5%

-0.1%

Total

(Note1) The ratios for the acquisition price, appraisal value and book value are rounded to the first decimal place.
(Note2) The cap. rate for each property type is a weighted average value based on the appraisal value.

24

Investment and Operator selection criteria
Investment criteria for individual
property(at acquisition)

Operator selection criteria
Management vision

Real estate・Location
・Specs. of building/equipment
・Suitability for business model・Versatility

Operator

History of establishment
 Management philosophy
 Backbone of management
and characterTrack record & type ofbusiness portfolioFinancial credibility

 Balance sheet, Profit and loss
Scale of operation
situation, Cash flow, Banking
Past accidents, scandals, if any
 Status of other businesses
and affiliates

Operators landscape in Japan

Operators that operate facilities with 500
rooms or more comprise 1.2% of the total.

・Management vision
・Track record & type of businessportfolio・Financial credibility

Operators that operate facilities with
500 rooms or more account for
34.2% of total rooms.

500 rooms or more
108 companies
1.2%
500 rooms or more

Operation
・Business revenue (rent-paying
capacity)・Service quality
・Market environment

1–499 rooms

1–499 rooms

8,856

392,724companies

rooms

98.8%

65.8%

※Based on the No. of companies (Japan)

204,574 rooms
34.2%※Based on the No. of rooms (Japan)(Source）Compiled by JSLP based on data obtained from KPMG Healthcare Japan Inc.
(Note) The data refers to the number of companies and rooms of operators of fee-based homes for the elderly and serviced housing for the elderly as of Oct.2015.

25

Back-up Operation Functions
 Stable management through the high specialization and abundant experience of JSLP Preserving the continued stability of our residents through back-up operation functions
Our Operators※ Trustgarden is a 100% subsidiary of Resorttrust Inc.

Sub-lease agreements

Sponsor support agreements

Back-up operation arrangements

SponsorsSome
operatorsof oursponsors’
subsidiaries

Some operatorsof our facilities(Nine firms)
26

Classification of senior living facilities by type
For persons living on their own（self-reliant）

For persons requiring nursing care

Mid-price range

High price range

Mid-price range

High price range

Market demand

Potential demand

△

◎

○

Monthly
housing charge

JPY 100,000 to less than
JPY 300,000

JPY 300,000 or more

JPY 100,000 to less than JPY
300,000

JPY 300,000 or more

Unit size

25～50㎡

50～100㎡

15～25㎡

18～25㎡

Roomamenities

Sharedamenities

Washroom, air conditioner, bathroom, kitchen, etc.

Washroom, air conditioner, etc.

Dining room, kitchen, publicbathroom, lounge, coffee
Dining room, kitchen, bathroom (for individual, public bath room
Dining room, kitchen, lounge,
corner, theater, Karaoke room, and mechanical bathroom), helper station, health managementetc.
hobby room, fitness room,
room, lounge, rehabilitation room, etc.
guest room, etc.

(Note 1) The above chart shows, in a simplified manner, the general features of market demand, monthly housing charge, unit size, room amenities and shared amenities assumed by JSLP
to pertain to the mentioned types of senior living facilities.
(Note 2) The monthly housing charge is calculated as follows: “the amount of lump sum received, if any, divided by the No. of months of the amortization period defined by the tenant
agreement” + “the monthly usage charge (including meal charges).”27

Typical earnings structure of senior living facilities
 JSL receives stable fixed rent fee from the operators of senior living facilities
 The level of risk of the social security system may vary, due to dependence on
public pay
Influence of the social security system

Private pay

Residents/
Users

Operators of senior living facilities
Real estateservice
Fee

Public pay
Nursing careinsurancesystemNursing
service

Hospitality
service

Medical service
Fixed rent

Insurance
fee

HealthinsurancesystemJSL
Distributions
Unitholders(Note) This is a schematic chart designed by JSL to show the typical earnings structure of senior living facilities.

28

Characteristics of senior living facilities by type
Average Required level of nursing for Senior living facilities and distribution of monthly paid fee
3rd fiscal period (2017/2)

High700,000（yen）

High price range for thosetrying to live（self-reliant）

High price range for thoserequiring nursing care

Activa Biwa

600,000(Nursing)

Monthly charged fee

Volume zone

500,000

Activa Biwa
（self-reliant）

Joy Stage
Hachioji

300,000（self-reliant）

Yuimaru
Hijirigaoka

200,000

Ten

GrandaMondo
Yakujin（selfreliant）

Mid-price range
for those（self-reliant)Yuimaru
Hijirigaoka(Nursing)（self-reliant）

Ten
Sompo Care
Lavire Kobe
Tarumi

Irise
Kamata/Yuseien

Nichii Home
Tama Plaza

Excellent
Nishinomiya
Irise Eniwa

Sawayaka
SakuraNibankan

100,000

Low(Nursing)

Nichii Home
NakanoMinamidai

New demand

400,000

Joy Stage
Hachioji(Nursing)

Mid-price
range forThose requiring
nursing care

Irise Nishioka(Alpha Eniwa Sta.
Nishiguchi Saikaihatsu
Building)

Gran Hills
Ogawarako

0
0.0

Low

0.5

1.0

1.5

2.0

2.5

3.0

Level of required nursing care (Note 2)(Note 1) This is a simplified chart designed by JSLP to organize the features of the senior living facilities in its portfolio.
(Note 2) For more information of “Level of required nursing care” (Care System in Japan), refer to page 33.

3.5

4.0

High
29

Portfolio asset example ①
S-6

Activa Biwa

With nursing

Sale-and-leaseback / New development

Acquisition price：6,940 Million yen

Address

Otsu, Shiga

Construction

RC, F4（Care residence）
RC, F7（Care center）
SRC/S,B1/F12（Residence）

Leasable area

39,649.84㎡

Completion

August 1, 2007 (Care residence）
August 31,1987 (Care center）
July 15,1987［December 2, 1987 Extension、June 2, 1992 Modification・Extension］（Residence）

No. ofrooms(capacity)384（445）

Unit size

16.25㎡～104.73㎡

Averagenursing level(Note 1)

1.0

Operator

Activa Co., Ltd.

Activa Biwa

(Note 1) For more information of “nursing level” (Care System inJapan),
refer to page 33.

Care residence30Portfolio asset example ②
S-13

Alpha Eniwa Sta. Nishiguchi Saikaihatsu
Building

Residence type

Entrance Hall

Common space

Alpha Eniwa Sta. Nishiguchi
Saikaihatsu Building

Dining room

New development

Acquisition price：1,600 Million yen

Address

Eniwa, Hokkaido

Construction

RC,B1/F6

Leasablearea

5,343.33㎡

Completion

January 28, 2015

No. ofrooms(capacity)

73（73）

Unit size

20.16㎡～28.96㎡

Averagenursing level(Note1)

2.3

Operator

Hasegawa Care Service Co., Ltd.

(Note) For more information of “nursing level” (Care System in Japan),refer to page 33.

Living space

31

Portfolio asset example ③
S-4 Yuimaru Hijirigaoka

Residence type

Dining room

Sale-and-leaseback

Acquisition price：1,175 Million yen

AddressTama, Tokyo

Construction

RC, F4 (A、B、C building）

Leasable area

4,385.53㎡

Completion

November 15, 2011

No. ofrooms(capacity)

70（109）Unit size

21.74㎡～66.84㎡

Averagenursing level(Note1)

0.3

Operator

Community.Net Co., Ltd.

Living space

Living space
Yuimaru Hijirigaoka(Note) For more information of “nursing level” (Care System in Japan),refer to page 33.

Living space32Qualifying for Care System in Japan(How to qualify the Nursing Level )Those who want to use a service provided by Long-term Care Insurance, first apply for acertification of long-term care or support need.

Applying for certification of long-term care need
The person who needs care or a member of his or her family can apply at Community Comprehensive Care Center or
the City Office.

Certification review
Someone from the city office or an agent from the home care provider commissioned by the city will interview the applicant
and his/her family regarding the applicant’s physical and mental condition. The officials need the results and provide apreliminary judgment.

Screening/ Judgement
The Long-term Care Approval Board will consider the preliminary judgment, particular matters stated at the certification
review, the attending physician’s report and determine which long-term care classification is the most appropriate. (TheLong-term Care Approval Board consists of specialists in medical treatment, public health, and welfare. They will screen andjudge applications to assess whether there is a need for care or support and, if such care or support is required, will also
determine the level of need.)

Approval (Nursing Level)
Based on the decision by the Long-term Care Approval Board, the applicant will be judged either unqualified (self-reliant),
or either Support Required (support levels 1 and 2) or Long-term Care Required (Care Levels 1-5).

33

Diverse Support from 6 Companies
with Proven Track Records
Sponsor support agreements
Preferential
negotiating
right

60% shareholder
Listed on the first section of theTokyo Stock Exchange
Notable track record as a sponsor
for 6 listed investment corporations

Development

Information
provision

Warehousing

Renovation/
maintenanceHuman
support orprovision ofexpertise

Back-up
operator

Financialaffairs

5% shareholder
Healthcare/finance pioneer
capable of accurate risk
analysis and management

Kenedix, Inc.

(Note) Including JSL

Shinsei Bank,
Limited20% shareholder
Operates senior living businessthrough subsidiary of
Seikatsu Kagaku Un-Ei Co.,
Ltd. , CENTURY LIFE and Furusato

5% shareholder
Real estate broker, realestate management, top classtrack record as a trust bank

HasekoCorporation

Mitsubishi UFJ
Trust and Banking
Corporation

LIXIL Group
Corporation

5% shareholder (Note1)
5% shareholder
Operates senior living facilities
through LIXILSENIOR LIFE COMPANY

Sompo Care Next Inc.
and Sompo Care Message
Inc. are wholly-owned
subsidiary. The top market
share for the # of room insenior living industry.

Sompo Holdings,
Inc.

(Note 1) The investment ratio is the ratio of the total shares issued by JSLP to the number of shares held by the Sponsor Company (in the case of Sompo Holdings,
Inc., the number of shares held by its subsidiary, Sompo Japan Nipponkoa Insurance Inc.).
(Note 2) “Preferential negotiating rights”: With regard to real estate that the Sponsor Company or its group firms own, the Sponsor Company assumes liability to provide or to strive toprovide information on sales of real estate to JSLP no later than such information provision to parties other than JSLP in any given situation. Even when preferential negotiating rights
or the support of information provision is applicable, the Sponsor Company does not assume liability to sell real estate at the price requested by JSL.

34

Unitholder Information(as of the end of 3rd fiscal period (2017/2))


Number of unitholders by investor type
Individuals
and others

Financial
Instruments
Business
Operators

Financial
institutions

2nd fiscal
period
（16/8）

5,299

3rd fiscal
period（17/2）

5,821

32

Other
domestic
companies

18

31

Foreigncompanies
andIndividuals

192

19

Total

35

168

Individuals and others

47

6,086

Other domestic

and Individuals
Financial Instruments Business Operators

companies

2nd fiscal

39.1

31.2

19.8

Ratio
(%)

JAPAN TRUSTEE SERVICES BANK, LTD.
(Trust Acct.)

5,989

7.06

2

TRUST & CUSTODY SERVICE BANK, LTD.
(Securities Investment Trust Acct.)

5,556

6.55

3

ＴＨＥ ＢＡＮＫ ＯＦ ＮＥＷＬＯＮ ＳＡ／ＮＶ １０

4,015

4.73

3,294

3.88

4

0.8

No. of
units
held

Name

1

Financial institutions

Foreign companies

period

Rank

5,576

Ownership ratio by investor type

Major unitholders



ＹＯＲＫ

ＭＥＬ

THE MASTER TRUST BANK OF JAPAN, LTD.
(Trust Acct.)

5

ＢＮＰ ＰＡＲＩＢＡＳ ＳＥＣＵＲＩＴＩＥＳ ＳＥＲＶＩＣＥＳ ＬＵＸＥＭＢＯＵＲＧ／ＪＡＳＤＥ
Ｃ／ＨＥＮＤＥＲＳＯＮ ＨＨＦ ＳＩＣＡＶ

3,189

3.76

6

ＴＨＥ ＢＡＮＫ ＯＦ ＮＥＷ ＹＯＲＫ， ＮＯ
Ｎ－ＴＲＥＡＴＹ ＪＡＳＤＥＣ ＡＣＣＯＵＮＴ

2,785

3.28

7

The Nomura Trust Banking Co., Ltd. (Trust Acct.)

2,739

3.23

8

KENEDIX, INC.

1,950

2.30

9

AEON Bank, Ltd.

1,750

2.06

10

JAPAN TRUSTEE SERVICES BANK, LTD.
（Trust Acct.９）

1,399

1.65

32,666口

38.54

9.2

（16/8）

1.1
3rd fiscal
period

40.0

32.3

18.3

8.3

（17/2）

0%

20%

40%

60%

80%

100%

合計

（Note）Figures are based on the No. of units and are rounded down to the second decimal place.35

Disclaimer
The contents of this document, including summary notes, quotes, data and other information, areprovided solely for informational purposes and not intended for the purpose of soliciting investment in, or
as a recommendation to purchase or sell, any specific products.
Please be aware that matters described herein may change or cease to exist without prior notice of any
kind. This document contains forward-looking statements and anticipations of future results, basedon current assumptions and beliefs in light of currently available information and resources. Risks anduncertainties, both known and unknown, including those relating to the future performance of the realestate market in Japan, interest rate fluctuations, competitive scenarios, and changing regulations or
taxation, may cause Japan Senior Living Investment Corporation (JSL)'s actual results, performance,
achievements and financial performance to be materially different from those explicitly or implicitly
expressed in this document.
With respect to any and all terms herein, including without limitation, this document, the information
provided is intended to be thorough. However, no assurance or warranties are given with respect to theaccuracy or completeness thereof.
Neither JSL nor Japan Senior Living Partners, Inc. (JSLP) shall be liable for any errors, inaccuracies, loss ordamage, or for any actions taken in reliance thereon, or undertake any obligation to publicly
update the information contained in this document after the date of this document.
Revised editions of this document will be posted on our website (http://www.jsl-reit.com/en/) if
there should be major corrections going forward.

36

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39