TSE 3460

2nd Period Results(Ended August 2016)

Japan Senior Living Partners, Inc. October 18, 2016

Table of Contents
Highlights of 2nd fiscal period (2016/8) and future initiatives

2

Investment and Operator selection criteria

26

2nd fiscal period (2016/8) financial results: Performance highlight
Earning forecasts of 3rd fiscal period (2017/2)and 4th fiscal period(2017/8)
2nd fiscal period(2016/8) financial results: Performance highlight3

Back-up Operation Functions

27

4

Classification of senior living facilities by type28

5

Typical earnings structure of senior living facilities

29

Memo

6

Characteristics of senior living facilities by type30

Portfolio overview ①

7

Portfolio asset example ①

31

Portfolio overview ②

8Portfolio asset example ②

32

Portfolio performance

9

Portfolio asset example ③

33

Initiatives for maintenance and improvement of asset value

1034

Market environment recognition and external growth activities

11

Pursuit of external growth based on various acquisition methods

12

SOMPO Holdings enters the nursing-service business

13

Qualifying for Care System in Japan
Diverse Support from 6 Companies with Proven Track
Records
Unitholder Information(as of the end of 2nd fiscal period (2016/8))
Disclaimer

Reorganization of Haseko Group’s Senior Business

14

Unitholders’ special-benefit programs (2nd fiscal period (2016/8))

15

Financial Highlights (as of the end of 2nd fiscal period (2016/8))

16

Appendices

17

Surrounding Status of Healthcare Facilities

18

Investment Thesis

19

Investment targets policies and overview of our portfolio

20

External Growth Strategy

21

Growth strategy Aligned with National Policy and Needs of Society
Stable cash flow through a long-term lease agreement with fixed
rent and high management capabilities
Status of Lease Agreements
Appraisal values(as of the end of 2nd fiscal period (2016/8))

22

35
36
37

23
24

25

1

Highlights of 2nd fiscal period (2016/8)
and future initiatives
Market Fall in cap rates runs its course in the senior living facilities trading market
 M&A for industry consolidation continues in the operator industry such as two sponsors of JSL
Current initiatives and beyond

Highlights of 2nd fiscal period (2016/8)
 Acquired silent partnership equity of limited liability company together with sponsor(KDX)etc.,

Will promote property acquisition activities bywhose asset consists of five medical facilities (intermediate nursing homes facilities) (as of Marchgrasping operator’s needs based on JSL’s own

28, 2016; 200 m. yen)

network and the sponsor company functions

Asset

according to the ORE strategy (Note) JSLP promoted mid-/long-term strong relationship with operators, through appropriate monitoring Continued to offer proposals and discussions for operators, regarding repair & renovation andWill promote revenue stabilization throughmaintaining and improving asset value including

communications management & sales methods, and promoted further revenue stabilization

capital expenditure and enhancement of In the 2nd fiscal period, JSL continued to maintain a 100.0% occupancy rate (based on contract),

relationship with operators(average of actual occupancy rate (based on end-tenants) from January 2016 to June 2016 was
86.7%)
Refinanced short-term borrowings made at IPO of 1 b. yen (Series 1-A) under the same

conditions

Debt

̵

Interest rate: Base rate +0.30%
̵

Repayment date: July 31, 2017 (1 year)

Will refinance existing long-term borrowings madeat IPO from 2018/8 (6th fiscal period)Will continue to build a steady mid-/long-term
financial foundation, aiming at a 40%+ level LTV

 Maintained financial stability with LTV of 42.4%, long-term fixed ratio of 93.3%, and averageremaining period to maturity of 3.8 years Borrowing capacity up to LTV50.0% is approx. 5 b. yen

Equity

DPU was 3,573 yen compared to forecast of 3,506 yenExpect DPU for the 3rd fiscal period to be 3,500 yenNAV per unit was 196,328 yen, 2.7% up from 191,238 yen in the 1st fiscal periodWill maintain stable distributions



Determined the outline of unitholders’ special-benefit program for the 2nd fiscal periodWill maximize unitholders’ value, and improve
unitholder return policy(Note) ORE strategy refers to strategy to provide solutions to management of Operator Real Estate with regard to effective use, opening new facilities, etc. so that healthcare facility operators can grow sustainably.

22nd fiscal period (2016/8) financial results:
Performance highlight
PL statement—overview(m. yen)

1st fiscal
2nd fiscal
2nd fiscal period
periodperiod(ended(ended Feb.
Forecast
Aug.2016)
2016)（announced on
ActualActualApr.14 2016)
③
①
②

(A)
1st (actual)vs2nd(actual)Comparison
Change③-①(B)
2nd(actual)vs2nd(forecast)Comparison
Change③-②Operating revenue

1,152

978

980

△ 172

1

Operating expense

650

609

604

△ 45

△5

Operating income

502

369

375

△ 126

6

0

0

0

△0

△0

Non-operating
expense

288

71

72

△ 216

0

Ordinary income

214

298

303

89

5

Net income

212

297

302

90

5

DPU (yen)

2,509

3,506

3,573

1,064

67

Non-operating income(Reference)
1st fiscal period(ended Feb. 2016)

2nd fiscal period(ended Aug.2016)

Total No. of issued investment units

84,75084,750

Leasing NOI (Note 1) (m.yen)

1,092

851

617

606

191,238

196,328

FFO (Note 2) (m.yen)
NAV per unit (Note 3) (yen)(A)
Major factors of difference(from the previous fiscal period) Operating revenue (△ 172)
 Operating expense (△ 45)
Decrease in operating revenue andoperating expense because theaccounting period was six months,
normal period, in the 2nd fiscal period
compared to ten months in the 1st fiscal
period Non-operating expense (△ 216)
Decrease in non-operating expense due
to absence of expenses specific to thefirst fiscal period incurred in the 1st fiscal
period (treated as a lump-sum expense)(B)
Major factors of differences(against forecast) Operating expense (△ 5)・Other operating expense due to cost
reduction: △11
・Repair expense due to bringing forwarda part of maintenances: +5(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” - “tangible fixed assets”）｝ /Total No. of issued investment units3

Earning forecasts of 3rd fiscal period (2017/2)
and 4th fiscal period (2017/8)
Earning forecasts of 3rd fiscal period (2017/2)
and 4th fiscal period (2017/8)
2nd fiscal
period(2016/8)
Actual①(A)
3rd (Forecast)vs2nd (Actual)Comparison
Change②-①

3rd fiscal
period(2017/2)
Forecast②(m. yen)(B)
4th (Forecast)vs3rd (Forecast)Comparison
Change③-②

4th fiscal
period（2017/8）
Forecast③

Operating revenue

980

987

7

987

△0

Operating expense

604

618

14

618

△0

Operating income

375

369

△6

369

0

Non-operating income

0

0

-

0

-

Non-operating expense

72

71

△0

71

0

Ordinary income

303

297

△5

297

0

Net income

302

296

△6

296

0

DPU (yen)

3,573

3,500

△ 73

3,500

-

(A)
Major factors of difference
3rd fiscal period (Forecast)against 2nd fiscal period(Actual) Comparison(＋7)
 Operating revenue
Distribution contributing thorough 3rd
period regarding silent partnershipinvestment-capital-equity obtained in
2nd fiscal period +8
 Operating expense (+14)
Repair expense ＋8
Other operating expenses ＋6

4

2nd fiscal period(2016/8) financial results:
Performance highlight
Balance sheet—overview
Item

DPU: Historical performance andforecast(m. yen)

1st fiscal period(ended Feb.
2016)
Actual

2nd fiscal
period(ended
Aug.2016)
Actual（yen）

Change

4000

3,573

Current assets
Cash and deposits

Other
Noncurrent assets
Property, plant andequipment
Intangible assets
Investment, otherassetsTotal assets

55

5,423

5,764

340

155

39

△ 116

3,500

3,500

158

145

3000

2,509
28,52928,228

△ 301

1,039

1,039

-

134

327

192

35,28335,398

115

1,000

1,000

-

316

321

5

distribution
from silent
partnership
(TK)

2000
3,517

3,341

3,355

2,509

1000

Current liabilities
Short-term borrowings

Other
Noncurrent liabilities
Long-term borrowings
Leasehold and security
deposits received
Trust tenants lump sum
deposits
Total liabilities
Total net assets
Total liabilities and net
assets

14,00014,000

-

839

839

-

3,382

3,402

20

19,53819,56425

15,744

15,83490

35,28335,398115

0

1st fiscal period(2016/2)
Actual

2nd fiscal period 3rd fiscal period(2016/8)(2017/2)
ActualForecast

4th fiscal period(2017/8)
Forecast5

memo

Portfolio overview ①
Details on portfolio
Acquisition priceTotal appraisal value

27,96530,375

JPY mil

JPY mil# of portfolio# of operators

14

11

S-13 Alpha Eniwa Sta. Nishiguchi
Saikaihatsu Building
S-10 Ten
S-11 Irise Nihisoka

Tokyo area
% share of
total acquisition
price:

Joy Stage Hachioji(Hachioji, Tokyo)

36.4%

Nichii Home
Tama Plaza(Kawasaki,
Kanagawa)

Nichii Home
Nakano Minamidai(Nakano-ward,
Tokyo)

Yuimaru
Hijirigaoka(Tama, Tokyo)

S-6 Activa Biwa
S-8 Granda Mondo Yakujin

Irise Kamata Yuseien

S-9 Excellent Nishinomiya(Ota-ward, Tokyo)

S-14 Gran Hills Ogawarako
S-7 Sompo Care
Lavire Kobe Tarumi(Note)

Osaka area
% share of
total acquisition
price:

38.5%

Activa Biwa
(Otsu, Shiga)

Sompo Care
Lavire Kobe Tarumi(Note)(Kobe, Hyogo)

Granda Mondo Yakujin(Nishinomiya, Hyogo)

Excellent Nishinomiya(Nishinomiya, Hyogo)Mid-size cityarea
% share of
total acquisition
price:

14.5%

S-12 Sawayaka Sakura Nibankan

S-5 Irise Kamata Yuseien
S-3 Nichii Home Nakano MinamidaiTen (Sapporo,

Irise Nishioka

Hokkaido)(Sapporo, Hokkaido)

Sawayaka Sakura
Nibankan (Akita,

S-2 Nichii Home Tama Plaza

Akita)

S-4 Yuimaru Hijirigaoka

Others% share of
total acquisition
price:

10.6%

S-1 Joy Stage Hachioji
Alpha Eniwa Sta.
Nishiguchi
Saikaihatsu Building

Grand Hills Ogawarako(Kamikita district, Aomori)(Eniwa, Hokkaido)(Note) On April 1, 2016, the name was changed from “Rest Villa Kobe Tarumi” to “Sompo Care Lavire Kobe Tarumi” (hereinafter, the same)

7

Portfolio overview②
Propertyno.

Facility
type

Property nameLocation

Acquisition price(m. yen)No. ofrooms

ActualOccupancyrate(Based on

As of:

Operator

end-tenants)(Note 1)

S-1

With nursing

Joy Stage Hachioji

Hachioji, Tokyo

3,675

232

91.4%

2016/8/1

NM LIFE Co., Ltd.

S-2

With nursing

Nichii Home Tama Plaza

Kawasaki, Kanagawa

2,500

160

78.8%

2016/8/1

Nichii Carepalace Company

S-3

With nursing

Nichii Home Nakano Minamidai

Nakano Ward, Tokyo

1,740

83

74.7%

2016/8/1

Nichii Carepalace Company

S-4

Residence
type

Yuimaru Hijirigaoka

Tama, Tokyo

1,175

70

100.0% (Note2)

2016/7/1

Community.Net Co., Ltd.

S-5

With nursing

Irise Kamata/Yuseien

Ota Ward, Tokyo

1,100

48

95.8%

2016/7/1

Hasegawa Care Service Co., Ltd.

S-6

With nursing

Activa Biwa

Otsu, Shiga

6,940

384

80.2%

2016/7/1

UNIMAT Retirement Community Co., Ltd.

S-7

With nursing

Sompo Care
Lavire Kobe Tarumi (Note 4)

Kobe, Hyogo

1,900

100

84.0%

2016/7/1

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% (Note2)

2016/7/1

Excellent Care System T Co., Ltd.

S-10

With nursing

Ten

Sapporo, Hokkaido

2,285

85

85.9%

2016/7/1

Social Welfare Corp. Note Fukushi Kai

S-11

Residencetype

Irise Nishioka

Sapporo, Hokkaido

800

83

86.7%

2016/7/1

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

60.3% (Note5)

2016/7/1

Hasegawa Care Service Co., Ltd.

S-14

Elderly homewith service

Gran Hills Ogawarako

Kamikita District,
Aomori

1,360

103

100.0% (Note2)

2016/8/1

Silver Town Ltd.

27,965

1,642

86.5％ (Note3)

Total/Average(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％), “Excellent Nishinomiya” (Actual occupancy rate: 104.5％), and “Gran Hills Ogawarako”(113.6％) 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,” , “Excellent Nishinomiya” ,” and “Gran Hills Ogawarako,” was calculated the actual occupancy rates respectively, as 100.0％.
(Note 4) On April 1, 2016, the property name was changed from “Rest Villa Kobe Tarumi” to “Sompo Care Lavire Kobe Tarumi” (hereinafter, the same).
(Note 5) The Actual occupancy rate of “Irise Eniwa,” which is located on the 4th–6th floors of Alpha Eniwa Sta. Nishiguchi Saikaihatsu Building, is shown, and the Actual occupancy rate of “Irise Eniwa,” which is disclosed of
IR Presentation Material of 1st fiscal period(2016/2) is 47.9% as of Feb 1,2016.
8

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 portfolio revenue
 Actual occupancy rate slightly decreased because the number of moving-out exceeded the number ofmoving-in at some facilities
Average of actual occupancy rate

Moving-in rate (Note 4)

Moving-out rate (Note 4)

Average nursing level (Note 5)

Average age (Note 5)(Based on end-tenants) (Note 3) 86.7％（-1.5％）

11.5％（-4.8％）

16.8％（+1.3％）

1.7 （+0.03）(+0.2 yrs)

85.0 yrs 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 Jul. to Dec. 2015 and Jan. to Jun. 2016. “Average nursing
level” and “Average age” represent the difference between as of the end of Dec. 2015 and as of the end of Jun. 2016.

Moving-in and Moving-out trend(Jan.-Jun. 2016)

Actual occupancy rate and Revenue trend (Jan.-Jun. 2016)(m. yen)

600

（％）

87.5%

87.2%

86.8%

86.4%

86.3%

86.0%

90.0%

25

80.0%

500

15
70.0%

400

60.0%
300

(Residents)

528

513

526

525

517

495

200

50.0%
40.0%

100

30.0%

0

20.0%

5

8

15

21

22

16

18
Net
decrease:
46

-5
-15

-23

-19

-20
-31

-29

-24

-25
Jan-2016

Feb-2016

Mar-2016

売上高
RevenueApr-2016

May-2016

Actual occupancy rate
入居率

Jun-2016-35
Jan-2016
Jun-2016
Mar-2016 2016年4月
May-2016 2016年6月
Apr-2016 2016年5月
Feb-2016 2016年3月
2016年1月
2016年2月# of Moving-in －# of Moving-out# of Moving-out# of Moving-in
入居件数
退去件数
入居件数―退去件数(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” were not disclosed because the operator did not authorize such disclosure, and accordingly were 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 Jan. to Jun. 2016 is presented.
(Note 4) Total “Moving-in” and total “Moving-out” were divided by the total capacity (during the six months from Jan. to Jun. 2016), and then annualized for presentation.
(Note 5) “Average nursing level” and “Average age” are as of the end of Jun. 2016 based on data from materials submitted by the operators. For more information of “Nursing level”(Care System in Japan), refer to page 34. 9

Initiatives for maintenance and improvementof asset value
JSL Operation Cycle

If a management issue arises…

Monitoring Will utilize regular site-visits, management reports,
comprehend the status, and evaluate the situations
 Will conduct management interviews, etc.

Step-in

Improvement
proposalRental-rates will bemaintained/improved
ORE strategy
opportunities

Strategic additional
investment（Efficient utilization of CAPEX ）

Visit to operators/facilities: Once per six months
Operators: 2 times on average
Facilities: 3 times on average

Enhanced
relationshipwith operators

Expand unitholders’ special-benefit programs
Discuss review of classification of repair paying, andconduct maintenance
Add the monitoring provision to the agreement

Replacement to handle operators’
management failure

2nd fiscal period(2016/8)
ActualAir conditioner renovation

3rd fiscal period

Air conditioner renovation, additional of toilet stools,

Plan



Replacement

Strategic additional investment examples(2017/2)



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

Monitoring in the 2nd fiscal period (2016/8)

Current Sale and leaseback New development

OrdinaryWill carry out cause analyses andimprovement measures
Require additional security deposits
Will select Back-up operators

2 m. yenchange to double window sash, central control
panel renovation, etc.

70 m. yen

Rental-rates will be maintained/
improved
10Market environment recognitionand external growth activities
Fund procurement

Real estate trading market

Operator industry

 Fall in cap rates from 2014 runs its course M&A industry consolidation is continuing Investor base is expanding for real estate JSL’s sponsors-Sompo Holdings Group hascompanies and general business operators inbecome No.1 in the industry in terms ofaddition to J-REITs and private funds

number of private nursing homes operated

 Deal information amount is increasing in thethrough M&A, while Haseko Group has

 Positive lending attitude after BOJ
introducing negative interest rates
 J-REITs continue public offering and obtainhigh volume of funds from investors
 Several REITs have been newly listed, andconducted its reorganization.

real estate trading market

J-REITs have become polarized as a whole

Acquisition of deal information

Current Pipeline

Continues to obtain a certain amount of deal information after IPO
Focuses on deal opportunities related to new development and securitization
projects based on the ORE strategy
Increasingly tends to pass bidding deals because of high pricing beyond JSL’s
target

20

By deal information type

Number of deal information (Note 1)

No. of information

ORE(New development, sale and leaseback, etc.)
ORE（開発、セール・アンド・リースバック等）

50

Number of pipeline as of the 2nd fiscal period (2016/8) (Note 2)

1

Other
その他

5.0%

By deal type

11

40
4

12

30

23

20
32

31

Other

Total no. of
information
164

10

16

ORE deals
69.5％

02015/9～2015/11

2015/12～2016/2

2016/3～2016/5

ORE

Owner
change15.0%

35sale and leaseback
10
50.0%

By asset type
19
95.0%

New Development
9
45.0%

Land
1
5.0%
Medical facilities
5
25.0%
Senior living facilities

14
70.0%

2016/6～2016/8(Note 1) The number of property information JSLP acquired from Sep. 2015 to Aug. 2016 is shown.

(Note 2) The number of properties of which LOIs are effective and which have thepreferential negotiating rights is shown.

11

Pursuit of external growth based on various
acquisition methodsBased on joint-capital-investment with the sponsor(KDX)etc., JSL has acquired equity interest in silent partnership, and has
accordingly obtained preferential negotiation rights to five medical facilities(intermediate nursing homes facilities) located in the Osaka
metropolitan area
JSL will have preferential negotiation rights for asset purchase by notifying at the price more than 11,650 m. yen by March 29th,2019.
During the silent partnership period, the assumed distribution yield from the equity interest is 11.0%. (Note 1）

Invested assets related to equity interest in silent partnership (KSLF8)

Minimum purchase priceprovided by the preferential
negotiation rights

11,650m.yen
Total of appraisal values

Property nameCanadian Hill

Anesis Hyogo

Orage Suma

Rococo-riha

Anesis Teradacho

Location

Kobe, Hyogo

Kobe, Hyogo

Kobe, Hyogo

Toyonaka, Osaka

Osaka, Osaka

Completion
Date

Jan, 2002

Sep, 2005

Sep, 2010

Apr, 2011

Oct, 2010

Appraisal value（Million yen）

1,950

1,490

2,950

2,200

3,730

No. of capacity

115

100

140
（Elderly housing withsupportive services ：40）

100

250
（Fee-based homes for theelderly with nursing care：
100）

95

75

152

114

189

4.9

5.1

5.2

5.2

5.1

98.3

86.0

77.1

89.0

63.2

Appraisal NOI（Million yen）
Appraisal NOI/
Appraisal value（％）
Actual occupancy rate （％）(Note ３)（Note１）Assumed distribution yield = “the total volume of assumed silent partnership distributions that this investment corporation received” divided by “theacquisition price of 200 m. yen” (finally annualized and rounded to the first decimal place). This is on the assumption that there was no change in thetenant agreement as of the date when JSL acquired this equity interest in silent partnership, and that this limited liability company managed the trust
beneficiary right for three years.
（Note２）Appraisal NOI yield is calculated by dividing total appraisal NOI which is noted on the appraisal report as of January 1st, 2016 by total appraisal value.
（Note３）Actual occupancy rate (Based on end-tenants) is calculated by containing the number of facility resident of geriatric health services facility, elderly
housing with supportive services, fee-based homes for the elderly with nursing care, etc., if they are in the five medical facilities.
（Note４）Average building age is calculated by weighted-average of each property’s building age by each appraisal value.（rounded to the first decimal place）（Note５) The operator of the managed assets is KouyuKai Healthcare Corporation.

12,320m.yen
Appraisal
NOI yield (Note2)

5.1％
Averagebuilding age (Note4)

7.7yrsAverage actual occupancy
rate

78.6％
12

SOMPO Holdings enters the nursing-service business
The company’s enhanced and accelerated initiatives in the nursing-service industry
Sep. 2012
May. 2014
Mar. 2015
Dec. 2015
Mar. 2016
July. 2016

Capital investment in Cedar Co., Ltd. through a limited partnership for investment business (equity: 34.0％)
Capital investment in Japan Senior Living Partners, Inc. (equity: 5.0％)
Capital/business alliance with Message Co., Ltd. (equity: 3.5％)
Acquired Watami Nursing Services Co., Ltd. as a Wholly-owned subsidiary(currently, Sompo Care Next Inc.) (equity: 100％)
Made Message Co., Ltd. a subsidiary (currently, Sompo Care Message Inc.(equity:94.6%)
Established Sompo Care Inc.
Nursing Care Business Structure of SOMPO HOLDINGS
Sompo Holdings, Inc.

Wholly-owned
subsidiary

JASDAQ Listed subsidiary

Management company:
Sompo Care Inc.

Wholly-owned subsidiary

Sompo Care Message
Inc.(Note 2)

Sompo Care Next Inc.

Affiliated company
Cedar Co., Ltd.

Sompo Care Message Inc.

Sompo Care Next Inc.

Two-Subsidiary
Total

Cedar Co., Ltd

No. of employees(consolidated)

17,731

7,145

24,876

1,737

Net sales(consolidated)

78.7billion yen

35.5billion yen

114.3 billion yen(Second highest
sales in Japan)

11.7billion yen

No. of rooms for the elderly:
Approx. 17,000 rooms
Fee-based homes for the elderly:
185 facilities
Rental housing for the elderly with living
Support service: 121 buildings

No. of rooms for the elderly:
Approx. 8,700 rooms
Fee-based homes for the elderly:
114 facilities

No. of rooms for theelderly:
Approx.25,700 rooms(Largest number in Japan)

No. of rooms for the elderly:
Approx. 2,100 rooms
Fee-based homes for the elderly:
38 facilities

At-home services:
412 offices

Outpatient nursing care office:12 offices

Main
business

Company nameAt-facility
nursingcare
At-homenursing
care(Note 1) The number of employees, net sales, and number of facilities and offices were as of March 31, 2016.
(Note 2）Message Co., Ltd. Changed its company name to Sompo Care Message Inc. on July 1,2016.

Outpatient nursing care office:32 offices

13

Reorganization of Haseko Group’s Senior Business

On April 1, 2016, Haseko Group’s Senior Business was reorganized and the business companies went into the umbrella ofHaseko Senior Holdings (Note 1)

FURUSATO Co., Ltd. community-based service provider specializing in dementia, was affiliated to enhance home nursing

services and promote the senior business cooperatively


CENTURY LIFE CORPORATION, Seikatsu Kagaku Un-Ei Co., Ltd. and FURUSATO Co., Ltd. have approx. 100 businessbases (facilities and business offices) and approx. 2,300 residents and users in total

Structure of Haseko Group’s senior living business[Current][Before Mar 31.2016]100％

Haseko Corporation

100％

91％

100％
100％

91％

Haseko Anesis
Corporation

1％

100％

1％

Haseko Senior Holdings
100％

CENTURY LIFE
CORPORATION

Fuji Kensetsu Co., Ltd.

99％

Seikatsu Kagaku Holdings

91％
91％

Haseko Anesis
Corporation

Fuji Kensetsu Co., Ltd.

99％

Haseko Corporation

Seikatsu Kagaku Un-Ei
Co., Ltd100％

SOL Hoshigaoka

100％

CENTURY LIFE
CORPORATION

100％

Seikatsu Kagaku Un-Ei
Co., Ltd

100％

FURUSATO Co.,
Ltd

(Note 2) Seikatsu Kagaku Un-Ei Co., Ltd merged SOL Hoshigaoka

Haseko Group’s senior living business(Note 1) Seikatsu Kagaku Holdings changed it company name to Haseko Senior Holdings on Apr 1, 2016.

14

Unitholders’ special-benefit programs(2nd fiscal period (2016/8))

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. 384 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,
Kanagawa, Chiba,
Aichi, Hyogo,
Osaka, Hiroshima

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

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

CENTURY LIFE CORPORATION

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

Areas:
Tokyo, Kanagawa,
Saitama
Chiba, 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)

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

89 facilities
Areas:
Hokkaido, Tokyo,
Kanagawa, Saitama,
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

13 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

55 facilities
Areas:
Hokkaido, Akita, Niigata,Tochigi, Saitama
Chiba, Aichi, Mie, Osaka
Kyoto, 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(Note 1) The special benefits will be applied to private nursing homes that are managed by Sompo Care Next Inc., Seikatsu Kagaku Un-Ei Co.,Ltd., CENTURY LIFE CORPORATION, LIXIL Corporation (“LIXILSENIOR LIFE”), Nichii Carepalace Company, Sawayaka Club Corporation, Hasegawa Care Service Co., Ltd, Excellent Care System Co., Ltd., and NMLIFE Corporation.
(Note 2) The special benefits will be applied to facilities available as of the record date (Aug. 31, 2016).

Area:
Tokyo

15

Financial Highlights(as of the end of 2nd fiscal period (2016/8))
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)

42.4%

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 3.8 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.

16Appendices17

Surrounding Status of Healthcare Facilities
 The proportion of the aged 65 or over to the total population in Japan is expected to risefrom 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 ＞
Population(Thousand)

1947

1955

0 ～４(age)15 ～64(age)Over 65 (age)The rate of population 65
years or older (%)

1965

1975

1985

1955

2005

2010

2025

2035

2045

2055

（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＞
Facilities# of capacity＜Registration trend of serviced housing for the elderly ＞(Rooms)(facilities)

Facilities# of capacity

2006

2007

2008

2009

2010

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

2011

2012

2013

（Source) Residence for elderly people with service system（June 30,2016)18

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 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

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.
Serviced housing for the elderly

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

2.7%

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

78.1%

UNIMAT Retirement
Community Co., Ltd.

24.8%

4.2%

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

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
6.8%

self-reliant
22.2%

Long-term
Care
Required- 4
12.3%

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
10.0%

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
13.1%

Long-term Care
Required- 1
19.6%

SupportRequired-1
11.2%

SupportRequired-2
4.8%(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 34.

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

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.

22

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
Selection of operator with management track record

Stable cash flow through a long-term lease agreement with fixed rent
Average leasing period

Average remaining period oflease

Fixed-rent ratio

17.0 yrs

100.0%

23.6 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

Lease agreement
period remaining

42.7%

Operator

100.0%

Fixed-rent ratio
15 years toless than 20 years:
3 properties

19.3%(Note 1) The data is as of the end of the 2nd fiscal period (ended Aug. 2016). 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.

Officers and personnel
dispatched fromsponsors

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

Stablecash flow
achieved

Facilities
operated

No. of rooms(capacity)(Note 2)

(Note 2)

Listed/unlisted

June 2, 1975

44,972

153

4,668（4,398）

Listed on JASDAQ on the Tokyo
Stock Exchange

Nichii Carepalace
Company

June 22,
1964－（Note3）70

4,553（4,439）Subsidiary of Nichii Gakkan
Company, which is listed on thefirst section of the Tokyo Stock
Exchange

NM LIFE Co., Ltd.

October 5,
1995

895

1

263
（232）

100% subsidiary of Iriscare Inc.,
which is unlisted

Hasegawa Care Service
Co., Ltd.

November 1,
2006

14,047

114

6,211（6,198）UnlistedSocial Welfare Corp.
Note Fukushi Kai

June 13,
1983

5,814

41

1,461
（792）

Unlisted

Sompo Care Next Inc.

November 11,
1992

35,535116

8,769（8,507）

Subsidiary of Sompo Japan
Nipponkoa Holdings, Inc., which islisted on the first section of theTokyo Stock Exchange

Benesse Style Care Co.,Ltd.

September 7,
1995

93,601

295

16,381（15,796）

Consolidated subsidiary ofBenesse Holdings,Inc. which islisted on the first section of theTokyo Stock Exchange

Community Net Co., Ltd.

June 24,
1998

1,370

9

869
（455）

Unlisted

Sawayaka Club Co., Ltd.

December 1,
2004

13,19566

4,043（4,010）Consolidated subsidiary of
UCHIYAMA HOLDINGS Co., Ltd.,
which is listed on the first sectionof the Tokyo Stock Exchange

Excellent Care System T
Co., Ltd.

August 2,
2004

2,590

37

1,238
（1,042）Unlisted

February 25,
2003

155

3

188
（178）

Unlisted

UNIMAT Retirement
Community Co., Ltd.

The Highly Specialized, Abundantly Experienced Members of
Our Asset Manager(JSLP)

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

29.1%

Established

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 ofDecember 31,2015, Hasegawa Care Service Co., Ltd. is as of September 30, 2015, Excellent Care System T Co., Ltd. is as of July
31,2015 and Silver Town Ltd. is as of August 31, 2015.
(Note2) The figures for "facilities operated" and "no. of room (capacity)" are as of June 30, 2016. However, Sompo Care Next Inc. is as ofAugust 31, 2016 and Silver Town Ltd. is as of December 31, 2015.
23(Note3) 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

Rent revision
Rent revision of correspondDate
to fiscal
periodS-01

Withnursing

Joy Stage Hachioji

NM LIFE Co., Ltd.

July 31, 2014

July 31, 2024

July 31, 2034

17.9

No principle（Note3)

-

-

S-02

With
nursingNichii Home Tama Plaza

Nichii Carepalace Company

August 1, 2002

August 1, 2018

July 31, 2022

5.9

3yrs

August 1, 2018

6th fiscal
PeriodS-03

WithnursingNichii Home Nakano Minamidai

Nichii Carepalace Company

April 1, 2007

March 31, 2027

March 31, 2027

10.6

3yrs

April 1, 2016

2nd fiscal
periodS-04

Residence
type

Yuimaru Hijirigaoka

Community.Net Co., Ltd.

December 17, 2014

December 16, 2022

December 16, 2064

48.3

No principle（Note4)

-

-

S-05

With
nursing

Irise Kamata/Yuseien

Hasegawa Care Service Co.,Ltd.

July 1, 2012-

June 30, 2042

25.8

5yrs

July 1, 2017

4th fiscal
periodS-06

Withnursing

Activa Biwa

UNIMAT Retirement
Community Co., Ltd.

August 31, 2007

August 31, 2017

August 30, 2027

11.0

3yrs

August 31, 2018

6th fiscal
periodS-07

Withnursing

Sompo Care
Lavire Kobe Tarumi (Note 4)

Sompo Care Next Inc

May 13, 2010

May 31, 2028

May 31, 2030

13.8

No principle（Note5)

-

-

S-08

Residence
type

Granda Mondo Yakujin

Benesse Style Care Co., Ltd.

July 31, 2014

July 30, 2037

July 30, 2037

20.9

No principle（Note5)

-

-

S-09

With
nursing

Excellent Nishinomiya

Excellent Care System T Co.,
Ltd.

October 8, 2014

October 7, 2022

October 7, 2034

18.1

No principle（Note4)

-

-

S-10

With
nursing

Ten

Social Welfare Corp. Note
Fukushi Kai

September 15, 2007

February 26, 2023

February 26, 2038

21.5

No principle（Note4)

-

-

S-11

Residencetype

Irise Nishioka

Hasegawa Care Service Co.,Ltd.

June 1, 2014

March 31, 2027

May 31, 2044

27.8

No principle（Note3)

-

-

S-12

With
nursing

Sawayaka Sakura Nibankan

Sawayaka Club Co., Ltd.

March 27, 2013

March 27, 2023

March 27, 2033

16.6

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

28.6

No principle（Note3)

-

-

S-14

Elderlyhome withserviceGran Hills Ogawarako

Silver Town Ltd.

April 27, 2007

May 31, 2024

October 31, 2029

13.2

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.
24（Note７）Unless the property no defect or be usable, It is not possible to request of rent fee reduction.

Appraisal values(as of the end of 2nd fiscal period (2016/8))

No.

Property nameAppraiser

Acquisition
price(m. yen)（A）

End of 2nd fiscal period (as of Aug.31,2016)
Book value(m. yen)（B）

Appraisalvalue(m. yen)（C）

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

End of 1st fiscal period(as of Feb.29,2016)
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

3,830

3,800

5.3%

-0.8%

3,780

5.3%

20

0.5%

0.0%

S-02

Nichii Home Tama Plaza

JREI

2,500

2,553

2,760

5.0%

8.1%

2,760

5.0%

0

0.0%

0.0%

S-03

Nichii Home Nakano Minamidai

JREI

1,740

1,774

2,020

4.3%

13.8%

2,020

4.3%

0

0.0%

0.0%

S-04

Yuimaru Hijirigaoka

Tanizawa

1,175

1,222

1,410

4.7%

15.3%

1,380

4.8%

30

2.2%

-0.1%

S-05

Irise Kamata/Yuseien

JREI

1,100

1,129

1,190

4.6%

5.4%

1,190

4.6%

0

0.0%

0.0%

S-06

Activa Biwa

JREI

6,940

7,206

7,300

5.5%

1.3%

7,300

5.5%

0

0.0%

0.0%

S-07

Sompo Care
Lavire Kobe Tarumi (Note 6)

JREI

1,900

1,972

2,040

5.1%

3.4%

2,030

5.1%

10

0.5%

0.0%

S-08

Granda Mondo Yakujin

Tanizawa

1,180

1,284

1,260

4.8%

-1.9%

1,230

4.9%

30

2.4%

-0.1%

S-09

Excellent Nishinomiya

JREI

750

777

918

5.3%

18.0%

918

5.3%

0

0.0%

0.0%

S-10

Ten

JREI

2,285

2,457

2,560

6.3%

4.2%

2,560

6.3%

0

0.0%

0.0%

S-11

Irise Nishioka

Tanizawa

800

877

877

5.1%

0.0%

867

5.2%

10

1.2%

-0.1%

S-12

Sawayaka Sakura Nibankan

JREI

960

1,009

1,010

5.6%

0.1%

1,010

5.6%

0

0.0%

0.0%

S-13

Alpha Eniwa Sta. Nishiguchi
Saikaihatsu Building

Tanizawa

1,600

1,718

1,790

5.2%

4.2%

1,760

5.3%

30

1.7%

-0.1%

S-14

Gran Hills Ogawarako

JREI

1,360

1,452

1,440

6.9%

-0.8%

1,440

6.9%

0

0.0%

0.0%

27,96529,26730,3755.3%

3.8%

30,245

5.3%

130

0.4%

0.0%

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.

25

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.

26

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
UNIMAT Retirement Community Co., Ltd.
Nichii Carepalace Company
NM LIFE Co., Ltd.

Hasegawa Care Service Co., Ltd.

Social Welfare Corp. Note Fukushi Kai

Sompo Care Next Inc.

Silver Town Ltd.

Sawayaka Club Co., Ltd.

Benesse Style Care Co., Ltd.

Excellent Care System T Co., Ltd.

Sub-lease agreements

Sponsor support agreements

Back-up operation arrangements

SponsorsSome
operatorsof oursponsors’
subsidiaries

Some operatorsof our facilities(Nine firms)
27

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).”28

Typical earnings structure of senior living facilities
 JSL receives stable fixed rent fee from 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

Users

Senior living facilities
Real estateservice
Fee

Public pay
Nursing careinsurancesystemNursing
service

Hospitality
service

Medical service
Fixed rent

Insurance
fee

HealthinsurancesystemJSL
Distribution
Investors(Note) This is a schematic chart designed by JSL to show the typical earnings structure of a senior living facility.

29Characteristics of senior living facilities by type
Average Required level of nursing for Senior living facilities and distribution of monthly paid fee
2nd fiscal period (2016/8)High600,000（yen）
Nichii Home
NakanoMinamidai

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

Activa Biwa
(Nursing)

Joy Stage
Hachioji

500,000

Monthly charged fee(Nursing)

Volume zone

New demand
400,000

Joy Stage
Hachioji

300,000

200,000

Mid-pricerange
for those（selfreliant）

Granda Mondo
YakujinTen（self-reliant）（self-reliant）

Activa Biwa
（self-reliant）

Yuimaru
Hijirigaoka

Mid-price
range forThose requiring
nursing care（self-reliant）

Ten(Nursing)

Sompo Care
Lavire Kobe Tarumi

Nichii Home
Tama Plaza

Yuimaru
Hijirigaoka(Nursing)

Excellent
Nishinomiya

100,000

Low

Irise
Kamata/Yuseien

Irise Eniwa

Irise Nishioka

Sawayaka
SakuraNibankan

Gran Hills
Ogawarako

0

0.0

Low

0.5

1.0

1.5

2.0

2.5

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 34.

3.0

3.5

High
30

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

UNIMAT Retirement Community Co., Ltd.

Activa Biwa

(Note 1) For more information of “nursing level” (Care System in Japan),refer to page 34.

Care residence

31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 1) For more information of “nursing level” (Care System in Japan),refer to page 34.

Living space

32

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 1) For more information of “nursing level” (Care System in Japan),refer to page 34.

Living space

33

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).

34

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.

35

Unitholder Information(as of the end of 2nd fiscal period (2016/8))
Number of unitholders by investor type

Individuals
and others

Financial
institutions

Financial
Instruments
Business
Operators

Otherdomestic
companies

Foreigncompanies
andIndividuals

1st fiscal
period（16/2）

5,092

30

23

214

30

2nd fiscal
period
（16/8）

5,299



32

18

192

Total

Financial
institutions

Foreigncompanies
andIndividuals

Otherdomestic
companies

Rank

Name

No. of
units
held

Ratio
(%)

1

JAPAN TRUSTEE SERVICES BANK, LTD.

6,976

8.23

2

TRUST & CUSTODY SERVICE BANK, LTD.

4,953

5.84

3

ＴＨＥ ＢＡＮＫ ＯＦ ＮＥＷ ＹＯＲＫ，
ＮＯＮ－ＴＲＥＡＴＹ ＪＡＳＤＥＣ ＡＣＣＯＵＮＴ

4,442

5.24

4

ＴＨＥ ＢＡＮＫ ＯＦ ＮＥＷ ＹＯＲＫＭＥＬＬＯＮ ＳＡ／ＮＶ １０

3,326

3.92

5

ＢＮＰ ＰＡＲＩＢＡＳ ＳＥＣＵＲＩＴＩＥＳ ＳＥＲＶＩＣＥＳ ＬＵＸＥＭＢＯＵＲＧ／ＪＡＳＤＥＣ／ＨＥＮＤＥＲ
ＳＯＮ ＨＨＦ ＳＩＣＡＶ

3,189

3.76

6

THE MASTER TRUST BANK OF JAPAN, LTD.

2,669

3.14

7

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

2,366

2.79

8

KENEDIX, INC.

1,950

2.30

9

AEON Bank, Ltd.

1,750

2.06

10

ＢＮＹＭＬ－ＮＯＮ ＴＲＥＡＴＹ ＡＣＣＯＵＮＴ

1,291

1.52

Total

32,912

38.83

5,389

35

5,576

Ownership ratio by investor type
Individuals
and others

Major unitholders



Financial Instruments
Business Operators

1.5
1st fiscal
period

43.5

28.8

16.1

10.2

（16/2）

0.8

2nd fiscal
period

39.1

31.2

19.8

9.2

（16/8）
0%

20%

40%

60%

80%

100%

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

36

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.

37

38

39