2-1-6 Uchisaiwaicho, Chiyoda-ku, Tokyo

Security code: 8972

Kenedix Office Investment Corporation
Semiannual Report 32nd Fiscal Period
November 1, 2020–April 30, 2021

METROPOLITAN

AREA
Kenedix Office Investment Corporation

02

Characteristics of Kenedix Office
Investment Corporation
We seek to maximize unitholder returns by focusing on investing in andmanaging mid-sized office buildings in the Tokyo metropolitan area to generate
stable profits and sustainably expand assets under management.
We recognize the importance of factoring environmental, social, and governance(ESG) considerations into real estate investment management. Strengthening
efforts to help realize social sustainability is a key management priority.
Investment management strategy of the Investment Corporation
Tokyo metropolitan area
investment ratio (Note 1)

Mid-sized office building
investment ratio (Note 1)

81.3%

Maximizing
unitholder returns

83.9%

Proactive acquisition of environmental certifications and assessments
Number of certified
assessed properties (Note 2)

42

Percentage of total
floor area (Note 2)

Contributing
to a sustainable
environment

57.1%

Abundant numberof properties

Image of a typical mid-sized
office building
8–10 stories
Total floor area:
500–3,000 tsubo(roughly 1,600–9,900 m2)
Around2 elevators
Around100–150 tsubo(roughly 330–500 m2)
per floor of rental area

Characteristics
and attractivenessof mid-sized
office buildingsin the Tokyo
metropolitan area

83.0%

The ratio of mid-sized office buildings(total floor area of 500 tsubo or more but
less than 3,000 tsubo (roughly 1,600–
9,900 m2)) in the 5 central wards of Tokyo
is 83.0%. (Source 1) (Note 3) There are many
more mid-sized office buildings than largesized office buildings, so there are many
excellent investment opportunities, and midsized buildings are more efficient to operate
than small-sized office buildings.

Table of Contents

Characteristics of Kenedix Office Investment Corporation 
Results for the 32nd Fiscal Period (Apr. 2021) 
Message from the Management 
Sustainability Initiatives 
Initiatives Aimed at External Growth 
Initiatives Aimed at Internal Growth 
Financial Strategy 

2
4
6
10
12
13
14

2

15
16

18
19
20
21
45

Investor and Property Information
Unitholders’ Information 
Portfolio 

Financial Section
Financial Summary (Unaudited) 
Balance Sheet Statement of Income and Retained Earnings Statement of Changes in Net Assets Statement of Cash Flows 
Notes to the Financial Statements 
Independent Auditor’s Report 47
49

High liquidity

Broad tenant base

Favorable supply–demandbalance in the leasing market

61.7%

92.2%

83%

Transaction prices for mid-sized officebuildings range from approximately 1billion yen to 10 billion yen, and suchtransactions account for 61.7% of alltransactions (the percentage of trading
volume consisting of transactions
between 1 billion yen and 10 billion yen).
Such properties are relatively actively
traded. (Source 2)

The percentage of business establishmentswith fewer than 30 employees, which
are the main users of mid-sized officebuildings, is high at 92.2% in Tokyo. (Source 3)
We therefore believe that even if vacancies
occur, new tenants will be relatively easy
to find and we will be able to maintain highoccupancy rates.

The percentage of small and mid-sizedbuildings built 20 years or more ago inTokyo’s 23 wards (leased area basis) is
83%, and new supply is limited compared
to large-sized office buildings. (Source 4)
We are able to secure competitiveness byappropriately managing and operatingthese buildings, continuing to renovate theirfacilities, and performing construction work
to upgrade their value.

Note 1:
Note 2:

Shown as the ratio of the acquisition price for each category to the total acquisition price, rounded down to the first decimal place (as of the end of the 32nd fiscal period (Apr. 30, 2021)).
The number of properties is counted without duplication in case a property has multiple certifications and assessments. The total floor area ratio is calculated without duplication by dividing certified floor area by
total floor area of the portfolio (as of the end of the 32nd fiscal period (Apr. 30, 2021)).
Note 3: Percentage of the number of rental office buildings located in the 5 central wards of Tokyo that are surveyed by CBRE K.K. by building size (as of the end of September 30, 2016).
Source 1: Based on a survey conducted by CBRE K.K. at the request of the Asset Management Company.
Source 2: Compiled by the Asset Management Company based on “the number of office building transactions by transaction size (FY2008-FY2020)” from the “Real Estate Transactions Study” by Urban Research InstituteCorporation, a think tank specializing in real estate in the Mizuho Financial Group.
Source 3: Compiled by the Asset Management Company based on “2014 Economic Census for Business Frame Tokyo (revised results) (as of March 27, 2017).”
Source 4: Compiled by the Asset Management Company based on “Tokyo 23 Wards | Office Stock Pyramid 2021” published by XYMAX REAL ESTATE INSTITUTE Corporation on January 15, 2021.
Refer to the following for the definitions of each term used in this document.
● “5 central wards of Tokyo” refers to Chiyoda, Chuo, Minato, Shinjuku, and Shibuya wards.
● “Tokyo metropolitan area” refers to Tokyo, Kanagawa, Saitama, and Chiba prefectures.
● “Other regional areas” refers to regional core cities such as government ordinance-designated cities.
● Kenedix Office Investment Corporation is referred to as “the Investment Corporation” or “KDO,” and Kenedix Real Estate Fund Management, Inc., “the Asset Management Company” or “KFM.”● “Mid-sized office buildings” as defined by the Investment Corporation refers to rental office buildings whose main use under the Building Standards Act is for offices and whose total floor area of the entire building
stated in the certificate of all registered elements fulfills the criteria of 13,000 m2 or less in the 23 wards of Tokyo and 20,000 m2 or less outside the 23 wards of Tokyo.

Kenedix Office Investment Corporation3

Results for the 32nd Fiscal Period (Apr. 2021)
32nd fiscal period (Apr. 2021)
Trend in distributions per unit (DPU)

+12.1

%
growth over
two years

15,384±0.0% period over period
yen +1.3% compared with forecast (Note)
Note: As of December 14, 2020

■ Increase due to gain on sale of properties(Yen)

15,384

15,384792

1,179

14,592

14,20531st fiscal
period32nd fiscal
period14,412

13,71913,639619
13,10028th fiscal
period29th fiscal
period(Apr. 2019)(Oct. 2019)30th fiscal
period(Apr. 2020)(Oct. 2020)(Apr. 2021)（期）

32nd fiscal period (Apr. 2021) results
Gain on sale ofreal estate properties

AUM

440.1

billion yen

0.92

billion yen

Balance of reserve for
reduction entry (Note)

3.91

billion yen

Sold KDX Hon-Atsugi Building,which had a persistently low occupancy rate

Part of the gain on the sale was distributed andthe remainder was retained in internal reserves

Utilized to stabilize distributions in anticipationof a temporary revenue decline

Occupancy rate

Increase in monthly rent
from tenant turnover

Increase in monthly
rent upon rent revision

96.7

＋

%

We are maintaining an occupancy rate above 96%
despite the delay in gaining control over
COVID-19 and declining occupancy

6.8

million yen

9.9＋

million yen

The level of rent charged has increased
for 76.3% of new tenants

Achieved rent increases even amid
the COVID-19 pandemic

Average interest rate oninterest-bearing debt

Interest-bearing debt ratio (LTV)

Commitment line

0.94

43.4

Worked to reduce interest rate costs
while maintaining good relationships
with financial institutions

Maintained stable financial baseby keeping LTV at a conservative level

%

%

3.0

＋

billion yen

Reduced refinancing risk further
through an increase in the commitment line

Note: The reserve for reduction entry was calculated by adding the provision of reserve for reduction entry stated in Basis for Calculating Cash Distribution for the relevant fiscal period to the balance of reserve for
reduction entry on the balance sheet as of the end of the relevant fiscal period.

4

Status of credit rating
The investment results of the Investment Corporation wererecognized. Japan Credit Rating Agency, Ltd. (JCR) changed its
credit rating outlook to AA- (positive) on March 12, 2021.
We will strive to building an even stronger portfolio andimprove the credit rating further through growth in AUM, while
continuing stable financial management.

AA(Stable)AA(Positive)

Japan Credit Rating Agency, Ltd.

Strengthening support by sponsors
70% investment interest

Kenedix, Inc., the sponsor of the Asset Management Company,
has built a strategic partnership structure with Sumitomo
Mitsui Finance and Leasing Co., Ltd. through a capital andbusiness alliance.
One of the business synergies anticipated from building
this partnership structure is strengthening the REIT and
private placement fund businesses. We think this will lead tostronger financing and property acquisition capabilities for theInvestment Corporation.

First Sectionof the Tokyo
Stock Exchange
Listing

Went private
on March 17,
2021

Established a strategic
partnership structure
through capital andbusiness alliance

Shareholders
Sumitomo Mitsui
Financial Group, Inc.
50%
Sumitomo Corporation
50%

Strengthening REIT and
Private Placement FundBusinesses

Expansion of New
Business Domains

Supplementation ofCreditworthiness andEnhancement of Fund
Raising Capacity

Sharing Know-how on
SDGs Management

Strengthening
Competitiveness by
Sharing Experience,
Knowledge,
and Know-how throughMutual Exchange of
Human Resources

Kenedix Office Investment Corporation

5

Message from
the Management
Distributions per unit for the fiscal period under review (32ndfiscal period (Apr. 2021)) were 15,384 yen, on par with theprevious fiscal period, and up 204 yen from the previous forecastof 15,180 yen(Note), an increase of 1.3%.
KDX Shin-Nihonbashi Building was sold at the beginningof the period, resulting in recognition of a gain on the sale ofaround 1.12 billion yen. KDX Hon-Atsugi Building was sold at
the end of the fiscal period, resulting in recognition of a loss on
the sale of approximately 200 million yen. The two properties
together resulted in a net gain of roughly 920 million yen. Around
500 million yen of this was returned as distributions and theremaining amount of roughly 420 million yen was provisioned to
the reserve for reduction entry.

Note: As of December 14, 2020

KDX Shin-Nihonbashi Building was part of a mutual purchaseand sale with a developer that was executed last year. The KDX
Nihonbashi Honcho Building and KDX Nihonbashi Edo-dori
Building were transferred as part of this transaction first. KDX
Shin-Nihonbashi Building was transferred later, securing rental
business income for a certain period of time.
KDX Hon-Atsugi Building, which was sold at the end of theperiod, continued to experience a slump in the occupancy rate.
The decision to sell the property was made because we anticipatedfurther deterioration in profitability due to higher repair costs inthe future.
The series of asset reshuffling from the 31st fiscal period
has resulted in a lower building age, better locations, and otherimprovements in portfolio quality. The recognition of gains onsale has made it possible to increase distributions for the second
consecutive fiscal period and to increase the internal reserve.

Jiro Takeda
Executive Director,
Kenedix Office Investment Corporation
Director & COO, Head of Office REIT Department,
Kenedix Real Estate Fund Management, Inc.

6

We achieved a 204-yen increase in distributions per unit (DPU) in the 32nd fiscal
period, owing to agile, flexible asset management amid the COVID-19 pandemic.
In terms of internal growth, the occupancy rate was 96.7% as ofagreement renewal during the fiscal period, the property

April 30, 2021, a 1.4% decrease from the end of last fiscal period

management company’s persistence in negotiations in proposing(October 31, 2020) and 1.3% less than the forecast of 98.0% six

increased rent amount on the remaining space to some clientsmonths ago.

who requested cancellation of some of their leased space amid

I think the main reasons why the occupancy rate

the severe market environment during the pandemic resulted inunderperformed the forecast were a rise in the turnoverhigher rent on renewals for 36 tenants and 25.6% of the floor area.

ratio during the fiscal period and the continued high level of

These results outperformed the previous fiscal period, despite thecancellation requests from tenants. The vacancy period was also

COVID-19 pandemic.

longer than expected, mainly due to the time it took to refill
large vacancies.

The trend towards a gradual decline in market rent has grownstronger amid an environment in which the timing for achieving

The sense of uncertainty in regard to the corporate business

control over the COVID-19 pandemic cannot be foreseen. Vacancy

environment has not been eliminated amid conditions in whichrates continue to rise as the trend toward shrinking offices due

no clear end to the COVID-19 pandemic can be seen due toto the expansion of working from home continues. However, thethe repeated State of Emergency declarations. We therefore

importance of offices has recently been recognized anew.

expect the turnover rate to remain at a high level for some time.

As progress is made on vaccinations and corporate economic

However, vacancies are filling at a relatively steady rate in theactivities normalize, the trend toward workers returning tosmall to medium-sized building category. Once progress is madeoffices will grow stronger. We expect relocation activities to

on vaccinations and COVID-19 infections begin to decline, theresume among companies that have frozen relocation plans amid

tenant cancellation rate is also expected to gradually decline as thethe pandemic up to now and have been searching for a post-

percentage of employees working in corporate offices increases.

COVID-19 approach to the office. We think that the likelihood of a

While the occupancy rate may temporarily decline in the future,

dramatic shrinkage in future office demand is weakening.

we expect to be able to maintain it at a certain level.
While pressure from tenants to lower unit rent is increasing

In light of these points and the fact that the supply of spacein large office buildings is relatively limited this year and next,in leasing activities, we are negotiating to conclude leasing

we expect the future office market to gradually transition from aagreements that maintain new unit rent at the market level prior to

gentle adjustment phase to a return to stability as the COVID-19

COVID-19, in return for a longer free rent period.

pandemic is brought under control.

We are therefore achieving an average increase of 1,317 yen

Regarding the impact of the COVID-19 pandemic since theper tsubo (roughly 3.3 m ) on 76.3% of rental units, out of thelast results announcement, we received many requests for rent

units that had tenant turnover, despite the prolonged impact fromreduction over roughly six months, but the majority of newly

the COVID-19 pandemic.

agreed rent reductions are limited to a specific period of time and2Thus, while the free rent period has been slightly extended

we expect the impact on revenues to be limited.

in refilling vacancies, the level of rent on new leasing
agreements has not declined substantially, and this willconsequently lead to growth in revenue from tenant turnover andresolution of the rent gap.
Regarding rent increases for existing tenants facing leasing

Kenedix Office Investment Corporation

7

Message from the Management

Moreover, we have continued preparations for introducing
offices with interiors and furnishings that incorporate the conceptof ABW (Activity Based Working) in the KDX Iidabashi Building

0.94% at the end of this fiscal period, and the average remaining
period to maturity was 4.7 years.
In terms of our credit rating, the investment record of the

as a TurnKey Office. This is one of our initiatives to respond to

Investment Corporation was recognized. The Japan Credit

diversification of office needs.

Rating Agency, Ltd. (JCR) changed its rating of our investment

Construction on this project began in January of this year andwas completed this May.

corporation from AA- (stable) to AA- (positive), and a solid AA
rating is now within sight.

The layout on each floor has been designed to capture a

We also continue to focus on sustainability initiatives. In terms

wide range of demand from small units of around 50 tsubo

of environment-related ratings and certifications, we obtained the(roughly 165 m ) to somewhat larger units of around 180 tsubo

BELS Certification for two properties this fiscal period, including(roughly 595 m ), while incorporating different design concepts

the new KDX Shinbashi Ekimae Building.

22

on each floor.

Regarding reduction in energy usage through construction to

Full-scale leasing has now resumed and we will strive to leaseinstall LED lighting, construction on the common areas is nearly

up units quickly as we utilize a variety of new marketing methods.

complete. We are also making systematic progress on installing

As part of our financial strategy, we concluded a total of

LED lighting in the dedicated sections. We worked on construction

3.0 billion yen in new commitment line agreements with threeat 13 properties this fiscal period and this is expected to cut energy

financial institutions. This brought our total commitment line

usage by around 600,000 kWh per year, according to estimates

to 9.0 billion yen, and we are making further efforts to reducebased on the manufacturer’s specifications.

refinancing risk.
We took advantage of the continued low interest rate

As already disclosed, Kenedix, Inc., the sponsor of the Assetenvironment to refinance a total of 19.7 billion yen, successfullyManagement Company, has built a strategic partnership structure

extending the borrowing period while reducing interest. As awith Sumitomo Mitsui Finance and Leasing Co., Ltd. through a

result, the average interest rate on all interest bearing debt wascapital and business alliance.
One of the business synergies anticipated from building
this partnership structure is a stronger REIT and private fundbusiness. We think this will lead to stronger financing and property
acquisition capabilities for the Investment Corporation.
Since COVID-19 began spreading last year, there have been cases
in which some have theorized that offices will no longer be neededover the medium and long term, due to the introduction of working
from home with the spread of telecommuting. However, I feel thatpeople have also come to recognize the many issues with working
from home over time.
In one survey, 70% of workers who had experienced working
from home responded that they wanted to work in the office three
to four days a week, rather than mainly working at home.
Working from home can save on commuting time, improve

We planned a TurnKey Office with an interior and furnishings that incorporate theconcept of ABW in KDX Iidabashi Building. It was completed in May 2021.

8

work efficiency, and make it easier to achieve work-life balance.
However, it is apparently becoming clear that these advantages areIt is important to accurately read the changes that the spread of telecommuting is
causing in the vision of an office and in the functions desired in an office building,and provide attractive office space that meets those needs.

accompanied by disadvantages such as a decline in productivity

by continuing to keep a close eye on trends in market purchases

because workers cannot secure the space to concentrate whileand sales while focusing on asset reshuffling and finding excellent

working, a weakening of the sense of affiliation with the company,

acquisition opportunities.

and mental distress from stronger feelings of loneliness, among
other factors.

In terms of internal growth, as the pace of vaccinations
accelerates, we will focus on the potential for gradual resumption

At present, amid the COVID-19 pandemic, I do not feelof relocation plans by companies that have been searching forthat many companies are attempting to establish workplacea vision of the office, post-COVID-19. We will engage in agile

environments based mainly on permanently working from homeleasing and adapt investment to the diversification in demand.

through relocation. Many companies are keeping the percentage

Our financial strategy is to maintain good relationshipsof employees working in the office low as a temporary emergency

with financial institutions while also utilizing the stronger

measure to ensure the safety of employees. Those companies are

creditworthiness of the Kenedix Group achieved through capitalconsidering the functions and vision of a post-COVID-19 officealliances of our sponsor. We will continue to reduce interest

while waiting for COVID-19 to be brought under control. Post-

costs even further with an awareness of even distribution of

COVID-19, we anticipate that companies will make concurrent

repayment dates.

use of satellite offices, shared offices, workation (work vacation)

For ESG, we will continue initiatives aimed at improving

facilities, and other locations in addition to the main office andsustainability and will strive to achieve both sustainable growthhome, to achieve a good balance according to the type of businessand fulfill our corporate social responsibilities.

and type of work.
Even after COVID-19 is brought under control, companies thathave developed a fresh recognition of the importance of the office

We intend to target improvement in shareholder value,
expressed in terms of distributions and net asset value (NAV),
through such initiatives.

will presumably need a certain amount of extra seats in the main
office if they are trying to ensure freedom in work locations. Even

I ask for your continued support of Kenedix Office Investment

if the widespread telecommuting causes more decentralization

Corporation in the future.

of workplaces, this is not expected to cause a substantial decline
in office demand. We think we can maintain the profitability andvalue of office buildings by fully meeting the diversified officeneeds and providing office spaces that are attractive in terms of thesoft aspects and not just the hard aspects.
There has been no change in our basic policy concerning
future initiatives.
First, in terms of external growth, a notable deterioration in
the financing environment was not seen even after COVID-19
became widespread. While the tough environment for property
acquisition persists, we will strive to achieve sustainable growth

Kenedix Office Investment Corporation9

Sustainability Initiatives
To achieve sustained growth of the Kenedix Group along with stakeholders and society,
we have established material issues and five key areas to pursue. We aim to contributeto the achievement of the sustainable development goals (SDGs) through initiatives
aimed at solving to these material issues.

Key area 1

Contribution to a sustainable environment (as of Apr. 30, 2021)
Environmental certifications

GRESB
Real Estate Assessment

Indicator Data
Acquisition of environmental
certifications and otherassessments (Note 1)

Certification for CASBEE
for Real Estate42
57.1 %

properties

不動産 2020
日本

管財(株

)

Acquired Green Star rating for 9
consecutive years.
4 Stars in GRESB Rating (the secondhighest level).

A total of 21 properties haveobtained certification, 10 properties
as S rank and 11 properties as
A rank.

Our active and continuous pursuit ofcreating green buildings has resulted
in a majority of the properties in our
portfolio obtaining environmental
certifications, in terms of thepercentage of floor space.

DBJ Green Building
Certification

2020
BELS不動産
Certification

Business operator
classification system

日本

管財(

株)

S
FY2018A total of 25 properties haveobtained the certification,
including KDX Toranomon
1chome Building which has earned
five stars, the top rating.

Two new properties obtained
certification during the 32nd fiscal
period (Apr. 2021).
This brought the total number ofcertified properties to four.

Class

FY2019FY2020

We obtained the S rank (excellent
operator) certification under thebusiness operator classification
system of the Ministry of Economy,
Trade and Industry for the third
consecutive year.

Percentage of buildings converted
to LED lighting in common areas(based on the number of buildings)

Approximately

95 %We are actively working to reduceenergy usage by converting lighting
fixtures to LED in common areas,
rental units, etc.

Percentage reduction compared to
the goal of a 1% average annual
reduction in energy usage per
production unit over five years (Note 2)

3.1 %We targeted an average reduction
in energy usage per production unitof 1% or more annually over the
past five years, and achieved our
reduction goal.

Note 1: The number of properties is counted without duplication in cases where a property has multiple certifications and assessments. Total floor area ratio is calculated without duplication by dividing certified floor area by total floor area of the portfolio.
Note 2: The average reduction per production unit over the five years from FY2016 to FY2020 was 3.1%.

Key area 2

Commitment to a diverse society

Installation of AEDs

Cooperating with communities in bicycle sharing

We are actively working to install automatic
external defibrillators (AEDs). They areavailable not only for the tenants but forresidents of neighboring communities aswell. This is displayed on the AED stickers
and the location of the AEDs is registered on
administrative maps, and elsewhere.
No. of properties
AED installation
status(as of Apr. 30, 2021)

10

Based on the numberof buildings

94 98.9 %We have offered sections of 7 property sites
to serve as bicycle parking for bicycle sharing.
Cooperation on this project will enhance
convenience for tenants and local residents.
The need to use this space will increase moreduring the COVID-19 pandemic.

Results of bicycle sharing use at KDX Nishi-Shinbashi Building (Note)

3,946 times/month on average
Note: Total average number of rentals and returns from Nov. 2020 to Apr. 2021.

Key area 3

Fulfilling our responsibilities to stakeholders

Regarding reduction in energy usage through installationof LED lighting, LED lighting in common areas has
been generally completed, while LED lighting in rental
areas has been systematically upgraded to 28.9% of theproperties owned (based on leasable area).
In 32nd fiscal period (Apr. 2021), 13 properties wereconverted to LED lighting in rental areas, reducing
annual power consumption by 67%.

Energy reduction through installation of LED lighting in rental areas
Before895,981After294,848-601,133 kWh/year■Electricity used (kWh/year)

Annual energy usage reduced by

67%

Equivalent to annual energy usage by roughly
148 households in Japan (Note)

Note: Calculated by the Asset Management Company based on “Annual Energy Consumption, Amount Paid, and CO2
Emissions per Household (Nationwide)” in the Annual Energy Consumption, Amount Paid, and CO2 Emissions
per Household (Nationwide) (Revised).

Key area 4

Attractive working environment“Recruiting, employee retention, and career advancement”
is one of our material issues. We have established various
development programs and benefits based on the policythat human resources are an important management
resource for expert investment management.
Employees of the Kenedix Group are encouraged toacquire various kinds of qualifications. A support
system was established to assist with the cost ofobtaining recommended qualifications and supportive
qualifications in order to develop skills, encourage careerbuilding, and improve organizational vitality.

Main qualifications held

(as of December 31, 2020)

Real estate notaries

164

Tax accountants

5

ARES (real estate securitization)
certified masters

78

Chartered members of the Securities
Analysts Association of Japan

15

Certified real estate consulting masters

23

Administrative scriveners

2

Certified building administrators (CBA)28

Judicial scrivener

1

Licensed senior architects

13

Administrative managers

12Real estate appraisers

9

Condominium property managers

9

Certified public accountants (Japan)

6

Loan operations managers

14

Certified public accountants (USCPA)

2

Attorneys2Note: Calculated based on Group employees directly employed by Kenedix, Inc.

Key area 5

Responsible organization

A rigorous process must be followed for transactions with related parties. These transactions are screened by a compliance officer basedon the Office REIT Department’s rules on transactions involving related parties. The Compliance Committee and the Office REIT
Department Asset Management Committee then deliberate and approve them by resolution. Once this is completed, the Investment
Corporation’s Board of Directors deliberates and approves them and the executive officers provide consent by resolution.
The Asset Management Company’s decision-making process is shown in the diagram at right, in principle. Requiring a highly
transparent decision-making process for investment management according to these rules has established a framework that functions
wells as a check on the Asset Management Company of the Investment Corporation.
Asset Management Company’s decision-making process

ProposalReview

Office REIT
Department

Compliance
Officer

Deliberation and
Resolution
Related-party
transactions,etc.

Compliance
Committee

Other transactions

Deliberation and
Resolution

Deliberation and
Resolution

ReportInvestment
Asset Management Related-party
transactions,
Corporation’s
Committee ofetc.
Board of Directors
Office REIT
Department
Other transactions

Board ofDirectors

Kenedix Office Investment Corporation

11

Initiatives Aimed at External Growth
Two offices buildings were sold during the 32nd fiscal period (Apr. 2021).
The decision was made based on collective consideration of building age,
profitability, unrealized gains/losses, and other relevant factors. We have grown
AUM to 96 properties valued at 440.1 billion yen while steadily engaging instrategic asset reshuffling.

Overview of asset reshuffling during the 31st fiscal period (Oct. 2020) and the 32nd fiscal period(Apr. 2021)• Assets were reshuffled to achieve a lower building age,
improve location, and improve the portfolio in other ways.

Mutual transaction with the developer
Acquired in the 31st
fiscal period (Oct. 2020)

Transferred in the 31st fiscal
period (Oct. 2020)• Recognition of gains on sales has increased distributions andboosted internal reserves for two consecutive fiscal periods.
• We are considering using part of the reserve for reduction entry toraise distributions for the 33rd fiscal period (Oct. 2021) onward.
Gains on salesof properties
acquired (Note 1)

Assetreshuffling

KDX Shinbashi Ekimae
Building

KDX Nihonbashi
Honcho Building

KDX Nihonbashi
Edo-dori Building

Transferred in the
32nd fiscal period(Apr. 2021)

Transferred in the
32nd fiscal period(Apr. 2021)

Distribution
per unit

31st fiscal period (Oct. 2020)

32nd fiscal period (Apr. 2021)

1.05 bn yen

0.92 bn yen

31st fiscal period (Oct. 2020)

32nd fiscal period (Apr. 2021)+792 yen+1,179 yen

31st fiscal period (Oct. 2020)

32nd fiscal period (Apr. 2021)+0.71 bn yen+0.42 bn yen

Location

Shinbashi, Minato-ku,
Tokyo

Provision of reserve
for reduction
entry (Note 2)

Acquisition price16.3 billion yen
Appraisal value(As of Apr. 30, 2021)

KDX
Shin-Nihonbashi
Building

20.8 billion yen

KDX
Hon-Atsugi
Building

Note 1: Gains on sales of properties are estimated based on the book value and selling expenses, etc. The
gain for 32nd fiscal period (Apr. 2021) was calculated by deducting the loss on sale of KDX HonAtsugi Building from the gain on sale of the KDX Shin-Nihonbashi Building.
Note 2: The amount is the provision of reserve for reduction entry stated in Basis for Calculating CashDistribution for the relevant fiscal periods.

Assets under management (AUM) (total asset value) and number of owned properties
Office buildings (left axis)

Residential (left axis)
Others (left axis)

Central urban retail property (left axis)(Billion yen)
600

Number of properties (right axis)

PO(Properties)

PO Fiscal period in which public offering occurred

98 96 100
90

500
PO

400

PO
PO

300

PO

PO

440.1 80
443.7
70
60
50

PO

200

PO

31
PO

100

69.1

40
30
20
10

0
0
1st fiscal 3rd fiscal 5th fiscal 7th fiscal 9th fiscal 11th fiscal 13th fiscal 15th fiscal 17th fiscal 19th fiscal 21st fiscal 23rd fiscal 25th fiscal 27th fiscal 29th fiscal 31st fiscal 32nd fiscal
periodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiod(Oct. 2005) (Oct. 2006) (Oct. 2007) (Oct. 2008) (Oct. 2009) (Oct. 2010) (Oct. 2011) (Oct. 2012) (Oct. 2013) (Oct. 2014) (Oct. 2015) (Oct. 2016) (Oct. 2017) (Oct. 2018) (Oct. 2019) (Oct. 2020) (Apr. 2021)

12

Initiatives Aimed at Internal Growth
Cancellations are remaining at a high level and the occupancy rate continues
to decline as gaining control over COVID-19 is delayed. However, there arecontinuing opportunities to increase rent through tenant turnover and tenacious
negotiations with existing tenants on rent revisions have been successful, so wehave steadily secured increases in rent.

Trend in office building occupancy rate and turnoverratio (annualized) (Note 1) (Note 2)

Increase in monthly rent from tenant
turnover (Note)(Million yen) ■ Total rent increases■ Total rent decreases

Occupancy rate (contracted area basis)

1st State of Emergency (Tokyo)(Apr. 7 - May 25)

(%)

99.5

100

2nd State of Emergency (Tokyo)(Jan. 8 - Mar. 21)

8.2
6.3

99.5
3.7

98.1
96.7
95

90

30th fiscal period
average occupancy rate

31st fiscal period
average occupancy rate

32nd fiscal period
average occupancy rate

99.4%

98.5%

97.0%

30th fiscal period

31st fiscal period

32nd fiscal period(Oct. 2020)(Apr. 2021)

7.0%

9.2%

(Apr. 2020)
Turnover ratio(annualized)

3.3%

-0.8
30th fiscal
period% of contracts (Apr. 2020)
resulting in arent increase
72.7%
upon tenant
turnover-0.1
31st fiscal
period-1.4
32nd fiscal
period

93.3%

76.3%

(Oct. 2020)(Apr. 2021)

Note 1: Occupancy rate (contracted area basis) is calculated by dividing contract-based leased area by leasable area. The figures arerounded to the first decimal place. Average occupancy rate of office buildings during each fiscal period is a simple average ofmonth-end occupancy rates of owned office buildings during each period.
Note 2: Turnover ratio is calculated and annualized as follows: (Total leased area of the end tenants who cancelled their leaseagreements during the six months period from the beginning to the end of each period) / (Average leasable area of all officebuildings owned by KDO as of each month end during the relevant period) x 2. Figures are rounded to the first decimal place.

Note: Total amount of increases/decreases in monthly rent before and after tenant turnover
for each fiscal period is respectively aggregated for the spaces where the rents paidby new tenants and by previous tenants can be compared.

Trend in (monthly) rent increases and decreases due torent revisions (Note 1) (Note 2)

Status of rent revisions (based onleased floor area) (Note)(Thousand yen) ■ Rent increase ■ Rent decrease

14,017
11,225

9,885

9,051

Exceptionfrom negotiation

7,045

5.7%

Rent
increase rate
(incremental
average)29th fiscal
period(Oct. 2019)-111
30th fiscal
period(Apr. 2020)

31st fiscal
period(Oct. 2020)-1,23332nd fiscal
period(Apr. 2021)

6.7%

7.7%

10.4%

9.4%

No change

Changes in occupancy for properties focused on leasing

（%）
100
90
80
70

32nd fiscal period(Apr. 2021)
results

33rd fiscal period(Oct. 2021)
forecast (application basis)100.0%
72.2%

Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct.

• A succession of cancellation notices were received
from tenants on 5 floors. Although the occupancy rateis expected to temporarily decline to the 50% level inthe future, full occupancy is anticipated by the end of
33rd fiscal period (Oct. 31, 2021).

0.8%
32nd
fiscal period(Apr. 2021)

Rent increase(36 contracts)

25.6%

267 contracts(lower than market rent)(170 contracts)

56.4%

Note 1: Difference in monthly rent before and after rent revision in each fiscal period is calculated by aggregating the change in amountper contract in each fiscal period (rounded to the nearest thousand yen). The changes in rent upon rent revisions do not include
the amount in response to requests for rent reduction or exemption, etc. due to temporary revenue decline resulting from the
COVID-19 pandemic (temporary rent decrease and temporary rent increase to recover such decrease).
Note 2: The rent increase rate is calculated by dividing the sum of increases in monthly rent by the sum of monthly rent before revisions(rounded to the first decimal place).

KDX Harumi
Building(3 contracts)(higher than market rent)(58 contracts)

17.2%

-402
28th fiscal
period(Apr. 2019)

Rent decrease

Negotiation target

Note: “Market rent” in this graph is the new contracted rent (standard floor) for each
property estimated by CBRE as of the end of each fiscal period.

We engage in proactive, flexible tenant solicitations to quickly fill vacancies inproperties where a low occupancy rate is anticipated due to cancellations.

KDX Hamamatsucho
Place

（%）
100

32nd fiscal period(Apr. 2021)
results

33rd fiscal period(Oct. 2021)
forecast (application basis)

96.6%

90
80
70

82.3%
Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct.

• We expected the number of cancellations to increase
and the occupancy rate at the end of 32nd fiscal period
to decline to less than 70% due to deterioration inbusiness results, but anticipate generally full occupancy
by the end of the 33rd fiscal period (Oct. 31, 2021).
Kenedix Office Investment Corporation

13

Financial Strategy
Status of interest-bearing debt financing
We continue to decrease interest costs when refinancing while paying attention to the trend in interest rates.

Average interest rate and average remaining period
to maturity of interest-bearing debt (Note)

Outstanding borrowings from financial institutions asof the end of the 32nd fiscal period (Apr. 30, 2021)
16 lending financial institutions

Average interest rate (including up-front fee) (%)
Average remaining period to maturity (years)

1.19

1.16

4.9

4.7

1.10

1.07

5.0

1.06

5.2

1.04

5.2

5.0

1.02

4.8

0.97

0.94

0.94

4.5

4.5

4.7

5.0%

Mizuho Trust & Banking
2.8%

The Bank of Fukuoka
The Nishi-Nippon City Bank
The Hiroshima Bank
The 77 Bank
Sumitomo Life Insurance Company
Higashi-Nippon Bank
The Norinchukin BankSan ju San Bank (formerly, The Mie Bank)

Aozora Bank
5.6%
Resona Bank
6.0%

Total
borrowings fromfinancial institutions

Mizuho Bank
9.5%

End of 23rd End of 24th End of 25th End of 26th End of 27th End of 28th End of 29th End of 30th End of 31st End of 32nd
fiscal period fiscal period fiscal period fiscal period fiscal period fiscal period fiscal period fiscal period fiscal period fiscal period

187.7

billion yen
Sumitomo Mitsui
Trust Bank
10.6%
Development Bank of Japan
15.7%(Oct. 31, 2016) (Apr. 30, 2017) (Oct. 31, 2017) (Apr. 30, 2018) (Oct. 31, 2018) (Apr. 30, 2019) (Oct. 31, 2019) (Apr. 30, 2020) (Oct. 31, 2020) (Apr. 30, 2021)
Note: The average interest rate and borrowing period are the weighted averages based on the balance of debt
outstanding as of the end of each fiscal period (with the average interest rate rounded to the second decimal
place and the average borrowing period rounded to the first decimal place).

Sumitomo Mitsui Banking
25.1%

MUFG Bank
19.6%

福岡銀行
住友生命保険
Major indices related to financial stability (the end of the
32nd fiscal
period (Apr. 30, 2021))
西日本シティ銀行 東日本銀行
広島銀行

農林中央金庫

七十七銀行
三十三銀行（旧三重銀行）
We will maintain a stable financial position by engaging in conservative management
practiceswhile
ensuring sufficient liquidity.

Interest-bearing debt ratio (LTV) (Note 1)

43.4

Fixed interest rate ratio (Note 2)

96.6

%

Maintain stable financial basewith a target of 45%

Credit rating status

AA-%

Continue to hedge against a potential risein interest rates(Positive)

Japan Credit Rating Agency, Ltd. (JCR)

Note 1: The Interest-bearing debt ratio (LTV) is the balance of interest-bearing debt at the end of the fiscal period divided by total assets at the end of the fiscal period.
Note 2: Includes borrowings fixed by interest rate swaps.

Diversification of interest-bearing debt maturities
投資法人債

We seek to reduce refinancing risk by strategically diversifying debt maturities.

Balance of interest-bearing debt by maturity (as of Apr. 30, 2021)(Billion yen)

12.8
1.0

15.7

■ Short-term debt:
6.8 billion yen■ Long-term debt:
180.9 billion yen■ Investment corporation bonds: 11.0 billion yen

Total interest-bearing debt: 198.7 billion yen
15.6

5.8

11.05

9.15
1.0

7.5

7.7

9.0

12.3

12.6

12.5

16.2
14.2

16.6

1.0

2.0

2.0

2.0

6.85

2.0

6.3

3.8

33rd fiscal
period(Oct. 2021)

1435th fiscal
period(Oct. 2022)

5.0
1.0

37th fiscal
period(Oct. 2023)

39th fiscal
period(Oct. 2024)

41st fiscal
period(Oct. 2025)

43rd fiscal
period(Oct. 2026)

45th fiscal
period(Oct. 2027)

47th fiscal
period(Oct. 2028)

50th fiscal
period(Apr. 2030)

3.9

52nd fiscal
period(Apr. 2031)

Financial Summary (Unaudited)
Historical Operating Trends
For the 28th-32nd Fiscal Periods

28th Period(Apr. 2019)29th Period(Oct. 2019)30th Period(Apr. 2020)

31st Period(Oct. 2020)

32nd Period(Apr. 2021)

millions of yen

15,212

15,027

15,272

16,71416,301(Rental revenues)

millions of yen

14,595

14,95915,215

15,583

15,119Operating expenses

millions of yen

8,039

8,199

8,132

8,380

8,310

(Property-related expenses)

millions of yen

6,880

7,092

7,008

7,086

6,880

Operating income

millions of yen

7,172

6,828

7,140

8,334

7,990

Ordinary income

millions of yen

6,179

5,845

6,177

7,311

7,017

Net income (a)millions of yen

6,178

5,844

6,175

7,310

7,016

Total assets (b)(Period-on-period change)

millions of yen%

436,753(–0.1)

439,773(+0.7)

447,707(+1.8)

459,719(+2.7)

457,505(–0.5)

Interest-bearing debt (c)(Period-on-period change)

millions of yen%

182,050(–0.5)

185,050(+1.6)

192,050(+3.8)

201,750(+5.1)

198,750(–1.5)

Unitholders’ equity (d)(Period-on-period change)

millions of yen%

229,440(+0.1)

229,276(–0.1)

229,589(+0.1)

230,665(+0.5)

230,981(+0.1)

Unitholders’ capital(Period-on-period change)

millions of yen%

220,970(0.0)

220,970(0.0)

220,970(0.0)

220,970(0.0)

220,970(0.0)

Number of investment units issued and outstanding (e) unit

428,510428,510428,510428,510428,510Unitholders’ equity per unit (d)/(e)yen535,437

535,054535,786

538,295

539,034

Total distribution (f)millions of yen

5,878

5,844

6,175

6,592

6,592

Distribution per unit (f)/(e)yen

13,71913,63914,412

15,384

15,384(Earnings distributed per unit)

yen

13,71913,63914,412

15,384

15,384(Distribution in excess of earnings per unit)

yen

─

─

─

─

─

Return on assets (annualized) (Notes 1 and 2)%

1.4 (2.9)

1.3 (2.6)

1.4 (2.8)

1.6 (3.2)

1.5 (3.1)

Return on net assets (annualized) (Notes 2 and 3)%

2.7 (5.4)

2.5 (5.1)

2.7 (5.4)

3.2 (6.3)

3.0 (6.1)

Net assets ratio at end of period (d)/(b)(Period-on-period change)%

52.5(+0.1)

52.1(–0.4)

51.3(–0.9)

50.2(–1.1)

50.5(+0.3)

Interest-bearing debt ratio at end of period (c)/(b)(Period-on-period change)%

41.7(–0.2)

42.1(+0.4)

42.9(+0.8)

43.9(+1.0)

43.4(–0.4)

Payout ratio (Note 4) (f)/(a)

%

95.1

99.9

99.9

90.1

93.9

96

97

99

98

96

PeriodUnit

Operating revenues

Other references
Number of properties

properties

Total leasable floor aream2

468,528.20

480,328.18

488,127.53

488,010.71

482,299.10

Occupancy rate at end of period

%

99.2

99.5

99.5

98.1

96.7

Depreciation expenses for the period

millions of yen

2,369

2,419

2,470

2,523

2,548

Capital expenditures for the period

millions of yen

1,231

1,426

1,485

1,251

1,420

Leasing NOI (Net Operating Income) (Note 5)

millions of yen

10,084

10,287

10,676

11,01910,787

FFO (Funds from Operation) (Note 6)

millions of yen

7,983

8,265

8,646

8,776

8,635

FFO per unit (Note 7)

yen

18,63019,287

20,17820,48020,153

Notes: 1. Return on assets = Ordinary income / {(Total assets at beginning of period + Total assets at end of period) / 2} × 100
2. Annualized values for the 28th Fiscal Period are calculated based on a period of 181 days, 184 days for the 29th Fiscal Period, 182 days for the 30th Fiscal Period,
184 days for the 31st Fiscal Period, and 181 days for the 32nd Fiscal Period.
3. Return on net assets = Net income / {(Total net assets at beginning of period + Total net assets at end of period) / 2} × 100
4. Payout ratio is rounded down to the first decimal place.
5. Leasing NOI = Rental revenues – Property-related expenses + Depreciation expenses for the period
6. FFO = Net income + Depreciation expenses for the period – Gain on sale of real estate properties + Loss on sale of real estate properties
7. FFO per unit = FFO / Number of investment units issued and outstanding (figures below ¥1 rounded down)

Kenedix Office Investment Corporation

15

Kenedix Office Investment Corporation

Balance Sheet
As of April 30, 2021
As of April 30, 2021
AssetsCurrent assets
Cash and deposits (Notes 4 and 16)
Cash and deposits in trust (Notes 4 and 16)
Operating accounts receivable
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment (Notes 5 and 18)
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust (Note 8)
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets (Note 5)
Leasehold right (Note 18)
Leasehold right in trust (Note 18)
Other
Total intangible assets
Investments and other assets
Investment securities (Note 16)
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Other (Notes 11,16 and 17)
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

16
KENEDIX Office Investment Corporation

As of October 31, 2020

In thousands of yen¥

18,455,256 ¥
11,859,877
255,807
70,834
10,87930,652,654

16,128,897
12,042,095
336,234
109,949
13,76628,630,942

18,026,779(6,832,965)
11,193,814
43,564(19,020)
24,543442,289(297,207)
145,082
100,902(72,220)
28,681
27,520,902
127,845,813(36,476,702)
91,369,111
386,893(199,805)
187,087
1,930,865(855,126)
1,075,738
649,345(378,890)
270,454291,876,758
12,750423,704,925

17,975,653(6,526,749)
11,448,903
43,564(17,805)
25,759435,359(284,721)
150,638
99,918(68,421)31,49627,520,902
128,754,352(35,161,391)
93,592,960
379,369(191,656)
187,712
1,876,485(850,091)
1,026,394
561,026(365,732)
195,294
293,726,525
6,150
427,912,737

285,257
347,652
137
633,047

285,257
348,426540
634,225

1,134,996
10,000122,889
1,182,675
12,662
2,463,223
426,801,196

1,137,526
10,000122,889
1,183,120
21,6762,475,213
431,022,176

51,41957,394
9,171
66,565459,719,684–¥

51,419457,505,270¥

As of April 30, 2021
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Notes 7 and 16)
Current portion of long-term loans payable (Notes 7,16 and 17)
Accounts payable–otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Investment corporation bonds (Notes 7 and 16)
Long-term loans payable (Notes 7, 16 and 17)
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Other (Notes 16 and 17)
Total non-current liabilities
Total liabilities
Net Assets
Unitholders' equity
Unitholders' capital
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Notes 16 and 17)
Total valuation and translation adjustments
Total net assets (Note 12)
Total liabilities and net assets

As of October 31, 2020

In thousands of yen¥¥

1,658,337
6,800,000
21,700,000
594,832
76,731
813
476,580
2,851,496
12,26034,171,052¥

1,496,596
12,500,000
23,000,000
679,554
79,227756
304,8212,678,412
3,799
40,743,168

11,000,000
159,250,000
2,065,341
19,525,890
511,308
192,352,540
226,523,593

11,000,000
155,250,000
2,007,851
19,640,709
412,880
188,311,441
229,054,609

220,970,508

220,970,508

3,493,596
3,493,596
7,016,251
10,509,848
231,480,356

2,775,335
2,775,335
7,310,459
10,085,794
231,056,303(498,680)(498,680)
230,981,676
457,505,270(391,228)(391,228)
230,665,074
459,719,684¥

See accompanying notes to the financial statements.

Kenedix Office Investment Corporation17

Kenedix Office Investment Corporation

Statement of Income and Retained Earnings
For the period from November 1, 2020 to April 30, 2021
From November 1, 2020

From May 1, 2020

to April 30, 2021

to October 31, 2020

In thousands of yen
Operating revenues
Rent revenue – real estate (Note 14)¥

13,508,875¥

13,757,065

Other lease business revenue (Note 14)

1,610,737

1,826,092

Gain on sale of real estate properties (Note 14)

1,128,423

1,057,790

53,08973,522

16,301,126

16,714,470

Expenses related to rent business (Note 14)

6,880,711

7,086,783

Loss on sale of real estate properties (Note 14)

198,923–

Asset management fees

1,044,945

1,110,211

Directors' compensation

8,400

8,400

Asset custody fees

23,742

23,431

Administrative service fees

59,231

58,207

Audit fees

12,80012,800

Other operating expenses

81,52780,234

Total operating expenses

8,310,282

8,380,067

Operating income

7,990,843

8,334,402

Dividends income
Total operating revenues
Operating expenses

Non-operating income
Interest income

49

69

Gain on forfeiture of unclaimed dividends

398

309

4

3

453

382

Interest expenses

776,153805,749

Interest expenses on investment corporation bonds

33,24930,712Financing-related expenses

125,161

128,471

Interest on refund
Total non-operating income
Non-operating expenses

Amortization of investment corporation bond issuance costs

5,975

5,551

Amortization of investment unit issuance costs

9,171

9,171

24,04443,783

973,755

1,023,438

Ordinary income

7,017,541

7,311,346

Income before income taxes

7,017,541

7,311,346

Current

1,299

1,115

Deferred(9)

11

Other non-operating expenses
Total non-operating expenses

Income taxes (Note 11)

Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings
See accompanying notes to the financial statements.

18
KENEDIX Office Investment Corporation

1,290

1,126

7,016,251

7,310,219
240

–

¥

7,016,251¥

7,310,459

Kenedix Office Investment Corporation

Statement of Changes in Net Assets
For the period from November 1, 2020 to April 30, 2021
Valuationandtranslation
adjustments

Unitholders' equity (Note 6)

Surplus
Voluntary
retainedearnings

Deferred
UnappropriatedTotal

gains orUnitholders'

Reserve forretained earnings

Total

unitholders'losses on

Total net

capitalreduction entry(Note 21)

surplusequityhedgesassetsIn thousands of yen
Balance as ofApril 30, 2020¥

220,970,508¥

2,775,335¥

6,175,926¥

8,951,261¥

229,921,769¥(332,017)¥

229,589,752

Changes during the fiscal period
Dividends of surplus––（6,175,686）（6,175,686）（6,175,686）–（6,175,686）

Net income––

7,310,219

7,310,219

7,310,219–

7,310,219

–

–

–

–

–

(59,211)(59,211)––

1,134,533

1,134,533

1,134,533(59,211)

1,075,322

Net changes of items otherthan unitholders’ equity
Total changes during
the fiscal period
Balance as of
October 31, 2020¥

220,970,508¥

2,775,335¥

7,310,459¥

10,085,794¥

231,056,303¥(391,228)¥

230,665,074

Changes during the fiscal period
Provision of reserve for–718,261(718,261)

–

–

–

–

Dividends of surplus––（6,592,197）（6,592,197）（6,592,197）–（6,592,197）

Net income––

7,016,251

7,016,251

7,016,251–

7,016,251

–

–

–

–

–

(107,451)(107,451)–

718,261(294,208)

424,053424,053(107,451)

316,601

reduction entry

Net changes of items otherthan unitholders’ equity
Total changes during
the fiscal period
Balance as ofApril 30, 2021¥

220,970,508¥

3,493,596¥

7,016,251¥

10,509,848¥

231,480,356¥(498,680)¥

230,981,676

See accompanying notes to the financial statements.

Kenedix Office Investment Corporation

19

Kenedix Office Investment Corporation
Statement of Cash Flows
For the period from November 1, 2020 to April 30, 2021

From November 1, 2020
to April 30, 2021

From May 1, 2020
to October 31, 2020

In thousands of yen

Cash flows from operating activities
Income before income taxes¥

Depreciation
Amortization of long-term prepaid expenses

7,017,541¥

7,311,346

2,549,244

2,523,749

116,505

118,931

Interest income

(49)

(69)

Interest expenses

809,403

836,461

Amortization of investment unit issuance costs

9,171

9,171

Amortization of investment corporation bond issuance costs

5,975

5,551

Decrease (increase) in operating accounts receivable

80,426(58,776)

Decrease (increase) in prepaid expenses

39,114(35,348)

Increase (decrease) in operating accounts payable(290,597)

287,784

Increase (decrease) in accounts payable–other(80,554)

189,242

Increase (decrease) in accrued consumption taxes

171,759(73,292)

Increase (decrease) in advances received

173,084(143,064)

Increase (decrease) in deposits received

8,460(3,426)

Decrease in property, plant and equipment in trust due to sale

3,086,836

5,287,017

Decrease (increase) in long-term prepaid expenses(116,060)(151,900)

Other, net(15,521)(14,249)

13,564,741

16,089,127

SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of property, plant and equipment in trust
Purchase of intangible assets

49

69(811,899)(829,217)

(764)

(835)

12,752,128

15,259,143(45,815)(28,038)(1,168,428)(17,408,155)

(27)

–

Repayments of tenant leasehold and security deposits(28,160)(111,848)

Proceeds from tenant leasehold and security deposits

181,075

99,089

Repayments of tenant leasehold and security deposits in trust(954,679)(623,681)

Proceeds from tenant leasehold and security deposits in trust

1,004,016

1,296,269

Payments of restricted deposits in trust(20,285)–

Proceeds from restricted deposits in trust

9,631

89,059(1,022,674)(16,687,305)

Cash flows from financing activities
Proceeds from short-term loans payable

5,800,000

4,000,000

Repayments of short-term loans payable(11,500,000)(1,000,000)

Proceeds from long-term loans payable

13,900,000

16,800,000

Repayments of long-term loans payable(11,200,000)(11,100,000)

Proceeds from issuance of investment corporation bonds–

992,122

Payments of investment corporation bond issuance costs(3,228)–Dividends paid

(6,592,738)(6,174,673)

Net cash provided by (used in) financing activities(9,595,966)

3,517,449

Net increase (decrease) in cash and cash equivalents

2,133,486

2,089,287

Net cash provided by (used in) investing activities

Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period (Note 4)
See accompanying notes to the financial statements.

20
KENEDIX Office Investment Corporation

26,433,973¥

28,567,460

24,344,686¥

26,433,973

Kenedix Office Investment Corporation

Notes to the Financial Statements
For the period from November 1, 2020 to April 30, 2021

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Office Investment Corporation (“the Investment Corporation”) is a real estate investment corporation whose units are listedon the Tokyo Stock Exchange. The Investment Corporation is engaged in the ownership and operation of selected mainly officebuildings in Japan, with a focus on mid-sized office buildings in the Tokyo metropolitan area. The Investment Corporation wasincorporated on May 6, 2005 as an investment corporation under the Law Concerning Investment Trusts and Investment Corporationsof Japan, or “the Investment Trust Law.” On July 21, 2005, the Investment Corporation was listed on the Real Estate Investment Trust
Market of the Tokyo Stock Exchange with a total of 75,400 investment units issued and outstanding (Securities Code: 8972).
Subsequently, the Investment Corporation raised funds through eight public offerings. Pursuant to the Investment Trust Law, theInvestment Corporation is externally managed by a registered asset management company, Kenedix Real Estate Fund Management,
Inc. (“the Asset Management Company”), a subsidiary of Kenedix, Inc. (“Kenedix”). In concert with the Asset Management Company,
the Investment Corporation strives to maximize cash distribution to investors by securing stable earnings and sustainable investment
growth. To this end, the Investment Corporation adopts a dynamic and flexible investment stance that accurately reflects its
environment and market trends, and endeavors to ensure a timely response to each and every opportunity.
During the period ended October 31, 2020, the Investment Corporation acquired one office building (KDX Shinbashi Ekimae
Building(*): acquisition price of ¥16,300 million) and sold two office buildings (KDX Nihonbashi Honcho Building: initial acquisition
price of ¥4,000 million, and KDX Nihonbashi Edo-dori Building: initial acquisition price of ¥1,350 million) with a disposition priceof ¥6,550 million.
During the period ended April 30, 2021, the Investment Corporation sold two office buildings (KDX Shin-Nihonbashi Building:initial acquisition price of 2,300 million yen, and KDX Hon-Atsugi Building: initial acquisition price of 1,305 million yen) with adisposition price of ¥4,135 million.
At the end of the thirty-first and thirty-second fiscal periods (fiscal periods ended October 31, 2020 and April 30, 2021), theInvestment Corporation had total unitholders’ capital of ¥220,970 million with 428,510 investment units outstanding, respectively.
The Investment Corporation owned a portfolio of 98 properties (consisting of 97 office buildings and one other property) and 96
properties (consisting of 95 office buildings and one other property) with total acquisition prices of ¥443,785 million and ¥440,180
million at the end of the thirty-first and thirty-second fiscal periods, respectively. The occupancy ratios were approximately 98.1% and96.7% at the end of the thirty-first and thirty-second fiscal periods, respectively.
(*) The property name was changed from “Shinbashi M-SQUARE Bright” to “KDX Shinbashi Ekimae Building” on February 1, 2021.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust Act ofJapan, the Financial Instruments and Exchange Law of Japan and related regulations, and in conformity with accounting principles
and practices generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the application anddisclosure requirements of the International Financial Reporting Standards or accounting principles generally accepted in the UnitedStates of America.
The accompanying financial statements are basically a translation of the audited financial statements that were prepared for Japanese
domestic purposes from the accounts and records maintained by the Investment Corporation and filed with the Kanto Local Finance
Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law. In preparing the accompanying
financial statements, relevant notes have been added and certain reclassifications have been made to the financial statements issued
domestically in order to present them in a form that is more familiar to readers outside Japan. The Investment Corporation’s fiscal
period is a six-month period that ends at the end of April and the end of October each year. The Investment Corporation does notprepare consolidated financial statements because it has no subsidiaries.

Kenedix Office Investment Corporation21

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) Securities
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving
average method. Concerning silent partnership (tokumei kumiai, “TK”) interests, the method of incorporating the amount ofequity equivalent to the portion that corresponds to the net gain or loss of the TK is adopted.
(B) Property, Plant and Equipment (including trust assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is calculated on a straight-line
basis over the estimated useful lives of the assets ranging as stated below:
From November 1, 2020
to April 30, 2021
Buildings
2–49 years

From May 1, 2020
to October 31, 2020
2–49 years

Structures

2–45 years

2–45 years

Machinery and equipment

3–17 years

3–17 years

Tools, furniture and fixtures

3–20 years

3–20 years(C) Intangible Assets (including trust assets)
Intangible assets are amortized by the straight-line method.
Leasehold right: Fixed-term land leasehold is amortized over a contractual period of 48 years and 9 months under the straightline method.
(D) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(E) Investment Unit Issuance Costs
Investment unit issuance costs are amortized over a period of three years under the straight-line method.
(F) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(G) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, allassets and liabilities in trust are recorded in the relevant balance sheets and statements of income and retained earnings.
(H) Revenue Recognition
Operating revenues consist of rental revenues including base rents, common area charges and other operating revenues, which
include utility charge reimbursement, parking space rental revenues and other miscellaneous revenues. Rental revenues are
generally recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned
and their amounts can be reasonably estimated. Reimbursements from tenants including utility charge reimbursements arerecorded on a gross basis and such amounts are recorded both as revenues and expenses during the fiscal period.

22
KENEDIX Office Investment Corporation

(I)Taxes on Property, Plant and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on acalendar year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes
corresponding to the said period. Under Japanese tax rules, the seller of property at the time of disposal is liable for these taxes on
the property from the date of disposal to the end of the calendar year in which the property is disposed. The seller, however, isgenerally reimbursed by the purchaser for these accrued property-related tax liabilities.
When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related tothe period following the purchase date of each property through the end of the calendar year. The amounts of those allocatedportions of the property-related taxes are capitalized as part of the acquisition costs of the related properties. Capitalized propertyrelated taxes amounted to ¥38,663 thousand as of October 31, 2020. There were no capitalized property-related taxes as of April
30, 2021. In subsequent calendar years, such property-related taxes are charged as operating expenses in the fiscal period to which
the installments of such taxes correspond.

(J) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases ofassets and liabilities using the statutory tax rates.
(K) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption
taxes applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(L) Derivative Financial Instruments
The Investment Corporation utilizes interest-rate swap contracts as derivative financial instruments only for the purpose ofhedging its exposure to changes in interest rates. The Investment Corporation deferred recognition of gains or losses resulting
from changes in fair value of interest-rate swap contracts because these contracts met the criteria for deferral hedging accounting.
However, the Investment Corporation adopted special treatment for interest-rate swap contracts if they met the criteria for hedging
accounting under this treatment. The hedge effectiveness for the interest-rate swap contracts is assessed each fiscal period except
for those that meet the criteria of special treatment.
(M) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid,readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less fromthe date of purchase.
(N) Presentation of Amounts
Amounts of less than one thousand yen have been truncated in the Japanese financial statements prepared in accordance withJapanese GAAP and filed with regulatory authorities in Japan. Unless otherwise noted, amounts are rounded down and ratios arerounded off in the accompanying financial statements.
Totals shown in the accompanying financial statements do not necessarily agree with the sums of the individual amounts.

Kenedix Office Investment Corporation23

3. ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE
New accounting standards and implementation guidance issued but not yet effective are as follows:・ “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29 issued on
March 31, 2020)
・ “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on March 26,
2021)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in the United States
have jointly developed comprehensive accounting standards for revenue recognition and issued “Revenue from Contracts with
Customers” (IFRS 15 (IASB) and Topic 606 (FASB)) in May 2014. Given the situation where IFRS 15 is applied from fiscal
years beginning on or after January 1, 2018 and that Topic 606 is applied from fiscal years beginning after December 15, 2017,
the ASBJ has developed comprehensive accounting standards for revenue recognition and issued them together with theimplementation guidance.
The basic policy of the ASBJ when it developed the accounting standards for revenue recognition was to specify the accounting
standards, incorporating the basic principles of IFRS 15 as a starting point, from the perspective of comparability between
financial statements, which is one of the benefits of maintaining compatibility with IFRS 15. The basic policy also stipulates that
if there is an item to which consideration should be given, such as practices that have been conducted thus far in Japan, alternative
treatments will be added to the extent to which comparability is not impaired.
(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending October 31, 2021.
(3) Impact of applying the accounting standards
The impact of applying “Accounting Standard for Revenue Recognition” and its guidance on the financial statements is currently
under evaluation.

・ “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019)
・ “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on July 4,
2019)・ “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March
31, 2020)(1) Overview
The IASB and the FASB have established detailed guidance regarding fair value measurement (IFRS 13 “Fair Value Measurement”(IASB) and Topic 820 “Fair Value Measurement” (FASB)). The ASBJ repeatedly considered the guidance regarding fair valueof financial instruments and disclosure in order to improve the comparability with such international accounting standards, andissued “Accounting Standard for Fair Value Measurement” and “Implementation Guidance on Accounting Standard for Fair
Value Measurement.”(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending October 31, 2021.
(3) Impact of applying the accounting standards
The impact of applying the “Accounting Standard for Fair Value Measurement” and its guidance on the financial statements iscurrently under evaluation.

KENEDIX Office Investment Corporation

24

4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of April 30, 2021 and October 31, 2020.
As of April 30, 2021

As of October 31, 2020

In thousands of yen
Cash and deposits¥

18,455,256

Cash and deposits in trust¥

11,859,877

Restricted deposits in trust (Note)(1,747,673)

Cash and cash equivalents in trust¥

16,128,897
12,042,095(1,737,018)

28,567,460¥

26,433,973

Note: Restricted deposits in trust are retained for the repayment of tenant leasehold and security deposits in trust.

5. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, plant and equipment and intangible assets consist of the following as of April 30, 2021.
Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodDepreciation
Accumulated
depreciation

Depreciation
for the periodNetbalance atthe end of
periodRemarks(in thousands of yen)
Buildings¥ 17,975,653¥ 51,126

43,564¥–¥ 18,026,779¥ 6,832,965¥ 306,215¥ 11,193,814––

43,56419,0201,215

24,543435,359

6,930–

442,289

297,207

12,485145,082

99,918984–

100,90272,2203,799

28,681

Structures
Machinery andequipment
Tools, furnitureand fixtures
Land

27,520,902––

27,520,902––

27,520,902

Subtotal

46,075,399

59,040–46,134,439

7,221,414

323,715

38,913,025¥ 128,754,352¥ 1,127,268¥ 2,035,806¥ 127,845,813¥ 36,476,702¥ 2,129,795¥ 91,369,111

379,369

12,1204,596

386,893

199,805

12,255

187,087

1,876,485

122,127

67,7471,930,865

855,126

58,995

1,075,738

561,026

99,907

11,588649,345

378,890

23,276

270,454

Land in trust
Construction inprogress in trust

293,726,525–

1,849,767

291,876,758––

291,876,758

6,150

6,600

–

12,750––12,750Subtotal

425,303,909

1,368,023

3,969,506

422,702,425

37,910,525

2,224,323

384,791,900

Total property, plant andequipment

471,379,308

1,427,063

3,969,506

468,836,865

45,131,939

2,548,039

423,704,925–¥ 290,050¥ 4,792–¥ 285,257

Property,plant andequipment

Intangible
assetsBuildings in
trust
Structures intrust
Machinery andequipment in
trust
Tools, furnitureand fixtures intrust

Leasehold right¥ 290,050

Leasehold rightin trust

363,784––

363,784

16,132774

347,652

6,278

27

–

6,306

6,169

431

137

660,11327–

660,141

27,094

1,205

633,047¥ 472,039,421¥ 1,427,091¥ 3,969,506¥ 469,497,006¥ 45,159,033¥ 2,549,244¥ 424,337,972

OtherTotal intangible assets
Total

¥

–

¥

¥

Note

Note

Note: The amount of decrease during the period is primarily attributable to the sales of the two real estate properties.

Kenedix Office Investment Corporation25

Property, plant and equipment and intangible assets consist of the following as of October 31, 2020.
Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodDepreciation
Accumulated
depreciation

Depreciation
for the periodNetbalance atthe end of
periodRemarks(in thousands of yen)
Buildings¥ 17,951,815¥ 23,838

43,564¥–¥ 17,975,653¥ 6,526,749¥ 305,591¥ 11,448,903––

43,56417,805

1,215

25,759432,2093,150–

435,359284,721

12,359150,638

96,841

3,077–

99,91868,421

3,730

31,496Structures
Machinery andequipment
Tools, furnitureand fixtures
Land

27,520,902––

27,520,902––

27,520,902

Subtotal

46,045,333

30,065–46,075,399

6,897,698

322,896

39,177,700¥ 126,874,865¥ 2,682,955¥ 803,468¥ 128,754,352¥ 35,161,391¥ 2,109,983¥ 93,592,960

362,902

16,466–379,369

191,656

11,770187,712

1,741,678

140,227

5,421

1,876,485

850,091

56,086

1,026,394

528,530

37,0064,510

561,026

365,732

21,610195,294

283,648,781

14,774,582

4,696,837

293,726,525––

293,726,525

–

6,150

–

6,150

–

–

6,150

Subtotal

413,156,757

17,657,388

5,510,237

425,303,909

36,568,871

2,199,450

388,735,037

Total property, plant andequipment

459,202,091

17,687,453

5,510,237

471,379,308

43,466,570

2,522,346

427,912,737–¥ 290,050¥ 4,792–¥ 285,257

363,784

15,357774

348,426

Property,plant andequipment

Buildings in
trust
Structures intrust
Machinery andequipment in
trust
Tools, furnitureand fixtures intrust
Land in trust
Construction inprogress in trust

Intangible
assetsLeasehold right¥ 290,050

Leasehold rightin trust

363,784

–

–

Other
Total intangible assets
Total

¥

–

¥

¥

6,278

–

–

6,278

5,738

627

540

660,113––660,11325,8881,402

634,225¥ 459,862,205¥ 17,687,453¥ 5,510,237¥ 472,039,421¥ 43,492,458¥ 2,523,749¥ 428,546,962

Notes 1
and 2

Notes 1
and 2

Note1: The amount of increase during the period is primarily attributable to the acquisition of the one real estate property.
Note2: The amount of decrease during the period is primarily attributable to the sales of the two real estate properties.

6. UNITHOLDERS’ EQUITY
Total number of authorized investment units and total number of investment units issued and outstanding are as follows:

Total number of authorized investment units
Total number of investment units issued and outstanding

26
KENEDIX Office Investment Corporation

From November 1, 2020
to April 30, 2021
2,000,000

From May 1, 2020
to October 31, 2020
2,000,000

428,510428,510

7. SHORT-TERM LOANS PAYABLE, LONG-TERM LOANS PAYABLE AND INVESTMENTCORPORATION BONDS
The following summarizes short-term loans payable, long-term loans payable and investment corporation bonds outstanding as ofApril 30, 2021:
Classification
Short-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)August 31, 2020

August 31, 2021

0.323%¥

November 30, 2020

November 30, 2021

0.376%

November 30, 2020

November 30, 2021

0.326%

500,000

January 29, 2021

January 29, 2022

0.378%

1,300,000

1,000,000

January 29, 2021

January 29, 2022

0.328%

500,000

February 26, 2021

February 26, 2022

0.378%

2,000,000

March 31, 2021

March 31, 2022

0.327%

500,000

Subtotal
Current portion of long-term loans payable

6,800,000
July 10, 2014

July 10, 2021

0.903%

July 10, 2014

July 10, 2021

0.903%¥

500,000

September 1, 2014

August 31, 2021

0.885%

800,000

September 1, 2014

August 31, 2021

0.885%

500,000

March 20, 2014

September 20, 2021

1.013%

4,000,000

September 30, 2014

September 30, 2021

0.893%

1,000,000

October 31, 2014

October 31, 2021

0.802%

3,000,000

January 29, 2016

January 31, 2022

0.590%

2,500,000

January 29, 2016

January 31, 2022

0.640%

500,000

February 18, 2015

February 28, 2022

0.907%

1,250,000

February 18, 2015

February 28, 2022

0.907%

350,000

March 20, 2014

March 20, 2022

1.199%

3,000,000

April 30, 2015

April 30, 2022

0.825%

2,000,000

2,300,000

SubtotalLong-term loans payable

1,000,000

21,700,000
March 12, 2014

March 12, 2023

1.358%March 20, 2014

March 12, 2023

1.349%¥

1,800,000
2,000,000

July 31, 2014

July 31, 2022

1.014%

2,200,000

September 3, 2014

August 31, 2022

0.979%

1,000,000

September 3, 2014

August 31, 2022

0.979%

950,000

October 31, 2014

October 31, 2023

1.071%

2,000,000

October 31, 2014

October 31, 2023

1.126%

1,500,000

October 31, 2014

October 31, 2023

1.071%

1,000,000

October 31, 2014

October 31, 2024

1.257%

2,000,000

October 31, 2014

October 31, 2024

1.259%

1,000,000

January 30, 2015

January 31, 2025

1.161%

1,500,000

February 18, 2015

February 29, 2024

1.157%

1,700,000

February 18, 2015

February 28, 2025

1.314%

1,250,000

February 27, 2015

February 28, 2025

1.153%

2,100,000

March 12, 2015

February 28, 2025

1.218%

1,000,000

March 31, 2015

March 31, 2025

1.266%

2,500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

September 30, 2015

September 30, 2024

1.065%

2,000,000

October 30, 2015

October 31, 2024

0.989%

1,000,000

Kenedix Office Investment Corporation27

Classification
Long-term loans payable

28
KENEDIX Office Investment Corporation

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

October 30, 2015

October 30, 2025

1.114%

October 30, 2015

October 30, 2025

1.114%¥

1,500,000

October 30, 2015

October 30, 2025

1.114%

2,500,000

October 30, 2015

October 30, 2025

1.121%

2,500,000

November 12, 2015

November 30, 2025

1.173%

1,000,000

January 29, 2016

January 29, 2026

1.074%

2,000,000

January 29, 2016

January 29, 2026

1.024%

1,800,000

February 18, 2016

February 18, 2026

0.998%

1,000,000

February 18, 2016

February 18, 2026

0.998%

500,000

March 31, 2016

March 31, 2026

0.898%

1,000,000

April 28, 2016

April 30, 2024

0.654%

2,000,000

April 28, 2016

April 30, 2026

0.835%

2,000,000

April 28, 2016

April 30, 2026

0.865%

1,000,000

2,000,000

July 29, 2016

July 31, 2026

0.613%

1,500,000

August 2, 2016

July 31, 2026

0.544%

1,000,000

October 31, 2016

October 31, 2024

0.668%

1,000,000

October 31, 2016

October 31, 2026

0.876%

2,500,000

October 31, 2016

October 31, 2026

0.760%

1,000,000

October 31, 2016

October 31, 2026

0.734%

4,000,000

October 31, 2016

October 31, 2026

0.826%

1,500,000

December 12, 2016

November 30, 2026

0.982%

500,000

December 28, 2016

December 28, 2026

0.950%

1,500,000

January 16, 2017

January 31, 2027

0.860%

500,000

January 31, 2017

January 31, 2027

0.853%

700,000

March 28, 2017

March 31, 2027

0.850%

500,000

June 30, 2017

June 30, 2027

0.849%

1,500,000

August 10, 2017

July 28, 2027

0.800%

3,500,000

August 31, 2017

August 31, 2023

0.544%

1,000,000

September 21, 2017

March 31, 2024

0.555%

1,000,000

September 21, 2017

September 30, 2025

0.680%

1,500,000

September 21, 2017

March 31, 2027

0.732%

1,000,000

September 21, 2017

September 21, 2027

0.873%

1,000,000

September 21, 2017

September 30, 2027

0.851%

2,500,000

October 31, 2017

October 31, 2027

0.810%

2,500,000

November 13, 2017

November 13, 2027

0.931%

3,000,000

December 7, 2017

November 30, 2027

0.899%

1,400,000

December 7, 2017

November 30, 2027

0.820%

1,200,000

December 7, 2017

November 30, 2027

0.969%

1,000,000

December 7, 2017

November 30, 2027

0.939%

1,000,000

December 7, 2017

November 30, 2027

0.869%

1,000,000

December 7, 2017

November 30, 2027

0.899%

800,000

December 7, 2017

November 30, 2027

0.869%

600,000

December 28, 2017

December 28, 2025

0.744%

500,000

December 28, 2017

December 28, 2026

0.878%

500,000

December 28, 2017

December 28, 2027

0.864%

500,000

March 12, 2018

March 31, 2028

0.914%

1,500,000

March 26, 2018

March 31, 2027

0.808%

1,000,000

March 26, 2018

March 31, 2028

0.902%

1,000,000

July 31, 2018

July 31, 2028

0.988%

500,000

August 20, 2018

August 31, 2025

0.696%

500,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

500,000

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)August 20, 2018

August 31, 2028

0.966%¥

500,000

August 31, 2018

August 31, 2025

0.700%

500,000

August 31, 2018

August 31, 2025

0.723%

300,000

August 31, 2018

August 31, 2028

1.012%

700,000

October 31, 2018

October 31, 2028

1.013%

1,500,000

October 31, 2018

October 31, 2028

0.910%

1,000,000

October 31, 2018

October 31, 2028

1.013%

500,000

March 28, 2019

March 31, 2029

0.838%

1,400,000

March 29, 2019

March 31, 2029

0.839%

2,950,000

June 14, 2019

June 30, 2023

0.246%

500,000

June 14, 2019

December 28, 2026

0.517%

500,000

June 14, 2019

April 30, 2027

0.605%

1,000,000

June 14, 2019

March 31, 2029

0.725%

1,000,000

July 10, 2019

July 31, 2023

0.230%

500,000

July 31, 2019

July 31, 2022

0.291%

1,000,000

July 31, 2019

July 31, 2023

0.295%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

September 30, 2019

September 30, 2026

0.489%

1,000,000

September 30, 2019

March 31, 2027

0.531%

900,000

September 30, 2019

March 31, 2027

0.425%

800,000

January 31, 2020

January 31, 2025

0.406%

700,000

January 31, 2020

January 31, 2027

0.526%

1,500,000

January 31, 2020

January 31, 2029

0.675%

1,500,000

March 12, 2020

February 28, 2026

0.361%

1,800,000

March 31, 2020

March 31, 2028

0.642%

1,000,000

June 30, 2020

June 30, 2028

0.646%

2,000,000

June 30, 2020

June 30, 2028

0.646%

2,000,000

June 30, 2020

June 30, 2028

0.646%

700,000

June 30, 2020

June 30, 2028

0.510%

2,000,000

July 31, 2020

July 31, 2028

0.636%

2,700,000

August 31, 2020

August 31, 2030

0.705%

1,500,000

September 30, 2020

September 30, 2025

0.396%

1,000,000

September 30, 2020

September 30, 2027

0.511%

1,000,000

September 30, 2020

September 30, 2030

0.738%

700,000

October 30, 2020

April 30, 2027

0.542%

1,400,000

October 30, 2020

October 31, 2030

0.803%

1,500,000

October 30, 2020

October 31, 2030

0.803%

300,000

November 12, 2020

April 30, 2027

0.552%

1,300,000

November 12, 2020

November 12, 2030

0.808%

700,000

November 12, 2020

November 12, 2030

0.808%

500,000

November 30, 2020

May 31, 2027

0.516%

200,000

November 30, 2020

November 30, 2030

0.763%

900,000

November 30, 2020

November 30, 2030

0.763%

800,000

November 30, 2020

November 30, 2030

0.763%

200,000

January 29, 2021

January 31, 2024

0.287%

1,000,000

January 29, 2021

January 31, 2028

0.527%

1,200,000

January 29, 2021

January 31, 2030

0.678%

2,300,000

January 29, 2021

January 31, 2030

0.678%

2,000,000

January 29, 2021

January 31, 2030

0.678%

2,000,000

January 29, 2021

November 30, 2030

0.755%

800,000

Kenedix Office Investment Corporation

29

Classification

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

Subtotal

159,250,000

Investment corporation bonds

July 25, 2014

July 25, 2024

1.180%

April 28, 2016

April 28, 2028

0.900%¥

1,000,000

2,000,000

July 19, 2017

July 19, 2022

0.260%

1,000,000

July 19, 2017

July 16, 2027

0.640%

2,000,000

February 15, 2019

February 15, 2024

0.390%

2,000,000

January 30, 2020

January 30, 2025

0.250%

2,000,000

October 20, 2020

October 18, 2030

0.610%

1,000,000

Subtotal

11,000,000

Total

¥

198,750,000

The following summarizes short-term loans payable, long-term loans payable and investment corporation bonds outstanding as of
October 31, 2020:
Classification
Short-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

January 31, 2020

January 31, 2021

0.319%¥

January 31, 2020

January 31, 2021

0.319%

500,000

January 31, 2020

January 31, 2021

0.259%

4,200,000

January 31, 2020

January 31, 2021

0.259%

800,000

March 12, 2020

February 28, 2021

0.359%

2,000,000

March 31, 2020

March 31, 2021

0.309%

500,000

June 30, 2020

June 30, 2021

0.359%

1,000,000

June 30, 2020

June 30, 2021

0.309%

1,000,000

June 30, 2020

June 30, 2021

0.309%

1,000,000

August 31, 2020

August 31, 2021

0.315%

1,000,000

Subtotal
Current portion of long-term loans payable

12,500,000
November 12, 2013

November 12, 2020

1.074%

November 12, 2013

November 12, 2020

1.074%¥

500,000

November 29, 2013

November 30, 2020

1.122%

1,000,000

November 29, 2013

November 30, 2020

1.122%

900,000

November 29, 2019

November 30, 2020

0.359%

1,000,000

November 29, 2019

November 30, 2020

0.309%

500,000

November 29, 2019

November 30, 2020

0.319%

200,000

January 10, 2014

January 31, 2021

1.205%

1,300,000

January 31, 2014

January 31, 2021

1.130%

2,300,000

January 30, 2015

January 31, 2021

0.710%

1,500,000

July 10, 2014

July 10, 2021

0.903%

2,000,000

30
KENEDIX Office Investment Corporation

2,000,000

July 10, 2014

July 10, 2021

0.903%

500,000

September 1, 2014

August 31, 2021

0.885%

800,000

September 1, 2014

August 31, 2021

0.885%

500,000

March 20, 2014

September 20, 2021

1.013%

4,000,000

September 30, 2014

September 30, 2021

0.893%

1,000,000

October 31, 2014

October 31, 2021

0.802%

3,000,000

SubtotalLong-term loans payable

500,000

23,000,000
March 12, 2014

March 12, 2023

1.358%March 20, 2014

March 20, 2022

1.199%¥

3,000,000

1,800,000

March 20, 2014

March 12, 2023

1.349%

2,000,000

July 31, 2014

July 31, 2022

1.014%

2,200,000

September 3, 2014

August 31, 2022

0.979%

1,000,000

September 3, 2014

August 31, 2022

0.979%

950,000

October 31, 2014

October 31, 2023

1.071%

2,000,000

October 31, 2014

October 31, 2023

1.126%

1,500,000

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

October 31, 2014

October 31, 2023

1.071%¥

1,000,000

October 31, 2014

October 31, 2024

1.257%

2,000,000

October 31, 2014

October 31, 2024

1.259%

1,000,000

January 30, 2015

January 31, 2025

1.161%

1,500,000

February 18, 2015

February 28, 2022

0.907%

1,250,000

February 18, 2015

February 28, 2022

0.907%

350,000

February 18, 2015

February 29, 2024

1.157%

1,700,000

February 18, 2015

February 28, 2025

1.314%

1,250,000

February 27, 2015

February 28, 2025

1.153%

2,100,000

March 12, 2015

February 28, 2025

1.218%

1,000,000

March 31, 2015

March 31, 2025

1.266%

2,500,000

April 30, 2015

April 30, 2022

0.825%

2,300,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

September 30, 2015

September 30, 2024

1.065%

2,000,000

October 30, 2015

October 31, 2024

0.989%

1,000,000

October 30, 2015

October 30, 2025

1.114%

1,500,000

October 30, 2015

October 30, 2025

1.114%

2,000,000

October 30, 2015

October 30, 2025

1.114%

2,500,000

October 30, 2015

October 30, 2025

1.121%

2,500,000

November 12, 2015

November 30, 2025

1.173%

1,000,000

January 29, 2016

January 31, 2022

0.590%

2,500,000

January 29, 2016

January 31, 2022

0.640%

500,000

January 29, 2016

January 29, 2026

1.074%

2,000,000

January 29, 2016

January 29, 2026

1.024%

1,800,000

February 18, 2016

February 18, 2026

0.998%

1,000,000

February 18, 2016

February 18, 2026

0.998%

500,000

March 31, 2016

March 31, 2026

0.898%

1,000,000

April 28, 2016

April 30, 2024

0.654%

2,000,000

April 28, 2016

April 30, 2026

0.835%

2,000,000

April 28, 2016

April 30, 2026

0.865%

1,000,000

July 29, 2016

July 31, 2026

0.613%

1,500,000

August 2, 2016

July 31, 2026

0.544%

1,000,000

October 31, 2016

October 31, 2024

0.668%

1,000,000

October 31, 2016

October 31, 2026

0.876%

2,500,000

October 31, 2016

October 31, 2026

0.760%

1,000,000

October 31, 2016

October 31, 2026

0.734%

4,000,000
1,500,000

October 31, 2016

October 31, 2026

0.826%

December 12, 2016

November 30, 2026

0.982%

500,000

December 28, 2016

December 28, 2026

0.950%

1,500,000

January 16, 2017

January 31, 2027

0.860%

500,000

January 31, 2017

January 31, 2027

0.853%

700,000

March 28, 2017

March 31, 2027

0.850%

500,000

June 30, 2017

June 30, 2027

0.849%

1,500,000

August 10, 2017

July 28, 2027

0.800%

3,500,000

August 31, 2017

August 31, 2023

0.544%

1,000,000

September 21, 2017

March 31, 2024

0.555%

1,000,000

Kenedix Office Investment Corporation

31

Classification
Long-term loans payable

32
KENEDIX Office Investment Corporation

Weighted-average

Balanceinterest rate

(In thousands of yen)

Drawdown date

Last repayment date

September 21, 2017

September 30, 2025

0.680%

September 21, 2017

March 31, 2027

0.732%

September 21, 2017

September 21, 2027

0.873%

1,000,000

September 21, 2017

September 30, 2027

0.851%

2,500,000¥

1,500,000
1,000,000

October 31, 2017

October 31, 2027

0.810%

2,500,000

November 13, 2017

November 13, 2027

0.931%

3,000,000

December 7, 2017

November 30, 2027

0.899%

1,400,000

December 7, 2017

November 30, 2027

0.820%

1,200,000

December 7, 2017

November 30, 2027

0.969%

1,000,000

December 7, 2017

November 30, 2027

0.939%

1,000,000

December 7, 2017

November 30, 2027

0.869%

1,000,000

December 7, 2017

November 30, 2027

0.899%

800,000

December 7, 2017

November 30, 2027

0.869%

600,000

December 28, 2017

December 28, 2025

0.744%

500,000

December 28, 2017

December 28, 2026

0.878%

500,000

December 28, 2017

December 28, 2027

0.864%

500,000

March 12, 2018

March 31, 2028

0.914%

1,500,000

March 26, 2018

March 31, 2027

0.808%

1,000,000

March 26, 2018

March 31, 2028

0.902%

1,000,000

July 31, 2018

July 31, 2028

0.988%

500,000

August 20, 2018

August 31, 2025

0.696%

500,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

500,000

August 20, 2018

August 31, 2028

0.966%

500,000

August 31, 2018

August 31, 2025

0.700%

500,000

August 31, 2018

August 31, 2025

0.723%

300,000

August 31, 2018

August 31, 2028

1.012%

700,000

October 31, 2018

October 31, 2028

1.013%

1,500,000

October 31, 2018

October 31, 2028

0.910%

1,000,000

October 31, 2018

October 31, 2028

1.013%

500,000

March 28, 2019

March 31, 2029

0.838%

1,400,000

March 29, 2019

March 31, 2029

0.839%

2,950,000

June 14, 2019

June 30, 2023

0.246%

500,000

June 14, 2019

December 28, 2026

0.517%

500,000

June 14, 2019

April 30, 2027

0.605%

1,000,000

June 14, 2019

March 31, 2029

0.725%

1,000,000

July 10, 2019

July 31, 2023

0.230%

500,000

July 31, 2019

July 31, 2022

0.291%

1,000,000

July 31, 2019

July 31, 2023

0.295%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

September 30, 2019

September 30, 2026

0.489%

1,000,000

September 30, 2019

March 31, 2027

0.531%

900,000

September 30, 2019

March 31, 2027

0.425%

800,000

January 31, 2020

January 31, 2025

0.406%

700,000

January 31, 2020

January 31, 2027

0.526%

1,500,000

January 31, 2020

January 31, 2029

0.675%

1,500,000

March 12, 2020

February 28, 2026

0.361%

1,800,000

March 31, 2020

March 31, 2028

0.642%

1,000,000

June 30, 2020

June 30, 2028

0.646%

2,000,000

June 30, 2020

June 30, 2028

0.646%

2,000,000

June 30, 2020

June 30, 2028

0.646%

700,000

Classification
Long-term loans payable

Drawdown dateJune 30, 2020

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

June 30, 2028

0.510%¥

2,000,000

July 31, 2020

July 31, 2028

0.636%

2,700,000

August 31, 2020

August 31, 2030

0.705%

1,500,000

September 30, 2020

September 30, 2025

0.396%

1,000,000

September 30, 2020

September 30, 2027

0.511%

1,000,000

September 30, 2020

September 30, 2030

0.738%

700,000

October 30, 2020

April 30, 2027

0.542%

1,400,000

October 30, 2020

October 31, 2030

0.803%

1,500,000

October 30, 2020

October 31, 2030

0.803%

300,000

July 25, 2014

July 25, 2024

1.180%

April 28, 2016

April 28, 2028

0.900%

1,000,000

July 19, 2017

July 19, 2022

0.260%

1,000,000

July 19, 2017

July 16, 2027

0.640%

2,000,000

February 15, 2019

February 15, 2024

0.390%

2,000,000

January 30, 2020

January 30, 2025

0.250%

2,000,000

October 20, 2020

October 18, 2030

0.610%

1,000,000

Subtotal
Investment corporation bonds

155,250,000¥

2,000,000

Subtotal

11,000,000

Total

¥

201,750,000

8．
．REDUCTION ENTRY
The amount of reduction entry of property, plant and equipment acquired by government subsidy is as follows:
As of April 30, 2021
As of October 31, 2020
In thousands of yen
Buildings in trust¥

26,230¥26,2309. COMMITMENT LINE AGREEMENTThe Investment Corporation has concluded a commitment line agreement with bank of account, etc.
As of April 30, 2021

As of October 31, 2020

In thousands of yen
Maximum amount¥

6,000,000¥

6,000,000

Drawn credit facility¥

6,000,000¥

6,000,000–

Balance–

10. PER UNIT INFORMATION
From November 1, 2020
to April 30, 2021

From May 1, 2020
to October 31, 2020
Yen

Net asset value per unit¥

Net income per unit¥

Weighted-average number of units (units)

539,034¥

16,373¥

428,510538,295
17,059428,510

The weighted-average number of units outstanding of 428,510 as of April 30, 2021 and October 31, 2020, respectively, was used forthe computation of the amount of net income per unit. Net income per unit after adjusting for residual units is not included because
there were no residual investment units.

Kenedix Office Investment Corporation

33

11. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 31%. However, theInvestment Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements are
met under the Special Taxation Measures Law of Japan. Under this law, the Investment Corporation must meet a number of tax
requirements, including a requirement that it currently distribute in excess of 90% of its net income for the fiscal period in order tobe able to deduct such amounts. If the Investment Corporation does not satisfy all of the requirements, the entire taxable income of
the Investment Corporation will be subject to regular corporate income taxes. The Investment Corporation distributed in excess of
90% of its distributable income in the form of cash distributions totaling ¥6,592 million for the fiscal periods ended April 30, 2021
and October 31, 2020, respectively. Therefore, such distributions were treated as deductible distributions for purposes of corporate
income taxes. The effective tax rate on the Investment Corporation’s income was 0.02% for the fiscal periods ended April 30, 2021
and October 31, 2020, respectively. The following table summarizes the significant differences between the statutory tax rate and theeffective tax rate.
From November 1, 2020
to April 30, 2021

From May 1, 2020
to October 31, 2020

Statutory tax rate

31.46%

31.46%

Deductible cash distributions(29.55)(28.37)

Provision of reserve for reduction entry(1.90)(3.09)

Others0.01

0.01

Effective tax rate

0.02%

0.02%

The significant components of deferred tax assets and liabilities as of April 30, 2021 and October 31, 2020 are as follows:
As of April 30, 2021

As of October 31, 2020

In thousands of yen
Deferred tax assets
Enterprise tax payable¥

Amortization of leasehold right

5,075

4,831

Deferred gains or losses on hedges

160,857

129,892

Subtotal

33

¥

24

165,966

134,748

Valuation allowance(165,932)(134,723)

Total deferred tax assets

¥

¥

33

24

12. NET ASSETSThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Act. The entire amount of theissue price of new units is designated as stated capital. The Investment Corporation is required to maintain net assets of at least ¥50
million as required by the Investment Trust Act.

13. RELATED-PARTY TRANSACTIONS(1) Parent Company, Major Corporate Unitholders and Other
Thirty-second fiscal period (From November 1, 2020 to April 30, 2021) and Thirty-first fiscal period (From May 1, 2020 to October
31, 2020): Not applicable(2) Affiliated Companies and Other
Thirty-second fiscal period (From November 1, 2020 to April 30, 2021) and Thirty-first fiscal period (From May 1, 2020 to October
31, 2020): Not applicable(3) Fellow Subsidiary Companies and Other
Thirty-second fiscal period (From November 1, 2020 to April 30, 2021) and Thirty-first fiscal period (From May 1, 2020 to October
31, 2020): Not applicable

34
KENEDIX Office Investment Corporation

(4) Directors, Major Individual Unitholders and Other
Thirty-second fiscal period (From November 1, 2020 to April 30, 2021) and Thirty-first fiscal period (From May 1, 2020 to October
31, 2020): Not applicable

14. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES, AND GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY
Rent revenue – real estate, expenses related to rent business, and gain and loss on sale of real estate property for the fiscal
periods from November 1, 2020 to April 30, 2021 and from May 1, 2020 to October 31, 2020 consist of the following:
From November 1, 2020

From May 1, 2020

to April 30, 2021

to October 31, 2020

In thousands of yen
Rental and other operating revenues
Rent revenue – real estate
Rental revenues¥ 11,882,196¥ 12,051,161

1,626,678

1,705,904

13,508,875

13,757,065

Parking space rental revenues

495,509507,703

Utility charge reimbursement

895,090

1,085,419

Miscellaneous

220,136

232,969

Common area charges
Subtotal
Others:Subtotal
Total rental and other operating revenues

1,610,737

1,826,092¥ 15,119,613¥ 15,583,157

Property-related expenses
Expenses related to rent business
Property management fees and facility management fees

¥1,438,342¥ 1,436,668

Utilities

887,792

1,039,948

Taxes

1,302,176

1,316,730

Repairs and maintenance356,093441,103

Insurance

19,514

19,286

Trust fees

30,152

40,734

Others297,808

269,1732,548,829

2,523,136¥ 6,880,711¥ 7,086,783

Depreciation
Total expenses related to rent business
Gain and loss on sale of real estate properties
KDX Nihonbashi Honcho Building
Revenue from sale of investment properties－¥ 5,000,000

Cost of investment properties－

3,905,680

Other sales expenses－

Gain on sale of real estate properties¥¥

154,834－¥

939,484－¥ 1,550,000－

1,381,337

KDX Nihonbashi Edo-dori Building
Revenue from sale of investment properties¥

Cost of investment properties
Other sales expenses
Gain on sale of real estate properties

50,356－¥－¥

118,305

Kenedix Office Investment Corporation

35

KDX Shin-Nihonbashi Building
Revenue from sale of investment properties¥ 3,200,000

Cost of investment properties
Other sales expenses
Gain on sale of real estate properties¥－

1,971,004－

100,571－¥ 1,128,423¥

Revenue from sale of investment properties¥ 935,000¥

Cost of investment properties

1,115,831－

KDX Hon-Atsugi Building

Other sales expenses

18,091

Loss on sale of real estate properties－－－¥ 198,923¥－

15. LEASESThe Investment Corporation, as lessor, has entered into leases whose fixed monthly rents are due in advance with lease terms ofgenerally two years for office buildings. The future minimum rental revenues under existing non-cancelable operating leases as ofApril 30, 2021 and October 31, 2020 are as follows:
As of April 30, 2021

As of October 31, 2020
In thousands of yen

Due within one year
Due after one year
Total

¥ 3,250,060¥ 3,168,087

7,850,178

8,183,583¥ 11,100,238¥ 11,351,671

16. FINANCIAL INSTRUMENTS
Thirty-second fiscal period (From November 1, 2020 to April 30, 2021)(A) Overview(1) Policy for financial instruments
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily
through bank loans and the issuance of investment corporation bonds and new investment units. The Investment Corporation uses
derivatives for the purpose of hedging its exposure to changes in interest rates and does not enter into derivatives for speculative or
trading purposes. Management of surplus funds is undertaken in a prudent manner that considers fully such factors as safety,
liquidity, interest-rate conditions and cash flows.
(2) Types of financial instruments and related risk
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer
and risk of fluctuation of value of its property.
Loans payable and investment corporation bonds are used primarily for procuring funds necessary for the acquisition of properties
and have a redemption date of a maximum of approximately 9 years and 7 months following the accounting date. Although a certain
portion of said liabilities are subject to interest-rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate
swap transactions) in order to reduce such risk.
Interest-rate swap transactions are used as derivative financial instruments. Utilizing interest-rate swap transactions, the Investment
Corporation fixes its interest expense for long-term loans payable bearing interest at a variable rate. With regard to hedge accounting
methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please
see Note 2(L) “Derivative Financial Instruments.”(3) Risk management for financial instruments(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap transactions in order to minimize risk arising from fluctuations in interest rates
on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer
with regard to investment securities.

36
KENEDIX Office Investment Corporation

(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled
due dates) associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out
payment due dates and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly
checking the balance of cash reserves.

(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market priceavailable, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different
assumptions and factors could result in a different fair value. Moreover, the contract amounts, etc. of derivative transactions in “(B)
Estimated Fair Value of Financial Instruments” do not indicate the market risk of derivative transactions.
(B) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of April 30, 2021 and estimated fair value are shown in the following
table. The following table does not include financial instruments for which it is extremely difficult to determine the fair value (Referto *2 below).
Carrying value
Estimated fair value
Difference
In thousands of yen(1) Cash and deposits(2) Cash and deposits in trust¥ 18,455,256¥ 18,455,256¥–

11,859,877

11,859,877–

30,315,133

30,315,133–

6,800,000

6,800,000

–

–

–

–

(3) Current portion of long-term loans payable

21,700,000

21,756,816

56,816(4) Investment corporation bonds

11,000,000

11,019,300

19,300(5) Long-term loans payable

159,250,000

160,294,270

1,044,270¥ 198,750,000¥ 199,870,386¥ 1,120,386(498,680)(498,680)–

Subtotal(1) Short-term loans payable(2) Current portion of investment corporation bonds

Subtotal
Derivative transactions(*)(*)The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing
the net liability position.
*1 Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivativetransactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying value approximates fair value.
Liabilities(1) Short-term loans payable
Since these items are settled in a short period of time, their carrying value approximates fair value.
(2) Current portion of investment corporation bonds and (4) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices. The fair value of those for which no market priceis available is based on the quoted price obtained from counterparty financial institutions, etc.
(3) Current portion of long-term loans payable and (5) Long-term loans payable
The fair value of long-term loans payable is based on the present value of the total of principal and interest discounted by the interest
rate to be applied if similar new loans were entered into. The fair value of long-term loans payable bearing interest at a variable rate,
which is subject to fixed interest rates resulting from interest-rate swaps and special treatment applied to said swaps, is based on thepresent value of the total of principal and interest, which is handled together with the applicable interest-rate swaps, discounted by
the interest rate to be applied if similar loans were entered into.
Derivative Transactions
Please refer to Note 17 “DERIVATIVE TRANSACTIONS.”

Kenedix Office Investment Corporation37

*2 Financial instruments for which it is extremely difficult to determine the fair value
Carrying value (In thousands of yen)Classification
Investment securities¥

1,134,996

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are notincluded in the preceding table.

*3 Redemption schedule for receivables
Due within 1 year or less
(In thousands of yen)
Cash and deposits¥

18,455,256

Cash and deposits in trust

11,859,877

Total

¥

30,315,133*4 Redemption schedule for loans payable and investment corporation bonds
Due within
1 year or lessDue after

Due after

1 year through2 years through2 years

3 years

Due after

Due after

Due after

3 years through 4 years through4 years

5 years

5 years

In thousands of yen
Short-term loans payable¥

6,800,000

Investment corporation

–

bonds
Long-term loans payable
Total

¥

28,500,000¥

1,000,000

21,700,000¥–

12,950,000¥

2,000,000

11,950,000¥–

15,200,000¥

4,000,000

13,200,000¥–

20,050,000

¥

–

–

16,050,000¥–

4,000,000

24,900,000¥

24,900,000

93,150,000¥

97,150,000

Thirty-first fiscal period (From May 1, 2020 to October 31, 2020)(A) Overview(1) Policy for financial instruments
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily
through bank loans and the issuance of investment corporation bonds and new investment units. The Investment Corporation uses
derivatives for the purpose of hedging its exposure to changes in interest rates and does not enter into derivatives for speculative or
trading purposes. Management of surplus funds is undertaken in a prudent manner that considers fully such factors as safety,
liquidity, interest-rate conditions and cash flows.
(2) Types of financial instruments and related risk
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer
and risk of fluctuation of value of its property.
Loans payable and investment corporation bonds are used primarily for procuring funds necessary for the acquisition of properties
and have a redemption date of a maximum of approximately 10 years following the accounting date. Although a certain portion ofsaid liabilities are subject to interest-rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate swap
transactions) in order to reduce such risk.
Interest-rate swap transactions are used as derivative financial instruments. Utilizing interest-rate swap transactions, the Investment
Corporation fixes its interest expense for long-term loans payable bearing interest at a variable rate. With regard to hedge accounting
methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please
see Note 2(L) “Derivative Financial Instruments.”(3) Risk management for financial instruments(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap transactions in order to minimize risk arising from fluctuations in interest rates
on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer
with regard to investment securities.

38
KENEDIX Office Investment Corporation

(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled
due dates) associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out
payment due dates and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly
checking the balance of cash reserves.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market priceavailable, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different
assumptions and factors could result in a different fair value. Moreover, the contract amounts, etc. of derivative transactions in “(B)
Estimated Fair Value of Financial Instruments” do not indicate the market risk of derivative transactions.
(B) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of October 31, 2020 and estimated fair value are shown in thefollowing table. The following table does not include financial instruments for which it is extremely difficult to determine the fairvalue (Refer to *2 below).
Carrying value
Estimated fair value
Difference
In thousands of yen(1) Cash and deposits(2) Cash and deposits in trust
Subtotal(1) Short-term loans payable¥ 16,128,897¥ 16,128,897–

12,042,095

12,042,095–

28,170,992

28,170,992–

12,500,000

12,500,000–(2) Current portion of investment corporation bonds(3) Current portion of long-term loans payable

¥

–

–

–

23,000,000

23,057,531

57,531(4) Investment corporation bonds

11,000,000

11,011,000

11,000(5) Long-term loans payable

155,250,000

156,906,399

1,656,399¥ 201,750,000¥ 203,474,930¥ 1,724,930(391,228)(391,228)–

Subtotal
Derivative transactions(*)(*)The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing
the net liability position.
*1 Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivativetransactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying value approximates fair value.
Liabilities(1) Short-term loans payable
Since these items are settled in a short period of time, their carrying value approximates fair value.
(2) Current portion of investment corporation bonds and (4) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices. The fair value of those for which no market priceis available is based on the quoted price obtained from counterparty financial institutions, etc.
(3) Current portion of long-term loans payable and (5) Long-term loans payable
The fair value of long-term loans payable is based on the present value of the total of principal and interest discounted by the interest
rate to be applied if similar new loans were entered into. The fair value of long-term loans payable bearing interest at a variable rate,
which is subject to fixed interest rates resulting from interest-rate swaps and special treatment applied to said swaps, is based on thepresent value of the total of principal and interest, which is handled together with the applicable interest-rate swaps, discounted by
the interest rate to be applied if similar loans were entered into.
Derivative Transactions
Please refer to Note 17 “DERIVATIVE TRANSACTIONS.”

Kenedix Office Investment Corporation39

*2 Financial instruments for which it is extremely difficult to determine the fair value
Carrying value (In thousands of yen)Classification
Investment securities¥

1,137,526

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are notincluded in the preceding table.
*3 Redemption schedule for receivables
Due within 1 year or less
(In thousands of yen)
Cash and deposits¥

16,128,897

Cash and deposits in trust

12,042,095

Total

¥

28,170,992*4 Redemption schedule for loans payable and investment corporation bonds
Due within
1 year or lessDue after

Due after

1 year through2 years through2 years

3 years

Due after

Due after

Due after

3 years through 4 years through4 years

5 years

5 years

In thousands of yen
Short-term loans payable¥

12,500,000

Investment corporation

Total

¥

–

¥

–

¥

–

¥

–

¥

–

–

1,000,000–

4,000,000

2,000,000

4,000,000

23,000,000

18,050,000

11,300,000

11,700,000

21,350,000

92,850,000

bonds
Long-term loans payable¥

35,500,000¥

19,050,000¥

11,300,000¥

15,700,000¥

23,350,000¥

96,850,000

17. DERIVATIVE TRANSACTIONS
The following summarizes the contracted amount and the fair value of interest-rate swap contracts as of April 30, 2021:(1) Hedge accounting not applied
Not applicable(2) Hedge accounting applied
Hedge

Type ofaccounting

derivative

methodtransactions

Principle method Interest-rate

Contracted amount

Hedgeditems(In thousands of yen)
Maturing
after 1 year

Fair value(In thousandsof yen)Based on theLong-termswaps:

loans

Receive/floating

payableCalculation
method for
applicable fair value¥

69,850,000¥

69,850,000¥(498,680)

and pay/fixedamount provided bycounterparty
financial institutions

Special treatment Interest-rateLong-termof interest-rate

swaps:

loans

swaps

Receive/floating

payable55,950,000

37,250,000¥ 125,800,000¥ 107,100,000*

and pay/fixed
Total

¥

(498,680)(*)Interest-rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As aresult, their fair value is included in the fair value of the hedged long-term loans payable.

40
KENEDIX Office Investment Corporation

The following summarizes the contracted amount and the fair value of interest-rate swap contracts as of October 31, 2020:(1) Hedge accounting not applied
Not applicable(2) Hedge accounting applied
Hedge

Type ofaccounting

derivative

methodtransactions

Principle method Interest-rate

Contracted amount

Hedgeditems(In thousands of yen)
Maturing
after 1 year

Fair value(In thousandsof yen)Based on theLong-termswaps:

loans

Receive/floating

payableCalculation
method for
applicable fair value¥

55,950,000¥

55,950,000¥(391,228)

and pay/fixedamount provided bycounterparty
financial institutions

Special treatment Interest-rateLong-termof interest-rate

swaps:

loans

swaps

Receive/floating

payable65,450,000

44,150,000¥ 121,400,000¥ 100,100,000*

and pay/fixed
Total

¥

(391,228)(*)Interest-rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As aresult, their fair value is included in the fair value of the hedged long-term loans payable.

18. INVESTMENT AND RENTAL PROPERTIES
Thirty-second fiscal period (From November 1, 2020 to April 30, 2021)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo metropolitan area for the purpose of generating
rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value (In thousands of yen)
As of October 31, 2020

Net change

As of April 30, 2021

Fair value
As of April 30, 2021
(In thousands of yen)
¥ 517,402,000¥ 428,546,523¥ (4,208,574)¥ 424,337,948*1: The carrying value represents the acquisition cost less accumulated depreciation.
*2: Fair value at the end of the fiscal period is the appraisal value determined by outside appraisers.
*3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal
increase/decrease factors were the sales of two properties totaling ¥3,086,836 thousand and depreciation amounting to¥2,548,829 thousand.

Income and loss in the fiscal period ended April 30, 2021 for real estate for rental purposes is listed in Note 14 “BREAKDOWN OFRENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE OF
REAL ESTATE PROPERTY.”

Kenedix Office Investment Corporation

41

Thirty-first fiscal period (From May 1, 2020 to October 31, 2020)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo metropolitan area for the purpose of generating
rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value (In thousands of yen)
As of April 30, 2020

Net change

As of October 31, 2020

Fair value

As of October 31, 2020
(In thousands of yen)
¥ 520,792,000¥ 418,669,303¥ 9,877,219¥ 428,546,523*1: The carrying value represents the acquisition cost less accumulated depreciation.
*2: Fair value at the end of the fiscal period is the appraisal value determined by outside appraisers. Fair value at the end of the fiscal
period under review of KDX Shin-Nihonbashi Building that was sold on November 2, 2020 is calculated based on the sale price(¥3,200,000 thousand) in the transaction agreement on June 26, 2020.
*3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal
increase/decrease factors were the acquisition of one property totaling ¥16,430,044 thousand, the sales of two properties totaling¥5,287,017 thousand and depreciation amounting to ¥2,523,136 thousand.
Income and loss in the fiscal period ended October 31, 2020 for real estate for rental purposes is listed in Note 14 “BREAKDOWNOF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE
OF REAL ESTATE PROPERTY.”

19. SEGMENT AND RELATED INFORMATION
Thirty-second fiscal period (From November 1, 2020 to April 30, 2021)(A) Segment Information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportablesegment subject to disclosure.
(B) Related Information(1)

Information about each product and service

Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of theoperating revenues on the statement of income and retained earnings.
(2)

Information about each geographic area(a)

Net sales

Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenues on the statementof income and retained earnings.
(b)

Property, plant and equipment

Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount ofproperty, plant and equipment on the balance sheet.
(3)

Information about each major customer

Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenues on thestatement of income and retained earnings.
Thirty-first fiscal period (From May 1, 2020 to October 31, 2020)(A) Segment Information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportablesegment subject to disclosure.
(B) Related Information(1)

Information about each product and service

Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of theoperating revenues on the statement of income and retained earnings.

42
KENEDIX Office Investment Corporation

(2)Information about each geographic area(a)

Net sales

Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenues on the statementof income and retained earnings.
(b)

Property, plant and equipment

Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount ofproperty, plant and equipment on the balance sheet.
(3)

Information about each major customer

Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenues on thestatement of income and retained earnings.

20. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable

Kenedix Office Investment Corporation

43

21. DISTRIBUTIONS
Thirty-second fiscal period(From November 1, 2020 to April 30, 2021)

Thirty-first fiscal period(From May 1, 2020 to October 31, 2020)

(Yen)

(Yen)

I. Retained earnings at the end of period¥ 7,016,251,384¥ 7,310,459,769

II. Total distributions¥ 6,592,197,840¥ 6,592,197,840

Distributions per unit

¥ 15,384¥ 15,384

Provision of reserve for reduction entry¥423,945,058¥718,261,929

IV. Retained earnings brought forward
to the next period¥ 108,486¥-

In accordance with the policy stipulated in Article
35 (1) of its Articles of Incorporation, theInvestment Corporation determines that theamount of distribution shall exceed the amountequivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Act on Special
Measures Concerning Taxation, and shall be up to
the amount of its profits as the ceiling. Following
this policy, the Investment Corporation has
decided that, of the amount remaining after theprovision of reserve for reduction entry as
stipulated in Article 66-2 of the Act on Special
Measures Concerning Taxation is deducted fromunappropriated retained earnings, it shall
distribute part of the outstanding ¥6,592,197,840
as profit distribution.
In addition, the Investment Corporation decided
not to distribute cash in excess of distributableprofit, stipulated in Article 35 (2) of its Articles ofIncorporation.

In accordance with the policy stipulated in Article
35 (1) of its Articles of Incorporation, theInvestment Corporation determines that theamount of distribution shall exceed the amountequivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Act on Special
Measures Concerning Taxation, and shall be up to
the amount of its profits as the ceiling. Following
this policy, the Investment Corporation has
decided that, of the amount remaining after theprovision of reserve for reduction entry as
stipulated in Article 66-2 of the Act on Special
Measures Concerning Taxation is deducted fromunappropriated retained earnings, it shall
distribute the outstanding ¥6,592,197,840 as
profit distribution.
In addition, the Investment Corporation decided
not to distribute cash in excess of distributableprofit, stipulated in Article 35 (2) of its Articles ofIncorporation.

III. Voluntary reserve (provision)

Method of calculating distribution
amount

KENEDIX Office Investment Corporation

44

Kenedix Office Investment Corporation

45

46

Unitholders’ Information
Structure of Investment Corporation as of the end of the 32nd fiscal period (April 30, 2021)
Property Support Line Company
Trademark Licenser❺

Investment Corporation

Asset Custodian /Administrative Agent(Institutional administration)
Mizuho Trust &
Banking Co., Ltd.

Kenedix, Inc.
❷ ❹Asset Management Company❶

Kenedix Real Estate FundManagement, Inc.

❻

General Meetingof Unitholders

Mitsubishi UFJ Trust andBanking Corporation

Board of Directors
Executive Director
Jiro Takeda
Supervisory Director
Shiro Toba
Supervisory Director
Yoshihiro Morishima
Supervisory Director
Takahiro Seki❷

Property Support Line Company
Kenedix Investment
Partners, Inc.

❼

❸

❽

Ernst & Young
ShinNihon LLC

Administrative Agent forInvestment Corporation Bonds
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.

Kenedix Property
Management, Inc.
❶ Asset management agreement❷ Memorandum of Understanding 
on providing real estate information❸ Property management agreement❹ Trademark licensing agreement

Administrator forUnitholders’ Register
Administrator forSpecial Accounts
Sumitomo MitsuiTrust Bank, Limited

Auditor
Property Management
Company (Note)

Administrative Agent(Accounting business)❺ Asset custodian agreement / Administrative agency agreement
(Institutional administration)❻ Administrative agency agreement (Accounting business)❼ Unitholder registry administrator agreement/Special accounts administration agreement❽ Financial agency agreement

Note: Several properties are not under the property management of Kenedix Property Management, Inc.

Unitholder structure as of the end of the 32nd fiscal period (April 30, 2021)
Percentage of investment units by type of unitholder

Other domestic
companies

Individuals and others

13,606 units(3.17%)

Foreigncompanies andindividuals

140,852 units(32.87%)

Other domestic
companies

9,859 units(2.30%)

Financial institutions(including securities
companies)

264,193 units(61.65%)428,510 units

Percentage of unitholders by type of unitholder
Foreign companies
and individuals

93

283

(1.95%)(5.95%)

Financial institutions(including securities
companies)

130(2.73%)

4,750
Individuals
and others

4,244(89.34%)

Note: Ratios rounded down to the second decimal place.

Kenedix Office Investment Corporation47

IR schedule
Fiscal period ended OctoberFiscal period ended April
Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

May

Fiscal period end
Financial resultsannouncement
Start of distribution payments
Asset management report publication

Jun.

Jul.

Aug.

Sep.

Oct.

Fiscal period end
Financial resultsannouncement
Start of distribution payments
Asset management report publication

Unitholder memorandum
Fiscal period ends

April 30 and October 31 of each year

General Meeting of Unitholders

In principal, at least once every two years

Unitholder fixed date f or voting

Prescribed in Article 16 of the Articles of Incorporation

Distribution payment dates

April 30 and October 31 (within three months from payment fixed date)Listing

Tokyo Stock Exchange (Securities code: 8972)

Newspaper for public announcements

Nihon Keizai Shimbun (Nikkei)

Unitholder registry andspecial account administrator

Sumitomo Mitsui Trust Bank, Limited 
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Postal address and 
telephone inquiries

Stock Transfer Agency Department
Sumitomo Mitsui Trust Bank, Limited
8-4 Izumi 2-chome, Suginami-ku, Tokyo Toll-free tel: 0120 782 031

Receipt of Distribution

During receipt period

Take your distribution receipt to the head or branch offices of Japan Post Bank Co., Ltd.
or post offices ( bank agents).

After receipt period

Specify the receipt method on the back of the distribution receipt and mail it to the Stock Transfer
Agency Division of Sumitomo Mitsui Trust Bank, Limited, or receive distributions at a branch of
the bank.

Receiving future
distributions

Distributions can be paid by remittances to bank or ordinary postal savings accounts. If transfer
designations or other procedures are preferred, you should, in principle, contact the brokerage withwhich you have an account. If you do not have a brokerage account and have a special account,contact Sumitomo Mitsui Trust Bank, Limited, the institution for managing special accounts.

Exclusion

Under the Articles of Incorporation of KDO, you cannot receive distributions after three years havepassed since distribution payments start, so please receive them as soon as possible.

48

Portfolio
Tokyo metropolitan area

48

(central 5 wards)

properties(as of April 30, 2021)

JR Yamanote Line

Ueno

A-37

A-93

Suidobashi

A-29
A-38

D-2

A-71

A-88

Shinjuku
Ward Ichigaya
A-41

Iidabashi

A-55

A-46

A-127

A-6

A-7

A-112
A-115
A-116

MinatoWard

Shibuya
A-119

Ebisu

Kanda

A-64
Nihonbashi

A-1

Shibuya Harajuku
Ward
JR Yamanote Line

A-17

A-89

A-20
A-4
A-67
A-107

A-21
Toranomon

A-124
A-109
A-32
A-19
A-91

JR Sobu Line

A-113

A-27

ChiyodaA-13 Ward Tokyo

JR Chuo Line

A-120

Ochanomizu

A-8

A-56

Shinjuku

A-66

A-92
A-59

Akihabara

A-128

Shimbashi

A-87
A-51
A-73
A-108
A-3

A-121

Chuo Ward

Hamamatsucho

A-60

JR
Tokaido Line

ShinagawaSee our website for further details on owned properties.
List of Properties URL: https://www.kdo-reit.com/en/portfolio/list.html

Kenedix Office Investment Corporation

49

A-1

A-3

A-4

A-20

A-51

A-60

A-64

A-67

KDX Nihonbashi
313 Building

HigashiKayabacho
Yuraku Building

KDX Hatchobori
Building

KDX Kayabacho
Building

KDX Hamacho
Nakanohashi
Building

KDX Harumi
Building

KDX Nihonbashi
216 Building

KDX Ginza
1chome Building

A-73

A-87

A-107

A-108

A-113

A-121

A-7

A-19

KDX Hakozaki
Building

Nihonbashi
HoridomechoFirst

KDX Ginza East
Building

Pentel Building

KDX
Shin-Nihonbashi
Ekimae Building

Ginza 4chome
Tower

KDX Minami
Aoyama Building

KDX
Hamamatsucho
Building

A-21

A-32

A-89

A-91

A-109

A-112

A-115

A-116

KDX Shinbashi
Building

KDX ShibaDaimon Building

KDX
Takanawadai
Building

KDX Mita
Building

KDX
Hamamatsucho
Center Building

KDX Toranomon
1chome Building

ARK Mori
Building

KDX
Nishi-Shinbashi
Building

A-124

A-128

A-8

A-13

A-27

A-37

A-46

A-56

KDX
Hamamatsucho
Place

KDX Shinbashi
Ekimae Building

KDX Kanda
Kitaguchi
Building

KDX Kojimachi
Building

KDX Kajicho
Building

KDX
Ochanomizu
Building

Hiei Kudan-Kita
Building

KDX Jimbocho
Building

A-59

A-92

A-127

A-29

A-38

A-41

A-55

A-66

KDX Iwamotocho Building

KDX Akihabara
Building

KDX Kanda
Ekimae Building

KDX
Higashi-Shinjuku
Building

KDX
Nishi-Shinjuku
Building

KDX Shinjuku
286 Building

Shin-toshin
Maruzen Building

KDX Shinjuku
Building

A-71

A-88

A-93

A-6

A-17

A-119

A-120

D-2

KDX Iidabashi
Building

KDX Shinjuku
6-chome Building

KDX Iidabashi
SquareHarajuku F.F.
Building

KDX Ebisu
Building

KDX Shibuya
Nanpeidai Building

KDX Yoyogi
Building

Shinjuku 6chome
Building (Land)

50

Portfolio

Tokyo metropolitan area

SaitamaPrefecture(excluding central 5 wards)

29

A-86
A-99

A-62

A-90

A-84

A-33

A-96

Tokyo Metropolitan

properties

A-78
A-35

(as of April 30, 2021)

A-5
A-125
A-85

A-83

A-102

Kanagawa PrefectureTokyo
central5 wards

A-26
A-95
A-72

A-117
A-94
A-22

A-16

A-30

A-14

A-31

A-63

A-48
A-101
A-123
A-122

Chiba Prefecture

A-5

A-14

A-16

A-22

A-26

A-30

A-31

A-33

KDX NakanoSakaue Building

KDX Funabashi
Building

Toshin 24
Building

KDX
Shin-Yokohama
Building

KDX Kiba
Building

KDX NishiGotanda Building

KDX MonzenNakacho Building

KDX
Okachimachi
Building

A-35

A-48

A-62

A-63

A-72

A-78

A-83

A-84

KDX Hachioji
Building

KDX Kawasaki-Ekimae
Hon-cho Building

Koishikawa TG
Building

KDX Gotanda
Building

KDX HigashiShinagawa
Building

KDX Tachikawa
Ekimae Building

KDX Fuchu
Building

KDX Kasuga
Building

A-85

A-86

A-90

A-94

A-95

A-96

A-99

A-101

KDX
Nakameguro
Building

KDX Omiya
Building

KDX Ikebukuro
Building

KDX MusashiKosugi Building

KDX Toyosu
Grand Square

KDX
Takadanobaba
Building

KDX IkebukuroWest Building

KDX Yokohama
Building

A-102

A-117

A-122

A-123

A-125

KDX Yokohama
Nishiguchi Building

BR Gotanda

Mitsubishijuko
Yokohama
Building

KDX Yokohama
Kannai Building

KDX Chofu
Building
Kenedix Office Investment Corporation51

A-118

SapporoOther regional areas

19

properties(as of April 30, 2021)

A-53

A-12

A-82

A-110

A-54

A-100

A-126

A-69

A-104

A-98

A-70

Sendai

A-42

Utsunomiya

A-44

A-97

Kyoto
Hiroshima
Osaka

HakataTokyo
metropolitan
area

Nagoya
A-58

A-106

A-79

A-111

A-12

A-42

A-44

A-53

A-54

A-58

A-69

A-70

Portus Center
Building

KDX Karasuma
Building

KDX Sendai
Building

KDX HakataMinami Building

KDX Kitahama
Building

KDX Nagoya
Sakae Building

KDX KobayashiDoshomachi
Building

KDX Sapporo
Building

A-79

A-82

A-97

A-98

A-100

A-104

A-106

A-110

KDX Nagoya
Ekimae Building

KDX Higashi
Umeda Building

KDX Utsunomiya
Building

KDX Hiroshima
Building

Senri Life Science
Center Building

KDX MinamiHonmachi
Building

KDX Sakura-dori
Building

KDX Shin-Osaka
Building

A-111

A-118

A-126

KDX Nagoya
Nichigin-mae
Building

KDX Sapporo
Kitaguchi
Building

KDX Tosabori
Building52

Tu r n K e y O f f i c e
Initiatives for diversifying office needs
A TurnKey Office equipped with interior and office furnishings that incorporates the ABW (Activity
Based Working) concept was completed in KDX Iidabashi Building in May 2021.
A TurnKey Office is an office space fully equipped with the necessary office furnishings in advance.
A tenant only needs to turn the key to be ready to begin work.
KDX Iidabashi Building

+' (&

+' (&

+' (&

Library, Residential, Session

DUST&' (&'

<=

>?

@A

BC

?

R

Library, Residential, and Session.
Those office layouts designedwith different images for eachof the three rooms.

PY

R

3

SH CO

678
978

SH

DE F /GH
H
I

K8^

4

&' .:

)

(12 fm)
共用
収納

納(6fm

Residential

共用

収納
(6fm
)
f?
gh

?i

共用
収納
(12fm)

!dd

%

共用収

;2

R

個人
収納

（2

4）

（2

4）

}X ]

,- ./-

678 COPY
978
SH

天井
内塞

ぎ

COPY

個人
収納

6F

+' (&

Layout Concept of TurnKey Office

5F

Library
The layout with large shelves andlots of space for concentration
creates a calm, library likeatmosphere.

- .

A C

Library
SessionBy opening and closing the partitions
and curtains, the space can be madeinto closed or open spaces, enabling avariety of work styles.

]

^ _ `

+, - +

2+, - +Qa b _! " #LKM: ;D E F @ GH I
$K =&

J @

CO

PY

1234 23

cd e"

3f

<=><=

C
? @A
B@

! " #L' M

CO

50

PY SH

<=><=

6/7
889

<=><=

R

<=><=

WS

<=><=

! " #LKM

: ;

1

1on1
]

1on1/社長室^ _ `! " #L' M

V, 0 0 T- N
S9O
N
, : ;

cd e"

共 用収 納 (6fm)
共 用収 納 (6fm)

; /9N
- .1O
, /0 N- P.Q.! " #L+=M

Session! " #L%M

個人

収納

(24)

P/J

R, STU.Q.! " #L%M
ZN
PX.[ , /}.Q.! " #LKM

V, 0 0 T- N
S9O
N
, W
T- SX.Q.37Y/7UX

P/J

R

: ;

: ;

3f

" 2W
" 2W

R, STU.Q.! " #L+=M

個人
収納
(12 )
個人
収納
(12 )

V, 0 0 T- N
S9O
N
, ! " #LKM

SH

; /9N
- .1O, /0 N
- P.Q.! " #L+=M

共用
収納
(9fm
共用
)
収納
(9fm
)

4F

W
, [ .[ , /}.

ABW (Activity Based Working)Workstyles in which people can freely
choose the optimal work environment
for the nature of their work make itpossible for someone to work alone andconcentrate, or meet with colleagues andshare ideas.

21Concentration

Scan to see the
TurnKey Officepromotional
video.

3

Session4

Communication

Amenities