証券コード：8972

2022年4月期 決算説明資料
2022年6月15日

0Table of Contents
Section 1

Management Highlight

P. 2

Section 2

Financial Results and Earning Forecasts

P. 4

Section 3

Acquisition of Own Investment UnitsP. 9Section 4

Management Status

P. 11

Section 5

Financial Status

P. 23

Section 6

Initiatives for Sustainability

P. 26

Section 7

Future Initiatives

P. 32

1

Section 1

Management Highlight2

Management Highlight
Return to Unitholders
Fiscal period 2022/4
DPU per unit

Finance

14,000 yen
3.0 bn yen (maximum)

Period over period±0%Compared to initial forecast ±0%

Announced acquisition of
own investment units(June 14, 2022)•

AA-(Positive)

External Growth••

Initiatives for the fiscal period ending April 30, 2022 and thereafter
Sale

Acquisition
Sendai Honcho Building
6.3 bn yen(acquired on April 28, 2022)

Edobashi Building
9.6 bn yen

Assetreshuffling

KDX Kiba Building
1.6 billion yen（scheduled to sellon July 29, 2022）

AUM growth+14.3
bn yen453.6

Mid- to long-term target

579 mn yen

Gain on sale of real Estimated amount of provision ofreserve for reduction entry (Note)estate etc. (Note)

240 mn yen

127 mn yen

Occupancy rate increased for the second consecutive period bysteadily capturing tenants’ needs
Monthly rent and unit rent increased due to tenant replacement while
rent gap narrowed
Occupancy rate

Monthly rent increase

98.3%

6.6 mn yen+0.7% from 2021/10 period

Reduced interest rate levels and expanded lender formations
Average rate ofinterest-bearing debt

Financial
institutions

LTV(book value basis)

0.84%

25

44.1%

+0.5% from 2021/10 period

Sustainability

Internal Growth•(Stable)bn yen•Established greenhouse gas (GHG) emission reduction targets
toward carbon neutrality by 2050•

Disclosed analysis on climate change in line with TCFD (Task
Force on Climate-Related Financial Disclosures)
recommendations•

Promoted initiatives to reduce GHG emission

0

•

AA

-0.05% from 2021/10 period +8 from 2021/10 period(scheduled to acquireon June 30, 2022)

Increase in NOI (annual)

Japan Credit Rating Agency, Ltd. (“JCR”) upgraded the credit
rating in March 2022

Due to tenant replacement
and rent revisions

Increase in rent unit priceupon tenant turnover+4.0%

Note: Figures are based on assumptions for the fiscal period ending October 31, 2022.

 Introduced effectively renewable energy at a total of 13 properties
 Installed LED lighting in approximately 5,900 tsubo of tenant area(leasable area ratio: 35.6% in total, +2.8% from 2021/10 period)•

Acquired new environmental certifications for a total of 5
properties (Percentage of total floor space: 64.4% in total, +7.3%
from 2021/10 period)3Section 2

Financial Results and Earning Forecasts

4

Financial Result of the Fiscal Period Ended April 30, 2022
Items

21/10

22/4

22/4

Performancecomparison

ActualForecast

ActualDifference(mn yen)
Actual –forecast
comparison
Difference

C-A

C-B

(announced on
December 14, 2021)

A
15,02814,981
－
46
8,170

B
15,757
14,940
763
53
8,530

C
15,891
15,078
770
42
8,463

Rental and other operating expense(excluding depreciation)

4,486

4,766

Loss on sale of real estate etc.
Depreciation
General and administrative expense(Asset management fee)
Operating income
Non-operating income
Non-operating expense(Interest expenses, etc.)
Ordinary income
Net income

－
2,567
1,116
930
6,857
0
947
938
5,911
5,909

Rental NOI (Note 1)
Rental NOI (excluding repair /maintenance expense)
Rental and other operating profit

Operating revenue
Rental and other operating revenue
Gain on sale of real estate etc.
Dividend income
Operating expense

862
96
770
-4
292

133
137
6
-10
-66

4,721

234

-45

－
2,603
1,160
949
7,227
0
939
912
6,288
6,287

－
2,588
1,153
962
7,427
0
930
907
6,497
6,496

－
21
36
31
569
0
-17
-31
586
586

－
-14
-6
12
200
-0
-9
-5
209
209

10,495

10,174

10,356-138

182

10,832

10,64910,763

-69

114

7,927

7,570

7,768

-159

197

-89

288

497

586

209

5,999
14,00013,791
745,000
8,477
428,510

5,999
14,00014,673－
8,127
428,510

5,999
14,00015,161780,000
8,314
428,510－0
1,370
35,000
-162
0

－
0
488
－
187
0

97.6%

98.2%

98.3%
+13.6 bn yen+35,000 yen+14.4%+4.7%

1

Provision (+) / reversal (-) ofreserve for reduction entry
Total distributions
DPU (yen)
EPU (yen)
NAV per unit (yen)FFO (Note 2)# of total units outstanding
Occupancy rate(contracted area based)
Unrealized profit in portfolio
NAV per unit

94.9 bn yen
745,000 yen

108.6 bn yen
780,000 yen

Comparison to the fiscal period ended October 31, 2021
■Operating revenue●Existing properties
・Rent / common area charge
・Other rental and operating revenue+862 mn yen+859 mn yen+72 mn yen+21 mn yen (Parking revenue +10, Restoration
work revenue +10)+770 mn yen (The sale of the partial land of KDX
・Gain on sale of real estate etc.
Toranomon 1-chome Building)+3 mn yen
●The property acquired in fiscal period 2022/4+3 mn yen (Sendai Honcho Building +3)
・Rental and other operating revenue■Operating expense●Existing properties
・Utilities
・Repair / maintenance expense
・Depreciation
・Other rental and operating expense+292 mn yen+289 mn yen+91 mn yen+68 mn yen+18 mn yen+73 mn yen (Management consignment revenue+35、Advertising expense +16,
Others +21)
+31 mn yen
・Asset management fee●The property acquired in fiscal period 2022/4+2 mn yen
+2 mn yen (Sendai Honcho Building +2)
・Rental and other operating expense

Comparison to the forecast of
the fiscal period ended April 30, 2022 (announced on December 14, 2022)■Operating revenue●Existing properties
・Rent / common area charge
・Utilities
・Other rental and operating revenue●The property acquired in fiscal period 2022/4
・Rental and other operating revenue+133 mn yen+130 mn yen+12 mn yen+83 mn yen+37 mn yen (Restoration work revenue +10,
Cancellation penalty +9, Parking
revenue +5, Others +12)
+3 mn yen
+3 mn yen (Sendai Honcho Building +3)■Operating expense●Existing properties
・Utilities
・Repair / maintenance expense
・Depreciation
・Other rental and operating expense●The property acquired in fiscal period 2022/4
・Rental and other operating expense-66 mn yen-69 mn yen+45 mn yen-68 mn yen-17 mn yen-22 mn yen+2 mn yen
+2 mn yen (Sendai Honcho Building +2)

Note 1: Rental NOI = Operating revenue – Gain on sale of real estate etc.– Dividend income –Rental and other operating expense (excluding depreciation)
Note 2: FFO = Net income + Depreciation – Gain on sale of real estate etc.+ Loss on sale ofreal estate etc.

5

Earning Forecasts of the Fiscal Period Ending October 31, 2022 and April 30, 2023
(mn yen)
22/4

22/10

23/4

ActualItems
Forecast

Forecast

A
15,891
15,078
770
42
8,463

B
15,95915,673
239
46
8,845

C
15,60015,558－42
8,856

Rental and other operating expense(excluding depreciation)

4,721

5,037

Loss on sale of real estate etc.
Depreciation
General and administrative expense(Asset management fee)
Operating income
Non-operating income
Non-operating expense(Interest expenses, etc.)
Ordinary income
Net income

－
2,588
1,153
962
7,427
0
930
907
6,497
6,496

Rental NOI (Note 1)
Rental NOI (excluding repair /maintenance expense)

Operating revenue
Rental and other operating revenue
Gain on sale of real estate etc.
Dividend income
Operating expense

Rental and other operating profit

22/10 forecast 23/4 forecast
22/4 actual 22/10 forecast
Comparison Comparison
Difference
B-A

Difference

68
594
-530
4
381

C-B
-359
-114
-239
-4
11

5,088

316

51

－
2,631
1,175
955
7,114
0
923
902
6,191
6,190

－
2,617
1,150
947
6,743
0
906
897
5,837
5,836

－
43
22
-6
-313
0
-6
-4
-306
-306

－
-14
-24
-7
-370
－
-16
-5
-354
-354

10,356

10,635

10,469278-166

10,763

11,074

10,865

310

-208

7,768

8,003

7,852

235

-151

497

127

-227

-370

-354

5,999
14,00015,161
8,314
428,510

6,063
14,15014,446
8,582
428,510

6,063
14,15013,6198,453
428,510

64
150
-715
268
0

－
0
-827
-129
0

98.3%

97.5%

97.7%

1

Provision (+) / reversal (-) ofreserve for reduction entry
Total distributions
DPU (yen)
EPU (yen)
FFO (Note 2)# of total units outstanding
Occupancy rate(contracted area based)

Note 1: Rental NOI = Operating revenue – Gain on sale of real estate etc. – Dividend income – Rental and other operating
expense (excluding depreciation)
Note 2: FFO = Net income + Depreciation – Gain on sale of real estate etc. + Loss on sale of real estate etc.

Comparison between the actual of the fiscal period 22/4
and the forecast of the fiscal period 22/10■Operating revenue●Existing properties
・Rent / common area charge
・Utilities
・Gain on sale of real estate etc.

●The properties acquired and to be acquired in fiscal
period 2022/4 and thereafter・Rental and other operating revenue●The property to be sold in fiscal period 2022/10
・Rental and other operating revenue
・Gain on sale of real estate etc.
■Operating expense●Existing properties
・Utilities
・Taxes●The properties acquired and to be acquired in fiscal
period 2022/4 and thereafter・Rental and other operating expenses●The property to be sold in fiscal period 2022/10
・Rental and other operating expenses+68 mn yen-474 mn yen+178 mn yen+128 mn yen-770 mn yen (Disappearance of gain on sale ofthe partial land of KDX Toranomon
1-chome Building)+330 mn yen+330 mn yen (Sendai Honcho Building +196,
Edobashi Building +133)+212 mn yen-27 mn yen (KDX Kiba Building -27)
+239 mn yen (The sale of KDX Kiba Building)+381 mn yen+295 mn yen+248 mn yen+28 mn yen+100 mn yen+100 mn yen (Sendai Honcho Building +65,
Edobashi Building +35)
-14 mn yen-14 mn yen (KDX Kiba Building -14)

Comparison between the forecast of the fiscal period 22/10 and 23/4

■Operating revenue●Existing properties
・Rent / common area charge
・Utilities●The property to be acquired in fiscal period 2022/10
・Rental and other operating revenue●The property to be sold in fiscal period 2022/10
・Rental and other operating revenue
・Gain on sale of real estate etc.

-359 mn yen-144 mn yen-111 mn yen-33 mn yen+47 mn yen+47 mn yen (Edobashi Building +47)
-261 mn yen-22 mn yen (KDX Kiba Building -22)-239 mn yen (Disappearance of gain on sale of
KDX Kiba Building)■Operating expense●Existing properties
・Taxes・Repair / maintenance expense
・Brokerage fee●The property to be acquired in fiscal period 2022/10
・Rental and other operating expense●The property to be sold in fiscal period 2022/10
・Rental and other operating expense+11 mn yen+5 mn yen
+22 mn yen-50 mn yen+43 mn yen+23 mn yen+23 mn yen (Edobashi Building +23)
-16 mn yen-16 mn yen (KDX Kiba Building -16)

6

Principal Factors for Changes in DPU• Fiscal period 22/4 : NOI decreased due to an increase in expenses, however, DPU is maintained at 14,000 yen by utilizing a portion ofgain on sales of real estate etc.
• Fiscal period 22/10 : DPU will increase from 14,000 yen to 14,150 yen due in part to asset reshuffling to raise the NOI level,
while EPU is less than 14,000 yen• Fiscal period 23/4 : Although NOI will decrease due to a decline in rental revenues, the NOI will continue to be 14,150 yen by utilizing
the reserve for reduction entry
KDX Hamamatsucho Place +129
KDX Harumi Building+59

Interest expenses, etc. +72
Asset management fee -74(yen)Reversal ofreserve for
reduction entry

209

Utilities revenue +3

174
Rent /
commonarea
charge13,791

Fiscal21/10期period（実績）
21/10(actual)(Initial forecast)
14,000Utilities expense-213
Repair / maintenance -160

14,000KDX Harumi Building+124
KDX Iidabashi Square+89
KDX Iidabashi Building +82

14,000Utilities expense
Taxes

Gain on salesof real estateetc.

Utilities revenue +299

50
Rental andotheroperatingrevenue

-580
-66

126

263
547
Rental andotheroperatingexpenseNOI -322

Sendai Honcho Building +334
Edobashi Building+251
KDX Kiba Building
-44

638

571

417

106
OthersRent /
commonarea
charge13,362

Fiscal22/4期
period（実績）
22/4(actual)Rental andotheroperatingrevenue
Rental andotheroperatingrevenue

NOI +650

541

Edobashi Building+61(contribution through period)
KDX Kiba Building-27(disappearance)(Initial forecast)
14,00014,15014,150Gain on salesof real estateetc.

Reversal ofreserve for
reduction entry

264

Others531

259
Rent /
commonarea
chargeExternal
growth(NOI)13,886

66

95

Other
Rental andrental and
other
other
operatingoperatingexpenserevenue

NOI -387

Fiscal22/10期period（予想）
22/10(forecast)■ Amount of reversal of reserve for reduction entry ■ Amount of increase from gain on sales of real estate etc.
■■ EPU per unit (excl. the amount of reversal of reserve for reduction entry and gain on sales of real estate etc.) ■ Factor for increase ■ Factor for decrease

34
External
growth(NOI)

119
Others13,619Fiscal23/4期
period（予想）
23/4(forecast)7

DPU per Unit and Balance of Reserve for Reduction Entry
Balance of reserve for reduction entry (Note 2)

DPU (Note 1)•

Continue to stabilize DPU by utilizing gains on sales of realestate and reserve for reduction entry(yen)

Increased provision ofreserve for reduction entry
due to higher-than-expected
EPU resulting fromincreased NOI

Increase DPU level from
14,000 yen to 14,150 yen in
the fiscal period 2022/10 and
2023/4 due to raising NOI
through asset reshuffling+150 yen (+1.1%)

14,00014,000209
638

14,15014,000209 million yen increase in provision for the fiscal
period 2022/4 compared to the initial forecast•

Sale ofKDX Kiba Building(mn yen)

14,150

Sale of the part ofthe land of KDX
Toranomon
1chome Building

4,453

4,326
264

467

531

3,828

1,109

334

497

127
Provision

Provision

497

4,225
127
497

334

334

Reversal
227

107

Provided amount in fiscal
period 21/4 and thereafter

1,709 yen/unit• To be utilized to stabilize
DPU over the short term
Reserved amount until
fiscal period 20/10

8,152 yen/unit

13,791

Fiscal21/10期period実績
21/10
Actual

12,891 13,362

13,533 13,886

Fiscal 22/4期
FiscalFiscal 22/10期
Fiscal22/4期
22/10期periodperiodperiodperiod
予想
実績
予想
予想
22/4
22/4
22/10
22/10
InitialActualInitial Forecast
当初予想
当初予想
実績
forecast
forecast■
Reversal of reserve for reduction entry■
Increased amount due to gain on sales of real estate■■ EPU per unit (excl. gain on sales of real estate etc.
and the amount of reversal of reserve for reduction entry)

13,619Fiscal23/4期
period予想
23/4
Forecast

3,493

Reserveforreduction
entry
per unit

3,493

3,493

3,493

Fiscalperiod
21/10期
21/10
実績
ActualFiscalperiod
22/4期
22/4
実績
ActualFiscalperiod
22/10期
22/10
予想
Forecast

Fiscalperiod
23/4期
23/4
予想
Forecast

8,934 yen

10,095 yen

10,391 yen

9,861 yen

• For temporary decrease
in income, incurrence ofexpenses and others• A temporary decrease in
distributions due tolarge-scale renewal andothers• For dilution of
distributions in the eventof capital increaseduring the period

Note 1: The amount per unit is calculated by dividing by the number of investment units issued and outstanding (428,510 units) as of the end of fiscal period 22/4. The same applies hereinafter.
Note 2: Actual and expected reserve for reduction entry is calculated by either adding provision of reserve for reduction entry or subtracting reversal of reserve for reduction entry to/from the balance of reserve for reduction entry
on the balance sheet as of the end of the relevant fiscal periods.

8Section 3
Acquisition of Own Investment Units

9Acquisition of Own Investment Units• Enhance unitholders’ value in the medium- to long-term through acquisition and cancellation of its own investment units while
comprehensively taking into consideration its investment unit price level, cash on hand, financial condition, market environment,
and other factors

Historical changes in unit price(January 6, 2020~June 10, 2022)

Details of plan(yen)

Total number ofinvestment units to beacquired

6,000 units (maximum)(1.4% of the total number of issued
investment units (excluding the numberof own investment units))

Total acquisition price ofinvestment units to beacquired

30 billion yen (maximum)

Acquisition period

From June 15, 2022 to September 9,2022

Significance and effect•SignificanceEffect1,000,000

600,000

400,000•

Efficient use of free cash•

Increase in EPU and NAV per unit throughacquisition and cancellation of own investment
units

20/1

20/5

20/9

21/1

21/5

21/9

22/1

22/5

Effect on distribution per unit (DPU) (estimate) (Note)
Estimated DPU for the fiscal period 2022/10

Improvement of capital efficiency and returns tounitholders

NAV per unit level

800,000

14,50014,30014,150 yen

14,10014,290 yen

Effects ofacquisition andcancellation of
own investment
units+140 yen

13,90013,70013,500

Before取得・消却考慮前
taking acquisition/
cancellation into accountAftertaking acquisition/
取得・消却考慮後
cancellation into accountNote: It is assumed that the Investment Corporation will acquire its own investment units until itreaches the maximum total acquisition price of investment units (3,000 million yen) at theclosing price of 662,000 yen on June 10, 2022, and that all acquired units will becancelled during the fiscal period ending October 31, 2022.

10

Section 4

Management Status

11

Acquisition of the Property (Sendai Honcho Building)
Overview of Sendai Honcho Building
Stable occupancy is expected as tenants are expected to be diversified• The Property is located in an office area in the center of Sendai City, adjacent to a district lined with government agencies, and a bustling neighborhood extending
from the front of Sendai Station and consisting mainly of stores, bars and restaurants• With regular-shaped rental rooms that facilitate office layout planning and floors that can be subdivided, the Property’s office specifications can meet diverse
needs; occupied by more than 40 tenants• With the renovated common areas including the entrance hall and implemented other environment-friendly construction such as installation of LED lightnings, theProperty is reasonably competitive within the area and more widely

Sendai Honcho Building

Location

Sendai, Miyagi

Total floor area

13,049.82㎡

Completion dateNovember, 1984

Acquisition price

6,360 mn yen

Appraisal value(as of April 1, 2022)

Access6,500 mn yen

Acquisition date
Occupancy rate

(as of June 1, 2022)

NOI yield(estimated) (Note1)
NOI yield
after depreciation(estimated) (Note 2)
Appraisal NOI yield(Note 3)

April 28, 2022
91.9%
4.6%
4.1%
5.2%

Approximately 1 minute on foot from Hirose-dori Station on the
Sendai Subway Namboku Line

Note 1: Calculated by annualizing the NOI (estimated) after eliminating special factors for the year of acquisition and dividing by the acquisition price (rounded to the first decimal place. The same applies to each of the yields
below).
Note 2: NOI after depreciation (estimated), which is NOI (estimated) minus depreciation, is converted to an annual basis and divided by the acquisition price.
Note 3: The net operating income based on the direct capitalization method in the appraisal report as of April 1, 2022, divided by the acquisition price.

12

Acquisition of the Property (Edobashi Building)
Overview of Edobashi Building
Located in an area where there is an increasing scarcity of mid-sized office due to multiple redevelopment plans in the surrounding area
• The Property is located in also foremost office areas in Tokyo, which is lined with stores such as Nihombashi Mitsukoshi Main Store and home to many
corporate headquarters and branches• The Property has an imposing facade and the rental rooms are regularly-shaped, taking daylight from both north and south and giving a sense of
spaciousness• After the acquisition, the Investment Corporation plans to rennovate the common areas including the entrance hall to further strengthen the Property’s
competitiveness, as well as implement other environment-friendly construction such as installation of LED lightnings
江戸橋ビル

Location

Chuo-ku, Tokyo

Total floor area

8,076.42㎡

Completion dateNovember 1986

Anticipatedacquisition price9,600 mn yen

Appraisal value(as of April 1, 2022)

Access

10,200 mn yen

Scheduledacquisition date
Occupancy rate

(as of June 1, 2022)

NOI yield(estimated) (Note1)
NOI yield after
depreciation(estimated) (Note 2)
Appraisal NOI yield(Note 3)June 30, 2022

Edobashi building

100.0%
3.6%
3.3%
3.7%

Approximately 5 minutes on foot from Mitsukoshimae Station on
the Tokyo Metro Ginza Line/Hanzomon Line / Approximately 6
minutes’ walk from Nihombashi Station on the Toei Asakusa Line/ Approximately 6 minutes on foot from Shin-Nihombashi Stationon the JR Sobu Main Line13

Sale of the Property (KDX Kiba Building) and Benefit of Asset Reshuffling
Overview of KDX Kiba Building

Benefit of asset reshuffling• Located in an area that is inferior to the surrounding office market.
The decision to sell the property was made due to unrealized
losses and concerns about a future decline in profitability• Anticipated sale price is 43.5% above the appraisal value

Properties (to be) acquired

Property to be sold

Acquisition priceSale price15.9 bn yen

1.6 bn yen

NOI yield

NOI yield(expected/after depreciation)(Weighted average of 2 properties)

Asset
reshuffling

4.0% / 3.7%
[Standard floor plan]

Location

Koto-ku, Tokyo

Total floor area

2,820.64㎡

Completion date

October 1992

Assumed book value（as of July 29, 2022)

Anticipated sale priceDifference between
anticipated sale price andassumed bookvalue/assumed book value

1,350 mn yen
1,650 mn yen

22.2%

Acquisition dateJune 20, 2006

Scheduled date of sale

July 29, 2022

Appraisal value(as of April 1, 2022)

NOI yield(actual)(Note 1)
NOI yield after
depreciation(actual) (Note 2)
NOR yield of sale price(Note 3)(expected/after depreciation)

3.5% / 1.9%

Unrealized gain (Note 4)

Unrealized loss (Note 4)

737 mn yen

200 mn yen

Portfolio NOI yield maintained at current level despite
expansion of asset size

1,150 mn yen
3.5%

AUM growth

1.9%

3.3%

Increase in NOI(annual) (Note 5)

Gain on sale of realestate etc. (Note 6)

Estimated amount ofprovision of reserve
for reduction entry(Note 7)14.3 bn yen

Mid- to long-term target

579 mn yen

240 mn yen

127 mn yen

Note 1: The sum of NOI (actual) for the 21/10 and 22/4 fiscal periods is divided by the acquisition price of the property at the time of acquisition.
Note 2: NOI (actual) after depreciation is calculated by deducting depreciation expenses from NOI (actual) for the 21/10 and 22/4 fiscal periods and dividing it by the acquisition price at the time of acquisition.
Note 3: The sum of NOI (actual) for the 21/10 and 22/4 fiscal periods is divided by the anticipated sale price.
Note 4: For properties to be acquired (planned), the difference between the appraisal value as of April 1, 2022 and the (planned) acquisition price, and for properties to be sold, the difference between the appraisal value as of April
30, 2022 and the estimated book value.
Note 5: The difference between the estimated NOI (annual) for the property to be acquired (planned) and the NOI (actual) for the 21/10 and 22/4 fiscal periods for the property to be sold.
Note 6: The figure for gain on sales of real estate etc. is an estimated figure based on the estimated book value of the property to be sold and sales expenses, etc. in the fiscal period 22/10.
Note 7: The estimated amount of provision of reserve for reduction entry is the estimated figure in the fiscal period 22/10.

14

Occupancy Rate, Turnover Ratio and Trends in Move-ins/outs ofTenants for Office Buildings• Occupancy rate at the end of the fiscal period 2022/4 increased to 98.3% by steadily capturing tenants’ needs• Anticipate an increase in the move-out rate in the fiscal period 2022/10. Although vacancies are ahead, active tenant movement will continue. Strive to maintainand improve the occupancy rate through flexible and agile leasing strategies

Occupancy rate, area and number of move-ins/outs
and turnover ratio (Note1)
Actual occupancy rate

Occupancy rate

稼働率（契約面積ベース）(contracted area based)
99.5

97.5%

Average in fiscal peirod

99.5

98.1

98.6

96.7

(36)
2,020

(35)
2,365

-408

-2,795-2,428(35)

Turnover
ratio

(65)
5,217

(78)
7,648
1,185

19.3% 8.1%
（12） （5）Fiscal22/4期
period
22/4

72.2%
（39）

22.2%
（12）

21/10

95.3
94.5%

94.7
95.4%

21/10

11.1%
（6）

Fiscal

23.1%
（9）

22/4期
period22/4-6,700(73)-6,463
(63)

59.0%
（23）

17.9%
（7）

1,480

Free rent period (months) (by area) (Note 3)

1.7%

3.5%

4.6%

4.4%

2.3%

20/4期
Fiscalperiod20/4

20/10期
Fiscalperiod
20/10

21/4期
Fiscalperiod21/4

21/10期
Fiscalperiod
21/10

22/4期
Fiscalperiod22/4■ Space leased (tsubo)■ Space vacated more than 200 tsubo (tsubo)

9.3%
（5）

■ Floor expansion ■ Floor reduction-3,309(43)■ Other/unknown () Number of move-in/out

5.3
4.0

-5,902
(44)

2.7
1.4

1.8

1.9

5.6%
（3）

79.6%
（43）

(64)
4,790

4.8
-1,484-5,160
(57)

72.6%
（45）

period
21/10期

OUTs

Actual average in fiscal period

97.5

period
21/10期

Fiscal

93.3

94.8

97.8%
98.3

97.6

97.5

96.7

(Numberof movein/out)

Fiscal

実質稼働率（FR面積控除後）(excl. free rent area)
INs

(%)

Reasons for move-ins/outs (Note 2)

4.6
2.8

2.7
1.5

1.0

3.6

1.3 1.3

4.0%

22/10期
Fiscalperiod22/10
想定Forecast■ Space vacated less than 200 tsubo (tsubo)
Space leased – Space vacated (tsubo)

都心5区
5 Central Wardsof TokyoTokyo
Metropolitan Area
その他東京経済圏(excluding 5 central wards)

Other地方経済圏
Regional Areas■Fiscal period ■Fiscal period ■Fiscal period ■Fiscal period ■Fiscal period
20/4
20/10
21/4
21/10
22/4

Note: Occupancy rate (contracted area based) is calculated by dividing leased area (contract based) by leasable area, and actual occupancy rate (excl. free rent area) is calculated by subtracting free rent area from leased area
then dividing by leasable area. The figures are rounded to the first decimal place.
The leased area and number of move-ins/outs are calculated based on the floor. In case that an end-tenant move-out from/move-in to multiple floors, the number is counted by floor.
The turnover ratio is the figure calculated by dividing the total leased area for tenants who cancelled their lease contracts in each fiscal period by the average of the total leasable area of all office buildings owned by theInvestment Corporation as of the end of each month and rounded to the first decimal place. Turnover ratio for the fiscal period 2022/10 is the estimate based on the cancellation notice, etc. received by May 31, 2022.

15

Rent Changes upon Tenant Turnover for Office Buildings• Continued increase in monthly rent and unit rent due to tenant replacement
Change in monthly rent unit priceand rate of change at tenant replacement

Change in monthly rents at the timeof replacement of tenants(million yen)

8.2

6.5

6.3
6.2

(yen/tsubo)

8.1

6.7

＋9.8%
16,613

3.7

Total rent
increase
Total rent
decrease

3.0

2.9

-0.8

2.6

＋8.3%
17,192＋20.8%
16,292＋2.7%
15,806
15,384

15,875

15,136-0.1＋4.0%
17,01816,356

13,486

-1.4
-3.8
-5.0

Fiscal% of the number
テナント入替時のof rent increase
contracts upon
賃料増加件数割合
tenant turnoverFiscalFiscalFiscalFiscalperiod20/4期

period20/10期period21/4期

period
21/10期period
22/4期

72.7%

93.3%

76.3%

60.6%

54.2%

20/4

20/10

21/4

21/10

22/4

Fiscal20/4期
period20/4

Fiscal20/10期period20/10

FiscalFiscal21/4期
period

21/10期period21/4

Unit rent for previous tenant
従前のテナント賃料単価

21/10

Fiscal22/4期
period22/4

Unit rent for new tenant
新規テナントの賃料単価

Total rent increase - Total rent decrease

Note: The increase/decrease in the monthly rent and unit rent and others are calculated for each occupied floor where the new rent and the previous tenant rent can be compared.

16

Status of Rent Revisions with Existing Tenants• Increased the number of rent increases due to continuous negotiations with tenants paying below-market rents as the rent
gap in the portfolio narrowed. Continued to achieve a net increase in rent revisions
Changes in rent upon rent revisions (based on monthly rent)

Rent decrease
(5)
5.4%

(thousand yen)

Exception for
negotiation(Higher thanmarket rent)
(73)
25.5%

14,017
11,225

13,906
7,045

9,992

3,037

1,667

4,002
2,713

615

Fiscalperiod20/4期
20/4

Fiscalperiod20/10期
20/10

Increase
増賃額
in rent-1,233-1,052

Fiscalperiod
21/4期
21/4

Fiscalperiod
21/10期
21/10

Decrease
減賃額
in rent-1,946-324

Fiscalperiod
22/4期
22/4

Fiscalperiod
22/10期
22/10
以降
Onward2022年as ofConfirmed
5月17日時点
May17, 2022
確定分

Increase in rent –
増賃額－減賃額
Decrease in rent

Rent increase
(18)
8.7%

Rent decrease(6)
Exception for 2.6%
negotiation(Higher thanmarket rent)
(60)
17.3%

Rent increase
(34)
20.0%

Fiscal period
22/4
276

Fiscal period
21/10
250

No change(Lower thanmarket rent
(154)
60.5%

5,948

7,045

-111

Status of rent revisions (based on leased floor area) (Note 1)

Negotiation Target

No change(Lower thanmarket rent
(176)
60.1%

Negotiation Target

Number of rent increase contracts and rent increase rate
(number)

103■ Tokyocentral 5 wards■ Other areas
都心5区
都心5区以外

52
38

36

51

28

24

Fiscal period
20/4期
20/4

Fiscal period
20/10期
20/10

Fiscal period
21/4期
21/4

Fiscal period
21/10期
21/10

Fiscal period
22/4期
22/4

7.7%

10.4%

9.4%

4.7%

6.4%

Rent increase rate
(incremental average)(Note 2)

10

12

34
18
13

22
5

12

Note 1: “Market rent” in this graph is a new contracted rent (standard floor) for each property estimated by CBRE as of the end of each fiscal period.
Note 2: Rent increase rate is calculated by dividing the sum of increase in monthly rent by the sum of monthly rent before revision (rounded to the first decimal place).

17

Rent Gap of KDO Office Buildings• Although market rents are rising at some properties, the rent gap continues to narrow due to declining market rents,
tenant replacements, and rent increases at the time of rent revisions
Breakdown of rent gaps (based on monthly rent) (Note 1)
Over 10%Higher thanmarketrent level

Breakdown of rent gaps by rent revision schedule(as of the end of fiscal period 2022/4, based on monthly rent) (Note 1) (Note 3)
57（mn yen）

269 mn yen

42

45
44

Between 0% and 10%567 mn yen

39

603 mn yen

Lower thanmarketrent level

Lower than -10%

Lower thanmarket rent level
55.4%

437 mn yen

Historical average rent gaps (Note 2)

4.7

21.0
19.5
14.4
10.3
-2.2
-4.3
-10.7

Fiscalperiod
22/10期
22/10
到来分

4.2

-0.6 -2.1-4.2 -6.6

102

105

85
59.3%

Fiscalperiod
23/4期
23/4
到来分

106

52.6%

Fiscalperiod23/10期
23/10
到来分

140

62.0%

Fiscalperiod
24/4期
24/4
到来分

136
10

44.5%

Fiscalperiod24/10期
24/10
以降到来分
OnwardChange in market rent of owned properties (Note 4)
Decline
(19)

7.1

55.5%

152

■ Over -10% ■ -10%~0% ■ 0%~+10% ■ Over +10%

End of 22/4期末
fiscal period 22/4

（%）

77

76

118

125

103

163
Fiscalperiod
22/4期
22/4

115

106

127
Between -10% and 0%

121

53

-5.9 -4.6-8.9 -8.7 -6.9

Fiscal Fiscal Fiscal Fiscal
FiscalFiscalFiscalFiscalFiscalFiscal05/10期period 07/10期
period 09/10期
period 11/10期
period 13/10期
period 15/10期
period 17/10期
period 19/10期
period 21/4期
period 22/4期
period
07/10
09/10
11/10
13/10
15/10
17/10
19/10
21/4
22/4
05/10

Rise
(0)

4
15 4%
16% Fiscal

19
20%

period
21/10
(95)

25
26%

Decline
(32)

32
34%

23
24%
Flat
(76)

Rise
(2)
1
2
1%
2%
8
9%
24
Fiscal 25%
period22/4(95) 21

16
17%

22%

Flat
(61)

■ 5 Central Wards of Tokyo ■ Tokyo Metropolitan Area
■ Other Regional Areas(excluding 5 central wards)

Note 1: A new contracted rent (standard floor) for each property estimated by CBRE as of the end of the fiscal period 2022/4 is deemed the market rent; the gap between the contracted rent for each tenant as of the end of the
fiscal period and the market rent is recognized as a rent gap. No gap is classified into “Between 0% and +10%”.
Note 2: Calculated as the weighted average, based on leasable floor area, of the gap rate between the average contracted rent of the standard floor for the office buildings owned by the Investment Corporation as of the end ofeach fiscal period and the market rent for each property estimated by CBRE at the time of appraisal.
Note 3: The figure shows the distribution of the percentage deviation between the contract rent of each tenant and the market rent of each property assessed by CBRE as of the end of the fiscal period 2022/4 for office buildings
owned as of the end of the fiscal period 2022/4, by the timing of each tenant's rent renewal. The rents equal to market rents are classified into “Between 0% and +10%”.
Note 4: Trends in market rents from the previous fiscal period are shown by trend and by region for the office buildings owned as of the end of the fiscal period 2022/4.
Note 5: The office buildings owned in Note 1 through Note 3 above do not include KDX Kiba Building scheduled to be sold on July 29, 2022, and the office buildings owned in Note 4 do not include Sendai Honcho Building
acquired on April 28, 2022.

18

Construction Expense (actual/budget)
Depreciation and construction expense (actual/budget)
（百万円）

2,548

2,523

2,470
1,960

1,776

1,692

474

1,860

1,696

356

441

1,326

406

1,332

337
1,485

Fiscalperiod
20/4期
20/4
actual
実績

1,420

1,251

Fiscalperiod20/10期
20/10
actual
実績

Fiscalperiod21/4期
21/4
actual
実績

988

Fiscalperiod
21/10期
21/10
actual実績

KDX Ochanomizu Building Renewal of outer wall and entrance
Before
After

2,617

2,631

2,588

2,567

Introduction of value-upgrading work for fiscal period 22/4

396

438
1,464

1,289

Fiscalperiod22/4期
22/4
actual
実績

894

Fiscalperiod
22/10期
22/10
budget予算

Fiscalperiod
23/4期
23/4予算budgetIn order to renew the building's image, large-scale work was carried out toimprove the design of the exterior walls, which had deteriorated over theyears, as well as to renovate the exterior and entrance

Repair / maintenance■■減価償却費
Depreciation ■■修繕費
資本的支出■■ Capex

Repair/renovation work budget and major construction projects for fiscal period 2022/4 (planned)
Estimated amount(Note)(mn yen)

Percentage of total
expense (%)

Value-upgrading works Tenant and common areas

230

17.3

Replacement works

Air-conditioning facilities

195

14.6 KDX Fuchu Building

Other major facilities229

17.2 Pentel Building (elevator), KDX Nagoya Ekimae Building (parking)Eco-friendly works(Installation of LED lightings. , etc)95

7.1 KDX Sapporo Kitaguchi Building、KDX Sakura-dori Building

Outer wall repair

112

8.4 KDX Sakura-dori Building, KDX Tosabori Building

Maintenance/repair works

471

35.4

1,332

100.0

Items

Description of works

Total

Target property
KDX Nishi-Shinjuku Building (sanitary facilities and pantry),
Higashi-Kayabacho Yuraku Building (sanitary facilities and pantry)

19Current Occupancy Status of Low-occupancy Properties
at the End of the Fiscal Period Ended October 31, 2021
• Steadily capture tenants’ needs and improve occupancy rates by conducting an agile and flexible leasing strategy based on thecharacteristics of each property and market conditions
Portus Center Building

22/1

22/2

22/3

22/4

Improved occupancy rate by conducting leasing activities thatemphasize the favorable location characteristics such asaccess to Kansai International Airport, high building grade andspecifications, etc., and by responding flexibly to tenants

Percentage of the portfolio

2.3 %21/10 21/11 21/12•
Percentage of the portfolio

0.8 %

88.3

76.6
22/1

22/2

22/3

•
Percentage of the portfolio

1.2 %

•

21/10 21/11 21/12

22/2

67.0

22/2

22/3

22/4

Occupancy rate during fiscal period (%)
94.4

21/10 21/11 21/12

22/4
•

100.0

22/1

100.0

94.6

22/2

22/3

22/4

Conducted previews and leasing campaigns to attract a wide
range of prospective tenants; achieved full occupancy

Percentage of the portfolio

1.2 %KDX Shinbashi Building Occupancy rate during fiscal period (%)
77.7

22/1

0.9 %

89.0

KDX Ochanomizu Building Occupancy rate during fiscal period (%)
81.3

Percentage of the portfolio

22/1

62.0

Increased occupancy rate by widely promoting the benefits of
TurnKey Office, which is fully furnished and decorated, using
new tools such as web ads in addition to the dedicated website,and synergizing with the leasing campaign

100.0

Occupancy rate declined to 76% due to cancellations of several
floors, however, captured relocation demand due to thereconstruction of neighboring buildings, resulting in fulloccupancy

56.9

21/10 21/11 21/12•

KDX Tosabori Building

Occupancy rate during fiscal period (%)
88.3

91.8
51.9

21/10 21/11 21/12•

Occupancy rate during fiscal period (%)

90.9

90.6

87.2

KDX Kojimachi Building

KDX Iidabashi Building

Occupancy rate during fiscal period (%)

22/3

85.7

81.4
21/10 21/11 21/12

22/4

Occupancy rate temporarily dropped to 77% due to thecancellations caused by the cost review and the expansion of
remote work, however the occupancy rate improved due to thesuccess of measures such as the relocation in the building andmatching the demand for leased space with the demand forleased space
The number of inquiries is increasing due to the large-scalerenovation of the exterior walls and entrance, etc. Aim to further
improve the occupancy rate•
Percentage of the portfolio

1.1 %

22/1

22/2

84.7

84.7

22/3

22/4

One section was contracted and the occupancy rate improved
through floor splits and active leasing campaigns. For theremaining sections, aim to achieve full occupancy by leveraging
the location's convenient accessibility near the station anddeveloping leasing activities targeting the needs of office forshop-visit type tenantsNote: Percentage of the portfolio is calculated by dividing the leasable area of the property as of the end of April 30, 2022 by the leasable area of all 96 office buildings owned at the same time, rounded to one decimal place.
The same applies hereinafter.

20

Leasing Focus Properties for the Fiscal Period Ending October 31, 2022
Portus Center Building••
Percentage of the portfolio

2.3 %

•

Higashi-Kayabacho
Yuraku Building••
Percentage of the portfolio

0.9 %KDX Fuchu Building••
Percentage of the portfolio

2.1 %Occupancy rate
as of the end of
April 2022

Estimated
occupancy rate
as of the end of
September 2022

90.9%

71.8%

A total of 666 tsubo is expected to be cancelled after May
2022
Due to the location and the success of ongoing flexible andagile leasing activities, potential tenants for a total of
approximately 365 tsubo (equivalent to approximately 10% of
the occupancy rate) are currently considering contracts
Aim to improve occupancy rate by upgrading LED lighting andinterior specifications of the available sections
Occupancy rate
as of the end of
April 2022

Estimated
occupancy rate
as of the end of
July 2022

100%

64.5%

A total of 470 tsubo on three floors is expected to be cancelledin May 2022 or later due to relocations for consolidation
Through flexible leasing activities that meticulously respond totenant needs, such as floor splits, etc., tenant candidates are
currently considering contracts for a total of approximately 145
tsubo (equivalent to approximately 11% of the occupancy rate)
Occupancy rate
as of the end of
April 2022

Estimated
occupancy rate
as of the end of
December 2022

85.2%

76.3%

As of the end of April 2022, 453 tsubo of space is vacant, and
377 tsubo is expected to be cancelled after July 2022
The property is in a convenient location, a 3-minute walk fromthe station, and through flexible leasing activities that
meticulously respond to tenant needs such as floor division,etc., tenant candidates are currently considering contracts fora total of approximately 569 tsubo (equivalent to approximately
18% of the occupancy rate)

KDX Akihabara Building••
Percentage of the portfolio

0.5 %

•

KDX Musashi-Kosugi
Building••
Percentage of the portfolio

2.6 %KDX Chofu Building••
Percentage of the portfolio

2.4 %

•

Occupancy rate
as of the end of
April 2022

Estimated
occupancy rate
as of the end of
November 2022

100%

56.0%

A total of 304 tsubo on four floors is expected to be cancelled
at the end of October 2022 due to the relocation of tenants
Conduct leasing activities focusing on attracting tenants thatvalue transportation convenience, as the property is directly
connected to the station
Aim to improve occupancy rates by promoting points that arehighly evaluated by potential tenants, such as the rooftop
gardenOccupancy rate
as of the end of
April 2022

Estimated
occupancy rate
as of the end of
October 2022

100%

81.7%

A total of 720 tsubo on two floors is expected to be cancelledby the end of September 2022
Aim to improve occupancy rates by appealing the building's
specifications that can meet diverse tenant needs, such as its
convenient transportation accessibility (1-minute walk from thestation), multiple floor division patterns, and heavy-load areas

Occupancy rate
as of the end of
October 2022

Estimated
occupancy rate
as of the end of
October 2022

100%

83.2%

A total of 603 tsubo of space on two floors is expected to becancelled in October 2022 due to the consolidated relocationof tenants
Planning for value-up work in common areas to improve
design and enhance refreshment space
Aim to increase occupancy rate by appealing to tenants withstrong needs for BCP measures, such as meeting the needs ofwork/residence proximity, location on stable ground that is
resistant to earthquakes, and having an emergency power
generator for tenant use

Note: The estimated occupancy rate is based on the number of units for which cancellation notices have been received from existing tenants or the lease agreements have been executed with a new tenant as of June 9, 2022
(rounded to one decimal place).

21

End-tenants of KDO Office Buildings• The largest tenant occupies 2.3% of total leased floor area and each of tenants other than the top 4 occupies less than 1.0%
List of top end-tenants for office buildings

Average rent for office buildings by area (Note 2)(as of the end of the fiscal period 22/4)
Tenant nameLeasedarea(tsubo)share ofleased floorarea (%) (Note1)

Mitsubishi Heavy Industries,
Ltd.

3,408.4

2.3

Mitsubishijuko Yokohama Bldg.

1,920.0

1.3

KDX Toranomon 1chome Bldg.

1,550.8

1.1

KDX Kawasaki-Emimae
Hon-cho Bldg.

1,424.9

1.0

KDX Chofu Bldg.

Tenant B(Manufacturing)

1,308.0

0.9

KDX Kobayashi-Doshomachi Bldg.

6 JASTEC Co., Ltd.

1,304.6

0.9

KDX Takanawadai Bldg.

1

2 WeWork Japan G.K.
3

Tenant A(wholesale, retail and dining)

4 Japan Pension Service
5

7

Customer relation
telemarketing, CO,LTD

1,279.6

0.9

KDX Higashi Umeda Bldg.

8

Medical Corporation
DOYUKAI

1,135.6

0.8

Koishikawa TG Bldg.

9

Tenant C(service provider)

1,080.1

0.7

KDX Musashi-Kosugi Bldg.

10

Tenant D(wholesale, retail and dining)

912.2

0.6

Harajuku F.F. Bldg.

15,324.2

10.5

Total

Fiscal period
21/4

Fiscal period
21/10

Fiscal period
22/4

16,000 yen

16,000 yen

16,000 yen

5 Central Wards of Tokyo

19,500 yen

19,500 yen

19,600 yen

Tokyo Metropolitan Area
(excluding 5 central wards)

14,400 yen

14,400 yen

14,400 yen

Other Regional Areas

13,000 yen

13,100 yen

13,000 yen

Name of property
Office buildings

Tenant diversification by type of business(based on # of tenants) (Note 3)
Transportation,
Communication(35) 3.0%
Construction(44) 3.8%

Public sector (other)(4) 0.3%
Infrastructure(4) 0.3%
Mining(1) 0.1%

Real estate(48) 4.1%
Finance,Insurance(49) 4.2%
Individual(52) 4.5%
Manufacturing(147) 12.6%# oftenants(1,167)

Service provide(517) 44.3%

Wholesale, Retail, Dining(266) 22.8%

Note 1: Leased area of each end-tenant against total leased floor area of KDO portfolio as of the end of fiscal period 22/4 (rounded to the first decimal place).
Note 2: Average rent is calculated by dividing total amount of contracted rents of office buildings for each area as of the end of each fiscal period by the total leased floor area (rounded down to the nearest hundred yen).
Note 3: The chart shows the breakdown of tenants by type of business based on the total number of tenants in office portfolio (aggregated by name-base) as of the end of fiscal period 22/4 (rounded to the first decimal place).

22Section 5

Financial Status

23

Financial Status
Status of rating

AA

AA-

Average rateof interest-bearing debt

Fixed interest rate ratio

LTV

Financial institutions

94.8％

44.1％

25

-0.05% from previous period

Fixed by interest rate swaps, etc.

Book value basis+8 from previous period

0.84％(Stable)(Positive)

Japan Credit Rating Agency, Ltd.

Balance of interest-bearing debt
and Historical LTV (interest-bearing debt ratio) level (Note 2)

Average interest rate and remaining period to maturity (Note 1)
Weight average interest rate (incl. up-front fee)
平均金利（融資実行手数料を含む）

Balance of
有利子負債残高

0.97%
0.94%

0.94%
0.89%
0.84%

0.8
Averagecurrent
maturity (year)

LTV（帳簿価額ベース）
LTV (book value basis)interest-bearing debt

Endof fiscal
20/4期末period 20/4

End of fiscal
20/10期末

period 20/10

Endof fiscal
21/4期末period 21/4

Endof fiscal
21/10期末
period 21/10

Endof fiscal
22/4期末period 22/4

4.5

4.5

4.7

4.4

4.1

43.9%

43.4%

43.6%

44.1%

36.5%

36.1%

36.0%

35.7%

End
of fiscal
20/4期末period 20/4

Endof fiscal
20/10期末
period 20/10

Endof fiscal
21/4期末period 21/4

Endof fiscal
21/10期末
period 21/10

Endof fiscal
22/4期末period 22/4

192.0

201.7

198.7

198.7

205.1

42.9%

6
5
4
3
2
1
0

35.8%

Balance ofinterest-bearing
debt (bn yen)

LTV（鑑定評価額ベース）
LTV (appraisal value basis)

32.0%

Balance of interest-bearing debt by maturity (as of the end of fiscal period 2022/4)
0.87%

1.25%

0.80%

0.58%

0.96%

1.04%

1.11%

0.94%

0.76%

0.69%

0.86%

0.97%

21.60

(bn yen)
11.45
1.00
1.80
8.65

Fiscal22/10期

11.60

9.50

12.20

12.80

12.05

2.00

2.00

2.00

6.80
4.80

9.50

10.20

10.80

10.05

12.30

14.10

15.50

15.20

2.00

2.00

16.20

0.88%

12.30

13.50

13.20

0.77%

17.10

15.20

FiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscal23/4期
23/10期
24/4期
24/10期
25/4期
25/10期
26/4期
26/10期
27/4期
27/10期
28/4期
periodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiod
23/4
23/10
24/4
24/10
25/4
25/10
26/4
26/10
27/4
27/10
28/4
22/10
■ Long-term borrowings ■ Short-term borrowings ■ Corporate bonds ◆ Average interest rate (excl. short-term borrowings)

17.10

7.85

6.80

7.85

Fiscal28/10期period
28/10

0.83%

0.90%

The commitment line
agreement
Total 9.0 bn yen

1.00

21.60
14.10

0.85%

Fiscal29/4期
period
29/4

Fiscal29/10期period
29/10

5.00

6.80

1.00
4.00

Fiscal30/4期
period30/4

Fiscal30/10期period
30/10

3.90
3.90

Fiscal31/4期
period31/4

Note 1: Average interest rate and borrowing period are the weighted average 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 andthe average borrowing period rounded to the first decimal place).
Note 2: LTV (book value basis) is calculated by dividing the balance of interest-bearing debt by the amount of total assets as of the end of each fiscal period. LTV (appraisal value basis) is calculated by dividing the balance ofinterest-bearing debt by the sum of the amount of total assets and appraisal profit/loss of owned properties as of the end of each fiscal period (rounded to the first decimal place).

24

Financial Status (the End of the Fiscal Period Ended April 30, 2022)
Results of borrowings during the fiscal period 2022/4

Status of debt financing
Classification

Balance•

Percentage

Total refinancing of 18.7 billion yen
Before refinance

After refinance

Short-Term Borrowings

8,600 mn yen

4.2%

Long-Term Borrowings

183,550 mn yen

89.5%

Average interest rate

0.70%

0.40%

192,150 mn yen

93.7%

Average borrowing term

4.2 years

3.7 years

13,000 mn yen

6.3%

205,150 mn yen

100.0%

Total borrowings
Investment
Corporation Bonds
Total Borrowings andInvestment Corporation Bonds•

Honcho Building
Conditions

Outstanding borrowings by financial institutions

2.4%
4.6%
5.9%
9.8%

9.8%
22.6%

Total
borrowings
from financial
institutions
192.1 bn yen

19.4%

11.4%
14.1%

Financial institutions

17

The end of fiscal
period 2021/10

25

The end of
April 2022

■ Sumitomo Mitsui Banking
43,400 mn yen■ MUFG Bank
37,300 mn yen■ Development Bank of Japan 27,050 mn yen■ Mizuho Bank
21,950 mn yen■ Sumitomo Mitsui Trust Bank 18,900 mn yen■ Resona Bank
11,250 mn yen■ Aozora Bank
8,900 mn yen■ Mizuho Trust & Banking
4,600 mn yen
The 77 Bank
2,000 mn yen
2,000 mn yen
The Bank of Fukuoka
New Shinsei Bank, Ltd.
2,000 mn yen
The Norinchukin Bank
1,800 mn yen
The Nishi-Nippon City Bank 1,700 mn yen
Sumitomo Life Insurance
1,500 mn yen
Company
The Musashino Bank, Ltd.
1,000 mn yen
The Hiroshima Bank
1,000 mn yen
New The Dai-ichi Life
1,000 mn yen
Insurance Company,
Limited
New Nippon Life
1,000 mn yen
Insurance Company
The Higashi-Nippon Bank,
800 mn yen
Limited
San ju San Bank,Ltd.
500 mn yen
New Daishi Hokuetsu
500 mn yen
Bank, Ltd.
New The Shizuoka Bank, Ltd.
500 mn yen
New The Chugoku Bank, Ltd.
500 mn yen
New The Yamaguchi Bank, Ltd
500 mn yen
New Daiwa Next Bank, Ltd.
500 mn yen

New borrowings totaling 6.4 billion yen for acquisition of Sendai

22.6%
19.4%
14.1%
11.4%
9.8%
5.9%
4.6%
2.4%
1.0%
1.0%
1.0%
0.9%
0.9%
0.8%
0.5%
0.5%
0.5%
0.5%
0.4%
0.3%
0.3%
0.3%
0.3%
0.3%
0.3%

Average interest rate

0.29%

Average borrowing term

1.9 years

Issue status of investment corporation bonds(total 13.0 bn yen)
Corporate bonds

IssuedperiodIssuedamountInterest
rate

Term

6th bonds

2014/7

2.0 bn yen

1.18%

10 years

7th bonds

2016/4

1.0 bn yen

0.90%

12 years

8th bonds

2017/7

1.0 bn yen

0.26%

5 years

9th bonds

2017/7

2.0 bn yen

0.64%

10 years

10th bonds (green bonds)

2019/22.0 bn yen

0.39%

5 years

11th bonds (private
placement bonds)

2020/1

2.0 bn yen

0.25%

5 years

12th bonds (green bonds)

2020/10

1.0 bn yen

0.61%

10 years

13th bonds

2021/7

2.0 bn yen

0.18%

5 years25

Section 6
Initiatives for Sustainability

26

Initiatives for Sustainability ~ Highlight
Initiatives in fiscal period 2022/4

Initiatives in fiscal period 2022/10 and thereafter

Environment

Established greenhouse gas (GHG) emission
reduction targets toward carbon neutrality by 2050
GHG emission reduction targets(Compared to fiscal year 2013(per unit))

In fiscal year 2030

By 2050

50% reduction

Carbon Neutrality

Disclosure of analysis on climate change
in line with TCFD recommendations•

Analysis of financial impacts of climate

Installation of LED lightnings
in tenant area••

Introduction ofeffectively renewable energy•(+13 properties from 2021/10 period)••

Expected to reduce 244 t-CO2

Newly acquired for 5 properties in total(leasable floor area ratio: 64.4% in total,

Expected to reduce 6,568t-CO2

SocialIntroduced in approximately 5,900 tsubo••

Governance

Provided blood donation sites•

free of charge to the Japanese
Red Cross Society

Additional acquisition of investment units
by sponsor (same boat investment)

Installation of bicycle and••at a total of 14 properties

9,163 units of investment units of the Investment
Corporation (holding ratio is 3.60% of the total
units issued and outstanding after the acquisition)

Promote acquisition of environmental certifications
for properties (target of over 70% of total floor
area)

•

Promote switchover to electricity derived from
effectively renewable energy sources•

Promote installation of LED lighting

Green finance

Kenedix, Inc., a shareholder of the AssetManagement Company, has additionally acquired

Initiatives to expand disclosure information based

Continuous environmental initiatives

A female supervisory director was newly appointed

electric kickboard sharing ports

Third-party assurance of GHG emissions, energy

on TCFD+7.3% from 2021/10 period)

Promotion of diversity

Separate disclosure of GHG emissions for Scopeuse, and water consumption

Promotion of acquisitionof environmental certifications

Introduced at a total of 13 properties

Contribution to society•

1, 2, and 3+2.8% from 2021/10 period)

scenarios•

Enhanced transparency of disclosure(leasable floor area ratio: 35.6% in total,change based on 4゜C and 1.5゜C

•

ESG

•

Green Bond Framework is to be updated to Green
Finance Framework•

Execute green finance27

Initiatives for Sustainability ~ Initiatives for Environment
Established GHG emission reduction targets
toward carbon neutrality by 2050

GHG emissions (Note 2)••

Established GHG emission reduction target as of March 23, 2022
GHG emission
reduction targets(Compared tofiscal year 2013 (per unit))

In fiscal year 2030

By 2050

50% reduction

Carbon Neutrality

promote the introduction of electricity derived from effectively
renewable energy sources and LED lighting(Intensity：t-CO2/m2)

Disclosed analysis on climate change
in line with TCFD recommendations•

To achieve GHG emissions reduction targets, continue to actively

Disclosed analysis of financial impacts of climate change based on 4゜C and1.5゜C scenarios. Disclosed medium-term (2030) and long-term (2050)

0.065110.06146

financial implications

Promoted initiatives to reduce GHG emission(GHG emission：t-CO2)

Introduction of effectively renewable energy•

45,204Since February 2022, effectively renewable energy has been installed in 12
properties. As a result, a total of 13 properties have already installed. This
introduction is expected to reduce GHG emission by 6,568 t-CO2

Installation of LED lighting in tenant area (Note 1)•

LED lighting in common areas of properties undersingle ownership is almost complete. Going forward,
focus on installation of LED lighting in tenant areas•

Installed LED lighting in approximately 5,900 tsubo of
tenant area. Annual power consumption in the areas
where LED lighting was installed is expected to be
reduced by approximately 62%, and 244t-CO2 interms of GHG emission

30,089The ratio ofconverting lighting
in common area

94.6%
The ratio ofconverting lighting
in tenant area

35.6%(+2.8% from 2021/10 period)

Note 1: LED lighting is calculated as a percentage of total floor area for common areas and a percentage of leasablearea for tenant areas.

2013

2014

2015

2016

GHG排出量emissions■■ GHG

2017

2018

2019

2020

2021

Intensity
GHG排出原単位

Note 2: GHG emissions are calculated by the Asset Management Company based on theemission factor (adjusted emission factor) of the electric utility companies in the Ministry of
the Environment's "Greenhouse Gas Emissions Calculation, Reporting and Publication
System" for the period from April of each year to March of the following year. The
calculation method of GHG emissions has been changed since the fiscal period 2022/4,
and therefore, the figures are different from those disclosed prior to the fiscal period
2021/10.

28

Initiatives for Sustainability~ Environmental Certification and Evaluation
GRESB Real Estate Assessment

Acquisition status of environmental certification(as of April 30, 2022)• First J-REIT to participate in the 2011

DBJ Green Building Certification

survey• Newly acquired 4 stars for KDX Toyosu Grand Square in January• Acquired "Green Star" rating for 10

2022

consecutive years and the 2nd-highestrated “4 Stars” in GRESB Rating 2021
Acquired the highest “A” Level
for Public Disclosure on ESG

Total number ofproperties

26 (+1 from2021/10 period)

★★★★

4

★★★

13

★★

9

Certification for CASBEE for Real Estate
Acquisition of environmental certification(as of April 30, 2022) (Note)• Newly acquired Rank S for Mitsubishijuko Yokohama Buildingin March 2022

• The status of properties with DBJ Green Building Certification,

Total number ofproperties

Certification for CASBEE for Real Estate or/and BELS
Certification is as follows• Aim to acquire the certifications for more than 70% of properties
Percentage of theportfolio

Numbers of the properties
with certifications

64.4%

47 properties(+7.3% from 2021/10 period)(+5 properties
from 2021/10 period)

Note: If a single building has acquired multiple environmental certifications or evaluations, it is counted
as one property. The total floor area ratio is calculated by dividing the total floor area of the entire
portfolio by the name of acquired properties.

25 (+4 from2021/10 period)

Rank S

11

Rank A

14

BELS Certification• Newly acquired 4 stars for KDX Ochanomizu Building in
December 2021
Total number ofproperties

5 (+1 from2021/10 period)

★★★★

1

★★★

3

★★

1

29

Initiatives for sustainability ~ Contribution to society
Contribution to communities

Introduced tenant relations system "Connect Square"Support for the Japanese Red Cross Society• As of April 30, 2022, the system had been introduced in 71• Provided the location for the blood donation site

properties for which Kenedix Property Design is entrusted

in KDX Hamamatsucho Place free of charge towith property management services, and more than 600

the Japanese Red Cross Society

tenants had begun using the system

Installation of bicycle and electric kickboard sharing• Provided locations for the sites at a total of 14
properties for bicycle and electric kickboard
sharing services• Provided tenant employees and residents withan environmentally friendly and diverse meansof transportation, contributing to improved
convenience

Support for the activities of the United Nations UNHCR Association• Broadcasting PR videos using digital signage,
and provided the sites for the United Nations• Aim to further improve relationships with tenants by
publicizing ESG initiatives, encouraging participation invarious campaigns, posting disaster prevention maps, andother measures

What is Connect Square?
Website portal developed to improve the efficiency of routine
tasks of tenant administrative staff and PM company staff
through digital transformation (DX) and to establish close
collaboration between them•Campaign to support refugees free of charge

creates various application forms by entering

at the following 3 properties in the fiscal period

necessary information on the website

2022/4•
Property nameNovember 2021

Senri Life Science Center Building

November 2021

KDX Karasuma Building

April 2022

Consolidated PM company FAQs and inquiry
form on the website

Term

KDX Sakura-dori Building

Implemented a function that automaticallyConnect Square Website•

Reduce tenant work and time costs•

Improve accessibility to information provided
by the PM company

30

Initiatives for Sustainability ~ Governance and Other Initiatives
Promotion of diversity in management•

One female supervisory director was appointed following approval at thegeneral meeting of unitholders held on January 28, 2022, and further
diversified the Investment Corporation’s management
Director and CEO
Hikaru Teramoto
Supervisory Director
YoshihiroMorishima

Licensed realestate appraiser

Seki
Takahiro

LawyerAkiko
TokumaCertified public
accountant

Since November 2021, the sponsor, Kenedix,

Number of investments

Inc., has additionally acquired 9,163 units of

15,421 units

investment units of the Investment
Corporation (as of the end of the fiscal period2022/4)•Further align unitholders' interests and theKenedix Group’s interest(as of the endof the fiscal period 2022/4)

Shareholding ratio

3.6 %(+2.1% from2021/10 period)

Expansion of disclosure•

Disclosed GRI Standard on the web to enhance the searchability ofsustainability-related information•

set forth basic investment management guidelines, including
investment policy, related party transaction rules, distribution policy
and disclosure policy, regarding the asset management of theInvestment Corporation• Furthermore, made decision of property acquisition, according toinvestment policy set forth in the management guidelines and related
party transaction rules• The decision-making flow for establishing and revising themanagement guidelines and asset management plans, etc. and thatas follows
Preparation of
proposal

Office REIT Department

Confirmationof proposal

Compliance Officer

Deliberation
and resolution

Compliance Committee

Deliberation
and resolution

Proactively disclosed data related to employee diversity andemployment, one of the Asset Manager's stakeholders•• Created management guidelines of the Investment Corporation, andpertaining to acquisition and sale of assets are established in principle

Additional acquisition of investment units by sponsor•

Decision-making process with transparency
and check-and-balance system

Updated and further enhanced the content of the Sustainability Report

Deliberation
and resolution

Disapprovedor remand

Outside member
Asset Management Committeeof Office REIT Department
Outside member

KDO Board of Directors

Supervisory Director
Licensed Real Estate Appraiser/
Lawyer / Certified public accountant

31

Section 7
Future Initiatives

32

Future Initiatives
Return to Unitholders

External Growth• Focusing on finding quality
acquisition opportunities amid thecontinuing difficult environment for
property acquisitions• Aim to improve portfolio quality
through asset reshuffling• Stabilize distribution level by utilizing
retained earnings and gains on sales ofreal estate• Consider acquisition of own investment
units depending on cash on hand andthe level of investment unit price

Aim to Enhance
Unitholder Value

Internal Growth• Aim to maintain and improve
occupancy rates by steadily capturing
tenant needs through flexible andagile leasing strategies based on thecharacteristics of the properties andthe surrounding market conditions

Financial Strategy• Reduce interest costs throughrefinancing• Maintain a high level of fixedinterest rate ratios and continue tomanage finances with maturity
diversification

Sustainability• Take the initiatives to disclose
information based on TCFD
• Reduce GHG emissions throughintroduction of electricity derived fromefficiently renewable energy sources
and promotion of LED lightnings

33Disclaimer

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

34

35