Table of Contents
Section 1

Management Highlight

P. 2

Section 2

Financial Results and Earning Forecasts

P. 4

Section 3

Management Status

P. 10

Section 4

Financial Status

P. 22

Section 5

Initiatives for Sustainability

P. 26

Section 6

Future Initiatives

P. 29

1

Section 1
Management Highlight2

Management Highlight
Return to Unitholders
2022/10 period
DPU

14,488 yen

Finance
Period over period+3.5%
Compared to initial forecast +2.4%•

Acquisition and cancellation of own investment units(4,295 units, approx. 3.0 billion yen) during 22/10 period

Sale 1.6 bn yen

22/4 period

KDX Sendai
Honcho Building
6.3 bn yen
22/10 period

Edobashi Building
9.6 bn yen

Assetreshuffling

KDX Kiba Building
1.6 billion yen(July 29, 2022)(June 30, 2022)

Shionogi Kobe
Building
3.4bn yen

•

97.8%

-0.5% from the endof previous period

Monthly rent increase+1.3% from the end of

previous periodprevious period

Gains on sale ofreal estate•

Received the environmental certifications for 10 properties(Ratio of certified properties: 70.3% in total,+5.9% from the end of previous period)

Provided amount ofreserve for
reduction entry•

Initiatives to reduce GHG emissions

240 mn yen

Although the vacancy rate was high in the fiscal period ended
October 31, 2022, the occupancy rate remained high due toappropriate leasing strategies based on market trends and tenantneeds
As the rent gap narrowed, monthly rents continued to increaseon a net basis due to rent revisions
Occupancy rate

+1 from the end of

45.4%

Acquired “5 Star” (highest evaluation) and “Green Star”(11 consecutive years) in GRESB Real Estate Assessment for 2022

Internal Growth•-0.02% from the end of

26

Sustainability

 Introduced electricity derived from effectively renewable energy at 7 properties
 Installed LED lightning in 4,600 tsubo of tenant area
(Ratio based on leasable floor area: 39.3%,+3.7 from the end of previous period)

304 mn yen(August 1, 2022)

LTV(book value basis)•

736 mn yen

AUM+17.8 bn yen(April 28, 2022)

Annual NOI increase(estimated)

Financial
institutions

previous period

AUM expanded to 457.0 billion yen due to recent asset reshuffling
Acquisition 19.4 bn yen

Average rate ofinterest-bearing debt

0.82%

External Growth•

Reduced interest rate levels and expanded lender formations•

Enhanced transparency of disclosure(Disclosed of GHG emissions by scope and obtained third-party
assurance for the data of GHG emissions etc.)•

Established a green finance framework and procured 9.2 billion yen
in green loans•

Human capital development(Investment ownership program and engagement survey)•

Implemented a 2-for-1 unit split to increase liquidity(November 1, 2022)

Due to tenant
replacements

2.3 mn yen

Due to rent revisions

Due to tenant replacements
and rent revisions

2.4 mn yen-0.1 mn yen

Others3Section 2
Financial Results and Earning Forecasts

4

Financial Result of the Fiscal Period Ended October 31, 2022
(mn yen)
22/4
Items

Actual22/10

Performancecomparison

Forecast

ActualChangeC-A

C-B(announced
on June 14, 2022)

Comparison to 22/4 period■ Operating revenue● Existing properties
・ Rent / common area charge
・ Utilities revenue
・ Other rental and operating revenues
・ Gains on sale of real estateB
15,95915,673
239
46
8,845

C
16,266
15,960
240
64
8,886

4,721

5,037

5,076

354

38 ● The sold property in 22/10 period

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

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

－
2,631
1,179
976
7,379
0
928
908
6,452
6,451

－
43
25
14
-48
0
-2
1
-45
-45

－
0
3
21
265
0
4
5
260
260

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

10,356

10,635

10,884527

249

10,763

11,074

11,283

519

209

7,768

8,003

8,253

484

(announced on June 14, 2022)
249 ■ Operating revenue

Utilities revenue
Utilities expense

1,027
1,115

1,179
1,386

1,268
1,445

241
329

89
58

497

127

304

-192

177

5,999
14,00015,161
8,314
428,510
98.3%

6,063
14,15014,446
8,582
428,510
97.5%

6,146
14,48815,133
8,841
424,215
97.8%

146
488
-28
527
-4,295116.0 bn yen
800,000 yen+7.3 bn yen+20,000 yen

Operating revenue
Rental and other operating revenues
Gains on sale of real estate
Dividend income
Operating expense
Rental and other operating expenses(excluding depreciation)
Loss on sale of real estate
Depreciation
General and administrative expenses(Asset management fee)
Operating income
Non-operating income
Non-operating expense(Interest expenses, etc.)
Ordinary income
Net income

Provision (+) / reversal (-)
of reserve for reduction entry
Total distributions
DPU (yen)
EPU (yen)
FFO (Note 2)# of total units outstanding (Note 3)
Occupancy rate (office building)
Unrealized profit in portfolio
NAV per unitA
15,891
15,078
770
42
8,463

22/10

Actual –forecast
comparison
Change108.6 bn yen
780,000 yen

375
882
-529
22
423

Note 1: Rental NOI = Operating revenue – Gains on sale of real estate– Dividend income – Rental and other operating expense(excluding depreciation)
Note 2: FFO = Net income + Depreciation – Gains on sale of real estate + Loss on sale of real estate
Note 3: Acquired and cancelled own investment units (4,295 units) during the fiscal period ended October 31, 2022.

306
287● The acquired properties
1
in 22/4 period and thereafter
17
・ Rental and other operating revenue
41
・ Rental and other operating revenues
・ Gains on sale of real estate■ Operating expense● Existing properties
・ Utilities expense
・ Taxes● The acquired properties
in 22/4 period and thereafter・ Rental and other operating expenses● The sold property in 22/10 period
・ Rental and other operating expenses+375 mn yen-228 mn yen+191 mn yen+207 mn yen+121 mn yen (Restoration work revenue +71,
Hall operation revenue +29)-770 mn yen (Disappearance of gains on sale ofthe partial land of KDX Toranomon
1-chome Building)+389 mn yen+389 mn yen (KDX Sendai Honcho Building +202,
Edobashi Building +134,
Shionogi Kobe Building +52)
+213 mn yen-27 mn yen (KDX Kiba Building -27)+240 mn yen (The sale of KDX Kiba Building)+423 mn yen+301 mn yen+287 mn yen+27 mn yen+131 mn yen+131 mn yen (KDX Sendai Honcho Building +73,
Edobashi Building +35,
Shionogi Kobe Building +22)
-9 mn yen
-9 mn yen (KDX Kiba Building -9)Comparison to the forecast of 22/10 period● Existing properties
・ Rent / common area charge
・ Utilities revenue
・ Other rental and operating revenues

82
338 ● The acquired properties687
in 22/10 period
・ Rental and other operating revenues
259-4,295■ Operating expense

6.8% ● Existing properties
・ Utilities expense
2.6%

・ Repair / maintenance expense● The acquired properties
in 22/10 period
・ Rental and other operating expenses+306 mn yen+253 mn yen+11 mn yen+85 mn yen+137 mn yen (Restoration work revenue +81,
Cancellation penalty +16,
Hall operation revenue +14,
Parking revenue +6）+52 mn yen+52 mn yen (Shionogi Kobe Building +52)
*Decided to acquire
after disclosure of forecast+41 mn yen+19 mn yen+52 mn yen-40 mn yen+22 mn yen+22 mn yen (Shionogi Kobe Building +22)

5

Earning Forecasts of the Fiscal Period Ending
April 30, 2023 and October 31, 2023
(mn yen)
23/4 forecast 23/4 forecast
22/10 actual 22/10 actual
comparison comparison
ChangeChange
B-A
C-B
-33
398
233
378
-240
－
-25
20
458
465

23/4

23/10

ActualA
16,266
15,960
240
64
8,886

Forecast
B
16,232
16,194－38
9,345

Forecast
C
16,631
16,572
－
58
9,810

5,076

5,545

6,026

469

480

－
2,631
1,179
976
7,379
0
928
908
6,452
6,451

－
2,636
1,163
957
6,887
0
904
893
5,983
5,982

－
2,627
1,156
952
6,820
0
924
913
5,896
5,895

－
4
-16
-18
-492
0
-23
-14
-468
-468

－
-8
-6
-5
-66
－
20
20
-87
-87

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

10,884

10,648

10,546-236-101

11,283

11,067

10,919

-215

-148

8,253

8,011

7,918

-241

-93

Utilities revenue
Utilities expense

1,268
1,445

1,484
1,854

1,910
2,302

215
409

425
447

304

-168

-255

-473

-87

6,146
14,48815,133
8,841
424,215
97.8%

6,151
7,250
7,051
8,618
848,430
97.5%

6,151
7,250
6,948
8,523
848,430
97.5%

5
-7238
-8,185-222
424,215

－
0
-103
-95
0

Items
Operating revenue
Rental and other operating revenues
Gains on sale of real estate
Dividend income
Operating expense
Rental and other operating expenses(excluding depreciation)
Loss on sale of real estate
Depreciation
General and administrative expenses(Asset management fee)
Operating income
Non-operating income
Non-operating expense(Interest expenses, etc.)
Ordinary income
Net income

Provision (+) / reversal (-)
of reserve for reduction entry
Total distributions
DPU (yen)
EPU (yen)
FFO (Note 2)# of total units outstanding (Note 3)
Occupancy rate (office building)

22/10

Comparison between the actual of 22/10 period
and the forecast of 23/4 period■ Operating revenue● Existing properties
・ Rent / common area charge
・ Utilities revenue
・ Other rental and operating
revenues● The acquired properties
in 22/10 period
・ Rental and other operating
revenues● The sold property
in 22/10 period
・ Rental and other operating
revenues
・ Gains on sale of real estate■ Operating expense● Existing properties
・ Utilities expense
・ Taxes・ Brokerage fee● The acquired properties
in 22/10 period
・ Rental and other operating
expenses● The sold property
in 22/10 period
・ Rental and other operating
expenses-33 mn yen+129 mn yen-19 mn yen+211 mn yen-36 mn yen (Hall operation revenue -27,
Cancellation penalty -7)+99 mn yen+99 mn yen (Edobashi Building +45,
Shionogi Kobe Building +54)
-262 mn yen-21 mn yen (KDX Kiba Building -21)-240 mn yen (Disappearance of gains onsale of KDX Kiba Building)+458 mn yen+422 mn yen+411 mn yen+25 mn yen-34 mn yen+56 mn yen+56 mn yen (Edobashi Building +29,
Shionogi Kobe Building +27)
-20 mn yen-20 mn yen (KDX Kiba Building -20)

Comparison between the forecastof 23/4 and 23/10 periods■ Operating revenue
・ Rent / common area charge
・ Utilities revenue
・ Other rental and operating
revenues■ Operating expense
・ Management consignment fee
Note 1: Rental NOI = Operating revenue – Gains on sale of real estate – Dividend income – Rental and other operating expenses (excluding
・ Utilities expensedepreciation)
・ Taxes
Note 2: FFO = Net income + Depreciation – Gains on sale of real estate + Loss on sale of real estate・ Repair / maintenance expense
Note 3: A two-for-one unit split was executed on November 1, 2022.

+398 mn yen+36 mn yen+425 mn yen-82 mn yen (Restoration work revenue -102,
Cancellation penalty -8,
Hall operation revenue +31)+465 mn yen-10 mn yen+447 mn yen+87 mn yen-46 mn yen

6Principal Factors for Changes in DPU• 2022/10 period : DPU increased 2.4% from the initial forecast to 14,488 yen, due to raising NOI through asset reshuffling, acquisition and cancellationof own investment units, etc.
• 2023/4 period : Although NOI is expected to decrease due to rising electricity charges, it will be maintained at the previous period's level of 14,500 yen(7,250 yen after the split) by utilizing the reserve for reduction entry• 2023/10 period : NOI will decrease due to the disappearance of income from restoration expenses, however, DPU will continue to be 14,500 yen (7,250 yen
after the split) by utilizing the reserve for reduction entry(yen)
KDX Sendai Honcho Building +396
Edobashi Building+293
Shionogi Kobe Building+98

KDX Harumi Building +125
KDX Iidabashi Square +90
KDX Iidabashi Building +82
KDX Kiba Building-47

Utilities revenue +569
Utilities expense -777

(Contribution through period)
Edobashi Building+100
Shionogi Kobe Building +98

Utilities revenue
Utilities expense

14,000638

13,362

788

Rental andoperatingrevenues(properties
acquiredsince 22/4
period)NOI +1,244

NOI -557

Utilities revenue +1,003
Utilities expense -1,054(7,250)14,500(Initial forecast)
14,150 yen(7,250)

398

457

85

171

195

603

Rental and78
operating Other
51
34
revenues rental and Rental and
Balance ofother
Othersoperatingutilities
revenues operating revenue andexpenses
expenseBalance of
Othersutilities
revenue andexpense13,897

14,102

14,488
Breakdown of properties
acquired and sold since 22/4 period
KDX Sendai Honcho Building +331
Edobashi Building+256
Shionogi Kobe Building+92
KDX Kiba Building- 55

Disappearance of
restoration work revenue -242

14,50058

14,488320 Rental and 208(Initial forecast)other68
118 14,150 yen 109
operating Balance of
Other
141
Other
expenses utilities
OthersRental andrental andrental and402
revenueandoperatingoperatingoperating Rental andexpenserevenues
revenuesotherrevenues
operatingRental andexpenses
operating
Restoration work revenue +168
revenues

+508
-966

NOI -239

22/4 period
22/10 period
23/4 period
22/4期
22/10期
23/4期(actual)(actual)(forecast)
（実績）
（実績）
（予想）
■ Amount of reversal of reserve for reduction entry ■ Amount of increase from gains on sale of real estate■■ EPU per unit (excl. the amount of reversal of reserve for reduction entry and gains on sale of real estate) ■ Factor for increase ■ Factor for decrease

23/10 period
23/10期(forecast)（予想）

Note: Although a 2-for-1 unit split was implemented on November 1, 2022, the respective per unit figures for 23/4 and 23/10 periods have been converted based on the number of units issued and outstanding at the end of
22/10 period to facilitate comparison (however, actual amounts based on the number of units issued and outstanding after the split are shown in parentheses).

7

DPU per Unit and Balance of Reserve for Reduction Entry
DPU (Note 1) (Note 2)••

Balance of reserve for reduction entry (Note 2) (Note 3)

In 22/10 period, EPU increased significantly due to gains on sale of real estate
and an increase in NOI, hence provided the maximum amount to the reserve
for reduction entry and utilized it to stabilize DPU in the future
Utilize reserve for reduction entry in 23/4 and 23/10 periods to maintain astable DPU level
Increase due to acquisition andcancellation of own investment units(yen)

14,000

Increase due to acquisition andcancellation of own investment units

14,48814,29014,150 263

14,500(7,250)14,29014,150398(199)(7,250)603

Increased provision by 177 million yen in 22/10 period comparedto the initial forecast due to the increase in NOI by external
growth etc.

Provided amount in• To be utilized actively to stabilize DPU over the short term
21/4 period and thereafter(mn yen)Sale ofKDX Kiba Building

4,326

531
638

832

13,362

13,886 14,027 14,488• For temporary decrease in income, incurrence of expenses and others• A temporary decrease in distributions due to large-scale renovation etc.
• For dilution of distributions in the event of public offering during the period

Provided amountuntil 20/10 period

4,630 Reversal

(302)

533

264

14,500•13,619 13,757 14,102

13,897(7,051)(6,948)

168

Provision
304(initial
forcast)
127

3,493

1,137

3,493

4,462

Reversal
255

968

3,493

4,206
713

1,681 yen/unit

3,493

8,235 yen/unit(840 yen/unit)(4,117 yen/unit)

22/4
22/4期
period
実績
Actual

22/10
22/10
22/10
22/10期
22/10期
22/10期periodperiodperiod
当初予想
実績
Initial 修正予想
Revised Actual(22/6/14)
forecast (22/9/22)
forecast(22/6/14) (22/9/22)

23/4
23/4
23/4
23/4期
23/4期
23/4期
periodperiodperiod当初予想
予想
Initial 修正予想
Revised Forecast(22/6/14)
forecast (22/9/22)
forecast(22/6/14) (22/9/22)

23/10
23/10期period予想
Forecast■
Reversal of reserve for reduction entry ■ Increased amount due to gains on sale of real estate■■ EPU per unit (excl. gains on sale of real estate and the amount of reversal of reserve for reduction entry)

Reserveforreduction
entry
per unit

22/4
period
22/4期
実績
Actual22/10
period
22/10期実績
Actual

10,095 yen

10,916 yen

Provided amount until 20/10 period

23/4
period23/4期
予想
Forecast

10,519 yen(5,259 yen)

23/10
period23/10期予想
Forecast

9,916 yen

(4,958 yen)

Provided amount after 21/4 period

Note 1: The amount per unit is calculated by dividing by the number of investment units issued and outstanding as of each fiscal period end.
Note 2: Although a 2-for-1 unit split was implemented on November 1, 2022, the respective per unit figures for 23/4 and 23/10 periods have been converted based on the number of units issued and outstanding at the end of 22/10
period to facilitate comparison (however, actual amounts based on the number of units issued and outstanding after the split are shown in parentheses).
Note 3: Actual and forecasted 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

Note

9

Section 3
Management Status

10

Acquisition of the Property (Shionogi Kobe Building)
It is an office building which can flexibly correspond diverse tenant needs including needs for seeking
small- and medium-sized lots, and expected to be operated stably into the future•••

It is situated adjacent to commercial facilities expanding around Sannomiya (Kobe-Sannomiya) Station and government offices, including the municipal office
Given its 80 parking spaces and proximity to an interchange of the Hanshin Expressway, it is characterized in that preferred by tenants engaging in businesses that require
the comparatively frequent use of vehicles
As of the end of fiscal period ended October 31, 2022, 19 tenants occupied the building. With regularly shaped rental rooms divisible to a minimum of 19 tsubo, it ischaracterized by its flexibility to correspond diverse tenant needs, including those for small and medium sized sections

Shionogi Kobe Building

Location

Kobe, Hyogo

Total floor area

8,501.91㎡

Completion date
Acquisition priceAppraisal value(as of July 1, 2022)

AccessAcquisition date
Occupancy rate

(as of October 31, 2022)

August 1, 2022
95.2%

NOI yield
4.6%(estimated) (Note 1)
NOI yield after
3,450 mn yen
depreciation
3.5%(estimated) (Note 2)
Appraisal
3,610 mn yen
5.1%
NOI yield (Note 3)
Approximately 6-minute walk from Boeki Center Station on the Kobe
New Transit Port Island Line / Approximately 7-minute walk from
Sannomiya-Hanadokeimae Station on the Kobe Municipal Subway
Kaigan Line / Approximately 8-minute walk from Kobe-Sannomiya
Station on the Hanshin LineMay 1992

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 July 1, 2022, divided by the acquisition price.

11

Benefit of Asset Reshuffling• Asset reshuffling contributed to portfolio growth through the acquisition of well-located properties with good tenant diversification, and it
stabilized and improved DPU level by utilizing gains on sale of real estate

Outline of asset reshuffling

Property nameAcquired in 22/4 period

Acquired in 22/10 period

Acquired in 22/10 period

Sold in 22/10 period

KDX Sendai Honcho Building

Edobashi Building

Shionogi Kobe Building

KDX Kiba Building

Location
Acquisition or sale
price
Date of acquisitionor saleTotal floor area
Acquired properties
Acquisition price19.4 bn yen

Sendai, Miyagi

Chuo-ku, Tokyo

Kobe, Hyogo

Koto-ku, Tokyo

6,360 mn yen

9,600 mn yen

3,450 mn yen

1,650 mn yen

April 28, 2022

June 30, 2022

August 1, 2022

July 29, 2022

13,049.82㎡

8,076.42㎡

8,501.91㎡

2,820.64㎡

AUM growth (Note 1)

Annual NOI increase(estimated) (Note 2)

Gains on saleof real estate

Provided amount ofreserve for reduction entry

17.8 bn yenh

736 mn yen

240 mn yen

304 mn yen

Sold property
Asset
Reshuffling

Sale price1.6 bn yen

A

Note 1: The difference between the total acquisition price of the acquired properties and the acquisition price of the sold property (1,580 million yen).
Note 2: The difference between the annual NOI (estimated) for the acquired property and the NOI (actual) for the 21/10 and 22/4 periods for the sold property.

12Occupancy Rate, Turnover Ratio and Trends in Move-ins/outsof Tenants for Office Buildings• Although the vacancy rate was high in the fiscal period ended October 31, 2022, the occupancy rate remained high due to appropriate leasing strategies based onmarket trends and tenant needs• In the fiscal period ending April 30, 2023, although the tenant which occupied the whole building is scheduled to move out, will continue to strive to maintain andimprove occupancy rates through flexible and agile leasing strategies

Occupancy rate, area and number of move-ins/outs and turnover ratio (Note)
Occupancy rate(contracted area based)

Average in fiscal period

99.5

98.1

98.6

97.6

96.7

97.5

93.3

(Numberof movein/out)

(35)
2,365

-2,795-5,160(57)
Turnover
ratio

3.5%

(65)
5,217

(78)
7,648

(64)
4,790

97.5%

98.3

97.8

97.5

95.3

94.7

94.6

Actual average in fiscal period 95.4%

94.7%

(53)
5,179

-6,700(73)-6,463
(63)

4.6%

4.4%

-3,309
(43)

2.3%

23.1%
（9）

22/4
period

17.9%
（7）

62.2%
（28）

28.9%
（13）

Floor reduction

Other/unknown

Free rent period (months)
4.8-6,158(62)-5,563
(42)

4.1%

3.7%

5.3

4.7

4.6 4.9
2.8

2.7

1.8

1.5

5 Central Wards ofTokyo■ Space leased (tsubo)■ Space vacated 200 tsubo or more

20/10 periodSpace vacated less than 200 tsubo (tsubo)
Space leased – Space vacated (tsubo)

4.0

2.7

20/10 period 21/4 period 21/10 period 22/4 period 22/10 period 23/4 period
forecast■

6.1% 16.3%（3） （8）59.0%（23）

22/10 8.9%
period （4）-979-1,484

22.2% 5.6%
（12） （3）

77.6%
（38）

22/10
periodFloor expansion

1,480

1,185

72.2%
（39）

22/4
period

OUTs

94.8

97.9%

Reasons for move-ins/outs

INs

(%)

Occupancy rate
(excl. free rent area)

3.6

3.0

1.3 1.3

Tokyo Metropolitan Area Other Regional Areas(excl. 5 central wards)

21/4 period

21/10 period

22/4 period

22/10 period

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 thendividing 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 23/4 period is the estimate based on the cancellation notice, etc. received by November 30, 2022.

13

Rent Changes upon Tenant Turnover• Under the circumstance of declining market rents, the monthly rent remains almost unchanged on a net basis due totenant replacement, and the monthly rent per unit also remains almost flat
Change in monthly rents
at the time of replacement of tenants

Change in monthly rent unit priceand rate of change at tenant replacement(million yen)

(yen/tsubo)

8.2

8.1

6.7

6.2

3.8
3.0

Total rent
increase
Total rent
decrease-0.1+20.8%
16,292+4.0%

17,192+2.7%
15,875
15,384

2.6
-0.1

-1.4

-5.0

% of the numberof rent increase
contracts upontenant turnover

+8.3%

6.5

6.3

-3.8

-3.9

20/10
20/10期period21/4
21/4期
period21/10
21/10期period22/4
22/4期
period22/10
22/10期period

93.3%

76.3%

60.6%

54.2%

53.1%

17,01816,356-0.2%
15,875 15,851

15,806

13,486

20/10 period
20/10期

21/4 period
21/4期

21/10 period
21/10期

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

22/4 period
22/4期

22/10 period
22/10期Unit
rent for new tenant
新規テナントの賃料単価

Total rent increase - Total rent decrease
賃料増加分－賃料減少分

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.

14

Status of Rent Revisions with Existing Tenants• As the rent gap narrowed, the number of rent increases increased due to persistent negotiations, and monthly rents
continued to increase on a net basis due to rent revisions
Changes in rent upon rent revisions(based on monthly rent)

Status of rent revisions (based on leased floor area) (Note 1)
Rent decrease(6)
2.6%
Exception for
negotiation(Higher thanmarket rent)
(60)
17.3%

(thousand yen)

11,225

5,948

9,992

7,045

3,458
1,667

4,002
615

2,456

2,513

-1,233-1,052-1,946-1,002-216

21/4
period21/4期

21/10
period
21/10期

22/4
period22/4期

22/10
period
22/10期

23/4
period23/4期
onward以降
Confirmed as of

Increase

増賃額
in rent

2,729

Decrease
減賃額
in rent

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

Rent increase
(38)
15.7%

Rent decrease(5)
3.5%
Exception for
negotiation(Higher thanmarket rent)
(85)
34.9%
22/10 period

22/4 period
(276)

7,045

20/10
period20/10期

Rent increase
(34)
20.0%

(256)

No change(Lower thanmarket rent
(176)
60.1%

No change(Lower thanmarket rent)
(128)
45.8%

Negotiation
TargetNegotiation
TargetNumber of rent increase contracts and rent increase rate
都心5区
■ Tokyo central
5 wards 都心5区以外■ Other areas(number of increase/decrease)

November 15,
2022

Rent increase
rate (incremental
average) (Note 2)

38

36

28

24

10

12

20/10 period

21/4 period

10.4%

9.4%

20/10期

21/4期

34
18

38

22

30

12

8

21/10 period

22/4 period

22/10 period

4.7%

6.4%

5.8%

13
5

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).

21/10期

22/4期

22/10期

15

Rent Gap of KDO Office Buildings• While maintaining a net increase in rents at the time of rent revisions, the rent gap continues to narrow due to the impact
of declining market rents
Breakdown of rent gaps (based on monthly rent) (Note 1)
Over 10%Higher thanmarketrent level

Lower thanmarketrent level573 mn yen

4.7

-2.2
-4.3
-10.7

7.1

4.2

57.6%

97

22/10 period

23/4 period

23/4期

89

146
52.6%

105

23/10 period

23/10期

109

106

56.7%

47.1%

74

24/4 period

24/10 period

24/4期

130
17

44.1%

25/4 period
25/4期
onward24/10期以降到来分

Change in market rent of owned properties (Note 4)
Rise (2)(2) 2%(1)
1%-4.2 -6.6

98

130

96

77

Decline(32)-0.6 -2.1

109

119

22/10期

72

126

到来分
到来分
到来分
■ Lowerthan -10% ■-10%~0% ■到来分
0%~+10% ■ Over
+10%

Historical average rent gaps (Note 2)
21.0
19.5
14.4
10.3

72

117

103
Lower thanmarket rent level
52.0%

End22/10期末
of 22/10 period

(%)

42

106

Between -10% and 0%405 mn yen

70

39

Between 0% and 10%

Lower than -10%

(as of the end of 22/10 period, based on monthly rent) (Note 1) (Note 3)(mn yen)

356 mn yen

600 mn yen

Breakdown of rent gaps by rent revision schedule-8.9 -8.7-5.9 -4.6 -3.2

05/10 07/10 09/10 11/10 13/10 15/10 17/10 19/10 21/10 22/10 22/10
05/10期
09/10期
11/10期
13/10期
15/10期period 07/10期
period period
periodperiodperiodperiod17/10期
period 19/10期
period 21/10期
period 22/10期
period

(23)
24%

(8)
9%
22/4
period
(95)

(16)
17%

Decline
(24)

(24)
25%
(21)
22%

Rise
(0)

(20)
21%

Flat
(61)

(20)
21%

(4)
4%
22/10
period
(95)

(27)
29%

(24)
25%

Flat
(71)

■ 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 22/10 period 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 assessment.
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 22/10 period for office buildings owned as ofthe end of 22/10 period, by the timing of each tenant's rent revision. 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 22/10 period.

16Construction Expense (actual/budget)• To further enhance the profitability of the portfolio by maintaining and improving tenant satisfaction and property competitiveness through the timely andappropriate implementation of construction work
• Conducted a customer satisfaction survey of tenants in August 2022 and confirmed 92% of the tenants intend to continue occupancy

Depreciation and construction expense (actual/budget)

Renovation project for 2023/4 period

Renovation work to improve the design of the entrance and facade,which has deteriorated over the years, is scheduled to be carried out
to refresh the image of the entrance(mn yen)Renovation of entrance of Edobashi Building
1,696

356

441

1,326

1,610

406

1,264

337
1,420

1,251

20/10
period20/10期
actual実績

2,627

Before

1,776

1,692

2,636

2,631

2,588

2,567

2,548

2,523

21/4
period
21/4期
actual

実績

988

21/10
period
21/10期
actual

実績

419

1,431
373

398
1,289

22/4
period22/4期
actual

実績

866

22/10
period
22/10期
actual

実績

1,191

1,057

23/4
period23/4期
budget23/10
period23/10期
budget

予算

After (perspective drawing)

Renovation of facade of KDX Kanda Ekimae Building
BeforeAfter (perspective drawing)

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

Repair/renovation work budget and major construction projects for 2023/4 period (planned)
Items

Description of works

Estimated amount Percentage of total(mn yen)expense (%)

Target property
KDX Fuchu Building (sanitary facilities and pantry),
Edobashi Building (entrance, sanitary facilities and pantry)

Value-upgrading works

Tenant and common areas

474

29.4

Replacement works

Air-conditioning facilities

84

5.2 KDX Tosabori Building, KDX Sendai Honcho Building

Other major facilities

416

25.8

Eco-friendly works(Installation of LED lighting, etc)

52

3.3 KDX Shinjuku 286 Building, KDX Nagoya Sakae Building

Outer wall repair

70

4.4 KDX Shin-Osaka Building

Maintenance/repair works

514

31.9 Harajuku F.F. Building (plumbing equipment)

Total

1,610

100.0

Portus Center Building (elevator),
KDX Nagoya Ekimae Building (electric transformer)

17

Current Occupancy Status of Leasing Focus Properties
for the Fiscal Period Ended October 31, 2022
• Steadily capture tenant needs through flexible and agile leasing strategies that take into account the characteristics of each property andmarket conditions, and expect to recover and improve occupancy rates
Portus Center Building

KDX Akihabara Building

Occupancy rate during fiscal period (%)
90.9

82.8

83.6

86.1 82.3

Occupancy rate during fiscal period (%)
100

82.3

100
The occupancy rate was initially expected to decline to
56.0% in November 2022, however, it is expected toreach full occupancy by the end of January 2023

71.8 (Note 2)

22/4•

Percentage of the portfolio

2.3% (Note 1)

Higashi-Kayabacho
Yuraku Building

22/5

22/6

22/7

22/8

22/4

22/9 22/10

Although the occupancy rate was expected to decline to 71.8% dueto the cancellation of approximately 666 tsubo, succeeded inleasing up a total of 4 tenants (approximately 365 tsubo) throughflexible and agile leasing activities, and maintained the occupancy
rate in the 80% range

Occupancy rate during fiscal period (%)
100
77.2
64.5

100

•

Percentage of the portfolio

0.5%

KDX Musashi-Kosugi
Building

22/5

22/6

22/7

22/8

22/9 22/10

The occupancy rate was expected to fall to 56.0% by the end of
November 2022 due to the cancellation of approximately 304 tsubo,
however, succeeded in filling the floors promptly by offering
competitive conditions and implementing a campaign

Occupancy rate during fiscal period (%)
100
81.7
Expected to rebound to 86.6% at the end of December 2022

22/4•

Percentage of the portfolio

0.9%

KDX Fuchu Building

22/5

22/6

22/7

22/8

22/9 22/10

Although the occupancy rate declined to 64.5% due to thecancellation of 3 floors (approximately 470 tsubo), captured
relocation needs from the neighborhood by setting competitive
offer conditions and conducting sales activities utilizing campaigns,
and achieved full occupancy•

Percentage of the portfolio

2.6%

KDX Chofu Building

Occupancy rate during fiscal period (%)

22/5

22/6

22/7

22/8

Occupancy rate declined to 81.7% following the cancellation of
approximately 720 tsubo in September 2022, however, it isexpected to recover to 86.6% after lease-up of 194 tsubo by theend of December 2022

100.0

85.3

99.1
83.2

Expected to be fully occupiedby the end of December 2022
•

22/4

22/5

22/6

22/7

22/8

(Note 2)

22/4

22/9 22/10

Although the occupancy rate was expected to decline to 76.3% at
the end of December 2022, took advantage of its favorable
location, a 3-minute walk from the station, and flexibly responded
to tenant needs, such as floor splitting, to improve the occupancy
rate

22/9 22/10

Occupancy rate during fiscal period (%)

93.4

88.6

85.2

22/4

•

22/5

22/6

22/7

22/8

22/9 22/10

The occupancy rate was expected to decline to 83.2% at the endof October 2022 due to the cancellation of 2 floors totaling 603
Percentage of the portfolio
tsubo, however, the occupancy rate recovered to 99.1% as 570
Percentage of the portfolio
tsubo were leased by capturing the floor expansion needs of the
2.4%
2.0%
tenant in the building
Note 1: Percentage of the portfolio is calculated by dividing the leasable area of the property as of the end of October 31, 2022 by the leasable area of all 97 office buildings owned at the same time, rounded to one decimal place.
The same applies hereinafter.
18
Note 2: The figures are the initial future occupancy rates calculated based on the assumed tenant move-out rate at the time of the announcement of financial results for 22/4 period.

Leasing Focus Properties for the Fiscal Period Ending April 30, 2023
Portus Center Building

KDX Musashi-Kosugi Building
Occupancy rate
as of the end of
October 2022

Estimated
occupancy rate as ofthe end of April 2023

Occupancy rate
as of the end of
October 2022

Estimated
occupancy rate as ofthe end of June 2023

82.3%

80.8%

81.7%

82.5%

Vacant area:
approx. 666 tsubo

Percentage of the portfolio

2.3%• Occupancy rate is expected to decline again due tothe cancellation of 50 tsubo at the end of March2023• Aggressively conduct previews and other leasing
campaigns to uncover tenant needs

Vacant area:
approx. 688 tsubo

Percentage of the portfolio

2.6%• Aim to improve the occupancy rate by upgrading
LED lighting and interior specifications in the vacant
floorsKDX HigashiShinagawa Building

1.4%• Aiming to improve occupancy rate by promotingbuilding specifications that can meet various tenantneeds, such as transportation convenience with astation only a minute's walk away and areas that canaccommodate heavy loads

KDX Kawasaki-Ekimae
Hon-cho Building
Occupancy rate
as of the end of
October 2022

Estimated
occupancy rate as ofthe end of June 2023

Occupancy rate
as of the end of
October 2022

Estimated
occupancy rate as ofthe end of March 2023

100%

69.0%

100%

0%

Vacant area:
approx. 667 tsubo

Percentage of the portfolio• Occupancy rate recovered to 86.6% in December
2022, however, it is expected to decline to 82.5% inJune 2023 due to the cancellation of 162 tsubo• A tenant currently leasing 667 tsubo on multiple
floors is scheduled to move-out due to expansion
and relocation at the end of May 2023. The
occupancy rate is expected to decline to 69.0%• Aim to fill the vacancy as soon as possible byflexibly responding to floor splits and othersolicitation conditions

Vacant area:
approx. 1,550 tsubo• The tenant which occupied the whole building isscheduled to move out at the end of February 2023
Percentage of the portfolio

1.0%• Considering various measures to increase unitholder
value, including leasing activities such as leasing of
the whole building and multi-tenanting

Note: The estimated occupancy rate is calculated to reflect those for which a cancellation notice has been received from the occupying tenant or a lease agreement have been executed with a new tenant as of November 30,
2022 (rounded to one decimal place).

19

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 5 occupies less than 1.0%
List of top end-tenants for office buildings (as of the end of 22/10 period)
Tenant nameLeasedarea(tsubo)Share ofleased floorarea (%) (Note1)

1 Mitsubishi Heavy Industries, Ltd.

3,408.4

2.3

Mitsubishijuko Yokohama Bldg.

2 WeWork Japan G.K.

1,920.0

1.3

KDX Toranomon 1chome Bldg.

1.0

KDX Kawasaki-Emimae
Hon-cho Bldg.

Tenant A
3 (wholesale, retail and dining)(scheduled to move out
on February 28, 2023)

1,550.8

Average rent for office buildings by area (Note 2)
21/10 period

22/4 period

22/10 period

16,000 yen

16,000 yen

16,000 yen

5 Central Wards of Tokyo

19,500 yen

19,600 yen

19,600 yen

Tokyo Metropolitan Area
(excluding 5 central wards)

14,400 yen

14,400 yen

14,500 yen

Other Regional Areas

13,100 yen

13,000 yen

12,900 yen

Name of property

4 JASTEC Co., Ltd.

1,480.1

1.0

KDX Takanawadai Bldg.

5 Japan Pension Service

1,424.9

1.0

KDX Chofu Bldg.

Office buildings

Tenant diversification by type of business(based on the number of tenants) (Note 3)
Transportation, Communication(36) 3.0%
Construction(40) 3.4%
Real estate(53) 4.5%

6

Tenant B(Manufacturing)

1,308.0

0.9

KDX Kobayashi-Doshomachi Bldg.

7

Customer Relation
Telemarketing Co., Ltd.

1,279.6

0.9

KDX Higashi Umeda Bldg.

1,135.6

0.8

Koishikawa TG Bldg.

Individual(51) 4.3%

1,080.1

0.7

KDX Musashi-Kosugi Bldg.

912.2

0.6

Harajuku F.F. Bldg.

Finance,Insurance(66) 5.6%

15,499.7

10.5

8 Medical Corporation DOYUKAI
9

Tenant C(service provider)10

Tenant D(wholesale, retail and dining)
Total

IT related
business(141) 11.9%
Manufacturing(149) 12.5%

Public sector (other)(5) 0.4%
Infrastructure(4) 0.3%
Mining(1) 0.1%

Number oftenants(1,189)Service provider(371) 31.2%

Wholesale, Retail, Dining(272) 22.9%

Note 1: The share of leased floor area is the ratio of the leased area of each end-tenant to the total leased area of the entire portfolio as of the end of 22/10 period (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 whole office buildings (aggregated by name-base) as of the end of 22/10 period (rounded to the first decimal
place). The data is based on the industry classification based on a corporate credit survey conducted by Teikoku Databank, Ltd. For tenants without the data in the database of Teikoku Databank Ltd., the asset
management company supplements the data and compiles it.

20

Note

21

Section 4
Financial Status

22

Financial Status (1)Average rateof interest-bearing debt

Status of rating

AA

Fixed interest rate ratio

LTV

Financial institutions

97.5％

45.4％

26

Fixed by interest rate swaps, etc.

Book value basis+1 from the end of previous period

0.82%(Stable)-0.02% from the endof previous period

Japan Credit Rating Agency, Ltd.

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）

0.94%

Balance of

0.94%
0.89%
0.84%

0.8

End of
20/10期末

Averagecurrent
maturity (year)

End of21/4期末Balance of interest-bearing debt
and historical LTV (interest-bearing debt ratio) level (Note 2)

End of21/10期末

End of22/4期末0.82%

End of22/10期末

20/10 period

21/4 period

21/10 period

22/4 period

22/10 period

4.5

4.7

4.4

4.1

4.0

有利子負債残高interest-bearing debt

6
5
4
3
2
1
0

Balance ofinterest-bearing
debt (bn yen)

LTV (book value basis)
LTV（帳簿価額ベース）

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

45.4%

43.9%

43.4%

43.6%

44.1%

36.5%

36.1%

36.0%

35.7%

36.5%

End of
20/10期末

End of21/4期末End of21/10期末

End of22/4期末End of22/10期末

20/10 period

21/4 period

21/10 period

22/4 period

22/10 period

201.7

198.7

198.7

205.1

214.9

32.0%

Balance of interest-bearing debt by maturity (as of the end of 2022/10 period)(bn yen)
21
18
15
12
9
4.8
6
3
4.8
0
Average interest
rate (excl. shortterm borrowings)
(%)

21.6

18.3

17.4
9.8
0.3

12.2

2.0

18.2
14.6

13.6

19.9
3.0

2.0

16.2
1.0

2.0

2.0

The commitment line
agreement
Total 9.0 bn yen

17.1

7.8

7.6
6.8

9.5

10.2

15.4

11.6

18.3

14.6

16.2

21.6

16.9

15.2

17.1

7.8

7.6

6.8

5.0
1.0
4.0

3.9
3.9

23/4 period 23/10 period 24/4 period 24/10 period 25/4 period 25/10 period 26/4 period 26/10 period 27/4 period 27/10 period 28/4 period 28/10 period 29/4 period 29/10 period 30/4 period 30/10 period 31/4 period

1.25

0.80

0.58

0.79

0.97

0.87

0.93

0.73

0.69

0.79

0.97

0.88

0.85

0.72

0.77

0.83

0.90

■ Long-term borrowings ■ Short-term borrowings ■ Corporate bonds

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).

23

Financial Status (2)Status of debt financing (as of the end of 2022/10 period)
Classification

Balance

300 mn yen

0.1%

Long-Term Borrowings

201,650 mn yen

93.8%

201,950 mn yen

93.9%

13,000 mn yen

6.0%

214,950 mn yen

100.0%

Investment
Corporation Bonds
Total Borrowings andInvestment Corporation Bonds

Outstanding borrowings by financial institutions(as of the end of 2022/10 period)

13.8%
3.0%
4.4%
6.1%
9.5%

21.7%

Total
borrowings
from financial
institutions
201.9 bn yen

10.2%

18.0%

13.4%

Financial institutions

25
The end of
22/4 period

26

The end of
22/10 period• Total refinancing of 24.7 billion yen

Percentage

Short-Term Borrowings

Total borrowings

Results of debt financing in 2022/10 period■ Sumitomo Mitsui Banking■ MUFG Bank
■ Development Bank of Japan■ Mizuho Bank
■ Sumitomo Mitsui Trust Bank
■ Resona Bank
■ Aozora Bank
■ Mizuho Trust & Banking

Shinsei Bank, Ltd.
The Norinchukin Bank
Daishi Hokuetsu Bank, Ltd.
The 77 BankThe Chugoku Bank, Ltd.
The Bank of Fukuoka
The Nishi-Nippon City Bank
Sumitomo Life Insurance
Company
The Hiroshima BankThe Yamaguchi Bank, Ltd
Nippon Life Insurance Company
The Dai-ichi Life Insurance
Company, Limited
New Shinkin Central Bank
The Musashino Bank, Ltd.
Daiwa Next Bank, Ltd.
The Shizuoka Bank, Ltd.
The Higashi-Nippon Bank,
Limited
San ju San Bank,Ltd.

Before refinance

After refinance

Average interest rate

0.51%

0.54%

Average borrowing term

2.7 years

4.0 years• New debt financing totaling 9.8 billion yen for acquisition of
Edobashi Building
Conditions

43,900 mn yen
36,300 mn yen
27,050 mn yen
20,500 mn yen
19,150 mn yen
12,250 mn yen
8,900 mn yen
6,100 mn yen
4,000 mn yen
2,800 mn yen
2,500 mn yen
2,000 mn yen
2,000 mn yen
2,000 mn yen
2,000 mn yen
2,000 mn yen

21.7%
18.0%
13.4%
10.2%
9.5%
6.1%
4.4%
3.0%
2.0%
1.4%
1.2%
1.0%
1.0%
1.0%
1.0%
1.0%

1,500 mn yen
1,500 mn yen
1,000 mn yen
1,000 mn yen

0.7%
0.7%
0.5%
0.5%

1,000 mn yen
1,000 mn yen
500 mn yen
500 mn yen
300 mn yen

0.5%
0.5%
0.2%
0.2%
0.1%

200 mn yen

0.1%

Average interest rate

0.28%

Average borrowing term

1.8 years

Issue status of investment corporation bonds(total 13.0 bn yen) (as of the end of 2022/10 period)
Corporate bonds

Issued period

IssuedamountInterest
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

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 years

14th bonds

2022/7

1.0 bn yen

0.40%

5 years

24

Note

25

Section 5
Initiatives for Sustainability

26

Initiatives for Sustainability
Green finance

GRESB Real Estate Assessment for 2022

5 StarGreen Star

Highest evaluation•

In August 2022, established a Green
Finance Framework and received thehighest rating of "Green 1(F)" fromJapan Credit Rating Agency, Ltd.

11 consecutive years

Public Disclosure A
Highest ESG disclosure rating

Amount of green loans
procured in 22/10 period

9.2 bn yen

Balance of green financeTotal 12.2 bn yen

Promotion of acquisition of external certification•

Achieved 70% of the previous certification target. Target set at over
80% thereafter

Number of certified properties
in 22/10 period

10 properties

Ratio of certified properties (Note 1)

70.3%+5.9% from the endof previous period

Installation of
LED lightning
in tenant area•

Newly introduced•(after May 2022 and before
December 14, 2022)+7properties

Installed areain 22/10 period
Approx.

4,600 tsubo

Engagement survey

Total of introduced
properties•

20 properties•(as of December 14, 2022)

Total

The ratio of installation of
LED lightning (Note 2)

39.3%+3.7% from the end of
previous period

These initiatives are expected to reduce GHG emissions by a total of
3,346 t-CO2

Enhancement of transparency of disclosure••

Decided to introduce an investment unit ownership programfor investment units for the employees of the Kenedix Group
Facilitate employees’ wealth building as well as enhanceunitholder value by promoting further alignment of interests with
the Investment Corporation’s unitholders

Total 57 properties

Initiatives to reduce GHG emissions
Introduction ofelectricity derived
from effectively
renewable energy

Investment unit ownership program•

Disclosed GHG emissions by scope classified by source of emissions
Obtained third-party assurance of GHG emissions, energy
consumption, and water consumption

Conducted a survey for the employees of the Kenedix Group topromote mutual understanding and affinity between the company
and employees
Regular surveys will enable a qualitative understanding of therelationship between company and employees, and will be usedin the drafting of internal initiatives to improve the organization

Future Initiatives••••

Acquire Science Based Target initiative (SBTi) certification
Continuously promote acquisition of environmental certifications
for properties (target of over 80% in the ratio of certified properties)
Further promote switchover to electricity derived from substantiallyrenewable energy sources
Promote switch to LED lighting in tenant areas

Note 1: If a single building has acquired multiple environmental certifications or evaluations, it is counted as one property. The ratio of certified properties is calculated by dividing the floor area ofaggregated properties that have acquired environmental certifications by the total floor area of the entire portfolio.
Note 2: The status of installation of LED lightning is calculated by dividing the tenant area where LED lighting has been installed by the leasable area of the portfolio.

27

Initiatives for Sustainability
Decision-making process with transparency
and check-and-balance system

Investment unit ownership by sponsor(same boat investment)• The Asset Management Company establishes asset management
guidelines investment policies, related party transaction rules, distribution•

Aiming for Same Boatability to align its
interests with those of unitholders, Kenedix,

policies, disclosure policies and other basic policies regarding the asset

the sponsor, holds a total of 15,421 units ofmanagement of the Investment Corporation

the Investment Corporation's investment units• Properties are to be acquired based on the investment policy stipulated in

Shareholding ratio

3.6%

As of the endof 22/10 period

the asset management guidelines and the related party transaction rules

Support for lifesaving activities• The decision-making flow for establishing and revising the management
guidelines and asset management plans and other documents, andpertaining to acquisition and sale of properties are established•sessions on how to use AED (Automatedin principle as follows
Preparation of
proposal

External Defibrillator) sequentially

Deliberation
and resolution

Compliance Committee

For those properties that are unable tosecure a location for the training sessions,

Disapprovedor remand
Compliance Officer

Deliberation
and resolution•

Office REIT Department

Confirmationof proposal

Deliberation
and resolution

From October 2022, have held training

have used Connect Square (tenant
relations system) to encourage the use of
web-based training on how to use AEDs

Contribution to the community
through a Children's Cafeteria

Outside member
Asset Management Committeeof Office REIT Department
Outside member

KDO Board of Directors

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

At Toyosu Grand Square, through EaSyGo(ESG service for tenants), tenant
employees have been introduced andoffered the opportunity to donate to the
Toyosu Children's Cafeteria, a local
voluntary association
28

Section 6
Future Initiatives

29

Future Initiatives
Return to Unitholders• Stabilize DPU level by utilizing retained earnings
and gains on sale of real estate• Consider acquisition of own investment units
depending on cash on hand and the level ofinvestment unit priceFinancial Strategy

External Growth• Focus on finding quality acquisition
opportunities amid the continuing difficult
environment for property acquisitions• Aim to improve portfolio quality through asset
reshuffling• Maintain a high level of fixed interest rate
ratios and continue to manage finances with
an awareness of maturity diversification

Aim to Enhance
Unitholder Value

Internal Growth• Aim to maintain and improve occupancy
rates by steadily capturing tenant needs
through flexible and agile leasing strategies
based on the characteristics of the properties
and the surrounding market conditions• Switch the electricity billing method to tenants
to improve the balance of utilities revenue
and expense

Sustainability• Contribute to the sustainability of society bypromoting environmentally friendly asset
investment and management, including
continuous reduction of GHG emissions, inaccordance with international consensus

30

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.

31

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