I am Hikaru Teramoto from the Office REIT Department of Kenedix Real Estate Fund Management, Inc.
I would like to express my sincere gratitude to you all for your continued support for the operations of Kenedix Office
Investment Corporation.
In this presentation, I am going to explain to you financial results for the fiscal period ended October 31, 2022, thelatest business developments, and future initiatives. Thank you in advance for your attention.

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

Appendix

P. 31

1Section 1
Management Highlight2

Management Highlight
Return to Unitholders
2022/10 period
DPU

Finance

14,488 yen

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

Average rate ofinterest-bearing debt

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

0.82

External Growth•

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

Sale 1.6 bn yen

22/4 period

KDX Sendai
Honcho Building
6.3 bn yen

AUM+17.8 bn yen(April 28, 2022)

22/10 period

Edobashi Building

9.6 bn yen

Assetreshuffling

KDX Kiba Building

1.6 billion yen(July 29, 2022)

Annual NOI increase(estimated)

Shionogi Kobe
Building
3.4bn yen•

+1 from the end of%+1.3% from the end of

previous periodprevious periodprevious period

Sustainability

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)•

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

Monthly rent increase

Due to tenant
replacements

97.8%

2.3 mn yen-0.5% from the end

mn yenDue to rent revisions

Due to tenant replacements
and rent revisions

2.4 mn yenof previous period

45.4%-0.02% from the end of

736 mn yen

Internal Growth
•

26

LTV
(book value basis)

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

 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)

Financial
institutions•

Provided amount ofreserve for
reduction entry(June 30, 2022)

Reduced interest rate levels and expanded lender formations

-0.1

•

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)

Others3

Please look at page 3 of the presentation material. First, I would like to explain the management highlights. I will
give further details about each topic later in the presentation.
Let me start with return to unitholders on the top left of the slide. DPU for the fiscal period ended October 31, 2022,
was 14,488 yen due in part to the effects of asset reshuffling and the acquisition and cancellation of own investment
units of approximately 3 billion yen. This was an increase of 3.5% from the previous fiscal period and 2.4% from ourinitial forecast.
The external growth section below the return to unitholders explains the series of asset reshuffling that began in
April 2022. We increased NOI by acquiring three properties and selling one property, and accumulated funds forstable DPU payment by providing the reserve for reduction entry through gains on sale.
Moving on to internal growth below that. At the end of the fiscal period ended October 31, 2022, the occupancy rate
was 97.8%, falling 0.5 percentage points from the end of the previous fiscal period. The primary cause was theconcentration of approximately half of the contracts terminated during the period near the end of the period.
Meanwhile, progress in leasing exceeded our expectations and the occupancy rate was 0.3 percentage points
higher than our initial forecast of 97.5%.
In addition, there was almost no change in monthly rent due to tenant replacement, but an increase of 2.4 million
yen in monthly rent due to rent revisions by existing tenants.
Moving on to finance. We continued to steadily reduce our debt costs and also achieved further expansion in ourlender formation. LTV on a book value basis was 45.4% due to the acquisition and cancellation of own investment
units and borrowings for the acquisition of Edobashi Building.
Next, I will touch on sustainability initiatives in the bottom right of the slide. Last year, we restructured theorganization of the Asset Management Company to improve its activities. One of its achievements was being
awarded the highest rating, 5 stars, in the GRESB Real Estate Assessment in 2022, an improvement from theprevious year. We have also continuously worked on initiatives to obtain environmental certifications for its
properties and reduce GHG emissions and is working to enhance the transparency of its disclosure. Regarding
finance, we established a green finance framework and began financing green loans. In social aspects of thebusiness, we launched new activities for employees.
We also conducted a two-for-one split of investment units on November 1 to increase liquidity.

Section 2
Financial Results and Earning Forecasts

4

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

Actual

22/10

22/10

Performancecomparison

Forecast

ActualChangeActual –forecast
comparison
ChangeC-A

C-B(announced
on June 14, 2022)

・ Gains on sale of real estateA
15,891
15,078
770
42
8,463

B
15,95915,673
239
46
8,845

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

4,721

5,037

－
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

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

10,356
10,763
7,768

8,003

8,253

484

249

Utilities revenue
Utilities expense

1,027
1,115

1,179
1,386

1,268
1,445

241
329

89
58
177

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 unit

375
882
-529
22
423

306
287
● The acquired properties
1
in 22/4 period and thereafter
17
・ Rental and other operating revenue
41

5,076

354

38 ● The sold property in 22/10 period

－
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

10,635

10,884527

249

11,074

11,283

519

209

497

127

304

-192

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

108.6 bn yen
780,000 yen

Comparison to 22/4 period■ Operating revenue● Existing properties
・ Rent / common area charge
・ Utilities revenue
・ Other rental and operating revenues

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.

・ 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(announced on June 14, 2022)■ Operating revenue● 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
2.6%
・ Utilities expense
・ 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

Next, please look at page 5 of the presentation material. I would like to explain the financial results of the fiscal
period ended October 31, 2022 shown here.
Let me start with a comparison of the results for the fiscal period ended October 31, 2022 with the results for the
fiscal period ended April 30, 2022.
Operating revenue was 16,266 million yen, an increase of 375 million yen compared with the previous fiscal period.
This is largely attributable to increases in rent and common-area charges at existing properties, revenue from newly
acquired properties, and the gain on sale of KDX Kiba Building, which offset the disappearance of the gain on saleof part of the land of KDX Toranomon 1-chome Building.
Operating expense was 8,886 million yen, up 423 million yen from the previous fiscal period. This chiefly reflects a
287 million yen increase in utilities expense as a result of power companies raising their prices, rising fueladjustment expenses and higher rental and other operating expenses due to new property acquisitions.
As a result, net income was 6,451 million yen, down 45 million yen period on period, however, we provided thereserve for reduction entry of 304 million yen. Also, DPU rose to 14,488 yen due to a decrease of 4,295 investment
units outstanding through the acquisition and cancellation of own investment units during the period and otherfactors.
This time, the amount provided to reserve for reduction entry exceeds the gain on sale of the property. The
calculation of reserve for reduction entry is based on gains on sale of land. While the sale of land resulted in profit,
the sale of the building resulted in a loss; therefore, the amount of reserve for reduction entry that exceeded thetotal gain on sale of both the land and building combined was provided.
A comparison of results with the forecasts announced at the time of the financial results announcement in June is
as shown on the bottom right of the page. Net income was 260 million yen higher than forecast due to a 249 million
yen increase in NOI, chiefly reflecting higher than anticipated utilities revenue that offset higher utilities expense as
well as a decrease in repair/maintenance expenses and the impact of the acquisition of Shionogi Kobe Building.
Provision of reserve for reduction entry was also 177 million yen more than forecast.
Details of unrealized profit in portfolio and NAV per unit are shown at the very bottom of the page. Unrealized profit
in portfolio was 116.0 billion yen as of October 31, 2022, an increase of 7.3 billion yen from April 30, 2022. NAV per
unit was 800,000 yen, an increase of 20,000 yen or 2.6% from April 30, 2022.

Earning Forecasts of the Fiscal Period Ending
April 30, 2023 and October 31, 2023
(mn yen)
22/10

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

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)

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

Note 1: Rental NOI = Operating revenue – Gains on sale of real estate – Dividend income – Rental and other operating expenses (excluding
depreciation)
Note 2: FFO = Net income + Depreciation – Gains on sale of real estate + Loss on sale of real estate
Note 3: A two-for-one unit split was executed on November 1, 2022.

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
・ Utilities expense
・ Taxes・ Repair / maintenance expense+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

6Please look at page 6. Next, we have a comparison of forecasts for the fiscal period ending April 30, 2022 withactual results for the fiscal period ended October 31, 2022.
Operating revenue in the fiscal period ending April 30, 2023, is expected to be 16,232 million yen, a decrease of 33
million yen period on period. This is largely attributable to the full-year contribution of properties acquired in thefiscal period ended October 31, 2022, and an increase in utilities revenue, which more than offset thedisappearance of a gain on sale of KDX Kiba Building.
Operating expense is expected to be 9,345 million yen, up 458 million yen from the previous fiscal period. Thischiefly reflects an increase in utilities expense as a result of power companies raising their prices and rising fueladjustment expenses, an increase in rental and other operating expenses due to new property acquisition, and adecrease in rental and other expenses resulting from property sale.
As a result, net income is expected to be 5,982 million yen, down 468 million yen period on period.
DPU is forecast to be 7,250 yen after the investment unit split following a reversal of reserve for reduction entry of
168 million yen to stabilize DPU. Expected DPU will increase 2.5% from 14,150 yen announced in June 2022,
taking into account the investment unit split.
Next, we have a comparison between the forecasts for the fiscal period ending April 30, 2023 and the fiscal period
ending October 31, 2023.
Operating revenue in the fiscal period ending October 31, 2023, will be 16,631 million yen, rising 398 million yen
period on period. This is largely attributable to an increase in utilities revenue of existing properties and thedisappearance of restoration work revenue in other rental and operating revenues.
Operating expense is expected to increase 465 million yen, amounting to 9,810 million yen. This was a result
primarily of an increase in utilities expense.
As a result, net income is expected to amount to 5,895 million yen, a decrease of 87 million yen period on period.
Following a reversal of the reserve for reduction entry of 255 million yen to stabilize DPU, DPU is expected to be
7,250 yen, which is equal to the forecast for the fiscal period ending April 30, 2023.
I would like to comment on the balance of utilities revenue and expense. The result for the fiscal period ended
October 31, 2022, was -176 million yen and the forecast for the fiscal period ending April 30, 2023, is -370 million
yen. We are currently in the process of changing the method of charging tenants for electricity to cost-linked billing.

The negative balance continues to increase due to a rapid increase in electricity charges
caused by price increase, particularly by power companies, and an increase in fueladjustment expenses. We expect that this negative balance will decrease through thesequential change of the billing method.

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

58
Rental and
208
other
118
operating Balance of
Otherexpenses utilities
Othersrental andrevenue andoperatingexpenserevenues

320

402

14,000638

13,362

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

NOI +1,244

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

109

14,500(Initial forecast)
14,150 yen

68

141
Other
Rental andrental andoperatingoperating Rental andrevenuesotherrevenues
operatingexpenses

Restoration work revenue +168

(7,250)

398
457

85
171

195

13,897

14,102

NOI -557

603

Rental and78
operating Other
51
34
revenues rental and Rental and
Balance ofother
Othersoperatingutilities
revenues operating revenue andexpenses
expenseBalance of
Othersutilities
revenue andexpense14,488
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

14,50014,488788

Rental andoperatingrevenues(properties
acquiredsince 22/4
period)Utilities revenue +508
Utilities expense -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 into the amount before the split 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

14,29014,15014,50014,500(7,250)(7,250)398(199)

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

4,630 Reversal

(302)

533

264

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.

168

4,326

531
638

832

Provision
304(initial
forcast)
127

1,137

4,462

Reversal
255

968

4,206
713

1,681 yen/unit(840 yen/unit)

13,362

13,886 14,027 14,488

13,619 13,757 14,102

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

3,493

3,493

3,493

3,493

8,235 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
period22/10
期
実績
Actual

10,095 yen

10,916 yen

Provided amount until 20/10 period

23/4
period23/4
期
予想
Forecast

23/10
23/10period
期予想
Forecast

10,519 yen

9,916 yen

(5,259 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 into the amount before the split based on the number of units issued andoutstanding 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

I would like to explain a little more about the DPU on the left side of the slide.
DPU was 14,488 yen in the fiscal period ended October 31, 2022. This is the result of the maximization of theprovision of the reserve for reduction entry due to a significant increase in EPU caused in part by a rise in NOI
exceeding our initial forecast.
For both the fiscal periods ending April 30 and October 31, 2023, we expect DPU of 14,500 yen at the level mostly
unchanged from the result of the fiscal period ended October 31, 2022, at the level before the investment unit split.
DPU will be halved to 7,250 yen after the split. While expected EPU for the fiscal periods ending April 30 and
October 31, 2023, is yet to reach 7,250 yen, we assume it as a level that enables us to make stable payments forthe time being while continuously using the reversal of reserve for reduction entry, taking into account the
distribution level in the fiscal period ended October 31, 2022.
Moving on to the balance of reserve for reduction entry on the right side of the page.
Although we initially planned to provide 127 million yen from the gain on sale of KDX Kiba Building in the fiscal
period ended October 31, 2022, as I said earlier, we added 177 million yen to provide 304 million yen due to the
EPU exceeding our initial forecast, resulting in a reserve balance of 4,630 million yen.
We will reverse 168 million yen and 255 million yen in the fiscal periods ending April 30 and October 31, 2023,
respectively, to stabilize distributions and assume that the balance after distribution will be 4,206 million yen in thefiscal period ending October 31, 2023 and DPU will be 9,916 yen before a split and 4,958 yen after a split.
No change will be made to our policy for the use of reserve for reduction entry. We will actively use the full amountsof the reserve for reduction entry reversed in or after the fiscal period ended April 30, 2021, to stabilize distributions.

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

Access

Kobe, Hyogo
8,501.91㎡

Acquisition date
Occupancy rate
(as of October 31, 2022)

August 1, 2022
95.2%

NOI yield
May 1992
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 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 July 1, 2022, divided by the acquisition price.

11

Next, I would like to explain the management status. Please look at page 11.
Let me start with external growth. Faced with limited opportunities to acquire prime properties in an environment
where acquiring property was difficult, we acquired Shionogi Kobe Building from a third party in August.
This building is located in the Sannomiya area of Kobe and is a medium-sized office building with access to three
train stations.
The regularly shaped rental rooms are easy to lay out, and the floors can be divided into multiple sections.
It is well maintained by the previous owner, and the lighting in the common area has been changed to LEDs. There
are 80 parking spaces and is located close to a highway entrance, making the building preferable to tenants thatuse cars for sales activities.
The building is currently occupied by 19 tenants and, with a decent rent level and efforts being made to diversify
tenants, stable occupancy can be expected in the medium to long term.

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.

Please look at page 12. This is a summary of the current asset reshuffling activities.
The number of properties in our portfolio rose to 98 and the total asset size increased 17.8 billion yen to 457.0
billion yen through the acquisition of three properties and the sale of one property. We were able to raise NOI and
accumulate funds for stable future distributions through the provision of a reserve for reduction entry of
approximately 300 million yen.

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

98.1

98.6

97.6

96.7

97.5

97.9%

98.3

97.8

97.5

95.3

94.7

94.6

93.3
Actual average in fiscal period 95.4%(Numberof movein/out)

(35)
2,365

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

3.5%

(65)
5,217

(78)
7,648

(64)
4,790

94.7%

(53)
5,179

-3,309(43)-6,700(73)-6,463
(63)

4.6%

4.4%

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

5.3

4.7
4.0

-6,158(62)-5,563
(42)

4.1%

3.7%

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)

4.6 4.9
3.6
2.8

2.7

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

OUTs

94.8

72.2%
（39）

22/4
period

97.5%

INs

99.5

Reasons for move-ins/outs

Occupancy rate
(excl. free rent area)

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

Next, I would like to explain about internal growth and the management status of existing properties. Please look atpage 13.
Let me start with changes in the occupancy rate. Please look at the line chart at the upper left section of the page.
The occupancy rate based on contracted area at the end of October this year was 97.8%, a decrease of 0.5
percentage points from the end of April this year and 0.3 percentage point higher than forecast six months earlier,which was 97.5%. Occupancy at the end of the period slightly decreased as approximately half of the contracts forabout 6,000 tsubo being terminated during the period were concentrated near the end of the period. Meanwhile,
steady progress in leasing contributed to the results, exceeding our initially forecast occupancy rate.
At the end of October, the actual occupancy rate excluding free rent area was 94.7%, down 0.6 percentage points
from the end of April and around the same level as forecast six months earlier.
The gap between the occupancy rate based on contracted area and the actual occupancy rate was 3.1% at the endof October 2022, remaining mostly unchanged from 3% at the end of April 2022.
Move-ins and move-outs are shown in the bar chart below the line chart and, in the fiscal period ended October 31,
2022, move-ins occupied a total of 5,179 tsubo and move-outs vacated a total of 6,158 tsubo, giving a net increasein space vacated of 979 tsubo.
The reasons for tenant move-ins and move-outs shown in the top right corner show that more than 70% of tenants
give floor expansion as a reason for moving in, indicating that there is still a strong tendency for strongly performing
small and mid-sized enterprises to move to larger offices. Leasing operations were steadily in line with the active
movements resulting in a period-end occupancy rate that is higher than expected.
As shown in the lower right section, the free rent periods granted were slightly shorter in the five central wards ofTokyo and other reginal areas than in the fiscal period ended April 30, 2022. Meanwhile, periods in Tokyo
metropolitan area excluding five central wards were slightly longer and showed more or less variation. However,there has not been a significant change in the status of free rent granted from the period ended April 30, 2022. We
are still mindful of filling vacancies at market rent levels and offer free rent periods of varying lengths based on thecharacteristics of the buildings with vacancies and surrounding market conditions, but fairly long free rent periods
were granted for vacancies when it was deemed difficult to find tenants.
Let me now move onto the turnover ratio. As shown in the lower left section of the page, the turnover ratio was atthe high level of 4.1% in the fiscal period ended October 31, 2022. However, the turnoverratio in the fiscal period ending April 30, 2023, based on cancellation notices received by theend of November 2022 fell slightly to 3.7%. This ratio includes 1% for the cancellation of thetenant that occupied the entire KDX Kawasaki-EkimaeHon-cho Building.
The occupancy rate based on contracted area at the end of the fiscal period ending April 30,
2023, is expected to be 97.5%. We expect a high occupancy rate of around 97.5% after theapplication of the move out of the tenant that occupied the entire KDX Kawasaki-EkimaeHoncho Building, which equals 1% of occupancy.
As I said earlier, the trend that strongly performing small and mid-sized enterprises move tolarger offices remains strong. We will work on raising and maintaining the occupancy rate
based on an agile and flexible leasing strategy, taking building specifications and conditionsin the surrounding area into consideration.

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
+8.3%

6.5

6.3

+4.0%

17,192

6.7

6.2

3.8

17,018+20.8%+2.7%

16,292
15,875

3.0

Total rent
increase
Total rent
decrease

-0.1

-0.2%
15,875 15,851

15,806
15,384

2.6
-0.1

-1.4

13,486

-3.8

-3.9

-5.0

% of the numberof rent increase
contracts upontenant turnover

16,356

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%

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
新規テナントの賃料単価
rent for new tenant

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

Next, please look at page 14. This shows rent changes upon tenant turnover.
The chart on the left side shows the change in monthly rents. In the fiscal period ended October 31, 2022, the rent
rate increased upon tenant turnover in 53.1% of contracts.
The increase in the monthly rent in the fiscal period ended October 31, 2022, was 3.8 million yen, down 2.7 million
yen from the fiscal period ended April 30, 2022. The decrease in the monthly rent was 3.9 million yen, remaining
mostly unchanged from the fiscal period ended April 30, 2022, and resulting in almost no change on a net basis.
The right side of the slide shows changes in rent unit price. The unit rent for new tenant compared with that for theprevious tenant was minus 0.2%, a decrease of 24 yen, and almost unchanged.
The results this period suggests a decrease in the ratio of units with rent increases and a fall in the range of theincrease due in part to a decreasing trend in the rent gap. On the decrease side, a fall in market rents for buildingsin the high-rent range had some impact.
However, areas where a rent gap remains have an opportunity to raise rents before and after tenant replacement,
therefore, our policy of steadily responding to this opportunity with the goal of increasing rent even slightly has notchanged.

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

2,729

2,456

2,513

Number of rent increase contracts and rent increase rate

-1,002

-216

3,458
4,002
615
-1,233
21/4
period21/4期

Increase
増賃額
in rent-1,052
21/10
period
21/10期
Decrease
減賃額
in rent(256)

No change(Lower thanmarket rent
(176)
60.1%

7,045

1,667

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

Negotiation
Target22/4
period22/4期

22/10
period
22/10期

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

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

Negotiation
Target

都心5区■ Tokyo central■ Other areas
5 wards 都心5区以外(number of increase/decrease)-1,946

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%

38

36

28

24

10

12

20/10 period

21/4 period

10.4%

9.4%

34
18

22

38

30

13

November 15,
2022
Rent increase
rate (incremental
average) (Note 2)

20/10期

21/4期

12

8

21/10 period

22/4 period

22/10 period

4.7%

6.4%

5.8%

5
21/10期

22/4期

22/10期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).

15

Next, please look at page 15. This shows the status of rent revisions with existing tenants.
The top right of the page shows the number of rent increase contracts and the percentage of rent increases basedon leased floor area.
Looking at rent revision with existing tenants upon contract renewal in the fiscal period ended October 31, 2022, we
increased rent for 38 tenants, or 15.7% of contracts based on leased floor area. While the ratio of leasable area forwhich rents can be negotiated below the market rent is decreasing, the number of units increased and thepercentage of area decreased from the fiscal period ended April 30, 2022.
The left side of the page shows changes in rent upon rent revisions and a net difference in monthly rent was anincrease of around 2.4 million yen.
As shown in the lower right section, the rent increase rate was 5.8%.
The number of units with a rent increase exceeded that in the fiscal period ended April 30, 2022, however, theincrease in the amount for each unit and total amount has been decreasing as the rent gap closes. On the other
hand, we think that that net difference remaining positive is an achievement.

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 level39

573 mn yen

Lower thanmarket rent level
52.0%

-2.2

-4.3
-10.7

7.1

-0.6 -2.1

105

22/10 period

23/4 period

23/10 period

23/10期

109

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-8.9 -8.7-5.9 -4.6 -3.2

(23)
24%

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

(16)
17%

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
periodRise(0)

Rise (2)(2) 2%(1)
1%-4.2 -6.6

52.6%

97

Decline
(32)
4.2

106

77

23/4期

89

146

96
57.6%

98

130

Change in market rent of owned properties (Note 4)

Historical average rent gaps (Note 2)

4.7

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%

End22/10期末
of 22/10 period

21.0
19.5
14.4
10.3

117

103

405 mn yen

(%)

72

106

Between -10% and 0%

Lower than -10%70
42

Between 0% and 10%

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

356 mn yen

Lower thanmarketrent level

Breakdown of rent gaps by rent revision schedule

Decline
(24)

(24)
25%

(21)
22%

(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

Next, please look at page 16. This shows the status of the rent gap.
The figure at the top left of the page shows a breakdown of rent gaps as of October 31, 2022.
The proportion of rents that are lower than market rent level was 52% as of October 31, 2022, down from 55.4% asof April 30, 2022. This is due to a continued drop in market rents for certain properties and a net increase in rents atthe time of rent revision.
The chart at the lower left of the page shows historical average rent gaps. The rent gap for the fiscal period ended
October 31, 2022, was -3.2% and the negative range continues to decrease while the rent gap still remains.
The charts at the lower right show the numbers of properties, by area, in the categories of rising, flat, and declining
market rents from the previous period. This period, there were zero properties whose rent increased, 71 properties
whose rents remained flat, and 24 properties whose rent decreased. The percentage of properties whose rent
remained unchanged was 75%, suggesting the stability of medium-sized office buildings.
The number of properties whose rent decreased from the previous period was eight. The properties whose rent
declined are located in areas in which current and potential vacancies are increasing, including large-sized offices,and we have the impression that the situation in which market rents are decreasing is continuing.
While the rent gap is narrowing, we intend to achieve some progress in terms of rent revisions by actively
negotiating increases with tenants where a rent gap exists.

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(mn yen)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 theimage of the entrance

2,523

2,636

2,631

2,588

2,567

2,548

2,627

Renovation of entrance of Edobashi Building
Before
1,776

1,692

1,696

356

441

1,326

1,610

406

1,264

337
1,420

1,251

20/10
period20/10期
actual

実績

988

21/4
period
21/4期
actual実績

21/10
period
21/10期
actual

実績

1,431
419

373

398
1,289
866

22/4
period22/4期
actual

実績

After (perspective drawing)

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

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 (%)
474

Target property

KDX Fuchu Building (sanitary facilities and pantry),
29.4
Edobashi Building (entrance, sanitary facilities and pantry)

Value-upgrading works

Tenant and common areas

Replacement works

Air-conditioning facilities

84

5.2 KDX Tosabori Building, KDX Sendai Honcho Building

Other major facilities

416

25.8

52

3.3 KDX Shinjuku 286 Building, KDX Nagoya Sakae Building

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

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

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

17

Next, please look at page 17. This shows actual construction expense and construction expenses budgets.
Actual construction expense in the fiscal period ended October 31, 2022 was less than budgeted six months earlier.
The impact of factors such as reduced construction expenses through bidding, constructions that became
unnecessary, and companies having difficulty in delivering equipment and postponed constructions continues toremain.
The construction budget for the fiscal period ending April 2023 will be increased. The major constructions projects
are as shown on the slide. As a general rule we will spend gradually based on a policy of carrying out appropriate
construction work at the appropriate time.

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 (%)

Occupancy rate during fiscal period (%)
100

90.9

82.8

83.6

86.1 82.3

100

82.3
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

100.0

99.1

85.3
83.2

Expected to be fully occupiedby the end of December 2022

22/4
•

22/5

22/6

22/9 22/10

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

Occupancy rate during fiscal period (%)

93.4

88.6

85.2

22/4
•

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

22/5

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.

Next, please look at page 18. This shows the current status of properties whose occupancy was expected tosignificantly decrease at the end of the fiscal period ended April 30, 2022, including decreases expected in the
future.
The occupancy rates of all properties, including future prospects, improved from six months earlier.
The Higashi Kayabacho Yuraku Building and the KDX Chofu Building, whose occupancy was expected tosignificantly decrease due to the vacation of tenants on multiple floors, are already or nearly fully occupied. The
KDX Akihabara Building is also close to full occupancy, and the KDX Fuchu Building, whose occupancy was
projected to fall to 76.3%, is also likely to be fully occupied.
Meanwhile, the Portus Center Building and the KDX Musashi Kosugi Building still have a considerable number ofvacancies despite some recovery in their occupancy rates, and we will continue to focus on leasing.

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• Occupancy rate is expected to decline again due tothe cancellation of 50 tsubo at the end of March
2023
Percentage of the portfolio

2.3%• 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

Next, please look at page 19. This shows leasing focus properties whose occupancy has fallen or is expected fall to
85% or below in the fiscal period ending April 30, 2023.
The Portus Center Building and the KDX Musashi Kosugi Building that were mentioned on the previous page areincluded.
The occupancy of the KDX Higashi-Shinagawa Building is expected to decrease due to the termination of a tenantthat has occupied three floors.
The KDX Kawasaki-EkimaeHon-cho Building, whose information has already been disclosed, will be completely
vacant due to the vacation of a tenant who rented the entire building.
We will work to achieve the early recovery of the occupancy rate by taking a responsive and flexible leasing strategy
considering the building specifications and the condition of the surrounding area.
For the KDX Kawasaki-EkimaeHon-cho Building, we will consider not only leasing but measures that will contributeto an increase in unitholder value, taking into account the conditions of the surrounding area, since the building will
be completely vacant.

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)(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.

Tenant nameLeasedarea

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

4 JASTEC Co., Ltd.

1,550.8

1,480.1

1.0

1.0

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

KDX Kawasaki-Emimae
Hon-cho Bldg.
KDX Takanawadai Bldg.

Office buildings

Tenant diversification by type of business(based on the number of tenants) (Note 3)

5 Japan Pension Service

1,424.9

1.0

KDX Chofu Bldg.

Tenant B
6(Manufacturing)

1,308.0

0.9

KDX Kobayashi-Doshomachi Bldg.

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

7

Customer Relation
Telemarketing Co., Ltd.

8 Medical Corporation DOYUKAI
9

Tenant C(service provider)10

Tenant D(wholesale, retail and dining)
Total

Transportation, Communication(36) 3.0%

Public sector (other)(5) 0.4%
Infrastructure(4) 0.3%

Construction(40) 3.4%
Real estate(53) 4.5%

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

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.

Please look at page 20. On the left-hand side there is a list of top end-tenants.
The ranking changed due to the floor expansion of a tenant. The vacation of the third-ranked tenant mentioned
earlier, who rented the entire KDX Kawasaki-EkimaeHon-cho Building, comprising 1% of occupancy, is scheduled
for the end of February 2023.
In addition, there will be no significant changes from the end of April 30, 2022 to either the total leased area of the
top 10 tenants or the percentage occupied by each of them. Despite the vacation of the third-ranking tenant in thefiscal period ending April 30, 2023, the tenants are adequately diversified and we think the impact will be limited.

20

Note

21

Section 4
Financial Status

22

Financial Status (1)Average rateof interest-bearing debt

Status of ratingAA(Stable)0.82%

Japan Credit Rating Agency, Ltd.

-0.02% from the endof previous period

Fixed interest rate ratio

97.5％

45.4％

26

Book value basis+1 from the end of previous period

Weight average interest rate (incl. up-front fee)
平均金利（融資実行手数料を含む）

Balance of

0.84%
0.82%

20/10期末

End of
20/10 period

21/4期末End of
21/4 period

21/10期末

End of21/10 period

22/4期末End of22/4 period

End of22/10 period

4.5

4.7

4.4

4.1

4.0

Averagecurrent
maturity (year)

Balance of interest-bearing debt
and historical LTV (interest-bearing debt ratio) level (Note 2)
有利子負債残高interest-bearing debt

0.94%
0.89%

0.8

Financial institutions

Fixed by interest rate swaps, etc.

Average interest rate and remaining period to maturity (Note 1)
0.94%

LTV

6
5
4
3
2
1
0

22/10期末

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

The commitment line
agreement
Total 9.0 bn yen

17.1

2.0

2.0

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

Next, I would like to explain our financial status. Please look at page 23.
The average interest rate of interest-bearing debt totaling around 215 billion yen as of October 31, 2022 was 0.82%,
down 0.02 percentage points from the end of the previous fiscal period, and we achieved reduction in interest
expenses.
Meanwhile, the fixed interest rate ratio was 97.5%, and the maturity ladder at the bottom of the page also shows
steady diversification of maturity dates. Because it is not totally unexpected that we would see interest rates
increase, we will maintain a structure that enables us to minimize the risk of rising interest rates by continuously
ensuring a high fixed interest rate ratio and highly diversified maturity dates.
LTV on a book value basis rose from 44.1% as of April 30, 2022 to 45.4% as of October 31, 2022, reflecting theacquisition and cancellation of around 3.0 billion yen of our own investment units and borrowing of 9.8 billion yen
associated with the acquisition of the Edobashi Building, while LTV on an appraisal value basis was 36.5%.
The current LTV of 45.4% is over the standard level of less than 45%. The reason we have allowed LTV to exceed
45% in the current situation is that our conventional policy includes the possibility of management at a level in theupper half of the 40% range due to interest-bearing debts for the acquisition of excellent properties in view of thefinancing environment and other factors.
Meanwhile, the total number of financial institutions we deal with increased by one from the end of the previous
fiscal period to 26. We realized the expansion of our lender formation.

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

Balance

Short-Term Borrowings
Long-Term Borrowings
Total borrowings
Investment
Corporation Bonds
Total Borrowings andInvestment Corporation Bonds

Results of debt financing in 2022/10 period• Total refinancing of 24.7 billion yen

Percentage

300 mn yen
201,650 mn yen

Before refinance

0.1%
93.8%

201,950 mn yen

93.9%

13,000 mn yen

6.0%

214,950 mn yen

100.0%

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

26

The end of
22/4 period

The end of
22/10 period

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.

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

Outstanding borrowings by financial institutions(as of the end of 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

After refinance

Average interest rate

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

11 consecutive years•

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

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)+5.9% from the endof previous period

70.3%

Investment unit ownership program••

Total 57 properties

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

Installation of
LED lightning
in tenant area•

Total of introduced
properties

Newly introduced(after May 2022 and before
December 14, 2022)+7properties
Installed areain 22/10 period
Approx.

4,600 tsubo

Engagement survey•(as of December 14, 2022)

Total

20 properties•

The ratio of installation of
LED lightning (Note 2)

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

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

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

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

Next, I will explain our initiatives for sustainability.
Please look at page 27. Our main initiatives during the fiscal period ended October 31, 2022 are shown here.
First, in this year’s Global Real Estate Sustainability Benchmark (GRESB) assessment, we received Green Star
status for the 11th consecutive year, and improved from the previous year to the highest five-star rating. I think thisrating is the result of our efforts in the last year to establish the Sustainability Office within the Asset Management
Company and the various measures we have taken in relevant fields.
Next is about the acquisition of external certifications for the properties. With the newly acquired certifications for 10
properties, we achieved the acquisition target of 70% on a total floor space basis. Now, our next target is 80%, andwe will continue to work to acquire certifications.
We made steady progress on initiatives to reduce GHG emissions by continuously introducing electricity derived
from renewable energy and installing LED lighting in tenant areas. The number of properties that electricity derived
from renewable energy has been introduced to has increased to 20 in total. The installation of LED lighting in tenant
areas has been completed in 4,600 tsubo, which is 39.3% of the total.
In addition, we disclosed the GHG emissions by scope with assurance by a third-party institution to enhance thetransparency of our disclosures.
Regarding financing, we raised 9.2 billion yen in green loans through the new formulation of a green financeframework, in addition to our past financing with green bonds.
Furthermore, regarding the social aspects of the business, we have decided to introduce an investment unit
ownership program for Kenedix Group’s employees, including employees of the Asset Management Company. The
goal of this is to promote further alignment of interests with the Investment Corporation’s unitholders as well as
improve employee welfare benefits by supporting their asset building.
Going forward, we will steadily implement the current initiatives. In March this year, we set and disclosed GHG
emission reduction targets in fiscal year 2030 and by 2050, and we will prepare to acquire SBTi certification in the
future.

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, and•From October 2022, have held training

pertaining to acquisition and sale of properties are establishedsessions on how to use AED (Automatedin principle as follows

External Defibrillator) sequentiallyPreparation of
proposal

Office REIT Department

Confirmationof proposal

Compliance Officer

Deliberation
and resolution

Compliance Committee

Deliberation
and resolution

Deliberation
and resolution•

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

Disapprovedor remand

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

Finally, I would like to explain to you our future initiatives. Please look at page 30.
As a matter of course, we will fine-tune initiatives depending on the situation, but we are not currently planning any
major changes to our policies.
Let me start with external growth.
The present acquisition environment is difficult because competing players remain highly motivated to invest in
office buildings, limiting the property listings that meets KDO’s criteria. However, we will continue focusing on finding
quality acquisition opportunities.
At the same time, we aim to improve portfolio quality through asset reshuffling, mainly of properties that havediverged from our initial acquisition plan.
Moving on to internal growth. Our approach of prioritizing maintaining and improving occupancy rates above all else
remains unchanged. Maintaining and improving occupancy rates is essential in order to bolster the profitability of
the Investment Corporation.
Some tenants terminating the lease of some floors has continued due to large corporate tenants consolidating theiroffices. However, demand to move to offices for floor expansion among strongly performing small and mid-sizedenterprises remains brisk. Using free rent periods, we will carry out leasing activities aiming to achieve market rent
levels and we will 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.
We will also firmly respond to the rising cost of electricity.
Let’s move on to financial strategy. The exchange rate has somewhat settled down, but in view of rising prices andother factors, future interest rate movements also need to be taken into consideration. We will maintain the fixedinterest rate ratio at a high level and continue to manage finances based on an awareness of maturity diversification.
Regarding sustainability initiatives, we will contribute to the sustainability of society by promoting asset investment
and management in an environmentally friendly way, including the reduction of GHG emissions in compliance withthe global consensus.
Finally, we come to unitholder returns. We are currently seeking to stabilize DPU through gains on sale of realestate and the reversal of retained earnings and will continue stabilizing DPU through gains on sale and thereversal of retained earnings in the future.
We implemented the acquisition and cancellation of our own investment units in the fiscal
period ended October 31, 2022, and we intend to continue considering the acquisition of ourown investment units in the future depending on cash in hand and the level of the investment
unit price.
When asset reshuffling, there may be cases where a sale takes place first. In those cases, we
may use the funds in hand that were obtained to purchase a property if there is one that we
can surely acquire. Or we may consider the acquisition of our own investment units
depending on the level of the investment unit price, or the repayment of debts to decrease
LTV. By taking these measures, we will further improve unitholder value along with themeasures for external growth, our capital policy or our financial strategy depending on thesituation.
Various events resulting from the war between Russia and Ukraine have seriously affectedinterest rates, exchange rates, the prices of commodities including energy, and otherelements on a global scale. Paying close attention to these circumstances, KDO will continue
to reliably manage its portfolio for its unitholders while enhancing unitholder value throughinitiatives to address the global changes.
This brings me to the end of my presentation. Thank you very much.

Appendix

31

Overview of Kenedix Office Investment Corporation
1

Investment management strategy centered on Tokyo metropolitan area and mid-sized office buildings
Target regional investment ratio• Investing in and managing mainly mid-sized officebuildings in the Tokyo metropolitan area (major cities

Regional Areas:in Tokyo Metropolitan, Kanagawa, Saitama, and Chiba
Prefectures) where economic activities are densely

Typical mid-sized office building

30% or less2 elevators(Core cities, including

integrated with abundant tenant demand and rich

8 to 10 floors with total floorarea of 500 - 3,000 tsubo

governmentdesignated cities)
Tokyo metropolitan area:
over 70%

stocks of properties

Rented area per floor of

100 - 150 tsubo

2

Has successfully managed assets for more than 17 years and the asset size has grown
to 457 billion yen• Listed in July 2005 sponsored by one of the major realestate investment management companies in Japan• The largest among office J-REITs in terms of the number

End of 22/10 period

98 properties, 457.0 billion yenof portfolio properties• Highly stable portfolio thanks to diverse tenants andlimited revenue impact from large end-tenants vacating

3

High creditworthiness and stable financial position• The credit rating meets the Bank of Japan's criteria forpurchase. Also, the rating improved from "AA(Positive)" to "AA (Stable)" in March 2022
• Sufficiently prepared for the risk of rising interest rates
with a high level of fixed interest rate ratio

LTV

Ratio of fixed interest rate

Status of credit rating(ratio of interest-bearing debt)(JCR)

Conservative financial managementwith a target LTV of 45%
The end of 22/10 period

Continue to hedge
against a potential rise in interest rates
The end of 22/10 period

45.4%

97.5%

AA (Stable)

32

Portfolio Diversification(as of the End of Fiscal Period Ended October 31, 2022)
Breakdown by asset type (Note 1)

Breakdown by region (Note 2)• Portfolio mainly consisted of mid-sized office buildings withadvanced tenant diversification
オフィスビル
OfficeBldg.
(Other)(その他）• Plan to maintain approx. 80% investment ratio in the Tokyo
metropolitan area

Other
その他
0.6%
(1 (1物件)
property)

14.9%(8 properties)(8物件)

98 properties

Other
regional areas
地方経済圏
20.2%

オフィスビル
OfficeBldg.
(mid-sized)
(中規模）
84.5%
(89 (89物件)
properties)

Tokyo central
5
wards
都心5区
52.6%
その他
Other
Tokyo
metropolitan
area
東京経済圏
27.3%

Office Bldg.

99.4%(97 properties)

Tokyo
Metropolitan area

79.8%

Breakdown of the number of tenants by leased floor area (Note 3)300300坪以上
tsubo or More

200坪以上200- less than
300 tsubo
300坪未満6.3%
Lessthan 100 tsubo
100坪未満

65.7%

5.9%

100坪以上100- less than
200
tsubo
200坪未満22.1%# of tenants:
1,263
Less than 200 tsubo

87.8%

Note 1: Portfolio breakdown by asset type based on acquisition price (rounded to the second decimal place).
Note 2: Portfolio breakdown by region based on acquisition price (rounded to the second decimal place).
Note 3: The percentage of diversification by leased floor space is calculated based on the number of tenants occupying each office building. Tenants leasing more than one property are counted as 1 tenant for each building
without aggregating by name-base.

33

Characteristics of KDO Office Buildings(as of the End of Fiscal Period Ended October 31, 2022)
By acquisition price(based on acquisition price, office buildings only)
10.0 bn yen
or more(101.5 bn yen)
22.4%

7.5 - less than
10 bn yen
(69.8 bn yen)
15.4%

By distance from the nearest station on foot(based on acquisition price, office buildings only)
6 min(15 properties)
77.0 bn yen
17.0%
5 min
(8 properties)
83.0%
33.4 bn yen
located within
7.4%

Less than
2.5 bn yen(57.7 bn yen)
12.7%

Average
4.6 bn yen/property

5.0 - less than
7.5 bn yen(90.6 bn yen)
20.0%

2.5 - less than
5.0 bn yen(134.3 bn yen)
29.6%

5 minutes
on foot

4 min(15 properties)
61.0 bn yen
13.4%

Percentage share of our properties that comply
with new earthquake resistance standard (Note 1) (Note 2)

1 min(23 properties)
118.4 bn yen
26.1%

2 min
(16 properties)
53.6 bn yen
11.8%

3 min
(20 properties)
110.5 bn yen
24.3%

Equivalent to new earthquake resistance standard
3 properties (3.6%)
Implemented earthquake-resistance reinforcement:
KDX Hakata-Minami Building, KDX Akihabara Building

Portfolio
PML
3.1%(Note 3)

Evaluated as a property complying with equivalent standard of
the new earthquake resistance standard:
KDX Nihonbashi 313 Building

New earthquake resistance standard
94 properties (96.4%)

Note 1: "New Earthquake Resistance Standard" was formulated based on the revision of enforcement order of Building Standard Law in 1981 (cabinet order No. 144 on April 24, 1981). The anti-seismic performance of buildings
has been greatly improved since the enforcement of the law due to the newly added provisions including the followings: (1) New provision on tie-hoop ratio of Reinforced-Concrete Pillars (0.2% or more); (2)Resetting ofhorizontal seismic coefficient to elastic shear modulus; (3) New requirement on the secondary design in seismic calculation.
Note 2: Percentage share is calculated based on leasable area as of the end of 22/10 period. For the properties owned through quasi co-ownership interest, leasable area for such portion is used in calculation.
Note 3: PML is as of October 2022 and based on the research implemented by Sompo Risk Management Inc. “PML (Probable Maximum Loss)” is probable maximum loss ratio due to an earthquake. PML can be divided into
ratios of an individual property and the entire portfolio, respectively. There is no uniform strict definition of the PML; however here it means the percentage (%) of the excess probability of 10% loss to the replacement
price (= loss amount for the recurrence interval of 475 years) during the estimated period of use (50 years = useful life of general buildings).

34

Portfolio Growth and Changes in the Number of Properties• Aim for sustainable growth through asset reshuffle and exploring quality property acquisition opportunities as a basic
policy continuously
Portfolio growth (based on total acquisition price) and the number of properties (Note)(bn yen)

Office (left axis)
Central urban retail (left axis)
Number of properties (right axis)

600(Number ofproperties)

Residential (left axis)
Other (left axis)
PO

97

98

100

Fiscal period with public offering (PO)
90

500

457.0
445.6

80

PO

70

PO

400

PO

60

PO

300

50
PO
PO

200

40

PO

31

30

PO

100

20
69.1
10

0

The
end of05/10
periodThe
end of06/10
periodThe
end of07/10
periodThe
end of08/10
periodThe
end of
09/10
periodThe
end of
10/10
periodThe
end of
11/10
periodThe
end of
12/10
periodThe
end of
13/10
periodThe
end of
14/10
periodThe
end of
15/10
periodThe
end of
16/10
periodThe
end of
17/10
periodThe
end of
18/10
periodThe
end of
19/10
periodThe
end of
20/10
periodThe
end of
21/10
periodThe
end of
22/10
period0Note: Amounts and number of properties are as of the end of each fiscal period. Amounts are rounded down to the nearest 100 million yen.

35

Portfolio Overview (1)(as of the End of the Fiscal Period Ended October 31, 2022)
Office Buildings (97 properties)
Type Area

No.

Name

Location

Acquisition price(mn yen) (Note 1)

Completion
date (Note 2)

End of 2022/10
period occupancy
rate (Note 3)

Type Area

No.

Name

Location

Acquisition price(mn yen) (Note 1)

Completion
date (Note 2)

End of 2022/10
period occupancy
rate (Note 3)

Chuo-ku, Tokyo

5,940

1974/4

100.0

A064

KDX Nihonbashi 216 Building

Chuo-ku, Tokyo

2,010

2006/10100.0

Higashi-Kayabacho Yuraku Building Chuo-ku, Tokyo

4,450

1987/1

100.0

A066

KDX Shinjuku Building

Shinjuku-ku, Tokyo

6,800

1993/5

100.0

A004

KDX Hatchobori Building

Chuo-ku, Tokyo

3,680

1993/6

100.0

A067

KDX Ginza 1chome Building

Chuo-ku, Tokyo

4,300

1991/11

100.0

A005

KDX Nakano-Sakaue Building

Nakano-ku, Tokyo

2,533

1992/891.1

A071

KDX Iidabashi Building

Shinjuku-ku, Tokyo

4,670

1990/395.1

A006

Harajuku F.F. Building

Shibuya-ku, Tokyo

2,450

1985/11

100.0

A072

KDX Higashi-Shinagawa Building

Shinagawa-ku, Tokyo

4,590

1993/1

100.0

A007

KDX Minami Aoyama Building

Minato-ku, Tokyo

2,270

1988/11

100.0

A073

KDX Hakozaki Building

Chuo-ku, Tokyo

2,710

1993/11

100.0

A008

KDX Kanda Kitaguchi Building

Chiyoda-ku, Tokyo

1,950

1993/5

100.0

A078

KDX Tachikawa Ekimae Building

Tachikawa, Tokyo

1,267

1990/2

100.0

A013

KDX Kojimachi Building

Chiyoda-ku, Tokyo

5,950

1994/5

100.0

A083

KDX Fuchu Building

Fuchu, Tokyo

6,120

1996/393.4

A014

KDX Funabashi Building

Funabashi, Chiba

2,252

1989/4

100.0

A084

KDX Kasuga Building

Bunkyo-ku, Tokyo

2,800

1992/693.6

A016

Toshin 24 Building

Yokohama,
Kanagawa

5,300

1984/9

100.0

A085

KDX Nakameguro Building

Meguro-ku, Tokyo

1,880

1985/10

100.0

A017

KDX Ebisu Building

Shibuya-ku, Tokyo

4,640

1992/1

100.0

A086

KDX Omiya Building

Saitama, Saitama

2,020

1993/4

100.0

A019

KDX Hamamatsucho Building

Minato-ku, Tokyo

3,460

1999/9

100.0

A087

Nihonbashi Horidomecho First

Chuo-ku, Tokyo

2,200

1995/797.3

A020

KDX Kayabacho Building

Chuo-ku, Tokyo

2,780

1987/10

100.0

A088

KDX Shinjuku 6-chome Building

Shinjuku-ku, Tokyo

1,900

1990/390.2

A021

KDX Shinbashi Building

Minato-ku, Tokyo

3,728

1992/2

100.0

A089

KDX Takanawadai Building

Minato-ku, Tokyo

5,250

1985/10

100.0

A022

KDX Shin-Yokohama Building

Yokohama,
Kanagawa

2,520

1990/996.5

A090

KDX Ikebukuro Building

Toshima-ku, Tokyo

3,900

2009/3

100.0

A027

KDX Kajicho Building

Chiyoda-ku, Tokyo

2,350

1990/3

100.0

A091

KDX Mita Building

Minato-ku, Tokyo

3,180

1993/3

100.0

A029

KDX Higashi-Shinjuku Building

Shinjuku-ku, Tokyo

2,950

1990/1

100.0

A092

KDX Akihabara Building

Chiyoda-ku, Tokyo

2,600

1973/12

100.0

A030

KDX Nishi-Gotanda Building

Shinagawa-ku, Tokyo

4,200

1992/11

100.0

A093

KDX Iidabashi Square

Shinjuku-ku, Tokyo

4,350

1994/1

100.0

A031

KDX Monzen-Nakacho Building

Koto-ku, Tokyo

1,400

1986/9

100.0

A094

KDX Musashi-Kosugi Building

Kawasaki, Kanagawa

12,0002013/5

81.7

A032

KDX Shiba-Daimon Building

Minato-ku, Tokyo

6,090

1986/7

100.0

A095

KDX Toyosu Grand Square

Koto-ku, Tokyo

8,666

2008/496.2

A033

KDX Okachimachi Building

Taito-ku, Tokyo

2,000

1988/6

100.0

A096

KDX Takadanobaba Building

Toshima-ku, Tokyo

3,650

1988/10

100.0

A035

KDX Hachioji Building

Hachioji, Tokyo

1,155

1985/12

100.0

A099

KDX Ikebukuro West Building

Toshima-ku, Tokyo

1,934

1988/7

100.0

A037

KDX Ochanomizu Building

Chiyoda-ku, Tokyo

6,400

1982/885.7

A101

KDX Yokohama Building

Yokohama, Kanagawa

7,210

1994/3

100.0

A038

KDX Nishi-Shinjuku Building

Shinjuku-ku, Tokyo

1,500

1992/10

100.0

A102

KDX Yokohama Nishiguchi Building Yokohama, Kanagawa

2,750

1988/10

100.0

A041

KDX Shinjuku 286 Building

Shinjuku-ku, Tokyo

2,300

1989/8

100.0

A107

KDX Ginza East Building

Chuo-ku, Tokyo

3,600

1991/8

100.0

A046

Hiei Kudan-Kita Building

Chiyoda-ku, Tokyo

7,600

1988/390.1

A108

Pentel Building

Chuo-ku, Tokyo

3,350

1990/11

100.0

A048

KDX Kawasaki-Ekimae Hon-cho
Building

Kawasaki, Kanagawa

3,760

1985/2

100.0

A109

KDX Hamamatsucho Center
Building

Minato-ku, Tokyo

3,950

1985/12

100.0

A051

KDX Hamacho Nakanohashi
Building

Chuo-ku, Tokyo

2,310

1988/9

100.0

A112

KDX Toranomon 1chome Building

Minato-ku, Tokyo

14,616

2013/10

97.5

A055

Shin-toshin Maruzen Building

Shinjuku-ku, Tokyo

2,110

1990/7

100.0

A113

KDX Shin-Nihonbashi Ekimae
Building

Chuo-ku, Tokyo

3,829

1992/5

100.0

A056

KDX Jimbocho Building

Chiyoda-ku, Tokyo

2,760

1994/5

100.0

A115

ARK Mori Building

Minato-ku, Tokyo

4,169

1986/3

100.0

A059

KDX Iwamoto-cho Building

Chiyoda-ku, Tokyo

1,864

2008/396.0

A116

KDX Nishi-Shinbashi Building

Minato-ku, Tokyo

8,400

1992/8

100.0

A060

KDX Harumi Building

Chuo-ku, Tokyo

10,2502008/2

100.0

A117

BR Gotanda

Shinagawa-ku, Tokyo

2,200

1991/9

100.0

A062

Koishikawa TG Building

Bunkyo-ku, Tokyo

3,080

1989/11

100.0

A119

KDX Shibuya Nanpeidai Building

Shibuya-ku, Tokyo

3,500

2003/12

100.0

A063

KDX Gotanda Building

Shinagawa-ku, Tokyo

2,620

1988/4

100.0

A120

KDX Yoyogi Building

Shibuya-ku, Tokyo

2,479

1991/8

100.0

Tokyo Metropolitan Area

KDX Nihonbashi 313 Building

A003

Office Buildings

Office Buildings

Tokyo Metropolitan Area

A001

Note 1: Acquisition price is only the acquisition (investment) price of the trust beneficiary interest, etc. (excluding any expenses, taxes, etc.) acquired by KDO. Figures are truncated to the nearest million yen.
Note 2: Completion date shows the newly-built year-month recorded in the real estate register. The average value shown in the subtotal or total section is a weighted average value calculated based on acquisition price with a basedate of the end of 22/10 period. Figures are truncated to the first decimal place.
Note 3: Occupancy rate is calculated by dividing leased area as of the end of 22/10 period by leasable area and is rounded to the first decimal place.
36

Portfolio Overview (2)(as of the End of the Fiscal Period Ended October 31, 2022)
Office Buildings (97 properties)
End of 2022/10 period
occupancy rate (Note 3)

Tokyo Metropolitan Area

No.

Name

Location

A121

Ginza 4chome Tower

Chuo-ku, Tokyo

9,800

2008/11

100.0

A122

Mitsubishijuko Yokohama Building

Yokohama,
Kanagawa

14,7201994/2

98.1

Area

No.

OthersD002

Name

Location

Acquisition price(mn yen) (Note 1)

Shinjuku 6chome
Building (Land)

Shinjuku-ku,
Tokyo

2,880

-

100.0

2,880

-

100.0

457,076

Average26.5 years

97.8%

Others (1 property) Subtotal

KDX Yokohama Kannai Building

Yokohama,
Kanagawa

9,500

2007/9

100.0

A124

KDX Hamamatsucho Place

Minato-ku, Tokyo

20,7002015/2

100.0

A125

KDX Chofu Building

Chofu, Tokyo

8,700

1995/199.1

A127

KDX Kanda Ekimae Building

Chiyoda-ku, Tokyo

3,300

1991/2

100.0

A128

KDX Shinbashi Ekimae Building

Minato-ku, Tokyo

16,3002018/9

100.0

A130

Edobashi Building

Chuo-ku, Tokyo

9,600

1986/11

100.0

A012

Portus Center Building

Sakai, Osaka

5,570

1993/982.3

A042

KDX Karasuma Building

Kyoto, Kyoto

5,400

1982/10

95.2

A044

KDX Sendai Building

Sendai, Miyagi

2,100

1984/2

100.0

A053

KDX Hakata-Minami Building

Fukuoka, Fukuoka

4,900

1973/697.8

A054

KDX Kitahama Building

Osaka, Osaka

2,220

1994/7

100.0

A058

KDX Nagoya Sakae Building

Nagoya, Aichi

7,550

2009/4

100.0

A069

KDX Kobayashi-Doshomachi Building Osaka, Osaka

2,870

2009/7

100.0

A070

KDX Sapporo Building

Sapporo, Hokkaido

2,005

1989/10

100.0

A079

KDX Nagoya Ekimae Building

Nagoya, Aichi

7,327

1986/4

100.0

A082

KDX Higashi Umeda Building

Osaka, Osaka

2,770

2009/7

100.0

A097

KDX Utsunomiya Building

Utsunomiya,Tochigi

2,350

1999/2

100.0

A098

KDX Hiroshima Building

Hiroshima,
Hiroshima

1,300

1990/1

91.8

A100

Senri Life Science Center Building

Toyonaka, Osaka

13,0001992/6

100.0

A104

KDX Minami-Honmachi Building

Osaka, Osaka

2,200

2009/12

100.0

A106

KDX Sakura-dori Building

Nagoya, Aichi

5,900

1992/8

100.0

A110

KDX Shin-Osaka Building

Osaka, Osaka

4,550

1992/597.1

A111

KDX Nagoya Nichigin-mae Building

Nagoya, Aichi

3,500

2006/9

100.0

A118

KDX Sapporo Kitaguchi Building

Sapporo, Hokkaido

1,800

1992/9

100.0

A126

KDX Tosabori Building

Osaka, Osaka

5,000

1987/10

100.0

A129

KDX Sendai Honcho Building

Sendai, Miyagi

6,360

1984/11

95.4

Shionogi Kobe Building

Kobe, Hyogo

3,450

Office Buildings (97 properties) Subtotal

454,196

1992/5

95.2

Average26.5 years

97.8(98 properties, excl. investment securities)
Total

Completion End of 2022/10 period
date (Note 2) occupancy rate (Note 3)

The total number of end tenants for 97 office buildings is 1,263.
(1,189 if tenants are aggregated based on their names.)

Investment Security (1 security)
Type

Investment
Security

Other Regional Areas

Office Buildings

A123

A131

Type

Tokyo
Metropolitan
Area

Type Area

Others (1 property)
Acquisition price Completion(mn yen) (Note 1) date (Note 2)

Location of
specified asset

Name

Silent partnership equity interest of G.K. KRF 43

Acquisition price(mn yen)Shinjuku-ku,
TokyoCompletion date ofspecified asset

1,107

Investment Security (1 security) Total

1979/12

1,107

Historical rent-based NOI yield(by asset type, annualized-based) (Note 4) (Note 5)
Fiscal period
20/10

Fiscal period
21/4

Fiscal period
21/10

(%)

Fiscal period
22/4

Fiscal period
22/10

Office buildings

5.0

4.9

4.7

4.7

4.7

Others

4.3

4.3

4.3

4.3

4.2

4.9

4.9

4.7

4.7

4.7

Total

Note 1: Acquisition price is only the acquisition (investment) price of the trust beneficiary interest, etc. (excluding any expenses, taxes, etc.) acquired by the Investment Corporation. Figures are truncated to the nearest million yen.
Note 2: Completion date shows the newly-built year-month recorded in the real estate register. The average value shown in the subtotal or total section is a weighted average value calculated based on acquisition price with a basedate of the end of 22/10 period. Figures are truncated to the first decimal place.
Note 3: Occupancy rate is calculated by dividing leased area as of the end of 22/10 period by leasable area and is rounded to the first decimal place.
Note 4: NOI yield calculation for the properties without taxation on property and city planning taxes in the year of acquisition are assumed as if they are imposed. Acquisition price for newly acquired / sold properties is calculated bymultiplying the ratio of actual operating days to the relevant fiscal period's operating days.
Note 5: Each yield is rounded to the first decimal place.

37

Appraisal Value and Cap Rateas of the End of the Fiscal Period Ended October 31, 2022 (1)As of April 30, 2022

As of October 31, 2022
No.

Name

Acquisition
Date

Acquisition
price(mn yen)Appraiser(A)(mn yen)(mn yen)DirectCapitalization
MethodCap rate

(B)

(C)

(D)

Book value

Appraisal
value

Appraisal valuevs Book value(C)÷(B)-1(Note 1)

Difference(mn yen)Directcapitalization
Methodcap rate(E)(F)(C)－(E)

Appraisalvalue

DirectCapitalization
MethodCap rate

Period-end appraisal value

Increasedecrease rate

Difference(Note 1)(C)÷(E)-1(D)－(F)A001

KDX Nihonbashi 313 Building

2005/8

5,940

Daiwa

5,601

7,110

3.7%

26.9%

7,100

3.7%

10

0.1%

-

A003

Higashi-Kayabacho Yuraku Building

2005/8

4,450

JREI

3,935

5,340

3.8%

35.7%

5,340

3.9%

-

-

-0.1%

A004

KDX Hatchobori Building

2005/8

3,680

Daiwa

3,206

3,580

4.0%

11.6%

3,580

4.0%

-

-

-

A005

KDX Nakano-Sakaue Building

2005/8

2,533

Daiwa

2,312

2,510

4.2%

8.6%

2,510

4.2%

-

-

-

A006

Harajuku F.F. Building

2005/8

2,450

JREI

2,349

3,880

4.2%

65.1%

3,600

4.3%

280

7.8%

-0.1%

A007

KDX Minami Aoyama Building

2005/8

2,270

JREI

2,171

2,870

3.6%

32.2%

2,820

3.7%

50

1.8%

-0.1%

A008

KDX Kanda Kitaguchi Building

2005/8

1,950

Daiwa

1,737

1,640

4.0%

-5.6%

1,640

4.0%

-

-

-

A012

Portus Center Building

2005/9

5,570

Daiwa

3,688

5,070

5.4%

37.4%

5,050

5.4%

20

0.4%

-

A013

KDX Kojimachi Building

2005/11

5,950

JREI

5,421

5,530

3.3%

2.0%

5,360

3.4%

170

3.2%

-0.1%

A014

KDX Funabashi Building

2006/3

2,252

JREI

2,153

3,100

4.8%

43.9%

2,940

4.9%

160

5.4%

-0.1%

A016

Toshin 24 Building

2006/5

5,300

JREI

4,811

5,610

4.0%

16.6%

5,470

4.1%

140

2.6%

-0.1%

A017

KDX Ebisu Building

2006/5

4,640

JREI

4,264

6,270

3.6%

47.0%

6,110

3.7%

160

2.6%

-0.1%

A019

KDX Hamamatsucho Building

2006/5

3,460

Daiwa

3,064

3,600

3.6%

17.5%

3,600

3.6%

-

-

-

A020

KDX Kayabacho Building

2006/5

2,780

JREI

2,620

3,360

4.0%

28.2%

3,240

4.1%

120

3.7%

-0.1%

A021

KDX Shinbashi Building

2006/5

3,728

JREI

3,656

5,670

3.3%

55.1%

5,500

3.4%

170

3.1%

-0.1%

A022

KDX Shin-Yokohama Building

2006/5

2,520

JREI

2,115

2,650

4.5%

25.2%

2,610

4.6%

40

1.5%

-0.1%

A027

KDX Kajicho Building

2006/7

2,350

Daiwa

2,251

2,320

4.0%

3.1%

2,320

4.0%

-

-

-

A029

KDX Higashi-Shinjuku Building

2006/9

2,950

Daiwa

2,863

4,080

4.1%

42.5%

4,070

4.1%

10

0.2%

-

A030

KDX Nishi-Gotanda Building

2006/12

4,200

JREI

3,591

3,690

3.9%

2.7%

3,590

4.0%

100

2.8%

-0.1%

A031

KDX Monzen-Nakacho Building

2007/1

1,400

Daiwa

1,229

1,150

4.5%

-6.5%

1,140

4.5%

10

0.9%

-

A032

KDX Shiba-Daimon Building

2007/3

6,090

JREI

5,770

6,380

3.8%

10.6%

6,210

3.9%

170

2.7%

-0.1%

A033

KDX Okachimachi Building

2007/3

2,000

Daiwa

1,983

2,100

4.0%

5.9%

2,090

4.0%

10

0.5%

-

A035

KDX Hachioji Building

2007/3

1,155

Daiwa

1,135

1,240

4.9%

9.2%

1,240

4.9%

-

-

-

A037

KDX Ochanomizu Building

2007/4

6,400

JREI

6,416

8,440

3.6%

31.5%

8,230

3.7%

210

2.6%

-0.1%

A038

KDX Nishi-Shinjuku Building

2007/4

1,500

JREI

1,520

1,560

4.0%

2.6%

1,530

4.1%

30

2.0%

-0.1%

A041

KDX Shinjuku 286 Building

2007/6

2,300

JREI

2,342

2,890

3.6%

23.4%

2,820

3.7%

70

2.5%

-0.1%

A042

KDX Karasuma Building

2007/6

5,400

Daiwa

4,969

5,960

4.6%

19.9%

5,950

4.6%

10

0.2%

-

A044

KDX Sendai Building

2007/6

2,100

Daiwa

1,825

1,920

5.1%

5.2%

1,930

5.1%

-10

-0.5%

-

A046

Hiei Kudan-Kita Building

2008/2

7,600

Daiwa

7,363

8,520

3.6%

15.7%

8,570

3.6%

-50

-0.6%

-

A048

KDX Kawasaki-Ekimae Hon-cho Building

2008/2

3,760

JREI

3,218

3,220

4.5%

0.0%

3,280

4.5%

-60

-1.8%

-

A051

KDX Hamacho Nakanohashi Building

2008/2

2,310

JREI

2,165

2,180

4.1%

0.6%

2,190

4.2%

-10

-0.5%

-0.1%

A053

KDX Hakata-Minami Building

2008/2

4,900

JREI

4,237

5,330

5.4%

25.8%

5,170

5.5%

160

3.1%

-0.1%

A054

KDX Kitahama Building

2008/2

2,220

JREI

1,984

1,770

4.8%

-10.8%

1,730

4.9%

40

2.3%

-0.1%

A055

Shin-toshin Maruzen Building

2008/2

2,110

JREI

2,023

1,720

4.0%

-15.0%

1,780

4.1%

-60

-3.4%

-0.1%

*Notes are shown on page 40.

38

Appraisal Value and Cap Rateas of the End of the Fiscal Period Ended October 31, 2022 (2)As of April 30, 2022

As of October 31, 2022
No.

Name

Acquisition
Date

Acquisition
price(mn yen)DirectCapitalization
MethodPeriod-end appraisal value

Cap rate
Appraiser(A)

Book value

Appraisalvalue

DirectCapitalization
Method(mn yen)(mn yen)

Cap rate

(B)

(C)

(D)

Appraisal valuevs Book value(Note 1)(C)÷(B)-1

Appraisalvalue

Directcapitalization
Method(mn yen)cap rate(E)(F)

Increasedecrease rate

Difference

Difference(Note 1)(C)－(E)(C)÷(E)-1(D)－(F)

A056

KDX Jimbocho Building

2008/3

2,760

JREI

2,783

2,360

3.9%

-15.2%

2,590

4.0%

-230

-8.9%

A058

KDX Nagoya Sakae Building

2009/7

7,550

Daiwa

6,048

5,740

4.2%

-5.1%

5,800

4.2%

-60

-1.0%

-

A059

KDX Iwamoto-cho Building

2008/5

1,864

JREI

1,537

1,730

4.0%

12.5%

1,690

4.1%

40

2.4%

-0.1%

A060

KDX Harumi Building

2008/6

10,250

JREI

8,175

8,700

3.6%

6.4%

8,690

3.7%

10

0.1%

-0.1%

A062

Koishikawa TG Building

2009/11

3,080

JREI

3,022

3,400

3.9%

12.5%

3,320

4.0%

80

2.4%

-0.1%

A063

KDX Gotanda Building

2009/11

2,620

JREI

2,626

3,620

4.0%

37.8%

3,530

4.1%

90

2.5%

-0.1%

A064

KDX Nihonbashi 216 Building

2009/12

2,010

JREI

1,746

2,850

3.5%

63.2%

2,760

3.6%

90

3.3%

-0.1%

A066

KDX Shinjuku Building

2010/2

6,800

JREI

6,896

10,500

3.2%

52.2%

10,400

3.3%

100

1.0%

-0.1%

A067

KDX Ginza 1chome Building

2010/11

4,300

Daiwa

4,085

5,960

3.4%

45.9%

5,940

3.4%

20

0.3%

-

A069

KDX Kobayashi-Doshomachi Building

2010/12

2,870

JREI

1,679

2,910

7.8%

73.3%

2,920

7.8%

-10

-0.3%

-

A070

KDX Sapporo Building

2011/3

2,005

Daiwa

1,924

2,680

4.6%

39.3%

2,580

4.6%

100

3.9%

-

A071

KDX Iidabashi Building

2011/7

4,670

Daiwa

4,741

5,800

3.9%

22.3%

5,830

3.9%

-30

-0.5%

-

A072

-0.1%

KDX Higashi-Shinagawa Building

2011/7

4,590

Daiwa

4,566

4,880

4.0%

6.9%

4,870

4.0%

10

0.2%

A073

KDX Hakozaki Building

2011/7

2,710

Daiwa

2,605

3,600

4.2%

38.2%

3,490

4.2%

110

3.2%

-

A078

KDX Tachikawa Ekimae Building

2011/12

1,267

JREI

1,312

1,910

4.6%

45.6%

1,760

4.7%

150

8.5%

-0.1%

A079

KDX Nagoya Ekimae Building

2011/12

7,327

JREI

7,781

10,400

3.7%

33.6%

10,300

3.8%

100

1.0%

-0.1%

A082

KDX Higashi Umeda Building

2012/3

2,770

Daiwa

2,163

4,060

4.1%

87.7%

4,060

4.1%

-

-

-

A083

KDX Fuchu Building

2012/9

6,120

Daiwa

5,784

8,730

4.5%

50.9%

8,780

4.5%

-50

-0.6%

-

A084

KDX Kasuga Building

2012/9

2,800

JREI

2,596

4,280

3.8%

64.8%

4,220

3.9%

60

1.4%

-0.1%

A085

KDX Nakameguro Building

2012/9

1,880

Daiwa

1,856

3,580

4.1%

92.8%

3,580

4.1%

-

-

-

A086

KDX Omiya Building

2013/3

2,020

Daiwa

2,093

3,210

4.8%

53.4%

3,180

4.8%

30

0.9%

-

A087

Nihonbashi Horidomecho First

2013/8

2,200

Daiwa

2,246

3,180

4.0%

41.5%

3,180

4.0%

-

-

-

A088

KDX Shinjuku 6-chome Building

2013/9

1,900

Daiwa

1,937

3,490

4.0%

80.1%

3,530

4.0%

-40

-1.1%

-

A089

KDX Takanawadai Building

2013/11

5,250

JREI

5,532

7,160

3.8%

29.4%

6,960

3.9%

200

2.9%

-0.1%

A090

KDX Ikebukuro Building

2013/11

3,900

Daiwa

3,452

5,230

3.7%

51.5%

5,240

3.7%

-10

-0.2%

-

A091

KDX Mita Building

2013/11

3,180

JREI

3,119

4,270

3.7%

36.9%

4,210

3.8%

60

1.4%

-0.1%

A092

KDX Akihabara Building

2013/11

2,600

JREI

2,452

3,300

3.6%

34.6%

3,230

3.7%

70

2.2%

-0.1%

A093

KDX Iidabashi Square

2014/1

4,350

Daiwa

4,724

6,430

3.8%

36.1%

6,420

3.8%

10

0.2%

-

A094

KDX Musashi-Kosugi Building

2014/3

12,000JREI

10,34319,000

3.8%

83.7%

18,800

3.8%

200

1.1%

-

A095

KDX Toyosu Grand Square

2014/5

8,666

Daiwa

7,460

9,930

4.3%

33.1%

9,930

4.3%

-

-

-

A096

KDX Takadanobaba Building

2014/5

3,650

Daiwa

3,547

4,740

4.1%

33.6%

4,640

4.1%

100

2.2%

-

A097

KDX Utsunomiya Building

2014/5

2,350

Daiwa

2,169

2,690

5.3%

24.0%

2,690

5.3%

-

-

-

A098

KDX Hiroshima Building

2014/9

1,300

JREI

1,315

1,930

5.0%

46.7%

1,890

5.1%

40

2.1%

-0.1%

A099

KDX Ikebukuro West Building

2014/9

1,934

Daiwa

1,972

2,610

4.0%

32.3%

2,530

4.0%

80

3.2%

-

*Notes are shown on page 40.

-

39

Appraisal Value and Cap Rateas of the End of the Fiscal Period Ended October 31, 2022 (3)As of April 30, 2022

As of October 31, 2022
No.

Name

Acquisition
Date

Acquisition
price(mn yen)

Cap rate
Appraiser

(A)
A100

Senri Life Science Center Building

A101

KDX Yokohama Building

A102

KDX Yokohama Nishiguchi Building

A104

DirectCapitalization
MethodPeriod-end appraisal value

Appraisal valuevs Book value(mn yen)DirectCapitalization
MethodCap rate(C)(D)(C)÷(B)-1

Book value

Appraisalvalue(mn yen)(B)(Note 1)

Difference(mn yen)Directcapitalization
Methodcap rate(E)(F)(C)－(E)

Appraisal
value

Increasedecrease rate

Difference(Note 1)(C)÷(E)-1(D)－(F)

13,000Daiwa

12,06013,800

4.3%

14.4%

13,700

4.3%

100

0.7%

2014/10

7,210

Daiwa

7,222

9,530

4.2%

32.0%

9,470

4.2%

60

0.6%

2014/12

2,750

Daiwa

2,600

3,420

4.2%

31.5%

3,400

4.2%

20

0.6%

-

KDX Minami-Honmachi Building

2014/12

2,200

JREI

1,864

3,250

4.0%

74.3%

3,200

4.1%

50

1.6%

-0.1%

A106

KDX Sakura-dori Building

2015/1

5,900

Daiwa

6,602

8,600

4.4%

30.3%

8,580

4.4%

20

0.2%

-

A107

KDX Ginza East Building

2015/3

3,600

JREI

3,620

4,170

3.7%

15.2%

4,060

3.8%

110

2.7%

-0.1%

A108

Pentel Building

2015/3

3,350

Daiwa

3,577

4,201

3.7%

17.4%

4,200

3.7%

1

-

-

A109

KDX Hamamatsucho Center Building

2015/9

3,950

Daiwa

3,982

4,580

3.5%

15.0%

4,580

3.5%

-

-

-

A110

KDX Shin-Osaka Building

2015/9

4,550

Daiwa

4,446

5,560

4.0%

25.0%

5,530

4.0%

30

0.5%

-

A111

KDX Nagoya Nichigin-mae Building

2016/3

3,500

JREI

3,300

4,230

3.8%

28.1%

4,120

3.9%

110

2.7%

-0.1%

A112

KDX Toranomon 1chome Building

2016/3

14,616

JREI

14,787

25,100

2.9%

69.7%

24,400

3.0%

700

2.9%

-0.1%

A113

KDX Shin-Nihonbashi Ekimae Building

2016/8

3,829

JREI

3,951

4,690

3.3%

18.7%

4,520

3.4%

170

3.8%

-0.1%

A115

ARK Mori Building

2016/12

4,169

Daiwa

4,179

5,040

3.4%

20.6%

5,040

3.4%

-

-

-

A116

KDX Nishi-Shinbashi Building

2017/2

8,400

Daiwa

8,479

9,330

3.3%

10.0%

9,330

3.3%

-

-

-

A117

BR Gotanda

2017/4

2,200

JREI

2,276

2,590

3.9%

13.8%

2,520

4.0%

70

2.8%

-0.1%

A118

KDX Sapporo Kitaguchi Building

2017/7

1,800

Daiwa

2,078

2,330

4.6%

12.1%

2,230

4.6%

100

4.5%

-

A119

KDX Shibuya Nanpeidai Building

2017/8

3,500

Daiwa

3,527

3,970

3.4%

12.5%

3,970

3.4%

-

-

-

A120

KDX Yoyogi Building

2005/9

2,479

JREI

2,382

2,420

4.2%

1.6%

2,380

4.3%

40

1.7%

-0.1%

A121

Ginza 4chome Tower

2013/8

9,800

JREI

9,325

15,900

2.9%

70.5%

15,500

3.0%

400

2.6%

-0.1%

A122

Mitsubishijuko Yokohama Building

2017/12

14,720Daiwa

14,49114,8003.8%

2.1%

15,200

3.8%

-400

-2.6%

A123

KDX Yokohama Kannai Building

2018/1

9,500

Daiwa

9,453

10,400

3.9%

10.0%

10,600

3.9%

-200

-1.9%

-

A124

KDX Hamamatsucho Place

2018/7

20,700Daiwa

20,195

24,100

3.2%

19.3%

24,100

3.2%

-

-

-

A125

KDX Chofu Building

2019/6

8,700

JREI

8,996

10,300

4.3%

14.5%

10,200

4.4%

100

1.0%

-0.1%

A126

KDX Tosabori Building

2020/1

5,000

JREI

5,074

5,020

3.9%

-1.1%

5,010

4.0%

10

0.2%

-0.1%

A127

KDX Kanda Ekimae Building

2020/2

3,300

JREI

3,359

3,590

3.3%

6.9%

3,500

3.4%

90

2.6%

-0.1%

A128

KDX Shinbashi Ekimae Building

2020/6

16,300JREI

16,30021,100

2.7%

29.4%

21,100

2.8%

-

-

-0.1%

A129

Sendai Honcho Building (Note 2)

2022/4

6,360

Daiwa

6,449

6,500

4.6%

0.8%

6,500

4.6%

-

-

-

A130

Edobashi Building (Note 2)

2022/6

9,600

JREI

9,710

10,300

3.2%

6.1%

10,200

3.3%

100

1.0%

-0.1%

Shionogi Kobe Building (Note 2)

2022/8

3,450

Daiwa

A131

2014/10

Subtotal: Office Buildings (Note 3)
D002

Shinjuku 6chome Building (Land)454,196
2014/4

-

-

3,617

3,620

4.3%

0.1%

3,610

4.3%

10

0.3%

-

434,223549,561

3.8%

26.6%

544,600

3.9%

4,961

0.9%

-0.1%

2,973

3,660

3.3%

23.1%

3,660

3.3%

-

-

-

Subtotal: Others (Note 3)

2,880

2,973

3,660

3.3%

23.1%

3,660

3.3%

-

-

-

Total (Note 3)

457,076

437,196553,221

3.8%

26.5%

548,260

3.9%

4,961

0.9%

-0.1%

2,880

Daiwa

Note 1: Ratios for appraisal value vs book value and increase-decrease rate are rounded to the first decimal place.
Note 2: For the property acquired in 22/10 period, the details described in the appraisal report at the time of acquisition are shown as those as of the end of 22/4 period.
Note 3: Cap rates for subtotals and the entire portfolio are weighted averages based on appraisal values.

40Historical Appraisal Profit/loss of Portfolio
Historical changes in portfolio's appraisal profit/loss amount and ratio and average appraisal cap rate (Note 1)（%）(bn yen)
120

26.5

30.0

25.4
100
20.7 21.1
80

22.5

17.6
13.9

60
10.9
8.9

40
6.1

9.2

-0.2
0
-0.1

0.8

25.0

20.0

15.0

11.9

8.6

10.0

6.5
5.1

4.5

3.7

20

-20

21.5 21.9

5.0

2.9
0.5

5.5 10.9 17.8 20.0 11.6 -5.7

0.6

-18.5 -22.3 -24.1 -24.4 -24.2 -22.6 -25.4 -25.9 -22.8 -16.4-7.3

10.9 17.4 25.4 33.1 41.5 47.2 57.0 71.0 85.0 88.2 92.1 93.0 94.9 108.6116.0

-2.0

-2.6

0.0

1.9
-5.0

-4.9
-40

-8.3

-9.4

-10.3

-9.9 -9.5-7.6-7.9 -8.7
-8.9

-10.0
Appraisal profit/loss amount (left axis)

Appraisal profit/loss ratio (right axis)-60
05/10 06/4 06/10 07/4 07/10 08/4 08/10 09/4 09/10 10/4 10/10 11/4 11/10 12/4 12/10 13/4 13/10 14/4 14/10 15/4 15/10 16/4 16/10 17/4 17/10 18/4 18/10 19/4 19/10 20/4 20/10 21/4 21/10 22/4 22/10
Average
5.2%
5.1%
5.0%
4.9%
4.8%
4.9%
5.1%
5.3%
5.2%
5.1%
5.0%
4.9%
4.8%
4.7%
4.6%
4.5%
4.4%
4.3%
4.2%
4.1%
4.0%
3.9%
3.8%
appraisal
cap rate-15.0(Note 2)

Note 1: Portfolio's appraisal profit/loss amount is the sum of differences between appraisal value and book value for the properties owned as of the end of relevant fiscal period. Appraisal profit/loss ratio is calculated by dividing
appraisal profit/loss by book value as of the end of relevant fiscal period. Figures are rounded to the first decimal place.
Note 2: Average appraisal cap rate is a weighted average based on appraisal value for the properties owned as of the end of relevant fiscal period and listed in the appraisal report with the base date for appraisal as of the end ofeach fiscal period. Figures are rounded to the first decimal place.

41

DPU and NAV per unit
DPU
(yen)

14,412
13,45813,719446

619

13,012

13,10018/10 period
18/10期
Actual19/4 period
19/4期
Actual実績

実績

15,384

15,384792

1,179

13,63913,63919/10 period
19/10期
Actual

実績

14,000209

14,592

14,412

20/4 period
20/4期
Actual20/10 period
20/10期
Actual

実績

Amount of increase from gain on sales of real estate etc.

実績

14,00013,791

13,362

21/4 period
21/4期
Actual21/10 period
21/10期
Actual22/4 period
22/4期
Actual

実績

Amount of reversal of reserve for reduction entry

14,50014,500(7,250)398

603

14,488

14,102

13,89722/10 period
22/10期
Actual23/4 period
23/4期
Forecast

23/10 period
23/10期
Forecast

638

14,205実績

14,500(7,250)14,50014,488

実績

実績

予想

予想

*Figures in parentheses are the actual amount of forecasted DPU after the split.

NAV per unit
(yen)615,000

631,000

654,000

17/10
period
17/10期
Actual実績

18/4
period18/4期
Actual実績

18/10
period
18/10期
Actual
実績

687,000

19/4
period19/4期
Actual
実績

719,000

727,000

738,000

740,000

745,000

780,000

800,000

19/10
period
19/10期
Actual実績

20/4
period20/4期
Actual実績

20/10
period20/10期
Actual実績

21/4
period21/4期
Actual実績

21/10
period
21/10期
Actual実績

22/4
period22/4期
Actual実績

22/10
period
22/10期
Actual実績

Note: Figures per unit are calculated based on the number of investment units issued and outstanding as of the end of each fiscal period.
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 into the amount before the split 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).
NAV per unit is truncated to the nearest thousand yen after subtracting the amount of DPU.

42

Track Record of Asset Reshufflingin and after the Fiscal Period Ended October 31, 2015
• Steadily establish a track record of strategic asset reshuffle after comprehensively evaluating building age, profitability,
appraisal profit/loss, etc.
17/10
period

15/10 period ～ 17/4 period
BR Gotanda
KDX Nagoya
KDX ShinKDX
Nichigin-mae Nihonbashi Nihonbashi (Compartmentalized
ownership ･EkimaeBldg.
Edo-dori
Partial land leasehold)
Bldg.
Bldg.

18/4
periodMitsubishijuko
Yokohama Bldg.
KDX Sapporo (Quasi-co-ownershipinterest)
Kitaguchi Bldg.

18/10
period19/4
periodKDX
Hamamatsucho
Place

19/10
period20/4
periodKDX Chofu Bldg.
KDX(Compartmentali
zed ownership) Tosabori Bldg.

20/10
period21/4
periodKDX
Shinbashi
Ekimae Bldg.

21/10
period22/4
period

22/10
periodKDX Sendai
Honcho Bldg.

Edobashi Bldg.

Total
acquisition
price

Acquisition
KDX
Hamamatsucho
Center Bldg.

KDX
Toranomon
1chome Bldg.

ARK Mori Bldg.
(Compartment
KDX NishiKDX Shibuya
alizedownership) Shinbashi Bldg. Nanpeidai Bldg.

21

Shionogi
Kobe Building

KDX Kanda
Ekimae Bldg.

KDX Yokohama
Kannai Bldg.

Properties

150.4
bn yenKDX ShinOsaka Bldg.

Mutualtransaction
相互売買
NIPPON
日本土地
TOCHI
建物㈱
TATEMONO
Co., Ltd.

KDX
Nagoya Nikko
Toranomon
Shoken Bldg.
Bldg.

Mutual
相互売買
transaction
森ビル㈱
Mori
Building
Co., Ltd.

Mutual
相互売買
transaction
平和 RealHeiwa
Estate Co.,
不動産㈱
Ltd.

Mutualtransaction
相互売買

Domestic generalbusiness
corporation
group

KDX ShinKDX Shin- Frame Jinnan- Frame JinnanKDX
zaka
zaka
Yokohama 381 KDX Ikejiri- Yokohama
BUREX
Nihonbashi(Quasi-coOohashi Bldg. 214 Bldg.
(Quasi-coBldg.
Toranomon Kabutocho Bldg.
ownershipownership
interest: 49%) interest: 51%)
RetailRetailMutual
相互売買
transaction
国内大手
Domestic
ディベロッパーmajor
developer

KDX
Nihonbashi
Honcho Bldg.

KDX
Hon-Atsugi
Bldg.

KDX Toranomon
1chome Bldg.
(The part ofland)

KDX Kiba
Bldg.

Disposition

21

KDX
Nogizaka
Bldg.

Toranomon
Toyo Bldg.

KDX
KDX
KDX
Kanda
Roppongi Gobancho Misaki228 Bldg.
Bldg.
cho Bldg.

KDX
Residence Charmante Hamamatsucho
Dai-2 Bldg.
Tsukishima

KDX
Nihonbashi
Edo-dori
Bldg.

KDX
ShinNihonbashi
Bldg.

Properties

78.4
bn yen43

Outline of Our Sponsor
SMFL MIRAI Partners balanceof real estate assets held

Strengthen support by sponsors

Residential
area & others

70% owned through group company

Japan Credit Rating
Agency, Ltd.
(JCR)

AA-

Establishment of a strategic
partnership structure throughcapital and business alliance

StableStrengthening REIT and Private
Placement Fund Businesses

Retailproperty

11%

Shareholders
Sumitomo Mitsui
Financial Group, Inc.

50%

Sumitomo Corporation

50%

Hotel

14%

SMFL MIRAI Partners

31%

Company, Limited (Note)

Balance of real estate assets held

Expansion of New Business Domains

Supplementation of Creditworthiness andEnhancement of Fund Raising Capacity

Sharing Know-how on SDGs
Management

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

Fund management by Kenedix Group (as of the end of September 2022)
REIT (main sponsor) 1,147.3 bn yen 私募REIT
Kenedix Real Estate Fund Management, Inc.
100% owned by
Kenedix, Inc
Mid-sized officebuildings, etc.

Residential &healthcare
properties &
accommodation

Retail properties& retail
distribution
centers458.1 bn yen

292.7 bn yen

253.6 bn yen

Private fund
Kenedix
Investment
Partners, Inc.
Kenedix, Inc.

Large-sized officebuildings &logistics
property etc.

142.8 bn yen（Note 1）

Factory 3%

Variousasset types
1,305.0 bn yen

REIT(sub sponsor)

Logistics 16%
property

Kenedix Retail
REIT Corporation

Listed in Jul. 2005

Listed in Apr. 2012

Listed in Feb. 2015

Note 1: Include silent partnership equity interest of 1.1 bn yen.
Note 2: Include consolidated real estate of 154.8 bn yen.

Kenedix
PrivateInvestment
Corporation

Variousprivatefunds

25%

OfficeBuilding

Conclusion of Alliance Agreement
As of October 6, 2021, entered into an allianceagreement among 3 companies: Sumitomo Mitsui
Finance and Leasing Co., Ltd. (“SMFL”), SMFL MIRAI
Partners Co., Ltd. (“FLMP”), and Kenedix Real Estate
Fund Management, Inc.
Overview of the Alliance Agreement••

Pipeline support to KFM
Acquisition support through warehousing support by
FLMP•
Kenedix Residential
Next Investment
Corporation(as of the end of
September 2022)

Note: SMFL MIRAI Partners Company, Limited is a wholly-owned subsidiary of Sumitomo
Mitsui Finance and Leasing Company, Limited(Note 2)

Kenedix Office
Investment
Corporation

1,263.0
bn yenPremier
Investment
Corporation
Japan Logistics
Fund, Inc.
Overseas REIT

Variousasset types
326.9 bn yen

Approximately

Japan Logistics
Fund, Inc.
Overseas REIT•

Financing for warehousing SPCs by SMFL
Provision of environmentally-friendly technology andknowhow•

Other necessary support including cooperation insecuring human resources and provision of training

44

Property Sourcing and Acquisition Methods
Multiple pipelines
Support-line(Kenedix Group incl. Kenedix, Inc., the sponsor)

Unique network of KFM
•
•
•
•
•

Real estate funds
Developers
Financial institutions
Construction companies
Corporate sector

Diversified acquisition methods
Joint acquisition Utilizing bridgewith Kenedix Group
funds

Mitsubishijuko Yokohama Bldg.
(Quasi-co-ownership interest)

KDX Mita Bldg.

Percentage share ofproperties acquired
from related parties

Brokerage bysponsor

Acquisition
through
corporateacquisition

KDX Yokohama
Kannai Bldg.

KDX Shin-Nihonbashi
Ekimae Bldg.

42.2%

Strategic mutual transaction with
developers, etc.

KDX Toranomon
1chome Bldg.

KDX Hamamatsucho KDX Shinbashi
Place
Ekimae Bldg.

Percentage share ofproperties acquired
from third parties

Equityinvestment

Senri Life Science
Center Bldg.

57.8%

Note: Each percentage of the acquisitions is estimated as of October 31, 2022.

45

Characteristics of mid-sized office building market
Office market by total floor area
(proportion of number of buildings) (Note 1)

Business office by the numberof employees (Tokyo)
100 people or more
2.4%

5,000 tsubo or more
10.9%
3,000-less than
5,000 tsubo
7.0%

30-99 people
5.9%

Less than
1,000 tsubo
46.7%

10-29 people
17.7%

1,000-less than
3,000 tsubo
35.4%

Mid-sized
office buildings

Mid/small-sizedcompanies

82.1%

Note 1: The above data is the proportion of number of buildings based on size. It
covers rental office buildings located in Tokyo central 5 wards that weresurveyed by CBRE (as of the end of September 2022).
Source: Based on the survey CBRE conducted at the request of the AssetManagement Company.

1-9 people
74.0%

91.7%
Number of office building transactions
by transaction price10.0 bn yen
or more20.6%

5.0-less than
10.0 bn yen
16.8%

Less than
1.0 bn yen
17.3%

Source: Compiled by the Asset Management Company based on theTokyo Metropolitan Government's own tabulation of the "2016
Economic Census - Activity Survey" conducted by the Ministryof Internal Affairs and Communications and the Ministry of
Economy, Trade and Industry.

1.0-less than
5.0 bn yen
45.3%
Mid-sized
office buildings (Note 2)

62.0%

Note 2: The transaction prices of mid-sized office buildings are generally around 1.0 bn yen to 10.0 bn yen.
Source: Compiled by the Asset Management Company based on “the number of office building transactions bytransaction size (FY2008-FY2022)“ (FY2022 is until the end of October 2022) from "Real Estate Transactions
Study" by Urban Research Institute Corporation, a think tank of Mizuho Trust & Banking Co., Ltd.

46

Tokyo 23 Wards Office Stock by Size and Age• Proper repair/maintenance and management are important in order to keep mid/small-sized office buildings competitive
as more than 80% of mid/small-sized office buildings are 20 years or older; new supply is limited
Age of property (year)

Mid/small-sized

Large-sized70
Mid/small-sized: 6.07 mn tsubo
Average age: 33.6 years
Number of properties: 8,620

65
60

Large-sized: 6.91 mn tsubo
Average age: 24.9 years
Number of properties: 758

55
Office buildings withformer earthquake
resistance standards
1.45 mn tsubo (24%)

50

Office buildings withformer earthquake
resistance standards
1.03 mn tsubo (15%)

45
40

20 years or older
5.04 mn tsubo (83%)
Large supply during
the bubble period

20 years or older
3.61 mn tsubo (52%)

35
30
25

Large supply in 1994
Large supply in 2003

20
Less than 20 years
1.03 mn tsubo (17%)

Less than 20 years
3.30 mn tsubo (48%)

15
10Large supply in 2012

50
500,000

300,000

100,000

300-less than 5,000 tsubo (total floor area)
延床300坪以上5,000坪未満（中小規模ビル）(mid/small-sized office buildings)

100,000

300,000

5,000 tsubo or more (total floor area)
延床5,000坪以上（大規模ビル）

500,000(tsubo)(large-sized buildings)

Source： Compiled by the Asset Management Company based on “Office Stock Pyramid 2022" published by XYMAX REAL ESTATE INSTITUTE Corporation on January 12, 2022.

47

Office Building Market (1)Change in asking rent and vacancy rate in Tokyo central 5 wards (January 2002 – October 2022) (Note 1)
Max: 23,014
yen/tsubo(2020/7)

Max: 9.43%(2012/6)(%)
10.0(yen/tsubo)
24,0008.0

22,0006.44%
20,114yen/tsubo

6.0

20,0004.0
18,000

2.0
0.0
2002

16,000
2003

2004

2005

2006

空室率（左軸）Vacancyrate (left axis)

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

平均賃料（右軸）
Average asking rent (right axis)

Note 1: Include office buildings with a standard floor area of 100 tsubo or more in Tokyo business districts (Chiyoda, Chuo, Minato, Shinjuku and Shibuya wards)
Source: Miki Shoji “Office Market Data Tokyo Business Area”

Comparison of occupancy rates of KDO office buildings and market average (Note 2) (Note 3)
(%)

99.4

100.0
97.3
95.3

96.5

96.3

96.2

95.4

95.3

95.3

95.9

97.2

94.4
92.4

90.0

91.2

91.1

91.2

90.8

91.3

94.7

95.5

95.8

96.4

93.4

91.5

99.6

99.2

99.7

99.9

99.9

96.6

97.9

97.7

97.2

94.9

95.0
90.8

98.1

97.0

97.4

97.8

98.3

98.4

98.4

98.7

96.8
95.4

96.1
94.4

93.5

93.6

93.6

KDX Iidabashi Square
Move-out of the tenant which
occupied the whole building

KDX Nihonbashi Kabutocho Bldg.
Move-out of the tenant which
occupied the whole building

85.0
End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
10/10
11/4
11/10
12/4
12/10
13/4
13/10
14/4
14/10
15/4
15/10
16/4
16/10
17/4
17/10
18/4
18/10
19/4
19/10
20/4
20/10
21/4
21/10
22/4
22/10
period period period period period period period period period period period period period period period period period period period period period period period period period

KDO's occupancy rate

Market occupancy rate

Note 2: Market occupancy rate refers to the average value of Tokyo central 5 wards for each corresponding month published by Miki Shoji.
Note 3: KDO’s average occupancy rate refers to the weighted average occupancy rate of the office buildings in Tokyo central 5 wards that KDO owns as of the end of each fiscal period.

48

Office Building Market (2)Central Tokyo Class A, B, and C office contract-based rent / month・tsubo (excluding common area charges) (Note 1) (Note 2)(yen)
50,000Class A in central Tokyo
東京都心部Aクラス

Class B in central Tokyo
東京都心部Bクラス

Class C in central Tokyo
東京都心部Cクラス

45,00040,00035,00030,00025,00020,00015,00010,000Class C buildings have relatively smaller fluctuation in contract-based rents than class A counterparts
5,000
0'00Q4 '01Q4 '02Q4 '03Q4 '04Q4 '05Q4 '06Q4 '07Q4 '08Q4 '09Q4 '10Q4 '11Q4 '12Q4 '13Q4 '14Q4 '15Q4 '16Q4 '17Q4 '18Q4 '19Q4 '20Q4 '21Q4
Note 1: Central Tokyo: Major office district in five key wards in central Tokyo and adjacent areas ("Gotanda/Osaki“, "Kita-shinagawa/Higashi-shinagawa“, "Yushima/Hongo/Koraku“, and "Meguro Ward"
Note 2: Class A building: Total floor area of at least 10,000 tsubo, single-floor area of at least 300 tsubo, and up to 15 years old
Class B building: Building with single-floor area of at least 200 tsubo but has become outside the scope of A-class (including those that have grown older than 15 years)
Class C building: Single floor area of at least 100 tsubo and less than 200 tsubo (no restriction in terms of building age)
Source: Sanko Estate and NLI Research Institute49

List of Green Certified Properties
The property which newly acquired certification after the fiscal period 2022/10
DBJ Green Building
Certification

No.

Name

Certification
for CASBEE
for Real Estate

A-3

Higashi-Kayabacho Yuraku BuildingA

A-6

Harajuku F.F. BuildingA

A-14 KDX Funabashi BuildingA

A-19 KDX Hamamatsucho BuildingA

A-22 KDX Shin-Yokohama BuildingA

A-32 KDX Shiba-Daimon Building
A-37 KDX Ochanomizu Building★★★

A-42 KDX Karasuma Building

★★★

S
S
A
A

A-58 KDX Nagoya Sakae Building
A-59 KDX Iwamoto-cho Building★★★

A-60 KDX Harumi Building
A-63 KDX Gotanda Building★★★

A-66 KDX Shinjuku Building
A-67 KDX Ginza 1chome Building★★

A-69 KDX Kobayashi-Doshomachi Building
A-72 KDX Higashi-Shinagawa Building★★★

A-82 KDX Higashi Umeda Building
A-83 KDX Fuchu Building

★★★★
S

★★

A-51 KDX Hamacho Nakanohashi Building
A-53 KDX Hakata-Minami Building

A-73 KDX Hakozaki Building
A-79 KDX Nagoya Ekimae Building

A
A
S
A
S

★★★
A
★★
★★
★★

A-84 KDX Kasuga Building
A-85 KDX Nakameguro BuildingA
A

A-87 Nihonbashi Horidomecho First
A-89 KDX Takanawadai BuildingA

A-90 KDX Ikebukuro Building
A-93 KDX Iidabashi SquareNo.

A

A-44 KDX Sendai Building
A-46 Hiei Kudan-Kita Building
A-48 KDX Kawasaki-Ekimae Hon-cho Building

BELS Certification

A-94 KDX Musashi-Kosugi Building
A-95 KDX Toyosu Grand Square
A-96 KDX Takadanobaba Building
A-97 KDX Utsunomiya Building
A-98 KDX Hiroshima Building
A-99 KDX Ikebukuro West Building
A-100 Senri Life Science Center Building
A-101 KDX Yokohama Building
A-106 KDX Sakura-dori Building
A-107 KDX Ginza East Building
A-109 KDX Hamamatsucho Center Building
A-110 KDX Shin-Osaka Building
A-111 KDX Nagoya Nichigin-mae Building
A-112 KDX Toranomon 1chome Building
A-113 KDX Shin-Nihonbashi Ekimae Building
A-115 ARK Mori Building
A-116 KDX Nishi-Shinbashi Building
A-117 BR Gotanda
A-118 KDX Sapporo Kitaguchi Building
A-119 KDX Shibuya Nanpeidai Building
A-121 Ginza 4chome Tower
A-122 Mitsubishijuko Yokohama Building
A-123 KDX Yokohama Kannai Building
A-124 KDX Hamamatsucho Place
A-125 KDX Chofu Building
A-128 KDX Shinbashi Ekimae Building
Numbers of the properties
with certifications (Note)

A
★★
★★★

Name

★★★

DBJ Green
Building
Certification

Certification
for CASBEE
for Real Estate

★★★★
★★★★

BELS
Certification

★★★
A
S
S
A

★★★
★★★
★★★
A
A
A
★★★
★★★★

S
A
S

★★★
A
S
★★
★★
S
★★★
★★★★
★★★

★★★
S

★★

Ratio ofcertified properties (Note)

57 properties

70.3%(+10 properties fromthe end of previous period)(+5.9% from the end of
previous period)

Note: 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 of aggregated properties that haveacquired environmental certifications by the total floor area of the entire portfolio.

50

KDO Unitholders(as of the End of the Fiscal Period Ended October 31, 2022)
Changes in unit holding ratio by type of unitholders (Note)
End of21/10 period

63.8%

3.1%

2.3%

Top 10 unitholders (Note)

30.8%
Number ofunits held
(unit)

Percentage
share

Custody Bank of Japan, Ltd. (Trust Acct.)

95,37922.5%

The Master Trust Bank of Japan, Ltd. (Trust Acct.)

66,558

15.7%

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

18,979

4.5%

STIZHTING PENSIOEN FONDS ZORG EN WELZIJN

16,254

3.8%

Kenedix, Inc.

15,421

3.6%

SMBC Nikko Securities Inc.

11,5022.7%

SSBTC CLIENT OMNIBUS ACCOUNT

8,093

1.9%

Name
End of22/4 period

3.0%

59.4%

5.3%

32.3%

End of22/10 period

3.4%

58.9%

5.4%

32.3%

Individuals and others

Financial inst. (incl. securities cos.)

Other domestic cos.

Foreign cos. and individuals

Number of unitholders(Person)End of 2021/10

End of 2022/4

End of 2022/10

4,192

4,130

4,288

City / Trust Bank

9

8

8

Regional Bank

30

31

33

68

66

65

30

30

28

STATE STREET BANK WEST CLIENT - TREATY
505234

6,081

1.4%

Total

137

135

134

STATE STREET BANK AND TRUST COMPANY
505103

5,945

1.4%

Other Domestic Cos.

94

86

89

Foreign Cos. and Individuals

291

295

297

Mizuho Securities Co., Ltd.

5,548

1.3%

Total

4,714

4,646

4,808

249,760

58.9%

Individuals and Others

Financial Inst.
(Incl. Securities
Cos.)

Credit Union andOthersLife / Nonlife,
Securities

Total

Note: Ratios are rounded to the first decimal place.

51

Historical Changes in Unit PriceHistorical changes in unit price (January 4, 2012 – November 30, 2022)(yen)
500,000
PO Public offering

May
2014

400,000
Nov.
2013

300,000

Nov.
2014

May
2018

PO

PO

Inclusion into indices• FTSE EPRA/NAREIT
Global Real Estate Investors index

POPO

200,000• S&P Global Property Index/
S&P Global REIT Index

100,0000

2012/1 2012/7 2013/1 2013/7 2014/1 2014/7 2015/1 2015/7 2016/1 2016/7 2017/1 2017/7 2018/1 2018/7 2019/1 2019/7 2020/1 2020/7 2021/1 2021/7 2022/1 2022/7

KDO unit price
本投資法人投資口価格

Comparison between rebased unit price and TSE REIT Index(January 4, 2012 – November 30, 2022)
400
350• TSE REIT Core Index

300(started on March 26, 2018)

250
200
150
100
50

2012/1 2012/7 2013/1 2013/7 2014/1 2014/7 2015/1 2015/7 2016/1 2016/7 2017/1 2017/7 2018/1 2018/7 2019/1 2019/7 2020/1 2020/7 2021/1 2021/7 2022/1 2022/7

KDO
本投資法人投資口価格（2012年1月4日=100）
unit price (rebasing January 4, 2012 = 100)

東証REIT指数（2012年1月4日=100）
TSE REIT Index (rebasing January 4, 2012 = 100)

Note: A two-for-one unit split was implemented on November 1, 2022, and unit prices prior to October 31, 2022 have been converted to once-half to facilitate comparisons during the subject term.

52

Allocation rule for property information in the Groupand management guidelines
Kenedix Group's fund management structure

Overview of preferential study rights for property information

70% owned
100% owned

Kenedix, Inc.

Sumitomo Mitsui Finance and Leasing
Company, Limited

100% owned

Kenedix Investment
Partners, Inc.
(Private funds business)

100% owned

SMFL MIRAI Partners Company,
Limited• For mid-sized office buildings (Note 1), the Investment Corporation’s maininvestment targets, it will have the first opportunity to consider property
acquisition among the other REITs if the following conditions are satisfied:
Location

Total floor area per building (m2)Tokyo 23 wards

2,000 or more, 13,000 or lessOutside Tokyo 23 wards

3,000 or more, 20,000 or less

Support-line
OfficeREIT Dept.

Residential
REIT Dept.

RetailREIT Dept.

PrivateREIT Dept.

Kenedix Office
Investment
Corp.

Kenedix
Residential
Next
Investment
Corp.

Kenedix Retail
REIT Corp.

Kenedix
PrivateInvestment
Corp.

Mid-sized
officebuildings

1st

-

-

2nd

Other officebuildings

2nd

-

-

1st

Residential
properties

-

1st

-

2nd

Central urban
retail/service
properties

3rd-

1st / 2nd

2nd / 1st

Logistics
facilities

-

-

1st

2nd

Kenedix Real Estate Fund Management, Inc.
Kenedix Office
Investment Corp.
(KDO)

Kenedix
Residential Next
Investment Corp.
(KDR)

Kenedix Retail
REIT Corp.
(KRR)

Kenedix Private
Investment Corp.
(KPI)

KDO management guidelines
Targeting portfolio

Officebuildings

Of office buildings, rental office buildings whose main use
under the Building Standards Act is office and whose total floorarea (Note 1) of the entire building fulfills the following:・Tokyo 23 wards: Total floor area 13,000 m2 or less・Outside Tokyo 23 wards: Total floor area 20,000 m2 or lessTargetinvestment ratio

80%～100%

Of office buildings, those that do not fall under the category of
the above
Central urban
retail properties

OthersRetail properties with high tenant substitutability located inhighly bustling districts (Note 2)(Note 2)0%～20%

Land with third-party leasehold (limited proprietary right ofland) or buildings with floor area whose use under the BuildingStandards Act is not subject to investment (Note 3) that are notoffice buildings or central urban retail properties

Note 1: Total floor area of the entire building stated in the certificate of all registered matters.
Note 2: Tokyo central 5 wards (Chiyoda-ku, Chuo-ku, Minato-ku, Shinjuku-ku and Shibuya-ku) or central parts ofgovernment-designated cities.
Note 3: Residential properties, logistics and warehouse facilities, amusement parks, medical, nursing andhealth care-related facilities and golf courses.

Note 1: Office building refers to a property or an asset backed by that in which office use weighs thelargest share of total floor area based on floor area use in accordance with the Building Standards
Law.
Note 2: Retail property is categorized as "retail property" if retail stores occupy the largest floor area and as"service property" if service stores occupy the largest floor area. KRR and KPI have the first andsecond preferential study rights, respectively, in “retail property". KPI and KRR have the first andsecond preferential study rights, respectively, in “service property“.

53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.

54

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