Kenedix Retail REIT Corporation (3453)
Translation of Japanese Original

FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED SEPTEMBER 30, 2016 (REIT)(April 1, 2016 to September 30, 2016)
November 16, 2016
Kenedix Retail REIT Corporation (“KRR”) is listed on the Tokyo Stock Exchange with the securities code number 3453.
(URL http://www.krr-reit.com/en/)
Representative:
Akihiro Asano, Executive Director
Asset Management Company: Kenedix Real Estate Fund Management, Inc.
Representative:
Ryosuke Homma, CEO and President
Inquiries:
Koichiro Nobata, General Manager of Planning Department, Retail REIT Division
TEL+81-3-5623-3868
Planned submission of semiannual securities report:
Planned start of distribution payments:
Preparing presentation material:
Hold a financial brief meeting:

December 26, 2016
December 15, 2016
Yes
Yes (for analysts and institutional investors)(Amounts are rounded down to the nearest million yen)

1．PERFORMANCE FOR THE FISCAL PERIOD ENDED SEPTEMBER 30, 2016 (April 1, 2016 to September 30, 2016)(1) Business Results(Percentages show period-on-period changes)
Fiscal period ended
September 30, 2016
March 31, 2016

Operating Revenues
Millions of Yen
6,374
5,541

%
15.0
8.6

Net Income per Unit
Fiscal period ended
September 30, 2016
March 31, 2016

Operating Income
Millions of Yen
2,973
2,826

%
5.2
14.7

Return on Net Assets
Yen
6,069
6,846

Ordinary Income
Millions of Yen
2,519
2,428

%
3.7
25.2

Ordinary Income to Total Assets
%
2.8
3.5

%
1.5
1.9

Net Income
Millions of Yen
2,518
2,427

%
3.7
25.6

Ordinary Income to Operating
Revenues
%
39.5
43.8

(2) Distribution
Distributions per
Unit (Including
Excess ofEarnings)

Distributions perDistributions in
Unit (Excluding
Excess of Earnings
Excess ofper Unit
Earnings)

Total
Distributions(Including
Excess ofEarnings)
Millions of Yen

Total
Distributions(Excluding
Excess ofEarnings)
Millions of Yen

Total
Distributions in
Excess ofEarnings

Payout Ratio

Distrubution Ratio
to Net Assets

Fiscal period ended
Yen
Yen
Yen
Millions of Yen%
September 30, 2016
5,974
5,888
86
2,523
2,487
36
98.8
March 31, 2016
6,846
6,834
12
2,432
2,427
4
100.0
Note 1:
Total distributions in excess of earnings account for the distributions in regard to the allowance for temporary adjustment.
Note 2:
Due to the issuance of new investment units, the payout ratio is calculated as follows (rounded to the nearest tenth).
Payout Ratio = Total Distributions (Excluding Excess of Earnings) /Net Income × 100
When calculated as follows, the payout ratio is 100.2% for the fiscal period ended March 31, 2016 and 100.2% for the fiscal period ended September 30, 2016.
Payout Ratio = Total Distributions (Including Excess of Earnings) /Net Income × 100

%
2.6
3.0

(3) Financial Position
As of
September 30, 2016
March 31, 2016

Total Assets
Millions of Yen
179,360
150,009

Net Assets
Millions of Yen
96,73980,034

Cash Flows fromOperating Activities
Millions of Yen
3,234
4,570

Cash Flows from
Investing Activities
Millions of Yen(27,162)(38,295)

Net Assets to Total Assets

Net Asset Value per Unit

%
53.9
53.4

Yen
228,996
225,291

Cash Flows from
Financing Activities
Millions of Yen
25,901
36,829Cash and Cash Equivalents
at the End of the period
Millions of Yen
13,22911,255(4) Cash Flows
Fiscal period ended
September 30, 2016
March 31, 2016

This is an English-language translation of the original Japanese announcement on our website released on November 16, 2016. However, no assurance or warranties are given withrespect to the accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of discrepancies between this translation and the Japaneseoriginal.
1Kenedix Retail REIT Corporation (3453)
2．EARNINGS FORECASTS FOR THE FISCAL PERIODS ENDING MARCH 31, 2017 (October 1, 2016 to March 31,2017) AND SEPTEMBER 30, 2017 (April 1, 2017 to September 30, 2017)(Percentages show period-on-period changes)
Distributions perDistributions inDistributions per
Operating Income
Ordinary Income
Net Income
Unit (Excluding
Excess of
Unit (Including(Millions of Yen)
(Millions of Yen)
(Millions of Yen)
Excess ofEarnings per
Excess ofEarnings)
Unit
Earnings)
Fiscal period ending
%
%
%
%
Yen
Yen
Yen
March 31, 2017
6,398
0.4
3,007
1.2
2,547
1.1
2,546
1.1
6,027
13
6,040
September 30, 2017
6,451
0.8
2,925
2,464
2,463
5,830
13
5,843
(2.7)
(3.3)
( 3.3)
Reference:
Forecasted net income per unit (Forecasted net income / Forecasted average number of investment units during period)
For the fiscal period ending March 31, 2017: 6,027 yen For the fiscal period ending September 30, 2017: 5,830 yen
Note :
Distributions per unit are calculated based on the number of investment units issued and outstanding totaled 422,250 as of today.
Operating
Revenues(Millions of
Yen)*OTHERS(1) Changes in Accounting Policies/Changes in Accounting Estimate/Retrospective Restatement(a) Changes in accounting policies accompanying revisions to accounting standards: None(b) Changes in accounting policies other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(2) Number of Investment Units Issued and Outstanding (including treasury investment units)(a) Number of investment units issued and outstanding at the end of the period (including treasury investment units)
As of September 30, 2016: 422,450 units
As of March 31, 2016: 355,250 units(b) Number of treasury investment units at the end of the period
As of September 30, 2016: 0 units
As of March 31, 2016: 0 units
Note: Please refer to “Per Unit Information” on page 26 for the number of investment units used as the basis for calculating net income per unit.

* Status of audit procedures
As of the time of disclosure of this financial report, audit procedures for the financial statements pursuant to the Financial Instruments and Exchange Act of Japan are incomplete.
* Remarks on appropriate use of forecasts of performance and other special notes
Forward-looking statements presented in this financial report, including forecasts of performance, are based on information currently available to KRR and on certain assumptions KRR
deems to be reasonable. As such, actual operating and other results may differ materially from these forecasts as a consequence of numerous factors. The above-mentioned forecasts are
based on “Assumptions for the Forecasts of Financial Results for the Fiscal Periods Ending March 31, 2017 and September 30, 2017” on page 11 for calculation, and our judgment as ofNovember 16, 2016. Actual operating revenues, operating income, ordinary income, net income, distributions per unit and distributions in excess of earnings per unit may vary according
to changes in market conditions. These forecasts do not guarantee the distribution amount.

This is an English-language translation of the original Japanese announcement on our website released on November 16, 2016. However, no assurance or warranties are given withrespect to the accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of discrepancies between this translation and the Japaneseoriginal.
2

Kenedix Retail REIT Corporation (3453)
1. KRR and Related Corporations
Management structure of KRR as of November 16, 2016 is as follows.

(1) Asset management agreement / Property management agreement(2) Asset custodian agreement / Unitholders’ registry agreement / General administration agreement(3) Fiscal, issuing and paying agency agreement(4) Memorandum of Understanding / Trademark license agreement(5) Alliance agreements
Note 1: Kenedix, Inc. is the parent company (referring to the parent company stipulated in Article 8, paragraph 3 of Ordinance on Terminology, Forms, and Preparation
Methods of Financial Statements, etc. (Ordinance of the Ministry of Finance No.59 of the year 1963, including amendments thereafter)) of the Asset Management
Company. Kenedix, Inc. is deemed a specified related company of KRR (referring to the specified related company stipulated in Article 12, paragraph 3 of the Cabinet
Office Ordinance on Disclosure of Information, etc. on Specified Securities (Ordinance of the Ministry of Finance No. 22 of the year 1993, including amendments
thereafter)).
Note 2: Yoshiyuki Wada resigned as supervisory director on June 30, 2016 and Yoshitoshi Yasu was appointed as new supervisory director on July 1, 2016.
Note 3: KRR entered into an alliance agreement with ITOCHU Corporation on August 10, 2016. KRR also entered into an amendment agreement with Nippon Commercial
Development Co., Ltd. on August 10, 2016 to amend the alliance agreement signed in November, 2014.

3

Kenedix Retail REIT Corporation (3453)
2. Investment Policies and Status of Asset Management(1) Investment Policies
As there have been no significant changes from policies described in “Investment Policy,” “Investment Properties” and “Distribution Policy”
in the Securities Registration Statement (submitted on June 29, 2016; prepared in Japanese only), the disclosure is omitted.
(2) Status of Asset Management(Overview of the Period ended September 30, 2016)i) Transition of KRR
KRR was established on October 3, 2014, under the Act on Investment Trusts and Investment Corporations of Japan (the “Investment
Trust Act”). On October 30, 2014, KRR was registered with the Director-General of the Kanto Local Finance Bureau (registration
number: Director-General of the Kanto Local Finance Bureau No. 97). KRR was listed on the Real Estate Investment Trust Securities (JREIT) Market of Tokyo Stock Exchange, Inc. (the Tokyo Stock Exchange) (Securities code: 3453) on February 10, 2015. Subsequently,
KRR raised funds through public offerings, including an international offering. As a result, the number of investment units issued at the endof the period ended September 30, 2016 was 422,450 units.
KRR seeks to invest primarily in neighborhood, community and other shopping centers that cater to the day-to-day needs of local area
customers and have stable demand from retailers and customers, in order to provide stable investment returns over the long term.
Sponsored by Kenedix, Inc., a leading, independent real estate asset management company, KRR entrusts its asset management andinvestment operations to Kenedix Real Estate Fund Management, Inc. (“KFM”), with the following strategies.
Note:

For our management purposes and ease of classification, we define neighborhood, community and other shopping centers for daily needs as retailproperties that generally have the following characteristics:
a. Retail trade area of approximately a one to ten kilometer radius (and generally, a three to five kilometer radius), with customers predominantly fromlocal areas surrounding the retail property
b. Operational capacity to accommodate certain daily local retail needs and strong customer traffic on both weekdays and weekends
c. Composed of various specialty stores to meet a range of day-to-day needs such as groceries, clothing and other daily goods and servicesii) Investment Environment
There were signs of a moderate economic rebound in Japan with recoveries in employment and income environment. Real GDP growth(2nd preliminary estimate) in the second quarter of 2016 was positive 0.7% on an annualized basis, indicating positive figures for two
consecutive quarters. However, uncertainty in economy remains due to economic slowdown in developing countries, appreciation of yen
and movements regarding Brexit.
As for Japan’s retail market, disparities among the retail market are seen as general merchandize stores (GMS) are reported to be struggling,
but supermarkets and drugstores are performing relatively well, although there were some effects of bad weather.
The financial environment remained unstable due to global market events such as economic slowdown in China and UK decision of Brexit,
and appreciation of yen. In addition, although decline in interest rates following the introduction of negative interest rate policy by the Bankof Japan in January 2016 temporarily pushed the TSE REIT Index up, the market got weak as expectation of additional monetary easing
receded with concerns over side effects of negative interest rate policy. On the other hand, in the real estate market, J-REITs continue topurchase a substantial number of properties because of monetary easing and brisk equity raising activities by J-REITs.
iii) Management Performance(A) Acquisition of Assets
KRR acquired and started the operations of the following trust beneficiary interests in real estate (one property acquired on April 20, 2016
with acquisition price of 1,724 million yen, five properties acquired on April 21, 2016 with acquisition price of 21,393 million yen and one
property acquired on April 22, 2016 with acquisition price 4,010 million yen). As a result, the portfolio at the end of the period underreview (September 30, 2016) consists 40 properties with the total acquisition price of 158,766 million yen.
Location(City or Ward,
Prefecture)

Acquisition
price(million yen)
(Note 2)

Property
number

Property type
(Note 1)

T-15

NSC

Nakamachidai Tokyu Store

Yokohama, Kanagawa

3,360

April 21, 2016

T-16

SS

Central Wellness Club Nagatsuta Minamidai

Yokohama, Kanagawa

1,724

April 20, 2016

T-17

SM

Life Kameido

Koto-ku, Tokyo

1,450

April 21, 2016

O-10

NSC

Million Town Tsukaguchi (Land)

Amagasaki, Hyogo

3,723

April 21, 2016

N-4

SS

Homecenter Kohnan Sunadabashi

Nagoya, Aichi

7,140

April 21, 2016

R-7

Urban Station-Front SC

Solala Plaza

Sendai, Miyagi

5,720

April 21, 2016

Property name4

Acquisition date

Kenedix Retail REIT Corporation (3453)
R-8

NSC

P-1 Plaza Tenno

Hamamatsu, Shizuoka

4,010

Total
Note 1:

April 22, 201627,127

Properties are categorized into the following five types of retail properties for daily needs: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC(Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center) and SS (Specialty Store).
We categorize these properties generally into five separate groups as follows.
Type of neighborhood, community andFeatures
Trade areaother shopping centers for daily needs
Shopping centers with a supermarket as an anchor or core tenant and several specialty
three to five
NSC (Neighborhood Shopping Centers)
store tenants
kilometer
SM (Supermarkets)

Stand-alone stores that primarily provide groceries, with a retail trade area

threekilometer

CSC (Community Shopping Centers)

Larger shopping centers than NSC, which have a supermarket as an anchor or core tenantin addition to specialty store tenants

five to ten
kilometer

Shopping centers that are located in the immediate vicinity of an urban public
three to tentransportation station, which take advantage of stable foot traffic
kilometer
Single- or multiple-tenant shopping centers that specialize in a single type of merchandise
one to ten
SS (Specialty Stores)
or service, such as drug stores, convenience stores, health clubs or electronic appliancekilometer
stores“Acquisition price” represents the purchase price of each trust beneficiary interest specified in purchase agreement in relation to the acquisition of each property(excluding acquisition costs, adjustment in property tax and city-planning tax, and consumption tax; and rounded down to the nearest one million yen).
Urban Station-Front Shopping Centers

Note 2:(B) Management and Operation of Assets
KFM provides property management services for all of the properties owned by KRR at the end of the period under review (September 30,2016). By using the same company for both asset management and property management services, KRR aims to build stronger
relationships with tenants and increase returns from its portfolio. Furthermore, by implementing retail property management that betterreflects the needs of our tenants, KRR strives to accumulate know-how and improve tenant satisfaction. KRR invests primarily inneighborhood and community shopping centers that cater to the day-to-day needs of customers. The portfolio is diversified in terms ofproperties, tenants and other characteristics with a goal to generate consistent long-term cash flows. At the same time, a portion of the rent
includes sales-linked rent to explore the upside potential (Note 1) for rental income. By using these measures, we aim to pursue a portfoliothat achieves both stability and growth.
As of the end of the period under review, portfolio as a whole performed well with an overall occupancy ratio of 99.7%. Furthermore, theportfolio is diversified in terms of tenants as there are 405 end-tenants (Note 2) in our retail properties.
Note 1:
Note 2:“Upside potential” represents feasibility of rental income growth.
The number of end-tenants isthe sum of the number of end-tenants in a pass-through-type master lease and the number of master leassees in a sub-lease-type
master lease.

(C) Financing
When financing to acquire properties, KRR seeks to achieve the proper balance between financial stability and the cost of the funds withthe objectives to achieve stable medium- to long-term returns and consistent growth of assets under management.
(Equity Finance)
In the fiscal period under review, KRR sold a total of 64,000 newly issued units offered in Japan and overseas on April 20 2016, andraised 15,856 million yen to acquire properties. In addition, 3,200 units were issued through third-party allotment on May 18, 2016,
raising 792 million yen that was used to prepay a portion of borrowing for acquisition of properties. Due to these activities, unitholders’capital increased to 94,256 million yen as of September 30, 2016.
(Debt Finance)
During the fiscal period under review, KRR borrowed for the acquisition of properties and used the proceeds from the issuance of newly
issued units through third-party allotment for the early repayment of debt. Consequently, debt totaled 69,300 million yen at the end of the
fiscal period under review (September 30, 2016).
When undertaking borrowings, we seek to mitigate refinancing risks, by spreading out repayment dates and lengthening borrowing
periods. On the other hand, we partially borrowed short-term loans from the point of flexibility under the finanacing strategy, also
controlling financing cost. We use swaps to fix the interest payments to hedge against the risk of a rise in interest rates.
The below are borrowings at the end of the fiscal period.
SeriesLenderAmount(in thousandsof yen)Interest rate

6-A-1

Sumitomo Mitsui Banking Corporation

4,140,000

JBA 1-month JPY
TIBOR + 0.45%

5Drawdown
date

Repayment date
(Note 1)

Repayment
methodRemarks

April 21, 2016 April 21, 2017

Full onmaturity

Unsecured/
UnguaranteedKenedix Retail REIT Corporation (3453)
6-A-2

Mizuho Bank, Ltd.

360,000

6-B-1

Mizuho Bank, Ltd.

710,000

6-B-2

Sumitomo Mitsui Trust Bank, Ltd.

6-C

Sumitomo Mitsui Trust Bank, Ltd.

6-D
6-E
6-F
(Note 4)
7-A

7-B
Note 1:
Note 2:
Note 3:Note 4:

JBA 1-month JPY
TIBOR + 0.45%
0.36800%(Note 2)620,000

April 21, 2016 April 21, 2017
April 21, 2016

September 30,
2019

0.80300%
September 30,
April 21, 2016
(Note 2)2024
0.76031%
September 30,
Full on
Unsecured/
April 21, 2016
Development Bank of Japan Inc.
890,000(Note 3)2024
maturity
Unguaranteed
0.93200%
April 21, 2016 April 21, 2026
Sumitomo Mitsui Banking Corporation
2,670,000(Note 2)
JBA 1-month JPY
Sumitomo Mitsui Banking Corporation
800,000
April 21, 2016 April 21, 2017
TIBOR + 0.45%
JBA 1-month JPY
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
1,070,000
April 22, 2016 April 21, 2017
TIBOR + 0.45%
0.88800%
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
890,000
April 22, 2016 October 31, 2025
(Note 2)
The repayment date will be the following business day in case such date falls on a day that is not a business day or the preceding business day in case such date falls in
the next calendar month.
These borrowings are floating interest rates. However, we have entered into interest rate swap agreements to hedge the risks of interest rate volatility. These rates are theinterest rates including the effect of the swaps (i.e., fixed interest rates).
These borrowings are fixed rates.
As for Series 6-F, there was no balance as of September 30, 2016 as it was prepaid in full on May 31, 2016. The repayment of Series 6-F was funded by net proceedsfrom the sale of new investment units through a third-party allotment with a May 18, 2016 payment date.
450,000

As a result, the average remaining years to maturity is 4.6 years, the weighted average interest rate is 1.00%, the long-term debt ratio is
82.6% and the LTV ratio (note), is 42.5%.
Note:

The LTV ratio, or loan-to-value ratio, is the ratio of the total amount of borrowings, corporate bonds and tenant leasehold and security deposits (net of amounts
reserved for return of tenant leasehold and security deposits), to the total assets minus amounts reserved for return of tenant leasehold and security deposits.

(Credit Ratings)
The status of the credit ratings as of September 30, 2016 is as follows.
Credit Rating Agency
Details of the Ratings
Japan Credit Rating Agency, Ltd. (JCR)
Long-Term Issuer Rating
A (Outlook: Stable)(Shelf Registration)
KRR filed a shelf registration statement for investment corporation bonds (excluding short-term investment corporation bonds) on
September 29, 2016. Details are as follows.
Planned Issue Amount

100,000,000,000 yen

Planned Issuance Period

October 7, 2016 to October 6, 2018

Use of Funds

Acquisition funds for specified assets (as defined in Article 2, Paragraph 1 of the Investment TrustLaw), repayment funds for borrowings, repayment funds for investment corporation bonds(including short-term investment corporation bonds), refund funds for lease and guarantee deposits,
funds to pay for repairs and maintenance, working capital, etc.

iv) Results of Operations
For this period, revenue was 6,374 million yen, operating income was 2,973 million yen, ordinary income was 2,519 million yen and net
income was 2,518 million yen.
Furthermore, in accordance with the distribution policy in the KRR Articles of Incorporation, KRR made a distribution (excluding excessof earnings) of 2,487,385,600 yen which is almost equivalent to the earnings as defined in Article 136-1 of Act of Investment Trust andInvestment Corporations for the fiscal period. Cash distributions are paid in accordance with Article 67-15 of the Special Taxation
Measures Law (Law No. 26 of 1957, including subsequent amendments). Consequently, the distribution per unit (including the
distributions in excess of earnings) was 5,888 yen.
Furthermore, in accordance with the policy for “Distribution of Money in Excess of Profits” as stated in the KRR Articles of Incorporation,
KRR made a distribution in excess of earnings for the 36,330,700 yen allowance for temporary adjustment (as defined in Article 2-2-30 of
the Ordinance on Accountings of Investment Corporations (Cabinet Office Ordinance No.47 of 2006, including subsequent
amendments.)) for the purpose of reflecting the effect on distributions of the difference in earnings calculated under Japanese GAAP andJapanese tax laws in association with the amortization of fixed-term land lease rights (as defined in Article 2-2-30 (a) of the Ordinance on
Accountings of Investment Corporations) and the item deducted from net asset (as defined in Article 2-2-30 (b) of the Ordinance on
Accountings of Investment Corporations) in association with deferred losses on hedges. This resulted in a distribution in excess of earnings
per unit of 86 yen.
Consequently, the distribution per unit for the fiscal period, including this excess distribution, was 5,974 yen (of which the distribution in6Kenedix Retail REIT Corporation (3453)
excess of earnings per unit was 86 yen).
(Outlook)i) Outlook for Asset Management
The Japanese economy is expected to continue to recover at a moderate pace. However, we should pay attention to uncertainties about theoverseas economy and politics regarding the economic slowdown in China, movements regarding Brexit, the direction of U.S. financial
policies, the inauguration of the new U.S. President, etc. We also need to pay attention to changes in domestic economic environment, suchas appreciation of yen and effects of “Quantitative and Qualitative Monetary Easing with Yield Curve Control” including the negativeinterest rate policy.
As for Japan’s retail sector environment, disparities among the retail market are seen as general merchandize stores (GMS) are reported to
be struggling, but supermarkets and drugstores are performing well, and we anticipate that this trend to continue.
In the real estate trading market, we anticipate the high level of transaction volume to continue because of the strong appetite of J-REITs
and other investors to acquire properties. The Bank of Japan’s monetary easing measures will help provide continuous supply of adequate
funds in the real estate market. However, investors should also keep in mind the risk of changes in banks’ lending attitude towards realestate sector, as amount of banks’ outstanding loans towards real estate sector reached new highs.
From a medium to long-term perspective, to generate a steady stream of rental revenue, consistently increase our assets and establish asuitable financial position, KRR will continue to manage assets based on the following policies.
(A) Investment Strategy for New Properties and Disposition Policy
We receive a variety of support from many sources in order to achieve the steady growth of our assets and increase the value of our assets.
One source is the Kenedix Group, including Kenedix, Inc., the parent company of KFM (Note 1). We also receive support from ourAlliance Companies: Sumitomo Mitsui Finance and Leasing Co., Ltd., Nippon Commercial Development Co., Ltd., P&D Consulting Co.,
Ltd., and ITOCHU Corporation (Note 2). We are implementing a growth strategy that takes full advantage of the external growth
opportunities created by the large and diverse acquisition pipeline made possible by the support of these companies.
When acquiring properties, we make decisions based on all applicable factors with emphasis on four parameters: the retail property’s
attractiveness, its location, the property’s profitability and the tenant mix. By using this selection process results, we invest in retailproperties with a competitive edge, and good prospects for consistent rental revenue and growth in asset value. We also invest in landownership interests underlying retail properties. Regarding land-only properties, we make these investments after examining the terms of
the land leasing agreement, the characteristics of the tenant, the asset value of the land, and the proportion of land-only properties in our
portfolio. We may also consider making an equity investment in a tokumei kumiai (silent partnership) for the acquisition of preferential
negotiation rights and opportunities for additional revenues, provided that we are given an opportunity to acquire them in the future.
Regarding disposition of a portfolio property, we make decisions based primarily on the significance of these properties in the context ofthe portfolio. This is assessed by comprehensive evaluation of the outlook for future profitability and asset value determined based on its
current profitability and market trends.
Note 1:
Note 2:The Kenedix Group consists of Kenedix, Inc. and its subsidiaries and affiliates.
KRR newly entered into an alliance agreement with ITOCHU Corporation on August 10, 2016.

(B) Management Strategy for Existing Properties
KRR is committed to building a portfolio that can pursue both stability and growth. We believe that implementing integrated asset andproperty management services makes it possible to properly manage retail properties and pursue internal growth. Furthermore, thisintegrated management framework facilitates activities to enliven local communities where our properties are located, enabling us to aim
for medium to long-term growth in asset value.
To accomplish these goals, KFM oversees properties owned by KRR while placing priority on the following themes.
・“One-stop” asset management and property management services
・Continuously implementing a retail property management cycle through our in-house property management services
・Pursuit of internal growth through management of retail properties
・Directing investments and management policies to enliven local communities in the medium to long-term“One-stop" asset management and property management services
KRR plans to use the integrated asset management and property management services of KFM for strengthening relationships with tenants
and making the portfolio more profitable.
Continuously implementing a retail property management cycle through our in-house property management services
KFM provides property management services for all of KRR’s properties. We do this for the purposes of performing retail property
7

Kenedix Retail REIT Corporation (3453)
management that better reflects the needs of the tenants as well as accumulating know-how and improving tenant satisfaction. Specifically,
we use direct contact with tenant companies at our properties in order to strengthen tenant relationships and make properties more
profitable. To this end, we maintain periodic communication with tenants and perform questionnaire surveys to customers for monitoringof market conditions, so that we can identify the needs of tenants and the customers visiting their sites. This process makes it possible tofind issues that stand in the way of achieving greater satisfaction for tenants and their customers. Once we have discovered points that
require attention, we take actions that take full advantage of the resources and knowledge regarding retail properties within the Kenedix
Group. Solutions include measures such as the effectively utilizing capital expenditures, optimizing tenant mix, realizing growth in asset
value by pursuing property expansions, and cutting costs, to improve tenant satisfaction and acquire more know-how.
Pursuit of internal growth through management of retail properties
KRR seeks to use the proper management of retail properties to achieve the goals of consistent revenue, higher profitability and growth inasset value.
i. Effectively utilize capital expenditure
We will use proper and well-timed capital expenditures to increase the satisfaction of tenants and make our properties more competitive.
ii. Optimize tenant mix
We will constantly work on attracting new tenants that are highly appealing to shoppers and replace tenants with others, optimizing
tenant composition, in order to seek stable revenue and higher profitability by attracting more customers.
iii. Realize growth in asset value by pursuing property expansions
We will use the extensive knowledge involving retail properties of the Kenedix Group and our Alliance Companies to utilize theunderutilized space (note) at properties and expand properties. These measures will take into account the competitive position of each
property, the effect on our financial position and other factors. By increasing space that can be leased, we would like to increase revenue
and asset value.
Note:

The underutilized space is defined as the area that is calculated by multiplying the floor space ratio, or the ratio of total area of the building to the site area, which isprescribed in Article 52 of the Building Standards Act (Act No.201 of 1950, including subsequent amendments.) and applied to each retail property in accordancewith the Building Standards Act, City Planning Act (Act No.100 of 1968, including subsequent amendments.) and other laws and regulations, by the land area thatis allowed to be used as a retail property site, and subtracting from this figure the actual gross floor area of the building.

Directing investments and management policies to enliven local communities in the medium to long-term
At our retail properties, we seek tenants that provide services, hold community involved events and use other measures to help enliven thelocal communities where our properties are located. We believe these activities will contribute to the medium to long-term growth in theasset value of these properties.
(C) Financing
We will establish a suitable financial foundation by examining numerous financing methods and selecting the optimum ones. These
decisions will reflect interest rates and other elements of the financial environment. Our goal is to select financing methods that result in the
optimum balance between financial stability and the financing cost.
(D) Disclosure of Information
Our policy concerning disclosure activities is to use extensive investor relations activities to distribute a broad range of information toinvestors and other related parties as well as to announce information as soon and as accurately as we can. We use TDnet (Timely
Disclosure network) and press releases to meet the timely-disclosure requirements of the Tokyo Stock Exchange. In addition, we
proactively post information on our website (http://www.krr-reit.com/en/).
(E) Conflicts of Interest
In addition to managing the assets of KRR, KFM provides asset management services to other investment corporations and real estate
funds. KFM uses a “preferential right for acquisition opportunities” system for the property acquisition process. KFM has a pipeline
committee, which includes a compliance officer, and operates in accordance with rules. This system is structured to prevent improper
allocation of acquisition opportunities as well as conflicts of interest among the REIT and funds managed by KFM. Through thesemeasures, KFM is taking suitable actions regarding conflicts of interest.
(F) Important Subsequent Events
Not applicable8Kenedix Retail REIT Corporation (3453)(Reference Material)(A) Acquisition of Assets
KRR acquired an asset (acquisition price of 1,370 million yen).
“Acquisition price” represents the amount specified in the sale and purchase agreement for the trust beneficiary interests, exclusive of thevarious expenses (acquisition expenses, property tax, city planning tax, consumption tax, etc.) required in the acquisition of the following
assets.
Property
number

Propertytype

Property nameLocation

N-5

SS

K’s Denki Shin-Moriyama (Land)

Nagoya, Aichi

Total

SellerAcquisition price(million yen)

Nippon Commercial
Development Co., Ltd.

--

Appraisal value(million yen)

Acquisition date

1,370

1,410 November 1, 2016

1,370

1,410

-

KRR also acquired a silent partnership equity interest (Acquisition price: 100,000 thousand yen) of JRP8 G.K., which acquired trust
beneficiary interest of Yumemachi Narashinodai Mall, to secure flexible growth opportunities in the future as well as opportunities for
additional revenues on October 31, 2016. Kenedix, Inc. acquired the rest of the silent partnership equity interest of JRP8 G.K. Consequently,
JRP8 G.K. is deemed a related party under the Investment Trust Law.
(B) Asset under Construction
A new building with approximately 397.98 m2 gross floor area (Note 1) (hereinafter the “restaurant building”) is being constructed on theunderutilized site of Unicus Ina, a property owned by KRR. KRR expects the total construction cost for the restaurant building (Note 2) to beapproximately 90 million yen and plans to complete the construction by mid-January 2017.
Note 1:“Gross floor area” indicates the gross floor area written on verification notice of building construction on August 29, 2016.

Note 2:“Total construction cost” indicates the estimate cost of the construction cost (excluding consumption taxes) as of September 30, 2016, provided the construction
contract and the design and supervision consignment contract etc. that have signed. The total construction cost may change due to the change of the construction plan,etc.

(C) Financing
KRR borrowed funds on October 3, 2016 for the repayment of the borrowings that the repayment date came.
Series8(Note 2)
Note 1:
Note 2:

LenderAmount(in thousandsof yen)Interest rate

Drawdown date

Repayment date
(Note 1)

Repayment
methodRemarks

Full on
Unsecured/maturity
Unguaranteed
The repayment date will be the following business day in case such date falls on a day that is not a business day or the preceding business day in case such date falls in thenext calendar month.
The balance as of October 31, 2016 was 3,900,000 thousand yen as 600,000 thousand yen was prepaid on October 31, 2016. The repayment was made using part of funds
raised by investment corporation bonds with a payment date of October 31, 2016.
Sumitomo Mitsui Banking Corporation

4,500,000

JBA 1-month JPY
TIBOR + 0.45%

9October 3,
2016

October 3, 2017

Kenedix Retail REIT Corporation (3453)(D) Issuance of Investment Corporation Bonds
KRR decided to issue investment corporation bonds adopted at the board of directors’ meeting held on September 29, 2016 and the payment
was completed on October31, 2016. The details are provided as follows.
Kenedix Retail REIT Corporation 1st Series Unsecured Investment Corporation Bonds (Ranking pari passu among thespecified investment corporation bonds) (The aforementioned investment corporation bonds shall hereafter be referred to as
the “1st Series Bonds.”)
Name of investment
corporation bonds

Total amount of the bonds
Interest rate
Payment date
Collateral / Guarantee

Redemption method andmaturity

Kenedix Retail REIT Corporation 2nd Series Unsecured Investment Corporation Bonds (Ranking pari passu among thespecified investment corporation bonds) (The aforementioned investment corporation bonds shall hereafter be referred to as
the “2nd Series Bonds.”)
Hereafter, in the “(D) Issuance of Investment Corporation Bonds”, the 1st Series Bonds and the 2nd Series Bonds willcollectively be referred to as the “Investment Corporation Bonds.” There will be no particular mention as to which bond, if
the item is common to both the 1st Series Bonds and the 2nd Series Bonds.
Total amount: 2.0 billion yen
Breakdown: 1st Series Bonds: 1.0 billion yen
2nd Series Bonds: 1.0 billion yen
1st Series Bonds: 0.200% per annum
2nd Series Bonds: 0.600% per annum
October 31, 2016
No collateral or guarantee is applicable, and no assets are specifically reserved as collateral for the Investment Corporation
Bonds.
1st Series Bonds: Friday, October 29, 2021
2nd Series Bonds: Friday, October 30, 2026
The Investment Corporation Bonds may be purchased and cancelled at any time after the payment date, except for the case ofservice regulations and other rules that the statutory or depository otherwise stipulates.
If the maturity date of the Investment Corporation Bonds falls on the bank holiday, the payment will be brought forward to
the previous bank business day.

Ratings

A (Japan Credit Rating Agency, Ltd.)Fiscal agent, issuing agent
and paying agent

Sumitomo Mitsui Trust Bank, Ltd.

Use of funds

Total amount raised (approximate net balance) was 1,980 million yen. 1,380 million yen was used for the acquisition of K's
Denki Shin-Moriyama (Land) on November 1, 2016 and certain related costs pertaining to the acquisition, and 600 million
yen was used for partial prepayment of borrowings with drawdown date of October 3, 2016.

10

Kenedix Retail REIT Corporation (3453)
ii) Earnings Forecasts
For the fiscal period ending March 31, 2017 (From October 1, 2016 to March 31, 2017) and the fiscal period ending September 30, 2017
(From April 1, 2017 to September 30, 2017), the earnings forecasts are estimated as set forth below.
Fiscal period ending March 31, 2017
Operating revenues

6,398 million yen

Operating Income

3,007 million yen

Ordinary income

2,547 million yen

Net Income

2,546 million yen

Distributions per unit

6,040 yen

Of the above, distributions in excess of earnings

13 yenFiscal period ending September 30, 2017
Operating revenues

6,451 million yen

Operating Income

2,925 million yen

Ordinary income

2,464 million yen

Net Income

2,463 million yen

Distributions per unit

5,843 yen

Of the above, distributions in excess of earnings

13 yenPlease refer to “Assumptions for the Earnings Forecasts for the Fiscal Periods Ending March 31, 2017 and September 30, 2017” set forth
below for information on current assumptions for the forecasts of operating results.
Note:

The above forecasts are based on certain assumptions for calculation, and our judgment as of today. Actual operating revenues, operating income, ordinary
income, net income, distributions per unit and distributions in excess of earnings per unit may vary due to changes in market conditions. These forecasts do notguarantee the distribution amount.

Assumptions for the Earnings Forecasts for the Fiscal Periods Ending March 31, 2017 and September 30, 2017
Item
Calculation period

Property portfolio

Operating revenues

Operating Expenses

Assumptions
・The 4th fiscal period: October 1, 2016 to March 31, 2017 (182 days)
・The 5th fiscal period: April 1, 2017 to September 30, 2017 (183 days)
・It is assumed that there will be no changes (any acquisition of new properties or any sale of existing
properties, etc.) in property portfolio of 41 assets, which are 40 existing assets (the “existing assets”) as of
September 30, 2016 and an asset acquired on November 1, 2016 (the “asset acquired in the fourth fiscal
period”), by the end of the fiscal period ending September 30, 2017.
・The actual property portfolio may change due to the acquisition of new properties other than the asset
acquired in the fourth fiscal period or the disposal of owned properties, etc.
・Operating revenues of the existing assets are based on leasing agreements as of September 30, 2016, trendof tenants, real estate market trends and other factors.
・Operating revenue of the asset acquired in the fourth fiscal period is based on its operating revenues
calculated by the information provided by the sellers, leasing agreements as of September 30, 2016, trendof tenants, real estate market trends and other factors.
・Dividends of 2 million yen and 5 million yen are assumed for the fiscal periods ending March 31, 2017 and
September 30, 2017 respectively from the silent partnership equity interest acquired on October 31, 2016.
・Operating revenues are based on the assumption that there will be no rent in arrears or non-payments by thetenant.
・Property-related operating expenses other than depreciation are calculated based on historic data, etc., andthese costs reflect fluctuations in the costs, including leasing costs based on the leasing agreements.
・Depreciation expenses of 720 million yen, and 724 million yen are assumed for the fiscal periods ending
March 31, 2017 and September 30, 2017 respectively, using the straight-line depreciation method.
・482 million yen and 563 million yen of property related tax are expected to be expensed during the fiscal
periods ending March 31, 2017 and September 30, 2017 respectively. For the 9 properties acquired afterJanuary 1, 2016, property-related taxed are not expensed in the fiscal period ending March 31, 2017
because KRR reimbursed the seller, pursuant to the purchase agreement, for the pro rata portion of theproperty-related taxes.
・With respect to building repair expenses, the amount assumed to be necessary for each property is based on
the repair plan of KFM for each fiscal period. However, repair expenses may be substantially different
from the expected amount due to certain unexpected factors.

11Kenedix Retail REIT Corporation (3453)
Item

Assumptions

Non-operating expenses

・The amortization of offering-related costs are expected to be expensed 76 million yen and 76 million yen
for the fiscal periods ending March 31, 2017, and September 30, 2017, respectively. It is assumed that theoffering-related costs are amortized using the straight-line method over 3 years.
・For interest expenses and other debt-related costs, 376 million yen and 376 million yen are expected for the
fiscal periods ending March 31, 2017, and September 30, 2017, respectively.

・As of today, KRR has an outstanding balance of 68,700 million yen in borrowings and 2,000 million yen in
investment corporation bonds .
Borrowings
・The LTV ratio is expected to be 42.9% and 42.9% at the end of the period ending March 31, 2017 andand
September 30, 2017, respectively. (rounded to the nearest tenth)
Investment Corporation
・The LTV ratio has been calculated according to the following formula:Bonds
LTV ratio =(Borrowings + Corporate bonds + Tenant leasehold and security deposits - Amounts reserved
for return of tenant leasehold and security deposits) / (Total assets - Amounts reserved for return of tenantleasehold and security deposits)
・The forecasts are based on our assumption of 422,450 units issued as of today. It is assumed that there will
Investment units
be no changes in the number of investment units due to the new issuance of units until the end of the fiscal
period ending September 30, 2017.
・Distributions per unit (excluding excess of earnings per unit) are calculated in accordance with the
distribution policy outlined in our Articles of Incorporation.
・We assume that there is no effect from the changes in market value of swaps on the distributions per unit
Distributions per unit
(excluding excess of earnings
for the fiscal periods ending March 31, 2017 and September 30, 2017.
per unit)・Actual distributions per unit (excluding excess of earnings per unit) may fluctuate due to various factors
including movements in investment assets, fluctuations in rental revenues caused by tenant replacements,
or unexpected repairs.
・We expect to record Allowance for Temporary Adjustment (ATA) to adjust the temporary differences
between treatment of certain transactions under Japanese GAAP and Japanese tax laws in relation to
Sunny Noma, which results from the depreciation of fixed term land lease right for business purposes, theDistributions in excess of
expensed interest from asset retirement obligations and deprecation of buildings, during the relevant period
earnings per unit
(30 years starting from March 16, 2007).
・KRR has a policy to distribute the amount of increase in ATA, in excess of its earnings. Distributions inexcess of earnings are expected to be 13 yen per unit and 13 yen per unit in the periods ending March 31,2017 and September 30, 2017, respectively.
・Forecasts are based on the assumption that there will be no amendments to the law, taxation system,
accounting standards, public listing regulations, requirements of the Investment Trusts Association, Japan,
Otheretc. that may affect the aforementioned forecast figures.
・Forecasts are based on the assumption that there will be no unexpected. Significant changes in general
economic trends and real estate market trends or other conditions.

iii) Risk Factors
There are no significant changes to the “Investment Risks” in described in the Securities Registration Statement (submitted on June 29,
2016; prepared in Japanese only), the disclosure is omitted.

12Kenedix Retail REIT Corporation (3453)
3. Financial Statements(1) Balance Sheets(in thousands of yen)
Second Fiscal Period(As of March 31, 2016)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Construction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets
Leasehold right in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Long-term deposits
Total investments and other assets
Total non-current assets
Deferred assets
Organization costs
Investment unit issuance costs
Total deferred assets
Total assets

*1

*1

*1
*1

13

Third Fiscal Period(As of September 30, 2016)

3,882,955
10,341,252
192,030
33,750510,522
14,960,512

4,367,293
11,615,129
206,398
112,712477,707432
16,779,673

33,894,083(1,043,077)
32,851,006
1,584,525(68,990)
1,515,535
29,194(1,720)27,47347,611(3,413)44,19899,044,234
5,583
133,488,032

35,24342,409,745(1,707,093)
40,702,651
1,808,630(106,872)
1,701,758
203,295(6,582)
196,71251,813(6,700)45,112
118,225,350
12,015160,918,844

528,555
2,164
530,719524,576
1,883
526,460

10,00036,015583,023
124,960
753,998
134,772,750

10,00036,035651,956
124,960
822,951
162,268,256

35,435
240,764
276,199
150,009,463

30,369281,763
312,132
179,360,062

Kenedix Retail REIT Corporation (3453)(in thousands of yen)

Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Allowance for temporary difference adjustments
Total deduction from unitholders' capital
Unitholders' capital, net
Surplus
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets*1

Second Fiscal Period(As of March 31, 2016)

Third Fiscal Period(As of September 30, 2016)

606,400
6,500,000
285,4706,520
932
748,176
136,468
8,283,968

453,515
12,070,000
267,670
7,108
1,081
859,300
122,669
13,781,345

51,000,000
10,633,432

61,690,859
69,974,828

57,230,000
2,500
11,518,586
23,19064,677
68,838,953
82,620,298

77,606,649

94,256,390

77,606,649(4,263)(4,263)
94,252,127

2,427,985
2,427,985
80,034,634

2,518,802
2,518,802
96,770,929

80,034,634
150,009,463(31,166)(31,166)
96,739,763
179,360,062

23,04534,382*2*3

14

Kenedix Retail REIT Corporation (3453)(2) Statements of Income and Retained Earnings
Second Fiscal Period(From October 1, 2015
to March 31, 2016)
Operating revenues
Rent revenue-real estate
Other lease business revenue
Total operating revenues
Operating expenses
Expenses related to rent business
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Financing-related expenses
Amortization of organization costs
Amortization of investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings(in thousands of yen)
Third Fiscal Period(From April 1, 2016
to September 30, 2016)*1*1

4,656,391
884,665
5,541,057

5,405,789
968,378
6,374,168*1

2,235,833
405,144
4,658
16,4544,500
48,444
2,715,035
2,826,021

2,860,183
438,769
6,375
21,792
4,500
69,0523,400,673
2,973,494

937
715
1,652

51
251
303

275,159
59,213
5,066
59,244
398,683
2,428,991
2,428,991

306,343
65,7805,066
76,922454,1132,519,684
2,519,684

1,075
1,075
2,427,915
70
2,427,985

1,088
1,088
2,518,595
206
2,518,80215

Kenedix Retail REIT Corporation (3453)(3) Statements of Changes in Net Assets
Second Fiscal Period (From October 1, 2015 to March 31, 2016)
Unitholders'
capitalBalance at the beginning of theperiodChanges of items during theperiodIssuance of new investment
units
Dividends from surplus(in thousands of yen)
Unitholders' equity
Surplus
UnappropriatedTotal
retained earnings
surplus57,857,000

1,933,270

1,933,270

19,749,649

Net income
Total changes of items during theperiodBalance at the end of the period

*1

Total
unitholders'equityTotal net assets

59,790,270

59,790,270

19,749,649

19,749,649(1,933,200)(1,933,200)(1,933,200)(1,933,200)

2,427,915

2,427,915

2,427,915

2,427,915

19,749,649

494,714494,714

20,244,364

20,244,364

77,606,649

2,427,985

2,427,985

80,034,634

80,034,634

Third Fiscal Period (From April 1, 2016 to September 30, 2016)(in thousands of yen)
Unitholders' equity

Unitholders' capital
Deduction from unitholders' capital
Allowance for
Total deduction
temporaryfrom unitholders'difference
capitaladjustments

Unitholders'
capitalBalance at the beginning of theperiodChanges of items during theperiodIssuance of new investment
units

77,606,649--

16,649,740

Surplus
Unitholders'
capital, net

Unappropriatedretained earnings

77,606,649

2,427,985(4,263)(4,263)

Balance at the beginning of theperiodChanges of items during theperiodIssuance of new investment
units

80,034,634(2,427,778)(4,263)(2,427,778)(4,263)2,518,595

2,518,595

2,518,595

16,649,740(4,263)(4,263)

16,645,477

90,81790,817

16,736,294

94,256,390(4,263)(4,263)

94,252,127

2,518,802

2,518,802

96,770,929

Valuation and translation
adjustments
Total valuation
Deferred gains or
and translation
losses on hedges
adjustments

Total net assets

*1

-

-

80,034,634

16,649,740(2,427,778)

Dividends from surplus
Distributions in excess ofearnings from allowance fortemporarydifference
adjustments(4,263)

Net income
Net changes of items otherthan unitholder’s equity
Total changes of items during
the period
Balance at the end of theperiodTotalunitholders'equity16,649,740(2,427,778)

Net income
Net changes of items otherthan unitholder’s equity
Total changes of items during
the period
Balance at the end of theperiod2,427,985

16,649,740

Dividends from surplus
Distributions in excess ofearnings from allowance fortemporarydifference
adjustments

Total
surplus2,518,595(31,166)(31,166)(31,166)(31,166)(31,166)

16,705,128(31,166)(31,166)

96,739,763

16

Kenedix Retail REIT Corporation (3453)(4) Statements of Cash Distributions(yen)
Second Fiscal Period(From October 1, 2015 to March 31, 2016)
I.

Retained earnings at the end of period

II.

III.

Third Fiscal Period(From April 1, 2016 to September 30, 2016)

2,427,985,431

2,518,802,609

Distributions in excess of earnings

4,263,000

36,330,700

Of which, allowance for temporary difference
adustments

4,263,000

36,330,700

2,432,041,500

2,523,716,300

6,846

5,974

2,427,778,500

2,487,385,600

6,834

5,888

4,263,000

36,330,700

12

86

206,931

31,417,009

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amount equivalent
to 90% of its distributable profit as stipulated in Article
67-15 of the Special Taxation Measures Law, and shall be
up to its profits as the maximum amount. Following thispolicy, KRR has decided that it shall distribute
2,427,778,500 yen which is the maximum integral
multiple of 355,250 units issued and outstanding as the
distribution of earnings. Procedures for the distribution ofamounts exceeding distributable income are outlined in
Article 39-2 of KRR’s Articles of Incorporation.
Furthermore, in accordance with the policy for“Distribution of Money in Excess of Profits” as stated in
Article 39-2 of KRR’s Articles of Incorporation, KRR
made a distribution in excess of earnings of 4,263,000 yen
for allowance for temporary difference adjustments (asdefined in Article 2-2-30 of the Ordinance on
Accountings of Investment Corporations) for the purposeof reflecting the effect on distributions of the difference inearnings calculated under Japanese GAAP and Japanese
tax laws (as defined in Article 2-2-30 (a) of the Ordinanceon Accountings of Investment Corporations) in
association with the amortization of fixed-term landleasehold rights.

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amount equivalent
to 90% of its distributable profit as stipulated in Article
67-15 of the Special Taxation Measures Law. Following
this policy, KRR has decided that it shall distribute
2,487,385,600 yen which is almost the entire amount ofincome as defined in Article 136-1 of the Investment
Trust Act. Procedures for the distribution of amounts
exceeding distributable income are outlined in Article 392 of KRR’s Articles of Incorporation.
Furthermore, in accordance with the policy for“Distribution of Money in Excess of Profits” as stated in
Article 39-2 of KRR’s Articles of Incorporation, KRR
made a distribution in excess of earnings of 36,330,700
yen for allowance for temporary difference adjustments(as defined in Article 2-2-30 of the Ordinance on
Accountings of Investment Corporations) for the purposeof reflecting the effect on distributions of the difference inearnings calculated under Japanese GAAP and Japanese
tax laws (as defined in Article 2-2-30 (a) of the Ordinanceon Accountings of Investment Corporations) in
association with the amortization of fixed-term landleasehold rights and of the item deducted from net asset(as defined in Article 2-2-30 (b) of the Ordinance on
Accountings of Investment Corporations) in association
with deferred losses on hedges.

Total distributions
Distributions per unit
Of which, distributions of earnings
Of which, distributions of earnings per unit

Of which, allowance for temporary difference
adjustments
Of which, distributions in excess of earnings perunit (allowance for temporary difference
adjustments)
IV. Retained earnings brought forward to the next
periodMethod of calculating distribution amount17

Kenedix Retail REIT Corporation (3453)(5) Statements of Cash Flows(in thousands of yen)

Second Fiscal Period

Third Fiscal Period(From October 1, 2015
to March 31, 2016)(From April 1, 2016
to September 30, 2016)

Net cash provided by (used in) operating activities
Income before income taxes

2,428,991

2,519,684

Depreciation and amortization

566,142

714,452

Amortization of organization costs

5,066

5,066

Amortization of investment unit issuance costs

59,24476,922

Interest income

(937)

(51)

Interest expenses

275,159306,343

Decrease (increase) in operating accounts receivable(28,262)(14,367)

Decrease (increase) in consumption taxes receivable

1,561,226

32,815Decrease (increase) in prepaid expenses(16,987)(78,961)

Increase (decrease) in operating accounts payable

94,580(25,321)

Increase (decrease) in accounts payable-other

25,738(19,393)

Increase (decrease) in advances received

229,469

111,123

Increase (decrease) in deposits received(223,486)(13,799)

Decrease (increase) in long-term prepaid expenses(164,503)(68,932)

Other

36,767(4,103)

Subtotal

4,848,210

3,541,476

937

51Interest expenses paid

(272,051)(305,756)

Income taxes paid

(6,464)(940)

4,570,631

3,234,831-(35,243)(40,463,688)(28,233,179)

Interest income received

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets in trust(361,455)-

Payments for lease and guarantee deposits in trust(30,695)

(20)

-

2,500

Repayments of tenant leasehold and security deposits in trust(286,205)(314,140)

Proceeds from tenant leasehold and security deposits in trust

2,185,372

1,202,094

Proceeds from restricted bank deposits in trust

661,625

215,676(38,295,047)(27,162,312)

Proceeds from short-term loans payable

7,700,000

6,370,000

Payments in short-term loans payable(3,200,000)(800,000)

Proceeds from long-term loans payable

14,650,000

6,230,000

Proceeds from issuance of investment units

19,611,147

16,531,819

Payments of dividends(1,931,323)(2,430,448)

Net cash provided by (used in) financing activities

36,829,824

25,901,371

Net increase (decrease) in cash and cash equivalents

3,105,407

1,973,891

Cash and cash equivalents at the beginning of the period

8,150,002

11,255,410

11,255,410

13,229,301

Proceeds from tenant leasehold and security deposits

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities

Cash and cash equivalents at the end of the period*118Kenedix Retail REIT Corporation (3453)（6）Notes on Assumption of Going Concern
Not applicable（7）Summary of Significant Accounting Policies
1.Method of depreciation of noncurrent assets(1) Property, plant and equipment (including trust assets)
The straight-line method is applied.
Useful lives of the assets ranging are as follows:
Buildings: 2 to 70 years
Structures: 8 to 59 years
Machinery and equipment: 10 to 25 years
Tools, furniture and fixtures: 4 to 10 years(2) Intangible assets (including trust assets)
The straight-line method is applied.
(3) Long-term prepaid expenses
The straight-line method is applied.

2. Accounting for deferred assets(1) Organization costs
Organization costs are amortized over a period of 5 years under the straight-line method.
(2) Investment unit issuance costs
Investment unit issuance costs are amortized over a period of 3 years under the straight-line method.

3. Accounting for revenues andexpenses

Accounting for property-related taxes
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on acalendar year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes
corresponding to said period. Under Japanese tax regulations, the seller of the property is liable for these taxes on the property fromthe date of disposal to the end of the calendar year in which the property is disposed. The seller, however, is reimbursed by thepurchaser for these accrued property-related tax liabilities.
When KRR purchases properties, it typically allocates the portion of the property-related taxes related to the period following thepurchase date of each property through the end of the calendar year. The amounts of those allocated portions of the property-related
taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to 73,320
thousand yen and 106,443 thousand yen as of March 31, 2016 and September 30, 2016, respectively.

4. Method of hedge accounting(1) Hedge accounting method
Deferral hedge accounting is applied. However, the special treatment is applied for the interest-rate swap agreements that meetthe criteria for special treatment.
(2) Hedging instruments and hedged items
Hedge instruments
Interest-rate swap transactions
Hedged items
Interest payments on debts(3) Hedging policy
KRR enters into derivative transactions based on its risk management policies with the objective of hedging risks provided in its
Articles of Incorporation.
(4) Method of assessing the effectiveness of hedging
As for the method of assessment of the effectiveness of the hedge in the period from the inception of the hedge to the time of
judgment of its effectiveness, the cumulative changes in cash flow of the hedged items and hedging instruments are compared
and a judgment is made based on changed amount, etc. However, an assessment of the effectiveness of hedging activities isomitted in the case of interest rate swaps that meet the requirements for special treatment.

5. Scope of cash and cash
equivalents on statements of cash
flows

Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid,readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from thedate of purchase.

6. Other significant accounting
policies for the preparation offinancial statements(1) Accounting method for trust beneficiary interests in real estate and other assets
The assets and liabilities as well as revenues and expenses of financial assets held in the form of trust beneficiary interests in realestate and other assets are recorded in full in KRR’s balance sheet and statement of income and retained earnings.
Of the assets in trust accounted for under the respective account items, the following significant items are separately indicated on
the balance sheet.
1. Cash and deposits in trust
2. Buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, land in trust,construction in progress in trust
3. Leasehold right in trust
4. Lease and guarantee deposits in trust
5. Tenant leasehold and security deposits in trust(2) Accounting method for consumption taxes
Consumption taxes are separately recorded. Non-deductible consumption taxes applicable to the acquisition of assets areincluded in the cost of acquisition for each asset.

19Kenedix Retail REIT Corporation (3453)(Additional Information)(Notes to Allowance for Temporary Difference Adjustments Additions and Reversals)
Second Fiscal Period (From October 1, 2015 to March 31, 2016)
For the Statements of Cash Distributions, KRR allocated an addition of 4,263 thousand yen to the allowance for temporary difference adjustments concerning the amortization ofleasehold right in trust and the amount in excess of depreciation with regard to leasehold rights of Sunny Noma. KRR plans to reverse a corresponding amount when Sunny Noma isdisposed.
Third Fiscal Period (From April 1, 2016 to September 30, 2016)
1. Reasons, related assets and allowance
Related assets, etc.

(in thousands of yen)
Allowance for temporary
difference adjustments

ReasonBuildings in trust,
Leasehold right in trust
Deferred gains or losses onhedgesAmortization of leasehold right in trust and the amount in excess ofdepreciation

5,491

Loss on interest-rate swaps recognized at the end of the fiscal period

30,838

2. Method of reversal
Method of reversal
Buildings in trust,
Leasehold right in trust
Deferred gains or losses onhedgesUpon sale, the corresponding amount is scheduled to be reversed.
Based on changes in the fair value of the hedging instruments, the corresponding amount is scheduled to be reversed.

(8) Notes to Financial Statements(Notes to Balance Sheets)* 1. Assets pledged as collateral and relevant secured liabilities:(in thousands of yen)
Assets pledged as collateral

Second Fiscal Period
As of March 31, 2016

Third Fiscal Period
As of September 30, 2016

Buildings in trust

2,797,203

2,755,048

Structures in trust

55,53853,947-

2,962

Tools, furniture and fixtures in trust
Land in trust
Total
Secured liabilities

7,811,297

7,811,297

10,664,039

10,623,255

Second Fiscal Period
As of March 31, 2016

Tenant leasehold and security deposits in trust
Total

Third Fiscal Period
As of September 30, 2016
3,691,291

3,468,617

3,691,291

3,468,617* 2. Allowance for temporary difference adjustments
Second Fiscal Period (As of March 31, 2016)
Not applicable.
Third Fiscal Period (As of September 30, 2016)
1. Reasons, related assets, initial amount and allowance
Related assets, etc.

ReasonBuildings in trust,
Leasehold right in trust

Amortization ofleasehold right in trust
and the amount in excess
of depreciation

Initial amount

Balance atthe beginningof the period

Allowance
during theperiod

4,263

-

4,263

Reversalduring theperiod

2. Method of reversal
Method of reversal
Buildings in trust,
Leasehold right in trust

Upon sale, the corresponding amount is scheduled to be reversed.

* 3. Minimum net assets prescribed in Article 67-4 of the Investment Trust Act(in thousands of yen)
Second Fiscal Period
As of March 31, 2016

Third Fiscal Period
As of September 30, 2016
50,00050,00020

Balance atthe end of theperiod-4,263

Reason forreversal-

Kenedix Retail REIT Corporation (3453)(Notes to Statements of Income and Retained Earnings)* 1. Breakdown of real estate rental revenues and expenses(in thousands of yen)
Second Fiscal Period
From October 1, 2015
to March 31, 2016

Third Fiscal Period
From April 1, 2016
to September 30, 2016

Rental revenues

3,761,328

4,393,233

Rental revenues from limited proprietary rights of land

598,355

680,862

A. Rental and other operating revenues:
Rent revenue-real estate:

Common area charges

296,707

331,693

4,656,391

5,405,789

Parking space rental revenues

162,060

163,358

Utility charge reimbursement453,733

540,060

Miscellaneous

268,871

264,959

Subtotal

884,665

968,378

5,541,057

6,374,168

Property management fees and facility management fees

637,809684,963

Utilities

495,520

523,159216

482,449

Repairs and maintenance

201,226

150,915

Insurance

10,531

12,341

Trust fees

14,49917,294

Depreciation

565,861

714,171

Others

310,168

274,888

2,235,833

2,860,183

3,305,224

3,513,984

Subtotal
Other lease business revenue:

Total rental and other operating revenues
B. Property-related expenses:
Expenses related to rent business:

Taxes

Total property-related expenses
C. Net operating income from real estate rental business（A-B）(Notes to Statements of Changes in Net Assets)* 1. Total number of authorized investment units and total number of investment units issued and outstanding
Second Fiscal Period
From October 1, 2015
to March 31, 2016

Third Fiscal Period
From April 1, 2016
to September 30, 2016

Total number of authorized investment units

5,000,000 units

5,000,000 units

Total number of investment units issued and outstanding

355,250 units

422,450 units(Notes to Statements of Cash Flows)* 1. Reconciliation of balance sheet items to cash and cash equivalents at the end of period in the cash flows statements
Second Fiscal Period
From October 1, 2015
to March 31, 2016

(in thousands of yen)
Third Fiscal Period
From April 1, 2016
to September 30, 2016

Cash and deposits

3,882,955

4,367,293

Cash and deposits in trust

10,341,252

11,615,129

Restricted bank deposits in trust (Note)(2,968,798)(2,753,121)

Cash and cash equivalents

11,255,410

13,229,301

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

21

Kenedix Retail REIT Corporation (3453)(Notes to Lease Transactions)Operating lease transactions (Lessee)
Future minimum lease payments(in thousands of yen)
Second Fiscal Period
As of March 31, 2016

Third Fiscal Period
As of September 30, 2016

Due within 1 year

10,50010,500Due after 1 year

209,548204,298

Total

220,048

214,798

Operating lease transactions (Lessor)
Future minimum lease income(in thousands of yen)
Second Fiscal Period
As of March 31, 2016

Third Fiscal Period
As of September 30, 2016

Due within 1 year

4,184,868

5,754,371

Due after 1 year

37,858,429

47,304,424

Total

42,043,297

53,058,796（Notes to the Financial Instruments）
1. Overview(1) Policy for financial instruments
KRR procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans from financial institutions, issuance of investment units and othermeans. With regard to the procurement of interest-bearing debts, KRR ensures that it can effectively combine stable long-term funds with flexible short-term funds. Management of
surplus funds is undertaken through various bank deposits focusing on safety, liquidity and effectiveness. KRR uses derivatives for the purpose of hedging its exposure to changes ininterest rates and other risks and does not enter into derivative transactions for speculative or trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing KRR’s surplus funds and are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited.
Borrowings, which are made primarily for the purpose of procuring funds for the acquisition of real estate and trust beneficiary interests in real estate and have a repayment date of a
maximum of 9 years and 7 months as of September 30, 2016, the end of the third fiscal period, are exposed to liquidity risk where alternative funds may not be procured by therepayment date. Also, borrowings with floating interest rates are exposed to interest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk
for a certain portion of the borrowings.
Tenant leasehold and security deposits are deposits received from tenants, which are exposed to liquidity risks when the tenants vacate the properties.
(3) Risk management for financial instrumentsa.
Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored by deposits in non-interest bearing
ordinary savings accounts or with financial institutions with credit ratings above a certain level. In utilizing derivatives, KRR aims to mitigate counterparty risk such as by transactingwith financial institutions with favorable ratings.
b.
Market risk
While borrowings with floating rates are exposed to interest rate volatility risk, such risk is monitored by adjusting the rate of the balance of borrowings with floating rates against
the total borrowings according to the financial environment, interest rate forecasts by continuous monitoring, etc. and by using derivatives, etc. A risk management policy isestablished with regard to the execution and management of derivatives and such transactions are conducted based on this policy.
c.
Liquidity risk
Though borrowings are subject to liquidity risk, KRR reduces such risk by spreading out payment due dates and by diversifying financial institutions. Liquidity risk is also managed
by such means as regularly checking the balance of cash reserves.
Though tenant leasehold and security deposits are subject to liquidity risk, in principle, KRR reduces such risk by retaining funds that would enable KRR to return

necessary amounts to tenants.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value is reasonably estimated. Sincevarious assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in a different fair value.
2. Estimated fair value of financial instruments
The carrying value of financial instruments on the balance sheets and estimated fair value are shown in the following table. Items whose fair values are difficult to determine are notincluded in the following table (Note 2).
Second Fiscal Period
As of March 31, 2016

(1) Cash and deposits(2) Cash and deposits in trust
Total(1) Short-term loans payable(2) Long-term loans payable(3) Tenant leasehold and security deposits in trust
Total
Derivative transactions

Carrying amount
3,882,955
10,341,252
14,224,208
6,500,000
51,000,000
3,509,658
61,009,658
22

Estimated fair value
3,882,955
10,341,252
14,224,208
6,500,000
51,377,832
3,546,858
61,424,691-(in thousands of yen)
Difference
377,832
37,200415,033-

Kenedix Retail REIT Corporation (3453)
Third Fiscal Period
As of September 30, 2016

(1) Cash and deposits(2) Cash and deposits in trust
Total(1) Short-term loans payable(2) Long-term loans payable(3) Tenant leasehold and security deposits in trust
Total
Derivative transactions

Carrying amount
4,367,293
11,615,129
15,982,422
12,070,000
57,230,000
3,408,166
72,708,166(31,166)

Estimated fair value
4,367,293
11,615,129
15,982,422
12,070,000
57,710,245
3,443,698
73,223,944(31,166)(in thousands of yen)
Difference
480,245
35,531
515,777-

Note1: Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying amount approximates fair value.
Liabilities(1) Short-term loans payable
Since these items are settled in a short period of time, their carrying amount approximates fair value.
(2) Long-term loans payable
Among these items, the fair value of loans payable with fixed interest rates is calculated based on the present value, which is the total amount of principal and interest discounted by theestimated interest rate to be applied in the event that KRR conducts new loans of the same type. As for the fair value of loans payable with floating interest rates, it is based on the
carrying amount since market interest rates are reflected in the short term and the fair value is believed to approximate the carrying amount as the credit standing of KRR has notchanged significantly since the loans were made. (However, the fair value of long-term loans payable subject to the special treatment for interest-rate swaps is based on the present
value of the total of principal and interest, accounted for together with the applicable interest-rate swaps, discounted by the estimated interest rate to be applied in the event that KRR
conducts new loans payable of the same type.)(3) Tenant leasehold and security deposits in trust
The fair value is determined based on the present value of contractual cash flows discounted at the discount rate into which the period to the repayment date and the credit risk arereflected.
Derivative transactions
Please refer to “Notes to Derivative Transactions”.
Note2: Financial instruments whose fair values are extremely difficult to determine(in thousands of yen)
Second Fiscal Period
Classification
As of March 31, 2016
Tenant leasehold and security deposits in trust
7,123,774
Total
7,123,774
Because no quoted market price is available and it is extremely difficult to determine their fair value based on estimated future cash flows because the repayment dates of those
deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
(in thousands of yen)
Third Fiscal Period
As of September 30, 2016
2,500

Classification
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust

8,110,419

Total
8,112,919
Because no quoted market price is available and it is extremely difficult to determine their fair value based on estimated future cash flows because the repayment dates of those
deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
Note 3: Redemption of monetary claims scheduled to be due after the balance sheet date
Second Fiscal Period
As of March 31, 2016
(in thousands of yen)

Cash and deposits
Cash and deposits in trust
Total

Due in 1 year or
less3,882,955
10,341,252
14,224,208

Due after 1 year
through 2 years

Due in 1 year or
less
4,367,293
11,615,129
15,982,422

Due after 1 year
through 2 years

Due after 2 years
through 3 years-

Due after 3 years
through 4 years-

Due after 4 years
through 5 years-

Due after 5 years--

Third Fiscal Period
As of September 30, 2016
(in thousands of yen)

Cash and deposits
Cash and deposits in trust
Total

Due after 2 years
through 3 years-

Due after 3 years
through 4 years-

23

Due after 4 years
through 5 years-

Due after 5 years--

Kenedix Retail REIT Corporation (3453)
Note 4: Redemption of long-term loans payable and other interest-bearing debt scheduled to be due after the balance sheet date
Second Fiscal Period
As of March 31, 2016
(in thousands of yen)

Short-term loans payable
Long-term loans payable
Tenant leasehold and security
deposits in trust
Total

Due in 1 year or
less
6,500,000-

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

3,850,000

5,650,000

7,000,000

7,000,000

27,500,000

435,430

435,430

435,430

435,430

435,430

763,938

6,935,430

4,285,430

6,085,430

7,435,430

7,435,430

28,263,938

Due in 1 year or
less12,070,000-

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

3,850,000

6,980,000

7,000,000

7,000,000

32,400,000

Third Fiscal Period
As of September 30, 2016
(in thousands of yen)

Short-term loans payable
Long-term loans payable
Tenant leasehold and security
deposits in trust
Total

435,430

435,430

435,430

435,430

435,430

546,223

12,505,430

4,285,430

7,415,430

7,435,430

7,435,430

32,946,223(Notes to Derivative Transactions)(1) Transactions not subject to hedge accounting
Second Fiscal Period (As of March 31, 2016) and Third Fiscal Period (As of September 30, 2016): Not applicable(2) Transactions subject to hedge accounting
Second Fiscal Period
As of March 31, 2016
Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
year

Fair value(in thousands of yen)Calculation method for
applicable fair value

Interest rate swap
transaction:
Long-term loans
44,900,000
44,900,000*
Receive/floating andpayablepay/fixed*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value is included in the fair value of thehedged long-term loans payable. (Please refer to “Notes to Financial Instruments (Note1) Methods to determine the estimated fair value of financial instruments and matters related toderivative transactions Liabilities (2) Long-term loans payable”.)
Special treatment
of interest-rate
swaps

Third Fiscal Period
As of September 30, 2016
Hedge
accounting
methodPrinciple method

Special treatment
of interest-rate
swaps

Type of derivativetransactions
Interest rate swap
transaction:
Receive/floating andpay/fixed
Interest rate swap
transaction:
Receive/floating andpay/fixed

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
yearLong-term loans
payable5,340,000

5,340,000

Long-term loans
payable44,900,000

44,900,000

Fair value(in thousands of yen)

(31,166)*

Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions-

50,240,000
50,240,000(31,166)*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value is included in the fair value of thehedged long-term loans payable. (Please refer to “Notes to Financial Instruments (Note1) Methods to determine the estimated fair value of financial instruments and matters related toderivative transactions Liabilities (2) Long-term loans payable”.)(Notes to the Related-Party Transactions)
1．Parent Company, major corporate unitholders and other
Second Fiscal Period (From October 1, 2015 to March 31, 2016) and Third Fiscal Period (From April 1, 2016 to September 30, 2016): Not applicable
2．Affiliated companies and other
Second Fiscal Period (From October 1, 2015 to March 31, 2016) and Third Fiscal Period (From April 1, 2016 to September 30, 2016): Not applicable
3．Fellow subsidiary companies and other
Second Fiscal Period (From October 1, 2015 to March 31, 2016) and Third Fiscal Period (From April 1, 2016 to September 30, 2016): Not applicable
4．Directors, major individual unitholders and other
Second Fiscal Period (From October 1, 2015 to March 31, 2016) and Third Fiscal Period (From April 1, 2016 to September 30, 2016): Not applicable24Kenedix Retail REIT Corporation (3453)(Notes to the Tax-Effect Accounting)
1. The significant components of deferred tax assets and liabilities:(in thousands of yen)
Third Fiscal Period
As of September 30, 2016

Second Fiscal Period
As of March 31, 2016
Deferred tax assets:
Enterprise tax payable

22

23

Amortization of leasehold right in trust

2,932

4,189

Depreciation
Asset retirement obligations
Deferred gains or losses on hedges

1,055
7,280
-

1,508
7,325
9,845

Subtotal deferred tax assets

11,29022,892

Valuation allowance(11,290)(22,892)

Total deferred tax assets--

2. The significant differences between the statutory tax rate and the effective tax rate:
Second Fiscal Period
As of March 31, 2016
32.31

(unit: %)Third Fiscal Period
As of September 30, 2016
31.74

Deductible cash distributions
Others(32.35)0.08(31.79)0.09

Effective tax rate

0.04

0.04

Statutory tax rate

(Notes to Asset Retirement Obligations)
Asset retirement obligations reported on balance sheets
1. Summary of the asset retirement obligations
KRR has recognized the original state restoration obligations assumed under the fixed-term business-purpose land leasehold agreement as the asset retirement obligations inconnection with Sunny Noma acquired on February 10, 2015.
2. Method of calculating asset retirement obligations
Asset retirement obligations are calculated based on a discount rate of 1.256% after the useful life has been estimated to be 22 years and two months based on the time period from thedate of acquisition to the expiration of the agreement.
3. Changes in the amount of applicable asset retirement obligations consisted of the following(in thousands of yen)
Second Fiscal Period
Third Fiscal Period
From October 1, 2015
From April 1, 2016
to March 31, 2016
to September 30, 2016
Balance at the beginning of the period
22,901
23,045
Accretion adustment
143
144
Balance at the end of the period
23,04523,190(Notes to the Segment Information)(Segment information)
Disclosure is omitted because the real estate leasing business is KRR’s sole business and it has no reportable segment subject to disclose.
(Related information)
Second Fiscal Period (From October 1, 2015 to March 31, 2016)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on the statement of income andretained earnings.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income and retained earnings.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant and equipment on the balance
sheets.
3. Information about each major customer
Disclosure is omitted because no net sales to a single external customer accounts for more than 10% of the operating revenue on the statements of income and retained earnings.
Third Fiscal Period (From April 1, 2016 to September 30, 2016)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on the statement of income andretained earnings.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income and retained earnings.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant and equipment on the balance
sheets.
3. Information about each major customer
Disclosure is omitted because no net sales to a single external customer accounts for more than 10% of the operating revenue on the statements of income and retained earnings.
25

Kenedix Retail REIT Corporation (3453)(Notes to Investment and Rental Properties)
KRR owns retail properties for rental purposes mainly in the four major metropolitan areas and other regional areas of Japan.
The book value and fair value concerning the above real estate for rental purposes are as follows.
(in thousands of yen)
Third Fiscal Period
From April 1, 2016
to September 30, 2016

Second Fiscal Period
From October 1, 2015
to March 31, 2016
Book value
Balance at the beginning of the period

93,575,397

Changes during the period

40,441,190

134,016,587
27,426,833

Balance at the end of the period

134,016,587

161,443,421

Fair value at the end of the period
138,674,000
168,164,000
Note 1: Book value is acquisition cost less accumulated depreciation.
Note 2: Among changes in the amount of real estate for rental purposes that occurred during the second fiscal period, the principal increase was acquisitions of real estate trust
beneficiary interests in 14 properties totaling 40,195,716 thousand yen, and the additional acquisition of real estate trust beneficiary interest amounting to 383,790
thousand yen and the principal decrease was depreciation amounting to 565,717 thousand yen and during the third fiscal period, the principal increase was theacquisitions of real estate trust beneficiary interests in 7 properties totaling 27,834,390 thousand yen and the principal decrease was depreciation amounting to 714,026
thousand yen.
Note 3: The fair value at the end of the period is the appraisal value determined by outside appraisers.
The profit or loss for the period under review concerning investment and rental properties is indicated under “Notes to Statements of Income and Retained Earnings.”(Notes to Per Unit Information)
Second Fiscal Period
From October 1, 2015
to March 31, 2016
Net asset value per unit

Third Fiscal Period
From April 1, 2016
to September 30, 2016

225,291 yen

228,996 yen

Net income per unit
6,846 yen
6,069 yen
Note 1: Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during the period. Net income per unit
after adjusting for residual units is not included because there were no residual investment units.
Note 2: The basis for calculating net income per unit is as follows:
Second Fiscal Period
Third Fiscal Period
From October 1, 2015
From April 1, 2016
to March 31, 2016
to September 30, 2016
Net income (in thousands of yen)

2,427,915

Net income not attributable to ordinary unitholders (in thousands of yen)

2,518,595--

Net income attributable to ordinary unitholders (in thousands of yen)

2,427,915

2,518,595

Weighted average number of units during the period (units)354,622414,983(Notes to Significant Subsequent Events)
Not applicable.

(Omission of Disclosure)Notes to Securities, Equity-Method Income and Retained Earnings, and Retirement Payment are omitted as immaterial to disclose.

26

Kenedix Retail REIT Corporation (3453)(9) Changes in Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ capital since its corporation are summarized in the following table.
Total Number of Units Issued andUnitholders’ Capital
Outstanding (units)(in million yen)
DateType of issue
Notes
Increase
Balance
Increase
Balance
October 3, 2014

Private placement forincorporation

February 9, 2015

750

750

150

150

(Note 1)

Public offering

254,250

255,000

56,43056,580(Note 2)

March 11, 2015

Capital increase throughthird-party allocation

5,750

260,750

1,276

57,857(Note 3)October 1, 2015

Public offering

88,750349,500

18,54776,404(Note 4)

October 21, 2015

Capital increase throughthird-party allocation

5,750

355,250

1,201

77,606(Note 5)

April 20, 2016

Public offering

64,000419,250

15,856

93,463(Note 6)

May 18, 2016

Capital increase throughthird-party allocation

3,200

422,450

792

94,256(Note 7)Note 1:
Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:Note 8:Issued at issue price of 200,000 yen per unit for incorporation.
Issued at issue price of 230,000 yen per unit (issue amount of 221,950 yen per unit) for acquisition of new properties.
Issued at issue amount of 221,950 yen per unit for repayment of borrowings.
Issued at issue price of 216,543 yen per unit (issue amount of 208,991 yen per unit) for acquisition of new properties.
Issued at issue amount of 208,991 yen per unit for repayment of borrowings.
Issued at issue price of 256,717 yen per unit (issue amount of 247,764 yen per unit) for acquisition of new properties.
Issued at issue amount of 247,764 yen per unit for repayment of borrowings.
Distributions in excess of earnings for the allowance for temporary difference adjustments are not considered.

27

Kenedix Retail REIT Corporation (3453)
4. Resignation/Appointment of the Directors(1) Resignation/Appointment of the Director of the Investment Corporation
At KRR’s first General Meeting of Unitholders held on June 13, 2016, Yoshiyuki Wada resigned as supervisory director and Yoshitoshi Yasu was appointed
as new supervisory director as of July 1, 2016. Furthermore, Akihiro Asano as executive director and Mai Ishiwatari as supervisory director were reappointed
as of July 1, 2016. In addition, Koichiro Nobata of the Asset Management Company was appointed as alternate executive director and Satoshi Hiyama was
appointed as alternate supervisory director at the General Meeting of Unitholders in order to avoid the case of having fewer directors than that designated byrelevant regulatory requirements.
Appointed: Supervisory Director, Yoshitoshi Yasu (as of July 1, 2016)Retired: Supervisory Director, Yoshiyuki Wada (as of June 30, 2016)(2) Resignation/Appointment of the Director of the Asset Management Company
Not applicable28

Kenedix Retail REIT Corporation (3453)
5. Reference Information(1) Component of Assets
Type ofSpecified Asset

Areas(Note 1)

Property typeTokyo
metropolitan area
Greater Osaka
area
Greater Nagoya
area

Second fiscal period
as of March 31, 2016
Total Amount Held
Ratio
(Millions of Yen)(%)
(Note 2)
(Note 3)

Third fiscal period
as of September 30, 2016
Ratio
Total Amount Held
(Millions of Yen)(%)
(Note 2)
(Note 3)64,43443.0

71,15939.7

41,49927.7

45,117

25.2

5,444

3.6

12,636

7.0

Fukuoka area

1,513

1.0

1,499

0.8

Ordinancedesignated cities,
core cities andother areas

21,12514.1

30,995

17.3

-

-

-

-

Total of Trust Beneficiary Interests in Real Estate

134,01689.3

161,408

90.0

Bank Deposits and Other Assets

15,992

10.7

17,951

10.0

Total Assets

150,009100.0

179,360

100.0

Trust BeneficiaryInterest in Real
EstateNeighborhood,community andother shopping
centers for daily
needs

Other retailproperties-

Second fiscal period
as of March 31, 2016
Ratio
Amount(%)(Millions of Yen)
(Note 3)

Third fiscal period
as of September 30, 2016
Ratio
Amount(%)(Millions of Yen)
(Note 3)

Total Liabilities (Note 4)

69,974

46.6

82,62046.1

Total Net Assets (Note 4)

80,03453.4

96,73953.9150,009100.0

179,360

100.0

Total Assets
Note 1:

Note 2:
Note 3:Note 4:“Areas” are categorized to the Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area and Ordinance-designated cities, core cities
and other areas. References to “Tokyo metropolitan area” are to the area that consists of Tokyo, Kanagawa, Saitama and Chiba prefectures. References to the “Greater
Osaka area” are to the area that consists of Osaka, Kyoto, Hyogo, Nara and Shiga prefectures. References to the “Greater Nagoya area” are to the area that consists of
Aichi, Gifu and Mie prefectures. References to the “Fukuoka area” are to the area that consists of Fukuoka prefecture. “Ordinance-designated cities, core cities and otherareas” refers to cities designated by government ordinance, which have populations of 500,000 persons or more, core cities, which have populations of 200,000 persons
or more, and to other areas with a population fewer than 200,000 persons, which we believe will have suitable customer traffic from surrounding areas.
“Total Amount Held” is the amount allocated in the balance sheets as of the end of fiscal period (figures are on a net book value basis after deducting depreciation), and isrounded down to the nearest million.
“Ratio” is the ratio of the amount allocated in the balance sheets to the total assets rounded to the nearest tenth.
“Total Liabilities” and “Total Net Assets” are those on the balance sheets.

29

Kenedix Retail REIT Corporation (3453)(2) Overview of the Portfolioi) Overview of Assets Owned
The following summarizes the real estate or the real estate properties in trust owned by KRR as of September 30, 2016.
Location(City or Ward,
Prefecture)(Note 2)

Book value(in millions)

Evaluation value(in millions)(Note 3)Acquisition
price(in millions)(Note 4)

Trust beneficiaryinterest in real estate

14,984

15,20014,848

9.4

Urayasu, Chiba

Trust beneficiaryinterest in real estate

8,373

8,560

8,063

5.1

Passaggio Nishiarai

Adachi ward, Tokyo

Trust beneficiaryinterest in real estate

5,915

6,370

5,850

3.7

Daikanyama Address
Dixsept

Shibuya ward, Tokyo

Trust beneficiaryinterest in real estate

5,431

5,740

5,390

3.4

4,394

4,510

4,379

2.8

3,998

4,300

4,000

2.5

3,637

3,800

3,600

2.3

2,576

2,720

2,586

1.6

4,890

5,280

4,815

3.0

3,210

3,440

3,169

2.0

3,043

3,010

3,000

1.9

1,726

1,740

1,700

1.1

1,462

1,460

1,442

0.9

779

799

760

0.5

3,493

3,780

3,360

2.1

1,802

1,900

1,724

1.1

1,473

1,500

1,450

0.9

8,465

8,990

8,389

5.3

2,727

2,930

2,685

1.7

2,157

2,440

2,140

1.3

11,538

11,60011,0006.9

Property
number

Property
type(Note 1)

Property name

T-1

CSC

Fululu Garden Yachiyo

Yachiyo, Chiba

MONA Shin-Urayasu

T-2

T-3

T-4

Urban
Station-Front
SC
Urban
Station-Front
SC
Urban
Station-Front
SC

T-5

NSC

Unicus Ina

Kitaadachi-gun,
Saitama

T-6

NSC

Yorktown
Kita-Kaname

Hiratsuka, Kanagawa

T-7

NSC

Unicus Yoshikawa

Yoshikawa, Saitama

T-8

SS

T-9

NSC

T-10

SS

T-11

Sports Club Renaissance
Fujimidai
Super Viva Home
Iwatsuki (Land)
K’s Denki
Shonan-Fujisawa (Land)

Saitama, Saitama

NSC

Unicus Kamisato (Land)

Kodama-gun, Saitama

T-12

NSC

Unicus Konosu (Land)

Konosu, Saitama

T-13

SM

Inageya Yokohama
Minamihonjuku (Land)

Yokohama, Kanagawa

T-14

SM

Gourmet City Chiba-Chuo

Chiba, Chiba

T-15

NSC

Nakamachidai Tokyu Store Yokohama, Kanagawa

T-16

SS

Central Wellness Club
Nagatsuta Minamidai

Yokohama, Kanagawa

T-17

SM

Life Kameido

Koto-ku, Tokyo

O-1

NSC

Blumer Maitamon

Kobe, Hyogo

O-2

SM

O-3

NSC

O-4
O-5
O-6

NSC
Urban
Station-Front
SC
Urban
Station-Front
SC

Central Square
Takadono (Land)
Piago Kahma Home
Center Omihachiman

Nerima ward, Tokyo

Fujisawa, Kanagawa

Osaka, Osaka
Omihachiman, Shiga

Ownership
form

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate

Share
(%)
(Note 5)

Blumer HAT Kobe

Kobe, Hyogo

Carino Esaka

Suita, Osaka

Trust beneficiaryinterest in real estate

6,587

6,590

6,555

4.1

COMBOX Komyoike

Izumi, Osaka

Trust beneficiaryinterest in real estate

6,469

6,940

6,450

4.1

1,327

1,310

1,280

0.8

497

500

487

0.3

1,572

1,650

1,505

0.9

3,772

3,810

3,723

2.3

2,351

2,540

2,311

1.5

2,170

2,280

2,174

1.4

907

960

889

0.6

7,206

7,220

7,140

4.5

1,499

1,520

1,497

0.9

10,07910,90010,046

6.3

Hankyu Oasis
Hirakatadeguchi
Welcia Kishiwadakamori(Land)
Life
Nishi-Tengachaya
Million Town Tsukaguchi(Land)
Kahma Home Center
Nakagawa Tomita (Land)
Valor
Ichinomiya-Nishi
K’s Denki
Nakagawa Tomita (Land)
Homecenter Kohnan
Sunadabashi

O-7

SM

Hirakata, Osaka

O-8

SS

O-9

SM

O-10

NSC

N-1

SS

N-2

NSC

N-3

SS

N-4

SS

F-1

SM

Sunny Noma

Fukuoka, Fukuoka

R-1

NSC

Roseo Mito

Mito, Ibaraki

Kishiwada, Osaka
Osaka, Osaka
Amagasaki, Hyogo
Nagoya, Aichi
Ichinomiya, Aichi
Nagoya, Aichi
Nagoya, Aichi

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate30

Kenedix Retail REIT Corporation (3453)
Location(City or Ward,
Prefecture)(Note 2)

Property
number

Property
type(Note 1)

Property name

R-2

SS

K’s Denki Aomori Honten

Aomori, Aomori

R-3

SS

Super Sports Xebio
Aomori-Chuo

Aomori, Aomori

R-4

NSC

Ashico Town Ashikaga

Ashikaga, Tochigi

R-5

NSC

Sendai, Miyagi

R-6

SM

Yorktown
Shinden-Higashi
Kasumi Technopark
SakuraR-7

Urban
Station-Front
SC

Solala Plaza

Sendai, Miyagi

R-8

NSC

P-1 Plaza Tenno

Hamamatsu, Shizuoka

Tsukuba, Ibaraki

Book value(in millions)

Evaluation value(in millions)(Note 3)Acquisition
price(in millions)(Note 4)

1,486

1,550

1,469

0.9

903

924

898

0.6

4,370

5,060

4,180

2.6

3,342

3,310

3,252

2.0

856

861

830

0.5

Trust beneficiaryinterest in real estate

5,761

5,910

5,720

3.6

Trust beneficiaryinterest in real estate

4,193

4,260

4,010

2.5

161,443

168,164

158,766

100.0

Ownership
form
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate

Total
Note 1:

Note 2:
Note 3:Note 4:Note 5:

Share(%)(Note 5)

Properties are categorized into the following five types of retail properties for daily needs: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC (Community
Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center) and SS (Specialty Store). For the details of each type of retail properties, please refer“Section 2.Investment Policies and Status of Asset Management, (2) Status of Asset Management (Overview of the Period), iii) Management Performance, (A)Acquisition of Assets”.
“Location” indicates the residential address. For those without a residential address, the building or land address on the registry (one of the addresses for those that havemultiple addresses) is shown.
“Evaluation value” shows the appraisal value stated on the real estate appraisal report created by the real estate appraisers of Daiwa Real Estate Appraisal Co., Ltd., Japan
Real Estate Institute and The Tanizawa Sōgō Appraisal Co., Ltd. in accordance with the methods and standards for asset valuation as stipulated in the KRR Articles ofIncorporation as well as the regulations as stipulated by The Investment Trusts Association, Japan.
“Acquisition price” indicates the transfer price of the property to be acquired designated in each sale and purchase agreement (excluding the acquisition expenses, property
taxes, city planning taxes and consumption taxes, and rounded down to the nearest million yen). In addition, for Roseo Mito, acquisition price includes 371 million yen(excluding expenses and taxes and rounded down to the nearest million yen) on the construction contract and construction design/supervision outsourcing contracts related
to construction of the building for the secondhand shop building (property expansion).
“Share” represents the percentage of the acquisition price for each property in the total acquisition price, rounded to the nearest tenth.

31

Kenedix Retail REIT Corporation (3453)
ii) Overview of tenants as of March 31, 2016
The following summarizes leasable area, leased area, occupancy rate, number of tenants, annual rent, and amount of security deposits
Property
number

Property nameLeasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

Occupancy
rate(%)(Note 3)

Number oftenants(Note 4)

Annual rent
(thousands)(Note 5)

Amount of
security
deposits(millions)(Note 6)

T-1

Fululu Garden Yachiyo

77,057.56

76,751.87

99.6

49

1,074,347

3,589

T-2

MONA Shin-Urayasu

9,568.31

9,145.66

95.6

1(71)

599,669

624

T-3

Passaggio Nishiarai

10,546.25

10,342.77

98.1

1(41)

398,548

233

T-4

Daikanyama Address Dixsept

5,056.39

4,966.98

98.2

1(26)

361,186327

T-5

Unicus Ina

13,044.37

13,044.37

100.0

1

263,472

136

T-6

Yorktown Kita-Kaname

100.0

1

T-7

Unicus Yoshikawa

10,648.27

10,648.27

100.0

1(11)

T-8

Sports Club Renaissance Fujimidai

3,120.87

3,120.87

100.0

1

T-9

Super Viva Home Iwatsuki (Land)

67,325.95

67,325.95

100.0

1

T-10

K’s Denki Shonan-Fujisawa (Land)

15,578.58

15,578.58

100.0

1

T-11

Unicus Kamisato (Land)

67,854.47

67,854.47

100.0

1

145,220

70

T-12

Unicus Konosu (Land)

19,329.00

19,329.00

100.0

1

83,014

39

T-13

Inageya Yokohama Minamihonjuku (Land)

4,405.41

4,405.41

100.0

1

T-14

Gourmet City Chiba-Chuo

3,488.77

3,488.77

100.0

1

T-15

Nakamachidai Tokyu Store

5,968.71

5,968.71

100.0

1

T-16

Central Wellness Club Nagatsuta Minamidai

3,996.70

3,996.70

100.0

2

T-17

Life Kameido

2,929.58

2,929.58

100.0

1

O-1

Blumer Maitamon

30,037.11

29,757.73

99.1

49

O-2

Central Square Takadono (Land)

4,437.07

4,437.07

100.0

1(Note 7)(Note 7)

O-3

Piago Kahma Home Center
Omihachiman

14,313.00

14,313.00

100.0

2

(Note 7)(Note 7)O-4

Blumer HAT Kobe

24,185.02

23,968.51

99.1

1(41)

648,448

826

O-5

Carino Esaka

7,540.58

7,474.92

99.1

1(30)

296,611

244

O-6

COMBOX Komyoike

25,530.44(Note 8)25,530.44

100.0

1

452,523(Note 9)O-7

Hankyu Oasis Hirakatadeguchi

2,960.38

2,960.38

100.0

1

O-8

Welcia Kishiwadakamori (Land)3,033.45

3,033.45

100.0

1

459
(Note 10)(Note 7)(Note 7)O-9Life Nishi-Tengachaya

2,679.52

2,679.52

100.0

1

O-10

Million Town Tsukaguchi (Land)8,264.46

8,264.46

100.0

1(Note 7)(Note 7)

N-1

Kahma Home Center Nakagawa Tomita (Land)

100.0

1

(Note 7)(Note 7)

N-2

Valor Ichinomiya-Nishi

100.0

1

(Note 7)(Note 7)N-3

K’s Denki Nakagawa Tomita (Land)

100.0

1

(Note 7)(Note 7)

N-4

Homecenter Kohnan Sunadabashi

20,329.07

20,329.07

100.0

1

(Note 7)(Note 7)

F-1

Sunny Noma

2,814.67

2,814.67

100.0

1(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)

9,447.48(Note 7)

9,447.48(Note 7)32

(Note 7)(Note 7)261,267(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)207
(Note 7)(Note 7)141

(Note 7)(Note 7)(Note 7)

116,400(Note 7)148
(Note 7)684,484(Note 7)(Note 7)414

89,740269

Kenedix Retail REIT Corporation (3453)

Property
number

Property nameLeasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

Occupancy
rate(%)(Note 3)

Number oftenants(Note 4)

Annual rent
(thousands)(Note 5)

R-1

Roseo Mito

48,296.15

48,161.79

99.7

1(22)

R-2

K’s Denki Aomori Honten

10,083.41

10,083.41

100.0

1

(Note 7)

R-3

Super Sports Xebio Aomori-Chuo

100.0

1

(Note 7)

R-4

Ashico Town Ashikaga

65,616.31

65,019.74

99.1

1(26)

R-5

Yorktown Shinden-Higashi

12,768.77

12,768.77

100.0

2

R-6

Kasumi Technopark Sakura

2,047.65

2,047.65

100.0

1

R-7

Solala Plaza

100.0

1

R-8

P-1 Plaza Tenno(Note 7)

Total
Note 1:
Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:Note 8:Note 9:Note 10:(Note 7)(Note 7)(Note 7)

Amount of
security
deposits(millions)(Note 6)690,130

459
174(Note 7)

383,911(Note 7)(Note 7)(Note 7)324
(Note 7)24
(Note 7)

12,030.83

12,030.83

100.0

7

270,720286

674,491.03

672,177.32

99.7

405

10,420,077

11,518“Leasable area” is equivalent to gross floor area of space that we consider to be available for lease in each property, rounded to the nearest tenth. For land-only properties,
leasable area is equivalent to land area as described in the property registry.
“Leased area” indicates the total leased area based on the lease agreements for each property as of September 30, 2016. As for lease agreements of buildings, the leased
area of warehouses and land are excluded. As for pass-through type master leases, the leased area based on the lease agreements between the master lessee and the endtenants as of September 30, 2016 is shown. As for sublease type master leases, the leased area to the master lessee is shown.
“Occupancy rate” is calculated by dividing leased area by leasable area as of September 30, 2016, rounded to the nearest tenth. The “Total” of “Occupancy rate” represents
the average occupancy rate of all properties in the initial portfolio.
“Number of tenants” is based upon the number of lease agreements with respect to the building(s) (or land in the case of land-only properties with leasehold interest) on
each such property used mainly as stores and offices, as of September 30, 2016. Where one lessee leases more than one section of the property, the lessee is counted as atenant for each section leased within the property. Where pass-through type master lease agreements are entered into, the number of master lessees is with the number ofend-tenants indicated in parentheses. Where sublease type master lease agreements are entered into, the indicated, number of master lessee is shown. The “Total” of“Number of tenants” shows the total number of tenants. As for pass-through type master leases, the number of end-tenants is used for calculation. As for sublease typemaster leases, the number of master lessee is used for calculation.
“Annualized fixed rent” is generally calculated by multiplying the monthly fixed rent and common area charges under a leasing contract with tenants at portfolio properties
as of September 30, 2016 (excluding warehouses in the case of building lease agreements) by twelve and rounding down to the nearest thousand yen. For master leases,
where the master lease company sub-leases space to other tenants, the fixed monthly rent under the master lease contract is multiplied by twelve, rounded down to thenearest thousand yen.
“Tenant leasehold and security deposits” indicates the outstanding balance of any tenant leasehold and security deposit from the relevant end-tenant(s) set forth in leaseagreement(s) effective as of September 30, 2016 (excluding warehouses in the case of building lease agreements), rounded down to the nearest million yen.
We have not obtained consent from the tenant(s) to release this information.
The total area that we own exclusively as a compartmentalized ownership interest (retail space) is shown.
Calculated by multiplying the monthly rent and common area charges for September 2016 under the leasing contract by twelve and also taking into consideration theownership ratio (93.20%) under the compartmentalized ownership agreement.
Calculated by multiplying the tenant leasehold and security deposits for the whole building as of September 2016 by the ownership ratio (93.20%).

33

Kenedix Retail REIT Corporation (3453)
iii) Overview of the appraisal reports
The following show the summaries of the appraisal reports is the appraisal value of the acquired properties described in each real estate appraisal report
prepared by real estate appraisers, including Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute, and The Tanizawa Sōgō Appraisal Co., Ltd.
as requested by KRR, based on an important notice concerning real estate appraisal in the context of the Act on Investment Trusts and Investment
Corporations, Act on Real Estate Appraisal (Act No. 152 of 1963, including subsequent revisions) and real estate appraisal standards. The appraisal value
is the judgment and opinion of the appraiser at a fixed point in time, with no guarantees as to the validity or accuracy of the report, nor to the possibility oftransactions at the appraised value. There are no special relations of interest between Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute,and The Tanizawa Sōgō Appraisal Co., Ltd. and KRR or KFM.
Estimated value
Cash flow-based method
Property
number

Property nameAppraiser

Daiwa Real EstateAppraisal Co.,
Ltd.
Japan Real Estate
Institute
Daiwa Real EstateAppraisal Co.,
Ltd.
Japan Real Estate
InstituteJapan Real Estate
Institute
Daiwa Real EstateAppraisal Co.,Ltd.
Daiwa Real EstateAppraisal Co.,Ltd.
Daiwa Real EstateAppraisal Co.,
Ltd.

T-1

Fululu Garden Yachiyo

T-2

MONA Shin-Urayasu

T-3

Passaggio Nishiarai

T-4

Daikanyama Address
Dixsept

T-5

Unicus Ina

T-6

Yorktown Kita-Kaname

T-7

Unicus Yoshikawa

T-8

Sports Club
Renaissance Fujimidai

T-9

Super Viva Home
Iwatsuki (Land)

The Tanizawa
Sōgō Appraisal
Co., Ltd.

K’s Denki ShonanFujisawa (Land)

The Tanizawa
Sōgō Appraisal
Co., Ltd.

T-10

Appraisal
Evaluation
Direct capitalization method
value
Cost methoddate(in millions)(in millions) EstimatedCapitalization Estimated value
value
rate (%)(in millions)(in millions)Appraisal
NOI yield
Appraisal(%)
NOI(Note 2)
Terminal(in millions)capitalization(Note 1)rate (%)

DCF method
Discount rate(%)

Sep. 30,
2016

15,20021,00015,3004.7

15,100

4.5

4.9

760

5.1

Sep. 30,
2016

8,560

6,850

8,620

5.2

8,500

4.9

5.4

490

6.1

Sep. 30,
2016

6,370

8,750

6,510

4.4

6,310

4.2

4.6

292

5.0

5,740

4,810

5,830

3.8

5,640

3.6

4.0

224

4.2

4,510

3,980

4,540

5.2

4,480

4.8

5.3

240

5.5

Sep. 30,
2016

4,300

2,560

4,350

5.0

4,280

4.8

5.2

215

5.4

Sep. 30,
2016

3,800

4,820

3,860

4.8

3,770

4.6

5.0

185

5.2

Sep. 30,
2016

2,720

1,730

2,760

4.7

2,700

4.5

4.9

128

5.0

Sep. 30,
2016

5,280

-

-

-

5,280

-

207

4.3

-

159

5.0

-

138

4.6

-

77

4.6

Sep. 30,
2016
Sep. 30,2016(year 1-16)
4.7(year 17-36.2)
4.8(year 1-11)
Sep. 30,
2016

3,440

-

-

-

3,440

4.5
(year12-31.1)
4.6(year 1-14)

T-11

Unicus Kamisato (Land)

The Tanizawa
Sōgō Appraisal
Co., Ltd.

4.7
Sep. 30,
2016

3,010

-

-

-

3,010

(year 15-29)
4.8(year 30-39)
4.9(year 1-14)

T-12

Unicus Konosu (Land)

The Tanizawa
Sōgō Appraisal
Co., Ltd.

4.6
Sep. 30,
2016

1,740

-

-

-

1,740

(year 15-29)
4.7(year 30-39)
4.8

T-13

Inageya Yokohama
Minamihonjuku (Land)

T-14

Gourmet City ChibaChuo

T-15

T-16

Nakamachidai Tokyu
Store
Central Wellness Club
Nagatsuta Minamidai

T-17

Life Kameido

O-1

Blumer Maitamon

Japan Real Estate
Institute
Daiwa Real EstateAppraisal Co.,Ltd.
Daiwa Real EstateAppraisal Co.,Ltd.
Daiwa Real EstateAppraisal Co.,Ltd.
Daiwa Real EstateAppraisal Co.,Ltd.
The Tanizawa
Sōgō Appraisal
Co., Ltd.

Sep. 30,
2016

1,460

-

-

-

1,460

4.0

4.6

64

4.5

Sep. 30,
2016

799

1,080

796

5.2

800

5.0

5.4

43

5.8

Sep. 30,
2016

3,780

2,850

3,830

4.7

3,760

4.5

4.9

182

5.4

Sep. 30,
2016

1,900

2,420

1,910

5.1

1,900

4.9

5.3

98

5.7

Sep. 30,
2016

1,500

1,920

1,510

4.3

1,490

4.0

4.5

65

4.5

Sep. 30,
2016

8,990

9,200

8,970

5.4

9,000

5.5

5.6

489

5.8

-

128

4.8

6.5

151

7.1

(year 1-8)
O-2

Central Square
Takadono (Land)

4.3

The Tanizawa
Sōgō Appraisal
Co., Ltd.

Sep. 30,
2016

Japan Real Estate
Institute

Sep. 30,
2016

2,930

-

-

-

2,930

(year 9-19)
4.4(year 20-38.8)
4.5

O-3

Piago Kahma Home
Center Omihachiman

2,440

2,350

2,470

34

6.3

2,400

6.0

Kenedix Retail REIT Corporation (3453)
Estimated value
Cash flow-based method
Property
number

Property nameAppraiser

Daiwa Real EstateAppraisal Co.,
Ltd.
Japan Real Estate
Carino Esaka
Institute
Daiwa Real Estate
COMBOX Komyoike
Appraisal Co.,Ltd.
Daiwa Real Estate
Hankyu Oasis
Appraisal Co.,
Hirakatadeguchi
Ltd.
Welcia Kishiwadakamori Japan Real Estate(Land)
Institute
The Tanizawa
LifeSōgō Appraisal
Nishi-Tengachaya
Co., Ltd.

Appraisal
Evaluation
Direct capitalization method
value
Cost methoddate(in millions)(in millions) EstimatedCapitalization Estimated value
value
rate (%)(in millions)(in millions)Appraisal
NOI yield
Appraisal(%)
NOI(Note 2)
Terminal(in millions)capitalization(Note 1)rate (%)

DCF method
Discount rate(%)

Sep. 30,
2016

11,60014,50011,7004.9

11,500

4.7

5.1

569

5.2

Sep. 30,
2016

6,590

6,360

6,630

4.8

6,540

4.5

5.0

339

5.2

Sep. 30,
2016

6,940

7,740

7,090

5.2

6,880

4.9

5.4

389

6.0

Sep. 30,
2016

1,310

905

1,320

5.6

1,310

5.4

5.8

75

5.9

Sep. 30,
2016

500

-

-

-

500

4.0

4.6

21

4.5

Sep. 30,
2016

1,650

1,630

1,680

4.8

1,640

4.9

5.0

79

5.3

The Tanizawa
Sōgō Appraisal
Co., Ltd.

Sep. 30,
2016

3,810

-

-

-

3,810

-

170

4.6

N-1

The Tanizawa
Kahma Home Center
Sōgō Appraisal
Nakagawa Tomita (Land)
Co., Ltd.

Sep. 30,
2016

2,540

-

-

-

2,540

-

120

5.2

N-2

Valor Ichinomiya-Nishi

Japan Real Estate
Institute

Sep. 30,
2016

2,280

1,870

2,290

5.2

2,260

5.4

128

5.9

N-3

K’s Denki Nakagawa
Tomita (Land)

The Tanizawa
Sōgō Appraisal
Co., Ltd.

Sep. 30,
2016

960

-

-

-

960

-

46

5.2

O-4
O-5
O-6

O-7
O-8
O-9

O-10

Blumer HAT Kobe

Million Town
Tsukaguchi (Land)(year 1-19)
4.5(year 1-17)

Homecenter Kohnan
Sunadabashi

F-1

Sunny Noma

R-1

Roseo Mito

Japan Real Estate
Institute

R-2

K’s Denki Aomori
HontenR-3

4.7(year 18-36.7)
4.8
4.9(year 1-17)
4.7(year 18-36.7)
4.8

Daiwa Real Estate
Sep. 30,
Appraisal Co.,
2016
Ltd.
Japan Real Estate Sep. 30,
Institute
2016

N-4

4.3
(year 20-39.4)

7,220

7,490

7,360

4.9

7,160

4.7

5.1

368

5.2

1,520

1,270

1,550

5.1

1,480

4.9

5.5

80

5.4

Sep. 30,
2016

10,9009,480

11,0005.4

10,800

5.1

5.6

596

5.9

Japan Real Estate
Institute

Sep. 30,
2016

1,550

1,690

1,560

5.7

1,540

5.4

5.9

92

6.3

Super Sports Xebio
Aomori-Chuo

Japan Real Estate
Institute

Sep. 30,
2016

924

860

929

5.7

919

5.4

5.9

57

6.4

R-4

Ashico Town Ashikaga

Daiwa Real Estate
Sep. 30,
Appraisal Co.,
2016
Ltd.

5,060

5.2
(Building)
5.0(Land)

5.6(Building)

270

6.5

R-5

Yorktown ShindenHigashi

R-6

Kasumi Technopark
SakuraR-7

Solala Plaza

R-8

P-1 Plaza Tenno

Daiwa Real Estate
Sep. 30,
Appraisal Co.,
2016
Ltd.
Daiwa Real Estate
Sep. 30,
Appraisal Co.,
2016
Ltd.
Japan Real Estate Sep. 30,
Institute
2016
Japan Real Estate
InstituteTotal/Average

Note 1:

Note 2:
Note 3:

Sep. 30,
2016

5,060

8,100

5,060

5.4
(Building)
5.0(Land)(Note 3)

3,310

5,030

3,320

5.6

3,300

5.4

5.8

195

6.0

861

763

869

5.2

857

5.0

5.4

46

5.6

5,910

4,010

5,950

4.9

5,870

4.6

5.1

287

5.0

4,260

4,350

4,260

5.3

4,250

4.9

5.4

229

5.7

168,164

150,368

143,824-

167,166

-

-

8,511

5.4

“Appraisal NOI” is the Net Operating Income calculated by subtracting the amount of operating expenses from the operating revenues described in relevant appraisal
reports, and it is the income before depreciation and differs from NCF (Net Cash Flow) which is calculated by adding investment gains from such as deposits andsubtracting capex from NOI. The above appraisal NOI is calculated using the direct capitalization method. However, where the direct capitalization method is notapplicable, appraisal NOI indicates the net operating income for the first year based on the DCF method. (Note that Unicus Kamisato (Land) and Unicus Konosu (Land)
use NOI for the third year, when ordinary operations are expected to take place.) The amounts are rounded down to the nearest one million yen.
“Appraisal NOI yield” indicates the value calculated using the following formula and rounded to the nearest tenth. The “Total/average” of “Appraisal NOI yield” indicatesthe average appraisal NOI yield which is a weighted average of appraisal NOI yields of the acquired properties (rounded to the nearest tenth).
Appraisal NOI of each property / Acquisition price for each property.
Inwood method discount rate is shown for discount rate of land-only properties.

35

Kenedix Retail REIT Corporation (3453)
iv) Overview of building condition investigation reports
KRR has obtained engineering reports, containing the diagnosis of building deteriorations, short- and long-term repair and maintenance plans, theassessment of legal compliance with the Building Standard Act and other laws and regulations, the investigation of hazardous substances in a building andsoil environment for the acquired properties and the to-be acquired properties. These reports represent judgement and opinion of the appraisers for a fixed
point of time, with no guarantees as to the validity or accuracy of the report.
Property
Number

Property name

Investigation company

Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
HI International Consultant
Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
HI International Consultant
Co., Ltd.

T-1

Fululu Garden Yachiyo

T-2

MONA Shin-Urayasu

T-3

Passaggio Nishiarai

T-4

Daikanyama Address Dixsept

T-5

Unicus Ina

T-6

Yorktown Kita-Kaname

T-7

Unicus Yoshikawa

T-8

Sports Club Renaissance Fujimidai

T-9

Super Viva Home Iwatsuki (Land)(Note 2)

T-10

K’s Denki Shonan-Fujisawa (Land)

T-11

Investigation
performed in

Repairs, maintenance and renovation
expensesRequired over theRequired over the
next 12 years
next 12 years(thousand yen)(thousand yen)
(Note 1)
(Note 1)

Nov. 2014

980,9700Nov. 2014

921,734

16,696

Nov. 2014

125,949

0Nov. 2014

145,3520Aug. 2014

118,760

1,110

Nov. 2014

13,213

1,775

Nov. 2014

59,1320

Sep. 2014

23,780

400

-

-

-

(Note 2)---

Unicus Kamisato (Land)(Note 2)

-

-

-

T-12

Unicus Konosu (Land)(Note 2)

-

-

-

T-13

Inageya Yokohama Minamihonjuku (Land)(Note 2)---

Aug. 2015

24,669131

Mar.2016

28,3940Mar.2016

16,8880Mar.2016

21,4420Nov. 2014

211,9540--Aug. 2014

56,850180Mar. 2015

326,565

3,959

Aug. 2015

424,506

6,443

Aug. 2015

355,6430Aug. 2015

57,1750--

15,464

2,225

T-14

Gourmet City Chiba-Chuo

T-15

Nakamachidai Tokyu Store

T-16

Central Wellness Club Nagatsuta Minamidai

T-17

Life Kameido

O-1

Blumer Maitamon

O-2

Central Square Takadono (Land)

O-3

Piago Kahma Home Center Omihachiman

O-4

Blumer HAT Kobe

O-5

Carino Esaka

O-6

COMBOX Komyoike

O-7

Hankyu Oasis Hirakatadeguchi

O-8

Welcia Kishiwadakamori (Land)

O-9

Life Nishi-Tengachaya

O-10

Million Town Tsukaguchi (Land)

N-1

Kahma Home Center Nakagawa Tomita(Land)

N-2

Valor Ichinomiya-Nishi

N-3

K’s Denki Nakagawa Tomita (Land)

N-4

Homecenter Kohnan Sunadabashi

F-1

Sunny Noma

R-1

Roseo Mito

Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
(Note 2)
HI International Consultant
Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
(Note 2)
Tokio Marine & Nichido
Risk Consulting Co., Ltd.

-

Sep. 2015(Note 2)---

(Note 2)---

177,790

2,690

-

-

Dec. 2015

336,9430Aug. 2014

41,960420Aug. 2014(Secondhand Shopbuilding:
Oct. 2015)

238,790

550

HI International Consultant
Co., Ltd.
(Note 2)
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
HI International Consultant
Co., Ltd.
HI International Consultant
Co., Ltd.

36

Aug. 2014-

Kenedix Retail REIT Corporation (3453)

Property
Number

Property nameR-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio Aomori-Chuo

R-4

Ashico Town Ashikaga

R-5

Yorktown Shinden-Higashi

R-6

Kasumi Technopark Sakura

R-7

Solala Plaza

R-8

P-1 Plaza Tenno

Investigation company

Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Total

Note 1:
Note 2:

Investigation
performed in

Repairs, maintenance and renovation
expensesRequired over theRequired over the
next 12 years
next 12 years(thousand yen)(thousand yen)
(Note 1)
(Note 1)

Nov. 2014

142,7640Nov. 2014

103,0120Aug. 2015

327,2640Jul. 2015

176,945

4,163

Aug. 2015

18,1550Mar. 2016

25,4300Mar. 2016

159,757

28,423

5,677,250

69,165Of the “Repairs, maintenance and renovation expenses,” “Required over the next 12 years” indicates the total expenses required during the next 12 years from the date of
the investigation report and “Required within one year” indicates the total expenses required within 1 year from the date of the investigation report. All figures aretruncated to thousands of yen as in the investigation reports.
Since these are land-only properties, KRR did not obtain the engineering report but obtained history survey report on the land use from Field Partners.

37

Kenedix Retail REIT Corporation (3453)
v) Overview of seismic PML evaluation report
The following summary is based on the Portfolio Earthquake PML Evaluation Report created by the Sompo Risk Management & Health Care Inc. as ofMarch 2016. However, KRR does not guarantee the accuracy of evaluations in the report. The report only represents judgement and opinion of theappraiser for a fixed point of time, with no guarantees as to the validity or accuracy of the report. There is no special interest between the Sompo Risk
Management & Health Care Inc. and KRR or KFM.
Property
PML value in seismic review (%)
Property namenumber(Note 1)
Specialty store building 10.24
T-1
Fululu Garden Yachiyo
Ito-Yokado building 8.96
Retail building 5.98
T-2
MONA Shin-Urayasu
Parking building 5.97
T-3
Passaggio Nishiarai
3.13
T-4

Daikanyama Address Dixsept

11.11

T-5

Unicus Ina

4.51

T-6

Yorktown Kita-Kaname

8.72

T-7

Unicus Yoshikawa

3.26

T-8

Sports Club Renaissance Fujimidai

7.09

T-9

Super Viva Home Iwatsuki (Land)

-

T-10

K’s Denki Shonan-Fujisawa (Land)

-

T-11

Unicus Kamisato (Land)

-

T-12

Unicus Konosu (Land)

-

T-13

Inageya Yokohama Minamihonjuku (Land)

T-14

Gourmet City Chiba-Chuo

1.82

T-15

Nakamachidai Tokyu Store

8.15

T-16

Central Wellness Club Nagatsuta Minamidai

T-17

Life Kameido

3.79

O-1

Blumer Maitamon

1.52

O-2

Central Square Takadono (Land)
Piago Kahma Home Center
Omihachiman

O-3-

Retail building 7.70
Parking building 6.36

Piago building 3.95
Kahma Home Center building 5.22
4.69

O-4

Blumer HAT Kobe

O-5

Carino Esaka

3.17

O-6

COMBOX Komyoike

5.04

O-7

Hankyu Oasis Hirakatadeguchi

4.11

O-8

-

O-10

Welcia Kishiwadakamori (Land)
Life
Nishi-Tengachaya
Million Town Tsukaguchi (Land)

N-1

Kahma Home Center Nakagawa Tomita (Land)

N-2

Valor Ichinomiya-Nishi

N-3

K’s Denki Nakagawa Tomita (Land)-

N-4

Homecenter Kohnan Sunadabashi

7.47

F-1

Sunny Noma

O-9

R-1

Roseo Mito

R-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio Aomori-Chuo

6.32
10.18

Coffee shop building
Mall building
Sports facility building
Hardware store building
Secondhand shop building
K’s Denki building
TSUTAYA/ Hard-off building
Shopping mall building
Extensions
Cinema building
Road-side building

1.95
7.41
6.70
9.69
9.68
7.85
1.61
1.51
1.52
2.16
1.91
2.28
2.59

R-4

Ashico Town Ashikaga

R-5

Yorktown Shinden-Higashi

3.43

R-6

Kasumi Technopark Sakura

6.40

38

Kenedix Retail REIT Corporation (3453)
R-7

R-8

Solala Plaza

4.46
A building 21.66
B building 11.84
C building 12.29
D building 11.12
E building 13.36
F building 16.98
G building 9.07
H building 12.00

P-1 Plaza Tenno

Portfolio PML value (Note 2)
Note 1:
Note 2:

2.24

PML is rounded to the nearest hundredth.
“Portfolio PML value” is the portfolio PML value of 30 properties that excludes Super Viva Home Iwatsuki (Land), K’s Denki Shonan-Fujisawa(Land), Unicus Kamisato (Land), Unicus Konosu (Land), Inageya Yokohama Minamihonjuku (Land), Central Square Takadono (Land), Welcia
Kishiwadakamori (Land), Million Town Tsukaguchi (Land), Kahma Home Center Nakagawa Tomita (Land) and K’s Denki Nakagawa Tomita(Land) is based on the Portfolio Earthquake PML Evaluation Report created by Sompo Risk Management & Health Care Inc. as of March 2016.

39

Kenedix Retail REIT Corporation (3453)
vi) Architect, structural engineer, construction company and construction confirmation authority
Property
number

Property nameConstruction company

Construction confirmation
authority

Architect

Structural engineer(Ito Yokado Yachiyo)
Research Institute ofArchitechture,Tokyo Branch(Fululu Garden Yachiyo)
Research Institute ofArchitechture,Tokyo Branch(Ito Yokado Yachiyo)
Takenaka Corporation,
Higashi-Kanto Branch(Fululu Garden Yachiyo)
Takenaka Corporation,
Higashi-Kanto Branch

The Building Center ofJapan

Chiba Prefecture

T-1

Fululu Garden
Yachiyo(Ito Yokado Yachiyo)
Research Institute ofArchitechture, Tokyo Branch(Fululu Garden Yachiyo)
Research Institute ofArchitechture,Tokyo Branch

T-2

MONA ShinUrayasu

Haseko Corporation,
Engineering Division

Haseko Corporation,
Engineering Division

Haseko Corporation

T-3

Passaggio Nishiarai

Yamashita Sekkei Inc.

Yamashita Sekkei Inc.

Nishimatsu Construction Co., Tokyo Prefecture
Ltd.

T-4

Daikanyama Address
Nihon Sekkei, Inc.
Dixsept

Nihon Sekkei, Inc.

Kajima Corporation

Tokyo Prefecture

T-5

Unicus Ina

Taisei Corporation,
Registered architect office

Taisei Corporation,
Registered architect office

Taisei Corporation

Bureau Veritas Japan Co.,
Ltd.

T-6

Yorktown KitaKaname

CB Richard Ellis Asset
Services K.K.

Sankyoline Corporation

Asanuma Corporation

K.K. Building
Navigation

T-7

Unicus Yoshikawa

Obayashi Corporation

Obayashi Corporation

Obayashi Corporation

Saitama Housing
Inspection Center

T-8

Sports Club
Renaissance Fujimidai

K.K. Axs Engineering

K.K. Axs Engineering

Ichiken Co., Ltd.

Nerima ward

T-9

Super Viva Home
Iwatsuki (Land)

-

-

-

-

T-10

K’s Denki ShonanFujisawa (Land)

-

-

-

-

T-11

Unicus Kamisato(Land)

-

-

-

-

T-12

Unicus Konosu(Land)

-

-

-

-

T-13

Inageya Yokohama
Minamihonjuku(Land)

-

-

-

-

T-14

Gourmet City
Chiba-Chuo

T-15

Nikken Sekkei Ltd.

Consortium of Taisei
Corporation and Shimizu
Corporation

The Building Center of Japan

Nakamachidai Tokyu Asanuma Corporation
Store

Asanuma Corporation

Daiwa System Co., Ltd.

Bureau Veritas Japan Co.,
Ltd.

T-16

(Retail building)Daiwa House Industry Co.,
Central Wellness Club Ltd.
Nagatsuta Minamidai (Parking building)Daiwa House Industry Co.,Ltd.

(Retail building)
Konishi Sekkei Co., Ltd.,(Parking building)
Vega Sekkei Co., Ltd.

(Retail building)Daiwa House Industry Co.,
Ltd.,
(Parking building)Daiwa House Industry Co.,
Ltd.

Japan ERI Co., Ltd.

T-17

Life Kameido

Sumitomo Construction Co., Sumitomo Construction Co., Sumitomo Construction Co.,
Ltd.
Ltd.
Ltd.

Koto ward

O-1

Blumer Maitamon

Asanuma Corporation

Bureau Veritas Japan Co.,
Ltd.

O-2

Central Square
Takadono (Land)

O-3

Piago Kahma
Home Center
Omihachiman(Piago building）(Piago building）(Piago building）
K.K. Organization of
Kiuchi Construction Co., Ltd.
Kiuchi Construction Co., Ltd.
Kiuchi Construction Co., Ltd.
Confirmation &(Kahama Home Center building) (Kahama Home Center building) (Kahama Home Center building) Inspection Annex
Daiken Tosikaihatu Co., Ltd.
Daiken Tosikaihatu Co., Ltd.
Aisawa Construction Co., Ltd. (Note2)O-4Blumer HAT Kobe

Obayashi Corporation

Nikken Sekkei Ltd.

-

Asanuma Corporation-

Obayashi Corporation

40

Daiwa System Co., Ltd.
-

Obayashi Corporation-

Center of International
Architectural Standard Co.,Ltd.

Kenedix Retail REIT Corporation (3453)
Property
number

Property name

Architect

Structural engineer

Construction company

Construction confirmation
authority

O-5

Carino Esaka

Tokyu Architects & Engineers
Inc. (for new building
Tokyu Architects &construction)
Engineers Inc.
Tokyu Construction Co., Ltd.
(for property expansion)

O-6

COMBOX
Komyoike

Daiwa House Industry Co.,Ltd.

Daiwa House Industry Co.,Ltd.

Daiwa House Industry Co.,
Ltd.

General Building Research
Corporation of Japan

O-7

Hankyu Oasis
Hirakatadeguchi

Rui Sekkeishitsu Co., Ltd.

Rui Sekkeishitsu Co., Ltd.

Obara Construction Co.,
Ltd.

General Building Research
Corporation of Japan

O-8

WelciaKishiwadakamori(Land)

-

-

-

-

O-9

Life
Nishi-Tengachaya

KIA Urban Planning andArchitects Institute Co., Ltd.

Nihon Kensetsu Co., Ltd.

Center of International
Architectural Standard Co.,
Ltd.

O-10

Million Town
Tsukaguchi (Land)

-

-

-

-

N-1

Kahma Home Center
Nakagawa Tomita(Land)

-

-

-

-

N-2

Valor IchinomiyaNishi

N-3
N-4
F-1

R-1

Chubu Sekkei Co., Ltd.

Fujita Corporation

Chubu Sekkei Co., Ltd.

Tokyu Construction Co., Ltd. Suita City

Tsuchiya Corporation

Ichinomiya City

K’s Denki
Nakagawa Tomita(Land)
Homecenter
KohnanSunadabashi--

Nankai Sogo Sekkei Co.,Ltd.

Nankai Sogo Sekkei Co.,Ltd.

Obayashi Corporation

Japan ERI Co., Ltd.

Sunny Noma

Nakamuta & Suenaga
Designing (JV)

Nakamuta & Suenaga
Designing (JV)

Nishimatsu Construction
Co., Ltd., Kyushu Branch

Fukuoka City

Roseo Mito

(Coffee shop building)
Tetsu Works Architect Office(Mall building)
Kurehanishiki Construction Co., Ltd.
Change of use:
Registered Architect
Studio Work House(Sports facility building)
Kishi-Sekkei Co., Ltd.
(Hardware store building)
Nihon Jutaku Corporation,
Registered Architect Office(Secondhand shop building)Choeihands Corporation(Coffee shop building)
Tetsu Works Architect Office(Mall building)
Sezako StructuralEngineering Office(Sports facility building)Individual (Note 3)(Hardware store building)
K.K. Dan StructuralEngineering Office(Secondhand shop building)
Converse Corporation(Coffee shop building)
Kurehanishiki Construction
Co., Ltd.
(Mall building)
Kurehanishiki
Construction Co., Ltd.
(Sports facility building)
Kurehanishiki
Construction Co., Ltd.
(Hardware store building)
Nihon Jutaku Corporation(Secondhand shop building)Choeihands Corporation

Aomori City--

(Coffee shop building)(Mall building)(Sports facility building)(Hardware store building)
Mito City(Secondhand shop building)Japan ERI Co., Ltd.

R-2

K’s Denki
Aomori Honten

K.K. Kyoei Planning
DesignK.K. Kyoei Planning
Design(K’s Denki building)
Nihon Kensetsu Co.,
Ltd., Sendai Branch(TSUTAYA/Hard-off building)
Nihon Kensetsu Co.,
Ltd., Sendai Branch

R-3

Super Sports Xebio
Aomori-Chuo

Takenaka Corporation

Individual (Note 3)

Takenaka Corporation

Japan ERI Co., Ltd.

R-4

Ashico Town
Ashikaga

Penta-Ocean Construction
Co., Ltd. (shopping mallbuilding, cinema building,road-side building)
KKHY Architects &Associates (extensions)Penta-Ocean Construction
Co., Ltd. (shopping mallbuilding, cinema building,road-side building)Architecture Form
Corporation (extensions)Penta-Ocean Construction
Co., Ltd. (shopping mallbuilding, cinema building,road-side building)Tokyo Biso Kogyo
Corporation (extensions)Bureau Veritas Japan Co.,
Ltd.

R-5

Yorktown
Shinden-Higashi

MTM International
Corporation

MTM International
Corporation

Kajima Corporation

Japan ERI Co., Ltd.

R-6

KasumiTechnopark Sakura

Office Okano
Kenchikusekkei Co., Ltd.

Office Okano
Kenchikusekkei Co., Ltd.

Nakano Corporation Co.,Ltd.

Ibaraki Prefecture

R-7

Solala Plaza

Yamashita Sekkei Inc.

Yamashita Sekkei Inc.

Shimizu Corporation

Japan ERI Co., Ltd.

41

Kenedix Retail REIT Corporation (3453)
Property
numberR-8

Note 1:

Property name

P-1 Plaza Tenno

Architect(A building)First-Class Architect Office
Atelier Zero (for newbuilding construction ),Entetsu General
Constructor (for building
expansion)(B building)Parking Pro Co., Ltd.
(C building)Daiwa House Industry Co.,Ltd.
(D building)Daiwa House Industry Co.,Ltd.
(E building)Daiwa House Industry Co.,Ltd.
(F building)
DO Design Co., Ltd.
(G building)
Akou Co., Ltd.
(H building)
Akou Co., Ltd.

Structural engineer

Construction company

Construction confirmation
authority(A building)First-Class Architect
Office Atelier Zero(B building)Parking Pro Co., Ltd.
(C building)Daiwa House Industry
Co., Ltd.
(D building)Daiwa House Industry
Co., Ltd.
(E building)(F building)Toda Corporation(G building)
Akou Co., Ltd. First-Class
Architect Office(H building)
Akou Co., Ltd. First-Class
Architect Office(A building)Toei Interior Co., Ltd.,
Iidagumi Co., Ltd. (for newbuilding construction)
Entestsu General
Constructor (for building
expansion)(B building)Parking Pro Co., Ltd.
(C building)Daiwa House Industry Co.,Ltd.
(D building)Daiwa House Industry Co.,Ltd.
(E building)Daiwa House Industry Co.,Ltd.
(F building)Toda Corporation(G building)
Akou Co., Ltd.
(H building)
Akou Co., Ltd.

(A building)Hamamatsu City
(B building)
Kakunin Service Inc.
(C building)
Shizuokaken Kenchiku
Jyuutaku Machizukuri
Center(D building)
Shizuokaken Kenchiku
Jyuutaku Machizukuri
Center(E building)
Shizuokaken Kenchiku
Jyuutaku Machizukuri
Center(F building)
Shizuokaken Kenchiku
Jyuutaku Machizukuri
Center(G building) HamamatsuCity(H building) Hamamatsu
City

Note 2:

The above company names are names at the time of construction confirmation, completion, or acquiring inspection certificate for respective properties, even in cases ofpast changes in names.
The name of actual construction company is shown, although it was Daiwa System Co., Ltd. at the time of application procedure for building confirmation.

Note 3:

Individuals’ names are not disclosed because these are personal information.

42

Kenedix Retail REIT Corporation (3453)
vii) Overview of portfolio(A) Distribution by Property Type
Property type
Neighborhood, community and other shopping centers for daily

Percentage of total portfolio
acquisition price(%) (Note)

Acquisition price(in millions)40

158,766

100.0

NSC (Neighborhood Shopping Centers)

16

73,768

46.5

SM (Super Markets)

8

11,4497.2

CSC Community shopping Centers）

1

14,848

9.4

Urban Station-Front Shopping Centers

6

38,02824.0

SS (Specialty Store)

9

20,673

13.0

-

-

-

40

158,766

100.0

needs

Other retail properties
Total
Note:

Number ofproperties

Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total acquisition price may differ from the portfolio total.

(B) Distribution by Location
RegionFour major metropolitan areas

Percentage of total portfolio
acquisition price(%) (Note)

Acquisition price(in millions)32

128,361

80.8

Tokyo metropolitan area

17

70,136

44.2

Greater Osaka area

10

44,214

27.8

Greater Nagoya area

412,514

7.9

Fukuoka area

1

1,497

0.9

8

30,40519.2

40

158,766

100.0

Ordinance-designated cities, core cities and other areas
Total
Note:

Number ofproperties

Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total acquisition price may differ from the portfolio total.

(C) Distribution by Property Age
Property age(Note 1)

Number ofproperties

Acquisition price(in millions)

Percentage of total portfolio
acquisition price (Note 2)Less than 5 years

-

-

-

5 years or more but less than 10 years

12

44,82833.3

10 years or more

18

89,71766.7

30

134,545

100.0

Total
Note 1:
Note 2:

Property age refers to the number of years from the date of the new construction of the property set out in the real estate registry to September 30, 2016. Where multiple
buildings exist on the property, the property age is calculated using the average age of those buildings.
Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total portfolio acquisition price may differ from theportfolio total.

43

Kenedix Retail REIT Corporation (3453)(D) Distribution by Lease Term Remaining
Lease term (remaining period)(Note 1)

Annual fixed rent (in millions)(Note 2)

Ratio (%)
(Note 3)

Less than 2 years

1,953

18.7

2 to less than 5 years

1,452

13.9

5 to less than 10 years

2,951

28.3

10 to less than 15 years

2,628

25.2

15 to less than 20 years

793

7.6

20 years or more

640

6.1

10,420

100.0

Total
Note 1:
Note 2:
Note 3:“Lease term (remaining period)” is based on period until the last date of the lease as set forth in the relevant lease agreements as of September 30, 2016 (excluding warehouses
for building lease agreements) for each acquired property and to-be acquired property.
“Annual fixed rent” for acquired property is calculated by multiplying the monthly fixed rent and common area charges for the month ended September 30, 2016 (excluding
warehouses in the case of building lease agreements) by twelve and rounding down to the nearest million yen. For master leases, where the master lease company sub-leases
space to other tenants, the fixed monthly rent under the master lease contract is multiplied by 12, rounded down to the nearest million yen.
“Ratio” is based on the annual fixed rent, rounded to the nearest tenth. As a result, simple aggregation of “ratio” figures may not be the same as the total period.

(E) Distribution by lease contract typeType of lease contract

Ratio (%) (Note)

Fixed-term building lease

66.6

Regular building lease

20.0

Commercial fixed-term land lease

13.3

Other

0.0
Total

Note:

100.0

“Ratio” is based on the annual fixed rent as indicated in Note 2 of (D) above, rounded to the nearest tenth. As a result, simple aggregation of “ratio” figures may not be thesame as the total figure.

(F) Rent type (Fixed / Sales-linked rent)
Rent type (Note 1)(Fixed / Sales-linked rent)

Ratio (%) (Note 2)

Fixed rent

81.9

Fixed rent with sales-linked rent

13.1

Sales-linked fixed

4.9
100.0

Total
Note 1:
Note 2:“Fixed rent” refers to rent that remains unchanged regardless of actual tenant sales revenues as set forth in the relevant lease agreements. “Fixed rent with sales-linked rent”
refers to rent that consist of a portion that remains unchanged regardless of actual tenant sales revenues and a portion that is based on tenant sales as set forth in the relevant
lease agreements. “Sales-linked rent” refers to rent that is based on actual tenant sales revenues as set forth in the relevant lease agreements.
“Ratio” is calculated according to the actual rent effective between April 1, 2016 and September 30, 2016, rounded to the nearest tenth. As a result, simple aggregation of“ratio” figures may not be the same as the total figure.

44

Kenedix Retail REIT Corporation (3453)
viii) Capital expenditures(A) Planned capital expenditures
The table below shows major capital expenditures (Note) for renovations, repairs and other projects that are planned for the fourth fiscal period
ending March 31, 2017. These expenditures are for real estate owned by KRR and real estate in trusts in which KRR owns trust beneficiary rights.
These planned projects may include some expenditures that will be recorded as expenses rather than capital expenditures for accounting purposes.
Planned amount of capital
expenditure
Property(Millions of yen)
Property nameLocation
PurposeSchedule
number
Total
Payment for the
Totalamountperiodalready paid
From October 2016
Yorktown Kita- Hiratsuka,
T-6
Roof waterproof
67
KanameKanagawa
to March 2017
From October 2016
O-5
Carino Esaka
Suita, Osaka
Elevator and escalator renewal
59
to March 2017
MONA ShinFrom October 2016
Urayasu, Chiba PMAC replacement
T-2
51
Urayasu
to March 2017
Kitaadachi-gun,
From October 2016
T-5
Unicus Ina
Exterior wall painting
46
Saitama
to March 2017
BlumerFrom October 2016
O-1
Kobe, Hyogo
LED installation to common area
41
Maitamonto March 2017
Note:

The construction of a new restaurant building in Unicus Ina is not including in the above list because it involves an acquisition of a new building. Please see Section 2.
Investment Policies and Status of Asset Management, (Reference Material), (B) Asset under construction for details.

(B) Capital expenditures during the period under review
The table below shows major capital expenditures for renovations, repairs and other projects in the period under review.
The amount of capital expenditures in the period under review was 264 million yen. There were also expenditures of 150 million yen that wererecorded as repair expenses. In total we spent 415 million yen on the projects.
Property
Capital expenditure
Property nameLocation
PurposeSchedule
number(Millions of yen)
From January 2016
MONA ShinReplacement of water generator and
T-2
Urayasu, Chiba
89
Urayasu
rooftop piping
to May 2016
MONA ShinFrom June 2016
T-2
Urayasu, Chiba Reparement of shutter
20
Urayasu
to August 2016
BlumerFrom April 2016
O-1
Kobe, Hyogo
Common area refurbishment
20
Maitamonto April 2016
From March 2016
MONA ShinT-2
Urayasu, Chiba Reparement of cooling tower
19
Urayasuto June 2016
From July 2016
R-1
Roseo Mito
Mito, Ibaraki
Singboard and exterior wall painting
13
to September 2016
Other

101

Total

264

(C) Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
Not applicable45

Kenedix Retail REIT Corporation (3453)
ix) Major portfolio properties
The table below shows the major property owned by KRR as of September 30, 2016. Major properties are defined as those that account for 10% or moreof our total rental revenue generated from all assets held by KRR.
Annual rent
Property
Number of
Leased area
Leasable area
Property name(Millions of yen)numbertenants(m2)(m2)(Note)T-1
Note:

Fululu Garden Yachiyo

49

1,074

76,751.87

77,057.56

Annual rent is 12 times the fixed monthly rent (including a common service charge) under a leasing contract with tenants at portfolio properties as of September 30, 2016(excluding building leasing contracts for warehouses), rounded down to the nearest million yen. For master leases, where the master lease company sub-leases space toother tenants, the fixed monthly rent under the master lease contract is multiplied by 12, rounded down to the nearest million yen.

46

Kenedix Retail REIT Corporation (3453)(3) Information Concerning Major Tenantsi) Top End-Tenants in Terms of Rent
The following summarizes top ten tenants (end-tenants or sub-lease type master leasee) as of September 30, 2016
Ratio
(%)
(Note 2)

Annualfixed rent
(in thousandsof yen)(Note 3)Tenantleaseholdand security
deposits(in millions of yen)
(Note 4)(Note 5)(Note 5)(Note 5)

Type ofbusiness(Note 1)

Property nameTotal
leasedarea(m2)

RetailFululu Garden Yachiyo(Note 5)

Real estate

A Unicus Ina
B Unicus Kamisato (Land)
C Unicus Konosu (Land)
D Ashico Town Ashikaga

104,392.38

RetailYorktown Kita-Kaname(Note 5)

Life Corporation

RetailA Unicus Yoshikawa,
B Central Square Takadono(Land)C Life Nishi-Tengachaya

12,501.97

Lixil Viva Corporation

RetailA Super Viva Home Iwatsuki(Land)B Roseo Mito

(Note 5)

Edion Corporation

RetailBlumer Maitamon(Note 5)

Daiwaroyal Co., Ltd.

Real estate

COMBOX Komyoike

25,530.44

3.8

Toyota Tsusho Corporation

Wholesale

Homecenter Kohnan Sunadabashi

20,329.07

3.0(Note 5)(Note 5)

York Benimaru Co., Ltd.

RetailA Ashico Town Ashikaga
B Yorktown Shinden-Higashi

11,509.94

1.7(Note 5)(Note 5)

Otsuka Kagu, Ltd.

RetailSolala Plaza(Note 5)(Note 5)(Note 5)

Name of end tenants

Ito-Yokado Co., Ltd.
(Note 5)

P&D Consulting Co., Ltd

YorkMart Co., Ltd.

Note 1:
Note 2:
Note 3:Note 4:Note 5:

15.5(Note 5)

491,707

246(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)1.9(Note 5)452,523459“Type of business” is based on Japan Standard Industrial Classification.
“Ratio” is the ratio of leased area of the end-tenant to total leasable area of the portfolio as of September 30, 2016, rounded to the nearest tenth.
“Annual fixed-rent” for each property is based on monthly contracted rent (including common area charges) as set forth in the relevant lease agreements effective as of
September 30, 2016 (excluding warehouses for building lease agreements) for each property or property in trust, truncated to thousands of yen. In a sub-lease-type master
lease, the annual rent (excluding consumption taxes) agreed upon in the master lease agreement or the amount obtained by multiplying the monthly rent (excluding
consumption taxes) agreed upon in the master lease agreement by 12, rounded down to the nearest thousand yen, is shown.
Indicates the outstanding balance of any tenant leasehold and security deposit from the relevant end-tenant(s) set forth in lease agreement(s) effective as of September 30,
2016, rounded down to the nearest million yen.
We have not obtained consent from the tenant to release this information.

47

Kenedix Retail REIT Corporation (3453)
ii) Top End-Tenants in Terms of Leased Area
The end-tenants or the sublease type master lessees that cover over 10% of the total leased area of portfolio as of September 30, 2016 are as follows.
Totalleased area(m2)

Name of end
tenants

Type ofbusiness

P&D
Consulting
Co., LtdReal estate

A Unicus Ina
B Unicus Kamisato (Land)
C Unicus Konosu (Land)
D Ashico Town Ashikaga

104,392.38

Lixil Viva
Corporation

RetailA Super Viva Home Iwatsuki(Land)B Roseo Mito

(Note)

Note:

Property name

Annualfixed rent
(in thousandsof yen)48

Lease term
endLease renewal

246

A Sep. 25, 2026
B Oct. 1, 2055
C Oct. 1, 2055
D Mar. 31, 2026

A Not Applicable
B Not Applicable
C Not Applicable
D Not Applicable(Note)(Note)

491,707(Note)We have not obtained consent from the tenant to release this information.

Tenantleaseholdand security
deposits(in millions of yen)

(Note)

Kenedix Retail REIT Corporation (3453)
H27.2.10【Reference】

H27.2.10

H27.2.10

H27.2.10

H27.2.10

H27.2.10

H27.2.10

H27.2.10

H27.10.2

Earnings Performance for the Individual Properties for the 3rd Fiscal Period (April 1, 2016 to September 30, 2016) ：183 days
Tokyo metropolitan area

Location
Property No.

T-1

T-2

T-3

T-4

T-5

T-6

T-7

T-8

H27.10.2

H27.10.2

H27.10.2※As of September 30, 2016

T-9

T-10

T-11

T-12

K’s DenkiSports Club
Daikanyama
Unicus Kamisato Unicus Konosu
Super Viva Home
Yorktown
UnicusFululu Garden
MONA
Passaggio
ShonanRenaissance
Address
Unicus Ina(Land)(Land)
Iwatsuki (Land)
Kita-Kaname
Yoshikawa
YachiyoShin-Urayasu
Nishiarai
Fujisawa (Land)
Fujimidai
Dixsept
February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 October 2, 2015 October 2, 2015 October 2, 2015 October 2, 2015

Property Name
Acquisition Date
Price
Information

Acquisition price ( In millions of yen )14,848

8,063

5,850

5,390

4,379

4,000

3,600

2,586

4,815

3,169

3,000

Percentage of total portfolio

9.4%

5.1%

3.7%

3.4%

2.8%

2.5%

2.3%

1.6%

3.0%

2.0%

1.9%

1.1%

Net book value ( In millions of yen )14,984

8,373

5,915

5,431

4,394

3,998

3,637

2,576

4,890

3,210

3,043

1,726

Appraisal value at the end of period ( In millions of yen )15,200

8,560

6,370

5,740

4,510

4,300

3,800

2,720

5,280

3,440

3,010

1,740

9.0%

5.1%

3.8%

3.4%

2.7%

2.6%

2.3%

1.6%

3.1%

2.0%

1.8%

1.0%

49

1（71）

1（41）

1（26）

1

1

1（11）

1

1

1

1

1

Leasable floor area (㎡)

77,057.56

9,568.31

10,546.25

5,056.39

13,044.37

10,648.27

3,120.87

67,325.95

15,578.58

67,854.47

19,329.00

Leased floor area (㎡)76,751.87

9,145.66

10,342.77

4,966.98

13,044.37

10,648.27

3,120.87

67,325.95

15,578.58

67,854.47

19,329.00

As of September 30, 2016

99.6%

95.6%

98.1%

98.2%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of March 31, 2016

99.4%

96.1%

98.3%

98.7%

100.0%

100.0%

99.2%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2015

99.5%

98.0%

98.3%

93.9%

100.0%

100.0%

100.0%

100.0%----

Operating periods

183days183days183days183days183days183days183days183days183days183days183days183days①Rental and other operating revenues ( In thousands of yen )Percentage of total appraisal value
Number of tenants
Lease Information(Note)

1,700

Occupancy ratio

Income and Retained Earnings Information

736,676

497,497

326,652

268,784

131,843

130,482

72,606

41,516

Rental revenues

624,042

342,898

209,893

188,923

131,736

128,557

72,606

41,507

Other operating revenues

112,633

154,599

116,758

79,861

107

1,925

-

9

357,639291,741

162,782

146,841

17,38240,339

6,243

4,595

②Property-related expenses ( In thousands of yen )Reference

Property management fees

142,528

84,00746,92853,084

1,800

Taxes

70,95822,94735,18911,872

10,42624,122

Utilities

68,76457,76539,02435,379-Repairs and maintenance

20,98854,587

7,579

8,668

4,308

Insurance

1,850

813

546

307

322

Trust fees and other expenses

52,547

71,62033,51437,528525③NOI（＝①-②） ( In thousands of yen )379,037

205,755

163,869

121,943

114,460

106,777

90,14364,009103,418④Depreciation ( In thousands of yen )83,35847,09531,915

15,21029,535

20,343

15,512

15,127-⑤Rental operating income（＝③-④）( In thousands of yen )295,678

158,659

131,953

106,732

84,92586,434

74,631

48,881

103,418⑥Capital expenditures ( In thousands of yen )40,683

138,817

13,357

5,418

7,222

252

10,920

-

-

-

-

-

⑦NCF（＝③-⑥） ( In thousands of yen )338,353

66,938150,511

116,525

107,238

106,525

79,22264,009103,418

79,36866,36236,92011.1%(Note)

1,200

1,200

4,777

3,129

-

-

-

567

-

-

245

-

-

823

266

266

79,36866,36236,920---79,36866,36236,920(Note)(Note)(Note)

14,580

48.5%

58.6%

49.8%

54.6%

13.2%

9.1%

30.9%

11.7%

12.7%

6.4%

8.6%

Property tax for the year 2016 ( In thousands of yen )141,875

45,89570,36923,745

20,79014,53829,16011,26327,077

7,981

9,551

Assets pledged as collateral○

Expense ratio（＝②／①）

-

-

-

-

49

-

-

-

-

-

-

6,257
-

Kenedix Retail REIT Corporation (3453)
H27.10.2【Reference】

H27.10.2

H28.4.21

H28.4.20

H28.4.21

H27.2.10

H27.2.10

H27.2.10

H27.4.16

Earnings Performance for the Individual Properties for the 3rd Fiscal Period (April 1, 2016 to September 30, 2016) ：183 days
Tokyo metropolitan area
Greater Osaka area

Location
Property No.

T-13

Property Name

Inageya Yokohama
Minamihonjuku(Land)

T-14

Acquisition Date

October 2, 2015 October 2, 2015 April 21, 2016 April 20, 2016

Gourmet City
Chiba-Chuo

T-15

T-16

Nakamachidai
Tokyu Store

Central Wellness
Club Nagatsuta
Minamidai

T-17

O-1

O-2

O-3

Piago Kahma
Central SquareHome Center
Life Kameido Blumer Maitamon
Takadono (Land)
Omihachiman
April 21, 2016 February 10, 2015 February 10, 2015 February 10, 2015

H27.10.2

H27.10.2

H27.10.2※As of September 30, 2016

O-4

O-5

O-6

O-7

Blumer HAT
KobeCarino Esaka

COMBOX
Komyoike

Hankyu Oasis
Hirakatadeguchi

April 16, 2015 October 2, 2015 October 2, 2015 October 2, 2015

Price
Information

Acquisition price ( In millions of yen )

1,442

760

3,360

1,724

1,450

8,389

2,685

2,140

11,000

6,555

6,450

Percentage of total portfolio

0.9%

0.5%

2.1%

1.1%

0.9%

5.3%

1.7%

1.3%

6.9%

4.1%

4.1%

0.8%

Net book value ( In millions of yen )

1,462

779

3,493

1,802

1,473

8,465

2,727

2,157

11,538

6,587

6,469

1,327

Appraisal value at the end of period ( In millions of yen )

1,460

799

3,780

1,900

1,500

8,990

2,930

2,440

11,600

6,590

6,940

1,310

0.9%

0.5%

2.2%

1.1%

0.9%

5.3%

1.7%

1.5%

6.9%

3.9%

4.1%

0.8%

1

1

1

2

1

49

1

2

1（41）

1（30）

1

1

Leasable floor area (㎡)4,405.41

3,488.77

5,968.71

3,996.70

2,929.58

30,037.11

4,437.07

14,313.00

24,185.02

7,540.58

25,530.44

2,960.38

Leased floor area (㎡)4,405.41

3,488.77

5,968.71

3,996.70

2,929.58

29,757.73

4,437.07

14,313.00

23,968.51

7,474.92

25,530.44

2,960.38

As of September 30, 2016

100.0%

100.0%

100.0%

100.0%

100.0%

99.1%

100.0%

100.0%

99.1%

99.1%

100.0%

100.0%

As of March 31, 2016

100.0%

100.0%

-

-

-

99.5%

100.0%

100.0%

98.7%

99.1%

100.0%

100.0%

Percentage of total appraisal value
Number of tenants

1,280

Lease Information

Occupancy ratio

-

-

-

-

-

99.5%

100.0%

100.0%

99.5%

-

-

-

183days183days163days164days163days183days183days183days183days183days183days183days

As of September 30, 2015
Operating periods①Rental and other operating revenues ( In thousands of yen )Income and Retained Earnings Information

53,440510,350

491,969

295,046

226,261

Rental revenues

52,056

363,099

367,890

200,297

226,261

Other operating revenues

1,384

147,251

124,079

94,749-3,929

232,584

221,096

115,51133,378②Property-related expenses ( In thousands of yen )66,11540,464

1,800

Taxes

12

42,61647,30424,56630,473

Utilities

294

91,76381,85942,819-Repairs and maintenance302

15,025

3,044

4,540

-

Insurance

115

812

935

721

690

Trust fees and other expenses

366

22,771

21,8372,398

414

Property management fees

(Note)③NOI（＝①-②） ( In thousands of yen )④Depreciation ( In thousands of yen )⑤Rental operating income（＝③-④）( In thousands of yen )⑥Capital expenditures ( In thousands of yen )(Note)

2,838(Note)

59,595(Note)(Note)(Note)(Note)

31,85919,18884,94149,511

32,739277,766

63,872

74,689270,872

179,535

192,883-

9,734

20,306

7,745

2,980

50,943-

10,53452,32827,80232,89436,2005,201

31,8599,453

64,634

41,76529,759226,822

63,87264,155

218,544

151,732

159,988

30,999Reference

-

1,184

-

-

-

21,663

-

-

5,292

2,966

-

-

⑦NCF（＝③-⑥） ( In thousands of yen )31,85918,00484,94149,511

32,739256,10263,872

74,689265,580

176,569

192,883

36,200

Expense ratio（＝②／①）

11.4%

46.8%

18.6%

7.4%

5.8%

45.6%

7.1%

20.4%

44.9%

39.2%

14.8%

16.8%

Property tax for the year 2016 ( In thousands of yen )5,284

11,43014,145

12,274

8,467

85,207

6,818

29,447

94,48649,13260,941

Assets pledged as collateral

-

-

-

-

-

50

-

-

○

-

-

-

7,844
-

Kenedix Retail REIT Corporation (3453)
H27.10.2【Reference】

H28.1.21

H28.4.21

H27.2.10

H27.2.10

H27.2.10

H28.4.21

H27.2.10

H27.2.10

H27.2.10

H27.2.10

H27.10.2

Earnings Performance for the Individual Properties for the 3rd Fiscal Period (April 1, 2016 to September 30, 2016) ：183 days ※As of September 30, 2016
Greater Osaka area
Greater Nagoya area
Fukuoka area Ordinance-designated cities, core cities and other areas

Location
Property No.

O-8

Property Name

WelciaKishiwadakamori(Land)

O-9

O-10

N-1

N-2

N-3

N-4

K’s Denki
Kahma Home
Valor IchinomiyaLife NishiNakagawa
Center Nakagawa
Nishi
Tengachaya
Tomita (Land)
Tomita (Land)
October 2, 2015 January 21, 2016 April 21, 2016 February 10, 2015 February 10, 2015 February 10, 2015

Acquisition Date

Million Town
Tsukaguchi(Land)

F-1

R-1

R-2

R-3

R-4

Super Sports
K’s Denki
Ashico Town
Xebio
Sunny Noma
Roseo Mito
Aomori
Ashikaga
Aomori-Chuo
HontenApril 21, 2016 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 October 2, 2015
Homecenter
KohnanSunadabashi

Price
Information

Acquisition price ( In millions of yen )

487

1,505

3,723

2,311

2,174

889

7,140

1,497

10,046

1,469

898

Percentage of total portfolio

0.3%

0.9%

2.3%

1.5%

1.4%

0.6%

4.5%

0.9%

6.3%

0.9%

0.6%

4,180
2.6%

Net book value ( In millions of yen )

497

1,572

3,772

2,351

2,170

907

7,206

1,499

10,079

1,486

903

4,370
5,060

500

1,650

3,810

2,540

2,280

960

7,220

1,520

10,900

1,550

924

0.3%

1.0%

2.3%

1.5%

1.4%

0.6%

4.3%

0.9%

6.5%

0.9%

0.5%

3.0%

1

1

1

1

1

1

1

1

1（22）

1

1

1（26）

Leasable floor area (㎡)3,033.45

2,679.52

8,264.46

20,329.07

2,814.67

48,296.15

10,083.41

Leased floor area (㎡)3,033.45

2,679.52

8,264.46

20,329.07

2,814.67

48,161.79

10,083.41

As of September 30, 2016

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

99.7%

100.0%

100.0%

99.1%

As of March 31, 2016

100.0%

100.0%-

100.0%

100.0%

100.0%-

100.0%

100.0%

100.0%

100.0%

99.1%

-

-

-

100.0%

100.0%

100.0%-

100.0%

100.0%

100.0%

100.0%-

183days183days163days183days183days183days163days183days183days183days183days183daysAppraisal value at the end of period ( In millions of yen )Percentage of total appraisal value
Number of tenants

Lease Information

9,447.48(Note)(Note)

9,447.48

65,616.31(Note)

65,019.74

Occupancy ratio

As of September 30, 2015
Operating periods①Rental and other operating revenues ( In thousands of yen )Rental revenues
Income and Retained Earnings Information

44,870378,055

278,190

44,870345,076

200,955-

32,97877,234

2,264

83,521

144,389

Other operating revenues②Property-related expenses ( In thousands of yen )Property management fees

1,800

(Note)(Note)(Note)(Note)(Note)(Note)

19,028(Note)(Note)

38,059(Note)

Taxes-

27,34025,377

Utilities-

26,026

61,934

Repairs and maintenance

-

6,366

9,633

Insurance

55

697

675

Trust fees and other expenses

408

4,062

8,709

③NOI（＝①-②） ( In thousands of yen )④Depreciation ( In thousands of yen )⑤Rental operating income（＝③-④）( In thousands of yen )⑥Capital expenditures ( In thousands of yen )10,69742,606

78,69560,03664,355

22,958

183,775

40,154

294,533

46,01528,380

-

4,682

-

-

14,526-40,50014,25247,089

6,365

4,894

133,800
28,143

10,69737,92478,69560,03649,82822,958143,275

25,902

247,443

39,64923,486105,657

Reference

-

-

-

-

-

-

-

-

13,406---⑦NCF（＝③-⑥） ( In thousands of yen )10,69742,606

78,69560,03664,355

22,958

183,775

40,154

281,126

46,01528,380133,800

Expense ratio（＝②／①）

19.0%

5.0%

1.6%

9.6%

18.4%

13.0%

1.3%

22.4%

22.1%

17.2%

16.4%

51.9%

Property tax for the year 2016 ( In thousands of yen )

2,073

6,507

6,884

9,869

20,2183,949

39,652

7,455

54,675

14,392

6,501

50,750Assets pledged as collateral

-

○

-

-

-

51

-

-

-

-

-

-

-

Kenedix Retail REIT Corporation (3453)
H27.10.2【Reference】

H27.10.2

H28.4.21

H28.4.22

Earnings Performance for the Individual Properties for the 3rd Fiscal Period (April 1, 2016 to September 30, 2016) ：183 days
Ordinance-designated cities, core cities and other areas

Location
Property No.

R-5

R-6

R-7

R-8

Property Name

Yorktown
ShindenHigashi

KasumiTechnopark
SakuraSolala PlazaP-1 Plaza Tenno

Total of 40
Properties

October 2, 2015 October 2, 2015 April 21, 2016 April 22, 2016

Acquisition Date
Price
Information

Acquisition price ( In millions of yen )

3,252

830

5,720

4,010

Percentage of total portfolio

2.0%

0.5%

3.6%

2.5%

100.0%Net book value ( In millions of yen )

3,342

856

5,761

4,193

161,443

Appraisal value at the end of period ( In millions of yen )

3,310

861

5,910

4,260

168,164

2.0%

0.5%

3.5%

2.5%

100.0%

2

1

1

7

405

Leasable floor area (㎡)

12,768.77

2,047.65

12,030.83

674,491.03

Leased floor area (㎡)

12,768.77

2,047.65

12,030.83

672,177.32

As of September 30, 2016

100.0%

100.0%

100.0%

100.0%

99.7%

As of March 31, 2016

100.0%

100.0%

-

-

99.6%

Percentage of total appraisal value
Number of tenants
Lease Information(Note)

158,766

Occupancy ratio

-

-

-

-

183days183days163days162days

As of September 30, 2015
Operating periods①Rental and other operating revenues ( In thousands of yen )Rental revenues

127,024

6,374,168

119,806

5,405,789

Income and Retained Earnings Information

Other operating revenues②Property-related expenses ( In thousands of yen )Property management fees

(Note)(Note)

99.6%
180days *Total: Cost-weighted average operating period (days)(Note)

Taxes
Utilities
Repairs and maintenance

7,217

968,378

5,177

2,146,012

2,642

684,96314

482,449200

523,159

1,047

150,915

Insurance

766

12,341

Trust fees and other expenses

506

292,182
4,228,155③NOI（＝①-②） ( In thousands of yen )95,46722,736135,967

121,846④Depreciation ( In thousands of yen )13,591

2,661

43,111

15,781

714,171⑤Rental operating income（＝③-④）( In thousands of yen )81,87520,07592,855106,065

3,513,984

Reference⑥Capital expenditures ( In thousands of yen )

3,609

-

-

-

264,794⑦NCF（＝③-⑥） ( In thousands of yen )91,85722,736135,967

121,846

3,963,361

Expense ratio（＝②／①）

38.0%

19.4%

23.5%

4.1%

33.7%

Property tax for the year 2016 ( In thousands of yen )31,456

4,008

30,81829,901

1,113,102

Assets pledged as collateral

-

-

-

-

Note:We have not obtained consent from the tenant(s) to release this information.

52※As of September 30, 2016

Kenedix Retail REIT Corporation (3453)(Reference) Borrowings
Classification

Borrowings on a financial institution basis as of September 30, 2016 are as follows:
Balance at theDecrease
Increase during
Balance at the
beginning ofduring thethe period
end of period
Lenderperiodperiod(Thousands of(Thousands of(Thousands of(Thousands of
yen)
yen)
yen)
yen)
Sumitomo Mitsui Banking Corporation
2,050,000
2,050,000

Short-Term Loans Payable

Sumitomo Mitsui Banking Corporation

2,450,000--

2,450,000

Sumitomo Mitsui Banking Corporation

450,000--

450,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

450,000--

450,000

Mizuho Bank, Ltd.

400,000--

400,000

Resona Bank, Ltd.

250,000--

250,000

Aozora Bank, Ltd.

250,000--

250,000

Sumitomo Mitsui Trust Bank, Ltd.

200,000--

200,000

Sumitomo Mitsui Banking Corporation-

4,140,000-

4,140,000

Mizuho Bank, Ltd.

-

360,000-

360,000

Sumitomo Mitsui Banking Corporation（Note 7）-

800,000

800,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-1,070,000

Sub Total

0.488

April 21, 2017-

1,070,000

0.484

April 21, 2017

6,370,000

800,000

12,070,000--

2,300,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

800,000--

800,000

Mizuho Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

350,000--

350,000

Sumitomo Mitsui Banking Corporation

2,400,000--

2,400,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

800,000--

800,000

Mitsubishi UFJ Trust and Banking Corporation

800,000--

800,000

Sumitomo Mitsui Trust Bank, Ltd.

550,000--

550,000

Aozora Bank, Ltd.

500,000--

500,000

Resona Bank, Ltd.

500,000--

500,000

The Gunma Bank, Ltd.

400,000--

400,000

The Musashino Bank, Ltd.

400,000--

400,000

Mizuho Bank, Ltd.

350,000--

350,000

300,000--

300,000

Sumitomo Mitsui Banking Corporation

3,000,000--

3,000,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

700,000--

700,000

Sumitomo Mitsui Trust Bank, Ltd.

500,000--

500,000

Aozora Bank, Ltd.

450,000--

450,000

Resona Bank, Ltd.

450,000--

450,000

Long-Term Loans Payable

Unsecured/Non-guaranteed(Note 5)

Unsecured/Non-guaranteed

0.751 February 10, 2020

0.865 February 10, 2021

400,000--

400,000

2,600,000--

2,600,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

800,000--

800,000

Sumitomo Mitsui Trust Bank, Ltd.

600,000--

600,000

Aozora Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

Mizuho Bank, Ltd.

300,000--

300,000

Resona Bank, Ltd.

300,000--

300,000

Development Bank of Japan Inc.（Note 6）

1,500,000--

1,500,000

0.925 February 10, 2021

Development Bank of Japan Inc.（Note 6）

1,600,000--

1,600,000

1.033 February 10, 2022

Sumitomo Mitsui Banking Corporation

4,600,000--

4,600,000

1.366

April 16, 2025

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

750,000--

750,000

Aozora Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

400,000--

400,000

0.534

March 31, 2019

Sumitomo Mitsui Trust Bank, Ltd.

200,000--

200,000

Resona Bank, Ltd.

200,000--

200,000

The Musashino Bank, Ltd.

150,000--

150,000

1,000,000--

1,000,000

Sumitomo Mitsui Trust Bank, Ltd.

600,000--

600,000

Mizuho Bank, Ltd.

400,000--

400,000

0.975

March 31, 2023

Resona Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

Mitsubishi UFJ Trust and Banking Corporation

400,000--

400,000

Development Bank of Japan Inc.（Note 6）

1,500,000--

1,500,000

0.994

March 31, 2023

Sumitomo Mitsui Banking Corporation

1,850,000--

1,850,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

550,000--

550,000

Sumitomo Mitsui Trust Bank, Ltd.

500,000--

500,000

0.545

March 31, 2019

Resona Bank, Ltd.

300,000--

300,000

The Musashino Bank, Ltd.

250,000--

250,000

Mitsubishi UFJ Trust and Banking Corporation

450,000--

450,000

Resona Bank, Ltd.

200,000--

200,000

0.987

March 31, 2023

The Musashino Bank, Ltd.

150,000--

150,000

Development Bank of Japan Inc.（Note 6）

1,500,000--

1,500,000

1.013

March 31, 2023

Sumitomo Mitsui Banking Corporation

3,000,000--

3,000,000

Mizuho Bank, Ltd.

1,150,000--

1,150,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,000,000--

1,000,000

1.110

March 31, 2024

Mizuho Trust & Banking Co., Ltd.

700,000--

700,000

Sumitomo Mitsui Trust Bank, Ltd.

650,000--

650,000

Resona Bank, Ltd.

500,000--

500,000
53(Note 5)0.545 February 10, 2018

Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Remarks

0.489 February 10, 2017-

2,300,000

Use

October 2, 2016

April 21, 2017

6,500,000

Mizuho Bank, Ltd.

0.539

0.484

Sumitomo Mitsui Banking Corporation

Mizuho Trust & Banking Co., Ltd.

Averageinterest rate
Payment due date
(Note 2)
（Note 4）(Note 3)(％)
0.539 October 2, 2016

0.978 February 10, 2022

Kenedix Retail REIT Corporation (3453)
Classification

LenderSumitomo Mitsui Banking Corporation
Long-Term Loans Payable

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Balance at theDecrease
Increase during
Balance at the
beginning ofduring thethe period
end of period
periodperiod(Thousands of(Thousands of(Thousands of(Thousands of
yen)
yen)
yen)
yen)
1,500,000
1,500,000

Averageinterest rate
(Note 2)
(Note 3)(％)

Payment due date
（Note 4）

1.243

April 16, 2025

400,000--

400,000

Mizuho Bank, Ltd.

-

710,000-

710,000

Sumitomo Mitsui Trust Bank, Ltd.

-620,000-

620,000

Sumitomo Mitsui Trust Bank, Ltd.

-

450,000-

450,000

0.803 September 30, 2024

Development Bank of Japan Inc.（Note 6）-

890,000-

890,000

0.760 September 30, 2024

Sumitomo Mitsui Banking Corporation-

2,670,000-

2,670,000

0.932

April 21, 2026

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

890,000-

890,000

0.888

October 31, 2025

Sub Total
Total

51,000,000

6,230,000-

57,230,000

57,500,000

12,600,000

800,000

69,300,000

Use

Remarks(Note 5)

Unsecured/Non-guaranteed

0.368 September 30, 2019

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled after the balance sheet date are as follows:(Thousands of yen)
Due after 1 year
through 2 years
Long-term loans payable

Due after 2 years
through 3 years

3,850,000

6,980,000

Due after 3 years
through 4 years
7,000,000

Due after 4 years
through 5 years
7,000,000

Due after 5 years
32,400,000

Note 2: All debts except for the following Note 6 are borrowings at a floating rate.
Note 3: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, with regard to borrowings for which interest rate swap transactions were implemented in order tohedge the interest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps are indicated.
Note 4: All the repayment methods of debt financing except for the following Note 7 are lump-sum repayments on the due date.
Note 5: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses are included) and repayment of debts.
Note 6: Borrowings at a fixed rate.
Note 7: Prepayment was made on May 31, 2016.

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