Financial Statements(23rd Fiscal Period: From February 1, 2023 to July 31, 2023)

Independent Auditor’s Report
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Balance Sheet
As of July 31, 2023
23rd Fiscal Period
as of July 31, 2023

22nd Fiscal Period
as of January 31, 2023

(in thousands of yen)
ASSETS
Current assets
Cash and deposits (Notes 8)
Cash and deposits in trust (Notes 8)
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Noncurrent assets
Property, plant and equipment (Notes 16 and 20)
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
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
Total property, plant and equipment, net
Intangible assets
Leasehold right in trust (Notes 16 and 20)
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets¥13,203,144
11,057,971
52,44067,71028,477
4,166
24,413,910¥13,949,810
11,589,952
65,826
10,953
5,414
25,621,956

1,322,747(22,036)
1,300,710
31,606(992)
30,61345,429(1,683)43,746
4,397,829
127,272,710(21,938,495)
105,334,215
1,574,202(469,601)
1,104,601
1,659,175(588,714)
1,070,460
1,457,373(292,713)
1,164,659
185,749,321
300,196,157

447,056(5,962)441,093
10,306(292)
10,013
10,342(430)
9,912
1,804,624
125,940,957(20,303,778)
105,637,178
1,568,935(429,359)
1,139,576
1,600,108(552,744)
1,047,363
1,405,598(249,410)
1,156,188
185,748,052
296,994,003

1,847,727
1,847,727

1,849,451
129
1,849,581

89,228780,469805,103
1,674,801
303,718,686

89,348
841,793
1,507,646
2,438,787
301,282,373

36,162
50,69186,853¥328,219,450

40,131
69,733
109,864¥327,014,194

23rd Fiscal Period
as of July 31, 2023

22nd Fiscal Period
as of January 31, 2023

(in thousands of yen)
LIABILITIESCurrent liabilities
Operating accounts payable¥941,154¥674,463

Short-term loans payable (Notes 22)

2,000,000

8,250,000

Current portion of investment corporation bonds (Notes 10 and 21)

1,000,000

1,000,000

Current portion of long-term loans payable (Notes 10, 12 and 22)
Accounts payable-otherAccrued expenses
Income taxes payable

20,350,000
443,70970,593605

18,100,000
445,820
59,238605

Accrued consumption taxes

21,002

78,103

1,474,720
82,913

1,448,324
93,981

735
26,385,436

1,008
30,151,545

Investment corporation bonds (Notes 10 and 21)

6,700,000

6,700,000

Long-term loans payable (Notes 10, 12 and 22)

135,870,000

130,170,000

Advances received
Deposits received
Other
Total current liabilities
Noncurrent liabilities

Tenant leasehold and security deposits

277,440

140,000

Tenant leasehold and security deposits in trust

3,815,292

3,826,300

Tenant lump sum deposits in trust

4,227,622

4,325,202

68,826

68,638Asset retirement obligations (Note 15)
Other

26,046-150,985,227

145,230,141

177,370,664

175,381,687

130,379,080

130,379,080

13,187,100

13,187,100

1,820,000

1,840,000

Total voluntary retained earnings

1,820,000

1,840,000

Unappropriated retained earnings

4,682,702

4,718,142

19,689,802
150,068,882

19,745,242
150,124,322

Deferred gains or losses on hedges (Notes 10 and 12)

779,904

1,508,184

Total valuation and translation adjustments

779,904

1,508,184

Total noncurrent liabilities
Total liabilities
NET ASSETS
Unitholders' equity
Unitholders' capital
SurplusCapital surplus
Voluntary retained earnings
Reserve for temporary difference adjustments (Note 4)

Total surplus
Total unitholders' equity
Valuation and translation adjustments

Total net assets (Note 3)

150,848,786

151,632,506

Total liabilities and net assets¥328,219,450¥327,014,194

See accompanying notes to the financial statements.

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Income and Retained Earnings
For the period from February 1, 2023 to July 31, 2023
23rd Fiscal Period
22nd Fiscal Period
from February 1, 2023
from August 1, 2022
to July 31, 2023
to January 31, 2023
(in thousands of yen)
Operating revenues
Rent revenue-real estate (Note 6)
Other lease business revenue (Note 6)
Gain on sales of real estate property (Note 6)
Total operating revenues
Operating expenses
Expenses related to rent business (Note 6)
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Gain on forfeiture of unclaimed dividends
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing expenses
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes (Note 14)
Current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings¥9,378,143
704,871
10,083,015¥9,064,123
567,986
304,729
9,936,839

3,717,195
756,233
16,51357,0434,500
308,840
4,860,326
5,222,688

3,517,747
769,195
16,38554,012
4,500
280,282
4,642,123
5,294,715

46
165
212

46
100
16
163

523,846
26,386
147,660
3,968
19,041
720,9034,501,997
4,501,997

512,288
26,853
135,305
3,968
22,627701,045
4,593,834
4,593,834

605
605
4,501,392
181,309¥4,682,702

605
605
4,593,229
124,913¥4,718,142

See accompanying notes to the financial statements.

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Changes in Net Assets
For the period from February 1, 2023 to July 31, 2023

Unitholders'
capitalBalance as of July 31, 2022 (Note 7)
Changes of items during the period
Issuance of new investment units
Reversal of reserve for temporary difference
adjustments
Dividends from surplus
Net income
Net changes of items other than unitholders'equityTotal changes of items during the period
Balance as of January 31, 2023 (Note 7)
Changes of items during the period
Reversal of reserve for temporary difference
adjustments
Dividends from surplus
Net income
Net changes of items other than unitholders'equityTotal changes of items during the period
Balance as of July 31, 2023 (Note 7)¥125,564,617

Capital surplus¥13,187,100

Unitholders' equity
Surplus
Voluntary retained earnings
Unappropriate
Total
Reserve ford retained
voluntary
temporaryearnings
retaineddifference
earnings
adjustments(in thousands of yen)
¥1,860,000¥1,860,000¥4,393,566

Total
unitholders'equity¥19,440,666¥145,005,284

4,814,462

4,814,462(20,000)

4,814,462¥130,379,080¥130,379,080¥13,187,100¥13,187,100(20,000)

Deferred gains orlosses on hedges

Total valuationand translation
adjustments(in thousands of yen)
¥252,885¥252,885

20,000--(4,288,653)
4,593,229(4,288,653)
4,593,229(4,288,653）
4,593,229(20,000)¥1,840,000(20,000)¥1,840,000

324,575¥4,718,142

304,575¥19,745,242

5,119,038¥150,124,322(20,000)(20,000)

20,000--(4,556,833)
4,501,392(4,556,833)
4,501,392(4,556,833)
4,501,392(35,440)¥4,682,702(55,440)¥19,689,802(55,440)¥150,068,882(20,000)¥1,820,000(20,000)¥1,820,000

Valuation and translation adjustments

Balance as of July 31, 2022 (Note 7)
Changes of items during the period
Issuance of new investment units
Reversal of reserve for temporary difference
adjustments
Dividends from surplus
Net income
Net changes of items other than unitholders'equityTotal changes of items during the period
Balance as of January 31, 2023 (Note 7)
Changes of items during the period
Reversal of reserve for temporary
difference adjustments
Dividends from surplus
Net income
Net changes of items other thanunitholders' equity
Total changes of items during the period
Balance as of July 31, 2023 (Note 7)

Total
surplus

Total net assets¥145,258,169
4,814,462(4,288,653)
4,593,229

1,255,298

1,255,298

1,255,298

1,255,298¥1,508,184

1,255,298¥1,508,184

6,374,337¥151,632,506(4,556,833)
4,501,392(728,279)(728,279)(728,279)(728,279)¥779,904(728,279)¥779,904(783,720)¥150,848,786

See accompanying notes to the financial statements.

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Cash Flows
For the period from February 1, 2023 to July 31, 2023
23rd Fiscal Period
22nd Fiscal Period
from February 1, 2023
from August 1, 2022
to July 31, 2023
to January 31, 2023
(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes¥4,501,997¥4,593,834

Depreciation and amortization

1,774,301

1,721,959

Amortization of investment corporation bond issuance costs

3,968

3,968

Amortization of investment unit issuance costs

19,041

22,627(46)(46)

550,232

539,142

Decrease (increase) in operating accounts receivable

13,385(8,767)

Decrease (increase) in consumption taxes refund receivable(28,477)

9,475

Decrease (increase) in prepaid expenses(56,757)

5,914

Increase (decrease) in operating accounts payable(122,806)

101,379

Interest income
Interest expenses

Increase (decrease) in accounts payable-other(2,957)59,423

Increase (decrease) in accrued consumption taxes(57,101)

61,977

Increase (decrease) in advances received

26,39660,976

Decrease (increase) in long-term prepaid expenses

61,324

98,251-

831,329

Decrease in net property, plant and equipment held in trust due to sale
Other, net(9,928)10,659Subtotal

6,672,572

8,112,105

Interest income received

46

46

Interest expenses paid

(538,898)(539,291)

Income taxes (paid) refund
Net cash provided by (used in) operating activities

(604)

1,211

6,133,116

7,574,072

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment(3,524,041)(2,099,311)

Purchase of property, plant and equipment in trust(1,060,873)(10,676,912)

Proceeds from lease and guarantee deposits

120-

Proceeds from tenant leasehold and security deposits

137,440

140,000

Repayments of tenant leasehold and security deposits in trust(155,503)(146,848)

Proceeds from tenant leasehold and security deposits in trust

144,496

241,166

Repayments of tenant lump sum deposits in trust(394,903)(232,050)

Proceeds from tenant lump sum deposits in trust

297,323

142,468

Net cash provided by (used in) investing activities(4,555,941)(12,631,488)

Proceeds from short-term loans payable

1,200,000

3,850,000

Repayments of short-term loans payable(7,450,000)-

Proceeds from long-term loans payable

16,250,000

7,000,000

Repayments of long-term loans payable(8,300,000)(6,250,000)

Net cash provided by (used in) financing activities

Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities-

4,781,336(4,555,821)(4,288,507)(2,855,821)

5,092,828

Net increase (decrease) in cash and cash equivalents(1,278,646)

35,412

Cash and cash equivalents at the beginning of period

25,539,762

25,504,350

Cash and cash equivalents at the end of period (Note 8)¥24,261,115¥25,539,762

See accompanying notes to the financial statements.

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Notes to Financial Statements
For the period from February 1, 2023 to July 31, 2023

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Residential Next Investment Corporation (“the Investment Corporation”) was established on November 15, 2011 under the Act on
Investment Trusts and Investment Corporations of Japan (“the Investment Trust Act”), and was listed on the Real Estate Investment Trust Market of
the Tokyo Stock Exchange (Securities Code: 3278) on April 26, 2012. Furthermore, the Investment Corporation conducted an absorption-type merger(“the Merger”) with the Investment Corporation as the surviving corporation and Japan Senior Living Investment Corporation (“JSL”) as the absorbed
corporation on March 1, 2018. Following the Merger, the Investment Corporation implemented a 2-for-1 investment unit split with an effective dateas of March 1, 2018.
After "the Merger", the Investment Corporation raised funds through six public offerings and five third-party allotments. As of July 31, 2023 (theend of the 23rd fiscal period), the number of investment units issued and outstanding totaled 1,070,433 units.
The Investment Corporation is externally managed by Kenedix Real Estate Fund Management, Inc. (“the Asset Management Company”), a
subsidiary of Kenedix, Inc. As the asset manager, the Asset Management Company shall provide flexible and speedy real estate investment andmanagement services based on the strategies of the Investment Corporation: “Flexible pursuit for appropriate investment and profit opportunities
with comprehension of the real estate market trends” and “Speedy execution based on expeditious information collection and judgement.”
During the 23rd fiscal period, the Investment Corporation acquired 2 healthcare facilities (total acquisition price of ¥3,320 million) . As a result, theInvestment Corporation has a portfolio comprised of 182 properties (total acquisition price of ¥304,232 million) as of the end of the 23rd fiscal period
ended July 31, 2023, which consists of 141 residential properties (total acquisition price of ¥222,570 million), 39 healthcare facilities (total acquisition
price of ¥76,702 million) and 2 accommodation facilities (total acquisition price of ¥4,960 million).
The occupancy rate of the overall portfolio was 97.9% and 98.2% as of the end of the 22nd and 23rd fiscal period, respectively.
During the 22nd and 23rd fiscal period, the Investment Corporation borrowed ¥6,250 million and ¥15,750 million as funds for repaying borrowings
due during the fiscal period, and borrowed ¥4,600 million and ¥1,700 million as funds for acquiring properties, respectively. As a result, the balanceof borrowings as of the end of the 22nd and 23rd fiscal period was ¥156,520 million and ¥158,220 million, respectively. The balance of interestbearing debt including investment corporation bonds as of the end of the 22nd and 23rd periods, was ¥164,220 million and ¥165,920 million,
respectively.
Basis of Presentation
The Investment Corporation maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (Japanese GAAP), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial
Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Investment Corporation, which were preparedin accordance with Japanese GAAP and were presented in the Securities Report of the Investment Corporation filed with the Kanto Local Finance
Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial statements
issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition, the notes to financial statements
include certain information that might not be required under Japanese GAAP but is presented herein as additional information.
The Investment Corporation fiscal period is a six-month period which ends at the end of January or July. The Investment Corporation does notprepare consolidated financial statements because it has no subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) Property and Equipment (including trust assets)
Property and equipment are stated at cost. Depreciation of property and equipment is calculated on a straight-line basis over the estimateduseful lives of the assets ranging as stated below:

Buildings

From February 1, 2023
to July 31, 2023
2-69 years

From August 1, 2022
to January 31, 2023
2-69 years

Structures

3-65 years

3-65 years

Machinery and equipment

3-40 years

3-40 years

Tools, furniture and fixtures

2-30 years

2-30 years(B) Intangible Assets (including trust assets)
Intangible assets are amortized by the straight-line method. Fixed-term leaseholds are amortized by the straight-line method based on thecontract period.
(C) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(D) Unit Issuance Costs
Unit issuance costs are amortized over a period of 3 years under the straight-line method.
(E) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(F) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all relevant assets
and liabilities in trust are recorded on the balance sheet and the statement of income and retained earnings.
(G) Revenue Recognition
Operating revenues consist of rental revenues including base rents, common area charges and other operating revenues, which include utility
charge reimbursement, parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an
accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and their amounts can be reasonably
estimated. Reimbursements from tenants including utility charge reimbursements are recorded on a gross basis and such amounts arerecorded both as revenues and expenses during the fiscal period.
(H) Taxes on Property and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar
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 from the date of disposal to the end of thecalendar year in which the property is disposed. The seller, however, is generally reimbursed by the purchaser for these accrued property-related
tax liabilities.
When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related to the period
following the purchase date of each property through the end of the calendar year. The amounts of those allocated portions of the propertyrelated taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to ¥5,436
thousand and ¥10,836 thousand as of January 31, 2023 and July 31, 2023, respectively.
(I)

Accounting for revenues
The main content of the performance obligation regarding the revenue from contracts with the customers of the Investment Corporation andthe normal point of time when satisfying the said performance obligation (normal point of time when recognizing revenue) are as follows.
1. Sale of real estate property
For the revenue from sale of real estate, etc., revenue is recorded when the buyer who is a customer gains control of the real estate by
performing the obligation of handover stipulated in the contract for real estate sales.
2. Utility charge reimbursements
For utility charge reimbursement, revenue is recorded in accordance with the supply of electricity, tap water, etc. to the lessee who is a customer

based on the lease agreement of real estate, etc. and the content of agreement incidental to it.
Of the utility charge reimbursement, for those that are determined to fall under the category of an agent by the Investment Corporation, the net
amount obtained by deducting the amount paid to other related parties supplying electricity, gas, etc. from the amount received as the fee ofelectricity, gas, etc. is recognized as revenue.
(J) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets andliabilities using the statutory tax rates.
(K) Non-deductible consumption taxes
Non-deductible consumption taxes applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(L) Derivative Financial Instruments
The Investment Corporation enters into derivative transactions to hedge risks prescribed in its Articles of Incorporation based on its risk
management policies. The Investment Corporation hedges interest rate volatility risk of its interest payments on its borrowings by utilizing
interest rate swap as hedging instruments.
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 basedon changed amount, etc. However, an assessment of the effectiveness of hedging activities is omitted in the case of interest rate swaps andother derivatives that meet the requirements for special treatment.
(M) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily
convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.
(N) Presentation of Amounts
Amounts of less than one thousand yen are truncated in the Japanese financial statements prepared in accordance with Japanese GAAP and
filed with regulatory authorities in Japan. Unless otherwise noted, amounts are rounded down and ratios are rounded off in the accompanying
financial statements. Totals shown in the accompanying financial statements do not necessarily agree with the sums of the individual amounts.

3. NET ASSETSThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Act. The entire amount of the issue price of
new units is designated as stated capital. The Investment Corporation is required to maintain net assets of at least ¥50,000 thousand as required by
the Investment Trust Act.

4. RESERVE FOR TEMPORARY DIFFERENCE ADJUSTMENTS
As of July 31, 2023
The following summarizes reserve for temporary difference adjustments.
Balance atReserve
Reversal
Balance at
Reason for reserve andInitial amountthe beginningduring theduring thethe end ofreversalof the period
periodperiodthe period(in thousands of yen)
Gain on negative
Appropriation for cash
¥2,000,000¥1,840,000¥ ¥20,000¥1,820,000
goodwill*
distributions* The Investment Corporation reserved part of gain on negative goodwill incurred in the 13th fiscal period as reserve for temporary difference
adjustments. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal period
starting from the next fiscal period after the fiscal period, in which the initial amount was reserved.
As of January 31, 2023
The following summarizes reserve for temporary difference adjustments.
Reversal
Reserve
Balance atduring theduring theInitial amountthe beginning
periodperiodof the period(in thousands of yen)

Balance atthe end of
the period

Reason for reserve andreversal

Gain on negative
Appropriation for cash
¥2,000,000¥1,860,000¥ ¥20,000¥1,840,000
goodwill*
distributions* The Investment Corporation reserved part of gain on negative goodwill incurred in the 13th fiscal period as reserve for temporary difference
adjustments. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal period
starting from the next fiscal period after the fiscal period, in which the initial amount was reserved.

5. COMMITMENT LINE CONTRACTS
KDR has commitment line contracts with the following financial institutions
As of July 31, 2023

As of January 31, 2023
(in thousands of yen)

Total amount of commitment line contracts¥4,500,000

Balance of loans payable outstanding
Remaining amount¥4,500,000--¥4,500,000¥4,500,000

6. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY
Rental and other operating revenues and property-related expenses for the periods from February 1, 2023 to July 31, 2023, and from August 1, 2022
to January 31, 2023 consist of the following:
From February 1, 2023
From August 1, 2022
to July 31, 2023
to January 31, 2023
(in thousands of yen)
A. Rental and other operating revenues:
Rental revenues¥8,972,830¥8,667,473

405,313396,649¥9,378,143¥9,064,123

Parking space rental revenues

221,908

218,133

Miscellaneous

482,963

349,853

Common area charges
Subtotal
Others:704,871567,986¥10,083,015¥9,632,109

Property management fees and facility management fees

¥529,327¥ 485,006

Utilities

131,876

142,779

Taxes

612,889

572,380

Repairs and maintenance

388,639

332,342

Insurance

16,01915,875

Trust fees

63,61362,198Depreciation

1,774,171

1,721,183

Others200,656

185,981¥3,717,195¥3,517,747¥6,365,819¥6,114,362

Subtotal
Total rental and other operating revenues
B. Property-related expenses:

Total property-related expenses
C. Net operating income from real estate rental business (A-B)
Gain on sales of real estate property:
From February 1, 2023 to July 31, 2023: Not applicable
From August 1, 2022 to January 31, 2023
(in thousands of yen)
KDX Residence Higashi-sakura II
Revenue from sale of real estate property¥1,180,000

Cost of real estate property

831,329

Other sales expenses

43,940Gain on sales of real estate property¥304,729

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

Total number of authorized investment units

From February 1, 2023
to July 31, 2023
10,000,000 units

From August 1, 2022
to January 31, 2023
10,000,000 units

1,070,433 units

1,070,433 units

Total number of investment units issued and outstanding

8. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of July 31, 2023 and January 31, 2023:
As of July 31, 2023

As of January 31, 2023

(in thousands of yen)
Cash and deposits¥13,203,144¥13,949,810

Cash and deposits in trust

11,057,971

11,589,952

Cash and cash equivalents¥24,261,115¥25,539,762

9. LEASES
The Investment Corporation, as lessee, has entered into Fixed-term lease contract whereby fixed monthly rents are due in advance. The future
minimum rental expenses under existing non-cancelable operating leases as of July 31, 2023 and January 31, 2023 are as follows:
As of July 31, 2023

As of January 31, 2023

(in thousands of yen)Due in 1 year

¥12,000¥12,000

Due after 1 year

503,000

509,000

Total¥515,000¥521,000

The Investment Corporation, as lessor, has entered into leases whereby fixed monthly rents are due in advance with a lease term of generally
two years for residential properties. The future minimum rental revenues under existing non-cancelable operating leases as of July 31, 2023 andJanuary 31, 2023 are as follows:
As of July 31, 2023

As of January 31, 2023

(in thousands of yen)Due in 1 year

¥4,696,153¥4,581,500

Due after 1 year

21,502,417

22,618,705

Total¥26,198,570¥27,200,205

10. FINANCIAL INSTRUMENTS(A). Overview(1) Policy for financial instruments
The Investment Corporation procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans fromfinancial institutions, issuance of investment corporation bonds, issuance of investment units and other means. With regard to the procurement ofinterest-bearing debts, the Investment Corporation 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. The Investment
Corporation uses derivatives for the purpose of hedging its exposure to changes in interest rates and other risks and does not enter into derivativetransactions for speculative or trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing the Investment Corporation’s surplus funds and are exposed to credit risk such as the bankruptcy of financial

institutions at which funds are deposited. Investment securities represent equity investments in an anonymous association and are exposed tocredit risk of the issuer, risk of fluctuation of value of its property and interest rate fluctuation risk.
Borrowings and investment corporation bonds 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 8 years and 4 months for borrowings and also have a redemption
date of a maximum of 7 years and 10 months for investment corporation bonds as of July 31, 2023, the end of the 23rd fiscal period, are exposed
to liquidity risk where alternative funds may not be procured by the repayment date. Also, borrowings with floating interest rates are exposed tointerest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk for a certain portion of the borrowings.
(3) Risk management for financial instruments
a. 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. Investment
securities represent equity investments in an anonymous association and are exposed to credit risk of the issuer and interest rate fluctuation risk.
To manage this credit risk, the Investment Corporation regularly evaluates the results of operations and the financial condition of the issuer, etc. In
utilizing derivatives, the Investment Corporation aims to mitigate counterparty risk such as by transacting with 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 ofborrowings 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 is established with regard to the execution and management of derivatives, and suchtransactions are entered into based on this policy.
c.

Liquidity risk

Though borrowings are subject to liquidity risk, the Investment Corporation 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.
(4) Supplementary explanation of the estimated fair value of financial instruments
Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in a different fairvalue.
(B). Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet and estimated fair value are shown in the following table. Disclosure of cash anddeposits , cash and deposits in trust and Short-term loans payable are omitted because the book value of these assets is deemed a reasonableapproximation of the fair value as they are cash or with short maturities.
As of July 31, 2023
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1) Current portion of investment corporation bonds¥1,000,000¥1,000,100¥ 100(2) Current portion of long-term loans payable

20,350,000

20,343,831(6,168)(3) Investment corporation bonds(4) Long-term loans payable
Subtotal

6,700,000

6,572,430(127,570)

135,870,000

135,380,740(489,259)

163,920,000

163,297,102(622,897)

Derivative transactions*¥779,904¥779,904¥* Figures indicate net amount of derivative assets/liabilities derived from derivative transactions, with minus representing net liabilities.

-

As of January 31, 2023
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1) Current portion of investment corporation bonds¥1,000,000¥999,900(2) Current portion of long-term loans payable

18,100,000

18,106,039

6,039(3) Investment corporation bonds

6,700,000

6,530,860(169,140)¥ (100)(4) Long-term loans payable
Subtotal

130,170,000

129,736,042(433,957)

155,970,000

155,372,842(597,157)

Derivative transactions*¥1,508,184¥1,508,184¥* Figures indicate net amount of derivative assets/liabilities derived from derivative transactions, with minus representing net liabilities.

-

Note 1: Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions.
Liabilities(1) Current portion of long-term loans payable and (3) 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 ofprincipal and interest discounted by the estimated interest rate to be applied in the event that the Investment Corporation conducts new borrowingsof 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 arereflected in the short term and the fair value is believed to approximate the carrying amount as the credit standing of the Investment Corporation has
not changed significantly since the loans were made. (However, the fair value of long-term loans payable subject to the special treatment for interestrate 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 the Investment Corporation conducts new borrowings of the same type.)(2) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices.
Derivative transactions
Please refer to Note 12 “DERIVATIVE TRANSACTIONS”.
Note 2: Redemption schedule for loans payable and investment corporation bonds
As of July 31, 2023
Due in 1 year or
less
Investment
corporation bonds
Long-term loans
payableTotal

Due after 1 year
through 2 years¥ 1,000,000¥

Due after 2 years
Due after 3 years
through 3 years
through 4 years(in thousands of yen)
-

¥

-

¥

Due after 4 years
through 5 years

1,000,000¥

Due after 5 years-¥

5,700,000

20,350,000

22,650,000

28,400,000

24,800,000

29,000,000

31,020,000¥21,350,000¥22,650,000¥28,400,000¥25,800,000¥29,000,000¥36,720,000

Due in 1 year or
less

Due after 1 year
through 2 years

Due after 2 years
Due after 3 years
through 3 years
through 4 years(in thousands of yen)

Due after 4 years
through 5 years

Due after 5 years

1,000,000¥ -¥5,700,000

As of January 31, 2023

Investment
corporation bonds
Long-term loans
payableTotal¥ 1,000,000

¥

-

¥

-

¥

18,100,000

18,400,000

24,300,000

25,000,000

24,400,000

38,070,000¥19,100,000¥18,400,000¥24,300,000¥26,000,000¥24,400,000¥43,770,000

11. REVENUE RECOGNITION
1. Information on the breakdown of revenue from contracts with customers
23rd Fiscal Period (February 1, 2023 to July 31, 2023)
Revenue from contracts with customers*
Revenue from sale of real estate, etc.

Net sales to external customers－ thousand yen－ thousand yen

66,183 thousand yen

66,183 thousand yen

Other－ thousand yen

10,016,831 thousand yen

Total

66,183 thousand yen

10,083,015 thousand yen

Utility charge reimbursement

* The rental revenues, etc. subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13) and the sale of realestate, etc. subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real Estate Using Special Purpose
Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified Public Accountants) are not includedin the above amounts as they are excluded from revenue recognition accounting standards. Moreover, the main revenue fromcontracts with customers are revenue from sale of real estate, etc. and utility charge reimbursement.
22nd Fiscal Period (August 1, 2022 to January 31, 2023)
Revenue from contracts with customers *1
Revenue from sale of real estate, etc.
Utility charge reimbursement

Net sales to external customers

1,180,000 thousand yen*2

304,729 thousand yen

54,984 thousand yen

54,984 thousand yen

Other－ thousand yen

9,577,125 thousand yen

Total

1,234,984 thousand yen

9,936,839 thousand yen*1 The rental revenues, etc. subject to the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13) and the sale of realestate, etc. subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real Estate Using Special Purpose
Companies” (Accounting System Committee Report No. 15 of the Japanese Institute of Certified Public Accountants) are not includedin the above amounts as they are excluded from revenue recognition accounting standards. Moreover, the main revenue fromcontracts with customers are revenue from sale of real estate, etc. and utility charge reimbursement.
*2 As proceeds from sale of real estate property are recorded as gain on sale of real estate property in the statements of income andretained earnings, the amount calculated by deducting the cost of real estate property sales and other sales expenses from proceedsfrom sale of real estate property is indicated.

2. Information utilized as the base for understanding revenue from contracts with customers
The information is as described in the notes on important accounting standards.
3. Information on relationship of fulfillment of performance obligations based on contracts with customers with cashflow generated from said
contracts and amount and period of revenue expected to be recognized in the next calculation period or thereafter from contracts withcustomers existing at the end of the current calculation period(1) Balance of contract assets and contract liabilities, etc.
23rd Fiscal Period(February 1, 2023 to July 31, 2023)

22nd Fiscal Period(August 1, 2022 to January 31,2023)

5,699 thousand yen

4,864 thousand yen

5,710 thousand yen

5,699 thousand yen--

Contract liabilities (balance at beginning of fiscal year)--

Contract liabilities (balance at end of fiscal year)--

Receivables from contracts with customers(balance at beginning of fiscal year)
Receivables from contracts with customers(balance at end of fiscal year)
Contract assets (balance at beginning of fiscal year)
Contract assets (balance at end of fiscal year)(2) Transaction value allocated to remaining performance obligations
Not applicableWith regard to utility charge reimbursements, as the Investment Corporation has the right to receive from customers an amountdirectly corresponding to the value for the lessees, or customers, of sections for which performance is complete by the end of the
fiscal period, the amount it has the right to claim is recognized as revenue in accordance with Paragraph 19 of the Implementation
Guidance on Accounting Standard for Revenue Recognition. Accordingly, such is not included in the note on transaction value
allocated to remaining performance obligations through application of the provisions of Paragraph 80-22 (2) of the AccountingStandard for Revenue Recognition.

12. DERIVATIVE TRANSACTIONS
The contract amount and the fair value of interest-rate swap transactions as of July 31, 2023 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable(2) Transactions subject to hedge accounting
Hedge
Type of derivative
Hedged items

Contract amount

Fair value

Calculation method foraccounting
methodtransactions(in thousands of yen)
Maturing afterTotal
1 year(in thousandsof yen)applicable fair value

Interest rate swap
Based on the amounttransaction:
Long-term¥94,820,000¥85,070,000¥779,904 provided by counterparty
Receive/floating and loans payablefinancial institutions
pay/fixed
Interest rate swap
Special treatment
transaction:
Long-term
for interest-rate
12,450,000
6,650,000*
Receive/floating and loans payable
swaps
pay/fixed
Total¥107,270,000¥91,720,000¥779,904*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
Accounting
method, inprinciple

is included in the fair value of the hedged long-term loans payable.
The contract amount and the fair value of interest-rate swap transactions as of January 31, 2023 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable(2) Transactions subject to hedge accounting
Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing afterTotal
1 yearFair value(in thousandsof yen)Calculation method for
applicable fair value

Interest rate swap
Based on the amounttransaction:
Long-term¥97,920,000¥88,520,000¥1,508,184 provided by counterparty
Receive/floating andloans payablefinancial institutions
pay/fixed
Interest rate swap
Special treatment
transaction:
Long-term
for interest-rate
13,950,000
8,650,000*
Receive/floating andloans payable
swaps
pay/fixed
Total¥111,870,000¥97,170,000¥1,508,184*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
Accounting
method, inprinciple

is included in the fair value of the hedged long-term loans payable.

13. RELATED-PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other23rd Fiscal Period (February 1, 2023 to July 31, 2023) and 22nd Fiscal Period (August 1, 2022 to January 31, 2023): Not applicable
2．Affiliated companies and other23rd Fiscal Period (February 1, 2023 to July 31, 2023) and 22nd Fiscal Period (August 1, 2022 to January 31, 2023): Not applicable
3．Fellow subsidiary companies and other23rd Fiscal Period (February 1, 2023 to July 31, 2023) and 22nd Fiscal Period (August 1, 2022 to January 31, 2023): Not applicable
4．Directors, major individual unitholders and other23rd Fiscal Period (February 1, 2023 to July 31, 2023) and 22nd Fiscal Period (August 1, 2022 to January 31, 2023): Not applicable

14. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 32%. However, the Investment
Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements under the Special Taxation
Measures Law of Japan are met, including a requirement that it currently distributes in excess of 90% of its net income for the fiscal period in order
to be able to deduct such amounts. If the Investment Corporation does not satisfy all of the requirements, the entire taxable income of theInvestment Corporation will be subject to regular corporate income taxes. Since the Investment Corporation distributed in excess of 90% of its
distributable income in the form of cash distributions totaling ¥4,556 million and ¥4,288 million for the periods ended July 31, 2023 and January 31,
2023, respectively, the distributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on theInvestment Corporation’s income were 0.01% for the periods ended July 31, 2023 and January 31, 2023. The following table summarizes thesignificant differences between the statutory tax rate and the effective tax rate.

From February 1, 2023
to July 31, 2023
31.46%

From August 1, 2022
to January 31, 2023
31.46%

Deductible cash distributions(31.20)(31.20)

Others(0.25)(0.25)

Effective tax rate

0.01%

0.01%

Statutory tax rate

The significant components of deferred tax assets and liabilities as of July 31, 2023 and January 31, 2023 are as follows:
As of July 31, 2023

As of January 31, 2023

(in thousands of yen)
Deferred tax assets:
Valuation difference on assets acquired by merger¥584,720¥597,846

Deferred gains or losses on hedges

8,425

317

Asset retirement obligations

21,652

21,593

Amortization of leasehold right in trust

4,522

3,979

Other

20

20

619,341

623,757

Valuation allowance(619,341)(623,757)

Total deferred tax assets

¥

-

¥

-

Net deferred tax assets

¥

-

¥

-

Subtotal deferred tax assets

15. ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations reported on balance sheets
1. Summary of the asset retirement obligations
The Investment corporation has recognized the original state restoration obligations assumed under the general fixed-term land leasehold agreement
as the asset retirement obligations in connection with Arute Ishiyagawa acquired on June 3, 2019.
2. Method of calculating asset retirement obligations
Asset retirement obligations are calculated based on a discount rate of 0.54711% and the useful life has been estimated to be 47 years and one
month based on the time period from the date of acquisition to the expiration of the agreement.
3. Changes in the amount of applicable asset retirement obligations consisted of the following
From February 1, 2023
From August 1, 2022
to July 31, 2023
to January 31, 2023
(in thousands of yen)
Balance at the beginning of period¥68,638

Accretion adjustment
Balance at the end of period¥68,451

187

187¥68,826¥68,638

16. INVESTMENT AND RENTAL PROPERTIESThe Investment Corporation owns real estate for rental purposes in the Tokyo Metropolitan Area and other regional areas for the purpose ofgenerating rental revenues.
The book value and fair value concerning the above real estate for rental purposes are as follows.
22nd Fiscal Period
23rd Fiscal Period
from February 1, 2023
from August 1, 2022
to July 31, 2023
to January 31, 2023
(in thousands of yen)Book value
Balance at the beginning of period
Changes during the period
Balance at the end of period
Fair value at the end of period¥298,843,455
3,200,428
302,043,884¥397,250,000¥288,832,748
10,010,707
298,843,455¥391,623,000

Note 1: Book value excludes accumulated depreciation from acquisition costs.
Note 2: Among changes in the amount of real estate for rental purposes that occurred during the 23rd fiscal period, the principal increase was theacquisition of real estate in 2 properties totaling ¥3,514,140 thousand, and the principal decrease was depreciation of ¥1,773,984 thousand
and during the 22nd fiscal period, the principal increase was the acquisition of real estate in 2 properties and real estate trust beneficiaryinterests in 6 properties totaling ¥11,712,656 thousand, and the principal decrease was the sales of real estate trust beneficiary interests in
1 property totaling ¥831,329 depreciation of ¥1,720,996 thousand.
Note 3: The fair value is the appraisal value or the survey value determined by outside appraisers.
Income and loss in the fiscal periods ended July 31, 2023 and January 31, 2023 for real estate for rental purposes is listed in Note 6 “BREAKDOWNOF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY”

17. SEGMENT AND RELATED INFORMATION
Segment and related information for the period ended from February 1, 2023 to July 31, 2023, and from August 1, 2022 to January 31, 2023 is asfollows:(A) Segment information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business, and it has no reportable segment
subject to disclosure.
(B) Related information(1) Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income and retained earnings.
(2) Information about each geographic area(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income
and retained earnings.
(b) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plantand equipment on the balance sheet.
(3) Information about each major customer
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement of income
and retained earnings.

18. PER UNIT INFORMATION
Net asset value per unit
Net income per unit
Weighted average number of units (units)

From February 1, 2023
to July 31, 2023
¥140,923

From August 1, 2022
to January 31, 2023
¥141,655¥4,205¥4,361

1,070,433

1,053,166

The weighted average number of units outstanding of 1,070,433 and 1,053,166 were used for the computation of the amount of net income perunit as of July 31, 2023 and January 31, 2023, respectively.
Net income per unit after adjusting for residual units is not included because there were no residual investment units.
The basis for calculating net income per unit is as follows:
From February 1, 2023
to July 31, 2023
¥4,501,392

From August 1, 2022
to January 31, 2023
¥4,593,229--

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

¥4,501,392¥4,593,229

Weighted average number of units during the period (units)

1,070,433

1,053,166

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

19. SIGNIFICANT SUBSEQUENT EVENTSThe Merger Among Kenedix Residential Next Investment Corporation (“KDR”), Kenedix Office Investment Corporation (“KDO”) and Kenedix Retail REIT Corporation(“KRR”)
KDR, KDO and KRR (collectively referred to as “Each REIT”) has, at Each REIT’s Board of Directors Meeting held on June 13, 2023, resolved to undertake anabsorption-type merger, with November 1, 2023 as the effective date, whereby KDO will be the surviving corporation and KDR and KRR will be the dissolving
corporations in the merger (the “Merger”), and have also executed a merger agreement (the “Merger Agreement”) on the same day. Moreover, the proposals wereapproved at Each REIT’s General Meeting of Unitholders held on August 21 and 22, 2023.
(a)

Purpose of the Merger

The Japanese economy is making a moderate recovery as movement restrictions to prevent the spread of COVID-19 infections was removed, and its economic andsocial activities are being normalized. However, there are uncertain factors in the economic conditions in and outside Japan such as changes in the global affairs,
emergence of geopolitical risks and effects of economic sanctions related to these risks as a result of the invasion of Ukraine by Russia, continuous global inflation
related to rising commodity prices and fuel costs, increase of the policy interest rates by major countries, and bankruptcies of overseas financial institutions. In suchenvironment, the current real estate investment trust securities market (the “J-REIT market”) is unstable and affected by the concern for rising operational costs due to
inflation and the fear for the rise in the long-term interest rates due to future changes of the monetary policies by the Bank of Japan. The asset management company
of Each REIT, Kenedix Real Estate Fund Management (“KFM”), was established as follows: Kenedix Residential Partners, Inc. established in March 2011 merged with
Kenedix Office Partners, Inc. and Kenedix Advisors, Inc. (both established in November 2003) in October 2013 in an absorption-type merger, and changed its corporatename to the current name of the asset management company. Each REIT has received sponsor support from Kenedix, Inc., the parent company of KFM, and its groupcompanies and has achieved operational results. Each REIT has implemented various measures to ensure the acquisition of stable profits and the continued growthof investment assets by leveraging each characteristic. However, the real estate market’s evaluations of the mid-sized office buildings, which are KDO’s main investment
target, have not changed because of their scarcity and liquidity. Thus, the capitalization rate remains low and it remains difficult to acquire mid-sized office buildings.
Moreover, recently, unit prices of KDO are significantly below NAV per unit due to the concern for the market outlook regarding secondary vacancies and rent decline
due to large supplies of large office buildings, and there are limited opportunities for external growth that involve public offering. Therefore, there are issues withensuring continued future growth. As for KDR, although KDR has conducted public offerings for five consecutive years, there is the possibility that the acquisitioncompetition may escalate and the acquisition opportunities may decrease due to the relatively stable profitability of residential properties, and recently unit price isbelow NAV per unit. Moreover, KDR’s LTV is relatively high in the J-REIT market, and KDR has concerns regarding the increase in costs when interest rates are rising.
As for KRR, although KRR has a rich real estate pipeline, it has been increasingly difficult to acquire shopping centers for daily needs since the COVID-19 pandemic.
In addition, there are concerns over increase in costs caused by inflation, and there are issues such as limited room for the future internal growth as a whole due tothe long-term fixed rents. Moreover, Each REIT is watching the trends of interest levels and price levels such as costs of utilities, which may have an impact on the
profitability of their portfolios in the future, and Each REIT recognizes this situation as their common issues. In such circumstances, Each REIT agreed to startnegotiation for merger and carefully deliberated on the issues in order to deal with the issues described above, respond flexibly to environmental changes and attaincontinued growth. As a result, Each REIT came to the same conclusion that the Merger will contribute to maximize unitholders’value by leading to the continued growthby expanding investment target sectors, improving their presence and stability in the market by increasing the sizes of their assets, and enabling more commitment forsustainability. Therefore, the Merger Agreement was made and entered into by and among Each REIT. Each REIT considers that the Merger has the following rationale:(ⅰ) Sustainable growth driven by expansion of investment universe
The New REIT (defined below) will continue to focus on their main investment target, i.e. mid-sized office buildings, residential properties, healthcare facilities, andshopping centers for daily needs, and it will start to additionally focus on logistics facilities and hotels, in which Each REIT has conducted only limited investments until
now, to increase opportunities for acquisitions. In addition, the Merger will enable asset reshuffling among different asset types, disposing of properties with lesscompetitiveness or profitability, allow flexibly to the changes of the external environment surrounding the real estate market, and activate the investments in theinvestment target sectors that are expected to grow, and thus leading to the improvement of portfolio profitability. As described above, the New REIT aims to attaincontinued growth beyond the boundary of the strategic management for the existing specialized REIT through a strategic management that ensures a wide range ofopportunities for acquisitions and flexibility related to the expansion of the investment target sectors.
(ⅱ) Improvement in the market presence and ability
Through the Merger, the asset size of the investment corporation after the Merger (the “New REIT”) will be ranked third in the J-REIT market(Note 1) and this will
significantly improve the presence in the market and liquidity of investment units, and the portfolio is expected to own a total of 350 (Note2) properties after the Merger.
Having the largest expected number of properties in the J-REIT market will enhance diversification and contribute to improve the stability of the portfolio. In addition, aproperty manager that leverages the advantage of its scale will contribute to increase resilience against the pressure of the rising costs.
(ⅲ) Further commitment to sustainability
Each REIT has recognized sustainability as a significant issue and has taken the initiative in implementing various initiatives. Specifically, KDO has become the firstinvestment corporation in the J-REIT market to participate in GRESB Real Estate Assessment, KDR was the first J-REIT to issue social bonds, and KRR was the first
J-REIT to introduce investment unit performance fee. The New REIT plans to integrate and elevate expertise accumulated by Each REIT through the Merger and aims
to be a leading company in the sustainability initiatives. Moreover, the New REIT plans to further enforce the sustainability initiatives under the management systemwith a high degree of specialization and diversity by introducing a new management fee structure that is linked to unitholder value and sustainability metric, improving
governance through the enhancement of supervisory officers, and promoting diversity.
(Note 1) The amount of asset size after the Merger is calculated by totaling the asset size of Each REIT. The asset size of KDO is assumed to be the total ofacquisition price of the properties in the portfolio as of April 30, 2023, plus the acquisition (scheduled) price reflecting the acquisitions and sales(including one that are scheduled) of the properties from May 1, 2023 to the effective date of the Merger. The asset size of KDR and KRR is considered
to be the appraisal values of the properties as of the end of the latest fiscal period (relating to KDR, as of January 31, 2023. The asset sizes of the otherinvestment corporations in the J-REIT market are calculated based on the asset sizes including any properties that the other investment corporations
announced the acquisition and sale thereof in the J-REIT market as of April 30, 2023 (acquisition (scheduled) price basis). Therefore, it is not guaranteedthat the New REIT after the Merger will have the third largest asset size in the J-REIT market as of the effective date of the Merger. In regard to the asset
size after the Merger, because it is planned that assets of KDR and KRR will be succeeded at market price based on the purchase method by KDO as
the acquiring corporation, the asset size will not be a simple sum of the total (scheduled) acquisition price of KDO and the total appraisal values of KDR
and KRR as of the end of the latest accounting period.
(Note 2) The number of properties of the portfolio after the Merger is based on the number of properties of KDO, KDR and KRR as of the date hereof and reflecting
the change in the number of the acquisitions and sales of the properties (including ones that are scheduled) by the effective date of the Merger. KDX
Chofu Building is treated as one property in the calculation of the number of properties of the portfolio after the Merger though KDO owns its office towerand KRR owns its retail wing respectively as of today. The numbers of the properties of the other investment corporations in the J-REIT market is
calculated based on the number of properties including those that the other investment corporations announced acquisition and sale thereof in the JREIT market as of April 30, 2023. Therefore, it is not guaranteed that the portfolio of the New REIT after the Merger will have the largest number ofproperties in the J-REIT market as of the effective date of the Merger.
（b）Form of the Merger
KDO will be the surviving corporation under an absorption-type merger and KDR and KRR will be dissolved in the Merger.
（c）Allocation of Investment Units under the Merger
KDO

KDR

KRR

（Surviving corporation in（Dissolving corporation in（Dissolving corporation in thethe absorption-type merger）

the absorption-type merger)

absorption-type merger)

1.34

1.68

1

（Reference）（Reference）

Before the Investment Unit Split 0.67

Before the Investment Unit Split 0.84

Allocation of
investment units under
the Merger(Note 1) The number of new KDO investment units to be issued as a result of the Merger (the number of units taking into account the Investment Unit Split ofKDO): 2,446,037(Note 2) KDO plans to split one investment unit into 2 investment units with October 31, 2023 as the record date for splitting the investment units and November 1,
2023 as the effective date of the split; the allocation ratio shown above and the number of the New Investment units KDO will allocate and deliver are
subject to the Investment Unit Split taking effect. If 0.67 KDO investment units are allocated and delivered against 1 KDR investment unit and 0.84 KDO
investment units are allocated and delivered against 1 KRR investment unit on the basis of the merger ratio before the Investment Unit Split, there will bemany unitholders of KDR and KRR being allocated fractions of less than one KDO investment unit. To make it possible for unitholders of KDR and KRR
to continue holding KDO investment units after the Merger, a split of KDO investment units will be carried out before the allocation towards unitholders of
KDR and KRR, in the ratio of two KDO investment units to one KDO investment unit for the purpose of delivering to all unitholders of KDR and KRR atleast one KDO investment unit, and 1.34 KDO investment unit post- investment unit split will be allocated and delivered for every one KDR investment
unit and 1.68 KDO investment unit post- Investment Unit Split will be allocated and delivered every one KRR investment unit.
（d）Distributions of Payment Upon the Merger
In addition to the above mentioned investment units, KDO intends to pay unitholders of KDR and KRR (the unitholders stated or recorded in the final unitholders’registers of KDR and KRR on the day before the effective date of the Merger (excluding Each REIT and unitholders of KDR and KRR who has demanded the purchaseof their investment units pursuant to Article 149-3 of the Act on Investment Trusts and Investment Corporations(excluding those who have withdrawn such demandfor purchase) (hereinafter referred to as the “Unitholders Subject to Allocation”)), in lieu of cash distributions (distributions of profits) for the last fiscal period of KDR
and KRR which ends the day before the effective date of the Merger, the Payment upon the Merger in the form of cash distributions based on distributable income of
KDR and KRR for that same period of an amount (disregarding fractions of a yen) which is the quotient resulting from a division of the amount of distributable incomeof KDR and KRR on the date before the effective date of the Merger by the number of issued investment units of KDR and KRR on that date as reduced by the numberof investment units held by unitholders other than the Unitholders Subject to Allocation. The Payment upon the Merger will be paid within a reasonable period from theeffective date of the Merger（e）Outline of the latest fiscal period of KDO and KRR
Outline of the latest fiscal period of KDO (Apr. 2023)
Business overview ：Invest in and manage real estate properties or trust beneficiary interest in real estate defined by the Article 149-3 of the Act on Investment Trusts
and Investment Corporations.
Operating Revenue ：17,290 mil yen
Net Income ：7,205 mil yen
Total Assets ：474,274 mil yen
Total liabilities ：243,791 mil yen
Net Assets ：230,482 mil yen
Outline of the latest fiscal period of KRR (Mar. 2023)
Business overview ：Invest in and manage real estate properties or trust beneficiary interest in real estate defined by the Article 149-3 of the Act on Investment Trustsand Investment Corporations
Operating Revenue ：9,924 mil yen
Net Income ：3,922 mil yen
Total Assets ：287,569 mil yen
Total liabilities ：145,002 mil yen
Net Assets ：142,566 mil yen（f）Timing of the Merger
The effective date of the Merger 1 November 2023（Scheduled）

20. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASEETS
Property, plant and equipment consist of the following as of July 31, 2023:
Type of asset

Balance atthebeginning of
periodIncreaseduring theperiodBuildings¥447,056¥875,691

10,306

21,29910,34235,086

1,804,624
2,272,330
125,940,957
1,568,935

2,593,204
3,525,282
1,331,753
5,266

1,600,108

59,066

Property,plant andequipment

Intangible
assets

Structures
Tools, furnitureand fixtures
Land
Sub total
Buildings in trust
Structures in trust
Machinery andequipment in trust
Tools, furnitureand fixtures in trust
Land in trust
Sub total
Total
Leasehold right in
trust
Other
Total

Decreaseduring theperiod¥-Depreciation
Depreciation
Accumulated
for thedepreciation
period(in thousands of yen)
¥1,322,747¥22,036¥16,074

Balance atthe end of
period--Remarks¥1,300,710

Notes 1

31,606992

699

30,61345,429

1,683

1,253

43,746

4,397,829
5,797,612
127,272,710
1,574,202

24,712
21,938,495
469,601

18,026
1,634,717
40,242

4,397,829
5,772,899
105,334,215
1,104,601

1,659,175

588,71435,969

1,070,460

-

-

Net
balance at
end of theperiod

1,405,598

51,774

1,457,373

292,71343,303

1,164,659

185,748,052
316,263,652
318,535,982

1,268
1,449,130
4,974,412-

185,749,321
317,712,783
323,510,395

23,289,525
23,314,238

1,754,232
1,772,259

185,749,321
294,423,257
300,196,157

1,862,101--

1,862,101

14,374

1,724

1,847,727-

7,762¥1,869,864

7,762¥22,137129¥1,854¥1,847,727

7,762¥1,869,864

-

¥

¥

Notes 1

Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
Property, plant and equipment consist of the following as of January 31, 2023:
Type of asset

Buildings

Property,plant andequipment

Intangible
assets

Structures
Tools, furnitureand fixtures
Land
Sub total
Buildings in trust
Structures in trust
Machinery andequipment in trust
Tools, furnitureand fixtures in trust
Land in trust
Sub total
Total
Leasehold right in
trust
Other
Total

Balance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiod¥-¥ 447,056¥-

10,306-

Depreciation
Depreciation
Accumulated
for thedepreciation
period(in thousands of yen)
¥447,056¥ 5,962¥ 5,962

Balance atthe end of
period-Netbalance at
end of theperiodRemarks¥441,093

Notes 1

10,306292

292

10,013

10,342

430

430

9,912

-

10,342

173,018
173,018
122,148,745
1,465,983

1,631,605
2,099,311
4,382,204
105,806

589,991
2,854

1,804,624
2,272,330
125,940,957
1,568,935

6,685
20,303,778
429,359

6,685
1,599,648
38,8701,804,624
Notes 12,265,644
105,637,178 Notes 1 and 2
1,139,576 Notes 1 and 2

1,574,807

35,1289,827

1,600,108552,744

35,376

1,047,363 Notes 1 and 2

1,239,572

170,733

4,706

1,405,598

249,410

38,6901,156,188 Notes 1 and 2

180,334,732
306,763,840
306,936,859

5,769,849
10,463,721
12,563,033

356,529
963,909
963,909

185,748,052
316,263,652
318,535,982

21,535,293
21,541,978

1,712,585
1,719,271

185,748,052 Notes 1 and 2
294,728,359
296,994,003

1,862,101--

1,862,101

12,6491,724

1,849,451-

7,762¥1,869,864

7,633¥20,282776¥2,501129¥1,849,581

7,762¥1,869,864

¥

-

-

¥

Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
Note2: The amount of decrease during the period is primarily attributable to the sales of the real estate property.

21. INVESTMENT CORPORATION BONDS
Outstanding Investment corporation bonds as of July 31, 2023 are as follows.
SeriesDate of issue

Second series of unsecured investment
corporation bonds(Note 1)
Third series of unsecured investment
corporation bonds (Note 1)

August 30,
2016
August 30,
2016

Balance at theDecrease
Balance at
beginning ofduring thethe end of
periodperiodperiod(in thousands of yen)Interest
rate

Repayment date

1,000,000-

1,000,000

0.540%

August 28,2026

1,000,000-

1,000,000

0.800%

August 30,2028

Use

Remarks(Note2)

UnsecuredBalance at theDecrease
Balance at
beginning ofduring thethe end of
periodperiodperiod(in thousands of yen)

SeriesDate of issue

Fourth series of unsecured investment
corporation bonds (Note 1)
Fifth series of unsecured investment
corporation bonds (Note 1)
Sixth series of unsecured investment
corporation bonds(Social bond) (Note 1)
Seventh series of unsecured investment
corporation bonds(Social bond) (Note 1)

November 30,
2018
November 30,
2018
December 20,
2019
May 31,
2021

Total

Interest
rate

1,000,000-

1,000,000

0.410%

1,000,000-

1,000,000

0.850%

2,000,000-

2,000,000

0.750%

1,700,000-

1,700,000

0.720%-¥ 7,700,000¥7,700,000¥

Repayment dateNovember
30,2023
November
30,2028
December
20,2029
May 30, 2031

Use

Remarks(Note3)

Unsecured(Note4)

Unsecured

Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate andrepayment of debts.
Note 3: Investment corporation bonds were used as the funds for repayment of borrowings procured for the purpose of appropriating funds for theacquisition of social eligible assets.
Note 4: Investment corporation bonds were used as the funds for the acquisition of social eligible assets.
Note 5: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year
or less
Investment
corporation bonds¥

Due after 1 year
through 2 years

1,000,000¥

Due after 2 years
through 3 years(in thousands of yen)-¥

Due after 3 years
through 4 years-¥

Due after 4 years
through 5 years

1,000,000¥-

Outstanding Investment corporation bonds as of January 31, 2023 are as follows.
Balance at theDecrease
Balance at
beginning ofduring thethe end of
periodperiodperiod(in thousands of yen)

SeriesDate of issue

Second series of unsecured investment
corporation bonds(Note 1)
Third series of unsecured investment
corporation bonds (Note 1)
Fourth series of unsecured investment
corporation bonds (Note 1)
Fifth series of unsecured investment
corporation bonds (Note 1)
Sixth series of unsecured investment
corporation bonds(Social bond) (Note 1)
Seventh series of unsecured investment
corporation bonds(Social bond) (Note 1)

August 30,
2016
August 30,
2016
November 30,
2018
November 30,
2018
December 20,
2019
May 31,
2021

Total

Interest
rate

Repayment
date

1,000,000-

1,000,000

0.540%

August 28,2026

1,000,000-

1,000,000

0.800%

August 30,2028

1,000,000-

1,000,000

0.410%

1,000,000-

1,000,000

0.850%

2,000,000-

2,000,000

0.750%

1,700,000-

1,700,000

0.720%-¥ 7,700,000¥7,700,000¥

November
30,2023
November
30,2028
December
20,2029
May 30, 2031

Use

Remarks(Note2)

Unsecured(Note3)

Unsecured(Note4)

Unsecured

Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate and repayment ofdebts.
Note 3: Investment corporation bonds were used as the funds for repayment of borrowings procured for the purpose of appropriating funds for theacquisition of social eligible assets.
Note 4: Investment corporation bonds were used as the funds for the acquisition of social eligible assets.
Note 5: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year
or less
Investment
corporation bonds¥

1,000,000

Due after 1 year
through 2 years¥

Due after 2 years
through 3 years(in thousands of yen)-¥-

Due after 3 years
through 4 years¥1,000,000

Due after 4 years
through 5 years¥-22. SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt and long-term debt consist of the following as of July 31, 2023
Classification
LenderShortterm
loans
payableCurrent
portionof longterm
loans
payableMizuho Bank, Ltd.(Note 8)
Sumitomo Mitsui Banking
Corporation(Note 8)
Sumitomo Mitsui Banking
Corporation(Note 8)
Mizuho Bank, Ltd.(Note 8)
Sumitomo Mitsui Banking
Corporation(Note 8)
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.(Note 8)
Mizuho Bank, Ltd.(Note 9)
Sub total
Resona Bank, Limited
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
SBI Shinsei Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Aozora Bank, Ltd.
Development Bank of JapanInc.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Banking
Corporation
Aozora Bank, Ltd.
MUFG Bank, Ltd.
The Bank of Fukuoka, Ltd.

Balance at the
beginning of
period2,000,000
900,000

Increaseduring theperiodDecreaseduring theperiodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)-0.302%March 31, 2023-

0.302%

April 30, 2023

Balance atthe end of
period(in thousands of yen)
2,000,000-

900,000

1,200,000-

1,200,000-

0.302%

June 30, 2023

300,000-

300,000

0.302%

June 30, 2023

900,000-

900,000-

0.302%

July 31, 2023

800,000--

800,000

0.303%

August 31, 2023

1,200,000--

1,200,000

0.303%

August 31, 2023

950,000
8,250,000
1,500,000

1,200,000
1,200,000-

950,000
1,200,000
7,450,000
1,500,000

2,000,000-

0.302%
0.304%

November 30, 2023
March 29, 2024

0.987%

April 30, 2023

0.501%

February 28, 2023

0.299%
0.325%

July 31, 2023
April 30, 2023

0.329%

July 31, 2023

1,500,000-

1,500,000-

1,500,000
800,000
500,000
500,000-

1,500,000
800,000
500,000
500,000-

300,000-

300,000-

300,000-

300,000-

200,000
500,000-

200,000
500,000-

0.279%

February 28, 2023

200,000-

200,000-

0.229%

February 28, 2023

400,000--

400,000

400,000
300,000
200,000--

400,000
300,000
200,000

1.254%

August 7, 2023

200,000--

200,000

150,000--

150,000

500,000--

500,000

1,200,000--

1,200,000

1.320%(Note 5)
1.105%

January 31, 2024

950,000--

950,000

1.047%

August 31, 2023

1,200,000--

1,200,000

0.592%

August 31, 2023

1,000,000
800,000
800,000--

1,000,000
800,000
800,000

August 31, 2023
August 31, 2023
November 30, 2023

MUFG Bank, Ltd.

1,000,000--

1,000,000

MUFG Bank, Ltd.

300,000--

300,000

MUFG Bank, Ltd.

900,000--

900,000

MUFG Bank, Ltd.(Note 2)

2,000,000--

2,000,000

0.592%
0.592%
0.230%
0.225%(Note 5)0.225%(Note 5)0.225%(Note 5)1.100%

1,500,000--

1,500,000

0.582%

February 29, 2024

1,000,000--

1,000,000

0.582%

February 29, 2024

1,000,000--

1,000,000

0.582%

February 29, 2024

450,000--

450,000

0.336%

April 30, 2024

500,000--

500,000

0.259%

February 29, 2024

500,000--

500,000

0.259%

February 29, 2024

Aozora Bank, Ltd.
(Note 2)
Sumitomo Mitsui Banking
Corporation(Note 2)
MUFG Bank, Ltd.(Note 2)
Resona Bank, Limited(Note2)
Mizuho Bank, Ltd.(Note 2)
Sumitomo Mitsui Trust Bank,
Limited(Note 2)

Use

Remarks

Unsecured/(Note 6) Unguaranteed

August 7, 2023

October 31, 2023
November 30, 2023
January 31, 2024
April 30, 2024

Unsecured/(Note 6) UnguaranteedClassification
LenderBalance at the
beginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)Use

Remarks(in thousands of yen)
Current
portionof longterm
loans
payableMUFG Bank, Ltd.(Note 2)

600,000--

600,000

0.300%(Note 5)February 29, 2024

SBI Shinsei Bank, Limited(Note 2)

1,000,000--

1,000,000

0.252%

July 31, 2024

MUFG Bank, Ltd.(Note 2)

500,000--

500,000

500,000

MUFG Bank, Ltd.(Note 9)-500,000

Resona Bank, Limited-

1,000,000

Sub total
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
MUFG Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

Longtermloanspayable-0.225%(Note 5)0.301%

1,000,000

0.251%

1,500,000

8,300,000

20,350,000

1,000,000--

1,000,000

1.265%

April 30, 2025

1,700,000
950,000--

1,700,000
950,000

1.169%
1.169%

August 31, 2024
August 31, 2024

2,000,000--

2,000,000

1.345%

August 31, 2025

1,000,000--

1,000,000

1,000,000
1,000,000--

1,000,000
1,000,000

1.193%(Note 5)
1.156%
0.819%

2,500,000--

2,500,000

0.903%

1,000,000--

1,000,000

Mizuho Bank, Ltd.

1,500,000--

1,500,000

Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

1,000,000--

1,000,000

1,000,000--

1,000,000

500,000--

500,000

MUFG Bank, Ltd.

2,000,000--

2,000,000

500,000--

500,000

3,000,000--

1,000,000-

1,000,000-

0.660%(Note 5)0.816%(Note 5)0.713%

August 31, 2024
April 27, 2025
April 28, 2025
April 30, 2026
July 31, 2025
August 31, 2026
August 31, 2024

0.797%

August 31, 2025

0.670%(Note 5)0.751%(Note 5)

August 31, 2025

3,000,000

0.906%

August 31, 2026-

1,000,000

0.773%(Note 5)October 31, 2025-

1,000,000
0.900%

August 22, 2027

1,000,000--

1,000,000

1,000,000--

1,000,000

1,200,000--

1,200,000

1,000,000--

1,000,000

500,000
500,000
500,000--

500,000
500,000
500,000

500,000--

500,000

1,500,000--

1,500,000

1,000,000--

1,000,000

1,000,000--

1,000,000

500,000--

500,000

1,500,000--

1,500,000

1,400,000
900,000--

1,400,000
900,000

500,000--

500,000

500,000--

500,000

400,000
400,000--

400,000
400,000

400,000--

400,000

400,000--

400,000(Note 6) Unguaranteed

April 30, 2024

27,150,000

MUFG Bank, Ltd.

Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan
Inc.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
SBI Shinsei Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Development Bank of JapanInc.
Mizuho Bank, Ltd.
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Nippon Life Insurance
Company
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Development Bank of JapanInc.
Nippon Life Insurance
Company
Resona Bank, Limited
SBI Shinsei Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.

Unsecured/

February 29, 2024

Unsecured/(Note 6) Unguaranteed

0.928%(Note 5)0.624%
0.661%(Note 5)

August 22, 2027

August 31, 2024
August 31, 2024

0.665%

February 28, 2025

0.749%

February 28, 2026

0.900%(Note 5)January 30, 2027

0.799%

February 2, 2026

Classification
LenderAozora Bank, Ltd.
The Bank of Fukuoka, Ltd.
Sumitomo Mitsui Banking
Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Mizuho Bank, Ltd.
Development Bank of JapanInc.
MUFG Bank, Ltd.
Nippon Life Insurance
Company
SBI Shinsei Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Mizuho Trust & Banking
Co., Ltd.

LongtermloanspayableBalance at the
beginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
period300,000
300,000(in thousands of yen)--

300,000
300,000

1,050,000--

1,050,000

500,000--

500,000

500,000--

500,000

500,000--

500,000

250,000--

250,000

1,400,000--

1,400,000

800,000--

800,000

700,000--

700,000

1,000,000--

1,000,000

800,000--

800,000

500,000--

500,000

400,000--

400,000

Mizuho Bank, Ltd.

2,000,000--

2,000,000

SBI Shinsei Bank, Limited
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
The Bank of Fukuoka, Ltd.

500,000--

1,000,000-

1,500,000
500,000
500,000
500,000

Averageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)0.914%

February 28, 2027

0.884%(Note 5)0.825%(Note 5)0.920%(Note 5)September 30, 2026

September 30, 2028

0.363%

November 30, 2024

500,000

0.330%(Note 5)0.484%

November 30, 2025-

1,000,000

0.572%

August 31, 2026--

1,500,000

0.600%

November 30, 2026--

500,000

0.464%--

500,000
500,000--

500,000

400,000--

400,000

MUFG Bank, Ltd.

400,000--

400,000

Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
SBI Shinsei Bank, Limited
Development Bank of JapanInc.
Sumitomo Mitsui Banking
Corporation
SBI Shinsei Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking
Co., Ltd.
MUFG Bank, Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.

200,000--

200,000

1,000,000--

1,000,000

800,000--

800,000

500,000--

1,750,000-

1,750,000
1,000,000
500,000
500,000-

500,000
1,000,000

Remarks

February 28, 2027

1.031%

500,000

Use

May 31, 2025

February 28, 2027
0.414%
Unsecured/(Note 6) Unguaranteed

0.450%(Note 5)0.531%

February 29, 2028

0.646%

June 30, 2028

500,000

0.616%(Note 5)June 30, 2028-

1,750,000

0.691%-

1,750,000
1,000,000
500,000
500,000--

500,000--

1,000,000

0.686%

July 31, 2028

February 28, 2027

July 31, 2028
0.641%

800,000--

800,000

0.637%

July 31, 2028

500,000
300,000--

500,000
300,000

0.640%
0.690%

August 31, 2028

840,000--

840,000

0.648%

September 30, 2028

900,000--

900,000

800,000
1,330,000
500,000--

800,000
1,330,000
500,000

0.558%

400,000--

400,000

0.608%MUFG Bank, Ltd.

800,000--

800,000

MUFG Bank, Ltd.
Mizuho Bank, Ltd.

300,000
500,000--

300,000
500,000

0.658%
September 30, 2028

0.550%(Note 5)0.637%
0.478%

September 30, 2028
October 31, 2027
April 30, 2025

Classification
LenderBalance at the
beginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Aozora Bank, Ltd.

--

1,000,000

0.585%

October 31, 2027

2,000,000--

2,000,000

0.617%

November 30, 2027

1,000,000
1,200,000--

1,000,000
1,200,000

0.599%
0.409%

January 31, 2028

1,100,000--

1,100,000

0.359%

1,350,000--

1,350,000

January 31, 2027

January 31, 2025

Daishi Hokuetsu Bank, Ltd.

500,000--

500,000

The Bank of Yokohama, Ltd.
Sumitomo Mitsui Banking
Corporation

1,000,000--

1,000,000

0.677%
0.350%(Note 5)0.467%

1,400,000--

1,400,000

0.598%

January 31, 2030

0.575%(Note 5)0.700%(Note 5)January 31, 2030

0.358%

February 28, 2027

0.533%
0.433%

February 28, 2029

0.585%

February 28, 2030

MUFG Bank, Ltd.

March 31, 2029
July 31, 2029

1,000,000--

1,000,000

1,000,000--

1,000,000

800,000
500,000
500,000
350,000
300,000--

800,000
500,000
500,000
350,000
300,000

1,200,000--

1,200,000

MUFG Bank, Ltd.

1,200,000--

1,200,000

Development Bank of JapanInc.

1,000,000--

1,000,000

Aozora Bank, Ltd.

500,000--

500,000

0.540%

February 28, 2029
February 28, 2029

Nippon Life Insurance
Company
The Yamaguchi Bank, Ltd.
The Chugoku Bank, Ltd.
The 77 Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Banking
Corporation

MUFG Bank, Ltd.
Longtermloanspayable1,000,000

Sumitomo Mitsui Banking
Corporation
The Chiba Bank, Ltd.
The Musashino Bank, Ltd.
The Hyakugo Bank, Ltd.
THE HACHIJUNI BANK,LTD.
The Shizuoka Bank, Ltd.
Aozora Bank, Ltd.
THE NISHI-NIPPON CITY
BANK, LTD.
The Yamanashi Chuo Bank,Ltd.
The Yamaguchi Bank, Ltd.
The Bank of Yokohama, Ltd.
Kansai Mirai Bank, Limited
The Bank of Kyoto, Ltd.
Sumitomo Mitsui Banking
Corporation
Shinkin Central Bank
The Keiyo Bank, Ltd.
Aozora Bank, Ltd.

0.575%(Note 5)0.638%(Note 5)February 28, 2030
August 31, 2031

600,000--

600,000

0.525%(Note 5)600,000--

600,000

0.602%

February 28, 2030

600,000
500,000
500,000--

600,000
500,000
500,000

0.325%(Note 5)

November 30, 2026

500,000--

500,000

0.314%

November 30, 2025

200,000--

200,000

1,000,000--

1,000,000

0.529%(Note 5)

May 31, 2029

500,000--

500,000
0.561%

November 30, 2029

500,000--

500,000

1,000,000
700,000
500,000
300,000--

1,000,000
700,000
500,000
300,000

0.631%

November 30, 2030

0.703%

November 30, 2031-

4,000,000

0.447%

April 30, 2025--

1,500,000
500,000
1,000,000

0.466%
0.509%
0.354%
0.350%(Note 5)0.632%
0.681%
0.610%(Note 5)October 31, 2025
October 31, 2026
October 31, 2024

0.425%

May 31, 2026

4,000,000
1,500,000
500,000
1,000,000

Daishi Hokuetsu Bank, Ltd.

500,000--

500,000

Aozora Bank, Ltd.
Aozora Bank, Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.

1,500,000
1,000,000--

1,500,000
1,000,000

500,000--

500,000

300,000--

300,000

300,000--

300,000

Sompo Japan Insurance Inc.

1,000,000--

1,000,000

SBI Shinsei Bank, Limited
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.

1,100,000
1,100,000--

1,100,000
1,100,000

0.380%(Note 5)0.550%
0.422%

700,000

0.549%

700,000

April 30, 2027
October 31, 2027
April 30, 2028
March 31, 2029

August 31, 2025
July 31, 2027
August 31, 2025
February 28, 2027

Classification
LenderBalance at the
beginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)Use

Remarks(in thousands of yen)LongtermloanspayableDevelopment Bank of JapanInc.

1,600,000--

1,600,000

The Norinchukin Bank

1,300,000--

1,300,000

The 77 Bank, Ltd.

800,000--

800,000

Daishi Hokuetsu Bank, Ltd.

500,000--

500,000

SBI Shinsei Bank, Limited

500,000--

500,000

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
The Yamaguchi Bank, Ltd.
The Chiba Bank, Ltd.
THE HACHIJUNI BANK, LTD.
The Yamanashi Chuo Bank,Ltd.
The Chugoku Bank, Ltd.
THE NISHI-NIPPON CITY
BANK, LTD.
Kansai Mirai Bank, Limited
The Bank of Kyoto, Ltd.

-MUFG Bank, Ltd.
The Bank of Fukuoka, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
MUFG Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
The Bank of Fukuoka, Ltd.

-

400,000-

400,000
350,000-

Sub total
Total

400,000
400,000

500,000
500,000

600,000
400,000
500,000
800,000-

300,000
200,000

121,120,000¥156,520,000

14,750,000¥17,450,000

400,000-

300,000-

500,000

1,000,000--¥15,750,000

August 31, 2029
November 30, 2026
January 31, 2027
January 31, 2027
January 31, 2028

0.300%

August 31, 2025

1.008%

February 29, 2028

0.888%
0.888%

February 28, 2029
February 28, 2029

0.888%(Note 5)February 28, 2029 (Note 6) Unguaranteed

1,500,000
1,000,000
500,000
400,000
400,000-

200,000

1,500,000--

1,700,000-

SBI Shinsei Bank, Limited-

1,000,000
1,000,000
500,000
400,000
400,000-

SBI Shinsei Bank, Limited

1,500,000---

1,500,000

0.711%(Note 5)0.556%(Note 5)0.666%(Note 5)0.666%(Note 5)0.790%(Note 5)400,000
400,000

Unsecured/

400,000
350,000
500,000
500,000

0.841%(Note 5)0.175%
0.798%

February 28, 2025
October 31, 2028

200,000

0.245%

July 31, 2026

1,700,000

February 29, 2028

400,000
500,000
800,000

0.538%(Note 5)0.645%(Note 5)0.245%

300,000

0.245%

July 31, 2026

300,000

0.245%

July 31, 2026

200,000

0.195%
0.720%(Note 5)600,000

500,000

January 31, 2028
July 31, 2028
July 31, 2025

July 31, 2026
July 31, 2029

135,870,000¥158,220,000

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

Due after 2 years

Due after 3 years

Due after 4 years

through 2 years

through 3 years

through 4 years

through 5 years¥ 22,650,000¥ 28,400,000

Due after 5 years(in thousands of yen)
Long-term loans payable¥ 24,800,000¥ 29,000,000¥ 31,020,000

Note 2: Borrowings listed in the current portion of long-term loans payable were listed in long-term loans payable in the previous fiscal period.
Note 3: All debts except for the following Note 5 are borrowing at a floating rate.
Note 4: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions were implemented in order to hedge the interest rate volatility risk, theweighted average interest rates taking into consideration the effects of the interest rate swaps are indicated.
Note 5: Borrowings is applied at a fixed rate.
Note 6: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 7: All the repayment methods of debt financing are lump-sum repayments on the due date.
Note 8: Early repayment was made on February 28, 2023.
Note 9: Early repayment was made on July 31, 2023.

Short-term debt and long-term debt consist of the following as of January 31, 2023
Classification
Increaseduring theperiodDecreaseduring theperiodBalance at theend of period

Averageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)

LenderBalance at the
beginning of
periodMizuho Bank, Ltd.

2,000,000--

2,000,000

0.317%March 31, 2023

900,000--

900,000

0.317%

April 30, 2023

Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)

Shortterm
loans
payableSumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.

Current
portionof longterm
loans
payableSub total
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Development Bank ofJapan Inc.
SBI Shinsei Bank, Limited(Note 8)Resona Bank, Limited
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
SBI Shinsei Bank, Limited(Note 8)Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
The Bank of Fukuoka,Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation (Note 2)
MUFG Bank, Ltd.
(Note 2)
Mizuho Bank, Ltd.
(Note 2)
Resona Bank, Limited(Note 2)
Mizuho Trust & Banking
Co., Ltd. (Note 2)
Aozora Bank, Ltd.
(Note 2)Development Bank ofJapan Inc. (Note 2)

1,200,000--

1,200,000

0.317%

June 30, 2023

300,000---

300,000

0.317%

June 30, 2023

900,000

900,000

0.314%

July 31, 2023

800,000

800,000

0.314%

August 31, 2023

1,200,000

1,200,000

0.313%

August 31, 2023-

900,000-

900,000

0.312%

November 30, 2023

4,400,000
950,000
1,100,000

3,850,000-

950,000
1,100,000

8,250,000-

1.083%
0.923%

November 30, 2022
August 31, 2022

700,000-

700,000-

0.923%

August 31, 2022

1,000,000-

1,000,000-

0.509%

August 31, 2022

400,000-

400,000-

1,600,000-

1,600,000-

0.498%

August 31, 2022

500,000-

500,000-

0.272%

January 31, 2023

1,500,000--

1,500,000

0.987%

April 30, 2023

1,500,000--

1,500,000

0.501%

February 28, 2023

1,500,000
800,000
500,000--

1,500,000
800,000
500,000

0.299%
0.325%

July 31, 2023
April 30, 2023

500,000--

500,000

300,000--

300,000
0.329%

July 31, 2023

300,000--

300,000

February 28, 2023

200,000--

200,000

500,000--

500,000

0.286%

200,000--

200,000

0.236%

Unsecured/
February 28, 2023 (Note 6) Unguaranteed

1.254%

August 7, 2023

400,000

400,000

400,000

400,000

300,000

300,000

200,000

200,000

200,000

200,000

150,000

150,000

500,000

500,000

1.320%(Note 5)

August 7, 2023

1,200,000

1,200,000

1.105%

January 31, 2024

950,000

950,000

1.047%

August 31, 2023

1,200,000

1,200,000

0.592%

August 31, 2023

Aozora Bank, Ltd. (Note 2)

1,000,000

1,000,000

0.592%

August 31, 2023

MUFG Bank, Ltd. (Note 2)

800,000

800,000

0.592%

August 31, 2023

The Bank of Fukuoka,
Ltd. (Note 2)

800,000

800,000

0.230%

November 30, 2023

MUFG Bank, Ltd. (Note 2)
Sumitomo Mitsui Trust
Bank, Limited (Note 2)
Sumitomo Mitsui Banking
Corporation (Note 2)

Classification
LenderBalance at the
beginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance at theend of period

Averageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)Use

Remarks(in thousands of yen)
Current
portionof longterm
loans
payableLongtermloanspayableMUFG Bank, Ltd. (Note 2)

1,000,000

1,000,000

MUFG Bank, Ltd. (Note 2)

300,000

300,000

0.225%(Note 5)0.225%(Note 5)0.225%(Note 5)October 31, 2023
November 30, 2023 (Note 6)

MUFG Bank, Ltd. (Note 2)

900,000--

900,000

Sub total
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
MUFG Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

24,350,000
2,000,000-

6,250,000-

18,100,000
2,000,000

1.100%

April 30, 2024

1,000,000--

1,000,000

1.265%

April 30, 2025

1,700,000
950,000--

1,700,000
950,000

1.169%
1.169%

August 31, 2024
August 31, 2024

2,000,000--

2,000,000

1.345%

August 31, 2025

1,000,000--

1,000,000

1,000,000
1,000,000--

1,000,000
1,000,000

1.193%(Note 5)
1.156%
0.819%

2,500,000--

2,500,000

0.903%MUFG Bank, Ltd.

1,000,000--

1,000,000

Mizuho Bank, Ltd.

1,500,000--

1,500,000

Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

1,000,000--

1,000,000

MUFG Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
SBI Shinsei Bank, Limited(Note 8)Mizuho Trust & Banking
Co., Ltd.
Development Bank ofJapan Inc.
Mizuho Bank, Ltd.
The Bank of Fukuoka, Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Nippon Life Insurance
Company
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
Nippon Life Insurance
Company
Resona Bank, Limited

1,000,000--

1,000,000

500,000--

500,000

2,000,000--

2,000,000

500,000--

500,000

3,000,000--

1,000,000--

0.660%(Note 5)0.816%(Note 5)0.713%

January 31, 2024

August 31, 2024
April 27, 2025
April 28, 2025
April 30, 2026
July 31, 2025
August 31, 2026
August 31, 2024

0.797%

August 31, 2025

0.670%(Note 5)0.751%(Note 5)

August 31, 2025

3,000,000

0.906%

August 31, 2026

1,000,000

0.773%(Note 5)October 31, 2025

0.900%

August 22, 2027

0.928%(Note 5)

August 22, 2027

0.582%

February 29, 2024

0.624%
0.661%(Note 5)

August 31, 2024

1,000,000--

1,000,000

1,000,000--

1,000,000

1,000,000--

1,000,000

1,200,000--

1,200,000

1,000,000--

1,000,000

500,000
500,000
1,500,000--

500,000
500,000
1,500,000

1,000,000--

1,000,000

1,000,000
500,000--

1,000,000
500,000

500,000--

500,000

1,500,000--

1,500,000

1,000,000--

1,000,000

1,000,000--

1,000,000

500,000--

500,000

1,500,000--

1,500,000

1,400,000
900,000--

1,400,000
900,000

500,000--

500,000

500,000--

500,000

400,000--

400,000

Unsecured/
Unguaranteed

August 31, 2024

0.665%

February 28, 2025

0.749%

February 28, 2026

0.900%(Note 5)January 30, 2027

0.799%

February 2, 2026

(Note 6)

Unsecured/
UnguaranteedClassification
LenderBalance at the
beginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance at theend of period

Averageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)0.914%

February 28, 2027

Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)
SBI Shinsei Bank, Limited(Note 8)
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Aozora Bank, Ltd.
The Bank of Fukuoka, Ltd.
Sumitomo Mitsui Banking
Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.

400,000--

400,000

300,000
300,000--

300,000
300,000

1,050,000--

1,050,000

500,000--

500,000

500,000--

500,000

500,000--

500,000

250,000--

250,000

1,400,000--

1,400,000

MUFG Bank, Ltd.

800,000--

800,000

700,000--

700,000

1,000,000--

1,000,000

800,000--

800,000

500,000--

500,000

400,000--

400,000

0.363% November 30, 2024

Nippon Life Insurance
Company
SBI Shinsei Bank, Limited(Note 8)
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Mizuho Trust & Banking
Co., Ltd.
Mizuho Bank, Ltd.

LongtermloanspayableSBI Shinsei Bank, Limited(Note 8)
Sumitomo Mitsui Banking
Corporation
Resona Bank, Limited
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
The Bank of Fukuoka, Ltd.

400,000--

400,000

400,000--

400,000

1.031%

February 28, 2027
September 30, 2026

September 30, 2028

2,000,000--

2,000,000

0.330%(Note 5)500,000--

500,000

0.484% November 30, 2025

1,000,000--

1,000,000

0.572%

450,000
1,500,000
500,000--

450,000
1,500,000
500,000

0.336%
April 30, 2024
0.600% November 30, 2026

500,000--

500,000

500,000--

500,000

500,000
500,000--

500,000
500,000

500,000--

500,000

400,000--

400,000

MUFG Bank, Ltd.

400,000--

400,000

Aozora Bank, Ltd.

200,000--

200,000

MUFG Bank, Ltd.

600,000--

600,000

1,000,000--

1,000,000

800,000--

800,000

500,000--

1,750,000-

1,750,000
1,000,000
500,000
500,000

Sumitomo Mitsui Trust
Bank, Limited
SBI Shinsei Bank, Limited(Note 8)Development Bank ofJapan Inc.
Sumitomo Mitsui Banking
Corporation
SBI Shinsei Bank, Limited(Note 8)MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking
Co., Ltd.

0.884%(Note 5)0.825%(Note 5)0.920%(Note 5)0.259%

May 31, 2025

August 31, 2026

February 29, 2024

0.464%
February 28, 2027
0.414%
0.450%(Note 5)0.531%
0.300%(Note 5)February 29, 2028

0.646%

June 30, 2028

500,000

0.616%(Note 5)June 30, 2028-

1,750,000

0.691%--

1,750,000--

1,000,000
500,000
500,000

500,000--

500,000

1,000,000--

1,000,000

0.686%

July 31, 2028

800,000--

800,000

0.637%

July 31, 2028

February 28, 2027
February 29, 2024

July 31, 2028
0.641%

Classification
Lender
MUFG Bank, Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.

LongtermloanspayableBalance at the
beginning of
period500,000
300,000

Increaseduring theperiodBalance at theend of period

Averageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)-500,000
300,000

0.640%
0.690%

August 31, 2028

0.648%

September 30, 2028

Decreaseduring theperiod(in thousands of yen)-

840,000--

840,000

900,000--

900,000

800,000
1,330,000
500,000--

800,000
1,330,000
500,000

0.558%

400,000--

400,000

0.608%MUFG Bank, Ltd.

800,000--

800,000

MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Aozora Bank, Ltd.
SBI Shinsei Bank, Limited(Note 8)Daishi Hokuetsu Bank,Ltd.
The Bank of Yokohama,
Ltd.
Sumitomo Mitsui Banking
Corporation

300,000
500,000--

300,000
500,000

0.550%(Note 5)0.637%
0.478%

1,000,000--

1,000,000

0.585%

October 31, 2027

2,000,000--

2,000,000

0.617%

November 30, 2027

1,000,000
1,200,000--

1,000,000
1,200,000

0.599%
0.409%

January 31, 2028

1,100,000--

1,100,000

0.359%

1,350,000--

1,350,000

0.677%March 31, 2029

1,000,000--

1,000,000

0.252%

July 31, 2024
January 31, 2027

MUFG Bank, Ltd.
Nippon Life Insurance
Company
The Yamaguchi Bank, Ltd.
The Chugoku Bank, Ltd.
The 77 Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Banking
Corporation

October 31, 2027
April 30, 2025

January 31, 2025-

500,000

1,000,000--

1,000,000

0.467%

July 31, 2029

1,400,000--

1,400,000

0.598%

January 31, 2030

0.575%(Note 5)0.700%(Note 5)January 31, 2030

0.358%

February 28, 2027

0.533%
0.433%

February 28, 2029

0.585%

February 28, 2030

1,000,000

1,000,000--

1,000,000

800,000
500,000
500,000
350,000
300,000--

800,000
500,000
500,000
350,000
300,000

1,200,000--

1,200,000

0.575%(Note 5)0.638%(Note 5)

MUFG Bank, Ltd.

1,200,000--

1,200,000

Development Bank ofJapan Inc.

1,000,000--

1,000,000

Aozora Bank, Ltd.

500,000--

500,000

0.540%

February 28, 2029
February 28, 2029
February 28, 2030

MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Chiba Bank, Ltd.
The Musashino Bank, Ltd.
The Hyakugo Bank, Ltd.
THE HACHIJUNI BANK,LTD.
The Shizuoka Bank, Ltd.
Aozora Bank, Ltd.
THE NISHI-NIPPONCITY BANK, LTD.
The Yamanashi Chuo
Bank, Ltd.
The Yamaguchi Bank,Ltd.
The Bank of Yokohama,
Ltd.
Kansai Mirai Bank, Limited
The Bank of Kyoto, Ltd.

Unsecured/
Unguaranteed

September 30, 2028--

(Note 6)

September 30, 2028

500,000-

Remarks

0.658%

0.350%(Note 5)1,000,000

Use

February 28, 2030
August 31, 2031

600,000--

600,000

0.525%(Note 5)600,000--

600,000

0.602%

600,000
500,000
500,000--

600,000
500,000
500,000

0.325%
November 30, 2026
(Note 5)500,000--

500,000

0.314% November 30, 2025

200,000--

200,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

1,000,000--

1,000,000

700,000--

700,000

500,000
300,000--

500,000
300,000

0.529%(Note 5)

May 31, 2029

0.561% November 30, 2029

0.631% November 30, 2030
0.703% November 30, 2031

Classification
LenderBalance at the
beginning of
periodSumitomo Mitsui Banking
Corporation
Shinkin Central Bank
The Keiyo Bank, Ltd.
Aozora Bank, Ltd.

LongtermloanspayableIncreaseduring theperiod4,000,000

Balance at theend of period

Averageinterest
rate(Note 3)(Note 4)

Payment due date
(Note 7)-4,000,000

0.447%

April 30, 2025

0.466%
0.509%
0.354%
0.350%(Note 5)0.632%
0.681%
0.610%(Note 5)October 31, 2025
October 31, 2026
October 31, 2024

0.425%

May 31, 2026

Decreaseduring theperiod(in thousands of yen)-

1,500,000
500,000
1,000,000--

1,500,000
500,000
1,000,000

Daishi Hokuetsu Bank, Ltd.

500,000--

500,000

Aozora Bank, Ltd.
Aozora Bank, Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Sompo Japan Insurance
Inc.
SBI Shinsei Bank, Limited(Note 8)1,500,000
1,000,000--

1,500,000
1,000,000

500,000--

500,000

300,000--

300,000

300,000--

300,000

1,000,000--

1,000,000

0.380%(Note 5)

August 31, 2025

1,100,000--

1,100,000

0.550%

July 31, 2027

MUFG Bank, Ltd.

-

500,000-

500,000

Resona Bank, Limited
Mizuho Trust & Banking
Co., Ltd.
Development Bank ofJapan Inc.

-

1,100,000-

1,100,000

0.225%(Note 5)0.422%-

700,000-

700,000

0.549%-

1,600,000-

1,600,000

The Norinchukin Bank-

1,300,000-

1,300,000

The 77 Bank, Ltd.

-

800,000-

800,000-

500,000-

500,000-

500,000-

500,000

123,170,000¥151,920,000

7,000,000¥10,850,000¥6,250,000

130,170,000¥156,520,000

Daishi Hokuetsu Bank,Ltd.
SBI Shinsei Bank, Limited(Note 8)Sub total
Total

0.711%(Note 5)0.556%(Note 5)0.667%(Note 5)0.667%(Note 5)0.790%(Note 5)Use

Remarks(Note 6)

Unsecured/
Unguaranteed

April 30, 2027
October 31, 2027
April 30, 2028
March 31, 2029

February 29, 2024
August 31, 2025
February 28, 2027
August 31, 2029
November 30, 2026
January 31, 2027
January 31, 2027
January 31, 2028

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

Due after 2 years

Due after 3 years

Due after 4 years

through 2 years

through 3 years

through 4 years

through 5 years¥ 18,400,000¥ 24,300,000

Due after 5 years(in thousands of yen)
Long-term loans payable¥ 25,000,000¥ 24,400,000¥ 38,070,000

Note 2: Borrowings listed in the current portion of long-term loans payable were listed in long-term loans payable in the previous fiscal period.
Note 3: All debts except for the following Note 5 are borrowing at a floating rate.
Note 4: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions were implemented in order to hedge the interest rate volatility risk, theweighted average interest rates taking into consideration the effects of the interest rate swaps are indicated.
Note 5: Borrowings is applied at a fixed rate.
Note 6: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 7: All the repayment methods of debt financing are lump-sum repayments on the due date.
Note8: SBI Shinsei Bank, Limited. changed its trade name from "Shinsei Bank, Limited." on January 4, 2023.

23. DISTRIBUTIONS
23rd Fiscal Period(From February 1, 2023 to July 31, 2023)
I. Retained earnings at the end of period

22nd Fiscal Period(From August 1, 2022 to January 31,2023)¥4,682,702,038¥4,718,142,642¥20,000,000¥20,000,000¥4,521,508,992¥4,556,833,281¥4,224¥4,257¥181,193,046¥181,309,361

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount 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 not exceed its accounting
profits as the maximum amount. Following this policy, theInvestment Corporation has decided that it shall
distribute ¥4,521,508,992, which is the amount of¥4,501,392,677 in net income and ¥116,315 fromretained earnings brought forward and ¥20,000,000
reversal of reserve for temporary difference adjustments,
as the distribution of earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In the
23rd fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount 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 not exceed its accounting
profits as the maximum amount. Following this policy, theInvestment Corporation has decided that it shall
distribute ¥4,556,833,281, which is the amount deducteda part of gain on sale of real estate property and otheradjustments from net income and added reversal ofreserve for temporary difference adjustments, as the
distribution of earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In the
22nd fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

II. Reversal of voluntary retained earnings
Reversal of reserve for temporary
difference adjustments (Note 1)
III. Total distributions
Distributions per unit
IV. Retained earnings brought forward to
the next period

Method of calculating distribution amount

Note 1: Reserve for temporary difference adjustments
23rd Fiscal Period (February 1, 2023 to July 31, 2023)
The Investment Corporation has reserved ¥2,000,000,000 as reserve for temporary difference adjustments from gain on negative goodwill in
the 13th fiscal period. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal
period applied to distribution starting from the 14th fiscal period distribution. It has been decided that ¥20,000,000 shall be reversed and applied
to distribution in the 23rd fiscal period distribution.
22nd Fiscal Period (August 1, 2022 to January 31, 2023)
The Investment Corporation has reserved ¥2,000,000,000 as reserve for temporary difference adjustments from gain on negative goodwill in
the 13th fiscal period. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal
period applied to distribution starting from the 14th fiscal period distribution. It has been decided that ¥20,000,000 shall be reversed and applied
to distribution in the 22nd fiscal period distribution.