Kenedix Retail REIT Corporation (3453)

Translation of Japanese Original

FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED SEPTEMBER 30, 2015 (REIT)(October 3, 2014 to September 30, 2015)
November 12, 2015

Kenedix Retail REIT Corporation (“KRR”) is listed on the Tokyo Stock Exchange with the securities code number
3453.
(URL http://www.krr-reit.com/en/)
Representative:
Akihiro Asano, Executive Director
Asset Management Company: Kenedix Real Estate Fund Management, Inc.
Representative:
Ryosuke Homma, CEO and President
Inquiries:
Koichiro Nobata, General Manager of Planning Department, Retail REIT Division
TEL+81-3-5623-3868
Planned submission of semiannual securities report: December 24, 2015
Planned start of distribution payments:
December 11, 2015
Preparing presentation material:
Yes
Hold a financial brief meeting:Yes (for analysts and institutional investors)(Amounts are rounded down to the nearest million of yen)

1．PERFORMANCE FOR THE FISCAL PERIOD ENDED SEPTEMBER 30, 2015 (October 3, 2014 to September
30, 2015)(1) Business Results(Percentages show period-on-period changes)
Fiscal period ended
September 30, 2015

Operating Revenues
Millions of Yen
%
5,103
－

Operating Income
Millions of Yen
2,463

%
－

Ordinary Income
Millions of Yen
1,939

%
－

Net Income
Millions of Yen
1,933

%
－

Ordinary Income to Total
Ordinary Income toAssetsOperating Revenues
Fiscal period ended
Yen
%
%
%
September 30, 2015
11,5153.3
2.0
38.0(Note 1)
Although the accounting period for KRR’s fiscal period ended September 30, 2015 includes 363 days from October 3, 2014 to September 30,
2015, its substantial asset management period covers only 233 days from February 10, 2015 to September 30, 2015.
(Note 2)
Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during theperiod (167,878 units). Net income per unit was ¥7,434, if calculated based on the day-weighted average number of investment units
outstanding during the period assuming the beginning date of the fiscal period is February 10, 2015, the day that the asset management
actually commenced (260,034 units).
(Note 3)Return on net assets and ordinary income to total assets are calculated using the average amount of net assets and total assets as of February
10, 2015, the day that the asset management actually started, and as of September 30, 2015.
(Note 4)The purpose of the percentages of operating revenues, operating income, ordinary income and net income is to show changes from theprevious period. However, no applicable figures are shown for the period under review, as the reporting period was the KRR’s first fiscal
period.
Net Income per Unit

Return on Net Assets(2) Distribution
Distributions per
Total Distributions
Distributions in
Total Distributions
Unit (Excluding
Distribution Ratio(Excluding Excess
Excess ofin Excess of
Payout Ratio
Excess of
to Net Assets
of Earnings)
Earnings per Unit
Earnings
Earnings)
Fiscal period ended
Yen
Millions of Yen
Yen
Millions of Yen%%
September 30, 2015
7,414
1,933
0
0
100.0
3.5
(Note)
Due to the issuance of new investment units, the payout ratio is calculated as following method (rounded to the nearest tenth).
Payout Ratio = Total Distributions (Excluding Excess of Earnings) /Net Income × 100(3) Financial Position
As of

September 30, 2015

Total Assets
Millions of Yen
108,382

Net Assets
Millions of Yen
59,790Net Assets to Total Assets%
55.2

Net Asset Value per Unit
Yen
229,301

Cash Flows fromOperating Activities
Millions of Yen
1,152

Cash Flows from
Investing Activities
Millions of Yen(88,993)

Cash Flows from
Financing Activities
Millions of Yen
95,991

Cash and Cash Equivalents
at the End of the period
Millions of Yen
8,150(4) Cash Flows
Fiscal period ended
September 30, 2015

This is an English-language translation of the original Japanese announcement on our website released on November 12, 2015. However, no assurance orwarranties are given with respect to the accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of
discrepancies between this translation and the Japanese original.

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Kenedix Retail REIT Corporation (3453)

2．FORECAST OF RESULTS FOR THE FISCAL PERIOD ENDING MARCH 31, 2016 (October 1, 2015 toMarch 31, 2016) AND SEPTEMBER 30, 2016 (April 1, 2016 to September 30, 2016)
Operating
Revenues(Millions of
Yen)

Operating
Income(Millions ofYen)

Ordinary
Income(Millions of
Yen)

Net Income(Millions ofYen)(Percentages show period-on-period changes)
Distributions
Distributions
Distributions
per Unit
per Unitin Excess of(Excluding(Including
Earnings per
Excess ofExcess of
Unit
Earnings)
Earnings)
Yen
Yen
Yen
6,592
13
6,605
5,540
15
5,555

Fiscal period ending%%%%
March 31, 2016
5,522
8.2
2,769
12.4
2,343
20.8
2,342
21.1
September 30, 2016
5,577
1.0
2,385
(13.9)
1,969(16.0)
1,968(16.0)(Reference) Forecasted net income per unit (Forecasted net income / Forecasted average number of investment units during period)

For the fiscal period ending March 31, 2016: ¥6,604 For the fiscal period ending September 30, 2016: ¥5,540
Distributions per unit are calculated based on the number of investment units issued and outstanding totaled 355,250 as of today.

(Note )*OTHER(1) Changes in Accounting Policies/Changes in Accounting Estimate/Retrospective Restatement(a) Changes in accounting policies accompanying revisions to accounting standards: None(b) Changes in accounting policies other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(2) Number of Investment Units Issued and Outstanding (including treasury investment units)(a) Number of investment units issued and outstanding at the end of the period (including treasury investment units)
As of September 30, 2015: 260,750 units(b) Number of treasury investment units at the end of the period
As of September 30, 2015: 0 units(Note) Please refer to “Per Unit Information” on page 25 for the number of investment units used as the basis for calculating net
income per unit.
* Status of audit procedures
As of the time of disclosure of this financial report, audit procedures for the financial statements pursuant to the Financial Instruments and Exchange Act of Japan
are incomplete.
* Remarks on appropriate use of forecasts of performance and other special notes
Forward-looking statements presented in this financial report, including forecasts of performance, are based on information currently available to KRR and on
certain assumptions KRR deems to be reasonable. As such, actual operating and other results may differ materially from these forecasts as a consequence ofnumerous factors. The above-mentioned forecasts are based on “Assumptions for the Forecasts of Financial Results for the Fiscal Periods Ending March 31, 2016
and September 30, 2016” on page 11 for calculation, and our judgment as of September 30, 2015. Actual operating revenues, operating income, ordinary income,net income, distributions per unit and distributions in excess of earnings per unit may vary according to changes in market conditions. These forecasts do notguarantee the distribution amount.

This is an English-language translation of the original Japanese announcement on our website released on November 12, 2015. However, no assurance orwarranties are given with respect to the accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of
discrepancies between this translation and the Japanese original.

2

Kenedix Retail REIT Corporation (3453)

1. KRR and Related Corporations
As there have been no significant changes from the “Management structure of KRR” described in the Securities
Registration Statement (submitted on August 27, 2015; prepared in Japanese only), the disclosure is omitted.

2. Investment Policies and Status of Asset Management(1) Investment Policies
As there have been no significant changes from policies described in “Investment Policy,” “Investment Properties” and“Distribution Policy” in the Securities Registration Statement (submitted on August 27, 2015; prepared in Japaneseonly), the disclosure is omitted.
(2) Status of Asset Management(Overview of the Period ending September 30, 2015)i) Transition of KRR
KRR was established on October 3, 2014, with unitholders’ capital of ¥150 million (750 units) and with Kenedix Real
Estate Fund Management Inc. (“KFM”) as the organizer under the Act on Investment Trusts and Investment
Corporations of Japan (the “Investment Trust Act”). On October 30, 2014, KRR was registered with the DirectorGeneral of the Kanto Local Finance Bureau (registration number: Director-General of the Kanto Local Finance Bureau
No. 97). KRR issued new investment units (254,250 units) through a public offering with the payment due date on
February 9, 2015, which were listed on the Real Estate Investment Trust Securities (J-REIT) Market of Tokyo Stock
Exchange, Inc. (the Tokyo Stock Exchange) (Securities code: 3453) on February 10, 2015. In addition, new investment
units (5,750 units) were issued through a third-party allotment on March 11, 2015. As a result, the number ofinvestment units issued at the end of the period ending September 30, 2015 was 260,750 units.
KRR seeks to invest primarily in neighborhood, community and other shopping centers that cater to the day-to-day
needs of local area customers and have stable demand from retailers and customers, in order to provide stable
investment returns over the long term. Sponsored by Kenedix, Inc., a leading, independent real estate asset
management company, KRR entrusts its asset management and investment operations to KFM, with the following
strategies.
(Note) For our management purposes and ease of classification, we define neighborhood, community and othershopping centers for daily needs as retail properties that generally have the following characteristics:
a. Retail trade area of approximately a one to ten kilometer radius (and generally, a three to five kilometer radius),
with customers predominantly from local areas surrounding the retail property
b. Operational capacity to accommodate certain daily local retail needs and strong customer traffic on both
weekdays and weekends
c. Composed of various specialty stores to meet a range of day-to-day needs such as groceries,clothing and otherdaily goods and servicesii) Investment Environment
There were signs of an economic rebound in Japan following a sluggish period mainly due to the impact of the April
2014 consumption tax hike to 8%. However, real GDP growth (2nd preliminary estimate) in the second quarter of 2015
was negative 0.3%, the first decline from the previous year in three quarters primarily due to weak consumer spending
and exports. Since consumer spending was affected by temporary factors such as soft seasonal purchases due tounfavorable weather in June and the tax increase on light vehicles, the drop in the real GDP growth rate may also betransient. On the other hand, corporate earnings are increasing and employment statistics are improving. The real wage
index of the Monthly Labour Statistics Survey of the Ministry of Health, Labour and Welfare was higher than one year
earlier in July 2015 for the first time in about two years and increased again in August. The Bank of Japan Regional
Economic Report (October 2015) also states that domestic demand is either “slowly recovering” or “recovering” in all
regions due to firm consumer spending backed largely by steady improvements in the number of jobs and personal
income.
In this financial environment, interest rates have been declining following the additional monetary easing by the Bankof Japan in October 2014. As funds flowed into the J-REIT market, especially through J-REIT mutual funds, the TSE
REIT Index rallied to the 2,000 level in January 2015 based on highest prices. Subsequently, the index fell sharply due
to an oversupply of investment units as J-REITs raised equity at a fast pace, the Greek debt problem, the stock market
plunge in China and concerns over a U.S. interest rate hike, and slipping once below 1,500 in September. Although theindex has been rebounding as investors are attracted by lower prices, cautiousness remains over J-REIT market. In thereal estate market, J-REITs continue to purchase a substantial number of properties because of monetary easing andbrisk equity raising activities by J-REITs.

3

Kenedix Retail REIT Corporation (3453)

iii) Management Performance(A) Acquisition of Assets
KRR acquired and started the operations of the following trust beneficiary interests in real estate (18 properties; totalacquisition price: ¥80,843 million) on February 10, 2015. In addition, KRR acquired a property (acquisition price:¥11,000 million) on April 16, 2015.
The below is property portfolio of KRR as of September 30, 2015.
Property
number

Property
Type(Note 1)

T-1

CSC

T-2
T-3
T-4

AcquisitionPrice(million yen)
(Note 2)Acquisition Date

Yachiyo, Chiba

14,848February 10, 2015

Urayasu, Chiba

8,063

February 10, 2015

Adachi ward, Tokyo

5,850

February 10, 2015

Shibuya ward, Tokyo

5,390

February 10, 2015

Location(City or Ward,
Prefecure)

Property name

Fululu Garden Yachiyo

Urban Station- MONA Shin-Urayasu
Front SC
Urban Station- Passaggio Nishiarai
Front SC
Urban Station- Daikanyama Address Dixsept
Front SC

T-5

NSC

Unicus Ina

Kitaadachi-gun,Saitama

4,379

February 10, 2015

T-6

NSC

Yorktown Kita-Kaname

Hiratsuka, Kanagawa

4,000

February 10, 2015

T-7

NSC

Unicus Yoshikawa

Yoshikawa, Saitama

3,600

February 10, 2015

T-8

SS

Sports Club Renaissance Fujimidai

Nerima ward, Tokyo

2,586

February 10, 2015

O-1

NSC

Blumer Maitamon

Kobe, Hyogo

8,389

February 10, 2015

O-2

SM

Central Square Takadono (Land)

Osaka, Osaka

2,685

February 10, 2015

O-3

NSC

Piago Kahma Home Center
Omihachiman

Omihachiman, Shiga

2,140

February 10, 2015

O-4

NSC

Bulmer HAT Kobe

Kobe, Hyogo

11,000April 16, 2015

N-1

SS

Kahma Home Center Nakagawa
Tomita (Land)

Nagoya, Aichi

2,311

February 10, 2015

N-2

NSC

Valor Ichinomiya-Nishi

Ichinomiya, Aichi

2,174

February 10, 2015

N-3

SS

K’s Denki Nakagawa Tomita (Land)

Nagoya, Aichi

889

February 10, 2015

F-1

SM

Sunny Noma

Fukuoka, Fukuoka

1,497

February 10, 2015

R-1

NSC

Roseo Mito

Mito, Ibaraki

9,675

February 10, 2015

R-2

SM

K’s Denki Aomori Honten

Aomori, Aomori

1,469

February 10, 2015

R-3

NSC

Super Sports Xebio Aomori-Chuo

Aomori, Aomori

898

February 10, 2015

Total

91,843(Note1) Properties are categorized into the following five types of retail properties for daily needs: NSC (Neighborhood Shopping
Center), SM (Supermarket), CSC (Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping
Center) and SS (Specialty Store).
We categorize these properties generally into five separate groups as follows.
Type of Neighborhood, community andother shopping centers for daily needs

Features

Trade area

NSC (Neighborhood Shopping Centers)

Shopping centers with a supermarket as an anchor or coretenant and several
specialty store tenants

three to fivekilometer

SM (Supermarkets)

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

threekilometer

CSC (Community Shopping Centers)

Larger shopping centers than NSC, which have a supermarket as an anchor orcore tenant in addition to specialty store tenants

five to ten
kilometer

Shopping centers that are located in the immediate vicinity of an urban public
transportation station, which take advantage of stable foot traffic
Single- or multiple-tenant shopping centers that specialize in a single type ofmerchandise or service, such as drug stores, convenience stores,health clubs orelectronic appliance stores

three to ten
kilometer

Urban Station-Front Shopping Centers
SS (Specialty Stores)

one to ten
kilometer(Note2) “Acquisition price” represents the purchase price of each trust beneficiary interest specified in purchase agreement inrelation to the acquisition of each property (excluding acquisition costs, adjustment in property tax and city-planning tax,
and consumption tax; and rounded down to the nearest one million yen).
(Note3) We have changed the property name as follows:
Property number

Current Name

Previous Name

Date

O-2

Central Square Takadono (Land)

Life Takadono (Land)

July 27, 2015(B) Management and Operation of Assets
4Kenedix Retail REIT Corporation (3453)

KFM provides property management services for all of the properties owned by KRR at the end of the period underreview (September 30, 2015). By using the same company for both asset management and property management
services, KRR aims to build stronger relationships with tenants and increase returns from its portfolio. Furthermore, byimplementing retail property management that better reflects the needs of our tenants, KRR strives to accumulate
know-how and improve tenant satisfaction. KRR invests primarily in neighborhood and community shopping centersthat cater to the day-to-day needs of customers. The portfolio is diversified in terms of properties, tenants and othercharacteristics with a goal to generate consistent long-term cash flows. At the same time, a portion of the rent includes
sales-linked rent to explore the upside potential for rental income. By using these measures, we aim to pursue a
portfolio that achieves both stability and growth.
As of the end of the period under review, portfolio as a whole performed well with an overall occupancy ratio of 99.6%.
Furthermore, the portfolio is diversified in terms of tenants as there are 321 end-tenants in our retail properties.
(C) Financing
When financing to acquire properties, KRR seeks to achieve the proper balance between financial stability and theefficiency of the cost of the funds with the objectives to achieve stable medium- to long-term returns and consistent
growth of assets under management.
(Equity Finance)
In the current fiscal period, KRR was listed on the Tokyo Stock Exchange on February 10, 2015. In regard to thisinitial public offering, KRR sold 254,250 newly issued units, of which 168,825 units were offered in Japan and 85,425
units were offered overseas, and raised 56,430 million yen. In addition, 5,750 units were issued through third-party
allotment on March 11, 2015, raising 1,276 million yen that was used to prepay a portion of borrowing for acquisitionof properties. Due to these activities, unitholders’ capital increased to 57,857 million yen on September 30, 2015.
(Debt Finance)
During the fiscal period under review, KRR borrowed for the acquisition of properties and used the proceeds from theissuance of newly issued units through third-party allotment for the early repayment of debt. Consequently, debt
totaled 38,350 million yen at the end of the fiscal period under review. When undertaking borrowings, we combine a
number of loans, spreading out repayment dates as shown below, considering the interest rate trends and otherfinancial environment. We use swaps to fix the interest payments to hedge against the risk of a rise in interest rates.
The below are borrowings at the end of the fiscal period.
SeriesLenderAmountRepayment
Repayment(in thousands Interest rate Drawdown
date
date
methodof yen)(Note 1)

Remarks

Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
1-A

Mizuho Bank, Ltd.
Aozora Bank, Ltd.

JBA 1-month February February 10, Full on
Unsecured/
2,000,000 Japanese Yen 10, 20152016
maturity Unguaranteed
TIBOR+0.30%

Resona Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Sumitomo Mitsui Banking Corporation
1-B

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.

3,850,000

0.54500%(Note2)February February 10, Full on
Unsecured/10, 2015
2018
maturity Unguaranteed

7,000,000

0.75125%(Note2)February February 10, Full on
Unsecured/10, 2015
2020
maturity Unguaranteed

5,500,000

0.86475%(Note2)February February 10, Full on
Unsecured/10, 2015
2021
maturity Unguaranteed

5,400,000

0.97750%

February February 10,

Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Trust Bank, Ltd.
1-C

Aozora Bank, Ltd.
Resona Bank, Ltd.
The Gunma Bank,Ltd.
The Musashino Bank,Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1-D

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

1-E Sumitomo Mitsui Banking Corporation

5

Full on

Unsecured/Kenedix Retail REIT Corporation (3453)(Note2)The Bank of Tokyo-Mitsubishi UFJ, Ltd.

10, 2015

2022

maturity Unguaranteed

Sumitomo Mitsui Trust Bank, Ltd.
Aozora Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
Mizuho Bank, Ltd.
Resona Bank, Ltd.
1-F Development Bank of Japan Inc.
1-G Development Bank of Japan Inc.
1-H Sumitomo Mitsui Banking Corporation(Note4)2-A(Note4) Sumitomo Mitsui Banking Corporation
2-B Sumitomo Mitsui Banking Corporation

0.92500%
February February 10, Full on
Unsecured/(Note3)
10, 2015
2021
maturity Unguaranteed
1.03250%
February February 10, Full on
Unsecured/
1,600,000(Note3)
10, 2015
2022
maturity Unguaranteed
JBA 1-month
February 10,
Full on
Unsecured/
1,322,500 Japanese Yen February
2016
10,
2015
maturity Unguaranteed
TIBOR+0.50%(Note3)
JBA 1-month April 16,
April 16,
Full on
Unsecured/
6,900,000 Japanese Yen
2015
2016
maturity Unguaranteed
TIBOR+0.30%
April 16,
April 16,
Full on
Unsecured/
4,600,000 1.36600%(Note2)2015
2025
maturity Unguaranteed
1,500,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Aozora Bank, Ltd.
3-A

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.

2,200,000

0.53375%(Note2)September March 31,
30, 2015
2019

Full on
Unsecured/maturity Unguaranteed

3,200,000

0.97500%(Note2)September March 31,
30, 2015
2023

Full on
Unsecured/maturity Unguaranteed

Resona Bank, Ltd.
The Musashino Bank,Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
3-B

Mizuho Bank, Ltd.
Resona Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation

0.99438% September March 31,
Full on
Unsecured/(Note3)30, 2015
2023
maturity Unguaranteed(Note 1) The repayment date will be the following business day in case such date falls on a day that is not a business day or thepreceding business day in case such date falls in the next calendar month.
(Note 2) These borrowings are floating interest rates. However, we have entered into interest rate swap agreements to hedge the risks
of interest rate volatility. These rates are the interest rates including the effect of the swaps (i.e., fixed interest rates).
(Note 3) These borrowings are fixed rates.
(Note 4) As for Series 1-H, there was no balance as of September 30, 2015 as it was prepaid in full on March 16, 2015. The
repayment of Series 1-H was funded by net proceeds from the sale of new investment units through a third-party allotment
with a March 11, 2015 payment date and cash on hands. As for Series 2-A, there was no balance as of September 30, 2015
because it was prepaid in full on September 30, 2015 using the proceeds of the Series 3-A, 3-B and 3-C borrowings.
3-C Development Bank of Japan Inc.

1,500,000

As a result, the average remaining years to maturity is 5.5 years, the weighted average interest rate is 0.87%, the longterm debt ratio is 94.8% and the LTV ratio (note), is 40.6%.
(Note) The LTV ratio, or loan-to-value ratio, is the ratio of the total amount of borrowings, corporate bonds and tenant leasehold
and security deposits (net of amounts reserved for return of tenant leasehold and security deposits), to the total assets minus
amounts reserved for return of tenant leasehold and security deposits.

(Credit ratings)
The status of the credit ratings as of September 30, 2015 is as follows:
Credit Rating Agency
Details of the Ratings
Japan Credit Rating Agency, Ltd. (JCR)
Long-Term Issuer Rating
A (Outlook: Stable)iv) Results of Operations
For this period, revenue was 5,103 million yen, operating income was 2,463 million yen, ordinary income was 1,939
million yen and net income was 1,933 million yen.
Furthermore, in accordance with the distribution policy in the KRR Articles of Incorporation, the distribution for the
fiscal period was 1,933,200,500 yen, which is an integral multiple of 260,750, the number of investment units
outstanding at the end of the fiscal period and does not exceed the unappropriated retained earnings of the fiscal period.
Cash distributions are paid out to the application of Article 67-15 of the Special Taxation Measures Law (Law No. 26
of 1957, including subsequent amendments). Consequently, the distribution per unit was 7,414 yen.
(Outlook)i) Outlook for Asset Management
6

Kenedix Retail REIT Corporation (3453)

The Japanese economy is expected to continue to recover at a moderate pace owing to increasing corporate earnings
and other positive factors. However, we should pay attention to uncertainties about the overseas economy regarding thedirection of U.S. financial policies, the health of emerging economies and other events.
As for Japan’s retail sector environment, household sentiment is recovering with the improvement in employment
condition and rising wages, as well as the economic stimulus measures by the government. As a result, the negative
effects of the April 2014 consumption tax hike are expected to weaken.
In the real estate trading market, we anticipate the high level of transaction volume to continue because of the strong
appetite of J-REIT and other investors to acquire properties. The Bank of Japan’s aggressive monetary easing measures
will help provide continuous supply of adequate funds in the real estate market. However, investors should also keep inmind the risk of rise in interest rates in the future.
From a medium to long-term perspective, to generate a steady stream of rental revenue, consistently increase our assets
and establish a suitable financial position, KRR will continue to manage assets based on the following policies.
(A) Investment Strategy for New Properties and Disposition Policy
We receive a variety of support from many sources in order to achieve the steady growth of our assets and increase thevalue of our assets. One source is the Kenedix Group, including Kenedix, Inc., the parent company of KFM (note). We
also receive support from our Alliance Companies: Sumitomo Mitsui Finance and Leasing Co., Ltd., Nippon
Commercial Development Co., Ltd., and P&D Consulting Co., Ltd. We are implementing a growth strategy that takes
full advantage of the external growth opportunities created by the large and diverse acquisition pipeline made possibleby the support of these companies.
When acquiring properties, we make decisions based on all applicable factors with emphasis on four parameters: theretail property’s attractiveness, its location, the property’s profitability and the tenant mix. By using this selection
process results, we invest in retail properties with a competitive edge, and good prospects for consistent rental revenue
and growth in asset value. We also invest in land ownership interests underlying retail properties. While many of theland-only properties are selected from the “JINUSHI BUSINESS” portfolio held by Nippon Commercial Development
Co., Ltd. we make these investments after examining the terms of the land leasing agreement, the characteristics of thetenant, the asset value of the land, and the proportion of land-only properties in our portfolio. We may also consider
making an equity investment in a tokumei kumiai (silent partnership) for warehousing properties, provided that we are
given an opportunity to acquire them in the future.
Regarding disposition of a portfolio property, we make decisions based primarily on the significance of theseproperties in the context of the portfolio. This is assessed by comprehensive evaluation of the outlook for future
profitability and asset value determined based on its current profitability and market trends.
(Note) The Kenedix Group consists of Kenedix, Inc. and its subsidiaries and affiliates.

(B) Management Strategy for Existing Properties
KRR is committed to building a portfolio that can pursue both stability and growth. We believe that implementing
integrated asset and property management services makes it possible to properly manage retail properties and pursue
internal growth. Furthermore, this integrated management framework facilitates activities to enliven local communities
where our properties are located, enabling us to aim for medium to long-term growth in asset value.
To accomplish these goals, KFM oversees properties owned by KRR while placing priority on the following themes.
・“One-stop" asset management and property management services
・Continuously implementing a retail property management cycle through our in-house property management services
・Pursuit of internal growth through management of retail properties
・Directing investments and management policies to enliven local communities in the medium to long-term“One-stop" asset management and property management services
KRR plans to use the integrated asset management and property management services of KFM for strengthening
relationships with tenants and making the portfolio more profitable.
Continuously implementing a retail property management cycle through our in-house property management services
KFM provides property management services for all of KRR’s properties. We do this for the purposes of performing
retail property management that better reflects the needs of the tenants as well as accumulating know-how andimproving tenant satisfaction. Specifically, we use direct contact with tenant companies at our properties in order tostrengthen tenant relationships and make properties more profitable. To this end, we perform periodic monitoring ofmarket conditions so that we can identify the needs of tenants and the customers visiting their sites. This process makes
it possible to find issues that stand in the way of achieving greater satisfaction for tenants and their customers. Once wehave discovered points that require attention, we take actions that take full advantage of the resources and knowledge
regarding retail properties within the Kenedix Group. Solutions include measures such as the effectively utilizing
capital expenditures, optimizing tenant mix, realizing growth in asset value by pursuing property expansions, andcutting costs, to improve tenant satisfaction and acquire more know-how.
Pursuit of internal growth through management of retail properties
KRR seeks to use the proper management of retail properties to achieve the goals of consistent revenue, higher
7

Kenedix Retail REIT Corporation (3453)

profitability and growth in asset value.
i. Effectively utilize capital expenditure
We will use proper and well-timed capital expenditures to increase the satisfaction of tenants and make our properties
more competitive.
ii. Optimize tenant mix
We will constantly work on attracting new tenants that are highly appealing to shoppers and replace tenants withothers, optimizing tenant composition, in order to seek stable revenue and higher profitability by attracting morecustomers.
iii. Realize growth in asset value by pursuing property expansions
We will use the extensive knowledge involving retail properties of the Kenedix Group and our Alliance Companies toutilize the underutilized space (note) at properties and expand properties. These measures will take into account thecompetitive position of each property, the effect on our financial position and other factors. By increasing space thatcan be leased, we would like to increase revenue and asset value.
(Note) The underutilized space is defined as the area that is calculated by multiplying the floor space ratio, or the ratio of total areaof the buildingto the site area, which is prescribed in Article 52 of the Building Standards Act and applied to each retailproperty in accordance with the Building Standards Act, City Planning Act and other laws and regulations, by the land areathat is allowed to be used as a retail property site, and subtracting from this figure the actual gross floor area of the building.

Directing investments and management policies to enliven local communities in the medium to long-term
At our retail properties, we seek tenants that provide services, hold community involved events and use other measures
to help enliven the local communities where our properties are located. We believe these activities will contribute to
the medium to long-term growth in the asset value of these properties.
(C) Financing
We will establish a suitable financial foundation by examining numerous financing methods and selecting the optimum
ones. These decisions will reflect interest rates and other elements of the financial environment. Our goal is to selectfinancing methods that result in the optimum balance between financial stability and the financing cost.
(D) Disclosure of Information
Our policy concerning disclosure activities is to use extensive investor relations activities to distribute a broad range of
information to investors and other related parties as well as to announce information as soon and as accurately as wecan. We use TDnet (Timely Disclosure network) and press releases to meet the timely-disclosure requirements of theTokyo Stock Exchange. In addition, we proactively post information on our website (http://www.krr-reit.com/en/).
(E) Conflicts of Interest
In addition to managing the assets of KRR, KFM provides asset management services to other investment corporations
and real estate funds. KFM uses a “preferential right for acquisition opportunities” system for the property acquisition
process. KFM has a pipeline committee, which includes a compliance officer, and operates in accordance with rules.
This system is structured to prevent improper allocation of acquisition opportunities as well as conflicts of interest
among the REIT and funds managed by KFM. Through these measures, KFM is taking suitable actions regarding
conflicts of interest.

8

Kenedix Retail REIT Corporation (3453)(F) Important Subsequent Events
Issuance of new investment units
KRR passed resolutions at the Board of Directors Meeting held on August 27, 2015 and September 15, 2015, to issue
new investment units to fund the acquisition of specified assets. Payments for the issuance of new investment units
through public offering and through third-party allotment have been completed on October 1, 2015 and October 21,
2015, respectively. KRR used the net proceeds through third-party allotment for the partial repayment, 1,200,000
thousand yen, of short-term borrowings.
As a result, unitholders' capital totaled 77,606,649,500 yen and total number of investment units issued and outstanding
increased to 355,250 as of October 21, 2015.
Issuance of new investment units through public offerings
Total number of units issued
Issue price (offer price)
Total amount of issue price (total offer price)
Paid-in amount (issue amount)
Total paid-in amount (total issue amount)
Payment date

88,750 units (Domestic 50,950 units, International 37,800 units)
216,543 yen per unit
19,218,191,250 yen
208,991 yen per unit
18,547,951,250 yen
October 1, 2015

Issuance of new investment units through third-party allotment
Total number of units issued
Paid-in amount (issue amount)
Total paid-in amount (total issue amount)
Payment date
Allottee

5,750 units
208,991 yen per unit
1,201,698,250 yen
October 21, 2015
SMBC Nikko Securities Inc.

(Reference Material)(A) Acquisition of Assets
KRR acquired 13 assets (acquisition price of 37,920 million yen) on October 2, 2015.
“Acquisition price” represents the amount specified in the sale and purchase agreement for the trust beneficiaryinterests, exclusive of the various expenses (acquisition expenses, property tax, city planning tax, consumption tax,etc.) required in the acquisition of the following assets.
Acquisition
price(million yen)Appraisalvalue(million yen)

Acquisition
date

4,815

5,210

October 2,
2015

3,169

3,410

October 2,
2015

3,000

3,010

1,700

1,730

October 2,
2015
October 2,
2015

1,442

1,460

October 2,
2015

760

780

October 2,
2015

JRP4 G.K.

6,555

6,580

October 2,
2015

Izumi,Osaka

JRP5 G.K.

6,450

6,840

October 2,
2015

Hirakata,
Osaka

G.K. Properties 1

1,280

1,290

October 2,
2015

Kishiwada,
Osaka

Nippon Commercial
Development Co., Ltd.

487

500

October 2,
2015

Ashikaga,
Tochigi
Sendai,
MiyagiTsukuba,
Ibaraki

G.K. JPN1

4,180

5,050

Undisclosed (Note)

3,252

3,320

Undisclosed (Note)

830

847

37,92040,027

Property
number

Property
type

T-9

NSC

Super Viva Home
Iwatsuki (Land)

Saitama,
Saitama

T-10

SS

K’s Denki ShonanFujisawa (Land)

Fujisawa,
Kanagawa

T-11

NSC

T-12

NSC

Kodamagun, Saitama
Konosu,SaitamaT-13

SM

Yokohama,
Kanagawa

Nippon Commercial
Development Co., Ltd.

T-14

SM

Unicus Kamisato(Land)
Unicus Konosu(Land)
Inageya Yokohama
Minamihonjuku(Land)
Gourmet City ChibaChuo

Sumitomo Mitsui
Finance and Leasing
Co., Ltd.
Sumitomo Mitsui
Finance and Leasing
Co., Ltd.
P&D Consulting Co.,Ltd.
P&D Consulting Co.,
Ltd.

Chiba, Chiba

G.K. Properties 1

Carino Esaka

Suita, Osaka

COMBOX Komyoike
Hankyu Oasis
Hirakatadeguchi
WelciaKishiwadakamori(Land)
Ashico Town
Ashikaga
Yorktown ShindenHigashi
Kasumi Technopark
Sakura

O-5
O-6

Urban
StationFront SC
Urban
StationFront SC

O-7

SM

O-8

SS

R-4

NSC

R-5

NSC

R-6

SM

Property nameLocation

Total

Seller－－(Note) We have not obtained the seller’s consent.

9

October 2,
2015
October 2,
2015
October 2,2015－Kenedix Retail REIT Corporation (3453)(B) Asset under construction
A new building with 2,641.48m2 gross floor area (hereinafter the “secondhand shop building”) is under construction on
the underutilized site of Roseo Mito, a property owned by KRR. KRR expects the total construction cost for thesecondhand shop building to be 371 million yen and plans to complete the construction by late November 2015.
(C)Financing
KRR borrowed funds for the acquisition on October 2, 2015.
SeriesLender

4-A

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Sumitomo Mitsui Trust Bank, Ltd.

4-B

Amount(in thousandsof yen)Interest rate

Repayment
Repayment
Remarksdatemethod(Note 1)
Unsecured/
October 2, October 2, Full on
2015
2016
maturity Unguaranteed

Drawdown
date

2,050,000

JBA 1-month
Japanese Yen
TIBOR+0.50%

3,450,000

0.54510%(Note2)October 2, March 31,
2015
2019

Full on
Unsecured/maturity Unguaranteed

800,000

0.98675%(Note2)October 2, March 31,
2015
2023

Full on
Unsecured/maturity Unguaranteed

1,500,000

1.01262%(Note3)October 2, March 31,
2015
2023

Full on
Unsecured/maturity Unguaranteed

7,000,000

1.11010%(Note2)October 2, March 31,
2015
2024

Full on
Unsecured/maturity Unguaranteed

1,900,000

1.24300%(Note2)October 2,
2015April 16,2025

Full on
Unsecured/maturity Unguaranteed

Resona Bank, Ltd.

4-C

The Musashino Bank,Ltd.
Mitsubishi UFJ Trust and Banking
Corporation
Resona Bank, Ltd.
The Musashino Bank,Ltd.

4-D

4-E

Development Bank of Japan Inc.
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Ltd.

Resona Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
4-F
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
4-G
Sumitomo Mitsui Banking(Note4) Corporation

JBA 1-month
Unsecured/
October 2, October 2, Full on
Japanese Yen
2015
2016
maturity Unguaranteed
TIBOR+0.50%(Note 1) The repayment date will be the following business day in case such date falls on a day that is not a business day or thepreceding business day in case such date falls in the next calendar month.
(Note 2) These borrowings are floating interest rates. However, we have entered into interest rate swap agreements to hedge the risks ofinterest rate volatility. These rates are the interest rates including the effect of the swaps (i.e., fixed interest rates).
(Note 3) These borrowings are fixed interest rates.
(Note 4) As for Series 4-G, amount outstanding as of October 30, 2015 is 2,450 million yen as it was prepaid by 1,200 million yen on
October 30, 2015. The repayment of Series 4-G was funded by net proceeds from the sale of new investment units through athird-party allotment with a October 21, 2015 payment date and cash on hands.
3,650,000

10Kenedix Retail REIT Corporation (3453)

ii) Forecasts of Operating Results (Earnings)
For the fiscal period ending March 31, 2016 (From October 1, 2015 to March 31, 2016) and the fiscal period ending
September 30, 2016 (From April 1, 2016 to September 30, 2016), the forecasts of financial results are estimated as set
forth below.
Fiscal period ending March 31, 2016
Operating revenues¥5,522 million

Operating Income¥2,769 million

Ordinary income¥2,343 million

Net Income¥2,342 million

Distributions per unit

¥6,605Of the above, distributions in excess of earnings¥13

Fiscal period ending September 30, 2016
Operating revenues¥5,577 million

Operating Income¥2,385 million

Ordinary income¥1,969 million

Net Income¥1,968 million

Distributions per unit

¥5,555Of the above, distributions in excess of earnings¥15

Please refer to “Assumptions for the Forecasts of Financial Results for the Fiscal Periods Ending March 31, 2016 and
September 30, 2016” set forth below for information on current assumptions for the forecasts of operating results.
After the end of the first fiscal period, KRR issued new units, made new borrowings and acquired properties.
Accordingly, KRR has updated the “Forecasts of Financial Results and Distributions for the Fiscal Periods Ending
September 30, 2015 and March 31, 2016, and the Forcast of Financial Results and Distributions for the Fiscal PeriodEnding September 30, 2016” released on August 27, 2015, but there are no changes in the forecast figures.
(Note) The above forecasts are based on certain assumptions for calculation, and our judgment as oftoday. Actual operating
revenues, operating income, ordinary income, net income, distributions per unit and distributions in excess of earnings
per unit may vary due to changes in market conditions. These forecasts do not guarantee the distribution amount.

Assumptions for the Forecasts of Financial Results for the Fiscal Periods Ending March 31, 2016 and
September 30, 2016
Item
Calculation period

Property portfolio

Operating revenues

Operating Expenses

Assumptions
・The 2nd fiscal period: October 1, 2015 to March 31, 2016 (183 days)
・The 3rd fiscal period: April 1, 2016 to September 30, 2016 (183 days)
・It is assumed that there will be no changes (any acquisition of new properties or any sale ofexisting properties, etc.) in property portfolio of 32 assets, which are 19 existing assets (the“existing assets”) and 13 assets acquired on October 2, 2015 (the “assets acquired in thesecond fiscal period”), by the end of the fiscal period ending September 30, 2016.
・The actual property portfolio may change due to the acquisition of new properties other thanassets acquired in the second fiscal period or the disposal of owned properties, etc.
・Operating revenues of the existing assets are based on leasing agreements as of September 30,
2015, trend of tenants, real estate market trends and other factors.
・Operating revenues of the assets acquired in the second fiscal period are based on its operating
revenues calculated by the information provided by the sellers, leasing agreements as of
September 30, 2015, trend of tenants, real estate market trends and other factors.
・Operating revenues are based on the assumption that there will be no rent in arrears or nonpayments by the tenant.
・Property-related operating expenses other than depreciation are calculated based on historic
data, etc. and these costs reflect fluctuations in the costs, including leasing costs based on theleasing agreements.
・Depreciation expenses of 555 million yen, and 566 million yen are assumed for the fiscal
periods ending March 31, 2016 and September 30, 2016 respectively, using the straight-line
depreciation method.
・When a property is sold, the purchaser of the property typically reimburses the seller, pursuant
to the purchase agreement, for the pro rata portion of the property-related taxes that relates tothe period from the acquisition date to the end of the calendar year in which the acquisition
occurs. As is customary for property transactions in Japan and in accordance with Japanese
GAAP, KRR intends to capitalize the portions of the real estate taxes on the assets acquired,and not expensed in the fiscal period ending September 30, 2015, when the acquisition occurs.
In addition, they are not expensed in the fiscal period ending March 31, 2016 because theamount to be expensed for such costs may not be decided by March 31, 2016. Accordingly,
11Kenedix Retail REIT Corporation (3453)

Item

Assumptions
such costs for the existing assets and the assets acquired in the second fiscal period are notexpensed for the fiscal periods ending March 31, 2016. 478 million yen of property related tax
is expected to be expensed in the fiscal period ending September 30, 2016.
・With respect to building repair expenses, the amount assumed to be necessary for each
property is based on the repair plan of KFM for each fiscal period. However, repair expenses
may be substantially different from the expected amount due to certain unexpected factors.

・The offering-related costs will be amortized using the straight-line method over 3years.
Together with the amortization of initial start-up costs, the related costs are assumed to be 61
million yen and 61 million yen for the fiscal periods ending March 31, 2016, and September
Non-operating expenses
30, 2016, respectively.
・For interest expenses and other debt-related costs, 335 million yen and 334 million yen are
expected for the fiscal periods ending March 31, 2016, and September 30, 2016, respectively.
・As of today, We have outstanding balance of 57,500 million yen in borrowings.
・The LTV ratio is expected to be 42.8% and 42.9% at the end of the period ending March 31,
2016 and September 30, 2016, respectively. (rounded to the nearest tenth)Borrowings
・The LTV ratio has been calculated according to the following formula:
LTV ratio =(Borrowings + Corporate bonds + Tenant leasehold and security deposits Amounts reserved for return of tenant leasehold and security deposits) / (Total assets Amounts reserved for return of tenant leasehold and security deposits)
・The forecasts are based on our assumption of 355,250 units issued as of today. It is assumed
Investment units
that there will be no changes in the number of investment units due to the new issuance ofunits until the end of the fiscal period ending September 30, 2016.
・Distributions per unit (excluding excess of earnings per unit) are calculated in accordance withDistributions per unit
the distribution policy outlined in our Articles of Incorporation.
(excluding excess
・Actual distributions per unit (excluding excess of earnings per unit) may fluctuate due toofearnings per unit)
various factors including movements in investment assets, fluctuations in rental revenues
caused by tenant replacements, or unexpected repairs.
・We expects to record Allowance for Temporary Adjustment (ATA) to adjust the temporary
differences between treatment of certain transactions under Japanese GAAP and Japanese tax
laws in relation to Sunny Noma, which results from the depreciation of fixed term land lease
Distributions in excess ofright for business purposes, the expensed interest from asset retirement obligations andearnings per unit
deprecation of buildings, during the relevant period (30 years starting from March 16, 2007).
・KRR has a policy to distribute the amount of increase in ATA, in excess of its earnings.
Distributions in excess of earnings is expected to be 13 yen per unit and 15 yen per unit in the
periods ending March 31, 2016 and September 30, 2016, respectively.
・Forecasts are based on the assumption that there will be no amendments to the law, taxation
system, accounting standards, public listing regulations, requirements of the Investment Trusts
Other
Association, Japan, etc. that may affect the aforementioned forecast figures.
・Forecasts are based on the assumption that there will be no unexpected. Significant changes ingeneral economic trends and real estate market trends or other conditions.

iii) Risk Factors
There are no significant changes to the “Investment Risks” in described in the Securities Registration Statement(submitted on August 27, 2015; prepared in Japanese only), the disclosure is omitted.

12Kenedix Retail REIT Corporation (3453)

3. Financial Statements(1) Balance Sheet(in thousands of yen)
Reporting Period(As of September 30, 2015)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Construction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets
Leasehold right in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Long-term deposits
Total investments and other assets
Total non-current assets
Deferred assets
Deferred organization expenses
Investment unit issuance costs
Total deferred assets
Total assets

3,950,551
7,829,874
163,767
16,7632,071,748
10,783
14,043,489

*1

*1

*1

96,74525,766,439(518,285)
25,248,154
1,118,727(35,074)
1,083,653
29,194(869)
28,324
26,211(1,231)
24,97966,910,436
12,02593,404,319
171,078
2,445
173,523
10,0005,320
418,520
124,960
558,800
94,136,642
40,501
161,506
202,008
108,382,141

13

Kenedix Retail REIT Corporation (3453)(in thousands of yen)
Reporting Period(As of September 30, 2015)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Surplus
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets

330,055
2,000,000
257,8543,412
6,321
518,706
359,954
3,476,305*1

36,350,000
20,0008,722,663
22,901
45,115,565
48,591,870

57,857,000*2

141,933,270
1,933,270
59,790,270
59,790,270
108,382,141

Kenedix Retail REIT Corporation (3453)(2) Statement of Income and Retained Earnings(in thousands of yen)
Reporting Period(From October 3, 2014
to September 30, 2015)
Operating revenues
Rent revenue-real estate
Other lease business revenue
Total operating revenues
Operating expenses
Expenses related to rent business
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Total non-operating income
Non-operating expenses
Interest expenses
Financing-related expenses
Amortization of deferred organization expenses
Amortization of investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Current
Total income taxes
Net income
Unappropriated retained earnings*1*1

4,128,035
975,033
5,103,069*1

2,246,179
313,5775,761
20,258
8,931
45,112
2,639,820
2,463,248
1,071
1,071
208,576
262,279
10,04943,605524,510
1,939,809
1,939,809
6,539
6,539
1,933,270
1,933,270

15

Kenedix Retail REIT Corporation (3453)(3) Statement of Changes in Net Assets
Reporting Period (From October 3, 2014 to September 30, 2015)(in thousands of yen)
Unitholders' equity
Surplus
Total net assets

Unitholders'
capitalBalance at the beginning of
the period
Changes of items during theperiodIssuance of new investment
units
Net income
Total changes of items during
the period
Balance at the end of theperiodUnappropriatedretained earnings

－

Total
unitholders'equityTotal
surplus－－57,857,000

*1

－

－

57,857,000

57,857,000

1,933,270

1,933,270

1,933,270

1,933,270

57,857,000

1,933,270

1,933,270

59,790,270

59,790,270

57,857,000

1,933,270

1,933,270

59,790,270

59,790,270

16Kenedix Retail REIT Corporation (3453)(4) Statement of Cash Distributions(yen)
Reporting Period(From October 3, 2014 to September 30, 2015)
I.

Retained earnings at the end of period

1,933,270,617

II.

Total distributions

1,933,200,500(Distribution per unit)
Retained earnings brought forward to
the next period
Method of calculating distribution amount(7,414)

III.

70,117
In accordance with the policy described in
Article 39-1 of its Articles of Incorporation,
KRR determines that the amount of
distribution shall exceed the amountequivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special
Taxation Measures Law, and shall be up to its
profits as the maximum amount. Following
this policy, KRR has decided that it shall
distribute ¥1,933,200,500 which is the
maximum integral multiple of 260,750 units
issued and outstanding as the distribution of
earnings. Procedures for the distribution ofamounts exceeding distributable income are
outlined in Article 39-2 of KRR’s Articles ofIncorporation. In the first fiscal period, KRR
has decided not to distribute cash in excess of
distributable profit.

17

Kenedix Retail REIT Corporation (3453)(5) Statement of Cash Flows(in thousands of yen)
Reporting Period(From October 3, 2014
to September 30, 2015)
Net cash provided by (used in) operating activities
Income before income taxes

1,939,809

Depreciation and amortization

561,321

Amortization of deferred organization expenses

10,049Amortization of investment unit issuance costs

43,605Interest income(1,071)

Interest expenses

208,576

Decrease (increase) in operating accounts receivable(163,767)

Decrease (increase) in consumption taxes refund receivable(2,071,748)

Decrease (increase) in prepaid expenses(16,763)

Increase (decrease) in operating accounts payable

304,096

Increase (decrease) in accounts payable-other257,854

Increase (decrease) in advances received

518,706

Increase (decrease) in deposits received

359,954

Decrease (increase) in long-term prepaid expenses(418,520)

Decrease (increase) in long-term deposits(124,960)

Payments of deferred organization expenses(50,551)

Subtotal

1,356,591

Interest income received

1,071Interest expenses paid

(205,164)

Income taxes paid

(217)

Net cash provided by (used in) operating activities

1,152,280

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment(96,745)

Purchase of property, plant and equipment in trust(93,814,364)

Purchase of intangible assets(2,809)Purchase of intangible assets in trust(176,383)

Payments for lease and guarantee deposits(10,000)

Payments for lease and guarantee deposits in trust(5,320)

Proceeds of tenant leasehold and security deposits

20,000

Repayments of tenant leasehold and security deposits in trust(393,751)

Proceeds from tenant leasehold and security deposits in trust

9,116,415

Payments of restricted bank deposits in trust(3,917,992)

Proceeds from restricted bank deposits in trust

287,569

Net cash provided by (used in) investing activities(88,993,382)

Net cash provided by (used in) financing activities
Increase in short-term loans payable

10,222,500

Decrease in short-term loans payable(8,222,500)

Proceeds from long-term loans payable

36,350,000

Proceeds from issuance of investment units

57,651,888

Other(10,783)

Net cash provided by (used in) financing activities

95,991,104

Net increase (decrease) in cash and cash equivalents

8,150,002

Cash and cash equivalents at the beginning of period－

Cash and cash equivalents at the end of period

8,150,002*1

18

Kenedix Retail REIT Corporation (3453)（6）Notes on Assumption of Going Concern
Not applicable（7）Summary of Significant Accounting Policies
1.Method of depreciation of
non-current assets(1) Property, plant and equipment (including trust assets)
The straight-line method is applied.
Useful lives of the assets ranging are as follows:
Buildings: 2 to 64 years
Structures: 8 to 59 years
Machinery and equipment: 10 to 25 years
Tools, furniture and fixtures: 5 to 10 years(2) Intangible assets (including trust assets)
The straight-line method is applied.
(3) Long-term prepaid expenses
The straight-line method is applied.

2. Accounting for deferredassets(1) Deferred organization expenses
Deferred organization expenses are amortized over a period of 5 years under the straight-line method.
(2) Unit issuance costs
Unit issuance costs are amortized over a period of 3 years under the straight-line method.

3. Accounting for revenues andexpenses

Accounting for property-related taxes
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on
properties on 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 the calendar year in which the property is
disposed. The seller, however, is reimbursed by the purchaser for these accrued property-related tax liabilities.
When KRR purchases properties, it typically allocates the portion of the property-related taxes related to the period
following the purchase date of each property through the end of the calendar year. The amounts of those allocatedportions of the property-related taxes are capitalized as part of the acquisition costs of the related properties.
Capitalized property-related taxes amounted to ¥600,480 thousand as of September 30, 2015.

4. Method of hedge accounting(1) Hedge accounting method
Deferral hedge accounting is applied. However, the special treatment is applied for the interest-rate swap
agreements that meet the criteria for special treatment.
(2) Hedging instruments and hedged items
Hedge instruments
Interest-rate swap transactions
Hedged items
Interest payments on debts(3) Hedging policy
KRR enters into derivative transactions based on its risk management policies with the objective of hedging
risks provided in its Articles of Incorporation.
(4) Method of assessing the effectiveness of hedging
The assessment of hedge effectiveness is omitted since the interest rate swaps satisfy the requirements for
special treatment.

5. Scope of cash and cash
equivalents on statement ofcash flows

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

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

19Kenedix Retail REIT Corporation (3453)(8) Notes to Financial Statements(Notes to Balance Sheet)* 1. Assets pledged as collateral and relevant secured liabilities:(in thousands of yen)
Reporting Period
As of September 30, 2015

Assets pledged as collateral
Buildings in trust

2,475,636

Structures in trust

48,748Land in trust

6,595,863
Total

9,120,248

Secured liabilities

Reporting Period
As of September 30, 2015

Tenant leasehold and security deposits in trust

3,630,423

Total

3,630,423* 2. Minimum net assets prescribed in Article 67-4 of the Investment Trust Act(in thousands of yen)
Reporting Period
As of September 30, 2015
50,000(Notes to Statement of Income and Retained Earnings)* 1. Breakdown of real estate rental revenues and expenses(in thousands of yen)
Reporting Period
From October 3, 2014
to September 30, 2015
A. Rental and other operating revenues:
Rent revenue-real estate:
Rental revenues

3,643,804

Rental revenues from limited proprietary rights of land

220,680

Common area charges

263,549

Subtotal

4,128,035

Other lease business revenue:
Parking space rental revenues

126,629

Utility charge reimbursement

500,044

Miscellaneous

348,360

Subtotal

975,033

Total rental and other operating revenues

5,103,069

B. Property-related expenses:
Expenses related to rent business:
Property management fees and facility management fees

655,263

Utilities

548,099

Taxes

1,280

Repairs and maintenance

144,732

Insurance

9,662

Trust fees

12,214

Depreciation

560,957

Others313,968

Total property-related expenses

2,246,179

C. Net operating income from real estate rental business（A-B）

2,856,889

20

Kenedix Retail REIT Corporation (3453)(Notes to Statement of Changes in Net Assets)* 1. Total number of authorized investment units and total number of investment units issued and outstanding
Reporting Period
From October 3, 2014
to September 30, 2015
Total number of authorized investment units

5,000,000 units

Total number of investment units issued and outstanding

260,750 units(Notes to Statement of Cash Flows)* 1. Reconciliation of balance sheet items to cash and cash equivalents at the end of reporting period(in thousands of yen)
Reporting Period
As of September 30, 2015
Cash and deposits

3,950,551

Cash and deposits in trust

7,829,874

Restricted bank deposits in trust (Note)(3,630,423)

Cash and cash equivalents

8,150,002

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

(Notes to Lease Transactions)Operating lease transactions (Lessee)
Future minimum lease payments(in thousands of yen)
Reporting Period
As of September 30, 2015
Due in 1 year

10,500Due after 1 year

214,798

Total

225,298

Operating lease transactions (Lessor)
Future minimum lease income(in thousands of yen)
Reporting Period
As of September 30, 2015
Due in 1 year

2,080,978Due after 1 year

17,941,367

Total

20,022,345

21

Kenedix Retail REIT Corporation (3453)（Notes to the Financial Instruments）
1. Matters regarding status of financial instruments(1) Policy for financial instruments
KRR procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans from financial institutions,issuance of investment units and other means. With regard to the procurement of interest-bearing debts, KRR ensures that it can effectively combine
stable long-term funds with flexible short-term funds. Management of surplus funds is undertaken through various bank deposits focusing on safety,
liquidity and effectiveness. KRR uses derivatives for the purpose of hedging its exposure to changes in interest rates and other risks and does not enter
into derivative transactions for speculative or trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing KRR’s surplus funds and are exposed to credit risk such as the bankruptcy of financial institutions at which funds aredeposited.
Borrowings, which are made primarily for the purpose of procuring funds for the acquisition of real estate and trust beneficiary interests in real estateand have a repayment date of a maximum of 9 years and 7 months as of September 30, 2015, the end of the first 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 to interest rate
fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk for a certain portion of the borrowings.
Tenant leasehold and security deposits are deposits received from tenants, which are exposed to liquidity risks when the tenants vacate the properties.
(3) Risk management for financial instrumentsa.
Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored bydeposits in non-interest bearing ordinary savings accounts or with financial institutions with credit ratings above a certain level. In utilizing derivatives,
KRR aims to mitigate counterparty risk such as by 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 conducted based on this policy.
c.
Liquidity risk
Though borrowings are subject to liquidity risk, KRR reduces such risk by spreading out payment due dates and by diversifying financial institutions.
Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.
Though tenant leasehold and security deposits are subject to liquidity risk, in principle, KRR reduces such risk by retaining funds that would

enable KRR to return necessary amounts to tenants.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value isreasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result ina different fair value.
2. Matters regarding fair value, etc. of financial instruments
The carrying value of financial instruments on balance sheet and estimated fair value are shown in the following table. Items whose fair values arerecognized to be extremely difficult to grasp are not included in the following table (Note 2).
Reporting Period
As of September 30, 2015
Carrying amount
Estimated fair value(1) Cash and deposits
3,950,551
3,950,551(2) Cash and deposits in trust
7,829,874
7,829,874
Total
11,780,426
11,780,426(1) Short-term loans payable
2,000,000
2,000,000(2) Long-term loans payable
36,350,000
35,739,489(3) Tenant leasehold and security deposits in trust
3,344,264
3,376,087
Total
41,694,264
41,115,576
Derivative transactions－－
Note1:Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying amount approximates fair value.

(in thousands of yen)
Difference－－－－(610,510)
31,823(578,687)－

Liabilities(1) Short-term loans payable
Since these items are settled in a short period of time with floating interest rates, their carrying amount approximates fair value.
(2) Long-term loans payable
Among these items, the fair value of loans payable with fixed interest rates is calculated based on the present value, which is the total amount ofprincipal and interest discounted by the estimated interest rate to be applied in the event that KRR conducts new loans of the same type. As for the fairvalue of loans payable with floating interest rates, it is based on the carrying amount since market interest rates are reflected in the short term and thefair value is believed to approximate the carrying amount as the credit standing of KRR has not changed significantly since the loans were made.
(However, the fair value of long-term loans payable subject to the special treatment for interest-rate swaps is based on the present value of the total ofprincipal and interest, accounted for together with the applicable interest-rate swaps, discounted by the estimated interest rate to be applied in the eventthat KRR conducts new loans of the same type.)(3) Tenant leasehold and security deposits in trust
The fair value is determined based on the present value of contractual cash flows discounted at the discount rate into which the period to the repayment
date and the credit risk are reflected.

22

Kenedix Retail REIT Corporation (3453)

Derivative transactions
Please refer to “Notes to Derivative Transactions”.
Note2: Financial instruments whose fair values are difficult to determine(in thousands of yen)
Reporting Period
Classification
As of September 30, 2015
Tenant leasehold and security deposits
20,000Tenant leasehold and security deposits in trust

5,378,399

Total
5,398,399
The above are not publicly traded, and it is difficult to determine their fair value based on estimated future cash flows because the repayment dates of
those deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
Note 3: Redemption of monetary claims scheduled to be due after the balance sheet date
Reporting Period
As of September 30, 2015

Cash and deposits
Cash and deposits in trust
Total

Due in 1 year or
less

Due after 1 year
through 2 years

3,950,551
7,829,874
11,780,426－－－

Due after 2
years through 3
years
－
－
－

Due after 3
years through 4
years
－
－
－

(in thousands of yen)
Due after 4
Due after 5
years through 5
years
years
－
－
－
－
－
－

Note 4: Redemption of long-term loans payable and other interest-bearing debt scheduled to be due after the balance sheet date
Reporting Period
As of September 30, 2015

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

Due after 2
years through 3
years－
3,850,000

Due after 3
years through 4
years－
2,200,000(in thousands of yen)
Due after 4
Due after 5
years through 5
years
years
－
－
7,000,000
23,300,000

Due in 1 year or
less

Due after 1 year
through 2 years

2,000,000－－－

421,435

421,435

421,435

421,435

421,435

842,870

2,421,435

421,435

4,271,435

2,621,435

7,421,435

24,142,870

23Kenedix Retail REIT Corporation (3453)(Notes to Derivative Transactions)(1) Transactions not subject to hedge accounting
Reporting Period (As of September 30, 2015): Not applicable(2) Transactions subject to hedge accounting
Reporting Period
As of September 30, 2015
Hedge
accounting
methodType of derivativetransactions

Hedged items

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

SpecialInterest rate swap
treatment oftransaction:
Long-term loans
31,750,000
31,750,000*－
interest-rate
Receive/floating
payableswaps
and pay/fixed*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value isincluded in the fair value of the hedged long-term loans payable. (Please refer to “Notes to Financial Instruments (Note1) Methods to determine theestimated fair value of financial instruments and matters related to derivative transactions Liabilities (2) Long-term loans payable”.)(Notes to the Related-Party Transactions)
1．Parent Company, major corporate unitholders and other
Reporting Period (October 3, 2014 to September 30, 2015): Not applicable
2．Affiliated companies and other
Reporting Period (October 3, 2014 to September 30, 2015): Not applicable
3．Fellow subsidiary companies and other
Reporting Period (October 3, 2014 to September 30, 2015): Not applicable
4．Directors, major individual unitholders and other
Reporting Period (October 3, 2014 to September 30, 2015): Not applicable(Notes to the Tax-Effect Accounting)
1. The significant components of deferred tax assets and liabilities:(in thousands of yen)
Reporting Period
As of September 30, 2015
Deferred tax assets:
Enterprise tax payable

360

Amortization of leasehold right in trust

1,713

Depreciation
Asset retirement obligations

391
7,399

Subtotal deferred tax assets

9,866

Valuation allowance(9,866)

Total deferred tax assets－

2. The significant differences between the statutory tax rate and the effective tax rate:(unit: %)Reporting Period
As of September 30, 2015
37.11

Statutory tax rate
Deductible cash distributions
Others(36.98)0.21

Effective tax rate

0.34

(Notes to Asset Retirement Obligations)
Asset retirement obligations reported on balance sheet
1. Summary of the asset retirement obligations
KRR has booked asset retirement obligations as it has original state restoration obligations in the fixed-term business-purpose land leasehold agreement
accompanying regarding Sunny Noma acquired on February 10, 2015.
2. Method of calculating asset retirement obligations
Asset retirement obligations are calculated based on a discount rate of 1.256% and with the period of use from the date of acquisition to the completionof the agreement of 22 years and two months.
3. Changes in the amount of applicable asset retirement obligations consisted of the following(in thousands of yen)
Reporting Period
From October 3, 2014
to September 30, 2015
Balance at the beginning of the period－
Increase due to acquisition of properties
22,711
Adjustment for passage of time
190
Balance at the end of the period
22,90124

Kenedix Retail REIT Corporation (3453)(Notes to the Segment Information)(Segment information)
Disclosure is omitted because the real estate leasing business is KRR’s sole business and it has no reportable segment subject to disclose.
(Related information)
Reporting Period (From October 3, 2014 to September 30, 2015)
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 thestatement of income and retained earnings.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income andretained earnings.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant andequipment 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 andretained earnings.

(Notes to Investment and Rental Properties)
KRR owns retail properties for rental purposes mainly in the four major metropolitan areas and other regional areas.
The book value and fair value concerning the above real estate for rental purposes are as follows.
(in thousands of yen)
Reporting Period
From October 3, 2014
to September 30, 2015
Book value－

Balance at the beginning of the period
Changes during the period
Balance at the end of the period

93,575,397
93,575,397

Fair value at the end of the period
95,706,000
Note 1: Book value is acquisition cost less accumulated depreciation.
Note 2:Among changes in the amount of real estate for rental purposes that occurred during the reporting period, principal increases were the acquisitionof real estate trust beneficiary interests in 19 properties totaling ¥93,873,555 thousand and the principal decrease was depreciation amounting to¥560,766 thousand.
Note 3: The fair value at the end of the period is the appraisal value determined by outside appraisers.
The profit or loss for the period under review concerning investment and rental properties is indicated under “Notes to Statement of Income and Retained
Earnings.”(Notes to Per Unit Information)
Reporting Period
From October 3, 2014
to September 30, 2015
Net asset value per unit

¥229,301

Net income per unit

¥11,515(¥7,434)

Note1: Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during the period(167,878 units). The figure in brackets shows net income per unit based on the day-weighted average number of investment units outstanding
during the period (260,034 units) assuming the beginning date of the fiscal period is February 10, 2015, the day that the asset management actually
started.
Note2: The basis for calculating net income per unit is as follows:
Reporting Period
From October 3, 2014
to September 30, 2015
Net income (in thousands of yen)

1,933,270－

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

1,933,270

Weighted average number of units during the period (units)

167,87825

Kenedix Retail REIT Corporation (3453)(Notes to Significant Subsequent Events)
Issuance of new investment units
KRR passed resolutions at the Board of Directors Meeting held on August 27, 2015 and September 15, 2015, to issue new investment units to fund theacquisition of specified assets. Payments for the issuance of new investment units through public offering and through third-party allotment have been
completed on October 1, 2015 and October 21, 2015, respectively. KRR used the net proceeds through third-party allotment for the partial repayment,
1,200,000 thousand yen, of short-term borrowings.
As a result, unitholders' capital totaled 77,606,649,500 yen and total number of investment units issued and outstanding increased to 355,250 as of October
21, 2015.
Issuance of new investment units through public offerings
Total number of units issued
88,750 units (Domestic 50,950 units, International 37,800 units)
Issue price (offer price)
216,543 yen per unit
Total amount of issue price (total offer price)
19,218,191,250 yen
Paid-in amount (issue amount)
208,991 yen per unit
Total paid-in amount (total issue amount)
18,547,951,250 yen
Payment date
October 1, 2015
Issuance of new investment units through third-party allotment
Total number of units issued
5,750 units
Paid-in amount (issue amount)
208,991 yen per unit
Total paid-in amount (total issue amount)
1,201,698,250 yen
Payment date
October 21, 2015
Allottee
SMBC Nikko Securities Inc.

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

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

Private placement forincorporation

February 9, 2015

Public offering

750

750

150

150

(Note 1)

254,250

255,000

56,43056,580(Note 2)

Capital increase
through third-party
5,750
260,750
1,276
57,857(Note 3)
allocation(Note 1) Issued at issue price of 200,000 yen per unit for incorporation.
(Note 2) Issued at issue price of 230,000 yen per unit (issue amount of 221,950 yen per unit) for acquisition of new properties.
(Note 3) Issued at issue amount of 221,950 yen per unit for repayment of borrowings.
March 11, 201526

Kenedix Retail REIT Corporation (3453)

4. Resignation/Appointment of the Directors(1) Resignation/Appointment of the Director of the Investment Corporation
Not applicable(2) Resignation/Appointment of the Director of the Asset Management Company
Not applicable27

Kenedix Retail REIT Corporation (3453)

5. Reference Information(1) Component of Assets

Type ofSpecified AssetFirst fiscal period
as of September 30, 2015
Total Amount
Held
Ratio
(Millions(%)
of Yen)(Note 3)(Note 2)

Areas
(Note 1)

Property type

Tokyo metropolitan
area

49,405

45.6

Greater Osaka area

24,89823.0

Greater Nagoya area

5,458

5.0

Fukuoka area

1,527

1.4

Tokureishi and otherareas

12,188

11.2－－

Total of Trust Beneficiary Interests in Real Estate

93,478

86.2

Bank Deposits and Other Assets

14,903

13.8

Total Assets

108,382

100.0

Trust BeneficiaryInterest in Real Estate

Neighborhood,community and othershopping centers fordaily needs

Other retail properties－

First fiscal period
as of September 30, 2015
Amount(Millions of Yen)

Ratio
(%)
(Note 3)

Total Liabilities (Note 4)

48,591

44.8

Total Net Assets (Note 4)

59,79055.2

108,382

100.0

Total Assets

Note1: “Areas” are categorized to the Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area andTokureishi and other areas. References to “Tokyo metropolitan area” are to the area that consists of Tokyo, Kanagawa, Saitama
and Chiba prefectures. References to the “Greater Osaka area” are to the area that consists of Osaka, Kyoto, Hyogo, Nara andShiga prefectures. References to the “Greater Nagoya area” are to the area that consists of Aichi, Gifu and Mie prefectures.
References to the “Fukuoka area” are to the area that consists of Fukuoka prefecture. “Tokureishi and other areas” refers to cities
designated by government ordinance, which have a population of 200,000 persons or more, and to other area with a population of
fewer than 200,000 persons, which we believe will have suitable customer traffic from surrounding area.
Note2: “Total Amount Held” is the amount allocated in the balance sheets as of September 30, 2015 (figures are on a net book value basis
after deducting depreciation), and is rounded down to the nearest million.
Note3: “Ratio” is the ratio of the amount allocated in the balance sheets to the total assets rounded to the nearest tenth.
Note4: “Total Liabilities” and “Total Net Assets” are those on the balance sheets.

28

Kenedix Retail REIT Corporation (3453)(2) Overview of the Portfolioi) Overview of Assets Owned
The following summarizes the real estate or the real estate properties in trust owned by KRR as of September 30, 2015.
Evaluation
Location
Share
value
Acquisition (%)
Property Property(City or Ward,
Ownership
Book value
type
Property
name
(in
price
numberPrefecure)form(in millions)(Note(Note 1)
millions) (in millions) 4)(Note 2)
(Note 3)FululuGardenTrustbeneficiary
T-1
CSC
Yachiyo, Chiba
15,048
15,10014,848 16.2
Yachiyointerest in real estate
Urban
MONA ShinTrust beneficiaryT-2 Station-Front Urayasu
Urayasu, Chiba
8,223
8,360
8,063
8.8
interest in real estate
SC
Urban
Adachi ward,
Trust beneficiaryT-3 Station-Front Passaggio Nishiarai
5,964
6,200
5,850
6.4
Tokyo
interest in real estateSC
Urban
Daikanyama
Shibuya ward,
Trust beneficiaryT-4 Station-Front Address
5,454
5,450
5,390
5.9
Tokyo
interest in real estate
SC
Dixsept
Kitaadachi-gun,Trust beneficiary
T-5
NSC
Unicus Ina
4,411
4,430
4,379
4.8
Saitamainterest in real estate
T-6

NSC

Yorktown KitaKaname

Hiratsuka,
Kanagawa

Trust beneficiaryinterest in real estate

4,038

4,220

4,000

4.4

T-7

NSC

Unicus Yoshikawa

Yoshikawa,
SaitamaTrust beneficiaryinterest in real estate

3,657

3,690

3,600

3.9

T-8

SS

Sports Club
Renaissance
Fujimidai

Nerima ward,Tokyo

Trust beneficiaryinterest in real estate

2,607

2,640

2,586

2.8

O-1

NSC

Blumer Maitamon

Kobe, Hyogo

Trust beneficiaryinterest in real estate

8,498

8,820

8,389

9.1

O-2

SM

Osaka, Osaka

Trust beneficiaryinterest in real estate

2,727

2,870

2,685

2.9

O-3

NSC

Central Square
Takadono (Land)
Piago Kahma Home
CenterOmihachiman

Omihachiman,
Shiga

Trust beneficiaryinterest in real estate

2,178

2,390

2,140

2.3

O-4

NSC

Blumer HAT Kobe

Kobe, Hyogo

Trust beneficiaryinterest in real estate

11,494

11,60011,000

12.0

N-1

SS

Nagoya, Aichi

Trust beneficiaryinterest in real estate

2,351

2,500

2,311

2.5

N-2

NSC

Ichinomiya, Aichi

Trust beneficiaryinterest in real estate

2,199

2,200

2,174

2.4

N-3

SS

Nagoya, Aichi

Trust beneficiaryinterest in real estate

907

945

889

1.0

F-1

SM

Sunny Noma

Trust beneficiary
Fukuoka, Fukuoka interest in real estate

1,527

1,500

1,497

1.6

R-1

NSC

Roseo Mito

Mito, Ibaraki

Trust beneficiaryinterest in real estate

9,871

10,300

9,675

10.5

R-2

SS

K’s Denki Aomori
HontenAomori, Aomori

Trust beneficiaryinterest in real estate

1,499

1,590

1,469

1.6

R-3

SS

Super Sports Xebio
Aomori-Chuo

Aomori, Aomori

Trust beneficiaryinterest in real estate

913

901

898

1.0

93,57595,706

Kahma Home
CenterNakagawa Tomita(Land)
Valor IchinomiyaNishi
K’s Denki
Nakagawa Tomita(Land)

Total

91,843 100.0

Note1: Properties are categorized into the following five types of retail properties for daily needs: NSC (Neighborhood Shopping Center),SM (Supermarket), CSC (Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center) and SS(Specialty Store). For the details of each type of retail properties, please refer “Section 2.Investment Policies and Status of AssetManagement, (2) Status of Asset Management (Overview of the Period), iii) Management Performance, (A) Acquisition of Assets”.
Note2:“Location” indicates the residential address. For those without a residential address, the building or land address on the registry(one of the addresses for those that have multiple addresses) is shown.
Note3: “Evaluation value” shows the appraisal value stated on the real estate appraisal report created by the real estate appraisers of
Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute and The Tanizawa Sōgō Appraisal Co., Ltd. in accordance withthe methods and standards for asset valuation as stipulated in the KRR Articles of Incorporation as well as the regulations as
stipulated by The Investment Trusts Association, Japan.
Note4:“Share” represents the percentage of the acquisition price for each property in the total acquisition price, rounded to the nearest
tenth.

29

Kenedix Retail REIT Corporation (3453)

ii) Overview of tenants as of September 30, 2015
The following summarizes leasable area, leased area, occupancy rate, number of tenants, annual rent, and amount of security deposits
Amount ofOccupancy Number
Leasable area
Leased area
Annual rent
security
Property
rateofProperty name
(m2)
(m2)
(Thousand)deposits
number(%)
tenants(Note 1)
(Note 2)
(Note 5)(millions)(Note 3) (Note 4)(Note 6)
T-1

Fululu Garden Yachiyo

77,057.56

76,707.48

99.5

49

1,085,412

4,024

T-2

MONA Shin-Urayasu

9,568.31

9,376.34

98.0

1(72)

602,706

621

T-3

Passaggio Nishiarai

10,546.25

10,366.25

98.3

1(40)

401,353

235

T-4

Daikanyama Address Dixsept

5,056.39

4,748.56

93.9

1(26)

343,241315

T-5

Unicus Ina

13,044.37

13,044.37

100.0

1

263,472

136

T-6

Yorktown Kita-Kaname―(Note 7)―(Note 7)

100.0

1

―
(Note 7)

T-7

Unicus Yoshikawa

10,620.04

10,620.04

100.0

1(11)

260,485

T-8

Sports Club
Renaissance Fujimidai

3,120.87

3,120.87

100.0

1

―
(Note 7)O-1

Blumer Maitamon

30,037.11

29,888.11

99.5

48

690,772

4,437.07

4,437.07

100.0

114,313.00

14,313.00

100.0

2

O-2
O-3

Central Square
Takadono (Land)
Piago Kahma Home Center
Omihachiman

O-4

Blumer HAT Kobe

24,185.02

24,055.88

99.5

1(41)

N-1

Kahma Home Center
Nakagawa Tomita (Land)―(Note 7)―(Note 7)

100.0

1

N-2

Valor Ichinomiya-Nishi

100.0

1

N-3

K’s Denki
Nakagawa Tomita (Land)

100.0

1

F-1

Sunny Noma

2,814.67

2,814.67

100.0

1

R-1

Roseo Mito

45,654.67

45,654.67

100.0

1(22)

R-2

K’s Denki Aomori Honten

10,083.41

10,083.41

100.0

1

R-3

Super Sports Xebio
Aomori-Chuo―(Note 7)―(Note 7)100.0

1306,225.83

304,917.81

99.6

321

Total

9,447.48

9,447.48―(Note 7)―(Note 7)―(Note 7)―(Note 7)
667,593―(Note 7)―(Note 7)―(Note 7)―(Note 7)652,967―(Note 7)―(Note 7)
6,299,105―(Note 7)201―
(Note 7)420―
(Note 7)―(Note 7)832―
(Note 7)―(Note 7)―(Note 7)―(Note 7)421
174―
(Note 7)
8,722

Note 1: “Leasable area” is equivalent to gross floor area of space that we consider to be available for lease in each property, rounded to
the nearest tenth. For land-only properties, leasable area is equivalent to land area as described in the property registry. The
construction site within Roseo Mito is excluded from leasable area.
Note 2: “Leased area” indicates the total leased area based on the lease agreements for each property as of September 30, 2015. As forlease agreements of buildings, the leased area of warehouses and land are excluded. As for pass-through type master leases (themaster lease in which rent received by the lessor is in principle the same amount as the rent received by the master lessee fromend-tenants), the leased area based on the lease agreements between the master lessee and the end-tenants as of September 30,
2015 is shown. As for sublease type master leases (the master lease in which a fixed amount of rent is received from the master
lessee.), the leased area to the master lessee is shown.
Note 3: The occupancy rate is calculated by dividing leased area by leasable area as of September 30, 2015, rounded to the nearest tenth.
The “Total” of “Occupancy rate” represents the average occupancy rate of all properties in the initial portfolio.
Note 4: Number of tenants is based upon the number of lease agreements with respect to the building(s) (or land in the case of land-only
properties with leasehold interest) on each such property used mainly as stores and offices, as of September 30, 2015. Where
one lessee leases more than one section of the property, the lessee is counted as a tenant for each section leased within theproperty. Where pass-through type master lease agreements are entered into, the number of master lessees is with the number ofend-tenants indicated in parentheses. Where sublease type master lease agreements are entered into, the indicated, number ofmaster lessee is shown. The “Total” of “Number of tenants” shows the total number of tenants. As for pass-through type master
leases, the number of end-tenants is used for calculation. As for sublease type master leases, the number of master lessee is used
for calculation.
Note 5: “Annualized fixed rent” is generally calculated by multiplying the monthly fixed rent and common area charges under a leasing

30

Kenedix Retail REIT Corporation (3453)

contract with tenants at portfolio properties as of September 30, 2015 (excluding warehouses in the case of building leaseagreements) by twelve and rounding down to the nearest thousand yen. For master leases, where the master lease company subleases space to other tenants, the fixed monthly rent under the master lease contract is multiplied by 12, rounded down to thenearest thousand yen.
Note 6: “Tenant leasehold and security deposits” indicates the outstanding balance of any tenant leasehold and security deposit from therelevant end-tenant(s) set forth in lease agreement(s) effective as of September 30, 2015 (excluding warehouses in the case ofbuilding lease agreements), rounded to the nearest million yen.
Note 7: We have not obtained consent from the tenant(s) to release this information.

31

Kenedix Retail REIT Corporation (3453)

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

Evaluation
date

Appraisalvalue(in millions) Cost method(in millions)

Direct capitalization
methodDCF method

Appraisal
NOI
Terminal
Estimated Capitalization Estimated(in millions)
Discount rate capitalizatio
value
rate
value
(Note 1)(%)
n
(in millions)(%)(in millions)rate (%)

Appraisal
NOI yield(%)(Note 2)

T-1

FululuGardenYachiyoDaiwa Real
Estate Appraisal
Co., Ltd.

Sep.30,2015

15,10021,10015,2004.8

15,000

4.6

5.0

770

5.2

T-2

MONAShinUrayasu

Japan Real
Estate InstituteSep.30,
2015

8,360

6,790

8,410

5.4

8,310

5.1

5.6

497

6.2

T-3

Passaggio
Nishiarai

Daiwa Real
Estate Appraisal
Co., Ltd.

Sep.30,
2015

6,200

8,830

6,340

4.5

6,140

4.3

4.7

290

5.0

T-4

Daikanyama
Address
Dixsept

Japan Real
Estate InstituteSep.30,
2015

5,450

4,510

5,540

3.9

5,360

3.7

4.1

218

4.1

T-5

Unicus Ina

Japan Real
Estate InstituteSep.30,
2015

4,430

4,050

4,460

5.2

4,390

4.9

5.4

236

5.4

T-6

Yorktown
Kita-Kaname

Sep.30,
2015

4,220

2,620

4,260

5.1

4,200

4.9

5.3

215

5.4

T-7

UnicusYoshikawaSep.30,
2015

3,690

4,900

3,750

4.9

3,660

4.7

5.1

184

5.1

T-8

Sports Club
Renaissance
Fujimidai

Sep.30,
2015

2,640

1,690

2,680

4.8

2,620

4.6

5.0

127

4.9

O-1

BlumerMaitamonSep.30,
2015

8,820

9,470

8,780

5.5

8,830

5.6

5.7

487

5.8

O-2

CentralSquareTakadono(Land)The Tanizawa
Sōgō Appraisal
Co., Ltd.

Sep.30,
2015

2,870

－

－

－

2,870

(year 1-9)
4.4
(year10-20)
4.5(year 21-39.8)
4.6

4.6

128

4.8

O-3

Piago Kahma
Home Center
Omihachiman

Japan Real
Estate InstituteSep.30,
2015

2,390

2,350

2,420

6.5

2,350

6.2

6.7

152

7.1

O-4

Blumer HAT
Kobe

Daiwa Real
Estate Appraisal
Co., Ltd.

Sep.30,2015

11,60014,60011,7005.0

11,600

4.8

5.2

584

5.3

The Tanizawa
Sōgō Appraisal
Co., Ltd.

Sep. 30,
2015

2,500

－

－

－

2,500

(year 1-18)
4.8(year 19-37.7)
4.9

4.9

120

5.2

Japan Real
Estate InstituteSep. 30,
2015

2,200

1,900

2,210

5.4

2,190

5.1

5.6

129

6.0

The Tanizawa
Sōgō Appraisal
Co., Ltd.

Sep. 30,
2015

945

－

－

－

945

(year 1-18)
4.8(year 19-37.7)
4.9

4.9

46

5.2

1,500

1,220

1,530

5.2

1,460

5.0

5.6

81

5.4

9,180

10,400

5.7

10,200

5.3

5.8

595

6.2

N-1

N-2

N-3

Kahma Home
CenterNakagawa
Tomita(Land)
Valor
IchinomiyaNishi
K’s
Denki
Nakagawa
Tomita(Land)

Daiwa Real
Estate Appraisal
Co., Ltd.
Daiwa Real
Estate Appraisal
Co., Ltd.
Daiwa Real
Estate Appraisal
Co., Ltd.
The Tanizawa
Sōgō Appraisal
Co., Ltd.

F-1

Sunny NomaJapan Real
Estate InstituteSep. 30,
2015

R-1

Roseo Mito

Japan Real
Estate InstituteSep. 30,
2015

Japan Real
Estate InstituteSep. 30,
2015

1,590

1,710

1,600

5.9

1,580

5.6

6.1

98

6.7

Japan Real
Estate InstituteSep. 30,
2015

901

878

905

5.9

896

5.6

6.1

58

6.5

95,706－－－

95,101

－

－

5,024

5.5

R-2

R-3

K’s
Denki
Aomori
HontenSuper Sports
Xebio
Aomori-Chuo

Total/Average

10,30032

Kenedix Retail REIT Corporation (3453)(Note 1) "Appraisal NOI" is the Net Operating Income calculated by subtracting the amount of operating expenses from the operating
revenues described in relevant appraisal reports, and it is the income before depreciation and differs from NCF (Net CashFlow) which is calculated by adding investment gains from such as deposits and subtracting capex from NOI. The above
appraisal NOI is calculated using the direct capitalization method. However, where the direct capitalization method is notapplicable, appraisal NOI indicates the net operating income for the first year based on the DCF method. The amounts arerounded down to the nearest one million yen.
(Note 2) “Appraisal NOI yield” indicates the value calculated using the following formula and rounded to the nearest tenth. The“Total/average” of “Appraisal NOI yield” indicates the average appraisal NOI yield which is a weighted average of appraisal
NOI yields of the acquired properties (rounded to the nearest tenth): Appraisal NOI of each property / Acquisition price foreach property.

33

Kenedix Retail REIT Corporation (3453)

iv) Overview of builing condition investigation reports
KRR has obtained engineering reports, containing the diagnosis of building deteriorations, short- and long-term repair andmaintenance plans, the assessment of legal compliance with the Building Standard Act and other laws and regulations, theinvestigation of hazardous substances in a building and soil environment, from Tokio Marine & Nichido Risk Consulting Co., Ltd.
and HI International Consultant Co., Ltd. for the acquired properties and the to-be acquired properties. These reports represent
judgement and opinion of the appraiser for a fixed point of time, with no guarantees as to the validity or accuracy of the report.
Property
Number

Property name

T-1

Fululu Garden Yachiyo

T-2

MONA Shin-Urayasu

T-3

Passaggio Nishiara

T-4

Daikanyama Address
Dixsept

T-5

Unicus Ina

T-6

Yorktown Kita-Kaname

T-7

Unicus Yoshikawa

T-8

Sports Club Renaissance
Fujimidai

O-1

Blumer Maitamo

O-2
O-3

Central Square Takadono(Land)
Piago Kahma Home Center
Omihachiman

O-4

Blumer HAT Kobe

N-1

Kahma Home Center
Nakagawa Tomita(Land)

N-2

Valor Ichinomiya-Nishi

N-3

K’s Denki Nakagawa
Tomita (Land)

F-1

Sunny Noma

R-1

Roseo Mito

R-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio
Aomori-Chuo

Investigation company

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

Investigation
performed in

Nov. 2014

980,9700Nov. 2014

921,734

16,696

Nov. 2014

125,949

0Nov. 2014

145,3520Aug. 2014

118,760

1,110

Nov. 2014

13,213

1,775

Nov. 2014

59,1320

Sep. 2014

23,780400

Nov. 2014

211,9540－

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

－

Total

－
56,850180Mar. 2015

326,565

3,959－

Aug. 2014－

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

－

Aug. 2014－

HI International Consultant
Co., Ltd.

Repairs, maintenance and renovation
expensesRequired over theRequired within one
next 12 years
year (thousand yen)(thousand yen)
(Note)(Note)－
177,790

－

2,690
－

Aug. 2014

41,960420Aug. 2014

211,410550

Nov. 2014

142,7640Nov. 2014

103,0120

3,661,195

27,780(Note) Of the “repairs, maintenance and renovation expenses,” “required over the next 12 years” indicates the total expenses required
during the next 12 years from the date of each engineering report and “required within one year” indicates the total expenses
required within one year from the date of each engineering report. All figures are rounded down to the nearest one thousand yen
as indicated in the engineering reports.

34

Kenedix Retail REIT Corporation (3453)

v) Overview of seismic PML evaluation report
The following summary is based on the Portfolio Earthquake PML Evaluation Report created by the Sompo Japan Nipponkoa
Risk Management Inc. as of August 2015. However, KRR does not guarantee the accuracy of evaluations in the report. The report
only represents judgement and opinion of the appraiser for a fixed point of time, with no guarantees as to the validity or accuracyof the report. There is no special interest between the Sompo Japan Nipponkoa Risk Management Inc. and KRR or KFM.
Property
number

Property name

PML value in seismic review (%)(Note)
Specialty store building 10.24
Ito-Yokado building 8.96
Retail building 5.98
Parking lot building 5.97

T-1

Fululu Garden Yachiyo

T-2

MONA Shin-Urayasu

T-3

Passaggio Nishiarai

3.13

T-4

Daikanyama Address Dixsept

11.11

T-5

Unicus Ina

4.51

T-6

Yorktown Kita-Kaname

8.72

T-7

Unicus Yoshikawa

3.26

T-8

Sports Club Renaissance Fujimidai

7.09

O-1

Blumer Maitamon

1.52

O-2

Central Square Takadono (Land)

O-3

Piago Kahma Home Center
Omihachiman

O-4

Blumer HAT Kobe

N-1

Kahma Home Center Nakagawa Tomita(Land)

N-2

Valor Ichinomiya-Nishi

N-3

K’s Denki Nakagawa Tomita (Land)

F-1

Sunny Noma－
Piago building 3.95
Kahama Home Center building 5.22
4.69
－
10.18
－
1.95
Coffee shop building
Mall building
Sports facility building
Hardware store building
K’s denki building
TSUTAYA/Hard-off building

7.41
6.70
9.69
9.68
1.61
1.51

R-1

Roseo Mito

R-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio Aomori-Chuo

1.52

Portfolio PML value (Note2)

3.37(Note 1) PML is rounded to the nearest hundredth.
(Note 2) “Portfolio PML value” is the portfolio PML value of 16 properties that excludes Central Square Takadono (Land), Kahma
Home Center Nakagawa Tomita (Land), and K’s Denki Nakagawa Tomita (Land) and is based on the Portfolio Earthquake
PML Evaluation Report created by Sompo Japan Nipponkoa Risk Management Inc. as of March 2015.

35

Kenedix Retail REIT Corporation (3453)

vi) Architect, structural engineer, construction company and construction confirmation authority
Property
Construction
Property name
Architect
Structural engineer
Construction company
numberconfirmation authority(Ito Yokado Yachiyo)(Ito Yokado Yachiyo)(Ito Yokado Yachiyo)
Research Institute of
Research Institute of
Takenaka Corporation,
Architechture, Tokyo Branch Architechture,Tokyo Branch Higashi-Kanto Branch
The Building Center of
T-1 Fululu Garden
Yachiyo(Fululu Garden Yachiyo) (Fululu Garden Yachiyo) (Fululu Garden Yachiyo) Japan
Research Institute of
Research Institute of
Takenaka Corporation,
Architechture,Tokyo Branch Architechture,Tokyo Branch Higashi-Kanto Branch
MONA ShinHaseko Corporation,
Haseko Corporation,
T-2 Urayasu
Haseko Corporation
Chiba Prefecture
Engineering Division
Engineering Division
T-3 Passaggio Nishiarai Yamashita Sekkei Inc.

Yamashita Sekkei Inc.

Nishimatsu Construction
Co., Ltd.

Tokyo Prefecture

Daikanyama
T-4 Address Dixsept

Nihon Sekkei, Inc.

Nihon Sekkei, Inc.

Kajima Corporation

Tokyo Prefecture

T-5 Unicus Ina

Taisei Corporation,
Taisei Corporation,
Registered architect office Registered architect office Taisei Corporation

Bureau Veritas Japan
Co., Ltd.

T-6 Yorktown KitaKaname

CB Richard Ellis Asset
Services K.K.

Sankyoline Corporation

Asanuma Corporation

K.K. Building
Navigation

T-7 Unicus Yoshikawa Obayashi Corporation

Obayashi Corporation

Obayashi Corporation

Saitama Housing
Inspection Center

T-8 Sports Club
Renaissance Fujimidai

K.K. Axs Engineering

K.K. Axs Engineering

Ichiken Co., Ltd.

Nerima ward

O-1 Blumer Maitamon Asanuma Corporation

Asanuma Corporation

Daiwa System Co., Ltd.

Bureau Veritas Japan
Co., Ltd.

O-2 Central Square
Takadono (Land)

－

－

－

－

(Piago building）(Piago building）(Piago building）
Kiuchi Construction Co., Ltd. Kiuchi Construction Co., Ltd. Kiuchi Construction Co., Ltd. K.K. Organization of(Kahama Home Center building) (Kahama Home Center building) (Kahama Home Center building) Confirmation &Daiken Tosikaihatu Co., Ltd. Daiken Tosikaihatu Co., Ltd. Aisawa Construction Co., Ltd. (Note2) Inspection Annex
Center of International
O-4 Blumer HAT Kobe Obayashi Corporation
Obayashi Corporation
Obayashi Corporation
Architectural Standard
Co., Ltd.
Kahma Home Center
N-1 Nakagawa Tomita－－－－(Land)
Valor IchinomiyaN-2 Nishi
Chubu Sekkei Co.,Ltd.
Chubu Sekkei Co.,Ltd.
Tsuchiya Corporation
Ichinomiya City
K’s Denki
N-3 Nakagawa Tomita－－－－(Land)
Nakamuta & Suenaga
Nakamuta & Suenaga
Nishimatsu Construction Fukuoka City
F-1 Sunny Noma
Designing (JV)
Designing (JV)
Co., Ltd., Kyushu Branch(Coffee shop building)(Coffee shop building)
Tetsu Works Architect Office (Coffee shop building)(Mall building)
Tetsu Works Architect Office Kurehanishiki Construction
Co., Ltd.
Kurehanishiki Construction Co., Ltd. (Mall building)(Mall building)
Change of use:
Sezako Structural
Kurehanishiki
Registered Architect
Engineering Office
R-1 Roseo Mito
Construction Co., Ltd.
Mito City
Studio Work House(Sports facility building)(Sports facility building)(Sports facility building)Individual (Note 3)
Kishi-Sekkei Co., Ltd.
(Hardware store building) Kurehanishiki
Construction Co., Ltd.
(Hardware store building) K.K. Dan Structural(Hardware store building)
Nihon Jutaku Corporation, Engineering OfficeNihon Jutaku Corporation
Registered Architect Office(K’s Denki building)
Nihon Kensetsu Co.,
K’s Denki
K.K. Kyoei Planning
K.K. Kyoei PlanningLtd., Sendai Branch
R-2 Aomori Honten
DesignDesign(TSUTAYA/Hard-off building) Aomori City
Nihon Kensetsu Co.,
Ltd., Sendai Branch
Super
Sports
Xebio
R-3
Takenaka Corporation
Individual (Note 3)
Takenaka Corporation
Japan ERI Co., Ltd.
Aomori-Chuo(Note 1) The above company names are names at the time of construction confirmation, completion, or acquiring inspection certificate
for respective properties, even in cases of past changes in names.
(Note 2) The name of actual construction company is shown, although it was Daiwa System Co., Ltd. at the time of application
procedure for building confirmation.
(Note 3) Individuals’ names are not disclosed because these are personal information.
Piago Kahma
O-3 Home Center
Omihachiman

36

Kenedix Retail REIT Corporation (3453)

vii) Overview of portofolio(A) Distribution by Property Type
Percentage of total portfolio
acquisition price(%)(Note)

Property type

Number ofproperties

Neighborhood, community and other shopping centers
for daily needs

19

91,843100.0

NSC (Neighborhood Shopping Centers)

8

45,357

49.4

SM (Super Markets)

2

4,182

4.6

CSC Community shopping Centers）

1

14,848

16.1

Urban Station-Front Shopping Centers3

19,30321.0

SS (Specialty Store)

5

8,153

8.9

－

－

－

19

91,843

100.0

Other retail properties
Total

Acquisition price(in millions Yen)

(Note) Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of totalacquisition price may differ from the portfolio total.
(B) Distribution by Location
RegionFour major metropolitan areas

Number ofproperties

Acquisition price(in millions Yen)

Percentage of total portfolio
acquisition price(%)

16

79,801

86.9

Tokyo metropolitan area

8

48,716

53.0

Greater Osaka area

424,214

26.4

Greater Nagoya area

3

5,374

5.9

Fukuoka area

1

1,497

1.6

Tokureishi and other areas

3

12,04213.1

1991,843

100.0

Total

(Note) Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of totalacquisition price may differ from the portfolio total.
(C) Distribution by Property Age
Property age(Note 1)

Number ofproperties

Acquisition
price (in millions)

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

1

3,600

4.2

5 years or more but less than 10 years

938,74345.1

10 years or more

643,61550.7

1685,958

100.0

Total

(Note 1) Property age refers to the number of years from the date of the new construction of the property set out in the real estate registry
to September 30, 2015. Where multiple buildings exist on the property, the property age is calculated using the average age of
those buildings.
(Note 2) Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total
portfolio acquisition price may differ from the portfolio total.
(D) Distribution by Lease Term Remaining
Lease term (remaining period)(Note 1)

Annual fixed rent (in millions)(Note 2)Less than 2 years

Ratio (%)
(Note 3)
1,011

37

16.1

Kenedix Retail REIT Corporation (3453)

2 to less than 5 years

1,237

19.6

5 to less than 10 years

1,089

17.3

10 to less than 15 years

2,301

36.5

15 to less than 20 years

555

8.8

20 years or more

103

1.6

6,299

100.0

Total

(Note 1) “Lease term (remaining period)” is based on period until the last date of the lease as set forth in the relevant lease agreements asof September 30, 2015 (excluding warehouses for building lease agreements) for each acquired property and to-be acquired
property.
(Note 2) “Annual fixed rent” for acquired property is calculated by multiplying the monthly fixed rent and common area charges for themonth ended September 30, 2015 (excluding warehouses in the case of building lease agreements) by twelve and rounding down
to the nearest million yen. For master leases, where the master lease company sub-leases space to other tenants, the fixed monthly
rent under the master lease contract is multiplied by 12, rounded down to the nearest million yen.
(Note 3) “Ratio” is based on the annual fixed rent, rounded to the nearest tenth. As a result, simple aggregation of “ratio” figures may not
be the same as the total period.
(E) Distribution by lease contract typeType of lease contract

Ratio (%) (Note)

Fixed-term building lease

67.6

Regular building lease

26.2

Commercial fixed-term land lease

6.2

Other

0.0
Total

100.0

(Note) “Ratio” is based on the annual fixed rent as indicated in Note 2 of (D) above, rounded to the nearest tenth. As a result, simple
aggregation of “ratio” figures may not be the same as the total figure.
(F) Rent type (Fixed / Sales-linked rent)
Rent type(Fixed / Sales-linked rent)

Ratio (%) (Note)

Fixed rent

73.3

Fixed + sales-linked rent.

20.6

Sales linked fixed

6.1

Total

100.0

(Note) “Ratio” is calculated according to the actual rent effective between April 1, 2015 and September 30, 2015, rounded to the nearest
tenth. As a result, simple aggregation of “ratio” figures may not be the same as the total figure.

38

Kenedix Retail REIT Corporation (3453)

viii) Capital expenditures(A) Planned capital expenditures
The table below shows major capital expenditures for renovations, repairs and other projects that are planned for the second fiscal
period ending March 31, 2016. These expenditures are for real estate owned by KRR and real estate in trusts in which KRR owns
trust beneficiary rights. These planned projects may include some expenditures that will be recorded as expenses rather thancapital expenditures for accounting purposes.
Planned amount of capital
expenditure(Millions of yen)
Property
Property nameLocation
PurposeSchedule
Total
number
Payment
amountTotal
for thealready
periodpaidbuilding construction
From June to
R-1 Roseo Mito
Mito, Ibaraki
378
96
96
(Secondhand shop)
November 2015
From Decmber 2015
O-4 Blumer HAT Kobe Kobe, hyogo
Renewal89－－
To April 2016
From June 2015
MONA ShinT-2
Urayasu, Chiba PMAC replacement
65－－
Urayasu
to January 2016
From December 2015
Fululu Garden
Replacing to LED lights
T-1
Yachiyo, Chiba
55－－
Yachiyofor common areas
to March 2016
From FeburaryO-1 Blumer Maitamon Kobe, Hyogo
Flooring replacement47－－
to April 2016
(B) Capital expenditures during the period under review
The table below shows major capital expenditures for renovations, repairs and other projects in the period under review.
The amount of capital expenditures in the period under review was 131 million yen. There were also expenditures of 144 million
yen that were recorded as repair expenses. In total we spent 275 million yen on the projects.
Property
Capital expenditure
Property nameLocation
PurposeSchedule
number(Millions of yen)
MONA ShinUrayasu,
From April to June 2015
T-2
Rest room remodeling
41
Chiba
Urayasu
Passaggio
Adachi ward,
Replacing to LED lights
T-3
From June to June 201526
NishiaraiTokyofor common areas
MONA ShinUrayasu,
Painting of exterior
T-2
From July to September 201515
Chiba
Urayasu
Stairways
Other

47

Total

131

(C) Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
Not applicable39

Kenedix Retail REIT Corporation (3453)

ix) Major portfolio properties
The table below shows the major properties owned by KRR as of September 30, 2015. Major properties are defined as those that
account for 10% or more of our total rental revenue generated from all assets held by KRR.
Annual rent
Number of
Leased area
Leasable area
Property
Property name(Millions of yen)numbertenants(m2)(m2)(Note)
T-1

Fululu Garden Yachiyo

49

1,085

76,707.48

77,057.56

O-1

Blumer Maitamon

48

690

29,888.11

30,037.11

O-4

Blmer HAT Kobe

1(41)

667

24,055.88

24,185.02

R-1

Roseo Mito

1(22)

652

45,654.67

45,654.67

Note: Annual rent is 12 times the fixed monthly rent (including a common service charge) under a leasing contract with tenants at
portfolio properties as of September 30, 2015 (excluding building leasing contracts for warehouses), rounded down to the nearest
million yen. For master leases, where the master lease company sub-leases space to other tenants, the fixed monthly rent underthe master lease contract is multiplied by 12, rounded down to the nearest million yen.

40

Kenedix Retail REIT Corporation (3453)(3) Information Concerning Major Tenants
The following summarizes top 10 tenants (end-tenants or sub-lease type master leasee) as of September 30, 2015
Total
leased
area
(m2)

Ratio
(%)
(Note 2)TenantAnnualleaseholdfixed rent and security(indeposits
thousands(inof yen)millions of(Note 3)yen)
(Note 4)

Fululu Garden
Yachiyo－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)

RetailA Fululu Garden
Yachiyo,
B Super Sports Xebio
Aomori-Chuo－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)

P&D
Consulting
Co., Ltd.

Real
estateUnicus Ina

13,044.37

YorkMartCo., Ltd.

RetailYorktown
Kita-Kaname－(Note 6)

LIFE
Corporation

RetailA Unicus Yoshikawa,
B Central Square
Takadono (Land)

EDION
Corporation

RetailBlumerMaitamon－(Note 6)

Kansai Super
Market Ltd.

RetailA Blumer Maitamon
B Blumer HAT Kobe

DCM
KAHMA
Co., Ltd.

Name of end
tenants

Type ofbusiness(Note 1)

Ito-YokadoCo., Ltd.
(Note 5)RetailXEBIOCo., Ltd.

Property name

4.3

136

Lease type

Lease
renewalSeptember 25,
Regular2026
building lease－(Note 6)－(Note 6)

A Fixed-term
A August 29, building lease－2031
B Commercial(Note 6) B July 29, 2035 fixed-term land
lease－
(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)

RetailA Piago Kahma Home
CenterOmihachiman,
B Kahma Home
Center Nakagawa
Tomita (Land)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)

Tokyu
Recreation
Co., Ltd.

RetailBlumer HAT Kobe－
(Note 6)－(Note 6)－(Note 6)－(Note 6)

October 25,
2025

Fixed-termbuilding lease－(Note 6)

LIXIL Viva
Corporation

RetailRoseo Mito－
(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)－(Note 6)2.3－
(Note 6)－(Note 6)Not
applicable－(Note 6)

6,892.87－(Note 6)

263

Lease term
end－
(Note 6)(Note 1) “Type of business” is based on Japan Standard Industrial Classification.
(Note 2) “Ratio” is the ratio of leased area of the end tenant to total leasable area of the portfolio as of September 30, 2015, rounded to
the nearest tenth.
(Note 3) “Annual fixed-rent” for each property is based on monthly contracted rent (including common area charges) as set forth in therelevant lease agreements effective as of September 30, 2015 (excluding warehouses for building lease agreements) for each
property or property in trust, truncated to thousands of yen.
(Note 4) Indicates the outstanding balance of any tenant leasehold and security deposit from the relevant end-tenant(s) set forth in leaseagreement(s) effective as of September 30, 2015, rounded down to the nearest million yen.
(Note 5) Of our ten largest tenants by anticipated annual fixed rent, Ito-Yokado Co., Ltd. is a major tenant, which we define as a tenantthat occupies more than 10% of our total leased area in our anticipated initial portfolio.
(Note 6) We have not obtained consent from the tenant to release this information.

41

Kenedix Retail REIT Corporation (3453)(Reference)

Earnings Performance for the Individual Properties for the 1st Fiscal Period (October 3, 2014 to September 30, 2015)：363 days (Note1)
Tokyo metropolitan area
Greater Osaka area

Location
Property No.

T-1

T-2

T-3

T-4

T-5

T-6

T-7

T-8

O-1

※As of September 30, 2015
O-2

O-3

O-4

Daikanyama
Sports Club
Piago Kahma
Fululu Garden
MONA
Passaggio
Yorktown
UnicusCentral Square
Blumer HAT
Address
Unicus Ina
RenaissanceBlumer Maitamon
Home Center
YachiyoShin-Urayasu
Nishiarai
Kita-Kaname
Yoshikawa
Takadono (Land)
Kobe
Dixsept
Fujimidai
Omihachiman
February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 April 16, 2015

Property Name
Acquisition Date
Price
Information

Acquisition price ( In millions of yen )14,848

8,063

5,850

5,390

4,379

4,000

3,600

2,586

8,389

2,685

2,140

Percentage of total portfolio

16.2%

8.8%

6.4%

5.9%

4.8%

4.4%

3.9%

2.8%

9.1%

2.9%

2.3%

12.0%

Net book value ( In millions of yen )15,048

8,223

5,964

5,454

4,411

4,038

3,657

2,607

8,498

2,727

2,178

11,494

Appraisal value at the end of period ( In millions of yen )15,100

8,360

6,200

5,450

4,430

4,220

3,690

2,640

8,820

2,870

2,390

11,600

15.8%

8.7%

6.5%

5.7%

4.6%

4.4%

3.9%

2.8%

9.2%

3.0%

2.5%

12.1%

49

1（72）

1（40）

1（26）

1

1

1（11）

1

48

1

2

1（41）

Leasable floor area (㎡)

77,057.56

9,568.31

10,546.25

5,056.39

13,044.37

10,620.04

3,120.87

30,037.11

4,437.07

14,313.00

24,185.02

Leased floor area (㎡)76,707.48

9,376.34

10,366.25

4,748.56

13,044.37

10,620.04

3,120.87

29,888.11

4,437.07

14,313.00

24,055.88

Percentage of total appraisal value
Lease Information

Number of tenants（Note 2）

11,000Occupancy ratio

99.5%

98.0%

98.3%

93.9%

100.0%

100.0%

100.0%

100.0%

99.5%

100.0%

100.0%

99.5%

Operating periods

233days233days233days233days233days233days233days233days233days233days233days168days①Rental and other operating revenues ( In thousands of yen )As of September 30, 2015

Income and Retained Earnings Information

978,001

672,980

404,875

324,660

169,248

167,013630,766

473,998

Rental revenues

811,299455,106

265,884

228,139

168,590

163,317456,479

347,234

Other operating revenues

166,701

217,873

138,991

96,521

657

3,695

174,286

126,763396,759

323,537

177,631

176,144

14,28233,313

251,684

183,801

108,392

59,76067,224

2,303

21

8

14

8

120

Utilities

106,108

90,86960,68850,921--

123,290

78,362

Repairs and maintenance

37,462

25,716

7,269

10,892

10,7791,344

17,58019,441

Insurance

2,423

1,056

705

396

420

320

1,059

900

②Property-related expenses ( In thousands of yen )Property management fees
Taxes

Trust fees and other expenses

66,941

97,49349,192

46,701658③NOI（＝①-②） ( In thousands of yen )581,241

349,442

227,244

148,515

154,966④Depreciation ( In thousands of yen )106,010

52,094

41,615

19,50838,276⑤Rental operating income （＝③-④） ( In thousands of yen )475,231297,348

185,628

129,007

116,689

30,854（Note 2）

209

78,705（Note 2）33584
143,055

194,174（Note 2）

78,791（Note 2）

3

31,013

16,675

133,699

83,144

379,081

54,744

119,519

279,824

26,327

20,526

19,75765,995-

13,654

48,200116,728

113,172

63,386

313,086

54,744

105,864

231,623⑥Capital expenditures ( In thousands of yen )21,56970,767

26,814

1,085

-

-

-

-

10,231--

658⑦NCF （＝③-⑥） ( In thousands of yen )559,672

278,674

200,430

147,430

154,966

143,055

133,699

83,144

368,850

54,744

119,519

279,166

Reference

Expense ratio （＝②／①）
Property tax for the year 2015 ( In thousands of yen )Assets pledged as collateral

40.6%

48.1%

43.9%

54.3%

8.4%

4.8%

19.9%

6.8%

39.9%

3.4%

3.8%

41.0%

141,857

45,81970,832

23,587

20,165

13,77029,435

10,567

82,277

6,852

28,35994,620

○

-

-

-

-

-

-

-

-

-

○

Note 1:Although the accounting period for the Investment Corporation’s period ended September 30, 2015 includes 363 days from October 3, 2014 to September 30, 2015, its substantial
asset management period covers only 233 days from February 10, 2015 to September 30, 2015.
Note 2:We have not obtained consent from the tenant(s) to release this information.

42-

Kenedix Retail REIT Corporation (3453)(Reference)

Earnings Performance for the Individual Properties for the 1st Fiscal Period (October 3, 2014 to September 30, 2015)：363 days (Note1)
Greater Nagoya area
Fukuoka area Tokureishi and other areas

Location
Property No.

N-1

N-2

N-3

F-1

R-1

R-2

R-3

Kahma Home
K’s Denki
K’s Denki
Super Sports
Valor IchinomiyaCenter Nakagawa
Nakagawa
Sunny Noma
Roseo Mito
Aomori
Xebio
Nishi
Tomita (Land)
Tomita (Land)
HontenAomori-Chuo
February 10,
10, 2015
February2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015

Property Name
Acquisition Date

Total of 19
Properties

Price
Information

Acquisition price ( In millions of yen )

2,311

2,174

889

1,497

9,675

1,469

898

91,843

Percentage of total portfolio

2.5%

2.4%

1.0%

1.6%

10.5%

1.6%

1.0%

100.0%Net book value ( In millions of yen )

2,351

2,199

907

1,527

9,871

1,499

913

93,575

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

2,500

2,200

945

1,500

10,3001,590

901

95,706

2.6%

2.3%

1.0%

1.6%

10.8%

1.7%

0.9%

100.0%

1

1

1

Percentage of total appraisal value
Lease Information

1

Number of tenants

9,447.48（Note 2）

Leasable floor area (㎡)Leased floor area (㎡)9,447.48（Note 2）

1

1（22）

1

2,814.67

45,654.67

10,083.41

2,814.67

45,654.67

10,083.41※As of September 30, 2015

321
306,225.83（Note 2）

304,917.81

Occupancy ratio
As of September 30, 2015
Operating periods

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

233days233days233days233days233days233days233days①Rental and other operating revenues ( In thousands of yen )99.6%
225日 *Total: Cost-weighted average operating period (days)

Income and Retained Earnings Information

456,990

5,103,069

Rental revenues

410,834

4,128,035

Other operating revenues

46,155975,033

70,036

1,685,222②Property-related expenses ( In thousands of yen )（Note 2）

Property management fees
Taxes

（Note 2）

（Note 2）

23,645（Note 2）

12（Note 2）655,263（Note 2）

1,280

Utilities

37,857548,099

Repairs and maintenance

3,043

144,732

841

9,662

Insurance

4,635

Trust fees and other expenses③NOI（＝①-②） ( In thousands of yen )④Depreciation ( In thousands of yen )⑤Rental operating income （＝③-④） ( In thousands of yen )83,082

96,38083,082

326,183

31,86555,040386,953

69,65540,3893,417,847

19,321-

18,97855,745

8,444

6,498

560,957

77,05931,86536,062331,20761,21033,8902,856,889⑥Capital expenditures ( In thousands of yen )

-

-

-

-

-

-

-

131,125⑦NCF （＝③-⑥） ( In thousands of yen )83,082

96,38031,86555,040386,953

69,65540,3893,286,721

Reference

Expense ratio （＝②／①）

2.3%

4.8%

5.7%

16.9%

15.3%

6.2%

7.1%

33.0%

Property tax for the year 2015 ( In thousands of yen )

9,869

19,552

3,949

7,086

51,787

13,821

6,088

680,303

Assets pledged as collateral

-

-

-

-

-

-

-

Note 1:Although the accounting period for the Investment Corporation’s period ended September 30, 2015 includes 363 days from October 3, 2014 to September 30, 2015, its substantial
asset management period covers only 233 days from February 10, 2015 to September 30, 2015.
Note 2:We have not obtained consent from the tenant(s) to release this information.

43

Kenedix Retail REIT Corporation (3453)(Reference) Borrowings
Borrowings on a financial institution basis as of September 30, 2015 are as follows:
Classification

LenderBalance at the
Increase during Decrease during Balance at the
Average
beginning of
the period
the period
end of periodinterest rate Payment due dateperiod（Note4）(Thousands of (Thousands of (Thousands of（Note2）(Thousands of
yen)
yen)
yen)
（Note3）(％)yen)

Short-Term Payable

Sumitomo Mitsui Banking Corporation-

450,000-

450,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

450,000-

450,000

Mizuho Bank, Ltd.

-

400,000-

400,000

Aozora Bank, Ltd.

-

250,000-

250,000

Resona Bank, Ltd.

-

250,000-

250,000
200,000-

200,000-

Sumitomo Mitsui Banking Corporation（Note6）-

1,322,500

1,322,500-

0.630 February 10, 2016

Sumitomo Mitsui Banking Corporation（Note7）-6,900,000

6,900,000

-

0.430

Sub Total-

10,222,500

8,222,500

2,000,000

Sumitomo Mitsui Banking Corporation-

2,300,000-

2,300,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

800,000-

800,000

Mizuho Bank, Ltd.

-

400,000-

400,000

Mizuho Trust & Banking Co., Ltd.

-

350,000-

350,000

Sumitomo Mitsui Banking Corporation-

2,400,000-

2,400,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

800,000-

800,000

Mitsubishi UFJ Trust and Banking Corporation-

800,000-

800,000

Sumitomo Mitsui Trust Bank, Ltd.

-

550,000-

550,000

Aozora Bank, Ltd.

-

500,000-

500,000

Resona Bank, Ltd.

-

500,000-

500,000

The Gunma Bank, Ltd.

-

400,000-

400,000

The Musashino Bank, Ltd.

-

400,000-

400,000

Mizuho Bank, Ltd.

-

350,000-

350,000

Mizuho Trust & Banking Co., Ltd.

-

300,000-

300,000

Sumitomo Mitsui Banking Corporation-

3,000,000-

3,000,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

700,000-

700,000-

500,000-

500,000

Aozora Bank, Ltd.

-

450,000-

450,000

Long-Term Payable

Resona Bank, Ltd.

-

450,000-

450,000

Mizuho Bank, Ltd.

-

400,000-

400,000

Sumitomo Mitsui Banking Corporation-

2,600,000-

2,600,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

800,000-

800,000

600,000-

600,000

400,000-

400,000

Mizuho Trust & Banking Co., Ltd.

-

400,000-

400,000

Mizuho Bank, Ltd.

-

300,000-

300,000

Resona Bank, Ltd.

-

300,000-

300,000

Development Bank of Japan Inc.（Note8）-

1,500,000-

1,500,000

0.925 February 10, 2021

Development Bank of Japan Inc.（Note8）-

1,600,000-

1,600,000

1.033 February 10, 2022

Sumitomo Mitsui Banking Corporation-

4,600,000-

4,600,000

1.366

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

750,000-

750,000
500,000

500,000-

400,000-

400,000

Sumitomo Mitsui Trust Bank, Ltd.

-

200,000-

200,000
200,000

Resona Bank, Ltd.

-

200,000-

The Musashino Bank, Ltd.

-

150,000-

150,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

1,000,000-

1,000,000

Sumitomo Mitsui Trust Bank, Ltd.

-

600,000-

600,000

Mizuho Bank, Ltd.

-

400,000-

400,000

Resona Bank, Ltd.

-

400,000-

400,000

Mizuho Trust & Banking Co., Ltd.

-

400,000-

400,000

Mitsubishi UFJ Trust and Banking Corporation-

400,000-

400,000

Development Bank of Japan Inc.（Note8）-

1,500,000-

1,500,000-

36,350,000-

36,350,000-

46,572,500

8,222,500

38,350,000

Sub Total
Total

Unsecured/Non-guaranteed

0.865 February 10, 2021--

(Note5)0.751 February 10, 2020--

Unsecured/Non-guaranteed

0.545 February 10, 2018

Sumitomo Mitsui Trust Bank, Ltd.

Aozora Bank, Ltd.

(Note5)

April 16, 2016

Aozora Bank, Ltd.

Mizuho Bank, Ltd.

Remarks

0.430 February 10, 2016

Sumitomo Mitsui Trust Bank, Ltd.

Sumitomo Mitsui Trust Bank, Ltd.

Use

0.978 February 10, 2022

April 16, 2025

0.534 March 31, 20190.975 March 31, 2023

0.994 March 31, 2023

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

Due after 2 years
through 3 years-

3,850,000

Due after 3 years
through 4 years

Due after 4 years
through 5 years

2,200,000

7,000,000

Due after 5 years
23,300,000

Note 2: All debts except for the following Note8 are borrowing at a floating rate.
Note 3: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, with regard to borrowings for which interest rate swap transactions were implemented in orderto hedge the interest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps are indicatedNote 4: All the repayment methods of debt financing except for the following Note6 and Note7 are lump-sum repayments on the due date.
Note 5: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses are included) and repayment of debts.
Note 6: Prepayment was made on March 16, 2015.
Note 7: Prepayment was made on September 30, 2015.
Note 8: Borrowings at a fixed rate.

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