Translation of Japanese Original

FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED MARCH 31, 2018 (REIT)(October 1, 2017 to March 31, 2018)
May 17, 2018
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:
Masahiko Tajima, President & CEO
Inquiries:
Koichiro Nobata, Head of Planning Division, Retail REIT Department
TEL +81-3-5623-3868
Planned submission of semiannual securities report:
Planned start of distribution payments:
Preparing presentation material:
Hold a financial brief meeting:June 25, 2018
June 18, 2018
Yes
Yes (for analysts and institutional investors)(Amounts are rounded down to the nearest million yen)

1．PERFORMANCE FOR THE FISCAL PERIOD ENDED MARCH 31, 2018 (October 1, 2017 to March 31, 2018)(1) Business Results(Percentages show period-on-period changes)
Operating revenues

Fiscal period ended

Operating income

Ordinary income

Net income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

March 31, 2018

8,126

4.1

3,768

2.8

3,179

2.3

3,175

2.3

September 30, 2017

7,803

21.3

3,666

21.3

3,108

21.6

3,104

21.6

Net income per unit

Return on net assets

Ordinary income to total assets

Ordinary income to operating
revenues

Fiscal period ended

Yen

%

%

%

March 31, 2018

6,255

2.7

1.4

39.1

1.5

39.8

6,219
2.9
September 30, 2017
Note :Net income per unit is calculated by dividing the net income by the weighted average number of units.

(2) Distribution
Total
Distribution ratio
distributions Total distributions Total distributions
Payout ratio
to net assets(including(excluding excess
in excess ofexcess ofof earnings)
earnings
earnings)
Fiscal period ended
Yen
Yen
Yen Millions of Yen Millions of Yen Millions of Yen%%
March 31, 2018
6,255
6,255
0
3,175
3,175
0
100.0
2.7
September 30, 2017
6,115
6,115
0
3,104
3,104
0
100.0
2.7
Note:
Due to the issuance of new investment units, the payout ratio for the fiscal period ended September 30, 2017 is calculated as follows (rounded to the nearest tenth).
Payout ratio = Total distributions (excluding excess of earnings) /Net income × 100
Distributions perunit (includingexcess of
earnings)

Distributions perDistributions inunit (excludingexcess of earnings
excess of
per unit
earnings)(3) Financial Position
Total assets
As of

Net assets

Net assets to total assets

Net asset per unit

Millions of yen

Millions of yen%

Yen

March 31, 2018

231,107

116,58550.4

229,633

September 30, 2017229,628

116,51650.7

229,498(4) Cash Flows
Cash flows fromoperating activities
Fiscal period ended

Cash flows frominvesting activities

Millions of yen

Cash flows fromfinancing activities

Cash and cash equivalents
at the end of the period

Millions of yen

Millions of yen

Millions of yen

March 31, 2018

5,570

(1,400)(1,903)

19,118September 30, 2017

3,006

(40,102)39,651

16,851This is an English-language translation of the original Japanese announcement on our website released on May 17, 2018. However, no assurance or warranties are given with respect tothe 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．EARNINGS FORECASTS FOR THE FISCAL PERIODS ENDING SEPTEMBER 30, 2018 (April 1, 2018 to September
30, 2018) AND MARCH 31, 2019 (October 1, 2018 to March 31, 2019)
Operatingrevenues(Millions ofyen)Operating income(Millions of yen)

Ordinary income(Millions of yen)

Net income(Millions of yen)

Fiscal period ending
September 30, 2018

8,463

%
4.2

3,780

%
0.3

3,166

%
(0.4)

3,165

%
(0.3)

March 31, 2019

8,217

(2.9)

3,756

(0.6)

3,158

(0.2)

3,157

(0.2)

(Percentages show period-on-period changes)
Distributions perDistributions perDistributions inunit (excluding
unit (includingexcess ofexcess ofexcess of
earnings per unit
earnings)
earnings)
Yen
Yen
Yen
6,235
10
6,245
6,220

Reference:

Forecasted net income per unit (Forecasted net income / Forecasted average number of investment units during the period)
6,235 yen for the fiscal period ending September 30, 2018 and 6,220 yen for the fiscal period ending March 31, 2019

Note :

Distributions per unit are calculated based on the number of investment units issued and outstanding totaled 507,700 as of today.

10

6,230

*OTHERS(1) Changes in Accounting Policies/Changes in Accounting Estimate/Retrospective Restatement(a) Changes in accounting policies accompanying revisions to accounting standards: None(b) Changes in accounting policies other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(2) Number of Investment Units Issued and Outstanding (including treasury investment units)(a) Number of investment units issued and outstanding at the end of the period (including treasury investment units)
As of March 31, 2018: 507,700 units
As of September 30, 2017: 507,700 units(b) Number of treasury investment units at the end of the period
As of March 31, 2018: 0 units
As of September 30, 2017: 0 units
Note: Please refer to “Per Unit Information” on page 27 for the number of investment units used as the basis for calculating net income per unit.

* Status of audit procedures
As of the time of disclosure of this financial report, audit procedures for the financial statements pursuant to the Financial Instruments and Exchange Act of Japan are incomplete.
* Remarks on appropriate use of forecasts of performance and other special notes
Forward-looking statements presented in this financial report, including forecasts of performance, are based on information currently available to KRR and on certain assumptions KRR
deems to be reasonable. As such, actual operating and other results may differ materially from these forecasts as a consequence of numerous factors. The above-mentioned forecasts are
based on “Assumptions for the Forecasts of Financial Results for the Fiscal Periods Ending September 30, 2018 and March 31, 2019” on page 10 for calculation, and our judgment as of
May 17, 2018. Actual operating revenues, operating income, ordinary income, net income, distributions per unit and distributions in excess of earnings per unit may vary according tochanges in market conditions. These forecasts do not guarantee the distribution amount.

This is an English-language translation of the original Japanese announcement on our website released on May 17, 2018. However, no assurance or warranties are given with respect tothe 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.

Contents of Attachments
1. KRR and Related Corporations ....……………………………………………..…………………………………………………………2
2. Investment Policies and Status of Asset Management …………………………….…………………………………………………… ...3
(1)

Investment Policies ………………………………………………………………………………………………………………..3(2)

Status of Asset Management ………………………………………………………………………………………………………3(3)

Risk Factors ...……………………………………………………………………………………………………………………11

3. Financial Statements ...…………………………………………………………………………………………………………………12(1)

Balance Sheets ...…………………………………………………………………………………………………………………12(2)

Statements of Income and Retained Earnings ……………………………………………………………………………………..14(3)

Statements of Changes in Net Assets ……………………………………………………………………………………………...15(4)

Statements of Cash Distributions …………………………………………………………………………………………………17(5)

Statements of Cash Flows ………………………………………………………………………………………………………...18(6)

Notes on Assumption of Going Concern ………………………………………………………………………………………….19(7)

Summary of Significant Accounting Policies ……………………………………………………………………………………...19(8)

Notes to Financial Statements …………………………………………………………………………………………………….20(9)

Changes in Investment Units Issued and Outstanding ……………………………………………………………………………..28

4. Resignation/Appointment of the Directors ……………………………………………………………………………………………....29(1)

Resignation/Appointment of the Director of KRR ………………………………………………………………………………...29(2)

Resignation/Appointment of the Director of KFM ………………………………………………………………………………...29

5. Reference Information …………………………………………………………………………………………………………………30(1)

Component of Assets ……………………………………………………………………………………………………………..30(2)

Overview of the Portfolio ………………………………………………………………………………………………………....31(3)

Information Concerning Major Tenants …………………………………………………………………………………………...49【Reference】Earnings Performance of the Properties …………………………………………………………………………............51【Reference】Borrowings ……………………………………………………………………………………………………………56

1

1. KRR and Related Corporations
Management structure of KRR as of May 17, 2018 is as follows.

(i) Asset management agreement/Property management agreement(ii) Asset custodian agreement/Unitholder’s registry agreement/ General administration agreement(iii) Fiscal agency agreement(iv) Memorandum of understanding/Trademark license agreement(v) Alliance agreements
Note: Kenedix, Inc. is the parent company (referring to the parent company stipulated in Article 8, paragraph 3 of Ordinance on Terminology, Forms, andPreparation Methods of Financial Statements, etc. (Ordinance of the Ministry of Finance No.59 of the year 1963, including amendments thereafter)) of theAsset Manager. Kenedix, Inc. is deemed a specified related company of KRR (referring to the specified related company stipulated in Article 12, paragraph
3 of the Cabinet Office Ordinance on Disclosure of Information, etc. on Specified Securities (Ordinance of the Ministry of Finance No. 22 of the year 1993,
including amendments thereafter)).

22. Investment Policies and Status of Asset Management(1) Investment Policies
The disclosure is omitted as there have been no other significant changes from policies described in “Investment Policy,” “Investment
Properties” and “Distribution Policy” in the Securities Registration Statement (submitted on December 25, 2017; prepared in Japanese only).
(2) Status of Asset Management(Overview of the Period ended March 31, 2018)i) Transition of KRR
KRR was established on October 3, 2014, under the Act on Investment Trusts and Investment Corporations of Japan (the “Investment
Trust Act”). On October 30, 2014, KRR was registered with the Director-General of the Kanto Local Finance Bureau (registration
number: Director-General of the Kanto Local Finance Bureau No. 97). KRR was listed on the Real Estate Investment Trust Securities(J-REIT) Market of Tokyo Stock Exchange, Inc. (the Tokyo Stock Exchange) (Securities code: 3453) on February 10, 2015. Subsequently,
KRR raised funds through public offerings, including an international offering. As a result, the number of investment units issued at the endof the period ended March 31, 2018 was 507,700 units.
KRR seeks to invest primarily in neighborhood, community and other shopping centers that cater to the day-to-day needs of local area
customers and have stable demand from retailers and customers, in order to provide stable investment returns over the long term.
Sponsored by Kenedix, Inc., a leading, independent real estate asset management company, KRR entrusts its asset management andinvestment operations to KFM, with the following strategies.
Note:

For our management purposes and ease of classification, we define neighborhood, community and other shopping centers for daily needs as retail properties thatgenerally 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 other daily goods and servicesii) Investment Environment
There were signs of a moderate economic rebound in Japan with recoveries in corporate earnings. Real GDP growth (2nd preliminary
estimate) in the fourth quarter of 2017 was positive 1.6% on an annualized basis, indicating positive figures for eight consecutive quarters.
As for Japan’s retail market, consumer spending seems to be stable due to recoveries in employment and income environment, looking at
the breakdown of GDP figures.
Looking at the financial environment, the financial market remained unstable due to global market events such as the policies of the U.S.
administration and geopolitical risks. In terms of interest rates, there are concerns that interest rates in Japan may rise due to the Federal
Reserve rate hike in the U.S., while “Quantitative and Qualitative Monetary Easing with Yield Curve Control” including the negativeinterest rate policy by the Bank of Japan and the reappointment of Haruhiko Kuroda as Bank of Japan Governor is keeping the interest
rates in Japan low. Under these conditions, the J-REIT market remained unstable with many equity finances by J-REITs in the first quarterof 2018. On the other hand, the figures released by the Tokyo Stock Exchange show that foreign investors have been strongly buying
J-REITs during the period.
iii) Management Performance(A) Acquisition of Assets
KRR acquired and started the operations of the following trust beneficiary interest in real estate (one property acquired on February 13,
2018 with acquisition price of 1,263 million yen). As a result, the portfolio at the end of the period under review (March 31, 2018) consists
52 properties with the total acquisition price of 206,176 million yen.

Property
number

Property type
(Note 1)

T-23

SM

Note 1:

Location(City or Ward,
Prefecture)

Property nameItabashi-ku, Tokyo

Ozeki Tokiwadai

Acquisition
price(million yen)
(Note 2)
1,263

Acquisition dateFebruary 13, 2018

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

Trade areaother shopping centers for daily needs
NSC (Neighborhood Shopping Centers)

Shopping centers with a supermarket as an anchor or core tenant and several specialty

three to five

store tenants

kilometer3SM (Supermarkets)
CSC (Community Shopping Centers)

Urban Station-Front Shopping CentersStand-alone stores that primarily provide groceries, with a retail trade area

threekilometer

Larger shopping centers than NSC, which have a supermarket as an anchor or core tenant

five to ten

in addition to specialty store tenants

kilometer

Shopping centers that are located in the immediate vicinity of an urban public

three to tentransportation station, which take advantage of stable foot traffic

kilometer

Single- or multiple-tenant shopping centers that specialize in a single type of merchandise
SS (Specialty Stores)

or service, such as drug stores, convenience stores, health clubs or electronic appliancestores

Note 2:

one to ten
kilometer“Acquisition price” represents the purchase price of each trust beneficiary interest specified in purchase agreement in relation to the acquisition of each property(excluding acquisition costs, adjustment in property tax and city-planning tax, and consumption tax; and rounded down to the nearest one million yen).

(B) Management and Operation of Assets
KFM provides property management services for all of the properties owned by KRR at the end of the period under review (March 31,2018). By using the same company for both asset management and property management services, KRR aims to build stronger
relationships with tenants and increase returns from its portfolio. Furthermore, by implementing retail property management that betterreflects the needs of our tenants, KRR strives to accumulate know-how and improve tenant satisfaction. KRR invests primarily inneighborhood and community shopping centers that cater to the day-to-day needs of customers. The portfolio is diversified in terms ofproperties, tenants and other characteristics with a goal to generate consistent long-term cash flows. At the same time, a portion of the rent
includes sales-linked rent to explore the upside potential (Note 1) for rental income. By using these measures, we aim to pursue a portfoliothat achieves both stability and growth.
As of the end of the period under review, portfolio as a whole performed well with an overall occupancy ratio of 99.5%. Furthermore, theportfolio is diversified in terms of tenants as there are 522 end-tenants (Note 2) in KRR’s retail properties.
Note 1:
Note 2:“Upside potential” represents feasibility of rental income or cash flow growth.
The number of end-tenants is the sum of the number of end-tenants in a pass-through type master lease and the number of master lessees in a sublease typemaster lease.

(C) Financing
When financing to acquire properties, KRR seeks to achieve the proper balance between financial stability and the cost of the funds withthe objectives to achieve stable medium- to long-term returns and consistent growth of assets under management.
(Debt Finance)
During the fiscal period under review, KRR borrowed 1,200 million yen for the acquisition of properties and 9,750 million yen forrefinancing. Consequently, borrowings totaled 94,100 million yen and interest-bearing debt including investment corporation bonds(excluding interest-bearing tenant leasehold and security deposits) totaled 99,100 million yen at the end of the fiscal period under review(March 31, 2018).
When undertaking borrowings, we seek to spread out repayment dates and lengthen borrowing periods. On the other hand, we partiallyborrowed short-term loans from the point of flexibility under the financing strategy, also controlling financing cost. We may use swaps to
fix the interest payments to hedge against the risk of a rise in interest rates.
As a result, the average remaining years to maturity is 4.6 years, the weighted average interest rate is 0.96%, the long-term debt ratio (Note1) is 87.0% and the LTV ratio (Note 2) is 42.9%.
Note 1:
Note 2:Long-term debt ratio = (Long-term borrowings + Investment corporation bonds) / (Borrowings + Investment corporation bonds)
LTV ratio = (Loans payable + Investment corporation bonds) / Total assets(Credit Ratings)
The status of the credit ratings as of March 31, 2018 is as follows.
Credit rating agency
Details of the ratings
Long-term issuer rating
A+ (Outlook: Stable)
Japan Credit Rating Agency, Ltd. (JCR)
Rating on bonds
A+(Shelf Registration)
KRR filed a shelf registration statement for investment corporation bonds (excluding short-term investment corporation bonds) on
September 29, 2016. Details are as follows.

4Planned issue amount

100,000,000,000 yen

Planned issuance period

October 7, 2016 to October 6, 2018
Acquisition funds for specified assets (as defined in Article 2, Paragraph 1 of the Investment Trust

Use of fundsLaw), repayment funds for borrowings, repayment funds for investment corporation bonds(including short-term investment corporation bonds), refund funds for lease and guarantee deposits,
funds to pay for repairs and maintenance, working capital, etc.

KRR issued 1st Series Unsecured Investment Corporation Bonds (1,000 million yen) and 2nd Series Unsecured Investment Corporation
Bonds (1,000 million yen) on October 31, 2016, 3rd Series Unsecured Investment Corporation Bonds (1,000 million yen) and 4th Series
Unsecured Investment Corporation Bonds (2,000 million yen) on August 31, 2017, based on this shelf registration statement.
iv) Results of Operations
For this period, revenue was 8,126 million yen, operating income was 3,768 million yen, ordinary income was 3,179 million yen and net
income was 3,175 million yen.
Furthermore, in accordance with the distribution policy in the KRR Articles of Incorporation, KRR made a distribution of 3,175,663,500
yen which is almost equivalent to the earnings for the fiscal period. Cash distributions are paid in accordance with Article 67-15 of theSpecial Taxation Measures Law (Law No. 26 of 1957, including subsequent amendments).
Consequently, the distribution per unit was 6,255 yen.
(Outlook)i) Outlook for Asset Management
The Japanese economy is expected to continue to recover at a moderate pace. However, we should pay attention to uncertainties about theoverseas economy and politics regarding the direction of U.S. financial policies, the policies of the U.S. administration, etc. We also needto pay attention to changes in domestic economic environment, such as fluctuation of yen due to a rise in protectionism, effects of“Quantitative and Qualitative Monetary Easing with Yield Curve Control” including the negative interest rate policy and concerns overgeopolitical risks.
As for Japan’s retail sector environment, supermarkets and drugstores are performing well, and we anticipate this trend to continue. In
addition, while e-commerce has grown to account for a certain share of consumer spending, backed by advances in information technology,
we anticipate the integration of “brick and mortar” and the Internet will advance as both retail companies and Internet companies try toadopt to such environment.
In the real estate trading market, we anticipate the high level of transaction volume to continue because of the low interest rate environment
under the Bank of Japan’s monetary easing measures. However, investors should keep in mind the risk of changes in banks’ lending
attitude towards real estate sector, as amount of banks’ outstanding loans towards real estate sector reached new highs.
From a medium to long-term perspective, to generate a steady stream of rental revenue, consistently increase our assets and establish asuitable financial position, KRR will continue to manage assets based on the following policies.
(A) Investment Strategy for New Properties and Disposition Policy
We receive a variety of support from many sources in order to achieve the steady growth of our assets and increase the value of our assets.
One source is the Kenedix Group, including Kenedix, Inc., the parent company of KFM (Note). We also receive support from our Alliance
Companies: Sumitomo Mitsui Finance and Leasing Co., Ltd., Nippon Commercial Development Co., Ltd., P&D Consulting Co., Ltd.,and ITOCHU Corporation. We are implementing a growth strategy that takes full advantage of the external growth opportunities createdby the large and diverse acquisition pipeline made possible by the support of these companies.
When acquiring properties, we make decisions based on all applicable factors with emphasis on four parameters: the retail property’s
attractiveness, location, profitability and the tenant mix. By using this selection process, we invest in retail properties with a competitiveedge, and good prospects for consistent rental revenue and growth in asset value. We also invest in land ownership interests underlying
retail properties. Regarding land-only properties, we make these investments after examining the terms of the land leasing agreement, thecharacteristics of the tenant, the asset value of the land, and the proportion of land-only properties in our portfolio. We may also consider
making an equity investment in a tokumei kumiai (silent partnership) for the acquisition of preferential negotiation rights and opportunities
for additional revenues, provided that we are given an opportunity to acquire them in the future.
Regarding disposition of a portfolio property, we make decisions based primarily on the significance of these properties in the context ofthe portfolio. This is assessed by comprehensive evaluation of the outlook for future profitability and asset value determined based on its
current profitability and market trends.
Note :The Kenedix Group consists of Kenedix, Inc. and its subsidiaries and affiliates.

5

(B) Management Strategy for Existing Properties
KRR is committed to building a portfolio that can pursue both stability and growth. We believe that implementing integrated asset andproperty management services makes it possible to properly manage retail properties and pursue internal growth. Furthermore, thisintegrated management framework facilitates activities to enliven local communities where our properties are located, enabling us to aim
for medium to long-term growth in asset value.
To accomplish these goals, KFM oversees properties owned by KRR while placing priority on the following themes.
・“One-stop” asset management and property management services
・Continuously implementing a retail property management cycle through our in-house property management services
・Pursuit of internal growth through management of retail properties
・Directing investments and management policies to enliven local communities in the medium to long-term“One-stop” asset management and property management services
KRR plans to use the integrated asset management and property management services of KFM for strengthening relationships with tenants
and making the portfolio more profitable.
Continuously implementing a retail property management cycle through our in-house property management services
KFM provides property management services for all of KRR’s properties. We do this for the purposes of performing retail property
management that better reflects the needs of the tenants as well as accumulating know-how and improving tenant satisfaction. Specifically,
we use direct contact with tenant companies at our properties in order to strengthen tenant relationships and make properties more
profitable. To this end, we maintain periodic communication with tenants and perform questionnaire surveys to customers for monitoringof market conditions, so that we can identify the needs of tenants and the customers visiting their sites. This process makes it possible tofind issues that stand in the way of achieving greater satisfaction for tenants and their customers. Once we have discovered points that
require attention, we take actions that take full advantage of the resources and knowledge regarding retail properties within the Kenedix
Group. Solutions include measures such as the effectively utilizing capital expenditures, optimizing tenant mix, realizing growth in asset
value by pursuing property expansions, and cutting costs, to improve tenant satisfaction and acquire more know-how.
Pursuit of internal growth through management of retail properties
KRR seeks to use the proper management of retail properties to achieve the goals of consistent revenue, higher profitability and growth inasset value.
i. Effectively utilize capital expenditure
We will use proper and well-timed capital expenditures to increase the satisfaction of tenants and make our properties more competitive.
ii. Optimize tenant mix
We will constantly work on attracting new tenants that are highly appealing to shoppers and replace tenants with others, optimizing
tenant composition, in order to seek stable revenue and higher profitability by attracting more customers.
iii. Realize growth in asset value by pursuing property expansions
We will use the extensive knowledge involving retail properties of the Kenedix Group and our Alliance Companies to utilize theunderutilized space (note) at properties and expand properties. These measures will take into account the competitive position of each
property, the effect on our financial position and other factors. By increasing space that can be leased, we would like to increase revenue
and asset value.
Note:

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

Directing investments and management policies to enliven local communities in the medium to long-term
At our retail properties, we seek tenants that provide services, hold community involved events and use other measures to help enliven thelocal communities where our properties are located. We believe these activities will contribute to the medium to long-term growth in theasset value of these properties.
(C) Financing
We will establish a suitable financial foundation by examining numerous financing methods and selecting the optimum ones. These
decisions will reflect interest rates and other elements of the financial environment. Our goal is to select financing methods that result in the
optimum balance between financial stability and the financing cost.

6

(D) Disclosure of Information
Our policy concerning disclosure activities is to use extensive investor relations activities to distribute a broad range of information toinvestors and other related parties as well as to announce information as soon and as accurately as we can. We also distribute information
with awareness on ESG (Environmental, Social and Governance) for sustainable growth of unitholder interest. We use TDnet (Timely
Disclosure network) and press releases to meet the timely-disclosure requirements of the Tokyo Stock Exchange. In addition, we
proactively post information on our website (http://www.krr-reit.com/en/).
(E) Conflicts of Interest
In addition to managing the assets of KRR, KFM provides asset management services to other investment corporations and real estate
funds. KFM uses a “preferential right for acquisition opportunities” system for the property acquisition process. KFM has a pipeline
committee, which includes a compliance officer, and operates in accordance with rules. This system is structured to prevent improper
allocation of acquisition opportunities as well as conflicts of interest among the REIT and funds managed by KFM. Through thesemeasures, KFM is taking suitable actions regarding conflicts of interest.
(F) Important Subsequent Events
Not applicable

7(Reference Material)(A) Acquisition of Assets
KRR acquired one asset.
Property
number

Propertytype

Property nameLocation

Seller

T-24

SS

Konami Sports Club Shibuya

Shibuya-ku, Tokyo

Undisclosed (Note 2)

Acquisition price(million yen)(Note 1)

Appraisal value(million yen)

3,400

Acquisition date

3,430

April 27, 2018

“Acquisition price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of the various expenses (acquisition
expenses, property tax, city planning tax, consumption tax, etc.) required in the acquisition of the asset.
Undisclosed as KRR has not obtained consent from the seller.

Note 1:
Note 2:

KRR has contracted a purchase and sale agreement (note 1) on March 30, 2018 to acquire the following asset.
Property
number

Propertytype

Property nameLocation

SellerAnticipatedAppraisal value
acquisition price(millionyen) (Note 3)(million yen) (Note 2)

Scheduled date ofacquisition

Costco Wholesale Sapporo
Sapporo, Hokkaido Undisclosed (Note 4)
4,210
4,390 May 31, 2018
Warehouse
The purchase and sale agreement with the Seller on the acquisition of the asset falls under the category of forward commitment made by investment corporations as
stipulated in the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” ruled by the Financial Service Agency of Japan. In casethe agreement is terminated, either of the parties responsible for the termination shall compensate for the damage resulted from the termination by paying a penalty
corresponding to 20% of the acquisition price (excluding consumption taxes and local consumption taxes) to the other party.
“Anticipated acquisition price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of the various expenses(acquisition expenses, property tax, city planning tax, consumption tax, etc.) required in the acquisition of the asset.
“Appraisal value” represents as of March 1, 2018.
Undisclosed as KRR has not obtained consent from the seller.

R-11

SS

Note 1:

Note 2:
Note 3:Note 4:(B) Disposition of Assets
KRR disposed one asset.
Property
numberN-3
Note:

Propertytype

Property nameLocation

Buyer

Sale price(million yen) (Note)

Sale date

K’s Denki Nakagawa Tomita
Nagoya, Aichi Nippon Commercial
1,128 April 27, 2018
Development Co., Ltd.
(Land)“Sale price” represents the amount specified in the sale and purchase agreement for the trust beneficiary interests, exclusive of the various expenses (sale expenses,
property tax, etc.) required in the sale of the asset.
SS(C) Financing
KRR borrowed fund for the acquisition on April 27, 2018 (3,000 million yen for Series 21) and made decision to borrow fund for theacquisition on May 31, 2018 (4,000 million yen for Series 20). Furthermore, KRR borrowed for the repayment of the borrowings on April
19, 2018 (1,200 million yen for Series 22) and on April 23, 2018 (5,570 million yen for Series 23). KRR also partially prepaid 2,000 million
yen of 3,400 million yen short-term borrowings (Series 17-A) by issuing investment corporation bonds on April 27, 2018.
KRR also entered into agreements on commitment lines on March 31, 2018 to secure flexibility and stability in financing method, forpotential needs of funds as follows.
Counterparty

Limit of maximum amount(million yen)Contract period

Remarks

Sumitomo Mitsui Banking Corporation

1,000

April 1, 2018 to March 31, 2019

Unsecured, unguaranteed

Besides this commitment line, KRR has already established a 1,000 million yen commitment line with Mizuho Bank, Ltd. The total limit of
the commitment lines will remain at 2,000 million yen upon the execution of the new commitment line agreement.
(D) Investment Corporation Bonds
KRR decided to issue investment corporation bonds adopted at the board of directors’ meeting held on April 20, 2018 and the payment wascompleted on April 26, 2018. The details are provided as follows.
Kenedix Retail REIT Corporation 5th Series Unsecured Investment Corporation Bonds (Ranking pari passu among the specified
Name of investment
corporation bonds
Total amount of the bonds

investment corporation bonds) (The aforementioned investment corporation bonds shall hereafter be referred to as the “5th Series
Bonds.”)
2.0 billion yen

Interest rate

0.700% per annum

Payment date

April 26, 2018

Collateral / Guarantee

No collateral or guarantee is applicable, and no assets are specifically reserved as collateral for the Investment Corporation Bonds.

8

Wednesday, April 26, 2028
Investment Corporation Bonds may be purchased and cancelled at any time after the payment date, except for the case of service
Redemption method and maturity

regulations and other rules that the statutory or depository otherwise stipulates.
If the maturity date of the Investment Corporation Bonds falls on the bank holiday, the payment will be brought forward to theprevious bank business day.

Ratings
Fiscal agent, issuing agent and paying agent
Use of funds

A+ (Japan Credit Rating Agency, Ltd.)MUFG Bank, Ltd.
Total amount raised (approximate net balance) was 1,983 million yen. It was used for partial prepayment of borrowings, which
was borrowed on October 3, 2017.

9ii) Earnings Forecasts
For the fiscal period ending September 30, 2018 (from April 1, 2018 to September 30, 2018) and the fiscal period ending March 31, 2019(from October 1, 2018 to March 31, 2019), the earnings forecasts are estimated as set forth below.
Fiscal period ending September 30, 2018
Operating revenues

8,463 million yen

Operating Income

3,780 million yen

Ordinary income

3,166 million yen

Net Income

3,165 million yen

Distributions per unit

6,245 yen

Of the above, distributions in excess of earnings

10 yenFiscal period ending March 31, 2019
Operating revenues

8,217 million yen

Operating Income

3,756 million yen

Ordinary income

3,158 million yen

Net Income

3,157 million yen

Distributions per unit

6,230 yen

Of the above, distributions in excess of earnings

10 yenPlease refer to “Assumptions for the Earnings Forecasts for the Fiscal Periods Ending September 30, 2018 and March 31, 2019” set forth
below for information on current assumptions for the forecasts of operating results.
Note:

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

Assumptions for the Earnings Forecasts for the Fiscal Periods Ending September 30, 2018 and March 31, 2019
Item
Calculation period

Property portfolio

Operating revenues

Operating expenses

Assumptions
・The 7th fiscal period: April 1, 2018 to September 30, 2018 (183 days)
・The 8th fiscal period: October 1, 2018 to March 31, 2019 (182 days)
・It is assumed that there will be no changes (any acquisition of new properties or any sale of existing
properties, etc.) in property portfolio of 53 assets, which are 51 existing assets (the “existing assets”) as ofMarch 31, 2018, an asset acquired on April 27, 2018 and an asset acquiring on May 31, 2018 (the “assets
acquired in seventh fiscal period”) and an asset sold on April 27, 2018 by the end of the fiscal period
ending March 31, 2019.
・The actual property portfolio may change due to the acquisition of new properties other than the asset
acquired in the fifth fiscal period or the disposal of owned properties, etc.
・Operating revenues of the existing assets are based on leasing agreements as of March 31, 2018, trend oftenants, real estate market trends and other factors.
・Operating revenues of the assets acquired in the seventh fiscal period are based on operating revenues
calculated by the information provided by the sellers, leasing agreements as of March 31, 2018, trend oftenants, real estate market trends and other factors.
・Gain on the sale of 214 million yen is assumed for the fiscal period ending September 30, 2018 by disposing
K’s Denki Nakagawa Tomita (Land) as indicated above.
・Operating revenues are based on the assumption that there will be no rent in arrears or non-payments by thetenant.
・Property-related operating expenses other than depreciation are calculated based on historic data, etc., andthese costs reflect fluctuations in the costs, including leasing costs based on the leasing agreements.
・Depreciation expenses of 965 million yen, and 973 million yen are assumed for the fiscal periods ending
September 30, 2018 and March 31, 2019, respectively, using the straight-line depreciation method.
・690 million yen and 688 million yen of property related taxes are expected to be expensed during the fiscal
periods ending September 30, 2018 and March 31, 2019 respectively. For the properties acquired afterJanuary 1, 2018, property-related taxes are not expensed in the fiscal period ending March 31, 2018
because KRR reimbursed the seller, pursuant to the purchase agreement, for the pro rata portion of theproperty-related taxes. 31 million yen is expected for each fiscal period, when the property related taxes forthe properties are expensed.
・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.

10

Item

Assumptions

・The amortization of offering-related costs are expected to be expensed 61 million yen and 38 million yen for
the fiscal periods ending September 30, 2018, and March 31, 2019, respectively. It is assumed that the
Non-operating expenses
offering-related costs are amortized using the straight-line method over 3 years.
・For interest expenses and other debt-related costs, 546 million yen and 553 million yen are expected for the
fiscal periods ending September 30, 2018, and March 31, 2019, respectively.
・As of today, KRR has an outstanding balance of 95,100 million yen in borrowings and 7,000 million yen in
investment corporation bonds. It is assumed that KRR will undertake debt financing for a total of 4,000
million yen on May 31, 2018.
Borrowings and・The LTV ratio is expected to be 44.6% at the end of the period ending September 30, 2018 and March 31,
investment corporation bonds
2019 (rounded to the nearest tenth).
・The LTV ratio has been calculated according to the following formula:
LTV ratio = (Loans payable + Investment corporation bonds) / Total assets
・The forecasts are based on our assumption of 507,700 units issued as of today. It is assumed that there will
Investment units
be no changes in the number of investment units due to the new issuance of units until the end of the fiscal
period ending March 31, 2019.
・Distributions per unit (excluding excess of earnings per unit) are calculated in accordance with the
distribution policy outlined in our Articles of Incorporation.
・We assume that there is no effect from the changes in market value of swaps on the distributions per unit forDistributions per unit
the fiscal periods ending September 30, 2018 and March 31, 2019.
(excluding excess of earnings
per unit)・Actual distributions per unit (excluding excess of earnings per unit) may fluctuate due to various factors
including movements in investment assets, fluctuations in rental revenues caused by tenant replacements,
or unexpected repairs.
・We expect to record Allowance for Temporary Adjustment (ATA) to adjust the temporary differences
between treatment of certain transactions under Japanese GAAP and Japanese tax laws in relation to
Sunny Noma, which results from the depreciation of fixed term land lease right for business purposes, theexpensed interest from asset retirement obligations and deprecation of buildings, during the relevant period
Distributions in excess of(30 years starting from March 16, 2007). Although we assume no effect from the changes in the fair value
earnings per unitof swaps on the distributions per unit, we may not record ATA, depending on the fair value, which may
change due to the fluctuations in the interest rate market.
・KRR has a policy to distribute the amount of increase in ATA, in excess of its earnings. Distributions inexcess of earnings are expected to be 10 yen per unit and 10 yen per unit in the periods ending September
30, 2018 and March 31, 2019, respectively.
・Forecasts are based on the assumption that there will be no amendments to the law, taxation system,
accounting standards, public listing regulations, requirements of the Investment Trusts Association, Japan,
Othersetc. which may affect the aforementioned forecast figures.
・Forecasts are based on the assumption that there will be no unexpected significant changes in general
economic trends and real estate market trends or other conditions.

iii) Risk Factors
There are no significant changes to the “Investment Risks” in described in the Securities Registration Statement (submitted on December
25, 2017; prepared in Japanese only), the disclosure is omitted.

11

3. Financial Statements(1) Balance Sheets(in thousands of yen)

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
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
Investment securities
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Long-term deposits
Other
Total investments and other assets
Total non-current assets
Deferred assets
Organization costs
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

*1

*1

*1
*1

12

Fifth Fiscal Period(As of September 30, 2017)

Sixth Fiscal Period(As of March 31, 2018)

5,265,120
13,908,498
249,833
136,375
947,707
3,571
20,511,105

7,179,463
14,045,452
231,067
51,7884,255
21,512,027

54,528,155(3,197,167)
51,330,987
2,797,067(196,396)
2,600,670
214,510(16,977)
197,533
71,172(15,164)
56,007
149,241,987
14,291
203,441,477

54,980,817(4,053,797)
50,927,020
2,804,224(249,855)
2,554,369
214,510(22,623)
191,887
79,918(20,383)
59,534150,317,484
378
204,050,675

4,328,697
2,776
4,331,474

4,324,719
2,331
4,327,050

2,790
10,00060,256
808,924
157,110
22,553
1,061,634
208,834,586

10,00060,256780,184
157,110
19,879
1,027,429
209,405,155

20,26438,307224,185
282,757
229,628,449

15,22635,396
139,404
190,027
231,107,209

(in thousands of yen)

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

Fifth Fiscal Period(As of September 30, 2017)

Sixth Fiscal Period(As of March 31, 2018)574,194
12,670,000
3,850,000
339,816
18,1642,703
41,046
1,104,639
142,780
18,743,344

646,507
12,920,000
5,650,000
359,858
18,5303,641
312,160
1,121,432
117,043
21,149,173

5,000,000
76,380,000
12,933,293

94,368,543
113,111,887

5,000,000
75,530,000
12,788,402
23,62930,89593,372,927
114,522,100

113,399,022

113,399,022(9,754)(9,754)
113,389,267(9,754)(9,754)
113,389,267

3,104,740
3,104,740
116,494,008

3,175,962
3,175,962
116,565,229

22,55322,553
116,516,561
229,628,449

19,87919,879116,585,108
231,107,209

23,482
31,767*3*4

13

(2) Statements of Income and Retained Earnings
Fifth Fiscal Period(From April 1, 2017
to September 30, 2017)
Operating revenues
Rent revenue-real estate
Other lease business revenue
Dividends income
Total operating revenues
Operating expenses
Expenses related to rent business
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Financing-related expenses
Amortization of organization costs
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings(in thousands of yen)
Sixth Fiscal Period(From October 1, 2017
to March 31, 2018)*1*1

6,637,179
1,160,494
5,844
7,803,517

6,991,591
1,134,746
8,126,338*1

3,468,519
549,721
7,776
25,791
4,500
81,132
4,137,441
3,666,076

3,609,580
628,807
9,411
29,7134,500
76,233
4,358,245
3,768,092

59
59

63
1,472
1,535

369,045
5,414
80,322
5,066
1,906
96,175557,930
3,108,205
3,108,205

398,485
12,634
86,123
5,038
2,910
84,780589,972
3,179,655
3,179,655

3,681
3,681
3,104,524
216
3,104,740

3,848
3,848
3,175,807
155
3,175,962

14

(3) Statements of Changes in Net Assets
Fifth Fiscal Period (From April 1, 2017 to September 30, 2017)(in thousands of yen)
Unitholders' equity

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

94,256,390

Unitholders' capital
Deduction from unitholders' capital
Allowance for
Total deduction
temporaryfrom unitholders'difference
capitaladjustments(40,593)(40,593)

19,142,631

Surplus
Unitholders'
capital, net

Unappropriatedretained earnings

94,215,796

2,584,343

30,83830,83830,838Net income
Net changes of items otherthan unitholder’s equity
Total changes of items during
the period
Balance at the end of theperiodBalance at the beginning of theperiodChanges of items during theperiodIssuance of new
investment units

Total
unitholders'equity96,800,139

19,142,631(2,553,287)(2,553,287)(2,553,287)(30,838)(30,838)-

3,104,524

3,104,524

3,104,524

19,142,631

30,83830,83819,173,470

520,397

520,397

19,693,868*1 113,399,022(9,754)(9,754)

113,389,267

3,104,740

3,104,740

116,494,008

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

Total net assets

23,39523,39596,823,535

19,142,631

Dividends from surplus(2,553,287)

Reversal of allowance fortemporarydifference
adjustments-

Net income
Net changes of items otherthan unitholder’s equity
Total changes of items during
the period
Balance at the end of theperiod2,584,343

19,142,631

Dividends from surplus
Reversal of allowance fortemporarydifference
adjustments

Total
surplus3,104,524
(842)

(842)

(842)

(842)

(842)

19,693,026

22,55322,553

116,516,561

15

Sixth Fiscal Period (From October 1, 2017 to March 31, 2018)(in thousands of yen)
Unitholders' equity

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

SurplusTotal
surplusTotal
unitholders'equity3,104,740

3,104,740

116,494,008

Dividends from surplus(3,104,585)(3,104,585)(3,104,585)

Net income

3,175,807

3,175,807

3,175,807

Unitholders'
capitalBalance at the beginning of theperiodChanges of items during theperiodNet changes of items otherthan unitholder’s equity
Total changes of items during
the period
Balance at the end of theperiodBalance at the beginning of theperiodChanges of items during theperiod113,399,022(9,754)(9,754)

Unappropriatedretained earnings

113,389,267

-

-

-

-

71,221

71,221

71,221*1 113,399,022(9,754)(9,754)

113,389,267

3,175,962

3,175,962

116,565,229

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

Total net assets

22,55322,553

116,516,561

Dividends from surplus(3,104,585)

Net income

3,175,807

Net changes of items otherthan unitholder’s equity
Total changes of items during
the period
Balance at the end of theperiodUnitholders'
capital, net(2,674)(2,674)(2,674)(2,674)(2,674)68,547

19,87919,879116,585,108

16

(4) Statements of Cash Distributions(in yen)Fifth Fiscal Period(From April 1, 2017 to September 30, 2017)

Sixth Fiscal Period(From October 1, 2017 to March 31, 2018)

I.

Retained earnings at the end of period

3,104,740,879

3,175,962,601

II.

Total distributions

3,104,585,500

3,175,663,500

6,115

6,255

155,379

299,101

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amount equivalent
to 90% of its distributable profit as stipulated in Article
67-15 of the Special Taxation Measures Law and shall be
up to its profits as the maximum amount. Following thispolicy, KRR has decided that it shall distribute¥3,104,585,500 which is almost the entire amount ofretained earnings as the distributions of earnings .
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 39-2 of
KRR’s Articles of Incorporation. In the fifth fiscal period,
KRR has decided not to distribute cash in excess of
distributable profit.

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amount equivalent
to 90% of its distributable profit as stipulated in Article
67-15 of the Special Taxation Measures Law and shall be
up to its profits as the maximum amount. Following thispolicy, KRR has decided that it shall distribute¥3,175,663,500 which is almost the entire amount ofretained earnings as the distributions of earnings .
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 39-2 of
KRR’s Articles of Incorporation. In the sixth fiscal period,
KRR has decided not to distribute cash in excess of
distributable profit.

Distributions per unit
III.

Retained earnings brought forward to the next
periodMethod of calculating distribution amount17

(5) Statements of Cash Flows(in thousands of yen)Fifth Fiscal Period

Sixth Fiscal Period(From April 1, 2017
to September 30, 2017)(From October 1, 2017
to March 31, 2018)

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

3,108,205

3,179,655

Depreciation and amortization

885,529925,524

Amortization of organization costs

5,066

5,038

Amortization of investment corporation bond issuance costs

1,906

2,910

Amortization of investment unit issuance costs

96,17584,780Interest income

(59)

(63)

Interest expenses

374,459

411,119

Decrease (increase) in operating accounts receivable(66,839)

18,765Decrease (increase) in consumption taxes receivable(947,707)

947,707

Decrease (increase) in prepaid expenses(95,354)

84,586

Increase (decrease) in operating accounts payable

119,319(324)

Increase (decrease) in accounts payable-other59,447

18,937

Increase (decrease) in accrued consumption taxes(204,795)

271,114

Increase (decrease) in advances received

226,397

16,792

18,539(25,736)

Decrease (increase) in long-term prepaid expenses(160,857)

28,740Decrease (increase) in long-term deposits(32,150)-

Increase (decrease) in deposits received

Other(7,011)

14,532

Subtotal

3,380,270

5,984,080

59

63Interest expenses paid

(370,062)(410,726)

Income taxes paid

(4,253)(2,910)3,006,014

5,570,507(38,122,784)(1,471,805)(1,141)-

Interest income received

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Purchase of intangible assets in trust(3,812,078)-

Proceeds from investment securities

104,744966

Payments for lease and guarantee deposits in trust(24,220)-

Repayments of tenant leasehold and security deposits in trust(603,958)(299,385)

Proceeds from tenant leasehold and security deposits in trust

2,141,079

154,494

Proceeds from restricted bank deposits in trust

215,676

215,676(40,102,682)(1,400,052)

Proceeds from short-term loans payable

16,270,000

6,150,000

Payments of short-term loans payable(15,070,000)(5,900,000)

Proceeds from long-term loans payable

19,000,000

4,800,000-(3,850,000)

Proceeds from issuance of investment corporation bonds

2,977,457-

Proceeds from issuance of investment units

19,027,111-

Payments of dividends(2,552,953)(3,103,480)(1,903,480)

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

Payments of long-term loans payable

Net cash provided by (used in) financing activities

39,651,615

Net increase (decrease) in cash and cash equivalents

2,554,947

2,266,973

Cash and cash equivalents at the beginning of the period

14,296,903

16,851,851

16,851,851

19,118,825

Cash and cash equivalents at the end of the period*118

（6）Notes on Assumption of Going Concern
Not applicable（7）Summary of Significant Accounting Policies
1. Evaluation standards andevaluation method of assets

Securities
Other securitiesThose with no fair value
Cost method through moving-average method
Concerning silent partnership equity interests, the method of incorporating the amount of equity equivalent to the portion that
corresponds to the net gain or loss of the silent partnership is adopted.

2.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 70 years
Structures: 8 to 59 years
Machinery and equipment: 5 to 25 years
Tools, furniture and fixtures: 3 to 15 years(2) Intangible assets (including trust assets)
The straight-line method is applied.
(3) Long-term prepaid expenses
The straight-line method is applied.

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

4. Accounting for revenues andexpenses

Accounting for property-related taxes
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on acalendar year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes
corresponding to said period. Under Japanese tax regulations, the seller of the property is liable for these taxes on the property fromthe date of disposal to the end of the calendar year in which the property is disposed. The seller, however, is reimbursed by thepurchaser for these accrued property-related tax liabilities.
When KRR purchases properties, it typically allocates the portion of the property-related taxes related to the period following thepurchase date of each property through the end of the calendar year. The amounts of those allocated portions of the property-related
taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to 137,530
thousand yen as of September 30, 2017. There were no capitalized property-related taxes as of March 31, 2018.

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

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

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

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

19

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

Fifth Fiscal Period
As of September 30, 2017

Sixth Fiscal Period
As of March 31, 2018

Buildings in trust

2,707,274

2,708,512

Structures in trust

50,764

49,172Tools, furniture and fixtures in trust
Land in trust
Total
Secured liabilities

2,359

2,058

7,811,297

7,811,297

10,571,696

10,571,041

Fifth Fiscal Period
As of September 30, 2017

Tenant leasehold and security deposits in trust
Total

Sixth Fiscal Period
As of March 31, 2018
3,023,268

2,800,594

3,023,268

2,800,594

2. Commitment line contracts
KRR has commitment line contracts with the banks with which it does business.
(in thousands of yen)Fifth Fiscal Period
As of September 30, 2017
Total amount of commitment line contracts

Sixth Fiscal Period
As of March 31, 2018
2,000,000

Balance of loans payable outstanding
Remaining amount

2,000,000--

2,000,000

2,000,000* 3. Allowance for temporary difference adjustments
Fifth Fiscal Period (As of September 30, 2017)
1. Reasons, related assets, initial amount, allowance and reversal

Related assets, etc.

Reason for allowance

Buildings in trust,
Leasehold right in trust

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

Deferred gains orlosses on hedges

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

Initialamount

9,754

Total

Balance atthe beginningof the period

Allowance
during theperiod9,754(in thousands of yen)
Balance at
Reason for
the end of thereversal
periodReversalduring theperiod--9,754

30,83830,838-(30,838)-

40,59340,593-(30,838)

9,754

Changes infair value ofderivativetransactions-

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

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

Deferred gains or losses on hedges

Based on changes in the fair value of derivative transactions used as hedging instruments, the corresponding
amount is scheduled to be reversed.

Sixth Fiscal Period (As of March 31, 2018)
1. Reasons, related assets, initial amount, allowance and reversal

Related assets, etc.

Reason for allowance

Buildings in trust,
Leasehold right in trust

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

InitialamountBalance atthe beginningof the period

Allowance
during theperiod(in thousands of yen)
Balance at
Reason for
the end of thereversal
periodReversalduring theperiod

9,754

9,754

-

-

9,754

-

9,754

9,754

-

-

9,754

-

20

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

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

* 4. Minimum net assets prescribed in Article 67-4 of the Investment Trust Act(in thousands of yen)Fifth Fiscal Period
As of September 30, 2017

Sixth Fiscal Period
As of March 31, 2018
50,00050,000(Notes to Statements of Income and Retained Earnings)* 1. Breakdown of real estate rental revenues and expenses(in thousands of yen)Fifth Fiscal Period
From April 1, 2017
to September 30, 2017

Sixth Fiscal Period
From October 1, 2017
to March 31, 2018

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

5,361,334

5,697,578

Rental revenues from limited proprietary rights of land

938,809953,536

Common area charges

337,034

340,476

6,637,179

6,991,591

Parking space rental revenues

195,782

201,155

Utility charge reimbursement

661,928

617,448

Miscellaneous

302,783

316,141

Subtotal

1,160,494

1,134,746

7,797,673

8,126,338

808,367

846,915

Utilities

650,115597,633

Taxes

563,716

563,751

Repairs and maintenance

189,071

259,834

Insurance

13,507

13,954

Trust fees

21,13722,153

Depreciation

885,100

925,078

Others337,504

380,258

3,468,519

3,609,580

4,329,153

4,516,757

Subtotal
Other lease business revenue:

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

Total property-related expenses
C. Net operating income from real estate rental business（A-B）(Notes to Statements of Changes in Net Assets)* 1. Total number of authorized investment units and total number of investment units issued and outstanding
Fifth Fiscal Period
From April 1, 2017
to September 30, 2017

Sixth Fiscal Period
From October 1, 2017
to March 31, 2018

Total number of authorized investment units

5,000,000 units

5,000,000 units

Total number of investment units issued and outstanding

507,700 units

507,700 units

21

(Notes to Statements of Cash Flows)* 1. Reconciliation of balance sheet items to cash and cash equivalents at the end of period in the cash flows statements
Fifth Fiscal Period
From April 1, 2017
to September 30, 2017

(in thousands of yen)
Sixth Fiscal Period
From October 1, 2017
to March 31, 2018

Cash and deposits

5,265,120

7,179,463

Cash and deposits in trust

13,908,498

14,045,452

Restricted bank deposits in trust (Note)(2,321,767)(2,106,090)

Cash and cash equivalents

16,851,851

19,118,825

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)Fifth Fiscal Period
As of September 30, 2017

Sixth Fiscal Period
As of March 31, 2018

Due within 1 year

10,50010,500Due after 1 year

193,798

188,548

Total

204,298

199,048

Operating lease transactions (Lessor)
Future minimum lease income(in thousands of yen)Fifth Fiscal Period
As of September 30, 2017

Sixth Fiscal Period
As of March 31, 2018

Due within 1 year

8,424,336

8,798,586

Due after 1 year

63,081,778

61,221,050

Total

71,506,114

70,019,637（Notes to the Financial Instruments）
1. Overview(1) Policy for financial instruments
KRR procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans from financial institutions, issuance of investment corporation
bonds, 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 fundswith 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 are deposited.
Investment securities represent equity investments in a silent partnership and are exposed to credit risk of the issuer, property value fluctuation risk and interest rate fluctuation risk.
Loans payable and investment corporation bonds, which are made or issued primarily for the purpose of procuring funds for the acquisition of real estate and trust beneficiaryinterests in real estate and have a repayment date of a maximum of 10 years and 6 months for loans payable and also have a redemption date of a maximum of 9 years and 5 months
for investment corporation bonds as of March 31, 2018, the end of the sixth fiscal period, are exposed to liquidity risk where alternative funds may not be procured by the repayment
date. Also, loans payable with floating interest rates are exposed to interest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk for acertain portion of the loans payable.
Tenant leasehold and security deposits are deposits received from tenants, which are exposed to liquidity risks when the tenants vacate the properties.
(3) Risk management for financial instrumentsa.
Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored by deposits in non-interest bearing
ordinary savings accounts or with financial institutions with credit ratings above a certain level. Investment securities represent equity investments in a silent partnership and are
exposed to credit risk of the issuer. To manage this credit risk, the Investment Corporation regularly evaluates the results of operations and the financial condition of the issuer, etc. In
utilizing derivatives, KRR aims to mitigate counterparty risk such as by transacting with financial institutions with favorable ratings.
b.
Market risk
While loans payable with floating rates are exposed to interest rate fluctuation risk, such risk is monitored by adjusting the rate of the balance of loans payable with floating rates
against the total loans payable according to the financial environment, interest rate forecasts by continuous monitoring, etc. and by using derivatives, etc. While investment securities,
which are equity investments in a silent partnership, are exposed to credit risk of the issuer and property value fluctuation risk, the Investment Corporation periodically reviews thevalue of the property and financial condition of the issuer with regard to these investment securities. A risk management policy is established with regard to the execution andmanagement of derivatives and such transactions are conducted based on this policy.
c.
Liquidity risk
Though loans payable 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.

22

(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value is reasonably estimated. Sincevarious assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in a different fair value.
2. Estimated fair value of financial instruments
The carrying value of financial instruments on the balance sheets and estimated fair value are shown in the following table. Items whose fair values are difficult to determine are notincluded in the following table (Note 2).
Fifth Fiscal Period
As of September 30, 2017

(1) Cash and deposits(2) Cash and deposits in trust
Total(1) Short-term loans payable(2) Current portion of long-term loans payable(3) Investment corporation bonds(4) Long-term loans payable(5) Tenant leasehold and security deposits in trust
Total
Derivative transactions

Carrying amount
5,265,120
13,908,498
19,173,618
12,670,000
3,850,000
5,000,000
76,380,000
2,887,549
100,787,549
22,553

Estimated fair value
5,265,120
13,908,498
19,173,618
12,670,000
3,837,976
4,976,700
76,284,508
2,886,747
100,655,932
22,553(in thousands of yen)
Difference(12,023)(23,300)(95,491)(802)(131,617)-

Carrying amount
7,179,463
14,045,452
21,224,916
12,920,000
5,650,000
5,000,000
75,530,000
2,635,158
101,735,158
19,879Estimated fair value
7,179,463
14,045,452
21,224,916
12,920,000
5,650,527
4,991,400
75,642,540
2,630,225
101,834,693
19,879(in thousands of yen)
Difference
527(8,600)112,540(4,933)
99,534-

Sixth Fiscal Period(1) Cash and deposits(2) Cash and deposits in trust
Total(1) Short-term loans payable(2) Current portion of long-term loans payable(3) Investment corporation bonds(4) Long-term loans payable(5) Tenant leasehold and security deposits in trust
Total
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.
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) Current portion of long-term loans payable and (4) Long-term loans payable
Among these items, the fair value of loans payable with fixed interest rates is calculated based on the present value, which is the total amount of principal and interest discounted by theestimated interest rate to be applied in the event that KRR conducts new loans of the same type. As for the fair value of loans payable with floating interest rates, it is based on the
carrying amount since market interest rates are reflected in the short term and the fair value is believed to approximate the carrying amount as the credit standing of KRR has notchanged significantly since the loans were made. (However, the fair value of long-term loans payable subject to the special treatment for interest-rate swaps is based on the present
value of the total of principal and interest, accounted for together with the applicable interest-rate swaps, discounted by the estimated interest rate to be applied in the event that KRR
conducts new loans payable of the same type.)(3) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices.
(5) Tenant leasehold and security deposits in trust
The fair value is determined based on the present value of contractual cash flows discounted at the discount rate into which the period to the repayment date and the credit risk arereflected.
Derivative transactions
Please refer to “Notes to Derivative Transactions”.
Note2: Financial instruments whose fair values are extremely difficult to determineClassification(in thousands of yen)Fifth Fiscal Period
As of September 30, 2017

Investment securities (*1)

2,790

Tenant leasehold and security deposits in trust (*2)

10,045,743

Total
10,048,533(*1) Fair values of investment securities are not subject to disclosure of fair value as they have no market price and their fair values are recognized to be extremely difficult to grasp.
(*2) It is extremely difficult to determine their fair value based on estimated future cash flows because no quoted market price is available and the repayment dates of those deposits
are not certain. Therefore, tenant leasehold and security deposits in trust are not included in the above quantitative information.

23

(in thousands of yen)
Sixth Fiscal Period
As of March 31, 2018

Classification
Tenant leasehold and security deposits in trust (*)

10,153,243

Total
10,153,243(*) It is extremely difficult to determine their fair value based on estimated future cash flows because no quoted market price is available and the repayment dates of those deposits
are not certain. Therefore, tenant leasehold and security deposits in trust are not included in the above quantitative information.
Note 3: Redemption of monetary claims scheduled to be due after the balance sheet date
Fifth Fiscal Period
As of September 30, 2017
(in thousands of yen)

Cash and deposits
Cash and deposits in trust
Total

Due in 1 year or
less
5,265,120
13,908,498
19,173,618

Due after 1 year
through 2 years

Due in 1 year or
less
7,179,463
14,045,452
21,224,916

Due after 1 year
through 2 years

Due after 2 years
through 3 years-

Due after 3 years
through 4 years-

Due after 4 years
through 5 years-

Due after 5 years--

Sixth Fiscal Period
As of March 31, 2018
(in thousands of yen)

Cash and deposits
Cash and deposits in trust
Total

Due after 2 years
through 3 years-

Due after 3 years
through 4 years-

Due after 4 years
through 5 years-

Due after 5 years--

Note 4: Redemption of long-term loans payable and other interest-bearing debt scheduled to be due after the balance sheet date
Fifth Fiscal Period
As of September 30, 2017
(in thousands of yen)

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

Due in 1 year or
less
12,670,000
3,850,000

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

6,980,000

7,000,000

13,300,000

2,000,000
7,000,000

3,000,000
42,100,000

435,430

435,430

435,430

435,430

435,430

110,793

16,955,430

7,415,430

7,435,430

13,735,430

9,435,430

45,210,793

Sixth Fiscal Period
As of March 31, 2018
(in thousands of yen)

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

Due in 1 year or
less
12,920,000
5,650,000

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

9,380,000

7,000,000

1,000,000
13,300,000

1,000,000
9,050,000

3,000,000
36,800,000

435,430

435,430

435,430

435,430

224,712103,796

19,005,430

9,815,430

7,435,430

14,735,430

10,274,712

39,903,796

24

(Notes to Derivative Transactions)(1) Transactions not subject to hedge accounting
Fifth Fiscal Period (As of September 30, 2017) and Sixth Fiscal Period (As of March 31, 2018): Not applicable(2) Transactions subject to hedge accounting
Fifth Fiscal Period
As of September 30, 2017
Hedge
accounting
methodPrinciple method

Special treatment
of interest-rate
swaps

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

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
yearLong-term loans
payable16,940,000

16,940,000

Long-term loans
payable44,900,000

41,050,000

Fair value(in thousands of yen)

22,553*Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions

-

Total
61,840,000
57,990,000
22,553*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value is included in the fair value of thehedged long-term loans payable. (Please refer to “Notes to Financial Instruments” (Note1) Methods to determine the estimated fair value of financial instruments and matters related toderivative transactions; Liabilities (2) Current portion of long-term loans payable and (4) Long-term loans payable.)
Sixth Fiscal Period
As of March 31, 2018
Hedge
accounting
methodPrinciple method

Special treatment
of interest-rate
swaps

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

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
yearLong-term loans
payable19,490,000

19,490,000

Long-term loans
payable41,050,000

35,400,000

Fair value(in thousands of yen)

19,879*Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions

-

Total
60,540,000
54,890,000
19,879*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value is included in the fair value of thehedged long-term loans payable. (Please refer to “Notes to Financial Instruments” (Note1) Methods to determine the estimated fair value of financial instruments and matters related toderivative transactions; Liabilities (2) Current portion of long-term loans payable and (4) Long-term loans payable.)(Notes to the Related-Party Transactions)
1．Parent Company, major corporate unitholders and other
Fifth Fiscal Period (From April 1, 2017 to September 30, 2017) and Sixth Fiscal Period (From October 1, 2017 to March 31, 2018): Not applicable
2．Affiliated companies and other
Fifth Fiscal Period (From April 1, 2017 to September 30, 2017) and Sixth Fiscal Period (From October 1, 2017 to March 31, 2018): Not applicable
3．Fellow subsidiary companies and other
Fifth Fiscal Period (From April 1, 2017 to September 30, 2017) and Sixth Fiscal Period (From October 1, 2017 to March 31, 2018): Not applicable
4．Directors, major individual unitholders and other
Fifth Fiscal Period (From April 1, 2017 to September 30, 2017) and Sixth Fiscal Period (From October 1, 2017 to March 31, 2018): Not applicable(Notes to the Tax-Effect Accounting)
1. The significant components of deferred tax assets and liabilities:(in thousands of yen)
Sixth Fiscal Period
As of March 31, 2018

Fifth Fiscal Period
As of September 30, 2017
Deferred tax assets:
Enterprise tax payable

222

234

Amortization of leasehold right in trust

6,703

7,959

Depreciation
Asset retirement obligations

2,412
7,418

2,865
7,464

Subtotal deferred tax assets

16,756

18,524

Valuation allowance(16,756)(18,524)

Total deferred tax assets

-

-

25

2. The significant differences between the statutory tax rate and the effective tax rate:
Fifth Fiscal Period
As of September 30, 2017

(unit: %)Sixth Fiscal Period
As of March 31, 2018

Statutory tax rate

34.81

34.81

Deductible cash distributions(34.77)(34.77)

Others0.08

0.08

Effective tax rate

0.12

0.12

(Notes to Asset Retirement Obligations)
Asset retirement obligations reported on balance sheets
1. Summary of the asset retirement obligations
KRR has recognized the original state restoration obligations assumed under the fixed-term business-purpose land leasehold agreement as the asset retirement obligations inconnection with Sunny Noma acquired on February 10, 2015.
2. Method of calculating asset retirement obligations
Asset retirement obligations are calculated based on a discount rate of 1.256% after the useful life has been estimated to be 22 years and two months based on the time period from thedate of acquisition to the expiration of the agreement.
3. Changes in the amount of applicable asset retirement obligations consisted of the following(in thousands of yen)Fifth Fiscal Period
Sixth Fiscal Period
From April 1, 2017
From October 1, 2017
to September 30, 2017
to March 31, 2018
Balance at the beginning of the period
23,33523,482
Accretion adjustment
146
147
Balance at the end of the period
23,482
23,629(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)
Fifth Fiscal Period (From April 1, 2017 to September 30, 2017)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on the statement of income andretained earnings.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income and retained earnings.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant and equipment on the balance
sheets.
3. Information about each major customer
Disclosure is omitted because no net sales to a single external customer accounts for more than 10% of the operating revenue on the statements of income and retained earnings.
Sixth Fiscal Period (From October 1, 2017 to March 31, 2018)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on the statement of income andretained earnings.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income and retained earnings.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant and equipment on the balance
sheets.
3. Information about each major customer
Disclosure is omitted because no net sales to a single external customer accounts for more than 10% of the operating revenue on the statements of income and retained earnings.

26

(Notes to Investment and Rental Properties)
KRR owns retail properties for rental purposes mainly in the four major metropolitan areas and other regional areas of Japan.
The book value and fair value concerning the above real estate for rental purposes are as follows.
(in thousands of yen)
Sixth Fiscal Period
From October 1, 2017
to March 31, 2018

Fifth Fiscal Period
From April 1, 2017
to September 30, 2017
Book value
Balance at the beginning of the period

166,782,022

Changes during the period

40,989,196

207,771,218
605,105

Balance at the end of the period

207,771,218

208,376,323

Fair value at the end of the period
218,766,000
220,765,000
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 fifth fiscal period, the principal increase was acquisitions of real estate trust
beneficiary interests in 9 properties totaling 41,517,461 thousand yen and the principal decrease was depreciation amounting to 884,953 thousand yen and during thesixth fiscal period, the principal increase was the acquisitions of real estate trust beneficiary interests in 1 property totaling 1,280,257 thousand yen and the principal
decrease was depreciation amounting to 924,931 thousand yen.
Note 3: The fair value at the end of the period is the appraisal value determined by outside appraisers. In addition, the fair value of K’s Denki Nakagawa Tomita (Land) as ofMarch 31, 2018, which was sold on April 27, 2018, is based on the sales price (1,128,000 thousand yen) under the trust beneficiary interest sales contracts enteredinto on November 14, 2017.
The profit or loss for the period under review concerning investment and rental properties is indicated under “Notes to Statements of Income and Retained Earnings.”(Notes to Per Unit Information)
Fifth Fiscal Period
From April 1, 2017
to September 30, 2017
Net asset value per unit

Sixth Fiscal Period
From October 1, 2017
to March 31, 2018229,498 yen

229,633 yen

Net income per unit
6,219 yen
6,255 yenNote1: Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during the period. Net income per unit after
adjusting for residual units is not included because there were no residual investment units.
Note2: The basis for calculating net income per unit is as follows:
Fifth Fiscal Period
Sixth Fiscal Period
From April 1, 2017
From October 1, 2017
to September 30, 2017
to March 31, 2018
Net income (in thousands of yen)

3,104,524

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

3,175,807--

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

3,104,524

3,175,807

Weighted average number of units during the period (units)499,147

507,700(Notes to Significant Subsequent Events)
Not applicable(Omission of Disclosure)Notes to Securities, Equity-Method Income and Retained Earnings, and Retirement Payment are omitted as immaterial to disclose.

27

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

Private placement forincorporation

February 9, 2015

750

750

150

150

(Note 1)

Public offering

254,250

255,000

56,43056,580(Note 2)

March 11, 2015

Capital increase throughthird-party allocation

5,750

260,750

1,276

57,857(Note 3)October 1, 2015

Public offering

88,750349,500

18,54776,404(Note 4)

October 21, 2015

Capital increase throughthird-party allocation

5,750

355,250

1,201

77,606(Note 5)

April 20, 2016

Public offering

64,000419,250

15,856

93,463(Note 6)

May 18, 2016

Capital increase throughthird-party allocation

3,200

422,450

792

94,256(Note 7)

April 18, 2017

Public offering

81,250503,700

18,244

112,500(Note 8)May 17, 2017

Capital increase throughthird-party allocation

4,000

507,700

898

113,399(Note 9)Note 1:
Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:Note 8:Note 9:Note 10:Issued at issue price of 200,000 yen per unit for incorporation.
Issued at issue price of 230,000 yen per unit (issue amount of 221,950 yen per unit) for acquisition of new properties.
Issued at issue amount of 221,950 yen per unit for repayment of borrowings.
Issued at issue price of 216,543 yen per unit (issue amount of 208,991 yen per unit) for acquisition of new properties.
Issued at issue amount of 208,991 yen per unit for repayment of borrowings.
Issued at issue price of 256,717 yen per unit (issue amount of 247,764 yen per unit) for acquisition of new properties.
Issued at issue amount of 247,764 yen per unit for repayment of borrowings.
Issued at issue price of 232,537 yen per unit (issue amount of 224,547 yen per unit) for acquisition of new properties.
Issued at issue amount of 224,547 yen per unit for repayment of borrowings.
Distributions in excess of earnings for the allowance for temporary difference adjustments are not considered.

28

4. Resignation/Appointment of the Directors(1) Resignation/Appointment of the Director of KRR
Not applicable(2) Resignation/Appointment of the Director of KFM
KFM has changed its auditor and director as follows.
Appointed: Auditor (Part-time), Keizo Katayama (as of March 27, 2018)
Director, Jiro Takeda (as of April 1, 2018)
Retired:

Auditor (Part-time), Tetsuo Ueda (as of March 27, 2018)
Director, Naokatsu Uchida (as of March 31, 2018)29

5. Reference Information(1) Component of Assets
Type ofspecified asset

Areas(Note 1)

Property type

Fifth fiscal period
as of September 30, 2017
Total amount held
Ratio
(Millions of Yen)(%)
(Note 2)
(Note 3)Tokyo
metropolitan area
Greater Osaka
area
Greater Nagoya
area

Sixth fiscal period
as of March 31, 2018
Ratio
Total amount held
(Millions of Yen)(%)
(Note 2)
(Note 3)86,65537.7

87,73438.0

44,945

19.6

44,81819.4

22,162

9.7

22,085

9.6

Fukuoka area

8,133

3.5

8,092

3.5

Ordinance-design
ated cities, corecities and otherareas

45,87420.0

45,645

19.8

-

-

-

-

-

Total of trust beneficiary interests in real estate

207,771

90.5

208,376

90.2

Investment securities (Note 4)

2

0.0

-

-

Bank deposits and other assets

21,854

9.5

22,7309.8

Total assets

229,628100.0

231,107

100.0

Trust beneficiaryinterest in real estate

Neighborhood,community andother shopping
centers for daily
needs

Other retailproperties

Fifth fiscal period
as of September 30, 2017
Ratio
Amount(%)(Millions of Yen)
(Note 3)

Sixth fiscal period
as of March 31, 2018
Ratio
Amount(%)(Millions of Yen)
(Note 3)

Total liabilities (Note 5)

113,11149.3

114,522

49.6

Total net assets (Note 5)

116,51650.7

116,58550.4

229,628100.0

231,107

100.0

Total assets

Note 3:Note 4:“Areas” are categorized to the Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area and Ordinance-designated cities, core cities
and other areas. References to “Tokyo metropolitan area” are to the area that consists of Tokyo, Kanagawa, Saitama and Chiba prefectures. References to the “Greater
Osaka area” are to the area that consists of Osaka, Kyoto, Hyogo, Nara and Shiga prefectures. References to the “Greater Nagoya area” are to the area that consists of
Aichi, Gifu and Mie prefectures. References to the “Fukuoka area” are to the area that consists of Fukuoka prefecture. “Ordinance-designated cities, core cities and otherareas” refers to cities designated by government ordinance, which have populations of 500,000 persons or more, core cities, which have populations of 200,000 persons
or more, and to other areas with a population fewer than 200,000 persons, which we believe will have suitable customer traffic from surrounding areas.
“Total amount held” is the amount allocated in the balance sheets as of the end of fiscal period (figures are on a net book value basis after deducting depreciation), and isrounded down to the nearest million.
“Ratio” is the ratio of the amount allocated in the balance sheets to the total assets rounded to the nearest tenth.
“Investment securities” is the silent partnership equity interest of JRP8 GK.

Note 5:“Total liabilities” and “Total net assets” are those on the balance sheets.

Note 1:

Note 2:30

(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 March 31, 2018.
Location(City or Ward,
Prefecture)(Note 2)

Book value(in millions)

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

Trust beneficiaryinterest in real estate

14,863

15,20014,848

7.2

Urayasu, Chiba

Trust beneficiaryinterest in real estate

8,513

8,890

8,063

3.9

Passaggio Nishiarai

Adachi ward, Tokyo

Trust beneficiaryinterest in real estate

5,824

6,440

5,850

2.8

Daikanyama Address
Dixsept

Shibuya ward, Tokyo

Trust beneficiaryinterest in real estate

5,405

6,130

5,390

2.6

4,370

4,940

4,470

2.2

3,982

4,340

4,000

1.9

3,591

3,830

3,600

1.7

2,531

2,750

2,586

1.3

4,890

5,420

4,815

2.3

3,210

3,510

3,169

1.5

3,043

3,050

3,000

1.5

1,726

1,780

1,700

0.8

1,462

1,430

1,442

0.7

751

799

760

0.4

3,433

3,810

3,360

1.6

Property
number

Property
type(Note 1)

Property name

T-1

CSC

Fululu Garden Yachiyo

Yachiyo, Chiba

MONA Shin-Urayasu

T-2

T-3

T-4

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

T-5

NSC

Unicus Ina

Kitaadachi-gun,
Saitama

T-6

NSC

Yorktown
Kita-Kaname

Hiratsuka, Kanagawa

T-7

NSC

Unicus Yoshikawa

Yoshikawa, Saitama

T-8

SS

T-9

NSC

T-10

SS

T-11

Ownership
form

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

Share
(%)
(Note 5)

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

Saitama, Saitama

NSC

Unicus Kamisato (Land)

Kodama-gun, Saitama

T-12

NSC

Unicus Konosu (Land)

Konosu, Saitama

T-13

SM

Inageya Yokohama
Minamihonjuku (Land)

Yokohama, Kanagawa

T-14

SM

Gourmet City Chiba-Chuo

Chiba, Chiba

T-15

NSC

Nakamachidai Tokyu Store Yokohama, Kanagawa

T-16

SS

Central Wellness Club
Nagatsuta Minamidai

Yokohama, Kanagawa

Trust beneficiaryinterest in real estate

1,779

1,900

1,724

0.8

T-17

SM

Life Kameido

Koto ward, Tokyo

Trust beneficiaryinterest in real estate

1,464

1,510

1,450

0.7

T-18

NSC

Yokohama, Kanagawa

Trust beneficiaryinterest in real estate

4,228

4,310

4,170

2.0

T-19

NSC

Funabashi, Chiba

Trust beneficiaryinterest in real estate

3,443

3,520

3,416

1.7

T-20

NSC

Kawamachi Yahagi Mall

Chiba, Chiba

3,121

3,210

3,097

1.5

T-21

SS

Prime Square Jiyugaoka

Meguro-ku, Tokyo

2,916

2,830

2,820

1.4

T-22

SS

Round1 Ichikawa-Onitaka

Ichikawa, Chiba

1,897

1,960

1,880

0.9

T-23

SM

Ozeki Tokiwadai

Itabashi ward, Tokyo

1,279

1,340

1,263

0.6

O-1

NSC

Blumer Maitamon

Kobe, Hyogo

8,316

9,350

8,389

4.1

O-2

SM

Life Takadono (Land)

Osaka, Osaka

2,727

3,090

2,685

1.3

O-3

NSC

Piago Kahma Home
Center Omihachiman

Omihachiman, Shiga

2,141

2,430

2,140

1.0

O-4

NSC

Blumer HAT Kobe

Kobe, Hyogo

11,455

11,50011,000

5.3

Carino Esaka

Suita, Osaka

Trust beneficiaryinterest in real estate

6,664

6,910

6,555

3.2

COMBOX Komyoike

Izumi, Osaka

Trust beneficiaryinterest in real estate

6,370

6,810

6,450

3.1

Hankyu Oasis
Hirakatadeguchi
Welcia Kishiwadakamori(Land)
Life
Nishi-Tengachaya

Hirakata, Osaka

1,314

1,330

1,280

0.6

497

488

487

0.2

1,558

1,650

1,505

0.7

O-5
O-6

Urban
Station-Front
SC
Urban
Station-Front
SC

O-7

SM

O-8

SS

O-9

SM

Totsuka-Fukaya Shopping
Center (Land)
Yumemachi Narashinodai
MallNerima ward, Tokyo

Fujisawa, Kanagawa

Kishiwada, Osaka
Osaka, Osaka

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

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate31Location(City or Ward,
Prefecture)(Note 2)

Book value(in millions)

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

3,772

3,870

3,723

1.8

2,351

2,680

2,311

1.1

2,154

2,320

2,174

1.1

907

1,010

889

0.4

7,086

7,310

7,140

3.5

1,390

1,440

1,370

0.7

8,195

7,950

7,911

3.8

1,457

1,590

1,497

0.7

5,057

5,390

5,020

2.4

1,577

1,690

1,515

0.7

9,937

11,50010,046

4.9

1,467

1,570

1,469

0.7

888

936

898

0.4

4,322

5,060

4,180

2.0

3,301

3,330

3,252

1.6

848

874

830

0.4

Trust beneficiaryinterest in real estate

5,632

5,950

5,720

2.8

Hamamatsu, Shizuoka

Trust beneficiaryinterest in real estate

4,155

4,340

4,010

1.9

Seiyu Rakuichi Moriya(Land)Moriya, Ibaraki

Trust beneficiaryinterest in real estate

4,320

4,220

4,111

2.0

Sun Street Hamakita

Hamamatsu, Shizuoka

Trust beneficiaryinterest in real estate

10,768

11,16010,746

5.2

208,376

220,647

206,176100.0

Property
number

Property
type(Note 1)

O-10

NSC

N-1

SS

N-2

NSC

N-3

SS

N-4

SS

N-5

SS

N-6

NSC

F-1

SM

F-2

SS

F-3

NSC

R-1

NSC

R-2

SS

R-3

SS

R-4

NSC

Ashico Town Ashikaga

Ashikaga, Tochigi

R-5

NSC

Sendai, Miyagi

R-6

SM

Yorktown
Shinden-Higashi
Kasumi Technopark
SakuraR-7

Urban
Station-Front
SC

Solala Plaza

Sendai, Miyagi

R-8

NSC

P-1 Plaza Tenno

R-9

NSC

R-10

NSC

Property nameMillion Town Tsukaguchi(Land)
Kahma Home Center
Nakagawa Tomita (Land)
Valor
Ichinomiya-Nishi
K’s Denki
Nakagawa Tomita (Land)
Homecenter Kohnan
Sunadabashi
K’s Denki
Shin-Moriyama (Land)
Resora Obu Shopping
Terrace
Sunny Noma

Amagasaki, Hyogo
Nagoya, Aichi
Ichinomiya, Aichi
Nagoya, Aichi
Nagoya, Aichi
Nagoya, Aichi
Obu, Aichi
Fukuoka, Fukuoka

Round1 Stadium
Hakata-Hanmichibashi
Kurume-Nishi Shopping
CenterRoseo Mito

Fukuoka, Fukuoka
Kurume, Fukuoka
Mito, Ibaraki

K’s Denki Aomori
HontenSuper Sports Xebio
Aomori-Chuo

Aomori, Aomori
Aomori, Aomori

Tsukuba, Ibaraki

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

Total
Note 1:

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

Share(%)(Note 5)

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

32ii) Overview of tenants as of March 31, 2018
The following summarizes leasable area, leased area, occupancy rate, number of tenants, annual rent, and amount of security deposits
Property
number

Property nameLeasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

Occupancy
rate(%)(Note 3)

Number oftenants(Note 4)

Annual rent
(thousands)(Note 5)

Amount of
security
deposits(millions)(Note 6)

T-1

Fululu Garden Yachiyo

77,057.56

76,148.98

98.8

40

1,110,086

2,910

T-2

MONA Shin-Urayasu

9,592.65

8,421.16

87.8

1(58)

541,528

587

T-3

Passaggio Nishiarai

10,528.25

10,384.55

98.6

1(41)

393,089

240

T-4

Daikanyama Address Dixsept

5,056.39

4,950.90

97.9

1(27)

361,687

318

T-5

Unicus Ina

13,462.71

13,462.71

100.0

1

279,002

141

T-6

Yorktown Kita-Kaname

100.0

1

T-7

Unicus Yoshikawa

10,648.27

10,648.27

100.0

1(11)

T-8

Sports Club Renaissance Fujimidai

3,120.87

3,120.87

100.0

1

T-9

Super Viva Home Iwatsuki (Land)

67,325.95

67,325.95

100.0

1

T-10

K’s Denki Shonan-Fujisawa (Land)

15,578.58

15,578.58

100.0

1

T-11

Unicus Kamisato (Land)

67,854.47

67,854.47

100.0

1

145,220

70

T-12

Unicus Konosu (Land)

19,329.00

19,329.00

100.0

1

83,014

39

T-13

Inageya Yokohama Minamihonjuku (Land)

4,405.41

4,405.41

100.0

1

T-14

Gourmet City Chiba-Chuo

3,488.77

3,488.77

100.0

1

T-15

Nakamachidai Tokyu Store

5,968.71

5,968.71

100.0

1

T-16

Central Wellness Club Nagatsuta Minamidai

3,996.70

3,996.70

100.0

2

T-17

Life Kameido

2,929.58

2,929.58

100.0

1

T-18

Totsuka-Fukaya Shopping Center (Land)

14,092.51

14,092.51

100.0

2

T-19

Yumemachi Narashinodai Mall

7,827.96

7,827.96

100.0

1(14)

227,309155

T-20

Kawamachi Yahagi Mall

6,397.05

6,397.05

100.0

1(12)

193,105

106

T-21

Prime Sqyare Jiyugaoka

3,512.5

3,512.55

100.0

2

T-22

Round1 Ichikawa-Onitaka

11,963.61

11,963.61

100.0

1

T-23

Ozeki Tokiwadai

1,217.02

1,217.02

100.0

1

O-1

Blumer Maitamon

30,290.55

29,797.70

98.4

51

O-2

Life Takadono (Land)

4,437.07

4,437.07

100.0

1(Note 7)(Note 7)

O-3

Piago Kahma Home Center
Omihachiman

14,313.00

14,313.00

100.0

2

(Note 7)(Note 7)O-4

Blumer HAT Kobe

23,775.88

23,118.86

97.2

1(39)

678,239

858

O-5

Carino Esaka

7,540.58

7,540.58

100.0

1(31)

305,446260

O-6

COMBOX Komyoike

25,530.44(Note 8)25,530.44

100.0

1

452,310(Note 9)O-7

Hankyu Oasis Hirakatadeguchi

2,960.38

2,960.38

100.0

1

O-8

Welcia Kishiwadakamori (Land)3,033.45

3,033.45

100.0

1

423
(Note 10)(Note 7)(Note 7)O-9Life Nishi-Tengachaya

2,679.52

2,679.52

100.0

1

O-10

Million Town Tsukaguchi (Land)8,264.46

8,264.46

100.0

1(Note 7)(Note 7)33

(Note 7)(Note 7)261,267(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)203
(Note 7)(Note 7)141

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

116,400(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)141
(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)688,104(Note 7)(Note 7)417

89,740(Note 7)248
(Note 7)

Property nameLeasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

N-1

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

N-2

Valor Ichinomiya-Nishi

N-3

K’s Denki Nakagawa Tomita (Land)

N-4

Homecenter Kohnan Sunadabashi

N-5

K’s Denki Shin-Moriyama (Land)

N-6

Resora Obu Shopping Terrace

19,990.40

F-1

Sunny Noma

F-2

Property
number

Occupancy
rate(%)(Note 3)

Number oftenants(Note 4)

Annual rent
(thousands)(Note 5)

Amount of
security
deposits(millions)(Note 6)100.0

1(Note 7)(Note 7)100.0

1(Note 7)(Note 7)100.0

1(Note 7)(Note 7)100.0

1(Note 7)(Note 7)100.0

1(Note 7)(Note 7)

19,820.82

99.2

1(42)

2,814.67

2,814.67

100.0

1(Note 7)(Note 7)

Round1 Stadium Hakata-Hanmichibashi

28,026.61

28,026.61

100.0

1

(Note 7)(Note 7)

F-3

Kurume-Nishi Shopping Center

4,641.10

4,641.10

100.0

4104,61762

R-1

Roseo Mito

48,296.15

48,161.79

99.7

1(22)

691,307

459

R-2

K’s Denki Aomori Honten

10,083.41

10,083.41

100.0

1

(Note 7)

R-3

Super Sports Xebio Aomori-Chuo

100.0

1

(Note 7)

R-4

Ashico Town Ashikaga

100.0

1(29)

9,447.48(Note 7)

9,447.48(Note 7)

20,329.07(Note 7)(Note 7)

20,329.07(Note 7)(Note 7)65,616.31

65,616.31

R-5

Yorktown Shinden-Higashi

12,768.77

12,768.77

100.0

2

R-6

Kasumi Technopark Sakura

2,047.65

2,047.65

100.0

1

R-7

Solala Plaza

100.0

1

R-8

P-1 Plaza Tenno

100.0

7

R-9

Seiyu Rakuichi Moriya (Land)

100.0

1

R-10

Sun Street Hamakita(Note 7)(Note 7)

12,030.83

Total(Note 7)

12,030.83(Note 7)

485,223

322

174(Note 7)399,741(Note 7)(Note 7)(Note 7)334
(Note 7)24
(Note 7)

270,720(Note 7)273
(Note 7)49,023.34(Note 11)

48,619.71(Note 11)

99.2

1(53)

862,994(Note 11)494
(Note 11)

866,425.22

862,238.52

99.5

522

13,443,412

12,788Note 10:“Leasable area” is equivalent to gross floor area of space that we consider to be available for lease in each property, rounded to the nearest tenth. For land-only properties,
leasable area is equivalent to land area as described in the property registry.
“Leased area” indicates the total leased area based on the lease agreements for each property as of March 31, 2018. As for lease agreements of buildings, the leased area of
warehouses and land are excluded. As for pass-through type master leases, the leased area based on the lease agreements between the master lessee and the end-tenants asof September 30, 2017 is shown. As for sublease type master leases, the leased area to the master lessee is shown.
“Occupancy rate” is calculated by dividing leased area by leasable area as of March 31, 2018, rounded to the nearest tenth. The “Total” of “Occupancy rate” represents theaverage occupancy rate of all properties in the initial portfolio.
“Number of tenants” is based upon the number of lease agreements with respect to the building(s) (or land in the case of land-only properties with leasehold interest) on
each such property used mainly as stores and offices, as of March 31, 2018. Where one lessee leases more than one section of the property, the lessee is counted as a tenant
for each section leased within the property. Where pass-through type master lease agreements are entered into, the number of master lessees is with the number ofend-tenants indicated in parentheses. Where sublease type master lease agreements are entered into, the indicated, number of master lessee is shown. The “Total” of“Number of tenants” shows the total number of tenants. As for pass-through type master leases, the number of end-tenants is used for calculation. As for sublease typemaster leases, the number of master lessee is used for calculation.
“Annualized fixed rent” is generally calculated by multiplying the monthly fixed rent and common area charges under a leasing contract with tenants at portfolio properties
as of March 31, 2018 (excluding warehouses in the case of building lease agreements) by twelve and rounding down to the nearest thousand yen. For master leases, where
the master lease company subleases space to other tenants, the fixed monthly rent under the master lease contract is multiplied by twelve, rounded down to the nearest
thousand yen.
“Tenant leasehold and security deposits” indicates the outstanding balance of any tenant leasehold and security deposit from the relevant end-tenant(s) set forth in leaseagreement(s) effective as of March 31, 2018 (excluding warehouses in the case of building lease agreements), rounded down to the nearest million yen.
We have not obtained consent from the tenant(s) to release this information.
The total area that we own exclusively as a compartmentalized ownership interest (retail space) is shown.
Calculated by multiplying the monthly rent and common area charges for March 2018 under the leasing contract by twelve and also taking into consideration theownership ratio (93.20%) under the compartmentalized ownership agreement.
Calculated by multiplying the tenant leasehold and security deposits for the whole building as of March 2018 by the ownership ratio (93.20%).

Note 11:

The area that we own exclusively as proportion to the co-ownership interest (co-ownership ratio: 90%) and amount for the proportion are shown.

Note 1:
Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:Note 8:Note 9:34iii) Overview of the appraisal reports
The following show the summaries of the appraisal reports is the appraisal value of the acquired properties described in each real estate appraisal report
prepared by real estate appraisers, including Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute, and The Tanizawa Sōgō Appraisal Co., Ltd.
as requested by KRR, based on an important notice concerning real estate appraisal in the context of the Act on Investment Trusts and Investment
Corporations, Act on Real Estate Appraisal (Act No. 152 of 1963, including subsequent revisions) and real estate appraisal standards. The appraisal value
is the judgment and opinion of the appraiser at a fixed point in time, with no guarantees as to the validity or accuracy of the report, nor to the possibility oftransactions at the appraised value. There are no special relations of interest between Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute,and The Tanizawa Sōgō Appraisal Co., Ltd. and KRR or KFM.
Estimated value
Cash flow-based method
Property
number

T-1
T-2
T-3
T-4
T-5
T-6

T-7

T-8

T-9

T-10

T-11

T-12
T-13
T-14

T-15

T-16

T-17

T-18

T-19

T-20

T-21

T-22

T-23

O-1

Property nameAppraiser

Daiwa Real EstateAppraisal Co.,
Ltd.
Japan Real Estate
MONA Shin-Urayasu
Institute
Daiwa Real Estate
Passaggio Nishiarai
Appraisal Co.,Ltd.
Daikanyama Address Japan Real Estate
Dixsept
InstituteJapan Real Estate
Unicus Ina
Institute
Daiwa Real Estate
Yorktown Kita-Kaname Appraisal Co.,Ltd.
Daiwa Real Estate
Unicus Yoshikawa
Appraisal Co.,Ltd.
Daiwa Real Estate
Sports Club
Appraisal Co.,
Renaissance FujimidaiLtd.
The Tanizawa
Super Viva Home
Sōgō Appraisal
Iwatsuki (Land)
Co., Ltd.
The Tanizawa
K’s Denki
Sōgō Appraisal
Shonan-Fujisawa (Land)
Co., Ltd.
The Tanizawa
Unicus Kamisato (Land) Sōgō Appraisal
Co., Ltd.
The Tanizawa
Unicus Konosu (Land)
Sōgō Appraisal
Co., Ltd.
Japan Real Estate
Inageya Yokohama
Minamihonjuku (Land)
Institute
Daiwa Real Estate
Gourmet City
Appraisal Co.,
Chiba-Chuo
Ltd.
Daiwa Real Estate
Nakamachidai Tokyu
Appraisal Co.,
Store
Ltd.
Daiwa Real Estate
Central Wellness Club
Appraisal Co.,
Nagatsuta Minamidai
Ltd.
Daiwa Real Estate
Life Kameido
Appraisal Co.,Ltd.
Daiwa Real EstateTotsuka-FukayaAppraisal Co.,
Shopping Center (Land) Ltd.
Daiwa Real Estate
Yumemachi
Appraisal Co.,
Narashinodai MallLtd.
Daiwa Real Estate
Kawamachi Yahagi
Appraisal Co.,
Mall
Ltd.
Daiwa Real Estate
Prime Sqyare Jiyugaoka Appraisal Co.,Ltd.
Daiwa Real Estate
Round1
Appraisal Co.,
Ichikawa-Onitaka
Ltd.
Daiwa Real EstateAppraisal Co.,
Ozeki Tokiwadai
Ltd.
The Tanizawa
Blumer Maitamon
Sōgō Appraisal
Co., Ltd.
Fululu Garden Yachiyo

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

DCF method
Discount rate(%)

Mar. 31,2018

15,20020,80015,3004.7

15,200

4.5

4.9

770

5.2

Mar. 31,
2018

8,890

6,980

8,990

5.2

8,780

4.7

5.2

517

6.4

Mar. 31,
2018

6,440

9,130

6,550

4.3

6,390

4.1

4.5

289

5.0

6,130

5,270

6,250

3.5

6,010

3.3

3.7

224

4.2

4,940

4,000

4,980

4.9

4,900

4.6

5.1

250

5.6

Mar. 31,
2018

4,340

2,500

4,380

4.9

4,320

4.7

5.1

215

5.4

Mar. 31,
2018

3,830

4,660

3,890

4.7

3,810

4.5

4.9

185

5.2

Mar. 31,
2018

2,750

1,790

2,780

4.6

2,730

4.4

4.8

128

5.0

Mar. 31,
2018

5,420

-

-

-

5,420

(year 1-15)(year 16-34.7)

4.6
4.7

-

206

4.3

Mar. 31,
2018

3,510

-

-

-

3,510

(year 1-10)(year11-29.6)

4.3
4.4

-

159

5.0

Mar. 31,
2018

3,050

-

-

-

-

138

4.6

Mar. 31,
2018

1,780

-

-

-

-

77

4.6

Mar. 31,
2018

1,430

-

-

-

1,430

4.0

4.7

64

4.5

Mar. 31,
2018

799

991

791

5.1

803

4.9

5.3

43

5.7

Mar. 31,
2018

3,810

2,830

3,850

4.6

3,790

4.4

4.8

182

5.4

Mar. 31,
2018

1,900

2,360

1,910

5.0

1,900

4.8

5.2

97

5.6

Mar. 31,
2018

1,510

1,970

1,530

4.2

1,500

3.9

4.4

65

4.5

Mar. 31,
2018

4,310

-

4,300

4.7
(Note 4)

4,310

4.6

-

191

4.6

Mar. 31,
2018

3,520

3,260

3,560

4.9

3,500

4.7

5.1

176

5.2

Mar. 31,
2018

3,210

3,380

3,270

4.8

3,180

4.6

5.0

158

5.1

Mar. 31,
2018

2,830

2,720

2,880

3.6

2,810

3.4

3.8

116

4.1

Mar. 31,
2018

1,960

3,300

1,950

4.8

1,960

4.6

5.0

96

5.2

Mar. 31,
2018

1,340

1,470

1,370

4.2

1,330

4.0

4.4

57

4.6

Mar. 31,
2018

9,350

8,920

9,360

5.3

9,350

5.4

5.5

505

6.0

Mar. 31,2018
Mar. 31,2018

35(year 1-13)
4.6
3,050 (year 14-28)
4.7(year 29-37.5) 4.8(year 1-13)
4.5
1,780 (year 14-28)
4.6(year 29-37.5) 4.7

Estimated value
Cash flow-based method
Property
number

Property nameAppraiser

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

DCF method
Discount rate(%)

(year 1-7)
O-2

Central Square
Takadono (Land)

The Tanizawa
Sōgō Appraisal
Co., Ltd.

4.0
Mar. 31,
2018

3,090

-

-

-

3,090

(year 8-17)
4.1

-

128

4.8

(year 18-37.3)
4.2

Piago Kahma Home
Center OmihachimanMar. 31,
2018

2,430

2,340

2,450

6.2

2,400

5.9

6.4

151

7.1

Mar. 31,2018

11,50015,80011,6004.8

11,400

4.6

5.0

565

5.1

Mar. 31,
2018

6,910

6,670

6,950

4.5

6,870

4.2

4.7

336

5.1

Mar. 31,
2018

6,810

7,780

6,960

5.2

6,750

4.8

5.3

385

6.0

Mar. 31,
2018

1,330

876

1,340

5.5

1,320

5.3

5.7

75

5.9

Mar. 31,
2018

488

-

-

-

488

4.0

4.7

21

4.5

Mar. 31,
2018

1,650

1,610

1,670

4.7

1,640

4.8

4.9

78

5.2

The Tanizawa
Sōgō Appraisal
Co., Ltd.

Mar. 31,
2018

3,870

-

-

-

3,870

-

157

4.2

N-1

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

Mar. 31,
2018

2,680

-

-

-

2,680

-

118

5.1

N-2

Valor Ichinomiya-Nishi

Japan Real Estate
InstituteMar. 31,
2018

2,320

1,840

2,330

5.1

2,300

5.3

129

5.9

N-3

K’s Denki Nakagawa
Tomita (Land)

The Tanizawa
Sōgō Appraisal
Co., Ltd.

Mar. 31,
2018

1,010

-

-

-

1,010

-

45

5.1

O-3
O-4
O-5
O-6

O-7
O-8
O-9

O-10

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

N-4

Homecenter Kohnan
Sunadabashi

N-5

K’s Denki
Shin-Moriyama (Land)

N-6

Resora Obu Shopping
Terrace

F-1

Sunny Noma

F-2
F-3

Round1 Stadium
Hakata-Hanmichibashi
Kurume-Nishi
Shopping Center

Daiwa Real EstateAppraisal Co.,
Ltd.
Japan Real Estate
Institute
The Tanizawa
Sōgō Appraisal
Co., Ltd.
Japan Real Estate
Institute(year 1-18)
4.1(year 19-37.9)
4.3(year 1-15)
4.3(year 16-35.2)
4.4
4.8(year 1-15)
4.3(year 16-35.2)
4.4
Mar. 31,
2018

7,310

7,410

7,440

4.8

7,250

4.6

5.0

368

5.2

Mar. 31,
2018

1,440

-

-

-

1,440

3.8

4.3

60

4.4

Mar. 31,
2018

7,950

7,740

8,180

4.9

7,850

5.0

5.1

410

5.2

Mar. 31,
2018

1,590

1,400

1,630

4.8

1,550

4.6

5.2

80

5.4

Japan Real Estate
InstituteMar. 31,
2018

5,390

4,930

5,420

5.3

5,350

5.0

5.5

286

5.7

Japan Real Estate
InstituteMar. 31,
2018

1,690

1,500

1,700

5.2

1,670

4.9

5.5

92

6.1

R-1

Roseo Mito

Japan Real Estate
InstituteMar. 31,2018

11,5009,330

11,5005.1

11,400

4.8

5.3

597

6.0

R-2

K’s Denki Aomori
HontenJapan Real Estate
InstituteMar. 31,
2018

1,570

1,670

1,580

5.5

1,560

5.2

5.7

93

6.3

R-3

Super Sports Xebio
Aomori-Chuo

Japan Real Estate
InstituteMar. 31,
2018

936

849

942

5.5

930

5.2

5.7

57

6.4

5,070

5.1
(Building)
5.0(Land)

5.5(Building)

269

6.4

R-4

Ashico Town Ashikaga

R-5

Yorktown
Shinden-Higashi

R-6

Kasumi Technopark
SakuraR-7

Solala Plaza

R-8

P-1 Plaza Tenno

Daiwa Real EstateMar. 31,
Appraisal Co.,
2018
Ltd.
Daiwa Real EstateMar. 31,
Appraisal Co.,
2018
Ltd.
Daiwa Real EstateMar. 31,
Appraisal Co.,
2018
Ltd.
Japan Real Estate Mar. 31,
Institute
2018
Japan Real Estate
InstituteMar. 31,
2018

5,060

7,910

5,050

5.3
(Building)
5.0(Land)(Note 3)

3,330

5,210

3,340

5.5

3,320

5.3

5.7

194

6.0

874

745

884

5.1

870

4.9

5.3

46

5.6

5,950

4,350

5,990

4.8

5,910

4.5

5.0

286

5.0

4,340

4,350

4,370

5.1

4,300

4.8

5.3

230

5.7

36

Estimated value
Cash flow-based method
Property
number

Property nameR-9

Seiyu Rakuichi Moriya(Land)

R-10

Sun Street Hamakita(Note 5)

Appraiser

Daiwa Real EstateMar. 31,
Appraisal Co.,
2018
Ltd.
Japan Real Estate Mar. 31,
Institute
2018

Total/Average

Note 1:

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

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

DCF method
Discount rate
(%)

4,220

-

4,260

4.3
(Note 4)

4,200

4.2

-

166

4.1

11,1609,820

12,500

5.4

12,200

5.1

5.7

628

5.9

220,647

190,461

195,977-

220,451--

10,980

5.3“Appraisal NOI” is the Net Operating Income calculated by subtracting the amount of operating expenses from the operating revenues described in relevant appraisal
reports, and it is the income before depreciation and differs from NCF (Net Cash Flow) which is calculated by adding investment gains from such as deposits andsubtracting capex from NOI. The above appraisal NOI is calculated using the direct capitalization method. However, where the direct capitalization method is notapplicable, appraisal NOI indicates the net operating income for the first year based on the DCF method. (Note that Unicus Kamisato (Land) and Unicus Konosu (Land)
use NOI for the third year, when ordinary operations are expected to take place.) The amounts are rounded down to the nearest one million yen.
“Appraisal NOI yield” indicates the value calculated using the following formula and rounded to the nearest tenth. The “Total/average” of “Appraisal NOI yield” indicatesthe average appraisal NOI yield which is a weighted average of appraisal NOI yields of the acquired properties (rounded to the nearest tenth).
Appraisal NOI of each property / Acquisition price for each property.
Inwood method discount rate is shown for discount rate of land-only portion.
Inwood method discount rate is shown for discount rate of land-only properties.
“Appraisal value” and “Appraisal NOI” are calculated in proportion to the co-ownership interest (90%). Other figures refer to the entire land and building.

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

Property name

Investigation company

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

T-1

Fululu Garden Yachiyo

T-2

MONA Shin-Urayasu

T-3

Passaggio Nishiarai

T-4

Daikanyama Address Dixsept

T-5

Unicus Ina

T-6

Yorktown Kita-Kaname

T-7

Unicus Yoshikawa

T-8

Sports Club Renaissance Fujimidai

T-9

Super Viva Home Iwatsuki (Land)(Note 2)

T-10

K’s Denki Shonan-Fujisawa (Land)

T-11

Investigation
performed in

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

Nov. 2014

980,970-

Nov. 2014

921,734

16,696

Nov. 2014

125,949-

Nov. 2014

145,352-

Aug. 2014(Restaurant
building: Dec. 2016)

130,310

1,110

Nov. 2014

13,213

1,775

Nov. 2014

59,132-

Sep. 2014

23,780

400

-

-

-

(Note 2)---

Unicus Kamisato (Land)(Note 2)

-

-

-

T-12

Unicus Konosu (Land)(Note 2)

-

-

-

T-13

Inageya Yokohama Minamihonjuku (Land)(Note 2)

-

-

-

T-14

Gourmet City Chiba-Chuo

Aug. 2015

24,669131

T-15

Nakamachidai Tokyu StoreMar. 2016

28,394-

T-16

Central Wellness Club Nagatsuta Minamidai

Mar. 2016

16,888-

T-17

Life Kameido

Mar. 2016

21,442-

T-18

Totsuka-Fukaya Shopping Center (Land)--

Mar. 201734,877-Mar. 2017

36,737-Mar. 2017

190,542

91,365Mar. 2017

13,695-Oct. 2017

6,968

-

Nov. 2014

211,954---

Aug. 2014

56,850180Mar. 2015

326,565

3,959

Aug. 2015

424,506

6,443

Aug. 2015

355,643-

Aug. 2015

57,175---

15,464

2,225

T-19

Yumemachi Narashinodai Mall

T-20

Kawamachi Yahagi Mall

T-21

Prime Sqyare Jiyugaoka

T-22

Round1 Ichikawa-Onitaka

T-23

Ozeki Tokiwadai

O-1

Blumer Maitamon

O-2

Central Square Takadono (Land)

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

-

-

O-3

Piago Kahma Home Center Omihachiman

O-4

Blumer HAT Kobe

O-5

Carino Esaka

O-6

COMBOX Komyoike

O-7

Hankyu Oasis Hirakatadeguchi

O-8

Welcia Kishiwadakamori (Land)

O-9

Life Nishi-Tengachaya

O-10

Million Town Tsukaguchi (Land)(Note 2)

-

-

-

N-1

Kahma Home Center Nakagawa Tomita (Land)(Note 2)---

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

38

Sep. 2015

Property
Number

Property name

N-2

Valor Ichinomiya-Nishi

N-3

K’s Denki Nakagawa Tomita (Land)

N-4

Homecenter Kohnan Sunadabashi

N-5

K’s Denki Shin-Moriyama (Land)

N-6

Resora Obu Shopping Terrace

F-1

Sunny Noma

F-2

Round1 Stadium Hakata-Hanmichibashi

F-3

Kurume-Nishi Shopping Center

R-1

Roseo Mito

R-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio Aomori-Chuo

R-4

Ashico Town Ashikaga

R-5

Yorktown Shinden-Higashi

R-6

Kasumi Technopark Sakura

R-7

Solala Plaza

R-8

P-1 Plaza Tenno

R-9

Seiyu Rakuichi Moriya (Land)

R-10

Sun Street Hamakita

Investigation company

Investigation
performed in

HI International Consultant
Co., Ltd.

Aug. 2014(Note 2)
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
(Note 2)
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.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
(Note 3)
Tokio Marine & Nichido
Risk Consulting Co., Ltd.
Total

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

Repairs, maintenance and renovation
expensesRequired over theRequired over the
next 12 years
next 12 years(thousand yen)(thousand yen)
(Note 1)
(Note 1)
177,790

2,690

-

-

336,943---

Jul. 201715,4642,225

Aug. 2014

41,960420Mar. 201757,758

7,042

Mar. 2017

68,712

19,811

Aug. 2014(Secondhand shopbuilding:
Oct. 2015)

238,790

550

Nov. 2014

142,764-

Nov. 2014

103,012-

Aug. 2015

327,264-

Jul. 2015

176,945

4,163

Aug. 2015

18,155-Mar. 2016

25,430-Mar. 2016

159,757

28,423--494,063(Note 4)(Note 4)

6,816,380

187,383

Dec. 2015-

Mar. 2017

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
the investigation report and “Required within one year” indicates the total expenses required within 1 year from the date of the investigation report. All figures aretruncated to thousands of yen as in the investigation reports.
Since these are land-only properties, KRR did not obtain the engineering report but obtained history survey report on the land use from Field Partners.
Since this is a land-only property, KRR did not obtain the engineering report but obtained history survey report on the land use from Tokio Marine & Nichido Risk
Consulting Co., Ltd.
Amount for the whole building is shown.

39v) Overview of seismic PML evaluation report
The following summary is based on the Portfolio Earthquake PML Evaluation Report created by the Sompo Risk Management & Health Care Inc. as of
October 2017. However, KRR does not guarantee the accuracy of evaluations in the report. The report only represents judgement and opinion of theappraiser for a fixed point of time, with no guarantees as to the validity or accuracy of the report. There is no special interest between the Sompo Risk
Management & Health Care Inc. and KRR or KFM.
Property
PML value in seismic review (%)
Property namenumber(Note 1)
Specialty store building 10.24
T-1
Fululu Garden Yachiyo
Ito-Yokado building 8.96
Retail building 5.98
T-2
MONA Shin-Urayasu
Parking building 5.97
T-3
Passaggio Nishiarai
3.13
T-4

Daikanyama Address Dixsept

T-5

Unicus Ina

T-6

Yorktown Kita-Kaname

T-7

Unicus Yoshikawa

3.26

T-8

Sports Club Renaissance Fujimidai

7.09

11.11
Mall building 4.51
Restaurant building 6.80
8.72

T-9

Super Viva Home Iwatsuki (Land)

-

T-10

K’s Denki Shonan-Fujisawa (Land)

-

T-11

Unicus Kamisato (Land)

-

T-12

Unicus Konosu (Land)

-

T-13

Inageya Yokohama Minamihonjuku (Land)

-

T-14

Gourmet City Chiba-Chuo

T-15

Nakamachidai Tokyu Store

1.82
8.15
Retail building 7.70
Parking building 6.36

T-16

Central Wellness Club Nagatsuta Minamidai

T-17

Life Kameido

T-18

Totsuka-Fukaya Shopping Center (Land)

T-19

Yumemachi Narashinodai Mall

T-20

Kawamachi Yahagi Mall

T-21

Prime Square Jiyugaoka

T-22

Round1 Ichikawa-Onitaka

T-23

Ozeki Tokiwadai

8.15
Main building 3.83
Uniqlo building 3.88
Holiday building 3.72
6.92
Main / Tenant building 7.22
Parking building 10.53
5.93

O-1

Blumer Maitamon

1.52

O-2

Life Takadono (Land)

3.79-

Piago building 3.95
Kahma Home Center building 5.22
4.69

O-3

Piago Kahma Home Center Omihachiman

O-4

Blumer HAT Kobe

O-5

Carino Esaka

3.17

O-6

COMBOX Komyoike

5.04

O-7

Hankyu Oasis Hirakatadeguchi

4.11

O-8

Welcia Kishiwadakamori (Land)-

O-9

Life Nishi-Tengachaya

O-10

Million Town Tsukaguchi (Land)-

N-1

Kahma Home Center Nakagawa Tomita (Land)-

N-2

Valor Ichinomiya-Nishi

N-3

K’s Denki Nakagawa Tomita (Land)-

N-4

Homecenter Kohnan Sunadabashi

7.47

N-5

K’s Denki Shin-Moriyama (Land)

N-6

Resora Obu Shopping Terrace

F-1

Sunny Noma

F-2

Round1 Stadium Hakata-Hanmichibashi

6.32

10.18

6.95
1.95
Main building 2.17
Parking building 0.48
Tenant building A 0.05

40

Tenant building B 0.05
M building 2.37
AB building 2.39
C building 4.58
Coffee shop building 7.41
Mall building 6.70
Sports facility building 9.69
Hardware store building 9.68
Secondhand shop building 7.85
K’s Denki building 1.61
TSUTAYA/ Hard-off building 1.51
1.52
Shopping mall building 2.16
Extensions 1.91
Cinema building 2.28
Road-side building 2.59

F-3

Kurume-Nishi Shopping Center

R-1

Roseo Mito

R-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio Aomori-Chuo

R-4

Ashico Town Ashikaga

R-5

Yorktown Shinden-Higashi

3.43

R-6

Kasumi Technopark Sakura

6.40

R-7

Solala Plaza

R-8

P-1 Plaza Tenno

R-9

Seiyu Rakuichi Moriya (Land)

R-10

Sun Street Hamakita

4.46
A building 21.66(Note 2)
B building 11.84
C building 12.29
D building 11.12
E building 13.36
F building 16.98
G building 9.07
H building 12.00
Main building 10.58
Mall building 19.67
Colore building 9.35
Wing building 9.43
2.18

Portfolio PML value (Note 3)
Note 1:
Note 2:
Note 3:PML is rounded to the nearest hundredth.
The building is on earthquake insurance as its PML value is higher than 20%.
“Portfolio PML value” is the portfolio PML value of 39 properties that excludes Super Viva Home Iwatsuki (Land), K’s Denki Shonan-Fujisawa (Land),Unicus Kamisato (Land), Unicus Konosu (Land), Inageya Yokohama Minamihonjuku (Land), Life Takadono (Land), Welcia Kishiwadakamori (Land),Million Town Tsukaguchi (Land), Kahma Home Center Nakagawa Tomita (Land), K’s Denki Nakagawa Tomita (Land), K’s Denki Shin-Moriyama(Land), Seiyu Rakuichi Moriya (Land) and Totsuka-Fukaya Shopping Center (Land), which is based on the Portfolio Earthquake PML Evaluation Report
created by Sompo Risk Management & Health Care Inc. as of October 2017.

41vi) Architect, structural engineer, construction company and construction confirmation authority
Property
number

Property nameConstruction company

Construction confirmation
authority

Architect

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

The Building Center ofJapan

Chiba Prefecture

T-1

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

T-2

MONA ShinUrayasu

Haseko Corporation,
Engineering Division

Haseko Corporation,
Engineering Division

Haseko Corporation

T-3

Passaggio Nishiarai

Yamashita Sekkei Inc.

Yamashita Sekkei Inc.

Nishimatsu Construction Co., Tokyo Prefecture
Ltd.

T-4

Daikanyama Address
Nihon Sekkei, Inc.
Dixsept

Nihon Sekkei, Inc.

Kajima Corporation

Tokyo Prefecture

T-5

Unicus Ina

Taisei Corporation,
Registered architect office

Taisei Corporation,
Registered architect office

Taisei Corporation

Bureau Veritas Japan Co.,
Ltd.

T-6

Yorktown
Kita-Kaname

CB Richard Ellis Asset
Services K.K.

Sankyoline Corporation

Asanuma Corporation

K.K. Building
Navigation

T-7

Unicus Yoshikawa

Obayashi Corporation

Obayashi Corporation

Obayashi Corporation

Saitama Housing
Inspection Center

T-8

Sports Club
Renaissance Fujimidai

K.K. Axs Engineering

K.K. Axs Engineering

Ichiken Co., Ltd.

Nerima ward

T-9

Super Viva Home
Iwatsuki (Land)

-

-

-

-

T-10

K’s Denki
Shonan-Fujisawa(Land)

-

-

-

-

T-11

Unicus Kamisato(Land)

-

-

-

-

T-12

Unicus Konosu(Land)

-

-

-

-

T-13

Inageya Yokohama
Minamihonjuku(Land)

-

-

-

-

T-14

Gourmet City
Chiba-Chuo

T-15

Nikken Sekkei Ltd.

Consortium of Taisei
Corporation and Shimizu
Corporation

Nakamachidai Tokyu Kyouritsu Associates
Store
Architects & Engineers

Espace Architect Office

The Japan Building
Tokyu Construction Co., Ltd. Equipment and Elevator
Yokohama BranchCenter Foundation

T-16(Retail building)Daiwa House Industry Co.,
Central Wellness Club Ltd.
Nagatsuta Minamidai (Parking building)Daiwa House Industry Co.,Ltd.

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

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

T-17

Life Kameido

T-18

Totsuka-Fukaya
Shopping Center(Land)

T-19

Yumemachi
Narashinodai Mall

T-20

Kawamachi Yahagi
Mall

T-21

Prime Sqyare
Jiyugaoka

Nikken Sekkei Ltd.

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

-

First-Class Architect Office
HKT Construction Design
ADX Architects OfficeArchitects Construction
Planning Division(Main building)(Main building)First-Class Architect Office
ADX Architects Office
HKT Construction Design(Uniqlo building)(Uniqlo building)Akasaka Architects Office
Uerusuton Design Co., Ltd.
(Holiday building)(Holiday building)
Akashi architect & associates Bros., Inc.
Daiken Sekkei Inc. Tokyo
OfficeDaiken Sekkei Inc. Tokyo
Office42-

The Building Center of Japan

Japan ERI Co., Ltd.

Koto ward-

Asahi Construction Co., Ltd.

Japan ERI Co., Ltd.

(Main building / Uniqlo
building)
Asahi Construction Co., Ltd.
(Holiday building)Fujiko Co., Ltd.

(Main building / Uniqlo
building)
Japan ERI Co., Ltd.
(Holiday building)Japan ERI Co., Ltd.

Toda Corporation

Meguro Ward

Property
number

Property name

T-22

Round1
Ichikawa-Onitaka

Axxis Inc. First-Class
Architect Office

Axxis Inc. First-Class
Architect Office

Asanuma Corporation K.K.
Tokyo Main Office

Japan ERI Co., Ltd.

T-23

Ozeki Tokiwadai

Choeihands Co., Ltd.
First-Class Architect Office

Okamura Kenchikusekkei
Ltd.

Choeihands Co., Ltd.

Away Building Evaluation
Network Inc.

O-1

Blumer Maitamon

Asanuma Corporation

Asanuma Corporation

Daiwa System Co., Ltd.

Bureau Veritas Japan Co.,
Ltd.

O-2

Life Takadono (Land)

Architect

Structural engineer

Construction company

Construction confirmation
authority

-

-

-

O-3

Piago Kahma
Home Center
Omihachiman(Piago building）
Kiuchi Construction Co., Ltd.
(Kahma Home Center building)
Daiken Tosikaihatu Co., Ltd.

(Piago building）
Kiuchi Construction Co., Ltd.
(Kahma Home Center building)
Daiken Tosikaihatu Co., Ltd.

(Piago building）
Kiuchi Construction Co., Ltd.
(Kahma Home Center building)
Aisawa Construction Co., Ltd. (Note2)

K.K. Organization ofConfirmation &Inspection Annex

O-4

Blumer HAT Kobe

Obayashi Corporation

Obayashi Corporation

Obayashi Corporation

Center of International
Architectural Standard Co.,
Ltd.

O-5

Carino Esaka

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

Tokyu Architects &Engineers Inc.

Tokyu Construction Co., Ltd. Suita City

O-6

COMBOX
Komyoike

Daiwa House Industry Co.,Ltd.

Daiwa House Industry Co.,Ltd.

Daiwa House Industry Co.,
Ltd.

General Building Research
Corporation of Japan

O-7

Hankyu Oasis
Hirakatadeguchi

Rui Sekkeishitsu Co., Ltd.

Rui Sekkeishitsu Co., Ltd.

Obara Construction Co.,
Ltd.

General Building Research
Corporation of Japan

O-8

WelciaKishiwadakamori(Land)

-

-

-

-

O-9

Life
Nishi-Tengachaya

KIA Urban Planning andArchitects Institute Co., Ltd.

Nihon Kensetsu Co., Ltd.

Center of International
Architectural Standard Co.,
Ltd.

O-10

Million Town
Tsukaguchi (Land)

-

-

-

-

N-1

Kahma Home Center
Nakagawa Tomita(Land)

-

-

-

-

N-2

Valor
Ichinomiya-Nishi

Chubu Sekkei Co., Ltd.

Fujita Corporation

Chubu Sekkei Co., Ltd.

Tsuchiya Corporation-

Ichinomiya City

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

Nankai Sogo Sekkei Co.,Ltd.

Nankai Sogo Sekkei Co.,
Ltd.

-

-

-

-

N-6

Resora Obu
Shopping Terrace

Yahagi Construction Co.,
Ltd. First-Class Architect
OfficeStructure Nana Co., Ltd.

Yahagi Construction Co.,Ltd.

Bureau veritas Japan Co.,
Ltd.

F-1

Sunny Noma

Nakamuta & Suenaga
Designing (JV)

Nakamuta & Suenaga
Designing (JV)

Nishimatsu Construction
Co., Ltd., Kyushu Branch

Fukuoka City

(Main building)
Axxis Inc. First-Class
Architect Office(Tenant building A)
Axxis Inc. First-Class
Architect Office(Tenant building B)
Axxis Inc. First-Class
Architect Office(M building / AB building)
Fujita Corporation Kyusyu
Branch First-Class(Main building)
TMH Inc. First-Class
Architect Office(Tenant building A)
TMH Inc. First-Class
Architect Office(Tenant building B)
TMH Inc. First-Class
Architect Office(M building)
Fujita Corporation Kyusyu
Branch First-Class

Kajima Corporation

General Building Research
Corporation of Japan(M building)
Fujita Corporation Kyushu
Branch(M building)City of Kurume(AB building)

N-3
N-4
N-5

F-2

Round1 Stadium
Hakata-Hanmichiba
shi

F-3

Kurume-Nishi
Shopping Center

43

Obayashi Corporation

Japan ERI Co., Ltd.

Property
numberR-1

Property name

Roseo Mito

Architect

Structural engineer

Construction company

Architect Office(C building)
Zen Environmental DesignFirst-Class Architect OfficeArchitect Office(AB building)
Fujita Corporation Kyusyu
Branch First-Class
Architect Office(C building)-(AB building)
Fujita Corporation Kyusyu
Branch(C building)
Fujita Corporation Kyusyu
Branch(Coffee shop building)(Coffee shop building)
Tetsu Works Architect OfficeTetsuWorks Architect Office(Mall building)
Kurehanishiki Construction Co., Ltd. (Mall building)
Sezako Structural
Change of use:
Engineering Office
Registered Architect(Sports facility building)Studio Work House
Individual (Note 3)(Sports facility building)(Hardware store building)
Kishi-Sekkei Co., Ltd.
K.K. Dan Structural(Hardware store building)Engineering OfficeNihon Jutaku Corporation,
Registered Architect Office (Secondhand shop building)(Secondhand shop building) Converse Corporation
Choeihands Corporation(Coffee shop building)
Kurehanishiki Construction
Co., Ltd.
(Mall building)
Kurehanishiki
Construction Co., Ltd.
(Sports facility building)
Kurehanishiki
Construction Co., Ltd.
(Hardware store building)
Nihon Jutaku Corporation(Secondhand shop building)Choeihands Corporation

Construction confirmation
authority
City of Kurume(C building)Japan ERI Co., Ltd.

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

R-2

K’s Denki
Aomori Honten

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

R-3

Super Sports Xebio
Aomori-Chuo

Takenaka Corporation

Individual (Note 3)

Takenaka Corporation

Japan ERI Co., Ltd.

R-4

Ashico Town
Ashikaga

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

R-5

Yorktown
Shinden-Higashi

MTM International
Corporation

MTM International
Corporation

Kajima Corporation

Japan ERI Co., Ltd.

R-6

Kasumi Technopark
SakuraOffice Okano
Kenchikusekkei Co., Ltd.

Office Okano
Kenchikusekkei Co., Ltd.

Nakano Corporation Co., Ltd. Ibaraki Prefecture

R-7

Solala Plaza

Yamashita Sekkei Inc.

Yamashita Sekkei Inc.

Shimizu Corporation

Japan ERI Co., Ltd.

R-8

P-1 Plaza Tenno(A building)First-Class Architect Office
Atelier Zero (for newbuilding construction ),Entetsu General
Constructor (for building
expansion)(B building)Parking Pro Co., Ltd.
(C building)Daiwa House Industry Co.,Ltd.
(D building)Daiwa House Industry Co.,Ltd.
(E building)Daiwa House Industry Co.,Ltd.
(F building)
DO Design Co., Ltd.
(G building)
Akou Co., Ltd.
(H building)
Akou Co., Ltd.

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

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

R-9

Seiyu Rakuichi
Moriya (Land)

-

-

-

-

R-10

Sun Street Hamakita(Main building)Kajima Corporation(Main building)Kajima Corporation

44(Main building)Kajima Corporation(Main building)
The Building Center ofProperty
number

Property name

Architect
Architectual Design
Division(Mall building)Kajima Corporation
Architectual Design
Division(Colore building)
FPC K.K. First-Class
Architect Office(Wing building)Kajima Corporation
Architectual Design
Division

Note 1:

Structural engineer
First-Class Architect Office(Mall building)Kajima Corporation
First-Class Architect Office(Colore building)First-Class Architect Office
Otsuka Kenchiku Kozo
Sekkei(Wing building)Kajima Corporation
First-Class Architect OfficeConstruction company
Yokohama Branch(Mall building)Kajima Corporation
Yokohama Branch(Colore building)Suzuyo Kensetsu(Wing building)Kajima Corporation
Yokohama Branch

Construction confirmation
authority
Japan(Mall building)
The Building Center ofJapan(Colore building)Bureau Veritas Japan(Wing building)
The Building Center ofJapan

Note 2:

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

Note 3:

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

45vii) Overview of portfolio(A) Distribution by property type
Property type
Neighborhood, community and other shopping centers for daily

Acquisition price(in millions)

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

52

206,176

100.0

NSC (Neighborhood Shopping Centers)

23

108,825

52.8

SM (Supermarkets)

912,712

6.2

CSC Community shopping Centers）

1

14,848

7.2

Urban Station-Front Shopping Centers

6

38,028

18.4

SS (Specialty Store)

13

31,763

15.4

-

-

-

52

206,176

100.0

needs

Other retail properties
Total
Note:

Number ofproperties

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

(B) Distribution by location
RegionFour major metropolitan areas

Acquisition price(in millions)

Percentage of total portfolio
acquisition price (%) (Note)42

160,914

78.0

Tokyo metropolitan area

23

86,873

42.1

Greater Osaka area

10

44,214

21.4

Greater Nagoya area

6

21,795

10.6

Fukuoka area

3

8,032

3.9

10

45,26222.0

52206,176

100.0

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

Number ofproperties

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

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

Number ofproperties

Acquisition price(in millions)

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

3

7,776

4.5

5 years or more but less than 10 years

937,685

21.9

10 years or more

27

126,84373.6

39172,304

100.0

Total
Note 1:
Note 2:

Property age refers to the number of years from the date of the new construction of the property set out in the real estate registry to March 31, 2018. Where multiple buildings
exist on the property, the property age is calculated using the average age of those buildings.
Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total portfolio acquisition price may differ from theportfolio total.

46

(D) Distribution by Lease Term Remaining
Lease term (remaining period)(Note 1)

Annual fixed rent (in millions)(Note 2)

Ratio (%)
(Note 3)

Less than 2 years

1,835

13.7

2 to less than 5 years

2,484

18.5

5 to less than 10 years

4,032

30.0

10 to less than 15 years

2,371

17.6

15 to less than 20 years

1,869

13.9

20 years or more

849

6.3

13,443

100.0

Total

“Lease term (remaining period)” is based on period until the last date of the lease as set forth in the relevant lease agreements as of March 31, 2018 (excluding warehouses forbuilding lease agreements) for each acquired property and to-be acquired property.
“Annual fixed rent” for acquired property is calculated by multiplying the monthly fixed rent and common area charges for the month ended March 31, 2018 (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 subleases
space to other tenants, the fixed monthly rent under the master lease contract is multiplied by 12, rounded down to the nearest million yen.
“Ratio” is based on the annual fixed rent, rounded to the nearest tenth. As a result, simple aggregation of “ratio” figures may not be the same as the total period.

Note 1:
Note 2:
Note 3:(E) Distribution by lease contract typeType of lease contract

Ratio (%) (Note)

Fixed-term building lease

70.6

Regular building lease

15.1

Commercial fixed-term land lease

14.2

Others

0.0
Total

Note:

100.0

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

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

Ratio (%) (Note 2)

Fixed rent

83.5

Fixed rent with sales-linked rent

12.9

Sales-linked rent

3.6
100.0

Total
Note 1:
Note 2:“Fixed rent” refers to rent that remains unchanged regardless of actual tenant sales revenues as set forth in the relevant lease agreements. “Fixed rent with sales-linked rent”
refers to rent that consist of a portion that remains unchanged regardless of actual tenant sales revenues and a portion that is based on tenant sales as set forth in the relevant
lease agreements. “Sales-linked rent” refers to rent that is based on actual tenant sales revenues as set forth in the relevant lease agreements.
“Ratio” is calculated according to the actual rent effective between October 1, 2017 and March 31, 2018, rounded to the nearest tenth. As a result, simple aggregation of“ratio” figures may not be the same as the total figure.

47

viii) Capital expenditures(A) Planned capital expenditures
The table below shows major capital expenditures (Note) for renovations, repairs and other projects that are planned for the seventh fiscal period
ending September 30, 2018. These expenditures are for real estate owned by KRR and real estate in trusts in which KRR owns trust beneficiaryrights. These planned projects may include some expenditures that will be recorded as expenses rather than capital expenditures for accounting
purposes.
Planned amount of capital
expenditure
Property(Millions of yen)
Property nameLocation
PurposeSchedule
number
Total
Payment for the
Totalamountperiodalready paid
MONA
From April 2018
T-2
Urayasu, Chiba Second phase of renewal
349
Shin-Urayasu
to October 2018
From April 2018
MONA
T-2
Urayasu, Chiba Air conditioner-related renewal
260
Shin-Urayasu
to September 2018
Prime Square
From December 2017
Meguro-ku,
T-21Interior repair
73
Tokyo
Jiyugaoka
to April 2018
From April 2018
Kobe, Hyogo
T-5
Unicus Ina
Exterior wall repair
47
to September 2018
From April 2018
BlumerO-1
Kobe, Hyogo
LED installation to common area
46
Maitamonto September 2018
(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 263 million yen. There were also expenditures of 259 million yen that wererecorded as repair expenses. In total we spent 523 million yen on the projects.
Property
Capital expenditure
Property nameLocation
PurposeSchedule
number(Millions of yen)
From January 2018
Fululu Garden
T-1
Yachiyo, Chiba Power generator renewal
45
Yachiyoto March 2018
From July 2017
Yorktown Kita
Hiratsuka,
T-6
Rooftop parking waterproof
41
KanameKanagawa
to December 2017
MONA
From February 2018
T-2
Urayasu, Chiba Air conditioner renewal
27
Shin-Urayasu
to March 2018
Valor
Ichinomiya,
From September 2017
Ichinomiya-Nish
N-2
Exterior wall repair
25
Aichi
to November 2017i
From February 2018
O-5
Escalator renewal
22
Carino Esaka
Suita, Osaka
to March 2018
Others

101

Total

263

(C) Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
Not applicable48

(3) Information Concerning Major Tenantsi) Top End-Tenants in Terms of Rent
The following summarizes top ten tenants (end-tenants or sublease type master leasee) as of March 31, 2018

Name of end tenants

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

P&D Consulting Co., Ltd.

YorkMart Co., Ltd.

Type ofbusiness(Note 1)

Property nameTotal
leasedarea(m2)

RetailFululu Garden Yachiyo(Note 5)

Real estate

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

104,810.72

RetailYorktown Kita-Kaname(Note 5)

Ratio(%)
(Note 2)

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

12.1

(Note 5)507,238251(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)A Unicus Yoshikawa,
B Life Kameido
C Life Takadono (Land)
D Life Nishi-Tengachaya
A Super Viva Home Iwatsuki(Land)B Roseo Mito

Life Corporation

RetailLixil Viva Corporation

RetailRound One Corporation

Service

A Round1 Ichikawa-Onitaka
B Round1 Stadium
Hakata-Hanmichibashi

39,990.22

4.6

Daiwaroyal Co., Ltd.

Real estate

COMBOX Komyoike

25,530.44

2.9

Toyota Tsusho Corporation

Wholesale

Homecenter Kohnan Sunadabashi

20,329.07

2.3

Seiyu GK

RetailA Sunny NomaB Seiyu Rakuichi Moriya (Land)(Note 5)

Otsuka Kagu, Ltd.

RetailSolala Plaza(Note 5)Note 1:
Note 2:
Note 3:Note 4:Note 5:

12,501.97(Note 5)

1.4

(Note 5)452,523

423(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)

“Type of business” is based on Japan Standard Industrial Classification.
“Ratio” is the ratio of leased area of the end-tenant to total leasable area of the portfolio as of March 31, 2018, rounded to the nearest tenth.
“Annual fixed-rent” for each property is based on monthly contracted rent (including common area charges) as set forth in the relevant lease agreements effective as ofMarch 31, 2018 (excluding warehouses for building lease agreements) for each property or property in trust, truncated to thousands of yen. In a sublease type master lease,
the annual rent (excluding consumption taxes) agreed upon in the master lease agreement or the amount obtained by multiplying the monthly rent (excluding consumption
taxes) agreed upon in the master lease agreement by 12, rounded down to the nearest thousand yen, is shown.
Indicates the outstanding balance of any tenant leasehold and security deposit from the relevant end-tenant(s) set forth in lease agreement(s) effective as of March 31, 2018,
rounded down to the nearest million yen.
We have not obtained consent from the tenant to release this information.

49ii) Top End-Tenants in Terms of Leased Area
The end-tenants or the sublease type master lessees that cover over 10% of the total leased area of portfolio as of March 31, 2018 are as follows.
Name of end
tenants

Type ofbusiness

Property name

P&D
Consulting
Co., Ltd.

Real estate

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

Lixil Viva
Corporation

RetailA Super Viva Home Iwatsuki(Land)B Roseo Mito

Total
leased area(m2)

104,810.72(Note 2)

Note 1:

Based on Mall building’s leasing contract.

Note 2:

We have not obtained consent from the tenant to release this information.

Annualfixed rent
(in thousandsof yen)507,238(Note 2)50

Tenantleaseholdand security
deposits(in millions of yen)

(Note 2)

Lease term
endLease renewal

A Sep. 25, 2036
(Note 1)251 B Oct. 1, 2055
C Oct. 1, 2055
D Mar. 31, 2026

A Not Applicable(Note 1)
B Not Applicable
C Not Applicable
D Not Applicable(Note 2)

(Note 2)

2015年2月10日【Reference】

2015年2月10日

2015年2月10日

2015年2月10日

2015年2月10日

2015年2月10日

2015年2月10日

2015年2月10日

2015年10月2日

2015年10月2日

2015年10月2日

2015年10月2日

Earnings Performance for the Individual Properties for the 6th Fiscal Period (October 1, 2017 to March 31, 2018)：182 days ※As of March 31, 2018
Tokyo metropolitan area

Location
Property No.

T-1

T-2

T-3

T-4

T-5

T-6

T-7

T-8

T-9

T-10

T-11

T-12

K’s Denki
Fululu Garden
MONA
Passaggio
Yorktown
UnicusSuper Viva Home
Unicus Kamisato
Unicus Ina
ShonanYachiyo
Shin-Urayasu
Nishiarai
Kita-Kaname
YoshikawaIwatsuki (Land)(Land)
Fujisawa (Land)
February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 October 2, 2015 October 2, 2015 October 2, 2015
Daikanyama
Address
Dixsept

Property Name
Acquisition Date

Sports Club
Renaissance
Fujimidai

Unicus Konosu(Land)
October 2, 2015

Price
Information

Acquisition price ( In millions of yen )14,848

8,063

5,850

5,390

4,470

4,000

3,600

2,586

4,815

3,169

3,000

Percentage of total portfolio

7.2%

3.9%

2.8%

2.6%

2.2%

1.9%

1.7%

1.3%

2.3%

1.5%

1.5%

0.8%

Net book value ( In millions of yen )14,863

8,513

5,824

5,405

4,370

3,982

3,591

2,531

4,890

3,210

3,043

1,726

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

8,890

6,440

6,130

4,940

4,340

3,830

2,750

5,420

3,510

3,050

1,780

6.9%

4.0%

2.9%

2.8%

2.2%

2.0%

1.7%

1.2%

2.5%

1.6%

1.4%

0.8%

40

1（58）

1（41）

1（27）

1

1

1（11）

1

1

1

1

1

Leasable floor area (㎡)

77,057.56

9,592.65

10,528.25

5,056.39

13,462.71

10,648.27

3,120.87

67,325.95

15,578.58

67,854.47

19,329.00

Leased floor area (㎡)

76,148.98

8,421.16

10,384.55

4,950.90

13,462.71

10,648.27

3,120.87

67,325.95

15,578.58

67,854.47

19,329.00

As of March 31, 2018

98.8%

87.8%

98.6%

97.9%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2017

99.4%

95.9%

99.8%

97.9%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of March 31, 2017

98.2%

95.7%

98.1%

97.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2016

99.6%

95.6%

98.1%

98.2%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of March 31, 2016

99.4%

96.1%

98.3%

98.7%

100.0%

100.0%

99.2%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2015

99.5%

98.0%

98.3%

93.9%

100.0%

100.0%

100.0%

100.0%－－－－

Operating periods

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days①Rental and other operating revenues ( In thousands of yen )Percentage of total appraisal value
Number of tenants(Note)

1,700

Lease Information

Occupancy ratio

Income and Retained Earnings Information

755,754489,453

310,494

264,576

139,608

133,034

72,61041,507

Rental revenues

626,672

345,776

210,142

186,076

139,501

130,633

72,61041,507

Other operating revenues

129,082

143,677

100,352

78,500

106

2,400

－

－

382,300

302,203

166,324

143,284

27,582

40,579

6,239

4,593

Property management fees

142,41184,90846,69052,924

1,928

1,200

1,200

Taxes

71,00923,06034,945

11,874

10,602

14,450

4,774

3,128

Utilities

61,87555,50538,29931,950－－－－

Repairs and maintenance

49,18057,894

11,5306,605

14,222

1,078

－

－

Insurance

1,682

688

489

276

305

221

－

－

Trust fees and other expenses

56,14180,14534,36939,652

524

426

265

265

③NOI（＝①-②） ( In thousands of yen )373,453

187,250

144,169

121,291

112,026

94,76492,45464,037

103,420

79,36966,37036,913④Depreciation ( In thousands of yen )87,82755,42032,34816,351

31,151

20,743

15,62615,114－－－－⑤Rental operating income（＝③-④）( In thousands of yen )285,626

131,829

111,821104,93980,87474,02076,82848,922

103,420

79,36966,37036,913②Property-related expenses ( In thousands of yen )(Note)

24,403(Note)(Note)(Note)

Reference⑥Capital expenditures ( In thousands of yen )56,09644,504

4,885

1,696

555

41,650

－

450

－

－

－

－

⑦NCF（＝③-⑥） ( In thousands of yen )317,357

142,745

139,284

119,595

111,470

53,11392,45463,587

103,420

79,36966,37036,913
11.1%

50.6%

61.7%

53.6%

54.2%

19.8%

19.3%

30.5%

11.6%

12.7%

6.4%

8.6%

Property tax for the year 2017 ( In thousands of yen )142,02145,97969,87023,75420,893

14,431

28,903

11,116

27,077

7,981

9,551

Assets pledged as collateral

○

－

－

－

－

－

－

－

－

Expense ratio（＝②／①）

－

－

6,257
－

2015年10月2日【Reference】

2015年10月2日

2016年4月21日

2016年4月20日

2016年4月21日

2017年4月19日

2017年4月19日

2017年5月18日

2017年4月19日

2017年4月19日

2018年2月13日

Earnings Performance for the Individual Properties for the 6th Fiscal Period (October 1, 2017 to March 31, 2018)：182 days ※As of March 31, 2018
Tokyo metropolitan area

Location
Property No.

T-13

T-14

T-15

T-16

Property Name

Inageya Yokohama
Minamihonjuku(Land)

Gourmet City
Chiba-Chuo

Nakamachidai
Tokyu Store

Acquisition Date

October 10,
2, 2015
February2015 October 2, 2015

T-17

T-18

T-19
Yumemachi
Narashinodai
Mall
April 19, 2017

T-20

T-21

T-22

Kawamachi
Yahagi Mall

Prime Square
Jiyugaoka

2015年2月10日

Greater Osaka area

T-23

O-1

Price
Information

April 21, 2016

Central Wellness
Club Nagatsuta
Minamidai
April 20, 2016

April 21, 2016

Totsuka-Fukaya
Shopping Center(Land)
April 19, 2017

May 18, 2017

April 19, 2017

April 19, 2017

Acquisition price ( In millions of yen )

1,442

760

3,360

1,724

1,450

4,170

3,416

3,097

2,820

1,880

1,263

Percentage of total portfolio

0.7%

0.4%

1.6%

0.8%

0.7%

2.0%

1.7%

1.5%

1.4%

0.9%

0.6%

4.1%

Net book value ( In millions of yen )

1,462

751

3,433

1,779

1,464

4,228

3,443

3,121

2,916

1,897

1,279

8,316

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

1,430

799

3,810

1,900

1,510

4,310

3,520

3,210

2,830

1,960

1,340

9,350

0.6%

0.4%

1.7%

0.9%

0.7%

2.0%

1.6%

1.5%

1.3%

0.9%

0.6%

4.2%

1

1

1

2

1

2

1（14）

1（12）

2

1

1

51

Leasable floor area (㎡)4,405.41

3,488.77

5,968.71

3,996.70

2,929.58

14,092.51

7,827.96

6,397.05

3,512.55

11,963.61

1,217.02

30,290.55

Leased floor area (㎡)4,405.41

3,488.77

5,968.71

3,996.70

2,929.58

14,092.51

7,827.96

6,397.05

3,512.55

11,963.61

1,217.02

29,797.70

As of March 31, 2018

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

98.4%

As of September 30, 2017100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%－

98.2%

As of March 31, 2017100.0%

100.0%

100.0%

100.0%

100.0%

－

－

－

－

－

－

99.2%

As of September 30, 2016

100.0%

100.0%

100.0%

100.0%

100.0%

－

－

－

－

－

－

99.1%

As of March 31, 2016

100.0%

100.0%

－

－

－

－

－

－

－

－

－

99.5%

－

－

－

－

－

－

－

－

－

－

－

99.5%

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

47days182days

Percentage of total appraisal value
Number of tenantsLife Kameido

Round1 IchikawaOzeki Tokiwadai Blumer Maitamon
Onitaka
February 13, 2018 February 10, 2015

8,389

Lease Information

Occupancy ratio

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

59,742

140,308

118,611

481,857

Rental revenues

58,200115,283

96,552363,528

Other operating revenues

1,542

25,02422,058118,328

11,50140,32429,201

198,340②Property-related expenses ( In thousands of yen )11,090

8,869

Taxes

6,192

0

－

Utilities

329

26,43819,03367,485

Repairs and maintenance

921

1,667

548

2,434

Insurance

126

189

151

725

Trust fees and other expenses

763

938

599

23,552

Property management fees

③NOI（＝①-②） ( In thousands of yen )(Note)

3,169(Note)(Note)(Note)(Note)(Note)

61,802(Note)

42,33931,86317,08088,491

48,241

29,691

100,185

99,98389,41064,33258,619

7,919

－

9,805

20,311

7,745

2,980

－

14,073

8,913

6,977

10,888763

51,114

31,863

7,275

68,18040,49526,710100,185

85,90980,49757,35447,731

7,156

232,402④Depreciation ( In thousands of yen )⑤Rental operating income（＝③-④）( In thousands of yen )(Note)

283,516

－

－

750

－

－

－

880

－

18,016－－－⑦NCF（＝③-⑥） ( In thousands of yen )31,86317,08087,741

48,241

29,691

100,185

99,10389,41046,316

58,6197,919

283,516

Expense ratio（＝②／①）

11.4%

52.7%

23.7%

19.3%

24.1%

1.4%

28.7%

24.6%

5.2%

8.3%

9.3%

41.2%

Property tax for the year 2017 ( In thousands of yen )5,284

11,418

14,205

12,388

8,489

9,874

21,842

6,956

12,63820,664

2,836

84,642

－

－

－

－

－

⑥Capital expenditures ( In thousands of yen )Reference

Assets pledged as collateral

－

－

－

－

－

－

－

2015年2月10日【Reference】

2015年2月10日

2015年4月16日

2015年10月2日

2015年10月2日

2015年10月2日

2015年10月2日

2016年1月21日

2016年4月21日

2015年2月10日

2015年2月10日

2015年2月10日

Earnings Performance for the Individual Properties for the 6th Fiscal Period (October 1, 2017 to March 31, 2018)：182 days ※As of March 31, 2018
Greater Osaka area
Greater Nagoya area

Location
Property No.
Property Name
Acquisition Date

O-2

O-3

Life Takadono(Land)

Piago Kahma
Home Center
OmihachimanO-4

February 10,
10, 2015
February2015 February 10, 2015

O-5

O-6

O-7

Blumer HAT
KobeCarino Esaka

COMBOX
Komyoike

O-8

O-9

O-10

WelciaHankyu Oasis
Life NishiKishiwadakamori
Hirakatadeguchi
Tengachaya(Land)
October 2, 2015 October 2, 2015 January 21, 2016

N-1

Million Town
Tsukaguchi(Land)
April 21, 2016

N-2

N-3

Kahma Home
Valor IchinomiyaCenter Nakagawa
Nishi
Tomita (Land)

K’s Denki
Nakagawa
Tomita (Land)

Price
Information

April 16, 2015

October 2, 2015

October 2, 2015

Acquisition price ( In millions of yen )

2,685

2,140

11,000

6,555

6,450

1,280

487

1,505

3,723

2,311

2,174

889

Percentage of total portfolio

1.3%

1.0%

5.3%

3.2%

3.1%

0.6%

0.2%

0.7%

1.8%

1.1%

1.1%

0.4%

Net book value ( In millions of yen )

2,727

2,141

11,455

6,664

6,370

1,314

497

1,558

3,772

2,351

2,154

907

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

3,090

2,430

11,500

6,910

6,810

1,330

488

1,650

3,870

2,680

2,320

1,010

1.4%

1.1%

5.2%

3.1%

3.1%

0.6%

0.2%

0.7%

1.8%

1.2%

1.1%

0.5%

1

2

1（39）

1（31）

1

1

1

1

1

1

1

1

Leasable floor area (㎡)4,437.07

14,313.00

23,775.88

7,540.58

25,530.44

2,960.38

3,033.45

2,679.52

8,264.46

Leased floor area (㎡)4,437.07

14,313.00

23,118.86

7,540.58

25,530.44

2,960.38

3,033.45

2,679.52

8,264.46

As of March 31, 2018

100.0%

100.0%

97.2%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2017100.0%

100.0%

98.7%

97.8%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of March 31, 2017100.0%

100.0%

99.1%

97.8%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2016

100.0%

100.0%

99.1%

99.1%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

As of March 31, 2016

100.0%

100.0%

98.7%

99.1%

100.0%

100.0%

100.0%

100.0%－

100.0%

100.0%

100.0%

As of September 30, 2015

100.0%

100.0%

99.5%

－

－

－

－

－

－

100.0%

100.0%

100.0%

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

Percentage of total appraisal value
Number of tenantsFebruary 10, 2015 February 10, 2015 February 10, 2015

9,447.48(Note)(Note)

9,447.48

Lease Information

Occupancy ratio

Operating periods①Rental and other operating revenues ( In thousands of yen )Income and Retained Earnings Information

475,218

320,430

226,155

44,870Rental revenues

367,110

198,327

226,155

44,870

Other operating revenues

108,108

122,103－－

210,792

110,299

33,2295,636②Property-related expenses ( In thousands of yen )68,312

41,777

1,800

Taxes

47,18924,52430,386

3,376

Utilities

63,80533,885－－

Repairs and maintenance

5,557

6,140

－

－

982

649

630

49

24,945

3,322

413

410

Property management fees

(Note)(Note)

Insurance
Trust fees and other expenses③NOI（＝①-②） ( In thousands of yen )(Note)(Note)(Note)

73,941

264,426

210,131

192,925

37,24010,69739,23378,68960,03753,133

10,651

54,27731,98832,894

5,210

－

4,682

－

－

14,792－

63,872

63,289210,149

178,143

160,031

32,02910,69734,551

78,68960,03738,341

22,959－14,899490

46,831

－

1,727

－

－

－

－

25,612－

63,872

59,042

263,936

163,300

192,925

35,512

10,69739,23378,68960,037

27,521

22,95913.0%

Reference

Expense ratio（＝②／①）

7.1%

21.1%

44.4%

34.4%

14.7%

14.4%

19.0%

12.6%

12.6%

9.6%

32.6%

Property tax for the year 2017 ( In thousands of yen )6,818

29,22594,37949,04960,779

7,804

2,072

6,755

19,6909,869

19,900○－－－Assets pledged as collateral(Note)－⑥Capital expenditures ( In thousands of yen )⑦NCF（＝③-⑥） ( In thousands of yen )1,800(Note)

63,872④Depreciation ( In thousands of yen )⑤Rental operating income（＝③-④）( In thousands of yen )(Note)

－

－

－

○

－

－

－

22,9593,949－

2016年4月21日【Reference】

2016年11月1日

2017年8月1日

2015年2月10日

2017年4月19日

2017年4月19日

2015年2月10日

2015年2月10日

2015年2月10日

2015年10月2日

2015年10月2日

2015年10月2日

Earnings Performance for the Individual Properties for the 6th Fiscal Period (October 1, 2017 to March 31, 2018)：182 days ※As of March 31, 2018
Greater Nagoya area
Fukuoka area
Ordinance-designated cities, core cities and other areas

Location
Property No.

N-4

N-5

N-6

F-1

F-2

F-3

Homecenter
Round1 Stadium
K’s Denki ShinResora Obu
Kurume-Nishi
KohnanSunny Noma
HakataMoriyama (Land) Shopping Terrace
Shopping Center
Sunadabashi
Hanmichibashi
April 21,2016
April 19, 2017
February
10,2015 November 1, 2016 August 1, 2017 February 10, 2015 April 19, 2017

R-1

R-2

R-3

Roseo Mito

K’s Denki
Aomori
HontenSuper Sports
Xebio
Aomori-Chuo

R-4

R-5

R-6
KasumiTechnopark
SakuraOctober 2, 2015

October 2, 2015

Yorktown
ShindenHigashi
October 2, 2015

Acquisition price ( In millions of yen )

7,140

1,370

7,911

1,497

5,020

1,515

10,046

1,469

898

4,180

3,252

830

Percentage of total portfolio

3.5%

0.7%

3.8%

0.7%

2.4%

0.7%

4.9%

0.7%

0.4%

2.0%

1.6%

0.4%

Net book value ( In millions of yen )

7,086

1,390

8,195

1,457

5,057

1,577

9,937

1,467

888

4,322

3,301

848

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

7,310

1,440

7,950

1,590

5,390

1,690

11,500

1,570

936

5,060

3,330

874

3.3%

0.7%

3.6%

0.7%

2.4%

0.8%

5.2%

0.7%

0.4%

2.3%

1.5%

0.4%

1

1

1

Property Name
Acquisition Date
Price
Information

Percentage of total appraisal value
Number of tenants
Leasable floor area (㎡)

20,329.07

Leased floor area (㎡)

20,329.07(Note)

February 10, 2015 February 10, 2015 February 10, 2015

1（42）

1

1

4

1（22）

1

19,990.40

2,814.67

28,026.61

4,641.10

48,296.15

10,083.41

19,820.82

2,814.67

28,026.61

4,641.10

48,161.79

10,083.41(Note)

Ashico Town
Ashikaga

1（29）

2

1

65,616.31

12,768.77

2,047.65

65,616.31

12,768.77

2,047.65

Lease Information

Occupancy ratio
As of March 31, 2018

100.0%

100.0%

99.2%

100.0%

100.0%

100.0%

99.7%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2017100.0%

100.0%

99.4%

100.0%

100.0%

100.0%

99.7%

100.0%

100.0%

100.0%

100.0%

100.0%

As of March 31, 2017100.0%

100.0%－

100.0%

－

－

99.7%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2016

100.0%－－

100.0%

－

－

99.7%

100.0%

100.0%

99.1%

100.0%

100.0%

As of March 31, 2016

－

－

－

100.0%－－

100.0%

100.0%

100.0%

99.1%

100.0%

100.0%

As of September 30, 2015

－

－

－

100.0%－－

100.0%

100.0%

100.0%－－－

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

182days

Operating periods①Rental and other operating revenues ( In thousands of yen )Income and Retained Earnings Information

320,567

51,995378,270

280,542

Rental revenues

251,936

51,995

345,653

209,011

Other operating revenues

68,631－

32,616

71,531

125,825

3,871

77,767

153,837

1,859

19,179－27,24325,216②Property-related expenses ( In thousands of yen )Property management fees

(Note)

39,109(Note)－

Taxes(Note)(Note)(Note)

41,011(Note)

Utilities

49,449－25,93059,671

Repairs and maintenance

22,341

1,369

2,818

16,644

563

126

630

607

14,361516

1,964

10,687

Insurance
Trust fees and other expenses(Note)(Note)③NOI（＝①-②） ( In thousands of yen )178,555

29,991

194,741

40,433

161,673

48,123

300,503

46,151

28,219126,704

98,887④Depreciation ( In thousands of yen )40,570－47,132

14,24622,004

5,625

47,120

6,365

4,894

29,368

13,632

2,661⑤Rental operating income（＝③-④）( In thousands of yen )137,984

29,991

147,60926,186

139,669

42,497

253,382

39,78523,32597,33685,255

20,13822,799

570

－

－

－

－

335

－

－

－

1,134

－

－

177,985

29,991

194,741

40,433

161,673

47,787

300,503

46,151

28,219125,570

98,887

22,799

Expense ratio（＝②／①）

12.5%

10.7%

39.3%

21.9%

1.7%

7.4%

20.6%

17.1%

16.4%

54.8%

36.4%

19.1%

Property tax for the year 2017 ( In thousands of yen )39,764

4,296

51,844

7,383

35,734

7,003

54,474

14,237

6,417

50,435

31,101－－－－⑥Capital expenditures ( In thousands of yen )⑦NCF（＝③-⑥） ( In thousands of yen )Reference

Assets pledged as collateral

－

－

－

－

－

－

－

3,884
－

2016年4月21日【Reference】

2016年4月22日

2017年1月31日

2017年4月27日

Earnings Performance for the Individual Properties for the 6th Fiscal Period (October 1, 2017 to March 31, 2018)：182 days ※As of March 31, 2018
Ordinance-designated cities, core cities and other areas

Location
Property No.

R-7

R-8

R-9

R-10

Property Name

Solala PlazaP-1 Plaza Tenno

Seiyu Rakuichi
Moriya (Land)Sun Street
Hamakita

April 21,2016
February
10,2015 April 22, 2016

Acquisition Date

Total of 52
Properties

Price
Information

January 31, 2017

April 27, 2017

Acquisition price ( In millions of yen )

5,720

4,010

4,111

10,746Percentage of total portfolio

2.8%

1.9%

2.0%

5.2%

100.0%Net book value ( In millions of yen )

5,632

4,155

4,320

10,768208,376

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

5,950

4,340

4,220

11,160220,647

2.7%

2.0%

1.9%

5.1%

100.0%

1

7

1

1（53）

522

49,023.34

866,425.22

48,619.71

862,238.52

Percentage of total appraisal value
Number of tenants
Leasable floor area (㎡)

12,030.83(Note)(Note)

12,030.83

Leased floor area (㎡)

206,176

Lease Information

Occupancy ratio
As of March 31, 2018

100.0%

100.0%

100.0%

99.2%

99.5%

As of September 30, 2017100.0%

100.0%

100.0%

98.0%

99.6%

As of March 31, 2017100.0%

100.0%

100.0%－

99.6%

As of September 30, 2016

100.0%

100.0%

－

－

99.7%

As of March 31, 2016

－

－

－

－

99.6%

As of September 30, 2015

－

－

－

－

182days

182days

182days

182days

Operating periods①Rental and other operating revenues ( In thousands of yen )Rental revenues
Income and Retained Earnings Information

136,340

518,471

8,126,338

135,630

436,068

6,991,591

710

82,403

1,134,746

23,812

206,205

2,684,501

Other operating revenues②Property-related expenses ( In thousands of yen )99.6%
181days *Total: Cost-weighted average operating period (days)

70,767

846,915

14,9594563,751282

46,062597,633

4,666

16,598259,834

Insurance

356

1,010

13,954

Trust fees and other expenses

423

71,763

402,4115,441,836

Property management fees

3,124

(Note)

Taxes
Utilities
Repairs and maintenance(Note)③NOI（＝①-②） ( In thousands of yen )143,884

112,527

94,223

312,265④Depreciation ( In thousands of yen )43,111

16,061－

69,629925,078⑤Rental operating income（＝③-④）( In thousands of yen )100,773

96,466

94,223242,636

4,516,757

－

240

－

2,480

263,806

143,884

112,287

94,223309,785

5,178,030⑥Capital expenditures ( In thousands of yen )⑦NCF（＝③-⑥） ( In thousands of yen )Reference

Expense ratio（＝②／①）

28.1%

17.5%

1.5%

39.8%

33.0%

Property tax for the year 2017 ( In thousands of yen )30,73029,904

22,48357,576

1,376,649

－

－

－

－

Assets pledged as collateral

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

(Reference) Borrowings
Borrowings on a financial institution basis as of March 31, 2018 are as follows:
Classification

LenderSumitomo Mitsui Banking Corporation

Balance at theDecrease
Increase during
Balance at the
beginning ofduring thethe period
end of period
periodperiod(Thousands of(Thousands of(Thousands of(Thousands of
yen)
yen)
yen)
yen)
3,900,000
3,900,000-

Short-Term Loans Payable

Sumitomo Mitsui Banking Corporation

450,000-

450,000-

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

450,000-

450,000-

Mizuho Bank, Ltd.

400,000-

400,000-

Resona Bank, Ltd.

250,000-

250,000-

Aozora Bank, Ltd.

250,000-

250,000-

Sumitomo Mitsui Trust Bank, Ltd.

200,000-

200,000-

Sumitomo Mitsui Banking Corporation

900,000--

900,000

Mizuho Bank, Ltd.

300,000--

300,000

Sumitomo Mitsui Banking Corporation

2,600,000--

2,600,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

Averageinterest rate
Payment due date
(Note 1)
（Note 3）(Note 2)(％)
0.485 October 3, 2017

0.447

-

-

1,070,000

640,000--

640,000

Resona Bank, Ltd.

400,000--

400,000

Mizuho Bank, Ltd.

360,000--

360,000

Mizuho Trust & Banking Co., Ltd.

300,000--

300,000

Mitsubishi UFJ Trust and Banking Corporation （Note 8）

200,000--

200,000

Sumitomo Mitsui Banking Corporation-

3,400,000-

3,400,000

0.446 September 30, 2018

Sumitomo Mitsui Banking Corporation-

2,750,000-

2,750,000

0.455 February 13, 201912,670,000

6,150,000

5,900,000

12,920,000

2,300,000-

2,300,000-

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

800,000-

800,000-

Mizuho Bank, Ltd.

400,000-

400,000-

Mizuho Trust & Banking Co., Ltd.

350,000-

350,000-

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 6 and 7）

750,000--

750,000

Aozora Bank, Ltd. （Note 6）

500,000--

500,000

Mizuho Bank, Ltd. （Note 6）

400,000--

400,000

Sumitomo Mitsui Trust Bank, Ltd. （Note 6）

200,000--

200,000

Resona Bank, Ltd. （Note 6）

200,000--

200,000

The Musashino Bank, Ltd. （Note 6）

150,000--

150,000

1,850,000--

1,850,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 6 and 7）

550,000--

550,000

Sumitomo Mitsui Trust Bank, Ltd. （Note 6）

500,000--

500,000

Resona Bank, Ltd. （Note 6）

300,000--

300,000

The Musashino Bank, Ltd. （Note 6）

250,000--

250,000

Sub Total

9,500,000-

3,850,000

5,650,000

Current Portion of Long-Term
Loans Payable

Sumitomo Mitsui Banking Corporation （Note 6）

0.447

0.534

March 31, 2019

0.545

March 31, 2019--2,400,000

800,000--

800,000

Mitsubishi UFJ Trust and Banking Corporation （Note 8）

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

3,000,000--

3,000,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

700,000--

700,000

Sumitomo Mitsui Trust Bank, Ltd.

500,000--

500,000

Aozora Bank, Ltd.

450,000--

450,000

Resona Bank, Ltd.

450,000--

450,000

Mizuho Bank, Ltd.

400,000--

400,000

2,600,000--

2,600,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

800,000--

800,000

Sumitomo Mitsui Trust Bank, Ltd.

600,000--

600,000

Aozora Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

Mizuho Bank, Ltd.

300,000--

300,000

Resona Bank, Ltd.

300,000--

300,000

Development Bank of Japan Inc.（Note 5）

1,500,000--

1,500,000

0.925 February 10, 2021

Development Bank of Japan Inc.（Note 5）

1,600,000--

1,600,000

1.033 February 10, 2022

Sumitomo Mitsui Banking Corporation

4,600,000--

4,600,000

1.366

April 16, 2025

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

1,000,000--

1,000,000

Sumitomo Mitsui Trust Bank, Ltd.

600,000--

600,000

Mizuho Bank, Ltd.

400,000--

400,000

0.975

March 31, 2023

Resona Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

Mitsubishi UFJ Trust and Banking Corporation （Note 8）

400,000--

400,000

1,500,000--

1,500,000

0.994

March 31, 2023

Long-Term Loans Payable

Sumitomo Mitsui Banking Corporation

Development Bank of Japan Inc.（Note 5）(Note 4)

Unsecured/
Nonguaranteed(Note 4)

Unsecured/
Nonguaranteed

0.545 February 10, 2018

2,400,000

Sumitomo Mitsui Banking Corporation

Unsecured/
Nonguaranteed

April 21, 2018

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

Sumitomo Mitsui Banking Corporation(Note 4)

April 19, 2018

1,070,000

Sumitomo Mitsui Banking Corporation

Remarks

0.443 February 10, 2018

Aozora Bank, Ltd.

Sub Total

Use

0.751 February 10, 2020

0.865 February 10, 2021

0.978 February 10, 2022

Classification

Balance at theDecrease
Increase during
Balance at the
beginning ofduring thethe period
end of period
periodperiod(Thousands of(Thousands of(Thousands of(Thousands of
yen)
yen)
yen)
yen)
Mitsubishi UFJ Trust and Banking Corporation （Note 8）
450,000
450,000
LenderAverageinterest rate
(Note 1)
(Note 2)(％)

Payment due date
（Note 3）0.987

March 31, 2023

1.013

March 31, 2023

1.110

March 31, 2024

1.243

April 16, 2025

Resona Bank, Ltd.

200,000--

200,000

The Musashino Bank, Ltd.

150,000--

150,000

Development Bank of Japan Inc.（Note 5）

1,500,000--

1,500,000

Sumitomo Mitsui Banking Corporation

3,000,000--

3,000,000

Mizuho Bank, Ltd.

1,150,000--

1,150,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

1,000,000--

1,000,000

Mizuho Trust & Banking Co., Ltd.

700,000--

700,000

Sumitomo Mitsui Trust Bank, Ltd.

650,000--

650,000

Resona Bank, Ltd.

500,000--

500,000

1,500,000--

1,500,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）

400,000--

400,000

Mizuho Bank, Ltd.

710,000--

710,000

Sumitomo Mitsui Trust Bank, Ltd.

620,000--

620,000

Sumitomo Mitsui Trust Bank, Ltd.

450,000--

450,000

0.803 September 30, 2024

Development Bank of Japan Inc.（Note 5）

890,000--

890,000

0.760 September 30, 2024

Sumitomo Mitsui Banking Corporation

2,670,000--

2,670,000

890,000--

890,000

0.888 October 31, 2025
0.550 September 30, 2021

Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）0.932

500,000--

500,000

2,000,000--

2,000,000

1.049

Mizuho Trust & Banking Co., Ltd.（Note 5）

1,000,000--

1,000,000

1.049

500,000--

500,000

1.002

Resona Bank, Ltd.

2,600,000--

2,600,000

Aozora Bank, Ltd.

500,000--

500,000

Mitsubishi UFJ Trust and Banking Corporation （Note 8）

400,000--

400,000

Sumitomo Mitsui Trust Bank, Ltd.

300,000--

300,000

Resona Bank, Ltd.

300,000--

300,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 5 and 7）

600,000--

600,000

0.400

Development Bank of Japan Inc.（Note 5）

500,000--

500,000

0.553

Mizuho Bank, Ltd. (Note 5)

400,000--

400,000

0.553
0.553

Sumitomo Mitsui Banking Corporation

0.485

January 31, 2027

Long-Term Loans Payable

April 27, 2021--

200,000--

1,500,000

Sumitomo Mitsui Trust Bank, Ltd.

400,000--

400,000

Aozora Bank, Ltd.

400,000--

400,000

Resona Bank, Ltd.

300,000--

300,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 5 and 7）

600,000--

600,000

0.696

Mizuho Bank, Ltd. (Note 5)

600,000--

600,000

0.815

Development Bank of Japan Inc.（Note 5）

500,000--

500,000

0.814

Mizuho Trust & Banking Co., Ltd.（Note 5）

200,000--

200,000

0.814

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 5 and 7）

500,000--

500,000

0.903

October 31, 2026

Sumitomo Mitsui Banking Corporation

500,000--

500,000

Sumitomo Mitsui Trust Bank, Ltd.

500,000--

500,000

1.033

May 18, 2027

Resona Bank, Ltd.

400,000--

400,000

Development Bank of Japan Inc.（Note 5）

500,000--

500,000

1.050

Mizuho Bank, Ltd. (Note 5)

500,000--

500,000

1.049

Mizuho Trust & Banking Co., Ltd.（Note 5）

300,000--

300,000

1.050

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 5 and 7）

0.772

October 31, 2024

October 31, 2024

May 18, 2027

500,000--

500,000

0.670 September 29, 2023

1,500,000--

1,500,000

0.918 September 30, 2026

500,000--

500,000

0.930

Mizuho Bank, Ltd. (Note 5)

1,500,000--

1,500,000

1.029

Sumitomo Mitsui Trust Bank, Ltd.

1.100 September 29, 2028

Sumitomo Mitsui Trust Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 5 and 7）

1,500,000--

1,500,000

Sumitomo Mitsui Banking Corporation-

500,000-

500,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Notes 5 and 7）-

1,200,000-

1,200,000

Mizuho Trust & Banking Co., Ltd.

-

350,000-

350,000

Aozora Bank, Ltd.

-

250,000-

250,000

Resona Bank, Ltd.

-

250,000-

250,000

Sumitomo Mitsui Trust Bank, Ltd.

-

200,000-

200,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd. （Note 7）-

1,250,000-

1,250,000

Mizuho Bank, Ltd.

-

800,000-

800,000

Sub Total
Total

70,730,000

4,800,000-

75,530,000

92,900,000

10,950,000

9,750,000

94,100,000

Unsecured/
Nonguaranteed

January 31, 2027

200,000

Sumitomo Mitsui Banking Corporation(Note 4)

April 21, 2026

1,500,000

Mizuho Trust & Banking Co., Ltd.（Note 5）

Remarks

0.368 September 30, 2019

Development Bank of Japan Inc.（Note 5）

The Gunma Bank, Ltd.（Note 5）

Use

1.035

September 29, 2027

October 3, 2027

1.000 February 10, 2028

0.480

August 31, 2019

0.603

August 31, 2022

Note 1: All debts except for the following Note 5 are borrowings at a floating rate.
Note 2: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, with regard to borrowings for which interest rate swap transactions
were implemented in order to hedge the interest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps are indicated.
Note 3: All the repayment methods of debt financing are lump-sum repayments on the due date.
Note 4: 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 5: Borrowings at a fixed rate.
Note 6: Borrowings are listed in the current portion of long-term loans payable from the fiscal period under review, listed in long-term loans payable in the previous fiscal period.
Note 7: The Bank of Tokyo-Mitsubishi UFJ, Ltd. changed its corporate name to MUFG Bank, Ltd. on April 1, 2018.
Note 8: MUFG Bank, Ltd. succeeded to the status of lender from Mitsubishi UFJ Trust and Banking Corporation on April 16, 2018.