Focused Investment in
Shopping Centers for Daily Needs

Semi-annual Reportfor the 12th Period(From October 1, 2020 to March 31, 2021)

https://www.krr-reit.com/en/

12thHighlights

The 12th fiscal period ended March 31, 2021
Distribution per unit

Forecast DPU
for the 13th fiscal period

JPY 7,095

JPY 7,150

Total assets (by acquisition price) /Number of properties
Number of tenants

Forecast DPU
for the 14th fiscal period502

JPY 7,000

JPY 226.7bn / 64
Occupancy rate
at the end of period

99.8%

Co ntents
Ⅰ Overview of KRR
From the Executive Director
External Growth Strategies
ESG Initiatives
Close-up KRR Vol.12
Apita Terrace Yokohama Tsunashima
Financial Highlights

Portfolio List
Portfolio Map
Overview of Portfolio
Summery of Investment Unit

Valor Ichinomiya-Nishi

Ⅱ Asset Management Report
Overview of Asset Management
Profile of KRR
Status on Investment Properties
Capital Expenditures
Expenses and Liabilities
Acquisition and Disposition
Accounting
OthersFrom the Executive Director

I would like to take this opportunity to express
my sincere gratitude to our shareholders foryour continued support to Kenedix Retail REIT
Corporation (“KRR”). I would also like to express
my sympathy to those suffering from COVID-19.
Thanks to your support, KRR has reported its resultsof operations for the twelfth fiscal period(from October 1, 2020 to March 31, 2021).
During the twelfth fiscal period, we faced another challenging period amid the
COVID-19 pandemic and the government’s second state of emergency
declaration. Despite these circumstances, shopping centers for daily needs withgrocery supermarkets as core tenants have continued to act as vital retailinfrastructure providing fundamental functions to maintain day-to-day life of
consumers. Therefore, impact of the pandemic remained limited for KRR.
On the other hand, we decided to dispose of Daikanyama Address Dixsept inthree phases, as we viewed the property not as stable as other assets that wemanage. We are also taking advantage of the gains on sale of the property
from the twelfth to fourteenth periods. As a result, for the twelfth fiscal period,
operating revenue totaled 8,717 million yen, operating income was 4,379 million
yen, ordinary income was 3,799 million yen, and net income was 3,798 million
yen. The distribution to unitholders for the twelfth fiscal period was 7,095,
increasing from the previous fiscal period.
Going into the thirteenth fiscal period, we acquired four additional properties inconnection with the fifth public offering. Through these dispositions andacquisitions, our portfolio consists 65 properties for 243,657 million yen inacquisition price.
In an uncertain business climate, investment unit price has fluctuatedsignificantly. We dedicate ourselves to promote the operation of retail andlogistics facilities in order to respond to the confidence and expectations ofinvestors.
We respectfully look forward to your continued support.

Moyuru Watanabe

Executive Director, Kenedix Retail REIT Corporation
Director & COO, Head of Retail REIT Department,
Kenedix Real Estate Fund Management, Inc.
1

External Growth Strategies

1

Steady AUM growth
Since IPO in 2015, KRR achieved steady growth in AUM through five public offerings. AUM size that was 80.8 billion
yen at IPO has expanded 3 times.

(JPY bn)

Aiming forsteady growthof AUM going
forward

300

243.6

250

204.9

206.1

5th
period6th
period

212.8

213.2

150

100

164.3

3rd
period4th
period7th
period8th
period

226.4

226.7

10th
period11th
period12th
period

200.9

200

158.7

225.8

131.6
91.8
80.8

50

0

IPO

1st
period2nd
period9th
periodAfter theoffering

2

Assets to be disposed of in the 12th, 13th and 14th fiscal period

T-4

Daikanyama Address Dixsept

Urban Station-Front SC

Location

Shibuya ward,
Tokyo

Dispositio
n price

JPY 6,644 mn

O-7 Hankyu Oasis Hirakatadeguchi

T-5

SM

NSC

Location Hirakata, Osaka

Dispositio
n price

JPY 1,500 mn

Location

Unicus Ina(20% quasi-co-ownership interest)

Kitaadachi-gun, Dispositio
Saitaman price

JPY 1,048 mn

Note: 40% of the quasi-co-ownership interest was disposed of in the 12th fiscal period and 30% in the 13th fiscal period. Remaining 3 0% is scheduled to be disposed of in the 14th
fiscal period.

3

Assets acquired in the 12th fiscal period

L-7 Chiba-Kita Distribution Center

L-8 Sapporo Shiroishi Distribution Center

Distribution center in an area with increasing
concentration as an outlying area of the Tokyo Bay Area

Distribution center located in a prime location in the
Sapporo metropolitan area

L

L

Location

Sapporo,Hokkaido

JPY 1,250mn

Acquisition
price

JPY 800mn

Appraisalvalue

JPY 1,340mn

Appraisalvalue

JPY 1,020mn

Appraisal
NOI yield

4.6%

Appraisal
NOI yield

7.3%

Location

Chiba, Chiba

Acquisition
price

Note: In addition to the above, Monenosato Mall (2 New Buildings) and Yokohama Kamigo Distribution Center (lounge building) were acquired in the 12th fiscal period.

2

4

Portfolio after the 5th public offering

By asset type (based on acquisition price)SM
6.2%
Urban StationFront 11.0%

By location (based on acquisition price)

Logistics facilities
5.5%

Shopping
centers fordaily needs

The Greater Fukuoka
area 3.3%

94.5%

SS
15.0%

Ordinance-designatedcities 18.3%

NSC
62.2%

The Greater Nagoya
area 9.1%

4 majormetropolitan
areas

The Tokyo
metropolitan area
area 48.9%

81.7%

The Greater Osaka
area 20.5%

Top 5 properties (based on acquisition price)
Tsunashima 4.7%

Top 10 tenants (based on rent)

HAT Kobe 4.5%
Hamakita 4.4%

Top 5
Properties

Others77.9%

5

Kitera Chofu 4.3%
Mito 4.1%

22.1%

Others
65.1%

A 4.9%
B 4.0%
C 4.0%
D 3.7%
E 3.2%
Top 10F 3.2%
Tenants
G 3.1%
H 3.0%
I 2.9%
J 2.9%

34.9%

Assets acquired in the 13th fiscal period

Acquired the following properties through the 5th public offering.
Apita Terrace Yokohama Tsunashima
T-31 Kitera Town Chofu
T-25 (49% quasi-co-ownership interest)
NSC

A n N SC w ith Life, a grocery supermarket, as the coretenant and a retail trade area of ov er 40,000 people
w ithin a 1km radius

Location
Acquisition
price

Chofu, Tokyo

Appraisal value

JPY 10,500mn

Appraisal NOI
yield

Location

5.2%

Acquisition
price

Acquisition
price

Yokohama, Kanagawa Appraisal value

JPY 5,667mn

Appraisal NOI
yield

JPY 5,930mn
4.7%

T-32 Unicus Urawamisono (Land)

A n N SC w ith Kansai Super Market, a grocery
supermarket, as the core tenant and a retail tradearea of over 50,000 people within a 1km radius

Location

NSC

JPY 11,400mn

O-12 Merado Daikai

NSC

An NSC that meets diverse needs of a growing next-generation
smart city with a concentrated population

Kobe, Hyogo

Appraisal value

JPY 5,440mn

Appraisal NOI
yield

NSC

The underlying land for a community -based NSC
dev eloped in “ Misono Win g City ” in Saitam a, a n ew
town with growing population

JPY 5,780mn

Location

5.3%

Acquisition
price

Saitama, Saitama

Appraisal value

JPY 817mn

JPY 732mn

Appraisal NOI
yield

4.6%

3

ESG Initiatives

1

Certifications on Environmental Initiatives

Awarded GRESB “Green Star ” Rating for five consecutive year
Awarded a “Green Star” Rating in response to high evaluations for five consecutive
years since the first participation in the GRESB Real Estate Assessment in 2016.
Earned four star (out of five star) GRESB Rating in 2020 for two consecutive years.

The number of certified properties and certified floor area (m 2 ) (as of March 31, 2021)
The number of certified
properties

Certified floor area (m2)

Ratio (%) (Note)

DBJ Green Building Certification

14

340,251.61

47.0

Certification for CASBEE for Real
Estate252,232.95

7.2

BELS Assessment

1

19,605.67

4.8

Note: The ratio is the percentage of certified floor area to the gross floor area of properties owned by KRR (731,245.10m 2, calculated on a pro-rata basis of ownership ratio
for compartmentalized ownership, excluding land-only properties).

DBJ Gre e n Building Cer tification

The following 14 properties have been awarded the DBJ Green Building Certification for their environmental initiatives
as of March 2021.
Properties with outstanding environmental & social awareness (★★★★)
T-4 Daikanyama Address Dixept

O -1 Blumer Maitamon

Properties with excellent environmental & social awareness (★★★)
T-2 MONA Shin-Urayasu

T-7 Unicus Yoshikawa

O -5 Carino Esaka

T-3 Passaggio Nishiarai

T-2 0 Kawamachi Yahagi Mall

R-1 Roseo Mito

T-5 Unicus Ina

O -4 Blumer HAT Kobe

R-1 0 Ashico Town Ashikaga

R-4 Sun Street Hamakita

Properties with high environmental & social awareness (★★)
N -6 Resora Obu Shopping Terrace

T-1 9 Yumemachi Narashinodai MallCe r tification for CASBEE for Real Estate
CASBEE is an evaluation system for rating the environmental performance of buildings, developed under the
auspices of the Ministry of Land, Infrastructure, Transport and Tourism. The system rates the overall
environmental performance of buildings from two perspectives; the evaluation of the environmental quality
and performance of buildings themselves and the external environmental load of buildings. As of March 31,
2021, KRR has acquired CASBEE real estate evaluation certification for the following five properties.

Certification rank: S rank
T-25

Apita Terrace Yokohama Tsunashima

N-4

Homecenter Kohnan Sunadabashi

N-6

Certification rank: A rank
Resora Obu
Shopping Terrace

N-4

Costco Wholesale Sapporo Warehouse

L-3

Musashi Ranzan Distribution Center

Earned Certification for Building-Housing Energy-efficiency
Labeling System (BELS)“Certification for Building-Housing Energy-efficiency Labeling System (BELS)” is a third-party
certification system that grades housing and buildings in accordance with an obligation to make aneffort to indicate energy saving performance stipulated in the Act on the Improvement of Energy
Consumption Performance of Buildings, based on the Building Energy Index (BEI) values calculated
from primary energy consumption volume based on nationally-stipulated performance standards
for building energy consumption.
KRR has acquired BELS for the following
property.

Certification rank★★★★★

Apita Terrace Yokohama
Tsunashima4

2

Environmental initiatives

Solar panel installation
We installed solar panels at Unicus Ina, Kawamachi Yahagi Mall and Apita Terrace Yokohama Tsunashima todecrease CO2 emissions.

Unicus Ina
Power generation capacity:
334.53 kW

Apita Terrace Yokohama Tsunashima
Power generation capacity:
25.26 kW

Kawamachi Yahagi Mall
Power generation capacity:
302.40 kW
Power generation results (Note)

Unicus Ina:
337,735kWh

Kawamachi Yahagi Mall:
130,495kWh

Apita Terrace Yokohama Tsunashima:
29,147kWh

Note: The figures of Unicus Ina and Apita Terrace Yokohama Tsunashima are for the period April 2020 to March 2021, and the figures of Kawamachi Yahagi Mall are for theperiod October 2020 to March 2021.

3

Social initiatives

Collaboration with local communities

Supporting UNICEF

We entered into agreements with
Yoshikawa City, Ina Town, and Konosu
City can be used as a temporary shelterat times of emergency.

KRR supports the activity of UNICEF(United Nations Children's Fund) byproviding common areas of its properties
for their fund-raising campaign.

Local events at our properties (Note)
We are making efforts to enliven local
communities by holding communityparticipating events at our properties.

Note: Some events are restrained or restricted due to the COVID-19 pandemic.

4

Governance structure

Decision-making process for acquisition of properties from a related party
When one of the parties involved in the purchase of a property or other transaction is a related-party, the following
independent decision-making procedures are applied.
Preparation of
proposal
Asset
Investment
Division of
Retail REIT
Department

Deliberation andresolution

Confirmation of
proposalCompliance
Officer

Related party
transaction

Compliance
Committee

Other transactions

Deliberation andresolution

Related party
transaction

AssetManagement
Committee ofRetail REIT
Division

Deliberation andresolution
Relatedpartytransaction(Note)

KRR Boardof Directors

ReportAsset
Manager's
Board ofDirectors

Other transactions

Note: Transactions within the scope of insignificance criteria are excluded from the decision-making process above.

Kenedix Group's business model benefiting from our growth
The Kenedix Group’s J-REIT assets constitute the majority of their AUM. Because of the importance of the J-REIT business to
the Kenedix Group, we believe that our sound growth is in line with their interests.

5Vol. 12 Close-up KRR

T-25

NSC

Apita Terrace Yokohama Tsunashima
Shopping center in Yokohama that constitutes a next -generation smart city
Apita Terrace Yokohama Tsunashima is a shopping center opened
in March 2018. It was developed as a center for food, health, andcommunity within the next-generation smart city “Tsunashima
Sustainable Smart Town” located between Tokyu Toyoko Line's
Tsunashima and Hiyoshi Stations. The shopping center is locatedfacing the Tsunashima Street and Prefectural Road 102, making
the facility highly accessible for both cars and bicycles, together
with approximately 900 parking spaces for cars and 450 spaces forbicycles.
Kohoku ward, where the property is located, has the largest
population and number of households among the 18
administrative districts comprising Yokohama, and is one of themost growing areas in the city. In particular, the Sotetsu and Tokyulines are scheduled to be connected in 2022 in the Tsunashima
area, and Shin-Tsunashima Station of the new line will beconnected to Shin-Yokohama station. Further future developmentof the neighboring area is expected by the improving traffic
access. In addition, development of a large-scale condominium
complex totaling approximately 1300 units is underway in thevicinity of this property, and the population of the trade area is
expected to further increase.
As for the tenant composition of the property, in addition to a
grocery supermarket, Apita Food Market, as the core tenant,there is a one-stop lineup of goods and services necessary fordaily life. Tenants include community-based specialty storessuch as Nitori, a drug store and a dollar shop as well as a clinic
mall and a post office.

Acquisition price

JPY 11,566 mn

Location

Yokohama, Kanagawa

Land area

183,300.01m 2

Gross floor area

38,442.49m 2Core tenant

UNY Co., Ltd.

Note: The property was acquired in two separate
acquisitions. The acquisition price is the sum of
the two acquisition prices.

Tenant mix also include service-oriented tenants to help
customers enjoy their stay, such as a food court and abookstore & cafe, to meet the diverse needs of a wide range
of generations. The high percentage of tenants handlingfood and other daily necessities, for which demand isincreasing amid the COVID-19 pandemic, have also led to anincrease in the number of visitors to this property even in the
pandemic.
Tsunashima Sustainable Smart Town, where this property is
located, is pursuing comfort and future lifestyles fromvarious perspectives, including residents, workers and visitors.
Initiatives that take into account the global environment andlocal communities are introduced in this property, including
solar panels, manhole toilets and benches for cooking stove
for disaster use. In recognition of these efforts, the property
received the Building Energy Efficiency Indication System(BELS) Evaluation (Evaluation Results: ★★★★★) in
December 2020 and CASBEE Real Estate Evaluation
Certification (Evaluation Rank: S Rank) in February 2021.
In November 2019, KRR acquired a 51% co-ownershipinterest in the property and the remaining 49% coownership interest through the public offering in April 2021,
bringing the interest to 100%. Going forward, we willcontinue to work to revitalize the facility as a shopping
center for daily needs, with a focus on management inconcert with the local community.

6Financial highlights
KRR implements flexible financial strategies, aiming to produce stable profits in themedium to long-term and to steadily grow its portfolio.

1

Financial highlights (as of March 31, 2021)
LTV

Long-term debt ratio

Fixed interest debt ratio

Weighted averagedebt maturity

Number of lenders

Average interest rate

44.8%

100.0%

4.4 years

2

1.00%

12

Credit rating (as of March 31, 2021)
Credit rating (JCR)

A+ (Stable)
3

96.8%

Rating Outlook improved
from “Stable” to “Positive”(January 2021)

Debt maturity schedule (as of April 30, 2021)

KRR believes that diversified debt maturity schedule will contribute to a stable financing standing.

Debt outstanding JPY 120,300 mn(excluding interest-bearing tenant leasehold and security deposits)
Borrowings

Refinance

Investment corporation bonds

200

Successfully refinanced amid the COVID-19 pandemic
150

100

50

0

4

12th
13th 14th 15th 16th 17th 18th
19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd
period period period period period period period period period period period period period period period period period period period period period period

Inclusion in major indices

KRR believes that the expansion of market capitalization and inclusion in the global index will lead to expansion of the investor
base and improvement of liquidity. KRR is incorporated into the following major indices.

FTSE EPRA／NAREIT Global Real Estate Index
Dow Jones Global Select REIT Index
GPR 250 Index

S&P Developed REIT Index
Bloomberg Asia REIT Index
MSCI Japan Small Cap Index
7

Portfolio List as of March 31, 2021
Total acquisition price

Weighted average occupancy rateJ P Y 2 2 6 , 7 2 5 mn
No.

Name of property

99.8 %

Location(city / ward, prefecture)502

Acquisition
price(JPY mn)Occupancyrate(%) (Note 1)

Number oftenants (Note 2)

T-2

MONA Shin-Urayasu

Urayasu, Chiba

8,063

94.6

53

T-3

Passaggio Nishiarai

Adachi ward, Tokyo

5,850

100.0

41

T-4

Daikanyama Address Dixsept

Shibuya ward, Tokyo

3,234

97.2

26

T-5

Unicus Ina

Kitaadachi-gun, Saitama

4,470

100.0

1

T-6

Yorktown Kita-Kaname

Hiratsuka, Kanagawa

4,000

100.0

1

T-7

Unicus Yoshikawa

Yoshikawa, Saitama

3,600

99.6

9

T-8

Sports Club Renaissance Fujimidai

Nerima ward, Tokyo

2,586

100.0

1

T-9

Super Viva Home Iwatsuki (Land)

Saitama, Saitama

4,815

100.0

1

T-10

K’s Denki Shonan-Fujisawa (Land)

Fujisawa, Kanagawa

3,169

100.0

1

T-11

Unicus Kamisato (Land)

Kodama-gun, Saitama

3,000

100.0

1

T-12

Unicus Konosu (Land)

Konosu, Saitama

1,700

100.0

1
1

T-13

Inageya Yokohama Minamihonjuku (Land)

Yokohama, Kanagawa

1,442

100.0

T-15

Nakamachidai Tokyu Store

Yokohama, Kanagawa

3,360

100.0

1

T-16

Central Wellness Club Nagatsuta Minamidai

Yokohama, Kanagawa

1,724

100.0

2

T-17

Life Kameido

Koto ward, Tokyo

1,450

100.0

1

T-18

Totsuka-Fukaya Shopping Center (Land)

Yokohama, Kanagawa

4,170

100.0

2

T-19

Yumemachi Narashinodai Mall

Funabashi, Chiba

3,416

100.0

14

T-20 Kawamachi Yahagi Mall

Chiba, Chiba

3,097

100.0

12

Prime Square Jiyugaoka

Meguro ward, Tokyo

2,820

100.0

2

T-22 Round1 Ichikawa-Onitaka
T-23 Ozeki Tokiwadai

Ichikawa, Chiba
Itabashi ward, Tokyo

1,880

100.0

1

1,263

100.0

1

Shibuya ward, Tokyo

3,400

100.0

1

Yokohama, Kanagawa

5,899

100.0

1

Hiratsuka, Kanagawa

5,980

100.0

3

Yotsukaido, Chiba

2,753

100.0

11

T-21

第

Number of tenants

T-24

Konami Sports Club Shibuya

期

T-25 Apita Terrace Yokohama Tsunashima
T-26 Kalsa Hiratsuka

末

T-27

Monenosato Mall

T-28 Chofu Center Building (Retail wing)
T-29 Across Plaza Urayasu Higashino (Land)

Chofu, Tokyo

2,300

100.0

3

有

Urayasu, Chiba

2,248

100.0

1

資

T-30 Comfort Market Nishi-Magome

Ota ward, Tokyo

1,920

100.0

1

産

O-1

Blumer Maitamon

Kobe, Hyogo

8,389

99.8

50

O-2

Osaka, Osaka

2,685

100.0

1

Omihachiman, Shiga

2,140

100.0

2

O-4

Central Square Takadono (Land)DCM Kahma MEGA Don Quijote UNY
Omihachiman
Blumer HAT Kobe

Kobe, Hyogo

11,000

98.8

40

O-5

Carino Esaka

Suita, Osaka

6,555

98.6

29

O-6

COMBOX Komyoike

Izumi, Osaka

6,450

100.0

1

O-7

Hankyu Oasis Hirakatadeguchi

Hirakata, Osaka

1,280

100.0

1

O-9

Life Nishi-Tengachaya

Osaka, Osaka

1,505

100.0

1

O-10

Million Town Tsukaguchi (Land)
Habikigaoka Shopping Center

Amagasaki, Hyogo
Habikino, Osaka

3,723

100.0

1

O-11

2,000

2

N-1

DCM Kahma Nakagawa Tomita (Land)

Nagoya, Aichi

2,311

100.0
100.0

N-2

Valor Ichinomiya-Nishi

Ichinomiya, Aichi

2,174

100.0

1

保

O-3

1

N-4

Homecenter Kohnan Sunadabashi

Nagoya, Aichi

7,140

100.0

1

N-6

Obu, Aichi
Nagoya, Aichi

7,911

98.6

42

N-7

Resora Obu Shopping Terrace
Valor Nakashidami (Land)

2,551

100.0

1

F-1

Sunny Noma

Fukuoka, Fukuoka

1,497

100.0

1

F-2

Round1 Stadium Hakata-Hanmichibashi

Fukuoka, Fukuoka

5,020

100.0

1

F-3

Kurume-Nishi Shopping Center

Kurume, Fukuoka

1,515

100.0

4

R-1

Roseo Mito

Mito, Ibaraki

10,046

100.0

23

R-2

K's Denki Aomori Honten

Aomori, Aomori

1,469

100.0

1

R-3

Super Sports Xebio Aomori-Chuo

Aomori, Aomori

898

100.0

1

R-4

Ashico Town Ashikaga

Ashikaga, Tochigi

4,180

99.1

29

R-5

Yorktown Shinden-Higashi

Sendai, Miyagi

3,252

100.0

2

8

Portfolio Map as of April 30, 2021
R-4
T-11

L-5

T-12

UnicusUrawamisono T-32
(land)
L-6

T-26
T-6

T-18
T-10

R-1
T-22

T-23

T-19

R-2

T-27 Monenosato Mall
L-7
T-2
T-20
Chiba-Kita
T-21
T-29
Distribution Center
T-30
T-25
T-15
Apita Terrace
T-13
Yokohama Tsunashima
L-4
T-17

R-3

R-5

L-2

N-2

F-2

末
保
有
資
産

O-10

O-12
Merado Daikai

O-7

N-4

N-1

O-5
O-2
O-11

O-1

F-3

期

N-7

O-3
O-4

第

Sapporo Shiroishi
Distribution Center
R-11

R-9

F-1

No.

L-8

SS
Logistics

T-7

Kitera Town Chofu T-31
T-28
T-24
T-4
T-16

Urban Station-Front SC

T-9

T-8

L-1

SM

R-6

T-5

L-3

NSC

R-1

O-9

N-6
R-10
R-8

O-6

Location(city / ward, prefecture)

Name of property

Acquisition
price(JPY mn)Occupancyrate(%) (Note 1)

Number oftenants (Note 2)

R-6

Kasumi Technopark Sakura

Tsukuba, Ibaraki

830

100.0

1

R-8

P-1 Plaza Tenno

Hamamatsu, Shizuoka

4,010

100.0

7

R-9

Seiyu Rakuichi Moriya (Land)

Moriya, Ibaraki

4,111

100.0

1

R-10

Sun Street Hamakita

Hamamatsu, Shizuoka

10,746

99.4

53

R-11

Costco Wholesale Sapporo Warehouse

Sapporo, Hokkaido

4,210

100.0

1

L-1

Zama Distribution Center

Zama, Kanagawa

1,400

100.0

1

L-2

Oppama Distribution Center

Yokosuka, Kanagawa

1,300

100.0

1

L-3

Musashi Ranzan Distribution Center

Hiki-gun, Saitama

3,879

100.0

1

L-4

Yokohama Kamigo Distribution Center

Yokohama, Kanagawa

918

100.0

2

L-5

Gyoda Distribution Center

Gyoda, Saitama

3,160

100.0

1

L-6

Shinjuku Nihiochiai Distribution Center

Shinjuku ward, Tokyo

810

100.0

1

L-7

Chiba-kita Distribution Center

Chiba, Chiba

1,250

100.0

1

L-8

Sapporo Shiroishi Distribution Center

Sapporo, Hokkaido

800

100.0

1

226,725

99.8

502

Total
Note 1: “Occupancy rate” is as of March 31, 2021.
Note 2: “Number of tenants” indicates the number of end-tenants as of March 31, 2021.

Note 3: Please refer to p.3 for the assets acquired in the 13th fiscal period.

9Overview of portfolio (as of April 30, 2021)
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)

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-15

Nakamachidai
Tokyu Store

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

T-24

Konami Sports
Club Shibuya

T-25

Apita Terrace Yokohama Tsunashima

T-26

Kalsa Hiratsuka

T-27

Monenosato Mall

T-28

KDX Chofu Building(Retail wing)

T-29

Across Plaza Urayasu
Higashino (Land)

T-30

Comfort Market
Nishi-Magome

O-2

Life Takadono (Land)

Kahma MEGA Don
O-3 DCM
Quijote UNY Omihachiman

O-5

Carino Esaka

O-1

Blumer Maitamon

Note: Please refer p. 2-3 for the assets acquired in the 12th and 13th fiscal periods.

10

O-6

COMBOX Komyoike

O-11

Habikigaoka Shopping
CenterN-1

DCM Kahma
Nakagawa Tomita (Land)

N-7

Valor Nakashidami (Land)

F-1

Sunny Noma

Homecenter Kohnan
Sunadabashi

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-6

Kasumi Technopark
SakuraR-8

P-1 Plaza Tenno

R-9

Seiyu Rakuichi Moriya(Land)

R-10

Sun Street Hamakita

R-11

Costco Wholesale
Sapporo Warehouse

L-1

Zama Distribution Center

L-2

Oppama Distribution
CenterL-3

Musashi Ranzan
Distribution Center

L-5

Gyoda Distribution Center

L-6

Shinjuku Nishiochiai
Distribution Center

O-4

Blumer HAT Kobe

O-7

Hankyu Oasis
Hirakatadeguch

O-9Life Nishi-Tengachaya

N-2

Valor Ichinomiya-Nishi

N-6

Resora Obu Shopping Terrace

N-4

O-10

R-5

L-4

Million Town
Tsukaguchi (Land)

Yorktown ShindenHigashi

Yokohama Kamigo
Distribution Center11

Summar y of Investment Unit
Unit price and trading volume( Unit s)
100,000
February 10, 2015
JPY 266,100

340,000

40,000

Unit price

VolumeMarch 31, 2021
JPY 268,700

310,000

35,000280,000

30,000250,000

25,000220,000

20,000190,000

15,000160,000

10,000130,000

5,000

100,000

Feb
10

Mar
31

Sep
30
2015

Mar
31

Sep
30

Mar
31

2016

Sep
30

Mar
31

Sep
30

Mar
31

2018

2017

Sep
30
2019

Mar
31

Sep
30
2020

Mar
31
2021

General breakdown of unitholders
As of March 31, 2021

Ownership ratio by investor type
Brokerage firms
9,537 units（1.8%）

Individuals
and others
73,882 units（13.8%）

Foreigninvestors
142,271 units（26.5%）

536,177
Other domestic
corporation
20,356 units（3.8%）

Number of unitholders by investor type
Other domestic
corporation297（2.1%）
Financial
Institutions
98(0.7%)

Foreign investors
252（1.8%）
Brokerage firms
26(0.2%)

13,852units

Financial
Institutions
290,131 units（54.1%）

Individuals andothers13,177（95.1%）
12

II. ASSET MANAGEMENT REPORT
Overview of Asset Management(1) Trends in Key Indicators
Eighth fiscal period

Ninth fiscal period

Tenth fiscal period Eleventh fiscal period Twelfth fiscal period(From October 1, 2018
to March 31, 2019)(From April 1, 2019
to September 30, 2019)(From October 1, 2019
to March 31, 2020)(From April 1, 2020
to September 30, 2020)(From October 1, 2020
to March 31, 2021)

Millions of yen

8,415

8,609

8,291

8,398

8,717

8,197

8,367

8,234

8,272

8,234

8,263

Millions of yen

4,530

4,729

4,189

4,316

4,338

3,733

3,891

3,359

3,479

3,359

3,377

Operating income

Millions of yen

3,884

3,879

4,101

4,082

4,379

Ordinary income

Millions of yen

3,284

3,288

3,499

3,505

3,799

Net income

Millions of yen

3,283

3,287

3,498

3,504

3,798

Total assets

Millions of yen

237,845236,253249,246

251,655

251,773%(-0.3)(-0.7)(+5.5)(+1.0)(+0.0)

Millions of yen

116,505

116,386

124,450

124,308

124,701%(-0.2)(-0.1)(+6.9)(-0.1)(+0.3)

Fiscal period
Operating revenues
Of which, property-related revenues
Property-related expenses
Of which, property-related expenses[Period-on-period changes]
Total net assets[Period-on-period changes]
Unitholders’ capital
Number of investment units issued andoutstanding
Net assets per unit

Millions of yen

113,399

113,399

121,183

121,183

121,183

Units

507,700

507,700

536,177

536,177

536,177

Yen

229,477

229,242

232,107

231,842

232,575

Distributions(Note 2)Millions of yen

3,288

3,292

3,503

3,509

3,804

Distributions per unit

Yen

6,477

6,486

6,535

6,546

7,095

Of which, distributions of earnings
Of which, distributions in excess ofretained earnings
Ordinary income to total assets (Note 3)

Yen

6,138

6,242

6,525

6,270

7,085

Yen

339

244

10

276

10

1.4

1.4

1.4

1.4

1.5

(2.8)

(2.8)

(2.9)

(2.8)

(3.0)

2.8

2.8

2.9

2.8

3.1

(5.6)

(5.6)

(5.8)

(5.6)

(6.1)

49.0

49.3

49.9

49.4

49.5

(+0.0)(+0.3)(+0.7)(-0.5)(+0.1)

Days

182

183

183

183

182

%

94.9

96.4

100.0

95.9

100.0

53

55

62

62

64

m2

913,759.61

850,456.06

945,177.87

941,020.65

956,496.64

511

480

496

496

502

%

99.2

98.9

99.4

99.7

99.8

Depreciation expense

Millions of yen

990

1,019

1,024

1,040

1,068

Capital expenditures

Millions of yen

500

791

475

544

543

Rental NOI (Net operating income) (Note 9)

Millions of yen

5,454

5,494

5,899

5,833

5,954

FFO (Funds from operation) (Note 10)

Millions of yen

4,105

4,093

4,498

4,431

4,426

%

[Annualized] (Note 4)
Return on net assets (Note 5)[Annualized]%(Note 4)

Net assets to total assets (Note 6)%[Period-on-period changes]
Operating days
Payout ratio(Note 7)

Number of properties
Leasable area
Number of tenants (Note 8)
Occupancy ratio

FFO per unit
Yen
8,085
8,063
8,389
8,265
8,254
Note 1: Figures above are rounded down for monetary amounts and rounded to the nearest tenth for ratios.
Note 2: Distributions in excess of earnings for the allowance for temporary difference adjustments are not considered.
Note 3: Ordinary income to total assets = Ordinary income / {(Total assets at beginning of period + Total assets at end of period) / 2} × 100
Note 4: For the first fiscal period, annualized as if the operation began from February 10, 2015, when the actual operation began.
Note 5: Return on net assets = Net income / {(Net assets at beginning of period + Net assets at end of period) / 2} × 100
Note 6: Net assets to total assets = Net assets at end of period / Total assets at end of period × 100
Note 7: Payout ratio = Total distibutions (excluding excess of earnings) / Net income × 100
When calculated as follows, the payout ratio is 100.1% for the period ended March 31, 2019, 100.2% for the period ended September 30, 2019,100.2% for the period ended March 31, 2020, 100.1% for the period ended September 30, 2020 and 100.1% for the period ended March 31, 2021
Payout ratio = Total distributions (including excess of earnings) / Net income × 100
Note 8: As for building tenants, if a tenant leases multiple spaces in a building, each space is counted as one tenant. In a pass-through type master lease,
the number of end-tenants is shown in parentheses. In a sublease type master lease, the number of master lessee is shown.
Note 9: Rental NOI = Property-related revenues - Property-related expenses + Depreciation expenses
Note 10: FFO = Net income + Depreciation + Amortization - Gain on sale of property + Loss on sale of property
Note 11: FFO per unit = FFO / Number of investment units issued and outstanding(Note 11)13

(2) Status of Asset Management(Overview of the Fiscal Period ended March 31, 2021)
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 end of the fiscal period ended
March 31, 2021 was 536,177 units.
KRR seeks to invest primarily in neighborhood, community and other shopping centers that cater to the day-to-day needsof local area customers and have stable demand from retailers and customers, in order to provide stable investment
returns over the long term. Sponsored by Kenedix, Inc., a leading, independent real estate asset management company,
KRR entrusts its asset management and investment operations to Kenedix Real Estate Fund Management, Inc. (“KFM”),
with the following strategies.

Note: For KRR’s management purposes and ease of classification, KRR defines shopping centers for daily needs as retail properties that generally
have the following characteristics:
a. Retail trade area of approximately a one to ten kilometer radius (and generally, a three to five kilometer radius), with customers predominantly
from local areas surrounding the retail property
b. Operational capacity to accommodate certain daily local retail needs and strong customer traffic on both weekdays and weekends
c. Composed of various specialty stores to meet a range of day-to-day needs such as groceries, clothing and other daily goods and servicesii) Investment Environment
During the fiscal year ended March 31, 2021, the Japanese economy remained in a severe situation, with weakening
employment and income environments and a slowdown in the recovery of consumer spending due to the spread of
COVID-19. On the other hand, there were signs of recovery, such as increases in exports and production, as well as
gradual improvement in corporate earnings and business confidence, which had deteriorated significantly.
Shopping centers for daily needs, in which KRR focuses its investment, sales of service-oriented tenants including
restaurants and some apparel stores have been declining amid the COVID-19 pandemic, but specialty stores such as
supermarkets, drug stores and home & garden stores that cater to the day-to-day needs of customers are expected tomaintain steady demand.
In the real estate trading market, some investors initially took a cautious stance toward real estate investment due to the
spread of the COVID-19. However, investors' willingness to invest in real estate has been recovering against the backdropof monetary easing policies in Japan and overseas, and active transactions are taking place.
iii) Management Performance(A) Acquisition of Assets
KRR acquired three assets (Chiba-Kita Distribution Center with acquisition price (Note 1) of 1,250 million yen, Sapporo
Shiroishi Distribution Center with acquisition price of 800 million yen and Monenosato Mall (2 New Buildings) withacquisition price of 343 million yen). KRR disposed of one asset (Daikanyama Address Dixsept (40% trust beneficiary
quasi co-ownership interests) with sale price (Note 2) of 2,657 million yen (acquisition price was 2,156 million yen)).
KRR also completed additional acquisition through construction of a new building (property expansion) (total
construction cost (Note 3) 9 million yen) at Yokohama Kamigo Distribution Center.
As a result, the portfolio at the end of the period under review (March 31, 2021) consists of 64 properties with the totalacquisition price of 226,725 million yen.

Note 1: “Acquisition price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of thevarious expenses (acquisition expenses, property tax, city planning tax, consumption tax, etc.) required in the acquisition of the asset.
Note 2: “Sale price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of the various
expenses (sale expenses, property tax, etc.) required in the sale of the asset.
Note 3: “Total construction cost” is the sum of construction and design costs (consumption tax is not included), rounded down to the nearest
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 underreview (March 31, 2021) (Note 1). By using the same company for both asset management and property management
services, KRR aims to build stronger relationships with tenants and increase returns from its portfolio. Furthermore, byimplementing retail property and distribution centers management that better reflects the needs of our tenants, KRR
strives to accumulate know-how and improve tenant satisfaction.
KRR invests primarily in neighborhood and community shopping centers that cater to the day-to-day needs of customers.
The portfolio is diversified in terms of properties, tenants and other characteristics with a goal to generate consistentlong-term cash flows. At the same time, a portion of the rent includes sales-linked rent to explore the upside potential(Note 2) for rental income. By using these measures, KRR aims to pursue a portfolio that achieves both stability andgrowth.
As of the end of the period under review, portfolio as a whole performed well with an overall occupancy ratio of 99.8%.
Furthermore, the portfolio is diversified in terms of tenants as there are 502 end-tenants (Note 3) in KRR’s retailproperties and distribution centers.
Note 1:
Note 2:On December 1, 2020, KRR disposed a quasi-co-ownership interest (40% equity interest) in the trust beneficiary interest of Daikanyama
Address Dixsept, and accordingly, the PM businesses of the property have been entrusted to persons other than the Asset Manager.
“Upside potential” represents feasibility of rental income or cash flow growth.

14Note 3: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 type master lease.

(C) Financing
When financing to acquire properties, KRR seeks to achieve the proper balance between financial stability and the costof the funds with the objectives to achieve stable medium- to long-term returns and consistent growth of assets undermanagement.
(Debt Finance)
During the fiscal period under review, KRR borrowed 15,950 million yen for refinancing. Consequently, borrowings
totaled 104,800 million yen and interest-bearing debt including investment corporation bonds (excluding interest-bearing
tenant leasehold and security deposits) totaled 112,800 million yen at the end of the fiscal period under review (March
31, 2021).
When undertaking borrowings, KRR seeks to spread out repayment dates and lengthen borrowing periods. KRR may
use swaps to fix the interest payments to hedge against the risk of a rise in interest rates.
As a result, the average maturity of debt is 4.4 years, the weighted average interest rate is 1.00%, the long-term debt ratio(Note 1) is 100.0% and the LTV ratio (Note 2) is 44.8%.
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, 2021 is as follows.
Credit rating agency
Japan Credit Rating Agency, Ltd. (JCR)

Details of the ratings
Long-term issuer rating

A+ (Outlook: Positive)

Rating on bonds

A+(Shelf Registration)
KRR filed a shelf registration statement for investment corporation bonds (excluding short-term investment corporation
bonds) on October 1, 2020. Details are as follows.
Planned issue amount
Planned issuance period
Use of funds

100,000,000,000 yen
October 8, 2020 to October 8, 2022
Acquisition funds for specified assets (as defined in Article 2, Paragraph 1 of the Investment Trust Law),
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 andmaintenance, working capital, etc.

iv) Results of Operations
For this period, revenue was 8,717 million yen, operating income was 4,379 million yen, ordinary income was 3,799
million yen and net income was 3,798 million yen.
Furthermore, in accordance with the distribution policy in the KRR Articles of Incorporation, KRR made a distribution(excluding excess of earnings) of 3,798,814,045 yen which is almost equivalent to the earnings for the fiscal period. The
distribution per unit (excluding excess of earnings) was 7,085 yen, Cash distributions are paid in accordance with Article
67-15 of the Special Taxation Measures Law (Law No. 26 of 1957, including subsequent amendments).
Furthermore, in accordance with the policy for “Distribution of Money in Excess of Profits” as stated in the KRR Articles
of Incorporation, KRR made a distribution in excess of earnings for the 5,361,770 yen allowance for temporary
adjustment (as defined in Article 2-2-30 of the Ordinance on Accountings of Investment Corporations (Cabinet Office
Ordinance No.47 of 2006, including subsequent amendments.)) for the purpose of reflecting the effect on distributionsof the difference in earnings calculated under Japanese GAAP and Japanese tax laws in association with the amortizationof fixed-term land lease rights (as defined in Article 2-2-30 (a) of the Ordinance on Accountings of Investment
Corporations) and the item deduced from net asset (as defined in Article 2-2-30 (b) of the Ordinance on Accountings ofInvestment Corporations) in association with deferred losses on hedges. This resulted in a distribution in excess ofearnings per unit of 10 yen.
Consequently, the distribution per unit was 7,095 yen (of which the distribution in excess of earnings per unit was 10
yen).

15

(3) Changes in Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ capital since its incorporation aresummarized in the following table.
Date

Type of issue

Total number of units issued andoutstanding (units)
Increase

BalanceUnitholders’ capital(in million yen) (Note 7)
Increase

Balance

Notes

April 20, 2016

Public offering

64,000419,250

15,856

93,463(Note 1)

May 18, 2016

Capital increase throughthird-party allocation

3,200

422,450

792

94,256(Note 2)

April 18, 2017

Public offering

81,250503,700

18,244

112,500(Note 3)

May 17, 2017

Capital increase throughthird-party allocation

4,000

507,700

898

113,399(Note 4)

October 23, 2019

Public offering

27,300535,000

7,462

120,861(Note 5)

Capital increase through(Note 6)
1,177
536,177
321
121,183
third-party allocation
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.
Issued at issue price of 282,847 yen per unit (issue amount of 273,360 yen per unit) for acquisition of new properties.
Issued at issue amount of 273,360 yen per unit for part of future purchase funds for specified assets or repayment of borrowings.
Distributions in excess of earnings for the allowance for temporary difference adjustments are not considered.

November 14, 2019
Note 1:
Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:(Changes in Unit Price at Tokyo Stock Exchange)
The highest and lowest closing prices of the investment units listed on J-REIT section of the Tokyo Stock Exchange foreach fiscal period are as follows.
Fiscal period

Eighth fiscal period

Ninth fiscal period

Tenth fiscal period

Eleventh fiscal period

Twelfth fiscal period

For the period ended

March 31, 2019

September 30, 2019

March 31, 2020

September 30, 2020

March 31, 2021

Highest

JPY 279,600

JPY 291,800

JPY 301,500

JPY 218,000

JPY 274,900

LowestJPY 237,200

JPY 256,300

JPY 110,900

JPY 128,300

JPY 199,200

16

(4) Distributions
The distribution of earnings for the twelfth fiscal period is 7,085 yen per unit. In order to maintain KRR’s favorable tax
treatment, which is available to J-REITs under Article 67-15 of the Special Taxation Measures Act, KRR intends todistribute most of KRR’s retained earnings.
Furthermore, KRR made a distribution in excess of earnings for the allowance for temporary adjustment for the purposeof reflecting the effect on distributions of the difference in earnings calculated under Japanese GAAP and Japanese tax
laws in association with the amortization of fixed-term land lease rights and the item deducted from net asset inassociation with deferred losses on hedges. This resulted in a distribution in excess of earnings per unit of 10 yen.
Consequently, the distribution per unit for the fiscal period, including the excess distribution, was 7,095 yen (of which
the distribution in excess of earnings per unit was 10 yen).
(in thousands of yen)
Fiscal period
For the period ended
Unappropriated retained
earnings
Retained earnings carriedforward
Total distributions[Distributions per unit]
Of which, distributions ofearnings[Distributions of earnings perunit]
Of which, distributions inexcess of retained earnings[Distributions in excess ofretained earnings per unit]
Total distributions in excessof earnings for the allowancefor temporary adjustment[Distributions per unit]

Eighth fiscal period
March 31, 2019

Ninth fiscal period
September 30, 2019

Tenth fiscal period
March 31, 2020

Eleventh fiscal period
September 30, 2020

Twelfth fiscal period
March 31, 2021

3,283,881

3,455,496

3,784,993

3,716,853

4,153,672

167,619

286,433

212,121355,023

250,664

3,288,372

3,292,942

3,503,916

3,509,814

3,804,175[6,477 yen]

[6,486 yen]

[6,535 yen]

[6,546 yen]

[7,095 yen]

3,116,262

3,169,063

3,498,554

3,361,829

3,798,814[6,138 yen]

[6,242 yen]

[6,525 yen]

[6,270 yen]

[7,085 yen]

172,110

123,878

5,361

147,984

5,361[339 yen][244 yen][10 yen][276 yen][10 yen]172,110

123,878

5,361

147,984

5,361[339 yen][244 yen][10 yen][276 yen][10 yen]Total distributions in excessof earnings from theunitholders’ capital for tax
purposes

－

－

－

－

－

[Distributions per unit]

[－]

[－]

[－]

[－]

[－]

17

(5) Management Policy and Issues to be Addressed
Outlook for Asset Management
It is considered necessary to pay attention to the uncertainties in the Japanese economy, such as stagnation of economic
activities due to the spread of COVID-19.
As for Japan’s retail environment, sales at service-oriented stores including restaurants, and some apparel stores havedeclined due to the COVID-19 pandemic, and continued caution is needed in this environment. On the other hand, evenin an environment marked by the pandemic, specialty stores such as supermarkets, drugstores and home & garden thatcater to the day-to-day needs of customers are expected to maintain steady demand.
Under these circumstances, based on the following management policies, KRR will implement appropriate managementwith the aim of securing stable rental income, steadily growing assets, and building an appropriate financial base from a
medium-to long-term perspective.
(A) Investment Strategy for New Properties and Disposition Policy
We receive a variety of support from many sources in order to achieve the steady growth of our assets and increase thevalue of our assets. One source is the Kenedix Group (Note), including Kenedix, Inc., the parent company of KFM. We
also receive support from our Alliance Companies: Sumitomo Mitsui Finance and Leasing Co., Ltd., SMFL MIRAI
Partners Co., Ltd., both of which are also KFM’s parent companies, Nippon Commercial Development Co., Ltd. andP&D Consulting Co., Ltd. We are implementing a growth strategy that takes full advantage of the external growth
opportunities created by the large and diverse acquisition pipeline made possible by the support of these companies.
When acquiring properties, we make decisions based on all applicable factors with emphasis on four parameters: theretail property’s attractiveness, location, profitability and the tenant mix. By using this selection process, we invest inretail properties with a competitive edge, and good prospects for consistent rental revenue and growth in asset value. We
also invest in carefully selected distribution centers, which supplement retail facilities in providing goods to consumers.
In addition, we invest in land ownership interests underlying retail properties. Regarding land-only properties, we makethese investments after examining the terms of the land leasing agreement, the characteristics of the tenant, the asset
value of the land, and the proportion of land-only properties in our portfolio. We may also consider making an equity
investment in a tokumei kumiai (silent partnership) for the acquisition of preferential negotiation rights and opportunities
for additional revenues, provided that we are given an opportunity to acquire them in the future.
Regarding disposition of a portfolio property, we make decisions based primarily on the significance of these properties
in the context of the portfolio. This is assessed by comprehensive evaluation of the outlook for future profitability andasset value determined based on its current profitability and market trends.
Note:

The Kenedix Group consists of Kenedix, Inc. and its subsidiaries and affiliates.

(B) Management Strategy for Existing Properties
KRR is committed to building a portfolio that can pursue both stability and growth. KRR believes that implementing
integrated asset and property management services makes it possible to properly manage retail properties and distribution
centers and pursue internal growth. Furthermore, this integrated management framework facilitates activities to enliven
local communities where KRR’s 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
・Implementing distribution center management“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 KRR’s in-house property management services
KFM provides property management services for all of KRR’s properties. KRR does 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, KRR uses direct contact with tenant companies at our properties in order to strengthen
tenant relationships and make properties more profitable. To this end, KRR maintains periodic communication withtenants and perform questionnaire surveys to customers for monitoring of market conditions, so that KRR can identify
the needs of tenants and the customers visiting their sites. This process makes it possible to find issues that stand in theway of achieving greater satisfaction for tenants and their customers. Once KRR has discovered points that require
attention, KRR takes 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 tenantmix, realizing growth in asset value by pursuing property expansions, and cutting costs, to improve tenant satisfaction
and acquire more know-how.

18

Pursuit of internal growth through management of retail properties
KRR seeks to improve the profitability and value of its portfolio through proper management of retail properties.
i. Effectively utilize capital expenditure
KRR will use proper and well-timed capital expenditures to increase the satisfaction of tenants and make its properties
more competitive.
ii. Optimize tenant mix
KRR will constantly work on attracting new tenants that are highly appealing to shoppers and replace tenants withothers, optimizing tenant composition, in order to seek stable revenue and higher profitability by attracting morecustomers.
iii. Realize growth in asset value by pursuing property expansions
KRR will use the extensive knowledge involving retail properties of the Kenedix Group and KRR’s Alliance Companies
to utilize the underutilized space (Note) at properties and expand properties. These measures will take into account thecompetitive position of each property, the effect on KRR’s financial position and other factors. By increasing spacethat can be leased, KRR aims 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 is prescribed in Article 52 of the Building Standards Act (Act No.201 of 1950, including subsequent amendments.)
and applied to each retail property in accordance with the Building Standards Act, City Planning Act (Act No.100 of 1968, including
subsequent amendments.) and other laws and regulations, by the land area that is allowed to be used as a retail property site, and subtractingfrom 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 KRR’s properties, KRR seeks tenants that provide services, holds community involved events and uses other measures
to help enliven the local communities where KRR’s properties are located. KRR believes these activities will contributeto the medium to long-term growth in the asset value of these properties.
Implementing distribution center management
Since tenants of distribution centers that KRR invests may belong to the same business sectors as the tenants occupying
KRR’s retail properties, KRR utilizes KRR’s relationship with KRR’s retail tenants in building up KRR’s relationshipwith tenants of distribution centers. KRR believes these tenant relationships will contribute to the long-term managementof these distribution centers.
(C) Financing
KRR 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. KRR’s goal is to selectfinancing methods that result in the optimum balance between financial stability and the financing cost.
(D) Disclosure of Information
KRR’s policy concerning disclosure activities is to use extensive investor relations activities to distribute a broad range
of information to investors and other related parties as well as to announce information as soon and as accurately as
possible. KRR also distribute information with awareness on ESG (Environmental, Social and Governance) for
sustainable growth of unitholder interest. KRR uses TDnet (Timely Disclosure network) and press releases to meet the
timely-disclosure requirements of the Tokyo Stock Exchange. In addition, KRR proactively posts information on its
website (https://www.krr-reit.com/en/).
(E) Conflicts of Interest
In managing KRR’s assets, KFM has established Retail REIT Department Related-party Transactions Rules, and KFM
abides by the rules in conducting related-party transactions. In addition to managing the assets of KRR, KFM provides
asset management services to other REITs, which may incur conflicts of interests in acquisition of assets. In order toprevent the improper allocation of acquisition opportunities, KFM uses a “preferential right for acquisition opportunities”
system for the property acquisition process. KFM has a pipeline committee, which includes a compliance officer, andoperates in accordance with rules. This system is structured to prevent improper allocation of acquisition opportunities,
and thus, managing conflicts of interest among the REITs managed by KFM. Through these measures, KFM is taking
suitable actions regarding conflicts of interest.

19

(6) Important Subsequent Events
KRR passed resolutions at the Board of Directors Meeting held on April 7, 2021 and April 14, 2021, to issue newinvestment units to fund the acquisition of specified assets. Payments for the issuance of new investment units throughpublic offering and through third-party allotment have been completed on April 20, 2021 and May 18, 2021, respectively.
KRR plans to use the net proceeds through third-party allotment to fund part of the acquisition of specified assets or
repayment of borrowings in the future.
As a result, unitholders’ capital totaled 133,103,750,770 yen and total number of investment units issued and outstanding
increased to 582,177 as of May 18, 2021.
Issuance of new investment units through public offerings
Total number of units issued:
Issue price (offer price):
Total amount of issue price (total offer price):
Paid-in amount (issue amount):
Total paid-in amount (total issue amount):
Payment date:

43,800 units
267,930 yen per unit
11,735,334,000 yen
259,136 yen per unit
11,350,156,800 yen
April 20, 2021

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

2,200 units
259,136 yen per unit
570,099,200 yen
May 18, 2021
SMBC Nikko Securities Inc.

(Reference Material)(A) Acquisition of Assets
KRR acquired following asset.
Acquisition price(million yen)
(Note 3)

Appraisal value(million yen)
(Note 4)G.K. RF3

5,667

5,930

April 30, 2021

Chofu, Tokyo

G.K. KRF89

10,50011,400April 21, 2021

Saitama, Saitama

P&D Consulting
Co., Ltd.

732

817

April 9, 2021

Property
type(Note 1)

Property name

T-25

NSC

Apita Terrace
Yokohama
Tsunashima (49%quasi co-ownershipinterests)

Yokohama,
Kanagawa

T-31

NSC

Kitera Town Chofu

T-32

NSC

Unicus Urawamisono(Land) (Note 5)

Property
numberO-12
Note 1:
Note 2:
Note 3:Note 4:Note 5:

Location

SellerAcquisition date

Undisclosed
5,440
5,780 April 21, 2021
(Note 2)
Properties are categorized into the following six types of properties: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC(Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center), SS (Specialty Store) and L (Logistics facility).
Undisclosed as KRR has not obtained consent from the seller.
“Acquisition price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of thevarious expenses (acquisition expenses, property tax, city planning tax, consumption tax, etc.) required in the acquisition of the asset.
Appraisal values are as of March 1, 2021.
The trust property for this property is a portion (32.9% of the entire land) of the land underlying the Unicus Urawamisono building.
NSC

Merado Daikai

Kobe, Hyogo(B) Disposition of Assets
KRR disposed the following asset.
Property
number
T-4
T-5
Note 1:
Note 2:

Property type

Property nameLocation

Sale price(million yen)
(Note 1)

Buyer

Sale date

Daikanyama Address Dixsept
Urban Station- (30% quasi co-ownership
Undisclosed
Shibuya ward, Tokyo
1,993 April 1, 2021
Front SC
(Note 2)interests)
Unicus Ina (20% quasi coInamachi, KitaadachiP&D Consulting Co.,
NSC
1,048 April 9, 2021
ownership interests)
gun, Saitama
Ltd.
“Sale price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of the various
expenses (sale expenses, property tax, etc.) required in the sale of the asset.
Undisclosed as KRR has not obtained consent from the seller.

KRR has contracted a purchase and sale agreement to dispose the following asset.
Property
numberT-4

O-7

Property type

Property nameLocation

Daikanyama Address
Urban Station- Dixsept (30% quasi co- Shibuya ward,
ownership interests)
Tokyo
Front SC
(Note1)
Hankyu Oasis
Hirakatadeguchi (Note Hirakata, Osaka
SM
2)

Buyer

Sale price(million yen)
(Note 3)

Date of contract

Sale date

October 1, 2021

Undisclosed(Note 4)

1,993

November 17,
2020

Undisclosed(Note 4)1,500

February
2021

25,

August 10, 2021

20

Note 1:

Note 2

Note 3:Note 4:The purchase and sale agreement with the buyer on the sale 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 case the 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 sale price (excluding consumption taxes andlocal consumption taxes) to the other party. However, since KRR is the seller in this transaction and there is no concern such as financing inexecuting the sale, KRR believes that the risk of KRR paying the penalty and making an important impact on its financial condition is small.
The purchase and sale agreement with the buyer on the sale 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 case the 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 sale price (excluding consumption taxes andlocal consumption taxes) to the other party. However, since KRR is the seller in this transaction and there is no concern such as financing inexecution the sale, KRR believes that the risk of KRR paying the penalty and making an important impact on its financial condition is small.
“Sale price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of the various
expenses (sale expenses, property tax, etc.) required in the sale of the asset.
Undisclosed as KRR has not obtained consent from the buyer.

(C) Financing
KRR borrowed 5,800 million yen (Series 39) on April 27, 2021 and 900 million yen (Series 41) on April 30, 2021 for the
repayment of the borrowings. Furthermore, KRR borrowed 2,000 million yen (Series 38) on April 21, 2021 and 5,500
million yen (Series 40) on April 30, 2021 for the acquisition of assets.

21

Profile of KRR(1) Status of Unitholders’ Capital
Eleventh fiscal period Twelfth fiscal period
Eighth fiscal period
Ninth fiscal period
Tenth fiscal period(From October 1, 2018 (From April 1, 2019 to (From October 1, 2019 (From April 1, 2020 to (From October 1, 2020
September 30, 2020)
to March 31, 2021)
to March 31, 2019)
September 30, 2019)
to March 31, 2020)

Fiscal period
Total number of authorized
investment units
Total number of investment
units issued and outstanding

5,000,000 units

5,000,000 units

5,000,000 units

5,000,000 units

5,000,000 units

507,700 units

507,700 units

536,177 units

536,177 units

536,177 units

Unitholders’ capital

113,399 million yen

113,399 million yen

121,183 million yen

121,183 million yen

121,183 million yen

Number of unitholders

10,931

10,907

13,558

13,941

13,852(2) Matters Concerning Investment Units
The following is a list of major unitholders as of March 31, 2021.
Name

Address

Number of units
held(Units)Ratio (%)
(Note)THE MASTER TRUST BANK OF JAPAN, LTD.
(Trust Acct.)

2-11-3 Hamamatsucho, Minato-ku, Tokyo

118,502

22.10

CUSTODY BANK OF JAPAN, LTD.
(Trust Acct.) (Note 2)

1-8-12 Harumi, Chuo-ku, Tokyo

51,928

9.68

THE NOMURA TRUST AND BANKING CO.,LTD. (Investment Trust Acct.)

2-2-2 Otemachi, Chiyoda-ku, Tokyo

26,003

4.84

CUSTODY BANK OF JAPAN, LTD.
(Securities Investment Trust Account)

1-8-12 Harumi, Chuo-ku, Tokyo

17,564

3.27

AOZORA BANK, LTD.

6-1-1 Kojimachi, Chiyoda-ku, Tokyo

11,9582.23

SSBTC CLIENT OMNIBUS ACCOUNT

3-11-1 Nihonbashi, Chuo-ku, Tokyo
Standing proxy: The Hongkong and Shanghai
Banking Corporation Ltd.

11,626

2.16

KENEDIX, INC.

2-1-6 Uchisaiwaicho, Chiyoda-ku, Tokyo

10,0501.87

STATE STREET BANK WEST CLIENTTREATY 505234

Shinagawa Intercity Tower A
2-15-1 Kohnan, Minato-ku, Tokyo
Standing proxy: Mizuho Bank, Ltd.

8,928

1.66

HOKKOKU BANK, LTD.

2-12-6 Hirooka, Kanazawa, Ishikawa

7,940

1.48

STATE STREET BANK AND TRUSTCOMPANY 505103

Shinagawa Intercity Tower A
2-15-1 Kohnan, Minato-ku, Tokyo
Standing proxy: Mizuho Bank, Ltd.

6,816

1.27

271,315

50.60

Total
Note:

“Ratio” is the ratio to total number of units issued and outstanding, rounded down to the second decimal place.

22

(3) Matters Concerning Directors and Auditori) Executive Director, Supervisory Director, and Independent Auditor as of March 31, 2021
Position

Name

Executive Director Moyuru Watanabe

Total amount of fees
paid during the period(thousand yen)

Other concurrent title
Director & COO, Head of Retail REIT Department, KFM

1,500

Yoshitoshi Yasu

Yoshitoshi Yasu Certified Public Accountant / Tax Accountant OfficeDirector and audit comittee member (outside director) of Looop Inc.
Outside director of YOKU MOKU Holdings Co., Ltd.

1,500

Akiko Yamakawa

Partner of Vanguard Lawyers Tokyo
External Audit & Supervisory Board Member of TIS Inc.

1,500

Supervisory
Director(Note)

Independent Auditor Ernst & Young ShinNihon LLC
Note:11,800－Although supervisory directors are concurrently officers in corporations other than the ones stated above, there are no conflicts of interest
between KRR and any other corporations, including those stated above.

ii) Policy on Decisions to Terminate or not Reappoint the Accounting Auditor
The KRR Board of Directors will consider the termination of the Accounting Auditor pursuant to the provisions of theInvestment Trust Act of Japan. The directors will also consider not reappointing the Accounting Auditor after examining
the quality of audits, compensation for auditing and other applicable items.
(4) Asset Manager, the Custodian and Administrators
Asset manager, the custodian and administrators as of March 31, 2021 are as follows.
Operational role

Name

Asset Manager

Kenedix Real Estate Fund Management, Inc.

Asset Custodian

Mizuho Trust & Banking Co., Ltd.

Unitholders’ Register Agent

Mizuho Trust & Banking Co., Ltd.

General Administrator

Mizuho Trust & Banking Co., Ltd.

Financial Agent for Investment Corporation Bonds

Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.

23

Status on Investment Properties(1) Component of Assets
Type ofspecified asset

Areas

Property type

(Note 1)Eleventh fiscal period
as of September 30, 2020
Total amount held
(Millions of yen)
(Note 2)

Shopping
centers fordaily needs
Trust beneficiaryinterest inreal estate

Note 2:
Note 3:

Total amount held
(Millions of yen)

Ratio (%)
(Note 3)(Note 2)

Ratio (%)
(Note 3)

Tokyo metropolitan
area

96,613

38.4

94,736

37.6

Greater Osaka area

46,14018.3

46,036

18.3

Greater Nagoya area

22,055

8.8

21,959

8.7

Fukuoka area

7,891

3.1

7,855

3.1

Ordinance-designatedcities, core cities andother areas

43,92317.5

43,765

17.4

Other retailproperties

－

－

－

－

－

Distribution
centers

－

7,954

3.2

10,0494.0

Total of trust beneficiary interests in real estate

224,57989.2

224,402

89.1

Distribution
centers

3,686

1.5

3,684

1.5

Total of real estate

3,686

1.5

3,684

1.5

Bank deposits and other assets

23,3899.3

23,686

9.4

Total assets

251,655

100.0

251,773

100.0

Real estate

Note 1:

Twelfth fiscal period
as of March 31, 2021－

“Areas” are categorized to the Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area and Ordinancedesignated 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 other areas” 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 KRR believes 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 is rounded down to the nearest million yen.
“Ratio” is the ratio of the amount allocated in the balance sheets to the total assets rounded to the nearest tenth.

24

(2) Major Assets Owned
The following are major assets owned (the ten largest properties by book value) by KRR as of March 31, 2021.
Property
NumberO-4

Property nameBlumer HAT Kobe

Book value(million yen)
11,207

Leasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

23,775.88

23,483.16

48,697.29

48,426.66

Occupancy
rate(%)(Note 3)

Ratio tototal rental
revenue(%)

Primary use(Note 4)

98.8

5.7

Retail(Note 5)

99.4

6.5

RetailR-10

Sun Street Hamakita

10,617

R-1

Roseo Mito

9,670

48,296.15

48,296.15

100.0

4.6

Retail

T-2

MONA Shin-Urayasu

8,992

9,955.84

9,418.68

94.6

5.9

RetailO-1

Blumer Maitamon

8,428

30,290.85

30,235.07

99.8

5.8

Retail

N-6

Resora Obu Shopping Terrace

8,055

19,909.33

19,634.11

98.6

3.5

Retail－(Note 5)N-4

Homecenter Kohnan Sunadabashi

6,847

20,329.07

20,329.07

100.0(Note 7)RetailO-5Carino Esaka

6,731

7,542.69

7,440.84

98.6

3.5

RetailO-6

COMBOX Komyoike

6,173

25,530.44

100.0

2.7

Retail－Retail

T-26

25,530.44(Note 6)

Kalsa Hiratsuka

5,996

14,195.00

14,195.00

100.0(Note 7)

Total

82,721

248,522.54

246,989.18

99.4(Note 7)－Note 1: “Leasable area” is equivalent to gross floor area of space that KRR considers 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.
Note 2: “Leased area” indicates the total leased area based on the lease agreements for each property as of March 31, 2021. As for lease agreementsof buildings, the leased area of warehouses and land are excluded. As for pass-through type master leases, the leased area based on the leaseagreements between the master lessee and the end-tenants as of March 31, 2021 is shown. As for sublease type master leases, the leased area
to the master lessee is shown.
Note 3: “Occupancy rate” is calculated by dividing leased area by leasable area as of March 31, 2021, rounded to the nearest tenth.
Note 4: “Ratio to total rental revenue” is calculated by rental revenue each property divided by total rental revenue.
Note 5: The area that KRR owns exclusively as proportion to the co-ownership interest (co-ownership ratio: 90%).
Note 6: The total area that KRR owns exclusively as a compartmentalized ownership interest (retail space).
Note 7: KRR has not obtained consent from the tenant(s) to release this information.

25

(3) Overview of the Portfolio[Overview of Assets Owned]
The following summarizes the real estate or the real estate properties in trust owned by KRR as of March 31, 2021.
Area

Property
number
T-2
T-3
T-4

Property type
(Note1)

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

Property nameLocation(City/ward, prefecure)(Note 2)MONA Shin-Urayasu

Urayasu, Chiba

Passaggio Nishiarai

Adachi ward, Tokyo

Daikanyama Address
Dixsept (Note 5)

Shibuya ward, Tokyo

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

NSC

Unicus Kamisato (Land)

Kodama-gun, Saitama

T-12

NSC

Unicus Konosu (Land)

Konosu, Saitama

T-13

SM

T-15

NSC

T-16

SS

T-17

SM

T-18

NSC

T-19

NSC

T-20

NSC

Kawamachi Yahagi Mall

Chiba, Chiba

T-21

SS

Prime Square Jiyugaoka

Meguro ward, Tokyo

T-22

SS

Round1 IchikawaOnitaka

Ichikawa, Chiba

T-23

SM

Ozeki Tokiwadai

Itabashi ward, Tokyo

T-24

SS

T-25

NSC

T-26

NSC

Kalsa Hiratsuka

Hiratsuka, Kanagawa

T-27

NSC

Monenosato Mall

Yotsukaido, Chiba

T-28

NSC

T-29

NSC

T-30

SM

T

Sports Club
Renaissance Fujimidai
Super Viva Home
Iwatsuki (Land)
K’s Denki ShonanFujisawa (Land)

Inageya Yokohama
Minamihonjuku (Land)
Nakamachidai
Tokyu Store
Central Wellness Club
Nagatsuta MinamidaiLife Kameido
Totsuka-Fukaya
Shopping Center (Land)
Yumemachi
Narashinodai Mall

Konami Sports Club
Shibuya
Apita Terrace Yokohama
Tsunashima

KDX Chofu Building(Retail wing)
Across Plaza Urayasu
Higashino (Land)
Comfort Market
Nishi-Magome

Nerima ward, Tokyo
Saitama, Saitama
Fujisawa, Kanagawa

Yokohama, Kanagawa
Yokohama, Kanagawa
Yokohama, Kanagawa
Koto ward, Tokyo
Yokohama, Kanagawa
Funabashi, Chiba

Shibuya ward, Tokyo
Yokohama, Kanagawa

Chofu, Tokyo
Urayasu, Chiba
Ota ward, Tokyo

Ownership
form
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
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 estateBook value(in million yen)

Evaluation value(in million yen)
(Note 3)

8,992

9,980

5,661

6,530

3,214

3,750

(Note 4)(Note 4)

4,370

5,270

3,860

4,340

3,504

3,860

2,441

2,750

4,890

5,530

3,210

3,450

3,043

3,050

1,726

1,780

1,462

1380

3,311

3,740

1,733

1,780

1,478

1480

4,228

4,330

3,370

3,500

3,115

3,240

2,976

2,810

1,835

1,960

1,270

1,340

3,609

3,380

5,896

6,120

(Note 4)(Note 4)

5,996

6,010

2,855

2,970

2,396

2,470

2,283

2,310

2,000

1,990

26

Area

O

Property
numberF(Note1)

Property nameLocation(City/ward, prefecure)(Note 2)

O-1

NSC

Blumer Maitamon

Kobe, Hyogo

O-2

SM

Life Takadono (Land)

Osaka, Osaka

O-3

NSC

DCM Kahma MEGADon Quijote UNY
Omihachiman

Omihachiman, Shiga

O-4

NSC

Blumer HAT Kobe

Kobe, Hyogo

Carino Esaka

Suita, Osaka

COMBOX Komyoike

Izumi, Osaka

O-5
O-6

N

Property Type

Urban StationFront SC
Urban StationFront SC

O-7

SM

Hankyu Oasis
Hirakatadeguchi

Hirakata, Osaka

O-9

SM

Life Nishi-Tengachaya

Osaka, Osaka

O-10

NSC

O-11

NSC

N-1

SS

N-2

NSC

N-4

SS

N-6

NSC

N-7

SM

F-1

SM

F-2

SS

F-3

NSC

R-1

NSC

R-2

SS

R-3

SS

R-4

NSC

Million Town
Amagasaki, Hyogo
Tsukaguchi (Land)
Habikigaoka Shopping
Habikino, Osaka
Center
DCM Kahma
Nagoya, Aichi
Nakagawa Tomita (Land)
Valor Ichinomiya-Nishi
Homecenter Kohnan
Sunadabashi
Resora Obu Shopping
Terrace
Valor Nakashidami(Land)
Sunny NomaIchinomiya, Aichi
Nagoya, Aichi
Obu, Aichi
Nagoya, 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
Ashico Town Ashikaga
Yorktown ShindenHigashi
Kasumi Technopark
SakuraAomori, Aomori
Aomori, Aomori
Ashikaga, Tochigi

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
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 estateBook value(in million yen)

Evaluation value(in million yen)
(Note 3)

8,428

9,580

2,727

3,140

2,112

2,590

11,207

11,000

6,731

7,260

6,173

6,460

1,289

1,300

1,530

1,690

3,772

3,990

2,062

2,020

2,351

2,680

2,116

2,360

6,847

7,540

8,055

7,040

2,587

2,550

1,379

1,650

4,931

5,780

1,544

1,840

9,670

12,000

1,429

1,520

859

911

4,426

4,900

3,224

2,600

833

888

4,136

4,350

4,320

4,280

10,617

11,160

4,245

4,410

R-5

NSC

R-6

SM

R-8

NSC

P-1 Plaza Tenno

Hamamatsu, Shizuoka

R-9

NSC

Seiyu Rakuichi Moriya(Land)Moriya, Ibaraki

R-10

NSC

Sun Street Hamakita

Hamamatsu, Shizuoka

R-11

SS

Costco Wholesale
Sapporo Warehouse

Sapporo, Hokkaido

L-1

L

Zama Distribution Center Zama, Kanagawa

Real estate

1,474

1,740

L-2

L

Real estate

1,347

1,630

L-3

L

4,170

L

966

1,020

L-5

L

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

3,799

L-4

3,190

3,510

L-6

L

Oppama Distribution
CenterMusashi Ranzan
Distribution Center
Yokohama Kamigo
Distribution Center
Gyoda Distribution
CenterShinjuku Nishiochiai
Distribution Center
Chiba-Kita Distribution
Center
Sapporo Shiroishi
Distribution Center

Real estate

862

821

1,261

1,340

830

1,020

228,086

243,840

R

－

L-7

L

L-8

L

Total

Sendai, Miyagi

Ownership
form

Tsukuba, Ibaraki

Yokosuka, Kanagawa
Hiki-gun, Saitama
Yokohama, Kanagawa
Gyoda, Saitama
Shinjuku ward, Tokyo
Chiba, Chiba
Sapporo, Hokkaido

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate(Note 4)(Note 4)(Note 4)(Note 4)Note 1: Properties are categorized into the following six types of properties: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC (Community
Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center), SS (Specialty Store) and L (Logistics facility).
27

We categorize shopping centers for daily needs as follows.
Type of shopping centers for daily
needs

Features

Trade area

NSC (Neighborhood Shopping
Centers)

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

3km-5km

SM (Supermarkets)

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

3km

CSC (Community Shopping Centers)

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

5km-10km

Shopping centers that are located in the immediate vicinity of an urban public
3km-10kmtransportation station, which take advantage of stable foot traffic
Single- or multiple-tenant shopping centers that specialize in a single type ofSS (Specialty Stores)
merchandise or service, such as drug stores, convenience stores, health clubs or
1km-10km
electronic appliance stores“T”, “O”, “N”, “F” and “R” hereinafter refers to Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area andOrdinance-designated cities, core cities and other areas, respectively.
“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 EstateAppraisal 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 of Incorporation as well as the regulations as stipulated by The Investment Trusts Association, Japan.
The amount and proportion of quasi co-ownership interests that KRR owns are shown.
KRR disposed of 40% quasi co-ownership interest of Daikanyama Address Dixsept on December 1, 2020 and 30% quasi co-ownership interest on
April 1, 2021. KRR has also concluded a purchase and sale agreement for the remaining 30% quasi co-ownership interest with disposal date ofOctober 1, 2021.
Urban Station-Front Shopping Centers

Note 2:
Note 3:Note 4:Note 5:28

[Earnings Performance for the Individual Properties]

Area

Property
number

T-2
T-3
T-4

T

Property
type

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

Property nameEleventh fiscal period
Twelfth fiscal period
as of September 30, 2020
as of March 31, 2021
RentalRentalRatio toNumberrevenue
Numberrevenue
Occupancy
total rental
Occupancyof tenants(millionof tenants(millionrate (%)
revenuerate (%)(Note 1)
(Note 1)
yen)
yen)
(%)
(Note 2)
(Note 2)

Ratio tototal rental
revenue(%)

MONA Shin-Urayasu

1(55)

97.6

498

6.0

1(53)

94.6

486

5.9

Passaggio Nishiarai

1(41)

100.0

279

3.4

1(41)

100.0

292

3.5

Daikanyama Address
Dixsept

1(26)

96.0

250

3.0

1(26)

97.2

186

2.3

1.7

1

100.0

142

1.7

T-5

NSC

Unicus Ina

1

100.0

141

T-6

NSC

Yorktown KitaKaname

1

100.0

－

－

100.0

－

(Note 3)

1－(Note 3)(Note 3)(Note 3)

T-7

NSC

Unicus Yoshikawa

1(10)

99.6

134

1.6

1(9)

99.6

131

1.6

T-8

SS

1

100.0

1

100.0

T-9

NSC

1

100.0

1

100.0

T-10

SS

1

100.0

1

100.0

T-11

NSC

1

100.0

75

0.9

1

T-12

NSC

1

100.0

43

0.5

T-13

SM

1

T-15

NSC

T-16

SS

T-17

SM

T-18

NSC

T-19

NSC

T-20

NSC

T-21

SS

T-22

SS

T-23
T-24

SM
SS

T-25

NSC

T-26

NSC

T-27

NSC

T-28

NSC

T-29

NSC

T-30

SM

Sports Club
Renaissance
Fujimidai
Super Viva Home
Iwatsuki (Land)
K’s Denki ShonanFujisawa (Land)
Unicus Kamisato(Land)
Unicus Konosu(Land)
Inageya Yokohama
Minamihonjuku(Land)
Nakamachidai Tokyu
Store
Central Wellness
Club Nagatsuta
Minamidai
Life Kameido
Totsuka-Fukaya
Shopping Center(Land)
Yumemachi
Narashinodai Mall
Kawamachi Yahagi
Mall
Prime Square
Jiyugaoka
Round1 IchikawaOnitaka
Ozeki Tokiwadai
Konami Sports Club
Shibuya
Apita Terrace
Yokohama
Tsunashima－－(Note 3)(Note 3)

100.0

75

0.9

1

100.0

43

0.5

100.0

1

100.0

1

100.0

1

100.0

1

81.0

2

100

1

100.0

1

100.0

2

100.0

2

100.0

1(14)

100.0

142

1.7

1(14)

1(12)

100.0

112

1.4

2

100.0

1

100.0

1
1

100.0 (N－－(Note 3)(Note 3)－－(Note 3)(Note 3)－－－(Note 3)(Note 3)

100.0

138

1.7

1(12)

100.0

112

1.4

2

100.0

1

100.0

1

100.0

1

100.0

－

ot

(Note 3)100.0 e－－(Note 3)(Note 3)

3)

1

100.0

1

100.0

Kalsa Hiratsuka

3

100.0

3

100.0

Monenosato Mall

1(6)

100.0

96

1.2

1(11)

100.0

92

1.1

3

100.0

85

1.0

3

100.0

85

1.0

1

100.0

－

－

100.0

－

(Note 3)

1－(Note 3)(Note 3)(Note 3)

1

100.0

44

0.5

1

100.0

48

0.6

KDX Chofu Building(Retail wing)
Across Plaza Urayasu
Higashino (Land)
Comfort Market
Nishi-Magome

29

Area

Property
number

Property
type

O-1

NSC

Blumer Maitamon

50

99.7

O-2

SM

Life Takadono (Land)

1

100.0

NSC

DCM Kahma MEGADon Quijote UNY
Omihachiman

O-4

NSC

O-6

Urban StationFront SC
Urban StationFront SC

O-7

SM

O-9

SM

O-10

NSC

O-11

NSC

N-1

SS

N-2

NSC

R-4

NSC

R-5

NSC

R

－

Life
Nishi-Tengachaya
Million Town
Tsukaguchi (Land)
Habikigaoka
Shopping Center
DCM Kahma
Nakagawa Tomita(Land)
Valor IchinomiyaNishi
Homecenter Kohnan
Sunadabashi
K’s Denki ShinMoriyama (Land)

L

-

-

1

100.0

44

0.5

1

100.0

2

100.0

1

100.0

1

100.0

－

－

(Note 3)(Note 3)－－(Note 3)(Note 3)

-

1(40)

97.2

285

Valor Nakashidami(Land)

1

100.0

－

－

(Note 3)(Note 3)Sunny Noma

1

100.0

Round1 Stadium
HakataHanmichibashi
Kurume-Nishi
Shopping Center
Roseo Mito
K’s Denki Aomori
HontenSuper Sports Xebio
Aomori-Chuo
Ashico Town Ashikaga
Yorktown ShindenHigashi
Kasumi Technopark
SakuraSun Street Hamakita

L-5(Note 3)-(Note 4)

NSC

L

100.0

100.0

R-10

L-4

1

1

NSC

L

100.0

225

2.7

1

100.0

－

－

(Note 3)(Note 3)

1

100.0

44

0.5

1

100.0

2

100.0

1

100.0

(Note 3)

R-9

L-3

1

－

Seiyu Rakuichi Moriya(Land)

L

3.5

2.7

P-1 Plaza Tenno

L-2

292

－

NSC

L

98.6

225

R-8

L-1

1(29)

100.0

SM

SS

5.7

1

R-6

R-11

473

3.4

SM

SS

98.8

280

F-1

R-3

－
(Note 3)

97.4

Hankyu Oasis
Hirakatadeguchi

Costco Wholesale
Sapporo Warehouse
Zama Distribution
Center
Oppama Distribution
CenterMusashi Ranzan
Distribution Center
Yokohama Kamigo
Distribution Center
Gyoda Distribution
Center3.5－－(Note 3)(Note 3)

100.0

-

-

1(42)

98.6

287

1

100.0

－

－

(Note 3)(Note 3)

1

100.0

1

100.0

－

－

(Note 3)(Note 3)

100.0

52

0.6

1(23)

100.0

378

4.6

1

100.0

100.0

52

0.6

4

1(23)

100.0

382

4.6

1

100.0

1

100.0

1(30)

99.4

2

100.0

－

255

3.1

－

－

(Note 3)(Note 3)

1

100.0

1(29)

99.1

2

100.0

1

100.0

1(7)

100.0

1

100.0

1(7)

100.0

138

1.7

1

100.0

－

(Note 3)－(Note 3)

1

1(53)

99.7

513

6.2

1(53)

1

100.0

－

－

1

100.0

1

100.0

(Note 3)(Note 3)－－(Note 3)(Note 3)

3.5

1

4

(Note 3)－(Note 3)

100.0

100.0

－

－
(Note 3)1

1(Note 3)

5.8

－

1(28)

COMBOX Komyoike

481(Note 3)Carino Esaka

SM

SS

100.0

1(40)

N-7

R-2

2

5.8

Resora Obu Shopping
Terrace

NSC(Note 3)

100.0

477

NSC

R-1

(Note 3)

1

99.1

N-6

NSC

－

99.8

1(41)

SS

F-3

－

50

Blumer HAT Kobe

N-5

SS

5.9

100.0

SS

F-2

485

2

N-4
N

F

Property name

O-3

O-5
O

Eleventh fiscal period
Twelfth fiscal period
as of September 30, 2020
As of March 31, 2021
RentalRentalRatio toRatio toNumberrevenue
Numberrevenue
Occupancy
total rental
Occupancy
total rentalof tenants(millionof tenants(millionrate (%)
revenuerate (%)
revenue(Note 1)
(Note 1)
yen)
yen)
(%)
(%)
(Note 2)
(Note 2)－－

(Note 3)(Note 3)

260

3.2

－

－

(Note 3)(Note 3)

135

1.6

100.0

－

－

(Note 3)(Note 3)

99.4

537

6.5

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

2

100.0

2

100.0

1

100.0

1

100.0

－

－

(Note 3)(Note 3)－－(Note 3)(Note 3)

30

L-6

L

L-7

L

L-8

L

Shinjuku Nishiochiai
Distribution Center
Chiba-Kita Distribution
Center
Sapporo Shiroishi
Distribution Center
Total

1

100.0

－

－

(Note 3)(Note 3)

1

100.0

－

－

－

－

1

100.0

－

－

－

－

1

100.0

496

99.7

8,272

100.0

502

99.8

－

－

(Note 3)(Note 3)

8,263

100.0

Note 1: 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 withleasehold interest) on each such property used mainly as stores and offices, as of March 31, 2021. 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 areentered into, the number of master lessees is with the number of end-tenants indicated in parentheses. Where sublease type master lease agreements
are entered into, the indicated, number of master lessee is shown. As for the “Total” of “Number of tenants”, the number of end-tenants is used forpass-through type master leases and the number of master lessee is used for sublease type master leases.
Note 2: Rental revenue is based on total rental and other operating revenues of each property.
Note 3: KRR has not obtained consent from the tenant(s) to release this information.
Note 4: K’s Denki Shin-Moriyama (Land) was disposed on September 30, 2020.

31

(4) Specified Transaction
As of March 31, 2021, the contract amount and fair value of the outstanding transaction under the specified transaction
account of KRR are as follows.
Contract amount (million yen) (Note 1)
Type

Due after one year

Fair value(million yen)
(Note 2) (Note 3)(Note 1)OTC

Interest rate swaps:
Receive floating / pay fixed

77,51068,010

-250

Total

－

77,51068,010-250Note 1: The contract amount of interest rate swaps is based on its notional principal.
Note 2: For the financial reporting purpose, the transaction is not measured at fair value but accounted for under special treatment for interest
rate swaps based on “Accounting Standards for Financial Instruments” under Japanese GAAP.
Note 3: Based on the amount provided by counterparty financial institutions.

(5) Other Assets
Real estate or beneficiary rights of real estate in trust owned by KRR are disclosed in “(3) Overview of the Portfolio”.
KRR has no other specified assets.
(6) Asset in Geographic Area
KRR owns no asset in specified area other than Japan.

32Capital Expenditures(1) Planned Capital Expenditures
The table below shows major capital expenditures for renovations, repairs and other projects that are planned for theThirteenth fiscal period ending September 30, 2021. These expenditures are for real estate owned by KRR and real estatein trusts in which KRR owns trust beneficiary rights. These planned projects may include some expenditure that will berecorded as expenses rather than capital expenditures for accounting purposes.
Property
number

O-5
R-6
T-2
T-2
L-2

Property name

Carino Esaka
KasumiTechnopark Sakura
MONA
Shin-Urayasu
MONA
Shin-Urayasu
OppamaDistribution Center

Location

PurposePlanned amount of capital expenditure(Millions of yen)
Payment for the Total amountTotal
periodalready paid

Schedule

Replacement of heat source
and air conditioning
equipment (Phase 1)
Repair work in relation to
Tsukuba, Ibaraki
floor expansion
Exterior wall repair work
Urayasu, Chiba(Phase 2)
Air Conditioning equipment
Urayasu, Chiba
replacement (phase 3)
Yokosuka,
Water supply system
Kanagawa
Replacement

Suita, Osaka

From April 2021
to September 2021
From January 2021
to April 2021
From April 2021
to September 2021
From April 2021
to September 2021
From April 2021
to September 2021

210

-

-

94

-

-

67

-

-

67

-

-

15

-

-

(2) Capital Expenditures during the Fiscal Period under Review
The table below shows major capital expenditures for renovations, repairs and other projects in the fiscal period underreview.
The amount of capital expenditures in the fiscal period under review was 543 million yen. There were also expendituresof 185 million yen that were recorded as repair expenses. In total KRR spent 728 million yen on the projects.
Property
number

Property nameLocation

PurposeSchedule

Capital expenditure(Millions of yen)

T-2

MONA ShinUrayasu

Urayasu, Chiba

Air conditioning equipment replacement(phase 2)

From October 2020
to March 2021

91

T-2

MONA ShinUrayasu

Urayasu, Chiba

Exterior wall repair work (phase 1)

From October 2020
to March 2021

86

O-1

Blumer Maitamon

Kobe, Hyogo

Exterior wall repair work (phase 2)

From October 2020
to January 2021

74

L-5

Gyoda Distribution
Center

Gyoda, Saitama

Exterior wall repair work

From January 2021
to March 2021

43

R-8

P-1 Plaza Tenno

Hamamatsu,
Shizuoka

Replacement of power receiving andtransforming facilities

From November 2020
to November 2020

19

Note:

Others

229

Total

543

Construction work related to the construction (property expansion) of the restaurant building at Yokohama Kamigo Distribution Center is not includedin this section (2), as it involves the acquisition of a new building does not fall under the category of capital expenditures for renovation, etc.

(3) Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
Not applicable33

Expenses and Liabilities(1) Expenses related to Asset Management
Eleventh fiscal period(From April 1, 2020
To September 30, 2020)(in thousands of yen)
Twelfth fiscal period(From October 1, 2020
To March 31,2021)

Asset management fees (Note)

706,110808,051

Asset custody fees

10,098

10,178Administrative service fees

32,65632,903

Directors' compensation

4,500

4,500

Other operating expenses

83,784105,424

Total

837,151

961,058

Note: In addition to above, the amount of asset management fees capitalized are 20,390 thousand yen for the eleventh fiscal period and 24,021 thousand yen
for the twelfth fiscal period related to the acquisition of properties that entered the book value of the properties, and 7,639 thousand yen for the eleventh
fiscal period and 13,288 thousand yen for the twelfth fiscal period related to the disposition of properties.

34

(2) Status of Borrowings
Borrowings on a financial institution basis as of March 31, 2021 are as follows.
Classification

LenderBalance at the
beginning of period(Thousands of yen)

Increase during the Decrease during the Balance at the end of
periodperiodperiod(Thousands of yen) (Thousands of yen) (Thousands of yen)

ShortTerm
Loans
PayableSumitomo Mitsui Banking Corporation

2,750,000－

2,750,000－

Averageinterest rate
(Note 1)
(Note 2)(％)

Current Portion of Long-Term Loans Payable
Long-Term Loans Payable

Payment due date
（Note 3）Use

Remarks

0.471

January 31, 2021

(Note 4)

Unsecured/
Unguaranteed

0.865

February 10, 2021

0.925

February 10, 2021

0.472

February 28, 2021

0.550

September 30, 2021

(Note 4)0.485

April 27, 2021

Unsecured/
Unguaranteed(Note 4)

Unsecured/
Unguaranteed

Sub Total

2,750,000－

2,750,000－

Sumitomo Mitsui Banking Corporation

3,000,000－

3,000,000－

MUFG Bank, Ltd.

700,000－

700,000－

Sumitomo Mitsui Trust Bank, Ltd.

500,000－

500,000－

Aozora Bank, Ltd.

450,000－

450,000－

Resona Bank, Ltd.

450,000－

450,000－

Mizuho Bank, Ltd.

400,000－

400,000－

Development Bank of Japan Inc.（Note5）

1,500,000－

1,500,000－

Sumitomo Mitsui Banking Corporation

2,400,000－

2,400,000－

MUFG Bank, Ltd.

1,600,000－

1,600,000－

Sumitomo Mitsui Trust Bank, Ltd.

550,000－

550,000－

Resona Bank, Ltd.

500,000－

500,000－

Aozora Bank, Ltd.

500,000－

500,000－

Mizuho Bank, Ltd.

350,000－

350,000－

Mizuho Trust & Banking Co., Ltd.

300,000－

300,000－

The Gunma Bank, Ltd.（Note5）

500,000－－

500,000

Sumitomo Mitsui Banking Corporation

2,600,000－－

2,600,000

Aozora Bank, Ltd.

500,000－－

500,000

MUFG Bank, Ltd.

400,000－－

400,000

Sumitomo Mitsui Trust Bank, Ltd.

300,000－－

300,000

Resona Bank, Ltd.

300,000－－

300,000

MUFG Bank, Ltd.（Note5）

600,000－－

600,000

0.400

Development Bank of Japan Inc.（Note5）

500,000－－

500,000

0.553

Mizuho Bank, Ltd. （Note5）

400,000－－

400,000

0.553

Mizuho Trust & Banking Co., Ltd.（Note5）200,000－－

200,000

0.553

Sumitomo Mitsui Banking Corporation

900,000－－

900,000

0.473

April 30, 2021

Sumitomo Mitsui Banking Corporation（Note6）

2,600,000－－

2,600,000

MUFG Bank, Ltd.（Note6）800,000－－

800,000

Sumitomo Mitsui Trust Bank, Ltd. （Note6）600,000－－

600,000

Aozora Bank, Ltd.（Note6）

400,000－－

400,000

0.978

February 10, 2022

Mizuho Trust & Banking Co., Ltd.（Note6）

400,000－－

400,000

Mizuho Bank, Ltd. （Note6）

300,000－－

300,000

Resona Bank, Ltd.（Note6）

300,000－－

300,000

Development Bank of Japan Inc.（Note5）（Note6）

1,600,000－－

1,600,000

1.033

February 10, 2022

Sumitomo Mitsui Banking Corporation－

2,750,000－

2,750,000

0.478January 31, 2022

Sub Total

27,400,000

2,750,000

13,200,000

16,950,000

Sumitomo Mitsui Banking Corporation

4,600,000－－

4,600,000

1.366

April 16, 2025

MUFG Bank, Ltd.

1,000,000－－

1,000,000

Sumitomo Mitsui Trust Bank, Ltd.

600,000－－

600,000

Mizuho Bank, Ltd.

400,000－－

400,000－

March 31, 2023

400,000－

0.975

Resona Bank, Ltd.

400,000

Mizuho Trust & Banking Co., Ltd.

400,000－－

400,000

MUFG Bank, Ltd.

400,000－－

400,000

Development Bank of Japan Inc.（Note5）

1,500,000－－

1,500,000

0.994

March 31, 2023

MUFG Bank, Ltd.

450,000－－

450,000

Resona Bank, Ltd.

200,000－－

200,000

0.987

March 31, 2023

The Musashino Bank, Ltd.

150,000－－

150,000

Development Bank of Japan Inc.（Note5）

1,500,000－－

1,500,000

1.013

March 31, 2023

Sumitomo Mitsui Banking Corporation

3,000,000－－

3,000,000

Mizuho Bank, Ltd.

1,150,000－－

1,150,000

MUFG Bank, Ltd.

1,000,000－－

1,000,000－

March 31, 2024

700,000－

1.110

Mizuho Trust & Banking Co., Ltd.

700,000

Sumitomo Mitsui Trust Bank, Ltd.

650,000－－

650,000

Resona Bank, Ltd.

500,000－－

500,000

April 27, 2021

35

Sumitomo Mitsui Banking Corporation

1,500,000－－

1,500,000

MUFG Bank, Ltd.

400,000－－

400,000

Sumitomo Mitsui Trust Bank, Ltd.

450,000－－

Development Bank of Japan Inc.（Note5）

890,000－－

Sumitomo Mitsui Banking Corporation

2,670,000－

MUFG Bank, Ltd.

890,000

Development Bank of Japan Inc.（Note5）
Mizuho Trust & Banking Co., Ltd.（Note5）Long-Term Loans Payable

1.243

April 16, 2025

450,000

0.803

September 30, 2024

890,000

0.760

September 30, 2024－

2,670,000

0.932

April 21, 2026－－

890,000

0.888

October 31, 2025

2,000,000－－

2,000,000

1.049

1,000,000－－

1,000,000

1.049

Resona Bank, Ltd.

500,000－－

500,000

1.002

Sumitomo Mitsui Banking Corporation

1,500,000－－

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

MUFG Bank, Ltd.（Note5）

600,000－－

600,000

0.696

Mizuho Bank, Ltd. （Note5）

600,000－－

600,000

0.815

Development Bank of Japan Inc.（Note5）

500,000－－

500,000

0.814

Mizuho Trust & Banking Co., Ltd.（Note5）200,000－－

200,000

0.814

MUFG Bank, Ltd.（Note5）

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.（Note5）

500,000－－

500,000

1.050

Mizuho Bank, Ltd. （Note5）

500,000－－

500,000

1.049

Mizuho Trust & Banking Co., Ltd.（Note5）

300,000－－

300,000

1.050

MUFG Bank, Ltd.（Note5）

500,000－－

500,000

0.670

September 29, 2023

Sumitomo Mitsui Trust Bank, Ltd.

1,500,000－－

1,500,000

0.918

September 30, 2026

MUFG Bank, Ltd.（Note5）

500,000－－

500,000

0.930

Mizuho Bank, Ltd. （Note5）

1,500,000－－

1,500,000

1.029

Sumitomo Mitsui Trust Bank, Ltd.

1,500,000－－

1,500,000

1.100

Sumitomo Mitsui Banking Corporation

500,000－－

500,000

1.035

October 3, 2027

MUFG Bank, Ltd.（Note5）

1,200,000－－

1,200,000

1.000

February 10, 2028

MUFG Bank, Ltd.

1,250,000－－

1,250,000－

August 31, 2022

800,000－

0.603

Mizuho Bank, Ltd.

800,000

Sumitomo Mitsui Banking Corporation

900,000－－

900,000

0.988

April 30, 2027

Sumitomo Mitsui Banking Corporation

2,600,000－－

2,600,000

0.985

April 30, 2027

Sumitomo Mitsui Banking Corporation

2,000,000－－

2,000,000

0.902

April 30, 2026

Mizuho Bank, Ltd.

1,000,000－－

1,000,000

1.090

April 30, 2028

The Bank of Fukuoka, Ltd.

1,000,000－－

1,000,000

0.907

May 31, 2026

Sumitomo Mitsui Banking Corporation

1,500,000－－

1,500,000

0.999

MUFG Bank, Ltd.（Note5）

500,000－－

500,000

0.900

Mizuho Bank, Ltd.

500,000－－

500,000

0.999

Mizuho Trust & Banking Co., Ltd.

500,000－－

500,000

0.999

Nippon Life Insurance Company

700,000－－

700,000

0.913

Sumitomo Mitsui Trust Bank, Ltd.

700,000－－

700,000

0.726

Resona Bank, Ltd.

500,000－－

500,000

0.676

Aozora Bank, Ltd.

500,000－－

500,000

0.726

Mizuho Bank, Ltd.

400,000－－

400,000

0.726

The Musashino Bank, Ltd.

400,000－－

400,000

0.676

Sumitomo Mitsui Banking Corporation

1,850,000－－

1,850,000

0.910

MUFG Bank, Ltd.

1,300,000－－

1,300,000

0.860

Resona Bank, Ltd.

650,000－－

650,000

0.460

August 31, 2024

Aozora Bank, Ltd.

890,000－－

890,000

0.585

August 31, 2026

Mizuho Bank, Ltd.

1,370,000－－

1,370,000

0.718

March 31, 2028

Sumitomo Mitsui Trust Bank, Ltd.

820,000－－

820,000

0.550

October 31, 2024

MUFG Bank, Ltd.

1,270,000－－

1,270,000

0.750

January 31, 2028

0.772

January 31, 2027

October 31, 2024

October 31, 2024

May 18, 2027

September 29, 2027
(Note 4)

Unsecured/
Unguaranteed

September 29, 2028

May 31, 2027

March 31, 2025

March 31, 2026

March 31, 2028

36

Long-Term Loans Payable

Mizuho Trust & Banking Co., Ltd.（Note5）

650,000－－

650,000

0.670

MUFG Bank, Ltd.（Note5）

1,500,000－－

1,500,000

0.520

Sumitomo Mitsui Banking Corporation

1,000,000－－

1,000,000

0.644Mizuho Bank, Ltd.

1,000,000－－

1,000,000

0.644Mizuho Trust & Banking Co., Ltd.（Note5）

500,000－－

500,000

0.550

Resona Bank, Ltd.

300,000－－

300,000

0.644

Development Bank of Japan Inc.（Note5）

500,000－－

500,000

0.830

October 31, 2029

The Gunma Bank, Ltd.

400,000－－

400,000

0.498

January 31, 2025

The Musashino Bank, Ltd. （Note5）

400,000－－

400,000

0.478

January 31, 2025

Sumitomo Mitsui Banking Corporation

700,000－－

700,000

0.758

September 30, 2028

0.725

January 31, 2029

Aozora Bank, Ltd.

－

450,000－

450,000

Sumitomo Mitsui Banking Corporation－

3,000,000－

3,000,000

MUFG Bank, Ltd.

－

700,000－

700,000

Sumitomo Mitsui Trust Bank, Ltd.

－

500,000－

500,000

Resona Bank, Ltd.

－

450,000－

450,000

Mizuho Bank, Ltd.

－

400,000－

400,000

Development Bank of Japan Inc.（Note5）－

1,500,000－

1,500,000

Sumitomo Mitsui Banking Corporation－

2,400,000－

2,400,000

MUFG Bank, Ltd.

－

1,600,000－

1,600,000

Sumitomo Mitsui Trust Bank, Ltd.

－

550,000－

550,000

Resona Bank, Ltd.

－

500,000－

500,000

Aozora Bank, Ltd.

－

500,000－

500,000

Mizuho Bank, Ltd.

－

350,000－

350,000

Mizuho Trust & Banking Co., Ltd.

－

300,000－

300,000

74,650,000

13,200,000－

87,850,000

104,800,000

15,950,000

15,950,000

104,800,000

Sub Total
Total

April 30, 2028

October 31, 2026

(Note 4)
0.809

January 31, 2030

0.888

January 31, 2031

0.535

February 28, 2026

Unsecured/
Unguaranteed

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.

37

(3) Status of Investment Corporation Bonds
Balance as of
Balance as ofIssuance date October 1, 2020 March 31, 2021
(million yen)(million yen)
1st Series Unsecured Investment October 31,
1,000
1,000
Corporation Bonds
2016
Bonds

Interest
rate(%)

Maturity date

0.200

October 29,
2021

2nd Series Unsecured Investment
Corporation Bonds

October 31,
2016

1,000

1,000

0.600

October 30,
2026

3rd Series Unsecured Investment
Corporation Bonds

August 31,
2017

1,000

1,000

0.320

August 31,
2022

4th Series Unsecured Investment
Corporation Bonds

August 31,
2017

2,000

2,000

0.700

August 31,
2027

5th Series Unsecured Investment
Corporation Bonds

April 26,
2018

2,000

2,000

0.700

April 26,
2028

6th Series Unsecured Investment
Corporation Bonds

April 30,
2020

1,000

1,000

0.400

April 30,
2025

8,000

8,000

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

Redemption
methodUse

Remarks(Note 1)

(Note 3)Full onmaturity(Note 2)

(Note 4)“Use” is acquisition funds for specified assets, repayment funds for borrowings, etc.
“Use” is repayment funds for borrowings.
Ranking pari passu among the specified investment corporation bonds
Ranking pari passu among the specified investment corporation bonds and small private placement with restrictions on splits of denominationof each bond(4) Status of Short-Term Investment Corporation Bonds
Not applicable(5) Status of Subscription Rights to New Investment Units
Not applicable38

Acquisition and Disposition(1) Acquisition and Disposition of Real Estate Properties & Asset-Backed Securities and Infrastructure &Infrastructure Related Assets
Acquisition
Ownership
form

Property
number

Property nameAcquisition date

Disposition

Acquisition price(million yen)
(Note 1)

Disposition
date

Disposition
priceBook value
Gain / loss
(million yen) (million yen) (million yen)
(Note 1)

Trust beneficiaryinterest in real estate

L-8

Sapporo Shiroishi
Distribution Center

December 24,
2020

800

－

Trust beneficiaryinterest in real estate

L-7

Chiba-Kita Distribution
CenterDecember 25,
2020

1,250

－

T-27

Monenosato Mall
(2 New Buildings)

March 29, 2021

343

－

－

T-4

Daikanyama Address
Dixsept (40% quasi coownership interest)

December 1,
2020

2,657

Trust beneficiaryinterest in real estate(Note 3)

Trust beneficiaryinterest in real estate

－

－

－

－

－

－

－

－

－

2,146
(Note 2)－454

Note 1: “Acquisition price” and “Disposition price” represent 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).
Note 2: The amount equivalent to 40% quasi co-ownership interest is shown.
Note 3: KRR acquired the New Buildings as real estate and additionally entrusted the buildings to the trustee related to Monenosato Mall, an existing KRR
property on the same date.

(2) Acquisition and Disposition of Other Assets
Other assets except real estate properties and asset-backed securities mentioned above mostly consist of cash and deposits
and cash and deposits in trust.
(3) Appraisal Values of Specific Assetsi) Real Estate
Acquisition/disposition

Ownership
form

Property
number

Property nameAcquisition/
Appraisal
disposition
Acquisition/
value
price
disposition date(million yen)(million yen)
(Note 2)

Appraiser

Evaluation date

(Note 1)

Acquisition

Trust beneficiaryinterest in realestateL-8

Sapporo Shiroishi
Distribution Center

December 24,
2020

800

1,020

Daiwa Real EstateAppraisal Co., Ltd.

December 1,
2020

Trust beneficiaryinterest in realestateL-7

Chiba-Kita
Distribution Center

December 25,
2020

1,250

1,340

Daiwa Real EstateAppraisal Co., Ltd.

December 1,
2020

Trust beneficiaryinterest in realestate(Note 5)

T-27

Monenosato Mall
(2 New Buildings)

March 29, 2021

343

(Note 3)

170

Japan Real Estate
InstituteMarch 1, 2021

Daikanyama
Address Dixsept
December 1,
2,448 Japan Real Estate
September 30,
2,657(Note 4)(40% quasi co2020
Institute
2020
ownership interest)
Note 1: “Acquisition price” represents the purchase amount (excluding acquisition costs and consumption taxes) of each property or beneficiary right ofreal estate in trust as stated in the Sales and Purchase Agreement.
Note 2: “Appraisal value” of specific assets above was calculated in accordance with the guideline of “Real Estate Appraisal Standards, Chapter 3, Appraisalof Securitized Real Estate.”
Note 3: The increase in the apraisal value of the property without the New Buildings (as of September 30, 2020) to the property including the New Buildings(as of March 1, 2021) is 440 million yen.
Note 4: The amount equivalent to 40% quasi co-ownership interest is shown.
Note 5: KRR acquired the New Buildings as real estate and additionally entrusted the buildings to the trustee related to Monenosato Mall, an existing KRR
property on the same date.
Disposition

Trust beneficiaryinterest in realestateT-4ii) Others(A) Investigator regarding values of certain assets

FRIQ Audit Corporation

39

(B) Result and method of investigation
With regard to transactions and contracts entered by KRR whose values shall be investigated based on the Act on
Investment Trusts and Investment Corporations, FRIQ Audit Corporation performed an investigation of transactions.
For the fiscal period from October 1, 2020 to March 31, 2021, the transactions subject to such investigation were one
interest rate swap transaction, for which KRR received reports fromFRIQ Audit Corporation. For this purpose,
investigation was performed with respect to details of the interest swap contracts, such as the name of counter parties,
contract amounts, or the period of transactions. This survey is not a part of the audit for finalcial statements, andthere is no guarantee of fairness of the price and internal management system.
(4) Related-Party Transactionsi) Transactions
Not applicableii) Amounts of Fees Paid
Total amount of fee paid (A)(in million)
Brokerage

74

Related-party transaction
Amount of fee paid (B)(in million)
Kenedix, Inc.
10
Payment destination

Ratio (B) / (A)
(%)
13.8

(5) Transactions with Asset Manager in Connection with Concurrent Business Conducted by the Asset Manager
There is no transaction with the Asset Manager, KFM, regarding to the Type II Financial Instruments Business, andBuilding Lots and Buildings Transaction Business. Furthermore, KFM does not concurrently engage in any of Type I
Financial Instruments Business, Real Estate Specified Joint Business.

40

Accounting(1) Status on Assets, Liabilities, Principals, and Income and Losses
Please refer to the “Balance Sheets”, “Statements of Income and Retained Earnings”, “Statements of Changes in Net
Assets” and “Notes to Financial Statements” presented later in this report.
(2) Change in Calculation of Depreciation
Not applicable(3) Change in Valuation of Real Estate Properties and Infrastructure Assets
Not applicable(4) Disclosure of Beneficiary Certificates of Investment Trust Established by Selfi) Acquisition of Beneficiary Certificates of Investment Trust Established by Self
Not applicableii) Ownership of Beneficiary Certificates of Investment Trust Established by Self
Not applicable(5) Disclosure of Companies Owning Real Estate Overseas
Not applicable(6) Disclosure of Real Estate Owned by Companies Owning Real Estate Overseas
Not applicable

Others(1) Noticei) General Meeting of Unitholders
Not applicableii) Board of Directors
Not applicable(2) Others
In this report, any fraction is rounded down for monetary amounts and rounded off for ratios unless otherwise stated.

41

42

43

Financial Statements(12th Fiscal Period: from October 1, 2020 to March 31, 2021)
Independent Auditor’s Report
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements

44

Kenedix Retail REIT Corporation

Balance Sheet
As of March 31, 2021
As of March 31, 2021

As of September 30, 2020

(in thousands of yen)
AssetsCurrent assets
Cash and deposits (Notes 9 and 11)¥9,187,157¥9,152,961

Cash and deposits in trust (Notes 9 and 11)

13,251,126

12,874,534

Operating accounts receivable

146,876

192,124

Prepaid expenses

29,604

163,279

Other

2,235

1,907

22,617,000

22,384,807

Total current assets
Non-current assets
Property, plant and equipment (Notes 17 and 20)
Buildings

746,570

745,164

Accumulated depreciation(61,444)(45,386)

Buildings, net

685,125

699,778

Structures
Accumulated depreciation
Structures, net

46,77738,751(4,023)(2,955)42,75335,795Land

2,956,465

2,951,386

Buildings in trust

62,521,244

61,177,360

Accumulated depreciation(8,450,403)(7,556,164)

Buildings in trust, net (Note 3)

54,070,840

53,621,196

3,491,216

3,439,796

Structures in trust
Accumulated depreciation(600,741)(539,341)

Structures in trust, net (Note 3)

2,890,475

2,900,455

Machinery and equipment in trust

261,479

262,338

Accumulated depreciation(53,675)(46,502)

Machinery and equipment in trust, net

207,804

215,835

Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust (Note 3)

150,938(63,530)(52,512)103,267

98,425

162,816,625

163,431,237

Construction in progress in trust
Total property, plant and equipment, net

166,797

6,177-

223,779,535

223,954,110

4,300,847

4,304,826

Intangible assets (Note 20)
Leasehold right in trust (Note 17)
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits

8,223

9,507

4,309,070

4,314,334

10,00010,000

Lease and guarantee deposits in trust

60,23660,236Long-term prepaid expenses

824,049

743,581Long-term deposits

108,478

117,010

7,668

2,258

Other
Total investments and other assets
Total non-current assets

1,010,431

933,086

229,099,037

229,201,531

Deferred assets
Investment corporation bond issuance costs

34,191

38,532

Investment unit issuance costs

23,17930,906

Total deferred assets

57,371

69,438¥251,773,409¥251,655,777

Total assets

See accompanying notes to financial statements.

45

As of March 31, 2021

As of September 30, 2020

(in thousands of yen)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Notes 11 and 21)¥759,610¥983,154-

2,750,000

Current portion of Investment corporation bonds (Notes 11 and 22)

1,000,000-

Current portion of long-term loans payable (Notes 11 and 21)

16,950,000

20,400,000

Accounts payable-other544,740

474,759

Accrued expenses

44,15333,791873

1,104

77,715363,159

1,320,786

1,275,682

Deposits received

16,61026,041

Other

150,000

291

20,864,489

26,307,983

Income taxes payable
Accrued consumption taxes
Advances received

Total current liabilities
Non-current liabilities
Investment corporation bonds (Notes 11 and 22)

7,000,000

8,000,000

Long-term loans payable (Notes 11 and 21)

87,850,000

81,650,000

148,083

148,083

10,900,443

10,833,263

Tenant leasehold and security deposits (Note 11)
Tenant leasehold and security deposits in trust (Notes 3 and 11)
Asset retirement obligations (Note 15)

24,534

24,381

Other283,966

383,202106,207,028

101,038,930

127,071,517

127,346,914

121,183,494

121,183,494

Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Allowance for temporary difference adjustments (Note 5)(384,773)(236,788)

Total deduction from unitholders' capital(384,773)(236,788)

120,798,721

120,946,706

4,153,672

3,716,853

Unitholders' capital, net
Surplus
Unappropriated retained earnings

4,153,672

3,716,853

124,952,393

124,663,559

Deferred gains or losses on hedges (Notes 11 and 12)(250,501)(354,696)

Total valuation and translation adjustments(250,501)(354,696)

Total surplus
Total unitholders' equity
Valuation and translation adjustments

Total net assets (Note 6)

124,701,892

124,308,863

Total liabilities and net assets¥251,773,409¥251,655,777

See accompanying notes to financial statements.

46

Kenedix Retail REIT Corporation

Statement of Income and Retained Earnings
For the period from October 1, 2020 to March 31, 2021
From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020

(in thousands of yen)
Operating revenues
Rent revenue-real estate （Note 7)¥7,336,375¥7,276,824

927,293995,638

Other lease business revenue (Note 7)454,244

126,174

8,717,914

8,398,638

3,377,837

3,479,410

Asset management fees

808,051

706,110

Asset custody fees

10,178

10,098Administrative service fees

32,90332,656

Directors' compensation

4,500

4,500

Gain on sales of real estate property (Note 7)
Total operating revenues
Operating expenses
Expenses related to rent business (Note 7)

Other operating expenses

105,424

83,784

Total operating expenses

4,338,895

4,316,561

4,379,018

4,082,076

Operating income
Non-operating income
Interest income

58

55

Gain on forfeiture of unclaimed dividends

425

310

Interest on refund

-

2,912

Other

29

10

Total non-operating income

513

3,288

Interest expenses

449,947

450,956

Interest expenses on investment corporation bonds

21,65921,199Financing-related expenses

96,32595,298

Amortization of investment corporation bond issuance costs

4,340

4,340

Amortization of investment unit issuance costs

7,726

7,726

Non-operating expenses

579,999579,521

Ordinary income

3,799,531

3,505,844

Income before income taxes

3,799,531

3,505,844

882

1,112

Total non-operating expenses

Income taxes
Current

882

1,112

3,798,649

3,504,731

Total income taxes
Net income
Retained earnings brought forward

355,023

212,121

Unappropriated retained earnings¥4,153,672¥3,716,853

See accompanying notes to financial statements.

47

Kenedix Retail REIT Corporation

Statement of Changes in Net Assets
For the period from October 1, 2020 to March 31, 2021
Unitholders' equity
Unitholders' capital

Surplus

Deduction from unitholders'
capitalBalance as of March 31, 2020 (Note 8)

Unitholders'
capitalAllowance
for temporary
difference
adjustments¥121,183,494¥ (305,743)

Total
Unitholders'
deduction
capital, net
fromunitholders'
capital(in thousands of yen)
¥ (305,743)¥120,877,750

Unappropri
ated
retainedearnings

Total
surplusTotal
unitholders'equity¥3,784,993¥3,784,993¥124,662,744(3,498,554)(3,498,554)(3,498,554)

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings
from allowance for temporary
difference adjustments
Reversal of allowance fortemporary difference
adjustments(5,361)(5,361)(5,361)

74,31774,31774,317

Net income(5,361)(74,317)(74,317)-3,504,731

3,504,731

3,504,731

Net changes of items other thanunitholders’ equity
Total changes of items during the period-

68,955

68,955

68,955(68,140)(68,140)

815

Balance as of September 30, 2020 (Note8)¥121,183,494¥ (236,788)¥(236,788)¥120,946,706¥3,716,853¥3,716,853¥124,663,559(3,361,829)(3,361,829)(3,361,829)

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings
from allowance for temporary
difference adjustments(147,984)(147,984)(147,984)

Net income(147,984)
3,798,649

3,798,649

3,798,649

Net changes of items other thanunitholders’ equity
Total changes of items during the period-(147,984)(147,984)(147,984)

436,819436,819

288,834

Balance as of March 31, 2021 (Note 8)¥121,183,494¥ (384,773)¥(384,773)¥120,798,721¥4,153,672¥4,153,672¥124,952,393

48

Valuation and translation adjustments
Deferred gains orlosses on hedges
Balance as of March 31, 2020 (Note 8)¥(211,889)¥(211,889)

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings fromallowance for temporary difference
adjustments
Reversal of allowance fortemporary difference
adjustments
Net income
Net changes of items other thanunitholders’ equity

Total net assets

Total valuation andtranslation adjustments(in thousands of yen)
¥124,450,854(3,498,554)(5,361)

3,504,731

Total changes of items during the period(142,806)(142,806)(142,806)(142,806)(142,806)(141,991)

Balance as of September 30, 2020 (Note 8)¥(354,696)¥(354,696)¥124,308,863

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings fromallowance for temporary difference
adjustments(3,361,829)

Net income
Net changes of items other thanunitholders’ equity

3,798,649
104,194

104,194

104,194

Total changes of items during the period

104,194

104,194

393,028

Balance as of March 31, 2021 (Note 8)¥(250,501)¥(250,501)¥124,701,892(147,984)

See accompanying notes to financial statements.

49

Kenedix Retail REIT Corporation

Statement of Cash Flows
For the period from October 1, 2020 to March 31, 2021
From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020

(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes¥3,799,531¥3,505,844

Depreciation and amortization

1,069,574

1,041,266

Amortization of investment corporation bond issuance costs

4,340

4,340

Amortization of investment unit issuance costs

7,726

7,726

Interest income

(58)

(55)

Interest expenses

471,606

472,156

Decrease (increase) in operating accounts receivable

45,247(25,162)-

863,462

133,675(130,377)

Increase (decrease) in operating accounts payable

16,504

104,472

Increase (decrease) in accounts payable-other(11,382)

10,077

Increase (decrease) in accrued consumption taxes

Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses(285,444)

242,484

Increase (decrease) in advances received

45,103

9,330

Increase (decrease) in deposits received(9,430)5,414

Decrease (increase) in long-term prepaid expenses(80,467)

86,443

Decrease (increase) in long-term deposits
Decrease in net property, plant and equipment held in trust due to sale

8,532

100

2,146,120

1,390,848

Other148,564(3,503)

Subtotal

7,509,745

7,584,869

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

58

55(461,205)(470,942)(1,112)(965)

7,047,485

7,113,017(6,484)(9,767)(3,187,223)(2,474,133)

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

-

(836)

Repayments of tenant leasehold and security deposits in trust(236,364)(171,871)

Proceeds from tenant leasehold and security deposits in trust

303,544

129,316

Purchase of intangible assets

Proceeds from restricted bank deposits in trust
Net cash provided by (used in) investing activities

15,00017,500(3,111,527)(2,509,792)

Net cash provided by (used in) financing activities
Repayments of short-term loans payable(2,750,000)(700,000)

Proceeds from long-term loans payable

15,950,000

2,600,000

Repayments of long-term loans payable(13,200,000)(1,000,000)-

993,742

Proceeds from issuance of investment corporation bonds
Dividends paid

(3,510,170)(3,502,111)

Net cash provided by (used in) financing activities(3,510,170)(1,608,369)

Net increase (decrease) in cash and cash equivalents

425,7872,994,855

Cash and cash equivalents at the beginning of the period

21,804,996

18,810,140

Cash and cash equivalents at the end of the period (Note 9)¥22,230,783¥21,804,996

See accompanying notes to financial statements.

50

Kenedix Retail REIT Corporation

Notes to Financial Statements
For the period from October 1, 2020 to March 31, 2021

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Retail REIT Corporation (“KRR”) was established on October 3, 2014, under the Act on Investment Trusts and Investment Corporations of Japan(the “Investment Trust Act”). On February 10, 2015, 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). Subsequently, KRR raised funds through public offerings, including international offerings. As aresult, the number of investment units issued as of March 31, 2021 was 536,177 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 havestable demand from retailers and customers, and also seeks to invest in distribution centers, which supplement shopping centers in providing goods toconsumers, in order to provide stable investment returns over the long term. Sponsored by Kenedix, Inc., KRR entrusts its asset management and investment
operations to Kenedix Real Estate Fund Management, Inc. (“KFM”), with the following strategies.
(Note) For management purposes and ease of classification, KRR defines neighborhood, community and other shopping centers for daily needs asretail properties that generally have the following characteristics:
a. Retail trade area of an approximate radius of one to ten kilometers (and generally, a radius of three to five kilometers), 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 services
KRR acquired one property (Comfort Market Nishi-Magome with acquisition price of 1,920 million yen). KRR disposed of one property (K’s Denki ShinMoriyama (Land) with sale price of 1,527 million yen (acquisition price was 1,370 million yen)). KRR also completed additional acquisition with construction
cost of 119 million yen) at Yokohama Kamigo Distribution Center. For the period ended September 30, 2020, the portfolio of 62 properties (total acquisition
price of 226,479 million yen) as a whole performed well with an overall occupancy ratio of 99.7% as of September 30, 2020.
KRR acquired three assets (Chiba-Kita Distribution Center with acquisition price of 1,250 million yen, Sapporo Shiroishi Distribution Center withacquisition price of 800 million yen and Monenosato Mall (two new buildings) with acquisition price of 343 million yen). KRR disposed of one asset(Daikanyama Address Dixsept (40% trust beneficiary quasi co-ownership interests) with sale price of 2,657 million yen (acquisition price was 2,156 millionyen)). KRR also completed additional acquisition through construction of a new building (property expansion) (total construction cost 9 million yen) at
Yokohama Kamigo Distribution Center. For the period ended March 31, 2021, the portfolio of 64 properties (total acquisition price of 226,725 million yen) as
a whole performed well with an overall occupancy ratio of 99.8% as of March 31, 2021.
Furthermore, the portfolio was diversified in terms of tenants as there were 496 and 502 end-tenants as of September 30, 2020 and March 31, 2021 in
KRR’s properties, respectively.
Basis of Presentation
KRR maintains its accounting records and prepares its financial statements in accordance with accounting principles generally accepted in Japan (JapaneseGAAP), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial Instruments and Exchange Act of Japan andrelated regulations, which are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are basically a translation of the financial statements of KRR, which were prepared in accordance with Japanese
GAAP and were presented in the Semiannual Securities Report of KRR filed with the Kanto Local Finance Bureau. In preparing the accompanying financial
statements, certain reclassifications and modifications have been made to the financial statements issued domestically in order to present them in a format
that is more familiar to readers outside Japan. In addition, the notes to financial statements include certain information that might not be required underJapanese GAAP but is presented herein as additional information.
KRR’s fiscal period is a six-month period which ends at the end of March or September. KRR does not prepare consolidated financial statements because
it has no subsidiaries.

51

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

Buildings

From October 1, 2020
to March 31, 2021
2-70 years

From April 1, 2020
to September 30, 2020
2-70 years

Structures

8-59 years

8-59 years

Machinery and equipment

2-25 years

2-25 years

Tools, furniture and fixtures

3-15 years

3-15 years(B) Intangible Assets (including trust assets)
Intangible assets are amortized by the straight-line method.
(C) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(D) Investment Unit Issuance Costs
Investment unit issuance costs are amortized over a period of 3 years under the straight-line method.
(E) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(F) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all relevant assets andliabilities in trust are recorded on the balance sheets and the statements of income and retained earnings.
(G) Revenue Recognition
Operating revenues consist of rental revenues including base rents, common area charges and other operating revenues, which include utility charge
reimbursements, parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrual basis overthe life of each lease. Utility charge reimbursements are recognized when earned and their amounts can be reasonably estimated. Reimbursementsfrom tenants including utility charge reimbursements are recorded on a gross basis and such amounts are recorded both as revenues and expenses
during the fiscal period.
(H) Taxes on Property and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar year basis.
These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to said period. Under Japanese tax
regulations, the seller of the property is liable for these taxes on the property from the date of disposal to the end of the calendar year in which theproperty is disposed. The seller, however, is generally reimbursed by the purchaser for these accrued property-related tax liabilities.
When KRR purchases properties, it typically allocates the portion of the property-related taxes related to the period following the purchase date of each
property through the end of the calendar year. The amounts of those allocated portions of the property-related taxes are capitalized as part of theacquisition costs of the related properties. Capitalized property-related taxes amounted to ¥2,495 thousand and ¥198 thousand as of September 30,
2020 and March 31, 2021, respectively.

52

(I)

Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets and liabilities
using the statutory tax rates.

(J) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes applicable tothe acquisition of assets are included in the cost of acquisition for each asset.
(K) Derivative Financial Instruments
KRR utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure to changes in interest rates.
KRR deferred recognition of gains or losses resulting from changes in fair value of interest-rate swap contracts because these contracts met the criteria
for deferral hedge accounting. However, KRR adopted the special treatment for interest-swap contracts if they met the criteria for hedge accounting
under this treatment. An assessment of the effectiveness of hedging is omitted for interest rate swaps because they fulfill the requirements for the special
treatment.
(L) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily convertible
to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.
(M) Presentation of Amounts
Amounts have been truncated in the Japanese financial statements prepared in accordance with Japanese GAAP and filed with regulatory authorities
in Japan. Unless otherwise noted, amounts are rounded down and ratios are rounded off in the accompanying financial statements. Totals shown in theaccompanying financial statements do not necessarily agree with the sums of the individual amounts.
(Accounting standards issued but not yet effective)・ “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29 issued on March 31, 2020)
・ “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on March 26, 2021)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in the United States have jointly developed
comprehensive accounting standards for revenue recognition and issued “Revenue from Contracts with Customers” (IFRS 15 (IASB) and Topic 606 (FASB))
in May 2014. Given the situation where IFRS 15 will be applied from fiscal years beginning on or after January 1, 2018 and that Topic 606 will be applied fromfiscal years beginning after December 15, 2017, the ASBJ has developed comprehensive accounting standards for revenue recognition and issued them
together with the implementation guidance.
The basic policy of the ASBJ when it developed the accounting standards for revenue recognition was to specify the accounting standards, incorporating
the basic principles of IFRS 15 as a starting point, from the perspective of comparability between financial statements, which is one of the benefits ofmaintaining compatibility with IFRS 15. The basic policy also stipulates that if there is an item to which consideration should be given, such as practices thathave been conducted thus far in Japan, alternative treatments will be added to the extent to which comparability is not impaired.
(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending September 30, 2021.
(3) Impact of applying the accounting standards
The impact of applying “Accounting Standard for Revenue Recognition” and its guidance on KRR’s financial statements is currently under evaluation.

・ “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019)
・ “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on July 4, 2019)
・ “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 31, 2020)(1) Overview
The IASB and the FASB have established detailed guidance regarding fair value measurement (IFRS 13 “Fair Value Measurement” (IASB) and Topic 820

53

“Fair Value Measurement” (FASB)). The ASBJ repeatedly considered the guidance regarding fair value of financial instruments and disclosure in order toimprove the comparability with such international accounting standards, and issued “Accounting Standard for Fair Value Measurement” and “Implementation
Guidance on Accounting Standard for Fair Value Measurement.”(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending September 30, 2021.
(3) Impact of applying the accounting standards
The impact of applying the “Accounting Standard for Fair Value Measurement” and its guidance on KRR’s financial statements is currently under evaluation.

3. COLLATERAL
Assets pledged as collateral and related secured liabilities are as follows:
Assets pledged as collateral

As of March 31, 2021

As of September 30, 2020
(in thousands of yen)

Buildings in trust¥650,807

Structures in trust

21,582

22,786

2,709,001

2,709,001¥3,381,391¥3,390,602

Land in trust
Total
Secured liabilities

As of March 31, 2021

Tenant leasehold and security deposits in trust
Total¥658,814

As of September 30, 2020
¥414,070¥436,067¥414,070¥436,06754

4. COMMITMENT LINE CONTRACTSKRR has commitment line contracts with the following financial institutions.
As of March 31, 2021

As of September 30, 2020
(in thousands of yen)

Total amount of commitment line contracts¥3,000,000¥3,000,000

Balance of loans payable outstanding--

Remaining amount¥3,000,000¥3,000,000

5. ALLOWANCE FOR TEMPORARY DIFFERENCE ADJUSTMENTS
The following summarizes allowance for temporary difference adjustments as of March 31, 2021
1. Reasons, related assets, initial amount, allowance and reversal
Related assets, etc.

Reason for allowance

Buildings in trust,
Leasehold right in trust
Deferred gains or losses
on hedges

Amortization ofleasehold right in trust
and the amount inexcess of depreciation
Loss on interest-rate
swaps recognized at theend of the fiscal period

Total

Initial amount

Balance atAllowance
Reversal
the beginningduring theduring theof the period
periodperiod(in thousands of yen)

¥30,115¥24,937¥5,178354,657

211,851

142,806¥384,773¥236,788¥147,984¥¥

Balance atthe end of
the period

Reason forreversal-¥30,115--354,657--¥384,773-

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 the hedging instruments, the corresponding amount is scheduled to bereversed.

The following summarizes allowance for temporary difference adjustments as of September 30, 2020
1. Reasons, related assets, initial amount, allowance and reversal
Related assets, etc.

Reason for allowance

Initial amount

Buildings in trust,
Leasehold right in trust

Amortization ofleasehold right in trust
and the amount inexcess of depreciation¥24,937

Deferred gains or losses
on hedges

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

Total

Balance atAllowance
Reversal
the beginningduring theduring theof the period
periodperiod(in thousands of yen)
¥19,575¥5,361¥

Balance atthe end of
the period-

Reason forreversal¥24,937-

286,168

286,168-(74,317)

211,851

Changes infair value ofderivativetransactions¥311,105¥305,743¥5,361¥ (74,317)¥236,788-

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 the hedging instruments, the corresponding amount is scheduled to bereversed.

6. NET ASSETSKRR issues only non-par value units in accordance with the Investment Trust Act. The entire amount of the issue price of new units is designated as statedcapital. KRR is required to maintain net assets of at least ¥50 million as required by the Investment Trust Act.

7. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY
55

Rental and other operating revenues and property-related expenses for the periods from October 1, 2020 to March 31, 2021 and April 1, 2020 to September
30, 2020 from consist of the following:
From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020
(in thousands of yen)

Rental and other operating revenues:
Rent revenue-real estate:
Rental revenues
Rental revenues from limited proprietary rights of landCommon area charges¥6,092,542¥5,990,907

990,413

1,024,012

253,420

261,904

7,336,375

7,276,824

Parking space rental revenues

192,921

197,975

Utility charge reimbursement476,555

576,777

Miscellaneous

257,816

220,885

Subtotal

927,293995,638

8,263,669

8,272,463

Property management fees and facility management fees

679,143685,656

Utilities

408,770

517,438

Taxes

735,593739,968

Repairs and maintenance

185,140

239,310

Insurance

14,27913,375

Trust fees

25,811

24,883

Depreciation

1,068,289

1,040,001

Others260,808

218,776

Total property-related expenses

3,377,837

3,479,410

Net operating income from real estate rental business¥4,885,831¥4,793,053

Subtotal
Other lease business revenue:

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

Gain on sales of real estate property:
From October 1, 2020 to March 31, 2021
(in thousands of yen)
Daikanyama Address Dixsept (40.0% quasi coownership interest)
Revenue from sales of real estate property¥2,657,600

Cost of real estate property

2,146,120

Other sales expenses
Gain on sales of real estate property

57,234¥454,244

From April 1, 2020 to September 30, 2020
(in thousands of yen)
K’s Denki Shin-Moriyama (Land)
Revenue from sales of real estate property¥1,527,900

Cost of real estate property

1,390,848

Other sales expenses
Gain on sales of real estate property

10,876¥126,174

8. UNITHOLDERS’ EQUITY
Total number of authorized investment units and total number of investment units issued and outstanding are as follows:56

From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020

Total number of authorized investment units

5,000,000 units

5,000,000 units

Total number of investment units issued and outstanding

536,177 units

536,177 units

9. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of March 31, 2021 and September 30, 2020:
As of March 31, 2021

As of September 30, 2020

(in thousands of yen)
Cash and deposits¥9,187,157¥9,152,961

Cash and deposits in trust

13,251,126

12,874,534

Restricted bank deposits in trust *Cash and cash equivalents(207,500)(222,500)¥22,230,783¥21,804,996*Restricted bank deposits in trust are retained for repayment of tenant leasehold and security deposits in trust.

10. LEASES(As lessee)
Future minimum lease payments under non-cancelable operating leases as of March 31, 2021 and September 30, 2020 are as follows:
As of March 31, 2021

As of September 30, 2020

(in thousands of yen)
Due within 1 year

¥10,500¥10,500

Due after 1 year

157,048

162,298

Total¥167,548¥172,798(As lessor)
Future minimum lease income under the non-cancelable operating leases as of March 31, 2021 and September 30, 2020 are as follows:
As of March 31, 2021

As of September 30, 2020

(in thousands of yen)
Due within 1 year

¥9,922,641¥9,738,412

Due after 1 year

59,207,166

56,344,730

Total¥69,129,807¥66,083,14257

11. FINANCIAL INSTRUMENTS(A). 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 ofinvestment 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 funds with flexible short-term funds. Management of surplus funds is undertaken through various bank deposits
focusing on safety, liquidity and effectiveness. KRR uses derivatives for the purpose of hedging its exposure to changes in interest rates and other risks anddoes 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.
Loans payable and investment corporation bonds, which are made or issued primarily for the purpose of procuring funds for the acquisition of real estate andtrust beneficiary interests in real estate and have a repayment date of a maximum of 9 years and 10 months for loans payable and also have a redemption
date of a maximum of 7 years and 1 month for investment corporation bonds as of March 31, 2021, the end of the 12th 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 a certain 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 instruments
a. Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored by deposits
in non-interest bearing ordinary savings accounts or with financial institutions with credit ratings above a certain level. 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. A risk management policy is established with regard to the execution and management of derivatives and such transactions are conductedbased 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 toreturn necessary amounts to tenants.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value is reasonably
estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in a different fairvalue.
(B). Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheets and estimated fair value are shown in the following table. Items whose fair values are difficult
to determine are not included in the following table (*2).

58As of March 31, 2021
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1) Cash and deposits¥9,187,157¥9,187,157(2) Cash and deposits in trust

13,251,126

13,251,126-

22,438,283

22,438,283

-

-

-

(1,400)Total(1) Short-term loans payable¥-(2) Current portion of investment corporation bonds

1,000,000

998,600(3) Current portion of long-term loans payable

16,950,000

16,974,527

24,527(4) Investment corporation bonds

7,000,000

6,969,900(30,100)(5) Long-term loans payable

87,850,000

88,207,532

357,532

740,605

718,353(22,251)

113,540,605

113,868,913

328,308¥(250,501)¥(250,501)(6) Tenant leasehold and security deposits in trust
Total
Derivative transactions¥-(Note) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing the net liability
position.
As of September 30, 2020
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1) Cash and deposits¥9,152,961¥9,152,961(2) Cash and deposits in trust

12,874,534

12,874,534-

22,027,496

22,027,496

-

Total

¥

-

(1) Short-term loans payable

2,750,000

2,750,000-(2) Current portion of long-term loans payable

20,400,000

20,393,446(6,553)(3) Investment corporation bonds

8,000,000

7,979,400(20,600)(4) Long-term loans payable

81,650,000

82,206,637

556,637

795,154772,848(22,305)

113,595,154

114,102,333

507,178¥(354,696)¥(354,696)(5) Tenant leasehold and security deposits in trust
Total
Derivative transactions¥-(Note) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing the net liability
position.
*1: 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 investment corporation bonds and (4) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices.
(3) Current portion of long-term loans payable and (5) 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 andinterest discounted by the estimated 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 believed59

to approximate the carrying amount as the credit standing of KRR has not changed significantly since the loans were made. (However, the fair value of longterm 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 fortogether with the applicable interest-rate swaps, discounted by the estimated interest rate to be applied in the event that KRR conducts new loans payable ofthe same type.)(6) Tenant leasehold and security deposits in trust
The fair value is determined based on the present value of contractual cash flows discounted at the discount rate into which the period to the repayment date
and the credit risk are reflected.
Derivative transactions
Please refer to Note “12. DERIVATIVE TRANSACTIONS”.
*2: Financial instruments whose fair values are extremely difficult to determineClassification

As of March 31, 2021

As of September 30, 2020

(in thousands of yen)
Tenant leasehold and security deposits (Note)¥148,083¥148,083

Tenant leasehold and security deposits in trust (Note)

10,159,838

10,038,109

Total¥10,307,921¥10,186,192(Note) It is extremely difficult to determine their fair values based on estimated future cash flows because no quoted market price is available and therepayment dates of those deposits are not certain. Therefore, these items have been excluded from fair value presentation.
*3: Redemption of monetary claims scheduled to be due after the balance sheet date
As of March 31, 2021
Due in 1 year orDue after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

lessthrough 2 years

through 3 years

through 4 years

through 5 years

Due after 5 years(in thousands of yen)
Cash and deposits
Cash and deposits in trust
Total¥9,187,157¥

13,251,126¥22,438,283

-

¥

¥

-

-

¥

¥

-

¥

-

-

¥

-

-

¥

¥

-

-

¥

-

As of September 30, 2020
Due in 1 year orDue after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

lessthrough 2 years

through 3 years

through 4 years

through 5 years

Due after 5 years(in thousands of yen)
Cash and deposits¥9,152,961

Cash and deposits in trust

12,874,534

Total¥22,027,496

¥

-

¥

¥

-

-

¥

¥

-

-

¥

¥

-

-

¥

¥

-

-

¥

-

60

*4: Redemption of long-term loans payable and other interest-bearing debt scheduled to be due after the balance sheet date
As of March 31, 2021
Due in 1 year orDue after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

lessthrough 2 years

through 3 years

through 4 years

through 5 years

Due after 5 years(in thousands of yen)
Short-term loans payable

¥

-

¥

Investment corporation bonds

1,000,000

1,000,000--

1,000,000

5,000,000

Long-term loans payable

16,950,000

9,050,000

7,500,000

8,810,000

16,090,000

46,400,000

13,995

13,995

13,995

13,995

13,99561,811¥17,963,995¥10,063,995¥7,513,995¥8,823,995¥17,103,995¥51,461,811

Due in 1 year orDue after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

lessthrough 2 years

through 3 years

through 4 years

through 5 years

Tenant leasehold and security
deposits in trust
Total

-

¥

-

¥

-

¥

-

¥

-

As of September 30, 2020
Due after 5 years(in thousands of yen)
Short-term loans payable¥2,750,000

-

¥

-

2,000,000--

1,000,000

5,000,000

20,400,000

9,050,000

7,500,000

8,990,000

13,320,000

42,790,000

13,995

13,995

13,995

13,995

13,99568,808¥23,163,995¥11,063,995¥7,513,995¥9,003,995¥14,333,995¥47,858,808

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

¥

-

¥

-

¥

-

¥

-

12. DERIVATIVE TRANSACTIONS
The contract amount and the fair value of interest-rate swap transactions as of March 31, 2021 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable(2) Transactions subject to hedge accounting
Hedge
accounting
methodType of derivativetransactions

Principle method Interest rate swap
transaction:
Receive/floating andpay/fixed
SpecialInterest rate swap
treatment oftransaction:interest-rate
Receive/floating andswaps
pay/fixed
Total

Hedged items
Long-term loans
payableLong-term loans
payableContract amount(in thousands of yen)
Maturing after 1
year¥51,110,000¥47,010,000

26,400,000

21,000,000¥77,510,000¥68,010,000

Fair value(in thousands of yen)¥(250,501)

Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions*¥(250,501)*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value isincluded in the fair value of the hedged long-term loans payable.（Please refer to Note “11. FINANCIAL INSTRUMENTS” (*1) Methods to determine theestimated fair value of financial instruments and matters related to derivative transactions; Liabilities (3) Current portion of long-term loans payable and (5)Long-term loans payable.）
The contract amount and the fair value of interest-rate swap transactions as of September 30, 2020 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable61

(2) Transactions subject to hedge accounting
Hedge
accounting
methodType of derivativetransactions

Principle method Interest rate swap
transaction:
Receive/floating andpay/fixed
SpecialInterest rate swap
treatment oftransaction:interest-rate
Receive/floating andswaps
pay/fixed
Total

Hedged items
Long-term loans
payableLong-term loans
payableContract amount(in thousands of yen)
Maturing after 1
year¥39,410,000¥35,310,000

31,900,000

26,400,000¥71,310,000¥61,710,000

Fair value(in thousands of yen)¥(354,696)

Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions*¥(354,696)*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value isincluded in the fair value of the hedged long-term loans payable. (Please refer to Note “11. FINANCIAL INSTRUMENTS” (*1) Methods to determine theestimated fair value of financial instruments and matters related to derivative transactions; Liabilities (2) Current portion of long-term loans payable and (4)Long-term loans payable.）

13. RELATED PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other12th Fiscal Period (October 1, 2020 to March 31, 2021) and 11th Fiscal Period (April 1, 2020 to September 30, 2020): Not applicable
2．Affiliated companies and other12th Fiscal Period (October 1, 2020 to March 31, 2021) and 11th Fiscal Period (April 1, 2020 to September 30, 2020): Not applicable
3．Fellow subsidiary companies and other12th Fiscal Period (October 1, 2020 to March 31, 2021) and 11th Fiscal Period (April 1, 2020 to September 30, 2020): Not applicable
4．Directors, major individual unitholders and other12th Fiscal Period (October 1, 2020 to March 31, 2021) and 11th Fiscal Period (April 1, 2020 to September 30, 2020): Not applicable

14. INCOME TAXESKRR is subject to corporate income taxes at a regular statutory rate of approximately 31%. However, KRR may deduct from its taxable income amounts
distributed to its unitholders, provided the requirements under the Special Taxation Measures Law of Japan are met, including a requirement that it currently
distributes in excess of 90% of its net income for the fiscal period in order to be able to deduct such amounts. If KRR does not satisfy all of the requirements,
the entire taxable income of KRR will be subject to regular corporate income taxes. Since KRR distributed in excess of 90% of its distributable income in theform of cash distributions totaling ¥3,804 million and ¥3,509 million for the periods ended March 31, 2021 and September 30, 2020, respectively, thedistributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on KRR’s income were 0.02% and 0.03%
for the periods ended March 31, 2021 and September 30, 2020, respectively. The following table summarizes the significant differences between the statutory
tax rate and the effective tax rate:
As of March 31, 2021

As of September 30, 2020

Statutory tax rate

31.46%

31.46%

Deductible cash distributions(31.50)(31.50)

Others0.06

0.07

Effective tax rate

0.02%

0.03%

62

The significant components of deferred tax assets and liabilities:
As of March 31, 2021

As of September 30, 2020

(in thousands of yen)
Deferred tax assets:
Enterprise tax payable¥

Amortization of leasehold right in trust

15,437

14,185

Depreciation

5,556

5,106

Asset retirement obligations

7,718

7,670

Deferred gains or losses on hedges

13

¥

24

78,807

111,587

Subtotal deferred tax assets

107,533

138,573

Valuation allowance(107,533)(138,573)

Total deferred tax assets

¥

-

¥

-

63

15. 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 in connection 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 2 months basedon the time period from the date of acquisition to the expiration of the agreement.
3. Changes in the amount of applicable asset retirement obligations consisted of the following:
From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020

(in thousands of yen)
Balance at the beginning of the period
Accretion adjustment
Balance at the end of the period¥24,381¥24,229

153

152¥24,534¥24,381

16. SEGMENT INFORMATION
Segment information for the periods from October 1, 2020 to March 31, 2021 and April 1, 2020 to September 30, 2020 is as follows:(A) Segment information
Disclosure is omitted because the real estate leasing business is KRR’s sole business and it has no reportable segment information to disclose.
(B) Related information(1) Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on thestatements of income and retained earnings.
(2) Information about each geographic area(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statements of income andretained earnings.
(b) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant andequipment 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.

6417. INVESTMENT AND RENTAL PROPERTIESKRR owns retail properties and logistics facility 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.
From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020
(in thousands of yen)Book value
Balance at the beginning of the period¥228,266,280

Changes during the period
Balance at the end of the period
Fair value at the end of the period¥228,027,561(179,533)

238,719

228,086,747

228,266,280¥244,270,400¥243,356,000

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 fiscal period ended March 31, 2021, the principal increase
was the acquisition of real estate trust beneficiary interest in 2 properties totaling 2,106,845 thousand yen and additional acquisition of 2 real estate
trust beneficiary interests amounting to 372,441 thousand yen and the principal decrease was the sales of real estate trust beneficiary interests in 1
property totaling 2,146,120 thousand yen and depreciation of 1,068,136 thousand yen and during the fiscal period ended September 30, 2020, theprincipal increase was due to the acquisitions of real estate trust beneficiary interests in 1 property totaling 2,006,474 thousand yen and additional
acquisition of real estate trust beneficiary interest amounting to 128,651 thousand yen and the principal decrease was due to the sales of real estate
trust beneficiary interests in 1 property totaling 1,390,848 thousand yen and depreciation amounting to 1,039,848 thousand yen.
Note 3: The fair value of Daikanyama Address Dixsept (60.0% quasi co-ownership interest), Hankyu Oasis Hirakatadeguchi and Unicus Ina (20.0% quasi
co-ownership interest) as of March 31, 2021 are based on the sales prices (3,986,400 thousand yen, 1,500,000 thousand yen and 1,048,000
thousand yen) under the trust beneficiary interest sales contracts entered on November 17, 2020, February 25, 2021 and April 7, 2021, respectively.
The fair value of Daikanyama Address Dixsept as of September 30, 2020, is based on the sales price (6,644,000 thousand yen) under the trust
beneficiary interest sales contracts entered into on November 17, 2020.
The profit or loss for the periods ended March 31, 2021 and September 30, 2020 concerning investment and rental properties is included in Note “7.
BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REAL ESTATEPROPERTY.”

18. PER UNIT INFORMATION
From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020

Net asset value per unit
Net income per unit

¥232,575¥231,842¥7,084¥6,536

Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during the fiscal period
ended March 31, 2021 (536,177 units) and during the fiscal period ended September 30, 2020 (536,177 units) . Net income per unit after adjusting forresidual units is not included because there were no residual investment units.
The basis for calculating net income per unit is as follows:

Net income (in thousands of yen)
Net income not attributable to ordinary unitholders (in thousands of yen)
Net income attributable to ordinary unitholders (in thousands of yen)
Weighted average number of units during the period (units)

From October 1, 2020

From April 1, 2020

to March 31, 2021

to September 30, 2020

¥3,798,649¥3,504,731--¥3,798,649¥3,504,731

536,177

536,17765

19. SIGNIFICANT SUBSEQUENT EVENTSIssuance of new investment units
KRR passed resolutions at the Board of Directors Meetings held on April 7, 2021 and April 14, 2021, to issue new investment units to fund part of the acquisition of specified
assets. Payments for the issuance of new investment units through public offering and through third-party allotment have been completed on April 20, 2021 and May 18, 2021,
respectively. The proceeds from the third-party allotment of new investment units will be retained and used to fund part of the acquisition of specified assets or repayment ofborrowings in the future.
As a result, unitholders' capital totaled ¥133,103,750,770 and total number of investment units issued and outstanding increased to 582,177 as of May 18, 2021.
(Issuance of new investment units through public offerings)
Total number of units issued

43,800 units

Issue price (offer price)

267,930 yen per unit

Total amount of issue price (total offer price)

11,735,334,000 yen

Paid-in amount (issue amount)259,136 yen per unit

Total paid-in amount (total issue amount)

11,350,156,800 yen

Payment date

April 20, 2021

(Issuance of new investment units through third-party allotment)
Total number of units issued

2,200 units

Paid-in amount (issue amount)259,136 yen per unit

Total paid-in amount (total issue amount)

570,099,200 yen

Payment date

May 18, 2021

Allottee

SMBC Nikko Securities Inc.

20. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, plant and equipment and intangible assets consist of the following as of March 31, 2021:
Type of asset

Balance atthebeginning of
the period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period

Depreciation
for the periodNetbalance atthe end of
the period

Depreciation
Accumulated
depreciation

Remarks(in thousands of yen)
Buildings¥745,164¥1,405-¥746,570¥61,444¥16,057¥685,125

Structures

38,751

8,026-

46,777

4,023

1,067

42,753Land

Property,plant andequipment

2,951,386

5,079

-

2,956,465--

2,956,465

Subtotal

3,735,302

14,510-3,749,812

65,467

17,125

3,684,344

Buildings in trust

61,177,360

1,706,288

362,404

62,521,244

8,450,403

962,084

54,070,840

Structures in trust

3,439,796

68,533

17,1133,491,216

600,741

64,9982,890,475

Machinery andequipment in trust

262,338-858

261,479

53,6757,512

207,804

Tools, furniture andfixtures in trust

150,938

19,683

3,823

166,797

63,53012,436103,267

163,431,237

1,220,609

1,835,221

162,816,625--

162,816,625

-

6,177

-

6,177

-

-

6,177

228,461,671

3,021,292

2,219,422

229,263,541

9,168,350

1,047,032

220,095,190

232,196,973

3,035,802

2,219,422

233,013,354

9,233,818

1,064,157

223,779,535

4,349,916--

4,349,916

49,0683,9784,300,847

Land in trust
Construction inprogress in trust
Subtotal
Total
Intangible
assets
Total¥

Leasehold right in
trust
Other

16,719¥4,366,636

¥

-

¥

-

16,719

8,496

1,284

8,223

-

¥4,366,636¥57,565¥5,263¥4,309,070

66

Property, plant and equipment and intangible assets consist of the following as of September 30, 2020:
Type of asset

Balance atthebeginning of
the period

Increaseduring theperiodDecreaseduring theperiodDepreciation
for the periodNetbalance atthe end of
the period

Depreciation

Balance atthe end of
the period

Accumulated
depreciation

Remarks(in thousands of yen)
Buildings¥735,397¥9,767-¥745,164¥45,386¥15,812¥699,778

Structures

38,751--38,751

2,955

1,000

35,795Land

Property,plant andequipment

2,951,386--

2,951,386--

2,951,386

Construction inprogress

5,062

-

5,062

-

-

-

-

Subtotal

3,730,597

9,767

5,062

3,735,302

48,342

16,8133,686,960

Buildings in trust

60,239,912

937,448-

61,177,360

7,556,164935,02953,621,196

Structures in trust

3,419,821

19,975-3,439,796

539,341

64,6352,900,455

Machinery andequipment in trust

220,898

41,440-262,338

46,502

6,910

215,835

Tools, furniture andfixtures in trust

147,539

4,031

633

150,938

52,512

12,481

98,425

163,155,870

1,666,215

1,390,848

163,431,237--

163,431,237

4,115

-

4,115

-

-

-

-

227,188,158

2,669,109

1,395,597

228,461,671

8,194,520

1,019,057

220,267,150

230,918,756

2,678,876

1,400,659

232,196,973

8,242,863

1,035,870

223,954,110

4,349,916--

4,349,916

45,0903,9784,304,826

15,883836-

16,719

7,211

1,265

9,507

¥4,365,799

¥836

-

¥4,366,636¥52,302¥5,244¥4,314,334

Land in trust
Construction inprogress in trust
Subtotal
Total
Intangible
assets
Total¥

Leasehold rightin trust
Other¥*The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.

6721. SHORT-TERM LOANS PAYABLE AND LONG-TERM LOANS PAYABLE
The following summarizes short-term loans payable and long-term loans payable outstanding as of March 31, 2021:
Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 2）
（Note 3）

Balance atthe end of
the period(in thousands of yen)
Short-termloanspayableCurrent
portion of
long-term
loans
payableSumitomo Mitsui
Banking Corporation

Payment due
date（Note 4）Use

Remarks

0.471

January 31,
2021(Note 5)

Unsecured/
Nonguaranteed

0.865

February 10,
2021

0.925

February 10,
2021

0.472

February 28,
2021

0.550

September
30, 2021

0.485

April 27,2021
(Note 5)

Unsecured/
Nonguaranteed(%)

2,750,000-

2,750,000-

Subtotal
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.

2,750,000-

2,750,000-

3,000,000-

3,000,000-

700,000-

700,000-

500,000-

500,000-

450,000-

450,000-

Resona Bank, Limited

450,000-

450,000-

Mizuho Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

400,000-

400,000-

1,500,000-

1,500,000-

2,400,000-

2,400,000-

1,600,000-

1,600,000-

Sumitomo Mitsui Trust
Bank, Limited

550,000-

550,000-

Resona Bank, Limited

500,000-

500,000-

Aozora Bank, Ltd.

500,000-

500,000-

Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
The Gunma Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.

350,000-

350,000-

300,000-

300,000-

500,000--

500,000

2,600,000--

2,600,000

500,000--

500,000

400,000--

400,000

300,000--

300,000

300,000--

300,000

600,000--

600,000

0.400

500,000--

500,000

0.553

400,000--

400,000

0.553

200,000--

200,000

0.553

900,000--

900,000

0.473

April 30,2021

2,600,000--

2,600,000

800,000--

800,000

600,000--

600,000

400,000--

400,000

0.978

February 10,2022

400,000--

400,000

300,000--

300,000

300,000--

300,000

1,600,000--

1,600,000

1.033

February 10,2022

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
MUFG Bank, Ltd.
(Note 6)Development Bank ofJapan Inc.（Note 6）
Mizuho Bank, Ltd.
(Note 6)
Mizuho Trust &Banking Co., Ltd.
（Note 6）
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation(Note 7)
MUFG Bank, Ltd.
(Note 7)
Sumitomo Mitsui Trust
Bank, Limited (Note 7)
Aozora Bank, Ltd.
(Note 7)
Mizuho Trust &Banking Co., Ltd.
(Note 7)
Mizuho Bank, Ltd.
(Note 7)
Resona Bank, Limited(Note 7)Development Bank ofJapan Inc. (Note 6)(Note 7)

April 27,
2021

68

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Current
portion of
long-term
loans
payableSumitomo Mitsui
Banking Corporation

2,750,000-

2,750,000

27,400,000

2,750,000

13,200,000

16,950,000

4,600,000--

4,600,000

1,000,000--

1,000,000

600,000--

600,000

400,000--

400,000

Resona Bank, Limited

400,000--

400,000

Mizuho Trust &Banking Co., Ltd.

400,000--

400,000

400,000--

400,000

1,500,000--

1,500,000

MUFG Bank, Ltd.

450,000--

450,000

Resona Bank, Limited
The Musashino Bank,Ltd.
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.

200,000--

200,000

150,000--

150,000

1,500,000--

1,500,000

3,000,000--

3,000,000

1,150,000--

1,150,000

MUFG Bank, Ltd.

1,000,000--

1,000,000

700,000--

700,000

650,000--

650,000

500,000--

500,000

1,500,000--

1,500,000

Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Bank, Ltd.

MUFG Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)

Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Long-term
loans
payableResona Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation

Payment due
date（Note 4）Use

Remarks

0.478

January 31,
2022(Note 5)

Unsecured/
Nonguaranteed

1.366

April 16,
2025

0.975

March 31,
2023

0.994

March 31,
2023

0.987

March 31,
2023

1.013

March 31,
2023

1.110

March 31,
2024

1.243

April 16,2025

(Note 5)

Unsecured/
Nonguaranteed(%)-

Subtotal

Averageinterest rate
（Note 2）
（Note 3）400,000--

400,000

450,000--

450,000

0.803

890,000--

890,000

0.760

2,670,000--

2,670,000

0.932

890,000--

890,000

0.888

2,000,000--

2,000,000

1.049

1,000,000--

1,000,000

1.049

500,000--

500,000

1.002

1,500,000--

1,500,000

400,000--

400,000

Aozora Bank, Ltd.

400,000--

400,000

Resona Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)300,000--

300,000

600,000--

600,000

0.696

600,000--

600,000

0.815

500,000--

500,000

0.814

200,000--

200,000

0.814

500,000--

500,000

0.903

MUFG Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited

0.772

September 30,
2024
September 30,
2024
April 21,2026
October 31,
2025

January 31,
2027

October 31,
2024

October 31,
2024

October 31,
2026
69Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
Development Bank ofJapan Inc. (Note 6)
Mizuho Bank, Ltd.
(Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)
MUFG Bank, Ltd.

Long-term
loans
payableMizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.

Averageinterest rate
（Note 2）
（Note 3）Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)

500,000--

500,000

500,000--

500,000

400,000--

400,000

500,000--

500,000

1.050

500,000--

500,000

1.049

300,000--

300,000

1.050

500,000--

500,000

0.670

1,500,000--

1,500,000

0.918

500,000--

500,000

0.930

1,500,000--

1,500,000

1.029

1,500,000--

1,500,000

1.100

500,000--

500,000

1.035

1,200,000--

1,200,000

1.000

1,250,000--

1,250,000

800,000--

800,000

900,000--

900,000

0.988

2,600,000--

2,600,000

0.985

2,000,000--

2,000,000

0.902

1.033

0.603

1,000,000--

1,000,000

1.090

1,000,000--

1,000,000

0.907

1,500,000--

1,500,000

0.999

500,000--

500,000

0.900

500,000--

500,000

0.999

500,000--

500,000

0.999

700,000--

700,000

0.913

700,000--

700,000

0.726

Resona Bank, Limited

500,000--

500,000

0.676

Aozora Bank, Ltd.

500,000--

500,000

0.726

Mizuho Bank, Ltd.
The Musashino Bank,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

400,000--

400,000

0.726

400,000--

400,000

0.676

1,850,000--

1,850,000

0.910

1,300,000--

1,300,000

0.860

Resona Bank, Limited.

650,000--

650,000

0.460

Aozora Bank, Ltd.

890,000--

890,000

0.585

Mizuho Bank, Ltd.

1,370,000--

1,370,000

0.718

Sumitomo Mitsui Trust
Bank, Limited

820,000--

820,000

0.550

MUFG Bank, Ltd.

1,270,000--

1,270,000

0.750

The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui Trust
Bank, Limited

Payment due
date（Note 4）

May 18,2027

May 18,2027

September
29, 2023
September
30, 2026
September
29, 2027
September
29, 2028
October 3,
2027
February 10,2028
August 31,
2022
April 30,
2027
April 30,
2027
April 30,
2026
April 30,2028
May 31,
2026

May 31,2027

March 31,2025

March 31,2026

March 31,2028
August 31,
2024
August 31,
2026
March 31,2028
October 31,
2024
January 31,
2028

70

Classification

Balance at the
beginning of theperiodLenderIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
(Note 6)
Resona Bank, Limited
Development Bank ofJapan Inc.（Note 6）
The Gunma Bank, Ltd.
The Musashino Bank,
Ltd. （Note 6）
Sumitomo Mitsui
Banking Corporation
Long-term
loans
payable--650,000

0.670

1,500,000--

1,500,000

0.520

1,000,000--

1,000,000

0.644

1,000,000--

1,000,000

0.644

500,000--

500,000

0.550

300,000--

300,000

0.644

500,000--

500,000

0.830

400,000--

400,000

0.498

400,000--

400,000

0.478

700,000--

700,000

0.758-

450,000-

450,000

0.725-

3,000,000-

3,000,000-

700,000-

700,000-

500,000-

500,000-

450,000-

450,000-

400,000-

400,000-

1,500,000-

1,500,000-

2,400,000-

2,400,000

Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Resona Bank, Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.（Note 6）
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

-

1,600,000-

1,600,000

Sumitomo Mitsui Trust
Bank, Ltd.

-

550,000-

550,000

Resona Bank, Ltd.

-

500,000-

500,000

Aozora Bank, Ltd.

-

500,000-

500,000

Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.

-

350,000-

350,000-

300,000-

300,000

74,650,000

13,200,000-

87,850,000¥ 104,800,000¥ 15,950,000¥ 15,950,000¥104,800,000

Total

Payment due
date（Note 4）Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)

650,000

Aozora Bank, Ltd.

Subtotal

Averageinterest rate
（Note 2）
（Note 3）

April 30,
2028

October 31,
2026

October 31,
2029
January 31,
2025
January 31,
2025
September
30, 2028
January 31,
2029

0.809

January 31,
2030

0.888

January 31,
2031

0.535

February 28,
2026

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled after the balance sheet date are as follows:
Due after 1 year
through 2 years
Long-term loans
payable¥ 9,050,000

Due after 2 years
through 3 years¥ 7,500,000

Due after 3 years
through 4 years（in thousands yen）
¥ 8,810,000

Due after 4 years
through 5 years¥ 16,090,000

Due after 5 years¥ 46,400,000

Note 2: All debts except for the following Note 6 are loans payable at a floating rate.
Note 3: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, with regard to loans payable forwhich 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 4: All the repayment methods of debt financing except for the following Note 7 are lump-sum repayments on the due date.
Note 5: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses are included) and repayment ofdebts.
Note 6: Loans payable at a fixed rate.
Note 7: 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.

71

The following summarizes short-term loans payable and long-term loans payable outstanding as of September 30, 2020:
Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 2）
（Note 3）

Balance atthe end of
the period(in thousands of yen)
Short-termloanspayableSumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation

Long-term
loans
payable¥-¥700,000

¥

-

0.459

-

-

2,750,000

Subtotal
Sumitomo Mitsui
Banking Corporation

3,450,000-

700,000

2,750,000

3,000,000--

3,000,000

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.

700,000--

700,000

500,000--

500,000

450,000--

450,000

Resona Bank, Limited

450,000--

450,000

Mizuho Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

400,000--

400,000

1,500,000--

1,500,000

2,400,000--

2,400,000

1,600,000--

1,600,000

550,000--

550,000

500,000--

500,000

Aozora Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

350,000--

350,000

300,000--

300,000

500,000--

500,000

2,600,000--

2,600,000

500,000--

500,000

400,000--

400,000

300,000--

300,000

300,000--

300,000

600,000--

600,000

0.400

500,000--

500,000

0.553

Mizuho Trust &Banking Co., Ltd.
The Gunma Bank, Ltd.
(Note 6) (Note 8)
Sumitomo Mitsui
Banking
Corporation(Note 8)
Aozora Bank, Ltd.
(Note 8)MUFG Bank, Ltd.
(Note 8)
Sumitomo Mitsui Trust
Bank, Limited(Note 8)
Resona Bank,
Limited(Note 8)
MUFG Bank, Ltd.
(Note 6) (Note 8)
Development Bank ofJapan Inc.（Note 6）(Note 8)Mizuho Bank, Ltd.
(Note 6) (Note 8)
Mizuho Trust &Banking Co., Ltd.
（Note 6）(Note 8)
Sumitomo Mitsui
Banking Corporation（Note 7）
Subtotal
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Resona Bank, Limited

Use

Remarks

September 30,
2020
January 31,
2021(Note 5)

Unsecured/
Nonguaranteed(Note 5)

Unsecured/
Nonguaranteed(Note 5)

Unsecured/
Nonguaranteed(%)

2,750,000

Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

Current
portion of
long-term
loans
payable¥700,000

Payment due
date（Note 4）

0.459

0.865

February 10,
2021

0.925

February 10,
2021

0.459

February 28,
2021

0.550

September
30, 2021

0.485

April 27,
2021

April 27,2021

400,000--

400,000

0.553

200,000--

200,000

0.553-

1,900,000

1,000,000

900,000

0.460

April 30,2021

19,500,000

1,900,000

1,000,000

20,400,000

2,600,000--

2,600,000

800,000--

800,000

600,000--

600,000

400,000--

400,000

0.978

February 10,2022

400,000--

400,000

300,000--

300,000

300,000--

300,00072

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation

1,600,000

1.033

4,600,000--

4,600,000

1.366

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited

1,000,000--

1,000,000

600,000--

600,000

Mizuho Bank, Ltd.

400,000--

400,000

Resona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
MUFG Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)
MUFG Bank, Ltd.

400,000--

400,000

400,000--

400,000

400,000--

400,000

1,500,000--

1,500,000

450,000--

450,000

200,000--

200,000

150,000--

150,000

1,500,000--

1,500,000

3,000,000--

3,000,000

Mizuho Bank, Ltd.

1,150,000--

1,150,000

MUFG Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation

1,000,000--

1,000,000

700,000--

700,000

650,000--

650,000

500,000--

500,000

1,500,000--

1,500,000

400,000--

400,000

450,000--

450,000

0.803

890,000--

890,000

0.760

2,670,000--

2,670,000

0.932

890,000--

890,000

0.888

2,000,000--

2,000,000

1.049

1,000,000--

1,000,000

1.049

500,000--

500,000

1.002

1,500,000--

1,500,000

400,000--

400,000

400,000--

400,000

300,000--

300,000

600,000--

600,000

0.696

600,000--

600,000

0.815

500,000--

500,000

0.814

200,000--

200,000

0.814

500,000--

500,000

0.903

October 31,
2026

500,000--

500,000

1.033

May 18,2027

Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.
Resona Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation

Remarks(Note 5)

Unsecured/
Nonguaranteed(Note 5)

Unsecured/Non-

February 10,
2022
April 16,2025-

Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)

Use

(%)

-

MUFG Bank, Ltd.

Long-termloans

Payment due
date（Note 4）1,600,000

Resona Bank, Limited
The Musashino Bank,Ltd.
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation

Long-term
loans
payableAverageinterest rate
（Note 2）
（Note 3）0.975

March 31,
2023

0.994

March 31,
2023

0.987

March 31,
2023

1.013

March 31,
2023

1.110

March 31,
2024

1.243

April 16,
2025

0.772

September 30,
2024
September 30,
2024
April 21,2026
October 31,
2025

January 31,
2027

October 31,
2024

October 31,
2024

73

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)payableSumitomo Mitsui Trust
Bank, Limited

Averageinterest rate
（Note 2）
（Note 3）--500,000

400,000--

400,000

500,000--

500,000

1.050

500,000--

500,000

1.049

300,000--

300,000

1.050

-

-

500,000

0.670

1,500,000--

1,500,000

0.918

500,000--

500,000

0.930

1,500,000--

1,500,000

1.029

1,500,000--

1,500,000

1.100

500,000--

500,000

1.035

1,200,000--

1,200,000

1.000

MUFG Bank, Ltd.

1,250,000--

1,250,000

Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation

800,000--

800,000

900,000--

900,000

0.988

2,600,000--

2,600,000

0.985

2,000,000--

2,000,000

0.902

1,000,000--

1,000,000

1.090

1,000,000--

1,000,000

0.907

1,500,000--

1,500,000

0.999

500,000--

500,000

0.900

500,000--

500,000

0.999

500,000--

500,000

0.999

700,000--

700,000

0.913

700,000--

700,000

0.726

0.603

May 18,2027

September
29, 2023
September
30, 2026
September
29, 2027
September
29, 2028
October 3,
2027
February 10,2028
August 31,
2022
April 30,
2027
April 30,
2027
April 30,
2026
April 30,2028
May 31,
2026

May 31,2027

March 31,2025

500,000--

500,000

0.676

Aozora Bank, Ltd.

500,000--

500,000

0.726

Mizuho Bank, Ltd.

400,000--

400,000

0.726

400,000--

400,000

0.676

1,850,000--

1,850,000

0.910

March 31,

MUFG Bank, Ltd.

1,300,000--

1,300,000

0.860

2028

Resona Bank, Limited.

650,000--

650,000

0.460

Aozora Bank, Ltd.

890,000--

890,000

0.585

Mizuho Bank, Ltd.

1,370,000--

1,370,000

0.718

Sumitomo Mitsui Trust
Bank, Limited

820,000--

820,000

0.550

MUFG Bank, Ltd.

1,270,000--

1,270,000

0.750

Mizuho Trust &Banking Co., Ltd.
(Note 6)650,000--

650,000

0.670

The Musashino Bank,
Ltd.
Sumitomo Mitsui
Banking Corporation

Remarks

guaranteed

500,000

500,000

The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

Use

(%)

Resona Bank, Limited
Development Bank ofJapan Inc. (Note 6)
Mizuho Bank, Ltd.
(Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)

Mizuho Bank, Ltd.

Payment due
date（Note 4）

March 31,2026

August 31,
2024
August 31,
2026
March 31,2028
October 31,
2024
January 31,
2028
April 30,2028

(Note 5)

Unsecured/
Non-

74

Classification

Balance at the
beginning of theperiodLenderIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation

Long-term
loans
payableMizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
(Note 6)
Resona Bank, Limited

Averageinterest rate
（Note 2）
（Note 3）1,500,000--

1,500,000

0.520

1,000,000--

1,000,000

0.644

1,000,000--

1,000,000

0.644

500,000--

500,000

0.550

300,000--

300,000

0.644

500,000--

500,000

0.830

The Gunma Bank, Ltd.

400,000--

400,000

0.498

400,000--

400,000

0.478-

700,000-

700,000

0.758

Total

Use

Remarks(%)

Development Bank ofJapan Inc.（Note 6）
The Musashino Bank,
Ltd. （Note 6）
Sumitomo Mitsui
Banking Corporation
Subtotal

Payment due
date（Note 4）80,950,000

700,000-

81,650,000¥103,900,000¥2,600,000¥1,700,000¥104,800,000

guaranteed

October 31,
2026

October 31,
2029
January 31,
2025
January 31,
2025
September
30, 2028

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled after the balance sheet date are as follows:
Due after 1 year
through 2 years
Long-term loans
payable¥ 9,050,000

Due after 2 years
through 3 years¥ 7,500,000

Due after 3 years
through 4 years（in thousands yen）
¥ 8,990,000

Due after 4 years
through 5 years¥ 13,320,000

Due after 5 years¥ 42,790,000

Note 2: All debts except for the following Note 6 are loans payable at a floating rate.
Note 3: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, with regard to loans payable forwhich 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 4: All the repayment methods of debt financing except for the following Note 7 are lump-sum repayments on the due date.
Note 5: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses are included) and repayment ofdebts.
Note 6: Loans payable at a fixed rate.
Note 7: Partial prepayment of 1,000,000 thousand yen was made on April 30, 2020.
Note 8: 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.

75

22. INVESTMENT CORPORATION BONDS
Outstanding investment corporation bonds as of March 31, 2021 are as follows.
SeriesDate of issue

Balance atthe beginningof period

Decreaseduring theperiodBalance at theend of period

Interest rate

(in thousands of yen)First series of unsecured
investment corporation bonds(Note 1)
Second series of unsecured
investment corporation bonds(Note 1)
Third series of unsecured
investment corporation bonds(Note 1)
Fourth series of unsecured
investment corporation bonds(Note 1)Fifth series of unsecured
investment corporation bonds(Note 1)
Sixth series of unsecured
investment corporation bonds(Note 2)Total

October 31,
2016¥1,000,000

October 31,
2016

Repayment date

¥1,000,000

0.200

October 29,
2021

1,000,000-

1,000,000

0.600

October 30,
2026

August 31,
2017

1,000,000-

1,000,000

0.320

August 31,
2022

August 31,
2017

2,000,000-

2,000,000

0.700

August 31,
2027

April 26,2018

2,000,000-

2,000,000

0.700

April 26,
2028

April 30,2020

1,000,000-

1,000,000

0.400

April 30,2025-

¥8,000,000¥8,000,000¥

Remarks

(%)

-

¥

Use

(Note3)

Unsecured(Note4)Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Ranking pari passu among the specified investment corporation bonds and small private placement with restrictions on splits of denomination of each bond.
Note 3: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate and repayment of debts.
Note 4: Investment corporation bonds were used as the funds for repayment of debts.
Note 5: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year
or less
Investment
corporation bonds

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

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

¥1,000,000¥

Due after 3 years
through 4 years-¥

Due after 4 years
through 5 years-¥1,000,000

Repayment date

Use

Outstanding investment corporation bonds as of September 30, 2020 are as follows.
SeriesFirst series of unsecured
investment corporation bonds(Note 1)
Second series of unsecured
investment corporation bonds(Note 1)
Third series of unsecured
investment corporation bonds(Note 1)
Fourth series of unsecured
investment corporation bonds(Note 1)Fifth series of unsecured
investment corporation bonds(Note 1)
Sixth series of unsecured
investment corporation bonds(Note 2)
Total

Date of issue

Balance atthe beginningof period

October 31,
2016¥1,000,000

October 31,
2016
August 31,
2017
August 31,
2017

Decrease
Balance at theduring theend of period
period(in thousands of yen)Interest rate(%)-

¥1,000,000

0.200

October 29,
2021

1,000,000-

1,000,000

0.600

October 30,
2026

1,000,000-

1,000,000

0.320

August 31,
2022

0.700

August 31,2027¥

2,000,000-

2,000,000

April 26,2018

2,000,000-

2,000,000

0.700

April 26,
2028

April 30,
2020

-

-

1,000,000

0.400

April 30,2025-

¥8,000,000¥7,000,000¥

Remarks(Note3)

Unsecured(Note4)Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Ranking pari passu among the specified investment corporation bonds and small private placement with restrictions on splits of denomination of each bond.
Note 3: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate and repayment of debts.
Note 4: Investment corporation bonds were used as the funds for repayment of debts.
Note 5: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year
or less
Investment
corporation bonds¥

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

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

Due after 3 years
through 4 years-¥

Due after 4 years
through 5 years-¥1,000,000

7623. DISTRIBUTIONS
From October 1, 2020
to March 31, 2021

I.. Retained earnings at the end of period

From April 1, 2020
to September 30, 2020

¥4,153,672,573¥3,716,853,291

II. Distributions in excess of earnings
Of which, allowance for temporary
difference adjustments¥5,361,770¥147,984,852¥5,361,770¥147,984,852

Ⅲ.Incorporation into unitholders’ capital

104,194,502-

Of which, reversal of allowance fortemporary difference adjustments

104,194,502-

Ⅳ. Total distributions¥3,804,175,815¥3,509,814,642

Distributions per unit

¥7,095¥6,546¥3,798,814,045¥3,361,829,790¥7,085¥6,270¥5,361,770¥147,984,852

¥10

¥276

¥250,664,025¥355,023,501

Of which, distributions of earnings
Of which, distributions of earnings perunit
Of which, allowance for temporary
difference adjustments
Of which, distributions in excess ofearnings per unit (allowance fortemporary difference adjustments)
Ⅴ.Retained earnings brought forward to
the next period

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amountequivalent to 90% of its distributable profit as stipulated
in Article 67-15 of the Special Taxation Measures Law
and shall be up to its profits as the maximum amount.
Following this policy, KRR has decided that it shall
distribute ¥3,798,814,045 which is almost the entire
amount of income as defined in Article 136-1 of theInvestment Trust Act after deduction of reversal of
allowance for temporary difference adjustments (asdefined in Article 2-2-30 of the Ordinance on
Accountings of Investment Corporations).
Furthermore, in accordance with the policy for“Distribution of Money in Excess of Profits” as stated in
Article 39-2 of KRR’s Articles of Incorporation, KRR
made a distribution in excess of earnings of ¥5,361,770
for allowance for temporary difference adjustments (asdefined in Article 2-2-30 of the Ordinance on
Accountings of Investment Corporations) for the
purpose of reflecting the effect on distributions of thedifference in earnings calculated under Japanese
GAAP and Japanese tax laws (as defined in Article 2-230 (a) of the Ordinance on Accountings of Investment
Corporations) in association with the amortization of
fixed-term land leasehold rights.

Method of calculating distribution amountIn accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amountequivalent to 90% of its distributable profit as stipulated
in Article 67-15 of the Special Taxation Measures Law
and shall be up to its profits as the maximum amount.
Following this policy, KRR has decided that it shall
distribute ¥3,361,829,790 which is almost the entire
amount of income as defined in Article 136-1 of theInvestment Trust Act .
Furthermore, in accordance with the policy for“Distribution of Money in Excess of Profits” as stated in
Article 39-2 of KRR’s Articles of Incorporation, KRR
made a distribution in excess of earnings of¥147,984,852 for allowance for temporary difference
adjustments (as defined in Article 2-2-30 of theOrdinance on Accountings of Investment Corporations)for the purpose of reflecting the effect on distributions of
the difference in earnings calculated under Japanese
GAAP and Japanese tax laws (as defined in Article 2-230 (a) of the Ordinance on Accountings of Investment
Corporations) in association with the amortization of
fixed-term land leasehold rights and of the item
deducted from net asset (as defined in Article 2-2-30 (b)of the Ordinance on Accountings of Investment
Corporations) in association with deferred losses onhedges.

12th Fiscal Period (From October 1, 2020 to March 31, 2021)
1. Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.
Buildings in trust,
Leasehold right in trust

ReasonAmortization of leasehold right in trust and the amount in excess ofdepreciation

Allowance for temporary
difference adjustments¥5,36177

2. Reasons, related assets and reversal of allowance(in thousands of yen)
Related assets, etc.
Deferred gains or losses onhedges

Reversal of allowance for temporary
difference adjustments

ReasonChanges in the fair value of derivative instruments¥104,194

3. 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 the hedging instruments, the corresponding amount is scheduled to be reversed.

11th Fiscal Period (From April 1, 2020 to September 30, 2020)
1. Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.

Allowance for temporary
difference adjustments

ReasonBuildings in trust,
Leasehold right in trust

Amortization of leasehold right in trust and the amount in excess ofdepreciation¥5,178Deferred gains or losses on hedges

Loss on interest-rate swaps recognized at the end of the fiscal period¥142,806

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 the hedging instruments, the corresponding amount is scheduled to be reversed.

78