Kenedix Realty Investment Corporation
9th Period Results (Ended October 2009)
Updated Portfolio of Assets and Financial Data due to the additional
property acquisition and new borrowings on February 18, 2010

February 2010
Kenedix REIT Management, Inc.
http://www.kdx-reit.com/eng/
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

0Flexible management based on market environmentMore properties in the market due
to maturity of non-recourse loans

Financial crisis

Marketenvironment

Credit crunch

Acquisition of properties by J-REITs

Rising cap rates

Re-opening of equity market

Rising office vacancy rate

Half a step ahead Management

Propertytransaction

Measures taken in the 8th and 9th period(2008/11-2009/10)• Sale of office building in regional
areas and small office building• Acquisition of KDX Nagoya Sakae
Building (building portion)• Sale of 2 residential properties

Acquisition of properties
funded by equity (2009/11)
Re-opening ofRe
Re-openingof property
propertyacquisitionacquisition

Tokyo Metropolitan Area
Mid-sized office buildings
Acquisition of 4 properties

Plans from 10th period onwards（2009/11~）
StableStable growth
growth• Stable acquisition of properties
based on strong market position

Management ofexisting properties

KRI

Financial

Financial
Financial stability
stability• Stable lender structure• Continue to diversify the debt
repayment period• Posted collateral to stabilize fundraising• Equity finance• Decrease leverage• Acquisition of properties with newdebt• Flexible finance• Conservative range of interestbearing debt ratio

EmphasisEmphasis onon thetheoccupancy
occupancy ratio
ratio• Focus on stable cash flow

Stable cash flow

• Flexible proactive leasing activities resulting an increase of new tenants• Construction cost reduction, Customer satisfaction survey for tenants

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

1

ＳＥＣＴＩＯＮ 1

9th Period Results (Ended Oct. 2009)
10th Period Forecasts (to Apr. 2010)

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

2

9th period financial results—Performance highlights
Performance(¥M)

8th period
results(to Apr. 2009)

9th period
results(to Oct. 2009)

Differenceof 8th & 9th
PeriodOperating revenues

8,204

7,921

▲282

Notes
Reference (1)Profit/loss from property sale

▲492

▲440

51

8th Period: Sales of 2 office buildings
9th Period: Sales of 2 residential properties
Total sales of 4 properties

Rental business profit

3,603

3,652

48

Reference (2)Depreciation

1,429

1,451

22

–

Operating income

3,463

3,213

▲249

Non-operating expenses

1,039

1,116

76

Net income

2,434

2,102

▲332

▲13.6%NOI (Net Operating Income)

6,030

5,721

▲309

Reference (3)FFO (Funds From Operation)

4,356

3,994

▲362

–

Number of units outstanding

200,000 units

200,000 units–¥12,172¥10,551▲ ¥1,661

Distribution per unit

▲7.2%
Interest expenses,etc.: 89

Comparison of 8th & 9th period
results (main factors)(1) Operating revenues ▲282(▲3.4%)
・Sale of 4 properties ▲189(▲2.3%)
・Existing properties▲93(▲1.1%)(2) Rental business profit ＋48(+1.3%)
・Sale of 4 properties ▲110(▲3.1%)
・Existing properties+159(+4.4%)(3) NOI▲309(▲5.1%)
・Sale of 4 properties ▲109(▲1.8%)
・Existing properties ▲198(▲3.3%)(Reference) issued 33,550 units in 10th
Period (Nov. 2009)▲13.6%

9th period results comparison to forecast as of Aug. 27, 2009(¥M)

Revisedforecast (As of
Aug. 27, 2009)

Actual results

Difference

Notes
・More than expected income from rent
・Increase in revenue from leaving tenants

Operating revenues

7,838

7,921

+83

Operating expenses

4,875

4,708

▲167 Reference (4)Operating income

2,963

3,213

250 +8.4%

Non-operating expenses

1,131

1,116

▲15 -

Interest expense,etc.

1,063

1,055

1,840

2,102

＋262 +14.2%¥9,200¥10,511+¥1,311 +14.3%

Net income
Distribution per unit

▲8 ・Decrease in base rate

Comparison of 9th period results andthe forecast (main factors)(4) Operating expenses▲167

・Decrease in utility costs▲100・Decrease in building maintenanceexpense▲33
・Increase in repair expense＋48
・Decrease in SG&A costs▲70

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any specific products. Please see disclaimer in the final page of this documents.

3

10th period earnings forecasts
Forecasts for 10th period (to April 2010)
10th period
forecasts(Apr. 2010)
As of Oct. 29, 2009B

9th period
results(Oct. 2009)
A

（¥ M)

10th period
forecasts (Note)(Apr. 2010)
As of Dec. 14, 2009C

Net change(C-B)

Net change
(C-A)

7,965

7,965

0

(Including loss fromproperty sales 440)

4,508

4,443

▲65

Property-related expenses(excl. depreciation)

2,200

-

2,323

-

+123

Depreciation

1,451

1,487

1,470

-17

+19

Operating income

3,213

3,456

3,521

+65

+308

Non-operating expenses

1,116

-

1,118

-

+2

Interest expense,etc.

1,055

1,074

1,071

▲3

+16

7,921

Operating revenues+44 (1)

4,708*
Operating expenses(3)▲ 265 (2)Ordinary income

2,103

2,355

2,408

+53

+305

Net income

2,102

2,354

2,407

+53

+305

No. of units outstanding

200,000

235,000

233,550▲1,450+33,550

Distribution per unit (¥)

10,511

10,00010,300

＋300

▲ 211

NOI ＊

5,721

-

5,642

-

▲ 79

FFO＊

3,994

-

3,877

-

▲ 117

(Reference) Profit/loss fromproperty sale

▲440

-

-

-

＋440

(Reference) Changes in thenumber of properties

67→65properties

65→69properties

69properties-+4 properties

Acquisition
Nagoya Sakae (Building)Sale・AP Motoazabu
・AP Wakamatsu-Kawada

Acquisition
・Koishikawa ＴＧ・Gotanda ＴＧ
・Nihonbashi 216
・Shin-Yokohama 381
Annex Tower(Reference) Sale /acquisition of properties

Same applies as left--

Net change (C-A)(1) Operating revenues:+44
・Acquisition of 4 properties
in 10th period:+322
・Sale of 2 properties in 9th period:▲32
・KDX Nagoya Sakae Building:+64
・Revenue decline for existing
properties:▲310(2) Operating expenses:▲265

・Acquisition of 4 properties
in 10th period:+70
・Sale of 2 properties in 9th period:▲11▲440
・Loss from sales:
・Increase in property & city
planning taxes:+102
・Depreciation:+19

Major catalysts for 10th period
forecasts（C-B)(3)Operating expenses▲65

・Decrease in utility cost:▲50

Note: Forecast figures are calculated based on certain assumptions. Readers are advised that actual net income and distributions may vary due to variety of reasons.
Accordingly, the Investment Corporation does not guarantee payment of the forecast distribution.
＊NOI = Rental revenues – property-related expenses + Depreciation＊FFO = (Net income + Depreciation) - Profit/loss from property sale

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any specific products. Please see disclaimer in the final page of this documents.

4

SECTION 2

Stronger Focus on Office Buildings

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any specific products. Please see disclaimer in the final page of this documents.

5

Portfolio that focuses on office buildings(¥B)

Changes in asset size

As of February 18, 2010

Changes in total acquisition prices

Portfolio breakdown by property type■Offices ■Central urban retails ■Residentials

rowth
Re-G

Stability-emphasized

250

212.8
200

t
ow
r
G

ed
siz
a
ph
175.0
m
e
h

222.0

218.9

235.7
220.1

197.0

146.7

Residentials
Central4.3%
urban retails
5.2%
Offices
90.3%

213.0
196.9

150

193.9

197.4

184.0

Portfolio breakdown by region

16.0

Other Regional
Areas￥32.2B (Office buildings)
15.1%
Other Tokyo
CentralMetropolitan
Tokyo
Area
￥132.7B￥48.1B
62.2%
22.5%

137.9
81.4

100

69.1

115.9
86.2

48.2
50

0

37.7
12.3

12.3

18.9

20.7

End of 1st(2005/10)

End of 2nd(2006/4)

16.0

16.0

16.0

44.4

43.0

43.0

End of 3rd(2006/10)

End of 4th(2007/4)

End of 5th(2007/10)

12.7

12.3
12.7

12.3
12.7

12.3
10.3

12.3
10.3

End of 6th(2008/4)

End of 7th(2008/10)

End of 8th(2009/4)

End of 9th(2009/10)

2010/2/18

Notes:
Amounts are rounded to the nearest ¥100M.
Pie chart shows the ratio of relevant property types to total and are rounded down to the first decimal place.
Central Tokyo: Chiyoda, Chuo, Minato, Shibuya, Shinjuku.
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any specific products. Please see disclaimer in the final page of this documents.

6

Asset sales—Strengthening the financial structureusing gains realized by selling properties
Liquidation of assets
8th Period

2009/4/22

KDX
Koishikawa
Building
2009/4/30¥2.35B¥2.00B¥-0.47B

KDX Hakata
Building
Date sold
Acquisition
price
Selling priceRealized loss

9th Period

2009/6/23

Apartments
WakamatsuKawada
2009/8/27¥0.70B¥1.21B¥1.18B¥0.67B¥-0.02B¥1.05B¥-0.21B¥0.93B¥-0.23B

Apartments
Motoazabu

Selling office building in regional
area and office building with a
low acquisition priceSapporo(Residential)¥1.80B

Selling residential
properties

Self funded Acquisition and repayment of debt

Niigata

Sendai¥1.30B¥2.10Bth

9 Period

Description

Acquisition of KDX Nagoya
Sakae Building

FukuokaAcquisition of building based on
forward commitment

TimelineTokyo
Metropolitan
Area

Repayment of debt to Citi Bank
Repayment of commitment line

2008/1/11 Commitment line agreement
2008/4/25 Building acquisition
2008/10/31 Debt finance based onagreement (Forward commitment)
commitment line (¥1.5B）
2009/6/11 Amendment in acquisition
2008/11/4 Debt finance based on
priceCommitment line (¥1.0B)

Date

2009/7/1
Acquisition of the building

2009/10/30
Repayment

2009/11/2
Repayment

Size

Acquisition price¥3.55B(Reduced from preliminaryacquisition price of ¥4.325B)

¥1.0B

¥1.5B

¥194.95B¥4.90B
Osaka/Kyoto¥16.36B

Nagoya(Of which are
office building¥174.05B)¥7.55BNote:
As of Dec. 14, 2009
Amounts are rounded to the nearest ¥10M.

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any specific products. Please see disclaimer in the final page of this documents.

7

Stable growth through acquisition of properties
Track record

StabilityEmphasized

Growth-Emphasized(¥M)

Propertytransaction

80,000Acquisition

Handling Crisis

Re-growthSales

60,00040,00020,0000-20,000

1st period 2nd period 3rd period

4th period 5th period

6th period 7th period

8th period 9th period

2010/2/18(10th period)-40,00050%

45.6%Interest-bearing debt ratio

◆

47.0%

Financial

45%
38.9%

38.7%

37.5%

40%

41.2%

41.4%

41.1%

7th period

8th period

9th period

41%around

35.3%

35%
30%
1st period

2nd period 3rd period

4th period

5th period

6th period

2010/2(10th period)

Market cycle
Number of garnered property sales information
Decline ingrowthDownturn

8th period

Real estatemarket cycle
High Growth

J-REIT Market

Bottom out

Office building
leasing market

9th period

Period2008/11～
2009/1（3 months）

2009/2～
2009/4（3 months）

2009/5～
2009/7（3 months）

No.

3

1

43

Office building sales market

10th
period2009/8～
2009/11～
2009/102010/1（3 months） （3 months）

23

86

More information garnered regarding property sales
based on our track record of property acquisition

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any specific products. Please see disclaimer in the final page of this documents.

8

3rd Public Offering (Acquisition of properties during 10th Period)
A-62 Koishikawa TG Building（Occupancy ratio at the time of acquisition:100%）
♦
♦
♦
♦
♦
♦

Acquisition date:
Acquisition price:
Site area:
GFA:
Year built:
Location:,

Nov. 18, 2009
¥3,080M
1250.42m2
5,862.02m2
Nov. 1989
Koishikawa, Bunkyo-ku
Tokyo

A-64 KDX Nihonbashi 216 Building（Occupancy ratio at the time of acquisition: 100%）
♦
♦
♦
♦
♦
♦

Acquisition date:
Acquisition price:
Site area:
GFA:
Completion date:
Location:

Dec. 1, 2009
¥2,010M
307.77m2
1,871.62m2
Oct. 2006
Nihonbashi
Chuo-ku, Tokyo

A-63 Gotanda TG Building（Occupancy ratio at the time of acquisition:90.5%）
♦
♦
♦
♦
♦
♦

Acquisition date: Nov.18, 2009
Acquisition price: ¥2,620M
Site area:
582.90m2
GFA:4,440.61m2
Year built:
Apr. 1988
Location:
Gotanda,Shinagawa-ku
Tokyo

A-65 KDX Shin-Yokohama 381 Building Annex Tower（Occupancy ratio at the time of acquisition: 100%*）
♦
♦
♦
♦
♦
♦

Acquisition date:
Acquisition price:
Site area:
GFA:
Completion date:
Location:

Nov.18, 2009
¥1,100M
1,229.24m2 （1block）
10,290.30m2 （1block）
Apr. 2009
Kohokuku
Yokohama, Kanagawa*Master lease contract by the seller of the building

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any specific products. Please see disclaimer in the final page of this documents.

9Acquisition of properties during 10th Period through
New Borrowings
A-66 Pacific Marks Nishi-Shinjuku (Occupancy ratio at the time of acquisition: 93.8％)
Fund Procurement : New loans from multiple financial institutions
with loan period of mainly 5 years¾ Syndicated loan with Sumitomo Mitsui Banking Corporation acting as an agentof (total of ¥7.0B, Drawdown date: February 18, 2010)① Loan period: 3 years

Amount:¥1.5B

anInterest rate: 1.89875% (fixed interest rate)

Lender: Aozora Bank, Ltd.
Repayment method: Principal repayment in full on maturity② Loan period: 5 years Amount: ¥5.5B Interest rate: 2.19% (fixed interest rate)
Lenders: Sumitomo Mitsui Banking Corporation, Development Bank of Japan Inc.,The Chuo Mitsui Trust and Banking Co., Limited, Aozora Bank, Ltd.
Repayment method: February 26, 2010 to August 31, 2014: repayment of ¥137.5M, respectively
February 18, 2015: repayment of ¥4,125M♦Location: Nishi-Shinjuku,.

Shinjuku-ku, Tokyo♦Site area: 10,348.02m2♦Year built: May 1993
♦Number of stories: B4F11♦Acquisition price: ¥6,800 M♦Acquisition date: February 18, 2010

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any specific products. Please see disclaimer in the final page of this documents.

10

ＳＥＣＴＩＯＮ 3

Management of Existing Properties

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any specific products. Please see disclaimer in the final page of this documents.

12

Management of existing properties—
trend of turnover and occupancy ratios for office buildings
Changes in turnover ratios for office buildings(actual or estimated; annualized)
20%

14.8%
15%

12.2%

10%

8.2%

7.7%

5th
period6th
period

6.1%

9.0%

10.0%

10.9%

8th
period9th
period10th
period

7.0%

2.7%

5%
0%
1st
period2nd
period3rd
period4th
period7th
periodNote:
The estimate for 10th period incorporates cancellation forecast during 9th period, as well as acquisition of 4 properties in 10th period.

Changes in occupancy ratio for office buildings (by region)

Average vacancy period for office buildings
7th
Period8th
Period9th
Period

Tokyo
4.2
4.9
6.3
Metropolitan
months months months
Area

100%

December 2009

98%

96.0%
（Tokyo Metropolitan Area）

96%
94%

97.3%

92%
90%

10.2
10.6
11.1
months months months

85.9%

Notes:
Average (of each floor) based on number of contracts.
Floors covered by the survey are:・Offices on 2F or above that were vacant at start of period,
but acquired new tenants during the relevant period・Continuously vacant from start to end of period
・Cancelled during but managed to acquire new tenants
during the relevant period

88%
86%

♦Acquisition of
KDX Nagoya
Sakae Building

84%

84.7%
（Other Regional Areas）

82%（Reference）
Occupancy as of Dec. 31, 2009)
・Total portfolio (69 properties)
93.6%(+1.2% compared to Jul.31,2009)
・Total office buildings (62 properties)
93.3%（+1.6% compared to Jul.31,2009）

07
/0
4
07
/0
6
07
/0
8
07
/1
0
07
/1
2
08
/0
2
08
/0
4
08
/0
6
08
/0
8
08
/1
0
08
/1
2
09
/0
2
09
/0
4
09
/0
6
09
/0
8
09
/1
0
09
/1
2

Other
Regional
Areas

Occupancy
at endof 9thPeriod(Forecast)

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any specific products. Please see disclaimer in the final page of this documents.

13

Management of existing properties— status of new tenants andexisting tenants（Reference）Main reasons for new tenants
moving in to office buildings

NumberNo. of ofnewnewtenants
tenantsandandexiting
exitingtenants
tenants
Move in(No.)

50

6th period

Move out

7th periodNet

8th period

6th
7th
period period

9th period

40
30

43

20
10
0
-10

5

16
-6
-22

-13

19

23

17

6
-1

-20

18

34

30

18

-24

Expand office
space

16

15

19

26

Reduce office
space

2

3

12

17

Others/Unknown

8

7

2

12

Survey targeting mainly tenants leasing floors above 2nd floor

-10
-33

-29

-20

9th
period

Note:

5

-1
-18

8th
period-25(Reference) Main reasons for tenants to move out of
office buildings

-30

6th
7th
8th
9th
period period period period-40
2007/11～ 2008/1

2008/2～4

2008/5～7

2008/8～ 10

2008/11～ 2009/1

2009/2～4

Note:Based on number of floors. If one tenant leases more than 1 floor, each floor is counted as 1

Industries

Result of the past year
(8th and 9th period)
9 tenants with unpaid rent of morethan 2 months

2009/8～ 10

Tenant industries

DepositAverage deposit amount isequivalent to 11.0 months rent

2009/5～7

No of tenants(%)

Service27

40.9

Food/Retail

17

25.8

Industrial

6

9.1

Owner

5

7.6

Construction

3

4.5

Financial2

3.0

Real estate3

4.5

Transportation/Telecom

2

3.0

Mining total

1

1.5

Total

66

100

10th
period(forecast)

Expand office
space

2

3

4

2

3

Reduce office
space

17

23

33

44

37

Others/Unknown

11

7

6

6

5

Note:
Excluding floors for residential use

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14

Management of existing properties— rent revel of new contracts
for office buildings
New rents

Average rents

Geographical breakdown of average increase/decrease of new rent andchanges from existing contract and new contract(Simple average based on Number of contracts)
4th
periodChanges
CentralTokyo

Other Tokyo
Metropolitan
Area

Other
Regional
Areas

5thperiod6th
period7th
period9th
period

15.0% 21.2%

35.3%

13.5%

0.0%

▲19.3%

78

80（per months/Tsubo）

Increase in
rent

12

Decrease in
rent

0

0

0

0

9

17

Changes

7.8%

7.8%

15.0%

5.8%

▲1.8%

▲8.4%

Increase in
rent

4

8

4

5

4

3

Decrease in
rent

1

1

1

2

6

15

Changes

8.2%

6.8%

7.1% ▲5.1%▲7.7%▲16.4%

Increase in
rent

1

4

8

3

4

2

Decrease in
rent

0

3

4

7

7

11

Changes
Total of
OfficeBuildings

8th
periodAverage rent of office buildings as of end of 9th period

1012.6% 12.7% 17.0%

7th period

8th period 9th period

ChangeCentral Tokyo¥20,500¥20,400¥20,200▲1.0%

Other Tokyo
Metropolitan Area

¥14,400¥14,300¥14,100▲1.2%

Other Regional Areas¥11,100¥11,000¥10,700▲2.9%

Total Office Buildings¥17,600¥17,500¥17,300

▲1.2%

Note:
Average rent of offices above 2nd floor of 57 properties, excluding properties soldin 8th period and KDX Nagoya Sakae Building. Average monthly rent of each
property is total monthly rent divided by the total leased floor area, rounded down
to the nearest ¥1M

3.9% ▲2.7% ▲14.4%

Increase in
rent

17

22

19

16

16

5

Decrease in
rent

1

4

5

9

22

43

Notes:
Ratio represent the simple average changes between the average monthly rents for existing tenants andthe average rents for new contracts for respective periods.
Based on floors used for offices (above 2nd floor), excluding newly acquired building during the period

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any specific products. Please see disclaimer in the final page of this documents.

15

Management of existing properties— rent level of renewed
contracts for office building
Renewed rents
Status of renewed rents（Number of renewed contracts and changes in rent）
4th period

5th period

6th period

7th period

8th period

9th period

Increase in rent

15

29

60

42

12

6

Decrease in rent

－

－

－

－

14

30

Changes

6.9%

7.8%

7.5%

10.3%

▲2.7%

▲5.7%

Note:
Changes in rent for tenants that renewed their contracts with rents increased/decreased. Changes are the difference
between the rent 1 month prior to the renewal and the renewed rent. Tenants without rent increase/decrease are notincluded

Status of renewed rents during 9th period

Exemptfromrenewal
76.9%

Renewal23.1%

Decreasein rent
24.0%

Increasein rent
9.6%

Nochange66.4%

Note:
Any renewed contracts, including contracts extended before the expiration date. Ratio calculated by leased floor area.

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16

Management of existing properties—Continuing management
based on customer satisfaction strategy
Summary of CS survey

Breakdown of customer satisfaction survey(※ Result of 3rd survey to administrations)Customer satisfaction survey

Building Cleaners
maintenance 2%
Security, fire3%
prevention
7%
Notices from theproperty
manager8%・Conducted a survey regarding clients = tenants of the building with J.D.Power Asia Pacific・Wide range of questions regarding buildings and equipments as well as management andoperations
1st

2nd

3rd

Survey conducted

Dec. 2005（2nd period）

Jul. 2007（5th period）
period）

Jul. 20092009（9th period）
period）

No. properties(Note1)

20 properties

44 properties

58 properties

Distributed No.

Administrations 190
Employees 950

Administrations 446
Employees 2,348

Administrations 477
Employees 2,950

Collection rate

Administrations 84%
84%
Employees 78%
78%

Administrations 88%
88%
Employees 81%

Administrations 82%
82%
Employees 83%
83%

General CSI（Administrations）
Administrations）

756 (Note2)

719

728

Employees General
CSI

725 (Note2)

690

714

Property
manager8%

Office facility(space, size,
lighting)
30%

Hardware58%

Software42%
Constructionresponse
14%
Elevator3%

Toilet6%

External facade/
Entrance
11%
Other common
space
8%

Notes:
1 Including 1 central urban retail property
2 General CSI is scored out of 1,000. Only as reference as 1st set of questions were different from
2nd and 3rd

Actions taken after the 3rd CS survey result
Up until 9th period

Hardware♦Construction based on CS
survey♦Establishment of standard
guidelines

Software♦Change/consolidation ofbuilding maintenancecompany

Improvement in both hardware and software are required
From 10th period onwards

Continuous
Continuous improvement
improvement
In
In processprocess ofof establishingestablishingstandard
guidelines
standard guidelines

Maintain/increase
Maintain/increase tenanttenantsatisfaction
satisfaction leading
leading totomaintainmaintain rent
rent level
level and
and
asset
value
asset value

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

17

Management of existing properties—Appropriate responses toEnergy Saving Act
Appropriate responses for new law
9th period

10th period

Apr. 2009

11th period

Nov. 2009

Apr. 2010

Measuring how much energy

Notify the Bureau of Economy,

is used in office/retail buildings※

Trade and Industry（1 year from Apr. 2009）(Planned: by the end of Jul. 2010）

12th period

Jul. 2010

Oct. 2010

Submit regular reports and midlong term plans, appointment ofEnergy management control
officer （By the end of Oct. 2010）

Start construction from 12th
period onwards

Designation ofSpecified
Law Concerning the Rational Use of Energy controls companies using more Business
Operators
than 1,500 kl of oil/year when converted.

Electricity used in buildings held by KRI were 7,612 kl oil/year whenconverted to oil, in office and retail properties within 6 months from Apr.
2009 to Sep. 2009
Other related laws: Act on Promotion of Global Warming Countermeasures,
Ordinance on Environmental Protection

Example: Adaptation of bidding to reduce cost
for air conditioning in the 6th period
Average auction
price (5 Co.)

Construction costs

139

70

50

103

79

0

50

Depreciation

Construction cost・budget

1,600
1,400
1,200

74

26

1,000

Reduction: 39.3%

800

58 12

600

Cost saving of ¥174M

100 150 200 250 300 350 400 450

KDX Nakano-Sakaue Building
KDX Kiba Building
KDX Nogizaka Building(¥M)

Total: ¥443M

101

Total:￥269M

Changes in depreciation and actual construction costs & budget(As of Dec. 14, 2009)

KDX Okachimachi Building
KDX Kayabacho Building

400

(¥M)

200
0
7th
period8th
period9th
period10th
period(Budget)The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

11th
period(Budget)12th
period(Image)18

SECTION 4

Financial Strategies

Stable financial management—diversified maturities andsources of funding
Stable financing through good relationship withfinancial institutions especially mega-banks,
trust banks and Development Bank of Japan

Diversification of debt maturities

Debt financing with an emphasis on
diversifying repayment timings
Amount of debt maturing in each 6 months (as of February 18, 2010)

Breakdown of borrowing providers (Feb. 18, 2010)
Short-term borrowings(¥B)

Long-term borrowings

Inv estment Corporation Bonds

25

Norinchukin Bank
4.4%
Resona Bank
4.7%

20

15

9.0

18.75

Bank of Tokyo
Mitsubishi UFJ
10.7%

11.75
10.19

5

0

0.50
2009
2H

6.60

6.30

0.19

6.22
3.22

2.00
2010
1H

2010
2H

2011
1H

2011
2H

Sumitomo
Mitsui
Banking
Corporation
23.8%

Mitsubishi UFJ
Trust andBanking 7.9%

12.50
10

Mitsui Sumitomo
Insurance
Company 1.1%

2012
1H

2012
2H

2013
1H

5.11
2.68
2013
2H

0.16
2014
1H

2014
2H

5.00
2015
1H

2015
2H

2016
1H

3.0
2016
2H

Development
Bank ofJapan 15.0%

Chuo Mitsui
Trust andBanking
17.0%
Aozora Bank
14.2%

15.4%

Notes:
1
Shows debt amounts that mature in each period2
1H is from Apr. 1 to Sep. 30 and 2H from Oct. 1 to Mar. 31 of the following year and not identical with the fiscal periods of theInvestment Corporation (e.g. 2009 2H is from Oct. 1, 2009 to Mar. 31, 2009)3
Balance of new borrowings (excluding divided repayment amount) during 2009 2H shown in

Credit rating and Investment corporation bonds

Rating agency
Moody’s（As of February 18, 2010）
2010）

Rating
Bonds
Size Interest rate Maturity Maturity dateBa1 （Negative） 1st Bond ￥9.0B
5yrs
2012/3/15
1.74%
10yrs
2017/3/15
2nd Bond ￥3.0B
Japan Credit Rating Agency A （Stable）
2.37%
(JCR)

Flexible fund raising through shelf registration
Summary of
Shelf
Registration

Investment
Corporation

Investment unit
certificate

Bond

Primary

Secondary

Planned issue
amount

￥100B

￥100B

￥15B

Planned issuance
period2 years fromFeb. 2009

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

2 years from 2 years fromMay 2009
May 2009

21

Stable financial management—conservative LTV management and fundraising conditions
Changes in LTV
Maintaining conservative level of leverage

50%

47.0%

45.6%

45%

38.7%

40%

37.5%

35%

41.2%

41.4%

41.1%

7th
period8th
period9th
periodapprox.
41.0%

38.9%

35.3%

30%
1st
period2nd
period3rd
period4th
period5th
period6th
periodAs of Feb. 18,
2010(estimate)

Note: LTV = Total debt / Total assets

FixedFixed-rate debt / Debt balance by maturity period
Proportion of floatingfloating-rate debt vs. fixedfixed-rate debt
(As of February 18, 2010)(As of October 31, 2009)
Short-termborrowings
¥8.5B
8.8%

Floating interest rate debt
¥14.3B 13.9％

Fixed interest rate debt
¥88.88B
86.1%

Debt balance by maturity period

Average interest
rate (Note)

1.84%

Average life

2.0yrs

Proportion of
long-term debt

91.5%

Note: The average interest rate above does not include upfront fees. The
average interest rate including upfront fees is 2.09%. “Fixed interest ratedebt” includes borrowings that were converted to fixed from floating
through interest rate swap

Current
portion ofLong-term
borrowings¥14.5B
15.1%

Long-term borrowings
and Investment
Corporation bonds¥73.2B
76.1%

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

22Appendix

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

23

Stable financial management—Borrowing list
Borrowing list

List of borrowings as of February 18, 2010

Long-term Borrowings

Current portionof long-termborrowings

Short-termborrowings

LenderThe Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (1,000), Mitsubishi UFJ Trust and Banking Corporation (1,000)

Reference：Summary of Covenants on borrowings

Balance
Drawdown date Last repayment date(¥M)
500
2009/2/27
2010/2/26
2,000
2009/4/30
2010/4/30

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,500

2009/10/26

2010/10/26

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (2,500), Mitsubishi UFJ Trust and Banking Corporation (1,000)

3,500

2009/10/30

2010/10/30

Mitsubishi UFJ Trust and Banking Corporation

1,300

2010/1/29

2011/1/29

Total Short-term borrowings
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation (3,750), The Chuo Mitsui Trust and Banking Co., Ltd. (3,750),
Mitsubishi UFJ Trust and Banking Corporation (1,500), Resona Bank, Ltd. (500)

8,800
2,000

2007/4/2

2010/4/2

9,500

2005/8/1

2010/7/31

500

2008/10/31

2010/10/31

3,500

2008/7/31

2011/1/31

2,000

2008/2/29

2011/2/28

1,000

2008/6/30

2011/2/28

The Chuo Mitsui Trust and Banking Co., Ltd.

1,250

2008/9/22

2011/3/22

Aozora Bank, Ltd.

2,000

2008/7/15

2011/3/31

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,000

2008/9/30

2011/3/31

Resona Bank, Ltd.
Sumitomo Mitsui Banking Corporation (1,300), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (800),
Mitsubishi UFJ Trust and Banking Corporation (1,400)
Total Current Portion of Long-term Borrowings

15,500Aozora Bank, Ltd.
Aozora Bank, Ltd.

The Norinchukin Bank

1,500

2007/4/17

2011/4/16

The Chuo Mitsui Trust and Banking Co., Ltd (1,500）, Resona Bank, Ltd. (1,000)
Aozora Bank, Ltd. (1,500), Mitsui Sumitomo Insurance Co., Ltd. (1,000)

2,500
2,500

2009/4/30
2006/5/1

2011/4/28
2011/4/30

Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Banking Corporation (2,200), The Chuo Mitsui Trust and Banking Co., Ltd. (1,000),Resona Bank, Ltd. (300)
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,000

2006/7/14

2011/7/13

3,500

2008/7/31

2011/7/31

1,500

2008/2/29

2011/8/31

The Chuo Mitsui Trust and Banking Co., Ltd.

1,000

2008/9/1

2011/9/1

Sumitomo Mitsui Banking Corporation (3,000), The Chuo Mitsui Trust and Banking Co., Ltd. (2,000)

5,000

2008/3/31

2011/9/30

Aozora Bank, Ltd.
The Chuo Mitsui Trust and Banking Co., Ltd.

3,500
1,000

2009/4/30
2008/5/1

2011/10/31
2011/11/1
2011/11/30

The Norinchukin Bank

2,500

2006/12/1

Sumitomo Mitsui Banking Corporation

2,500

2008/1/10

2012/1/10

Sumitomo Mitsui Banking Corporation490

2009/2/27

2012/2/29 (Note)

The Chuo Mitsui Trust and Banking Co., Ltd.

2,000

2007/4/2

2012/4/2

Aozora Bank, Ltd.

2,000

2009/4/30

2012/4/27

Resona Bank, Ltd.
Development Bank of Japan Inc.

1,500
980

2008/6/30
2009/2/27

2012/6/30
2012/8/31 (Note)

Resona Bank, Ltd.

Before posting collateral
Failure to comply with the following for 2
consecutive periods will result in posting collateral of all assets
・LTV exceeds a certain level
・DSCR falls below a certain level
・LTV=Total liabilities÷Total assets(Total asset value is calculated by the difference
between the appraisal value of each property at
end of each period and book value )・DSCR= (Operating income+Depreciation)÷Interests paid

Entered collateral agreement on Apr. 27, 2009
Add following covenants
In case “LTV of collateralized properties” falls
below a certain level for 2 consecutive periods, thefollowing shall apply(*)
1) formal registration of collateralized properties that were
provisional registered2) posting collateral of all assets (including assets that were notposted as collateral)*LTV of collateralized properties=Total amount of secureddebt÷Total appraisal value of collateralized properties
When “LTV of collateralized properties” exceeds a certain level,
assets that are not posted as collateral may be provided as new
collateral to reduce LTV level＜When selling collateralized properties ＞
・Calculate amount required for repayment of principal amount・Pro rata repayment based on each lender’s share

2009/12/8

2012/12/10

3,000

2008/6/30

2012/12/28

The Chuo Mitsui Trust and Banking Co., Ltd.

1,000

2010/1/13

2013/1/15

3 years

Aozora Bank, Ltd.
Development Bank of Japan Inc.

1,500
3,000

2010/2/18
2006/9/1

2013/2/18
2013/8/31

3 years

Uncollateralized

Sumitomo Mitsui Banking Corporation

1,000

2009/10/26

2013/10/26 (Note)

4 years

25 properties

No. of properties

40 properties

Sumitomo Mitsui Banking Corporation

1,960

2009/10/30

2013/10/30 (Note)

4 years

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation (2,300), Development Bank of Japan Inc. (1,700)
The Chuo Mitsui Trust and Banking Co., Ltd. (1,000), Aozora Bank, Ltd. (500)Development Bank of Japan Inc.

1,200

2010/1/29

2015/1/30 (Note)

5 years

5,500

2010/2/18

2015/2/18 (Note)

5 years¥55.8B （27.3％）

Total Appraisal value（end of 9th period）¥148.1B （72.6％）

5,000

2006/5/1

2016/4/30

Total Long-term Borrowings

66,880Total Borrowings

Note: Repayment Method: Amortization of certain amount every 6 months

91,1803 years

Reference: Summary of collateralized properties（As of Oct. 31, 2009)500

Development Bank of Japan Inc.

Collateralized*4 out of 5 properties acquired during the 10th period were posted as anadditional collateral, and have raised new borrowings of ¥7.0 B.
Notes:
Amounts are rounded to the nearest ¥100M.
Ratio are rounded down to the first decimal place.

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

24

Appraisal values and cap rates as of end of 9th period
(¥M)

(¥M)

9th period
No.

Property nameAcquisition
priceAppraisal
value

Bookvalue

9th periodCR

End ofvsvsvsacquisition 8th period bookvalue 9th period

vs 8thperiodNo.

Property nameAcquisition
priceAppraisal
value

BookvalueCR

End ofvsvsvsacquisition 8th period bookvalue 9th period

vs 8thperiodA 1 KDX Nihonbashi 313 Building

5,940

7,400

6,231

24.6%

-0.1%

18.8%

4.9%

0.0%

A 41 KDX Shinjuku 286 Building

2,300

2,050

2,356

-10.9%-13.1%-13.0%

5.3%

0.2%

A 2 KDX Hirakawacho Building

5,180

5,250

5,198

1.4%

-1.7%

1.0%

4.8%

0.0%

A 42 Karasuma Building

5,400

5,400

5,499

0.0%

-4.9%

-1.8%

5.6%

0.1%

A 3 Higashi-Kayabacho Yuraku Building

4,450

5,560

4,466

24.9%

-4.0%

24.5%

5.1%

0.1%

A 44 KDX Sendai Building

2,100

1,510

2,216

-28.1%-7.9%-31.9%

6.1%

0.1%

A 4 KDX Hatchobori Building

3,680

3,440

3,458

-6.5%

-9.7%

-0.5%

5.1%

0.1%

A 45 KDX Roppongi 228 Building

3,300

2,240

3,452

-32.1%-7.1%-35.1%

4.9%

0.0%

A 5 KDX Nakano-Sakaue Building

2,533

2,400

2,488

-5.3%

-5.1%

-3.6%

5.5%

0.1%

A 46 Hiei Kudan-Kita Building

7,600

7,900

7,636

3.9%

-1.6%

3.4%

4.8%

0.0%

A 6 Harajuku F.F. Building

2,450

2,920

2,476

19.2%

-5.5%

17.9%

5.7%

0.1%

A 47 KDX Shin-Yokohama 381 Building

4,700

3,050

4,868

-35.1%-10.8%-37.4%

5.9%

0.3%

A 7 FIK Minami Aoyama Building

2,270

2,780

2,272

22.5%

-4.5%

22.3%

5.0%

0.1%

A 48 KDX Kawasaki-Ekimae Hon-cho Building

3,760

3,320

3,900

-11.7%

0.6%-14.9%

6.3%

0.2%

A 8 Kanda Kihara Building

1,950

1,870

1,863

-4.1%

-4.1%

0.4%

5.1%

0.1%

A 49 Nissou Dai-17 Building

2,710

1,720

2,690

-36.5%-8.0%-36.1%

5.8%

0.2%

A 9 KDX Shinjuku-Gyoen Building

1,610

2,030

1,581

26.1%

-2.9%

28.3%

5.2%

0.1%

A 50 Ikejiri-Oohashi Building

2,400

1,700

2,492

-29.2%-8.1%-31.8%

6.2%

0.2%

A 12 Portus Center Building

5,570

4,860

4,941

-12.7%

-7.4%

-1.7%

6.4%

0.1%

A 51 KDX Hamacho Nakanohashi Building

2,310

1,950

2,388

-15.6%-3.0%-18.4%

5.6%

0.1%

A 13 KDX Kojimachi Building

5,950

4,420

5,773

-25.7%-14.8%-23.4%

5.0%

0.0%

A 52 KDX Kanda Misaki-cho Building

1,380

1,040

1,392

-24.6%-4.6%-25.3%

5.5%

0.1%

A 14 KDX Funabashi Building

2,252

1,890

2,453

-16.1%-11.7%-23.0%

6.2%

0.0%

A 53 KDX Hakata-Minami Building

4,900

4,180

4,888

-14.7%-6.9%-14.5%

6.5%

0.2%

A 15 KDX Hamacho Building

2,300

2,220

2,276

-3.5%

-16.5%

-2.5%

5.5%

0.0%

A 54 KDX Kitahama Building

2,220

1,740

2,219

-21.6%-3.9%-21.6%

6.0%

0.2%

A 16 Toshin 24 Building

5,300

4,970

5,203

-6.2%

-1.2%

-4.5%

5.7%

0.1%

A 55 Shin-toshin Maruzen Building

2,110

1,680

2,174

-20.4%-12.5%-22.7%

5.5%

0.1%

A 17 Ebisu East 438 Building

4,640

4,280

4,543

-7.8%

-10.6%

-5.8%

5.2%

0.1%

A 56 KDX Jimbocho Building

2,760

2,450

2,947

-11.2%-2.4%-16.9%

5.4%

0.1%

A 18 KDX Omori Building

3,500

3,900

3,452

11.4%

-2.0%

13.0%

5.4%

0.2%

A 57 KDX Gobancho Building

1,951

1,510

2,017

-22.6%-7.4%-25.1%

5.2%

0.0%

A 19 KDX Hamamatsucho Building

3,460

3,510

3,344

1.4%

-7.1%

5.0%

4.8%

0.0%

A 58 KDX Nagoya Sakae Building

7,550

5,100

7,822

-32.5%-15.0%-34.8%

5.2%

0.2%

A 20 KDX Kayabacho Building

2,780

2,870

2,877

3.2%

-5.3%

-0.2%

5.4%

0.0%

A 59 KDX Iwamoto-cho Building

1,864

1,470

1,860

-21.1%-10.9%-21.0%

5.7%

0.1%

A 21 KDX Shinbashi Building

2,690

2,790

2,672

3.7%

-1.4%

4.4%

4.7%

0.1%

A 60 KDX Harumi Building

10,25010,60010,075

3.4%

0.0%

5.2%

4.8%

0.1%

A 22 KDX Shin-Yokohama Building

2,520

2,550

2,470

1.2%

-2.3%

3.2%

5.9%

0.2%

A 61 KDX Hamamatucho Dai-2 Building

A 23 KDX Yotsuya Building

1,950

2,370

1,963

21.5%

0.0%

20.7%

5.6%

0.2%

A

A 24 KDX Minami Semba Dai-1 Building

1,610

1,110

1,518

-31.1%-15.3%-26.9%

5.6%

0.0%

A 25 KDX Minami Semba Dai-2 Building

1,560

1,140

1,424

-26.9%-11.6%-20.0%

5.6%

A 26 KDX Kiba Building

1,580

1,450

1,623

-8.2%

-11.0%-10.7%A 27 KDX Kajicho Building

2,350

2,300

2,435

-2.1%

-6.1%

-5.6%

A 28 KDX Nogizaka Building

1,065

872

1,133

-18.1%-10.1%A 29 KDX Higashi-Shinjuku Building

2,950

3,240

3,199

9.8%

A 30 KDX Nishi-Gotanda Building

4,200

3,710

4,178

-11.7%A 31 KDX Monzen-Nakacho Building

1,400

1,280

1,443

-8.6%

A 32 KDX Shiba-Daimon Building

6,090

5,030

6,312

A 33 KDX Okachimachi Building

2,000

1,830

2,140

A 34 KDX Hon-Atsugi Building

1,305

1,090

A 35 KDX Hachioji Building

1,155

821

A 36 KDX Niigata Building

1,305

A 37 KDX Ochanomizu Building

2,200

2,010

2,269

-8.6%

-5.6%

-11.4%

4.7%

0.0%

197,461

183,217

199,675

-7.2%

-5.9%

-8.2%

5.3%

0.1%

C 1 Frame Jinnan-zaka

9,900

10,30010,017

4.0%

-5.5%

2.8%

4.7%

0.2%

0.0%

C 2 KDX Yoyogi Building

2,479

1,940

2,539

-21.7%-2.0%-23.6%

5.1%

0.0%

5.7%

0.0%

C

12,37912,24012,557

-1.1%

-5.0%

-2.5%

4.8%

0.2%

5.2%

0.2%

B 3 Court Mejiro

1,250

962

1,216

-23.0%-7.5%-20.9%

5.6%

0.1%-23.1%

5.2%

0.0%

B 18 Venus Hibarigaoka

1,800

1,370

1,899

-23.9%-9.3%-27.9%

6.7%

0.0%

-3.6%

1.3%

5.3%

0.0%

B 19 Residence Charmante Tsukishima

5,353

4,420

5,201

-17.4%-6.4%-15.0%

5.5%

0.0%-13.5%-11.2%

5.4%

0.0%

B 25 Court Shin-Okachimachi

878

776

855

-11.6%

-5.3%

-9.3%

5.6%

0.3%

-2.3%

-11.4%

5.6%

0.2%

B 34 Gradito Kawaguchi

1,038

951

1,044

-8.4%

0.2%

-9.0%

5.8%

0.0%

-17.4%-13.7%-20.3%

5.4%

0.0%

B

-8.5%

-4.2%

-14.5%

5.2%

0.2%

1,266

-16.5%-0.9%-14.0%

6.3%

0.1%

1,321

-28.9%-6.8%-37.9%

5.9%

0.1%

824

1,486

-36.9%-2.4%-44.6%

7.3%

0.1%

6,400

6,760

6,711

5.6%

-3.6%

0.7%

4.9%

0.1%

A 38 KDX Nishi-Shinjuku Building

1,500

1,330

1,550

-11.3%-8.3%-14.2%

5.3%

0.0%

A 39 KDX Toranomon Building

4,400

3,620

4,855

-17.7%-10.6%-25.4%

4.6%

0.0%

A 40 Toranomon Toyo Building

9,850

9,910

9,891

0.6%

-1.9%

0.2%

4.8%

0.1%

Office Building Subtotal

Central Urban Retail Subtotal

Residential Subtotal

10,3198,479

10,216-16.9%-6.2%-17.0%

5.8%

0.0%

Total

220,159

203,936

222,449

-7.4%

-5.9%

-8.3%

5.3%

0.1%

Notes:
1. The acquisition prices, appraisal values and book values are all rounded to the nearest ￥M.
All ratios are rounded to the first decimal place
2. Total cap rates for each property type is the weighted average based on acquisition prices

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

25

Appraisal profit/loss of office buildings at the end of 9th period
Historical appraisal profit/loss and ratio of all office buildings（￥M）

Appraisal profit/Loss (Left)

Appraisal profit/loss ratio (right)
30%

20,00015,00020%

10,000
10%

5,000
0

0%
1st
period-5,000

2nd
period3rd
period4th
period5th
period6th
period-10,000

7th
period8th
period9th
period
-8.3%-15,000-20,000

-10%
-20%
-30%

Appraisal profit/loss ratio at the endof 9th period (by area)

Downside factors for appraisal values of office buildings

9th period

6th→7th

7th→8th

8th→9thChange in cap rates

+0.2%

+0.2%

+0.1%

No. of properties

58 properties

Change of expected rent from appraisal value

+0.4%

-4.5%

-4.8%

Central Tokyo-3.2％

Other Tokyo Metropolitan Area

-15.0％

Other Regional Areas-19.2％

Appraisal profit/loss ratio of all
office buildings-8.3％

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

26

KRI unitholders
Changes in investment units by unitholders

Top 10 unitholders (as of Oct. 31, 2009)

Individuals and others

Financial inst. (incl. securities)

Other domestic co.

Foreign co. and individuals# of units
held(unit)
16,569

8.28%

NikkoCiti Trust and Banking Co., Ltd. (Investment Trust Acct.)

15,834

7.91%

Trust and Custody Services Bank, Ltd. (Securities Investment Trust Acct.)

14,382

7.19%

Goldman Sachs International

13,881

6.94%

The Nomura Trust and Banking Co., Ltd. (Investment Trust Acct.)

10,271

5.13%

The Master Trust Bank of Japan, Ltd. (Trust Acct.)

9,510

4.75%

Merrill Lynch Japan Securities Co., Ltd

6,502

3.25%

Name
Japan Trustee Services Bank, Ltd. (Trust Acct.)

1st

22.7%

2nd
3rd

49.0%

15.6%

12.4%

47.0%

10.6%

8.5%
6.8%

48.0%

4th 6.8%

6.4%

46.5%

16.0%
29.0%

34.6%
40.3%

5th

5.7%

48.4%

5.1%

40.8%

6th

5.4%

49.4%

5.0%

40.2%

7th

8.1%

45.6%

5.4%

41.0%

8th

10.8%

9th

8.2%
0%

1.3%

45.4%

1.2%

47.5%

42.5%
43.1%
20%

40%

60%

Individual and Others

5,880

100%

# of units
held(unit)

Ratio
(%)

94.7%

16,301

8.2%

Financial Inst. (Incl. Securities co.)

49

0.8%

86,234

43.1%

Other Domestic Co.

94

1.5%

2,461

1.2%

Foreign Co. and Individuals
T otalNote: Rounded to the first decimal place

2.62%

5,000

2.50%

4,188

2.09%

The Bank of NY Treaty JASDEC AccountType of unitholders (as of Oct. 31, 2009)
Ratio
(%)

5,258

JP Morgan Chase Oppenheimer JASDEC Lending AccountTotal
Note: Ratios are rounded down to the second decimal place

Note: Rounded to the first decimal place# ofunitholder

Morgan Stanley & Company Inc.

101,395 50.69%(Reference) Reporting of major unitholders

80%

187

3.0%

95,004

47.5%

6,210

100.0%

200,000

100.0%(%)

Name

Submitted on

Nomura Securities Co., Ltd.
Nomura Asset Management Co., Ltd.
NOMURA INTERNATIONAL PLC
Nomura Capital Markets plc
NOMURA SECURITIES INTERNATIONAL, Inc．
Nomura Securities Co., Ltd.
The Sumitomo Trust and Banking Co., Ltd
Nikko Asset Management Co., Ltd
Fidelity Investments Japan Limited
Fidelity Investments Japan Limited
FMR LLCING Clarion Real Estate Securities LLC

2009/11/19

Mizuho Asset Management Co., Ltd
Mizuho Asset Management Co., Ltd
Shinko Investment Trust Management Co., Ltd
Tower Investment Management Co., Ltd.

2009/10/22

2009/10/21
2009/11/6

2009/8/4

2009/11/19

Notes:
1 Repoerts submitted from the PO on 2007/5/22 to 2009/11/19(excluding the PO on 2009/11/16)
2 Companies holding more than 5% of 200,000 units
3 Rounded to the second decimal place
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

# of units
held (unit)(%)

17,25815,089
2,147
137
0
-115
16,046
16,046
11,264
9,008
2,256
10,869

8.63%
7.54%
1.07%
0.07%
0.00%
-0.06%
8.02%
8.02%
5.63%
4.50%
1.13%
5.43%

10,4358,354
2,081
10,207

5.22%
4.18%
1.04%
5.10%

27

Disclosure and IR activities
Domestic investors

Debt investors

Investors

・Same day disclosure on English website(All press release and Kessan Tanshin
provided in English on the same day as
the domestic disclosure )・Publication through WIRETSE compliant disclosure：TDnet and press release

Ongoing disclosure

Financial Report(1) Proactive disclosure by utilizing KRI website
http://www.kdx-reit.com

Web disclosure

International investors

Disclosure via English website
http://www.kdx-reit.com/eng/(2) Website based IR
Video streaming of investor presentation (Website)

Accounting-related
disclosureVideo streaming of Investor presentation
in English (website)

Asset management report (sent to existing investors)

English annual report

Hosting/participation inbriefing sessions
Hosting of one-on-one
meetings

Investor presentation(3) Retail investors briefing
One-on-one meetings(Debt IR)

One-on-one meeting(Reference)
Number of Investor meetings

IR activities for individual investors(including conference calls)
8th Period
Domestic institutional investors

73

Domestic regional institutions

10

International investors (Europe)

7

International investors (US)International investors (Other)
Total

One-on-one meeting(1) Disclosure using KRI website
Website access data
Main Items(2) IR using KRI website
Posting articles on QUICK money life(3) Participation in the seminar forindividual investors
Hosted by JAPAN-REIT / IBRC Inc.

9th period

List of portfolio

11,243Press release

11,06616Disclosure materials

8,686

31

Updated information

7,331

137 calls

DPU･Earnings results

6,872

Top page

5,226

満足

Occupancy rate

4,622

161 Participants

Debt

2,519

English website

2,035

Total access

59,510The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

(Held on Jul. 30, 2009)28

Unit price performance / transaction volume since IPO
Kenedix Realty Investment Corporation (KRI) price/volume performance

Highest price (trading price): 988,000 (2007/5/31)
Lowest price (trading price): 100,300（2008/10/20）
As of Dec.1, 2009

Volume (Unit)

Price (JPY)20,0001,000,000

Follow -on price\ 873,180
Follow -on price\ 593,096

7,000

900,000

800,000
6,000
Listin gprice\ 580,000

700,000

5,000
600,000
Follow -on price\ 252,200

4,000

500,000
3,000
400,000

2,000
300,000

1,000

0
05/7/21200,000

100,000
05/12/15

06/5/1606/10/5

07/3/6

07/7/31
Volume07/12/25

08/5/2708/10/20

09/3/19

Closing price

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

09/8/14(As of Nov. 30, 2009)29

November

Offering Summary
2005 IPO
Domestic IPO
No of units offered2006 PO
Global offering

2007 PO
Global offering

Domestic offering

Domestic Offering: 75,000 units

Domestic Offering: 50,370 units

Domestic Offering:26,710 units

Third party allotment: 3,970 units

Global Offering: 23,290 units

Global Offering:14,190 units

Third party allotment:: 3,970 units

Third party allotment:2,100 units

Total

78,970 units

Total
Over allotment units

43,000 units

3,970 units

2,100 units

1,450 units

9,770 units

3,980 units

52 units

1,200 units

Others: 6,000 units

No. of units post
offering

Total

Domestic Offering: 33,550 units

3,970 units

Kenedix, Inc.: 3,770 units

Units placed

77,630 units

2009 PO

Kenedix, Inc.: 3,880 units
Kenedix REITManagement, Inc.: 100 units

79,370 units

Kenedix REITManagement, Inc.: 52 units

157,000 units

Kenedix REITManagement, Inc.: 1,200units

233,550 units

200,000 units

Pricing dateJul.11, 2005

Apr.19, 2006

May 14, 2007

Nov.9, 2009

Delivery dateJul.21, 2005

May 2, 2006

May 23, 2007

Nov.17, 2009

Discount rate

-

2.0%

2.0%

3.0%

Price

¥ 580,000¥ 593,096¥ 873,180¥ 252,200

Size¥ 45.8B¥ 46.0B¥ 37.5B¥ 8.5B

UBS

UBS

UBS

Nomura Securities

Nomura Securities

Nomura Securities

Bookrunner

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Nomura Securities

30

Management of existing properties
Maintain/improve occupancy through proactive leasing activities Tenant diversification
Rise in occupancy of new or acquiring building with low occupancy

End-tenants for office buildings (9th period)

100%

Tenant breakdown by sector

80%

Individuals 26
4.5%

KDX
Toranomon
Building

60%
KDX NishiGotanda
Building

40%
20%

Official (Others) 2

KDX Jimbocho
Building

KDX Harumi
Building

0.3%

KDX Nagoya Sakae
Building

39.5%

/8
09

0

/6
09

4th period 5th period 6th period 7th period 8th period 9th period

5.3％
5.3％

5.5
5.5％

Real estate 21
3.6%

Change in NOI yields (by type of property, annualized)

5.6％
5.6％

Telecom &transportation 17
2.9%

Maximizing the mid-long term real estate profits

5.5％
5.5％

Wholesale,retail & food 141
24.3%

/1

/4
09

09

/2

2
/1

09

0

/8
08

08

/6
08

/1

/4
08

08

/2

2
/1

08

0

/8
07

/1

/6
07

07

/4
07

07

/2

2

07

/1

Manufactures 79
13.6%

Service 229

0%06

Mining 1
0.2%
Constructions 28
4.8%

Office buildings

5.3％
5.3％

5.2％
5.2％

Central urban
retails

5.2％
5.2％

5.1％
5.1％

4.3％
4.3％

4.8％
4.8％

4.7％
4.7％

4.6％
4.6％

Residentials

5.4
5.4％

5.3
5.3％

5.3％
5.3％

5.3％
5.3％

5.2％
5.2％

5.0％
5.0％

Total

5.3％
5.3％

5.4％
5.4％

5.5％
5.5％

5.3％
5.3％

5.4
5.4％

5.2％
5.2％

Financial &insurance 36
6.2%

No. of End tenants(No. of properties)（58 properties）

Ratio of largest end-tenant

2.2％

Ratio of Top 3

5.6％

580

Note:
The ratio of top end-tenants within the entire portfolio(based on leased area)

Notes:
Figures after property and city planning taxes for the periods
Ratios are rounded to the first decimal place
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

31

Management of existing properties—maintaining
occupancy through proactive leasing activities
A-58 KDX Nagoya Sakae Building
Floor

Type

Leasable
floor area

Leasedfloor area

11

Office592.91m2 592.91m2

10Office674.57m2

0.00m2

9

Office674.57m2

0.00m2

8

Office674.57m2 674.57m2

Financial, insurance company /Industrial company

7

Office674.57m2 674.57m2

Industrial company

6

Office674.57m2 674.57m2

Industrial company

5

Office674.57m2 674.57m2

Medical equipment wholesale company

4

Office674.57m2 471.96m2

Insurance company/Medical equipment wholesalecompany/Service company

3

Office674.57m2 440.04m2

Vacant2

Office519.58m2 391.60m2

1

Retail414.07m2 414.07m2♦

Location: 4-chome Sakae,
Naka-ku, Nagoya-shi♦

GFA : 9,594.00m2♦

Year built: April 2009♦

Number of stories: 11F♦

Acquisition price:
Land ¥ 4,000M
Building ¥ 3,550M♦

Acquisition date：
Land Apr. 25, 2008
Building Jul. 1, 2009

Tenants
Auto related service company

VacantVacantReal estate company
Real estate company

Vacant2 Restaurants/ 2 Shops

Leasing status (occupancy ratio)
(%)
80

72.3%

66.0%

70

61.8%

60
50
40
30
20

30.4%

Proactive
leasing
activities

18.0%

10
Jul. 1,2009(Acquisitiondate)

End of Jul.

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

End of Aug.

End of Sep.

End of Oct.

32

Emphasis on mid-sized office buildings in Tokyo Metropolitan Area
（As of February 18, 2010）

Office portfolio: 63 properties, with a total acquisition price of ¥213.0B

By acquisition price

Acquisition price(Other Regional Areas）

Niigata
1 property ¥1.3B

Composition of office portfolio

Tokyo’s 23 wards
45 properties ¥156.0B

Acquisition price(Tokyo Metropolitan
Area)

Central Tokyo1
36 properties¥132.7B¥7.5B-10B(3 properties)¥25.0B

Other 18 wards
9 properties¥23.3B

Miyagi Prefecture
1 property ¥2.1B

Fukuoka
1 property ¥4.9B¥2.5B-5B(20 properties)¥69.6BTokyo¥2.5B - ¥ 7.5B accounts for 57.3%

Other
Regional
Areas
15.1%

Kanagawa
7 properties ¥21.3B

Note:
The amounts above are rounded to the nearest ￥100M

Other
Other
Tokyo
Tokyo
Metropolitan
Metropoli
Area
tan Area
22.5%
23.3%

Central
Tokyo
62.2%

Aichi
1 property ¥7.5B
Hachioji, Tokyo
1 property ¥1.1B# ofproperties

Notes:¥1B-2.5B(30 properties)¥55.5B¥5B-7.5B(9 properties)¥52.6B

Greater Osaka area
5 properties ¥16.3B

Chiba
1 property ¥2.2B

Over \10B(1 property)¥10.2B

Acquisition
price
(¥B)

Ratio
（%）

1 Central Tokyo: Chiyoda, Chuo, Minato, Shibuya and Shinjuku wards

Tokyo Metropolitan Area

54

180.8

84.9

2 Acquisition price are rounded to the nearest ¥100M. Ratios indicate the total acquisition price forproperties in each area in proportion to the total acquisition price for all properties combined and arerounded down to the first decimal place

Other Regional Areas

9

32.2

15.1

Total

63

213.0

100.0

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

33

AppendixⅡ

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

34

Portfolio overview (office buildings)■Office buildings (63 properties)

Toky oMetropolitan
Area

（¥M）

Year
build²

Occupancy
at end of 9th
p er iod（ %）³

Acquisition
price
（¥M）

1

Year
build²

Occupancy
at end of 9th
period（%）³

No .

Name

Lo catio n

No.

Name

A-60

KDX Harumi Bui lding

Chuo-ward, Tokyo

10, 250

Feb-2008

100.0%

A-8

Kanda Kihara Building

Chiyoda-ward, Tokyo

1,950

May-1993

100.0%

A-40

Torano mon Toyo Build ing

Minato-ward, Tokyo

9, 850Aug-1962

95.4%

A-23

KDX Yotsuya Building

Shinjuku-ward, Tokyo

1,950

Oct-1989

100.0%

A-46

Hiei K udan-Kita Building

Chiyoda-ward, Tokyo

7, 600Mar-1988

100.0%A-59

KDX Iwamoto-cho Building

Chiyoda-ward, Tokyo

1,864

Mar-2008

75.0%

A-37

KDX Ochanom izu Building

Chiyoda-ward, Tokyo

6, 400Aug-1982

100.0%A-9

KDX Shinjuku-Gyoen Building

Shinjuku-ward, Tokyo

1,610

Jun-1992

100.0%A-26

KDX Kiba Building

Koto-ward, Tokyo

1,580

Oct-1992

100.0%A-32

KDX Shi ba-Daimo n Buildi ng

Minato-ward, Tokyo

6, 090Jul-1986

100.0%A-38

KDX Nishi-Shinjuku Building

Shinjuku-ward, Tokyo

1,500

Oct-1992

100.0%A-13

KDX Kojimachi Building

Chiyoda-ward, Tokyo

5, 950May -1994

86.7%

A-31

KDX Monzen-Nakacho Building

Koto-ward, Tokyo

1,400

Sep-1986

100.0%

Type

Area

Tokyo
Metropolitan
Area

Location

A-1

KDX Niho nbashi 313 Buil dingChuo-ward, Tokyo

5, 940

Apr-1974

100.0%A-52

KDX Kanda Misaki-cho Building

Chiyoda-ward, Tokyo

1,380

Oct-1992

100.0%

A-16

Toshin 24 Buil ding

Yokohama, Kanagawa

5, 300

Sep-1984

93.3%

A-34

KDX Hon-Atsugi Building

Atsugi, Kanagawa

1,305

May-1995

100.0%A-2

KDX Hirakawacho B uild ing

Chiyoda-ward, Tokyo

5, 180Mar-1988

100.0%A-35

KDX Hachioji Building

Hachioji, Tokyo

1,155

Dec-1985

85.6%

A-47

KDX Shi n-Yo ko ham a 381 Buil ding

Yokohama, Kanagawa

4, 700Mar-1988

100.0%A-28

KDX Nogizaka Building

Minato-ward, Tokyo

1,065

May-1991

100.0%

A-17

Ebi su East 438 Buil din g

Shibuya-ward, Toky o4, 640Jan-1992

100.0%A-58

KDX Nagoya Sakae Building

Nagoya, Aichi

7,550

Jun-2009

72.3%

A-12

Portus Center Building

Sakai, Osaka

5,570

Sep-1993

88.5%

A-42

Karasuma Building

Kyoto, Kyoto

5,400

Oct-1982

86.1%

A-53

KDX Hakata-Minami Building

Fukuoka, Fukuoka

4,900

Jun-1973

94.4%

A-54

KDX Kitahama Building

Osaka, Osaka

2,220

Jul-1994

96.4%

A-44

KDX Sendai Building

Sendai, Miyagi

2,100

Feb-1984

96.6%

A-24

KDX Minami Semba Dai-1 Building

Osaka, Osaka

1,610

Mar-1993

84.4%

A-25

KDX Minami Semba Dai-2 Building

Osaka, Osaka

1,560

Sep-1993

82.1%

A-36

KDX Niigata Building

Niigata, Niigata

1,305

Jul-1983

62.2%

A-3

Higashi-Kayab acho Yur aku Build ing

Chuo-ward, Tokyo

4, 450Jan-1987

A-39

KDX Tor ano mon Buil dingMinato-ward, Tokyo

4, 400

Apr-1988

89.3%

A-30

KDX Nishi-Gotanda Bui lding

Shinagawa-ward, T ok yo

4, 200Nov-1992

100.0%A-48

KDX Kawasaki-Ekim ae H on-ch o
Build ing

Kawas ak i, Kanagawa

3, 760Feb-1985

100.0%A-4

KDX Hatcho bori Building

Chuo-ward, Tokyo

3, 680Jun-1993

93.1%

A-18

KDX Om ori Building

Ota-ward, Tokyo

3, 500

Oct-1990

100.0%A-19

KDX Hamamatsucho Building

Minato-ward, Tokyo

3, 460

Sep-1999

100.0%A-45

KDX Ropp ongi 228 Build ing

Minato-ward, Tokyo

3, 300

Apr-1989

52.4%

A-29

KDX Higashi-Shinj uku Bui lding

Shinjuku-ward, Tokyo

2, 950Jan-1990

100.0%A-20

KDX Kayabacho Bu ild ing

Chuo-ward, Tokyo

2, 780

Oct-1987

100.0%A-56

KDX Jimb ocho Bui lding

Chiyoda-ward, Tokyo

2, 760May -1994

100.0%

Office building

Area

1

100.0%

A-49

Nisso u Dai-17 Building

Yokohama, Kanagawa

2, 710Jul-1991

100.0%A-21

KDX Shi nbashi B uild ing

Minato-ward, Tokyo

2, 690Feb-1992

100.0%A-5

KDX Nakano-Sakaue Building

Nakano-ward, Tokyo

2, 533Aug-1992

91.3%

A-22

KDX Shi n-Yo ko ham a Buildi ng

Yokohama, Kanagawa

2, 520

Sep-1990

93.1%

A-6

Har ajuku F.F. Building

Shibuya-ward, Toky o2, 450Nov-1985

100.0%

A-50

Ikejiri -Oohashi Building

Meguro-ward, Toky o

2, 400

Sep-1988

91.3%

A-27

KDX Kajicho Buil ding

Chiyoda-ward, Tokyo

2, 350Mar-1990

94.3%

A-51

KDX Hamach o Nakanohash i Buildi ng

Chuo-ward, Tokyo2, 310

Sep-1988

100.0%A-15

KDX Hamach o Bui lding

Chuo-ward, Tokyo2, 300

Sep-1993

100.0%A-41

KDX Shi njuku 286 Building

Shinjuku-ward, Tokyo2, 300Aug-1989

100.0%A-7

FIK Minami Aoyam a Buildin g

Minato-ward, Tokyo

2, 270Nov-1988

100.0%A-14

KDX Funabashi B uild ing

F unabas hi, Chiba

2, 252

Apr-1989

100.0%A-61

KDX Hamamatsucho Dai-2 Bu ild ing

Minato-ward, Tokyo2, 200

Apr-1992

100.0%

A-55

Shi n-to sh in Maruz en Buil ding

Shinjuku-ward, Tokyo

2, 110Jul-1990

100.0%A-33

KDX Okachimachi Building

T ait o-ward, T ok yo

2, 000Jun-1988

100.0%A-57

KDX Go bancho Bui lding

Chiyoda-ward, Tokyo

1, 951

Aug-2000

85.7%

Other
Regional
Areas

94.4%

Office building (58 properties)■Office buildings acquired in the 10th period
Acquisi tion
T yp eOffice bu ild ing

Office bu ild ing

T yp eAcquisition
p rice（As of February 18, 2010）

Ar ea

No .

Name

Lo catio n

p riceYear

Occupancy

1

bui ld²

ratio （%）

（¥M）

A-62

Koishikaw a TG Bui ldi ng

Bunk yo-ward, Tokyo

3, 080No v-198 9-

Toky oA-63

Gotanda T G Bui ldi ng

Shinagawa-ward, T ok yo

2, 200

Apr-1988-

Metropolit an
Area

A-64

KDX Niho nbashi 216 Building
KDX Shi n-Yo ko ham a 381 Building

Chuo-ward, Tokyo

2, 110

Oct-2006-

Yokohama, Kanagawa

2, 000

Apr-2009-

Shinjuku-ward, Tokyo

6, 800May -1993

-

A-65
A-66

An nex T ower
Pacific Marks Ni shi -Shi njuku

O ffi ce buil ding (63 pro perties) Sub total

213, 071 Avg. 20.2 yrs―

Notes:
1 Acquisition price is the purchase price for trust beneficiary interests etc. acquired by the Investment
Corporation
2 Year built is the date of construction completion recorded in the land register. Average age subtotal is shownas the weighted-average portfolio age based upon acquisition prices with a base date of Feb.18, 2010, and isrounded down to the nearest first decimal place. The weighted- average age of the 70 properties held as of
Feb.18, 2010 is 19.1 years.
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to the first decimal place.
Average occupancy ratio of 65 properties (excluding 5 properties acquired in the 10th period) held as of Oct.
31, 2009 was 94.7%

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

35

Portfolio overview (central urban retail / residential properties)（As of February.18, 2010）■Central urban retail properties (2 properties)
Area

No.

Name

CentralUrban
RetailAcquisition
Type

Location

Tokyo
Metropolitan
Area

C-1

Frame Jinnan-zaka

Shibuya-ward, TokyoC-2

KDX Yoyogi Building

Shibuya-ward, Tokyo

Central Urban Retail (2 properties) Subtotal

price （¥M）1Year
build²Mar-2005

93.6%

2,479

Aug-1991

100.0%

12,379Avg. 7.0 years

94.9%

9,900

■Residential properties (5 properties)
Acquisition

Residential

Type

Area

Tokyo
Metropolitan
Area

Other
Regional
Areas

No.

Name

Location

Occupancy
at end of 9th
period（%）³

price （¥M）1Year
build²

Occupancy
at end of 9th
period（%）³

B-19

Residence Charmante Tsukishima Chuo-ward, Tokyo

5,353

Jan-2004

100.0%

B-3

Court Mejiro

Shinjuku-ward, Tokyo

1,250

Mar-1997

85.3%

B-34

Gradito Kawaguchi

Kawaguchi, Saitama

1,038

Feb-2006

100.0%

B-25

Court Shin-Okachimachi

Taito-ward, Tokyo878

Oct-2005

88.5%

B-18

Venus Hibarigaoka

Sapporo, Hokkaido

1,800

Mar-1989

96.5%

10,319Avg. 8.2 years

96.4%

Residential (5 properties) Subtotal

Notes:
1 Acquisition price is the purchase price for trust beneficiary interests etc. acquired by the Investment Corporation
2 Year built is the date of construction completion recorded in the land register. Subtotal is shown as weighted-average portfolio
age based upon acquisition price with a base date of Dec.14, 2009 (rounded down to the nearest first decimal place)
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to the first decimal place. Ratios arecalculated as of Oct. 31, 2009

■Properties sold during the 9th period (2 ｒesidential properties)
Area

No.

Residential

Acquisition
Type

Name

Location

Tokyo
Metropolitan
area

B-4

Apartments Motoazabu

Minato-ward, Tokyo

B-5

Apartments Wakamatsu-Kawada

Shinjuku-ward, Tokyo

Sales price(¥M)

Sales Date

1,210

1,052

Jun-2009

1,180

930

Aug-2009

price （¥M）1

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

36

(Reference data 1) Office building market environment
1．Breakdown of offices based on the number of employees (Tokyo)
Tokyo)

30-99
employees
5.0%

100 employees and above
1.6%

10-29
employees
15.7%

More than 3,000 tsubo
5.0%

Potentially strong
demand for mid-sized
office building bytenants

Less than
500 tsubo
66.4%

1-9
employees
77.7%

Source: Survey conducted by CB Richard Ellis Research Institute based on KRI’s request “Macro market
survey of Tokyo’s central 5 wards” (as of Mar. 31, 2007)
Note:
The above data covers rental office buildings located in Tokyo’s central 5 wards that weresurveyed by CB Richard Ellis Research Institute. The above data may not include the data of allproperties in the said 5 wards.

Source: KDRM, based on Tokyo office statistics report as of 2006 (MPHPT Statistics Bureau)

4. 23 wards of Tokyo: rent levels for large buildings and mediummediumsized buildings.
buildings.

3. Changes in the offered rent and vacancy ratio in Central TokyoTokyo
24,000Offered rent(%)
9

Vacancy ratio

8.12

Monthly data
6.79 6.96

6.10
18,00016,00014,000

5.60

7.25

7.57 7.57 7.62

7.76 7.98

6.05

4.72 4.93

4.22

(%)
110

8

22,00020,000500-3,000 tsubo
28.6%

Broad stock of mid-sized
office buildings

Ratio of offices with 1-29
employees: 93.4%(¥/Tsubo)

2．Breakdown of office buildings by GFA (tsubo(tsubo))7
6100

Rent for medium-sizedbuilding is less volatile
than large building

Large building
Medium sized building

5
4

90

3
2.89 2.65

12,000

2

80

1
0

20
03

/1
20 2
04
/1
20 2
05
/1
20 2
06
/1
20 2
07
/1
20 2
08
/1
2
20
09
/1
20
09
/2
20
09
/3
20
09
/4
20
09
/5
20
09
/6
20
09
/7
20
09
/8
20
09
/
20 9
09
/1
20 0
09
/1
1

10,000Source: Miki Shoji “Latest Office Building Markets in Tokyo’s central 5 wards” (the latest values as of
2009/11)
Note:
Survey covers buildings with more than 100 tsubo 5 central wards in Tokyo (Chiyoda, Chuo,
Minato, Shinjuku, Shibuya)

70
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Created by Kenedix based on the data complied by CBRE (the latest values as of 2009/9)
Note:
Large building is a building with a gross floor area of 3,000 tsubo or more, while medium-sizedbuilding is a building with a gross floor area of 1,000 to 3,000 tsubo

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

37

(Reference data2) Market environment for office buildings
1. 23 wards of Tokyo: rent levels for large buildings and mediummediumsized buildings(¥1,000/Tsubo)

2. Cap rates of properties in Tokyo and local cities
(%)
10.0

30
Large building

Tokyo

Medium sized building

Osaka

NagoyaFukuoka

8.0

25

6.5%
6.2%
6.0%

6.0

¥21,200

20

4.5%

4.0

¥16,800

15
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

2.0
2001/4

2003/4

2005/4

2007/4

2009/4

Source: Created by Kenedix based on the data complied by CBRE (the latest values as of 2009/9)
Note:
Large building is a building with a gross floor area of 3,000 tsubo or more, while medium-sizedbuilding is a building with a gross floor area of 1,000 to 3,000 tsubo

Source: Created by Kenedix based on the data complied by Japan Real Estate Institute （as of 2009/10）
Notes: 1 Expected cap rates based on direct capitalization method for A class buildings built within 5 years
2 Expected cap rates for properties in the Marunouchi and Otemachi areas

3. Changes in rent levels by region

4. Changes in vacancy ratios by region(¥1,000/Tsubo)

(%)
16.0

25
Tokyo

Osaka

NagoyaFukuoka

14.0

20¥19,500

15¥12,500¥11,300¥9,800

10

5
2002

2003

2004

2005

2006

2007

2008

2009

Source: Created by Kenedix based on the data complied by Miki Shoji (the latest values as of 2009/10)
Note:
Targeting the properties with a gross floor area of 100 tsubo or more in 5 wards of Tokyo(Chiyoda, Chuo, Minato, Shinjuku, and Shibuya)

Tokyo

Osaka

Nagoya15.0%

Fukuoka

12.0

11.9%

10.0

10.1%

8.0

7.8%

6.0
4.0
2.0
2002

2003

2004

2005

2006

2007

2008

2009

Source: Created by Kenedix based on the data complied by Miki Shoji (the latest values as of 2009/10)
Note:
Targeting the properties with a gross floor area of 100 tsubo or more in 5 wards of Tokyo(Chiyoda, Chuo, Minato, Shinjuku, and Shibuya)

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

38

Summary financials for 9th period — Income Statement■Comparison between 9th period (to Oct. 2009)and 8th period (Apr. 2009)
8th period

Rental and other operationg revenues
Rental revenues
Common area charges
OthersParking space rental revenues
Utility charge reimbursements
Miscellaneous
Total rental and other operating
revenues (A)Profit on sale etc.
Operating revenues
Property management fee
Utilities
Taxes
Repairs and maintenance cost
Others (*1)
Depreciation
Total property-related expence B
Rental business profit（A－B）
Net operating income（NOI）
Loss on disposal of real estate
Asset management fee
Others (*2)
Operating expenses
Operating income
Non operating income
Interest expense
Investment corporation bonds interest
Financing related expense
Amortization of bond issuance costs
Amortization of unit issuance costs
Amortization of organization costs
Other non-operating expenses
Non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Net income
Retained earnings at the beginning of period
Retained earnings at the end of period

9th period

2008/11/1

2009/5/1

2009/4/30

2009/10/31

Difference

(\M)

(\M)

(\M)

7,232
5,985
1,246
971
241
559
170

6,906
5,711
1,195
1,015
231
617
166

▲326
▲274 Property sale, longer vacancy period, etc.
▲51 Property sale, longer vacancy period, etc.
44▲1058 Due to seasonal variability
▲4

8,204

7,921

▲283

8,204
799
578
494
138
163
1,429
3,603
4,600
6,030
492
434
210
4,740
3,463
11
745
113
107
5
41
5
21
1,039
2,435
2,435
0
2,434
0
2,434

7,921
764
529
536
171
199
1,451
3,652
4,269
5,721
440
423
192
4,708
3,213
5
793
114
147
5
23
5
25
1,116
2,103
2,103
1
2,102
0
2,102

▲282
▲35
▲49
42
33
36
22
49
▲331
▲309
▲52
▲11
▲18
▲32
▲250
▲6
48
1
40
▲18
4
77
▲332
▲332
1
▲332
▲332

Note

BM cost reduction
Utility cost reduction
Increase in taxes due to property acquisition in 2008
Repairs and maintenance costloss on retirement, etc.
Acquistion of KDX Nagoya Sakae Building

Decrease in profit
Decrease in fees paid

Increase in interest
Increase in upfront fees
Amortization of PO in 2006

*1. Other expenses: Insurance, trust fee etc.
*2. Other operating expenses: Directors’ compensation, asset custody fees, administrative fees, audit fees
Numbers showing differences is rounded

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

39

Summary financials for 9th period —balance sheet and cash
flow statement
Current assets
Cash and bank deposits
Entrusted deposits
Other current assets
Fixed assets
Property plant and equipment
Buildings
Land
Buildings in trust
Lands in trust
Intangible assets
Ground leasehold
Right of using water facilities
Investment and other assets
Leasehold and security deposit
Long-term prepaid expenses
Deferred income tax asset
Deferred assets
Organization costs
Corporate bond issuance costs
Unit issuance costs
Total asset
Current liabilities
Trade and other payables
Short-term debt
Other account payables
Rents in advance
OthersFixed liabilities
Corporate bonds
Long-term debt
Leasehold and security deposit received
Security deposit received in trust
Derivative liability
Liabilities
Total unitholders' capital
Retained earnings
Unrealized gain from deferred hedge transactions
Equities
Total liabilities and unitholders' equity

8th period
9th period
As of Apr. 30, 2009 As of Oct. 31, 2009
(%)
(%)
（\M）
（\M）
15,941
6.7
13,289
5.6
9,981
7,256
5,626
5,613
333
419
222,699 93.3
222,962 94.3
221,895
222,162
10,59014,062
29,104
29,10457,47555,772
124,725
123,222
286
286
285
285
1
1
517
512
11
11
498
494
6
5
103
0.2
68
0.0
10
5
45
39
47
23
238,745 100.0
236,320 100.0
21,2738.9
304
19,000
310
1,173
484
90,073 37.7
12,00067,750
1,536
8,770
16
111,346 46.6
124,9732,434▲ 10
127,398 53.4
238,745 100.0

26,290 11.1
288
24,500
181
1,133
186
82,963 35.1
12,00060,720
1,624
8,604
14
109,253 46.2
124,9732,102▲8
127,067 53.8
236,320 100.0♦ Cash and bank deposits: ▲￥2,724M（Acquisition of KDX Nagoya Sakae Building using cash on hands）♦

Property, plant and equipment:+￥267M（Acquisition of KDX Nagoya Sakae Building, sales of 2 residential properties)

Cash flow statement

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

8th period
9th period
As of Apr. 30, 2009 As of Oct. 31, 2009
（\M）
（\M）
6,961
5,415
▲1,831▲4,204▲3,121▲3,964
2,007▲2,753
11,703
13,711
13,711
10,957

Valuation
8th period

9th period

2009/4

2009/10￥636,990￥ 635,335

LTV at end of period

41.4%

41.1%

Unitholders’ equity to total
assets

53.4%

53.8%

67

65

250,364.42㎡

254,225.04㎡

95.7%

94.7%

Difference
Unitholders’ equity pershare of common stocks

Number of properties at
end of period
Total leasable floor
Occupancy ratio at end of
periodNote▲￥1,655▲0.3% Interest bearing debt▲￥1,530M+0.4% Acquisition: KDX Nagoya Sakae▲2 Building
Sales: 2 residential properties▲3,860.62㎡ ▲1.5%

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Office building: 94.4%▲1.0% Central urban retail: 94.9%
Residential: 96.4%

40

Change in shareholders of AM company
Change in shareholders of Kenedix REIT Management

Structure of the Investment Corporation

Shareholders before change (as of Dec. 14, 2009)
No. ofShares（％）

2-2-9 Shimbashi, Minato-ku,
Tokyo

5,805

90%

2-5-1 Kita-Aoyama, Minato-ku,
Tokyo

645

Shareholders

Address

Kenedix, Inc
ITOCHU Ｃorporation

Unitholders

Total

-

Investment
Kenedix Realty Investment Corporation

10%

6,450

100%

No. ofShares（％）

Entrust asset
management

Shareholders after change (as of Dec. 22, 2009)
Shareholders

Address

Kenedix AssetManagement, Inc

2-2-9 Shimbashi, Minato-ku,
Tokyo

5,805

90%

ITOCHU Ｃorporation

2-5-1 Kita-Aoyama, Minato-ku,
Tokyo

645

10%

Total

-

Kenedix REIT Management, Inc.

90% Investment

10%
Investment

Kenedix Asset Management, Inc
6,450

100%

15％ Investment
Details of Kenedix Asset Management Company, Inc.
Name

Kenedix Asset Management, Inc.
Inc.

Incorporated

Oct. 2009

Representative

President Atsushi Kawashima

Capital￥405M （As of Dec. 17, 2009）2009）

Summary of the change in shareholders
Dec. 14, 2009: Asset management company approved stock transfer inboard meeting
Dec. 22, 2009: Shares transferred from Kenedix, Inc. to Kenedix AssetManagement, Inc.

85%
Investment

MAX-REALTY
15％
35％
Investment Investment

Kenedix, Inc.

Sumitomo
XYMAX
Mitsui Banking
Corporation
Co. and others

ITOCHU
Corporation

Note:
MAX-REALTY is an asset management company invested by
XYMAX Corporation, Sumitomo Mitsui Banking Corporation andothers, based on the concept ｏｆ “combining real estate and financeconsulting knowledge in to one.”The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

41

Management structure of AM company
AM’
AM’s decisiondecision-making process
Deliberation &Resolution

Preview

Deliberation &Resolution

Resolution/Reporting

Assetmanagement
committee

Complianceofficer

Corresponding
division

Approval for transactions withinterested parties
Approval for transactions outside ofmanagement guidelines
Approval for transactions that follow
management guidelines excluding thosewith interested parties

Compliancecommittee(including outside
member Note)

Resolution

Board ofdirectors

Creation of management guidelines

ReportingNote: 1 lawyer as of Dec. 14, 2009
Changed to above decision-making process on May 26, 2009

< Reference >Asset management company’company’s management fee structure

Rules on transactions with interested parties

Asset management company’s management fee structure Transactions with interested parties¾ Management fee I : 0.15% of total assets¾ Asset acquisition: Must not acquire properties for more than appraised price(except for properties pre-acquired by Kenedix Inc. pursuant to the MOU)

¾ Management fee II : 3.0% of money available for
distribution in each fiscal period¾ Asset disposal: Must not sell properties for less than appraised price＜Reference＞
Reference＞
Meetings held by the various committees, Board of Directors of the AssetManagement
anagement Company / Investment Corporation
1st
period2nd
period3rd
period4th
period5th
period6th
period7th
period8th
period9th
periodCompliance committee

7

7

7

8

6

8

9

8

8

Asset management
committee

21

35

39

39

38

38

52

44

36

Board of directors

9

7

9

8

9

7

9

8

10

Board of directors ofInvestment Corporation

11

7

7

9

7

7

8

8

8

¾ Acquisition fee: 0.5%of acquisition price(0.25% if interested parties)¾ Sale fee: capped at 0.5% of transfer price Property management fees
¾ Rental property management: 2% of rent revenues + 2% of
the operating revenues from the property (after operating
expenses, and before depreciation expenses)¾ Management transfer: amount determined in proportion to
the acquisition/sale price(e.g. ¥1 – 3B → ¥2M, or ¥5 – 10B → ¥2.4M）¾ Construction Supervision: amount determined in proportion to
the construction costs(e.g. ¥1 – 5M →5% or ¥10 – 100M → ¥450,000＋3%)

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

42

Kenedix REIT Management, Inc.—Organizational chart
Major members

Shareholders’meeting
Auditor (part-time)
Haruo Funabashi, Kenichi Yamasaki♦

Auditors♦ After joining the Ministryof Finance, he served ascommissioner of Tokyo
Customs, Deputy
Commissioner of the
National Tax
Administration, Secretary
Haruo Funabashi General of the Securities
and Exchange
AuditorSurveillance(part-time)
Commission, Director
General, Minister’s
Secretariat of the
National Land Agency
before joining Kenedix as
an auditor

Board ofdirectors♦

Compliance officer
Yuuji Kamimura

Investmentcommittee

Taisuke Miyajima
CEO & President

Compliancecommittee♦

Worked for c.7 years for Chuo Mitsui Trust andBanking（Property Sales Department, Property
Investment Advisory Department, Asset Finance
Department）♦

Worked for Cititrust & Banking before Joining
Kenedix, Inc．

♦
Koju Komatsu
General Manager,
Investment Management
Division

Representative
director
Taisuke Miyajima♦♦

Investment
management div.

Property
management div.

Financialplanning div.

Business
administration div.

♦ Property
acquisition
anddisposition♦ Researchand Analysisof real estatemarkets

Asset
Management
group

Property
Management
group♦Property
management♦ Property
leasing♦ Property♦Assessment
managementof property
management/riskmanagement

Engineering
group

IR
group

♦Construction ♦ Investor
Relationsmanagement
activities

Finance andaccounting
group

♦

Business
administrationgroup♦ Formulation ♦Runningof budget,unitholders’ andfinancialdirectors’
statements,
meetings♦ Negotiations disclosure
with♦Administration/
regulatory♦ Procurement Accounting/agencies and of funds
Human Resources
concerned
bodiesProperty appraiser

Worked for Asahi Urban Development Corporation,
Nihonjisho, others before he joined Kenedix
Executive Officer & General Manager of REITManagement Division, Kenedix Advisors before joining
Kenedix REIT Management

Masashi Ohwa
Director & General Manager,
Property Management Division♦

Asset
Investment
group

Worked for Mitsubishi Trust and Banking (debt
capital market group, Los Angeles branch). Seven
years of experience in real estate investment advisorydivision after joining Kenedix, Inc.
Transferred to Kenedix REIT Management to become
CEO and president

Worked for 12 years at Chuo Mitsui Trust andBanking, where he was responsible for securitization
Joined Kenedix, Inc. after 4 years of experience invarious securitized paper investments at Sumitomo
Life Insurance

Masahiko Tajima
Director & General Manager,
Financial Planning Division♦♦

Worked for 27 years for Joined Shinsei Bank, Ltd.
Joined Kenedix REIT Management after 8 years ofexperience as a compliance officer at Shinsei Bank.

Yuuji Kamimura
Compliance Officer

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

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Disclaimer
The contents of this document, including summary notes, quotes, data and other information,
are provided solely for informational purposes and not intended for the purpose of soliciting
investment in, or as a recommendation to purchase or sell, any specific products.
Please be aware that matters described herein may change or cease to exist without priornotice of any kind. This document contains forward-looking statements and anticipations of
future results, based on current assumptions and beliefs in light of currently available
information and resources. Risks and uncertainties, both known and unknown, including
those relating to the future performance of the real estate market in Japan, interest rate
fluctuations, competitive scenarios, and changing regulations or taxations, may cause
Kenedix Realty Investment Corporation (KRI)'s actual results, performance, achievements andfinancial performance to be materially different from those explicitly or implicitly expressed inthis document.
With respect to any and all terms herein, including without limitation, this document, theinformation provided is intended to be thorough. However, no absolute assurance orwarranties are given with respect to the accuracy or completeness thereof.
Neither KRI nor Kenedix REIT Management (KDRM) shall be liable for any errors,
inaccuracies, loss or damage, or for any actions taken in reliance thereon, or undertake any
obligation to publicly update the information contained in this document after the date of thisdocument.

The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

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