Translation Purpose Only

FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED OCTOBER 31, 2006
(May 1, 2006 to October 31, 2006)

December 11, 2006

Kenedix Realty Investment Corporation is listed on the Tokyo Stock Exchange with the securities code number 8972.
(URL http://www. kdx-reit.com)
Contact: Kenedix REIT Management, Inc.
Masahiko Tajima, General Manager, Financial Planning Division
TEL +81-3-5288-7629
Board of Directors meeting for approving financial results: December 11, 2006
The first distribution payment is scheduled for January 15, 2007

1．PERFORMANCE FOR THE FISCAL PERIOD ENDED APRIL 30, 2006 AND OCTOBER 31, 2006
(1) Business Results(The amount is rounded down to the nearest ¥million)
Operating Revenues
Third Fiscal
PeriodSecond Fiscal
PeriodOperating Income

184.2%¥2,565190.9%¥2,125

192.7%¥2,124

192.7%¥2,871140.1%¥1,343127.8%¥1,103353.7%¥1,101354.9%Net Income per Unit

Unitholders’Equity(ROE)

PeriodSecond Fiscal
PeriodNet Income¥5,288Return on

Third Fiscal

Ordinary Income

Oridinary<Reference>

Ordinary Income to<Reference>

Income to（Annualized）

Total Assets（Annualized）

Operating
Revenues¥13,575

3.1%

6.2%

1.7%

3.3%

40.2%

¥13,884

2.5%

4.9%

1.3%

2.6%

38.4%

Notes:
1.
Net income per unit is calculated using the average number of investment units for the third fiscal period: 156,460units.
Net income per unit is calculated using the average number of investment units for the second fiscal period: 79,370 units.
2.
Changes in accounting policies: Yes
3.
Percentage change figures are shown for operating revenues, operating income, ordinary income and net income
4.
Annualized percentage figures = Percentage figures for the relevant fiscal period / Number of actual investment management days for the relevant fiscal period × 365 days.
5.
Return on unitholders’ equity and ordinary income to total assets is calculated using the average of the respective balances of unitholders’ equity and total assets as of the
beginning and end of the fiscal period.
（The total distribution is rounded down to the nearest ¥million.）(2) Distribution
Distributions per
Unit (Yen)

Total Distribution

Excluding Excess(Millions of Yen)of Earnings
Third Fiscal
PeriodSecond Fiscal
PeriodDistributions in

Total Distributions

Excess of Earnings

in Excess ofper Unit (Yen)

Earnings

Distribution Ratio
Payout Ratio

to Unitholders’Equity¥13,529¥2,124

−

−

99.9%

2.3%

¥13,884¥1,101

−

−

99.9%

2.4%

Note: The payout ratio is rounded down to the nearest first decimal place.

-1-

（The total assets and unitholders’ equity are rounded down to the nearest ¥million.）(3) Financial Position

Third Fiscal
PeriodSecond Fiscal
PeriodTotal Assets

Unitholders’ Equity

Unitholders’ Equity to Total

Unitholders’ Equity per Share(Millions of Yen)

(Millions of Yen)

Assetsof Common Stock (Yen)¥160,314¥90,933

56.7%¥579,192¥92,053¥45,38749.3%¥571,840

Note: The number of investment units outstanding as of April 30, 2006 :totaled 79,370 units.
The number of investment units outstanding as of October 31, 2006 totaled 79,370 units.

2．FORECAST OF RESULTS FOR THE FOURTH FISCAL PERIOD(November 1, 2006 to April 30, 2007)

Fourth Fiscal
PeriodOperating Revenues

Ordinary Income

Net Income(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

¥5,542¥2,075¥2,074

Distribution perDistribution in

Unit(Yen)Excluding

Excess of Earings

Excess of Earnings

per Unit (Yen)¥13,200−

Reference: Estimated net income per unit for the fourth fiscal period: ¥13,200
Note: Forecasts presented in this document are based on “Assumptions for Forecasts for the Fourth Fiscal Period (from November 1, 2006 to April 30, 2007)” indentified in a
separate reference. Forecasts for net income and distribution per unit may differ from actual results due to changes in operating conditions and a variety of factors.
Accordingly, Kenedix Realty Investment Corporation does not guarantee any distribution amount.

-2-

Investment Highlights
Kenedix Realty Investment Corporation (“the Investment Corporation”) today announced the financial results for its fiscal
period ended October 31, 2006.
For its third fiscal period, (from May 1, 2006 to October 31, 2006) the Investment Corporation recorded operating revenuesof ¥5,288 million, operating income of ¥2,565 million, ordinary income of ¥2,125 million and net income of ¥2,124
million. As a result, cash distribution for the fiscal period under review was ¥13,529 per unit.

Management Performance
In the beginning of the fiscal period under review, the Investment Corporation acquired 26 properties with a totalacquisition costs of ¥58,033 million. From the viewpoint of review of its portfolio, the Invesment Corporation sold 2
residential properties (total acquisition costs of ¥1,708 million) on May 10, 2006. Using the original network of the AssetManagement Company, the Investment Corporation acquired 4 office buildings and 1 residential property in the Tokyo
Metropolitan Area during the third fiscal period with a total acquisition costs of ¥8,983 million. As a result, the number ofproperties owned as of October 31, 2006 stood at 64, with a total acquisition costs of ¥146,742 million. Looking at theportfolio as a whole, 58.7% was comprised of office buildings, 30.2% of residential properties and 10.9% retail properties
on an acquisition price basis. In addition, the occupancy ratio as of the end of the third fiscal period was 95.3%, reflecting
stable investment and asset management.

Capital Acquisition
To support the acquisition of additional assets, the Investment Corporation undertook debt financing of ¥20 billion during
the third fiscal period comprising ¥18 billion of long-term debt and ¥2 billion of short-term debt. As a result, the balance ofdebt financing as of October 31, 2006 stood at ¥62 billion comprising ¥48.5 billion of long-term debt and ¥13.5 billion ofshort-term debt. Of this amount, ¥37.3 billion of long-term debt as of October 31, 2006 was procured on a floating ratebasis. In order to minimize the risk of future increase in interest rate, the Investment Corporation has entered into
interest-rate swap agreements, effectively fixing applicable interest rates.
Since its public listing through to the end of the third fiscal period, the Investment Corporation has undertaken flexible debt
funding on both an unsecured and unguaranteed basis. This is the result of the high standing in which the Investment
Corporation, its investment policies, asset quality as well as the personnel and expertise of the Asset Management
Company are held among financial institutions. In addition, the Investment Corporation strives to diversify repayment
dates for its debt financing in an effort to reduce refinancing risk. The Investment Corporation also strives to extend average
repayment period by placing added emphasis on long-term debt.
Note: Short-term debt is repayable within 1 year. Long-term debt is repayable over terms exceeding 1 year.

Acquiring Credit Ratings
As a part of efforts to diversify procurement methods, including the issue of investment corporation bonds, and to extend
the average repayment period for its overall debt financing, the Investment Corporation acquired a credit rating of A+(Outlook : Stable) from Japan Credit Rating Agency, Ltd. on December 11, 2006. The Investment Corporation’s
investment policies, quality of individual assets, real estate portfolio, the unsecured and unguaranteed nature of debt
3

financing, quality of the Asset Management Company’s personnel and the support of the Kenedix Group were appraisedby the credit rating agency. This is the second credit rating acquired following the A3 (Outlook : Stable) from Moody’s
Investors Services, Inc. on February 28, 2006.
＜Credit Rating＞
Credit Rating Agency
Details of the Rating
Senior Debts：A+
Japan Credit Rating Agency, Ltd.
Outlook: Stable

Review of Portfolio Development Policy
1. Overview
The Investment Corporation adopts a dynamic and flexible investment stance that accurately reflects its environment andmarket trends, and endeavors to ensure a timely response to each and every opportunity. The Investment Corporation
strives to develop a diversified investment portfolio adopting a three-point investment criteria based on property type, areaand size for its basic policy. Based upon this basic policy, the Investment Corporation has conducted a review of its
portfolio development policies in order to shift to investments in office buildings, and has made changes to the
management guidelines of the Asset Management Company.
2. The Major Changes in the Management Guidelines
Portfolio Development Policy
After the Change in Management Guidelines
Taking into consideration the liquidity and scale of thereal estate market, the degree of real estate market
information, prudent diversification based on the typeof use for each property, diversification of the tenantbase, and the management results of the Kenedix
Group, the Investment Corporation shall invest mainly
in office buildings, and also shall be able to invest in
central urban-type retail properties, residential
properties, and other properties“Central Urban-Type Retail Properties” refers to retailproperties located in highly flourishing districts withhigh potential for attracting alternative tenants.

Before the Change in Management Guidelines
Taking into consideration the liquidity and scale of thereal estate market, the degree of real estate market
information, prudent diversification based on the typeof use for each property, diversification of the tenantbase, and the management results of the Kenedix
Group, the Investment Corporation shall invest
primarily in office buildings, residential properties,
retail properties and other properties.
“Retail Properties” refers to mainly central urban-type
retail properties located in highly flourishing districts

3. Details of the Changes
The Investment Corporation adheres to a basic policy that adopts a dynamic and flexible investment stance, which
accurately reflects its environment and market trends, endeavors to ensure a timely response to each and every opportunity,
and strives to develop a diversified investment portfolio with a three-point investment criteria based on property type, areaand size. Working from this policy, as of December 11, 2006, the Investment Corporation owned a portfolio of 65
properties with a total acquisition costs of approximately ￥150 billion, demonstrating its success in diversifying
properties.
The Investment Corporation has previously emphasized investment in mid-sized office buildings located in the Tokyo
Metropolitan Area. However, to respond to recent conditions in the office leasing market (increased rent levels,
improvement of occupancy ratios, etc.), the Investment Corporation has decided to invest mainly in office buildings and to
make no new investment in residential properties for a certain period. The Investment Corporation previously invested incentral urban-type retail properties located in highly flourishing districts as an alternative to investment in office buildings.
4

To make this situation evident, the Investment Corporation has decided to refer to these past investments as “Central
Urban-Type Retail Properties,” rather than simply as “Retail Properties.”
After the Change in Management Guidelines
Investment Portfolio Target

Investment Ratio
TargetOffice Buildings

Office buildings for leasing purposes as their principal use

50-100%・
A Type of Use

Residential Properties

Residential properties for leasing purposes as their principal use

0-30%

Central Urban-Type
Retail Properties

Retail properties located in highly flourishing districts

0-20%

・
B AreaTokyo Metropolitan Area

Other

Other Regional Areas

Amusement parks, business hotels, parking, educational,
medical and health care-related facilities, low-lying leasehold
land and other
Major cities in Tokyo, Kanagawa, Saitama and Chiba
prefectures

More than 70%

・C SizePrimarily government-designated cities in Other Regional Areas

Less than 30%

Office Buildings, Central Urban-Type Retail Properties, Other

More than 1.0 billion
yen per investment

Residential Properties

More than 0.5 billion
yen per investment

Minimum Investment

Maximum Investment

0% for now

Investment in a single property shall not exceed 30% of the total investment portfolio
after acquisition

Before the Change of Management Guidelines

・A Type of Use

Investment Portfolio Target

Investment Ratio
TargetOffice Buildings

Office buildings for leasing purposes as their principal use

More than 50%

Residential Properties

Residential properties for leasing purposes as their principal use

More than 20%

Retail Properties

Mainly central urban-type retail properties located in highly
flourishing districts

Other
・
B AreaTokyo Metropolitan Area
Other Regional Areas

Amusement parks, business hotels, parking, educational,
medical and health care-related facilities, low-lying leasehold
land and other
Major cities in Tokyo, Kanagawa, Saitama and Chiba
prefectures
Primarily government-designated cities in Other Regional Areas

More than 70%
Less than 30%

・C SizeOffice Buildings, Retail Properties, Other

More than 1.0 billion
yen per investment

Residential Properties

More than 0.5 billion
yen per investment

Minimum Investment

Maximum Investment

Less than 30%

Investment in a single property shall not exceed 30% of the total investment portfolio
after acquisition※ Investment Ratio = The subtotal of investment in each asset classification / Total acquisition price of the investment portfolio

5※ Acquisition Price = The price only refers to the purchase price of real estate or trust beneficiary interest, and excludes the taxes and acquisition
expenses.

Outlook
Forecasts for the fourth fiscal period (November 1, 2006 to April 30, 2007) are presented as follows. Please refer to the“Preconditions and Assumptions for the Fiscal Periods Ending April 30, 2007” below for factors that underpin forecasts.
Operating Revenues
Ordinary Income
Net Income
Distribution per Unit
Distribution in Excess of Earnings per Unit

\5,542 million¥2,075 million¥2,074 million¥13,200\0

Note: Forecast figures are calculated based on certain assumptions. Readers are advised that actual operating revenues, net
income and distribution per unit may differ significantly from forecasts due to a variety of reasons. Accordingly, the Investment
Corporation does not guarantee payment of the forecast distribution per unit.
“Preconditions and Assumptions for the Fiscal Periods Ending April 30, 2007”

Property Portfolio

Operating Revenues
Operating Expenses

Non-Operating Expenses
Debt Financing

Investment Units Issued
and Outstanding

Preconditions and Assumptions● Forecasts for the fiscal period ending April 30, 2007 are based on a property portfolio
totaling 65 properties held as of December 11, 2006,● The property portfolio may change due to a variety of factors.
● Rental revenues are estimated based on historic performance and a variety of factors
including each property’s competitive standing and market and other conditions.
● Property expenses other than depreciation are based on historic expenses, adjusted toreflect the variable nature of expenses.
● In general, property tax and city planning tax are allocated to the seller and purchaser
on a pro rata basis at the time of acquisition settlement. In the case of the Investment
Corporation, an amount equivalent to the portion allocated to the purchaser is includedin the acquisition price of the property.
● Repairs, maintenance and renovation expenses are estimated based on the AssetManagement Company budgeted amounts for each property and amounts consideredessential for each period. Actual repairs, maintenance and renovation expenses for eachfiscal period may, however, differ significantly from estimated amounts due tounforeseen circumstances or emergencies.
● For the fiscal period ending April 30, 2007, approximate amounts of ¥1,199 million,
has been estimated for depreciation expense.
● Amounts for interest payable of ¥431 million has been forecasted for the fiscal period
ending April 30, 2007.
● For the fourth fiscal period, forecast are based on a debt financing total balance of¥66,000 million as of December 11, 2006. Forecasts are also based on an assumptionthat the balance of debt financing shall remain unchanged in the fourth fiscal period.
● The Investment Corporation has 157,000 investment units issued and outstanding asof December 11, 2006. Forecasts are based on the assumption that the balance ofinvestment units issued and outstanding will remain unchanged through the fourthfiscal period (November 1, 2006 to April 30 2007).

6

Distributions per Unit
Distributions in Excess of
Earnings per Unit
Other

● Distributions per unit of amounts less than ¥1 are omitted. Calculations are based on
a 100% distribution of unappropriated retained earnings.
● The Investment Corporation does not currently anticipate distributions in excess ofearnings per unit.
● Forecasts are based on the assumption that any revisions to regulatory requirements,
taxation, accounting standards, public listing regulations or requirements of theInvestment Trusts Association, Japan will not impact forecast figures.
● Forecasts are based on the assumption that there will be no major unforeseen changes
to economic trends and in real estate and other markets.

7Balance Sheets
Third Fiscal Period

Second Fiscal Period（As of October 31, 2006）（As of April 30, 2006）（Thousands(％)（Thousandsin Yen）(％)

Increase / Decrease（Thousands inin Yen）(％)

Yen）

ASSETS
I. Current assets

10,243,869

6.4

8,119,288

8.8

2,124,580

Cash and bank deposits

4,709,666

4,897,035△187,369

Entrusted deposits

4,779,041

2,946,056

1,832,985

Rental receivables

83,37447,70335,670Prepaid expenses

47,20623,92523,280Consumption tax refundable

599,486

138,322461,163

Other current assets

25,093

66,244△41,150

II. Fixed assets
1

1. Property and equipment, at cost *149,945,921

93.5

83,893,031

91.1

66,052,890

178.7

149,719,621

93.4

83,434,736

90.6

66,284,885

179.4

Buildings

1,313,459

992,915

320,544

Structures

52,81355,321△2,508

Machinery and equipment

1,879

−

1,879

Tools, furniture and fixtures

2,760

−

2,760

Land

2,148,301

1,345,661

802,639

Buildings held in trust

55,173,235

28,954,013

26,219,221

Structures held in trust

247,088

131,961

115,127

Machinery and equipment held in trust

667,292

410,137

257,154

Tools, furniture and fixtures held in trust

546,862

560,719△13,857

89,565,928

50,984,005

38,581,922

Land held in trust
2. Investment and other assets

226,300

0.1

458,295

0.5△231,994

Leasehold and security deposits

18,205

17,488716

Long-term prepaid expenses

76,87443,02033,853

Derivative assets

131,220

397,786△266,565

ⅢDeferred

124,550

0.1

40,7170.1

83,833

Organization costs

35,62740,717△5,089Unit Issuance Costs

88,923−88,923

Total assets

126.2

160,314,341

100.0

8

92,053,037

100.0

68,261,304

49.4

305.9

174.2

Third Fiscal Period

Second Fiscal Period（As of October 31, 2006）（As of April 30, 2006）（Thousands in（Thousands

(％)

Yen）

(％)

Increase / Decrease（Thousands inin Yen）(％)

Yen）

LIABILITIESⅠCurrent liabilities

16,204,462

Trade payables

289,763

106,410

183,353

Short-term debt

13,500,000

11,500,000

2,000,000

Current maturities of long term debt

1,500,000−

1,500,000

Other payables

117,128

82,546

34,582

Accrued expenses

27,362

15,557

11,804

923

1,015

△91

767,536

529,894

237,641

1,748

4,462

△2,714

Accrued income taxes
Rents received in advance
Deposits received

10.1

33.2

12,239,887

34,426,133

13.3

37.4

3,964,575

ⅡLong-term liabilities

53,176,581

18,750,447

Long-term debt

47,000,000

30,500,000

16,500,000

Leasehold and security deposits received

184,398

131,646

52,751

Leasehold and security deposits held in

5,940,494

3,396,700

2,543,793−

397,786△397,786

51,687−

51,687

132.4

154.5

trust received
Unrealized gain on derivatives
Deferred tax liability
Total liabilities

69,381,044

43.3

46,666,021

50.7

22,715,022

148.7

I. Unitholder’s equity

90,853,764

56.6

−

−

90,853,764−

1. Capital stock

88,729,652

55.4

−

−

88,729,652−

2(Net assets)*

2. Retained earnings
Retained earnings at end of period

2,124,112

II. Valuation and translation adjustments

79,532

Unrealized gain from deferred hedge

79,532

Total net assets

2,124,112

−
0.1

−

−

79,532−

79,532−90,933,297

56.7

−

−

90,933,297−

160,314,341

100.0

−

−

160,314,341−

Ⅰ UNITHOLDERS’ CAPITAL−−

44,285,002

48.1△44,285,002

−

2

−

−

44,285,002

48.1△44,285,002−

Retained earnings at end of period−−

1,102,013

1.2△1,102,013−

Total unitholders’ equity−−

45,387,015

49.3△45,387,015−

Total liabilities and unitholders’ equity−−

92,053,037

100.0△92,053,037−

Total liabilities and assets
3

UNITHOLDERS’ EQUITY *Total unitholders’ capital *Ⅱ Retained earnings

9Statements of Income and Retained Earnings
Third Fiscal Period

Second Fiscal Period（As of October 31, 2006）（As of April 30, 2006）（Thousands in（Thousand

(％)

Yen）

1. Operating revenues
Rental revenues *（Thousands in

s in Yen）

5,288,833

1

(％)

100.0

2,871,789

Increase / Decrease

Yen）

100.0

2,417,044

4,549,456

2,574,667

1,974,788

Other rental revenues *582,043

297,122284,921

Profit on sale of trust beneficiary interests

157,334−

157,334

1

(％)

184.2

in real estate*2
2. Operating expenses

2,723,641
1

51.5

1,527,805

53.2

1,195,835

Property-related expenses *2,397,201

1,265,551

1,131,650

Asset management fees

203,841

150,11353,728

Directors’ salaries

5,400

5,400

−

Custodian fees

11,705

10,232

1,472

Administrative service fees

35,022

27,544

7,478

Audit fees

5,900

4,000

1,900

Other operating expenses

64,56964,963△394

Operating income
3. Non-operating revenues

178.3

2,565,192

48.5

1,343,983

46.8

1,221,208

190.9

2,389

0.1

5,198

0.2

△2,80946.0

Interest income

461

11

449

Other Non-operating revenues

1,927

5,187

△3,2594..Non-operating expenses

442,500

8.4

246,168

8.6

196,331

Interest expense

375,765

164,606

211,158

Financing related expense

20,904

11,743

9,161

Amortization of unit issuance costs

17,784

55,118△37,334

Amortization of organization costs

5,089

5,089

−

Other non-operating expenses

22,9569,610

13,346

179.8

Ordinary income

2,125,081

40.2

1,103,014

38.4

1,022,067

192.7

Income before income taxes

2,125,081

40.2

1,103,014

38.4

1,022,067

192.7

Current income taxes

1,009

0.0

1,017

0.0

△8

99.2

Deferred income taxes

0

2

−

1,022,072

192.7

Net Income
Retained earnings at the beginning of period
Retained earnings at the end of period△22,124,071

40.2

1,101,999

38.4

40

14

26

285.9

2,124,112

1,102,013

1,022,098

192.7

10

Statements of Changes in Unitholder’s Equity
Third Fiscal Period (May 1, 2006 to October 31, 2006)(Thousands in Yen)

Unitholder’s Equity
Capital Stock
1*

Valuation and Translation Adjustments

Retained Earnings

Total

Retained Earnings

Unitholder’sat end-period

EquityUnrealized gain fromDeferred Hedge

Total Valuation
and Translation

Total Net Assets

Adjustments

Balance at the beginning of a44,285,002

1,102,013

45,387,015−−

45,387,015

periodChanges during the fiscal period
New unit issuance

44,444,649−

44,444,649−−

44,444,649

Payment of dividends−△1,101,973△1,101,973−−△1,101,973

Net Income
Interest-rate swap−−

2,124,071−

2,124,071−−
79,532−
79,532

2,124,071
79,53244,444,649

1,022,098

45,466,748

79,532

79,53245,546,281

88,729,652

2,124,112

90,853,764

79,532

79,53290,933,297

Total changes during the fiscal
periodBalance at the end of period

11Properties Roster
Millions in Yen
Area

Property Name

（Note1）

Amount on the

Appraisal Value at theBalance Sheet

end of Third Fiscal(Note2)

Period (Note3)

Ratio (%)
(Note4)

Belles Modes Building

5,950

5,951

6,150

4.0

Nihonbashi 313 Building

5,940

6,251

6,910

4.0

Toshin-24 Building

5,300

5,332

5,470

3.6

Sogo Hirakawacho Building

5,180

5,198

5,410

3.5

Ebisu East 438 Building

4,640

4,684

5,040

3.1

Higashi-Kayabacho Yuraku Building

4,450

4,481

5,420

3.0

Noir Hatchobori

3,680

3,658

3,760

2.5

KDX Omori Building

3,500

3,520

3,630

2.3

KDX Hamamatsucho Building

3,460

3,470

3,480

2.3

KDX Higashi-Shinjuku Building

2,950

2,995

3,020

2.0

Dai-ichi Kayabacho Building

2,780

2,842

2,830

1.8

Tokyo

NTB・M Building

2,690

2,713

2,820

1.8

Metropolitan

K&Y Building (Southern Plaza)

2,533

2,523

2,610

1.7

Area

KDX Shin-Yokohama Building

2,520

2,557

2,610

1.7

Harajuku F.F. Building

2,450

2,518

2,820

1.6

OfficeType

Acquisition Price

KDX Kajicho Building

2,350

2,370

2,350

1.6

KDX Hamacho Building

2,300

2,440

2,620

1.5

FIK Minami Aoyama

2,270

2,312

3,140

1.5

KDX Funabashi Building

2,252

2,347

2,310

1.5

Kanda Kihara Building

1,950

1,937

1,960

1.3

KDX Yotsuya Building

1,950

1,970

2,020

1.3

NNK Building

1,610

1,656

1,950

1.0

Kiba Ocean Building

1,580

1,641

1,610

1.0

KDX Nogizaka Building

1,065

1,119

1,060

0.7

Koishikawa Yoshida Building

704

704

777

0.4

Other

Portus Center Building

5,570

5,551

5,620

3.7

Regional

KDX Minami Semba Dai-1 Building

1,610

1,610

1,620

1.0

Areas

KDX Minami Semba Dai-2 Building

1,560

1,578

1,620

1.0

Hakata-Ekimae Dai-2 Building

1,430

1,485

1,520

0.9

86,22487,424

92,157

58.7

Total of 29 Office

12

Area

Property Name

（Note1）

Appraisal Value at theBalance Sheet end of Third Fiscal Period(Note2)(Note3)

Ratio (%)
(Note4)

Residence Charmante Tsukishima

5,353

5,471

5,430

3.6

Metropolitan

Regalo Ochanomizu I&II

3,600

3,693

3,670

2.4

Area

Storia Sirokane

3,150

3,202

3,360

2.1

Tre di Casa Minami Aoyama

2,460

2,498

2,610

1.6

Regalo Shiba-Kouen

2,260

2,307

2,280

1.5

Court Mejiro

1,250

1,280

1,120

0.8

Apartments Motoazabu

1,210

1,239

1,260

0.8

Apartments Wakamatsu Kawada

1,180

1,208

1,210

0.8

Chigasaki Socie Ni-bankan

1,160

1,250

1,160

0.7

Court Nihonbashi-Hakozaki

1,130

1,159

1,190

0.7

Court Nishi-Shinjuku

1,130

1,160

1,160

0.7

Side Denenchofu

1,110

1,159

1,100

0.7

Gradito Kawaguchi

1,038

1,103

1,050

0.7

S-court Yokohama-Kannai II

945

969

984

0.6

Regalo Komazawa-Kouen

912

937

943

0.6

Court Motoasakusa

880

908

909

0.5

Court Shin-Okachimachi

878

911

888

0.5

Bloom Omotesando

875

896

947

0.5

Human Heim Okachimachi

830

854

873

0.5

Primo Regalo Kagurazaka

762

790

770

0.5

Court Shinbashi

748

765

800

0.5

Primo Regalo Youga

730

751

735

0.4

Court Suitengu

659

679

671

0.4

Court Shimouma

638

659

644

0.4

Other

Ashiya Royal HOmes

2,330

2,387

2,440

1.5

Regional

Venus Hibarigaoka

1,800

1,972

1,710

1.2

Areas

Regalo Ibaraki I&II

1,600

1,651

1,670

1.0

Collection Higashi-Sakura

1,264

1,356

1,253

0.8

Renaissance 21 Hirao Jousui-machi

900

935

926

0.6

Montore Nishikouen Bay Court

826

861

826

0.5

Abreast Hara

444

454

493

0.3

Abreast Hirabari

407

419

454

0.2

44,45945,89845,53630.2

Jinnan-zaka Frame

9,900

10,061

11,400

6.7

Yoyogi M Building

2,479

2,636

2,460

1.6

ZARA Tenjin Nishi-dori

3,680

3,698

3,760

2.5

16,05916,396

17,62010.9

146,742

149,719

155,313100.0

Total of 32 Residential
Tokyo
Metropolitan
RetailAmount on theTokyo

Residential

Type

Acquisition Price

Area
Other
Regional
Areas

Total of 3 Retail
Total of 64 properties

13

Notes :1. Acqusition price is the purchase price for trust beneficiary interests or properties acquired by the Investment Corporation exclusive of taxes,
rounded down to the nearest million yen.
2. Figures of less than1 million are rounded down from the amounts on the balance sheet.
3. Appraisal values (end of the third fiscal period) are based on the asset valuation method and standards outlined in the Investment
Corporation’s Articles of Incorporation and regulations formulated by the Investment Trusts Association, Japan. Appraisal values are drawn
from valuation reports preprared by the Japan Real Estate Institute, Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal
Corporation, Chuo Real Estate Appraisal Co., Ltd. and Nippon Tochi-Tatemono Limited.
4. Figures are the acquisition price of each asset as a percentage of the total acquisition prices for the portfolio rounded down to the nearest firstdecimal place.

Property Distribution
A． Property TypesType

Number of
Properties

Acquisition Price(Millions of Yen)

Ratio (Note) (%)

Office Buldings

29

86,224

58.7

Residential Properties

32

44,45930.2

Retail Properties

3

16,059Others

−

−

Total

64

146,742

100.0

Acquisition Price（Millions of Yen）

Ratio (Note) (%)

10.9

B． Geographic Distribution
Area

Number of
Properties

Tokyo Metropolitan Area

51

123,32184.0

Other Regional Areas

13

23,421

15.9

Total

64

146,742

100.0

Number of
Properties

Acquisition Price（Millionsof Yen）

Ratio (Note) (%)

Less than 1,000

16

12,1388.2

1,000 - 2,500

28

47,77832.5

2,500 - 5,000

13

43,63329.7

5,000 - 7,500

633,29322.6

7,500 - 10,000

1

9,900

6.7

Total

64

146,742

100.0

C． Property Distribution by Acquisition Price
Acquisition Price(Millions of Yen)

Note : ‘Ratio’ are the percentage of acquisition price for each category to the acquisition prices for the entire portfolio . Figures arerounded down to the nearest first decimal place.

14

Details of Investment Real Estate and Trust Real Estate
Type

Area
Tokyo
Metropolitan

OfficeArea

Total Floor Area

Type of（㎡）

Structure(Note1)(Note2)

Property Name

Belles Modes Building

5,323.81

Nihonbashi 313 Building

8,613.09

Toshin-24 Building

8,483.17

Sogo Hirakawacho Building

8,002.97

Ebisu East 438 Building

4,394.58

Higashi-Kayabacho Yuraku Building

5,916.48

Noir Hatchobori

4,800.43

KDX Omori Building

7,334.77

KDX Hamamatsucho Building

3,592.38

KDX Higashi-Shinjuku Building

7,885.40

Dai-ichi Kayabacho Building

3,804.86

NTB・M Building

3,960.22

K&Y Building (Southern Plaza)

6,399.42

KDX Shin-Yokohama Building

6,180.51

Harajuku F.F. Building

3,812.44

KDX Kajicho Building

3,147.70

KDX Hamacho Building

4,133.47

FIK Minami Aoyama

1,926.98

KDX Funabashi Building

5,970.12

Kanda Kihara Building

2,393.94

KDX Yotsuya Building

3,329.68

15

SRC
B2F9
SRC
B2F9
SRC
B1F8
SRC
B3F10
SRC
B1F7
SRC
B1F9
SRC･RC
B1F8
RC･SRC
B1F9
S
F9
SRC
B1F9
SRC
F8
SRC･S
B1F8
SRC
B1F11
S
B1F9
SRC
F11
SRC
B1F8
SRC
B2F10
SRC
B1F9
SRC
B1F8
SRC･RC･S
B1F8
RC
B2F4

Completion Date

PML Percentage(Note3)(%)

May 1994

4.94

April 1974

17.36

September 1984

17.19

March 1988

8.02

January 1992

7.68

January 1987

7.88

June 1993

5.21

October 1990

4.21

September 1999

9.89

January 1990

5.40

October 1987

7.18

February 1992

10.55

August 1992

5.05

September 1990

13.82

November 1985

13.02

March 1990

8.81

September 1993

12.10

November 1988

6.37

April 1989

4.11

May 1993

14.28

October 1989

5.56

OtherRegional
Areas

NNK Building

2,594.88

Kiba Ocean Building

2,820.64

KDX Nogizaka Building

1,695.07

Koishikawa Yoshida Building

1,866.58

Portus Center Building

79,827.08

KDX Minami Semba Dai-1 Building

4,236.59

KDX Minami Semba Dai-2 Building

3,315.93

Hakata-Ekimae Dai-2 Building

4,846.01

Total of 29 OfficeTokyo
Metropolitan

ResidentialArea

210,609.20

Residence Charmante Tsukishima

18,115.39

Regalo Ochanomizu I&II

4,843.27

Storia Sirokane

5,750.05

Tre di Casa Minami Aoyama

1,986.44

Regalo Shiba-Kouen

2,786.98

Court Mejiro

3,326.07

Apartments Motoazabu

1,685.14

Apartments Wakamatsu Kawada

1,858.51

Chigasaki Socie Ni-bankan

3,821.74

Court Nihonbashi-Hakozaki

1,727.96

Court Nishi-Shinjuku

1,669.33

Side Denenchofu

2,433.52

Gradito Kawaguchi

1,705.38

S-court Yokohama-Kannai II

1,738.71

16

SRC･S
F9
RC
F5
RC
B1F5
SRC
B1F9
SRC･S
B2F25
SRC･RC･S
B1F9
SRC･S
B1F9
SRC
F9
―
SRC
B1F10

June 1992

8.16

October 1992

9.16

May 1991

7.08

October 1992

11.47

September 1993

3.49

March 1993

7.23

September 1993

7.94

September 1984

0.69

Average of 17.0 yrs―

January 2004

17.11

①RC B1F10①January 2006

②RC F11②February 2006

SRC･S
B2F13
RC
B1F6
RC
F13
RC
B1F3
RC
F11
RC
F12
RC
F8
SRC
F12
RC
F8
RC
F6
RC
F12
RC
F11

9.32

February 2003

7.77

February 2004

7.44

November 2005

12.39

March 1997

5.74

January 2004

6.24

February 2004

7.56

January 1991

18.75

February 2004

13.44

October 2005

6.44

February 1997

10.39

February 2006

13.33

March 2003

19.45

OtherRegional

Regalo Komazawa-Kouen

1,262.00

Court Motoasakusa

1,585.65

Court Shin-Okachimachi

1,494.55

Bloom Omotesando

699.14

Human Heim Okachimachi

1,444.25

Primo Regalo Kagurazaka

1,007.54

Court Shinbashi

1,212.74

Primo Regalo Youga

1,213.20

Court Suitengu

1,091.82

Court Shimouma

880.18Ashiya Royal HOmes

5,015.67

Venus Hibarigaoka

14,976.25

Areas

RC
F8
SRC
F13
RC
F11
RC
B1F3
SRC
F14
RC
F8
RC
F6
RC
F8
RC
F7
RC
F6
RC
F5

February 2006

9.29

January 2005

9.90

October 2005

4.70

March 2003

6.55

December 2004

12.19

January 2006

7.86

December 1997

9.32

December 2005

9.98

July 2003

11.89

October 2005

8.43

June 1991

11.05

March 1989

6.48

①RC F6②RC F5③RC F6
Regalo Ibaraki I&II

6,445.92

Collection Higashi-Sakura

2,931.65

Renaissance 21 Hirao Jousui-machi

2,643.36

Montore Nishikouen Bay Court

2,772.49

Abreast Hara

1,563.47

Abreast Hirabari

1,867.75

Total of 32 Residential
Tokyo

RetailMetropolitan
Area103,556.12

Jinnan-zaka Frame

6,302.58

Yoyogi M Building

1,269.06

ZARA Tenjin Nishi-dori

1,445.02

Other
Regional
Areas

17①RC F4①May 1991②RC B1F7②March 1993

RC
F14
RC
F5
RC
F10
SRC
F11
RC
F7
―
SRC･RC･S
B2F7
SRC
F8
S
F4

17.20

March 2006

12.20

October 2005

0.42

February 2006

0.23

February 2000

13.34

March 2000

13.56

Average of 4.7 yrs―

March 2005

6.20

August 1991

9.59

November 2005

0.70

Total of 3 Retail
Total of 64 properties

9,016.66―

Average of 3.5 yrs

323,181.98―

Average of 11.8 yrs―
7.16(Note4)

Notes:
1.

Total floor area is based on figures recorded in the land register and does not include related structures. The total floor area for the entire
buildings is reported for compartmentalized ownership.

2.

Type of structure data is based on data recorded in the land register. The following abbreviations are used to report data relating tostructure and the number of floors:
SRC: Steel-Reinforced Concrete; RC: Reinforced Concrete; S: Steel Frame; B: Below Ground Level; F: Above Ground Level.
For example: B2F9: Two floors below ground level and nine floors above ground level.

3.

Completion date is the date of construction completion recorded in the land register. Average age subtotal and total data is calculated using

4.

Probable Maximum Loss (PML) data is based on a survey provided by Sompo Japan Risk Management, Inc. as of August 2006.

the weighted-average based on acquisition prices as of October 31, 2006.

18

Disclaimer

This finacial report includes translation of certain documents originally filed and made available in Japan in accordance with
the Securities and Exchange Law of Japan. This English language financial report was prepared solely for the convenience ofreaders outside Japan and is not intended to constitute a document for an offer to sell, or seeking an offer to buy, any securitiesof Kenedix Realty Investment Corporation. English terms for Japanese legal, accounting, tax, and business concepts usedherein may not to be precisely identical to the concept of the equivalent Japanese terms. With respect to any and all terms
herein, including without limitation, financial statements, if there exist any discrepancies in the meaning or interpretation
thereof between the original Japanese documents and English translation contained herein, the original Japanese documents
will always govern the meaning and interpretation.
None of Kenedix Realty Investment Corporation, Kenedix REIT Management, Inc. or any of their respective directors, officers,
employees, partners, unitholders, agents, affiliates or their advisors will be responsible or liable for the completeness,
appropriateness, or accuracy of English translations or the selection of the portion(s) of any document(s) translated into
English.
The financial statements of Kenedix Realty Investment Corporation have been prepared in accordance with generally accepted
accounting principles in Japan “Japanese GAAP”, which may materially differ in certain respects from generally accepted
accounting principles in other jurisdictions.
This financial report contains forward-looking statements. These statements appear in a number of places in this financial
report and include statements regarding the intent, belief, or current and future expectations of Kenedix Realty Investment
Corporation or Kenedix REIT Management, Inc. with respect to its business, financial condition and results of operations. In
some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,”“anticipate,” “believe,” “estimate,” “predict,” “potential,” or the negative of these terms or other similar terminology. Thesestatements are not guarantees of future performance and are subject to various risks and uncertainties. Actual results,
performance or achievements, or those of the industries in which we operate, may differ materially from any future results,
performance or achievements expressed or implied by these forward looking statements. In addition, these forward-looking
statements are necessarily dependent upon assumptions, estimates and data that may be incorrect or imprecise and involve
known and unknown risks and uncertainties. Accordingly, readers of this document should not interpret the forward-looking
statements included herein as predictions or representations of future events or circumstances.
Potential risks and uncertainties also include those identified and discussed in this document. Given these risks anduncertainties, readers of this document are cautioned not to place undue reliance on forward-looking statements, which speak
only as of the date of information produced herein. We disclaim any obligation to update or, except in the limited
circumstances required by Tokyo Stock Exchange, announce publicly any revisions to any of the forward-looking statements
contained in this documents.

19