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.

Kenedix Realty Investment Corporation
8th Period Results (Ending April 2009)･Updated 9th period earnings forecasts(page3) on August 27, 2009.
・Updated Sale of properties(page6) on August 27, 2009.
・Revised Average rent level of office buildings in the portfolio
as of end of 8th Period (page23)
・ Updated Occupancy of Portfolio (page31･32) on July 31,2009

August 2009
Kenedix REIT Management, Inc.
http://www.kdx-reit.com/eng/

08th Period Results (Ending Ａｐｒｉｌ 2009)
9th Period Forecasts (to October 2009)
SECTION 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.

1

8th period financial results—Performance highlights
Performance(¥M)

6th period
results(to Apr. 2008)

7th period
results (toOct. 2008)

8th period
results(to Apr. 2009)

Differenceof 7th & 8th
periodOperating revenues

8,582

8,456

8,204

▲252

Mainly caused by no profit from property sale (▲¥299M from 7th period)

512

299

▲492

▲792

7th period: Profit from sale of ZARA Tenjin Nishi-dori and Hakata Ekimae Dai-2 Building
8th period: Loss from sale of KDX Koishikawa Building and KDX Hakata Building

Rental business profit

4,182

4,477

4,600

+123

+2.7%
2.7% (Increase in rental revenues and decrease in propertyproperty-related expenses)

Depreciation

1,430

1,445

1,429

▲15

-

Net income

3,342
3,342

3,123
3,123

2,434

▲689

(Reference) If the profit/loss from property sale deducted:
7th period ¥2,823M 8th period ¥2,926M

NOI (Net Operating Income)

5,612
5,612

5,923

6,030

+107

+1.8% (NOI = Rental revenues-property-related expenses + Depreciation)

FFO (Funds From Operation)

4,259

4,269
4,269

4,356

+87

FFO = Net income + Depreciation – Profit from property sale + Loss from property sale

Number of units outstanding

200,000 units

200,000 units

200,000 units-

FFO per unit

¥21,297¥21,345
21,345¥21,780＋¥435

Distribution per unit

¥16,711¥15,618¥12,172▲¥3,446

6th period
results(to Apr. 2008)

7th period
results(to Oct. 2008)

8th period
results(to Apr. 2009)

Difference of
7th & 8th
periodTotal assets (¥M)

230,520

239,648

238,745▲903 ▲0.4%

Total unitholders’unitholders’ equity

128,314

128,087

127,398▲689 ▲0.5%

Total unitholders’unitholders’ equity per unit

¥641,570¥640,437¥636,990

InterestInterest-bearing debt ratio

38.9%

41.2%

41.4%

Unitholders’
Unitholders’ equity to total assets

55.7%

53.4%

53.4%

68

69

67

248,625.52㎡

256,214.30㎡

250,364.42㎡

95.9%

95.6%

95.7%

Profit/Loss from property saleNotes

No new issue(Reference) If the profit/loss from property sale deducted:
6th period ¥14,100 7th period ¥14,100 8th period ¥14,600

Financial ratios

Number of properties
Total leasable floor area
Occupancy ratio

Notes▲¥3,447 Net asset value after distribution adjustment (deduction): ¥624,818+0.2％ Attributed mainly to decrease in total assets due to decreased profit (loss from property sale)0% ▲2 Acquisition: none

Sale: 2 office buildings▲5,850㎡ ▲2.3%+0.1% 95.6% for offices, 91.9% for central urban retails, 97.5% for residentials

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 earnings forecasts
Revisions to operating forecasts for 9th period (to October 2009) (As of August 27, 2009)(¥M)

8th period
results(to Apr. 2009)Ａ

9th period
forecasts(to Oct. 2009)
As of Jun. 22,
2009B

9th period
forecasts (note)(to Oct. 2009)
As of Aug. 27,
2009
Ｃ

Net
change（Ｃ-Ａ）

Net
change（Ｃ-Ｂ）

Operating revenues

8,204

7,872

7,838

▲366

▲33

Operating expenses

4,740

-

-

-

-

2,173
1,429

1,455

1,446

▲17

▲9

Operating income

3,463

3,262

2,963

▲500

▲299

Non-operating expenses

1,039

-

-

-

-

966

1,063

1,063

+97

-

Ordinary income

2,435

2,142

1,841

▲594

▲300

Net income

2,434

2,141

1,840

▲594

▲300

Number of units outstanding

200,000

200,000

200,000--

Distribution per unit (¥)

12,172

10,7009,200▲2,972▲1,500NOI (Rental revenues-property-related expenses+ Depreciation)

6,030

-

-

-

-

FFO (Net income + Depreciation - Profit/loss
from property sale)

4,356

-

-

-

-

(Reference) Profit/loss from property sale

▲492

▲214

▲445

+47

▲231

69→67

67→66

66→65

Sale of KDX
Koishikawa Building
and KDX Hakata
Building

Sale of Apartments
Motoazabu
Acquisition of KDX
Nagoya Sakae
Building (building)Sale of Apartments
Wakamastu-Kawada

Property-related expenses (excl. depreciation)
Depreciation

Interest expense(incl. financing related expenses, etc.)(Reference) Changes in the number of properties(Reference) Sale / acquisition of properties(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.

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.

3

SECTION 2

Stronger Focus on Office Buildings

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.

4Portfolio that focuses on office buildings
Changes in asset size

End of 8th Period (2009/4)
Portfolio breakdown by property type

Changes in total acquisition prices(¥B)

Stability-emphasized

250■Offices ■Central urban retails ■Residentials

212.8

ed
siz

200

ha
p
m
h-e
t
146.7
ow
Gr

150

222.0

218.9

Central urban
retails
5.6%

Residentials
5.8%

197.0

Offices
88.5%

175.0

196.9

193.9

184.0
Portfolio breakdown by region

137.9
100

81.4
69.1
48.2

50

0

37.7
12.3

12.3

18.9

20.7

115.9

Other Regional
Areas¥28.6B
14.7%

86.2

16.0

44.4

16.0

43.0

16.0

43.0

16.0

12.3

12.7

12.7

12.3
12.7

Other Tokyo
Metropolitan
Area¥41.3B
21.3%(Office buildings)

Central Tokyo¥123.9B
63.9%

End of 1st End of 2nd End of 3rd End of 4th End of 5th End of 6th End of 7th End of 8th(2005/10) (2006/4) (2006/10) (2007/4) (2007/10) (2008/4) (2008/10) (2009/4)
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
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.

5

Sale of properties － stronger focus on mid-sized office buildings
Portfolio focused on mid-sized office buildings in Tokyo Metropolitan Area
Total of 33 properties (residentials, central urban retails and regional ・small office buildings) sold worth ¥44.01B
3rd period

4th
period6th
period2residential
properties

2
residential
properties

23 residential
properties

ZARA
TenjinNishi-doriHakataEkimaeDai-2
Building

KDX
HakataBuilding

KDX
Apartments
Koishikaw Apartments
Wakamastua Building Motoazabu
Kawada2006/5/10

2007/4/20

2008/2/1

2008/6/25

2008/7/30

2009/4/22

2009/4/30

2009/6/23

2009/8/27

Residential
Tokyo
Metropolitan
Area(16)
Other Regional
Areas (7)CentralUrban Retail

OfficeOfficeOfficeResidential

Residential

Other
Regional
Areas

Other
Regional
Areas

Other
Regional
Areas

Tokyo
Metropolitan
Area

Tokyo
Metropolitan
Area

Tokyo
Metropolitan
Area

Sales Date
Type

Residential

Area

Tokyo
Tokyo
Metropolitan Metropolitan
Area
Area

Initial acquisition
price

Sales priceProfit/loss
from sale

Residential

8th
period7th period

9th
period¥1.71B¥1.41B¥30.34B¥3.68B¥1.43B¥2.35B¥0.7B¥1.21B¥1.18B

¥2.0B

¥1.6B

¥31.4B¥4.1B¥1.47B¥2.0B¥0.67B¥1.05B¥0.93B¥0.16B¥0.13B¥0.51B▲¥0.47B▲¥0.02B▲¥0.21B※▲¥0.23B※¥0.30B※assumed price

Properties sold in
Other Regional Areas

Residentials soldSale of Properties by property type and region

Properties sold in Other
Regional Areas and thelowest acquisition price ofoffice buildings

Residentials sold(by initial acquisition prices)
OfficeCentral Urban
RetailResidential

Tokyo
Metropolitan Area

¥0.7B

-

¥28.08B

Other Regional
Areas¥3.78B¥3.68B¥7.77B

Total¥4.48B¥3.68B¥35.85B

End of 3rd → End of 8th
periodperiodRatio of office buildings

58.7% → 88.5%

Ratio of properties inTokyo Metropolitan Area

84.0% → 86.0％

Fukuoka▲¥7.46B

Tokyo▲¥3.09B

Note: Amount refers to the total of initialacquisition prices

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

6

Planned acquisition in 9th period: KDX Nagoya Sakae Building
Acquisition of a property based on forward commitment

KDX Nagoya Sakae Building♦

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

Site area: 1,192.22m2

♦

GFA

♦

Year built: April 2009♦

Number of stories: 11F♦

Acquisition price: Land ¥4,000M
Building ¥3,550: 9,594.00m2

・ A 3-minute walk from “Sakae” Station on
Subway Higashiyama Line, Meijo Line andMeitetsu Seto Line・ Located along flourishing “Hirokoji-dori”

・Typical floor area of about 200 tsubo with a ceiling height of 2.8m
・Eco-conscious design with environment control equipment (free air
conditioning, perimeter fan system + full-height glass, and daylight sensor
for luminance control)

6th period

7th period

April 2009

April 2008

May

June

Completion of
construction

April 25, 2008
Land acquired
Concluded building
Acquisition Agreement
Widening
financial crisis

2 officebuildings
sold

July

July 1, 2009
Building acquired

Amendedagreement
concluded

Amendments to Building Acquisition Agreement
Name ofproperty
Acquisition
price
Fixed rent

・Security system (using non-contact IC cards)

Seismic Isolation Structure

9th period

8th period

Before amendment

After amendment―

KDX Nagoya Sakae
Building¥4,325M¥3,550M

Master leaseagreement withguaranteed fixed rent

None

Rooftop Garden

CASBEE （Comprehensive Assessment System for Built
Environment Efficiency）
Efficiency）
A method for assessing and rating the environmental performance ofbuildings

CASBEE Nagoya (Municipal version CASBEE)・Seismic isolation structure to mitigate
earthquake risks
・A new office building constructed by
Takenaka Corporation

Rooftop garden to realize ahigh level of environmental
designCASBEE Nagoya: A-rated

Each municipal government is able to improve the environmental
efficiency of buildings in its jurisdiction by requiring the submission
submission of abuilding environmental plan together with an energy saving plan torelevant authorities at the time of application for building permit.
permit.
“CASBEE Nagoya”
Nagoya” has been introduced since April 2004.

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.

7

SECTION 3

Management of Existing Properties

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.

8

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

14.8%
15%

12.2%
8.2%

10%

7.7%

9.0%

9.9%

7.0%

6.1%
2.7%

5%

< Future policy >Focus first on maintaining higher
occupancy ratio through strengthening
efforts to minimize turnover ratio
and keep vacancy period short(Reference) Main reasons for moving out
5th
period6th
period7th
period8th
period9th
period(E)

Expandoffice space

4

2

3

4

1

Reduceoffice space

17

17

23

34

38

Other/
unknown

5

11

7

6

12

0%
1st

2nd

3rd

4th

5th

6th

7th

8th

9th

periodperiodperiodperiodperiodperiodperiodperiodperiod(Estimate)

Average turnover ratio (1st period – 8th period): 8.5% (annualized basis)(Note) The estimate for 9th period incorporates cancellation forecast during 8th period

Average vacancy period for office buildings

Changes in occupancy ratio for office buildings (by region)
100%

April 2009

98%

97.0%
(Central Tokyo)

96%

95.6%
(Other Tokyo
Metropolitan Area)
92.4%(Other Regional
Areas)

94%
92%
90%
88%

01

04
09
/

09
/

07

10
08
/

08
/

01

04
08
/

08
/

07

04

01

10

07

04

01

10

10
07
/

07
/

07
/

07
/

06
/

06
/

06
/

06
/

05
/

05
/

07

86%

6th
period7th
period8th
periodOccupancy
ratio at endof 8thperiodCentral Tokyo

1.0
months4.2
months4.5
months97.0％

Other Tokyo
Metropolitan
Area

3.6
months4.2
months5.6
months95.6％

Other Regional
Areas

10.6
months10.2
months10.6
months92.4％

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

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.

9

Management of existing properties—maintain/improve
occupancy through proactive leasing activities
Selected case study of leaselease-up through proactive leasing activities
KDX Jimbocho Building●Property description
GFA

3,292.13m2

Year built

May 1994●Results of activities

Acquisition
Date

March 31, 2008

Location

1-14-1 Jimbocho Kanda, Chiyoda-ku, Tokyo

Type of
Structure

SRC (flat-roofed); B1F8

Increased
Increased occupancy
occupancy fromfrom 0%0% to
to 100%100% bybyleasing
activities
over10
monthsleasing activities over 10 months after
after
completion
completion ofof large-scalelarge-scale renovation
renovation(Reference)
Reference) Successful leaselease-up of office buildings withinitially low occupancies

80%
60%
KDX Jimbocho
Building

20%

07/4

07/8

07/12

08/4

08/8

8th
periodTotal

Property info provided(# of brokers)

210

210

210

―

Previews

1

1

1

3

Inquiries

50

91

49

190

Private previews

8

28

12

48

Applications

1

3

2

6

Contracts

0

3

2

5

Increased occupancy through early lease-up
Prevent move-outs by enhancing relationships with existing tenants

・Negotiations with the property manager for property improvement based on theopinion and issues pointed out by tenants
・Consolidate BMs based on various information including the opinion of tenants
・Construction aimed to increase CS and large-scale value-up works have cycled out

100%

0%
06/12

7th
periodManagement based on CS(customer satisfaction)
surveyKDX Jimbocho Building
KDX Harumi Building
KDX Nishi-Gotanda Building
KDX Toranomon Building

40%

6th
period

08/12

09/4

Enhanced relationship withexisting tenants
・Identify tenants’ needs throughtimely visits and interviews
・Year end/New year decoration ofbuilding entrance

Early-lease up
・Enhance cooperation with brokers
・Spur the needs of existing tenants formore space within the same building

95%
95% oror higher
higher occupancy
occupancy
maintained
maintained

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

10Management of existing properties－rent level of new contracts
for office buildings
Status of rents for new contracts (for new tenants)(¥1,000)

30,000

New rents impact on overall rent levels(monthly rent)
360
2,060
140

25,00020,000

3,270
2,240

5,940

Decrease120

15,000

Increase
6,640

Cumulative40

10,000

7,590

5,000
0

< Future policy >Cumulative total
rent (monthly)
increased
during 3rd – 8thperiod: Approx.
¥22M

200
2,010

3rd
period4th
period5th
period6th
period7th
period8th
periodNote: New rents are compared with average rents, and then classified into increased and decreased rents.
The amount of changes for each period refers represents the aggregated amount of monthly rentchanges between the new rents and the average rents. The cumulative total represents theaggregated amount of monthly rent changes, rounded to the nearest ten-thousand(# of contracts)
50

Changes in the number of new contracts and the ratio ofrent increase / decrease for the new contracts
25%

40
14.0%

30
20

Given the current economic
environment and the conditions of
the real-estate market, we will
respond flexibly to potential tenants
to keep vacancy period short andimproving occupancy ratio.

11.4%

20%

16.7%

15%

7.0%

3.9%

5%

0
-2.6%

10
3rd
period4th
period5th
period6th
period7th
periodResults for 8th period(results for 7th period)

New contracts (left axis)

8th
periodNote: Ratio represent the simple
average changes between the0%
average monthly rents forexisting tenants and the average-5%rents for new contracts forrespective periods. The figures
are rounded to the first decimal
place

Averagechanges in
rents

# of
# of
properties properties
with
with
increased decreased
rents
rents

Central Tokyo

0.0%(13.5%)

8
(8)

9

(0)

Other Tokyo Metropolitan
Area

▲1.1%
（5.8%）

4
(5)

6

(2)

▲8.1%
（▲5.1%）

4
(3)

7

(7)

(16) 22(9)

Changes (right axis)

10%

10

Average changes in rents by area (simple averages based on
the number of contracts)

Other Regional Areas
Total of office buildings

▲2.6%
16
（3.9%）

Note: Ratio represent the simple average changes between the
average monthly rents for existing tenants and theaverage rents for new contracts for respective periods.
The figures are rounded to the first decimal place

Note:Average rents: The average rents for the subject office buildings (offices 2F or above) at the end of the previous monthprior to the dates of the new contracts
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any specific products. Please see disclaimer in the final page of this documents.

11

Management of existing properties－rent level of renewed
contracts for office buildings
Status of renewed rents (for existing tenants)(¥1,000)

30,00025,000

Renewedrents

impact on overall rent levels(monthly rent)
0

3,530
1,690

9,100

20,000＜Future policy＞

Decrease0

Increase

15,000

Cumulative

10,40010,000
0

5,000
0

0
1,840

4th
periodIn principle, we focus on
maintaining the status quo. We
will also make an effort toimprove tenants’ satisfaction
through property management.

Approx. ¥24M

4,080
5th
periodCumulative total
rent (monthly)
increased
during 4th – 8thperiod:6th
period7th
period8th
periodNote: Renewed rents are compared with average rents prior to contract renewals and then classified into
increased and decreased rents. The amount of changes for each period refers to the aggregated amount ofmonthly rent changes between the renewed rents and the average rents. The cumulative total refers to theaggregated amount of monthly rent changes, rounded to the nearest ten-thousand

Change in the number of renewal contracts and the ratio of(# of contracts) rent increase/decrease for the renewal contracts

70
60
50

6.9%

Increase
Decrease

10.3%
7.5%
42

40

29

30
20

7.8%

60

15

9%

Rent increase

7%

Rent decrease

5%

Changes (right axis)

3%

12

10

Rents after renewals (renewed rents)

11%

(left
axis)

Results for 8th period（results for 7th period)

Ratio

Increased

8.1%（43.4%）

5.7%(10.3%)

Unchanged

77.9%(56.6%)(-)

Decreased

14.0%(0.0%)▲11.3%
(-)

1%

0
10
20

-2.7%
4th
period5th
period6th
period7th
period-1%
148th
period-3%Note: Ratio represent the changes of rents before and after contract renewals for all relevant
tenants. The figures are rounded to the first decimal place

Averagechanges

Note: The above figures reflect the rents for all contracts
renewed during the respective period, irrespective ofcontract terms. The ratios are based on rentable areas
and the average variances on average rents. All thefigures are rounded to the first decimal place

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12

Management of existing properties—taking advantage of portfolio size
Reduction of Rental operating expenses[Main activities in the 8th period]
Cost reduction bychanging
Electric power supplier

Reduction in building
maintenance expenses
by consolidating BMs

Reduction of repairs
and maintenance costs

Reduction of trust fees

・Increased efficiency through・ Additional change for 11
properties (out of 67
collective outsourcing
properties, provider changed(collective management) by area

・ Reduction of trust fees byreviewing the office work flow

Reduction by ¥11M/year

Reduction by ¥14.7M/year

・ Reduction in maintenance costs
as large-scale renovations havecycled out

for 42 properties)

Reduction by ¥2M/year
0.4%
reduction

1.3%
reduction

16.0%
reduction

26.5%
reduction
C.¥
C.¥50M
50M reduction(compared to theprevious period)
period)c.c.¥27.9M¥27.9M (annualized) costreduction(annualized)
cost
reductionthachieved
duringthe8Periodthachieved during the 8 Period
Collective management by consolidating BMs＜Future policy＞
Continued to reducebuilding maintenance costs
by utilizing the scale merit ofowning many properties andnegotiating strength
acquired through past
performance

25 properties divided into 3 areasand consolidate BMs for each area

Increased management quality,
service levels and businessefficiency
Z08BB第401号

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

13

Management of existing properties—reduced actual construction
costs & budget
Changes in depreciation and actual construction costs & budget(as of June 11, 2009)651< Future policy >We will reduce the budget for
major constructions due tohaving completed the bulk of
construction measures at manyof our portfolio properties.

549
929

(¥M)

Reduced construction fees through competitive bidding■Continued bidding for air conditioning system
Period# ofproperties

ReducedamountReducedratio

5th period

4

¥190M

24.4％

6th period

5

¥174M

39.3％

7th period

5

¥132M

31.6％

8th period

3

¥31M

10.3％

We have continued tosignificantly reduce
construction fees by utilizing
scale merits.

17 properties constructed

工事予算と実績の推移
through competitive bidding

9th
10th
period period
budget budget

5th
period6th
period7th
period8th
periodRetainedearnings (Note)

35

128

151

399

809

903

(Reference)
Cumulative
amount

35

163

314

713

1,522

2,425

Agile review of construction policies (October 2008)→ Retained earnings increased in 8th period
Note: Retained earnings refers to the amount of depreciation costminus the amount of actual construction costs & budget. The
amount do not reflect amortization.

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.

14

SECTION 4

Financial Strategies

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.

15

Stable financial management—diversified maturities andsources of funding
Debt financing with an emphasis on diversifying
repayment timings

Diversification of debt maturities

Amount of debt maturing in each 6 months (as of April 30, 2009)

Stable financing through good relationship withfinancial institutions especially megabanks, trustbanks and Development Bank of Japan
Breakdown of borrowing providers (Apr. 30, 2009)(￥B)

Short-term borrowings

Long-term borrowings

Investment Corporation Bonds

20.0
18.0
16.0
12.0

Borrowings from
Development Bank of Japan

7.03

10.0

18.53

8.0

Mitsubishi UFJ
Trust andBanking 8.3%

11.53

6.0

12. 28

4.0

9.97

8.00

6.38

2.0
0.0

Resona Bank
5.0%

9.00

14.0

2.00

0.03

2009
1H

2009
2H

2010
1H

2010
2H

2011
1H

2011
2H

2012
1H

5.00
3.00

3.00

2012
2H

2013
1H

3.00

2013
2H

2014
1H

2014
2H

2015
1H

2015
2H

2016
1H

Aozora Bank
13.8%

Balance of borrowings by borrowings providers(Unit: ¥B)
End of 7th
periodFixedFixed-rate debt・
debt・Debt balance by maturity period (As of Apr. 30, 2009)
Debt balance by maturity period

Floating interest rate debt

Short-term
borrwings
10B 10.1%¥15.5B 15.7%
Average interest
rate Note

Fixed interest rate debt
¥83.25B 84.3%

Average life
Proportion of
long-term debt

Current
portion of
long-term
borrowings
9B 9.1%

1.84%
2.5yrs89.9%

Note: The average interest rate above does not include upfront fees. The
average interest rate including upfront fees is 2.03%. “Fixed interest ratedebt” includes borrowings that were converted to fixed from floating
through interest rate swap

Long-termLong-termborrowings
borrowings
andandInvestment
Investment
Corporation
Corporationbonds
bonds¥79.75B¥79.75B
80.8%
80.8%

Sumitomo
Mitsui
Banking
Corporation
22.4%

Chuo Mitsui
Trust andBanking
16.7%
Development
Bank of Japan
13.8%

Bank of Tokyo
Mitsubishi UFJ
11.3%

2016
2H

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 1H is from Apr. 1 to Sept. 30, 2009)3
Balance of borrowings from Development Bank of Japan (excluding divided repayment amount) shown in

Proportion of floatingfloating-rate debt vs. fixedfixed-rate debt

Mitsui
Sumitomo
Insurance
Company
1.2%

Citibank
2.9%
Norinchukin
Bank 4.6%

End of 8th
periodDifference

Sumitomo Mitsui Banking Co.

18.95

19.45

+0.5

Chuo Mitsui Trust and Banking

14.5

14.5

-

Development Bank of Japan

11.0

12.0

+1.0

Aozora Bank

12.0

12.0

-

Bank of Tokyo Mitsubishi UFJ

9.8

9.8

-

Mitsubishi UFJ Trust andBankingResona Bank
Norinchukin Bank
Citibank

7.2

7.2

-

4.3
4.0
2.5

4.3
4.0
2.5

-

Mitsui Sumitomo Insurance

1.7

1.0

▲0.7

Chiba Bank
Total

0.8
86.75

0.0
86.75

▲0.8
-

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.

16

Stable financial management—conservative LTV management
Changes in LTV
50%
45.6%

45%
40%

38.7%

37.5%

＜Future policy ＞
Considering current credit
crunch/financial crisis on
global scale, we will continue
focusing on maintaining a
conservative leverage policy
and keep our LTV within a
specified range. We may also
reduce our LTV by sellingsome of our properties

47.0%
41.2%

41.4%

7th
period8th
period

38.9%

35%

35.3%

30%
1st
period2nd
period3rd
period4th
period5th
period6th
periodNote: LTV＝ Total debt ÷Total assets＜KRI’s policy up to the 7th period ＞
At normal times, LTV is maintained between
35% to c.50% in crusing level

Flexible fund raising through shelf registration

Achievements so far
・ LTV maintained at c.35%-50% by raising equity through 2 global offerings

Summary of
Shelf
Registration

Investment
Corporation
Bond

・Conservative LTV maintained through asset replacement from the 5th period
on anticipating declining market environment

Planned issue
amountPlannedissuance period

Credit Ratings and Investment Corporation Bond(As of April 30, 2009)

Name

Size

Ba1 (negative)st

1 Bond

¥9.0B

1.74%

5 yrs

2012/3/15

Japan Credit Rating Agency (JCR) A+ (negative)

2 Bond

nd

¥3.0B

2.37%

10yrs

2017/3/15

Rating agency
Moody’s

RatingInterest rate Maturity

Maturity date

Investment Unit Certificate
Primary

Secondary

¥100B

¥100B

¥15B

2 years from2009/2

2 years from2009/52 years from2009/5More than 2.5 years to maturity
More than 7.5 years to maturity

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

SECTION 5

Future Policies

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.

18

Management policies that reflect current financial and J-REIT
market environment
Current Policies
Financial crisis

Future Policies
Low leverage
Rising cap rate of offices

Theme

Marketenviron-environ
ment

Past Policies

Increase financial stability =“provision and reserves”
reserves”

Steps for growth

Acquisition/saleof properties
Financial・ Diversify maturities
・ Extend duration
・ Diversify funding methods

Management ofexisting properties

・ Sale of non-core properties
・ Acquisition of core properties(residentials, central urban
with new funds raised
retails, regional offices) to reduce・ Greater focus on investingleverage
mainly in mid-sized office・ Keep the cost of new acquisitions
buildings in Tokyo Metropolitan
within the range of properties
Proceed
area
sold
to
the
ShortShort-term measures
Growth measures
next step・ Raise new funds when changes
・ Diversify maturities
to the market environment are
・ Extend average life
perceived
・ Conservative leverage control
・ Flexible fund raising

・ Increase in asset scale
focused on mid-sized
office buildings
・ Concentrate investment
in Tokyo Metropolitan
area

・ Maintain stable cashflow from properties = Trust in the cashflow frommid-sized office buildings
・ Cost reduction, CS survey = Onsite focused management by
proprietary PMs
・ As a result, KRI successfully managed to maintain 95% occupancy

Stability of Cashflow

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.

19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.

20

Appraisal values and cap rates
(¥M)

No.
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A

1
2
3
4
5
6
7
8
9
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40

Property name
KDX Nihonbashi 313 Building
KDX Hirakawacho Building
Higashi-Kayabacho Yuraku Building
KDX Hatchobori Building
KDX Nakano-Sakaue Building
Harajuku F.F. Building
FIK Minami Aoyama Building
Kanda Kihara Building
KDX Shinjuku-Gyoen Building
Portus Center Building
KDX Kojimachi Building
KDX Funabashi Building
KDX Hamacho Building
Toshin 24 Building
Ebisu East 438 Building
KDX Omori Building
KDX Hamamatsucho Building
KDX Kayabacho Building
KDX Shinbashi Building
KDX Shin-Yokohama Building
KDX Yotsuya Building
KDX Minami Semba Dai-1 Building
KDX Minami Semba Dai-2 Building
KDX Kiba Building
KDX Kajicho Building
KDX Nogizaka Building
KDX Higashi-Shinjuku Building
KDX Nishi-Gotanda Building
KDX Monzen-Nakacho Building
KDX Shiba-Daimon Building
KDX Okachimachi Building
KDX Hon-Atsugi Building
KDX Hachioji Building
KDX Niigata Building
KDX Ochanomizu Building
KDX Nishi-Shinjuku Building
KDX Toranomon Building
Toranomon Toyo Building

8th period
Acquisition
vsAppraisal
price
Bookvalue
5,940
5,180
4,450
3,680
2,533
2,450
2,270
1,950
1,610
5,570
5,950
2,252
2,300
5,300
4,640
3,500
3,460
2,780
2,690
2,520
1,950
1,610
1,560
1,580
2,350
1,065
2,950
4,200
1,400
6,090
2,000
1,305
1,155
1,305
6,400
1,500
4,400
9,850

value
7,410
5,340
5,790
3,810
2,530
3,090
2,910
1,950
2,090
5,250
5,190
2,140
2,660
5,030
4,790
3,980
3,780
3,030
2,830
2,610
2,370
1,310
1,290
1,630
2,450
970
3,360
4,290
1,310
5,830
1,910
1,100
881
844
7,010
1,450
4,050
10,100(¥M)

CR

End ofvsvsacquisition 7th period bookvalue 8th period
6,254
24.7%
-3.5%
18.5%
4.9%
5,224
3.1%
-7.6%
2.2%
4.8%
4,483
30.1%
-9.2%
29.2%
5.0%
3,496
3.5%
-4.3%
9.0%
5.0%
2,522
-0.1%
-5.6%
0.3%
5.4%
2,486
26.1%
-5.2%
24.3%
5.6%
2,280
28.2%
-7.3%
27.6%
4.9%
1,866
0.0%
-3.9%
4.5%
5.0%
1,594
29.8%
-2.3%
31.1%
5.1%
5,046
-5.7%
-4.5%
4.0%
6.3%
5,807
-12.8%-18.9%-10.6%
5.0%
2,469
-5.0%
-10.5%-13.3%
6.2%
2,313
15.7%
-11.6%
15.0%
5.5%
5,223
-5.1%
-7.5%
-3.7%
5.6%
4,559
3.2%
-11.0%
5.1%
5.1%
3,477
13.7%
-2.7%
14.5%
5.2%
3,365
9.2%
-4.3%
12.3%
4.8%
2,890
9.0%
-5.9%
4.8%
5.4%
2,679
5.2%
-6.3%
5.6%
4.6%
2,490
3.6%
-6.5%
4.8%
5.7%
1,963
21.5%
-2.9%
20.7%
5.4%
1,535
-18.6%-14.9%-14.7%
5.6%
1,448-17.3%-17.8%-10.9%
5.6%
1,651
3.2%
-9.4%
-1.3%
5.7%
2,448
4.3%
-3.9%
0.1%
5.0%
1,130
-8.9%
-8.5%
-14.2%
5.2%
3,206
13.9%
-0.3%
4.8%
5.3%
4,220
2.1%
-12.8%
1.7%
5.4%
1,453
-6.4%
-8.4%
-9.8%
5.4%
6,339
-4.3%
-13.9%
-8.0%
5.4%
2,146
-4.5%
-5.0%
-11.0%
5.0%
1,287-15.7%-9.8%-14.5%
6.2%
1,331-23.7%-12.8%-33.8%
5.8%
1,480-35.3%-13.1%-43.0%
7.2%
6,619
9.5%
-4.2%
5.9%
4.8%
1,557
-3.3%
-5.8%
-6.9%
5.3%
4,864
-8.0%
-12.7%-16.7%
4.6%
9,902
2.5%
-9.0%
2.0%
4.7%

vs 7thperiod
0.1%
0.2%
0.2%
0.2%
0.3%
0.2%
0.2%
0.2%
0.2%
0.3%
0.2%
0.5%
0.2%
0.2%
0.2%
0.1%
0.2%
0.2%
0.1%
0.2%
0.2%
0.1%
0.1%
0.2%
0.2%
0.2%
0.0%
0.2%
0.2%
0.2%
0.2%
0.2%
0.3%
0.2%
0.2%
0.2%
0.2%
0.2%

No.
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
B
B
B
B
B
B
B
B
C
C
C

41
42
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
3
4
5
18
19
25
34
1
2

8th period
Acquisition
Appraisalvs
price
Bookvalue

Property name
KDX Shinjuku 286 Building
Karasuma Building
KDX Sendai Building
KDX Roppongi 228 Building
Hiei Kudan-Kita Building
KDX Shin-Yokohama 381 Building
KDX Kawasaki-Ekimae Hon-cho Building
Nissou Dai-17 Building
Ikejiri-Oohashi Building
KDX Hamacho Nakanohashi Building
KDX Kanda Misaki-cho Building
KDX Hakata-Minami Building
KDX Kitahama Building
Shin-toshin Maruzen Building
KDX Jimbocho Building
KDX Gobancho Building
KDX Nagoya Sakae Building
KDX Iwamoto-cho Building
KDX Harumi Building
KDX Hamamatucho Dai-2 Building
Office Building Subtotal
Court Mejiro
Apartments Motoazabu
Apartments Wakamatsu-Kawada
Venus Hibarigaoka
Residence Charmante Tsukishima
Court Shin-Okachimachi
Gradito Kawaguchi
Residential Subtotal
Frame Jinnan-zaka
KDX Yoyogi Building
Central Urban Retail Subtotal
Total

2,300
5,400
2,100
3,300
7,600
4,700
3,760
2,710
2,400
2,310
1,380
4,900
2,220
2,110
2,760
1,951
4,000
1,864
10,2502,200
193,910
1,250
1,210
1,180
1,800
5,353
878
1,038
12,7099,900
2,479
12,379218,998

value
2,360
5,680
1,640
2,410
8,030
3,420
3,300
1,870
1,850
2,010
1,090
4,490
1,810
1,920
2,510
1,630
3,530
1,650
10,6002,130
192,295
1,040
1,120
1,120
1,510
4,720
819
949
11,278
10,9001,980
12,880216,453

CR

End ofvsvsacquisition 7th period bookvalue 8th period
2,361
2.6%
-5.6%
0.0%
5.1%
5,526
5.2%
-2.4%
2.8%
5.5%
2,221
-21.9%-14.1%-26.2%
6.0%
3,454-27.0%-13.9%-30.2%
4.9%
7,636
5.7%
-1.5%
5.2%
4.8%
4,891
-27.2%-16.6%-30.1%
5.6%
3,929-12.2%-5.2%-16.0%
6.1%
2,706-31.0%-10.5%-30.9%
5.6%
2,499-22.9%-15.1%-26.0%
6.0%
2,396-13.0%-6.1%-16.1%
5.5%
1,397-21.0%-6.0%-22.0%
5.4%
4,917
-8.4%
-4.9%
-8.7%
6.3%
2,239
-18.5%-10.4%-19.2%
5.8%
2,178
-9.0%
-6.8%
-11.8%
5.4%
2,967
-9.1%
-5.6%
-15.4%
5.3%
2,026-16.5%-12.8%-19.5%
5.2%
4,166-11.8%-15.6%-15.3%
5.0%
1,873-11.5%-8.8%-11.9%
5.6%
10,152
3.4%
-0.9%
4.4%
4.7%
2,268
-3.2%
-4.9%
-6.1%
4.7%
5.3%
196,934
-0.8%
-7.6%
-2.4%
1,225
-16.8%-6.3%-15.1%
5.5%
1,206
-7.4%
-10.4%
-7.1%
5.4%
1,151
-5.1%
-6.7%
-2.7%
5.4%
-16.1%-9.0%-19.5%
6.7%
1,876
5,246
-11.8%-5.0%-10.0%
5.5%
864
-6.7%
-5.9%
-5.2%
5.3%
1,054
-8.6%
-7.9%
-10.0%
5.8%
5.7%
12,627-11.3%-6.7%-10.7%
10,073
10.1%
-7.6%
8.2%
4.5%
2,546
-20.1%-17.8%-22.2%
5.1%
4.6%
12,620
4.0%
-9.4%
2.1%
5.3%
222,182
-1.2%
-7.7%
-2.6%

vs 7thperiod
0.2%
0.2%
0.3%
0.1%
0.2%
0.2%
0.3%
0.2%
0.3%
0.3%
0.2%
0.0%
0.1%
0.3%
0.0%
0.2%
0.4%
0.3%
0.1%
0.2%
0.2%
0.3%
0.5%
0.4%
0.6%
0.3%
0.3%
0.4%
0.4%
0.2%
0.2%
0.2%
0.2%

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
3 As for KDX Nagoya Sakae Building, the price of land acquired at the time of the survey islisted above. The price including the building is ¥6,010M

Downside factors for appraisal values (compared to 7th period)
Change in cap rates
Change of expected rent in appraisal value
0.2%
-4.4%
Office Building
0.4%
-0.5%
Residential
0.2%-15.8%
Central Urban Retail

Breakdown of appraiser
Japan Real Estate Institute 33 properties
Daiwa Real Estate Appraisal 19 properties
Nippon Tochi-Tatemono 15 properties

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.

21

Appraisal profit/loss for office buildings (by area)(¥M)
1st period
2nd period
3rd period
4th period
5th period
6th period
7th period
8th period
Number of properties
12 properties 15 properties 29 properties 39 properties 44 properties 57 properties 59 properties 57 properties
Central Tokyo
87
376
4,195
7,493
12,253
14,782
11,9492,550
Other Tokyo metropolitan area
7
34
393
1,456
2,614
2,828
-408
-4,122Other regional areas
-166
-46
156
225
792
796
-821
-2,431
Appraisal profit/loss(office building)
-72
364
4,744
9,174
15,65918,406
10,720-4,003Central Tokyo
0.3%
1.0%
7.2%
9.7%
13.6%
13.2%
9.5%
2.0%
Other Tokyo metropolitan area
0.2%
0.6%
2.1%
5.0%
9.0%
6.6%
-1.0%
-10.5%
Other regional areas
-2.3%
-0.6%
1.5%
2.0%
3.7%
2.8%
-3.0%
-8.6%
Appraisal profit/loss rate(office building)
-0.2%
0.7%
5.4%
7.8%
11.2%
10.0%
5.5%
-2.4%
(¥M)

20,00020%

15,00015%

10,000

10%

5,000

5%

0

Note: The appraisal profit/loss above are rounded to the nearest ¥M.
Ratios are rounded to the first decimal place0%
1st period

2nd period

3rd period

4th period

5th period

6th period

7th period

8th period-5,000-5%
Appraisal profit/loss (office building)Appraisal profit/loss rate (office building)Downside factors for appraisal values of office buildings (by area)

Central Tokyo
Other Tokyo metropolitan area
Other regional areas

Change in cap rates
0.2%
0.2%
0.2%

Change of expected rent in appraisal value
-4.4%
-4.4%
-3.8%

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

Management of existing properties—Stability of mid-sized officebuildings (tenant diversification and rent levels)
Status of End-tenant for office buildings (End of 8th period)# of end-tenants(# of properties)

Tenant deposits (End of 8th period)

595 tenants

Breakdown by sector(57properties)

More than 10 months

418 tenants (72.9%)

Ratio of largest end-tenant

2.2%

5–10 months

133 tenants (23.2%)

Ratio of Top 3 end-tenants

5.5%

Less than 5 months

22 tenants (3.8%)(Note) The above ratio shows the ratio of top end-tenants
within the entire portfolio (based on leased area)(Reference) Credit of office end-tenant(Note) Tenant deposits of office buildings based on
their monthly rent (excl. CAM) which does
not include the rent from the residential
portion. Ratio is based on number of tenantsService
221tenants
38.6%

Actual performance in the past 1 year
(during 7th and 8th period)♦ More than 2 months rent delinquent：
5 tenants including 2 tenants who havecancelled their leasing contract

Telecom
15tenants
2.6%

Average rent level of office buildings in the portfolio
as of end of 8th Period
7th period

Individuals
24tenants
4.2%
Official (Others)
2tenants
0.3%

8th period

ChangeConstructions
29tenants
5.1%
Manufactures
80tenants
14.0%
Wholesale,retail & food
143tenants
25.0%Real Estate
22tenants
3.8%

Financial
36tenants
6.3%(Reference) Changes in rent levels (market data)
Tokyo 23-wards: Rent level of large/medium-sized building (June 1997 ＝100)
(%)

110

Central Tokyo¥20,500¥20,400▲0.7%

Other Tokyo Metropolitan
area¥14,400¥14,300▲0.4%

Other Regional Areas¥11,100¥11,000▲1.0%

Total for Office¥17,600¥17,500▲0.7%(Note) Figures show the total of weighted-average rent for each property based on floor area
divided by the number of properties in each area (rounded down to the nearest hundred yen).
Data refers office buildings that are more than 2F tall. Show the average rent for 57 properties(properties sold in the 8th Period are excluded)

Advantages of mid-sized office buildings
・reasonable rent level compared to large-sized office buildings
・diversified and multiple number of tenants → provides stable cashflow

100

Rent fluctuate less for mediumsized buildings compared to large
buildings

90

80

Large
buildings
大型 ビ ルMedium-sizedbuildings
中型 ビ ル70
1997 199 8 1999 200 0 200 1 20 02 2 003 2 004 2005 2006 2007 2008

(Note) Large buildings: Total floor area of 3,000 tsubo or more
Medium buildings: Total floor area of 1,000 tsubo to 3,000 tsubo(Source) Kenedix, based on CBRE data (the latest data as of March 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.

23

Management of existing properties—maximizing rent revenues inmedium- and long-term
Basic policies for property management (PM)♦ To maximize revenues in the medium- and long-term♦ To maintain/increase rent levels and occupancy ratios– Focus on “rent levels” and “occupancy ratios,” as thesource of NOI, to maintain/increase NOI(Reference) Comparison of vacancy ratios (market data)
Vacancy ratio (Miki Shoji)

KRI vacancy ratio (office)

8%
6.79%
7%

Leasing with emphasis
on “rent levels”

6%

Leasing with emphasis on“occupancy ratios”

5%

NOI＝ rent level x occupancy ratio - costs

4%

Sole PM activities by Property Management Division

Centralized PM

Ap
r2
00
9

20
08

20
09
Fe
b

O

ct

De
c

20
08

20
08
Au
g

20
08
Ju
n

Ap
r2
00
8

20
08
Fe
b

Kenedix REITManagement, Inc.
(the AssetManagement
Company）

20
07

2%

De
c

Kenedix Realty
Investment
Corporation(the Investment
Corporation)

Assetmanagement

4.4%

3%

Note:

The vacancy ratios by Miki Shoji show the average vacancy ratios for both existingand new buildings in business districts of Tokyo (Central Tokyo)
Source: Kenedix REIT Management has created the chart based on the data provided by
Miki Shoji

Continued management based on CS strategies
Changes in NOI yields (by type of property,
annualized)
4th
period5th
period6th
period7th
period8th
period8th period
beforeproperty/cityplanning
taxes

Office buildings

5.3％
5.3％

5.5％
5.5％

5.6％
5.6％

5.3％
5.3％

5.5
5.5％

5.6
5.6％

Central urban
retails

5.2％
5.2％

5.1％
5.1％

4.3％
4.3％

4.8％
4.8％

4.7％
4.7％

Residentials

5.4
5.4％

5.3
5.3％

5.3％
5.3％

5.3％
5.3％

Total

5.3％
5.3％

5.4％
5.4％

5.5％
5.5％

5.3％
5.3％

Note: Figures after property & city planning taxes for periods.
Ratios are rounded to the first decimal place

CS survey = Survey on Customer Satisfaction
・Customer (= tenants) survey conducted in cooperation with J.D.Power Asia Pacific・The questionnaire consists of a number of evaluation items ranging from hardware specificationsof building and equipment to software specifications including management/maintenance
First

SecondThird

Period of survey

Dec. 2005(2nd period)

July 2007(5th period)

July 2009 planned（9th period）
period）

4.7％# of target
properties Note

20

44

58

5.2％

Admin. Dept.190
Dept.190
Employees 950

Admin. Dept.446
Dept.446
Employees 2,348

－

5.2％
5.2％

# of
questionnaires
distributed

5.4
5.4％

5.5%
5.5%

Response rate

Admin. Dept. 84％
84％
Employees 78%
78%

Admin. Dept.88％
Dept.88％
Employees 81%－

Note: Including 1 central urban retail property

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

Stable financial management—purposes, influence and effect of
posting collateral
About 70% (on an appraisal basis) of assets are collateralized while the remainder (about 30%) is uncollateralized in order tosecure a certain level of flexibility and mobility in asset management.
Background of posting collateral

Achievements after posting collateral(Apr. 2009)

Collateral (April 2009)
Collateralized

Uncollateralized
Subprime
issue

First-everbankruptcy
of J-REIT

LehmanShock
Credit crunch

27 properties

No. ofproperties

40 properties¥60B (27.8%)

Total
appraisal value¥156.3B (72.2%)¥2,225M/property
Tokyo Metropolitan Area ¥53.8B
Other Regional Areas¥6.1B

Increasedlegal
liquidation

Lack ofbanks‘ lending
capacity due todeclines in stock
pricesPerception
Perception ofof financial
financial crisis
crisis(by(byMOF
MOF inin Dec.
Dec.2008)
2008)

Financial issues outstanding for
the Investment Corporation
・Shorten the borrowing period whenrefinancing (Borrowing period of 6months and 1 year)
・Lower the proportion of long-termborrowings
・Handle increasing negative market
reaction to each refinancing
transaction
・Fund securement for forward
commitment (July 2009)

OfficeResidential
Central urban retail¥53.0B¥5.0B¥1.9B

・Emphasis placed on small or

Size(Avg. Appraisal¥3,909M/property
value)
Area
Tokyo Metropolitan Area¥135.2B(Appraisal
Other Regional Areas¥21.1Bvalue)Type(Appraisal
value)

OfficeResidential
Central urban retail¥139.2B¥6.2B¥10.9B

Extension of
average life

Prepayment of existing debt andrefinancing to long-termborrowings (¥3.5B); temporaladvantage prioritized overfunding costs.

Diversificationof maturities

Refinancing to diversify maturities(6 months, 1 year, 2 years, 2.5
years and 3 years) (Apr. 2009).

Additional
cash on hand

Increased cash on hand by
selling uncollateralized properties(KDX Hakata Building and KDX
Koishikawa Building)Note:Amounts are rounded to the nearest ¥100M.
Ratio are rounded down to the first decimal place.

regional office buildings,
residential properties and central
urban retail properties

Debt situations before posting collateral
Borrowings before posting collateral
Repayment after posting collateral
Investment Corporation Bond(\B)

Borrowings after posting collateral
Borrowings from DBJ

25

Purpose of uncollateralized
properties
・To secure flexibility in asset
management (no conditions of
repayment at the time of propertysale)
・To minimize influence to existing
investment corporation bonds
・To secure cash on hand after saleof properties

20
2.5
9.0

2.5

2.0

11.23

11.53

10

5

Reactions from rating agencies
Moody’s: downgrade (Mar. 2009)
JCR: affirm (Apr. 2009)

3.0

15

9.5

13.58

16.03

3.5

6.47

1.0
2.0
3.38

0

3.0

3.0

0.03

2009
2009
2010
2010
2011
2011
2012
2012
2013
1H
2H
1H
2H
1H
2H
1H
2H
1H
Note:Shows debt amounts that mature in each period
1H is from Apr. 1 to Sep. 30 and 2H from Oct. 1 to Mar. 31 of the following year and not identicalwith the fiscal periods of the Investment Corporation (e.g. 2009 1H is from Apr. 1 to Sept. 30, 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.

25

Stable financial management—Borrowing list
Borrowing list

List of borrowings as of April 30, 2009
Balance
Dradown date Last repayment date(\M)

Short-term borrowings

Lender

b S
o h
r o
r r
o t
w i t
n e
g r
s m

1,500 Oct-31-2008

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,500 Apr-30-2009

Oct-30-2009

Mitsubishi UFJ Trust and Banking Corporation

1,000 Oct-31-2008

Oct-31-2009

Citibank Japan Ltd.

1,000 Nov-04-2008

Nov-02-2009

Resona Bank, Ltd.

500 Dec-08-2008

Dec-08-2009

1,000 Jan-13-2009

Jan-13-2010

The Chuo Mitsui Trust and Banking Co., Limited
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Current portionof long-termborrowings

b
o
o
f
r
t
r
e l
o
r o
w
m n
i
g
n
g

Citibank Japan Ltd.

500 Feb-27-2009

Feb-26-2010

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

2,000 Apr-30-2009

Apr-30-2010

Total Short-term borrowings

10,000Sumitomo Mitsui Banking Corporation (1,000), The Bank of Tokyo-Mitsubishi UFJ, Ltd (1,500)

2,500 Apr-25-2008

po Sumitomo Mitsui Banking Corporationrt Sumitomo Mitsui Banking Corporation (1,200), Mitsubishi UFJ Trust and Banking Corporation (1,300)
io Sumitomo Mitsui Banking CorporationnLong-term Borrowings

B
o
r
r
o
w
i
n
g
s

2,000 Oct-31-2007

Oct-31-2009
Jan-31-2010

2,000 Apr-02-2007

Apr-02-2010

9,000

Sumitomo Mitsui Banking Corporation (3,750), The Chuo Mitsui Trust and Banking Co., Limited (3,750),
Mitsubishi UFJ Trust and Banking Corporation (1,500), Resona Bank, Ltd. (500)

9,500 Aug-01-2005

Before posting collateral
Failure to comply with the following for 2
consecutive periods will result in posting collateralof 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

Jul-31-2010

500 Oct-31-2008

Oct-31-2010

Sumitomo Mitsui Banking Corporation (1,300), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (800),
Mitsubishi UFJ Trust and Banking Corporation (1,400)

3,500 Jul-31-2008

Jan-31-2011

Aozora Bank, Ltd.

2,000 Feb-29-2008

Feb-28-2011

Aozora Bank, Ltd.

1,000 Jun-30-2008

Feb-28-2011

The Chuo Mitsui Trust and Banking Co., Limited

1,250 Sep-22-2008

Mar-22-2011

Aozora Bank, Ltd.

2,000 Jul-15-2008

Mar-31-2011

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,000 Sep-30-2008

Mar-31-2011

The Norinchukin Bank

1,500 Apr-17-2007

Apr-16-2011

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

2,500 Apr-30-2009

Apr-28-2011

Aozora Bank, Ltd. (1,500), Mitsui Sumitomo Insurance Co., Ltd. (1,000)

2,500 May-01-2006

Apr-30-2011

Mitsubishi UFJ Trust and Banking Corporation

1,000 Jul-14-2006

Jul-13-2011

Sumitomo Mitsui Banking Corporation (2,200), The Chuo Mitsui Trust and Banking Co., Limited (1,000),Resona Bank, Ltd. (300)

3,500 Jul-31-2008

Jul-31-2011

The Bank of Tokyo-Mitsubishi UFJ, Ltd

1,500 Feb-29-2008

Aug-31-2011

The Chuo Mitsui Trust and Banking Co., Limited

1,000 Sep-01-2008

Sep-01-2011

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

5,000 Mar-31-2008

Sep-30-2011

Aozora Bank, Ltd.

3,500 Apr-30-2009

Oct-31-2011

The Chuo Mitsui Trust and Banking Co., Limited

1,000 May-01-2008

Nov-01-2011

The Norinchukin Bank

2,500 Dec-01-2006

Nov-30-2011

Sumitomo Mitsui Banking Corporation

2,500 Jan-10-2008

Jan-10-2012

Sumitomo Mitsui Banking Corporation

Reference：Summary of Covenants on borrowings

Oct-25-2009

2,500 Jul-31-2008

Total Current Portion of Long-term Borrowings

Resona Bank, Ltd.

L
o
n
g
t
e
r
m

Oct-30-2009

500 Feb-27-2009 Feb-29-2012(Note1)

The Chuo Mitsui Trust and Banking Co., Limited

2,000 Apr-02-2007

Aozora Bank, Ltd.

2,000 Apr-30-2009

Apr-27-2012

Resona Bank, Ltd.

1,500 Jun-30-2008

Jun-30-2012

Development Bank of Japan

1,000 Feb-27-2009 Aug-31-2012(Note2)

Development Bank of Japan Inc.

3,000 Jun-30-2008

Dec-28-2012

Development Bank of Japan Inc.

3,000 Sep-01-2006

Aug-31-2013

Development Bank of Japan Inc.

5,000 May-01-2006

Apr-30-2016

Total Long-term Borrowings

67,750Total Borrowings

86,750After posting collateral
2 years

2.5 years

3 yearsApr-02-2012
3 years

3.5 years

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 assetsthat were not posted as collateral)*LTV of collateralized properties=Total amount of
secured debt÷Total appraisal value of collateralized
properties
When “LTV of collateralized properties” exceeds acertain 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(Note 1) Repayment Method: Aug. 31, 2009 to Aug. 31, 2011: repayment of ¥10M every 6 months, and Feb. 29, 2012: repayment of ¥450M(Note 2) Repayment Method: Aug. 31, 2009 to Feb. 29, 2012: repayment of ¥20M every 6 months, and Aug. 31, 2012: repayment of ¥880M
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

Disclosure and IR activities
Debt investors

Individual investors

Domestic investors

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

Ongoing disclosure

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

Web disclosure

International investors

Disclosure through English website
http://www.kdx-reit.com/eng/

Website based on 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

Investor presentation

Hosting of one-on-one
meetings

One-on-one meeting(Reference)
Numbers of investor meetings

Individual investors briefing
One-on-one meetings(Debt IR)

(Reference)
KRI website access data(including conference calls)
7th Period

One-on-one meetings with lenders(during the 8th period)： 85

6th Period

7th Period

8th Period

12,43912,997

15,813

9,001

13,99013,829Domestic institutions

46

Press release
List of Properties

Domestic regional institutions

11

DPU・Earnings

3,345

5,853

10,052Disclosure Materials

5,685

7,492

9,692

Recent Events

4,774

6,371

8,451

International investors(Europe)

17International investors (US)29

Borrowings

1,573

5,143

7,015

International investors (Other)11

Occupancy

2,559

4,170

6,145

Total

114 calls

5,465

5,577

5,569

2,297

3,100

2,373

47,13864,69378,939Top page of KDRM
site
English website
Total accessOne-on-one meeting(Reference) Participation in theseminarfor individual investorsTo
be updated◆ # of visitors ： Total c. 3,000■IR Briefing Sessions
・ Participants：80
・ Survey responses：27■Handouts distributed
at KRI booth:・ Booklets： c.700
・ Asset management
reports： c.240
・ Briefing material：c.100

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.

27

KRI unitholders
Changes in investment units by unitholders
Individuals and others
Other domestic co.

Financial inst. (incl. securities)
Foreign co. and individuals

49.0

22.7

1st

29.0

8.5

48.0

6.8

# of units held
(unit)

16.0

12.4

47.0

15.6

2nd

Top 10 unitholders (as of April 30, 2009)

34.6

(%)

Goldman Sachs International

25,317 12.65

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

17,023

8.51

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

15,769

7.88

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

15,386

7.69

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

10,698

5.34

3rd

10.6

4th

6.8

46.5

6.4

40.3

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

9,344

4.67

5th 5.7

48.4

5.1

40.8

Deutsche Bank AG London-PB Non-Treaty Clients 613

8,431

4.21

Morgan Stanley & Company Inc.

5,339

2.66

The Chase Manhattan Bank, N.A. London Secs Lending
Omnibus Account

3,388

1.69

3,002

1.50

6th 5.4

49.4

5.0

40.2

7th

8.1

45.6

5.4

41.0

8th

10.8

42.5

0%

20%

40%

Sumitomo Mitsui Banking Corporation
Total

45.4

1.3
60%

80%

Individual and Others

Ratio
(%)

# of
units held
(unit)

Ratio
(%)

6,345

95.2

21,592

10.8

Financial Inst. (Incl. Securities co.)

66

1.0

84,966

42.5

Other Domestic Co.

103

1.5

2,670

1.3

Foreign Co. and Individuals
Total(Reference) Reporting of major unitholders
Submittedon

Name

Type of unitholders (as of April 30, 2009)# ofunitholder

Note: Ratios are rounded down to the second decimal place

100%

Note: Rounded to the first decimal place

154

2.3

90,772

45.4

6,668

100.0

200,000

100.0

Note: Rounded to the first decimal place

113,697 56.84

Tower Investment Management Co., Ltd.

# of units
held (unit)(%)

2009/5/12

22,621

11.31

Nomura Securities Co., Ltd.
2009/4/30
Nomura Asset Management Co., Ltd.
Nomura Securities Co., Ltd.
Citibank Japan Ltd.
2009/4/30
Nikko Asset Management Co. Ltd
Citigroup Alternative Investments LLC
Nikko Citigroup Ltd.

18,125
17,136989
17,307
16,255553
266
233
11,195
8,218
2,977

9.06
8.57
0.49
8.65
8.13
0.28
0.13
0.12
5.60
4.11
1.49

Citigroup Global Markets Ltd.

Fidelity Investments Japan Limited
2009/4/7
Fidelity Investments Japan Limited
FMR LLC
Notes: 1 Reports submitted up to 2009/5/12 from the PO on 2007/5/22
2 These are companies who has 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.

28

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

As of 2009/6/1
Highest price (trading price): 988,000 (2007/5/31)
Lowest price (trading price): 100,300（2008/10/20）

Volume (Unit)

Price (JPY)

8,000
20,000

Follow-on price
JPY 873,180

1,000,000
900,000

7,000

800,000

6,000
Listing price
JPY 580,000

Follow-on price
JPY 593,096

700,000

5,000
600,000
4,000
500,000
3,000
400,000
2,000

300,000

1,000

200,0000

100,000

2005/07/21 2005/12/21 2006/05/21 2006/10/21 2007/03/21 2007/08/21 2008/01/21 2008/06/21 2008/11/21 2009/04/21
VolumeClosing 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.

(As of the end of May 2009)29

Emphasis on mid-sized office buildings in Tokyo MetropolitanArea(as of the end of April 2009)

Office portfolio: 58 properties, with a total acquisition price of ¥193.9B
Acquisition
price (Tokyo
metropolitan
area)

Composition of office portfolio

Tokyo’s 23 wards
41 properties ¥141.5B

Acquisition price(Other regional
areas)

By acquisition priceOver ¥10B(1 property)¥7.5B–10B ¥10.2B(2 properties)¥17.4B

Central Tokyo1
34 properties¥123.9B
Niigata
1 property ¥1.3B

Miyagi1 property ¥2.1B¥1B–2.5B(28 properties)¥52.4B

Other 18 wards
7 properties¥17.6B

Greater Osaka area

¥5B–7.5B(8 properties)¥45.8B

5 properties ¥16.3B

Fukuoka
1 property ¥4.9B

Tokyo¥2.5b - ¥7.5B accounts for 57.7%

By gross floor area

Other regional
areas
14.7%

Chiba
1 property ¥2.2B

Over 10,000m2(15 properties)¥33.7B

Other Tokyo
metropolitan
area
21.3%

Aichi
1 property ¥4.0B２

Notes:
1

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

2¥4.0B is the price of the land for KDX Nagoya Sakae Building acquired on April 25, 20083

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 andare rounded to the first decimal place

Acquisition
# of
price
properties
(¥B)
49
165.2
Tokyo Metropolitan Area
Other Regional Areas

Total

Less than 3,000m2(15 properties)¥29.6B

Central Tokyo
63.9%

Kanagawa
6 properties ¥20.2B
Hachioji, Tokyo
1 property ¥1.1B¥2.5B–5B(18 properties)¥63.9B

3,000m2–10,000m2(37 properties)¥126.5B

Ratio（%）

3,000m2 - 10,000m2 accounts for
66.6%

85.2

9

28.6

14.7

58

193.9

100.0

Notes:
1 The amounts above are rounded to the nearest ¥100M
2 The charts above cover 57 properties excluding KDX
Nagoya Sakae building

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.

30

Portfolio overview (office buildings)(As of July 31, 2009)■ Office buildings (58 properties)
Area# of prop.

Completion²

Occupancy
ratio（%）³

Type

Area

# of prop.

Name

Location

Acquisition
price
（\M）1

Completion²

Occupancy
ratio（%）³

KDX Harumi Building

Chuo-ward, Tokyo

10,250Feb-2008

100.0%A-14

KDX Funabashi Building

Funabashi, Chiba

2,252

Apr-1989

100.0%

A-40

Toranomon Toyo Building

Minato-ward, Tokyo

9,850

Aug-1962

95.4%

A-61

KDX Hamamatucho Dai-2 Building

Minato-ward, Tokyo

2,200

Apr-1992

100.0%

A-46

Hiei Kudan-Kita Building

Chiyoda-ward, Tokyo

7,600

Mar-1988

100.0%

A-55

Shin-toshin Maruzen Building

Shinjuku-ward, Tokyo

2,110

Jul-1990

64.3%

A-37

KDX Ochanomizu Building

Chiyoda-ward, Tokyo

6,400

Aug-1982

100.0%A-33

KDX Okachimachi Building

Taito-ward, Tokyo

2,000

Jun-1988

100.0%A-32

KDX Shiba-Daimon Building

Minato-ward, Tokyo

6,090

Jul-1986

86.1%

A-57

KDX Gobancho Building

Chiyoda-ward, Tokyo

1,951

Aug-2000

85.7%

A-13

KDX Kojimachi Building

Chiyoda-ward, Tokyo

5,950

May-1994

86.7%

A-8

Kanda Kihara Building

Chiyoda-ward, Tokyo

1,950

May-1993

100.0%A-1

KDX Nihonbashi 313 Building

Chuo-ward, Tokyo

5,940

Apr-1974

100.0%

A-16

Toshin 24 Building

Yokohama, Kanagawa

5,300

Sep-1984

100.0%A-2

KDX Hirakawacho Building

Chiyoda-ward, Tokyo

5,180

Mar-1988

100.0%KDX Shin-Yokohama 381 Building

Yokohama, Kanagawa

A-17

Office building

Location

A-60

A-47

Tokyo
metropolitan
area

Name

Ebisu East 438 Building

Shibuya-ward, Tokyo

4,700
4,640

Mar-1988
Jan-1992

Jun-1992

100.0%

85.4%

1,580

Oct-1992

100.0%

83.4%

A-38

KDX Nishi-Shinjuku Building

Shinjuku-ward, Tokyo

1,500

Oct-1992

100.0%A-31

KDX Monzen-Nakacho Building

Koto-ward, Tokyo

1,400

Sep-1986

100.0%

Jan-1987

100.0%

4,400

Apr-1988

78.6%

A-18

KDX Omori Building

Chuo-ward, Tokyo
Ota-ward, Tokyo

4,200

Nov-1992

91.9%

3,760

Feb-1985

100.0%

3,680
3,500

Jun-1993
Oct-1990

100.0%

1,610

4,450

KDX Hatchobori Building

100.0%

Mar-2008

Koto-ward, Tokyo

Minato-ward, Tokyo

A-4

Oct-1989

1,864

Shinjuku-ward, Tokyo

Chuo-ward, TokyoKDX Kawasaki-Ekimae Hon-cho Building Kawasaki, Kanagawa

1,950

Chiyoda-ward, TokyoKDX Kiba Building

KDX Toranomon Building

A-48

Shinjuku-ward, Tokyo

KDX Iwamoto-cho Building
KDX Shinjuku-Gyoen Building

Higashi-Kayabacho Yuraku Building

Shinagawa-ward, TokyoKDX Yotsuya Building

A-9

A-3

KDX Nishi-Gotanda Building

A-23
A-59

A-26

A-39
A-30

Tokyo
metropolitan
area

Office building

Type

Acquisition
price
(\M)1

93.1%
94.5%

A-19

KDX Hamamatsucho Building

Minato-ward, Tokyo

3,460

Sep-1999

75.3%

A-45

KDX Roppongi 228 Building

Minato-ward, Tokyo

3,300

Apr-1989

61.1%

A-29

KDX Higashi-Shinjuku Building

Shinjuku-ward, Tokyo

2,950

Jan-1990

97.0%

A-20

KDX Kayabacho Building

Chuo-ward, Tokyo

2,780

Oct-1987

100.0%A-56

KDX Jimbocho Building

Chiyoda-ward, Tokyo

2,760

May-1994

A-49

Nissou Dai-17 Building

Yokohama, Kanagawa

2,710

A-21

KDX Shinbashi Building

Minato-ward, Tokyo

A-5

KDX Nakano-Sakaue Building

A-22

A-52

KDX Kanda Misaki-cho Building

Chiyoda-ward, Tokyo

1,380

Oct-1992

100.0%A-34

KDX Hon-Atsugi Building

Atsugi, Kanagawa

1,305

May-1995

100.0%A-35

KDX Hachioji Building

Hachioji, Tokyo

1,155

Dec-1985

85.6%

A-28

KDX Nogizaka Building

Minato-ward, Tokyo

1,065

May-1991

100.0%A-58

KDX Nagoya Sakae Building

Nagoya, Aichi

7,550

Apr-2009

30.4%

A-12

Portus Center Building

Sakai, Osaka

5,570

Sep-1993

87.9%

A-42

Karasuma Building

Kyoto, Kyoto

5,400

Oct-1982

88.6%

A-53

KDX Hakata-Minami Building

Fukuoka, Fukuoka

4,900

Jun-1973

95.1%

A-54

KDX Kitahama Building

Osaka, Osaka

2,220

Jul-1994

100.0%A-44

KDX Sendai Building

Sendai, Miyagi

2,100

Feb-1984

91.2%

100.0%A-24

KDX Minami Semba Dai-1 Building

Osaka, Osaka

1,610

Mar-1993

96.9%

Jul-1991

100.0%A-25

KDX Minami Semba Dai-2 Building

Osaka, Osaka

1,560

Sep-1993

88.1%

2,690

Feb-1992

100.0%A-36

KDX Niigata Building

Niigata-shi, Niigata

1,305

Jul-1983

65.7%

Nakano-ward, Tokyo

2,533

Aug-1992

88.8%

197,461

Avg. 20.0 years

91.7%

KDX Shin-Yokohama Building

Yokohama, Kanagawa

2,520

Sep-1990

93.1%

A-6

Harajuku F.F. Building

Shibuya-ward, Tokyo

2,450

Nov-1985

100.0%

A-50

Ikejiri-Oohashi Building

Meguro-ward, Tokyo

2,400

Sep-1988

91.3%

A-27

KDX Kajicho Building

Chiyoda-ward, Tokyo

2,350

Mar-1990

88.4%

A-51

KDX Hamacho Nakanohashi Building

Chuo-ward, Tokyo

2,310

Sep-1988

100.0%A-15

KDX Hamacho Building

Chuo-ward, Tokyo

2,300

Sep-1993

91.9%

A-41

KDX Shinjuku 286 Building

Shinjuku-ward, Tokyo

2,300

Aug-1989

100.0%A-7

FIK Minami Aoyama Building

Minato-ward, Tokyo

2,270

Nov-1988

100.0%

Other
regional
areas

Office Building (58 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. Average age subtotal is shownas the weighted-average portfolio age based upon acquisition prices with a base date of July 31, 2009 and isrounded down to the nearest first decimal place. The weighted-average age of the 66 properties held as ofJuly 31, 2009 is 18.7 years.
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to the first decimal place.
Average occupancy ratio of 66 properties held as of July 31, 2009 was 92.4%．

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

Portfolio overview (central urban retail / residential properties)■ Central urban retail properties (2 properties)
CentralUrban
Retail

Typ e

Area

Tokyo
Metro
pori tanarea# of prop.

Name（As of July 31, 2009)

Location

Acquisition
price
（\M）1

Fr am e Jinnan-zaka

Shibuy a-ward, T ok yo

9,900

Mar-2005

93.6%

C-2

KDX Yoyogi Building

Shibuy a-ward, T ok yo

2,479

Aug-1991

100.0%

12,379Avg. 7. 0 years

94.9%■ Residential properties (6 properties)

Resid en tial

Area

Tokyo
Metro
pori tan
area

Other
Regional
areas

Occu pancy
ratio （%）³

C-1

Central Urban Retail (2 properties ) Subtotal

Type

Com pletion²# of prop .

Name

Lo cation

Acquisition
price
（\M）1

Com pletion²

Occu pancy
ratio （%）³

5,353

Jan-2004

100.0%

B-19

Residence Charm an te Tsukishim a Chuo-ward, Tokyo

B-3

Co urt Mejiro

Shinjuku-ward, Tokyo

1,250

Mar-1997

90.2%

B-5

Apartm en ts Wakamatsu-Kawada

Shinjuku-ward, Tokyo

1,180

Feb-2004

97.8%

B-34

Gradito Kawaguchi

Kawaguchi, Saitama

1,038

Feb-2006

100.0%

B-25

Co urt Shin-Okachim achi

Taito-ward, Tokyo878

Oct-2005

92.4%

B-18

Venus Hib ar igaoka

Sapporo, H ok kaido

1,800

Mar-1989

96.9%

11,499Avg. 8.2 years

97.3%

Initialacquisition
price
（\M）

Sales price（\M）

Sales date

Residential (6 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 July 31, 2009 (rounded down to the nearest firstdecimal place)
3.Occupancy ratio is calculated by dividing leased area by leasable area androunded to the first decimal place. Ratios are calculated as of July 31, 2009
4.We sold Apartments Motoazabu(B-4) on June 23, 2009.

■ Properties sold during the 8th period (2 office buildings)

Officebuilding

Type

Area

# of prop.

Name

LocationTokyo
metroplitan
area

A-10

KDX Koishikawa Building

Bunkyo-ward, Tokyo

704

670

Apr-2009

Otherregional area

A-43

KDX Hakara Building

Fukuoka, Fukuoka

2,350

2,000

Apr-2009

Name

Location

As of August 27,2009
Initialacquisition
price
（\M）

Sales price（\M）

Sales date

Type

Area

# of prop.

Residential■ Properties sold the 9th period (2 Residential properties )Tokyo
metroplitan
area

B-4

Apartments Motoazabu

Minato-ward, Tokyo

1,210

1,052

Jun-2009

B-5

Apartments Wakamatsu-Kawada

Shinjuku-ward, Tokyo

1,180

930

Aug-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.

32

(Reference data 1) Office building market environment
1．Breakdown of offices based on the number of
employees per office (Tokyo)
Tokyo)
100 employees and above
1.6%
30–99 employees
5.0%

2．Breakdown of office buildings by GFA (tsubo(tsubo))More than
3,000 tsubo
5.0%

Potentially strong demand
for mid-sized office buildingby tenants

5003,000 tsubo
28.6%

10–29 employees
15.7%

Less than
500 tsubo
66.4%

1–9 employees
77.7%

Broad based stock of midsized office buildings

Ratio of offices with 1-29
employees: 93.4%(Source) Survery 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 were surveyed by CB Richard Ellis Research Institute. The above data may
not include the data of all properties in the said 5 wards.

(Source) KDRM, based on Tokyo office statistics report asof 2006 (MPHPT Statistics Bureau)

2．Changes in the Offered rent and Vacancy ratio in Central Tokyo(￥per tsubo)

Offered rent

Vacancy ratio

24,000

(%)
9
8
6.79
7
6
5
4
3
2
1
0

monthly

22,00020,0008.12

7.36

18,0006.10

16,0005.17

14,000

5.04

4.72

4.22

4.03

3.77

3.17

12,000

2.89

6.05

5.60

4.93

2.65

/1

/2

/3

/4

20
09

20
09

20
09

20
09

/1
2
20
08

/1
2
20
07

/1
2
20
06

/1
2
20
05

/1
2
20
04

/1
2
20
03

/1
2
20
02

/1
2
20
01

/1
2
20
00

/1
2
19
99

/1
2
19
98

19
97

/1
2

10,000(Source) Miki Shoji “Latest Office Building Markets in Tokyo’s central 5 wards” (survey as of the end of May 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.

33

(Reference data2) Market environment for office buildings
1. 23 wards of Tokyo: rent levels for large buildings andmedium-sized buildings

2. Cap rates of properties in Tokyo and local cities(1,000yen/
Tsubo)
30

(%)
10.0

Large

Tokyo

Osaka

NagoyaFukuoka

8.0

Medium-sized
25¥24,200

20

6.0

6.3％
6.0％
5.7％

4.0

4.5％

¥18,300
15

2.0
2001/41997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

2003/4

2005/4

2007/4

2009/4

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 CBRE (the latest values as of 2009/3)

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
Source: Created by Kenedix based on the data complied by Japan Real Estate Institute （as of 2009/4）

3. Changes in rent levels by region

4. Changes in vacancy ratios by region(1,000 yen/
Tsubo)
25

(%)

16.0

Tokyo

Osaka

Nagoya

Tokyo

14.0

Fukuoka¥21,000
20

Osaka

NagoyaFukuoka

14.2％

12.0

11.6％

10.0
15

¥12,700¥11,500¥10,000

10

5
2002

8.0

8.4％

6.0

6.8％

4.0
2.0

2003

2004

2005

2006

2007

2008

2009

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)
Source: Created by Kenedix based on the data complied by Miki Shoji (the latest values as of 2009/4)

2002

2003

2004

2005

2006

2007

2008

2009

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)
Source: Created by Kenedix based on the data complied by Miki Shoji (the latest values as of 2009/4)

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

Summary financials for 8th period — Income Statement■ Comparison with forecasts for 8th period (as of Dec. 11, 2008)■ Comparison of 8th period (to Apr.
Apr. 2009) and 7th period (to Oct. 2008)
7th 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（※1）

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

(*1)
(*2)

Other expenses:
Other operating expenses:

8th period

2008/5/1

2008/11/1

2008/10/31

2009/4/30

Difference
(\M)

(¥M)

(\M)

(\M)

7,111
5,847
1,263
1,045
250
668
126

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

8,156

8,204

299

-

8,456
792
611
406
188
234
1,445
3,678
4,477
5,923
442
190
4,311
4,144
14
689
114
145
5
41
5
32
1,034
3,124
3,124
0
3,123
0
3,123

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

121
138 2 properties acquired in 7th period fully contributed
▲17
▲74
▲9
▲109 Due to seasonal variability
44 Cancellation fee, etc
48▲299 Profit on sale of 2 properties in 7th period
▲252
7
▲33
88
▲50
▲71
▲16
▲75
123
107
492
▲8
20
429
▲681
▲3
56
▲1
▲38
▲11
5
▲689
▲689
▲689
▲689

Forecast

Results DifferenceNote

Due to seasonal variability
Increase in taxes for 6th period acquisition
Less repairs and maintenanceLess leasing cost

Loss on sale of 2 properties in 8th period

Comments (difference between revised
forecasts and results)

・Delayed start of leasing
・Decrease in utilities income

Operatingrevenue

8,298

8,204

▲94

Operatingexpenses

4,357

4,740

・Loss on sale of 2 properties (492)+383 ・Decrease in leasing and utilities
expenses, etc.

Operating profit

3,941

3,463

▲478 -

Non-operating
expenses

1,067

1,039

▲28 -

Interest
expense, etc.

1,007

966

▲41

Net income

2,880

2,434

Distribution per
unit# of properties

・Mainly due to decreased financing
related expenses▲446 ・Loss on sale of 2 properties (▲ 492)

¥14,400 ¥12,172 ▲¥2,228 69

67▲2 ・2 properties soldIncreasing interest
Syndicate loan fee etc. in 7th Period

Undeducted consumption tax in 7th period

Insurance, trust fee, etc.
Directors’ compensation, Asset custody fees, Administrative service fees, Audit fees

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

Summary financials for 8th 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

7th period
8th period
As of Oct. 30, 2008 As of Apr. 30, 2009
(%)
(%)
（\M）
（\M）
13,465
5.6
15,941
6.7
6,799
9,981
6,230
5,626
435
333
226,028
94.3
222,69993.3
225,510
221,895
10,571
10,59029,093
29,10459,03257,475
126,813
124,725
285
286
285
285
1
232
517
12
11
213
498
6
6
155
0.1
103
0.2
15
10
51
45
88
47
239,648 100.0
238,745 100.0
26,151407
24,000
321
1,238
184
85,40912,00062,750
1,515
9,128
16
111,561
124,9733,123▲9
128,087
239,648

10.9

35.6

46.6

53.4
100.0

21,273304
19,000
310
1,173
484
90,073
12,00067,750
1,536
8,770
16
111,346
124,9732,434▲ 10
127,398
238,745♦

Cash and bank deposits: increased by ¥3,182M(Total proceeds from the sale of KDX Koishikawa Building and KDX Hakata
Building: ¥2,670M)♦

Property, plant and equipment: decreased by ¥3,108M(Initial acquisition price of the sold assets: ¥3,054M)♦

Increase in upfront fees

8.9

Cashflow statement
37.7

7th period
8th period
As of Oct. 31, 2008 As of Apr. 30, 2009
（\M）

46.6

53.4
100.0

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

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.

9,279▲14,377
5,659
561
11,141
11,703（\M）
6,961▲1,831▲3,121
2,007
11,703
13,71136

Management results and future outlook
8th period

GoingforwardExisting properties：
properties：
stable cashflow

Existing properties ：stable cashflow

Changes in asset size
(¥B)
250

Achievement of acertain asset size
Stable phase

Sustained
growthGrowth phase

200

Property
Propertyacquisitionacquisition

150

Property
Propertyacquisitionacquisition

Financial

Financial

100
50
0
1st
2nd
3rd
4th
5th
6th
7th
8th
period period period period period period period period
Offices

Central urban retails

Higher priority on financial
stability due to current
financial contraction

Maintain balance between
Property acquisition and
Financials

Residentials

Changes in Distribution per Unit(¥)
18,000Stable distribution

16,000Market environment outlook

14,00012,00010,000
8,000
6,000
4,000
2,000
0

Real estate market

Financial market

・Increase in number ofproperty sale and transactions
・Attractive property yields
・Opportunities for acquisitionof new properties

・Recovery of debt liquidity
・Corresponding policy
・Lower implied cap raterequirement for REITs

1st
2nd
3rd
4th
5th
6th
7th
8th
period period period period period period period period
Profit from sale (net)
Loss from sale
DPU (excluding profit from sale)

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

Regulations related to J-REITs and real estate market
AnnouncedbyAnnouncedon

Item"Measures to counter
Increase financial and economic stability. Measures for stabilization of financial markets
difficulties in people’s daily (meeting by the government and the ruling parties on new economic policies, and Ministerial
lives"
Meeting on Economic Measures ） →<second supplementary budget of FY 2008 passed on
2009/1/27>(Government)

2008/10/30

GeneralAcknowledgment of risks
related to disorder withininternational financial
markets

Based on the provisions in Article 22-(3) of Japan Finance Corporation Law, it was
acknowledged that it was critical for designated financial institutions to engage in activities forsupporting corporations hit by the financial crisis (“financial crisis response activities”)

MOF

2008/12/11

Finance“Implementation of measures
for financial crisis response"

Start of loan supply as a designated financial institution. *financial crisis response
activities are activities that are based on the Japan Finance Corporation Law to provide
financing backed by credit lines from Japan Finance Corporation to companies suffering fromthe financial crisis. Loans are provided by financial institutions designated by the Japanese
government (“designated financial institutions”) in times of financial disorders in the Japaneseand international economy or outbreak of specific crisis such as large-scale distress

DBJ

2008/12/11

Finance“Emergency measures forstimulating residential andreal estate markets"

Financing support provided to residential and real estate companies through Japan FinanceCorporation’s corporate loans (Crisis Response Facilitating Operations); improvement of thegeneral environment for mergers of J-REITs

MLIT

2008/12/15

Finance /Consolidation(Government)

2008/12/19

GeneralAmendments to “Guidelines
on Eligible Collateral "Investment corporation bonds (investment corporation bonds that are rated AA or higher and Bank of Japan
Loans on Deeds etc ) will be accepted as eligible collateral for BOJ’s provision of credit. BOJ
also adds CPs issued by REITs to the list of CP purchased with repurchase agreements.

2009/1/22

FinanceComprehensive guideline forregulating Financial
instrument traders

Points of concern when merging investment corporations：when paying out money accrued
due to the merger, check Investment Law Article 147 –(1)-2 which includes statements on theamount payable due to a merger

FSA

2009/1/30

Consolidation“Changes to the policy for
financial crisis response
activities"- targets covered by the Crisis Response Facilitating Operations (receivers of loans):
Medium-sized companies experiencing temporary business / cash-flow difficulties but are
expected to improve business in the long term with management expected to become morestableJapan FinanceCorporation

2009/1/30

Finance

Outline of related regulations“Emergency measures toCountermeasures on the financial markets and against cash-flow problems ; Cash-flow
defend people’s daily lives" support to large and medium-sized corporations through corporate loans backed by Japan
Finance Corporation (financial crisis response activities) (Ministerial Meeting on Economic
Measures） →<budget of FY2009 passed on 2009/3/27>

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

38

Regulations related to J-REITs and real estate market
Outline of related regulations

AnnouncedbyAnnouncedon

Item

Inquiries on tax treatment oftransactions

Answers to FSA’s inquiries on “judgment about appropriateness of a merger by investment
corporations for joint business operation"

National Tax
Agency2009/3/19

Consolidation

Partial amendments toSpecial Taxation Measures
Law

Revision of Conduit Rules （accounting profit accrued due to negative goodwill shall be
deducted from the amount of distributable profits）, enacted in 2009/4(Government)

2009/3/31

Consolidation“Countermeasures toAddress the Economic
Crisis"Joint meeting by the government, the ruling parties and the Ministerial Meeting on Economic
Measures•Facilitate residential / land financing （establishment of a government/private sector fund and/or
increase funds supply to J-REITs by institutions including the Development Bank of Japan）(Government)

2009/4/10

General(Secretariat:
ARES)

2009/6/2

Finance/Consolidation“Forum for establishment of a The “report on the working group’s examination process” included statements on following
property investment market
matters for J-REITs : 1.need for consolidation, 2.corporate governance, 3.financeto be trusted by investors"（5th meeting）

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

39

Shareholders of AM company (shareholders partly changed) andstructure of the Investment Corporation
Change in shareholders of Kenedix REIT Management
Background and Objectives

Schedule of shareholder change• Enhance stability and strength of theInvestment Corporation’s future strategy for
growth• Participation of a partner with substantial
property supply capabilities• Shift from sole shareholder to multiple
shareholders structureName

2-2-9 Shimbashi,
Shimbashi, MinatoMinato-ku,
ku, Tokyo# ofShares6,450• General meetingof unitholders• Board of directors• Accounting auditor

Kenedix, Inc.
ITOCHU Corporation
Total

2-2-9 Shimbashi, Minato-ku, Tokyo
2-5-1 Kita-Aoyama, Minato-ku, Tokyo-Real
estate etc.

(%)

100

Change from sole shareholder toShareholders
multiple shareholders structure(After stock transfer)
Address

InvestKRI

2008/12/19
Execution of the stock transfer

Address

Name

Unitholders

2008/12/11
Stock transfer approved by the AssetManagement Company

Shareholder(Before stock transfer)

Kenedix,
Kenedix, Inc.

Structure of the Investment Corporation

Kenedix, Inc.
ITOCHU Corporation
Entrust asset
management

Shareholders of AM

Invest# ofShares

5,805
645
6,450

(%)

90
10
100

Kenedix REIT Management, Inc.
Asset management andproperty managementcompanies
Employees

Management

Instructions, etc.

Profile of ITOCHU Corp.
Name
Incorporated
Representative
CapitalPrincipal business

ITOCHU Corporation (listed on TSE Section 1)
1949/
1949/12
Eizo Kobayashi¥202,241M
202,241M
General trading firm

Building maintenancecompany, real estate rental
agent, etc.

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

40

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 June 11, 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
periodCompliance committee

7

7

7

8

6

8

9

8

Asset management
committee

21

35

39

39

38

38

52

44

Board of directors

9

7

9

8

9

7

9

8

Board of directors ofInvestment Corporation

11

7

7

9

7

7

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%)

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

41

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

Taisuke Miyajima
CEO & President

Yuuji Kamimura

Investmentcommittee

Compliancecommittee♦

Worked for 10 years for Sojitz Corporation（incl. Construction Department）♦

After joining Kenedix, he worked for Kenedix Advisors
before being transferred to Kenedix REIT Management

Kenji Ajitani
Director & General Manager,
Investment Management
Division

Representative
director
Taisuke Miyajima♦♦

Investment
management div.
Kenji Ajitani

Property
management div.
Masashi Ohwa

Financialplanning div.
Masahiko Tajima

Business
administration div.
Teruo Nozaki♦ 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
bodiesWorked 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

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

42

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.

43