Kenedix Realty Investment Corporation
7th Period Results (Ending October 2008)
April 2009
Kenedix REIT Management, Inc.

Updated 8th period・（9th period )earnings forecasts(page4) on April 2009
Updated Financial Strategies section(page16・18) on April 2009http://www.kdx-reit.com/eng/Management policies based on J-REIT market environment
Current
situation

New investments

Limited increase in cap
rates for office buildings
in central Tokyo
WACC is on the rise.

Internal growth

Raised the ratio of
office buildings to 89%

Management policies
for the time being

Raised the level of NOI
yield
Raised rents for
new/existing tenants

Changes in leasing
market/tenant trends
caused by the
economic downturn

Emphasis on
diversified maturities
and relations withbanks
Conservative interestbearing debt ratio

Near-term refinancing
availability is watchedclosely.
Importance of low
interest-bearing debt
ratio

Portfolio management

AUM reached over
￥200B, 69 properties

Financial

External growth

Achievements♦ Investments only within the scope of replacement of assets♦ Sale of properties: Residentials, central urban retails, and regional
offices are high on the list of properties for sale
♦ Partial investment by ITOCHU to Kenedix REIT Management for
property information

Management of existing properties♦ Shorten vacancy periods and maintain high occupancy ratios throughdynamic and flexible leasing activities♦ Refrain from negotiations for rent increases with existing tenants, inprinciple

Financial policies♦ Further reduce interest-bearing debt ratio♦ Increasing cash position♦ Continue to maintain good relations with financial institutions

We focus on strengthening the financial base to seize
regrowth opportunities upon market upturn, while securing
stable cash distributions.
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

1

SECTION 1

7th Period Financial Results (Ending October 2008)

7th period financial results—Performance highlights
Performance
5th period
results(to Oct. 2007)

6th period
results(to Apr. 2008)

7,208

8,582

8,456

-

512

299

▲213 7th period: Profit from sale of ZARA Tenjin Nishi-dori and Hakata Ekimae Dai-2

Rental business profit

4,002

4,182

4,477

+294 +7.0% (Increase(Increase in rental revenues substantially exceeded increase in expenses
expenses))

Depreciation

1,392

1,430

1,445

+15 -

Net income

2,792

3,342
3,342

3,123
3,123

▲218

Net operating income (NOI)

5,394

5,612
5,612

5,923

+310 +5.5% (Net Operating Income： Rental revenues – Property-related expenses +Depreciation)

FFO (Funds from operation)

4,184

4,259

4,269
4,269

+10 Net income + Depreciation – Profit/Loss from property sale

Number of units outstanding

200,000units(¥M)

Operating revenues
Profit/Loss from property sale

FFO per unit
Distribution per unit

7th period
Difference
resultsof 6th & 7th(to Oct. 2008)
period(▲652M from 6th period)▲126 Mainly caused by decrease of profit from property (▲6th period: Net profit/loss from sale of 23 residentials
Building

200,000units 200,000units¥ 20,920¥ 21,297¥ 21,345
21,345¥ 13, 960

¥ 16,711¥ 15,618

Notes(Reference)IIf the profit/loss from property sale deducted：
deducted
7th period ¥2,823M
6th period ¥2,829M- No new issue＋¥48 Same as 6th periods’ FFO per unit
deducted▲¥1,093 (Reference)IIf the profit/loss from property sale deducted：
7th period ¥14,100

6th period ¥14,100

Financial ratio
7th period Difference of
5th period
6th period
results
results
results
6th & 7th
Notes
(to Oct. 2007) (to Apr. 2008) (to Oct. 2008)
periodTotal assets

213,763

230,520

239,648＋9,128 ＋3.9%

Total unitholders’ equity

127,761

128,314

128,087▲227 ▲0.2%

Total unitholders’ equity per unit

¥ 638,809¥ 641,570¥ 640,437▲¥1,133 Net asset value after distribution adjustment: ¥624,859

Interest-bearing debt ratio

35.3%

38.9%

41.2%

+2.3％

Increase due to acquisition of new properties

Unitholders’ equity to total assets

59.8%

55.7%

53.4%

▲2.3%

Decrease in equity capital ratio due to increase in debts and borrowings

77

68

69

+1

248,653.07㎡

248,625.52㎡

256,214.30㎡

96.9%

95.9%

95.6%

Number of properties
Total leasable floor area
Occupancy ratio+：Office（3） ▲：Office（1）、central urban retail（1）+7,588.78㎡ ＋3.1%▲0.3%

95.7% for offices, 94.7% for central urban retails, 96.7% for residentials

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

3

8th period ･（9th period)earnings forecasts
Revisions to Operating forecasts for 8th period (to April 2009)( As of April 22, 2009)
9th period
forecasts(to Oct. 2009)
as of
Apr.22,2009

7th period
results(to Oct. 2008)Ａ

8th period
forecasts(to Apr. 2009)
as ofDec.11,2009
Ｂ

8th period
forecasts(to Apr. 2009)
as of
Apr.7,2009
C

Operating revenues

8,456

8,298

8,236

▲220

▲62

8,088

Operating expenses

4,311

4,357

－

－

－

－

2,233

2,256

－

－

－

－

1,445

1,428

1,428

▲17

0

1,465

Operating income

4,144

3,941

－

－

－

－

Non-operating expenses

1,034

1,067

－

－

－

－

948

1,007

990

＋42

▲17

1,075

Ordinary income

3,124

2,881

2,361

▲763

▲520

2,561

Net income

3,123

2,880

2,360

▲763

▲520

2,560

Number of units outstanding

200,000

200,000

200,00000

200,000

Distribution per unit

15,61814,40011,800▲3,818▲2,60012,800NOI (Rental revenues – Property-related expenses+ Depreciation)

5,923

6,042

－

－

－

－

FFO (Net income + Depreciation –Profit/Loss from property sale

4,269

4,309

－

－

－

－

299

0

▲492

▲193

▲492

0

68→69

69

(Note1)－－(Note2)(¥M)

Property-related expenses(excl. depreciation)
Depreciation

Interest expense(ind.financing related expenses etc.)(Reference) Profit/Loss from property sale
(Reference) Changes in the number of properties

Net Change(C-B)

Net Change(C-A)(Note1)：Forecasts are based on 69 properties up until April 21, 2009.
Subsequently, the number of properties are as follows in light of changes due to purchase and sale.
・April 22, 2009 to April 29, 2009: 68 properties

・April 30, 2009: 67 properties(Note2)：Forecasts are based on 68 properties held as of April 22, 2009, and the following purchase and sale of properties are assumed andwill remain unchanged (no existing properties will be sold and no new properties will be acquired other than stated in the following)
up to and including the end of ninth fiscal period.
・April 30, 2009: Sale of KDX Koishikawa Building

・July 1, 2009: Purchase of Sakae 4-chome Office Building (Tentative Name)

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

4

SECTION 2

Stronger Focus on Office Buildings

Increase in the ratio of office buildings
Increase in asset scale focused on office buildings

End of 7th period (2008/10)
Composition of portfolio by property types

Changes in total acquisition prices
(￥B)
250

■Offices ■ Central Urban Retails ■Residentials

226.3
217.1

197.0

Central Urban
Retails
5.4%

Residentials
5.6%

Offices
88.9%

200

175.0
146.7
150

137.9
115.9
100

81.4

188.4

201.2
Composition of offices by area

86.2
Other regionalareas¥35.3B
17.5%

69.1

50

0

37.7

48.2

12.3

12.3

18.9

20.7

End of 1st
period(2005/10)

End of 2nd
period(2006/4)

16.0

16.0

16.0

44.4

43.0

43.0

End of 3rd
period(2006/10)

End of 4th
period(2007/4)

End of 5th
period(2007/10)

16.0

12.3

12.7

12.7

End of 6th
period(2008/4)

End of 7th
period(2008/10)

Other Tokyo
metropolitan
area¥ 42.0B
20.8%

Notes: Figures for the 6th and 7th period include the acquisition price of building planned to be acquired of Sakae 4-chome Office Building (TentativeName) (￥4,325M). Amounts are rounded down to the nearest ￥100M. Pie chart shows the ratio of relevant property types to total, and arerounded 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 arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

CentralTokyo¥ 123.9B
61.5%

6

Focusing more on mid-sized office buildings by replacement ofassets
Focusing more on mid-sized office buildings in the Tokyo metropolitan area
Office buildings acquired in 7th period (Total acquisition price ￥14.31B)
KDX Iwamoto-cho Building

KDX Harumi Building

KDX Hamamatsucho Dai-2 Building

Average age of office buildings acquiredin each period(Year)
30
20
10
0
5th period

6th period

7th period*The average age of office buildings acquired in each period shown
above is as of the end of October 2008.
Acquisition
Date
Type
Location
Acquisition
priceCompletion
Occupancy

2008/5/1
OfficeChiyoda-ku Tokyo¥1.86B
2008/3
92.7%

Acquisition
Date
Type
Location
Acquisition
priceCompletion
Occupancy

2008/6/30
OfficeChuo-ku Tokyo¥10.25B
2008/2100.0%

Acquisition
Date
Type
Location
Acquisition
priceCompletion
Occupancy

2008/9/1
OfficeMinato-ku Tokyo¥2.20B
1992/4100.0%

Central Tokyo＋¥14.31B

Properties sold in 7th period （Total initial acquisition price ¥5.1B）
5.1B）
ZARA Tenjin Nishi-dori
Sales Date

Hakata Ekimae Dai-2 Building

2008/6/25
Central Urban
Type
RetailArea
Regional
Acquisition price¥3.68B
Initial Sales price¥4.10B
Completion
2005/11

Sales Date
Type
Area
Acquisition price
Initial Sales priceCompletion

2008/7/30
OfficeRegional¥1.43B¥1.47B
1984/9Fukuoka▲¥5.11B

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

7

KDX Harumi Building: Acquisition and occupancy increases(during 7th period)
Investment in property developed by Kenedix Group

Achieved leaselease-up (Occupancy ratio
ratio))
Occupancy ratio (end tenant basis)
KDX’ fixed rent ratio

KDX Harumi Building
Tenant (by section)

861.52

Office9260.61861.52

Office8260.61861.52

Office

92.90
tsubo

4,303.60 m2/1,303.05 tsubo
Data communications
company

80%

55.6%

60%

40%

46.3% 46.3% 46.3%
37.1%

20%

7

260.61861.52

Office6260.61861.52

Office861.52 m2 / 260.61 tsubo
Data communications co.

5

260.61861.52

Office861.52 m2 / 260.61 tsubo
Manufacturer (HQ)4

260.61861.52

Office3260.61861.52

Office2260.61861.52

Office1

205.32678.80

Entrance
Retail2584.56 m2 / 781.83 tsubo
Financial company
510.80 m2/
154.50 tsubo
Display condo

5 floors (2F – 6F) were
occupied at the time ofacquisition

09/2

260.61

74.81
tsubo

09
/1

10

92.90
tsubo

100.0%
92.7%

94.5%
Contract concluded
Contracts
for 1Fconcluded for 7F –74.2%
11F and part of 1F

08
/1
0
08
/1
1
08
/1
2

Office307.10m2

08/9861.52247.30m2

08/8

260.61

307.10
m2

100%

08
/7

11

C

08
/6

Type

B

08
/5

Total
Floor
Area
(m2)

Floor

Total
Floor
Area
(tsubo)A

100.0% 100.0%* KDX fixed rent ratio: The ratio of the sum of floor area covered by fixed
rent contracts concluded on June 30 2008 and the floor area of end
tenants (2F–6F) versus the building’s total floor area.

■ Fixed rents for space not occupied by end tenants (partial
fixed rent contract outline: a partial fixed rent master
lease contract was concluded with the seller Kenedix, Inc.
(KDX) at the time of acquisition)
Office portion¥18,000/month per tsubo (7F–11F)

Retail portion¥15,000/month per tsubo (1F)

168.0㎡/50.82tsubo Convenience store♦

Location: Harumi 3-chome, Chuo-ku,
Tokyo

♦

GFA

: 12,694.32 m2♦

Completion: February 2008♦

Number of stories : B1 F11♦

Acquisition price: ¥10,250M♦

Acquisition date

: June 30, 2008

Inception date 2008/7 ~ Office: 6 floor portion
2008/9 ~ Office: 8 floor portion
2009/1 ~ Office: 10 floor portion
2009/2 ~ Office: 10 floor portion
and Retail portion

All end tenant contract rent levels wereabove KDX’s fixed rents

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

8Flexible management according to market environment
Acquisition of offices and sale of properties (Residentials, central urban retail, regional office) and funding achieved(¥B)

4th period(Apr. 2007)

5th period(Oct. 2007)

6th period(Apr. 2008)

Strategy for the
8th period andthereafter

7th period(Oct. 2008)

10
5

New
debt

0

Sale

Equityfinance＜Future policy＞
Acquisition of offices will be
kept in principle within thescope of replacement＜Future policy＞

Sale

Repayment

Acquisition of
offices15

Acquisition of offices

20

Acquisition of offices

25•Repayment•Cash on hand

Acquisition of offices30•Acquisition

New
debt
Prepayment

35

Prepayment

40

Investment
Co Bonds

45

Sale

New
debt

Sale

・Preferential sale of central urban
retails, residentials and regional
offices.
・Depending on conditions for sale,offices can also be included toproperties for sale・Sale will be implemented on BV
basis, but preference will be onbuilding up stability

50%
45%
40%
35%

47.0%

35.3%

38.9%
41.2%

Changes in LTV

30%

End of 4th period

End of 5th period

End of 6th period

End of 7th period

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

9

SECTION 3

Management of Existing Properties

Management of existing properties－
rent level of new contracts for office buildings
Track record for increasing the rent level for new contracts
Changes in average rent increase (rents for new
tenants)
25%
20%
15%
10%

＋20～30%＋10～20%＜Future policy＞

0-▲5%

16.2%

14.9%

(Based on leased area)▲15-▲20%▲10-▲15%▲5-▲10%

21.6%

16.5%

Breakdown of changes in 7th period (Rents of new contracts)

11.3%
5%

＋0～5%

0%
3rd
period4th
period5th
period6th
period＋5～10%

7th
periodAverage change (including rent reduction)：
3rd period： 7.0% 5th period： 11.4% 7th period：
3.9%
4th period：14.0% 6th period： 16.7%

Average change by region (Simple average based on number of contracts)：
Central Tokyo：13.5% (rent increase 8, no change in rent 0)
Other Tokyo metropolitan area ： 5.8% (rent increase 5, rent reduction 2)
Other Regional areas：-5.1% (Rent increase 3, rent reduction 7)(Note) The above figures represent the simple averagevariances in rents for all new contracts(Note) The above increase/change are comparisons of new rents with the averagerent of relevant buildings (office buildings that are more than 2F tall)

Changes in tenant turnover ratio(actual and estimated: annualized)

15%

5th
period6th
period7th
period8th period(E)

Expandoffice space

4

2

3

3

Reduceoffice space

17

17

23

Other/
Unknown

5

11

5

14.8%

12.2%

8.2%
10%

7.7%

7.0%

8.4%

6.1%
2.7%

5%
0%
1st
period2nd
period3rd
period4th
period5th
period6th
periodAverage 8.4%(annualized basis)

Average vacancy period(Down time)

Main reasons for moving out

20%

7th 8th period
period(E)

Considering market
environment and future
trends, we will focus on
keeping vacancy period
short and improving
occupancy raito bycomplying flexibly to therequests of prospective
tenants

7th
periodOccupancy at
end of 7th period

Central Tokyo

1.0
4.2
months months

95.9%

32

Other Tokyo
metropolitan area

3.6
4.2
months months

96.9%

3

Other regional areas

10.6
10.2
months months

94.1%

Note: Other/Unknown includes 2 move outs following
negotiations on rent increase at contract
renewal

6th
periodNote:

Average (of each floor) based on number of contracts.
Floors covered by the survey are the followings:
Offices on 2F or above high 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 arecommendation to purchase or sell, 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
Track record for increasing contract renewal
Distribution of volatility in the 7th period(Rents for renewed contracts)

Ratio of rents increased at contract renewal
and changes in average rent increase+20~30%
70%
60%
50%
40%
30%
20%
10%
0%

Ratio of rents increased at contract renewal
renew alAverage rent increase (%)
12%

6.9%

7.8%
39.5%

7.5%

10.3%

51.5%

43.4%

13.0%
4th period

5th period

6th period+30% ~

10%
8%
6%
4%
2%
0%

+10~20%tenants, and will focus on
maintaining high+5~10%

maintainstatus quo

occupancy ratios

Note The ratio of rent increase cases above reflect all upward rent revisions
revisions achieved
through negotiations irrespective of renewal terms. The ratios ofof rent increase
cases are based on leased floor area, whereas the average rent increases
increases are
based on rents+0~5%

No negotiations forrent increase in
principle

Implemented fullfledged negotiations
for rent increase100%

negotiate for rent
increases with existing

56.6％ 43.4％

7th period

Changes in occupancy ratios for officebuildings（by region）＜Future policy＞
In principle, we do not

Average unit rent for office buildings（End of 7th period ）（￥）30,00020,50098%

20,00017,40014,200
11,10096%

10,00094%

Started negotiations
for rent increase ofproperties in central
Tokyo

92%

0
Central Tokyo

Tokyo metropolitan area
Other regional areas

08
/1
0

08
/8

08
/6

08
/4

08
/2

07
/1
0
07
/1
2

07
/8

07
/6

07
/4

07
/2

06
/1
0
06
/1
2

06
/8

06
/6

06
/4

06
/2

90%

Other Tokyo
metropolitan
area

Other regional
areas

Total Office
Buildings

Note：Amounts show the weighted average of the sum of
average rent based on gross floor area divided by the
number of properties in each area. Survey covers offices
on 2F or above

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

12

Management of existing properties—
stability of mid-sized office buildings (tenant diversification)
Status of end-tenants for office buildings(End of 7th period)# of end-tenants(# of properties)

630

Ratio of largest end-tenant

2.1%

Ratio of Top 3 end-tenants

5.4%

(59)

(Note) The above ratio shows the ratio of top endtenants within the entire portfolio (based onleased area)

End of 7th period – Breakdown of endtenants by sector for office buildings
Individuals
個人 23
23公務
tenants
3.8%
3.8%（その他）2.6%
2
Official(Others)
20.3%
tenants
0.3%

Constructions
建設業 3131 tenants
5.1%
5.1%
Manufactures
87製造業
tenants87
14.3%
14.3%

Service
サービス業
241
241
tenants
39.6%
39.6%

OthersLaw firms
and others
10.7%
Capital of
10M-50M
23.7%

Wholesale,retail & food
卸売業・小売153 tenants
業、飲食店
25.1%
153
Financial 25.1%(number)

Carriers &Telecome
運輸・通信業15 tenants
2.5%
15
2.5%

400
350
300
250

(Reference)
Changes in rent levels (market data)

Status of rental deposits (End of 7th period)(Reference) Tenant attributes including
capital position

金融・保険業
34 tenants
345.6%
5.6%

Real
Estate不動産業
23
23 tenants
3.8%
3.8%

Capital of
50M-100M
2.2%

100M-500M
Capital of 100M-500M
500M of- 500M or more
7.7% Capital
3.3%＊Tenant attribute at the time of acquisition. Ratio of the leased area
＊Covered： 5 properties acquired after Feb. 29, 2008
(excluding KDX Jimbocho Bldg. which was acquired at 0％ occupancy)(Reference)
Changes in office buildings traded by size

Tokyo 23 wards ：Rent levels for large and mid-sizedbuildings (Jun. 1997＝100)
(%)

200
150
100
50
0

110

(properties)

Large buildings

1999
2000
2001
2002
2003
2004
2005
2006
2007

Mid-sized buildings

Less than 5 5-10 months
months10-13
months

13 months
or more(Reference) Credit capability of endtenants of office buildings

100

Listed companies
and
Listedaffiliatedcompanies
Companies
52.4%

Rent fluctuate less for midsized buildings is less thanfor large buildings

90

Less than
1,000㎡
13
10
10
15
44
25
35
31
26

1,000㎡5,000㎡
44
21
31
76
74
84
151
148
139

5,000㎡10,000㎡
13
20
17
53
49
41
72
72
65

More than
10,000㎡
24
53
40
46
67
43
60
63
54

80

Actual performance in the past 1 year
(during the 6th and 7th period)♦ More than 2 months rent outstanding：
4 tenants including 2 tenants who havecanceled their leasing contracts(Notes)1

70

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

Source:Large buildings: a building with a total floor area of 3,000 tsubo
or moreMid-sized buildings: a building with a total floor area of 1,000–
3,000 tsubo
Kenedix, Inc., based on the data by CB Richard Ellis ResearchInstitute (Latest data as of Sep. 2008)

2
Source:Based on the information disclosed in the “Company Information
Report” submitted to TSE or published in the newspapers
Calculation based on “Changes in number of office buildings traded”
and “Number of office buildings traded by size”
Kenedix, Inc., based on the “survey on actual trading of properties” by
Urban Research InstituteThe contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

13

Management of existing properties—
Consolidate BMs / construction / cost reduction
Management effect by the scale of portfolio investing primarily in mid-sized office buildings
Consolidation of BMs (maintenance companies) for management of properties
properties by group
Divide Tokyo into 3 areas andconsolidate BMs for each area
Area A (East) 11 properties：
Area B (South) 7 properties：
Area C (West) 7 properties：

9 BMs→ A Co
5 BMs→ B Co
7 BMs→ C Co
consolidated to 3companies

Increased management
quality, service levels andbusiness efficiency

Z08BB第401号

Depreciation, Changes in budgets and actual costs forconstruction
Construction cost

(￥M)

1,392

1,430

1,500

1,445

Depreciation

1,428

1,484

1,300
1,100

1,357

900

1,302

1,294
1,139

700
5th period929
6th period

7th period

8th period
budget9th period
budgetReduce construction cost through bid■Ongoing bid for air-conditioning facilities
・# of successful bids 5th period:
4 properties
cost reduction by ￥190M (reduction rate 24.4%)・ # of successful bids 6th period:
5 properties
cost reduction by ￥174M (reduction rate 39.3%)
・ # of successful bids 7th period:
5 properties
cost reduction by ￥132M (reduction rate 31.6%)・ # of bids 8th period:
2 properties

Implemented works for
14 properties→increased efficiencyof air conditioning
facilities helps to reduceenergy consumption→ reduce CO2＜Future policy＞
Reduce construction budgets for CS or value up (including
installation of air conditioners), as such works were alreadycompleted for many of our portfolio properties

Notes:
1 Construction budget shows budgeted costs for initial construction works under the Property Management Plan
2 Actual construction costs shows construction costs disclosed (Capex + repairs costs)

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

14

SECTION 4

Financial Strategies

Stable financial management—
Diversified maturities and Fixed debt interest rates
Debt financing with an emphasis on
diversifying repayments
Amount of debt maturing in each 6 months
months (as of April 30,
30, 2009)

Diversification of debt maturities

（￥B)
20

Long-Term Borrowings

Investment Corporation Bonds

Outstanding amount of interestinterestbearing debts by remaining life

Short-Term Borrowings(as of Apr.
Apr. 30,
30, 2009)

18

Short-term
Short-term
debtborrowings
Current￥10.00B\7bn
portion
10.1%
Currentof
7.1%
long-term
portionof
debt
long-term\17bn
borrowings
17.2%￥9.00B
9.1%

16
9.00

14
2.00

12

8.00

10

18.53

8
6

12.28

11.53

4

9.97

7.03

6.38

2
0

3.00

0.03

2008 2009 2009 2010 2010
2H
1H
2H
1H
2H

3.00

5.00

3.00

2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016
1H
2H
1H
2H
1H
2H
1H
2H
1H
2H
1H
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. 2008 2H is from Oct. 1, 2008 to Mar. 31, 2009)

Fixed debt interest rates

Conservative management centered onborrowings at a fixed interest rates

Proportion of debt at fixed interest rate* vs. floating interest rate
(as of April 30,
30, 2009)
2009)
Floating interest rate debt
￥15.5B 15.7％

75.7%

Changes in debt ratio by type of debt
100%
80%
60%

Average interest rate (including up-front fees)
2.03％
Average life
2.5 years

Fixed interest rate debt
￥83.25B 84.3％

Long-term
borrowings andLong-term
Investment
debt andCorporation
investment
Bonds
Co,
Bonds
¥79.75B\74.8bn
80.8%

40%
20%
0%

Note: “Fixed interest rate debt” includes borrowings that wereconverted to fixed from floating through interest rate swap

st

nd

rd

th

th

th

th

1 period 第2期末
2 period 第3期末
3 period 第4期末
4 period 第5期末
5 period 第6期末
6 period 第7期末
7 period
第1期末

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

Long-term
長期借入金
borrowings

Investment
corporation bond

投資法人債

Short-term
短期借入金
borrowings

16

Stable financial management—
focus on maintaining conservative LTV＜Future policy＞
We will maintain conservative LTV. We will
also focus on conservative financial
management through conservative leveragepolicy and build-up our cash position

Changes in LTV
60%
55%
50%
45%

47.0%

45.6%

38.9%

38.7%

37.5%

40%
35%

Summary of covenants on borrowings

41.2%

35.3%

“Financial covenant”

5th
periodIf in any fiscal period① LTV exceeds a certain
level or
② DSCR falls below acertain level

30%
25%
1st
period2nd
period3rd
period4th
period6th
period7th
period・LTV＝total liabilities ÷ total assets(the difference between the appraisal value of
properties at end of each period and the BV will bereflected in the value of total assets(Added or subtracted as the case may be))・DSCR＝(Operating income＋Depreciation)÷interests paid
(Payment of principal with interest excluding lump-sum
repayment of principal)→ failure to comply with theabove for 2 consecutive
periods will result in
attachment of assets

Note: LTV＝Interest-bearing debt at end of period ÷Total assets

Borrowings in the 7th period and property trading(¥B)
Short-term borrowings
Current portion of long-termborrowings
Long-term borrowings
Investment corporation bonds
Total

35.0
30.0
25.0

Repayment
borrowings

Refinanced
borrowings

19.25B

17.75B

20.0
15.0
10.0
5.0
0.0

Total
acquisition
price(c. 14.3B)

Newborrowings
10.5B

Sales price(5.6B)

(￥B)

18
16
14
12
10
8
6
4
2
0

12.75

2.0
2008
1H

4.5
1.0

5.0

8.0

6.5

6.0

2008
2H

2009
1H

2009
2H

11.5

9.25
1.0
2.0

2010
1H

2010
2H

3.5
1.0
11.5
2011
1H

End of 6th End of 7th Difference
periodperiod
5.75
5
▲0.75
26

19

▲7

460
12
89.75

62.75
12
98.75

+16.75
0
+9

9.0
1.0
5.0
2011
2H

1.5
2.0

3.0

3.0

2012
1H

2012
2H

2013
1H

5.0
2013
2H

2014
1H

2014
2H

2015
1H

2015
2H

2016
1H

Debts as of end of 6th period

New borrowings in the 7th period

Debt refinanced in the 7th period

Investment corporation bonds

New borrowings in the 7th period for refinancing during the 7th period

Repayments in the 7th period

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

3.0
2016
2H

17

Stable financial management—Diversification of debt providers
Breakdown of debt providers

Borrowings(As of Apr. 30, 2009)

Norinchukin Bank 4

Chuo Mitsui Trustand Banking 14.5

Continue focusing on stable financing by maintaining
positive relationship with financial institutions,especially mega-banks and trust banks

Debt providers and balance of debts
6th period
The end of
Apr. 2008

The Norinchukin Bank
Citibank Japan Ltd.
Mitsui Sumitomo
Insurance Co.
The Chiba Bank, Ltd.
Investment
Corporation Bond
Total

Nov -4-2008

15.25

7th period
The end ofOct. 2008

18.95

Difference+3.7(unit:¥(unit:¥B)

The endof Apr.
2009

19.45

Difference

Dec-8-2008

Dec-8-2009

Jan-13-2009

Jan-13-2010

The Bank of Toky o-Mitsubishi UFJ, Ltd.

500

Feb-27-2009

Feb-28-2010

The Bank of Toky o-Mitsubishi UFJ, Ltd.

2,500

Apr-30-2009

Oct-31-2009

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

2,000

Apr-30-2009

Apr-30-2011
Oct-25-2009

10,000Sumitomo Mitsui Banking Corporation（1,000）、The Bank of Toky o-Mitsubishi UFJ, Ltd.（1,500）
Sumitomo Mitsui Banking Corporation

2,500

Apr-25-2008

2,000

Oct-31-2007

Oct-31-2009

Sumitomo Mitsui Banking Corporation（1,200）、Mitsubishi UFJ Trust and Banking Corporation（1,300）
Sumitomo Mitsui Banking Corporation

2,500

Jul-31-2008

Jan-31-2010

2,000

Apr-2-2007

Apr-2-2010

Total current portion of long-term borrowings

9,000
9,500

Aug-1-2005

Jul-31-2010

500

Oct-31-2008

Oct-31-2010

3,500

Jul-31-2008

Jan-31-2011

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

The Bank of Toky o-Mitsubishi UFJ, Ltd.

2,000

Sep-30-2008

Mar-31-2011

The Norinchukin Bank

1,500

Apr-17-2007

Apr-16-2011

12.5
11.0
8.0

14.5
12.0
11.0

+2.0
+1.0
+3.0

14.5
12.0
12.0

0.0
0.0
+1.0

7.8

9.8

+2.0

9.8

0.0

7.2

7.2

0.0

7.2

0.0

2.8
9.5
0.0
1.7
2.0
12
89.75

4.3
4.0
2.5
1.7
0.8
12
98.75

+1.5
▲5.5
+2.5
0.0
▲1.2
0.0
+9.0

4.3
4.0
2.5
1.0
0.0
12.0
98.75

0.0
0.0
0.0
▲0.7
▲0.8
0.0
0.0

Mar-31-2011

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）
Mitsubishi UFJ Trust and Banking Corporation

2,500

May -1-2006

Apr-30-2011

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）
The Bank of Toky o-Mitsubishi UFJ, Ltd.

3,500

Jul-31-2008

Jul-31-2011

1,500

Feb-29-2008

Aug-31-2011

The Chuo Mitsui Trust and Banking Co., Limited

1,000

Sep-1-2008

Sep-1-2011

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

5,000

Mar-31-2008

Sep-30-2011

3,500

Apr-30-2009

The Chuo Mitsui Trust and Banking Co., Limited

1,000

May -1-2008

Nov -1-2011

The Norinchukin Bank

2,500

Dec-1-2006

Nov -30-2011

Sumitomo Mitsui Banking Corporation

2,500

Oct-31-2011

Jan-10-2008

Jan-10-2012

500

Feb-27-2009

Feb-29-2012 (Note1)

The Chuo Mitsui Trust and Banking Co., Limited

2,000

Apr-2-2007

Aozora Bank, Ltd.

2,000

Apr-30-2009

Apr-27-2012

Resona Bank, Ltd.

1,500

Jun-30-2008

Jun-30-2012

Dev elopment Bank of Japan

1,000

Feb-27-2009

Aug-31-2012 (Note2)

Dev elopment Bank of Japan

3,000

Jun-30-2008

Dec-28-2012

Dev elopment Bank of Japan

3,000

Sep-1-2006

Aug-31-2013

Dev elopment Bank of Japan

5,000

May -1-2006

Apr-30-2016

Sumitomo Mitsui Banking Corporation+0.5

Nov -2-2009

500
1,000

The Chuo Mitsui Trust and Banking Co., Limited

Corporation（1,400）
Aozora Bank, Ltd.

(unit:¥B)

Oct-30-2009

Oct-31-2008

1,000

Sumitomo Mitsui Banking Corporation（3,750）、The Chuo Mitsui Trust and Banking Co., Limited(3,750）、Mitsubishi UFJ Trust andLong-Term Borrowings

Aozora Bank 12

Oct-30-2009

1,000

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

Development Bankof Japan 12

Last repay ment dateOct-31-2008

Citibank Japan Ltd.

Banking Corporation(1,500）、Resona Bank, Ltd.（500）Resona Bank, Ltd.

Bank of TokyoMitsubishi UFJ 9.8

Drawdown date

Mitsubishi UFJ Trust and Banking Corporation
Resona Bank, Ltd.

Current portion of
long-term
borrowings

Mitsubishi UFJ
Trust and Banking
7.2

Development Bank ofJapan
The Bank of TokyoMitsubishi UFJ
Mitsubishi UFJ Trustand Banking
Corporation
Resona Bank, Ltd.

(\M)
1,500

Total Short-Term Borrowings

Resona Bank 4.3

Sumitomo Mitsui
Banking Co.
The Chuo Mitsui Trustand Banking Co., Ltd
Aozora Bank, Ltd.

Balance

Citibank Japan Ltd.

Sumitomo Mitsui
Banking
Corporation 19.45

Citibank 2.5

The borrowings as of April 30, 2009
LenderShort-term Borrowings

Mitsui Sumitomo
Insurance Company
1

Investment
Corporation Bonds
12

Total Long-Term Borrowings

67,750Total Borrowings

86,750

Apr-2-2012（Note1）Repayment Method:Aug. 31, 2009 to Aug. 31, 2011: repayment of ¥10 million every 6 months, and Feb. 29, 2012: repayment of ¥450 million（Note2）Repayment Method:Aug. 31, 2009 to Feb. 29, 2012: repayment of ¥20 million every 6 months, and Aug. 31, 2012: repayment of ¥880 million

Current credit rating and issuance of Investment corporation bonds
bonds
Rating agencies
Moody’s

Rating

Name

Size

Interest rate

(As of Apr. 30, 2009)
Maturity Maturity dateＢａ1（negative ） １st Bond ￥9B

1.74%

5 yrs

2012/3/15

2nd Bond ￥3B

2.37%

10yrs

2017/3/15

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

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

18

Appendix

AppendixManagement of existing properties—yields and performance(results and analyses)
NOI yields realized with rental properties (by type,on an annualized basis)
4th
period5th
period6th
period7th
period7th period(Before Tax
adjusted)

Offices

5.3％
5.3％

5.5％
5.5％

5.6％
5.6％

5.3％
5.3％

5.4％

Centralurban retails

5.2％
5.2％

5.1％
5.1％

4.3％
4.3％

4.8％
4.8％

4.8％

Residentials

5.4
5.4％

5.3
5.3％

5.3％
5.3％

5.3％
5.3％

5.2％

Total

5.3％
5.3％

5.4％
5.4％

5.5％
5.5％

5.3％
5.3％

5.4%
5.4%

(Reference) Office buildings performance analyses

Income return and capital return of KRI(%)

Income return(Reference) Improved occupancy rates for officeproperties that had performed poorly before acquisition
KDX Hamacho building
KDX Nishi-Gotanda building
KDX Jimbocho building

Capital return

(%)

12

12

10

10

8

5.8

8

3.8

6

2

Income return

6.6

Capital return

6.4

6
4

4.8

5.5

Central Tokyo

23 wards

2

4.3

4.9

Central Tokyo

23 wards

0

0

Note:
1 IPD J REIT Universe employed as thebenchmarkNotes:
1 Returns realized in a year up to April 2008
2 Subject properties are those appraised twice ormore (to eliminate the influence ofsale/acquisition during the period)

Sakae 4-chome Office Building (tentative name)

KDX Kiba building
KDX Toranomon building
KDX Harumi building♦

Planned completion ： June 2009 (planned)♦

Location ： 4-chome Sakae, Naka-ku,

100%

Nagoya-shi

80%
60%
40%
20%
0%
Mar.06

Income return and capital return of benchmark

4

Note:
These numbers are adjusted by property & metropolitan taxes
KDX Harumi Builiding and KDX Iwamotocho Building’s tax are considered with part of land
Round off the second place decimal point

・Analyzed by IPD (Investment
Property Databank Ltd)

Actual income returns and capital returns

Sep.06Mar.07

Sep.07Mar.08

Sep.08♦

GFA ： 10,848.45m2 （planned）♦

Number of stories ：F11

Acquisition date

Acquisition
price(¥
price(¥M)

Land

2008/4/25

4,000

Building

2009/7/1(planned)

4,325(planned)

・ Fixed rent amounts to be received from theseller based on a rent-guaranteed master leaseagreement with the seller
Outline of the rent-guaranteed master leaseagreement
・Term: 1 year starting from July 2009
・Guaranteed monthly rents:
Retail space ￥35,000/tsubo
Office space ￥18,000/tsubo

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

20

Overview of appraisal values
List of appraisal values for office buildings
Property name
KDX Nihonbashi 313 Building
KDX Hirakawacho Building
Higashi-Kay abacho Yuraku Building

KDX Hatchobori Building
KDX Nakano-Sakaue Building
Harajuku F.F. Building
FIK Minami Aoyama
Kanda Kihara Building
KDX Shinjuku-Gyoen Building
KDX Koishikawa 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

Acquisition
price5,940,000
5,180,000
4,450,000
3,680,000
2,533,000
2,450,000
2,270,000
1,950,000
1,610,000
704,000
5,570,000
5,950,000
2,252,300
2,300,000
5,300,000
4,640,000
3,500,000
3,460,000
2,780,000
2,690,000
2,520,000
1,950,000
1,610,000
1,560,000
1,580,000
2,350,000
1,065,000
2,950,000
4,200,000
1,400,000
6,090,000
2,000,000
1,305,000
1,155,000
1,305,000
6,400,000
1,500,000
4,400,000
9,850,000

7th period
Appraisal value

compare toac quisit ion

comapre to
6t h periodCR
compare tobookvalue

7,680,000 29.3% 0.0% 22.3%
5,780,000 11.6% 0.0% 10.4%
6,380,000 43.4% -2.0% 41.9%
3,980,000
8.2% 0.0% 12.8%
2,680,000
5.8% 0.0% 4.9%
3,260,000 33.1% -3.0% 30.5%
3,140,000 38.3% -8.2% 37.4%
2,030,000
4.1% 0.0% 7.8%
2,140,000 32.9% 0.0% 33.0%
795,000 12.9% -13.7% 17.6%
5,500,000 -1.3% -3.5% 6.8%
6,400,000
7.6% -2.0% 9.5%
2,390,000
6.1% -6.3% -3.9%
3,010,000 30.9% -2.3% 28.1%
5,440,000
2.6% -8.4% 3.5%
5,380,000 15.9% -11.8% 17.3%
4,090,000 16.9% -1.0% 16.9%
3,950,000 14.2% 0.0% 16.6%
3,220,000 15.8% -1.5% 10.9%
3,020,000 12.3% -1.9% 12.3%
2,790,000 10.7% -10.9% 11.2%
2,440,000 25.1% 0.0% 23.7%
1,540,000 -4.3% -6.7% -1.3%
1,570,000
0.6% -4.3% 6.2%
1,800,000 13.9% -6.7% 7.6%
2,550,000
8.5% 0.0% 6.4%
1,060,000 -0.5% -1.9% -6.6%
3,370,000 14.2% 0.3% 5.5%
4,920,000 17.1% -2.2% 15.7%
1,430,000
2.1% 0.0% -2.2%
6,770,000 11.2% -1.9% 6.6%
2,010,000
0.5% 0.0% -6.5%
1,220,000 -6.5% -7.6% -6.9%
1,010,000 -12.6% -9.8% -24.7%
971,000 -25.6% -13.3% -34.8%
7,320,000 14.4% 2.1% 12.2%
1,540,000
2.7% 0.0% -1.5%
4,640,000
5.5% -4.7% -4.9%
11,100,000 12.7% -0.9% 12.0%

End of
7th p eri od

4.8%
4.6%
4.8%
4.8%
5.1%
5.4%
4.7%
4.8%
4.9%
6.0%
6.0%
4.8%
5.7%
5.3%
5.4%
4.9%
5.1%
4.6%
5.2%
4.5%
5.5%
5.2%
5.5%
5.5%
5.5%
4.8%
5.0%
5.3%
5.2%
5.2%
5.2%
4.8%
6.0%
5.5%
7.0%
4.6%
5.1%
4.4%
4.5%

com pare to
6th perio d

0.0%
0.0%
0.1%
0.0%
0.0%
0.2%
0.3%
0.0%
0.0%
0.7%
0.2%
0.1%
0.1%
0.1%
0.4%
0.3%
0.1%
0.0%
0.1%
0.1%
0.3%
0.0%
0.1%
0.1%
0.1%
0.0%
0.1%
0.0%
0.1%
0.0%
0.1%
0.0%
0.0%
0.1%
0.6%
0.0%
0.1%
0.3%
0.2%

Property nameAcquisition
price

7th period
Appraisal value

compare toac quisit ion

comapre t o
6t h periodCR
compare tobookvalue

End of
7th p eri od

2,300,000
2,500,000
8.7% -4.2% 6.5%
5,400,000
5,820,000
7.8% 2.8% 5.0%
KDX Hakata Building
2,350,000
2,200,000 -6.4% -12.4% -9.9%
KDX Sendai Building
2,100,000
1,910,000 -9.0% -10.3% -13.9%
KDX Roppongi 228 Building
3,300,000
2,800,000 -15.2% -15.9% -19.0%
Hiei Kudan-Kita Building
7,600,000
8,150,000
7.2% 1.1% 6.5%
KDX Shin-Yokohama 381 Building
4,700,000
4,100,000 -12.8% -12.8% -12.9%
KDX Kawasaki-Ekimae Hon-c ho Building
3,760,000
3,480,000 -7.4% -7.4% -7.9%
Nissou Dai-17 Building
2,710,000
2,090,000 -22.9% -9.1% -23.2%
Ikejiri-Oohashi Building
2,400,000
2,180,000 -9.2% -16.5% -11.3%
KDX Hamacho Nakanohas hi Building
2,310,000
2,140,000 -7.4% -10.1% -9.7%
KDX Kanda Misaki-cho Building
1,380,000
1,160,000 -15.9% -16.5% -17.2%
KDX Hakata-Minami Building
4,900,000
4,720,000 -3.7% -4.1% -4.4%
KDX Kitahama Building
2,220,000
2,020,000 -9.0% -9.0% -10.5%
Shin-toshin Maruzen Building
2,110,000
2,060,000 -2.4% -4.2% -5.7%
KDX Jimbocho Building
2,760,000
2,660,000 -3.6% -4.7% -10.8%
KDX Gobancho Building
1,951,000
1,870,000 -4.2% -7.4% -8.2%
Sakae 4-chome Office Building
4,000,000
4,180,000
4.5% 0.0% 0.3%
(Tentative Name)KDX Iwamoto-cho Building
1,864,802
1,810,000 -2.9% -4.7% -3.9%
KDX Harumi Building
10,250,000 10,700,000
4.4% 1.9% 4.6%
KDX Hamamatucho Dai-2 Building
2,200,000
2,240,000
1.8% 0.4% -0.9%
Office Total
196,965,102 211,106,000
7.2% -3.5% 5.4%
KDX Shinjuku 286 Building
Karasuma Building

com pare to
6th perio d

4.9%
5.3%
6.1%
5.7%
4.8%
4.6%
5.4%
5.8%
5.4%
5.7%
5.2%
5.2%
6.3%
5.7%
5.1%
5.3%
5.0%
5.3%
4.6%
4.5%
-

0.2%
0.0%
0.8%
0.1%
0.7%
0.0%
0.4%
0.4%
0.4%
0.9%
0.6%
0.7%
0.8%
0.4%
0.3%
0.6%
0.4%
0.5%
0.1%
0.0%
-

Note:
Under ￥1,000 cut it off (Acquisition price, Appraisal value, Book value)
Second decimal place omitted for ratios

Summary of appraisal values at the end of the 7th period(ended October 2008)(￥M)
OfficeCentral Urban Retails①②

Acquisition
price
196,965Book
value
200,372

12,37912,679③④=③-①

Apraisal
Difference
value(Apraisal value)
211,106
14,141
14,210④/①⑤=③-②

Difference(Book value)
7.2%
10,734

(%)

1,831

14.8%

⑤/②
(%)
5.4%

1,531

12.1%

Residentials

12,70912,742

12,090

-619

-4.9%

-652

-5.1%

Total

222,053

225,795

237,406

15,353

6.9%

11,613

5.1%

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

21

Summary of office building portfolio (7th period)
Portfolio invested heavily in midmid-sized office buildings located in Tokyo metropolitan area
Growth of portfolio assets by geography

Composition of portfolio properties
by geography(￥B)
CentralTokyo

140

Other Tokyo
metropolitan area

Other regional areas

123.9

109.6

100

Other regional
areas

88.2

90

76.0

80

Other Tokyo
metropolitan
area

56.6

60

35.7

Central Tokyo

17.5%
20.8%

61.6%

7~10min(4properties)
6min¥19.0B
19.0B(5properties)
18.0B¥18.0B20

1min(15properties)
56.7B¥56.7B

5min(9properties)
29.9B¥29.9B
4min(5properties) 3min¥11.4B
11.4B (11properties)

27.5

40

Composition of portfolio properties by waｌking
distance to the nearest railroad station

2min(11properties)
33.6B¥33.6B¥32.5B
32.5B

0
1st period 2nd period 3rd period 4th period 5th period 6th period 7th period

Properties in economic zones ofTokyo account for 82.3%

Properties within a 33-minute walk of
the nearest railroad station account for
61.0% and those within a 66-minute walkaccount for 90.5%.

Composition of portfolio properties
by price

Composition of portfolio properties bygross floor area (GFA)

Note: Central 5 wards of Tokyo consist of Chiyoda, Chuo, Minato, Shibuya and Shinjuku Wards

Changes in average acquisition prices
(￥B)

3.50
3.35
3.25

3.30

¥10B
More than \10B~(1properties)(1property)\7.5~10.0B ¥10.2B¥7.5~10.0B\10.2B(3properties)\25.7bn¥25.7B

3.14
3.10\1.0~2.5B¥1.0~2.5B(29properties)\54.7B¥54.7B\5.0~7.5B¥5.0~7.5B(8properties)\45.8B¥45.8B

2.97

4th period

5th period

6th period

7th period

More than
10,000㎡（6properties）¥4.2B\4.2bnLess than
3,000㎡（16properties）¥3.03B\3.03bn

3,000㎡~10,000㎡\2.5~5.0B¥2.5~5.0B(18properties)\63.9B¥63.9B

2.90

2.70

Less than ¥1.0B\1.0B(1properties)(1property)
\0.7B
¥0.7B

JPY2.5JPY2.5-7.5bn (54.5%)

Note: Figures for end of 6th and 7th Period include ¥ 4,325M for the planned acquisition of Sakae 4-chome Office Building.
(Tentative name)
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

（38properties）¥128.9B\128.9bn

Properties with GFA of 3,000m2 10,000m2 account for 64.0%

22Emphasis on mid-sized office buildings in Tokyo metropolitan
area
60 Office properties, total acquisition price of ¥201.2B(as of Oct 31, 2008)

Tokyo’s 23 wards
42 Properties ¥142.2B

Acquisition price(Tokyo metropolitan area)
Acquisition price(Other regional areas)

Central Tokyo1
34 properties¥123.9B

Niigata
1 property ¥1.3B

Miyagi1 property ¥2.1B

Greater Osaka area
5 properties ¥16.3B

Other 18 wards
8 properties¥18.3B

Fukuoka
2 properties ¥7.2B

Tokyo

Other regional
areas
17.5%

Chiba
1 property ¥2.2B

Aichi2
1 property ¥8.3B

Kanagawa
6 properties ¥20.2B
Hachioji, Tokyo
1 property ¥1.1B

Notes:
1
Central Tokyo: Chiyoda, Chuo, Minato, Shibuya and Shinjuku wards
2
The price of Sakai 4-chome Office Building (Tentative Name) is ¥8.3B is the total of land acquired on Apr. 24, 2008 (¥4B)
and the building to be acquired on July 1, 2009 (¥4.3B)
3
Acquisition price are rounded to the nearest ¥100M. Ratios indicate the total acquisition price for properties in each area inproportion to the total acquisition price for all properties combined and are rounded down to the first decimal place

Other Tokyo
metropolitan
area
20.8%

Central Tokyo
61.5%

# of
properties

Acquisition
price
(¥B)

Ratio
(%)

50
10
60

165.9
35.3
201.2

82.4
17.5
100.0

Tokyo metropolitan area
Other regional areas
Total

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

23

Focusing on office buildings
Portfolio overview

Type

End of 3nd period(Oct. 31, 2006)
64 properties approx. ¥146.7B

End of 5th period(Oct. 31, 2007)
77 properties approx. ¥197.0B

Residential
7properties
Central
5.6%
urban retail2properties
5.4%

Residential
30properties
21.8%

Residential
32properties
30.2%

Of f ice
29buildings
58.7%

Centralurban retail3properties
10.9%

Centralurban retail3properties
8.1%

Other regional
areas
16.4%

Area
Size

¥5.0–7.5B(6properties)¥33.2B
22.6%¥2.5–5.0B(13properties)¥43.6B
29.7%¥7.5–10.0B(2properties)¥19.7B
10.0%

Less than ¥1.0B(16properties)¥12.1B
8.2%¥1.0–2.5B(28properties)¥47.7B
32.5%

Toky ometropolitan
area
83.5%

Toky ometropolitan
area
82.4%

Toky ometropolitan
area
84.0%
¥7.5–10.0B(1property)
¥9.9B
6.7%

Of f ice
60buildings
89.0%
88.9%

Of f ice
44buildings
70.0%
Other regional
areas
17.5%

Other regional
areas
15.9%

End of 7th period(Oct. 31, 2008)
69 properties approx. ¥226.3B¥5.0–7.5B(9properties)¥51.1B
25.9%¥2.5–5.0B(15properties)¥52.2B
26.5%

Less than ¥1.0B(14properties)￥10.7B
5.4%¥1.0–2.5B(37properties)¥63.1B
32.0%¥7.5–10.0B(4 properties)¥35.6B
15.7%¥5.0–7.5B(9 properties)¥51.1B
22.6%

Note: The portion (%) indicated in the circular graphs above the total acquisition prices for each category of assets and rounded down to thefirst decimal place
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

Over ¥10.0B(1 property)¥10.2B
4.5%

Less than ¥1.0B(2properties)
¥1.5B
0.6%
¥1.0–2.5B(35properties)¥63.7B
28.1%¥2.5–5.0B(18properties)¥63.9B
28.2%

24

Portfolio overview (Office buildings)(As of Jan.31, 2009)

Office buildings as of January 31, 2009 (60 properties)
Acquisition price
Type

Area

# of prop.

（ \ M） 1

Acquisition priceOccupancy ratio
Completion²

（%）³

Type

Area

# of prop.

Name

Location

Occupancy ratio（ \ M） 1

Completion²（%）³

KDX Harumi Building

Chuo-ward, Tokyo

10,250Feb-2008

100.0%A-14

KDX Funabashi Building

Funabashi, Chiba

2,252

Apr-1989

98.4%

A-40

Toranomon Toyo Building

Minato-ward, Tokyo

9,850

Aug-1962

100.0%A-61

KDX Hamamatucho Dai-2 Building

Minato-ward, T okyo

2,200

Apr-1992

100.0%

A-46

Hiei Kudan-Kita Building

Chiyoda-ward, T okyo

7,600

Mar-1988

100.0%

A-55

Shin-toshin Maruzen Building

Shinjuku-ward, T okyo

2,110Jul-1990

64.3%

A-37

KDX Ochanomizu Building

Chiyoda-ward, T okyo

6,400

Aug-1982

90.2%

A-33

KDX Okachimachi Building

T aito-ward, T okyo

2,000

Jun-1988

100.0%A-32

KDX Shiba-Daimon Building

Minato-ward, Tokyo

6,090

Jul-1986

100.0%A-57

KDX Gobancho Building

Chiyoda-ward, T okyo

1,951

Aug-2000

85.7%

A-13

KDX Koj imachi Building

Chiyoda-ward, T okyo

5,950

May-1994

86.7%

A-8

Kanda Kihara Building

Chiyoda-ward, T okyo

1,950

May-1993

100.0%A-23

KDX Yotsuya Building

Shinjuku-ward, T okyo

1,950

Oct-1989

100.0%A-59

KDX Iwamoto-cho Building

Chiyoda-ward, T okyo

1,864

Mar-2008

92.7%

A-9

KDX Shinj uku-Gyoen Building

Shinjuku-ward, T okyo

1,610

Jun-1992

100.0%A-26

KDX Kiba Building

Koto-ward, T okyo

1,580

Oct-1992

100.0%A-38

KDX Nishi-Shinj uku Building

Shinjuku-ward, T okyo

1,500

Oct-1992

100.0%A-31

KDX Monzen-Nakacho Building

Koto-ward, T okyo

1,400

Sep-1986

100.0%A-52

KDX Kanda Misaki-cho Building

Chiyoda-ward, T okyo

1,380

Oct-1992

100.0%A-34

KDX Hon-Atsugi Building

Atsugi, Kanagawa

1,305

May-1995

96.2%

A-35

KDX Hachioj i Building

Hachioji, T okyo

1,155

Dec-1985

85.6%

A-28

KDX Nogizaka Building

Minato-ward, T okyo

1,065

May-1991

100.0%A-10

KDX Koishikawa Building

Bunkyo-ward, T okyo

704

Oct-1992

100.0%

A-58

Sakae 4-chome Office Building (Tentativ e)

Nagoya, Aichi

8,325

Jun-2009－

Sep-1993

96.2%

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, T okyo

5,180

Mar-1988

100.0%KDX Shin-Yokohama 381 Building

Yokohama, Kanagawa

4,700

Mar-1988

85.8%

Shibuya-ward, T okyo

4,640

Jan-1992

100.0%

A-17
A-3

Ebisu East 438 Building

Jan-1987

Chuo-ward, Tokyo

4,450

A-39

KDX Toranomon Building

Minato-ward, Tokyo

4,400

Apr-1988

78.6%

A-30

KDX Nishi-Gotanda Building

Shinagawa-ward, Tokyo

4,200

Nov-1992

91.9%

KDX Kawasaki-Ekimae Hon-cho Building

Kawasaki, Kanagawa

3,760

Feb-1985

100.0%A-4

KDX Hatchobori Building

Chuo-ward, Tokyo

3,680

Jun-1993

100.0%A-18

KDX Omori Building

Ota-ward, T okyo

3,500

Oct-1990

100.0%A-19
A-45

KDX Hamamatsucho Building

Minato-ward, Tokyo
Minato-ward, TokyoKDX Roppongi 228 Building

Tokyo
Metro
poritanarea

100.0%

Higashi-Kayabacho Yuraku Building

A-48
Tokyo
Metro
poritanarea

Location

A-60

A-47

Office

Name

3,460

Sep-1999

87.7%

3,300

Apr-1989

77.8%

A-29

KDX Higashi-Shinj uku Building

Shinjuku-ward, Tokyo

2,950

Jan-1990

86.2%

A-20

KDX Kayabacho Building

Chuo-ward, Tokyo

2,780

Oct-1987

100.0%

O ffi c e

A-12

Portus Center Building

Sakai, Osaka

5,570

A-42

Karasuma Building

Kyoto, Kyoto

5,400

Oct-1982

94.8%

A-53

KDX Hakata-Minami Building

Fukuoka, Fukuoka

4,900

Jun-1973

96.4%
100.0%A-56

KDX Jimbocho Building

Chiyoda-ward, T okyo

2,760

May-1994

65.4%

A-49

Nissou Dai-17 Building

Yokohama, Kanagawa

2,710

Jul-1991

100.0%

Other
regional

A-43

KDX Hakata Building

Fukuoka, Fukuoka

2,350

Jul-1982

Feb-1992

100.0%

areas

A-54

KDX Kitahama Building

Osaka, Osaka

2,220

Jul-1994

91.5%

94.8%

A-44

KDX Sendai Building

Sendai, Miyagi

2,100

Feb-1984

90.9%

A-21

KDX Shinbashi Building

Minato-ward, Tokyo

2,690

A-5

KDX Nakano-Sakaue Building

Nakano-ward, Tokyo

2,533

Aug-1992

A-22

KDX Shin-Yokohama Building

Yokohama, Kanagawa

2,520

Sep-1990

93.1%

A-24

KDX Minami Semba Dai-1 Building

Osaka, Osaka

1,610

Mar-1993

91.6%

A-6

Haraj uku F.F. Building

Shibuya-ward, T okyo

2,450

Nov-1985

100.0%A-25

KDX Minami Semba Dai-2 Building

Osaka, Osaka

1,560

Sep-1993

88.1%

A-50

Ikej iri-Oohashi Building

Meguro-ward, Tokyo

2,400

Sep-1988

91.3%

A-36

KDX Niigata Building

Niigata-shi, Niigata

1,305

Jul-1983

75.5%

A-27

KDX Kaj icho Building

Chiyoda-ward, T okyo

2,350

Mar-1990

100.0%

201,290

Avg. 20.4 years

95.1%

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

100.0%A-41

KDX Shinj uku 286 Building

Shinjuku-ward, Tokyo

2,300

Aug-1989

100.0%A-7

FIK Minami Aoyama

Minato-ward, Tokyo

2,270

Nov-1988

100.0%

Office（60 Prop）Subtotal

Notes:
1 Acquisition price is the purchase price for trust beneficiary interests etc. acquired by the Investment
Corporation exclusive of taxes, rounded down to the nearest million yen
2 Completion date is the date of construction completion recorded in the land register. However, for Sakae
4-chome Office Building (Tentative Name), the planned completion date is shown. Average age subtotals
and total is shown as the weighted-average portfolio age based upon acquisition prices with a base dateof January 31, 2009 and are rounded down to the nearest first decimal place. (excluding A-58 Sakae 4chome Office Building (Tentative Name)) The weighted-average age of the 68 properties held as ofJanuary 31, 2009 (excluding Sakae 4-chome Office Building (Tentative Name)) is 18.8 years
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to the first decimal
place. Average occupancy ratio of 68 properties held as of January 31, 2009 was 95.1% (excluding A-58
Sakae 4-chome Office Building (Tentative Name))

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

25

Portfolio overview (Central urban retail properties andresidential properties)(As of Jan.31, 2009)

Central urban retail properties as of January 31, 2009 (2 properties)
Acquisition price
Type

Area

CentralUrban
RetailTokyo
Metroporitanarea# of prop.

Name

Location（ \ M） 1

Completion²

Occupancy ratio
（%）³

C-1

Frame Jinnan-zaka

Shibuya-ward, Tokyo

9,900

Mar-2005

97.9%

C-2

KDX Yoyogi Building

Shibuya-ward, Tokyo

2,479

Aug-1991

81.5%

12,379Avg. 6.5 years

94.6%

Central Urban Retail (2 prop.) Subtotal

Residential properties as of January 31, 2009 (7 properties)
Acquisition price
Type

Area

# of prop.

Residential

B-19
Tokyo
Metro
poritanarea

Other
Regional
areas

Name

Location（ \ M） 1

Completion²

Occupancy ratio（%）³

Residence Charmante Tsukishima

Chuo-ward, Tokyo

B-3

Court Mej iro

Shinjuku-ward, Tokyo

B-4

Apartments Motoazabu

Minato-ward, Tokyo

1,210

Jan-2004

94.6%

B-5

Apartments W akamatsu-Kawada

Shinjuku-ward, Tokyo

1,180

Feb-2004

92.7%

B-34

Gradito Kawaguchi

Kawaguchi, Saitama

1,038

Feb-2006

100.0%

B-25

Court Shin-Okachimachi

Taito-ward, Tokyo878

Oct-2005

98.4%

B-18

Venus Hibarigaoka

Sapporo, Hokkaido

1,800

Mar-1989

90.1%

12,709Avg. 7.4 years

94.8%

Residential（7 prop.）Subtotal

5,353

Jan-2004

100.0%

1,250

Mar-1997

100.0%

Notes:
1 Acquisition price is the purchase price for trust beneficiary interests etc. acquired by theInvestment Corporation exclusive of taxes, rounded down to the nearest million yen.
2 Year built is the date of construction completion recorded in the land register. The total isshown as weighted-average portfolio age based upon acquisition price with a base dateof January 31, 2009 (rounded down to the nearest first decimal place)
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to
the first decimal place. Ratios are calculated as of January 31, 2009

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

26

(Reference data1) Market environment for office buildings
1．Breakdown of office based on number of employees per office
100 employees and above
1.6%
30–99 employees
5.0%

2．Distribution of office buildings by tsubo

More than
3,000 tsubo
5.0%

Potentially strong demand
for mid-sized office buildings
by tenants

500–
3,000 tsubo
28.6%

10–29 employees
15.7%

Less than
500 tsubo
66.4%

1–9 employees
77.7%

Proportion of offices with
1–29 employees: 93.4%

Broad based stock of
mid-sized officebuildings

Source: Survey conducted by Ikoma Data Service System based on KRI’s requests(survey as of end of Mar. 2007) “Macro market survey of Tokyo’s central 5 wards”
Note:
The above data covers rental office buildings located in Tokyo’s central 5 wards that weresurveyed by Ikoma Data Service System. Please note that the above data may not include thedata of all properties in the said 5 wards

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

3．Office building average rent and vacancy ratios (Central Tokyo)(￥（円/月・坪）
per tsubo)（％）

24,0004．Reasons citied by companies in Tokyo if they were to relocate
80%

9Average rate

Vacancy ratio

8

22,000

70%
62.3%

7

60%

6

50%

18,000

5

40%

16,0004

20,0002
12,0001

10,00002001/12

2002/12

2003/12

2004/12

2005/12

2006/12

2007/12

2008/9Source: “Latest office building market conditions in Central Tokyo (suvey as of end of Oct. 2008）”,
Miki Shoji Co., Ltd.

2006

2008

49.3%
36.6%
30.5%

30%

3

14,000

2004

23.7%

23.0%
18.6%

20%

15.1%

11.9%

10%
0%

Expansion of floor
space due to theincrease of employees

Restructuring ofinternal organizations

Dissatisfaction/inadequate
facilities in the building
currently occupied by tenant

Source： DISS Fudosan-Hakusho 2006
CBRE “Survey for Office demanding 2008”

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

27

(Reference data2) Market environment for office buildings
1. 23 wards of Tokyo: rent levels for large buildings and mediumsized buildings

2. Cap rates of properties in Tokyo and local cities(1,000yen/Tsubo)(千円/坪）

10.0%

30

Large
大型ビル
Medium-sized
中型ビル

25

福岡
Fukuoka

Osaka
大阪

東京
Tokyo

Nagoya名古屋

8.0%¥24,200

6.0%

5.8％
5.5％
5.3％

4.0%

4.0％

20

¥18,30015

2.0%1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Note:

Large building is a building with a gross floor area of 3,000 tsubo or overmedium-sized building 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 2008/9)

3. Changes in rent levels by region

2001/4 2002/4 2003/4 2004/4 2005/4 2006/4 2007/4 2008/4

Notes:

1 Expected cap rates based on direct reduction approach for A class buildings that have been
built for 5 years or less
2 Expected cap rates for properties in the Marunouchi and Otemachi areas used
Created by Kenedix based on the data complied by Japan Real Estate Institute （as of 2008/10）
Source：4. Changes in vacancy ratios by region(%)(¥1,000/Tsubo)（千円/坪）

14.0

25
Tokyo
東京

Osaka
大阪

Fukuoka
福岡

Nagoya名古屋¥22,600

Nagoya
名古屋

Tokyo
東京

Osaka
大阪

Fukuoka
福岡

12.0

20

10.3%

10.0
15

¥12,800¥11,400¥10,000

10

5

2002

Note:

7.9%

8.0

2003

2004

2005

2006

2007

4.3%

4.0
2.0

2008

Targeting the rental properties with a gross floor area of 100 tsubo or over 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 2008/10)

6.0%

6.0

Note:

2002

2003

2004

2005

2006

2007

2008

Targeting the rental properties with a gross floor area of 100 tsubo or over 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 2008/10)

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

28

KRI unitholders
Top 10 unitholders (as of October 31, 2008)

Investment units by unitholders
Individuals and others
Other Domestic Co.

Financial Inst. (incl. Securities)
Foreign Co. and Individuals

22.7

1st

49.0

15.6

2nd

12.4

47.0

8.5

# of units
held (unit)(%)

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

17,903

8.95%

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

15,597

7.79%

Japan Trustee Services Bank, Ltd (Trust Acct.)

13,076

6.53%

Goldman Sachs International

12,025

6.01%

Name

16.0
29.0

3rd

10.6

4th

6.8

46.5

6.4

40.3

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

11,478

5.73%

5th

5.7

48.4

5.1

40.8

Kenedix, Inc.

7,850

3.92%

6th 5.4

49.4

5.0

40.2

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

7,147

3.57%

7th

45.6

5.4

41.0

Goldman Sachs and Co. regular Acct.

6,512

3.25%

State Street Bank and Trust Company

5,763

2.88%

The Bank of New York, Treaty JASDEC Account

4,384

2.19%

101,735

50.86%

48.0

8.1
0%

20%

6.8

40%

34.6

60%

80%

100%

Note: Round to the first decimal place

Total
Note: Ratios are rounded down to the second decimal place

Type of unitholders (as of October 31, 2008)
Individual and Others
Financial Inst.
(Incl. Securities co.)Other Domestic Co.
Foreign Co. and Individuals
Total

# of
unitholder
5,605

(%)
94.0%

(Reference) Reporting of major unitholders# of units
Ratio (%)
held (unit)
16,234
8.1%

83

1.4%

91,126

45.6%

100
176
5,964

1.7%
3.0%
100.0%

10,72081,920200,000

5.4%
41.0%
100.0%

Note: Round to the first place decimal point

Name
Tower Investment Management Co., Ltd.

Submitted # of units
onheld (unit)
2008/11/21
25,175

Nomura Securities Co., Ltd.
2008/9/25
Nomura Asset Management Co., Ltd.
Nomura Securities Co., Ltd.
Nikko Asset Management Co. Ltd
2008/10/22
Nikko Asset Management Co. Ltd
Citigroup Alternative Investments LLC
Nikko Citigroup Ltd.
Notes:1 Reports submitted from 2007/5/22 to 2008/11/21
2 These are companies who has more than 5% units
3 Rounded to the first decimal place

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

22,084
21,274810
19,875
18,349
1,171
355

(%)
12.59%
11.04%
10.64%
0.41%
9.94%
9.17%
0.59%
0.18%

29

J-REITs investment trends by investor category
Trend of trading in JJ-REIT securities by investors
Foreign Corporations and Individuals
(\B)

Buy

Sell

Net

Banks
Buy

(\B）

Sell

Net

500

100
50

400

0
300

-50
-100

200

No
v08

Au
g08

Fe
b08
Ma
y08

Au
g07
No
v07

ay
-0
7
M

No
v06
Fe
b07

Au
g06

Fe
b06
M
ay
-0
6

v05

100

No

Ma
y05
Au
g05

-150

Investment Trusts

0

Buy

（\B）

Sell

Net

80

-100

60
40

-200

20
0

-300

-20
-40

Source:Tokyo Stock Exchange (as Jan. 2009)
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

-0
8

08

ov
N

-0
8

Au
g-

8

ay
M

-0
7

-0
7

Fe
b0

No
v

Au
g

-0
7
ay
M

Fe
b06
M
ay
-0
6
Au
g06
No
v06
Fe
b07

-0
5
No
v

ug
A

-0
5

ay
M

ay
-0
5
Au
g05
No
v05
Fe
b06
M
ay
-0
6
Au
g06
No
v06
Fe
b07
Ma
y07
Au
g07
No
v07
Fe
b08
Ma
y08
Au
g08
No
v08

M

-0
5

-60

-400

30

Disclosure and IR activities
Active information disclosure through our company website■Latest topics are displayed in the ticker

Proactively held meetings with investors

Asset Management Reports(sent to existing investors)

English Annual
Reports■Disclosure Materials

You can see the past
disclosure materials in a list

■Latest financial
information
Shows video images ofresults briefings.

Approach targeting retail investors■Press Releases
Updated on the same day as theJapanese press release(Reference)
Number of investor meetings
Domestic institutions
Domestic regional financial institutions
International investors(Europe)
International investors (US)International investors (other)

TOTAL(Reference)
Access to KRI website（clicks）

Portfolio

13,990Press release

12,997

Disclosure material

7,492

What's new

6,371

Dividends

5,853

Domestic regional financial institution

KDRM site top

5,577

International investors (Europe)

List of loan

5,143International investors (US)Occupancy rate

4,170

International investors (other)English website

3,100

TOTAL

64,693

Note:2008/5/1 to 2008/10/31■Japanese
We have renewed our Japanesewebsite in March 2008.

Many of the participants replied they were satisfied
with the seminar.
# of participants:
169 persons

Note：2005/6/21 to2008/12/1(including conferencecalls)

Domestic institutions

Disclosure through JapaneseWebsitehttp://www.kdx-reit.com/

326
128
111
126
137
828

■Participated in a seminar for retail investors
Held by JAPAN-REIT / ib Research & Consulting Inc.

TOTAL

42
15
5
8
29
99

■ Relevant content can be viewed on the
J-REIT’s portal site (JAPAN-REIT.com)

From 2008/5/1–2008/12/1

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

31

Unit price performance/transaction volume
As of 2009/2/25

Kenedix Realty Investment Corporation（
Corporation（KRI）
KRI） Price・
Price・Volume

Highest price（trading price）：988,000（2007/5/31）
Lowest price（trading price）：100,300（2008/10/20）

Volume (unit)

Unitprice (¥)

20,000

Follow-on price
追加上場時公募価格
873,180
円
JPY873,180

7,000

1,000,000
900,000

6,000

5,000

Listing price
上場時公募価格
580,000円
JPY 580,000

Follow-on price
追加上場時公募価格
593,096円
JPY593,096

800,000
700,000

4,000

600,000

3,000

500,000
400,000

2,000
300,000
1,000

0
2005/7/21

200,000
100,000
2005/12/15

2006/5/16

2006/10/5

2007/3/6
出来高VolumePortfolio expansion

2007/7/31

2007/12/25

2008/5/27

2008/10/20

本投資法人終値
Closing pricePortfolio expansion+
Increase the ratio of office buildings（As of 2009/2/25）

Increase the ratio
of office buildings

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

32

Summary financials for the 7th Period—Income statement■Comparison of 7th period and 6th Period

Rental and other operationg revenues(※1)■Comparison of Forecasts for the 7th period(as of 2008/6/11) and actual results

6th period

7th period

2007/11/1
2008/4/30

2008/5/1
2008/10/31

Difference

(\M)

(\M)

(\M)

(¥M )
Note

6,770

7,111

341

Rental revenues

5,626

5,847

221 Ａ（+528）,B(▲459),C(+217),D(▲100)

Common area charges

1,144

1,263

119 Ａ（+137),B(▲10),C(+7),D(▲10)

OthersParling space rental revenues
Utility charge reimbursements
Miscellaneous
Total rental and other operating
revenues (A)Profit on sale of trust beneficiaryinterests in real estate
Operating revenues
Property management fee
Utilities
Taxes
Repairs and maintenance cost
Others（※１）
Depreciation
Total property-related expence B

859
240
458
160

1,045
250
668
126

186
10 Ａ(+23),B(▲12),C(+1),D(▲2)
210 Ａ(+104),B(▲6),C(+25),D(▲1)
▲34

7,630

8,156

526

952

299

▲653

8,582
750
450
395
149
272
1,430
3,447

8,456
792
611
406
188
234
1,445
3,678

Profit on disposal of 13 properties in 6th period
Profit on disposal of 2 properties in 7th period▲126
42 Ａ(+73),B(▲39),C(+28),D(▲4)
161 Ａ(+95),B(▲12),C(+22),D(▲12)
1139▲38 ▲49 decrease of KDX Yoyogi Bld. In 6th period
15
231

Rental business profit（A－B）

4,182

4,477

295

Net operating income（NOI）
Loss on disposal of real estate
Asset management fee
Others（※２）
Operating expenses

5,612
439
424
205
4,517

5,923
442
190
4,311

311
18
▲15
▲206

Operating income

Actualresults

4,065

4,144

79

8
504
113
28
5
41
5
31
730

14
689
114
145
5
41
5
32
1,034

6
185 increasing debt, raising interest, etc
1
117 Syndicate loan fee, upfront fee, etc
1304

Non-operating expenses▲ 721▲ 1,020

▲299

3,343
3,343
1
3,342
0
3,342

3,124
3,124
0
3,123
0
3,123

▲219
▲219
▲1
▲219
▲219

Difference

Comments (on the difference
between the revised forecast andactual results)

Operating revenue

8,174

8,456

・revenue increase from sale of 2
properties (+299)
・ revenue decrease from decrease+282 in expected rent income (▲98)
・revenue increase from acquisitionof 1property including increase inincome for utilities

Operatingexpenses

4,254

4,311

+57 ・ increase in income for utilities

Operating profit

3,919

4,144

+225 -

Non-operating
Profit924

1,034＋110 ・increase in mainly interest expenseincl. Interest
payable866

948

Loss on disposal of 10 properties in 6th period

Non operating income
Interest expense
Investment corporation bonds interest
Financing related expense
Amortization of bond issuance costs
Amortization of unit issuance costs
Amortization of organization costs
Other non-operating expenses
Non-operating expenses

Ordinary income
Income before income taxes
Income taxes
Net income
Retained earnings at the beginning of period
Retained earnings at the end of period

Forecast

Net income

3,002

3,123

Distribution per
unit¥15,000¥15,618# of Properties

・increase in mainly borrowing+82 related expenses (2008/7,
syndicated loan related fees)
Revenue increase from profit on sale(+299), ▲57 due to increase inoperating expenses, increase in loan+121
related expenses for the main part
resulted in increase of non-operating
expenses and ▲110+¥618 -The 2 properties (KDX Iwamoto-cho
Bldg and KDX Harumi Bldg.) were
70 Properties 69 Properties ▲1 Property already reflected in the forecast.
Subsequently 2 properties were soldand 1 acquired

Key factors that led to increase/decrease (Operating profit (loss))
A：occupancy rate of properties acquired in the 6th Period for the full year
B：Revenue decrease from properties sold in the 6th Period
C：Revenue increase from properties acquired in the 7th Period
D： Revenue decrease from properties sold in the 7th Period(※1) Other expenses：
Insurance premium, trust fee(※2) Other operating expenses：Compensation paid to directors, Asset custody fees,
General Admin fees, Auditor’s fees

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

33

Summary financials for the 7th period—Balance sheet andcashflow statement
Current assets
Cash and bank deposits
Entrusted deposits
Other current assets
Fixed assets
Property and equipment at cost
Buildings
Land
Buildings in trust
Lands in trust
Intangible assets
Ground leasehold
Investment and other assets
Leasehold and security deposite
Long-term prepaid expenses
Deffered income tax asset
Deffered 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 deffered hedge transactions
Equities
Total liabilities and unitholders' equity

6th period
7th period
As of Apr. 30, 2008
As of Oct. 30, 2008(%)(%)（\ thousand）（\ thousand）
13,397,027
5.8
13,465,140
5.6
6,379,367
6,799,392
6,813,393
6,230,408
204,266
435,339
216,915,367
94.1
226,028,045
94.3
216,483,952
93.9
225,510,389
94.1
9,520,811
10,571,000
25,928,590
29,093,099
56,291,945
59,032,593
124,742,605
126,813,694
285,3500.1
285,3500.1
285,350
285,350
146,0650.1
232,306
0.1
23,326
12,226
121,520
213,679
1,217
6,399
207,8480.1
155,4120.1
20,35815,26957,18351,306130,305
88,837
230,520,243
100.0
239,648,597
100.0
34,026,147
441,418
31,750,000
351,588
1,172,674
310,465
68,179,934
12,000,000
46,000,000
1,271,027
8,905,814
3,091
102,206,081
124,973,750
3,342,285▲ 1,873
128,314,161
230,520,243

14.8

29.6

44.3
54.2
1.4
▲0.0
55.7
100.0

26,151,126
407,070
24,000,000
321,639
1,238,194
184,220
85,409,894
12,000,000
62,750,000
1,515,158
9,128,461
16,271
111,561,020
124,973,750
3,123,698▲ 9,872
128,087,577
239,648,597

10.9

35.6

46.6
52.1
1.3
▲0.0
53.4
100.0

♦

PPE increase by ￥9,027M(Acquisition price of assets acquired: ￥14,314M Acquisition price of assets sold:￥5,110M)♦

Decrease in short-term borrowings by ￥7,750M♦

Increase in long-term borrowings by ￥16,750M

Cashflow statement

Cash flow from operating activities
Cash flow from investing activities
Csh 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 arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

6th period
As of Apr. 30, 2008

7th period
As of Oct. 31, 2008（\ thousand）（\ thousand）

36,143,837▲47,793,395
11,460,091▲189,466
11,331,324
11,141,858

9,279,012▲14,377,205
5,659,983
561,790
11,141,858
11,703,649

34

J-REIT and real estate market overview
Forum for building up the real estate investment
market that is trusted by investors
No. of REITS(MLIT, Organizer: ARES October 2008)••

Market Cap ($US mn)

250
450,000

Market Cap

 J-REIT performance J-REIT consolidation effects and necessity
 J-REIT market development••

US REIT Reorganization

200

400,000

No. of Investment Corporations

350,000
300,000

150

Refinancing risk
Flexible capital policies (e.g., share buy-backs,
convertible CBs)
Sponsor creditworthiness
Management structure – External or Internal

250,000
200,000

100

150,000
50

Source of information on this page:
The Third “Forum for Building Up the Real Estate Investment
Market that is Trusted by Investors” reference materials(available on the ARES website - in Japanese only)

100,000
50,0000

0<Reference> REIT Structure by Country
1. Japan (J-REIT) – Externally Managed Type

2. USA (US REIT) – Internally Managed Type

Investor

Investor

Investment

Investment Corporation
Real EstateSponsor(Asset Management
Company Investor)

REIT

Management
Instructions

Investment

Stapled Security (*)
Management
Trust portion
Co. Equity

Real Estate

Investment

Asset Management Company

Administration outsourcing (*)

Investor

Investment

MandateEmployees

3-2. Australia (Stapled Type)

Asset management division,building manager, leasing agent, others
Employees

Management

Each divisional function is outsourced
where necessary

Trust
Real Estate
MandateAsset Management Company
Employees
Management
Administration outsourcing (*)

Instructions

Building manager, leasing agent, others

Building manager, leasing agent, others(*) In some cases administration is outsourced via theasset management company(*) In some cases administration is outsourced via theasset management company

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

35

Shareholders of Asset Management Company（Change of Shareholders and Kenedix, Inc.’s result）
Change of shareholders of Kenedix REIT Management

Results of Kenedix group
AUM (by type of investor)

Schedule of shareholder change
2008/12/11

Stock transfer approved by the Asset Management Company

2008/12/19

Execution of the Stocktransfer

100%
80%
60%

Shareholders (before)

40%

Address# ofShares(%)

20%

2-2-9 Shimbashi,
Shimbashi, MinatoMinato-ku,
ku, Tokyo

6,450

100%

0%

Name

Kenedix Inc.

Change to multi shareholders fromsole shareholder

Shareholders (after)

00/12

01/12

02/12

Foreign Investor
Kenedix Group account

03/12

04/12

05/12

Japanese institutional Investor
J-REIT

06/12

07/12

08/09

Pension FundLPT

AUM (by type of property)(%)

2-2-9 Shimbashi,
Shimbashi, MinatoMinato-ku,
ku, Tokyo

5,805

90％
90％

800,00010％
10％

700,000

Name

Kenedix Inc.
ITOCHU Corporation（￥M）

Address# ofshares2-5-1 KitaKita-Aoyama, MnatoMnato-ku,
ku, Tokyo

645

844,077

900,000

734,980
Other
Logistics facilities

600,000

Total-

Profile of ITOCHU co.
Name

6,450

100%

544,480

Commercial facilities

500,000

Residential

400,000

Office385,663
240,393

300,000

ITOCHU Corporation

Founded1949/
1949/12President

Eizo Kobayashi

Capital¥202,241M
202,241M

200,000

68,477100,000

83,799105,880

19,040

0

00/12

01/12

02/12

03/12

04/12

05/12

06/12

07/12

08/09

Source： Kenedix, Inc. as of Sep. 2008
Note：

Includes properties of Japan Logistics Fund, which are entrusted to anaffiliate of Kenedix, Inc. for asset management, and properties held by KRI

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

36

Management structure of the asset management company
Decision making flow chart
Discussion& Review

Preview

Resolution/Reporting

Creation of Asset Administration
Plan, etc.
Approval for transactions withinterested parties

Complianceofficer

Corresponding
Division

Approval for transactions outside ofmanagement guidelines

Compliancecommittee*

Resolution
Assetmanagement
committee

Approval for transactions that follow
Management guidelines excluding
those with interested parties
Note:

ReportingBoard of Directors

Creation of management guidelines

One lawyer works as an external commission member

Policy on transaction with related parties¾ Asset acquisition: Must not acquire properties for morethan appraised price (except for properties pre-acquired by
Kenedix Inc. pursuant to the MOU)
¾ Asset disposal: Must not sell properties for less thanappraised price＜Reference＞
Reference＞
Meetings held by the various committees, Board of Directors of theasset management
management company/investmentcompany/investment corporation
1st
peri
od

2nd
period3rd
period4th
period5th
period6th
period7th
periodCompliance committee

7

7

7

8

6

8

9

Asset management
committee

21

35

39

39

38

38

53

Board of Directors

9

7

9

8

9

7

9

Board of Directors ofInvestment Corporation

11

7

7

9

7

7

8

< Reference >Asset management company’company’s management fee structure Asset management company’s management fee structure¾ Management fee I : 0.15% of total assets¾ Management fee II : 3.0% of money available for distribution in eachfiscal period¾ 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 theoperating revenues from the property (after operating expenses, andbefore depreciation expenses)¾ Management transfer: amount determined in proportion to theacquisition/sale price(e.g. ¥1 – 3B → ¥2M, or ¥5 – 10B → ¥2.4M）¾ Construction Supervision: amount determined in proportion to theconstruction costs(e.g. ¥1 – 5M →5% or ¥10 – 100M → ¥450,000＋3%)

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Kenedix REIT Management, Inc.—Organizational chart
Major members

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

Auditors
Board ofdirectors♦ 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♦

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
Managementgroup♦ 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/♦ Procurement Accounting/regulatory
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
MBA from Columbia Business School

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

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

Yuuji Kamimura
Compliance Officer

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

38

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 arecommendation to purchase or sell, any specific products. Please see disclaimer in the final page of this documents.

39