Financial Summary (Unaudited)
Historical Operating Trends
For the 26th–30th Fiscal Periods

30th Period
29th Period
28th Period
27th Period
26th Period(as of(as of(as of(as of(as ofApr. 30, 2018) Oct. 31, 2018) Apr. 30, 2019) Oct. 31, 2019) Apr. 30, 2020)

PeriodUnit

Operating revenues

millions of yen

14,823

15,42015,212

15,027

15,272(Rental revenues)

millions of yen

14,22214,802

14,595

14,95915,215

Operating expenses

millions of yen

7,974

8,271

8,039

8,199

8,132

(Property-related expenses)

millions of yen

6,977

7,105

6,880

7,092

7,008

Operating income

millions of yen

6,848

7,148

7,172

6,828

7,140

Ordinary income

millions of yen

5,829

6,109

6,179

5,845

6,177

Net income (a)millions of yen

5,828

6,107

6,178

5,844

6,175

Total assets (b)millions of yen

422,993437,221436,753439,773447,707(Period-on-period change)%(+1.9)(+3.4)(–0.1)(+0.7)(+1.8)

Interest-bearing debt (c)millions of yen

185,850

183,050

182,050

185,050

192,050(Period-on-period change)%

Unitholders’ equity (d)millions of yen(Period-on-period change)%

Unitholders’ capitalmillions of yen(Period-on-period change)(+3.5)(–1.5)(–0.5)(+1.6)(+3.8)

213,642229,313229,440

229,276

229,589(+0.4)(+7.3)(+0.1)(–0.1)(+0.1)

206,199

220,970

220,970

220,970

220,970%(0.0)(+7.2)

(0.0)

(0.0)

(0.0)

Number of investment units issued and outstanding (e)unit

404,885

428,510428,510428,510428,510Unitholders’ equity per unit (d)/(e)yen527,661

535,141

535,437

535,054535,786

Total distribution (f)millions of yen

5,247

5,766

5,878

5,844

6,175

Distribution per unit (f)/(e)yen

12,96013,45813,71913,63914,412(Earnings distributed per unit)

yen

12,96013,45813,71913,63914,412(Distribution in excess of earnings per unit)

yen

—

—

—

—

—

Return on assets (annualized) (Notes 1 and 2)%

1.4 (2.8)

1.4 (2.8)

1.4 (2.9)

1.3 (2.6)

1.4 (2.8)

Return on net assets (annualized) (Notes 2 and 3)%

2.7 (5.5)

2.8 (5.5)

2.7 (5.4)

2.5 (5.1)

2.7 (5.4)

50.5

52.4

52.5

52.1

51.3

(–0.8)(+1.9)(+0.1)(–0.4)(–0.9)

43.9

41.9

41.7

42.1

42.9

(+0.7)(–2.1)(–0.2)(+0.4)(+0.8)

90.0

94.4

95.1

99.9

99.9

Net assets ratio at end of period (d)/(b)(Period-on-period change)
Interest-bearing debt ratio at end of period (c)/(b)(Period-on-period change)
Payout ratio (Note 4) (f)/(a)%%%Other references
Number of properties

properties

97

97

96

97

99

Total leasable floor area2m

466,031.33

471,041.45

468,528.20

480,328.18

488,127.53

Occupancy rate at end of period

%

99.0

99.1

99.2

99.5

99.5

Depreciation expenses for the period

millions of yen

2,295

2,358

2,369

2,419

2,470

Capital expenditures for the period

millions of yen

886

925

1,231

1,426

1,485

Leasing NOI (Net Operating Income) (Note 5)

millions of yen

9,539

10,055

10,084

10,287

10,676

FFO (Funds From Operation) (Note 6)

millions of yen

7,574

7,934

7,983

8,265

8,646

FFO per unit (Note 7)

yen

18,70818,516

18,63019,287

20,178Notes: 1. Return on assets = Ordinary income / {(Total assets at beginning of period + Total assets at end of period) / 2} × 100
2. Annualized values for the 26th Fiscal Period are calculated based on a period of 181 days, 184 days for the 27th Fiscal Period, 181 days for the 28th Fiscal
Period, 184 days for the 29th Fiscal Period, and 182 days for the 30th Fiscal Period.
3. Return on net assets = Net income / {(Total net assets at beginning of period + Total net assets at end of period) / 2} × 100
4. Payout ratio is rounded down to the first decimal place.
5. Leasing NOI = Rental revenues – Property-related expenses + Depreciation expenses for the period
6. FFO = Net income + Depreciation expenses for the period – Gain on sale of real estate properties + Loss on sale of real estate properties
7. FFO per unit = FFO / Number of investment units issued and outstanding (figures below ¥1 rounded down)

16Kenedix Office Investment Corporation

Balance Sheet
As of April 30, 2020
As of April 30, 2020
AssetsCurrent assets
Cash and deposits (Notes 4 and 16)
Cash and deposits in trust (Notes 4 and 16)
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment (Notes 5 and 18)
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust (Note 8)
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment, net
Intangible assets (Note 5)
Leasehold right (Note 18)
Leasehold right in trust (Note 18)
Other
Total intangible assets
Investments and other assets
Investment securities (Note 16)
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Other (Notes 11,16 and 17)
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

KENEDIX Office Investment Corporation

As of October 31, 2019

In thousands of yen¥¥

14,699,777
11,470,987
277,457
74,600–12,394
26,535,218¥

14,019,313
11,366,312
361,207
109,777
61,78913,22325,931,623

17,951,815(6,221,158)
11,730,656
43,564(16,589)
26,974432,209(272,362)
159,847
96,841(64,691)
32,15027,520,902
126,874,865(33,269,306)
93,605,558
362,902(179,886)
183,016
1,741,678(796,661)
945,017528,530(346,706)
181,824
283,648,781
418,034,728

17,834,390(5,917,165)
11,917,224
34,963(15,551)
19,411
432,209(260,033)
172,176
94,116(61,148)
32,967
27,520,902
124,425,127(31,204,886)
93,220,241
359,676(168,392)
191,284
1,656,878(743,824)
913,054505,190(326,879)
178,310
276,458,793
410,624,366

285,257
349,201
728366
1,168
635,627

285,257
349,975
1,796
637,029

1,127,724
10,000122,889
1,150,151
20,501
2,431,266
421,101,622

1,131,953
10,000122,889
1,232,222
8,768
2,505,834
413,767,231

51,84018,34270,182447,707,022

46,83527,51374,348439,773,203¥

Kenedix Office Investment Corporation17

As of April 30, 2020
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Notes 7 and 16)
Current portion of long-term loans payable (Notes 7,16 and 17)
Accounts payable–otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Other (Notes 16 and 17)
Total current liabilities
Non-current liabilities
Investment corporation bonds (Notes 7 and 16)
Long-term loans payable (Notes 7, 16 and 17)
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Other (Notes 16 and 17)
Total non-current liabilities
Total liabilities
Net Assets
Unitholders' equity
Unitholders' capital
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Notes 16 and 17)
Total valuation and translation adjustments
Total net assets (Note 12)
Total liabilities and net assets
See accompanying notes to the financial statements.

18

As of October 31, 2019

In thousands of yen¥

829,804
9,500,000
22,300,000
486,379
71,983825
378,113
2,821,477
7,225¥

36,395,810

1,119,767
2,200,000
21,600,000
475,642
69,940802
132,3542,565,047
16,312
123
28,179,990

10,000,000
150,250,000
2,005,687
19,113,024
352,748
181,721,460
218,117,270

8,000,000
153,250,000
2,002,385
18,741,871
322,853
182,317,110
210,497,100

220,970,508

220,970,508

2,775,335
2,775,335
6,175,926
8,951,261
229,921,769

2,775,335
2,775,335
5,844,500
8,619,835
229,590,343(332,017)(332,017)
229,589,752
447,707,022(314,241)(314,241)
229,276,102
439,773,203

–

¥

¥

Kenedix Office Investment Corporation

Statement of Income and Retained Earnings
For the period from November 1, 2019 to April 30, 2020
From November 1, 2019

From May 1, 2019

to April 30, 2020

to October 31, 2019

In thousands of yen
Operating revenues
Rent revenue – real estate (Note 14)¥

Other lease business revenue (Note 14)

13,429,120¥

12,976,033

1,785,979

1,983,471

57,60068,38915,272,699

15,027,894

Expenses related to rent business (Note 14)

7,008,903

7,092,170

Asset management fees

929,882

899,348

Directors' compensation

8,400

8,400

Asset custody fees

23,193

23,102Administrative service fees

57,59557,264

Audit fees

12,80012,800

Dividends income
Total operating revenues
Operating expenses

91,860106,412

Total operating expenses

8,132,635

8,199,497

Operating income

7,140,064

6,828,396

Other operating expenses

Non-operating income
Interest income

68

68

Dividends and redemption-prescription

353

403

Interest on refund

109

2

531

473

Interest expenses

792,200

810,689

Interest expenses on investment corporation bonds

29,03828,128Financing-related expenses

Total non-operating income
Non-operating expenses

125,667

127,833

Amortization of investment corporation bond issuance costs

4,963

4,511

Amortization of investment unit issuance costs

9,171

9,171

Other non-operating expenses

2,352

2,772

Total non-operating expenses

963,393983,106

Ordinary income

6,177,202

5,845,764

Income before income taxes

6,177,202

5,845,764

Current

1,332

1,264

Deferred(4)(1)

Income taxes (Note 11)

Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings

¥

1,328

1,263

6,175,873

5,844,500

52–

6,175,926¥

5,844,500

See accompanying notes to the financial statements.

KENEDIX Office Investment Corporation

Kenedix Office Investment Corporation

19

Kenedix Office Investment Corporation

Statement of Changes in Net Assets
For the period from November 1, 2019 to April 30, 2020
Valuationandtranslation
adjustments

Unitholders' equity

Surplus
Voluntary
retainedearnings

Deferred
UnappropriatedUnitholders'

Reserve forcapitalreduction entry

gains orretained earnings

Total

Total unitholders'losses on

Total net

(Note 21)

surplusequityhedgesassetsIn thousands of yen
Balance as ofApril 30, 2019¥

220,970,508¥

2,475,385¥

6,178,677¥

8,654,063¥

229,624,572¥(184,329)¥

229,440,242

Changes during the fiscal period
Provision of reserve for reduction–

299,949（299,949）

–

–

–

–

Dividends of surplus––（5,878,728）（5,878,728）（5,878,728）–（5,878,728）

Net income––

5,844,500

5,844,500

5,844,500–

5,844,500

–

–

–

–

–

(129,911)(129,911)–

299,949(334,177)(34,228)(34,228)(129,911)(164,139)

entry

Net changes of items other thanunitholders’ equity
Total changes during
the fiscal period
Balance as of
October 31, 2019 (Note 6)¥

220,970,508¥

2,775,335¥

5,844,500¥

8,619,835¥

229,590,343¥(314,241)¥

229,276,102

Changes during the fiscal period
Dividends of surplus––（5,844,447）（5,844,447）（5,844,447）–（5,844,447）

Net income––

6,175,873

6,175,873

6,175,873–

6,175,873

–

–

–

–

–

(17,776)(17,776)––

331,425

331,425

331,425(17,776)

313,649

Net changes of items other thanunitholders’ equity
Total changes during
the fiscal period
Balance as ofApril 30, 2020 (Note 6)¥

220,970,508¥

See accompanying notes to the financial statements.

20

2,775,335¥

6,175,926¥

8,951,261¥

229,921,769¥(332,017)¥

229,589,752

Kenedix Office Investment Corporation
Statement of Cash Flows
For the period from November 1, 2019 to April 30, 2020

From November 1, 2019
to April 30, 2020

From May 1, 2019
to October 31, 2019

In thousands of yen
Cash flows from operating activities
Income before income taxes¥

Depreciation
Amortization of long-term prepaid expenses
Interest income

6,177,202¥

5,845,764

2,470,882

2,420,535

117,317

120,778

(68)

(68)

821,239

838,818

Amortization of investment unit issuance costs

9,171

9,171

Amortization of investment corporation bond issuance costs

4,963

4,511

Decrease (increase) in operating accounts receivable

83,749(62,429)

Decrease (increase) in consumption taxes receivable

61,789(61,789)

35,176(60,068)(194,273)

56,398Interest expenses

Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable–other

10,954(53,110)

Increase (decrease) in accrued consumption taxes

245,758(342,749)

Increase (decrease) in advances received

256,430

196,680

Increase (decrease) in deposits received(9,087)

19,583

Decrease (increase) in long-term prepaid expenses(35,245)(174,437)

1,953(12,220)

Other, net
Subtotal

10,057,914

8,745,367

Interest income received

68

68Interest expenses paid

(819,195)(847,538)

(812)

(805)

9,237,974

7,897,092

Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment(143,355)(59,029)

Purchases of property, plant and equipment in trust(9,814,320)(10,577,896)

Repayments of tenant leasehold and security deposits(28,690)(20,533)

Proceeds from tenant leasehold and security deposits

29,04036,145

Repayments of tenant leasehold and security deposits in trust(317,128)(1,122,394)

Proceeds from tenant leasehold and security deposits in trust

675,899

1,477,344

Payments of restricted deposits in trust(74,775)(30,740)

Proceeds from restricted deposits in trust

21,551

8,362(9,651,778)(10,288,741)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short-term loans payable

9,500,000–

Decrease in short-term loans payable(2,200,000)(2,000,000)

Proceeds from long-term loans payable

8,200,000

11,200,000

Repayments of long-term loans payable(10,500,000)(6,200,000)

Proceeds from issuance of investment corporation bonds

1,990,031–

Dividends paid

(5,844,312)(5,879,350)

Net cash provided by (used in) financing activities

1,145,719(2,879,350)

Net increase (decrease) in cash and cash equivalents

731,914(5,270,999)

Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period (Note 4)

23,612,771¥

24,344,686

28,883,770¥

23,612,771

See accompanying notes to the financial statements.

Kenedix Office Investment Corporation

KENEDIX Office Investment Corporation21

Kenedix Office Investment Corporation

Notes to the Financial Statements
For the period from November 1, 2019 to April 30, 2020

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Office Investment Corporation (“the Investment Corporation”) is a real estate investment corporation whose units are listed on the Tokyo
Stock Exchange. The Investment Corporation is engaged in the ownership and operation of selected mainly office buildings in Japan, with a focus
on mid-sized office buildings in the Tokyo metropolitan area. The Investment Corporation was incorporated on May 6, 2005 as an investment
corporation under the Law Concerning Investment Trusts and Investment Corporations of Japan, or “the Investment Trust Law.” On July 21, 2005,
the Investment Corporation was listed on the Real Estate Investment Trust Market of the Tokyo Stock Exchange with a total of 75,400 investment
units issued and outstanding (Securities Code: 8972). Subsequently, the Investment Corporation raised funds through eight public offerings. Pursuant
to the Investment Trust Law, the Investment Corporation is externally managed by a registered asset management company, Kenedix Real Estate
Fund Management, Inc. (“the Asset Management Company”), a subsidiary of Kenedix, Inc. (“Kenedix”). In concert with the Asset Management
Company, the Investment Corporation strives to maximize cash distribution to investors by securing stable earnings and sustainable investment
growth. To this end, the Investment Corporation adopts a dynamic and flexible investment stance that accurately reflects its environment and market
trends, and endeavors to ensure a timely response to each and every opportunity.
During the period ended October 31, 2019, the Investment Corporation acquired one office building (Chofu Center Building: acquisition price of¥8,700 million).
During the period ended April 30, 2020, the Investment Corporation acquired two office buildings (Tosabori Prime: acquisition price of ¥5,000
million, and KDX Kanda Ekimae Building: acquisition price of ¥3,300 million).
At the end of the twenty-ninth and thirtieth fiscal periods (fiscal periods ended October 31, 2019 and April 30, 2020), the Investment Corporation
had total unitholders’ capital of ¥220,970 million with 428,510 investment units outstanding, respectively. The Investment Corporation owned aportfolio of 97 properties (consisting of 96 office buildings and one other property) and 99 properties (consisting of 98 office buildings and one otherproperty) with total acquisition prices of ¥424,535 million and ¥432,835 million at the end of the twenty-ninth and thirtieth fiscal periods, respectively.
The occupancy ratios were approximately 99.5% at the end of the twenty-ninth and thirtieth fiscal periods, respectively.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust Act of Japan, theFinancial Instruments and Exchange Law of Japan and related regulations, and in conformity with accounting principles and practices generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the application and disclosure requirements of the International
Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The accompanying financial statements are basically a translation of the audited financial statements that were prepared for Japanese domestic
purposes from the accounts and records maintained by the Investment Corporation and filed with the Kanto Local Finance Bureau of the Ministry of
Finance as required by the Financial Instruments and Exchange Law. In preparing the accompanying financial statements, relevant notes have been
added and certain reclassifications have been made to the financial statements issued domestically in order to present them in a form that is morefamiliar to readers outside Japan. The Investment Corporation’s fiscal period is a six-month period that ends at the end of April and the end of
October each year. The Investment Corporation does not prepare consolidated financial statements because it has no subsidiaries.

222. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) Securities
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.
Concerning silent partnership (tokumei kumiai, “TK”) interests, the method of incorporating the amount of equity equivalent to the portion that
corresponds to the net gain or loss of the TK is adopted.
(B) Property, Plant and Equipment (including trust assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is calculated on a straight-line basis over theestimated useful lives of the assets ranging as stated below:

Buildings

From November 1, 2019
to April 30, 2020
2–49 years

From May 1, 2019
to October 31, 20192–49 years

Structures

2–45 years

2–45 years

Machinery and equipment

3–17 years

3–17 years

Tools, furniture and fixtures

3–20 years

3–20 years(C) Intangible Assets (including trust assets)
Intangible assets are amortized by the straight-line method.
Leasehold right: Fixed-term land leasehold is amortized over a contractual period of 48 years and 9 months under the straight-line method.
(D) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(E) Investment Unit Issuance Costs
Investment unit issuance costs are amortized over a period of three years under the straight-line method.
(F) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(G) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all assets andliabilities in trust are recorded in the relevant balance sheets and statements of income and retained earnings.
(H) Revenue Recognition
Operating revenues consist of rental revenues including base rents, common area charges and other operating revenues, which include utility
charge reimbursement, parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an
accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and their amounts can be reasonably
estimated. Reimbursements from tenants including utility charge reimbursements are recorded on a gross basis and such amounts arerecorded both as revenues and expenses during the fiscal period.

Kenedix Office Investment Corporation

23

(I)

Taxes on Property, Plant and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar
year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to the said
period. Under Japanese tax rules, the seller of property at the time of disposal is liable for these taxes on the property from the date of disposal
to the end of the calendar year in which the property is disposed. The seller, however, is generally reimbursed by the purchaser for these accrued
property-related tax liabilities.
When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related to the period
following the purchase date of each property through the end of the calendar year. The amounts of those allocated portions of the propertyrelated taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to ¥35,360
thousand and ¥29,256 thousand as of April 30, 2020 and October 31, 2019, respectively. In subsequent calendar years, such property-related
taxes are charged as operating expenses in the fiscal period to which the installments of such taxes correspond.

(J) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets andliabilities using the statutory tax rates.
(K) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes
applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(L) Derivative Financial Instruments
The Investment Corporation utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure
to changes in interest rates. The Investment Corporation deferred recognition of gains or losses resulting from changes in fair value of interestrate swap contracts because these contracts met the criteria for deferral hedging accounting. However, the Investment Corporation adopted
special treatment for interest-rate swap contracts if they met the criteria for hedging accounting under this treatment. The hedge effectivenessfor the interest-rate swap contracts is assessed each fiscal period except for those that meet the criteria of special treatment.
(M) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily
convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.
(N) Presentation of Amounts
Amounts of less than one thousand yen have been truncated in the Japanese financial statements prepared in accordance with Japanese
GAAP and filed with regulatory authorities in Japan. Unless otherwise noted, amounts are rounded down and ratios are rounded off in theaccompanying financial statements.
Totals shown in the accompanying financial statements do not necessarily agree with the sums of the individual amounts.

24

3. ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE
New accounting standards and implementation guidance issued but not yet effective are as follows:・ “Accounting Standard for Revenue Recognition” (Accounting Standards Board of Japan (ASBJ) Statement No. 29 issued on March 31,
2020)・ “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No. 30 issued on March 31, 2020)(1) Overview
The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) in the United States have jointly
developed comprehensive accounting standards for revenue recognition and issued “Revenue from Contracts with Customers” (IFRS 15(IASB) and Topic 606 (FASB)) in May 2014. Given the situation where IFRS 15 is applied from fiscal years beginning on or after January 1,
2018 and that Topic 606 is applied from fiscal years beginning after December 15, 2017, the ASBJ has developed comprehensive accounting
standards for revenue recognition and issued them together with the implementation guidance.
The basic policy of the ASBJ when it developed the accounting standards for revenue recognition was to specify the accounting standards,
incorporating the basic principles of IFRS 15 as a starting point, from the perspective of comparability between financial statements, which isone of the benefits of maintaining compatibility with IFRS 15. The basic policy also stipulates that if there is an item to which consideration
should be given, such as practices that have been conducted thus far in Japan, alternative treatments will be added to the extent to which
comparability is not impaired.
(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending October 31, 2021.
(3) Impact of applying the accounting standards
The impact of applying “Accounting Standard for Revenue Recognition” and its guidance on the financial statements is currently underevaluation.
・ “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30 issued on July 4, 2019)
・ “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31 issued on July 4, 2019)
・ “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No. 19 issued on March 31, 2020)(1) Overview
The IASB and the FASB have established detailed guidance regarding fair value measurement (IFRS 13 “Fair Value Measurement” (IASB) and
Topic 820 “Fair Value Measurement” (FASB)). The ASBJ repeatedly considered the guidance regarding fair value of financial instruments anddisclosure in order to improve the comparability with such international accounting standards, and issued “Accounting Standard for Fair Value
Measurement” and “Implementation Guidance on Accounting Standard for Fair Value Measurement.”(2) Scheduled date of application
The accounting standards will be applied from the beginning of the fiscal period ending October 31, 2021.
(3) Impact of applying the accounting standards
The impact of applying the “Accounting Standard for Fair Value Measurement” and its guidance on the financial statements is currently underevaluation.
・“Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No. 31 issued on March 31, 2020)(1) Overview
Paragraph 125 of International Accounting Standard 1 (IAS 1), “Presentation of Financial Statements,” (issued by the IASB in 2003) requires
disclosure of information about the “assumptions the entity makes about the future, and other major sources of estimation uncertainty.” In thisregard, there has been a request that the major sources of estimation uncertainty should be disclosed in the notes to financial statements
under Japanese GAAP to provide useful information to users of financial statements. In response to this request, the ASBJ developed andissued “Accounting Standard for Disclosure of Accounting Estimates.”(2) Scheduled date of application
The accounting standard will be applied from the end of the fiscal period ending April 30, 2021.
KENEDIX Office Investment Corporation

Kenedix Office Investment Corporation

25

・“Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections” (ASBJ Statement No. 24 issued on
March 31, 2020)(1) Overview
The ASBJ’s Standards Advisory Council recommended that the ASBJ consider enhancing disclosures for notes relating to “accounting policies
and methods adopted in the cases where the relevant accounting standards were not clear.” In response to such recommendations, the ASBJ
issued the revised “Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections.”(2) Scheduled date of application
The accounting standard will be applied from the end of the fiscal period ending April 30, 2021.

4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of April 30, 2020 and October 31, 2019.
As of April 30, 2020

As of October 31, 2019

In thousands of yen
Cash and deposits¥ 14,699,777¥ 14,019,313

Cash and deposits in trust

11,470,987

11,366,312

Restricted deposits in trust (Note)(1,826,078)(1,772,854)

Cash and cash equivalents in trust¥ 24,344,686¥ 23,612,771

Note: Restricted deposits in trust are retained for the repayment of tenant leasehold and security deposits in trust.

5. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, plant and equipment and intangible assets consist of the following as of April 30, 2020.
Type of asset

Balance atthe beginningof period

Increase during
the period

Balance atthe end of
periodDecreaseduring theperiodDepreciation
Accumulated
depreciation

Depreciation
for the periodNetbalance atthe end of
periodRemarks(in thousands of yen)
Buildings¥ 17,834,390¥ 117,424

Structures

34,963–¥ 17,951,815¥ 6,221,158¥ 303,993¥ 11,730,656

8,601

–

43,564

16,5891,038

26,974432,209––432,209272,362

12,328

159,847

94,116

2,725–

96,84164,691

3,542

32,15027,520,902––

27,520,902––

27,520,902

Subtotal

45,916,582

128,751–

46,045,333

6,574,802

320,90239,470,531

Buildings in trust¥ 124,425,127¥ 2,449,737–¥ 126,874,865¥ 33,269,306¥ 2,064,420¥ 93,605,558

Structures in trust

359,676

3,225–

362,902179,886

11,493

183,016

Machinery andequipment in trust

1,656,878

84,799–1,741,678

796,661

52,836

945,017

Tools, furnitureand fixtures in
trust

505,190

23,340–528,530

346,706

19,826

181,824

Land in trust

276,458,793

7,189,987–

283,648,781––

283,648,781

Subtotal

403,405,666

9,751,091–

413,156,757

34,592,560

2,148,577

378,564,197

Total property, plant andequipment

449,322,249

9,879,842–

459,202,091

41,167,362

2,469,480

418,034,728

Leasehold right¥ 290,050–¥ 290,050¥ 4,792–¥ 285,257

Leasehold right in
trust

363,784––

363,784

14,583

774

349,201

Other

6,278

–

–

6,278

5,110

627

1,168

Total intangible assets

660,113––660,113

24,486

1,402

635,627¥449,982,362¥9,879,842–¥459,862,205¥41,191,849¥2,470,882¥418,670,356

Machinery andequipment
Tools, furnitureand fixtures
Land
Property,plant andequipment

Intangible
assets

Total

¥

–

¥

¥

¥

¥

¥

Note: The amount of increase during the period is primarily attributable to the acquisition of the two real estate properties.
26

Note

Note

Property, plant and equipment and intangible assets consist of the following as of October 31, 2019.
Type of asset

Balance atthe beginningof period

Increase during
the period

Decreaseduring theperiodDepreciation

Balance atthe end of
periodAccumulated
depreciation

Depreciation
for the periodNetbalance atthe end of
periodRemarks(in thousands of yen)
Buildings¥ 17,776,419¥ 57,970

Structures

32,618

Machinery andequipment
Tools, furnitureand fixturesLand–¥ 17,834,390¥ 5,917,165¥ 300,953¥ 11,917,224

2,344

–

34,963

15,551860

19,411

424,6627,547–

432,209

260,033

12,214

172,176

93,446670–

94,116

61,1483,499

32,967

27,520,902––

27,520,902––

27,520,902

Subtotal

45,848,050

68,532

Buildings in trust¥ 121,511,168¥ 2,913,959

Structures in trust

343,278

Machinery andequipment in trust
Tools, furnitureand fixtures in
trust

¥

–

45,916,582

6,253,899

317,527

39,662,682–¥ 124,425,127¥ 31,204,886¥ 2,019,801¥ 93,220,241

16,398–359,676

168,392

11,158191,284

1,604,492

52,386–

1,656,878

743,824

51,855913,054

487,000

18,189–505,190326,879

18,791

178,310Land in trust
Construction inprogress in trust

269,059,794

7,398,999–

276,458,793––

276,458,793

1,511

–

1,511

–

–

–

–

Subtotal

393,007,244

10,399,933

1,511

403,405,666

32,443,982

2,101,605

370,961,684

Total property, plant andequipment

438,855,294

10,468,465

1,511

449,322,249

38,697,882

2,419,133

410,624,366

Leasehold right¥ 290,050¥–¥ 290,050¥ 4,792–¥ 285,257

Leasehold right in
trust

363,784––

363,784

13,809774

349,975

Other

6,278

–

–

6,278

4,482

627

1,796

Total intangible assets

660,113––660,11323,084

1,402

637,029¥439,515,408¥ 10,468,465

1,511¥449,982,362¥38,720,966¥2,420,535¥411,261,396

Property,plant andequipment

Intangible
assets

Total

–

¥

¥

¥

¥

Note

Note

Note: The amount of increase during the period is primarily attributable to the acquisition of the one real estate property.

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

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

KENEDIX Office Investment Corporation

From November 1, 2019
to April 30, 2020
2,000,000

From May 1, 2019
to October 31, 2019
2,000,000

428,510428,510

Kenedix Office Investment Corporation27

7. SHORT-TERM LOANS PAYABLE, LONG-TERM LOANS PAYABLE AND INVESTMENTCORPORATION BONDS
The following summarizes short-term loans payable, long-term loans payable and investment corporation bonds outstanding as of April 30, 2020:
Classification
Short-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

January 31, 2020

January 31, 2021

0.32%

January 31, 2020

January 31, 2021

0.32%

500,000

January 31, 2020

January 31, 2021

0.27%

4,200,000

January 31, 2020

January 31, 2021

0.27%

800,000

March 12, 2020

February 28, 2021

0.38%

3,000,000

March 31, 2020

March 31, 2021

0.33%

¥

500,000

Subtotal
Current portion of long-term loans payable

9,500,000
July 31, 2014

July 31, 2020

0.74%

August 30, 2013

August 31, 2020

1.42%

¥

1,500,000

August 30, 2019

August 31, 2020

0.27%

1,000,000

September 22, 2014

September 30, 2020

0.80%

2,700,000

28

2,700,000

April 22, 2014

October 31, 2020

0.95%

2,900,000

July 31, 2014

October 31, 2020

0.76%

300,000

November 12, 2013

November 12, 2020

1.07%

2,000,000

November 12, 2013

November 12, 2020

1.07%

500,000

November 29, 2013

November 30, 2020

1.12%

1,000,000

November 29, 2013

November 30, 2020

1.12%

900,000

November 29, 2019

November 30, 2020

0.37%

1,000,000

November 29, 2019

November 30, 2020

0.32%

500,000

November 29, 2019

November 30, 2020

0.32%

200,000

January 10, 2014

January 31, 2021

1.21%

1,300,000

January 31, 2014

January 31, 2021

1.13%

2,300,000

January 30, 2015

January 31, 2021

0.71%

1,500,000

March 12, 2014

March 12, 2023

1.36%

March 20, 2014

September 20, 2021

1.01%

4,000,000

March 20, 2014

March 20, 2022

1.20%

3,000,000

March 20, 2014

March 12, 2023

1.35%

2,000,000

July 10, 2014

July 10, 2021

0.90%

2,000,000

July 10, 2014

July 10, 2021

0.90%

500,000

July 31, 2014

July 31, 2022

1.01%

2,200,000

SubtotalLong-term loans payable

500,000

22,300,000¥

1,800,000

September 1, 2014

August 31, 2021

0.89%

800,000

September 1, 2014

August 31, 2021

0.89%

500,000

September 3, 2014

August 31, 2022

0.98%

1,000,000

September 3, 2014

August 31, 2022

0.98%

950,000

September 30, 2014

September 30, 2021

0.89%

1,000,000

October 31, 2014

October 31, 2021

0.80%

3,000,000

October 31, 2014

October 31, 2023

1.07%

2,000,000

October 31, 2014

October 31, 2023

1.13%

1,500,000

October 31, 2014

October 31, 2023

1.07%

1,000,000

October 31, 2014

October 31, 2024

1.26%

2,000,000

October 31, 2014

October 31, 2024

1.26%

1,000,000

January 30, 2015

January 31, 2025

1.16%

1,500,000

February 18, 2015

February 28, 2022

0.91%

1,250,000

February 18, 2015

February 28, 2022

0.91%

350,000

February 18, 2015

February 29, 2024

1.16%

1,700,000

February 18, 2015

February 28, 2025

1.31%

1,250,000

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)February 27, 2015

February 28, 2025

1.15%

March 12, 2015

February 28, 2025

1.22%

1,000,000

March 31, 2015

March 31, 2025

1.27%

2,500,000¥

2,100,000

April 30, 2015

April 30, 2022

0.83%

2,300,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

September 30, 2015

September 30, 2024

1.07%

2,000,000

October 30, 2015

October 31, 2024

0.99%

1,000,000

October 30, 2015

October 30, 2025

1.11%

1,500,000

October 30, 2015

October 30, 2025

1.11%

2,000,000

October 30, 2015

October 30, 2025

1.11%

2,500,000

October 30, 2015

October 30, 2025

1.12%

2,500,000

November 12, 2015

November 30, 2025

1.17%

1,000,000

January 29, 2016

January 31, 2022

0.59%

2,500,000

January 29, 2016

January 31, 2022

0.64%

500,000

January 29, 2016

January 29, 2026

1.07%

2,000,000

January 29, 2016

January 29, 2026

1.02%

1,800,000

February 18, 2016

February 18, 2026

1.00%

1,000,000

February 18, 2016

February 18, 2026

1.00%

500,000

March 31, 2016

March 31, 2026

0.90%

1,000,000

April 28, 2016

April 30, 2024

0.65%

2,000,000

April 28, 2016

April 30, 2026

0.84%

2,000,000

April 28, 2016

April 30, 2026

0.87%

1,000,000

July 29, 2016

July 31, 2026

0.61%

1,500,000

August 2, 2016

July 31, 2026

0.54%

1,000,000

October 31, 2016

October 31, 2024

0.67%

1,000,000

October 31, 2016

October 31, 2026

0.88%

2,500,000

October 31, 2016

October 31, 2026

0.76%

1,000,000

October 31, 2016

October 31, 2026

0.73%

4,000,000

October 31, 2016

October 31, 2026

0.83%

1,500,000

December 12, 2016

November 30, 2026

0.98%

500,000

December 28, 2016

December 28, 2026

0.95%

1,500,000

January 16, 2017

January 31, 2027

0.86%

500,000

January 31, 2017

January 31, 2027

0.85%

700,000

March 28, 2017

March 31, 2027

0.85%

500,000

June 30, 2017

June 30, 2027

0.85%

1,500,000

August 10, 2017

July 28, 2027

0.80%

3,500,000

August 31, 2017

August 31, 2023

0.54%

1,000,000

September 21, 2017

March 31, 2024

0.56%

1,000,000

September 21, 2017

September 30, 2025

0.68%

1,500,000

September 21, 2017

March 31, 2027

0.73%

1,000,000

September 21, 2017

September 21, 2027

0.87%

1,000,000

September 21, 2017

September 30, 2027

0.85%

2,500,000

October 31, 2017

October 31, 2027

0.81%

2,500,000

November 13, 2017

November 13, 2027

0.93%

3,000,000

December 7, 2017

November 30, 2027

0.90%

1,400,000

December 7, 2017

November 30, 2027

0.82%

1,200,000

December 7, 2017

November 30, 2027

0.97%

1,000,000

December 7, 2017

November 30, 2027

0.94%

1,000,000

Kenedix Office Investment Corporation

KENEDIX Office Investment Corporation

29

Classification
Long-term loans payable

Drawdown date

Last repayment date

Balance

Weighted-averageinterest rate

(In thousands of yen)¥

November 30, 2027

0.87%

December 7, 2017

November 30, 2027

0.90%

800,000

December 7, 2017

November 30, 2027

0.87%

600,000

December 28, 2017

December 28, 2025

0.74%

500,000

December 28, 2017

December 28, 2026

0.88%

500,000

December 28, 2017

December 28, 2027

0.86%

500,000

March 12, 2018

March 31, 2028

0.91%

1,500,000

March 26, 2018

March 31, 2027

0.81%

1,000,000

March 26, 2018

March 31, 2028

0.90%

1,000,000

July 31, 2018

July 31, 2028

0.99%

500,000

August 20, 2018

August 31, 2025

0.70%

500,000

August 20, 2018

August 31, 2028

1.00%

1,000,000

August 20, 2018

August 31, 2028

1.00%

1,000,000

August 20, 2018

August 31, 2028

1.00%

500,000

August 20, 2018

August 31, 2028

0.97%

500,000

August 31, 2018

August 31, 2025

0.70%

500,000

August 31, 2018

August 31, 2025

0.72%

300,000

August 31, 2018

August 31, 2028

1.01%

700,000

October 31, 2018

October 31, 2028

1.01%

1,500,000

October 31, 2018

October 31, 2028

0.91%

1,000,000

October 31, 2018

October 31, 2028

1.01%

500,000

March 28, 2019

March 31, 2029

0.84%

1,400,000

March 29, 2019

March 31, 2029

0.84%

2,950,000

June 14, 2019

June 30, 2023

0.25%

500,000

June 14, 2019

December 28, 2026

0.52%

500,000

June 14, 2019

April 30, 2027

0.61%

1,000,000

June 14, 2019

March 31, 2029

0.72%

1,000,000

July 10, 2019

July 31, 2023

0.23%

500,000

July 31, 2019

July 31, 2022

0.29%

1,000,000

July 31, 2019

July 31, 2023

0.29%

1,000,000

July 31, 2019

April 30, 2027

0.55%

1,000,000

July 31, 2019

April 30, 2027

0.55%

1,000,000

September 30, 2019

September 30, 2026

0.49%

1,000,000

September 30, 2019

March 31, 2027

0.53%

900,000

September 30, 2019

March 31, 2027

0.43%

800,000

January 31, 2020

January 31, 2025

0.41%

700,000

January 31, 2020

January 31, 2027

0.53%

1,500,000

January 31, 2020

January 31, 2029

0.68%

1,500,000

March 12, 2020

February 28, 2026

0.36%

1,800,000

March 31, 2020

March 31, 2028

0.64%

1,000,000

July 25, 2014

July 25, 2024

1.18%

April 28, 2016

April 28, 2028

0.90%

1,000,000

July 19, 2017

July 19, 2022

0.26%

1,000,000

Subtotal
Investment corporation bonds

150,250,000¥

30

2,000,000

July 19, 2017

July 16, 2027

0.64%

2,000,000

February 15, 2019

February 15, 2024

0.39%

2,000,000

January 30, 2020

January 30, 2025

0.25%

2,000,000

Subtotal
Total

1,000,000

December 7, 2017

10,000,000¥

192,050,000

The following summarizes short-term loans payable, long-term loans payable and investment corporation bonds outstanding as of October 31, 2019:
Classification
Short-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)¥

November 30, 2018

November 30, 2019

0.37%

November 30, 2018

November 30, 2019

0.32%

200,000

January 31, 2019

January 31, 2020

0.32%

500,000

January 31, 2019

January 31, 2020

0.32%

500,000

November 12, 2018

November 30, 2019

0.32%

January 31, 2014

January 31, 2020

0.93%

3,700,000

March 12, 2014

March 12, 2020

0.92%

1,800,000

March 20, 2014

March 12, 2020

0.91%

3,000,000

March 29, 2019

March 31, 2020

0.37%

1,000,000

March 29, 2019

March 31, 2020

0.32%

500,000

July 31, 2014

July 31, 2020

0.74%

2,700,000

August 30, 2013

August 31, 2020

1.42%

1,500,000

Subtotal
Current portion of long-term loans payable

2,200,000¥

500,000

August 30, 2019

August 31, 2020

0.27%

1,000,000

September 22, 2014

September 30, 2020

0.80%

2,700,000

April 22, 2014

October 31, 2020

0.95%

2,900,000

July 31, 2014

October 31, 2020

0.76%

300,000

SubtotalLong-term loans payable

1,000,000

21,600,000¥

November 12, 2013

November 12, 2020

1.07%

November 12, 2013

November 12, 2020

1.07%

500,000

November 29, 2013

November 30, 2020

1.12%

1,000,000

November 29, 2013

November 30, 2020

1.12%

900,000

January 10, 2014

January 31, 2021

1.21%

1,300,000

January 31, 2014

January 31, 2021

1.13%

2,300,000

March 12, 2014

March 12, 2023

1.36%

1,800,000

March 20, 2014

September 20, 2021

1.01%

4,000,000

March 20, 2014

March 20, 2022

1.20%

3,000,000

March 20, 2014

March 12, 2023

1.35%

2,000,000

July 10, 2014

July 10, 2021

0.90%

2,000,000

July 10, 2014

July 10, 2021

0.90%

500,000

July 31, 2014

July 31, 2022

1.01%

2,200,000

2,000,000

September 1, 2014

August 31, 2021

0.89%

800,000

September 1, 2014

August 31, 2021

0.89%

500,000

September 3, 2014

August 31, 2022

0.98%

1,000,000

September 3, 2014

August 31, 2022

0.98%

950,000

September 30, 2014

September 30, 2021

0.89%

1,000,000

October 31, 2014

October 31, 2021

0.80%

3,000,000

October 31, 2014

October 31, 2023

1.07%

2,000,000

October 31, 2014

October 31, 2023

1.13%

1,500,000

October 31, 2014

October 31, 2023

1.07%

1,000,000

October 31, 2014

October 31, 2024

1.26%

2,000,000

October 31, 2014

October 31, 2024

1.26%

1,000,000

January 30, 2015

January 31, 2021

0.71%

1,500,000

January 30, 2015

January 31, 2025

1.16%

1,500,000

February 18, 2015

February 28, 2022

0.91%

1,250,000

February 18, 2015

February 28, 2022

0.91%

350,000

February 18, 2015

February 29, 2024

1.16%

1,700,000

February 18, 2015

February 28, 2025

1.31%

1,250,000

February 27, 2015

February 28, 2025

1.15%

2,100,000

March 12, 2015

February 28, 2025

1.22%

1,000,000

March 31, 2015

March 31, 2025

1.27%

2,500,000

Kenedix Office Investment Corporation

KENEDIX Office Investment Corporation

31

Classification
Long-term loans payable

32

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)¥

2,300,000

April 30, 2015

April 30, 2022

0.83%

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

August 31, 2015

August 31, 2022

0.87%

500,000

September 30, 2015

September 30, 2024

1.07%

2,000,000

October 30, 2015

October 31, 2024

0.99%

1,000,000

October 30, 2015

October 30, 2025

1.11%

1,500,000

October 30, 2015

October 30, 2025

1.11%

2,000,000

October 30, 2015

October 30, 2025

1.11%

2,500,000

October 30, 2015

October 30, 2025

1.12%

2,500,000

November 12, 2015

November 30, 2025

1.17%

1,000,000

January 29, 2016

January 31, 2022

0.59%

2,500,000

January 29, 2016

January 31, 2022

0.64%

500,000

January 29, 2016

January 29, 2026

1.07%

2,000,000

January 29, 2016

January 29, 2026

1.02%

1,800,000

February 18, 2016

February 18, 2026

1.00%

1,000,000

February 18, 2016

February 18, 2026

1.00%

500,000

March 31, 2016

March 31, 2026

0.90%

1,000,000

April 28, 2016

April 30, 2024

0.65%

2,000,000

April 28, 2016

April 30, 2026

0.84%

2,000,000

April 28, 2016

April 30, 2026

0.87%

1,000,000

July 29, 2016

July 31, 2026

0.61%

1,500,000

August 2, 2016

July 31, 2026

0.54%

1,000,000

October 31, 2016

October 31, 2024

0.67%

1,000,000

October 31, 2016

October 31, 2026

0.88%

2,500,000

October 31, 2016

October 31, 2026

0.76%

1,000,000

October 31, 2016

October 31, 2026

0.73%

4,000,000
1,500,000

October 31, 2016

October 31, 2026

0.83%

December 12, 2016

November 30, 2026

0.98%

500,000

December 28, 2016

December 28, 2026

0.95%

1,500,000

January 16, 2017

January 31, 2027

0.86%

500,000

January 31, 2017

January 31, 2027

0.85%

700,000

March 28, 2017

March 31, 2027

0.85%

500,000

June 30, 2017

June 30, 2027

0.85%

1,500,000

August 10, 2017

July 28, 2027

0.80%

3,500,000

August 31, 2017

August 31, 2023

0.54%

1,000,000

September 21, 2017

March 31, 2024

0.56%

1,000,000

September 21, 2017

September 30, 2025

0.68%

1,500,000

September 21, 2017

March 31, 2027

0.73%

1,000,000

September 21, 2017

September 21, 2027

0.87%

1,000,000

September 21, 2017

September 30, 2027

0.85%

2,500,000

October 31, 2017

October 31, 2027

0.81%

2,500,000

November 13, 2017

November 13, 2027

0.93%

3,000,000

December 7, 2017

November 30, 2027

0.90%

1,400,000

December 7, 2017

November 30, 2027

0.82%

1,200,000

December 7, 2017

November 30, 2027

0.97%

1,000,000

December 7, 2017

November 30, 2027

0.94%

1,000,000

December 7, 2017

November 30, 2027

0.87%

1,000,000

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

December 7, 2017

November 30, 2027

0.90%

¥

December 7, 2017

November 30, 2027

0.87%

600,000

December 28, 2017

December 28, 2025

0.74%

500,000

December 28, 2017

December 28, 2026

0.88%

500,000

December 28, 2017

December 28, 2027

0.86%

500,000

March 12, 2018

March 31, 2028

0.91%

1,500,000

March 26, 2018

March 31, 2027

0.81%

1,000,000

March 26, 2018

March 31, 2028

0.90%

1,000,000

July 31, 2018

July 31, 2028

0.99%

500,000

August 20, 2018

August 31, 2025

0.70%

500,000

August 20, 2018

August 31, 2028

1.00%

1,000,000

August 20, 2018

August 31, 2028

1.00%

1,000,000

August 20, 2018

August 31, 2028

1.00%

500,000

August 20, 2018

August 31, 2028

0.97%

500,000

August 31, 2018

August 31, 2025

0.70%

500,000

August 31, 2018

August 31, 2025

0.72%

300,000

August 31, 2018

August 31, 2028

1.01%

700,000

October 31, 2018

October 31, 2028

1.01%

1,500,000

October 31, 2018

October 31, 2028

0.91%

1,000,000

October 31, 2018

October 31, 2028

1.01%

500,000

March 28, 2019

March 31, 2029

0.84%

1,400,000

March 29, 2019

March 31, 2029

0.84%

2,950,000

June 14, 2019

June 30, 2023

0.25%

500,000

June 14, 2019

December 28, 2026

0.52%

500,000

June 14, 2019

April 30, 2027

0.61%

1,000,000

June 14, 2019

March 31, 2029

0.72%

1,000,000

July 10, 2019

July 31, 2023

0.23%

500,000

July 31, 2019

July 31, 2022

0.29%

1,000,000

July 31, 2019

July 31, 2023

0.29%

1,000,000

July 31, 2019

April 30, 2027

0.55%

1,000,000

July 31, 2019

April 30, 2027

0.55%

1,000,000

September 30, 2019

September 30, 2026

0.49%

1,000,000

September 30, 2019

March 31, 2027

0.53%

900,000

September 30, 2019

March 31, 2027

0.43%

800,000

July 25, 2014

July 25, 2024

1.18%

April 28, 2016

April 28, 2028

0.90%

1,000,000

July 19, 2017

July 19, 2022

0.26%

1,000,000

July 19, 2017

July 16, 2027

0.64%

2,000,000

February 15, 2019

February 15, 2024

0.39%

2,000,000

Subtotal
Investment corporation bonds

153,250,000¥

Subtotal
Total

800,000

2,000,000

8,000,000¥

185,050,000

Kenedix Office Investment Corporation

KENEDIX Office Investment Corporation

33

8．
．REDUCTION ENTRY
The amount of reduction entry of property, plant and equipment acquired by government subsidy is as follows:
As of April 30, 2020

As of October 31, 2019

In thousands of yen
Buildings in trust¥ 26,230¥ 26,230

9. COMMITMENT LINE AGREEMENTThe Investment Corporation has concluded a commitment line agreement with bank of account, etc.
As of April 30, 2020

As of October 31, 2019

In thousands of yen
Maximum amount¥ 6,000,000––¥ 6,000,000¥ 6,000,000

Drawn credit facility
Balance¥ 6,000,000

10. PER UNIT INFORMATION
From November 1, 2019
to April 30, 2020

From May 1, 2019
to October 31, 2019
Yen

Net asset value per unit¥

535,786¥

535,054

Net income per unit¥

14,412¥

13,639Weighted-average number of units (units)

428,510428,510

The weighted-average number of units outstanding of 428,510 as of April 30, 2020 and October 31, 2019, respectively, was used for the computationof the amount of net income per unit. Net income per unit after adjusting for residual units is not included because there were no residual investment
units.

34

11. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 32%. However, the Investment
Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements are met under the Special
Taxation Measures Law of Japan. Under this law, the Investment Corporation must meet a number of tax requirements, including a requirementthat it currently distribute in excess of 90% of its net income for the fiscal period in order to be able to deduct such amounts. If the Investment
Corporation does not satisfy all of the requirements, the entire taxable income of the Investment Corporation will be subject to regular corporate
income taxes. The Investment Corporation distributed in excess of 90% of its distributable income in the form of cash distributions totaling ¥6,175
million and ¥5,844 million for the fiscal periods ended April 30, 2020 and October 31, 2019, respectively. Therefore, such distributions were treatedas deductible distributions for purposes of corporate income taxes. The effective tax rate on the Investment Corporation’s income was 0.02% for
the fiscal periods ended April 30, 2020 and October 31, 2019, respectively. The following table summarizes the significant differences between thestatutory tax rate and the effective tax rate.
From November 1, 2019
to April 30, 2020

From May 1, 2019
to October 31, 2019

Statutory tax rate

31.46%

31.51%

Deductible cash distributions(31.45)(31.50)

Others 0.01

 0.01

Effective tax rate

0.02%

0.02%

The significant components of deferred tax assets and liabilities as of April 30, 2020 and October 31, 2019 are as follows:
As of April 30, 2020

As of October 31, 2019

In thousands of yen
Deferred tax assets
Enterprise tax payable

¥ 36

¥ 32

Amortization of leasehold right

4,587

4,344

Deferred gains or losses on hedges

110,974

101,608

115,598

105,985

Valuation allowance(115,562)(105,952)

Total deferred tax assets

¥ 36

¥ 32

Subtotal

12. NET ASSETSThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Act. The entire amount of the issue price of
new units is designated as stated capital. The Investment Corporation is required to maintain net assets of at least ¥50 million as required by theInvestment Trust Act.

13. RELATED-PARTY TRANSACTIONS(1) Parent Company, Major Corporate Unitholders and Other
Thirtieth fiscal period (From November 1, 2019 to April 30, 2020) and Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019): Not applicable(2) Affiliated Companies and Other
Thirtieth fiscal period (From November 1, 2019 to April 30, 2020) and Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019): Not applicable(3) Fellow Subsidiary Companies and Other
Thirtieth fiscal period (From November 1, 2019 to April 30, 2020) and Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019): Not applicable(4) Directors, Major Individual Unitholders and Other
Thirtieth fiscal period (From November 1, 2019 to April 30, 2020) and Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019): Not applicable

Kenedix Office Investment Corporation

KENEDIX Office Investment Corporation

35

14. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES, AND GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY
Rent revenue – real estate, expenses related to rent business, and gain and loss on sale of real estate property for the fiscal periods from
November 1, 2019 to April 30, 2020 and from May 1, 2019 to October 31, 2019 consist of the following:
From November 1, 2019

From May 1, 2019

to April 30, 2020

to October 31, 2019

In thousands of yen
Rental and other operating revenues
Rent revenue – real estate
Rental revenues
Common area charges
Subtotal¥11,698,824¥11,216,006

1,730,295

1,760,026

13,429,120

12,976,033

Others:Parking space rental revenues

510,017523,855

Utility charge reimbursement

981,703

1,190,161

Miscellaneous

294,258

269,454

1,785,979

1,983,471¥15,215,099¥14,959,504

Property management fees and facility management fees

¥1,440,554¥1,392,326

Utilities

1,020,457

1,203,041

Taxes

1,283,557

1,280,309

Repairs and maintenance474,879

409,464

Insurance

18,656

19,469Subtotal
Total rent revenue – real estate
Property-related expenses
Expenses related to rent business

Trust fees

33,41632,946

Others267,111334,688

Depreciation
Total expenses related to rent business

36

2,470,270

2,419,923¥7,008,903¥7,092,170

15. LEASESThe Investment Corporation, as lessor, has entered into leases whose fixed monthly rents are due in advance with lease terms of generally two
years for office buildings. The future minimum rental revenues under existing non-cancelable operating leases as of April 30, 2020 and October 31,
2019 are as follows:
As of April 30, 2020

As of October 31, 2019
In thousands of yen

Due within one year¥

Due after one year
Total

2,673,596¥

2,797,748

8,393,119

9,191,310¥ 11,066,716¥ 11,989,058

16. FINANCIAL INSTRUMENTS
Thirtieth fiscal period (From November 1, 2019 to April 30, 2020)(A) Overview(1) Policy for financial instruments
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily through bank loans
and the issuance of investment corporation bonds and new investment units. The Investment Corporation uses derivatives for the purpose ofhedging its exposure to changes in interest rates and does not enter into derivatives for speculative or trading purposes. Management of surplus
funds is undertaken in a prudent manner that considers fully such factors as safety, liquidity, interest-rate conditions and cash flows.
(2) Types of financial instruments and related risk
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer and risk offluctuation of value of its property.
Loans payable and investment corporation bonds are used primarily for procuring funds necessary for the acquisition of properties and have aredemption date of a maximum of approximately 9 years following the accounting date. Although a certain portion of said liabilities are subject tointerest-rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate swap transactions) in order to reduce such risk.
Interest-rate swap transactions are used as derivative financial instruments. Utilizing interest-rate swap transactions, the Investment Corporation
fixes its interest expense for long-term loans payable bearing interest at a variable rate. With regard to hedge accounting methods, hedging
instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please see Note 2(L) “Derivative
Financial Instruments.”(3) Risk management for financial instruments(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap transactions in order to minimize risk arising from fluctuations in interest rates on funds
procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer with regard to investment
securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled due dates)
associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates
and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly checking the balance of cash
reserves.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value
is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could
result in a different fair value. Moreover, the contract amounts, etc. of derivative transactions in “(B) Estimated Fair Value of Financial Instruments”
do not indicate the market risk of derivative transactions.

Kenedix Office Investment Corporation

KENEDIX Office Investment Corporation

37

(B) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of April 30, 2020 and estimated fair value are shown in the following table.The
following table does not include financial instruments for which it is extremely difficult to determine the fair value (Refer to *2 below).
Carrying value
Estimated fair value
Difference
In thousands of yen(1) Cash and deposits(2) Cash and deposits in trust
Subtotal(1) Short-term loans payable¥ 14,699,777¥ 14,699,777

11,470,987

11,470,987

26,170,764

26,170,764–

9,500,000

9,500,000–(2) Current portion of investment corporation bonds(3) Current portion of long-term loans payable

¥

–
–

–

–

–

22,300,000

22,345,163

45,163(4) Investment corporation bonds

10,000,000

10,033,200

33,200(5) Long-term loans payable

150,250,000

152,628,904

2,378,904¥ 192,050,000¥ 194,507,267¥ 2,457,267(332,017)(332,017)–

Subtotal
Derivative transactions(*)(*)The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing the net liability
position.
*1 Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying value approximates fair value.
Liabilities(1) Short-term loans payable
Since these items are settled in a short period of time, their carrying value approximates fair value.
(2) Current portion of investment corporation bonds and (4) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices. The fair value of those for which no market price is available isbased on the quoted price obtained from counterparty financial institutions, etc.
(3) Current portion of long-term loans payable and (5) Long-term loans payable
The fair value of long-term loans payable is based on the present value of the total of principal and interest discounted by the interest rate to be
applied if similar new loans were entered into. The fair value of long-term loans payable bearing interest at a variable rate, which is subject to fixedinterest rates resulting from interest-rate swaps and special treatment applied to said swaps, is based on the present value of the total of principal
and interest, which is handled together with the applicable interest-rate swaps, discounted by the interest rate to be applied if similar loans wereentered into.
Derivative Transactions
Please refer to Note 17 “DERIVATIVE TRANSACTIONS.”*2 Financial instruments for which it is extremely difficult to determine the fair value
Classification
Investment securities

Carrying value (In thousands of yen)
¥ 1,127,724

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are not included in thepreceding table.
*3 Redemption schedule for receivables
Due within 1 year or less
(In thousands of yen)
Cash and deposits
Cash and deposits in trust
Total

38

¥ 14,699,777
11,470,987¥ 26,170,764

*4 Redemption schedule for loans payable and investment corporation bonds
Due within 1

Due after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

Due after 5

year or lessthrough 2 years

through 3 years

through 4 years

through 5 years

years

In thousands of yen
Short-term loans payable¥

9,500,000

Investment corporation bonds
Long-term loans payable
Total

¥

–

–

–

¥

–

¥

1,000,000–
2,000,000

¥

–

¥

–

4,000,000

3,000,000

22,300,000

21,700,000

11,950,000

12,200,000

16,050,000

88,350,000¥ 31,800,000¥ 21,700,000¥ 12,950,000¥ 14,200,000¥ 20,050,000¥ 91,350,000

Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019)(A) Overview(1) Policy for financial instruments
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily through bank loans
and the issuance of investment corporation bonds and new investment units. The Investment Corporation uses derivatives for the purpose ofhedging its exposure to changes in interest rates and does not enter into derivatives for speculative or trading purposes. Management of surplus
funds is undertaken in a prudent manner that considers fully such factors as safety, liquidity, interest rate conditions and cash flows.
(2) Types of financial instruments and related risk
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer and risk offluctuation of value of its property.
Loans payable and investment corporation bonds are used primarily for procuring funds necessary for the acquisition of properties and have aredemption date of a maximum of approximately 9 years and 5 months following the accounting date. Although a certain portion of said liabilities
are subject to interest-rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate swap transactions) in order to reduce such
risk.
Interest-rate swap transactions are used as derivative financial instruments. Utilizing interest-rate swap transactions, the Investment Corporation
fixes its interest expense for long-term loans payable bearing interest at a variable rate. With regard to hedge accounting methods, hedging
instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please see Note 2(L) “Derivative
Financial Instruments.”(3) Risk management for financial instruments(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap transactions in order to minimize risk arising from fluctuations in interest rates on funds
procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer with regard to investment
securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled due dates)
associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates
and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly checking the balance of cash
reserves.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value
is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could
result in a different fair value. Moreover, the contract amounts, etc. of derivative transactions in “(B) Estimated Fair Value of Financial Instruments”
do not indicate the market risk of derivative transactions.

KENEDIX Office Investment Corporation

Kenedix Office Investment Corporation

39

(B) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of October 31, 2019 and estimated fair value are shown in the following table. 
The following table does not include financial instruments for which it is extremely difficult to determine the fair value (Refer to *2 below).
Carrying value
Estimated fair value
Difference
In thousands of yen(1) Cash and deposits¥ 14,019,313¥ 14,019,313

11,366,312

11,366,312–

25,385,625

25,385,625–

2,200,000

2,200,000

–

–

–

–

(3) Current portion of long-term loans payable

21,600,000

21,661,969

61,969(4) Investment corporation bonds

8,000,000

8,099,900

99,900(2) Cash and deposits in trust
Subtotal(1) Short-term loans payable(2) Current portion of investment corporation bonds(5) Long-term loans payable
Subtotal
Derivative transactions(*)¥–

153,250,000

156,160,213

2,910,213¥ 185,050,000¥ 188,122,082¥ 3,072,082(314,241)(314,241)–(*)The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing the net liability
position.
*1 Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying value approximates fair value.
Liabilities(1) Short-term loans payable
Since these items are settled in a short period of time, their carrying value approximates fair value.
(2) Current portion of investment corporation bonds and (4) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices.
(3) Current portion of long-term loans payable and (5) Long-term loans payable
The fair value of long-term loans payable is based on the present value of the total of principal and interest discounted by the interest rate to be
applied if similar new loans were entered into. The fair value of long-term loans payable bearing interest at a variable rate, which is subject to fixedinterest rates resulting from interest-rate swaps and special treatment applied to said swaps, is based on the present value of the total of principal
and interest, which is handled together with the applicable interest-rate swaps, discounted by the interest rate to be applied if similar loans wereentered into.
Derivative Transactions
Please refer to Note 17 “DERIVATIVE TRANSACTIONS.”*2 Financial instruments for which it is extremely difficult to determine the fair value
Classification
Investment securities

Carrying value (In thousands of yen)
¥ 1,131,953

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are not included in thepreceding table.
*3 Redemption schedule for receivables
Due within 1 year or less
(In thousands of yen)
Cash and deposits
Cash and deposits in trust
Total

40

¥ 14,019,313
11,366,312¥ 25,385,625

*4 Redemption schedule for loans payable and investment corporation bonds
Due within 1

Due after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

Due after 5

year or lessthrough 2 years

through 3 years

through 4 years

through 5 years

years

In thousands of yen
Short-term loans payable¥ 2,200,000

Investment corporation bonds

–

¥

–

¥

–

¥

–

¥

–

–

–

1,000,000–

4,000,000

3,000,000

21,600,000

21,300,000

18,050,000

11,300,000

11,700,000

90,900,000¥ 23,800,000¥ 21,300,000

11,300,000¥ 15,700,000¥ 93,900,000

Long-term loans payable
Total

¥

¥

19,050,000¥

17. DERIVATIVE TRANSACTIONS
The following summarizes the contracted amount and the fair value of interest-rate swap contracts as of April 30, 2020:(1) Hedge accounting not applied
Not applicable(2) Hedge accounting applied
Hedge
accounting
methodPrinciple method

Type of derivativetransactions

Hedgeditems

Interest-rate swaps:

Long-term

Receive/floatingloans

and pay/fixedpayableSpecial treatment

Interest-rate swaps:

Long-termof interest-rate

Receive/floating

loans

swaps

and pay/fixedpayableTotal

Contracted amount(In thousands of yen)
Maturing
after 1 year

Fair value(In thousandsof yen)Calculation method for
applicable fair value
Based on the amount¥ 43,650,000¥ 42,650,000¥ (332,017)

provided by counterparty
financial institutions

74,050,000

55,950,000*¥ 117,700,000¥ 98,600,000¥ (332,017)(*)Interest-rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fairvalue is included in the fair value of the hedged long-term loans payable.

The following summarizes the contracted amount and the fair value of interest-rate swap contracts as of October 31, 2019:(1) Hedge accounting not applied
Not applicable(2) Hedge accounting applied
Hedge
accounting
methodPrinciple method

Type of derivativetransactions

Hedgeditems

Interest-rate swaps:

Long-term

Receive/floatingloans

and pay/fixedpayableSpecial treatment

Interest-rate swaps:

Long-termof interest-rate

Receive/floating

loans

swaps

and pay/fixedpayableTotal

Contracted amount(In thousands of yen)
Maturing
after 1 year

Fair value(In thousandsof yen)Calculation method for
applicable fair value
Based on the amount¥ 37,150,000¥ 36,150,000¥ (314,241)

provided by counterparty
financial institutions

82,550,000

65,450,000¥ 119,700,000¥ 101,600,000*¥ (314,241)(*)Interest-rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fairvalue is included in the fair value of the hedged long-term loans payable.

KENEDIX Office Investment Corporation

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18. INVESTMENT AND RENTAL PROPERTIES
Thirtieth fiscal period (From November 1, 2019 to April 30, 2020)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo metropolitan area for the purpose of generating rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value In thousands of yen 
As of October 31, 2019

Net change

As of April 30, 2020

Fair value
As of April 30, 2020
In thousands of yen ¥ 506,912,000¥ 411,259,731¥ 7,409,572¥ 418,669,303*1: The carrying value represents the acquisition cost less accumulated depreciation.
*2: Fair value at the end of the fiscal period is the appraisal value determined by outside appraisers.
*3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal increase/decrease
factors were the acquisition of two properties totaling ¥8,394,455 thousand and depreciation amounting to ¥2,470,270 thousand.
Income and loss in the fiscal period ended April 30, 2020 for real estate for rental purposes is listed in Note 14 “BREAKDOWN OF RENTAL AND
OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY.”

Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo metropolitan area for the purpose of generating rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value In thousands of yen 
As of April 30, 2019

Net change

As of October 31, 2019

Fair value
As of October 31, 2019
In thousands of yen ¥ 496,331,000¥ 403,212,700¥ 8,047,031¥ 411,259,731*1: The carrying value represents the acquisition cost less accumulated depreciation.
*2: Fair value at the end of the fiscal period is the appraisal value determined by outside appraisers.
*3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal increase/decrease
factors were the acquisition of one property totaling ¥9,042,398 thousand and depreciation amounting to ¥2,419,923 thousand.
Income and loss in the fiscal period ended October 31, 2019 for real estate for rental purposes is listed in Note 14 “BREAKDOWN OF RENTAL AND
OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY.”42

19. SEGMENT AND RELATED INFORMATION
Thirtieth fiscal period (From November 1, 2019 to April 30, 2020)(A) Segment Information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment
subject to disclosure.
(B) Related Information(1)

Information about each product and service

Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenues
on the statement of income and retained earnings.
(2)

Information about each geographic area(a)

Net sales

Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenues on the statement of income
and retained earnings.
(b)

Property, plant and equipment

Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plantand equipment on the balance sheet.
(3)

Information about each major customer

Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenues on the statement ofincome and retained earnings.
Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019)(A) Segment Information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment
subject to disclosure.
(B) Related Information(1)

Information about each product and service

Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenues
on the statement of income and retained earnings.
(2)

Information about each geographic area(a)

Net sales

Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenues on the statement of income
and retained earnings.
(b)

Property, plant and equipment

Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plantand equipment on the balance sheet.
(3)

Information about each major customer

Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenues on the statement ofincome and retained earnings.

20. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable

KENEDIX Office Investment Corporation

Kenedix Office Investment Corporation

43

21. DISTRIBUTIONS

44

Thirtieth fiscal period(From November 1, 2019 to April 30, 2020)

Twenty-ninth fiscal period(From May 1, 2019 to October 31, 2019)
(Yen)

(Yen)

I. Retained earnings at the end of period¥6,175,926,413¥5,844,500,609

II. Total distributions¥6,175,686,120¥5,844,447,890

Distributions per unit

¥14,412¥13,639

III . Retained earnings brought forward to
the next period¥240,293¥52,719

Method of calculating distribution amountIn accordance with the policy stipulated in Article 35 (1)of its Articles of Incorporation, the Investment
Corporation determines that the amount of distribution
shall exceed the amount equivalent to 90% of its
distributable profit as stipulated in Article 67-15 of the Act
on Special Measures Concerning Taxation, and shall be
up to the amount of its profits as the ceiling. Following
this policy, the Investment Corporation has decided to
distribute ¥6,175,686,120, the maximum integral
multiple amount of investment units issued andoutstanding of 428,510 units, up to the amount of
unappropriated retained earnings for the fiscal period
under review.
In addition, the Investment Corporation decided not to
distribute cash in excess of distributable profit, stipulated
in Article 35 (2) of its Articles of Incorporation.

In accordance with the policy stipulated in Article 35 (1)of its Articles of Incorporation, the Investment
Corporation determines that the amount of distribution
shall exceed the amount equivalent to 90% of its
distributable profit as stipulated in Article 67-15 of the Act
on Special Measures Concerning Taxation, and shall be
up to the amount of its profits as the ceiling. Following
this policy, the Investment Corporation has decided to
distribute ¥5,844,447,890, the maximum integral
multiple amount of investment units issued andoutstanding of 428,510 units, up to the amount of
unappropriated retained earnings for the fiscal period
under review.
In addition, the Investment Corporation decided not to
distribute cash in excess of distributable profit, stipulated
in Article 35 (2) of its Articles of Incorporation.

Kenedix Office Investment Corporation45

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