Financial Summary (Unaudited)
Historical Operating Trends
For the 25th–29th Fiscal Periods

29th Period
28th Period
27th Period
26th Period
25th Period(as of(as of(as of(as of(as ofOct. 31, 2017) Apr. 30, 2018) Oct. 31, 2018) Apr. 30, 2019) Oct. 31, 2019)

PeriodUnit

Operating revenues

millions of yen

13,901

14,823

15,42015,212

15,027(Rental revenues)

millions of yen

13,84014,22214,802

14,595

14,959Operating expenses

millions of yen

8,244

7,974

8,271

8,039

8,199

(Property-related expenses)

millions of yen

6,720

6,977

7,105

6,880

7,092

Operating income

millions of yen

5,657

6,848

7,148

7,172

6,828

Ordinary income

millions of yen

4,590

5,829

6,109

6,179

5,845

Net income (a)millions of yen

4,588

5,828

6,107

6,178

5,844

Total assets (b)millions of yen

414,933

422,993437,221436,753439,773(Period-on-period change)%(+1.2)(+1.9)(+3.4)(–0.1)(+0.7)

Interest-bearing debt (c)millions of yen

179,600

185,850

183,050

182,050

185,050(Period-on-period change)%

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

Unitholders’ capitalmillions of yen(Period-on-period change)(+2.9)(+3.5)(–1.5)(–0.5)(+1.6)

212,851

213,642229,313229,440

229,276(–0.1)(+0.4)(+7.3)(+0.1)(–0.1)

206,199

206,199

220,970

220,970

220,970

%

(0.0)

(0.0)

(+7.2)

(0.0)

(0.0)

Number of investment units issued and outstanding (e)unit

404,885

404,885

428,510428,510428,510Unitholders’ equity per unit (d)/(e)yen525,708

527,661

535,141

535,437

535,054

Total distribution (f)millions of yen

5,061

5,247

5,766

5,878

5,844

Distribution per unit (f)/(e)yen

12,50012,96013,45813,71913,639(Earnings distributed per unit)

yen

12,50012,96013,45813,71913,639(Distribution in excess of earnings per unit)

yen

—

—

—

—

—

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

1.1 (2.2)

1.4 (2.8)

1.4 (2.8)

1.4 (2.9)

1.3 (2.6)

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

2.2 (4.3)

2.7 (5.5)

2.8 (5.5)

2.7 (5.4)

2.5 (5.1)

51.3

50.5

52.4

52.5

52.1

(–0.6)(–0.8)(+1.9)(+0.1)(–0.4)

43.3

43.9

41.9

41.7

(42.1)(+0.7)(+0.7)(–2.1)(–0.2)(+0.4)

110.2

90.0

94.4

95.1

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

98

97

97

96

97

Total leasable floor area2m

456,932.16

466,031.33

471,041.45

468,528.20

480,328.18

Occupancy rate at end of period

%

99.1

99.0

99.1

99.2

99.5

Depreciation expenses for the period

millions of yen

2,293

2,295

2,358

2,369

2,419

Capital expenditures for the period

millions of yen

953

886

925

1,231

1,426

Leasing NOI (Net Operating Income) (Note 5)

millions of yen

9,413

9,539

10,055

10,084

10,287

FFO (Funds From Operation) (Note 6)

millions of yen

7,451

7,574

7,934

7,983

8,265

FFO per unit (Note 7)

yen

18,40418,70818,516

18,63019,287

Notes: 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 25th Fiscal Period are calculated based on a period of 184 days, 181 days for the 26th Fiscal Period, 184 days for the 27th Fiscal
Period, 181 days for the 28th Fiscal Period, and 184 days for the 29th 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)
Kenedix Office Investment Corporation17

Kenedix Office Investment Corporation

Balance Sheet
As of October 31, 2019
As of October 31, 2019
AssetsCurrent assets
Cash and deposits (Notes 3 and 15)
Cash and deposits in trust (Notes 3 and 15)
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment (Notes 4 and 17)
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 7)
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
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets (Note 4)
Leasehold right (Note 17)
Leasehold right in trust (Note 17)
Other
Total intangible assets
Investments and other assets
Investment securities (Note 15)
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Other (Notes 10,15 and 16)
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

18

As of April 30, 2019

In thousands of yen¥

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

¥

-

6,788
30,989,522

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

17,776,419(5,616,212)
12,160,207
32,618(14,691)
17,927424,662(247,818)
176,843
93,446(57,649)
35,79627,520,902
121,511,168(29,185,084)
92,326,083
343,278(157,234)
186,043
1,604,492(691,969)
912,523
487,000(308,088)
178,912
269,059,794
1,511
402,576,545

285,257
349,975
1,796
637,029285,257
350,749
2,424
638,431

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

1,130,524
10,000122,889
1,178,564
19,4872,461,465
405,676,443

46,83527,51374,348439,773,203

51,346
36,68488,031
436,753,997-¥

19,675,112
10,959,133
298,778
49,708¥

As of October 31, 2019
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Notes 6 and 15)
Current portion of long-term loans payable (Notes 6,15 and 16)
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Other (Notes 15 and 16)
Total current liabilities
Non-current liabilities
Investment corporation bonds (Notes 6 and 15)
Long-term loans payable (Notes 6, 15 and 16)
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Other (Notes 15 and 16)
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 15 and 16)
Total valuation and translation adjustments
Total net assets (Note 11)
Total liabilities and net assets
See accompanying notes to the financial statements.

As of April 30, 2019

In thousands of yen¥¥

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

1,575,141
4,200,000
16,700,000
529,777
78,660794
475,104
2,368,366
3,477
25,931,323

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

8,000,000
153,150,000
1,993,121
18,035,523
203,786
181,382,431
207,313,754

220,970,508

220,970,508

2,775,335
2,775,335
5,844,500
8,619,835
229,590,343

2,475,385
2,475,385
6,178,677
8,654,063
229,624,572(314,241)(314,241)
229,276,102
439,773,203(184,329)(184,329)
229,440,242
436,753,997¥

Kenedix Office Investment Corporation

19

Kenedix Office Investment Corporation

Statement of Income and Retained Earnings
For the period from May 1, 2019 to October 31, 2019
From May 1, 2019

From November 1, 2018

to October 31, 2019

to April 30, 2019

In thousands of yen
Operating revenues
Rent revenue - real estate (Note 13)¥

Other lease business revenue (Note 13)

12,976,033¥

12,794,187

1,983,471

1,801,706-

565,286

68,38951,08815,027,894

15,212,268

Expenses related to rent business (Note 13)

7,092,170

6,880,478

Asset management fees

899,348

967,813

Directors' compensation

8,400

8,400

Asset custody fees

23,102

23,116

Administrative service fees

57,26457,508

Audit fees

12,80011,800Gain on sale of real estate properties (Note 13)
Dividends income
Total operating revenues
Operating expenses

106,412

90,167

Total operating expenses

8,199,497

8,039,284

Operating income

6,828,396

7,172,984

Other operating expenses

Non-operating income
Interest income

68

67

Dividends and redemption-prescription

403

664

2

3

473

736

Interest expenses

810,689

808,013Interest expenses on investment corporation bonds

28,12825,392Financing-related expenses

Interest on refund
Total non-operating income
Non-operating expenses

127,833

124,518

Amortization of investment corporation bond issuance costs

4,511

3,564

Amortization of investment unit issuance costs

9,171

9,171

Other non-operating expenses

2,772

23,143

Total non-operating expenses

983,106

993,803

Ordinary income

5,845,764

6,179,916

Income before income taxes

5,845,764

6,179,916

Current

1,264

1,238

Deferred(1)0

Total income taxes

1,263

1,238

Income taxes (Note 10)

5,844,500

Net income
Unappropriated retained earnings
See accompanying notes to the financial statements.

KENEDIX Office Investment Corporation
20¥

5,844,500

6,178,677¥

6,178,677

Kenedix Office Investment Corporation

Statement of Changes in Net Assets
For the period from May 1, 2019 to October 31, 2019
Valuationandtranslation
adjustments

Unitholders' equity

Surplus
Voluntary
retainedearnings

Deferred
UnappropriatedUnitholders'

Reserve forcapitalreduction entry

gains orretained earnings

Total

Total unitholders'losses on

Total net

(Note 20)

surplusequityhedgesassetsIn thousands of yen
Balance as of
October 31, 2018¥

220,970,508¥

2,134,387¥

6,107,886¥

8,242,273¥

229,212,781¥

100,798¥

229,313,580

Changes during the fiscal period
Provision of reserve for reduction-

340,998（340,998）

-

-

-

-

Dividends of surplus--（5,766,887）（5,766,887）（5,766,887）-（5,766,887）

Net income--

6,178,677

6,178,677

6,178,677-

6,178,677

-

-

-

-

-

(285,128)(285,128)-

340,998

70,791

411,790411,790(285,128)

126,662

entry

Net changes of items other thanunitholders’ equity
Total changes during
the fiscal period
Balance as ofApril 30, 2019 (Note 5)¥

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 5)¥

220,970,508¥

2,775,335¥

5,844,500¥

8,619,835¥

229,590,343¥(314,241)¥

229,276,102

See accompanying notes to the financial statements.

Kenedix Office Investment Corporation21

Kenedix Office Investment Corporation
Statement of Cash Flows
For the period from May 1, 2019 to October 31, 2019

From May 1, 2019
to October 31, 2019

From November 1, 2018
to April 30, 2019

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

5,845,764¥

6,179,916

Depreciation

2,420,535

2,370,002

Amortization of long-term prepaid expenses

120,778

124,268

Interest income

(68)

(67)

838,818

833,406

Amortization of investment unit issuance costs

9,171

9,171

Amortization of investment corporation bond issuance costs

4,511

3,564

Decrease (increase) in operating accounts receivable(62,429)

61,483

Decrease (increase) in consumption taxes receivable(61,789)-

Decrease (increase) in prepaid expenses(60,068)

61,827

Increase (decrease) in operating accounts payable

56,398(159,947)

Increase (decrease) in accounts payable-other(53,110)(246,833)

Increase (decrease) in accrued consumption taxes(342,749)

281,328

Increase (decrease) in advances received

196,680

4,255

Increase (decrease) in deposits received

19,583

1,186-

4,652,797

Decrease (increase) in long-term prepaid expenses(174,437)(46,458)

Other, net(12,220)(25,452)

8,745,367

14,104,448

Interest expenses

Decrease in property, plant and equipment in trust due to sale

SubtotalInterest income received

68

67

Interest expenses paid

(847,538)(817,511)

Income taxes paid

(805)

(805)

7,897,092

13,286,198(59,029)(91,813)(10,577,896)(958,884)

-

(155)

Repayments of tenant leasehold and security deposits(20,533)(46,949)

Proceeds from tenant leasehold and security deposits

36,145

86,145

Repayments of tenant leasehold and security deposits in trust(1,122,394)(560,271)

Proceeds from tenant leasehold and security deposits in trust

1,477,344

676,423

Payments of restricted deposits in trust(30,740)(8,705)

Proceeds from restricted deposits in trust

8,362

-

(10,288,741)(904,210)

Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment
Purchases of property, plant and equipment in trust
Purchases of intangible assets

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

3,200,000

Decrease in short-term loans payable(2,000,000)(5,000,000)

Proceeds from long-term loans payable

11,200,000

6,850,000

Repayments of long-term loans payable(6,200,000)(8,050,000)-

1,984,949

Dividends paid

(5,879,350)(5,765,583)

Net cash provided by (used in) financing activities(2,879,350)(6,780,634)

Net increase (decrease) in cash and cash equivalents(5,270,999)

5,601,354

Proceeds from issuance of investment corporation bonds

Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period (Note 3)
See accompanying notes to the financial statements.

22
KENEDIX Office Investment Corporation

28,883,770¥

23,612,771

23,282,416¥

28,883,770

Kenedix Office Investment Corporation

Notes to the Financial Statements
For the period from May 1, 2019 to October 31, 2019

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, theInvestment 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 April 30, 2019, the Investment Corporation sold one central urban retail property (Frame Jinnan-zaka (51.0% of quasi
co-ownership interest): initial acquisition price of ¥5,049 million (*3)) with a disposition price of ¥5,253 million.
During the period ended October 31, 2019, the Investment Corporation acquired one office building (Chofu Center Building: acquisition price of¥8,700 million).
At the end of the twenty-eighth and twenty-ninth fiscal periods (fiscal periods ended April 30, 2019 and October 31, 2019), the Investment
Corporation had total unitholders’ capital of ¥220,970 million with 428,510 investment units outstanding, respectively. The Investment Corporation
owned a portfolio of 96 properties (consisting of 95 office buildings and one other property) and 97 properties (consisting of 96 office buildings andone other property) with total acquisition prices of ¥415,835 million and ¥424,535 million at the end of the twenty-eighth and twenty-ninth fiscal
periods, respectively. The occupancy ratios were approximately 99.2% and 99.5% at the end of the twenty-eighth and twenty-ninth 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.

Kenedix Office Investment Corporation23

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 May 1, 2019
to October 31, 20192-49 years

From November 1, 2018
to April 30, 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.

24

KENEDIX Office Investment Corporation

(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. There were no capitalized property-related taxes as of April
30, 2019. Capitalized property-related taxes amounted to ¥29,256 thousand as of October 31, 2019. In subsequent calendar years, suchproperty-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-swap contracts if they met the criteria for hedging accounting under this treatment. The hedge effectiveness forthe interest-rate swap contract 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.

Kenedix Office Investment Corporation25

3. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of the following as of October 31, 2019 and April 30, 2019.
As of October 31, 2019

As of April 30, 2019

In thousands of yen
Cash and deposits¥ 14,019,313¥ 19,675,112

Cash and deposits in trust

11,366,312

10,959,133

Restricted deposits in trust (Note)(1,772,854)(1,750,475)

Cash and cash equivalents in trust¥ 23,612,771¥ 28,883,770

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

4. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
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

Depreciation

Balance atthe end of
periodDecreaseduring theperiodAccumulated
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 fixtures
Land
Property,plant andequipment-¥ 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

Intangible
assets

Total

-

¥

¥

¥

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

26

KENEDIX Office Investment Corporation

Note

Note

Property, plant and equipment and intangible assets consist of the following as of April 30, 2019.
Type of asset

Balance atthe beginningof period

Increase during
the period

Depreciation

Balance atthe end of
periodDecreaseduring theperiodAccumulated
depreciation

Depreciation
for the periodNetbalance atthe end of
periodRemarks(in thousands of yen)
Buildings
Structures
Machinery andequipment
Tools, furnitureand fixturesLand¥ 17,693,312¥ 83,107¥-

32,618421,857

2,805

86,586

6,860

27,520,902-¥ 17,776,419¥ 5,616,212¥ 299,555¥ 12,160,207-

32,618

14,691

842

17,927424,662

247,818

12,072

176,843

93,446

57,6493,167

35,79627,520,902--

27,520,902--

Subtotal

45,755,276

92,773-45,848,050

5,936,372

315,639

39,911,677

Buildings in trust¥ 122,006,776¥ 1,056,432¥ 1,552,040¥ 121,511,168¥ 29,185,084¥ 1,973,293¥ 92,326,083

Structures in trust

353,520

5,952

16,194343,278

157,234

11,050186,043

Machinery andequipment in trust

1,623,898

60,42579,831

1,604,492

691,969

50,007

912,523

Tools, furnitureand fixtures intrust

476,862

15,8695,731

487,000

308,088

18,617

178,912272,828,051-

3,768,257

269,059,794--

269,059,794

2,933

-

1,421

1,511

-

-

1,511

Subtotal

397,292,042

1,138,680

5,423,478

393,007,244

30,342,376

2,052,968

362,664,867

Total property, plant andequipment

443,047,319

1,231,453

5,423,478

438,855,294

36,278,749

2,368,608

402,576,545

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

Leasehold right in
trust

363,784--

363,784

13,034774

350,749

Other

6,123

155

-

6,278

3,854

620

2,424

Total intangible assets

659,958155-

660,113

21,681

1,394

638,431¥443,707,278¥ 1,231,608¥ 5,423,478¥439,515,408¥36,300,430¥2,370,002¥403,214,977

Property,plant andequipment

Land in trust
Construction inprogress in trust

Intangible
assets

Total

¥

-

¥

¥

Note

Note

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

5. UNITHOLDERS’ EQUITY

Total number of authorized investment units and total number of investment units issued and outstanding are as follows:
From May 1, 2019
to October 31, 2019
Total number of authorized investment units

2,000,000

From November 1, 2018
to April 30, 2019
2,000,000

Total number of investment units issued and outstanding

428,510428,510

Kenedix Office Investment Corporation27

6. 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 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

Subtotal
Current portion of long-term loans payable

2,200,000¥

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

28

KENEDIX Office Investment Corporation

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

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

2,000,000

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
2,000,000

October 31, 2014

October 31, 2023

1.07%

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

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

Kenedix Office Investment Corporation

29

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

December 7, 2017

November 30, 2027

0.82%

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

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

Subtotal
Investment corporation bonds

153,250,000¥

July 25, 2014

July 25, 2024

1.18%

April 28, 2016

April 28, 2028

0.90%

1,000,000

July19, 2017

July 19, 2022

0.26%

1,000,000

July19, 2017

July 16, 2027

0.64%

2,000,000

February 15, 2019

February 15, 2024

0.39%

2,000,000

Subtotal
Total

30

1,200,000

2,000,000

8,000,000¥

185,050,000

The following summarizes short-term loans payable, long-term loans payable and investment corporation bonds outstanding as of April 30, 2019:
Classification
Short-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)¥

July 31, 2018

July 31, 20190.36%

August 31, 2018

August 31, 2019

0.31%

1,000,000

November 30, 2018

November 30, 2019

0.36%

1,000,000

November 30, 2018

November 30, 20190.31%

200,000

January 31, 2019

January 31, 2020

0.31%

500,000

January 31, 2019

January 31, 2020

0.31%

500,000

Subtotal
Current portion of long-term loans payable

4,200,000¥

July 10, 2014

July 10, 2019

0.64%

July 14, 2014

July 31, 2019

0.68%

1,000,000

July 31, 2014

July 31, 2019

0.62%

1,000,000

500,000

August 29, 2014

July 31, 2019

0.65%

1,000,000

September 30, 2013

September 30, 2019

1.06%

1,800,000

September 30, 2013

September 30, 2019

1.06%

900,000

November 12, 2018

November 30, 20190.31%

500,000

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

0.36%

1,000,000

March 29, 2019

March 31, 2020

0.31%

500,000

SubtotalLong-term loans payable

1,000,000

16,700,000¥

August 30, 2013

August 31, 2020

1.42%

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

1,500,000
2,000,000

March 20, 2014

March 20, 2022

1.20%

3,000,000

March 20, 2014

March 12, 2023

1.35%

2,000,000

April 22, 2014

October 31, 2020

0.95%

2,900,000

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, 2020

0.74%

2,700,000

July 31, 2014

October 31, 2020

0.76%

300,000

July 31, 2014

July 31, 2022

1.01%

2,200,000

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 22, 2014

September 30, 2020

0.80%

2,700,000

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

Kenedix Office Investment Corporation

31

Classification
Long-term loans payable

32

KENEDIX Office Investment Corporation

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

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

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

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

September 21, 2017

September 21, 2027

0.87%

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

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

Subtotal
Investment corporation bonds

153,150,000¥

July 25, 2014

July 25, 2024

1.18%

April 28, 2016

April 28, 2028

0.90%

1,000,000

July19, 2017

July 19, 2022

0.26%

1,000,000

July19, 2017

July 16, 2027

0.64%

2,000,000

February 15, 2019

February 15, 2024

0.39%

2,000,000

Subtotal
Total

1,000,000

2,000,000

8,000,000¥

182,050,000

Kenedix Office Investment Corporation

33

7．REDUCTION ENTRY
The amount of reduction entry of property, plant and equipment acquired by government subsidy is as follows:
As of October 31, 2019

As of April 30, 2019

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

8. COMMITMENT LINE AGREEMENTThe Investment Corporation has concluded a commitment line agreement with bank of account, etc.
As of October 31, 2019

As of April 30, 2019

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

Drawn credit facility-

Balance-¥-¥ 6,000,000-¥

9. PER UNIT INFORMATION
From May 1, 2019
to October 31, 2019

From November 1, 2018
to April 30, 2019
Yen

Net asset value per unit¥

535,054¥

535,437

Net income per unit¥

13,639¥14,418Weighted-average number of units (units)

428,510428,510

The weighted-average number of units outstanding of 428,510 as of October 31, 2019 and April 30, 2019, respectively, was used for thecomputation of 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

KENEDIX Office Investment Corporation

10. 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 ¥5,844
million and ¥5,878 million for the fiscal periods ended October 31, 2019 and April 30, 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 October 31, 2019 and April 30, 2019, respectively. The following table summarizes the significant differences between thestatutory tax rate and the effective tax rate.

From November 1, 2018
to April 30, 2019

From May 1, 2019
to October 31, 2019
Statutory tax rate

31.51%

31.51%

Deductible cash distributions(31.50)(29.97)-(1.53)

Provision of reserve for reduction entry
Others0.01

0.01

Effective tax rate

0.02%

0.02%

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

As of April 30, 2019

In thousands of yen
Deferred tax assets
Enterprise tax payable

¥ 32

¥ 30

Amortization of leasehold right

4,344

4,117

101,608

64,376

105,985

68,524

Valuation allowance(105,952)(68,493)

Total deferred tax assets

¥ 32

¥ 30

Deferred gains or losses on hedges
Subtotal

11. 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.

12. RELATED-PARTY TRANSACTIONS(1) Parent Company, Major Corporate Unitholders and Other
Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019) and Twenty-eighth fiscal period (From November 1, 2018 to April 30, 2019): Not applicable(2) Affiliated Companies and Other
Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019) and Twenty-eighth fiscal period (From November 1, 2018 to April 30, 2019): Not applicable(3) Fellow Subsidiary Companies and Other
Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019) and Twenty-eighth fiscal period (From November 1, 2018 to April 30, 2019): Not applicable(4) Directors, Major Individual Unitholders and Other
Twenty-ninth fiscal period (From May 1, 2019 to October 31, 2019) and Twenty-eighth fiscal period (From November 1, 2018 to April 30, 2019): Not applicable

Kenedix Office Investment Corporation

35

13. 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 fromMay 1, 2019 to October 31, 2019 and from November 1, 2018 to April 30, 2019 consist of the following:
From May 1, 2019

From November 1, 2018

to October 31, 2019

to April 30, 2019

In thousands of yen
Rental and other operating revenues
Rent revenue - real estate
Rental revenues¥11,216,006¥10,984,209

1,760,026

1,809,977

12,976,033

12,794,187

Parking space rental revenues

523,855

509,859

Utility charge reimbursement

1,190,161

1,030,420

Miscellaneous

269,454

261,426

Subtotal

1,983,471

1,801,706¥14,959,504¥14,595,893

Property management fees and facility management fees

¥1,392,326¥1,382,522

Utilities

1,203,041

1,121,738

Taxes

1,280,309

1,224,581

Repairs and maintenance409,464

403,049

Insurance

19,46920,149Common area charges
Subtotal
Others:Total rent revenue - real estate
Property-related expenses
Expenses related to rent business

Trust fees

32,94632,642Others334,688326,404

Depreciation

2,419,923

2,369,390¥7,092,170¥6,880,478¥-¥5,253,000

Cost of investment properties-

4,652,797

Other sales expenses-

34,915-¥565,286

Total expenses related to rent business
Gain on sale of real estate properties
Revenue from sale of investment properties

Gain on sale of real estate properties

KENEDIX Office Investment Corporation
36¥

14. 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 October 31, 2019 and April 30,
2019 are as follows:
As of October 31, 2019

As of April 30, 2019
In thousands of yen

Due within one year¥

Due after one year
Total

2,797,748¥

9,191,310

2,210,585
6,719,211¥ 11,989,058¥

8,929,796

15. FINANCIAL INSTRUMENTS
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

37

(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-(2) Cash and deposits in trust
Subtotal(1) Short-term loans payable(2) Current portion of investment corporation bonds(3) Current portion of long-term loans payable(4) Investment corporation bonds

-

-

-

-

21,600,000

21,661,969

61,9698,000,000

8,099,900

99,900153,250,000

156,160,213

2,910,213¥ 185,050,000¥ 188,122,082¥ 3,072,082(314,241)(314,241)-(5) Long-term loans payable
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.
(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 16 “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

38

KENEDIX Office Investment Corporation¥ 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
Investment corporation bonds¥ 2,200,000

¥

-

-

¥

-

Long-term loans payable

21,600,000

21,300,000

Total¥ 23,800,000¥ 21,300,000-¥

1,000,000-

18,050,000¥

19,050,000

-

¥

¥

-

¥

-

4,000,000

3,000,000

11,300,000

11,700,000

90,900,000

11,300,000¥ 15,700,000¥ 93,900,000

Twenty-eighth fiscal period (from November 1, 2018 to April 30, 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 10 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

39

(B) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of April 30, 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¥ 19,675,112¥ 19,675,112

10,959,133

10,959,133-

30,634,246

30,634,246-

4,200,000

4,200,000

-

-

-

-

(3) Current portion of long-term loans payable

16,700,000

16,737,975

37,975(4) Investment corporation bonds

8,000,000

8,096,200

96,200(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¥-

153,150,000

155,121,843

1,971,843¥ 182,050,000¥ 184,156,018¥ 2,106,018(184,329)(184,329)-

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.
(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 16 “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)
¥ 1,130,524

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

KENEDIX Office Investment Corporation¥ 19,675,112
10,959,133¥ 30,634,246

*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¥ 4,200,000

Investment corporation bonds

-

¥

-

¥

-

-

Long-term loans payable

16,700,000

19,600,000

Total¥ 20,900,000¥ 19,600,000¥

21,700,000¥

21,700,000-¥

1,000,000¥

2,000,000¥

5,000,000

10,950,000

10,200,000

90,700,000

11,950,000¥ 12,200,000¥ 95,700,000

16. DERIVATIVE TRANSACTIONS

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

Calculation method for
applicable fair value(In thousandsof yen)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*¥ (341,241)(*)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.
The following summarizes the contracted amount and the fair value of interest-rate swap contracts as of April 30, 2019:(1) Hedge accounting not applied
Not applicable(2) Hedge accounting applied
Hedge

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/fixedpayableaccounting
methodPrinciple method

Total

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¥ 28,250,000¥ 28,250,000¥ (184,329)

provided by counterparty
financial institutions

88,750,000

74,050,000¥ 117,000,000¥ 102,300,000*¥ (184,329)(*)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

41

17. INVESTMENT AND RENTAL PROPERTIES
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 13 “BREAKDOWN OF RENTAL AND
OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY.”

Twenty-eighth fiscal period (from November 1, 2018 to April 30, 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 October 31, 2018

Net change

As of April 30, 2019

Fair value
As of April 30, 2019
(In thousands of yen)
¥ 474,257,000¥ 409,004,701¥ (5,792,000)¥ 403,212,700*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 decrease factors
were the sale of one property totaling ¥4,652,797 thousand and depreciation amounting to ¥2,369,390 thousand.

Income and loss in the fiscal period ended April 30, 2019 for real estate for rental purposes is listed in Note 13 “BREAKDOWN OF RENTAL AND
OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY.”

42
KENEDIX Office Investment Corporation

18. SEGMENT AND RELATED INFORMATION
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.
Twenty-eighth fiscal period (from November 1, 2018 to April 30, 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.

19. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable

Kenedix Office Investment Corporation

43

20. DISTRIBUTIONSTwenty-ninth fiscal period(From May 1, 2019 to October 31, 2019)

Twenty-eighth fiscal period(From November 1, 2018 to April 30, 2019)
(Yen)

(Yen)

I. Retained earnings at the end of period¥5,844,500,609¥6,178,677,968

II. Total distributions¥5,844,447,890¥5,878,728,690

Distributions per unit

¥13,639¥13,719

III. Voluntary reserve (provision)
Provision of reserve for reduction entry¥

IV. Retained earnings brought forward to
the next period¥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 ¥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.

44
KENEDIX Office Investment Corporation-¥299,949,278¥-

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 that,of the amount remaining after the provision of reserve for
reduction entry as stipulated in Article 66-2 of the Act on
Special Measures Concerning Taxation is deducted fromunappropriated retained earnings, it shall distribute theoutstanding ¥5,878,728,690 as profit distribution.
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 Corporation

45