Kenedix Realty Investment Corporation （8972）
11th Period Results (ended October 2010)
p7: updated and revised “Changes in ratio of seller type”
p21: updated “Breakdown of borrowing providers”

May 2011
Kenedix REIT Management, Inc.
http://www.kdx-reit.com/eng/

Flexible management taking market environment into
consideration: Stable growth of portfolio

Propertytransactions

Crisis response(2008~2009/10)

Opportunities
Disposal of 4 properties:¥4.65B to investment
new assets(Average size is ¥1.16B)
・2009/4 sold 2 offices・2009/6,8 sold 2 residentials

Futuremanagement
strategy

Re-growth and continuous growth(2009/11~)

Acquisition of 8 mid-sized
office buildings:¥26.78B
・2009/11,12 acquired 4 offices・2010/2
acquired 1 office・2010/11,12 acquired 3 offices

Competitiveenvironment inpropertyacquisition

Total asset size: ¥400B
Portfolio focusing on
office buildings
・Expand / deepening original network
・Variety of means of investment(diversified investment including TK, etc.)

Finance

Total asset size
¥244.4B・2009/4
Smooth refinance bycollateralizing a part of portfolio
・2009/10,11
Repayment of borrowing byusing cash on hand

Removing
Improvement inrefinancing
debt financing
Raised ¥24.7B(consideration for capital structure)risk
・2009/11 Raised equity （¥8.1B）
・2010/2 New borrowings （¥7.0B）
・2010/11 New borrowings （¥9.5B）

Variety in fund raising
to support external growth・Improve in lending conditions
・Investment bond issuing・Equity financing

LTV

approximately
43%(note)
Note: As of 2010/12/13, based on the data as of the end of 11th fiscal period (October 31, 2010)

0
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

SECTION 1

11th Period Results (ended October 2010)
12th Period Forecasts (ending to April 2011)

11th period (2010/10) financial results: Performance highlights
Performance(¥M)

10th period
results(2010/4)

11th period
results(2010/10)

Operating revenues

8,067

8,358

291

Gain on sales of real estate property
Operating expenses
Rental business expenses (excluding
depreciation)

4,329
2,237

116
4,522
2,377

116
193
140

Gain on sales of KDX Shinjuku-Gyoen Building-

Depreciation
Loss on sales of real estate property

1,477
-

1,440
64

-37
64

Loss on sales of Court Shin-Okachimachi

Operating Income

3,738

3,835

97

-

Non-operating expenses

1,185

1,231

46

-

Interest expenses

1,142

1,205

63

Full period contribution of interest from debt finance in 10th period

2,567

2,607

40

-

-

65

65

¥10,993¥10,881

-¥112

5,830
4,044

5,864
3,995

34
-49

Net Income
Reserve for reduction entry
Distribution per unit
NOI (Net Operating Income)FFO (Funds From Operation)

Difference from10th to11 th period

Notes
Utilities charge reimbursements (due to seasonal variability) (+181),
Revenue from KDX Shinjuku Building is contributed fully (+138),
Decrease in rental revenues from existing properties (-129)

Internal reserves of profit
from sales of land

Utilities (due to seasonal variability)

Gain on sales of KDX Shinjuku-Gyoen
Building and Court Shin-Okachimachi

80% of gain of sales of 2 properties of land is recorded to internal
reserve(No. of investment units: 233,550 units)-⇒ Application of exceptional handling of
taxation in the event of in-advanceacquisition of land, etc. in 2009 and 2010
for future use. (Article 66.2 of the Special
Taxation Measure Law)
80% of the gain of sales of land (¥65M) is
recorded to internal reserve as reserve
for reduction entry

Comparison between forecasts and 11th period results(¥M)

Operating revenues

Forecast(2010/6/14)
8,199

Operating expenses

4,519

4,522

3

Operating results
Non-operating expenses

3,679
1,253

3,835
1,231

156
-22

Interest expenses

1,219

1,205

-14

Refinance cost is lower than our estimate

2,430

2,607

176

-

-

65

65

80% of gain of sales of 2 properties of land is recorded to internal
reserve¥10,400¥10,881+¥481

Net Income
Reserve for reduction entry
Distribution per unit

Results
8,358

Difference
from forecast
160

Main factors
Profit from sale of Shinjuku-Gyoen Building (+116)
Loss on sale of Court Shin-Okachimachi (+64), Decrease in propertyrelated expense (-18), Decrease in other expenses (-40)--

2
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

12th period（2011/4）earnings forecasts
Forecasts for 12th period (2011/4)(¥M)

11th period results

12th period forecasts(2010/10)(2011/4)

8,358

8,075

-283

116
4,522

0
4,429

-116
-93

2,377

2,357

-20

Non-operating expenses

1,440
64
3,835
1,231

1,406
0
3,646
1,378

-34
-64
-189
147

Interest expense etc.

1,205

1,359

154

2,607
65
¥10,881
5,864
3,995
52
70→67 properties

2,271
※(65)
¥10,000
5,717
3,677
0
67→70 properties

-336
-¥881
-147
-318
-52
+3 properties

Operating revenues
Gain on sales of real estate property
Operating expenses
Rental business expenses(excl. depreciation)
Depreciation
Loss on sales of real estate property
Operating incom e

Net Incom e
Reserve for reduction entry
Distribution per unit (¥)
NOI*
FFO*
(Reference) Profit/Loss from properties (Net)(Reference) Changes in the no. of properties(Reference) Sold/acquisition of properties【 Sold】
・ KDX Shinjuku-Gyoen Building
・ Court Shin-Okachimachi【 Integration】
KDX Shin-Yokohama 381 Building【 Acquisition】
・ Kyodo Building: 2 properties(Ginza No.8, Honcho 1chome)
・ KDX Kobayashi-Doshomachi
Building

Note: NOI = Rental revenues – Property-related expenses + Depreciation
FFO (Funds From Operation) = (Net Income + Depreciation) – Profit/loss from property sale

(Reference) Forecast for property tax
12th period (2011/ 4) ¥649M
13th period (2011/10) ¥708M

Net change-

Main factors
3 new properties +294, 2 properties disposed in 11th period -80,
existing properties -204, utilities -151
Loss on sales of 2 properties in 11th period
3 new properties +86, 2 properties sold in 11th period -20, utilities -61
3 new properties +68, completion of existing properties' depreciation -88※Interest expense of new borrow ings (¥9.5B), etc in 11th period (including
financing related expense)※Distribution of internal reserve recorded in 11th period(No. of investment units: 233,550 units)
Decrease in existing properties
Increase in interest expense of new borrow ings in 11th period-※Increase in interest expensein 12th period¾ Acquisition of 3 properties in 12th
period is funded by new long-term debt(¥9.5B). Interest expense also includes
financing related expense will bebooked in 12th period※Distribution of internal reserve
recorded in 11th period¾ Internal reserve recorded as reserve
for reduction entry (80% of gain on
sales of 2 properties of land) in 11th
period is planned to distribute to unit
holders in 12th period

Note: Forecast figures are calculated based on certain assumptions. Readers are advised that actual net income and distributions may vary
due to variety of reasons. Accordingly, the Investment Corporation does not guarantee payment of the forecast distribution.

3
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

SECTION 2

Portfolio that Focuses on Office Buildings

Portfolio that focuses on office buildings
Target Portfolio:
Portfolio consisting of¥400B/ 100 properties
focusing mainly on midsized office buildings

Changes in asset size (Changes in total acquisition prices)

(¥B)

450
Offices

400

Central urban retails
Residentials

350

Effects of ¥400B portfolio

300

Re-GroStability-emphasized

9External growth

wth・Improve property sourcing strength(Expand information, reinforce negotiating
power)
・Operation to build up earnings(Invest in developments、low occupancy
properties)

244.4

250
200
Gr

150

th
ow

as
ph
m
-e

d
ize

9Internal growth・Improvement in stable cash flow
・Taking advantage of scale merit(effective operation and cost reduction)

222.6

100
69.1

50
0

9Finance

37.7
12.3
18.9

12.3

9.4

End of 1st End of 2nd End of 3rd End of 4th End of 5th End of 6th End of 7th End of 8th End of 9th End of 10thEnd of 11th As of(2005/10) (2006/4) (2006/10) (2007/4) (2007/10) (2008/4) (2008/10) (2009/4) (2009/10) (2010/4) (2010/10) Dec. 2010

Target・Improvement in fund raising
・Improvement of liquidity in the market
・Increasing retained earnings（depreciation）

Portfolio as of December 13, 2010
Total portfolio:

Portfolio breakdownby property type

70 properties

Residentials
Central 3.8%
urban retails
5.0%

Total size: ¥244.4B

Offices
91.0%

Office buildings
64 properties
Total size: ¥222.6B

Portfolio breakdownby region (office buildings)
Other Regional
Areas
15.7%

Other Tokyo
Metropolitan Area
21.6%

Central
Tokyo
62.6%

Notes:
・Amounts are rounded to the nearest ¥100M.
・Pie charts show the ratio of relevant property types to total and arerounded down to the first decimal place.
・Central Tokyo: Chiyoda, Chuo, Minato, Shibuya and Shinjuku wards

5
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Future property acquisition strategies:
Awareness of environmental and acquisition track record
Changes in number & quality of property sales information(Reference) Office buildings acquired by J-REIT since Nov. 20090

Both the number & quality of property sales information havebeen improving backed by solid acquisition track record¾ The number of properties offered has been on the rise since restart ofproperty acquisition (expected to exceed 216, the highest number everachieved in 5th period ended Oct. 2007)

REIT A

3

4

5

6(No. of property)
789¾ The number of properties under consideration to acquire is also on therise (in the 11th period, the number was 48 (27.3% of all property sales
information) and increased 12.6% from the previous period)

REIT C¾ The number of packaged properties (portfolios) information has been
increasing since the beginning of 2010 (A total of 9 portfolios comprising 75
buildings, including 5 portfolios comprising 51 buildings offered by a private
fund)

REIT E

Acquisition priceNo. of acquired properties(from related party)
No. of acquired properties(from third parties)

REIT BREIT DREIT F
0

10

20

30

40

50

60

70

80

90
(¥B)

Note: The above reflects only the acquisitions of office buildings by J-REIT
that have acquired more than 2 office buildings since Nov. 2009 (as of Dec.1,
2010). Its is classified as whether or not the seller is a related party or not.

Number of garnered property sales information (office)No. of garnered property sales information

300

No. of property considered to be acquire

250

185

200

200

216
176

165
133

150

50

2

Kenedix REIT

¾ In some cases, the properties offered in the past are reoffered with lower
prices

100

1

143
119

84

63
4

0
1st period 2nd period 3rd period 4th period 5th period 6th period 7th period 8th period 9th period10th period11th period Future(2005/10) (2006/4) (2006/10) (2007/4) (2007/10) (2008/4) (2008/10) (2009/4) (2009/10) (2010/4) (2010/10)

200
180
160
140
120
100
80
60
40
20
0

176

143

21

14.7%

10th period(2010/4)

48

27.3%

11th period(2010/10)

6
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Future acquisition strategy：
Original network and diversification of the means of investment
 Expanding/deepening the original network by using our track record of property acquisition
 Jointly investment in equity to secure quality asset
 Valuation of properties based on our expertise and experience of property management

Expanding/deepening the original network

Changes in ratio of seller type
(Number shows total amount of acquisition price (¥B))¾Financial institutions¾Asset managers of private funds

Collecting information ofproperties which lenders need toaccelerate collection of their loans
and exit strategies of funds bycommunicating with lenders andsecurities companies

Collecting information of loan
repayment of funds and fundredemption date bycommunicating with AM
companies¾Other REITs
Finding potential opportunities andacquiring properties throughnegotiated transactions with other
REITs by communicating withother REITs proactively¾Corporations
Collecting information ofcompanies which is in course offinancial restructuring and offbalancing of their assets on B/S bycommunicating with Corporations

Diversify the means and targets of investment

Debt
Property＋
EquityInvestment

Sponsors+
others¾ Investment in tokumei-kumiai(*)
for future quality assets
acquisition (Joint investment
with sponsors)¾ Investment in properties byusing warehousing funds

Replacing portfolio properties
Sale of existing properties in view of newacquisition of office buildings

Improvement in quality of the portfolio*Japanese silent partnership
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

7

Properties acquired in 12th period (ending April 2011)
Kyodo Building(Honcho 1chome)

Kyodo Building (Ginza No.8)♦♦♦

Location: Chuo-ku, Tokyo

Location: Chuo-ku, Tokyo

GFA: 4,724.62 ㎡

GFA: 5,110.45 ㎡

Year built: Nov. 1991

Year built: Jan. 1984

Acquisition price: ¥4,300 M

Acquisition price: ¥4,000M

Acquisition date: Nov.12, 2010

Acquisition date: Nov.12, 2010

3-minute walk from “Ginza itchome” station on
Tokyo Metro Yurakucho Line and “Higashiginza” station on Hibiya Line and Toei
Subway Asakusa Line
Completed large-scale renovation in 2008 2009
Typical floor area of c. 411㎡ (c.125 tsubo)♦♦♦

3-minute walk from “Mitsukoshimae” station on
Tokyo Metro Ginza Line and Hanzomon Lineand “Shin-Nihonbashi” station on JR Line
Completed large-scale renovation in 2008
Typical floor area of c. 467㎡ (c.141 tsubo)

KDX Kobayashi-Doshomachi
Building
Location: Chuo-ku, Osaka
GFA: 10,723.83m2
Year built: July 2009
Acquisition price: ¥2,870M
Acquisition date: Dec. 1, 2010
Main tenant:
Kobayashi Pharmaceutical
Land owner:
Kobayashi Pharmaceutical♦♦♦

Located in Yodoyabashi district, at the centerarea of the Osaka metropolitan area (one of the
major office district in Osaka)
A 12-story building built in July 2009 with atypical floor area of c.617㎡ (c.186 tsubo)
4 floors occupied by Kobayashi Pharmaceutical(land owner)

8
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Track record of property acquisition: growth of our portfolio
Re-Growth
Total acquisition price: ¥8.81B

Acquisition price: ¥6.8B

KDX Sh in Yokoh ama 3 8 1 KDX Nih on bash i
Bu ildin g An n e x
2 1 6 Bu ildin g
Towe r (Not e 1 )Property Name

Koish ikawa TG
Bu ildin g

Got an da TG
Bu ildin g

Location

Bunkyo-ku,
TokyoShinagawa-ku,
Tokyo
Nov. 2009

Yokohama,
Kanagawa

Acquisition date

Total acquisition price: ¥11.17B

Kyodo Bu ildin g KDX Kobayash i(Hon c h oDosh omac h i
1 c h ome )Bu ildin g

KDX Sh in ju ku
Bu ildin g(Not e 2 )Kyodo Bu ildin g(Gin za No.8 )Chuo-ku, Tokyo

Shinjuku-ku,Tokyo

Chuo-ku, Tokyo Chuo-ku, Tokyo Chuo-ku, Osaka

Dec. 2009

Feb. 2010

Nov. 2010(Re fe r e n c e )8 pr ope r t ie s-

Dec. 2010-

Acquisition price (A)\3.08B\2.62B\1.1B\2.01B

\6.8B

\4.3B

\4.0B

\2.87B\26.78B

Appraisal value (B)\3.26B\2.83B\1.21B\2.11B\7.42B\4.52B\4.33B\2.97B\28.65B

Difference (A)-(B)

-5.5%

-7.4%

-9.1%

-4.7%

-8.4%

-4.9%

-7.6%

-3.4%

-6.5%

SellerThird party

Third party

Related party

Related party

Third party

Third party

Third party

Related party-

Actual NOI (Note3)

\188M

\184M

\77M

\107M

\388M

\214M

\245M

\190M

\1,593M

Actual NOI /Acquisition Value

6.1%

7.0%

7.0%

5.3%

5.7%

5.0%

6.1%

6.6%

5.9%

Mid-term NOI (Note3)

\166M

\162M

\70M

\104M

\349M

\208M

\189M

\187M

\1,435M

Mid-term NOI /Acquisition Price

5.4%

6.2%

6.4%

5.2%

5.1%

4.8%

4.7%

6.5%

5.4%

Note 1:KDX Shin-Yokohama 381 Building Annex Tower
Starting from 2010/11/1, KDX Shin-Yokohama 381 Building and the Annex Tower is operated as one property in our portfolio. In addition, starting from disclosurespertaining October 31, 2010, the two properties is indicatedNote2: KDX Shinjuku Building
As of August 1, 2010, the Investment Corporation has changed the name of Pacific Marks Nishi-Shinjuku Building.
Note3: Actual NOI (Annual) is based on property operating revenue and expenses (including property tax) those numbers are based on contracts with existing tenants at theacquisition date. Mid-term NOI is based on property operating revenue and expenses those numbers are based on our mid-term estimate and adjusted by occupancy ratio
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

9Improvement in property market
Market Cycle ※※ Market cycle is based on KDRM’s perspectives

Change of Vacancy ratio andoffice rent

Change of TSE REIT Index
Decline ingrowthAverage rent
25,000Downturn④①

23,000J-REIT
MarketHigh Growth

21,0002010/6
2002/1219,000Bottom out②

15,0000%Office building
leasing market

Source: Tokyo Stock Exchange(Feb. 1, 2009–Nov. 30, 2010)

2%

4%

6%

8%

10%

Vacancy
空室率 ratio

12%① Increase vacancy ratio ⇒ Decrease office rent
② Decrease office rent ⇒ Decrease vacancy ratio③ Decrease vacancy ratio ⇒ Increase office rent
④ Increase office rent ⇒ Increase vacancy ratio

Transactions of office buildings by J-REITs
Transaction cap rate for office buildings

2010/10

2004/12③

Office building
sales market

2010/8

2006/1217,00010%

2010/2

2008/12

2007/12

Real estatemarket cycle

Note: Office buildings with the standard floor larger than 100
tsubo in central 5 wards of Tokyo (Chiyoda, Chuo,
Minato, Shinjuku, Shibuya)
Source: Created by KDRM based on the data complied by
Miki Shoji Co., Ltd (as of October 2010)※ Transactions of office buildings located in Tokyo 23 wards by J-REITs

9%
8%
7%
6%
5%
4%
3%
2%
07/01

07/04

07/07

07/10

08/01

08/04

08/07

08/10

09/01

09/04

09/07

09/10

10/01

10/04

10/07

10/10

Note: Cap Rate of sales = Latest actual NOI/Sales value, Cap Rate of purchase =Appraisal NCF/Appraisal value
Source: Prepared by KDAM based on company filings from J-REITs
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

10

SECTION 3

Management of Existing Properties

Management of existing properties:
Trend of turnover and occupancy ratios for office buildings
Annualized turnover ratios for office buildings (actual and forecasted)
12%

10.9%
10.0%

10%

Average annual turnover ratio: 8.8%
（annualized average from 5th -11th period）

9.0%

8%

8.2%

7.0%

7.7%

8.4%

8.1%

11th period(2010/10)

12th period
Forecast(2011/4)

6%
5th period(2007/10)

6th period(2008/4)

7th period(2008/10)

8th period(2009/4)

9th period(2009/10)

10th period(2010/4)

Note： 12th period’s (2011/4) forecast is based on prior cancellation notice received as of 2010/10 and included the contributions from 3 properties acquired in 12th period

Average vacancy period for
office buildings

100%

7.3
months94%
92%(4.5months) (6.6months) (6.7months)(6.7months)

90%
88%
86%
84%

89.0%
(Other Regional Areas)
20
10
/8

82%
20
10
/5

Notes:
Average (of each floor) based on number of contracts
Floors (offices on 2F or above) covered by the survey are:･Vacant at start of period, but acquired new tenants
during the relevant period･Continuously vacant from start to the end of period･Cancelled but managed to acquire new tenants during
the relevant period

14.1
months93.3%(Total office buildings)

20
10
/2

12.7
months

94.6%(Tokyo Metropolitan Area)

20
09
/1
1

11.1
months

As of October 31, 2010

98%
96%

20
09
/8

11th
Period(2010/10)

6.5
Months10.6
months6.3
Months10th
Period(2010/4)

20
09
/5

Other
Regional
Areas

4.9
months9th
Period(2009/10)

20
09
/2

Tokyo
Metropolitan
Area(central 5 wards)

8th
Period(2009/4)

20
08
/1
1

(in months)

Changes in occupancy ratio for office buildings (by region)

Average occupancy ratio (simple average in each month)in last 2 years (from 8th to 11th)
Total Office
Buildings

94.0%

Tokyo
Metropolitan
Area

Other

95.6% Regional 88.8%（Reference）
Total portfolio’s occupancy
ratio as of October 31, 2010:
93.6%（-0.8% compared to 2010/4）

Areas

12
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Management of existing properties:
Status of new tenants and existing tenants(Reference)
Main reasons for new tenants moving in to office buildings

Number of new tenants and exiting tenantsMove in
入居件数（No.) ）
（単位：件80

6th第6期period7th第7期period8th第8期periodMove out
退去件数
9th第9期period

第10期
10thperiod

60
40
20

34

49

66

51

64

48

0
-20

6th
7th
8th
9th
10th
11th
periodperiodperiodperiodperiodperiod(2008/04) (2008/10) (2009/4) (2009/10) (2010/4) (2010/10)

第11期
11th
periodExpandoffice space

16

15

19

26

40

36

Reduceoffice space

2

3

12

17

14

6

Others/Unknown

8

7

2

12

3

4

Note: Survey targeting mainly tenants leasing floors above 2nd floor

-35

-44

-47

-58

-58

-49
(Reference)
Main reasons for tenants to moving out of office buildings

-40
-60

6th
7th
8th
9th
10th
11th 12th period
periodperiodperiodperiodperiodperiodForecast(2008/04) (2008/10) (2009/4) (2009/10) (2010/4) (2010/10) (2010/10)-80

6th第6期period7th第7期period8th第8期period9th第9期period10th
period11th
period
第10期
第11期(07/11～08/04）（08/05～08/10）（09/05～09/10）（09/11～10/04）（10/05～10/10）(07/11–08/04)(08/05–08/10) （08/11～09/04）(08/11–09/04) (09/05–09/10)(09/11–10/04)(10/5–10/10)
Note： Based on number of floors. If one tenant leases more than one floor, each floor is counted as one

Industries

No. of tenants(%)

Service14

30.4

Food/retail

9

19.6

Financial/insurance

8

17.4

Industrial

5

10.9

Transportation/Telecom

3

6.5

Construction

3

6.5

Individual

2

4.3

Real estate

2

4.3

Total

46

100.0%

DepositAverage deposit amount isequivalent to 11.2 months rent

Result of the past year
(10th and 11th period)
6 tenants with unpaid rent of morethan 2 months

Expandoffice
space

2

3

4

2

4

9

3

Reduceoffice
space

17

23

33

44

47

31

27

Others/Unknown

11

7

6

6

4

5

10

Note: Excluding floors for residential use

13
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Management of existing properties: Rent level of office buildings
New rents

Renewed rents

No. of increase/decrease in rent and average change in rent

Status of renewed rent (No. of rents changed, % change)

10th
11th
6th
7th
8th
9th
periodperiodperiodperiodperiodperiod(2008/04) (2008/10) (2009/4) (2009/10) (2010/4) (2010/10)

CentralTokyo(5 wards)

Changes

35.3%

13.5%

0.0%

-19.3%-22.8%-19.0%

Increasein rent

7

8

8

0

0

0

Decreasein rent

0

Changes

15.0%

5.8%

-1.8%

-8.4%

-15.5%-20.0%

4

5

4

3

1

0

Other Tokyo Increase
Metropolitan in rent
Area
Decreasein rent

Other
Regional
Areas

Total of
OfficeBuildings

0

9

17

16

18

7th period(2008/10)

8th period(2009/4)

9th period(2009/10)

10th period(2010/4)

11th period(2010/10)

Change(%)

10.3%

-2.7%

-5.7%

-9.0%

-10.8%

Increase in
rent

42

12

6

4

6

Decrease in
rent

－

14

30

63

55

Note:
Changes in rent for tenants that renewed their contracts with rents increased/decreased.
Changes are the difference between the rent 1 month prior to the renewal and the renewed rent.
Tenants without rent increase/decrease are not included

Status of renewed rents during 11th period (2010/10)
1

2

6

15

11

6

Changes

7.1%

-5.1%

-7.7%

-16.4%-15.0%-16.6%

Increasein rent

8

3

4

2

6

1

Decreasein rent

4

7

7

11

18

13

Changes

17.0%

3.9%

-2.7%

-14.4%-17.5%-18.3%

Increasein rent

19

16

16

5

7

1

Decreasein rent

5

9

22

43

45

37

Increasein rent
3.1%
Exempt fromrenewalRenewal
77.2%
22.8%

Increase in rent

Decreasein rent
38.9%

Decrease in rent

No change

100%

Notes:
Ratio represent the simple average changes between the average monthly rents for existing
tenants and the average rents for new contracts for respective periods.
Based on floors used for offices (above 2nd floor), excluding newly acquired building during theperiod

80%
60%

47.6%
77.9%

57.9%

66.4%

40%
20%
0%

14.0%
8.1%
8th period

24.0%

45.8%

38.9%

9.6%

6.6%

3.1%

9th period

10th period

11th periodNochange57.9%

Decreasing ratio of“Decrease in rent”
and increasing ratio
of “No change”
Note:
Any renewed contracts, including
contracts extended before theexpiration date.
Ratio calculation based on leased
floor area

14
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Management of existing properties:
Rent and tenants of office buildings
Average rent
Average rent for office buildings

End tenants of office buildings（Monthly rent per
tsubo)End of 7th
period(2008/10)

End of 8th
period(2009/4)

End of 9th
period(2009/10)

Central Tokyo (5 wards)¥20,600¥20,500¥20,200¥19,600¥19,000-5.9%

Other Tokyo Metropolitan Area

¥14,400¥14,300¥14,100¥13,800¥13,700-3.1%

Other Regional Areas¥11,100¥11,000¥10,700¥10,400¥10,300-4.2%

Total office buildings¥17,600¥17,500¥17,200

End of 10th End of 11th
periodperiod(2010/4)(2010/10)¥16,700

Changescompared with
2009/10¥16,300-5.1%

Variety of tenants(As of end of 11th period)

Note: Average rent level covers offices mainly above 2nd floor of the 56 properties which the Investment Corporation has owned at
the end of 9th period excluding KDX Nagoya Sakae Building and KDX Shinjuku-Gyoen Building which was sold. Starting from the11th period, A-47KDX Shin-Yokohama 381 Building is calculated collectively with the KDX Shin-Yokohama 381 Building Annex
Tower (A-65) as 1 property. The average rent level of each property is the value obtained by dividing the sum of the monthly rent(including common area charges) per each property by the total leased area of each property, and is rounded down to 100 yen.

Monthly rent per tsubo including common service fee (¥)

1～29 employees：93.4%
Over 100
employees
1.6%

30～99
employees
5.0%
10 ～ 29
employees
15.7%

35,000円
35,00030,000円
30,00025,000円
25,00020,000円
20,0001~9employees
77.7%

15,000円
15,00010,000円
10,0005,000円
5,000

0円
0
0坪
0

Source: KDRM, based on Tokyo office statistics report
as of 2006 (MPHPT Statistics Bureau)
50坪
50

100坪
100

150坪
150

200坪
200

250坪
250

300坪
300

350坪
350

400坪
400

450坪
450

Industrial
79
12.5%

Service249
39.3%

Food/retail
155
24.5%

(Reference) Breakdown of offices based on thenumber of employees (Tokyo)

Distribution of tenants in Tokyo
Metropolitan Area (As of end of 11th period)
40,000円
40,000Mining1 Construction
32
0.2%
5.1%

Individual28
4.4%
Government
related andothers2
0.3%

Transportation/
Telecom
22
3.5%

Financial/
Real estate insurance
24
41
3.8%
6.5%

633 tenants

No. of end tenants(No. of properties)（61 properties）

Ratio of largest end tenant

2.1%

Ratio of top 3 end tenants

5.5%

Note: The ratio of top-end tenants within the entire portfolio(based on leased area)
KDX Shin-Yokohama 381 Building and KDX ShinYokohama 381 Building Annex Tower are considered
together as 1 property

500坪
500 (Tsubo)

Note: No. of tenants for offices (excluding shops and warehouses, etc.) in Tokyo Metropolitan Area: 379
Above chart excludes 12 tenants with leased area more than 500 tsubo
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

15

Management of existing properties:
Environment friendly management and leveraging scale merit
Actions for energy-saving

Reduction of construction costs throughpackage bid

We plan to upgrade air conditioning
systems and lightings, which account for
80% of total energy consumption

Upgrade air-conditioning systems
Upgrade air-conditioners, installventilation fans with heat exchangers
and upgrade ventilation systems

Energy saving by 1%
every year and more than
5% in 5 years expected ※Upgrade lighting equipment
Install higher-efficiency lightings withinverters and high-intensity
evacuation signs, install LED lightingsfor common areas, etc.

Install motion sensors etc.

5-year energy saving action plan
FY2011

-2%
-3%
-4%
-5%
-6%

Amount of
reduction

FY2012FY2013

FY20149th period

2

¥16 M

11.3％

10th period

3

¥6 M

7.6％

11th period

2

¥10 M

23.8％

12th period

5

¥63 M

16.1％

Bargaining power backed
the advantage of scaleSignificant and continued reductions ofconstruction costs■ The upgrade of air-conditioning system planned
during the 12th period (ending April 2011) is expected
to reduce the energy consumption of the property by
13.8％

UpgradeUpgrade air
air conditioning
conditioning systems,
systems, etc.
etc. forfor eacheach property
property■ This repair of KDX Shin-Yokohama Building isunder “Construction Saving Energy Program 2010”,
which is Ministry of Land, Infrastructure, Transport andTourism (eligible to receive subsidies)

Install
Install high-intensity
high-intensity evacuation
evacuation signs
signs
and
and motion
motion sensors
sensors(forallpropertiesinour
portfolio)(for all properties in our portfolio)
Install
Install LED
LED lightings
lightings forfor common
common areas
areas
(for
(for allall properties
properties inin ourour portfolio)
portfolio)■The fund is expected to receive a subsidy of ¥26.2M
which is nearly one-third of the total construction costsof ¥80M (in March 2011)Land area (m2)
GFA (m2)

Structure

2-3-8 Shin-Yokohama,
Kohoku-ku,
Yokohama, Kanagawa
Steel reinforced# of stories

B1 F9

Acquisition date

Location

Our target of 5% reduction is
to be achieved by the end of
the 19th period (FY2014)

Rate ofreduction

Evaluation of our actions: Adoption by ”Construction Saving
Energy Program 2010”

0%
-1%

# of
properties※ We are categorized as specified business entity under the revised
Energy Saving Act (because of use crude oil equivalent more than
1,500kl/year). The act sets a goal to reduce the amount of energy use
by 1% every year.
Emission reduction commitments under the Tokyo environment code
covers only the large size building that use oil more than 1,500kl/year,
however none of our buildings is this large, and is not required toreduce emission at this point.

Install motion sensors to saveenergies while people are away fromoffice, higher-efficiency transformers,
and use inverters for controlling fans

FY2010Period ofconstruction

A-22 KDX ShinYokohama Building

Year built

705.006,180.51
September1990
May 1, 200616
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Management of existing properties:
Management based on customer satisfaction strategy※ Breakdown of types of question in 3rd CS survey: hardware(58％) and software(42％)

Actions based on customer satisfaction survey (CS survey)
1st survey(20 properties)(2005/12)

2nd survey(44 properties)(2007/7)

3rd survey(58 properties)(2009/7)

4th survey(All office buildings)(Planned in 2011/7)

Establishment ofstandard guidelines

Hardware(Buildings, facilities, etc.)¾Maintain and increase the competitiveness ofproperties¾Maintain and increase the tenant inclination
to stay in the same building¾Suitable repair work
Data complied by Miki Shoji Co., Ltd (Note)

Construction

Construction

Construction

10%

KRI (offices in Central 5 wards in Tokyo)

8.9%

8%

Establishment ofstandard guidelines

Software(Management andoperations)

6%

Operation based on
the guidelines

4.7%

4%
2%
Apr-08

Actions forEnergy saving

Attitude survey

DetailNo. ofproperties

Expense(¥M)

ToiletInstallation of hand dryer and others

21

44

Security, disaster prevention

Automatic security, installation of
security camera, etc.

838

Other common space

Repairing stairs, upgrading bulletinboard, etc.

15

23

External facade/Entrance

Installation of automatic door Upgradeof entrance, etc.

7

12

Elevator

Renewing inner packaging,
installation of switches, etc.

44Office facility (air-conditioning,lighting, etc.)

Upgrading lightings, etc.

5

3

60

126

Total

Apr-09Oct-09Apr-10

Oct-10Establishment of standard guidelines of software and Improvement
by operation of the guidelines (12th period onwards)

Improvement in hardware based on the 3rd CS survey
Principal Constructions

Oct-08

Note: Average vacancy ratio of Tokyo Business Area (Central 5 wards)
Source: Created by KDRM based on the data complied by Miki Shoji Co., Ltd¾ Improve the level of property management and minimize variations ofmanagement quality by properties based on our guidelines
Items

Opinions/claims received

Cleaning

Appearance, time period for cleaning, politeness including
greetings, quality, etc.

Building maintenance

System/frequency of communications, response time, etc.

Security, disasterprevention

Prevention to entry into the building by non-tenants,
security & disaster prevention measures, etc.
Schedule, notification of details, safety and other measures
for tenants during the construction, etc.
Smoking areas, the ways to post messages on a bulletinboard, etc.

Construction
OthersNote: Includes constructions planned in 12th period (2011/4)

17
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

SECTION 4

Financial Strategy

Stable financial management: Conservative LTV and diversified
maturities
Changes in LTV
50%
47.0%

45.6%

45%

41.2%

41.4%

c.43%

41.1% 40.9%

Below 45%
as a principal

38.9%

40%
37.5%

We aim to increase ourrevenue through property
acquisition by diversifying ourfinancing methods

Maintaining conservative level of leverage

40.9%

38.7%

35%

¾ Investment corporation bond

35.3%
30%

¾ Public offering

8th
9th
as of 第 1212th
10期末第11th
11期末 2010/12
期末 第 33rd期末 第 44th期末 第 55th
期末 第 66th
期末 第 77th
期末 第 8期末 第 9期末 第10th期末
第 11st期末 第 22nd
period period period period period period period period period period period 2010/12 period
05/10
06/4
06/10
07/4
07/10
08/4
08/10
09/4
09/10
10/4
10/10
11/4
末 (2006/4)
末 (2006/10)
末 (2007/4)
末 (2007/10)
末 (2008/4)
末 (2008/10)
末 (2009/4)
末 (2009/10)
末 (2010/4)
末 (2010/10)
末 現在 (2011/4)
末(2005/10)¾ Asset backed loanNote: LTV = total debt / Total assets

Diversification of debt maturities (as of December 13, 2010)
Short-term borrowings

Long-term borrowings

Investment corporation bonds

Refinanced in 2010 1H or later

New borrowings in 2010 1H or later

(¥B)
25

3.5

20

15.0
1.0

Repayment
5.52
15

9

10

18.8015
Repayment
13.75

3.5

12.03

2.5
10.24

5

6.65

0.5

1.8

0
2010
1H

2010
2H

2011
1H

2011
2H

2012
1H

4.2

6.27

2012
2H

5.16
3.7

3.27

2.73

0.21

2013
1H

2013
2H

2014
1H

1.5
2014
2H

2015
1H

3
2015
2H

5
2016
1H

3
2016
2H

3
2017
1H

2017
2H

Note1: Shows debt amounts that mature in each period (rounded to the second decimal place)Note2: 1H is from April 1 to September 30, 2H is from October 1 to March 31 of the following year and are not identical with the fiscal period of theInvestment Corporation (e.g. 2010, 1H is from April 1, 2010 to September 30, 2010)
Note3: The borrowings of refinanced in 2010 1H or later (red and shaded boxes, refinance by short-term borrowings are red and yellow-shaded boxes)
are total repayment (excluding dividend repayment amount based on the agreement)
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

20

Stable financial management : Improvement in lending conditionand diversification of fund sources
Credit ratings and investment corporation bonds

New borrowings in 2010
No. of lenders

Amount ofborrowing

PeriodPayment method

Feb. 2010

4 lenders¥7.0B

Up to 5years(3years、5years)

Amortization(5% per year)※Acquisition of
KDX Shinjuku
Building

Nov. & Dec. 2010

6 lenders¥9.5B

Up to 7years(3years、5years、 Full on maturity
7years)Acquisition of
3 properties

Restart of new
borrowings

Prolonged
borrowing periods

1st Bond
2nd Bond

Short-termborrowings
¥6.3B
5.6%

Long-term borrowings
and investment
corporation bonds¥67.02B
59.8%

Fixed interest
rate debt¥96.97B
86.5%

Average interest rate *1.84%

Average life

2.0 yrs

Proportion of long-term debt

94.4%

Current
portion ofLong-term
borrowings¥38.75B
34.6%

Note: The average interest rate above does notinclude upfront fees. The average interest
rate including upfront fees is 2.16%. “Fixedinterest rate debt” includes borrowings thatwere converted to fixed from floating
through interest rate swap
Note: The amount of borrowings is rounded to thesecond decimal place

1.74%
2.37%

5yrs
10yrs

2012/3/15
2017/3/15

Investment
Summary of shelfcorporation
registrationbond

Investment unit
certificate
Primary

Secondary

Planned issue
amount

￥100B

￥100B

￥15B

Planned issuance
period2 yrs fromFeb 2009

2 yrs fromMay 2009

2 yrs fromMay 2009

Breakdown of borrowing providers (As of May 27, 2011)
End of 10th
(￥B)
As of
period2011/5 Difference(2010/4)

Debt balance by maturity period

Floating
interest rate
debt
¥15.1B
13.5%

¥9.0B
¥3.0B

Shelf registration for fund raising

Diversificationof fund sources

Fixed-rate debt / Debt balance by maturity period (as of December 13, 2010)

Proportion of floating-rate
debt vs. fixed-rate debt

RatingJapan Credit Rating Agency (JCR)A(Stable)Bonds
Size Interest rate Maturity Maturity date※3year borrowings: principal repayment in full on maturity

Access toEquity(As of December 13, 2010)

Rating agency

Use ofSumitomo Mitsui Banking
Corporation

21.6

23.1

+1.5

Development Bank of Japan

13.6

16.5

+2.9

Chuo Mitsui Trust and Banking

15.5

16.3

+0.8

Aozora Bank

14.0

14.5

+0.5

Bank of Tokyo Mitsubishi UFJ

9.8

11.8

+2.0

Mitsubishi UFJ Trust andBanking

7.2

9.2

+2.0

Resona Bank

4.3

5.3

+1.0

Norinchukin Bank

4.0

4.0

0.0
-1.0
+9.7

Mitsui Sumitomo Insurance Co.

1.0

0.0

Total

91.0

100.7

Note: The amount of borrowings is rounded to the second decimal place.

21
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Appendix

Historical appraisal value and unrealized gain/loss of office building
Historical variation for appraisal value of office

Historical appraisal profit/loss ratio and amount of office
(¥M)

8%

4.4%

20,0004.4%

2010/10-10.3%-¥21,939M

15,000

4%
2%

15.0%

25,000

5.1%

6%10,000

1.7%

1.1%

10.0%

5.0%

5,000

0%
-2%

-3.4%

0.0%

0

-1.3%
-2.7%

-5,000-5.0%-10,000-4%-6%

profit/loss amount（left-axis）
profit/loss ratio（right-axis）-15,000-6.0%-10.0%-20,000-7.5%-15.0%-25,000-8%
2nd period（2006/4）

5th period（2007/10）

8th period（2009/4）

11th period（2010/10）

Note: Changes in appraisal value as of end of each period compared with the previous
period. The appraisal value for the previous period which was acquired during theeach period will be calculated based on the appraisal value at the time of acquisition.

Items of appraisal valuation⇒End of 8th
period(2009/4)

Change in rent (based on
mid/long-term appraisal value)-4.3%

Change in cap rates (average)

2nd period（2006/4）

-2.6%

-1.5%

0.2%
0.1%
0.0%
0.0%
(5.0%→5.2%) (5.2%→5.3%) (5.3%→5.3%) (5.3%→5.3%)

Note: Change in mid/long-term rent and cap rate (difference with value at the end of the previous
period) of office buildings end of each period. Based on acquisition price.
The mid/long-term rent and cap rate of buildings acquired in the each period are consideredthe value at the end of the previous period and calculated.

8th period（2009/4）

11th period（2010/10）

Note: Appraisal profit/loss amount subtracts the book value from appraisal value as of theend of each period. Appraisal profit/loss ratio divides the appraisal profit/loss amountby the book value as of the end of each period.

⇒End of 8th ⇒End of 9th ⇒End of 10th ⇒End of 11th
periodperiodperiodperiod（2009/4)(2009/10)(2010/4)(2010/10)⇒End of 9th ⇒End of 10th ⇒End of 11th
periodperiodperiod(2009/10)(2010/4)(2010/10)-4.4%

5th preiod（2007/10）

Appraisal profit/loss amount（\M）-4,499-16,907-20,280-21,939

Appraisal profit/loss ratio

-2.4%

-8.5%

-9.5%

-10.3%※ “Change in appraisal value as of end of each period compared with the previous
period”, ”appraisal profit/loss amount”, “appraisal profit/loss ratio” are based on officebuildings 11th period excepted buildings sold.

24
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Appraisal values and cap rates as of the end of 11th period
11th period
No

Property nameAppraiser

Acquistion
price

Appraisal
value

Book
value

vs
acquisition

Cap Ratevs10th
periodvs bookvalue

End of11th
Period11th period

vs

No

10th

Property nameAppraiser

Acquistion
price

periodAppraisal
value

Book
value

vs
acquisition

Cap Ratevs10th
periodvs bookvalue

End of11th
Periodvs10th
periodA

1

KDX Nihonbashi 313 Building

Daiwa

5,940

7,170

6,175

20.7%

-2.6%

16.1%

4.9%

0.0%

A

40 Toranomon Toyo Building

JREI

9,850

9,770

9,873

-0.8%

-0.4%

-1.0%

4.7%

0.0%

A

2

KDX Hirakawacho Building

Daiwa

5,180

4,910

5,153

-5.2%

-2.8%

-4.7%

4.8%

0.0%

A

41 KDX Shinjuku 286 Building

JREI

2,300

2,050

2,344

-10.9%

0.0%-12.6%

5.3%

0.0%

A

3

Higashi-Kayabacho Yuraku Building

JREI

4,450

5,190

4,426

16.6%

-4.9%

17.3%

5.1%

0.0%

A

42 Karasuma Building

Daiwa

5,400

5,020

5,451

-7.0%

-2.3%

-7.9%

5.6%

0.0%

A

4

KDX Hatchobori Building

Daiwa

3,680

3,380

3,385

-8.2%

0.6%

-0.1%

5.1%

0.0%

A

44 KDX Sendai Building

Daiwa

2,100

1,470

2,182

-30.0%

0.0%-32.7%

6.1%

0.0%

A

5

KDX Nakano-Sakaue Building

Daiwa

2,533

2,350

2,460

-7.2%

0.0%

-4.5%

5.5%

0.0%

A

45 KDX Roppongi 228 Building

JREI

3,300

2,160

3,445

-34.5%-1.8%-37.3%

5.0%

0.0%

A

6

Harajuku F.F Building

JREI

2,450

2,860

2,456

16.7%

-2.1%

16.4%

5.8%

0.1%

A

46 Hiei Kudan-Kita Building

Daiwa

7,600

7,640

7,607

0.5%

-2.2%

0.4%

4.8%

0.0%

A

7

FIK Minami Aoyama

JREI

2,270

2,210

2,264

-2.6%

-7.5%

-2.4%

5.0%

0.0%

A

47 KDX Shin-Yokohama 381 Building

JREI

5,800

4,250

5,927

-26.7%

0.2%-28.3%

5.9%

0.0%

A

8

Kanda Kihira Building

Daiwa

1,950

1,870

1,871

-4.1%

0.0%

-0.1%

5.1%

0.0%

A

48 KDX Kawasaki-Ekimae Hon-cho Building

JREI

3,760

3,410

3,854

-9.3%

2.7%

-11.5%

6.3%

0.0%

A

12 Portus Center Building

Daiwa

5,570

4,590

4,741

-17.6%

-1.3%

-3.2%

6.4%

0.0%

A

49 Nissou Dai-17 Building

JREI

2,710

1,640

2,659

-39.5%-0.6%-38.3%

5.8%

0.0%

A

13 KDX Kojimachi Building

JREI

5,950

4,250

5,697

-28.6%

7.3%-25.4%

4.6%

-0.4%

A

50 Ikejiri-Oohashi Building

JREI

2,400

1,600

2,475

-33.3%-1.2%-35.4%

6.2%

0.0%

A

14 KDX Funabashi Building

JREI

2,252

1,990

2,444

-11.6%

4.7%-18.6%

6.1%

-0.1%

A

51 KDX Hamacho Nakanohashi Building

JREI

2,310

1,690

2,377

-26.8%-6.6%-28.9%

5.6%

0.0%

A

15 KDX Hamacho Building

JREI

2,300

2,320

2,230

0.9%

5.0%

4.0%

5.5%

0.0%

A

52 KDX Kanda Misaki-cho Building

JREI

1,380

980

1,385

-29.0%-0.8%-29.3%

5.5%

0.0%

A

16 Toshin 24 Building

JREI

5,300

4,320

5,170

-18.5%-5.7%-16.4%

5.7%

0.0%

A

53 KDX Hakata-Minami Building

JREI

4,900

3,840

4,837

-21.6%-2.8%-20.6%

6.5%

0.0%

A

17 Ebisu East 438 Building

JREI

4,640

4,210

4,512

-9.3%

0.2%

-6.7%

5.2%

0.0%

A

54 KDX Kitahama Building

JREI

2,220

1,670

2,239

-24.8%-0.6%-25.4%

6.0%

0.0%

A

18 KDX Omori Building

JREI

3,500

3,640

3,411

4.0%

-3.7%

6.7%

5.5%

0.1%

A

55 Shin-toshin Maruzen Building

JREI

2,110

1,560

2,161

-26.1%-4.9%-27.8%

5.6%

0.1%

A

19 KDX Hamamatsucho Building

Daiwa

3,460

3,180

3,308

-8.1%

-6.2%

-3.9%

4.8%

0.0%

A

56 KDX Jinbocho Building

JREI

2,760

2,080

2,926

-24.6%-9.6%-28.9%

5.6%

0.2%

A

20 KDX Kayabacho Building

JREI

2,780

3,070

2,854

10.4%

6.6%

7.6%

5.5%

0.1%

A

57 KDX Gobancho Building

JREI

1,951

1,480

2,000

-24.1%-2.0%-26.0%

5.2%

0.0%

A

21 KDX Shinbashi Building

JREI

2,690

2,790

2,663

3.7%

0.0%

4.8%

4.7%

0.0%

A

58 KDX Nagoya Sakae Building

Daiwa

7,550

4,710

7,702

-37.6%

0.0%-38.8%

5.2%

0.0%

A

22 KDX Shin-Yokohama Building

JREI

2,520

2,430

2,433

-3.6%

-2.0%

-0.1%

6.0%

0.1%

A

59 KDX Iwamoto-cho Building

JREI

1,864

1,310

1,834

-29.8%-5.1%-28.6%

5.7%

0.0%

A

23 KDX Yotsuya Building

JREI

1,950

2,280

1,956

16.9%

-4.2%

16.6%

5.6%

0.0%

A

60 KDX Harumi Building

JREI

10,25010,600

9,922

3.4%

1.0%

6.8%

4.8%

0.0%

A

61 KDX Hamamatsucho Dai-2 Building

Daiwa

2,200

1,920

2,265

-12.7%-1.0%-15.2%

4.7%

0.0%

A

62 Koishikawa TG Building

JREI

3,080

3,240

3,165

5.2%

-0.6%

2.3%

5.2%

0.0%

A

63 Gotanda TG Building

JREI

2,620

2,570

2,714

-1.9%

-9.2%

-5.3%

5.5%

0.0%

A

64 KDX Nihonbashi 216 Building

JREI

2,010

1,990

2,003

-1.0%

-5.7%

-0.7%

5.0%

0.0%

A

66 KDX Shinjuku Building

JREI

6,800

7,010

6,880

3.1%

-5.5%

1.9%

4.6%

0.0%

190,138 212,077-10.1%-1.3%-10.3%

5.3%

0.0%

A
A
A
A
A
A

24 KDX Minami Semba Dai-1 Building
25 KDX Minami Semba Dai-2 Building
26 KDX Kiba Building
27 KDX Kajicho Building
28 KDX Nogizaka Building
29 KDX Higashi-Shinjuku Building

JREI
JREI
JREI
Daiwa
JREI
Daiwa

1,610
1,560
1,580
2,350
1,065
2,950

1,090
1,150
1,470
2,230
829
3,240

1,488
1,384
1,591
2,415
1,129
3,195

-32.3%-26.3%-7.0%-5.1%-22.2%
9.8%

0.9%
2.7%
0.7%
0.0%
-1.5%
0.0%

-26.7%-16.9%-7.6%-7.7%-26.6%
1.4%

5.8%
5.8%
6.0%
5.2%
5.5%
5.3%

0.2%
0.2%
0.3%
0.0%
0.3%
0.0%

A
A
A
A
A

30 KDX Nishi-Gotanda Building
31 KDX Monzen-Nakacho Building
32 KDX Shiba-Daimon Building
33 KDX Okachimachi Building

JREI
Daiwa
JREI
Daiwa

4,200
1,400
6,090
2,000

3,640
1,270
4,840
1,790

4,119
1,429
6,263
2,142

-13.3%-9.3%-20.5%-10.5%

-1.1%
0.0%
4.5%
0.0%

-11.6%-11.1%-22.7%-16.4%

5.2%
5.6%
5.2%
5.2%

Office Building Subtotal

211,461

-0.2%

B

3

Court Mejiro

JREI

1,250

950

1,194

-24.0%-1.8%-20.4%

5.6%

0.0%

B

18 Venus Hibarigaoka

JREI

1,800

1,420

1,875

-21.1%

3.6%-24.3%

7.1%

0.4%

B

19 Residence Charmante Tsukishima

JREI

5,353

4,480

5,110

-16.3%

1.8%-12.3%

6.1%

0.6%

B

34 Gradito Kawaguchi

JREI

1,038

959

1,024

-7.6%

0.6%

-6.4%

5.8%

0.0%

9,441

7,809

9,204

-17.3%

1.5%-15.2%

6.2%

0.4%

9,900

9,750

9,910

-1.5%

0.5%

-1.6%

4.7%

0.0%

0.0%
-0.2%
0.0%

A

34 KDX Hon-Atsugi Building

Daiwa

1,305

1,070

1,225

-18.0%

0.0%-12.7%

6.3%

0.0%

A

35 KDX Hachioji Building

Daiwa

1,155

821

1,304

-28.9%

0.0%-37.0%

5.9%

0.0%

A

36 KDX Niigata Building

JREI

1,305

868

1,465

-33.5%

5.3%-40.8%

7.3%

0.0%

A

37 KDX Ochanomizu Building

JREI

6,400

6,530

6,717

2.0%

-3.4%

-2.8%

4.9%

0.0%

A

38 KDX Nishi-Shinjuku Building

JREI

1,500

1,210

1,536

-19.3%-2.4%-21.2%

5.4%

0.1%

A

39 KDX Toranomon Building

JREI

4,400

3,420

4,829

-22.3%-2.3%-29.2%

4.6%

0.0%

B

Residential Subtotal

C

1

Frame Jinnan-zaka

JREI

C

2

KDX Yoyogi Building

JREI

C

Central Urban Retail Subtotal
Total

2,479

1,900

2,533

-23.4%-3.6%-25.0%

5.3%

0.2%

12,37911,65012,443

-5.9%

-0.2%

-6.4%

4.8%

0.0%

233,281

209,597 233,725-10.2%-1.2%-10.3%

5.3%

0.0%

Notes: 1. Acquisition prices, appraisal values and book values are rounded down to nearest ¥M. Ratios are rounded to the first decimal place
2. Total cap rates for each property type is the weighted-average based on acquisition price
3. The amount of KDX Shin-Yokohama 381 Building (existing tower) and KDX Shin-Yokohama 381 Building Annex Tower are indicatedas one property
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

25

Portfolio overview (office buildings)■Office Buildings （64 properties）

Occupancy at
end of 11th

No.

Name

Year built²

period（ % ） ³

Year built²

Occupancy
at end of
11th period

A-60

KDX Harumi Building

Chuo-ward, Tokyo

10,250

Feb-08

98.2%

A-61

KDX Hamamatsu Dai-2 Building Minato-ward, Tokyo

2,200

Apr-92100.0%

A-40

Toranomon Toyo Building

Minato-ward, Tokyo

9,850

Aug-62

95.4%

A-55

Shin-toshin Maruzen Building

Shinjuku-ward, Tokyo

2,110

Jul-90100.0%

A-46

Hiei Kudan-Kita Building

Chiyoda-ward, Tokyo

7,600

Mar-88

85.3%

A-64

KDX Nihonbashi 216 Building Cyuo-ward, Tokyo

2,010

Oct-06

75.0%

A-66

KDX Shinjuku Building

Shinjuku-ward, Tokyo

6,800

May-93

93.7%

A-33

KDX Okachimachi Building

Taito-ward, Tokyo

2,000

Jun-88100.0%A-37

KDX Ochanomizu Building

Chiyoda-ward, Tokyo

6,400

Aug-82100.0%A-57

KDX Gobancho Building

Chiyoda-ward, Tokyo

1,951

Aug-00

85.7%

A-32

KDX Shiba-Daimon Building

Minato-ward, Tokyo

6,090

Jul-86100.0%

A-8

Kabnda Kihara Building

Chiyoda-ward, Tokyo

1,950

May-93100.0%A-13

KDX Kojimachi Building

5,950

May-94

91.9%

A-23

KDX Yotsuya Building

Shinjuku-ward, Tokyo

Chiyoda-ward, Tokyo

1,950

Oct-89100.0%A-59

KDX Iwamoto-cho Building

Chiyoda-ward, Tokyo

1,864

Mar-08100.0%A-26

KDX Kiba Building

Koto-ward, Tokyo

1,580

Oct-92100.0%A-38

KDX Nishi-Shinjuku Building

Shinjuku-ward, Tokyo

1,500

Oct-92

87.6%

A-31

KDX Monzen-Nakacho Building Koto-ward, Tokyo

1,400

Sep-86100.0%A-52

KDX Kanda Misaki-cho Building Chiyoda-ward, Tokyo

1,380

Oct-92

86.9%

A-34

KDX Hon-Atsugi Building

Atsugi, Kanagawa

1,305

May-95100.0%
96.4%

Chuo-ward, Tokyo

A-47

KDX Shin-Yokohama 381 Building

Yokohama, Kanagawa

A-2

KDX Hirakawacho Building

A-17

Ebisu East 438 Building

Yokohama, Kanagawa
Chiyoda-ward, Tokyo
Shibuya-ward, Tokyo

A-3

Higashi-Kayabacho Yuraku Building Chuo-ward, Tokyo

A-39

KDX Toranomon Building

A-30

100.0%

5,800

Mar-88100.0%

5,300

Sep-84

72.7%

5,180

Mar-88100.0%

4,640

Jan-92

83.4%

4,450

Jan-87100.0%

Minato-ward, Tokyo

4,400

Apr-88100.0%KDX Nishi-Gotanda Building

Shinagawa-ward, Tokyo

4,200

Nov-92100.0%A-48

KDX Kawasaki-Ekimae Hon-Cho Building

Kawasaki, Kanagawa

3,760

Feb-85100.0%A-4

KDX Hatchobori Building

Chuo-ward, Tokyo

3,680

Jun-93100.0%A-18

KDX Omori Building

Ota-ward, Tokyo

3,500

Oct-90100.0%A-19

KDX Hamamatsucho Building

Minato-ward, Tokyo

3,460

Sep-99100.0%A-45

KDX Roppongi 228 Building

Minato-ward, Tokyo

3,300

Apr-89

65.1%

A-62

Koishikawa TG Building

Bunkyo-ward, Tokyo

3,080

Nov-89100.0%

Area

No.

Name

KDX Hachioji Building

Hachioji, Tokyo

1,155

Dec-85KDX Nogizaka Building

Minato-ward, Tokyo

1,065

May-91

78.1%

A-58

KDX Nagoya Sakae Building

Nagoya, Aichi

7,550

Mar-09

90.3%
93.9%

A-12

Portus Center Building

Sakai, Osaka

5,570

Sep-93

A-42

Karasuma Building

Kyoto, Kyoto

5,400

Oct-82

93.2%

A-53

KDX Hakata-Minami Building Fukuoka, Fukuoka

4,900

Jun-73

80.6%

A-54

KDX Kitahama Building

Osaka, Osaka

2,220

Jul-94

96.4%

A-44

KDX Sendai Building

Sendai, Miyagi

2,100

Feb-84

98.7%

A-24

KDX Minami Semba Dai-1 Building Osaka, Osaka

1,610

Mar-9383.1%

KDX Minami Semba Dai-2 Building Osaka, Osaka

1,560

Sep-93100.0%KDX Niigata Building

1,305

Jul-8365.4%

KDX Higashi-Shinjuku Building

Shinjuku-ward, Tokyo

2,950

Jan-90100.0%A-20

KDX Kayabacho Building

Chuo-ward, Tokyo

2,780

Oct-87100.0%

A-36

Office Building （61 properties）Subtotal

A-56

KDX Jimbocho Building

Chiyoda-ward, Tokyo

2,760

May-94

94.4%

Nissou Dai-17 Building

Yokohama, Kanagawa

2,710

Jul-91

94.9%

A-21

KDX Shinbashi Building

Minato-ward, Tokyo

2,690

Feb-92100.0%

A-63

Gotanda TG Building

Shinagawa-ward, Tokyo

2,620

Apr-8877.1%

A-5

KDX Nakano-Sakaue Building

Nakano-ward, Tokyo

2,533

Aug-92

96.5%

A-22

KDX Shin-Yokohama Building

Yokohama, Kanagawa

2,520

Sep-9074.0%

A-6

Harajuku F.F. Building

Shibuya-ward, Tokyo

2,450

Nov-85

A-50

Ikejiri-Oohashi Building

Meguro-ward, Tokyo

2,400

A-27

KDX Kajicho Building

Chiyoda-ward, Tokyo

100.0%

Sep-88

91.3%

大

2,350

Mar-9084.2%

KDX Hamacho Nakanohashi Building

Chuo-ward, Tokyo

2,310

Sep-8893.0%

KDX Hamacho Buuilding

Chuo-ward, Tokyo

2,300

Sep-93

93.9%

A-41

KDX Shinjuku 286 Building

Shinjuku-ward, Tokyo

2,300

Aug-89100.0%A-7

FIK Minami Aoyama Building

Minato-ward, Tokyo

2,270

Nov-88100.0%A-14

KDX Funabashi Building

Funabashi, Chiba

2,252

Apr-89

98.5%

93.3%

211,461

No.

Name

Location

Year built²

Occupancy
at end of
11th period

A-67

Kyodo Building（Ginza No.8）

Chuo-ward, Tokyo

4,300

Nov-91－

A-68

Kyodo Building（Honcho １chome)

Chuo-ward, Tokyo

4,000

Jan-84－A-69

KDX Kobayashi-Doshomachi Building

Osaka, Osaka

2,870

Jul-09－Avg 21.0 yrs－

Acquisition
Area

A-15

Niigata, Niigata■Acquisition of properties in the 12th period(2011/4)
Type

A-51

Price（\M）

A-35

A-29

A-49

Location

1

A-28

A-25

Other
Tokyo
Regional Metropolitan
Areas
Area

Tokyo Metropolitan Area

Toshin 24 Building

5,940

Apr-74

Type

Tokyo Metropolitan Area

KDX Nihonbashi 313 Building

Price（ \M）

Other Regional Areas

A-1

A-16

O ffi c e B u i l d i n g

Location

Acquisition

OfficeBuildings

Area

1

Office Building

AcquisitionType

As of December 13, 2010

Office Buildings（64 properties）Subtotal

Price（\M）

222,6311

Notes：1 Acquisition price is the purchase price for trust beneficiary interests etc. acquired by the Investment Corporation
2 Year built is the date of construction completion recorded in the land register. Average age subtotal is shown as theweighted-average portfolio age based upon acquisition prices with a base date of Dec.13, 2010, and is rounded
down to the nearest first decimal place. The weighted-average ager of the 70 properties held as of Dec.13, 2010 is
20.0 years(based on Dec 13, 2010).
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to the first decimal place.
Average occupancy ratio of 67 properties held as of Oct.31,2010 is 93.6%

26
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Portfolio overview(central urban retail/residential properties)
As of December 13, 2010

■Central Urban Retail Properties（2 properties）
LocationPrice（\M）1

Year built²

at end of
11th period（%）³

Frame Jinnan-zaka

Shibuya-ward, Tokyo

9,900

Mar-05100.0%KDX Yoyogi Building

Shibuya-ward, Tokyo

2,479

Aug-91

94.8%

12,379Avg 8.4 yrs

98.9%

Type

Area

CentralUrban
RetailTokyo
Metropolitan
Area

Acquisition
No.

Name

C-1
C-2

Central Urban Retail（2 properties）Subtotal

Reference: Historical cap rate（by asset・annualized base）■Residential Properties（4 properties）
Year built²

Occupancy
at end of
11th period

5,353

Jan-04100.0%

Area

No.
B-19

Residence Charmante Tsukishima Chuo-ward, Tokyo

Other
Regional
Areas

Residential

Type

Tokyo
Metropolitan
Area

Acquisition
Name

LocationPrice（\M）

1

B-3

Court Mejiro

Shinjuku-ward, Tokyo

1,250

Mar-97

95.2%

B-34

Gradito Kawaguchi

Kwaguchi, Saitama

1,038

Feb-06100.0%

B-18

Venus Hibarigaoka

Sapporo, Hokkaido

1,800

Mar-89

92.4%

9,441

Avg.10.4 yrs

95.6%

Residential（4 properties）Subtotal

Notes：1 Acquisition price is the purchase price for trust beneficiary interests etc. acquired by the Investment Corporation
2 Year built is the date of construction completion recorded in the land register. Average age subtotal is shown as theweighted-average portfolio age based upon acquisition prices with a base date of Dec.13, 2010, and is rounded
down to the nearest first decimal place.
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to the first decimal place.

7th

8th

9th

10th

11th

periodperiodperiodperiodperiodOffice Building

5.3％

5.5％

5.2％

5.1％

4.9％

Central Urban
Retail

4.8％

4.7％

4.6％

4.5％

4.5％

Residential

5.3％

5.2％

5.0％

5.2％

4.8％

Total

5.3％

5.4％

5.2％

5.1％

4.9％

Notes：1 . Each ratio are after deduction of fixed property tax in each period
2. Each ratio are rounded to the first decimal place■ ■Disposition of properties（1 office building and 1 residential property）in the 11th period (2010/10)
Area

OfficeBuildingTokyo
metropolitan
Area

Acquisition
Type

Residential

No.

Name

LocationPrice（\M）1

Disposition
Price（\M）

Dispositon
Date

A-9

KDX Shinjuku-Gyoen Building Shinjuku-ward, Tokyo

1,610

1,710

Sep-10B-25

Court Shin-Okachimachi Taito-ward, Tokyo

878

790

Oct-1027
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Emphasis on mid-sized office buildings in Tokyo Metropolitan Area
As of December 13, 2010

Office portfolio: 64 properties, with a total acquisition price of ¥222.6B

Composition of office portfolio

Tokyo 23 wards
46properties¥162.7B

Acquisition price（Tokyo Metropolitan
Area）
Acquisition price（Other Regional
Areas）

By acquisition priceCentral Tokyo1
37 properties¥139.4B

Niigata
1 property ¥1.3B

Miyagi1 property ¥2.1B

Osaka ・ Kyoto
6 properties ¥19.2B

Other 18wards
9properties¥23.3B¥2.5～7.5B accounts for 60.4%

Fukuoka
1 property ¥4.9B

Tokyo
Distance from the nearest
station(by walk, in minutes)

Chiba
1 property ¥2.2B

Aichi
1 property ¥7.5B

Kanagawa
6 properties ¥21.3B
Hachioji, Tokyo
1 property ¥1.1B

Notes：
Tokyo Metropolitan Area
1 Central Tokyo : Chiyoda, Chuo, Minato, Shibuya and Shinjuku
2 Acquisition price are rounded to the nearest ¥100M. Ratios indicate the total acquisition price of
Other Regional Areas
properties in each area in proportion to the total acquisition price for all properties combined
Total
and are rounded down to the first decimal place# ofproperties

Acquisition
Price
（¥B）

Ratio
（%）

54
10
64

187.5
35.0
2,226

84.2
15.7
100.0

Within 3 minutes walk: 61.2%
Within 6 minutes walk: 89.5%
Note: Amount is rounded down to the nearest million yen.
Percentages are rounded down to the first decimal
place.

28
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Results of asset replacement：focus on mid-sized office buildings
Disposition of properties / acquisition of mid-sized office buildings

Re-growth(2009/11～）

Financial crisis response（2008-2009/10）¾ Consideration balance of equity and debt

Office buildings
5 properties￥15.6B
Office buildings
3 properties￥11.1B

15

Disposition
Acquisition

Borrowing new loan
(3,5,7 years)￥+16.5B

Debt

-5 20

Disposition

EquityAcquisition office buildings

Acquisition 8 properties￥+26.7B

（￥B)
(億円)

10

Acquisition properties and FinanceIssuing new units￥+8.1B

ForwardCommitment

5Note: overview of acquisition properties and finance since 10th period(Rounded down less than￥1B)

0-5Reference:11th period (2010/10) disposition overview
Small-sized
Residential
office Regional
office8th period(2009/4)-10

9th period(2009/10)

KDX Shinjuku-Gyoen
Building（Office building）

Court ShinOkachimachi（Residential）

Disposition date

2010/9/30

2010/10/27

Acquisition price￥1.61B￥0.87B

Disposition price￥1.71B￥0.79B

Profit/ Loss￥+0.11B￥-0.06B

Small-sized
officeResidential
10th period(2010/4)

11th period(2010/10)

12th period(Present)

Note: The amounts are rounded down to the first decimal place

29
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Future acquisition strategy: Secure properties at an early stage
in the future by tokumei-kumiai investment②KDRM requests
KDX/KDA to originate
warehousing fund

Kenedix, Inc. /Kenedix Advisors Co., Ltd.

③KDX/KDA arranges tooriginate warehousing fund

Kenedix REITManagement①KDRM obtains
property information⑤Warehousing fund acquires
the subject real estate

KDX/KDA’s
Warehousing Fund

AM (KDX/KDA/Sponsors）

Lenders

Debt
Property
Equity④KRI invests in

Equity investor /Sponsors

tokumei-kumiai for acertain percentage

Revision of Regulations in August 2010
¾Newly established provision for warehousing fund (pre- acquisition)(Memorandum of Understanding)・Flexibly obtaining opportunities to acquire investment properties¾Newly established standards for investment in equity in tokumeikumiai (Japanese silent partnership) (Management Guidelines)⑦When disposing theproperties, opportunity toacquire such properties
shall be granted to KRI・Secure properties while considering the balance of fund procurement
・Diversify investment methods to secure profits of the portfolio
Standards for investment in equity in tokumei-kumiai①Total amount invested shall be up to 10% of total assets②Properties shall meet the investment criteria of KRI③Opportunity to acquire such property shall be granted to KRI when
disposing the properties

Kenedix Realty
Investment Corporation⑥KRI receives ashare of the profits

Merit for KRI
・Secure properties with a small financial burden
・Secure profits after leveraging through tokumei-kumiai
investment
・Secure future opportunities to acquire properties inadvance30
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Stable financial management : Borrowing list

Long-term borrowings

Current portion of long-term borrowings

Short-termborrowings

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

Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
Short-term borrowings subtotal

Balance Drawdown Last repayment
(\M)
date
date
2011/01/29
1,300 2010/01/29
2011/02/28
500 2010/02/26
2011/04/28
2,000 2010/04/30
2011/07/31
1,500 2010/07/30
2011/10/31
1,000 2010/10/29
6,300

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

3,500 2008/07/31

2011/01/31

Aozora Bank, Ltd
Aozora Bank, Ltd
The Chuo Mitsui Trust and Banking Co., Ltd.
Aozora Bank, Ltd
The Bank of Tokyo-Mitsubishi UFJ, Ltd
The Norinchukin Bank
Aozora Bank, Ltd.（1,500）、Mitsui Sumitomo Insurance Co., Ltd.（1,000）
The Chuo Mitsui Trust and Banking Co., Ltd(1,500）、Resona Bank., Ltd.
Mitsubishi UFJ Trust and Banking Corporation

2,000 2008/02/29
1,000 2008/06/30
1,250 2008/09/22
2,000 2008/07/15
2,000 2008/09/30
1,500 2007/04/17
2,500 2006/05/01
2,500 2009/04/30
1,000 2006/07/14

2011/02/28
2011/02/28
2011/03/22
2011/03/31
2011/03/31
2011/04/16
2011/04/30
2011/04/28
2011/07/13

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

3,500 2008/07/31

2011/07/31

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

1,500 2008/02/29
1,000 2008/09/01

2011/08/31
2011/09/01

Sumitomo Mitsui Banking Corporation（3,000）、The Chuo Mitsui Trust and Banking Co., Ltd.
（2,000）5,000 2008/03/31

2011/09/30

Aozora Bank.,Ltd
The Bank of Tokyo-Mitsubishi UFJ, Ltd
The Chuo Mitsui Trust and Banking Co., Ltd
The Norinchukin Bank
Current portion of long-term borrowings subtotal
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
The Chuo Mitsui Trust and Banking Co., Ltd.
Aozora Bank., Ltd
Resona Bank., Ltd.
Development Bank of Japan Inc.
The Bank of Tokyo-Mitsubishi UFJ, Ltd
Resona Bank., Ltd.
Development Bank of Japan Inc.
The Chuo Mitsui Trust and Bankig Co.,Ltd.
Aozora Bank., Ltd.
Resona Bank., Ltd.
Development Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
Resona Bank., Ltd.

3,500 2009/04/30
1,500 2010/10/26
1,000 2008/05/01
2,500 2006/12/01
38,7502,500 2008/01/10
470 2009/02/27
2,000 2007/04/02
2,000 2009/04/30
1,500 2008/06/30
940 2009/02/27
2,500 2010/10/29
500 2009/12/08
3,000 2008/06/30
1,000 2010/01/13
1,500 2010/02/18
500 2010/07/30
3,000 2006/09/01
960 2009/10/26
1,920 2009/10/30
500 2010/10/29

2011/10/31
2011/10/31
2011/11/01
2011/11/30

The Bank of Tokyo-Mitsubishi UFJ, Ltd.(1,500) 、 The Chuo Mitsui Trust and Banking
Co.,Ltd(800)、Aozora Bank., Ltd(400)The Bank of Tokyo-Mitsubishi UFJ, Ltd.(500) 、 The Chuo Mitsui Trust and Banking
Co.,Ltd.(200)、Aozora Bank., Ltd.(100)As of 11th period(2010/10)

2013/11/12

3Y
3Y

1,950 2010/04/02 2015/04/02(*1）
2015/11/12
2,000 2010/11/12
2015/11/12
1,000 2010/12/01
2016/04/30
5,000 2006/05/01
2017/11/12
2,300 2010/11/12
2017/11/12
700 2010/12/01
55,017100,067

No. ofproperties

44 properties¥51.8B(24.7％)

Total
Appraisalvalue¥157.8B(75.3％)

In addition to the above collateralized 44 properties, 3 properties(KDX Shin-Yokohama 381 Building, Kyodo Building(Ginza No.8)
and Kyodo Building(Honcho 1 chome) were collateralized in
Nov, 2010, when borrowed as new loan (¥9.5B).

2013/11/12

5,225 2010/02/18 2015/02/18(*1）

23 properties(*1)

Note1: The amount of KDX Shin-Yokohama 381 Building and KDX ShinYokohama 381 Building Annex Tower are indicated as one property
Note2: Ratio are rounded to the first decimal place

800 2010/12/01

Sumitomo Mitsui Banking Corporation（2,185）、Development Bank of Japan Inc.(1,615)、
The Chuo Mitsui Trust and Banking Co.,Ltd.（950）、Aozora Bank., Ltd.(475)Collateralized

Uncollateralized

2,700 2010/11/12

2014/01/31
3,700 2010/07/30
2014/07/31
3,700 2010/07/30
1,152 2010/01/29 2015/01/30(*1）

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation(1,200)、Resona Bank., Ltd.(800)
Sumitomo Mitsui Banking Corporation(800)、Resona Bank., Ltd(200)Development Bank of Japan Inc.
Development Bank of Japan Inc.
Development Bank of Japan Inc.
Long-term borrowings subtotal
Total

Reference: Summary of collateralized properties

2012/01/10
2012/02/29 (*1）
2012/04/02
2012/04/27
2012/06/30
2012/08/31(*1)
2012/10/31
2012/12/08
2012/12/28
2013/01/15
2013/02/18
2013/07/31
2013/08/31
2013/10/26(*1）
2013/10/30(*1）
2013/10/31

The Chuo Mitsui Trust and Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation

As of December 13,2010

5Y
5Y
7Y
7Y

Notes:
1 Repayment Method: repayment of every 6 months (Amortization)
2 The amount are rounded to the first decimal place

31
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

KRI Unitholders
Top 10 unitholders at end of 11th period（as of 2010/10/31）

Change in investment units by unitholders
Individuals and others
Other Domestic Co.
22.7

end of 1st

49.0

15.6

end of 2nd
end of 3rd

10.6

end of 4th

6.8# of units
held(unit)
35,46415.18%

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

27,132

11.61%The Nomura Trust and Banking Co., Ltd. (Investment Trust Acct.)

26,951

11.53%The Master Trust Bank of Japan, Ltd. (Trust Acct.)

11,6795.00%

Financial Inst.(Incl.Securities)
Foreign Co. and Individuals
12.4

47.0

8.5

48.0
46.5

6.4

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

16.0
29.0

6.8

Nam e

34.6

(%)

40.3

The Bank of NY Treaty JASDEC Account

7934

3.39%

BNP PARIBAS SECURITIES SERVICES LUXEMBOURG/JASDEC/HENDERSON HHF SICAVState Street Bank and Trust Company 505025

6,700

2.86%

4,305

1.84%

end of 5th

5.7

48.4

5.1

40.8

end of 6th

5.4

49.4

5.0

40.2

end of 7th

8.1

45.6

5.4

41.0

Deutsche Securities, Inc.

3,598

1.54%

end of 8th

10.8

42.5

1.3

45.4

The Chase Manhattan Bank N.A. London SL omnibus account

3,439

1.47%

end of 9th

8.2

43.1

1.2

47.5

State Street Bank and Trust Company 505223

end of 10th

9.9

38.1

2.1

49.9

Total

end of 11th

8.7

49.5

0%

20%

40%

1.9

40.0

60%

80%

100%

(Reference) Reporting of major unitholders# of units
held(unit)
Nomura Securities Co., Ltd.
2010/9/21
15,41014,715
Nomura Asset Management Co., Ltd.
695
Nomura Securities Co., Ltd.
Mizuho Asset Management Co., Ltd
2010/10/22
17,196
11,817
Mizuho Asset Management Co., Ltd.
5,379
Sinko Investment Trust Management Co., Ltd.
DIAM Co., Ltd
2010/10/20
17,106
17,106
DIAM Co., Ltd
The Sumitomo Trust and Banking Co.,Ltd2010/9/24
16,203
16,203
Nikko Asse Management Co., LTd.
Fidelity Investments Japan Limited
2010/4/22
16,02911,355
Fidelity Investments Japan Limited
4,674
FMR LLC
10,869ING Clarion Real Estate Securities LLC 2009/8/4

Name

Type of unitholders End of 11th (as of 2010/10/31)# of# of Units
Ratio(％)
Ratio(％)
Unitholders
held(unit)

Total
Note: Rounded to the first decimal place

6,707
50
105
181
7,043

95.2%
0.7%
1.5%
2.6%
100.0%

1.33%
55.79%

Note: Rounded down to the second decimal place

Note: Rounded to the first decimal place

Individual and Others
Financial Inst.(Incl.Securities co.)Other Domestic Co.
Foreign Co. and Individuals

3,115
130,317

20,266
8.7%
115,505
49.5%
4,367
1.9%
93,41240.0%
233,550 100.0%

Submitted on

Notes
1: Reports submitted from the PO on 2007/5/22 to 2010/10/22(excluding unitholders that have less than 10,000 units)
2: Total unitholders increased from 200,000 units to 233,550 units due
to PO on 2009/11/16

32
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Disclosure and IR activities
IR activities for Individual Investors
Disclosure using KRI website

Using KRI website in English /1on1 meetings

Opening communication page for individual investors

Main Items

IR activities for Domestic and International Investors

11th period（2010/10）
No. of access

Top page

45,881

List of portfolio

8,772

Press release

8,019

Disclosure materials

6,402

Updated information

5,321

DPU・Earning results

4,969

Others(occupancy rate etc.)

19,028「For Individual Investors」

Disclosure in English website on same day(Press release and Financial results )(Reference) No. of meetings(including conference call)10th period IR
Domestic institutional investors

47

Domestic regional investors

6

International investors（Europe）

6

International investors（US）

27

International investors（Asia）

31

Total

117

IR using web site

Media articles

Providing contents on Nikkei Web News as 「J-REIT special」

Publishing in Electronic-book 「J-REIT PULSE」(For individual and institutional investors)

IR seminar and large meeting for individual investors
Attending events follows including WEB seminar (No. of participants/around 650 people)
Events(organizers)

Date

Conference for International Investors
Events(organizers)

Date

Research for corporation on Web Seminar（Nikkei）

2010/9/29

PROPERTY CONFERENCE TOKYO 2010
（Nikko Cordial・Citi group）

2010/12/2

J-REIT Seminar for individual investors in autumn,2010（ARES and TSE）

2010/9/11

2010 Global Property Series - Tokyo（Macquarie Capital）

2010/12/6・7

Stock-Navigation Conference（Investor Networks）

2010/8/28

Deutsche Bank Japan Conference（Deutsche Securities）

2010/11/15・16

2010/7/3

Nomura Global Real Estate Forum 2010
（Nomura Securities）

2010/9/6・7

IR presentation by top management of listing company（Nikkei）

33
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

J-REIT market（Investors trend）
Financial Inst.

Trading Value by Investor Type (J-REIT)
Buy(left)(¥B)

Foreign Investors
Buy(left)(¥B)

Sell(left)

Net(right)

Sell(left)

Net(right)

40.0

40.0

30.0

30.0

20.0

20.0

10.0

10.0

0.0

0.0

-10.0

-10.0

-20.0

-20.0

-30.0

-30.0

40.0

120.0
100.0

30.0
80.0
20.0

60.0
40.0

10.0
20.0

-40.0

-40.0
2009/01

2009/04

2009/07

0.0

0.0
-20.0

2010/01

2010/04

2010/072010/10Investment Trust
Buy(left)

(¥B)

-10.0

2009/10Sell(left)

Net(right)

40.0

40.0

30.0

30.0

20.0

20.0

10.0

10.0

0.0

0.0

-10.0

-10.0

-20.0

-20.0

-30.0

-30.0

-40.0
-20.0

-60.0
-80.0

-30.0
-100.0-40.0-120.02009/01

2009/04

2009/07

2009/102010/01

2010/04

Source; Tokyo Stock Exchange（Data from 2009/1 to 2010/10）

2010/072010/10

-40.0

-40.0
2009/01

2009/04

2009/07

2009/102010/01

2010/04

2010/072010/1034
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

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

Volume(unit)

Volume11/11 after theannouncement for
acquisitons
Price：¥323,000

Price

6,000
Unit price（¥）

Trading Volume（Unit）
8,000

1,000,000

5,000

900,000

4,000

Follow-on Price¥873,180

7,000

2/17 after theannouncement for
acquisition
Price：¥249,700

10/5 BOJ announced
easy monetaly policy
Price：¥337,000円

340,000
320,000
300,000

Follow-on Price¥593,096

6,000

Liting Price¥580,000

Follow-on Price¥252,200

800,000

3,000

700,000

2,000

600,000

1,000

Price(¥)
360,000

280,000
Price : ¥255,000（at the biginning of this year)

260,000
240,000

5,000

4,000

500,000

220,0000

200,000

400,000
3,000
300,000

Note
1: Period 2010/01 /04~ 2010/11/29
2: Unit price is closing price

2,000
200,000(Reference) Global REIT yield gap
1,000
100,00000

7.0 (%)

Japan
UK
Singapore

6.0

US
Australia

2005/07/21 2006/02/01 2006/08/09 2007/02/20 2007/08/28 2008/03/12 2008/09/18 2009/04/03 2009/10/15 2010/04/27 2010/11/08

5.0

Note:
1.
2.

Period: IPO to 2010/11/29
Price :Closing price ( excluding over 8,000 trading volume (2008/10/20:19,728units)

4.0
3.0

・As of Dec 1st , 2011
Highest price（trading price）：¥988,000（2007/5/31）
Lowest price（trading price） ：¥100,300（2008/10/20）
・Average volume during 2010 ：849 units(2010/1/4～2010/11/29)

2.0
1.0
0.0
-1.0
09/9 09/10 09/11 09/12 10/1

10/2 10/3

10/4 10/5

10/6 10/7

10/8

10/9 10/10 10/11

Source：Created by KDRM

35
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Summary financials for 11th period - Income statement andCash flow statement
Comparison between 11th period (to Oct. 2010) and 10th period (to Apr. 2010)

Rental and other operating revenues

Rental revenues-real esate

11th period

2009/11/1
2010/4/30

2010/5/1
2010/10/31

Difference

(\M)

(\M)

(\M)

7,159

9

5,861

Basis for calculating cash distribution-21①Decrease of rental revenues ②Full revenues of KDX Shinjuku
Building
Decrease in rental revenues by sales of 2 properties in the 11th
period（￥）10th period

11th period

Ⅰ Retained earnings at the end of period

2009/11/1
2010/4/30
2,567,479,697

2010/5/1
2010/10/31
2,607,121,406

Ⅱ Total distribution

2,567,415,150

2,541,257,550(Distribution per unit)(10,993)(10,881)

Note

7,150
5,882

Ⅲ Voluntary retained earnings

Common area charges

1,267

1,298

31

Provision for reserve for reduction entry-

65,795,848

Other lease business revenue

917
243
560
113
8,067

1,082
242
742
98
8,242

165
-1
182
-15
175

Ⅳ Retained erarnings bring to next period

64,54768,008Due to seasonal variability of Electricity charges etc.

Gain on sale of KDX Shinjuku-Gyoen Building

Parking space rental revenues
Utility charge reimbursements
Miscellaneous
Total rental and other operating revenues A

-

116

116

8,067
801
508
648
110
167
1,477

8,358
804
634
648
149
140
1,440

291
3
126
39
-27
-37

3,714

3,817

103

Rental business profit（ A －B）

4,353

4,424

71

Net operating Income（ NOI）

5,830
-

5,864
64

34
64

433
180

458
182

25
2

Operating expenses

4,329

4,522

193

Operating income

3,738

3,835

97

Non operating income

15
818

4
879

-11
61

113

114

1

210

211

1

5

5

-

32

8

-24

The 2nd unit of investment securities issue expense w rite-off iscompleted
Deduction off the subject consumption tax according to the saleof property

Gain on sale etc.
Operating revenues
Property management fee
Utilities
Taxes
Repairs and maintenance cost
Others （*1）
Depreciation
Total expence related to rent business B

Loss on disposal of real estate
Asset management fee
Others （※２）（※1）

10th period

Interest expenses
Interest expense on investment corporation
bonds
Borrow ing related expense
Amortization of investment corporation bondissuance costs
Amortization of investment unit issuancecosts
Amortization of business commencement
costs
Other non-operating expenses

5

-

-

11

11

Non-operating expenses

1,185

1,231

46

Ordinary income

2,568

2,608

40

2,568
0
2,567

2,608
0
2,607

40
40

0
2,567

0
2,607

40

Income before income taxes
Income taxes
Net income

Retained earnings brought forw ard
Unappropriated retained earnings

Cash flow statement
Due to seasonal variability of electricity charges etc.

えIncrease in repair of w alls construction etc.
Decrease in fees and loss on retirement
Decrease in w rite-off completion of a part of assets

Net cash provided by operating activities
Net cash provided by investing activities
Net cash provided by financing activities
Loss on sale of Court Shin-okachimachi

Net increase in cash and cash equivalents

Increase in managed asset from 9th period to 10 period

Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Full costs of new borrow ing in 2010/2（¥M）

10th period
As of Apr. 30, 2010
(\M)
4,144

11th perios
As of Oct. 31, 2010
(\M)
6,664

-14,568
11,752-615-2,966

1,327
10,957

3,081
12,285

12,285

15,367

Accounting method for Property taxes・City planning taxes
Changed the accounting method for Property-related taxes from 11th period【Content of change】
These taxes are charged to rental expenses for the period, for which thepayment was made during the said period.
↓Changed the methods below
These taxes are charged to rental expenses for the period, for the portion ofsuch taxes corresponding to said period.
【Purpose for change】
Leveling the period profit and loss（⇒stabilizing the dividends）。
There is a bias of summing up amount of property-related taxes that are caused
by base as for the amount paid between fiscal periods. We will leveling theperiod profit and loss by the portion of such taxes corresponding to said period.

（*1） Other expenses: Insurance, trust fee etc.
（*2） Other operating expenses: Directors’ compensation, asset custody fees, administrative fees

Numbers showing differences is rounded

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

36

Summary financials for 11th period - Balance sheet
10th period

11th period

As of Apr. 30, 2010

As of Oct. 31, 2010（\ M）
13,580Current assets

（ %）
5.4

（\ M）
16,528Cash and bank deposits

7,299

10,416

Entrusted deposits

5,998

5,828

Other current assets

282

Fixed assets

237,910

Property, plant and equipment
Buildings

283
94.6

234,489

236,917

233,438

13,86913,660Land

29,104

29,104

Buildings in trust

58,58556,730Lands in trust

135,358

133,943

Intangible assets

286

286

285

285

1

1

Leasehold right
Right of using w ater facilities in trust
Investment and other assets

705

764

Leasehold and gurantee deposits

1111Long-term prepaid expenses

694

Deffered assets

75

（ %）
6.6

93.4

61

33

27

Investment unit issuance expenses

41

33

0.0

100.0

Current liabilities

39,02816

43,881

17.5

377

499

Short-term loans payable

37,05041,550

Other account payables

172

212

1,245

1,166

Derivative liabilities

12

7

Others183

445

Fixed liabilities

76,84831

71,466

Investment corporation bonds

12,00012,000Long-term loans payable

53,91849,017

Tenant leasehold and security deposit

1,593

1,547

Tenant leasehold security deposit in trust

9,324

8,902

Unappropriated retained earnings
Unrealized gain from deferred hedge transactions¥581,170+¥183

LTV at end of period

40.9%

40.9%

-0.1％

Unitholders’ equity to total
asset

53.9%

54.1%

+0.1%

70

67

-3

271,260.81㎡

267,737.33㎡-3,523.48㎡

94.4%

93.6%

-0.8%

Difference

Note

Sale of 2 properties
KDX Shin-Yokohama 381
Building is counted as 1 building

46

115,347

133,129

133,129

2,567

2,607

-7

Property, plant and equipment： -¥3,479M
Sale of 2 properties in 11th period

251,080

115,876¥580,987

Occupancy ratio at end of
period100.0

Liabilities

Unitholders’ equity pershare of common stocks

Total leasable floor

251,566

Total unitholders' capital

11th period（2010/10)

Number of properties at endof period

Total asset

Advanced received

10th period（2010/4)752
0.0

Investment corporation bond issuance costs

Accounts payables

Changes in Performance Valuation

Short-term loans payable： ＋¥4,500M（Increase in long-term loans payable due within one year）

28.5

Long-term loans payable： －¥4,901M（Decrease due to the increase in long-term loans payable due within one year）
45.9

-4

Equities

135,68953.9

135,732

54.1

Toal liabilities and unitholders' equity

251,566100.0

251,080

100.0

37
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

(Reference data 1) Office building market environment
１．23 wards of Tokyo: rent levels for large buildings and medium-sizedbuildings.

２．Break down of office buildings by GFA (tsubo)

(%)

110

Rent for medium-sizedbuilding is less volatile
than large building

Large building
Medium-sizedbuilding

100

500-3,000 tsubo
28.6%

90

Broad stock of mid-sized
office buildings

8070
Note： Large building is a building with a gross floor area of 3,000 tsubo or more, while
medium-sized building is a building with a gross floor area of 1,000 to 3,000 tsubo
Source：Created by KDX based on the data complied by CBRE（the latest values as of
2010/9）３．Changes in the offered rent and vacancy ratio in Central Tokyo

Note： The above data covers rental office buildings located in Tokyo’s central 5 wards that weresurveyed by CB Richard Ellis Research Institute. The above data may not include the data ofall properties in the said 5 wards.
Source： Survey conducted by CB Richard Ellis Research Institute based on KRI’s request “Macromarket survey of Tokyo’s 5 wards” (as of Mar 31,2007)

４．Changes in rent levels by region（¥1,000/tsubo）

Monthly data

25
Tokyo

Osaka

Fukuoka

Nagoya20¥17,639/tsubo
15

10¥12,214/tsubo¥11,146/tsubo¥9,553/tsubo

5

Note： Survey covers buildings with more than 100 tsubo in Tokyo’s central 5 wards (Chiyoda, Chuo, Minato,
Shinjuku, Shibuya)
Source：Miki Shoji “Latest Office Building Markets in Tokyo’s central 5 wards” （the lates values as of 2010/10）

2002 2003 2004 2005 2006 2007 2008 2009 2010
Note： Targeting the properties with a gross floor area of 100 tsubo or more in Tokyo’s central 5
wards (Chiyoda, Chuo, Minato, Shinjuku, and Shibuya)
Source： Created by KRI based on the data complied by Miki Shoji （the latest values as of 2010/10）

38
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

(Reference data 2) About Tokyo Metropolitan Area
２．Population transition of Tokyo

１．Economic foundation etc. of Tokyo（Timing）（Item）

Japan

Tokyo

FY2007

Total production（Nominal ＧＤＰ)

¥515,651.0B¥92,300.5B

2006

No. of office

5,910,000

690,000（10 thousandsof persons）

1,300
1,258
1,250
1,206

2006

No. of employee

58.63M

8.70M

1,200

October 1,
2008

Total Population

127.69M

12.83M

1,150

October 1,
2008

Population of
productive age（15-64years old）

82.30M

8.72M

Source： Created by KDRM based on the data complied by “Kurashi to toukei 2009(Life andstatistics 2009)” on the Tokyo metropolitan government website

３．Gross Metropolitan Products estimate（2008）

Source: UK Economic Outlook November 2009, PricewaterhouseCoopers
Note： Figures are calculated by PricewaterhouseCoopers at PPP

1,177

1,100
1995

2000

2005

Source：Created by KDRM on the data complied by Ministry of Internal Affairs and Communications
Statistics Bureau, “Japan Statistical Handbook”

４．No. of Headquaters of Fortune 500（2009）

Source: Fortune Global 500, 2009, Fortune Magazine

39
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Management structure of Asset Management Company
Asset Management Company’Company’s decisiondecision-making process
Deliberation &Resolution

Preview

Deliberation &Resolution

Resolution/Reporting

Creation of management guidelines
Approval for transactions withinterested parties

Corresponding
divisionAssetmanagement
committee

ComplianceofficerApproval for transactions outside ofmanagement guidelines
Approval for transactions that follow
management guidelines excluding thosewith interested parties

Compliancecommittee(including outside
member)Resolution
Board ofDirectors
Reporting< Reference >Asset management company’company’s management fee structure

Rules on transactions with interested parties■ Asset management fee

 Transactions with interested parties¾ Management fee I : 0.15% of total assets¾ Asset acquisition: Must not acquire properties for more than appraised price(except for properties pre-acquired by Kenedix Inc. pursuant to the MOU)
¾ Asset disposal: Must not sell properties for less than appraised price＜Reference＞
Reference＞
Meetings held by the various committees, Board of Directors of thethe Asset
Management Company / Investment Corporation
6th
period7th
period8th
period9th
period10th
period11th
periodCompliance committee

8

9

8

8

10

7

Asset management
committee

38

52

44

36

39

32

Board of directors

7

10

8

10

12

11

Board of directors ofInvestment Corporation

7

7

8

8

8

8

¾ Management fee II : 3.0% of distributable amount each fiscal period¾ Acquisition fee: 0.5%of acquisition price(0.25% if interested parties)¾ Disposition fee: capped at 0.5% of transfer price■ Property management fees
¾ Rental management fee: 2% of rent revenues + 2% of operating
revenues from the property (after deducting operating expenses
and before deducting depreciation)¾ Management transfer fee: amount determined in proportion to
the acquisition/sale price(e.g. ¥1-3B → ¥2M, ¥5-10B → ¥2.4M）¾ Construction supervision fee: amount determined in proportion
to the construction costs(e.g. ¥1-5M →5%, ¥10-100M → ¥450,000＋3%)

40
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Change in shareholders of AM and Memorandum of Understanding
Memorandum of Understanding (revised in Aug. 2010)

Unitholders

Kenedix REIT Management, Inc.
(the Asset Management Company)
90% Investment

KDX/KDA Private funds

KDX/KDA’s
warehousing fundWarehousing function
by KDX

Entrust asset
management

Corporate sector(J-REIT)

Construction
companies anddevelopers

Real estate fund

Kenedix Realty Investment Corporation

Financial institutions

Investment

Properties held
by KDX (incl.
development projects)

Kenedix, Inc./
Kenedix Advisors Co., Ltd.

Real estate market

Brokerage

Structure of the Investment Corporation

Original network of theAsset Manager
10%
Investment

Support-line

Kenedix Asset Management, Inc.
Potential acquisition channels
15％ Investment
85%
Investment

MAX-REALTY
15％
35％
Investment Investment

Kenedix, Inc.

Sumitomo
XYMAX
Mitsui Banking
Corporation
Co. and others

ITOCHU
Corporation

Note:
MAX-REALTY is an asset management company invested by
XYMAX Corporation, Sumitomo Mitsui Banking Corporation andothers, based on the concept of “combining real estate and financeconsulting knowledge in to one.”

Kenedix REITManagement, Inc.
(Asset Manager)

Asset Management

Kenedix Realty
Investment Corporation(the Investment
Corporation)

41
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Kenedix REIT Management, Inc. -Organizational chart
3 Auditors (part-time)
Haruo Funabashi, Kenichi Yamasaki,
Ninji Hayashi♦ After joining the Ministryof Finance, he served ascommissioner of Tokyo
Customs, Deputy
Commissioner of the
National Tax
Administration, Secretary
Haruo Funabashi General of the Securities
and Exchange
AuditorSurveillance(part-time)
Commission, Director
General, Minister’s
Secretariat of the
National Land Agency
before joining Kenedix as
an auditor

Major members

Shareholders’meeting♦

Auditors
Board ofdirectors♦

Compliance officer

Taisuke Miyajima
CEO & President

Yuuji Kamimura

Compliancecommittee

Asset management
committee♦

Worked for c.7 years for Chuo Mitsui Trust andBanking（Property Sales Department, Property
Investment Advisory Department, Asset Finance
Department）♦

Worked for Cititrust & Banking before Joining
Kenedix, Inc．

♦
Koju Komatsu
General Manager,
Investment Management
Division

Representative
director
Taisuke Miyajima♦♦

Investment
management div.

Property
management div.

Financialplanning div.

Business
administration div.

♦ Property
acquisition
anddisposition♦ Researchand Analysisof real estatemarkets

Asset
Management
group

Property
Management
group♦Property
management♦ Property
leasing♦ Property♦Assessment
managementof property
management/riskmanagement

Engineering
group

IR
group

♦Construction ♦ Investor
Relationsmanagement
activities

Finance andaccounting
group

♦

Business
administrationgroup♦ Formulation ♦Runningof budget,unitholders’ andfinancialdirectors’
statements,
meetings♦ Negotiations disclosure
with♦Administration/
regulatory♦ Procurement Accounting/agencies and of funds
Human Resources
concerned
bodiesProperty appraiser

Worked for Asahi Urban Development Corporation,
Nihonjisho, others before he joined Kenedix
Executive Officer & General Manager of REITManagement Division, Kenedix Advisors before joining
Kenedix REIT Management

Masashi Ohwa
Director & General Manager,
Property Management Division♦

Asset
Investment
group

Worked for Mitsubishi Trust and Banking (debt
capital market group, Los Angeles branch). Seven
years of experience in real estate investment advisorydivision after joining Kenedix, Inc.
Transferred to Kenedix REIT Management to become
CEO and president

Worked for 12 years at Chuo Mitsui Trust andBanking, where he was responsible for securitization
Joined Kenedix, Inc. after 4 years of experience invarious securitized paper investments at Sumitomo
Life Insurance

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

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

Yuuji Kamimura
Compliance Officer

42
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

Overview of Kenedix Realty Investment and Global REIT market
Overview of Kenedix Realty Investment Corporation
Listing Date

July 20, 2005

Listing Market

Real Estate Investment Trust Market of the Tokyo Stock
Exchange

Ticker Code8972

Fiscal Period
Asset Management
Company
Shareholders of AssetManagement Company（Reference）Market size of Listing REIT in the World（March 31, 2010）
MarketCapitalization

No. of Listing
REIT

United States

275,797

142

April 30th, October 31th

Australia

64,87561

Kenedix REIT Management, Inc.

France59,49246

United Kingdom

30,16920

Japan

29,15138

Canada21,15131¥244.4B （Total of acquisition price）

Singapore

19,05921

70properties （Office buildings 64 properties）

Netherlands

11,127

6

Hong Kong

9,151

7

Bergium

6,130

15

Kenedix Asset Management, Inc. 90％
ITOCHU Corporation 10％

Portfolio （Asset size, Number of properties as of December 13, 2010）
Asset size
No. of properties
Occupancy rate at end of
period

93.6％ （as of October 31, 2010）

Financial Results （as of October 31, 2010）

Source： ARES「The Real estate securitization Handbook 2010-2011」

Total asset¥251.0B

140

Debt¥102.5B

120

Total debt/Total asset

40.9％

RatingA（JCR)【 REIT Index by country： January 2008＝ 100】

100

80

Information of units （as of October 31, 2010）
60

Number of units outstanding 233,550units
Market Capitalization¥74.6B（Unit Price ¥319,500: Last price of October 29）

40

20

BPS

¥581,170

TSE REIT
Index
US REITIndex
UK REITIndex
AU REITIndex
ST REIT Index

0
08/1 08/3 08/5 08/7 08/9 08/11 09/1 09/3 09/5 09/7 09/9 09/11 10/1 10/3 10/5 10/7 10/9 10/11

Source： Created by KDRM based on the data complied
by Bloomberg
The contents are provided solely for informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products. Please see disclaimer in the final page of this documents.

43

Disclaimer
The contents of this document, including summary notes, quotes, data and other information,
are provided solely for informational purposes and not intended for the purpose ofsoliciting investment in, or as a recommendation to purchase or sell, any specificproducts.
Please be aware that matters described herein may change or cease to exist without priornotice of any kind. This document contains forward-looking statements and anticipationsof future results, based on current assumptions and beliefs in light of currently available
information and resources. Risks and uncertainties, both known and unknown, including
those relating to the future performance of the real estate market in Japan, interest rate
fluctuations, competitive scenarios, and changing regulations or taxations, may cause
Kenedix Realty Investment Corporation (KRI)'s actual results, performance, achievements
and financial performance to be materially different from those explicitly or implicitly
expressed in this document.
With respect to any and all terms herein, including without limitation, this document, theinformation provided is intended to be thorough. However, no absolute assurance orwarranties are given with respect to the accuracy or completeness thereof.
Neither KRI nor Kenedix REIT Management (KDRM) shall be liable for any errors,
inaccuracies, loss or damage, or for any actions taken in reliance thereon, or undertake
any obligation to publicly update the information contained in this document after the dateof this document.

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