Kenedix Retail REIT Corporation (3453)
Translation of Japanese Original

FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED MARCH 31, 2016 (REIT)(October 1, 2015 to March 31, 2016)
May 19, 2016
Kenedix Retail REIT Corporation (“KRR”) is listed on the Tokyo Stock Exchange with the securities code number 3453.
(URL http://www.krr-reit.com/en/)
Representative:
Akihiro Asano, Executive Director
Asset Management Company: Kenedix Real Estate Fund Management, Inc.
Representative:
Ryosuke Homma, CEO and President
Inquiries:
Koichiro Nobata, General Manager of Planning Department, Retail REIT Division
TEL+81-3-5623-3868
Planned submission of semiannual securities report:
Planned start of distribution payments:
Preparing presentation material:
Hold a financial brief meeting:June 29, 2016
June 14, 2016
Yes
Yes (for analysts and institutional investors)(Amounts are rounded down to the nearest million of yen)

1．PERFORMANCE FOR THE FISCAL PERIOD ENDED MARCH 31, 2016 (October 1, 2015 to March 31, 2016)(1) Business Results(Percentages show period-on-period changes)
Fiscal period ended
March 31, 2016
September 30, 2015

Operating Revenues
Millions of Yen
5,541
5,103

%
8.6
-

Operating Income
Millions of Yen
2,826
2,463

%
14.7
-

Ordinary Income
Millions of Yen
2,428
1,939

%
25.2
-

Net Income
Millions of Yen
2,427
1,933

%
25.6
-

Ordinary Income to Operating
Revenues
Fiscal period ended
Yen
%
%
%
March 31, 2016
6,846
3.5
1.9
43.8
September 30, 2015
11,5153.3
2.0
38.0
Note 1:
Although the accounting period for KRR’s fiscal period ended September 30, 2015 includes 363 days from October 3, 2014 to September 30, 2015, its substantial asset
management period covers only 233 days from February 10, 2015 to September 30, 2015.
Note 2:
Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during the period. Net income per unit for
the fiscal period ended September 30, 2015 was ¥7,434, if calculated based on the day-weighted average number of investment units outstanding during the period
assuming the beginning date of the fiscal period is February 10, 2015, the day that the asset management actually commenced (260,034 units).
Note 3:Return on net assets and ordinary income to total assets for the fiscal period ended September 30, 2015 are calculated using the average amount of net assets and total assets
as of February 10, 2015, the day that the asset management actually started, and as of September 30, 2015.
Note 4:The purpose of the percentages of operating revenues, operating income, ordinary income and net income is to show changes from the previous period. However, noapplicable figures are shown for the period ended September 30, 2015, as the reporting period was the first fiscal period.
Net Income per Unit

Return on Net Assets

Ordinary Income to Total Assets(2) Distribution
Distributions per
Total Distributions
Distributions in
Total Distributions inDistribution Ratio
Unit (Excluding(Excluding Excess of
Excess of Earnings
Payout Ratio
Excess of Earnings
to Net Assets
Excess of Earnings)
Earnings)
per Unit
Fiscal period ended
Yen
Millions of Yen
Yen
Millions of Yen%
March 31, 2016
6,834
2,427
12
4
100.0
September 30, 2015
7,414
1,933
0
0
100.0
Note 1:
Total distributions in excess of earnings for the period ended March 31, 2016 account for the distributions in regard to the allowance for temporary adjustment.
Note 2:
Due to the issuance of new investment units, the payout ratio is calculated as following method (rounded to the nearest tenth).
Payout Ratio = Total Distributions (Excluding Excess of Earnings) /Net Income × 100

%
3.0
3.5

(3) Financial Position
As ofMarch 31, 2016
September 30, 2015

Total Assets
Millions of Yen
150,009108,382

Net Assets
Millions of Yen
80,034
59,790Cash Flows fromOperating Activities
Millions of Yen
4,570
1,152

Cash Flows from
Investing Activities
Millions of Yen(38,295)(88,993)

Net Assets to Total Assets
%
53.4
55.2

Net Asset Value per Unit
Yen
225,291
229,301

Cash Flows from
Financing Activities
Millions of Yen
36,82995,991

Cash and Cash Equivalents
at the End of the period
Millions of Yen
11,2558,150(4) Cash Flows
Fiscal period ended
March 31, 2016
September 30, 2015

This is an English-language translation of the original Japanese announcement on our website released on May 19, 2016. However, no assurance or warranties are given with respect tothe accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of discrepancies between this translation and the Japanese original.
1

Kenedix Retail REIT Corporation (3453)
2．EARNINGS FORECASTS FOR THE FISCAL PERIODS ENDING SEPTEMBER 30, 2016 (April 1, 2016 to September
30, 2016) AND MARCH 31, 2017 (October 1, 2016 to March 31, 2017)
Operating
Revenues(Millions of
Yen)
%
6,392
15.4
6,365
(0.4)

Operating Income(Millions of Yen)

Ordinary Income(Millions of Yen)

Net Income(Millions of Yen)

(Percentages show period-on-period changes)
Distributions perDistributions inDistributions per
Unit (Excluding
Excess of
Unit (Including
Excess ofEarnings per
Excess ofEarnings)
Unit
Earnings)
Yen
Yen
Yen

Fiscal period ending%%%
September 30, 2016
2,943
4.1
2,475
1.9
2,472
1.8
5,852
March 31, 2017
2,957
0.5
2,488
0.5
2,485
0.5
5,884
Reference:
Forecasted net income per unit (Forecasted net income / Forecasted average number of investment units during period)

13
13

5,865
5,897

For the fiscal period ending September 30, 2016: ¥5,958 For the fiscal period ending March 31, 2017: ¥5,990
Distributions per unit are calculated based on the number of investment units issued and outstanding totaled 422,250 as of today.

Note :*OTHER(1) Changes in Accounting Policies/Changes in Accounting Estimate/Retrospective Restatement(a) Changes in accounting policies accompanying revisions to accounting standards: None(b) Changes in accounting policies other than (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(2) Number of Investment Units Issued and Outstanding (including treasury investment units)(a) Number of investment units issued and outstanding at the end of the period (including treasury investment units)
As of March 31, 2016: 355,250 units
As of September 30, 2015: 260,750 units(b) Number of treasury investment units at the end of the period
As of March 31, 2016: 0 units
As of September 30, 2015: 0 units(Note) Please refer to “Per Unit Information” on page 25 for the number of investment units used as the basis for calculating net income per unit.
* Status of audit procedures
As of the time of disclosure of this financial report, audit procedures for the financial statements pursuant to the Financial Instruments and Exchange Act of Japan are incomplete.
* Remarks on appropriate use of forecasts of performance and other special notes
Forward-looking statements presented in this financial report, including forecasts of performance, are based on information currently available to KRR and on certain assumptions KRR
deems to be reasonable. As such, actual operating and other results may differ materially from these forecasts as a consequence of numerous factors. The above-mentioned forecasts are
based on “Assumptions for the Forecasts of Financial Results for the Fiscal Periods Ending September 30, 2016 and March 31, 2017” on page 10 for calculation, and our judgment as of
May 19, 2016. Actual operating revenues, operating income, ordinary income, net income, distributions per unit and distributions in excess of earnings per unit may vary according tochanges in market conditions. These forecasts do not guarantee the distribution amount.

This is an English-language translation of the original Japanese announcement on our website released on May 19, 2016. However, no assurance or warranties are given with respect tothe accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of discrepancies between this translation and the Japanese original.
2

Kenedix Retail REIT Corporation (3453)
1. KRR and Related Corporations
As there have been no significant changes from the “Management structure of KRR” described in the Securities Registration Statement(submitted on December 24, 2015; prepared in Japanese only), the disclosure is omitted.

2. Investment Policies and Status of Asset Management(1) Investment Policies
As there have been no significant changes from policies described in “Investment Policy,” “Investment Properties” and “DistributionPolicy”
in the Securities Registration Statement (submitted on December 24, 2015; prepared in Japanese only), the disclosure is omitted.
(2) Status of Asset Management(Overview of the Period ended March 31, 2016)i) Transition of KRR
KRR was established on October 3, 2014, under the Act on Investment Trusts and Investment Corporations of Japan (the “Investment
Trust Act”). On October 30, 2014, KRR was registered with the Director-General of the Kanto Local Finance Bureau (registration
number: Director-General of the Kanto Local Finance Bureau No. 97). KRR was listed on the Real Estate Investment Trust Securities (JREIT) Market of Tokyo Stock Exchange, Inc. (the Tokyo Stock Exchange) (Securities code: 3453) on February 10, 2015. Subsequently,
KRR raised funds through public offerings, including an international offering. As a result, the number of investment units issued at the endof the period ended March 31, 2016 was 355,250 units.
KRR seeks to invest primarily in neighborhood, community and other shopping centers that cater to the day-to-day needs of local area
customers and have stable demand from retailers and customers, in order to provide stable investment returns over the long term.
Sponsored by Kenedix, Inc., a leading, independent real estate asset management company, KRR entrusts its asset management andinvestment operations to Kenedix Real Estate Fund Management, Inc. (“KFM”), with the following strategies.
Note:

For our management purposes and ease of classification, we define neighborhood, community and other shopping centers for daily needs as retailproperties that generally have the following characteristics:
a. Retail trade area of approximately a one to ten kilometer radius (and generally, a three to five kilometer radius), with customers predominantly fromlocal areas surrounding the retail property
b. Operational capacity to accommodate certain daily local retail needs and strong customer traffic on both weekdays and weekends
c. Composed of various specialty stores to meet a range of day-to-day needs such as groceries,clothing and other daily goods and servicesii) Investment Environment
There were signs of an economic rebound in Japan with recoveries in corporate earnings under Abenomics. However, real GDP growth(2nd preliminary estimate) in the fourth quarter of 2015 was negative 0.3%, a return to the negative zone following a positive figure in theprevious quarter due to weak consumer spending and decline in exports resulting mainly from economic slowdown in developing
countries.
As for Japan’s retail market, disparities among the retail market are seen as general merchandize stores (GMS) are reported to be struggling,
but supermarkets and drugstores are performing well.
In the financial environment, Nikkei 225 Index fell sharply entering into 2016 due to global market events such as economic slowdown in
China and fall in price of oil leading to unstable effects, including appreciation of yen. On the other hand, interest rates have been declining
following the introduction of negative interest rate policy by the Bank of Japan in January 2016. As funds flowed into the J-REIT market
after the policy change, especially from foreign investors, the TSE REIT Index rallied to the 1,900 level in March 2016. In the real estatemarket, J-REITs continue to purchase a substantial number of properties because of monetary easing and brisk equity raising activities by
J-REITs.

3

Kenedix Retail REIT Corporation (3453)
iii) Management Performance(A) Acquisition of Assets
KRR acquired and started the operations of the following trust beneficiary interests in real estate (13 properties acquired on October 2,2015 with total acquisition price of 37,920 million yen and one property acquired on January 21, 2016 with acquisition price 1,505 millionyen). In addition, KRR completed an additional acquisition of a new building through a property expansion within Roseo Mito (acquisition
price of 371 million yen) on November 26, 2015. As a result, the portfolio at the end of the period under review (March 31, 2016) consists
33 properties with the total acquisition price of 131,639 million yen.
The below is property portfolio of KRR as of September 30, 2015.
AcquisitionPrice(million yen)
(Note 2)Acquisition Date

Saitama, Saitama

4,815

October 2, 2015

K’s Denki Shonan-Fujisawa (Land)

Fujisawa, Kanagawa

3,169

October 2, 2015

NSC

Unicus Kamisato (Land)

Kodama-gun, Saitama

3,000

October 2, 2015

T-12

NSC

Unicus Konosu (Land)

Konosu, Saitama

1,700

October 2, 2015

T-13

SM

Inageya Yokohama Minamihonjuku (Land)

Yokohama, Kanagawa

1,442

October 2, 2015

T-14

SM

Gourmet City Chiba-Chuo

Chiba, Chiba

760

October 2, 2015

O-5

Urban Station-Front SC

Carino Esaka

Suita, Osaka

6,555

October 2, 2015

O-6

Urban Station-Front SC

COMBOX Komyoike

Izumi, Osaka

6,450

October 2, 2015

O-7

SM

Hankyu Oasis Hirakatadeguchi

Hirakata, Osaka

1,280

October 2, 2015

O-8

SS

Welcia Kishiwadakamori (Land)

Kishiwada, Osaka

487

October 2, 2015

O-9

SM

Life Nishi-Tengachaya

Osaka, Osaka

1,505

January 21, 2016

R-1

NSC

Roseo Mito (Note 3)

Mito, Ibaraki

371

November 26, 2015

R-4

NSC

Ashico Town Ashikaga

Ashikaga, Tochigi

4,180

October 2, 2015

R-5

NSC

Yorktown Shinden-Higashi

Sendai, Miyagi

3,252

October 2, 2015

R-6

SM

Kasumi Technopark Sakura

Tsukuba, Ibaraki

830

October 2, 2015

Property
number

Property
Type(Note 1)

T-9

NSC

Super Viva Home Iwatsuki (Land)

T-10

SS

T-11

Location(City or Ward,
Prefecure)

Property name

Total
Note 1:39,796

Properties are categorized into the following five types of retail properties for daily needs: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC(Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center) and SS (Specialty Store).
We categorize these properties generally into five separate groups as follows.
Type of Neighborhood, community andFeatures
Trade areaother shopping centers for daily needs
Shopping centers with a supermarket as an anchor or coretenant and several specialty store three to five
NSC (Neighborhood Shopping Centers)
tenants
kilometer
SM (Supermarkets)

Stand-alone stores that primarily provide groceries, with a retail trade area

threekilometer

CSC (Community Shopping Centers)

Larger shopping centers than NSC, which have a supermarket as an anchor or core tenantin addition to specialty store tenants

five to ten
kilometer

Shopping centers that are located in the immediate vicinity of an urban public
three to tentransportation station, which take advantage of stable foot traffic
kilometer
Single- or multiple-tenant shopping centers that specialize in a single type of merchandise
one to ten
SS (Specialty Stores)
or service, such as drug stores, convenience stores,health clubs or electronic appliancekilometer
stores“Acquisition price” represents the purchase price of each trust beneficiary interest specified in purchase agreement in relation to the acquisition of each property(excluding acquisition costs, adjustment in property tax and city-planning tax, and consumption tax; and rounded down to the nearest one million yen).
KRR acquired the secondhand shop building through a new building construction (property expansion). Acquisition price represents the payment price (excluding
expenses and taxes and rounded down to the nearest million yen) on the construction contract and construction design/supervision outsourcing contracts related toconstruction of the building.
Urban Station-Front Shopping Centers

Note 2:
Note 3:(B) Management and Operation of Assets
KFM provides property management services for all of the properties owned by KRR at the end of the period under review (March 31,2016). By using the same company for both asset management and property management services, KRR aims to build stronger
relationships with tenants and increase returns from its portfolio. Furthermore, by implementing retail property management that better
4Kenedix Retail REIT Corporation (3453)
reflects the needs of our tenants, KRR strives to accumulate know-how and improve tenant satisfaction. KRR invests primarily inneighborhood and community shopping centers that cater to the day-to-day needs of customers. The portfolio is diversified in terms ofproperties, tenants and other characteristics with a goal to generate consistent long-term cash flows. At the same time, a portion of the rent
includes sales-linked rent to explore the upside potential for rental income. By using these measures, we aim to pursue a portfolio that
achieves both stability and growth.
As of the end of the period under review, portfolio as a whole performed well with an overall occupancy ratio of 99.6%. Furthermore, theportfolio is diversified in terms of tenants as there are 389 end-tenants in our retail properties.
(C) Financing
When financing to acquire properties, KRR seeks to achieve the proper balance between financial stability and the efficiency of the cost of
the funds with the objectives to achieve stable medium- to long-term returns and consistent growth of assets under management.
(Equity Finance)
In the fiscal period under review, KRR sold a total of 88,750 newly issued units offered in Japan and overseas, and raised 18,547 million
yen. In addition, 5,750 units were issued through third-party allotment on October 21, 2015, raising 1,201 million yen that was used toprepay a portion of borrowing for acquisition of properties. Due to these activities, unitholders’ capital increased to 77,606 million yen asof March 31, 2016.
(Debt Finance)
During the fiscal period under review, KRR borrowed for the acquisition of properties and used the proceeds from the issuance of newly
issued units through third-party allotment for the early repayment of debt. Consequently, debt totaled 57,500 million yen at the end of the
fiscal period under review (March 31, 2016).
When undertaking borrowings, we combine a number of loans, spreading out repayment dates, considering the interest rate trends andother financial environment. We use swaps to fix the interest payments to hedge against the risk of a rise in interest rates.
The below are borrowings at the end of the fiscal period.
Series4-A

LenderSumitomo Mitsui Banking Corporation

Amount(in thousandsof yen)Interest rate

2,050,000

JBA 1-month
Japanese Yen
TIBOR+0.50%

October 2,
2015

October 2,
2016

Full onmaturity

Unsecured/
Unguaranteed

3,450,000

0.54510%(Note 2)October 2,
2015

March 31,2019

Full onmaturity

Unsecured/
Unguaranteed

800,000

0.98675%(Note 2)October 2,
2015

March 31,2023

Full onmaturity

Unsecured/
Unguaranteed

1500,000

1.01262%(Note 3)October 2,
2015

March 31,2023

Full onmaturity

Unsecured/
Unguaranteed

7,000,000

1.11010%(Note 2)October 2,
2015

March 31,2024

Full onmaturity

Unsecured/
Unguaranteed

1,900,000

1.24300%(Note 2)October 2,
2015April 16,2025

Full onmaturity

Unsecured/
Unguaranteed

JBA 1-month
Japanese Yen+0.50%

October 2,
2015

October 2,
2016

Full onmaturity

Unsecured/
Unguaranteed

February 10,
2016

February 10,
2017

Full onmaturity

Unsecured/
Unguaranteed

Drawdown Repayment date Repayment
date(Note 1)
methodRemarks

Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
4-B

Sumitomo Mitsui Trust Bank, Ltd.
Resona Bank, Ltd.
The Musashino Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

4-C

Resona Bank, Ltd.
The Musashino Bank,Ltd.

4-D

Development Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.

4-E

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Ltd.
Resona Bank, Ltd.

4-F

Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

4-G
(Note 4)

Sumitomo Mitsui Banking Corporation

3,650,000

5-1

Sumitomo Mitsui Banking Corporation

450,000

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

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

450,000

Mizuho Bank, Ltd.

400,000

Resona Bank, Ltd.

250,000

Aozora Bank, Ltd.

250,000

Sumitomo Mitsui Trust Bank, Ltd.

200,000
5

JBA 1-month
Japanese Yen
TIBOR+0.45%

Kenedix Retail REIT Corporation (3453)
Note 1:
Note 2:
Note 3:Note 4:

The repayment date will be the following business day in case such date falls on a day that is not a business day or the preceding business day in case such date falls in
the next calendar month.
These borrowings are floating interest rates. However, we have entered into interest rate swap agreements to hedge the risks of interest rate volatility. These rates are theinterest rates including the effect of the swaps (i.e., fixed interest rates).
These borrowings are fixed rates.
As for Series 4-G, the balance as of March 31, 2016 was 2,450,000 thousand yen as a portion of the debt was prepaid on October 30, 2015. The repayment of Series 4-G
was funded by net proceeds from the sale of new investment units through a third-party allotment with a October 21, 2015 payment date.

As a result, the average remaining years to maturity is 5.1 years, the weighted average interest rate is 0.88%, the long-term debt ratio is88.7% and the LTV ratio (note), is 42.7%.
Note:

The LTV ratio, or loan-to-value ratio, is the ratio of the total amount of borrowings, corporate bonds and tenant leasehold and security deposits (net of amounts
reserved for return of tenant leasehold and security deposits), to the total assets minus amounts reserved for return of tenant leasehold and security deposits.

(Credit ratings)
The status of the credit ratings as of March 31, 2016 is as follows.
Credit Rating Agency
Details of the Ratings
Japan Credit Rating Agency, Ltd. (JCR)
Long-Term Issuer Rating
A (Outlook: Stable)iv) Results of Operations
For this period, revenue was 5,541 million yen, operating income was 2,826 million yen, ordinary income was 2,428 million yen and net
income was 2,427 million yen.
Furthermore, in accordance with the distribution policy in the KRR Articles of Incorporation, KRR made a distribution (excluding excessof earnings) of 2,427,778,500 yen for the fiscal period, which is an integral multiple of 355,250, the total number of investment units
outstanding and does not exceed the unappropriated retained earnings of the fiscal period. Cash distributions are paid in accordance with
Article 67-15 of the Special Taxation Measures Law (Law No. 26 of 1957, including subsequent amendments). Consequently, thedistribution per unit (including the distributions in excess of earnings) was 6,834 yen.
Furthermore, in accordance with the policy for “Distribution of Money in Excess of Profits” as stated in the KRR Articles of Incorporation,
KRR made a distribution in excess of earnings for the 4,263,000 yen allowance for temporary adjustment (as defined in Article 2-2-30 of
the Ordinance on Accountings of Investment Corporations) for the purpose of reflecting the effect on distributions of the difference inearnings calculated under Japanese GAAP and Japanese tax laws in association with the amortization of fixed-term land lease rights (asdefined in Article 2-2-30 (b) of the Ordinance on Accountings of Investment Corporations). This resulted in a distribution in excess ofearnings per unit of 12 yen.
Consequently, the distribution per unit for the fiscal period, including this excess distribution, was 6,846 yen (of which the distribution inexcess of earnings per unit was 12 yen).
(Outlook)i) Outlook for Asset Management
The Japanese economy is expected to continue to recover at a moderate pace. However, we should pay attention to uncertainties about theoverseas economy regarding the economic slowdown in China, fall in the price of oil, the direction of U.S. financial policies, etc. We alsoneed to pay attention to changes in domestic economic environment, such as appreciation of yen, stock market decline and effects of thenegative interest rate policy.
As for Japan’s retail sector environment, disparities among the retail market are seen as general merchandize stores (GMS) are reported to
be struggling, but supermarkets and drugstores are performing well, and we anticipate that this trend to continue.
In the real estate trading market, we anticipate the high level of transaction volume to continue because of the strong appetite of J-REIT andother investors to acquire properties. The Bank of Japan’s aggressive monetary easing measures will help provide continuous supply ofadequate funds in the real estate market. However, investors should also keep in mind the risk of rise in interest rates in the future andimpact of oversea economic events.
From a medium to long-term perspective, to generate a steady stream of rental revenue, consistently increase our assets and establish asuitable financial position, KRR will continue to manage assets based on the following policies.
(A) Investment Strategy for New Properties and Disposition Policy
We receive a variety of support from many sources in order to achieve the steady growth of our assets and increase the value of our assets.
One source is the Kenedix Group, including Kenedix, Inc., the parent company of KFM (note). We also receive support from our Alliance
Companies: Sumitomo Mitsui Finance and Leasing Co., Ltd., Nippon Commercial Development Co., Ltd., and P&D Consulting Co., Ltd.
We are implementing a growth strategy that takes full advantage of the external growth opportunities created by the large and diverse
acquisition pipeline made possible by the support of these companies.
6

Kenedix Retail REIT Corporation (3453)
When acquiring properties, we make decisions based on all applicable factors with emphasis on four parameters: the retail property’s
attractiveness, its location, the property’s profitability and the tenant mix. By using this selection process results, we invest in retailproperties with a competitive edge, and good prospects for consistent rental revenue and growth in asset value. We also invest in landownership interests underlying retail properties. While many of the land-only properties are selected from the “JINUSHI BUSINESS”
portfolio held by Nippon Commercial Development, we make these investments after examining the terms of the land leasing agreement,
the characteristics of the tenant, the asset value of the land, and the proportion of land-only properties in our portfolio. We may also
consider making an equity investment in a tokumei kumiai (silent partnership) for warehousing properties, provided that we are given an
opportunity to acquire them in the future.
Regarding disposition of a portfolio property, we make decisions based primarily on the significance of these properties in the context ofthe portfolio. This is assessed by comprehensive evaluation of the outlook for future profitability and asset value determined based on its
current profitability and market trends.
Note: The Kenedix Group consists of Kenedix, Inc. and its subsidiaries and affiliates.

(B) Management Strategy for Existing Properties
KRR is committed to building a portfolio that can pursue both stability and growth. We believe that implementing integrated asset andproperty management services makes it possible to properly manage retail properties and pursue internal growth. Furthermore, thisintegrated management framework facilitates activities to enliven local communities where our properties are located, enabling us to aim
for medium to long-term growth in asset value.
To accomplish these goals, KFM oversees properties owned by KRR while placing priority on the following themes.
・“One-stop” asset management and property management services
・Continuously implementing a retail property management cycle through our in-house property management services
・Pursuit of internal growth through management of retail properties
・Directing investments and management policies to enliven local communities in the medium to long-term“One-stop" asset management and property management services
KRR plans to use the integrated asset management and property management services of KFM for strengthening relationships with tenants
and making the portfolio more profitable.
Continuously implementing a retail property management cycle through our in-house property management services
KFM provides property management services for all of KRR’s properties. We do this for the purposes of performing retail property
management that better reflects the needs of the tenants as well as accumulating know-how and improving tenant satisfaction. Specifically,
we use direct contact with tenant companies at our properties in order to strengthen tenant relationships and make properties more
profitable. To this end, we perform periodic monitoring of market conditions so that we can identify the needs of tenants and the customers
visiting their sites. This process makes it possible to find issues that stand in the way of achieving greater satisfaction for tenants and theircustomers. Once we have discovered points that require attention, we take actions that take full advantage of the resources and knowledge
regarding retail properties within the Kenedix Group. Solutions include measures such as the effectively utilizing capital expenditures,
optimizing tenant mix, realizing growth in asset value by pursuing property expansions, and cutting costs, to improve tenant satisfaction
and acquire more know-how.
Pursuit of internal growth through management of retail properties
KRR seeks to use the proper management of retail properties to achieve the goals of consistent revenue, higher profitability and growth inasset value.
i. Effectively utilize capital expenditure
We will use proper and well-timed capital expenditures to increase the satisfaction of tenants and make our properties more competitive.
ii. Optimize tenant mix
We will constantly work on attracting new tenants that are highly appealing to shoppers and replace tenants with others, optimizing
tenant composition, in order to seek stable revenue and higher profitability by attracting more customers.
iii. Realize growth in asset value by pursuing property expansions
We will use the extensive knowledge involving retail properties of the Kenedix Group and our Alliance Companies to utilize theunderutilized space (note) at properties and expand properties. These measures will take into account the competitive position of each
property, the effect on our financial position and other factors. By increasing space that can be leased, we would like to increase revenue
and asset value.
Note:

The underutilized space is defined as the area that is calculated by multiplying the floor space ratio, or the ratio of total area of the buildingto the site area, which isprescribed in Article 52 of the Building Standards Act and applied to each retail property in accordance with the Building Standards Act, City Planning Act andother laws and regulations, by the land area that is allowed to be used as a retail property site, and subtracting from this figure the actual gross floor area of the7Kenedix Retail REIT Corporation (3453)
building.

Directing investments and management policies to enliven local communities in the medium to long-term
At our retail properties, we seek tenants that provide services, hold community involved events and use other measures to help enliven thelocal communities where our properties are located. We believe these activities will contribute to the medium to long-term growth in theasset value of these properties.
(C) Financing
We will establish a suitable financial foundation by examining numerous financing methods and selecting the optimum ones. These
decisions will reflect interest rates and other elements of the financial environment. Our goal is to select financing methods that result in the
optimum balance between financial stability and the financing cost.
(D) Disclosure of Information
Our policy concerning disclosure activities is to use extensive investor relations activities to distribute a broad range of information toinvestors and other related parties as well as to announce information as soon and as accurately as we can. We use TDnet (Timely
Disclosure network) and press releases to meet the timely-disclosure requirements of the Tokyo Stock Exchange. In addition, we
proactively post information on our website (http://www.krr-reit.com/en/).
(E) Conflicts of Interest
In addition to managing the assets of KRR, KFM provides asset management services to other investment corporations and real estate
funds. KFM uses a “preferential right for acquisition opportunities” system for the property acquisition process. KFM has a pipeline
committee, which includes a compliance officer, and operates in accordance with rules. This system is structured to prevent improper
allocation of acquisition opportunities as well as conflicts of interest among the REIT and funds managed by KFM. Through thesemeasures, KFM is taking suitable actions regarding conflicts of interest.
(F) Important Subsequent Events
KRR passed resolutions at the Board of Directors Meeting held on March 31, 2016 and April 13, 2016, to issue new investment units tofund the acquisition of specified assets. Payments for the issuance of new investment units through public offering and through third-party
allotment have been completed on April 20, 2016 and May 18, 2016, respectively. KRR plans to use the net proceeds through third-party
allotment for the repayment of the loans payable of 800,000 thousand yen.
As a result, unitholders' capital totaled 94,256,390,300 yen and total number of investment units issued and outstanding increased to422,450 as of May 18, 2016.
Issuance of new investment units through public offerings
Total number of units issued:
Issue price (offer price):
Total amount of issue price (total offer price):
Paid-in amount (issue amount):
Total paid-in amount (total issue amount):
Payment date:

64,000 units (Domestic 31,744 units, International 32,256 units)
256,717 yen per unit
16,429,888,000 yen
247,764 yen per unit
15,856,896,000 yen
April 20, 2016

Issuance of new investment units through third-party allotment
Total number of units issued:
Paid-in amount (issue amount):
Total paid-in amount (total issue amount):
Payment date:
Allottee:

3,200 units
247,764 yen per unit
792,844,800 yen
May 18, 2016
SMBC Nikko Securities Inc.

8

Kenedix Retail REIT Corporation (3453)(Reference Material)(A) Acquisition of Assets
KRR acquired 7 assets (acquisition price of 27,127 million yen).
“Acquisition price” represents the amount specified in the sale and purchase agreement for the trust beneficiary interests, exclusive of thevarious expenses (acquisition expenses, property tax, city planning tax, consumption tax, etc.) required in the acquisition of the following
assets.
Property
number

Property
type

T-15

NSC

T-16

SS

T-17

SM

O-10

NSC

N-4

SS

R-7

Urban
StationFront SC

R-8

NSC

Acquisition price(million yen)Appraisal value(million yen)

Acquisition date

Mitsubishi Jisho Residence Co.,
Ltd.

3,360

3,780

April 21, 2016

Individual

1,724

1,880

April 20, 2016

G.K. KRF60.

1,450

1,500

April 21, 2016

3,723

3,730

April 21, 2016

Property nameLocation

SellerNakamachidai
Tokyu Store
Central Wellness Club
Nagatsuta Minamidai

Yokohama,
Kanagawa
Yokohama,
Kanagawa

Life Kameido

Koto-ku, Tokyo

Million Town Tsukaguchi(Land)
Homecenter Kohnan
Sunadabashi

Amagasaki, Hyogo Sumitomo Mitsui Finance andLeasing Co., Ltd.
Nagoya, Aichi

JRP6 G.K.

7,140

7,220

April 21, 2016

Solala Plaza

Sendai, Miyagi

G.K. FOX Investment

5,720

5,740

April 21, 2016

P-1 Plaza Tenno

Hamamatsu,
Shizuoka

Kondo Cotton Spinning Co.,
Ltd.

4,010

4,230

April 22, 201627,12728,080

-

Total

-

-

(B) Asset under construction
A new building with 394.38 m2 gross floor area (hereinafter the “restaurant building”) is planed to be constructed on the underutilized site ofUnicus Ina, a property owned by KRR. KRR expects the total construction cost for the restaurant building to be 107 million yen and plans tocomplete the construction by mid-January 2017.
(C)Financing
KRR borrowed funds for the acquisition on April 21, 2016 and April 22, 2016.
SeriesLenderAmount(in thousandsof yen)Interest rate

Drawdown date

Repayment date
(Note 1)

Repayment
methodRemarks

JBA 1-month
Japanese Yen
TIBOR+0.45%
JBA 1-month
Japanese Yen
TIBOR+0.45%

April 21,2016

April 21, 2017

Full onmaturity

Unsecured/
Unguaranteed

April 21,2016

April 21, 2017

Full onmaturity

Unsecured/
Unguaranteed

6-A-1

Sumitomo Mitsui Banking Corporation

4,140,000

6-A-2

Mizuho Bank, Ltd.

360,000

6-B-1

Mizuho Bank, Ltd.

710,000

0.36800%

April 21,2016

September 30,
2019

Full onmaturity

Unsecured/
Unguaranteed

6-B-2

Sumitomo Mitsui Trust Bank, Ltd.

620,000

0.36800%

April 21,2016

September 30,
2019

Full onmaturity

Unsecured/
Unguaranteed

6-C

Sumitomo Mitsui Trust Bank, Ltd.

450,000

0.80300% (Note2)

April 21,2016

September 30,
2024

Full onmaturity

Unsecured/
Unguaranteed

6-D

Development Bank of Japan Inc.

890,000

0.76031% (Note3)

April 21,2016

September 30,
2024

Full onmaturity

Unsecured/
Unguaranteed

6-E

Sumitomo Mitsui Banking Corporation

2670,000

0.93200% (Note2)

April 21,2016

April 21, 2026

Full onmaturity

Unsecured/
Unguaranteed

6-F

Sumitomo Mitsui Banking Corporation

800,000

April 21,2016

April 21, 2017

Full onmaturity

Unsecured/
Unguaranteed

7-A

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,070,000

April 22,2016

April 21, 2017

Full onmaturity

Unsecured/
Unguaranteed

7-B

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

890,000

April 22,2016

October 31,
2025

Full onmaturity

Unsecured/
Unguaranteed

Note 1:
Note 2:
Note 3:Note 4:

JBA 1-month
Japanese Yen
TIBOR+0.45%
JBA 1-month
Japanese Yen
TIBOR+0.45%
0.88800%

The repayment date will be the following business day in case such date falls on a day that is not a business day or the preceding business day in case such date falls in thenext calendar month.
These borrowings are floating interest rates. However, we have entered into interest rate swap agreements to hedge the risks of interest rate volatility. These rates are theinterest rates including the effect of the swaps (i.e., fixed interest rates).
These borrowings are fixed interest rates.
As for Series 6-F, it will be prepaid in full on May 31, 2016, and there will be no balance before its repayment date. The repayment of Series 6-F was funded by net proceedsfrom the sale of new investment units through a third-party allotment with a May 18, 2016 payment date.

9

Kenedix Retail REIT Corporation (3453)
ii) Earnings Forecasts
For the fiscal period ending September 30, 2016 (From April 1, 2016 to September 30, 2016) and the fiscal period ending March 31, 2017
(From October 1, 2016 to March 31, 2017), the earnings forecasts are estimated as set forth below.
Fiscal period ending September 30, 2016
Operating revenues¥6,392 million

Operating Income¥2,943 million

Ordinary income¥2,475 million

Net Income¥2,472 million

Distributions per unit

¥5,865Of the above, distributions in excess of earnings¥13

Fiscal period ending March 31, 2017
Operating revenues¥6,365 million

Operating Income¥2,957 million

Ordinary income¥2,488 million

Net Income¥2,485 million

Distributions per unit

¥5,897Of the above, distributions in excess of earnings¥13

Please refer to “Assumptions for the Forecasts of Financial Results for the Fiscal Periods Ending September 30, 2016 and March 31, 2017”
set forth below for information on current assumptions for the forecasts of operating results.
After the end of the second fiscal period, KRR issued new units, made new borrowings and acquired properties. Accordingly, KRR has
updated the “Forecasts of Financial Results and Distributions for the Fiscal Periods Ended March 31, 2016 and Ending September 30,
2016, and the Forecast of Financial Results and Distributions for the Fiscal Period Ending March 31, 2017” released on March 31, 2016,
but there are no changes in the forecast figures.
Note:

The above forecasts are based on certain assumptions for calculation, and our judgment as oftoday. Actual operating revenues, operating income, ordinary income,net income, distributions per unit and distributions in excess of earnings per unit may vary due to changes in market conditions. These forecasts do not guarantee
the distribution amount.

Assumptions for the Earnings Forecasts for the Fiscal Periods Ending September 30, 2016 and March 31, 2017
Item
Calculation period

Property portfolio

Operatiing revenues

Operating Expenses

Assumptions
・The 3rd fiscal period: April 1, 2016 to September 30, 2016 (183 days)
・The 4th fiscal period: October 1, 2016 to March 31, 2017 (182 days)
・It is assumed that there will be no changes (any acquisition of new properties or any sale of existing
properties, etc.) in property portfolio of 40 assets, which are 33 existing assets (the “existing assets”) and 7
assets acquired on April 20, 2016, April 21, 2016 and April 22, 2016 (the “assets acquired in the third fiscal
period”), by the end of the fiscal period ending March 31, 2017.
・The actual property portfolio may change due to the acquisition of new properties other than assets
acquired in the third fiscal period or the disposal of owned properties, etc.
・Operating revenues of the existing assets are based on leasing agreements as of March 31, 2016, trend oftenants, real estate market trends and other factors.
・Operating revenues of the assets acquired in the third fiscal period are based on its operating revenues
calculated by the information provided by the sellers, leasing agreements as of March 31, 2016, trend oftenants, real estate market trends and other factors.
・Operating revenues are based on the assumption that there will be no rent in arrears or non-payments by thetenant.
・Property-related operating expenses other than depreciation are calculated based on historic data, etc. andthese costs reflect fluctuations in the costs, including leasing costs based on the leasing agreements.
・Depreciation expenses of 711 million yen, and 715 million yen are assumed for the fiscal periods ending
September 30, 2016 and March 31, 2017 respectively, using the straight-line depreciation method.
・When a property is sold, the purchaser of the property typically reimburses the seller, pursuant to thepurchase agreement, for the pro rata portion of the property-related taxes that relates to the period from theacquisition date to the end of the calendar year in which the acquisition occurs. As is customary forproperty transactions in Japan and in accordance with Japanese GAAP, KRR intends to capitalize theportions of the real estate taxes on the properties to be acquired. For the existing 32 properties as of January
1, 2016, property-related taxed are not expensed in the fiscal period ended March 31, 2016 because theamount to be expensed for such costs may not be decided by March 31, 2016. 483 million yen of property
related tax is expected to be expensed during the fiscal periods ending September 30, 2016 and March 31,
2017.
Such costs for Life Nishi-Tengachaya and the properties acquired in the third fiscal period are not expensed
10Kenedix Retail REIT Corporation (3453)
Item

Non-operating expenses

Assumptions
for the fiscal period ending September 30, 2016 because KRR did not own these properties as of January 1,
2016. In addition, such costs for these properties are not going to be expensed during the fiscal period
ending March 31, 2017 because the amount to be expensed for such costs may not be decided until after
March 31, 2017.
・With respect to building repair expenses, the amount assumed to be necessary for each property is based on
the repair plan of KFM for each fiscal period. However, repair expenses may be substantially different
from the expected amount due to certain unexpected factors.
・The offering-related costs will be amortized using the straight-line method over 3 years. Together with theamortization of initial start-up costs, the related costs are assumed to be 79 million yen and 79 million yen
for the fiscal periods ending September 30, 2016, and March 31, 2017, respectively.
・For interest expenses and other debt-related costs, 383 million yen and 384 million yen are expected for the
fiscal periods ending September 30, 2016, and March 21, 2017, respectively.

・As of today, We have outstanding balance of 70,100 million yen in borrowings.
・The LTV ratio is expected to be 42.5% and 42.5% at the end of the period ending September 30, 2016 andMarch 31, 2017, respectively. (rounded to the nearest tenth)Borrowings
・The LTV ratio has been calculated according to the following formula:
LTV ratio =(Borrowings + Corporate bonds + Tenant leasehold and security deposits - Amounts reserved
for return of tenant leasehold and security deposits) / (Total assets - Amounts reserved for return of tenantleasehold and security deposits)
・The forecasts are based on our assumption of 422,450 units issued as of today. It is assumed that there will
Investment units
be no changes in the number of investment units due to the new issuance of units until the end of the fiscal
period ending March 31, 2017.
・Distributions per unit (excluding excess of earnings per unit) are calculated in accordance with theDistributions per unit
distribution policy outlined in our Articles of Incorporation.
(excluding excess ofearnings ・Actual distributions per unit (excluding excess of earnings per unit) may fluctuate due to various factors
per unit)
including movements in investment assets, fluctuations in rental revenues caused by tenant replacements,
or unexpected repairs.
・We expects to record Allowance for Temporary Adjustment (ATA) to adjust the temporary differences
between treatment of certain transactions under Japanese GAAP and Japanese tax laws in relation to
Sunny Noma, which results from the depreciation of fixed term land lease right for business purposes, theDistributions in excess of
expensed interest from asset retirement obligations and deprecation of buildings, during the relevant period
earnings per unit
(30 years starting from March 16, 2007).
・KRR has a policy to distribute the amount of increase in ATA, in excess of its earnings. Distributions inexcess of earnings are expected to be 13 yen per unit and 13 yen per unit in the periods ending September
30, 2016 and March 31, 2017, respectively.
・Forecasts are based on the assumption that there will be no amendments to the law, taxation system,
accounting standards, public listing regulations, requirements of the Investment Trusts Association, Japan,
Otheretc. that may affect the aforementioned forecast figures.
・Forecasts are based on the assumption that there will be no unexpected. Significant changes in general
economic trends and real estate market trends or other conditions.

iii) Risk Factors
There are no significant changes to the “Investment Risks” in described in the Securities Registration Statement (submitted on December
24, 2015; prepared in Japanese only), the disclosure is omitted.

11Kenedix Retail REIT Corporation (3453)
3. Financial Statements(1) Balance Sheets(in thousands of yen)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Construction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets
Leasehold right in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Long-term deposits
Total investments and other assets
Total non-current assets
Deferred assets
Organization costs
Investment unit issuance costs
Total deferred assets
Total assets

*1

*1

*1

12

First Fiscal Period(As of September 30, 2015)

Second Fiscal Period(As of March 31, 2016)

3,950,551
7,829,874
163,767
16,7632,071,748
10,783
14,043,489

3,882,955
10,341,252
192,030
33,750510,522
14,960,512

96,74525,766,439(518,285)
25,248,154
1,118,727(35,074)
1,083,653
29,194(869)
28,324
26,211(1,231)
24,97966,910,436
12,02593,404,319

33,894,083(1,043,077)
32,851,006
1,584,525(68,990)
1,515,535
29,194(1,720)27,47347,611(3,413)44,19899,044,234
5,583
133,488,032

171,078
2,445
173,523

528,555
2,164
530,719

10,0005,320
418,520
124,960
558,800
94,136,642

10,00036,015583,023
124,960
753,998
134,772,750

40,501
161,506
202,008
108,382,141

35,435
240,764
276,199
150,009,463

Kenedix Retail REIT Corporation (3453)(in thousands of yen)

Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Accounts payable-otherAccrued expenses
Income taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Surplus
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets*1

First Fiscal Period(As of September 30, 2015)

Second Fiscal Period(As of March 31, 2016)

330,055
2,000,000
257,8543,412
6,321
518,706
359,954
3,476,305

606,400
6,500,000
285,4706,520
932
748,176
136,468
8,283,968

36,350,000
20,0008,722,663

45,115,565
48,591,870

51,000,000
10,633,432
23,04534,382
61,690,859
69,974,828

57,857,000

77,606,649

1,933,270
1,933,270
59,790,270
59,790,270
108,382,141

2,427,985
2,427,985
80,034,634
80,034,634
150,009,463

22,901-*2

13

Kenedix Retail REIT Corporation (3453)(2) Statements of Income and Retained Earnings
First Fiscal Period(From October 3, 2014
to September 30, 2015)
Operating revenues
Rent revenue-real estate
Other lease business revenue
Total operating revenues
Operating expenses
Expenses related to rent business
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Financing-related expenses
Amortization of organization costs
Amortization of investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes
Current
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings(in thousands of yen)
Second Fiscal Period(From October 1, 2015
to March 31, 2016)*1*1

4,128,035
975,033
5,103,069

4,656,391
884,665
5,541,057*1

2,246,179
313,5775,761
20,258
8,931
45,112
2,639,820
2,463,248

2,235,833
405,144
4,658
16,4544,500
48,444
2,715,035
2,826,021

1,071
1,071

937
715
1,652

208,576
262,279
10,04943,605524,510
1,939,809
1,939,809

275,159
59,213
5,066
59,244
398,683
2,428,991
2,428,991

6,539
6,539
1,933,270
1,933,270

1,075
1,075
2,427,915
70
2,427,985

14

Kenedix Retail REIT Corporation (3453)(3) Statements of Changes in Net Assets
First Fiscal Period (From October 3, 2014 to September 30, 2015)(in thousands of yen)
Unitholders' equity
Surplus
Total net assets

Unitholders'
capitalBalance at the beginning of theperiodChanges of items during theperiodIssuance of new investment
units
Net income
Total changes of items during theperiodBalance at the end of the period

Unappropriatedretained earnings

-

Total
unitholders'equityTotal
surplus--57,857,000

*1

-

-

57,857,000

57,857,000

1,933,270

1,933,270

1,933,270

1,933,270

57,857,000

1,933,270

1,933,270

59,790,270

59,790,270

57,857,000

1,933,270

1,933,270

59,790,270

59,790,270

Second Fiscal Period (From October 1, 2015 to March 31, 2016)(in thousands of yen)
Unitholders' equity
Surplus
Total net assets

Unitholders'
capitalBalance at the beginning of theperiodChanges of items during theperiodIssuance of new investment
units
Dividends from
Surplus
Net income
Total changes of items during theperiodBalance at the end of the period

57,857,000

Unappropriatedretained earnings

Total
surplus1,933,270

1,933,270

19,749,649

*1

Total
unitholders'equity59,790,270

59,790,270

19,749,649

19,749,649(1,933,200)(1,933,200)(1,933,200)(1,933,200)

2,427,915

2,427,915

2,427,915

2,427,915

19,749,649

494,714494,714

20,244,364

20,244,364

77,606,649

2,427,985

2,427,985

80,034,634

80,034,634

15

Kenedix Retail REIT Corporation (3453)(4) Statements of Cash Distributions(yen)First Fiscal Period(From October 3, 2014 to September 30, 2015)
I.

Retained earnings at the end of period

II.

III.

Second Fiscal Period(From October 1, 2015 to March 31, 2016)

1,933,270,617

2,427,985,431

Distributions in excess of earnings-

4,263,000

Of which, allowance for temporary difference
adustments-

4,263,000

1,933,200,500

2,432,041,500

7,414

6,846

1,933,200,500

2,427,778,500

7,414

6,834

-

4,263,000-

12

70,117

206,931

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amount equivalent
to 90% of its distributable profit as stipulated in Article
67-15 of the Special Taxation Measures Law, and shall be
up to its profits as the maximum amount. Following thispolicy, KRR has decided that it shall distribute¥1,933,200,500 which is the maximum integral multipleof 260,750 units issued and outstanding as the distributionof earnings. Procedures for the distribution of amounts
exceeding distributable income are outlined in Article 392 of KRR’s Articles of Incorporation. In the first fiscal
period, KRR has decided not to distribute cash in excess
of distributable profit.

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amount equivalent
to 90% of its distributable profit as stipulated in Article
67-15 of the Special Taxation Measures Law, and shall be
up to its profits as the maximum amount. Following thispolicy, KRR has decided that it shall distribute¥2,427,778,500 which is the maximum integral multipleof 355,250 units issued and outstanding as the distributionof earnings. Procedures for the distribution of amounts
exceeding distributable income are outlined in Article 392 of KRR’s Articles of Incorporation.
Furthermore, in accordance with the policy for“Distribution of Money in Excess of Profits” as stated in
Article 39-2 of KRR’s Articles of Incorporation, KRR
made a distribution in excess of earnings for the¥4,263,000 allowance for temporary difference
adjustments (as defined in Article 2-2-30 of the Ordinanceon Accountings of Investment Corporations) for the
purpose of reflecting the effect on distributions of thedifference in earnings calculated under Japanese GAAP
and Japanese tax laws in association with the amortizationof fixed-term land lease rights (as defined in Article 2-230 (b) of the Ordinance on Accountings of Investment
Corporations).

Total distributions
Distributions per unit
Of which, distributions of earnings
Of which, distributions of earnings per unit

Of which, allowance for temporary difference
adjustments
Of which, distributions in excess of earnings perunit (allowance for temporary difference
adjustments)
IV. Retained earnings brought forward to the next
periodMethod of calculating distribution amount16

Kenedix Retail REIT Corporation (3453)(5) Statements of Cash Flows(in thousands of yen)

Second Fiscal Period

First Fiscal Period(From October 3, 2014
to September 30, 2015)(From October 1, 2015 toMarch 31, 2016)

Net cash provided by (used in) operating activities
Income before income taxes

1,939,809

2,428,991

Depreciation and amortization

561,321566,142

Amortization of organization costs

10,0495,066

Amortization of investment unit issuance costs

43,60559,244

Interest income(1,071)(937)

Interest expenses

208,576

275,159

Decrease (increase) in operating accounts receivable(163,767)(28,262)

Decrease (increase) in consumption taxes refund receivable(2,071,748)

1,561,226

Decrease (increase) in prepaid expenses(16,763)(16,987)

Increase (decrease) in operating accounts payable

304,096

94,580

Increase (decrease) in accounts payable-other257,854

25,738

Increase (decrease) in advances received

518,706

229,469

Increase (decrease) in deposits received

359,954(223,486)

Decrease (increase) in long-term prepaid expenses(418,520)(164,503)

Decrease (increase) in long-term deposits(124,960)-

Payments of organization costs(50,551)--

36,767

1,356,591

4,848,210

Other
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

1,071

937

(205,164)(272,051)(217)(6,464)

1,152,280

4,570,631

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment(96,745)-(93,814,364)(40,463,688)(2,809)-Purchase of intangible assets in trust(176,383)(361,455)

Payments for lease and guarantee deposits(10,000)-

Payments for lease and guarantee deposits in trust(5,320)(30,695)

Purchase of property, plant and equipment in trust
Purchase of intangible assets

Proceeds of tenant leasehold and security deposits

20,000-

Repayments of tenant leasehold and security deposits in trust(393,751)(286,205)

Proceeds from tenant leasehold and security deposits in trust

9,116,415

2,185,372

Payments of restricted bank deposits in trust(3,917,992)-

Proceeds from restricted bank deposits in trust

287,569

661,625(88,993,382)(38,295,047)

Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Proceeds in short-term loans payable

10,222,500

7,700,000

Payments in short-term loans payable(8,222,500)(3,200,000)

Proceeds from long-term loans payable

36,350,000

14,650,000

Proceeds from issuance of investment units

57,651,888

19,611,147-(1,931,323)(10,783)-

Net cash provided by (used in) financing activities

95,991,104

36,829,824

Net increase (decrease) in cash and cash equivalents

8,150,002

3,105,407

Dividends paid
Other

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

*1

17

-

8,150,002

8,150,002

11,255,410

Kenedix Retail REIT Corporation (3453)（6）Notes on Assumption of Going Concern
Not applicable（7）Summary of Significant Accounting Policies
1.Method of depreciation of noncurrent assets(1) Property, plant and equipment (including trust assets)
The straight-line method is applied.
Useful lives of the assets ranging are as follows:
Buildings: 2 to 70 years
Structures: 8 to 59 years
Machinery and equipment: 10 to 25 years
Tools, furniture and fixtures: 4 to 10 years(2) Intangible assets (including trust assets)
The straight-line method is applied.
(3) Long-term prepaid expenses
The straight-line method is applied.

2. Accounting for deferred assets(1) Organization costs
Organization costs are amortized over a period of 5 years under the straight-line method.
(2) Investment unit issuance costs
Investment unit issuance costs are amortized over a period of 3 years under the straight-line method.

3. Accounting for revenues andexpenses

Accounting for property-related taxes
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on acalendar year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes
corresponding to said period. Under Japanese tax regulations, the seller of the property is liable for these taxes on the property fromthe date of disposal to the end of the calendar year in which the property is disposed. The seller, however, is reimbursed by thepurchaser for these accrued property-related tax liabilities.
When KRR purchases properties, it typically allocates the portion of the property-related taxes related to the period following thepurchase date of each property through the end of the calendar year. The amounts of those allocated portions of the property-related
taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to ¥600,480
thousand and ¥73,320 thousand as of September 30, 2015 and March 31, 2016, respectively.

4. Method of hedge accounting(1) Hedge accounting method
Deferral hedge accounting is applied. However, the special treatment is applied for the interest-rate swap agreements that meetthe criteria for special treatment.
(2) Hedging instruments and hedged items
Hedge instruments
Interest-rate swap transactions
Hedged items
Interest payments on debts(3) Hedging policy
KRR enters into derivative transactions based on its risk management policies with the objective of hedging risks provided in its
Articles of Incorporation.
(4) Method of assessing the effectiveness of hedging
The assessment of hedge effectiveness is omitted since the interest rate swaps satisfy the requirements for special treatment.

5. Scope of cash and cash
equivalents on statements of cash
flows

Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid,readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from thedate of purchase.

6. Other significant accounting
policies for the preparation offinancial statements(1) Accounting method for trust beneficiary interests in real estate and other assets
The assets and liabilities as well as revenues and expenses of financial assets held in the form of trust beneficiary interests in realestate and other assets are recorded in full in KRR’s balance sheet and statement of income and retained earnings.
Of the assets in trust accounted for under the respective account items, the following significant items are separately indicated on
the balance sheet.
1. Cash and deposits in trust
2. Buildings in trust, structures in trust, machinery and equipment in trust, tools, furniture and fixtures in trust, land in trust,construction in progress in trust
3. Leasehold right in trust
4. Lease and guarantee deposits in trust
5. Tenant leasehold and security deposits in trust(2) Accounting method for consumption taxes
Consumption taxes are separately recorded. Non-deductible consumption taxes applicable to the acquisition of assets areincluded in the cost of acquisition for each asset.

18

Kenedix Retail REIT Corporation (3453)(8) Notes to Financial Statements(Notes to Balance Sheets)* 1. Assets pledged as collateral and relevant secured liabilities:(in thousands of yen)
Assets pledged as collateralFirst Fiscal Period
As of September 30, 2015

Second Fiscal Period
As of March 31, 2016

Buildings in trust

2,475,636

2,797,203

Structures in trust

48,74855,538Land in trust
Total
Secured liabilities

6,595,863

7,811,297

9,120,248

10,664,039

First Fiscal Period
As of September 30, 2015

Tenant leasehold and security deposits in trust
Total

Second Fiscal Period
As of March 31, 2016
3,630,423

3,691,291

3,630,423

3,691,291* 2. Minimum net assets prescribed in Article 67-4 of the Investment Trust Act(in thousands of yen)First Fiscal Period
As of September 30, 2015

Second Fiscal Period
As of March 31, 2016
50,00050,000(Notes to Statements of Income and Retained Earnings)* 1. Breakdown of real estate rental revenues and expenses(in thousands of yen)First Fiscal Period
From October 3, 2014
to September 30, 2015

Second Fiscal Period
From October 1, 2015
to March 31, 2016

A. Rental and other operating revenues:
Rent revenue-real estate:
Rental revenues

3,643,804

3,761,328

Rental revenues from limited proprietary rights of land

220,680

598,355

Common area charges

263,549

296,707

4,128,035

4,656,391

Parking space rental revenues

126,629

162,060

Utility charge reimbursement

500,044453,733

Miscellaneous

348,360

268,871

Subtotal

975,033

884,665

5,103,069

5,541,057

Property management fees and facility management fees

655,263

637,809

Utilities

548,099495,520

Subtotal
Other lease business revenue:

Total rental and other operating revenues
B. Property-related expenses:
Expenses related to rent business:

Taxes
Repairs and maintenanceInsurance

1,280

216

144,732

201,226

9,662

10,531

Trust fees

12,214

14,499Depreciation

560,957

565,861

OthersTotal property-related expenses
C. Net operating income from real estate rental business（A-B）

19

313,968

310,168

2,246,179

2,235,833

2,856,889

3,305,224

Kenedix Retail REIT Corporation (3453)(Notes to Statements of Changes in Net Assets)* 1. Total number of authorized investment units and total number of investment units issued and outstanding
First Fiscal Period
From October 3, 2014
to September 30, 2015

Second Fiscal Period
From October 1, 2015
to March 31, 2016

Total number of authorized investment units

5,000,000 units

5,000,000 units

Total number of investment units issued and outstanding

260,750 units

355,250 units(Notes to Statements of Cash Flows)* 1. Reconciliation of balance sheet items to cash and cash equivalents at the end of period in the cash flows statements
First Fiscal Period
As of September 30, 2015
Cash and deposits

3,950,551(in thousands of yen)
Second Fiscal Period
As of March 31, 2016
3,882,955

Cash and deposits in trust

7,829,874

10,341,252

Restricted bank deposits in trust (Note)(3,630,423)(2,968,798)

Cash and cash equivalents

8,150,002

11,255,410

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

(Notes to Lease Transactions)Operating lease transactions (Lessee)
Future minimum lease payments(in thousands of yen)First Fiscal Period
As of September 30, 2015

Second Fiscal Period
As of March 31, 2016

Due within 1 year

10,50010,500Due after 1 year

214,798

209,548

Total

225,298

220,048

Operating lease transactions (Lessor)
Future minimum lease income(in thousands of yen)First Fiscal Period
As of September 30, 2015

Second Fiscal Period
As of March 31, 2016

Due within 1 year

2,080,9784,184,868

Due after 1 year

17,941,367

37,858,429

Total

20,022,345

42,043,297

20

Kenedix Retail REIT Corporation (3453)（Notes to the Financial Instruments）
1. Overview(1) Policy for financial instruments
KRR procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans from financial institutions, issuance of investment units and othermeans. With regard to the procurement of interest-bearing debts, KRR ensures that it can effectively combine stable long-term funds with flexible short-term funds. Management of
surplus funds is undertaken through various bank deposits focusing on safety, liquidity and effectiveness. KRR uses derivatives for the purpose of hedging its exposure to changes ininterest rates and other risks and does not enter into derivative transactions for speculative or trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing KRR’s surplus funds and are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited.
Borrowings, which are made primarily for the purpose of procuring funds for the acquisition of real estate and trust beneficiary interests in real estate and have a repayment date of a
maximum of 9 years and 1 months as of March 31, 2016, the end of the second fiscal period, are exposed to liquidity risk where alternative funds may not be procured by therepayment date. Also, borrowings with floating interest rates are exposed to interest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk
for a certain portion of the borrowings.
Tenant leasehold and security deposits are deposits received from tenants, which are exposed to liquidity risks when the tenants vacate the properties.
(3) Risk management for financial instrumentsa.
Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored by deposits in non-interest bearing
ordinary savings accounts or with financial institutions with credit ratings above a certain level. In utilizing derivatives, KRR aims to mitigate counterparty risk such as by transactingwith financial institutions with favorable ratings.
b.
Market risk
While borrowings with floating rates are exposed to interest rate volatility risk, such risk is monitored by adjusting the rate of the balance of borrowings with floating rates against
the total borrowings according to the financial environment, interest rate forecasts by continuous monitoring, etc. and by using derivatives, etc. A risk management policy isestablished with regard to the execution and management of derivatives and such transactions are conducted based on this policy.
c.
Liquidity risk
Though borrowings are subject to liquidity risk, KRR reduces such risk by spreading out payment due dates and by diversifying financial institutions. Liquidity risk is also managed
by such means as regularly checking the balance of cash reserves.
Though tenant leasehold and security deposits are subject to liquidity risk, in principle, KRR reduces such risk by retaining funds that would enable KRR to return

necessary amounts to tenants.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fair value is reasonably estimated. Sincevarious assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in a different fair value.
2. Estimated fair value of financial instruments
The carrying value of financial instruments on balance sheet and estimated fair value are shown in the following table. Items whose fair values are recognized to be extremely difficult
to grasp are not included in the following table (Note 2).
First Fiscal Period
As of September 30, 2015

(1) Cash and deposits(2) Cash and deposits in trust
Total(1) Short-term loans payable(2) Long-term loans payable(3) Tenant leasehold and security deposits in trust
Total
Derivative transactions

Carrying amount
3,950,551
7,829,874
11,780,426
2,000,000
36,350,000
3,344,264
41,694,264-

Estimated fair value
3,950,551
7,829,874
11,780,426
2,000,000
35,739,489
3,376,087
41,115,576-(in thousands of yen)
Difference(610,510)
31,823(578,687)-

Carrying amount
3,882,955
10,341,252
14,224,208
6,500,000
51,000,000
3,509,658
61,009,658-

Estimated fair value
3,882,955
10,341,252
14,224,208
6,500,000
51,377,832
3,546,858
61,424,691-(in thousands of yen)
Difference
377,832
37,200415,033-

Second Fiscal Period
As of March 31, 2016

(1) Cash and deposits(2) Cash and deposits in trust
Total(1) Short-term loans payable(2) Long-term loans payable(3) Tenant leasehold and security deposits in trust
Total
Derivative transactions

Note1: Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying amount approximates fair value.
Liabilities(1) Short-term loans payable
Since these items are settled in a short period of time with floating interest rates, their carrying amount approximates fair value.
(2) Long-term loans payable
Among these items, the fair value of loans payable with fixed interest rates is calculated based on the present value, which is the total amount of principal and interest discounted by the21Kenedix Retail REIT Corporation (3453)
estimated interest rate to be applied in the event that KRR conducts new loans of the same type. As for the fair value of loans payable with floating interest rates, it is based on the
carrying amount since market interest rates are reflected in the short term and the fair value is believed to approximate the carrying amount as the credit standing of KRR has notchanged significantly since the loans were made. (However, the fair value of long-term loans payable subject to the special treatment for interest-rate swaps is based on the present
value of the total of principal and interest, accounted for together with the applicable interest-rate swaps, discounted by the estimated interest rate to be applied in the event that KRR
conducts new loans of the same type.)(3) Tenant leasehold and security deposits in trust
The fair value is determined based on the present value of contractual cash flows discounted at the discount rate into which the period to the repayment date and the credit risk arereflected.
Derivative transactions
Please refer to “Notes to Derivative Transactions”.
Note2: Financial instruments whose fair values are difficult to determine(in thousands of yen)First Fiscal Period
As of September 30, 2015
20,000Classification
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust

5,378,399

Total
5,398,399
Because no quoted market price is available and it is extremely difficult to determine their fair value based on estimated future cash flows because the repayment dates of those
deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
(in thousands of yen)
Second Fiscal Period
As of March 31, 2016
7,123,774

Classification
Tenant leasehold and security deposits in trust

Total
7,123,774
Because no quoted market price is available and it is extremely difficult to determine their fair value based on estimated future cash flows because the repayment dates of those
deposits are not certain. Therefore, these financial instruments are not included in the above quantitative information.
Note 3: Redemption of monetary claims scheduled to be due after the balance sheet date
First Fiscal Period
As of September 30, 2015
(in thousands of yen)

Cash and deposits
Cash and deposits in trust
Total

Due in 1 year or
less
3,950,551
7,829,874
11,780,426

Due after 1 year
through 2 years

Due in 1 year or
less3,882,955
10,341,252
14,224,208

Due after 1 year
through 2 years

Due after 2 years
through 3 years-

Due after 3 years
through 4 years-

Due after 4 years
through 5 years-

Due after 5 years--

Second Fiscal Period
As of March 31, 2016
(in thousands of yen)

Cash and deposits
Cash and deposits in trust
Total

Due after 2 years
through 3 years-

Due after 3 years
through 4 years-

Due after 4 years
through 5 years-

Due after 5 years--

Note 4: Redemption of long-term loans payable and other interest-bearing debt scheduled to be due after the balance sheet date
First Fiscal Period
As of September 30, 2015
(in thousands of yen)

Short-term loans payable
Long-term loans payable
Tenant leasehold and security
deposits in trust
Total

Due in 1 year or
less
2,000,000-

Due after 1 year
through 2 years

421,435

421,435

421,435

421,435

421,435

842,870

2,421,435

421,435

4,271,435

2,621,435

7,421,435

24,142,870-

22

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

3,850,000

2,200,000

7,000,000

23,300,000

Kenedix Retail REIT Corporation (3453)
Second Fiscal Period
As of March 31, 2016
(in thousands of yen)

Short-term loans payable
Long-term loans payable
Tenant leasehold and security
deposits in trust
Total

Due in 1 year or
less
6,500,000-

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

3,850,000

5,650,000

7,000,000

7,000,000

27,500,000

435,430

435,430

435,430

435,430

435,430

763,938

6,935,430

4,285,430

6,085,430

7,435,430

7,435,430

28,263,938(Notes to Derivative Transactions)(1) Transactions not subject to hedge accounting
First Fiscal Period (As of September 30, 2015) and Second Fiscal Period (As of March 31, 2016): Not applicable(2) Transactions subject to hedge accounting
First Fiscal Period
As of September 30, 2015
Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
year

Fair value(in thousands of yen)Calculation method for
applicable fair value

Interest rate swap
transaction:
Long-term loans
31,750,000
31,750,000*
Receive/floating andpayablepay/fixed*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value is included in the fair value of thehedged long-term loans payable. (Please refer to “Notes to Financial Instruments (Note1) Methods to determine the estimated fair value of financial instruments and matters related toderivative transactions Liabilities (2) Long-term loans payable”.)
Special treatment
of interest-rate
swaps

Second Fiscal Period
As of March 31, 2016
Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
year

Fair value(in thousands of yen)Calculation method for
applicable fair value

Interest rate swap
transaction:
Long-term loans
44,900,000
44,900,000*
Receive/floating andpayablepay/fixed*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair value is included in the fair value of thehedged long-term loans payable. (Please refer to “Notes to Financial Instruments (Note1) Methods to determine the estimated fair value of financial instruments and matters related toderivative transactions Liabilities (2) Long-term loans payable”.)
Special treatment
of interest-rate
swaps(Notes to the Related-Party Transactions)
1．Parent Company, major corporate unitholders and otherFirst Fiscal Period (From October 3, 2014 to September 30, 2015) and Second Fiscal Period (From October 1, 2015 to March 31, 2016): Not applicable
2．Affiliated companies and otherFirst Fiscal Period (From October 3, 2014 to September 30, 2015) and Second Fiscal Period (From October 1, 2015 to March 31, 2016): Not applicable
3．Fellow subsidiary companies and otherFirst Fiscal Period (From October 3, 2014 to September 30, 2015) and Second Fiscal Period (From October 1, 2015 to March 31, 2016): Not applicable
4．Directors, major individual unitholders and otherFirst Fiscal Period (From October 3, 2014 to September 30, 2015) and Second Fiscal Period (From October 1, 2015 to March 31, 2016): Not applicable(Notes to the Tax-Effect Accounting)
1. The significant components of deferred tax assets and liabilities:(in thousands of yen)
Second Fiscal Period
As of March 31, 2016

First Fiscal Period
As of September 30, 2015
Deferred tax assets:
Enterprise tax payable

360

22

Amortization of leasehold right in trust

1,713

2,932

391
7,399
9,866

1,055
7,280
11,290

Valuation allowance(9,866)(11,290)

Total deferred tax assets--

Depreciation
Asset retirement obligations
Subtotal deferred tax assets

23Kenedix Retail REIT Corporation (3453)
2. The significant differences between the statutory tax rate and the effective tax rate:
First Fiscal Period
As of September 30, 2015
37.11

(unit: %)Second Fiscal Period
As of March 31, 2016
32.31

Deductible cash distributions
Others(36.98)0.21(32.35)0.08

Effective tax rate

0.34

0.04

Statutory tax rate

(Notes to Asset Retirement Obligations)
Asset retirement obligations reported on balance sheet
1. Summary of the asset retirement obligations
KRR has booked asset retirement obligations as it has original state restoration obligations in the fixed-term business-purpose land leasehold agreement accompanying regarding
Sunny Noma acquired on February 10, 2015.
2. Method of calculating asset retirement obligations
Asset retirement obligations are calculated based on a discount rate of 1.256% after the useful life has been estimated to be 22 years and two months based on the time period from thedate of acquisition to the expiration of the agreement.
3. Changes in the amount of applicable asset retirement obligations consisted of the following(in thousands of yen)First Fiscal Period
Second Fiscal Period
From October 3, 2014
From October 1, 2015
to September 30, 2015
to March 31, 2016
Balance at the beginning of the period
22,901
Increase due to acquisition of properties
22,711
Accretion adustment
190
143
Balance at the end of the period
22,901
23,045(Notes to the Segment Information)(Segment information)
Disclosure is omitted because the real estate leasing business is KRR’s sole business and it has no reportable segment subject to disclose.
(Related information)
First Fiscal Period (From October 3, 2014 to September 30, 2015)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on the statement of income andretained earnings.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income and retained earnings.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant and equipment on the balance sheet.
3. Information about each major customer
Disclosure is omitted because no net sales to a single external customer account for more than 10% of the operating revenue on the statement of income and retained earnings.
Second Fiscal Period (From October 1, 2015 to March 31, 2016)
1. Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on the statement of income andretained earnings.
2. Information about each geographic area
(1) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income and retained earnings.
(2) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant and equipment on the balance sheet.
3. Information about each major customer
Disclosure is omitted because no net sales to a single external customer account for more than 10% of the operating revenue on the statement of income and retained earnings.

24Kenedix Retail REIT Corporation (3453)(Notes to Investment and Rental Properties)
KRR owns retail properties for rental purposes mainly in the four major metropolitan areas and other regional areas of Japan.
The book value and fair value concerning the above real estate for rental purposes are as follows.
(in thousands of yen)
Second Fiscal Period
From October 1, 2015
to March 31, 2016

First Fiscal Period
From October 3, 2014
to September 30, 2015
Book value
Balance at the beginning of the period-

93,575,397

Changes during the period

93,575,397

40,441,190

Balance at the end of the period

93,575,397

134,016,587

Fair value at the end of the period
95,706,000
138,674,000
Note 1: Book value is acquisition cost less accumulated depreciation.
Note 2: Among changes in the amount of real estate for rental purposes that occurred during the first fiscal period, principal increases was the acquisitions of real estate trust
beneficiary interests in 19 properties totaling ¥93,873,555 thousand and the principal decrease was depreciation amounting to ¥560,766 thousand and during thesecond fiscal period, principal increases were the acquisition of real estate trust beneficiary interests in 14 properties totaling ¥40,195,716 thousand, the additional
acquisition of real estate trust beneficiary interest amounting to ¥383,790 thousand and the principal decrease was depreciation amounting to ¥565,717 thousand.
Note 3: The fair value at the end of the period is the appraisal value determined by outside appraisers.
The profit or loss for the period under review concerning investment and rental properties is indicated under “Notes to Statements of Income and Retained Earnings.”(Notes to Per Unit Information)
First Fiscal Period
From October 3, 2014
to September 30, 2015

Second Fiscal Period
From October 1, 2015
to March 31, 2016

Net asset value per unit

¥229,301¥225,291

Net income per unit

¥11,515¥6,846(¥7,434)
Note1:

Note2:Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during the period. The figure in brackets
in first fiscal period shows net income per unit based on the day-weighted average number of investment units outstanding during the period (260,034 units) assuming
the beginning date of the fiscal period is February 10, 2015, the day that the asset management actually started. Net income per unit after adjusting for residual units is notincluded because there were no residual investment units.
The basis for calculating net income per unit is as follows:First Fiscal Period
Second Fiscal Period
From October 3, 2014
From October 1, 2015
to September 30, 2015
to March 31, 2016

Net income (in thousands of yen)

1,933,270

Net income not available to ordinary unitholders (in thousands of yen)

2,427,915--

Net income available to ordinary unitholders (in thousands of yen)

1,933,270

2,427,915

Weighted average number of units during the period (units)

167,878354,62225

Kenedix Retail REIT Corporation (3453)(Notes to Significant Subsequent Events)
Issuance of new investment units
KRR passed resolutions at the Board of Directors Meeting held on March 31, 2016 and April 13, 2016, to issue new investment units to fund the acquisition of specified assets. Payments
for the issuance of new investment units through public offering and through third-party allotment have been completed on April 20, 2016 and May 18, 2016, respectively. KRR plans to
use the net proceeds through third-party allotment for the repayment of the loans payable of 800,000 thousand yen.
As a result, unitholders' capital totaled 94,256,390,300 yen and total number of investment units issued and outstanding increased to 422,450 as of May 18, 2016.
Issuance of new investment units through public offerings
Total number of units issued
Issue price (offer price)
Total amount of issue price (total offer price)
Paid-in amount (issue amount)
Total paid-in amount (total issue amount)
Payment date

64,000 units (Domestic 31,744 units, International 32,256 units)
256,717 yen per unit
16,429,888,000 yen
247,764 yen per unit
15,856,896,000 yen
April 20, 2016

Issuance of new investment units through third-party allotment
Total number of units issued
3,200 units
Paid-in amount (issue amount)
247,764 yen per unit
Total paid-in amount (total issue amount)792,844,800 yen
Payment date
May 18, 2016
Allottee
SMBC Nikko Securities Inc.

(Notes to Allowance for Temporary Difference Adjustments Additions and Reversals)
Second Fiscal Period (From October 1, 2015 to March 31, 2016)
For the Statements of Cash Distributions, KRR allocated an addition of 4,263 thousand yen to the allowance for temporary difference adjustments concerning theamortization of leasehold right in trust and the amount in excess of depreciation with regard to leasehold rights of Sunny Noma. KRR plans to reverse acorresponding amount when Sunny Noma is disposed.
(Omission of Disclosure)Notes to Securities, Equity-Method Income and Retained Earnings, and Retirement Payment are omitted as immaterial to disclose.

(9)Movements in Investment Units Issued and Outstanding
Movements in the number of investment units issued and outstanding and unitholders’ capital since its corporation are summarized in the following table.
Total Number of Units Issued andUnitholders’ Capital
Outstanding (units)(in million yen)
DateType of issue
Notes
Increase
Balance
Increase
Balance
October 3, 2014

Private placement forincorporation

February 9, 2015

750

750

150

150

(Note 1)

Public offering

254,250

255,000

56,43056,580(Note 2)

March 11, 2015

Capital increase throughthird-party allocation

5,750

260,750

1,276

57,857(Note 3)October 1, 2015

Public offering

88,750349,500

18,54776,404(Note 4)

October 21, 2015

Capital increase throughthird-party allocation

5,750

355,250

1,201

77,606(Note 5)Note 1:
Note 2:
Note 3:Note 4:Note 5:

Issued at issue price of 200,000 yen per unit for incorporation.
Issued at issue price of 230,000 yen per unit (issue amount of 221,950 yen per unit) for acquisition of new properties.
Issued at issue amount of 221,950 yen per unit for repayment of borrowings.
Issued at issue price of 216,543 yen per unit (issue amount of 208,991 yen per unit) for acquisition of new properties.
Issued at issue amount of 208,991 yen per unit for repayment of borrowings.

26

Kenedix Retail REIT Corporation (3453)
4. Resignation/Appointment of the Directors(1) Resignation/Appointment of the Director of the Investment Corporation
Not applicable(2) Resignation/Appointment of the Director of the Asset Management Company
Not applicable27

Kenedix Retail REIT Corporation (3453)
5. Reference Information(1) Component of Assets

Type ofSpecified Asset

Areas(Note 1)

Property typeTokyo
metropolitan area
Greater Osaka
area
Greater Nagoya
areaFirst fiscal period
as of September 30, 2015
Total Amount Held
Ratio
(Millions of Yen)(%)
(Note 2)
(Note 3)

Second fiscal period
as of March 31, 2016
Ratio
Total Amount Held(%)
(Millions of Yen)
(Note 2)
(Note 3)49,40545.6

64,43443.0

24,89823.0

41,499

27.7

5,458

5.0

5,444

3.6

Fukuoka area

1,527

1.4

1,513

1.0

Ordinancedesignated cities,
core cities andother areas

12,188

11.2

21,125

14.1

-

-

-

-

Total of Trust Beneficiary Interests in Real Estate

93,47886.2

134,016

89.3

Bank Deposits and Other Assets

14,90313.8

15,992

10.7

Total Assets

108,382

100.0

150,009

100.0

Trust BeneficiaryInterest in Real
EstateNeighborhood,community andother shopping
centers for daily
needs

Other retailproperties-

First fiscal period
as of September 30, 2015
Ratio
Amount(%)(Millions of Yen)
(Note 3)

Second fiscal period
as of March 31, 2016
Ratio
Amount(%)(Millions of Yen)
(Note 3)

Total Liabilities (Note 4)

48,591

44.8

69,974

46.6

Total Net Assets (Note 4)

59,79055.2

80,03453.4

108,382

100.0

150,009

100.0

Total Assets
Note 1:

Note 2:
Note 3:Note 4:“Areas” are categorized to the Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area and Ordinance-designated cities, core cities
and other areas. References to “Tokyo metropolitan area” are to the area that consists of Tokyo, Kanagawa, Saitama and Chiba prefectures. References to the “Greater
Osaka area” are to the area that consists of Osaka, Kyoto, Hyogo, Nara and Shiga prefectures. References to the “Greater Nagoya area” are to the area that consists of
Aichi, Gifu and Mie prefectures. References to the “Fukuoka area” are to the area that consists of Fukuoka prefecture. “Ordinance-designated cities, core cities and otherareas” refers to cities designated by government ordinance, which have populations of 500,000 persons or more, core cities, which have populations of 200,000 persons
or more, and to other areas with a population fewer than 200,000 persons, which we believe will have suitable customer traffic from surrounding areas.
“Total Amount Held” is the amount allocated in the balance sheets as of March 31, 2016 (figures are on a net book value basis after deducting depreciation), and isrounded down to the nearest million.
“Ratio” is the ratio of the amount allocated in the balance sheets to the total assets rounded to the nearest tenth.
“Total Liabilities” and “Total Net Assets” are those on the balance sheets.

28

Kenedix Retail REIT Corporation (3453)(2) Overview of the Portfolioi) Overview of Assets Owned
The following summarizes the real estate or the real estate properties in trust owned by KRR as of March 31, 2016.
Property
number

Property
type(Note 1)

T-1

CSC

T-2

T-3

T-4

Urban
Station-Front
SC
Urban
Station-Front
SC
Urban
Station-Front
SC

Property nameLocation(City or Ward,
Prefecure)(Note 2)

15,20014,848

11.3

MONA Shin-Urayasu

Urayasu, Chiba

Trust beneficiaryinterest in real estate

8,275

8,500

8,063

6.1

Passaggio Nishiarai

Adachi ward, Tokyo

Trust beneficiaryinterest in real estate

5,934

6,280

5,850

4.4

Daikanyama Address
Dixsept

Shibuya ward, Tokyo

Trust beneficiaryinterest in real estate

5,441

5,620

5,390

4.1

4,381

4,420

4,379

3.3

4,018

4,300

4,000

3.0

3,642

3,770

3,600

2.7

2,591

2,720

2,586

2.0

4,890

5,260

4,815

3.7

3,210

3,390

3,169

2.4

3,043

3,010

3,000

2.3

1,726

1,740

1,700

1.3

1,462

1,460

1,442

1.1

788

799

760

0.6

8,494

8,780

8,389

6.4

2,727

2,870

2,685

2.0

2,168

2,410

2,140

1.6

11,585

11,60011,000

8.4

T-6

NSC

Yorktown KitaKaname

Hiratsuka, Kanagawa

T-7

NSC

Unicus Yoshikawa

Yoshikawa, Saitama

T-10

SS

T-11

NSC

T-12

NSC

T-13

SM

T-14

SM

O-1

NSC

O-2

SM

O-3

NSC

O-4
O-5
O-6

NSC
Urban
Station-Front
SC
Urban
Station-Front
SC

Share
(%)
(Note 5)15,026

Kitaadachi-gun, Saitama

NSC

Acquisition
price(in millions)(Note 4)

Trust beneficiaryinterest in real estate

Unicus Ina

T-9

Evaluation value(in millions)(Note 3)

Yachiyo, Chiba

NSC

SS

Book value(in millions)

Fululu Garden
YachiyoT-5

T-8

Ownership
form

Sports Club
Renaissance
Fujimidai
Super Viva Home
Iwatsuki (Land)
K’s Denki ShonanFujisawa (Land)
Unicus Kamisato(Land)
Unicus Konosu (Land)
Inageya Yokohama
Minamihonjuku (Land)
Gourmet City ChibaChuo
Blumer Maitamon
Central Square
Takadono (Land)
Piago Kahma Home
Center Omihachiman

Nerima ward, Tokyo
Saitama, Saitama
Fujisawa, Kanagawa
Kodama-gun, Saitama
Konosu, Saitama
Yokohama, Kanagawa
Chiba, Chiba
Kobe, Hyogo
Osaka, Osaka
Omihachiman, Shiga

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate

Blumer HAT Kobe

Kobe, Hyogo

Carino Esaka

Suita, Osaka

Trust beneficiaryinterest in real estate

6,612

6,590

6,555

5.0

COMBOX Komyoike

Izumi, Osaka

Trust beneficiaryinterest in real estate

6,502

6,920

6,450

4.9

Hankyu Oasis
Hirakatadeguchi
WelciaKishiwadakamori(Land)
Life
Nishi-Tengachaya
Kahma Home Center
Nakagawa Tomita(Land)
Valor IchinomiyaNishi
K’s Denki
Nakagawa Tomita(Land)

Hirakata, Osaka

Trust beneficiaryinterest in real estate

1,333

1,310

1,280

1.0

Kishiwada, Osaka

Trust beneficiaryinterest in real estate

497

500

487

0.4

Osaka, Osaka

Trust beneficiaryinterest in real estate

1,577

1,620

1,505

1.1

Nagoya, Aichi

Trust beneficiaryinterest in real estate

2,351

2,500

2,311

1.8

Ichinomiya, Aichi

Trust beneficiaryinterest in real estate

2,184

2,230

2,174

1.7

Nagoya, Aichi

Trust beneficiaryinterest in real estate

907

945

889

0.7

1,513

1,520

1,497

1.1

10,112

10,70010,046

7.6

1,493

1,570

1,469

1.1

908

909

898

0.7

4,398

5,060

4,180

3.2

O-7

SM

O-8

SS

O-9

SM

N-1

SS

N-2

NSC

N-3

SS

F-1

SM

Sunny Noma

Fukuoka, Fukuoka

R-1

NSC

Roseo Mito

Mito, Ibaraki

R-2

SS

R-3

SS

R-4

NSC

K’s Denki Aomori
HontenSuper Sports Xebio
Aomori-Chuo
Ashico Town Ashikaga

Aomori, Aomori
Aomori, Aomori
Ashikaga, Tochigi

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate29

Kenedix Retail REIT Corporation (3453)

Property
number

Property
type(Note 1)

R-5

NSC

R-6

SM

Location(City or Ward,
Prefecure)(Note 2)

Property nameYorktown ShindenHigashi
Kasumi Technopark
SakuraSendai, Miyagi
Tsukuba, Ibaraki

Ownership
form
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate

Total
Note 1:

Note 2:
Note 3:Note 4:Note 5:

Book value(in millions)

Evaluation value(in millions)(Note 3)Acquisition
price(in millions)(Note 4)

3,352

3,310

3,252

2.5

859

861

830

0.6

134,016

138,674

131,639

100.0

Share
(%)
(Note 5)

Properties are categorized into the following five types of retail properties for daily needs: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC (Community
Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center) and SS (Specialty Store). For the details of each type of retail properties, please refer“Section 2.Investment Policies and Status of Asset Management, (2) Status of Asset Management (Overview of the Period), iii) Management Performance, (A)Acquisition of Assets”.
“Location” indicates the residential address. For those without a residential address, the building or land address on the registry (one of the addresses for those that havemultiple addresses) is shown.
“Evaluation value” shows the appraisal value stated on the real estate appraisal report created by the real estate appraisers of Daiwa Real Estate Appraisal Co., Ltd., Japan
Real Estate Institute and The Tanizawa Sōgō Appraisal Co., Ltd. in accordance with the methods and standards for asset valuation as stipulated in the KRR Articles ofIncorporation as well as the regulations as stipulated by The Investment Trusts Association, Japan.
“Acquisition price” indicates the transfer price of the property to be acquired designated in each sale and purchase agreement (excluding the acquisition expenses, property
taxes, city planning taxes and consumption taxes, and rounded down to the nearest million yen). In addition, for Roseo Mito, acquisition price includes 371 million yen(excluding expenses and taxes and rounded down to the nearest million yen) on the construction contract and construction design/supervision outsourcing contracts related
to construction of the building for the secondhand shop building (property expansion).
“Share” represents the percentage of the acquisition price for each property in the total acquisition price, rounded to the nearest tenth.

30

Kenedix Retail REIT Corporation (3453)
ii) Overview of tenants as of March 31, 2016
The following summarizes leasable area, occupancy rate, number of tenants, annual rent, and amount of security deposits
Property
number

Property nameLeasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

Occupancy
rate(%)(Note 3)

Number oftenants(Note 4)

Annual rent
(thousands)(Note 5)

Amount of
security
deposits(millions)(Note 6)

T-1

Fululu Garden Yachiyo

77,057.56

76,563.55

99.4

48

1,070,142

3,800

T-2

MONA Shin-Urayasu

9,568.31

9,191.77

96.1

1(72)

601,774

615

T-3

Passaggio Nishiarai

10,546.25

10,366.25

98.3

1(40)

401,601

233

T-4

Daikanyama Address Dixsept

5,056.39

4,991.03

98.7

1(27)

361,818

354

T-5

Unicus Ina

13,044.37

13,044.37

100.0

1

(Note 7)(Note 7)

T-6

Yorktown Kita-Kaname

T-7

Unicus Yoshikawa

T-8

Sports Club
Renaissance Fujimidai

3,120.87

3,120.87

100.0

1

T-9

Super Viva Home Iwatsuki (Land)

67,325.95

67,325.95

100.0

1

T-10

K’s Denki Shonan-Fujisawa (Land)

15,578.58

15,578.58

100.0

1

T-11

Unicus Kamisato (Land)

67,854.47

67,854.47

100.0

1

T-12

Unicus Konosu (Land)

19,329.00

19,329.00

100.0

1

10,620.04

10,537.19

100.0

1

99.2

1(10)

T-13

Inageya Yokohama Minamihonjuku (Land)

4,405.41

4,405.41

100.0

1

T-14

Gourmet City Chiba-Chuo

3,488.77

3,488.77

100.0

1

O-1

Blumer Maitamon

30,037.11

29,888.11

99.5

48

O-2
O-3

Central Square
Takadono (Land)
Piago Kahma Home Center
Omihachiman

200(Note 7)(Note 7)141

145,01170

83,014(Note 7)(Note 7)39
(Note 7)(Note 7)690,772(Note 7)(Note 7)420
(Note 7)(Note 7)100.0

114,313.00

14,313.00

100.0

2

24,185.02

23,871.33

98.7

1(40)

647,248827

7,474.92

99.1

1(30)

296,611238

452,523(Note 9)(Note 7)(Note 7)471
(Note 10)(Note 7)(Note 7)89,740276

O-5

Carino Esaka

7,540.58

O-6

COMBOX Komyoike

25,530.44(Note 8)25,530.44

100.0

1

O-7

Hankyu Oasis Hirakatadeguchi

2,960.38

2,960.38

100.0

1

O-8

Welcia Kishiwadakamori (Land)3,033.45

3,033.45

100.0

1

O-9

Life Nishi-Tengachaya

2,679.52

2,679.52

100.0

1

N-1

Kahma Home Center
Nakagawa Tomita (Land)

100.0

1

N-2

Valor Ichinomiya-Nishi

100.0

1

N-3

K’s Denki
Nakagawa Tomita (Land)

100.0

1

F-1

Sunny Noma

2,814.67

2,814.67

100.0

1

R-1

Roseo Mito

48,296.15

48,296.15

100.0

1(23)

R-2

K’s Denki Aomori Honten

10,083.41

10,083.41

100.0

1

R-3

Super Sports Xebio
Aomori-Chuo

100.0

1

R-4

Ashico Town Ashikaga

65,616.31

65,019.74

99.1

1(26)

R-5

Yorktown Shinden-Higashi

12,768.77

12,768.77

100.0

2

R-6

Kasumi Technopark Sakura

2,047.65

2,047.65

100.0

1

Total

609,026.59

606,702.91

99.6

389

Note 3:

256,285(Note 7)(Note 7)(Note 7)

4,437.07

Blumer HAT Kobe

Note 2:

136(Note 7)

4,437.07

O-4

Note 1:

263,472(Note 7)(Note 7)(Note 7)

9,447.48(Note 7)(Note 7)

9,447.48(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)(Note 7)

693,849(Note 7)(Note 7)461
174
(Note 7)

383,911(Note 7)(Note 7)
8,785,490

324(Note 7)24
10,633“Leasable area” is equivalent to gross floor area of space that we consider to be available for lease in each property, rounded to the nearest tenth. For land-only properties,
leasable area is equivalent to land area as described in the property registry.
“Leased area” indicates the total leased area based on the lease agreements for each property as of March 31, 2016. As for lease agreements of buildings, the leased area of
warehouses and land are excluded. As for pass-through type master leases (the master lease in which rent received by the lessor is in principle the same amount as the rent
received by the master lessee from end-tenants), the leased area based on the lease agreements between the master lessee and the end-tenants as of March 31, 2016 isshown. As for sublease type master leases (the master lease in which a fixed amount of rent is received from the master lessee.), the leased area to the master lessee isshown.
The occupancy rate is calculated by dividing leased area by leasable area as of March 31, 2016, rounded to the nearest tenth. The “Total” of “Occupancy rate” represents
the average occupancy rate of all properties in the initial portfolio.

31Kenedix Retail REIT Corporation (3453)
Note 4:Note 5:Note 6:Note 7:Note 8:Note 9:Note 10:

Number of tenants is based upon the number of lease agreements with respect to the building(s) (or land in the case of land-only properties with leasehold interest) on eachsuch property used mainly as stores and offices, as of March 31, 2016. Where one lessee leases more than one section of the property, the lessee is counted as a tenant foreach section leased within the property. Where pass-through type master lease agreements are entered into, the number of master lessees is with the number of end-tenants
indicated in parentheses. Where sublease type master lease agreements are entered into, the indicated, number of master lessee is shown. The “Total” of “Number oftenants” shows the total number of tenants. As for pass-through type master leases, the number of end-tenants is used for calculation. As for sublease type master leases,
the number of master lessee is used for calculation.
“Annualized fixed rent” is generally calculated by multiplying the monthly fixed rent and common area charges under a leasing contract with tenants at portfolio properties
as of March 31, 2016 (excluding warehouses in the case of building lease agreements) by twelve and rounding down to the nearest thousand yen. For master leases, where
the master lease company sub-leases space to other tenants, the fixed monthly rent under the master lease contract is multiplied by twelve, rounded down to the nearest
thousand yen.
“Tenant leasehold and security deposits” indicates the outstanding balance of any tenant leasehold and security deposit from the relevant end-tenant(s) set forth in leaseagreement(s) effective as of March 31, 2016 (excluding warehouses in the case of building lease agreements), rounded down to the nearest million yen.
We have not obtained consent from the tenant(s) to release this information.
The total area that we own exclusively as a compartmentalized ownership interest (retail space) is shown.
Calculated by multiplying the monthly rent and common area charges for March 2016 under the leasing contract by twelve and also taking into consideration theownership ratio (93.20%) under the compartmentalized ownership agreement.
Calculated by multiplying the tenant leasehold and security deposits for the whole building as of March 2016 by the ownership ratio (93.20%).

32

Kenedix Retail REIT Corporation (3453)
iii) Overview of the appraisal reports
The following show the summaries of the appraisal reports is the appraisal value of the acquired properties described in each real estate appraisal report
prepared by real estate appraisers, including Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute, and The Tanizawa Sōgō Appraisal Co., Ltd.
as requested by KRR, based on an important notice concerning real estate appraisal in the context of the Act on Investment Trusts and Investment
Corporations, Act on Real Estate Appraisal (Act No. 152 of 1963, including subsequent revisions) and real estate appraisal standards. The appraisal value
is the judgment and opinion of the appraiser at a fixed point in time, with no guarantees as to the validity or accuracy of the report, nor to the possibility oftransactions at the appraised value. There are no special relations of interest between Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute,and The Tanizawa Sōgō Appraisal Co., Ltd. and KRR or KFM.
Estimated value
Cash flow-based method
Appraisal
Evaluation
value
date
(in
millions)

Cost
method(inmillions)

Appraisal NOI
yield
Appraisal(%)
NOI(Note 2)Estimated
Estimated
Terminal
Capitalization rate
Discount rate
(in millions)
value
value
capitalization(%)(%)(Note 1)
(in millions)(in millions)rate (%)

Property
number

Property nameAppraiser

T-1

Fululu Garden Yachiyo

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,2016

15,20021,10015,3004.7

15,100

4.5

4.9

760

5.1

T-2

MONAShin-Urayasu

Japan Real Estate InstituteMar. 31,
2016

8,500

6,820

8,550

5.3

8,440

5.0

5.5

495

6.1

T-3

Passaggio Nishiarai

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

6,280

8,890

6,420

4.4

6,220

4.2

4.6

288

4.9

T-4

DaikanyamaAddress Dixsept Japan Real Estate InstituteMar. 31,
2016

5,620

4,680

5,710

3.8

5,520

3.6

4.0

219

4.1

T-5

Unicus Ina

Japan Real Estate InstituteMar. 31,
2016

4,420

4,020

4,450

5.2

4,380

4.9

5.4

235

5.4

T-6

Yorktown Kita-Kaname

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

4,300

2,620

4,350

5.0

4,280

4.8

5.2

215

5.4

T-7

Unicus Yoshikawa

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

3,770

4,820

3,840

4.8

3,740

4.6

5.0

184

5.1

T-8

Sports Club Renaissance
Fujimidai

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

2,720

1,710

2,760

4.7

2,700

4.5

4.9

128

5.0

-

207

4.3

-

159

5.0

-

138

4.6

-

77

4.6

Direct capitalization method

DCF method(year 1-17)
T-9

Super Viva Home Iwatsuki(Land)The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

5,260

-

-

-

5,260

4.7
(year 18-36.7)

4.8(year 1-12)
T-10

K’s Denki Shonan-Fujisawa(Land)The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

3,390

-

-

-

3,390

4.6
(year 13-31.6)

4.7(year 1-15)

4.7
T-11

Unicus Kamisato (Land)

The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

3,010

-

-

-

3,010

(year 16-30)

4.8(year 31-39.5)

4.9(year 1-15)

4.6
T-12

Unicus Konosu (Land)

The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

1,740

-

-

-

1,740

(year 16-30)

4.7(year 31-39.5)

4.8
T-13

Inageya Yokohama
Minamihonjuku (Land)

Japan Real Estate InstituteMar. 31,
2016

1,460

-

-

-

1,460

4.0

4.6

64

4.5

T-14

Gourmet City Chiba-Chuo

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

799

1,080

795

5.2

800

5.0

5.4

43

5.8

O-1

Blumer Maitamon

The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

8,780

9,200

8,770

5.5

8,790

5.6

5.7

487

5.8

-

128

4.8

(year 1-9)

4.4
O-2

Central Square Takadono(Land)The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

2,870

-

-

-

2,870

(year 10-19)

4.5(year 20-39.3)

4.6
Japan Real Estate InstituteMar. 31,
2016

2,410

2,350

2,440

6.4

2,370

6.1

6.6

151

7.1

Blumer HAT Kobe

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,2016

11,60014,50011,7004.9

11,500

4.7

5.1

569

5.2

O-5

Carino Esaka

Japan Real Estate InstituteMar. 31,
2016

6,590

6,480

6,630

4.8

6,540

4.5

5.0

339

5.2

O-6

COMBOX Komyoike

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

6,920

7,800

7,070

5.2

6,850

4.9

5.4

388

6.0

O-7

Hankyu Oasis
Hirakatadeguchi

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

1,310

905

1,320

5.6

1,310

5.4

5.8

75

5.9

O-8

Welcia Kishiwadakamori(Land)

Japan Real Estate InstituteMar. 31,
2016

500

-

-

-

500

4.0

4.6

21

4.5

O-9

Life
Nishi-Tengachaya

The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

1,620

1,610

1,650

4.9

1,610

5.0

5.1

79

5.3

O-3

Piago Kahma Home Center
Omihachiman

O-4

33

Kenedix Retail REIT Corporation (3453)
Estimated value
Cash flow-based method
Property
number

Property nameAppraiser

Appraisal
Evaluation
value
date
(in
millions)

Cost
method(inmillions)

Appraisal NOI
yield
Appraisal(%)
NOI(Note 2)Estimated
Estimated
Terminal
Capitalization rate
Discount rate
(in millions)
value
value
capitalization(%)(%)(Note 1)
(in millions)(in millions)rate (%)
Direct capitalization method

DCF method(year 1-17)

4.8

N-1

Kahma Home Center
Nakagawa Tomita (Land)

The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

2,500

-

-

-

2,500

(year 1837.2)

N-2

Valor Ichinomiya-Nishi

Japan Real Estate InstituteMar. 31,
2016

2,230

1,880

2,240

5.3

2,220

5.0

N-3

K’s Denki Nakagawa
Tomita (Land)

The Tanizawa Sōgō
Appraisal Co., Ltd.

Mar. 31,
2016

1,520

1,230

1,550

5.1

1,480

-

120

5.2

5.5

128

5.9

-

46

5.2

4.9

5.5

80

5.4

4.9

(year 1-17)

4.8
945

-

-

-

945

(year 1837.2)

4.9
F-1

Sunny NomaJapan Real Estate InstituteMar. 31,2016

R-1

Roseo Mito

Japan Real Estate InstituteMar. 31,2016

10,7009,530

10,7005.5

10,600

5.2

5.7

595

5.9

R-2

K’s Denki Aomori Honten

Japan Real Estate InstituteMar. 31,
2016

1,570

1,700

1,580

5.8

1,560

5.5

6.0

95

6.5

R-3

Super Sports Xebio AomoriChuo

Japan Real Estate InstituteMar. 31,
2016

909

867

913

5.8

904

5.5

6.0

57

6.4

5,080

5.4
(Building)
5.0

270

6.5

R-4

Ashico Town Ashikaga

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

5,060

8,350

5,050

(Land)(Note 3)

5.2
(Building)
5.6
5.0 (Building)(Land)

R-5

Yorktown Shinden-Higashi

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

3,310

5,090

3,320

5.6

3,310

5.4

5.8

195

6.0

R-6

Kasumi Technopark Sakura

Daiwa Real EstateAppraisal Co., Ltd.

Mar. 31,
2016

861

763

869

5.2

857

5.0

5.4

46

5.6

138,674

127,995

118,007-

137,806

-

-

7,099

5.4

Total/Average

Note 1:

Note 2:
Note 3:“Appraisal NOI” is the Net Operating Income calculated by subtracting the amount of operating expenses from the operating revenues described in relevant appraisal
reports, and it is the income before depreciation and differs from NCF (Net Cash Flow) which is calculated by adding investment gains from such as deposits andsubtracting capex from NOI. The above appraisal NOI is calculated using the direct capitalization method. However, where the direct capitalization method is notapplicable, appraisal NOI indicates the net operating income for the first year based on the DCF method. The amounts are rounded down to the nearest one million yen.
“Appraisal NOI yield” indicates the value calculated using the following formula and rounded to the nearest tenth. The “Total/average” of “Appraisal NOI yield” indicatesthe average appraisal NOI yield which is a weighted average of appraisal NOI yields of the acquired properties (rounded to the nearest tenth).
Appraisal NOI of each property / Acquisition price for each property.
Inwood method discount rate is shown for discount rate of land-only properties.

34

Kenedix Retail REIT Corporation (3453)
iv) Overview of builing condition investigation reports
KRR has obtained engineering reports, containing the diagnosis of building deteriorations, short- and long-term repair and maintenance plans, theassessment of legal compliance with the Building Standard Act and other laws and regulations, the investigation of hazardous substances in a building andsoil environment for the acquired properties and the to-be acquired properties. These reports represent judgement and opinion of the appraisers for a fixed
point of time, with no guarantees as to the validity or accuracy of the report.
Property
Number

Property name

Investigation company

Investigation
performed in

Repairs, maintenance and renovation
expensesRequired over theRequired over the
next 12 years
next 12 years(thousand yen)(thousand yen)
(Note1)(Note1)

T-1

Fululu Garden Yachiyo

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

980,970

0

T-2

MONA Shin-Urayasu

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

921,734

16,696

T-3

Passaggio Nishiara

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

125,949

0T-4

Daikanyama Address Dixsept

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

145,352

0

T-5

Unicus Ina

HI International Consultant
Co., Ltd.

Aug. 2014

118,760

1,110

T-6

Yorktown Kita-Kaname

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

13,213

1,775

T-7

Unicus Yoshikawa

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

59,1320

T-8

Sports Club Renaissance Fujimidai

HI International Consultant
Co., Ltd.

Sep. 2014

23,780400

T-9Super Viva Home Iwatsuki (Land)(Note2)

-

-

-

T-10

K’s Denki Shonan-Fujisawa (Land)(Note2)

-

-

-

T-11

Unicus Kamisato (Land)(Note2)

-

-

-

T-12

Unicus Konosu (Land)(Note2)

-

-

-

T-13

Inageya Yokohama Minamihonjuku (Land)(Note2)

-

-

-

T-14

Gourmet City Chiba-Chuo

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

O-1

Blumer Maitamo

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

O-2

Central Square Takadono (Land)

O-3

Piago Kahma Home Center Omihachiman

HI International Consultant
Co., Ltd.

Aug. 2014

56,850180

O-4Blumer HAT Kobe

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Mar. 2015

326,565

3,959

O-5

Carino Esaka

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Aug. 2015

424,506

6,443

O-6

COMBOX Komyoike

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Aug. 2015

355,643

0O-7

Hankyu Oasis Hirakatadeguchi

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Aug. 2015

57,1750

O-8

Welcia Kishiwadakamori (Land)

-

-

O-9

Life Nishi-Tengachaya

15,4642,225

N-1

Kahma Home Center Nakagawa Tomita(Land)

-

-

N-2

Valor Ichinomiya-Nishi

177,790

2,690

N-3

K’s Denki Nakagawa Tomita (Land)

-

-

F-1

Sunny Noma

41,960420(Note2)

Aug. 2015

24,669131

Nov. 2014

211,954

0

-

-

-

(Note2)-

Tokio Marine & Nichido
Risk Consulting Co., Ltd.
(Note2)

Sep. 2015-

HI International Consultant
Co., Ltd.
(Note2)

Aug. 2014-

HI International Consultant
Co., Ltd.

35

Aug. 2014

Kenedix Retail REIT Corporation (3453)

Property
Number

Property name

Investigation
performed in

Investigation company

Repairs, maintenance and renovation
expensesRequired over theRequired over the
next 12 years
next 12 years(thousand yen)(thousand yen)
(Note1)(Note1)

R-1

Roseo Mito

HI International Consultant
Co., Ltd.

Aug. 2014(Secondhand Shop building:
Oct. 2015)

238,790

550

R-2

K’s Denki Aomori Honten

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

142,764

0

R-3

Super Sports Xebio Aomori-Chuo

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Nov. 2014

103,0120

R-4

Ashico Town Ashikaga

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Aug. 2015

327,2640R-5Yorktown Shinden-Higashi

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Jul. 2015

176,945

4,163

R-6

Kasumi Technopark Sakura

Tokio Marine & Nichido
Risk Consulting Co., Ltd.

Aug. 2015

18,1550

5,088,396

40,742

Total
Note 1:
Note 2:Of the “Repairs, maintenance and renovation expenses,” “Required over the next 12 years” indicates the total expenses required during the next 12 years from the date of
the investigation report and “Required within one year” indicates the total expenses required within 1 year from the date of the investigation report. All figures aretruncated to thousands of yen as in the investigation reports.
Since these are land-only properties, KRR did not obtain the engineering report but obtained history survey report on the land use from Field Partners.

36

Kenedix Retail REIT Corporation (3453)
v) Overview of seismic PML evaluation report
The following summary is based on the Portfolio Earthquake PML Evaluation Report created by the Sompo Risk Management & Health Care Inc. (Note1) as of January 2016. However, KRR does not guarantee the accuracy of evaluations in the report. The report only represents judgement and opinion of
the appraiser for a fixed point of time, with no guarantees as to the validity or accuracy of the report. There is no special interest between the Sompo Risk
Management & Health Care Inc. and KRR or KFM.
Property
PML value in seismic review (%)
Property namenumber(Note 2)
Specialty store building 10.24
T-1
Fululu Garden Yachiyo
Ito-Yokado building 8.96
Retail building 5.98
T-2
MONA Shin-Urayasu
Parking lot building 5.97
T-3
Passaggio Nishiarai
3.13
T-4

Daikanyama Address Dixsept

11.11

T-5

Unicus Ina

4.51

T-6

Yorktown Kita-Kaname

8.72

T-7

Unicus Yoshikawa

3.26

T-8

Sports Club Renaissance Fujimidai

7.09

T-9

Super Viva Home Iwatsuki (Land)

-

T-10

K’s Denki Shonan-Fujisawa (Land)

-

T-11

Unicus Kamisato (Land)

-

T-12

Unicus Konosu (Land)

-

T-13

Inageya Yokohama Minamihonjuku (Land)

-

T-14

Gourmet City Chiba-Chuo

1.82

O-1

Blumer Maitamon

1.52

O-2

Central Square Takadono (Land)
Piago Kahma Home Center
Omihachiman

O-3

Piago building 3.95
Kahma Home Center building 5.22

O-4

Blumer HAT Kobe

4.69

O-5

Carino Esaka

3.17

O-6

COMBOX Komyoike

5.04

O-7

Hankyu Oasis Hirakatadeguchi

4.11

O-8

6.32

N-1

Welcia Kishiwadakamori (Land)
Life
Nishi-Tengachaya
Kahma Home Center Nakagawa Tomita (Land)

N-2

Valor Ichinomiya-Nishi

10.18

N-3

K’s Denki Nakagawa Tomita (Land)

F-1

Sunny Noma

O-9

R-1

Roseo Mito

R-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio Aomori-Chuo-

Coffee shop building
Mall building
Sports facility building
Hardware store building
Secondhand shop building
K’s denki building
TSUTAYA/Hard-off building

1.95
7.41
6.70
9.69
9.68
7.85
1.61
1.51
1.52

R-4

Ashico Town Ashikaga

R-5

Yorktown Shinden-Higashi

Shopping mall building 2.16
Extensions 1.91
Cinema building 2.28
Road-side building 2.59
3.43

R-6

Kasumi Technopark Sakura

6.40

Portfolio PML value (Note 3)

2.54

Note 1:
Note 2:
Note 3:

Sompo Japan Nipponkoa Risk Management Inc. merged with Healthcare Frontier Japan Inc. and Sompo Japan Nipponkoa Healthcare Services Inc.
and changed its name to Sompo Risk Management & Health Care Inc. effective as of April 1, 2016.
PML is rounded to the nearest hundredth.
“Portfolio PML value” is the portfolio PML value of 24 properties that excludes Super Viva Home Iwatsuki (Land), K’s Denki Shonan-Fujisawa(Land), Unicus Kamisato (Land), Unicus Konosu (Land), Inageya Yokohama Minamihonjuku (Land), Central Square Takadono (Land), Welcia
Kishiwadakamori (Land), Kahma Home Center Nakagawa Tomita (Land), and K’s Denki Nakagawa Tomita (Land) and is based on the Portfolio
Earthquake PML Evaluation Report created by Sompo Risk Management & Health Care Inc. as of January 2016.

37

Kenedix Retail REIT Corporation (3453)
vi) Architect, structural engineer, construction company and construction confirmation authority
Property
number

Property name

Architect

Structural engineer

Construction company

Construction
confirmation authority

T-1

Fululu Garden
Yachiyo(Ito Yokado Yachiyo)
Research Institute ofArchitechture, Tokyo Branch(Fululu Garden Yachiyo)
Research Institute ofArchitechture,Tokyo Branch(Ito Yokado Yachiyo)
Research Institute ofArchitechture,Tokyo Branch(Fululu Garden Yachiyo)
Research Institute ofArchitechture,Tokyo Branch(Ito Yokado Yachiyo)
Takenaka Corporation,
Higashi-Kanto Branch(Fululu Garden Yachiyo)
Takenaka Corporation,
Higashi-Kanto Branch

The Building Center of
Japan

T-2

MONA ShinUrayasu

Haseko Corporation,
Engineering Division

Haseko Corporation,
Engineering Division

Haseko Corporation

Chiba Prefecture

T-3

Passaggio Nishiarai

Yamashita Sekkei Inc.

Yamashita Sekkei Inc.

Nishimatsu Construction Co.,Ltd.

Tokyo Prefecture

T-4

Daikanyama Address Nihon Sekkei, Inc.
Dixsept

Nihon Sekkei, Inc.

Kajima Corporation

Tokyo Prefecture

T-5

Unicus Ina

Taisei Corporation,
Registered architect office

Taisei Corporation,
Registered architect office

Taisei Corporation

Bureau Veritas Japan
Co., Ltd.

T-6

Yorktown KitaKaname

CB Richard Ellis Asset Services
K.K.

Sankyoline Corporation

Asanuma Corporation

K.K. Building
Navigation

T-7

Unicus Yoshikawa

Obayashi Corporation

Obayashi Corporation

Obayashi Corporation

Saitama Housing
Inspection Center

T-8

Sports Club
Renaissance Fujimidai

K.K. Axs Engineering

K.K. Axs Engineering

Ichiken Co., Ltd.

Nerima ward

T-9

Super Viva Home
Iwatsuki (Land)

-

-

-

-

T-10

K’s Denki ShonanFujisawa (Land)

-

-

-

-

T-11

Unicus Kamisato(Land)

-

-

-

-

T-12

Unicus Konosu(Land)

-

-

-

-

T-13

Inageya Yokohama
Minamihonjuku(Land)

-

-

-

-

T-14

Gourmet City
Chiba-Chuo

Nikken Sekkei Ltd.

Nikken Sekkei Ltd.

Consortium of Taisei
Corporation and Shimizu
Corporation

The Building Center of
Japan

O-1

Blumer Maitamon

Asanuma Corporation

Asanuma Corporation

Daiwa System Co., Ltd.

Bureau Veritas Japan
Co., Ltd.

O-2

Central Square
Takadono (Land)

O-3

Piago Kahma
Home Center
Omihachiman(Piago building）
Kiuchi Construction Co., Ltd.
(Kahama Home Center building)
Daiken Tosikaihatu Co., Ltd.

(Piago building）
Kiuchi Construction Co., Ltd.
(Kahama Home Center building)
Daiken Tosikaihatu Co., Ltd.

(Piago building）
K.K. Organization of
Kiuchi Construction Co., Ltd.
Confirmation &(Kahama Home Center building) Inspection Annex
Aisawa Construction Co., Ltd. (Note2)O-4Blumer HAT Kobe

Obayashi Corporation

Obayashi Corporation

Obayashi Corporation

O-5

Carino Esaka

Tokyu Architects & Engineers Inc.
(for new building construction)
Tokyu Architects & Engineers
Tokyu Construction Co., Ltd.
Inc.
Tokyu Construction Co., Ltd.
(for property expansion)

O-6

COMBOX
Komyoike

Daiwa House Industry Co., Ltd.

Daiwa House Industry Co.,Ltd.

Daiwa House Industry Co.,
Ltd.

General Building
Research Corporationof JapanO-7

Hankyu Oasis
Hirakatadeguchi

Rui Sekkeishitsu Co., Ltd.

Rui Sekkeishitsu Co., Ltd.

Obara Construction Co.,
Ltd.

General Building
Research
Corporation of Japan

-

-

38

-

-

Center of International
Architectural Standard
Co., Ltd.

Suita City

Kenedix Retail REIT Corporation (3453)
Property
number

Property name

Architect

Structural engineer

Construction company

Construction
confirmation authority

O-8

WelciaKishiwadakamori(Land)

-

-

-

-

O-9

Life
Nishi-Tengachaya

Nihon Kensetsu Co., Ltd.

Center ofInternational
ArchitecturalStandard Co., Ltd.

N-1

Kahma Home Center
Nakagawa Tomita(Land)--

N-2

Valor IchinomiyaNishi

N-3

K’s Denki
Nakagawa Tomita(Land)

F-1

Sunny Noma

Nakamuta & Suenaga
Designing (JV)

Nakamuta & Suenaga
Designing (JV)

Nishimatsu Construction Co.,
Ltd., Kyushu Branch

Roseo Mito

(Coffee shop building)
Tetsu Works Architect Office(Mall building)
Kurehanishiki Construction Co., Ltd.
Change of use:
Registered Architect
Studio Work House(Sports facility building)
Kishi-Sekkei Co., Ltd.
(Hardware store building)
Nihon Jutaku Corporation,
Registered Architect Office(Secondhand shop building)Choeihands Corporation(Coffee shop building)
Tetsu Works Architect Office(Mall building)
Sezako StructuralEngineering Office(Sports facility building)Individual (Note 3)(Hardware store building)
K.K. Dan StructuralEngineering Office(Secondhand shop building)
Converse Corporation(Coffee shop building)
Kurehanishiki Construction
Co., Ltd.
(Mall building)
Kurehanishiki
Construction Co., Ltd.
(Sports facility building)
Kurehanishiki
Construction Co., Ltd.
(Hardware store building)
Nihon Jutaku Corporation(Secondhand shop building)Choeihands Corporation

Aomori City

R-1

KIA Urban Planning andArchitects Institute Co., Ltd.

Fujita Corporation

Chubu Sekkei Co.,Ltd.

Chubu Sekkei Co.,Ltd.

--

Tsuchiya Corporation-

Ichinomiya City
Fukuoka City

(Coffee shopbuilding)(Mall building)(Sports facility
building)(Hardware store
building)
Mito City(Secondhand shopbuilding)
Japan ERI Co., Ltd.

R-2

K’s Denki
Aomori Honten

K.K. Kyoei Planning
DesignK.K. Kyoei Planning
Design(K’s Denki building)
Nihon Kensetsu Co.,
Ltd., Sendai Branch(TSUTAYA/Hard-off building)
Nihon Kensetsu Co.,
Ltd., Sendai Branch

R-3

Super Sports Xebio
Aomori-Chuo

Takenaka Corporation

Individual (Note 3)

Takenaka Corporation

Japan ERI Co., Ltd.

R-4

Ashico Town
Ashikaga

Penta-Ocean Construction Co.,
Ltd. (shopping mall building,cinema building, road-sidebuilding)
KKHY Architects & Associates(extensions)Penta-Ocean Construction
Co., Ltd. (shopping mallbuilding, cinema building,road-side building)Architecture Form
Corporation (extensions)Penta-Ocean Construction
Co., Ltd. (shopping mallbuilding, cinema building,road-side building)Tokyo Biso Kogyo
Corporation (extensions)Bureau Veritas Japan
Co., Ltd.

R-5

Yorktown
Shinden-Higashi
KasumiTechnopark
SakuraMTM International Corporation

MTM International
Corporation

Kajima Corporation

Japan ERI Co., Ltd.

Office Okano Kenchikusekkei
Co., Ltd.

Office Okano
Kenchikusekkei Co., Ltd.

Nakano Corporation Co.,Ltd.

Ibaraki PrefectureR-6
Note 1:
Note 2:

The above company names are names at the time of construction confirmation, completion, or acquiring inspection certificate for respective properties, even in cases ofpast changes in names.
The name of actual construction company is shown, although it was Daiwa System Co., Ltd. at the time of application procedure for building confirmation.

Note 3:

Individuals’ names are not disclosed because these are personal information.

39

Kenedix Retail REIT Corporation (3453)
vii) Overview of portofolio(A) Distribution by Property Type
Property type
Neighborhood, community and other shopping centers for daily

Number ofproperties
33

131,639100.0

NSC (Neighborhood Shopping Centers)

13

62,675

47.6

SM (Super Markets)

7

9,999

7.6

CSC Community shopping Centers）

1

14,848

11.3

Urban Station-Front Shopping Centers

532,308

24.5

SS (Specialty Store)

7

11,8099.0--

131,639

100.0

needs

Other retail properties
Total
Note:

Percentage of total portfolio
acquisition price(%) (Note)

Acquisition price(in millions)

33

Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total acquisition price may differ from the portfolio total.

(B) Distribution by Location
RegionFour major metropolitan areas

Acquisition price(in millions)

Percentage of total portfolio
acquisition price(%) (Note)

27

110,964

84.3

Tokyo metropolitan area

14

63,602

48.3

Greater Osaka area

940,491

30.8

Greater Nagoya area

3

5,374

4.1

Fukuoka area

1

1,497

1.1

6

20,67515.7

33

131,639

100.0

Ordinance-designated cities, core cities and other areas
Total
Note:

Number ofproperties

Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total acquisition price may differ from the portfolio total.

(C) Distribution by Property Age
Property age(Note 1)

Number ofproperties

Acquisition price(in millions)

Percentage of total portfolio
acquisition price (Note 2)Less than 5 years

1

3,600

3.2

5 years or more but less than 10 years

10

40,09336.1

10 years or more

13

67,44860.7

24111,141

100.0

Total
Note 1:
Note 2:

Property age refers to the number of years from the date of the new construction of the property set out in the real estate registry to March 31, 2016. Where multiple buildings
exist on the property, the property age is calculated using the average age of those buildings.
Percentage of total portfolio acquisition price is rounded to the nearest tenth. Therefore, the sum of the percentage of total portfolio acquisition price may differ from theportfolio total.

40

Kenedix Retail REIT Corporation (3453)(D) Distribution by Lease Term Remaining
Lease term (remaining period)(Note 1)

Annual fixed rent (in millions)(Note 2)

Ratio (%)
(Note 3)

Less than 2 years

1,785

20.3

2 to less than 5 years

1,032

11.8

5 to less than 10 years

2,183

24.9

10 to less than 15 years

2,521

28.7

15 to less than 20 years

622

7.1

20 years or more

640

7.3

8,785

100.0

Total
Note 1:
Note 2:
Note 3:“Lease term (remaining period)” is based on period until the last date of the lease as set forth in the relevant lease agreements as of March 31, 2016 (excluding warehouses forbuilding lease agreements) for each acquired property and to-be acquired property.
“Annual fixed rent” for acquired property is calculated by multiplying the monthly fixed rent and common area charges for the month ended March 31, 2016 (excluding
warehouses in the case of building lease agreements) by twelve and rounding down to the nearest million yen. For master leases, where the master lease company sub-leases
space to other tenants, the fixed monthly rent under the master lease contract is multiplied by 12, rounded down to the nearest million yen.
“Ratio” is based on the annual fixed rent, rounded to the nearest tenth. As a result, simple aggregation of “ratio” figures may not be the same as the total period.

(E) Distribution by lease contract typeType of lease contract

Ratio (%) (Note)

Fixed-term building lease

65.1

Regular building lease

21.1

Commercial fixed-term land lease

13.8

Other

0.0
Total

Note:

100.0

“Ratio” is based on the annual fixed rent as indicated in Note 2 of (D) above, rounded to the nearest tenth. As a result, simple aggregation of “ratio” figures may not be thesame as the total figure.

(F) Rent type (Fixed / Sales-linked rent)
Rent type(Fixed / Sales-linked rent)

Ratio (%) (Note)

Fixed rent

78.3

Fixed + sales-linked rent

15.4

Sales linked fixed

6.3
100.0

Total
Note:

“Ratio” is calculated according to the actual rent effective between October 1, 2015 and March 31, 2016, rounded to the nearest tenth. As a result, simple aggregation of“ratio” figures may not be the same as the total figure.

41

Kenedix Retail REIT Corporation (3453)
viii) Capital expenditures(A) Planned capital expenditures
The table below shows major capital expenditures for renovations, repairs and other projects that are planned for the third fiscal period ending
September 30, 2016. These expenditures are for real estate owned by KRR and real estate in trusts in which KRR owns trust beneficiary rights.
These planned projects may include some expenditures that will be recorded as expenses rather than capital expenditures for accounting purposes.
Planned amount of capital
expenditure
Property(Millions of yen)
Property nameLocation
PurposeSchedule
number
Total
Payment for the
Totalamountperiodalready paid
From January 2016
MONA ShinReplacement of water generator
T-2
Urayasu, Chiba
103
Urayasu
and rooftop piping
to April 2016
BlumerFrom April 2016
O-1
Kobe, Hyogo
Common area refurbishment
23
Maitamonto September 2016
MONA ShinFrom April 2016
Urayasu, Chiba Reparement of cooling tower
T-2
22
Urayasu
to September 2016
From April 2016
MONA ShinUrayasu, Chiba Reparement of shutter
T-2
22
Urayasu
to September 2016
MONA ShinFrom April 2016
Urayasu, Chiba Roof waterproof
T-2
18
Urayasu
to September 2016
(B) Capital expenditures during the period under review
The table below shows major capital expenditures for renovations, repairs and other projects in the period under review.
The amount of capital expenditures in the period under review was 530 million yen. There were also expenditures of 201 million yen that wererecorded as repair expenses. In total we spent 731 million yen on the projects.
Property
Capital expenditure
Property nameLocation
PurposeSchedule
number(Millions of yen)
Blumer HAT
From January 2016
O-4
Kobe, Hyogo
Renewal127
Kobe
to March 2016
Ashico Town
Ashikaga,
From November 2015
R-4
Installation of escalators
117
Ashikaga
Tochigi
to February 2016
MONA ShinFrom June 2015
T-2
Urayasu, Chiba PMAC replacement
68
Urayasu
to January 2016
Ashico Town
Ashikaga,
From December 2015
R-4
Cinema building renovation
61
Ashikaga
Tochigi
To February 2016
BlumerFrom February 2016
O-1
Kobe, Hyogo
Floor renewal
43
Maitamon
To March 2016
Other

112

Total

530

(C) Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
Not applicable42

Kenedix Retail REIT Corporation (3453)
ix) Major portfolio properties
The table below shows the major property owned by KRR as of March 31, 2016. Major properties are defined as those that account for 10% or more of
our total rental revenue generated from all assets held by KRR.
Annual rent
Property
Number of
Leased area
Leasable area
Property name(Millions of yen)numbertenants(m2)(m2)(Note)T-1
Note:

Fululu Garden Yachiyo

48

1,070

76,563.55

77,057.56

Annual rent is 12 times the fixed monthly rent (including a common service charge) under a leasing contract with tenants at portfolio properties as of March 31, 2016(excluding building leasing contracts for warehouses), rounded down to the nearest million yen. For master leases, where the master lease company sub-leases space toother tenants, the fixed monthly rent under the master lease contract is multiplied by 12, rounded down to the nearest million yen.

43

Kenedix Retail REIT Corporation (3453)(3) Information Concerning Major Tenantsi) Top End-Tenants in Terms of Rent
The following summarizes top ten tenants (end-tenants or sub-lease type master leasee) as of March 31, 2016
Total
leased
area
(m2)

Ratio
(%)
(Note 2)

Annualfixed rent
(in thousandsof yen)(Note 3)Tenantleaseholdand security
deposits(in millions of yen)
(Note 4)

Fululu Garden Yachiyo(Note 5)(Note 5)(Note 5)(Note 5)

Real estate

A Unicus Ina
B Unicus Kamisato (Land)
C Unicus Konosu (Land)
D Ashico Town Ashikaga

104,392.38

YorkMart Co., Ltd.

RetailYorktown Kita-Kaname(Note 5)

Life Corporation

RetailA Unicus Yoshikawa,
B Central Square Takadono (Land)
C Life Nishi-Tengachaya

Lixil Viva Corporation

RetailA Super Viva Home Iwatsuki (Land)
B Roseo Mito

(Note 5)

K’s Holdings Corporation

RetailA K’s Denki Shonan-Fujisawa (Land)
B Ashico Town Ashikaga

28,803.77

Edion Corporation

RetailBlumer Maitamon(Note 5)

DCM Kahma Co., Ltd.

RetailA Piago Kahma Home Center
Omihachiman,
B Kahma Home Center Nakagawa
Tomita (Land)(Note 5)

Daiwaroyal Co., Ltd.

Real estate

COMBOX Komyoike

25,530.44

4.2

A Ashico Town Ashikaga
B Yorktown Shinden-Higashi

11,509.94

1.9

Name of end tenants

Ito-Yokado Co., Ltd.
(Note 5)

P&D Consulting Co., Ltd

York Benimaru Co., Ltd.
Note 1:
Note 2:
Note 3:Note 4:Note 5:

Type ofbusiness(Note 1)RetailRetailProperty name17.1

(Note 5)

491,498

246(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)(Note 5)

9,572.39

1.6(Note 5)

4.7

452,523(Note 5)471

(Note 5)

“Type of business” is based on Japan Standard Industrial Classification.
“Ratio” is the ratio of leased area of the tenant to total leasable area of the portfolio as of March 31, 2016, rounded to the nearest tenth.
“Annual fixed-rent” for each property is based on monthly contracted rent (including common area charges) as set forth in the relevant lease agreements effective as ofMarch 31, 2016 (excluding warehouses for building lease agreements) for each property or property in trust, truncated to thousands of yen. In a sub-lease-type master
lease, the annual rent (excluding consumption taxes) agreed upon in the master lease agreement or the amount obtained by multiplying the monthly rent (excluding
consumption taxes) agreed upon in the master lease agreement by 12, rounded down to the nearest thousand yen, is shown.
Indicates the outstanding balance of any tenant leasehold and security deposit from the relevant tenant(s) set forth in lease agreement(s) effective as of March 31, 2016,
rounded down to the nearest million yen.
We have not obtained consent from the tenant to release this information.

44

Kenedix Retail REIT Corporation (3453)
ii)Top End-Tenants in Terms of Leased Area
The end-tenants or the sublease type master lessees that cover over 10% of the total leased area of portfolio as of March 31, 2016 are as follows.
Name of end
tenants

Type ofbusiness

P&D
Consulting
Co., LtdReal estate

A Unicus Ina
B Unicus Kamisato (Land)
C Unicus Konosu (Land)
D Ashico Town Ashikaga

Lixil Viva
Corporation

RetailA Super Viva Home Iwatsuki(Land)B Roseo Mito

Note 1:

Property nameTotal
leased area(m2)

104,392.38(Note 1)

Annualfixed rent
(in thousandsof yen)45

Lease term
End

Lease renewal

246

A Sep. 25, 2026
B Oct. 1, 2055
C Oct. 1, 2055
D Mar. 31, 2026

A Not Applicable
B Not Applicable
C Not Applicable
D Not Applicable(Note 1)

(Note 1)

491,498(Note 1)

We have not obtained consent from the tenant to release this information.

Tenantleaseholdand security
deposits(in millions of yen)

(Note 1)

Kenedix Retail REIT Corporation (3453)
平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年10月2日 平成27年10月2日 平成27年10月2日 平成27年10月2日【Reference】

Earnings Performance for the Individual Properties for the 2nd Fiscal Period (October 1, 2015 to March 31, 2016) ：183 days
Tokyo metropolitan area

Location
Property No.

T-1

T-2

T-3

T-4

T-5

T-6

T-7

T-8

※As of March 31, 2016

T-9

T-10

T-11

T-12

K’s DenkiSports Club
Daikanyama
Unicus Kamisato Unicus Konosu
Super Viva Home
Yorktown
UnicusFululu Garden
MONA
Passaggio
ShonanRenaissance
Address
Unicus Ina(Land)(Land)
Iwatsuki (Land)
Kita-Kaname
Yoshikawa
YachiyoShin-Urayasu
Nishiarai
Fujisawa (Land)
Fujimidai
Dixsept
February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 October 2, 2015 October 2, 2015 October 2, 2015 October 2, 2015

Property Name
Acquisition Date
Price
Information

Acquisition price ( In millions of yen )14,848

8,063

5,850

5,390

4,379

4,000

3,600

2,586

4,815

3,169

3,000

Percentage of total portfolio

11.3%

6.1%

4.4%

4.1%

3.3%

3.0%

2.7%

2.0%

3.7%

2.4%

2.3%

1.3%

Net book value ( In millions of yen )15,026

8,275

5,934

5,441

4,381

4,018

3,642

2,591

4,890

3,210

3,043

1,726

Appraisal value at the end of period ( In millions of yen )15,200

8,500

6,280

5,620

4,420

4,300

3,770

2,720

5,260

3,390

3,010

1,740

11.0%

6.1%

4.5%

4.1%

3.2%

3.1%

2.7%

2.0%

3.8%

2.4%

2.2%

1.3%

48

1（72）

1（40）

1（27）

1

1

1（10）

1

1

1

1

1

Leasable floor area (㎡)

77,057.56

9,568.31

10,546.25

5,056.39

13,044.37

10,620.04

3,120.87

67,325.95

15,578.58

67,854.47

19,329.00

Leased floor area (㎡)76,563.55

9,191.77

10,366.25

4,991.03

13,044.37

10,537.19

3,120.87

67,325.95

15,578.58

67,854.47

19,329.00

As of March 31, 2016

99.4%

96.1%

98.3%

98.7%

100.0%

100.0%

99.2%

100.0%

100.0%

100.0%

100.0%

100.0%

As of September 30, 2015

99.5%

98.0%

98.3%

93.9%

100.0%

100.0%

100.0%

100.0%----

Operating periods

183days183days183days183days183days183days183days183days

182days

182days

182days

182days①Rental and other operating revenues ( In thousands of yen )Percentage of total appraisal value
Number of tenants
Lease Information（Note 1）

1,700

Occupancy ratio

Income and Retained Earnings Information

741,920

503,887

309,117

263,572

132,793

138,554

72,301

41,296

Rental revenues

632,247

346,747

213,882

183,696

131,736

132,587

72,11541,284

Other operating revenues

109,673

157,139

95,23479,875

1,057

5,967

186

12

290,144248,827

136,431

151,805

10,56024,967

1,454

1,454

142,752

83,65447,042

52,596

1,800

1,193

1,193

20

121

5

-

-

-

0

0

Utilities

66,721

57,361

38,20733,367----

Repairs and maintenance

20,14625,236

13,49019,705

7,912

89

-

-

Insurance

1,885

823

550

309

327

249

-

-

②Property-related expenses ( In thousands of yen )Property management fees
Taxes

24,198（Note 1）

（Note 1）

（Note 1）

Trust fees and other expenses

58,61981,63037,13645,825520③NOI（＝①-②） ( In thousands of yen )451,776

255,059

172,685

111,767

122,233

111,222

113,587

71,568（Note 1）

430
116,549

82,924259

259

70,847

39,842④Depreciation ( In thousands of yen )81,34041,671

31,751

15,09329,42020,335

15,495

15,127----⑤Rental operating income（＝③-④）( In thousands of yen )370,435

213,388

140,934

96,673

92,81290,88698,091

56,440116,549

82,92470,847

39,842

Reference⑥Capital expenditures ( In thousands of yen )59,78899,580

996

2,124

-

-

-

-

-

-

-

-

⑦NCF（＝③-⑥） ( In thousands of yen )391,988

155,479

171,689

109,642

122,233

111,222

113,587

71,568

116,549

82,92470,847

39,842

39.1%

49.4%

44.1%

57.6%

8.0%

5.3%

18.0%

4.3%

1.2%

1.7%

2.0%

3.5%

Expense ratio（＝②／①）
Property tax for the year 2015 ( In thousands of yen )141,857

Assets pledged as collateral○

45,819-70,832-

23,587

20,165--Note 1:We have not obtained consent from the tenant(s) to release this information.

46

13,770-29,435-

10,567-

27,063
-

7,981
-

9,551
-

6,257
-

Kenedix Retail REIT Corporation (3453)
平成27年10月2日 平成27年10月2日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年4月16日 平成27年10月2日 平成27年10月2日 平成27年10月2日 平成27年10月2日 平成28年1月21日【Reference】

Earnings Performance for the Individual Properties for the 2nd Fiscal Period (October 1, 2015 to March 31, 2016) ：183 days
Tokyo metropolitan area
Greater Osaka area

Location

T-13

Property No.

T-14

O-1

O-2

O-3

O-4

Piago Kahma
Central Square
Gourmet City
Home Center
Blumer Maitamon
Takadono (Land)
Chiba-Chuo
Omihachiman
FOctober 2, 2015 October 2, 2015 February 10, 2015 February 10, 2015 February 10, 2015
Inageya Yokohama
Minamihonjuku(Land)

Property Name
Acquisition Date

O-5

Blumer HAT
Kobe

O-6

O-7

O-8

O-9

WelciaHankyu Oasis
Kishiwadakamori
Hirakatadeguchi(Land)COMBOX
Komyoike

Carino Esaka※As of March 31, 2016

Life NishiTengachaya

April 16, 2015 October 2, 2015 October 2, 2015 October 2, 2015 October 2, 2015 January 21, 2016

Price
Information

Acquisition price ( In millions of yen )

1,442

760

8,389

2,685

2,140

11,000

6,555

6,450

1,280

487

Percentage of total portfolio

1.1%

0.6%

6.4%

2.0%

1.6%

8.4%

5.0%

4.9%

1.0%

0.4%

1.1%

Net book value ( In millions of yen )

1,462

788

8,494

2,727

2,168

11,585

6,612

6,502

1,333

497

1,577

Appraisal value at the end of period ( In millions of yen )

1,460

799

8,780

2,870

2,410

11,600

6,590

6,920

1,310

500

1,620

1.1%

0.6%

6.3%

2.1%

1.7%

8.4%

4.8%

5.0%

0.9%

0.4%

1.2%

1

1

48

1

2

1（40）

1（30）

1

1

1

1

Leasable floor area (㎡)4,405.41

3,488.77

30,037.11

4,437.07

14,313.00

24,185.02

7,540.58

25,530.44

2,960.38

3,033.45

2,679.52

Leased floor area (㎡)4,405.41

3,488.77

29,888.11

4,437.07

14,313.00

23,871.33

7,474.92

25,530.44

2,960.38

3,033.45

2,679.52

100.0%

100.0%

99.5%

100.0%

100.0%

98.7%

99.1%

100.0%

100.0%

100.0%

100.0%

-

-

99.5%

100.0%

100.0%

99.5%

-

-

-

-

-

182days

182days183days183days183days183days

182days

182days

182days

182days

71daysPercentage of total appraisal value
Number of tenants

1,505

Lease Information

Occupancy ratio
As of March 31, 2016
As of September 30, 2015
Operating periods①Rental and other operating revenues ( In thousands of yen )Income and Retained Earnings Information

487,461

491,148

302,490

225,045

17,610Rental revenues

368,394379,213

198,509

225,045

17,610

Other operating revenues

119,066

111,935

103,980--

192,904

182,762

103,616

2,878

893

61,66968,56540,096

1,790

18

-

20

0

7

Utilities

84,39272,65456,830--

Repairs and maintenance

21,40916,621

3,485

-

-

825

1,030

712

678

22

②Property-related expenses ( In thousands of yen )Property management fees

（Note 1）

（Note 1）

Taxes

Insurance（Note 1）

24,589Trust fees and other expenses③NOI（＝①-②） ( In thousands of yen )34,313④Depreciation ( In thousands of yen )⑤Rental operating income（＝③-④）( In thousands of yen )⑥Capital expenditures ( In thousands of yen )⑦NCF（＝③-⑥） ( In thousands of yen )Reference

Expense ratio（＝②／①）

25,271-

294,557

67,27890,471

23,891

2,471

408

308,385

198,873

222,166（Note 1）706

（Note 1）

157
38,054

11,674

16,716-

9,718

50,140-10,53449,18327,75632,894

5,201

-

2,341

34,313

15,553

244,416

67,27879,937259,202

171,116

189,271

32,853

11,674

14,375--47,062--140,865

-

-

-

-

-

34,31325,271

247,494

67,27890,471

167,520

198,873

222,166

38,054

11,674

16,716

4.1%

29.6%

39.6%

2.1%

3.5%

37.2%

34.3%
49,261（Note 2）-

1.3%
57,938（Note 2）
-

12.1%

11.1%

5.1%

5,281

Property tax for the year 2015 ( In thousands of yen )Assets pledged as collateral（Note 1）

11,447-

82,277-

6,852

28,359○-94,620
-

7,892
-

2,073
-

6,523
○

Note 1:We have not obtained consent from the tenant(s) to release this information.
Note 2:Tax was levied on the entire ownership of the building in fiscal 2015. The amount shown is the amount obtained by multiplying the annual property tax for the entire building by
the ownership ratio associated with building.

47

Kenedix Retail REIT Corporation (3453)
平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年2月10日 平成27年10月2日 平成27年10月2日 平成27年10月2日【Reference】

Earnings Performance for the Individual Properties for the 2nd Fiscal Period (October 1, 2015 to March 31, 2016) ：183 days
Greater Nagoya area
Fukuoka area Ordinance-designated cities, core cities and other areas

Location

N-1

Property No.

N-2

N-3

F-1

R-1

R-2

R-3

R-4

※As of March 31, 2016

R-5

R-6

Yorktown
Super Sports
K’s Denki
K’s Denki
Kahma Home
Kasumi
Ashico Town
Valor IchinomiyaShindenXebio
Nakagawa
Sunny Noma
Roseo Mito
AomoriCenter Nakagawa
Technopark
Ashikaga
Nishi
Higashi
Aomori-Chuo
Tomita (Land)
HontenTomita (Land)
FFebruary 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 October 2, 2015 October 2, 2015 October 2, 2015

Property Name
Acquisition Date

Total of 33
Properties

Price
Information

Acquisition price ( In millions of yen )

2,311

2,174

889

1,497

10,046

1,469

898

4,180

3,252

830

Percentage of total portfolio

1.8%

1.7%

0.7%

1.1%

7.6%

1.1%

0.7%

3.2%

2.5%

0.6%

100.0%Net book value ( In millions of yen )

2,351

2,184

907

1,513

10,112

1,493

908

4,398

3,352

859

134,016

Appraisal value at the end of period ( In millions of yen )

2,500

2,230

945

1,520

10,700

1,570

909

5,060

3,310

861

138,674

1.8%

1.6%

0.7%

1.1%

7.7%

1.1%

0.7%

3.6%

2.4%

0.6%

100.0%

1

1

1

1

1（23）

1

1

1（26）

2

1

389

2,814.67

48,296.15

10,083.41

65,616.31

12,768.77

2,047.65

609,026.59

2,814.67

48,296.15

10,083.41

65,019.74

12,768.77

2,047.65

606,702.91

99.6%

Percentage of total appraisal value
Number of tenants
Lease Information

Leasable floor area (㎡)9,447.48（Note 1）

（Note 1）

9,447.48

Leased floor area (㎡)（Note 1）

131,639

Occupancy ratio
As of March 31, 2016

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

99.1%

100.0%

100.0%

As of September 30, 2015

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%---

183days183days183days183days183days183days183days

182days

182days

182days

Operating periods①Rental and other operating revenues ( In thousands of yen )99.6%
181days *Income and Retained Earnings Information

371,865

260,7315,541,057

Rental revenues

340,409

198,987

4,656,391

Other operating revenues

31,456

61,743884,665

56,326

158,689

1,669,971

19,27340,329②Property-related expenses ( In thousands of yen )Property management fees

（Note 1）

（Note 1）

（Note 1）

（Note 1）

（Note 1）

（Note 1）

（Note 1）

637,809（Note 1）

10

1

216

Utilities

25,16355,043495,520

Repairs and maintenance

6,859

50,166201,226

692

671

10,531

4,327

12,477

324,668

Taxes

Insurance
Trust fees and other expenses③NOI（＝①-②） ( In thousands of yen )④Depreciation ( In thousands of yen )⑤Rental operating income（＝③-④）( In thousands of yen )⑥Capital expenditures ( In thousands of yen )⑦NCF（＝③-⑥） ( In thousands of yen )Reference

Expense ratio（＝②／①）

76,27964,954-24,92943,438315,539

14,526-

14,251

46,19461,752

24,92929,186269,344

53,366

31,631102,041

106,463

24,612

3,871,085

6,365

4,894

25,39913,5602,661

565,861

47,00026,736

76,642

92,903

21,9503,305,224

-

-

-

-

-

-

-

180,171--

530,588

64,95476,27924,92943,438315,539

53,366

31,631

ᇞ78,129

106,463

24,612

3,340,497

2.2%

3.3%

5.6%

16.5%

15.1%

4.3%

6.8%

60.9%

31.1%

12.3%

30.1%

3,684

956,1809,869

Property tax for the year 2015 ( In thousands of yen )Assets pledged as collateral

64,954

19,552
-

3,949
-

7,086

51,787--

13,821-

Note 1:We have not obtained consent from the tenant(s) to release this information.

48

6,088
-

51,022-29,896--*Total: Cost-weighted average operating period (days)

Kenedix Retail REIT Corporation (3453)(Reference) Borrowings
Borrowings on a financial institution basis as of March 31, 2016 are as follows:

Classification

LenderSumitomo Mitsui Banking Corporation

Balance at the
Increase during Decrease during Balance at the
Average
beginning of
the period
the period
end of periodinterest rate Payment due dateperiod（Note4）(Thousands of (Thousands of (Thousands of（Note2）(Thousands of
yen)
yen)
yen)
（Note3）(％)yen)
450,000
450,000-

Short-Term Payable

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

450,000-

450,000-

Mizuho Bank, Ltd.

400,000-

400,000-

Resona Bank, Ltd.

250,000-

250,000-

Aozora Bank, Ltd.

250,000-

250,000-

Sumitomo Mitsui Trust Bank, Ltd.

200,000-

200,000--

2,050,000-

2,050,000

0.620 October 2, 2016

Sumitomo Mitsui Banking Corporation（Note6）-

3,650,000

1,200,000

2,450,000

0.621 October 2, 2016

Sumitomo Mitsui Banking Corporation-

450,000-

450,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

450,000-

450,000

Mizuho Bank, Ltd.

-

400,000-

400,000

Resona Bank, Ltd.

-

250,000-

250,000

Aozora Bank, Ltd.

-

250,000-

250,000-

200,000-

200,000

2,000,000

7,700,000

3,200,000

6,500,000

Sumitomo Mitsui Banking Corporation

2,300,000--

2,300,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

800,000--

800,000

Mizuho Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

350,000--

350,000

Sumitomo Mitsui Banking Corporation

2,400,000--

2,400,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

800,000--

800,000

Mitsubishi UFJ Trust and Banking Corporation

800,000--

800,000

Sumitomo Mitsui Trust Bank, Ltd.

550,000--

550,000

Aozora Bank, Ltd.

500,000--

500,000

Resona Bank, Ltd.

500,000--

500,000

The Gunma Bank, Ltd.

400,000--

400,000

The Musashino Bank, Ltd.

400,000--

400,000

Mizuho Bank, Ltd.

350,000--

350,000

Mizuho Trust & Banking Co., Ltd.

300,000--

300,000

Sumitomo Mitsui Banking Corporation

3,000,000--

3,000,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

700,000--

700,000

Sumitomo Mitsui Trust Bank, Ltd.

500,000--

500,000

Aozora Bank, Ltd.

450,000--

450,000

Resona Bank, Ltd.

450,000--

450,000

Sub Total

Mizuho Bank, Ltd.

Long-Term Payable-

400,000--

2,600,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

800,000--

800,000

Sumitomo Mitsui Trust Bank, Ltd.

600,000--

600,000

Aozora Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

Mizuho Bank, Ltd.

300,000--

300,000

Resona Bank, Ltd.

300,000--

300,000

Development Bank of Japan Inc.（Note7）

1,500,000--

1,500,000

0.925 February 10, 2021

Development Bank of Japan Inc.（Note7）

1,600,000--

1,600,000

1.033 February 10, 2022

Sumitomo Mitsui Banking Corporation

4,600,000--

4,600,000

1.366

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

750,000--

750,000--

500,000--

400,000

Sumitomo Mitsui Trust Bank, Ltd.

200,000--

200,000

Resona Bank, Ltd.

200,000--

200,000

The Musashino Bank, Ltd.

150,000--

150,000

1,000,000--

1,000,000

Sumitomo Mitsui Trust Bank, Ltd.

600,000--

600,000

Mizuho Bank, Ltd.

400,000--

400,000

Resona Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Mitsubishi UFJ Trust and Banking Corporation

400,000--

400,000

1,500,000--

1,500,000

Sumitomo Mitsui Banking Corporation-

1,850,000-

1,850,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

550,000-

550,000

Sumitomo Mitsui Trust Bank, Ltd.

-

500,000-

500,000

Resona Bank, Ltd.

-

300,000-

300,000

The Musashino Bank, Ltd.

-

250,000-

250,000

Mitsubishi UFJ Trust and Banking Corporation-

450,000-

450,000

Resona Bank, Ltd.

-

200,000-

200,000

The Musashino Bank, Ltd.

-

150,000-

150,000

Development Bank of Japan Inc.（Note7）-

1,500,000-

1,500,000

Sumitomo Mitsui Banking Corporation-

3,000,000-

3,000,000

Mizuho Bank, Ltd.

-

1,150,000-

1,150,000

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

-

1,000,000-

1,000,000

Mizuho Trust & Banking Co., Ltd.

-

700,000-

700,000

Sumitomo Mitsui Trust Bank, Ltd.

-

650,000-

650,000

Resona Bank, Ltd.

-

500,000-

500,000

Sumitomo Mitsui Banking Corporation-

1,500,000-

1,500,000

Development Bank of Japan Inc.（Note7）

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sub Total
Total-

400,000-

400,000

36,350,000

14,650,000-

51,000,000

38,350,000

22,350,000

3,200,000

57,500,000

Unsecured/Non-guaranteed

0.865 February 10, 2021-

500,000(Note5)0.751 February 10, 2020

400,000

400,000

Unsecured/Non-guaranteed

0.545 February 10, 2018

2,600,000

Aozora Bank, Ltd.

(Note5)0.535 February 10, 2017

Sumitomo Mitsui Banking Corporation

Mizuho Bank, Ltd.

Remarks

0.430 February 10, 2016

Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Trust Bank, Ltd.

Use

0.978 February 10, 2022

April 16, 2025

0.534 March 31, 20190.975 March 31, 2023

0.994 March 31, 2023

0.545

March 31, 2019

0.987

March 31, 2023

1.013 March 31, 2023

1.110

March 31, 2024

1.243

April 16, 2025

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled after the balance sheet date are as follows:(Thousands of yen)
Due after 1 year
through 2 years
Long-term loans payable

3,850,000

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

7,000,000

5,650,000

7,000,000

Due after 5 years
27,500,000

Note 2: All debts except for the following Note7 are borrowings at a floating rate.
Note 3: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, with regard to borrowings for which interest rate swap transactions were implemented in orderhedge the interest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps are indicate
Note 4: All the repayment methods of debt financing except for the following Note6 are lump-sum repayments on the due date.
Note 5: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses are included) and repayment of debts.
Note 6: Partial prepayment of 1,200,000 thousand yen was made on October 30, 2015.
Note 7: Borrowings at a fixed rate.

49