(From April 1, 2021 to September 30, 2021)

https://www.krr-reit.com/en/

Focused Investment in Shopping Centers for Daily Needs

Semi-annual Report for the 13th Period

13thHighlights

The 13th fiscal period ended September 30, 2021
Distribution per unit

Forecast DPU
for the 14th fiscal period

JPY 7,328

Forecast DPU
for the 15th fiscal period

JPY 7,010

Total assets (by acquisition price) /Number of properties

JPY 6,550

JPY 245.2bn / 66

Number of tenants

528

Occupancy rate
at the end of period

99.6%

C o n t e n ts
Ⅰ Overview of KRR
From the Executive Director
T op I n t er v i ew
Key Characteristics
ESG Initiatives
C l ose - u p KR R V ol . 13
Kawamachi Yahagi Mall
Financial Highlights
Portfolio List
Portfolio Map
Overview of Portfolio
Summery of Investment Unit

Monenosato Mall

Ⅱ Asset Management Report
Overview of Asset Management
Profile of KRR
Status on Investment Properties
Capital Expenditures
Expenses and Liabilities
Acquisition and Disposition
Accounting
OthersFrom the Executive Director

I would like to take this opportunity to express my sincere
gratitude to our shareholders for your continued support to
Kenedix Retail REIT Corporation (“KRR”).
Thanks to your support, KRR has reported its results of operations
for the 13th fiscal period (from April 1, 2021 to September 30, 2021).
During the 13th fiscal period, we faced another challenging periodamid the COVID-19 pandemic and the government’s
third and fourth state of emergency declaration.
Of the six months in the 13th fiscal period, the state of
emergency declaration lasted for four and a half months in total.
Despite these circumstances, shopping centers for daily needs
with grocery supermarkets as core tenants have continued to act as vital retail infrastructure
providing fundamental functions to maintain day-to-day life of consumers. Therefore, impact ofthe pandemic remained limited for KRR in the 13th fiscal period.
In March 2020 at the early period of the COVID-19 outbreak, the investment unit price of KRR
recorded its historical low. However, the market gradually recognized the stability of the portfolio
focused on shopping centers for daily life even amid the pandemic. As a result, the investment
unit price of KRR recovered to its pre-COVID level at the beginning of this year. Taking advantageof this recovery, KRR conducted the fifth public offering at the beginning of the 13th fiscal period,
and acquired four additional properties, including assets acquired in conjunction with asset
reshuffle. As a result, KRR's portfolio totaled 245,274 million yen for 66 properties at the end of
the 13th fiscal period. Gain on sale of properties including Hankyu Oasis Hirakatadeguchi wasalso recorded, resulting in operating revenue of 9,576 million yen, operating income of 4,881
million yen, and ordinary income of 4,262 million yen in the 13th fiscal period. Distribution perunit was 7,328 yen, 233 yen higher than that of the previous fiscal period. Due to the acquisitionof a new retail facility in Fukuoka at the beginning of the 14th fiscal period, the asset size grew to249,657 million yen with 66 properties, considering the disposition of a property at the same
period.
On the ESG (Environmental, Social, and Governance) front, in GRESB Real Estate Assessment,
which measures ESG considerations in the real estate sector, KRR received a “4 Stars” rating (outof five stars) for the third consecutive year in 2021. Furthermore, in addition to the initiatives by
each REIT managed by the Asset Manager to date, the Sustainability Office and the Sustainability
Committee were newly established to promote ESG initiatives, including initiatives to climatechange risks, throughout the Asset Manager. As a part of these efforts, we announced our
support for the recommendations of the Task Force on Climate-related Financial Disclosures(TCFD) in October.
There have been signs of economic reopening due to a sharp decline in the COVID cases inJapan since September. However, the business environment remains uncertain. We dedicate
ourselves to promote the operation of retail and logistics facilities in order to respond to theconfidence and expectations of investors even under the current environment.
We respectfully look forward to your continued support.

Moyuru Watanabe

Executive Director, Kenedix Retail REIT Corporation
Director & COO, Head of Retail REIT Department,
Kenedix Real Estate Fund Management, Inc.
1

External Growth Strategies

1 Steady AUM growth
Since IPO in 2015, KRR achieved steady growth in AUM through five public offerings. AUM size that was 80.8 billion
yen at IPO has expanded 3 times.
Aiming forsteady growthof AUM going
forward(JPY bn)
300

200

PO
150

100

増資
PO

公募
PO
増資

250

PO
公募
増資

15 8 . 7

16 4 . 3

3rd
period4th
periodPO

20 4 . 9

20 6 . 1

5th
period6th
period212.8 213.2

245.2 249.6

225.8 226.4 226.7
200.9

13 1 . 6
91.8
80.8

50

0

IPO

1st
period2nd
period7th
period8th
period9th
period10th
period11th
period12th
period13th
periodOct-212 Strong support from the Kenedix Group and Alliance Companies
KRR aims to achieve sustainable growth acquiring properties by utilizing the pipelines of its Sponsor and Alliance
Companies. In January 2021, Sumitomo Mitsui Finance and Leasing Group became the parent company of theSponsor, Kenedix, Inc. through a TOB.

Asset management
Kenedix Real Estate
Fund Management, Inc. (“KFM”)

Property management

Kenedix Retail REIT Corporation

Pipeline support
Warehousing
Leasing

Financing functions for bridge funds

Property Management

Environmental technology/ knowhow
Personnel support
Right to use trademarks

Sponsor / support-line company

Parents of KFM / Alliance Company
70％ equity share
Sumitomo Mitsui Finance and Leasing Co., Ltd.

Kenedix Investment
Partners, Inc.

Kenedix, Inc.

Capital-business alliance

SMFL MIRAI Partners Co., Ltd.

: KFM’s parent companies
Note: Alliance companies include Nippon Commercial Development Co., Ltd. and P&D Consulting Co., Ltd. in addition to Sumitomo Mitsui Finance and Leasing Group.

2

3 Assets acquired in the 13th fiscal period
T-31 Kitera Town Chofu

NSC

A n N SC w ith Life, a grocery supermarket, as the coretenant and a retail trade area of ov er 40,000 people
w ithin a 1km radius

Location
Acquisition
price

Chofu, Tokyo

Appraisal value

JPY 10,500 mm

Appraisal NOI
yield

Location

NSC

Location

5.2%

Acquisition
price

JPY 5,930 mm

Yokohama, Kanagawa Appraisal value
Appraisal NOI
yield

JPY 5,667 mm

4.7%

T-32 Unicus Urawamisono (Land)

A n N SC w ith Kansai Super Market, a grocery
supermarket, as the core tenant and a retail tradearea of ov er 50,000 people w ithin a 1km radius

Acquisition
price

An NSC that meets diverse needs of a growing next-generation
smart city with a concentrated population

JPY 11,400 mm

O-12 Merado Daikai

NSC

Apita Terrace Yokohama Tsunashima
T-25 (49% quasi-co-ownership interest)

Kobe, Hyogo

Appraisal value

JPY 5,440 mm

Appraisal NOI
yield

The underlying land for a community -based N SC
dev eloped in “ Misono Wing City ” in Saitama, a new
town with growing population

NSC

JPY 5,780 mm

Location

5.3%

Acquisition
price

Saitama, Saitama

Appraisal value

JPY 817 mm

JPY 732 mm

Appraisal NOI
yield

4.6%

4 Assets acquired in the 14th fiscal period
F- 4Kitera Town Fukuoka Nagahama
A n N SC that opened in February 2021 in an area with high population growth, neighboring Tenjin area in Fukuoka

NSC

Location

Fukuoka, Fukuoka

Acquisition
price

JPY 6,000 mm

Appraisalvalue

JPY 6,100 mm

Appraisal
NOI yield

4.7％

5 Assets disposed of in the 12th, 13th and 14th fiscal period
T-4

Daikanyama Address Dixsept

Urban Station-Front SC

Location

Shibuya ward,
Tokyo

Disposition
price

JPY 6,644 mm

Unicus Ina

O-7 Hankyu Oasis Hirakatadeguchi

T-5 (20% quasi-co-ownership interest)

SM

NSC

Location Hirakata, Osaka

Disposition
price

JPY 1,500 mm

Location Kitaadachi-gun,
Saitama

Disposition
price

JPY 1,048 mm

Note: 40% of the quasi-co-ownership interest was disposed of in the 12th fiscal period, 30% in the 13th fiscal period and 30% in the 14th fiscal period.

3

ESG Initiatives

1 Certifications on Environmental Initiatives
Awarded GRESB “Green Star ” Rating for six consecutive year
Participated in the GRESB Real Estate Assessment consecutively since its first participation in 2016.
Earned four star (out of five star) GRESB Rating in 2021 for three consecutive years. Furthermore,awarded a “Green Star” designation for six consecutive years by achieving high performance both in“Management Component” that evaluates policies and organizational structure for ESG promotion,and “Performance Component” that assesses environmental performance and tenant engagement ofproperties owned.

The number of certified properties and certified floor area (m 2 ) (as of November 16, 2021)
The
numbercertifiedThe
numberof ofcertifiedproperties Certified floor area
properties

18

471,976.59 m2

Ratio (Note)

Target ratio

58.6%

60%

Note: The ratio is the percentage of certified floor area to the gross floor area of properties owned by KRR (calculated on a pro-rata basis of ownership ratio forcompartmentalized ownership, excluding land-only properties).

DBJ Gre e n Building Cer tification
The following 12 properties have been awarded the DBJ Green Building Certification for their environmental initiatives
as of November 16, 2021.

Properties with outstanding environmental & social awareness (★★★★)
O -1 Blumer Maitamon

Properties with excellent environmental & social awareness (★★★)
T-2 MONA Shin-Urayasu

T-7 Unicus Yoshikawa

O -5 Carino Esaka

T-3 Passaggio Nishiarai

T-2 0 Kawamachi Yahagi Mall

R-1 Roseo Mito

T-5 Unicus Ina

O -4 Blumer HAT Kobe

R-4 Ashico Town Ashikaga

R-1 0 Sun Street Hamakita

Properties with high environmental & social awareness (★★)
T-1 9 Yumemachi Narashinodai MallC e r tification for C ASBEE for Re al Estate
CASBEE is an evaluation system for rating the environmental performance of buildings, developed
under the auspices of the Ministry of Land, Infrastructure, Transport and Tourism. The system rates
the overall environmental performance of buildings from two perspectives; the evaluation of theenvironmental quality and performance of buildings themselves and the external environmentalload of buildings. As of November 16, 2021, KRR has acquired CASBEE real estate evaluation
certification for the following six properties.

Certification rank: A rank

Certification rank: S rank
T-25

R-11

N-4

Apita Terrace Yokohama Tsunashima Homecenter Kohnan Sunadabashi

Costco Wholesale Sapporo Warehouse

T-31

N-6

L-3

Kitera Town Chofu

Resora Obu Shopping Terrace

Musashi Ranzan Distribution Center

Earned Certification for Building-Housing Energy-efficiency
Labeling System (BELS)“Certification for Building-Housing Energy-efficiency Labeling System (BELS)” is a thirdparty certification system that grades housing and buildings in accordance with an
obligation to make an effort to indicate energy saving performance stipulated in the Act
on the Improvement of Energy Consumption Performance of Buildings, based on the
Building Energy Index (BEI) values calculated from primary energy consumption volume
based on nationally-stipulated performance standards for building energy consumption.
KRR has acquired BELS for thefollowing property.

Certification rank★★★★★

Apita Terrace Yokohama
Tsunashima42 Environmental initiatives
Organizational changes to further promote ESG initiatives
Sustainability OfficeSustainability Committee

KFM newly created Sustainability Office, KFM newly created Sustainability
which deals matters relating toCommittee, which is chaired by thesustainability and ESG
President of KFM, for the purpose ofenhancing approaches to sustainability
and ESGSupport for TCFD Recommendations
KFM has expressed support for therecommendations of TCFD and joined
the TCFD consortium

Solar panel installation

We installed solar panels at Unicus Ina, Kawamachi Yahagi Mall and Apita Terrace Yokohama Tsunashima to decrease
CO2 emissions.

Unicus Ina
Power generation capacity:
334.53 kW
Unicus Ina:
316,135kWh

Kawamachi Yahagi Mall
Power generation capacity:
302.40 kW
Power generation results (Note)
Kawamachi Yahagi Mall:
327,474kWh

Apita Terrace Yokohama Tsunashima
Power generation capacity:
25.26 kWApita Terrace Yokohama Tsunashima:
27,878kWh

Note: The figures of Power generation results are for the period October 2020 to September 2021.

3 Social initiatives
Collaboration with local communities

Supporting UNICEF

SDGs children enlightening event

We entered into agreements with
Yoshikawa City, Ina Town, and Konosu
City can be used as a temporary shelterat times of emergency.

KRR supports the activity of UNICEF(United Nations Children's Fund) byproviding common areas of its properties
for their fund-raising campaign.

KRR holding an event featuring essenceof SDGs such as reduction of wastematerials and importance of diversity

4 Governance structure
Decision-making process for acquisition of properties from a related party
When one of the parties involved in the purchase of a property or other transaction is a related-party, the following
independent decision-making procedures are applied.
Preparation of
proposalConfirmation of
proposal

Deliberation andresolution

Deliberation andresolution

Deliberation andresolution

Retail REIT
Department

Compliance
OfficerCompliance
Committee

AssetManagement
Committee ofRetail REIT
Division

KRR Boardof Directors

Disapproved/remand
Note: Transactions within the scope of insignificance criteria are excluded from the decision-making process above.

5Vol. 13 Close-up KRR

T-20
T-20 NSC

Kawamachi Yahagi Mall
Shipping center for daily needs in Chiba that promotes environmental and social
considerations
The Kawamachi Yahagi Mall is a neighborhood shopping center (NSC) located approximately 3km east of Chiba Station, the center of
Chiba. It is a shopping center that opened in April 2017 near Chiba Higashi JCT, which provides access to National Road No. 1 6(Tokyo Loop Road) linking the Tokyo metropolitan area in a loop. Given the convenience described above, the shopping center
deploys flat parking spaces that can accommodate 326 vehicles for a large number of customers by cars from areas including ne arby
residents.

Based on the 2015 census, the population of the commercial area is approximately 16,000 people in a 1 -km radius, 62,000 people in a
2-km radius, and 159,000 people in a 3-km radius. Compared to 2010, the population in 2015 was 106% in a 1-km radius, 104% in a 2km radius, and 104% in a 3-km radius. Population growth is particularly evident in the vicinity of this facility. In addition, b ecause aprefectural park is located on the south side of this facility, the area has become popular for family households.
This facility consists of three buildings: the main building occupied by ten tenants with a grocery supermarket as its core t enant, the
UNIQLO building, and the health club building. The grocery supermarket is Landrome, which is highly supported by local community,with Chiba and Ibaraki as its main market. In addition to specialty stores such as a drugstore, a dollar shop, and an apparel store,
there are service-oriented tenants such as a health club, a barbershop, a massage shop, and a mobile phone shop. This tenant
structure is convenient for a wide range of households, including child-rearing families. The shopping center attract customers day
and night, weekdays and weekends. There are also children attending lessons of the health club in the evening, while their pa rents
shop for dinner. In addition, even amid the COVID-19 pandemic,
sales of the entire facility have been stable, and current year sales
have exceeded those of both the previous year and two years ago.

Approx. 40 min

On the environmental front, the facility acquired DBJ Green Building

Metropolitan Expy
Bayshore RouteCertification in June 2019 as a “property with excellent

Nishi-Funabashi

environmental & social awareness” (Rank ★★★) throughenergy and resource-saving initiatives, such as installation of LED lighting

Tokyo

and water-saving toilets in the facility. In addition, we installed solar panels

Shin-Urayasu

on the roof of the main building in July 2020, in order to further promote
environmental initiatives. All generated electricity is used within the facility,

Tokyo Bayand about 20% of the annual power consumption is provided

SotoboLineTokyo International Airportby the generated electricity. In addition, in support of Chiba’ssocial initiatives in which parents with infants can shop without worry,the nursing room of this facility is registered as a “Baby Station” and postedon the Chiba website.We will continue to focus on the operation

Chiba

Chiba City Office
Hon-Chiba

Tokyo Disney Resort

Enlarged
View

Higashi-Chiba
Chiba

of shopping centers for daily needs, and will work to promote further
environmental and social considerations in the operation of facilities.
Acquisition
price

JPY 3,097 mm

Location

Chiba, Chiba

Land area

180,010.00m 2

Gross floor
area
Core
tenant

5,716.18m 2

Chibachuo

KenchoMae
Hon-Chiba

Kawamachi Yahagi Mall

Chiba
Chiba-higashi JCT
University

Landrome Japan, Ltd.
6

Financial Highlights

KRR implements flexible financial strategies, aiming to produce stable profits in themedium to long-term and to steadily grow its portfolio.

1 Financial highlights
Long-term debt ratioaaaaaaaaaaaa
Fixed interest debt ratioaa

Weighted average debt maturity

12th FP

13th FP

Oct. 2021

100.0 %

100.0 %

100.0 %

96.8 %

97.7 %

97.0 %

4.4 years

4.4 years

4.4 years

LTV

aaaaa

44.8 %

44.1%

44.7 %

Number of lendersaaaaaaa

aaaa

12

14

18

1.00%

0.98 %

0.97 %

Average interest rateaaaaaa aaaaa

2 Improvement in borrowing terms
11th FP and 12th FP

13th FP and 14th FP

Average borrowing periodaa aa

5.7 years

5.9 years

Average interest rate aaaaaaa aa

0.77 %

0.67 %

3 Credit rating (as of October 31, 2021)
Credit rating (JCR)

A+ (Positive)

Rating Outlook improved from
“Stable” to “Positive” (January 2021)

4 Debt maturity schedule (as of October 31, 2021)
KRR believes that diversified debt maturity schedule will contribute to a stable financing standing.

Debt outstanding JPY 123,300 mm(excluding interest-bearing tenant leasehold and security deposits)(JPY bn)
150

Borrowings

Investment corporation bonds

100

50

0

18th
20th
24th 25th
26th
15th
16th
17th
21st
14th
22nd 23rd
19th
period period period period period period period period period period period period period

32nd 33rd
27th 28th
31st
29th
30th
period period period period period period period

7Portfolio List as of September 30, 2021
Total acquisition price

Weighted average occupancy rateJ P Y 2 4 5 , 2 7 4 mm
No.

Name of property

Number of tenants

99.6 %
Location(city / ward, prefecture)528

Acquisition
price(JPY mm)Occupancyrate(%) (Note 1)

Number oftenants (Note 2)

T-2

MONA Shin-Urayasu

Urayasu, Chiba

8,063

93.9

52

T-3

Passaggio Nishiarai
Daikanyama Address Dixsept (30% quasi-coownership)
Unicus Ina (80% quasi-co-ownership)

Adachi ward, Tokyo

5,850

98.2

41

Shibuya ward, Tokyo

1,617

93.8

24

Kitaadachi-gun, Saitama

3,576

100.0

1

100.0

1

T-4
T-5
T-6

Yorktown Kita-Kaname

Hiratsuka, Kanagawa

4,000

T-7

Unicus Yoshikawa

Yoshikawa, Saitama

3,600

100.0

10

T-8

Sports Club Renaissance Fujimidai

Nerima ward, Tokyo

2,586

100.0

1

T-9

Super Viva Home Iwatsuki (Land)

Saitama, Saitama

4,815

100.0

1

100.0

1

T-10

K’s Denki Shonan-Fujisawa (Land)

Fujisawa, Kanagawa

3,169

T-11

Unicus Kamisato (Land)

Kodama-gun, Saitama

3,000

100.0

1

T-12

Unicus Konosu (Land)

Konosu, Saitama

1,700

100.0

1

T-13

Inageya Yokohama Minamihonjuku (Land)

Yokohama, Kanagawa

1,442

100.0

1

3,360

100.0

1
2

T-15

Nakamachidai Tokyu Store

Yokohama, Kanagawa

T-16

Central Wellness Club Nagatsuta Minamidai

Yokohama, Kanagawa

1,724

100.0

T-17

Life Kameido

Koto ward, Tokyo

1,450

100.0

1

T-18

Totsuka-Fukaya Shopping Center (Land)

Yokohama, Kanagawa

4,170

100.0

2

T-19

Yumemachi Narashinodai Mall

Funabashi, Chiba

3,416

100.0

14

T-20

Kawamachi Yahagi Mall

Chiba, Chiba

3,097

100.0

12

T-21

Prime Square Jiyugaoka

Meguro ward, Tokyo

2,820

100.0

2

T-22

Round1 Ichikawa-Onitaka

Ichikawa, Chiba

1,880

100.0

1

T-23

Ozeki Tokiwadai

Itabashi ward, Tokyo

1,263

100.0

1

T-24

Konami Sports Club Shibuya

Shibuya ward, Tokyo

3,400

100.0

1

T-25

Apita Terrace Yokohama Tsunashima

Yokohama, Kanagawa

11,567

100.0

1

T-26

Kalsa Hiratsuka

Hiratsuka, Kanagawa

5,980

100.0

3

T-27

Monenosato Mall

Yotsukaido, Chiba

2,753

100.0

11

T-28

Chofu Center Building (Retail wing)

Chofu, Tokyo

2,300

100.0

3

T-29

Across Plaza Urayasu Higashino (Land)

Urayasu, Chiba

2,248

100.0

1

T-30

Comfort Market Nishi-Magome

Ota ward, Tokyo

1,920

100.0

1

T-31

Kitera Town Chofu

Chofu, Tokyo

10,500

96.4

26

T-32

Unicus Urawamisono (Land)

Saitama, Saitama

732

100.0

1

O-1

Blumer Maitamon

Kobe, Hyogo

8,389

98.9

50

O-2

Osaka, Osaka

2,685

100.0

1

Omihachiman, Shiga

2,140

100.0

2

O-4

Central Square Takadono (Land)DCM Kahma MEGA Don Quijote UNY
Omihachiman
Blumer HAT Kobe

Kobe, Hyogo

11,000

97.8

39

O-5

Carino Esaka

Suita, Osaka

6,555

98.6

29

O-6

COMBOX Komyoike

Izumi, Osaka

6,450

100.0

1

O-9

Life Nishi-Tengachaya

Osaka, Osaka

1,505

100.0

1

O-10

Million Town Tsukaguchi (Land)

Amagasaki, Hyogo

3,723

100.0

1

O-11

Habikigaoka Shopping Center

Habikino, Osaka

2,000

100.0

2

O-12

Merado Daikai

Kobe, Hyogo

5,440

100.0

7

N-1

DCM Kahma Nakagawa Tomita (Land)

Nagoya, Aichi

2,311

100.0

1

N-2

Valor Ichinomiya-Nishi

Ichinomiya, Aichi

2,174

100.0

1

N-4

Homecenter Kohnan Sunadabashi

Nagoya, Aichi

7,140

100.0

1

N-6

Resora Obu Shopping Terrace

Obu, Aichi

7,911

98.6

42

N-7

Valor Nakashidami (Land)

Nagoya, Aichi

2,551

100.0

1

F-1

Sunny Noma

Fukuoka, Fukuoka

1,497

100.0

1

F-2

Round1 Stadium Hakata-Hanmichibashi

Fukuoka, Fukuoka

5,020

100.0

1

F-3

Kurume-Nishi Shopping Center

Kurume, Fukuoka

1,515

100.0

4

R-1

Roseo Mito

Mito, Ibaraki

10,046

100.0

23

R-2

K's Denki Aomori Honten

Aomori, Aomori

1,469

100.0

1

898

100.0

1

O-3

R-3

Super Sports Xebio Aomori-Chuo

Aomori, Aomori

R-4

Ashico Town Ashikaga

Ashikaga, Tochigi

4,180

99.2

29

R-5

Yorktown Shinden-Higashi

Sendai, Miyagi

3,252

100.0

2

8

Portfolio Map as of October 31, 2021
R-4
T-11

L-5

T-12

T-8

T-26

T-16
T-18
T-10

T-6

SS

L-8
R-11

Logistics

T-9

T-7

R-9

R-1

T-23

T-22
T-17

T-19

T-21

R-3

L-7

T-20

T-2

R-2

T-27

T-29

T-30
T-25
Apita Terrace
Yokohama Tsunashima

T-15

T-13
L-4

R-5

L-2

F-4
Kitera Town
FukuokaNagahama

N-2

F-2

No.

N-7

O-3

F-1
O-4

O-10

O-1

F-3

第

Urban Station-Front SC

T-5

Kitera Town Chofu T-31
T-28
T-24
L-1

SM

R-6

L-3

UnicusUrawamisono T-32
(land)
L-6

NSC

R-1

O-12
Merado Daikai

Name of property

N-4

N-1
O-5
O-2
O-11

O-9

N-6
R-10
R-8

O-6

Location(city / ward, prefecture)

Acquisition
price(JPY mm)Occupancy rate Number of(%) (Note 1)
tenants (Note 2)

R-6

Kasumi Technopark Sakura

Tsukuba, Ibaraki

830

100.0

1

R-8

P-1 Plaza Tenno

Hamamatsu, Shizuoka

4,010

100.0

7

R-9

Seiyu Rakuichi Moriya (Land)

Moriya, Ibaraki

4,111

100.0

1

R-10

Sun Street Hamakita (90% quasi-co-ownership)

Hamamatsu, Shizuoka

10,746

98.6

49

R-11

Costco Wholesale Sapporo Warehouse

Sapporo, Hokkaido

4,210

100.0

1

期

L-1

Zama Distribution Center

Zama, Kanagawa

1,400

100.0

1

末

L-2

1,300

100.0

1

3,879

100.0

1

918

100.0

2

3,160

100.0

1

810

100.0

1

資

L-4

Oppama Distribution Center
Yokosuka, Kanagawa
Musashi Ranzan Distribution Center (90% quasi-coHiki-gun, Saitama
ownership)
Yokohama Kamigo Distribution Center
Yokohama, Kanagawa

産

L-5

Gyoda Distribution Center

Gyoda, Saitama

L-6

Shinjuku Nihiochiai Distribution Center

Shinjuku ward, Tokyo

L-7

Chiba-kita Distribution Center

Chiba, Chiba

1,250

100.0

1

Sapporo, Hokkaido

800

100.0

1

245,274

99.6

528

保
有

L-3

L-8

Sapporo Shiroishi Distribution Center
Total

Note 1: “Occupancy rate” is as of September 30, 2021.
Note 2: “Number of tenants” indicates the number of end-tenants as of September 30, 2021.

Note 3: Please refer to p.3 for the assets acquired in the 14th fiscal period.

9Overview of Portfolio (as of September 30, 2021)
T-2

MONA Shin-Urayasu

T-3

Passaggio Nishiarai

T-5

Unicus Ina

T-6

Yorktown Kita-Kaname

T-7

Unicus Yoshikawa

T-8

Sports Club
Renaissance Fujimidai

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)

Yokohama
T-13 Inageya
Minamihonjuku (Land)

T-16

Central Wellness Club
Nagatsuta Minamidai

T-17

Life Kameido

T-18

Totsuka-Fukaya
Shopping Center (Land)

T-19 Narashinodai Mall

T-21

Prime Square
Jiyugaoka

T-22

Round1 Ichikawa-Onitaka

T-23 Ozeki Tokiwadai

T-26

Kalsa Hiratsuka

T-20 Kawamachi Yahagi Mall

T-25 Apita Terrace Yokohama Tsunashima

O-1

Blumer Maitamon

Nakamachidai

T-15 Tokyu Store

Yumemachi

Konami Sports

T-24 Club Shibuya

T-27 Monenosato Mall

Across Plaza Urayasu

T-28 (Retail wing)

KDX Chofu Building

T-29 Higashino (Land)

O-2

Life Takadono (Land)

O-3

DCM Kahma MEGA Don
Quijote UNY Omihachiman

Comfort Market

T-30 Nishi-Magome

O-5

Carino Esaka

Note: Please refer p. 3 for the assets acquired in the 13th and 14th fiscal periods and the assets disposed of in the 14th fiscal period.

10

O-4

Blumer HAT Kobe

Million Town

O-10 Tsukaguchi (Land)

N-6

O-11

Habikigaoka Shopping
CenterResora Obu Shopping Terrace

O-6

COMBOX Komyoike

N-1

DCM Kahma
Nakagawa Tomita (Land)

N-2

N-7 Valor Nakashidami (Land)

F-3

Kurume-Nishi
Shopping Center

O-9

Life Nishi-Tengachaya

Valor Ichinomiya-Nishi

N-4

Homecenter Kohnan
Sunadabashi

F-1

Sunny Noma

F-2

Round1 Stadium
Hakata-Hanmichibashi

R-1

Roseo Mito

R-5

Yorktown ShindenHigashi

R-2

K’s Denki Aomori Honten

R-3

Super Sports Xebio
Aomori-Chuo

R-4

Ashico Town Ashikaga

R-6

Kasumi Technopark
SakuraR-8

P-1 Plaza Tenno

R-9

Seiyu Rakuichi Moriya(Land)

R-10

Sun Street Hamakita

R-11

Costco Wholesale
Sapporo Warehouse

L-1

Zama Distribution Center

L-2

Oppama Distribution
CenterL-3

Musashi Ranzan
Distribution Center

L-4

Yokohama Kamigo
Distribution Center

L-6

Shinjuku Nishiochiai
Distribution Center

L-7

Chiba-Kita Distribution
Center

L-8

Sapporo Shiroishi
Distribution Center

L-5

Gyoda Distribution Center11

Summar y of Investment Unit

Unit price and trading volume(Units)
1 00 , 0 0 0
February 10, 2015
JPY 266,100

340,000

40,000

Unit price

Volume310,000

35,000280,000

30,000250,000

25,000220,000

20,000190,000

1 5,000
September 30, 2021
JPY 288,900

160,000

1 0,000

5,000

130,000

100,000

Feb
10

Mar
31

Sep
30
2015

Mar
31

Sep
30

Mar
31

2016

Sep
30

Mar
31

Sep
30

Mar
31

2018

2017

Sep
30

2019

Mar
31

0

Mar
31

Sep
30
2020

Sep
30

2021

General breakdown of unitholders
As of September 30, 2021

Ownership ratio by investor type
Brokerage firms
15,056 units（2.6%）

Other domestic
corporation
311

Individuals
and others
71,532 units(2.2%)(12.3%)

Financial
Institutions
122

Foreign investors
149,094 units(25.6%)(0.2%)

14,377units(4.8%)

Foreign investors271(1.9%)
Brokerage firms
25(0.8%)

582,177
Other domestic
corporation
27,932 units

Number of unitholders by investor type

Financial
Institutions
318,563 units

Individuals and others
13,648(94.9%)(54.7%)

12

II. ASSET MANAGEMENT REPORT
Overview of Asset Management(1) Trends in Key Indicators
9th fiscal period

10th fiscal period

11th fiscal period

12th fiscal period

13th fiscal period(From April 1, 2019
to September 30, 2019)(From October 1, 2019
to March 31, 2020)(From April 1, 2020
to September 30, 2020)(From October 1, 2020
to March 31, 2021)(From April 1, 2021
to September 30, 2021)

Millions of yen

8,609

8,291

8,398

8,717

9,576

Millions of yen

8,367

8,234

8,272

8,263

8,901

Millions of yen

4,729

4,189

4,316

4,338

4,694

Millions of yen

3,891

3,359

3,479

3,377

3,662

Operating income

Millions of yen

3,879

4,101

4,082

4,379

4,881

Ordinary income

Millions of yen

3,288

3,499

3,505

3,799

4,262

Net income

Millions of yen

3,287

3,498

3,504

3,798

4,261

Total assets

Millions of yen

236,253249,246

251,655

251,773272,622%(-0.7)(+5.5)(+1.0)(+0.0)(+8.3)

Millions of yen

116,386

124,450

124,308

124,701

137,052%(-0.1)(+6.9)(-0.1)(+0.3)(+9.9)

Fiscal period
Operating revenues
Of which, property-related revenues
Property-related expenses
Of which, property-related expenses[Period-on-period changes]
Total net assets[Period-on-period changes]
Unitholders’ capital
Number of investment units issued andoutstanding
Net assets per unit

Millions of yen

113,399

121,183

121,183

121,183

133,103

Units

507,700

536,177

536,177

536,177

582,177

Yen

229,242

232,107

231,842

232,575

235,414

Distributions(Note 2)Millions of yen

3,292

3,503

3,509

3,804

4,266

Distributions per unit

Yen

6,486

6,535

6,546

7,095

7,328

Of which, distributions of earnings
Of which, distributions in excess ofretained earnings
Ordinary income to total assets (Note 3)

Yen

6,242

6,525

6,270

7,085

7,274

Yen

244

10

276

10

54

1.4

1.4

1.4

1.5

1.6

(2.8)

(2.9)

(2.8)

(3.0)

(3.2)

2.8

2.9

2.8

3.1

3.3

(5.6)

(5.8)

(5.6)

(6.1)

(6.5)

49.3

49.9

49.4

49.5

50.3

(+0.3)(+0.7)(-0.5)(+0.1)(+0.7)

Days

183

183

183

182

183

%

96.4

100.0

95.9

100.0

99.4

55

62

62

64

66

m2

850,456.06

945,177.87

941,020.65

956,496.64

997,493.50

480

496

496

502

528

%

98.9

99.4

99.7

99.8

99.6

Depreciation expense

Millions of yen

1,019

1,024

1,040

1,068

1,166

Capital expenditures

Millions of yen

791

475

544

543

628

Rental NOI (Net operating income) (Note 9)

Millions of yen

5,494

5,899

5,833

5,954

6,405

FFO (Funds from operation) (Note 10)

Millions of yen

4,093

4,498

4,431

4,426

4,774

[Annualized] (Note 4)
Return on net assets (Note 5)[Annualized](Note 4)

Net assets to total assets (Note 6)[Period-on-period changes]
Operating days
Payout ratio(Note 7)%%%

Number of properties
Leasable area
Number of tenants (Note 8)
Occupancy ratio

FFO per unit
Yen
8,063
8,389
8,265
8,254
8,200
Note 1: Figures above are rounded down for monetary amounts and rounded to the nearest tenth for ratios.
Note 2: Distributions in excess of earnings for the allowance for temporary difference adjustments are not considered.
Note 3: Ordinary income to total assets = Ordinary income / {(Total assets at beginning of period + Total assets at end of period) / 2} × 100
Note 4: For the first fiscal period, annualized as if the operation began from February 10, 2015, when the actual operation began.
Note 5: Return on net assets = Net income / {(Net assets at beginning of period + Net assets at end of period) / 2} × 100
Note 6: Net assets to total assets = Net assets at end of period / Total assets at end of period × 100
Note 7: Payout ratio = Total distibutions (excluding excess of earnings) / Net income × 100
When calculated as follows, the payout ratio is 100.2% for the period ended September 30, 2019, 100.2% for the period ended March 31, 2020,
100.1% for the period ended September 30, 2020, 100.1% for the period ended March 31, 2021 and 100.1% for the period ended September 30,
2021
Payout ratio = Total distributions (including excess of earnings) / Net income × 100
Note 8: As for building tenants, if a tenant leases multiple spaces in a building, each space is counted as one tenant. In a pass-through type master lease, thenumber of end-tenants is shown in parentheses. In a sublease type master lease, the number of master lessee is shown.
Note 9: Rental NOI = Property-related revenues - Property-related expenses + Depreciation expenses
Note 10: FFO = Net income + Depreciation + Amortization - Gain on sale of property + Loss on sale of property
Note 11: FFO per unit = FFO / Number of investment units issued and outstanding(Note 11)13

(2) Status of Asset Management(Overview of the Fiscal Period ended September 30, 2021)
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 (“J-REIT”) 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 end of the fiscal period ended
September 30, 2021 was 582,177 units.
KRR seeks to invest primarily in neighborhood, community and other shopping centers that cater to the day-to-day needsof 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 and investment operations to Kenedix Real Estate Fund Management, Inc. (“KFM”),
with the following strategies.

Note: For KRR’s management purposes and ease of classification, KRR defines shopping centers for daily needs as retail properties 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
from local 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
During the fiscal year under review, the Japanese economy continued to show signs of recovery, including improvements
in corporate capital spending. However, conditions remained challenging with weak consumer spending, particularly inservice spending, due to the impact of COVID-19 and the accompanying state of emergency declarations.
Shopping centers for daily needs, in which KRR focuses its investment, sales of service-oriented tenants including
restaurants and some apparel stores have been declining amid the COVID-19 pandemic, but specialty stores such as
supermarkets and home & garden stores that cater to the day-to-day needs of customers are expected to maintain steadydemand. However, there have been some signs of instability, partly due to expectations of tapering of monetary easingin the United States.
In the real estate trading market, some investors initially took a cautious stance toward real estate investment due to the
spread of the COVID-19. However, investors' willingness to invest in real estate has been recovering against the backdropof monetary easing policies in Japan and overseas, and active transactions are taking place.
iii) Management Performance(A) Acquisition of Assets
KRR acquired four assets (Unicus Urawamisono (Land) with acquisition price (Note 1) of 732 million yen, Kitera Town
Chofu with acquisition price of 10,500 million yen, Merado Daikai with acquisition price of 5,440 million yen and Apita
Terrace Yokohama Tsunashima (49% trust beneficiary quasi co-ownership interests) with acquisition price of 5,667
million yen). KRR disposed of three assets (Daikanyama Address Dixsept (30% trust beneficiary quasi co-ownershipinterests) with sale price (Note 2) of 1,993 million yen (acquisition price was 1,617 million yen), Unicus Ina (20% trust
beneficiary quasi co-ownership interests) with sale price of 1,048 million yen (acquisition price was 894 million yen)and Hankyu Oasis Hirakatadeguchi with sale price of 1,500 million yen (acquisition price was 1,280 million yen)).
As a result, the portfolio at the end of the period under review (September 30, 2021) consists of 66 properties with thetotal acquisition price of 245,274 million yen.

Note 1: “Acquisition price” represents the amount specified in the purchase and sale 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 asset.
Note 2: “Sale price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of the various
expenses (sale expenses, property tax, etc.) required in the sale of the asset.

(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 underreview (September 30, 2021) (Note 1). 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, byimplementing retail property and distribution centers management that better reflects the needs of our tenants, KRR
strives to accumulate know-how and improve tenant satisfaction.
KRR invests primarily in neighborhood and community shopping centers that cater to the day-to-day needs of customers.
The portfolio is diversified in terms of properties, tenants and other characteristics with a goal to generate consistentlong-term cash flows. At the same time, a portion of the rent includes sales-linked rent to explore the upside potential(Note 2) for rental income. By using these measures, KRR aims to pursue a portfolio that achieves both stability andgrowth.
As of the end of the period under review, portfolio as a whole performed well with an overall occupancy ratio of 99.6%.
Furthermore, the portfolio is diversified in terms of tenants as there are 528 end-tenants (Note 3) in KRR’s retailproperties and distribution centers.
Note 1:
Note 2:On December 1, 2020, KRR disposed of a quasi-co-ownership interest (40% equity interest) in the trust beneficiary interest of
Daikanyama Address Dixsept, and accordingly, the PM businesses of the property have been entrusted to persons other than the AssetManager.
“Upside potential” represents feasibility of rental income or cash flow growth.

14Note 3:The number of end-tenants is the sum of the number of end-tenants in a pass-through type master lease and the number of master lessees
in a sublease type master lease.

(C) Financing
When financing to acquire properties, KRR seeks to achieve the proper balance between financial stability and the costof the funds with the objectives to achieve stable medium- to long-term returns and consistent growth of assets undermanagement.
(Equity Finance)
In the fiscal period under review, KRR issued a total of 43,800 new units offered on April 20, 2021, and raised 11,350
million yen that was used to partially fund the acquisition of properties. In addition, 2,200 units were issued throughthird party allotment on May 18, 2021, raising 570 million yen, which is retained and will be used to fund part of theacquisition of properties or repayment of borrowings in the future. Due to these activities, unitholders’ capital increased
to 133,103 million yen as of September 30, 2021.
(Debt Finance)
During the fiscal period under review, KRR borrowed 7,500 million yen for the acquisition of properties and 7,200
million yen for refinancing. Consequently, borrowings totaled 112,300 million yen and interest-bearing debt including
investment corporation bonds (excluding interest-bearing tenant leasehold and security deposits) totaled 120,300 million
yen at the end of the fiscal period under review (September 30, 2021).
When undertaking borrowings, KRR seeks to spread out repayment dates and lengthen borrowing periods. KRR may
use swaps to fix the interest payments to hedge against the risk of a rise in interest rates.
As a result, the average maturity of debt is 4.4 years, the weighted average interest rate is 0.98%, the long-term debt ratio(Note 1) is 100.0% and the LTV ratio (Note 2) is 44.1%.
Note 1:
Note 2:Long-term debt ratio = (Long-term borrowings + Investment corporation bonds) / (Borrowings + Investment corporation bonds)
LTV ratio = (Loans payable + Investment corporation bonds) / Total assets(Credit Ratings)
The status of the credit ratings as of September 30, 2021 is as follows.
Credit rating agency
Japan Credit Rating Agency, Ltd. (JCR)

Details of the ratings
Long-term issuer rating

A+ (Outlook: Positive)

Rating on bonds

A+(Shelf Registration)
KRR filed a shelf registration statement for investment corporation bonds (excluding short-term investment corporation
bonds) on October 1, 2020. Details are as follows.
Planned issue amount
Planned issuance period

100,000,000,000 yen
October 9, 2020 to October 8, 2022

Use of funds

Acquisition funds for specified assets (as defined in Article 2, Paragraph 1 of the Investment Trust Law),
repayment funds for borrowings, repayment funds for investment corporation bonds (including short-term
investment corporation bonds), refund funds for lease and guarantee deposits, funds to pay for repairs andmaintenance, working capital, etc.

iv) Results of Operations
For this period, revenue was 9,576 million yen, operating income was 4,881 million yen, ordinary income was 4,262
million yen and net income was 4,261 million 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 31,437,558 yen allowance for temporary
adjustment (as defined in Article 2-2-30 of the Ordinance on Accountings of Investment Corporations (Cabinet Office
Ordinance No.47 of 2006, including subsequent amendments.)) for the purpose of reflecting the effect on distributionsof the difference in earnings calculated under Japanese GAAP and Japanese tax laws in association with the amortizationof fixed-term land lease rights (as defined in Article 2-2-30 (a) of the Ordinance on Accountings of Investment
Corporations) and the item deduced from net asset (as defined in Article 2-2-30 (b) of the Ordinance on Accountings ofInvestment Corporations) in association with deferred losses on hedges. This resulted in a distribution in excess ofearnings per unit of 54 yen.
Consequently, the distribution per unit was 7,328 yen (of which the distribution in excess of earnings per unit was 54
yen).

15

(3) Changes in Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ capital since its incorporation aresummarized in the following table.
Date

Type of issue

Total number of units issued andoutstanding (units)
Increase

BalanceUnitholders’ capital(in million yen) (Note 7)
Increase

Balance

Notes

April 18, 2017

Public offering

81,250503,700

18,244

112,500(Note 1)

May 17, 2017

Capital increase
through third-party
allocation

4,000

507,700

898

113,399(Note 2)October 23, 2019

Public offering

27,300535,000

7,462

120,861(Note 3)

1,177

536,177

321

121,183(Note 4)43,800579,977

11,350132,533(Note 5)

November 14, 2019
April 20, 2021

Capital increase
through third-party
allocation
Public offering

Capital increase(Note 6)through third-party
2,200
582,177570
133,103
allocation
Issued at issue price of 232,537 yen per unit (issue amount of 224,547 yen per unit) for acquisition of new properties.
Issued at issue amount of 224,547 yen per unit for repayment of borrowings.
Issued at issue price of 282,847 yen per unit (issue amount of 273,360 yen per unit) for acquisition of new properties.
Issued at issue amount of 273,360 yen per unit for part of future purchase funds for specified assets or repayment of borrowings.
Issued at issue price of 267,930 yen per unit (issue amount of 259,136 yen per unit) for acquisition of new properties.
Issued at issue amount of 259,136 yen per unit for part of future purchase funds for specified assets or repayment of borrowings.
Distributions in excess of earnings for the allowance for temporary difference adjustments are not considered.

May 18, 2021
Note 1:
Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:(Changes in Unit Price at Tokyo Stock Exchange)
The highest and lowest closing prices of the investment units listed on J-REIT section of the Tokyo Stock Exchange foreach fiscal period are as follows.
Fiscal period

9th fiscal period

10th fiscal period

11th fiscal period

12th fiscal period

13th fiscal period

For the period ended

September 30, 2019

March 31, 2020

September 30, 2020

March 31, 2021

September 30, 2021

Highest

JPY 291,800

JPY 301,500

JPY 218,000

JPY 274,900

JPY 305,500

LowestJPY 256,300

JPY 110,900

JPY 128,300

JPY 199,200

JPY 262,900

16

(4) Distributions
The distribution of earnings for the 13th fiscal period is 7,274 yen per unit. In order to maintain KRR’s favorable tax
treatment, which is available to J-REITs under Article 67-15 of the Special Taxation Measures Act, KRR intends todistribute most of KRR’s retained earnings.
Furthermore, KRR made a distribution in excess of earnings for the allowance for temporary adjustment for the purposeof reflecting the effect on distributions of the difference in earnings calculated under Japanese GAAP and Japanese tax
laws in association with the amortization of fixed-term land lease rights and the item deducted from net asset inassociation with deferred losses on hedges. This resulted in a distribution in excess of earnings per unit of 54 yen.
Consequently, the distribution per unit for the fiscal period, including the excess distribution, was 7,328 yen (of which
the distribution in excess of earnings per unit was 54 yen).
(in thousands of yen)
Fiscal period
For the period ended
Unappropriated retained
earnings
Retained earnings carriedforward
Total distributions[Distributions per unit]
Of which, distributions ofearnings[Distributions of earnings perunit]
Of which, distributions inexcess of retained earnings[Distributions in excess ofretained earnings per unit]
Total distributions in excessof earnings for the allowancefor temporary adjustment[Distributions per unit]

9th fiscal period
September 30, 2019

10th fiscal period
March 31, 2020

11th fiscal period
September 30, 2020

12th fiscal period
March 31, 2021

13th fiscal period
September 30, 2021

3,455,496

3,784,993

3,716,853

4,153,672

4,511,908

286,433

212,121355,023

250,664

277,152

3,292,942

3,503,916

3,509,814

3,804,175

4,266,193[6,486 yen]

[6,535 yen]

[6,546 yen]

[7,095 yen]

[7,328 yen]

3,169,063

3,498,554

3,361,829

3,798,814

4,234,755[6,242 yen]

[6,525 yen]

[6,270 yen]

[7,085 yen]

[7,274 yen]

123,878

5,361

147,984

5,361

31,437[244 yen][10 yen][276 yen][10 yen][54 yen]123,878

5,361

147,984

5,361

31,437[244 yen][10 yen][276 yen][10 yen][54 yen]Total distributions in excessof earnings from theunitholders’ capital for tax
purposes

－

－

－

－

－

[Distributions per unit]

[－]

[－]

[－]

[－]

[－]

17

(5) Management Policy and Issues to be Addressed
Outlook for Asset Management
It is considered necessary to pay attention to the uncertainties in the Japanese economy, such as stagnation of economic
activities due to a possible rebound in COVID-19 cases, despite the reduction in the number of COVID-19 cases and thelifting of the fourth state of emergency declaration in September 2021.
As for Japan’s retail environment, sales at service-oriented stores including restaurants, and some apparel stores havedeclined due to the COVID-19 pandemic, and continued caution is needed in this environment. On the other hand, evenin an environment marked by the pandemic, specialty stores such as supermarkets and home & garden that cater to the
day-to-day needs of customers are expected to maintain steady demand.
Under these circumstances, based on the following management policies, KRR will implement appropriate managementwith the aim of securing stable rental income, steadily growing assets, and building an appropriate financial base from a
medium-to long-term perspective.
(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 thevalue of our assets. One source is the Kenedix Group (Note), including Kenedix, Inc., the parent company of KFM. We
also receive support from our Alliance Companies: Sumitomo Mitsui Finance and Leasing Co., Ltd., SMFL MIRAI
Partners Co., Ltd., both of which are also KFM’s parent companies, Nippon Commercial Development Co., Ltd. andP&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.
When acquiring properties, we make decisions based on all applicable factors with emphasis on four parameters: theretail property’s attractiveness, location, profitability and the tenant mix. By using this selection process, we invest inretail properties with a competitive edge, and good prospects for consistent rental revenue and growth in asset value. We
also invest in carefully selected distribution centers, which supplement retail facilities in providing goods to consumers.
In addition, we invest in land ownership interests underlying retail properties. Regarding land-only properties, we makethese 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 the acquisition of preferential negotiation rights and opportunities
for additional revenues, 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 of the portfolio. This is assessed by comprehensive evaluation of the outlook for future profitability andasset 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. KRR believes that implementing
integrated asset and property management services makes it possible to properly manage retail properties and distribution
centers and pursue internal growth. Furthermore, this integrated management framework facilitates activities to enliven
local communities where KRR’s 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
・Implementing distribution center management“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 KRR’s in-house property management services
KFM provides property management services for all of KRR’s properties. KRR does 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, KRR uses direct contact with tenant companies at our properties in order to strengthen
tenant relationships and make properties more profitable. To this end, KRR maintains periodic communication withtenants and perform questionnaire surveys to customers for monitoring of market conditions, so that KRR can identify
the needs of tenants and the customers visiting their sites. This process makes it possible to find issues that stand in theway of achieving greater satisfaction for tenants and their customers. Once KRR has discovered points that require
attention, KRR takes 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 tenantmix, realizing growth in asset value by pursuing property expansions, and cutting costs, to improve tenant satisfaction
and acquire more know-how.
18

Pursuit of internal growth through management of retail properties
KRR seeks to improve the profitability and value of its portfolio through proper management of retail properties.
i. Effectively utilize capital expenditure
KRR will use proper and well-timed capital expenditures to increase the satisfaction of tenants and make its properties
more competitive.
ii. Optimize tenant mix
KRR will constantly work on attracting new tenants that are highly appealing to shoppers and replace tenants withothers, optimizing tenant composition, in order to seek stable revenue and higher profitability by attracting morecustomers.
iii. Realize growth in asset value by pursuing property expansions
KRR will use the extensive knowledge involving retail properties of the Kenedix Group and KRR’s Alliance Companies
to utilize the underutilized space (Note) at properties and expand properties. These measures will take into account thecompetitive position of each property, the effect on KRR’s financial position and other factors. By increasing spacethat can be leased, KRR aims 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 building
to the site area, which is prescribed in Article 52 of the Building Standards Act (Act No.201 of 1950, including subsequent amendments.)
and applied to each retail property in accordance with the Building Standards Act, City Planning Act (Act No.100 of 1968, including
subsequent amendments.) and other laws and regulations, by the land area that is allowed to be used as a retail property site, and subtractingfrom this figure the actual gross floor area of the building.

Directing investments and management policies to enliven local communities in the medium to long-term
At KRR’s properties, KRR seeks tenants that provide services, holds community involved events and uses other measures
to help enliven the local communities where KRR’s properties are located. KRR believes these activities will contributeto the medium to long-term growth in the asset value of these properties.
Implementing distribution center management
Since tenants of distribution centers that KRR invests may belong to the same business sectors as the tenants occupying
KRR’s retail properties, KRR utilizes KRR’s relationship with KRR’s retail tenants in building up KRR’s relationshipwith tenants of distribution centers. KRR believes these tenant relationships will contribute to the long-term managementof these distribution centers.
(C) Financing
KRR 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. KRR’s goal is to selectfinancing methods that result in the optimum balance between financial stability and the financing cost.
(D) Disclosure of Information
KRR’s policy concerning disclosure activities is to use extensive investor relations activities to distribute a broad range
of information to investors and other related parties as well as to announce information as soon and as accurately as
possible. KRR also distribute information with awareness on ESG (Environmental, Social and Governance) for
sustainable growth of unitholder interest. KRR uses TDnet (Timely Disclosure network) and press releases to meet the
timely-disclosure requirements of the Tokyo Stock Exchange. In addition, KRR proactively posts information on its
website (https://www.krr-reit.com/en/).
(E) Conflicts of Interest
In managing KRR’s assets, KFM has established Retail REIT Department Related-party Transactions Rules, and KFM
abides by the rules in conducting related-party transactions. In addition to managing the assets of KRR, KFM provides
asset management services to other REITs, which may incur conflicts of interests in acquisition of assets. In order toprevent the improper allocation of acquisition opportunities, KFM uses a “preferential right for acquisition opportunities”
system for the property acquisition process. KFM has a pipeline committee, which includes a compliance officer, andoperates in accordance with rules. This system is structured to prevent improper allocation of acquisition opportunities,
and thus, managing conflicts of interest among the REITs managed by KFM. Through these measures, KFM is taking
suitable actions regarding conflicts of interest.

19

(6) Important Subsequent Events
Not applicable(Reference Material)(A) Acquisition of Assets
KRR acquired following asset.
Property
numberF-4
Note 1:
Note 2:
Note 3:

Property
type(Note 1)

Property nameLocation

SellerAcquisition price(million yen)
(Note 3)

Appraisal value(million yen)
(Note 4)

Acquisition date

Kitera Town
Fukuoka,
G.K. FRP
6,000
6,100 October 1, 2021
Fukuoka Nagahama
Fukuoka
Properties are categorized into the following six types of properties: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC(Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center), SS (Specialty Store) and L (Logistics facility).
“Acquisition price” represents the amount specified in the purchase and sale 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 asset.
Appraisal values are as of September 1, 2021.
NSC(B) Disposition of Assets
KRR disposed of the following asset.
Property
numberT-4
Note 1:
Note 2:

Property type

Property nameLocation

Buyer

Sale price(million yen)
(Note 1)

Sale date

Daikanyama Address Dixsept
Urban Station- (30% quasi co-ownership
Undisclosed
Shibuya ward, Tokyo
1,993 October 1, 2021
Front SC
(Note 2)interests)“Sale price” represents the amount specified in the purchase and sale agreement for the trust beneficiary interests, exclusive of the various
expenses (sale expenses, property tax, etc.) required in the sale of the asset.
Undisclosed as KRR has not obtained consent from the seller.

(C) Financing
KRR borrowed 3,000 million yen (Series 43) on October 1, 2021 for the acquisition of assets.

20

Profile of KRR(1) Status of Unitholders’ Capital
11th fiscal period
12th fiscal period
13th fiscal period
9th fiscal period
10th fiscal period(From April 1, 2019 to (From October 1, 2019 (From April 1, 2020 to (From October 1, 2020 (From April 1, 2021 toSeptember 30, 2020)
to March 31, 2021)
September 30, 2021)
September 30, 2019)
to March 31, 2020)

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

5,000,000 units

5,000,000 units

5,000,000 units

5,000,000 units

5,000,000 units

507,700 units

536,177 units

536,177 units

536,177 units

582,177 units

Unitholders’ capital

113,399 million yen

121,183 million yen

121,183 million yen

121,183 million yen

133,103 million yen

Number of unitholders

10,907

13,558

13,941

13,852

14,377(2) Matters Concerning Investment Units
The following is a list of major unitholders as of September 30, 2021.
Name

Address

Number of units
held(Units)Ratio (%)
(Note)THE MASTER TRUST BANK OF JAPAN, LTD.
(Trust Acct.)

2-11-3 Hamamatsucho, Minato-ku, Tokyo

127,557

21.91

CUSTODY BANK OF JAPAN, LTD.
(Trust Acct.)

1-8-12 Harumi, Chuo-ku, Tokyo

53,805

9.24

THE NOMURA TRUST AND BANKING CO.,LTD. (Investment Trust Acct.)

2-2-2 Otemachi, Chiyoda-ku, Tokyo

28,788

4.94

CUSTODY BANK OF JAPAN, LTD.
(Securities Investment Trust Account)

1-8-12 Harumi, Chuo-ku, Tokyo

22,396

3.84

KENEDIX, INC.

2-1-6 Uchisaiwaicho, Chiyoda-ku, Tokyo

16,9502.91

14,321

2.45

10,815

1.85

8,026

1.37

7,732

1.32

7,454

1.28

297,844

51.16

3-11-1 Nihonbashi, Chuo-ku, Tokyo
Standing proxy: The Hongkong and Shanghai
Banking Corporation Ltd.
Shinagawa Intercity Tower A
2-15-1 Kohnan, Minato-ku, Tokyo
Standing proxy: Mizuho Bank, Ltd.

SSBTC CLIENT OMNIBUS ACCOUNTSTATE STREET BANK WEST CLIENTTREATY 505234
AOZORA BANK, LTD.

6-1-1 Kojimachi, Chiyoda-ku, Tokyo

STATE STREET BANK AND TRUSTCOMPANY 505103

Shinagawa Intercity Tower A
2-15-1 Kohnan, Minato-ku, Tokyo
Standing proxy: Mizuho Bank, Ltd.
Shinagawa Intercity Tower A
2-15-1 Kohnan, Minato-ku, Tokyo
Standing proxy: Mizuho Bank, Ltd.

JP MORGAN CHASE BANK 385781
Total
Note:

“Ratio” is the ratio to total number of units issued and outstanding, rounded down to the second decimal place.

21

(3) Matters Concerning Directors and Auditori) Executive Director, Supervisory Director, and Independent Auditor as of September 30, 2021
Position

Name

Executive Director Moyuru Watanabe

Total amount of fees
paid during the period(thousand yen)

Other concurrent title
Director & COO, Head of Retail REIT Department, KFM

1,500

Yoshitoshi Yasu

Yoshitoshi Yasu Certified Public Accountant / Tax Accountant OfficeDirector and audit comittee member (outside director) of Looop Inc.
Outside director of YOKU MOKU Holdings Co., Ltd.

1,500

Akiko Yamakawa

Partner of Vanguard Lawyers Tokyo
External Audit & Supervisory Board Member of TIS Inc.

1,500

Supervisory
Director(Note 1)

Independent Auditor Ernst & Young ShinNihon LLC
Note 1:
Note 2:14,800－(Note 2)

Although supervisory directors are concurrently officers in corporations other than the ones stated above, there are no conflicts of interest
between KRR and any other corporations, including those stated above.
Compensation for independent auditors includes compensation for preparing a comfort letter for the issuance of new investment units.

ii) Policy on Decisions to Terminate or not Reappoint the Accounting Auditor
The KRR Board of Directors will consider the termination of the Accounting Auditor pursuant to the provisions of theInvestment Trust Act of Japan. The directors will also consider not reappointing the Accounting Auditor after examining
the quality of audits, compensation for auditing and other applicable items.
(4) Asset Manager, the Custodian and Administrators
Asset manager, the custodian and administrators as of September 30, 2021 are as follows.
Operational role

Name

Asset manager

Kenedix Real Estate Fund Management, Inc.

Asset custodian

Mizuho Trust & Banking Co., Ltd.

Unitholders’ register agent

Mizuho Trust & Banking Co., Ltd.

General administrator

Mizuho Trust & Banking Co., Ltd.

Financial agent for investment corporation bonds

Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.

22

Status on Investment Properties(1) Component of Assets
Type ofspecified asset

Areas

Property type

(Note 1)

12th fiscal period
as of March 31, 2021
Total amount held
(Millions of yen)
(Note 2)

Shopping
centers fordaily needs
Trust beneficiaryinterest inreal estate

Note 2:
Note 3:

Total amount held
(Millions of yen)

Ratio (%)
(Note 3)(Note 2)

Ratio (%)
(Note 3)

Tokyo metropolitan
area

94,73637.6

109,236

40.1

Greater Osaka area

46,03618.3

50,227

18.4

Greater Nagoya area

21,9598.7

21,8598.0

Fukuoka area

7,855

3.1

7,815

2.9

Ordinance-designatedcities, core cities andother areas

43,76517.4

43,671

16.0

Other retailproperties

－

－

－

－

－

Distribution
centers－

10,049

4.0

9,983

3.7

Total of trust beneficiary interests in real estate

224,402

89.1

242,793

89.1

Distribution
centers

3,684

1.5

3,675

1.3

Total of real estate

3,684

1.5

3,675

1.3

Bank deposits and other assets

23,686

9.4

26,152

9.6

Total assets

251,773

100.0

272,622100.0

Real estate

Note 1:13th fiscal period
as of September 30, 2021－

“Areas” are categorized to the Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area and Ordinancedesignated 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 other areas” 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 KRR believes will have suitable customer traffic
from surrounding areas.
“Total amount held” is the amount allocated in the balance sheets as of the end of fiscal period (figures are on a net book value basis after
deducting depreciation), and is rounded down to the nearest million yen.
“Ratio” is the ratio of the amount allocated in the balance sheets to the total assets rounded to the nearest tenth.

23

(2) Major Assets Owned
The following are major assets owned (the ten largest properties by book value) by KRR as of September 30, 2021.
Property
Number

Property nameBook value(million yen)

Leasable area(m2)
(Note 1)

Leased area(m2)
(Note 2)

Occupancy
rate(%)(Note 3)

Ratio tototal rental
revenue(%)

Primary use(Note 4)－

T-25

Apita Terrace Yokohama Tunasima

11,601

44,568.05

44,568.05

100.0(Note 6)

RetailO-4Blumer HAT Kobe

11,154

23,775.88

23,261.53

97.8

5.2

Retail

T-31

Kitera Town Chofu

10,621

10,665.73

10,280.31

96.4

4.1

RetailR-10

Sun Street Hamakita

10,57048,697.31

48,004.76(Note 5)

98.6

5.9

RetailR-1

Roseo Mito

9,622

48,296.15

48,296.15

100.0

4.3

Retail

T-2

MONA Shin-Urayasu

9,070

9,955.84

9,352.76

93.9

5.4

RetailO-1

Blumer Maitamon

8,372

30,290.85

29,948.33

98.9

5.5

Retail

N-6

Resora Obu Shopping Terrace

8,013

19,909.33

19,634.11

98.6

3.2

RetailO-5Carino Esaka

6,875

7,542.69

7,440.84

98.6

3.3

Retail－RetailN-4

Homecenter Kohnan Sunadabashi
Total(Note 5)

6,806

20,329.07

20,329.07

100.0(Note 6)

92,709264,030.90

261,115.91

98.9(Note 6)－Note 1: “Leasable area” is equivalent to gross floor area of space that KRR considers 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.
Note 2: “Leased area” indicates the total leased area based on the lease agreements for each property as of September 30, 2021. As for lease agreementsof buildings, the leased area of warehouses and land are excluded. As for pass-through type master leases, the leased area based on the leaseagreements between the master lessee and the end-tenants as of September 30, 2021 is shown. As for sublease type master leases, the leased
area to the master lessee is shown.
Note 3: “Occupancy rate” is calculated by dividing leased area by leasable area as of September 30, 2021, rounded to the nearest tenth.
Note 4: “Ratio to total rental revenue” is calculated by rental revenue each property divided by total rental revenue.
Note 5: The area that KRR owns exclusively as proportion to the co-ownership interest (co-ownership ratio: 90%).
Note 6: KRR has not obtained consent from the tenant(s) to release this information.

24

(3) Overview of the Portfolio[Overview of Assets Owned]
The following summarizes the real estate or the real estate properties in trust owned by KRR as of September 30, 2021.
Area

Property
number
T-2
T-3
T-4

Property type
(Note 1)

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

Property nameLocation(City/ward, prefecure)(Note 2)MONA Shin-Urayasu

Urayasu, Chiba

Passaggio Nishiarai

Adachi ward, Tokyo

Daikanyama Address
Dixsept (Note 5)

Shibuya ward, Tokyo

T-5

NSC

Unicus Ina

Kitaadachi-gun, Saitama

T-6

NSC

Yorktown Kita-Kaname

Hiratsuka, Kanagawa

T-7

NSC

Unicus Yoshikawa

Yoshikawa, Saitama

T-8

SS

T-9

NSC

T-10

SS

T-11

NSC

Unicus Kamisato (Land)

Kodama-gun, Saitama

T-12

NSC

Unicus Konosu (Land)

Konosu, Saitama

T-13

SM

T-15

NSC

T-16

SS

T-17

SM

T

Sports Club
Renaissance Fujimidai
Super Viva Home
Iwatsuki (Land)
K’s Denki ShonanFujisawa (Land)

Inageya Yokohama
Minamihonjuku (Land)
Nakamachidai
Tokyu Store
Central Wellness Club
Nagatsuta MinamidaiLife Kameido
Totsuka-Fukaya
Shopping Center (Land)
Yumemachi
Narashinodai Mall

Nerima ward, Tokyo
Saitama, Saitama
Fujisawa, Kanagawa

Yokohama, Kanagawa
Yokohama, Kanagawa
Yokohama, Kanagawa
Koto ward, Tokyo

T-18

NSC

T-19

NSC

T-20

NSC

Kawamachi Yahagi Mall

Chiba, Chiba

T-21

SS

Prime Square Jiyugaoka

Meguro ward, Tokyo

T-22

SS

Round1 IchikawaOnitaka

Ichikawa, Chiba

T-23

SM

Ozeki Tokiwadai

Itabashi ward, Tokyo

T-24

SS

T-25

NSC

T-26

NSC

Kalsa Hiratsuka

Hiratsuka, Kanagawa

T-27

NSC

Monenosato Mall

Yotsukaido, Chiba

T-28

NSC

T-29

NSC

T-30

SM

T-31

NSC

Kitera Town Chofu

Chofu, Tokyo

T-32

NSC

Unicus Urawamisono(Land)

Saitama, Saitama

Konami Sports Club
Shibuya
Apita Terrace Yokohama
Tsunashima

KDX Chofu Building(Retail wing)
Across Plaza Urayasu
Higashino (Land)
Comfort Market
Nishi-Magome

Yokohama, Kanagawa
Funabashi, Chiba

Shibuya ward, Tokyo
Yokohama, Kanagawa

Chofu, Tokyo
Urayasu, Chiba
Ota ward, Tokyo

Ownership
form
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
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
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estateBook value(in million yen)

Evaluation value(in million yen)
(Note 3)

9,070

9,700

5,657

6,570

1,602

1,872

(Note 4)(Note 4)

3,468

4,216

(Note 4)(Note 4)

3,839

4,350

3,488

3,870

2,428

2,770

4,890

5,560

3,210

3,450

3,043

3,050

1,726

1,790

1,462

1,380

3,290

3,740

1,725

1,780

1,475

1,480

4,228

4,340

3,355

3,480

3,104

3,250

2,995

2,820

1,827

1,950

1,268

1,340

3,603

3,380

11,601

12,100

5,974

6,050

2,841

2,940

2,403

2,410

2,283

2,310

1,997

2,040

10,621

11,400

748

817

25

Area

O

Property
numberF(Note 1)

Property nameLocation(City/ward, prefecure)(Note 2)

O-1

NSC

Blumer Maitamon

Kobe, Hyogo

O-2

SM

Life Takadono (Land)

Osaka, Osaka

O-3

NSC

DCM Kahma MEGADon Quijote UNY
Omihachiman

Omihachiman, Shiga

O-4

NSC

Blumer HAT Kobe

Kobe, Hyogo

Carino Esaka

Suita, Osaka

COMBOX Komyoike

Izumi, Osaka

Life Nishi-Tengachaya

Osaka, Osaka

O-5
O-6

N

Property Type

Urban StationFront SC
Urban StationFront SC

O-9

SM

O-10

NSC

O-11

NSC

O-12

NSC

Merado Daikai

N-1

SS

DCM Kahma
Nagoya, Aichi
Nakagawa Tomita (Land)

N-2

NSC

Valor Ichinomiya-Nishi

N-4

SS

N-6

NSC

N-7

SM

F-1

SM

F-2

SS

F-3

NSC

R-1

NSC

R-2

SS

R-3

SS

R-4

NSC

Million Town
Tsukaguchi (Land)
Habikigaoka Shopping
CenterAmagasaki, Hyogo
Habikino, Osaka
Kobe, Hyogo

Homecenter Kohnan
Sunadabashi
Resora Obu Shopping
Terrace
Valor Nakashidami(Land)
Sunny NomaIchinomiya, Aichi
Nagoya, Aichi
Obu, Aichi
Nagoya, Aichi
Fukuoka, Fukuoka

Round1 Stadium
Hakata-Hanmichibashi
Kurume-Nishi Shopping
CenterRoseo Mito

Fukuoka, Fukuoka
Kurume, Fukuoka
Mito, Ibaraki

K’s Denki Aomori
HontenSuper Sports Xebio
Aomori-Chuo
Ashico Town Ashikaga
Yorktown ShindenHigashi
Kasumi Technopark
SakuraAomori, 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 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
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 estateBook value(in million yen)

Evaluation value(in million yen)
(Note 3)

8,372

9,600

2,727

3,200

2,101

2,590

11,154

11,100

6,875

7,320

6,140

6,450

1,525

1,720

3,772

4,070

2,054

2,020

5,502

5,790

2,351

2,690

2,099

2,360

6,806

7,510

8,013

7,050

2,587

2,560

1,367

1,650

4,908

5,800

1,538

1,840

9,622

12,000

1,423

1,520

854

912

4,406

4,930

3,210

2,570

920

982

4,130

4,350

4,320

4,280

10,57010,980

4,212

4,430

R-5

NSC

R-6

SM

R-8

NSC

P-1 Plaza Tenno

Hamamatsu, Shizuoka

R-9

NSC

Seiyu Rakuichi Moriya(Land)Moriya, Ibaraki

R-10

NSC

Sun Street Hamakita

Hamamatsu, Shizuoka

R-11

SS

Costco Wholesale
Sapporo Warehouse

Sapporo, Hokkaido

L-1

L

Zama Distribution Center Zama, Kanagawa

Real estate

1,467

1,750

L-2

L

Real estate

1,339

1,650

L-3

L

4,250

L

964

1,040

L-5

L

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

3,762

L-4

3,178

3,590

L-6

L

Oppama Distribution
CenterMusashi Ranzan
Distribution Center
Yokohama Kamigo
Distribution Center
Gyoda Distribution
CenterShinjuku Nishiochiai
Distribution Center
Chiba-Kita Distribution
Center
Sapporo Shiroishi
Distribution Center

Real estate

869

842

1,253

1,340

825

1,030

246,469

263,971

R

－

L-7

L

L-8

L

Total

Sendai, Miyagi

Ownership
form

Tsukuba, Ibaraki

Yokosuka, Kanagawa
Hiki-gun, Saitama
Yokohama, Kanagawa
Gyoda, Saitama
Shinjuku ward, Tokyo
Chiba, Chiba
Sapporo, Hokkaido

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate(Note 4)(Note 4)(Note 4)(Note 4)Note 1: Properties are categorized into the following six types of properties: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC (Community
Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center), SS (Specialty Store) and L (Logistics facility).
26

We categorize shopping centers for daily needs as follows.
Type of shopping centers for daily
needs

Features

Trade area

NSC (Neighborhood Shopping
Centers)

Shopping centers with a supermarket as an anchor or core tenant and several
specialty store tenants

3km-5km

SM (Supermarkets)

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

3km

CSC (Community Shopping Centers)

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

5km-10km

Shopping centers that are located in the immediate vicinity of an urban public
3km-10kmtransportation station, which take advantage of stable foot traffic
Single- or multiple-tenant shopping centers that specialize in a single type ofSS (Specialty Stores)
merchandise or service, such as drug stores, convenience stores, health clubs or
1km-10km
electronic appliance stores“T”, “O”, “N”, “F” and “R” hereinafter refers to Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area, the Fukuoka area andOrdinance-designated cities, core cities and other areas, respectively.
“Location” indicates the residential address. For those without a residential address, the building or land address on the registry is shown.
“Evaluation value” shows the appraisal value stated on the real estate appraisal report created by the real estate appraisers of Daiwa Real EstateAppraisal 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 of Incorporation as well as the regulations as stipulated by The Investment Trusts Association, Japan.
The amount and proportion of quasi co-ownership interests that KRR owns are shown.
KRR disposed of a quasi-co-ownership interest (40% a quasi-co-ownership interest) in the trust beneficiary interest of Daikanyama Address Dixsept
on December 1, 2020, a quasi-co-ownership interest (30% a quasi-co-ownership interest) on April 1, 2021, and a quasi-co-ownership interest (30%a quasi-co-ownership interest) on October 1, 2021.
Urban Station-Front Shopping Centers

Note 2:
Note 3:Note 4:Note 5:27

[Earnings Performance for the Individual Properties]

Area

Property
number

Propertytype

Property name12th fiscal period
as of March 31, 2021
RentalNumberrevenue
Occupancyof tenants(millionrate (%)(Note 1)yen)
(Note 2)

T-2
T-3
T-4

T

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

13th fiscal period
as of September 30, 2021
RentalRatio toRatio toNumberrevenue
total rental
Occupancy
total rentalof tenants(millionrevenuerate (%)
revenue(Note 1)
yen)
(%)
(%)
(Note 2)MONA Shin-Urayasu

1(53)

94.6

486

5.9

1(52)

93.9

478

5.4

Passaggio Nishiarai

1(41)

100.0

292

3.5

1(41)

98.2

298

3.3

Daikanyama Address
Dixsept

1(26)

97.2

186

2.3

1(24)

93.8

75

0.8

1.7

1

100.0

115

1.3

T-5

NSC

Unicus Ina (Note 4)

1

100.0

142

T-6

NSC

Yorktown KitaKaname

1

100.0

－

－

100.0

－

(Note 3)

1－(Note 3)(Note 3)(Note 3)

T-7

NSC

Unicus Yoshikawa

1(9)

99.6

131

1.6

1(10)

100.0

132

1.5

T-8

SS

1

100.0

1

100.0

T-9

NSC

1

100.0

1

100.0

T-10

SS

1

100.0

1

100.0

T-11

NSC

1

100.0

75

0.9

1

T-12

NSC

1

100.0

43

0.5

T-13

SM

1

T-15

NSC

T-16

SS

T-17

SM

T-18

NSC

T-19

NSC

T-20

NSC

T-21

SS

T-22

SS

T-23

SM

T-24

SS

T-25

NSC

T-26

NSC

T-27

NSC

Sports Club
Renaissance
Fujimidai
Super Viva Home
Iwatsuki (Land)
K’s Denki ShonanFujisawa (Land)
Unicus Kamisato(Land)
Unicus Konosu(Land)
Inageya Yokohama
Minamihonjuku(Land)
Nakamachidai Tokyu
Store
Central Wellness
Club Nagatsuta
Minamidai
Life Kameido
Totsuka-Fukaya
Shopping Center(Land)
Yumemachi
Narashinodai Mall
Kawamachi Yahagi
Mall
Prime Square
Jiyugaoka
Round1 IchikawaOnitaka
Ozeki Tokiwadai
Konami Sports Club
Shibuya
Apita Terrace
Yokohama
Tsunashima－－(Note 3)(Note 3)－－(Note 3)(Note 3)

100.0

75

0.8

1

100.0

43

0.5

100.0

1

100.0

1

100.0

1

100.0

2

100.0

2

100.0

1

100.0

1

100.0

2

100.0

2

100.0

1(14)

100.0

138

1.7

1(14)

1(12)

100.0

112

1.4

2

－

－

(Note 3)(Note 3)－－(Note 3)(Note 3)

100.0

149

1.7

1(12)

100.0

114

1.3

100.0

2

100.0

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

－

－

(Note 3)(Note 3)－－(Note 3)(Note 3)

100.0

110

1.2

3

100.0

85

1.0

1

100.0

－

－

(Note 3)(Note 3)(Note 3)

48

0.6

1

100.0

48

0.5

1

100.0

1

100.0

1

100.0

Kalsa Hiratsuka

3

100.0

3

100.0

Monenosato Mall

1(11)

100.0

92

1.1

1(11)

3

100.0

85

1.0

1

100.0

－

－

(Note 3)

1

100.0

KDX Chofu Building(Retail wing)
Across Plaza Urayasu
Higashino (Land)
Comfort Market
Nishi-Magome

T-28

NSC

T-29

NSC

T-30

SM

T-31

NSC

Kitera Town Chofu

－

－

－

－

1(26)

96.4

364

4.1

NSC

Unicus Urawamisono(Land)

－

－

－

－

1

100.0

18

0.2

T-32

28

Area

Property
number

Propertytype

Property name12th fiscal period
as of March 31, 2021
RentalNumberrevenue
Occupancyof tenants(millionrate (%)(Note 1)yen)
(Note 2)

O-1

NSC

Blumer Maitamon

50

99.8

O-2

SM

Life Takadono (Land)

1

100.0

O-3

NSC

DCM Kahma MEGADon Quijote UNY
Omihachiman

O-4

NSC

O-5
O

N

F

O-6

Urban StationFront SC
Urban StationFront SC

O-7

SM

O-9

SM

O-10

NSC

O-11

NSC

O-12

NSC

Merado Daikai
DCM Kahma
Nakagawa Tomita(Land)
Valor IchinomiyaNishi
Homecenter Kohnan
Sunadabashi
Resora Obu Shopping
TerraceRound1 Stadium
HakataHanmichibashi
Kurume-Nishi
Shopping Center
Roseo Mito
K’s Denki Aomori
HontenSuper Sports Xebio
Aomori-Chuo
Ashico Town Ashikaga
Yorktown ShindenHigashi
Kasumi Technopark
Sakura

R-6

SM

R-8

NSC

P-1 Plaza Tenno

R-9

NSC

Seiyu Rakuichi Moriya(Land)R-10

NSC

Sun Street Hamakita

L

L-2

L

L-3

L

－
L-4

L

L-5

L

L-6

L

100.0

226

2.5

Costco Wholesale
Sapporo Warehouse
Zama Distribution
Center
Oppama Distribution
CenterMusashi Ranzan
Distribution Center
Yokohama Kamigo
Distribution Center
Gyoda Distribution
CenterShinjuku Nishiochiai
Distribution Center

－

－

1

100.0

(Note 3)(Note 3)－－(Note 3)(Note 3)

1

100.0

44

0.5

1

100.0

44

0.5

1

100.0

1

100.0

2

100.0

7

100.0

1

100.0

1

100.0

1

100.0

1(42)

98.6

1

100.0

1

100.0

1

100.0

－

－

(Note 3)(Note 3)

－

－

2

100.0

－

－

1

100.0

1

100.0

1

100.0

1(42)

98.6

287
－

－

(Note 3)(Note 3)－－(Note 3)(Note 3)

100.0

L-1

1

－

1

SS

3.3

2.7

Sunny Noma

R-11

293

－

SM

NSC

98.6

225

F-1

R-5

1(29)

100.0

100.0

R

5.2

1

1

NSC

466

3.5

Valor Nakashidami(Land)

R-4

97.8

292

SM

SS

－
(Note 3)

98.6

Hankyu Oasis
Hirakatadeguchi (Note 4)
Life
Nishi-Tengachaya
Million Town
Tsukaguchi (Land)
Habikigaoka
Shopping Center

5.5

－

1(29)

COMBOX Komyoike

490(Note 3)Carino Esaka

N-7

R-3

100.0

1(39)

NSC

SS

2

5.7

N-6

R-2

(Note 3)

100.0

473

SS

NSC

(Note 3)

1

98.8

N-4

R-1

－

98.9

1(40)

NSC

NSC

－

50

Blumer HAT Kobe

N-2

F-3

5.8

100.0

SS

SS

481

2

N-1

F-2

13th fiscal period
as of September 30, 2021
RentalRatio toRatio toNumberrevenue
total rental
Occupancy
total rentalof tenants(millionrevenuerate (%)
revenue(Note 1)
yen)
(%)
(%)
(Note 2)－－

(Note 3)(Note 3)

3.5

386

4.3

1

100.0

378

4.6

1

100.0

2

100.0

1

100.0

1(7)

100.0

3.2

－

－

(Note 3)(Note 3)

135

1.6

－

－

－
(Note 3)

100.0

100.0

260

－
(Note 3)

1(23)

1(23)

99.1

3.2

0.6

4

1(29)

282

52

0.6

100.0

－
(Note 3)

100.0

52

1

－
(Note 3)

－

100.0

－

2.0

(Note 3)

4(Note 3)

177

－

100.0

－

－
(Note 3)(Note 3)

1(Note 3)－(Note 3)

1

100.0

1(29)

99.2

2

100.0

1

100.0

1(7)

100.0

－

－

(Note 3)(Note 3)

271

3.1

－

－

(Note 3)(Note 3)

133

1.5

－

－

1

100.0

(Note 3)(Note 3)1100.0(Note 3)(Note 3)

1(53)

99.4

537

6.5

1(49)

98.6

525

5.9

－

－

(Note 3)(Note 3)

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

2

100.0

－

－

(Note 3)(Note 3)

2

100.0

1

100.0

1

100.0

1

100.0

1

100.0

－

－

(Note 3)(Note 3)－－(Note 3)(Note 3)

29

L-7
L-8

Chiba-Kita Distribution
Center
Sapporo Shiroishi
Distribution Center

L
L
Total

1

100.0

1

100.0

502

99.8

－

－

(Note 3)(Note 3)

8,263

100.0

1

100.0

1

100.0

528

99.6

－

－

(Note 3)(Note 3)

8,901

100.0

Note 1: 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 withleasehold interest) on each such property used mainly as stores and offices, as of September 30, 2021. Where one lessee leases more than one sectionof the property, the lessee is counted as a tenant for each section leased within the property. Where pass-through type master lease agreements areentered 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. As for the “Total” of “Number of tenants”, the number of end-tenants is used forpass-through type master leases and the number of master lessee is used for sublease type master leases.
Note 2: Rental revenue is based on total rental and other operating revenues of each property.
Note 3: KRR has not obtained consent from the tenant(s) to release this information.
Note 4: Unicus Ina (20% a quasi-co-ownership interest) was disposed of on April 9, 2021 and Hankyu Oasis Hirakatadeguchi was disposed of on August 2,
2021.

30

(4) Specified Transaction
As of September 30, 2021, the contract amount and fair value of the outstanding transaction under the specified
transaction account of KRR are as follows.
Contract amount (million yen) (Note 1)
Type

Due after one year

Fair value(million yen)
(Note 2) (Note 3)(Note 1)OTC

Interest rate swaps:
Receive floating / pay fixed

86,61079,160

-276

Total

－

86,61079,160-276

Note 1: The contract amount of interest rate swaps is based on its notional principal.
Note 2: For the financial reporting purpose, the transaction is not measured at fair value but accounted for under special treatment for interest
rate swaps based on “Accounting Standards for Financial Instruments” under Japanese GAAP.
Note 3: Based on the amount provided by counterparty financial institutions.

(5) Other Assets
Real estate or beneficiary rights of real estate in trust owned by KRR are disclosed in “(3) Overview of the Portfolio”.
KRR has no other specified assets.
(6) Asset in Geographic Area
KRR owns no asset in specified area other than Japan.

31Capital Expenditures(1) Planned Capital Expenditures
The table below shows major capital expenditures for renovations, repairs and other projects that are planned for the 14th
fiscal period ending March 31, 2022. These expenditures are for real estate owned by KRR and real estate in trusts inwhich KRR owns trust beneficiary rights. These planned projects may include some expenditure that will be recorded as
expenses rather than capital expenditures for accounting purposes.
Property
number
T-2
T-27
L-5
L-2
L-8
L-8

Property nameLocation

PurposeSchedule

MONA
Shin-Urayasu

Urayasu, Chiba

Air Conditioning equipment
replacement (phase 4)

Monenosato Mall

Yotsukaido,
Chiba

Solar panel installation

From October 2021
to March 2022
From October 2021
to March 2022
From October 2021
to March 2022
From October 2021
to March 2022
From October 2021
to March 2022
From October 2021
to March 2022

Gyoda Distribution
Center
OppamaDistribution Center
Sapporo Shiroishi
Distribution Center
Sapporo Shiroishi
Distribution Center

Gyoda, Saitama
Yokosuka,
Kanagawa
Sapporo,Hokkaido
Sapporo,Hokkaido

Air Conditioning equipment
replacement
Water supply system
replacement
Elevator renewal
Cubicle replacenent

Planned amount of capital expenditure(Millions of yen)
Payment for the Total amountTotal
periodalready paid
278

-

-

110

-

-

66

-

-

14

-

-

10

-

-

10

-

-

(2) Capital Expenditures during the Fiscal Period under Review
The table below shows major capital expenditures for renovations, repairs and other projects in the fiscal period underreview.
The amount of capital expenditures in the fiscal period under review was 628 million yen. There were also expendituresof 247 million yen that were recorded as repair expenses. In total KRR spent 876 million yen on the projects.
Property
number

Property nameLocation

PurposeSchedule

Capital expenditure(Millions of yen)

Replacement of heat source and air
conditioning equipment (Phase 1)

From April 2021
to September 2021

190

Kasumi Technopark
Tsukuba, Ibaraki
SakuraRepair work in relation to floor expansion

From January 2021
to April 2021

89

T-2

MONA ShinUrayasu

Urayasu, Chiba

Air conditioning equipment replacement(phase 3)

From April 2021
to September 2021

65

T-2

MONA ShinUrayasu

Urayasu, Chiba

Exterior wall repair work (phase 2)

From April 2021
to September 2021

56

T-21

Prime Square
Jiyugaoka

Meguro ward, Tokyo Exterior wall repair work

From April 2021
to July 2021

18

O-5

Carino Esaka

R-6

Suita, Osaka

Others

207

Total

628

(3) Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
Not applicable32

Expenses and Liabilities(1) Expenses related to Asset Management
12th fiscal period(From October 1, 2020
to March 31,2021)(in thousands of yen)
13th fiscal period(From April 1, 2021
to September 30,2021)

Asset management fees (Note)

808,051

873,967

Asset custody fees

10,178

10,182Administrative service fees

32,90333,936

Directors' compensation

4,500

4,500

Other operating expenses

105,424

109,945

Total

961,058

1,032,531

Note: In addition to above, the amount of asset management fees capitalized are 24,021 thousand yen for the 12th fiscal period and 223,401 thousand yen
for the 13th fiscal period related to the acquisition of properties that entered the book value of the properties. The amount of asset management fees
related to the disposition of properties are 13,288 thousand yen for the 12th fiscal period and 22,706 thousand yen for the 13th fiscal period.

33

(2) Status of Borrowings
Borrowings on a financial institution basis as of September 30, 2021 are as follows.
Classification

LenderBalance at the
Increase during the Decrease during Balance at the end
beginning of period
periodthe periodof period(Thousands of yen) (Thousands of yen) (Thousands of yen) (Thousands of yen)

Averageinterest rate
(Note 1)
(Note 2)(％)

Payment due date
（Note 3）500,000－

500,000－

2,600,000－

2,600,000－

Aozora Bank, Ltd.

500,000－

500,000－

MUFG Bank, Ltd.

400,000－

400,000－

Sumitomo Mitsui Trust Bank, Ltd.

300,000－

300,000－

Resona Bank, Ltd.

300,000－

300,000－

MUFG Bank, Ltd.（Note5）

600,000－

600,000－

0.400

Development Bank of Japan Inc.（Note5）

500,000－

500,000－

0.553

Mizuho Bank, Ltd. （Note5）

400,000－

400,000－

0.553

Mizuho Trust & Banking Co., Ltd.（Note5）200,000－

200,000－

0.553

Sumitomo Mitsui Banking Corporation

900,000－

900,000－

0.477

Sumitomo Mitsui Banking Corporation

2,600,000－－

2,600,000

MUFG Bank, 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.（Note5）

1,600,000－－

1,600,000

1.033 February 10, 2022

Sumitomo Mitsui Banking Corporation

2,750,000－－

2,750,000

0.484January 31, 2022

MUFG Bank, Ltd.（Note6）

1,250,000－－

1,250,000－

August 31, 2022

800,000－

0.603

Mizuho Bank, Ltd.（Note6）800,000

1.366

April 16, 2025

0.975

March 31, 2023

0.994

March 31, 2023

0.987

March 31, 2023

1.013

March 31, 2023

1.110

March 31, 2024

The Gunma Bank, Ltd.（Note5）
Sumitomo Mitsui Banking Corporation

0.485

Current Portion of Long-Term Loans Payable

7,200,000

11,800,000－

4,600,000

MUFG Bank, Ltd.

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

MUFG Bank, Ltd.

400,000－－

400,000

1,500,000－－

1,500,000

MUFG Bank, Ltd.

450,000－－

450,000

Resona Bank, Ltd.

200,000－－

200,000

The Musashino Bank, Ltd.

150,000－－

150,000

Development Bank of Japan Inc.（Note5）

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

MUFG Bank, 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

1,500,000－－

1,500,000

MUFG Bank, Ltd.

400,000－－

400,000

Sumitomo Mitsui Trust Bank, Ltd.

450,000－－

450,000

0.803 September 30, 2024

Development Bank of Japan Inc.（Note5）

890,000－－

890,000

0.760 September 30, 2024

2,670,000－－

2,670,000

0.932

April 21, 2026

890,000－－

890,000

0.888

October 31, 2025

Development Bank of Japan Inc.（Note5）

2,000,000－－

2,000,000

1.049

Mizuho Trust & Banking Co., Ltd.（Note5）

1,000,000－－

1,000,000

1.049

500,000－－

500,000

1.002

Long-Term Loans Payable

Resona Bank, Ltd.

1.243

1,500,000－－

1,500,000

Sumitomo Mitsui Trust Bank, Ltd.

400,000－－

400,000

Aozora Bank, Ltd.

400,000－－

400,000

Resona Bank, Ltd.

300,000－－

300,000

Sumitomo Mitsui Banking Corporation

Unsecured/
Unguaranteed

0.978 February 10, 2022－

MUFG Bank, Ltd.

(Note 4)

April 30, 2021－

Sumitomo Mitsui Banking Corporation

Unsecured/
Unguaranteed

April 27, 2021

4,600,000

Sumitomo Mitsui Banking Corporation(Note 4)

April 27, 2021

19,000,000

Development Bank of Japan Inc.（Note5）

Remarks

0.550 September 30, 2021

Sumitomo Mitsui Banking Corporation

Sub Total

Use

0.772

April 16, 2025

January 31, 2027

October 31, 2024

34

MUFG Bank, Ltd.（Note5）

600,000－－

600,000

0.696

Mizuho Bank, Ltd. （Note5）

600,000－－

600,000

0.815

Development Bank of Japan Inc.（Note5）

500,000－－

500,000

0.814

Mizuho Trust & Banking Co., Ltd.（Note5）200,000－－

200,000

0.814

MUFG Bank, Ltd.（Note5）

500,000－－

500,000

0.903

October 31, 2026

Sumitomo Mitsui Banking Corporation

500,000－－

500,000

Sumitomo Mitsui Trust Bank, Ltd.

500,000－－

500,000

1.033

May 18, 2027

Resona Bank, Ltd.

400,000－－

400,000

Development Bank of Japan Inc.（Note5）

500,000－－

500,000

1.050

Mizuho Bank, Ltd. （Note5）

500,000－－

500,000

1.049

Mizuho Trust & Banking Co., Ltd.（Note5）

300,000－－

300,000

1.050

October 31, 2024

May 18, 2027

500,000－－

500,000

0.670 September 29, 2023

1,500,000－－

1,500,000

0.918 September 30, 2026

MUFG Bank, Ltd.（Note5）

500,000－－

500,000

0.930

Mizuho Bank, Ltd. （Note5）

1,500,000－－

1,500,000

1.029

Sumitomo Mitsui Trust Bank, Ltd.

1,500,000－－

1,500,000

1.100 September 29, 2028

500,000－－

500,000

1,200,000－－

1,200,000

Sumitomo Mitsui Banking Corporation

900,000－－

900,000

0.988

April 30, 2027

Sumitomo Mitsui Banking Corporation

2,600,000－－

2,600,000

0.985

April 30, 2027

Sumitomo Mitsui Banking Corporation

2,000,000－－

2,000,000

0.902

April 30, 2026

Mizuho Bank, Ltd.

1,000,000－－

1,000,000

1.090

April 30, 2028

The Bank of Fukuoka, Ltd.

1,000,000－－

1,000,000

0.907

May 31, 2026

Sumitomo Mitsui Banking Corporation

1,500,000－－

1,500,000

0.999

MUFG Bank, Ltd.（Note5）

500,000－－

500,000

0.900

Mizuho Bank, Ltd.

500,000－－

500,000

0.999

Mizuho Trust & Banking Co., Ltd.

500,000－－

500,000

0.999

Nippon Life Insurance Company

700,000－－

700,000

0.913

Sumitomo Mitsui Trust Bank, Ltd.

700,000－－

700,000

0.726

Resona Bank, Ltd.

500,000－－

500,000

0.676

Aozora Bank, Ltd.

500,000－－

500,000

0.726

Mizuho Bank, Ltd.

400,000－－

400,000

0.726

MUFG Bank, Ltd.（Note5）
Sumitomo Mitsui Trust Bank, Ltd.

Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.（Note5）

September 29, 2027

1.035

October 3, 2027

1.000 February 10, 2028

May 31, 2027

Long-Term Loans Payable

March 31, 2025
(Note 4)

March 31, 2026

400,000－－

400,000

0.676

Sumitomo Mitsui Banking Corporation

1,850,000－－

1,850,000

0.910

MUFG Bank, Ltd.

1,300,000－－

1,300,000

0.860

Resona Bank, Ltd.

650,000－－

650,000

0.460

August 31, 2024

Aozora Bank, Ltd.

890,000－－

890,000

0.585

August 31, 2026

Mizuho Bank, Ltd.

1,370,000－－

1,370,000

0.718

March 31, 2028

820,000－－

820,000

0.550

October 31, 2024

1,270,000－－

1,270,000

0.750

January 31, 2028

650,000－－

650,000

0.670

April 30, 2028

MUFG Bank, Ltd.（Note5）

1,500,000－－

1,500,000

0.520

Sumitomo Mitsui Banking Corporation

1,000,000－－

1,000,000

0.644Mizuho Bank, Ltd.

1,000,000－－

1,000,000

0.644Mizuho Trust & Banking Co., Ltd.（Note5）

500,000－－

500,000

0.550

Resona Bank, Ltd.

300,000－－

300,000

0.644

Development Bank of Japan Inc.（Note5）

500,000－－

500,000

0.830

October 31, 2029

The Gunma Bank, Ltd.

400,000－－

400,000

0.498

January 31, 2025

The Musashino Bank, Ltd. （Note5）

400,000－－

400,000

0.478

January 31, 2025

Sumitomo Mitsui Banking Corporation

700,000－－

700,000

0.758 September 30, 2028
0.725

January 31, 2029

0.809

January 31, 2030

The Musashino Bank, Ltd.

Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.（Note5）

March 31, 2028

450,000－－

450,000

3,000,000－－

3,000,000

MUFG Bank, Ltd.

700,000－－

700,000

Sumitomo Mitsui Trust Bank, Ltd.

500,000－－

500,000

Resona Bank, Ltd.

450,000－－

450,000

Mizuho Bank, Ltd.

400,000－－

400,000

Aozora Bank, Ltd.
Sumitomo Mitsui Banking Corporation

Unsecured/
Unguaranteed

October 31, 2026

35

Development Bank of Japan Inc.（Note5）

1,500,000－－

1,500,000

Sumitomo Mitsui Banking Corporation

2,400,000－－

2,400,000

MUFG Bank, Ltd.

Long-Term Loans Payable

1,600,000－－

1,600,000

Sumitomo Mitsui Trust Bank, Ltd.

550,000－－

550,000

Resona Bank, Ltd.

500,000－－

500,000

Aozora Bank, Ltd.

500,000－－

500,000

Mizuho Bank, Ltd.

350,000－－

350,000

Mizuho Trust & Banking Co., Ltd.

300,000－－

300,000

Sumitomo Mitsui Banking Corporation－

600,000－

600,000

Mizuho Bank, Ltd.

－

500,000－

500,000

Resona Bank, Ltd.

－

400,000－

400,000

MUFG Bank, Ltd.（Note5）－

500,000－

500,000

Aozora Bank, Ltd.

－

500,000－

500,000

Mizuho Trust & Banking Co., Ltd.

－

200,000－

200,000

Sumitomo Mitsui Banking Corporation－

1,000,000－

MUFG Bank, Ltd.（Note5）－

400,000－

Sumitomo Mitsui Banking Corporation－

1,600,000－

1,600,000

Mizuho Bank, Ltd.

－

400,000－

400,000

Sumitomo Mitsui Trust Bank, Ltd.

－

300,000－

300,000

Resona Bank, Ltd.

－

300,000－

300,000

MUFG Bank, Ltd.（Note5）－

600,000－

Development Bank of Japan Inc.（Note5）－

500,000－

The 77 Bank, Ltd.

－

500,000

The Musashino Bank,Ltd.（Note5）－

Sumitomo Mitsui Banking Corporation

0.888

January 31, 2031

0.535 February 28, 2026

0.407

April 30, 2025

0.400

April 30, 2025

0.461

April 30, 2026

1,000,000

0.490

October 31, 2026

400,000

0.475

October 31, 2026

0.548

October 31, 2027

600,000

0.525

October 31, 2027

500,000

0.856

April 30, 2031－

500,000

0.426

April 30, 2026

500,000－

500,000

0.350

April 30, 2026－

800,000－

800,000

Sumitomo Mitsui Trust Bank, Ltd.

－

700,000－

700,000

Mizuho Trust & Banking Co., Ltd.

－

600,000－

600,000

0.601

April 30, 2028

Aozora Bank, Ltd.

－

600,000－

600,000

Mizuho Bank, Ltd.

－

500,000－

500,000

MUFG Bank, Ltd.（Note5）－

500,000－

500,000－

April 30, 2028

500,000－

0.550

SUMITOMO LIFE INSURANCE COMPANY（Note5）

500,000

Development Bank of Japan Inc.（Note5）－

300,000－

300,000

0.824

April 30, 2031

Mizuho Bank, Ltd.

－

500,000－

500,000

0.357

April 30, 2024

MUFG Bank, Ltd.（Note5）－200,000－

200,000

0.525

October 31, 2027

Aozora Bank, Ltd.

－

200,000－

200,000

0.601

April 30, 2028

The Gunma Bank, Ltd.（Note5）－

500,000－

500,000

0.450 September 30, 2026

85,800,000

14,700,000－

100,500,000

104,800,000

14,700,000

7,200,000

112,300,000

Sub Total
Total(Note 4)

Unsecured/
Unguaranteed

Note 1:All debts except for the following Note 5 are borrowings at a floating rate.

Note 2: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 order tohedge the interest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps are indicated.

Note 3:All the repayment methods of debt financing are lump-sum repayments on the due date.

Note 4: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 5:

Borrowings at a fixed rate.

Note 6:

Borrowings are listed in the current portion of long-term loans payable from the fiscal period under review, listed in long-term loans payable in the previous fiscal period.

36

(3) Status of Investment Corporation Bonds
Balance as of
Balance as ofInterest
April 1, 2021 September 30, 2021
rate
(million yen)(million yen)
(%)

Bonds

Issuance date

1st Series Unsecured Investment
Corporation Bonds

October 31,
2016

1,000

1,000

0.200

October 29,
2021

2nd Series Unsecured Investment
Corporation Bonds

October 31,
2016

1,000

1,000

0.600

October 30,
2026

3rd Series Unsecured Investment
Corporation Bonds

August 31,
2017

1,000

1,000

0.320

August 31,
2022

4th Series Unsecured Investment
Corporation Bonds

August 31,
2017

2,000

2,000

0.700

August 31,
2027

5th Series Unsecured Investment
Corporation Bonds

April 26,
2018

2,000

2,000

0.700

April 26,
2028

6th Series Unsecured Investment
Corporation Bonds

April 30,
2020

1,000

1,000

0.400

April 30,
2025

8,000

8,000

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

Maturity date

Redemption
methodUse

Remarks(Note 1)

(Note 3)Full onmaturity(Note 2)

(Note 4)“Use” is acquisition funds for specified assets, repayment funds for borrowings, etc.
“Use” is repayment funds for borrowings.
Ranking pari passu among the specified investment corporation bonds
Ranking pari passu among the specified investment corporation bonds and small private placement with restrictions on splits of denominationof each bond(4) Status of Short-Term Investment Corporation Bonds
Not applicable(5) Status of Subscription Rights to New Investment Units
Not applicable37

Acquisition and Disposition(1) Acquisition and Disposition of Real Estate Properties & Asset-Backed Securities and Infrastructure &Infrastructure Related Assets
Acquisition
Ownership
form

Property
number

Property nameAcquisition date

Disposition

Acquisition price(million yen)
(Note 1)

Disposition
date

Disposition
priceBook value
Gain / loss
(million yen) (million yen) (million yen)
(Note 1)

Trust beneficiaryinterest in real estate

T-32

Unicus Urawamisono(Land)

April 9, 2021

732

－

－

－

－

Trust beneficiaryinterest in real estate

T-31

Kitera Town Chofu

April 21, 2021

10,500－－－－Trust beneficiaryinterest in real estate

O-12

Merado Daikai

April 21, 2021

5,440

－

－

－

－

Trust beneficiaryinterest in real estate

T-25

Apita Terrace
Yokohama Tsunashima(49% quasi coownership interest)

April 30, 2021

5,667

－

－

－

－

Trust beneficiaryinterest in real estate

T-4

Daikanyama Address
Dixsept (30% quasi coownership interest)－－

April 1, 2021

1,993

Trust beneficiaryinterest in real estate

T-5

Unicus Ina (20% quasi
co-ownership interest)－－

April 9, 2021

1,048

(Note 3)167

Trust beneficiaryinterest in real estate

O-7

Hankyu Oasis
Hirakatadeguchi－－

August 2,
2021

1,500

1,284

161

1,607

(Note 2)872

345

Note 1: “Acquisition price” and “Disposition price” represent 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).
Note 2: The amount equivalent to 30% quasi co-ownership interest is shown.
Note 3: The amount equivalent to 20% quasi co-ownership interest is shown.

(2) Acquisition and Disposition of Other Assets
Other assets except real estate properties and asset-backed securities mentioned above mostly consist of cash and deposits
and cash and deposits in trust.
(3) Appraisal Values of Specific Assetsi) Real Estate
Acquisition/disposition

Ownership
form

Property
number

Property nameAcquisition/
Appraisal
disposition
Acquisition/
value
price
disposition date(million yen)(million yen)
(Note 2)

Appraiser

Evaluation date

(Note 1)

Acquisition

Trust beneficiaryinterest in realestate

T-32

UnicusUrawamisono(Land)

April 9, 2021

732

817

Japan Real Estate
InstituteMarch 1, 2021

Trust beneficiaryinterest in realestate

T-31

Kitera Town
Chofu

April 21, 2021

10,50011,400Japan Real Estate
InstituteMarch 1, 2021

Trust beneficiaryinterest in realestate

O-12

Merado Daikai

April 21, 2021

5,440

5,780

Japan Real Estate
InstituteMarch 1, 2021

T-25

Apita Terrace
Yokohama
Tsunashima (49%quasi coownership interest)

April 30, 2021

5,667

5,930

Daiwa Real EstateAppraisal Co., Ltd.

March 1, 2021

Trust beneficiaryinterest in realestate(Note 3)38

Acquisition/disposition

Ownership
form

Property
number

Property nameAcquisition/
Appraisal
disposition
Acquisition/
value
price
disposition date(million yen)(million yen)
(Note 2)

Appraiser

Evaluation date

1,875Japan Real Estate
InstituteMarch 31,
2021

1,048
(Note 5)

Japan Real Estate
InstituteMarch 1, 2021

1,300

Daiwa Real EstateAppraisal Co., Ltd.

March 31,2021

(Note 1)

Disposition

Trust beneficiaryinterest in realestateT-4

Daikanyama
Address Dixsept(30% quasi coownership interest)

April 1, 2021

1,993

Trust beneficiaryinterest in realestateT-5

Unicus Ina (20%quasi co-ownershipinterest)

April 9, 2021

1,048

Trust beneficiaryinterest in realestateO-7

Hankyu Oasis
Hirakatadeguchi

August 2, 2021

1,500

(Note 4)Note 1: “Acquisition price” represents the purchase amount (excluding acquisition costs and consumption taxes) of each property or beneficiary right ofreal estate in trust as stated in the Sales and Purchase Agreement.
Note 2: “Appraisal value” of specific assets above was calculated in accordance with the guideline of “Real Estate Appraisal Standards, Chapter 3, Appraisalof Securitized Real Estate.”
Note 3: The amount equivalent to 49% quasi co-ownership interest is shown.
Note 4: The amount equivalent to 30% quasi co-ownership interest is shown.
Note 5: The amount equivalent to 20% quasi co-ownership interest is shown.

ii) Others(A) Investigator regarding values of certain assets

FRIQ Audit Corporation(B) Result and method of investigation
With regard to transactions and contracts entered by KRR whose values shall be investigated based on the Act on
Investment Trusts and Investment Corporations, FRIQ Audit Corporation performed an investigation of transactions.
For the fiscal period from April 1, 2021 to September 30, 2021, the transactions subject to such investigation were
23 interest rate swap transaction, for which KRR received reports from FRIQ Audit Corporation. For this purpose,
investigation was performed with respect to details of the interest swap contracts, such as the name of counter parties,
contract amounts, or the period of transactions. This survey is not a part of the audit for finalcial statements, andthere is no guarantee of fairness of the price and internal management system.
(4) Related-Party Transactionsi) Transactions
Transaction price (in million yen)
Acquisitions
Total amount

Dispositions

22,3404,541

Transaction with related-party
GK RF3

5,667(25.4%)-(-%)

GK KRF89

10,500(47.0%)

-

(-%)

Total

16,167(72.4%)-(-%)ii) Amounts of Fees Paid
Not applicable.
Note: A related party, etc. is defined as a related party, etc. of the asset manager having an asset management agreement with KRR as prescribedin Article 123 of the Order for Enforcement of the Act on Investment Trusts and Investment Corporations of Japan and in Article 26-27 of
the Regulations for Asset Investment Reports by Investment Trusts and Investment Corporations of the Investment Trusts Association,
Japan.

(5) Transactions with Asset Manager in Connection with Concurrent Business Conducted by the Asset Manager
There is no transaction with the Asset Manager, KFM, regarding to the Type II Financial Instruments Business, andBuilding Lots and Buildings Transaction Business. Furthermore, KFM does not concurrently engage in any of Type I
Financial Instruments Business, Real Estate Specified Joint Business.

39Accounting(1) Status on Assets, Liabilities, Principals, and Income and Losses
Please refer to the “Balance Sheets”, “Statements of Income and Retained Earnings”, “Statements of Changes in Net
Assets” and “Notes to Financial Statements” presented later in this report.
(2) Change in Calculation of Depreciation
Not applicable(3) Change in Valuation of Real Estate Properties and Infrastructure Assets
Not applicable(4) Disclosure of Beneficiary Certificates of Investment Trust Established by Selfi) Acquisition of Beneficiary Certificates of Investment Trust Established by Self
Not applicableii) Ownership of Beneficiary Certificates of Investment Trust Established by Self
Not applicable(5) Disclosure of Companies Owning Real Estate Overseas
Not applicable(6) Disclosure of Real Estate Owned by Companies Owning Real Estate Overseas
Not applicable

Others(1) Noticei) General Meeting of Unitholders
Not applicableii) Board of Directors
Date

Approved items

Summary

April 14, 2021

Conclusion of an underwriting
agreement for new investment
units

September 22, 2021

Entrustment of business affairs
regarding issuance ofinvestment corporation bonds

For the issuance of new investment units, which was approved by the Board of
Directors on April 7, 2021, KFM, SMBC Nikko Securities Inc., Nomura Securities
Co., Ltd., Daiwa Securities Co., Ltd. and Mizuho Securities Co., Ltd. signed anunderwriting agreement.
In regard to the comprehensive resolution on the issuance of investment
corporation bonds approved on the same day, we approved candidate companies
for the entrustment of business affairs regarding investment corporation bonds anddiscretionary decision-making rights on other required matters to the Executive
Director.

(2) Others
In this report, any fraction is rounded down for monetary amounts and rounded off for ratios unless otherwise stated.

40

41

42

43

Financial Statements(13th Fiscal Period: from April 1, 2021 to September 30, 2021)
Independent Auditor’s Report
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements

44

Kenedix Retail REIT Corporation

Balance Sheet
As of September 30, 2021
As of September 30, 2021

As of March 31, 2021

(in thousands of yen)
AssetsCurrent assets
Cash and deposits (Notes 10 and 12)¥10,026,355¥9,187,157

Cash and deposits in trust (Notes 10 and 12)

14,309,262

13,251,126

Operating accounts receivable

181,400

146,876

Prepaid expenses

153,774

29,604

Consumption taxes receivable

343,985

-

6,645

2,235

25,021,425

22,617,000

Other
Total current assets
Non-current assets
Property, plant and equipment (Notes 18 and 21)

755,598

746,570

Accumulated depreciation(77,533)(61,444)

Buildings, net

678,064

685,125

Buildings

Structures
Accumulated depreciation
Structures, net
Land46,777

46,777(5,425)(4,023)41,35142,753

2,956,465

2,956,465

67,921,666

62,521,244

Accumulated depreciation(9,332,397)(8,450,403)

Buildings in trust, net (Note 4)

58,589,268

54,070,840

3,491,894

3,491,216

Buildings in trust

Structures in trust
Accumulated depreciation(644,494)(600,741)

Structures in trust, net (Note 4)

2,847,400

2,890,475

Machinery and equipment in trust

248,014

261,479

Accumulated depreciation(58,898)(53,675)

Machinery and equipment in trust, net

189,115

207,804

Tools, furniture and fixtures in trust
Accumulated depreciation(63,530)

103,751

103,267
162,816,625

7,254

6,177

242,167,446

223,779,535

4,296,869

4,300,847

Construction in progress in trust
Total property, plant and equipment, net

166,797(75,697)
176,754,774

Tools, furniture and fixtures in trust, net
Land in trust (Note 4)

179,449

Intangible assets (Note 21)
Leasehold right in trust (Note 18)
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits

6,938

8,223

4,303,807

4,309,070

10,00010,000

Lease and guarantee deposits in trust

60,23660,236Long-term prepaid expenses

870,267

824,049

Long-term deposits

102,079

108,478

3,602

7,668

1,046,184

1,010,431

247,517,438

229,099,037

29,851

34,191

53,832

23,179

Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs

83,68357,371¥272,622,547¥251,773,409

Total deferred assets
Total assets

See accompanying notes to financial statements.

45

As of September 30, 2021

As of March 31, 2021

(in thousands of yen)
Liabilities
Current liabilities
Operating accounts payable¥815,139¥759,610

Current portion of investment corporation bonds (Notes 12 and 23)

2,000,000

1,000,000

Current portion of long-term loans payable (Notes 12 and 22)

11,800,000

16,950,000

Accounts payable-other631,767

544,740

Accrued expenses

58,26844,153

Income taxes payable

1,177

873

Accrued consumption taxes

53,67477,715

Advances received

1,420,317

1,320,786

Deposits received

22,202

16,610563

150,000

16,803,109

20,864,489

Other
Total current liabilities
Non-current liabilities
Investment corporation bonds (Notes 12 and 23)
Long-term loans payable (Notes 12 and 22)

6,000,000

7,000,000

100,500,000

87,850,000

148,083

148,083

11,789,113

10,900,443

24,68824,534

Tenant leasehold and security deposits (Note 12)
Tenant leasehold and security deposits in trust (Notes 4 and 12)
Asset retirement obligations (Note 16)

304,728

283,966

118,766,613

106,207,028

135,569,722

127,071,517

133,103,750

121,183,494

Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Allowance for temporary difference adjustments (Note 6)(285,940)(384,773)

Total deduction from unitholders' capital(285,940)(384,773)

132,817,810

120,798,721

Unappropriated retained earnings

4,511,908

4,153,672

Total surplus

4,511,908

4,153,672

137,329,718

124,952,393(276,894)(250,501)

Unitholders' capital, net
Surplus

Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Notes 12 and 13)(276,894)(250,501)

Total net assets (Note 7)

Total valuation and translation adjustments

137,052,824

124,701,892

Total liabilities and net assets¥272,622,547¥251,773,409

See accompanying notes to financial statements.

46

Kenedix Retail REIT Corporation

Statement of Income and Retained Earnings
For the period from April 1, 2021 to September 30, 2021
From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

(in thousands of yen)
Operating revenues
Rent revenue-real estate （Note 8)¥7,829,366¥7,336,375

Other lease business revenue (Note 8)

1,072,230

927,293

674,513454,2449,576,109

8,717,914

3,662,177

3,377,837

Asset management fees

873,967

808,051

Asset custody fees

10,182

10,178Administrative service fees

33,93632,903

Directors' compensation

4,500

4,500

Gain on sales of real estate property (Note 8)
Total operating revenues
Operating expenses
Expenses related to rent business (Note 8)

Other operating expenses

109,945

105,424

Total operating expenses

4,694,708

4,338,895

4,881,401

4,379,018

Operating income
Non-operating income
Interest income

58

58

Gain on forfeiture of unclaimed dividends

343

425

-

29

402

513

Interest expenses

470,736449,947

Interest expenses on investment corporation bonds

21,54021,659Financing-related expenses

107,352

96,325

4,340

4,340

Other
Total non-operating income
Non-operating expenses

Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs

15,402

7,726

Total non-operating expenses

619,373

579,999

Ordinary income

4,262,430

3,799,531

Income before income taxes

4,262,430

3,799,531

1,186

882

1,186

882

Income taxes
Current
Total income taxes

4,261,244

3,798,649

Retained earnings brought forward

250,664

355,023

Unappropriated retained earnings¥4,511,908¥4,153,672

Net income

See accompanying notes to financial statements.

47

Kenedix Retail REIT Corporation

Statement of Changes in Net Assets
For the period from April 1, 2021 to September 30, 2021
Unitholders' equity
Unitholders' capital

Surplus

Deduction from unitholders'
capitalAllowance
for
temporarydifference
adjustments

Unitholders'
capitalTotal
deduction
fromunitholders'
capitalUnitholders'
capital, net

Unappropri
ated
retainedearnings

Total
surplusTotal
unitholders'equity¥3,716,853¥3,716,853¥124,663,559(3,361,829)(3,361,829)(3,361,829)(in thousands of yen)
Balance as of September 30, 2020 (Note 9)¥121,183,494¥ (236,788)¥(236,788)¥120,946,706

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings
from allowance for temporary
difference adjustments(147,984)(147,984)(147,984)

Net income(147,984)
3,798,649

3,798,649

3,798,649

Net changes of items other thanunitholders’ equity
Total changes of items during the period-(147,984)(147,984)(147,984)

436,819436,819

288,834

Balance as of March 31, 2021 (Note 9)¥121,183,494¥ (384,773)¥(384,773)¥120,798,721¥4,153,672¥4,153,672¥124,952,393

Changes of items during the period
Issuance of new investment units¥11,920,256

11,920,256

11,920,256

Dividends from surplus(3,798,814)

Distributions in excess of earnings
from allowance for temporary
difference adjustments
Reversal of allowance for temporary
difference adjustments(5,361)(5,361)(5,361)

104,194

104,194

104,194

Net income(3,798,814)(3,798,814)(5,361)(104,194)(104,194)-4,261,244

4,261,244

4,261,244

Net changes of items other thanunitholders’ equity
Total changes of items during the period

11,920,256

98,832

98,832

12,019,088

358,235

358,235

12,377,324

Balance as of September 30, 2021 (Note 9)¥133,103,750¥ (285,940)¥(285,940)¥132,817,810¥4,511,908¥4,511,908¥137,329,718

48

Valuation and translation adjustments
Deferred gains orlosses on hedges
Balance as of September 30, 2020 (Note 9)¥(354,696)¥(354,696)

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings fromallowance for temporary difference
adjustments
Net income
Net changes of items other thanunitholders’ equity

Total net assets

Total valuation andtranslation adjustments(in thousands of yen)
¥124,308,863(3,361,829)(147,984)
3,798,649

Total changes of items during the period

104,194
104,194

104,194
104,194

104,194
393,028

Balance as of March 31, 2021 (Note 9)¥(250,501)¥(250,501)¥124,701,892

Changes of items during the period
Issuance of new investment units

11,920,256

Dividends from surplus
Distributions in excess of earnings fromallowance for temporary difference
adjustments
Reversal of allowance for temporary
difference adjustments(3,798,814)

Net income
Net changes of items other thanunitholders’ equity

4,261,244(26,392)(26,392)(26,392)

Total changes of items during the period(26,392)(26,392)

12,350,932

Balance as of September 30, 2021 (Note 9)¥(276,894)¥(276,894)¥137,052,824(5,361)-

See accompanying notes to financial statements.

49

Kenedix Retail REIT Corporation

Statement of Cash Flows
For the period from April 1, 2021 to September 30, 2021
From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes¥4,262,430¥3,799,531

Depreciation and amortization

1,167,650

1,069,574

Amortization of investment corporation bond issuance costs

4,340

4,340

Amortization of investment unit issuance costs

15,402

7,726Interest income

(58)

(58)

Interest expenses

492,277

471,606

Decrease (increase) in operating accounts receivable(34,523)

45,247

Decrease (increase) in consumption taxes receivable(343,985)-

Decrease (increase) in prepaid expenses(124,170)

133,675

Increase (decrease) in operating accounts payable

60,97816,504

Increase (decrease) in accounts payable-other

85,723(11,382)

Increase (decrease) in accrued consumption taxes(24,041)(285,444)

Increase (decrease) in advances received

99,53045,103

Increase (decrease) in deposits received

5,591(9,430)(46,218)(80,467)

Decrease (increase) in long-term prepaid expenses
Decrease (increase) in long-term deposits
Decrease in net property, plant and equipment held in trust due to sale

6,399

8,532

3,765,046

2,146,120

Other(155,716)

148,564

Subtotal

9,236,657

7,509,745

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

58

58(478,202)(461,205)(882)(1,112)

8,757,631

7,047,485(8,026)(6,484)

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment(23,312,613)(3,187,223)

Repayments of tenant leasehold and security deposits in trust(262,886)(236,364)

Proceeds from tenant leasehold and security deposits in trust

1,151,556

303,544

15,00015,000(22,416,969)(3,111,527)-(2,750,000)

Purchase of property, plant and equipment in trust

Proceeds from restricted bank deposits in trust
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Repayments of short-term loans payable
Proceeds from long-term loans payable

14,700,000

15,950,000

Repayments of long-term loans payable(7,200,000)(13,200,000)

Proceeds from issuance of investment units

11,874,201-

Dividends paid

(3,802,528)(3,510,170)(3,510,170)

Net cash provided by (used in) financing activities

15,571,672

Net increase (decrease) in cash and cash equivalents

1,912,335

425,787

Cash and cash equivalents at the beginning of the period

22,230,783

21,804,996

Cash and cash equivalents at the end of the period (Note 10)¥24,143,118¥22,230,783

See accompanying notes to financial statements.

50

Kenedix Retail REIT Corporation

Notes to Financial Statements
For the period from April 1, 2021 to September 30, 2021

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Retail REIT Corporation (“KRR”) was established on October 3, 2014, under the Act on Investment Trusts and Investment Corporations of Japan(the “Investment Trust Act”). On February 10, 2015, KRR was listed on the Real Estate Investment Trust Securities (J-REIT) Market of Tokyo Stock Exchange,
Inc. (the Tokyo Stock Exchange) (Securities code: 3453). Subsequently, KRR raised funds through public offerings, including international offerings. As aresult, the number of investment units issued as of September 30, 2021 was 582,177 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 havestable demand from retailers and customers, and also seeks to invest in distribution centers, which supplement shopping centers in providing goods toconsumers, in order to provide stable investment returns over the long term. Sponsored by Kenedix, Inc., KRR entrusts its asset management and investment
operations to Kenedix Real Estate Fund Management, Inc. (“KFM”), with the following strategies.
(Note) For management purposes and ease of classification, KRR defines neighborhood, community and other shopping centers for daily needs asretail properties that generally have the following characteristics:
a. Retail trade area of an approximate radius of one to ten kilometers (and generally, a radius of three to five kilometers), with customers
predominantly from local 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 services
KRR acquired three assets (Chiba-Kita Distribution Center with acquisition price of 1,250 million yen, Sapporo Shiroishi Distribution Center withacquisition price of 800 million yen and Monenosato Mall (two new buildings) with acquisition price of 343 million yen). KRR disposed of one asset(Daikanyama Address Dixsept (40% trust beneficiary quasi co-ownership interests) with sale price of 2,657 million yen (acquisition price was 2,156 millionyen)). KRR also completed additional acquisition through construction of a new building (property expansion) (total construction cost 9 million yen) at
Yokohama Kamigo Distribution Center. For the period ended March 31, 2021, the portfolio of 64 properties (total acquisition price of 226,725 million yen) as
a whole performed well with an overall occupancy ratio of 99.8% as of March 31, 2021.
KRR acquired four assets (Unicus Urawamisono (Land) with acquisition price of 732 million yen, Kitera Town Chofu with acquisition price of 10,500million
yen, Merado Daikai with acquisition price of 5,440million yen and Apita Terrace Yokohama Tsunashima (49% trust beneficiary quasi co-ownership interests)
with acquisition price of 5,667million yen). KRR disposed of three assets (Daikanyama Address Dixsept (30% trust beneficiary quasi co-ownership interests)
with sale price of 1,993 million yen (acquisition price was 1,617 million yen), Unicus Ina (20% trust beneficiary quasi co-ownership interests) with sale priceof 1,048 million yen (acquisition price was 894 million yen) and Hankyu Oasis Hirakatadeguchi with sale price of 1,500 million yen (acquisition price was
1,280 million yen)). For the period ended September 30, 2021, the portfolio of 66 properties (total acquisition price of 245,274 million yen) as a whole
performed well with an overall occupancy ratio of 99.6% as of September 30, 2021.
Furthermore, the portfolio was diversified in terms of tenants as there were 502 and 528 end-tenants as of March 31, 2021 and September 30, 2021 in
KRR’s properties, respectively.
Basis of Presentation
KRR maintains its accounting records and prepares its financial statements in accordance with accounting principles generally accepted in Japan (JapaneseGAAP), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, the Financial Instruments and Exchange Act of Japan andrelated regulations, which are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are basically a translation of the financial statements of KRR, which were prepared in accordance with Japanese
GAAP and were presented in the Semiannual Securities Report of KRR filed with the Kanto Local Finance Bureau. In preparing the accompanying financial
statements, certain reclassifications and modifications have been made to the financial statements issued domestically in order to present them in a format
that is more familiar to readers outside Japan. In addition, the notes to financial statements include certain information that might not be required underJapanese GAAP but is presented herein as additional information.
KRR’s fiscal period is a six-month period which ends at the end of March or September. KRR does not prepare consolidated financial statements because
it has no subsidiaries.

51

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) Property, Plant and Equipment (including trust assets)
Property, plant and equipment are stated at cost. Depreciation of property and equipment is calculated on a straight-line method over the estimateduseful lives of the assets ranging as stated below:

Buildings

From April 1, 2021
to September 30, 2021
2-70 years

From October 1, 2020
to March 31, 2021
2-70 years

Structures

8-59 years

8-59 years

Machinery and equipment

2-25 years

2-25 years

Tools, furniture and fixtures

3-15 years

3-15 years(B) Intangible Assets (including trust assets)
Intangible assets are amortized by the straight-line method.
(C) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(D) Investment Unit Issuance Costs
Investment unit issuance costs are amortized over a period of 3 years under the straight-line method.
(E) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(F) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all relevant assets andliabilities in trust are recorded on the balance sheets and the statements of income and retained earnings.
(G) Revenue Recognition
Operating revenues consist of rental revenues including base rents, common area charges and other operating revenues, which include utility charge
reimbursements, parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrual basis overthe life of each lease. Utility charge reimbursements are recognized when earned and their amounts can be reasonably estimated. Reimbursementsfrom tenants including utility charge reimbursements are recorded on a gross basis and such amounts are recorded both as revenues and expenses
during the fiscal period.
(H) Taxes on Property and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar year basis.
These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to said period. Under Japanese tax
regulations, the seller of the property is liable for these taxes on the property from the date of disposal to the end of the calendar year in which theproperty is disposed. The seller, however, is generally reimbursed by the purchaser 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 the purchase 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 theacquisition costs of the related properties. Capitalized property-related taxes amounted to ¥198 thousand and ¥106,958 thousand as of March 31, 2021
and September 30, 2021, respectively.
(I)

Accounting for revenues
The details of main performance obligations concerning revenue generated from contracts between KRR and its customers and the general timing of
the fulfillment of said performance obligations general timing of revenue recognition are as follows.
1. Sale of real estate property
Revenue from sale of real estate properties is recorded as revenue when a buyer who is a customer obtains control over a real estate property following
the seller’s fulfilment of its obligation to hand over the property which is stipulated in the contract associated with the sale of real estate property.
2. Utility charge reimbursements
Revenue from utility charge reimbursements is recorded revenue according to the supply of electric power, water, etc. to lessees who are customers

52based on lease agreements and other terms related to the real estate properties.
With regard to utility charge reimbursements which KRR deems to fall under that for an agent, the net amount sought by subtracting the amount paid toanother party from the amount that is received as charge for electric power, gas, etc. which is supplied by another concerned party is recognized asrevenue.
(J) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets and liabilities
using the statutory tax rates.
(K) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes applicable tothe acquisition of assets are included in the cost of acquisition for each asset.
(L) Derivative Financial Instruments
KRR utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure to changes in interest rates.
KRR deferred recognition of gains or losses resulting from changes in fair value of interest-rate swap contracts because these contracts met the criteria
for deferral hedge accounting. However, KRR adopted the special treatment for interest-swap contracts if they met the criteria for hedge accounting
under this treatment. An assessment of the effectiveness of hedging is omitted for interest rate swaps because they fulfill the requirements for the special
treatment.
(M) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily convertible
to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.
(N) Presentation of Amounts
Amounts have been truncated in the Japanese financial statements prepared in accordance with Japanese GAAP and filed with regulatory authorities
in Japan. Unless otherwise noted, amounts are rounded down and ratios are rounded off in the accompanying financial statements. Totals shown in theaccompanying financial statements do not necessarily agree with the sums of the individual amounts.

3. CHANGES IN ACCOUNTING POLICIES(A) Application of Accounting Standard for Revenue Recognition
The Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (“ASBJ”) Statement No. 29, March 31, 2020), etc. have been
applied since the beginning of the fiscal period under review. In accordance with this accounting standard, KRR recognizes revenue as the amount
expected to be received in exchange for the promised goods or services when the control of the goods or services is transferred to the customer.
The impact of these changes on the financial statements for the fiscal period under review is minor.
Furthermore, in accordance with the transitional treatment stipulated in Paragraph 89-3 of the Accounting Standard for Revenue Recognition, related
information on revenue recognition for the previous fiscal period is not disclosed.
(B) Application of Accounting Standard for Fair Value Measurement, Etc.
The “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019), etc., have been applied since the beginning of the
fiscal period under review. In accordance with the transitional treatment prescribed in Paragraph 19 of the Accounting Standard for Fair Value
Measurement and Paragraph 44–2 of the Accounting Standard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019), KRR has decided toapply the new accounting policies set forth by the Accounting Standard for Fair Value Measurement, etc. in the future. The impact of these changes on
the financial statements for the fiscal period under review is minor.

53

4. COLLATERAL
Assets pledged as collateral and related secured liabilities are as follows:
As of September 30, 2021

Assets pledged as collateral

As of March 31, 2021
(in thousands of yen)

Buildings in trust¥640,897¥650,807

Structures in trust

20,37921,582Land in trust
Total
Secured liabilities

2,709,001

2,709,001¥3,370,278¥3,381,391

As of September 30, 2021

Tenant leasehold and security deposits in trust
Total

As of March 31, 2021

¥392,072¥414,070¥392,072¥414,070

5. COMMITMENT LINE CONTRACTSKRR has commitment line contracts with the following financial institutions.
As of September 30, 2021

As of March 31, 2021
(in thousands of yen)

Total amount of commitment line contracts¥3,000,000¥3,000,000

Balance of loans payable outstanding--

Remaining amount¥3,000,000¥3,000,000

6. ALLOWANCE FOR TEMPORARY DIFFERENCE ADJUSTMENTS
The following summarizes allowance for temporary difference adjustments as of September 30, 2021
1. Reasons, related assets, initial amount, allowance and reversal
Related assets, etc.

Reason for allowance

Initial amount

Buildings in trust,
Leasehold right in trust

Amortization ofleasehold right in trust
and the amount inexcess of depreciation¥35,477

Deferred gains or losses
on hedges

Loss on interest-rate
swaps recognized at theend of the fiscal period

Total

Balance atAllowance
Reversal
the beginningduring theduring theof the period
periodperiod(in thousands of yen)
¥30,115¥5,361¥

Balance atthe end of
the period-

Reason forreversal¥35,477-354,657

354,657-(104,194)

250,463

Changes infair value ofderivativetransactions¥390,135¥384,773¥5,361¥(104,194)¥285,940-

2. Method of reversal
Method of reversal
Buildings in trust,
Leasehold right in trust

Upon sale, the corresponding amount is scheduled to be reversed.

Deferred gains or losses on hedges

Based on changes in the fair value of the hedging instruments, the corresponding amount is scheduled to bereversed.

The following summarizes allowance for temporary difference adjustments as of March 31, 2021
1. Reasons, related assets, initial amount, allowance and reversal
Related assets, etc.

Reason for allowance

Buildings in trust,
Leasehold right in trust
Deferred gains or losses
on hedges

Amortization ofleasehold right in trust
and the amount inexcess of depreciation
Loss on interest-rate
swaps recognized at theend of the fiscal period

Total

Initial amount

Balance atAllowance
Reversal
the beginningduring theduring theof the period
periodperiod(in thousands of yen)

¥30,115¥24,937¥5,178354,657

211,851

142,806¥384,773¥236,788¥147,984¥¥

Balance atthe end of
the period

Reason forreversal-¥30,115--354,657--¥384,773-

54

2. Method of reversal
Method of reversal
Buildings in trust,
Leasehold right in trust

Upon sale, the corresponding amount is scheduled to be reversed.

Deferred gains or losses on hedges

Based on changes in the fair value of the hedging instruments, the corresponding amount is scheduled to bereversed.

7. NET ASSETSKRR issues only non-par value units in accordance with the Investment Trust Act. The entire amount of the issue price of new units is designated as statedcapital. KRR is required to maintain net assets of at least ¥50 million as required by the Investment Trust Act.

8. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY
Rental and other operating revenues and property-related expenses for the periods from April 1, 2021 to September 30, 2021 and October 1, 2020 to March
31, 2021 from consist of the following:
From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

(in thousands of yen)
Rental and other operating revenues:
Rent revenue-real estate:
Rental revenues¥6,572,739¥6,092,542

Rental revenues from limited proprietary rights of land

1,008,625

990,413

Common area charges

248,000

253,420

7,829,366

7,336,375

Parking space rental revenues

197,192

192,921

Utility charge reimbursement625,364

476,555

Miscellaneous

249,673

257,816

Subtotal

1,072,230

927,2938,901,596

8,263,669

Property management fees and facility management fees

693,617679,143

Utilities

543,389

408,770Taxes

729,881735,593

Repairs and maintenance

247,928

185,140

Insurance

14,642

14,279Subtotal
Other lease business revenue:

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

Trust fees

26,48225,811

Depreciation

1,166,365

1,068,289

Others239,869

260,808

Total property-related expenses

3,662,177

3,377,837

Net operating income from real estate rental business¥5,239,419¥4,885,831

Gain on sales of real estate property:
From April 1, 2021 to September 30, 2021
(in thousands of yen)
Daikanyama Address Dixsept (30.0% quasi coownership interest)
Revenue from sales of real estate property¥1,993,200

Cost of real estate property

1,607,332

Other sales expenses
Gain on sales of real estate property

40,216¥345,651

55

Unicus Ina (20.0% quasi co-ownership interest)
Revenue from sales of real estate property
Cost of real estate property
Other sales expenses
Gain on sales of real estate property¥1,048,000
872,862
7,443¥167,694

Hankyu Oasis Hirakatadeguchi
Revenue from sales of real estate property¥1,500,000

Cost of real estate property

1,284,851

Other sales expenses
Gain on sales of real estate property

53,981¥161,167

From October 1, 2020 to March 31, 2021
(in thousands of yen)
Daikanyama Address Dixsept (40.0% quasi coownership interest)
Revenue from sales of real estate property¥2,657,600

Cost of real estate property

2,146,120

Other sales expenses
Gain on sales of real estate property

57,234¥454,244

9. UNITHOLDERS’ EQUITY
Total number of authorized investment units and total number of investment units issued and outstanding are as follows:
From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

Total number of authorized investment units

5,000,000 units

5,000,000 units

Total number of investment units issued and outstanding

582,177 units

536,177 units

10. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of September 30, 2021 and March 31, 2021:
As of September 30, 2021

As of March 31, 2021

(in thousands of yen)
Cash and deposits¥10,026,355¥9,187,157

Cash and deposits in trust

14,309,262

13,251,126

Restricted bank deposits in trust *(192,500)(207,500)¥24,143,118¥22,230,783

Cash and cash equivalents*Restricted bank deposits in trust are retained for repayment of tenant leasehold and security deposits in trust.

11. LEASES(As lessee)
Future minimum lease payments under non-cancelable operating leases as of September 30, 2021 and March 31, 2021 are as follows:
As of September 30, 2021

As of March 31, 2021

(in thousands of yen)
Due within 1 year

¥10,500¥10,500

Due after 1 year

151,798

157,048

Total¥162,298¥167,54856

(As lessor)
Future minimum lease income under the non-cancelable operating leases as of September 30, 2021 and March 31, 2021 are as follows:
As of September 30, 2021

As of March 31, 2021

(in thousands of yen)
Due within 1 year

¥10,388,223¥9,922,641

Due after 1 year

59,556,245

59,207,166

Total¥69,944,468¥69,129,807

12. FINANCIAL INSTRUMENTS(A). 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 ofinvestment corporation bonds, issuance of investment units and other means. 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 in interest rates and other risks anddoes 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.
Loans payable and investment corporation bonds, which are made or issued primarily for the purpose of procuring funds for the acquisition of real estate andtrust beneficiary interests in real estate and have a repayment date of a maximum of 9 years and 7 months for loans payable and also have a redemption dateof a maximum of 6 years and 7 months for investment corporation bonds as of September 30, 2021, the end of the 13th fiscal period, are exposed to liquidity
risk where alternative funds may not be procured by the repayment date. Also, loans payable 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 loans payable.
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 instruments
a. 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 transacting with financial institutions with favorable ratings.
b. Market risk
While loans payable with floating rates are exposed to interest rate fluctuation risk, such risk is monitored by adjusting the rate of the balance of loans payable
with floating rates against the total loans payable according to the financial environment, interest rate forecasts by continuous monitoring, etc. and by using
derivatives, etc. A risk management policy is established with regard to the execution and management of derivatives and such transactions are conductedbased on this policy.
c. Liquidity risk
Though loans payable 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 toreturn necessary amounts to tenants.
(4) Supplementary explanation of the estimated fair value of financial instruments
Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors could result in a different fair value.
(B). Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheets and estimated fair value are shown in the following table. Furthermore, “cash and deposits”
and “short-term loans payable” are omitted as they are settled with cash and in a short span of time and are therefore similar in fair value to the carrying value.
Also, “tenant leasehold and security deposits in trust” is omitted as it is immaterial.

57

As of September 30, 2021
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1) Current portion of investment corporation bonds

2,000,000

1,998,700(1,300)(2) Current portion of long-term loans payable

11,800,000

11,798,045(1,954)(3) Investment corporation bonds

6,000,000

5,991,000(9,000)100,500,000

100,837,304

337,304

120,300,000

120,625,049

325,049¥(276,894)¥(276,894)(4) Long-term loans payable
Total
Derivative transactions¥-(Note) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing the net liability
position.
As of March 31, 2021
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1) Current portion of investment corporation bonds

1,000,000

998,600(2) Current portion of long-term loans payable

16,950,000

16,974,527

24,527(3) Investment corporation bonds

7,000,000

6,969,900(30,100)(4) Long-term loans payable
Total(1,400)87,850,000

88,207,532

357,532

112,800,000

113,150,560

350,560¥(250,501)¥(250,501)

Derivative transactions¥-(Note) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing the net liability
position.
*1: Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions
Liabilities(1) Current portion of investment corporation bonds and (3) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices.
(2) Current portion of long-term loans payable and (4) 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 andinterest discounted by the 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 not changed significantly since the loans were made. (However, the fair value of longterm 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 fortogether with the applicable interest-rate swaps, discounted by the estimated interest rate to be applied in the event that KRR conducts new loans payable ofthe same type.)
Derivative transactions
Please refer to Note “13. DERIVATIVE TRANSACTIONS”.

58

*2: Redemption of long-term loans payable and other interest-bearing debt scheduled to be due after the balance sheet date
As of September 30, 2021
Due in 1 year orDue after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

lessthrough 2 years

through 3 years

through 4 years

through 5 years

Due after 5 years(in thousands of yen)
Investment corporation bonds
Long-term loans payable
Total

2,000,000--

1,000,000--

11,800,000

7,500,000

9,490,000

15,320,000

19,850,000

48,340,000¥13,800,000¥7,500,000¥9,490,000¥16,320,000¥19,850,000¥53,340,000

Due in 1 year orDue after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

lessthrough 2 years

through 3 years

through 4 years

through 5 years

As of March 31, 2021
Due after 5 years(in thousands of yen)
Investment corporation bonds

1,000,000

1,000,000--

1,000,000

5,000,000

Long-term loans payable

16,950,000

9,050,000

7,500,000

8,810,000

16,090,000

46,400,000¥17,950,000¥10,050,000¥7,500,000¥8,810,000¥17,090,000¥51,400,000

Total

13. DERIVATIVE TRANSACTIONS
The contract amount and the fair value of interest-rate swap transactions as of September 30, 2021 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable(2) Transactions subject to hedge accounting
Hedge
accounting
methodType of derivativetransactions

Principle method Interest rate swap
transaction:
Receive/floating andpay/fixed
SpecialInterest rate swap
treatment oftransaction:interest-rate
Receive/floating andswaps
pay/fixed
Total

Hedged items
Long-term loans
payableLong-term loans
payableContract amount(in thousands of yen)
Maturing after 1
year¥60,210,000¥58,160,000

26,400,000

21,000,000¥86,610,000¥79,160,000

Fair value(in thousands of yen)¥(276,894)*

Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions-¥(276,894)*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 isincluded in the fair value of the hedged long-term loans payable.（Please refer to Note “12. FINANCIAL INSTRUMENTS” (*1) Methods to determine theestimated fair value of financial instruments and matters related to derivative transactions; Liabilities (2) Current portion of long-term loans payable and (4)Long-term loans payable.）
The contract amount and the fair value of interest-rate swap transactions as of March 31, 2021 are shown in the following table.
(1) Transactions not subject to hedge accounting
Not applicable(2) Transactions subject to hedge accounting
Hedge
accounting
methodType of derivativetransactions

Principle method Interest rate swap
transaction:
Receive/floating andpay/fixed
SpecialInterest rate swap
treatment oftransaction:interest-rate
Receive/floating andswaps
pay/fixed
Total

Hedged items
Long-term loans
payableLong-term loans
payableContract amount(in thousands of yen)
Maturing after 1
year¥51,110,000¥47,010,000

26,400,000

21,000,000¥77,510,000¥68,010,000

Fair value(in thousands of yen)¥(250,501)*

Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions-¥(250,501)

59

*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 isincluded in the fair value of the hedged long-term loans payable. (Please refer to Note “12. FINANCIAL INSTRUMENTS” (*1) Methods to determine theestimated fair value of financial instruments and matters related to derivative transactions; Liabilities (2) Current portion of long-term loans payable and (4)Long-term loans payable.）

14. RELATED PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other13th Fiscal Period (April 1, 2021 to September 30, 2021) and 12th Fiscal Period (October 1, 2020 to March 31, 2021): Not applicable
2．Affiliated companies and other13th Fiscal Period (April 1, 2021 to September 30, 2021) and 12th Fiscal Period (October 1, 2020 to March 31, 2021): Not applicable
3．Fellow subsidiary companies and other13th Fiscal Period (April 1, 2021 to September 30, 2021) and 12th Fiscal Period (October 1, 2020 to March 31, 2021): Not applicable
4．Directors, major individual unitholders and other13th Fiscal Period (April 1, 2021 to September 30, 2021) and 12th Fiscal Period (October 1, 2020 to March 31, 2021): Not applicable

15. INCOME TAXESKRR is subject to corporate income taxes at a regular statutory rate of approximately 31%. However, KRR may deduct from its taxable income amounts
distributed to its unitholders, provided the requirements under the Special Taxation Measures Law of Japan are met, including a requirement that it currently
distributes in excess of 90% of its net income for the fiscal period in order to be able to deduct such amounts. If KRR does not satisfy all of the requirements,
the entire taxable income of KRR will be subject to regular corporate income taxes. Since KRR distributed in excess of 90% of its distributable income in theform of cash distributions totaling ¥4,266 million and ¥3,804 million for the periods ended September 30, 2021 and March 31, 2021, respectively, thedistributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on KRR’s income were 0.02% for theperiods ended September 30, 2021 and March 31, 2021, respectively. The following table summarizes the significant differences between the statutory tax
rate and the effective tax rate:
As of September 30, 2021

As of March 31, 2021

Statutory tax rate

31.46%

31.46%

Deductible cash distributions(31.49)(31.50)

Others0.05

0.06

Effective tax rate

0.02%

0.02%

The significant components of deferred tax assets and liabilities:
As of September 30, 2021

As of March 31, 2021

(in thousands of yen)
Deferred tax assets:
Enterprise tax payable¥

Amortization of leasehold right in trust

16,68815,437

Depreciation

6,007

5,556

Asset retirement obligations

7,767

7,718

Deferred gains or losses on hedges

87,11078,807

27¥

13

Subtotal deferred tax assets

117,601

107,533

Valuation allowance(117,601)(107,533)

Total deferred tax assets

¥

-

¥

-

60

16. ASSET RETIREMENT OBLIGATIONS
Asset retirement obligations reported on balance sheets
1. Summary of the asset retirement obligations
KRR has recognized the original state restoration obligations assumed under the fixed-term business-purpose land leasehold agreement as the asset
retirement obligations in connection with 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 2 months basedon the time period from the date of acquisition to the expiration of the agreement.
3. Changes in the amount of applicable asset retirement obligations consisted of the following:
From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

(in thousands of yen)
Balance at the beginning of the period
Accretion adjustment
Balance at the end of the period¥24,534¥24,381

154

153¥24,688¥24,534

17. REVENUE RECOGNITION
1. Disaggregation of revenue from contracts with customers
13th Fiscal Period (From April 1, 2021 to September 30, 2021)
Revenues generated from contracts

Sales to external customers

with customers *1(in thousands of yen)
Revenue from sale of real estate property
Utility charge reimbursements¥2,548,000*2¥328,862

625,364

625,364

Other-

8,621,883

Total¥3,173,364¥9,576,109*1 Rental revenues, etc. which are subject to Accounting Standard for Lease Transactions (ASBJ Statement No. 13) and the transfer of real estate properties
which is subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real Estate Using Special Purpose Companies” (Accounting
System Committee Report No.15 of the Japanese Institute of Certified Public Accountants) are not included in the above amounts as they are excluded fromrevenue recognition accounting standards. Revenue generated from contracts with major customers include of revenue from sale of real estate properties
and utility charge reimbursements.
*2 As proceeds from sale of real estate property are recorded as gain on sale of real estate property in the statements of income and retained earnings, theamount calculated by deducting the cost of real estate property sales and other sales expenses from proceeds from sale of real estate property is indicated.
2. Basis for understanding revenues generated from contracts with customers
13th Fiscal Period (From April 1, 2021 to September 30, 2021)
The basis for understanding revenues generated from contracts with customers is as indicated in the Summary of Significant Accounting Policies.

3．Information on relationship of fulfillment of performance obligations based on contracts with customers and cashflow generated from said contracts along61

with amount and period of revenue expected to be recognized in the next fiscal period or thereafter from contracts with customers existing at the end of the
fiscal period.
(1) Balance of contract assets and contract liabilities, etc.
From April 1, 2021
to September 30, 2021
(in thousands of yen)
Receivables generated from contracts with customers(balance at beginning of fiscal period)
Receivables generated from contracts with customers(balance at end of fiscal period)¥95,208
138,197

Contract assets (balance at beginning of fiscal period)-

Contract assets (balance at end of fiscal period)-

Contract liabilities (balance at beginning of fiscal period)-

Contract liabilities (balance at end of fiscal period)-(2) Transaction price allocated to remaining performance obligations
Not applicable.
KRR does not include contracts whose terms are initially expected to be one year or less.
Also, with regard to utility charge reimbursements, as KRR has the right to receive from customers an amount directly corresponding to the value for thelessees who are customers of sections for which performance is complete by the end of the fiscal period, the amount it has the right to claim according toParagraph 19 of the Implementation Guidelines of the Accounting Standard for Revenue Recognition is recognized as revenue. Accordingly, such is notincluded in the note on transaction value allocated to remaining performance obligations through application of the provisions of Paragraph 80-22 (2) of the
Accounting Standard for Revenue Recognition.

18. SEGMENT INFORMATION
Segment information for the periods from April 1, 2021 to September 30, 2021 and October 1, 2020 to March 31, 2021 is as follows:(A) Segment information
Disclosure is omitted because the real estate leasing business is KRR’s sole business and it has no reportable segment information to disclose.
(B) Related information(1) Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue on thestatements of income and retained earnings.
(2) Information about each geographic area(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statements of income andretained earnings.
(b) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property, plant andequipment on the balance sheets.
(3) Information about each major customer
Disclosure is omitted because no net sales to a single external customer accounts for more than 10% of the operating revenue on the statements of income
and retained earnings.

6219. INVESTMENT AND RENTAL PROPERTIESKRR owns retail properties and logistics facility 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.
From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

(in thousands of yen)Book value
Balance at the beginning of the period¥228,086,747¥228,266,280

Changes during the period

18,382,952(179,533)

Balance at the end of the period

246,469,699

228,086,747¥264,092,200¥244,270,400

Fair value at the end of the period

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 fiscal period ended September 30, 2021, the principal
increase was the acquisition of real estate trust beneficiary interest in 3 properties totaling 16,922,833 thousand yen and additional acquisition of 1
real estate trust beneficiary interests amounting to 5,761,375 thousand yen and the principal decrease was the sales of real estate trust beneficiaryinterests in 3 properties totaling 3,765,046 thousand yen and depreciation of 1,167,191 thousand yen and during the fiscal period ended March 31,
2021, the principal increase was the acquisition of real estate trust beneficiary interest in 2 properties totaling 2,106,845 thousand yen and additional
acquisition of 2 real estate trust beneficiary interests amounting to 372,441 thousand yen and the principal decrease was the sales of real estate
trust beneficiary interests in 1 property totaling 2,146,120 thousand yen and depreciation of 1,068,136 thousand yen.
Note 3: The fair value at the end of the period is the appraisal value determined by outside appraisers. The fair value of Daikanyama Address Dixsept(30.0%
quasi co-ownership interest) as of September 30, 2021 is based on the sales price (1,993,200 thousand yen) under the trust beneficiary interest
sales contracts entered on November 17, 2020. The fair value of Daikanyama Address Dixsept (60.0% quasi co-ownership interest), Hankyu Oasis
Hirakatadeguchi and Unicus Ina (20.0% quasi co-ownership interest) as of March 31, 2021 are based on the sales prices (3,986,400 thousand yen,
1,500,000 thousand yen and 1,048,000 thousand yen) under the trust beneficiary interest sales contracts entered on November 17, 2020, February
25, 2021 and April 7, 2021, respectively.
The profit or loss for the periods ended September 30, 2021 and March 31, 2021 concerning investment and rental properties is included in Note “8.
BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REAL ESTATEPROPERTY.”

20. PER UNIT INFORMATION
From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

Net asset value per unit
Net income per unit

¥235,414¥232,575¥7,384¥7,084

Net income per unit is calculated by dividing net income by the day-weighted average number of investment units outstanding during the fiscal period
ended September 30, 2021 (577,064 units) and during the fiscal period ended March 31, 2021 (536,177 units) . Net income per unit after adjusting forresidual units is not included because there were no residual investment units.
The basis for calculating net income per unit is as follows:

Net income (in thousands of yen)
Net income not attributable to ordinary unitholders (in thousands of yen)
Net income attributable to ordinary unitholders (in thousands of yen)
Weighted average number of units during the period (units)

From April 1, 2021

From October 1, 2020

to September 30, 2021

to March 31, 2021

¥4,261,244¥3,798,649--¥4,261,244¥3,798,649

577,064

536,17763

21. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable.

22. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, plant and equipment and intangible assets consist of the following as of September 30, 2021:
Type of asset

Balance atthebeginning of
the period

Increaseduring theperiodBuildings¥746,570¥9,02846,777-

2,956,465-

Decreaseduring theperiodBalance atthe end of
the period

Depreciation
for the periodNetbalance atthe end of
the period¥678,064

Depreciation
Accumulated
depreciation

Remarks(in thousands of yen)
Structures
Land

Property,plant andequipment-¥755,598¥77,533¥16,089-

46,777

5,425

1,402

41,351-

2,956,465--

2,956,465

Subtotal

3,749,812

9,028

-

3,758,841

82,95917,491

3,675,881

Buildings in trust

62,521,244

6,393,544

993,12267,921,666

9,332,397

1,058,576

58,589,268

Structures in trust

3,491,216

75,71075,032

3,491,894

644,494

65,6792,847,400

Machinery andequipment in trust

261,479-

13,464

248,01458,8987,160

189,115

Tools, furniture andfixtures in trust

166,797

15,436

2,784

179,449

75,697

13,325

103,751

162,816,625

16,820,393

2,882,244

176,754,774--

176,754,774

6,177

1,076

-

7,254

-

-

7,254

229,263,541

23,306,161

3,966,649

248,603,053

10,111,489

1,144,741

238,491,564

233,013,354

23,315,189

3,966,649

252,361,894

10,194,448

1,162,233

242,167,446

4,349,916--

4,349,916

53,0473,978

4,296,869

16,719--16,719

9,781

1,284

6,938

-

¥4,366,636¥62,829¥5,263¥4,303,807

Land in trust
Construction inprogress in trust
Subtotal
Total
Intangible
assets¥Leasehold right in
trust
Other

Total

¥4,366,636

¥

-

¥

*1

*1,2

*1 The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
*2 The amount of decrease during the period is primarily attributable to the sales of the real estate properties.

Property, plant and equipment and intangible assets consist of the following as of March 31, 2021:
Type of asset

Balance atthebeginning of
the period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period

Depreciation
for the periodNetbalance atthe end of
the period

Depreciation
Accumulated
depreciation

Remarks(in thousands of yen)
Buildings¥745,164¥1,405-¥746,570¥61,444¥16,057¥685,125

Structures

38,751

8,026-

46,777

4,023

1,067

42,753Land

Property,plant andequipment

2,951,386

5,079

-

2,956,465--

2,956,465

Subtotal

3,735,302

14,510-3,749,812

65,467

17,125

3,684,344

Buildings in trust

61,177,360

1,706,288

362,404

62,521,244

8,450,403

962,084

54,070,840

Structures in trust

3,439,796

68,533

17,1133,491,216

600,741

64,9982,890,475

Machinery andequipment in trust

262,338-858

261,479

53,6757,512

207,804

Tools, furniture andfixtures in trust

150,938

19,683

3,823

166,797

63,53012,436103,267

163,431,237

1,220,609

1,835,221

162,816,625--

162,816,625

-

6,177

-

6,177

-

-

6,177

228,461,671

3,021,292

2,219,422

229,263,541

9,168,350

1,047,032

220,095,190

232,196,973

3,035,802

2,219,422

233,013,354

9,233,818

1,064,157

223,779,535

4,349,916--

4,349,916

49,0683,9784,300,847-

16,719

8,496

1,284

8,223

-

¥4,366,636¥57,565¥5,263¥4,309,070

Land in trust
Construction inprogress in trust
Subtotal
Total
Intangible
assets
Total¥

Leasehold right in
trust
Other

16,719¥4,366,636

¥

-

¥

*The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
6423. SHORT-TERM LOANS PAYABLE AND LONG-TERM LOANS PAYABLE
The following summarizes short-term loans payable and long-term loans payable outstanding as of September 30, 2021:
Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 2）
（Note 3）

Balance atthe end of
the period(in thousands of yen)

Current
portion of
long-term
loans
payable500,000-

500,000-

2,600,000-

2,600,000-

500,000-

500,000-

MUFG Bank, Ltd.

400,000-

400,000-

Sumitomo Mitsui Trust
Bank, Limited

300,000-

300,000-

300,000-

300,000-

600,000-

600,000-

0.400

500,000-

500,000-

0.553

400,000-

400,000-

0.553

200,000-

200,000-

0.553

900,000-

900,000-

0.477

2,750,000--

2,750,000

0.484

2,600,000--

2,600,000

800,000--

800,000

600,000--

600,000

400,000--

400,000

Mizuho Trust &Banking Co., Ltd.

400,000--

400,000

Mizuho Bank, Ltd.

300,000--

300,000

Resona Bank, Limited
Development Bank ofJapan Inc. (Note 6)
MUFG Bank, Ltd.
(Note 7)
Mizuho Bank, Ltd.
(Note 7)
Subtotal
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Bank, Ltd.

300,000--

300,000

1,600,000--

1,600,000

1,250,000--

1,250,000

800,000--

800,000

19,000,000-

7,200,000

11,800,000

4,600,000--

4,600,000

1,000,000--

1,000,000

600,000--

600,000

400,000--

400,000

Resona Bank, Limited

400,000--

400,000

400,000--

400,000

Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.

Long-term
loans
payableMizuho Trust &Banking Co., Ltd.
MUFG Bank, Ltd.

Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(Note 5)

Unsecured/
Nonguaranteed(%)

The Gunma Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.

Resona Bank, Limited
MUFG Bank, Ltd.
(Note 6)Development Bank ofJapan Inc.（Note 6）
Mizuho Bank, Ltd.
(Note 6)
Mizuho Trust &Banking Co., Ltd.
（Note 6）
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

Payment due
date（Note 4）400,000--

400,000

Development Bank ofJapan Inc. (Note 6)

1,500,000--

1,500,000

MUFG Bank, Ltd.

450,000--

450,000

Resona Bank, Limited
The Musashino Bank,Ltd.
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.

200,000--

200,000

150,000--

150,000

1,500,000--

1,500,000

3,000,000--

3,000,000

1,150,000--

1,150,000

MUFG Bank, Ltd.

1,000,000--

1,000,000

0.550

September
30, 2021

0.485

April 27,
2021

April 27,
2021

April 30,2021
January 31,
2022

0.978

February 10,
2022

1.033

February 10,
2022

0.603

August 31,
2022

1.366

April 16,
2025

0.975

March 31,
2023

0.994

March 31,
2023

0.987

March 31,
2023

1.013

March 31,
2023

1.110

March 31,2024

65

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Payment due
date（Note 4）--700,000

650,000--

650,000

500,000--

500,000

1,500,000--

1,500,000

400,000--

400,000

450,000--

450,000

0.803

890,000--

890,000

0.760

2,670,000--

2,670,000

0.932

890,000--

890,000

0.888

2,000,000--

2,000,000

1.049

1,000,000--

1,000,000

1.049

500,000--

500,000

1.002

1,500,000--

1,500,000

400,000--

400,000

Aozora Bank, Ltd.

400,000--

400,000

Resona Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

300,000--

300,000

600,000--

600,000

0.696

600,000--

600,000

0.815

500,000--

500,000

0.814

200,000--

200,000

0.814

500,000--

500,000

0.903

October 31,
2026

500,000--

500,000

500,000--

500,000

1.033

May 18,2027

400,000--

400,000

500,000--

500,000

1.050

500,000--

500,000

1.049

300,000--

300,000

1.050

500,000--

500,000

0.670

1,500,000--

1,500,000

0.918

500,000--

500,000

0.930

1,500,000--

1,500,000

1.029

1,500,000--

1,500,000

1.100

500,000--

500,000

1.035

1,200,000--

1,200,000

1.000

900,000--

900,000

0.988

2,600,000--

2,600,000

0.985

MUFG Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited

Development Bank ofJapan Inc. (Note 6)
Mizuho Bank, Ltd.
(Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation

Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)

700,000

Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation

Long-term
loans
payableAverageinterest rate
（Note 2）
（Note 3）

1.243

0.772

April 16,2025
September 30,
2024
September 30,
2024
April 21,2026
October 31,
2025

January 31,
2027

October 31,
2024

October 31,
2024

May 18,2027

September
29, 2023
September
30, 2026
September
29, 2027
September
29, 2028
October 3,
2027
February 10,
2028
April 30,
2027
April 30,
2027

66

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
2,000,000--

2,000,000

0.902

Mizuho Bank, Ltd.

1,000,000--

1,000,000

1.090

1,000,000--

1,000,000

0.907

1,500,000--

1,500,000

0.999

500,000--

500,000

0.900

500,000--

500,000

0.999

500,000--

500,000

0.999

700,000--

700,000

0.913

700,000--

700,000

0.726

Resona Bank, Limited

500,000--

500,000

0.676

Aozora Bank, Ltd.

500,000--

500,000

0.726

Mizuho Bank, Ltd.
The Musashino Bank,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

400,000--

400,000

0.726

400,000--

400,000

0.676

1,850,000--

1,850,000

0.910

1,300,000--

1,300,000

0.860

Resona Bank, Limited.

650,000--

650,000

0.460

Aozora Bank, Ltd.

890,000--

890,000

0.585

Mizuho Bank, Ltd.

1,370,000--

1,370,000

0.718

Sumitomo Mitsui Trust
Bank, Limited

820,000--

820,000

0.550

MUFG Bank, Ltd.

1,270,000--

1,270,000

0.750

650,000--

650,000

0.670

1,500,000--

1,500,000

0.520

1,000,000--

1,000,000

0.644

1,000,000--

1,000,000

0.644

500,000--

500,000

0.550

Resona Bank, Limited
Development Bank ofJapan Inc.（Note 6）

300,000--

300,000

0.644

500,000--

500,000

0.830

The Gunma Bank, Ltd.

400,000--

400,000

0.498

400,000--

400,000

0.478

700,000--

700,000

0.758

450,000--

450,000

0.725

3,000,000--

3,000,000

Mizuho Trust &Banking Co., Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui Trust
Bank, Limitedloans
payableMizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
(Note 6)The Musashino Bank,
Ltd. （Note 6）
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

Payment due
date（Note 4）Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)

Sumitomo Mitsui
Banking Corporation
The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.

Long-term

Averageinterest rate
（Note 2）
（Note 3）700,000--

700,000

Sumitomo Mitsui Trust
Bank, Ltd.

500,000--

500,000

Resona Bank, Ltd.

450,000--

450,000

Mizuho Bank, Ltd.
Development Bank ofJapan Inc.（Note 6）

400,000--

400,000

1,500,000--

1,500,000

April 30,
2026
April 30,2028
May 31,
2026

May 31,2027

March 31,2025

March 31,2026

March 31,2028
August 31,
2024
August 31,
2026
March 31,2028
October 31,
2024
January 31,
2028
April 30,
2028

October 31,
2026

October 31,
2029
January 31,
2025
January 31,
2025
September
30, 2028
January 31,
2029

0.809

January 31,
2030

0.888

January 31,
2031

67

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Sumitomo Mitsui
Banking Corporation

Long-term
loans
payable--2,400,000

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.

1,600,000--

1,600,000

550,000--

550,000

Resona Bank, Ltd.

500,000--

500,000

Aozora Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.

350,000--

350,000

300,000--

300,000-

600,000-

600,000-

500,000-

500,000

Resona Bank, Ltd.
MUFG Bank, Ltd.
（Note 6）-400,000-

400,000-

500,000-

500,000

Aozora Bank, Ltd.

-

500,000-

500,000-

200,000-

200,000-

1,000,000-

1,000,000

0.490

-

400,000-

400,000

0.475-

1,600,000-

1,600,000-

400,000-

400,000-

300,000-

300,000-

300,000-

300,000-

600,000-

600,000

0.525-

500,000-

500,000

0.856-

500,000-

500,000

0.426-

500,000-

500,000

0.350-

800,000-

800,000-

700,000-

700,000-

600,000-

600,000

Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
（Note 6）
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Resona Bank, Ltd.
MUFG Bank, Ltd.
（Note 6）Development Bank ofJapan Inc.（Note 6）
The Musashino
Bank,Ltd.（Note6）
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.

-

600,000-

600,000

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
（Note6）
SUMITOMO LIFE
INSURANCECOMPANY（Note6）
Development Bank ofJapan Inc.（Note6）-

500,000-

500,000-

500,000-

500,000

0.535

February 28,
2026

0.407

April 30,
2025

0.400

April 30,
2025

0.461

April 30,
2026

0.548

Use

Remarks(Note 5)

Unsecured/
Nonguaranteed

April 30,2028

500,000-

300,000-

300,000

0.824

Mizuho Bank, Ltd.

-

500,000-

500,000

0.357

MUFG Bank, Ltd.
（Note6）-200,000-

200,000

0.525

Aozora Bank, Ltd.

-

200,000-

200,000

0.601

The Gunma Bank, Ltd.
（Note6）-500,000-

500,000

0.450

14,700,000-

100,500,000¥ 14,700,000¥ 7,200,000¥112,300,000

October 31,
2027
April 30,
2031
April 30,
2026
April 30,
2026

0.550
-

85,800,000

October 31,
2027

April 30,2028

500,000¥ 104,800,000

October 31,
2026
October 31,
2026

0.601

-

Subtotal

Payment due
date（Note 4）(%)

2,400,000

The 77 Bank, Ltd.

Total

Averageinterest rate
（Note 2）
（Note 3）

April 30,
2031
April 30,
2024
October 31,
2027
April 30,2028
September
30, 2026

68

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:
Due after 1 year
through 2 years
Long-term loans
payable¥ 7,500,000

Due after 2 years
through 3 years¥ 9,490,000

Due after 3 years
through 4 years（in thousands yen）
¥ 15,320,000

Due after 4 years
through 5 years¥ 19,850,000

Due after 5 years¥ 48,340,000

Note 2: All debts except for the following Note 6 are loans payable 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 loans payable forwhich interest rate swap transactions were implemented in order to hedge the interest rate volatility risk, the weighted average interest rates taking into consideration
the effects of the interest rate swaps are indicated.
Note 4: All the repayment methods of debt financing 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 ofdebts.
Note 6: Loans payable at a fixed rate.
Note 7: Borrowings are listed in the current portion of long-term loans payable from the fiscal period under review, listed in long-term loans payable in the previous fiscal
period.

69

The following summarizes short-term loans payable and long-term loans payable outstanding as of March 31, 2021:
Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 2）
（Note 3）

Balance atthe end of
the period(in thousands of yen)
Short-termloanspayableCurrent
portion of
long-term
loans
payableSumitomo Mitsui
Banking Corporation

Payment due
date（Note 4）Use

Remarks

0.471

January 31,
2021(Note 5)

Unsecured/
Nonguaranteed

0.865

February 10,
2021

0.925

February 10,
2021

0.472

February 28,
2021

0.550

September
30, 2021

0.485

April 27,2021
(Note 5)

Unsecured/
Nonguaranteed(%)

2,750,000-

2,750,000-

Subtotal
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.

2,750,000-

2,750,000-

3,000,000-

3,000,000-

700,000-

700,000-

500,000-

500,000-

450,000-

450,000-

Resona Bank, Limited

450,000-

450,000-

Mizuho Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

400,000-

400,000-

1,500,000-

1,500,000-

2,400,000-

2,400,000-

1,600,000-

1,600,000-

Sumitomo Mitsui Trust
Bank, Limited

550,000-

550,000-

Resona Bank, Limited

500,000-

500,000-

Aozora Bank, Ltd.

500,000-

500,000-

Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
The Gunma Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.

350,000-

350,000-

300,000-

300,000-

500,000--

500,000

2,600,000--

2,600,000

500,000--

500,000

400,000--

400,000

300,000--

300,000

300,000--

300,000

600,000--

600,000

0.400

500,000--

500,000

0.553

400,000--

400,000

0.553

200,000--

200,000

0.553

900,000--

900,000

0.473

April 30,2021

2,600,000--

2,600,000

800,000--

800,000

600,000--

600,000

400,000--

400,000

0.978

February 10,2022

400,000--

400,000

300,000--

300,000

300,000--

300,000

1,600,000--

1,600,000

1.033

February 10,2022

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
MUFG Bank, Ltd.
(Note 6)Development Bank ofJapan Inc.（Note 6）
Mizuho Bank, Ltd.
(Note 6)
Mizuho Trust &Banking Co., Ltd.
（Note 6）
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation(Note 7)
MUFG Bank, Ltd.
(Note 7)
Sumitomo Mitsui Trust
Bank, Limited (Note 7)
Aozora Bank, Ltd.
(Note 7)
Mizuho Trust &Banking Co., Ltd.
(Note 7)
Mizuho Bank, Ltd.
(Note 7)
Resona Bank, Limited(Note 7)Development Bank ofJapan Inc. (Note 6)(Note 7)

April 27,
2021

70

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Current
portion of
long-term
loans
payableSumitomo Mitsui
Banking Corporation

2,750,000-

2,750,000

27,400,000

2,750,000

13,200,000

16,950,000

4,600,000--

4,600,000

1,000,000--

1,000,000

600,000--

600,000

400,000--

400,000

Resona Bank, Limited

400,000--

400,000

Mizuho Trust &Banking Co., Ltd.

400,000--

400,000

400,000--

400,000

1,500,000--

1,500,000

MUFG Bank, Ltd.

450,000--

450,000

Resona Bank, Limited
The Musashino Bank,Ltd.
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.

200,000--

200,000

150,000--

150,000

1,500,000--

1,500,000

3,000,000--

3,000,000

1,150,000--

1,150,000

MUFG Bank, Ltd.

1,000,000--

1,000,000

700,000--

700,000

650,000--

650,000

500,000--

500,000

1,500,000--

1,500,000

Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Bank, Ltd.

MUFG Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)

Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Long-term
loans
payableResona Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Development Bank ofJapan Inc. (Note 6)
Sumitomo Mitsui
Banking Corporation

Payment due
date（Note 4）Use

Remarks

0.478

January 31,
2022(Note 5)

Unsecured/
Nonguaranteed

1.366

April 16,
2025

0.975

March 31,
2023

0.994

March 31,
2023

0.987

March 31,
2023

1.013

March 31,
2023

1.110

March 31,
2024

1.243

April 16,2025

(Note 5)

Unsecured/
Nonguaranteed(%)-

Subtotal

Averageinterest rate
（Note 2）
（Note 3）400,000--

400,000

450,000--

450,000

0.803

890,000--

890,000

0.760

2,670,000--

2,670,000

0.932

890,000--

890,000

0.888

2,000,000--

2,000,000

1.049

1,000,000--

1,000,000

1.049

500,000--

500,000

1.002

1,500,000--

1,500,000

400,000--

400,000

Aozora Bank, Ltd.

400,000--

400,000

Resona Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)300,000--

300,000

600,000--

600,000

0.696

600,000--

600,000

0.815

500,000--

500,000

0.814

200,000--

200,000

0.814

500,000--

500,000

0.903

MUFG Bank, Ltd.
Development Bank ofJapan Inc. (Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited

0.772

September 30,
2024
September 30,
2024
April 21,2026
October 31,
2025

January 31,
2027

October 31,
2024

October 31,
2024

October 31,
2026
71

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
Development Bank ofJapan Inc. (Note 6)
Mizuho Bank, Ltd.
(Note 6)
Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)
MUFG Bank, Ltd.

Long-term
loans
payableMizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.

Averageinterest rate
（Note 2）
（Note 3）Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)

500,000--

500,000

500,000--

500,000

400,000--

400,000

500,000--

500,000

1.050

500,000--

500,000

1.049

300,000--

300,000

1.050

500,000--

500,000

0.670

1,500,000--

1,500,000

0.918

500,000--

500,000

0.930

1,500,000--

1,500,000

1.029

1,500,000--

1,500,000

1.100

500,000--

500,000

1.035

1,200,000--

1,200,000

1.000

1,250,000--

1,250,000

800,000--

800,000

900,000--

900,000

0.988

2,600,000--

2,600,000

0.985

2,000,000--

2,000,000

0.902

1.033

0.603

1,000,000--

1,000,000

1.090

1,000,000--

1,000,000

0.907

1,500,000--

1,500,000

0.999

500,000--

500,000

0.900

500,000--

500,000

0.999

500,000--

500,000

0.999

700,000--

700,000

0.913

700,000--

700,000

0.726

Resona Bank, Limited

500,000--

500,000

0.676

Aozora Bank, Ltd.

500,000--

500,000

0.726

Mizuho Bank, Ltd.
The Musashino Bank,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

400,000--

400,000

0.726

400,000--

400,000

0.676

1,850,000--

1,850,000

0.910

1,300,000--

1,300,000

0.860

Resona Bank, Limited.

650,000--

650,000

0.460

Aozora Bank, Ltd.

890,000--

890,000

0.585

Mizuho Bank, Ltd.

1,370,000--

1,370,000

0.718

Sumitomo Mitsui Trust
Bank, Limited

820,000--

820,000

0.550

MUFG Bank, Ltd.

1,270,000--

1,270,000

0.750

The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui Trust
Bank, Limited

Payment due
date（Note 4）

May 18,2027

May 18,2027

September
29, 2023
September
30, 2026
September
29, 2027
September
29, 2028
October 3,
2027
February 10,2028
August 31,
2022
April 30,
2027
April 30,
2027
April 30,
2026
April 30,2028
May 31,
2026

May 31,2027

March 31,2025

March 31,2026

March 31,2028
August 31,
2024
August 31,
2026
March 31,2028
October 31,
2024
January 31,
2028

72

Classification

Balance at the
beginning of theperiodLenderIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
(Note 6)
Resona Bank, Limited
Development Bank ofJapan Inc.（Note 6）
The Gunma Bank, Ltd.
The Musashino Bank,
Ltd. （Note 6）
Sumitomo Mitsui
Banking Corporation
Long-term
loans
payable--650,000

0.670

1,500,000--

1,500,000

0.520

1,000,000--

1,000,000

0.644

1,000,000--

1,000,000

0.644

500,000--

500,000

0.550

300,000--

300,000

0.644

500,000--

500,000

0.830

400,000--

400,000

0.498

400,000--

400,000

0.478

700,000--

700,000

0.758-

450,000-

450,000

0.725-

3,000,000-

3,000,000-

700,000-

700,000-

500,000-

500,000-

450,000-

450,000-

400,000-

400,000-

1,500,000-

1,500,000-

2,400,000-

2,400,000

Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Resona Bank, Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.（Note 6）
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd.

-

1,600,000-

1,600,000

Sumitomo Mitsui Trust
Bank, Ltd.

-

550,000-

550,000

Resona Bank, Ltd.

-

500,000-

500,000

Aozora Bank, Ltd.

-

500,000-

500,000

Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.

-

350,000-

350,000-

300,000-

300,000

74,650,000

13,200,000-

87,850,000¥ 104,800,000¥ 15,950,000¥ 15,950,000¥104,800,000

Total

Payment due
date（Note 4）Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)

650,000

Aozora Bank, Ltd.

Subtotal

Averageinterest rate
（Note 2）
（Note 3）

April 30,
2028

October 31,
2026

October 31,
2029
January 31,
2025
January 31,
2025
September
30, 2028
January 31,
2029

0.809

January 31,
2030

0.888

January 31,
2031

0.535

February 28,
2026

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:
Due after 1 year
through 2 years
Long-term loans
payable¥ 9,050,000

Due after 2 years
through 3 years¥ 7,500,000

Due after 3 years
through 4 years（in thousands yen）
¥ 8,810,000

Due after 4 years
through 5 years¥ 16,090,000

Due after 5 years¥ 46,400,000

Note 2: All debts except for the following Note 6 are loans payable 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 loans payable forwhich interest rate swap transactions were implemented in order to hedge the interest rate volatility risk, the weighted average interest rates taking into consideration
the effects of the interest rate swaps are indicated.
Note 4: All the repayment methods of debt financing 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 ofdebts.
Note 6: Loans payable at a fixed rate.
Note 7: Borrowings are listed in the current portion of long-term loans payable from the fiscal period under review, listed in long-term loans payable in the previous fiscal period.

7324. INVESTMENT CORPORATION BONDS
Outstanding investment corporation bonds as of September 30, 2021 are as follows.
SeriesDate of issue

Balance atthe beginningof period

Decreaseduring theperiodBalance at theend of period

Interest rate

(in thousands of yen)First series of unsecured
investment corporation bonds(Note 1)
Second series of unsecured
investment corporation bonds(Note 1)
Third series of unsecured
investment corporation bonds(Note 1)
Fourth series of unsecured
investment corporation bonds(Note 1)Fifth series of unsecured
investment corporation bonds(Note 1)
Sixth series of unsecured
investment corporation bonds(Note 2)Total

October 31,
2016¥1,000,000

October 31,
2016

Repayment date

¥1,000,000

0.200

October 29,
2021

1,000,000-

1,000,000

0.600

October 30,
2026

August 31,
2017

1,000,000-

1,000,000

0.320

August 31,
2022

August 31,
2017

2,000,000-

2,000,000

0.700

August 31,
2027

April 26,2018

2,000,000-

2,000,000

0.700

April 26,
2028

April 30,2020

1,000,000-

1,000,000

0.400

April 30,2025-

¥8,000,000¥8,000,000¥

Remarks

(%)

-

¥

Use

(Note3)

Unsecured(Note4)Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Ranking pari passu among the specified investment corporation bonds and small private placement with restrictions on splits of denomination of each bond.
Note 3: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate and repayment of debts.
Note 4: Investment corporation bonds were used as the funds for repayment of debts.
Note 5: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year
or less
Investment
corporation bonds

Due after 1 year
through 2 years¥2,000,000¥

Due after 2 years
through 3 years(in thousands of yen)-¥

Due after 3 years
through 4 years-

Due after 4 years
through 5 years¥1,000,000¥-

Outstanding investment corporation bonds as of March 31, 2021 are as follows.
SeriesFirst series of unsecured
investment corporation bonds(Note 1)
Second series of unsecured
investment corporation bonds(Note 1)
Third series of unsecured
investment corporation bonds(Note 1)
Fourth series of unsecured
investment corporation bonds(Note 1)Fifth series of unsecured
investment corporation bonds(Note 1)
Sixth series of unsecured
investment corporation bonds(Note 2)
Total

Date of issue

Balance atthe beginningof period

October 31,
2016¥1,000,000

October 31,
2016
August 31,
2017
August 31,
2017

Decrease
Balance at theduring theend of period
period(in thousands of yen)Interest rate

Repayment date

¥1,000,000

0.200

October 29,
2021

1,000,000-

1,000,000

0.600

October 30,
2026

1,000,000-

1,000,000

0.320

August 31,
2022

0.700

August 31,2027

2,000,000-

2,000,000

April 26,2018

2,000,000-

2,000,000

0.700

April 26,
2028

April 30,2020

1,000,000-

1,000,000

0.400

April 30,2025-

¥8,000,000¥8,000,000¥

Remarks

(%)

-

¥

Use

(Note3)

Unsecured(Note4)Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Ranking pari passu among the specified investment corporation bonds and small private placement with restrictions on splits of denomination of each bond.
Note 3: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate and repayment of debts.
Note 4: Investment corporation bonds were used as the funds for repayment of debts.
Note 5: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year
or less
Investment
corporation bonds¥1,000,000

Due after 1 year
through 2 years¥1,000,000

Due after 2 years
through 3 years(in thousands of yen)¥

Due after 3 years
through 4 years-¥

Due after 4 years
through 5 years-¥1,000,000

7425. DISTRIBUTIONS
From April 1, 2021
to September 30, 2021

I.. Retained earnings at the end of period

From October 1, 2020
to March 31, 2021

¥4,511,908,436¥4,153,672,573

II. Distributions in excess of earnings
Of which, allowance for temporary
difference adjustments¥31,437,558¥5,361,770¥31,437,558¥5,361,770

Ⅲ.Incorporation into unitholders’ capital¥-¥104,194,502

Of which, reversal of allowance fortemporary difference adjustments¥-¥104,194,502

Ⅳ. Total distributions¥4,266,193,056¥3,804,175,815

Distributions per unit

¥7,328¥7,095¥4,234,755,498¥3,798,814,045¥7,274¥7,085¥31,437,558¥5,361,770

¥54

¥10

¥277,152,938¥250,664,025

Of which, distributions of earnings
Of which, distributions of earnings perunit
Of which, allowance for temporary
difference adjustments
Of which, distributions in excess ofearnings per unit (allowance fortemporary difference adjustments)
Ⅴ.Retained earnings brought forward to
the next period

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amountequivalent 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 this policy, KRR has decided that it shall
distribute ¥4,234,755,498 which is almost the entire
amount of income as defined in Article 136-1 of theInvestment Trust Act.
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 of¥31,437,558 for allowance for temporary difference
adjustments (as defined in Article 2-2-30 of theOrdinance on Accountings of Investment Corporations)for the purpose of reflecting the effect on distributions of
the difference in earnings calculated under Japanese
GAAP and Japanese tax laws (as defined in Article 2-230 (a) of the Ordinance on Accountings of Investment
Corporations) in association with the amortization of
fixed-term land leasehold rights and of the item
deducted from net asset (as defined in Article 2-2-30 (b)of the Ordinance on Accountings of Investment
Corporations) in association with deferred losses onhedges .

Method of calculating distribution amountIn accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the amountequivalent 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 this policy, KRR has decided that it shall
distribute ¥3,798,814,045 which is almost the entire
amount of income as defined in Article 136-1 of theInvestment Trust Act after deduction of reversal of
allowance for temporary difference adjustments (asdefined in Article 2-2-30 of the Ordinance on
Accountings of Investment Corporations).
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 of ¥5,361,770
for allowance for temporary difference adjustments (asdefined in Article 2-2-30 of the Ordinance on
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 (as defined in Article 2-2-30 (a)of the Ordinance on Accountings of Investment
Corporations) in association with the amortization of
fixed-term land leasehold rights.

13th Fiscal Period (From April 1, 2021 to September 30, 2021)
1. Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.
Buildings in trust,
Leasehold right in trust
Deferred gains or losses onhedgesReasonAllowance for temporary
difference adjustments

Amortization of leasehold right in trust and the amount in excess ofdepreciation¥5,045

Loss on interest-rate swaps recognized at the end of the fiscal period¥26,39275

2. Method of reversal
Method of reversal
Buildings in trust,
Leasehold right in trust

Upon sale, the corresponding amount is scheduled to be reversed.

Deferred gains or losses on hedges

Based on changes in the fair value of the hedging instruments, the corresponding amount is scheduled to be reversed.

12th Fiscal Period (From October 1, 2020 to March 31, 2021)
1. Reasons, related assets and allowance(in thousands of yen)
Related assets, etc.
Buildings in trust,
Leasehold right in trust

Allowance for temporary
difference adjustments

ReasonAmortization of leasehold right in trust and the amount in excess ofdepreciation¥5,361

2. Reasons, related assets and reversal of allowance(in thousands of yen)
Related assets, etc.
Deferred gains or losses onhedges

Reversal of allowance for temporary
difference adjustments

ReasonChanges in the fair value of derivative instruments¥104,194

3. Method of reversal
Method of reversal
Buildings in trust,
Leasehold right in trust

Upon sale, the corresponding amount is scheduled to be reversed.

Deferred gains or losses on hedges

Based on changes in the fair value of the hedging instruments, the corresponding amount is scheduled to be reversed.

76