Semi-annual Reportfor the 14th Period(From October 1, 2021
to March 31, 2022)

Focused Investment in Shopping Centers for Daily Needs

Security code: 3453

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

14thHighlights

The 14th fiscal period ended March 31, 2022
Distributions per unit

Forecast DPU
for the 15th fiscal period

JPY 7,090

JPY 6,595

Total assets (by acquisition price) /Number of properties
Number of tenants

519

Forecast DPU
for the 16th fiscal period

JPY 6,500

JPY 247.2bn / 66
Occupancy rate
at the end of period (Note)

Contents
Ⅰ Overview of KRR
From the Executive Director
Overview of Portfolio
Close-up KRR Vol.14
Kitera Town Chofu
Summery of Investment Unit

Unicus Urawamisono (Land)

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

99.2%

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 14th fiscal period(from October 1, 2021 to March 31, 2022).
During the 14th fiscal period, we faced another challenging period amid the COVID-19
pandemic with number of cases reaching record high in Japan, and accompanying quasi-stateof emergency in many regions including Tokyo.
Despite these circumstances, shopping centers for daily needs with grocery supermarkets ascore tenants have continued to act as vital retail infrastructure providing fundamental
functions to maintain day-to-day life of consumers. Therefore, impact of the pandemic
remained limited for KRR in the 14th fiscal period.
In the 14th fiscal period, we have reshuffled some tenants and assets which have taken time torecover sales under the COVID-19 pandemic to improve the stability and profitability of ourportfolio. With regard to asset reshuffle, we sold three properties, including a property
occupied by a large health club, while acquiring three properties, including newly built NSC in
Fukuoka and Kitera Plaza Aobadai aiming to revitalize by conversing a large health club to a
shopping center for daily needs with a grocery store and clinics. As a result, KRR's portfolio
totaled 247,291 million yen for 66 properties at the end of the 14th fiscal period. Gain on saleof properties was also recorded, resulting in operating revenue of 10,254 million yen,operating income of 4,756 million yen, ordinary income of 4,131 million yen and net income of
4,127 million yen in the 14th fiscal period. Distribution per unit was 7,090 yen. Due to theacquisition of three additional properties at the beginning of the 15th fiscal period, the asset
size grew to 253,619 million yen with 68 properties.
In March of this year, the government completely lifted quasi-state of emergency, and there
are signs of resumption in the economy. However, the business environment remains
uncertain due to the inflation and rising interest rates in the United States and othercountries, signs of rise in domestic prices and geopolitical risks overseas. 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.

Note: As Kitera Plaza Aobadai is under conversion, its occupancy rate is 0% as of March 31, 2022. However, if we exclude this property, the occupancy rate is 99.5%.

1

Over view of Por tfolio

1 Assets acquired in the 14th fiscal period
F-4 Kitera Town Fukuoka Nagahama

T-33 Kitera Plaza Aobadai

L-9

An NSC that opened in February 2021 in anarea with high population growth,neighboring Tenjin area in Fukuoka

An NSC aiming to revitalize as a shopping centerfor daily needs with a grocery store and clinics, inan area with high population growth near
Aobadai Station

A distribution center expecting an increasein demand due to expansion of logistics
locations in the Greater Osaka area

NSC

NSC

Location
Acquisition priceAppraisal value
Appraisal NOI yield

Fukuoka, Fukuoka
JPY 6,000 mm
JPY 6,140 mm
4.7%

Tenri Distribution Center

L

Location

Appraisal value

Yokohama, Kanagawa
JPY 2,553 mm (Note 1)
JPY 3,610 mmAppraisal NOI yield

4.7%

Appraisal NOI yield

Location
Acquisition price(Note 2)Acquisition priceAppraisal value

Tenri, Nara
JPY 1,070 mm
JPY 1,090 mm
5.5%

2 Leading assets of KRR
Unicus Ina

T-2 MONA Shin-Urayasu

T-5 (80% quasi-co-ownership interest)
NSC

Urban Station-Front SC

Location

Urayasu, Chiba

Acquisition price

JPY 8,063 mm

Location

Kitaadachi-gun,
SaitamaAcquisition price

T-19 Yumemachi Narashinodai Mall

T-25 Apita Terrace Yokoham Tsunashima

NSC

NSC

Location

Funabashi, Chiba

Acquisition price

JPY 3,416 mm

Location

O-1 Blumer Maitamon

R-1

NSC

NSC

Location

Kobe, Hyogo

Acquisition price

JPY 8,389 mm

Location

Yokohama,
Kanagawa

JPY 3,576 mm

Acquisition price

JPY 11,567 mm

Acquisition price

JPY 10,046 mm

Roseo Mito

Mito, Ibaraki

Note 1 : The conversion cost will be added to the acquisition price after the completion of the conversion.
Note 2: The appraisal NOI is based on the NOI after the completion of the conversion, which is on the appraisal report as of March 31, 2022. The appraisal NOI yield is calculated by
dividing the appraisal NOI by the sum of the acquisition price and the assumed costs of the conversion. The same shall apply to the calculation of the average appraisal NOI
yield of the portfolio.

2Vol. 14

T-31

NSC

Close-up KRR

Kitera Town Chofu

An NSC with a retail trade area of over 40,000 people within a 1-km radiusand solid sales even amid the COVID-19 pandemic
Kitera Town Chofu is a relatively new neighborhood shopping
center (NSC) that opened in April 2017. It is locatedroughlyhalfway between Keio Line’s Shibasaki and Tsutsujigaoka
stations, and is about 2-km away from Chofu Station. The center
is located along National Road 20 (Koshu-Kaido Road) and canaccommodate 400 cars and 415 bicycles in its parking spaces.
The center is conveniently located not only for neighboring
consumers, but also for vehicles from a wide catchment area.
Based on the 2015 census, the population in the catchment area
is approximately 43,000 people in the 1-km radius, approximately
163,000 people in the 2-km radius, and approximately 336,000
people in the 3-km radius. Detached houses are expanding in the
1-km radius, and the population is as dense as that of the Tokyo
metropolitan area. Compared to the population in 2010, thepopulation in 2015 has grown by 0.5% in the 1-km radius, 1.8% in
the 2-km radius, and 1.8% in the 3-km radius. The area also has
many families with young children.
The core tenant of the center is Life, the largest grocery
supermarket chain in Japan. Other tenants include Nojima, aconsumer electronics store, Sun Drug, a drugstore, other specialty
stores such as 100-yen shop Daiso, lifestyle service-oriented
stores and restaurants. The center can appeal to a wide range ofcustomers, including child-rearing families. Even amid theIn addition, Life partnered with an online store to provide
products online, delivering a wide range of products from fresh
foods, beverages, alcohol to daily necessities, baby goods andgeneral merchandise in at least two hours from the facility. Thisbusiness has been well received by users amid the pandemic.
Regarding the environmental initiatives, the center has a spaceon the side facing the Koshu-Kaido Road with trees planted. In
addition to achieving harmony with the trees along the KoshuKaido Road, the greenery is given consideration to thesurrounding environment. Moreover, regarding environmental
certification, we have received CASBEE Real Estate Assessment
Certification for the property (rating: S-rank, which is thehighest of four ratings) in November 2021, in recognition of
our efforts to conserve energy and resources, such asutilization of LED lightings and installation of water-saving
toilets in the property.
Going forward, we will continue to focus on the operation of
the neighborhood shopping center, which is closely linked to
local communities, and will work to promote further
environmental and social considerations in the operation ofcenter.

COVID-19 pandemic, sales of the centeras a whole in 2021 have been steadyexceeding both 2019 and 2020 sales sincemost tenants handle daily necessities andare in industries that meet robust“stay-at-home” demand.
Acquisition price

JPY 10,500 mm

Location

Chofu, Tokyo

Land area

10,527.17m 2

Gross floor area

23,588.18m 2Core tenant

Life Corporation3

Summar y of Investment Unit

Unit price and trading volume(Units)100,000(Yen)
340,000

40,000

Unit price

VolumeMarch 31, 2022
JPY 279,800

310,000

35,000280,000

30,000250,000

25,000220,000

20,000190,000

15,000160,000

10,000130,000

5,000

100,000

Feb
10

0

Mar
31

Sep
30
2015

Mar
31

Sep
30

Mar
31

2016

Sep
30

Mar
31

Sep
30

2018

2017

Mar
31

Sep
30

Mar
31

2019

Sep
30

Mar
31

Sep
30

2021

2020

Mar
31
2022

General breakdown of unitholders
As of March 31, 2022

Ownership ratio by investor type
Brokerage firms
8,629 units(1.5%)

Number of unitholders by investor type
Other domestic
corporation
307

Individuals
and others
68,609 units(2.2%)

Foreign investors
160,156 units

Brokerage firms
26(0.2%)(0.8%)(27.5%)

14,125582,177

unitholders

units(4.7%)(1.9%)

Financial
institutions120(11.8%)

Other domestic
corporation
27,329 units

Foreign investors
264

Financial
institutions
317,454 units(54.5%)

Individuals andothers13,408(94.9%)

4

II. ASSET MANAGEMENT REPORT
Overview of Asset Management(1) Trends in Key Indicators
10th fiscal period

11th fiscal period

12th fiscal period

13th fiscal period

14th fiscal period(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)(From October 1, 2021
to March 31, 2022)

Millions of yen

8,291

8,398

8,717

9,576

10,254

Millions of yen

8,234

8,272

8,263

8,901

8,956

Millions of yen

4,189

4,316

4,338

4,694

5,497

Millions of yen

3,359

3,479

3,377

3,662

3,588

Operating income

Millions of yen

4,101

4,082

4,379

4,881

4,756

Ordinary income

Millions of yen

3,499

3,505

3,799

4,262

4,131

Net income

Millions of yen

3,498

3,504

3,798

4,261

4,127

Total assets

Millions of yen

249,246

251,655

251,773272,622275,833%(+5.5)(+1.0)(+0.0)(+8.3)(+1.2)

Millions of yen

124,450

124,308

124,701

137,052

137,354%(+6.9)(-0.1)(+0.3)(+9.9)(+0.2)

Unitholders’ capital
Number of investment units issued andoutstanding
Net assets per unit

Millions of yen

121,183

121,183

121,183

133,103

133,103

Units

536,177

536,177

536,177

582,177

582,177

Yen

232,107

231,842

232,575

235,414235,932

Distributions

Fiscal period
Operating revenues
Of which, property-related revenues
Operating expenses
Of which, property-related expenses[Period-on-period changes]
Total net assets[Period-on-period changes](Note 2)Millions of yen

3,503

3,509

3,804

4,266

4,127

Distributions per unit

Yen

6,535

6,546

7,095

7,328

7,090

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

Yen

6,525

6,270

7,085

7,274

7,090

Yen

10

276

10

54

-

1.4

1.4

1.5

1.6

1.5

(2.9)

(2.8)

(3.0)

(3.2)

(3.0)

2.9

2.8

3.1

3.3

3.0

(5.8)

(5.6)

(6.1)

(6.5)

(6.0)

49.9

49.4

49.5

50.3

49.8

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

Days

183

183

182

183

182

%

100.0

95.9

100.0

99.4

100.0

62

62

64

66

66

m2

945,177.87

941,020.65

956,496.64

997,493.50

993,677.76

496

496

502

528

519

%

99.4

99.7

99.8

99.6

99.2

Depreciation

Millions of yen

1,024

1,040

1,068

1,166

1,189

Capital expenditures

Millions of yen

475

544

543

628

680

Rental NOI (Net operating income) (Note 9)

Millions of yen

5,899

5,833

5,954

6,405

6,557

FFO (Funds from operation) (Note 10)

Millions of yen

4,498

4,431

4,426

4,774

4,900

[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
8,389
8,265
8,254
8,200
8,418
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. The same applies hereafter.
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: Annualized values for the 10th fiscal period are calculated based on a period of 183 days, 183 days for 11th fiscal period, 182 days for 12th fiscal
period, 183 days for 13th fiscal period and 182 days for 14th fiscal period.
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 10th fiscal period, 100.1% for the 11th fiscal period, 100.1% for the 12th fiscal
period and 100.1% for the 13th fiscal period.
Payout ratio = Total distributions (including excess of earnings) / Net income × 100
Note 8: As for number of 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
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)5

(2) Status of Asset Management(Overview of the Fiscal Period ended March 31, 2022)
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. As
a result, the number of investment units issued at the end of the fiscal period ended March 31, 2022 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 remained challenging with weak consumer spending,particularly in service spending, due to the impact of rapid spread of COVID-19 variant since the beginning of 2022 andthe accompanying quasi-state of emergency.
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.
The financial environment remains unstable due to the global economic trends affected by soaring resource prices, theemergence of geopolitical risks, and the shift to a tighter monetary policy in the United States and other countries.
In the real estate trading market, investors continue to be eager to invest in real estate against the backdrop of monetaryeasing policies inJapan, and active transactions are taking place.
iii) Management Performance(A) Acquisition of Assets
KRR acquired three properties (Kitera Town Fukuoka Nagahama with acquisition price (Note 1) of 6,000 million yen,
Kitera Plaza Aobadai with acquisition price of 2,553 million yen and Tenri Distribution Center with acquisition price of
1,070 million yen), and disposed of three properties (Daikanyama Address Dixsept (30% trust beneficiary quasi coownership interests) with sale price (Note 2) of 1,993 million yen (acquisition price was 1,617 million yen), K’s Denki
Shonan-Fujisawa (Land) and Prime Square Jiyugaoka with total sale price of 6,360 million yen (total acquisition pricewas 5,989 million yen)).
As a result, the portfolio at the end of the period under review (March 31, 2022) consists of 66 properties with the totalacquisition price of 247,291 million yen. Portfolio as a whole performed well with an overall occupancy ratio of 99.2%(Note 3). Furthermore, the portfolio is diversified in terms of tenants as there are 519 end-tenants (Note 4) in KRR’s
retail properties and distribution centers.

Note 1: “Acquisition price” indicates the transfer price of the property to be acquired designated sale and purchase agreement (exclud ing theacquisition expenses, property taxes, city planning taxes and consumption taxes, and rounded down to the nearest million yen). (As for theproperties with building expansion, the price includes the amount described in the construction contract and construction design/supervision
outsourcing contracts (excluding expenses and taxes and rounded down to the nearest million yen)). The same applies hereafter.
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. The same applies hereafter.
Note 3: As Kitera Plaza Aobadai is under conversion, its occupancy rate is 0.0% as of March 31, 2022. However, if we exclude this property, theoccupancy rate is 99.5%.
Note 4: 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.

(B) 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.
(Debt Finance)
During the fiscal period under review, KRR borrowed 3,000 million yen for the acquisition of properties and 8,750
million yen for refinancing and redemption of investment corporation bonds. Consequently, borrowings totaled 114,300
million yen and interest-bearing debt including investment corporation bonds (excluding interest-bearing tenantleasehold and security deposits) totaled 123,300 million yen at the end of the fiscal period under review (March 31,2022). Furthermore, KRR has procured its first green loan for the portion of the borrowing (7,000 million yen) for the
purpose of refinancing existing borrowings.
6

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.
(Investment Corporation Bonds)
The status of the credit ratings as of March 31, 2022 is as follows.
Issuance
Total issue amountInterest rate
date
(Millions of yen)(%)
7th Series Unsecured Investment
January 28,
2,000
0.460
Corporation Bonds (Green Bonds)
2022
Note:
Ranking pari passu among the specified investment corporation bonds
Bonds

Maturity date
January 28,
2032

Redemption
methodFull onmaturity

Remarks(Note)As a result, the average maturity of debt is 4.5 years, the weighted average interest rate is 0.96%, the long-term debt ratio(Note 1) is 99.4% and the LTV ratio (Note 2) is 44.7%.
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 March 31, 2022 is as follows.
Credit rating agency
Japan Credit Rating Agency, Ltd. (JCR)

Details of the ratings
Long-term issuer rating

AA- (Outlook: Stable)

Rating on bonds

AA-(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.

KRR issued 7th Series Unsecured Investment Corporation Bonds (Green Bonds) (2,000 million yen) based on the shelfregistration statement on January 28, 2022.
iv) Results of Operations
For this period, revenue was 10,254 million yen, operating income was 4,756 million yen, ordinary income was 4,131
million yen and net income was 4,127 million yen.
Furthermore, in accordance with the distribution policy in the KRR Articles of Incorporation, KRR made a distributionof 4,127,634,930 yen which is almost equivalent to the earnings (as defined in Article 136-1 of Act of Investment Trustand Investment Corporation) excluding the reversals of allowance for temporary adjustment (as defined in Article 2-230 of the Ordinance on Accountings of Investment Corporations) for the fiscal period. Cash distributions are paid inaccordance with Article 67-15 of the Special Taxation Measures Law (Law No. 26 of 1957, including subsequent
amendments).
Consequently, the distributions per unit was 7,090 yen.

7

(3) Changes in Investment Units Issued and Outstanding
Changes in the number of investment units issued and outstanding and unitholders’ capital for the most recent five years
until March 31, 2022 are summarized in the following table.
Date

Type of issue

Total number of units issued andoutstanding (units)
Increase

Unitholders’ capital(Millions of yen) (Note 1)

Balance

Increase

Balance

Notes

April 18, 2017

Public offering

81,250503,700

18,244

112,500(Note 2)

May 17, 2017

Capital increase
through third-party
allocation

4,000

507,700

898

113,399(Note 3)October 23, 2019

Public offering

27,300535,000

7,462

120,861(Note 4)

November 14, 2019

Capital increase
through third-party
allocation

1,177

536,177

321

121,183(Note 5)

April 20, 2021

Public offering

43,800579,977

11,350132,533(Note 6)

Capital increase
through third-party
2,200
582,177570
133,103(Note 7)
allocation
Distributions in excess of earnings for the allowance for temporary difference adjustments are not considered.
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.

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

10th fiscal period

11th fiscal period

12th fiscal period

13th fiscal period(Yen)
14th fiscal period

For the period ended

March 31, 2020

September 30, 2020

March 31, 2021

September 30, 2021

March 31, 2022

Highest301,500

218,000

274,900

305,500

292,900

Lowest110,900

128,300

199,200

262,900

253,0008

(4) Distributions
The distributions of earnings for the 14th fiscal period is 7,090 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 excluding the reversals of allowance for temporary adjustment.

(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]

10th fiscal period
March 31, 2020

11th fiscal period
September 30, 2020

12th fiscal period
March 31, 2021

13th fiscal period
September 30, 2021

14th fiscal period
March 31, 2022

3,784,993

3,716,853

4,153,672

4,511,908

4,404,711

212,121355,023

250,664

277,152221

3,503,916

3,509,814

3,804,175

4,266,193

4,127,634[6,535 yen]

[6,546 yen]

[7,095 yen]

[7,328 yen]

[7,090 yen]

3,498,554

3,361,829

3,798,814

4,234,755

4,127,634[6,525 yen]

[6,270 yen]

[7,085 yen]

[7,274 yen]

[7,090 yen]

5,361

147,984

5,361

31,437－[10 yen][276 yen][10 yen][54 yen]

[－]

5,361

147,984

5,361

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

－

－

－

－

－

[Distributions per unit]

[－]

[－]

[－]

[－]

[－]

9

(5) Management Policy and Issues to be Addressed
Outlook for Asset Management(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 1), 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, JINUSHI Co., Ltd. (Note 2) and P&D Consulting
Co., Ltd. We are implementing a growth strategy that takes full advantage of the external growth opportunities createdby 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 1: The Kenedix Group consists of Kenedix, Inc. and its subsidiaries and affiliates.
Note 2: Nippon Commercial Development has changed its name to JINUSHI Co., Ltd. as of January 10, 2022.

(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(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.

10(6) Important Subsequent Events
Not applicable(Reference Material)(A) Acquisition of Assets
KRR acquired following asset.
Property
number
R-10
T-34
L-10
Note 1:

Property
type(Note 1)

Property name
Sun Street Hamakita(10% quasi-coownership interest)

Location

Acquisition price(Millions of yen)Appraisal value(Millions of yen)
(Note 2)Acquisition date

Sojitz Commerce
Development
1,200
1,210
April 15, 2022
Corporation
Higashimatsuyama
Higashimatsuyama, SMFL MIRAINSC
Partners Company,
4,080
4,650
April 28, 2022
Shopping Center
Saitama
LimitedPrima Meat Packers
Fukuda &Osaka, Osaka
L
1,047
1,080
April 28, 2022
Kinki Center
Partners, Co., Ltd.
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).
We categorize shopping centers for daily needs as follows.
Type of shopping centers for daily
Features
Trade area
needs
NSC

Hamamatsu,
Shizuoka

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 orcore tenant in addition to specialty store tenants

5km-10km

Urban Station-Front Shopping Centers
SS (Specialty Stores)
Note 2:

SellerShopping centers that are located in the immediate vicinity of an urban public
transportation station, which take advantage of stable foot traffic
Single- or multiple-tenant shopping centers that specialize in a single type ofmerchandise or service, such as drug stores, convenience stores, health clubs orelectronic appliance stores

3km-10km
1km-10km

Appraisal values are as of March 1, 2022.

(B) Property under Construction
A new building with approximately 666.57 m2 gross floor area (Note 1) is being constructed (the “New Building”) on
the underutilized site of Unicus Ina, a property owned by KRR. KRR expects the total construction cost (Note 2) to beapproximately 169 million yen and plans to complete the construction by late November 2022.
Note 1:
Note 2:Gross floor area shown is the entire figure of the New Building indicated on the construction confirmation certificate without taking into
account the ratio of quasi-co-ownership interest of the trust beneficiary right to be held by KRR. Construction plan and other matters related
to the New Building construction may change and accordingly gross floor area may increase or decrease.
Total construction cost is based on the construction confirmation certificate and represents the amount corresponding to the ratio of quasico-ownership interest of the trust beneficiary right to be held by KRR. Construction plan and other matters related to the New Building
construction may change and accordingly construction cost may increase or decrease.

(C) Financing
KRR borrowed 1,000 million yen (Series 47) on April 15, 2022 for the purpose to acquire additional interest (Sun Street
Hamakita (10% quasi-co-ownership interest)).

11

Profile of KRR(1) Status of Unitholders’ Capital
11th fiscal period
12th fiscal period
13th fiscal period
14th fiscal period
10th fiscal period(From October 1, 2019 (From April 1, 2020 to (From October 1, 2020 (From April 1, 2021 to (From October 1, 2021
September 30, 2020)
to March 31, 2021)
September 30, 2021)
to March 31, 2022)
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

536,177 units

536,177 units

536,177 units

582,177 units

582,177 units

Unitholders’ capital

121,183 million yen

121,183 million yen

121,183 million yen

133,103 million yen

133,103 million yen

Number of unitholders

13,558

13,941

13,852

14,377

14,125(2) Matters Concerning Investment Units
The following is a list of major unitholders as of March 31, 2022.
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

123,060

21.13

Custody Bank of Japan, Ltd.
(Trust Acct.)

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

58,928

10.12

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

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

32,175

5.52

Custody Bank of Japan, Ltd.
(Securities Investment Trust Account)

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

26,626

4.57

Kenedix, Inc.

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

16,9502.91

14,374

2.46

11,530

1.98

8,424

1.44

7,752

1.33

6,867

1.17

306,686

52.67

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 Client-Treaty 505234

Aozora Bank, Ltd.

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

State Street Bank and Trust Company 505223
Total
Note:

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

12

(3) Matters Concerning Directors and Auditori) Executive Director, Supervisory Director, and Independent Auditor as of March 31, 2022
Position

Name

Executive Director Moyuru Watanabe

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

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

750

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:

14,000－(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 investment corporation bonds.

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) Matters Concerning Directors and Auditor
Classification

Summary of Insurance Policy

All of Executive
Directors andSupervisory Directors(Outline of the insured accident to be covered)
KRR has concluded a directors’ liability insurance policy as set forth in Article 116-3, Paragraph 1 of the Act on Investment
Trust and Investment Corporation, with an insurance company and KRR shall compensate for damages, litigation expenses,
and other damages incurred by the insured as a result of receiving a claim for damages arising from an act performed by the
insured in connection with its business as a director of KRR to a certain extent under the insurance contract.
(Burden ratio of insurance premiums)
Premiums for all insured persons is wholly paid by KRR.
(Measures to ensure that the appropriateness of the execution of duties by directors is not impaired)
There is no deductible for a series of liability for damages, but the maximum amount payable is 1 billion yen.

(5) Asset Manager, the Custodian and Administrators
Asset manager, the custodian and administrators as of March 31, 2022 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.

Accounting business

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.

13

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

Areas

Property type

(Note 1)13th fiscal period
as of September 30, 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

109,23640.1

104,084

37.7

Greater Osaka area

50,22718.4

50,054

18.1

Greater Nagoya area

21,8598.0

21,767

7.9

Fukuoka area

7,815

2.9

13,823

5.0

Ordinance-designatedcities, core cities andother areas

43,671

16.0

43,466

15.8

Other retailproperties

－

－

－

－

－

Distribution
centers

－

9,983

3.7

11,110

4.0

Total of trust beneficiary interests in real estate

242,79389.1

244,30788.6

Distribution
centers

3,675

1.3

3,667

1.3

Total of real estate

3,675

1.3

3,667

1.3

Bank deposits and other assets

26,152

9.6

27,858

10.1

Total assets

272,622100.0

275,833

100.0

Real estate

Note 1:14th fiscal period
as of March 31, 2022－

“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.

14

(2) Major Assets Owned
The following are major assets owned (the ten largest properties by book value) by KRR as of March 31, 2022.
Property
Number

Property nameBook value(Millions ofyen)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

11,54644,568.05

44,568.05

100.0(Note 6)

RetailO-4Blumer HAT Kobe

11,10523,775.88

23,566.77

99.1

5.2

Retail

T-31

Kitera Town Chofu

10,580

10,665.73

9,748.06

91.4

4.7

RetailR-10

Sun Street Hamakita

10,512

48,697.31

47,996.90(Note 5)

98.6

5.9

RetailR-1

Roseo Mito

9,580

48,296.76

48,296.76

100.0

4.3

Retail

T-2

MONA Shin-Urayasu

9,340

9,961.48

9,651.53

96.9

5.3

RetailO-1

Blumer Maitamon

8,316

30,290.85

29,784.32

98.3

5.3

Retail

N-6

Resora Obu Shopping Terrace

7,974

19,909.33

19,610.98

98.5

3.2

RetailO-5Carino Esaka

6,869

7,542.69

7,440.84

98.6

3.3

Retail－RetailN-4

Homecenter Kohnan Sunadabashi
Total(Note 5)

6,765

20,329.07

20,329.07

100.0(Note 6)

92,591

264,037.15

260,993.28

98.8(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 March 31, 2022. 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 March 31, 2022 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 March 31, 2022, 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.

15

(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 March 31, 2022.
Area

Property
number
T-2
T-3

Property type

Property name

Urban
MONA Shin-Urayasu
Station-Front SC
Urban
Passaggio Nishiarai
Station-Front SC

Location(City/ward, prefecure)(Note 1)

Urayasu, Chiba
Adachi 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-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-18

NSC

T-19

NSC

T-20

NSC

Kawamachi Yahagi Mall

Chiba, Chiba

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

T-33

NSC

Kitera Plaza Aobadai

Yokohama, Kanagawa

TSports Club
Renaissance Fujimidai
Super Viva Home
Iwatsuki (Land)

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

Konami Sports Club
Shibuya
Apita Terrace Yokohama
Tsunashima

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

Nerima ward, Tokyo
Saitama, Saitama

Yokohama, Kanagawa
Yokohama, Kanagawa
Yokohama, Kanagawa
Koto ward, Tokyo
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 estateBook value(Millions of yen)

Evaluation value(Millions of yen)
(Note 2)

9,340

9,760

5,626

6,570

3,446

4,216

(Note 3)(Note 3)

3,818

4,340

3,474

3,870

2,414

2,770

4,890

5,600

3,043

3,050

1,726

1,790

1,462

1,380

3,270

3,740

1,717

1,780

1,472

1,480

4,228

4,340

3,340

3,580

3,094

3,250

1,816

1,950

1,266

1,340

3,609

3,370

11,546

12,100

5,953

6,050

2,892

2,990

2,394

2,410

2,283

2,310

1,993

2,040

10,58011,400

748

817

2,631

3,610
(Note 4)

16

Area

O

Property
numberLocation(City/ward, prefecure)(Note 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

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

F-4

NSC

R-1

NSC

F

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
CenterKitera Town Fukuoka
Nagahama
Roseo Mito

Fukuoka, Fukuoka
Kurume, Fukuoka
Fukuoka, 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

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－

Property name

O-1

O-6

N

Property Type

R-11

SS

L-1

L

L-2

L

L-3

L

L-4

L

L-5

L

L-6

L

L-7

L

L-8

L

L-9

L

Costco Wholesale
Sapporo Warehouse
Zama Distribution Center
Oppama Distribution
CenterMusashi Ranzan
Distribution Center
Yokohama Kamigo
Distribution Center
Gyoda Distribution
CenterShinjuku Nishiochiai
Distribution Center
Chiba-Kita Distribution
Center
Sapporo Shiroishi
Distribution Center
Tenri Distribution Center
Total

Sendai, Miyagi
Tsukuba, Ibaraki

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

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

Evaluation value(Millions of yen)
(Note 2)

8,316

9,600

2,727

3,200

2,090

2,590

11,105

11,100

6,869

7,330

6,107

6,430

1,521

1,710

3,772

4,080

2,047

2,020

5,495

5,780

2,351

2,680

2,088

2,360

6,765

7,500

7,974

6,950

2,587

2,550

1,353

1,650

4,887

5,760

1,533

1,830

6,049

6,140

9,580

12,100

1,417

1,520

849

911

4,377

4,930

3,198

2,580

916

981

4,111

4,050

4,320

4,300

10,512

10,890

4,180

4,430

1,460

1,790

Real estate

1,338

1,680

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

3,724

4,330

960

1,040

3,220

3,660

Real estate

868

842

1,249

1,510

834

1,040

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
Real estate

Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate
Trust beneficiaryinterest in real estate(Note 3)(Note 3)(Note 3)(Note 3)

1,120

1,090

247,974

266,83717

Note 1: “Location” indicates the residential address. For those without a residential address, the building or land address on the registry is shown.
Note 2: “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.
Note 3: The amount and proportion of quasi co-ownership interests that KRR owns are shown.
Note 4: The appraisal value is based on the appraisal value after the completion of the conversion.

18

[Earnings Performance for the Individual Properties]

Area

Property
number

T-2
T-3
T-4

Property
type

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

Property name13th fiscal period
14th fiscal period
as of September 30, 2021
as of March 31, 2022
RentalRentalRatio toRatio toNumberrevenue
Numberrevenue
Occupancy
total rental
Occupancy
total rentalof tenants(Millionsof tenants(Millionsrate (%)
revenuerate (%)
revenue(Note 1)
(Note 1)of yen)of yen)(%)(%)(Note 2)
(Note 2)MONA Shin-Urayasu

1(52)

93.9

478

5.4

1(55)

96.9

473

5.3

Passaggio Nishiarai

1(41)

98.2

298

3.3

1(41)

98.0

296

3.3

Daikanyama Address
Dixsept (Note 4)

1(24)

93.8

75

0.8

－

－

1

0.0

1.3

1

100.0

113

1.3

T-5

NSC

Unicus Ina (Note 5)

1

100.0

115

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(10)

100.0

132

1.5

1(10)

100.0

133

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

－

－

T-11

NSC

1

100.0

75

0.8

1

T-12

NSC

1

100.0

43

0.5

T-13

SM

1

T-15

NSC

T-16

SS

T-17

SM

T
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) (Note 5)
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 (Note 5)
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

149

1.7

1(14)

1(12)

100.0

114

1.3

2

－

－

(Note 3)(Note 3)－－(Note 3)(Note 3)

100.0

144

1.6

1(12)

100.0

114

1.3

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

109

1.2

3

100.0

84

0.9

1

100.0

－

－

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

48

0.5

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

110

1.2

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

1(25)

91.4

420

4.7

T-32

NSC

Unicus Urawamisono(Land)

1

100.0

18

0.2

1

100.0

19

0.2

T-33

NSC

Kitera Plaza Aobadai

－

－

－

－

1(0)

0.0

－

－

19

Area

Property
number

Property
type

O-1

NSC

Blumer Maitamon

50

98.9

O-2

SM

Life Takadono (Land)

1

100.0

N

Property name

O-3

NSC

DCM Kahma MEGADon Quijote UNY
Omihachiman

O-4

NSC

O-5
O

13th fiscal period
14th fiscal period
as of September 30, 2021
as of March 31, 2022
RentalRentalRatio toRatio toNumberrevenue
Numberrevenue
Occupancy
total rental
Occupancy
total rentalof tenants(Millionsof tenants(Millionsrate (%)
revenuerate (%)
revenue(Note 1)
(Note 1)of yen)of yen)(%)(%)(Note 2)
(Note 2)

O-6

Urban StationFront SC
Urban StationFront SC

O-7

SM

O-9

SM

O-10

NSC

O-11

NSC

O-12

NSC

N-1

SS

N-2

NSC

N-4

SS

N-6

NSC

N-7

SM

F-1

SM

F-2

SS

F-3

NSC

F-4

NSC

R-1

NSC

F

R-2

SS

R-3

SS

R-4

NSC

R-5

NSC

R

100.0

5.3

－

－
(Note 3)

99.1

465

5.2

1(29)

98.6

294

3.3

1

100.0

226

2.5

1(41)

Carino Esaka

1(29)

98.6

293

3.3

1

100.0

226

2.5

－

－

COMBOX Komyoike

474(Note 3)

5.2

Hankyu Oasis
Hirakatadeguchi (Note 5)
Life
Nishi-Tengachaya
Million Town
Tsukaguchi (Land)
Habikigaoka
Shopping Center－－(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

2

100.0

Merado Daikai

7

100.0

7

100.0

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

1

100.0

1(42)

98.6

282

1(41)

1

100.0

－

－

(Note 3)(Note 3)

1

100.0
－

－

(Note 3)(Note 3)

DCM Kahma
Nakagawa Tomita(Land)
Valor IchinomiyaNishi
Homecenter Kohnan
Sunadabashi
Resora Obu Shopping
Terrace
Valor Nakashidami(Land)
Sunny Noma
Round1 Stadium
HakataHanmichibashi
Kurume-Nishi
Shopping Center
Kitera Town Fukuoka
Nagahama
Roseo Mito
K’s Denki Aomori
HontenSuper Sports Xebio
Aomori-Chuo
Ashico Town Ashikaga
Yorktown ShindenHigashi
Kasumi Technopark
SakuraNSC

Seiyu Rakuichi Moriya(Land)

R-10

NSC

R-11

SS

L-1

L

L-2

L

L-3

L

L

2

466

R-9

L-6

(Note 3)

100.0

97.8

P-1 Plaza Tenno

L(Note 3)

1

1(39)

NSC

L-5

－

98.3

Blumer HAT Kobe

R-8

L

－

49

100.0

SM

L-4

5.5

2

R-6

－

490

－

－

(Note 3)(Note 3)

177

2.0

－

－

(Note 3)(Note 3)

3.2

－

98.5

283

3.2

1

100.0

－

－

(Note 3)(Note 3)

1

100.0

1

100.0

－

－

(Note 3)(Note 3)

100.0

52

0.6

1(14)

84.2

162

1.8

1(23)

100.0

384

4.3

1

100.0

1

100.0

1(29)

99.2

2

100.0

100.0

52

0.6

4

－

－

－

－

1(23)

100.0

386

4.3

1

100.0

1

100.0

1(29)

99.2

2

100.0

－

271

3.1

－

－

(Note 3)(Note 3)

1.5

1

100.0

1(7)

100.0

133

1

100.0

－

－

(Note 3)Sun Street Hamakita

1(49)

98.6

525

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)1

2.2

(Note 3)

4(Note 3)

195

－

100.0

－

－
(Note 3)(Note 3)

1(Note 3)－(Note 3)－－(Note 3)(Note 3)

274

3.1

－

－

(Note 3)(Note 3)

1.5

1

100.0

1(7)

100.0

133

1

100.0

－

－

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

5.9

1(50)

98.6

528

5.9

1

100.0

－

－

(Note 3)(Note 3)

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)

20

Area

－

Property
number

Property
type

L-7

L

L-8

L

L-9

L

Property name

Chiba-Kita Distribution
Center
Sapporo Shiroishi
Distribution Center
Tenri Distribution
CenterTotal

13th fiscal period
14th fiscal period
as of September 30, 2021
as of March 31, 2022
RentalRentalRatio toRatio toNumberrevenue
Numberrevenue
Occupancy
total rental
Occupancy
total rentalof tenants(Millionsof tenants(Millionsrate (%)
revenuerate (%)
revenue(Note 1)
(Note 1)of yen)of yen)(%)(%)(Note 2)
(Note 2)
1

100.0

1

100.0

－

－

528

99.6

－

－

(Note 3)(Note 3)

8,901

100.0

1

100.0

1

100.0

1

100.0

519

99.2

－

－

(Note 3)(Note 3)

8,956

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 March 31, 2022. Where one lessee leases more than one section of
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: Daikanyama Address Dixsept (30% a quasi-co-ownership interest) was disposed of on April 1, 2021 and (30% a quasi-co-ownership interest) on
October 1, 2021, respectively.
Note 5: Unicus Ina (20% a quasi-co-ownership interest) was disposed of on April 9, 2021, Hankyu Oasis Hirakatadeguchi was disposed of on August 2, 2021,
K’s Denki Shonan-Fujisawa (Land) and Prime Square Jiyugaoka were disposed of on December 27, 2021.

21

(4) Specified Transaction
As of March 31, 2022, the contract amount and fair value of the outstanding transaction under the specified transaction
account of KRR are as follows.
Contract amount (Millions of yen) (Note 1)
Type

Due after one year

Fair value(Millions of yen)
(Note 2) (Note 3)(Note 1)OTC

Interest rate swaps:
Receive floating / pay fixed

87,41081,360163

Total87,41081,360163

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.

22Capital Expenditures(1) Planned Capital Expenditures
The table below shows major capital expenditures for renovations, repairs and other projects that are planned for the 15th
fiscal period ending September 30, 2022. These expenditures are for real estate owned by KRR and real estate in trusts
in which KRR owns trust beneficiary rights. These planned projects may include some expenditure that will be recorded
as expenses rather than capital expenditures for accounting purposes.
Property
number
T-2
O-4
R-1
R-8
T-19
Note:

Property name
MONA
Shin-Urayasu

Location

PurposePlanned amount of capital expenditure(Millions of yen)
Payment for Total amountTotal
the period
already paid

Schedule

From April 2022
145
to September 2022
From April 2022
Blumer HAT Kobe Kobe, Hyogo
Exterior wall repair work83
to September 2022
Rooftop waterproof
From April 2022
Roseo Mito
Mito, Ibaraki
54(HC building) (phase 1)
to August 2022
Hamamatsu,
Spa equipment replacement
From April 2022
P-1 Plaza Tenno
47
Shizuoka
and repair workto September 2022
Yumemachi
Funabashi,
From April 2022
Solar panel installation
33
Narashinodai Mall Chiba
to May 2022
The property expansion at Unicus Ina is not included in the above list because it involves a new acquisition. Furthermore, construction work
related to the conversion at Kitera Plaza Aobadai is not included as well because it is a series of construction work with the acquisition.
Urayasu, Chiba

Air Conditioning equipment
replacement (phase 5)(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 680 million yen. There were also expendituresof 146 million yen that were recorded as repair expenses. In total KRR spent 827 million yen on the projects.
Property
number

Property nameLocation

PurposeSchedule

Capital expenditure(Millions of yen)

T-2

MONA
Shin-Urayasu

Urayasu, Chiba

Air conditioning equipment
replacement (phase 4)

From October 2021
to March 2022

276

L-5

Gyoda
Distribution Center

Gyoda, Saitama

Air conditioning equipment
replacement

From October 2021
to March 2022

66

T-27

Monenosato Mall

Yotsukaido, Chiba

Solar panel installation

From February 2022
to March 2022

65

L-8

Sapporo Shiroishi
Distribution Center

Sapporo, Hokkaido

Elevator renewal

From March 2022
to March 2022

10

L-8

Sapporo Shiroishi
Distribution Center

Sapporo, Hokkaido

Cubicle replacement

From September 2021
to October 2021

10

Others

251

Total

680

(3) Reserved Amount for Long-Term Repairs, Maintenance and Renovation Plans
Not applicable23

Expenses and Liabilities(1) Expenses related to Asset Management
13th fiscal period(From April 1, 2021
to September 30, 2021)(Thousands of yen)
14th fiscal period(From October 1, 2021
to March 31, 2022)

Asset management fees (Note)

873,967

864,525

Asset custody fees

10,182

10,860Administrative service fees

33,93634,822

Directors' compensation

4,500

3,750

Other operating expenses

109,945

133,883

Total

1,032,531

1,047,841

Note: In addition to above, the amount of asset management fees capitalized are 223,401 thousand yen for the 13th fiscal period and 96,235 thousand yen
for the 14th 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 22,706 thousand yen for the 13th fiscal period and 41,766 thousand yen for the 14th fiscal period.

24

(2) Status of Borrowings
Borrowings on a financial institution basis as of March 31, 2022 are as follows.
Classification

LenderShort-Term
Loans
PayableSumitomo Mitsui Banking Corporation

Balance 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)－

750,000－

750,000

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

0.476

Remarks

January 31, 2023

(Note 4)

Unsecured/
Unguaranteed(Note 4)

Unsecured/
Unguaranteed(Note 4)

Unsecured/
Unguaranteed－

750,000－

750,000－

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.（Note 5）

1,600,000－

1,600,000－

1.033 February 10, 2022

Sumitomo Mitsui Banking Corporation

2,750,000－

2,750,000

－

0.480

January 31, 2022

MUFG Bank, Ltd.

1,250,000－－

1,250,000－

August 31, 2022

800,000－

0.603

Mizuho Bank, Ltd.

800,000

MUFG Bank, Ltd. （Note 6）

0.978 February 10, 2022

1,000,000－－

1,000,000

Sumitomo Mitsui Trust Bank, Ltd. （Note 6）

600,000－－

600,000

Mizuho Bank, Ltd. （Note 6）

400,000－－

400,000

Resona Bank, Ltd.（Note 6）

400,000－－

400,000

Mizuho Trust & Banking Co., Ltd.（Note 6）

400,000－－

400,000

MUFG Bank, Ltd.（Note 6）

400,000－－

400,000

1,500,000－－

1,500,000

MUFG Bank, Ltd.（Note 6）

450,000－－

450,000

Resona Bank, Ltd.（Note 6）

200,000－－

200,000

The Musashino Bank, Ltd. （Note 6）

150,000－－

150,000

1,500,000－－

1,500,000

1.013

March 31, 2023－

1,000,000－

1,000,000

0.461

October 31, 2022

1.366

April 16, 2025

1.110

March 31, 2024

1.243

April 16, 2025

Development Bank of Japan Inc.（Note 5）（Note 6）

Development Bank of Japan Inc.（Note 5）（Note 6）
Sumitomo Mitsui Banking Corporation
Sub Total

Long-Term Loans PayableUse

2,600,000

Sub Total
Sumitomo Mitsui Banking Corporation

Current Portion of Long-Term Loans Payable

Payment due date
（Note 3）0.975

March 31, 2023

0.994

March 31, 2023

0.987

March 31, 2023

18,800,000

1,000,000

9,750,000

10,050,000

Sumitomo Mitsui Banking Corporation

4,600,000－－

4,600,000

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.（Note 5）

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.（Note 5）

2,000,000－－

2,000,000

1.049

Mizuho Trust & Banking Co., Ltd.（Note 5）

1,000,000－－

1,000,000

1.049

500,000－－

500,000

1.002

Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.

Resona Bank, Ltd.

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

0.772

January 31, 2027

October 31, 2024

25

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）

MUFG Bank, Ltd.（Note 5）

600,000－－

600,000

0.696

Mizuho Bank, Ltd. （Note 5）

600,000－－

600,000

0.815

Development Bank of Japan Inc.（Note 5）

500,000－－

500,000

0.814

Mizuho Trust & Banking Co., Ltd.（Note 5）

200,000－－

200,000

0.814

MUFG Bank, Ltd.（Note 5）

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.（Note 5）

500,000－－

500,000

1.050

Mizuho Bank, Ltd. （Note 5）

500,000－－

500,000

1.049

Mizuho Trust & Banking Co., Ltd.（Note 5）

300,000－－

300,000

1.050

－

－

500,000

0.670 September 29, 2023－－

1,500,000

0.918 September 30, 2026

MUFG Bank, Ltd.（Note 5）

500,000－－

500,000

0.930

Mizuho Bank, Ltd. （Note 5）

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.（Note 5）

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

Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.（Note 5）

1.035

October 3, 2027

1.000 February 10, 2028

May 31, 2027

Long-Term Loans Payable

March 31, 2025

March 31, 2026

400,000－－

400,000

0.676

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.（Note 5）

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.（Note 5）

500,000－－

500,000

0.550

Resona Bank, Ltd.

300,000－－

300,000

0.644

Development Bank of Japan Inc.（Note 5）

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. （Note 5）

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

Sumitomo Mitsui Trust Bank, Ltd.
MUFG Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.（Note 5）

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

September 29, 2027

Sumitomo Mitsui Banking Corporation

The Musashino Bank, Ltd.

(Note 4)

May 18, 2027

500,000

Sumitomo Mitsui Trust Bank, Ltd.

Remarks

October 31, 2024

1,500,000

MUFG Bank, Ltd.（Note 5）

Use

October 31, 2026

26

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)

Development Bank of Japan Inc.（Note 5）

1,500,000－－

1,500,000

Sumitomo Mitsui Banking Corporation

2,400,000－－

2,400,000

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.

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.（Note 5）

500,000－－

500,000

Aozora Bank, Ltd.

500,000－－

500,000

Mizuho Trust & Banking Co., Ltd.

200,000－－

200,000

1,000,000－－

400,000－－

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.（Note 5）

600,000－－

Development Bank of Japan Inc.（Note 5）

500,000－－

The 77 Bank, Ltd.

500,000－

The Musashino Bank,Ltd.（Note 5）

500,000

Sumitomo Mitsui Banking Corporation

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

0.888

Payment due date
（Note 3）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

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

Aozora Bank, Ltd.

600,000－－

600,000

Mizuho Bank, Ltd.

500,000－－

500,000

MUFG Bank, Ltd.（Note 5）

500,000－－

500,000

SUMITOMO LIFE INSURANCE COMPANY（Note 5）

500,000－－

500,000

Development Bank of Japan Inc.（Note 5）

300,000－－

Mizuho Bank, Ltd.

500,000－－

MUFG Bank, Ltd.（Note 5）

200,000－

Aozora Bank, Ltd.

200,000

The Gunma Bank, Ltd.（Note 5）

500,000

The Bank of Fukuoka, Ltd.
The Nishi-Nippon City Bank, Ltd.

Sumitomo Mitsui Banking Corporation

Long-Term Loans Payable

0.601

April 30, 2028

0.550

April 30, 2028

300,000

0.824

April 30, 2031

500,000

0.357

April 30, 2024－

200,000

0.525

October 31, 2027－－

200,000

0.601

April 30, 2028－－

500,000

0.450 September 30, 2026－

500,000－

500,000－

500,000－

500,000

Shinsei Bank, Ltd.

－

800,000－

800,000

The Yamaguchi Bank, Ltd.

－

700,000－

700,000

The Higo Bank, Ltd.

－

500,000－

500,000

Sumitomo Mitsui Banking Corporation－

2,600,000－

2,600,000

Sumitomo Mitsui Trust Bank, Ltd.

－

600,000－

600,000

Mizuho Trust & Banking Co., Ltd.

－

400,000－

400,000

Aozora Bank, Ltd.

－

400,000－

400,000

Mizuho Bank, Ltd.

－

300,000－

300,000

Resona Bank, Ltd.

－

300,000－

300,000

MUFG Bank, Ltd.（Note 5）－

800,000－

Development Bank of Japan Inc.

－

1,600,000－

93,500,000

10,000,000－

103,500,000

112,300,000

11,750,000

9,750,000

114,300,000

Sub Total
Total(Note 4)

Unsecured/
Unguaranteed

0.535 February 28, 2026

April 30, 2025

MUFG Bank, Ltd.（Note 5）

Remarks

January 31, 2031

0.407

Sumitomo Mitsui Banking Corporation

Use

0.387

March 31, 2026

0.599 September 30, 2029

0.722

January 31, 2029

800,000

0.640

January 31, 2029

1,600,000

0.879

January 31, 2031

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.

27

(3) Status of Investment Corporation Bonds
Balance as of
Balance as ofIssuance date October 1, 2021 March 31, 2022
(Millions of yen) (Millions of yen)
1st Series Unsecured Investment October 31,
1,000
Corporation Bonds
2016
Bonds

Interest
rate(%)

Maturity date

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
7th Series Unsecured Investment
Corporation Bonds(Green Bonds)

April 30,
2020

1,000

1,000

0.400

April 30,2025

January 28,
2022

-

2,000

0.460

January 28,
2032

8,000

9,000

Total
Note 1:
Note 2:
Note 3:Note 4:Note 5:

Redemption
methodUse

Remarks(Note 1)

(Note 4)
Full onmaturity(Note 2)

(Note 5)(Note 3)(Note 4)“Use” is acquisition funds for specified assets, repayment funds for borrowings, etc.
“Use” is repayment funds for borrowings.
For repayment of borrowings that were borrowed for the purpose to acquire the eligible green asset.
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 applicable28

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 name

Trust beneficiaryinterest in real estate

F-4

Trust beneficiaryinterest in real estate

Disposition
Disposition
date

Disposition
price(Millions ofyen)Book value(Millions ofyen)

Gain / loss
(Millions of
yen)

6,000

－

－

－

－

March 1, 2022

2,553

－

－

－

－

March 1, 2022

1,070

－

－

－

－

Acquisition date

Acquisition price(Millions of yen)

Kitera Town Fukuoka
Nagahama

October 1, 2021

T-33

Kitera Plaza Aobadai

Trust beneficiaryinterest in real estate

L-9

Tenri Distribution
CenterTrust beneficiaryinterest in real estate

T-4

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

October 1,
2021

Trust beneficiaryinterest in real estate

T-10

K’s Denki ShonanFujisawa (Land)－－

December 27,
2021

1,993

1,602

3,210
6,360

86

(Note 2)Trust beneficiaryinterest in real estate

T-21

Prime Square Jiyugaoka－

December 27,
2021

－

350

(Note 1)

(Note 2)

2,998

Note 1: The amount equivalent to 30% quasi co-ownership interest is shown.
Note 2: Each of revenue from sale of real estate property is not disclosed as KRR has not obtained the buyer’s consent. The properties were acquired by thesame buyer. The dispositions were negotiated and agreed as impartible deals.

(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

Acquisition

Ownership
form

Property
number

Property nameAcquisition/
disposition date

Acquisition/
disposition
price(Millions ofyen)

Appraisal
value(Millions ofyen)

Appraiser

Evaluation date

(Note 1)

Trust beneficiaryinterest in realestateF-4

Kitera Town
FukuokaNagahama

October 1, 2021

6,000

6,100

Japan Real Estate
Institute

September 1,
2021

Trust beneficiaryinterest in realestate

T-33

Kitera Plaza
AobadaiMarch 1, 2022

2,553

3,610

Daiwa Real EstateAppraisal Co., Ltd.

February 16,
2022

Trust beneficiaryinterest in realestateL-9

Tenri Distribution
CenterMarch 1, 2022

1,070

1,090

Daiwa Real EstateAppraisal Co., Ltd.

February 1,
2022

Trust beneficiaryinterest in realestateT-4

Daikanyama
Address Dixsept
October 1, 2021
(30% quasi coownership interest)

1,993

1,872
(Note 2)

Japan Real Estate
Institute

September 30,
2021

Trust beneficiaryinterest in realestateT-10

K’s Denki ShonanFujisawa (Land)

3,450

The Tanizawa Sōgō
Appraisal Co., Ltd.

September 30,
2021

Disposition

December 27,
2021

6,360
(Note 3)29

Acquisition/disposition

Ownership
form

Trust beneficiaryinterest in realestateProperty
number

T-21

Property namePrime Square
Jiyugaoka

Acquisition/
disposition
Acquisition/
pricedisposition date(Millions ofyen)
December 27,
2021(Note 3)

Appraisal
value(Millions ofyen)

Appraiser

Evaluation date

Daiwa Real EstateAppraisal Co., Ltd.

September 30,
2021(Note 1)2,820

Note 1: “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 2: The amount equivalent to 30% quasi co-ownership interest is shown.
Note 3: Each of revenue from sale of real estate property is not disclosed as KRR has not obtained the buyer’s consent. The properties were acquired by thesame buyer. The dispositions were negotiated and agreed as impartible deals.

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 October 1, 2021 to March 31, 2022, the transactions subject to such investigation were 7
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
Not applicable.
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.

30

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
The 4th General Meeting of Unitholders of the Investment Corporation was held on December 22, 2021.
The main outlines of the matters approved by the unitholders’ general meeting are as follows.
AgendaAgenda No. 1:
Partial Changes to Articles ofIncorporation

Agenda No. 2:
Election of One (1) Executive Director
Agenda No. 3:
Election of One (1) Alternate Executive
Director
Agenda No. 4:
Election of Two (2) Supervisory Directors
Agenda No. 5:
Election of One (1) Alternate Supervisory
Director

Summary
The changes of the Articles of Incorporation are as follows.
(1) A provision is added with regard to the investment unit performance fee, which was introduced with the
purpose of linking the asset management fees received by the Asset Management Company more closelywith unitholder interest. By this addition, negative excess return will be carried over to one businessperiod following the business period when the total return on the Investment Corporation’s investment
units falls below the total shareholder return of the Tokyo Stock Exchange REIT Total Return Indexduring a particular business period and the excess return on the Investment Corporation’s investment
units becomes a negative figure (concerning Attachment of the current Articles of Incorporation).
(2) We will revise the relevant provisions in accordance with the changes to the fair valuation method for the
securities and the rights pertaining to derivative transactions due to the publication of ASBJ Statement
No. 30 “Accounting Standard for Fair Value Measurement” and ASBJ Statement No. 10 “AccountingStandard for Financial Instruments” (including newly established or amended accounting standards,
guidelines, etc. relating thereto) and other reasons (Article 36, Paragraph 1, Item 6 and Item 9 of thecurrent Articles of Incorporation).
(3) In addition to the above, expressions, and words and phrases will be modified and revised for the
preparation of provisions, clarification of the contents of provisions, correction of errors or otherwise.
The agenda was approved as drafted, and Moyuru Watanabe was appointed as Executive Director. The term ofoffice of an Executive Director shall be two years, commencing January 1, 2022.
The agenda was approved as drafted, and Koichiro Nobata was appointed as Alternate Executive Director.
The period during which the resolution on the appointment of one Alternate Executive Director remains
effective shall be until December 31, 2023, when the term of office of the Executive Director under Agenda
No. 2 expires.
The agenda was approved as drafted, and Yoshitoshi Yasu and Akiko Yamakawa were appointed as
Supervisory Directors. The term of office of Supervisory Directors shall be two years commencing January 1,
2022.
The agenda was approved as drafted, and Satoshi Hiyama was appointed as Alternate Supervisory Director.
The period during which the resolution on the appointment of one Alternate Supervisory Director remains
effective shall be until December 31, 2023, when the term of office of the Supervisory Director under Agenda
No. 4 expires.

31ii) Board of Directors
Date

November 10, 2021

AgendaSummary

Conclusion of amemorandum of amendment
to the asset managementagreement

A provision was approved with subject to suspension of approval at the general
meeting of unitholders with regard to the investment unit performance fee, which wasintroduced with the purpose of linking the asset management fees received by the
Asset Management Company more closely with unitholder interest. By this addition,negative excess return will be carried over to one business period following thebusiness period when the total return on the KRR’s investment units falls below thetotal shareholder return of the Tokyo Stock Exchange REIT Total Return Index during
a particular business period and the excess return on KRR’s investment units becomesa negative figure.

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

32

33

34

35

36

Financial Statements(14th Fiscal Period: from October 1, 2021 to March 31, 2022)
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

37

Kenedix Retail REIT Corporation

Balance Sheet
As of March 31, 2022
As of March 31, 2022

As of September 30, 2021
(in thousands of yen)

AssetsCurrent assets
Cash and deposits (Notes 9 and 11)¥11,738,047¥10,026,355

Cash and deposits in trust (Notes 9 and 11)

14,487,445

14,309,262

Operating accounts receivable

174,355

181,400

Prepaid expenses

24,748

153,774-

343,985

Consumption taxes receivable

1,912

6,645

26,426,509

25,021,425

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

764,808

755,598

Accumulated depreciation(93,931)(77,533)

Buildings, net

670,877

678,064

Buildings

Structures
Accumulated depreciation
Structures, net
Land46,777

46,777(6,827)(5,425)39,94941,351

2,956,465

2,956,465

70,054,703

67,921,666

Accumulated depreciation(10,272,226)(9,332,397)

Buildings in trust, net (Note 3)

59,782,476

58,589,268

3,495,870

3,491,894

Buildings in trust

Structures in trust
Accumulated depreciation(705,818)(644,494)

Structures in trust, net (Note 3)

2,790,051

2,847,400

Machinery and equipment in trust

308,571

248,014

Accumulated depreciation(61,564)(58,898)

Machinery and equipment in trust, net

247,007

189,115

183,512

179,449

Accumulated depreciation(86,187)(75,697)

Tools, furniture and fixtures in trust, net

97,325

103,751

176,940,236

176,754,774

Tools, furniture and fixtures in trust

Land in trust (Note 3)
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets (Note 21)
Leasehold right in trust (Note 18)

153,057

7,254

243,677,447

242,167,446

4,292,890

4,296,869

5,695

6,938

4,298,585

4,303,807

10,00010,000

Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Lease and guarantee deposits in trust

60,23660,236Long-term prepaid expenses

998,151

870,267

Long-term deposits

95,680102,079

Other

186,275

3,602

1,350,342

1,046,184

249,326,375

247,517,438

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

42,32729,851

Investment unit issuance costs

38,42953,832

Total deferred assets

80,757

83,683¥275,833,642

272,622,547

Total assets

See accompanying notes to financial statements.

38

As of March 31, 2022

As of September 30, 2021

(in thousands of yen)
Liabilities
Current liabilities
Operating accounts payable¥972,907

Short-term loans payable (Notes 11 and 22)

750,000-

Current portion of investment corporation bonds (Notes 11 and 23)

1,000,000

2,000,000

Current portion of long-term loans payable (Notes 11 and 22)¥815,139

10,050,000

11,800,000

Accounts payable-other603,279

631,767

Accrued expenses

64,26658,268

Income taxes payable

4,045

1,177

296,493

53,674

Advances received

1,413,214

1,420,317

Deposits received

18,70922,202

Accrued consumption taxes-

563

15,172,916

16,803,109

8,000,000

6,000,000

103,500,000

100,500,000

Other
Total current liabilities
Non-current liabilities
Investment corporation bonds (Notes 11 and 23)
Long-term loans payable (Notes 11 and 22)

148,083

148,083

11,586,510

11,789,113

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust (Note 3)
Asset retirement obligations (Note 15)

24,843

24,688Other

46,800304,728

123,306,238

118,766,613

138,479,155

135,569,722

133,103,750

133,103,750

Allowance for temporary difference adjustments (Note 5)(317,378)(285,940)

Total deduction from unitholders' capital(317,378)(285,940)

132,786,372

132,817,810

4,404,711

4,511,908

Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital

Unitholders' capital, net
Surplus
Unappropriated retained earnings

4,404,711

4,511,908

137,191,084

137,329,718

Deferred gains or losses on hedges (Notes 11 and 12)

163,403(276,894)

Total valuation and translation adjustments

163,403(276,894)

Total surplus
Total unitholders' equity
Valuation and translation adjustments

Total net assets (Note 6)

137,354,487

137,052,824

Total liabilities and net assets¥275,833,642¥272,622,547

See accompanying notes to financial statements.

39

Kenedix Retail REIT Corporation

Statement of Income and Retained Earnings
For the period from October 1, 2021 to March 31, 2022
From October 1, 2021

From April 1, 2021

to March 31, 2022

to September 30, 2021

(in thousands of yen)
Operating revenues
Rent revenue-real estate （Note 7)¥7,882,731¥7,829,366

Other lease business revenue (Note 7)

1,074,082

1,072,230

Gain on sales of real estate property (Note 7)

1,297,793

674,513

Total operating revenues

10,254,608

9,576,109

Expenses related to rent business (Note 7)

3,588,893

3,662,177

Loss on sale of real estate property (Note 7)

861,164-

Asset management fees

864,525873,967

Asset custody fees

10,860

10,182Administrative service fees

34,82233,936

Directors' compensation

3,750

4,500

Operating expenses

Other operating expenses

133,883

109,945

Total operating expenses

5,497,899

4,694,708

4,756,708

4,881,401

Interest income

65

58

Gain on forfeiture of unclaimed dividends

376

343

Interest on refund

856

-

1,297

402

Interest expenses

476,880

470,736

Interest expenses on investment corporation bonds

22,38921,540Financing-related expenses

107,871

107,352

3,847

4,340

Operating income
Non-operating income

Total non-operating income
Non-operating expenses

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

15,402

15,402

Total non-operating expenses

626,392

619,373

Ordinary income

4,131,614

4,262,430

Income before income taxes

4,131,614

4,262,430

4,055

1,186

4,055

1,186

Income taxes
Current
Total income taxes

4,127,558

4,261,244

Retained earnings brought forward

277,152

250,664

Unappropriated retained earnings¥4,404,711¥4,511,908

Net income

See accompanying notes to financial statements.

40

Kenedix Retail REIT Corporation

Statement of Changes in Net Assets
For the period from October 1, 2021 to March 31, 2022
Unitholders' equity
Unitholders' capital

Surplus

Deduction from unitholders'
capitalUnitholders'
capitalAllowance
for
temporarydifference
adjustments

Total
deduction
fromunitholders'
capital¥121,183,494¥ (384,773)¥(384,773)

Unitholders'
capital, net

Unappropri
ated
retainedearnings

Total
surplusTotal
unitholders'equity¥4,153,672¥4,153,672¥124,952,393(3,798,814)(3,798,814)(3,798,814)(in thousands of yen)
Balance as of March 31, 2021 (Note 8)¥120,798,721

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

Dividends from surplus
Distributions in excess of earnings
from allowance for temporary
difference adjustments
Reversal of allowance for temporary
difference adjustments

11,920,256

11,920,256(5,361)(5,361)(5,361)

104,194

104,194

104,194

Net income(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 8)¥133,103,750¥ (285,940)¥(285,940)¥132,817,810¥4,511,908¥4,511,908¥137,329,718(4,234,755)(4,234,755)(4,234,755)

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings
from allowance for temporary
difference adjustments(31,437)(31,437)(31,437)

Net income(31,437)
4,127,558

4,127,558

4,127,558

Net changes of items other thanunitholders’ equity
Total changes of items during the period-(31,437)(31,437)(31,437)(107,196)(107,196)(138,634)

Balance as of March 31, 2022 (Note 8)¥133,103,750¥ (317,378)¥(317,378)¥132,786,372¥4,404,711¥4,404,711¥137,191,084

41

Valuation and translation adjustments
Deferred gains orlosses on hedges
Balance as of March 31, 2021 (Note 8)
Changes of items during the period¥(250,501)

Total net assets

Total valuation andtranslation adjustments(in thousands of yen)¥(250,501)¥124,701,892

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 8)¥(276,894)¥(276,894)¥137,052,824(5,361)-

Changes of items during the period
Dividends from surplus
Distributions in excess of earnings fromallowance for temporary difference
adjustments(4,234,755)

Net income
Net changes of items other thanunitholders’ equity

4,127,558(31,437)

440,297

440,297

440,297

Total changes of items during the period

440,297

440,297

301,663

Balance as of March 31, 2022 (Note 8)¥163,403¥163,403¥137,354,487

See accompanying notes to financial statements.

42

Kenedix Retail REIT Corporation

Statement of Cash Flows
For the period from October 1, 2021 to March 31, 2022
From October 1, 2021

From April 1, 2021

to March 31, 2022

to September 30, 2021

(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes¥4,131,614¥4,262,430

Depreciation and amortization

1,190,803

1,167,650

Amortization of investment corporation bond issuance costs

3,847

4,340

Amortization of investment unit issuance costs

15,402

15,402

Interest income

(65)

(58)

Interest expenses

499,270

492,277

Decrease (increase) in operating accounts receivable

7,044(34,523)

Decrease (increase) in consumption taxes receivable

343,985(343,985)

Decrease (increase) in prepaid expenses

129,026(124,170)

Increase (decrease) in operating accounts payable(43,882)

60,978

Increase (decrease) in accounts payable-other(28,915)85,723

Increase (decrease) in accrued consumption taxes

242,818(24,041)

Increase (decrease) in advances received(7,102)

99,530

Increase (decrease) in deposits received
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
Other
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities(3,492)

5,591(127,883)(46,218)

6,399

6,399

7,812,059

3,765,046

3,450(155,716)

14,174,380

9,236,657

6558(493,232)(478,202)(1,187)(882)

13,680,026

8,757,631

Net cash provided by (used in) investing activities(9,028)(8,026)(10,296,807)(23,312,613)

Repayments of tenant leasehold and security deposits in trust(480,882)(262,886)

Proceeds from tenant leasehold and security deposits in trust

278,278

1,151,556

Proceeds from restricted bank deposits in trust

15,00015,000(10,493,439)(22,416,969)

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

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

750,000-

Proceeds from long-term loans payable

11,000,000

14,700,000

Repayments of long-term loans payable(9,750,000)(7,200,000)

Proceeds from issuance of investment corporation bonds

1,983,675-

Redemption of investment corporation bonds(1,000,000)--

11,874,201

Dividends paid

(4,265,387)(3,802,528)

Net cash provided by (used in) financing activities(1,281,712)

15,571,672

Net increase (decrease) in cash and cash equivalents

1,904,874

1,912,335

Proceeds from issuance of investment units

Cash and cash equivalents at the beginning of the period

24,143,118

22,230,783

Cash and cash equivalents at the end of the period (Note 9)¥26,047,993¥24,143,118

See accompanying notes to financial statements.

43

Kenedix Retail REIT Corporation

Notes to Financial Statements
For the period from October 1, 2021 to March 31, 2022

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 March 31, 2022 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 four assets (Unicus Urawamisono (Land) with acquisition price 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-ownershipinterests) with acquisition price of 5,667 million yen). KRR disposed of three assets (Daikanyama Address Dixsept (30% trust beneficiary quasi coownership interests) with sale price of 1,993 million yen (acquisition price was 1,617 million yen), Unicus Ina (20% trust beneficiary quasi co-ownershipinterests) 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)). 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.
KRR acquired three assets (Kitera Town Fukuoka Nagahama with acquisition price of 6,000 million yen, Kitera Plaza Aobadai with acquisition price of
2,553 million yen and Tenri Distribution Center with acquisition price of 1,070 million yen), and disposed of three properties (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), K’s Denki ShonanFujisawa (Land) and Prime Square Jiyugaoka with total sale price of 6,360 million yen (total acquisition price was 5,989 million yen)). For the period ended
March 31, 2022, the portfolio of 66 properties (total acquisition price of 247,291 million yen) as a whole performed well with an overall occupancy ratio of
99.2% as of March 31, 2022.
Furthermore, the portfolio was diversified in terms of tenants as there were 528 and 519 end-tenants as of September 30, 2021 and March 31, 2022 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.

44

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 October 1, 2021
to March 31, 2022
2-70 years

From April 1, 2021
to September 30, 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 ¥106,958 thousand and ¥26,508 thousand as of September
30, 2021 and March 31, 2022, 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

45

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 after deducting the amount paid to anotherparty from the amount that is received as charges for electric power, gas, etc. which is supplied by another concerned party is recognized as revenue.
(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) Non-deductible Consumption Taxes
Non-deductible consumption taxes applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(L) Derivative Financial Instruments
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. COLLATERAL
Assets pledged as collateral and related secured liabilities are as follows:
Assets pledged as collateral

As of March 31, 2022

As of September 30, 2021
(in thousands of yen)

Buildings in trust¥630,987

Structures in trust

19,175

20,3792,709,001

2,709,001¥3,359,164¥3,370,278

Land in trust
Total
Secured liabilities¥640,897

As of March 31, 2022

Tenant leasehold and security deposits in trust
Total

As of September 30, 2021
¥370,075¥392,072¥370,075¥392,072

4. COMMITMENT LINE CONTRACTSKRR has commitment line contracts with the following financial institutions.
As of March 31, 2022

As of September 30, 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

46

5. ALLOWANCE FOR TEMPORARY DIFFERENCE ADJUSTMENTS
The following summarizes allowance for temporary difference adjustments as of March 31, 2022
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)

¥40,522¥35,477¥5,045

276,855

250,463

26,392¥317,378¥285,940¥31,437¥¥

Balance atthe end of
the period-¥40,522-

276,855-¥317,378

Reason forreversal--

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 September 30, 2021
1. Reasons, related assets, initial amount, allowance and reversal
Balance atAllowance
Reversal
the beginningduring theduring theof the period
periodperiod(in thousands of yen)

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¥30,115¥5,361

Deferred gains or losses
on hedges

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

354,657

354,657¥390,135¥384,773

Total¥

Balance atthe end of
the period-¥35,477-(104,194)

250,463¥5,361¥(104,194)¥285,940

Reason forreversal

Changes infair value ofderivativetransactions-

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.

6. 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.

47

7. 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 October 1, 2021 to March 31, 2022 and April 1, 2021 to September
30, 2021 from consist of the following:
From October 1, 2021

From April 1, 2021

to March 31, 2022

to September 30, 2021
(in thousands of yen)

Rental and other operating revenues:
Rent revenue-real estate:
Rental revenues¥6,654,040¥6,572,739

Rental revenues from limited proprietary rights of land

964,805

1,008,625

Common area charges

263,886

248,000

7,882,731

7,829,366

Parking space rental revenues

186,834

197,192

Utility charge reimbursement606,713625,364

Miscellaneous

280,534

249,673

Subtotal

1,074,082

1,072,230

8,956,814

8,901,596

Property management fees and facility management fees

681,763

693,617

Utilities

565,594543,389

Taxes

722,391

729,881

Repairs and maintenance

146,170

247,928

Insurance

16,783

14,642

Subtotal
Other lease business revenue:

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

Trust fees

25,70526,482

Depreciation

1,189,560

1,166,365

Others240,923

239,869

Total property-related expenses

3,588,893

3,662,177

Net operating income from real estate rental business¥5,367,920¥5,239,419

Gain on sales of real estate property:
From October 1, 2021 to March 31, 2022
(in thousands of yen)
Daikanyama Address Dixsept (30.0% quasi coownership interest)
Revenue from sale of real estate property¥1,993,200

Cost of real estate property

1,602,750

Other sales expenses
Gain on sale of real estate property

40,391¥350,057

K’s Denki Shonan-Fujisawa (Land) and Prime
Square Jiyugaoka *Revenue from sale of real estate property¥6,360,000

Cost of real estate property

6,209,308

Other sales expenses
Gain on sale of real estate property

64,118¥86,572* Each of revenue from sale of real estate property is not disclosed as KRR has not obtained the buyer’s consent. The properties were acquired by the same buyer. The
dispositions were negotiated and agreed as impartible deals. Gain on sale of real estate property includes both of gain and loss on sales of real estate property.

48

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

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

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

From April 1, 2021

to March 31, 2022

to September 30, 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

582,177 units

9. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of March 31, 2022 and September 30, 2021:
As of March 31, 2022

As of September 30, 2021

(in thousands of yen)
Cash and deposits¥11,738,047¥10,026,355

Cash and deposits in trust

14,487,445

14,309,262

Restricted bank deposits in trust *(177,500)(192,500)¥26,047,993¥24,143,118

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

49

10. LEASES(As lessee)
Future minimum lease payments under non-cancelable operating leases as of March 31, 2022 and September 30, 2021 are as follows:
As of March 31, 2022

As of September 30, 2021

(in thousands of yen)
Due within 1 year

¥10,500¥10,500

Due after 1 year

146,548

151,798

Total¥157,048¥162,298(As lessor)
Future minimum lease income under the non-cancelable operating leases as of March 31, 2022 and September 30, 2021 are as follows:
As of March 31, 2022

As of September 30, 2021

(in thousands of yen)
Due within 1 year

¥9,999,070¥10,388,223

Due after 1 year

55,719,923

59,556,245

Total¥65,718,993¥69,944,468

11. 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 1 month for loans payable and also have a redemption dateof a maximum of 9 years and 10 months for investment corporation bonds as of March 31, 2022, the end of the 14th 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.

50

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”,"cash and deposits in trust” and “short-term loans payable” are omitted as they are settled with cash and in a short span of time and are therefore similar infair value to the carrying value. Also, “tenant leasehold and security deposits in trust” is omitted as it is immaterial.
As of March 31, 2022
Carrying amount

Estimated fair value

Difference(in thousands of yen)
(1) Current portion of investment corporation bonds¥1,000,000¥999,600(2) Current portion of long-term loans payable

10,050,000

10,083,678

33,678(3) Investment corporation bonds

8,000,000

7,930,500(69,500)

103,500,000

103,615,372

115,372

122,550,000

122,629,151

79,151¥163,403¥163,403(4) Long-term loans payable
Total
Derivative transactions¥ (400)¥-(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 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.
*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.)51

Derivative transactions
Please refer to Note “12. DERIVATIVE TRANSACTIONS”.
*2: Redemption of long-term loans payable and other interest-bearing debt scheduled to be due after the balance sheet date
As of March 31, 2022
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¥1,000,000

¥

-

¥

-

¥1,000,000¥1,000,000¥6,000,000

10,050,000

7,500,000

9,310,000

19,090,000

19,960,000

47,640,000¥11,050,000¥7,500,000¥9,310,000¥20,090,000¥20,960,000¥53,640,000

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 September 30, 2021
Due after 5 years(in thousands of yen)
Investment corporation bonds¥2,000,000¥-¥1,000,000¥-¥5,000,000-

Long-term loans payable

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

Total

-

¥

12. DERIVATIVE TRANSACTIONS
The contract amount and the fair value of interest-rate swap transactions as of March 31, 2022 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¥66,410,000¥64,360,000

21,000,000

17,000,000¥87,410,000¥81,360,000

Fair value(in thousands of yen)

¥163,403

Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions*¥163,403*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 “11. 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 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

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

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

Calculation method for
applicable fair value
Based on the amountprovided by counterparty
financial institutions

52

Special
treatment ofinterest-rate
swaps
Total

Interest rate swap
transaction:
Receive/floating andpay/fixed

Long-term loans
payable26,400,000

21,000,000¥86,610,000¥79,160,000*¥(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 “11. 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.）

13. RELATED PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other14th Fiscal Period (October 1, 2021 to March 31, 2022) and 13th Fiscal Period (April 1, 2021 to September 30, 2021) : Not applicable
2．Affiliated companies and other14th Fiscal Period (October 1, 2021 to March 31, 2022) and 13th Fiscal Period (April 1, 2021 to September 30, 2021) : Not applicable
3．Fellow subsidiary companies and other14th Fiscal Period (October 1, 2021 to March 31, 2022) and 13th Fiscal Period (April 1, 2021 to September 30, 2021) : Not applicable
4．Directors, major individual unitholders and other14th Fiscal Period (October 1, 2021 to March 31, 2022) and 13th Fiscal Period (April 1, 2021 to September 30, 2021) : Not applicable

14. 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 ¥4,127 million and ¥4,266 million for the periods ended March 31, 2022 and September 30, 2021, respectively, thedistributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on KRR’s income were 0.10% and 0.02%
for the periods ended March 31, 2022 and September 30, 2021, respectively. The following table summarizes the significant differences between the statutory
tax rate and the effective tax rate:
As of March 31, 2022

As of September 30, 2021

Statutory tax rate

31.46%

31.46%

Deductible cash distributions(31.43)(31.49)Others0.07

0.05

Effective tax rate

0.10%

0.02%

The significant components of deferred tax assets and liabilities:
As of March 31, 2022

As of September 30, 2021

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

¥

252

¥

27

Amortization of leasehold right in trust

17,94016,688Depreciation

6,457

6,007

Asset retirement obligations

7,815

7,767

-

87,110Subtotal deferred tax assets

32,466

117,601

Valuation allowance(32,466)(117,601)

Deferred gains or losses on hedges

Total deferred tax assets

¥

-

¥

-

53

15. 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 October 1, 2021

From April 1, 2021

to March 31, 2022

to September 30, 2021

(in thousands of yen)
Balance at the beginning of the period
Accretion adjustment
Balance at the end of the period¥24,688¥24,534

155

154¥24,843¥24,688

16. REVENUE RECOGNITION
1. Disaggregation of revenue from contracts with customers
14th Fiscal Period (From October 1, 2021 to March 31, 2022)
Revenues generated from contracts

Sales to external customers

with customers *1(in thousands of yen)
Revenue from sale of real estate property¥6,360,000

Utility charge reimbursements*2¥86,572

606,713606,713

Other-

9,561,322

Total¥6,966,713¥10,254,608*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.
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

54

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
14th Fiscal Period (October 1, 2021 to March 31, 2022) and 13th Fiscal Period (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 alongwith 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.
14th Fiscal Period (From October 1, 2021 to March 31, 2022)(1) Balance of contract assets and contract liabilities, etc.
From October 1, 2021
to March 31, 2022
(in thousands of yen)
Receivables generated from contracts with customers¥138,197(balance at beginning of fiscal period)
Receivables generated from contracts with customers

124,784(balance at end of fiscal period)
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.
13th Fiscal Period (From April 1, 2021 to September 30, 2021)(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
55

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.

17. SEGMENT INFORMATION
Segment information for the periods from October 1, 2021 to March 31, 2022 and April 1, 2021 to September 30, 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.

18. 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 October 1, 2021

From April 1, 2021

to March 31, 2022

to September 30, 2021
(in thousands of yen)Book value
Balance at the beginning of the period
Changes during the period
Balance at the end of the period
Fair value at the end of the period¥246,469,699¥228,086,747

1,505,042

18,382,952

247,974,742

246,469,699¥266,837,000¥264,092,200

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 March 31, 2022, the principal increase
was the acquisition of real estate trust beneficiary interest in 3 properties totaling 9,680,298 thousand yen and the principal decrease was the salesof real estate trust beneficiary interests in 3 properties totaling 7,812,059 thousand yen and depreciation of 1,189,405 thousand yen and 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 theprincipal decrease was the sales of real estate trust beneficiary interests in 3 properties totaling 3,765,046 thousand yen and depreciation of
1,167,191 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%

56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 profit or loss for the periods ended March 31, 2022 and September 30, 2021 concerning investment and rental properties is included in Note “7.
BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REAL ESTATEPROPERTY.”

19. PER UNIT INFORMATION
From October 1, 2021

From April 1, 2021

to March 31, 2022

to September 30, 2021

Net asset value per unit
Net income per unit

¥235,932¥235,414¥7,089¥7,384

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 March 31, 2022 (582,177 units) and during the fiscal period ended September 30, 2021 (577,064 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 October 1, 2021

From April 1, 2021

to March 31, 2022

to September 30, 2021

¥4,127,558¥4,261,244--¥4,127,558¥4,261,244

582,177

577,064

20. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable.

5721. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, plant and equipment and intangible assets consist of the following as of March 31, 2022
Type of asset

Balance atthebeginning of
the period

Increaseduring theperiodBuildings¥755,598¥9,210

Structures

46,777
2,956,465

Decreaseduring theperiodBalance atthe end of
the period

Depreciation
for the periodNetbalance atthe end of
the period

Depreciation
Accumulated
depreciation

Remarks(in thousands of yen)

Land

Property,plant andequipment-¥764,808¥93,931¥16,397¥670,877--

46,777

6,827

1,402

39,949--2,956,465--

2,956,465

Subtotal

3,758,841

9,210

-

3,768,051

100,759

17,7993,667,291

Buildings in trust

67,921,666

2,947,995

814,958

70,054,703

10,272,226

1,081,548

59,782,476

Structures in trust

3,491,894

19,175

15,1993,495,870

705,818

65,0232,790,051

Machinery andequipment in trust

248,01465,647

5,089

308,571

61,564

7,180

247,007

Tools, furniture andfixtures in trust

179,449

10,043

5,980

183,512

86,187

13,87597,325

176,754,774

7,309,613

7,124,151

176,940,236--

176,940,236

7,254

146,880

1,076

153,057--

153,057

248,603,053

10,499,354

7,966,456

251,135,951

11,125,796

1,167,627

240,010,155

252,361,894

10,508,564

7,966,456

254,904,002

11,226,555

1,185,427

243,677,447

4,349,916--

4,349,916

57,026

3,978

4,292,890--

16,71911,024

1,242

5,695

-

¥4,366,636¥68,050¥5,211¥4,298,585

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

16,719Total¥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 September 30, 2021:
Type of asset

Balance atthebeginning of
the period

Increaseduring theperiodBuildings¥746,570¥9,028Decreaseduring 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¥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

Construction inprogress in trust
Subtotal
Total

Total

¥755,598

46,777

Land in trust

Intangible
assets-2,956,465

LandProperty,plant andequipment¥

Leasehold right in
trust
Other

¥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.

5822. SHORT-TERM LOANS PAYABLE AND LONG-TERM LOANS PAYABLE
The following summarizes short-term loans payable and long-term loans payable outstanding as of March 31, 2022:
Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 2）
（Note 3）

Balance atthe end of
the period(in thousands of yen)
ShortTerm
Loans
PayableSumitomo Mitsui
Banking
Corporation
Sub Total

Remarks

January 31,
2023(Note 5)

Unsecured/
Unguaranteed(Note 5)

Unsecured/
Nonguaranteed(%)

750,000-

750,000-

750,000-

750,000

Sumitomo Mitsui
Banking
Corporation

2,600,000-

2,600,000-

MUFG Bank, Ltd.

800,000-

800,000-

600,000-

600,000-

400,000-

400,000-

400,000-

400,000-

300,000-

300,000-

300,000-

300,000-

1,600,000-

1,600,000

-

1.033

February 10,2022

2,750,000-

2,750,000

-

0.480

January 31,
2022

1,250,000-

1,250,000

800,000-

1,000,000--

1,000,000

600,000--

600,000

400,000--

400,000

400,000--

400,000

Mizuho Trust &Banking Co., Ltd.
（Note 7）400,000--

400,000

MUFG Bank, Ltd.
（Note 7）400,000--

400,000

1,500,000--

1,500,000

450,000--

450,000

200,000--

200,000

150,000--

150,000

1,500,000--

1,500,000

1.013

March 31,2023-

1,000,000-

1,000,000

0.461

October 31,
2022

Sub Total

18,800,000

1,000,000

9,750,000

10,050,000

Sumitomo Mitsui
Banking
Corporation

4,600,000--

4,600,000

1.366

April 16,2025

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

Development
Bank of Japan
Inc.（Note 6）（Note 7）
MUFG Bank, Ltd.
（Note 7）
Resona Bank, Ltd.
（Note 7）The Musashino
Bank, Ltd. （Note7）
Development
Bank of Japan
Inc.(Note
6)(Note 7)
Sumitomo Mitsui
Banking
Corporation

Long-Term

Use-

Sumitomo Mitsui
Trust Bank, Ltd.
Aozora Bank, Ltd.

Current
Portion ofLong-Term
Loans
PayablePayment due
date（Note 4）800,000

0.476

0.978

0.603

0.975

0.994

0.987

February 10,2022

August 31,
2022

March 31,2023

March 31,2023

March 31,2023

Unsecured/
Nonguaranteed59Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Loans
PayablePayment due
date（Note 4）3,000,000--

3,000,000

Mizuho Bank, Ltd.

1,150,000
1,000,000-

1,150,000

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

700,000--

700,000

650,000--

650,000

500,000--

500,000

1,500,000--

1,500,000

MUFG Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Ltd.
Development
Bank of Japan
Inc.(Note 6)
Sumitomo Mitsui
Banking
Corporation

400,000--

400,000

450,000--

450,000

0.803

September
30, 2024

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

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

400,000-

400,000

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

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

1,500,000

Use

Remarks(%)

Sumitomo Mitsui
Banking
Corporation

MUFG Bank, Ltd.

Long-Term
Loans
PayableAverageinterest rate
（Note 2）
（Note 3）1,000,000(Note 5)

1.110

1.243

0.772

March 31,2024

April 16,2025

January 31,
2027

October 31,
2024

300,000

0.918

October 31,
2024

May 18,2027

September
29, 2023
September
30, 2026(Note 5)

Unsecured/
Nonguaranteed60

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Trust Bank, Ltd.
Sumitomo Mitsui
Banking
Corporation
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking
Corporation
Sumitomo Mitsui
Banking
Corporation
Sumitomo Mitsui
Banking
Corporation
Mizuho Bank, Ltd.
The Bank ofFukuoka, Ltd.
Sumitomo Mitsui
Banking
Corporation
MUFG Bank, Ltd.
(Note 6)
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
NipponLife
Insurance
Company
Sumitomo Mitsui
Trust Bank, Ltd.
Resona Bank, Ltd.

-

500,000

0.930

1,500,000--

1,500,000

1.029

1,500,000--

1,500,000

1.100

September
29, 2028

500,000--

500,000

1.035

October 3,
2027

1,200,000--

1,200,000

1.000

February 10,2028

900,000--

900,000

0.988

April 30,2027

2,600,000--

2,600,000

0.985

April 30,2027

2,000,000--

2,000,000

0.902

April 30,2026

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

500,000-

500,000

0.676

500,000

0.726

400,000

0.726

Mizuho Bank, Ltd.

400,000-

Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)-

500,000

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

400,000--

400,000

0.676

1,850,000--

1,850,000

0.910

1,300,000--

1,300,000

0.860

Resona Bank, Ltd.

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, Ltd.

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

300,000--

300,000

0.644

Mizuho Trust &Banking Co., Ltd.
(Note 6)
Resona Bank, Ltd.

Payment due
date（Note 4）500,000

Aozora Bank, Ltd.

Mizuho Trust &Banking Co., Ltd.
(Note 6)
MUFG Bank, Ltd.
(Note 6)
Sumitomo Mitsui
Banking
Corporation
Mizuho Bank, Ltd.
Long-term
loans
payableAverageinterest rate
（Note 2）
（Note 3）September
29, 2027

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

61

Classification
LenderBalance at the
beginning of theperiodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Development
Bank of Japan Inc.
(Note 6)
The Gunma Bank,Ltd.
The Musashino
Bank, Ltd.(Note 6)
Sumitomo Mitsui
Banking
Corporation

Payment due
date（Note 4）-500,000

0.830

400,000--

400,000

0.498

400,000--

400,000

0.478

700,000--

700,000

0.758

September
30, 2028

Aozora Bank, Ltd.

450,000--

450,000

0.725

January 31,
2029

Sumitomo Mitsui
Banking
Corporation

3,000,000--

3,000,000

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

700,000--

700,000

500,000--

500,000

0.809

January 31,
2030

Resona Bank, Ltd.

450,000
400,000-

450,000

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

-1,500,000--

1,500,000

0.888January 31,2031

2,400,000--

2,400,000

1,600,000--

1,600,000

550,000--

550,000

500,000-

500,000

0.535

February 28,
2026

0.407

April 30,
2025

0.400

April 30,
2025

0.461

April 30,
2026

Unsecured/
Nonguaranteed

400,000

Aozora Bank, Ltd.

500,000

Mizuho Bank, Ltd.

350,000
300,000--

300,000

600,000--

600,000

500,000-

500,000

400,000-

500,000--

500,000

500,000--

500,000

200,000--

200,000

1,000,000--

1,000,000

0.490

October 31,
2026

400,000--

400,000

0.475

October 31,
2026

1,600,000--

1,600,000

Mizuho Bank, Ltd.
Sumitomo Mitsui
Trust Bank, Ltd.
Resona Bank, Ltd.
MUFG Bank, Ltd.
(Note 6)Development
Bank of Japan Inc.
(Note 6)400,000--

400,000

0.548

300,000--

October 31,
2027

300,000

300,000--

300,000

600,000--

600,000

0.525

October 31,
2027

500,000--

500,000

0.856

April 30,
2031

The 77 Bank, Ltd.

500,000--

500,000

0.426

-

-

500,000

500,000(Note 5)January 31,
2025
January 31,
2025-

The Musashino
Bank,Ltd. (Note 6)

Remarks

October 31,
2029-

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

Use

(%)

500,000

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

Long-term
loans
payableAverageinterest rate
（Note 2）
（Note 3）500,000
350,000

400,000

0.350

April 30,
2026
April 30,
2026

62

Classification

Balance at the
beginning of theperiodLenderIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
the period(in thousands of yen)
Sumitomo Mitsui
Banking
Corporation
Sumitomo Mitsui
Trust Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.

Averageinterest rate
（Note 2）
（Note 3）800,000--

800,000

700,000--

700,000

600,000--

600,000

600,000--

600,000

500,000
500,000--

500,000

0.601

April 30,
2028

0.550

April 30,
2028

April 30,
2031

-

-

500,000

300,000--

300,000

0.824

Mizuho Bank, Ltd.

500,000--

500,000

0.357

MUFG Bank, Ltd.
(Note 6)200,000--

200,000

0.525

Aozora Bank, Ltd.

200,000--

200,000

0.601

The Gunma Bank,
Ltd. (Note 6)

500,000--

500,000

0.450-

500,000-

500,000

The Nishi-Nippon
City Bank, Ltd.
Shinsei Bank, Ltd.

-

500,000-

500,000-

800,000-

700,000-

800,000

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

-

500,000-

500,000-

2,600,000-

2,600,000-

600,000-

600,000-

400,000-

400,000

Aozora Bank, Ltd.

-

400,000

400,000

300,000--

800,000-

800,000

0.640-

1,600,000-

1,600,000

0.879

93,500,000

10,000,000-

103,500,000¥ 112,300,000¥11,750,000¥ 9,750,000¥114,300,000

Mizuho Bank, Ltd.
Resona Bank, Ltd.
MUFG Bank, Ltd.
(Note 6)Development
Bank of Japan Inc.
Sub Total
Total

300,000

Remarks

500,000

500,000

of

Use

(%)

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
(Note 6)
SUMITOMO LIFE
INSURANCECOMPANY (Note6)
Development
Bank of Japan Inc.
(Note 6)The Bank
Fukuoka, Ltd.

Payment due
date（Note 4）700,000

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

0.387

March 31,
2026

0.599

September
30, 2029

0.722

January 31,
2029

300,000
300,000
January 31,
2029
January 31,
2031

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¥ 9,310,000

Due after 3 years
through 4 years（in thousands yen）
¥ 19,090,000

Due after 4 years
through 5 years¥ 19,960,000

Due after 5 years¥ 47,640,000

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.
63

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.

64

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

Current
portion of
long-term
loans
payableLong-term
loans
payable0.550

September
30, 2021

0.485

April 27,2021-

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-

0.477

2,750,000--

2,750,000

0.484

2,600,000--

2,600,000

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, LimitedAozora Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.

800,000--

800,000

600,000--

600,000

400,000--

400,000

400,000--

400,000

300,000--

300,000

Resona Bank, Limited
Development Bank ofJapan Inc. (Note 6)
MUFG Bank, Ltd.
(Note 7)
Mizuho Bank, Ltd.
(Note 7)
Subtotal

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

MUFG Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited

1,000,000--

1,000,000

600,000--

600,000

Mizuho Bank, Ltd.

400,000--

400,000

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

400,000--

400,000

400,000--

400,000

400,000--

400,000

1,500,000--

1,500,000

450,000--

450,000

200,000--

200,000

150,000--

150,000

1,500,000--

1,500,000

3,000,000--

3,000,000

Mizuho Bank, Ltd.

1,150,000--

1,150,000

MUFG Bank, Ltd.

1,000,000--

1,000,000

Sumitomo Mitsui
Banking Corporation

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

Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(Note 5)

Unsecured/
Nonguaranteed(%)

500,000

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
Sumitomo Mitsui
Banking Corporation

Payment due
date（Note 4）

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
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
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, LimitedAozora Bank, Ltd.
Resona Bank, Limited

Long-term
loans
payableMUFG 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
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

Averageinterest rate
（Note 2）
（Note 3）

Payment due
date（Note 4）Use

Remarks(Note 5)

Unsecured/
Nonguaranteed(%)

700,000--

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

400,000--

400,000

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

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

Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Nippon Life Insurance
Company
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited

500,000--

500,000

0.999

500,000--

500,000

0.999

700,000--

700,000

0.913

700,000--

700,000

0.726

500,000--

500,000

0.676

Aozora Bank, Ltd.

500,000--

500,000

0.726

Mizuho Bank, Ltd.

400,000--

400,000

0.726

400,000--

400,000

0.676

1,850,000--

1,850,000

0.910

MUFG Bank, Ltd.

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

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

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

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)Long-term

Averageinterest rate
（Note 2）
（Note 3）

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

--2,400,000

1,600,000--

1,600,000

550,000--

550,000

500,000--

500,000

Aozora Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

350,000--

350,000

300,000--

300,000-

600,000-

600,000

Mizuho Bank, Ltd.

-

500,000-

500,000

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

400,000-

500,000-

500,000

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

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

300,000-

300,000

loans
payable-600,000-

600,000

0.525-

500,000-

500,000

0.856

The 77 Bank, Ltd.

-

500,000-

500,000

0.426-

500,000-

500,000

0.350-

800,000-

800,000-

700,000-

700,000-

600,000-

600,000

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

Sumitomo Mitsui Trust
Bank, Ltd.

The Musashino
Bank,Ltd.（Note6）
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.

Total

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

October 31,
2026
October 31,
2026

October 31,
2027

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

0.601

April 30,
2028

0.550

April 30,2028-

500,000-

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

85,800,000

14,700,000-

100,500,000¥ 104,800,000¥ 14,700,000¥ 7,200,000¥112,300,000

Subtotal

Payment due
date（Note 4）(%)

2,400,000

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

Long-term

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

23. INVESTMENT CORPORATION BONDS
Outstanding investment corporation bonds as of March 31, 2022 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)Seventh Series Unsecured
Investment Corporation
Bonds (Green Bonds) (Note
1)
Total

Date of issue

Balance atthe beginningof period

October 31,
2016

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

¥1,000,000¥1,000,000¥

Interest rate

Repayment date

Use

Remarks

(%)

-

0.200

October 29,
2021

October 31,
2016

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

January 28,
2022

-

-

2,000,000

0.460

January
28, 2032¥8,000,000¥1,000,000¥9,000,000(Note3)

Unsecured(Note4)(Note5)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: Investment corporation bonds were used as the funds for repayment of debts that were borrowed for the purpose to acquire the eligible green assets.
Note 6: 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¥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¥1,000,000

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(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¥-

Interest rate

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¥

Remarks(%)

October 31,
2016¥8,000,000

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.

70

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-¥1,000,000

Due after 4 years
through 5 years¥-

24. DISTRIBUTIONS
From October 1, 2021
to March 31, 2022

I.. Retained earnings at the end of period

From April 1, 2021
to September 30, 2021

¥4,404,711,898¥4,511,908,436

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

Ⅲ.Incorporation into unitholders’ capital¥ 276,855,799¥-

Of which, reversal of allowance fortemporary difference adjustments¥ 276,855,799¥-

Ⅳ. Total distributions¥4,127,634,930¥4,266,193,056

Distributions per unit

¥7,090¥7,328¥4,127,634,930¥4,234,755,498¥7,090¥7,274

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

Method of calculating distribution amount¥-¥31,437,558

¥

-

¥54

¥221,169¥277,152,938

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 ¥4,127,634,930 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).
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 39-2 of
KRR’s Articles of Incorporation. In the14th fiscal period,
KRR has decided not to distribute cash in excess of
distributable profit.

In accordance with the policy described in Article 39-1
of its Articles of Incorporation, KRR determines that theamount of distribution shall exceed the 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 .

71

14th Fiscal Period (October 1, 2021 to March 31, 2022)
1. Reasons, related assets and 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¥276,855

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.

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 onhedgesAllowance for temporary
difference adjustments

ReasonAmortization 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¥26,392

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.

72