Interim Financial Results
for the 1st Financial period ending Sep. 2015
May 26, 2015

Contents
Section 1

The first J-REIT specialized in neighborhood, community andother shopping centers for daily needs

3

Section 2

Performance since IPO and summary of interim financial
results for the fiscal period ending Sep. 30, 2015
Section 3

Our growth strategies
Appendix1

Key characteristics of Kenedix Retail REIT Corporation (KRR)
Appendix2

Detailed financial results and portfolio information

10

21

29

42

2

Section 1

The first J-REIT specialized in neighborhood, community and other shopping
centers for daily needs

IPO Highlights
We are the first J-REIT specialized in neighborhood, communityand other shopping centers for daily needs

IPO Summary

Media reports

Type of offering

Global offering
Domestic offering and international offering(Reg.S+144A)…The deal was marketed successfully to investors as the IPO of thefirst J-REIT specialized in neighborhood, community and othershopping centers that cater to the day-to-day needs of local
area customers.

Securities code

3453

Total offering

260,000 units(including over-allotment of 5,750 units)

Kenedix Retail REIT (KRR) IPO was priced today. The tranche split was
initially set at 70:30 between domestic and international offerings, with thedomestic tranche to be allocated 80% to retail investors and 20% toinstitutional investors.

Offering amount

JPY59.8 billion

Issue price

JPY230,000

Listing dateTranche split

February 10, 2015
Domestic 66.5%: International 33.5%(excluding the units allocated to Kenedix, Inc.)

However, in response to strong demand from institutional investors in thebook-building process, 5% of the domestic retail tranche was shifted to thedomestic and overseas institutional investors.
The final tranche split turned out to be 51:15.5:33.5 among domestic retailinvestors, domestic institutional investors and overseas investors. "Theoffering was oversubscribed by more than 20 times, with the domestic
retail tranche nearly 17 times, the domestic institutional tranche morethan 11 times and the overseas tranche more than 30 times
oversubscribed." (informed sources)
Kenedix Retail REIT, as a J-REIT managed by Kenedix Group, attracted alarge number of investors from "every direction" by emphasizing theunique advantages of its portfolio composition and the asset class it invests inand also structuring the IPO as a global offering. (the same informed sources)….(Abridged)(Data provided by Thomson Reuters DealWatch)

4

The first J-REIT Specialized in Neighborhood, Communityand other Shopping Centers for Daily Needs
 We seek to invest primarily in neighborhood, community and other shopping centers located in the four
major metropolitan areas (note 1), that cater to the day-to-day needs of local area customers and have stabledemand from retailers and customers, in order to provide stable investment returns over the long term
Trends in the retail market
Consumption led by the elderly andstable demand for daily necessities

Stable demand fordaily necessities
Domestic consumption
led by the elderly
Shrinking retail trade area due to aging
population and concentrated populationin the four major metropolitan areas

Government promotionof "Compact City"

Large

Decrease in size ofretail properties

Decrease in size of retail properties andincrease in specialty stores

Increase in the market share of
specialty supermarket
The majority of portfolio properties ofother listed retail-focused J-REITs

Small

Property size (*)

Our core investment targets

Large-scale suburban retail properties• RSC (Regional Shopping Center)(Note 2)

Neighborhood, community and other shopping centers fordaily needs✔ Trade area:
Approx. 1 – 10 km✔ Customer traffic:
StrongCommunity
Shopping
Centers

Specialty
StoresStand-alone
stores thatprimarily provide
groceries

Larger shopping
centers than
NSC, with asupermarket as
an anchor or coretenantShopping centers in
the immediate
vicinity of an urban
publictransportation
stationSpecialty storessuch as drug stores,
convenience stores,
health clubs orelectronic appliancestorestrade area

trade area

trade area

trade area

SM

CSC

Neighborhood
Shopping
Centers

Supermarkets

Shopping centerswith a supermarket
as an anchor orcore tenant

trade area

3 – 5 km

✔ Tenants:
Various specialty stores

Urban
StationFront SC

NSC

3 km

5 – 10 km• GMS (General Merchandise Store)(Note 3) on astand-alone basis• Outlet malls

3 -10 kmSS

Urban retail properties featuring• High-end brand shops

1 – 10 km（*）We generally invest in properties with acquisition prices(Note 4) of JPY500 mn or higher.

High

Frequency of customer visits

Low

Note 1: "Four major metropolitan areas" refers to the Tokyo metropolitan area (Tokyo, Kanagawa, Saitama and Chiba prefectures), the Greater Osaka area (Osaka, Kyoto, Hyogo, Nara and Shiga prefectures), the Greater Nagoya area (Aichi, Gifu and Mie prefectures) and the
Fukuoka area (Fukuoka prefecture).
Note 2: “RSC (Regional Shopping Center)” refers generally to a large-scale shopping center (typically larger than CSC) with 100 or more tenants and with a retail trade area of a 10 or more kilometer radius.
Note 3: “GMS (General Merchandise Store)” refers to a retail property which provides groceries and daily necessities as well as a wide selection of daily goods such as clothing, electronics and household furniture.
Note 4: "Acquisition prices" refers to the purchase prices of the properties, excluding consumption tax and other expenses.

5Characteristics of Our Portfolio (1)- Our initial portfolio at listing + Blumer HAT Kobe-

Portfolio composed of retail properties focused on daily needs
Portfolio breakdownby asset type(Note1)
SS
8.9%

Retail properties
focused on daily needs

SM
4.6%

CSC
16.2%

100%
NSC
49.4%

Urban StationFront Shopping
Centers
21.0%

Total acquisition price

JPY91.8 bn

Total appraisal value

JPY93.5 bn

Number of properties

19

Portfolio Appraisal NOI yield(Note 2)
Average property age(Note 3)
Weighted average occupancy rate(Note 4)
Number of tenants(Note 4)
Average remaining lease term(Note 5)

Portfolio that seeks both stability and growth potential

Generate stable cash flow while seeking profitability growth

Stability

GrowthStabletenant operations

Significant
external growth
opportunities

High frequency
of customer visits

Potential rent
increase fromconsumption growthDiversified portfolio

Potential rent increase
through tenantreshuffling

5.4%
10.5 years
99.4%

322
8.3 years

Note 1: Land-only properties are categorized based on the type of retail facilities above-ground. Data as of Apr. 16, 2015.
Note 2: "Portfolio Appraisal NOI yield" is the weighted average NOI yield based on acquisition prices of properties. The figure is rounded to the 1 st decimal place.
Note 3: "Average property age" is the weighted (based on acquisition price) average age of the as of Mar. 31, 2015, with Blumer HAT Kobe included in the calculation.
Note 4: As of Mar. 31, 2015, with Blumer HAT Kobe included in the calculation.
Note 5: "Average remaining lease term" is the weighted average lease term remaining as of Mar. 31, 2015, based on annual fixed rent as of such date. The figure is rounded to the 1 st decimal place.

6

Characteristics of Our Portfolio (2)- Our initial portfolio at listing + Blumer HAT KobeGenerating stable cash flow through portfolio diversification
Property distribution

Location
Tokureishi andother areas
13.1%

Fululu Garden
Yachiyo
16.2%

Other
18.0%

UnicusYoshikawa
3.9%
Yorktown
Kita-Kaname
4.4%

Tenants

Blumer
HAT Kobe
12.0%

Fukuoka area
1.6%
Greater Nagoya
area
5.9%

A
10.1%

Roseo Mito
10.5%

Daikanyama
Address Dixsept
5.9%
Passaggio
Nishiarai
6.4%

MONA ShinUrayasu
8.8%

Health clubs
3.8%

B
4.2%

Four major
metropolitan
四大都市圏
areas

Tokyo
metropolitan
area
53.0%

D
3.8%

Top 10tenants
Other
59.7%

E
3.6%

40.3%

F
3.5%

Greater Osaka
area
26.4%

G
3.1%

BlumerMaitamon
9.1%

J
2.5%

I
2.7%

H
2.7%

20 years or
more
2.8%
15 to lessthan 20 years
6.7%

Consumerelectronics
7.4%

Less than 2
years
13.6%

Clothing
and accessories
9.4%

Hardware Stores
10.1%

Other
12.6%

Note 1:
Note 2:
Note 3:Note 4:Note 5:a.(Note 2)
21.1%

d.(Note 5)
7.4%c.(Note 4)
4.2%

2 to less than
5 years
23.5%

5 to less than
10 years
16.2%

Other productsale shops
13.0%

GMS
10.1%

Tenants with e-commerce
resistant business

Other
0.2%

Regular building
lease
28.3%
10 to lessthan 15 years
37.2%

ServiceBusiness
13.7%

E-commerce resistance

Lease types
Commercial
fixed-term land
lease
5.2%

Food andbeverages
18.9%

Restaurants
4.9%

Lease types that secure stability and enable growth potential
Remaining lease term

Otherその他
4.8%

Sporting goods
3.9%

C
4.0%

85.1%%
86.9

Unicus Ina
4.8%

Tenant categories

E-commerce
resistant

87.4%
Fixed-termbuilding
lease
66.4%

b.(Note 3)
54.7%
a: Businesses difficult to be replaced by e-commerce
b: Businesses where customers show preference in purchasing products at
physical stores
c: P&D Consulting Co., Ltd.
d: Businesses that require physical visits to stores or handle products that
consumers highly desire to evaluate in person

Property distribution and location data are by acquisition price, tenants, tenant categories, remaining lease term and lease type are by annual fixed rent determined in the lease contract.
"a" refers to businesses including medical services, hair salons, photography studios, for-profit schools and study centers, restaurants and health clubs that cannot be replaced by e-commerce.
“b” refers to businesses where 50% or more of the respondents to the survey conducted by the Ministry of Internal Affairs and Communications titled “Product types for online shopping or physical stores” indicated their preference for purchasing products at a physical store and where 15% or fewer indicated their preference forpurchasing such products on the internet.
“c” refers to businesses at properties leased to P&D Consulting Co. Ltd., whose sub-lessees primarily operate businesses falling under the two categories above and“d” refers to businesses that require physical visits to stores or handle products that consumers highly desire to evaluate in person (sporting goods, prescription eyewear, second-hand products, shoes, musical instruments and interior products).

7

Characteristics of Our Portfolio (3)- Our initial portfolio at listing + Blumer HAT Kobe -Portfolio breakdown by rent type(based on actual rent)(Note 1)

Properties with sales-linked rentTokyo metropolitan area

Actual sales-linked rent

7.1%
T-1 Fululu Garden Yachiyo

T-2 MONA Shin-Urayasu

T-3 Passaggio Nishiarai

T-4 Daikanyama Address Dixsept

Sales-linked
rent (note 3)
5.6%
Fixed andsales-linked
rent (Note 4)
20.9%

Greater Osaka area
Fixed rent (Note 2)
73.5%

O-1 Blumer Maitamon

O-1 Blumer HAT Kobe

Note 1: Percentage is based on actual rent for the properties from April 1, 2014 to September 30, 2014, which may differ from theactual results under our operation.
Note 2: "Fixed rent "refers to predetermined rent in the leasing contract, which is not linked to the total sales volume of tenants.
Note 3: "Sales-linked rent" refers to contractual rent whose amount is directly linked to tenants' sales volume.
Note 4: "Fixed and sales-linked rent" refers to contractual rent with both fixed rent portion and sales-linked rent portion.

8

Post-IPO Unit Price Performance Opening price on the listing date exceeded the issue price by 13.3%
 Our units have been trading above issue price since listing Our unit price has been outperforming TSE REIT Index since April, 2015

Unit price performance since listing (Feb. 10 – May 20, 2015)
Trading conditions on listing day(Feb. 10, 2015)
Issue priceOpening priceHigh price

JPY230,000

JPY260,500

JPY269,600(JPY)

Mar. 31
Announcement ofBlumer HAT Kobe 's acquisition

98,306

320,000(Unit)
50,000100,000

310,000

45,000300,000

40,000290,000

35,000280,000

30,000270,000

25,000260,000

20,000250,000

15,000240,000

Low price

10,000

JPY260,100

IPO issue price JPY230,000
230,000

5,000

220,000

Closing price

JPY266,100

2/10 2/16 2/19 2/24 2/27 3/4

3/9 3/12 3/17 3/20 3/25 3/30 4/2

Volume (RHS)
出来高（右軸）Note:

04/7 4/10 4/15 4/20 4/23 4/28 5/7 5/12 5/15 5/20

Unit Price (LHS)
投資口価格（左軸）

TSE REIT Index (RHS)
東証REIT指数（左軸）TSE REIT Index is adjusted to KRR's closing price on Feb. 10, 2015 (JPY266,100).

9Section 2

Performance since IPO and summary of interim financial results for the fiscal
period ending Sep. 30, 2015

Performance since IPO and Summary of Interim Results

External growth Unitholder value improved soon after the IPO through the acquisition of Blumer HAT Kobe and thebuilding expansion of Roseo Mito
Improved stability through AUM growth and portfolio diversification•

AUM increased from JPY80.8 billion to JPY91.8 billion following theacquisition of Blumer HAT Kobe from the market•

The proportion of the top 10 tenants declined from 45% to 40% after
the acquisition

DPU growth
DPU forecasts revised upwardly with theacquisition of Blumer HAT Kobe•

Financial strategy

Internal growth

Accelerated improvement in profitability and asset value•

Increase both profitability and asset value by constructing a new buildingon the underutilized site of Roseo Mito (anticipated investment returnof 11.5%)•

Successfully raised rents with existing tenants at renewals by taking thechance of the maturities of fixed-term building lease contracts•

Promote local-community-enlivening activities and environmental
initiatives

Optimum use of additional borrowing capacity created at listing
for acquisitions•
An additional borrowing capacity of approx. JPY10.0 billion was createdat listing, with the units being priced at JPY230,000, and hence theestimated LTV at the end of the 1st fiscal period (ending Sep. 31, 2015)
was lowered from 41.8% to 33.9%•
With the expeditious acquisition of Blumer HAT Kobe, the estimated LTV
post the acquisition rose to 40.8%

Additional revenues from Blumer HAT
Kobe reflected in the revenue estimates
BeforerevisionAfterrevision

Percentage
increase

2015/9period

JPY6,542

JPY7,127+8.9%

2016/3
period

JPY5,434

JPY5,912+8.8%

Stabilized
DPU(note)

JPY4,600

JPY5,100+10.9%

Note:"Stabilized DPU" is calculated by adjusting the DPU of the period ending Mar.
2016 for changes such as NOI increase due to improved leasing conditions,
property related taxes and decrease in AM fee and financing-related cost.

NAV growth
NAV per unit increased•

As of Mar. 31, 2015: JPY227,758•

After acquisition of Blumer HAT Kobe:
JPY228,525* No appraisal values available for the interim results

11External growth

Newly Acquired Property: Blumer HAT Kobe
 Flexible acquisition from the market, leveraging the low LTV (high borrowing capacity) at listing
Enlarged view文

Shin-Kobe
Station文

Nada
Station文

Iwaya Station

Hyogo
Prefectural
Government

Blumer HAT Kobe
文

Kobe City Office

Hyogo Prefectural
Museum of Art
文

Kobe
Station

Property nameBlumer HAT Kobe

Property type

NSC

Location

Kobe-shi, Hyogo

Gross floor area

50,538.47 m2

Year built

September 13, 2005

Occupancy rate

99.5%

Number of tenants43

Acquisition price

JPY11,000 million

Appraisal value atacquisition

JPY11,200 million

SellerFukoku Mutual Life
Insurance Company

Acquisition date

April 16, 2015

Appraisal NOI yield

5.3%

Kobe Port Tower

Japanese Red Cross
Kobe Hospital

1. Property features
 Opened in October 2005 as a core retail property in "HAT Kobe," an area redeveloped as a symbol of reconstruction from the Great
Hanshin-Awaji Earthquake An NSC catering to day-to-day needs of local area customers, occupied by a total of about 40 tenants, including anchor tenants (such as agrocery supermarket, clothing stores and a baby goods store on the first floor and a cinema complex on the second floor), other clothing
stores, commercial goods stores, restaurants and service businesses
2. Overview of retail trade area
(1) Location and access Located about 2 km east of Sannomiya, the center of Kobe. "Nada" station on JR Tokaido Main Line and "Iwaya" Station on Hanshin Line,the nearest railway stations, are one station and two stations away from "Sannomiya" station and "Kobe Sannomiya" station, respectively.
Due to the ease of access to Sannomiya, many residential developments are underway in the surrounding areas Hanshin Highway No. 3 and National Route 2, located on the north of the property, and other wide roads in the surrounding areas,developed as part of urban planning projects, have made the property easily accessible by car(2) Characteristics of the retail trade area
 According to 2010 National Census, the residential population in the surrounding areas has been on the rise since 2005, with about 38,000
people within a 1 km radius, 175,000 people within a 3 km radius, and 357,000 people within a 5 km radius. The population is especiallydense within a 1 km radius The location can also attract daytime population of workers from nearby offices and other facilities

Note 1: "Occupancy rate" and "Number of tenants" are the figures as of March 31, 2015; the occupancy rate is rounded to the first decimal place. The number of end-tenants is counted for "Number of tenants"
Note 2: "Appraisal NOI" represents the net operating income (annual) used in the DCF method; appraisal NOI yield is rounded to the first decimal place.

12External growth

Our Portfolio After Acquisition of Blumer HAT Kobe
At listing(Feb. 10, 2015)

As ofMar. 31,2015

New property(Blumer HAT Kobe)

After acquisition ofBlumer HAT Kobe

Improving portfolio profitability and stability
18

18

1

19

Total acquisition price (JPY bn)

80.8

80.8

11.0

91.8

Total appraisal value (JPY bn)

82.3

82.3

11.2

93.5

Portfolio appraisal NOI (JPY mn)(Note 1)

4,418

4,418

577

4,996

Portfolio appraisal NOI yield(Note 1)

5.5%

5.5%

5.3%

5.4%

Weighted average occupancy rate(Note 2)

98.6%

99.4%

99.5%

99.4%

286

279

43

322

% of properties in the four major
metropolitan areas

85.1%

85.1%

100.0%

86.9%

Weight of the top 10 tenants(Note 2)

45.0%

44.3%

---

40.3%

---

33.4%

---

41.6%

227,886

227,758# of properties# of tenants(Note 2)

Leveraging acquisition capacity and enhancing financial stability
LTV(Note 3)
NAV per unit(Note 4)

228,525

Note 1: "Appraisal NOI” refers to the annual net operating income assumed by the appraiser of the relevant property for the direct capitalization analysis in the appraisal reports. The figures for appraisal NOI yield are rounded to the 1st decimal place.
Note 2: As of Mar. 31, 2015. The figures for "Weighted average occupancy rate" are rounded to the 1st decimal place.
Note 3: “LTV” refers to "loan-to-value ratio", which is calculated as the ratio of the total amount of short-term debt, long-term debt, corporate bonds and tenant leasehold and security deposits (net amounts reserved for return of tenant leasehold and security deposits) divided
by total assets as of the end of the previous fiscal period minus amounts reserved for return of tenant leasehold and security deposits.
Note 4: "NAV per unit " is calculated as (total net assets + unrealized gains)/number of outstanding units.

13

Internal growthInternal Growth through Property Expansion
 Improve asset value and profitability trough property expansion, leveraging the underutilized spaceat Roseo Mito
Anticipated timeline

Total
construction
cost

371 million

JPY

May 1, 2015

11.5%

NOI yield (Note 2)(Investment return)

Assumed increasein NOI(Note 1)

JPY▼

42 million

Mid-June 2015

Appraisalvalue after
property
expansion

Appraisal value
before property JPY
expansion:

9,780million

JPY

10,500million

Construction starts▼
Towards theend ofDecember
2015+ JPY720million
Perspective drawing (Note 3)

Execution of contract for
the transfer of status andrights in relation to theconstruction of the New
Building

Completion and deliveryof theNew Building

Property photo

Layout3

2

Construction site of
Recycle shop bldg.

1

4Constructionsite

1. Coffee shop bldg. 2. Mall bldg.
3. Sports facility bldg. 4. Hardware store bldg.
Note 1: Assumed increase in NOI is calculated by deducting assumed annual operating expenses (excluding depreciation) from assumed annual operating revenue of the New Building; however, special items for the first year are excluded, and maintenance expenses, taxes and dues,
insurance premium, etc. are included in expenses; as for operating revenue, since the lease contract with the tenant includes a step-up clause for the rent, the average rent for the lease term is used for the calculation.
Note 2: Assumed increase in NOI of the New Building to the construction cost.
Note 3: Perspective drawing is provided for illustrative purposes, and thus, the actual building may differ from the drawing.

14

Internal growth

Leasing Overview
Internal growth strategy:
optimization of tenant mix

Rent revisions

Weight of large-scale multi-tenant properties(based on number of revisions)(based on acquisition prices)(note 1)(February 10, 2015 – March 31. 2015)

Stabilize revenues and improve profitability
through optimizing tenant mix.


Seek to raise rents at both re-contract
and renewal by taking advantage of thematurities of fixed-term leases as anopportunity for upward rent revisions
With the tenants hoping for downward
rent revisions, reduce rents only in
exchange for additional contract terms,
such as the extension of leasing and/or
irrevocability period

Number ofcontracts

Downward
revision
14.3%
No
revision
21.4%

Re-contract(fixed-termbuilding lease）

12

Move-in4

Upwardrevision
64.3%

Move-out

3

3.1%
0.9%
（Ｎｏｔｅ）
1st Period(note 3)

第1期(Ending Sep. 2015)

Properties
with highpotential for
rent growth

2nd
Period
第2期

2016/3期(EndingMar. 2016)18 tenants

1.5%
rd Period
3第3期

2016/9期(Ending
Sep. 2016)

Blumer HAT
Kobe
12.0%

Large-scale
multi-tenant
properties

68.9%
Roseo Mito
10.5%

Passaggio
Nishiarai
6.4%

Blumer Maitamon
MONA
9.1%
Shin-Urayasu
8.8%
Note 1: "Large-scale multi-tenant properties" refers to multi-tenant properties
with acquisition prices more than JPY 5 billion# of tenants and % of lease contract for rent revision in each period(Note 2)
23 tenants

Others31.1%

Daikanyama
Address DIxsept
5.9%

Anticipated timing of rent revisions (based on rent for Fixed-term building lease)

9 tenants

Fululu Garden
Yachiyo
16.2%

17 tenants

2.3%
th Period
4第4期

2017/3期(EndingMar. 2017)

7 tenants
4.0%

5th 第5期
Period2017/9期(Ending
Sep. 2017)

Occupancy (Multi-tenant properties)
Property nameSep. 2014

Mar. 2015

Fululu Garden Yachiyo

100.0%

99.7%

MONA Shin-Urayasu

100.0%

99.5%

Passaggio Nishiarai

99.1%

98.7%

Daikanyama Address
Dixsept

95.2%

92.6%

Blumer Maitamon

97.2%

97.2%

Blumer HAT Kobe

–

99.5%

94.6%

100.0%

74 tenants
9.6%

6th第6期
Period2018/3期(EndingMar. 2018)

Property name

Property name

Property name

Property name・Fululu Garden Yachiyo
MONA Shin-Urayasu
・Passaggio Nishiarai

・Passaggio Nishiarai

・Blumer Maitamon

・Fululu Garden Yachiyo
・MONA Shin-Urayasu
・Blumer HAT Kobe

Roseo Mito

Note 2: Based on the contractual rent determined in the lease contract, including regular building leases.
Note 3: Figures calculated based on contracts maturing in period from Apr. 1,2015 through Sep. 30, 2015.

15

Internal growth

Proactive Retail Properties Management and Environmental Initiatives
 We proactively participate in local-community-enlivening activities and take environmental
initiatives
Enliven local communities

Environmental initiatives

We seek to enhance the medium- to long-term asset valueof our retail properties by attracting tenants engaged inservice businesses and holding local events at our
properties to enliven the local community.

The following properties in our portfolio acquired "DBJ Green
Building" certificate.
DBJ Green Building certificate is a certification system developed by DBJ in Apr. 2011 tosupport real estate with high environmental and social awareness.

O-1 Blumer Maitamon
T-1

Yosakoi Danceat Anniversary Festival(Unicus Ina)

Fululu Garden Yachiyo

Roseo Festival(Roseo Mito)

T-5 Unicus Ina

T-2 MONA Shin-Urayasu

T-7

Concert "Minnanokotoba"(Fululu Garden Yachiyo)

Unicus Yoshikawa

Yoshikawa Marche(Unicus Yoshikawa)

16

Financing strategy

Financial Highlights
Breakdown of debt outstanding by lender(as of April 16, 2015)

Summary of interest-bearing debt•••

Conducted debt financing with consideration of the balance between borrowing costs and maturities
Realized steady growth while maintaining financial health through adequate management of LTV
Extended maturities and increased the proportion of fixed-interest debt
As of IPO date(Feb. 10, 2015)

Breakdown ofborrowings

Status ofinterestbearing debt

As of March 2015

After acquisition ofBlumer HAT Kobe

New debt(as of Apr. 16, 2015)

Total debt outstanding(JPY mn)

28,172.5

26,850.0

11,500.0

38,350.0

Long-term debt ratio

88.2%

92.6%

40.0%

76.8%

Fixed-interest debt ratio

88.2%

92.6%

40.0%

76.8%

Average debt cost(note1)

---

0.99%

---

1.05%

Average years to debt
repayment dates

5.0 years

5.1 years

4.6 years

4.9 years

Number of lenders
Total interest-bearing debt
(JPY mn)

11

11

1

11

---

30,045LTV(note2)---

33.4% borrowing capacity

Leverage

41,51041.6%

Note 1: "Average debt cost" is calculated as the weighted average interest of debt with upfront cost included, based on the amount outstanding.
For variable-interest debt, the debt cost is calculated using the interest rate fixed through interest swap. In the case that there is no interest swap, TIBOR rate for eachspecific date above is adapted in the calculation.
Note 2: “LTV” refers to "loan-to-value ratio", which is calculated as the ratio of the total amount of short-term debt, long-term debt, corporate bonds and tenant leasehold andsecurity deposits (net amounts reserved for return of tenant leasehold and security deposits) divided by total assets as of the end of the previous fiscal period minus
amounts reserved for return of tenant leasehold and security deposits.

Staggered maturities of interest-bearing debts (as of April 16, 2015)

The Musashino Bank,
Ltd.
1.0%

Resona Bank, Limited.
3.9%
Aozora Bank, Ltd.
4.2%

Debt
outstanding

Mizuho Bank, Ltd.
4.8%

38.35

Sumitomo Mitsui Trust
Bank, Limited.
4.8%

billion JPY

Development Bank ofJapan Inc.
8.1%
Sumitomo Mitsui
Banking Corporation
58.0%

The Bank of TokyoMitsubishi UFJ, Ltd.
9.3%

Including 6.9 bn Short term debt
financing for Blumer HAT Kobe's
acquisition

Total amount of security/guarantee deposits
JPY8.1 bn(as of Mar. 31, 2015)

Extend debt maturity through refinancing
JPY6.9 bn of short-term debt, financed by theacquisition of Blumer HAT Kobe
The longest maturity: 10 years

6,900

The Gunma Bank, Ltd.
1.0%

Optimum use of security/guarantee deposits(JPY mn)

10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0

Mitsubishi UFJ Trustand Banking
Corporation
Mizuho Trust & Banking
2.1%
Co., Ltd.
2.7%(Amount kept as cash for deposit repayment)

JPY5.0 bn(as of Apr. 16, 2015)

JPY8.9 bn
JPY5.4 bn(Amount kept as cash for deposit repayment)

7,000
3,850

7,000

7,000
4,600

2,000
2016年 2017年 2018年 2019年 2020年 2021年 2022年 2023年 2024年 2025年

Rating (JCR)(Long-term issuer rating as of March 31, 2015)

Japan Credit Rating Agency, Ltd. (JCR)A
17

Summary of Interim Financial Results
 Summary of financial result of the 180-day period from Oct. 3, 2014 through Mar. 31, 2015
 Actual operating period: 50 days since Feb. 10, 2015
Interim Statement of Income and Retained Earnings

Interim Balance Sheet(in million JPY)
Current assets

Total property, plant and equipment, net

11,772

Rental revenues

822

82,058Other rental revenues

180

Intangible assets

177

Investments and other assets

363

Total noncurrent assets
Deferred assets
Total assets(in million JPY)

Operating revenue

1,003

Property related expenses

294

Net operating income (NOI)

708

Operating expenses

504

82,599240
94,611
Operating profit

Current Liabilities

3,428

Noncurrent liabilities

32,992498

Non-operating income0

Non-operating expenses

163

Total liabilities

36,420Total net assets

58,191

Ordinary income

335

Total liabilities and net assets

94,611

Net income

334
18

Revisions to Financial Forecasts
 Earnings forecasts revised upwardly to reflect the acquisition of Blumer HAT Kobe
1st period
ending Sep. 2015

2nd period
ending Mar. 2016

Increase/decrease (1st period)
Previous forecast

Key financial results (JPY mn)

Operating revenue
Operating expense

4,857

3,962
1,959

Depreciation

552

433

Operating income

2,334

1,874

457

328

Operating revenue

4,394

+462
+10.5%

4,857

Operating income

2,143

+191
+8.9%

2,334

Ordinary income

1,724

+152
+8.8%

1,876

Net income

1,706

+152
+8.9%

1,858

(Major operating expense)(Major non-operating expense)

Financing-related expense

389

278

Amortization of investment unit
issuance and organization expense

66

44
Increase/decrease (2nd period)

Ordinary income

1,876

1,545

Net income

1,858

1,541

NOI

3,253

2,668

NOI yield (%)(Note)

5.5%

5.8%

NOI after depreciation

2,700

2,235

4.6%

4.9%

40.8%

40.8%

LTV

(JPY mn)Previous forecast

New forecast(Feb. 10, 2015)

Operating revenue

3,472

+489
+14.1%

3,962

Operating income

1,666

+207
+12.5%

1,874

Ordinary income

1,420

+124
+8.8%

1,545

Net income

1,416

+124
+8.8%

1,541

Related information (JPY mn)

NOI yield after depreciation (%)

New forecast(Feb. 10, 2015)

2,378

Non-operating expense(JPY mn)

Note: Property-related taxes for the 19 properties in our portfolio are not going to be expensed in the periods above.

19

Revisions to DPU Forecast Increased DPU forecast as a result of the acquisition of Blumer HAT Kobe
 Forecast a 5,100 level for stabilized DPU, after considering factors including the property-related tax effectChanges in DPU forecast
Main drivers for future DPU changes
1. Increase in NOI due to revision of leasing assumptions
2. Property-related taxes
3. Decrease in AM fee and financing-related cost

+8.9%

1

2

JPY320+8.8%

JPY1,3273+10.9%
JPY195

JPY7,127
JPY6,542
JPY5,582

JPY5,912

JPY5,434

JPY5,100
JPY4,600

Note:

1st Period

1st Period

1st Period

2nd Period

2nd Period

Before newpropertyacquisition

With newpropertyacquisition

With new property
acquisition andoperating period
adjustment(Note)

Before newpropertyacquisition

With newpropertyacquisition

Estimatedstabilized DPU

Estimatedstabilized DPU(Before newpropertyacquisition)(With newpropertyacquisition)

Pro rata based DPU after adjusting the operating days for the 1 st Period from 233 days (actual) to 183 days.

20Section 3

Our growth strategies

Significant Growth Potential Underpinned by Solid Track Record
Pipeline from Sponsor andAlliance Companies

External growth

Track record
JPY80.8 bn acquisition upon IPO

Strategy
Continue acquiring properties
from the solid pipelines from thesponsor and support companies

Improve asset value through property
expansion and other CAPEXInternal growth

Track record
Property expansion at Roseo Mito (new building
completes towards the end of Dec. 2015)

Strategy
Improve the value of assets to target rent increase foraged properties or the properties with underutilized
space

Proprietary sourcing
capability

Financing capacity forproperty acquisitions

Track record

Track record

Acquisition of Blumer HAT Kobe
from Fukoku Mutual Life
Insurance Company

LTV remains low at 41.6% after
acquisition of new properties

Strategy

Strategy
Leverage the remaining financing
capacity to acquire properties
flexibly, and thus secureacquisitions opportunities

Continue sourcing properties
based on extensive property
information

Improve rent levels at tenant replacement
Track record
Successfully raised rents with more than 60% of thetenants with whom KRR renewed leasing contracts
after IPO

Strategy
Seek rent increase through optimizing rent levels

22External growth strategies

1

Selective investments in attractive retail properties through the expertise of ourAsset Manager

2

Strong acquisition pipeline through opportunities from our Sponsor andAlliance Companies

3

Proprietary opportunities leveraging support from our Sponsor and Alliance Companies,
including preferential negotiation rights with our Alliance Companies

4

Leverage multiple acquisition channels to maximize potential acquisition opportunities

23

Strong acquisition pipeline and preferential negotiation rights of retail properties
 We seek to achieve external growth by utilizing pipelines from the Kenedix Group, our Sponsor, and taking
advantage of preferential negotiation rights with Alliance Companies
 Further acquisition pipelines are anticipated from new property funds investing mainly in retailed facilities,
raised and managed by the Kenedix Group

Examples of properties owned by our Sponsor and Alliance Companies(Note)

Urban StationFront SC

Carino Esaka
Location: Suita, Osaka

SM

SS

Development
project

Development
project

Inageya Yokohama Minamihonjukucho
Location: Asahi-ku, Yokohama[Royal Home Center Totsuka Fukaya]
Location: Yokohama, Kanagawa

SM

SM

SM

SM

Development
project

Development
project

Development
project

Development
project

York Mart Totsuka Fukaya-cho
Location: Yokohama, Kanagawa[Mandai Tsukaguchi Store]
Location: Amagasaki, Hyogo[Osaka Nishi-ku Project]
Location: Osaka, Osaka[Osaka Chuo-ku Project]
Location: Osaka, Osaka

Note : As of May 26, 2015, we have no plans to acquire these properties and there is no guarantee that we can acquire these properties in the future. The illustrations above are only completion images based on design drawings and may differ from actual buildings after completion.

24

Our Growth Roadmap
 Realize AUM growth to build a more stable portfolio, while focusing on steady DPU growth

Medium-term target:
AUM of JPY200.0 bn
JPY200.0 bn
Annual acquisition of
JPY40.0 bn on average

JPY80.8 bn

上場時
Ai
listing

JPY91.8 bn

Afteracquisition of
ブルメールHAT神戸
Blumer
HAT Kobe
取得後Abundant external growth opportunities

Note:



Size of acquisition universe

Increasing proportion of our investment
target among domestic retail facilities

Period2018年3月期
ending Mar. 20182017年9月期(In3年後3 years)

Promotion of external growth strategies
 Solid pipelines from sponsor and support
companies Diverse acquisition routes and methods
 Selective investments by professionals"AUM" represents the total acquisition price of all properties in the portfolio.

25

Internal Growth Strategies

1

Pursue a portfolio composition that achieves both stability and growth2

Enhance tenant relationships and profitability through value-added "one-stop"
asset management and property management services

3

Continuously implement a retail property management cycle through our inhouse property management services

4

Direct investments and management policies to enliven local communities

26

Tenant-oriented Retail Property Management"One-stop" AM and PM services
Strengthen relationships with tenants and enhance portfolio profitability through "one-stop" AM and PM services.

AM services
Build and manage a stable/consistentportfolio

Strengthened
collaboration

PM services
Interact directly with tenants

Tenant-oriented retail property management
Seek to realize tenant-oriented property management, accumulate knowhow and improve tenant satisfaction level by entering into property
management agreements for our entire portfolio.
Monitoroperational
status oftenants

Accumulateknowhow
Identify
issuesExecutesolutions

Enhance tenantsatisfaction27

Pursuit of Internal Growth through Management of Retail Properties

Management approaches

Seek to achieve internal growth through management of retail properties

Effective utilization of capital expenditureby the Asset Manager

Optimize tenant composition

Value growth through property expansion

Post-listing example of renovation(Passaggio Nishiarai)

Attractive new tenants

Before property expansion

Installation of LED lights to
reduce utility cost andenvironmental load

Proactive
efforts toreshuffle
tenants

Optimization

Proactive
efforts tofind newtenants

Building expansion
throughadditional investments

After property expansion
Departure

Broad tenant relationships

Expected effects

Unused/underutilizedspace

Stabilize income

Enhance profitability

Extended
space

Enhance asset value

28

Appendix 1

Key Characteristics of Kenedix Retail REIT Corporation (KRR)Portfolio Strategies
Investment criteria

Primary geographic target areas

Focus on the following four elements in making investment decisions:• Four major metropolitan areas(Note 1),
which have relatively stable populations

Attractiveness

Location• Ability to serve particular day-to-day
needs of local area customers• Demographic composition, number ofhouseholds, competing facilities inlocal retail trade area

Profitability

Tenant mix• Occupancy, leasing status, rent level
and lease term

• Optimal tenant mix for the property
considering tenant credit profiles andretail space usage

Target portfolio distribution (based on acquisition price)
Retail properties

100%• Selective investments in tokureishi andother areas(*) for diversification(*) "Tokureishi and other areas" refers to cities designated by government ordinance, which have a
population of 200,000 persons or more, and to other areas with a population of fewer than 200,000
persons, which we believe will have suitable customer traffic from surrounding areas.

The Tokyo metropolitan area
The Greater Osaka area

The Fukuoka area

Investment in land ownership interests―active investment in "JINUSHI" properties

Characteristics of investment
in "JINUSHI" properties

80%
Or moreNeighborhood,community and othershopping centers fordaily needs

Note:

Focus onthe four major
metropolitan
areas
The Greater Nagoya area

Tenants

Land owners• Incentives to remain for longterm because they pay
building costs as the owner• Long-term stable cash
flows from commercial
fixed-term land leaseagreements• Tenants are responsible forany capital expenditures

Stable, long-term
cash flows to
support returns to
our unitholders• Land owners bear no
depreciation costs"Four major metropolitan areas" refers to the Tokyo metropolitan area, the Greater Osaka area, the Greater Nagoya area and the Fukuoka area. 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 areathat consists of Fukuoka prefecture.

30

Conforming to Changes in the Macroeconomic Environment for Retail Properties

Shrinking retail tradearea due to aging
population and concentrated
population in the four major
metropolitan areas

Increase in
specialty supermarket
market share

Increasing importanceof neighborhood, communityand other shopping centers thatcater to the day-to-day needs

Domestic consumption
led by the elderly

Stable demand fordaily necessities

Decrease in size ofretail properties

Government promotionof "Compact City"

31

Retail Property Trends and Macroeconomic Conditions (1)Demographic shift in Japan

Shrinking retailtrade area
due to aging
population andconcentrated
population in thefour major
metropolitan areas(million people)
140

Population share in Japan by area
(%)
45

見込値
Projections

120

40

100

35

80

30

60

25

40

20

20

15

0
平成
2年

平成
平成
7年
12年
65歳以上人口

平成
17年

平成
平成
22年
27年
15～64歳人口

平成
32年

平成
平成
37年
42年
14歳以下人口

平成
47年

10
平成
52年
（注1）
(Note 1)
高齢化率

Source: Ministry of Internal Affairs and Communications, National Institute of Population andSocial Security Research(%)
60

Projections
見込値

50

40
30
20
平成
2年

平成
平成
7年
12年
四大都市圏

平成
17年

平成
平成
22年
27年
首都圏

平成
平成
平成
37年
42年
47年
四大都市圏以外の地域

平成52年

Source: Ministry of Internal Affairs and Communications, National Institute of Population and Social
Security Research

Retail market volume in Japan

Ownership of monetary assets by age group (as of 2009)(trillion yen)

Under 30
1%(trillion yen)
50
50

150
150
140
140

40
40

Domestic

130
130

30
30

consumption led by

120
120

20
20

the elderly

110
110

10
10

100
100

00

30s
6%

70 and over
28%

40s
12%

60 and over

61%

平成
平成平成
平成 平成
平成 平成
平成 平成
平成 平成
平成
平成 平成
平成 平成
平成 平成
平成 平成
平成平成
平成平成平成14年
21年21年22年22年
23年 23年
24年 24年
25年 25年
26年
14年 15年
15年 16年
16年 17年
17年18年18年19年
19年20年
20年
小売業全体（左軸）
小売業全体（左軸）
飲食料品小売業（右軸） 飲食料品小売業（右軸）
織物･衣服･身の回り品小売業（右軸）Source: Ministry of Economy, Trade and Industry

(%)
8
6
4
2
0
-2
-4
-6
-8
-10

平成
18年

平成
19年

平成
平成
平成
平成
20年
21年
22年
23年
基礎的支出
Source: Ministry of Internal Affairs and Communications

50s
20%

60s
33%
Source: Ministry of Internal Affairs and Communications

Basic and selective consumption trends (YoY% change)

Stabledemand fordaily necessities

平成
32年

平成
平成
24年
25年
選択的支出

平成
26年

Product types for physical stores or online shopping
食品
薬雑貨/日用品
ペット用品
大型家具
大型家電
衣類
小型家具
化粧品
切符/チケット
携帯電話
PC
小型家電
本
CD/DVD/BD類
0%

10%

20%
30%
実店舗が多い

40%

50%
60%
70%
インターネットが多い

80%

90%

Source: Ministry of Internal Affairs and Communications

Note : "Aging rate" refers to the percentage of the population aged 65 and older.

32

Retail Property Trends and Macroeconomic Conditions (2)Retail sales shares by store type(%)
25

Increasein specialty
supermarket
market share

21.8%

20

17.5%

16.5%

15

12.0%

18.1%

17.7%

13.8%

9.9%
10

5
0

平成3年

平成6年
百貨店

平成9年
平成11年
総合スーパー（GMS）

平成14年
専門スーパー

平成16年

平成19年
コンビニエンスストア

平成24年

Source: Ministry of Economy, Trade and Industry

Retail property opening applications by property size

(%)
100

1.9%
12.6%

95
90

3.8%

2.7%

2.5%

11.4%

10.4%

9.6%

18.6%

85

Decrease in sizeof retail properties

80

13.4%

75

15.3%

13.8%

18.8%

69.0%

70

65

1.2%
3.5%

72.1%

69.5%

73.0%

平成16年度

平成17年度
5,000㎡以下

平成18年度

76.7%

0.8%
4.4%

1.2%
3.8%

15.6%

1.0%
2.6%
13.4%

0.7%
4.3%

1.1%
4.3%

0.8%
3.7%

14.6%

15.3%

15.7%

80.4%

79.3%

79.8%

平成24年度

平成25年度
30,000㎡超

平成26年度（9月末日時点）

21.4%

79.5%

83.1%

73.4%

0
平成19年度
平成20年度
5,000㎡超10,000㎡以下

平成21年度

平成22年度
平成23年度
10,000㎡超30,000㎡以下

Source: Ministry of Economy, Trade and Industry"Compact City" policy promoted by the Japanese government through Urban Planning Guidelines

Government
promotion of"Compact City"

On the back of Japan's aging population, the government has promoted the "Compact City" policy which encourages theformation of highly compact and convenient neighborhoods with high population concentrations and partially amended the Urban
Planning Guidelines on August 1, 2014

We believe that the importance of neighborhood, community and other shopping centersthat cater to the day-to-day needs will increase going forward

33

Retail Property Trends and Macroeconomic Conditions (3)GDP growth rate (YoY)

Diffusion Indices

6

60

4

50

2

40

0

30

CPI
4
3
2

-2

20

-4

10

-6

0

1
0
-1
-2

2006

2008

2010

2012

2014
(Forecast)

-3
-4
2006

Source: National Accounts, Cabinet Office
Note:
Fiscal year base, as of Mar. 2015

2007

2008
2009
2010
2011
2012
2013
2014
DI for current conditions
DI for future conditions
DI for future conditions (Household activity-related)

2015

2006

2009

2010

2011

2012

2013

2014

2015

All items, less fresh foodSource: Ministry of Internal Affairs and Communications, Statistic Bureau
Note:
As of Mar. 2015

Private Consumption Integrated estimates

Large-scale retail store (excl. departments)
sales value

4

120

120

2

110

110

100

100

90

90

80

80

70

70

60

60

0

2008

All items

Source: Economy Watchers Survey, Cabinet Office
Note:
As of Mar. 2015

Change in total monthly real wage

2007

-2
-4
-6
-8
2006

2007

2008

2009

2010

2011

2012

2013

Source: Monthly Labour Survey, Ministry of Health, Labour and Welfare
Note:
As of Mar. 2015

2014

2015

50

50
2006

2007

2008

2009

2010

2011

Source: Monthly Economic Report, Cabinet Office
Note:
As of Mar. 2015

2012

2013

2014

2015

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Source: Report on the Current Survey of Commerce, Minister of Economy, Tradeand Industry
Note:
As of Mar. 201534

Leveraging Extensive Support from Sponsor and Alliance Companies
SponsorAlliance Companies

Other
supportSupport for internal growth

Support forexternal
growthType of support

Pipeline support

●

●

●

●

Warehousing services●●

Leasing services

●

●

●

PM services

●

●

●

Environmentally-friendly technology/
knowhow●

Evaluation of operating conditions
and advisory on operations

Personnel support

Right to use trademarks

●

●

●

●

35

Overview of the Kenedix Group (1)Fully leverage the Kenedix Group's extensive resources and knowhow with respect to retail facilities
Kenedix Retail REIT Corporation

Examples: Retail property funds(Note 1)

Examples: Retail property developments(Note 1)

Challenger Kenedix Japan Trust (CKT)

Private fund for German investors

Fund size: approx. JPY59 bn
Number of properties: 20(as of Mar. 31, 2008)

Fund size: approx. JPY25 bn
Number of properties: 9(as of Aug. 31, 2008)

Mujirushi Ryohin
Shimokitazawa

FRAME Jinnan-zaka

Carino Chitosedai

Ashiko Town
Ashikaga

The Kenedix GroupThe Kenedix Group's total AUM(Note 2) and the proportion of retail properties in total AUM(JPY bn)
15,0001,500
10,0001,000

Total AUM

734.9

AUM for retail properties

844.3

939.9

1,480.6
1,097.9

1,111.3

1,117.7

1,206.3

500
5,000
109.7

143.1

182.7

199.6

185.8

174.1

188.8

187.9

As of
December31, 2007

As of
December31, 2008

As ofDecember31, 2009

As ofDecember31, 2010

As ofDecember31, 2011

As ofDecember31, 2012

As ofDecember31, 2013

As ofDecember31, 2014

00

Note 1: These domestic retail properties were developed or managed by the Kenedix Group. As of May 26, 2015, we do not intend to acquire these properties.
Note 2: AUM is defined as the sum of the purchase prices of real estate assets for which Kenedix provides asset management services as well as real estate assets that constitute inventories and property and equipment held for Kenedix’s account and that are managed by Kenedix or relevant
asset management subsidiaries and affiliate companies.

36

Overview of the Kenedix Group (2)History of the Kenedix GroupThe Kenedix Group's strong commitment to J-REITs

1995

J-REIT JPY

Foundation of Kenedix, Inc.
(formerly Kennedy-Wilson Japan
Co., Ltd.)

1999

2001

Entry into real estate asset
management business

Establishment of a real estate
investment fund, providing asset
management services to Japanbased client investors for the
first time

2004
Listed on the First Section of Tokyo
Stock Exchange

2008
Establishment of a private fund withGerman investors. Started toperform asset management

Residential
properties

Retailfacilities

Logistics
facilities

JPY145.7 bn

JPY80.8 bn

JPY203.0 bn

Office andresidential
properties
JPY235.8 bn

2002

PrivateREIT

Privatefund

A diverse rangeof assets
JPY513.1 bn(Note 2)(as of March 31, 2015)

Listed on Osaka Securities
Exchange's NASDAQ Japan

2003
Listed on the Second Section ofTokyo Stock Exchange

2005
KDO (formerly KRI) and JLF listedon Tokyo Stock ExchangeMid-sized
officebuildings, etc.
JPY387.8 bn

1,053.2 billion (as of March 31, 2015)

Kenedix Office
Investment
Corporation(KDO)

Kenedix
Residential
Investment
Corporation(KDR)

Listed inJul. 2005

Listed in
Apr. 2012

Kenedix Retail Japan Logistics
REIT
Fund, Inc.
Corporation
(JLF)
(KRR)

Premier
Investment
Corporation(PIC)

Kenedix
PrivateInvestment
Corporation(KPI)

Privatefunds

2007
CKT investing in Japan's retailfacilities listed on Australian Stock
Exchange

Listed inFeb. 2015

Listed in
May 2005

Listed in
Sep. 2002

Mitsui & Co.,
Logistics
Partners Ltd.

Premier
REIT
Advisors
Co., Ltd.

Kenedix Real
Estate FundManagement,Inc.

30% ownedby Kenedix,
Inc.

100% owned
by Kenedix,
Inc.

2010
Kenedix Group's AUM exceeded
JPY1 trillion

2012
KDR listed on Tokyo Stock
Exchange

October 2014
Acquisition of a 30% stake in theasset manager of PIC

March 2014

Kenedix
Real Estate
Fund Management, Inc.

Establishment of KPI, a private
REIT(Note 1)

February 2015
Kenedix Retail REIT listed on Tokyo
Stock Exchange

100% owned by
Kenedix,
Inc.

20% ownedby Kenedix,
Inc.

Kenedix, Inc.
(advisory )Kenedix Real
Estate FundManagement,Inc.
(discretionary)

Note 1: "Private REIT" refers to an unlisted open-end private real estate investment corporation.
Note 2: Including proprietary investments of JPY116 billion.

37

Overview of the Kenedix Group (3)The Kenedix Group's total AUM(Note 1)

Distribution of AUM by fund type as of Mar. 31, 2014

J-REITsPrivate REIT/fund
Proprietary investments(JPY bn)
1,600

Proprietary investments
8%(JPY116.0bn)

J-REITs67%(JPY1,053.2 bn)

1,480.6
132.5

1,400

Private REIT/fund
25%(JPY397.1bn)

1,206.3
1,200

1,097.9 1,111.3 1,117.7

1,000

939.9
844.3

800

734.9

161.8

152.1

96.9

438.3

AUM by major J-REIT sponsors as of Mar. 31, 2015(Note 2, 3)

92.6(JPY bn)
496.3

162.3

172.0

2,000

542.6
548.4

162.4

1,500

531.9

1,053.2

600

432.8

1,000

349.8

400

Number ofproperties
318

909.8

281.2

500
613.0

As of
As of
As of
As of
As of
As of
As of
As of
December December December December December December December December
31, 2007
31, 2008
31, 2009
31, 2010
31, 2011
31, 2012
31, 2013
31, 2014

ItochuOrix

Marubeni

Nomura Real Estate
Holdings0

Mitsuibishi Estate

344.7

0
Mitsuibishi Corp.

322.4

427.3

Kenedix

291.3

387.6

Mitsui Fudosan

200

482.4

Note 1: J-REIT figures include real estate assets held by Japan Logistics Fund, Inc., which is managed by Mitsui & Co., Logistics Partners Ltd. Kenedix owns a 20% equity interest in Mitsui & Co., Logistics Partners Ltd., with Mitsui & Co. Ltd. owning a 51% equity interest and Sumitomo Mitsui Trust
Bank, Limited owning a 29% equity interest. The J-REIT figure as of December 31, 2014 also includes real estate assets held by Premier Investment Corporation, which is managed by Premier REIT Advisors Co., Ltd. Kenedix owns a 30% equity interest in Premier REIT Advisors Co., Ltd.,
with NTT Urban Development Corporation owning a 53.1% equity interest, Sohgoh Real Estate Co., Ltd. owning a 10.0% equity interest, Sumitomo Mitsui Trust Bank, Limited owning a 4.9% equity interest and Nikko Properties Co., Ltd. owning a 2.0% equity interest.
Proprietary investments represent real estate assets owned by the Kenedix Group for its own account.
Note 2: "Major J-REIT sponsors" refer to the shareholders of each J-REIT's asset manager, excluding trust banks, other financial institutions, and the shareholders whose ownership ratio is less than 20%. In the chart, "Mitsui Fudosan" represents Mitsui Fudosan Co., Ltd., "Mitsubishi Corp." represents
Mitsubishi Corporation, "Mitsubishi Estate" represents Mitsubishi Estate Co., Ltd., "Nomura Real Estate Holdings" represents Nomura Real Estate Holdings, Inc., "Marubeni" represents Marubeni Corporation, "Orix" represents Orix Corporation and "Itochu" represents Itochu Corporation.
Note 3: AUM by major J-REIT sponsors are based on the asset size of each J-REIT (based on total acquisition price).

38

Overview of Alliance Companies (1)Sumitomo Mitsui Finance &Leasing Co., Ltd.(Note 1)

P&D Consulting Co., Ltd.(Note 2)

 Founded in Feb. 1963
（Beginning of lease business : May 1968）
 Main lines of business: Leasing of a variety ofequipment and machinery, loans andfactoring, etc.
• Operating assets of JPY3.6 trillion (on a book value
basis, as of March 31, 2014). The largest generalleasing company in Japan by lease transaction
volume (with consolidated operating assets of
JPY500 bn for the real-estate sector (on a bookvalue basis))• Sourcing transactions through the broad customer
base of Sumitomo Mitsui Banking Corporation

 Founded in Apr. 2000
To be
replacedXEBIO Kyuhoji

 Main lines of business: Development andmanagement of retail facilities, retail consulting, etc.
• Development/management of its own brand"Unicus" (9 locations) and development of otherretail facilities (8 locations)(as of September 30, 2014)

Unicus Kamisato Description of support• Sourcing of properties developed on its own to
Kenedix Retail REIT (pipeline support)
VIVAHOME Zama

• PM services, tenant leasing and other services

Wakaba Walk

• Assessment of operating conditions and advisoryon operations

 Description of support• Sourcing of lease properties (pipeline support)• Provision of knowhow the company has
accumulated through development/management ofretail facilities• Provision of warehousing services, financing, otherservices to bridge funds and personnel support
 Share holders:
Sumitomo Mitsui Financial Group, Inc: 60%
Sumitomo Corporation: 40%

Kalsa
Hiratsukatamura

Ito-Yokado Waseda

SUMMIT Idogaya

Super DEPOT
Atsubetsu-higashi

Unicus Minamifuruya

Unicus Kounosu

Note 1: May be hereinafter described as "Sumitomo Mitsui Finance & Leasing." All of these properties are the retail properties developed in the past or currently owned by Sumitomo Mitsui Finance & Leasing. As of May 26, 2015, we have no plans to acquire
these properties and there is no guarantee that we can acquire these properties in the future.
Note 2: May be hereinafter described as "P&D Consulting." All of these properties are the retail properties developed in the past by P&D Consulting. As of May 26, 2015, we have no plans to acquire these properties and there is no guarantee that we can acquire
these properties in the future.

39

Overview of Alliance Companies (2)Nippon Commercial Development Co., Ltd.(Note 1)
 Founded in Apr. 2000
Listing:
1st Section of the Tokyo Stock Exchange
1st Section Nagoya Stock Exchange JINUSHI BUSINESS Main lines of business: Real estate investment, sub-leasing/leasing/ fund fee
businesses

Nippon Commercial Development's "JINUSHI BUSINESS" is a business model
whereby they invest in land ownership interests and lease the land to tenants
based on commercial fixed-term land lease agreements to generate stable cash
flow (rent) in the long term.

• "JINUSHI BUSINESS"(Note 2) to invest in land ownership interests• Successful track record of JINUSHI projects (as of October 31, 2014):
47 projects, approx. 530,000 m2 (land area) and JPY80.0 bn (book value)

Tenant builds andowns the building Description of support• Sourcing of land acquisition opportunities through "JINUSHI BUSINESS"(pipeline support)

Land rent

Commercial fixed-term
land lease agreement• Connections with broad tenants, developed through the"JINUSHI BUSINESS"• PM services and tenant leasing services

Kenedix Retail REIT owns
the underlying land only

• Right to use "JINUSHI"-related trademarks
 Selected "JINUSHI" projects completed(Note 3)

Life Mitejima

Create SD Kamakura York Mart Atsugi
Zaimokuza
Nanmohri Characteristics of Nippon Commercial Development's"JINUSHI BUSINESS"

Hankyu Oasis
Takadono

Investments in land assets which
can be converted to residential use

Seek long-term stable cash flow

Note 1: May be hereinafter described as "Nippon Commercial Development."
Note 2: "JINUSHI BUSINESS" (in Japanese) is a registered trademark of Nippon Commercial Development.
Note 3: All of these properties are the "JINUSHI" properties developed in the past by Nippon Commercial Development. As of May 26, 2015, we have no plans to acquire these properties and there is no guarantee that we can acquire these properties in the future.

40

Governance Structure
Decision-making process for acquisition and sale of properties

Preparation of
proposal

Asset
Investment
Department of
Retail REIT
Division

Confirmation of
proposalCompliance
Officer

Relatedparty
transaction

Deliberation
andResolution

Deliberation
andResolution

Compliance
Committee

AssetManagement
Relatedparty
Committee oftransaction
Retail REIT
Division

Other transactions

Deliberation
andResolution

Relatedparty
transaction

Our board of
directors

ReportAsset
Manager's
board ofdirectors

Other transactions

Investment in Kenedix Retail REIT by the Kenedix GroupThe Kenedix Group owns about 2% (5,750 units) of our total issued units.

Introduction of DPU-linked management fee structure
Fee linked with distribution
per unit

We believe the DPU-linked asset management fee structure will encourage the Asset Manager to place utmost
emphasis on the growth of income from portfolio properties.

The Kenedix Group's business model that benefits from our growth
As of Mar. 31, 2015, the Kenedix Group is the only real estate investment manager in Japan whose J-REIT assets constitute the majority of their AUM.
Because of the importance of the J-REIT business to the Kenedix Group, we believe that our sound growth is in line with their interests.

41

Appendix 2

Detailed financial results and portfolio information

Earnings Performance for the Individual Properties (1)Location

Tokyo metropolitan area

Property No.

T-1

Fululu Garden
YachiyoProperty Name

Acquisition Date

Price
Information

T-2

MONA
Shin-Urayasu

T-3

T-4

Passaggio Nishiarai

Daikanyama
Address
Dixsept

T-5

T-6

Yorktown
Kita-Kaname

Unicus Ina

T-7

T-8

Unicus Yoshikawa

Sports Club
Renaissance
Fujimidai

February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015 February 10, 2015
Acquisition price ( In millions of yen )14,848

8,063

5,850

5,390

4,379

4,000

3,600

2,586

Percentage of total portfolio

18.4%

10.0%

7.2%

6.7%

5.4%

4.9%

4.5%

3.2%

Net book value ( In millions of yen )15,105

8,191

5,967

5,467

4,439

4,056

3,673

2,621

1（74）

1（39）

1（25）

1

1

1(11)

－
(Note )

10,620.04

3,120.87

10,620.04

3,120.87

Number of tenants

50
2

1

Leasable floor area (m )77,057.56

9,568.31

10,546.25

5,056.39

13,044.37

Leased floor area (m2)

76,800.63

9,523.31

10,404.31

4,681.24

13,044.37

Occupancy ratio as of March 31, 2015

99.7%

99.5%

98.7%

92.6%

100.0%

100.0%

100.0%

100.0%

Operating periods

50days50days50days50days50days50days50days50days(1)Rental and other operating revenues ( In thousands of yen )222,097

148,729

83,57070,23636,917

Rental revenues

176,852

100,892

57,77048,97036,854

Other operating revenues

45,24547,836

25,79921,26662(2)Property-related expenses ( In thousands of yen )80,35966,15536,15335,003

976

Property management fees

40,73823,237

11,26811,023

503

26

8

8

8

120

－
(Note)－(Note)－(Note)

21,982

19,82012,967

10,620

-

3,195

1,694

126

195

123

529

230

154

86

91

Trust fees and other expenses

13,887

21,163

11,62813,067

137(3)NOI(=(1)-(2)) ( In thousands of yen )141,738

82,57447,41635,23335,941

32,12029,653

19,154(4)Depreciation ( In thousands of yen )26,36912,728

10,254

4,874

9,569

6,581

5,131

4,939

(5)Rental operating income (=(3)-(4)) ( In thousands of yen )115,368

69,84537,16230,35826,372

25,53824,521

14,215

4,588

2,259

-

-

-

-

-

137,149

80,31547,41635,23332,12029,653

19,154

Lease Information

Taxes
Income andRetained Earnings Utilities
Information
for the 1st Interim Repairs and maintenanceFiscal Period
Insurance(6)Capital expenditures ( In thousands of yen )(7)NCF (=(3)-(6)) ( In thousands of yen )35,941

Note: We have not obtained consent from the tenants of the relevant property to release the information from the table.

43

Earnings Performance for the Individual Properties (2)Location

Greater Osaka area

Property No.

O-1

O-2

O-3

Property Name

BlumerMaitamonLife Takadono(Land)

Acquisition Date

February 10,
2015

February 10,
2015

Price
Information

N-2

N-3

F-1

Kahma Home
K’s Denki
Valor
Center Nakagawa
Nakagawa
Ichinomiya-Nishi
Tomita (Land)
Tomita (Land)
February 10,
February 10,
February 10,
2015
2015
2015

Piago Kahma
Home Center
Omihachiman
February 10,
2015

Tokureishi and other areas
R-1

R-2

R-3
Super Sports
Xebio
Aomori-Chuo
February 10,
2015

Sunny Noma

Roseo Mito

February 10,
2015

February 10,
2015

K’s Denki
Aomori
HontenFebruary 10,
2015

8,389

2,685

2,140

2,311

2,174

889

1,497

9,675

1,469

898

Percentage of total portfolio

10.4%

3.3%

2.6%

2.9%

2.7%

1.1%

1.9%

12.0%

1.8%

1.1%

Net book value ( In millions of yen )

8,537

2,727

2,188

2,351

2,213

907

1,541

9,817

1,505

918

46

1

2

1

1

1

1

1（22）

1

1

30,037.11

4,437.07

14,313.00

9,447.48

45,654.67

10,083.41

4,437.07

14,313.00－(Note 1)2,814.67

29,210.10－(Note)

2,814.67

45,654.67

10,083.41－(Note)

Occupancy ratio as of March 31, 2015

97.2%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Operating periods

50days50days50days50days50days50days50days50days50days50days(1)Rental and other operating revenues ( In thousandsof yen )129,339

97,414

Rental revenues

99,56887,551Other operating revenues

29,771

9,863(2)Property-related expenses ( In thousands of yen )46,117

14,503

Property management fees

16,526－(Note)－(Note)

2

Income andRetained
Earnings
Information
for the 1st
Interim Fiscal
PeriodN-1

Fukuoka area

Acquisition price ( In millions of yen )Number of tenants
Lease
Information

Greater Nagoya area

Leasable floor area (m )2Leased floor area (m )－(Note)－(Note－(Note)

9,447.48－(Note)－(Note)－(Note)

5,132

Taxes

28

Utilities

23,728

8,079

Repairs and maintenance10-

Insurance

231

183

Trust fees and other expenses

5,592

1,098

(3)NOI(=(1)-(2)) ( In thousands of yen )83,222

9,168

26,765

18,134

21,253

6,938

12,227

82,911

15,0338,737(4)Depreciation ( In thousands of yen )16,461

-

3,413

-

4,830

-

4,744

13,936

2,111

1,624

(5)Rental operating income (=(3)-(4)) ( In thousands ofyen )66,761

9,168

23,352

18,134

16,423

6,938

7,483

68,975

12,922

7,112

-

-

-

-

-

-

-

-

-

-

83,222

9,168

26,765

18,134

21,253

6,938

12,227

82,911

15,033

8,737(6)Capital expenditures ( In thousands of yen )(7)NCF (=(3)-(6)) ( In thousands of yen )8

Note: We have not obtained consent from the tenants of the relevant property to release the information from the table.

44Interim Balance Sheet(in thousands of yen)
Reporting Period(As of March 31, 2015)(in thousands of yen)
Reporting Period(As of March 31, 2015)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Consumption taxes receivable
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets
Leasehold right in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Long-term deposits
Total investments and other assets
Total noncurrent assets
Deferred assets
Deferred organization expenses
Investment unit issuance costs
Total deferred assets
Total assets

2,717,508
6,905,850
187,674
25,47675
1,935,654
11,772,240

22,506,324(117,239)
22,389,084
1,102,263(8,704)
1,093,558
21,302(151)
21,151
6,847
(101)
6,745
58,536,091
12,02582,058,657

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

284,0252,000,000
79,4214,663
1,814
423,296
635,108
3,428,329
24,850,000
8,119,399
22, 758
32,992,158
36,420,487

57,857,000
334,085
334,085
58,191,085
58,191,085
94,611,573

175,056
2,425
177,482
10,0005,270
269,293
78,530363,093
82,599,233
45,576
194,523
240,100
94,611,573

45

Interim Statement of Income and Retained Earnings(in thousands of yen）

(in thousands of yen)

Reporting Period

Reporting Period(From October 3, 2014

(From October 3, 2014
to March 31, 2015)

to March 31, 2015)
Rental and other operating revenues:
Operating revenues

Rental revenues

726,354

Rent revenue-real estate

822,652

Rental revenues from limited proprietary rights of land

45,575

Other lease business revenue

180,487

Common area charges

50,722

Subtotal

822,652

Total operating revenues

1,003,139

Operating expenses

Others:Expenses related to rent business

422,483

Parking space rental revenues

24,540Asset management fees

54,724

Utility charge reimbursement

78,134

Asset custody fees

1,426

Miscellaneous

77,812Administrative service fees

5,590

Subtotal

180,487

Directors' compensation

4,431

Total rental and other operating revenues

Other operating expenses

15,493

Property management fees and facility management fees

119,953

Total operating expenses

504,150

Utilities

97,199498,989

Taxes

1,265

Repairs and maintenance

5,345
1,915

Operating income
Non-operating income

1,003,139

Interest income

347

Insurance

Total non-operating income

347

Trust fees

2,547

Depreciation

127,571

Non-operating expenses
Interest expenses

36,431Others

66,684

Borrowing related expenses

111,408

Total property-related expenses

422,483

Net operating income from real estate rental business

580,656

Amortization of deferred organization expenses

4,984

Amortization of investment unit issuance costs

10,618

Total non-operating expenses

163,441

Ordinary income

335,894

Income before income taxes

335,894

Income taxes
Current
Deferred
Total income taxes

1,884
(75)
1,808

Net income

334,085

Unappropriated retained earnings

334,08546

Interim Statement of Changes in Net Assets(in thousands of yen)
Reporting Period(From October 3, 2014
to March 31, 2015)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of deferred organization expenses
Amortization of investment unit issuance costs
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in long-term deposits
Payment of organization expenses
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Purchase of intangible assets in trust
Payments for lease and guarantee deposits
Payments for lease and guarantee deposits in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Payments of restricted bank deposits in trust
Proceeds from restricted bank deposits in trust
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Proceeds from issuance of investment units
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period

335,894
127,655
4,984
10,618(347)
36,431(187,674)(1,935,654)(25,476)
281,766
69,896423,296
635,108(269,293)(78,530)(50,560)(621,885)
347(31,767)(70)(653,376)(82,159,885)(2,509)(176,383)(10,000)(5,270)(122,389)
8,241,789(3,917,992)
71,892(78,080,747)
3,322,500(1,322,500)
24,850,000
57,661,383
84,511,383
5,777,258
5,777,258

47

Unitholder Information (as of Mar. 31, 2015)
Ownership ratio by investor type

Major unitholders

3.0%
21.3%

# of
units held(%)(Note)

THE MASTER TRUST BANK OF JAPAN, LTD.

16,780

6.43%

2JAPAN TRUSTEE SERVICES BANK, LTD.

16,383

6.28%

3

TRUST & CUSTODY SERVICE BANK, LTD.

13,2555.08%

4

BARCLAYS BANK PLC A/C CLIENT
SEGREGATED A/C PB CAYMAN CLIENTS

8,091

3.10%

5

STATE STREET BANK AND TRUSTCOMPANY 505225

7,604

2.91%

6

THE BANK OF NEW YORK, NON-TREATYJASDEC ACCOUNT

7,085

2.71%

7

NORTHERN TRUST CO. (AVFC) RE
COLONIAL FIRST STATE INVESTMENTS
LIMITED

6,335

2.42%

8

KENEDIX, INC.

5,750

2.20%

9

STATE STREET BANK AND TRUSTCOMPANY

5,389

2.07%

10

STATE STREET BANK AND TRUSTCOMPANY 505001

4,685

1.79%

Rank

Name

1
260,750
units

43.1%

26.3%

6.2%
個人・その他
Individuals
and others(55,594 units)

金融機関
その他国内法人
外国人
Financial
Otherdomestic
Foreigninstitutions
corporations
Investors(68,675 units) (16,283 units)(112,403 units)

証券会社
Brokerage
firms(7,795units)

Number of unitholders by investor type0.7% 3.4%

1.1% 0.2%

11,237
unitholders

94.6%

Individuals
個人・その他
and others(10,626)

Financial
金融機関
institutions
(79)

Other
domestic
その他国内法人
corporations(384)

Foreign
外国人
Investors(128)

Brokerage
証券会社
firms
(20)

Note: figures are based on # of units and rounded down to the 2nd decimal place48

Portfolio Overview
Total acquisition priceTotal appraisal value

Portfolio Appraisal
NOI yield

Weighted averageoccupancy rate

Number of tenants

JPY91,843 mn

JPY93,574 mn

5.4%

99.4%

322

No.

Name of property

Location(city/ward, prefecture)

Acquisition price(before tax,
JPY mn)Appraisal
value(JPY mn)

Appraisal
NOI yield(%)

Occupancy(note 1)
rate(%)

Number of(note 1)tenants

T-1

Fululu Garden Yachiyo

Yachiyo, Chiba

14,84815,000

5.2

100.0

53

T-2

MONA Shin-Urayasu

Urayasu, Chiba

8,063

8,340

6.1

100.0

75

T-3

Passaggio Nishiarai

Adachi ward, Tokyo

5,850

6,020

5.0

99.1

41

T-4

Daikanyama Address Dixsept

Shibuya ward, Tokyo

5,390

5,400

4.3

95.2

27

T-5

Unicus Ina

Kitaadachi-gun, Saitama

4,379

4,410

5.4

100.0

1

T-6

Yorktown Kita-Kaname

Hiratsuka, Kanagawa

4,000

4,120

5.4

100.0

1

T-7

Unicus Yoshikawa

Yoshikawa, Saitama

3,600

3,630

5.1

100.0

11

T-8

Sports Club Renaissance Fujimidai

Nerima ward, Tokyo

2,586

2,600

4.9

100.0

1

O-1

Blumer Maitamon

Kobe, Hyogo

8,389

8,520

5.8

97.2

46

O-2

Life Takadono (Land)

Osaka, Osaka

2,685

2,700

4.8

100.0

1

O-3

Piago Kahma Home Center Omihachiman

Omihachiman, Shiga

2,140

2,390

7.5

100.0

2

O-4

Blumer HAT Kobe

Kobe, Hyogo

11,000

11,200

5.3

99.5

43

N-1

Kahma Home Center Nakagawa Tomita (Land)

Nagoya, Aichi

2,311

2,380

5.2

100.0

1

N-2

Valor Ichinomiya-Nishi

Ichinomiya, Aichi

2,174

2,190

5.9

100.0

1

N-3

K's Denki Nakagawa Tomita (Land)

Nagoya, Aichi

889

903

5.2

100.0

1

F-1

Sunny Noma

Fukuoka, Fukuoka

1,497

1,500

5.4

100.0

1

R-1

Roseo Mito

Mito, Ibaraki

9,675

9,780

5.7

94.6

21

R-2

K's Denki Aomori Honten

Aomori, Aomori

1,469

1,590

6.7

100.0

1

R-3

Super Sports Xebio Aomori-Chuo

Aomori, Aomori

898

901

6.4

100.0

1

NEW

Note 1: As of Mar. 31, 2015. For occupancy rate, figures are rounded to the 1st decimal place. End tenants of each property are counted for "Number of Tenants.“ The total figures include Blumer HAT Kobe acquired on Apr 16, 2015

49

Portfolio Overview
Greater Osaka area
O-1 Blumer Maitamon

Tokureishi and other areas
Super Sports Xebio
R-2 K's Denki Aomori Honten R-3
Aomori-Chuo

Tokyo metropolitan area

R-1 Roseo Mito

Life Takadono

O-2 (Land)

Fukuoka area
Piago Kahma Home
O-3 Center Omihachiman

T-1 Fululu Garden Yachiyo

T-2 MONA Shin-Urayasu

T-3 Passaggio Nishiarai

T-4 Dixsept

T-5 Unicus Ina

T-6 Yorktown Kita-Kaname

T-7 Unicus Yoshikawa

T-8 Renaissance Fujimidai

Daikanyama Address

F-1 Sunny NomaSports ClubO-4 Blumer HAT Kobe

Greater Nagoya area
Kahma Home Center
Nakagawa Tomita
N-1 (Land)

NSC

SM

CSC

Urban Station-Front
Shopping Center

N-2 Valor Ichinomiya-Nishi

K's Denki Nakagawa

N-3 Tomita (Land)

SS

50

CSC Community
Shopping Center

Fululu Garden Yachiyo
Acquisition price

JPY14,848 mn

Location

Yachiyo, Chiba

Land area

Ito-Yokado building:
22,207.34 m2
Specialty store building: 23,292.14 m2

GFA

Ito-Yokado building:
56,960.84 m2
Specialty store building: 65,698.32 m2

Core tenant

Ito-Yokado Co., Ltd.

Appraisal NOI

JPY773 mn

Appraisal NOI yield

5.2%

1. Property features
 Opened in October 2002
 Competitive tenants include a major casual clothing store, sporting goods store,
a baby goods store and a specialty discount retailer

Enlarged view

Yachiyo GC

文 The top retail facility within a 3 km radius
 Conveniently located on National Route 16 with easy car access文

Yachiyo Wide-area Park文

文

Murakami Station

Yachiyo Chuo

2. Overview of retail trade area
 An 8% increase in population within a 1 km radius from 2005 to 2010

Toyo Rapid Railway
Keisei Main Line
Shizu
Katsutadai
Keisei Owada
Yukarigaoka
Takanodai CC

Yachiyo City Office

Fululu Garden Yachiyo

Toyo Katsutadai Station

Yachiyodai

Katsutadai Station
文

51

NSC Neighborhood
Shopping Center

Blumer Maitamon
Acquisition price

JPY8,389 mn

Location

Kobe, Hyogo

Land area

54,838.70 m2

GFA

36,349.60 m2

Core tenant

EDION Corporation

Appraisal NOI

JPY490 mn

Appraisal NOI yield

5.8%

1. Property features
 Consists of approximately 45 tenants, including a supermarket (grocery), an
electronic appliance store, a major clothing store and a baby goods store as thecore tenants

Kobe-Awaji-Naruto Expressway

Tamon-Kodera Line

 Large parking area encircled by a two-story retail building

Shin-Kobe
Gakuentoshi• 1 km radius: 18,000 people• 3 km radius: 179,000 people• 5 km radius: 414,000 people The surrounding area encompasses the corner of a new residential development
and the property continues to benefit from such expansions

Sun Kobe Golf Garden

文

Maitamonguchi

Blumer Maitamon

2. Overview of retail trade area
 Population in the surrounding retail trade area:

Enlarged view

Gakuen-minami IC
Daini- Shinmei Kita Line文

Sannomiya

Tarumi Police Station
文

Akashi Maiko
Gakuen-minami IC
Tarumi

文

文
文
文

文
文

Tarumi JCT

文

Akashi Kaikyo Ohashi Bridge

52

NSC Neighborhood
Shopping Center

Unicus Ina

1. Property features
 Opened in April 2006
 Core tenants: a supermarket (grocery), a drug store, a specialty discount retailer,
clothing stores and a movie rental store
2. Overview of retail trade area
 The surrounding area is within a land readjustment project area designated forurbanization
 The population in the surrounding areas has continued to increase on the backof continued development and sale of residential properties
 A marked increase in Ina city's population relative to its surrounding cities with a
5.8% population increase during the years 2009–2014

Acquisition price

JPY4,379 mn

Location

Kitaadachi-gun, Saitama

Land area

32,553.16 m2

GFA

14,160.04 m2

Core tenant

P&D Consulting

Appraisal NOI

JPY235 mn

Appraisal NOI yield

5.4%

Joetsu Shinkansen Line
Inamachi Town Office
Uchijuku
Hanuki
Inachuo
Okegawa
Shiku
Kita-ageo
Maruyama
HasudaAgeo

文

Enlarged view

Kenmin Katsudo
Sougou Center

文

Choseishiko Memorial Park

Shonan文

Unicus Ina
文

文

Hanuki Station
Omiya

53

Urban Station-Front
Shopping Center

MONA Shin-Urayasu

1. Property features
 Opened in November 1990
 Directly accessible by a pedestrian walkway from Shin-Urayasu Station which hasa daily passenger traffic of over 100,000 people Approximately 70 tenants, ranging from supermarkets (grocery), clothing stores,
restaurants, commercial goods stores to service businesses
2. Overview of retail trade area
 Population in the surrounding retail trade area:• 1 km radius: 33,000 people• 3 km radius: 205,000 people• 5 km radius: 510,000 people• 4–5% of population increase in 3–5 km radius from 2005 to 2010 17 minute train-ride from Tokyo Station and only 1 station from Maihama station,
where Tokyo Disney Resort is located The area surrounding Shin-Urayasu Station, an entrance to highly popular
residential areas, has significant growth potential as a commercial district

Acquisition price

JPY8,063 mn

Location

Urayasu, Chiba

Land area

15,875.86 m2 (for a single building)GFA76,767.24 m2 (for a single building)Core tenant

Undisclosed

Appraisal NOI

JPY493 mn

Appraisal NOI yield

6.1%

文

Urayasu City Office

文

Urayasu IC

文

文

文

Shin-Urayasu Station
文
文

MONA Shin-Urayasu

文
文

文

Juntendo University
Urayasu Hospital

文

文

Meikai University

54

NSC Neighborhood
Shopping Center

Unicus Yoshikawa

 Opened in September 2011
 A supermarket (grocery) and a hardware store are its core tenants, inaddition to 8 specialty and service stores such as a dental office, a dry
cleaner, a beauty salon, a music school and a veterinary clinic
 Conveniently located on a heavily traveled road that runs across
Yoshikawa city
Acquisition price

JPY3,600 mn

Kitakoshigaya

Nakagawa River
Yoshikawa City Office

Koshigaya

Location

Yoshikawa, Saitama
22,239.94 m2

GFA

11,450.70 m2

JPY9,675 mn

Location

Mito, Ibaraki

Land area

73,940.62 m2

GFA

A:
B:
C:
D:
E:
F:

Enlarged view

138.32 m2
9,684.79 m2
4,549.60 m2
13,047.79 m2
330.75 m2
265.65 m2

Kohnan Shoji Co., Ltd.
JPY184 mn
5.1%Core tenant

LIXIL Viva Corporation

Appraisal NOI

JPY554 mn

Kairaku-en

Mito

Ibaraki Prefectural
Government
Mito-minami IC
Ibarakimachi
Higashi IC

Enlarged view

Ibaraki Prefectural
Government

Roseo Mito

文

文

Appraisal NOI
yield

Acquisition price

Musashino Line文

Appraisal NOI Opened in April 2009, with a supermarket (grocery) and a hardware store as
its core tenants
 Located in a highly accessible area by car Families with young children in the surrounding area are increasing due tothe abundance of new residential developments

Yoshikawaminami

Koshigaya Laketown

Shin-Misato

Core tenantRoseo Mito

Yoshikawa

Minamikoshigaya

Land area

NSC Neighborhood
Shopping Center

Unicus Yoshikawa
Yoshikawa Station
文

文

Appraisal NOI
yield

5.7%

文

55

Urban Station-Front
Shopping Center

Urban Station-Front
Shopping Center

Passaggio Nishiarai

Daikanyama Address Dixsept

 Opened in April 2010
 Highly stylish building with an atrium at the center and retail stores
located from the basement floor to the fourth floor The surrounding area has recently experienced a significant inflow offamilies with young children due to large-scale residential development

 Opened in August 2000 as a landmark property in Daikanyama The property occupies the retail section of a large multi-complex facility
in Daikanyama
 In addition to sophisticated and stylish retailers typically found in
Daikanyama, the property also houses tenants that cater to day-to-day
needs of customers, such as a supermarket (grocery), a drug store and avariety goods store

Acquisition price

JPY5,850 mn

Acquisition price

Location

Adachi ward, Tokyo

Tobu Daishi Line

JPY5,390 mn
文Land area

5,079.68 m

Ring Road No.7
Nishiarai
Station2
文

GFA

21,996.90 m

Core tenant

Undisclosed

Appraisal NOI

JPY289 mn
5.0%

Shibuya ward, Tokyo

Land area

17,262.00 m2(for a single building)GFA

92,064.43 m2(for a single building)Core tenant

Undisclosed

Appraisal NOI

JPY232 mn

Appraisal NOI yield

4.3%

2

Passaggio Nishiarai

文Appraisal NOI yield

Location

Daikanyama Address Dixsept
T-siteDenmark Embassy
Daikanyama Station

Komazawa-dori

文56 Opened in April 2009 with York Mart, a supermarket (grocery), as its coretenant, in addition to an electronics appliance store, a drug store, aspecialty discount retailer and restaurant The property plays an important role in the local community due to its
central location and the synergy between the tenants, which cater to theneeds of local area customers
Acquisition price
Location
Land area

JPY4,000 mn

IseharaHiratsuka, Kanagawa

8,528.68 m

Core tenant

YorkMart Co., Ltd.

Appraisal NOI

JPY214 mn

Appraisal NOI yield

5.4%

 A well-equipped membership-based health club with a gym, two studios
and a pool on the basement to the second floors

Acquisition price

JPY2,586 mn
Nerima ward, Tokyo
1,729.24 m

2

GFA

3,109.74 m

2Core tenant

Renaissance Inc.

Appraisal NOI

JPY127 mn

Appraisal NOI yield

4.9%

Land area

2

GFA

Sports Club Renaissance
Fujimidai

Ohne Park
Tokai-daigaku-mae Station

文

文

文

文

Tokai 文University

9,996.36 m

Specialty Store

Location

Tsurumaki-onsen
Tokai-daigaku-mae
Hiratsuka IC

2

SS

Yonsho-dori

NSC Neighborhood
Shopping Center Yorktown Kita-Kaname

Sports Club
Renaissance Fujimidai

文

文

Fujimidai Station

Yorktown Kita-Kaname

文
文

文

Tokai University
文

文

Enlarged view

57

SM

Supermarket

Life Takadono (Land) Life Takadono, a supermarket, is expected to open on the land in thesummer of 2015. Life Corporation, the anticipated core tenant, operates
numerous other stores in the surrounding area based on the"dominant strategy" Located in a densely populated area bordering central Osaka, which isserviced extensively by multiple major train lines
Acquisition price

JPY2,685 mn

NSC Neighborhood
Shopping Center

Piago Kahma Home Center
Omihachiman Opened in 2005 and consists of two buildings, Piago Omihachiman, a UNY
Group Holdings supermarket, and Kahma Home Center Omihachiman The property's retail trade area surrounding Omihachiman Station consists
primarily of residential properties including condominiums, with a highconcentration of families with young children within a 1 km radius
Acquisition price

JPY2,140 mn

Location

Omihachiman, Shiga

Land area

29,410.00 m2

GFA

12,283.85 m2(aggregate of 2 buildings)

Core tenant

UNY Co., Ltd.

Appraisal NOI

JPY161 mn

Appraisal NOI yield

7.5%

Lake Biwa

Sekime-takadono

Location

Osaka, OsakaLand area

4,437.07 m2

GFA‐

Core tenant

Life Corporation

Morishouji

Tenjinbashisuji 6-chome

SekimeTanimachi Line
Osaka
Sakuranomiya
Tenma
Umeda
KyobashiAzuchi

ShiginoOsaka Castle

Life Takadono
文

Omihachiman City Office
Omihachiman

Enlarged view

文

文
文

文

Appraisal NOI

JPY127 mn

Sekime-Takadono Station

Omihachiman Station
文

文

Appraisal NOI yield

4.8%

文

Enlarged view

Sekime-Seiiku Station

Piago Kahma Home Center
Ohmihachiman

58

SS

Specialty Store

Kahma Home Center Nakagawa Tomita (Land)
K's Denki Nakagawa Tomita (Land) An integrated retail zone is formed in the surrounding area, together with asupermarket (grocery) and a sporting goods store on the adjacent lot All stores in this zone were opened in 2013 and create synergy witheach other
Kahma Home Center Nakagawa Tomita (Land)
Acquisition price

JPY2,311 mn

Location
Land area
GFA
Core tenant
Appraisal NOI
Appraisal NOI yield

Nagoya, Aichi
17,431.00 m2‐
DCM KAHMA CO.,LTD.
JPY120 mn
5.2%

K's Denki Nakagawa Tomita (Land)
Acquisition price
JPY889 mn
Location
Nagoya, Aichi
Land area
5,560.23 m2
GFA‐Core tenant
Undisclosed
Appraisal NOI
JPY46 mn
Appraisal NOI yield
5.2%

NagoyaHarutaHatta
Fushiya

Arako

Shonai River

Haruta Station

Shinkawa River文NSC Neighborhood
Shopping Center

Valor Ichinomiya-Nishi

 Opened in 2002, with Valor, a successful supermarket chain in the Chubu
region, as its core tenant, in addition to an electronic appliance store and ahealth club operated by Valor Group Located 1.1 km from major train stations which are a 10-minute train-ridefrom Nagoya
 The residential area surrounding Owari Ichinomiya Station, conveniently
serviced by various railways and roads, is a commuter town for Nagoya

Acquisition price

JPY2,174 mn

Location

Ichinomiya, Aichi

Land area

16,736.18 m2

GFA

9,447.48 m2

Core tenant

Valor Co., Ltd.

Appraisal NOI

JPY128 mn

Appraisal NOI yield

5.9%

Owari Ichinomiya

Ichinomiya JCT

Kiyosu JCT

Nagoya文

Ichinomiya City Office

K's Denki Nakagawa Tomita

Valor Ichinomiya-Nishi
Fushiya Station

文

文
文

文

Shubun University

Hachikuma-dori
文

文

Kahma Home Center
Nakagawa Tomita

Enlarged view

文
文

Enlarged view

59

SM

Supermarket

SS

Sunny Noma

Specialty Store

K's Denki Aomori Honten
Super Sports Xebio Aomori-Chuo
Ouu Main Line

Aomori Prefectural
Government
Aomori City Office

AomoriShin-aomori
Tohoku Shinkansen Line

Aomori Expressway

Super Sports Xebio Aomori-Chuo
文
K's Denki
Ito-Yokado Aomori
Aomori Honten
Aomori Kyoritsu Hospital
Aomori-chuo IC

Murakami Hospital
Sanwa Arena
Aomori

Enlarged view The supermarket which was originally built in 1970 and enjoyed strong
support from the local community, was rebuilt in 2007
 Sunny Noma is the strongest performing supermarket among other Sunnysupermarkets that operate in the surrounding area
 The closest station to the property is 3 train stops, or a 5 minute ride, fromthe central urban areas of Fukuoka
 The area is popular among single people and families with young children
Acquisition price

Fukuoka City Subway Kuko Line

JPY1,497 mn
Ohori Park

Location

Fukuoka, Fukuoka

Land area

5,973.03 m2(including leaseholdinterest)

GFA

2,814.67 m2

HakataK's Denki Aomori Honten

Super Sports Xebio Aomori-Chuo

Acquisition price

JPY1,469 mn

Acquisition price

JPY898 mn

Location

Aomori, Aomori

Location

Aomori, Aomori

Land area

7,725.42 m2

GFA4,684.12 m2

Takamiya

Enlarged view

Takamiya Station

2

Tsutaya/Hard Off:K's Denki:

8,872.04 m
8,296.06 m2

GFA

Tsutaya/Hard Off:K's Denki:

2

Core tenant

Denkodo Co., Ltd.

Core tenant

XEBIO Corporation

Appraisal NOI

JPY98 mn

Appraisal NOI

JPY57 mn

Appraisal NOI yield

6.7%

Appraisal NOI yield

6.4%

Land area

Ohashi

文

3,644.72 m
6,364.50 m2

文

文

Core tenant

Fukuoka
AirportNishitetsu
Fukuoka(Tenjin) Opened in 2005 in Hamada District in Aomori, which has the highest
concentration of retail properties with a significant inflow of suburban retailers,
including Ito-Yokado, since a land readjustment project launched in 1996
 With National Route 103 on the east and Route 120 on the west running
through the city and National Route 7 (Aomori Kanjo Bypass) on the south, thedistrict brings customers from a broad retail trade area that covers the entire
Aomori city area

Seiyu GK文
文

Appraisal NOI

JPY81 mn

Sunny Noma
文
文

Appraisal NOI yield

5.4%

文

文

Kyushu University

文

Ohashi Station

文60

Disclaimer

The contents in this document are provided solely for informational purposes and not intended for the purpose ofsoliciting investment in, or as a recommendation to purchase or sell, any specific products.
This document contains charts/diagrams/tables/data and others Kenedix Real Estate Fund Management ("the AssetManager") created based on data, indices, etc. published by third parties, in addition to the information related toKenedix Retail REIT Corporation ("the Investment Corporation"). This document also contains the current
analyses/judgments/other opinions of the Asset Manager.
The Asset Manager is a financial instruments business operator under the Financial Instruments and Exchange Act.
The information provided herein is unaudited and hence no assurance or warranties are given with respect to theaccuracy or completeness thereof. Also, please be aware that the analyses/judgments/other opinions provided by the
Asset Manager may change or cease to exist without prior notice of any kind as they are based on current assumptions
and beliefs of the Asset Manager.
Neither the Investment Corporation nor the Asset Manager shall be liable for any errors/inaccuracies of thedata/indices/other information published by third parties (including the data based on the appraisal report).
This document also contains forward-looking statements and anticipation of future results for the Investment
Corporation. However, no guarantees are given with respect to the accuracy of these statements/anticipation.
Revised editions of this document will be posted on our website (http://www.krr-reit.com/) should there be majorcorrections going forward.

61