Summary of Presentation0

Table of contents

Section 1

31st fiscal period (2020/10) management highlights
and future initiatives

P. 2

Section 2

31st fiscal period (2020/10) results,
32nd fiscal period (2021/4) earning forecasts and33rd fiscal period (2021/10) earning forecasts

P. 8

Section 3

Portfolio overview

P. 11

Section 4External growthP. 14

Section 5

Internal growthP. 18

Section 6

Financial strategy

P. 29

1

Section 1
31st fiscal period (2020/10) management highlights
and future initiatives

2

31st fiscal period (2020/10) management highlights
and future initiatives
31st fiscal period (2020/10)
DPU(actual)

AUM

443.7

bn
yen

Increased by 10.9 bn yen in 31st fiscal period
through asset reshuffle

Gain onsale of 2
properties

1.05

bn
yen

Expected gain on sale of a property by 1.12 bn
yen in 32nd fiscal period

Future initiatives



15,384
Increase inmonthly rent
upon tenant
turnover

6.2+6.7% period over period
yen +6.1% from initial forecastmnyenMore than 90% of the number of rent increase
contracts upon tenant turnover

Increase inmonthly rent
upon rent
revision

7.0 mnyen

Successful results in rent revision due to earlynegotiation under the COVID-19 pandemic

Interest-bearing
debt averageinterest rate

0.94%

Reduced financial cost through refinancing

LTV

43.9%

Maintained stable financial base by keeping
LTV at a conservative level

Aim for sustainable growth through asset reshuffle and exploring quality property acquisition
opportunities while keeping eyes on the real estate trading market
Flexible leasing and management in response to diversifying demand while keeping an eye on trends
in the office leasing market
Focus on further reducing interest costs and diversification maturities while maintaining good
relationships with financial institutions
Aim for compatibility between sustainable growth and social responsibility through continuous
initiatives for improving sustainability
3Impact, etc. of COVID-19
Requests for rent reduction or exemption from tenants（Note 1）

Reasons for move-ins/outs（Note 2）• Trends in requests for reduction or exemption/ deferral, which increased
due to the declaration of a state of emergency by the government
subsided as economic activity resumed• Confirmed demand for offices aimed at expansion and relocation under
the COVID-19 pandemic

Serviceprovider
9.8%

Requests from159 tenants*(13.9%）End o 31st
Fiscal period（2020/10） ）1,115 tenants

23 of these tenants
which reduced or
exempted based on
individual
circumstances

Dining9.1%

Office52.4%

Type of tenants
requesting rent
reduction or
exemption*131 tenants as of June 16,2020
Gym
1.7%

Floor expansion
Reasons for move-ins

School9.0%

30th fiscal
第30期
period(2020/4)（20/4期）

Floor reduction
Other/unknown( ) Number of move-in

78.1%
（25）

31st fiscal
第31期
period（20/10期）(2020/10)

3.1% 18.8%
（1）
（6）

85.2%
（23）

14.8%
（4）

Reasons for move-outs
Clinic
8.5%

Retail store
6.5%
Rental conference
3.0%

30th
fiscal第30期
period（20/4期）(2020/4)

10.3%
（3）

69.0%
（20）

31st
fiscal第31期
period（20/10期）(2020/10)

9.1%
（4）

77.3%
（34）

20.7%
（6）
13.6%
（6）

Impact of rent reduction or exemption on cash flow

The balance of reserve for reduction entry（Note 3）• Responding mainly to commercial and customer-visiting tenants• In the event that a decline in rent revenue worsens due to temporarychanges in earnings, restrictions on economic activities
accompanying the re-expansion of infectious diseases, such as theoccurrence of loss on sale, etc., an adjustment to the assumed
amount of transfer and the reversal of the balance will be considered

31st fiscal
period(2020/10)

32nd fiscal
period(2021/4)

33rd fiscal
period(2021/10)
Onward-8.7

Expected to be positive
due to the contributionof the amount ofcollection of rent
reduction or exemption（mn yen）

3.9-53.5
Decrease inrevenue within
expectations,contributing toan upside in
dividend

End of 30th
fiscal period(2020/4)

End of 31st
fiscal period(2020/10)

End of 32nd
fiscal period(2021/4)（Estimate）

2.77 bnyen

3.49 bnyen

4.11 bnyen

Utilizing gain on sale of
Utilizing gain on sale of
KDX Nihonbashi Honcho Building and KDX Shin-Nihonbashi Building
KDX Nihonbashi Edo-dori Building
Note 1：The ratio is based on contracted rents up to November 19, 2020. Type of tenants requesting rent reduction or exemption is classified and aggregated according to actual usage, etc. under the judgment of the Asset
第31期
第32期
第33期
Management
Company
Note 2：The above
data is based on the survey （21/4期）
compiled by the Asset Management
Company with regard to reasons for office relocation of relevant tenants. We classify responses of the survey into three categories; "Floor（20/10期）（21/10期）
expansion", "Floor reduction" and "Other/unknown“ and calculate the ratio of respective categories to the all cases. For move-in, the figures are based on the number of tenants on office floors on the second floor or以降
above. For move-out, the figures are based on the number of tenants on all floors except for residential floors
Note 3：Reserve for reduction entry is calculated by either adding provision of reserve for reduction entry or subtracting reversal of reserve for reduction entry stated on Basis for Calculating Cash Distribution for the relevant fiscal
periods to/from the balance of reserve for reduction entry on the balance sheet as of the end of the relevant fiscal periods
The balance at the end of 32nd fiscal period (2021/4) may change in the future due to the expected amount as of December 14, 2020

4

DPU history+14.3% in 2 years（yen）

Aim to maintain and improve the level of DPU

Increase due to gain on sale of property

14,50014,412
13,71913,45815,38415,08015,180

792

785

1,179

14,00014,001

14,00013,639619

446

13,10013,012

第27期

第28期

第29期

28th
fiscal（19/4期）period実績(2019/4)

27th
fiscal（18/10期）
period実績(2018/10)

14,412

14,500

第30期

第31期（20/10期）
当初予想（6/16）

14,592

14,295

13,63929th
fiscal（19/10期）
period実績(2019/10)

30thfiscal（20/4期）period
実績(2020/4)

第31期
31stfiscal（20/10期）
period修正予想（6/26）

第31期（20/10期）
実績

第32期(2020/10)
Initialforecast（June 15,
2020）

Previous
forecast

第33期

32nd
fiscal（21/4期）period
今回予想(2021/4)

33rd
fiscal（21/10期）
period
今回予想(2021/10)

Current
forecast

Forecast

Actual（June 26,2020）

Principal factors for changes in DPU in and after the 30th （2020/4） period（yen）Factor for increase

Factor for decrease

Actual occupancy rate exceeded expectations
and contributed to revenue growth

Actual occupancy rate is expected to decline due to slowdown in backfilling,etc., but revenue is to increase through gain on sale of property

Increase in taxes onproperties acquired

Asset reshuffle +297

Properties
acquiredin 30th FP

188

14,412

第30期…
30th
fiscalperiod(2020/4)

Propertyacquiredin 31st FP

571

Gain onsale ofproperty

Property
Existing
sold
Assetproperties in 31st FP Management
Fee

279

274

420

Requests for rent reduction or exemption
from tenants due to the COVID-19 fellwithin the scope of expectations

Others164792

14,592

第31期…
31stfiscalperiod(2020/10)

Review andAssetreducerepair
Property /maintenance Management
ExistingFeeacquiredcost
properties
in 31st FP

278

77

116

560

Property
soldin 31st FP

135

KDX Hamamatsucho PlaceKDX Yokohama Kannai Building
KDX Iidabashi Building

Property
soldin 32nd FP

200-214 yen-149 yen-58 yenGain onsale ofproperty
Others

1,179

Asset
Management Existing
properties
Fee

293

167

157

Others137

14,001

14,000

第32期…
32nd
fiscalperiod(2021/4)

第33期…
33rd
fiscalperiod(2021/10)

Note ：Figures per unit are calculated based on the number of investment units issued and outstanding as of the end of each fiscal period. The same applies hereinafter5

Portfolio appraisal profit and NAV per unit
Changes in portfolio appraisal profit amount and ratio (Note 1)

Changes in NAV per unit (Note 2)• Both appraisal profit amount and ratio reached a record high since listingat the end of 31st fiscal period (2020/10)（bn yen）
1,100
110.0

（%）
25.0

含み益額（左軸）
Appraisal profit amount (left axis)
Appraisal profit ratio (right axis)
含み益率（右軸）

20.7%

21.1%

（yen）

+2.6%

750,000

738,000

21.5%

727,000
719,000

100.0
1,000

20.0
17.6%

700,000
687,000

900
90.0
13.9%

15.0
654,000

800
80.0

650,000
10.0

700
70.0
600,000
5.0

600
60.0

500
50.0

57.0

71.0

85.0

88.2

92.1

第27期
27th
fiscalperiod（18/10期）(2018/10)

第28期
28th
fiscalperiod（19/4期）(2019/4)

第29期
29th
fiscalperiod（19/10期）(2019/10)

第30期
30th
fiscalperiod（20/4期）(2020/4)

第31期
31stfiscalperiod（20/10期）(2020/10)

0.0

550,000

27th
fiscal第27期
period（18/10期）(2018/10)

28thfiscal第28期
period（19/4期）(2019/4)

29th
fiscal第29期
period（19/10期）(2019/10)

30thfiscal第30期
period（20/4期）(2020/4)

31st
fiscal第31期
period（20/10期）(2020/10)

Note 1:Appraisal profit amount is calculated by subtracting book values from appraisal values for all properties owned as of the end of relevant fiscal periods
In addition, appraisal profit ratio is calculated by dividing appraisal profit amount by book value as of the end of relevant fiscal periods (rounded to the first decimal place)
Note 2: NAV per unit is truncated to the nearest thousand yen after subtracting the amount of DPU

6

Memo

7

Section 2
31st fiscal period (2020/10) results,
32nd fiscal period (2021/4) earning forecasts and33rd fiscal period (2021/10) earning forecasts

8

Outline of 31st fiscal period (2020/10) financial results
31st fiscal period (2020/10) actualComparison against 30th fiscal period (2020/4) actual（mn yen）

31st fiscal
period(2020/10)
Forecast

30th fiscal
period(2020/4)
Actual31st fiscal
period(2020/10)
Actual31st (actual) 31st (actual)
vsvs30th (actual) 31st (forecast)Difference
Difference(announced on
Jun. 15, 2020)

A

B

C

C-A

C-B

Operating revenue

15,272

15,631

16,714

1 +1,441

1 +1,083

Operating expense

8,132

8,446

8,380

2

+247

2

-66

Operating income

7,140

7,184

8,334

+1,194+1,150Ordinary income

6,177

6,214

7,311

+1,134+1,096

Net income

6,175

6,213

7,310

+1,134+1,096

DPU (yen)

14,412

14,50015,384

+972

+884

-

-

+718

-

-

1 Increase in operating revenue
Revenue contribution of the properties acquiredin and after 30th fiscal period
Decrease in revenue from the properties soldin 31st fiscal period
Increase in revenue from existing properties
Increase in revenue from utility expense due toseasonal and other factors
Decrease in premium income
Decrease in operating revenue of
Senri LSC Bldg. Hall

2 Increase in operating expense
Decrease in repair/maintenance expense

Provision (+)/reversal (-) ofreserve for reduction entry
Gain/loss on sale ofreal estate
Rental NOIInterest expense, etc.

Increase in depreciation
Increase in Asset management fee

3 Booking of gain on sale of property+1,441 mn yen+325 mn yen-117 mn yen+119 mn yen+103 mn yen-66 mn yen-30 mn yen+247 mn yen-33 mn yen+52 mn yen+180 mn yen+1,057 mn yen

Comparison against 31st fiscal period (2020/10) forecast(announced on Jun. 15, 2020)

-

-

1,057

3 +1,057 3 +1,057

10,676

10,784

11,019

+343

+235

946

953

964

+18

+11

1 Increase in operating revenue
Revenue contribution of the property acquired in
31st fiscal period
Decrease in revenue from the properties soldin 31st fiscal period
Decrease in revenue from utility expense due toseasonal and other factors

2 Decrease in operating expense
Decrease in utility expense due toseasonal and other factors
Increase in Asset management fee
Decrease in repair/maintenance expense

3 Booking of gain on sale of property+1,083 mn yen+245 mn yen-118 mn yen-129 mn yen-66 mn yen-130 mn yen+164 mn yen-43 mn yen+1,057 mn yen
932nd (2021/4) and 33rd (2021/10) fiscal periods earnings
forecasts
32nd (2021/4) and 33rd (2021/10) fiscal periods forecasts(mn yen)
31st fiscal
period(2020/10)
ActualA

32nd fiscal 33rd fiscal 32nd (forecast) 33rd (forecast)vsvsperiodperiod31st (actual) 32nd (forecast)(2021/10)(2021/4)
Difference
Difference
Forecast
Forecast

B

C

B-A

16,714

16,333

15,394

1

-380

1

-939

Operating expense

8,380

8,227

8,435

2

-152

2

+207

Operating income

8,334

8,106

6,959

-227

-1,147

Ordinary income

7,311

7,129

6,000

-181

-1,129Net income

7,310

7,128

5,999

-182

-1,129DPU (yen)

15,384

15,18014,000-204-1,180

Provision (+)/reversal (-) ofreserve for reduction entry

+718

+622

-

-

Gain/loss on sale ofreal estate

1,057

Rental NOI

11,019Interest expense, etc.

964

1,128
10,740939

10,642
950

1

+70
-279
-25

3 -1,128-97+11

Decrease in operating revenue
Revenue contribution of the property acquired in
31st fiscal period
Decrease in revenue from the properties soldin and after 31st fiscal period
Decrease in revenue from existing properties
Decrease in revenue from utility expense due toseasonal and other factors

C-B

Operating revenue-

Comparison between 31st fiscal period (2020/10) actualand 32nd fiscal period (2021/4) forecasts

2

Decrease in operating expense
Decrease in utility expense due toseasonal and other factors
Increase in brokerage fees
Increase in depreciation
Decrease in Asset management fee-380 mn yen+119 mn yen-143 mn yen-240 mn yen-149 mn yen-152 mn yen-185 mn yen+56 mn yen+36 mn yen-49 mn yen

Comparison between 32nd fiscal period (2021/4) forecasts
and 33rd fiscal period (2021/10) forecasts
1

Decrease in operating revenue
Decrease in revenue from existing properties
Increase in revenue from utility expense due toseasonal and other factors

Increase in operating expense
Increase in utility expense due toseasonal and other factors
Increase in taxes
Increase in repair/maintenance expense
Increase in depreciation
Decrease in Asset management fee

Disappearance of gain on sale of property-939 mn yen-67 mn yen+234 mn yen+207 mn yen+160 mn yen+83 mn yen+35 mn yen+37 mn yen-125 mn yen-1,128 mn yen
10Section 3
Portfolio overview

11Portfolio growth and changes in the number of properties• Aim for sustainable growth through asset reshuffle and exploring quality property acquisition opportunities as a basic
policy continuously
Portfolio growth (based on total acquisition price) and the number of properties (Note 1) (Note 2)（bn yen）

Office (left axis)
オフィスビル（左軸）Central urban retail (left axis)
都市型商業施設（左軸）# of properties (right axis)
物件数（右軸）

6,000
600.0

(# of properties)

住宅（左軸）
Residential (left axis)
その他（左軸）Other (left axis)
PO

99
99

98
98

100

Fiscal period with public offering (PO)

90
500.0
5,000

443.7
443.7

432.8

PO

70

PO

400.0
4,000

80

PO

60

PO

300.0
3,000

50
PO
PO

200.0
2,000

40

PO

31
31

30

PO

100.0
1,000

20
69.1

10
00

0
1st

3rd

5th

7th

9th

11th

13th

15th

17th

19th

21st

23rd

25th

27th

29th

30th

31st

fiscalfiscal第31期
fiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscal
第1期
第3期
第5期
第7期
第9期
第11期
第13期
第15期
第17期
第19期
第21期
第23期
第25期
第27期
第29期
periodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiod(2019/10)(2020/4)(2020/10)(2005/10)(2006/10)(2007/10)(2008/10)(2009/10)(2010/10)(2011/10)(2012/10)(2013/10)(2014/10)(2015/10)(2016/10)(2017/10)(2018/10)（05/10） （06/10） （07/10） （08/10） （09/10） （10/10） （11/10） （12/10） （13/10） （14/10） （15/10） （16/10） （17/10） （18/10） （19/10） （20/10）

Note 1: The amount and the number of properties are shown as of the end of each fiscal period. Figures are truncated to the nearest 0.1 billion yen. Figures in this material are truncated to the nearest unit unless otherwise stated
Note 2: Classification by use of owned properties has been changed from 26th fiscal period (2018/4) due to changes in the management guideline on December 1, 2017. The same applies hereinafter

12

Portfolio diversification
Breakdown by asset type (Note1)

Breakdown by region (Note 2)• Portfolio mainly consisted of mid-sized office buildings withadvanced tenant diversification• Plan to maintain approx. 80% investment ratio in the Tokyo
metropolitan area

Other
0.6%
（1 property）

Office Bldg.
(Other)15.3%（8 properties）

Other regional areas
18.5%

End of 31st
fiscal period(2020/10)
98 properties

Office Bldg.
(mid-sized)
84.0%（89 properties）

Tokyo central
5 wards
52.6%

End of 31st
fiscal period(2020/10)
Other Tokyo
metropolitan area
28.7%

Office Bldg.

99.3%（97 properties）

Tokyo metropolitan area

81.4%

Breakdown of the number of tenants by leased floor area (Note 3)300300坪以上
tsubo or More

7.6%
200坪以上200- less than
300 tsubo
300坪未満Less100坪未満
than 100 tsubo

5.8%

100坪以上100- less than
200 tsubo
200坪未満
21.4%

65.2%

End of 31st
fiscal period(2020/10)# of tenants:
1,186

Less than 200 tsubo

86.6%

Note 1: Portfolio breakdown by asset type based on acquisition price (truncated to the first decimal place)
Note 2: Portfolio breakdown by region based on acquisition price (truncated to the first decimal place)
Note 3: Based on the number of tenants in each office building. Tenants leasing more than one property are counted as 1 tenant for each building without aggregating by name-base13Section 4External growth14Outline of the asset reshuffle in 31st fiscal period (2020/10)
Acquired in 31st fiscal period

Sold in 31st fiscal period

Shinbashi M-SQUARE Bright

KDX Nihonbashi Honcho Bldg.

Sold in 32nd fiscal period
KDX Shin-Nihonbashi Bldg.

KDX Nihonbashi Edo-dori Bldg.

Assetreshuffle

Highlight of the asse reshuffle• Acquired a relatively new property in urban central area with scarcity value supported by thesponsor• Reduced the risk of future increases in repair/maintenance expense, etc. by selling three relatively
old properties• Recorded gain on sale of properties over two fiscal periods with an increase in DPU expectedduring COVID-19 crisis

Effects
Growth in DPU（Note 1）

Decreasein average age（Note 2）

（Note 3）31st fiscal
period(2020/10)

Mid-long term
estimate+140 yen/period

Gains on sales ofproperties secured-28.8 years

32nd fiscal
period(2021/4)+1.0 bn +1.1 bn
yenNote 1：Calculated by deducting the estimated costs for borrowing (9.7 billion yen) to allocate funds for acquisition and the sum of the rental operating income of the properties sold in 30th fiscal period (2020/4) fromthe NOI after depreciation (estimate) of the property acquired and then dividing the value by the total number of investment units issued and outstanding as of the end of the 30th fiscal period (2020/4)(truncated to the nearest ten yen)
Note 2: Calculated by deducting the weighted average age of the properties sold at acquisition price from the age of the property to be acquired as of June 30, 2020
Note 3: Gains on sales of properties are estimated based on the book value and selling expenses, etc.

yen

15

Property acquired and sold in and after
the 31st fiscal period (2020/10)
Property acquired

Property nameLocation

Properties soldShinbashi M-SQUARE Bright
Minato-ku, Tokyo

Property nameLocation

KDX Nihonbashi Honcho Bldg. KDX Nihonbashi Edo-dori Bldg.

KDX Shin-Nihonbashi Bldg.

Chuo-ku, Tokyo

Chuo-ku, Tokyo

Chuo-ku, Tokyo

5,110.45m2

1,722.17m2

3,712.25m2

Total floor area

7,327.63m2

Completion date

September 2018

Completion date

January 1984

March 1985

November 2002

Occupancy rate

100%

Book value (Note 4)

3,905 mn yen

1,381 mn yen

1,971 mn yen

Sale price5,000 mn yen

1,550 mn yen

3,200 mn yen

28.0%

12.2%

62.4%

4,950 mn yen

1,510 mn yen

3,140 mn yen

Mitsui Fudosan Co., Ltd.

Mitsui Fudosan Co., Ltd.

Mitsui Fudosan Co., Ltd.

November 12, 2010

August 2, 2016

July 22, 2011

June 30, 2020

June 30, 2020

November 2, 2020

(As of October 31, 2020)

Number of tenants(As of October 31, 2020)

6

Anticipated acquisition price

16,300 mn yen

Appraisal value

20,800 mn yen(As of October 31, 2020)

SellerZao Properties TMK

Acquisition route

Acquired from third parties

Date of acquisition

June 30, 2020

Floor area

Difference between sale price and bookvalue:(Sale price – book value) / book value

Appraisal value(As of April 30, 2020)

Buyer
Acquisition date
Date of sale

NOI yield(estimate) (Note 1)

3.6%

NOI yield (actual) (Note 5)

5.4%

4.4%

5.8%

NOI yield after depreciation(estimate) (Note 2)

3.3%

NOI yield after depreciation(actual) (Note 6)

4.8%

3.8%

4.4%

Appraisal NOI yield (Note 3)

3.7%

Sale price NOI yield (Note 7)

4.3%

3.9%

4.2%

Note 1: Calculated by dividing the annualized NOI (estimate) calculated by the Asset Management Company excluding extraordinary factors for the acquisition year by the acquisition price (rounded to the nearest firstdecimal place; the same applies to the yields hereinafter)
Note 2: Calculated by dividing the annualized NOI after depreciation (estimate) calculated by deducting the depreciation expenses (estimate) from NOI (estimate) by the acquisition priceNote 3: Calculated by dividing the NOI based on the direct capitalization method described in the appraisal report as of October 31, 2020 by the acquisition priceNote 4: The figures indicate the book values as of the end of the 31st（2020/10） fiscal period (rounded down to the million)
Note 5: Calculated by dividing the sum of the NOI (actual) for the 29th (2019/10) and 30th (2020/4) fiscal periods by the acquisition priceNote 6: Calculated by dividing the sum of rental operating income (actual) for the 29th (2019/10) and 30th (2020/4) fiscal periods by the acquisition priceNote 7: Calculated by dividing the sum of the NOI (actual) for the 29th (2019/10) and 30th (2020/4) fiscal periods by the sale price16

Track record of asset reshuffle in and after 21stfiscal period (2015/10)• Steadily establish a track record of strategic asset reshuffle after comprehensively evaluating building age, profitability,
appraisal profit/loss, etc.
21st Fiscal
Period(2015/10)

22nd Fiscal
Period(2016/4)

KDX Hamamatsucho
Center Bldg.

KDX Nagoya
Nichigin-mae
Bldg.

23rd Fiscal
Period(2016/10)

24th Fiscal
Period(2017/4)

25th Fiscal
Period(2017/10)

KDX Shin-Nihonbashi
Ekimae Bldg.

BR Gotanda(Compartmentalized
ownership ･Partial land leasehold)

KDX Sapporo
Kitaguchi Bldg.

26th Fiscal
Period(2018/4)

27th Fiscal
Period(2018/10)

28th Fiscal
Period(2019/4)

Mitsubishijuko
Yokohama Bldg.
KDX Hamamatsucho
Place(Quasi-co-ownership interest)

29th Fiscal
Period(2019/10)

30th Fiscal
Period(2020/4)

31st Fiscal
Period(2020/10)

KDX Chofu Bldg.
(Compartmentalized
ownership)

Tosabori Prime

Shinbashi
M-SQUARE Bright32nd Fiscal
Period(2021/4)

Total
acquisition
price

Acquisition

18
KDX Shin-Osaka Bldg.

KDX
Toranomon
1chome Bldg.

KDX Nihonbashi
Edo-dori Bldg.

ARK Mori Bldg.
(Compartmentalize
d ownership)

Properties
KDX NishiShinbashi Bldg.

KDX Shibuya
Nanpeidai Bldg.

KDX Yokohama
Kannai Bldg.

KDX Kanda Ekimae
Bldg.

131.0
bn yenNagoya Nikko
Shoken Bldg.

Mutualtransaction

Mutualtransaction

Mutualtransaction

KDX Toranomon
Bldg.

BUREX
Toranomon

KDX Nihonbashi
Kabutocho Bldg.

Mutualtransaction

KDX Shin
KDX Ikejiri-Yokohama 381 Bldg. Oohashi Bldg.

KDX ShinYokohama
214 Bldg.

Mutualtransaction

Frame Jinnan-zaka(Quasi-co-ownershipinterest: 49%)

Frame Jinnan-zaka(Quasi-co-ownershipinterest: 51%)

RetailRetailKDX Nihonbashi
Honcho Bldg.

KDX
Shin-Nihonbashi Bldg.

Disposition

18
Properties
KDX Nogizaka Bldg.

Toranomon
Toyo Bldg.

KDX Roppongi KDX Gobancho KDX Kanda
228 Bldg.
Bldg.
Misaki-cho Bldg.

Residence Charmante
Tsukishima
Residential

KDX Hamamatsucho
Dai-2 Bldg.

KDX Nihonbashi
Edo-dori Bldg.

74.6
bn yen17

Section 5Internal growth18Changes in occupancy and turnover ratio for office buildings• Although the progress of the backfilling vacancy is delayed to expectations, changes in the occupancy rate generally
remain within expectations
Occupancy rate performance (Note 1) and turnover ratio (annualized) of office buildings
Occupancy rate
稼働率（契約面積ベース）（%）

Actual occupancy rate
実質稼働率（FR面積控除後）(contracted area based)

Occupancy rateduring fiscal period (estimate)(excl. free rent area)

100.0
99.1

99.0

99.5

99.2

99.1

33rd fiscal
32nd
fiscal
期中平均稼働率（想定）periodperiod
97.7%
97.3%

99.5

98.1

97.8

98.0

98.6
96.8

98.0

96.8

96.4

97.3

97.3

3.1%

97.5

94.7
96.5

96.7

95.0
94.9
94.6
93.4
92.5

92.9

90.5

30th fiscal
period averageoccupancy rate

31st fiscal
period averageoccupancy rate

99.4%

98.5%

90.0

Actual occupancy rateduring fiscal period (estimate)

33rd fiscal
32nd 期中平均稼働定）
fiscalperiodperiod95.7%
94.6%

21st fiscal
22nd fiscal
23rd fiscal
24th fiscal
25th fiscal
26th fiscal
27th fiscal
28th fiscal
29th fiscal
30th fiscal
31st fiscal
32nd fiscal
第20期…
period 第21期…
period 第22期…
period 第23期…
period 第24期…
period 第25期…
period 第26期…
period 第27期…
period 第28期…
period 第29期…
period 第30期…
period 第31期…
period 第32期…
(2015/10)

Turnover
ratio
10.0％
(annualized)（Note 2） （Note 3）(2016/4)(2016/10)(2017/4)(2017/10)(2018/4)(2018/10)(2019/4)(2019/10)(2020/4)(2020/10)(2021/4)
Estimate

7.9％

8.0％

5.7％

3.6％

3.2％

4.4％

6.7％

6.3％

3.3％

7.0％

9.3％

Note 1: Occupancy rate (contracted area based) is calculated by dividing contract based leased area by leasable area, and actual occupancy rate (excl. free rent area) is calculated by subtracting free rent area from leased area
then dividing that area by leasable area. The figures are rounded to the first decimal place. Average occupancy rate of office buildings during each fiscal period is a simple average of month-end occupancy rates of owned
office buildings during each period. The estimated average (actual) occupancy rate for 32nd fiscal period (2021/4) and 33rd fiscal period (2021/10) is the figure that is used as part of the assumptions for the earnings
forecasts
Note 2: Turnover ratio is calculated and annualized as follows: (Total leased area of the end-tenants who cancelled their lease agreements during the six-months period from the beginning to the end of each period) / (Averageleasable area of all office buildings owned by KDO as of each month-end during the relevant period) x 2. Figures are rounded to the first decimal place
Note 3: Estimate for 32nd fiscal period (2021/4) is based on the cancellation notice, etc. received by November 30, 2020

19

Trends in move-ins/outs and rent changes upon tenant
turnover for office buildings• The rise in unit rent price upon tenant turnover continues, contributing to the increase in rent revenue
Changes in main indicators of tenant move-ins/outs

Changes in monthly rent upon tenant turnover (Note 3)（mn yen）

Tenant move-in and move-out areas and the number of tenants (Note 1)( ) Number of move-in/out■Space leased (tsubo)■Space vacated (tsubo)-1,428 tsubo is affected bylarge tenant turnoverin KDX Hamamatsucho
Place and KDX Yokohama
Kannai Building

（49）
（45）

（45）

5,795

3,962

3,269

（35）

2,020

2,365

-2,428-3,097-4,751-4,555（44）（47）

28th fiscal
period
第28期(2019/4)（19/4期）

29th fiscal
period
第29期(2019/10)（19/10期）（48）

27th fiscal
period
第27期(2018/10)（18/10期）（36）

Total rent
decrease-5,160（35）（57）
30th fiscal
period
第30期(2020/4)（20/4期）

Total rent
increase

31st fiscal
period
第31期(2020/10)（20/10期）% of the numberof rent increase
contracts upon tenant
turnover

5.5
-1.0

12.1
-1.0

21.5
-0.4

3.7
-0.8

6.3
-0.1

27th
fiscal第27期
period（18/10期）(2018/10)

28thfiscal第28期
period（19/4期）(2019/4)

29th
fiscal第29期
period（19/10末）(2019/10)

30thfiscal第30期
period（20/4末）(2020/4)

31st
fiscal第31期
period（20/10末）(2020/10)

69.8%

82.1%

85.1%

72.7%

93.3%

Changes in unit rent upon tenant turnover (Note 4)（yen/tsubo）

新規テナントの賃料単価
New unit rent
従前テナントの賃料単価
Previous unit rent
18,213

Free rent period (# of month) (Note 2)
Tokyo
Central 5 wards
Tokyo
Metropolitan area
(excluding Tokyo central 5
wards)

Other
regional areas

21,453

16,61315,752
2.4

1.9

2.9

1.4

1.8

3.3

2.7

2.2

1.9

1.5

14,353

1.7

0.9

1.7

1.0

1.3

27th
fiscal第27期
period（18/10期）(2018/10)

16,292

17,77815,14015,136
13,48628th
fiscal第28期
period（19/4期）(2019/4)

29th
fiscal第29期
period（19/10期）(2019/10)

30thfiscal第30期
period（20/4期）(2020/4)

31st
fiscal第31期
period（20/10期）(2020/10)

Note 1: The number of tenants and leased area are calculated based on floor. In case that an end-tenant move-out from/move-in to multiple floors, the number is counted by floor
Note 2: Free rent period refers to a period from the start date of contract until the start date of contracted full rent. Figures are expressed as a simple average in terms of month by dividing by 30 days (rounded to the firstdecimal place). The analysis is based on office floors on the 2nd floor or above and excludes buildings that were newly acquired during the relevant fiscal periods
Note 3: Total amount of increases/decreases in monthly rent before and after tenant turnover for each fiscal period is respectively aggregated for the spaces where the rents paid by new tenants and by previous tenants can be compared
Note 4: New unit rent is an average unit rent calculated based on aggregated unit rents and areas for the spaces where rents paid by new tenants and by previous tenants can be compared for each fiscal period of “Tenant move-in andmove-out areas and the number of tenants”. Previous unit rent is an average unit rent calculated based on aggregated previous unit rents and areas for the spaces where new unit rents are calculated

20

Status of rent revisions with existing tenants• Amid the small number of rent revisions in 31st fiscal period, early negotiations under the COVID-19 pandemic is
successful, leading to a certain level of rent increase results
Changes in rent upon rent revisions (based on monthly rent) (Note 1)（thousand yen）

Increase in rent
増賃額

Status of rent revisions (based on leased floor area) (Note 2)

Exception for negotiation(Higherthan
交渉対象外
marketrent)（マーケット賃料以上）
(43)
（43件）
7.6%
7.6%

減賃額
Decrease in rent

14,0179,051

No change(Lowerthan
現状維持
market rent
（マーケット賃料未満）（176件）
(176)
58.3%
58.3%

9,885
7,045

5,977

5,960

Rent decrease
賃料減額
(1)
（1件）
0.3%

Exception for negotiation
交渉対象外(Higherthan（マーケット賃料以上）
market rent)
0.3%
（56件）
(56)
Rent
increase
賃料増額
18.9%
(103)
（103件）
33.8%
33.8%

30th
fiscal period(2020/4)(323)

No change(Lower thanmarket rent
現状維持
(161)
（マーケット賃料未満）
62.1%（161件）
62.1%

-402

-111

-731
42

第27期
（18/10期）

28th fiscal
period(2019/4)

第28期（19/4期）

29th fiscal
period(2019/10)

第29期（19/10期）

30th fiscal
period(2020/4)

第30期（20/4期）

31st fiscal
period(2020/10)

第31期（20/10期）

31st
fiscal period(2020/10)(255)

Negotiation
Target103

52

62
27th fiscal
period(2018/10)

(38)
18.9%

Changes in the number of rent increase contracts and rent increase rate
areas
Tokyo central 5 wards Other
都心5区
都心5区以外
94
83

-472

賃料増額
（38件）
18.9%
Rent increase

64
38

38

32nd fiscal
period(2021/4)
第32期
Onward24（21/4期）
以降 as ofConfirmed
Nov. 15, 2020
Rent increase rate
(incremental average)

41

51

28

30
10

27th
fiscal第27期
period（18/10期）(2018/10)

28thfiscal第28期
period（19/4期）(2019/4)

29th
fiscal第29期
period（19/10期）(2019/10)

30thfiscal第30期
period（20/4期）(2020/4)

31st
fiscal第31期
period（20/10期）(2020/10)

5.8%

5.7%

6.7%

7.7%

10.4%

(Note 3)Note 1: Difference in monthly rent before and after rent revision in each fiscal period is calculated by aggregating the change amount per contract in each fiscal period (rounded to the nearest thousand yen). The changes in rent uponrent revisions from 32nd fiscal period (2021/4) onward do not include the amount in response to requests for rent reduction or exemption, etc. due to temporary revenue decline resulting from the spread of COVID-19 (temporary
rent decrease and temporary rent increase to recover such decrease)
Note 2: “Market rent” in this graph is a new contracted rent (standard floor) for each property estimated by CBRE as of the end of each fiscal period
21
Note 3: Rent increase rate is calculated by dividing the sum of increase in monthly rent by the sum of monthly rent before revision (rounded to the first decimal place)Rent gap of KDO office buildings• The proportion of contractual rent lower than market rent level shrank against the backdrop of tenant turnover and theaccumulation of actual results of rent increases and revisions
Breakdown of rent gaps by rent revision schedule

Breakdown of rent gaps (based on monthly rent) (Note 1)
110

mn yenOver 10%128 mn yen
Higher thanmarket rent level273(as of the end of 31st fiscal period (2020/10), based on monthly rent) (Note 1) (Note 2)

169 mn yen

347mn yen
mn yen（mn yen）-10%~0%-10%以内

0%~+10%+10%以内

Between
0% and 10%579 mn yen

16
58

676 mn yen

641 mn yen

75.9%

77.6%

763 mn yen

750 mn yen

624 mn yen

105
Lower thanmarket rent level
59.0%

Lower than
-10%

第30期
End
of 30th（20/4期）末fiscalperiod(2020/4)

44

104

89

35
97

34
14

第31期
End
of 31st（20/10期）末fiscal period(2020/10)

146
31stfiscal第31期
period（20/10期）(2020/10)

147

150

136
63.7%

451 mn yen
End第29期
of 29th（19/10期）末fiscalperiod(2019/10)

40

Over
+10%
+10%超

148

Between-10% and 0%

Lower thanmarket rent level

Over -10%
-10%超

66.4%

117

33rd
fiscal第33期
period（21/10期）(2021/10)
到来分

90
48.6%

135

112

32nd
fiscal第32期
period（21/4期）(2021/4)
到来分

140
68.1%

82

34th
fiscal第34期
period
（22/4期）(2022/4)
到来分

35th
fiscal第35期
period（22/10期）(2022/10)
到来分

99

39.8%

-8.9

-9.3

3
36th
fiscal第36期
period（23/4期）(2023/4)
以降到来分
onwardHistorical average rent gaps (Note 3)■Change in market rent of owned properties
Number of Tokyo 5 Central Wards, Tokyo Metropolitan Area (excluding 5 Central Wards), and Other Regional Areas
properties in the following table, from left to left

Rise

43 / 21 / 15 properties

31st fiscal
period(2020/10)

30th fiscal
period(2020/4)

29th fiscal
period(2019/10)

25 / 9 / 1 properties-/-/- properties

（%）
30.0

19.5

10.0
0.0

10.3
4.7
-2.2

-4.3
-10.7

Flat

5 / 8 / 3 properties

Decline-/-/- properties

23 / 21 / 17 properties-/-/- properties

37 / 26 / 18 properties
10 / 4 / 1 properties

21.0
14.4

20.0

7.1

4.2
-0.6

-2.1

-4.2

-6.6

-5.6

-10.0
-20.0

End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
第1期
第3期
第5期
第7期
第9期
第11期
第13期
第15期
第17期
第19期
第21期
第23期
第25期
第27期
第29期
第30期
1st
fiscal3rd
fiscal7th
fiscal9th
fiscal11th
fiscal 13th
fiscal 15th
fiscal 17th
fiscal 19th
fiscal 21stfiscal 23rd
fiscal 25th
fiscal 27th
fiscal 29th
fiscal 30th
fiscal5th
fiscal（05/10期）（06/10期）（07/10期）（08/10期）（09/10期）（10/10期）（11/10期）（12/10期）（13/10期）（14/10期）（15/10期）（16/10期）（17/10期）（18/10期）（19/10期）（20/4期）periodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiodperiod(2005/10) (2006/10) (2007/10) (2008/10) (2009/10) (2010/10) (2011/10) (2012/10) (2013/10) (2014/10) (2015/10) (2016/10) (2017/10) (2018/10) (2019/10)(2020/4)

Note 1: A new contracted rent (standard floor) for each property estimated by CBRE as of the end of each fiscal period is deemed the market rent; the gap between the contracted rent for each tenant as of the end of the fiscal
period and the market rent is recognized as a rent gap. No gap is classified into “Between 0% and +10%”
Note 2: Regarding the office buildings owned by KDO as of the end of 31st fiscal period (2020/10), distribution of the rent gaps between the contracted rent for each tenant and the market rent estimated by CBRE as of the endof 31st fiscal period (2020/10) by the timing of rent revisions for each tenant. The rents equal to market rents are classified into “Between 0% and +10%”
Note 3: Calculated as the weighted average, based on leasable floor area, of the gap rate between the average contracted rent of the standard floor for the office buildings owned by KDO as of the end of each fiscal period andthe market rent for each property estimated by CBRE at the time of appraisal

End of
第31期
31stfiscal（20/10期）
period(2020/10)

22

Construction expense (actual/budget)
Changes in depreciation and construction expense (actual/budget)
減価償却費
Depreciation

修繕費
資本的支出
Repair/maintenanceCapex

Repair/renovation work budget for 32nd fiscal period (2021/4) (Note)
Items

Description of works

Estimatedamount(mn yen)

Percentage of total
expense (%)（mn yen）

Value-upgrading works

tenant and common
areas

419

21.4

3,000

Replacement works

Air-conditioning facilities

269

13.7

Other major facilities

2,500

2,369

2,358

2,559

2,523

2,470

2,419

1,960

2,000

2,596

474

5.0

Outer wall repair

189

9.6

Maintenance/repair works

462

23.6

32nd fiscal
period (2021/4)
total

412
443

441

403

Note: Figures are approximate estimates as of the date in which
repair plan was prepared

Percentage todepreciation
expense (%)

1,959

76.6

Properties to undergo major repair/renovation in 32nd
fiscal period (2021/4)

568
1,000
1,426

1,546

1,485
1,251

1,231
500

98

1,824
1,692

409

1,494
1,500

26.6

1,959

1,835
1,634

522

Eco-friendly works(Installation of LED lightings, etc.)• Replacement works of air-conditioning facilities:
1,381

KDX Hamamatsucho Building , KDX Shinjuku 6-chome Building ,KDX Kajicho Building , Senri Life Science Center Building

925• Outer wall repair:
KDX Sakura-dori Building , KDX Shinjuku 286 Building ,

0

予算
-500

KDX Nakameguro Building
27th
fiscal第27期
period（18/10期）(2018/10)
実績
actual28th
fiscal第28期
period（19/4期）(2019/4)
実績
actual29th
fiscal第29期
period（19/10期）(2019/10)
実績
actual30th
fiscal第30期
period（20/4期）(2020/4)
実績
actual

31st
fiscal第31期
period（20/10期）(2020/10)
実績
actual32nd
fiscal第32期
period（21/4期）(2021/4)
budget予算

33rd
fiscal第33期
period（21/10期）(2021/10)
予算
budget
予算• Value-upgrading works:
KDX Iidabashi Building , KDX Yokohama Kannai Building ,KDX Shinjuku 6-chome Building , KDX Kajicho Building
23

Leasing status of properties expected to be low occupancy
KDX Yokohama Kannai Building

KDX Hamamatsucho Place

Estimated
occupancy rate

Estimated
occupancy rate

End of 31st fiscal
period (20/10)

End of 32nd fiscal
period (21/4)

End of 31st fiscal
period (20/10)

End of 32nd fiscal
period (21/4)

100.0%

81.8%

92.7%

69.2%

• Yokohama City, a large tenant occupying about
40%, determined to cancel lease agreements by
October 31, 2020 and move to new office• The rent level of the property is relatively higher
than those of other owned properties, tenants
have cancelled lease agreements mainly due toearnings deterioration increased• Under the spread of the COVID-19, new tenants
have been already determined for more than halfof move-out areas and the occupancy is
expected to further increase on an applicationbasis

KDX Hon-Atsugi Building• Aiming for early recovery of the occupancy rate
through flexible leasing activities as the property
is located near the station and relatively new
and has the potential competitiveness

KDX Iidabashi Square

Estimated
occupancy rate

Estimated
occupancy rate

End of 30th fiscal
period (20/4)

End of 31st fiscal
period (20/10)

End of 31st fiscal
period (20/10)

End of 32nd fiscal
period (21/4)

70.9%

77.5%

79.7%

64.3%

• Despite vigorous leasing activities, the situation
keeps getting better and then worse again andthe occupancy has been weak since June 2017
• As the size and yield are less attractive,
consider the measures, taking the future
disposal of property into account• Due to the cancellation of the tenant occupying
the whole building, implemented overallrenovation works and about 4 years havepassed since the building was fully occupied• Despite an increase in cancellations due to a
combination of the timing of tenant relocationconsideration and the COVID-19 pandemic, wevigorously engage in leasing for new tenants

24View on changes in office needs• With the expansion of telework due to the spread of the COVID-19, working at home has taken root
• The COVID-19 pandemic has accelerated the flexibility of working styles and the diversification of work locations,changing the function and nature of main office
Changes in functions required for office buildings
Scope of workspace

Scope ofworkspace

Privatehome

Expansionof telework

Privatehome

Changes infunctions

OfficeMorning

OfficeEveningWork stylereformCafe
Accommo-dations

Satellite office

Need to respond to changes in work style and need for flexibility
Working at home has become part of daily life because of
expansion of teleworking
Office needs will diversify in the mid and long term

The COVID-19 pandemic accelerates changes
in the business environment

If the traditional office renting model is left untouched,vacancy rate would rise and profitability would fallMore companies are likely to think about flexibly relocating, expanding,or downscaling offices in linewith their performance and growth

Need to establish a flexible renting model to respond to changes in office functions
25

Initiatives for diversifying office needs• Planning "Turn-Key Office" with interior and furniture incorporating ABW concept in KDX Iidabashi Building• Accumulating know-how through this initiative and considering adopting in other owned properties with needs
Overview of KDX Iidabashi Building project
Completion date:
Location:

March,1990 (conducted a large-scale renovation on entrance, air-conditioning facilities and common areas)
3 minutes on foot from Iidabashi Station on the JR Chuo Main Line, the Tokyo Metro Tozai Line,the Yurakucho Line, the Nanboku Line and the Toei Subway Oedo Line

• Focusing on the potential competitiveness of this property, which has
decided to cancel up to the 4th - 6th floors in succession and has hightraffic convenience that allows the use of multiple routes, we will seek a
new method of operation in response to changes in office needs• Decided to create a space (Turn-Key Office) that incorporates the ideaof ABW(Activity Based Working) and allows for setting up and leasing
office fixtures and business to be started promptly after the contract isconcluded.
• Aiming to start leasing around spring 2021 in order to strengthen
competitiveness and differentiate itself from competitors and improve
profitability by setting rents higher than those for ordinary leasing byincreasing added value

Ordinary
lease

Tuｒn-Key
OfficeInterior finishing /furniture andfixtures

Conducted
and borne bytenants

Conducted
and borne bylessors

Efforts andexpenses required
for relocation

Large

Small

Period required forrelocation

Long

Short

Restoration

Required

Not required
in principle

Advantages fortenants

Possible tostick to interior
and furniture.
Low rents

Minimal efforts
and expenses
at move-in/out

Disadvantages fortenants

Large efforts
and expenses
at move-in/out

Not possible tostick to interior
and furniture.
High rents

Image diagram of Turn-Key Office26

End-tenants of KDO office buildings• The largest tenant occupies 2.4% of total leased floor area and each of tenants other than the top 4 occupies less than 1.0%
List of top end-tenants for office buildings

Average rent for office buildings by area (Note 2)(as of the end of 31st fiscal period (2020/10))
Tenant name1

Mitsubishi Heavy Industries,
Ltd.

2 WeWork Japan G.K.

(tsubo)share ofleased floorarea (%) (Note1)

3,408.4

2.4

Mitsubishijuko Yokohama Bldg.

1,920.0

1.3

KDX Toranomon 1chome Bldg.

Leasedarea

Tenant A
3(wholesale, retail and dining)

1,550.8

1.1

KDX Kawasaki-Emimae
Hon-cho Bldg.

4 Japan Pension Service

1,424.9

1.0

KDX Chofu Bldg.

5 JASTEC Co., Ltd.

1,304.6

0.9

KDX Takanawadai Bldg.

1,279.6

0.9

KDX Higashi Umeda Bldg.

6

Customer relation
telemarketing, CO,LTD

Tenant B
7(Manufacturing)

27th fiscal period 29th fiscal period 31st fiscal period(2018/10)(2019/10)(2020/10)

Name of property

1,168.0

0.8

KDX Kobayashi-Doshomachi Bldg.

8

Tenant C(service provider)

1,109.1

0.8

KDX Musashi-Kosugi Bldg.
KDX Hiroshima Bldg.

9

Tenant D(service provider)

1,080.1

0.7

KDX Musashi-Kosugi Bldg.

10

Tenant E(service provider)

1,079.6

0.7

Koishikawa TG Bldg.

Total

15,325.2

10.6

16,900 yen

Tokyo
metropolitan area

16,100 yen

16,500 yenJapan

15,200 yen

15,500 yen（+300 yenperiod over period）

15,800 yen（+300 yenperiod over period）

Tenant diversification by type of business(based on # of tenants) (Note 3)
Transportation,
運輸・通信業Communication
38件 3.4%
38, 3.4%
Real
Estate
不動産業
45, 4.0%
45件
4.0%

公務(その他)
Publicsector (other)
4件4,
0.4%
0.4%
電気・ガス・水道・熱供給
Infrastructure
2, 0.2%
2件 0.2%
鉱業
Mining1,
1件 0.1%

Construction
建設業
48, 4.3%
48件
4.3%
金融・保険業
Finance,Insurance
50件
4.5%
50, 4.5%# of tenants
1,115

Individual
個人
52, 4.7%
52件
Manufacturing
製造業
146,
13.1%
146件
13.1%

サービス業
482件 43.2%
Service provider
482, 43.2%

Wholesale,
卸売業・小売業、飲食店
Retail,Dining247件 22.2%
247, 22.2%

Note 1: Leased area of each end-tenant against total leased floor area of KDO portfolio as of the end of 31st fiscal period (2020/10) (rounded to the first decimal place)
Note 2: Average rent is calculated by dividing total amount of contracted rents of office buildings for each area as of the end of each fiscal period by the total leased floor area (rounded down to the nearest hundred yen)
Note 3:The chart shows the breakdown of tenants by type of business based on the total number of tenants in office portfolio (aggregated by name-base) as of the end of 30th fiscal period (2020/4) (rounded to the first decimal place)27

Efforts of ESG
Certification for GRESB Real Estate Assessment

Issuance of green bonds• Acquired "Green Star" rating for 9 consecutive years andthe 2nd-highest-rated “4 Stars” in GRESB Rating as aresult of our efforts for improving sustainability
performance November 2020

• Issued KDO’s second green bonds in October 2020
with an aim for committed efforts to improvesustainability and further contribution to developmentof the domestic green bond market by offering
opportunities to the universe of investors who takeactive stance towards ESG investment• Participated from 2011 as the first J-REIT participant
J-REIT

Certification for CASBEE for Real Estate

Cooperating with society in bicycle sharing• As KDO has been actively and continuously promoting
green buildings in 31st fiscal period (2020/10), one
property was ranked S, the highest rating, and two
properties were ranked A by CASBEE as of November
2, 2020• We have offered portions of 6 properties sites toserve as bicycle parking for bicycle sharing.
• In the spread of the COVID-19, enhance
convenience for tenants and local residents bycooperating with the project which will further
increase the need“S”: Shinbashi M-SQUARE Bright“A”: KDX Kasuga Building, KDX Ikebukuro West Building• A total of 21 properties in our portfolio were awarded theCertification

Acquisition including other environmental certifications
DBJ Green Building
Certification

BELS Certification

End of 31st fiscal period (20/10)
Acquisition of environmental
certification (Note)
Properties Total floor area ratio

42• A total of 25 properties inour portfolio were awarded
the Certification, including
KDX Toranomon 1chome
Bldg., which earned thehighest-rated “five stars”• In 2014, KDX MusashiKosugi Bldg. was awarded
a BELS Certification (threestars) for the first time inhistory as a J-REIT owned
property• A total of 2 properties inour portfolio wereawarded the Certification

56.5%

Note: The number of properties iscounted without duplication incase a property has multiple
certification or evaluation

Response to COVID-19• Continue the operation to keep the attendance
rate at 50% in principle after the state of
emergency is lifted in order to ensure the health of
the Asset Management Company’s employees
and their families (as of the date of this document)• The Asset Management Company distributed antibacterial “mask spray” at its expense to thetenants occupying the properties entirely owned by
KDO to encourage to wear masks and strengthen
the relationship with the tenants

28Section 6
Financial strategy

29

Status of debt financing
1.8 Average interest rate and remaining period to maturity (Note 1)

6
5

Weighted average interest rate (incl. up-front fee)
平均金利（融資実行手数料を含む）

1.6

Refinance record for 31st fiscal period (2020/10)(Total amount of 11.1 bn yen) (Note 2)
Conditions before
refinancing

Conditions afterrefinancing

Average interest rate

0.99%

0.71%

Average borrowing
period5.8 years

7.5 years

4
1.4
1.25%

1.19%

3

1.16%

1.2

1.10%

1.07%

1.06%

1.04%

1.02%

1.0

2
0.97%

0.94%
1

0.8
Averageremaining
period tomaturity (year)Endof 22nd
第22期
fiscal period（16/4期）末End
of 23rd
第23期
fiscal period（16/10期）末End
of 24th
第24期
fiscal period（17/4期）末End
of 25th
第25期
fiscal period（17/10期）末End
of 26th
第26期
fiscal period（18/4期）末End
of 27th
第27期
fiscal period（18/10期）末End
of 28th
第28期
fiscal period（19/4期）末End
of 29th
第29期
fiscal period（19/10期）末End
of 30th
第30期
fiscal period（20/4期）末End
of 31st
第31期
fiscal period（20/10期）末(2016/4)(2016/10)(2017/4)(2017/10)(2018/4)(2018/10)(2019/4)(2019/10)(2020/4)(2020/10)

4.7

4.9

4.7

5.0

5.2

5.2

5.0

4.8

4.5

4.5

0

Balance of interest-bearing debt by maturity（bn yen）

Short-Term Borrowings 12.5

Long-Term Borrowings 178.2

Interest-bearing debt by maturity(excl. short-term borrowings)

Balanceof debt
maturing

Investment Corporation Bonds 11.0

Averagefinancial cost

197.0
19.7

33rd
fiscal period(2021/10)

34th
fiscal period(2022/4)

35th
fiscal period(2022/10)

11.2
bn yen11.8
bn yen9.9
bn yen9.15
bn yen

1.10%

1.07%

1.01%

0.91%

166.0
16.6

158.0
15.8
14.3 140.0
143.0
14.0

8.5
85.0
12.6 125.0
12.5
123.0
12.3 126.0

40.0
4.0
99.0
9.9

91.5
9.15

90.0
9.0
75.0
7.5
38.0
3.8

67.0
6.7

15.0
150.0

Outline of the commitment line agreement

1.0

20.0
2.0

110.5
11.05
1.0

Maximum
AmountValid Period

2.0
20.0
68.5
6.85

20.0
2.0

50.0
5.0
1.0

20.0
2.0

Use ofproceeds
Contract TypeCounterparty

32nd
第32期
fiscal(21/4期)period(2021/4)

32nd
fiscal period(2021/4)

34th
第34期
fiscal(22/4期)period(2022/4)

36th
第36期
fiscal(23/4期)period(2023/4)

38th
第38期
fiscal(24/4期)period(2024/4)

40th
第40期
fiscal(25/4期)period(2025/4)

42nd
第42期
fiscal(26/4期)period(2026/4)

44th
第44期
fiscal(27/4期)period(2027/4)

46th
第46期
fiscal(28/4期)period(2028/4)

48th
第48期
fiscal(29/4期)period(2029/4)

51st
第51期
fiscal(30/10期)
period(2030/10)

6.0 bn yen
May 1, 2020 to April 30, 2021
Acquisition of assets,
Repayment of the existing borrowings and redemption of
investment corporation bonds
Syndication-type commitment line
Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd.,
Mizuho Bank, Ltd.

Note 1: Average interest rate and borrowing period are the weighted average based on the balance of debt outstanding as of the end of each fiscal period (with the average interest rate rounded to the second decimal place
and the average borrowing period rounded to the first decimal place)
Note 2: Average interest rate and borrowing period are the weighted average of the interest rate of borrowings (incl. up-front fee) and borrowing period based on the balance of borrowings, respectively (with the averageinterest rate rounded to the second decimal place and the average borrowing period rounded to the first decimal place).

30

Historical changes in LTV and status of interest-bearing debt
financing• Maintain stable financial base through conservative management with a 45% of LTV in mind
Historical LTV (interest-bearing debt ratio) level (Note 1)（%）

Borrowing capacity for acquisition (Note 2)
第31期（20/10期）末
asof the end of 31st
物件取得余力
（注2）
fiscalperiod (2020/10)

LTV（有利子負債比率）
LTV (interest-bearing debt ratio)

45.8

45.3

47.5

46.2

47.2

（LTV45%を上限とする場合）(inthe case of LTV 45% limit)

48.4

約90
億円
Approx.
9.0
bn yen

42.8

42.8

42.8

43.1

42.6

43.3

43.9
41.9

40.3

41.7

42.9

42.1

Appraisal-value
based LTV

End of 13th
End of 14th
End of 15th
End of 16th
第13期 fiscal
第14期
第15期 fiscal
第16期
fiscal period
periodfiscal period
period（11/10期）末（12/4期）末（12/10期）末（13/4期）末(2011/10)(2012/4)(2012/10)(2013/4)

16 lending financial institutions■ Sumitomo Mitsui Banking■ MUFG Bank

2.8%

■ Development Bank of

25.3%

5.9%
9.9%

■ Resona Bank
■ Aozora Bank
■ Mizuho Trust & Banking■ The Bank of Fukuoka■ The Nishi-Nippon City

19.8%
15.5%

Japan
■ Sumitomo Mitsui TrustBank■ Mizuho Bank

Total
borrowings
from financial
institutions
190.7 bn yen

10.4%

43.4

36.5

End of 17th
End of 18th
End of 19th
End of 20th
End of 21st
End of 22nd
End of 23rd
End of 24th
End of 25th
End of 26th
End of 27th
End of 28th
End of 29th
End of 30th
End of 31st
November 30,
第17期 fiscal
第18期
第19期
第20期
第21期
第22期
第23期
第24期
第25期
第26期
第27期
第28期
第29期
第30期
第31期 20/11末時点
fiscal period
periodfiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
fiscal period
2020（13/10期）末（14/4期）末（14/10期）末（15/4期）末（15/10期）末（16/4期）末（16/10期）末（17/4期）末（17/10期）末（18/4期）末（18/10期）末（19/4期）末（19/10期）末（20/4期）末想定（Note 3）(2013/10)(2014/4)(2014/10)(2015/4)(2015/10)(2016/4)(2016/10)(2017/4)(2017/10)(2018/4)(2018/10)(2019/4)(2019/10)(2020/4) （20/10期）末(2020/10)

Outstanding borrowings by financial institutions as of the end of
31st fiscal period (2020/10)

5.5%

43.9

Bank

■ The Hiroshima Bank
■ The 77 Bank
■ Sumitomo Life Insurance

Company■ Higashi-Nippon Bank
■ The Norinchukin Bank
■ The Mie Bank

48,200 mn yen 25.3%
37,800 mn yen 19.8%
29,550 mn yen 15.5%
19,900 mn yen 10.4%
18,900 mn yen
11,250 mn yen
10,550 mn yen
5,300 mn yen
2,500 mn yen
1,700 mn yen

9.9%
5.9%
5.5%
2.8%
1.3%
0.9%

1,000 mn yen
1,000 mn yen
1,000 mn yen

0.5%
0.5%
0.5%

800 mn yen
800 mn yen
500 mn yen

0.4%
0.4%
0.3%

Major indicators related to financial stability
Ratio offixed interest rate (Note 4)

Status of credit rating
(JCR)

93.0%

AA-（Stable）

Issue status of investment corporation bonds as ofthe end of 31st fiscal period (2020/10) (total of 11.0 bn yen)
Corporate bonds

IssuedperiodIssuedamountInterest
rate

Term

6th bonds

2014/7

2.0 bn yen

1.18%

10 years

7th bonds

2016/4

1.0 bn yen

0.90%

12 years

8th bonds

2017/7

1.0 bn yen

0.26%

5 years

9th bonds

2017/7

2.0 bn yen

0.64%

10 years

10th bonds (green bonds)

2019/22.0 bn yen

0.39%

5 years

11th bonds (private placement bonds)

2020/1

2.0 bn yen

0.25%

5 years

12th bonds (green bonds)

2020/10

1.0 bn yen

0.61%

10 years

Note 1: LTV is calculated by dividing the balance of interest-bearing debt by the amount of total assets as of the end of each fiscal period. Appraisal-value based LTV is calculated by dividing the balance of interest-bearing
debt by the sum of the amount of total assets and appraisal profit/loss of owned properties as of the end of each fiscal period (rounded to the first decimal place)
Note 2: Estimated borrowing amount of debt which can be additionally procured from financial institutions or new issuance of investment corporation bonds for property acquisition by new debt financing, assuming that theLTV can be increased to a certain value
Note 3: Assumed value after KDX Shin-Nihonbashi Building transfer as of November 2, 2020 and pre-payment of borrowing as of November 30 of the same year.
Note 4: Includes the borrowings with floating interest rate fixed by interest rate swap (rounded to the first decimal place)31

Disclaimer

The contents of this document, including summary notes, quotes, data and other information, are provided solely for
informational purposes and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell,
any specific products.
Please be aware that matters described herein may change or cease to exist without prior notice of any kind. This document
contains forward-looking statements and anticipations of future results, based on current assumptions and beliefs in light ofcurrently available information and resources. Risks and uncertainties, both known and unknown, including those relating to the
future performance of the real estate market in Japan, interest rate fluctuations, competitive scenarios, and changing
regulations or taxation, may cause Kenedix Office Investment Corporation (KDO)'s actual results, performance, achievements
and financial performance to be materially different from those explicitly or implicitly expressed in this document.
With respect to any and all terms herein, including without limitation, this document, the information provided is intended to bethorough. However, no assurance or warranties are given with respect to the accuracy or completeness thereof.
Neither KDO nor Kenedix Real Estate Fund Management, Inc. (KFM) shall be liable for any errors, inaccuracies, loss ordamage, or for any actions taken in reliance thereon, or undertake any obligation to publicly update the information contained inthis document after the date of this document.
Revised editions of this document will be posted on our website (https://www.kdo-reit.com/en/) if there should be majorcorrections going forward.

32