Supplementary Materialon the Acquisition and Sale, etc.
Announced Today“Notice Concerning Acquisition of Property (Shinbashi M-SQUARE Bright) and Sale ofProperties(KDX Nihonbashi Honcho Building, KDX Nihonbashi Edo-dori Building andKDX Shin-Nihonbashi Building)”“Notice Concerning Revision of the Operating Forecasts and Distribution Forecasts for
the Fiscal Period Ending October 31, 2020 (the 31st Fiscal Period) and for the Fiscal PeriodEnding April 30, 2021 (the 32nd Fiscal Period)”

June 26, 2020

Outline of the asset reshuffle announced today Acquired a relatively new property in urban central area with scarcity value supported by the sponsor
Highlight of  Reduced the risk of future increases in repair/maintenance expense, etc. by selling three relatively
old properties
the asset
reshuffle  Recorded gain on sale of properties over two fiscal periods with an increase in DPU expected during
COVID-19 crisis
Acquired in
31st fiscal period

Sold in 31st fiscal period

Shinbashi M-SQUAREBrightKDX Nihonbashi Honcho
Bldg.

KDX Nihonbashi
Edo-dori Bldg.

Sold in 32ndfiscal period

Effects after the transaction

KDX Shin-Nihonbashi
Bldg.

Mid-long term
estimate+140 yen/period

Growth in DPU(Note 2)

Assetreshuffle

Decrease in average age(Note 3)

Zao Properties TMK

Buyer

Anticipatedacquisition price

16,300 mn yen

Anticipatedsale price5,000 mn yen

1,550 mn yen

3,200 mn yen

Appraisal value

20,500 mn yen

Appraisal value

Gains on sales ofproperties secured

4,950 mn yen

1,510 mn yen

3,140 mn yen(Note 4)

3.8%

3.3%

3.2%

Seller(As of May 1, 2020)

NOI yield after
depreciation(estimate) (Note 1)

3.3%

Scheduled date ofJune 30, 2020
acquisition
Completion date

September 2018

(As of Apr. 30, 2020)

NOI yield after
depreciation(actual) (Note 1)

Mitsui Fudosan Co., Ltd.

Scheduled date ofsaleCompletion date

-28.8 years

June 30, 2020

January 1984

March 1985

November 2, 2020

November 2002

31st fiscal period 32nd fiscal period(2020/10)(2021/4)

Increase inretained earnings+1.0 bnyen+1.1 bnyen

31st fiscal period 32nd fiscal period(2020/10)(2021/4)+700 mn +600 mnyenyenNote 1: The yield for property to be acquired is calculated by dividing the annualized NOI after depreciation (estimate) calculated by the Asset Management Company excluding extraordinary factors for the acquisition yearby the anticipated acquisition price. The yield for the properties to be sold is calculated by dividing the sum of the rental operating income (NOI after depreciation (actual)) for the 29th (2019/10) and 30th (2020/4)
fiscal periods by the anticipated sale priceNote 2：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 to be sold in 30th fiscal period (2020/4) fromthe NOI after depreciation (estimate) of the property to be 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 3: Calculated by deducting the weighted average age of the properties to be sold at acquisition price from the age of the property to be acquired as of June 30, 2020
Note 4: Gains on sales of properties are estimated based on the estimated book value and selling expenses, etc.

1Dividend and reserve for reduction entry
Dividend is expected to significantly exceed the previous forecast amount, with part of
the gain on sale being distributed
Highlight of
Seek to maximizing retained earnings utilizing the special taxation measure applicable up torevised
the 32nd fiscal period
forecasts
 Increase both DPU and retained earnings to be fully prepared for uncertainties in the businessenvironment
Changes in balance of reserve for reduction entry (Note 3)
Changes in DPU (Note 1)
4,116


(yen)

+622 mn yen(mn yen)

15,18015,080+580+1,030

yen(+4.0%)

yen(+7.3%)

14,412

3,493+718 mn yen

14,500

2,775

2,775

2,775

2,775

第31期
第31期
31st fiscal（20/10期） （20/10期）
period(2020/10)
当初予想 今回予想

第32期
第32期
32nd fiscal（21/4期） （21/4期）
period(2021/4)
当初予想 今回予想

14,15013,639

第29期

29thfiscal（19/10期）
period 実績(2019/10)
ActualLTV(Note 2)

42.1%

第30期

30thfiscal（20/4期）period実績(2020/4)
Actual

42.9%

第31期
第31期
31st fiscal（20/10期） （20/10期）
period(2020/10)
当初予想 今回予想
Previous Revised
forecast
forecast

43.9%

New borrowing will cover theBorrowing
shortage of funds for asset reshuffle+9.7 bn yen
in the 31st fiscal period

第32期

第32期

32nd fiscal（21/4期） （21/4期）
period (2021/4)
当初予想
今回予想
Previous Revised
forecast
forecast

43.9%

第29期
第30期
30thfiscal
29thfiscal（19/10期）（20/4期）(2020/4)
period実績(2019/10) period実績
ActualActualReserve forreduction 6,476 yen
entry per unit

6,476 yenPrevious Revised
forecast forecast

8,152 yenPrevious Revised
forecast forecast

9,605 yen

Partial repayment ofborrowing is consideredafter the saleNote 1: 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 hereinafter)
Note 2: LTV for the 31st (2020/10) and 32nd (2021/4) fiscal periods are calculated by dividing the outstanding interesting-bearing debt (estimate) as of the end of the relevant fiscal period by the total asset (estimate) based on theimplementation of asset reshuffle announced today (rounded to the first decimal place)
Note 3: The forecast balance of the reserve for reduction entry is calculated by adding the estimated provision of reserve for reduction entry for each fiscal period to the estimated balance of reserve for reduction entry on the balance sheet
as of the end of the 30th fiscal period (2020/4)

2

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

Property nameLocation

Properties to be soldShinbashi M-SQUARE Bright
Minato-ku, Tokyo

Property nameLocation
Floor area

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

1,970 mn yen

Anticipated 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

Scheduled date of sale

June 30, 2020

June 30, 2020

November 2, 2020

(As of May 31, 2020)

Number of tenants(As of May 31, 2020)

6

Anticipated acquisition price

16,300 mn yen

Difference between anticipated saleprice and book value:(Anticipated saleprice – book value) / book value

Appraisal value

20,500 mn yen

Appraisal value(As of May 1, 2020)

SellerAcquisition route
Scheduled date of acquisition

Zao Properties TMK
Acquired from third parties
June 30, 2020

(As of April. 30, 2020)

Buyer
Acquisition date3.6%

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%

NOI yield (estimate) (Note 1)

Note 1: Calculated by dividing the annualized NOI (estimate) calculated by the Asset Management Company excluding extraordinary factors for the acquisition year by the anticipated acquisition price (rounded to the nearest
first decimal 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 anticipated acquisition priceNote 3: Calculated by dividing the NOI based on the direct capitalization method described in the appraisal report as of May 1, 2020 by the anticipated acquisition priceNote 4: The figures indicate the estimated book values as of the scheduled date of sale (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 anticipated sale price3

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 thefuture 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.

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