Table of contents

Section 1

Management highlight

P. 2

Section 2

Financial results and earning forecasts

P. 4

Section 3

Management status

P. 9

Section 4

Financial status

P. 19

Section 5

Initiatives for sustainability

P. 23

Section 6

Future initiatives

P. 30

1

Section 1

Management highlight2

Management highlight
Finance

External Growth• No acquisition or sale of properties for the fiscal
period ended October 31, 2021
Number of properties

96

properties

AUM

440.1

bn yen• The sale of the part of the land of KDX Toranomon
1chome Building (December 2, 2021)
Gain on sale ofreal estate etc.

763

mn yenEstimated amount ofprovision of reserve
for reduction entry

288

mn yen+200 mn yen• Occupancy rate improved after bottoming out at 96.0%
in July 2021
Increase rate of

97.6

%

+0.9% period over period

Monthly rent
increase+3.6 mn yen

Due to tenant replacement
and rent revisions

Average rate ofinterest bearing debt

0.86

％

-0.07% period over period

Financial
institutions

LTV

Period over period

As of the end of fiscal
period 2021/10

+8

43.6

％

Increase inappraisal value

Internal Growth

Occupancy rate

• Refinancing through large-scale syndicated loans, etc.
(November 2021)

monthly rent unit priceupon tenant turnover+2.7%

Sustainability• Strengthening the system for initiatives at the AssetManagement Company (Establishment of the
Sustainability Committee and the Sustainability
Office)• Expressed support for the recommendations of the
Task Force on Climate-related Financial Disclosures(“TCFD”)• Earned “Green Star” in GRESB for the 10thconsecutive years (4 stars)• Started introducing electricity derived fromrenewable energy at property
3Section 2

Financial results and earning forecasts

4

Financial result of the fiscal period ended October 31, 2021
(mn yen)
21/4
Items

Actual

21/10

21/10

Performancecomparison

Forecast

ActualDifference

Actual –forecast
comparison
Difference(announced onJune 15, 2021)

A
16,301
15,119
1,128
53
8,310

B
15,035
14,962
－
73
8,316

C
15,02814,981
－
46
8,170

C-A
-1,272-137-1,128-6-139

Rental and other operating expense(excluding depreciation)

4,331

4,608

4,486

154

-121

Loss on sale of real estate etc.
Depreciation
General and administrative expense(Asset management fee)
Operating income
Non-operating income
Non-operating expense(Interest expenses, etc.)
Ordinary income
Net income

198
2,548
1,230
1,044
7,990
0
973
934
7,017
7,016

－
2,576
1,130
921
6,719
0
959
950
5,760
5,759

－
2,567
1,116
930
6,857
0
947
938
5,911
5,909

-198
18
-113
-114
-1,1320-26
3-1,106-1,106

－
-9
-13
8
138
0
-12
-12
150
150

Rental NOI (Note 1)
Rental NOI (excluding repair /maintenance expense)

10,787

10,353

10,495-292

141

11,143

10,787

10,832-310

44

Rental and other operating profit

8,238

7,776

7,927

-311

151

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

423

-239

-89

-513

150

Total distributions
DPU (yen)
NAV per unit (yen)FFO (Note 2)# of total units outstanding

6,592
15,384740,000
8,635
428,510

5,999
14,000－8,336
428,510

5,999
14,000745,000
8,477
428,510-593-1,384
5,000
-158
0

0
－
－
140
0

Operating revenue
Rental and other operating revenue
Gain on sale of real estate etc.
Dividend income
Operating expense

C-B
-7
19
－
-26
-145

Note 1: Rental NOI = Operating revenue – Gain on sale of real estate etc.– Dividend income – Rental and other operating expense(excluding depreciation)
Note 2: FFO = Net income + Depreciation – Gain on sale of real estate etc.+ Loss on sale of real estate etc.

Comparison to the fiscal period ended April 30, 2021
■Operating revenue●Existing properties
・Rent / common area charge
・Utilities
・Other rental and other operating revenue

・Dividend income●The properties sold in fiscal period 2021/4
・Rental and other operating revenue
・Gain on sale of real estate etc.
■Operating expense●Existing properties
・Utilities
・Taxes・Repair / maintenance expense
・Depreciation
・Other rental and other operating expense
・Asset management fee●The properties sold in fiscal period 2021/4
・Rental and other operating expense
・Loss on sale of real estate etc.
・Depreciation-1,272 mn yen-104 mn yen-213 mn yen+133 mn yen-17 mn yen (Parking revenue -17, Restoration
work revenue -10, Revenues from
Senri LSC Hall operation +10)
-6 mn yen (TK Dividend: KRF43 Shinjuku
Sanei Bldg.)-1,167 mn yen-39 mn yen (KDX Hon-Atsugi Building -38,
KDX Shin-Nihonbashi Building -0)-1,128 mn yen (Disappearance of gain on sale of
KDX Shin-Nihonbashi Building)-139 mn yen+96 mn yen+139 mn yen+48 mn yen-18 mn yen+34 mn yen+6 mn yen-114 mn yen-236 mn yen-21 mn yen (KDX Hon-Atsugi Building -15,
KDX Shin-Nihonbashi Building -5)-198 mn yen (Disappearance of loss on sale of
KDX Hon-Atsugi Building)-16 mn yen

Comparison to the forecast of
the fiscal period ended October 31, 2021 (announced on June 15, 2021)■Operating revenue
・Rent / common area charge
・Utilities
・Other rental and other operating revenue
・Dividend income■Operating expense
・Utilities
・Taxes・Repair / maintenance expense
・Depreciation
・Other rental and other operating expense
・Asset management fee
・Other expense-7 mn yen
+31 mn yen-30 mn yen+18 mn yen (Revenues from Senri LSC Hall
operation +8, Others +10)
-26 mn yen (TK Dividend: KRF43 Shinjuku
Sanei Bldg.)-145 mn yen+14 mn yen-11 mn yen-96 mn yen-9 mn yen
-28 mn yen+8 mn yen
-22 mn yen

5Earning forecasts of the fiscal period ending April 30, 2022 and October 31, 2022
(mn yen)
21/10

22/4

22/10

ActualForecast

Forecast

Items
A
15,02814,981
－
46
8,170

B
15,757
14,940
763
53
8,530

C
15,20915,162－
46
8,514

Rental and other operating expense(excluding depreciation)

4,486

4,766

Loss on sales of real estate etc.
Depreciation
General and administrative expenses(Asset management fee)
Operating income
Non-operating income
Non-operating expense(Interest expenses, etc.)
Ordinary income
Net income

－
2,567
1,116
930
6,857
0
947
938
5,911
5,909

Rental NOI (Note 1)

22/4 forecast 22/10 forecast
21/10 actual 22/4 forecast
Comparison Comparison
Difference
728
-41
763
6
359

C-B
-548
221
-763
-6
-15

4,740

279

-26

－
2,603
1,160
949
7,227
0
939
912
6,288
6,287

－
2,629
1,143
922
6,694
0
895
884
5,800
5,799

－
36
43
19
369
0
-8
-25
377
377

－
26
-16
-26
-532
0
-44
-27
-488
-488

10,495

10,174

10,421-320

247

Rental NOI (excluding repair /maintenance expense)

10,832

10,64910,802-183

152

Rental and other operating profit

7,927

7,570

7,791

-356

221

-89

288

-199

377

-488

5,999
14,0008,477
428,510

5,999
14,0008,127428,510

5,999
14,0008,428
428,510

0
0
-350
0

0
0
301
0

Operating revenue
Rental and other operating revenue
Gain on sale of real estate etc.
Dividend income
Operating expense

Provision (+) / reversal (-) ofreserve for reduction entry
Total distributions
DPU (yen)
NAV per unit (yen)FFO (Note 2)

B-A

Difference

Note 1: Rental NOI = Operating revenue – Gain on sale of real estate etc. – Dividend income – Rental and other operating expense(excluding depreciation)
Note 2: FFO = Net income + Depreciation – Gain on sale of real estate etc. + Loss on sale of real estate etc.

Comparison between the actual of the fiscal period ended
October 30, 2021 and the forecast of the fiscal period
ending April 30, 2022

■Operating revenue
・Rent / common area charge
・Utilities
・Other rental and other operating revenue
・Gain on sale of real estate etc.
・Dividend income■Operating expense
・Property / facility management fee
・Utilities
・Taxes・Repair / maintenance expense
・Brokerage fee
・Depreciation
・Other rental and other operating expenses
・Asset management fee
・Other expense+728 mn yen+59 mn yen-82 mn yen-18 mn yen (Premium income -14,
Cancellation penalty -12, Others +8)+763 mn yen (Partial sale of the land of KDX
Toranomon 1chome Building)+6 mn yen (TK Dividend: KRF43 Shinjuku Sanei
Bldg.)+359 mn yen+35 mn yen+45 mn yen+9 mn yen+137 mn yen+16 mn yen+36 mn yen+35 mn yen+19 mn yen+23 mn yen

Comparison between the forecast of the fiscal period
ending April 30, 2022 and October 31, 2022
■Operating revenue
・Rent / common area charge
・Utilities
・Gain on sale of real estate etc.

・Dividend income■Operating expense
・Property / facility management fee
・Utilities
・Taxes・Repair / maintenance expense
・Brokerage fee
・Depreciation
・Other rental and other operating
expense・Asset management fee
・Other expense-548 mn yen+60 mn yen+161 mn yen-763 mn yen (Disappearance of gain on sale of thepartial land of KDX Toranomon 1-chome
Building)-6 mn yen (TK Dividend: KRF43 Shinjuku Sanei
Bldg.)-15 mn yen-9 mn yen
+70 mn yen+55 mn yen-94 mn yen-33 mn yen+26 mn yen-14 mn yen-26 mn yen+10 mn yen

6DPU and NAV per unit
Reversal of reserve for
reduction entry of KDX ShinNihonbashi Ekimae Building

DPU (Note 1)(yen)

12,96013,458446

13,719619

13,63912,96013,012

13,10013,639Fiscal18/4期
period実績
2018/4
ActualFiscal18/10期period実績
2018/10
ActualFiscal19/4期
period実績
2019/4
ActualFiscal19/10期period実績
2019/10
ActualThe portion of the gain onsale of KDX Toranomon
1chome Building (land)

15,384792

15,384
1,179

14,00014,412

14,592

14,205

13,791

Fiscal20/4期
period
実績
2020/4
ActualFiscal20/10期period
実績
2020/10
ActualFiscal21/4期
period実績
2021/4
ActualFiscal21/10期period実績
2021/10
Actual

14,412

Increase due to gain on sale of property (including plan)

The expected DPU of the
fiscal period ending October30, 2022209

14,000•

Actively utilize the provided
reserve for reduction entry
to stabilize DPU after thesale of KDX ShinNihonbashi Building

12,891

13,533•

Secure DPU 14,000 yen byreversing reserve for
reduction entry in fiscal
period 2022/10

Fiscal22/4期
period予想
2022/4
Forecast

Fiscal22/10期period予想
2022/10
Forecast•

If EPU exceeds 14,000 yen,utilize the planned amount ofreversal to stabilize DPU
from the next fiscal period
onward14,000467

1,109

Amount of reversal of reserve for reduction entry (including plan)

NAV per unit (Note 2)(yen)

596,000

615,000

631,000

654,000

687,000

719,000

727,000

738,000

740,000

745,000

Increase in NAV

25.0%

+

Compared to the fiscal period
ended April 30, 2017
17/4期
Fiscal
実績
period2017/4
Actual17/10期
Fiscal
実績
period2017/10
Actual

18/4期
Fiscal
実績
period2018/4
Actual18/10期
Fiscal
実績
period2018/10
Actual

19/4期
Fiscal
実績
period2019/4
Actual19/10期
Fiscal
実績
period2019/10
Actual

20/4期
Fiscal
実績
period2020/4
Actual20/10期
Fiscal
実績
period2020/10
Actual

21/4期
Fiscal
実績
period2021/4
Actual21/10期
Fiscal
実績
period2021/10
ActualNote 1: Figures per unit are calculated based on the number of investment units issued and outstanding as of the end of each fiscal period. Also, the distributions, the provision and reversal
amount of the reserve for reduction entry are the estimation as of December 14, 2021, and may increase or decrease in the future. The same applies hereinafter.
Note 2: NAV per unit is truncated to the nearest thousand yen after subtracting the amount of DPU.

7

Balance of reserve for reduction entry(mn yen)Sale of KDX ShinNihonbashi Ekimae Building

Sale of the part of the land of KDX
Toranomon 1chome Building

3,493

423

4,116

Provision

3,917
Provision

Policy of the utilization of the reserve
for reduction entry to be provided
after the fiscal period ended April 30, 2021

3,828
Reversal
89

334

3,916

288
334

288
Reversal
199

134

・ The reserve for reduction entry which is provided
by the sale of KDX Shin-Nihonbashi Building andthe part of the land of KDX Toranomon 1chome
Building, is to be fully utilized to stabilize DPU for
the time being

Policy of utilizing the reserve for reduction entry which
has been provided
until the fiscal year ended October 31, 2020
3,493

Reserve for
reduction entry
per unit

3,493

3,493

3,493

3,493

The end of fiscal
20/10期末
period 2020/10
実績
ActualThe end of fiscal
21/4期末period 2021/4
実績
ActualThe end of fiscal
21/10期末
period 2021/10
実績
ActualThe end of fiscal
22/4期末period 2022/4
予想
Forecast

The end of fiscal
22/10期末
period 2022/10
予想
Forecast

8,152 yen

9,142 yen

8,934 yen

9,607 yen

9,140 yen

989 yen781 yen781 yen314 yen

673 yen

673 yenEquivalent to the provision or reversal
amount of the reserve for reduction entryof KDX Shin-Nihonbashi Ekimae Building
Equivalent to the provision or reversal
amount of the reserve for reduction entryof KDX Toranomon 1chome Building

Prioritize the above policy of use of the reserve for
reduction entry after the fiscal period ended April 30,
2021, and hand over the following conventional policy
to use the remaining amount・ To cope with temporary declines in revenues andexpenses・ Response to temporary decrease in distributions
due to investment for growth・ Response to dilution of distributions due to public
offering during the fiscal period

Note: Actual and expected 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 same applies to the reserve for special account for tax purpose reduction entry
pertaining to the partial sale of the land of the KDX Toranomon 1chome Building. However, this is due to the “Special Provisions for Taxation in the event of Acquisition of Alternative Assets upon Expropriation, etc.“, and inorder to apply this exception, it is prerequisite to acquire alternative assets. In addition, the increase or decrease in reserve for reduction entry from the fiscal period ending April 30, 2022 onward is assumed as of December 14,
2021, and may increase or decrease in the future.

8Section 3

Management status

9

Partial Sale of Land of KDX Toranomon 1chome Building(December 2, 2021)

Highlightsof the Sale

• Sold at a price significantly higher than the appraisal value (+26.1%)• Approximately 763 million yen of gain on the sale of real estate etc. is to begenerated. The portion of the sale is to be provided the reserve for
reduction entry and fully utilized to stabilize DPU for the time being• NOI improved due to a decrease in the fixed asset tax and the city
planning tax, and the appraisal value of the entire building after the saleincreased.

Scheduled proivsion toreserve for reduction entry+288 mn yen
Increase in appraisal value (Note 1)+200 mn yen+0.9％ from before the sale

Outline of the land subject to sale
Sale Price

1,702 million yen

Appraisal Value(as of November 15, 2021)

1,350 million yen

Book Value （Note 2）

The landsubject to sale

943 million yen

BuyerTokyo Metropolitan
Government

Date of Sale

December 2, 2021

Site Area

114.30㎡(of the whole 1,564.12㎡)

Note 1: The appraisal value of the entire land and building of KDX Toranomon 1chome Building before and after the acquisition which is calculated by the Japan Real Estate Institute is compared.
Note 2: The book value on the date of the sale is indicated (rounded down to the nearest million yen).

10Occupancy and turnover ratio for office buildings• Occupancy rates remained in a declining phase, however there were signs of an increase with the recent increase intenant’s occupancy
Occupancy rate performance of office buildings (Note 1)
110.0

Turnover ratio (annualized) of office buildings (Note 2) (Note 3）

(%)

9.2%

Fiscal period average occupancy rate

105.0

96.6%
100.099.2

99.5

99.5

98.1

98.6

95.097.3

96.7

97.6%

2.6%
7.0%
6.3%

4.6%

98.2

97.6

96.7

98.0%

2.8%
2.9%

97.5
94.8

4.5%

3.1%

95.3

93.3

0.8%

3.3%

90.0

6.5%

0.5%
Fiscal period average actual occupancy rate

85.0

93.9%

94.4%

94.8%

Occupancy rate(contracted area based)

稼働率（契約面積ベース）

Actual occupancy rate

実質稼働率（FR面積控除後）(excl. free rent area)

Forecast

4.3%

4.2%
3.2%

80.0
第28期 Fiscal 第29期 Fiscal 第30期 Fiscal 第31期 Fiscal 第32期 Fiscal 第33期 Fiscal 第34期 Fiscal 第35期
19/10期
Fiscalperiodperiodperiodperiodperiodperiodperiodperiod（19/4期）末（19/10期）末（20/4期）末（20/10期）末（21/4期）末（21/10期）末（22/4期）末（22/10期）末
2020/42020/102021/42021/102022/42022/10
2019/10
Forecast

8.9%

2019/10

2.8%

20/4期
Fiscalperiod2020/4

20/10期
Fiscalperiod2020/10Less than200 tsubo
200坪未満200坪以上21/4期
Fiscalperiod2021/4

21/10期
Fiscalperiod2021/10

3.6%

22/4期
Fiscalperiod想定

2022/4
Forecast

200 tsubo or more

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 thendividing 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 officebuildings during each period. The estimated average (actual) occupancy rate for the fiscal period 2022/4 and 2022/10 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) / (Average leasablearea 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 the fiscal period 2022/4 is based on the cancellation notice, etc. received by November 30, 2021.
11

Trends in move-ins/outs of tenants
Area and number of move-ins/outs (Note 1)

Reasons for move-ins/outs (Note 2)• Although there were the trends of vacation in advance due torevision of contract area, steadily capture relocation demand,
resulting in more occupancy in the current fiscal period than vacation• Reasons for occupancy: expansion relocation remains at a high level. There
has been no change in the trend of steady tenants being occupied.

(Tsubo)(49)
5,795

Fiscal21/10期period

(65)
5,217
(36)
2,020

2021/10

(35)
2,365

OUTs

1,240

INs

(78)
7,648

Fiscalperiod
21/4期
2021/410.0-2,428-2,795

(35)

8.0

(57)

-6,700(73)

FiscalFiscalperiod
19/10期period
20/4期

入居面積
Space
leased

退去面積Space
vacated2019/102020/4

19.3%
(12)

8.1%
(5)

85.9%
(55)

Fiscal

11.1%
(6)

79.6%
(43)

Fiscalperiod20/10期

2020/10

Fiscalperiod
21/4期

2021/4-6,463

4.0

(63)

2.0

Fiscalperiod
21/10期
2021/10

入居面積-退去面積Space
leased –() Number of move-in/out
Space vacated0.0■ Other/unknown

4.7%
(3)
9.3%
(5)
() Number of move-in/out

Free rent period (months) (Note 3)• Expansion of the strategic free rent period with the highest priority on
raising the occupancy rate

6.0

-5,160

(47)

72.6%
(45)

■ Floor expansion ■ Floor reduction-1,483-4,555

8.2%
(4)

9.4%
(6)

2021/10

-408

22.4%
(11)

Fiscal21/4期
period2021/4

21/10期period

1,185

69.4%
(34)

4.8
2.9

1.4 1.8

2.7

2.2 1.9

5 Central
Wards of Tokyo
都心5区
Fiscal period

19/10期
2019/10

4.0
1.7

1.5

Tokyo Metropolitan Area
その他東京経済圏(excluding 5 central wards)

Fiscal period

20/4期
2020/4

2.7

Fiscal period

20/10期
2020/10

1.0 1.3 1.3Other地方経済圏
Regional Areas

Fiscal period

21/4期
2021/4

2.8

Fiscal period

21/10期
2021/10Note 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：The above data is based on the survey 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 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 above. For move-out,
the figures are based on the number of tenants on all floors except for residential floors.
Note 3: 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 first decimal 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.

12

Rent changes upon tenant turnover for office buildings• Due to the effect of tenant replacements by robust medium-sized companies and SMEs, about 60% of all replacements
exceeded previous rents, and rent unit prices continued to increase
Change in monthly rents at the timeof replacement of tenants (Note 1)

Change in monthly rent unit price and rateof change at tenant replacement (Note 2)(million yen)

(yen/tsubo)

21.5＋20.7%

21.0

8.2

6.3
3.7
Total rent
increase
Total rent
decrease

6.2

-0.8

-0.1

＋8.3%
＋9.8%

3.0

2.9
-0.4

17,7788.1

6.7

21,453

16,613＋20.8%

16,292

17,192＋2.7%

15,875

15,136-1.4

15,38415,806

13,486-5.0
Fiscal% of the numberof rent increase
contracts upontenant turnoverFiscalFiscalFiscalFiscalperiod
19/10期period20/4期

period20/10期period21/4期

period
21/10期

85.1%

72.7%

93.3%

76.3%

60.6%

2019/102020/42020/102021/42021/10

Total rent increase - Total rent decrease

Fiscalperiod
19/10期
2019/10

Fiscalperiod
20/4期
2020/4

Fiscalperiod20/10期
2020/10

従前のテナント賃料単価
Unit rent for previous tenant

Fiscalperiod
21/4期
2021/4

Fiscalperiod
21/10期
2021/10

新規テナントの賃料単価
Unit rent for new tenant

Note 1: 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 becompared.
Note 2: 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 “Area and number ofmove-ins/outs” in page 12. 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.

13

Status of rent revisions with existing tenants• While the increasing difficulty of negotiations due to COVID-19, the increase in the actual net rent continues by persistentnegotiations
Changes in rent upon rent revisions(based on monthly rent) (Note 1)

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

14,017
13,906
11,225

9,885
9,885

7,045

9,992
No change(Lower thanmarket rent
(170)
56.4%

7,045

1,667
615
-111
Fiscalperiod
19/10期
2019/10

Increase
増賃額
in rent

Fiscalperiod
20/4期
2020/4

Fiscalperiod20/10期
2020/10Decrease
減賃額
in rent

2,926
1,455

-1,233-1,052-1,471

Fiscalperiod
21/4期
2021/4

Fiscalperiod
21/10期
2021/10

Fiscalperiod22/4期
2022/4以降
OnwardIncrease in rent –
増賃額－減賃額
Decrease in rent

Confirmed as of
Nov. 15, 2021

Rent decrease
(5)
5.4%

Rent
decrease(3)
0.8%

Exception for
negotiation(Higher thanmarket rent)
(58)
17.2%

(thousand yen)Rent
increase
(36)
25.6%

Fiscal period
2021/4267

Exception for
negotiation(Higher thanmarket rent)
(73)
25.5%

Rent
increase(18)
8.7%

Fiscal period
2021/10250

No change(Lower thanmarket rent
(154)
60.5%

Negotiation Target

Number of rent increase contracts and rent increase rate
(number)

94

103

Tokyo central

都心5区
5 wards

Other areas
都心5区以外

52
64

30
Rent
increase rate
(incremental
average)

51

38

36

28

24

10

12

18
13

Fiscal period
19/10期
2019/10

Fiscal period
20/4期
2020/4

Fiscal period
20/10期
2020/10

Fiscal period
21/4期
2021/4

Fiscal period
21/10期
2021/10

6.7%

7.7%

10.4%

9.4%

4.7%

5

(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
upon rent revisions 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.
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).

14

Rent gap of KDO office buildings• Rent gap continues to shrink due to the impact of lower market rents, while tenant replacement and increased rentat the time of rent revision
Breakdown of rent gaps by rent revision schedule

Breakdown of rent gaps (based on monthly rent) (Note 1)(as of the end of fiscal period 2021/10, based on monthly rent) (Note 1) (Note 3)Over 10%Higher thanmarketrent level（mn yen）

222 mn yen
Between 0% and 10%103

527 mn yen

578 mn yen

Lower thanmarket rent level
59.7%

Lower than -10%

Fiscal21/10期period2021/10532 mn yen

163
Fiscal22/4期
period
到来分

-4.3

-2.2
-10.7

19.5 21.0
14.4

Decline(20)
4.2-0.6 -2.1-4.2 -6.6

Fiscal22/10期period
到来分

2022/4

（%）

4.7

59.2%

89

2022/10

117

137

90
62.9%

Fiscal23/4期
period
到来分

117

56.6%

42.1%

43

Fiscal23/10期period到来分

2023/4107

Fiscal24/4期
period以降到来分

2023/102024/4
OnwardChange in market rent of owned properties (Note 4)

Historical average rent gaps (Note 2)

7.1

132

120

71

123

■ Over+10%超
+10%
-10%超
-10%以内 ■ 0%~+10%+10%以内■ Over
-10% ■ -10%~0%End 21/10期末of fiscal period
2021/10

10.3

76.3%

36

111

110

127

119

35

33

105

Between -10% and 0%

Lower thanmarketrent level

45
44

35

-8.9 -9.3 -8.7 -6.9

-5.9

FiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscalFiscal05/10期
13/10期
15/10期
17/10期
19/10期period 07/10期
period 09/10期
period 11/10期
periodperiodperiodperiodperiod 20/10期
period 21/10期
period2005/10 2007/10 2009/10 2011/10 2013/10 2015/10 2017/10 2019/10 2020/10 2021/10

Rise
(0)

Decline
(19)

4
15 4%
16% Fiscal

6
14 6%
33
15% Fiscal 35%
period19
20%

period2021/4
(95)

23
24%

Rise
(0)

Flat
(75)

19 2021/10
(95)
20%
25
26%

32
34%

Flat
(76)

■ 5 Central Wards of Tokyo ■ Tokyo Metropolitan Area
■ Other Regional Areas(excluding 5 central wards)

Note 1: A new contracted rent (standard floor) for each property estimated by CBRE as of the end of the fiscal period ended April 30, 2021 is deemed the market rent; the gap between the contracted rent for each tenant as of the endof the fiscal period and the market rent is recognized as a rent gap. No gap is classified into “Between 0% and +10%”.
Note 2: 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 the as of the end of each fiscal period and themarket rent for each property estimated by CBRE at the time of appraisal.
Note 3: Regarding the office buildings owned by KDO as of the end of the fiscal period ended October 31, 2021, distribution of the rent gaps between the contracted rent for each tenant and the market rent estimated by CBRE as ofthe end of the fiscal period ended October 31, 2021 by the timing of rent revisions for each tenant. The rents equal to market rents are classified into “Between 0% and +10%”.
Note 4: Trends in market rents from the previous fiscal period are shown by trend and by region.

15

Construction expense (actual/budget)
Depreciation and construction expense (actual/budget)(mn yen)/ maintenance ■■
Capex
修繕費
資本的支出
■■減価償却費
Depreciation ■■ Repair

3,000

1,500

1,960

1,835

1,692

474

409

356

474

1,326

1,366
380

337

1,000
500

1,923

1,776

441

1,426

1,485

Fiscal period
19/10期
2019/10
実績
actualFiscal period
20/4期
2020/4実績
actual

1,251

1,420

After

Before

2,629

2,603

2,576

2,548

2,523

2,470

2,500 2,419
2,000Introduction of Value-Upgrading Work for fiscal period 2021/10

1,448
988

986

0
Fiscal period
20/10期
2020/10
実績
actualFiscal period
21/4期
2021/4実績
actualFiscal period
21/10期
2021/10
実績
actualFiscal period
22/4期
2022/4予算
budgetFiscal period
22/10期
2022/10予算
budgetRepair/renovation work budget for fiscal period 2022/4 (Note)
Items

Description of works

Estimatedamount(mn yen)

Major Construction Projects for fiscal period 2022/4 (Planned)

Percentage of
total expense(%)

Value-upgrading works

tenant and common areas

137

7.1

Replacement works

Air-conditioning facilities

276

14.4

Other major facilities

480

25.0

Eco-friendly works(Installation of LED lightings. , etc)

113

5.9

Outer wall repair

390

20.3

Maintenance/repair works

527

27.4

1,923

100.0

Total

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

Renewal of common areas on the 4th and 7th floorsof the KDX Chofu Building (improved tenant satisfaction)

Construction items

Target property

Value-upgrading works

KDX Nakano-Sakaue Building, KDX Nagoya Ekimae
Building, KDX Shin-Nihonbashi Ekimae Building

Replacement works of
air-conditioning facilities

Toshin 24 Building

Outer wall repair

KDX Ochanomizu Building, KDX Sakura-dori
Building, KDX Kajicho Building

Eco-friendly works(Installation of LED
lightings. , etc)

KDX Chofu Building, KDX Kasuga Building

16

Leasing status of low-occupancy properties• Accurately grasp market conditions, implement swift and flexible leasing strategies, and aim for early recoveryof the occupancy rate
Portus Center Building

Percentage of the portfolio

2.4 %

0.8 %

87.2%

90.6％

 Promote the location characteristics (access to KansaiInternational Airport, direct connection to stations), top-classbuilding grade and spec in the area, etc. and develop leasing
activities targeting the demand of the sales bases especially in
the South Osaka area, and aiming to improve the occupancy

KDX Kojimachi Building

Percentage of the portfolio

Occupancy rate
as of the end of
October 2021

Estimated
occupancy rate
as of the end of
April 2022

Occupancy rate
as of the end of
October 2021

Estimated
occupancy rate
as of the end of
April 2022

88.3%

100%

 Due to cancellations of multiple floors, the occupancy rate was
expected to decline to 76%, however it is expected to be fully
occupied by focusing on leasing, such as capturing relocation
demand through reconstruction of neighboring buildings

KDX Ochanomizu Building(Image after renewal is for illustrative
purpose only)

Percentage of the portfolio

1.2 %Occupancy rate
as of the end of
October 2021

Estimated
occupancy rate
as of the end of
April 2022

81.3%

77.7%

 Vacancies increased due to a succession of tenant cancellations as
a result of cost-cutting associated with COVID-19 and a decrease infloor space due to remote work expansion
 Aiming for early recovery of occupancy by highlighting improvementof the appearance due to large-scale renewals of exterior walls andentrances, etc.

KDX Iidabashi Building
Occupancy rate
as of the end of
October 2021

Estimated
occupancy rate
as of the end of
April 2022

51.9%

62.0%

 Occupancy rate decreased due to cancellation of multiple floors
 Planned TurnKey Office (interior designed and furnished office) anddeveloping new initiatives to meet diversifying office requirements
Percentage of the portfolio  Aiming for early recovery of occupancy by implementing leasing
0.9 %measures such as the establishment of a dedicated website

KDX Tosabori Building

Percentage of the portfolio

1.2 %Occupancy rate
as of the end of
October 2021

Estimated
occupancy rate
as of the end of
April 2022

89.0%

94.6%

 The occupancy rate was expected to decrease to 72.6% due to the
new cancellations of 1.5 floors in addition to the existing vacancy of
1 floor, however captured new tenants by implementing flexible
leasing measures such as floor splits. Aim to further fill back

KDX Shinbashi Building

Occupancy rate
as of the end of
October 2021

Estimated
occupancy rate
as of the end of
April 2022

81.4%

84.8%

 2 floors cancelled due to expiration of fixed term lease contract
 Aiming for early full occupancy by implementing leasing measures
such as attracting commercial tenants and splitting floors
Percentage of the portfolio

1.1 %Note: Percentage of the portfolio is calculated by dividing the leasable area of the property as of the end of October 2021 by the leasable area of all 95 office buildings owned at the same time, rounded to the nearest second
decimal place. Estimated occupancy rates as of the end of April 2022, including lease agreements with new tenants that have been or will be concluded as of December 8, 2021.

17

End-tenants of KDO office buildings• The largest tenant occupies 2.3% 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 the fiscal period ended October 31, 2021)

1

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

Mitsubishi Heavy Industries,
Ltd.

3,408.4

2.3

Mitsubishijuko Yokohama Bldg.

1,920.0

1.3

KDX Toranomon 1chome Bldg.

1.1

KDX Kawasaki-Emimae
Hon-cho Bldg.

2 WeWork Japan G.K.
Tenant A
3(wholesale, retail and dining)

1,550.8

4 Japan Pension Service

1,424.9

1.0

KDX Chofu Bldg.

Tenant B(Manufacturing)

1,308.0

0.9

KDX Kobayashi-Doshomachi Bldg.

6 JASTEC Co., Ltd.

1,304.6

0.9

KDX Takanawadai Bldg.

5

Fiscal period
2020/10

Fiscal period
2021/4

Fiscal period
2021/10

15,900 yen

16,000 yen

16,000 yen

5 Central Wards of Tokyo

19,500 yen

19,500 yen

19,500 yen

Tokyo Metropolitan Area
(excluding 5 central wards)

14,200 yen

14,400 yen

14,400 yen

Other Regional Areas

12,900 yen

13,000 yen

13,000 yen

Name of property
Office buildings

Tenant diversification by type of business(based on # of tenants) (Note 3)
運輸・通信業Transportation,
37件 3.4%
Communication(37) 3.4%
建設業
Construction
43件 3.9%(43) 3.9%
不動産業
Real Estate
47件
4.3%(47) 4.3%

7

Customer relation
telemarketing, CO,LTD

1,279.6

0.9

KDX Higashi Umeda Bldg.

8

Tenant C(service provider)

1,080.1

0.7

KDX Musashi-Kosugi Bldg.

9 Medical Corporation DOYUKAI 1,079.6

0.7

Koishikawa TG Bldg.

金融・保険業
Finance,Insurance
47件
4.3%(17) 4.3%

Harajuku F.F. Bldg.

Individual
個人(54) 4.9%
4.9%
54件

10

Tenant D(wholesale, retail and dining)

912.2

0.6

Total

15,268.2

10.7

Manufacturing
製造業(146) 13.2%
13.2%
146件

Public sector(other)
公務(その他)(4) 0.4%
4件 0.4%
Infrastructure
電気・ガス・水道・熱供給(3) 3件0.3%
0.3%
Mining鉱業(1)0.1%
1件 0.1%# of tenants(1,106)

サービス業
482件
43.6%
Serviceprovider(482) 43.6%

Wholesale, Retail, Dining
卸売業・小売業、飲食店(242)21.9%
21.9%
242件

Note 1: Leased area of each end-tenant against total leased floor area of KDO portfolio as of the end of fiscal period 2021/10 (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 fiscal period 2021/10 (rounded to the first decimal place)18Section 4

Financial status

19

Highlight
The fiscal period ended October 31, 2021
Issuance of investment corporation bonds andrefinancing centered on short-term borrowings•••

In anticipation of the origination of syndicated loans in
the next fiscal period, refinanced 15.3 billion yen in total
in the fiscal period ended October 31, 2021
Of this amount, 2.0 billion was raised throughinvestment corporation bonds and applied towards therepayment of the short-term borrowings
The amount of highly flexible short-term borrowings was
significantly increased while lowering the interest rate
■Outline of refinanceTotal 15.3 bn yen

Total 15.3 bn yen

Short-termborrowings
3.5 bn yen

Corporate bonds
2.0 bn yen

Refinanced

Long-term
borrowings
11.8 bn yen

Short-term borrowings
7.3 bn yen
Long-term borrowings
6.0 bn yen

Before refinance

After refinance

Average interest rate

0.91%

Average borrowing term

5.8 years

0.32%
2.2 years■Outline of corporate bonds
Corporate bonds

13th bonds

Issued amount

2.0 bn yen

Term

5 years

Issued period

July 2021

Interest rate

0.18%

The fiscal period ending April 30, 2022 (Executed in November 2021)

Origination of syndicated loans and establishmentof a line of credit loan master agreement (uncommitted)•••

Originated syndicated loans (14.9 billion yen) and refinanced with the aim of reducing interest
costs and expanding the funding base
A line of credit loan master agreement (uncommitted, 5.0 billion yen) is set and the part of it isused for refinancing (total amount: 2.8 billion yen)Completed refinancing of borrowings maturing in the fiscal period ending April 2022 through theabove initiatives

Beforerefinance

Borrowings atmaturity (all)13.2 bn yen

Shortenedborrowing term to
be refinanced bysyndicated loans

Fiscal period 2022/10

Borrowings atmaturity (partial)

4.5 bn yen

Average interest rate

0.86%
+8

Period over period- 0.07%

Reducing interest costs through refinancing

Fiscal period 2022/4

Financial institutions

Compared to the 11th bonds
issued in January 2020 with thesame amount and term

Syndicated loan 14.9 bn yen■Outline of refinance

A line of credit loan masteragreement (uncommitted)

5.0 bn yen

Refinanced

Average interest rate

0.79%

Average borrowing term

5.0 years

After
refinance

0.42%
4.1 years

A line of credit loan master agreement (uncommitted) 2.8 bn yen

Reduction in interest costs through refinancing
at lower interest rates than in the past

Reduced interest costs from 0.94% (as of theend of fiscal period 2021/4) to 0.86%
Further expansion of lender formation bystrengthening the creditworthiness of sponsors
Strengthen procurement mobility by setting
commitment line with flexible uses of funds

Note: Each average interest rate and borrowing period is the weighted average of the interest rate of borrowings (incl. up-front fee) and borrowing period based on each balance of borrowings (with the average interest rate
rounded to the second decimal place and the average borrowing period rounded to the first decimal place).

20

Financial status
Average interest rate and remaining period to maturity (Note 1)

1.1

6

1.02%
0.97%
0.94%

0.94%

0.86%
0.9

End
of fiscal
19/10期末
period2019/10Endof fiscal
20/4期末period2020/4Endof fiscal
20/10期末
period2020/10Endof fiscal
21/4期末period2021/4End of
21/11月末

Balance of interest-bearing debt
and Historical LTV (interest-bearing debt ratio) level (Note 2)

2,050

5

2,000

4

1,950

3

1,900

2

1,850

1

1,800

0

1,750

4.8

4.5

42.9

42.1

36.0

End
of fiscal
19/10期末
period2019/10

November
2021

4.7

4.6

48
44
40
36

End
of fiscal
20/4期末period2020/4Endof fiscal
20/10期末
period2020/10

Balance of

4.5

43.6

43.4

Appraisal-value
based LTV

Weight average interest rate (incl. up-front fee)
平均金利（融資実行手数料を含む）
Average remaining
period to maturity(year)

43.9

185.0

End
of fiscal
21/10期末
Period2021/1032

LTV

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

有利子負債残高interest-bearing debt

Balance of interestbearing debt
（bn yen）

Endof fiscal
21/4期末period2021/4

192.0

201.7

198.7

198.7

Balance of interest-bearing debt by maturity (as of the end of November 2021)(bn yen)

1.25

0.87

0.80

0.96

0.94

0.68

0.76

0.69

0.89

0.97

0.88

0.85

0.77

0.83

0.90

21.60

Refinanced at theend of November
with syndicatedloans, etc.

14.10

12.80

12.45
9.70

2.80
1.00

9.50

9.50

8.65
4.80

Fiscalperiod
23/4期
2023/4

Short-term borrowings

2.00

8.70

12.30

11.05

6.70

Fiscalperiod
24/4期
2024/4Long-term borrowings

12.30

9.05

17.10

14.10

The commitment line
agreement
Total 9.0 bn yen

1.00

2.00

13.50

12.20

15.20

17.10

7.85
6.80
7.85

Fiscalperiod25/4期
2025/4

Corporate bonds

14.20

2.00

2.00
10.80

16.20

15.50

21.60

2.00

4.90

13.20

Fiscalperiod22/4期
2022/4

1.11

1.11

Fiscalperiod
26/4期
2026/4

Fiscalperiod
27/4期
2027/4

Average interest rate (excl. short-term borrowings)(%)

Fiscalperiod28/4期
2028/4

6.80

Fiscalperiod29/10期
2029/10

5.00
1.00
4.00

3.90
3.90

Fiscalperiod30/10期
2030/10Note 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 theaverage borrowing period rounded to the first decimal place)
Note 2: 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 thesum 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)21

Financial status
Issue status of investment corporation bonds as ofthe end of November 2021 (total 13.0 bn yen)

Status of debt financing as of the end of November 2021
Classification

Percentage

Balance

Short-Term Borrowings

7,700 mn yen

3.9%Long-Term Borrowings

178,050 mn yen

89.6%

185,750 mn yen

93.5%

13,000 mn yen

6.5%

198,750 mn yen

100.0%

Total borrowings
Investment
Corporation Bonds
Total Borrowings andInvestment Corporation Bonds

Ratio of fixed interest rate

96.1%

Fixing through use of interest
rate swaps

Status of credit rating

AA-(positive)

Japan Credit Rating Agency, Ltd. (JCR)

Outstanding borrowings by financial institutions
as of the end of November 2021

8.5%
2.5%
4.8%

Total
borrowings
from financial
institutions
185.7 bn yen

6.1%
10.2%

23.4%

18.7%

11.3%

The end of
the fiscal period
2021/4

43,400 mn yen
34,800 mn yen
27,050 mn yen
21,050 mn yen
18,900 mn yen
11,250 mn yen
8,900 mn yen
4,600 mn yen
The Bank of Fukuoka
2,000 mn yen
The Norinchukin Bank
1,800 mn yen
The Nishi-Nippon City Bank
1,700 mn yen
Sumitomo Life Insurance
1,500 mn yen
Company
The Hiroshima Bank
The 77 BankNew Shinsei Bank, Limited
New The Dai-ichi Life

Financial institutions

16■ Sumitomo Mitsui Banking■ MUFG Bank
■ Development Bank of Japan■ Mizuho Bank
■ Sumitomo Mitsui Trust Bank
■ Resona Bank
■ Aozora Bank
■ Mizuho Trust & Banking

New The Musashino Bank, Ltd.

14.6%

24

The end of
Nov. 2021

8 new institutions participated throughsyndicated loans at the end of November, etc.
to expand the funding base

Corporate bonds

Insurance Company,
LimitedThe Higashi-Nippon Bank,
Limited
San ju San Bank,Ltd.

New Daishi Hokuetsu

Bank, Ltd.

New The Chugoku Bank, Ltd.
New The Yamaguchi Bank,Ltd

New Daiwa Next Bank, Ltd.
New The Shizuoka Bank, Ltd.

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

23.4%
18.7%
14.6%
11.3%
10.2%
6.1%
4.8%
2.5%
1.1%
1.0%
0.9%
0.8%
0.5%
0.5%
0.5%
0.5%
0.5%

Issued period Issued amount Interest rate

6th bonds

2014/77th bonds
8th bonds

Term

2.0 bn yen

1.18%

10 years

2016/4

1.0 bn yen

0.90%

12 years

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

13th bonds

2021/7

2.0 bn yen

0.18%

5 years

Outline of the committed line agreement (total 9.0 bn yen)Counterparty

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

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

Maximum amount

6.0 bn yen

3.0 bn yen

Contract typeSyndication-type

Bilateral-type

Valid period

May 1, 2021 to April 30, 2022

Use of proceeds

Acquisition of assets, Repayment of the existing borrowings andredemption of investment corporation bonds

Outline of a line of credit loan master agreement (uncommitted)• A line of credit loan master agreement (uncommitted) with maximum amount 5.0 bn yen
was entered into dated November 26, 2021. Executed 2.8 bn yen dated November, 30

800 mn yen

0.4%Counterparty

Mizuho Bank, Ltd.

500 mn yen
500 mn yen

0.3%
0.3%

Maximum amount

5.0 bn yen (Executed 2.8 bn yen out of it)

500 mn yen
500 mn yen

0.3%
0.3%

Interest rate

Base rate (JPY TIBOR for 1 month) +0.20%

500 mn yen
500 mn yen

0.3%
0.3%

Contract period

From November 30, 2021 to November 30, 2022

PurposeAcquisition of assets, Repayment of the existing borrowings and redemptionof investment corporation bonds

22Section 5

Initiatives for sustainability

23

Initiatives for sustainability~ Establishment and strengthening of the promotion system
Established the Sustainability Committee

Expressed support for TCFD and joined TCFD consortium• Establishment and enhancement of a system to promote• The Asset Management Company expressed support for the

initiatives related to sustainability, ESG, etc., which are becoming
increasingly important due to the organizational change of theAsset Management Company on November 1, 2021
• The Sustainability Committee was newly established as anadvisory body on matters related to sustainability and ESG, andthe Sustainability Office was newly established as a specialized
department in charge of ESG and sustainability-relat​ed​

recommendations of the Task Force on Climate-related Financial
Disclosures (“TCFD”) and also joined the TCFD consortium, a groupof domestic companies that support TCFD recommendations in
October 2021
• Worked with the Sustainability Office to disclose qualitative
information on "Governance," "Strategy," "Risk Management," "Index
and Targets" during the fiscal period ending April 2022

operations• Gathers, analyzes, and examines theSustainability
Committee

information on sustainability and ESGrelated matters• The committee meets in principle, every 3months, and the content is also reported

Chairperson
President & CEO

Sustainability
Officeto the Asset Management Company’s
Board of Directors and to KDO’s Board of

TCFD（Task Force on Climate-related Financial Disclosures）
TCFD is an international initiative established by the Financial
Stability Board (“FSB”) at the request of the G20 for the purposeof discussing the disclosures of climate-related financial
information and the responses by financial institutions

Directors with independent supervisory

TCFD publishes recommendations for companies to disclose theirdirectors depending on the content“governance”, “strategy”, “risk management”, and “metrics and• Promoting ESG through practicaltargets” for climate-related risk and opportunities

sustainability-relat​ed​ operations• Also serves as the secretariat for the
Sustainability Committee
24Initiatives for sustainability~ Environmental certification and evaluation
GRESB Real Estate Assessment• First J-REIT to participate in the 2011 survey• Acquired "Green Star" rating for 10
consecutive years and the 2nd-highest-rated“4 Stars” in GRESB Rating as a result of ourefforts for improving sustainability

Acquisition Status of Environmental Certification(as of December 14, 2021)
DBJ Green Building Certification• The cerfications in 2 properties, the KDX Fuchu Building and the KDX
Yokohama Building, were improved respectively by converting lighting into
LEDs and other renovations(KDX Fuchu Building ★ → ★★ / KDX Yokohama Building ★★ → ★★★)

Acquired the highest “A” Level for

Total (properties)

25

★★★★★

Acquisition of environmental certification(as of December 14, 2021) (Note)

1

★★★★

3

★★★

8

• The status of properties acquired through DBJ Green Building

★★

11

★

2

Public Disclosure on ESG

Certification, Certification for CASBEE for Real Estate and
BELS Certification is as follows
Number of properties
acquired certifications

Percentage of the portfolio(Gross floor area basis)

45 properties(+3 properties
period over period)

60.9%(+3.8% period over period)

The initial target which acquires the certification at more than 50% of
the portfolio (on a gross floor area basis) has been accomplished

New Target
Aiming to acquire morethan 70% in the future

Note: If a single building has obtained multiple environmental certifications or evaluations, it iscounted as one property. The total floor area ratio is calculated by dividing the total floorarea of the entire portfolio by the name of acquired properties.

Certification for CASBEE for Real Estate• Acquired A-rank ratings for Higashi-Kayabacho Yuraku Building, KDX
Shiba-Daimon Building, and KDX Hakata-Minami Building in
December 2021
Total (properties)

24

Rank S

10

Tank A

14

BELS Certification• Newly acquired 4 stars for KDX Ochanomizu Building in December 2021
Total (properties)

5

★★★★

1

★★★

3

★★

1

25

Initiatives for sustainability ~ Initiatives for environment (1)Greenhouse gas (GHG) emissions (Note 1)

Switching to electricity from renewable energy sources• GHG emissions reduced by 15.6% and intensity reduced by

Initiatives at Nihonbashi Horidomecho First

21.3% in 2020 compared to 2015

• From November 1, 2021, switch to renewableenergy-derived electricity (certified as Non-

• Establishment of a GHG emission reduction target

Fossil Fuel Energy with Tracking Information)

Aiming to establish a medium-to long-term reduction target for• Power costs reduced by 7.5% compared to the

GHG emissions by April 2022

previous contract

GHG emissions

GHG Emissions-15.6％

80,0000.006809
60,00050,511Compared to 2015

0.006337
47,5540.005851

44,5290.005765
44,358Intensity-21.3％

Compared to 2015

0.005854
46,139• Reduce GHG emissions (Note 2) by 251 t-CO2
0.00800

Initiatives at the other 12 properties
0.005361

0.00600

derived electricity (certified as Non-Fossil Fuel Energy with

42,6310.00400

40,000• 12 other properties scheduled to switch to renewable energyTracking Information) by April 2022
• GHG emissions (Note 2) are expected to be reduced by 6,568
t-CO2 from the previous year

20,0000.00200

0
2015年
2015

2016年
2016

2017年
2017

GHG排出量（ｔ-CO2）
GHG
Emission (t-CO2)

2018年
2018

2019年
2019

2020年
2020

0.00000 Aiming to switch electricity consumed at each property to renewable

原単位（ｔ-CO2/㎡）
Intensity(t-CO2/m2)

Note1: The calculation period is from April of each year to March of the following year, covering theproperties owned by KDO that have the authority to manage energy. GHG emissions are calculatedusing the emission factors (emission factors by electric power supplier (basic emission factors)) in the
Ministry of the Environment's "Greenhouse Gas Emission Calculation, Reporting, and Publication
System". The intensity is calculated by dividing each year's consumption and emissions by the total
operating floor area for the year.

energy sources while reducing cost
Note 2: GHG emissions are estimated by the Asset Management Company using emission factors by electricutilities (scale emission factors) in the Ministry of the Environment's "Greenhouse Gas Emissions
Calculation, Reporting, and Publication Scheme."

26

Initiatives for sustainability ~ Initiatives for environment (2)Promote the installation of LED lightings

Initiatives for Green Finance• Switch to LED lighting for common areas has been almost• Established the Green Bond Framework in January 2019 and received

completed, and promote installation of LED lightning in tenant areas

the highest "Green 1 (F)" rating from Japan Credit Rating Agency, Ltd.

• In the fiscal period ended October 31, 2021, 20 properties were

• To date, Green Bonds have been issued in February 2019 andreplaced with LED lightning in tenant areas, and the reduction of

October 2020

annual power consumption in installed areas by 62% is expected• In the fiscal period ending April 2022, plan to formulate a green finance• Continue to actively promote the installation of LED lighting in tenant

framework compatible with green loans and other green financing otherareas to further reduce power consumption

than green bonds

Status of LED lighting introduction in the portfolio(as of the end of fiscal period 2021/10)

Issuance status of Green Bonds(as of the end of fiscal period 2021/10)

The ratio ofconverting lighting incommon area

The ratio ofconverting lighting in
tenant area

93.4%

32.2%

(Leasable area basis)

Annualenergy consumption (kWh/year)
年間消費電力量（ｋＷｈ/…

更新後
After

795,193

305,542*Estimation of electricity consumption
after installation of LEDs

179.9 bn yen

Balanceof green bonds＞(Leasable area basis)

Reduction in electricity consumption through theshift to LED (replaced in fiscal period 2021/10)

更新前
BeforeIssuable amountof green bonds (Note)▲489,651kWh/year
67% reduction is expected

3.0 bn yen

Name

Issue
date

Issue
amountInterest
rate

Redemption
periodTenth Series
Unsecured
Investment
Corporation Bonds

February2019

2.0 bn yen

0.39%

5 years

Twelfth Series
Unsecured
Investment
Corporation Bonds

October2020

1.0 bn yen

0.61%

10 years

Note: The balance of green bonds does not exceed the Issuable amount of green bonds as of the end of fiscal
period 2021/10.

27

Initiatives for sustainability ~ Contribution to society
Introduced ESG-service "EaSyGo" (Easygo)

Contribution to communities• Introduced ESG-service "EaSyGo" (Easygo) for tenants at KDX-

Supporting the activities of the United Nations UNHCR Association

Toyosu Grance Square• Continued support for the activities of the United Nations UNHCR• Aiming to build a cooperative system with tenants and their

Association by providing the United Nations Campaign to support refugees

employees that are indispensable for promoting ESG throughand broadcasting PR videos using digital signage

contents such as energy consumption by tenants and ESG• In 2021, free of charge, the campaign locations were provided at the

information for tenant employees

following properties

What is EaSyGo?

Property Name

A service that provides tenants with visualization and reduction
opportunities for CO2 emissions, quantification and improvement ofESG, visualization of social positive impacts, and specific measures,
options and incentives, thereby increasing real estate value through

KDX Nagoya Ekimae Building

October 2021

KDX Sakura-dori Building

November 2021

Senri Life Science Center Building

November 2021

KDX Karasuma Building

April and
October 2021

changes in stakeholder behavior toward ESG
Specific Initiatives at KDX Toyosu Grand Square•

Conducted quizzes within the portal site toraise awareness of disaster prevention andawareness of the portal site by providing
incentives for correct answers•

Disclose the entire amount of waste and CO2
emission and the reduction rate compared toCommunity ESG Portal Site

the previous year, and encourage cooperation
to reduce waste and CO2 emissions•

ESG-related information is to be provided

PeriodEstablishment of sharing ports for bicycles, electric kickboards, etc.
• In addition to providing sites for bicycle
sharing services, started offering sites for new
electric kickboards' sharing ports• Provide tenant employees and local residents
with a variety of environmentally conscioustransportation methods and contribute toenhancing conveniencethrough in-building signage in the future28

Initiatives for sustainability ~ GovernanceDecision-making process with transparency
and check-and-balance system

Changes to the asset management fee structure• The Asset Management Company creates management guidelines of
KDO, and sets forth basic investment management guidelines, including
investment policy, related party transaction rules, distribution policy anddisclosure policy, regarding the asset management of KDO• Furthermore, the Asset Management Company makes decision of• Scheduled to submit a proposal for changes in the asset management fee
structure to the General Meeting of Unitholders on January 28, 2022
• It aims to raise distributions through external growth and strengthen thealignment of interests with unitholders‘ profits by realizing unrealized gains
through the sale of properties
Acquisition Fee

management guidelines and related party transaction rules• The decision-making flow for establishing and revising the management
guidelines and asset management plans, etc. and that pertaining toacquisition and sale of assets are established in principle as follows
Preparation of
proposalConfirmationof proposal
Deliberation
and resolution
Deliberation
and resolution
Deliberation
and resolution

Office REIT Department

After thechanges(Note 1)

Current

property acquisition, according to investment policy set forth in the

Temporary
remuneration
associated withacquisitions anddispositions

Disapprovedor remand

Acquisition price× 0.5%(0.25% for acquisition
from related parties)

Disposition Fee
Disposition value
× 0.5%
at a maximum

Compliance Officer

Raise
distributions
throughexternal
growthStrengthen
linkage withunitholders'profits

Acquisition Fee

Acquisition
price × 1.0%
Disposition Fee
Abolition

However, only if gainon sale (Note 2) occurs,
gain on Sale × 10.0%

Asset Management Fee I

Compliance Committee
Outside member
Asset Management Committeeof Office REIT Department
Outside member

KDO Board of Directors

Supervisory Director
Licensed Real Estate Appraiser/
Lawyer / Certified public accountant

Total assets × 0.13%
Periodiccompensation
linked to asset
size andearnings(distributions)

Asset Management Fee II

Distribution perunit × 23,000

No Change

Asset Management Fee III
Increase in distribution
per unit ✕Number of outstanding
investment units × 10%

Note 1: It is assumed that an approval will be obtained at the Eleventh General Meeting of Unitholders to be held on January 28, 2022.
Note 2: Gain on sale means the amount that calculated by deducting (ii) from (i) below if, during the business period in which the date of disposition of specified assets by KDO occurred, (i) the total disposition value ofthe specified assets disposed of (excluding disposition-related costs) exceeds (ii) the total book value immediately prior to the effective date of the transfer of ownership and other rights of each of the specified
assets that are disposed of.

29Section 6

Future initiatives

30

Future initiatives
External growth・ Focus on asset replacement and finding high-quality acquisition opportunities
・ Use capacity of debt financing and cash on hand for property acquisitions

Internal growth・ Aiming to maintain and improve occupancy rates while closely monitoring trends
in the office leasing market- Using free rent while targeting a market standard of rent
- Respond more flexibly, including for conditions, to properties where have difficulties
for leasing in terms of high rents and areas

Finance・ Continue to reduce interest costs

・ Disclose qualitative information based on TCFD (by April 2022)

Sustainability

・ Establishment of a medium-to long-term reduction target for GHG emissions(by April 2022)
・ Formulation of Green Finance Framework (by April 2022)
・ Continuous efforts (switch to renewable energy-derived electricity, acquisition ofenvironmental certification, promotion of installation of LED, etc.)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

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