Kenedix Realty Investment Corporation
13th Period Results (Ended October 2011)

January 2012
Kenedix REIT Management, Inc.
http://www.kdx-reit.com/eng/

13th period topics and status of actions towards issues
Status of actions towards issues
Focusing on the two issues tomaintain and improve dividends level
Topics of 13th period (2011/10)
Public offering and its effects① Investments in new properties Description of public offering

Public offering

Executed 4th public offering in July 2011 since its listing

Focus on portfolio deal (multiple properties in one deal) amongincreasing property information

・Capital raised: Approx. 14 billion yen (incl. thirdparty allotment)
・Use of proceeds: Acquisition of four officebuildings and repayment of debts⇒14th period property acquired on 2011/12/26
Acquisition price of property (8 properties):
Total of 28.55 billion yen⇒Since the financial crisis, KRI acquired 13
properties for 43 billion yen.
 Effect of lowering Interest-bearing debt ration (LTV)② Enhancement of financial baseDiversified funding methods
Issued Third Series Unsecured Investment Corporation Bonds
in September 2011.
・Amount: 1.5 billion yen⇒Achieved diversification of funding by issuing bonds for the
first time in 4.5 years

Prepared for redemption of investment corporation bond⇒Conlcluded a term loan commitment agreement for the
maximum loan amount of 7 billion yen on Dec. 19, 2011

Reduction of financial costs

At end of 12th period (2011/4): 43.0%
At end of 13th period (2011/10): 40.3%
 As of the payment date of the public offering (July

Collateral release

Exhibit competitive advantage based on the track record ofacquisitions

20, 2011), all interest-bearing debts including theexisting borrowings became non-collateralized.
⇒Secure flexibility and mobility of financial strategy

Achieved after continuous negotiations with financial institutions
12th period (2011/4) borrowing (actual): spread 1.42%
13th period (2011/10)borrowing (actual): spread 1.18% (-0.24%)

The contents 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 see disclaimer in the final page of this documents.

1

SECTION 1

13th Period Results (October 31, 2011)

13th period（2011/10）financial results: Performance highlights
 Acquired four properties (¥14,270 million) by issuing 53,000 new units in July 2011
 Gain on sales of KDX Hirakawacho Building of ¥545 million (of which, ¥303 million was set aside as reserve for reduction entry)
13th period indicators(in millions of yen)

Operating income
Account¥9,044 million（+11.2％）

Provision for reserve for
reduction entry¥ 303 million
Units issued
286,550 units（+22.7％）
Distribution per unit
¥ 9,596（-3.0％）( ) is comparison
with 12th period

13th period

Changes

Changes

C-A(2011/4)(2011/10)(2011/10)

ActualForecast (※）

Actual(Actual vsForecast)(12th vs 13th)

12th vs 13th Comparison Ｃ-Ａ
Major factors

8,964

9,044 a80 ①

907

① Acquisition of 4 properties (318M)，Gain from sales of RE properties (545M)

-

535

545

10 ②

545

② Gains from sales of KDX Hirakawacho Building

4,427

4,750

4,618

-132

191

Expenses related to rent business (excl.
depreciation)

2,360

2,630

2,518 b-112 ③158③ Increase in fixed property taxes of properties acquired in 11th and 12th period

Depreciation

1,406

1,448

1,442

-6 ④

36

④ Acquisition of 4 properties (50M)

659

670

657

-13

-2

3,709

4,214

4,425

211

715

3

5

5

-

2

Non-operating expenses

1,366

1,419

1,390

-29

24

Interest expenses etc.

1,352

1,360

1,334 c

-26 ⑤

-17

⑤ Cost reduction such as interest expenses

14

59

56

-3 ⑥

41

⑥ Amortization of new units issuance cost

2,346

2,799

3,040

X/O gains/ Extraordinary gains
losses Extraordinary losses

26

-

61

-

Net income

2,309

2,798

3,052

254

742

Leasing NOI (Net Operating Income)

5,776

5,798

5,980

182

204

FFO (Funds From Operation)

3,716

3,711

3,950

239

234

-

130

303

173

303

Operating income/loss

Ordinary income/loss

Of which gain on sales of real estate
properties

Operating expenses

Other

Operating income
Non-operating
income/loss¥ 3,052 million（+32.2％）C

13th period

Operating revenues¥ 545 million
Leasing NOI

Net incomeB

12th period

8,136Gain on sales of realestate properties¥ 5,980 million（＋3.5％）A

C-B

Non-operating income

Other

Ordinary income

Provision for reserve for reduction entry
Number of units issued

694

13

13 ⑦

-12

⑦ 12th period: Subsidy income (26M), 13th period: Gain from donation of fixed assets (13M)

-

- ⑧

-61

⑧ 12th period: Loss on reduction of noncurrent assets (26M), Provision for loss on disaster

233,550units 286,550units 286,550units

Distribution per unit

9,891yen

9,300yen

9,596yen

0units ⑩

53,000units

296yen(35M)⑩ Increase due to new issuance in July

-295yen※Forecast as of July 5, 2011

Provision for reserve for reduction entry
Reserve for reduction entry was accumulated related
to the capital gains from the sale of KDX Hirakawacho
Building (¥545 million) sold as of June 30, 2011 to theextent it meets the conduit requirements stipulated in
Article 67-15 of the Special Taxation Measures Law(more than 90% of distributable profit)

241

Factors of changes from 12th peiord
Account
Changesabc

13th period Actual v s Forecast C-B Major f actors

80 Cancellation penalty (+50), Restoration income (+20)-112 Repair (-41), Agent commissions etc (-21), Building maintenance f ees etc (-18)-26 Lower than expected interest rate or costs① Operating revenues② Gains on sale of RE properties③ Expenses related to rent business④ Depreciation
Difference＊Leasing NOI = Rental revenues–Rental expenses＋Depreciation expense for the period＊ FFO (Funds From Operation) = Net income＋Depreciation expense for the period-Gain on sales of real estate properties+Loss on
sales of real estate properties
The contents 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 see disclaimer in the final page of this documents.

New
Sold
acquisition during 13th
157
318
-114

Owned

Total
907

-

-

545

120

58

-20

2

50

-16

36

35

210

467

715

158

3

14th period （2012/4）: Earnings forecast Acquired 8 properties (¥28.55 billion) with a new borrowing of ¥29 billion(in millions of yen)

Operating income/loss

Operating revenues
Of w hich gain on sales of real estate properties

Operating expenses

B

B-A

13th period

14th period

Variance(2011/10)(2012/4)

ActualForecast （12/19）

Componetns of v ariance(excluding the ef f ect of gain on sales in 13th period)
Owned prior to
12th period

9,044

9,033 ①

-11

545

-

-545

4,618

4,935

317

Expenses related to rent business (excl. depreciation)

2,518

2,650 ②131

Depreciation

1,442

1,563 ③

121

Other

Operating income
Non-operating
income/loss

Ordinary income/loss

AccountA

Non-operating income

657

721

64

4,425

4,098

-327

Acquired/soldduring 13th
periodTo acquire in
14th period

Total

①

(Note)
-406

132

808

535

②

-40

21

148

131

-366

111

660

404

NOI

Note: Of which, decrease in operating rev enues of KDX Harumi Bldg is 180 million y en.

5

5

-

Non-operating expenses

1,390

1,577

187

Interest expenses etc.

1,334

1,539 ④

205

56

37

-19

3,040

2,525

-515

13

-

-13

-

-

-

3,052

2,524

-528

Leasing NOI (Net Operating Income)

5,980

6,383

403

FFO (Funds From Operation)
Number of properties

3,950

4,088

138

74

82

8

Provision for/reversal of reserve for reduction entry

303

(143)

-446

Provision

65

-

303

-

286,550units

286,550units

0units

Reversal

-

-

-

143

9,596yen

9,300yen-296yen

Balance

65

65

368

225

Other

Ordinary income
X/O gains/ Extraordinary gains
lossesExtraordinary losses

Net income

Number of units issued
Distribution per unit③

Increase in depreciation of 98 million yen due to new acquisition in 14th period④

Increase in finance cost due to a new borrow ing of 29 billion yen for property acquisition【Changes in reserve for reduction entry】
11th period

12th period

13th period

14th period (f orecast)[Reference]
Expected fixed property taxes for 14th period: ¥ 692 million
Expected fixed property taxes for 15th period: ¥ 881 million

Note: Above figures are projected under certain assumptions at this time, and actual net profit and distribution may differ from those projections
due to changes in circumstances. Also, this projection is not intended to imply that the projected amount will be paid.
The contents 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 see disclaimer in the final page of this documents.

4

SECTION 2

External growth strategy

Properties acquired during 14th period (2012/4)
Acquisition of portfolio deal (multiple properties in one deal): Dec. 26, 2011
Total of Acquisition Price 28.55 billion yen

Ta chi k a wa
Ek i ma e
B ui l di ng

N a g oy a Ek i ma e
Sa k ura -dori
B ui l di ng

2,016.03㎡
October-2001

Tachikawa-shi,Tokyo2,896.48㎡
February-1990

Nakamura-ku,
Nagoya13,380.30㎡
April-1986\1.65B\1.28B\1.26B\13.5B\1.7B\1.54B-16.5%
Third party-2.8%
Third party-16.9%
Third party

Not discloased

Not disclosed

Not disclosed

\643M

\102M

5.7%

6.2%

Property
N a meKa butocho
N i k k o B ui l di ng

Lo c at io n

Chuo-ku, Tokyo

GFA

11,705.49㎡
November-1998

Toshima-ku,
Tokyo
3,223.75㎡
March-1986\11.27B

Ye ar bu ilt
Ac qu isit io n P r ic e
(A)Appr aisal valu e att h e t ime o f
ac qu isit io n (B)Diffe r e n c e (A9 - (B)S e lle r
Ac t u al NO I (No t e 1 )Ac t u al NO I /Ac qu isit io n P r ic e
Appr aisal NO I
(No t e 1 )Apr r aisal NO I /Ac qu isit io n P r ic e

Ik ebuk uro
N i k k o B ui l di ng

Ka butocho
N i k k o B ui l di ngII

N a g oy a N i k k o
Shok en
B ui l di ng

Senda i N i k k o
B ui l di ng

Ka na za wa
N i k k o B ui l di ng

Tota l of 8
properti es

14,308.76㎡
August-1974

3,598.01㎡
March-1989

Minamicho,
Sendai
4,497.22㎡
March-1989\7.32B\4.15B\0.95B\0.64B\28.55B\1.34B\7.73B\4.2B\1.01B\1.07B\32.09B-5.4%
Third party-5.2%
Third party-1.0%
Third party-5.9%
Third party-39.7%
Third party-11.0%
-

\87M

\407M

\264M

\55M

6.9%

5.6%

6.4%

5.9%

\80M

\85M

\436M

\254M

\69M

\83M

\1,755M

6.3%

6.8%

6.0%

6.1%

7.3%

13.0%

6.1%

Chuo-ku, Tokyo

Naka-ku, Nagoya Aoba-ku, Sendai

Not disclosed

55,626.04㎡-\1,635M
5.7%

Note 1:

Actual NOI (Annual) are based on property operating revenue and expenses (including property tax) which are based on contracts with existing tenants at the acquisition date.
Appraisal NOI are the net operating income (annual) for the direct capitalization method used in real estate appraisal report at the time of acquisition for each property.
Note 2: Values are rounded down to the first decimal place. Ratios are rounded to the first decimal place.
Note 3: Acutal NOI and Actual NOI / Acquisition price are not disclosed with property that have 1 or 2 tenants.

6
The contents 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 see disclaimer in the final page of this documents.

Details of properties acquired during the 14th period (2012/4)
 Acquired portfolio deal (multiple properties in one deal)
Total acquisition price of 8 properties: 28.55 billion yen(Tokyo Metropolitan Area 15.47billion yen, Other Regional Areas 13.08 billion yen)
Kabutocho Nikko Building

Nagoya Ekimae Sakura-dori Building

Location:Chuo-ku, Tokyo

Location: Nakamura-ku, Nagoya

GFA: 11,705.49 ㎡

GFA: 13,380.30 ㎡

Year built: Nov. 1998

Year built: Apr. 1986

Acquisition price: ¥11,270M

Acquisition price: ¥7,327M

Architect:

Architect:

MITSUBISHI ESTATE CO, LTD.

MITSUBISHI ESTATE CO, LTD.

Construction company: TODA

Construction company:

CORPORATION others

TAKANAKA CORPORATION others

PML: 4.23％

PML: 12.13％

Occupancy: 100% (Tenants: 1)

Occupancy: 91.9% (Tenants: 17)(As of Oct. 31, 2011)(As of Oct. 31, 2011)

 2-minute waｌｋ from “Kayabacho Station” on Tokyo Metro Hibiya and Tozai Lines, andwalking distance from “Nihonbashi Station” on Tokyo Metro and Toei Subway
Asakusa Lines

 Convenient access located at 2-minute walk from “Nagoya Station” on various JR
Lines.

 Facing the Tokyo Stock Exchange across the street to the north Features notably high visibility located close to the traffic circle on the Sakura-dori
Exit side and stands on a corner facing Sakura-dori Typical floor has a leasable area of approx. 929㎡（approx. 281 tsubo）

 Typical floor has a leasable area of approx. 542㎡（approx. 164 tsubo）

7
The contents 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 see disclaimer in the final page of this documents.

Details of properties acquired during the 14th period (2012/4)
Ikebukuro Nikko Building

Nagoya Nikko Shoken Building

Location: Toshima-ku, Tokyo

Location: Naka-ku, Nagoya

GFA: 3,223.75 ㎡

GFA: 14,308.76 ㎡

Year built: Mar. 1986

Year built: Aug. 1974

Acquisition price:¥1,653M

Acquisition price: ¥4,158M

Architect: MITSUBISHI ESTATE CO, LTD.

Architect:MITSUBISHI ESTATE CO, LTD

Construction company:

Construction company:

TAKENAKA CORPORATION

Konoike Construction Co, Ltd.

PML: 8.67％

PML: 14.36％

Occupany: 100% (Tenants: 2)

Occupany: 93.4% (Tenants: 10)

Closest station: Ikebukuro (4-minute walk)

Closest station: Sakae (4-minute walk)

Kabutocho Nikko Building II

Sendai Nikko Building

Location: Chuo-ku, Tokyo

Location: Aoba-ku, Sendai

GFA: 2,016.03 ㎡

GFA: 3,598.01 ㎡

Year built: Oct. 2001

Year built: Mar. 1989

Acquisition price:¥1,280M

Acquisition price: ¥950M

Architect: Kajima Corporation

Architect:MITSUBISHI ESTATE CO, LTD.

Construction company:

Construction company:

Kajima Corporation

Kajima Corporation

PML: 6.15％

PML: 3.48％

Occupany: 100%(Tenants: 4)

Occupancy: 75.4% (Tenamts: 4)

Closest station: Kayabacho (2-minute walk)

Closest station: Aoba-dori (1-minute walk)Tachikawa Ekimae Building

Kanazawa Nikko Building

Location: Tachikawa-shi, Tokyo

Location: Minamicho, Kanazawa

GFA: 2,896.48 ㎡

GFA: 4,497.22 ㎡

Year built: Feb. 1990

Year built: Mar. 1989

Acquisition price: ¥1,267M

Acquisition price: ¥645M

Architect: MITSUBISHI ESTATE CO, LTD.

Architect: TAKENAKA CORPORATION

Construction company:

Construction company:

Kajima Corporation others

TAKENAKA CORPORATION

PML: 3.34％

PML: 2.61％

Occupany: 100.0% (Tenants: 5)

Occupancy: 100.0% (Tenants: 2)

Closest station: Tachikawa (2-minute walk)Usage: Offices, Hotel

The contents 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 see disclaimer in the final page of this documents.

8

History of portfolio growth and its results
History of portfolio growth since November 2009
Summary of portfolio growth (Note 1)

3,000

2,840

Owned at Oct
31, 2009

Asset size(¥100 mil)
資産規模（億円）

2,800

2,600

82棟

2,400

2,200

9th
第9期
period09/10期(09/10)10th
第10期
period
10/4期(10/4)

11th
第11期
period
10/10期(10/10)（2010/4）

12th
第12期
period
11/4期(11/4)

13th
第13期
2011年12月
Dec 2011
period
11/10期(11/10)（2011/4）

Increase(%)

New
acquisition
since
2009/11(Excl. properties
already sold)(Expected)

Total numberof tenants

795

957

+20％

162

Number ofproperties

62

82

+32％

20

Leasable area

248,779㎡

335,705㎡+35％

86,926㎡

Annual NOI(NOI yield)¥9.86 billion（4.6％）¥13.83 billion（4.9％）+40％

Approx.
¥4 billion（5.6％）(Note 2)2,000

Owned at Dec
31, 2011

Note 1: Figures related to KDX Shin-Yokohama 381 Building Annex Tower (acquired in 10th period) are
included in A47KDX Shin-Yokohama Building (acquired in 6th period).
Note 2: Annual NOI is calculated based on Actual figures of 13th period (2011/10) and current NOI of
properties to be acquired in December 2011.
Property tax and urban planning tax of properties acquired in 12th and 13th periods are expensed.

（2011/10）(Acquired in 2011/12)

The contents 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 see disclaimer in the final page of this documents.

9

SECTION 3

Portfolio management strategy

Management of existing properties:
Tenant turnover and occupancy (office)

L:¥Sectors¥RealEstate¥Team¥Property¥_Information Share¥_Companies¥KRI¥IR¥201112IR（第13期）¥英訳¥20111209受領分¥2nd¥第13期決算説明会2_E.ppt

Annualized turnover ratios for office tenants (actual and forecast)

13%

11.7%

12%

10.9%
11%

①

10.0%

9.9%

10%

9.0%
9%

1 tenant who
moved out in KDX
Harumi Building①About 2.0%
②About1.3 %

②

8.4%

8.3%

11th period(2010/10)

12th period(2011/4)

8%

7.0%

7%
6%

7th period(2008/10)

8th period（2009/4）

9th period(2009/10)

10th period（2010/4）

13th period(2011/10)

14th period
Forecast(2012/4)

Note：The ratio is calculated and annualized as follows: total leasable area of the tenants who cancelled the lease agreement during the six-month period from the beginning to end of each period) / (Average leasablearea of all office buildings owned by KRI as of each month-end during the relevant period) x 2. 14th period (2012/4）forecast is based on prior cancellation notices received in 13th period (2011/10)In addition,
the properties acquired on Dec. 26, 2011 is not included.

Changes in occupancy ratios for office tenants (by area)
Average monthly occupancy ratios in the last 3 years（from 8th period to 13th period）

Total officebuilding

93.8％

Tokyo
Metropolitan
Area

95.3％

Other Regional
Areas

89.1％

As of Oct. 31, 2011
95.7%
（Tokyo Metropolitan
Area）
94.3％
（Total office building）

98%
96%
94%
92%
90%
88%
86%
84%
82%
80%
2008/1190.2%（Other Regional
Areas）
Reference：
Total portfolio
94.7%

2009/5

2009/112010/5

2010/112011/5※The impact of the move-out of 1 tenant of KDX Harumi Building will be reflected for the occupancy ratios as of the end of Nov. and Dec. 2011

The contents 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 see disclaimer in the final page of this documents.

11

Management of existing properties:
Tenant turnover for office tenants
Trend of tenant turnover Result of move-in: Stable results for move-ins. 96.2% of the move-in tenants occupied less than 200 tsubo each.
 Result of move-out：Slightly increased from the previous period. 93.2％ of the move-out tenants had occupied
less than 200 tsubo each.
 Most of the tenant move-ins and move-outs are for the leased floor areas of less than 200 tsubo.
Move in during 13th period（53 tenants）（# of tenants）

80

7th

Move in
8th

9th

Move out
10th

11th

12th

13th

100 - 200
tsubo
15.1%

60
40
20

More than
200 tsubo
3.8%

49

51

-44

-47

66

64

-58

-58

48

57

-49

-45

Less than
100 tsubo
81.1%

53

0
-20

Move out during 13th period（59 tenants）

-59

-40
-60

More than
200 tsubo
6.8%
100 - 200
tsubo
22.0%

-80
7th period
8th period
9th period
10th period
11th period
12th period
13th period（08/05～08/10）（08/11～09/04）（09/05～09/10）（09/11～10/04）（10/05～10/10）（10/11～11/4） （11/5～11/10）

Less than
100 tsubo71.2%

Note： Based on number of floors. If one tenant leases more than one floor, each floor is counted as one

The contents 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 see disclaimer in the final page of this documents.

12

Management of existing properties:
Trends in new tenants and office rents for new tenants
Rents for new tenants% change in rents between new & existing tenants and # of contracts
8th
9th
period period
2009/4 2009/10

CentralTokyo(5 wards)

10th
11th
periodperiod2010/4 2010/10

12th
period2011/413th
period2011/10

8th period 9th period
2009/4 2009/10

10th
period2010/411th
period2010/1012th
period2011/413th
period2011/10

Changes

0.0%-19.3%-22.8%-19.0%-20.9%-24.4%

Expansion

19

26

40

36

31

34

Increasein rent

8

0

0

0

1

0

Scale down

12

17

14

6

18

9

Decreasein rent

9

17

16

18

16

20

Other
/unknown

2

12

3

4

5

4

Changes

-1.8%

-8.4%

-15.5%-20.0%-18.6%-19.6%

4

3

1

0

0

0

Other Tokyo Increase
Metropolitan in rent
Area
Decreasein rent

Other
Regional
Areas(Reference) Reasons for moving in office buildings(Reference) Changes in reasons for moving out of office buildings
6

15

11

6

17

6

Changes-7.7%-16.4%-15.0%-16.6%-14.0%-14.5%

Increasein rent

4

2

6

1

1

0

Decreasein rent

7

11

18

13

10

16

Changes-2.7%-14.4%-17.5%-18.3%-18.3%-19.9%

Total Office Increase
in rent
Buildings
Decreasein rent

Note: Surveyed mainly on office floors on the 2nd floor or higher

16

5

7

1

2

0

22

43

45

37

43

42

8th
9th
10th
11th
12th
13th
period period period period period period
2009/4 2009/10 2010/4 2010/10 2011/4 2011/10

14th
period2012/4(Forecast)

Expansion

4

2

4

9

7

9

7

Scale
down

33

44

47

31

30

40

31

Other
/unknown

6

6

4

5

7

6

6

Note: Residential floors are excluded from the survey

Notes：Ratios represent the simple percentage differences in average monthly rents (per tsubo) for
existing tenants and new tenants in the respective buildings. The analysis excludes thosebuildings that were acquired during the relevant fiscal periods and based on floors for offices(above 2nd floor)
The contents 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 see disclaimer in the final page of this documents.

13

Management of existing properties:
Change in rent for office building
Rent renewals
Status of rent renewals (% change, # of contracts)

Changes

8th Period(2009/4)

9th Period(2009/10)

-2.7%

-5.7%

13th period (2011/10): rent renewal trends for existing tenants

10th Period 11th Period 12th Period 13th Period(2010/4)(2010/10)(2011/4)(2011/10)-9.0%-10.8%-13.8%

Increase in rent

12

6

4

6

5

14

30

63

55

47.6%

4

60%
Decrease inrent

No change

-4.2%

80%
Increase in
rent

Decrease in rent

100%

33

77.9%

66.4%

57.9%
74.1%

72.5%

24.0%

24.8%

30

40%
Note: Percentage change in rents are calculated by dividing the total monthly rents of those tenants who haverenewed their leases with either decrease or increase in rental levels by total monthly rents before therenewal. Those tenants whose rents are unchanged at renewal are excluded

10,39512,000
8,000
4,000

1,840

4,084

20%
0%

<Changes in monthly rent>(thousand yen)

45.8%

9,095
1,685 2,264 1,620 1,133

291

2,464

38.9%

24.0%
14.0%
8.1%

9.6%

6.6%

3.1%

1.9%

2.7%

8th
Period9th
Period10th
Period11th
Period12th
Period13th
PeriodNote: Any renewed contracts, including contracts extended before the expiration date. Ratio
calculation based on leased floor area

Increase in rent
2.7%

0-4,000-8,000-3,528-6,231-7,018-12,000-16,000-20,000-10,836-14,907-19,400-24,000

Not subject torenewal77.4%

Subject torenewal22.6%

Decreasein rent
24.8%
No change
72.5%

4th
5th
6th
7th
8th
9th
10th 11th 12th 13th
Period Period Period Period Period Period Period Period Period Period
Note: The changes in monthly rent are summation of differences before and after the rent renewal and calculated
separately for tenants with rent increase and decrease

The contents 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 see
disclaimer in the final page of this documents.

14

Management of existing properties:
Rent average for office buildings and tenant diversification
Average Rent
Average rent level for office buildings

End tenants of office buildings

End of 10th
period（2010/4）

End of 11th
period(2010/10)

End of 12th
period(2011/4)

End of 13th
period（2011/10）

Central Tokyo
(5 wards)¥19,900¥19,300¥18,900¥18,300-3.4%

Other Tokyo
Metropolitan Area

¥14,300¥14,100¥13,700¥13,500

-1.6%

Tokyo
Metropolitan Area

¥18,000¥17,600¥17,200¥16,700-2.9%（Monthly rent/tsubo)

Changes comparedwith previous
period end

Other Regional
Areas¥10,700¥10,600¥10,500¥10,400-0.6%

Total office buildings¥17,000¥16,600¥16,200¥15,700-2.7%

Note: Average rent level covers offices mainly above 2nd floor of the 62 properties which the Investment Corporation has owned at the end of
10th period excluding KDX Shinjuku-Gyoen Building and KDX Hirakawa-cho Building which were sold in the 11th and 13th period.
Starting from the 11th period, A-47KDX Shin-Yokohama 381 Building is calculated collectively with the KDX Shin-Yokohama 381 Building
Annex Tower (A-65) as 1 property. The average rent level of each property is the value obtained by dividing the sum of the monthly rent(including common area charges) per each property by the total leased area of each property, and is rounded down to 100 yen.

Variety of tenants(As of end of 13th period)
MiningPersonal Use 1 (0.1%)
Construction
31 (4.3%)
35 (4.9%)
Public Sector
Industrial Goods(Others)
90 (12.6%)
2 (0.3%)Service283 (39.6%)

Transportation&C
ommunication
27 (3.8%)

Real estate
24 (3.4%)

Retail, Food &Beverage
178 (24.9%)

Financial
43 (6.0%)

Note: Percentage figures in the above pie charts represent the
proportion of each type of end tenants as a percentage of thetotal (714 tenants)

Tenant distribution in Tokyo Metropolitan Area (end of 13th period)
Rent pertsubo/rentable area

Less than
100 tsubo

100 - 200
tsubo

200 - 300tsubo

300 - 400tsubo

400 - 500
tsubo

¥30,000 - ¥40,000

2

1

1

-

-

¥20,000 - ¥30,000

35

24

8

2

-

500 - 1,000 1,000 - 2,000
tsubo
tsubo

2

# of end tenant(# of properties)

714 Tenants(68 properties)

Share of the Largest Tenant

1.8%

Total Share of the Top 3 Tenants

4.8%

1

¥10,000 - ¥20,000

177

88

26

7

3

6

2

Less than ¥10,000

37

4

2

2

-

-

-

Note: The ratio of top-end tenants within the entire portfolio(based on leased area)
Moreover, the number of end-tenants for our office buildings
including 8 properties acquired on Dec. 26, 2011 was 748, thelargest end tenant was 5.9% and top 3 end tenants were 9.1% as ofthe end of Oct., 31, 2011

Note: Based on rents as stated in lease agreements (including common area charges) for 430 office tenants in Tokyo Metropolitan Area

The contents 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 see
disclaimer in the final page of this documents.

15

Management of existing properties:
Age and satisfaction level of office buildings
Building age and satisfaction level of office buildings Ranking of total satisfaction level and intention to stay: less than 15 year-old＞20 to 25 year-old＞more than 25
year-old＞15 to 20 year-old
 KRI carries out renewal/renovation (value up) based on the maintenance cycle, the engineering report, and theresults of the CS survey.
KRI’s regular maintenance cycle

Age distribution of office buildings owned
by KRI (in number)

5yrs

10yrs

15yrs

Air conditioner
More than
25 Year
21%

Less than
15 year12%

20 to 25 Year
35%

Entrance※Weighted-average age of all 68 officebuildings owned at the end of 13th period

30yrs

35yrs

Renovation

Renovation
Renovation

External wall/ceiling

Renewal95%

Renovation
RenewalRenewalElevator

Average age: 21.6 years

25yrs

Renovation

Toilet15 to 20 Year
32%

20yrs

Renovation

90.7%

90%

Total
85%
satisfaction
80%level by
75%
age
70%

83.0%

81.7%

20-25 yrs

More than 25 years

75.7%

Less than 15 yrs

15-20 yrs

Note: The sum of “Satisfactory” and “Almost satisfactory” out of “Satisfactory”, “Almost satisfactory”, “No opinion”,“Rather unsatisfactory”, “Unsatisfactory.” The ratio of top 2 out of 5-level evaluation.

The contents 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 see disclaimer in the final page of this documents.

16

Management of existing properties:
Energy saving measure during the summer and the results
Actions towards electricity supply shortage in summer 2011 and the results

Large-lot electricity user (over 500kW contracted supply):peak-cut by 30% and usage reduction by 28%
Small-lot electricity user (less than 500kW contracted supply): peak-cut by 23% and usage reduction by 20%
Active energy saving effort by tenants through the usage of air conditioner and lighting at their occupied areas※Reduction ratio is an average of 2 months between July and August 2011. Peak-cut represents the reduction ratio against the volume designated by
the government or contracted supply, and usage reduction is compared to the previous year.

Results of energy saving during the summer

Action by tenants (from 4th CS survey result)(# of response:379)

Large-lot electricity user
（13 properties）

Small-lot electricity user
（48 properties）

0%
-5%
-10%
-15%

Power usage-28%
Peak-cut-30%

Power usage-20%
Peak-cut-23%
Over 80％ tenants changed pre-set temperature of air conditioner-20%

Lighting(Ratio of lights-out or Reduction of light bulbs in occupied areas)(# of response:379)

-25%
-30%
-35%

Successfully reduced 15% electricity use in allproperties classified as a larege users（no property was subject to penalty）

Over 60% tenants reduced light bulbs in occupied areas

The contents 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 see disclaimer in the final page of this documents.

17

SECTION 4

Financial Strategy

Stable financial management:
Conservative LTV and diversification of debt maturity
Changes in LTV

2011/7 All interest-bearing debts became
non-collateralized or non-guaranteed

50%
47.0%

Conservative LTV level

45.6%
45%
41.2%

41.4%

43.0%
41.1%

40.9%

Approx
45％
40.3%

40.9%

2011/9 Issued Third series unsecured
investment corporation bonds(¥1.5 billion)

38.9%
40%
37.5%

38.7%

35%
35.3%
30%
1st period 2nd period 3rd period 4th period 5th period 6th period 7th period 8th period 9th period 10th period 11th period 12th period 13th period
06/4/30
05/10/31
06/10/31
07/4/30
07/10/31
08/4/30
08/10/31
09/4/30
09/10/31
10/4/30
10/10/31
11/4/30
11/10/31

11/12/31
forecast

Note: LTV = Interest-bearing debt at end of period / Total assets

2011/12 Entered into a term loan
commitment agreement for the maximum
loan amount of 7 billion yen to prepare forredemption of First series bondDiversification of debt maturity (As of December 26, 2011)
New finance in 14th period (on Dec 26, 2011)
New finance in 13th period (incl. refinance)
Investment corporation bonds
Borrowing(100 million yen)
250
200

Repayment
40.0

Credit ratings and investment corporationbonds(as of December 19, 2011)

Rating agency

75.0
150

90.0

10.0
15.0

60.0
50

94.4
51.5

0

Japan Credit Rating Agency (JCR)

75.0

Repayment
100 233.0

72.7

87.9

25.0
87.1

65.0

66.1

Rating

40.0
66.4

70.0

45.0

133.0

A

(Stable)

Bonds

Size

Interestrate

1st Bond¥9B

1.74% p.a.

5 yrs

2012/3/15

2nd Bond
3rd Bond¥3B

2.37% p.a. 10 yrs
1.59% p.a. 2 yrs

2017/3/15¥1.5B

Maturity

Maturitydate

2013/9/13

70.0
30.0

30.0

13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th
period period period period period period period period period period period period period period
Note: The chart illustrates total debt amounts that mature in each period (rounded to the first decimal place). The debts that were financed during 13th and 14th periods(including refinanced portions) are indicated in red box.
The contents 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 see disclaimer in the final page of this documents.

19

Stable financial management: Improvement of borrowing terms
Changes in borrowings
8th period(09/4)
and
9th period(09/10)

12th period(2011/4)

13th period(2011/10)

14th period
Borrowed in
2011/12(※)

Average life

1.8 years

3.4 years

2.4 years

3.1 years

Average spread

2.27%

1.42%

1.18%

1.07%

Amount¥25 B¥32.5 B

¥20 B

¥29 B

※ Funding for property acquisition executed in Dec. 26, 2011
 Arranger: Sumitomo Mitsui Banking Corporation
Co-arranger: Development Bank of Japan Total amount: 29 billion yen
 Term:10 months, 2 years 10 months, 3 years 10 months,
and 4 years 10 months

Note: Average life is weighted by borrowing amount (rounded to the first decimal place).
・Average spread is weighted by borrowing amount and by adding annualized upfront fee to the
spread cost for total debt costs (rounded to the second decimal place)・Amount represents the amount borrowed or refinanced during the period. The amounts borrowed
and repaid during the same period (i.e. no outstanding balance at the end of the period) are notincluded.

Fixed-rate debt/balance by maturity（as of October 31, 2011)
Debt balance by maturity

Proportion of floating-rate debt vsfixed-rate debt
Floating rate
\19.2B
17.3%

Long-term
borrow ing andinvestm ent
corporation
bonds\ 86.86B
78.3%

Fixed rate
\ 91.7B
82.7%

Average interest rate *1.76%

Average life

2.3 years

Proportion of L-T debt

90.8%

Short-termborrow ing\10.20B
9.2%
Current portionof long-termborrow ing\13.85B
12.5%*Note: The average interest rate above does notinclude upfront fees (if included, 2.17%).
“Fixed-rate debt” includes borrowings that wereconverted to fixed through interest rate swap.

Note: Borrowing amounts are rounded to the first decimal place.

 Participating financial institutions: 7

Breakdown of lenders (As of December 26, 2011)(in 100 million yen)

As of Oct31, 2009

As of Dec
26, 2011

Sumitomo Mitsui
Banking Corporation

194

294

Development Bankof Japan120

239

Aozora Bank

120

180

Chuo Mitsui Trustand Banking

145

173

Bank of Tokyo
Mitsubishi UFJ

98

163

Mitsubishi UFJ Trustand Banking

72

92

Resona Bank

43

73

Mizuho Trust &Banking－

10

Norinchukin Bank

40

0

Total

852

1,224

Mizuho Trust &Resona Bank Banking
0.8%
6.0%
Mitsubishi UFJ
Trust andBanking 7.5%
Sumitomo Mitsui
Banking
Corporation
Bank of
24.0%
Mitsubishi Tokyo
UFJ 13.3%

Chuo Mitsui Trustand Banking
14.1%

Development
Bank ofJapan
19.5%
Aozora Bank
14.7%

Note: Amounts less than 100 million yen are rounded to the nearest 100 million yen. The total amountat 2009/10/31 include borrowings from Citibank and Mitsui Sumitomo Insurance.

The contents 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 see disclaimer in the final page of this documents.

20Appendix

Portfolio that focuses on office buildings
Portfolio overview(as of December 26, 2011)

Portfolio growth (by acquisition value)(¥B) 4,000# of properties: 82
Total size: ¥284.0B

OfficeCentral urban retailResidential

3,500

¥284B

3,000

Portfolio breakdown by property type
Residential
Central urban 3.3%
retail
4.3%

Stability-emphasized
2,500

Other
0.2%

2,000

Office
92.0%
2,616

1,500

1,000

500

0

2,337

¥69.1B

Office buildings: 75 properties
Total size: ¥261.6B

377

Portfolio breakdown by region (office buildings)

123
189

123
94

End of 1st End of 2nd End of 3rd(2005/10)(2006/4) (2006/10)

End of 4th(2007/4)

End of 5th(2007/10)

End of 6th(2008/4)

End of 7th End of 8th(2008/10) (2009/4)

123
94

End of 9th End of 10th End of 11th End of 12th End of 13thAs of Dec. 26,(2009/10)(2010/4)(2010/10)(2011/4) (2011/10)
2011 (Note)

Note: Acquisition value as of December 26, 2011 includes Other (Hotels) of ¥0.6B.

(Reference) Office market in Tokyo’s 5 central wards (by number of buildings)<By size (Total floor base)>
More than
5,000

5,000

tsubo

tsubo

1,000 -

3.0%

2.2%

3,000
tsubo

Less than
500
66.2%

500 1,000
16.3%

12.3%

Other Tokyo
Metropolitan Area
21.2%

Central
Tokyo
59.8%

<By Building age>Less than
1 yr
0.4%

3,000 -

Other Regional
Areas
18.9%

More than
30 yrs35.8%

1-5 yrs 2.8%
5-10 yrs
3.4%

10-20 yrs
18.0%

20-30 yrs
39.6%

Note:
The data covers rental office buildings located inTokyo’s 5 wards that were surveyed by CB Richard
Ellis Research Institute. (As of March 2011).
Source:“Mid-sized office building market trend”, CBRE, May
2011 (report compiled at KDRM’s request.)

Notes:
・Total sizes are rounded to the nearest ¥100M.
・ The above percentages are calculated using
the acquisition prices rounded to the firstdecimal place.
・ Central Tokyo includes Chiyoda, Chuo, Minato,
Shibuya and Shinjuku wards.

The contents 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 see disclaimer in the final page of this documents.

23

Property Acquisition Strategies going forward:
Environmental recognition and diversified investment structure
Changes in number of property information and contents
Property information increased due to a track record of acquisitions
 Demonstrate an upward trend since August after temporary
decrease due to earthquake Increasing in portfolio deals (multiple properties in one deal)
from 2010 (Obtained info about 42 deals/236 buildings mainly
from financial institutions) Increasing in information of property disposition related toredemption of CMBS and maturity of non-recourse loans

Disposition with a view to acquiring a new property(Reference) Number of property information about office buildings(every 3 month)（# of properties）
140

120
100
80
60
40
20
0

200 200 200 200 200 201 201 201 201 201 201 201 Fut
u
8 /1
9
9
9
9
0
0
0
0
1
1
1
1～ /2～ /5～ /8～ /11～ /2～ /5～ /8～ /11～ /2～ /5～ /8～ re Preference to disposition of residential and central urban retailassets Office buildings may be disposed based on room for asset
replacement(Reference) CMBS issues (by contract maturity, average maturity)
25,000- 1 yrFocusing on “mid-sized office buildings”

Diversified investment structure (TK investments)
 Tokumei-kumiai investment etc.
(Joint Investment with sponsors)

 Securing properties throughwarehousing fund1 - 3 yrs

3 - 5 yrs

5 - 7 yrs

7 yrs -

Unstated

20,00015,00010,000

5,000

Loan
0

Property＋

EquityInvestment

Sponsors, etc.

FY2004

FY2005

FY2006

FY2007

FY2008FY2009FY2010Note: Prepared by KDRM based on “2010 Trend Survey of Securitization Market” by JSDA

The contents 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 see disclaimer in the final page of this documents.

24

Appraisal values and cap rates as of the end of 13th period
No

Appraiser

Property nameAcquisitio
Appraisaln pricevalue

13th period
Book value

Cap rate

End ofvsvs 12th vs bookacquisitio period
value 13th periodvs 12thperiodNo

Property nameAppraiser

Acquisitio
Appraisaln pricevalue

13th period
Book value

Cap rate

End ofvsvs 12th vs bookacquisitio period
value 13th periodvs 12thperiodA

1

KDX Nihonbashi 313 Building

Daiwa

5,940

6,920

6,130

16.5%

-3.5%

12.9%

4.8%

-0.1%

A 45

KDX Roppongi 228 Building

JREI

3,300

2,160

3,436

-34.5%

1.4% -37.1%

4.8%

-0.1%

A

3

Higashi-Kayabacho Yuraku Building

JREI

4,450

5,220

4,373

17.3%

0.8%

19.4%

4.9%

-0.2%

A 46

Hiei Kudan-Kita Building

Daiwa

7,600

7,530

7,579

-0.9%

-0.4%

-0.7%

4.7%

-0.1%

A

4

KDX Hatchobori Building

Daiwa

3,680

3,420

3,357

-7.1%

1.2%

1.9%

5.0%

-0.1%

A 47

KDX Shin-Yokohama 381 Building

JREI

5,800

4,140

5,888

-28.6%-1.7% -29.7%

5.9%

0.1%

A

5

KDX Nakano-Sakaue Building

Daiwa

2,533

2,330

2,457

-8.0%

-0.9%

-5.2%

5.4%

-0.1%

A 48 KDX Kawasaki-Ekimae Hon-cho Building

JREI

3,760

3,410

3,817

-9.3%

0.0% -10.7%

6.3%

0.0%

A

6

Harajuku FF Building

JREI

2,450

2,950

2,451

20.4%

1.4%

20.3%

5.6%

-0.1%

A 49

Nissou Dai-17 Building

JREI

2,710

1,590

2,632

-41.3%-0.6% -39.6%

5.8%

0.0%

A

7

FIK Minami Aoyama Building

JREI

2,270

2,150

2,252

-5.3%

1.9%

-4.6%

4.8%

-0.1%

A 50

Ikejiri-Oohashi Building

JREI

2,400

1,570

2,462

-34.6%-3.1% -36.2%

5.9%

-0.1%

A

8

Kanda Kihara Building

Daiwa

1,950

1,870

1,856

-4.1%

0.0%

0.7%

5.0%

-0.1%

A 51

KDX Hamacho Nakanohashi Building

JREI

2,310

1,700

2,357

-26.4%

1.2% -27.9%

5.3%

-0.2%

A 12

Portus Center Building

Daiwa

5,570

4,590

4,638

-17.6%

0.0%

-1.0%

6.4%

0.0%

A 52

KDX Kanda Misaki-cho Building

JREI

1,380

976

1,377

-29.3%-1.4% -29.1%

5.3%

-0.1%

A 13

KDX Kojimachi Building

JREI

5,950

4,410

5,646

-25.9%

4.3% -21.9%

4.4%

-0.2%

A 53

KDX Hakata-Minami Building

JREI

4,900

3,490

4,798

-28.8%-5.4% -27.3%

6.6%

0.1%

A 14

KDX Funabashi Building

JREI

2,252

1,950

2,416

-13.4%-1.5% -19.3%

6.1%

0.0%

A 54

KDX Kitahama Building

JREI

2,220

1,510

2,207

-32.0%-9.6% -31.6%

6.0%

0.0%

A 15

KDX Hamacho Building

JREI

2,300

2,360

2,260

2.6%

-1.3%

4.4%

5.2%

-0.2%

A 55

Shin-toshin Maruzen Building

JREI

2,110

1,610

2,161

-23.7%

2.5% -25.5%

5.3%

-0.2%

A 16

Toshin 24 Building

JREI

5,300

4,200

5,156

-20.8%-0.9% -18.5%

5.7%

0.0%

A 56

KDX Jimbocho Building

JREI

2,760

1,860

2,910

-32.6%

3.9% -36.1%

5.3%

-0.3%

A 17

KDX Ebisu Building

JREI

4,640

4,260

4,576

-8.2%

2.7%

-6.9%

4.9%

-0.3%

A 57

KDX Gobancho Building

JREI

1,951

1,530

1,987

-21.6%

3.4% -23.0%

4.9%

-0.2%

A 18

KDX Omori Building

JREI

3,500

3,790

3,383

8.3%

3.8%

12.0%

5.3%

-0.2%

A 58

KDX Nagoya Sakae Building

Daiwa

7,550

4,730

7,564

-37.4%

0.4% -37.5%

5.2%

0.0%

A 19

KDX Hamamatsucho Building

Daiwa

3,460

3,180

3,263

-8.1%

0.0%

-2.6%

4.7%

-0.1%

A 59

KDX Iwamoto-cho Building

JREI

1,864

1,340

1,808

-28.1%

0.8% -25.9%

5.4%

-0.1%

A 20

KDX Kayabacho Building

JREI

2,780

2,880

2,829

3.6%

-9.4%

1.8%

5.3%

-0.1%

A 60

KDX Harumi Building

JREI

10,250

8,450

9,778

-17.6% -15.5% -13.6%

4.8%

-0.1%

A 21

KDX Shinbashi Building

JREI

2,690

2,850

2,651

5.9%

0.4%

7.5%

4.6%

-0.1%

A 61

KDX Hamamatsucho Dai-2 Building

Daiwa

2,200

1,850

2,257

-15.9%-3.6% -18.1%

4.7%

0.0%

A 22

KDX Shin-Yokohama Building

JREI

2,520

2,280

2,467

-9.5%

-2.6%

-7.6%

5.9%

0.0%

A 62

Koishikawa TG Building

JREI

3,080

3,330

3,147

8.1%

4.1%

5.8%

5.0%

-0.2%

A 23

KDX Yotsuya Building

JREI

1,950

2,460

1,989

26.2%

4.2%

23.6%

5.3%

-0.2%

A 63

Gotanda TG Building

JREI

2,620

2,660

2,823

1.5%

5.6%

-5.8%

5.3%

-0.2%

A 24

KDX Minami Semba Dai-1 Building

JREI

1,610

1,010

1,464

-37.3%-4.7% -31.1%

5.8%

0.0%

A 64

KDX Hihonbashi 216 Building

JREI

2,010

1,930

1,981

-4.0%

4.3%

-2.6%

4.7%

-0.2%

A 25

KDX Minami Semba Dai-2 Building

JREI

1,560

1,070

1,375

-31.4%-5.3% -22.2%

5.8%

0.0%

A 66

KDX Shinjuku Building

JREI

6,800

6,620

6,887

-2.6%

0.9%

-3.9%

4.5%

-0.2%

A 26

KDX Kiba Building

JREI

1,580

1,580

1,572

0.0%

1.9%

0.5%

5.6%

-0.2%

A 67

KDX Ginza 1chome Building

Daiwa

4,300

4,740

4,312

10.2%

3.3%

9.9%

4.5%

-0.1%

A 27

KDX Kajicho Building

Daiwa

2,350

2,320

2,398

-1.3%

1.8%

-3.3%

5.1%

-0.1%

A 68

KDX Nihonbashi Honcho Building

Daiwa

4,000

4,330

4,016

8.3%

0.0%

7.8%

4.8%

-0.1%

A 28

KDX Nogizaka Building

JREI

1,065

718

1,123

-32.6% -13.8% -36.1%

5.5%

0.0%

A 69

KDX Kobayashi-Doshomachi Building

JREI

2,870

2,920

2,795

1.7%

-1.7%

4.4%

6.9%

0.0%

A 29

KDX Higashi-Shinjuku Building

Daiwa

2,950

3,320

3,208

12.5%

0.0%

3.5%

5.2%

-0.1%

A 70

Kitananajo SIA Building

Daiwa

2,005

2,050

2,073

2.2%

0.0%

-1.1%

5.8%

0.0%

A 30

KDX Nishi-Gotanda Building

JREI

4,200

3,800

4,073

-9.5%

1.3%

-6.7%

5.1%

-0.1%

A 71

KDX Iidabashi Building

Daiwa

4,670

4,830

4,706

3.4%

1.7%

2.6%

4.9%

-0.1%

A 31

KDX Monzen-Nakacho Building

Daiwa

1,400

1,260

1,412

-10.0%-0.8% -10.8%

5.6%

0.0%

A 72

KDX Higashi-Shinagawa Building

Daiwa

4,590

4,800

4,763

4.6%

0.6%

0.8%

5.1%

-0.1%

A 32

KDX Shiba-Daimon Building

JREI

6,090

5,010

6,221

-17.7%

2.7% -19.5%

4.9%

-0.2%

A 73

KDX Hakozaki Building

Daiwa

2,710

2,850

2,825

5.2%

0.0%

0.9%

5.2%

-0.1%

A 33

KDX Okachimachi Building

Daiwa

2,000

1,830

2,126

-8.5%

2.2% -14.0%

5.1%

-0.1%

A 74

KDX Shin-Nihonbashi Building

Daiwa

2,300

2,480

2,315

7.8%

0.0%

7.1%

4.7%

-0.1%

A 34

KDX Hon-Atsugi Building

Daiwa

1,305

1,070

1,183

-18.0%

0.0%

-9.6%

6.3%

0.0%

A

233,726

211,654

233,504

-9.4%

-0.4%

-9.4%

5.2%

-0.1%

A 35

KDX Hachioji Building

Daiwa

1,155

821

1,289

-28.9%

0.0% -36.3%

5.9%

0.0%

B

A 36

KDX Niigata Building

JREI

1,305

899

1,446

-31.1%

3.1% -37.9%

7.3%

0.0%

A 37

KDX Ochanomizu Building

JREI

6,400

6,400

6,663

0.0%

-0.9%

-4.0%

4.9%

A 38

KDX Nishi-Shinjuku Building

JREI

1,500

1,170

1,526

-22.0%-4.1% -23.3%

A 39

KDX Toranomon Building

JREI

4,400

3,640

4,804

-17.3%A 40

Toranomon Toyo Building

JREI

9,850

10,1009,859

2.538%A 41

KDX Shinjuku 286 Building

JREI

2,300

2,120

A 42

Karasuma Building

Daiwa

5,400

A 44

KDX Sendai Building

Daiwa

2,100

Office Building Subtotal
Court Mejiro

JREI

1,250

952

1,173

-23.8%

0.1% -18.9%

5.4%

-0.1%

B 18

Venus Hibarigaoka

JREI

1,800

1,470

1,830

-18.3%

5.0% -19.7%

6.8%

-0.3%

0.0%

B 19

Residence Charmante Tsukishima

JREI

5,353

4,480

5,019

-16.3%

0.0% -10.7%

5.3%

0.0%

5.2%

-0.1%

B 34

Gradito Kawaguchi

JREI

1,038

971

1,005

-6.5%

3.6%

-3.4%

5.6%

-0.2%

2.8% -24.2%

4.4%

-0.1%

B

9,441

7,873

9,028

-16.6%

1.4% -12.8%

5.6%

-0.1%

4.2%

2.4%

4.5%

-0.2%

C

1

Frame Jinnan-zaka

JREI

9,900

9,280

9,864

-6.3%

-2.8%

-5.9%

4.6%

-0.1%

2,333 -7.826%

1.0%

-9.2%

5.0%

-0.2%

C

2

KDX Yoyogi Building

JREI

2,479

1,910

2,522

-23.0%-0.5% -24.3%

5.3%

0.0%

5,020

5,410 -7.037%

0.0%

-7.2%

5.6%

0.0%

C

Central Urban Retail Subtotal

12,379

11,19012,386

-9.6%

-2.4%

-9.7%

4.7%

-0.1%

1,440

2,172

0.0% -33.7%

6.1%

0.0%

Total

255,546

230,717254,919

-9.7%

-0.4%

-9.5%

5.2%

-0.1%

-31.4%

Note 1: Acquisition price, appraisal values, and book values are rounded down to the nearest¥M. Ratios are rounded to the first decimal place.
Note 2: Total cap rates for each property type are the weighted-average based on theacquisition prices.

3

Residential Properties Subtotal

Note 3: A-47 KDX Shin-Yokohama 381 Building (existing tower) and KDX Shin-Yokohama 381
Building Annex Tower are indicated as one property.
1
0

1

1

The contents 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 see disclaimer in the final page of this documents.

25

Historical appraisal value of office building
Historical variation for appraisal value of office

Historical appraisal profit/loss ratio and amount of office(¥M)
25,000

8%
5.2%
6%

4.4%

20,000

4.5%
1.8%

1.2%

-0.7% -0.4%
-2.6%

-2%

-9.4%
¥-21,851 million

5,000
0

-1.3%

0.0%
-5.0%

-10,000-6.1%-15,000-6%-7.5%
5th period（Oct 2007）

7th period（Oct 2008）

9th period（Oct 2009）

11th period（Oct 2010）

13th period（Oct 2011）

Percentage change in appraisal values as of the end of each period compared with theprevious period. Percentage change for the properties acquired during the period is
calculated by using the appraisal value at the time of acquisition as the appraisal value asof the end of the previous period.

Items of appraisal
valuation⇒End of8th period（2009/4）

-4.3%

Note:

-15.0%
3rd period 5th period
7th period
9th period 11th period 13th period（Oct 2006） （Oct 2007） （Oct 2008） （Oct 2009） （Oct 2010） （Oct 2011）
Appraisal profit/loss is calculated by subtracting office buildings’ book values fromappraisal values for respective period; the ratio by dividing the appraisal profit/loss by
total book value.

⇒End of⇒End of⇒End of⇒End of⇒End of9th period 10th period 11th period 12th period 13th period(2009/10)(2010/4)(2010/10)(2011/4)(2011/10)

0.2%
0.1%
0.0%
0.0%
0.0%
-0.1%
Change in cap rates(average)(5.1%→5.2%)(5.3%→5.4%)(5.4%→5.3%)(5.3%→5.3%)(5.3%→5.3%)(5.3%→5.2%)
Change in appraisal
mid- and long-term
rents-25,000

-4.5%

-2.5%

-1.5%

-1.2%

-10.0%

Appraisal profit/loss amount(left)
含み損益率（右軸）-20,000-8%
3rd period（Oct 2006）

5.0%-5,000

-3.5%

-4%

Note:

As of Oct 31, 2011

10,000

0%

Note:

10.0%

15,000

4%
2%

15.0%

⇒End of8th period（2009/4）
Appraisal profit/
loss amount (\M)
Appraisal profit/
loss ratio⇒End of⇒End of⇒End of⇒End of⇒End of9th period 10th period 11th period 12th period 13th period(2009/10)(2010/4)(2010/10)(2011/4)(2011/10)-4,615-16,958-20,153-21,696-21,932-21,851

-2.5%

-8.8%

-9.7%

-10.5%-10.0%

-9.4%

-2.0%

Changes in mid- and long-term rent and cap rate (difference with value at the end of theprevious period) of office buildings owned at the end of each period. Figures are based onweighted average acquisition price.
Changes for the properties acquired during the period are calculated by using theappraisal value at the time of acquisition as those as of the end of the previous period.

※ “Change in appraisal value as of end of each period compared with the previous period”,“appraisal profit/loss amount” and “appraisal profit/loss ratio” are based on office buildings
owned at the end of 13th period and properties sold are excluded from the calculation.
The appraisal profit/loss amount is rounded to the nearest ¥1M.

The contents 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 see disclaimer in the final page of this documents.

26

Portfolio overview (office buildings)(As of October 31, 2011)■Office Buildings (68 properties)
Name

Chuo-ward, Tokyo

10,250

Feb-08

88.9%

A-15

KDX Hamacho Building

Chuo-ward, Tokyo

2,300

Sep-93

95.0%

A-40

Toranomon Toyo Building

Minato-ward, Tokyo

9,850

Aug-62100.0%A-41

KDX Shinjuku 286 Building

Shinjuku-ward, Tokyo

2,300

Aug-89100.0%

A-46

Hiei Kudan-Kita Building

Chiyoda-ward, Tokyo

7,600

Mar-88

98.8%

A-74

KDX Shin-Nihonbashi Building

Chuo-ward, Tokyo

2,300

Nov-02100.0%A-66

KDX Shinjuku Building

Shinjuku-ward, Tokyo

6,800

May-93100.0%A-7

FIK Minami Aoyama Building

Minato-ward, Tokyo

2,270

Nov-88100.0%A-37

KDX Ochanomizu Building

Chiyoda-ward, Tokyo

6,400

Aug-82100.0%A-14

KDX Funabashi Building

Funabashi, Chiba

2,252

Apr-89

98.7%

A-32

KDX Shiba-Daimon Building

Minato-ward, Tokyo

6,090

Jul-86100.0%A-61

KDX Hamamatsucho Dai-2 Building

Minato-ward, Tokyo

2,200

Apr-92100.0%A-13

KDX Kojimachi Building

Chiyoda-ward, Tokyo

5,950

May-94100.0%

A-55

Shin-toshin Maruzen Building

Shinjuku-ward, Tokyo

2,110

Jul-9081.2%

A-1

KDX Nihonbashi 313 Building

Chuo-ward, Tokyo

5,940

Apr-74

85.2%

A-64

KDX Nihonbashi 216 Building

Chuo-ward, Tokyo

2,010

Oct-06100.0%A-47

KDX Shin-Yokohama 381 Building

Yokohama, Kanagawa

5,800

Mar-88

93.0%

A-33

KDX Okachimachi Building

Taito-ward, Tokyo

2,000

Jun-88100.0%

A-16

Toshin 24 Building

Yokohama, Kanagawa

5,300

Sep-84

96.2%

A-57

KDX Gobancho Building

Chiyoda-ward, Tokyo

1,951

Aug-00100.0%A-71

KDX Iidabashi Building

Shinjuku-ward, Tokyo

4,670

Mar-90100.0%

A-8

Kanda Kihara Building

Chiyoda-ward, Tokyo

1,950

May-93100.0%A-17

KDX Ebisu Building

Shibuya-ward, Tokyo

4,640

Jan-92100.0%A-23

KDX Yotsuya Building

Shinjuku-ward, Tokyo

1,950

Oct-89100.0%A-72

KDX Higashi-Shinagawa Building

Shinagawa-ward, Tokyo

4,590

Jan-93100.0%A-59

KDX Iwamoto-cho Building

Chiyoda-ward, Tokyo

1,864

Mar-08100.0%

A-3

Higashi-Kayabacho Yuraku Building

Chuo-ward, Tokyo

4,450

Jan-87100.0%A-26

KDX Kiba Building

Koto-ward, Tokyo

1,580

Oct-92100.0%A-39

KDX Toranomon Building

Minato-ward, Tokyo

4,400

Apr-88100.0%A-38

KDX Nishi-Shinjuku Building

Shinjuku-ward, Tokyo

1,500

Oct-92100.0%A-67

KDX Ginza 1-chome Building

Chuo-ward, Tokyo

4,300

Nov-91100.0%A-31

KDX Monzen-Nakacho Building

Koto-ward, Tokyo

1,400

Sep-86100.0%A-52

KDX Kanda Misaki-cho Building

Chiyoda-ward, Tokyo

1,380

Oct-92100.0%A-34

KDX Hon-Atsugi Building

Atsugi, Kanagawa

1,305

May-95100.0%

Name

Location

Area

Tokyo Metropolitan AreaNo.

KDX Harumi Building

No.

Type

Location

Occupancy
Acquisitio
at end ofn Price13th period（\M）¹ Year Built²
（%）³

A-60

Office Buildings

A-30

KDX Nishi-Gotanda Building

Shinagawa-ward, Tokyo

4,200

Nov-92100.0%A-68

KDX Nihonbashi Honcho Building

Chuo-ward, Tokyo

4,000

Jan-84100.0%A-48

KDX Kawasaki-Ekimae Hon-cho Building Kawasaki, Kanagawa

3,760

Feb-85100.0%A-35

KDX Hachioji Building

Hachioji, Tokyo

1,155

Dec-85100.0%A-4

KDX Hatchobori Building

Chuo-ward, Tokyo

3,680

Jun-93100.0%A-28

KDX Nogizaka Building

Minato-ward, Tokyo

1,065

May-91100.0%A-18

KDX Omori Building

Ota-ward, Tokyo

3,500

Oct-90100.0%A-58

KDX Nagoya Sakae Building

Nagoya, Aichi

7,550

Apr-09100.0%A-19

KDX Hamamatsucho Building

Minato-ward, Tokyo

3,460

Sep-99100.0%

A-12

Portus Center Building

Sakai, Osaka

5,570

Sep-93

90.1%

A-45

KDX Roppongi 228 Building

Minato-ward, Tokyo

3,300

Apr-89

65.1%

A-42

Karasuma Building

Kyoto, Kyoto

5,400

Oct-82

99.2%

A-62

Koishikawa TG Building

Bunkyo-ward, Tokyo

3,080

Nov-89100.0%A-53

KDX Hakata-Minami Building

Fukuoka, Fukuoka

4,900

Jun-73

79.3%

A-29

KDX Higashi-Shinjuku Building

Shinjuku-ward, Tokyo

2,950

Jan-90

83.3%

A-69

KDX Kobayashi-Doshomachi Building

Osaka, Osaka

2,870

Jul-09

95.6%

A-20

KDX Kayabacho Building

Chuo-ward, Tokyo

2,780

Oct-87100.0%A-54

KDX Kitahama Building

Osaka, Osaka

2,220

Jul-94

84.4%

A-56

KDX Jimbocho Building

Chiyoda-ward, Tokyo

2,760

May-94100.0%A-44

KDX Sendai Building

Sendai, Miyagi

2,100

Feb-84

87.4%

A-49

Nissou Dai-17 Building

Yokohama, Kanagawa

2,710

Jul-91

86.4%

A-70

Kitananajo SIA Building

Sapporo, Hokkaido

2,005

Oct-89100.0%A-73

KDX Hakozaki Building

Chuo-ward, Tokyo

2,710

Nov-93

83.3%

A-24

KDX Minami Semba Dai-1 Building

Osaka, Osaka

1,610

Mar-93

94.7%

A-21

KDX Shinbashi Building

Minato-ward, Tokyo

2,690

Feb-92100.0%A-25

KDX Minami Semba Dai-2 Building

Osaka, Osaka

1,560

Sep-93

94.3%

A-36

KDX Niigata Building

Niigata, Niigata

1,305

Jul-83

64.6%

A-63

Gotanda TG Building

Shinagawa-ward, Tokyo

2,620

Apr-8880.0%

A-5

KDX Nakano-Sakaue Building

Nakano-ward, Tokyo

2,533

Aug-92

84.1%

A-22

KDX Shin-Yokohama Building

Yokohama, Kanagawa

2,520

Sep-90

93.1%

A-6

Harajuku FF Building

Shibuya-ward, Tokyo

2,450

Nov-85100.0%

A-50

Ikejiri-Oohashi Building

Meguro-ward, Tokyo

2,400

Sep-88

54.9%

A-27

KDX Kajicho Building

Chiyoda-ward, Tokyo

2,350

Mar-90100.0%A-51

KDX Hamacho Nakanohashi Building

Chuo-ward, Tokyo

2,310

Sep-88100.0%

Other Regional Areas

Area

Tokyo Metropolitan Area

Office Buildings

Type

Acquisitio
Occupancyn Priceat end of（\M）¹ Year Built² 13th period

Office Building （68 properties） Subtotal

Notes:

233,726

Ave 21.6 years 94.3%

1 Acquisition price is based on the purchase price for trust beneficiary interests etc. acquired by KRI.
2 Year built is the date of construction completion recorded in the land register. Average age
subtotal is shown as the weighted-average portfolio age based upon acquisition prices with a basedate of Oct. 31, 2011, and is rounded down to the nearest first decimal place. The weightedaverage age of 74 properties held as of Oct. 31, 2011 is 20.6 years (As of Oct. 31, 2011).
3 Occupancy ratio is calculated by dividing leased area by leasable area and rounded to the firstdecimal place. Average occupancy ratio of 74 properties held as of Oct. 31, 2011 is 94.7%.

The contents 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 see disclaimer in the final page of this documents.

27

Portfolio overview(central urban retail/residential properties)(As of October 31, 2011)■Central Urban Retail Properties (2 properties)

Type

Area

Central Tokyo
Urban Metropolitan
RetailArea
Properties

No.

Name

Location

Acquisition
Price
（\M）¹

Year Built²

Occupancy
at end of
13th period
（%）³

C-1

Frame Jinnan-zaka

Shibuya-ward, Tokyo

9,900

Mar-05

89.5%

C-2

KDX Yoyogi Building

Shibuya-ward, Tokyo

2,479

Aug-91100.0%

12,379Ave 9.3 years

91.6%

Central Urban Retail Properties （2 properties） Subtotal

Reference: Historical cap rate (by asset type/annualized base)■ Residential Properties (4 properties)

TypeYear Built²

8th
period9th
period10th
period11th
period12th
period13th
periodOfficeBuildings

5.5%

5.2%

5.1%

4.9%

4.7%

4.7%

99.5%

Central Urban
Retail

4.7%

4.6%

4.5%

4.5%

4.6%

4.1%

99.7%

Residential

5.2%

5.0%

5.2%

4.8%

4.9%

4.7%

Total

5.4%

5.2%

5.1%

4.9%

4.7%

4.7%

No.

Tokyo
MetroResi- politan
dential Area

B-19

Residence Charmante Tsukishima

Chuo-ward, Tokyo

5,353

Jan-04100.0%

B-3

Court Mejiro

Shinjuku-ward, Tokyo

1,250

Mar-97100.0%

B-34

Gradito Kawaguchi

Kawaguchi, Saitama

1,038

Feb-06100.0%

B-18

Venus Hibarigaoka

Sapporo, Hokkaido

1,800

Mar-899,441

Ave 11.3 years

Regional AreasLocation

Occupancy
at end of
13th period
（%）³

Area

Properties
Other

Name

Acquisition
Price
（\M）¹

Residential Properties （4 properties） Subtotal

Notes:
1.

Acquisition price is based on the purchase price for trust beneficiary interests etc. acquired by KRI.

2.

Year built is the date of construction completion recorded in the land register. Average age subtotal is shown as theweighted-average portfolio age based upon acquisition prices with a base date of Oct. 31, 2011, and is rounded down to
the nearest first decimal place.

3.

Occupancy ratio is calculated by dividing leased area by leasable area as of Oct. 31, 2011, and rounded to the firstdecimal place.

Notes:
1.
Each ratio is after deduction of fixed property tax in each period
2.
Each ratio is rounded to the first decimal place

The contents 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 see disclaimer in the final page of this documents.

28

Emphasis on mid-sized office buildings in Tokyo Metropolitan
Area(As of December 26, 2011)
Office portfolio: 75 properties, with a total acquisition price ¥261.6B
Hokkaido
1 property ¥2.0B

Acquisition price(Tokyo Metropolitan Area)
Acquisition price(Other Regional Areas)

Composition of office portfolio
Acquisition priceTokyo 23 wards
52 properties ¥186.0B

More thanCentral Tokyo (Note2)
41 properties¥156.4B¥10.0B (2¥7.5B -

properties)¥10.0B (3¥21.5B

properties)

Miyagi2 properties ¥3.0B

Osaka, Kyoto
6 properties ¥19.2B

Other 18 wards
11 properties¥29.5B

Fukuoka
1 property ¥4.9B

Regional
Areas 18.9%

Aichi
3 properties ¥19.0B

Kanagawa
6 properties ¥21.3B

Area 21.2%

Hachioji, Tachikawa
2 properties ¥2.4B

Cent ral 5

wards 59.8%

Metropolitan

properties)

properties)¥60.5B¥92.2B

4 min（13properties）¥38.8B

Number of
Property

Acquisition
Price (¥B)

Ratio (%)

61
14
75

212.1
49.5
261.6

81.0
18.9
100.0

Tokyo Metropolitan Area
Notes:
1. Central Tokyo: Chiyoda, Chuo, Minato, Shibuya and Shinjuku wards.
Other Regional Area
2. Acquisition price is rounded to the nearest ¥100M. Ratios indicate the total acquisition price of
Total
properties in each area in proportion to the total acquisition price for all properties combined and arerounded down to the first decimal place.

¥2.5B ¥5.0B (26

7 to 10 min
6 min
（4
（7
properties）
properties）¥23.3B¥24.5B
5 min（4properties）¥13.1B

Other

Other Tokyo¥5.0B ¥7.5B (10Properties ¥2.5B to ¥7.5B consist
58.4%
Time required from the nearest
station on foot

Tokyo

Chiba
1 property ¥2.2B¥2.5B (34
properties)¥62.3B¥ 25.0B

Niigata
1property ¥1.3B

Less than

3 min
（14
properties）¥47.2B

1 min（16
properties）¥56.7B

2 min（17properties）¥57.7B

61.8% is less than 3 min. and
91.0% is less than 6 min.
Note: Values show the total acquisition price of theproperties in each category and the ratios
indicate the total acquisition price of properties
in each category in proportion to the totalacquisition price for all properties combined.
Note: Amount is rounded down to the nearest 100
million yen. Percentages are rounded down to
the first decimal place.

The contents 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 see disclaimer in the final page of this documents.

29

Management of existing properties:
Major factors of changes in monthly rent revenue
Factors of changes in monthly rent revenue
 Compared to those at the end of the 12th Period, the monthly rent increased by 42 million yen
 Increased due to acquisition of properties (+85 million yen)
 Decreased primarily due to move-out (-55 million yen)(million yen)
1,250

1,208
1,200

＋42 million yen

+85
1,166
1,150

-55
-6
1,100

Decrease
Decreasedue toduetenant move-out
to rent
revision-24

Decrease due toproperty
disposition(KDX Hirakawa-cho Bldg.)

1,050

+43

Increase due
to property
acquisition

Increase due
to new tenant
and rent revision(new+42, rent increase+0.5)

1,000

At end of 12th Period(April 30, 2011)

At end of 13th Period(October 31, 2011)

Note: Movement of monthly rents. Revenues from parking lot and billboards are not included.

The contents 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 see
disclaimer in the final page of this documents.

30

Management of existing properties:
The 4th tenant satisfaction survey results
CS＝Summary of tenant satisfaction survey
First

SecondThird

FourthTiming2005/12(2nd period)

2007/7(5th period)

2009/7(9th period)

2011/9(13th period)# of subject
properties(note)

20

44

58

69

 In cooperation with J.D. Power Asia Pacific, Questionnaires
about facilities, functions, and services, etc. are conducted
to customers (tenants) in 68 office buildings owned at theend of the 13th period concurrently
 High collection rate: General affairs 566 (collection rate 88%,
+6% compared to the 3rd survey) and employees 3,175(85%, +2% compared to the 3rd survey)

Note: Subject properties include an central urban retail properties＜Maintain high motivation of continuous occupancy＞＜Increasing overall satisfaction level＞

2.5%
2011 Survey(566 tenants)

52.7%

41.2%

93.9% (2.3% up from 2009) of tenants showed intention to stay

0.4%

2011 Survey(3,175 tenants)

27.6%

53.7%

14.0% 2.7%

81.3% (13% up from 2009) of tenants responded“satisfactory or almost satisfactory”

5.4%
2009 Survey(392 tenants)

46.4%

45.2%
91.6％

2007 Survey(391 tenants)

0.8%

48.1%

43.7%

3.8%

91.8％

0%

20%

40%

0.5%
60%

80%

2009 Survey(2,841 tenants)

19.4%

Want to stay

Don't want to stay

Unknown

21.8%

6.4%

68.3％

2007 Survey(2,285 tenants)

15.6%

48.1%

24.7%

9.4%

63.7％

100%
0%

Definitely want to stay

48.9%

Rather not to staySatisfactory
Rather unsatisfactory

20%

40%
Almost satisfactory
Unsatisfactory

The contents 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 see
disclaimer in the final page of this documents.

60%

80%

100%

No opinion
Unknown

31

L:¥Sectors¥RealEstate¥Team¥Property¥_Information Share¥_Companies¥KRI¥IR¥201112IR（第13期）¥英訳¥20111209受領分¥2nd¥第13期決算説明会2_E.ppt

Management of existing properties: Tenant profile
Survey on tenants profile Carried out a questionnaire for tenants as part of the latest CS survey (566 responses received)
 Obtained information about number of employees, capital, stock listing status etc.
Capital

Number of employees
Over 100 Unknown/
6% No answer

50～99
10%

8%

1～29
61%
30～49
15%

Less than 30 employees
Listing status
Unknown/
no answer
Listed in 21%
2nd Section of TSE
2%
Unlisted/
Listed inprivate1st Section of TSE
62%11%
Listed in emerging
or other market
4%

Unlisted/Private

Unknown/No
answer24%

Less than
100 mnyen
40%Over 1bn
yen Less than
18% 1 bn yen Less than
300 mn11%yen
7%Less than 100 million yen
of capitalOccupancy period
21～30
years
2%

Less than
2 years
20%

Over 1002.0%

30 - 99
5.8%

10 -29
16.5%

Unknown/
No answer
4%

Over 31
years
1%

11～20
years
15%

（Reference） Number of offices by
number of employees per office（Tokyo）
Less than 30 employees
92.2%

1-9
75.7%
Source：Prepared by KRI based on “2009 Economic census –Report on the basic survey results of Tokyo” by Statistics
Division of Bureau of General Affairs, TMG

2～10
years
57%

Occupancy period
2 to 10 years

The contents 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 see disclaimer in the final page of this documents.

32

Management of existing properties:
Energy saving measure and environmental initiatives
5年間のエネルギー使用量削減計画
5-yearenergy usage reduction plan

Energy saving measures: details
Take measures on a portfolio basis focusing on air conditioner and lightings
which account for about 80% of total energy usage.

【Software】■Public (tenant) awareness・Renew air conditioner
・Use heat exchanging air fan
・Renew ventilation system

Prepare cooperation request forenergy saving
・Pre-set temperature at 28℃
・Reduction of lights or lights-out
・Energy saving on OA equipment
Energy saving posters
・put up posters in common spaceon each floor
Distribute energy saving manual■Renew evacuation signs and installmotion detection sensor

・LED light in evacuation signs
・Install motion detection sensor(toilet, office kitchen, stair case)■Renew lighting system■Questionnaire on energy saving

・LED light for common space down
lights・LED lights for occupied areas

・Carried out a questionnaire onenergy saving in the 4th CS
SurveyEnergy usage reduction ratio（％）

【Hardware】■Renew air conditioning system

2011年度FY2011

2012年度FY2012

2013年度FY20132014年度FY20142015年度FY20150%Change to high-efficiency air conditioner (by property)

-1%
-2%

LED lights for evacuation signs
Install motion detection sensor(by portfolio)-3%

LED lights for common
space down lights（by portfolio)
LED lights for occupied
areas（by each property）

-4%
-5%
-6%

Plans
to achieve the goal of over 5%
2014年度(4年目)に目標である5年
reduction in 5 years in FY2014(4th year)

間で5％以上の削減を達成見込み

KRI’s environmental initiatives
Received DBJ Green Building certification

Participation in GRESB evaluation（Asset management company）

Received DBJ Green Building certification for the 3 properties
below on June 9, 2011 as the first J-REIT recipient.

GRESB is a benchmark to analyze and evaluate sustainability of real estatecompanies, REIT and private real estate fund in terms of environmental andsocial performance.

KDX Harumi
Bldg

KDX Nagoya Sakae KDX KobayashiBldg
Doshomachi Bldg

Environmental policies
１. Compliance with environmental laws andregulations
２. Promotion of energy conservation
measures
３. Reduction of environmental burden
４. Disclosure of environmental information
５. Environmental education

Environment-focused HP
Created “Environmental
Initiative” page
http://www.kdxreit.com/environment/index.html

Global Real Estate
Sustainability Benchmark※Source：Excerpt from GRESB “RESEARCH REPORT 2011
Regional Results/ Asia”
The contents 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 see disclaimer in the final page of this documents.

33

Stable financial management: Borrowing list (as of October 31, 2011)
The Norinchukin Bank
Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
Aozora Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Short-term borrowings subtotal
The Norinchukin Bank
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
The Chuo Mitsui Trust and Banking Co., Ltd.
Aozora Bank, Ltd.
Resona Bank, Ltd.
Development Bank of Japan Inc.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Current portion of long-term borrowings subtotal

Balance
Drawdown date(\M)

1,500 2011/4/18
2,700 2011/1/31
1,500 2011/7/29
3,500 2011/10/31
1,000 2011/10/31
10,2002,500 2006/12/1
2,500 2008/1/10
450 2009/2/27
2,000 2007/4/2
1,500 2009/4/30
1,500 2008/6/30
900 2009/2/27
2,500 2010/10/29
13,850

LenderLast repayment date

2011/11/30 (Note 1)
2012/1/31
2012/7/31
2012/10/31
2012/10/31
2011/11/30 (Note 1)
2012/1/10
2012/2/29 (Note 2)
2012/4/2
2012/4/27
2012/6/30
2012/8/31 (Note 2)
2012/10/31

Long-term borrowings

Current portion of longterm borrowings

Short-termborrowings

LenderNotes:
1. Already repaid on the repayment date (not refinanced)
2. Repayment Method: repayment of every 6 month (amortization)
3. The amount is rounded to the first decimal place.

Balance
Draw dow n date(\M)

Last repayment date

Resona Bank, Ltd.
Development Bank of Japan Inc.
The Chuo Mitsui Trust and Banking Co., Ltd.
Aozora Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Resona Bank, Ltd.
Development Bank of Japan Inc.
Aozora Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
Resona Bank, Ltd.

500
3,000
1,000
1,500
1,000
500
3,000
2,000
1,000
920
1,840
500

2009/12/8
2008/6/30
2010/1/13
2010/2/18
2011/4/28
2010/7/30
2006/9/1
2011/3/31
2011/9/30
2009/10/26
2009/10/30
2010/10/29

2012/12/8
2012/12/28
2013/1/15
2013/2/18
2013/4/30
2013/7/31
2013/8/31
2013/9/30
2013/9/30
2013/10/26 (Note 2)
2013/10/30 (Note 2)
2013/10/31

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (1,500),
The Chuo Mitsui Trust and Banking Co., Ltd. (800),
Aozora Bank, Ltd. (400)2,700

2010/11/12

2013/11/12

The Bank of Tokyo-Mitsubishi UFJ, Ltd. (500),
The Chuo Mitsui Trust and Banking Co., Ltd. (200),
Aozora Bank, Ltd. (100)800

2010/12/1

2013/11/12

The Chuo Mitsui Trust and Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation
The Chuo Mitsui Trust and Banking Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Banking Corporation (2,200),
The Chuo Mitsui Trust and Banking Co., Ltd. (1,000),Resona Bank, Ltd. (300)
Sumitomo Mitsui Banking Corporation
The Chuo Mitsui Trust and Banking Co., Ltd.
The Chuo Mitsui Trust and Banking Co., Ltd.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation (2,070), Development
Bank of Japan Inc. (1,530),
The Chuo Mitsui Trust and Banking Co., Ltd. (900), Aozora
Bank, Ltd. (450)
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
Aozora Bank, Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui Banking Corporation (1,200),
Resona Bank, Ltd. (800)
Sumitomo Mitsui Banking Corporation (800),
Resona Bank, Ltd. (200)The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Resona Bank, Ltd.
Development Bank of Japan Inc.
Development Bank of Japan Inc.
Development Bank of Japan Inc.

3,700
1,300
2,500
1,000

2010/7/30
2011/1/31
2011/9/30
2011/7/13

2014/1/31
2014/1/31
2014/3/31
2014/7/14

3,500

2011/7/29

2014/7/31

3,700
1,000
2,700
1,000
1,104
1,500

2010/7/30
2011/9/1
2011/3/22
2011/9/30
2010/1/29
2011/8/31

2014/7/31
2014/8/29
2014/9/22
2014/9/30
2015/1/30 (Note 2)
2015/2/27

4,950

2010/2/18

2015/2/18 (Note 2)

2,500
1,850
3,000
1,500

2011/9/30
2010/4/2
2011/2/28
2011/4/28

2015/3/31
2015/4/2 (Note 2)
2015/8/31
2015/10/31

2,000

2010/11/12

2015/11/12

1,000

2010/12/1

2015/11/12

800
500
2,000
1,000
1,000
5,000
2,300
700

2011/1/31
2011/2/28
2011/3/31
2011/4/28
2011/3/31
2006/5/1
2010/11/12
2010/12/1

2016/1/29
2016/1/29
2016/1/29
2016/1/29
2016/3/31
2016/4/30
2017/11/12
2017/11/12

Long-term borrowings subtotal

73,364

Total

97,414The contents 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 see disclaimer in the final page of this documents.

34

KRI Unitholders
Change in investment units by unitholders
Individuals and Others
Other Domestic Co.
1st period
3rd period

49.0

12.4

47.0

10.6

# of units held
(unit)(%)

Japan Trustee Services Bank, Ltd. (Trust Acct.)

57,79920.17%

Trust and Custody Services Bank, Ltd.
(Securities Investment Trust Acct.)

29,841

10.41%The Nomura Trust and Banking Co., Lrtd. (Trust Acct.)

Financial Inst. (incl. Securities)
Foreign Co. and Individuals

22.7
15.6

Top 10 unitholders at the end of 13th period (as of 2011/10/31)

8.5

48.0

16.0
29.0

6.8

34.6

Name

26,102

9.10%

9,620

3.35%

6.8

46.5

6.4

40.3

Nomura Bank (Luxembourg) S.A.

5th period 5.7

48.4

5.1

40.8

The Master Trust Bank of Japan, Ltd. (Trust Acct.)

9,535

3.32%

Goldman Sachs International

6,763

2.36%

The Bank of NY Treaty JASDEC Account

5,452

1.90%

State Street Bank and Trust Company 505223

4,430

1.54%

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/HENDERSON HHF SICAV

3,787

1.32%

7th period
9th period
11th period

5.4

49.4

5.0

40.2

8.1

45.6

5.4

41.0

10.8

42.5

1.3

45.4

8.2

43.1

1.2

47.5

9.9

38.1

2.1

49.9

8.7

49.5

1.9

40.0

8.0

47.2

1.6

43.1

13th period

12.0
0%

47.8
20%

40%

1.8
60%

Goldman Sachs & Co. Regular Account
Total(Reference) Reporting of major unitholders
100%

Note: Rounded to the first decimal place

Type of unitholders at the end of 13th period (as of 2011/10/31)# ofUnitholders
8,685

Ratio
(%)
95.6%

# of Units
held (unit)
34,256

Ratio
(%)
12.0%

Financial Inst. (Incl. Securities co.)

60

0.7%

136,919

47.8%

Other Domestic Co.

135

1.5%

5,186

1.8%

202

2.2%

110,189

38.5%

9,082

100.0%

286,550

100.0%

Type of unitholders
Individual and Others

Foreign Co. and Individuals
Total

1.30%
54.81%

Note: Rounded down to the second decimal place

38.5
80%

3,733
157,062

Note: Rounded to the first decimal place

Name
DIAM Co., Ltd.

Submitted on
10/6/2011# of units held
(unit)
34,58534,58522,06915,617
6,452
15,91615,092544
280
15,564
13,76013,760

DIAM Co., Ltd.
Mizuho Asset Management Co., Ltd.
8/5/2011
Mizuho Asset Management Co., Ltd.
Sinko Investment Trust Management Co., Ltd.
Nomura Securities Co., Ltd.
8/4/2011
Nomura Asset Management Co., Ltd.
Nomura Securities Co., Ltd.
NOMURA INTERNATIONAL PLC
CBRE Clarion Securities LLC
9/5/2011
The Sumitomo Trust and Banking Co., Ltd.
1/21/2011
Nikko Asset Management Co., Ltd.
Note:
1 Report submitted after PO on 2009/11/16 to 2011/10/6 (excluding unitholders that have lessthan 10,000 units)
2 Total unitholders increased from 233,550 units to 284,950 units due to PO on 2011/7/20,
and further increased to 286,550 units due to third-party allotment on 2011/8/8.

The contents 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 see disclaimer in the final page of this documents.

35

Disclosure and IR activities
IR Activities for Individual Investors
Disclosure using KRI website

Using KRI website in English/1on1 meetings

Timely disclosure through website

Created new page for“Environmental Initiatives”

Top page

49,971

List of portfolio

9,458

Press Release

9,312

Disclosure Materials

8,436

Distributions

Disclosure in English website on same day (Press release
and Financial results)【Reference】 Number of meetings (including conference calls)

13th period(Oct 2011) Access

Items

IR Activities for Domestic and International Investors

13th period IR(Incl. PO road show)

Domestic Institutional Investor

69

Domestic regional investors

5

5,310

International investors (Europe)

5

KDRM Site top

4,441International investors (US)29

Others(occupancy ratio etc.)

14,270International investors (Asia)

45

Total

153

IR through magazines
Magazines

Conference for domestic/international investors
Monthly Property Management (September issue)
Special feature on “J-REIT”

Events attended

Date

Monthly Property Management (December issue)
Special feature on “Value of Mid- and Smallsized Buildings”

Panel discussion by REIT Management(Sponsored by Barclays Capital Securities)

2011/9/7

IR fair/seminar for individual investors

The 8th Japan Conference(Sponsored by Merrill Lynch Japan Securities)

2010/9/14

Macquarie Real Estate Tour
(Sponsored by Macquarie Capital Securities (Japan))

2010/11/29

Nikkei IR Fair 2011 Business Research Web Seminar 2011/8/31

Tokyo Property Conference 2011
(Sponsored by SMBC Nikko Securities)

2011/11/30

J-REIT Fair for Individual Investors 2011

Nomura Investment & Global Real Estate
Forum 2011 (Sponsored by Nomura Securities)

2011/12/2

Attending events below including WEB seminars
Events attended

Date（Organized by Nikkei Cross Media Promotion Bureau）（Sponsored by ARES）

2011/11/26

The contents 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 see disclaimer in the final page of this documents.

36

Unit price performance since IPO
Kenedix Realty Investment Corporation (KRI) price/volume performance
Volume (unit)

Unit price（JPY）

8,000

VolumeUnit pricePO(¥873,180/unit)

7,000

1,000,000

900,000

PO(¥593,096/unit)

800,000
6,000

IPO(¥580,000/unit)

700,000
PO(¥274,510/unit)

5,000
PO
(¥252,200/unit)

4,000

600,000

500,000
400,000

3,000

300,000
2,000
200,000
1,000

100,000

0

005 05 06 06 06 06 07 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11/ 2018/2018/ 2013/ 2011/ 20 / 5/ 20 /5/20 /4/20 /2/2027/ 2025/2027/ 2024/ 2018/ 2017/2019/ 2018/ 2011/ 2014/2015/ 2014/ 20 /7/20/ 7/ 20 /8/20 /7/2031/ 2030/20
12
1
4
7 9/ 12/ 3/ 6/ 9/ 12/ 3/ 6/ 9/ 12/ 3/ 6/9 12
3
6 8/ 11/
7/ 10/ 1/ 4/ 7/ 10
・As of December 19, 2011
Highest price (trading price)： ¥988,000 （2007/5/31）
Lowest price (trading price)： ¥100,300 （2008/10/20）
・Average Trading Volume during 2011： 1,031 Units(2011/1/4～2011/11/30)

Notes:
1 Period: IPO to 2011/11/30
2 Price: Closing price3 Excluding over 8,000 trading volume (2008/10/20:19,728 units)

The contents 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 see disclaimer in the final page of this documents.

37

Summary financial results for 13th period (October 2011)- Income statement, etc.
Comparison of 14th period forecast (as of 7/5 vs 12/19)

Comparison between 12th (Apr 2011) and 13th period (Oct 2011)
12th period

13th period

Rental and other operating revenues

7,208

7,475

267

Rental revenues-real estate

5,908

6,121

213 New properties+226 Existing properties+62 Properties sold-76

Common area charges

1,300

1,353

53 New properties+40 Existing properties+38 Properties sold-25

Other lease business revenue

928

1,023

94

Parking space rental revenues

250

249

0

Utility charge reimbursements

583

633

49 New properties+22 Existing properties+36 Properties sold-9

Ordinary income/loss
Operating income/loss
Non-operating income/loss

（※1）

94

140

8,136

8,498

Gain on sale etc.

-

545

Operating revenues

8,136

9,044

Property management fee

811

832

20 New properties+15

Utilities

561

617

56 New properties+26 Existing properties+26 Properties sold-9

Taxes

643

703

60

Repairs and maintenance cost

123

152

28 Work on external wall etc.

Others（*１）

220

212

-8

45 Cancellation penalty+29 Restoration income+19

Depreciation

362
545 Gain on sale of KDX Hirakawacho Building
907

Fixed property tax for the properties acquired in the 11th and 12th
period

1,406

1,442

36 New properties+50 Existing properties+2 Properties sold-16

Total expenses related to rent business B

3,767

3,961

194

Rental business profit (A-B)

4,369

4,537

168

Net operating income (NOI)

5,776

5,980

204

Asset management fee

448

487

39 Due to profit increase

Others （*2）

211

169

-41 Property research expenses-15、IR expenses-12

Operating expenses

4,427

4,618

191

Operating income

3,709

4,425

715

Non-operating income

35Interest expenses

935

919

Interest expense on investment corporation bonds

113

117

3

Borrowing related expense

303

298

-5
Increase due to issuance of third series investment corporation
bonds

5

6

1

8

27

18 Increase due to issuance of new investment units in 13th period
21 Non-deductible consumption taxes due to sales of properties, etc.

022Non-operating expenses

1,366

1,390

24

Ordinary income

2,346

3,040

694

26

-

-26

-

13

13 Received air-conditioning equipment in Frame Jinnan-zaka

Extraordinary income

26

13

-13

Loss on disaster

35

-

-35

Loss on reduction of noncurrent assets

26

-

-26

Extraordinary loss

61

0

-61

2,311

3,054

742

Gain from donation of fixed assets

Income before income taxes
Income taxes
Net income

Of which gain on sales of real estate properties

-

-

-

4,675

4,935

260

Expenses related to rent business (excl. depreciation)

2,531

2,650

119

Depreciation

1,463

1,563

100

681

721

40

3,782
5
1,315

4,098
5
1,577

316
262

1,271

1,539

268

44

37

-7

2,472
2,471

2,525
2,524

53
53

5,927
6,383
Leasing NOI（Net Operating Income)FFO(Funds From Operation)
3,934
4,088
Number of properties
74
82
Provision for/reversal of reserve for reduction entry
(195)
(143)
Number of units issued
286,550units 286,550units
Distribution per unit
9,300yen
9,300yen

456
154
8
52
0units0yen

Operating expenses

Other

Operating income
Non-operating income
Non-operating expenses
Interest expenses etc.
Other

Ordinary income
Net income

2

Amortization of investment unit issuance costs
Other non-operating expenses

Operating revenues-16 Due to lowered interest rates as a result of collateral release

Amortization of investment corporation bonds issuance costs

Subsidy
Special ordinary/income/loss

Account

Ordinary income/loss
Non-operating
Operating income/loss
income/loss

Miscellaneous
Total rental and other operating revenues A

B-C
AB
14th period 14th period Differences(2012/4)(2012/4)
Forecast as Forecast asof 7/5of 12/19
8,458
9,033
575

Difference Note

1

1

-

2,309

3,052

742

Retained earnings brought forward

0

0

-

Unappropriated retained earnings

2,310

3,052

742

December 19, 2011
Decided to acquire 8 properties(¥28.55B) in the 14th period with theborrowing of ¥29B.

Notes:
1 Other expenses: Insurance, trust fees, etc.
2 Other operating expenses: Director’s compensation, asset custody fees,
administrative fees, auditor’s fees, etc.
※ Numbers showing differences are rounded to the nearest ¥100M

The contents 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 see disclaimer in the final page of this documents.

39

Summary financial results for 13th period (October 2011)- Balance sheet, etc
12th period

13th period

As of Apr 30, 2011

As of Oct 31, 2011(\M)
Current assets(%)

14,352

5.5(\M)
18,589Cash and bank deposit

7,925

12,349Entrusted deposits

5,869

5,989

Other current assets

557

251

Fixed assets

247,529

Property, plant and equipment

94.5

256,241

245,826

254,561

Buildings

13,456

13,248Land

29,104

29,104

Buildings in trust

61,25964,090Land in trust

142,006

148,116

Construction in progress in trust

0

1

Intangible assets

361

360

Leasehold right

285

285

Leasehold right in trust

74

74

Right of using water facilities in trust

1

0

1,341

1,319

134

133

1,207

1,185

Investment and other assets
Leasehold and guarantee deposits
Long-term prepaid expenses
Deferred assets

47

0.0

142

6.8

93.2

Unitholders equity per
unit
Interest-bearing debt
ratio at end of period
Unitholders’ equity tototal asset
Number of properties at
end of period

12th period

13th period¥580,199¥524,419

43.0%

40.3%

51.7%

54.6%

71

74

Difference

Note

Issuance of new investment¥-55,780 unit
-2.7% Issuance of new investment
unit, early repayment+2.9 Issuance of new investment
unit
properties acquired, 1+3 4property
sold286,237.93㎡ 300,016.89㎡ +13,778.96㎡ 4 properties acquired
Total leasable floor
Occupancy ratio at end
94.6%
94.7%
+0.1%
of period

Basis for calculating cash distribution (¥)
0.1

Investment corporation bond issuance costs

22

30

Investment unit issuance expenses

25

111

261,928 100.0

274,973 100.0

47,94235,412

Total assets

Key indicators(%)

12th period

13th period

Ⅰ Retained earnings at the end of period

2,310,063,344

3,052,837,677

Ⅱ Total distribution

2,310,043,050

2,749,733,800(9,891)(9,596)

Provision for reserve for reduction entry-

303,000,000

Ⅳ Retained earnings to be carried forward

20,294

103,877(Distribution per unit)
Ⅲ Voluntary retained earnings

Current liabilities
Account payables

18.3

409

556

Short-term loans payable

36,16024,050Current portion of investment corporation bond

9,000

9,000

other account payables

208

246

Provision for loss on disaster

30

2

1,872

1,281

Advance received
Others261

Fixed liabilities

78,48189,288

3,000

4,500

Long-term loans payable

64,55573,364

Tenant leasehold and security deposit

1,521

1,556

Tenant leasehold and security deposit in trust

9,403

9,868

Total liabilities

126,423

Total unitholders' capital

133,129

147,153

65

65

Unappropriated retained earnings

Cash flow statement (¥M)
12th period
13th period（単位：百万円）

275
30.0

Investment corporation bonds

Reserve for reduction entry

12.9

48.3

2,309

124,700

32.5

135,505

Total liabilities and unitholders' equity

261,928 100.0

51.7

150,272

3,546

9,434

Net cash provided by investing activities-13,701-14,138

Net cash provided by financing activities

7,607

9,812

Net increase in cash and cash equivalents-2,547

5,107

Cash and cash equivalents at beginning of period

15,367

12,820Cash and cash equivalents at end of period

12,82017,928

45.4

3,052

Total equities

Net cash provided by operating activities

54.6

274,973 100.0

The contents 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 see disclaimer in the final page of this documents.

40

(Reference data 1) Office building market environment
1. 23 wards of Tokyo: rent level for large buildings andmedium-sized buildings(%)
110

Rent for medium-sizedbuilding is less volatile
than large building

2. Breakdown of office buildings by GFA (tsubo)
More than
3,000 tsubo
5.1%

Large buildings
Medium-sized buildings

100

500-3,000 tsubo
28.2%
28.2%

90

Less than
500 tsubo
66.7%

Broad stock of mid-sized
office buildings

8070
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Note: Large building is a building with a gross floor area of 3,000 tsubo or more, while medium sized building is a building
with a gross floor area of 1,000 to 3,000 tsubo
Source: Created by KDX based on the data compiled by CBRE (the latest values as of 2011/9)

3. Changes in the offered rent and vacancy ratio inCentral Tokyo(%)

10

Vacancy rate (left axis)

Average rent (right axis)

4. Changes in rent levels by region(JPY)
25,000924,0008

23,0007

22,0006

21,0005

20,0004

19,0003

18,0002

17,0001

16,000
2002

2003

2004

2005

2006

2007

2008

2009

2010

Note: The above data covers rental office buildings located in Tokyo’s 23 wards that were surveyed by CB Richard Ellis
Research Institute. The above data may not include the data of all properties in the 23 wards (as of 2011/3).
Source: Survey conducted by CB Richard Ellis Research Institute based on KRI’s request “Market survey of Medium-sizedbuilding”(2011/5)

2011

Note: Survey covers buildings with more than 100 tsubo in Tokyo’s central 5 wards (Chiyoda, Chuo, Minato, Shinjuku
and Shibuya)
Source: Miki Shoji “Latest Office Building Markets in Tokyo’s central 5 wards” (the latest values as of 2011/10)(JPY '000/tsubo)

25
Tokyo

Osaka

Fukuoka

Nagoya20¥17,011/tsubo
15

10¥11,707/tsubo¥11,060/tsubo¥9,443/tsubo

52002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Note: Targeting the properties with a gross floor area of 100 tsubo or more in Tokyo’s central 5 wards (Chiyoda, Chuo,
Minato, Shinjuku, and Shibuya)
Source: Created by KRI based on the data compiled by Miki Shoji (the latest values as of 2011/10)

The contents 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 see disclaimer in the final page of this documents.

41

(Reference data 2) About Tokyo Metropolitan Area
2. Population transition of Tokyo

1. Economic foundation etc. of Tokyo(Timing)(Item)

Japan

Tokyo

2008

Nominal GDP¥494,198.7B¥89,714.9B

2006# of office

5,910,000

690,0002006# of employee

58.63M

8.7M

October 1,
2009

Total Population

127.51M

12.86M

October 1,
2009

Population of
productive age(15-64years old)

81.49M

8.65M

3. Gross Metropolitan Products estimate (2008)

2,500

1,500

12,90012,83812,75812,80012,65912,70012,60012,868

12,576

12,50012,400Source: Created by KDRM based on the data complied by “Kurashi to toukei 2011 (Life and statistics 2011)” on the Tokyo
metropolitan government website

2,000(Thousand people)

'2005

'2006

'2007

'2008

'2009

Source: Created by KDRM on the data complied by Ministry of Internal Affairs and Communications Statistics Bureau,“Japan Statistical Handbook 2010”

4. No. of Headquarters of Fortune 500 companies (2010)

60

'2025
'2008

'2025

50

50

40

'2008

30

30

1,000

'2025
'2008

'2025

25
19

20

17

'2008

500

10

0

0

Tokyo

New York

Source: UK Economic Outlook November 2009, PricewaterhouseCoopers
Note:
Figures are calculated by PricewaterhouseCoopers at PPP

Paris

LondonTokyo

BeijingParis

New York

LondonSource: Fortune Global 500, 2010, Fortune Magazine

The contents 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 see disclaimer in the final page of this documents.

42

Management Structure of Asset Management Company
Decision-making process
Deliberation&
Resolution

Deliberation&
Resolution

Preview

Resolution/Reporting

Creation of management guidelines

Corresponding

Compliancedivision

officer

Asset

Approval for transactions with interested parties
Approval for transactions outside ofmanagement guidelines

Management
committee

Compliancecommittee

Approval for transactinos that follow
management guidelines excluding those withinterested parties

Resolution
Boardmeeting
Reporting< Reference >Asset management company’s management fee structure

Rules on transactions with interested parties Transactions with interested parties Asset acquisition: Must not acquire properties for more than appraised price(except for properties pre-acquired by Kenedix Inc. pursuant to the MOU)
 Asset disposal: Must not sell properties for less than appraised price Asset management fee
 Management fee I : 0.15% of total assets
 Management fee II : 3.0% of distributable amount eachfiscal period Acquisition fee : 0.5% of acquisition price (0.25% ifinterested parties)＜Reference＞
Meetings held by the various committees, Board of Directors of the AssetManagement Company / Investment Corporation

 Disposition fee : capped at 0.5% of transfer price

8th
Period9th
Period10th
Period11th
Period12th
Period13th
PeriodCompliance committee

8

8

10

7

7

8

Asset management
committee

44

36

39

32

37

44

Board of directors

8

10

12

11

9

11

Board of directors ofInvestment Corporation

8

8

8

8

7

9

 Property management fees Rental management fee: 2% of rent revenues + 2% of
operating revenues from the property (after deducting operating
expenses and before deducting depreciation)
 Management transfer fee: amount determined in proportion to
the acquisition/sale price(e.g. ¥1-3B → ¥2M, ¥5-10B → ¥2.4M）
 Construction supervision fee: amount determined in proportion
to the construction costs(e.g. ¥1-5M →5%, ¥10-100M → ¥450,000＋3%)

The contents 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 see disclaimer in the final page of this documents.

43

Change in shareholders of AM and Memorandum ofUnderstanding
Structure of the Investment Corporation

Memorandum of Understanding (revised in Aug.2010)

Unitholders

Kenedix, Inc./
Kenedix Advisors Co., Ltd.

Real Estate market(the Asset Management Company)
90% Investment

Original network of theAsset Manager

Support-line

10％ Investment

Kenedix Asset Management, Inc

KDX/KDA Private funds

Kenedix REIT Management, Inc.

Properties held by KDX(incl. development projects)

Brokerage

KDX/KDA’s
warehousing fundWarehousing function
by KDX

Corporate sector

Commit asset management

Financial institutions

Real estate fund

Kenedix Realty Investment
Corporation (J-REIT)

Construction Companies
and developers

Investment

Potential acquisition channels

15%
Investment

85%
Investment

MAX-REALTY
15%
Investment
Kenedix, Inc.

35%
Investment

XYMAX
Corporation

Sumitomo
Mitsui
Banking Co.
etc.

Asset Management
ITOCHU
Corporation(Asset Manager)(the Investment
Corporation)

Note: MAX-REALTY is an asset management company founded by XYMAX
Corporation, Sumitomo Mitsui Banking Corporation and others, based on theconcept of “combining real estate and finance consulting knowledge in to one.”The contents 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 see disclaimer in the final page of this documents.

44

Kenedix REIT Management, Inc. -Organizational chart
Key members
Shareholders’meeting
2 Auditors (part-time)
Haruo Funabashi,
Ninji HayashiHaruo Funabashi
Auditor(part-time)Auditors

After joining the Ministry of
Finance, he served ascommissioner of Tokyo
Customs, Deputy
Commissioner of the
National Tax Administration,
Secretary General of the
Securities and Exchange
Surveillance Commission,
Director General, Minister’s
Secretariat of the National
Land Agency before joining
Kenedix as an auditor

Taisuke Miyajima

Board ofdirectors

Worked for Mitsubishi Trust and Banking(debt capital market group, Los Angeles
branch). Seven years of experience in realestate investment advisory division after
joining Kenedix, Inc.
Transferred to Kenedix REIT Management
to become CEO and president

CEO & PresidentCompliance officer
Yuji Kamimura

Asset management
committee

Compliancecommittee

Koju Komatsu
General Manager,
Investment Management
Division

Representative
director
Taisuke MiyajimaWorked for c.7 years for Chuo Mitsui
Trust and Banking（Property Sales
Department, Property Investment
Advisory Department, Asset Finance
Department）
Worked for Cititrust & Banking before
Joining Kenedix, Inc．
Property appraiser

Worked for Asahi Urban Development
Corporation, Nihonjisho, others before hejoined Kenedix
Executive Officer & General Manager of
REIT Management Division, Kenedix
Advisors before joining Kenedix REITManagement

Masashi Ohwa

Investment
management div.

Property
management div.

Financialplanning div.

Business
administration div.

Director & General Manager,
Property Management
Division

Asset
Investment
group

Asset
Management
group

Property
Managementgroup• Property
acquisition anddisposition• Research andAnalysis of realestate markets• Property
Management• Assessment ofproperty
management/riskmanagement• Property
leasing• Property
Management

Engineeringgroup• Construction
Management

Finance andaccounting
group

Business
administrationgroup• Investor• Formulation ofRelationsbudget, financial
activities
statements• Negotiations with • Procurement ofregulatory
funds
agencies andconcerned bodies• Running
unitholders’ anddirectors’
meetings• Administration/
Accounting/
Human
Resources

IR
group



Worked for 12 years at Chuo Mitsui Trustand Banking, where he was responsible forsecuritization
Joined Kenedix, Inc. after 4 years ofexperience in various securitized paper
investments at Sumitomo Life Insurance

Masahiko Tajima
Director & General Manager,
Financial Planning DivisionWorked for 27 years at Shinsei Bank, Ltd.
Joined Kenedix REIT Management after 8
years of experience as a compliance officer
at Shinsei Bank.

Yuuji Kamimura
Compliance Officer

The contents 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 see disclaimer in the final page of this documents.

45

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 ofsoliciting investment in, or as a recommendation to purchase or sell, any specificproducts.

Please be aware that matters described herein may change or cease to exist without priornotice of any kind. This document contains forward-looking statements and anticipationsof future results, based on current assumptions and beliefs in light of currently 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 Realty Investment Corporation (KRI)'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, theinformation provided is intended to be thorough. However, no assurance or warranties are
given with respect to the accuracy or completeness thereof.
Neither KRI nor Kenedix REIT Management (KDRM) shall be liable for any errors, inaccuracies,
loss or damage, or for any actions taken in reliance thereon, or undertake any obligation to
publicly update the information contained in this document after the date of thisdocument.

The contents 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 see disclaimer in the final page of this documents.