22nd

Fiscal Period

SEMIANNUAL REPORT
November 1, 2015-April 30, 2016
TSE 8972

About KDO
Kenedix Office Investment Corporation (KDO) is a dynamic, but proven, J-REIT focusing on investments in mid-sized office buildings in the Tokyo Metropolitan Area. Since listing on the Tokyo Stock
Exchange (8972) over a decade ago, KDO has been a leading pioneer. Through steady expansion,
KDO’s portfolio has grown from 31 properties with a total acquisition price of 69.1 billion yen to 97
properties with a total acquisition price of 393.1 billion yen in April 2016.
As the No.1 J-REIT focusing on mid-sized office buildings, we will continue raising portfolio quality
through asset reshuffle and other initiatives, while advancing performance with internal growth,backed by sound financial management.

ACHIEVEMENT

22nd fiscal period (ended April 2016)

External growth
Consistently expanding asset size while improving portfolio quality
Asset size

393.1

bn yen# of properties

Balance of reserve for reduction entry

97

2.0

properties

bn yenInternal growth
Toward full-fledged growth in rent revenue through building solid results
Actual occupancy rate of office buildings

92.5

%

Change in rent level upon rent revision withexisting tenants for office buildings based onmonthly rent

7.1

+

+2.0%
period over period

Upward rent potential (proportion of contracts
of office buildings below market rent) at theend of 22nd fiscal period

63.5

mn yen%+5.1%
period over period

Financial strategy
Maintained stable financial position and continued to reduce interest expenses
Average interest rate

Average remaining period tomaturity

LTV

1.25

4.7

42.8

%

−0.14%
period over period

years+0.4 years
period over period

Appraisal profit%±0%
period over period

17.4+6.5 bn yen
period over periodbn yen1

Message from Management

We Will SecureGreater Portfolio
Profitability and Quality
Leveraging Our Insight and Property Management
Expertise Backed by Our 10-Year Track Record

Naokatsu UchidaDirector and COO, General Manager of
Office REIT Division of
Kenedix Real Estate Fund Management, Inc.

2

Results for the 22nd Fiscal Period Include Concrete
Outcomes of Our Initiatives for Future Growth
Six months ago, I mentioned ourthereby securing more robust funds

focus on laying the groundwork forfor ensuring stable cash distribu-

future growth. Kenedix Officetions per unit.

Investment Corporation (KDO)

In internal growth, we havebegan to see the concrete results ofentered a phase of full-fledged inter-

these efforts take shape in the form

nal growth. In addition to the rise inof improved external growth, inter-

the actual occupancy rate in the

nal growth and financial manage-

22nd period, we are seeing a steadyment during the 22nd fiscal period,

rise in rent increases due to both

ended April 2016.

increases in rent upon tenant turn-

Turning first to external growth,
we continued to cautiously makeover and progress in upward rent
revisions with existing tenants.

select investments and an asset

With the steady rise in market

reshuffle in the 22nd fiscal period.

rents and thanks to the effects of

The property market remained over-proactive asset reshuffle, the num-

heated, but we were able to acquire

ber of lease contracts with our ten-two relatively new buildings inants at rent levels below market

excellent locations, both throughrents is growing. This means there

negotiated transactions. We also

are more opportunities to success-sold two older buildings for the

fully negotiate upward rent revi-

asset reshuffle.

sions. Accordingly, I’m seeing

As of the end of the 22nd fiscal
period, KDO’s asset size has grown
to 393.1 billion yen as a result of thegrowing favorability for full-fledged
internal growth.
In our financial strategy, we

asset reshuffle, while our total num-steadily advanced in terms of reduc-ber of properties held steady at 97.

ing interest expenses and extending

In addition, the appraisal profit

borrowings periods, and continued

increased even as the average age

stable financial management. Theseof the properties in our portfolio

efforts are bringing more robust

decreased. As such, KDO was ablefinancial stability and, in March

to improve the quality of its portfo-

2016, the outlook on our credit rat-lio. In addition, we increased

ing by Japan Credit Rating Agency,

retained earnings utilizing capitalLtd. (JCR) was changed from stable

gains from the property dispositions,to positive. We are now working to3

improve our rating from A+ to AA-.

207 yen higher than our March 2016

Furthermore, we issued ultra long-estimate of 10,500 yen per unit.

term investment corporation bonds

Distributions are growing steadilyin April 2016. The 12-year bonds

based on real performance, and wecarry an annual interest rate of justare approaching our goal, set a year

0.9% and proudly marked the first

ago, of distributions of 11,000 yen

issue of ultra long-term investment

per unit.

corporation bonds by a J-REIT withWe also set aside a 480 million

a single A-rating since the 2008

yen as reserve for reduction entry

financial crisis.

for retained earnings. We will utilize

The distribution per unit for thethis reserve to ensure distribution

22nd fiscal period was 10,707 yen,stability and its continuous growth.

Continue Select Investment and Asset Reshuffle to
Boost Profit Growth
To pursue external growth, we will

our steady efforts, revenue growthcontinue to make carefully selectis gaining momentum. Due toinvestments and asset reshuffles,

sequential expiry of free rent peri-

thereby improving the quality of ourods, we anticipate a rise in the actu-

portfolio. Given overheating in theal occupancy rate. In addition,

office building transaction market,

further increases in rents with new

there are few opportunities toand existing tenants will, in turn,acquire properties at justifiable pric-

contribute to revenue growth. Also,

es. We remain particularly wary of

we are planning property improve-

overpaying for assets. In the cir-ments as well as the renovations

cumstances, however, we will

and air conditioning system

strive to find promising property

upgrades carried out in the previous

acquisition deals meeting our crite-

fiscal period. By strategically making

ria by collaborating with the spon-

smart capital expenditure, we aim tosor company, engaging in mutual

accelerate internal growth.

transactions, and employing a variety of other methods.
To expand internal growth, we

4

In terms of financial strategy, we
will continue our policy of stablefinancial operations. While maintain-

are striving to increase rental

ing our loan-to-value (LTV) ratio at a

income. Thanks to the success ofconservative level, we will respondnimbly to property acquisition oppor-

that we can further reduce financing

tunities. Furthermore, as we still

costs though refinancing and otherhave some borrowings with relative-means, and will continue working toly high interest rates, we believe

bring down costs in this area.

Preparations for Future Market Changes
The environment for office buildings

and prepare for changes in the exter-

management is favorable. Whilenal environment.

external growth through new proper-

We seek to sustainably raise dis-ty acquisitions is difficult, current

tributions, and we will also work to

conditions allow us to reshuffle ourincrease the reserve for reduction

assets and realize capital gains onentry. In the future, this provision

the sales. Moreover, market rents

will, I believe, likely help position us

are continuing their steady rise.

to take advantage of even greater

Accordingly, rental income at existing

opportunities for investment in mid-properties is increasing, and we are

sized office buildings.

seeing full-fledged internal growth.

Going forward, KDO aspires to

At the same time, the Bank ofmeet the expectations of its inves-

Japan’s negative interest rate has

tors as the No. 1 owner of mid-sized

created additional room for lowering

office buildings and fulfill its social

interest expenses. Since this envi-

mission of promoting mid-sizedronment will not last forever, tooffice buildings with heightened

ensure stable distributions going for-environmental value through suchward, we will build up retained earn-

initiatives as reducing energy

ings while conditions are favorable

consumption.

5External Growth

Improved portfolio
quality throughasset reshuffle6

“Doing Our Utmost to Expand Asset Size and Raise Quality”
The Asset Investment Department, as a division

positions. I was responsible for property acquisi-that specializes in asset acquisition, is charged

tion at KDO, was involved with Kenedix

with expanding asset size and raising asset quality.

Residential Investment Corporation when it was

Although competition in the real estate market

listed, and have served as a director at an affiliat-

remains hot, we will remain flexible and nimble

ed company. In my new position as department

while considering asset reshuffles, investing

general manager, I intend to both leverage thiscarefully and maintaining the unique strengths

experience and take a fresh perspective. My mis-that have served KDO so well.

sion, based on our growth strategy, is to expand

In the ten years since I joined the Kenedix Group,

our asset size, and I will do all I can to ensure

I have gained experience in several leadership

success.

“External Growth in the 22nd Fiscal Period”
We continued to cautiously make select invest-

as a result of the asset reshuffle in the 22nd fis-ments and asset reshuffle in the 22nd fiscal peri-

cal period, though our total number of properties

od. The property market remained overheated,

held steady at 97. In addition, the appraisal profit

but we were able to acquire two relatively newincreased from 10.9 billion yen in the 21st fiscal

office buildings in excellent locations, Nittochi

period to 17.4 billion yen in the 22nd. The asset

Toranomon Building and Nichigin-mae KD

reshuffle also decreased the average age of the

Building, both through negotiated transactions.

properties in our portfolio, dropping from 22.5

We also sold KDX Toranomon Building andyears at the end of the 21st fiscal period to 21.2

Toranomon Toyo Building.

years at the end of the 22nd. In addition, we

Both of the disposed properties were old, with

were able to increase retained earnings utilizing

rent gaps that presented a risk of declining reve-

capital gains from the property dispositions.

nue. Built 53 years ago, Toranomon Toyo Building
was the oldest building in the portfolio. In contrast, Nittochi Toranomon Building is the newest
among our portfolio, and this acquisition brings
upward rent potential.
Therefore, our portfolio quality was improved
through mutual transaction in Toranomon, an areawith a significant growth potential due to redevelopment.
Nichigin-mae KD Building is also relatively new.
Like KDO’s three other Nagoya properties, thisbuilding is quite competitive, boasting good visibility on a main street. Moreover, we now have a
mid-sized office building in each of Nagoya’s
main business districts.
KDO’s asset size has grown to 393.1 billion yen

Akimitsu Uezu
General Manager,
Asset Investment Department,
Office REIT Division7

External Growth
Asset Reshuffle in 22nd Fiscal Period (Ended April 2016)
The portfolio quality improved through mutual transaction in Toranomon,
an area with a significant growth potential due to redevelopment.
Overview of asset reshuffle

Property acquisition

Property disposition

Aseet
reshuffle

Nittochi Toranomon Building

KDX Toranomon Building

Toranomon Toyo Building

Acquisition price

15,550 mn yen

Total disposition price

15,420 mn yen

Appraisal value at the time ofacquisition

16,300 mn yen

Total appraisal value at the time of acquisition

14,840 mn yen

95.4%

Total disposition price / Total appraisal value

103.9%

Acquisition price/ Appraisal value

Portfolio size expansion (Note 1)

Rejuvenation of average building age (Note 2)
Portfolio average building age: -1.7 years

Total acquisition price: +1,300mn yen

KDX Toranomon Bldg.: 27 years
Toranomon Toyo Bldg.: 53 years

Nittochi Toranomon Bldg.:
2 years

Increase in appraisal profit (Note 3)

Increase in retained earnings

Appraisal profit: +700mn yen

Gains from sales: 740mn yen
Reserve for reduction entry: +480mn yen

Map of property locations in Toranomon area
Tok
y

oM

Disposed property
東京倶楽部
ビルディング

hiy

oda

Lin

e

wa

n

Toranomon
station-front
district
Toranomon station
south district
Districtplanned
area

o
ich

omo

Tok
y

isai

Tora
n

KDX Toranomon Bldg.

Uch

Line
iya
etro

Hib
Rebuilding
main buildingof Hotel Okura Tokyo

New(Pla Statnn ioned)

BUREX
Toranomon

Tok
y

oM

Tranomon2 chomedistrictoC

Disposed property

Toranomon Toyo Bldg.

Akasaka
1 chomedistrict

etr

oM

etro

Gin

za L

ine

Acquired property
Nittochi Toranomon Bldg.

KDX
Shinbashi
Bldg.

Toranomon Hills

Note 1: Difference between the total acquisition price and the total disposition priceNote 2: Comparison between the weighted average building ages of the entire portfolio based on acquisition price, as of March 30 in 2016, before and after the said asset reshuffle(truncated to the first decimal place)
Note 3: Increase in appraisal profit/loss due to property transactions is calculated by adding the difference between the appraisal value as of the end of 22nd fiscal period (2016/4) andthe acquisition price of properties acquired and subtracting/adding the difference (appraisal profit/loss) between the appraisal value and the book value of the properties disposedof as of the end of 21st fiscal period (2015/10) (truncated to the nearest 100 million yen).

8

Properties Acquired in 22nd Fiscal Period (Ended April 2016)
Nittochi Toranomon Building• Located in an area with a significant growth potential where a new Hibiya Line station will
be constructed and multiple redevelopment projects are planned• A 2-year old building with latest specifications and a vibration control structure
Location

Minato-ku, Tokyo

Completion date

October, 2013

Gross floor area

11,212.05 m2

Occupancy rate at the time of acquisition(as of Mar. 30, 2016)

100%

Acquisition price

15,550 mn yen

Appraisal value at the time of acquisition

16,300 mn yen

NOI yield(Note1)

Transportation

3.8%

Appraisal NOI yield(Note2)

3.9%

About 3-minute walk from Toranomon Station (Tokyo Metro Ginza Line)
About 7-minute walk from Kasumigaseki Station (Tokyo Metro Hibiya/Chiyoda/Marunouchi Lines)
About 6-minute walk from Uchisaiwaicho Station (Toei Subway Mita Line)• Awarded the highest ratings from DBJ Green Building and CASBEE for its management/operation efforts to achieve superior environmental performance andenergy conservation

Nichigin-mae KD Building

Location

Nagoya, Aichi

Completion date

September, 2006

Gross floor area

5,862.22 m2

Occupancy rate at the time of acquisition(as of Mar. 30, 2016)

89.5%

Acquisition price3,500 mn yen

Appraisal value at the time of acquisition

3,750 mn yen

NOI yield (Note1)

4.9%

Appraisal NOI yield (Note2)

5.2%

Transportation

About 2-minute walk from Marunouchi Station (Municipal Subway Sakura-dori/Tsurumai Lines)
About 3-minute walk from Fushimi Station (Municipal Subway Higashiyama/Tsurumai Lines)• Located in the Fushimi area, widely recognized as a business district since long ago and accumulated with financial institutions andmajor corporations. Conveniently located within 2 minutes on foot from Marunouchi Station where Sakura-dori and Fushimi-dori• The shape of each rental floor is almost rectangular, free from pillars and can be divided into up to 4 spaces to meet diverse
tenant needs
Map of property locations in the major business districts of Nagoya
KDX Sakura-dori Bldg.
Marunouchi

Planned site as Nagoya new station for linear

KDX Nagoya Ekimae Bldg.
nter

oya

Nag

ya

oya
Nag tion
Sta

oya

Nag

Hisaya-odori

Sakaemachi

sai CeKoku

i Lineway Sakurador

pal Sub
Nagoya Munici
Marunouchi
Bank of Japan
Nagoya Branch

Nichigin-mae KD Bldg.
ashiyama Linepal Subway Hig

Nagoya Munici

Sakae

FushimiFushimiNagoyaway
Municipal Sub
Tsurumai LineKDX Nagoya Sakae Bldg.

Note 1: NOI yield is calculated by dividing the estimated NOI (based on the Asset Management Company’s estimate at the time of acquisition) by the acquisition price of the property,
rounded to the first decimal place.
Note 2: Appraisal NOI yield is calculated by dividing annualized net operating income (based on the direct capitalization method described in the relevant appraisal report at the time ofacquisition) by the acquisition price, rounded to the first decimal place.

9Internal Growth

Toward full-fledged
growth in rent
revenue throughbuilding solid results

10

“Fully Committed to Increasing Asset Value and Profitability”
The Asset Management Department formulates

faction. By doing so, we strive to increase theasset management plans, manages the budgets

occupancy rate and rental income.

and operating results of properties in the portfolio,

I personally have experience in building manage-

oversees construction and handles other aspects

ment, property management, as well as asset

of asset management.

management and acquisition. As department gen-

Asset management at the Investment Corporationeral manager, I will leverage my thorough knowl-places particular emphasis on tenant satisfaction.

edge of the office building business, from

Using more than ten years of knowhow in operat-

upstream to downstream, always rememberinging mid-sized office buildings, we implement mea-

our responsibility to effectively manage portfoliosures precisely tailored to tenant needs in order toassets as I do my utmost to increase asset value

offer office environments that achieve high satis-and profitability.

“Internal Growth in the 22nd Fiscal Period”
Mid-sized office buildings can pivot to meet

progress in leasing the upgraded property, whichchanges in the market. Their profitability is partic-

is now approaching full occupancy.

ularly responsive to good management. The

Lastly, we continue to make progress in reducing

numbers are now bearing this out, a testament

our exposure to our largest tenants. This helps

to the Investment Corporation’s management

stabilize future revenue. Our single biggest end

capabilities. Specifically, the actual occupancy

tenant accounted for only 1.2% of total leased

rate, which excludes free rent periods, rose 2.0

floor area, while the share of the top 10 end ten-percentage points to 92.5% for office buildings,

ants was down from 10.3% of total leased floor

while the occupancy rate, including free rent peri-

area at the end of the previous fiscal period toods, rose to 96.8% at the end of 22nd fiscal peri-

just 8.5% at the end of the 22nd fiscal period.

od. We are also making significant progress inupward rent revisions. Upon rent revisions withexisting tenants for office buildings, change inrent based on monthly rent increased by over 7
million yen. Furthermore, move-ins have exceeded move-outs in both numbers of tenants andleased area. With growing opportunities for
upward rent revisions and improving occupancyrate, we have built solid results toward fullfledged growth in rent revenue.
Moreover, we renovated KDX Iidabashi Square
between December 2015 and April 2016. We
applied our extensive knowhow to this full-building renovation. As a result, we are making steady

Chisei Kaji
General Manager,
Asset Management Department,
Office REIT Division11

Internal Growth
Further Increase in Rent Revenues due to Synergies of Actual Occupancy Rateand Rises in Rent per Unit
Occupancy rate performance of office buildings (Note)
Occupancy rate (contracted area based)

Actual occupancy rate (excl. free rent area)

(%)
100.0

Office properties:
Average occupancy rateduring fiscal period

23rd fiscal period
96.8% (estimate)
96.8

96.4
95.9
94.5
94.7

95.0

4.3%

3.5%
4.2%

3.8%
4.2%

92.9
91.7

92.5

91.6
90.5

90.0

Office properties: average occupancy rate during fiscal period
19th fiscal period
94.8%

20th fiscal period
95.9%

21st fiscal period
95.5%

22nd fiscal period
95.9%

85.0
End of 18th
fiscal period (2014/4)

End of 19th
fiscal period (2014/10)

End of 20th
fiscal period (2015/4)

End of 21stfiscal period (2015/10)

End of 22nd
fiscal period (2016/4)

Note: Occupancy rate (contracted area based) is calculated by dividing the contract based leased area by leasable area and actual occupancy rate (excl. free rent area) is calculatedby dividing the leased area subtracting the free rent area by leasable area. The figures are rounded to the first decimal place. Average occupancy rate of office buildings during
fiscal period is a simple average of month-end occupancy rates of owned office buildings during each period. Furthermore, the estimated average occupancy rate for 23rd fiscal period (2016/10) is the figure that is used as one of the assumptions in the earnings forecast.

Change in rent upon rent revisions(based on monthly rent) (Note)
Increase in rent

Decrease in rent

Status of rent revisions (based on leased area)

Increase in rent - Decrease in rent

(thousand yen)
10,000

8,000

7,770

6,000

7,134
4,570

4,000

2,000

3,502
1,176

21st
fiscal period(2015/10)
285

Increase (27)12.2%
Decrease (6)5.0%
No change (252)
82.8%

4,413

1,107

0

-636

-157

-2,000-2,395-4,000-3,350-4,527

Confirmed asof June 1, 2016

-6,00020th
fiscal period(2015/4)

21st
fiscal period(2015/10)

22nd
23rd
fiscal period fiscal period(2016/4)(2016/10)
onward confirmed

22ndfiscal period(2016/4)
309

Increase (48)18.1%
Decrease (4)1.2%

No change (257)80.7%

Note: Difference in monthly rent before and after rent revision, is calculated by aggregating the change amount per contract in each fiscal period. Figures are rounded to the nearest
thousand yen.

12Turnover by the number of tenants and leased area (Note)
Move-in area

Move-out area

Net leased area*# in brackets indicate # of tenants(tsubo)

(73)

8,000

7,941
6,000

(67)

(61)
5,042

5,004

(73)
4,991

(58)
4,590

4,000

2,000

0

-2,000-4,000-4,793(53)-4,209(56)-5,270(66)-6,000-5,209(55)-6,506(55)-8,00018th fiscal
period (2014/4)

19th fiscal
period (2014/10)

20th fiscal
period (2015/4)

21st fiscal
period (2015/10)

22nd fiscal
period (2016/4)

Note: The number of tenants and leased area are calculated based on floor. In case that an end-tenant move-out from/move-in to multiple floors, the number is counted by floor.

Status of KDX Iidabashi Square
Advance in leasing at better conditions with steady contribution of renovations
Implementation of renovation works
Change of leasing policies

BeforeAfter

Priority of leasing target changed from asingle tenant to multiple tenants
Prioritized negotiation with a candidate that wishedto occupy the whole building at first, but shifted ourpriority to leasing to multiple tenants in consideration
for the circumstances of the said candidate tenant,leasing conditions and the current market environment.

EV hall

Proactive leasing activities
Prepared a promotion video and held preview tours(participated by 44 companies, 109 people) for candidate tenants.

Rental floors

Effect of investment in renovation

Increase in NOI from theestimate at the time ofacquisition (Note 1)+42mn yen

Increase in NOI /Total investment (Note 2)

8.9%

Diversification of move-out risk

Estimated NOI
yield (Note 3)

5.2%

The number oftenants

1

4(contracted asof june 1, 2016)

Note 1: Difference between the NOI estimated by the Asset Management Company at the time of acquisition and the NOI assuming full occupancy. The said NOI assuming fulloccupancy is estimated based on the leasing terms and conditions contracted or described in the application forms; as regards the spaces currently under negotiation withcandidate tenants, based on the conditions under the negotiation.
Note 2: Calculated by dividing the incremental NOI estimated at the time of acquisition by the total investment (total renovation cost).
Note 3: Calculated by dividing the estimated NOI with the full occupancy, mentioned in Note 1, by the sum of the book value as of the end of the 22nd fiscal period (2016/4) and theestimated capex for construction works for tenant’s move-in as of June 1, 2016.

13

Financial Strategy
Reduced financial cost steadily while diversifying debt maturities and lengthening remaining period to maturity
Refinance record for 22nd fiscal period (2016/4)(Total of 18.8bn yen) (Note 2)

Average remaining period to maturity
and interest rate (Note 1)
Weighted average remaining period to maturity (right axis)
Weighted average interest rate (incl. up-front fee) (left axis)
(%)
2.00

(year)
5.0

1.77

1.80

4.0

Beforerefinancing

Afterrefinancing

Average interest rate

2.06%

0.88%

Average borrowing
period5.6 years

7.5 years

1.65
3.0

1.60

1.46

1.45
1.39
2.0

1.40

1.25
1.0

1.20

3.1
yrs

2.3
yrs

3.6
yrs

4.1
yrs

4.3
yrs

4.7
yrs
0

1.00
End of 17th End of 18th End of 19th End of 20th
fiscal period fiscal period fiscal period fiscal period(2013/10)(2014/4)(2014/10)(2015/4)

End of 21st End of 22nd
fiscal period fiscal period(2015/10)(2016/4)
Note 2: Average interest rate and borrowing period are weighted average
numbers of interest rate (including up-front fee) and borrowing period based on borrowing amount, respectively (rounded to the second/first decimal place).

Note 1: Average remaining period to maturity and interest rate are weighted averages based on
outstanding debts at the end of each fiscal period (Average remaining period to maturity and interest rate are rounded to the first and second decimal places respectively).

Diversification of debt maturities (as of the end of 22nd fiscal period (2016/4)) (Note 3)
Short-term borrowings (2.5bn yen)

Corporate bonds (9.3bn yen)

Long-term borrowings (163.3bn yen)

(bn yen)
20.0
Averageinterest
rate:
1.57%

Averageinterest
rate:
1.43%

Averageinterest
rate:
1.61%

Ultra long-term corporate bonds
issued in April 2016s )SSUED AMOUNT 1.0bn yens -ATURITY 12 yearss )NTEREST RATE 0.90%

15.0

1.0
1.5

1.5
10.0

1.8

3.0

2.0
5.0

12.5

7.2

11.0

8.2

8.5

7.5

6.2

8.5

10.1

9.5

11.8

9.9

7.1

3.8

4.5

3.7

6.0

8.3

8.5

10.3

1.0

0
23rd
24th
25th
26th
27th
28th
29th
30th
31st
32nd
33rd
34th
35th
36th
37th
38th
39th
40th
41st
42nd
fiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalfiscalperiodperiodperiodperiodperiod period
periodperiodperiodperiodperiod period
periodperiod period
periodperiodperiodperiodperiod(2016/10 (2017/4) (2017/10) (2018/4) (2018/10) (2019/4) (2019/10) (2020/4) (2020/10) (2021/4) (2021/10) (2022/4) (2022/10) (2023/4) (2023/10) (2024/4) (2024/10) (2025/4) (2025/10) (2026/4)

46th
fiscalperiod(2028/4)

Note 3: Average interest rate includes up-front fee.

Maintaining stable financial base by keeping conservative LTV and high fixed interest rate ratio
Historical LTV level (Note 4)

Credit rating (as of the end of 22nd fiscal
period (2016/4))

LTV• Rating outlook has changed from “stable” to“positive” on March 16, 2016

(%)
52.0

47.5

47.0

48.0

45.6

45.3
43.0

44.0

41.2
40.0

38.9

40.9

47.2

45.8

Long-term issuer rating:Rating outlook:
41.1

40.3

LTV
(based on
appraisal)

35.3
32.0

14

End of 4th
fiscal period(2007/4)

End of 7th
fiscal period(2008/10)

End of 10th
fiscal period(2010/4)

Positive

42.8

37.5

End of 1st
fiscal period(2005/10)

A+

42.8 42.8

38.7
36.0

Japan Credit Rating
Agency (JCR)

Rating agency:

46.2

41.1 40.9

41.4

48.4

End of 13th
fiscal period(2011/10)

End of 16th
fiscal period(2013/4)

End of 19th
fiscal period(2014/10)

End of 22nd
fiscal period(2016/4)

Note 4: LTV = the balance of Interest-bearing debt / Total assets, as of the end of relevant fiscal period(rounded to the first decimal place)Long-term fixed interest debt ratio(=Balance of long-term fixed interest rateborrowings and investment corporation
bonds / Total borrowings and investment
corporation bonds)

96.3 %

Business Results

Operating Revenues

Operating Income

14,362
12,92814,1306,102

million yen

13,74014,362

6,537

million yen

5,940

6,102

5,028

10,895

4,283

18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period
22nd fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)

18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period
22nd fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)

Net Income

Distributions per Unit

4,815

10,707

million yen

5,110

4,564

11,363

4,815

9,638

10,06010,300yen

10,707

3,569
2,885

18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period
22nd fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)

18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period
22nd fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)

Total Assets

Net Assets Ratio & Unitholders’ Equity

408,813355,167

388,169

407,799

million yen

407,217

408,813

52.0

%

47.9%

46.6%

170,109180,844

million yen

million yen

52.0%

52.0%

52.0%

211,951

211,914

212,555

million yen

million yen

million yen

18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period
22nd fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)

22nd fiscal period
18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)

LTV Ratio & Interest-Bearing Debt

Portfolio Occupancy Rate

42.8

%

47.2%

48.4%

167,746
million yen

42.8%

42.8%

42.8%

187,685

174,600

174,100

175,100

million yen

million yen

million yen

million yen

18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period
22nd fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)

96.9

%

96.0%

95.6%

96.5%

94.9%

96.9%

18th fiscal period
19th fiscal period
20th fiscal period
21st fiscal period
22nd fiscal period(Ended Apr. 30, 2014) (Ended Oct. 31, 2014) (Ended Apr. 30, 2015) (Ended Oct. 31, 2015) (Ended Apr. 30, 2016)15

Portfolio (As of April 30, 2016)
The properties acquired during the 22nd fiscal period are marked with red boxes.

No.

Property Name

Location

Acquisition
Price (mn yen)
<Note 1>

OfficeBuilding(TokyoMetropolitan
Area)

16

Year Built<Note 2>

Occupancy
Rate<Note 3>A-1

KDX Nihonbashi 313 Building

Chuo-ku, Tokyo

5,940

Apr. 1974

100.0%

A-3

Higashi-Kayabacho Yuraku Building

Chuo-ku, Tokyo

4,450

Jan. 1987

100.0%A-4

KDX Hatchobori Building

Chuo-ku, Tokyo

3,680

Jun. 1993

100.0%A-5

KDX Nakano-Sakaue Building

Nakano-ku, Tokyo

2,533

Aug. 1992

91.7%

A-6

Harajuku F.F. Building

Shibuya-ku, Tokyo

2,450

Nov. 1985

100.0%A-7

KDX Minami Aoyama Building

Minato-ku, Tokyo

2,270

Nov. 1988

100.0%

A-8

Kanda Kihara Building

Chiyoda-ku, Tokyo

1,950

May 1993

100.0%

A-13 KDX Kojimachi Building

Chiyoda-ku, Tokyo

5,950

May 1994

100.0%

A-14 KDX Funabashi Building

Funabashi, Chiba

2,252

Apr. 1989

100.0%

A-16 Toshin 24 Building

Yokohama, Kanagawa

5,300

Sep. 1984

100.0%

A-17 KDX Ebisu Building

Shibuya-ku, Tokyo

4,640

Jan. 1992

83.4%

A-19 KDX Hamamatsucho Building

Minato-ku, Tokyo

3,460

Sep. 1999

100.0%

A-20 KDX Kayabacho Building

Chuo-ku, Tokyo

2,780

Oct. 1987

100.0%

A-21 KDX Shinbashi Building

Minato-ku, Tokyo

3,728

Feb. 1992

100.0%

A-22 KDX Shin-Yokohama Building

Yokohama, Kanagawa

2,520

Sep. 1990

78.7%

A-26 KDX Kiba Building

Koto-ku, Tokyo

1,580

Oct. 1992

88.1%

A-27 KDX Kajicho Building

Chiyoda-ku, Tokyo

2,350

Mar. 1990

100.0%

A-29 KDX Higashi-Shinjuku Building

Shinjuku-ku, Tokyo

2,950

Jan. 1990

100.0%

A-30 KDX Nishi-Gotanda Building

Shinagawa-ku, Tokyo

4,200

Nov. 1992

47.4%

A-31 KDX Monzen-Nakacho Building

Koto-ku, Tokyo

1,400

Sep. 1986

100.0%

A-32 KDX Shiba-Daimon Building

Minato-ku, Tokyo

6,090

Jul. 1986

100.0%

A-33 KDX Okachimachi Building

Taito-ku, Tokyo

2,000

Jun. 1988

100.0%

A-34 KDX Hon-Atsugi Building

Atsugi, Kanagawa

1,305

May 1995

96.7%

A-35 KDX Hachioji Building

Hachioji, Tokyo

1,155

Dec. 1985

85.5%

A-37 KDX Ochanomizu Building

Chiyoda-ku, Tokyo

6,400

Aug. 1982

96.4%

A-38 KDX Nishi-Shinjuku Building

Shinjuku-ku, Tokyo

1,500

Oct. 1992

100.0%

A-41 KDX Shinjuku 286 Building

Shinjuku-ku, Tokyo

2,300

Aug. 1989

100.0%

A-45 KDX Roppongi 228 Building

Minato-ku, Tokyo

3,300

Apr. 1989

100.0%

A-46 Hiei Kudan-Kita Building

Chiyoda-ku, Tokyo

7,600

Mar. 1988

100.0%

A-47 KDX Shin-Yokohama 381 Building

Yokohama, Kanagawa

5,800

Mar. 1988

96.0%

A-48 KDX Kawasaki-Ekimae Hon-cho Building

Kawasaki, Kanagawa

3,760

Feb. 1985

100.0%

A-50 KDX Ikejiri-Oohashi Building

Meguro-ku, Tokyo

2,400

Sep. 1988

100.0%

A-51 KDX Hamacho Nakanohashi Building

Chuo-ku, Tokyo

2,310

Sep. 1988

100.0%

A-52 KDX Kanda Misaki-cho Building

Chiyoda-ku, Tokyo

1,380

Oct. 1992

100.0%

A-55 Shin-toshin Maruzen Building

Shinjuku-ku, Tokyo

2,110

Jul. 1990

100.0%

A-56 KDX Jimbocho Building

Chiyoda-ku, Tokyo

2,760

May 1994

100.0%

A-57 KDX Gobancho Building

Chiyoda-ku, Tokyo

1,951

Aug. 2000

100.0%

A-59 KDX Iwamoto-cho Building

Chiyoda-ku, Tokyo

1,864

Mar. 2008

100.0%

A-60 KDX Harumi Building

Chuo-ku, Tokyo

10,250Feb. 2008

93.2%

A-61 KDX Hamamatsucho Dai-2 Building

Minato-ku, Tokyo

2,200

Apr. 1992

100.0%

A-62 Koishikawa TG Building

Bunkyo-ku, Tokyo

3,080

Nov. 1989

100.0%

A-63 Gotanda TG Building

Shinagawa-ku, Tokyo

2,620

Apr. 1988

100.0%

A-64 KDX Nihonbashi 216 Building

Chuo-ku, Tokyo

2,010

Oct. 2006

100.0%

A-66 KDX Shinjuku Building

Shinjuku-ku, Tokyo

6,800

May 1993

98.3%

A-67 KDX Ginza 1chome Building

Chuo-ku, Tokyo

4,300

Nov. 1991

98.2%

A-68 KDX Nihonbashi Honcho Building

Chuo-ku, Tokyo

4,000

Jan. 1984

100.0%
100.0%

A-71 KDX Iidabashi Building

Shinjuku-ku, Tokyo

4,670

Mar. 1990

A-72 KDX Higashi-Shinagawa Building

Shinagawa-ku, Tokyo

4,590

Jan. 1993

88.4%

A-73 KDX Hakozaki Building

Chuo-ku, Tokyo

2,710

Nov. 1993

100.0%

A-74 KDX Shin-Nihonbashi Building

Chuo-ku, Tokyo

2,300

Nov. 2002

100.0%

A-75 KDX Nihonbashi Kabutocho Building

Chuo-ku, Tokyo

11,270Nov. 1998

100.0%

A-78 KDX Tachikawa Ekimae Building

Tachikawa, Tokyo

1,267

Feb. 1990

100.0%

A-83 KDX Fuchu Building

Fuchu, Tokyo

6,120

Mar. 1996

98.6%

A-84 KDX Kasuga Building

Bunkyo-ku, Tokyo

2,800

Jun. 1992

100.0%

A-85 KDX Nakameguro Building

Meguro-ku, Tokyo

1,880

Oct. 1985

85.5%

No.

Property Name

Location

Acquisition
Price (mn yen)
<Note 1>

OfficeBuilding(TokyoMetropolitan
Area)

OfficeBuilding(Other Regional
Areas)

Other

Occupancy
Rate<Note 3>

Saitama, Saitama

2,020

Apr. 1993

100.0%

A-87 Itopia Nihonbashi SA Building

Chuo-ku, Tokyo

2,200

Jul. 1995

100.0%

A-88 KDX Shinjuku 6-chome Building

Shinjuku-ku, Tokyo

1,900

Mar. 1990

100.0%

A-89 KDX Takanawadai Building

Minato-ku, Tokyo

5,250

Oct. 1985

94.0%
100.0%

A-90 KDX Ikebukuro Building

Toshima-ku, Tokyo

3,900

Mar. 2009

A-91 KDX Mita Building

Minato-ku, Tokyo

3,180

Mar. 1993

90.6%

A-92 KDX Akihabara Building

Chiyoda-ku, Tokyo

2,600

Dec. 1973

100.0%

A-93 KDX Iidabashi Square

Shinjuku-ku, Tokyo

4,350

Jan. 1994

47.7%

A-94 KDX Musashi-Kosugi Building

Kawasaki, Kanagawa

12,000

May 2013

100.0%

A-95 KDX Toyosu Grand Square (Note 4)

Koto-ku, Tokyo

8,666

Apr. 2008

100.0%

A-96 KDX Takadanobaba Building

Toshima-ku, Tokyo

3,650

Oct. 1988

93.1%

A-99 KDX Ikebukuro West Building

Toshima-ku, Tokyo

1,934

Jul. 1988

100.0%

A-101 KDX Yokohama Building

Yokohama, Kanagawa

7,210

Mar. 1994

98.5%

A-102 KDX Yokohama Nishiguchi Building

Yokohama, Kanagawa

2,750

Oct. 1988

100.0%

A-103 KDX Shin-Yokohama 214 Building

Yokohama, Kanagawa

2,200

Nov. 1989

95.6%

A-105 BUREX Toranomon

Minato-ku, Tokyo

1,750

Jul. 2011

100.0%

A-107 KDX Ginza East Building

Chuo-ku, Tokyo

3,600

Aug. 1991

100.0%

A-108 Pentel Building

Chuo-ku, Tokyo

3,350

Nov. 1990

94.9%

A-109 KDX Hamamatsucho Center Building

Minato-ku, Tokyo

3,950

Dec. 1985

100.0%

A-112 Nittochi Toranomon Building

Minato-ku, Tokyo

15,550Oct. 2013100.0%

A-12 Portus Center Building

Sakai, Osaka

5,570

Sep. 1993

97.3%

A-42 KDX Karasuma Building

Kyoto, Kyoto

5,400

Oct. 1982

99.3%

A-44 KDX Sendai Building

Sendai, Miyagi

2,100

Feb. 1984

100.0%

A-53 KDX Hakata-Minami Building

Fukuoka, Fukuoka

4,900

Jun. 1973

97.5%

A-54 KDX Kitahama Building

Osaka, Osaka

2,220

Jul. 1994

89.3%

A-58 KDX Nagoya Sakae Building

Nagoya, Aichi

7,550

Apr. 2009100.0%

A-69 KDX Kobayashi-Doshomachi Building

Osaka, Osaka

2,870

Jul. 2009100.0%

A-70 KDX Sapporo Building

Sapporo, Hokkaido

2,005

Oct. 1989

100.0%

A-79 KDX Nagoya Ekimae Building

Nagoya, Aichi

7,327

Apr. 1986

100.0%

A-82 KDX Higashi Umeda Building

Osaka, Osaka

2,770

Jul. 2009100.0%

A-97 KDX Utsunomiya Building

Utsunomiya, Tochigi

2,350

Feb. 1999

100.0%
90.5%

A-98 KDX Hiroshima Building

Hiroshima, Hiroshima

1,300

Jan. 1990

A-100 Senri Life Science Center Building

Toyonaka, Osaka

13,000Jun. 1992

95.7%

A-104 KDX Minami-Honmachi Building

Osaka, Osaka

2,200

Dec. 2009100.0%

A-106 KDX Sakura-dori Building

Nagoya, Aichi

5,900

Aug. 1992

98.2%

A-110 KDX Shin-Osaka Building

Osaka, Osaka

4,550

May 1992

100.0%

A-111 Nichigin-mae KD Building

Nagoya, Aichi

3,500

Sep. 2006

89.5%

362,758

Avg. 22.0 years

96.8%

C-1

Frame Jinnan-zaka

Shibuya-ku, Tokyo

9,900

Mar. 2005

95.5%

C-2

KDX Yoyogi Building

Shibuya-ku, Tokyo

2,479

Aug. 1991

100.0%

C-4

Ginza 4chome Tower

Chuo-ku, Tokyo

100.0%

9,800

Nov. 2008

22,179Avg. 10.9 years

98.2%

Chuo-ku, Tokyo

5,353

Jan. 2004

100.0%

5,353

Avg. 12.2 years

Shinjuku-ku, Tokyo

2,880

—

100.0%

2,880—

100.0%

Central Urban Retail Properties Subtotal (3 properties)

Residential
Property<Note 2>

A-86 KDX Omiya Building

Office Building Subtotal (92 properties)

Central Urban
RetailProperties

Year Built

B-19 Residence Charmante Tsukishima
Residential Property Subtotal (1 property)
D-2

Shinjuku 6chome Building (Land)

Other Subtotal (1 property)
Total (97 properties)

Investment Security

G.K. KRF 43 Silent Partnership Equity Interest

Shinjuku-ku, Tokyo

393,171

Avg. 21.2 years

1,107

Dec. 1979

100.0%

96.9%

Notes: 1. Acquisition price is only the acquisition (investment) price of the real estate or trust beneficiary interests, etc. (excl. any expenses, taxes, etc.) acquired by KDO.
2. Year built shows the completion date recorded in the land register. The average value shown in the subtotal or total section is a weighted average number calculated
based on acquisition price with a base date of April 30, 2016. Figures are truncated to the first decimal place.
3. Occupancy rate is calculated by dividing leased area as of April 30, 2016 by leasable area and is rounded to the first decimal place.
4. Acquisition price of KDX Toyosu Grand Square is calculated based on the 25% quasi co-ownership of the property.

17

Management Team(As of April 30, 2016)

2

3

4

1
5

1 Naokatsu Uchida

4 Hikaru Teramoto

Director and COO, General Manager of Office REIT Division

General Manager of Planning Dept., Office REIT Division• Worked for Mitsubishi UFJ Trust and Banking Corporation for approximately 17 years (Real Estate Division, Real Estate Project Origination
Division)• After working for Joint Asset Management Co., Ltd. as CEO, joined
Kenedix Office Partners, Inc. and was a member of the Financial
Planning Division for approximately two years• Appointed executive officer of Kenedix Office Investment Corp. (to thepresent) after serving as president of Kenedix Office Partners, Inc.
• Appointed Director and COO, General Manager of Office REIT Division
on October 1, 2013

• After working for Sakura Bank for six years, worked at Sakura
Securities, Daiwa Securities SMBC, and Goldman Sachs in investmentbanking business for ten years• Joined Kenedix Office Partners, Inc. after having worked for Goldman
Sachs Realty Japan• Appointed General Manager of Financial Planning Division, Kenedix
Office Partners, Inc. on August, 2012
• Appointed General Manager of Planning Dept., Office REIT Division on
October 1, 2013

2 Akimitsu Uezu
General Manager of Asset Investment Dept., Office REIT Division• Joined Investment Management Dept., Kenedix REIT Management,
Inc. in July 2006 and worked for 2 years after having engaged in realestate transactions at judicial scrivener’s office and real estate company• Appointed General Manager of Asset Investment Dept., Office REIT
Division on March 1, 2016 after having worked as General Manager ofAsset Investment Dept., Kenedix Residential Partners and Director ofSpace Design

3 Chisei Kaji

5 Tetsushi Ichikawa
General Manager of Finance & Accounting Dept.,
Business Administration Dept.
• Worked for Sumitomo Mitsui Trust Bank for 15 years (Engaged in realestate finance, etc.)• Joined Kenedix after having engaged in real estate investment banking
and having served as director responsible for asset management business at Touchstone Capital Securities• Appointed General Manager of Finance & Accounting Dept. on October
1, 2013 after serving as General Manager of Finance Group for Kenedix
Residential Partners• Appointed General Manager of Business Administration Dept. on April
1, 2015 (concurrent)

General Manager of Asset Management Dept., Office REIT Division• Worked for Mitsui Fudosan Building Management for 9 years (Sales
Division and others)• Joined Kenedix Real Estate Fund Management, Inc. after having
engaged in asset management for 10 years at Tokyo Realty Investment
Management Inc.
• Appointed General Manager of Asset Management Dept., Office REIT
Division on March 1, 2016 after having worked in Investment
Management Dept., Office REIT Division for 1 year

18

Organizational Changes
We have split “Investment Management Department” into “Asset
Investment Department” responsible for the asset investment business and “Asset Management Department” responsible for theasset management business on March 1, 2016, aiming to moreclearly define the duties of each department and establish a framework for faster decision making to bolster our investment and management capabilities.

Corporate Governance
Investment and Management Decision-making System
As the asset management company, Kenedix Real Estate Fund Management (KFM) creates guidelines governing ourasset management. These asset management guidelines define our investment policy, rules concerning transactions
with related parties, distribution policy and disclosure policy.
The structure of the decision-making process is outlined below.

Decision-making Process

Proposal

Deliberation
andResolution

Preview

Deliberation
andResolution

Deliberation
andResolution

Report1
2

Office REIT
Division

Compliance
OfficerCompliance
Committee

341(Note 1),2
1,2,3,4The Investment
Corporation’s
Board of Directors

KDO Asset
Management
Committee

3, 4

Board ofDirectors(Note 2)

5 Acquisition and sale

1: Related-party Transaction (acquisition and sale)
2: Establishing and revising asset management plans

3: Establishing and revising management guidelines
4: Transaction the Compliance Officer judges as the need and one outside management guidelines(Notes 1) In case that the said transaction falls under the prescribed minor transaction, the said transaction is implemented with the resolution of approval of KDO AssetManagement Committee, without requirement of the resolution for approval of the Investment Corporation’s Board of Directors and the consent of the Executive
Director of the Investment Corporation based on the said resolution.
(Notes 2) The above 3 and 4 are also reported to the Investment Corporation’s Board of Directors.

Environmental Initiatives
KFM undertakes investment management operations in accordance with the following environmental policies.
Environmental Policies
1. Compliance with Environmental Laws and Regulations
KFM will promote environment-friendly investment management
operations by adhering to environmental laws and regulations.
2. Promotion of Energy Conservation Measures
KFM will systematically advance energy conservation measuresat its managed properties, maintaining a strong awareness of
the importance of natural and energy resources.

4. Disclosure of Environmental Information
KFM will work to disclose necessary information to a variety ofconcerned parties including investors, tenants and business partners, in such areas as its environmental policies and measures.
5. Environmental Education
KFM will take steps to improve the environmental consciousnessof its officers and employees through internal education.

3. Reduction of Environmental Burden
KFM will undertake initiatives to reduce CO2 and waste emissions as well as promote recycling at its managed properties,
underscoring its commitment to alleviating its environmental
burden. In addition, KFM will take sufficient care when handlingharmful substances and environmental pollutants.

Thanks to continuous efforts, we have won a range of certifications, including the highest ranked Green Star rating from the Global Real Estate
Sustainability Benchmark (GRESB) surveys for four consecutive years.

19

Financial Section
Contents
Independent Auditor’s Report

K

Balance Sheets

L

Statements of Income and Retained Earnings

M

Statements of Changes in Net Assets

M

Statements of Cash FlowsN

Notes to Financial Statements

O

Financial Summary (Unaudited)
Historical Operating Trends
For the 18th–22nd Fiscal Periods
Unit

18th Period(as of Apr. 30, 2014)

Operating revenues

mn yen10,895

12,92814,13013,74014,362(Rental revenues)

mn yen10,33011,295

12,836

13,226

12,812

Operating expenses

mn yen

6,611

7,899

7,593

7,800

8,260

(Property-related expenses)

mn yen

5,047

5,557

6,377

6,668

6,533

Operating income

mn yen

4,283

5,028

6,537

5,940

6,102

Ordinary income

mn yen

2,887

3,570

5,111

4,565

4,816

Net income (a)mn yen

2,885

3,569

5,110

4,564

4,815

Total assets (b)mn yen355,167

388,169

407,799407,217

408,813

Period(Period-on-period change)

Interest-bearing debt (c)%mn yen(Period-on-period change)%

Unitholders’ equity (d)mn yen(Period-on-period change)%

Unitholders’ capitalmn yen(Period-on-period change)

Number of investment units issued andoutstanding (e)Unitholders’ equity per unit (d)/(e)19th Period(as of Oct. 31, 2014)

20th Period(as of Apr. 30, 2015)

21st Period(as of Oct. 31, 2015)

22nd Period(as of Apr. 30, 2016)(+12.1)(+9.3)(+5.1)(–0.1)(+0.4)

167,746

187,685

174,600

174,100

175,100(+11.4)(+11.9)(-7.0)(–0.3)(+0.6)

170,109180,844

211,951

211,914

212,555(+12.8)(+6.3)(+17.2)(–0.0)(+0.3)

166,261

176,632

206,199

206,199

206,199%(+13.0)(+6.2)(+16.7)

(0.0)

(0.0)

unit

332,540

355,010404,885

404,885

404,885
524,977yen

511,546

509,407523,484

523,394mn yen

3,205

3,571

4,600

4,170

4,335

yen

9,638

10,06011,363

10,30010,707(Earnings distributed per unit)

yen

9,638

10,06011,363

10,30010,707(Distribution in excess of earnings per unit)

yen

—

—

—

—

—

Return on assets (annualized) (Notes 1 and 2)%

0.9 (1.7)

1.0 (1.9)

1.3 (2.6)

1.1 (2.2)

1.2 (2.4)

Return on net assets (annualized) (Notes 2 and 3)%

1.8 (3.6)

2.0 (4.0)

2.6 (5.2)

2.2 (4.3)

2.3 (4.6)

47.9

46.6

52.0

52.0

52.0

(+0.3)(-1.3)(+5.4)(+0.1)(-0.0)

47.2

48.4

42.8

42.8

42.8

Total distribution (f)Distribution per unit (f)/(e)Net assets ratio at end of period (d)/(b)(Period-on-period change)

Interest-bearing debt ratio at end of period (c)/(b)(Period-on-period change)

Payout ratio (Note 4) (f)/(a)%%%(-0.3)(+1.1)(-5.5)(–0.1)(+0.1)

111.0

100.0

90.0

91.3

90.0

Other references
Number of properties

properties

Total leasable floor aream2

Occupancy ratio at end of period

89

94

97

97

97

386,659.01

437,233.24

453,999.44

453,681.06

457,774.90

%

96.0

95.6

96.5

94.9

96.9

Depreciation expenses for the period

mn yen

1,826

2,022

2,221

2,218

2,230

Capital expenditures for the period

mn yen

711

550

329

469

1,120

Leasing NOI (Net Operating Income) (Note 5)

mn yen

7,109

7,760

8,680

8,775

8,509

FFO (Funds From Operation) (Note 6)

mn yen

5,031

7,116

6,909

6,487

6,302

yen

15,13020,045

17,06516,023

15,565

FFO per unit (Note 7)

Notes: 1. Return on assets = Ordinary income/{(Total assets at beginning of period + Total assets at end of period)/2} × 100
2. Annualized values for the 18th Fiscal Period are calculated based on a period of 181 days, 184 days for the 19th Fiscal Period,
181 days for the 20th Fiscal Period, 184 days for the 21st Fiscal Period, 182 days for the 22nd Fiscal Period.
3. Return on net assets = Net income/{(Total net assets at beginning of period + Total net assets at end of period)/2} × 100
4. Payout ratio is rounded down to the first decimal place.
5. Leasing NOI = Rental revenues – Rental expenses + Depreciation expenses for the period
6 FFO = Net income + Depreciation expenses for the period – Gain on sale of real estate property + Loss on sale of real estate property
7. FFO per unit = FFO/Number of investment units issued and outstanding (figures below ¥1 rounded down)
8. Where applicable, figures are rounded down to the nearest million.

20

21

Financial Section
Contents
Independent Auditor’s Report

K

Balance Sheets

L

Statements of Income and Retained Earnings

M

Statements of Changes in Net Assets

M

Statements of Cash FlowsN

Notes to Financial Statements

O

Financial Summary (Unaudited)
Historical Operating Trends
For the 18th–22nd Fiscal Periods
Unit

18th Period(as of Apr. 30, 2014)

Operating revenues

mn yen10,895

12,92814,13013,74014,362(Rental revenues)

mn yen10,33011,295

12,836

13,226

12,812

Operating expenses

mn yen

6,611

7,899

7,593

7,800

8,260

(Property-related expenses)

mn yen

5,047

5,557

6,377

6,668

6,533

Operating income

mn yen

4,283

5,028

6,537

5,940

6,102

Ordinary income

mn yen

2,887

3,570

5,111

4,565

4,816

Net income (a)mn yen

2,885

3,569

5,110

4,564

4,815

Total assets (b)mn yen355,167

388,169

407,799407,217

408,813

Period(Period-on-period change)

Interest-bearing debt (c)%mn yen(Period-on-period change)%

Unitholders’ equity (d)mn yen(Period-on-period change)%

Unitholders’ capitalmn yen(Period-on-period change)

Number of investment units issued andoutstanding (e)Unitholders’ equity per unit (d)/(e)19th Period(as of Oct. 31, 2014)

20th Period(as of Apr. 30, 2015)

21st Period(as of Oct. 31, 2015)

22nd Period(as of Apr. 30, 2016)(+12.1)(+9.3)(+5.1)(–0.1)(+0.4)

167,746

187,685

174,600

174,100

175,100(+11.4)(+11.9)(-7.0)(–0.3)(+0.6)

170,109180,844

211,951

211,914

212,555(+12.8)(+6.3)(+17.2)(–0.0)(+0.3)

166,261

176,632

206,199

206,199

206,199%(+13.0)(+6.2)(+16.7)

(0.0)

(0.0)

unit

332,540

355,010404,885

404,885

404,885
524,977yen

511,546

509,407523,484

523,394mn yen

3,205

3,571

4,600

4,170

4,335

yen

9,638

10,06011,363

10,30010,707(Earnings distributed per unit)

yen

9,638

10,06011,363

10,30010,707(Distribution in excess of earnings per unit)

yen

—

—

—

—

—

Return on assets (annualized) (Notes 1 and 2)%

0.9 (1.7)

1.0 (1.9)

1.3 (2.6)

1.1 (2.2)

1.2 (2.4)

Return on net assets (annualized) (Notes 2 and 3)%

1.8 (3.6)

2.0 (4.0)

2.6 (5.2)

2.2 (4.3)

2.3 (4.6)

47.9

46.6

52.0

52.0

52.0

(+0.3)(-1.3)(+5.4)(+0.1)(-0.0)

47.2

48.4

42.8

42.8

42.8

Total distribution (f)Distribution per unit (f)/(e)Net assets ratio at end of period (d)/(b)(Period-on-period change)

Interest-bearing debt ratio at end of period (c)/(b)(Period-on-period change)

Payout ratio (Note 4) (f)/(a)%%%(-0.3)(+1.1)(-5.5)(–0.1)(+0.1)

111.0

100.0

90.0

91.3

90.0

Other references
Number of properties

properties

Total leasable floor aream2

Occupancy ratio at end of period

89

94

97

97

97

386,659.01

437,233.24

453,999.44

453,681.06

457,774.90

%

96.0

95.6

96.5

94.9

96.9

Depreciation expenses for the period

mn yen

1,826

2,022

2,221

2,218

2,230

Capital expenditures for the period

mn yen

711

550

329

469

1,120

Leasing NOI (Net Operating Income) (Note 5)

mn yen

7,109

7,760

8,680

8,775

8,509

FFO (Funds From Operation) (Note 6)

mn yen

5,031

7,116

6,909

6,487

6,302

yen

15,13020,045

17,06516,023

15,565

FFO per unit (Note 7)

Notes: 1. Return on assets = Ordinary income/{(Total assets at beginning of period + Total assets at end of period)/2} × 100
2. Annualized values for the 18th Fiscal Period are calculated based on a period of 181 days, 184 days for the 19th Fiscal Period,
181 days for the 20th Fiscal Period, 184 days for the 21st Fiscal Period, 182 days for the 22nd Fiscal Period.
3. Return on net assets = Net income/{(Total net assets at beginning of period + Total net assets at end of period)/2} × 100
4. Payout ratio is rounded down to the first decimal place.
5. Leasing NOI = Rental revenues – Rental expenses + Depreciation expenses for the period
6 FFO = Net income + Depreciation expenses for the period – Gain on sale of real estate property + Loss on sale of real estate property
7. FFO per unit = FFO/Number of investment units issued and outstanding (figures below ¥1 rounded down)
8. Where applicable, figures are rounded down to the nearest million.

20

21

Balance Sheets

Statements of Income and Retained Earnings

Kenedix Office Investment Corporation
As of April 30, 2016 and October 31, 2015

Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015
In thousands of yen

In thousands of yen

ASSETS
Current assets:
Cash and bank deposits (Notes 3 and 13)
Rental receivables
Consumption tax refundable
Other current assets (Note 8)
Total current assets
Property and equipment, at cost: (Notes 4 and 15)
Land
Buildings and structures (Note 6)
Machinery and equipment
Tools, furniture and fixtures
Less-accumulated depreciation
Net property and equipment
Other assets:
Ground leasehold (Note 15)
Investment securities (Note 13)
Corporate bond issuance costs
Unit issuance costs
Other assets (Note 15)
Total assets
LIABILITIES AND NET ASSETS
Liabilities
Current liabilities:
Trade and other payables
Short-term debt and current portion of long-term debt (Notes 5 and 13)
Current portion of corporate bonds (Notes 5 and 13)
Deposits received
Rents received in advance
Other current liabilities
Total current liabilities
Non-current liabilities:
Corporate bonds (Notes 5 and 13)
Long-term debt (Notes 5 and 13)
Leasehold and security deposits received
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net Assets
Unitholders’ equity
Unitholders’ capital
Units authorized: 2,000,000 units
Units issued and outstanding:404,885 units
As of April 30, 2016 and October 31, 2015, respectively
Surplus
Voluntary retained earnings
Reserve for reduction entry
Retained earnings
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Note 14)
Total valuation and translation adjustments
Total net assets (Note 9)
Total liabilities and net assets
See accompanying notes to the financial statements.

22

As of April 30, 2016

As of October 31, 2015

¥ 20,602,996
341,787
53,57859,744
21,058,105¥ 22,587,773
338,287—
97,212
23,023,272

273,049,253
136,422,576
2,041,893
514,082(27,295,009)
384,732,795

271,537,963
132,688,163
1,905,006
503,925(25,521,651)
381,113,406

352,460
1,089,761
42,378110,641
1,427,315¥408,813,455

353,234
1,100,235
34,102
167,122
1,426,091¥407,217,462¥¥

1,170,894
22,200,000
3,000,000
54,1602,115,825
91,25728,632,136

6,300,000
143,600,000
17,721,596
4,328
167,625,924¥196,258,060

1,372,165
33,300,000—
46,8401,958,661
497,937
37,175,603

Operating revenues:
Rental revenues (Note 11)
Gain on sale of real estate property (Note 11)
Dividends income
Total operating revenues
Operating expenses:
Property-related expenses (Note 11)
Loss on sale of real estate property (Note 11)
Asset management fees
Administrative service and custodian fees
Other operating expenses
Total operating expenses
Operating income
Non-operating expenses:
Interest expense
Financing-related expenses
Amortization of unit issuance costs
Amortization of corporate bond issuance costs
Others, net
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes (Note 8)
Net income
Retained earnings at the end of period

1,544,522
4,815,255
6,359,777
212,559,723

1,150,495
4,564,342
5,714,837
211,914,783(4,328)(4,328)
212,555,395¥408,813,455——
211,914,783¥407,217,462¥12,812,029
1,510,169
40,015
14,362,213¥13,226,032
461,366
53,27813,740,676

6,533,203
766,005
759,990
78,413
122,520
8,260,131
6,102,082

6,668,992
165,691753,00378,538134,2237,800,447
5,940,229

993,892
183,756
56,481
5,263
46,171
1,285,563
4,816,519
4,816,519
1,264
4,815,255¥ 4,815,255

1,058,112
220,018
56,481
5,312
34,701
1,374,624
4,565,605
4,565,605
1,263
4,564,342¥ 4,564,342

Statements of Changes in Net Assets
Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015

8,300,000
132,500,000
17,327,076—
158,127,076¥195,302,679

206,199,946

From May 1, 2015
to October 31, 2015

See accompanying notes to the financial statements.

In thousands of yen
Valuation andtranslation
adjustments

Unitholders’ equity
Surplus
Voluntary retained
earnings
Unitholders’capital206,199,946

From November 1, 2015
to April 30, 2016

Balance as of April 30, 2015
Changes during the fiscal period
Provision of reserve for reduction entry
Payments of dividends
Net income
Total changes during the fiscal period
Balance as of October 31, 2015
Changes during the fiscal period
Provision of reserve for reduction entry
Payments of dividends
Net income
Net changes of items other thanunitholder’s equity
Total changes during the fiscal period
Balance as of April 30, 2016

Reserve for
reduction entry

Retainedearnings

Total
surplusTotal
unitholders’equityDeferred gains
or losses onhedgesTotal¥206,199,946¥640,811¥5,110,392¥5,751,203 ¥211,951,149 ¥— ¥211,951,149————¥206,199,946

509,684——
509,684¥1,150,495(509,684)(4,600,708)
4,564,342(546,050)¥4,564,342——(4,600,708)(4,600,708)
4,564,342
4,564,342(36,366)(36,366)¥5,714,837 ¥211,914,783 ¥———(4,600,708)—
4,564,342—(36,366)— ¥211,914,783———

394,027——(394,027)(4,170,315)
4,815,255—(4,170,315)
4,815,255

—
—
—

—
—
¥206,199,946—
394,027¥1,544,522—
250,913¥4,815,255——
644,940
644,940¥6,359,777 ¥212,559,723—(4,170,315)
4,815,255—(4,170,315)
4,815,255(4,328)(4,328)(4,328)640,612¥(4,328) ¥212,555,395

See accompanying notes to the financial statements.

23

Balance Sheets

Statements of Income and Retained Earnings

Kenedix Office Investment Corporation
As of April 30, 2016 and October 31, 2015

Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015
In thousands of yen

In thousands of yen

ASSETS
Current assets:
Cash and bank deposits (Notes 3 and 13)
Rental receivables
Consumption tax refundable
Other current assets (Note 8)
Total current assets
Property and equipment, at cost: (Notes 4 and 15)
Land
Buildings and structures (Note 6)
Machinery and equipment
Tools, furniture and fixtures
Less-accumulated depreciation
Net property and equipment
Other assets:
Ground leasehold (Note 15)
Investment securities (Note 13)
Corporate bond issuance costs
Unit issuance costs
Other assets (Note 15)
Total assets
LIABILITIES AND NET ASSETS
Liabilities
Current liabilities:
Trade and other payables
Short-term debt and current portion of long-term debt (Notes 5 and 13)
Current portion of corporate bonds (Notes 5 and 13)
Deposits received
Rents received in advance
Other current liabilities
Total current liabilities
Non-current liabilities:
Corporate bonds (Notes 5 and 13)
Long-term debt (Notes 5 and 13)
Leasehold and security deposits received
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net Assets
Unitholders’ equity
Unitholders’ capital
Units authorized: 2,000,000 units
Units issued and outstanding:404,885 units
As of April 30, 2016 and October 31, 2015, respectively
Surplus
Voluntary retained earnings
Reserve for reduction entry
Retained earnings
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Note 14)
Total valuation and translation adjustments
Total net assets (Note 9)
Total liabilities and net assets
See accompanying notes to the financial statements.

22

As of April 30, 2016

As of October 31, 2015

¥ 20,602,996
341,787
53,57859,744
21,058,105¥ 22,587,773
338,287—
97,212
23,023,272

273,049,253
136,422,576
2,041,893
514,082(27,295,009)
384,732,795

271,537,963
132,688,163
1,905,006
503,925(25,521,651)
381,113,406

352,460
1,089,761
42,378110,641
1,427,315¥408,813,455

353,234
1,100,235
34,102
167,122
1,426,091¥407,217,462¥¥

1,170,894
22,200,000
3,000,000
54,1602,115,825
91,25728,632,136

6,300,000
143,600,000
17,721,596
4,328
167,625,924¥196,258,060

1,372,165
33,300,000—
46,8401,958,661
497,937
37,175,603

Operating revenues:
Rental revenues (Note 11)
Gain on sale of real estate property (Note 11)
Dividends income
Total operating revenues
Operating expenses:
Property-related expenses (Note 11)
Loss on sale of real estate property (Note 11)
Asset management fees
Administrative service and custodian fees
Other operating expenses
Total operating expenses
Operating income
Non-operating expenses:
Interest expense
Financing-related expenses
Amortization of unit issuance costs
Amortization of corporate bond issuance costs
Others, net
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes (Note 8)
Net income
Retained earnings at the end of period

1,544,522
4,815,255
6,359,777
212,559,723

1,150,495
4,564,342
5,714,837
211,914,783(4,328)(4,328)
212,555,395¥408,813,455——
211,914,783¥407,217,462¥12,812,029
1,510,169
40,015
14,362,213¥13,226,032
461,366
53,27813,740,676

6,533,203
766,005
759,990
78,413
122,520
8,260,131
6,102,082

6,668,992
165,691753,00378,538134,2237,800,447
5,940,229

993,892
183,756
56,481
5,263
46,171
1,285,563
4,816,519
4,816,519
1,264
4,815,255¥ 4,815,255

1,058,112
220,018
56,481
5,312
34,701
1,374,624
4,565,605
4,565,605
1,263
4,564,342¥ 4,564,342

Statements of Changes in Net Assets
Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015

8,300,000
132,500,000
17,327,076—
158,127,076¥195,302,679

206,199,946

From May 1, 2015
to October 31, 2015

See accompanying notes to the financial statements.

In thousands of yen
Valuation andtranslation
adjustments

Unitholders’ equity
Surplus
Voluntary retained
earnings
Unitholders’capital206,199,946

From November 1, 2015
to April 30, 2016

Balance as of April 30, 2015
Changes during the fiscal period
Provision of reserve for reduction entry
Payments of dividends
Net income
Total changes during the fiscal period
Balance as of October 31, 2015
Changes during the fiscal period
Provision of reserve for reduction entry
Payments of dividends
Net income
Net changes of items other thanunitholder’s equity
Total changes during the fiscal period
Balance as of April 30, 2016

Reserve for
reduction entry

Retainedearnings

Total
surplusTotal
unitholders’equityDeferred gains
or losses onhedgesTotal¥206,199,946¥640,811¥5,110,392¥5,751,203 ¥211,951,149 ¥— ¥211,951,149————¥206,199,946

509,684——
509,684¥1,150,495(509,684)(4,600,708)
4,564,342(546,050)¥4,564,342——(4,600,708)(4,600,708)
4,564,342
4,564,342(36,366)(36,366)¥5,714,837 ¥211,914,783 ¥———(4,600,708)—
4,564,342—(36,366)— ¥211,914,783———

394,027——(394,027)(4,170,315)
4,815,255—(4,170,315)
4,815,255

—
—
—

—
—
¥206,199,946—
394,027¥1,544,522—
250,913¥4,815,255——
644,940
644,940¥6,359,777 ¥212,559,723—(4,170,315)
4,815,255—(4,170,315)
4,815,255(4,328)(4,328)(4,328)640,612¥(4,328) ¥212,555,395

See accompanying notes to the financial statements.

23

Statements of Cash Flows

Notes to Financial Statements

Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015

Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015
In thousands of yen

From November 1, 2015
to April 30, 2016

From May 1, 2015
to October 31, 2015

¥ 4,816,519¥ 4,565,605

2,470,695

2,494,805

CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes
Adjustments to reconcile income before income taxes to
net cash provided by (used in) operating activities:
Depreciation and amortization
Interest income

(697)

(738)

Interest expense

993,892

1,058,112

Rental receivables(3,500)(16,372)

Consumption tax refundable(53,578)—

Accrued consumption tax(407,556)

159,196

Trade and other payables(203,532)

41,052

Rents received in advance

157,163(149,339)

14,591,896

5,309,142

Changes in assets and liabilities:

Property and equipment due to sale
Others, net(123,666)(145,670)

Subtotal

22,237,636

13,315,793

Interest income received
Cash payments of interest expense
Cash payments of income taxes
Net cash provided by (used in) operating activities

697

738

(989,130)(1,070,731)

(869)

(925)

21,248,334

12,244,875(20,403,242)(9,078,473)(5,913)—

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
Purchase of intangible assets
Proceeds from leasehold and security deposits received

1,851,210

1,100,651

Payments of leasehold and security deposits received(1,496,099)(1,180,848)(600,262)(59,130)—

108,411(20,654,306)(9,109,389)

Payments of restricted bank deposits
Proceeds from restricted bank deposits
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt

1,500,000

1,000,000

Payments of short-term debt

(1,500,000)(1,500,000)

Proceeds from long-term debt

18,300,000

14,500,000

Payments of long-term debt

(18,300,000)(14,500,000)

Proceeds from issuance of corporate bonds

990,472—

Payment of dividends(4,169,538)(4,599,589)

Net cash provided by (used in) financing activities(3,179,066)(5,099,589)

Net change in cash and cash equivalents(2,585,038)(1,964,103)

Cash and cash equivalents at the beginning of period

21,760,581

23,724,684¥ 19,175,543¥ 21,760,581

Cash and cash equivalents at the end of period (Note3)
See accompanying notes to the financial statements.

1.

ORGANIZATION AND BASIS OF PRESENTATIONORGANIZATION
Kenedix Office Investment Corporation (“the Investment Corporation”) is a real estate investment corporation whose units are listed on theTokyo Stock Exchange. The Investment Corporation is engaged in ownership and operation of selected office buildings, residential and retailproperties in Japan, with a focus on mid-sized office buildings in the Tokyo Metropolitan Area. The Investment Corporation was incorporated on
May 6, 2005 as an investment corporation under the Law Concerning Investment Trusts and Investment Corporations of Japan, or the Investment
Trust Law. On July 21, 2005, the Investment Corporation was listed on the Real Estate Investment Trust Market of the Tokyo Stock Exchange witha total of 75,400 investment units issued and outstanding (Securities Code: 8972). Subsequently, the Investment Corporation raised funds
through seven public offerings and other means including global offerings. Pursuant to the Investment Trust Law, the Investment Corporation isexternally managed by a registered asset management company, Kenedix Real Estate Fund Management, Inc. (“the Asset Management
Company”), a subsidiary of Kenedix, Inc. (“Kenedix”). In concert with the Asset Management Company, the Investment Corporation strives tomaximize cash distribution to investors by securing stable earnings and sustainable investment growth. To this end, the Investment Corporation
adopts a dynamic and flexible investment stance that accurately reflects its environment and market trends, and endeavors to ensure a timely
response to each and every opportunity.
During the period ended October 31, 2015, the Investment Corporation acquired one office building (Hamamatsucho Center Building: acquisition price of ¥3,950 million) located in the Tokyo Metropolitan Area, one office building (Shin Osaka Center Building: acquisition price of ¥4,550
million ) located in Other Regional Areas, and sold Nagoya Nikko Shoken Building (initial acquisition price of ¥4,158 million) and KDX Nogizaka
Building (initial acquisition price of ¥1,065 million) (with a total combined disposition price of ¥5,760 million).
During the period ended April 30, 2016, the Investment Corporation acquired one office buildings (Nittochi Toranomon Building: acquisition
price of ¥15,550 million) located in the Tokyo Metropolitan Area, one office building (Nichigin-mae KD Building: acquisition price of ¥3,500 million ) located in Other Regional Areas, and sold KDX Toranomon Building (initial acquisition price of ¥4,400 million) and Toranomon Toyo Building(initial acquisition price of ¥9,850 million) (with a total combined disposition price of ¥15,420 million).
At the end of the twenty-first and twenty-second fiscal periods, the Investment Corporation had total unitholders’ capital of ¥206,200 million
with 404,885 investment units outstanding, respectively. The Investment Corporation owned a portfolio of 97 properties (consisting of 92 officebuildings, one residential property, three central urban retail properties and one other property) with total acquisition prices of ¥388,371 millionand ¥393,171 million at the end of the twenty-first and twenty-second fiscal periods, respectively. The occupancy ratios were approximately
94.9% and 96.9% at the end of the twenty-first and twenty-second fiscal periods, respectively.

BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust Act of Japan, theFinancial Instruments and Exchange Law of Japan and related regulations, and in conformity with accounting principles and practices generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the application and disclosure requirements of theInternational Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The accompanying financial statements are basically a translation of the audited financial statements that were prepared for Japanese domestic
purposes from the accounts and records maintained by the Investment Corporation and filed with the Kanto Local Finance Bureau of the Ministryof Finance as required by the Financial Instruments and Exchange Law. In preparing the accompanying financial statements, relevant notes havebeen added and certain reclassifications have been made to the financial statements issued domestically in order to present them in a form that ismore familiar to readers outside Japan. The Investment Corporation’s fiscal period is a six-month period that ends at the end of April and the endof October each year. The Investment Corporation does not prepare consolidated financial statements because it has no subsidiaries.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) SECURITIESNon-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.
Concerning silent partnership (tokumei kumiai, “TK”) interests, the method of incorporating the amount of equity equivalent to the portion that
corresponds to the net gain or loss of the TK is adopted.

(B) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation of property and equipment is calculated on a straight-line basis over the estimated useful
lives of the assets ranging as stated below:

24

From November 1, 2015 to April 30, 2016

From May 1, 2015 to October 31, 2015

Buildings and structures

2-49 years

2-49 years

Machinery and equipment

3-17 years

3-17 years

Tools, furniture and fixtures

3-20 years

3-20 years

25Statements of Cash Flows

Notes to Financial Statements

Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015

Kenedix Office Investment Corporation
For the period from November 1, 2015 to April 30, 2016 and the period from May 1, 2015 to October 31, 2015
In thousands of yen

From November 1, 2015
to April 30, 2016

From May 1, 2015
to October 31, 2015

¥ 4,816,519¥ 4,565,605

2,470,695

2,494,805

CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes
Adjustments to reconcile income before income taxes to
net cash provided by (used in) operating activities:
Depreciation and amortization
Interest income

(697)

(738)

Interest expense

993,892

1,058,112

Rental receivables(3,500)(16,372)

Consumption tax refundable(53,578)—

Accrued consumption tax(407,556)

159,196

Trade and other payables(203,532)

41,052

Rents received in advance

157,163(149,339)

14,591,896

5,309,142

Changes in assets and liabilities:

Property and equipment due to sale
Others, net(123,666)(145,670)

Subtotal

22,237,636

13,315,793

Interest income received
Cash payments of interest expense
Cash payments of income taxes
Net cash provided by (used in) operating activities

697

738

(989,130)(1,070,731)

(869)

(925)

21,248,334

12,244,875(20,403,242)(9,078,473)(5,913)—

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
Purchase of intangible assets
Proceeds from leasehold and security deposits received

1,851,210

1,100,651

Payments of leasehold and security deposits received(1,496,099)(1,180,848)(600,262)(59,130)—

108,411(20,654,306)(9,109,389)

Payments of restricted bank deposits
Proceeds from restricted bank deposits
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term debt

1,500,000

1,000,000

Payments of short-term debt

(1,500,000)(1,500,000)

Proceeds from long-term debt

18,300,000

14,500,000

Payments of long-term debt

(18,300,000)(14,500,000)

Proceeds from issuance of corporate bonds

990,472—

Payment of dividends(4,169,538)(4,599,589)

Net cash provided by (used in) financing activities(3,179,066)(5,099,589)

Net change in cash and cash equivalents(2,585,038)(1,964,103)

Cash and cash equivalents at the beginning of period

21,760,581

23,724,684¥ 19,175,543¥ 21,760,581

Cash and cash equivalents at the end of period (Note3)
See accompanying notes to the financial statements.

1.

ORGANIZATION AND BASIS OF PRESENTATIONORGANIZATION
Kenedix Office Investment Corporation (“the Investment Corporation”) is a real estate investment corporation whose units are listed on theTokyo Stock Exchange. The Investment Corporation is engaged in ownership and operation of selected office buildings, residential and retailproperties in Japan, with a focus on mid-sized office buildings in the Tokyo Metropolitan Area. The Investment Corporation was incorporated on
May 6, 2005 as an investment corporation under the Law Concerning Investment Trusts and Investment Corporations of Japan, or the Investment
Trust Law. On July 21, 2005, the Investment Corporation was listed on the Real Estate Investment Trust Market of the Tokyo Stock Exchange witha total of 75,400 investment units issued and outstanding (Securities Code: 8972). Subsequently, the Investment Corporation raised funds
through seven public offerings and other means including global offerings. Pursuant to the Investment Trust Law, the Investment Corporation isexternally managed by a registered asset management company, Kenedix Real Estate Fund Management, Inc. (“the Asset Management
Company”), a subsidiary of Kenedix, Inc. (“Kenedix”). In concert with the Asset Management Company, the Investment Corporation strives tomaximize cash distribution to investors by securing stable earnings and sustainable investment growth. To this end, the Investment Corporation
adopts a dynamic and flexible investment stance that accurately reflects its environment and market trends, and endeavors to ensure a timely
response to each and every opportunity.
During the period ended October 31, 2015, the Investment Corporation acquired one office building (Hamamatsucho Center Building: acquisition price of ¥3,950 million) located in the Tokyo Metropolitan Area, one office building (Shin Osaka Center Building: acquisition price of ¥4,550
million ) located in Other Regional Areas, and sold Nagoya Nikko Shoken Building (initial acquisition price of ¥4,158 million) and KDX Nogizaka
Building (initial acquisition price of ¥1,065 million) (with a total combined disposition price of ¥5,760 million).
During the period ended April 30, 2016, the Investment Corporation acquired one office buildings (Nittochi Toranomon Building: acquisition
price of ¥15,550 million) located in the Tokyo Metropolitan Area, one office building (Nichigin-mae KD Building: acquisition price of ¥3,500 million ) located in Other Regional Areas, and sold KDX Toranomon Building (initial acquisition price of ¥4,400 million) and Toranomon Toyo Building(initial acquisition price of ¥9,850 million) (with a total combined disposition price of ¥15,420 million).
At the end of the twenty-first and twenty-second fiscal periods, the Investment Corporation had total unitholders’ capital of ¥206,200 million
with 404,885 investment units outstanding, respectively. The Investment Corporation owned a portfolio of 97 properties (consisting of 92 officebuildings, one residential property, three central urban retail properties and one other property) with total acquisition prices of ¥388,371 millionand ¥393,171 million at the end of the twenty-first and twenty-second fiscal periods, respectively. The occupancy ratios were approximately
94.9% and 96.9% at the end of the twenty-first and twenty-second fiscal periods, respectively.

BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust Act of Japan, theFinancial Instruments and Exchange Law of Japan and related regulations, and in conformity with accounting principles and practices generally
accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the application and disclosure requirements of theInternational Financial Reporting Standards or accounting principles generally accepted in the United States of America.
The accompanying financial statements are basically a translation of the audited financial statements that were prepared for Japanese domestic
purposes from the accounts and records maintained by the Investment Corporation and filed with the Kanto Local Finance Bureau of the Ministryof Finance as required by the Financial Instruments and Exchange Law. In preparing the accompanying financial statements, relevant notes havebeen added and certain reclassifications have been made to the financial statements issued domestically in order to present them in a form that ismore familiar to readers outside Japan. The Investment Corporation’s fiscal period is a six-month period that ends at the end of April and the endof October each year. The Investment Corporation does not prepare consolidated financial statements because it has no subsidiaries.

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) SECURITIESNon-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.
Concerning silent partnership (tokumei kumiai, “TK”) interests, the method of incorporating the amount of equity equivalent to the portion that
corresponds to the net gain or loss of the TK is adopted.

(B) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation of property and equipment is calculated on a straight-line basis over the estimated useful
lives of the assets ranging as stated below:

24

From November 1, 2015 to April 30, 2016

From May 1, 2015 to October 31, 2015

Buildings and structures

2-49 years

2-49 years

Machinery and equipment

3-17 years

3-17 years

Tools, furniture and fixtures

3-20 years

3-20 years

25(C) UNIT ISSUANCE COSTS
Unit issuance costs are amortized over a period of three years under the straight-line method.

3.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consisted of the following as of April 30, 2016 and: October 31, 2015

(D) CORPORATE BOND ISSUANCE COSTS
In thousands of yen

Corporate bond issuance costs are amortized over a maturity period under the straight-line method.
As of April 30, 2016

(E) ACCOUNTING TREATMENT OF TRUST BENEFICIARY INTERESTS IN REAL ESTATE
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all assets and liabilities in trust are recorded in the relevant balance sheets and statements of income and retained earnings.

Cash and bank deposits

As of October 31, 2015

¥20,602,996

Restricted bank deposits (Note)
Cash and cash equivalents¥22,587,773(1,427,453)(827,192)¥19,175,543¥21,760,581

Note: Restricted bank deposits are retained for repayment of tenant leasehold and security deposits.

(F) GROUND LEASEHOLD
Fixed term leaseholds on the building and special agreements on building sales are amortized over a contractual period of 48 years and 9 months
under the straight-line method.

4.

SCHEDULE OF PROPERTY AND EQUIPMENT
In millions of yen(G) REVENUE RECOGNITION
Operating revenues consist of rental revenues including base rents, common area charges, and other operating revenues, which include utility
charge reimbursements, parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrualbasis over the life of each lease. Utility charge reimbursements are recognized when earned and their amounts can be reasonably estimated.
Reimbursements from tenants including utility charge reimbursements are recorded on a gross basis and such amounts are recorded both as revenues and expenses during the fiscal period.

As of April 30, 2016
Acquisition
costs

Acquisition
costs

Accumulated
depreciation

Book
value

¥273,049¥—¥273,049¥271,538¥—¥271,538

Buildings and structures

136,423

26,134110,289

132,688

24,428108,260

Machinery and equipment

2,042

895

1,147

1,905

835

1,070

Tools, furniture and fixtures
Total

5.

514

266

248

504

259

245

¥412,028¥27,295¥384,733¥406,635¥25,522¥381,113SHORT-TERM DEBT, LONG-TERM DEBT AND CORPORATE BONDS

The following summarizes short-term debt, long-term debt and corporate bonds outstanding as of April 30, 2016:
Classification

Short-term debt
Current portion of long-term debt

Drawdown date

Last
repayment date

Weighted-averageinterest rate

July 31, 2015

July 31, 2016

0.51%

March 31, 2016

March 31, 2017

0.45%

Balance(In millions of yen)

¥

1,000
1,500

July 31, 2013

July 29, 2016

0.57%

December 26, 2011

October 31, 2016

1.42%

2,500

(I) INCOME TAXES

December 26, 2011

October 31, 2016

1.44%

2,500

Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets and liabilities using the statutory tax rates.

December 26, 2011

October 31, 2016

1.44%

2,000

October 31, 2012

October 31, 2016

1.06%

2,500

October 31, 2012

October 31, 2016

1.05%

1,500

(J) CONSUMPTION TAXES

November 12, 2015

November 30, 2016

0.49%

2,000

March 28, 2012

March 28, 2017

1.36%

500

December 10, 2012

December 12, 2016

0.98%

500

December 28, 2012

December 28, 2016

1.01%

2,000

(K) DERIVATIVE FINANCIAL INSTRUMENTS

January 15, 2013

January 15, 2017

0.97%

1,000

The Investment Corporation utilizes interest-rate swap and interest-rate cap contracts as derivative financial instruments only for the purpose ofhedging its exposure to changes in interest rates. The Investment Corporation deferred recognition of gains or losses resulting from changes infair value of interest-rate swap and interest-rate cap contracts because these contracts met the criteria for deferral hedging accounting. However,the Investment Corporation adopted special treatment for interest-swap and interest-rate cap contracts if they met the criteria for hedging
accounting under this treatment, whereby the net amount to be paid or received under the interest-rate swap and interest-rate cap contract is
added to or deducted from the interest on the assets or liabilities for which the swap and cap contract was executed. The hedge effectiveness forthe interest-rate swap and interest-rate cap contract is assessed each fiscal period except for those that meet the criteria of special treatment.

January 31, 2014

January 31, 2017

0.67%

Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes applicableto the acquisition of assets are included in the cost of acquisition for each asset.

26

As of October 31, 2015
Book
value

Land

(H) TAXES ON PROPERTY AND EQUIPMENT
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar year
basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to the said period.
Under Japanese tax rules, the seller of property at the time of disposal is liable for these taxes on the property from the date of disposal to theend of the calendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued property-related
tax liabilities.
When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related to the period following the purchase date of each property through the end of the calendar year. The amounts of those allocated portions of the property-related
taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to ¥83,802 thousandand ¥13,308 thousand as of April 30, 2016 and October 31, 2015 respectively. In subsequent calendar years, such property-related taxes arecharged as operating expenses in the fiscal period to which the installments of such taxes correspond.

Accumulated
depreciation

¥

1,200

SubtotalLong-term debt

1,500

22,200November 12, 2010

November 12, 2017

2.02%

December 1, 2010

November 12, 2017

2.21%

¥

2,300
700

March 28, 2012

March 28, 2019

1.77%

1,400

March 28, 2012

March 28, 2019

1.77%

1,000

June 29, 2012

June 30, 2017

1.29%

1,500

September 21, 2012

September 21, 2017

1.16%

5,000

(L) CASH AND CASH EQUIVALENTS

September 21, 2012

September 21, 2017

1.16%

1,000

Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.

September 21, 2012

September 21, 2017

1.16%

1,000

October 31, 2012

October 31, 2017

1.10%

2,500

October 31, 2012

October 31, 2018

1.25%

2,500

(M) ROUNDING OF AMOUNTS PRESENTED

December 28, 2012

December 28, 2017

1.09%

500

Amounts have been truncated in the Japanese financial statements prepared in accordance with Japanese GAAP and filed with regulatory
authorities in Japan, whereas amounts have been rounded to the nearest million in the accompanying financial statements. Totals shown in theaccompanying financial statements do not necessarily agree with the sums of the individual amounts.

December 28, 2012

December 29, 2017

1.09%

500

March 26, 2013

March 26, 2018

1.04%

1,000

March 26, 2013

March 26, 2018

1.04%

1,000

July 31, 2013

July 31, 2018

0.67%

500

27

(C) UNIT ISSUANCE COSTS
Unit issuance costs are amortized over a period of three years under the straight-line method.

3.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consisted of the following as of April 30, 2016 and: October 31, 2015

(D) CORPORATE BOND ISSUANCE COSTS
In thousands of yen

Corporate bond issuance costs are amortized over a maturity period under the straight-line method.
As of April 30, 2016

(E) ACCOUNTING TREATMENT OF TRUST BENEFICIARY INTERESTS IN REAL ESTATE
For trust beneficiary interests in real estate, which are commonly utilized in the ownership of commercial properties in Japan, all assets and liabilities in trust are recorded in the relevant balance sheets and statements of income and retained earnings.

Cash and bank deposits

As of October 31, 2015

¥20,602,996

Restricted bank deposits (Note)
Cash and cash equivalents¥22,587,773(1,427,453)(827,192)¥19,175,543¥21,760,581

Note: Restricted bank deposits are retained for repayment of tenant leasehold and security deposits.

(F) GROUND LEASEHOLD
Fixed term leaseholds on the building and special agreements on building sales are amortized over a contractual period of 48 years and 9 months
under the straight-line method.

4.

SCHEDULE OF PROPERTY AND EQUIPMENT
In millions of yen(G) REVENUE RECOGNITION
Operating revenues consist of rental revenues including base rents, common area charges, and other operating revenues, which include utility
charge reimbursements, parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrualbasis over the life of each lease. Utility charge reimbursements are recognized when earned and their amounts can be reasonably estimated.
Reimbursements from tenants including utility charge reimbursements are recorded on a gross basis and such amounts are recorded both as revenues and expenses during the fiscal period.

As of April 30, 2016
Acquisition
costs

Acquisition
costs

Accumulated
depreciation

Book
value

¥273,049¥—¥273,049¥271,538¥—¥271,538

Buildings and structures

136,423

26,134110,289

132,688

24,428108,260

Machinery and equipment

2,042

895

1,147

1,905

835

1,070

Tools, furniture and fixtures
Total

5.

514

266

248

504

259

245

¥412,028¥27,295¥384,733¥406,635¥25,522¥381,113SHORT-TERM DEBT, LONG-TERM DEBT AND CORPORATE BONDS

The following summarizes short-term debt, long-term debt and corporate bonds outstanding as of April 30, 2016:
Classification

Short-term debt
Current portion of long-term debt

Drawdown date

Last
repayment date

Weighted-averageinterest rate

July 31, 2015

July 31, 2016

0.51%

March 31, 2016

March 31, 2017

0.45%

Balance(In millions of yen)

¥

1,000
1,500

July 31, 2013

July 29, 2016

0.57%

December 26, 2011

October 31, 2016

1.42%

2,500

(I) INCOME TAXES

December 26, 2011

October 31, 2016

1.44%

2,500

Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets and liabilities using the statutory tax rates.

December 26, 2011

October 31, 2016

1.44%

2,000

October 31, 2012

October 31, 2016

1.06%

2,500

October 31, 2012

October 31, 2016

1.05%

1,500

(J) CONSUMPTION TAXES

November 12, 2015

November 30, 2016

0.49%

2,000

March 28, 2012

March 28, 2017

1.36%

500

December 10, 2012

December 12, 2016

0.98%

500

December 28, 2012

December 28, 2016

1.01%

2,000

(K) DERIVATIVE FINANCIAL INSTRUMENTS

January 15, 2013

January 15, 2017

0.97%

1,000

The Investment Corporation utilizes interest-rate swap and interest-rate cap contracts as derivative financial instruments only for the purpose ofhedging its exposure to changes in interest rates. The Investment Corporation deferred recognition of gains or losses resulting from changes infair value of interest-rate swap and interest-rate cap contracts because these contracts met the criteria for deferral hedging accounting. However,the Investment Corporation adopted special treatment for interest-swap and interest-rate cap contracts if they met the criteria for hedging
accounting under this treatment, whereby the net amount to be paid or received under the interest-rate swap and interest-rate cap contract is
added to or deducted from the interest on the assets or liabilities for which the swap and cap contract was executed. The hedge effectiveness forthe interest-rate swap and interest-rate cap contract is assessed each fiscal period except for those that meet the criteria of special treatment.

January 31, 2014

January 31, 2017

0.67%

Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes applicableto the acquisition of assets are included in the cost of acquisition for each asset.

26

As of October 31, 2015
Book
value

Land

(H) TAXES ON PROPERTY AND EQUIPMENT
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar year
basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to the said period.
Under Japanese tax rules, the seller of property at the time of disposal is liable for these taxes on the property from the date of disposal to theend of the calendar year in which the property is disposed. The seller, however, is reimbursed by the purchaser for these accrued property-related
tax liabilities.
When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related to the period following the purchase date of each property through the end of the calendar year. The amounts of those allocated portions of the property-related
taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to ¥83,802 thousandand ¥13,308 thousand as of April 30, 2016 and October 31, 2015 respectively. In subsequent calendar years, such property-related taxes arecharged as operating expenses in the fiscal period to which the installments of such taxes correspond.

Accumulated
depreciation

¥

1,200

SubtotalLong-term debt

1,500

22,200November 12, 2010

November 12, 2017

2.02%

December 1, 2010

November 12, 2017

2.21%

¥

2,300
700

March 28, 2012

March 28, 2019

1.77%

1,400

March 28, 2012

March 28, 2019

1.77%

1,000

June 29, 2012

June 30, 2017

1.29%

1,500

September 21, 2012

September 21, 2017

1.16%

5,000

(L) CASH AND CASH EQUIVALENTS

September 21, 2012

September 21, 2017

1.16%

1,000

Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.

September 21, 2012

September 21, 2017

1.16%

1,000

October 31, 2012

October 31, 2017

1.10%

2,500

October 31, 2012

October 31, 2018

1.25%

2,500

(M) ROUNDING OF AMOUNTS PRESENTED

December 28, 2012

December 28, 2017

1.09%

500

Amounts have been truncated in the Japanese financial statements prepared in accordance with Japanese GAAP and filed with regulatory
authorities in Japan, whereas amounts have been rounded to the nearest million in the accompanying financial statements. Totals shown in theaccompanying financial statements do not necessarily agree with the sums of the individual amounts.

December 28, 2012

December 29, 2017

1.09%

500

March 26, 2013

March 26, 2018

1.04%

1,000

March 26, 2013

March 26, 2018

1.04%

1,000

July 31, 2013

July 31, 2018

0.67%

500

27

Classification

Long-term debt

28

Drawdown date

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)

¥

1,000

Classification

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)August 19, 2013

August 19, 2018

0.95%

February 18, 2015

February 28, 2025

1.31%

August 19, 2013

August 19, 2018

0.95%

1,000

February 27, 2015

February 28, 2025

1.15%

August 19, 2013

August 19, 2018

0.95%

500

March 12, 2015

February 28, 2025

1.22%

1,000

August 19, 2013

August 19, 2018

0.95%

500

March 31, 2015

March 31, 2025

1.27%

2,500

August 19, 2013

August 19, 2018

0.97%

500

April 30, 2015

April 30, 2022

0.83%

2,300

August 30, 2013

August 31, 2018

1.08%

700

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2018

1.08%

500

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2018

1.08%

300

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2020

1.42%

1,500

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

1,800

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

900

August 31, 2015

August 31, 2022

0.87%

500

October 31, 2013

October 31, 2018

0.89%

500

September 30, 2015

September 30, 2024

1.07%

2,000

November 12, 2013

November 12, 2018

0.82%

1,000

October 30, 2015

October 31, 2024

0.99%

1,000

November 12, 2013

November 12, 2020

1.07%

2,000

October 30, 2015

October 30, 2025

1.11%

1,500

November 12, 2013

November 12, 2020

1.07%

500

October 30, 2015

October 30, 2025

1.11%

2,000

November 29, 2013

November 30, 2020

1.12%

1,000

October 30, 2015

October 30, 2025

1.11%

2,500

November 29, 2013

November 30, 2020

1.12%

900

October 30, 2015

October 30, 2025

1.12%

2,500

November 29, 2013

November 30, 2018

0.84%

200

November 12, 2015

November 30, 2025

1.17%

1,000

January 10, 2014

January 31, 2021

1.21%

1,300

January 29, 2016

January 31, 2022

0.59%

2,500

January 31, 2014

January 31, 2021

1.13%

2,300

January 29, 2016

January 31, 2022

0.64%

500

January 31, 2014

January 31, 2020

0.93%

3,700

January 29, 2016

January 29, 2026

1.07%

2,000

March 12, 2014

March 12, 2018

0.75%

2,250

January 29, 2016

January 29, 2026

1.02%

1,800

March 12, 2014

March 31, 2019

0.78%

450

February 18, 2016

February 18, 2026

1.00%

1,000

March 12, 2014

March 12, 2020

0.92%

1,800

February 18, 2016

February 18, 2026

1.00%

500

March 12, 2014

March 12, 2023

1.36%

1,800

March 30, 2016

March 31, 2019

0.17%

1,000

March 20, 2014

March 12, 2020

0.91%

3,000

March 31, 2016

March 31, 2026

0.90%

1,000

March 20, 2014

September 20, 2021

1.01%

4,000

April 28, 2016

April 30, 2024

0.65%

2,000

March 20, 2014

March 20, 2022

1.20%

3,000

April 28, 2016

April 30, 2026

0.84%

2,000

March 20, 2014

March 12, 2023

1.35%

2,000

April 28, 2016

April 30, 2026

0.87%

March 31, 2014

March 31, 2019

0.76%

2,500

April 22, 2014

October 31, 2020

0.95%

2,900

July 10, 2014

July 10, 2019

0.64%

500

July 10, 2014

July 10, 2021

0.90%

2,000

March 8, 2012

September 8, 2017

2.00%

July 10, 2014

July 10, 2021

0.90%

500

September 12, 2013

September 12, 2018

1.00%

1,800

July 14, 2014

July 31, 2019

0.68%

1,000

July 25, 2014

July 25, 2024

1.18%

2,000

July 31, 2014

July 31, 2019

0.62%

1,000

April 28, 2016

April 28, 2028

0.90%

July 31, 2014

July 31, 2020

0.74%

2,700

Subtotal

6,300

July 31, 2014

October 31, 2020

0.76%

300

Total

¥175,100

July 31, 2014

July 31, 2022

1.01%

2,200

August 29, 2014

July 31, 2019

0.65%

1,000

September 1, 2014

August 31, 2021

0.89%

800

September 1, 2014

August 31, 2021

0.89%

500

September 3, 2014

August 31, 2022

0.98%

1,000

September 3, 2014

August 31, 2022

0.98%

950

September 22, 2014

September 30, 2020

0.80%

2,700

September 30, 2014

September 30, 2021

0.89%

October 31, 2014

October 31, 2021

0.80%

October 31, 2014

October 31, 2023

October 31, 2014

Long-term debt

Drawdown date

¥

1,250
2,100

1,000

Subtotal

143,600

Current portion of Corporate bonds

March 15, 2007

March 15, 2017

2.37%

¥

Subtotal

3,000
3,000

Corporate bonds

1,500

1,000

The following summarizes short-term debt, long-term debt and corporate bonds outstanding as of October 31, 2015:
Classification

Short-term debt

Drawdown date

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)

April 2, 2015

March 31, 2016

0.53%

July 31, 2015

July 31, 2016

0.53%

November 12, 2010

November 12, 2015

1.79%

1,000

November 12, 2010

November 12, 2015

1.79%

800

3,000

December 1, 2010

November 12, 2015

1.32%

800

1.07%

2,000

December 1, 2010

November 12, 2015

1.32%

200

October 31, 2023

1.13%

1,500

January 31, 2011

January 29, 2016

1.94%

800

October 31, 2014

October 31, 2023

1.07%

1,000

February 28, 2011

January 29, 2016

1.95%

500

October 31, 2014

October 31, 2024

1.26%

2,000

March 31, 2011

January 29, 2016

1.91%

2,000

October 31, 2014

October 31, 2024

1.26%

1,000

April 28, 2011

January 29, 2016

1.89%

1,000

January 30, 2015

January 31, 2021

0.71%

1,500

January 10, 2012

January 29, 2016

1.27%

2,500

January 30, 2015

January 31, 2025

1.16%

1,500

February 18, 2013

February 18, 2016

0.84%

1,500

February 18, 2015

February 28, 2022

0.91%

1,250

March 31, 2011

March 31, 2016

1.22%

1,000

February 18, 2015

February 28, 2022

0.91%

350

May 1, 2006

April 30, 2016

2.73%

5,000

February 18, 2015

February 29, 2024

1.16%

1,700

April 30, 2013

April 30, 2016

0.67%

1,000

Current portion of long-term debt

¥

1,500
1,000

¥

1,200

29

Classification

Long-term debt

28

Drawdown date

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)

¥

1,000

Classification

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)August 19, 2013

August 19, 2018

0.95%

February 18, 2015

February 28, 2025

1.31%

August 19, 2013

August 19, 2018

0.95%

1,000

February 27, 2015

February 28, 2025

1.15%

August 19, 2013

August 19, 2018

0.95%

500

March 12, 2015

February 28, 2025

1.22%

1,000

August 19, 2013

August 19, 2018

0.95%

500

March 31, 2015

March 31, 2025

1.27%

2,500

August 19, 2013

August 19, 2018

0.97%

500

April 30, 2015

April 30, 2022

0.83%

2,300

August 30, 2013

August 31, 2018

1.08%

700

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2018

1.08%

500

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2018

1.08%

300

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2020

1.42%

1,500

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

1,800

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

900

August 31, 2015

August 31, 2022

0.87%

500

October 31, 2013

October 31, 2018

0.89%

500

September 30, 2015

September 30, 2024

1.07%

2,000

November 12, 2013

November 12, 2018

0.82%

1,000

October 30, 2015

October 31, 2024

0.99%

1,000

November 12, 2013

November 12, 2020

1.07%

2,000

October 30, 2015

October 30, 2025

1.11%

1,500

November 12, 2013

November 12, 2020

1.07%

500

October 30, 2015

October 30, 2025

1.11%

2,000

November 29, 2013

November 30, 2020

1.12%

1,000

October 30, 2015

October 30, 2025

1.11%

2,500

November 29, 2013

November 30, 2020

1.12%

900

October 30, 2015

October 30, 2025

1.12%

2,500

November 29, 2013

November 30, 2018

0.84%

200

November 12, 2015

November 30, 2025

1.17%

1,000

January 10, 2014

January 31, 2021

1.21%

1,300

January 29, 2016

January 31, 2022

0.59%

2,500

January 31, 2014

January 31, 2021

1.13%

2,300

January 29, 2016

January 31, 2022

0.64%

500

January 31, 2014

January 31, 2020

0.93%

3,700

January 29, 2016

January 29, 2026

1.07%

2,000

March 12, 2014

March 12, 2018

0.75%

2,250

January 29, 2016

January 29, 2026

1.02%

1,800

March 12, 2014

March 31, 2019

0.78%

450

February 18, 2016

February 18, 2026

1.00%

1,000

March 12, 2014

March 12, 2020

0.92%

1,800

February 18, 2016

February 18, 2026

1.00%

500

March 12, 2014

March 12, 2023

1.36%

1,800

March 30, 2016

March 31, 2019

0.17%

1,000

March 20, 2014

March 12, 2020

0.91%

3,000

March 31, 2016

March 31, 2026

0.90%

1,000

March 20, 2014

September 20, 2021

1.01%

4,000

April 28, 2016

April 30, 2024

0.65%

2,000

March 20, 2014

March 20, 2022

1.20%

3,000

April 28, 2016

April 30, 2026

0.84%

2,000

March 20, 2014

March 12, 2023

1.35%

2,000

April 28, 2016

April 30, 2026

0.87%

March 31, 2014

March 31, 2019

0.76%

2,500

April 22, 2014

October 31, 2020

0.95%

2,900

July 10, 2014

July 10, 2019

0.64%

500

July 10, 2014

July 10, 2021

0.90%

2,000

March 8, 2012

September 8, 2017

2.00%

July 10, 2014

July 10, 2021

0.90%

500

September 12, 2013

September 12, 2018

1.00%

1,800

July 14, 2014

July 31, 2019

0.68%

1,000

July 25, 2014

July 25, 2024

1.18%

2,000

July 31, 2014

July 31, 2019

0.62%

1,000

April 28, 2016

April 28, 2028

0.90%

July 31, 2014

July 31, 2020

0.74%

2,700

Subtotal

6,300

July 31, 2014

October 31, 2020

0.76%

300

Total

¥175,100

July 31, 2014

July 31, 2022

1.01%

2,200

August 29, 2014

July 31, 2019

0.65%

1,000

September 1, 2014

August 31, 2021

0.89%

800

September 1, 2014

August 31, 2021

0.89%

500

September 3, 2014

August 31, 2022

0.98%

1,000

September 3, 2014

August 31, 2022

0.98%

950

September 22, 2014

September 30, 2020

0.80%

2,700

September 30, 2014

September 30, 2021

0.89%

October 31, 2014

October 31, 2021

0.80%

October 31, 2014

October 31, 2023

October 31, 2014

Long-term debt

Drawdown date

¥

1,250
2,100

1,000

Subtotal

143,600

Current portion of Corporate bonds

March 15, 2007

March 15, 2017

2.37%

¥

Subtotal

3,000
3,000

Corporate bonds

1,500

1,000

The following summarizes short-term debt, long-term debt and corporate bonds outstanding as of October 31, 2015:
Classification

Short-term debt

Drawdown date

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)

April 2, 2015

March 31, 2016

0.53%

July 31, 2015

July 31, 2016

0.53%

November 12, 2010

November 12, 2015

1.79%

1,000

November 12, 2010

November 12, 2015

1.79%

800

3,000

December 1, 2010

November 12, 2015

1.32%

800

1.07%

2,000

December 1, 2010

November 12, 2015

1.32%

200

October 31, 2023

1.13%

1,500

January 31, 2011

January 29, 2016

1.94%

800

October 31, 2014

October 31, 2023

1.07%

1,000

February 28, 2011

January 29, 2016

1.95%

500

October 31, 2014

October 31, 2024

1.26%

2,000

March 31, 2011

January 29, 2016

1.91%

2,000

October 31, 2014

October 31, 2024

1.26%

1,000

April 28, 2011

January 29, 2016

1.89%

1,000

January 30, 2015

January 31, 2021

0.71%

1,500

January 10, 2012

January 29, 2016

1.27%

2,500

January 30, 2015

January 31, 2025

1.16%

1,500

February 18, 2013

February 18, 2016

0.84%

1,500

February 18, 2015

February 28, 2022

0.91%

1,250

March 31, 2011

March 31, 2016

1.22%

1,000

February 18, 2015

February 28, 2022

0.91%

350

May 1, 2006

April 30, 2016

2.73%

5,000

February 18, 2015

February 29, 2024

1.16%

1,700

April 30, 2013

April 30, 2016

0.67%

1,000

Current portion of long-term debt

¥

1,500
1,000

¥

1,200

29

Classification

Current portion of long-term debt

Drawdown date

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)¥

Long-term debt

30

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)

July 31, 2013

July 29, 2016

0.57%

April 22, 2014

October 31, 2020

0.95%

October 31, 2016

1.44%

2,500

July 10, 2014

July 10, 2019

0.64%

500

December 26, 2011

October 31, 2016

1.42%

2,500

July 10, 2014

July 10, 2021

0.90%

2,000

December 26, 2011

October 31, 2016

1.44%

2,000

July 10, 2014

July 10, 2021

0.90%

500

October 31, 2012

October 31, 2016

1.06%

2,500

July 14, 2014

July 31, 2019

0.68%

1,000

October 31, 2012

October 31, 2016

1.05%
¥

Long-term debt

Drawdown date

December 26, 2011

Subtotal

1,500Classification

¥

2,900

1,500

July 31, 2014

July 31, 2019

0.62%

1,000

33,300July 31, 2014

July 31, 2020

0.74%

2,700

2,300

July 31, 2014

October 31, 2020

0.76%

300

700

July 31, 2014

July 31, 2022

1.01%

2,200

November 12, 2010

November 12, 2017

2.02%

December 1, 2010

November 12, 2017

2.21%

March 28, 2012

March 28, 2017

1.36%

500

August 29, 2014

July 31, 2019

0.65%

1,000

March 28, 2012

March 28, 2019

1.77%

1,400

September 1, 2014

August 31, 2021

0.89%

800

March 28, 2012

March 28, 2019

1.77%

1,000

September 1, 2014

August 31, 2021

0.89%

500

June 29, 2012

June 30, 2017

1.29%

1,500

September 3, 2014

August 31, 2022

0.98%

1,000

September 21, 2012

September 21, 2017

1.16%

5,000

September 3, 2014

August 31, 2022

0.98%

950

September 21, 2012

September 21, 2017

1.16%

1,000

September 22, 2014

September 30, 2020

0.80%

2,700

September 21, 2012

September 21, 2017

1.16%

1,000

September 30, 2014

September 30, 2021

0.89%

1,000

October 31, 2012

October 31, 2017

1.10%

2,500

October 31, 2014

October 31, 2021

0.80%

3,000

October 31, 2012

October 31, 2018

1.25%

2,500

October 31, 2014

October 31, 2023

1.07%

2,000

December 10, 2012

December 12, 2016

0.98%

500

October 31, 2014

October 31, 2023

1.13%

1,500

December 28, 2012

December 28, 2016

1.01%

2,000

October 31, 2014

October 31, 2023

1.07%

1,000

December 28, 2012

December 28, 2017

1.09%

500

October 31, 2014

October 31, 2024

1.26%

2,000

December 28, 2012

December 29, 2017

1.09%

500

October 31, 2014

October 31, 2024

1.26%

1,000

January 15, 2013

January 15, 2017

0.97%

1,000

January 30, 2015

January 31, 2021

0.71%

1,500

March 26, 2013

March 26, 2018

1.04%

1,000

January 30, 2015

January 31, 2025

1.16%

1,500

March 26, 2013

March 26, 2018

1.04%

1,000

February 18, 2015

February 28, 2022

0.91%

1,250

July 31, 2013

July 31, 2018

0.67%

500

February 18, 2015

February 28, 2022

0.91%

350

August 19, 2013

August 19, 2018

0.95%

1,000

February 18, 2015

February 29, 2024

1.16%

1,700

August 19, 2013

August 19, 2018

0.95%

1,000

February 18, 2015

February 28, 2025

1.31%

1,250

August 19, 2013

August 19, 2018

0.95%

500

February 27, 2015

February 28, 2025

1.15%

2,100

August 19, 2013

August 19, 2018

0.97%

500

March 12, 2015

February 28, 2025

1.22%

1,000

August 19, 2013

August 19, 2018

0.95%

500

March 31, 2015

March 31, 2025

1.27%

2,500

August 30, 2013

August 31, 2018

1.08%

700

April 30, 2015

April 30, 2022

0.83%

2,300

August 30, 2013

August 31, 2018

1.08%

500

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2018

1.08%

300

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2020

1.42%

1,500

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

1,800

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

900

August 31, 2015

August 31, 2022

0.87%

500

October 31, 2013

October 31, 2018

0.89%

500

August 31, 2015

August 31, 2022

0.87%

500

November 12, 2013

November 12, 2018

0.82%

1,000

September 30, 2015

September 30, 2024

1.06%

2,000

November 12, 2013

November 12, 2020

1.07%

2,000

October 30, 2015

October 31, 2024

0.99%

1,000

November 12, 2013

November 12, 2020

1.07%

500

October 30, 2015

October 30, 2025

1.11%

1,500

November 29, 2013

November 30, 2018

0.84%

200

October 30, 2015

October 30, 2025

1.11%

2,000

November 29, 2013

November 30, 2020

1.12%

1,000

October 30, 2015

October 30, 2025

1.11%

2,500

November 29, 2013

November 30, 2020

1.12%

900

October 30, 2015

October 30, 2025

1.12%

2,500

January 10, 2014

January 31, 2021

1.21%

1,300

January 31, 2014

January 31, 2017

0.67%

1,200

March 15, 2007

March 15, 2017

2.37%

January 31, 2014

January 31, 2020

0.93%

3,700

March 8, 2012

September 8, 2017

2.00%

January 31, 2014

January 31, 2021

1.13%

2,300

September 12, 2013

September 12, 2018

1.00%

1,800

March 12, 2014

March 12, 2018

0.75%

2,250

July 25, 2014

July 25, 2024

1.18%

2,000

March 12, 2014

March 31, 2019

0.78%

450

Subtotal

8,300

March 12, 2014

March 12, 2020

0.92%

1,800

Total

¥174,100

March 12, 2014

March 12, 2023

1.36%

1,800

March 20, 2014

March 12, 2020

0.91%

3,000

March 20, 2014

September 20, 2021

1.01%

4,000

March 20, 2014

March 20, 2022

1.20%

3,000

March 20, 2014

March 12, 2023

1.35%

2,000

March 31, 2014

March 31, 2019

0.76%

2,500

Subtotal
Corporate bonds

132,500
¥

3,000
1,500

31

Classification

Current portion of long-term debt

Drawdown date

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)¥

Long-term debt

30

Last
repayment date

Weighted-averageinterest rate

Balance(In millions of yen)

July 31, 2013

July 29, 2016

0.57%

April 22, 2014

October 31, 2020

0.95%

October 31, 2016

1.44%

2,500

July 10, 2014

July 10, 2019

0.64%

500

December 26, 2011

October 31, 2016

1.42%

2,500

July 10, 2014

July 10, 2021

0.90%

2,000

December 26, 2011

October 31, 2016

1.44%

2,000

July 10, 2014

July 10, 2021

0.90%

500

October 31, 2012

October 31, 2016

1.06%

2,500

July 14, 2014

July 31, 2019

0.68%

1,000

October 31, 2012

October 31, 2016

1.05%
¥

Long-term debt

Drawdown date

December 26, 2011

Subtotal

1,500Classification

¥

2,900

1,500

July 31, 2014

July 31, 2019

0.62%

1,000

33,300July 31, 2014

July 31, 2020

0.74%

2,700

2,300

July 31, 2014

October 31, 2020

0.76%

300

700

July 31, 2014

July 31, 2022

1.01%

2,200

November 12, 2010

November 12, 2017

2.02%

December 1, 2010

November 12, 2017

2.21%

March 28, 2012

March 28, 2017

1.36%

500

August 29, 2014

July 31, 2019

0.65%

1,000

March 28, 2012

March 28, 2019

1.77%

1,400

September 1, 2014

August 31, 2021

0.89%

800

March 28, 2012

March 28, 2019

1.77%

1,000

September 1, 2014

August 31, 2021

0.89%

500

June 29, 2012

June 30, 2017

1.29%

1,500

September 3, 2014

August 31, 2022

0.98%

1,000

September 21, 2012

September 21, 2017

1.16%

5,000

September 3, 2014

August 31, 2022

0.98%

950

September 21, 2012

September 21, 2017

1.16%

1,000

September 22, 2014

September 30, 2020

0.80%

2,700

September 21, 2012

September 21, 2017

1.16%

1,000

September 30, 2014

September 30, 2021

0.89%

1,000

October 31, 2012

October 31, 2017

1.10%

2,500

October 31, 2014

October 31, 2021

0.80%

3,000

October 31, 2012

October 31, 2018

1.25%

2,500

October 31, 2014

October 31, 2023

1.07%

2,000

December 10, 2012

December 12, 2016

0.98%

500

October 31, 2014

October 31, 2023

1.13%

1,500

December 28, 2012

December 28, 2016

1.01%

2,000

October 31, 2014

October 31, 2023

1.07%

1,000

December 28, 2012

December 28, 2017

1.09%

500

October 31, 2014

October 31, 2024

1.26%

2,000

December 28, 2012

December 29, 2017

1.09%

500

October 31, 2014

October 31, 2024

1.26%

1,000

January 15, 2013

January 15, 2017

0.97%

1,000

January 30, 2015

January 31, 2021

0.71%

1,500

March 26, 2013

March 26, 2018

1.04%

1,000

January 30, 2015

January 31, 2025

1.16%

1,500

March 26, 2013

March 26, 2018

1.04%

1,000

February 18, 2015

February 28, 2022

0.91%

1,250

July 31, 2013

July 31, 2018

0.67%

500

February 18, 2015

February 28, 2022

0.91%

350

August 19, 2013

August 19, 2018

0.95%

1,000

February 18, 2015

February 29, 2024

1.16%

1,700

August 19, 2013

August 19, 2018

0.95%

1,000

February 18, 2015

February 28, 2025

1.31%

1,250

August 19, 2013

August 19, 2018

0.95%

500

February 27, 2015

February 28, 2025

1.15%

2,100

August 19, 2013

August 19, 2018

0.97%

500

March 12, 2015

February 28, 2025

1.22%

1,000

August 19, 2013

August 19, 2018

0.95%

500

March 31, 2015

March 31, 2025

1.27%

2,500

August 30, 2013

August 31, 2018

1.08%

700

April 30, 2015

April 30, 2022

0.83%

2,300

August 30, 2013

August 31, 2018

1.08%

500

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2018

1.08%

300

August 31, 2015

August 31, 2022

0.87%

500

August 30, 2013

August 31, 2020

1.42%

1,500

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

1,800

August 31, 2015

August 31, 2022

0.87%

500

September 30, 2013

September 30, 2019

1.06%

900

August 31, 2015

August 31, 2022

0.87%

500

October 31, 2013

October 31, 2018

0.89%

500

August 31, 2015

August 31, 2022

0.87%

500

November 12, 2013

November 12, 2018

0.82%

1,000

September 30, 2015

September 30, 2024

1.06%

2,000

November 12, 2013

November 12, 2020

1.07%

2,000

October 30, 2015

October 31, 2024

0.99%

1,000

November 12, 2013

November 12, 2020

1.07%

500

October 30, 2015

October 30, 2025

1.11%

1,500

November 29, 2013

November 30, 2018

0.84%

200

October 30, 2015

October 30, 2025

1.11%

2,000

November 29, 2013

November 30, 2020

1.12%

1,000

October 30, 2015

October 30, 2025

1.11%

2,500

November 29, 2013

November 30, 2020

1.12%

900

October 30, 2015

October 30, 2025

1.12%

2,500

January 10, 2014

January 31, 2021

1.21%

1,300

January 31, 2014

January 31, 2017

0.67%

1,200

March 15, 2007

March 15, 2017

2.37%

January 31, 2014

January 31, 2020

0.93%

3,700

March 8, 2012

September 8, 2017

2.00%

January 31, 2014

January 31, 2021

1.13%

2,300

September 12, 2013

September 12, 2018

1.00%

1,800

March 12, 2014

March 12, 2018

0.75%

2,250

July 25, 2014

July 25, 2024

1.18%

2,000

March 12, 2014

March 31, 2019

0.78%

450

Subtotal

8,300

March 12, 2014

March 12, 2020

0.92%

1,800

Total

¥174,100

March 12, 2014

March 12, 2023

1.36%

1,800

March 20, 2014

March 12, 2020

0.91%

3,000

March 20, 2014

September 20, 2021

1.01%

4,000

March 20, 2014

March 20, 2022

1.20%

3,000

March 20, 2014

March 12, 2023

1.35%

2,000

March 31, 2014

March 31, 2019

0.76%

2,500

Subtotal
Corporate bonds

132,500
¥

3,000
1,500

31

6.

9.

REDUCTION ENTRY

The amount of reduction entry of property and equipment acquired by government subsidy
In thousands of yen
As of April 30, 2016

As of October 31, 2015

¥26,230¥26,230

Buildings and structures

7.

NET ASSETSThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Act. The entire amount of the issue price of
new units is designated as stated capital. The Investment Corporation is required to maintain net assets of at least ¥50 million as required by theInvestment Trust Act.

10.

RELATED-PARTY TRANSACTIONS
1. PARENT COMPANY, CORPORATE UNITHOLDERS’ AND OTHERPER UNIT INFORMATION

Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable
Yen
From November 1, 2015
to April 30, 2016

From May 1, 2015
to October 31, 2015

Net asset value per unit

¥524,977¥523,395

Net income per unit

¥ 11,893¥ 11,273

Weighted average number of units (units)404,885

404,885

The weighted average number of units outstanding of 404,885 as of April 30, 2016 and October 31, 2015, respectively was used for the computation of the amount of net income per unit. Net income per unit after adjusting for residual units is not included because there were no residual
investment units.

8.

2. AFFILIATED COMPANIES AND OTHER
Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable

3. FELLOW SUBSIDIARY COMPANIES AND OTHER
Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable

4. DIRECTORS, INDIVIDUAL UNITHOLDERS’ AND OTHER
Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable

11.

BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES,GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTYINCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 32%. However, the Investment
Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements are met under the Special
Taxation Measures Law of Japan. Under this law, the Investment Corporation must meet a number of tax requirements, including a requirementthat it currently distribute in excess of 90% of its net income for the fiscal period in order to be able to deduct such amounts. If the Investment
Corporation does not satisfy all of the requirements, the entire taxable income of the Investment Corporation will be subject to regular corporate
income taxes. The Investment Corporation distributed in excess of 90% of its distributable income in the form of cash distributions totaling¥4,335 million (deducting ¥480 million as the provision of reserve for reduction entry) and ¥4,170 million (deducting ¥394 million as the provisionof reserve for reduction entry) for the periods ended April 30, 2016, and October 31, 2015. Therefore such distributions were treated as deductible
distributions for purposes of corporate income taxes. The effective tax rate on the Investment Corporation’s income was 0.03% for the fiscal
periods ended April 30, 2016 and October 31, 2015. The following table summarizes the significant differences between the statutory tax rate
and the effective tax rate:

Rental and other operating revenues, property-related expenses, gain and loss on sale of real estate property for the periods from November 1,
2015 to April 30, 2016 and from May 1, 2015 to October 31, 2015 consist of the following:
In thousands of yen
From November 1, 2015
to April 30, 2016

Rental and other operating revenues:
Rental revenues¥ 9,117,586

Common area charges
Subtotal¥ 9,124,877

1,930,493

1,981,677

11,048,079

11,106,554

Others:Parking space rental revenues

471,916

472,738

Utility charge reimbursement

990,852

1,131,096

From November 1, 2015
to April 30, 2016

From May 1, 2015
to October 31, 2015

Statutory tax rate

32.31%

32.31%

Deductible cash distributions(29.08)(29.51)

Provision of reserve for reduction entry(3.22)(2.79)

Others0.02

0.02

Property management fees and facility management fees

Effective tax rate

0.03%

0.03%

Depreciation

2,230,747

2,218,871

Utilities

1,071,935

1,232,969

Taxes

1,112,600

1,097,079

The significant components of deferred tax assets and liabilities as of April 30, 2016 and October 31, 2015 were as follows:
In thousands of yen
As of April 30, 2016

As of October 31, 2015

Deferred tax assets:
Enterprise tax payable

¥

31

¥

32

Deferred gains or losses on hedges

1,374

—

Amortization of leasehold rights

2,663

2,460

Subtotal deferred tax assets

4,068

2,492

Valuation allowance

4,037

2,460

Total deferred tax assets

¥

31

¥

32

Revision of amount of deferred tax assets and deferred tax liabilities due to change in the tax rate of income taxes
The Act on Partial Revision of the Income Tax Act, etc. (Act No. 15 of 2016) and the Act on Partial Revision of the Local Tax Act, etc. (Act No. 13
of 2016) were enacted in the Diet session on March 29, 2016, which include lowering of the tax rate of income taxes, starting from accounting
periods starting on or after April 1, 2016. In accordance with this, the statutory tax rate used to calculate deferred tax assets and deferred tax liabilities is changed from the previous 32.31% to 31.74%. The impact from the tax rate change is minimal.

Miscellaneous

301,182

515,644

Subtotal

1,763,950

2,119,478¥12,812,029¥13,226,032¥ 1,251,483¥ 1,261,503

Total rental and other operating revenues
Property-related expenses:

Insurance

17,492

18,325

Repairs and maintenance451,262

497,904

Trust fees

32,13052,439Others365,554289,902¥ 6,533,203¥ 6,668,992

Total property-related expenses
Gain on sale of real estate property:
Revenue from sale of investment property

11,470,000

4,800,000

Cost of investment property

9,899,061

4,214,661

60,770123,973

1,510,169

461,366

Other sales expenses
Gain on sale of real estate property
Loss on sale of real estate property:
Revenue from sale of investment property

3,950,000

960,000

Cost of investment property

4,692,834

1,094,481

Other sales expenses
Loss on sale of real estate property

32

From May 1, 2015
to October 31, 2015

23,171¥

766,005

31,210¥165,691

33

6.

9.

REDUCTION ENTRY

The amount of reduction entry of property and equipment acquired by government subsidy
In thousands of yen
As of April 30, 2016

As of October 31, 2015

¥26,230¥26,230

Buildings and structures

7.

NET ASSETSThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Act. The entire amount of the issue price of
new units is designated as stated capital. The Investment Corporation is required to maintain net assets of at least ¥50 million as required by theInvestment Trust Act.

10.

RELATED-PARTY TRANSACTIONS
1. PARENT COMPANY, CORPORATE UNITHOLDERS’ AND OTHERPER UNIT INFORMATION

Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable
Yen
From November 1, 2015
to April 30, 2016

From May 1, 2015
to October 31, 2015

Net asset value per unit

¥524,977¥523,395

Net income per unit

¥ 11,893¥ 11,273

Weighted average number of units (units)404,885

404,885

The weighted average number of units outstanding of 404,885 as of April 30, 2016 and October 31, 2015, respectively was used for the computation of the amount of net income per unit. Net income per unit after adjusting for residual units is not included because there were no residual
investment units.

8.

2. AFFILIATED COMPANIES AND OTHER
Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable

3. FELLOW SUBSIDIARY COMPANIES AND OTHER
Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable

4. DIRECTORS, INDIVIDUAL UNITHOLDERS’ AND OTHER
Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016) and Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015): Not applicable

11.

BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES,GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTYINCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 32%. However, the Investment
Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements are met under the Special
Taxation Measures Law of Japan. Under this law, the Investment Corporation must meet a number of tax requirements, including a requirementthat it currently distribute in excess of 90% of its net income for the fiscal period in order to be able to deduct such amounts. If the Investment
Corporation does not satisfy all of the requirements, the entire taxable income of the Investment Corporation will be subject to regular corporate
income taxes. The Investment Corporation distributed in excess of 90% of its distributable income in the form of cash distributions totaling¥4,335 million (deducting ¥480 million as the provision of reserve for reduction entry) and ¥4,170 million (deducting ¥394 million as the provisionof reserve for reduction entry) for the periods ended April 30, 2016, and October 31, 2015. Therefore such distributions were treated as deductible
distributions for purposes of corporate income taxes. The effective tax rate on the Investment Corporation’s income was 0.03% for the fiscal
periods ended April 30, 2016 and October 31, 2015. The following table summarizes the significant differences between the statutory tax rate
and the effective tax rate:

Rental and other operating revenues, property-related expenses, gain and loss on sale of real estate property for the periods from November 1,
2015 to April 30, 2016 and from May 1, 2015 to October 31, 2015 consist of the following:
In thousands of yen
From November 1, 2015
to April 30, 2016

Rental and other operating revenues:
Rental revenues¥ 9,117,586

Common area charges
Subtotal¥ 9,124,877

1,930,493

1,981,677

11,048,079

11,106,554

Others:Parking space rental revenues

471,916

472,738

Utility charge reimbursement

990,852

1,131,096

From November 1, 2015
to April 30, 2016

From May 1, 2015
to October 31, 2015

Statutory tax rate

32.31%

32.31%

Deductible cash distributions(29.08)(29.51)

Provision of reserve for reduction entry(3.22)(2.79)

Others0.02

0.02

Property management fees and facility management fees

Effective tax rate

0.03%

0.03%

Depreciation

2,230,747

2,218,871

Utilities

1,071,935

1,232,969

Taxes

1,112,600

1,097,079

The significant components of deferred tax assets and liabilities as of April 30, 2016 and October 31, 2015 were as follows:
In thousands of yen
As of April 30, 2016

As of October 31, 2015

Deferred tax assets:
Enterprise tax payable

¥

31

¥

32

Deferred gains or losses on hedges

1,374

—

Amortization of leasehold rights

2,663

2,460

Subtotal deferred tax assets

4,068

2,492

Valuation allowance

4,037

2,460

Total deferred tax assets

¥

31

¥

32

Revision of amount of deferred tax assets and deferred tax liabilities due to change in the tax rate of income taxes
The Act on Partial Revision of the Income Tax Act, etc. (Act No. 15 of 2016) and the Act on Partial Revision of the Local Tax Act, etc. (Act No. 13
of 2016) were enacted in the Diet session on March 29, 2016, which include lowering of the tax rate of income taxes, starting from accounting
periods starting on or after April 1, 2016. In accordance with this, the statutory tax rate used to calculate deferred tax assets and deferred tax liabilities is changed from the previous 32.31% to 31.74%. The impact from the tax rate change is minimal.

Miscellaneous

301,182

515,644

Subtotal

1,763,950

2,119,478¥12,812,029¥13,226,032¥ 1,251,483¥ 1,261,503

Total rental and other operating revenues
Property-related expenses:

Insurance

17,492

18,325

Repairs and maintenance451,262

497,904

Trust fees

32,13052,439Others365,554289,902¥ 6,533,203¥ 6,668,992

Total property-related expenses
Gain on sale of real estate property:
Revenue from sale of investment property

11,470,000

4,800,000

Cost of investment property

9,899,061

4,214,661

60,770123,973

1,510,169

461,366

Other sales expenses
Gain on sale of real estate property
Loss on sale of real estate property:
Revenue from sale of investment property

3,950,000

960,000

Cost of investment property

4,692,834

1,094,481

Other sales expenses
Loss on sale of real estate property

32

From May 1, 2015
to October 31, 2015

23,171¥

766,005

31,210¥165,6913312.

(B) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of financial instruments on the balance sheet as of April 30, 2016 and estimated fair value are shown in the following table.

LEASES

The Investment Corporation, as lessor, has entered into leases whose fixed monthly rents are due in advance with lease terms of generally two
years for office buildings and residential properties and with lease terms ranging from two to ten years for retail properties. The future minimum
rental revenues under existing non-cancelable operating leases as of April 30, 2016 and October 31, 2015 are as follows:

In thousands of yen
Carrying value햲 Cash and bank deposits

In thousands of yen
As of April 30, 2016

As of October 31, 2015

Due within one year

¥ 1,486,303¥ 1,759,328

Due after one year

9,544,086

9,540,266

Total¥11,030,389¥11,299,594

13.

The following table does not include financial instruments for which it is extremely difficult to determine the fair value (Refer to *2 below).

SubtotalTwenty-second Fiscal Period (November 1, 2015 to April 30, 2016)(A) OVERVIEW(1) POLICY FOR FINANCIAL INSTRUMENTS
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily through bankloans and the issuance of corporate bonds and new investment units. The Investment Corporation uses derivatives for the purpose of hedging its
exposure to changes in interest rates and does not enter into derivatives for speculative or trading purposes. Management of surplus funds isundertaken in a prudent manner that considers fully such factors as safety, liquidity, interest rate conditions and cash flows.

¥ 20,602,996

Difference¥—

20,602,996

20,602,996—

햲 Short-term debt

2,500,000

2,500,000—

햳 Corporate bonds(including current portion of corporate bonds)

9,300,000

9,486,050

186,050

햴 Long-term debt(including current portion of long-term debt)

163,300,000

165,889,327

2,589,327¥175,100,000¥177,875,377¥2,775,377(4,328)(4,328)—Subtotal

FINANCIAL INSTRUMENTS

Estimated fair value¥ 20,602,996

Derivative Transactions (*)(*) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing net liability position.

*1: METHODS TO DETERMINE THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND OTHER MATTERS RELATED TO
SECURITIES AND DERIVATIVE TRANSACTIONSASSETS햲 Cash and bank deposits
Since these items are settled in a short period of time, their carrying value approximates fair value.

(2) TYPES OF FINANCIAL INSTRUMENTS AND RELATED RISK
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer and risk offluctuation of value of its property.
Debt and corporate bonds are used primarily for procuring funds necessary for the acquisition of properties and have a redemption date of a
maximum of approximately 12 years following the accounting date. Although a certain portion of said liabilities are subject to interest rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate swap and interest-rate cap transactions) in order to reduce such risk.
Interest-rate swap and interest-rate cap transactions are used as derivative financial instruments. Utilizing interest-rate swap and interest-rate
cap transaction, the Investment Corporation fixes its interest expense for long-term debt bearing interest at a variable rate. With regard to hedge
accounting methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please
see Note 2(K) “Derivative Financial Instruments”.

LIABILITIES햲 Short-term debt
Since these items are settled in a short period of time, their carrying value approximates fair value.
햳 Corporate bonds
The fair value of corporate bonds is based on quoted market prices.
햴 Long-term debt
The fair value of long-term debt is based on the present value of the total of principal and interest discounted by the interest rate to be applied if
similar new loans were entered into. The fair value of long-term debt bearing interest at a variable rate, which is subject to fixed interest rates
resulting from interest-rate swaps and special treatment applied to said swaps, is based on the present value of the total of principal and interest,
which is handled together with the applicable interest-rate swaps, discounted by the interest rate to be applied if similar loans were entered into.

(3) RISK MANAGEMENT FOR FINANCIAL INSTRUMENTS(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap and interest-rate cap transactions in order to minimize risk arising from fluctuations in interest
rates on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer withregard to investment securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled due
dates) associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates
and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.

(4) SUPPLEMENTARY EXPLANATION OF THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fairvalue is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different fair value.

DERIVATIVE TRANSACTIONS
Please refer to Note 14 “DERIVATIVE TRANSACTIONS”.

*2: FINANCIAL INSTRUMENTS FOR WHICH IT IS EXTREMELY DIFFICULT TO DETERMINE THE FAIR VALUEClassification

Carrying value (In thousands of yen)

Investment securities¥1,089,761

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are not included in thepreceding table.

*3: REDEMPTION SCHEDULE FOR RECEIVABLES
Due within 1 year or less
(In thousands of yen)

Cash and bank deposits¥20,602,996

Total¥20,602,996*4: REDEMPTION SCHEDULE FOR DEBT AND CORPORATE BONDS
In thousands of yen

34

Due within 1 year
or less

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Short-term debt

¥ 2,500,000

¥

¥

¥

¥

Corporate bonds

3,000,000

1,500,000

1,800,000——

3,000,000

Long-term debt

¥19,700,000¥19,250,000¥16,050,000¥14,700,000¥19,600,000¥74,000,000

—

—

—

—

Due after
5 years

¥

—

35

12.

(B) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of financial instruments on the balance sheet as of April 30, 2016 and estimated fair value are shown in the following table.

LEASES

The Investment Corporation, as lessor, has entered into leases whose fixed monthly rents are due in advance with lease terms of generally two
years for office buildings and residential properties and with lease terms ranging from two to ten years for retail properties. The future minimum
rental revenues under existing non-cancelable operating leases as of April 30, 2016 and October 31, 2015 are as follows:

In thousands of yen
Carrying value햲 Cash and bank deposits

In thousands of yen
As of April 30, 2016

As of October 31, 2015

Due within one year

¥ 1,486,303¥ 1,759,328

Due after one year

9,544,086

9,540,266

Total¥11,030,389¥11,299,594

13.

The following table does not include financial instruments for which it is extremely difficult to determine the fair value (Refer to *2 below).

SubtotalTwenty-second Fiscal Period (November 1, 2015 to April 30, 2016)(A) OVERVIEW(1) POLICY FOR FINANCIAL INSTRUMENTS
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily through bankloans and the issuance of corporate bonds and new investment units. The Investment Corporation uses derivatives for the purpose of hedging its
exposure to changes in interest rates and does not enter into derivatives for speculative or trading purposes. Management of surplus funds isundertaken in a prudent manner that considers fully such factors as safety, liquidity, interest rate conditions and cash flows.

¥ 20,602,996

Difference¥—

20,602,996

20,602,996—

햲 Short-term debt

2,500,000

2,500,000—

햳 Corporate bonds(including current portion of corporate bonds)

9,300,000

9,486,050

186,050

햴 Long-term debt(including current portion of long-term debt)

163,300,000

165,889,327

2,589,327¥175,100,000¥177,875,377¥2,775,377(4,328)(4,328)—Subtotal

FINANCIAL INSTRUMENTS

Estimated fair value¥ 20,602,996

Derivative Transactions (*)(*) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing net liability position.

*1: METHODS TO DETERMINE THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND OTHER MATTERS RELATED TO
SECURITIES AND DERIVATIVE TRANSACTIONSASSETS햲 Cash and bank deposits
Since these items are settled in a short period of time, their carrying value approximates fair value.

(2) TYPES OF FINANCIAL INSTRUMENTS AND RELATED RISK
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer and risk offluctuation of value of its property.
Debt and corporate bonds are used primarily for procuring funds necessary for the acquisition of properties and have a redemption date of a
maximum of approximately 12 years following the accounting date. Although a certain portion of said liabilities are subject to interest rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate swap and interest-rate cap transactions) in order to reduce such risk.
Interest-rate swap and interest-rate cap transactions are used as derivative financial instruments. Utilizing interest-rate swap and interest-rate
cap transaction, the Investment Corporation fixes its interest expense for long-term debt bearing interest at a variable rate. With regard to hedge
accounting methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please
see Note 2(K) “Derivative Financial Instruments”.

LIABILITIES햲 Short-term debt
Since these items are settled in a short period of time, their carrying value approximates fair value.
햳 Corporate bonds
The fair value of corporate bonds is based on quoted market prices.
햴 Long-term debt
The fair value of long-term debt is based on the present value of the total of principal and interest discounted by the interest rate to be applied if
similar new loans were entered into. The fair value of long-term debt bearing interest at a variable rate, which is subject to fixed interest rates
resulting from interest-rate swaps and special treatment applied to said swaps, is based on the present value of the total of principal and interest,
which is handled together with the applicable interest-rate swaps, discounted by the interest rate to be applied if similar loans were entered into.

(3) RISK MANAGEMENT FOR FINANCIAL INSTRUMENTS(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap and interest-rate cap transactions in order to minimize risk arising from fluctuations in interest
rates on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer withregard to investment securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled due
dates) associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates
and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.

(4) SUPPLEMENTARY EXPLANATION OF THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fairvalue is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different fair value.

DERIVATIVE TRANSACTIONS
Please refer to Note 14 “DERIVATIVE TRANSACTIONS”.

*2: FINANCIAL INSTRUMENTS FOR WHICH IT IS EXTREMELY DIFFICULT TO DETERMINE THE FAIR VALUEClassification

Carrying value (In thousands of yen)

Investment securities¥1,089,761

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are not included in thepreceding table.

*3: REDEMPTION SCHEDULE FOR RECEIVABLES
Due within 1 year or less
(In thousands of yen)

Cash and bank deposits¥20,602,996

Total¥20,602,996*4: REDEMPTION SCHEDULE FOR DEBT AND CORPORATE BONDS
In thousands of yen

34

Due within 1 year
or less

Due after 1 year
through 2 years

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Short-term debt

¥ 2,500,000

¥

¥

¥

¥

Corporate bonds

3,000,000

1,500,000

1,800,000——

3,000,000

Long-term debt

¥19,700,000¥19,250,000¥16,050,000¥14,700,000¥19,600,000¥74,000,000

—

—

—

—

Due after
5 years¥—

35

Twentieth-first Fiscal Period (May 1, 2015 to October 31, 2015)*1: METHODS TO DETERMINE THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND OTHER MATTERS RELATED TO
SECURITIES AND DERIVATIVE TRANSACTIONS(A) OVERVIEW(1) POLICY FOR FINANCIAL INSTRUMENTS
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily through bankloans and the issuance of corporate bonds and new investment units. The Investment Corporation uses derivatives for the purpose of hedging its
exposure to changes in interest rates and does not enter into derivatives for speculative or trading purposes. Management of surplus funds isundertaken in a prudent manner that considers fully such factors as safety, liquidity, interest rate conditions and cash flows.

ASSETS햲 Cash and bank deposits
Since these items are settled in a short period of time, their carrying value approximates fair value.

LIABILITIES(2) TYPES OF FINANCIAL INSTRUMENTS AND RELATED RISK햲 Short-term debt

Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer and risk offluctuation of value of its property.
Debt and corporate bonds are used primarily for procuring funds necessary for the acquisition of properties and have a redemption date of a
maximum of approximately ten years following the accounting date. Although a certain portion of said liabilities are subject to interest rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate swap and interest-rate cap transactions) in order to reduce such risk.
Interest-rate swap and interest-rate cap transactions are used as derivative financial instruments. Utilizing interest-rate swap and interest-rate
cap transactions, the Investment Corporation fixes its interest expense for long-term debt bearing interest at a variable rate. With regard tohedge accounting methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities,
please see Note 2 (K) “Derivative Financial Instruments”.

Since these items are settled in a short period of time, their carrying value approximates fair value.
햳 Corporate bonds
The fair value of corporate bonds is based on quoted market prices.
햴 Long-term debt
The fair value of long-term debt is based on the present value of the total of principal and interest discounted by the interest rate to be applied if
similar new loans were entered into. The fair value of long-term debt bearing interest at variable rates, which is subject to fixed interest rates
resulting from interest-rate swaps and special treatment applied to said swaps, is based on the present value of the total of principal and interest,
which is handled together with the applicable interest-rate swaps, discounted by the interest rate to be applied if similar loans were entered into.

DERIVATIVE TRANSACTIONS(3) RISK MANAGEMENT FOR FINANCIAL INSTRUMENTS

Please refer to Note 14 “DERIVATIVE TRANSACTIONS”.

(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap and interest-rate cap transactions in order to minimize risk arising from fluctuations in interest
rates on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer withregard to investment securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled due
dates) associated with funds procurement
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates
and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.

*2: FFINANCIAL INSTRUMENTS FOR WHICH IT IS EXTREMELY DIFFICULT TO DETERMINE THE FAIR VALUEClassification

Carrying value (In thousands of yen)

Investment securities¥1,100,235

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are not included in thepreceding table.

*3: REDEMPTION SCHEDULE FOR RECEIVABLES
Due within 1 year or less
(In thousands of yen)

(4) SUPPLEMENTARY EXPLANATION OF THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fairvalue is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different fair value.

Cash and bank deposits¥22,587,773

Total¥22,587,773*4: REDEMPTION SCHEDULE FOR DEBT AND CORPORATE BONDS(B) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
In thousands of yen

The carrying value of financial instruments on the balance sheet as of October 31, 2015 and estimated fair value are shown in the following
table. The following table does not include financial instruments for which it is extremely difficult to determine the fair value (Refer to *2 below).
Short-term debt

In thousands of yen

Subtotal

Due after 3 years
through 4 years

Due after 4 years
through 5 years¥ 2,500,000

¥

¥

¥

¥

—

—

—

—

Due after
5 years¥—

Estimated fair value

Difference

Corporate bonds—

4,500,000

1,800,000——

2,000,000¥

Long-term debt

¥30,800,000¥16,200,000¥16,750,000¥12,750,000¥18,600,000¥68,200,000—

22,587,773

22,587,773—

2,500,000

2,500,000—

햳 Corporate bonds(including current portion of corporate bonds)

8,300,000

8,474,360

174,360

햴 Long-term debt(including current portion of long-term debt)

163,300,000

163,761,383

461,383¥174,100,000¥174,735,743¥635,743———

Subtotal

Due after 2 years
through 3 years¥ 22,587,773

햲 Short-term debt

Derivative Transactions (*)

Due after 1 year
through 2 years¥ 22,587,773

Carrying value햲 Cash and bank deposits

Due within 1 year
or less(*) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing net liability position.

36

37

Twentieth-first Fiscal Period (May 1, 2015 to October 31, 2015)*1: METHODS TO DETERMINE THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS AND OTHER MATTERS RELATED TO
SECURITIES AND DERIVATIVE TRANSACTIONS(A) OVERVIEW(1) POLICY FOR FINANCIAL INSTRUMENTS
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily through bankloans and the issuance of corporate bonds and new investment units. The Investment Corporation uses derivatives for the purpose of hedging its
exposure to changes in interest rates and does not enter into derivatives for speculative or trading purposes. Management of surplus funds isundertaken in a prudent manner that considers fully such factors as safety, liquidity, interest rate conditions and cash flows.

ASSETS햲 Cash and bank deposits
Since these items are settled in a short period of time, their carrying value approximates fair value.

LIABILITIES(2) TYPES OF FINANCIAL INSTRUMENTS AND RELATED RISK햲 Short-term debt

Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer and risk offluctuation of value of its property.
Debt and corporate bonds are used primarily for procuring funds necessary for the acquisition of properties and have a redemption date of a
maximum of approximately ten years following the accounting date. Although a certain portion of said liabilities are subject to interest rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate swap and interest-rate cap transactions) in order to reduce such risk.
Interest-rate swap and interest-rate cap transactions are used as derivative financial instruments. Utilizing interest-rate swap and interest-rate
cap transactions, the Investment Corporation fixes its interest expense for long-term debt bearing interest at a variable rate. With regard tohedge accounting methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities,
please see Note 2 (K) “Derivative Financial Instruments”.

Since these items are settled in a short period of time, their carrying value approximates fair value.
햳 Corporate bonds
The fair value of corporate bonds is based on quoted market prices.
햴 Long-term debt
The fair value of long-term debt is based on the present value of the total of principal and interest discounted by the interest rate to be applied if
similar new loans were entered into. The fair value of long-term debt bearing interest at variable rates, which is subject to fixed interest rates
resulting from interest-rate swaps and special treatment applied to said swaps, is based on the present value of the total of principal and interest,
which is handled together with the applicable interest-rate swaps, discounted by the interest rate to be applied if similar loans were entered into.

DERIVATIVE TRANSACTIONS(3) RISK MANAGEMENT FOR FINANCIAL INSTRUMENTS

Please refer to Note 14 “DERIVATIVE TRANSACTIONS”.

(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap and interest-rate cap transactions in order to minimize risk arising from fluctuations in interest
rates on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer withregard to investment securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled due
dates) associated with funds procurement
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates
and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.

*2: FFINANCIAL INSTRUMENTS FOR WHICH IT IS EXTREMELY DIFFICULT TO DETERMINE THE FAIR VALUEClassification

Carrying value (In thousands of yen)

Investment securities¥1,100,235

Because no quoted market price is available and it is extremely difficult to determine the fair value, the above TK interests are not included in thepreceding table.

*3: REDEMPTION SCHEDULE FOR RECEIVABLES
Due within 1 year or less
(In thousands of yen)

(4) SUPPLEMENTARY EXPLANATION OF THE ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fairvalue is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different fair value.

Cash and bank deposits¥22,587,773

Total¥22,587,773*4: REDEMPTION SCHEDULE FOR DEBT AND CORPORATE BONDS(B) ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
In thousands of yen

The carrying value of financial instruments on the balance sheet as of October 31, 2015 and estimated fair value are shown in the following
table. The following table does not include financial instruments for which it is extremely difficult to determine the fair value (Refer to *2 below).
Short-term debt

In thousands of yen

Subtotal

Due after 3 years
through 4 years

Due after 4 years
through 5 years¥ 2,500,000

¥

¥

¥

¥

—

—

—

—

Due after
5 years¥—

Estimated fair value

Difference

Corporate bonds—

4,500,000

1,800,000——

2,000,000¥

Long-term debt

¥30,800,000¥16,200,000¥16,750,000¥12,750,000¥18,600,000¥68,200,000—

22,587,773

22,587,773—

2,500,000

2,500,000—

햳 Corporate bonds(including current portion of corporate bonds)

8,300,000

8,474,360

174,360

햴 Long-term debt(including current portion of long-term debt)

163,300,000

163,761,383

461,383¥174,100,000¥174,735,743¥635,743———

Subtotal

Due after 2 years
through 3 years¥ 22,587,773

햲 Short-term debt

Derivative Transactions (*)

Due after 1 year
through 2 years¥ 22,587,773

Carrying value햲 Cash and bank deposits

Due within 1 year
or less(*) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing net liability position.

36

37

The Investment Corporation owns real estate for rental purposes mainly in the Tokyo Metropolitan Area for the purpose of generating rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:

14.

Carrying value (In thousands of yen)

DERIVATIVE TRANSACTIONS

The following summarizes the contracted amount and the fair value of interest-rate swap and the interest-rate cap contracts as of April 30, 2016:
햲 Hedge accounting not applied
Not applicable햳 Hedge accounting applied
Hedge accounting
methodType of derivativetransactions

Contracted amount(In thousands of yen)

Hedged items

Maturing after 1 year

Principle method

Interest-rate swaps:
Receive/floating andpay/fixed

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Receive/floating andpay/fixed

Long-term debt

Special treatment ofinterest-rate caps

Interest-rate caps
transaction

Long-term debt

Long-term debt¥

1,000,000¥

1,000,000

Fair value(In thousands of yen)Calculation method for
applicable fair value¥(4,328)

Based on theamount provided
by counterparty
financial institutions¥109,350,000¥102,150,000

As of October 31, 2015

Fair value As of October 31, 2015
(In thousands of yen)

¥379,905,814¥1,560,827¥381,466,641¥392,422,000

Notes: 1. The carrying value represents the acquisition cost less accumulated depreciation.
2: The fair value is the appraisal value or the survey value determined by outside appraisers.
3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal increases and decreases were
the acquisition of two properties totaling ¥8,621,306 thousand, the sale of two properties totaling ¥5,309,142 thousand and depreciation amounting to¥2,218,871 thousand.

Income and loss in the fiscal period ended October 31, 2015 for real estate for rental purposes is listed in Note 11. “BREAKDOWN OF RENTALAND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY”.

16.

SEGMENT AND RELATED INFORMATION

2,000,000

500,000¥112,350,000¥103,650,000(A) SEGMENT INFORMATION*

Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment subject to disclosure.

*¥(4,328)(*) Interest-rate swaps and interest-rate caps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, theirfair value is included in the fair value of the hedged long-term debt.

The following summarizes the contracted amount and the fair value of interest-rate swap and the interest-rate cap contracts as of October 31, 2015:
햲 Hedge accounting not applied
Not applicable햳 Hedge accounting applied
Contracted amount(In thousands of yen)Type of derivativetransactions

Hedged items

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Receive/floating andpay/fixed

Long-term debt

¥ 98,050,000

Special treatment ofinterest-rate caps

Interest-rate caps
transaction

Long-term debt

Fair value(In thousands of yen)Calculation method for
applicable fair value¥92,050,000*—

3,000,000

500,000*—¥101,050,000¥92,550,000

Maturing after 1 year(B) RELATED INFORMATION(1) INFORMATION ABOUT EACH PRODUCT AND SERVICE
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income.

(2) INFORMATION ABOUT EACH GEOGRAPHIC AREA(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income.
(b) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounts for over 90% of the amount of property andequipment on the balance sheet.

(3) INFORMATION ABOUT EACH MAJOR CUSTOMER

Total

INVESTMENT AND RENTAL PROPERTIES

Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo Metropolitan Area for the purpose of generating rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value (In thousands of yen)Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement of income.
Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015)(*) Interest-rate swaps and interest-rate caps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, theirfair value is included in the fair value of the hedged long-term debt.

15.

Net change

Twenty-second Fiscal Period(November 1, 2015 to April 30, 2016)

Total

Hedge accounting
methodAs of April 30, 2015

As of October 31, 2015

Net change

As of April 30, 2016

Fair value As of April 30, 2016
(In thousands of yen)

¥381,466,641¥3,618,614¥385,085,255¥402,555,000

notes: 1. The carrying value represents the acquisition cost less accumulated depreciation.
2: The fair value is the appraisal value or the survey value determined by outside appraisers.
3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal increases and decreases were
the acquisition of two properties totaling ¥19,321,019 thousand, the sale of two properties totaling ¥14,591,896 thousand and depreciation amounting to¥2,230,747 thousand.

Income and loss in the fiscal period ended April 30, 2016 for real estate for rental purposes is listed in Note 11. “BREAKDOWN OF RENTAL AND
OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY”.

(A) SEGMENT INFORMATION
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment subject to disclosure.

(B) RELATED INFORMATION(1) INFORMATION ABOUT EACH PRODUCT AND SERVICE
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income.

(2) INFORMATION ABOUT EACH GEOGRAPHIC AREA(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income.
(b) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounts for over 90% of the amount of property andequipment on the balance sheet.

(3) INFORMATION ABOUT EACH MAJOR CUSTOMER
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement of income.

Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015)17.

SUBSEQUENT EVENTS

Not applicable.

38

39

The Investment Corporation owns real estate for rental purposes mainly in the Tokyo Metropolitan Area for the purpose of generating rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:

14.

Carrying value (In thousands of yen)

DERIVATIVE TRANSACTIONS

The following summarizes the contracted amount and the fair value of interest-rate swap and the interest-rate cap contracts as of April 30, 2016:
햲 Hedge accounting not applied
Not applicable햳 Hedge accounting applied
Hedge accounting
methodType of derivativetransactions

Contracted amount(In thousands of yen)

Hedged items

Maturing after 1 year

Principle method

Interest-rate swaps:
Receive/floating andpay/fixed

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Receive/floating andpay/fixed

Long-term debt

Special treatment ofinterest-rate caps

Interest-rate caps
transaction

Long-term debt

Long-term debt¥

1,000,000¥

1,000,000

Fair value(In thousands of yen)Calculation method for
applicable fair value¥(4,328)

Based on theamount provided
by counterparty
financial institutions¥109,350,000¥102,150,000

As of October 31, 2015

Fair value As of October 31, 2015
(In thousands of yen)

¥379,905,814¥1,560,827¥381,466,641¥392,422,000

Notes: 1. The carrying value represents the acquisition cost less accumulated depreciation.
2: The fair value is the appraisal value or the survey value determined by outside appraisers.
3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal increases and decreases were
the acquisition of two properties totaling ¥8,621,306 thousand, the sale of two properties totaling ¥5,309,142 thousand and depreciation amounting to¥2,218,871 thousand.

Income and loss in the fiscal period ended October 31, 2015 for real estate for rental purposes is listed in Note 11. “BREAKDOWN OF RENTALAND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY”.

16.

SEGMENT AND RELATED INFORMATION

2,000,000

500,000¥112,350,000¥103,650,000(A) SEGMENT INFORMATION*

Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment subject to disclosure.

*¥(4,328)(*) Interest-rate swaps and interest-rate caps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, theirfair value is included in the fair value of the hedged long-term debt.

The following summarizes the contracted amount and the fair value of interest-rate swap and the interest-rate cap contracts as of October 31, 2015:
햲 Hedge accounting not applied
Not applicable햳 Hedge accounting applied
Contracted amount(In thousands of yen)Type of derivativetransactions

Hedged items

Special treatment ofinterest-rate swaps

Interest-rate swaps:
Receive/floating andpay/fixed

Long-term debt

¥ 98,050,000

Special treatment ofinterest-rate caps

Interest-rate caps
transaction

Long-term debt

Fair value(In thousands of yen)Calculation method for
applicable fair value¥92,050,000*—

3,000,000

500,000*—¥101,050,000¥92,550,000

Maturing after 1 year(B) RELATED INFORMATION(1) INFORMATION ABOUT EACH PRODUCT AND SERVICE
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income.

(2) INFORMATION ABOUT EACH GEOGRAPHIC AREA(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income.
(b) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounts for over 90% of the amount of property andequipment on the balance sheet.

(3) INFORMATION ABOUT EACH MAJOR CUSTOMER

Total

INVESTMENT AND RENTAL PROPERTIES

Twenty-second Fiscal Period (November 1, 2015 to April 30, 2016)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo Metropolitan Area for the purpose of generating rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value (In thousands of yen)Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement of income.
Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015)(*) Interest-rate swaps and interest-rate caps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, theirfair value is included in the fair value of the hedged long-term debt.

15.

Net change

Twenty-second Fiscal Period(November 1, 2015 to April 30, 2016)

Total

Hedge accounting
methodAs of April 30, 2015

As of October 31, 2015

Net change

As of April 30, 2016

Fair value As of April 30, 2016
(In thousands of yen)

¥381,466,641¥3,618,614¥385,085,255¥402,555,000

notes: 1. The carrying value represents the acquisition cost less accumulated depreciation.
2: The fair value is the appraisal value or the survey value determined by outside appraisers.
3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal increases and decreases were
the acquisition of two properties totaling ¥19,321,019 thousand, the sale of two properties totaling ¥14,591,896 thousand and depreciation amounting to¥2,230,747 thousand.

Income and loss in the fiscal period ended April 30, 2016 for real estate for rental purposes is listed in Note 11. “BREAKDOWN OF RENTAL AND
OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY”.

(A) SEGMENT INFORMATION
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment subject to disclosure.

(B) RELATED INFORMATION(1) INFORMATION ABOUT EACH PRODUCT AND SERVICE
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income.

(2) INFORMATION ABOUT EACH GEOGRAPHIC AREA(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income.
(b) Property and equipment
Disclosure is omitted because the amount of property and equipment located in Japan accounts for over 90% of the amount of property andequipment on the balance sheet.

(3) INFORMATION ABOUT EACH MAJOR CUSTOMER
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement of income.

Twenty-first Fiscal Period (May 1, 2015 to October 31, 2015)17.

SUBSEQUENT EVENTS

Not applicable.

38

39

Unitholders’ Information
Kenedix Office Investment Corporation
Fiscal Periods:
Stock Listing:Transfer Agent:
Auditor:Six months ending April 30 and October 31
Real Estate Investment Trust Market of the Tokyo Stock Exchange (Securities Code: 8972)
Sumitomo Mitsui Trust Bank, Limited
Ernst & Young ShinNihon LLC

IR Schedule (22nd and 23rd fiscal periods)
Apr.
2016

Jun.
2016

Jul.
2016

Oct.
2016

Dec.
2016

Jan.
2017

End of 22nd
fiscal period

Performance for22nd fiscal period
is announced

Distributions for22nd fiscal period
are paid

End of 23rd
fiscal period

Performance for23rd fiscal period
will be announced

Distributions for23rd fiscal period
will be paid

General Breakdown of Unitholders
Foreign corporations
and individuals
End of 22nd
fiscal period

Other domestic
corporations

Financial institutions(including securities companies)

39.9%

1.2%

54.8%

161,501 units

4,707 units

221,728 units

37.6%

1.3%

56.4%

152,138 units

5160 units

228,186 units

End of 21stfiscal period

Individuals
and others
Total
404,885 units

4.2%
16,949 units

Total
404,885 units

4.8%
19,401 units

Notes: The ratios are rounded to the first decimal place.

Top Ten Unitholders (As of April 30, 2016)# of Units Held

NameJapan Trustee Services Bank, Ltd. (Trust Account)

Percentage Share(Unit)(Note)

65,25616.11%

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

57,24414.13%The Master Trust Bank of Japan, Ltd. (Trust Account)

43,00310.62%

Nomura Bank (Luxemburg) S.A.

23,1095.70%

The Nomura Trust and Banking Co., Ltd. (Investment Trust Account)

19,533

4.82%

The Bank of New York Mellon SA/NV 10

11,643

2.87%

State Street Bank and Trust Company 505223

8,951

2.21%

State Street Bank and Trust Company 505001

6,289

1.55%

MSIP CLIENT SECURITIES

5,529

1.36%

State Street Bank and Trust Company

5,475

1.35%

246,032

60.76%

Total
Note: The ratios are rounded down to the second decimal place.

Unit Price and Trading Volume
20,000s !S OF -AY   ¬(IGHEST PRICE TRADING PRICE  c  -AY  ¬,OWEST PRICE TRADING PRICE  c  /CTOBER  1,000,000

11,000s !VERAGE TRADING VOLUME DURING ND FISCAL PERIOD     UNITS

900,000(Units)Closing Price

Trading Volume

(Yen)

8,000

800,000

7,000

700,000

6,000

600,000

5,000

500,000

4,000

400,000

3,000

300,000

2,000

200,000

1,000

100,000

0

0
2005

40

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

http://www.kdo-reit.com/en/

Disclaimer:This semiannual report includes translations of certain documents originally filed and made available in Japan in accordance with the Securities andExchange Law of Japan.
The English language semiannual report was prepared solely for the convenience of readers outside Japan and is not intended to constitute a prospectus. This semiannual report should not be construed as an offer or solicitation to buy or sell any securities of Kenedix Office Investment
Corporation (KDO). English terms for Japanese legal, accounting, tax and business concepts used herein may not be precisely identical to the conceptof the equivalent Japanese terms. With respect to any and all terms herein, including without limitation, financial statements, if there exist any discrepancies in the meaning or interpretation thereof between the original Japanese documents and English translation contained herein, the original
Japanese documents will always govern the meaning and interpretation.
None of KDO, Kenedix Real Estate Fund Management, Inc., any of their respective directors, officers, employees, partners, unitholders, agents,
affiliates nor their advisors shall be responsible or liable for the completeness, appropriateness, or accuracy of English translations or the selection of
the portion(s) of any document(s) translated into English.
The financial statements of KDO have been prepared in accordance with generally accepted accounting principles in Japan (Japanese GAAP),
which may materially differ in certain respects from generally accepted accounting principles of other jurisdictions.
This semiannual report contains forward-looking statements. These statements appear in a number of places in this semiannual report andinclude statements regarding the intent, belief, or current and future expectations of KDO or Kenedix Real Estate Fund Management, Inc. withrespect to its business, financial condition and results of operations. In some cases, you can identify forward-looking statements by terms such as“may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “believe,” ”estimate,” “predict,” “potential,” or the negative of these terms orother similar terminology. These statements are not guarantees of future performance and are subject to various risks and uncertainties. Actual
results, performance or achievements, or those of the industries in which we operate, may differ materially from any future results, performance or
achievements expressed or implied by these forward-looking statements. In addition, these forward-looking statements are necessarily dependent
upon assumptions, estimates and data that may be incorrect or imprecise and involve known and unknown risks and uncertainties. Accordingly, readers of this document should not interpret the forward-looking statements included herein as predictions or representations of future events or circumstances.
Potential risks and uncertainties also include those identified and discussed in this document. Given these risks and uncertainties, readers of thisdocument are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of information produced herein.
We disclaim any obligation to update or, except in the limited circumstances required by the Tokyo Stock Exchange, announce publicly any revisions
to any of the forward-looking statements contained in these documents.