Semi-annual Reportfor the 12th Period

From August 1, 2017 to Januar y 31, 2018

Security code3278

I Overview of KDR

To our unitholders
We sincerely hope that this semi-annual report finds our unitholders prospering and in good
health. We would like to take this opportunity to thank you for your continued support of
Kenedix Residential Next Investment Corporation (KDR).
For the 12th fiscal period (from August 1, 2017 to January 31, 2018), operating revenue totaled
5,681 million yen, operating income was 2,889 million yen, ordinary income was 2,353 million
yen and net income was 2,352 million yen. The distribution to unitholders was 6,946 yen per unit,
4.7% higher than in the previous period. We acquired KDX Residence Toyosu, a newly
constructed building located in Tokyo’s 23 wards, and KDX Residence Nishijin in the city of

Fukuoka (total acquisition price of these two rental properties: 9.1 billion yen). Our properties
continue to perform well. The average occupancy rate in the 12th fiscal period was 96.7%, theoccupancy rate of end of the period was 97.0% and the rent of new tenants and renewal tenants
increased.
We merged with Japan Senior Living Investment Corporation to focus on healthcare facilities
such as homes for the elderly and changed its name from Kenedix Residential Investment
Corporation to Kenedix Residential Next Investment Corporaition.
Based on an accurate understanding of social and economic changes, we will pursue withflexibility investment and revenue opportunities that we believe are the most attractive. We will
dynamically invest and manage our portfolio by gathering information and making decisions
swiftly. By using this approach, we aim to maximize returns for investors.
We respectfully look forward to your continued support.

Executive Director,
Kenedix Residential Next Investment Corporation
Director & COO, Head of Residential REIT Department,
Kenedix Real Estate Fund management, Inc.

Keisuke Sato

Financial Highlights

Distribution per Unit

6,946 yen
3,570 yen
3,640 yen

Highest12th (Ended January 2018)

13th (Ending July 2018)
14th (Ending January 2019)(After the unit split
3,473 yen)

(Note) Distribution per unit for 13th fiscal
period and 14th fiscal period is
estimated based on certain
assumptions as of March 14, 2018. A
2-for-1 split of investment units was
implemented with March 1, 2018 as
the effective date.

Business Results
Operating Revenues(mln yen)
Operating Income(mln yen)
Ordinary Income(mln yen)
Net Income(mln yen)
Number ofInvestment Units
IssuedDistribution per Unit(yen)

9th Period(July 2016)

10th Period(January 2017)11th Period(July 2017)

5,333

5,468

5,574

5,681

6,593

6,738

2,723

2,838

2,833

2,889

2,940

3,400

2,193

2,311

2,316

2,353

2,393

2,844

2,192

2,310

2,315

2,352

4,802

2,843

349,089

349,089

349,089

349,089

782,928

782,928

6,360

6,533

6,633

6,946

3,570

3,640

units

units

units

12th Period 13th Period (1) 14th Period (1)(January 2018) (July 2018) (January 2019)

units(after the unit
split 3,473 yen)

units

units

(Note 1) Figures for 13th fiscal period and 14th fiscal period are estimated based on certain assumptions as of March 14, 2018. Thes eestimates are not guarantees of future performance because results of operations may be affected by changes in rental revenue
caused by the departure of tenants, sales and purchases of properties, interest rate fluctuations, issuing investment units, and oth er
reasons. These estimates are based on Financial Report for the Fiscal Period Ended January 31, 2018 (REIT) as of March 14 ,2018. A
2-for-1 split of investment units was implemented with March 1, 2018 as the effective date.

Financial Position
9th Period(July 2016)
Unitholders’Equity (mln yen)Interest-bearing
Debt (mln yen)Interest-bearing
Debt Ratio to
Assets Ratio(1)Total Asset (mlnyen)
Net Asset Ratio
Unitholders’Equity per Unit(yen)

10th Period(January 2017)11th Period(July 2017)12th Period(January 2018)82,36582,55282,55982,65074,80081,80081,80091,130

46.8％

48.9％

48.9％

51.5％

159,948

167,276

167,316

176,81351.5％
235,94349.4％
236,47849.3％
236,498

46.7％
236,759(Note 1) Interest-bearing Debt to Assets Ratio ＝Interest-bearing debt at the end of period / Total assets at the end of period×100

Overview of the Merger and Strategy for Growth
KDR decided the merger with Japan Senior Living Investment Corporation (JSL) to focus on healthcare
facilities. The merger took place on March 1, 2018. KDR changed its name from Kenedix Residential
Investment Corporation to Kenedix Residential Next Investment Corporation. In addition, KDR revised its
articles of incorporation to change its investment policy by adding healthcare facilities andaccommodations to residential facilities as the main investment targets.

■ Advantages of the Merger
Advantage II
Increase in DPU by reducing
redundant expenses, etc.
Period ended January 2018 Actual

Increase in asset size

¥164.1 bln

Highest▼¥193.1¥6,946After the unit split ¥3,473(Period on Period +4.7%)

bln

Period ending July 2018 Forecast¥3,570

Increase in market capitalization(Period on Period +2.8%)¥100.7 bln

Period ending January 2019 Forecast▼¥120.4

Advantage III
Improvement in financial indicators andacquisition of negative goodwill (2)¥3,640bln(Period on Period +2.0%)

LTV

51.5 %▼

Advantage I
Increase in assets and market
capitalization (1)50.1%

NAV per unit

¥153,716▼¥156,998
Negative goodwill

¥2.4

bln

Note 1: Assets and Market capitalization are as of November 10, 2017 and March 1, 2018.
Note 2: LTV and NAV per unit are as of January 31, 2018 and the estimated figures as of March 1, 2018. Negative goodwill is the estimate as of March 15,
2018.

■ Management System for Healthcare Facilities
KDR has established a management system with the required expertise for healthcare facilities for the
management of properties that were owned by JSL. Following the merger with JSL, KDR plans to makemore investments in healthcare facilities as one of its main investment targets.
Katsue Okuda, who was an executive director of JSL, and Soichiro Iwao, who was a supervisory directorof JSL, were appointed as an executive director and supervisory director of KDR, respectively, at KDR’s
5th general meeting of unitholders. They will oversee KDR’s operations with Keisuke Sato, who is an
executive director, and Osamu Chiba and Satoshi Ogawa, who are supervisory directors, at KDR as
before.
The Healthcare Investment Management Division was established on March 1, 2018 in the Residential
REIT Department of Kenedix Real Estate Fund Management, Inc., the asset management company for
KDR. The new division is responsible for investment and asset management for healthcare facilities.
The staff of this division includes people from the Investment Management Department of Japan
Senior Living Partners, Inc., the asset management company for JSL and other companies. As a result,the Healthcare Investment Management Division has people with expertise and experience involving
healthcare facility investments and asset management.
Furthermore, KDR has acquired a construction of support system by adding JSL support companies
Shinsei Bank, Limited, Mitsubishi UFJ Trust and Banking Corporation, HASEKO Corporation and LIXILGroup Corporation to KDR’s support companies.
① Executive Director Keisuke Sato
② Executive Director Katsue Okuda③ Supervisory Director Osamu Chiba④ Supervisory Director Satoshi Ogawa
③

⑤

①

②

④

⑤ Supervisory Director Soichiro Iwao

Overview of the Merger and Strategy of Growth■ Future Investment Policy

KDR changed its articles of incorporation by adding healthcare facilities and accommodations to residential
facilities as main investment targets after this revision was approved at KDR’s 5th general meeting ofunitholders held on January 25, 2018.
KDR will be in a position to take advantage of the characteristics of many types of assets — residential
facilities, healthcare facilities and accommodation. By investing in these “spaces where people live and stay,”
KDR is aiming for stable rental revenue and steady asset growth to maximize unitholders’ profits.

Investment Target by Use
Use
Residential
Facilities
Healthcare
Facilities
Accommodati
ons
Other

TargetRatio
60% andover
20% andlower
20% andlower
10% andlower

Investment Target by Area
Ratio of Use after
the Merger(as of March 1, 2018)

Residential
Facilities

84.1%
Healthcare Facilities

Area

Tokyo
Metropolitan
Area

TargetRatio

Ratio of Area after
the Merger (1)(as of March 1, 2018)

Tokyo Metropolitan
Area

50% and
over

64.9%

Other Regional Areas

34.4%

15.0%

Other 0.9%

Others 0.7%

Note 1 : Tokyo Metropolitan Area includes Tokyo, Kanagawa, Saitama and Chiba.
Other Regional Areas include government-designed municipalities and other regional cities.

For more growth in assets, KDR has preferential negotiating rights for the acquisition of four residential rental
properties (total appraisal value: 14.4 billion yen) by establishing two bridge funds for residential facilities. For
healthcare facilities, KDR has preferential negotiating rights for the acquisition of five intermediate nursing
homes (total appraisal value: 11.9 billion yen) due to the receipt of JSL’s bridge fund. KDR’s goal is to use
these preferential negotiating rights to achieve continuous external growth.
G.K. Tropic I

G.K. Tropic II

Residential
Facilities

Number of Properties

9 props

KDX Residence Asagaya

Location
Property type
Leasable units
Appraisal value (1)Appraisal NOI cap
rate (1)

Pipeline by
Bridge Funds(2)KDX Residence Hiyoshi

Small family
44 units¥2.0 bln

Yokohama-shi,
Kanagawa
Family92 units¥2.5 bln

4.4%

5.4%

Suginami-ku, Tokyo

Serenite Kobe
Motomachi

KDX Residence
Shukugawa Hills

Studio138 units¥2.5 bln

Nishinomiya-shi,
Hyogo
Family238 units¥7.3 bln

5.0%

4.8%

Kobe-shi, Hyogo

Total Appraisal Value¥26.4 bln
Average Appraisal
NOI Cap Rate

5.1 %G.K. KSLF8

Healthcare
Facilities

Location
Property type
Leasable units
Appraisal value(1)Appraisal NOI cap
rate (1)Anesis Teradacho
Rococo-riha
Orage Suma
Canadian Hill
Osaka-shi, Osaka
Toyonaka-shi, Osaka
Kobe-shi, Hyogo
Kobe-shi, Hyogo
Intermediate nursing Intermediate nursing Intermediate nursing Intermediate nursing
homes
homes
homes
homes
250 (Fee-based homes for
135 (Serviced housing for
100
115
the elderly (with nursingcare) :100）

the elderly:35)

Anesis Hyogo
Kobe-shi, Hyogo
Intermediate nursing
homes
100

¥3.6 bln¥2.1 bln¥2.8 bln¥1.8 bln¥1.4 bln

5.2%

5.2%

5.5%

5.0%

5.4%

Note 1: Appraisal value is the appraisal value on June 30, 2017 for KDX Residence Shukugawa Hills, on July 1, 2017 for KDX Residence Asagaya, KDX Residence
Hiyoshi and Serenite Kobe Motomachi and on March 1, 2018 for healthcare facilities. Appraisal NOI cap rate=NOI in the Appraisal Report / Appraisal value
Note 2: Conditions for the purchase of bridge funds:
G.K. Tropic I and G.K. Tropic II: i) Date of acquisition is before the end of the preferential negotiation term (February 28, 2019). ii) The desired purchase price isreasonably anticipated to be a price that achieves the target internal rate of return (IRR) of the operator. G.K. KSLF8: i) Date of acquisition is before March 29,
2020. ii) Total of the desired purchase price is more than the lowest purchase price (¥11.6 billion) agreed to with the operator.

Overview of the Merger and Strategy of Growth■ Increasing Value for Unitholders

KDR aims to increase value for unitholders by increasing assets, increasing market capitalization, andmaintaining and increasing DPU.
For asset growth, KDR has the medium-term goal of 300 billion yen by making carefully selected investments
and replacing assets to improve in the stability of its portfolio.

New Target

Total acquisition price (¥bln) (Residential

Healthcare

300

Other )

Number of properties

Former Target
193.1

200

164.1
145.8
122.1
129

99.0

80

92

115

103

30.4
20
Jul.
2012

Jan.
2014

Jan.
2015

Jul.
2015

Jan.
2018

Mar.
2018

To increase market capitalization, KDR aims to be included in global indexes (FTSE EPRA/NAREIT Global Real
Estate Index Series), increase the number of unitholders and improve the liquidity of its investment units.
To maintain and increase DPU, KDR aims to increase DPU by using external growth, internal growth and the
reduction of financial and other expenses. Furthermore, KDR aims to increase DPU by using earnings fromsales of properties.
KDR will record negative goodwill (1) of approximately 2.4 billion yen in the 13th fiscal period (ending July2018). KDR will distribute part of this goodwill to unitholders and allocate the remainder to the reserve fortemporary difference adjustment (RTA) or the earnings surplus. For the RTA, 1% of this reserve is amortizedcompensation for distribution in every fiscal period starting with the 14th fiscal period (ending January 2019).
Furthermore, if temporary expenses or losses reduce DPU, KDR will offset this DPU decline by using RTA or theearnings surplus for these distributions. By using these measures, KDR aims to maintain a DPU of at least
3,640 yen after the fiscal period ending January 2019 (2).
EPU（1）+RTA
compensation≧¥3,640

Former Target ¥3,550¥3,570¥3,473¥3,115¥3,180¥3,266¥3,640①Amortizedcompensationof RTA

Increase
DPU¥3,316EPU（1）+RTA
compensation＜ ¥3,640
Additional
compensation for
shortage to ¥3,640②Additional
Compensation

Increase DPU
by earnings bysales ofproperties

EPU①Amortizedcompensationof RTA
EPU

Jan.
2016
(8th)

Jul.
Jan.
Jul.
Jan.
Jul.
Jan.
2016 2017 2017 2018 2018 2019(9th) (10th) (11th) (12th) (13th) (14th)(Foreca (Forecast)st)Note 1:

Note 1: The amount of negative goodwill is the estimate as of March 15, 2018 and may be revised afterward.
Note 2: The actual dividends will be decided by the KDR’s board

Exclude the item which isn’t revenue on taxation.

¥3,640Internal Growth

Sound Performance
The occupancy rate continues to be high mainly in the Tokyo Metropolitan Area. This rate was 96.7%,
the same as in the 11th fiscal period even though the 12th period does not include the peak months ofMarch and April. Rent for both new and renewal tenants continues to increase.

■ Occupancy Rates by Area
Total

100.0%

Tokyo Metropolitan Area

Other Regional Areas

97.5%

95.0%

92.5%

Ave. of 2H 2016
95.7%

90.0%
th

Average of period

10

Period (2H 2016)

Ave. of 2H 2017

Ave. of 1H 2017
96.7%
th

11

96.7%

Period (1H 2017)12thPeriod (2H 2017)

4th 5th 6th 7th 8th 9th Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug.Sep. Oct. Nov.Dec. Jan.

■ Occupancy Rates by Apartment Type
Small Family

Studio100.0%

Family

97.5%

95.0%

92.5%

90.0%

10th Period (2H 2016)

Average of period
th

4

th

5

th

6

th

7

th

8

th

9

11th Period (1H 2017)12th Period (2H 2017)

Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug.Sep. Oct. Nov.Dec. Jan.

■ Rent Increase/Decline (New Tenants) ■ Rent Increase/Decline (Renewal Tenants)（thousand yen） ■ Increase
3,000

Net

1,560
1,018

830

1,628
1,149
411

0
-1,000-2,000（thousand yen）
500

■ Increase■ Decline

2,181

2,000
1,000

■ Decline

1,427

1,052

1,530

-670

-903

-1,625 -1,500-641-1,21772-1,355 -1,129

-924

-65

131

-65

166

-105

279
202

278

278
244

141
-61

-1

-34

204
185

142
142

-19

-250

-1,790-2,463-3,000

131

606
0

-607

271

250

Net

-500

Percentage of Increase/Decline of rent of new tenants(1)-0.9% -1.0% -0.9% -0.9% 0.5%
0.1%
1.1%
0.7%

Percentage of Increase/Decline of rent of renewal tenants(1)-0.1% 0.2%
0.1%
0.1%
0.2%
0.2%
0.1%
0.1%

1H
2014

1H
2014

2H
2014

1H
2015

2H
2015

1H
2016

2H
2016

1H
2017

2H
2017

2H
2014

1H
2015

2H
2015

Note 1: Percentage of Increase/Decline of rent of tenants = Total Increase/Decline of rent of tenants / Total rent before revisions

1H
2016

2H
2016

1H
2017

2H
2017

Finance and Sustainability

Financial Strategy
Based on its defensive financial strategy, KDR has financial policies that contribute to financial stability. For
example, KDR has a policy of increasing the average remaining term of debt and reducing interest
expenses. By taking numerous actions for improving financial stability, KDR is aiming for more growth invalue for unitholders.

■LTV (3)■Key Debt Indicators (1)
(%)
1.40
1.20

Average interest rate ■ Average remaining term
Rate of
fixed
1.25％
95.2%
1.19％
1.19％
1.10％

1.00

5.1

4.3

4.6

5.2

1.08％
4.7

0.80

(yrs)
10.0
8.0

(%)

52.0％

51.5％

50.0

46.7％
46.8％
46.3％

2.0

0.60

Jul. 2016
Jan. 2017
Jul. 2017
Jan. 2018 Mar. 2018
(9th period) (10th period) (11th period) (12th period) (After the
Merger)Debt Indicators of Existing Average interest rate (2) 0.92％ (Forecast)Loans from JSL (¥15 bln)

0.0

Appraisal LTV

LTV target：50～55%

53.7％

55.0

6.0
4.0

LTV

60.0

45.0

Jul.
2014

Jan.
2015

Jul.

Jan.
2016

Jul.

48.9％ 48.9％

Jan.
2017

Jul.

Jan.
2018

Average remaining term 2.4 yrs■Credit Rating

A+

Japan Credit Rating
Agency, Ltd. (JCR)

50.1％

47.4％

Mar.
2018
(After the
Merger)(Forecast)

Note 1: The average interest rate is calculated by using the weighted average interest rate at the end of the period and on
March 1, 2018 and includes up-front fees (per year) and the effect of interest rate swaps. The average remaining term is
calculated by using the weighted average remaining term of interest-bearing liabilities at the end of the period and on
March 1, 2018. The rate of fixed-interest is calculated by using the ratio of fixed interest rate loans to total loans at theend of the period. Fixed-rate loans include floating-rate loans with effectively fixed-rates due to interest rate swaps.
Note 2: The average interest rate of existing loans from JSL is calculated by using the weighted average interest rate that
includes up-front fees (per year) and the effect of interest rate swaps as of March 1, 2018.
Note 3: LTV = Interest-bearing Liabilities / Total Assets. Appraisal LTV = Interest-bearing Liabilities / Total Appraisal Value.

Initiatives for Sustainability
Five properties have acquired DBJ Green Building Certification (1) for their environmental and social
initiatives. KDR has participated in the GRESB Real Estate Assessment since 2016. KDR will continue to workon acquiring more certifications and improving assessments.

■DBJ Green Building Certification

Newly acquired certification for KDX Residence Toyosu and 5 properties
in 114 certification-eligible properties(2) are certified.

■GRESB Real Estate
Assessment

KDX Residence Toyosu
January 2018 New
Properties withexcellentenvironmental & social
awareness
Properties certificated DBJ Green Building
Ashiya Royal Homes
KDX Residence Hanzomon

KDX Residence Ebisu

KDX Residence Yotsuya

GRESB (Global Real Estate Sustainability
Benchmark) is a benchmark to evaluate thesustainability performance of private andlisted real estate portfolios, etc. fromenvironmental and social perspectives.

■Others●LED lights in common areas●Installation of disaster readiness sets
●Remote surveillance of road heating(Note 1) DBJ Green Building Certification is a system established by Development Bank of Japan in April 2011 to support real estate that meets environmental andsocial conditions.
(Note 2) 114 certificatable properties are properties operated on January 31, 2018 that exclude land ownership.

Information for Unitholders

Basic Structure

(1)
(2)
(3)
(4)
(5)
(6)

As of March 1, 2018

Asset Management Agreement
Administrative Agency Agreement / Asset Custodian Agreement
Unitholder Register Administrative Agency Agreement
Fiscal Agency Agreement
Support-Line Memorandum of understanding / Trademark License Agreement
Support Agreement

Unitholders■Individuals and others ■Financial institutions ■Foreign companies and individuals ■Other domestic companies ■Security firms

12th Period
349,089 units

11th Period
349,089 units

10.0%

70.1%

15.7% 3.7% 0.4%

11.8%

63.3%

20.4% 3.9% 0.5%

IR Calendar

Information for Unitholders

Investment Unit Price

As of January 31, 2018

(Note 1) Tokyo Stock Exchange REIT Index and Tokyo Stock Exchange Residential REIT Index are indexed from the closing price as of April 26, 2012 (964.36 and 1,247.66)
which are initial listing date of KDR to the closing price of KDR (¥181,000).

Overview of Portfolio
Use (1)
Healthcare
Facilities

Other 0.9%
(1 prop)

15.0%(14 props)

Residential
Facilities

84.1%(114 props)

Residential Facilities

Healthcare Facilities
Area (1)Area (1)Others4.8％
Other
Regional Areas (4)Tokyo
Metropolitan Area (3)Other Regional Area (7)30.4%Tokyo Central
8 Wards (2)

21.2%

36.7%

40.1%

Other
Tokyo Metropolitan Area
6.7%
Tokyo
23 WardsTokyo
Metropolitan Area (3)Three Major
Metropolitan Areas (6)

22.8%

69.6%

Use (1)Serviced housing
for the elderly

Family4.8% (1 prop)

19.6%
Studio

39.8%

40.6%

37.4%

74.1%

Room type (1)Small Family

Greater
Osaka Area (5)Fee-based homes forthe elderly (residential)

16.7% (4 props)

Fee-based homes for theelderly (with nursing care)

78.6%（9 props）(Note 1) Portfolio breakdown describes the ratio by acquisition price as of March 1, 2018. Acquisition price refers to the pre-tax price that does not include the expenses spenton the acquisition of properties.
(Note 2) “Tokyo Central 8 Wards” include Minato-ku, Shibuya-ku, Chuo-ku, Chiyoda-ku, Shinjuku-ku, Meguro-ku, Setagaya-ku and Shinagawa-ku.
(Note 3) “Tokyo Metropolitan Area” includes Tokyo, Kanagawa, Saitama and Chiba.
(Note 4) “Other Regional Areas” include government-designed municipalities and other regional cities.
(Note 5) “Greater Osaka Area” includes Osaka, Kyoto, Nara, Hyogo and Shiga.
(Note 6) “Three Major Metropolitan Areas” include “Tokyo Metropolitan Area”, “Greater Osaka Area” and “Greater Nagoya Area.”(Note 7) “Other Regional Areas” include other regional cities excluding “Three Major Metropolitan Areas”.
(Note 8) Percentages are rounded to the first decimal point.

Overview of Portfolio
Dignity of land or
distinguished environment

Residential
Facilities

T-1

T-3

Daily life convenience
T-4

Existence of special markets
T-5

T-6

Tokyo
Metropolitan
Area(75 props)

T-7

KDX Daikanyama
Residence
T-9

KDX Odemma
Residence

KDX Iwamoto-cho
Residence

KDX Bunkyo Sengoku
Residence

KDX Azumabashi
Residence

T-10

T-11

T-12

T-13

KDX Shimura Sakaue
Residence

Cosmo Heim
Motosumiyoshi (land)

KDX Musashi Nakahara
Residence

KDX Chiba Chuo
Residence

KDX Kawaguchi
Saiwai-cho Residence

KDX Residence
Shirokane I

T-15

T-16

T-17

T-18

T-19

T-20

KDX Residence
Shirokane II

KDX Residence
Minami-aoyama

KDX Residence
Minami-azabu

KDX Residence Shiba
Koen

KDX Residence Azabu
East

KDX Residence
Takanawa

T-21

T-22

T-23

T-24

T-25

T-26

KDX Residence
Nishihara

KDX Residence
Daikanyama II

KDX Residence
Sendagaya

KDX Residence
Nihombashi Suitengu

KDX Residence
Nihombashi Hakozaki

KDX Residence
Higashi-Shinjuku

T-27

T-28

T-29

T-30

T-31

T-32

KDX Residence
Yotsuya

KDX Residence Nishishinjuku

KDX Residence
Kagurazaka

KDX Residence Futako
Tamagawa

KDX Residence
Komazawa Koen

KDX Residence
Mishuku

T-33

T-34

T-35

T-36

T-37

T-38

KDX Residence
Yoga

KDX Residence
ShimoumaRaffine Minamimagome

KDX Residence
Yukigaya Otsuka

KDX Residence Denen
Chofu

KDX Residence
Tamagawa

T-39

T-40

T-41

T-42

T-43

T-44

KDX Residence
Monzennakacho

KDX Residence
Okachimachi

KDX Residence Motoasakusa

KDX Residence Itabashi
HonchoKDX Residence
Azusawa

KDX Residence Tobu
Nerima

T-45

T-46

T-47

T-48

T-49

T-50

KDX Residence
Yokohama Kannai

KDX Residence
Miyamaedaira

KDX Residence
MachidaKDX Residence
Kinshicho

KDX Residence
Nihombashi Hamacho

KDX Residence
Nihombashi Ningyocho

Overview of Portfolio
Dignity of land or
distinguished environment
T-51

T-52

T-53

Daily life convenience
T-54

Existence of special markets
T-55

T-56

KDX Residence
Jiyugaoka

KDX Residence
Togoshi

KDX Residence
Shinagawa Seaside

KDX Residence
Ojima

KDX Residence
Oyama

KDX Residence
Hanzomon

T-57

T-58

T-59

T-60

T-61

T-62

B-Site Akihabara

KDX Residence
Kagurazaka Dori (Note 2)

KDX Residence
Sendagi

KDX Residence
Seijo

KDX Residence
Akihabara

KDX Residence Iriya

T-63

T-64

T-65

T-66

T-67

T-68

KDX Residence
Tachikawa

KDX Residence
TsurumiKDX Residence
Morishita Chitose

KDX Residence
Akasaka

KDX Residence
Kanda

KDX Residence Ebisu

T-69

T-70

T-71

T-72

T-73

T-74

KDX Residence Nishimagome

KDX Residence Nishiazabu

KDX Residence Azabu
Sendaizaka

KDX Residence
Waseda Tsurumaki

KDX Residence
Bunkyo Yushima

KDX Residence
Kamishakujii

T-75

T-76

T-77

T-78

KDX Residence Shinotsuka

KDX Residence
Sakurajosui

KDX Residence
Ryogoku

KDX Residence
Toyosu
R-4

R-5

R-6

R-2

R-3

KDX Jozenji DoriResidence

KDX Izumi Residence

KDX Chihaya
Residence

KDX Sakaisuji
Hommachi Residence

KDX Shimmachi
Residence

R-8

R-9

R-1 0

R- 1 1R- 1 3

Regional
Area(40 props)

R-7

KDX Takarazuka
Residence

KDX Shimizu
Residence

KDX Residence Odori
Koen

KDX Residence
Kikusui Yojo

KDX Residence
Toyohira Koen

KDX Residence
Ichiban-cho

R- 1 4

R-1 5

R-1 6

R-1 7

R- 1 8R- 1 9KDX Residence
Kotodai

KDX Residence Izumi
Chuo

KDX Residence
Higashi-sakura I

KDX Residence
Higashi-sakura II

KDX Residence
Jingumae

KDX Residence Nishi-oji

Overview of Portfolio
Dignity of land or
distinguished environment

Daily life convenience

Existence of special markets

R-20

R-21

R-22

R-23

R-24

R-25

KDX Residence Saiin

KDX Residence
Namba

KDX Residence
Namba-minami

KDX Residence ShinOsaka

KDX Residence Ibaraki
I II

KDX Residence
Toyonaka-minami

R-27

R-28

R-29

R-30

R-32

R-26

KDX Residence
Moriguchi

KDX Residence
Sannomiya

Ashiya Royal Homes

KDX Residence Funairi
Saiwai-cho

KDX Residence Tenjinhigashi II

KDX Residence Nishi
Koen

R-33

R-34

R-35

R-36

R-37

R-38

KDX Residence Hirao
Josui-machi

Melody Heim
Gotenyama

Leopalace Flat
Shin-sakae

KDX Residence
Hommachibashi

KDX Residence
Minami-kusatsu

R-39

R-40

R-41

KDX Residence Konan
YamateR-42

R-43

KDX Residence
Minami-sanjo

Serenite Kita-kyuhoji

Serenite Nishinomiya
Hommachi

KDX Residence Nishijin

H-1

H-2

H-3

H-4

H-5

Irise Kamata/Yuseien

Nichii Home Nakano
Minamidai

Joy Stage Hachioji

Yuimaru Hijirigaoka

Nichii Home Tama Plaza

H-6

H-7

H-8

H-9

H-10

H-11

Ten

Irise Nishioka

Alpha Eniwa Sta.
Nishiguchi Saikaihatsu
building

Sawayaka Sakura
Nibankan

Activa Biwa

Sompo CareLAVIERE Kobe
Tarumi

H-12

H-13

H-14

Granda Mondo
Yakujin

Excellent
Nishinomiya

Gran Hills Ogawarako

KDX Residence Ohori
Harbor View Tower

Healthcare
Facilities(14 props)(Note 1) “Measure of investment” is the measure KDR focused most on when it decided to acquire each property about residential facilities.
(Note 2) The name is changed from “Bereau Kagurazaka “ on February 5, 2018.

Portfolio List
(As of March 1, 2018)

Residential Facilities

Tokyo Metropolitan Area

No.

Name

Location

Completion Date

Type (Note 1)

AcquisitionPrice

Occupancy
Rate (Note 2)

T-1
T-3
T-4
T-5
T-6
T-7
T-9
T - 10T - 11
T - 12
T - 13
T - 15
T - 16
T - 17
T - 18T - 19
T -20
T -21
T -22
T -23
T -24
T -25
T -26
T -27
T -28
T -29
T -30
T -31
T -32
T -33
T -34
T -35
T -36
T -37
T -38
T -39
T -40
T -41
T -42
T -43
T -44
T -45
T -46
T -47
T -48
T -49
T -50
T -51
T - 52T - 53
T - 54
T - 55T - 56
T - 57
T - 58T - 59T - 60T - 61T - 62
T - 63T - 64
T - 65
T - 66
T - 67
T - 68
T - 69T - 70T - 71T - 72
T -73
T -74
T -75
T -76

KDX Daikanyama Residence
KDX Odenma Residence
KDX Iwamoto-cho Residence
KDX Bunkyo Sengoku Residence
KDX Azumabashi Residence
KDX Shimura Sakaue Residence
Cosmo Heim Motosumiyoshi (Land)
KDX Musashi Nakahara Residence
KDX Chiba Chuo Residence
KDX Kawaguchi Saiwai-cho Residence
KDX Residence Shirokane I
KDX Residence Shirokane II
KDX Residence Minami-aoyama
KDX Residence Minami-azabu
KDX Residence Shiba Koen
KDX Residence Azabu East
KDX Residence Takanawa
KDX Residence Nishihara
KDX Residence Daikanyama II
KDX Residence Sendagaya
KDX Residence Nihombashi Suitengu
KDX Residence Nihombashi Hakozaki
KDX Residence Higashi-shinjuku
KDX Residence Yotsuya
KDX Residence Nishi-shinjuku
KDX Residence Kagurazaka
KDX Residence Futako Tamagawa
KDX Residence Komazawa Koen
KDX Residence Misyuku
KDX Residence Yoga
KDX Residence Shimouma
Raffine Minami-magome
KDX Residence Yukigaya Otsuka
KDX Residence Denen Chofu
KDX Residence Tamagawa
KDX Residence Monzennakacho
KDX Residence Okachimachi
KDX Residence Moto-asakusa
KDX Residence Itabashi Honcho
KDX Residence Azusawa
KDX Residence Tobu Nerima
KDX Residence Yokohama Kannai
KDX Residence Miyamaedaira
KDX Residence Machida
KDX Residence Kinshicho
KDX Residence Nihombashi Hamacho
KDX Residence Nihombashi Ningyocho
KDX Residence Jiyugaoka
KDX Residence Togoshi
KDX Residence Shinagawa Seaside
KDX Residence Ojima
KDX Residence Oyama
KDX Residence Hanzomon
B-Site Akihabara
KDX Residence Kagurazaka Dori（4）KDX Residence Sendagi
KDX Residence Seijo
KDX Residence Akihabara
KDX Residence Iriya
KDX Residence Tachikawa
KDX Residence Tsurumi
KDX Residence Morishita Chitose
KDX Residence Akasaka
KDX Residence Kanda
KDX Residence Ebisu
KDX Residence Nishi-magome
KDX Residence Nishi-azabu
KDX Residence Azabu Sendaizaka
KDX Residence Waseda Tsurumaki
KDX Residence Bunkyo Yushima
KDX Residence Kamishakujii
KDX Residence Shin-otsuka
KDX Residence Sakurajosui

Shibuya-ku, Tokyo
Chuo-ku, Tokyo
Chiyoda-ku, Tokyo
Bunkyo-ku, Tokyo
Sumida-ku, Tokyo
Itabashi-ku, Tokyo
Kawasaki-shi, Kanagawa
Kawasaki-shi, Kanagawa
Chiba-shi, Chiba
Kawaguchi-shi, Saitama
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Koto-ku, Tokyo
Taito-ku, Tokyo
Taito-ku, Tokyo
Itabashi-ku, Tokyo
Itabashi-ku, Tokyo
Nerima-ku, Tokyo
Yokohama-shi, Kanagawa
Kawasaki-shi, Kanagawa
Sagamihara-shi, Kanagawa
Sumida-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Meguro-ku, Tokyo
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo
Koto-ku, Tokyo
Itabashi-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Shinjuku-ku, Tokyo
Bunkyo-ku, Tokyo
Setagaya-ku, Tokyo
Taito-ku, Tokyo
Taito-ku, Tokyo
Tachikawa-shi, Tokyo
Yokohama-shi, Kanagawa
Sumida-ku, Tokyo
Minato-ku, Tokyo
Chiyoda-ku, Tokyo
Shibuya-ku, Tokyo
Ota-ku, Tokyo
Minato-ku,Tokyo
Minato-ku,Tokyo
Shinjuku-ku, Tokyo
Bunkyo-ku, Tokyo
Nerima-ku, Tokyo
Toshima-ku, Tokyo
Suginami-ku, Tokyo

Feb. 10, 2003
Mar. 14, 2007
Sep. 5, 2007
Aug. 9, 2005
Sep. 26, 2007
Jul. 2, 2007－
Apr. 23, 1991
Feb. 23, 2007
Feb. 9, 2007
Feb. 21, 2003
Nov. 12, 2004
Feb. 26, 2004
Oct. 7, 2004
Nov. 18, 2005
Jan. 6, 2004
Jul. 19, 2007
Apr. 9, 2004
Jan. 30, 1997
Jan. 19, 2007
Feb. 24, 2005
Feb. 6, 2004
Nov. 21, 2007
Mar. 1, 2004
Oct. 7, 2005
Jan. 17, 2006
Feb. 23, 1998
Feb. 6, 2006
May 18, 2006
Dec. 20, 2005
Oct. 13, 2005
Mar. 25, 1992
Jan. 11, 2006
Feb. 17, 1997
Feb. 7, 2007
Mar. 31, 2005
Dec. 7, 2004
Jan. 31, 2005
Aug. 23, 2007
Oct. 6, 2006
Feb. 11, 2007
Mar. 17, 2003
Oct. 16, 1998
Jun. 20, 2006
Mar. 1, 2007
Mar. 3, 2005
Aug. 8, 2002
Mar. 20, 2006
Nov. 27, 2006
Aug. 10, 2006
Jul. 23, 2008
Feb. 13, 2008
Dec. 18, 2003
Dec. 14, 2005
Aug. 31, 2006
Mar. 13, 2000
Apr. 10, 2007
Jan. 19, 2008
Feb. 14, 2007
Mar. 12, 2008
Jul. 31, 1990
Jan. 9, 2007
Dec. 12, 2014
Feb. 6, 2015
Sep. 15, 2015
Jul. 12, 2016
Feb. 20, 2008
Oct. 6, 2006
Aug. 6, 2007
Jan. 23, 2006
Jun. 26, 2007
Feb. 5, 2016
Sep. 13, 2016

Small family
Small family
Small family
StudioStudioFamily－FamilyStudioSmall family
Small family
StudioSmall family
Small family
Small family
StudioSmall family
Small family
FamilySmall family
FamilyStudioStudioFamilyStudioStudioFamilySmall family
StudioStudioStudioStudioStudioFamilyStudioStudioStudioSmall family
StudioStudioStudioStudioFamilyFamilyFamilyFamilyStudioSmall family
Small family
StudioStudioSmall family
FamilyStudioStudioFamilySmall family
Small family
StudioStudioSmall family
StudioSmall family
Small family
Small family
StudioSmall family
StudioStudioStudioStudioStudioStudio

4,700
1,775
822
1,488
650
2,830
1,750
637
1,480
1,150
3,000
2,800
2,230
2,080
1,781
1,560
770
1,450
730
650
3,240
1,147
3,270
2,260
1,000
720
1,250
920
760
700
600
1,250
1,050
1,000
776
773
850
800
620
550
420
800
999
1,800
1,350
996
530
1,268
3,745
2,593
1,857
2,679
4,832
850
1,360
2,200
1,400
1,250
1,062
3,026
1,050
1,100
1,150
700
2,845
1,130
1,224
792
561
695
648
764
894

98.2
100.0
98.0
100.0
100.0
100.0
－
94.3
95.5
98.3
98.8
98.8
70.8
98.0
97.5
98.9
97.4
100.0
100.0
100.0
100.0
98.7
96.8
100.0
98.0
97.2
100.0
95.5
97.7
90.0
100.0
100.0
98.7
100.0
98.1
95.9
100.0
95.9
96.1
100.0
100.0
97.0
97.5
100.0
100.0
100.0
100.0
97.7
96.7
97.1
100.0
95.3
100.0
100.0
100.0
100.0
97.5
97.0
98.6
92.6
100.0
97.4
96.6
100.0
100.0
96.1
97.3
100.0
100.0
100.0
93.8
100.0
85.5

(mln yen)(%)

Portfolio List
No.
T-77
T-78

Other Regional Areas

Residential Facilities

R-2
R-3
R-4
R-5
R-6
R-7
R-8
R-9
R-10
R-11
R-13
R-14
R-15
R-16
R-17
R-18
R-19
R-20
R-21
R-22
R-23
R-24
R-25
R-26
R-27
R-28
R-29
R-30
R-32
R-33
R-34
R-35
R-36
R-37
R-38
R-39
R-40
R-41
R-42
R-43

No.

Healthcare Facilities

H-1
H-2
H-3
H-4
H-5
H-6
H-7
H-8
H-9
H-10
H-11
H-12
H-13
H-14

Name

Location

Sumida-ku, TokyoKDX Residence Ryogoku
Koto-ku, TokyoKDX Residence Toyosu
Residential Facilities / Tokyo Metropolitan Area 75 props
Sendai-shi, Miyagi
KDX Jozenji Dori Residence
Nagoya-shi, Aichi
KDX Izumi Residence
Nagoya-shi, Aichi
KDX Chihaya Residence
Osaka-shi, Osaka
KDX Sakaisuji Hommachi Residence
Osaka-shi, Osaka
KDX Shimmachi Residence
Takarazuka-shi, Hyogo
KDX Takarazuka Residence
Fukuoka-shi, Fukuoka
KDX Shimizu Residence
Sapporo-shi, Hokkaido
KDX Residence Odori Koen
Sapporo-shi, Hokkaido
KDX Residence Kikusui Yojo
Sapporo-shi, Hokkaido
KDX Residence Toyohira Koen
Sendai-shi, Miyagi
KDX Residence Ichiban-cho
Sendai-shi, Miyagi
KDX Residence Kotodai
Sendai-shi, Miyagi
KDX Residence Izumi Chuo
Nagoya-shi, Aichi
KDX Residence Higashi-sakura I
Nagoya-shi, Aichi
KDX Residence Higashi-sakura II
Nagoya-shi, Aichi
KDX Residence Jingumae
Kyoto-shi, Kyoto
KDX Residence Nishi-oji
Kyoto-shi, Kyoto
KDX Residence Saiin
Osaka-shi, Osaka
KDX Residence Namba
Osaka-shi, Osaka
KDX Residence Namba-minami
Osaka-shi, Osaka
KDX Residence Shin-osaka
Ibaraki-shi, Osaka
KDX Residence Ibaraki I・II
Toyonaka-shi, Osaka
KDX Residence Toyonaka-minami
Moriguchi-shi, Osaka
KDX Residence Moriguchi
Kobe-shi, Hyogo
KDX Residence Sannomiya
Ashiya-shi, Hyogo
Ashiya Royal Homes
Hiroshima-shi, Hiroshima
KDX Residence Funairi Saiwai-cho
Fukuoka-shi, Fukuoka
KDX Residence Tenjin-higashi II
Fukuoka-shi, Fukuoka
KDX Residence Nishi Koen
Fukuoka-shi, Fukuoka
KDX Residence Hirao Josui-machi
Hirakata-shi, Osaka
Melody Heim Gotenyama
Nagoya-shi, Aichi
Leopalace Flat Shin-sakae
Kobe-shi, Hyogo
KDX Residence Konan Yamate
Osaka-shi, Osaka
KDX Residence Hommachibashi
Kusatsu-shi, Shiga
KDX Residence Minami-kusatsu
KDX Residence Ohori Harbor View
Fukuoka-shi, Fukuoka
Tower
Sapporo-shi, Hokkaido
KDX Residence Minami-sanjo
Osaka-shi, Osaka
Serenite Kita-kyuhoji
Nishinomiya-shi, Hyogo
Serenite Nishinomiya Hommachi
Fukuoka-shi, Fukuoka
KDX Residence Nishijin
Residential Facilities / Other Regional Areas 40 props
Residential Facilities 115 props
Name

Location

Ota-ku, Tokyo
Irise Kamata/Yuseien
Nakano-ku, Tokyo
Nichii Home Nakano-Minamidai
Hachioji-shi, Tokyo
Joy Stage HachiojiTama-shi, Tokyo
Yuimaru Hijirigaoka
Kawasaki-shi, Kanagawa
Nichii Home Tama Plaza
Sapporo-shi, Hokkaido
Ten
Sapporo-shi, Hokkaido
Irise Nishioka
Eniwa-shi, Hokkaido
Joy Stage Hachioji
Akita-shi, Akita
Sawayaka Sakura Nibankan
Otsu-shi, Shiga
Activa Biwa
Kobe-shi, Hyogo
Sompo Care LAVIERE Kobe Tarumi
Nishinomiya-shi, Hyogo
Granda Mondo Yakujin
Nishinomiya-shi, Hyogo
Excellent Nishinomiya
Kamikita-gun, Aomori
Gran Hills Ogawarako
Healthcare Facilities 14 props
Total 129 props

Completion Date

Type (Note 1)

AcquisitionPrice

Occupancy
Rate (Note 2)

Feb. 3, 2016
Jul. 7, 2017

StudioStudioTotal / Ave.
StudioFamilySmall family
Small family
StudioFamilySmall family
Small family
Small family
Small family
Small family
Small family
Small family
Small family
Small family
Small family
StudioStudioStudioStudioSmall family

842
7,500
114,781
1,015
1,120
1,080
2,910
1,015
1,510
1,680
765
830
445
530
520
480
2,350
900
840
813
440
1,410
1,350
510

93.4
100.0
98.0
93.0
94.8
96.2
97.0
96.8
100.0
95.9
97.4
94.4
89.1
97.3
100.0
94.0
93.0
95.5
91.4
97.0
98.0
97.0
96.9
97.7

Jan. 15, 2008
Apr. 7, 2009
Jul. 28, 2009
Oct. 25, 2007
Oct. 10, 2007
Feb. 29, 2008
May 2, 2008
Jan. 4, 2007
Feb. 22, 2007
Feb. 17, 2007
Apr. 26, 2007
Oct. 7, 2006
Mar. 1, 2007
Jan. 21, 2008
Mar. 2, 2006
Feb. 14, 2007
Mar. 12, 2007
Jul. 4, 2006
Jul. 12, 2006
Apr. 27, 2007
Feb. 17, 2007
May 27, 1991
Mar. 17, 1993
Mar. 5, 2007
Oct. 26, 2006
Jan. 10, 2007
Jun. 5, 1991
Jan. 30, 2007
May 7, 2007
Feb. 2, 2006
Oct. 18, 2005
Jul. 14, 1989
Nov. 15, 2004
Mar. 6, 2008
Feb. 28, 2007
Mar. 4, 2008
Feb. 17, 2009(mln yen)(%)

Family

1,275

96.7

Small family
FamilyStudioFamilyStudioSmall family
FamilyFamilyFamilyStudioSmall family
Small family
StudioSmall family

740
551
1,080
1,360
588
680
763
760
400
3,500
973
3,201
1,974
4,606

95.6
100.0
100.0
100.0
98.4
95.2
91.2
95.7
100.0
100.0
95.9
97.7
95.1
91.6

Dec. 14, 2010
Jul. 10, 2015
Feb. 24, 2016
Apr. 30, 1996

Small family
StudioStudioSmall family
Total / Ave.
Total / Ave.

915
1,290
617
1,600
49,387
164,169

Completion Date

Type

95.4
96.4
98.1
88.6
95.9
97.0
ActualOccupancy
Rate (Note 3)

Jun. 8, 2007
Jun. 25, 1992
Oct. 31, 1995
Nov. 15, 2011
Mar. 19, 1992
Sep. 5, 2007
May 9, 2014
Jan. 28, 2015
Sep. 30, 2011
Jul. 15, 1987
Mar. 3, 2010
Jul. 18, 2014
Feb. 8, 2010
Mar. 23, 2007

Nursing Care
Nursing Care
Nursing Care
Residential
Nursing Care
Nursing Care
Residential
Residential
Nursing Care
Nursing Care
Nursing Care
Residential
Nursing Care
Serviced
Total / Ave.
Total

AcquisitionPrice(mln yen)

1,120
1,780
3,690
1,120
2,940
2,630
858
1,660
989
6,560
2,110
1,190
971
1,380
28,998
193,167

(%)

—

100.0
79.5
90.1
100.0
68.1
84.7
96.4
86.3
100.0
79.4
97.0
100.0
100.0
87.9

(Note 1) Type means principal room type of the property (If applicable to some types, type of the largest footprint unit). Single (intended primarily for single-personhouseholds) [footprint of equal or more than 18m2 and less than 30m2 and more than 20 rentable units per property］, Small Family : (intended primarily
for households of couples or families with infants) [footprint of equal or more than 30m2 and less than 60m2 and more than 15 rentable units per property, Family (intended primarily for households of three or more families) [footprint of equal or more than 60m2 and more than 5 rentable units per property](Note 2) “Occupancy Rate” is as of end of January 2018.
(Note 3) “Actual Occupancy Rate” = Number of residents / number of rooms on December 2017. “Actual Occupancy Rate” is based on documents from operators but that of “Granda
Mondo Yakujin” isn’t disclosed because KDR isn’t admitted to disclose from the operator. If “Actual Occupancy Rate” is over 100.0% by calculation, it is written as 100.0%.
(Note 4) The name is changed from “Bereau Kagurazaka “ on February 5, 2018.

II. Asset management report
1. Outline of asset management operation(1)

Operating result and financial position
Fiscal period

Operating revenues

Unit

8th
9th
10th
11th
12th
From Aug. 1, 2015 From Feb. 1, 2016 From Aug. 1, 2016 From Feb. 1, 2017 From Aug. 1, 2017
to Jan. 31, 2016 to Jul. 31, 2016 to Jan. 31, 2017 to Jul. 31, 2017 to Jan. 31, 2018

Operating result

mil.yen

5,226

5,333

5,468

5,574

5,681

(Rental revenues)

mil.yen

5,208

5,329

5,437

5,574

5,671

Operating expenses

mil.yen

2,509(Expenses related to rent business) mil.yen

1,936

2,610
2,032

2,629
2,050

2,741
2,124

2,791
2,107

2,838

2,833

2,889
2,353

Operating income

mil.yen

2,717

2,723

Ordinary income

mil.yen

2,185

2,193

2,311

2,316

Net income

mil.yen

2,184

2,192

2,310

2,315

2,352

Total asset

mil.yen160,064

159,948

167,276

167,316

176,813%(＋0.9)(△0.1)(＋4.6)(＋0.0)(＋5.7)

Interest-bearing debt

mil.yen74,80074,80081,80081,80091,130Unitholders’ equity

mil.yen82,38982,36582,55282,55982,650%(＋0.0)(△0.0)(＋0.2)(＋0.0)(＋0.1)

Unitholders’ capital

mil.yen80,13280,13280,13280,13280,132

Total distribution

mil.yen

2,175(period to period change)Asset(period to period change)

Distribution per unit

dividend payout ratio
Number of investment units issued
and outstanding
Net income per unit (Note 2,3)

%

99.6

2,220
101.3

2,280
98.7

2,315
100.0

2,424
103.1

unit

349,089

349,089

349,089

349,089

349,089

yen

6,257

6,279

6,617

6,632

3,369

Unitholders’ equity per unit (Note 2)

yen

236,012

235,943

236,478

236,498

118,379

Distribution per unit

yen

6,231

6,360

6,533

6,633

6,946

Profit distribution

yen

6,231

6,360

6,533

6,633

6,946

Distribution in excess of profit

yen

－

－

－

－

－

Return on assets (Note 4)%

1.4

Annualized (Note 5)

%

2.7

1.4
2.7

1.4
2.8

1.4
2.8

1.4
2.7

%

2.7

%

5.3

2.7
5.3

2.8
5.6

2.8
5.7

2.8
5.6

Return on net assets (Note 6)
Annualized (Note 5)
Net asset ratio
Financial indicator%(period to period change)
Interest-bearing debt ratio on assets%(Note 7)
FFO (Note 8)
mil.yen(Funds from Operation)
FFO per unit (Note 2,9)yenLeasing NOI (Note10)
mil.yen(Net Operating Income)Annualized NOI yield (Note 5,11)%
Leasing NCF(Note 12)
mil.yen(Net Cash Flow)
Annualized NCF yield (Note 5,13)
%

51.5

51.5

49.4

49.3

46.7

(△0.5)(＋0.0)(△2.1)(△0.0)(△2.6)

46.7

46.8

48.9

48.9

51.5

3,082

3,104

3,189

3,227

3,295

8,830

8,892

9,137

9,246

4,720

4,124

4,153

4,265

4,335

4,486

5.5

5.6

5.5

5.6

5.4

3,956

3,990

4,044

4,094

4,199

Reference

5.3

5.4

5.2

5.3

5.1

Number of properties

properties

105

105

113

113

115

Leased units (Note 14)

unit

6,948

6,952

7,229

7,285

7,646

Total leasable floor area (Note 14)m²

286,310.51

286,310.51

292,324.33

292,324.33

303,608.43

Occupancy ratio (Note 14)

%

96.0

95.9

96.2

96.8

97.0

Depreciation expenses

mil.yen

852

857

878

884

921

Capital expenditures

mil.yen

167

163

220

241

286

(Note 1)Figures are rounded down to the nearest unit. Ratios are rounded off to the two decimal place

(Note 2)

KDR investment units was split 2-for-1 on the reference date as of February 28, 2018 and the effective date as of March 1, 2018.
“Net income per unit”, “Unitholders’ equity per unit “ and “FFO per unit “ are calculated subjected for KDR investment units tobe split in August 1, 2017.

(Note 3)

Net income per unit is calculated by the net income divided by weighted average of number of investment units(Note 4)Return on assets ＝Net income /｛(Total assets at the beginning of period + Total assets at the end of period)/2｝×100(Note 5)

Annualized values for the 8th fiscal period are calculated based on a period of 184 days, 182 days for 9th fiscal period, 184 daysfor 10th fiscal period, 181 days for 11th fiscal period, 184 days for 12th fiscal period.

(Note 6)Return on net assets ＝Net income / {(Total net assets at the beginning of period + Total net assets at the end of period) /2} ×100

(Note 7)

Interest-bearing debt ratio of assets ＝Interest-bearing debt at the end of period / Total assets at the end of period×100(Note 8)FFO＝Net income + Depreciation expenses + Amortization of deferred assets - Gain on sale of real estate property + Loss onsale of real estate property(Note 9)FFO per unit ＝FFO／Number of investment units issued and outstanding(rounded down to the nearest ¥1)(Note 10) Leasing NOI＝Rental revenues －Expenses related to rent business＋Depreciation expenses(Note 11) Annualized NOI yield＝Annualized NOI／Total acquisition prices of properties ×100
(Note 12) Leasing NCF＝ Leasing NOI－Capital expenditures(Note 13) Annualized NCF yield ＝Annualized NCF／Total acquisition prices of properties ×100
(Note 14) Figure and ratio except for land(2)Outline of asset management operation for the 12th fiscal period① Outline of the history of the Investment Corporation
Kenedix Residential Next Investment Corporation (Note 1) (“the Investment Corporation”)
was established on November 15, 2011 under the Act on Investment Trusts and Investment
Corporations of Japan (“the Investment Trust Act”). On April 26, 2012, the Investment
Corporation was listed on the Real Estate Investment Trust Market of the Tokyo Stock Exchange(Securities Code: 3278).The Investment Corporation additionally issued 67,900 investment units
on February 4, 2015 through most recent public offerings, and 2,067 investment units on March
4, 2015 by way of a third-party allotment. As the result, as of January 31, 2018, the end of the
12th fiscal period, the number of properties was 115 (total acquisition prices is 164,169 million
yen) and the number of investment units issued and outstanding totaled 349,089 units.
The Investment Corporation is externally managed by Kenedix Real Estate FundManagement, Inc. (the “Asset Management Company”), a company that was formed withpersonnel from Kenedix, Inc. and adheres to the core philosophies of Kenedix, Inc., that is, toprovide management services from the perspective of real estate investors as an independent realestate management company. As the asset manager, the Asset Management Company shallprovide investment and management services based on the three core strategies of theInvestment Corporation: “Consistent External Growth by Making Use of Good Judgment,”“Efficient Profit Management” and “Challenge to New Business Opportunities.”(Note 1) The Investment Corporation merged with Japan Senior Living Investment Corporation (“JSL”) (“theMerger”) , the absorbed corporation of the Merger, and it changed its name to Kenedix Residential Next
Investment Corporation on March 1, 2018.

② Operating Environment
The Japanese economy continues its gradual recovery with improvement seen in employment,
income and other areas based on good corporate performance, and it is expected that this trend
will continue. Nevertheless, many factors, including the future course of the Bank of Japan’s
policy of quantitative and qualitative monetary easing, accompanied by negative interest rates
and questions about the momentum of the recovery in the economy and prices, concerns about
uncertainties about financial condition in China, financial policy in Europe and other global
economic factors, as well as volatility in the financial markets, create an environment where
caution is required.
In the rental housing market, the occupancy rates and rent levels of the rental apartmentbuildings in which the Investment Corporation invests remain high. Given that metropolitan
areas continue to experience population growth while rental apartment supplies remain low, afavorable supply-demand environment is expected for these areas in the future.
We continue to see active investment activity in the real estate investment markets on the partof both Japanese and overseas investors such as multiple big transactions by foreign companies.
The Bank of Japan’s aggressive monetary easing measures and the like are expected to keep thereal estate market busy; however, given that banks have record levels of lending balances for thereal estate industry, we need to keep a close eye on any changes to banks’ stances on lending forthis industry.
③ Operating Results(A) Asset acquisition

The Investment Corporation acquired two residential properties (KDX Residence
Nishijin: 1,600 million yen (acquisition price) and KDX Residence Toyosu: 7,500 million

yen (acquisition price)). With the primary purpose of flexible growth in assets and securing
additional income opportunities, the Investment Corporation acquired a subordinated silent
partnership equity (acquisition price: 130 million yen) in Godo Kaisha Tropic Two, whose
asset portfolio includes three residential properties.
(B) Management of real estate holdings

The Investment Corporation managed our real estate holdings, which were selected
through a multifaceted approach of taking into consideration the region, location and city,
rent range, tenant type (corporate or individual) and other various characteristics, byworking with a property management company (“PM Company”) that operates andmanages properties, with the aim of achieving stable and optimal performance.
Moreover, the Investment Corporation strove to partner with leading real estatecompanies with a strong local presence and bolster the PM Company’s efficient leasing
activity. We also ensured that soliciting conditions took into consideration thecharacteristics and occupancy levels of individual properties; carried out efficient
advertising efforts utilizing the power of the KDX Residence brand; utilized leasing agents;
and implemented flexible sales activities attuned to the characteristics of each of theproperties in accordance with plans.
As a result, the portfolio as a whole (excluding the ownership of leased land) had an
occupancy rate of 97.0% as of the end of the term (January 31, 2018). The occupancy rate
for the portfolio as a whole, including owned land under lease, came to 97.0%. During theterm, the average occupancy rate was high at 96.7% as same as the former term.
Specific measures that contributed to improvement in revenue at the rental business are
as follows: with respect to properties with stable and robust occupancy conditions, westrove to raise rent levels for and obtain key money from new tenants; raise rents whenleases were renewed; increase revenue associated with auxiliary facilities; and improve theparking contract rate; and as measures to slash rental business expenses, we reduced utility
bills by switching the electricity supplier for common areas; changed the lighting incommon areas to LED; and reviewed the contracts for auxiliary facilities, as well assolicitation costs, etc., in order to improve income and expenditures.
Moreover, with the aim of maintaining and/or improving the market competitiveness of
our portfolio assets, we undertook planned major renovation work at three properties, roof
renovation at another property, updating work in common areas as well as value-increasing
work and facility updates at individually-owned areas.
We also continued our green efforts during the 12th fiscal period, introducing LED
lighting in common areas.
Furthermore, we continued to monitor our DBJ Green Building Certification, an
environmental awareness recognition from an external evaluator, and our KDX Residence
Toyosu newly obtained 3 stars for this certification (number of properties certificated: 5props).
(C) Financing

The Investment Corporation procures funds with the aim of medium- to long-term stableearnings and sustained growth of portfolio assets, taking into consideration the balance
between financial stability and financing costs.
Debt Financing
The Investment Corporation took out 9,330 million yen in loans as funds of acquisitionof properties and 11,000 million yen in loans as funds for repaying the borrowings forwhich repayment was due during the 12th fiscal period. The outstanding debt balance as ofthe end of the 12th fiscal period (January 31, 2018) was 88,130 million yen.
As a result of the foregoing, the average remaining life of interest-bearing debt (Note 1)
was 5.2 years, and the average interest rate at the end of the 12th fiscal period (Note 2) was
1.10%. The long-term debt ratio (Note 3) came to 85.0%, the fixed interest-rate ratio (Note4) was 95.5%, and the loan to value ratio (LTV) came to 51.5%.
(Note 1)

The weighted average of the life of each interest-bearing debt in accordance with the balance of each interest-bearing debt

(Note 2)

The average interest rate of each interest-bearing debt was calculated taking into account the upfront fee (per annum) andinterest rate swaps, etc., and the weighted average was calculated in accordance with the balance of each interest-bearing debt.

(Note 3)Long-term debt ratio = (balance of long-term borrowings (excluding long-term borrowings to be repaid within one year) +balance of investment corporation bonds) ÷ (balance of borrowings + balance of investment corporation bonds)
The long-term debt ratio that includes long-term borrowings to be repaid within one year is 97.1%.

(Note 4)

The fixed interest-rate ratio = (balance of fixed interest-ratio borrowings (including borrowings for which interest rates aresubstantially fixed through interest rate swap transactions, etc.) + balance of investment corporation bonds) ÷ (balance ofborrowings + balance of investment corporation bonds)

Credit Ratings
The Investment Corporation was assigned the following credit ratings as of the end of
the current fiscal period (January 31, 2018).
Credit Rating Agency
Japan Credit Rating Agency, Ltd.(JCR)Type

RatingLong-term issuer rating

A+ (Outlook : Stable)

Bond ratingA+

Shelf Registration
The Investment Corporation filed a shelf registration statement regarding investment
corporation bonds (excluding short-term investment corporation bonds) on June 28, 2016
with the following overview.
Planned issuance amount

100,000 million yen

Planned issuance period

From July 6, 2016 to July 5, 2018

Use of proceeds

Funds for acquiring specified assets (having the meaning as set forth in the
Act on Investment Trusts and Investment Corporations, Article 2,
Paragraph 1); funds for repaying borrowings; funds for redeeming
investment corporation bonds (including short-term investment
corporation bonds; funds for returning deposits; funds for paying forrepairs and maintenance, etc.; operating capital, etc.

Series 1 Unsecured Investment Corporation Bonds (1,000 million yen), Series 2
Unsecured Investment Corporation Bonds (1,000 million yen) and Series 3 Unsecured
Investment Corporation Bonds (1,000 million yen) were issued pursuant to the foregoingshelf registration on August 30, 2016.
④ Over view of Financial Results and Cash Distribution
As a result of these management efforts, the Investment Corporation reported total operating
revenues of 5,681 million yen, operating income of 2,889 million yen, ordinary income of 2,353
million yen and net income of 2,352 million yen for the current fiscal period.
In regard to profit distributions for the 12th fiscal period, pursuant to the distribution policy in
the Investment Corporation’s certificate of incorporation, the Investment Corporation has
decided to apply special provisions of the tax system for investment corporations (Act on Special
Measures Concerning Taxation (Act No. 26 of 1957; as amended) (“Act on Special Measures
Concerning Taxation”), Article 67-15) and distribute as a profit distribution 2,424,772,194 yen of

unappropriated retained earnings for the 12th fiscal period (net profit of 2,352,516,261 yen +portion of retained earnings brought forward from the most recent fiscal year (72,255,933 yen)).
In the event we have gains from property sales, we will consider whether we need similarinternal reserves as long as net profit for the 12th fiscal period, excluding said gains fromproperty sales, does not fall below the initial projection, taking into consideration such need inaccordance with the circumstances.

(3)Changes in unitholders’capital
The changes in unitholders’ capital and number of investment units issued and outstanding forlast five years are as follows.

Date

Capital transaction

Number of investment units
Issued and outstanding
Increase

BalanceUnitholders’ capital(Million yen)
Increase

Note

Balance

165,000

240,440

34,571

48,345 (Note 1)

Third-party allotment

1,182

241,622247

48,592 (Note 2)

August 6, 2014

Public offering

36,375277,997

8,273

56,865 (Note 3)

September 3, 2014

Third-party allotment

1,125

279,122255

57,121 (Note 4)

February 4, 2015

Public offering

67,900347,022

22,33079,452 (Note 5)

March 4, 2015

Third-party allotment

2,067

349,089679

80,132 (Note 6)

August 6, 2013

Public offering

September 4, 2013

(Note 1) New investment units were issued at a price of ¥217,327 per unit (subscription price of ¥209,525 per unit) through apublic offering in order to raise funds for acquiring new properties.
(Note 2) New investment units were issued at a price of ¥209,525 per unit through the third-party allotment in order to raise
funds for miscellaneous expenses related to the acquisition of new properties.
(Note 3) New investment units were issued at a price of ¥235,657 per unit (subscription price of ¥227,439 per unit) through apublic offering in order to raise funds for acquiring new properties.
(Note 4) New investment units were issued at a price of ¥227,439 per unit through the third-party allotment in order to raise
funds for miscellaneous expenses related to the acquisition of new properties.
(Note 5) New investment units were issued at a price of ¥340,762 per unit (subscription price of ¥328,879 per unit) through apublic offering in order to raise funds for acquiring new properties.
(Note 6) New investment units were issued at a price of ¥328,879 per unit through the third-party allotment in order to raise
funds for miscellaneous expenses related to the acquisition of new properties.
(Note 7) KDR investment units was split 2-for-1 on the reference date as of February 28, 2018 and the effective date as ofMarch 1, 2018. In connection with the Merger, 1 KDR unit following the Investment Unit Split was allocated to every
JSL unit with respect to all the 84,750 outstanding JSL units on March 1, 2018 and number of investment units issued
and outstanding is 782,928. Unitholders’ capital is unchanged by this split and allocation.

【Fluctuation in market prices of the investment securities】
The fluctuation in market prices (closing price) of investment securities on Tokyo Stock
Exchange REIT Market during each fiscal period is as follows.

(4)

Fiscal period

8th

9th

10th

11th

12th

As of/for the six
months ended

January 31, 2016

July 31, 2016

January 31, 2017

July 31, 2017

January 31, 2018

Highest price

328,000

313,000

319,000

320,500

329,500

Lowest price

256,400

264,600

272,400

263,100

274,800

Distributions

The distribution for the 12th fiscal period is 6,946 yen per unit; the Investment Corporation plans
to apply the corporate income taxation special provision (Act on Special Measures Concerning
Taxation, Article 67-15) that deducts an amount equivalent to profit distributions from an
investment corporation’s taxable income, and in accordance with the distribution policy set forth in
the Investment Corporation’s certificate of incorporation, Article 38 (1), has decided to distribute asa profit distribution 2,424,772 thousand yen of unappropriated retained earnings for the 12th fiscal
period (net profit of 2,352,516 thousand yen + portion of retained earnings brought forward from

last fiscal year (72,255 thousand yen)).

8th
9th
10th
11th
12th
From Aug.1, 2015 From Feb.1, 2016 From Aug.1, 2016 From Feb.1, 2017 From Aug.1, 2017
to Jan.31, 2016 to Jul.31, 2016 to Jan.31, 2017 to Jul.31, 2017 to Jan.31, 2018

Fiscal period
Unappropriatedretained earnings(Thousand yen)

2,258,172

2,275,223

2,365,163

2,400,002

2,437,011

Retained earnings(Thousand yen)

82,99855,01784,56484,495

12,239Total distribution(Thousand yen)

2,175,173

2,220,206

2,280,598

2,315,507

2,424,772(6,231)(6,360)(6,533)(6,633)(6,946)2,175,173

2,220,206

2,280,598

2,315,507

2,424,772(6,231)(6,360)(6,533)(6,633)(6,946)

—

—

—

—

—

(—)

(—)

(—)

(—)

(—)

－

－

－

－

－

(—)

(—)

(—)

(—)

(—)

—

—

—

—

—

(—)

(—)

(—)

(—)

(—)

(Distribution per unit) (Yen)Profit distribution(Thousand yen)

(Profit distribution per
(Yen)
unit)

(5)

Unitcapital refunds(Thousand yen)

(Unitcapital refunds
per unit)(Yen)

Unitcapital refund
from retained
earnings for
temporary difference
adjustment(Thousand yen)

(Unitcapital refund
from retained
earnings for
temporary difference
adjustment per unit)(Yen)

Unitcapital refunds
from deduction of
unitcapital under tax
rules(Thousand yen)

(Unitcapital refunds
from deduction of
unitcapital under tax
rules per unit)(Yen)

Asset Management Strategies Going Forward and Challenges
Asset Management Outlook
The Investment Corporation has used the three core strategies of “steady external growth
leveraging our judgment capabilities,” “efficient earnings management” and “new initiatives” andinvested mainly in healthcare facilities such as rental housings. But the Investment Corporation
partly changed its investment policy that defined healthcare facilities (including medical facilities
such as hospitals, etc.) and accommodations added to residential facilities as main investment target.
Going forward, The Investment Corporation will continue to seek to enhance shareholder value
through steady growth of assets, stable property management and appropriate financial strategies inaccordance with the strategies set forth below based on the three core strategies.

(A) New property acquisitions

The Investment Corporation will invest primarily in residential, healthcare andaccommodation facilities ―“spaces where people live and stay”― as its target investments.
In making investments, KDR will stringently select real estate etc. where stable demand
from tenants and users and long-term stable revenue flows can be projected on the basis of
an individual analysis of the attributes of a particular property, as well as regional analysis
taking into account location, etc.
In residential facilities, the Investment Corporation focuses on the potential earnings
power of land and use “location prestige,” “location convenience” and “whether there is a
special market” and other metrics to determine investment opportunities providing rental
income with medium- to long-term stability, and aggressively consider investments mainly
in greater Tokyo and in regional cities.
In healthcare facilities and accommodations, the Investment Corporation judges
investment opportunity considering scale and characteristic of market, regional financial
affairs and status of competitive facilities, etc. and examines aggressively investment in not
only greater Tokyo but also regional cities.
We leverage our “judgment capabilities” that we have developed as real estate
investment professionals to select excellent investment opportunities among a broad rangeof targets, and we believe this enables us to acquire properties at a stable pace.
As a property acquisition channel, we use not only the pipeline from Kenedix, Inc.
pursuant to the Memorandum of Understanding concerning Real Estate Information
Provisions dated October 1, 2013 (including the change after the date and calls “Support
Line MOU”. This Support Line MOU was used for i) residential facilities, ii) healthcare
facilities and iii) accommodations) but also leverage the Asset Management Company’s
own network, including Jyukyo Holdings Co., Ltd., with which a support agreement was
executed on June 15, 2017 and Shinsei Bank, Limited, HASEKO Corporation, Mitsubishi
UFJ Trust and Banking Corporation and LIXIL Group Corporation, with which a support
agreement was executed on November 10, 2017 by the Merger, for flexible property
acquisitions.
We also plan to control property acquisition timing in order to acquire properties at anadvantageous timing in accordance with the future market and financing climates, and weare considering investment in silent partnership equities and real estate-backed securities(preferred securities, etc.).

(B) Management of existing assets

As residential facilities, with the goal of securing a rental income with medium- to longterm stability, PM companies and the Asset Management Company work together toformulate leasing strategies in accordance with individual property characteristics, and byclosely allying with leading real estate companies experienced in regional rental markets,
seek to maintain or improve occupancy rates and rent levels.
The Investment Corporation will also take into account the operation statuses of theproperties and movements of competing properties and seek to maintain or improve
occupancy rates, raise rent levels at the time of tenant changes, increase rent at the time oflease renewals, receive key money, reduce the time of vacancy, maintain or improve leaserenewal rates, and secure parking revenue and other auxiliary revenue and other income
opportunities to secure rent income.
The Investment Corporation will further strive to cut down on restoration and otherrepair and maintenance expenses, review the electricity provider for common areas inconnection with the liberalization of the electricity market, cut costs through the use of LED
lighting for common areas, and reduce tenant solicitation and other costs.
The Investment Corporation will carry out strategic work to update common areas andenhance the value of leased areas of the properties and continue implementing appropriate,major repairs, as necessary, while it seek to maintain or enhance the market competitivenessof its assets.
As healthcare facilities, the Investment Corporation continues to monitor properly
operational status of facilities it owns and business status of operators by information about
them and companies from operators, inspection of operating status and interview by visiting
them and interview with managements in operating company, etc.
Considering results of monitoring, the Investment Corporation proposes to improvebuildings, facilities and operation and examines changing operators in case important issue
occurs in succession of management in operators. The Investment Corporation contracts
Back-up operation conclusion with operators and support companies in preparation ofchanging operators.
The Investment Corporation will manage to make internal growth by deepening relation
with operators such as value-ups based on proposal from operators and cooperation for
resolving issues in operation.
(C) Financing

We will continue to pay close attention to changes in interest rates and otherdevelopments in the financing environment and will consider various options and choose
optimal financing means in order to achieve the optimal balance between financial stability
and financing costs, and seek to build an appropriate financial base.
(D) Disclosure

The Investment Corporation’s basic policy for disclosure is to engage in proactive
investor relations activities to provide a broad range of information to investors andconcerned parties and to quickly disclose accurate information to the extent possible.
Specifically, we practice appropriate disclosure though the Tokyo Stock Exchange (TDnet
registration and press releases) and through our website (https://www.kdr-reit.com/en).
(E)

Measures regarding conflicts of interest

The Asset Management Company manages other investment corporations and real estate
funds besides the Investment Corporation. For this reason, the Asset Management Company
adopts “First picking rights” concerning consideration of acquisitions, set up internally a“pipeline meetings” that includes the compliance officer and implement operation inaccordance with certain rules to prevent arbitrary real estate sales information and thereby
prevent conflicts of interest between investment corporations and real estate funds forwhich the Asset Management Company manages assets and strives to implement proper
measures to fight conflicts of interest.
(6)

Material facts which occurred after book-closing① The Merger by the Investment Corporation and Japan Senior Living Investment Corporation

The Investment Corporation, the surviving corporation, merged with Japan Senior Living Investment
Corporation, the absorbed corporation, on March 1, 2018. The Investment Corporation changed its namefrom “Kenedix Residential Investment Corporation” to “Kenedix Residential Next Investment Corporation”
on March 1, 2018.

(A) Purpose of the Merger

The Two Investment Corporations believe that, as a result of the Merger, they will achieve the benefitsof (i) an increase in liquidity resulting from greater asset scale and market capitalization that will
enable them to capture more growth opportunities, (ii) greater earnings stability stemming from asset
type diversification and enhanced ability to pursue external growth and (iii) improvement in asset
management efficiency together with enhanced financial health, and further believe that the potential toreap these benefits constitutes the major significance of the Merger.
(B) Form of the Merger
The Investment Corporation will be the surviving corporation under an absorption-type merger and
JSL was dissolved in the Merger.
(C) Allocation of units under the Merger
One post-Investment Unit Split KDR investment units was allocated and delivered for each JSL
investment unit by the Merger. The Investment Corporation split one investment unit into two
investment units on February 28, 2018. By these, total number of investment units issued andoutstanding is 782,928 units in March 1, 2018.
(D) Delivered money due to the Merger
Apart from the abovementioned investment units, The Investment Corporation intends to pay JSL
unitholders (the unitholders stated or recorded in the final unitholders register on the day prior to theeffective date of the Merger (excluding the JSL unitholders who demanded the purchase of theirinvestment units pursuant to the provisions of Article 149-3 of the Investment Trust Act, hereinafterreferred to as the “Unitholders Subject to Allocation”)), in lieu of the cash distributions pertaining to
JSL’s fiscal period from September 1, 2017 to February 28, 2018, a merger grant corresponding to the
cash distributions based on JSL’s distributable income for that same period (an amount (dropping any
fractions of a yen) which is the quotient resulting from dividing the amount of JSL’s distributable
income on the date prior to the effective date of the Merger by the number of issued JSL investment
units on that date, reduced by the number of investment units held by unitholders other than theUnitholders Subject to Allocation).
(E) Unitholders’ equity
Unitholders’ capital and retained earnings increased by the Merger as follows.
Unitholders’ capital
0 yen
Retained earnings
The amount of changes about unitholders’ equity as defined in Article
22, Paragraph 1 of the Ordinance on Accounting at 7 Investment
Corporations (Cabinet Office Ordinance No. 47 of 2006, including
subsequent amendments thereto) minus unitholders’ capital.
(F) Overview of JSL (From March 1, 2017 to August 31, 2018)
Business
Investment and management mainly in specified assets
based on Investment Trust Law
Operating revenues
989 million yen
Net income
306 million yen
Total assets
35,333 million yen
Net debt
19,494 million yen
Net assets
15,838 million yen② Investment unit split
The Investment Corporation split its investment units on March 1, 2018.

(A) Purpose of the split
The Merger will be carried out through an absorption-type merger having KDR as the surviving
corporation, and the merger ratio, before considering the Investment Unit Split, would be KDR 1: JSL
0.5. However, with this merger ratio, 0.5 units of KDR would be allotted to every unit of JSL, which
would mean that a number of JSL investment unitholders would receive less than one KDR unit. For thisreason, in order to enable JSL unitholders to continue holding KDR units even after the Merger, for the
purpose of issuing 1 KDR unit or more to all JSL unitholders, it was decided that the KDR investment
units will be split 2-for-1.
(B) Method of the split
KDR investment units owned by the KDR unitholders set forth or recorded in the final unitholder roster
on February 28, 2018 (the day before the effective date of the Merger) was split 2-for-1.
(C) Investment unit numbers to increase after the investment unit split
Outstanding KDR units prior to the Investment Unit Split
349,089 units
Investment unit increase through the Investment Unit Split 349,089 units
Outstanding KDR units following the Investment Unit Split 698,178 units
Total outstanding KDR units following the Merger
782,928 units
Figures of information per unit in case this investment unit split is taken in August 1, 2017 are referredin “note about information per unit”.

2. Outline of the Investment Corporation(1)

Investment unit
Fiscal period
As of

(2)

8th
January 31,
2016

9th
July 31,2016

10th
January 31,
2017

11th
July 31,2017

12th
January 31,
2018

Number of investment
units authorized(Unit)

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Number of investment
units issued andoutstanding(Unit)

349,089

349,089

349,089

349,089

349,089

Total Unitholders’ equity (Million yen)

80,13280,13280,13280,13280,132

Number of unitholders

10,365

10,063

9,009

9,328

8,466

Number ofinvestment
units owned(Units)Ratio of number ofinvestment units owned
to total number ofinvestment units issued(%) (Note)(people)Unitholders
Major unitholders as of January 31, 2018 are as follows.

Name

Address

Japan Trustee Services Bank, Ltd.
(trust account)

8-11, Harumi 1-chome, Chuo-ku, Tokyo

108,149

30.98

The Master Trust Bank of Japan,
Ltd. (trust account)11-3, Hamamatsu-cho 2-chome,
Minato-ku, Tokyo

65,55518.77

15,211

4.35

14,959

4.28

NOMURA BANK(LUXEMBOURG) S.A.
Trust & Custody Services Bank,
Ltd. (securities investment trust
account)

3-2, Marunouchi 1-chome,
Chiyoda-ku, Tokyo
Standing Proxy, Sumiotmo Mitsui Banking
Corporation, Debt Finance department
8-12, Harumi 1-chome, Chuo-ku, Tokyo
Harumi Island Toriton Square Office Tower
Z

The Nomura Trust and Banking
Co., Ltd.

2-2, Otemachi 2-chome, Chiyoda-ku, Tokyo

12,885

3.69

Mizuho Trust & Banking Co.,Ltd.

2-1,Yaesu 1-chome, Chuo-ku, Tokyo

8,616

2.46

Kenedix, Inc.

6-5, Nihombashi Kabutocho, Chuo-ku,
Tokyo

7,310

2.09

Mitsubishi UFJ Trust andBanking Corporation

4-5, Marunouchi 1-chome, Chiyoda-ku,
Tokyo

7,281

2.08

STATE STREET BANK AND
TRUST COMPANY 505012

11-1, Nihombashi 3-chome, Chuo-ku, Tokyo
Standing Proxy, The Hongkong andShanghai Banking Corporation Limited,Tokyo branch, Custody Business Department

6,046

1.73

The Gunma Bank, Ltd.

194, Motosojamachi, Maebashi-shi, Gunma

5,877

1.68

251,889

72.15

Total
(Note)

Ratio of number of investment units owned to total number of investment units issued is calculated by being
rounded down to two decimal places.

(3)Officers① The Executive Directors, Supervisory Directors and the Independent Auditor during the 12th
fiscal period are as follows.

Post

Name

Executive
Director

Keisuke Sato

Kenedix Real Estate Fund Management, Inc.
Director & COO, Head of Residential REIT
Department (Note 1)

1,500

Osamu Chiba

Akebono Law Office, Attorney
Toin Law School, Associate Professor
Maruzen Foods Corporation, Outside Auditor
Imagica Robot Holdings Inc., Outside Director

1,500

Satoshi Ogawa

Ogawa CPA Office, CPA
GK Mercury Consulting, Representative Partner
Oedo-Onsen Monogatari Co., Ltd, Auditor
Oedo-Onsen Monogatari Group Co., Ltd, Auditor

1,500

—

15,000Supervisory
Director(Note 2)

Independent Ernst & Young
auditorShinNihon LLC(Note 1)
(Note 2)Major additional post

Compensation or fees
for the six months
ended January 31,2018(Thousands of yen)

The title of Head of Asset Investment Division, Residential REIT Department was added on March 1, 2018.
The Supervisory Directors may be officers of corporation other than the foregoing, but none of them, including
the foregoing, have any conflicts of interest with the Investment Corporation.

② Policy on Decision to Dismiss or Not to Re-Appoint Independent Auditor
Dismissal of an independent auditor will be made in accordance with the Act on Investment
Trusts and Investment Corporations, and a decision not to re-appoint an independent auditor will
be considered by comprehensively taking into account the audit quality, compensation and othervarious circumstances by the board of directors of the Investment Corporation.

(4)Asset Management Company, Custodian and General Administrators
The asset management company, custodian and general administrators as of the end of the
12th fiscal period are as follows.
Classification

Name

Asset manager

Kenedix Real Estate Fund Management Inc.

CustodianMizuho Trust & Banking Co., Ltd.

General administrator (Unitholder registry)

Sumitomo Mitsui Trust Bank, Limited

General administrator (Regarding book keeping)Mizuho Trust & Banking Co., Ltd.

General administrator (Administration)

Mizuho Trust & Banking Co., Ltd.

General administrator(Regarding investment corporation bonds)

Sumitomo Mitsui Trust Bank, Limited

3. Condition of investment assets(1)

Composition of assets
11th
As of July 31, 2017Classificationof assets

Trust beneficiaryinterest in real
property
Real property

Use

RegionTokyo Metropolitan Area
(Note 2)
Rentalapartment Other Regional Area
(Note 3)
Tokyo Metropolitan Area
Other
(Note 2)

Silent partnership equity interest (Note 1)
Bank deposits and other assets
Total assets

12th
As of January 31, 2018

Total of net
book value(Million yen)
(Note 4)Composition
ratio
(%)
(Note 5)

Total of net
book value(Million yen)
(Note 4)Composition
ratio
(%)
(Note 5)

106,678

63.8

114,20964.6

47,68528.5

49,033

27.7

1,798

1.1

1,798

1.0

91

0.1

221

0.1

11,062

6.6

11,551

6.5

167,316

100.0

176,813100.0(Note 1)

Silent partnership equity interest of GK Tropic I in the 11th fiscal period and of GK Tropic I and II in the 12th fiscal
period.

(Note 2)
(Note 3)“Tokyo Metropolitan Area” means major cities in Tokyo, Kanagawa, Saitama and Chiba.
“Other Regional Area” means cities designated by cabinet order and other regional cities.

(Note 4)

“Total on net book value” means carrying amounts on the balance sheet (amounts of Trust beneficiary interests in real
property and real property are book values net of depreciation) at the end of fiscal period and rounded off to one
dismal place.
“Composition ratio” means the ratio of carrying amounts of each classified assets to total assets on balance sheet androunded off to one dismal place.

(Note 5)(2)Major property
The principal properties (Top 10 properties in net book value as of January 31, 2018) are as
follows.
Leasable area(m²)
(Note 1)

Leased area(m²)
(Note 2)

Occupancy Ratio of rental
rate
revenue to total(%)
rental revenue(Note 3)(%) (Note 4)

No.

Name of property

Book value(Million yen)

T-78

KDX Residence Toyosu

7,818

6,811.38

6,811.38

100.0

1.4 Apartment

T-56

KDX Residence Hanzomon

4,982

4,854.23

4,854.23

100.0

2.3 Apartment

T-1

KDX Daikanyama Residence

4,721

5,338.99

5,244.35

98.2

2.8 Apartment

R-39

KDX Residence Ohori
Harbor View Tower

4,671

11,855.63

10,854.69

91.6

3.2 Apartment

T-52

KDX Residence Togoshi

3,782

4,591.76

4,441.03

96.7

2.1 Apartment

R-35

Leopalace Flat Shin-sakae

3,592

11,589.95

11,589.95

100.0

2.1 Apartment

3,250

4,358.43

4,218.00

96.8

1.9 Apartment

3,218

6,511.88

6,361.03

97.7

1.9 Apartment

3,205

5,534.86

5,534.86

100.0

1.7 Apartment

3,045

4,314.87

3,996.56

92.6

1.7 Apartment

42,28865,761.98

63,906.08

－

T-26
R-37
T-24
T-63

KDX Residence Higashishinjuku
KDX Residence
Honmachibashi
KDX Residence Nihombashi
Suitengu
KDX Residence Tachikawa
Total

Major use

21.3

(Note 1) “Leasable area” is the floor area of each portfolio asset for which the building is leasable (if a portfolio asset has morethan one building, the total floor area of leasable buildings) that is set forth in a lease agreement as of January 31, 2018.
(Note 2) “Leased area” is the floor space set forth in a lease agreement that has been executed with an end tenant and leased asof January 31, 2018.
(Note 3) “Occupancy rate” = “leased area” / “leasable area” ×100
(Note 4) The ratio of rental revenue to total rental revenue = each property’s real estate lease business revenue / total for allproperties.

(3)Details of property
Detail of Real Estate Portfolio Assets
Details of real properties, etc. owned by the Investment Corporation as of the end of the
12th fiscal period are as follows.
Area

Appraisal value atthe end of
fiscal period(Million yen)
(Note 1)

No.

Name of property

T-1

KDX Daikanyama Residence

7-1,Sarugakucho,Shibuya-ku,Tokyo

TBI

4,721

5,680

T-3

KDX Odemma Residence

3-10,Nihombashi-Odenmacho,Chuo-ku,Tokyo

TBI

1,731

1,990

T-4

KDX Iwamoto-cho Residence

16-12,Iwamotocho 2-chome,Chiyoda-ku,Tokyo

TBI

800

928

T-5

KDX Bunkyo Sengoku Residence

3-2,Honkomagome 6-chome,Bunkyo-ku,Tokyo

TBI

1,468

1,710

T-6

KDX Azumabashi Residence

9-8,Agatsumabashi 1-chome,Sumida-ku,Tokyo

TBI

624

849

T-7

KDX Shimura Sakaue Residence

16-5,Higashi-Sakashia 1-chome,Itabashi-ku,Tokyo

TBI

2,718

3,250

T-9

Cosmo Heim Motosumiyoshi

RP

1,798

1,790

T-10 KDX Musashi Nakahara Residence

Address

Book
Form ofvalue
ownership (Millionyen)

5-1, Kizukikigioncho, Nakahara-ku, Kawasaki-shi,
Kanagawa
18-22, Shimokodanaka 4-chome, Nakahara-ku,
Kawasaki-shi, Kanagawa

Tokyo Metropolitan Area

TBI

637

713

T-11 KDX Chiba Chuo Residence

2-17, Shindencho, Chuo-ku, Chiba-shi, China

TBI

1,367

1,750

T-12 KDX Kawaguchi Saiwai-cho Residence

14-24, Saiwaicho 2-chome, Kawaguchi-shi,
Saitama

TBI

1,128

1,350

T-13 KDX Residence Shirokane I

7-8, Shiroganedai 4-chome, Minata-ku, Tokyo

TBI

3,019

3,430

T-15 KDX Residence Shirokane II

7-8, Shiroganedai 4-chome, Minata-ku, Tokyo

TBI

2,812

3,340

T-16 KDX Residence Minami-aoyama

4-8, Minami-Aoyama 3-chome, Minato-ku, Tokyo

TBI

2,244

2,470

T-17 KDX Residence Minami-azabu

3-22, Minami-Azabu 2-chome, Minato-ku, Tokyo

TBI

2,082

2,530

T-18 KDX Residence Shiba Koen

4-16, Shiba 3-chome, Minato-ku, Tokyo

TBI

1,776

2,220

T-19 KDX Residence Azabu East

25-2, Higashi-Azabu 1-chome, Minato-ku, Tokyo

TBI

1,559

1,910

T-20 KDX Residence Takanawa

15-7, Takanawa 3-chome, Minatoko-ku, Tokyo

TBI

770

987

T-21 KDX Residence Nishihara

37-4, Nishihara 1-chome, Shibuya-ku, Tokyo

TBI

1,456

1,870

T-22 KDX Residence Daikanyama II

11-22, Ebisu Nishi 2-chome, Shibuya-ku, Tokyo

TBI

762

928

T-23 KDX Residence Sendagaya

38-7, Sendagaya 3-chome, Shibuya-ku, Tokyo

TBI

645

788

T-24 KDX Residence Nihombashi Suitengu

41-6 Nihombashi Hakozakicho, Chuo-ku, Tokyo

TBI

3,205

3,870

T-25 KDX Residence Nihombashi Hakozaki

38-1 Nihombashi Hakozakicho, Chuo-ku, Tokyo

TBI

1,174

1,330

T-26 KDX Residence Higashi-shinjuku

1-9 Okubo 2-chome, Shinjuku-ku, Tokyo

TBI

3,250

3,890

T-27 KDX Residence Yotsuya

22-50 Arakicho, Shinjuku-ku, Tokyo

TBI

2,261

2,590

T-28 KDX Residence Nishi-shinjuku

18-15, Nishi-Shinjuku 7-chome, Shinjuku-ku,
Tokyo

TBI

1,003

1,250

T-29 KDX Residence Kagurazaka

8-10, Tsukijicho, Shinjuku-ku, Tokyo

TBI

716

870

T-30 KDX Residence Futako Tamagawa

31-29, Seta 2-chome, Setagaya-ku, Tokyo

TBI

1,276

1,420

T-31 KDX Residence Komazawa Koen

21-6 Komazawa 5-chome, Setagaya-ku, Tokyo

TBI

915

1,070

T-32 KDX Residence Mishuku

37-13, Mishuku 2chome, Setagata-ku, Tokyo

TBI

760

888

T-33 KDX Residence Yoga

34-21, Seta 5-chome, Setagaya-ku, Tokyo

TBI

700

835

T-34 KDX Residence Shimouma

21-8, Shimouma 1-chome, Setagaya-ku, Tokyo

TBI

604

727

T-35 Raffine Minami-magome

24-8, Minami-Magome 5-chome, Ota-ku, Tokyo

TBI

1,247

1,450

T-36 KDX Residence Yukigaya Otsuka

15-13, Minami-Yukigaya 2-chome, Ota-ku, Tokyo

TBI

1,039

1,280

T-37 KDX Residence Denenchofu

40-14, Denenchofu Honmachi, Ota-ku, Tokyo

TBI

1,055

1,190

T-38 KDX Residence Tamagawa

9-17, Tamagawa 1-chome, Ota-ku, Tokyo

TBI

755

901

T-39 KDX Residence Monzennakacho

6-7, Kiba 3-chome, Koto-ku, Tokyo

TBI

770

938

T-40 KDX Residence Okachimachi

28-4, Taito 2-chome, Taito-ku, Tokyo

TBI

846

1,020

T-41 KDX Residence Moto-asakusa

8-10, Motoasakusa 4-chome, Taito-ku, Tokyo

TBI

799

968

T-42 KDX Residence Itabashi Honcho

13-16, Yamatocho, Itabashi-ku, Tokyo

TBI

610

727

T-43 KDX Residence Azusawa

7-13, Azusawa 1-chome, Itabashi-ku, Tokyo

TBI

560

635

T-44 KDX Residence Tobu Nerima

27-9, Kitamachi 1-chome, Nerima-ku, Tokyo

TBI

407

496

TBI

787

960

TBI

999

1,130

T-45 KDX Residence Yokohama Kannai
T-46 KDX Residence Miyamaedaira

5-9, Bandaicho 3-chome, Naka-ku, Yokohama-shi,
Kanagawa
14-3, Miyamaedaira 3-chome, Miyamae-ku,
Kawasaki-shi, Kanagawa

Area

No.

Name of property

Address

Book
Form ofvalue
ownership (Million
yen)Appraisal value atthe end of fiscal
period(Million yen)
(Note 1)

T-47 KDX Residence Machida13-32, Kamitsurumahoncho, Minami-ku,
Sagamihara-shi, Kanagawa

TBI

1,745

1,990

T-48 KDX Residence Kinshicho24-13, Midori 4-chome, Sumida-ku, Tokyo

TBI

1,354

1,600

TBI

1,008

1,170

TBI

566

643

33-4, Nishimbashi-Hamacho 3-chome, Chuo-ku,
T-49 KDX Residence Nihombashi HamachoTokyo
8-5, Nihombashi-Horidomecho 1-chome, Chuo-ku,
T-50 KDX Residence Nihombashi NingyochoTokyo
T-51 KDX Residence Jiyugaoka
11-27, Yakumo 3-chome, Meguro-ku, Tokyo

Tokyo Metropolitan Area

TBI

1,327

1,500

T-52 KDX Residence Togoshi

1-1, Togoshi 5-chome, Shinagawa-ku, Tokyo

TBI

3,782

4,520

T-53 KDX Residence Shinagawa Seaside

6-7, Higashi-Shinagawa 3-chome, Shinagawa-ku,
Tokyo

TBI

2,612

3,100

T-54 KDX Residence Ojima

8-4, Ojima 4-chome, Koto-ku, Tokyo

TBI

1,861

2,160

T-55 KDX Residence Oyama

8-8, Oyamakanaimachi, Itabashi-ku, Tokyo

TBI

2,684

3,120

T-56 KDX Residence Hanzomon

12-1, Kojimachi 2-chome, Chiyoda-ku, Tokyo

TBI

4,982

5,470

T-57 B-Site Akihabara
7, Kanda-Sudacho 1-chome, Chiyoda-ku, TokyoKDX Residence Kagurazaka Dori (NoteT-58
120-1, Yaraicho, Shinjuku-ku, Tokyo3)
T-59 KDX Residence Sendagi
43-17, Sendagi 3-chome, Bunkyo-ku, Tokyo

TBI

869

941

TBI

1,389

1,620

TBI

2,377

2,360

T-60 KDX Residence Seijo

16-25, Seijyo 4-chome, Setagaya-ku, Tokyo

TBI

1,431

1,520

T-61 KDX Residence Akihabara

13-7, Taito Higashi 2-chome, Taito-ku, Tokyo

TBI

1,266

1,430

T-62 KDX Residence Iriya

10-7, Iriya 1-chome, Taito-ku, Tokyo

TBI

1,079

1,300

TBI

3,045

3,410

TBI

1,129

1,380

T-63 KDX Residence Tachikawa
T-64 KDX Residence Tsurumi

28-29, Akebonocho 2-chome, Tachiakwa-shi,Tokyo
10, Mukaicho 1-chome, Tsurumi-ku, Yokohamashi, Kanagawa

T-65 KDX Residence Morishita Chitose

5-3, Chitose 1-chome, Sumida-ku, Tokyo

TBI

1,121

1,200

T-66 KDX Residence Akasaka

13-11, Akasaka 6-chome, Minato-ku, Tokyo

TBI

1,203

1,530

T-67 KDX Residence Kanda

8-2, Uchikanda 2-chome, Chiyoda-ku, Tokyo

TBI

733

1,020

T-68 KDX Residence Ebisu

11-16, Ebisu Minami 1-chome, Shibuya-ku, Tokyo

TBI

2,972

3,880

T-69 KDX Residence Nishi-magome

4-4, Minami-Magome 6-chome, Ota-ku, Tokyo

TBI

1,184

1,180

T-70 KDX Residence Nishi-azabu

5-10, Nishi-Azabu 3-chome, Minato-ku, Tokyo

TBI

1,248

1,450

T-71 KDX Residence Azabu Sendaizaka

1-7, Minami-Azabu 3-chome, Minato-ku, Tokyo

TBI

810

929

T-72 KDX Residence Waseda Tsurumaki574-25, Waseda-Tsurumakimachi, Shinjuku-ku,
Tokyo

TBI

574

778

T-73 KDX Residence Bunkyo Yushima

29-2, Yushima 2-chome, Bunkyo-ku, Tokyo

TBI

710

892

T-74 KDX Residence Kamishakujii

18-5, Kamishakujii 1-chome, Nerima-ku, Tokyo

TBI

665

750

TBI

785

922

T-75 KDX Residence Shin-otsuka
T-76 KDX Residence Sakurajosui44-16, Higashi-Ikebukuro 5-chome, Toshima-ku,
Tokyo
26-14, Shimotakaido 1-chome, Suginami-ku,
Tokyo

Other Regional Area

TBI

919

1,100

T-77 KDX Residence Ryogoku

19-13, Kamesawa 2-chome, Sumida-ku, Tokyo

TBI

868

1,050

T-78 KDX Residence Toyosu

2-33, Toyosu 1-chome, Koto-ku, Tokyo

TBI

7,818

7,640

R-2

3-25, Kasugamachi, Aoba-ku, Sendai-shi, Miyagi

TBI

965

1,270

TBI

1,074

1,300

TBI

1,025

1,350

TBI

2,773

3,150

TBI

962

1,200

TBI

1,401

1,780

TBI

1,599

1,950

TBI

741

901

TBI

807

1,000

TBI

434

529

TBI

515

683

TBI

508

562

TBI

469

611

KDX Jozenjidori Residence

R-3

KDX Izumi Residence

R-4

KDX Chihaya Residence

R-5

KDX Sakaisuji Hommachi Residence

R-6

KDX Shimmachi Residence

R-7

KDX Takarazuka Residence

R-8

KDX Shimizu Residence

R-9

KDX Residence Odori Koen

R-10 KDX Residence Kikusui Yojo
R-11 KDX Residence Toyohira Koen
R-13 KDX Residence Ichiban-cho
R-14 KDX Residence Kotodai
R-15 KDX Residence Izumi Chuo

24-28, Izumi 2-chome, Higashi-ku, Nagoya-shi,
Aichi
49-6, Shinsakae 1-chome, Naka-ku, Nagoya-shi,
Aichi
7-15, Kawaracho 1-chome, Chuo-ku, Osaka-shi,
Osaka
9-23, Shinmachi 4-chome, Nishi-ku, Osaka-shi,
Osaka
2-43, Sakaemachi 3-chome, Takarazuka-shi, Hyogo
21-27, Shimizu 1-chome, Minami-ku, Fukuoka-shi,
Fukuoka
1000-4, Minami 2-jo 40-chome, Chuo-ku,
Sapporo-shi, Hokkaido
2-35, Kikusui 4-jo 3-chome, Shiroishi-ku, Sapporoshi, Hokkaido
4-16, Hiragishi 4-jo 3-chome, Toyohira-ku,
Sapporo-shi, Hokkaido
15-42, Ichibancho 1-chome, Aoba-ku, Sendai-shi,
Miyagi
3-25, Uesugi 1-chome, Aoba-ku, Sendai-shi,
Miyagi45-2, Ichinazaka-Ishidome, Izumi-ku, Sendai-shi,
Miyagi

Area

No.

Book
Form ofvalue
ownership (Million
yen)Address

Name of property

R-16 KDX Residence Higashi-sakura I
R-17 KDX Residence Higashi-sakura II
R-18 KDX Residence Jingumae
R-19 KDX Residence Nishi-oji

13-22, Higashi-sakura 2-chome, Higashi-ku,
Nagoya-shi, Aichi
5-10, Higasi-sakura 1-chome, Higashi-ku, Nagoyashi, Aichi
4-27, Yokota 2-chome, Atsuta-ku, Nagoya-shi,
Aichi
40-3, Nishi 7-jo Kakekoshicho, Shimogyo-ku,
Kyoto-shi, Kyoto

Appraisal value atthe end of fiscal
period(Million yen)
(Note 1)

TBI

2,299

2,700

TBI

884

1,070

TBI

817

1,040
925

TBI

797

R-20 KDX Residence Saiin

30-2, Sanintakadacho, Ukyo-ku, Kyoto-shi, Kyoto

TBI

430

498

R-21 KDX Residence Namba

6-16, Inari 1-chome, Naniwa-ku, Osaka-shi, Osaka

TBI

1,388

1,630

TBI

1,314

1,560

TBI

491

578

TBI

1,287

1,387

TBI

706

840

TBI

532

640

TBI

1,059

1,290

TBI

1,462

1,720

TBI

569

664

TBI

664

851

TBI

745

839

TBI

751

867

TBI

430

510

TBI

3,592

4,260

TBI

981

1,120

11-9, Shiokusa 3-chome, Naniwa-ku, Osaka-shi,
Osaka
16-11, Kikawa Higashi 4-chome, Yodogawa-ku,
Osaka-shi, Osaka

R-22 KDX Residence Namba-minami
R-23 KDX Residence Shin-osaka
R-24 KDX Residence Ibaraki I・II (Note 2)
R-25 KDX Residence Toyonaka-minami
R-26 KDX Residence Moriguchi
Other Regional Area

R-27 KDX Residence Sannomiya
R-28 Ashiya Royal Homes

9-11, 9-12, Takehashicho, Ibaragi-shi, Osaka
7-22, Shonaihigashicho 2-chome, Toyonaka-shi,Osaka
12-12, Dainichihigasihmachi, Moriguchi-shi,
Osaka
8-10, Ninomiyacho 4-chome, Chuo-ku, Kobe-shi,
Hyogo
20-10, Oharacho, Ashiya-shi, Hyogo

R-29 KDX Residence Funairi Saiwai-cho
R-30 KDX Residence Tenjin-higashi II
R-32 KDX Residence Nishi Koen
R-33 KDX Residence Hirao Josui-machi
R-34 Melody Heim Gotenyama
R-35 Leopalace Flat Shin-sakae
R-36 KDX Residence Koman Yamate

10-5, Funairisaiwaicho, Naka-ku, Hiroshima-shi,
Hiroshima
6-22, Chikukohonmachi, Hakata-ku, Fukuoka-shi,
Fukuoka
5-7, Minato 3-chome, Chuo-ku, Fukuoka-shi,
Fukuoka
10-17, Hiraojyosuimachi, Chuo-ku, Fukuoka-shi,
Fukuoka
6-1, Nagisa Nishimachi 1-chome, Hirakata-shi,
Osaka
5-31, Shinsakae 1-chome, Naka-ku, Nagoya-shi,
Aichi
9-3, Moriminamimachi 1-chome, Higashinada-ku,
Kobe-shi, Hyogo

R-37 KDX Residence Hommachibashi

2-14, Honmachibashi, Chuo-ku, Osaka-shi, Osaka

TBI

3,218

3,450

R-38 KDX Residence Minami-kusatsu

1-8, Minamikusatsu 1-chome, Kusatsu-shi, Shiga

TBI

2,024

2,290

TBI

4,671

5,210

TBI

952

1,560

TBI

1,308

1,470

TBI

657

739

TBI

1,712

1,670

165,040

192,137

KDX Residence Ohori Harbor View 2-18, Minato 1-chome, Chuo-ku, Fukuoka-shi,
R-39
Tower
Fukuoka
3-2, Minami 3-jo Nishi 8-chome, Chuo-ku,
R-40 KDX Residence Minami-sanjo
Sapporo-shi, Hokkaido
3-15, Kitakyuhojicho 1-chome, Chuo-ku, OsakaR-41 Serenite Kita-kyuhojishi, Osaka
R-42 Serenite Nishinomiya Hommachi
R-43 KDX Residence Nishijin

5-26, Honmachi, Nishinomiya-shi, Hyogo
24-30, Nishijin 2-chome, Sawara-ku, Fukuoka-shi,
Fukuoka
Total(Note 1)

(Note 2)
(Note 3)

“Appraisal value at the end of the fiscal period” is the appraisal value in a real property appraisal prepared, pursuant tothe asset appraisal techniques and standards in the Investment Corporation’s certificate of incorporation and the rulesof the Investment Trusts Association, Japan, by Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd.,
Morii Appraisal & Investment Consulting Inc., or Tanizawa Sogo Appraisal Co., Ltd.
The property consists of two buildings and book value and appraisal value are total amount of each value of the two
properties.
The name of the property was changed as follows.
Property No.

New Property Name

Current Property Name

Effective Date

T-58

KDX Residence Kagurazaka DoriBureau Kagurazaka

February 5, 2018

The changes in the rental business of the real properties owned by the Investment
Corporation are as follows.

Area

11th
12th
(From February 1, 2017 to July 31, 2017) (From August 1, 2017 to January 31, 2018)
Rental andRental andOccupancy
Ratio ofOccupancy
Ratio of
Numberother
Number ofotherrate at therentalrate at therentalof tenants
operatingtenants at
operatingend ofrevenue to
end ofrevenue toat the end
revenues
the end ofrevenues
periodtotal rental
periodtotal rentalof period(Million
period(Million(%)
revenues(%)
revenues(Note 1)yen)
(Note 1)yen)
(Note 2)(%)
(Note 2)(%)
(Note 3)(Note 3)
1
98.9
162
2.9
1
98.2
159
2.8

Tokyo Metropolitan Area

No.

Name of property

T-1

KDX Daikanyama Residence

T-3

KDX Odemma Residence

1

96.2

57

1.0

1

100.0

57

1.0

T-4

KDX Iwamoto-cho Residence

1

90.9

27

0.5

1

98.0

27

0.5

T-5

KDX Bunkyo Sengoku Residence

1

100.0

50

0.9

1

100.0

50

0.9

T-6

KDX Azumabashi Residence

1

95.4

24

0.4

1

100.0

25

0.4

T-7

KDX Shimura Sakaue Residence

1

96.6

102

1.8

1

100.0

103

1.8

T-9

Cosmo Heim Motosumiyoshi

-

-

43

0.8

-

-

43

0.8

T-10 KDX Musashi Nakahara Residence

1

97.2

26

0.5

1

94.3

24

0.4

T-11 KDX Chiba Chuo Residence

1

95.1

58

1.0

1

95.5

60

1.1

T-12 KDX Kawaguchi Saiwai-cho Residence

1

95.9

47

0.9

1

98.3

48

0.8

T-13 KDX Residence Shirokane I

1

97.2

110

2.0

1

98.8

108

1.9

T-15 KDX Residence Shirokane II

1

95.8

90

1.6

1

98.8

90

1.6

T-16 KDX Residence Minami-aoyama

1

95.8

65

1.2

1

70.8

51

0.9

T-17 KDX Residence Minami-azabu

1

92.7

70

1.3

1

98.0

73

1.3

T-18 KDX Residence Shiba Koen

1

98.4

62

1.1

1

97.5

63

1.1

T-19 KDX Residence Azabu East

1

100.0

53

1.0

1

98.9

55

1.0

T-20 KDX Residence Takanawa

1

100.0

26

0.5

1

97.4

26

0.5

T-21 KDX Residence Nishihara

1

91.3

50

0.9

1

100.0

48

0.9

T-22 KDX Residence Daikanyama II

1

100.0

28

0.5

1

100.0

27

0.5

T-23 KDX Residence Sendagaya

1

100.0

22

0.4

1

100.0

21

0.4

T-24 KDX Residence Nihombashi Suitengu

1

100.0

96

1.7

1

100.0

97

1.7

T-25 KDX Residence Nihombashi Hakozaki

1

98.7

40

0.7

1

98.7

40

0.7

T-26 KDX Residence Higashi-shinjuku

1

100.0

108

2.0

1

96.8

110

1.9

T-27 KDX Residence Yotsuya

1

98.1

76

1.4

1

100.0

78

1.4

T-28 KDX Residence Nishi-shinjuku

1

96.6

34

0.6

1

98.0

34

0.6

T-29 KDX Residence Kagurazaka

1

97.2

24

0.4

1

97.2

24

0.4

T-30 KDX Residence Futako Tamagawa

1

97.6

43

0.8

1

100.0

43

0.8

T-31 KDX Residence Komazawa Koen

1

100.0

28

0.5

1

95.5

28

0.5

T-32 KDX Residence Mishuku

1

100.0

26

0.5

1

97.7

26

0.5

T-33 KDX Residence Yoga

1

100.0

23

0.4

1

90.0

23

0.4

T-34 KDX Residence Shimouma

1

96.8

20

0.4

1

100.0

20

0.4

T-35 Raffine Minami-magome

1

100.0

47

0.8

1

100.0

46

0.8

T-36 KDX Residence Yukigaya Otsuka

1

100.0

38

0.7

1

98.7

39

0.7

T-37 KDX Residence Denenchofu

1

100.0

37

0.7

1

100.0

38

0.7

T-38 KDX Residence Tamagawa

1

98.1

29

0.5

1

98.1

28

0.5

T-39 KDX Residence Monzennakacho

1

100.0

27

0.5

1

95.9

27

0.5

T-40 KDX Residence Okachimachi

1

100.0

32

0.6

1

100.0

29

0.5

T-41 KDX Residence Moto-asakusa

1

98.5

29

0.5

1

95.9

29

0.5

T-42 KDX Residence Itabashi Honcho

1

98.1

22

0.4

1

96.1

23

0.4

T-43 KDX Residence Azusawa

1

100.0

19

0.4

1

100.0

20

0.4

T-44 KDX Residence Tobu Nerima

1

96.6

17

0.3

1

100.0

17

0.3

T-45 KDX Residence Yokohama Kannai

1

93.1

34

0.6

1

97.0

34

0.6

T-46 KDX Residence Miyamaedaira

1

100.0

37

0.7

1

97.5

36

0.6

T-47 KDX Residence Machida

1

95.8

63

1.1

1

100.0

58

1.0

T-48 KDX Residence Kinshicho

1

100.0

45

0.8

1

100.0

43

0.8

T-49 KDX Residence Nihombashi Hamacho

1

100.0

29

0.5

1

100.0

30

0.5

T-50 KDX Residence Nihombashi Ningyocho

1

96.8

18

0.3

1

100.0

18

0.3

T-51 KDX Residence Jiyugaoka

1

97.9

39

0.7

1

97.7

39

0.7

T-52 KDX Residence Togoshi

1

98.9

121

2.2

1

96.7

119

2.1

11th
(From February 1, 2017 to July 31,2017)
Area

No.

Name of property

12th(From August 1, 2017 to January 31, 2018)

Rental andRental andOccupancy
Ratio ofOccupancy
Ratio of
Number ofother
Number ofotherrate at therentalrate at therentaltenants at
operatingtenants at
operatingend ofrevenue to
end ofrevenue tothe end ofrevenues
the end ofrevenues
periodtotal rental
periodtotal rental
period(Million
period(Million(%)
revenues(%)
revenues(Note 1)yen)
(Note 1)yen)
(Note 2)(%)
(Note 2)(%)
(Note 3)(Note 3)

Tokyo Metropolitan Area
Other Regional Area

T-53 KDX Residence Shinagawa Seaside

1

98.6

87

1.6

1

97.1

86

1.5

T-54 KDX Residence Ojima

1

96.6

63

1.1

1

100.0

63

1.1

T-55 KDX Residence Oyama

1

94.4

92

1.7

1

95.3

90

1.6

T-56 KDX Residence Hanzomon

1

97.2

129

2.3

1

100.0

130

2.3

T-57 B-Site Akihabara

1

100.0

23

0.4

1

100.0

23

0.4

T-58 KDX Residence Kagurazaka Dori

1

100.0

39

0.7

1

100.0

39

0.7

T-59 KDX Residence Sendagi

1

100.0

66

1.2

1

100.0

64

1.1

T-60 KDX Residence Seijo

1

97.5

40

0.7

1

97.5

40

0.7

T-61 KDX Residence Akihabara

1

100.0

38

0.7

1

97.0

39

0.7

T-62 KDX Residence Iriya

1

100.0

39

0.7

1

98.6

38

0.7

T-63 KDX Residence Tachikawa

1

98.8

99

1.8

1

92.6

98

1.7

T-64 KDX Residence Tsurumi

1

100.0

53

1.0

1

100.0

52

0.9

T-65 KDX Residence Morishita Chitose

1

96.8

38

0.7

1

97.4

38

0.7

T-66 KDX Residence Akasaka

1

96.4

39

0.7

1

96.6

37

0.7

T-67 KDX Residence Kanda

1

100.0

29

0.5

1

100.0

27

0.5

T-68 KDX Residence Ebisu

1

92.1

92

1.7

1

100.0

96

1.7

T-69 KDX Residence Nishi-magome

1

91.1

21

0.4

1

96.1

30

0.5

T-70 KDX Residence Nishi-azabu

1

96.9

38

0.7

1

97.3

38

0.7

T-71 KDX Residence Azabu Sendaizaka

1

94.0

26

0.5

1

100.0

25

0.5

T-72 KDX Residence Waseda Tsurumaki

1

92.4

21

0.4

1

100.0

21

0.4

T-73 KDX Residence Bunkyo Yushima

1

97.8

23

0.4

1

100.0

25

0.4

T-74 KDX Residence Kamishakujii

1

95.7

23

0.4

1

93.8

23

0.4

T-75 KDX Residence Shin-otsuka

1

100.0

22

0.4

1

100.0

22

0.4

T-76 KDX Residence Sakurajosui

1

100.0

34

0.6

1

85.5

27

0.5

T-77 KDX Residence Ryogoku

1

97.9

27

0.5

1

93.4

27

0.5

T-78 KDX Residence Toyosu

-

-

-

-

1

100.0

79

1.4

R-2

KDX Jozenji Dori Residence

1

95.0

49

0.9

1

93.0

48

0.9

R-3

KDX Izumi Residence

1

97.4

42

0.8

1

94.8

42

0.7

R-4

KDX Chihaya Residence

1

91.8

48

0.9

1

96.2

48

0.8

R-5

KDX Sakaisuji Hommachi Residence

1

95.0

106

1.9

1

97.0

107

1.9

R-6

KDX Shimmachi Residence

1

94.7

37

0.7

1

96.8

37

0.7

R-7

KDX Takarazuka Residence

1

99.3

59

1.1

1

100.0

58

1.0

R-8

KDX Shimizu Residence

1

91.5

71

1.3

1

95.9

70

1.2

R-9

KDX Residence Odori Koen

1

96.1

33

0.6

1

97.4

33

0.6

R-10 KDX Residence Kikusui Yojo

1

92.8

38

0.7

1

94.4

37

0.7

R-11 KDX Residence Toyohira Koen

1

95.4

23

0.4

1

89.1

21

0.4

R-13 KDX Residence Ichiban-cho

1

95.4

27

0.5

1

97.3

26

0.5

R-14 KDX Residence Kotodai

1

96.4

20

0.4

1

100.0

20

0.4

R-15 KDX Residence Izumi Chuo

1

89.0

23

0.4

1

94.0

22

0.4

R-16 KDX Residence Higashi-sakura I

1

94.6

95

1.7

1

93.0

97

1.7

R-17 KDX Residence Higashi-sakura II

1

95.5

40

0.7

1

95.5

38

0.7

R-18 KDX Residence Jingumae

1

96.0

40

0.7

1

91.4

38

0.7

R-19 KDX Residence Nishi-oji

1

95.9

33

0.6

1

97.0

32

0.6

R-20 KDX Residence Saiin

1

100.0

18

0.3

1

98.0

18

0.3

R-21 KDX Residence Namba

1

100.0

57

1.0

1

97.0

56

1.0

R-22 KDX Residence Namba-minami

1

97.4

54

1.0

1

96.9

56

1.0

R-23 KDX Residence Shin-osaka

1

90.9

21

0.4

1

97.7

20

0.4

R-24 KDX Residence Ibaraki I・II

1

100.0

53

1.0

1

96.7

53

0.9

R-25 KDX Residence Toyonaka-minami

1

95.7

29

0.5

1

95.6

28

0.5

Area

No.

Name of property

11th
12th
(From February 1, 2017 to July 31,2017)(From August 1,2017 to January 31,2018)
Rental andRental andOccupancy
Ratio ofOccupancy
Ratio of
Number ofother
Number ofotherrate at therentalrate at therentaltenants at
operatingtenants at
operatingend ofrevenue to
end ofrevenue tothe end ofrevenues
the end ofrevenues
periodtotal rental
periodtotal rental
period(Million
period(Million(%)
revenues(%)
revenues(Note 1)yen)
(Note 1)yen)
(Note 2)(%)
(Note 2)(%)
(Note 3)(Note 3)

Other Regional Area

R-26 KDX Residence Moriguchi

1

96.1

24

0.4

1

100.0

24

0.4

R-27 KDX Residence Sannomiya

1

96.7

39

0.7

1

100.0

40

0.7

R-28 Ashiya Royal Homes

1

95.0

65

1.2

1

100.0

66

1.2

R-29 KDX Residence Funairi Saiwai-cho

1

100.0

28

0.5

1

98.4

27

0.5

R-30 KDX Residence Tenjin-higashi II

1

98.4

31

0.6

1

95.2

30

0.5

R-32 KDX Residence Nishi Koen

1

91.1

30

0.5

1

91.2

30

0.5

R-33 KDX Residence Hirao Josui-machi

1

91.6

27

0.5

1

95.7

28

0.5

R-34 Melody Heim Gotenyama

1

97.5

21

0.4

1

100.0

21

0.4

R-35 Leopalace Flat Shin-sakae

1

100.0

121

2.2

1

100.0

121

2.1

R-36 KDX Residence Koman Yamate

1

95.2

34

0.6

1

95.9

33

0.6

R-37 KDX Residence Hommachibashi

1

97.7

105

1.9

1

97.7

109

1.9

R-38 KDX Residence Minami-kusatsu

1

95.0

99

1.8

1

95.1

98

1.7

KDX Residence Ohori Harbor View
R-39
Tower

1

93.0

184

3.3

1

91.6

180

3.2

R-40 KDX Residence Minami-sanjo

1

98.4

55

1.0

1

95.4

53

0.9

R-41 Serenite Kita-kyuhoji

1

97.5

42

0.8

1

96.4

41

0.7

R-42 Serenite Nishinomiya Hommachi

1

98.1

23

0.4

1

98.1

23

0.4

R-43 KDX Residence Nishijin

-

-

-

-

1

88.6

55

1.0

112

96.8

5,574

100.0

114

97.0

5,671

100.0

Total

(Note 1)In the “number of tenants” column, if a master lease agreement has been executed with a master lease company, 1 isentered as the number of tenants. As of January 31, 2018, master lease agreements had been executed for all investment
assets of the Investment Corporation except for one case of ownership of leased land and Raffine Minami-magome; the“total” for the “number of tenants” is the sum of the master lease agreements for the properties (running number); andfor the properties with no master lease agreement, the number of end tenants is entered. There are a total of 15 master
lease companies.

(Note 2)The “occupancy rate” = leased area / leasable area x 100. The “total” for the “occupancy rate” column is the occupancy
rate for the portfolio as a whole (excluding leased land). For the 12th fiscal period, the occupancy rate for the portfolio
as a whole, including leased land (area total 3,040.11m2), was 97.0%.

(Note 3)

“Rental and other operating revenues” is the sum of a property’s rental business income for each fiscal period.

(Details of investment securities)
Investment securities as of January 31, 2018 are as follows.

Name of assets

Type

Unit

Equity interests in
TK property fundwith G.K. Tropic
One as operator(Note 1)

Subordinated silent
partnership equity
interest

Equity interests in
TK property fundwith G.K. Tropic
Two as operator(Note 2)

Subordinated silent
partnership equity
interest
Total

(4)

－

Book value(Million yen)

Assessed value(Million yen)
(Note 3)

Unit
value

Value

Unit
value

Value

88

－

88

－

133

－

221

－

Gain
(Loss)
on
Remarks
valuation(Million
yen)

－

－

－

－

133

221

－

(Note 1)

TK property fund owns trust beneficiary interests in real estate for “KDX Residence Shukugawa Hills”.

(Note 2)

TK property fund owns trust beneficiary interests in real estate for “KDX Residence Asagaya”, “KDX Residence
Hiyoshi” and “Serenite Kobe Motomachi”.

(Note 3)

The assessed value is stated at the book value.

Details of specified transaction
The details of specified transaction at the end of 12th fiscal period are as follows.
Contact amount (Million yen)Classification

Transaction

Over-the-counter

Interest rate swap
(Floating-rate to fixedrate interest)

Total

－

(Note 1)
(Note 2)
(Note 3)

(5)

Maturing after 1
year (Note 1)

Fair value(Million yen)
(Note 2) (Note 3)

68,80060,80080

68,80060,80080(Note 1)

The interest rate swap contract amount, etc. is based on the assumed principal.
With respect to those meeting the requirements for special treatment under the accounting standards for financial
products, the fair value is not listed.
Appraised at the price presented by the financial institution that is the other party in the transaction.

Other assets
Real estate properties as well as beneficiary interests having real estate properties as major
trust assets are all set forth in (3) Details of portfolio assets above.

(6)

Asset ownership per country or region
There is no relevant information for countries and regions other than Japan.

4. Capital expenditures for property(1)

Schedule of capital expenditures
The current significant plan for capital expenditures on property maintenance for the six
months ended July 31, 2018 for real properties and real estate related to trust beneficiary interest
the Investment Corporation owns. The amounts of estimated cost shown in the below table areincluding expenses that will be charged to income.

No.

(2)

Name of property

Address

PurposeT-13

KDX Residence
Shirokane I

Minato-ku,
Tokyo

Major renewal
construction

T-15

KDX Residence
Shirokane II

Minato-ku,
Tokyo

Major renewal
construction

R-43

KDX Residence
Nishijin

Fukuoka-shi,
Fukuoka

Major renewal
construction(2nd phase)

R-11

KDX Residence
Toyohira Koen

Sapporo-shi,
Hokkaido

Major renewal
construction

KDX Residence
R-43
Nishijin

Fukuoka-shi,
Fukuoka

Intercomfacilities
exchange
construction

Estimate cost(Million yen)
Payment
Scheduled term forfor the six
Total ofconstruction ormonthsTotal
advancedmaintenanceended
payment
January
31, 2018
From February,
2018
100
－
－
To July, 2018
From February,
2018
80
－
－
To July, 2018
From February,
2018
54
－
－
To July, 2018
From February,
2018
44
－
－
To July, 2018
From February,
2018
To July, 2018

16

－

－

Capital expenditures for the six months ended January 31, 2018
The outlines of major construction categorized into capital expenditure for the six months
ended January 31, 2018 are as follows.
The construction cost for the period amounted to ¥514 million, consisting of ¥286 millionof capital expenditures and ¥228 million of repair and maintenance expenses charged to income.
No.

Name of property

Address

PurposeT-56

KDX Residence
HanzomonChiyoda-ku,
Tokyo

Major renewal construction

R-43

KDX Residence
Nishijin

Fukuoka-shi,
Fukuoka

Major renewal construction(1st phase)

T-25

KDX ResidenceChuo-ku,
Nihombashi Hakozaki Tokyo

Major renewal construction

R-35

Leopalace Flat Shinsakae

Nagoya-shi,
Aichi

Waterproofing construction ofrooftop

R-17

KDX Residence
Higashi-Sakura II

Nagoya-shi,
Kanagawa

Renewal construction ofcommon area

Term
From August,2017
to December, 2017
From October,2017
to January, 2018
From September,
2017
to January, 2018
From November,2017
to December, 2017
From November,2017
to December, 2017

Capitalexpenditures(Million yen)
56
48
40
4
4

Others

131

Total

286

(3)

Reserved funds for long-term maintenance plan
In accordance with its long-term repair and maintenance plan for each property, theInvestment Corporation sets aside, from the cash flow during a fiscal period, repair andmaintenance reserves designed to finance payment of future medium- to long-term major repair
and maintenance work.
(Million yen)
8th
From Aug. 1,
2015
to Jan. 31, 2016

9th
From Feb. 1,
2016
to Jul. 31, 2016

Reserve balance at the start of
the fiscal period

777

938

1,074

1,161

1,295

Reserves set aside during the
fiscal period

189

149

149

151

263

Reserves drawn down during
the fiscal period

28

13

62

17

174

Amount carried forward to thenext fiscal period

938

1,074

1,161

1,295

1,384

Term

10th
12th
11th
From Aug. 1,
From Aug. 1,
From Feb. 1, 2017
2016
2017
to Jul. 31, 2017
to Jan. 31, 2017
to Jan. 31, 2018

5. Expenditures and liabilities(1)

Details of asset management expenses(Thousand yen)

11th
From February 1, 2017
to July 31, 2017

Item

12th
From August 1, 2017
to January 31, 2018371,229

377,361

Asset custody fees

11,363

11,365③

Administrative service fees

38,14339,023④

Directors’ compensation

4,500

4,500

⑤

Other operating expenses (Note 2)

192,121

252,166

617,357

684,417①

Asset management fees

②

Total

(Note 1)

(Note 1)

There are other asset management fees in addition to the amount set forth above: asset management fees pertaining to
the subordinated silent partnership (the 11th fiscal period: 900 thousand yen and the 12th fiscal period: 1,300 thousandyen) and asset management fees pertaining to property acquisitions (the 12th fiscal period: 91,000 thousand yen) thatwere calculated into the book value of each property.

(Note 2)

There is cost related the Merger : 67,446 in the other operating expenses in the 12th fiscal period.

(2)Short-term debt and Long-term debt
Short-term debt and long-term debt consist of the following as of January 31, 2018.

Classification

LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate Payment(Note 1)due date(Note 2)

Balance atthe end of
periodUse

Remarks(in thousands of yen)
Sumitomo Mitsui
Banking
Corporation
Sumitomo Mitsui
Short-term
Bankingloans payable
Corporation

1,000,000--

1,000,000

0.438%

July 31,2018-

830,000-

830,000

0.438%

July 31,2018

Mizuho Bank, Ltd.

-

800,000-

800,000

0.438%

July 31,2018

Sub total
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Aozora Bank, Ltd.
Resona Bank,
LimitedSumitomo Mitsui
Trust Bank,
LimitedMizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking
Current
Corporation (Noteportion of
5)long-term
The Bank ofloans payable
Tokyo-Mitsubishi
UFJ, Ltd. (Note 5)
Aozora Bank, Ltd.
(Note 5)Resona Bank,
Limited (Note 5)
Sumitomo Mitsui
Trust Bank,
Limited (Note 5)
Mizuho Trust &Banking Co., Ltd.
(Note 5)
Mizuho Bank, Ltd.
(Note 5)Development
Bank of Japan Inc.
(Note 3) (Note 5)
Sub total
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Sumitomo Mitsui
Banking
Corporation

1,000,000

1,630,000-

2,630,000

4,000,000-

4,000,000-

2,500,000-

2,500,000-

1,500,000-

1,500,000-

1,000,000-

1,000,000-

0.910%

August31, 2017

1,000,000-

1,000,000-

500,000-

500,000-

500,000-

500,000-

3,250,000--

3,250,000

2,000,000--

2,000,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

500,000--

500,000

250,000--

250,000

3,000,000--

3,000,000

22,000,000- 11,000,000

11,000,000

1,000,000--

1,000,000-

1,350,000

Unsecured/(Note 4) Unguaranteed1.052%

August31, 2018

1.088%

August31, 2018

1,000,000

1.109%

January
31, 2021-

1,000,000

1.221%

July 31,
2021

-

-

1,350,000

1.183%

2,000,000--

2,000,000

1.267%

Aozora Bank, Ltd.

1,500,000--

1,500,000

1.267%The Bank ofTokyo-Mitsubishi

1,000,000--

1,000,000

1.267%

Long-term Aozora Bank, Ltd.
loans payable
Sumitomo Mitsui
Banking
Corporation

Unsecured/(Note 4) UnguaranteedMarch
Unsecured/31, 2021 (Note 4) UnguaranteedApril 30,
2022
April 30,
2022
April 30,
2022

Classification

LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate Payment(Note 1)due date(Note 2)Use

Remarks(in thousands of yen)UFJ, Ltd.
Resona Bank,
LimitedSumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank,
LimitedThe Mizuho Trustand Banking Co.,
LimitedDevelopment
Bank of Japan Inc.
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.
Mizuho Bank, Ltd.
Resona Bank,
LimitedThe Mizuho Trustand Banking Co.,
Limited
Aozora Bank, Ltd.
Development
Bank of Japan Inc.
(Note 3)
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ ,Ltd.

1.267%

April 30,2022

0.916%

August 7,2021

0.996%

August 7,2021

1.254%

August 7,2023

500,000

1.320%

August 7,2023-

600,000

0.945%

August31, 2021--

600,000

0.945%

500,000--

500,000

0.945%

950,000--

950,000

1.083%

2,000,000--

2,000,000

0.804%

1,500,000--

1,500,000

0.689%

1,200,000--

1,200,000

0.875%

1,200,000--

1,200,000

1.105%

2,000,000--

2,000,000

0.875%

1,500,000--

1,500,000

0.987%

2,000,000--

2,000,000

1.100%

1,000,000--

1,000,000

1.265%

1,000,000--

1,000,000

1,100,000--

1,100,000

1,100,000--

1,100,000

600,000
350,000--

600,000
350,000

300,000--

300,000

300,000--

300,000

1,000,000--

1,000,000

400,000--

400,000

400,000--

400,000

300,000--

300,000

200,000--

200,000

200,000--

200,000

150,000--

150,000

500,000--

600,000-

600,000

Aozora Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking
Corporation
Mitsubishi UFJ
Trust and Banking
Corporation
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Aozora Bank, Ltd.
Long-term Resona Bank,loans payable Limited
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Sumitomo Mitsui
Banking

August31,
2021
August31, 2021
November 30,
2022
November 30,
2020
November 30,
2019
January
31,
2022
January
31, 2024
April 30,
2022
Unsecured/
April 30,
(Note 4) Unguarantee
2023
dApril 30,
2024
April 30,2025

Classification

LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate Payment(Note 1)due date(Note 2)(in thousands of yen)
Corporation
Aozora Bank, Ltd.
Resona Bank,
LimitedThe Mizuho Trustand Banking Co.,
LimitedSumitomo Mitsui
Trust Bank,
LimitedThe Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking
Corporation
Development
Bank of Japan Inc.
(Note 3)
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ, Ltd. (Note 3)
Mizuho Bank, Ltd.
(Note 3)
Aozora Bank, Ltd.
Sumitomo Mitsui
Trust Bank,
LimitedResona Bank,
LimitedThe Bank ofTokyo-Mitsubishi
UFJ, Ltd. (Note 3)
The Mizuho Trustand Banking Co.,
Limited (Note 3)
Sumitomo Mitsui
Banking
Corporation
Development
Bank of Japan Inc.
(Note 3)
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Resona Bank,
LimitedSumitomo Mitsui

August31, 2020
August31, 2022

300,000--

300,000

0.678%

1,100,000--

1,100,000

0.923%

700,000--

700,000

0.923%

August31, 2022

950,000--

950,000

1.047%

August31, 2023

1,700,000--

1,700,000

1.169%

August31, 2024

950,000--

950,000

1.169%

August31, 2024

2,000,000--

2,000,000

1.345%

August31, 2025

1,000,000--

1,000,000

1.193%

August31, 2024

300,000--

300,000

0.624%

October27, 2020

1,000,000--

1,000,000

1.156%

April 27,2025

1,000,000--

1,000,000

0.819%

April 28,2025

2,500,000--

2,500,000

0.903%

April 30,2026

1,000,000--

1,000,000

0.660%

July 31,2025

1,500,000--

1,500,000

0.816%

1,000,000--

1,000,000

0.713%

1,000,000--

1,000,000

0.797%

August31, 2025

500,000--

500,000

0.797%

August31, 2025

2,000,000--

2,000,000

0.670%

August31, 2025

500,000--

500,000

0.751%

August31, 2025

3,000,000--

3,000,000

0.906%

August31, 2026

1,000,000--

1,000,000

0.773%

October
31, 2025-

1,000,000-

1,000,000

0.464%

February28, 2019-

500,000-

500,000

0.464%

February28, 2019-

1,000,000-

1,000,000

0.900%-

1,000,000-

1,000,000

0.900%

August31, 2026
August31, 2024

August22, 2027
AugustUse

Remarks

Classification

LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate Payment(Note 1)due date(Note 2)Use

Remarks(in thousands of yen)
Trust Bank,
Limited22, 2027-

1,000,000-

1,000,000

0.900%

August22, 2027-

1,200,000-

1,200,000

0.928%

August22, 2027-

1,000,000-

1,000,000

0.928%

August22, 2027-

500,000-

500,000

0.928%

August22, 2027-

500,000-

500,000

0.928%

August22, 2027-

1,500,000-

1,500,000

0.501%

February28, 2023-

1,500,000-

1,500,000

0.501%

February28, 2023-

1,500,000-

1,500,000

0.582%

February29, 2024-

1,000,000-

1,000,000

0.582%

February29, 2024-

1,000,000-

1,000,000

0.582%

February29, 2024-

500,000-

500,000

0.624%

August31, 2024-

500,000-

500,000

0.661%

August31, 2024-

1,500,000-

1,500,000

0.665%

February28, 2025-

1,000,000-

1,000,000

0.749%

February28, 2026-

1,000,000-

1,000,000

0.749%

February28, 2026

55,800,000 18,700,000-

74,500,000

78,800,000 20,330,000 11,000,000

88,130,000

Shinsei Bank, Ltd.
The Mizuho Trustand Banking Co.,
Limited (Note 3)
Development
Bank of Japan Inc.
(Note 3)
Mizuho Bank, Ltd.
(Note 3)
THE BANK OFFUKUOKA, LTD.
(Note 3)
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking
Corporation
The Bank ofTokyo-Mitsubishi
UFJ, Ltd.
Mizuho Bank, Ltd.
The Mizuho Trustand Banking Co.,
Limited (Note 3)
Sumitomo Mitsui
Banking
Corporation
Resona Bank,
LimitedSumitomo Mitsui
Trust Bank,
Limited
Sub total
Total(Note 1)All debts except for the following Note 3 are borrowing at a floating rate.

(Note 2)Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also,with regard to borrowings for which interest rate swap transactions and other derivative transactions were implemented in orderto hedge the interest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate
swaps and other derivatives are indicated.

(Note 3)

Borrowings is applied at a fixed rate.

(Note 4)All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses
are included) and repayment of debts.

(Note 5)

Debts included in the classification of current portion of long-term loans payable from the 12th fiscal period and in of long-termloans payable in the 11th fiscal period.

(3)Investment corporation bonds
Outstanding Investment corporation bonds as of January 31, 2018 are as follows.
SeriesDate of
issue

Balance at
Decrease
RepaymentheBalance at theduring theInterest rate
beginning
end of periodt dateperiodof period(in thousands of yen)First series of unsecured
August 30,
1,000,000
investment corporation bonds
2016
Second series of unsecured
August 30,
1,000,000
investment corporation bonds
2016
Third series of unsecured
August 30,
1,000,000
investment corporation bonds
2016
Total
3,000,000-

1,000,000-

1,000,000-

1,000,000-

3,000,000

Use

August 30,
2021
August 28,
0.540%(Note 1)2026
August 30,
0.800%
2028

Remarks

0.200%(Note 2)

(Note 1)

Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate
and repayment of debts.

(Note 2)

Ranking pari passu among the specified investment corporation bonds.

(4)

Short-term corporation bonds
Not applicable(5)

Investment Unit warrants
Not applicable6. Buying and Selling during the Period(1)Acquisitions and dispositions of real estate properties and asset-backed securities, etc.,
infrastructure assets and infrastructure-related assets
Acquisition
Type

No.

Name

Disposition

Acquisition
Disposition
Acquisition
Disposition
Book value
price
price
(Million yen)
date
date
(Million yen)
(Million yen)

(Note)(Million yen)

Trust
BeneficiaryInterest

T-78

KDX Residence
ToyosuAugust 22,
2017

7,500

－

－

－

－

Trust
BeneficiaryInterest

R-43

KDX Residence
NishijinAugust 1,
2017

1,600

－

－

－

－

SubordinatedSilentPartnership
EquityInterests

Equity interests in
TK property fund August 30,－
with G.K. Tropic
2017
Two as operator

130

－

－

－

－

(Note)(2)

Gain andloss

The acquisition price is the amount identified in the purchase agreement of each trust beneficiary interest (excluding
expenses required for the acquisition and taxes, etc.) and the investment price set forth in a silent partnership equity
interest agreement, etc. (excluding expenses required for the investment), rounded down to the nearest whole million yen.

Acquisitions and dispositions of other assets
Other than the foregoing real estate properties, asset-backed securities, infrastructure assets
and other infrastructure-related assets, major assets in general are bank deposits or bank deposits
within trust assets.

(3)

Investigation of specified assets prices, etc.
① Real estate properties, etc.

Transaction

Type

No.

Name

Acquisitiondate

Acquisition
price(Millionyen)(Note 1)

Appraisal
value(Millionyen)(Note 2)

Appraiser

Appraisal
date

KDX
August 22,
May 1,
The
Residence
7,500
7,620
2017
2017
Tanizawa
ToyosuAcquisition
Sogo
KDX
Appraisal
August 1,
June 1,TBI
R-43
Residence
1,600
1,670
Co., Ltd.
2017
2017
Nishijin(Note 1)“Acquisition price” represents the purchase amount (excluding acquisition costs and consumption
taxes) of each property or beneficiary right of real estate in trust as stated in the Sales and Purchase
Agreement.
(Note 2)
“Appraisal value” of specific assets above was calculated in accordance with the guideline of “RealEstate Appraisal Standards, Chapter 3, Appraisal of Securitized Real Estate.”
TBI

T-78

② Investment security and others
Transaction

Name

Acquisition Date

Acquisition price Assessed price of(Million yen)specific asset(Note)

Subordinated Silent Partnership equity
Acquisition interests in TK property fund with G.K. August 30, 2017
Tropic Two as operator(Note)(Million yen)

130

125

The acquisition price is the investment price set forth in a silent partnership equity interest agreement,
etc. (excluding expenses required for the investment), rounded down to the nearest whole million yen.

(A) Investigator

Ernst & Young ShinNihon LLC(B) Investigation results and method: overview

With respect to transactions conducted at the Investment Corporation for which a priceinvestigation was deemed necessary under the Act on Investment Trust and Investment
Corporations, the investigation was assigned to Ernst & Young ShinNihon LLC. One
transaction (acquisition of a silent partnership equity interest) fell under the period subject
to investigation (August 1, 2017 to January 31, 2018), and the Investment Corporation
received a signed report on said transaction from Ernst & Young ShinNihon. For thistransaction to acquire a silent partnership equity interest and 12 interest swap transactions,the Investment Corporation entrusted an investigation on matters concerning businessproperty pertaining to the silent partnership agreement, particulars of the silent partnershipagreement, the transaction price and particulars of the transaction to acquire said silent
partnership equity interest and of the interest swap contracts, such as the name of counterparties, contract amounts, or the period of transactions.
The investigation was not part of the audit of financial statements and does notguarantee the appropriateness of the price or the internal control structure.
(4)

Transactions with stakeholders① Transactions
Not applicable②

Fees paid, etc.
Category

Total paid fees
(A)

Transaction with stakeholders
Paid toPaid amount(B)

Ratio tototal(B)/(A)

Property managementcompensation

204 million yen Space Design, Inc.

0 million yen

0.3%

Building management fees

158 million yen Space Design, Inc.

2 million yen

1.5%

Repair and maintenance costs

228 million yen Space Design, Inc.

0 million yen

0.0%(Note 1) Stakeholders, etc. mean stakeholders, etc. of the asset management company having executed an asset management entrustment
agreement with the Investment Corporation provided in Article 123 of the Order for Enforcement of the Act on Investment Trusts
and Investment Corporations and Article 26, Item 27 of Rules on asset management reports, pertaining to investment trusts andinvestment corporations of the Investment Trusts Association, Japan.
(Note 2) Excluding fees paid, etc. as above, payment for stakeholders, etc. by repairments, etc. in the 12th fiscal period is as follows.

Kenedix Enhineering, inc. 39 million yen(5)Transactions with asset management company, which pertain to other operations of said asset
management company
The Asset Management Company (Kenedix Real Estate Fund Management, Inc.) is also
engaged in the type II financial instruments business and the real estate transaction business;
however, there are no transactions that fall under the category above. It is not engaged in either
the type I financial instruments business or a specified joint real estate venture, and there are notransactions that fall under the category above.

7. Accounting(1)

Assets, liabilities, principal and profit/loss
Please see the Balance Sheet, the Statement of Income and Retained Earnings, theStatement of Unitholders’ Equity, Notes and the Calculation pertaining to Distributions below.

(2)

Change to calculation of depreciation amountNot applicable(3)

Change to real estate and other infrastructure assets appraisal method
Not applicable(4)Disclosure pertaining to investment trust beneficial right securities, etc.
① Acquisitions
Not applicable② Ownership
Not applicable(5)Disclosure pertaining to overseas real estate holding corporations
Not applicable(6)

Disclosure pertaining to real estate held by overseas real estate holding corporations
Not applicable8. Other(1)

Notice①Unitholders general meeting
The Investment Corporation held the 5th Unitholders General Meeting on January 25, 2018.
An overview of the matters approved at the Unitholders General Meeting is as follows.
Resolution

Overview(1) It was decided that in implementing the absorption-type merger having
Agenda No. 1:
Partial Changes to Articles of March 1, 2018 as the effective date and KDR as the surviving corporation andIncorporation
Japan Senior Living Investment Corporation (“JSL”) as the dissolving
corporation (“Merger”), the trade name of KDR would be changed as of theeffective date of the Merger; accordingly, the trade name will be changed (thename of the new investment corporation will be Kenedix Residential Next
Investment Corporation) (amendment to Article 1 of the current Articles ofIncorporation).
(2) Because the head office of Kenedix Real Estate Fund Management, Inc.,
which is the asset management company of KDR, was relocated to Chiyoda-ku,
Tokyo, the location of the head office of KDR will change from Chuo-ku, Tokyo
to Chiyoda-ku, Tokyo (amendment to Article 3 of the current Articles ofIncorporation).
(3) In conjunction with the Merger, KDR plans to carry out a 2-for-1 split of
KDR investment units for the purpose of delivering at least one KDR
investment unit to each JSL unitholder. Because the total number of outstanding
investment units will increase due to such investment unit split, the number ofauthorized investment units will be increased beforehand (total number ofauthorized investment units of the new investment corporation will increase
from 5,000,000 units to 10,000,000 units) (amendment to Article 5, Paragraph 1of the current Articles of Incorporation).
(4) As the roles and responsibilities of the financial auditor continue to increase,audit work will expand in conjunction with the increase in scale of KDR’s asset
portfolio; accordingly, the maximum compensation for the financial auditor will
be changed so that the compensation for the financial auditor can be set at areasonable level; in addition, in order to maintain flexibility in timing for
payment of remuneration, the time for payment of compensation will change tothe end of the month following the month of receipt of the auditor’s report(maximum amount of the compensation for the financial auditor will increase
from 12 million yen to 15 million yen) (amendment to Article 28 of the current
Articles of Incorporation).
(5) In conjunction with the Merger, the principal use of properties in which
KDR will primarily invest will be changed to include, in addition to residential
facilities, healthcare facilities (including hospitals and other medical facilities)
and accommodation facilities; further, because many of those properties for suchuses to be newly added are located in major provincial cities, the definition of aregional economic region, which is one of the primary investment areas of
KDR, will be amended and provisions will be amended so that major local cities
can be included (amendment to Article 30, Paragraph 1 and 2 of the current
Articles of Incorporation).
(6) With respect to the distribution policy, provisions will be amended so thatthe definition of profit from among the total amount of monies to be distributed
to unitholders is made consistent with the provisions of the Act concerning
Investment Trusts and Investment Corporations (amendment to Article 38 of thecurrent Articles of Incorporation).
(7) Because, in conjunction with the Merger, Kenedix Real Estate FundManagement, Inc. as the asset management company carried out investigationand valuation of assets etc. owned by JSL, negotiations with related parties andother services in order to realize the Merger, new provisions relating to merger
fees will be added to enable payment of proper consideration for such services
rendered by the asset management company (establishment of a new rule that if
KDR implements a consolidation-type or absorption-type merger with anotherinvestment corporation, the Asset Management Company will be paid merger
compensation in an amount equal to the appraisal value on the merger effective
date of the real estate-related assets held by the other investment corporation,

multiplied by a rate up to a maximum of 1.0% as separately agreed upon
between KDR and the Asset Management Company).
(8) In order to make the amendments to the Articles of Incorporation set forth
above in (1), (3) and (5) effective when the Merger comes into force, a provision
to such effect will be set forth in the supplementary provisions (related to
Chapter 11 of the proposed amendment).
Agenda No. 2:
Election of Two (2)Executive Directors

As proposed in the resolution, Keisuke Sato and Katsue Okuda were appointed
Executive Director. Their term is 2 years commencing on March 1, 2018.

As proposed in the resolution, Shin Yamamoto was appointed Alternate
Agenda No. 3:
Election of One (1) Alternate Executive Director. The resolution pertaining to the appointment of one
Executive Director
Alternate Executive Director is effective until March 1, 2020, the date on which
the term for the Alternate Executive Director expires, as provided in Resolution
2.
Agenda No. 4:
Election of Three (3)Supervisory Directors

As proposed in the resolution, Osamu Chiba, Satoshi Ogawa and Soichiro Iwao
were appointed Supervisory Directors. Their term is 2 years from March 1,
2018.

② Board of directors
overviews of major agreement executions and amendments approved by the Investment
Corporation’s board of directors during the 12th fiscal period are as follows.
Approval date

Item

Overview

November 10, 2017 Execution of the
Merger agreement

The Investment Corporation and JSL entered into an absorptiontype merger agreement, whereby it will be the surviving
corporation and JSL the dissolving corporation , effective March
1, 2018 on November 10, 2017.

December 22, 2017 Execution ofamendment MOU
pertaining to asset
management
entrustment agreementby partial changes to
Articles ofIncorporation

The Investment Corporation and the asset management company
executed the amendment MOU on January 25, 2018 to add
healthcare facilities (including medical facilities such as
hospitals) and accommodations to residential facilities as of mainuse the Investment Corporation mainly invests in and change thedefinition of regional area.

December 22, 2017 Execution of
The Investment Corporation agreed the method of calculating fee
memorandum of fee
regarding asset custody and asset administration.
regarding asset custody
and asset
administration

(2)

Other
Unless otherwise specified, amounts are rounded down and ratios are rounded off.

[Provisional Translation Only]
English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

Financial Statements(12th Fiscal Period: From August 1, 2017 to January 31, 2018)(11th Fiscal Period: From February 1, 2017 to July 31, 2017)
Independent Auditor’s Report
Balance Sheets
Statements of Income and Retained Earnings
Statements of Changes in Net Assets
Statements of Cash Flows
Notes to Financial Statements

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Balance Sheets
As of January 31, 2018 and July 31, 201712th Fiscal Period
as of January 31, 2018

11th Fiscal Period
as of July 31, 2017

(in thousands of yen)
ASSETS
Current assets
Cash and deposits (Notes 6 and 8)
Cash and deposits in trust (Notes 6 and 8)
Operating accounts receivable
Prepaid expenses
Deferred tax assets (Note 10)
Consumption taxes receivable
Other
Total current assets
Noncurrent assets
Property, plant and equipment (Notes 12 and 17)
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment, net
Investments and other assets
Investment securities (Note 16)
Lease and guarantee deposits
Long-term prepaid expenses
Other (Notes 8 and 9)
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets－2－¥6,551,666
3,928,017
24,913
3,557
9,464
1,893
10,519,513¥6,405,982
3,778,959
24,8214,831
9503
10,215,108

1,798,041
68,843,600(6,927,784)
61,915,815
502,925(114,924)
388,001
1,317,786(226,840)
1,090,946
338,646(29,220)
309,425
99,538,715
165,040,946

1,798,041
65,654,206(6,058,335)
59,595,871
444,009(100,446)
343,563
1,259,827(197,886)
1,061,940
263,829(20,241)
243,587
93,118,700
156,161,704

221,707
10,397915,782
80,7431,228,631
166,269,577

91,57910,397764,254
26,626
892,858
157,054,563

24,461

26,340421

20,03924,883

46,380¥176,813,974¥167,316,051

12th Fiscal Period
as of January 31, 2018

11th Fiscal Period
as of July 31, 2017

(in thousands of yen)
LIABILITIESCurrent liabilities
Operating accounts payable¥473,021¥431,854

Short-term loans payable (Notes 8, 9 and 19)

2,630,000

1,000,000

Current portion of long-term loans payable (Notes 8, 9 and 19)
Accounts payable-otherAccrued expenses
Income taxes payable

11,000,000
239,241
26,142604

11,000,000
203,876
24,212799

Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Noncurrent liabilities

-

6,135

779,137
53,143
15,201,290

766,964
50,111
13,483,955

Investment corporation bonds (Notes 8 and 18)

3,000,000

3,000,000

Long-term loans payable (Notes 8, 9 and 19)
Tenant leasehold and security deposits in trust
Total noncurrent liabilities

74,500,000
1,462,549
78,962,549

66,800,000
1,473,087
71,273,087

94,163,839

84,757,042

80,132,379

80,132,379

2,437,011

2,400,002

2,437,011
82,569,390

2,400,002
82,532,381

80,743

26,626

Total liabilities
NET ASSETS
Unitholders' equity
Unitholders' capital
Surplus
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Notes 8 and 9)80,743

26,626

Total net assets (Note 3)

Total valuation and translation adjustments

82,650,134

82,559,008

Total liabilities and net assets¥176,813,974¥167,316,051

See accompanying notes to the financial statements.

－3－

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatements of Income and Retained Earnings
For the period from August 1, 2017 to January 31, 2018 and the period from February 1, 2017 to July 31, 201712th Fiscal Period
from August 1, 2017
to January 31, 2018

11th Fiscal Period
from February 1, 2017
to July 31, 2017
(in thousands of yen)

Operating revenues
Rent revenue-real estate (Note 4)
Other lease business revenue (Note 4)
Dividends income
Total operating revenues
Operating expenses
Expenses related to rent business (Note 4)
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Merger expenses
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Dividends and redemption-prescription
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing expenses
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes (Note 10)
Current
Deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings¥5,235,620
435,685
10,132
5,681,438¥5,102,400
472,418
5,574,819

2,107,064
377,361
11,36539,0234,500
67,446
184,719
2,791,481
2,889,956

2,124,246
371,229
11,36338,143
4,500
192,1212,741,604
2,833,215

12
350
363

12
824
836

410,074
7,806
97,811
1,878
19,618537,188
2,353,130
2,353,130

385,660
7,629
96,801
1,878
25,790517,760
2,316,291
2,316,291

604
9
614
2,352,516
84,495¥2,437,011

801
51
853
2,315,438
84,564¥2,400,002

See accompanying notes to the financial statements.

－4－

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatements of Changes in Net Assets
For the period from August 1, 2017 to January 31, 2018 and the period from February 1, 2017 to July 31, 2017
Valuation andtranslation
adjustments

Unitholders' equity
Surplus

Unitholders'
capitalUnappropriatedretainedearnings

Total
unitholders'equityTotal
surplusDeferred gains
or losses onhedgesTotal net assets(in thousands of yen)
Balance as of January 31, 2017¥80,132,379 \

2,365,163 \2,365,163 \

82,497,542 \

54,619 \ 82,552,161

Changes of items during the period
Dividends from surplus-(2,280,598)(2,280,598)(2,280,598)-(2,280,598)

Net income
Net changes of items other thanunitholders' equity-

2,315,438

2,315,438

2,315,438-

2,315,438

-

-

-

-

(27,992)(27,992)-

34,83934,83934,839(27,992)

6,847

2,400,002 \2,400,002 \

82,532,381 \Total changes of items during the period
Balance as of July 31, 2017

(Note 5)\80,132,379 \

26,626 \ 82,559,008

Changes of items during the period
Dividends from surplus-(2,315,507)(2,315,507)(2,315,507)-(2,315,507)

Net income
Net changes of items other thanunitholders' equity-

2,352,516

2,352,516

2,352,516-

2,352,516

-

-

-

-

54,116

54,116-37,00837,00837,00854,116

91,1252,437,011 \2,437,011 \

82,569,390 \Total changes of items during the period
Balance as of January 31, 2018

(Note 5)\80,132,379 \See accompanying notes to the financial statements.

－5－80,743 \ 82,650,134

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatements of Cash Flows
For the period from August 1, 2017 to January 31, 2018 and the period from February 1, 2017 to July 31, 201712th Fiscal Period
from August 1, 2017
to January 31, 2018

11th Fiscal Period
from February 1, 2017
to July 31, 2017

(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of investment securities
Proceeds from investment securities
Proceeds from collection of lease and guarantee deposits
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period (Note 6)¥2,353,130
921,858
1,878
19,618(12)
417,880(92)(9,464)
1,274
68,56937,833(6,135)
12,172(151,528)
3,018
3,670,003
12(415,950)(2,693)3,251,371¥2,316,291
884,713
1,878
25,790(12)
393,289(31)(1,475)(55,535)
11,489(13,392)
12,985
99,837(13,325)
3,662,503
12(393,545)(1,696)
3,267,273(9,828,503)(133,725)
3,240(142,165)
131,628(9,969,526)(155,506)(90,000)
164(147,418)
153,736(239,024)

1,630,000
18,700,000(11,000,000)(2,317,102)
7,012,897
294,741
10,184,942¥10,479,684

1,000,000(1,000,000)(2,282,658)(2,282,658)
745,5909,439,351¥10,184,942

See accompanying notes to the financial statements.

－6－

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Notes to Financial Statements
For the period from August 1, 2017 to January 31, 2018 and the period from February 1, 2017 to July 31, 2017

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Residential Next Investment Corporation (Note) (“the Investment Corporation”) was established on November 15, 2011 under the Act
on Investment Trusts and Investment Corporations of Japan (“the Investment Trust Act”). On April 26, 2012, the Investment Corporation was listedon the Real Estate Investment Trust Market of the Tokyo Stock Exchange (Securities Code: 3278).The Investment Corporation additionally issued
67,900 investment units on February 4, 2015 through most recent public offerings, and 2,067 investment units on March 4, 2015 by way of athird-party allotment. As the result, as of January 31, 2018, the end of the 12th fiscal period, the number of investment units issued andoutstanding totaled 349,089 units.
(Note) On March 1, 2018 as the effective date, the Investment Corporation conducted an absorption-type merger (“the Merger”) whereby theInvestment Corporation was the surviving corporation and Japan Senior Living Investment Corporation (“JSL”) was the dissolving corporation. The
Investment Corporation also changed its corporate name from Kenedix Residential Investment Corporation to Kenedix Residential Next
Investment Corporation on March 1, 2018.
The Investment Corporation is externally managed by Kenedix Real Estate Fund Management, Inc. (“the Asset Management Company”), a
company that was formed with personnel from Kenedix, Inc. and adheres to the core philosophies of Kenedix, Inc., that is, to provide management
services from the perspective of real estate investors as an independent real estate management company. As the asset manager, the AssetManagement Company shall provide investment and management services based on the three core strategies of the Investment Corporation:“Consistent External Growth by Making Use of Good Judgment,” “Efficient Profit Management” and “Challenge to New Business Opportunities.”
During the 11th fiscal period, the Investment Corporation acquired and sold no properties. During the 12th fiscal period, the Investment
Corporation acquired 2 properties (total acquisition price of ¥9,100 million). As the result, the Investment Corporation has a portfolio comprised of
115 properties (total acquisition price of ¥164,169 million) as of January 31, 2018, the end of the 12th fiscal period.
The occupancy rates of the overall portfolio excluding land with leasehold interest were 96.8% and 97.0% as of the end of the 11th and 12th
fiscal period, respectively. Furthermore, the occupancy rates of the overall portfolio including land with leasehold interest were 96.9% and 97.0%
as of the end of the 11th and 12th fiscal period.
During the 11th and 12th fiscal period, the Investment Corporation made borrowings of ¥1,000 million and ¥11,000 million for the repayment ofdebt matured. During the 12th fiscal period, the Investment Corporation made new borrowings of ¥9,330 million upon acquiring properties. As aresult, balance of borrowings as of the end of the 11th and 12th fiscal period stood at ¥78,800 million and ¥88,130 million, respectively.
Basis of Presentation
The Investment Corporation maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (Japanese GAAP), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, theFinancial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Investment Corporation, which wereprepared in accordance with Japanese GAAP and were presented in the Securities Report of the Investment Corporation filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial
statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition, the notes tofinancial statements include certain information that might not be required under Japanese GAAP but is presented herein as additional information.
The Investment Corporation fiscal period is a six-month period which ends at the end of January or July. The Investment Corporation does notprepare consolidated financial statements because it has no subsidiaries.

－7－2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) Securities
Other securities without market value are stated using the moving average cost method. Equity investments in an anonymous association
are stated, the amount equivalent to the corresponding equity interests including net amount of gain or loss from the anonymous association.
(B) Property and Equipment (including trust assets)
Property and equipment are stated at cost. Depreciation of property and equipment is calculated on a straight-line basis over the estimateduseful lives of the assets ranging as stated below:

Buildings

From August 1, 2017
to January 31, 2018
2-67 years

From February 1, 2017
to July 31, 2017
2-67 years

Structures

3-52 years

3-48 years

Machinery and equipment

8-34 years

8-30 years

Tools, furniture and fixtures

6-30 years

6-30 years(C) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(D) Unit Issuance Costs
Unit issuance costs are amortized over a period of 3 years under the straight-line method.
(E) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(F) 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 relevant
assets and liabilities in trust are recorded on the balance sheet and the statement of income and retained earnings.
(G) Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues including
parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrual basis over the lifeof each lease.
(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 said period.
Under Japanese tax regulations, the seller of the property is liable for these taxes on the property from the date of disposal to the end of thecalendar year in which the property is disposed. The seller, however, is generally 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 theproperty-related taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to¥6,024 thousand as of January 31, 2018. There were no capitalized property-related taxes as of July 31, 2017.

－8－

(I)

Income Taxes
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.

(J) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes
applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(K) Derivative Financial Instruments
The Investment Corporation enters into derivative transactions to hedge risks prescribed in its Articles of Incorporation based on its risk
management policies. The Investment Corporation hedges interest rate volatility risk of its interest payments on its borrowings by utilizing andinterest rate swap and other derivative transactions as hedging instruments.
As for the method of assessment of the effectiveness of the hedge in the period from the inception of the hedge to the time of judgment of its
effectiveness, the cumulative changes in cash flow of the hedged items and hedging instruments are compared and a judgment is madebased on changed amount, etc. However, an assessment of the effectiveness of hedging activities is omitted in the case of interest rate
swaps and other derivatives that meet the requirements for special treatment.
(L) Cash and Cash Equivalents
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.
(M) Presentation of Amounts
Amounts of less than one thousand yen are truncated in the Japanese financial statements prepared in accordance with Japanese GAAP
and filed with regulatory authorities in Japan. Unless otherwise noted, amounts are rounded down and ratios are rounded off in theaccompanying financial statements. Totals shown in the accompanying financial statements do not necessarily agree with the sums of theindividual amounts.

－9－3. 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.

4. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY
Rental and other operating revenues and property-related expenses for the periods from August 1, 2017 to January 31, 2018 and from February 1,
2017 to July 31, 2017 consist of the following:
From August 1, 2017
to January 31, 2018

From February 1, 2017
to July 31, 2017

(in thousands of yen)
Rental and other operating revenues:
Rental revenues¥4,895,387¥4,769,190

Rental revenues from limited proprietary rights of land

43,74943,750Common area charges

296,482

289,460

5,235,620

5,102,400

Parking space rental revenues

181,133

173,218

Miscellaneous

254,551

299,200

Subtotal

435,685

472,418¥5,671,305¥5,574,819

Subtotal
Others:Total rental and other operating revenues
Property-related expenses:
Property management fees and facility management fees

¥362,432¥386,322

Utilities

88,66985,370Taxes

323,667

324,067

Repairs and maintenance

228,410

234,429

Insurance

8,399

7,984

Trust fees

42,467

41,900Depreciation

921,858884,713

Others131,157

159,458¥2,107,064¥2,124,246

Total property-related expenses
Gain on sales of real estate property:
From August 1, 2017 to January 31, 2018
Not applicable
From February 1, 2017 to July 31, 2017
Not applicable

5. UNITHOLDERS’ EQUITY
Total number of authorized investment units and total number of investment units issued and outstanding are as follows:

Total number of authorized investment units
Total number of investment units issued and outstanding－10－

From August 1, 2017
to January 31, 2018
5,000,000

From February 1, 2017
to July 31, 2017
5,000,000

349,089

349,089

6. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of January 31, 2018 and July 31, 2017:
As of January 31, 2018

As of July 31, 2017

(in thousands of yen)
Cash and deposits¥6,551,666¥6,405,982

Cash and deposits in trust

3,928,017

3,778,959

Cash and cash equivalents¥10,479,684¥10,184,942

7. LEASES
The Investment Corporation, as lessor, has entered into leases whereby fixed monthly rents are due in advance with a lease term of generally
two years for residential properties. The future minimum rental revenues under existing non-cancelable operating leases as of January 31, 2018
and July 31, 2017 are as follows:
As of January 31, 2018

As of July 31, 2017

(in thousands of yen)Due in 1 year

¥251,883¥328,364

Due after 1 year

4,092,472

4,266,213

Total¥4,344,355¥4,594,578－11－

8. FINANCIAL INSTRUMENTS(A). Overview(1) Policy for financial instruments
The Investment Corporation procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans fromfinancial institutions, issuance of investment corporation bonds, issuance of investment units and other means. With regard to the procurement ofinterest-bearing debts, the Investment Corporation ensures that it can effectively combine stable long-term funds with flexible short-term funds.
Management of surplus funds is undertaken through various bank deposits focusing on safety, liquidity and effectiveness. The Investment
Corporation uses derivatives for the purpose of hedging its exposure to changes in interest rates and other risks and does not enter into derivativetransactions for speculative or trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing the Investment Corporation’s surplus funds and are exposed to credit risk such as the bankruptcy of financial
institutions at which funds are deposited. Investment securities represent equity investments in an anonymous association and are exposed tocredit risk of the issuer, risk of fluctuation of value of its property and interest rate fluctuation risk.
Borrowings and investment corporation bonds are made primarily for the purpose of procuring funds for the acquisition of real estate and trust
beneficiary interests in real estate and have a repayment date of a maximum of 10 years and 7 month as of January 31, 2018, the end of the 12th
fiscal period, are exposed to liquidity risk where alternative funds may not be procured by the repayment date. Also, borrowings with floatinginterest rates are exposed to interest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk for a certain
portion of the borrowings.
(3) Risk management for financial instruments
a. Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored
by deposits in non-interest bearing ordinary savings accounts or with financial institutions with credit ratings above a certain level. Investment
securities represent equity investments in an anonymous association and are exposed to credit risk of the issuer and interest rate fluctuation risk.
To manage this credit risk, the Investment Corporation regularly evaluates the results of operations and the financial condition of the issuer, etc. In
utilizing derivatives, the Investment Corporation aims to mitigate counterparty risk such as by transacting with financial institutions with favorable
ratings.
b.

Market risk

While borrowings with floating rates are exposed to interest rate volatility risk, such risk is monitored by adjusting the rate of the balance ofborrowings with floating rates against the total borrowings according to the financial environment, interest rate forecasts by continuous monitoring,etc. and by using derivatives, etc. While investment securities, which are equity investments in an anonymous association, are exposed to credit
risk of the issuer and property value fluctuation risk, the Investment Corporation periodically reviews the value of the property and financial
condition of the issuer with regard to these investment securities. A risk management policy is established with regard to the execution andmanagement of derivatives, and such transactions are entered into based on this policy.
c.

Liquidity risk

Though borrowings are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates and by
diversifying financial institutions. 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.

－12－

(B). Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet and estimated fair value are shown in the following table.
As of January 31, 2018
Carrying amount

Estimated fair value

Difference(in thousands of yen)

(1) Cash and deposits¥6,551,666¥6,551,666(2) Cash and deposits in trust

3,928,017

3,928,017-

Subtotal¥-

10,479,684

10,479,684-(1) Short-term loans payable

2,630,000

2,630,000-(2) Current portion of long-term loans payable

11,000,000

10,999,491(508)(3) Investment corporation bonds

3,000,000

2,970,800(29,200)(4) Long-term loans payable

74,500,000

74,587,162

87,162

91,130,000

91,187,454

57,454¥80,743¥80,743

Subtotal
Derivative transactions¥-

As of July 31, 2017
Carrying amount

Estimated fair value

Difference(in thousands of yen)

(1) Cash and deposits(2) Cash and deposits in trust
Subtotal¥6,405,982
3,778,959¥6,405,982
3,778,959

10,184,942

10,184,942¥-(1) Short-term loans payable

1,000,000

1,000,000-(2) Current portion of long-term loans payable

11,000,000

10,956,857(43,142)(3) Investment corporation bonds

3,000,000
66,800,000

2,967,700
66,913,944(32,300)
113,944

81,800,000

81,838,502

38,502¥26,626¥26,626(4) Long-term loans payable
Subtotal
Derivative transactions¥-

Note 1: Methods to determine the estimated fair value of financial instruments and matters related to derivative transactions
Assets(1) Cash and deposits and (2) Cash and deposits in trust
Since these items are settled in a short period of time, their carrying amount approximates fair value.
Liabilities(1)Short-term loans payable
Since these items are settled in a short period of time with floating interest rates, their carrying amount approximates fair value.
(2)Current portion of long-term loans payable and (4) Long-term loans payable
Among these items, the fair value of loans payable with fixed interest rates is calculated based on the present value, which is the total amount ofprincipal and interest discounted by the estimated interest rate to be applied in the event that the Investment Corporation conducts new borrowingsof the same type. As for the fair value of loans payable with floating interest rates, it is based on the carrying amount since market interest rates
are reflected in the short term and the fair value is believed to approximate the carrying amount as the credit standing of the Investment
Corporation has not changed significantly since the loans were made. (However, the fair value of long-term loans payable subject to the special
treatment for interest-rate swaps is based on the present value of the total of principal and interest, accounted for together with the applicableinterest-rate swaps, discounted by the estimated interest rate to be applied in the event that the Investment Corporation conducts new borrowingsof the same type.)(3) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices.

－13－

Derivative transactions
Please refer to Note 9 “DERIVATIVE TRANSACTIONS”.
Note 2: Financial instruments whose fair values are extremely difficult to recognize(in thousands of yen)Classification

As of January 31, 2018

Investment securities *As of July 31, 2017221,707

91,579*Fair values of investment securities are not subject to disclosure of fair value as they have no market value and their fair values are extremely
difficult to recognize.

Note 3: Redemption schedule for financial assets with maturities
As of January 31, 2018
Due in 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

Due after 5 years¥¥(in thousands of yen)

Cash anddeposits
Cash anddeposits in trust
Total¥6,551,666¥

3,928,017

-

¥

-

-

¥10,479,684

¥

¥

-

-

¥

-

-

¥

-

-

¥

-

-

¥

-

As of July 31, 2017
Due in 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

Due after 5 years¥¥(in thousands of yen)

Cash anddeposits
Cash anddeposits in trust
Total¥6,405,982¥

3,778,959

-

¥

-

-

¥10,184,942

¥

¥

-

-

¥

-

-

¥

-

-

¥

-

-

¥

-

Note 4: Redemption schedule for loans payable and investment corporation bonds
As of January 31, 2018
Due in 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

Due after 5 years(in thousands of yen)

Short-term loans
payableInvestment
corporation bonds
Long-term loans
payableTotal¥

2,630,000

¥

-

¥

-

¥

-

¥

-

¥

-

-

-

-

1,000,000-

2,000,000

11,000,000

3,000,000

3,600,000

10,000,000

10,250,000

47,650,000¥ 13,630,000¥

3,000,000

Due in 1 year or
less

Due after 1 year
through 2 years¥

3,600,000¥

11,000,000¥

10,250,000¥

49,650,000

As of July 31, 2017
Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years(in thousands of yen)

Short-term loans
payableInvestment
corporation bonds
Long-term loans
payableTotal¥

1,000,000

¥

-

¥

-

¥

-

¥

-

¥

-

-

-

-

-

1,000,000

2,000,000

11,000,000

11,000,000

1,500,000

5,950,000

15,150,000

33,200,000¥ 12,000,000¥ 11,000,000¥

1,500,000－14－¥

5,950,000¥

16,150,000¥

35,200,000

9. DERIVATIVE TRANSACTIONS
The contract amount and the fair value of interest-rate swap transactions as of January 31, 2018 are shown in the following table.
(1)

Transactions not subject to hedge accounting
Not applicable(2)

Transactions subject to hedge accounting

Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
Total
year

Fair value(in thousands of yen)Calculation method for
applicable fair value

Interest rate swap
Based on the amounttransaction:
Long-term¥22,500,000¥22,500,000¥80,743 provided by counterparty
Receive/floatingloans payablefinancial institutions
and pay/fixedSpecialInterest rate swap
treatment for transaction:
Long-term
46,300,000
38,300,000*
interest-rate
Receive/floatingloans payableswaps
and pay/fixed
Total¥68,800,000¥60,800,000¥80,743*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair
Accounting
method, inprinciple

value is included in the fair value of the hedged long-term loans payable.
The contract amount and the fair value of interest-rate swap transactions as of July 31, 2017 are shown in the following table.
(1)

Transactions not subject to hedge accounting
Not applicable(2)

Transactions subject to hedge accounting

Hedge
accounting
methodType of derivativetransactions

Hedged items

Contract amount(in thousands of yen)
Maturing after 1
Total
year

Fair value(in thousands of yen)Calculation method for
applicable fair value

Interest rate swap
Based on the amounttransaction:
Long-term¥9,000,000¥9,000,000¥26,626 provided by counterparty
Receive/floatingloans payablefinancial institutions
and pay/fixedSpecialInterest rate swap
treatment for transaction:
Long-term¥57,300,000¥46,300,000*
interest-rate
Receive/floatingloans payableswaps
and pay/fixed
Total¥66,300,000¥55,300,000¥26,626*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair
Accounting
method, inprinciple

value is included in the fair value of the hedged long-term loans payable.

－15－10. INCOME 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 under the Special Taxation
Measures Law of Japan are met, including a requirement that it currently distributes 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 theInvestment Corporation will be subject to regular corporate income taxes. Since the Investment Corporation distributed in excess of 90% of its
distributable income in the form of cash distributions totaling ¥2,424 million and ¥2,315 million for the periods ended January 31, 2018 and July 31,
2017, respectively, the distributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on theInvestment Corporation’s income were 0.03% and 0.04% for the periods ended January 31, 2018 and July 31, 2017, respectively. The following
table summarizes the significant differences between the statutory tax rate and the effective tax rate:

Statutory tax rate
Deductible cash distributions

From August 1, 2017
to January 31, 201831.74%

From February 1, 2017
to July 31, 201731.74%(31.74)(31.73)

Others0.03

0.03

Effective tax rate

0.03%

0.04%

The significant components of deferred tax assets and liabilities as of January 31, 2018 and July 31, 2017 are as follows:
As of January 31, 2018

As of July 31, 2017

(in thousands of yen)

Deferred tax assets:
Enterprise tax payable-

Subtotal deferred tax assets-

Total deferred tax assets-

11. RELATED-PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other12th Fiscal Period (August 1, 2017 to January 31, 2018) and 11th Fiscal Period (February 1, 2017 to July 31, 2017): Not applicable
2．Affiliated companies and other12th Fiscal Period (August 1, 2017 to January 31, 2018) and 11th Fiscal Period (February 1, 2017 to July 31, 2017): Not applicable
3．Fellow subsidiary companies and other12th Fiscal Period (August 1, 2017 to January 31, 2018) and 11th Fiscal Period (February 1, 2017 to July 31, 2017): Not applicable
4．Directors, major individual unitholders and other12th Fiscal Period (August 1, 2017 to January 31, 2018) and 11th Fiscal Period (February 1, 2017 to July 31, 2017): Not applicable

－16－

¥

9

¥

9

9

12. INVESTMENT AND RENTAL PROPERTIESThe Investment Corporation owns real estate for rental purposes in the Tokyo Metropolitan Area and other regional areas for the purpose ofgenerating rental revenues.
The book value and fair value concerning the above real estate for rental purposes are as follows.
12th Fiscal Period
from August 1, 2017
to January 31, 2018

11th Fiscal Period
from February 1, 2017
to July 31, 2017

(in thousands of yen)Book value
Balance at the beginning of period
Changes during the period
Balance at the end of period
Fair value at the end of period¥156,161,704
8,879,241¥156,805,298(643,593)

165,040,946¥192,137,000

156,161,704¥182,410,000

Note 1: Book value excludes accumulated depreciation from acquisition costs.
Note 2: Among changes in the amount of real estate for rental purposes that occurred during the 12th fiscal period, the principal increases were
the acquisition of trust beneficiary interests in real estate in 2 properties totaling ¥9,514,796 thousand and the principal decrease wasdepreciation amounting of ¥921,858 thousand, and the 11th fiscal period, the principal decrease was depreciation amounting of ¥884,713
thousand.
Note 3: The fair value is the appraisal value or the survey value determined by outside appraisers.
Income and loss in the fiscal periods ended January 31, 2018 and July 31, 2017 for real estate for rental purposes is listed in Note 4 ”
BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REALESTATE PROPERTY”.

13. SEGMENT INFORMATION
Segment information for the period ended from August 1, 2017 to January 31, 2018 and from February 1, 2017 to July 31, 2017 is as follows:(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 and retained earnings.
(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
and retained earnings.
(b) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property,
plant and equipment 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 ofincome and retained earnings.

－17－14. PER UNIT INFORMATION

Net asset value per unit

From August 1, 2017

From February 1, 2017

to January 31, 2018

to July 31, 2017

¥118,379¥118,249

Net income per unit

¥3,369¥3,316Weighted average number of units (units)

698,178

698,178

The weighted average number of units outstanding of 698,178 were used for the computation of the amount of net income per unit as ofJanuary 31, 2018 and July 31, 2017.
A 2-for-1 split of investment units was implemented with February 28, 2018 as the record date and March 1, 2018 as the effective date. Net
assets value per unit and net income per unit are calculated based on the assumption that the split of investment unit was implemented at the
beginning of the fiscal period ended July 2017.
Net income per unit after adjusting for residual units is not included because there were no residual investment units.
The basis for calculating net income per unit is as follows:

Net income (in thousands of yen)

From August 1, 2017

From February 1, 2017

to January 31, 2018

to July 31, 2017

¥2,352,516

Net income not available to ordinary unitholders (in thousands of yen)
Net income available to ordinary unitholders (in thousands of yen)
Weighted average number of units during the period (units)¥2,315,438--¥2,352,516¥2,315,438

698,178

698,178

15. SIGNIFICANT SUBSEQUENT EVENTS
1. Merger (with Japan Senior Living Investment Corporation)
On March 1, 2018 as the effective date, Kenedix Residential Investment Corporation (“KDR”) conducted an absorption-type merger (“theMerger”) whereby KDR was the surviving corporation and Japan Senior Living Investment Corporation (“JSL”) was the dissolving corporation.
KDR also changed its corporate name from Kenedix Residential Investment Corporation to Kenedix Residential Next Investment Corporation
on March 1, 2018.
(1) Purpose of the Merger
KDR and JSL believe that, as a result of the Merger, they will achieve the benefits of (i) an increase in liquidity resulting from greater asset
scale and market capitalization that will enable them to capture more growth opportunities, (ii) greater earnings stability stemming from asset
type diversification and enhanced ability to pursue external growth and (iii) improvement in asset management efficiency together withenhanced financial health, and further believe that the potential to reap these benefits constitutes the major significance of the Merger.
(2) Method of the Merger
The Merger was an absorption-type merger with KDR as the surviving corporation and JSL was dissolved.
(3) Merger Ratio
1 unit of KDR was allotted 1 unit of JSL through the Merger. KDR implemented a 2-for-1 investment unit split with February 28, 2018 as therecord date before the Merger. As a result, the total number of investment units issued and outstanding was 782,928 units as of March 1,
2018.
(4) Cash Payment upon the Merger
KDR intends to pay JSL unitholders (the unitholders stated or recorded in the final unitholders register on the day prior to the effective date of
the Merger (excluding the JSL unitholders who demanded the purchase of their investment units pursuant to the provisions of Article 149-3 ofthe Investment Trust Act, hereinafter referred to as the “Unitholders Subject to Allocation”)), in lieu of the cash distributions pertaining to JSL’s
fiscal period from September 1, 2017 to February 28, 2018, a merger grant of ¥3,365 per unit corresponding to the cash distributions based on
JSL’s distributable income for that same period (an amount (rounded down to the nearest yen) which is the quotient resulting from dividing theamount of JSL’s distributable income on the date prior to the effective date of the Merger by the number of issued JSL investment units on thatdate, reduced by the number of investment units held by unitholders other than the Unitholders Subject to Allocation).

－18－

(5) Unitholder’s Capital
Unitholder’s capital and capital surplus of KDR that increased due to the Merger are as follows.
Unitholder’s capital : ¥0
Capital surplus : Amount to be increased is calculated by deduct the increase amount in unitholders’ capital above from an amount to bechanged in unitholders’ equity prescribed in the Article 22, Paragraph 1 of the Regulation for the Accounting of the Investment Corporation(Cabinet Office Ordinance No. 47 effective in 2006).
(6) Performance of JSL in the Latest Fiscal Period Ended February 28, 2018(from September 1, 2017 to February 28, 2018)
Business purpose Management of assets in accordance with the Investment Trust Act by investing mainly in specified assets
Operating Revenues¥988 million

Net income¥285 million

Total assets¥35,605 million

Total liabilities¥19,788 million

Net assets¥15,816 million

2. Investment Unit Split
KDR implemented a 2-for-1 split of investment units with March 1, 2018 as the effective date.
(1) Purpose of the Investment Unit Split
The Merger is carried out through an absorption-type merger having KDR as the surviving corporation, and the merger ratio, before
considering the Investment Unit Split, would be KDR 1: JSL 0.5. However, with this merger ratio, 0.5 units of KDR would be allotted to every
unit of JSL, which would mean that a number of JSL investment unitholders would receive less than one KDR unit. For this reason, in order toenable JSL unitholders to continue holding KDR units even after the Merger, it was decided that the KDR investment units will be split 2-for-1
for the purpose of issuing 1 KDR unit or more to all JSL unitholders.
(2) Method of the Investment Unit Split
KDR implemented a 2-for-1 split of its investment units held by unitholders set forth or recorded in the final unitholder registry on February 28,
2018.
(3) Increase in Number of Investment Units through the Split
Total number of KDR’s investment units issued and outstanding before the Investment Unit Split:

349,089 units

Number of investment units increased through the Investment Unit Split:

349,089 units

Total number of KDR’s investment units issued and outstanding after the Investment Unit Split:

698,178 units

The total number of KDR’s investment units issued and outstanding was 782,928 units after the Merger as of March 1, 2018, since 1 unit of
KDR was allotted to 1 unit of JSL.
For figures of per unit information under assumption by which the split of investment units was implemented at the beginning of the fiscal
period ended July 2017, please refer to “Notes to Per Unit Information.”－19－16. SECURITIES PORTFOLIO
Securities portfolio consists of the following as of January 31, 2018:(1)

Stock Not applicable(2)

Securities other than shares(in thousands of yen)Type
SubordinatedSilent Partnership
Equity Interests
SubordinatedSilent Partnership
Equity Interests

Name

Face value
total

Equity interests in TK property fund with
G.K. Tropic I as operator (Note 1)
Equity interests in TK property fund with
G.K. Tropic II as operator (Note 2)

Total

Book value

Accruedinterest

Prepaid

Assessed

accrued

value

Gain
(Loss) on Remarks

interest （Note 3） valuation-

88,339--88,339--133,368--

133,368--

221,707--

221,707-Note 1: TK property fund owns trust beneficiary interests in real estate for “KDX Residence Shukugawa Hills.”
Note 2: TK property fund owns trust beneficiary interests in real estate for “KDX Residence Asagaya,” “KDX Residence Hiyoshi” and “Serenite
Kobe Motomachi.”Note 3: The assessed value is stated at the book value.
Securities portfolio consists of the following as of July 31, 2017:(1)

Stock Not applicable(2)

Securities other than shares(in thousands of yen)Type
SubordinatedSilent Partnership
Equity Interests

Name

Equity interests in TK property fund with
G.K. Tropic I as operator (Note 1)

Total

Face value
totalBook value

Accruedinterest

Prepaid

Assessed

accrued

value

Gain
(Loss) on Remarks

interest （Note 2） valuation-

91,579--91,579--91,579--91,579-Note 1: TK property fund owns trust beneficiary interests in real estate for “KDX Residence Shukugawa Hills.”
Note 2: The assessed value is stated at the book value.

－20－17. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following as of January 31, 2018:
Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodDepreciation
Accumulated
depreciation

Depreciation
for theperiodNetbalance at
end of theperiodRemarks(in thousands of yen)
Land

Property,plant andequipment¥1,798,041

¥

-

¥

-

¥1,798,041

¥

-

¥

-

¥1,798,041

Sub total

1,798,041--

1,798,041--

1,798,041

Buildings in trust

65,654,206

3,189,393-

68,843,600

6,927,784

869,449

61,915,815

Structures in trust

444,009

58,915-502,925

114,924

14,477

388,001

Machinery andequipment in trust

1,259,827

57,959-1,317,786

226,840

28,953

1,090,946

Tools, furnitureand fixtures intrust

263,829

74,816-338,646

29,2208,978309,425

Land in trust

93,118,700

6,420,015-

99,538,715--

99,538,715

Sub total
Total

160,740,573

9,801,100¥162,538,615¥9,801,100¥-

170,541,674

7,298,769

921,858

163,242,904-¥172,339,715¥7,298,769¥921,858¥165,040,946

Note 1

Note 1

Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.
Property, plant and equipment consist of the following as of July 31, 2017:

Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodDepreciation
Accumulated
depreciation

Depreciation
for theperiodNetbalance at
end of theperiod(in thousands of yen)
Land

Property,plant andequipment¥1,798,041

¥

-

¥

-

¥1,798,041

¥

-

¥

-

¥1,798,041

Sub total

1,798,041--

1,798,041--

1,798,041

Buildings in trust

65,456,096

198,109-65,654,206

6,058,335

836,01059,595,871

Structures in trust

439,236

4,773-

444,009

100,446

13,911

343,563

Machinery andequipment in trust

1,253,773

6,053

-

1,259,827

197,886

28,014

1,061,940

Tools, furnitureand fixtures intrust

231,646

32,183-

263,829

20,241

6,776

243,587

Land in trust

93,118,700--

93,118,700--

93,118,700

Sub total

160,499,454

241,119-

160,740,573

6,376,910

884,713

154,363,663¥162,297,495¥241,119-¥162,538,615¥6,376,910¥884,713¥156,161,704

Total

¥

Note 1: The amount of increase during the period is primarily attributable to capital expenditures.

－21－

Remarks

18. INVESTMENT CORPORATION BONDS
Outstanding Investment corporation bonds as of January 31, 2018 are as follows.
Date of

Seriesissue

Balance at

Decrease

the beginningduring theof period

periodBalance at theInterest rate

end of period

Repayment date

Use

Remarks(Note2)

Unsecured(in thousands of yen)First series of unsecured
investment corporation
bonds (Note 1)
Second series of
unsecured investment
corporation bonds(Note 1)
Third series of unsecured
investment corporation
bonds (Note 1)
Total

August 30,
2016
August 30,
2016
August 30,
2016

1,000,000-

1,000,000

0.200%

1,000,000-

1,000,000

0.540%

1,000,000-

1,000,000

0.800%

3,000,000-

3,000,000

August 30,
2021
August 28,
2026
August 30,
2028

Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate andrepayment of debts.
Note 3: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year

Due after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

or less

through 2 years

through 3 years

through 4 years

through 5 years(in thousands of yen)

Investment-

corporation bonds-

1,000,000--

Outstanding Investment corporation bonds as of July 31, 2017 are as follows.
Date of

Seriesissue

Balance at

Decrease

the beginningduring theof period

Balance at theInterest rate

end of period

periodRepayment date

Use

Remarks(Note2)

Unsecured(in thousands of yen)First series of unsecured
investment corporation
bonds (Note 1)
Second series of
unsecured investment
corporation bonds(Note 1)
Third series of unsecured
investment corporation
bonds (Note 1)
Total

August 30,
2016
August 30,
2016
August 30,
2016

1,000,000-

1,000,000

0.200%

1,000,000-

1,000,000

0.540%

1,000,000-

1,000,000

0.800%

3,000,000-

3,000,000

August 30,
2021
August 28,
2026
August 30,
2028

Note 1: Ranking pari passu among the specified investment corporation bonds.
Note 2: Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate andrepayment of debts.
Note 3: Annual repayments of investment corporation bonds scheduled for the next five years after the balance sheet date are as follows.
Due in 1 year

Due after 1 year

or less

through 2 years

Due after 2 years

Due after 3 years

Due after 4 years

through 3 years

through 4 years

through 5 years(in thousands of yen)

Investment
corporation bonds

-

-

-

－22－

-

1,000,000

19. SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt and long-term debt consist of the following as of January 31, 2018
Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate
（Note 3）（Note 4）

Payment due
date（Note 7）Use

Remarks

July 31,
2018
July 31,
2018
July 31,2018(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)
Short-termloanspayableCurrent
portion of
long-term
loans
payableLong-term
loans
payableSumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.

1,000,000--

1,000,000

0.438%-

830,000-

830,000

0.438%
0.438%-

800,000-

800,000

1,000,000

1,630,000-

2,630,000

4,000,000-

4,000,000-

2,500,000-

2,500,000-

1,500,000
1,000,000-

1,500,000
1,000,000-

1,000,000-

1,000,000-

500,000-

500,000-

500,000-

500,000-

3,250,000--

3,250,000

2,000,000--

2,000,000

1,000,000
500,000--

1,000,000
500,000

500,000--

500,000

500,000--

500,000

250,000--

250,000

3,000,000--

3,000,000

22,000,000-

11,000,000

11,000,000

1,000,000--

1,000,000-

Aozora Bank, Ltd.

1,350,000

Sumitomo Mitsui
Banking Corporation

Sub total
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
Sub total
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Sumitomo Mitsui
Banking Corporation

0.910%

August 31,
2017

1.052%

August 31,
2018（Note 2）

1.088%（Note 5）

August 31,
2018（Note 2）

1,000,000

1.109%

January 31,
2021-

1,000,000

1.221%--

1,350,000

1.183%

2,000,000--

2,000,000

1.267%

Aozora Bank, Ltd.

1,500,000--

1,500,000

1.267%The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）

1,000,000--

1,000,000

1.267%

April 30,
2022

Resona Bank, Limited

1,000,000--

1,000,000

1.267%

April 30,2022

1,100,000--

1,100,000

1,100,000--

1,100,000

600,000
350,000
300,000--

600,000
350,000
300,000

300,000--

300,000

1,000,000--

1,000,000

400,000--

400,000

400,000--

400,000

300,000
200,000--

300,000
200,000

Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
The Mizuho Trust andBanking Co., Limited
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Mizuho Bank, Ltd.
Resona Bank, Limited－23－

July 31,2021
March 31,2021
April 30,
2022
April 30,2022

0.916%

August 7,2021

0.996%(Note 5)

August 7,2021

1.254%

August 7,
2023

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate
（Note 3）（Note 4）

Payment due
date（Note 7）1.254%

August 7,
2023

Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)
The Mizuho Trust andBanking Co., LimitedAozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）

200,000--

200,000

150,000--

150,000

500,000--

500,000

1.320%(Note 5)600,000--

600,000

0.945%

600,000--

600,000

0.945%

Aozora Bank, Ltd.

500,000--

500,000

0.945%

Mizuho Bank, Ltd.

950,000--

950,000

1.083%

2,000,000--

2,000,000

0.804%

1,500,000--

1,500,000

0.689%

November 30,
2019

1,200,000--

1,200,000

0.875%

January 31,
2022

1,200,000--

1,200,000

1.105%

January 31,
2024

Aozora Bank, Ltd.

2,000,000--

2,000,000

0.875%

Resona Bank, Limited

1,500,000--

1,500,000

0.987%

2,000,000--

2,000,000

1.100%

1,000,000--

1,000,000

1.265%

Aozora Bank, Ltd.

300,000--

300,000

0.678%

Resona Bank, Limited

1,100,000--

1,100,000

0.923%

700,000--

700,000

0.923%

950,000--

950,000

1.047%

1,700,000--

1,700,000

1.169%

950,000--

950,000

1.169%

2,000,000--

2,000,000

1.345%

1,000,000--

1,000,000

1.193%(Note 5)300,000--

300,000

0.624%

October 27,
2020

1,000,000--

1,000,000

1.156%

April 27,2025

1,000,000--

1,000,000

0.819%

April 28,2025

2,500,000--

2,500,000

0.903%

April 30,2026

1,000,000--

1,000,000

0.660%(Note 5)

July 31,2025

Mizuho Bank, Ltd.

1,500,000--

1,500,000

0.816%(Note 5)

Aozora Bank, Ltd.

1,000,000--

1,000,000

0.713%

Sumitomo Mitsui Trust
Bank, Limited

1,000,000--

1,000,000

0.797%

Resona Bank, Limited

500,000--

500,000

0.797%

August 31,
2026
August 31,
2024
August 31,
2025
August 31,
2025

Sumitomo Mitsui
Banking Corporation
Mitsubishi UFJ Trustand Banking
Corporation（Note 9）
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）

The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Sumitomo Mitsui
Banking Corporation
Long-term
loans
payableThe Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui Trust
Bank, Limited
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）－24－

August 7,
2023
August 31,
2021
August 31,
2021
August 31,
2021
November 30,
2022
November 30,
2020

April 30,
2022
April 30,
2023
April 30,
2024
April 30,
2025
August 31,
2020
August 31,
2022
August 31,
2022
August 31,
2023
August 31,
2024
August 31,
2024
August 31,
2025
August 31,
2024

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate
（Note 3）（Note 4）

Payment due
date（Note 7）Use

Remarks(Note 6)

Unsecured/
Unguaranteed(in thousands of yen)
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
The Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）

2,000,000--

2,000,000

0.670%(Note 5)

August 31,
2025

500,000--

500,000

0.751%(Note 5)3,000,000--

3,000,000

0.906%

1,000,000--

1,000,000

0.773%(Note 5)-1,000,000-

1,000,000

0.464%

August 31,
2025
August 31,
2026
October 31,
2025
February 28,
2019-

500,000-

500,000

0.464%

Resona Bank, Limited-

1,000,000-

1,000,000

0.900%

Sumitomo Mitsui Trust
Bank, Limited-

1,000,000-

1,000,000

0.900%

Shinsei Bank, Limited-

1,000,000-

1,000,000

0.900%-

1,200,000-

1,200,000-

1,000,000-

1,000,000-

500,000-

500,000-

500,000-

500,000-

1,500,000-

1,500,000

0.501%-

1,500,000-

1,500,000

0.501%-

1,500,000-

1,500,000

0.582%-

1,000,000-

1,000,000

0.582%-

1,000,000-

1,000,000

0.582%-

500,000-

500,000

0.624%-

500,000-

500,000

0.661%(Note 5)-1,500,000-

1,500,000

0.665%-

1,000,000-

1,000,000

0.749%-

1,000,000-

1,000,000

0.749%

55,800,000¥78,800,000

18,700,000¥20,330,000¥11,000,000

74,500,000¥88,130,000

The Mizuho Trust andBanking Co., Limited
Development Bank ofJapan Inc.
Long-term
loans
payableMizuho Bank, Ltd.
The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 8）
Mizuho Bank, Ltd.
The Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui
Banking Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Sub total

Total

0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)February 28,
2019
August 22,
2027
August 22,
2027
August 22,
2027
August 22,
2027
August 22,
2027
August 22,
2027
August 22,
2027
February 28,
2023
February 28,
2023
February 29,
2024
February 29,
2024
February 29,2024
August 31,
2024
August 31,
2024
February 28,
2025
February 28,
2026
February 28,
2026

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled for the next five years
after the balance sheet date are as follows:
Due after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

through 2 years

through 3 years

through 4 years

through 5 years

Due after 5 years(in thousands of yen)
Long-term loans payable¥3,000,000¥3,600,000¥10,000,000¥10,250,000¥47,650,000

Note 2: Borrowings listed in the current portion of long-term loans payable were listed in long-term loans payable in the previous fiscal period.
Note 3: All debts except for the following Note 5 are borrowing at a floating rate.
Note 4: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions and other derivative transactions were implemented in order to hedge theinterest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps and otherderivatives are indicated.
Note 5: Borrowings is applied at a fixed rate.

－25－

Note 6: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 7: All the repayment methods of debt financing are lump-sum repayments on the due date.
Note 8: The Bank of Tokyo-Mitsubishi UFJ, Ltd. changed its corporate name to MUFG Bank, Ltd. on April 1, 2018.
Note 9: MUFG Bank, Ltd succeeded the status of the lender to Mitsubishi UFJ Trust and Banking Corporation on April 16, 2018.
Short-term debt and long-term debt consist of the following as of July 31, 2017Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodAverageinterest rate
（Note 2）
（Note 3）

Balance atthe end of
periodPayment due
date（Note 6）Use

Remarks

July 31,
2017
July 31,2018(Note 5)

Unsecured/
Unguaranteed

0.910%

August 31,
2017(Note 5)

Unsecured/
Unguaranteed

1.052%

August 31,
2018(Note 5)

Unsecured/
Unguaranteed(in thousands of yen)
Short-termloanspayableCurrent
portion of
long-term
loans
payableLong-term
loans
payableSumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Sub total
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sub total
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Sumitomo Mitsui
Banking Corporation

1,000,000-

1,000,000-

0.430%-

1,000,000-

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

4,000,000--

4,000,000

2,500,000--

2,500,000

1,500,000
1,000,000--

1,500,000
1,000,000

1,000,000--

1,000,000

500,000--

500,000

500,000
11,000,000--

500,000
11,000,000

3,250,000--

3,250,000

2,000,000--

2,000,000

1,000,000
500,000--

1,000,000
500,000

500,000--

500,000

500,000--

500,000

250,000--

250,000

3,000,000--

3,000,000

1.088%（Note 4）

August 31,
2018

1,000,000--

1,000,000

1.109%

January 31,
2021

1,000,000--

1,000,000

1.221%

Aozora Bank, Ltd.

1,350,000--

1,350,000

1.183%

Sumitomo Mitsui
Banking Corporation

2,000,000--

2,000,000

1.267%

Aozora Bank, Ltd.

1,500,000--

1,500,000

1.267%The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）

1,000,000--

1,000,000

1.267%

April 30,
2022

Resona Bank, Limited

1,000,000--

1,000,000

1.267%

April 30,2022

1,100,000--

1,100,000

1,100,000--

1,100,000

600,000
350,000
300,000--

600,000
350,000
300,000

0.916%

August 7,
2021

300,000--

300,000

1,000,000--

1,000,000

0.996%(Note 4)400,000--

400,000

1.254%

Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
The Mizuho Trust andBanking Co., Limited
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation－26－

0.430%

July 31,2021
March 31,2021
April 30,
2022
April 30,
2022

August 7,
2021
August 7,
2023

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate
（Note 2）
（Note 3）

Payment due
date（Note 6）1.254%

August 7,
2023

Use

Remarks(Note 5)

Unsecured/
Unguaranteed(in thousands of yen)
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Mizuho Bank, Ltd.
Resona Bank, Limited
The Mizuho Trust andBanking Co., LimitedAozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）

400,000--

400,000

300,000
200,000--

300,000
200,000

200,000--

200,000

150,000--

150,000

500,000--

500,000

1.320%(Note 4)600,000--

600,000

0.945%

600,000--

600,000

0.945%

Aozora Bank, Ltd.

500,000--

500,000

0.945%

Mizuho Bank, Ltd.

950,000--

950,000

1.083%

2,000,000--

2,000,000

0.804%

1,500,000--

1,500,000

0.689%

November 30,
2019

1,200,000--

1,200,000

0.875%

January 31,
2022

1,200,000--

1,200,000

1.105%

January 31,
2024

Aozora Bank, Ltd.

2,000,000--

2,000,000

0.875%

Resona Bank, Limited

1,500,000--

1,500,000

0.987%

2,000,000--

2,000,000

1.100%

Sumitomo Mitsui
Banking Corporation
Mitsubishi UFJ Trustand Banking
Corporation（Note 8）
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）Long-term
loans
payableThe Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Sumitomo Mitsui
Banking Corporation

August 7,
2023
August 31,
2021
August 31,
2021
August 31,
2021
November 30,
2022
November 30,
2020

April 30,
2022
April 30,
2023
April 30,
2024
April 30,
2025
August 31,
2020
August 31,
2022
August 31,
2022
August 31,
2023

1,000,000--

1,000,000

1.265%

Aozora Bank, Ltd.

300,000--

300,000

0.678%

Resona Bank, Limited

1,100,000--

1,100,000

0.923%

700,000--

700,000

0.923%

950,000--

950,000

1.047%

1,700,000--

1,700,000

1.169%

950,000--

950,000

1.169%

2,000,000--

2,000,000

1.345%

1,000,000--

1,000,000

1.193%(Note 4)300,000--

300,000

0.624%

October 27,
2020

1,000,000--

1,000,000

1.156%

April 27,2025

1,000,000--

1,000,000

0.819%

April 28,2025

2,500,000--

2,500,000

0.903%

April 30,2026

1,000,000--

1,000,000

0.660%(Note 4)

July 31,2025

1,500,000-

1,500,000

0.816%(Note 4)

August 31,
2026

The Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui Trust
Bank, Limited
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Sumitomo Mitsui
Banking Corporation
The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
Mizuho Bank, Ltd.

-

－27－

August 31,
2024
August 31,
2024
August 31,
2025
August 31,
2024

Classification
LenderBalance atthebeginning of
periodIncreaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodAverageinterest rate
（Note 2）
（Note 3）

Payment due
date（Note 6）Use

Remarks(Note 5)

Unsecured/
Unguaranteed(in thousands of yen)

Long-term
loans
payableAugust 31,
2024
August 31,
2025
August 31,
2025

Aozora Bank, Ltd.

1,000,000--

1,000,000

0.713%

Sumitomo Mitsui Trust
Bank, Limited

1,000,000--

1,000,000

0.797%

Resona Bank, Limited

500,000--

500,000

0.797%

2,000,000--

2,000,000

0.670%(Note 4)

August 31,
2025

500,000--

500,000

0.751%(Note 4)3,000,000--

3,000,000

0.906%

1,000,000--

1,000,000

0.773%(Note 4)

August 31,
2025
August 31,
2026
October 31,
2025

66,800,000¥78,800,000¥1,000,000¥1,000,000

66,800,000¥78,800,000

The Bank ofTokyo-Mitsubishi UFJ,
Ltd.（Note 7）
The Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Sub total

Total

Note 1: Annual repayments of long-term loans payable (except for current portion of long-term loans payable) scheduled for the next five years
after the balance sheet date are as follows:
Due after 1 year

Due after 2 years

Due after 3 years

Due after 4 years

through 2 years

through 3 years

through 4 years

through 5 years

Due after 5 years(in thousands of yen)
Long-term loans payable¥11,000,000¥1,500,000¥5,950,000¥15,150,000¥33,200,000

Note 2: All debts except for the following Note 4 are borrowing at a floating rate.
Note 3: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions and other derivative transactions were implemented in order to hedge theinterest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps and otherderivatives are indicated.
Note 4: Borrowings is applied at a fixed rate.
Note 5: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 6: All the repayment methods of debt financing are lump-sum repayments on the due date.
Note 7: The Bank of Tokyo-Mitsubishi UFJ, Ltd. changed its corporate name to MUFG Bank, Ltd. on April 1, 2018.
Note 8: Mitsubishi UFJ Trust and Banking Corporation transferred the status of the lender to MUFG Bank, Ltd. on April 16, 2018.

－28－

20. DISTRIBUTIONS
12th Fiscal Period(From August 1, 2017 to January 31, 2018)

11th Fiscal Period(From February 1, 2017 to July 31, 2017)

I. Retained earnings at the end of period¥2,437,011,775¥2,400,002,851

II. Total distributions¥2,424,772,194¥2,315,507,337

Distributions per unit

¥6,946¥6,633¥12,239,581¥84,495,514

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount of distribution shall exceed
the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special Taxation
Measures Law, and shall not exceed its accounting
profits as the maximum amount. Following this policy, theInvestment Corporation has decided that it shall
distribute ¥2,424,772,194, which is the amount of¥2,352,516,261 in net income and ¥72,255,933 fromretained earnings brought forward, as the distribution of
earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In the
12th fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount of distribution shall exceed
the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special Taxation
Measures Law, and shall not exceed its accounting
profits as the maximum amount. Following this policy, theInvestment Corporation has decided that it shall distribute¥2,315,507,337, which is the amount of ¥2,315,438,130
in net income and ¥69,207 from retained earnings
brought forward, as the distribution of earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In the
11th fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

III. Retained earnings brought forward to
the next period

Method of calculating distribution amount－29－