Translation of Japanese Original
June 13, 2023
To All Concerned Parties
REIT Issuer:
Kenedix Retail REIT Corporation
Moyuru Watanabe, Executive Director(Securities Code: 3453)
Asset Management Company:
Kenedix Real Estate Fund Management, Inc.
Hikaru Teramoto, President & CEO
Inquiries:
Isaharu Kikushima
Head of Strategic Planning, Retail REIT Department
TEL: +81 3-5157-6013

Notice Concerning Forecasts for Operating Results for the Fiscal Period Ending October 31, 2023
(from April 1, 2023 to October 31, 2023) and Payment Upon the Merger
As announced in the press release “Notice Concerning Execution of the Merger Agreement by and among Kenedix
Office Investment Corporation, Kenedix Residential Next Investment Corporation and Kenedix Retail REIT
Corporation” dated today, Kenedix Retail REIT Corporation (“KRR”) has executed a merger agreement (the“Merger Agreement”) as of today, and plans to execute an absorption-type merger (the “Merger”) effective on
November 1, 2023, whereby Kenedix Office Investment Corporation (“KDO”) is the surviving corporation andKenedix Residential Next Investment Corporation (“KDR”) and KRR are the dissolving corporations. In relation
to the Merger, KRR intends to submit a proposal to its General Meeting of Unitholders, which is scheduled to beheld on August 21, 2023, regarding an amendment of its articles of incorporation to change the ends of its fiscal
period from the last days of March and September to the last days of April and October. Subject to the approvalof the proposal of such amendment of the articles of incorporation at the General Meeting of Unitholders, KRR’s
final fiscal period prior to the effective date of the Merger is scheduled to be the seven-month period from April
1, 2023 to October 31, 2023 (the “Fiscal Period Ending October 31, 2023”). KRR hereby announces the following
details regarding forecasts for operating results for the Fiscal Period Ending October 31, 2023, which will be its
final fiscal period if the Merger comes into effect, and the forecasted payment upon the Merger to be paid insteadof cash distributions for the final fiscal period.
1.

Forecasts for Operating Results for the Fiscal Period Ending October 31, 2023 (from April 1, 2023 to October
31, 2023) and Payment Upon the Merger

Fiscal PeriodEnding October 31,2023

Operatingrevenue(million yen)

Operatingincome(million yen)

Ordinary
income(million yen)

Netincome(million yen)

Payment upon
the Merger
per unit(yen)

11,969

5,353

4,608

4,607

7,660

(Note 1) Number of forecasted investment units issued and outstanding at the end of the fiscal period is 602,177 units.

1(Note 2) The period for the forecasts for operating results for the Fiscal Period Ending October 31, 2023 and payment upon
the Merger is the seven-month period from April 1, 2023 to October 31, 2023.
(Note 3) The figures above are forecasts as of this moment, which is calculated based on the assumptions stated in
ATTACHMENT “Assumptions for the Forecasts for Operating Results for the Fiscal Period Ending October 31, 2023
and Payment Upon the Merger” on the assumption that the Merger will take effect, and the actual operating revenue,
operating income, ordinary income, net income and payment upon the Merger per unit may vary due to transition inproperty market, etc., changes in the operating environment or other circumstances surrounding KRR, status of
exercise of the right to demand purchase of investment units relating to the Merger, expenses related to the Merger,etc. In addition, these forecasts do not guarantee the amount of the payment upon the Merger.
(Note 4) After the Merger, instead of cash distributions to the unitholders of KRR for KRR’s final fiscal period, KDO(following the Merger, the corporate name is scheduled to be changed to “KDX Realty Investment Corporation”. The
surviving corporation after the Merger is referred to as the “New REIT”, hereinafter), the surviving corporation, will,based on the amount of distributable profit of KRR and within a reasonable period after the effective date of theMerger, make a payment upon the Merger (distributions of profits) to the unitholders listed or recorded on the final
unitholders register of KRR as of October 31, 2023, the day immediately prior to the effective date of the Merger(excluding KDO, KDR, KRR and the unitholders of KRR who have demanded the purchase of their investment units
pursuant to the provisions of Article 149-3 of the Act on Investment Trusts and Investment Corporations (Act No.
198 of 1951, as amended) (excluding the unitholders of KRR who have withdrawn such purchase demands))(hereinafter the “Allotted Unitholders”), in an amount equivalent to the cash distributions for the final fiscal period(the payment will be the amount of distributable profit of KRR as of the day immediately prior to the effective dateof the Merger divided by the number of investment units that is obtained by deducting the number of investment
units held by the unitholders other than the Allotted Unitholders from the total number of investment units of KRR
issued and outstanding as of the day immediately prior to the effective date of the Merger (such calculated amountbeing rounded down to the nearest whole yen)). As a result, the amount of payment upon the Merger will varydepending on the status of exercise of the right to demand purchase of investment units. Because the status of such
exercise cannot be confirmed at present, the forecasted figures above assume that the right to demand purchase ofinvestment units will not be exercised.
(Note 5) Forecasts may be revised if results are expected to deviate from the above forecasts beyond a certain level.
(Note 6) Figures less than one unit are rounded down.

2.

Reasons for Announcement
Forecasts for operating results for the fiscal period ending September 30, 2023 (from April 1, 2023 toSeptember 30, 2023) were announced in “FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED
MARCH 31, 2023 (REIT)” released on May 17, 2023. However, in connection with the execution of theMerger Agreement, KRR intends to submit a proposal to its General Meeting of Unitholders, which isscheduled to be held on August 21, 2023, regarding an amendment of its articles of incorporation to change
the ends of its fiscal period from the last days of March and September to the last days of April and October.
Subject to the approval of such amendment of the articles of incorporation at the General Meeting ofUnitholders, the seven months from April 1, 2023 to October 31, 2023 will be KRR’s final fiscal period
before the Merger comes into effect. As KRR plans to record expenses in connection with the Merger and toacquire properties in connection with the Merger, KRR hereby announces the forecasts for operating results
for the Fiscal Period Ending October 31, 2023 (from April 1, 2023 to October 31, 2023) which will be thefinal fiscal period of KRR, and forecasted payment upon the Merger to be paid instead of cash distributions
for the final fiscal period.
Forecasts for operating results for the Fiscal Period Ending October 31, 2023 (from April 1, 2023 to October
31, 2023) and payment upon the Merger assume that the proposal pertaining to the approval of the Merger
Agreement and change in the ends of fiscal period, etc. will be adopted and approved at the general meetingof unitholders scheduled to be held on August 21, 2023.
For details concerning forecasts for operating results and distributions for the New REIT, the surviving
corporation after the Merger, please refer to the press release “Notice Concerning Operating Results andDistributions Forecasts for the Fiscal Period Ending April 30, 2024, Following the Merger of Kenedix Office
Investment Corporation, Kenedix Residential Next Investment Corporation and Kenedix Retail REIT
Corporation” announced by KDO, KDR and KRR today.

KRR’s website address:

https://www.krr-reit.com/en/

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This notice is the English translation of the Japanese announcement on June 13, 2023. However, no assurance
or warranties are given for the completeness or accuracy of this English translation.

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ATTACHMENT
Assumptions for the Forecasts for Operating Results
for the Fiscal Period Ending October 31, 2023 and Payment Upon the Merger
ItemAssumptions
 Fiscal Period Ending October 31, 2023 (17th fiscal period)
Calculation period(from April 1, 2023 to October 31, 2023) (214 days)
 Earnings forecasts for the Fiscal Period Ending October 31, 2023 are based on 71
properties (the “Assets held at the end of the 17th fiscal period”), which are the70 real estate and trust beneficiary interest in real estate owned by KRR as ofMarch 31, 2023 (the “Assets held at the end of the 16th fiscal period”) and York
Portfolio assets
Mart Higashi-Michinobe which is scheduled to be acquired on September 25,
2023 (the “Assets to be Acquired in the 17th fiscal period”).
 Forecasts are based on the assumption that portfolio assets other than the above
are not subject to change (such as acquisition of new properties and disposition ofcurrent properties).
 Operating revenues are based on information provided by the sellers of the Assets
to be Acquired in the 17th fiscal period and information possessed by the asset
manager of KRR on the Assets held at the end of the 16th fiscal period, and onOperating revenues
the leasing agreements currently in place and other factors such as expectations
based on tenant and market trends.
 Forecasts are based on the assumption that there will be no rent in arrears or nonpayments by tenants.
 Property-related operating expenses other than depreciation are calculated basedon historic data, reflecting variable costs that include leasing costs based on theleasing agreements on the properties.
 Depreciation is calculated by the straight-line method including incidental
expenses, etc., and is assumed to be 1,610 million yen.
 Taxes and public dues (fixed property tax and city planning tax, etc. (the“property-related taxes”)) are assumed to be 1,021 million yen. Property-related
taxes on the assets acquired since January 1, 2023 were settled with the seller at
the time of sale, and the amount equivalent to such settled amount is expected to
be included in the acquisition price.
 Repair expenses are recorded as expenses for each property in the amount that theasset manager assumes to be necessary for each fiscal period. However, actual
Operating expenses
repair expenses for each fiscal period may differ significantly from the forecasted
amounts due to various reasons, including increased or additional repair expenses
caused by unforeseeable factors, the fact that repair expenses generally vary
widely from year to year, and the fact that such expenses are not incurred on aregular basis.
 One-time cost relevant to the Merger is assumed to be 64 million yen.
 It is assumed that the General Meeting of Unitholders will approve theamendment to the articles of incorporation to change the current calculation
method of the Asset Management Fee II, which is based on a six-month operating
period, so that the amount of the Asset Management Fee II for the period ending
October 31, 2023 (17th fiscal period) will not be excessive as such fiscal period
will be a seven-month period.
Non-operating
 Amortization of costs relating to the issuance and offering of new investment units4

Itemexpenses

Borrowings andinvestment
corporation bondsInvestment units

Payment uponthe Mergerper unitOthersAssumptions
are assumed to be 16 million yen. It is assumed that the costs relating to theissuance and offering of new investment units will be amortized over three years
using the straight-line method.
Interest expenses and other debt-related expenses are assumed to be 727 millionyen.
KRR has outstanding borrowings of 119,300 million yen and outstanding
investment corporation bonds of 10,000 million yen as of the date of thisannouncement.
Of its current outstanding borrowings as of today, KRR assumes that the 500
million yen and 1,000 million yen that will become due in the Fiscal PeriodEnding October 31, 2023 will be refinanced in its entirety.
It is assumed that, in connection with the acquisition of the Assets to be Acquiredin the 17th fiscal period scheduled on September 25, 2023, KRR will borrow
4,600 million yen on the same date.
Of its current outstanding investment corporation bonds as of today, KRR
assumes that none will become due in the Fiscal Period Ending October 31, 2023.
The LTV ratio at the end of the Fiscal Period Ending October 31, 2023 is estimatedto be approximately 45.7% (rounded to the first decimal place).
LTV ratios are calculated according to the following formula:
LTV ratio = (Outstanding borrowings + Outstanding investment corporation
bonds)/Total assets
It is assumed that the number of investment units issued and outstanding as of thedate of this announcement is 602,177 units, and that there will be no changes in
the number of investment units, among others, due to new issuance of units until
the end of the Fiscal Period Ending October 31, 2023.
Payment upon the Merger (payment upon the Merger per unit) is made in lieu ofcash distributions for the Fiscal Period Ending October 31, 2023 (from April 1,2023 to October 31, 2023) and is calculated based on the cash distribution policy
set forth in the articles of incorporation of KRR.
Payment upon the Merger per unit may change due to various factors, including
the status of exercise of the rights to purchase units in relation to the Merger,changes in assets under management, fluctuations in rental income resulting fromchanges in tenants, etc. or occurrence of unexpected repairs.
Forecasts are based on the assumption that there will be no amendments to thelaw, taxation system, accounting standards, public listing regulations,requirements of the Investment Trusts Association, Japan, etc. which may affectthe aforementioned forecast figures.
Forecasts are based on the assumption that there will be no unexpected significant
changes in general economic trends, real estate market trends or other conditions.

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