Semiannual Report October 2022 Fiscal Period
May 1, 2022‒October 31, 2022

2-1-6 Uchisaiwaicho, Chiyoda-ku, Tokyo
https://www.kdo-reit.com/en/

Security code: 8972
Kenedix Office Investment Corporation1

To Our Unitholders
On behalf of Kenedix Office Investment Corporation to which I have been appointed Executive
Director on January 4, 2023, I would like to express
our sincere appreciation to our unitholders for yourcontinuous support. It is thanks to your support that
we have successfully finished the 35th fiscal period(fiscal period ended October 31, 2022). Again, we
would like to express our sincere gratitude for the
support of our unitholders.
We seek to maximize unitholder value by focusing
on investing in and managing mid-sized office buildings in the Tokyo metropolitan area to generate stable profits and sustainably expand assets under management.
Also, we identified environmental, social, and governance (ESG) initiatives in real estate investment management as one of the material topics for our business and aim to realize a sustainable society by pursuing those initiatives.
We sincerely ask for further support and encouragement from our unitholders as we pursue
those initiatives.
Executive Director, Kenedix Office Investment Corporation
Director and COO, Head of Office REIT Department,
Kenedix Real Estate Fund Management

Hiroaki Momoi

Conditions and topics during the 35th fiscal period(fiscal period ended October 31, 2022)

AUM (Total of acquisition price)

457.0

billion yen

JCR ratingAA(Stable)DPU

14,488yen(period over period +488 yen, +3.5%)

Through asset reshuffling with acquisition of two properties and sale of one this fiscal period, AUM grew andprovided balance of reserve for reduction entry in the amount of 4.6 billion yen for use in stabilizing DPU next
fiscal period and on.
By applying appropriate leasing strategies based on market trends and tenant needs, occupancy rate at the fiscal
period end was high at 97.8%.
With acquisition and cancellation of own investment units (4,295 units, approx. 3.0 billion yen), DPU increasedroughly 1%. With a 2-for-1 unit split implemented on November 1 of last year, an increase in liquidity ofinvestment units can be anticipated.

We have a new logo!
The new logo expresses our progressive spirit dedicated to realizing thefull potential of real estate and steadiness to continue trusting long-time
relationships with customers, and also represents our sincere intention tocontinue to provide new value and contribute to society through our asset
management.
2

Financial Summary
Historical Operating Trends
For the 31st-35th Fiscal Periods

PeriodUnit

31st Period(Oct. 2020)

32nd Period(Apr. 2021)

33rd Period(Oct. 2021)

34th period(Apr.2022)

35th Period(Oct.2022)

Operating revenues

millions of yen

16,71416,301

15,02815,891

16,266(Rental revenues)

millions of yen

15,583

15,11914,981

15,07815,960Operating expenses

millions of yen

8,380

8,310

8,170

8,463

8,886

(Property-related expenses)

millions of yen

7,086

6,880

7,054

7,309

7,707

Operating income

millions of yen

8,334

7,990

6,857

7,427

7,379

Ordinary income

millions of yen

7,311

7,017

5,911

6,497

6,452

Net income (a)millions of yen

7,310

7,016

5,909

6,496

6,451

Total assets (b)(Period over period)
Interest-bearing debt (c)(Period over period)
Net assets (d)(Period over period)
Unitholders’ capital(Period over period)

millions of yen%
millions of yen%
millions of yen%
millions of yen%

459,719(+2.7)
201,750(+5.1)
230,665(+0.5)
220,970(0.0)

457,505(–0.5)
198,750(–1.5)
230,981(+0.1)
220,970(0.0)

456,327(–0.3)
198,750(0.0)
230,544(–0.2)
220,970(0.0)

464,802(+1.9)
205,150(+3.2)
231,763(+0.5)
220,970(0.0)

473,013(+1.8)
214,950(+4.8)
229,562(-0.9)
217,970(-1.4)

Number of investment units issued and outstanding (e)unit

428,510428,510428,510428,510424,215

Net assets per unit *1 (d)/(e)yen538,295

539,034

538,015

540,859

270,573

millions of yen

6,592

6,592

5,999

5,999

6,146

Distributions per unit (f )/(e)yen

15,384

15,38414,00014,00014,488(Profit distribution per unit)

yen

15,384

15,38414,00014,00014,488(Distributions in excess of earnings per unit)

yen

ー

ー

ー

ー

ー

Ordinary income to total assets (annualized) *2, 3%

1.6(3.2)

1.5(3.1)

1.3(2.6)

1.4(2.8)

1.4(2.7)

Return on unitholders’ equity (annualized) *3, 4%

3.2(6.3)

3.0(6.1)

2.6(5.1)

2.8(5.7)

2.8(5.5)

50.2(–1.1)
43.9(+1.0)

50.5(+0.3)
43.4(–0.4)

50.5(+0.0)
43.6(+0.1)

49.9(-0.7)
44.1(+0.6)

48.5(-1.3)
45.4(+1.3)

%

90.1

93.9

101.5

92.3

95.2

Number of properties

properties

98

96

96

97

98

Total leasable ﬂoor aream2

488,010.71

482,299.10

482,247.31

491,113.35

500,015.61

Occupancy rate at end of period

%

98.1

96.7

97.6

98.3

97.8

Depreciation for the period

millions of yen

2,523

2,548

2,567

2,588

2,631

Capital expenditures for the period

millions of yen

1,251

1,420

988

1,289

866

Leasing NOI (Net Operating Income)*6

millions of yen

11,01910,787

10,495

10,356

10,884

FFO (Funds from Operation)*7

millions of yen

8,776

8,635

8,477

8,314

8,841

yen

20,48020,153

19,782

19,403

10,421

Total distributions (f )Net assets to total assets at end of period (d)/(b)(Period-on-period change)
Interest-bearing debt ratio at end of period (c)/(b)(Period-on-period change)
Payout ratio*5 (f )/(a)%%Other references

FFO per unit*1, 8*1 The Investment Corporation implemented a two-for-one split of investment units with October 31, 2022, as the record date of the split and November 1, 2022, as the effective date. Net assets per unit and FFO
per unit are calculated based on the assumption that the split of the investment units was implemented at the beginning of the 35 Fiscal Period.
*2 Ordinary income to total assets = Ordinary income / {(Total assets at beginning of period + Total assets at end of period) / 2} × 100*3 Annualized values for the 184 days for the 31st Fiscal Period, 181 days for the 32nd Fiscal Period, 184 days for the 33rd Fiscal Period, 181 days for 34th Fiscal Period and 184 days for 35th Fiscal Period.
*4 Return on unitholders’ equity = Net income / {(Total net assets at beginning of period + Total net assets at end of period) / 2} × 100*5 Payout ratio is rounded down to the ﬁrst decimal place.
*6 Leasing NOI = Rental revenues – Property-related expenses + Depreciation for the period*7 FFO = Net income + Depreciation for the period – Gain on sale of real estate + Loss on sale of real estate*8 FFO per unit = FFO / Number of investment units issued and outstanding (figures below ¥1 rounded down.)

Kenedix Office Investment Corporation

3

Financial StatementsofKenedix Office Investment Corporation
Thirty-fifth Fiscal Period: For the period from May 1, 2022 to October 31, 2022
With Independent Auditor’s Report4Kenedix Office Investment Corporation

Balance Sheet
As of October 31, 2022
As of October 31, 2022
AssetsCurrent assets
Cash and deposits (Notes 3)
Cash and deposits in trust (Notes 3)
Operating accounts receivable
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment (Notes 4 and 18)
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust (Note 7)
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
Construction in progress in trust
Total property, plant and equipment, net
Intangible assets (Note 4)
Leasehold right (Note 18)
Leasehold right in trust (Note 18)
Other
Total intangible assets
Investments and other assets
Investment securities (Note 15)
Lease and guarantee deposits
Lease and guarantee deposits in trust
Long-term prepaid expenses
Other (Notes 10,15 and 16)
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets

As of April 30, 2022

In thousands of yen¥¥

20,376,036 ¥
11,745,529
396,242
112,649
13,24032,643,699

23,037,269
11,593,317
279,727
71,22010,14634,991,680

19,208,618(7,768,708)
11,439,910
44,224(22,699)
21,524
464,676(336,018)
128,658
106,355(83,487)
22,86830,128,905
130,699,106(42,535,054)
88,164,051
429,675(235,561)
194,114
2,123,432(1,038,762)
1,084,669
748,177(458,579)
289,597
305,091,543－
436,565,845

18,127,176(7,449,568)
10,677,608
44,224(21,468)
22,755456,232(322,911)
133,320
104,554(79,754)
24,80027,520,902
130,362,510(40,770,613)
89,591,896
429,795(225,247)
204,547
2,075,571(981,465)
1,094,106
739,174(434,922)
304,251
296,760,716
800
426,335,705

285,257
345,32957
630,644285,257
346,10376
631,437

1,138,413
10,000122,889
1,034,645
813,924
3,119,872
440,316,362

1,136,860
10,000122,889
1,043,985
478,4432,792,179
429,759,322

53,34653,346
473,013,408

51,154
51,154
464,802,158¥

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation5

As of October 31, 2022
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable (Notes 6)
Current portion of investment corporation bonds(Notes 6 and 15)
Current portion of long-term loans payable (Notes 6,15 and 16)
Accounts payable–otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Investment corporation bonds (Notes 6 and 15)
Long-term loans payable (Notes 6, 15 and 16)
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Other (Notes 15 and 16)
Total non-current liabilities
Total liabilities
Net Assets(Note 11)
Unitholders' equity
Unitholders' capital
Deduction from unitholders' capital
Unitholders' capital, net
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Notes 15 and 16)
Total valuation and translation adjustments
Total net assets (Note 11)
Total liabilities and net assets
See accompanying notes to the financial statements.

6

As of April 30, 2022

In thousands of yen¥¥

1,737,357
300,000－
14,300,000
559,553
101,839831
308,775
2,774,028
4,987
20,087,373¥

1,759,501
8,600,000
1,000,000
13,450,000
579,319
88,892
794
218,882
2,845,568
7,335
28,550,295

13,000,000
187,350,000
2,284,874
20,728,309
537
223,363,720
243,451,094

12,000,000
170,100,000
2,155,044
20,222,559
10,448204,488,052
233,038,347

220,970,508(2,999,551)
217,970,957

220,970,508－
220,970,508

4,326,003
4,326,003
6,451,096
10,777,100
228,748,057

3,828,434
3,828,434
6,496,709
10,325,143
231,295,652

814,256
814,256
229,562,314
473,013,408

468,158
468,158
231,763,810
464,802,158¥

Kenedix Office Investment Corporation

Statement of Income and Retained Earnings
For the period from May 1, 2022 to October 31, 2022
From May 1, 2022

From November 1, 2021

to October 31, 2022

to April 30, 2022

In thousands of yen
Operating revenues
Rent revenue – real estate (Note 13)¥

Other lease business revenue (Note 13)
Gain on sale of real estate properties (Note 13)
Dividends income
Total operating revenues

13,841,688¥

13,336,478

2,119,236

1,741,811

240,982

770,595

64,462

42,214

16,266,370

15,891,099

7,707,795

7,309,872

976,930

962,007

Operating expenses
Expenses related to rent business (Note 13)
Asset management fees
Directors' compensation

6,300

6,300

Asset custody fees

23,87023,658Administrative service fees

59,53058,946

Audit fees

12,80012,800

Other operating expenses

99,58389,824

Total operating expenses

8,886,810

8,463,409

Operating income

7,379,560

7,427,689

Interest income

45

48

Gain on forfeiture of unclaimed dividends

383

322

Interest on refund

525

75

954

446

Non-operating income

Total non-operating income
Non-operating expenses
Interest expenses

732,865

722,665Interest expenses on investment corporation bonds

35,987

34,951

Financing-related expenses

139,175

149,392

Amortization of investment corporation bond issuance costs

7,659

7,348

Other non-operating expenses

12,386

15,831

928,074

930,189

Ordinary income

6,452,439

6,497,947

Income before income taxes

6,452,439

6,497,947

1,349

1,240

Total non-operating expenses

Income taxes (Note 10)
Current
Deferred(6)(2)

Total income taxes

1,343

1,237

6,451,096

6,496,709－－

Net income
Retained earnings brought forward
Unappropriated retained earnings¥

6,451,096¥

6,496,709

See accompanying notes to the financial statements.

KENEDIX Office Investment Corporation

Kenedix Ofﬁce Investment Corporation

7

Kenedix Office Investment Corporation

Statement of Changes in Net Assets
For the period from May 1, 2022 to October 31, 2022
Unitholders' equity (Note 5)

Unitholders' capital

Surplus
Voluntary
retainedearnings

Deduction from

UnappropriatedUnitholders'unitholders'

Unitholders'

Reserve forretained earnings

Total

capitalcapital(Note11)

capital, net

reduction entry(Note 21)

surplusIn thousands of yen
Balance as of
October 31, 2021¥

220,970,508

¥

–

¥

220,970,508¥

3,917,542¥

5,910,032¥

9,827,574

Changes during the fiscal period
Reversal of reserve for

–

–

–

(89,107)

89,107–

Dividends of surplus

–

–

–

–

(5,999,140)(5,999,140)

Net income

–

–

–

–

6,496,709

6,496,709

–

–

–

–

–

–

–

–

–

(89,107)586,676

497,569

reduction entry

Net changes of items otherthan unitholders’ equity
Total changes during
the fiscal period
Balance as ofApril 30, 2022¥

220,970,508

¥

–

¥

220,970,508¥

3,828,434¥

6,496,709¥

10,325,143

Changes during the fiscal period
Provision of reserve for

–

–

–

497,569(497,569)–

Dividends of surplus

–

–

–

–

(5,999,140)(5,999,140)

Net income

–

–

–

–

6,451,096

6,496,709

–

–

–

–

–

–

–

(2,999,551)(2,999,551)

–

–

–

–

–

–

–

–

–

–

(2,999,551)(2,999,551)

497,569(45,612)451,956

reduction entry

Purchase of treasury
investment units
Cancellation of treasury
investment units
Net changes of items otherthan unitholders’ equity
Total changes during
the fiscal period
Balance as of
October 31, 2022

8¥

220,970,508¥(2,999,551)¥

217,970,957¥

4,326,003¥

6,451,096¥

10,777,100

Valuation andUnitholders' equity (Note 5)translation
adjustments

Own investment

Total unitholders'

Deferred gains orunits(Note11)

equitylosses on hedges

Total net assets

In thousands of yen
Balance as of
October 31, 2021

¥

–

¥

230,798,082¥(253,223)¥

230,544,859

Changes during the fiscal period
Reversal of reserve for––

Dividends of surplus–

Net income–

reduction entry

Net changes of items otherthan unitholders’ equity––(5,999,140)–(5,999,140)

6,496,709–

6,496,709––

721,382

721,382–

497,569

721,382

1,218,951

Total changes during
the fiscal period
Balance as ofApril 30, 2022

¥

–

¥

231,295,652¥

468,158¥

231,763,810

Changes during the fiscal period
Provision of reserve for

–

–

–

–

Dividends of surplus–

Net income–(5,999,140)–(5,999,140)

6,451,096–

6,451,096(2,999,551)(2,999,551)–(2,999,551)

2,999,551

–

–

–

–

–

346,097

346,097–(2,547,594)

346,097(2,201,496)

reduction entry

Purchase of treasury
investment units
Cancellation of treasury
investment units
Net changes of items otherthan unitholders’ equity
Total changes during
the fiscal period
Balance as of
October 31, 2022

¥

–

¥

228,748,057¥

814,256¥

229,562,314

See accompanying notes to the financial statements.

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation

9

Kenedix Office Investment Corporation
Statement of Cash Flows
For the period from May 1, 2022 to October 31, 2022

From May 1, 2022
to October 31, 2022

From November 1, 2021
to April 30, 2022

In thousands of yen

Cash flows from operating activities
Income before income taxes¥

Depreciation

6,452,439¥

6,497,947

2,631,665

2,588,401

117,004

113,771

Interest income

(45)

(48)

Interest expenses

768,853757,616

7,659

7,348

Amortization of long-term prepaid expenses

Amortization of investment corporation bond issuance costs
Decrease (increase) in operating accounts receivable(116,515)

6,382

Decrease (increase) in prepaid expenses(41,429)

38,563

Increase (decrease) in operating accounts payable

205,756(32,507)

Increase (decrease) in accounts payable–other(19,922)

113,911

Increase (decrease) in accrued consumption taxes

89,892(49,257)

Increase (decrease) in advances received(71,540)

244,082(2,211)

4,590

Decrease in property, plant and equipment in trust due to sale

1,350,357

943,131

Decrease (increase) in long-term prepaid expenses(107,663)(54,719)

Other, net(11,589)(18,460)

11,252,712

11,160,75445

48(755,906)(756,682)

(801)

(784)

10,496,050

10,403,336

Increase (decrease) in deposits received

SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchases of property, plant and equipment(3,668,262)(45,527)(11,021,726)(7,322,312)

Repayments of tenant leasehold and security deposits(30,007)(64,187)

Proceeds from tenant leasehold and security deposits

172,628

100,541

Purchases of property, plant and equipment in trust

Repayments of tenant leasehold and security deposits in trust(551,922)(675,174)

Proceeds from tenant leasehold and security deposits in trust

1,302,971

1,124,969

Payments of restricted deposits in trust(31,536)(271,464)

Proceeds from restricted deposits in trust

302,201

557,038(13,525,653)(6,596,116)

Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans payable

7,800,000

6,800,000

Repayments of short-term loans payable(16,100,000)(8,800,000)

Proceeds from long-term loans payable

26,750,000

18,300,000

Repayments of long-term loans payable(8,650,000)(9,900,000)

Proceeds from issuance of investment corporation bonds
Redemption of investment corporation bonds––

Purchase of treasury investment units(3,000,300)–

Dividends paid

(5,998,599)(5,999,077)

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 3)
See accompanying notes to the financial statements.

10

990,148(1,000,000)

791,248

400,922(2,238,355)

4,208,142

33,156,349¥

30,917,994

28,948,207¥

33,156,349

Kenedix Office Investment Corporation

Notes to the Financial Statements
For the period from May 1, 2022 to October 31, 2022

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Office Investment Corporation (“the Investment Corporation”) is a real estate investment corporation whose units are listedon the Tokyo Stock Exchange. The Investment Corporation is engaged in the ownership and operation of selected mainly officebuildings in Japan, with a focus on mid-sized office buildings in the Tokyo metropolitan area. The Investment Corporation wasincorporated on May 6, 2005 as an investment corporation under the Law Concerning Investment Trusts and Investment Corporationsof Japan, or “the Investment Trust Law.” On July 21, 2005, the Investment Corporation was listed on the Real Estate Investment Trust
Market of the Tokyo Stock Exchange with a total of 75,400 investment units issued and outstanding (Securities Code: 8972).
Subsequently, the Investment Corporation raised funds through eight public offerings. Pursuant to the Investment Trust Law, theInvestment Corporation is externally managed by a registered asset management company, Kenedix Real Estate Fund Management,
Inc. (“the Asset Management Company”), a subsidiary of Kenedix, Inc. (“Kenedix”). In concert with the Asset Management Company,
the Investment Corporation strives to maximize cash distribution to investors by securing stable earnings and sustainable investment
growth. To this end, the Investment Corporation adopts a dynamic and flexible investment stance that accurately reflects its
environment and market trends, and endeavors to ensure a timely response to each and every opportunity.
During the period ended April 30, 2022, the Investment Corporation acquired one office building (Sendai Honcho Building :acquisition price of ¥6,360 million ) .
During the period ended October 31, 2022, the Investment Corporation acquired two office building (Edobashi Building:Acquisition price 9,600 million yen, Shionogi Kobe Building: Acquisition price 3,450 million yen) and sold an office building (KDX
Kiba Building: Acquisition price 1,580 million yen, Sale price 1,650 million yen ) .
At the end of the thirty-fourth fiscal periods (fiscal period ended April 30, 2022), the Investment Corporation had total unitholders’capital, net of ¥220,970 million with 428,510 investment units outstanding. At the end of thirty-fifth fiscal periods (fiscal periods
ended October 31, 2022), the Investment Corporation had total unitholders’ capital, net of ¥217,970 million with 424,215 investment
units outstanding. The Investment Corporation owned a portfolio of 97 properties (consisting of 96 office buildings and one otherproperty) and 98 properties (consisting of 97 office buildings and one other property) with total acquisition prices of ¥445,606 millionand ¥457,076 million at the end of the thirty-fourth and thirty-fifth fiscal periods, respectively. The occupancy ratios wereapproximately 98.3% and 97.8% at the end of the thirty-fourth and thirty-fifth fiscal periods, respectively.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust Act ofJapan, the Financial Instruments and Exchange Law of Japan and related regulations, and in conformity with accounting principles
and practices generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to the application anddisclosure requirements of the International Financial Reporting Standards or accounting principles generally accepted in the UnitedStates of America.
The accompanying financial statements are basically a translation of the audited financial statements that were prepared for Japanese
domestic purposes from the accounts and records maintained by the Investment Corporation and filed with the Kanto Local Finance
Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law. In preparing the accompanying
financial statements, relevant notes have been added and certain reclassifications have been made to the financial statements issued
domestically in order to present them in a form that is more familiar to readers outside Japan. The Investment Corporation’s fiscal
period is a six-month period that ends at the end of April and the end of October each year. The Investment Corporation does notprepare consolidated financial statements because it has no subsidiaries.

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation11

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(A) Securities
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving
average method. Concerning silent partnership (tokumei kumiai, “TK”) interests, the method of incorporating the amount ofequity equivalent to the portion that corresponds to the net gain or loss of the TK is adopted.
(B) Property, Plant and Equipment (including trust assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is calculated on a straight-line
basis over the estimated useful lives of the assets ranging as stated below:
From May 1, 2022
to October 31, 2022
Buildings
2–49 years

From November 1, 2021
to April 30, 2022
2–49 years

Structures

2–45 years

2–45 years

Machinery and equipment

3–17 years

3–17 years

Tools, furniture and fixtures

3–20 years

3–20 years(C) Intangible Assets (including trust assets)
Intangible assets are amortized by the straight-line method.
Leasehold right: Fixed-term land leasehold is amortized over a contractual period of 48 years and 9 months under the straightline method.
(D) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(E) Investment Unit Issuance Costs
Investment unit issuance costs are amortized over a period of three years under the straight-line method.
(F) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized over a maturity period under the straight-line method.
(G) 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, allassets and liabilities in trust are recorded in the relevant balance sheets and statements of income and retained earnings.
(H) Revenue Recognition
Operating revenues consist of rental revenues including base rents, common area charges and other operating revenues, which
include utility charge reimbursement, parking space rental revenues and other miscellaneous revenues. Rental revenues are
generally recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned
and their amounts can be reasonably estimated. Reimbursements from tenants including utility charge reimbursements arerecorded on a gross basis and such amounts are recorded both as revenues and expenses during the fiscal period.

12

(I)

Taxes on Property, Plant and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on acalendar year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes
corresponding to the said period. Under Japanese tax rules, the seller of property at the time of disposal is liable for these taxes on
the property from the date of disposal to the end of the calendar year in which the property is disposed. The seller, however, isgenerally 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 tothe period following the purchase date of each property through the end of the calendar year. The amounts of those allocatedportions of the property-related taxes are capitalized as part of the acquisition costs of the related properties. Capitalized propertyrelated taxes amounted to ¥28,034 thousand and ¥28,605 thousand as of October 31, 2022 and April 30, 2022, respectively. In
subsequent calendar years, such property-related taxes are charged as operating expenses in the fiscal period to which the
installments of such taxes correspond.

(J) Accounting for revenues
The main content of the performance obligation regarding the revenue from contracts with the customers of the Investment
Corporation and the normal point of time when satisfying the said performance obligation (normal point of time when recognizing
revenue) are as follows.
1. Sale of real estate property
For the revenue from sale of real estate, etc., revenue is recorded when the buyer who is a customer gains control of
the real estate by performing the obligation of handover stipulated in the contract for real estate sales.
2. Utility charge reimbursements
For utility charge reimbursement, revenue is recorded in accordance with the supply of electricity, tap water, etc. tothe lessee who is a customer based on the lease agreement of real estate, etc. and the content of agreement incidental
to it.
Of the utility charge reimbursement, for those that are determined to fall under the category of an agent by theInvestment Corporation, the net amount obtained by deducting the amount paid to other related parties supplying
electricity, gas, etc. from the amount received as the fee of electricity, gas, etc. is recognized as revenue.
(K) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases ofassets and liabilities using the statutory tax rates.
(L) Non-deductible consumption taxes
Non-deductible consumption taxes applicable to the acquisition of assets are included in the cost of acquisition for each asset .
(M) Derivative Financial Instruments
The Investment Corporation utilizes interest-rate swap contracts as derivative financial instruments only for the purpose ofhedging its exposure to changes in interest rates. The Investment Corporation deferred recognition of gains or losses resulting
from changes in fair value of interest-rate swap contracts because these contracts met the criteria for deferral hedging accounting.
However, the Investment Corporation adopted special treatment for interest-rate swap contracts if they met the criteria for hedging
accounting under this treatment. The hedge effectiveness for the interest-rate swap contracts is assessed each fiscal period except
for those that meet the criteria of special treatment.
(N) 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 fromthe date of purchase.
(O) Presentation of Amounts
Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation

13

Amounts of less than one thousand yen have been truncated in the Japanese financial statements prepared in accordance withJapanese GAAP and filed with regulatory authorities in Japan. Unless otherwise noted, amounts are rounded down and ratios arerounded off in the accompanying financial statements.
Totals shown in the accompanying financial statements do not necessarily agree with the sums of the individual amounts.

3. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following as of October 31, 2022 and April 30, 2022.
As of October 31, 2022

As of April 30, 2022

In thousands of yen
Cash and deposits¥

20,376,036

Cash and deposits in trust¥

11,745,529

Restricted deposits in trust (Note)

11,593,317(1,203,571)

Cash and cash equivalents in trust¥

23,037,269(1,474,236)

30,917,994¥

33,156,349

Note: Restricted deposits in trust are retained for the repayment of tenant leasehold and security deposits in trust.

4. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
Property, plant and equipment and intangible assets consist of the following as of October 31, 2022.
Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodDepreciation

Balance atthe end of
periodAccumulated
depreciation

Depreciation
for the periodNetbalance atthe end of
periodRemarks

Note 1(in thousands of yen)
Buildings
Structures
Machinery andequipment
Tools, furnitureand fixtures
Land
Subtotal
Property,plant andequipment

Buildings in
trust
Structures intrust
Machinery andequipment in
trust
Tools, furnitureand fixtures intrust
Land in trust
Construction inprogress in trust¥ 18,127,176¥ 1,081,442

44,224¥–¥ 19,208,618¥ 7,768,708¥ 319,139¥ 11,439,910––

44,224

22,6991,230

21,524456,2328,444–

464,676

336,018

13,106

128,658

104,5541,800–

106,355

83,487

3,732

22,86827,520,902

2,608,002–

30,128,905––

30,128,905

46,253,090

3,699,690–

49,952,781

8,210,912¥ 130,362,510¥ 1,255,991¥ 919,395¥ 130,699,106¥ 42,535,054¥ 2,187,286¥ 88,164,051

429,795

3,631

3,751

429,675

235,561

13,719194,1142,075,571

60,065

12,205

2,123,432

1,038,762

65,8101,084,669

739,174

12,3603,356

748,177

458,579

26,845289,597296,760,716

9,180,430

849,602305,091,543––

305,091,543

800

–

800

–

–

–

–

2,293,663

394,823,976

2,630,872

436,565,845

44,267,959

Subtotal

430,368,567

10,512,479

1,789,110

439,091,935

Total property, plant andequipment

476,621,658

14,212,169

1,789,110

489,044,717

52,478,872–¥ 290,050¥ 4,792

Intangible
assetsLeasehold right¥ 290,050

Leasehold rightin trust

363,784––

363,784

6,306

–

–

660,141–¥ 477,281,799¥ 14,212,169

Other
Total intangible assets
Total

337,209

¥

–

¥

¥

Note 1

41,741,868–¥ 285,257

18,455774

345,329

6,306

6,248

18

57

–

660,141

29,496792

630,644¥ 1,789,110¥ 489,704,858¥ 52,508,368¥2,631,665¥ 437,196,489

Notes 1
and 2

Notes 1
and 2

Note1: The amount of increase during the period is primarily attributable to the acquisition of 1 real estate property and trust
beneficiary interest in real estate of 1 property.
Note2: The amount of decrease during the period is primarily attributable to the sales of trust beneficiary interest in real estate of 1
property.

14

Property, plant and equipment and intangible assets consist of the following as of April 30, 2022.
Type of asset

Balance atthe beginningof period

Increaseduring theperiodDecreaseduring theperiodBalance atthe end of
periodDepreciation
Accumulated
depreciation

Depreciation
for the periodNetbalance atthe end of
periodRemarks(in thousands of yen)
Buildings¥ 18,103,290¥ 23,886

44,224¥–¥ 18,127,176¥ 7,449,568¥ 308,987¥ 10,677,608––

44,224

21,4681,230

22,755452,189

4,042–

456,232

322,911

13,014

133,320

Structures
Machinery andequipment
Tools, furnitureand fixturesLand

101,522

3,032–

104,554

79,754

3,748

24,80027,520,902––

27,520,902––

27,520,902

Subtotal

46,222,129

30,960–46,253,090

7,873,703

326,981

38,379,387¥ 128,595,353¥ 1,767,156–¥ 130,362,510¥ 40,770,613¥ 2,155,484¥ 89,591,896

391,649

38,145–

429,795

225,247

12,864

204,547

2,003,777

71,794–

2,075,571

981,465

64,159

1,094,106

723,095

16,079–739,174

434,922

28,116304,251

291,876,758

5,827,089

943,131

296,760,716––

296,760,716

5,300

–

4,500

800

–

–

800

Subtotal

423,595,934

7,720,265

947,631430,368,567

42,412,249

2,260,624

387,956,318

Total property, plant andequipment

469,818,064

7,751,225

947,631476,621,658

50,285,952

2,587,605

426,335,705–¥ 290,050¥ 4,792

Property,plant andequipment

Buildings in
trust
Structures intrust
Machinery andequipment in
trust
Tools, furnitureand fixtures intrust
Land in trust
Construction inprogress in trust

Intangible
assets¥Leasehold right¥ 290,050

Leasehold rightin trust

363,784––

363,784

6,306

–

–

660,141–¥ 470,478,205¥ 7,751,225

Other
Total intangible assets
Total

¥

–

¥

¥

–

¥ 285,257

17,680774

346,103

6,306

6,230

21

76

–

660,141

28,703

796

631,437¥ 947,631¥ 477,281,799¥ 50,314,656¥2,588,401¥ 426,967,143

Note 1

Notes 1
and 2

Note1: The amount of increase during the period is primarily attributable to the acquisition of the one real estate property.
Note2: The amount of decrease during the period is primarily attributable to the partial transfer of real estate related to land
expropriation.

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

From May 1, 2022
to October 31, 2022
2,000,000

From November 1, 2021
to April 30, 2022
2,000,000

424,215

428,510

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation

15

6. SHORT-TERM LOANS PAYABLE, LONG-TERM LOANS PAYABLE AND INVESTMENTCORPORATION BONDS
The following summarizes short-term loans payable, long-term loans payable and investment corporation bonds outstanding as of
October 31, 2022:
Classification
Short-term loans payable

Drawdown dateAugust 31, 2022

Last repayment dateAugust 31, 2023

Weighted-average

Balanceinterest rate

(In thousands of yen)

0.245%¥

Subtotal
Current portion of long-term loans payable

300,000
September 21, 2021

February 28, 2023

0.300%March 12, 2014

March 12, 2023

1.358%¥

1,800,000

March 20, 2014

March 12, 2023

1.349%

2,000,000

June 14, 2019

June 30, 2023

0.246%

500,000

July 10, 2019

July 31, 2023

0.230%

500,000

July 31, 2019

July 31, 2023

0.295%

1,000,000

August 31, 2017

August 31, 2023

0.544%

1,000,000

September 21, 2021

August 31, 2023

0.300%

2,000,000

October 31, 2014

October 31, 2023

1.071%

2,000,000

October 31, 2014

October 31, 2023

1.126%

1,500,000

October 31, 2014

October 31, 2023

1.071%

1,000,000

SubtotalLong-term loans payable

16

300,000
1,000,000

14,300,000
October 31, 2014

October 31, 2024

1.257%

October 31, 2014

October 31, 2024

1.259%¥

2,000,000
1,000,000

January 30, 2015

January 31, 2025

1.161%

1,500,000

February 18, 2015

February 29, 2024

1.157%

1,700,000

February 18, 2015

February 28, 2025

1.314%

1,250,000

February 27, 2015

February 28, 2025

1.153%

2,100,000

March 12, 2015

February 28, 2025

1.218%

1,000,000

March 31, 2015

March 31, 2025

1.266%

2,500,000

September 30, 2015

September 30, 2024

1.065%

2,000,000

October 30, 2015

October 31, 2024

0.989%

1,000,000

October 30, 2015

October 30, 2025

1.114%

1,500,000

October 30, 2015

October 30, 2025

1.114%

2,000,000

October 30, 2015

October 30, 2025

1.114%

2,500,000

October 30, 2015

October 30, 2025

1.121%

2,500,000

November 12, 2015

November 30, 2025

1.173%

1,000,000

January 29, 2016

January 29, 2026

1.074%

2,000,000

January 29, 2016

January 29, 2026

1.024%

1,800,000

February 18, 2016

February 18, 2026

0.998%

1,000,000

February 18, 2016

February 18, 2026

0.998%

500,000

March 31, 2016

March 31, 2026

0.898%

1,000,000

April 28, 2016

April 30, 2024

0.654%

2,000,000

April 28, 2016

April 30, 2026

0.835%

2,000,000

April 28, 2016

April 30, 2026

0.865%

1,000,000

July 29, 2016

July 31, 2026

0.613%

1,500,000

August 2, 2016

July 31, 2026

0.544%

1,000,000

October 31, 2016

October 31, 2024

0.668%

1,000,000

October 31, 2016

October 31, 2026

0.876%

2,500,000

October 31, 2016

October 31, 2026

0.760%

1,000,000

October 31, 2016

October 31, 2026

0.734%

4,000,000

October 31, 2016

October 31, 2026

0.826%

1,500,000

December 12, 2016

November 30, 2026

0.982%

500,000

December 28, 2016

December 28, 2026

0.950%

1,500,000

Classification
Long-term loans payable

KENEDIX Office Investment Corporation

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

January 16, 2017

January 31, 2027

0.860%

January 31, 2017

January 31, 2027

0.853%¥

500,000

March 28, 2017

March 31, 2027

0.850%

500,000

June 30, 2017

June 30, 2027

0.849%

1,500,000

August 10, 2017

July 28, 2027

0.800%

3,500,000

700,000

September 21, 2017

March 31, 2024

0.555%

1,000,000

September 21, 2017

September 30, 2025

0.680%

1,500,000

September 21, 2017

March 31, 2027

0.732%

1,000,000

September 21, 2017

September 21, 2027

0.873%

1,000,000

September 21, 2017

September 30, 2027

0.851%

2,500,000

October 31, 2017

October 31, 2027

0.810%

2,500,000

November 13, 2017

November 13, 2027

0.931%

3,000,000

December 7, 2017

November 30, 2027

0.899%

1,400,000

December 7, 2017

November 30, 2027

0.820%

1,200,000

December 7, 2017

November 30, 2027

0.969%

1,000,000

December 7, 2017

November 30, 2027

0.939%

1,000,000

December 7, 2017

November 30, 2027

0.869%

1,000,000

December 7, 2017

November 30, 2027

0.899%

800,000

December 7, 2017

November 30, 2027

0.869%

600,000

December 28, 2017

December 28, 2025

0.744%

500,000

December 28, 2017

December 28, 2026

0.878%

500,000

December 28, 2017

December 28, 2027

0.864%

500,000

March 12, 2018

March 31, 2028

0.914%

1,500,000

March 26, 2018

March 31, 2027

0.808%

1,000,000

March 26, 2018

March 31, 2028

0.902%

1,000,000
500,000

July 31, 2018

July 31, 2028

0.988%

August 20, 2018

August 31, 2025

0.696%

500,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

500,000

August 20, 2018

August 31, 2028

0.966%

500,000

August 31, 2018

August 31, 2025

0.700%

500,000

August 31, 2018

August 31, 2025

0.723%

300,000

August 31, 2018

August 31, 2028

1.012%

700,000

October 31, 2018

October 31, 2028

1.013%

1,500,000

October 31, 2018

October 31, 2028

0.910%

1,000,000

October 31, 2018

October 31, 2028

1.013%

500,000

March 28, 2019

March 31, 2029

0.838%

1,400,000
2,950,000

March 29, 2019

March 31, 2029

0.839%

June 14, 2019

December 28, 2026

0.517%

500,000

June 14, 2019

April 30, 2027

0.605%

1,000,000

June 14, 2019

March 31, 2029

0.725%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

September 30, 2019

September 30, 2026

0.489%

1,000,000

September 30, 2019

March 31, 2027

0.531%

900,000

September 30, 2019

March 31, 2027

0.425%

800,000

January 31, 2020

January 31, 2025

0.406%

700,000

January 31, 2020

January 31, 2027

0.526%

1,500,000

January 31, 2020

January 31, 2029

0.675%

1,500,000

March 12, 2020

February 28, 2026

0.361%

1,800,000

March 31, 2020

March 31, 2028

0.642%

1,000,000

June 30, 2020

June 30, 2028

0.646%

2,000,000

Kenedix Ofﬁce Investment Corporation17

Classification
Long-term loans payable

18

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

June 30, 2020

June 30, 2028

0.646%

June 30, 2020

June 30, 2028

0.646%¥

2,000,000

June 30, 2020

June 30, 2028

0.510%

2,000,000

July 31, 2020

July 31, 2028

0.636%

2,700,000

700,000

August 31, 2020

August 31, 2030

0.705%

1,500,000

September 30, 2020

September 30, 2025

0.396%

1,000,000

September 30, 2020

September 30, 2027

0.511%

1,000,000

September 30, 2020

September 30, 2030

0.738%

700,000

October 30, 2020

April 30, 2027

0.542%

1,400,000

October 30, 2020

October 31, 2030

0.803%

1,500,000

October 30, 2020

October 31, 2030

0.803%

300,000

November 12, 2020

April 30, 2027

0.552%

1,300,000

November 12, 2020

November 12, 2030

0.808%

700,000

November 12, 2020

November 12, 2030

0.808%

500,000

November 30, 2020

May 31, 2027

0.516%

200,000

November 30, 2020

November 30, 2030

0.763%

900,000

November 30, 2020

November 30, 2030

0.763%

800,000

November 30, 2020

November 30, 2030

0.763%

200,000

January 29, 2021

January 31, 2024

0.287%

1,000,000

January 29, 2021

January 31, 2028

0.527%

1,200,000

January 29, 2021

January 31, 2030

0.678%

2,300,000

January 29, 2021

January 31, 2030

0.678%

2,000,000

January 29, 2021

January 31, 2030

0.678%

2,000,000

January 29, 2021

November 30, 2030

0.755%

800,000

July 12, 2021

June 30, 2028

0.484%

500,000

July 30, 2021

July 31, 2026

0.350%

1,000,000

September 21, 2021

February 29, 2024

0.300%

1,000,000

November 30, 2021

October 31, 2024

0.289%

500,000

November 30, 2021

October 31, 2024

0.289%

500,000

November 30, 2021

October 31, 2024

0.289%

300,000

November 30, 2021

October 31, 2024

0.250%

2,500,000

November 30, 2021

April 30, 2026

0.300%

500,000

November 30, 2021

April 30, 2026

0.300%

500,000

November 30, 2021

April 30, 2026

0.300%

500,000

November 30, 2021

November 30, 2026

0.412%

500,000

November 30, 2021

November 30, 2026

0.412%

500,000

November 30, 2021

November 30, 2026

0.350%

500,000

November 30, 2021

November 30, 2026

0.384%

1,000,000

November 30, 2021

November 30, 2026

0.384%

500,000

November 30, 2021

November 30, 2026

0.384%

500,000

November 30, 2021

November 30, 2026

0.384%

500,000

November 30, 2021

November 30, 2026

0.325%

1,000,000

November 30, 2021

November 30, 2026

0.350%

1,000,000

November 30, 2021

November 30, 2028

0.511%

1,000,000

November 30, 2021

November 30, 2029

0.450%

500,000

April 28, 2022

April 30, 2024

0.267%

1,000,000

April 28, 2022

April 30, 2024

0.230%

2,500,000

April 28, 2022

April 30, 2025

0.297%

1,000,000

April 28, 2022

May 31, 2027

0.350%

1,000,000

June 30, 2022

June 30, 2024

0.265%

2,000,000

June 30, 2022

June 30, 2024

0.265%

1,000,000

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

June 30, 2022

June 30, 2025

0.200%

June 30, 2022

June 30, 2025

0.200%¥

2,000,000
1,000,000

June 30, 2022

June 30, 2025

0.200%

500,000

August 31, 2022

August 31, 2024

0.350%

1,600,000

August 31, 2022

February 28, 2025

0.374%

1,600,000

August 31, 2022

August 31, 2025

0.395%

500,000

August 31, 2022

August 31, 2025

0.395%

1,000,000

August 31, 2022

August 31, 2025

0.395%

500,000

August 31, 2022

August 31, 2026

0.430%

2,700,000

August 31, 2022

August 31, 2027

0.501%

2,400,000

August 31, 2022

August 31, 2027

0.420%

1,000,000

August 31, 2022

August 31, 2027

0.350%

300,000

August 31, 2022

August 31, 2029

0.685%

1,950,000

August 31, 2022

August 31, 2029

0.685%

1,000,000

August 31, 2022

August 31, 2029

0.685%

500,000

August 31, 2022

August 31, 2029

0.685%

500,000

August 31, 2022

August 31, 2029

0.685%

500,000

August 31, 2022

August 31, 2029

0.685%

200,000

August 31, 2022

August 31, 2029

0.525%

1,000,000

August 31, 2022

August 31, 2029

0.525%

500,000

August 31, 2022

August 31, 2029

0.525%

1,000,000

August 31, 2022

August 31, 2029

0.525%

500,000

October 31, 2022

October 31, 2025

0.481%

500,000

October 31, 2022

April 30, 2026

0.373%

500,000

Subtotal

187,350,000

Investment corporation bonds

July 25, 2014

July 25, 2024

1.180%¥

2,000,000

April 28, 2016

April 28, 2028

0.900%

1,000,000

July 19, 2017

July 16, 2027

0.640%

2,000,000

February 15, 2019

February 15, 2024

0.390%

2,000,000
2,000,000

January 30, 2020

January 30, 2025

0.250%

October 20, 2020

October 18, 2030

0.610%

1,000,000

July 28, 2021

July 31, 2026

0.180%

2,000,000

July 11, 2022

July 9, 2027

0.400%

1,000,000

Subtotal

13,000,000

Total

¥

214,950,000

The following summarizes short-term loans payable, long-term loans payable and investment corporation bonds outstanding as ofApril 30, 2022:
Classification
Short-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)¥

June 30, 2022

0.329%

August 31, 2021

August 31, 2022

0.329%

800,000

November 30, 2021

November 30, 2022

0.279%

1,250,000

November 30, 2021

November 30, 2022

0.279%

500,000

November 30, 2021

November 30, 2022

0.279%

350,000

November 30, 2021

November 30, 2022

0.279%

2,000,000

November 30, 2021

November 30, 2022

0.279%

500,000

November 30, 2021

November 30, 2022

0.279%

300,000

April 28, 2022

April 28, 2023

0.250%

1,900,000

July 31, 2014

July 31, 2022

1.014%

July 31, 2019

July 31, 2022

0.291%

1,000,000

September 3, 2014

August 31, 2022

0.979%

1,000,000

Subtotal
Current portion of long-term loans payable

KENEDIX Office Investment Corporation

1,000,000

July 12, 2021

8,600,000¥

2,200,000

Kenedix Ofﬁce Investment Corporation19

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)Classification

Drawdown dateCurrent portion of long-term loans payable

September 3, 2014

August 31, 2022

0.979%

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000

August 31, 2015

August 31, 2022

0.872%

500,000¥

August 31, 2015

August 31, 2022

0.872%

500,000

September 30, 2021

October 31, 2022

0.250%

500,000

September 21, 2021

February 28, 2023

0.300%

1,000,000

March 12, 2014

March 12, 2023

1.358%

1,800,000

March 20, 2014

March 12, 2023

1.349%

2,000,000

SubtotalLong-term loans payable20

950,000

13,450,000
October 31, 2014

October 31, 2023

1.071%

October 31, 2014

October 31, 2023

1.126%¥

2,000,000
1,500,000

October 31, 2014

October 31, 2023

1.071%

1,000,000

October 31, 2014

October 31, 2024

1.257%

2,000,000

October 31, 2014

October 31, 2024

1.259%

1,000,000

January 30, 2015

January 31, 2025

1.161%

1,500,000

February 18, 2015

February 29, 2024

1.157%

1,700,000

February 18, 2015

February 28, 2025

1.314%

1,250,000
2,100,000

February 27, 2015

February 28, 2025

1.153%March 12, 2015

February 28, 2025

1.218%

1,000,000

March 31, 2015

March 31, 2025

1.266%

2,500,000

September 30, 2015

September 30, 2024

1.065%

2,000,000

October 30, 2015

October 31, 2024

0.989%

1,000,000

October 30, 2015

October 30, 2025

1.114%

1,500,000

October 30, 2015

October 30, 2025

1.114%

2,000,000

October 30, 2015

October 30, 2025

1.114%

2,500,000

October 30, 2015

October 30, 2025

1.121%

2,500,000

November 12, 2015

November 30, 2025

1.173%

1,000,000

January 29, 2016

January 29, 2026

1.074%

2,000,000

January 29, 2016

January 29, 2026

1.024%

1,800,000

February 18, 2016

February 18, 2026

0.998%

1,000,000

February 18, 2016

February 18, 2026

0.998%

500,000

March 31, 2016

March 31, 2026

0.898%

1,000,000

April 28, 2016

April 30, 2024

0.654%

2,000,000

April 28, 2016

April 30, 2026

0.835%

2,000,000

April 28, 2016

April 30, 2026

0.865%

1,000,000

July 29, 2016

July 31, 2026

0.613%

1,500,000

August 2, 2016

July 31, 2026

0.544%

1,000,000

October 31, 2016

October 31, 2024

0.668%

1,000,000

October 31, 2016

October 31, 2026

0.876%

2,500,000

October 31, 2016

October 31, 2026

0.760%

1,000,000

October 31, 2016

October 31, 2026

0.734%

4,000,000

October 31, 2016

October 31, 2026

0.826%

1,500,000

December 12, 2016

November 30, 2026

0.982%

500,000

December 28, 2016

December 28, 2026

0.950%

1,500,000

January 16, 2017

January 31, 2027

0.860%

500,000

January 31, 2017

January 31, 2027

0.853%

700,000

March 28, 2017

March 31, 2027

0.850%

500,000

June 30, 2017

June 30, 2027

0.849%

1,500,000

Classification
Long-term loans payable

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)August 10, 2017

July 28, 2027

0.800%¥

3,500,000

August 31, 2017

August 31, 2023

0.544%

1,000,000

September 21, 2017

March 31, 2024

0.555%

1,000,000

September 21, 2017

September 30, 2025

0.680%

1,500,000

September 21, 2017

March 31, 2027

0.732%

1,000,000

September 21, 2017

September 21, 2027

0.873%

1,000,000

September 21, 2017

September 30, 2027

0.851%

2,500,000

October 31, 2017

October 31, 2027

0.810%

2,500,000

November 13, 2017

November 13, 2027

0.931%

3,000,000

December 7, 2017

November 30, 2027

0.899%

1,400,000

December 7, 2017

November 30, 2027

0.820%

1,200,000

December 7, 2017

November 30, 2027

0.969%

1,000,000

December 7, 2017

November 30, 2027

0.939%

1,000,000

December 7, 2017

November 30, 2027

0.869%

1,000,000

December 7, 2017

November 30, 2027

0.899%

800,000

December 7, 2017

November 30, 2027

0.869%

600,000

December 28, 2017

December 28, 2025

0.744%

500,000

December 28, 2017

December 28, 2026

0.878%

500,000

December 28, 2017

December 28, 2027

0.864%

500,000

March 12, 2018

March 31, 2028

0.914%

1,500,000

March 26, 2018

March 31, 2027

0.808%

1,000,000

March 26, 2018

March 31, 2028

0.902%

1,000,000

July 31, 2018

July 31, 2028

0.988%

500,000

August 20, 2018

August 31, 2025

0.696%

500,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

1,000,000

August 20, 2018

August 31, 2028

1.003%

500,000

August 20, 2018

August 31, 2028

0.966%

500,000

August 31, 2018

August 31, 2025

0.700%

500,000

August 31, 2018

August 31, 2025

0.723%

300,000

August 31, 2018

August 31, 2028

1.012%

700,000

October 31, 2018

October 31, 2028

1.013%

1,500,000

October 31, 2018

October 31, 2028

0.910%

1,000,000

October 31, 2018

October 31, 2028

1.013%

500,000

March 28, 2019

March 31, 2029

0.838%

1,400,000

March 29, 2019

March 31, 2029

0.839%

2,950,000

June 14, 2019

June 30, 2023

0.246%

500,000

June 14, 2019

December 28, 2026

0.517%

500,000

June 14, 2019

April 30, 2027

0.605%

1,000,000

June 14, 2019

March 31, 2029

0.725%

1,000,000

July 10, 2019

July 31, 2023

0.230%

500,000

July 31, 2019

July 31, 2023

0.295%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

July 31, 2019

April 30, 2027

0.554%

1,000,000

September 30, 2019

September 30, 2026

0.489%

1,000,000

September 30, 2019

March 31, 2027

0.531%

900,000

September 30, 2019

March 31, 2027

0.425%

800,000

January 31, 2020

January 31, 2025

0.406%

700,000

January 31, 2020

January 31, 2027

0.526%

1,500,000

January 31, 2020

January 31, 2029

0.675%

1,500,000

March 12, 2020

February 28, 2026

0.361%

1,800,000

March 31, 2020

March 31, 2028

0.642%

1,000,000

June 30, 2020

June 30, 2028

0.646%

2,000,000

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation

21

Classification
Long-term loans payable

Subtotal

22

Drawdown date

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

June 30, 2020

June 30, 2028

0.646%

June 30, 2020

June 30, 2028

0.646%¥

2,000,000

June 30, 2020

June 30, 2028

0.510%

2,000,000

July 31, 2020

July 31, 2028

0.636%

2,700,000

700,000

August 31, 2020

August 31, 2030

0.705%

1,500,000

September 30, 2020

September 30, 2025

0.396%

1,000,000

September 30, 2020

September 30, 2027

0.511%

1,000,000

September 30, 2020

September 30, 2030

0.738%

700,000

October 30, 2020

April 30, 2027

0.542%

1,400,000

October 30, 2020

October 31, 2030

0.803%

1,500,000

October 30, 2020

October 31, 2030

0.803%

300,000

November 12, 2020

April 30, 2027

0.552%

1,300,000

November 12, 2020

November 12, 2030

0.808%

700,000

November 12, 2020

November 12, 2030

0.808%

500,000

November 30, 2020

May 31, 2027

0.516%

200,000

November 30, 2020

November 30, 2030

0.763%

900,000

November 30, 2020

November 30, 2030

0.763%

800,000

November 30, 2020

November 30, 2030

0.763%

200,000

January 29, 2021

January 31, 2024

0.287%

1,000,000

January 29, 2021

January 31, 2028

0.527%

1,200,000

January 29, 2021

January 31, 2030

0.678%

2,300,000

January 29, 2021

January 31, 2030

0.678%

2,000,000

January 29, 2021

January 31, 2030

0.678%

2,000,000

January 29, 2021

November 30, 2030

0.755%

800,000

July 12, 2021

June 30, 2028

0.484%

500,000

July 30, 2021

July 31, 2026

0.350%

1,000,000

September 21, 2021

August 31, 2023

0.300%

2,000,000

September 21, 2021

February 29, 2024

0.300%

1,000,000

November 30, 2021

October 31, 2024

0.289%

500,000

November 30, 2021

October 31, 2024

0.289%

500,000

November 30, 2021

October 31, 2024

0.289%

300,000

November 30, 2021

October 31, 2024

0.250%

2,500,000

November 30, 2021

April 30, 2026

0.300%

500,000

November 30, 2021

April 30, 2026

0.300%

500,000

November 30, 2021

April 30, 2026

0.300%

500,000

November 30, 2021

November 30, 2026

0.412%

500,000

November 30, 2021

November 30, 2026

0.412%

500,000

November 30, 2021

November 30, 2026

0.350%

500,000

November 30, 2021

November 30, 2026

0.384%

1,000,000

November 30, 2021

November 30, 2026

0.384%

500,000

November 30, 2021

November 30, 2026

0.384%

500,000

November 30, 2021

November 30, 2026

0.384%

500,000

November 30, 2021

November 30, 2026

0.325%

1,000,000

November 30, 2021

November 30, 2026

0.350%

1,000,000

November 30, 2021

November 30, 2028

0.511%

1,000,000

November 30, 2021

November 30, 2029

0.450%

500,000

April 28, 2022

April 30, 2024

0.267%

1,000,000

April 28, 2022

April 30, 2024

0.230%

2,500,000

April 28, 2022

April 30, 2025

0.297%

1,000,000

April 28, 2022

May 31, 2027

0.350%

1,000,000
170,100,000

Classification
Current portion of investment corporation
bonds

Drawdown dateJuly 19, 2017

Last repayment date

Weighted-average

Balanceinterest rate

(In thousands of yen)

July 19, 2022

0.260%¥

1,000,000

Subtotal
Investment corporation bonds

1,000,000
July 25, 2014

July 25, 2024

1.180%

April 28, 2016

April 28, 2028

0.900%¥

1,000,000

2,000,000

July 19, 2017

July 16, 2027

0.640%

2,000,000

February 15, 2019

February 15, 2024

0.390%

2,000,000

January 30, 2020

January 30, 2025

0.250%

2,000,000

October 20, 2020

October 18, 2030

0.610%

1,000,000

July 28, 2021

July 31, 2026

0.180%

2,000,000

Subtotal

12,000,000

Total

¥

205,150,000

7. REDUCTION ENTRY
The amount of reduction entry of property, plant and equipment acquired by government subsidy is as follows:
As of October 31, 2022
As of April 30, 2022
In thousands of yen
Buildings in trust¥

26,230¥26,2308. COMMITMENT LINE AGREEMENTThe Investment Corporation has concluded a commitment line agreement with bank of account, etc.
As of October 31, 2022

As of April 30, 2022

In thousands of yen
Maximum amount¥

9,000,000¥

9,000,000

Drawn credit facility¥

9,000,000¥

9,000,000–

Balance–

9. PER UNIT INFORMATION
From May 1, 2022
to October 31, 2022

From November 1, 2021
to April 30, 2022
Yen

Net asset value per unit¥

270,573¥

270,429

Net income per unit

¥

7,566

¥

7,580

852,530

Weighted-average number of units (units)

857,020*1: Net income per unit is calculated by dividing net income by the weighted average (based on number of days) number ofunits. Net income per unit after adjusting for diluted investment units is not included because there were no dilutive
investment units.
*2: The Investment Corporation implemented a two-for-one split of the investment units with October 31, 2022, as the record date of
the split and November 1, 2022, as the effective date. Net assets per unit and net income per unit are calculated based on theassumption that the split was implemented at the beginning of the prior fiscal period.

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation

23

10. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 31%. However, theInvestment Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements are
met under the Special Taxation Measures Law of Japan. Under this law, the Investment Corporation must meet a number of tax
requirements, including a requirement that it currently distribute in excess of 90% of its net income for the fiscal period in order tobe able to deduct such amounts. If the Investment Corporation does not satisfy all of the requirements, the entire taxable income of
the Investment Corporation will be subject to regular corporate income taxes. The Investment Corporation distributed in excess of
90% of its distributable income in the form of cash distributions totaling ¥6,146 million and ¥5,999 million for the periods ended
October 31, 2022 and April 30, 2022, respectively. Therefore, such distributions were treated as deductible distributions for purposesof corporate income taxes. The effective tax rate on the Investment Corporation’s income was 0.02% for the fiscal periods ended
October 31, 2022 and April 30, 2022, respectively. The following table summarizes the significant differences between the statutory
tax rate and the effective tax rate.

From November 1, 2021
to April 30, 2022

From May 1, 2022
to October 31, 2022
Statutory tax rate

31.46%

31.46%

Deductible cash distributions(29.97)(29.05)

Provision of reserve for reduction entry(1.49)(2.41)

Others0.01

0.01

Effective tax rate

0.02%

0.02%

The significant components of deferred tax assets and liabilities as of October 31, 2022 and April 30, 2022 are as follows:
As of October 31, 2022

As of April 30, 2022

In thousands of yen
Deferred tax assets
Enterprise tax payable¥

Amortization of leasehold right

5,806

5,562

Deferred gains or losses on hedges
Subtotal
Valuation allowance
Total deferred tax assets

37

¥

30

168

3,287

6,012

8,879

(5,974)(8,849)

¥

¥

37

30

11. NET ASSETSThe Investment Corporation issues only non-par value units in accordance with the Investment Trust Act. The entire amount of theissue 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 the Investment Trust Act.

Information on the cancellation of treasury investment units during the six-month period ended October 31, 2022 and April 30, 2022
is as follows:
As of October 31, 2022
Total number of units cancelled (Number of units)
Total amount of cancellation (Thousands of yen)¥

As of April 30, 2022

4,295

–

2,999,551–

12. RELATED-PARTY TRANSACTIONS(1) Parent Company, Major Corporate Unitholders and Other
Thirty-fifth fiscal period (From May 1, 2022 to October 31, 2022) and Thirty-fourth fiscal period (From November 1, 2021 to April
30, 2022): Not applicable(2) Affiliated Companies and Other
Thirty-fifth fiscal period (From May 1, 2022 to October 31, 2022) and Thirty-fourth fiscal period (From November 1, 2021 to April
30, 2022)

24

: Not applicable(3) Fellow Subsidiary Companies and Other
Thirty-fifth fiscal period (From May 1, 2022 to October 31, 2022) and Thirty-fourth fiscal period (From November 1, 2021 to April
30, 2022): Not applicable(4) Directors, Major Individual Unitholders and Other
Thirty-fifth fiscal period (From May 1, 2022 to October 31, 2022) and Thirty-fourth fiscal period (From November 1, 2021 to April
30, 2022): Not applicable

13. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES, AND GAIN AND LOSS ON SALE OF REAL ESTATE PROPERTY
Rent revenue – real estate, expenses related to rent business, and gain and loss on sale of real estate property for the fiscal
periods from May 1, 2022 to October 31, 2022 and from November 1, 2021 to April 30, 2022 consist of the following:
From May 1, 2022

From November 1, 2021

to October 31, 2022

to April 30, 2022

In thousands of yen
Rental and other operating revenues
Rent revenue – real estate
Rental revenues
Common area charges
Subtotal¥ 12,335,332¥ 11,829,399

1,506,356

1,507,079

13,841,688

13,336,478

Others:Parking space rental revenues

507,846

486,655

Utility charge reimbursement

1,268,984

1,027,409

Miscellaneous

342,405

227,746

Subtotal

2,119,236

1,741,811¥ 15,960,925¥ 15,078,289

Property management fees and facility management fees

¥ 1,482,699¥ 1,450,957

Utilities

1,445,057

1,115,245

Taxes

Total rental and other operating revenues
Property-related expenses
Expenses related to rent business

1,369,695

1,341,445

Repairs and maintenance398,775

406,830

Insurance

20,28019,585

Trust fees

30,19429,867

OthersDepreciation
Total expenses related to rent business

329,428

357,542

2,631,665

2,588,398¥ 7,707,795¥ 7,309,872

Gain and loss on sale of real estate properties
KDX Toranomon 1Chome Building（partial sale due to expropriation）
Revenue from sale of investment properties(*)－¥ 1,731,347

Cost of investment properties－

943,131

Other sales expenses－

17,620－¥ 770,595

Gain on sale of real estate properties¥¥(*)Revenue from sale of real estate, etc. includes 29,150 thousand yen of compensation for property transfer.

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation

25

KDX Kiba Building
Revenue from sale of investment properties¥ 1,650,000

Cost of investment properties
Other sales expenses
Gain on sale of real estate properties¥－

1,350,357－

58,659－¥ 240,982¥－

14. LEASESThe Investment Corporation, as lessor, has entered into leases whose fixed monthly rents are due in advance with lease terms ofgenerally two years for office buildings. The future minimum rental revenues under existing non-cancelable operating leases as of
October 31, 2022 and April 30, 2022 are as follows:
As of October 31, 2022

As of April 30, 2022

In thousands of yen
Due within one year

¥ 3,478,791¥ 3,198,073

Due after one year

7,628,983

8,224,029¥ 11,107,775¥ 11,422,103

Total

15. FINANCIAL INSTRUMENTS
Thirty-fifth fiscal period (From May 1, 2022 to October 31, 2022)(A) Overview(1) Policy for financial instruments
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily
through bank loans and the issuance of investment corporation bonds and new investment units. The Investment Corporation uses
derivatives for the purpose of hedging its exposure to changes in interest rates and does not enter into derivatives for speculative or
trading purposes. Management of surplus funds is undertaken in a prudent manner that considers fully such factors as safety,
liquidity, interest-rate conditions and cash flows.
(2) Types of financial instruments and related risk
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer
and risk of fluctuation of value of its property.
Loans payable and investment corporation bonds are used primarily for procuring funds necessary for the acquisition of properties
and have a redemption date of a maximum of approximately 8 years and 1 month following the accounting date. Although a certain
portion of said liabilities are subject to interest-rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate
swap transactions) in order to reduce such risk.
Interest-rate swap transactions are used as derivative financial instruments. Utilizing interest-rate swap transactions, the Investment
Corporation fixes its interest expense for long-term loans payable bearing interest at a variable rate. With regard to hedge accounting
methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please
see Note 2(M) “Derivative Financial Instruments.”(3) Risk management for financial instruments(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap transactions in order to minimize risk arising from fluctuations in interest rates
on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer
with regard to investment securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled
due dates) associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out
payment due dates and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly
checking the balance of cash reserves.

26

(4) Supplementary explanation of the estimated fair value of financial instruments
Because the factors incorporated into the calculation of fair value of financial instruments are subject to change, differing assumptions
are adopted which may alter fair value. Moreover, the contract amounts, etc. of derivative transactions in “(B) Estimated Fair Valueof Financial Instruments” do not indicate the market risk of derivative transactions.
(B) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of October 31, 2022 and estimated fair value are shown in thefollowing table. Moreover, because “Cash and deposits,” “Cash and deposits in trust” and “Short-term loans payable” are settled withcash in the short term, the fair value can be considered as equivalent to the book value. Therefore, the notes for these accounts havebeen omitted.
Carrying value
Estimated fair value
Difference
In thousands of yen(1) Current portion of investment corporation bonds(2) Current portion of long-term loans payable

－

－

－

14,300,000

14,338,060

38,060(3) Investment corporation bonds

13,000,000

12,971,800(28,200)(4) Long-term loans payable

187,350,000

186,596,720(753,279)¥ 214,650,000¥ 213,906,580¥ (743,419)

814,256

814,256–

Subtotal
Derivative transactions(*)(*)The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing
the net liability position.
*1 Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivativetransactions
Liabilities(1) Current portion of investment corporation bonds and (3) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices. The fair value of those for which no market priceis available is based on the quoted price obtained from counterparty financial institutions, etc.
(2) Current portion of long-term loans payable and (4) Long-term loans payable
The fair value of long-term loans payable is based on the present value of the total of principal and interest discounted by the interest
rate to be applied if similar new loans were entered into. The fair value of long-term loans payable bearing interest at a variable rate,
which is subject to fixed interest rates resulting from interest-rate swaps and special treatment applied to said swaps, is based on thepresent value of the total of principal and interest, which is handled together with the applicable interest-rate swaps, discounted by
the interest rate to be applied if similar loans were entered into.
Derivative Transactions
Please refer to Note 16 “DERIVATIVE TRANSACTIONS.”*2 Redemption schedule for loans payable and investment corporation bonds
Due within
1 year or lessDue after

Due after

1 year through2 years through2 years

3 years

Due after

Due after

Due after

3 years through 4 years through4 years

5 years

5 years

In thousands of yen
Investment corporation

–

bonds
Long-term loans payable
Total

4,000,000

14,300,000¥

14,300,000

2,000,000

25,600,000¥

29,600,000

29,950,000¥

31,950,000

3,000,000

2,000,000
30,800,000¥

32,800,000

2,000,000

38,500,000¥

41,500,000

62,500,000¥

64,500,000

Thirty-fourth fiscal period (From November 1, 2021 to April 30, 2022)(A) Overview(1) Policy for financial instruments
The Investment Corporation procures essential funds for acquiring properties and undertaking the repayment of loans primarily
through bank loans and the issuance of investment corporation bonds and new investment units. The Investment Corporation uses
derivatives for the purpose of hedging its exposure to changes in interest rates and does not enter into derivatives for speculative or
trading purposes. Management of surplus funds is undertaken in a prudent manner that considers fully such factors as safety,
liquidity, interest-rate conditions and cash flows.

KENEDIX Office Investment Corporation

Kenedix Ofﬁce Investment Corporation27

(2) Types of financial instruments and related risk
Investment securities, which are Japanese silent partnership (tokumei kumiai, “TK”) interests, are exposed to credit risk of the issuer
and risk of fluctuation of value of its property.
Loans payable and investment corporation bonds are used primarily for procuring funds necessary for the acquisition of properties
and have a redemption date of a maximum of approximately 8 years and 7 months following the accounting date. Although a certain
portion of said liabilities are subject to interest-rate fluctuation risk, the Investment Corporation utilizes derivatives (interest-rate
swap transactions) in order to reduce such risk.
Interest-rate swap transactions are used as derivative financial instruments. Utilizing interest-rate swap transactions, the Investment
Corporation fixes its interest expense for long-term loans payable bearing interest at a variable rate. With regard to hedge accounting
methods, hedging instruments and hedged items, hedge policy, and the assessment of the effectiveness of hedging activities, please
see Note 2(M) “Derivative Financial Instruments.”(3) Risk management for financial instruments(a) Monitoring of market risk (the risks arising from fluctuations in interest rates and others)
The Investment Corporation uses interest-rate swap transactions in order to minimize risk arising from fluctuations in interest rates
on funds procured. The Investment Corporation periodically reviews the value of the property and financial condition of the issuer
with regard to investment securities.
(b) Monitoring of liquidity risk (the risk that the Investment Corporation may not be able to meet its obligations on scheduled
due dates) associated with procurement of funds
Although loans and other liabilities are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out
payment due dates and by using diversified fund procurement methods. Liquidity risk is also managed by such means as regularly
checking the balance of cash reserves.
(4) Supplementary explanation of the estimated fair value of financial instruments
Because the factors incorporated into the calculation of fair value of financial instruments are subject to change, differing assumptions
are adopted which may alter fair value. Moreover, the contract amounts, etc. of derivative transactions in “(B) Estimated Fair Valueof Financial Instruments” do not indicate the market risk of derivative transactions.
(B) Estimated Fair Value of Financial Instruments
The carrying value of financial instruments on the balance sheet as of April 30, 2022 and estimated fair value are shown in the following
table. Moreover, because “Cash and deposits,” “Cash and deposits in trust” and “Short-term loans payable” are settled with cash in
the short term, the fair value can be considered as equivalent to the book value. Therefore, the notes for these accounts have been
omitted.
Carrying value
Estimated fair value
Difference
In thousands of yen(1) Current portion of investment corporation bonds

1,000,000

999,800(200)(2) Current portion of long-term loans payable

13,450,000

13,482,518

32,518(3) Investment corporation bonds

12,000,000

12,025,400

25,400(4) Long-term loans payable

170,100,000

169,880,655(219,344)¥ 196,550,000¥ 196,388,374¥ (161,625)

468,158

468,158–

Subtotal
Derivative transactions(*)(*)The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parentheses representing
the net liability position.
*1 Methods to determine the estimated fair value of financial instruments and other matters related to securities and derivativetransactions
Liabilities(1) Current portion of investment corporation bonds and (3) Investment corporation bonds
The fair value of investment corporation bonds is based on quoted market prices. The fair value of those for which no market priceis available is based on the quoted price obtained from counterparty financial institutions, etc.

28

(2) Current portion of long-term loans payable and (4) Long-term loans payable
The fair value of long-term loans payable is based on the present value of the total of principal and interest discounted by the interest
rate to be applied if similar new loans were entered into. The fair value of long-term loans payable bearing interest at a variable rate,
which is subject to fixed interest rates resulting from interest-rate swaps and special treatment applied to said swaps, is based on thepresent value of the total of principal and interest, which is handled together with the applicable interest-rate swaps, discounted by
the interest rate to be applied if similar loans were entered into.
Derivative Transactions
Please refer to Note 16 “DERIVATIVE TRANSACTIONS.”*2 Redemption schedule for loans payable and investment corporation bonds
Due within
1 year or lessDue after

Due after

1 year through2 years through2 years

3 years

Due after

Due after

Due after

3 years through 4 years through4 years

5 years

5 years

In thousands of yen
Investment corporation

1,000,000

2,000,000

4,000,000–

2,000,000

4,000,000

13,450,000

19,700,000

20,850,000

26,400,000

35,100,000

68,050,000

bonds
Long-term loans payable
Total

¥

14,450,000¥

21,700,000¥

24,850,000¥

26,400,000¥

37,100,000¥

72,050,000

16. DERIVATIVE TRANSACTIONS
The following summarizes the contracted amount and the fair value of interest-rate swap contracts as of October 31, 2022:(1) Hedge accounting not applied
Not applicable(2) Hedge accounting applied
Hedge

Type ofaccounting

derivative

methodtransactions

Principle method Interest-rate

Contracted amount

Hedgeditems(In thousands of yen)
Maturing
after 1 year

Fair value(In thousandsof yen)Long-termswaps:

loans

Receive/floating

payableCalculation
method for
applicable fair value
Based on the¥82,450,000¥

79,950,000¥

814,256

and pay/fixedamount provided bycounterparty
financial institutions

Special treatment Interest-rateLong-termof interest-rate

swaps:

loans

swaps

Receive/floating

payable30,100,000

27,100,000¥ 112,550,000¥ 107,050,000*

and pay/fixed
Total

¥

814,256(*)Interest-rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As aresult, their fair value is included in the fair value of the hedged long-term loans payable.
The following summarizes the contracted amount and the fair value of interest-rate swap contracts as of April 30, 2022:(1) Hedge accounting not applied
Not applicable

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation29

(2) Hedge accounting applied
Hedge

Type ofaccounting

derivative

methodtransactions

Principle method Interest-rate

Contracted amount

Hedgeditems

Fair value(In thousands of yen)
Maturing
after 1 year

(In thousandsof yen)Long-termswaps:

loans

Receive/floating

payableCalculation
method for
applicable fair value
Based on the¥72,650,000¥

71,650,000¥

468,158

and pay/fixedamount provided bycounterparty
financial institutions

Special treatment Interest-rateLong-termof interest-rate

swaps:

loans

swaps

Receive/floating

payable37,250,000

30,100,000¥ 109,900,000¥ 101,750,000*

and pay/fixed
Total

¥

468,158(*)Interest-rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As aresult, their fair value is included in the fair value of the hedged long-term loans payable.

17. REVENUE RECOGNITION
Thirty-fifth fiscal period (From May 1, 2022, to October 31, 2022)(1)

Information on the Breakdown of Revenue from Contracts with Customers
Thirty-fifth Fiscal Period (May 1, 2022, to October 31, 2022)
Revenues generated from contracts
with customers*1

Sales to external customers(in thousands of yen)
Revenue from sale of realestate property¥1,650,000*2¥ 240,982

1,268,984

1,268,984

Other

–

14,756,403

Total¥2,918,984¥16,266,370

Utility charge reimbursements(*1)Rental revenues, etc. which are subject to Accounting Standard for Lease Transactions (ASBJ Statement No. 13) and the transfer
of real estate properties which is subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real
Estate Using Special Purpose Companies” (Accounting System Committee Report No.15 of the Japanese Institute of Certified
Public Accountants) are not included in the above amounts as they are excluded from revenue recognition accounting standards.
Furthermore, revenue generated from contracts with major customers include of revenue from sale of real estate properties andutility charge reimbursements.
(*2) Revenue from sale of real estate, etc. is recorded as gain and loss on sale of real estate, etc. in the statement of income. Therefore,
the amount calculated by deducting the cost of real estate, etc. sold and other sales expenses from the revenue from sale of realestate, etc. is indicated.
(2)

Information Utilized as the Base for Understanding Revenue from Contracts with Customers
Thirty-fifth Fiscal Period (May 1, 2022, to October 31, 2022)
The information is as described in the notes on Summary of Significant Accounting Policies.

(3)

Information on relationship of Fulfillment of performance Obligations based with customers with cashflow generated
from said contracts and Amount and period of Revenue expected to be recognized in the next calculation period or
thereafter from contracts existing at the end of the current calculation period.

30

(a) Balance of contract assets and contract liabilities, etc.
From May 1, 2022
to October 31, 2022
(in thousands of yen)
Receivables generated from contracts with customers¥247,784(balance at beginning of fiscal period)
Receivables generated from contracts with customers

324,473(balance at end of fiscal period)
Contract assets (balance at beginning of fiscal period)–

Contract assets (balance at end of fiscal period)–

Contract liabilities (balance at beginning of fiscal period)–

Contract liabilities (balance at end of fiscal period)–(b)Transaction value allocated to remaining performance obligations
Not applicable.
With regard to utility charge reimbursements, as the Investment Corporation has the right to receive from customers anamount directly corresponding to the value for the lessees, or customers, of sections for which performance is complete by
the end of the fiscal period, the amount it has the right to claim is recognized as revenue in accordance with Paragraph 19 of
the Implementation Guidance on Accounting Standard for Revenue Recognition. Accordingly, such is not included in thenote on transaction value allocated to remaining performance obligations through application of the provisions of Paragraph80-22 (2) of the Accounting Standard for Revenue Recognition.
Thirty-fourth fiscal period (From November 1, 2021 to April 30, 2022)(1)

Information on the Breakdown of Revenue from Contracts with Customers
Thirty-fourth Fiscal Period (November 1, 2021, to April 30, 2022)
Revenues generated from contracts
with customers*1

Sales to external customers(in thousands of yen)
Revenue from sale of realestate property¥1,731,347*2¥ 770,595

1,027,409

1,027,409

Other

–

14,093,094

Total¥2,758,756¥15,891,099

Utility charge reimbursements(*1)Rental revenues, etc. which are subject to Accounting Standard for Lease Transactions (ASBJ Statement No. 13) and the transfer
of real estate properties which is subject to the “Practical Guidelines on Accounting by Transferors for Securitization of Real
Estate Using Special Purpose Companies” (Accounting System Committee Report No.15 of the Japanese Institute of Certified
Public Accountants) are not included in the above amounts as they are excluded from revenue recognition accounting standards.
Furthermore, revenue generated from contracts with major customers include of revenue from sale of real estate properties andutility charge reimbursements.
(*2) Revenue from sale of real estate, etc. is recorded as gain and loss on sale of real estate, etc. in the statement of income. Therefore,
the amount calculated by deducting the cost of real estate, etc. sold and other sales expenses from the revenue from sale of realestate, etc. is indicated.
(2)

Information Utilized as the Base for Understanding Revenue from Contracts with Customers
Thirty-fourth Fiscal Period (November 1, 2021, to April 30, 2022)
The information is as described in the notes on Summary of Significant Accounting Policies.

(3)

Information on relationship of Fulfillment of performance Obligations based with customers with cashflow generated
from said contracts and Amount and period of Revenue expected to be recognized in the next calculation period or
thereafter from contracts existing at the end of the current calculation period.

Kenedix Ofﬁce Investment Corporation

KENEDIX Office Investment Corporation31

(a) Balance of contract assets and contract liabilities, etc.
From November 1, 2021
to April 30, 2022
(in thousands of yen)
Receivables generated from contracts with customers¥246,452(balance at beginning of fiscal period)
Receivables generated from contracts with customers

247,784(balance at end of fiscal period)
Contract assets (balance at beginning of fiscal period)–

Contract assets (balance at end of fiscal period)–

Contract liabilities (balance at beginning of fiscal period)–

Contract liabilities (balance at end of fiscal period)–(b)Transaction value allocated to remaining performance obligations
Not applicable.
With regard to utility charge reimbursements, as the Investment Corporation has the right to receive from customers anamount directly corresponding to the value for the lessees, or customers, of sections for which performance is complete by
the end of the fiscal period, the amount it has the right to claim is recognized as revenue in accordance with Paragraph 19 of
the Implementation Guidance on Accounting Standard for Revenue Recognition. Accordingly, such is not included in thenote on transaction value allocated to remaining performance obligations through application of the provisions of Paragraph80-22 (2) of the Accounting Standard for Revenue Recognition.

18. INVESTMENT AND RENTAL PROPERTIES
Thirty-fifth fiscal period (From May 1, 2022 to October 31, 2022)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo metropolitan area for the purpose of generating
rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value (In thousands of yen)
As of April 30, 2022

Net change

As of October 31, 2022

Fair value

As of October 31, 2022
(In thousands of yen)
¥ 553,221,000¥ 426,967,143¥ 10,229,346¥ 437,196,489*1: The carrying value represents the acquisition cost less accumulated depreciation.
*2: Fair value at the end of the fiscal period is the appraisal value determined by outside appraisers.
*3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal
increase/decrease factors were the acquisitions of 1 real estate property and trust beneficiary interest in real estate of 1 property
totaling 13,346,136 thousand, sale of trust beneficiary interest in real estate of 1 property totaling 1,350,357 thousand anddepreciation amounting to 2,631,665 thousand.

Income and loss in the fiscal period ended October 31, 2022 for real estate for rental purposes is listed in Note 13 “BREAKDOWNOF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE
OF REAL ESTATE PROPERTY.”
Thirty-fourth fiscal period (From November 1, 2021 to April 30, 2022)
The Investment Corporation owns real estate for rental purposes mainly in the Tokyo metropolitan area for the purpose of generating
rental revenues.
The carrying value in the balance sheets and corresponding fair value of those properties are as follows:
Carrying value (In thousands of yen)
As of October 31, 2021

Net change

As of April 30, 2022

Fair value
As of April 30, 2022
(In thousands of yen)
¥ 535,600,000¥ 422,751,947¥ 4,215,195¥ 426,967,143*1: The carrying value represents the acquisition cost less accumulated depreciation.
*2: Fair value at the end of the fiscal period is the appraisal value determined by outside appraisers.
*3: Among changes in the amount of real estate for rental purposes that occurred during the fiscal period under review, principal

32

increase/decrease factors were the acquisition of trust beneficiary interest in real estate of 1 property totaling 6,461,511
thousand, partial sale of real estate pertaining to land expropriation totaling 943,131 thousand and depreciation amounting
to 2,588,398 thousand.
Income and loss in the fiscal period ended April 30, 2022 for real estate for rental purposes is listed in Note 13 “BREAKDOWN OFRENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES, AND GAIN AND LOSS ON SALE OF
REAL ESTATE PROPERTY.”

19. SEGMENT AND RELATED INFORMATION
Thirty-fifth fiscal period (From May 1, 2022 to October 31, 2022)(A) Segment Information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportablesegment 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 theoperating revenues 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 revenues on the statementof 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 ofproperty, 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 revenues on thestatement of income and retained earnings.
Thirty-fourth fiscal period (From November 1, 2021 to April 30, 2022)(A) Segment Information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportablesegment 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 theoperating revenues 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 revenues on the statementof 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 ofproperty, 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 revenues on thestatement of income and retained earnings.
KENEDIX Office Investment Corporation

Kenedix Ofﬁce Investment Corporation

33

20. SIGNIFICANT SUBSEQUENT EVENTS
Split of Investment Units
The Investment Corporation implemented a two-for-one split of the investment units with October 31, 2022, as the record
date and November 1, 2022, as the effective date.
(A) Purpose of Split
The Investment Corporation aims to create an environment that makes it easier for investors to invest as well as further
expand the investor base and improve the liquidity of investment units by lowering the per-investment unit price.
(B) Method of Split
With October 31, 2022, as the record date, the Investment Corporation implemented a two-for-one split of its investment
units held by unitholders stated or recorded in the final unitholder registry on that date.
(C)

Number of Investment Units Increased Due to the Split, Etc.
(1) Total number of investment units issued and outstanding before the split:

424,215 units(2) Total number of investment units increased due to the split:

424,215 units(3) Total number of investment units issued and outstanding after the split:

848,430 units(4) Total number of authorized investment units after the split:

4,000,000 units

21. DISTRIBUTIONS
Thirty-fourth fiscal period(From May 1, 2022 to October 31, 2022)

Thirty-third fiscal period(From November 1, 2021 to April 30, 2022)

(Yen)

(Yen)

I. Retained earnings at the end of period¥ 6,451,096,681¥ 6,496,709,393

II. Total distributions¥ 6,146,026,920¥ 5,999,140,000

Distributions per unit

¥ 14,488¥ 14,000

Provision of reserve for reduction entry¥ 304,852,318¥ 497,569,393

Ⅳ. Retained earnings brought forward
to the next period¥ 217,443¥-

In accordance with the policy stipulated in Article
35 (1) of its Articles of Incorporation, theInvestment Corporation determines that theamount of distribution shall exceed the amountequivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Act on Special
Measures Concerning Taxation, and shall be up to
the amount of its profits as the ceiling. Following
this policy, the Investment Corporation has
decided that, of the amount remaining after theprovision of reserve for reduction entry as
stipulated in Article 65-7 of the Act on Special
Measures Concerning Taxation is deducted fromunappropriated retained earnings, it shall
distribute the outstanding ¥6,146,026,920 as
profit distribution.
In addition, the Investment Corporation decided
not to distribute cash in excess of distributableprofit, stipulated in Article 35 (2) of its Articles ofIncorporation.

In accordance with the policy stipulated in Article
35 (1) of its Articles of Incorporation, theInvestment Corporation determines that theamount of distribution shall exceed the amountequivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Act on Special
Measures Concerning Taxation, and shall be up to
the amount of its profits as the ceiling. Following
this policy, the Investment Corporation has
decided that, of the amount remaining after theprovision of reserve for reduction entry as
stipulated in Article 64 of the Act on Special
Measures Concerning Taxation is deducted fromunappropriated retained earnings, it shall
distribute the outstanding ¥5,999,140,000 as
profit distribution.
In addition, the Investment Corporation decided
not to distribute cash in excess of distributableprofit, stipulated in Article 35 (2) of its Articles ofIncorporation.

III. Voluntary reserve (provision)

Method of calculating distribution
amount34

Independent Auditor’s Report

The Board of Directors
Kenedix Office Investment Corporation
OpinionWe have audited the accompanying financial statements of Kenedix Office Investment
Corporation (the Company), which comprise the balance sheet as at October 31, 2022, and thestatements of income, and retained earnings, changes in net assets, and cash flows for the sixmonth period then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at October 31, 2022, and its financial performance and its
cash flows for the six-month period then ended in accordance with accounting principles
generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Other Information
The other information comprises the information included in the Semi-annual Report that
contains audited financial statements but does not include the financial statements and our
auditor’s report thereon. Management is responsible for preparation and disclosure of the otherinformation. The Supervisory Director is responsible for overseeing the Company’s reporting
process of the other information.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.

Kenedix Office Investment Corporation

35

Responsibilities of Management, and Supervisory Director for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles
generally accepted in Japan, matters related to going concern.
The Supervisory Director is responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes our opinion. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
・ Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, andobtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation in accordance with accounting
principles generally accepted in Japan.
・36

We communicate with the Executive Director regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
We also provide the Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.

Ernst & Young ShinNihon LLC
Tokyo, Japan
January 27, 2023

/s/ Hitoshi Sakurai
Hitoshi Sakurai
Designated Engagement Partner
Certified Public Accountant/s/ Masahiro Yawata
Masahiro Yawata
Designated Engagement Partner
Certified Public Accountant

Kenedix Office Investment Corporation37

IR schedule
Fiscal period ended October
May

Jun.

Jul.

Aug.

Sep.

Oct.

Fiscal period end
Financial results
announcement
Start of distribution payments
Asset management report publication

Fiscal period ended April
Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

Fiscal period end

Financial results
announcement

Start of distribution payments
Asset management report publication

Unitholder memorandum
Fiscal period end

April 30 and October 31 of each year

General Meeting ofUnitholders

Convened at least once every two years, in principle

Date of record forestablishment of unitholder
voting rights

Prescribed in Article 16 of the Articles of Incorporation

Distribution payment dates

April 30 and October 31 (within three months from payment record dates)

Listing

Tokyo Stock Exchange (Securities code: 8972)

Newspaper for publicannouncements

Nihon Keizai Shimbun (Nikkei)

Unitholder registry andspecial account administrator

Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Postal address and telephoneinquiries

Stock Transfer Agency Department Sumitomo Mitsui Trust Bank, Limited 8-4 Izumi
2-chome, Suginami-ku, Tokyo Toll-free tel: 0120 782 031

Receipt of Distributions

38

During receipt period

Take your distribution receipt to the head or branch ofﬁces of Japan Post Bank Co.,
Ltd. or post ofﬁces (bank agents).

After receipt period

Specify the receipt method on the back of the distribution receipt and mail it to the
Stock Transfer Agency Division of Sumitomo Mitsui Trust Bank, Limited, or receive
distributions at a branch of the bank.

Receiving future distributions

Distributions can be paid by remittances to bank or ordinary postal savings accounts.
If transfer designations or other procedures are preferred, you should contact
the brokerage with which you have an account, in principle. If you do not have a
brokerage account and have a special account, contact Sumitomo Mitsui Trust Bank,
Limited, the institution for managing special accounts.

Exclusion

Under the Articles of Incorporation of Kenedix Office Investment Corporation, you cannot
receive distributions after three years have elapsed from the commencement of distribution
payments, so please receive them as soon as possible.