Semi-annual Reportfor the 13th Period
From February 1, 2018 to July 31, 2018

Security code3278

I Overview of KDR

To our unitholders
We sincerely hope that this semi-annual report finds our unitholders prospering and in good health. We would like to take thisopportunity to thank you for your continued support of Kenedix Residential Next Investment Corporation (KDR).

For the 13th fiscal period (from February 1, 2018 to July 31, 2018), operating revenue totaled ¥7,097 million, operating income was ¥3,439
million, ordinary income was ¥2,842 million and net income was ¥5,416 million. The distribution to unitholders was ¥4,026 per unit, 15.9%
higher than in the previous period.

In March 2018, KDR merged with Japan Senior Living Investment Corporation with investments in healthcare facilities such as Privatesenior homes (with nursing care), and began a new start as a REIT that aims to realize stable revenue and continuous asset growth throughdiversified investment in “spaces where people live and stay” encompassing residential facilities, healthcare facilities and accommodations.
Through this merger, 14 healthcare facilities valued at 28.9 billion yen were added to our portfolio assets. Furthermore, we carried out
asset reshuffling by selling 1 rental residential property in Osaka and acquiring 1 private senior homes (with nursing care) in Kyoto in July
2018. Our properties continued to perform well as shown in the increase in rent of new tenants and renewal tenants compared with theprevious amounts for residential facilities, in addition to the period-end occupancy rate remaining at a high level of 97.6%.

As to our activities in the 13th fiscal period onward, we procured funds in August 2018 through public offering for the first time in about
three and a half years, and by using the funds combined with borrowings acquired 4 rental residential properties and 5 nursing and healthfacilities, the first of such for a J-REIT. As a result, we own assets of 138 properties valued at 218.3 billion yen (total acquisition price) as ofAugust 31, 2018.

Based on an accurate understanding of social and economic changes, we will pursue with flexibility investment and revenue opportunities
that we believe are the most attractive. We will dynamically invest and manage our portfolio by gathering information and making
decisions swiftly. By using this approach, we aim to maximize returns for investors.

We respectfully look forward to your continued support.

Kenedix Residential Next Investment Corporation

Keisuke Sato
Executive Director Katsue Okuda
Executive Director

Financial Highlights

Distribution per Unit

4,026 yen
3,852 yen
3,753 yen

13th (Ended July 2018) Actual
14th (Ending January 2019) Forecast
15th (Ending July 2019) Forecast(Note) Distribution per unit for 14th fiscal period and15th fiscal period is estimated based on certain
assumptions as of September 12, 2018

Business Results
10th Period(January 2017)
Operating Revenues(mln yen)
Operating Income(mln yen)
Ordinary Income(mln yen)
Net Income(mln yen)
Number of Investment
Units Issued

11th Period(July 2017)12th Period(January 2018)

13th Period(July 2018)

14th Period(1)(January 2019)15th Period (1)(July 2019)

5,468

5,574

5,681

7,097

7,528

7,578

2,838

2,833

2,889

3,439

3,939

3,839

2,311

2,316

2,353

2,842

3,339

3,254

2,310

2,315

2,352

5,416

3,338

3,253

349,089

349,089

349,089

782,928

869,133

869,133

6,533

6,633

(after the unit split
3,473 yen)

4,026

3,852

3,753

6,946

Distribution per Unit
(yen)

(Note 1) Figures for 14th fiscal period and 15th fiscal period are estimated based on certain assumptions as of September 12, 2018. These estimates are not guarantees of future
performance because results of operations may be affected by changes in rental revenue caused by the departure of tenants, s ales and purchases of properties, interest rate
fluctuations, issuing investment units, and other reasons. These estimates are based on Financial Report for the Fiscal Perio d Ended July 31, 2018 (REIT) as of September 12 ,2018. A 2for-1 split of investment units was implemented with March 1, 2018 as the effective date.

Financial Position
10th Period(January 2017)
Unitholders’ Equity(mln yen)Interest-bearing
Debt (mln yen)Interest-bearing
Debt Ratio to
Assets Ratio(1)Total Asset (mlnyen)
Net Asset Ratio
Unitholders’ Equity
per Unit (yen)11th Period(July 2017)12th Period(January 2018)

13th Period(July 2018)82,55282,55982,65081,80081,80091,130106,130

48.9％

48.9％

51.5％

49.7％

167,276

167,316

176,813

213,558

49.4％

49.3％

46.2％

236,478

236,498

46.7％
236,795(Note 1) Interest-bearing Debt to Assets Ratio ＝Interest-bearing debt at the end of period / Total assets at the end of period×100(after the unit split)

118,379yen

98,745

126,123

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

KDR has continued to implement various measures to further increase
KDR has continued to implement various measures to further increase
unitholder value in the 13th fiscal period, including the merger with Japan
unitholder value in the 13th fiscal period, including the merger with Japan
Senior Living Investment Corporation, strategic asset reshuffling and decision on
Senior Living Investment Corporation, strategic asset reshuffling and decision on
public offering. I would like to explain the outline of each measure as well as our
public offering. I would like to explain the outline of each measure as well as our
future growth strategy.
future growth strategy.
■The merged with Japan Senior Living Investment Corporation
Having steadily grown as a REIT specializing in residential properties since the listing in April 2012, KDR mergedwith Japan Senior Living Investment Corporation on March 1, 2018 to pursue further growth. In addition to theprevious main investment target of residential facilities such as rental residential properties, healthcare facilities
such as homes for the elderly and accommodations such as hotels were added to the main investment targets.
KDR has made a new start as a REIT that aims to realize stable revenue and continuous growth by widely investingin these “spaces where people live and stay.” Furthermore, we changed the name of KDR to Kenedix Residential
Next Investment Corporation upon the merger.
■Asset reshuffle
In July 2018, KDR conducted strategic asset reshuffling through which it sold KDX Shimmachi Residence, a rental
residential property in Nishi-ku, Osaka-shi, and acquired Excellent Kitano, a private senior homes (with nursing care) in
Kita-ku, Kyoto-shi, using the proceeds. KDR decided to sell KDX Shimmachi Residence since the property was unlikely
to see internal growth for the time being as more competitive properties had been newly constructed in thesurrounding area. On the other hand, Excellent Kitano is a relatively new property with high scarcity value, locatedadjacent to Kitano Tenmangu enjoying an excellent living environment and transport convenience. With favorable
occupancy, the home for the elderly is believed to contribute to stable revenue for KDR.
Through the asset reshuffling this time, KDR’s gain from the sale of KDX Shimmachi Residence was 436 million yen, of
which 300 million yen (383 yen per unit) will be returned to unitholders in the form of distribution for the 13th fiscal
period. The remaining 136 million yen will be internally reserved to level distributions for the 14th fiscal period
onward upon sales of properties.
KDR plans to continuously sell properties as part of its strategic asset reshuffling which improves portfolio quality, solong as the current status of the real estate investment market remains unchanged, and aims to increase distribution
per unit using the gain on sale.
Property Sold

Property Acquired

KDX
Shimmachi
ResidenceExcellent Kitano
Assetreshuffle

Property type

Residential facilities(Rental housing)Selling price¥1,420 mln

Property type

Healthcare facilities(private senior home)

Acquisition price¥737 mln
4.0%
March 2015

NOI cap rate after
depreciation (1)2.4%

NOI cap rate after
depreciation (2)Completion

October 2007

Completion

Note 1:The NOI cap rate after depreciation is the annualized actual NOI cap rate before depreciation in the 12th period divid ed by the planned sale prices (before taxes).
Note 2:The NOI cap rate after depreciation is the NOI using the direct capitalization method and appraisal report values minu s estimated depreciation based on engineering
reports prepared by Kenedix Real Estate Fund Management, Inc. divided by the planned acquisition price (before taxes).

■Public offering
KDR decided to conduct public offering and third-party allotment for the first time in about three and a half years
during the 13th fiscal period and newly acquired a total of 9 properties (25.4 billion yen), 4 residential facilities
and 5 healthcare facilities using the funds procured through the offerings as well as newly borrowed funds. With
the offerings and new asset acquisition, KDR’s asset size surpassed the target mark of 200 billion and KDR was
included in FTSE EPRA/NAREIT Global Real Estate Index due to the increase in its market capitalization. The
offerings were extremely significant as a culmination of a series of measures starting from the merger with Japan
Senior Living Investment Corporation, which KDR implemented with the aim of enhancing its position in the JREIT market and maximizing unitholder value.

Highlight■ First public offering after the merger■ Issued a total of 86,205 new investment units including those issued by way of third-party allotment,
procuring approximately 13 billion yen■ Strong demand far surpassing the number of units offered due to support from a broad range of investors■ Acquired 9 new properties using the proceeds and 12.7 billion yen of new borrowings■ KDR’s asset size surpassed 200 billion yen■ Became the first J-REIT to acquire Nursing and health facilities■ Size of healthcare assets has grown to one of the largest among J-REITs

Residential
facilities (1)Healthcare
facilities
Total

Properties
Asset size
Properties
Asset size
Properties
Asset size

Public offering(PO)PO-fundedpurchases
4¥13.8 bln5
¥11.6 bln

Asset reshuffle

At KDR-JSL
merger

13th period sales

115¥164.1 bln
14¥28.9 bln
129
¥193.1 bln

1¥1.0 bln1¥1.0 bln

13th period
purchases
1¥0.7 bln

10¥26.2 bln

After the PO
118¥176.9 bln
20¥41.3 bln
138
¥218.3 bln(Note ): Properties and assets of “Residential Facilities” in the above table include one property which is on land with leasehold interests.

Newly Acquired Properties
Residential Facilities
Daily life convenience

4 rental residential properties selected with focus on “attractive power of land”
Jigurai

Small family

KDX Residence Hiyoshi
Yokohama-shi, Kanagawa

KDX Residence Asagaya
Suginami-k, Tokyo

Healthcare Facilities

FamilyJiguraiSingleJigurai

SereniteKobeMotomachi
Kobe-shi, Hyogo

FamilyKDX Residence Shukugawa Hills
Nishinomiya-shi, Hyogo

The first J-REIT to make an investment in 5 nursing and health facilities.

Nursing andhealth facility

Nursing and healthfacility

Nursing and health facility

Nursing and health facility

AnesisTeradacho

Rococo-riha

Orage Suma

Osaka-shi
Osaka

Toyonaka-shi
Osaka

Kobe-shi Hyogo

Canadian Hill
Kobe-shi Hyogo

Nursing and health facility

AnesisHyogo
Kobe-shi Hyogo

■Measures for More Growth
In order to further expand the asset size, KDR established a bridge fund comprised of 2 healthcare facilities in July 2018
and acquired preferential negotiation rights for acquisition of the 2 properties. In addition, KDR has also acquired
preferential negotiation rights for acquisition of 1 healthcare property owned by Kenedix, Inc., the sponsor.
Furthermore, since external growth through investment in healthcare facilities is believed to remain highly probablegoing forward, KDR revised the target investment ratio (based on acquisition price) for healthcare facilities set forth in
the Management Guidelines of the Asset Management Company from “20% or less” to “30% or less” in order to realize
sustainable growth through flexible and agile real estate investment. The target investment ratio for residential facilities
such as rental residential properties remains as “at least 60%” and KDR intends to continue building a portfolio centering
on residential facilities going forward.
Pipe line (Preferential Negotiation Rights)
Owned by sponsor

Tsukui Sunshine Machida
East building / West building

Location

Machida-shi, Tokyo

Property type

Revision to Management Guidelines (Change in target ratio)

bridge fund

Serabi Ebisu

AruteIshiyagawa

Meguro-ku, Tokyo Kobe-shi, Hyogo

Private senior home with nursing
Private senior Private senior homecarehome with nursing with nursing care
care

Use

Current
Investment Ratio

Target Investment Ratio for
the Management Guideline

Residential Facilities

80.2%

At least 60%

Healthcare
Facilities

19.0%

Accommodations
Other

20% or less

30% or less-

20% or less

0.8%

10% or less

KDR will continue to aim for an increase in unitholder value by “expanding asset size,” “increasing market capitalization” and“maintaining and increasing DPU.”
As to “expansion of asset size,” KDR aims to achieve an asset size of 300 billion yen by 2022 by conducting selective
investment and asset replacement. As to “increase in market capitalization,” KDR is aiming for a market capitalization of 200
billion yen by 2022 through the continuous conducting of public offerings in the future.
Concerning “maintenance and increase of DPU,” KDR is aiming for DPU of 4,000 yen by 2022 through seeking external growth,internal growth, reduction of financial costs and such. In addition, KDR aims to increase distribution through use of gain onsale of properties accompanying strategic asset reshuffling.
Furthermore, by flexibly reversing and utilizing 2.13 billion yen (as of July 31, 2018) of internal reserve gained on negative
goodwill, etc. upon the merger, KDR intends to maintain the DPU level at 3,700 yen for the 14th fiscal period onward (Note).
(Note) The amount of payment of the final distribution for each period is determined based on the approval of KDR's Board of Directors.

Utilize for leveling of increase of distributions through gain on sale

Trend of DPU

4,026 yen
Gain on sale
383 yen3,473 yen

Utilize for maintaining DPU of 3,700 yen per period

3,852 yen
Effect of fixed asset and city
planning taxes
113 yen3,753 yen

3,739yen

3,700 yen

3,643yen

TargetJan. 2018(12th)

Jul. 2018(13th)

Jan. 2019

Jul. 2019(14th)(Forecast)(15th)(Forecast)(Note)Figures for the 12th fiscal period take into account the investment unit split.

Aims for DPU growth
4,000 yen by 2022
(Stabilized DPU)

External growth
KDR has seen steady external growth since the listing in 2012 through utilization of the Asset Management
Company’s own network and sponsor support. Upon property acquisition, KDR selectively invests in properties
where solid demand from tenants or users as well as stable revenue can be expected over the long term, basedon regional analysis and individual analysis considering characteristics, locations, etc. of properties。
Properties acquired in the 14th fiscal period
R-45

Jigurai
FamilyKDX Residence Shukugawa Hills

Large-scale residence located in Shukugawa area where luxury
residential area

Acquisition Date

Aug 2, 2018

Acquisition price¥6.88 bln

Appraisal value
Location
Site area¥7.30 bln
Nishinomiya-shi, Hyogo
13,537.12㎡

Total floor area

25,932.97㎡

Leasable number of units

239 units

PM company

Haseko Livenet Inc.

夙川幼稚園
セブン - イレブン

いかりスーパーマーケット
松生公園

KDX Residence Shukugawa Hills

ハギ

夙川公園
（日本さくら名所100選）の木津山公園

にこにこ桜保育園

夙川小
神戸海星女子学院マリア幼稚園

三井住友銀行
阪急夙川駅

T-79

Daily life convenience
Small Family

KDX Residence Asagaya

Located in rare area nearby “Asagaya” Station where is famous as a residential area

杉並第一小

河北総合病院

イトーヨーカドー

西友
三菱 UFJ 銀行

Acquisition Date

Aug 2, 2018

Acquisition price¥1.93 bln

Appraisal value¥2.10 bln

Location

Suginami-ku, Tokyo

Site area

822.00㎡

Total floor area

2,337.01㎡

Leasable number of units

44 units

PM company

Tokyu Housing Lease Corporation

アコレ

セブン - イレブン
TSUTAYA
三井住友銀行KDX Residence Asagaya

ファミリーマート

阿佐谷東保育園

ピーコックストア

杉並消防署
阿佐ヶ谷中

杉並区役所

南阿佐ケ谷駅杉並警察署

T-80

Jigurai
FamilyKDX Residence Hiyoshi

Family Residence located in a quiet residential area of Yokohama

慶應義塾大学 日
吉グラウンド慶應義塾大学 矢
上キャンパス

みずほ銀行 日吉東急アベニュー 日吉郵便局
三井住友銀行

日吉駅

TS U TAYA

Acquisition Date

Aug 2, 2018

Acquisition price¥2.63 bln

Appraisal value¥2.71 bln

Location

Yokohama-shi, Kanagawa

Site area

3,271.00㎡

Total floor area

6,390.51㎡

ローソン
港北消防署
日吉消防出張所

92 units

PM company

R.A. Asset Management Inc.

慶應義塾高

ファミリーマート
諏訪神社

まいばすけっと

日吉の丘公園日大高校入口マツモトキヨシ日吉慶友クリニック

ジョナサン

ローソン

ドン・キホーテ

R-44

アウディ日吉北綱島

KDX Residence Hiyoshi

ファミリーマート

日吉ローンテニスクラブ
第 2 コート

JiguraiSingleSerenite Kobe Motomachi

Residences for singles who enjoy history and shopping

三宮駅
三宮駅 三ノ宮駅
神戸三宮駅

神戸三宮駅
そごう

相楽園

Acquisition Date

日吉こども園

まいばすけっと くっくおさんぽ 保
育園
日吉ローン 横浜日吉七郵便局 テニスクラブ

日大高

日吉南小

Leasable number of units

慶應義塾大学 日
吉キャンパス

日吉台小

Aug 2, 2018

三宮･花時計前駅

兵庫県庁

県庁前駅

Acquisition price¥2.39 bln

Appraisal value¥2.55 bln

Location

Kobe-shi, Hyogo

Site area

639.91㎡

Total floor area

4,134.91㎡

神戸生田中

兵 庫 県 警 察 本部

神戸市役所

元町駅

旧居留地･大丸前駅
三菱UFJ銀行

神 戸 元 町 郵 便局
大丸

神戸中華街

東遊園地

南京町
セブン - イレブン
神 戸 市 立 博 物館
広 島 銀 行 フ ァ ミ リ ー マート セ ブ ン

花隈駅- イレブン

みなと元町駅

京橋 IC

Serenite Kobe Motomachi
セ レ ニ テ 神 戸 元町

西元町駅
ホ テ ル オ ー クラ 神戸

神 戸 港 震災
メ モ リ ア ル パー ク

Leasable number of units

138 units

PM company

Haseko Livenet Inc.

神 戸 中 央 郵 便局
神 戸 ポ ー ト タワ ー
メ リ ケ ン パ ーク
ホ ー ム セ ン ター コー ナン
神 戸 港 移 民 船乗 船記 念碑

神 戸 ハ ー バ ーラ ンド

神 戸 船 の 旅 コン チェル ト神 戸 メ リ ケ ン パー ク
オ リ エ ン タ ルホ テル

External growthH-16

Anesis Teradacho

Nursing and health facility

Rococo-riha

Complex healthcare facility
with goodaccess from
central Osaka

Canadian Hill

Orage Suma

Acquisition Date
Acquisition priceAppraisal value
Location
Site area

Aug 2, 2018¥3.49 bln
¥3.63 bln
Osaka-shi, Osaka
1983.49㎡
45 rooms/150 beds
(nursing and health facilities)
100 rooms (with nursing care)
Hakusinkai Medical Corporation

Facility scale
Operator

H-17

Nursing and health facility

Rococo-riha

Nursing andhealth facility
located in a quiet
residential andtraditional area
Acquisition Date

Aug 2, 2018

Acquisition price¥2.10 bln

Appraisal value¥2.18 bln

Location

Toyonaka-shi, Osaka

Site area

2,335.00㎡

Facility scale

52 rooms/100 beds

Operator

Hakusinkai Medical Corporation

Anesis Teradacho

Anesis Hyogo

Nursing and health facility
located at the foot of Rokko
mountain overlooking Osaka bay

Acquisition Date

Aug 2, 2018

Acquisition price¥1.83 bln

Appraisal value¥1.87 bln

Location

Kobe-shi, Hyogo

Site area

5,145.84㎡

Facility scale

40 rooms/115 beds

Operator

Hakusinkai Medical Corporation

Nursing and health facility

Orage Suma

H-18

Complex healthcare facility withgood access from
central Osaka

Acquisition Date

Aug 2, 2018

Acquisition price¥2.81 bln

Appraisal value¥2.82 bln

Location

Kobe-shi, Hyogo

Site area

3,596.79㎡
100 rooms/100 beds (Nursing and healthfacilities)
35 rooms (Serviced senior housing)
Hakusinkai Medical Corporation

Facility scale

Nursing and health facility

Canadian Hill

H-19

（Nursing and health facility）

Operator

H-20

Nursing and health facility

Anesis Hyogo

Nursing and health facility
located in a downtown area
where housing development,roads, parks etc. are underdevelopment
Acquisition Date

Aug 2, 2018

Acquisition price¥1.42 bln

Appraisal value¥1.43 bln

Location

Kobe-shi, Hyogo

Site area

4,887.51㎡

Facility scale

58 rooms/100 beds

Operator

Hakusinkai Medical Corporation

Properties acquired in the 13th fiscal period
H-15

Private senior homes (residential))

Excellent Kitano

Blessed with tourism resources, next to Kitano Tenman-gu Shrine, located in Kyoto asa town with a high residential preference since long ago

京都小松原郵便局

北野天満宮
京都市立翔鸞小学校

Excellent Kitano
京都市立衣笠小

洛星中・高

なか整形外科医院

森下歯科医院

嶋田歯科医院

京都府上京警察署

101

北野白梅町駅

京都佛立ミュージアム
高津古文化会館
大将軍八神社

Acquisition Date

Jul. 6, 2018

Acquisition price¥737 mln

Appraisal value¥783 mln

Location

Kyoto-shi, Kyoto

Site area

843.20㎡

Facility scale

41 rooms/41 pepople

Operator

Excellent Care System Co., Ltd.

Steady performance of rental housing
The occupancy rate of rental housing continued to remain high and stable. The occupancy rate for the 13th fiscal
period was 96.8%, the average occupancy rate was 97.0%. Rent for both new and renewal tenants has continued
to increase.

▼

Occupancy Rates by Area(%)
Tokyo Metropolitan Area

Total

100.0

Other Regional Areas

97.5
95.0
Ave. of 1H 2017

Ave. of 2H 2017

96.7%

96.7%

97.0%

11th Period (1H 2017)12th Period (2H 2017)13th Period (1H 2018)

90.0
Average of period

▼

5th

6th

7th

8th

9th

10th

Feb.

Mar.

Apr.

May

Jun.

Jul.

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

■ Decline

830

1,628

1,149

1,427

1,052

-2,000

Nov.

Dec.

Jan.

1,337

250

606

411

■ Increase

Mar.

Apr.

■ Decline

72

271

202

131

May.

Jun.

Jul.

Net

131

166

279

278

278

244

-641

-903

-1,217 -1,355-1,500-1,129

-924

-1

-61

-105

-885

204

142

185

141

0
-670

142

185
185

-19

-34

-250

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

Rent Increase/Decline (Renewal Tenants)

2,222
1,530

0
-1,000

Oct.

Ave. of 1H 2018

500
1,560

1,000

Sep.

（thousand yen）

Net
2,181

2,000

Aug.

▼

92.5

-500

Percentage of Increase/Decline of rent of new tenants(1)
-1.0%
6th

-0.9%
7th

-0.9%
8th

0.5%
9th

0.1%
10tth

1.1%
11th

0.7%
12th

Percentage of Increase/Decline of rent of renewal tenants(1)
1.4%
13th

0.2%
6th

0.1%
7th

0.1%
8th

0.2%
9th

0.2%
10th

0.1%
11th

0.1%
12th

0.1%
13th

2H 2014 1H 2015 2H 2015 1H 2016 2H 2016 1H 2017 2H 2017 1H 2018

2H 2014 1H 2015 2H 2015 1H 2016 2H 2016 1H 2017 2H 2017 1H 2018

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

Stable cash flow through Healthcare facility

4%5%6% No. of operators
NOTE Social Welfare
12 firms

9%

NM Life

20.2%

10-15 yrs

16%11%

5-10 yrs

17.9%

Occupancy Trend

Over 20 yrs

New residents

11.5%

86.7%

85.4%

Average occupancy rate
86.8%
88.4%

183

157

100

90.0%

183

116

100

70.0%

0

16.7 yrs

Trust Garden

Residents vacating
85.9%

200

Averageremaining term

9%
HITOWA Care Service

Remaining terms （Note）▼

Sawayaka Club
Community Net
Hakusinkai
Benesse Style Care
Medical Corporation
Silver Town
Excellent Care System
3%2%
28%
3%3%
Sompo Care Next

Operators▼▼

We have been operating healthcare facilities stably based on fixed-rent, long-term lease contracts concluded with each
operator while pursing diversification of operators. In addition, we have confirmed through operational status monitoring offacilities that their occupancy rates have been stable.

15-20 yrs

-100

50.4%

-200

-146

2016年6月
Jun.
2016（6ヶ月間）(6monthperiod)Nichii Carepalace

-142

-163
2016年12月
Dec. 2016（6ヶ月間）(6monthperiod)2017年6月
Jun. 2017（6ヶ月間）(6monthperiod)

-147

-161
50.0%

2017年12月
2018年6月
Dec. 2017
Jun. 2018（6ヶ月間）(6-month
period) （6ヶ月間）(6-month period)▼(Note) The breakdown of the portfolio is calculated based on acquisition price as of August 2, 2018.

Initiatives to Improve Internal Growth

Value-up renovation for strengthen competitiveness of the facilities
Agreement to length the contract term and increase in rent with the operator
Value-up renovation in common area

Revision of Contract Conditions with Value-up Renovation

Lounge▼▼Entrance

BeforeBefore
After

After

Rent

NOI 4.9%
UP

ContractTerm+10 yrs

Investment efficiency
5.5% (Note)
Until July 31, 2032

(Note) “Investment efficiency”= Increase price of annual cash flow / costs of value-ups

Finance and Sustainability
Stable Financial Strategy
Based on its defensive financial strategy, KDR has financial policies that contribute to financial stability, such as prolonging
the debt, diversifying the repayment date, prolonging the average remaining term of debt and reducing interest expenses.
In addition, KDR aim to maximize unitholder value through various initiatives such as fixing interest rates and diversifying
debt.

1.40%

10.0
1.19%

1.19%
1.10%

1.20%

8.0

1.08%
0.99%

1.00%
5.1

5.2
4.6

4.5

5.0

0.80%

5.3
%

6.0
4.0
2.0

0.60%

4.3
%

4.3
%

48.9

Jul. 31, 2017(11th period)

48.9

Jan. 31, 2018
(12th period)

Jul. 31, 2018
(13th period)

51.5

49.7

August 31, 2018
(After the
Refinance)

Sumitomo Mitsui Banking■ Corporation■ MUFG Bank, Ltd.

28.8%

¥118.8 bln

7.1%

12
8.5%

49.6

28.8%

26,10022.0%

10,150

8.5%

9,450

8.0%

8,400

7.1%

8,000

6.7%

6,250

5.3%

■ Limited.

5,150

4.3%

■ Mizuho Trust & Banking Co., Ltd.

5,100

4.3%

■ Insurance Inc.

1,000

0.8%

■ THE BANK OF FUKUOKA, LTD.
■ Nippon Life Insurance Company■ Investment Corporation Bonds

1,000

0.8%

1,000

0.8%

3,000

2.5%

■ Aozora Bank, Ltd.
■ Mizuho Bank, Ltd.
■ Resona Bank, Ltd.
■ Development Bank of Japan Inc.
■ Shinsei Bank, Ltd.

Sompo Japan Nipponkoa

22.0%

▼

8.5%
Credit Rating

Ratio

34,230Sumitomo Mitsui Trust Bank,

Number of
Lenders

8.0%

Amount(¥mln)

Lender

2.5%

Total amount

6.7
%

0.0
Jan. 31, 2017
(10th period)

LTV（注2）(%)

Status of Interest-bearing Liabilities (as of August 31, 2018)▼▼

Key Debt Indicators (1)118,830

Note 1: The average interest rate is calculated by using the weighted average interest rate at the end of the period and on
August 31, 2018 and includes up-front fees (per year) and the effect of interest rate swaps. The average remaining term
is calculated by using the weighted average remaining term of interest-bearing liabilities at the end of the period and on
August 31, 2018. The rate of fixed-interest is calculated by using the ratio of fixed interest rate loans to total loans at theend of the period. Fixed-rate loans include floating-rate loans with effectively fixed-rates due to interest rate swaps.
Note 2: LTV = Interest-bearing Liabilities / Total Assets.

A+(Japan Credit Rating Agency, Ltd.
(JCR))

Initiatives for Sustainability
Through investment management in real estate, KDR makes various efforts that take environment and social consideration into account.

▼▼

KDR acquired “Green Star” given to participants who make excellent efforts related to sustainability.

GRESB Real Estate Assessment

Participated in GRESB real estate evaluation since 2016, continued
participation in 2018
KDR efforts for improving sustainability were
evaluated, receiving high evaluation on both
“implementation and measurement” and“management and policy”. The Investment
Corporation also acquired two star GRESB Rating,which is calculated relative to the global
performance of reporting entities.

▼「GRESB (Global Real Estate Sustainability Benchmark) is a benchmark to evaluatesustainability performance of private and listed real estate portfolio, etc. fromenvironmental and social perspectives.

DBJ Green Building Certification(1)5 residential properties are certificated DBJ Green Building.

othersAshiya Royal Homesa

KDX Residence Toyosu
KDX Residence Hanzomon
KDX Residence Yotsuya
KDX Residence Ebisu(Note) “DBJ Green Building Certification” is a system established by Development Bankof Japan in April 2011 to support real estate that meets environmental and social
conditions.

Others
LED Lights in Common Area
Property (props)
Expense (mln yen)
Annual reduction(mln yen)

Secure Lockers for Deliveries
37
6,400
1,920

Property (props)

Outlets for recharging electric cars
110

Secure lockers for parcels eliminate the needfor delivery companies to return to aproperty when are resident is not home thefirst time. This reduces transportation CO2emissions and wasted working time fordrivers. Installing these lockers therefore
contributes to fighting climate change andsupporting economic growth, two of the U.N.
sustainable development goals.

Property (props)3

Parking areas have outlets so that
residents can easily recharge electriccars.

Information for Unitholders
As of July 31, 2018

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

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

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

13th Period
782,928 units

12th Period
349,089 units

11.7%

70.6%

12.7%

4.1% 1.0%

10.0%

70.1%

15.7%

3.7% 0.4%

IR Calendar

Investment Unit Price

As of January 31, 2018

(Note 1) Tokyo Stock Exchange REIT Index and Tokyo Stock Exchange Residential REIT Index on the announcement date of the JSL merger of November 10, 2017 are indexed as the investment unit price (closing price)of KDR on the same date.
(Note 2) Investment unit price reflect the two-for-one split of the investment units of KDR implemented with March 1, 2018 as the effective date.

Portfolio List

Tokyo Metropolitan Area

Residential Facilities

Area

Use

No.
T-1
T-3
T-4
T-5
T-6
T-7
T-9
T- 10
T- 11
T- 12
T- 13
T- 15
T- 16
T- 17
T- 18
T- 19
T- 20
T- 21
T- 22
T- 23
T- 24
T- 25
T- 26
T- 27
T- 28
T- 29
T- 30
T- 31
T- 32
T- 33
T- 34
T- 35
T- 36
T- 37
T- 38
T- 39
T- 40
T- 41
T- 42
T- 43
T- 44
T- 45
T- 46
T- 47
T- 48
T- 49
T- 50
T- 51
T- 52
T- 53
T- 54
T- 55
T- 56
T- 57
T- 58
T- 59
T- 60
T- 61
T- 62
T- 63
T- 64

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

Location

Completion Date

Type (Note 1)

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

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

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

AcquisitionPrice(mln yen)

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

Occupancy
Rate (Note 2)
(%)

100.0
96.1
100.0
97.6
90.7
95.1
－
94.3
93.4
96.6
97.6
98.9
95.8
96.7
98.3
97.7
95.6
97.6
100.0
100.0
100.0
100.0
95.0
100.0
91.5
100.0
100.0
97.8
100.0
100.0
100.0
100.0
97.3
91.7
94.5
97.5
100.0
98.4
100.0
96.8
100.0
94.2
94.7
100.0
96.9
100.0
100.0
92.8
100.0
99.1
95.7
98.1
97.3
100.0
95.8
100.0
93.2
90.9
100.0
95.4
98.4

Area

Use

No.

Tokyo Metropolitan Area

T- 65
T- 66
T- 67
T- 68
T- 69
T- 70
T- 71
T- 72
T- 73
T- 74
T- 75
T- 76
T- 77
T- 78
T- 79
T- 80

Residential Facilities
Other Regional Areas

R-2
R-3
R-4
R-5
R-7
R-8
R-9
R-10
R-11
R-13
R-14
R-15
R-16
R-17
R-18
R-19
R-20
R-21
R-22
R-23
R-24
R-25
R-26
R-27
R-28
R-29
R-30
R-32
R-33
R-34
R-35
R-36
R-37
R-38
R-39
R-40
R-41
R-42
R-43
R-44
R-45

Name

Lacation

Sumida-ku, Tokyo
Minato-ku, Tokyo
Chiyoda-ku, Tokyo
Shibuya-ku, Tokyo
Ota-ku, Tokyo
Minato-ku,Tokyo
Minato-ku,Tokyo
Shinjuku-ku, Tokyo
Bunkyo-ku, Tokyo
Nerima-ku, Tokyo
Toshima-ku, Tokyo
Suginami-ku, Tokyo
Sumida-ku, Tokyo
Koto-ku, Tokyo
Suginami-ku,Tokyo
Yokohana-shi,
Kanagawa
Residential Facilities / Tokyo Metropolitan Area 77 props
Sendai-shi, Miyagi
KDX Jozenji Dori Residence
Nagoya-shi, Aichi
KDX Izumi Residence
Nagoya-shi, Aichi
KDX Chihaya Residence
Osaka-shi, Osaka
KDX Sakaisuji Hommachi Residence
Takarazuka-shi, Hyogo
KDX Takarazuka Residence
Fukuoka-shi, Fukuoka
KDX Shimizu Residence
Sapporo-shi, Hokkaido
KDX Residence Odori Koen
Sapporo-shi, Hokkaido
KDX Residence Kikusui Yojo
Sapporo-shi, Hokkaido
KDX Residence Toyohira Koen
Sendai-shi, Miyagi
KDX Residence Ichiban-cho
Sendai-shi, Miyagi
KDX Residence Kotodai
Sendai-shi, Miyagi
KDX Residence Izumi Chuo
Nagoya-shi, Aichi
KDX Residence Higashi-sakura I
Nagoya-shi, Aichi
KDX Residence Higashi-sakura II
Nagoya-shi, Aichi
KDX Residence Jingumae
Kyoto-shi, Kyoto
KDX Residence Nishi-oji
Kyoto-shi, Kyoto
KDX Residence Saiin
Osaka-shi, Osaka
KDX Residence Namba
Osaka-shi, Osaka
KDX Residence Namba-minami
Osaka-shi, Osaka
KDX Residence Shin-osaka
Ibaraki-shi, Osaka
KDX Residence Ibaraki I・IIKDX Residence Morishita Chitose
KDX Residence Akasaka
KDX Residence Kanda
KDX Residence Ebisu
KDX Residence Nishi-magome
KDX Residence Nishi-azabu
KDX Residence Azabu Sendaizaka
KDX Residence Waseda Tsurumaki
KDX Residence Bunkyo Yushima
KDX Residence Kamishakujii
KDX Residence Shin-otsuka
KDX Residence Sakurajosui
KDX Residence Ryogoku
KDX Residence Toyosu
KDX Residence Asagaya
KDX Residence Hiyoshi

Toyonaka-shi, Osaka
Moriguchi-shi, Osaka
Kobe-shi, Hyogo
Ashiya-shi, Hyogo
Hiroshima-shi,
KDX Residence Funairi Saiwai-cho
Hiroshima
Fukuoka-shi, Fukuoka
KDX Residence Tenjin-higashi II
Fukuoka-shi, Fukuoka
KDX Residence Nishi Koen
Fukuoka-shi, Fukuoka
KDX Residence Hirao Josui-machi
Hirakata-shi, Osaka
Melody Heim Gotenyama
Nagoya-shi, Aichi
Leopalace Flat Shin-sakae
Kobe-shi, Hyogo
KDX Residence Konan Yamate
Osaka-shi, Osaka
KDX Residence Hommachibashi
Kusatsu-shi, Shiga
KDX Residence Minami-kusatsu
Fukuoka-shi, Fukuoka
KDX Residence Ohori Harbor View Tower
Sapporo-shi, Hokkaido
KDX Residence Minami-sanjo
Osaka-shi, Osaka
Serenite Kita-kyuhoji
Nishinomiya-shi, Hyogo
Serenite Nishinomiya Hommachi
Fukuoka-shi, Fukuoka
KDX Residence Nishijin
Kobe-shi, Hyogo
Serenite Kobe Motomachi
Nishinomiya-shi,Hyogo
KDX Residence Shukugawa Hills
Residential Facilities / Other Regional Areas 41 props
Residential Facilities 118 props
KDX Residence Toyonaka-minami
KDX Residence Moriguchi
KDX Residence Sannomiya
Ashiya Royal Homes

Completion Date

Type (Note 1)

Acquisition
Price

Jan. 9, 2007
Dec. 12, 2014
Feb. 6, 2015
Sep. 15, 2015
Jul. 12, 2016
Feb. 20, 2008
Oct. 6, 2006
Aug. 6, 2007
Jan. 23, 2006
Jun. 26, 2007
Feb. 5, 2016
Sep. 13, 2016
Feb. 3, 2016
Jul. 7, 2017
Feb. 29, 2000
Sep. 30, 1996

StudioSmall family
Small family
Small family
StudioSmall family
StudioStudioStudioStudioStudioStudioStudioStudioSmall family
Family

1,100
1,150
700
2,845
1,130
1,224
792
561
695
648
764
894
842
7,500
1,930
2,635

98.7
100.0
100.0
100.0
100.0
96.9
96.2
97.6
97.8
97.9
100.0
100.0
100.0
100.0
－
－

Total / Ave.
StudioFamilySmall family
Small family
FamilySmall family
Small family
Small family
Small family
Small family
Small family
Small family
Small family
Small family
Small family
StudioStudioStudioStudioSmall family

119,346
1,015
1,120
1,080
2,910
1,510
1,680
765
830
445
530
520
480
2,350
900
840
813
440
1,410
1,350
510

97.7
97.0
92.1
95.1
98.5
96.4
96.7
100.0
90.3
95.2
92.4
88.9
95.8
90.4
89.5
96.9
100.0
96.1
95.5
97.3
100.0

Jan. 15, 2008
Apr. 7, 2009
Jul. 28, 2009
Oct. 25, 2007
Feb. 29, 2008
May 2, 2008
Jan. 4, 2007
Feb. 22, 2007
Feb. 17, 2007
Apr. 26, 2007
Oct. 7, 2006
Mar. 1, 2007
Jan. 21, 2008
Mar. 2, 2006
Feb. 14, 2007
Mar. 12, 2007
Jul. 4, 2006
Jul. 12, 2006
Apr. 27, 2007
Feb. 17, 2007
May 27, 1991
Mar. 17, 1993
Mar. 5, 2007
Oct. 26, 2006
Jan. 10, 2007
Jun. 5, 1991
Jan. 30, 2007
May 7, 2007
Feb. 2, 2006
Oct. 18, 2005
Jul. 14, 1989
Nov. 15, 2004
Mar. 6, 2008
Feb. 28, 2007
Mar. 4, 2008
Feb. 17, 2009
Dec. 14, 2010
Jul. 10, 2015
Feb. 24, 2016
Apr. 30, 1996
Feb. 19, 2017
Aug. 26, 1998

(mln yen)Occupancy
Rate (Note 2)(%)

Family

1,275

100.0

Small family
FamilyStudioFamilyStudio

740
551
1,080
1,360
588

95.8
96.5
98.3
100.0
98.4

Small family
FamilyFamilyFamilyStudioSmall family
Small family
StudioSmall family
Small family
StudioStudioSmall family
SingleFamilyTotal / Ave.
Total / Ave.

680
763
760
400
3,500
973
3,201
1,974
4,606
915
1,290
617
1,600
2,390
6,884
57.647
176,994

95.2
94.9
100.0
94.5
100.0
97.4
98.9
100.0
90.5
92.3
98.7
88.7
89.5
－
－
95.8
96.8

Portfolio List
Use

No.

Name

Location

ActualAcquisition Price Occupancy(mln yen)
Rate (Note 3)

Completion Date

Type（Note 8）

Jun. 8, 2007
Jun. 25, 1992
Oct. 31, 1995
Nov. 15, 2011
Mar. 19, 1992
Sep. 5, 2007
May 9, 2014
Jan. 28, 2015
Sep. 30, 2011
Jul. 15, 1987
Mar. 3, 2010
Jul. 18, 2014
Feb. 8, 2010
Mar. 23, 2007
Mar.1, 2015
Dec. 31, 2010
Apr. 19, 2011
Sep. 14, 2010
Jan. 15, 2002
Sep. 12, 2005

Nursing Care
Nursing Care
Nursing Care
Residential
Nursing Care
Nursing Care
Residential
Residential
Nursing Care
Nursing Care
Nursing Care
Residential
Nursing Care
Serviced housing
Residential
Nursing and health facility
Nursing and health facility
Nursing and health facility
Nursing and health facility
Nursing and health facility(%)

Healthcare Facilities

H-1
H-2
H-3
H-4
H-5
H-6
H-7
H-8
H-9
H - 10H - 11H - 12H - 13H - 14H - 15H - 16H - 17H - 18H - 19H - 20Ota-ku, Tokyo
Irise Kamata/Yuseien
Nakano-ku, Tokyo
Nichii Home Nakano-Minamidai
Hachioji-shi, Tokyo
Joy Stage HachiojiTama-shi, Tokyo
Yuimaru Hijirigaoka
Kawasaki-shi, Kanagawa
Nichii Home Tama Plaza
Sapporo-shi, Hokkaido
Ten
Sapporo-shi, Hokkaido
Irise Nishioka
Eniwa-shi, Hokkaido
Joy Stage Hachioji
Akita-shi, Akita
Sawayaka Sakura Nibankan
Otsu-shi, Shiga
Activa Biwa
Kobe-shi, Hyogo
Sompo Care LAVIERE Kobe Tarumi
Nishinomiya-shi, Hyogo
Granda Mondo Yakujin
Nishinomiya-shi, Hyogo
Excellent Nishinomiya
Kamikita-gun, Aomori
Gran Hills Ogawarako
Kyoto-shi, Kyoto
Excellent Kitano
Osaka-shi, Osaka
Anesis Teradacho
Toyonaka-shi, Osaka
Rococo-riha
Kobe-shi, Hyogo
Orage Suma
Kobe-shi, Hyogo
Canadian Hill
Kobe-shi, Hyogo
Anesis Hyogo
Healthcare Facilities 20 props
Total 138 props

Total

1,120
1,780
3,690
1,120
2,940
2,630
858
1,660
989
6,560
2,110
1,190
971
1,380
737
3,490
2,100
2,810
1,830
1,420
41,385
218,379

95.8
75.9
90.9
100.0
70.8
87.1
89.2
91.8
100.0
87.0
95.0
N/A
100.0
100.0
97.6
—
—
—
—
—
—

(Note 1) Type means principal room type of the property (If applicable to some types, type of the largest footprint unit). Si ngle (intended primarily for single-person households)[footprint of equal or more than 18m2 and less than 30m2 and more than 20 rentable units per property ］, Small Family : (intended primarily for households of couples or families
with infants) [footprint of equal or more than 30m2 and less than 60m2 and more than 15 rentable units per property, Family (intended primarily for households of three or morefamilies) [footprint of equal or more than 60m2 and more than 5 rentable units per property](Note 2) “Occupancy Rate” is as of end of July 2018.
(Note 3) “Actual Occupancy Rate” = Number of residents / number of rooms on June 2018. “Actual Occupancy Rate” is based on do cuments from operators but that of “Granda Mondo
Yakujin” isn’t disclosed because KDR isn’t admitted to disclose from the operator. If “Actual Occupancy Rate” is over 100.0% by cal culation, it is written as 100.0%.
(Note 4) The property name has been changed from “Bereau Kagurazaka “ on February 5, 2018.
(Note 5) The property name has been changed from “Alpha Eniwa Sta. Nishiguchi Saikaihatsu Building“ on April 1, 2018. 2018
(Note 6) T-9 ”Cosmo Heim Motosumiyoshi (Land)” is classified as “Other”, but in the above list, ”Cosmo Heim Motosumiyoshi (Land)” is included in residential facility.
(Note 7) The list above shows the assets held as of August 2, 2018.
(Note 8) If there are multiple facility types, the main facility types are listed.

Main properties

Jigurai

Daily life convenience

Residential Facilities
T-78

KDX Residence Toyosu

T-1

KDX Daikanyama Residence

T-52

T-56

R-39

KDX Residence Togoshi

KDX Residence Hanzomon

KDX Residence Ohori
Harbor View Tower

Residential Facilities
H-10

KDX Residence Toyosu

H-3

Joy Stage Hachioji

H-5

H-11

Nichii Home Tama Plaza

Sompo Care LAVIERE
Kobe Tarumi

H-6

Ten

Overview of Portfolio
Use (1)Other 0.8%
(1 prop)

7

Healthcare
Facilities

2

19.0%

4

(20 props)
Osaka Metropolitan
Area

Residential
Facilities

30

80.2%

1

(117 props)

82

6

6
Tokyo Metropolitan Area

Residential Facilities
Area (1)Healthcare Facilities
Area (1)Others3.3％
Other Regional Area (7)Other
Regional Areas (4)Tokyo Central
8 Wards (2)

32.9%

14.8%

Tokyo
Metropolitan Area (3)

25.7%

37.1%

Greater Osaka Area(5)Tokyo
23 Wards

Other
Tokyo Metropolitan Area

56.1%

22.2%

7.7%

Tokyo Metropolitan
Area
67.1%(3)Use (1)Room type (1)Nursing and health facilities

Family23.6%

Single

28.2%

37.6%
Small Family

38.8%

Three Major
Metropolitan Area
81.8%(6)

Private senior homes(with nursing care)

55.1%
Serviced senior
housing
Private senior homes
3.3% (residential)

13.4%(Note 1) Portfolio breakdown describes the ratio by acquisition price as of March 1, 2018. Acquisition price refers to the pre-tax price that does not include the expenses spenton the acquisition of properties.
(Note 2) “Tokyo Central 8 Wards” include Minato-ku, Shibuya-ku, Chuo-ku, Chiyoda-ku, Shinjuku-ku, Meguro-ku, Setagaya-ku and Shinagawa-ku.
(Note 3) “Tokyo Metropolitan Area” includes Tokyo, Kanagawa, Saitama and Chiba.
(Note 4) “Other Regional Areas” include government-designed municipalities and other regional cities.
(Note 5) “Greater Osaka Area” includes Osaka, Kyoto, Nara, Hyogo and Shiga.
(Note 6) “Three Major Metropolitan Areas” include “Tokyo Metropolitan Area”, “Greater Osaka Area” and “Greater Nagoya Area.”(Note 7) “Other Regional Areas” include other regional cities excluding “Three Major Metropolitan Areas”.
(Note 8) Percentages are rounded to the first decimal point.

Unitholders’ benefit programs

Seikatsu Kagaku Un-Ei Co., Ltd.
Benefits
Eligible Person

Facilities Available
The Number of Facilities
Area

・Same-day facility site-visit(with lunch) free of charge

Sompo Care Inc.
Benefits

Unitholder and his / her spouses and his / herrelatives (up to the second degree)
All of the private senior homes (with nursingcare) operated by Seikatsu Kagaku Un-Ei Co.,
Ltd. as of July 31,2018.
26

Ⅱ. Private senior homes (with nursing care) for Sompo Care Sompo no ie,
Sompo no ie S, Sompo no ie GH, the private senior homes (with nursingcare) 、Serviced housing for the elderly, Group homes
・3% discount on monthly rent equivalent(Until the contract ends)
・Same-day facility site-visit(with lunch) free of charge(Only applicable to SOMPO no ie)Tokyo, Saitama, Kanagawa,Chiba, Shizuoka, Aichi, Kyoto, Hyogo, Osaka

Contact No.

+81-120-580-731

Homepage

http://www.seikatsu-kagaku.co.jp/

Ⅰ. Sompo Care LAVIERE・≪ On the condition of advance payment≫
3% discount on one-time payment for resident・≪On the condition of monthly payment≫
3% discount on monthly rent equivalent(Until the contract ends)
・Same-day facility site-visit (with lunch)free of charge

Eligible Person

Unitholder and his / her spouses and his / her relatives (up to the second
degree)Ⅰ. Sompo Care LAVIERE operated by Sompo Care Inc as of July 31,2018.
Facilities Available (Excluding short-term use)
Ⅱ. All of the private senior homes (with nursing care) for Sompo Care
Sompo no ie, Sompo no ie S, Sompo no ie GHthe private senior homes (withnursing care) 、Serviced senior housing, Group homes
operated by Sompo Care Inc. as of July 31,2018.
(Excluding the facilities for short-term use, franchise contractor, business
partner, the operator other that Sompo care Inc.)CENTURY LIFE CORPORATION
Benefits

・Same-day facility site-visit(with lunch) free ofchargeEligible Person

Unitholder and his / her spouses and his / herrelatives (up to the second degree)

Facilities Available

The Number of Facilities
Area

All the private senior homes (with nursingcare) and Serviced senior Housing operatedby CENTURY LIFE CORPORATION as of July
31,2018.

Area

10

424
Hokkaido, Akita, Miyagi, Saitama, Chiba, Tokyo
Kanagawa, Yamanashi, Shizuoka, Aichi, Mie, Kyoto, Osaka, Hyogo, Nara,
Okayama, Hiroshima, Kagawa, Fukuoka, Kumamoto

Tokyo, Saitama, Chiba, Kanagawa, Osaka

Contact No.

+81-120-580-731

Homepage

http://www.centurylife.co.jp/

LIXIL SENIOR LIFE COMPANY
Benefits

The Number ofFacilities

Contact No.

+81-120-155-703

Homepagehttps://www.sompocare.com/

HITOWA Care Service Co., Ltd.
≪On the condition of advance payment≫

Benefits

・Discount on one-time payment for・Same-day facility site-visit(with lunch) free of charge
・Discount on usage charge for two-month equivalent

resident ( ¥ 300,000 discount)・Trial residence free of charge(1-night, 2-day stay, with dinner

Eligible Person

and breakfast)※A resident of the requested healthcare facility is ineligible and use ofanother company's introduction system is unavailable as well.

・Same-day facility site-visit(with lunch) free of charge
Eligible Person

Facilities Available

The Number of Facilities
Area

Unitholder and his / her spouses and his / herrelatives (up to the second degree)

Facilities Available

All of Private senior homes (with nursingcare)and apartment for the elderly
operated by LIXIL SENIOR LIFE COMPANY
as of July 31,2018.

The Number ofFacilities
Area

5
Tokyo, Fukuoka

Contact No.

+81-120-1165-97

Homepagehttps://www.jsgsl.co.jp/

Unitholder and his / her spouses and his / her relatives (up to the second
degree)All of the private senior homes (with nursing care) operated by HITOWA
Care Service Co., Ltd as of July 31,2018.

99
Hokkaido, Miyagi, Saitama, Chiba, Tokyo, Kanagawa, Nagano, Hyogo,
Okinawa

Contact No.

+81-120-12-2943

Homepage

http://www.irs.jp/

Nichii Carepalace Company
Benefits

・Same-day facility site-visit

NM LIFE Co., Ltd.
Benefits

・Discount on one-time payment for resident (¥ 200,000
discount)
・Trial residence free of charge, up to three times (1-night, 2day stay, with dinner and breakfast)・Same-day facility sitevisit(with lunch) free of charge (up to three times)

Eligible Person

Unitholder and his / her spouses and his / her relatives (upto the second degree)(with lunch) free of charge
・Trial residence free of charge(1-night, 2-day stay, with dinner,lunch and breakfast)
Eligible Person

Unitholder and his / her spouses and his / her relatives (up to thesecond degree)

All of the private senior homes (with nursing care) operated by
Facilities Available Nichii Carepalace Company as of July 31,2018.
The Number ofFacilities
Area

73
Tokyo, Saitama, Chiba, Kanagawa, Shizuoka

Facilities Available
The Number ofFacilities
Area

Joy Stage Hachioji

1
Tokyo

Contact No.

+81-120-555-800

Contact No.

+81-120-38-0161

Homepage

http://www.nichii-carepalace.co.jp/

Homepage

http://www.joystage.com/

Sawayaka Club Corporation
Benefits

・10% discount on usage charge for first month・Trial residence free of charge (1-night, 2-day stay, with dinner andbreakfast)・Same-day facility site-visit(with lunch) free of charge

Eligible Person

Facilities Available
The Number ofFacilities
Area

Unitholder and his / her spouses and his / her relatives (up to thesecond degree)
All of the private senior homes (with nursing care) operated by
Sawayaka Club Corporation as of July 31,2018.
68
Saitama, Chiba, Kanagawa, Niigata, Shizuoka, Aichi, Mie, Kyoto,
Osaka, Hyogo, Ehime, Wakayama, Fukuoka, Oita

Contact No.

+81-120-958-490

Homepage

http://www.sawayakaclub.jp/

Excellent Care System Co., Ltd.
Benefits

Eligible Person

・10% discount on usage charge
for first month・ Trial residence free of charge(1-night, 2-day stay, with dinnerand breakfast)・Same-day facility site-visit(with lunch) free of charge
Unitholder and his / her spouses and his / her relatives (up to thesecond degree)
All of the private senior homes (with nursing care) operated by

Facilities Available Excellent Care System Co., Ltd. as of July 31,2018.
The Number ofFacilities
Area

15
Tokyo, Kanagawa, Kyoto, Hyogo, Tokushima

Contact No.

+81-42-538-1165

Homepage

http://www.excare.co.jp/(Note1) A resident of the requested healthcare facility is ineligible .
(Note2) The are and the number of facilities are as of July 31, 2018.
(Note3) There may be restrictions on trial residence due to the operating
condition of operators.
(Note 4) In the case of private senior homes (with nursing care), those
who are not required for nursing care may not be able to use this
Unitholder Benefits Program .
(Note 5) It may be necessary to consult with care manager and Medical
checkup before trial residence.

Unitholders’ benefit programs
Through the utilization of the Unitholder Benefit Program, KDR hope that the unitholders and their families will be able torealize healthy longevity.

General Outline of the Unitholder Benefit Program
1.Eligible Unitholder

Unitholders stated or recorded on the unitholders’ register of the Investment Corporation as ofJuly 31, 2018 will be eligible for the unitholder benefit program.

2 Contents

Unitholders owing more than 1 unit will be entitled to the benefits as described previous page.

3 .Method for the Useof Benefits

Please present Semi-annual Report for the fiscal period ending July 2018 (13th fiscal
period) and the paper setting forth the name, address, etc. of the unitholder, which is
enclosed in the Semi-annual Report, to the healthcare facility.

4 .Validity Period

April 30, 2019

Q&A

About Benefit
programQ

At which facilities will I be eligible for benefit programs?

A

Facilities offering programs are shown on the list, but applicable facility types vary depending oneach operator. Please call the operator to find out which facilities offer benefit programs.

Q How can I check the details of benefit programs?

A

Details of benefit programs vary depending on each operator. Moreover, there may besome restrictions to benefit programs due to the operational status of facilities and such.
Please call the operator to find out the details of the benefit programs.

Q

What are the procedures required to use the program?

A

Please call and tell the operator that you wish to use the “Unitholder Benefit
Program.” You will be provided with detailed information on necessary procedures.

Q

What do I need to bring when using the program?

How to use

A

Q

A

Please bring the document enclosed with this Semi-annual Report affixed with youraddress, name and other information. Some operators or facilities may require
additional confirmation documents. Please confirm the details with the relevant
operator.
Can I go directly to a facility when I want to see the facility or do a trial residence?
If you visit a facility without prior notice, they may not be able to respond to your request
depending on the operational status or vacancy status. Please call the operator in advanceand receive instructions before a visit.

II. Asset management report
1. Outline of asset management operation(1)
Operating result and financial position
9th
Fiscal period

Unit

10th

11th

12th

13th

From Feb. 1, 2016 From Aug. 1, 2016 From Feb. 1, 2017 From Aug. 1, 2017 From Feb. 1, 2018
to Jul. 31, 201 6 to Jan. 31, 2017

to Jul. 31, 201 7 to Jan. 31, 2018

to Jul. 31, 2018

Operating result

Operating revenues

mil.yen

5,333

5,468

5,574

5,681

7,097

(Rental revenues)

mil.yen

5,329

5,437

5,574

5,671

6,655

Operating expenses

mil.yen

2,610

2,629

2,741

2,791

3,657

mil.yen

2,032

2,050

2,124

2,107

2,554

Operating income

mil.yen

2,723

2,838

2,833

2,889

3,439

Ordinary income

mil.yen

2,193

2,311

2,316

2,353

2,842

Net income

mil.yen

2,192

2,310

2,315

2,352

5,416

Total asset

mil.yen

159,948

167,276

167,316

176,813

213,558%(△0.1)(＋4.6)(＋0.0)(＋5.7)(＋20.8)Interest-bearing debt

mil.yen74,80081,80081,80091,130106,130

Unitholders’ equity

mil.yen82,36582,55282,55982,65098,745%(△0.0)(＋0.2)(＋0.0)(＋0.1)(＋19.5)Unitholders’ capital

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

Total distribution

mil.yen

2,220

2,280

2,315

2,424

3,152

%

101.3

98.7

100.0

103.1

58.2

unit

349,089

349,089

349,089

349,089

782,928

Net income per unit (Note 3,4)

yen

6,279

6,617

6,632

3,369

7,036

Unitholders’ equity per unit (Note 3)

yen

235,943

236,478

236,498

118,379

126,123

Distribution per unit

yen

6,360

6,533

6,633

6,946

4,026

Profit distribution

yen

6,360

6,533

6,633

6,946

4,026

Distribution in excess of profit

yen

－

－

－

－

－

Return on assets (Note 5)

%

1.4

1.4

1.4

1.4

1.5

Annualized (Note 6)

%

2.7

2.8

2.8

2.7

2.9

%

2.7

2.8

2.8

2.8

6.0

%

5.3

5.6

5.7

5.6

12.0

51.5

49.4

49.3

46.7

46.2

(＋0.0)(△2.1)(△0.0)(△2.6)(△0.5)

%

46.8

48.9

48.9

51.5

49.7

mil.yen

3,104

3,189

3,227

3,295

6,126

yen

8,892

9,137

9,246

4,720

7,824

mil.yen

4,153

4,265

4,335

4,486

5,245

%

5.6

5.5

5.6

5.4

5.5

mil.yen

3,990

4,044

4,094

4,199

4,808

%

5.4

5.2

5.3

5.1

5.0

(Expenses related to rent business)(period to period change)Asset(period to period change)

Dividend payout ratio(Note2)
Distribution per unit

Number of investment units issued
and outstanding

Return on net assets (Note 7)
Annualized (Note 6)
Net asset ratio(period to period change)
Financial indicatorInterest-bearing debt ratio on assets(Note 8)FFO (Note 8)(Funds from Operation)
FFO per unit (Note 3,10)
Leasing NOI (Note11)(Net Operating Income)Annualized NOI yield (Note 6,12)
Leasing NCF(Note 13)(Net Cash Flow)
Annualized NCF yield (Note 6,14)%

Number of properties(Residential)

Reference

properties

105

113

113

115

129

Leased units (Note 15)

unit

6,952

7,229

7,285

7,646

7,552

Total leasable floor area (Note 15)m²

286,310.51

292,324.33

292,324.33

303,608.43

410,556.41

Occupancy ratio (Note 15)

%

95.9

96.2

96.8

97.0

97.6

Depreciation expenses

mil.yen

857

878

884

921

1,144

Capital expenditures

mil.yen

163

220

241

286

436

(Note 1)
(Note 2)

Figures are rounded down to the nearest unit. Ratios are rounded off to the two decimal place
Dividend payout ratio＝Total distribution(excluding Distribution in excess of profit)/Net income×100
Net income for 13th fiscal period include negative goodwill of 2,574 million yen.
(Note 3) KDR investment units was split 2-for-1 on the reference date as of February 28, 2018 and the effective date as of March 1, 2018. “Net income
per unit”, “Unitholders’ equity per unit “ and “FFO per unit “ are calculated subjected for KDR investment units to be split in August 1, 2017.
(Note 4) Net income per unit is calculated by the net income divided by weighted average of number of investment units(Note 5) Return on assets ＝Net income /｛(Total assets at the beginning of period + Total assets at the end of period)/2｝×100(Note 6) Annualized values for the 9th fiscal period are calculated based on a period of 182 days, 184 days for 10th fiscal period, 181 days for 11th fiscal
period, 184 days for 12th fiscal period, 181 days for 13th fiscal period.
(Note 7) Return on net assets ＝Net income / {(Total net assets at the beginning of period + Total net assets at the end of period) /2} ×100
(Note 8) Interest-bearing debt ratio of assets ＝Interest-bearing debt at the end of period / Total assets at the end of period×100(Note 9) FFO＝Net income + Depreciation expenses + Amortization of deferred assets - Gain on sale of real estate property + Loss on sale of real estate
property. Net income for 13th fiscal period include negative goodwill of 2,574 million yen.
(Note 10) FFO per unit ＝FFO／Number of investment units issued and outstanding(rounded down to the nearest ¥1)(Note 11) Leasing NOI＝Rental revenues －Expenses related to rent business＋Depreciation expenses(Note 12) Annualized NOI yield＝Annualized NOI／Total acquisition prices of properties ×100
(Note 13) Leasing NCF＝ Leasing NOI－Capital expenditures(Note 14) Annualized NCF yield ＝Annualized NCF／Total acquisition prices of properties ×100
(Note 15) Figure and ratio include for land. Excluding figure and ratio for land are as follows.
9th fiscal period
Total leasable floorarea (㎡)Occupancy ratio（％）(2)

10th fiscal period

11th fiscal period

12th fiscal period

286,310.51

292,324.33

292,324.33

303,608.43

95.9

96.2

96.8

97.0

13th fiscal period
407,516.30
97.6

Outline of asset management operation for the 13th fiscal period① Outline of the history of the Investment Corporation
Kenedix Residential Next Investment Corporation (Note 1) (“the Investment Corporation”) was established on
November 15, 2011 under the Act on Investment Trusts and Investment Corporations of Japan (“the Investment
Trust Act”). On April 26, 2012, the Investment Corporation was listed on the Real Estate Investment Trust Marketof the Tokyo Stock Exchange (Securities Code: 3278). Afterwards, the Investment Corporation issued newinvestment units through three public offerings and by way of third-party allotment. Most recently, the Investment
Corporation implemented a 2-for-1 investment unit split with March 1, 2018 as the effective date, and also at thesame time conducted an absorption type merger (“the Merger”) with the Investment Corporation as the surviving
corporation and Japan Senior Living Investment Corporation (“JSL”) as the absorbed corporation. As of the end of
the 13th fiscal period (July 31, 2018), the number of properties was 129 (total acquisition price: 192,889 million
yen (excluding silent partnership equities; the same applies hereinafter)) and the number of investment units issued
and outstanding totaled 782,928 units.
The Investment Corporation is externally managed by Kenedix Real Estate Fund Management, Inc. (the “AssetManagement Company”), a company that was formed with personnel from Kenedix, Inc. and adheres to the corephilosophies of Kenedix, Inc. As the asset manager, the Asset Management Company provides real estate investment
management services with flexibility and agility unique to a J-REIT (Note 2) sponsored by an independent realestate management company by flexibly pursing optimal investment opportunities and income opportunities andagilely investing and managing based on swift information gathering and decision-making while accurately grasping
real estate-related trends.
(Note 1) The Investment Corporation changed its name from Kenedix Residential Investment Corporation to Kenedix Residential
Next Investment Corporation on March 1, 2018.
(Note 2) "J-REIT" is an investment corporation listed on the real estate investment trust of the Tokyo Stock Exchange.

②

Operating Environment
The Japanese economy continues its gradual recovery with improvement seen in employment, income growth,and it is expected that this trend will continue. Nevertheless, many factors, including the future course of the
Bank of Japan’s policy of quantitative and qualitative monetary easing, accompanied by negative interest rates
and questions about the momentum of the recovery in the economy and prices, concerns about uncertainties
about financial condition in China, financial policy in Europe and other global economic factors, as well as
volatility in the financial markets, create an environment where caution is required.
In the rental housing market, the occupancy rates and rent levels of the rental apartment buildings in which
the Investment Corporation invests remain high. Given that metropolitan areas continue to experience
population growth while rental apartment supplies remain low, a favorable supply-demand environment is
expected for these areas in the future.
Concerning the environment surrounding healthcare facilities, with one of the longest average life
expectancies for both men and women, Japan now has a super-aging society (Note) which no other country has
ever experienced, and the “aging,” or the increase in the ratio of the elderly population against total populationand the increase in elderly population itself, is expected to continue going forward. As is responding to such
trends, the number of senior care facilities such as Private senior homes (with nursing care) and Serviced senior
housing has been on the rise in recent years. The Investment Corporation believes that demand for senior carefacilities, including nursing care facilities, will continue to increase.
We continue to see active investment activity in the real estate investment markets on the part of both Japaneseand overseas investors such as multiple transactions by foreign companies. The Bank of Japan’s aggressive
monetary easing measures and the like are expected to keep the real estate market busy; however, due to theongoing harsh property acquisition environment, expected yield is likely to remain at a low level.
(Note) “Super-aging society” refers to a society with a population aging rate (ratio of the elderly population aged 65 or overagainst total population) exceeding 21%, as defined by the World Health Organization and the United Nations.

③ Operating Results(A) Acquisition and Sale of aseets
The Investment Corporation succeeded 14 healthcare facilities (acquisition price: 28,998 million yen) from
JSL through the Merger in the 13th fiscal period. In addition, after comprehensively taking into account thecomposition of the entire portfolio, earnings power in the future, etc., the Investment Corporation sold 1
residential property (KDX Shimmachi Residence, sold price: 1,420 million yen) and acquired 1 healthcare
facility (Excellent Kitano, acquisition price: 737 million yen) at the same time. Furthermore, with the primary
purpose of flexible growth in asset size and securing additional income opportunities, the Investment
Corporation acquired a subordinated silent partnership equity (acquisition price: 110 million yen) in G.K.
Tropic Three, whose assets under management include 2 healthcare facilities. As a result of the above, as ofthe end of the 13th fiscal period, we owned a total of 129 properties (total acquisition price: 192,889 millionyen), which consist of 113 residential properties (acquisition price: 161,404 million yen), 15 healthcare
facilities (acquisition price: 29,735 million yen) and 1 other property (land with leasehold interest; acquisition
price: 1,750 million yen).
(B) Management of real estate holdings
With respect to residential, The Investment Corporation managed our real estate holdings by working witha property management company (“PM Company”) that operates and manages properties, which were selected
through a multifaceted approach of taking into consideration the region, location and city, rent range, tenant
type (corporate or individual) and other various characteristics with the aim of achieving stable and optimal
performance.
Moreover, the Investment Corporation strove to partner with leading real estate companies with a strong
local presence and bolster the PM Company’s efficient leasing activity. We also ensured that soliciting
conditions took into consideration the characteristics and occupancy levels of individual properties; carriedout efficient advertising efforts utilizing the power of the KDX Residence brand; utilized leasing agents; andimplemented flexible sales activities attuned to the characteristics of each of the properties in accordance withplans.
As a result, the portfolio for residential as a whole had an occupancy rate of 96.8% as of the end of fiscal
period (July 31, 2018). During the fiscal period, the average occupancy rate was high at 97.0% as same as theprevious fiscal period.
Specific measures that contributed to improvement in revenue at the rental business are as follows: withrespect to properties with stable and robust occupancy conditions, we strove to raise rent levels for and obtainkey money from new tenants; raise rents when leases were renewed; increase revenue associated with auxiliary
facilities; and improve the parking contract rate; and as measures to slash rental business expenses, we reduced
utility bills by switching the electricity supplier for common areas; changed the lighting in common areas toLED; and reviewed the contracts for auxiliary facilities, as well as solicitation costs, etc., in order to improveincome and expenditures.
Moreover, with the aim of maintaining and/or improving the market competitiveness of our portfolio assets,
we undertook planned major renovation work at four properties, updating work in common areas as well as
value-increasing work and facility updates at individually-owned areas.
We also continued our green efforts during the 12th fiscal period, introducing LED lighting in common areas.
Furthermore, we continued to monitor our DBJ Green Building Certification, an environmental awarenessrecognition from an external evaluator, and 5 properties obtained certification as of 13th fiscal period.
Concerning healthcare facilities, the Investment Corporation discussed and proposed value-enhancement
work of facilities helped by good relationships with operators, in addition to implementing adequate
maintenance work. Moreover, as part of operator monitoring activities, the Investment Corporation visits
facilities as necessary to check their operational status while also inquiring about business conditions, future
management policies, etc. through interviews with operation managers, etc. During the 13th fiscal period,
status succession occurred at two facilities in line with mergers of operators.
As a result of the above, the occupancy rate of healthcare facilities stood at 100.0% as of the end of the 13th
fiscal period (July 31, 2018). Furthermore, the average occupancy rate in the 13th fiscal period also marked
100.0%.

The occupancy rate for the entire portfolio including land with leasehold interest was 97.6% as of the end of
the 13th fiscal period (July 31, 2018).
(C) Financing
The Investment Corporation procures funds with the aim of medium- to long-term stable earnings andsustained growth of portfolio assets, taking into consideration the balance between financial stability andfinancing costs.
Debt Financing
The Investment Corporation succeeded borrowing for JSL of 15,000million yen and 7,130 million yen inloans as funds for repaying the borrowings for which repayment was due during the 13th fiscal period. The
outstanding debt balance as of the end of the 13th fiscal period (July 31, 2018) was 103,130 million yen.
As a result of the foregoing, the average remaining interest-bearing debt (Note 1) was 4.5 years, and theaverage interest rate at the end of the 13th fiscal period (Note 2) was 1.08%. The long-term debt ratio (Note3) came to 84.8%, the fixed interest-rate ratio (Note 4) was 95.2%, and the loan to value ratio (LTV) came to
49.7%.
(Note 1) The weighted average of the life of each interest-bearing debt in accordance with the balance of each interest-bearing debt.
(Note 2) The average interest rate of each interest-bearing debt was calculated taking into account the upfront fee (per annum) and interest rate
swaps, etc., and the weighted average was calculated in accordance with the balance of each interest-bearing debt.
(Note 3) The average interest rate of each interest-bearing debt was calculated taking into account the upfront fee (per annum) and interest rate
swaps, etc., and the weighted average was calculated in accordance with the balance of each interest-bearing debt.
(Note 4) The fixed interest-rate ratio = (balance of fixed interest-ratio borrowings (including borrowings for which interest rates aresubstantially fixed through interest rate swap transactions, etc.) + balance of investment corporation bonds) ÷ (balance of borrowings+ balance of investment corporation bonds)

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

Type

RatingLong-term issuer rating

A+ (Outlook : Stable)

Bond rating

A+

Japan Credit Rating Agency, Ltd.(JCR)

Shelf Registration
The Investment Corporation filed a shelf registration statement regarding investment corporation bonds(excluding short-term investment corporation bonds) on June 28, 2018 with the following overview.
Planned issuance amount

100,000 million yen

Planned issuance period

From July 6, 2018 to July 5, 2020

Use of proceeds

Funds for acquiring specified assets (having the meaning as set forth in the
Act on Investment Trusts and Investment Corporations, Article 2, Paragraph1); funds for repaying borrowings; funds for redeeming investment
corporation bonds (including short-term investment corporation bonds; funds
for returning deposits; funds for paying for repairs and maintenance, etc.;
operating capital, etc.

④ Over view of Financial Results and Cash Distribution
As a result of these management efforts, the Investment Corporation reported total operating revenues of 7,097
million yen, operating income of 3,439 million yen, ordinary income of 2,842 million yen and net income of
5,416 million yen for the current fiscal period.
In regard to profit distributions for the 13th fiscal period, pursuant to the distribution policy in the Investment
Corporation’s certificate of incorporation, the Investment Corporation has decided to apply special provisions of
the tax system for investment corporations (Act on Special Measures Concerning Taxation (Act No. 26 of 1957;
as amended) (“Act on Special Measures Concerning Taxation”), Article 67-15) and to distribute unappropriatedretained earnings of 3,152,068,128 yen as profit distribution for the 13th fiscal period, which is the amount ofpart of gain on negative goodwill, part of gain on sale of real estate property and other adjustments deductedfrom net income.
In the event we have gains from property sales, we will consider whether we need similar internal reserves as longas net profit, does not fall below the initial projection, taking into consideration such need in accordance with thecircumstances.
(3) Changes in unitholders’capital
The changes in unitholders’ capital and number of investment units issued and outstanding for last five years are
as follows.

Date

Capital transaction

Number of investment units

Unitholders’ capital

Issued and outstanding(Million yen)

Increase
August 6, 2013

Public offering

September 4, 2013

Balance

Note

Increase

Balance

34,571

48,345(Note 1)

165,000

240,440

Third-party allotment

1,182

241,622247

48,592(Note 2)

August 6, 2014

Public offering

36,375277,997

8,273

56,865(Note 3)September 3, 2014

Third-party allotment

1,125

279,122255

57,121(Note 4)

February 4, 2015

Public offering

67,900347,022

22,33079,452(Note 5)

March 4, 2015

Third-party allotment

2,067

349,089679

80,132(Note 6)

March 1,2018

Investment unit split

349,089

698,178－

80,132(Note 7)

March 1,2018

Marger

84,750782,928－

80,132(Note 8)(Note 1)

New investment units were issued at a price of ¥217,327 per unit (subscription price of ¥209,525 per unit) through a public offering in order
to raise funds for acquiring new properties.

(Note 2)

New investment units were issued at a price of ¥209,525 per unit through the third-party allotment in order to raise funds for miscellaneous
expenses related to the acquisition of new properties.

(Note 3)New investment units were issued at a price of ¥235,657 per unit (subscription price of ¥227,439 per unit) through a public offering in order
to raise funds for acquiring new properties.

(Note 4)

New investment units were issued at a price of ¥227,439 per unit through the third-party allotment in order to raise funds for miscellaneous
expenses related to the acquisition of new properties.

(Note 5)New investment units were issued at a price of ¥340,762 per unit (subscription price of ¥328,879 per unit) through a public offering in order
to raise funds for acquiring new properties.

(Note 6)(Note 7)(Note 8)New investment units were issued at a price of ¥328,879 per unit through the third-party allotment in order to raise funds for miscellaneous
expenses related to the acquisition of new properties.
KDR investment units was split 2-for-1 on the reference date as of February 28, 2018 and the effective date as of March 1, 2018.
In connection with the Merger, 1 KDR unit following the Investment Unit Split was allocated to every JSL unit with 84,750 JSL units newly
issued on March 1, 2018.

【Fluctuation in market prices of the investment securities】
The fluctuation in market prices (closing price) of investment securities on Tokyo Stock Exchange REIT Market
during each fiscal period are as follows.
Fiscal period
As of/for the six
months ended

9th
July 31, 2016

10th

11th

12th

13th（Note）

January 31, 2017

July 31, 2017

January 31, 2018

July 31, 2018

Highest price313,000

319,000

320,500

329,500

172,800

Lowest price

264,600

272,400

263,100

274,800

148,400(Note) KDR investment units was split 2-for-1 on the reference date as of February 28, 2018 and the effective date as of March 1, 2018.
Figures for the 13th fiscal period take into account the investment unit split.

(4)Distributions

The distribution for the 13th fiscal period is 4,026 yen per unit; the Investment Corporation plans to apply the
corporate income taxation special provision (Act on Special Measures Concerning Taxation, Article 67-15) that
deducts an amount equivalent to profit distributions from an investment corporation’s taxable income, and inaccordance with the distribution policy set forth in the Investment Corporation’s certificate of incorporation, Article
38 (1), has decided to distribute unappropriated retained earnings of 3,152,068 thousand yen as profit distribution for
the 13th fiscal period, which is the amount of part of gain on negative goodwill, part of gain on sale of real estate
property and other adjustments deducted from net income.

Fiscal period

9thFrom Feb.1, 2016
to Jul.31, 2016

10th
From Aug.1, 2016
to Jan.31, 2017

11th
From Feb.1, 2017
to Jul.31, 2017

12th
From Aug.1, 2017
to Jan.31, 2018

13th
From Feb.1, 2018
t o J u l . 3 1 , 2 0 18

Unappropriatedretained earnings(Thousand yen)

2,275,223

2,365,163

2,400,002

2,437,011

5,428,676

Retained earnings(Thousand yen)

55,01784,56484,495

12,2392,276,608

Total distribution(Thousand yen)

2,220,206

2,280,598

2,315,507

2,424,772

3,152,068(Distribution per
unit)

(Yen)

（6,360）（6,533）（6,633）（6,946）（4,026）

Profit distribution(Thousand yen)

2,220,206

2,280,598

2,315,507

2,424,772

3,152,068(Profit distribution
per unit)(Yen)（6,360）（6,533）（6,633）（6,946）

Unitcapital refunds(Thousand yen)

－

－

－

－

（－）

（－）

（－）

（－）

－

－

－

－

（－）

（－）

（－）

（－）

－

－

－

－

－

（－）

（－）

（－）

（－）

（－）

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

(Yen)

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

(Unitcapital refunds
from deduction of
unitcapital under tax
rules per unit)(Yen)（4,026）
－
（－）

－

（－）

(5) Asset Management Strategies Going Forward and Challenges
Asset Management Outlook
The Investment Corporation primarily invests in residential facilities mainly used as rental residential properties,
etc., healthcare facilities such as Private senior homes (with nursing care) and accommodations such as hotels,
based on the three core strategies: “Consistent External Growth by Making Use of Good Judgment,” “EfficientProfit Management” and “Challenge to New Business Opportunities.”
Going forward, the Investment Corporation will continue to seek maximization of unitholder value by evolving
into a REIT capable of adapting to change in social/economical structures and improving its “stability” and“ability to pursue growth,” through diversified investment in “spaces where people live and stay” encompassing
residential facilities, healthcare facilities and accommodations.
(A)

New property acquisitions
The Investment Corporation will invest primarily in residential, healthcare and accommodation facilities“spaces where people live and stay” as its target investments. In making investments, KDR will stringently selectreal estate etc. where stable demand from tenants and users and long-term stable revenue flows can be projectedon the basis of an individual analysis of the attributes of a particular property, as well as regional analysis taking
into account location, etc.
In residential facilities, the Investment Corporation focuses on the potential earnings power of land and use“location prestige,” “location convenience” and “whether there is a special market” and other metrics todetermine investment opportunities providing rental income with medium- to long-term stability, and invests also
in rental residential properties and other residential facilities located mainly in greater Tokyo and in Other
Regional Areas (government-designed municipalities and other regional cities. The same applies hereinafter.) by
discerning room types where stable rent demand can be expected, in accordance with the locational characteristics
after analyzing the attractiveness of the land in detail.
In healthcare facilities and accommodations, the Investment Corporation judges investment opportunity
considering scale and characteristic of market, regional financial affairs and status of competitive facilities, etc.
and examines aggressively investment in not only greater Tokyo but also regional cities.
We leverage our “judgment capabilities” that we have developed as real estate investment professionals to selectexcellent investment opportunities among a broad range of targets, and we believe this enables us to acquire
properties at a stable pace.
As a property acquisition channel, we use not only the pipeline from Kenedix, Inc. pursuant to the Memorandumof Understanding concerning Real Estate Information Provisions dated October 1, 2013 (including the change
after the date and calls “Support Line MOU”. This Support Line MOU was used for i) residential facilities, iiand) healthcare facilities and iii) accommodations and Residential REIT department is applied for those having
a priority consideration right to responsible for the asset management of the Investment Corporation) but also
leverage the Asset Management Company’s own network, including Jyukyo Holdings Co., Ltd., with which a
support agreement was executed on June 15, 2017 and Shinsei Bank, Limited, HASEKO Corporation, Mitsubishi
UFJ Trust and Banking Corporation and LIXIL Group Corporation, with which a support agreement was
executed on November 10, 2017 by the Merger, for flexible property acquisitions.
We also plan to control property acquisition timing in order to acquire properties at an advantageous timing inaccordance with the future market and financing climates, and we are considering investment in silent partnership
equities and real estate-backed securities (preferred securities, etc.).
(B) Management of existing assets
As residential facilities, with the goal of securing a rental income with medium- to long-term stability, PM
companies and the Asset Management Company work together to formulate leasing strategies in accordance withindividual property characteristics, and by closely allying with leading real estate companies experienced inregional rental markets, seek to maintain or improve occupancy rates and rent levels.
The Investment Corporation will also take into account the operation statuses of the properties and movementsof competing properties and seek to maintain or improve occupancy rates, raise rent levels at the time of tenantchanges, increase rent at the time of lease renewals, receive key money, reduce the time of vacancy, maintain or
improve lease renewal rates, and secure parking revenue and other auxiliary revenue and other income
opportunities to secure rent income.

The Investment Corporation will further strive to cut down on restoration and other repair and maintenanceexpenses, review the electricity provider for common areas in connection with the liberalization of the electricity
market, cut costs through the use of LED lighting for common areas, and reduce tenant solicitation and othercosts.
The Investment Corporation will carry out strategic work to update common areas and enhance the value ofleased areas of the properties and continue implementing appropriate, major repairs, as necessary, while it seek
to maintain or enhance the market competitiveness of its assets.
As healthcare facilities, the Investment Corporation continues to monitor properly operational status of facilities
it owns and business status of operators by information about them and companies from operators, inspection ofoperating status and interview by visiting them and interview with managements in operating company, etc.
Considering results of monitoring, the Investment Corporation proposes to improve buildings, facilities andoperation and examines changing operators in case important issue occurs in succession of management in
operators. The Investment Corporation contracts Back-up operation conclusion with operators and support
companies in preparation of changing operators.
The Investment Corporation will manage to make internal growth by deepening relation with operators such as
value-ups based on proposal from operators and cooperation for resolving issues in operation.
(C) Financing
We will continue to pay close attention to changes in interest rates and other developments in the financing
environment and will consider various options and choose optimal financing means in order to achieve theoptimal balance between financial stability and financing costs, and seek to build an appropriate financial base.
(D) Disclosure
The Investment Corporation’s basic policy for disclosure is to engage in proactive investor relations activities
to provide a broad range of information to investors and concerned parties and to quickly disclose accurate
information to the extent possible. Specifically, we practice appropriate disclosure though the Tokyo Stock
Exchange (TDnet registration and press releases) and through our website (https://www.kdr-reit.com/en).
(E)
Measures regarding conflicts of interest
The Asset Management Company manages other investment corporations and real estate funds besides theInvestment Corporation. For this reason, the Asset Management Company adopts “First picking rights”
concerning consideration of acquisitions, set up internally a “pipeline meetings” that includes the complianceofficer and implement operation in accordance with certain rules to prevent arbitrary real estate sales informationand thereby prevent conflicts of interest between investment corporations and real estate funds for which theAsset Management Company manages assets and strives to implement proper measures to fight conflicts ofinterest.
(6)

Material facts which occurred after book-closing

Issuance of New Investment Units
The Investment Corporation resolved at the Board of Directors’ meeting on July 13, 2018 and July 24, 2018
to issue new investment units to apply the funds toward a payment for the acquisition of specified assets.
Payment has been completed on August 1, 2018, and issuance of new investment units by third-party
allotment has been completed on August 29, 2018.
As a result, Unitholders’ capital came to 93,226,228,903yen and Number of investment units issued andoutstanding came to 869,133 units as of August 29, 2018.
（Issuance of New Investment Units through Public Offering）
Total number of units to be offered：82,100 unit
Issue price (offer price)： 157,047 yen per unit
Total amoumt issue price (offer price) ：12,893,558,700 yen
Purchase price (Amount to be paid in)：151,892 yen per unit
Total amount purchase price(Amount to be paid in) ：12,470,333,200 yen

Payment date：August 1, 2018

(New Investment Units by Third-Party Allotment)
Number of units to be issued：4,105 units
Issue Price（Paid-in-Value）：151,892 yen per unit
Purchase price (Amount to be paid in) ：623,516,660 yen
Payment date：August 29, 2018
Allottee：SMBC Nikko Securities Inc.
(Reference)① Acquisition of assets
The Investment Corporation acquired the following trust beneficiary interest in real estate on August 2, 2018.
Acquisition Price
Date of

Property

Acquisition

number

Property name

August 2, 2018

Location

Previous Owner（million yen）
（Note）T-79

KDX Residence Asagaya

Suginami-ku,Tokyo

G.K. Tropic II

1,930

T-80

KDX Residence Hiyoshi

Yokohana-shi, Kanagawa

G.K. Tropic II

2,635

R-44

Serenite Kobe Motomachi

Kobe-shi, Hyogo

G.K. Tropic II

2,390

R-45

KDX Residence Shukugawa Hills

Nishinomiya-shi,Hyogo

G.K. Tropic I

6,884

H-16

Anesis Teradacho

Osaka-shi, Osaka

G.K. KSLF8

3,490

H-17

Rococo-riha

Toyonaka-shi, Osaka

G.K. KSLF8

2,100

H-18

Orage Suma

Kobe-shi, Hyogo

G.K. KSLF8

2,810

H-19

Canadian Hill

Kobe-shi, Hyogo

G.K. KSLF8

1,830

H-20

Anesis Hyogo

Kobe-shi, Hyogo

G.K. KSLF8

1,420

Total

25,490(Note) “Acquisition Price” is the sales amount of each trust beneficiary interest (excluding acquisition costs, property tax, city planning tax or consumption
tax, etc.) indicated in each trust beneficiary interest sales contract concerning the to-be acquired assets and is rounded down to the nearest thousandyen.

② Borrowing
The Investment Corporation implemented debt financing of 12,700 million yen (series 28) to apply thefunds toward a payment for the acquisition of specified assets on August 2, 2018.

2. Outline of the Investment Corporation(1)
Investment unit
9th

10th

11th

12th

13th

July 31,2016

January 31,2017

July 31,2017

January 31,2018

July 31,2018

Fiscal period

Number of investment units
authorized (Unit)
Number of investment units
issued and outstanding (Unit)

5,000,000

5,000,000

5,000,000

5,000,000

10,000,000

349,089

349,089

349,089

349,089

782,928

80,13280,13280,13280,13280,132

10,063

9,009

9,328

8,466

12,847

Total Unitholders’ equity(Million yen)
Number ofunitholders(people)(2)

Unitholders

Major unitholders as of July 31, 2018 are as follows.
Ratio of number ofName

Address

Number ofinvestment units

investment

owned to total

units

number of

owned

investment units(Units)issued(%) (Note)

Japan Trustee Services Bank, Ltd.(trust account)

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

242,472

30.96

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

160,306

20.47

Trust & Custody Services Bank, Ltd. (securities
investment trust account)

8-12, Harumi 1-chome, Chuo-ku, Tokyo

30,374

3.87

The Nomura Trust and Banking Co., Ltd.

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

23,847

3.04

Kenedix, Inc.

2-1 Uchisaiwai-cho 2-chome, Chiyoda-ku, Tokyo

16,5702.11

Mizuho Trust & Banking Co., Ltd.

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

14,764

1.88

Mitsubishi UFJ Trust and Banking Corporation

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

14,562

1.85

13,482

1.72

12,849

1.64

9,124

1.16

538,350

68.76

Harumi Island Toriton Square Office Tower Z

11-1, Nihombashi 3-chome, Chuo-ku, Tokyo
STATE STREET BANK AND TRUST COMPANY

Standing Proxy,The Hongkong and Shanghai

505012

Banking Corporation Limited, Tokyo branch,
Custody Business Department

The Gunma Bank, Ltd.

ＤＦＡ

194, Motosojamachi, Maebashi-shi, Gunma

ＩＮＴＥＲＮＡＴＩＯＮＡＬ

ＲＥＡＬ

ＥＳＴＡＴＥＳＥＣＵＲＩＴＩＥＳＰＯＲＴＦＯＬＩＯ

27-30 Shinjuku 6-chome, Shinjuku-ku,Tokyo
Standing Proxy, Citibank, N.A., Tokyo Branch

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

(3)Officers① The Executive Directors, Supervisory Directors and the Independent Auditor during the 13th fiscal period are
as follows.
Compensation orfees for the six
Post

Name

months ended July

Major additional post

31,2018(Thousands ofyen)

Kenedix Real Estate Fund Management, Inc.
Keisuke Sato

Director & COO, Head of Residential REIT

1,750

Department and Head of Asset Investment Divisio
Ogata Appraisal Corporation, Director
Lecturer in Meiji University’s Graduate School of

Executive

Global BusinessDirector

Japan Association of Real Estate Appraisers,
Katsue Okuda (Note 2)

1,500

Managing director
Kudan Ogata Holdings Corporation, Representative
director
Kudan Urban Appraisal Co., Ltd., Director
CERESPO CO.,LTD., Auditor
Akebono Law Office,Attorney

Toin Law School, Associate Professor
Osamu Chiba

Maruzen Foods Corporation, Outside Auditor
Imagica Robot Group Inc. (Note 4)

1,500

OutsideDirector
Ogawa CPA Office, CPA
Satoshi Ogawa

GK Mercury Consulting,

Representative Partner

Oedo-Onsen Monogatari Co., Ltd, Auditor

Supervisory

Oedo-Onsen Monogatari Group Co., Ltd, Auditor

Director

Keio University’s School of Medicine, Resident(Note 1)

professor

1,500

Hungarian Medical Universities, Director
Chigasaki Central Clinic, Director
Soichiro Iwao (Note 2)

Medical Corporate Body Ken-iku kai, Vice
President

1,250

Medical Corporation Kyo sai kai, Director
Medical Corporation Jyo ban kai, Director
National Federation of Industrial HealthOrganization, Director
Independent
auditorErnst & Young ShinNihon LLC－

15,000(Note 3)(Note 1)
(Note 2)
(Note 3)(Note 4)

Supervisory Director may be an officers of corporations other than mentioned above, but there is no interest in relation to the Investment
Corporation.
They are newly appointed as of March 1, 2018 with the merger.
The fee of Independent auditor includes remuneration for Comfort Letter creation work related to issuance of new investment units.

Imagica Robot Holdings Inc. changed it company name to Imagica Robot Group Inc. on October 1, 2018.

Policy on Decision to Dismiss or Not to Re-Appoint Independent Auditor
Dismissal of an independent auditor will be made in accordance with the Act on Investment Trusts and Investment
Corporations, and a decision not to re-appoint an independent auditor will be considered by comprehensively taking②

into account the audit quality, compensation and other various circumstances by the board of directors of theInvestment Corporation.
(4)

Asset Management Company, Custodian and General Administrators

The asset management company, custodian and general administrators as of the end of the 13th fiscal period are
as follows.
Classification

Name

Asset manager

Kenedix Real Estate Fund Management Inc.

CustodianMizuho Trust & Banking Co., Ltd.

General administrator (Unitholder registry)

Sumitomo Mitsui Trust Bank, Limited

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

General administrator (Administration)

Mizuho Trust & Banking Co., Ltd.

General administrator(Regarding investment corporation bonds)

Sumitomo Mitsui Trust Bank, Limited

3

Condition of investment assets(1)

Composition of assets

Classificationof assets

Use

Region12th

13th

As of January 31, 2018

As of July 31, 2018

Total of net bookComposition

Total of net bookComposition

value(Million yen) (Note 5)

ratio (%)

value

ratio (%)

(Note 6)

(Million yen) (Note 5)(Note 6)

Tokyo
Metropolitan
Residential

53.4

47,80822.4

10,593

5.0－

17,613

8.2

－

－

1,364

0.6

163,24292.3

191,350

89.6

1,798

1.0

1,798

0.8

1,798

1.0

1,798

0.8

221

0.1

512

0.2

11,551

6.5

19,8989.3

176,813100.0

213,558

100.0

64.6

49,033

27.7

－

－

－

Area (Note 2)
Other Regional

Trust

Area (Note 3)

beneficiaryTokyo

interest in

Metropolitan

real estate

Area (Note 2)
Healthcare

113,969

114,209

Other Regional
Area (Note 3)
Other (Note 4)

Total (Trust beneficiary interest in real estate)
Tokyo
Real estate

Other

Metropolitan
Area (Note 2)

Total (Real estate)
Silent partnership equity interest (Note 1)
Bank deposits and other assets
Total assets(Note 1) Silent partnership equity interest of GK Tropic I and GK Tropic Ⅱ in the 12th fiscal period and of GK Tropic I, GK Tropic II and GK KSLF8 in
the 13th fiscal period.
(Note 2) “Tokyo Metropolitan Area” means major cities in Tokyo, Kanagawa, Saitama and Chiba.
(Note 3) “Other regional areas” include government-designed municipalities and other regional cities.
(Note 4) “Other” means cities except Tokyo Metropolitan Area and Other regional areas.
(Note 5) “Total on net book value” means carrying amounts on the balance sheet (amounts of Trust beneficiary interests in real property and real property
are book values net of depreciation) at the end of fiscal period and rounded off to one dismal place.
(Note 6) “Composition ratio” means the ratio of carrying amounts of each classified assets to total assets on balance sheet and rounded off to one dismal
place.

(2)Major property

The principal properties (Top 10 properties in net book value as of July 31, 2018) are as follows.
Ratio of rental
Occupancy
revenue to total
Rate (%)
rental revenue(Note 3)(%) (Note 4)

Book value(Million yen)

Leasable area(m²) (Note 1)

Leased area(m²) (Note 2)

T-78 KDX Residence Toyosu

7,789

6,811.38

6,811.38

100.0

H-10 Activa Biwa

6,516

39,649.84

39,649.84

100.0

T-56 KDX Residence Hanzomon

4,970

4,854.23

4,722.37

97.3

2.0

Apartment

KDX Daikanyama Residence

4,709

5,338.99

5,338.99

100.0

2.4

Apartment

4,630

11,855.63

10,731.22

90.5

2.7

T-52 KDX Residence Togoshi

3,771

4,591.76

4,591.76

100.0

1.9

H-3

Joy Stage Hachioji

3,673

13,812.27

13,812.27

100.0

R-35 Leopalace Flat Shin-sakae

3,563

11,589.95

11,589.95

100.0

1.8

Apartment

T-26 KDX Residence Higashi-shinjuku

3,241

4,358.43

4,140.12

95.0

1.7

Apartment

R-37 KDX Residence Honmachibashi

3,196

6,511.88

6,437.13

98.9

1.6

Apartment

46,062

109,374.36

107,825.03

－

21.1

No.

T-1
R-39

Name of property

KDX Residence Ohori Harbor View
Tower

Total
(Note1)(Note 2)
(Note 3)(Note 4)(Note 5)

2.4
Undisclosed(Note 5)

Undisclosed(Note 5)Major use

Apartment
Healthcare

Apartment
Apartment
Healthcare“Leasable area” is the floor area of each portfolio asset for which the building is leasable (if a portfolio asset has more than one building, thetotal floor area of leasable buildings) that is set forth in a lease agreement as of July 31, 2018.
“Leased area” is the floor space set forth in a lease agreement that has been executed with an end tenant and leased as of July 31, 2018.
“Occupancy rate” = “leased area” / “leasable area” ×100
The ratio of rental revenue to total rental revenue = each property’s real estate lease business revenue / total for all properties.
Not disclosed because tenant's consent has not been obtained.

(3)Details of property

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

Area

Use

No.

Name of property

Address

Form ofownership

Appraisal valueBookat the end ofvalue

fiscal period(Million yen)

(Million yen)
(Note 1)

Tokyo Metropolitan Area

Residential Facilities

T-1

KDX Daikanyama Residence

7-1,Sarugakucho,Shibuya-ku,Tokyo

TBI

4,709

5,680

T-3

KDX Odemma Residence

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

TBI

1,724

2,040

T-4

KDX Iwamoto-cho Residence

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

TBI

797

950

T-5

KDX Bunkyo Sengoku Residence

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

TBI

1,462

1,740

T-6

KDX Azumabashi Residence

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

TBI

619

873

T-7

KDX Shimura Sakaue Residence

16-5,Higashi-Sakashia 1-chome,Itabashiku,Tokyo

TBI

2,698

3,310

T-10

KDX Musashi Nakahara Residence

TBI

640

719

T-11

KDX Chiba Chuo Residence

TBI

1,350

1,780

T-12

KDX
Kawaguchi
Residence

TBI

1,122

1,380

T-13

KDX Residence Shirokane I

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

TBI

3,092

3,460

T-15

KDX Residence Shirokane II

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

TBI

2,867

3,400

T-16

KDX Residence Minami-aoyama

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

TBI

2,241

2,470

T-17

KDX Residence Minami-azabu

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

TBI

2,081

2,580

T-18

KDX Residence Shiba Koen

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

TBI

1,771

2,290

T-19

KDX Residence Azabu East

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

TBI

1,555

1,910

T-20

KDX Residence Takanawa

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

TBI

767

1,020

T-21

KDX Residence Nishihara

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

TBI

1,451

1,870

T-22

KDX Residence Daikanyama II

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

TBI

761

935

T-23

KDX Residence Sendagaya

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

TBI

643

805

T-24

KDX Residence Nihombashi Suitengu 41-6 Nihombashi Hakozakicho, Chuo-ku, Tokyo

TBI

3,187

3,870

T-25

KDX Residence Nihombashi Hakozaki 38-1 Nihombashi Hakozakicho, Chuo-ku, Tokyo

TBI

1,167

1,360

T-26

KDX Residence Higashi-shinjuku

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

TBI

3,241

3,990

T-27

KDX Residence Yotsuya

22-50 Arakicho, Shinjuku-ku, Tokyo

TBI

2,253

2,650

T-28

KDX Residence Nishi-shinjuku

TBI

1,000

1,290

T-29

KDX Residence Kagurazaka

8-10, Tsukijicho, Shinjuku-ku, Tokyo

TBI

713

905

T-30

KDX Residence Futako Tamagawa

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

TBI

1,276

1,440

T-31

KDX Residence Komazawa Koen

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

TBI

911

1,090

T-32

KDX Residence Mishuku

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

TBI

757

907

T-33

KDX Residence Yoga

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

TBI

699

854

T-34

KDX Residence Shimouma

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

TBI

602

741

T-35

Raffine Minami-magome

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

TBI

1,247

1,450

TBI

1,033

1,310

18-22, Shimokodanaka 4-chome, Nakahara-ku,
Kawasaki-shi, Kanagawa
2-17, Shindencho, Chuo-ku, Chiba-shi, China

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

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

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

T-36

KDX Residence Yukigaya Otsuka

T-37

KDX Residence Denenchofu

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

TBI

1,064

1,210

T-38

KDX Residence Tamagawa

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

TBI

750

920

T-39

KDX Residence Monzennakacho

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

TBI

768

961

T-40

KDX Residence Okachimachi

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

TBI

844

1,040

T-41

KDX Residence Moto-asakusa

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

TBI

795

990

T-42

KDX Residence Itabashi Honcho

13-16, Yamatocho, Itabashi-ku, Tokyo

TBI

606

743

T-43

KDX Residence Azusawa

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

TBI

557

637

T-44

KDX Residence Tobu Nerima

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

TBI

403

502

Tokyo

5-9, Bandaicho 3-chome, Naka-ku, Yokohama-Tokyo Metropolitan Area

Residential Facilities

TBI

785

979

TBI

1,005

1,130

TBI

1,734

2,020

TBI

1,348

1,630

TBI

1,006

1,190

TBI

565

643

11-27, Yakumo 3-chome, Meguro-ku, Tokyo

TBI

1,325

1,540

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

TBI

3,771

4,630

TBI

2,599

3,170

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

TBI

1,851

2,210

8-8, Oyamakanaimachi, Itabashi-ku, Tokyo

TBI

2,669

3,190

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

TBI

4,970

5,470

B-Site Akihabara

7, Kanda-Sudacho 1-chome, Chiyoda-ku, Tokyo

TBI

867

962

T-58

KDX Residence Kagurazaka Dori120-1, Yaraicho, Shinjuku-ku, Tokyo

TBI

1,387

1,750

T-59

KDX Residence Sendagi

43-17, Sendagi 3-chome, Bunkyo-ku, Tokyo

TBI

2,368

2,390

T-60

KDX Residence Seijo

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

TBI

1,429

1,530

T-61

KDX Residence Akihabara

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

TBI

1,260

1,470

T-62

KDX Residence Iriya

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

TBI

1,074

1,330

T-63

KDX Residence Tachikawa

TBI

3,035

3,470

T-64

KDX Residence Tsurumi

TBI

1,138

1,430

T-65

KDX Residence Morishita Chitose

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

TBI

1,116

1,230

T-66

KDX Residence Akasaka

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

TBI

1,199

1,600

T-67

KDX Residence Kanda

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

TBI

729

1,050

TBI

2,961

4,000

T-45

KDX Residence Yokohama Kannai

T-46

KDX Residence Miyamaedaira

T-47

KDX Residence Machida

T-48

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

T-49

KDX Residence Nihombashi
Hamacho

33-4, Nishimbashi-Hamacho 3-chome, Chuo-ku,

T-50

KDX Residence Nihombashi
Ningyocho

8-5, Nihombashi-Horidomecho 1-chome, Chuo-

T-51

KDX Residence Jiyugaoka

T-52

KDX Residence Togoshi

T-53

KDX Residence Shinagawa Seaside

T-54

KDX Residence Ojima

T-55

KDX Residence Oyama

T-56

KDX Residence Hanzomon

T-57shi, Kanagawa
14-3, Miyamaedaira 3-chome, Miyamae-ku,
Kawasaki-shi, Kanagawa
13-32, Kamitsurumahoncho, Minami-ku,
Sagamihara-shi, Kanagawa

Tokyoku, Tokyo

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

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

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

T-68

KDX Residence Ebisu

T-69

KDX Residence Nishi-magome

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

TBI

1,179

1,200

T-70

KDX Residence Nishi-azabu

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

TBI

1,245

1,510

T-71

KDX Residence Azabu Sendaizaka

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

TBI

809

975

T-72

KDX Residence Waseda Tsurumaki

TBI

572

791

T-73

KDX Residence Bunkyo Yushima

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

TBI

707

915

T-74

KDX Residence Kamishakujii

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

TBI

662

786

TBI

782

945

TBI

914

1,110

Tokyo

574-25, Waseda-Tsurumakimachi, Shinjuku-ku,
Tokyo

44-16, Higashi-Ikebukuro 5-chome, Toshima-ku,

Other Regional Area

T-75

KDX Residence Shin-otsuka

T-76

KDX Residence Sakurajosui

T-77

KDX Residence Ryogoku

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

TBI

863

1,080

T-78

KDX Residence Toyosu

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

TBI

7,789

7,640

R-2

KDX Jozenjidori Residence

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

TBI

956

1,290

R-3

KDX Izumi Residence

TBI

1,067

1,320

R-4

KDX Chihaya Residence

TBI

1,015

1,350

R-5

KDX Sakaisuji Hommachi Residence

TBI

2,751

3,230

R-7

KDX Shimmachi Residence

TBI

1,385

1,830

R-8

KDX Takarazuka Residence

TBI

1,585

1,960

Tokyo
26-14, Shimotakaido 1-chome, Suginami-ku,
Tokyo

24-28, Izumi 2-chome, Higashi-ku, Nagoya-shi,
Aichi
49-6, Shinsakae 1-chome, Naka-ku, Nagoya-shi,
Aichi
7-15, Kawaracho 1-chome, Chuo-ku, Osaka-shi,
Osaka
9-23, Shinmachi 4-chome, Nishi-ku, Osaka-shi,
Osaka
2-43, Sakaemachi 3-chome, Takarazuka-shi,
Hyogo

Residential Facilities

R-9

KDX Residence Odori Koen

R-10

KDX Residence Kikusui Yojo

R-11

KDX Residence Toyohira Koen

R-13

KDX Residence Ichiban-cho

R-14

KDX Residence Kotodai

R-15

KDX Residence Izumi Chuo

R-16

KDX Residence Higashi-sakura I

R-17

KDX Residence Higashi-sakura II

R-18

KDX Residence Jingumae

R-19

KDX Residence Nishi-oji

R-20

KDX Residence Saiin

R-21

KDX Residence Namba

R-22

KDX Residence Namba-minami

R-23

KDX Residence Shin-osaka

R-24

KDX Residence Ibaraki I・II (Note
2)

R-25

KDX Residence Toyonaka-minami

R-26

KDX Residence Moriguchi

R-27

KDX Residence Sannomiya

R-28

Ashiya Royal Homes

R-29

KDX Residence Funairi Saiwai-cho

R-30

KDX Residence Tenjin-higashi II

R-32

KDX Residence Nishi Koen

R-33

KDX Residence Hirao Josui-machi

R-34

Melody Heim Gotenyama

R-35

Leopalace Flat Shin-sakae

R-36

KDX Residence Koman Yamate

R-37

KDX Residence Hommachibashi

R-38

KDX Residence Minami-kusatsu

R-39

KDX Residence Ohori Harbor View
Tower

R-40

KDX Residence Minami-sanjo

1000-4, Minami 2-jo 40-chome, Chuo-ku,
Sapporo-shi, Hokkaido
2-35, Kikusui 4-jo 3-chome, Shiroishi-ku,
Sapporo-shi, Hokkaido
4-16, Hiragishi 4-jo 3-chome, Toyohira-ku,
Sapporo-shi, Hokkaido
15-42, Ichibancho 1-chome, Aoba-ku, Sendaishi, Miyagi
3-25, Uesugi 1-chome, Aoba-ku, Sendai-shi,
Miyagi45-2, Ichinazaka-Ishidome, Izumi-ku, Sendaishi, Miyagi
13-22, Higashi-sakura 2-chome, Higashi-ku,
Nagoya-shi, Aichi
5-10, Higasi-sakura 1-chome, Higashi-ku,
Nagoya-shi, Aichi
4-27, Yokota 2-chome, Atsuta-ku, Nagoya-shi,
Aichi
40-3, Nishi 7-jo Kakekoshicho, Shimogyo-ku,
Kyoto-shi, Kyoto
30-2, Sanintakadacho, Ukyo-ku, Kyoto-shi,
Kyoto
6-16, Inari 1-chome, Naniwa-ku, Osaka-shi,
Osaka
11-9, Shiokusa 3-chome, Naniwa-ku, Osakashi, Osaka
16-11, Kikawa Higashi 4-chome, Yodogawa-ku,
Osaka-shi, Osaka
9-11, 9-12, Takehashicho, Ibaragi-shi, Osaka
7-22, Shonaihigashicho 2-chome, Toyonaka-shi,Osaka
12-12, Dainichihigasihmachi, Moriguchi-shi,
Osaka
8-10, Ninomiyacho 4-chome, Chuo-ku, Kobeshi, Hyogo
20-10, Oharacho, Ashiya-shi, Hyogo
10-5, Funairisaiwaicho, Naka-ku, Hiroshimashi, Hiroshima
6-22, Chikukohonmachi, Hakata-ku, Fukuokashi, Fukuoka
5-7, Minato 3-chome, Chuo-ku, Fukuoka-shi,
Fukuoka
10-17, Hiraojyosuimachi, Chuo-ku, Fukuokashi, Fukuoka
6-1, Nagisa Nishimachi 1-chome, Hirakata-shi,
Osaka
5-31, Shinsakae 1-chome, Naka-ku, Nagoyashi, Aichi
9-3, Moriminamimachi 1-chome, Higashinadaku, Kobe-shi, Hyogo
2-14, Honmachibashi, Chuo-ku, Osaka-shi,
Osaka
1-8, Minamikusatsu 1-chome, Kusatsu-shi,
Shiga
2-18, Minato 1-chome, Chuo-ku, Fukuoka-shi,
Fukuoka
3-2, Minami 3-jo Nishi 8-chome, Chuo-ku,
Sapporo-shi, Hokkaido

TBI

736

931

TBI

801

1,030

TBI

476

539

TBI

511

694

TBI

504

567

TBI

464

617

TBI

2,282

2,740

TBI

878

1,080

TBI

810

1,060

TBI

791

946

TBI

427

509

TBI

1,378

1,660

TBI

1,302

1,580

TBI

487

578

TBI

1,297

1,413

TBI

698

853

TBI

528

649

TBI

1,051

1,300

TBI

1,460

1,720

TBI

564

676

TBI

658

875

TBI

739

858

TBI

748

886

TBI

427

510

TBI

3,563

4,290

TBI

977

1,120

TBI

3,196

3,490

TBI

2,006

2,340

TBI

4,630

5,210

TBI

941

1,600

3-15, Kitakyuhojicho 1-chome, Chuo-ku,
R-41

Serenite Kita-kyuhoji

R-42

Serenite Nishinomiya Hommachi

R-43

KDX Residence Nishijin

Osaka-shi, Osaka
5-26, Honmachi, Nishinomiya-shi, Hyogo
24-30, Nishijin 2-chome, Sawara-ku, Fukuokashi, Fukuoka

TBI

1,298

1,500

TBI

652

739

TBI

1,751

1,670

161,777

192,248

Total

Book
Area

Use

No.

Name of property

Address

Form ofvalue

ownership(Millionyen)

H-1 Irise Kamata/Yuseien(Note 3)
Tokyo Metropolitan Area

H-2

NichiiHomeNakano-Minamidai(Note 3)

H-3 Joy Stage Hachioji(Note 3)

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

2-15-21 Kitakojiya, Ota-ku, Tokyo

TBI

1,115

1,120

3-26-24 Minamidai, Nakano-ku, Tokyo

TBI

1,777

1,780

924-2 Yokokawamachi, Hachioji-shi, Tokyo

TBI

3,673

3,700

TBI

1,112

1,120

TBI

2,915

2,940

TBI

2,607

2,640

TBI

850

854

2-22-4 Hijirigaoka, Tama-shi, Tokyo (Building A)
H-4 Yuimaru Hijirigaoka(Note 3)

2-20-6 Hijirigaoka, Tama-shi, Tokyo (Building B)
2-21-2 Hijirigaoka, Tama-shi, Tokyo (Building C)

H-5 Nichii Home Tama Plaza(Note 3)

Nichii Home Tama Plaza
6-3-1 Tsukisamuchuodori, Toyohira-ku, Sapporo-

H-6 Ten(Note 3)
shi, Hokkaido

Healthcare Facilities

13-7-10 Nishioka Sanjo, Toyohira-ku, Sapporo-shi,
H-7 Irise Nishioka(Note 3)
Hokkaido

Other Regional Area

H-8 Izarie Eniwa Building(Note 3)

2-1 Aioimachi, Eniwa-shi, Hokkaido

TBI

1,644

1,670

H-9 Sawayaka Sakura Nibankan

1-10-3 Oroshimachi, Akita-shi, Akita

TBI

978

990

TBI

6,516

6,560

TBI

2,100

2,110

6-16-16 Ogoto, Otsu-shi, Shiga
H-10 Activa Biwa(Note 3)

6-11-8 Ogoto, Otsu-shi, Shiga
6-17-17 Ogoto, Otsu-shi, Shiga

Sompo Care LAVIERE Kobe

285 Sarukura, Myodanicho, Tarumi-ku, Kobe-shi,

Tarumi (Note 3)

Hyogo

H-11
H-12 Granda Mondo Yakujin(Note 3)

10-10 Hayashidacho, Nishinomiya-shi, Hyogo

TBI

1,181

1,190

H-13 Excellent Nishinomiya(Note 3)

2-4-3 Sumiredai, Nishinomiya-shi, Hyogo

TBI

963

972

TBI

769

783

TBI

1,364

1,380

29,57229,809

1,798

1,800

193,148

223,857

10 Kitanohigashi, kobaicho, kita-ku, Kyoto-shi,
H-15 Excellent Kitano
Kyoto
57-2
OthersTachinoOura-aza,

Tohokumachi-Oaza,

H-14 Gran Hills Ogawarako(Note 3)
Kamikita-gun, Aomori
Subtotal

Tokyo

Other Metropolitan T-9 Cosmo Heim Motosumiyoshi
Area

5-1, Kizukikigioncho, Nakahara-ku, KawasakiRPshi, Kanagawa
Total(Note1)(Note 2)
(Note 3)

“Appraisal value at the end of the fiscal period” is the appraisal value in a real property appraisal prepared, pursuant to the asset appraisal
techniques and standards in the Investment Corporation’s certificate of incorporation and the rules of the Investment Trusts Association,
Japan, by Japan Real Estate Institute, Daiwa Real Estate Appraisal Co., Ltd., JLL Morii Valuation & Advisory K.K. or Tanizawa Sogo
Appraisal Co., Ltd.
R-24 consists of two buildings and H-4、H-10 consists of three buildings, book value and appraisal value are total amount of each valueof the properties.
The properies succeeded from JSL on the merger.

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

Area

Use

12th
13th
(From August 1, 2017 to January 31, 2018)(From February 1, 2018 to July 31, 2018)
Occupancy Rental and
Ratio ofOccupancy Rental and Ratio of
Number of
Number of
rate at theotherrentalrate at theotherrentaltenants attenants at
end ofoperating revenue to
end ofoperating revenue tothe end of
the end of
periodrevenues total rental
periodrevenues total rental
periodperiod(%)(Million yen) revenues(%)(Million yen) revenues(Note 1)
(Note 1)
(Note 2)
(Note 3)(%)(Note 2)
(Note 3)
(%)
1
100.0
160
2.4
1
98.2
159
2.8

No.

Name of property

T-1

KDX Daikanyama Residence

T-3

KDX Odemma Residence

1

100.0

57

1.0

1

96.1

58

0.9

T-4

KDX Iwamoto-cho Residence

1

98.0

27

0.5

1

100.0

28

0.4

T-5

KDX Bunkyo Sengoku Residence

1

100.0

50

0.9

1

97.6

51

0.8

90.7

25

0.4

T-6

KDX Azumabashi Residence

1

100.0

25

0.4

1

T-7

KDX Shimura Sakaue Residence

1

100.0

103

1.8

1

95.1

105

1.6

T-10

KDX Musashi Nakahara Residence

1

94.3

24

0.4

1

94.3

26

0.4

T-11

KDX Chiba Chuo Residence

1

95.5

60

1.1

1

93.4

61

0.9

96.6

47

0.7

T-12

KDX Kawaguchi Saiwai-cho Residence

1

98.3

48

0.8

1

T-13

KDX Residence Shirokane I

1

98.8

108

1.9

1

97.6

113

1.7

T-15

KDX Residence Shirokane II

1

98.8

90

1.6

1

98.9

92

1.4

T-16

KDX Residence Minami-aoyama

1

70.8

51

0.9

1

95.8

55

0.8

96.7

70

1.1

T-17

KDX Residence Minami-azabu

1

98.0

73

1.3

1

T-18

KDX Residence Shiba Koen

1

97.5

63

1.1

1

98.3

65

1.0

T-19

KDX Residence Azabu East

1

98.9

55

1.0

1

97.7

56

0.9

T-20

KDX Residence Takanawa

1

97.4

26

0.5

1

95.6

27

0.4

97.6

51

0.8

Tokyo Metropolitan Area

Residential

T-21

KDX Residence Nishihara

1

100.0

48

0.9

1

T-22

KDX Residence Daikanyama II

1

100.0

27

0.5

1

100.0

28

0.4

T-23

KDX Residence Sendagaya

1

100.0

21

0.4

1

100.0

22

0.3

T-24

KDX Residence Nihombashi Suitengu

1

100.0

97

1.7

1

100.0

97

1.5

T-25

KDX Residence Nihombashi Hakozaki

1

98.7

40

0.7

1

100.0

41

0.6

95.0

111

1.7

T-26

KDX Residence Higashi-shinjuku

1

96.8

110

1.9

1

T-27

KDX Residence Yotsuya

1

100.0

78

1.4

1

100.0

82

1.2

T-28

KDX Residence Nishi-shinjuku

1

98.0

34

0.6

1

91.5

35

0.5

T-29

KDX Residence Kagurazaka

1

97.2

24

0.4

1

100.0

25

0.4

100.0

43

0.7

T-30

KDX Residence Futako Tamagawa

1

100.0

43

0.8

1

T-31

KDX Residence Komazawa Koen

1

95.5

28

0.5

1

97.8

29

0.4

T-32

KDX Residence Mishuku

1

97.7

26

0.5

1

100.0

26

0.4

T-33

KDX Residence Yoga

1

90.0

23

0.4

1

100.0

25

0.4

100.0

20

0.3

T-34

KDX Residence Shimouma

1

100.0

20

0.4

1

T-35

Raffine Minami-magome

1

100.0

46

0.8

1

100.0

42

0.6

T-36

KDX Residence Yukigaya Otsuka

1

98.7

39

0.7

1

97.3

39

0.6

T-37

KDX Residence Denenchofu

1

100.0

38

0.7

1

91.7

37

0.6

94.5

28

0.4

T-38

KDX Residence Tamagawa

1

98.1

28

0.5

1

T-39

KDX Residence Monzennakacho

1

95.9

27

0.5

1

97.5

28

0.4

T-40

KDX Residence Okachimachi

1

100.0

29

0.5

1

100.0

30

0.5

T-41

KDX Residence Moto-asakusa

1

95.9

29

0.5

1

98.4

29

0.4

T-42

KDX Residence Itabashi Honcho

1

96.1

23

0.4

1

100.0

24

0.4

96.8

19

0.3

T-43

KDX Residence Azusawa

1

100.0

20

0.4

1

T-44

KDX Residence Tobu Nerima

1

100.0

17

0.3

1

100.0

17

0.3

T-45

KDX Residence Yokohama Kannai

1

97.0

34

0.6

1

94.2

35

0.5

T-46

KDX Residence Miyamaedaira

1

97.5

36

0.6

1

94.7

36

0.5

1.0

1

100.0

63

1.0

T-47

KDX Residence Machida

1

100.0

58

13th
(From February 1, 2018 to July 31, 2018)
Number
Occupancy
Ratio ofOccupancy
Rental andof
Rental andNumber of rate at therentalrate at the
Ratio of rental
other operating
tenantsother operating
tenants at theend ofrevenue to
end ofrevenue to total
revenues
at therevenues
end of period
periodtotal rental
periodrental revenues(Million yen)end of(Million yen)
(Note 1)(%)
revenues(%)(%)(Note 3)
period(Note 3)(Note 2)(%)
(Note 2)
(Note 1)
1
96.9
45
0.7
1
100.0
43
0.8
12th
(From August 1, 2017 to January 31, 2018)

Area

Use

No.

Name of property

T-48 KDX Residence Kinshicho
T-49 KDX Residence Nihombashi Hamacho

1

100.0

30

0.5

1

100.0

30

0.5

T-50 KDX Residence Nihombashi Ningyocho

1

100.0

18

0.3

1

100.0

19

0.3

T-51 KDX Residence Jiyugaoka

1

97.7

39

0.7

1

92.8

39

0.6

100.0

123

1.9

T-52 KDX Residence Togoshi

1

96.7

119

2.1

1

T-53 KDX Residence Shinagawa Seaside

1

97.1

86

1.5

1

99.1

86

1.3

T-54 KDX Residence Ojima

1

100.0

63

1.1

1

95.7

62

0.9

T-55 KDX Residence Oyama

1

95.3

90

1.6

1

98.1

93

1.4

97.3

130

2.0

T-56 KDX Residence Hanzomon

1

100.0

130

2.3

1

T-57 B-Site Akihabara

1

100.0

23

0.4

1

100.0

23

0.4

T-58 KDX Residence Kagurazaka Dori

1

100.0

39

0.7

1

95.8

52

0.8

T-59 KDX Residence Sendagi

1

100.0

64

1.1

1

100.0

65

1.0

93.2

41

0.6

Tokyo Metropolitan Area

T-60 KDX Residence Seijo

1

97.5

40

0.7

1

T-61 KDX Residence Akihabara

1

97.0

39

0.7

1

90.9

39

0.6

T-62 KDX Residence Iriya

1

98.6

38

0.7

1

100.0

38

0.6

T-63 KDX Residence Tachikawa

1

92.6

98

1.7

1

95.4

99

1.5

T-64 KDX Residence Tsurumi

1

100.0

52

0.9

1

98.4

53

0.8

40

0.6

Residential

T-65 KDX Residence Morishita Chitose

1

97.4

38

0.7

1

98.7

T-66 KDX Residence Akasaka

1

96.6

37

0.7

1

100.0

37

0.6

T-67 KDX Residence Kanda

1

100.0

27

0.5

1

100.0

28

0.4

T-68 KDX Residence Ebisu

1

100.0

96

1.7

1

100.0

98

1.5

100.0

31

0.5

T-69 KDX Residence Nishi-magome

1

96.1

30

0.5

1

T-70 KDX Residence Nishi-azabu

1

97.3

38

0.7

1

96.9

38

0.6

T-71 KDX Residence Azabu Sendaizaka

1

100.0

25

0.5

1

96.2

26

0.4

T-72 KDX Residence Waseda Tsurumaki

1

100.0

21

0.4

1

97.6

22

0.3

97.8

24

0.4

T-73 KDX Residence Bunkyo Yushima

1

100.0

25

0.4

1

T-74 KDX Residence Kamishakujii

1

93.8

23

0.4

1

97.9

23

0.4

T-75 KDX Residence Shin-otsuka

1

100.0

22

0.4

1

100.0

22

0.3

T-76 KDX Residce Sakurajosui

1

85.5

27

0.5

1

100.0

28

0.4

100.0

29

0.4

T-77 KDX Residence Ryogoku

1

93.4

27

0.5

1

T-78 KDX Residence Toyosu

1

100.0

79

1.4

1

100.0

159

2.4

R-2

KDX Jozenji Dori Residence

1

93.0

48

0.9

1

97.0

51

0.8

R-3

KDX Izumi Residence

1

94.8

42

0.7

1

92.1

43

0.7

95.1

47

0.7

Other Regional Area

R-4

KDX Chihaya Residence

1

96.2

48

0.8

1

R-5

KDX Sakaisuji Hommachi Residence

1

97.0

107

1.9

1

98.5

110

1.7

R-6

KDX Shimmachi Residence (Note4)

1

96.8

37

0.7

－

－

32

0.5

R-7

KDX Takarazuka Residence

1

100.0

58

1.0

1

96.4

58

0.9

R-8

KDX Shimizu Residence

1

95.9

70

1.2

1

96.7

74

1.1

100.0

33

0.5

KDX Residence Odori Koen

1

97.4

33

0.6

1

R-10 KDX Residence Kikusui Yojo

1

94.4

37

0.7

1

90.3

38

0.6

R-11 KDX Residence Toyohira Koen

1

89.1

21

0.4

1

95.2

22

0.3

R-13 KDX Residence Ichiban-cho

1

97.3

26

0.5

1

92.4

26

0.4

88.9

19

0.3

R-9

R-14 KDX Residence Kotodai

1

100.0

20

0.4

1

R-15 KDX Residence Izumi Chuo

1

94.0

22

0.4

1

95.8

23

0.3

R-16 KDX Residence Higashi-sakura I

1

93.0

97

1.7

1

90.4

97

1.5

13th
(From February 1, 2018 to July 31, 2018)

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

Area

Use

No.

Name of property

R-17 KDX Residence Higashi-sakura II

RentalOccupancandRatio ofOccupancy
Rental andNumber ofy rate atotherrentalNumber of rate at the
Ratio of rental
other operating
tenants at the the end of operating revenue to tenants at the end ofrevenue to total
revenues
end of period period revenues total rental end of period period
rental revenues(Million yen)
(Note 1)(%)
(Million revenues(Note 1)(%)(%)
(Note 3)(Note 2)yen)(%)
(Note 2)
(Note 3)
1
1
89.5
38
0.6
95.5
38
0.7

Other Regional Area

Residential

R-18 KDX Residence Jingumae

1

91.4

38

0.7

1

96.9

39

0.6

R-19 KDX Residence Nishi-oji

1

97.0

32

0.6

1

100.0

33

0.5

R-20 KDX Residence Saiin

1

98.0

18

0.3

1

96.1

18

0.3

R-21 KDX Residence Namba

1

97.0

56

1.0

1

95.5

58

0.9

R-22 KDX Residence Namba-minami

1

96.9

56

1.0

1

97.3

54

0.8

R-23 KDX Residence Shin-osaka

1

97.7

20

0.4

1

100.0

21

0.3

R-24 KDX Residence Ibaraki I・II

1

96.7

53

0.9

1

100.0

55

0.8

R-25 KDX Residence Toyonaka-minami

1

95.6

28

0.5

1

95.8

29

0.4

R-26 KDX Residence Moriguchi

1

100.0

24

0.4

1

96.5

24

0.4

R-27 KDX Residence Sannomiya

1

100.0

40

0.7

1

98.3

39

0.6

R-28 Ashiya Royal Homes

1

100.0

66

1.2

1

100.0

65

1.0

R-29 KDX Residence Funairi Saiwai-cho

1

98.4

27

0.5

1

98.4

28

0.4

R-30 KDX Residence Tenjin-higashi II

1

95.2

30

0.5

1

95.2

30

0.5

R-32 KDX Residence Nishi Koen

1

91.2

30

0.5

1

94.9

30

0.5

R-33 KDX Residence Hirao Josui-machi

1

95.7

28

0.5

1

100.0

30

0.5

R-34 Melody Heim Gotenyama

1

100.0

21

0.4

1

94.5

21

0.3

R-35 Leopalace Flat Shin-sakae

1

100.0

121

2.1

1

100.0

121

1.8

R-36 KDX Residence Koman Yamate

1

95.9

33

0.6

1

97.4

31

0.5

R-37 KDX Residence Hommachibashi

1

97.7

109

1.9

1

98.9

107

1.6

R-38 KDX Residence Minami-kusatsu

1

1

100.0

101

1.5

177

2.7

R-39

KDX Residence Ohori Harbor View
Tower

1

95.1

98

1.7

91.6

180

3.2

1

90.5

R-40 KDX Residence Minami-sanjo

1

95.4

53

0.9

1

92.3

53

0.8

R-41 Serenite Kita-kyuhoji

1

96.4

41

0.7

1

98.7

42

0.6

R-42 Serenite Nishinomiya Hommachi

1

98.1

23

0.4

1

88.7

22

0.3

R-43 KDX Residence Nishijin

1

88.6

55

1.0

1

89.5

54

0.8

114

97.0

5,627

100.0

113

96.8

1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)

1

100.0

1

100.0

1

100.0

1

100.0

Undisclosed(Note 5)
Undisclosed(Note 5)
Undisclosed(Note 5)
Undisclosed(Note 5)

Undisclosed(Note 5)
Undisclosed(Note 5)
Undisclosed(Note 5)
Undisclosed(Note 5)1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)

1

100.0

1

100.0

1

100.0

Undisclosed(Note 5)
Undisclosed(Note 5)
Undisclosed(Note 5)

Undisclosed(Note 5)
Undisclosed(Note 5)
Undisclosed(Note 5)1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)

Subtotal

Tokyo Metropolitan Area

Healthcare

Other Regional Area

H-1

Irise Kamata/Yuseien

－

－

－

－

H-2

Nichii Home Nakano-Minamidai

－

－

－

－

H-3

Joy Stage Hachioji

－

－

－

－

H-4

Yuimaru Hijirigaoka

－

－

－

－

H-5

Nichii Home Tama Plaza

－

－

－

－

H-6

Ten

－

－

－

－

H-7

Irise Nishioka

－

－

－

－

H-8

Izarie Eniwa Building

－

－

－

－

H-9

Sawayaka Sakura Nibankan

－

－

－

－

H-10 Activa Biwa

－

－

－

－

H-11 Sompo Care LAVIERE Kobe Tarumi

－

－

－

－

H-12 Granda Mondo Yakujin

－

－

－

－

H-13 Excellent Nishinomiya

－

－

－

－

5,790

87.0

13th
(From February 1, 2018 to July 31, 2018)

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

Area

Use

No.

Name of property

Rental andOccupanc
Ratio ofOccupancy
other
Rental andNumber of y rate atrentalNumber of rate at the
Ratio of rental
operatingother operating
tenants at the the end ofrevenue to tenants at the end ofrevenue to total
revenues
revenues
end of period period
total rental end of period period
rental revenues(Million(Million yen)
(Note 1)(%)
revenues(Note 1)
(%)
(%)
yen)
(Note 3)(Note 2)(%)
(Note 2)
(Note 3)

Other Regional Area

Healthcare

OthersTokyo
Metropolitan Area

Other

H-15 Excellent Kitano

ー

ー

ー

ー

1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)

H-14 Gran Hills Ogawarako

ー

ー

ー

ー

1

100.0

Undisclosed(Note 5)

Undisclosed(Note 5)

Subtotal

－

－

－

－

15

100.0

820

12.3

－

100.0

43

0.7

100.0

43

0.8

97.0

5,671

100.0

128

97.6

6,655

100.0

T-9

Cosmo Heim Motosumiyoshi(land with leasehold interest)

－

Total

114

(Note1) Regarding residential, in the “number of tenants” column, if a master lease agreement has been executed with a master lease company, 1 is entered as the number oftenants. As of January 31, 2018, master lease agreements had been executed for all investment assets of the Investment Corporation except for one case of ownershipof leased land and Raffine Minami-magome; the “total” for the “number of tenants” is the sum of the master lease agreements for the properties (running number);and for the properties with no master lease agreement, the number of end tenants is entered. There are a total of 15 master lease companies.
"Total number of tenants" of the healthcare facility lists the total number of tenants of the master lease contract pertaining to each asset effective as of the end of July2018.
occupancy rate for the portfolio as a whole (excluding(Note2) The “occupancy rate” = leased area / leasable area x 100. The “total” for the “occupancy rate” column is theleased land). The occupancy rate for the portfolio as a whole, excluding leased land (area total 3,040.11m 2), was 97.0% in the 12th fiscal period and 97.6% in thefiscal period.
(Note3) “Rental and other operating revenues” is the sum of a property’s rental business income for each fiscal period.
(Note4) It sold on 6th July 2018.
(Note5) Not disclosed because tenant's consent has not been obtained.

(Details of investment securities)
Investment securities as of July 31, 2018 are as follows.
Assessed value(Million yen)
(Note 5)

Book value
Name of assets

Type(Million yen)

Unit

Unit

Unit

Value

value

Gain
(Loss) on

Remarks

valuation

Value(Million yen)value

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

Subordinatedsilentpartnership
equityinterest

－

－

78

－

78

－

－

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

Subordinatedsilentpartnership
equityinterest

－

－

122

－

122

－

－

Equity interests in TK
property fund with G.K.
Tropic Ⅱ as operator (Note 3)

Subordinatedsilentpartnership
equityinterest

－

－

113

－

113

－

－

Equity interests in TK
property fund with G.K.
KSLF8 as operator (Note 4)

Silentpartnership
equityinterest

－

－

198

－

198

－

－

－

－

512

－

512

－

－

Total

(Note 1) TK property fund owns trust beneficiary interests in real estate for “KDX Residence Shukugawa Hills”. The Investment Corporation acquired
the asset during the 13th fiscal period as of August 2, 2018.
(Note 2) TK property fund owns trust beneficiary interests in real estate for “KDX Residence Asagaya”, “KDX Residence Hiyoshi” and “Serenite Kobe
Motomachi” The Investment Corporation acquired the asset during the 13th fiscal period as of August 2, 2018.
(Note 3) TK property fund owns trust beneficiary interests in real estate for “Arute ishiyagawa”, “Serabi Ebisu”.
(Note 4) This indicates silent partnership equities succeeded from JSL through the Merger. TK property fund owns trust beneficiary interest in real estatefor “Canadian Hill,” “Anesis Hyogo,” “Orage Suma,” “Rococo-riha” and “Anesis Teradacho.” The Investment Corporation acquired these assets
on August 2, 2018.
(Note 5) Assessed value indicates book value. As to equity interests in TK property fund with G.K. Tropic One as the operator, loss on valuation of
investment securities of 10 million yen was recorded in the 13th fiscal period. Furthermore, loss on valuation of investment securities of 11
million yen was recorded in the 13th fiscal period with regard to equity interests in TK property fund with G.K. Tropic Two as the operator.

(4)

Details of specified transaction

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

Transaction

Fair value

Maturing after 1 year
(Note 1)

(Note 1)

(Million yen)
(Note 2) (Note 3)

Interest rate swap

Over-the-counter(Floating-rate to fixed-rate

89,30081,300△2

89,30081,300△2interest) interest)
Total

－

(Note 1)

The interest rate swap contract amount, etc. is based on the assumed principal.

(Note 2)

With respect to those meeting the requirements for special treatment under the accounting standards for financial products, the fair value is notlisted.

(Note 3)

(5)

Appraised at the price presented by the financial institution that is the other party in the transaction.

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

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

4. Capital expenditures for property(1)
Schedule of capital expenditures
The current significant plan for capital expenditures on property maintenance for the six months ending January 31,
2019 for real properties and real estate related to trust beneficiary interest the Investment Corporation owns. The
amounts of estimated cost shown in the below table are including expenses that will be charged to income.
Estimate cost(Million yen)No.

Name of property

Address

PurposeNishinomiya- Major renewal

R-45

KDX Residence Shukugawa Hills

T-1

KDX Daikanyama Residence

T-27

KDX Residence Yotsuya

R-27

KDX Residence Sannomiya

H-3

Joy Stage Hachioji(2)

Capital expenditures for the six months ended July 31, 2018

Scheduled term
for construction or
maintenanceShibuya-ku, Major renewal

construction

Tokyo

From August 2018

From August 2018
To January 2019

Shinjuku-ku, Major renewal

construction

To January 2019

Kobe-shi,

Major renewal

From August 2018

Hyogo

construction

To January 2019

construction

Tokyo

165

－

－

117

－

－

75

－

－

44

－

－

40

－

－

From August 2018

Tokyo

Hachioji-shi Major renewal

Total ofadvanced
payment

Total

construction (1st phase) To January 2019

shi, Hyogo

Payment
for thesixmonthsended
January
31, 2018

From August 2018
To January 2019

The outlines of major construction categorized into capital expenditure for the six months ended July 31, 2018 are as
follows.
The construction cost for the period amounted to ¥727 million, consisting of ¥436 million of capital expenditures and¥290 million of repair and maintenance expenses charged to income.
No.

Name of property

T-13

KDX Residence Shirokane I

T-15

R-11

R-43

R-43

KDX Residence Shirokane II

KDX Residence Toyohira Koen

KDX Residence Nishijin

KDX Residence Nishijin

Address

PurposeMinato-ku,
Tokyo

Major renewal construction

Term
From February 2018

Capital expenditures(Million yen)
69

To July 2018

Minato-ku,
Tokyo

Major renewal construction

From February 201856

To July 2018

Sapporo-shi,
Hokkaido

Major renewal construction(2nd phase)

From January 201832

To March 2018

Fukuoka-shi, Intercom facilities exchange

From July 2018

construction

To July 2018

Fukuoka42

To July 2018

Fukuoka-shi Major renewal construction
Fukuoka

From May 20189

Others

227

Total

436

(3)

Reserved funds for long-term maintenance plan

In accordance with its long-term repair and maintenance plan for each property, the Investment Corporation sets aside,from the cash flow during a fiscal period, repair and maintenance reserves designed to finance payment of future
medium- to long-term major repair and maintenance work.
(Million yen)

Term

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

10th
From Aug. 1, 2016
to Jan. 31, 2017

11th
From Feb. 1, 2017
to Jul. 31, 2017

12th
From Aug. 1, 2017
to Jan. 31, 2018

13th
From Feb. 1, 2018
to Jul. 31, 2018

938

1,074

1,161

1,295

1,384

149

149

151

263

302

13

62

17

174

954

1,074

1,161

1,295

1,384

732

Reserve balance at thestart of the fiscal
periodReserves set aside
during the fiscal period
Reserves drawn down
during the fiscal period
Amount carriedforward to the next
fiscal period

5. Expenditures and liabilities(1)
Details of asset management expenses(Thousand yen)

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

Item①

Asset management fees②

(Note 1)

13th
From February 1, 2018
to July 31, 2018377,361

413,158

Asset custody fees

11,365

11,583③

Administrative service fees

39,023

41,201④

Directors’ compensation

4,500

7,500

⑤

Other operating expenses (Note 2)

252,166

629,922

Total

684,417

1,103,366(Note1) There are other asset management fees in addition to the amount set forth above: asset management fees pertaining to the subordinated silent
partnership (the 12th fiscal period: 1,300 thousand yen and the 13th fiscal period: 1,100 thousand yen) and asset management fees pertaining toproperty acquisitions (the 12th fiscal period: 91,000 thousand yen and the 13th fiscal period: 7,370 thousand yen ) and sold fee pertaining toproperty sold (the 13th fiscal period: 7,100 thousand yen) that were calculated into the book value of each property.
The fee for the merger ( the 13th fiscal period: 292,085 thousand yen) is included in other operating expenses (merger-related expenses).
(Note2) Other operating expenses include merger-related expenses incurred in connection with the Merger (the 12th fiscal period: 67,446 thousand yen
and the 13 th period 395 984 thousand yen).

(2)Status of Interest-bearing debt

Short-term debt and long-term debt consist of the following as of July 31, 2018.

Classification

Drawdown
Date

Lender

Payment
due date

Sumitomo Mitsui
Banking Corporation

July 31, 2017

1,000

－

0.455

July 31, 2018

Shinsei Bank, Limited(Note6)

July 31, 2017

－

－

0.354

July 30, 2018

Sumitomo Mitsui
Banking Corporation (Note6)

July 31, 2017

－

－

0.354

July 30, 2018

Short-term
Sumitomo Mitsuiloans payable
Banking Corporation

August 1, 2017

830

－

0.455

July 31, 2018

Mizuho Bank, Ltd

August 1, 2017

800

－

0.455

July 31, 2018

Sumitomo Mitsui
Banking Corporation

July 31, 2018

－

1,830

0.404

July 31, 2019

Mizuho Bank, Ltd

July 31, 2018

－

800

0.404

July 31, 2019

2,630

2,630

Sumitomo Mitsui
Banking Corporation

3,250

3,250

MUFG Bank, Ltd (Note8)

2,000

2,000

1,000

1,000

500

500

1.052

August 31, 2018

Sumitomo Mitsui Trust Bank,
Limited500

500

Mizuho Trust & Banking Co.,
Ltd.

500

500

Mizuho Bank, Ltd.

250

250

3,000

3,000

1.088

August 31, 2018

Shinsei Bank, Limited(Note 6)－－

Sumitomo Mitsui Banking
Corporation (Note 6）

－

－

－

－

Mizuho Bank, Ltd (Note 6)－－

Nippon Life Insurance
Company (Note 6)－－

SubtolalAozora Bank, Ltd.
August 7, 2013

Resona Bank, Limited

Development Bank of Japan
Inc.(Note 3)

Current
portion of
long-term
borrowings

Balance
Balance Averageat theinterest
at the end
rate
beginningof period (Note 1)of period(mln yen) (Note 2)(mln yen)

MUFG Bank, Ltd (Note 6）(Note 7)

August 7, 2013

July 29, 2015

Use

Remarks

Repaymentof principal(Note4)in full on
maturity dateUnsecured/
Unguarante
ed

Repayment
Unsecured/of principal(Note 4) Unguarante
in full onedmaturity date
0.435

July 30, 2018

Sumitomo Mitsui Banking
Corporation (Note 8）

August 22, 2017

1,000

1,000

0.480

February 28,
2019

MUFG Bank, Ltd (Note 5）(Note 7)

August 22, 2017

500

500

0.480

February 28,
2019

Sumitomo Mitsui Banking
Corporation

July 30, 2018

－

500

0.354

July 31, 2019

Shinsei Bank, Limited

July 30, 2018

－

500

0.354

July 31, 201912,50013,500

SutotalDebt
Financing
MethodClassification

Balance
Balance Averageat theinterest
at the end
rate
beginningof period (Note 1)of period(mln yen) (Note 2)(mln yen)

Payment
due date

LenderDrawdown
Date

MUFG Bank, Ltd (Note 8）

January 31, 2014

1,000

1,000

1.109

January 31,
2021

Sumitomo Mitsui Banking
Corporation

January 31, 2014

1,000

1,000

1.221

July 31, 2021

Aozora Bank, Ltd.

March 28, 2014

1,350

1,350

1.183

March 31, 2021

Sumitomo Mitsui Banking
Corporation

April 30, 2014

2,000

2,000

1.267

April 30, 2022

Aozora Bank, Ltd.

April 30, 2014

1,500

1,500

1.267

April 30, 2022

April 30, 2014

1,000

1,000

1.267

April 30, 2022

April 30, 2014

1,000

1,000

1.267

April 30, 2022

1,100

1,100

1,100

1,100

600

600

0.916

August 7, 2021

Aozora Bank, Ltd.

350

350

Resona Bank, Ltd.

300

300

Mizuho Trust & Banking Co.,
Ltd.

300

300

1,000

1,000

0.996

August 7, 2021

Sumitomo Mitsui Banking
Corporation

400

400

MUFG Bank, Ltd (Note 8)

400

400

300

300

1.254

200

200

August 7, 2023

Resona Bank, Ltd.
Mizuho Trust & Banking Co.,
Ltd.

200

200

Aozora Bank, Ltd.

150

150

MUFG Bank, Ltd (Note 8)Long-term
Resona Bank, Limited
loans payable
Long-term Sumitomo Mitsui Banking
loans payable Corporation
MUFG Bank, Ltd (Note 8)
Mizuho Bank, Ltd.

Development Bank of Japan
Inc (Note 3)

Mizuho Bank, Ltd.

August 7, 2014

August 7, 2014

August 7, 2014

Debt
Financing
MethodUse

Remarks

Repayment
Unsecured/of principal(Note 4) Unguarante
in full onedmaturity date

Development Bank of Japan
Inc (Note 3)

August 7, 2014

500

500

1.320

August 7, 2023

Sumitomo Mitsui Banking
Corporation

August 29, 2014

600

600

0.945

August 31, 2021

MUFG Bank, Ltd (Note 8)

August 29, 2014

600

600

0.945

August 31, 2021

August 29, 2014

500

500

0.945

November 14, 2014

950

950

1.083

Sumitomo Mitsui Banking
Corporation

November 28, 2014

2,000

2,000

0.804

August 31, 2021 Repayment
Unsecured/of principal(Note 4) Unguarante
Movember 30,
in full oned2022
maturity dateNovember 30,
2020

MUFG Bank, Ltd (Note 7)

November 28, 2014

1,500

1,500

0.689

November 30,
2019

Sumitomo Mitsui Banking
Corporation

February 5, 2015

1,200

1,200

0.875

January 31,
2022

MUFG Bank, Ltd (Note 8)

February 5, 2015

1,200

1,200

1.105

January 31,
2024

Aozora Bank, Ltd.

April 30, 2015

2,000

2,000

0.875

April 30, 2022

Resona Bank, Ltd.

April 30, 2015

1,500

1,500

0.987

April 30, 2023

MUFG Bank, Ltd (Note 8)

April 30, 2015

2,000

2,000

1.100

April 30, 2024

Sumitomo Mitsui Banking
Corporation

April 30, 2015

1,000

1,000

1.265

April 30, 2025

Shinsei Bank, Limited(Note 6)

July 29, 2015

－

1,750

0.729

July 29, 2022

Aozora Bank, Ltd.
Long-termloans payable Mizuho Bank, Ltd.

Sumitomo Mitsui Banking
Corporation (Note 6)

－

1,750

MUFG Bank, Ltd (Note 6)(Note 7)－

1,000

Mizuho Bank, Ltd. (Note 6)－

500

Resona Bank, Ltd. (Note 6)－

500

Mizuho Trust & Banking Co.,
Ltd. (Note 6)－500

Shinsei Bank, Limited(Note 6)－

1,100

Sumitomo Mitsui Banking
Corporation (Note 6)

－

1,100

－

1,000

Mizuho Bank, Ltd. (Note 6)－300

Sompo Japan Nipponkoa
Insurance Inc (Note 6)

－

1,000

MUFG Bank, Ltd (Note 6)(Note 7)

July 29, 2015

1.115

July 29, 2022

Aozora Bank, Ltd.

August 31, 2015

300

300

0.678

August 31, 2020

Resona Bank, Ltd.

August 31, 2015

1,100

1,100

0.923

August 31, 2022

Mizuho Trust & Banking Co.,Ltd.

August 31, 2015

700

700

0.923

August 31,2022

Sumitomo Mitsui Trust Bank,
Limited.

August 31, 2015

950

950

1.047

August 31,2023

MUFG Bank, Ltd (Note 8)

August 31, 2015

1,700

1,700

1.169

August 31,2024

Mizuho Bank, Ltd.

August 31, 2015

950

950

1.169

August 31,2024

Sumitomo Mitsui Banking
Corporation

August 31, 2015

2,000

2,000

1.345

August 31,2025

Classification

Balance
Balance Averageat theinterest
at the end
rate
beginningof period (Note 1)of period(mln yen) (Note 2)(mln yen)

Payment
due date

Debt
Financing
MethodLenderDrawdown
Date

Development Bank of Japan
Inc. (Note 3)

August 31, 2015

1,000

1,000

1.193

August 31, 2024

MUFG Bank, Ltd (Note 8)

October 27, 2015

300

300

0.624

October 27, 2020

MUFG Bank, Ltd (Note 8)

October 27, 2015

1,000

1,000

1.156

April 27, 2025

MUFG Bank, Ltd (Note 8)

April 28, 2016

1,000

1,000

0.819

April 28, 2025

Sumitomo Mitsui Banking
Corporation

April 28, 2016

2,500

2,500

0.903

April 30, 2026

MUFG Bank, Ltd (Note 3)(Note 8)August 1, 2016

1,000

1,000

0.660

July 31, 2025

Mizuho Bank, Ltd. (Note 3)

August 30, 2016

1,500

1,500

0.816

August 31, 2026

Aozora Bank, Ltd.

August 31, 2016

1,000

1,000

0.713

August 31, 2024

Sumitomo Mitsui Trust Bank,
Limited.

August 31, 2016

1,000

1,000

0.797

August 31, 2025

Resona Bank, Ltd.

August 31, 2016

500

500

0.797

August 31, 2025

MUFG Bank, Ltd (Note 3)(Note 8)August 31, 2016

2,000

2,000

0.670

August 31, 2025

Mizuho Trust & Banking Co.,
Ltd. (Note 3)

August 31, 2016

500

500

0.751

August 31, 2025

Sumitomo Mitsui Banking
Corporation

August 31, 2016

3,000

3,000

0.906

August 31, 2026

Development Bank of Japan
Inc. (Note 3)

November 1, 2016

1,000

1,000

0.773

October 31, 2025

Resona Bank, Ltd.

August 22, 2017

1,000

1,000

0.900

August 22, 2027

Sumitomo Mitsui Trust Bank,
Limited.

August 22, 2017

1,000

1,000

0.900

August 22, 2017

1,000

1,000

0.900

August 22, 2017

1,200

1,200

0.928

August 22, 2027 Repayment
Unsecured/of principal
August 22, 2027 in full on (Note 4) UnguaranteedmaturitydateAugust 22, 2027

Development Bank of Japan
Inc. (Note 3)

August 22, 2017

1,000

1,000

0.928

August 22, 2027

Mizuho Bank, Ltd. (Note 3)

August 22, 2017

500

500

0.928

August 22, 2027

The Bank of Fukuoka, Ltd.
(Note 3)

August 22, 2017

500

500

0.928

August 22, 2027

Sumitomo Mitsui Banking
Corporation

August 31, 2017

1,500

1,500

0.501

February 28, 2023

MUFG Bank, Ltd (Note 8)）

August 31, 2017

1,500

1,500

0.501

February 28, 2023

Aozora Bank, Ltd.

August 31, 2017

1,500

1,500

0.582

February 29, 2024

Sumitomo Mitsui Banking
Corporation

August 31, 2017

1,000

1,000

0.582

February 29, 2024

MUFG Bank, Ltd (Note 8)

August 31, 2017

1,000

1,000

0.582

February 29, 2024

Mizuho Bank, Ltd.

August 31, 2017

500

500

0.624

August 31, 2024

Mizuho Trust & Banking Co.,
Ltd. (Note 3)

August 31, 2017

500

500

0.661

August 31, 2024

Sumitomo Mitsui Banking
Corporation

August 31, 2017

1,500

1,500

0.665

February 28, 2025

Resona Bank, Ltd.

August 31, 2017

1,000

1,000

0.749

Sumitomo Mitsui Trust Bank,
Limited.

August 31, 2017

1,000

1,000

0.749

Sumitomo Mitsui Banking
Corporation

July 30, 2018

－

1,000

0.409

Long-term
Shinsei Bank, Limited
loans payable
Mizuho Trust & Banking Co.,
Ltd. (Note 3)

February 28,
2026
February 28,
2026
July 31, 2021

Use

Remarks

Shinsei Bank, Limited

July 30, 2018

－

1,000

0.409

July 31, 2021

MUFG Bank, Ltd (Note 8)

July 30, 2018

－

500

0.409

July 31, 2021

Mizuho Bank, Ltd.

July 30, 2018

－

500

0.409

July 31, 2021

Nippon Life Insurance
Company(Note 3)

July 30, 2018

－

500

0.900

January 30, 2027

73,00087,00088,130103,130

Subtola;Total(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(3)

All debts except for the following Note 3 are borrowing at a floating rate.
Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, with regard toborrowings for which interest rate swap transactions and other derivative transactions were implemented in order to hedge the interest rate
volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps and other derivatives areindicated.
Borrowings is applied at a fixed rate.
All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses are included)
and repayment of debts.
Debts included in the classification of current portion of long-term loans payable from the 13th fiscal period and in of long-term loans payablein the 12th fiscal period.
Debts were succeeded by merger with JSL on March 1, 2018
In line with the absorption-type corporate split of Mitsubishi UFJ Trust and Banking Corporation (splitting company) and MUFG Bank, Ltd.
(succeeding company) on April 16, 2018, loan debt to Mitsubishi UFJ Trust and Banking Corporation has been succeeded to MUFG Bank, Ltd.
MUFG Bank, Ltd changed its company name from The Bank of Tokyo-Mitsubishi UFJ, Ltd. on April 1, 2018.

Investment corporation bonds

Outstanding Investment corporation bonds as of January 31, 2018 are as follows.
Balance attheSeriesDate of issue

beginning of
period(mln yen)First series of unsecured

August 30, 2016

1,000

Balance atthe end of
period(mln yen)
1,000Interest
rate
（%）

0.200

Repayment

Repayment

date

methodRemarks(Note 1)

(Note 2)

August 30,
2021

investment corporation
bonds
Second series of unsecured

Use

August 30, 2016

1,000

1,000

0.540

August 28,
2026

investment corporation

Repaymentof principal
in full on
maturitybonds
Third series of unsecured

dateAugust 30, 2016

1,000

1,000

0.800

August 30,
2028

investment corporation
bonds
Total

3,000

3,000

Investment corporation bonds were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate and repayment of(Note 1)debts.
(Note 2) Ranking pari passu among the specified investment corporation bonds.

(4)

Short-term corporation bonds
Not applicable(5)

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

No.

Name

Trust
Beneficiary H-15
Interest

Excellent Kitano

Trust
Beneficiary R-6
Interest

KDX Shimmachi Residence

Subordinat
ed SilentPartnership
EquityInterests(Note 1)

Acquisition date

Acquisition
price(Million yen)
(Note)

Gain andBook value
loss(Million(Million(Million yen)
yen)
yen)

July 6, 2018

737

－

－

－

－

－

－

July 6, 2018

1,420

953

436

July 4, 2018

110

－

－

－

－

Sales priceSales date

Equity interests in TK－

property fund with G.K.
TropicⅢas operator

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

(Note 2)

(2)

Sales

Acquisitions and dispositions of other assets
Other than the foregoing real estate properties, asset-backed securities, infrastructure assets and otherinfrastructure-related assets, major assets in general are bank deposits or bank deposits within trust assets.
(3)①

Investigation of specified assets prices, etc.
Real estate properties, etc.
Acquisition
price or Sale

Transaction

Type

No.

Name

Date of acquisition
priceor sale(Million yen)
(Note 1)

(Note1)(note 2)②

value

Appraiser(Million yen)
(Note 2)

Appraisal
date

The Tanizawa Sogo
May 1,
H-15 Excellent Kitano
737
July 6, 2018
783
Appraisal Co., Ltd.
2018
Benefici
Trust
Japan Real Estate
Januaryary
R-6 KDX Shimmachi Residence
1,420
July 6, 2018
1,200
Benefici
Institute31, 2018
Interestary“Acquisition price” and “Sale price” represent the purchase and Sales amount (excluding acquisition costs and consumption taxes) of each
Interest
property or beneficiary right of real estate in trust as stated in the Sales and Purchase Agreement.
“Appraisal value” of specific assets above was calculated in accordance with the guideline of “Real Estate Appraisal Standards, Chapter 3,
Appraisal of Securitized Real Estate.”

Acquisition
Sale

Appraisal

Trust

Investment security and others
Acquisition price Assessed price ofTransaction

Subordinated Silent Partnership equity interests in TK property fundAcquisition Date

(Million yen)specific asset(Note)(Million yen)

110
July 4, 2018141
with G.K. Tropic Ⅲ as operator
The acquisition price is the investment price set forth in a silent partnership equity interest agreement, etc. (excluding expenses required
for the investment), rounded down to the nearest whole million yen.

Acquisition(Note)Name

(A) Investigator

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

With respect to transactions conducted at the Investment Corporation for which a price investigation wasdeemed necessary under the Act on Investment Trust and Investment Corporations, the investigation was assigned
to Ernst & Young ShinNihon LLC. One transaction (acquisition of a silent partnership equity interest) fell under
the period subject to investigation (February 1, 2018 to July 31, 2018), and the Investment Corporation received
a signed report on said transaction from Ernst & Young ShinNihon. For this transaction to acquire a silent
partnership equity interest and 5 interest swap transactions, the Investment Corporation entrusted an investigation
on matters concerning business property pertaining to the silent partnership agreement, particulars of the silent
partnership agreement, the transaction price and particulars of the transaction to acquire said silent partnership
equity interest and of the interest swap contracts, such as the name of counter parties, contract amounts, or theperiod of transactions.
The investigation was not part of the audit of financial statements and does not guarantee the appropriateness ofthe price or the internal control structure.
(4)

Transactions with stakeholders① Transactions
Category

Transaction price (million yen)
Acquisition price (Note 2)

Total amountSale price (Note 2)
847

1,420

Transaction with related-party
GK KSLF6

737（87.0%）

－

（－％）

Total

737

（87.0%）

－

（－％）

②

Amounts of Fees Paid
Transaction with stakeholders

Total paid fees
Category(A)

Paid to(million yen)

Ratio toPaid amount (B)total(million yen)(B)/(A)Space Design, Inc.

0

0.3%

CRE, Inc.

0

0.2%

Property management compensation

228

Building management fees

173

Space Design, Inc.

1

0.6%

Repair and maintenance costs

290

CRE, Inc.

0

0.1%（Note 1）Stakeholders, etc. mean stakeholders, etc. of the asset management company having executed an asset management entrustment agreementwith the Investment Corporation provided in Article 123 of the Order for Enforcement of the Act on Investment Trusts and Investment
Corporations and Article 26, Item 27 of Rules on asset management reports, pertaining to investment trusts and investment corporations of
the Investment Trusts Association, Japan.
（Note 2）‟Acquisition price” and “Sale price” excluded expenses related to aqcuisition or sale and taxes and dues.

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

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

(2) Change to calculation of depreciation amountNot applicable(3) Change to real estate and other infrastructure assets appraisal method
Not applicable(4) Disclosure pertaining to investment trust beneficial right securities, etc.
①
Acquisitions
Not applicable②
Ownership
Not applicable(5) Disclosure pertaining to overseas real estate holding corporations
Not applicable(6) Disclosure pertaining to real estate held by overseas real estate holding corporations
Not applicable
8. Other(1)
Notice① Unitholders general meeting
Not applicable② Board of directors
Overviews of major agreement executions and amendments approved by the Investment Corporation’s board of
directors during the 12th fiscal period are as follows.
Approval dateJuly 24, 2018

Item
New Investment Units
underwriting agreement(2)

Overview
Pertaining to issuance of new investment units, the Investment Corporation
entrusted administrative duties concerning offering of investment units to theunderwriters (SMBC Nikko Securities Inc., Mizuho Securities Co., Ltd. andNomura Securities Co., Ltd.)

Other
Unless otherwise specified, amounts are rounded down and ratios are rounded off.
[Provisional Translation Only]
English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

Financial Statements(13th Fiscal Period: From February 1, 2018 to July 31, 2018)
Independent Auditor’s Report
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Balance Sheet
As of July 31, 2018
13th Fiscal Period
as of July 31, 2018

12th Fiscal Period
as of January 31, 2018

(in thousands of yen)
ASSETS
Current assets
Cash and deposits (Notes 6 and 8)
Cash and deposits in trust (Notes 6 and 8)
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Noncurrent assets
Property, plant and equipment (Notes 13 and 18)
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment, net
Intangible assets
Leasehold right in trust (Notes 13 and 18)
Other
Total intangible assets
Investments and other assets
Investment securities (Notes 8 and 17)
Lease and guarantee deposits
Long-term prepaid expenses
Other (Notes 8 and 9)
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs¥10,029,598
8,749,823
29,18810,855
11,033
18,830,499

1,798,041
84,656,776(7,901,681)
76,755,095
722,432(133,503)
588,929
1,360,078(256,856)
1,103,222
400,899(39,156)
361,742
111,474,267¥6,551,666
3,928,017
24,913
3,557
9,464
1,893
10,519,513

192,081,298

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

1,067,058
7,115
1,074,174-

512,263
39,097916,981
81,989221,707
10,397915,782
80,7431,228,631
166,269,577

1,550,331
194,705,805

Investment unit issuance costs

22,583-

Total deferred assets

22,58324,883¥213,558,887¥176,813,974

Total assets－2－

24,461421

13th Fiscal Period
as of July 31, 2018

12th Fiscal Period
as of January 31, 2018

(in thousands of yen)
LIABILITIESCurrent liabilities
Operating accounts payable¥609,170¥473,021

Short-term loans payable (Notes 8 and 20)

2,630,000

2,630,000

Current portion of long-term loans payable (Notes 8, 9 and 20)
Accounts payable-otherAccrued expenses
Income taxes payable

13,500,000
284,251
26,489605

11,000,000
239,241
26,142604

Accrued consumption taxes

63,856-

Advances received
Deposits received

958,81254,159779,137
53,143

Other
Total current liabilities
Noncurrent liabilities

13-

18,127,358

15,201,290

Investment corporation bonds (Notes 8 and 19)

3,000,000

3,000,000

Long-term loans payable (Notes 8, 9 and 20)
Tenant leasehold and security deposits in trust

87,000,000
2,330,206

74,500,000
1,462,549

Tenant lump sum deposits in trust

4,205,076

-

Other

150,601-

96,685,885

78,962,549

114,813,244

94,163,839

Unitholders' equity
Unitholders' capital
Surplus80,132,379

80,132,379

Capital surplus

13,187,100-

Unappropriated retained earnings

5,428,676

2,437,011

18,615,776
98,748,155

2,437,011
82,569,390(2,512)80,743

Total noncurrent liabilities
Total liabilities
NET ASSETS

Total surplus
Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Notes 8 and 9)(2,512)80,743

Total net assets (Note 3)

Total valuation and translation adjustments

98,745,643

82,650,134

Total liabilities and net assets¥213,558,887¥176,813,974

See accompanying notes to the financial statements.

－3－

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Income and Retained Earnings
For the period from February 1, 2018 to July 31, 2018
13th Fiscal Period
from February 1, 2018
to July 31, 2018

12th Fiscal Period
from August 1, 2017
to January 31, 2018

(in thousands of yen)
Operating revenues
Rent revenue-real estate (Note 4)
Other lease business revenue (Note 4)
Gain on sales of real estate property (Note 4)
Dividends income
Total operating revenues
Operating expenses
Expenses related to rent business (Note 4)
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Merger expenses
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Dividends and redemption-prescription
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing expenses
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on negative goodwill
Total extraordinary income¥6,152,086
503,250
436,817
5,164

Income before income taxes
Income taxes (Note 10)
Current
Deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings

7,097,319¥5,235,620
435,685
10,132
5,681,438

2,554,551
413,158
11,583
41,2017,500
395,984
233,938
3,657,918
3,439,400

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

15
293
56
364

12
350
363

441,829
7,593
145,787
1,878
421
108
597,619
2,842,146

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

2,574,896
2,574,896
5,417,042

2,353,130

605
605
5,416,437
12,239¥5,428,676

604
9
614
2,352,516
84,495¥2,437,011

See accompanying notes to the financial statements.

－4－

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Changes in Net Assets
For the period from February 1, 2018 to July 31, 2018
Valuation andtranslation
adjustments

Unitholders' equity
Surplus
Unitholders'
capitalUnappropriatedretainedearnings

CapitalsurplusTotal
unitholders'equityTotal
surplusDeferred gains
or losseson hedges

Total net assets(in thousands of yen)
Balance as of July 31,
2017¥ 80,132,379 \- \2,400,002 \2,400,002 \

82,532,381

\

-

-

(2,315,507)(2,315,507)(2,315,507)-(2,315,507)--

2,352,516

2,352,516

2,352,516-

2,352,516

-

-

-

-

-

54,116

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

91,125- ¥2,437,011 ¥2,437,011 ¥

82,569,390

26,626\82,559,008

Changes of items
during the period
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders' equity
Total changes of items
during the period
Balance as of January
31, 2018 (Note 5)¥ 80,132,379 ¥¥

80,743¥82,650,134

Changes of items
during the period
Increase by merger-

13,187,100-

13,187,100

13,187,100-

13,187,100

Dividends fromsurplus--(2,424,772)(2,424,772)(2,424,772)-(2,424,772)--

5,416,437

5,416,437

5,416,437-

5,416,437

-

-

-

-

-

(83,255)(83,255)-

13,187,100

2,991,665

16,178,765

16,178,765(83,255)

16,095,509

13,187,100 ¥5,428,676 ¥ 18,615,776 ¥Net income
Net changes of
items other thanunitholders' equity
Total changes of items
during the period
Balance as of July
31, 2018 (Note 5)¥

80,132,379 ¥

98,748,155

See accompanying notes to the financial statements.

－5－¥(2,152)¥

98,745,643

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATIONStatement of Cash Flows
For the period from February 1, 2018 to July 31, 2018
13th Fiscal Period
from February 1, 2018
to July 31, 2018

12th Fiscal Period
from August 1, 2017
to January 31, 2018

(in thousands of yen)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Gain on negative goodwill
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Decrease in net property, plant and equipment held in trust due to sale
Other, net¥5,417,042
1,144,883(2,574,896)
1,878
421
(15)
449,423(3,782)
9,464(713)(28,792)(102,769)
62,16015,122(1,198)953,749
18,303¥2,353,130
921,858
1,878
19,618(12)
417,880(92)(9,464)
1,274
68,56937,833(6,135)
12,172(151,528)
3,018

Subtotal

5,360,283

3,670,003

Interest income received
Interest expenses paid
Income taxes (paid) refund

15(459,405)(6,005)12(415,950)(2,693)

Net cash provided by (used in) operating activities

4,894,888

3,251,371(1,053,115)(7,762)(111,529)
12,232(134,277)
161,089(44,212)625,414(9,828,503)(133,725)
3,240(142,165)
131,628-(552,161)(9,969,526)

2,630,000(3,630,000)
4,500,000(3,500,000)(2,709,508)

1,630,000
18,700,000(11,000,000)(2,317,102)(2,709,508)

7,012,897

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Purchase of investment securities
Proceeds from investment securities
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Repayments of tenant lump sum deposits in trust
Proceeds from tenant lump sum deposits in trust
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents

1,633,218

294,741

Cash and cash equivalents at the beginning of period

10,479,684

10,184,942

Increase in cash and cash equivalents resulting from merger

6,666,519-

Cash and cash equivalents at the end of period (Note 6)¥18,779,421¥10,479,684

See accompanying notes to the financial statements.

－6－

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION

Notes to Financial Statements
For the period from February 1, 2018 to July 31, 2018

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Kenedix Residential Next Investment Corporation (Note) (“the Investment Corporation”) was established on November 15, 2011 under the Act
on Investment Trusts and Investment Corporations of Japan (“the Investment Trust Act”). On April 26, 2012, the Investment Corporation was listedon the Real Estate Investment Trust Market of the Tokyo Stock Exchange (Securities Code: 3278). Subsequently, the Investment Corporation
raised funds through three public offerings and other means including global offerings and third-party allotments. The Investment Corporation
implemented a 2-for-1 split of its investment units held by unitholders set forth or recorded in the final unitholder registry on February 28, 2018 with
March 1, 2018 as the effective date. And also on March 1, 2018, the Investment Corporation conducted an absorption-type merger (“the Merger”)
whereby the Investment Corporation was the surviving corporation and Japan Senior Living Investment Corporation (“JSL”) was the dissolving
corporation. As the result, as of July 31, 2018, the end of the 13th fiscal period, the number of investment units issued and outstanding totaled
782,928 units.
(Note) The Investment Corporation also changed its corporate name from Kenedix Residential Investment Corporation to Kenedix Residential
Next Investment Corporation on March 1, 2018.
The Investment Corporation is externally managed by Kenedix Real Estate Fund Management, Inc. (“the Asset Management Company”), a
company that was formed with personnel from Kenedix, Inc. and adheres to the core philosophies of Kenedix, Inc., that is, to provide management
services from the perspective of real estate investors as an independent real estate management company. As the asset manager, the AssetManagement Company shall provide flexible and speedy real estate investment and management services based on thestrategies of theInvestment Corporation: “Flexible pursuit for appropriate investment and profit opportunities with comprehension of the real estate market trends”
and “Speedy execution based on expeditious information collection and judgement.”
During the 12th fiscal period, the Investment Corporation acquired 2 properties (total acquisition price of ¥9,100 million). During the 13th fiscal
period, the Investment Corporation succeeded 14 properties through the Merger with total acquisition price of ¥28,998 million based on theappraisal value as of March 1, 2018. The Investment Corporation acquired 1 property (acquisition price of ¥737 million) and sold 1 property(disposition price of ¥1,420 million) other than the Merger. As the result, the Investment Corporation has a portfolio comprised of 129 properties(total acquisition price of ¥192,889 million) as of July 31, 2018, the end of the 13th fiscal period.
The occupancy rates of the overall portfolio including land with leasehold interest were 97.0% and 97.6% as of the end of the 12th and 13th
fiscal period, respectively. Furthermore, the average occupancy rates of the properties for residential facilities and for healthcare facilities were
97.0% and 100.0% as of the end of 13th fiscal period.
During the 12th and 13th fiscal period, the Investment Corporation made borrowings of ¥11,000 million and ¥7,130 million for the repayment ofdebt matured. During the 12th fiscal period, the Investment Corporation made new borrowings of ¥9,330 million upon acquiring properties. During
the 13th fiscal period, the Investment Corporation succeeded ¥15,000 million borrowings from JSL on March 1, 2018 by the Merger. As a result,balance of borrowings as of the end of the 12th and 13th fiscal period stood at ¥88,130 million and ¥103,130 million, respectively.
Basis of Presentation
The Investment Corporation maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (Japanese GAAP), including provisions set forth in the Investment Trust Act, the Companies Act of Japan, theFinancial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Investment Corporation, which wereprepared in accordance with Japanese GAAP and were presented in the Securities Report of the Investment Corporation filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial
statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition, the notes tofinancial statements include certain information that might not be required under Japanese GAAP but is presented herein as additional information.
The Investment Corporation fiscal period is a six-month period which ends at the end of January or July. The Investment Corporation does notprepare consolidated financial statements because it has no subsidiaries.

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

Buildings

From February 1, 2018
to July 31, 2018
2-67 years

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

Structures

3-52 years

3-52 years

Machinery and equipment

8-34 years

8-34 years

Tools, furniture and fixtures

6-30 years

6-30 years(C) Intangible Assets
Intangible assets are amortized by the straight-line method.
(D) Long-term Prepaid Expenses
Long-term prepaid expenses are amortized by the straight-line method.
(E) Unit Issuance Costs
Unit issuance costs are amortized over a period of 3 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, all relevant
assets and liabilities in trust are recorded on the balance sheet and the statement of income and retained earnings.
(H) Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues including
parking space rental revenues and other miscellaneous revenues. Rental revenues are generally recognized on an accrual basis over the lifeof each lease.
(I)

Taxes on Property and Equipment
Property-related taxes including property taxes, city planning taxes and depreciable property taxes are imposed on properties on a calendar
year basis. These taxes are generally charged to operating expenses for the period, for the portion of such taxes corresponding to said period.
Under Japanese tax regulations, the seller of the property is liable for these taxes on the property from the date of disposal to the end of thecalendar year in which the property is disposed. The seller, however, is generally reimbursed by the purchaser for these accrued
property-related tax liabilities.

－8－

When the Investment Corporation purchases properties, it typically allocates the portion of the property-related taxes related to the period
following the purchase date of each property through the end of the calendar year. The amounts of those allocated portions of theproperty-related taxes are capitalized as part of the acquisition costs of the related properties. Capitalized property-related taxes amounted to¥6,024 thousand and ¥1,215 thousand as of January 31, 2018 and July 31, 2018, respectively.
(J) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and income tax bases of assets
and liabilities using the statutory tax rates.
(K) Consumption Taxes
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes. Non-deductible consumption taxes
applicable to the acquisition of assets are included in the cost of acquisition for each asset.
(L) Derivative Financial Instruments
The Investment Corporation enters into derivative transactions to hedge risks prescribed in its Articles of Incorporation based on its risk
management policies. The Investment Corporation hedges interest rate volatility risk of its interest payments on its borrowings by utilizing
interest rate swap and other derivative transactions as hedging instruments.
As for the method of assessment of the effectiveness of the hedge in the period from the inception of the hedge to the time of judgment of its
effectiveness, the cumulative changes in cash flow of the hedged items and hedging instruments are compared and a judgment is madebased on changed amount, etc. However, an assessment of the effectiveness of hedging activities is omitted in the case of interest rate
swaps and other derivatives that meet the requirements for special treatment.
(M) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments which are highly liquid, readily
convertible to cash and with insignificant risk of market value fluctuation, with maturities of three months or less from the date of purchase.
(N) Presentation of Amounts
Amounts of less than one thousand yen are truncated in the Japanese financial statements prepared in accordance with Japanese GAAP
and filed with regulatory authorities in Japan. Unless otherwise noted, amounts are rounded down and ratios are rounded off in theaccompanying financial statements. Totals shown in the accompanying financial statements do not necessarily agree with the sums of theindividual amounts.

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

4. BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATEDEXPENSES AND GAIN ON SALES OF REAL ESTATE PROPERTY
Rental and other operating revenues and property-related expenses for the periods from February 1, 2018 to July 31, 2018 and from August 1,
2017 to January 31, 2018 consist of the following:
From February 1, 2018
From August 1, 2017
to July 31, 2018
to January 31, 2018
(in thousands of yen)
Rental and other operating revenues:
Rental revenues¥5,800,000¥4,895,387

43,75043,749Rental revenues from limited proprietary rights of landCommon area charges

308,336

296,482

6,152,086

5,235,620

Parking space rental revenues

182,436

181,133

Miscellaneous

320,814254,551

Subtotal
Others:Subtotal
Total rental and other operating revenues

503,250435,685¥6,655,337¥5,671,305¥402,111¥362,432

Property-related expenses:
Property management fees and facility management fees
Utilities

89,714

88,669Taxes

413,717323,667

Repairs and maintenance

290,404

228,410

Insurance

10,386

8,399

Trust fees

48,95842,467

Depreciation

1,144,236

921,858

Others155,022

131,157¥2,554,551¥2,107,064

Total property-related expenses
Gain on sales of real estate property:
From February 1, 2018 to July 31, 2018

(in thousands of yen)
KDX Shimmachi Residence
Revenue from sale of real estate property¥1,420,000

Cost of real estate property

953,749

Other sales expenses

29,433Gain on sales of real estate property¥436,817

From August 1, 2017 to January 31, 2018
Not applicable－10－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

From February 1, 2018
to July 31, 2018
10,000,000

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

782,928

349,089

Total number of investment units issued and outstanding

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

As of January 31, 2018

(in thousands of yen)
Cash and deposits¥10,029,598¥6,551,666

Cash and deposits in trust

8,749,823

3,928,017

Cash and cash equivalents¥18,779,421¥10,479,684

Important contents of the non-cash transaction
From February 1, 2018 to July 31, 2018
The summary of assets and liabilities succeeded from Japan Senior Living Investment Corporation by merger in the 13th fiscal period is asfollows. The increase amount of capital surplus is ¥13,187,100 thousand as a result of merger.
(in thousands of yen)
Current assets¥6,674,104

Non-current assets

29,237,279

Total assets

35,911,384

Current liabilities

5,108,546

Non-current liabilities

15,040,841

Total liabilities¥20,149,388

From August 1, 2017 to January 31, 2018
Not applicable

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

As of January 31, 2018

(in thousands of yen)Due in 1 year

¥1,942,856¥251,883

Due after 1 year

12,086,289

4,092,472

Total¥14,029,145¥4,344,355－11－

8. FINANCIAL INSTRUMENTS(A). Overview(1) Policy for financial instruments
The Investment Corporation procures funds for asset acquisitions, repairs, payment of distributions, repayment of loans, etc. through loans fromfinancial institutions, issuance of investment corporation bonds, issuance of investment units and other means. With regard to the procurement ofinterest-bearing debts, the Investment Corporation ensures that it can effectively combine stable long-term funds with flexible short-term funds.
Management of surplus funds is undertaken through various bank deposits focusing on safety, liquidity and effectiveness. The Investment
Corporation uses derivatives for the purpose of hedging its exposure to changes in interest rates and other risks and does not enter into derivativetransactions for speculative or trading purposes.
(2) Types of financial instruments and related risk
Bank deposits are for managing the Investment Corporation’s surplus funds and are exposed to credit risk such as the bankruptcy of financial
institutions at which funds are deposited. Investment securities represent equity investments in an anonymous association and are exposed tocredit risk of the issuer, risk of fluctuation of value of its property and interest rate fluctuation risk.
Borrowings and investment corporation bonds are made primarily for the purpose of procuring funds for the acquisition of real estate and trust
beneficiary interests in real estate and have a repayment date of a maximum of 10 years and 1 month as of July 31, 2018, the end of the 13th
fiscal period, are exposed to liquidity risk where alternative funds may not be procured by the repayment date. Also, borrowings with floatinginterest rates are exposed to interest rate fluctuation risk. Derivatives are used for the purpose of hedging interest rate fluctuation risk for a certain
portion of the borrowings.
(3) Risk management for financial instruments
a. Credit risk
While bank deposits are exposed to credit risk such as the bankruptcy of financial institutions at which funds are deposited, such risk is monitored
by deposits in non-interest bearing ordinary savings accounts or with financial institutions with credit ratings above a certain level. Investment
securities represent equity investments in an anonymous association and are exposed to credit risk of the issuer and interest rate fluctuation risk.
To manage this credit risk, the Investment Corporation regularly evaluates the results of operations and the financial condition of the issuer, etc. In
utilizing derivatives, the Investment Corporation aims to mitigate counterparty risk such as by transacting with financial institutions with favorable
ratings.
b.

Market risk

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

Liquidity risk

Though borrowings are subject to liquidity risk, the Investment Corporation reduces such risk by spreading out payment due dates and by
diversifying financial institutions. Liquidity risk is also managed by such means as regularly checking the balance of cash reserves.
(4) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market price available, fairvalue is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different fair value.

－12－

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

Estimated fair value

Difference(in thousands of yen)

(1) Cash and deposits¥10,029,598
8,749,823¥10,029,598
8,749,823

18,779,421

18,779,421-(1) Short-term loans payable

2,630,000

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

13,500,000

13,463,182(36,817)(3) Investment corporation bonds

3,000,000
87,000,000

2,978,000
87,203,230(22,000)
203,230

106,130,000

106,274,413(¥2,512)(¥2,512)(2) Cash and deposits in trust
Subtotal(4) Long-term loans payable
Subtotal
Derivative transactions*¥-

144,413¥-* Figures indicate net amount of derivative assets/liabilities derived from derivative transactions, with minus representing net liabilities.
As of January 31, 2018
Carrying amount

Estimated fair value

Difference(in thousands of yen)

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

3,928,017

3,928,017-

10,479,684

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

2,630,000

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

11,000,000

10,999,491(508)

Subtotal¥-(3) Investment corporation bonds

3,000,000

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

74,500,000

74,587,162

87,162

91,130,000

91,187,454

57,454¥80,743¥80,743

Subtotal
Derivative transactions¥-

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

－13－

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

As of July 31, 2018

Investment securities *As of January 31, 2018

512,263

221,707*Fair values of investment securities are not subject to disclosure of fair value as they have no market value and their fair values are extremely
difficult to recognize.
Loss on valuation of investment securities of ¥21,981 thousand was recognized in the fiscal period ended July 31, 2018.
Note 3: Redemption schedule for financial assets with maturities
As of July 31, 2018

Due in 1 year or
less

Cash anddeposits
Cash anddeposits in trust
Total

Due after 1 year
through 2 years¥10,029,598¥

8,749,823

Cash anddeposits
Cash anddeposits in trust
Total

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

¥

¥

¥

¥

(in thousands of yen)

-

-

-

¥18,779,421

As of January 31, 2018
Due in 1 year or
less

Due after 2 years
through 3 years¥-

Due after 1 year
through 2 years¥6,551,666¥

3,928,017

¥

¥

-

-

¥

-

-

¥

-

-

¥

-

Due after 2 years
through 3 years

Due after 3 years
through 4 years

Due after 4 years
through 5 years

Due after 5 years

¥

-

¥

-

¥

-

¥

¥

-

¥

-

¥

-

(in thousands of yen)-

¥10,479,684

-

-

-

-

-

-

¥

-

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

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

Due in 1 year or
less

Due after 1 year
through 2 years¥¥

2,630,000(in thousands of yen)

-

¥

-

¥

-

Due after 4 years
through 5 years¥-

Due after 5 years
¥

-

-

-

1,000,000-

2,000,000

13,500,000

7,500,000

8,950,000

19,650,000

7,250,000

43,650,000¥ 16,130,000¥

Due after 3 years
through 4 years-

As of January 31, 2018
Due in 1 year or
lessShort-term loans
payableInvestment
corporation bonds
Long-term loans
payableTotal

Due after 2 years
through 3 years

2,630,000¥

7,500,000

Due after 1 year
through 2 years¥¥

8,950,000

Due after 2 years
through 3 years¥

20,650,000

Due after 3 years
through 4 years(in thousands of yen)

-

¥

-

¥

-

¥

7,250,000

Due after 4 years
through 5 years¥-¥

45,650,000

Due after 5 years
¥

-

-

-

-

1,000,000-

2,000,000

11,000,000

3,000,000

3,600,000

10,000,000

10,250,000

47,650,000¥ 13,630,000¥

3,000,000¥

3,600,000－14－¥

11,000,000¥

10,250,000¥

49,650,000

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

Transactions not subject to hedge accounting
Not applicable(2)

Transactions subject to hedge accounting

Hedge
accounting
methodType of derivativetransactions

Hedged items

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

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

Interest rate swap
Based on the amounttransaction:
Long-term¥43,000,000¥43,000,000(¥2,512) provided by counterparty
Receive/floatingloans payablefinancial institutions
and pay/fixedSpecialInterest rate swap
treatment for transaction:
Long-term¥46,300,000¥38,300,000*
Receive/floatinginterest-rateloans payableswaps
and pay/fixed
Total¥89,300,000¥81,300,000(¥2,512)*Interest rate swaps for which the special treatment is applied are accounted for together with the underlying hedged item. As a result, their fair
Accounting
method, inprinciple

value is included in the fair value of the hedged long-term loans payable.
The contract amount and the fair value of interest-rate swap transactions as of January 31, 2018 are shown in the following table.
(1)

Transactions not subject to hedge accounting
Not applicable(2)

Transactions subject to hedge accounting

Hedge
accounting
methodType of derivativetransactions

Hedged items

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

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

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

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

－15－10. INCOME TAXESThe Investment Corporation is subject to corporate income taxes at a regular statutory rate of approximately 32%. However, the Investment
Corporation may deduct from its taxable income amounts distributed to its unitholders, provided the requirements under the Special Taxation
Measures Law of Japan are met, including a requirement that it currently distributes in excess of 90% of its net income for the fiscal period in order
to be able to deduct such amounts. If the Investment Corporation does not satisfy all of the requirements, the entire taxable income of theInvestment Corporation will be subject to regular corporate income taxes. Since the Investment Corporation distributed in excess of 90% of its
distributable income in the form of cash distributions totaling ¥3,152 million and ¥2,424 million for the periods ended July 31, 2018 and January 31,
2018, respectively, the distributions were treated as deductible distributions for purposes of corporate income taxes. The effective tax rates on theInvestment Corporation’s income were 0.01% and 0.03% for the periods ended July 31, 2018 and January 31, 2018, respectively. The following
table summarizes the significant differences between the statutory tax rate and the effective tax rate:
From February 1, 2018
to July 31, 201831.74%

From August 1, 2017
to January 31, 201831.74%

Deductible cash distributions(16.44)(31.74)Gain on negative goodwill(15.09)-Others(0.20)

0.03

Effective tax rate

0.01%

0.03%

Statutory tax rate

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

As of January 31, 2018

(in thousands of yen)

Deferred tax assets:
Valuation difference on assets acquired by merger¥ 762,851

Deferred gains or losses on hedges
Loss on valuation of investment securities¥-

26,694

-

6,926

-

Subtotal deferred tax assets

796,472-

Valuation allowance(796,472)-

Total deferred tax assets

¥

-

¥

-

Net deferred tax assets

¥

-

¥

-

11. RELATED-PARTY TRANSACTIONS
1．Parent Company, major corporate unitholders and other13th Fiscal Period (February 1, 2018 to July 31, 2018) and 12th Fiscal Period (August 1, 2017 to January 31, 2018): Not applicable
2．Affiliated companies and other13th Fiscal Period (February 1, 2018 to July 31, 2018) and 12th Fiscal Period (August 1, 2017 to January 31, 2018): Not applicable
3．Fellow subsidiary companies and other13th Fiscal Period (February 1, 2018 to July 31, 2018) and 12th Fiscal Period (August 1, 2017 to January 31, 2018): Not applicable
4．Directors, major individual unitholders and other13th Fiscal Period (February 1, 2018 to July 31, 2018) and 12th Fiscal Period (August 1, 2017 to January 31, 2018): Not applicable－16－12. BUSINESS COMBINATION
12th Fiscal Period (August 1, 2017 to January 31, 2018)
Not applicable
13th Fiscal Period (February 1, 2018 to July 31, 2018)
Business Combination through Acquisition
1. Overview of Business Combination(1)Name and Business Description of Acquiree
Name of acquiree: Japan Senior Living Investment Corporation (“JSL”)

Business description: Real estate investment trust(2)Main Reasons for Business Combination
The Investment Corporation and JSL believe that, as a result of the Merger, they will achieve the benefits of (i) an increase in liquidity resulting
from greater asset scale and market capitalization that will enable them to capture more growth opportunities, (ii) greater earnings stability
stemming from asset type diversification and enhanced ability to pursue external growth and (iii) improvement in asset management efficiency
together with enhanced financial health, and further believe that the potential to reap these benefits constitutes the major significance of the
Merger. The Investment Corporation has therefore entered into the merger agreement on November 10, 2017.
(3)Date of Business Combination
March 1, 2018(4)Legal Framework of Business Combination
An absorption-type merger with the Investment Corporation as the surviving corporation and JSL as the dissolving corporation(5)Name of the Investment Corporation after Business Combination
Kenedix Residential Next Investment Corporation(The Investment Corporation changed its name from Kenedix Residential Investment Corporation to Kenedix Residential Next Investment
Corporation on March 1, 2018)(6)Main Reasons for Determining Acquiring Company
It was determined that the Investment Corporation is the acquiring company based on the accounting standards for business combinations
and other regulations with comprehensively taking various factors into consideration, such as the size of total assets, net income and otherindexes, the ratio of unitholders’ voting rights, the members of board of directors and other managerial factors.
2. Operating Period of Acquiree Included in the Statement of Income and Retained Earnings
From March 1, 2018 to July 31, 2018
3. Acquisition Cost of Acquiree and the Breakdown
Acquisition costMarket value of the Investment Corporation’s investment units allotted on the date of business combination¥13,187,100 thousand
Principal Direct Cost for Acquisition
Merger fees

¥292,085 thousand

4. Exchange Ratio, Method of Calculation and Number of Investment Units Allotted as for the Acquisition(1)Exchange Ratio of Investment Units
1 unit of the Investment Corporation was allotted 1 unit of JSL through the Merger. The Investment Corporation implemented a 2-for-1
investment unit split with February 28, 2018 as the record date before the Merger.
(2)Method of Calculation
The Investment Corporation appointed SMBC Nikko Securities Inc. as a financial advisor (“FA”), while JSL appointed Nomura Securities Co., Ltd.
They requested the FAs to perform a financial analysis of the merger ratio. Each FA calculated the merger ratio based on the valuation methodof investment unit market value, discount dividends model, and other valuation, respectively. After careful discussions and negotiations as wellas comprehensive considerations of various factors, including the merger ratio performed by the FAs, the Investment Corporation and JSL
determined that the above mentioned merger ratio was appropriate.
(3)Number of Investment Units Allotted
84,750 units－17－

5. Treatment of Acquisition Cost
(1) Breakdown of Assets Acquired and Liabilities Assumed on the Date of Business Combination(In thousand yen)
Current assets¥6,674,104

Noncurrent assets

29,237,279

Total assets

35,911,384

Current liabilities

5,108,546

Noncurrent liabilities

15,040,841

Total liabilities¥20,149,388(2)Amount and Reason for Negative Goodwill
Amount of Negative Goodwill: ¥2,574,896 thousand

Reason : The Investment Corporation recognized the difference as Negative Goodwill, by the amount that JSL fair value of net assets on thedate of business combination exceeded the acquisition cost.
Accounting Treatment : All of the amount was recognized as extraordinary gain in 13th fiscal period.
6. Estimated Impact on the Statement of Income and Retained Earnings for the 13th fiscal period
Calculation Method of Estimated Impact and Assumption:
Japanese GAAP requires the acquiring company to estimate the impact on the statement of income and retained earnings as if the businesscombination were completed at the beginning of the 13th fiscal period.
Impact on the Statement of Income and Retained Earnings in the 13th Fiscal Period:
Operating revenues¥162,634 thousand

Ordinary income¥37,588 thousand

Net income¥37,419 thousand

13. INVESTMENT AND RENTAL PROPERTIESThe Investment Corporation owns real estate for rental purposes in the Tokyo Metropolitan Area and other regional areas for the purpose ofgenerating rental revenues.
The book value and fair value concerning the above real estate for rental purposes are as follows.
13th Fiscal Period
from February 1, 2018
to July 31, 2018

12th Fiscal Period
from August 1, 2017
to January 31, 2018

(in thousands of yen)Book value
Balance at the beginning of period
Changes during the period
Balance at the end of period
Fair value at the end of period¥165,040,946
28,107,411¥156,161,704
8,879,241

193,148,357¥223,857,000

165,040,946¥192,137,000

Note 1: Book value excludes accumulated depreciation from acquisition costs.
Note 2: Among changes in the amount of real estate for rental purposes that occurred during the 13th fiscal period, the principal increases were
the acquisition of trust beneficiary interests in real estate in 14 properties totaling ¥28,998,000 thousand by merger with Japan Senior
Living Investment Corporation and the acquisition of real estate trust beneficiary interests in 1 property totaling ¥770,418 thousand, and theprincipal decrease was the sales of real estate trust beneficiary interests in 1 property totaling ¥953,749 thousand and depreciation of¥1,144,236 thousand, and the 12th fiscal period, the principal increases were the acquisition of trust beneficiary interests in real estate in 2
properties totaling ¥9,514,796 thousand and the principal decrease was depreciation amounting of ¥921,858 thousand.
Note 3: The fair value is the appraisal value or the survey value determined by outside appraisers.
Income and loss in the fiscal periods ended July 31, 2018 and January 31, 2018 for real estate for rental purposes is listed in Note 4 ”
BREAKDOWN OF RENTAL AND OTHER OPERATING REVENUES, PROPERTY-RELATED EXPENSES AND GAIN ON SALES OF REALESTATE PROPERTY”.

－18－14. SEGMENT AND RELATED INFORMATION
Segment and related information for the period ended from February 1, 2018 to July 31, 2018 and from August 1, 2017 to January 31, 2018 is asfollows:(A) Segment information
Disclosure is omitted because the real estate leasing business is the Investment Corporation’s sole business and it has no reportable segment
subject to disclosure.
(B) Related information(1) Information about each product and service
Disclosure is omitted because net sales to external customers for a single product/service category account for over 90% of the operating revenue
on the statement of income and retained earnings.
(2) Information about each geographic area(a) Net sales
Disclosure is omitted because net sales to external customers in Japan account for over 90% of the operating revenue on the statement of income
and retained earnings.
(b) Property, plant and equipment
Disclosure is omitted because the amount of property, plant and equipment located in Japan accounts for over 90% of the amount of property,
plant and equipment on the balance sheet.
(3) Information about each major customer
Disclosure is omitted because net sales to a single external customer account for less than 10% of the operating revenue on the statement ofincome and retained earnings.

15. PER UNIT INFORMATION

Net asset value per unit

From February 1, 2018

From August 1, 2017

to July 31, 2018

to January 31, 2018

¥126,123¥118,379

Net income per unit

¥7,036¥3,369Weighted average number of units (units)769,818

698,178

The weighted average numbers of units outstanding of 769,818 and 698,178 were used for the computation of the amount of net income perunit as of July 31, 2018 and January 31, 2018, respectively.
A 2-for-1 split of investment units was implemented with February 28, 2018 as the record date and March 1, 2018 as the effective date. Net
assets value per unit and net income per unit are calculated based on the assumption that the split of investment unit was implemented at the
beginning of the fiscal period ended January 2018.
Net income per unit after adjusting for residual units is not included because there were no residual investment units.
The basis for calculating net income per unit is as follows:

Net income (in thousands of yen)
Net income not available to ordinary unitholders (in thousands of yen)
Net income available to ordinary unitholders (in thousands of yen)
Weighted average number of units during the period (units)－19－

From February 1, 2018

From August 1, 2017

to July 31, 2018

to January 31, 2018

¥5,416,437¥2,352,516--¥5,416,437¥2,352,516

769,818

698,17816. SIGNIFICANT SUBSEQUENT EVENTSIssuance of New Investment Units
On July 13, 2018 and July 24, 2018, the Board of Directors of the Investment Corporation resolved to issue new investment units as the funds
for acquiring specified assets and other use. Payments for the issuance of new investment units through public offering and through third-party
allotment have been completed on August 1, 2018 and August 29, 2018, respectively.
As a result of the issuance of new investment units, the Investment Corporation has total unitholders’ capital of ¥93,226,228,903 with 869,133
investment units outstanding as of August 29, 2018.
(Issuance of New Investment Units through Public Offering)Issuance of new investment units: 82,100 units

Issue price (Offer price): ¥157,047 per unit

Aggregate issue price (Total offer price): ¥12,893,558,700

Issue amount (Paid-in value): ¥151,892 per unit

Total issue amount (Aggregate paid-in value): ¥12,470,333,200

Payment date

: August 1, 2018

(Issuance of New Investment Units through Third-Party Allotment)
Issuance of new investment units: 4,105 units

Issue amount (Paid-in value): ¥151,892 per unit

Total issue amount (Aggregate paid-in value): ¥623,516,660

Payment date

: August 29, 2018

Allottee: SMBC Nikko Securities Inc.

17. SECURITIES PORTFOLIO
Securities portfolio consists of the following as of July 31, 2018:(1)

Stock Not applicable(2)

Securities other than shares(in thousands of yen)Book value

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

78,767--78,767-

Equity interests in TK property fund with G.K.
Tropic II as operator (Note 3)-

122,142--

122,142-

Equity interests in TK property fund with G.K.
KSLF8 as operator (Note 4)-

198,346--

198,346-

Equity interests in TK property fund with G.K.
Tropic III as operator (Note 5)-

113,006--

113,006--

512,263--512,263-

Name

Accruedinterest

Assessed Gain (Loss)value
onRemarks（Note 1） valuation

Face value
total

Type
Subordinated Silent
Partnership Equity
Interests
Subordinated Silent
Partnership Equity
Interests
Silent Partnership
Equity Interests
Subordinated Silent
Partnership Equity
Interests
Total

Prepaid
accruedinterest

Note 1: The assessed value is stated at the book value. Loss on valuation of investment securities of ¥10,831 thousand and ¥11,150 thousand
was recognized in the fiscal period ended July 31, 2018 regarding equity interests in TK property fund with G.K. Tropic I as operator andequity interests in TK property fund with G.K. Tropic II as operator, respectively.
Note 2: TK property fund owned trust beneficiary interests in real estate for “KDX Residence Shukugawa Hills” as of July 31,2018, the end of the
13th fiscal period. Furthermore, the Investment Corporation acquired real estate beneficiary interests in trust for the abovementioned
properties on August 2, 2018.
Note 3: TK property fund owned trust beneficiary interests in real estate for “KDX Residence Asagaya,” “KDX Residence Hiyoshi” and “Serenite
Kobe Motomachi” as of July 31,2018, the end of the 13th fiscal period. Furthermore, the Investment Corporation acquired real estate
beneficiary interests in trust for the three abovementioned properties on August 2, 2018.
Note 4: Equity interests in TK property fund with G.K. KSLF8 as operator were succeeded from JSL by the Merger.
TK property fund owned trust beneficiary interests in real estate for “Canadian Hill,” “Anesis Hyogo,”“Orage Suma,” “Rococo-riha” and“Anesis Teradacho” as of July 31,2018, the end of the 13th fiscal period. Furthermore, the Investment Corporation acquired real estate
beneficiary interests in trust for the five abovementioned properties on August 2, 2018.

－20－

Note 5: TK property fund owns trust beneficiary interests in real estate for “Arute Ishiyagawa” and “Serabi Ebisu.”
Securities portfolio consists of the following as of January 31, 2018:(1)

Stock Not applicable(2)

Securities other than shares(in thousands of yen)Book value

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

88,339--88,339-Equity interests in TK property fund with G.K.
Tropic II as operator (Note 2)-

133,368--

133,368--

221,707--

221,707-

Name

Accruedinterest

Assessed Gain (Loss)value
onRemarks（Note 3） valuation

Face value
total

Type
Subordinated Silent
Partnership Equity
Interests
Subordinated Silent
Partnership Equity
Interests
Total

Prepaid
accruedinterest

Note 1: TK property fund owns trust beneficiary interests in real estate for “KDX Residence Shukugawa Hills.”
Note 2: TK property fund owns trust beneficiary interests in real estate for “KDX Residence Asagaya,” “KDX Residence Hiyoshi” and “Serenite
Kobe Motomachi.”Note 3: The assessed value is stated at the book value.

18. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASEETS
Property, plant and equipment consist of the following as of July 31, 2018:
Type of asset

Property,plant andequipment

Intangible
assetsLand
Sub total
Buildings in trust
Structures in trust
Machinery andequipment in trust
Tools, furnitureand fixtures intrust
Land in trust
Sub total
Total
Leasehold right in
trust
Other
Total

Balance atthe beginningof period¥1,798,041
1,798,041
68,843,600
502,925

Increaseduring theperiodDecreaseduring theperiod¥¥16,408,296
222,790

Depreciation
Depreciation
Accumulated
for thedepreciation
period(in thousands of yen)
¥1,798,041¥¥
1,798,041
84,656,776
7,901,681
1,084,310
722,432
133,503
19,963

Balance atthe end of
period595,119
3,283

Net
balance at
end of theperiod¥1,798,041
1,798,041
76,755,095
588,929

1,317,786

42,291-

1,360,078

256,856

30,015

1,103,222

338,646

62,359106

400,899

39,156

9,946

361,742

99,538,715
170,541,674
172,339,715

12,402,600
29,138,338
29,138,338

467,048
1,065,558
1,065,558

111,474,267
198,614,454
200,412,495

8,331,197
8,331,197

1,144,236
1,144,236

111,474,267
190,283,257
192,081,298-

1,067,058-

1,067,058--

1,067,058-

7,762¥1,074,821

-

7,762
¥1,074,821

646
646

7,115
¥1,074,174

¥

¥

¥

646
646

¥

Remarks

Note 1

Note 1

Note 1: The amount of increase during the period is primarily attributable to merger, the acquisition of the real estate property and capital
expenditures.
Note 2: The amount of decrease during the period is primarily attributable to the sales of the real estate property.
Property, plant and equipment consist of the following as of January 31, 2018:
Type of asset

Property,plant andequipment

Land
Sub total
Buildings in trust
Structures in trust
Machinery andequipment in trust
Tools, furnitureand fixtures intrust
Land in trust
Sub total
Total

Balance atthe beginningof period¥1,798,041
1,798,041
65,654,206
444,009

Increaseduring theperiodDecreaseduring theperiod¥¥3,189,393
58,915-

Depreciation
Depreciation
Accumulated
for thedepreciation
period(in thousands of yen)
¥1,798,041¥¥
1,798,041
68,843,600
6,927,784
869,449
502,925
114,924
14,477

Balance atthe end of
periodNetbalance at
end of theperiod¥1,798,041
1,798,041
61,915,815
388,001

1,259,827

57,959-1,317,786

226,840

28,953

1,090,946

263,829

74,816-338,646

29,2208,978309,425

93,118,700
160,740,573¥162,538,615

6,420,015
9,801,100¥9,801,100-

99,538,715
170,541,674¥172,339,715

7,298,769¥7,298,769

921,858¥921,858

99,538,715
163,242,904¥165,040,946¥

Remarks

Note 1

Note 1

Note 1: The amount of increase during the period is primarily attributable to the acquisition of the real estate properties and capital expenditures.

－21－19. INVESTMENT CORPORATION BONDS
Outstanding Investment corporation bonds as of July 31, 2018 are as follows.
Balance at
Decrease
Balance at
Date of
Seriesthe beginningduring thethe end ofissue
of period
periodperiod(in thousands of yen)First series of unsecured
August 30,
investment corporation
1,000,000
1,000,000
2016
bonds (Note 1)
Second series ofAugust 30,
unsecured investment
1,000,000
1,000,000
corporation bonds
2016(Note 1)
Third series of unsecured
August 30,
investment corporation
1,000,000
1,000,000
2016
bonds (Note 1)
Total

3,000,000-

Interest
rate

0.200%
0.540%
0.800%

Repayment date

Use

Remarks(Note2)

Unsecured

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

3,000,000

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

Due after 1 year
through 2 years-

Due after 2 years
through 3 years

Due after 3 years
through 4 years(in thousands of yen)--

Outstanding Investment corporation bonds as of January 31, 2018 are as follows.
Balance at
Decrease
Balance at
Date of
Seriesthe beginningduring thethe end ofissue
of period
periodperiod(in thousands of yen)First series of unsecured
August 30,
investment corporation
1,000,000
1,000,000
2016
bonds (Note 1)
Second series ofAugust 30,
unsecured investment
1,000,000
1,000,000
corporation bonds
2016(Note 1)
Third series of unsecured
August 30,
investment corporation
1,000,000
1,000,000
2016
bonds (Note 1)
Total

3,000,000-

Due after 4 years
through 5 years

1,000,000

Interest
rate
0.200%
0.540%
0.800%-

Repayment date

Use

Remarks(Note2)

Unsecured

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

3,000,000

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

Due after 1 year
through 2 years-

Due after 2 years
through 3 years

Due after 3 years
through 4 years(in thousands of yen)
-

-

－22－

1,000,000

Due after 4 years
through 5 years-20. SHORT-TERM DEBT AND LONG-TERM DEBT
Short-term debt and long-term debt consist of the following as of July 31, 2018
Classification

LenderShort-termloanspayableCurrent
portion of
long-term
loans
payableLong-term
loans
payableSumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited(Note 8)
Sumitomo Mitsui
Banking Corporation(Note 8)
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Sub total
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
Shinsei Bank, Limited(Note 8)
Sumitomo Mitsui
Banking Corporation(Note 8)MUFG Bank, Ltd(Note 8)Mizuho Bank, Ltd.
(Note 8)
Nippon Life Insurance
Company (Note 8)
Sumitomo Mitsui
Banking Corporation(Note 2)
MUFG Bank, Ltd(Note 2)
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited
Sub total
MUFG Bank, Ltd
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
MUFG Bank, Ltd
Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd
Mizuho Bank, Ltd.
Resona Bank, Limited

Balance atthebeginning of
periodBalance atthe end of
periodDecreaseduring theperiodIncreaseduring theperiod(in thousands of yen)

Averageinterest rate
(Note 3)(Note 4)

Payment due date
(Note 7)1,000,000-

1,000,000-

0.455%

July 31, 2018-

500,000

500,000-

0.354%

July 30, 2018-

500,000

500,000-

0.354%

July 30, 2018

830,000-

830,000-

0.455%

July 31, 2018

800,000-

800,000-

0.455%

July 31, 2018-

1,830,000-

1,830,000

0.404%

July 31, 2019

2,630,000

800,000
3,630,000

3,630,000

800,000
2,630,000

0.404%

July 31, 2019

3,250,000--

3,250,000

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

2,000,000
1,000,000
500,000

1.052%

August 31, 2018

500,000--

500,000

500,000--

500,000

250,000--

250,000

3,000,000--

3,000,000

1.088%(Note 5)

August 31, 2018-

1,000,000

1,000,000--

1,000,000

1,000,000--

500,000

500,000--

500,000

500,000--

500,000

500,000-

1,000,000--

500,000--

0.435%

July 30, 2018

1,000,000

0.480%

February 28, 2019-

500,000

0.480%

February 28, 2019

500,000-

500,000

0.354%

July 31, 201912,500,000
1,000,000

500,000
4,500,000-

3,500,000-

500,000
13,500,000
1,000,000

0.354%

July 31, 2019

1.109%

January 31, 2021

1,000,000--

1,000,000

1.221%

July 31, 2021

1,350,000--

1,350,000

1.183%March 31, 2021

2,000,000--

2,000,000

1.267%

April 30, 2022

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

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

1.267%
1.267%
1.267%

April 30, 2022
April 30, 2022
April 30, 2022

1,100,000--

1,100,000

1,100,000
600,000
350,000
300,000--

1,100,000
600,000
350,000
300,000

300,000--

300,000

1,000,000--

1,000,000

400,000--

400,000

400,000
300,000
200,000--

400,000
300,000
200,000－23－

0.916%

August 7, 2021

0.996%(Note 5)

August 7, 2021

1.254%

August 7, 2023

Use

Remarks(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
UnguaranteedClassification
LenderMizuho Trust &Banking Co., Ltd.
Aozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd
Aozora Bank, Ltd.

Long-term
loans
payableBalance atthebeginning of
periodBalance atthe end of
periodDecreaseduring theperiodIncreaseduring theperiod(in thousands of yen)

200,000--

200,000

150,000--

150,000

500,000--

500,000

Averageinterest rate
(Note 3)(Note 4)

Payment due date
(Note 7)1.254%

August 7, 2023

1.320%(Note 5)

August 7, 2023

600,000--

600,000

0.945%

August 31, 2021

600,000
500,000--

600,000
500,000

0.945%
0.945%

Mizuho Bank, Ltd.

950,000--

950,000

1.083%

Sumitomo Mitsui
Banking Corporation

2,000,000--

2,000,000

0.804%MUFG Bank, Ltd

1,500,000--

1,500,000

0.689%

August 31, 2021
August 31, 2021
November 30,
2022
November 30,
2020
November 30,
2019

1,200,000--

1,200,000

0.875%

January 31, 2022

1,200,000
2,000,000
1,500,000
2,000,000--

1,200,000
2,000,000
1,500,000
2,000,000

1.105%
0.875%
0.987%
1.100%

January 31, 2024
April 30, 2022
April 30, 2023
April 30, 2024

1,000,000--

1,000,000

1.265%

April 30, 2025-

1,750,000-

1,750,000-

1,750,000-

1,750,000-

1,000,000-

1,000,000-

500,000-

500,000

0.729%

July 29, 2020-

500,000-

500,000-

500,000-

500,000-

1,100,000-

1,100,000-

1,100,000-

1,100,000-

1,000,000-

1,000,000-

300,000-

300,000-

1,000,000-

1,000,000

300,000
1,100,000--

700,000-

950,000

Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd
Aozora Bank, Ltd.
Resona Bank, Limited
MUFG Bank, Ltd
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited(Note 8)
Sumitomo Mitsui
Banking Corporation(Note 8)MUFG Bank, Ltd(Note 8)Mizuho Bank, Ltd.
(Note 8)Resona Bank, Limited(Note 8)Mizuho Trust &Banking Co., Ltd.
(Note 8)
Shinsei Bank, Limited(Note 8)
Sumitomo Mitsui
Banking Corporation(Note 8)MUFG Bank, Ltd(Note 8)Mizuho Bank, Ltd.
(Note 8)
Sompo Japan
Nipponkoa Insurance
Inc. (Note 8)
Aozora Bank, Ltd.
Resona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
MUFG Bank, Ltd
MUFG Bank, Ltd
MUFG Bank, Ltd
Sumitomo Mitsui
Banking Corporation

1.115%

July 29, 2022

300,000
1,100,000

0.678%
0.923%

August 31, 2020
August 31, 2022-

700,000

0.923%

August 31, 2022--

950,000

1.047%

August 31, 2023

1,700,000
950,000--

1,700,000
950,000

1.169%
1.169%

August 31, 2024
August 31, 2024

2,000,000--

2,000,000

1.345%

August 31, 2025

1,000,000--

1,000,000

300,000
1,000,000
1,000,000--

300,000
1,000,000
1,000,000

1.193%(Note 5)0.624%
1.156%
0.819%--

2,500,000

0.903%--

1,000,000

2,500,000

Mizuho Bank, Ltd.

1,500,000--

1,500,000

Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited

1,000,000--

1,000,000

0.660%(Note 5)0.816%(Note 5)0.713%

1,000,000--

1,000,000

0.797%MUFG Bank, Ltd

1,000,000－24－

August 31, 2024
October 27, 2020
April 27, 2025
April 28, 2025
April 30, 2026
July 31, 2025
August 31, 2026
August 31, 2024
August 31, 2025

Use

Remarks(Note 6)

Unsecured/
UnguaranteedClassification
Lender500,000(in thousands of yen)--

500,000

MUFG Bank, Ltd

2,000,000--

2,000,000

500,000--

500,000

3,000,000--

3,000,000

Mizuho Bank, Ltd.

Total

Balance atthe end of
periodDecreaseduring theperiodIncreaseduring theperiodResona Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Development Bank ofJapan Inc.

Long-term
loans
payableBalance atthebeginning of
periodThe Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd
Mizuho Bank, Ltd.
Mizuho Trust &Banking Co., Ltd.
Sumitomo Mitsui
Banking Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Sumitomo Mitsui
Banking Corporation
Shinsei Bank, Limited
MUFG Bank, Ltd
Mizuho Bank, Ltd.
Nippon Life Insurance
Company
Sub total

1,000,000--

1,000,000

1,000,000--

1,000,000

Averageinterest rate
(Note 3)(Note 4)

Payment due date
(Note 7)0.797%
0.670%(Note 5)0.751%(Note 5)

August 31, 2025

0.906%

August 31, 2026

0.773%(Note 5)0.900%

Use

Remarks(Note 6)

Unsecured/
Unguaranteed

August 31, 2025
August 31, 2025

October 31, 2025
August 22, 2027

1,000,000--

1,000,000

0.900%

August 22, 2027

1,000,000--

1,000,000

August 22, 2027

1,200,000--

1,200,000

1,000,000--

1,000,000

500,000--

500,000

500,000--

500,000

0.900%
0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)1,500,000--

1,500,000

0.501%

February 28, 2023

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

1,500,000
1,500,000

0.501%
0.582%

February 28, 2023
February 29, 2024

1,000,000--

1,000,000

0.582%

February 29, 2024

1,000,000
500,000--

1,000,000
500,000

February 29, 2024
August 31, 2024

500,000--

500,000

0.582%
0.624%
0.661%(Note 5)1,500,000--

1,500,000

0.665%

February 28, 2025

1,000,000--

1,000,000

0.749%

February 28, 2026

1,000,000--

1,000,000

0.749%

February 28, 2026-

1,000,000-

1,000,000

0.409%

July 31, 2021-

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

1,000,000
500,000
500,000

July 31, 2021
July 31, 2021
July 31, 2021-

500,000-

500,000

73,000,000¥88,130,000

14,000,000¥22,130,000¥7,130,000

87,000,000¥103,130,000

0.409%
0.409%
0.409%
0.900%(Note 5)

August 22, 2027
August 22, 2027
August 22, 2027
August 22, 2027

August 31, 2024

January 30, 2027

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

Due after 1 year
through 2 years

Long-term loans payable¥7,500,000

Due after 2 years
through 3 years

Due after 3 years
through 4 years(in thousands of yen)
¥8,950,000¥19,650,000

Due after 4 years
through 5 years

Due after 5 years¥7,250,000¥43,650,000

Note 2: Borrowings listed in the current portion of long-term loans payable were listed in long-term loans payable in the previous fiscal period.
Note 3: All debts except for the following Note 5 are borrowing at a floating rate.

Note 4: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions and other derivative transactions were implemented in order to hedge theinterest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps and otherderivatives are indicated.
Note 5: Borrowings is applied at a fixed rate.
Note 6: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 7: All the repayment methods of debt financing are lump-sum repayments on the due date.
Note 8: Borrowings succeeded from JSL due to the Merger on March 1, 2018.

－25－

Short-term debt and long-term debt consist of the following as of January 31, 2018
Classification

LenderShort-termloanspayableCurrent
portion of
long-term
loans
payableLong-term
loans
payableSumitomo Mitsui
Banking Corporation
Sumitomo Mitsui
Banking Corporation
Mizuho Bank, Ltd.
Sub total
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)
Aozora Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Trust &Banking Co., Ltd
Mizuho Bank, Ltd.
Development Bank ofJapan Inc.
Sub total
MUFG Bank, Ltd(Note 8)
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
MUFG Bank, Ltd(Note 8)Resona Bank, Limited
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
Mizuho Trust andBanking Co., Limited
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)Mizuho Bank, Ltd.
Resona Bank, Limited
Mizuho Trust andBanking Co., LimitedAozora Bank, Ltd.
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)
Aozora Bank, Ltd.
Mizuho Bank, Ltd.

Balance atthebeginning of
periodDecreaseduring theperiodIncreaseduring theperiodBalance atthe end of
periodAverageinterest rate
(Note 3)(Note 4)

Payment due
date(Note 7)(in thousands of yen)

1,000,000--

1,000,000

0.438%

July 31, 2018-

830,000-

830,000

0.438%

July 31, 2018

1,000,000

800,000
1,630,000-

800,000
2,630,000

0.438%

July 31, 2018

4,000,000-

4,000,000-

2,500,000-

2,500,000-

1,500,000
1,000,000-

1,500,000
1,000,000-

0.910%

August 31, 2017

1,000,000-

1,000,000-

500,000-

500,000-

500,000-

500,000-

3,250,000--

3,250,000

2,000,000--

2,000,000

1,000,000
500,000--

1,000,000
500,000

500,000--

500,000

500,000--

500,000

250,000--

250,000

3,000,000--

3,000,000

22,000,000-

11,000,000

11,000,000

1,000,000--

1,000,000

1.052%

August 31, 2018
(Note 2)

1.088%(Note 5)

August 31, 2018
(Note 2)

1.109%

January 31, 2021

1,000,000--

1,000,000

1.221%

July 31, 2021

1,350,000--

1,350,000

1.183%March 31, 2021

2,000,000--

2,000,000

1.267%

April 30, 2022

1,500,000--

1,500,000

1.267%

April 30, 2022

1,000,000--

1,000,000

1.267%

April 30, 2022

1,000,000--

1,000,000

1.267%

April 30, 2022

1,100,000--

1,100,000

0.916%

August 7, 2021

1,100,000--

1,100,000

600,000
350,000
300,000--

600,000
350,000
300,000

300,000--

300,000
0.996%(Note 5)

August 7, 2021

1.254%

August 7, 2023

1.254%

August 7, 2023

1,000,000--

1,000,000

400,000--

400,000

400,000--

400,000

300,000
200,000--

300,000
200,000

200,000--

200,000

150,000--

150,000

500,000--

500,000

1.320%(Note 5)

August 7, 2023

600,000--

600,000

0.945%

August 31, 2021

600,000--

600,000

0.945%

August 31, 2021

500,000
950,000--

500,000
950,000

0.945%
1.083%

August 31, 2021
November 30, 2022

－26－

Use

Remarks(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
Unguaranteed(Note 6)

Unsecured/
UnguaranteedClassification
LenderLong-term
loans
payableSumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 9)Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)
Aozora Bank, Ltd.
Resona Bank, Limited
MUFG Bank, Ltd(Note 8)
Sumitomo Mitsui
Banking Corporation
Aozora Bank, Ltd.
Resona Bank, Limited
Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui Trust
Bank, Limited
MUFG Bank, Ltd(Note 8)Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
MUFG Bank, Ltd(Note 8)MUFG Bank, Ltd(Note 8)MUFG Bank, Ltd(Note 8)
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)

Balance atthebeginning of
periodDecreaseduring theperiodIncreaseduring theperiodBalance atthe end of
periodAverageinterest rate
(Note 3)(Note 4)(in thousands of yen)

Payment due
date(Note 7)2,000,000--

2,000,000

0.804%

November 30, 2020

1,500,000--

1,500,000

0.689%

November 30, 2019

1,200,000--

1,200,000

0.875%

January 31, 2022

1,200,000--

1,200,000

1.105%

January 31, 2024

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

2,000,000
1,500,000

0.875%
0.987%

April 30, 2022
April 30, 2023

2,000,000--

2,000,000

1.100%

April 30, 2024

1,000,000--

1,000,000

1.265%

April 30, 2025

300,000
1,100,000--

300,000
1,100,000

0.678%
0.923%

August 31, 2020
August 31, 2022

700,000--

700,000

0.923%

August 31, 2022

950,000--

950,000

1.047%

August 31, 2023

1,700,000--

1,700,000

1.169%

August 31, 2024

950,000--

950,000

1.169%

August 31, 2024

2,000,000--

2,000,000

1.345%

August 31, 2025

1,000,000--

1,000,000

1.193%(Note 5)

August 31, 2024

300,000--

300,000

0.624%

October 27, 2020

1,000,000--

1,000,000

1.156%

April 27, 2025

1,000,000--

1,000,000

0.819%

April 28, 2025

2,500,000--

2,500,000

0.903%

April 30, 2026

1,000,000--

1,000,000

Mizuho Bank, Ltd.

1,500,000--

1,500,000

Aozora Bank, Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
MUFG Bank, Ltd(Note 8)Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Mizuho Trust andBanking Co., Limited
Development Bank ofJapan Inc.

1,000,000--

1,000,000

Mizuho Bank, Ltd.
The Bank of Fukuoka,
Ltd.
Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd（Note 8）
Aozora Bank, Ltd.

0.660%(Note 5)0.816%(Note 5)0.713%

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

1,000,000--

1,000,000

0.797%

August 31, 2025

500,000--

500,000

August 31, 2025

2,000,000--

2,000,000

500,000--

500,000

0.797%
0.670%(Note 5)0.751%(Note 5)3,000,000--

3,000,000

0.906%

August 31, 2026

1,000,000--

1,000,000

0.773%(Note 5)October 31, 2025-

1,000,000-

1,000,000

0.464%

February 28, 2019-

500,000-

500,000

0.464%

February 28, 2019-

1,000,000-

1,000,000

0.900%-

1,000,000-

1,000,000

0.900%

August 22, 2027
August 22, 2027-

1,000,000-

1,000,000-

1,200,000-

1,200,000

August 22, 2027
August 22, 2027-

1,000,000-

1,000,000-

500,000-

500,000-

500,000-

500,000

0.900%
0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)0.928%(Note 5)-1,500,000-

1,500,000

0.501%

February 28, 2023-

1,500,000-

1,500,000

0.501%

February 28, 2023-

1,500,000-

1,500,000

0.582%

February 29, 2024

－27－

August 31, 2025
August 31, 2025

August 22, 2027
August 22, 2027
August 22, 2027

Use

Remarks(Note 6)

Unsecured/
UnguaranteedClassification
LenderLong-term
loans
payableTotal

Sumitomo Mitsui
Banking Corporation
MUFG Bank, Ltd(Note 8)Mizuho Bank, Ltd.
Mizuho Trust andBanking Co., Limited
Sumitomo Mitsui
Banking Corporation
Resona Bank, Limited
Sumitomo Mitsui Trust
Bank, Limited
Sub total

Balance atthebeginning of
periodBalance atthe end of
periodAverageinterest rate
(Note 3)(Note 4)

Payment due
date(Note 7)-1,000,000

0.582%

February 29,2024

Decreaseduring theperiodIncreaseduring theperiod(in thousands of yen)-

1,000,000-

1,000,000-

1,000,000

0.582%

February 29, 2024-

500,000-

500,000

August 31, 2024-

500,000-

500,000

0.624%
0.661%(Note 5)-1,500,000-

1,500,000

0.665%

February 28, 2025-

1,000,000-

1,000,000

0.749%

February 28, 2026

0.749%

February 28, 2026-

1,000,000-

1,000,000

55,800,000¥78,800,000

18,700,000¥20,330,000¥11,000,000

74,500,000¥88,130,000

August 31, 2024

Use

Remarks(Note 6)

Unsecured/
Unguaranteed

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

Due after 1 year
through 2 years

Long-term loans payable¥3,000,000

Due after 2 years
through 3 years

Due after 3 years
through 4 years(in thousands of yen)
¥3,600,000¥10,000,000

Due after 4 years
through 5 years

Due after 5 years¥10,250,000¥47,650,000

Note 2: Borrowings listed in the current portion of long-term loans payable were listed in long-term loans payable in the previous fiscal period.
Note 3: All debts except for the following Note 5 are borrowing at a floating rate.
Note 4: Average interest rates are the weighted average during the period and figures are rounded to the nearest third decimal place. Also, withregard to borrowings for which interest rate swap transactions and other derivative transactions were implemented in order to hedge theinterest rate volatility risk, the weighted average interest rates taking into consideration the effects of the interest rate swaps and otherderivatives are indicated.
Note 5: Borrowings is applied at a fixed rate.
Note 6: All debts were used as the funds for acquiring real estate properties or trust beneficiary interest in real estate (additional expenses areincluded) and repayment of debts.
Note 7: All the repayment methods of debt financing are lump-sum repayments on the due date.
Note 8: The Bank of Tokyo-Mitsubishi UFJ, Ltd. changed its corporate name to MUFG Bank, Ltd. on April 1, 2018.
Note 9: MUFG Bank, Ltd. succeeded to the status of lender from Mitsubishi UFJ Trust and Banking Corporation due to the absorption-typedemerger of Mitsubishi UFJ Trust and Banking Corporation (the splitting company) and MUFG Bank, Ltd. (the successor company) on
April 16, 2018.

－28－

21. DISTRIBUTIONS
13th Fiscal Period(From February 1, 2018 to July 31, 2018)

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

I. Retained earnings at the end of period¥5,428,676,864¥2,437,011,775

II. Total distributions¥3,152,068,128¥2,424,772,194¥4,026¥6,946¥2,000,000,000¥-¥276,608,736¥12,239,581

In accordance with the policy described in Article 38-1 of
its Articles of Incorporation, the Investment Corporation
determines that the amount of distribution shall exceed
the amount equivalent to 90% of its distributable profit as
stipulated in Article 67-15 of the Special Taxation
Measures Law, and shall not exceed its accounting
profits as the maximum amount. Following this policy, theInvestment Corporation has decided that it shall
distribute ¥3,152,068,128, which is the amount deducting
a part of gain on negative goodwill, a part of gain on saleof real estate property and other adjustments from net
income, as the distribution of earnings.
Procedures for the distribution of amounts exceeding
distributable income are outlined in Article 38-2 of theInvestment Corporation’s Articles of Incorporation. In the
13th fiscal period, the Investment Corporation has
decided not to distribute cash in excess of distributableprofit.

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

Distributions per unit
III. Voluntary reserve
Provision of reserve for temporary
difference adjustments (Note 1)
IV. Retained earnings brought forward to
the next period

Method of calculating distribution amount

Note 1: Reserve for temporary difference adjustments
13th Fiscal Period (February 1, 2018 to July 31, 2018)
The Investment Corporation has reserved ¥2,000,000,000 as reserve for temporary difference adjustments from gain on negative goodwill in
the 13th fiscal period. At least 1% of the initial amount in equal installments over 50 years (100 fiscal periods) will be reversed every fiscal
period applied to distribution starting from the 14th fiscal period.
12th Fiscal Period (August 1, 2017 to January 31, 2018)
Not applicable－29－