Kenedix Retail REIT : Financial Results for the 13th Fiscal Period ended September 30, 2021

Kenedix Retail REIT Corporation

Financial Results

for the 13th Fiscal Period ended September 30, 2021 November 16, 2021

Contents

Section 1	Executive summary	P.3
Section 2	Impact of COVID-19	P.11
Section 3	KRR highlights and updates	P.17
Section 4	Growth strategies focusing on stability	P.24
Appendix 1	Key characteristics of KRR	P.35
Appendix 2	Portfolio and unitholder information	P.44

Security Code

3453

01 Executive summary

Executive summary

Returning to the growth path in with/ post-pandemic era

Stable asset management amid the pandemic	Credit improvement
(the 13th FP ended September 2021)

• Continued strong performance of KRR's core tenants that deal with daily necessities, even amid the COVID-19 pandemic
• Acquisition of new properties (4 properties for JPY 22.3 billion) through the 5th public offering conducted at the beginning of the 13th FP also contributed to the increase in revenue and profit
• Achieved a record high of JPY 7,328 DPU(Note 1), due to the limited impact of the pandemic on rents as well as gains on sale of properties and cost reduction

• Credibility enhanced, mainly due to Kenedix Group affiliated with Sumitomo Mitsui Finance and Leasing Group, diversification driven by AUM growth and stable management amid the pandemic
• Long-termcredit rating outlook (JCR) was upgraded to "A+ (Positive)" in January 2021
• Increased the number of lenders from 12 to 18, borrowing from 6 new lenders since the 13th FP
• Borrowing conditions also improved along with the enhanced credibility

Aim for enhanced stability and sustainable growth in anticipation of post-pandemic era

• Some tenants, mainly service-oriented tenants(Note 2), are taking time to recover their sales amid the pandemic; however, there are signs of recovery following the lifted state of emergency
• Seek to improve the quality and profitability of portfolio by continuous asset and tenant reshuffling, and aim for growth through public offering at appropriate timing
• Set mid-term stabilized DPU and AUM targets at JPY 7,000 and JPY 340 billion, respectively, in response to the recovery of unit price to the pre- COVID level
• Aim to reduce funding costs by diversifying financing methods and lenders, in addition to upgrading to "AA-" credit rating
• Newly set up Sustainability Committee and Sustainability Office to further promote ESG initiatives

Note 1: DPU of the first FP was JPY 7,414, but the asset management period covered 233 days.

Note 2: Refer to tenants not engaged in sale of goods, such as restaurants.

4

Executive summary

Unit price recovery

Unit price and market capitalization

Market capitalization

KRR's unit price

NAV per unit

TSE REIT Index

(right axis)

(left axis)

(left axis)

(left axis)

(JPY)

350,000

May 18, 2020

Nov. 17, 2020

Apr. 7, 2021

May 18, 2021

10th FP earnings

11th FP earnings

5th PO launch date

12th FP earnings

announcement

announcement

announcement

300,000

250,000

200,000

150,000

100,000

50,000

(JPY mm) 350,000

300,000

250,000

200,000

150,000

100,000

50,000

0									0
Feb 19, 2020	May 19, 2020	Aug 19, 2020	Nov 19, 2020	Feb 19, 2021	May 19, 2021	Aug 19, 2021	Nov 15, 2021

Note: Calculated using the TSE REIT Index as of Feb. 19, 2020 when the 2020 highest price was recorded for the TSE REIT Index as the closing price for KRR unit price.	5