Kenedix Retail REIT : Notice Concerning Acquisition of Properties (Higashimatsuyama Shopping Center, Prima Meat Packers Kinki Center)

Translation of Japanese Original

April 4, 2022

To All Concerned Parties

REIT Issuer:

Kenedix Retail REIT Corporation

Representative: Moyuru Watanabe, Executive Director

(Securities Code: 3453)

Asset Manager:

Kenedix Real Estate Fund Management, Inc.

Representative: Masahiko Tajima, President & CEO

Contact: Koichiro Nobata, Head of Strategic Planning,

Retail REIT Department

TEL: [phone]

Notice Concerning Acquisition of Properties

(Higashimatsuyama Shopping Center, Prima Meat Packers Kinki Center)

Kenedix Retail REIT Corporation ("KRR") announced today that Kenedix Real Estate Fund Management, Inc. ("the Asset Manager"), the asset manager for KRR, has decided to acquire the following properties. With respect to the acquisition of Higashimatsuyama Shopping Center from the seller, which is deemed a related party under the Retail REIT Division Related-Party Transactions Rules, the acquisition has been deliberated and approved by way of a resolution passed by KRR's Board of Directors, and the Asset Manager has obtained the consent of the Executive Director of KRR for the transactions based on the resolution.

1. Outline of the acquisition

Property type (Note 1)	Property name	Location	Anticipated acquisition price (million yen) (Note 2)	Appraisal NOI yield (%) (Note 3)	Brokerage
NSC	Higashimatsuyama Shopping Center	Higashimatsuyama, Saitama	4,080	6.4	N/A
L	Prima Meat Packers Kinki Center (90% quasi-co-ownership interest)	Nishiyodogawa-ku, Osaka, Osaka	1,047	5.2	N/A
Total acquisition price / Average NOI yield (%)	5,127	6.1	-

(1)	Contract date:	April 4, 2022
(2)	Acquisition date:	April 28, 2022
(3)	Seller:	Please refer to Item 4. Seller's profile for details
(4)	Acquisition funds:	Cash on hand
(5)	Settlement method:	Payment in full at settlement
Notes:

• 1. Properties are categorized into the following six types of properties: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC (Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center), SS (Specialty Store) and L (Logistics facility).

• 2. Excluding acquisition costs, adjustment amount of property tax and city-planning tax, consumption tax, etc. Anticipated acquisition price for Prima Meat Packers Kinki Center is 1,047,500,000 yen, but the figures are rounded down to the nearest unit.

• 3. "Appraisal NOI yield" is calculated by dividing the appraisal NOI of the anticipated property as on the appraisal report as of March 1, 2022 by the acquisition price for the property and rounded to the first decimal place.

  "Appraisal NOI" refers to the net operating income before depreciation expenses, which is calculated by deducting the operating expenses

from the operating revenues described in the appraisal report, and thus, differs from NCF (Net Cash Flow) which is calculated by adding the profit from the investment of tenant deposits to and deducting capital expenditures from NOI. The appraisal NOI here is the NOI calculated using the direct capitalization method.

2. Reason for the acquisition

KRR makes focused investment in shopping centers for daily needs while it has expanded its investment targets to distribution centers. The acquisition is made to diversify and enhance the portfolio to realize the growth of asset size and secure stable revenues, in accordance with KRR's investment targets and policies as set forth in its Articles of Incorporation.

T-34 Higashimatsuyama Shopping Center Acquisition highlight:

An NSC housing a grocery store as the core tenant and specialty stores providing daily necessities with easy access to wide areas including the city center

(1) Features of the property

• ・ The property is a shopping center consisting of Seiyu building providing groceries as well as other daily necessities and Sundrug building.

• ・ Seiyu operates one of the largest grocery supermarkets in the area on the first floor of Seiyu building. The building also features specialty stores including a dollar shop, fast food shops and service-oriented tenants on the first floor and a large apparel store, health clubs, etc. on the second floor, providing convenience to the community. Seiyu Higashimatsuya has served the community since its opening in 1998 and is rooted in the community. The flat parking area, the 2nd floor and the roof of the building provides parking spaces for 943 vehicles in total.

• ・ The tenants in Seiyu building and Sundrug Higashimatsuyama in Sundrug building create synergistic benefits for the shopping center.

(2) Overview of the trade area

• a. Location and access

  The property is located in the residential area spreading along Tobu Tojo Line in the northern part of Higashimatsuyma. The property has easy access to wide areas including the populated city center as Route 407 running north and south is located to the east of the property, and the property is facing a major road which connects Route 407 and Prefectural Route 66.

• b. Characteristics of the trade area ・ Based on the 2015 Population Census, the population in the catchment area was approximately 12,000 people in the 1km radius, approximately 65,000 people in the 3km radius, and 101,000 people in the 5km radius. The neighborhood around Tobu Tojo Line Higashi-matsuyama station is highly populated as the area is within commuting distance from CBD, taking approximately 46 minutes from Higashi-matsuyma station to Ikebukuro station by rapid express train on Tobu Tojo Line.

  ・ The population have remained stable as the population in 2015 within the 1km, 3km and 5km radius were 101.3%, 99.0% and 100.7%, respectively, compared to population numbers in 2010.

L-10 Prima Meat Packers Kinki Center

Acquisition highlight:

A distribution center with advantages in easy access to CBD in the Greater Osaka area and securing labor force (1) Location and access

The property is located in Nishiyodogawa-ku, where logistics facilities concentrate along Osaka Bay, and approximately 0.25km from Kashima Interchange of Hanshin Expressway 11 Ikeda Route. The area has potential as a delivery base for the two major consumption areas in in the Kansai region. The area is also one of the highly valued distribution sites in Greater Osaka area with no burden of employment costs related to the Port Labor Law since the property is outside the area subject to the law and its proximity to JR Tozai

Line Kashima station.

• (2) Features of the building

  Using the property as a storage logistics facility is assumed as its land area is relatively small and the property is a multi-story facility. Potential tenants for storage logistics facilities are relatively limited. However, the facility can expect potential tenants depending on the level of rent as the facility has certain size of the truck yard where heavy trucks can park, and the rarity of the location is evaluated higher than facility specifications.

• (3) Tenant

  Prima Meat Packers, Ltd., a major food company, is the current tenant. The continuance use of the property by the current tenant is highly expected considering its location with high potential. A variety of potential re-tenants can be assumed, including 3PL operators, food companies, wholesalers distributing groceries at three different temperatures, which provide high-level delivery services such as on-time delivery, daily frequent delivery, emergency delivery, etc.

3. Details of the property

T-34 Higashimatsuyama Shopping Center

Property name

Type of specified asset Trustee

Trust term Location (Note 1)Higashimatsuyama Shopping Center Trust beneficiary interest in real estate Mitsubishi UFJ Trust and Banking Corporation April 28, 2022 to March 31, 2042 (planned)

A: 11-2, Komatsubaracho, Higashimatsuyama, Saitama B: 11-7, Komatsubaracho, Higashimatsuyama, Saitama

Form of ownership Land areaProprietary ownership 33,860.98 m2

Land

Zoning

Building coverage ratio Floor-area ratioCategory II residential area 60% 200%

Form of ownership Gross floor area

Proprietary ownership A: 23,903.21 m2

B: 991.73 m2

Building (Note 1)Completion dateUsage

A: Retail store, parking lots B: Retail store

Structure/No. of stories

A: SRC /3-story building with flat roof B: S-structure / 1 above-ground floor

Master lessee

Type of master lease PM

- -

Sub-PM PML (Note 1)

Kenedix Real Estate Fund Management, Inc. (planned) ITOCHU Urban Community Ltd. (planned)

A: 5.5%

B: 6.3%

Acquisition price Appraisal value Real estate appraiser Collateral

4,080 million yen 4,650 million yen (as of March 1, 2022) Daiwa Real Estate Appraisal Co., Ltd. None

Description of tenancy

(as of February 28, 2022)

Number of tenants Annual rent Tenant deposits Leased area Leasable area Occupancy rateRemarksL-10 Prima Meat Packers Kinki Center

2

Not disclosed (Note 2) Not disclosed (Note 2) 36,490.48 m2 36,490.48 m2 100%

• · Part of this property is not in compliance with the Fire Service Act. However, renovation and improvement will be completed at the expense and responsibility of the tenant.

• · Part of this property is not in compliance with the Electricity Business Act. However, renovation and improvement will be completed at the expense of the seller and the responsibility of KRR.

• · Some of the land of this property contains soil pollutants that exceed the standard values stipulated in the Soil Contamination Countermeasures Law. KRR commissioned Tokio Marine dR Co., Ltd. to conduct soil contamination risk surveys, and has been provided with the opinion that with respect to the current use of the property no groundwater is used for drinking, and almost the entire site is covered or planted, and that accordingly, the risks of damage to health posed by this property are evaluated low.

Notes:

• 1. A refers to Seiyu building and B refers to Sundrug building.

• 2. Not disclosed as the lessees' consent has not been obtained.

Property name	Prima Meat Packers Kinki Center
Type of specified asset	Trust beneficiary interest in real estate (90% quasi-co-ownership interest) (Note 1)
Trustee	Sumitomo Mitsui Trust Bank, Ltd.
Trust period	April 28, 2022 to March 31, 2042 (planned)
Location	2-2-39, Takeshima, Nishiyodogawa-ku, Osaka, Osaka
Land (Note 2)	Form of ownership	Proprietary ownership
Land area	3,201.33 m2 (Note 3)
Zoning	Industrial area
Building coverage ratio	60%
Floor-area ratio	200%
Building (Note 2)	Form of ownership	Proprietary ownership
Gross floor area	6,971.47 m2
Completion date	October 28, 1993
Usage	Warehouse, office, parking lot
Structure/No. of floors	SRC / 1 underground and 6-story building
Master lessee	Fukuda and Partners Co., Ltd.
Type of master lease	Sublease type
PM	Kenedix Real Estate Fund Management, Inc. (planned)
Sub-PM	ITOCHU Urban Community Ltd. (planned)
PML	4.3%

% %

Acquisition price	1,047 million yen
Appraisal value	1,080 million yen (as of March 1, 2022) (Note 4)
Real estate appraiser	Japan Real Estate Institute
Collateral	None
Description of tenancy Number of tenants Annual rent Tenant deposits Leased area Leasable area Occupancy rate	(as of February 28, 2022)
1
Not disclosed (Note 5)
Not disclosed (Note 5)
6,274.32m2 (Note 4)
6,274.32 m2 (Note 4)
100.0%
Remarks	· Part of this property is not in compliance with the Building Standards Act and the Fire Service Act. KRR, however, has agreed with the seller that renovation and improvement will be completed at the expense and responsibility of the seller. · KRR will execute a quasi-co-ownership agreement with the quasi-co-owner (10% trust beneficiary co-ownership interest) of the property ("the Quasi-Co-Owner"). The agreement will stipulate the method of decision making concerning the property, such as the preferential offer to the other quasi-co-owner in the sale of quasi-co-ownership. · Quasi-co-ownership interest (10% trust beneficiary co-ownership interest) of the Quasi-Co-Owner is planned to be pledged as a collateral. When there is a foreclosure on the quasi-co-ownership, KRR will have a preferential right to negotiate for the quasi-co-ownership.
Others	Notes: 1. KRR will acquire 90% of the quasi-co-ownership interest of the trust beneficiary right in the property. Seller will hold 10% of the quasi-co-ownership interest of the trust beneficiary right in the property. 2. Nevertheless, KRR will acquire the quasi-co-ownership interest, it refers to the entire land and building of the property. 3. The figure includes the private roadway (approximately 165 m2 in total) designated as a road based on Article 42, Paragraph 1, Item 3 of the Building Standards Law. 4. Represents the amount corresponding to the ratio of quasi-coownership interest of the trust beneficiary right (90%) to be acquired by KRR. 5. Not disclosed as lessee's consent has not been obtained.

4. Seller's profile

T-34 Higashimatsuyama Shopping Center

Name	SMFL MIRAI Partners Company, Limited
Address	1-3-2, Marunouchi, Chiyoda-ku, Tokyo
Name and title of representative	President, Tatsurou Terada
Description of business	1. Real estate business 2. Environmental and energy business