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Financial Results Appendix for the 1St Financial Period Ended Sep. 2015 November 13, 2015

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Financial Results Appendix for the 1St Financial Period Ended Sep. 2015 November 13, 2015 Financial Results Appendix for the 1st Financial Period ended Sep. 2015 November 13, 2015 We seek to invest primarily in neighborhood, community and other shopping centers that cater to the day-to-day needs of local area customers with stable demand from both customers and retailers, in order to provide stable investment returns over the long term Appendix 1 Key characteristics of Kenedix Retail REIT Corporation (KRR) Portfolio strategies Investment criteria Primary geographic target areas Focus on the following four elements in making investment decisions: • Four major metropolitan areas, which have relatively stable populations Attractiveness Location • Selective investments in tokureishi and other areas for diversification • Ability to serve particular day-to-day • Demographic composition, number of needs of local area customers households, competing facilities in local retail trade area The Tokyo metropolitan area Focus on the four major The Greater Osaka area metropolitan Profitability Tenant mix The Fukuoka area areas The Greater Nagoya area • Occupancy, leasing status, rent level • Optimal tenant mix for the property and lease term considering tenant credit profiles and retail space usage Target portfolio distribution (based on acquisition price) Investment in land ~Seeking growth opportunities~ We also seek investment opportunities in land of retail properties for daily needs • Strong demand from retail tenants to lands (Most land-only properties owned by J-REITs are retail properties) Retail properties100% • Maintain maximum value upon termination of lease term, as the land is expected to be returned as vacant lot • Investment in lands would be limited to 20% of the portfolio Long-term stable cash flows Flexibility in layout design Win-win with 80% tenants Better payout ratio Optimize capital efficiency or more Neighborhood, Merits to KRR Merits to tenants community and other • Limited risk of contract termination due to • Reduced initial cost upon store opening shopping centers for the fixed term land lease contract as the • Enhanced capital efficiency by not owning building is owned by the tenant daily needs land on BS (Improved ROE) • Stable revenues as tenants cover the repairs • Easier procedure for renovation and maintenance expenses • No depreciation expense • Limited value-depreciation risk upon disaster 38 Retail property trends and macroeconomic conditions (1) Demographic shift in Japan Population share in Japan by area （%） （%） (million people) Projections Projections Shrinking retail 140 45 60 trade area 120 40 50 due to aging 100 35 80 30 40 population and 60 25 concentrated 40 20 30 population in the 20 15 0 10 20 four major 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 metropolitan areas 65 and over (left axis) 15–64 (left axis) Four major metropolitan areas Tokyo metropolitan area Other areas 14 and under (left axis) Aging rate (right axis) Source: Ministry of Internal Affairs and Communications, National Institute of Population and Social Source: Ministry of Internal Affairs and Communications, National Institute of Population and Social Security Research Security Research Retail market volume in Japan (JPY trillion) (JPY trillion) Ownership of monetary assets by age group (as of 2009) 150 50 under 30 1% 140 40 30s 6% 40s Domestic 130 30 70 and over 12% 28% consumption led by 120 20 60 and over 50s the elderly 110 10 61% 20% 100 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total retail Groceries Fabrics, apparel and accessories 60s (left axis) (right axis) (right axis) 33% Source: Ministry of Economy, Trade and Industry Source: Ministry of Internal Affairs and Communications Basic and selective consumption trends (YoY% change) Product types for physical stores or online shopping （%） Groceries 8 Medicines 6 Accessories/Daily commodities Mobile phones 4 Pet products 2 Large furniture Large electronics 0 Clothing Stable Small furniture -2 Cosmetics demand for -4 Tickets PCs daily necessities -6 Small electronics -8 Books CDs/DVDs/BDs -10 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Purchase more frequently at physical stores Purchase more frequently on the internet Basic consumption Selective consumption Source: Ministry of Internal Affairs and Communications Source: Ministry of Internal Affairs and Communications Note: "Aging rate" refers to the percentage of the population aged 65 and older. 39 Retail property trends and macroeconomic conditions (2) Retail sales shares by store type (%) 25 21.8 18.1 17.7 Increase 20 16.5 17.5 17.4 13.8 in specialty 15 12.0 9.9 supermarket 10 market share 5 0 1991 1994 1997 1999 2002 2004 2007 2012 2014 Specialty supermarkets GMS Department stores Convenience stores Source: Ministry of Economy, Trade and Industry Retail property opening applications by property size (%) 100 1.2 0.8 1.2 1.0 0.7 1.1 1.3 1.5 1.9 3.8 2.7 2.5 2.6 95 3.5 4.4 3.8 4.3 4.3 3.1 4.5 12.6 10.4 9.6 90 11.4 13.4 14.5 18.6 15.6 14.6 15.3 16.5 Decrease in size 85 21.4 80 13.4 13.8 18.8 of retail properties 75 15.3 83.1 70 76.7 79.5 80.4 79.3 81.0 77.4 65 72.1 69.5 73.0 69.0 73.4 0 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 (as of June 30) 5,000m² or less 5,000m²–10,000m² 10,000m²–30,000m² Over 30,000m² Source: Ministry of Economy, Trade and Industry "Compact City" policy promoted by the Japanese government through Urban Planning Guidelines Due to factors such as an aging society, the Japanese government has promoted the "Compact City" policy that encourages the formation of highly compact and convenient neighborhoods with high population concentrations Government promotion of "Compact City" We believe that the importance of neighborhood, community and other shopping centers that cater to the day-to-day needs will increase going forward 40 Leveraging extensive support from Sponsor and Alliance Companies We seek leveraging extensive support from our Sponsor, Kenedix, Inc., and Alliance Companies for our external and internal growth Sponsor Alliance Companies Type of support Pipeline support ● ● ● ● growth external external Warehousing services ● ● Support for Leasing services ● ● ● PM services ● ● ● Environmentally-friendly technology/ ● knowhow Evaluation of operating conditions ● Support forgrowth internal and advisory on operations Personnel support ● ● Other support Right to use trademarks ● ● 41 Overview of the Kenedix Group The Kenedix Group's strong commitment to J-REITs The Kenedix Group's total AUM Total AUM: JPY1,638.9 bn (as of end of Sep. 2015)(Note) (JPY bn) J-REITs Private funds / Private REIT Proprietary investments 1,800 J-REIT: JPY1,100.3 bn 1,638 1,600 69 1,480 Kenedix Office Investment Kenedix Residential Kenedix Retail REIT Corporation Investment Corporation Corporation 1,400 132 468 1,206 1,200 96 Japan Senior Living Japan Logistics Fund Inc. Premier Investment 1,097 1,111 1,117 438 Investment Corporation Corporation 92 152 1,000 161 939 Private REIT / Private funds JPY468.7 bn 844 162 496 800 734 172 542 531 Private funds 162 548 Kenedix Private Investment Corporation 600 432 1,100 349 909 Note: The Kenedix Group's total AUM includes proprietary investments of JPY699 mn. 281 400 Breakdown of AUM as of end of Sep. 2015 613 Proprietary 482 investments 200 427 4.3% 344 387 291 322 Private REIT J-REIT Private funds 67.1% 28.6% 0 as of as of as of as of as of as of as of as of as of Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Sep. 30, 2007 2008 2009 2010 2011 2012 2013 2014 2015 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 42 Overview of Alliance Companies Sumitomo Mitsui Finance and Leasing Co., Ltd. Nippon Commercial Development Co., Ltd. Founded in Feb. 1963 (Leasing business since May 1968) Founded in Apr. 2000 Main lines of business: Leasing of a variety of equipment and machinery, • Listed on the Tokyo Stock Exchange 1st Section and the Nagoya Stock loans and factoring, etc. Exchange 1st Section • Operating assets of JPY3.9 trillion (on a book value basis, as of March 31, 2015). The largest general leasing company in Japan for fiscal year Main lines of business: Real estate investment, sub-leasing / leasing / fund 2014 by lease transaction volume (with consolidated operating assets of fee businesses JPY500 bn for the real-estate sector (on a book value basis)) • "JINUSHI BUSINESS" to invest in land ownership interests • Sourcing transactions through the broad customer base of Sumitomo • Successful track record of JINUSHI projects (as of July 31, 2015): 53 Mitsui Banking Corporation projects, approx. 550,000 m2 (land area) and JPY87.0 bn (book value) Description of support Description of support • Sourcing of lease properties (pipeline support) • Sourcing of land acquisition opportunities through "JINUSHI BUSINESS" • Provision of warehousing services, financing, other services to bridge (pipeline support) funds and personnel support Shareholders: Sumitomo Mitsui Financial Group, Inc. (60%), Sumitomo • Connections with broad tenants, developed through the Corporation (40%) "JINUSHI BUSINESS" • PM services and tenant leasing services • Right to use "JINUSHI"-related trademarks P&D Consulting Co., Ltd. JINUSHI BUSINESS • Nippon Commercial Development's "JINUSHI BUSINESS" is a business Founded in Aug. 1998 model whereby they invest in land ownership interests and lease the land Main lines of business: Development and management of retail facilities, to tenants based on commercial fixed-term land lease agreements to retail consulting, etc. generate stable cash flow (rent) in the long term • Development / management of its own brand "Unicus" (10 locations) and development of other retail facilities (8 locations) (as of Sep.
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