November 1, 2016-April 30, 2017
24th Fiscal PeriodSEMIANNUAL REPORTNovember 1, 2016-April 30, 2017TSE 8972
Contents3 About KDO4 At a Glance6 Message from Management10 External Growth14 Internal Growth18 Financial Strategy20 Portfolio22 Management Team24 Financial Section44 Unitholders' Information2
AboutKDOKenedix Office Investment Corporation (KDO) is a dynamic and proven J-REIT focusing on investmentsin mid-sized office buildings in the Tokyo Metropolitan Area. Since listing on the Tokyo StockExchange (8972), KDO has deployed tactful property acquisition strategies inaccordance with the real estate market environment. Through steady expansion, KDO’s portfoliohas grown from 31 properties with a total acquisition price of 69.1 billion yen to 97 properties witha total acquisition price of 393.4 billion yen in April 2017.As the No.1 J-REIT focusing on mid-sized office buildings, we will continue raising portfolio qualitythrough asset reshuffle and other initiatives, while advancing performance with internal growth,backed by sound financial management.Elevator2 lifts8 10 floorsGross floor areaof 500 3,000tsubo100 150tsubo per floorCharacteristics of mid-sized office building marketOffice market by GFA(proportion of number of buildings) (Note 1)More than 5,000 tsubo3,000-5,000tsubo10.2%6.8%# of office building transactions bytransaction priceMore than 10.0 bn yen16.8%500-1,000tsubo47.4%Mid-sizedoffice buildings83.0%Less than1.0 bn yen20.9%1,000-3,000 tsubo35.6%Source: Based on the survey CBRE conducted at the requestof the Asset Management Company.15.7%30-99 people5.6%62.3%More than 100 people2.3%10-29 people17.0%Mid-sizedoffice buildings (Note 2)5.0-10.0 bn yenBusiness office by the number ofemployees (Tokyo)Mid/small-sizedcompanies92.2%1.0-5.0 bn yen46.6%Source: Compiled by the Asset Management Company basedon "the number of office building transactions bytransaction size (FY2006-FY2015)" from "RealEstate Transactions Study" by Urban ResearchInstitute Corporation, a think tank of Mizuho Trust &Banking Co., Ltd.1-9 people75.2%Source: Compiled by the Asset Management Company basedon "2014 Economic Census for Business FrameTokyo (revised results) (as of March 27, 2017)".Note 1: The above data is the proportion of number of buildings based on the size. It covers rental office buildings located in Tokyo Central 5 wards that were surveyed by CBRE (as ofthe end of Sep. 2016).Note 2: The transaction prices of mid-sized office buildings are generally around 1.0 bn yen to 10.0 bn yen.3
At a Glance＊Percentfigures in brackets indicate period over period rate.External growthPortfolio NOI yieldPortfolio appraisal profit/lossEnd of 24th fiscal periodEnd of 24th fiscal period4.6% ( 0.1 )33.1bn yen ( 7.7bn yen)%Internal growthEnd of 24th fiscal period (office building)Total monthly amount for24th fiscal period (all properties)Rent increment upon rent revisionsRent gap against the marketEnd of23rd fiscal periodEnd of24th fiscal period94.6% ( 1.2 ) 7.4mn yen- 2.1%- 2.8%LTVAverage interest rate oninterest-bearing debtIncrease in actual occupancy rate%* Occupancy rate (contracted area based): 97.8%Financial strategyCredit rating (JCR)End of 24th fiscal periodEnd of 24th fiscal periodA (positive)AA(stable)42.6% (- 0.5%)Future initiativesAim for further enhancementof our unitholder valueExternal growthSelective investmentand asset reshuffleGrowth ofunitholderInternalvalue FinancialgrowthstrategyFurther increasein actual occupancyrate and unit rent4Stable financialmanagement andreduced financial cost1.16% (- 0.03%)
PortfolioPortfolio growth (based on total acquisition price) and the number of properties (Note)(bn yen)Office (left axis)Central urban retail (left axis)# of properties (right axis)500Residential (left axis)Other (left axis)837772400686469677065679484838597979799(# of 5403010020691001st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24thfiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscal fiscalperiod period period period period period period period period period period period period period period period period period period period period period period periodMid-longterm goal0(Oct. 2005) (Apr. 2006) (Oct. 2006) (Apr. 2007) (Oct. 2007) (Apr. 2008) (Oct. 2008) (Apr. 2009) (Oct. 2009) (Apr. 2010) (Oct. 2010) (Apr. 2011) (Oct. 2011) (Apr. 2012) (Oct. 2012) (Apr. 2013) (Oct. 2013) (Apr. 2014) (Oct. 2014) (Apr. 2015) (Oct. 2015) (Apr. 2016) (Oct. 2016) (Apr. 2017)Note: The amount and the number of properties are shown as of the end of each fiscal period. Figures are truncated to the nearest billion yen.Portfolio diversificationPortfolio mainly consisted of mid-sized office buildings with advanced tenant diversificationPlan to maintain approx. 80% investment ratio in Tokyo metropolitan areaBreakdown by asset type (Note 1)Residential 1.3%(1 property)Breakdown of the number of tenantsby leased floor area (Note 3)Other 0.7%(1 property)Central urban retail5.6%(3 properties)Less than 100 tsubo66.7%End of 24thfiscal period(Apr. 2017)# of tenants:1,183100-200 tsubo22.1%End of 24thfiscal period(Apr. 2017)Office Bldg.(other)8.8%(5 properties)More than 300 tsubo6.0%200-300 tsubo5.2%Office Bldg.(mid-sized)83.4%(87 properties)Breakdown by region (Note 2)Other regional areas19.1%Office Bldg.92.2% (92 properties)End of 24thfiscal period(Apr. 2017)Other Tokyometropolitanarea26.7%Less than 200 tsubo88.8%Central Tokyo54.0%Tokyometropolitan area80.8%Note 1: Portfolio breakdown by asset type based on acquisition price (truncated to the first decimal place).Note 2: Portfolio breakdown by region based on acquisition price (truncated to the first decimal place).Note 3: Based on the number of tenants in each office building. Tenants leasing more than one property are counted as 1 tenant for each building without aggregating by name-base.5
Message from ManagementBuilding a Portfolio with Robust Profitabilityto Realize Sustainable GrowthMaking steady progress on agendas to be addressed,we achieved solid results in the 24th fiscal period ended April 2017We made steady progress on agendas to be addressed andachieved solid results in the current 24th fiscal period endedApril 2017. We are also seeing definite signs of furthergrowth.Regarding external growth, Kenedix Office InvestmentCorporation (KDO) took advantage of the need for realproperties is continuing as expected.Income from rent revisions with existing tenants isincreasing in addition to an increase in the actual occupancyrate as free rent periods gradually expire.There is still room for improvement in rent even whenestate companies to acquire property for redevelopmentjudged by comparing contracted rent for owned propertiesprojects they are engaged in and effected two mutualto market rent. We can therefore anticipate raising rents duetransactions for properties owned by KDO and primeto upward rent revisions in the near term, and consequentlyproperties owned by the real estate companies.believe that revenue growth will continue.We sold three office buildings that were not profitable andIn terms of financial management, we again reduced thehad high appraisal losses in February 2017. Although thisfinancial cost on interest-bearing debt as we did in the 23rdtransaction generated a loss on the sale, we avoided anfiscal period ended October 2016 in addition to achieving aadverse impact on distributions by using the gain on the salecredit rating increase from A to AA- (JCR) in January 2017.from the mutual transactions with the aforementioned realWe used cash on hand to reduce interest-bearing debt,estate companies. This improved both portfolio profitabilitythereby reducing the interest-bearing debt ratio by 0.5and appraisal profit.percentage point from the previous fiscal period to 42.6%.We also used part of the cash secured from the sale toacquire a competitive mid-sized office building in theGotanda district of the Tokyo Metropolitan Area thatmatched our acquisition criteria.We were able to acquire this at a relatively reasonableprice, despite this stiff competition for acquisition.Accordingly, KDO’s portfolio included 97 properties with atotal asset size of 393.4 billion yen as of April 30, 2017, theend of the fiscal period under review.6Looking at internal growth, revenue growth on existingDistributions per unit for the 24th fiscal period were 11,733yen, 2% higher than the 11,500 yen initially forecasted.The distribution growth rate for the past year was 9.6%,demonstrating solid growth in distributions.
Naokatsu UchidaDirector & COO, Head of Office REIT DepartmentKenedix Real Estate Fund Management, Inc.7
Message from ManagementWe will continue to use a variety of acquisition methodsand be selective in investments, with the aim of achieving greater growthin revenue from existing propertiesTo achieve external growth, we will continue to engage inselective investment and asset reshuffle.The view on acquisition and disposition of office buildingshas not changed substantially from six months ago in termsof our understanding of the environment. We recognize thatupgrades, and other such expenditures to draw out thepotential earning power of owned properties for furtherexpanding internal growth.In terms of financial strategy, we will continue to engage inprices are trending at high levels and there are fewconservative financial management and strive to reduceopportunities to acquire properties at a reasonable price.financial costs.While there is certainly not a wealth of acquisitionWe also intend to be agile in responding to opportunities toopportunities, we intend to continue to engage in selectiveacquire properties, while maintaining the interest-bearinginvestment by employing the proprietary network of thedebt ratio at a conservative level.Asset Management Company and a variety of otherWe will engage in selective investment in new acquisitionacquisition methods, in addition to the support line from ourof properties and asset reshuffle, work to achieve greatersponsor. Besides, we intend to continue acquiring propertiesgrowth in revenue from existing properties, and will alsoand reshuffling assets, while strictly observing our acquisitioncontinue to reduce financial cost, as the trend in interestcriteria.rates permits this.In terms of internal growth, we will strive to achieve growth inThrough these efforts, we intend to increase unitholderrevenue from existing properties. In specific terms, that meansprofit, and target greater growth in DPU and net asset valuecontinued increases in the actual occupancy rate and unit rent.(NAV) per unit, in particular.We will also engage in effective, strategic capital8expenditures on renovation works, air conditioning system
Using our wealth of accumulated insight andmanagement expertise to maximize unitholder profitas the No. 1 J-REIT in mid-sized office buildingsA large supply of office buildings is anticipated in 2018 andThe tenant base occupying the buildings is rich in small- tobeyond. Some are concerned about the impact this willmid-sized companies and sole proprietors offices. Wehave, however, we do not see an impact from a large supply,believe that detailed attention to building operation andsigns of deterioration in the operating environment or othereffective capital expenditures in addition to location andfactors for the mid-sized office buildings we own at present.quality make it easy to differentiate our properties from otherRather, we feel that there is still ample room for internalgrowth in competitive mid-sized office buildings in goodlocations, particularly for buildings in the Tokyo Metropolitansmall- to mid-sized buildings and achieve competitivesuperiority.We will continue to utilize our management expertise toArea with a monthly rent of around 10,000 yen per tsubopursue growth as the No. 1 J-REIT in mid-sized office(approx. 3.3 m ).buildings. We will also strive to achieve results and a2The market for mid-sized office buildings is broad, withrelatively high rate of growth in distributions that exceeds theconsiderable variation in management conditions, locationexpectations of unitholders, while enjoying the stability thatand building quality.comes from a diversified portfolio.9
External Growth10
A series of initiatives in the 24th fiscal period (Apr. 2017)1 Mutual transactionsKDO capitalized on the property acquisition needs of real estate companies engaged in redevelopment projects and executed two mutual transactionsinvolving properties owned by KDO and prime properties owned by the real estate companies.Transaction with Mori Building Co., Ltd. (December 1, 2016)AcquisitionARK Mori Bldg.Disposition(Compartmentalized Ownership) (Note)LocationMinato-ku, TokyoAcquisition price4,169 mn yenAssetreshuffleAppraisal value at4,310 mn yentime of acquisitionBUREX ToranomonLocationMinato-ku, TokyoDisposition price2,440 mn yenAppraisal valueupon disposition2,440 mn yenNote: Acquired 40% quasi co-ownership interest of the trust beneficiary interest in a trust with compartmentalized ownership of the 34th and 35th floors of ARK Mori Bldg.Transaction with Heiwa Real Estate Co., Ltd. (February 1, 2017)AcquisitionNishi-Shinbashi TS Bldg.LocationMinato-ku, TokyoAcquisition price8,400 mn yenAppraisal value at8,480 mn yentime of acquisitionEffect of mutualtransactionGain on sale of real estate1.6 bn yenDispositionAssetreshuffleNet cash gain on mutual transaction 1.8 bn yenKDX NihonbashiKabutocho Bldg.LocationChuo-ku, TokyoDisposition price12,400 mn yenAppraisal valueupon disposition12,400 mn yenImprovementin NOI yield2 Disposition of propertiesBy disposing of 3 unprofitable properties with high appraisal losses together for a price that exceeded their appraised values by approximately 570million yen, KDO improved portfolio profitability and appraisal profit/loss and effectively utilized a net cash gain of around 5 billion yen.Disposition of 3 properties (February 1, 2017)LocationKDX Roppongi 228 Bldg.KDX Kanda Misaki-cho Bldg.KDX Gobancho Bldg.Minato-ku, TokyoChiyoda-ku, TokyoChiyoda-ku, TokyoDisposition price of3 propertiesAppraisal value upondispositionEffect ofdisposition of3 properties5,070 mn yen2,120 mn yen961 mn yenImprovement inportfolio profitabilityElimination of appraisal lossApprox. 2.1 bn yen1,420 mn yenEffective use of acquired funds・To reduce interest-bearing debt・To cover property acquisition11
3 Acquisition of propertiesFaced with a tough acquisition environment, we acquired a competitive mid-sized office building that matched our acquisitioncriteria in the Gotanda area where we have management track record of over 10 years.Acquired BR Gotanda (compartmentalized ownership) (April 5, 2017)11F10F9FOwned by KDO8F7F6F5FOwned by third party4F3F2F1FOwned by KDOEV HallBLocationOwned by KDO(parking lot)Shinagawa-ku, Tokyo# of tenants (Note 2)5Ownership and leasehold (Note 1)Acquisition price2,200 mn yenCompartmentalized ownership(ratio of exclusive floor area: approx. 73%)Appraisal value atthe time of acquisition2,310 mn yenGFA7,395.72 m2Estimated NOI yield (Note 3)4.8 %Completion dateSep. 1991Estimated NOI yieldafter depreciation (Note 3)4.0 %Occupancy rate (Note 2)100 %Appraisal NOI yield (Note 3)5.3 %LandOwnershipBldg.Transaction highlights・We acquired this property despite the tough acquisition environment by continuing to follow it as a potential sale.・This was the third mid-sized office building that we have acquired in the Gotanda area, which is seeing a steadily increasing need for office space.・We acquired a property situated in a location with highly convenient transportation with the aim of differentiation from similar sized office buildings.BR Gotanda Bldg.oteanmYaKDX Gotanda Bldg.JRKDX Nishi-Gotanda Bldg.eLin Properties under managementNote 1: The ratio of proprietary ownership portion to the entire site area is approx. 55% and the ratio of land leasehold portion is approx. 15%.Note 2: Occupancy rate and # of tenants are as of Mar. 31, 2017. Figure for occupancy rate is rounded to the first decimal place.Note 3: Yields are calculated using the following formulas (rounded to the first decimal place):Estimated NOI yield: Calculated by dividing "NOI after excluding extraordinary factors for the year of the acquisition estimated by the Asset Management Company" by the acquisition price.Estimated NOI yield after depreciation: Calculated by dividing estimated NOI after depreciation (estimated NOI – estimated depreciation expenses) by the acquisition price.Appraisal NOI yield: Calculated by dividing "NOI calculated based on the direct capitalization method described in the relevant appraisal report (with the base date for appraisal on March1, 2017)" by the acquisition price.12
Estimated NOI yield on the acquisition and actual NOI yield on the disposition in the 24th Fiscal Period (Apr. 2017)AcquisitionCentral 5 wardsOther Tokyo areaDisposition3.9 %4.8 %(Note)Central 5 wards3.3 %(Note)Assetreshuffle(Note)Note: Yields are calculated using the following formulas by fiscal period and region of the acquisition/disposition (rounded to the first decimal place).Estimated NOI yield on the acquisition: Calculated by dividing the sum of NOI after excluding extraordinary factors for the year of acquisition estimated by the Asset Management Companyby the total acquisition price.Actual NOI yields on the disposition: Calculated by dividing the sum of the actual NOI for the 2 fiscal period prior to the period in which the property was sold, by the total acquisition price.Results and effects of property acquisition and disposition from the 22nd fiscal period (Apr. 2016) onwardKDO improved profitability, strengthened its financial base, and increased distributions. This was accomplished through ongoing selective investment andasset reshuffle with a focus on location and yield, amid the tough acquisition environment and the high price range for real estate transactions.22nd Fiscal Period (Apr. 2016)24th Fiscal Period (Apr. 2017)Portfolio NOI yield (Note)Improved profitability4.4% 0.2%4.6%Appraisal profit/lossStronger financial base17.4 bn yen 15.7bn yen33.1 bn yenDistribution per unitGrowth in distributions10,707yen 1,026 yen11,733 yenNote: Calculated as if property and urban planning taxes were assessed for the properties acquired during each fiscal period that fell under the year of acquisition without such taxes. Calculatedby multiplying the ratio of actual operating days corresponding to each fiscal period's operating days against NOI and the acquisition price for the properties acquired/sold during eachfiscal period. Figures are rounded to the first decimal place.13
Internal Growth14
Changes in occupancy and turnover ratio for office buildingsThe period-end occupancy rate has improved by 1.0% from the previous fiscal period backed by steady progress in filling vacancies.The actual occupancy rate is expected to improve further with the expiration of free rent periods and a decrease in the turnover ratio.Office building occupancy rate performance (Note 1)Occupancy rate (based on contracted area)Actual occupancy rate (excl. free rent %4.3%4.2%97.896.896.895.0Office building turnover ratio (annualized) (Note 2) (Note 3)24th fiscal period(ended Apr. 2017)10.0%7.9% 8.0%5.7%3.9%Average occupancy rate during fiscal period22nd fiscal period95.9%23rd fiscal period96.2%24th fiscal period97.1%85.0End of 21stfiscal period(Oct. 2015)End of 22ndfiscal period(Apr. 2016)End of 23rdfiscal period(Oct. 2016)End of 24thfiscal period(Apr. 2017)21stfiscal period(Oct. 2015)23rdfiscal period(Oct. 2016)25thfiscal period(Oct. 2017)EstimateNote 1: The occupancy rate (based on contracted area) is calculated by dividing leased area under contract by the leasable area. The actual occupancy rate (excl. free rent ar
(Apr. 2014) 19th scal period (Oct. 2014) 20th scal period (Apr. 2015) 21st scal period (Oct. 2015) 22nd scal period (Apr. 2016) 23rd scal period (Oct. 2016) 24th scal period (Apr. 2017) Mid-long term goal (bn yen) (# of Properties) Central Tokyo 54.0% Less than 100 tsubo 66.7% Other regio
26 Extended essay results November 2010 39 27 Theory of knowledge results November 2010 40 28 Distribution of additional points November 2006–November 2010 41 29 Mean points score worldwide November 2006–November 2010 42 30 Mean grade worldwide November 2006–November 2010 42 31 Pass rate worldwide November 2006–November 2010 43
April 3rd Raise the Flag for Autism SOM Assemblies April 6th and 20th Sundaes for Kids April 10th Carousel Players (1-4) April 13th Spirit Day – Patterns! April 14th Good Friday April 17th – Easter Monday April 18th HepB/HPV shots – Gr. 8 April 25-28th Scholastic Book Fair April 25th Gr. 3-6 to Wizard o
November 2: Broiler Order Due November 2, 9, 16, 23, & 30: Youth Leadership Mtg, 6-8pm, CEO November 3-4 : Major Show Sign-up, 5-8pm, CEO November 5: Scholarship Training, 6-8pm, CEO November 6-8: Junior Leadership Retreat, Brownwood November 9: Consumer Meeting, 5pm, CEO November 10: Photo Workshop Planning
Thursday April 7, 2016 6:30pm – 8:00pm Assembly Hall NTI & CO Meeting Thursday April 14, 2016 6:30pm NTI Room 7 NTI Archery Tournament Friday April 15 – Saturday April 16, 2016 Central HS Celebrate NTI Friday April 22, 2016 Assembly Hall Celebrate NTI Friday May 13, 2016 Assembly Hall Class of 2016 Senior Honors and Recognition Night
Tuesday, November 15, 2016 8:00 am - 4:30 pm Wednesday, November 16, 2016 8:00 am - 4:30 pm. Dismantling. Saturday, November 19, 2016 2:30 pm - 8:00 pm Sunday, November 20, 2016 8:00 am - 12 noon All exhibitors must adhere to the stated hours and complete installation no later than 4:30 pm on Wednesday, November 16, 2016.
Apr 03, 2016 · SECOND SUNDAY OF EASTER APRIL 3, 2016 MASS INTENTIONS FOR THE WEEK Monday, April 4 : Morning Prayer Tuesday, April 5 : Robert McClaskey by Shirley McClaskey Wednesday, April 6 : Janet Kane by Lynn Levick Thursday, April 7 : Marie Zimmerman by Lynn Levick Friday, April 8 : Brian Wald by Lynn Levick Saturday, April 9 : Sandra Markowski by David Markowski
Course Calendar. This is a tentative outline, and the instructor reserves the right to make changes as she deems necessary. Week Date (Mon – Sun) Activity 1 April 5 – April 11 April 11, Sunday: Lecture. 2 April 12 – April 18 3 April 19 – April 25 4 April 26 –
EMPLOYMENT/UNEMPLOYMENT DATA. . . 36 . Bill Galvin Alderperson April 2024 Craig Stevens Alderperson April 2024 Steven Campbell Alderperson April 2024 Randy Scannell Alderperson April 2024 Chris Wery Alderperson April 2024 Brian Johnson Alderperson April 2024 Mark Steuer Alderperson April 2024 Melinda Eck Alderperson April 2024
