Kenedix Residential Next Investment : FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED JANUARY 31, 2022(REIT)

KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION (3278)

Translation of Japanese Original

FINANCIAL REPORT FOR THE FISCAL PERIOD ENDED JANUARY 31, 2022(REIT) ( August 1, 2021 to January 31, 2022)

March 16, 2022

Kenedix Residential Next Investment Corporation is listed on the Tokyo Stock Exchange with the securities code number 3278.

(URL https://www.kdr-reit.com/en/)

Representative:

Tetsu Kawashima , Executive Director

Asset Management Company:Kenedix Real Estate Fund Management, Inc.

Representative:

Masahiko Tajima, President and CEO

Inquiries:

Shin Yamamoto, Head of Strategic Planning, Residential REIT Department

TEL[phone]

Planned submission of semiannual securities report: April 26, 2022

Planned start of distribution payments:

April 18, 2022

Preparing presentation material:

Yes

Hold a financial brief meeting:

No (Cancelled due to preventing the spread of coronavirus infection.

Scheduled financial results presentation webcast (Japanese

version) . )

(Amounts are rounded down to the nearest ¥million)

1. PERFORMANCE FOR THE FISCAL PERIOD ENDED January 31, 2022 (20th FISCAL PERIOD)

(1) Business Results

(Percentages show period-on-period changes)

Operating Revenues

Operating Income

Ordinary Income

Net Income

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

The 20th fiscal period ended January 31, 2022

9,143

(-0.6%)

4,840

（0.4%)

4,119

(-0.7%)

4,119

(-0.7%)

The 19th fiscal period ended July 31, 2021

9,195

(9.7%)

4,822

（11.0%)

4,147

(14.2%)

4,146

(14.2%)

Net Income per Unit

Return on

Ordinary Income

Ordinary Income to

(Yen)

Unitholders' Equity

to Total Assets

Operating Revenues

The 20th fiscal period ended January 31, 2022

4,136

3.0%

1.4%

45.1%

The 19th fiscal period ended July 31, 2021

4,189

3.2%

1.4%

45.1%

(2) Distribution

Distribution per

Total Distributions

Total Distributions

Unit (Excluding

Distribution in

Distribution Ratio

(Excluding Excess

in Excess of

Excess of

Excess of Earnings

Payout Ratio

to Unitholders'

of Earnings)

Earnings

Earnings )

per Unit (Yen)

Equity

(Millions of Yen)

(Millions of Yen)

(Yen)

The 20th fiscal period ended

4,101

4,084

-

-

99.1%

3.0%

January 31, 2022

The 19th fiscal period ended

4,117

4,100

-

-

98.9%

3.1%

July 31, 2021

(Note 1) Total Distributions for the 20th fiscal period is not the same amount as Net Income because of excluding a part of gain on sale of real estate property and other adjustments from Net Income, and adding reversal of reserve for temporary difference adjustments.

(Note 2) Total Distributions for the 19th fiscal period is not the same amount as Net Income because of excluding a part of gain on sale of real estate property and other adjustments from Net Income, and adding reversal of reserve for temporary difference adjustments.

(Note 3) Due to issuance of new investment units in the 19th period, Payout Ratio for each fiscal period is calculated as follows. Payout Ratio = Total Distributions (Excluding Excess of Earnings) /Net income × 100

This is an English-language translation of the key financials in the original Japanese announcement on our Web site released on March 16, 2022. However, no assurance or warranties are given with respect to the accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of discrepancies between this translation and the Japanese original.

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KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION (3278)

(3) Financial Position

	Total Assets	Unitholders' Equity	Unitholders' Equity to Total	Unitholders' Equity per Share
	(Millions of Yen)	(Millions of Yen)	Assets	of Common Stock (Yen)
As of January 31, 2022	302,410	135,790	44.9%	136,352
As of July 31, 2021	293,176	135,218	46.1%	135,777

(4) Cash Flow Position

		Cash Flow from Operating		Cash Flow from Investing		Cash Flow from Financing		Cash and Cash Equivalents at
		Activities		Activities		Activities		the End of the Period
		(Millions of Yen)		(Millions of Yen)		(Millions of Yen)		(Millions of Yen)
	The 20th fiscal period ended	6,135		-13,488		4,799		24,982
	January 31, 2022
	The 19th fiscal period ended	6,295		-7,721		5,545		27,535
	July 31, 2021

2. FORECAST OF RESULTS FOR THE FISCAL PERIOD ENDING JULY 31, 2022 (February 1, 2022 to July 31, 2022) AND JANUARY 31, 2023 (August 1, 2022 to January 31, 2023)

(Percentages show period-on-period changes)

			Operating Revenues			Operating Income			Ordinary Income			Net Income			Distribution per		Distribution in
											Unit Excluding		Excess of Earnings
			(Millions of Yen)			(Millions of Yen))			(Millions of Yen)			(Millions of Yen)
											Excess of Earning		per Unit
	The 21st fiscal period	9,407		4,884		4,137		4,136		4,101	-
	ending July 31, 2022	(2.9%)		(0.9%)		(0.4%)		(0.4%)
	The 22nd fiscal period	9,486		4,963		4,224		4,223		4,120	-
	ending January 31, 2023	(0.8%)		(1.6%)		(2.1%)		(2.1%)
(Reference) Estimated net income per unit (Estimated Net Income / Estimated weighted average number of units)
	The 21st fiscal period ending July 31, 2022	¥3,980 The 22nd fiscal period ending January 31, 2023 ¥4,039

Distributions per Unit Excluding Excess of Earning are not the same amount as estimated net income per unit for the 21st and 22nd fiscal periods. Total distributions for the 21st and 22nd fiscal periods are calculated with the assumption adding reversal of reserve for temporary difference adjustments and amount including a part of retained earnings brought forward that were internally reserved through the previous fiscal period to the net income.

(Note) Distribution per unit is calculated based on the number of investment units issued and outstanding totaled 1,045,758 as of today.

3. OTHER

1. Changes in Accounting Policies/Changes in Accounting Estimate/Retrospective Restatement
2. 1. Changes concerning accounting policy accompanying amendments to accounting standards: Yes
   2. Changes other than (a): No
   3. Changes in accounting estimate: No
   4. Retrospective restatement: No
3. Number of Investment Unit Issued and Outstanding (including treasury units)
4. 1. Number of investment units issued and outstanding at the end of the period (including treasury units)

As of July 31, 2021: 995,883 units	As of January 31, 2022: 995,883 units
(b) Number of treasury units at the end of the period
As of July 31, 2021: 0 units	As of January 31, 2022: 0 units

[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.

This is an English-language translation of the key financials in the original Japanese announcement on our Web site released on March 16, 2022. However, no assurance or warranties are given with respect to the accuracy or completeness of this English-language translation. The Japanese original shall prevail in the case of discrepancies between this translation and the Japanese original.

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KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION (3278)

1. Financial Statements

(1) Balance Sheets

			(in thousands of yen)
		19th Fiscal Period	20th Fiscal Period
		(As of July 31, 2021)	(As of January 31, 2022)
Assets
Current assets
Cash and deposits	16,724,647	13,828,613
Cash and deposits in trust	10,811,226	11,153,990
Operating accounts receivable	168,096	236,109
Prepaid expenses	15,823	10,310
Other	25,296	5,272
Total current assets	27,745,090	25,234,296
Noncurrent assets
Property, plant and equipment
Land	172,666	173,018
Buildings in trust	111,119,141	115,859,756
Accumulated depreciation	-15,847,746	-17,273,700
Buildings in trust, net	95,271,394	98,586,055
Structures in trust	1,249,509	1,335,781
Accumulated depreciation	-319,090	-354,077
Structures in trust, net	930,419	981,703
Machinery and equipment in trust	1,501,150	1,545,362
Accumulated depreciation	-452,582	-486,797
Machinery and equipment in trust, net	1,048,567	1,058,565
Tools, furniture and fixtures in trust	941,780	1,054,703
Accumulated depreciation	-147,578	-176,789
Tools, furniture and fixtures in trust, net	794,202	877,913
Land in trust	164,872,506	172,904,875
Total property, plant and equipment, net	263,089,757	274,582,133
Intangible assets
Leasehold right in trust	1,115,030	1,113,305
Other	2,458	1,681
Total intangible assets	1,117,488	1,114,987
Investments and other assets
Investment securities	-	109,688
Lease and guarantee deposits	89,381	89,381
Long-term prepaid expenses	998,658	1,016,936
Other	12,758	166,099
Total investments and other assets	1,100,798	1,382,104
Total noncurrent assets	265,308,044	277,079,225
Deferred assets
Investment corporation bond issuance costs	52,037	48,069
Investment unit issuance costs	71,778	48,750
Total deferred assets	123,816	96,819
Total assets		293,176,951	302,410,342

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KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION (3278)

					(in thousands of yen)
		19th Fiscal Period	20th Fiscal Period
		(As of July 31, 2021)	(As of January 31, 2022)
Liabilities
Current liabilities
Operating accounts payable		671,687		655,849
Short-term loans payable		-		2,500,000
Current portion of investment corporation bonds		1,000,000		-
Current portion of long-term loans payable		21,950,000		19,750,000
Accounts payable-other		424,095		409,744
Accrued expenses		49,510		54,800
Income taxes payable		605		605
Accrued consumption taxes		66,020		31,944
Advances received		1,203,553		1,263,949
Deposits received		76,116		71,603
Other		12,261		6,636
Total current liabilities		25,453,849		24,745,132
Noncurrent liabilities
Investment corporation bonds		7,700,000		7,700,000
Long-term loans payable		116,270,000		125,870,000
Tenant leasehold and security deposits in trust		3,396,104		3,464,769
Tenant lump sum deposits in trust		4,570,534		4,671,456
Asset retirement obligations		68,078		68,264
Other		499,957		100,012
Total noncurrent liabilities
	132,504,674		141,874,503
Total liabilities		157,958,524		166,619,636
Net assets
Unitholders' equity
Unitholders' capital		116,322,630		116,322,630
Surplus
Capital surplus		13,187,100		13,187,100
Voluntary retained earnings
Reserve for temporary difference adjustments	*2	1,900,000	*2	1,880,000
Total voluntary retained earnings
	1,900,000		1,880,000
Unappropriated retained earnings (undisposed loss)		4,296,284		4,335,589
Total surplus		19,383,384		19,402,689
Total unitholders' equity
	135,706,015		135,725,319
Valuation and translation adjustments
Deferred gains or losses on hedges		-487,588		65,386
Total valuation and translation adjustments		-487,588		65,386
Total net assets	*1	135,218,427	*1	135,790,706
Total liabilities and net assets
	293,176,951		302,410,342

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KENEDIX RESIDENTIAL NEXT INVESTMENT CORPORATION (3278)

(2) Statements of Income and Retained Earnings

(in thousands of yen）

		19th Fiscal Period	20th Fiscal Period
		February 1, 2021 to	August 1, 2021 to
		July 31, 2021	January 31, 2022
Operating revenues
Rent revenue-real estate	*1	8,145,546	*1	8,434,013
Other lease business revenue	*1	612,776	*1	528,925
Gain on sale of real estate property	*2	437,537	*2	180,124
Total operating revenues		9,195,861		9,143,063
Operating expenses
Expenses related to rent business	*1	3,333,440	*1	3,257,431
Asset management fees		668,991		684,755
Asset custody fees		15,034		15,460
Administrative service fees		50,368		51,082
Directors' compensation		8,100		5,400
Other operating expenses		297,440		288,082
Total operating expenses		4,373,375		4,302,212
Operating income		4,822,485		4,840,850
Non-operating income
Interest income		43		42
Gain on forfeiture of unclaimed dividends		397		141
Consumption taxes refund		43,287		-
Interest on refund		76		-
Total non-operating income		43,805		184
Non-operating expenses
Interest expenses		529,613		533,039
Interest expenses on investment corporation bonds		23,359		26,994
Borrowing expenses		130,855		134,043
Amortization of investment corporation bond issuance costs		4,505		3,968
Amortization of investment unit issuance costs		30,528		23,027
Total non-operating expenses		718,862		721,074
Ordinary income		4,147,428		4,119,960
Income before income taxes		4,147,428		4,119,960
Income taxes
Current		605		605
Total income taxes		605		605
Net income		4,146,823		4,119,355
Retained earnings brought forward		149,461		216,234
Unappropriated retained earnings (undisposed loss)			4,296,284		4,335,589

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