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    4321   JP3281630008

KENEDIX, INC.

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Kenedix : Sustainability Report 2019

04/22/2020 | 02:38am EDT

Sustainability Report 2019

April 2020

Contents

Message from the President .................................................................................................................................................................................

3

Dedicated to both sustained growth and social responsibility .............................................................................................................

3

Build a stronger infrastructure for achieving both sustained growth and social responsibility .................................................

3

Material issues and sustainability policies....................................................................................................................................................

3

To our stakeholders .............................................................................................................................................................................................

4

Initiatives for Sustainability....................................................................................................................................................................................

5

Our mission and medium-tolong-term vision...........................................................................................................................................

6

Sustainability promotion structure .................................................................................................................................................................

9

Material issues.....................................................................................................................................................................................................

10

Sustainability policies........................................................................................................................................................................................

11

Stakeholder engagement.................................................................................................................................................................................

12

Contribution to a sustainable environment ...................................................................................................................................................

14

Sustainability policies -Contribution to a sustainable environment- ..............................................................................................

15

Environmental policies and external ratings..............................................................................................................................................

15

Reduction of energy consumption and CO2 emissions (Climate change initiatives) ................................................................

18

Reduction of water consumption and waste materials..........................................................................................................................

22

Collaboration with tenants for environmental initiatives ......................................................................................................................

23

Biodiversity ...........................................................................................................................................................................................................

24

Our commitment to a diverse society..............................................................................................................................................................

28

Sustainability policies - Our commitment to a diverse society - .....................................................................................................

29

Providing properties with environmental and social considerations ................................................................................................

29

Improving resilience/climate adaptation....................................................................................................................................................

34

Initiatives for an aging society .......................................................................................................................................................................

37

Stakeholder engagement.....................................................................................................................................................................................

39

Sustainability policies - Stakeholder engagement - ............................................................................................................................

40

Stakeholder engagement.................................................................................................................................................................................

40

Continuous improvement of customer satisfaction................................................................................................................................

40

Community engagement.................................................................................................................................................................................

44

Managing conflicts of interests......................................................................................................................................................................

47

Initiatives for our shareholders and investors...........................................................................................................................................

48

Attractive working environment ........................................................................................................................................................................

50

Sustainability policies - Attractive working environment -................................................................................................................

51

Recruiting, employee retention and career advancement....................................................................................................................

51

Health and wellbeing of employees.............................................................................................................................................................

54

Diversity and equal opportunities.................................................................................................................................................................

58

Responsible organization .....................................................................................................................................................................................

60

Sustainability policies - Responsible organization - ............................................................................................................................

61

Corporate governance......................................................................................................................................................................................

61

Compliance...........................................................................................................................................................................................................

68

Risk management...............................................................................................................................................................................................

73

Commitment to responsible investments ..................................................................................................................................................

76

Relevant data............................................................................................................................................................................................................

78

Relevant data (environment) ..........................................................................................................................................................................

79

Relevant data (social) ........................................................................................................................................................................................

79

Relevant data (stakeholder) ............................................................................................................................................................................

79

Relevant data (employment)...........................................................................................................................................................................

80

Relevant data (system use, etc.).....................................................................................................................................................................

81

Relevant data (governance) ............................................................................................................................................................................

82

GRI Standards comparison .................................................................................................................................................................................

83

Editorial policy

The purpose of this publication is to provide all Kenedix stakeholders with information about the sustainability policies and activities of the Kenedix Group. We hope this information gives you a better understanding of our commitment and goals involving sustainability.

Publication data

February 2020 (As a general rule, to be revised every March)

Period covered by this report

January 1, 2019 to December 31, 2019

Some information concerns activities prior to 2019.

Scope of reporting

Kenedix, Inc. and main group companies (excluding special purpose companies and certain other companies)

Main group companies

Kenedix Real Estate Fund Management, inc.

Kenedix Investment Partners, Inc.

Kenedix Property Management, Inc.

Kenedix Engineering, Inc.

Space Design Inc.

Bit Realty, Inc.

Kenedix Asia Pte. Ltd.

Kenedix Westwood, LLC

Guidelines used for reference

GRIGlobal Reporting Initiative)「GRI Standards

Contact point for questions regarding the report

Corporate Communications Office, Kenedix, Inc. E-mail: kdx_cco@kenedix.com

Message from the President

Dedicated to both sustained growth and social responsibility

Kenedix has been a source of a diverse array of opportunities for investors since the start of operations in 1995. Today, we are Japan's largest independent real estate management organization with more than ¥2 trillion of assets under management. Operations encompass many asset categories and include numerous funds. We manage publicly owned J- REITs specializing in sectors such as midsize office buildings, residential properties, healthcare facilities, hotels, retail facilities, and logistics facilities. Asset management also includes a private REIT that own large office buildings and other properties and many private funds.

We manage real estate that is used by an enormous number of tenants as well as visitors, customers and others. Overseeing this real estate requires working closely with many investors and property management companies. In addition, we manage properties while fulfilling our obligations to the communities where they are located and to the environment. The breadth and scale of our activities means that we must maintain sound relationships with many types of stakeholders. We are well aware of the responsibilities associated with the significant social and environmental effects of our real estate asset management operations.

Based on this understanding of the various ways that real estate affects our stakeholders, our goal is to achieve sustained growth while meeting our social responsibility by realizing the full potential of real estate.

Build a stronger infrastructure for achieving both sustained growth and social responsibility

Building a stronger infrastructure for achieving both sustained growth and social responsibility is one of the basic policies of the current medium-term management plan, Partners in Growth, Next 2020. To reinforce activities involving sustainability, including ESG (environment, society, governance), we established the Corporate Communications Office in April 2018 as a department responsible solely for these activities. With this office playing a central role, the entire Kenedix Group will increase its activities for more progress concerning sustainability.

Material issues and sustainability policies

To examine issues that will have material impact on both our business operations and society, Kenedix held discussions with relevant departments, group companies, external professionals and other stakeholders. As a result, the Board of Directors made the final material issue selections. All issues are critical with regard to our real estate operations as well as the sustainability of the Kenedix Group. For these issues, we established five key areas: contribution to a sustainable environment, commitment to a diverse society, stakeholder engagement, attractive working environment, and responsible organization. By focusing on these themes, we are committed to contributing to sustainability and the achievement of the Sustainable Development Goals (SDGs).

3

We have set Sustainability Policies, which covers all ESG issues, expanding the scope of our previous Environmental Policies to create guidelines for all sustainability initiatives. Adhering to this new policy, the Kenedix Group will conduct unified activities that target the material issues.

Promotion of information disclosure

We have been working to enhance information disclosure related to sustainability since the establishment of the specialized department in 2018. The three listed REITs where Kenedix is the main sponsor, etc. have been engaged in various sustainability initiatives since before, and by comprehensively summarizing such initiatives of the group on website and sustainability report, we have been working to make our stakeholders understand our efforts. As a result of these efforts, we have been able to be included in the ESG indices adopted by Government Pension Investment Fund (GPIF) and communicate with overseas investors based on the disclosed information.

To our stakeholders

Stakeholder engagement is one of the key areas of the Kenedix Group. We consider continuous dialogue with shareholders, investors and all stakeholders with whom we interact in conjunction with the properties and funds we manage is essential and are ambitious to become a real estate asset management company that commit responsible investment. We sincerely ask for your continued support.

Taisuke Miyajima

President & CEO, Kenedix, Inc.

4

Initiatives for Sustainability

5

Our mission and medium-tolong-term vision

Mission statement

Kenedix is dedicated to realizing the full potential of real estate.

Asset management at the Kenedix Group is guided by the goal of realizing the full potential of real estate. Accomplishing this requires more than simply pursuing short-term gains. Our activities combine carefully selected strategies, timing and financing schemes in order to precisely match the needs of investors and reflect the location and distinctive characteristics of each property.

Our mission statement, "Kenedix is dedicated to realizing the full potential of real estate," expresses our commitment to the creation of real estate value. We will remain focused on this goal in order to remain a driver of growth and progress in the real estate fund market.

Corporate mission

6

Long-term vision

We have established the following long-term vision for 2025.

Kenedix Vision 2025

-To ensure the sustainable growth and increased corporate value over the medium to long term-

*The Kenedix Group market cap includes the market value of REITs where Kenedix serves as the main sponsor.

We have clearly defined the Kenedix Model - Kenedix does not own real estate directly. Properties are held by funds that are established and managed by the Kenedix Group.

Our core strengths are the independence to work with diverse business partners, flexibility and creativity in our management decisions, innovation in our business schemes, and a commitment to taking on the challenge of creating real estate value by acquiring even more advanced specialized expertise, and a high degree of transparency in our dissemination of information. The effective use of all these strengths by the Kenedix Group is what underpins the success of the Kenedix Model.

The business model of the Kenedix Group does not rely on leasing revenue earned on real estate holdings and increases in real estate prices. We aim to increase assets under management (AUM) as the earnings base by providing better investment opportunities and robust asset management capabilities. In this manner, the Group targets AUM of ¥4 trillion, a group market cap of ¥2 trillion and ROE of 15%.

7

Medium-term management plan

We have established the following medium-term management plan for 2018-2020.

Partners in Growth, Next 2020

Basic policies

Quantitative targets

8

Sustainability promotion structure

The Corporate Communications Office, which is supervised directly by the President and CEO, is responsible solely for sustainability activities. This office has a Kenedix director as the Office Manager and performs the centralized oversight of all types of sustainability programs at the Kenedix Group.

As to sustainability related activities for listed REITs, Sustainability Committees separately established for each fund at Kenedix Real Estate Fund Management, Inc. are responsible to promote.

The Sustainability Committee is chaired by the Head of each REIT and consists of department managers at the REIT and others. The committee meets every three months, as a rule, to discuss sustainability policies and targets, consider various activities, and monitor sustainability programs and for other purposes. Discussions also incorporate social trends and asset management performance. Items discussed and reported at these committee meetings are reported to the Asset Management Committee of the Asset Manager and the Board of Directors of the Investment Corporation.

9

Material issues

Kenedix has established material issues in order to identify subjects that are critical for achieving sustained growth of the Kenedix Group along with stakeholders and society. We will make commitment to find solutions to these issues both in business and society by making initiatives

that reflect the opportunities and risks associated with each issue. Furthermore, we intend to contribute to achieving the SDGs by carrying measures for our materiality.

Process of defining material issues

Material issues of the Kenedix Group

Key areas and applicable SDGs

Material issues

Contribution to sustainable environment

Reduction of energy consumption and CO2 emissions

Reduction of water consumption and waste materials

Collaboration with tenants for environmental initiatives

Commitment to a diverse society

Providing properties with environmental and social

considerations

Improving resilience/climate adaptation

Initiatives for an aging society with fewer children

Stakeholder engagement

Continuous improvement of customer satisfaction

Community engagement

Managing conflicts of interests

Attractive working environment

Recruiting, employee retention and career advancement

Health and wellbeing of employees

Diversity and equal opportunities

Responsible organization

Compliance

Risk management

Commitment to responsible investments

10

Sustainability policies

As material issues are defined, we have set Sustainability Policies, expanding the scope of the previous Environmental Policies to cover ESG issues

comprehensively. The Kenedix Group will adhere to the Sustainability Policies as the basis for unified initiatives towards the material issues.

Key areas

Sustainability policies

Improving the environmental performance of the properties we

manage is one of our social missions. We will lower the

environmental impact and make contribution to environmental

Contribution to a sustainable environment

sustainability by constantly reducing the negative

environmental impact of these properties, such as energy

consumption, CO2 emissions, water consumption and the

generation of waste materials. We also have activities for the

proper management of hazardous substances and reduction in

their use.

We contribute to the diversity of society while taking into

Commitment to a diverse society

account the social impact of our properties. We are committed

to maintaining safety, confidence, good health, comfort and

diversity regarding our tenants and the communities where we

operate.

We manage our properties as a responsible real estate asset

Stakeholder engagement

management company by stressing the importance of

engagement with our stakeholders such as investors, tenants,

business partners, communities and property management

companies.

We aim to maintain an attractive working environment by

Attractive working environment

implementing measures for employees' health and wellbeing

and for diversity and equal opportunities. To enable employees

to realize their full potential, we will provide a variety of training

programs and other educational opportunities.

We have sound compliance and risk management activities in

Responsible organization

all of our business activities. We are committed to the principle

of responsible property investments by a responsible

organization by aligning our operations with global ESG

initiatives and actively disclosing ESG information.

11

Stakeholder engagement

Investments in properties that we make as part of our real estate asset management operations create relationships and obligations concerning a broad spectrum of stakeholders. This is why stakeholder engagement is one of our key areas. Constant interaction with stakeholders is

essential for establishing sound relationships. We are dedicated to using these relationships for even better asset management activities that can in turn help make society better.

Stakeholders

Our Policy for Dialogues

Major Dialogue Channels

Customers of properties

Our priority is to provide a comfortable

Frequent exchanges of ideas by using

we manage

environment with safety and confidence so

property

management

companies,

(tenants of office buildings

that we can

ascertain

the various

needs of

customer

satisfaction surveys,

use of

stakeholders

and

heighten

customer

digital signage to supply information,

and retail facilities, residents

satisfaction. We do this by building strong

collaboration

with

tenants

for

of residential properties and

lines for frequent communications, performing

environmental

initiatives

and

other

healthcare facilities and

customer satisfaction

surveys,

improving

activities

others)

convenience for stakeholders and using other

measures.

Client investors of funds we manage

(private fund investors, REIT investors and others)

Business partners

(property managers of portfolio properties and others)

Communities

(communities where portfolio properties are located and their residents)

Employees

Shareholders and other investors

Private funds and private REITs

Frequent

meetings, asset

management

We use frequent meetings with institutional

with strict measures to prevent conflicts of

investors to give them a thorough

interest and other activities

understanding of our funds. For direct

conversations, we ask these investors to tell us

about requests, suggestions and any other

matters.

Listed REITs

Frequent

meetings,

earnings

There are frequent institutional investor

announcement information meetings for

meetings as well as earnings announcement

securities analysts, information meetings

information meetings for securities analysts

for individual investors, general unitholder

and information meetings for individual

meetings and meetings to report fund

investors. We also use questionnaires and

performance,

various

investor

surveys,

other methods for direct communications with

strict measures to prevent conflicts of

investors.

interest and other activities

Periodic meetings and other activities are used

Periodic

meetings,

feedback

on

to give investors information about portfolio

assessments

of property

management

properties, a fund's current performance and

companies and other activities

any important issues. Furthermore, we assess

the performance of property management

companies periodically and announce the

results along with items that require

improvements.

We use portfolio properties in many ways to

Cooperation

with

communities

by

contribute to the vitality and convenience of

allowing the temporary use of properties

their surrounding areas. For example, we offer

(bicycle sharing site, disaster evacuation

a property's common and open space for a

site, early voting location or other use),

variety of activities on a temporary basis. At

improvement of real estate environment

some locations, our properties are used to

to contribute to development of

increase greenery in a neighborhood in order

communities where our properties are

to create a better environment.

located (planting vegetation, Satoyama

project or other uses), and other forms of

cooperation

We hold personnel performance and goal

Semiannual personnel performance and

discussions with employees regularly to learn

goal discussions with feedback, more

their individual needs and other information

education

assistance

to

support

about requests, goals and other subjects. Our

recruiting,

retention

and

skill

people receive support for education and we

development,

working style

reforms,

are improving the working environment which

support for health management, and the

provide programs for childcare, elderly parent

upgrade of the Rules of Employment to

care and other family requirements.

include support for child or elderly parent

care, and other types of benefits and

support

We use the fair and timely disclosure of

Frequent

meetings,

earnings

information to be a source of information with

announcement information meetings for

substantial added value. To give investors a

securities analysts, information meetings

better understanding of Kenedix, we use a

for individual investors, general unitholder

number of effective IR tools and activities. We

meetings and meetings to explain

also contact investors directly to hear their

strategies and goals, various surveys, strict

thoughts and suggestions.

measures to prevent conflicts of interest

and other activities

12

Contribution to a sustainable environment

External evaluation

MSCI Japan ESG Select Leaders Index

The MSCI Japan ESG Select Leaders Index is developed by MSCI Inc. (United States, "MSCI"), the industry leader in ESG research who offers various tools to support the investment decisions of major investors around the world. This index is based on ESG research by MSCI, which is used by more than 1,000 companies worldwide, and is an ESG

comprehensive index that comprehensively reflects various ESG risks in the market portfolio.

We are selected for membership in the MSCI Japan ESG Select Leadesr Index.

In addition, we received a rating of A in the MSCI ESG Rating assessment in 2019.

(Note) THE INCLUSION OF KENEDIX, INC. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF KENEDIX, INC. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

S&P/JPX Carbon Efficient Index

The S&P/JPX Carbon Efficient Index is developed by S&P Dow Jones Indices, one of the world's largest independent index companies, based on carbon emissions data from Trucost, a pioneer in environmental assessment. This index increases the investment weight of companies with high carbon efficiency and those that disclose information on greenhouse gas emissions within the same industry.

We are selected for membership in the S&P/JPX Carbon Efficient Index.

13

Contribution to a sustainable environment

Contribution to a sustainable environment

14

Contribution to a sustainable environment

Sustainability policies

-Contribution to a sustainable environment-

Improving the environmental performance of the properties we manage is one of our social missions. We will lower the environmental impact and make contribution to environmental sustainability by constantly reducing the negative

environmental impact of these properties, such as energy consumption, CO2 emissions, water consumption and the generation of waste materials. We also have activities for the proper management of hazardous substances and reduction in their use.

Environmental policies and external ratings

Environmental policies

In accordance with the Kenedix sustainability policies, we

Management, Inc.(KFM), which manages the assets of

are dedicated to using our business activities to play a role

these REITs, are also part of this commitment. While

in the achievement of environmental sustainability.

conducting the long-term and stable asset management,

The three listed REITs where Kenedix is the main sponsor

all these companies

are

further

increasing their

environmental

programs

based

on

the following

(Kenedix Office Investment Corporation, Kenedix

environmental

policies

in addition

to

the sustainability

Residential Next Investment Corporation, Kenedix Retail

REIT Corporation) and Kenedix Real Estate Fund

policies and have been conducted invest management with consideration for the environment.

1. Compliance with Environmental Laws and Regulations

KFM will promote environment-friendly investment management operations by adhering to environmental laws and regulations.

2. Promotion of Energy Conservation Measures

KFM will systematically advance energy conservation measures at our managed properties, maintaining a strong awareness of the importance of natural and energy resources.

3. Reduction of Environmental Burden

KFM will undertake initiatives to reduce CO2 and waste emissions as well as promote recycling at its managedproperties, understanding its commitment to alleviating its environmental burden. In addition, KFM will take sufficient care when handling harmful substances and environmental pollutants.

4. Disclosure of Environmental Information

KFM will work to disclose necessary information to a variety of concerned parties, including investors, tenants and business partners, in such areas as its environmental policies and measures.

5. Environmental Education

KFM will take steps to improve the environmental consciousness of its officers and employees through internal education.

15

Contribution to a sustainable environment

External ratings

GRESB Real Estate Assessment

GRESB (Global Real Estate Sustainability Benchmark) is a benchmark system for assessing the sustainability performance of the real estate sector, established in 2009 primarily by a group of major European pension funds. Leading institutional investors participate in the GRESB assessment to utilize it in implementing their real estate investment and management processes.

A high degree of attention has been paid to the GRESB survey, as it is used by institutional investors when they select investment targets and on other occasions. The GRESB survey, which is conducted each year, is participated in by many real estate companies, REITs and real estate private funds from around the world.

Numerous programs exist for the certification of environmentally responsible real estate. But the GRESB Real Estate Assessment is the only one that is a benchmark for individual real estate companies and funds. Comparative evaluations of overall scores on a global scale are used to determine GRESB ratings, which go from one to five stars. Ratings for Kenedix Office Investment Corporation, Kenedix Residential Next Investment Corporation and Kenedix Retail REIT Corporation are shown below. All three were awarded a Green Star assessment backed by high marks for implementation and measurement and for management and policy. In addition, Kenedix Retail REIT Corporation achieved the highest GRESB score in "Eastern Asia/ Retail/ Listed" category.

(as of September 10, 2019)

Kenedix Office

Kenedix Residential Next

Kenedix Retail REIT

Investment Corporation

Investment Corporation

Corporation

DBJ Green Building Certification

DBJ Green Building Certification Program was launched by Development Bank of Japan Inc. (DBJ) in April 2011 for the purpose of supporting properties that are environmentally and socially responsible ("Green Buildings"). The program evaluates, certifies and supports properties that fulfill social and economic requirements.

Comprehensive assessments of properties cover factors ranging from environmental performance to the needs of stakeholders, such as disaster prevention and proper care for surrounding communities.

There are five certification ranks: properties with the best

16

Contribution to a sustainable environment

class environmental and social awareness (five stars), properties with exceptionally high environmental and social awareness (four stars), properties with excellent environmental and social awareness (three stars), properties with high environmental and social awareness (two stars), and properties with satisfactory environmental and social awareness (one star). The ranks for Kenedix Office Investment Corporation, Kenedix Residential Next

Investment Corporation and Kenedix Retail REIT Investment Corporation are as follows:

In addition, KDX Harumi Building, KDX Nagoya Sakae Building and KDX Kobayashi-Doshomachi Building, managed by Kenedix Office Investment Corporation, are the first J-REIT properties to receive DBJ Green Building Certification in 2011.

(as of the end of December, 2019)

Kenedix Office

Kenedix Residential Next

Kenedix Retail REIT

Investment Corporation

Investment Corporation

Corporation

Certified:

25 properties

Certified:

7 properties

Certified:

14 properties

five stars:

1 property

four stars:

1 property

four stars:

3 properties

four stars:

3 properties

three stars:

4 properties

three stars:

8 properties

three stars:

6 properties

two stars:

2 properties

two stars:

3 properties

two stars:

12 properties

one star:

3 properties

(Note) The logo of DBJ Green Building Certification indicates the highest evaluation rank among the certified properties.

Certification for CASBEE for Real Estate

CASBEE is an evaluation system for rating the environmental performance of buildings that was developed under the auspices of the Ministry of Land, Infrastructure, Transport and Tourism. The system rates the overall environmental performance of buildings from two perspectives: the environmental quality and performance of a building and the impact of a building on the external environment. Certification for CASBEE for Real Estate is a system in which third-party organizations certify the contents of buildings evaluated by CASBEE for

Real Estate, that has been developed for the purpose of using the results of environmental evaluations of existing buildings when performing real estate assessments.

As of the end of December 2019, 12 properties managed by Kenedix Office Investment Corporation have received valuation, and 8 of them have received S rank of CASBEE for Real Estate, which is the highest rating.

17

Contribution to a sustainable environment

BELS Certification

BELS (Building-HousingEnergy-efficiency Labeling System) is a third-party certification system for rating houses and buildings in accordance with the duty to make efforts to indicate energy saving performance in the Act on the Improvement of Energy Consumption Performance of Buildings. Residential and non-residential buildings are evaluated by using a BEI (Building Energy Index) derived from the primary energy consumption based on the government-designated energy efficiency performance standard for buildings. The number of stars shows an evaluation result ranging 1 to 5.

As of the end of December 2019, KDX Musashi-Kosugi Bldg. and KDX Iidabashi Square, which are managed by Kenedix Office Investment Corporation, and Plasant Grand Ota Tamagawa, which is managed by Kenedix Residential Next Investment Corporation, received 3 stars. In addition, KDX Musashi-

Kosugi Bldg. was the first J-REIT property to receive BELS certification in 2014.

Reduction of energy consumption and CO2 emissions (Climate change initiatives)

Basic views

Global warming, as the main factor for a climate change, has been the primal topic at international meetings so far and in 2015 Paris agreement has adopted a new framework in 18 years since Kyoto protocol. In this agreement, one of the goals is to keep the increase in global average temperature to well below 2 above pre- industrial levels. Considering the increasing number of extreme weather events underscores the need for action, Kenedix recognize climate change is one the most

material issue for its business activities and properties under management.

Reduction of energy consumption and CO2 emissions is one of our material issues. We are making a contribution to environmental sustainability by using our business activities and property management operations for continuously cutting energy consumption and CO2 emissions in order to lower our environmental impact.

Reduction target for energy consumption and CO2 emissions, etc.

Each of the three listed REITs where Kenedix is the main sponsor has set medium-tolong-term reduction targets for energy consumption, etc. and working to reduce

energy consumption, etc. Some REITs also disclose their energy consumption results.

18

Contribution to a sustainable environment

Initiatives for the reduction of energy consumption and CO2 emissions

Kenedix is participating in the fight against climate change by lowering energy consumption and CO2emissions at the buildings it manages. Activities differ depending on how buildings are used, the length of investment funds that

own buildings, the goals of investors and other factors. The three listed REITs, which are all long-term property holders, have a variety of environmental programs.

Initiatives at office buildings managed by Kenedix Office Investment Corporation

Updating of lighting fixture

Activities at Kenedix Office Investment Corporation (KDO) for reducing electricity consumption at all of its properties help protect the environment as well as lower operating expenses. KDO's efforts include converting lighting in common area / tenant area and emergency lights (including emergency guide lights) to LED to actively promote reduction of light bulb replacement costs and electricity expenses.

Updating of heating and cooling systems

KDO is improving energy efficiency along with the comfort of tenants by installing highly efficient heating and cooling systems, replacing centralized systems (using

Installation of motion sensors

a single heating/cooling unit and control room) with separate systems for different floors or zones of a building, and taking other actions.

The use of motion sensors in rest rooms, stairways and other locations means that lights are on only when

needed and provides more convenience for building occupants.

Initiatives at residential properties managed by Kenedix Residential Next Investment Corporation

Installation of LED lights in common areas

Kenedix Residential Next Investment Corporation (KDR)

from the viewpoints of environmental awareness and cost

implements a variety of initiatives to conserve energy

reduction. One example is the use of LED lights in

19

Contribution to a sustainable environment

common areas and other locations for lowering expenses for electricity and the replacement of bulbs.

Remote surveillance of pavement heating

KDR has installed remote surveillance systems for snow melting equipment at some residential properties in

Sapporo. Remote surveillance has significantly reduced the cost of fuel for keeping outdoor areas free of snow.

Outlets for recharging electric cars

Parking areas have outlets so that residents can easily recharge electric cars.

Initiatives at retail facilities managed by Kenedix Retail REIT Investment Corporation

Installation of LED lights

Kenedix Retail REIT Investment Corporation (KRR) uses LED lights to reduce bulb replacement expenses and conserve energy. KRR also reduces its environmental

impact by reducing greenhouse gases.

Major properties with LED lights are as follows:

Passaggio Nishiarai (installed in 2015)

Blumer HAT Kobe (installed in 2016)

Unicus Ina (installed in 2016)

Ashico Town Ashikaga (installed in 2016) Carino Esaka (installed in 2017)

MONA Shin-Urayasu (installed in 2017)

20

Contribution to a sustainable environment

Solar panel installation

By installing solar panels on a part of the rooftop of Unicus Ina, solar power is generated, and it is also effective in reducing the heat load and air conditioning load in the building, contributing to the reduction of CO2 emissions

from properties. In addition, in the event of a power outage, it is possible to use

the generated electricity for BCP plan.

Education to employees on sustainability

We provide sustainability training by external specialist to improve awareness and knowledge on sustainability for

Issuance of green bond

our employees. Also, it encourages our employees to acquire qualifications related to green building.

Kenedix Office Investment Corporation has issued 2 billion yen of corporation bonds as green bonds from the thought that the issuance enables more committed efforts to improve sustainability and further contribution to development of the domestic green bond market by offering opportunities to the universe of investors who take active stance towards ESG investment.

Kenedix Office Investment Corporation Bonds are issued as green bonds according to "Green Bond Framework," which obtained the second-party opinion from Sustainalytics, a third-party evaluator. Also, the

Investment Corporation Bonds obtained "Green 1" from Japan Credit Rating Agency, Ltd. ("JCR"), the highest evaluation in its "JCR Green Bond Evaluation". In addition, with regard to the Investment Corporation Bonds' obtainment of third-party evaluations, Sustainalytics and JCR as issuance supporters have received a notice from Green Finance Organization Japan, General Incorporate Association, regarding that subsidies would be granted to them under the Ministry of the Environment's framework of FY2018 Financial Support Program for Green Bond Issuance.

Switching to renewable energy sources for electricity

Kenedix has established a fund, which it also manages, that invests in solar and other renewable energy projects in Japan that generate electricity. Our asset management services for this fund are backed by our many years of

experience involving private funds, the arrangement of financing and other activities. This fund has the medium to long-term goal of raising AUM to about ¥100 billion.

2016

2017

2018

2019

Number of renewable energy power plants*

9

21

22

23

Output of renewable energy facilities (MW)*

16.5

110.8

153.4

155.7

Note: The number of renewable energy power plants and output of renewable energy facilities at the Kenedix renewable energy fund are as of the end of each year and include locations that are operating or under development by the fund.

21

Contribution to a sustainable environment

Reduction of water consumption and waste materials

Basic views

Although there is no imminent water supply crisis in Japan, climate change and population growth threaten the viability of water supplies worldwide. We recognize that ensuring water sources is critical to our business as well considering the steady increase in global water consumption.

Progress concerning the proper treatment of waste materials and the effective use of natural resources in Japan is continuing as people become increasingly aware of the importance of 3R (reduce, reuse and recycle) activities. Japan is focusing more and more on recycling resources as much as possible rather than mass consumption. Due to growing limitations on natural resources worldwide, there is a need for even more qualitative initiatives to go along with quantitative

measures for lowering the volume of waste materials.

As an organization that provides asset management services for many types of properties which are used as a place to work or live, Kenedix has significant obligations to use a diverse array of activities for using real estate to cut water consumption and the generation of waste materials.

The reduction of water consumption and waste materials is one of our material issues. We are constantly seeking ways to use our business activities and properties to cut water use and the amount of waste materials produced. We are also lowering our environmental impact and contributing to environmental sustainability by properly managing hazardous substances and eliminating their use wherever possible.

Initiatives to reduce water consumption

Updating of water-efficient equipment

When scheduled maintenance and updates are performed at buildings we manage, we often install facilities that lower water consumption. Examples include water-

efficient toilets, motion sensor faucets and water flow reduction plugs. Some of properties have introduced smart irrigation to facilitate watering plant and save water.

Initiatives for reduction of waste materials

Waste material reduction and sorting

By cooperating with property management companies

used for portfolio properties, we contact tenants of office

22

Contribution to a sustainable environment

buildings, retail facilities, residential properties and other

materials and dispose of items properly for each category

properties to urge them to reduce the amount of waste

of waste materials.

Proper measures for hazardous substances, contaminated soil and other materials requiring special handling

Before acquiring a property and in conjunction with other transactions, we thoroughly examine properties by receiving an engineering report that covers the building's structure and facilities, including environmental items. We also receive an earthquake probable maximum loss assessment, a soil contamination survey and other information. These activities ensure that the building complies with laws and regulations.

The engineering report includes a confirmation that a

building is free of asbestos, PCBs and fluorocarbons. If any hazardous substances are discovered, appropriate actions are taken, such as by establishing counter-measures, managing or disposing of these substances, in accordance with laws and regulations.

If a property we plan to acquire has soil contamination, we make the investment only after the completion of remediation and other measures.

Collaboration with tenants for environmental initiatives

Basic views

Kenedix has many initiatives for the purpose of contributing to environmental sustainability by improving the environmental performance of managed properties and in other ways. Receiving the understanding and cooperation of the tenants of the properties we manage is also important. We have environmental education activities for tenants and a Green Lease program that allows both tenants and the building owner to benefit

from the installation of energy-saving facilities. Activities like these make it possible to work with tenants to create a sustainable environment.

Collaboration with environmental initiatives is one of our material issues. We will continue to use joint activities with tenants, who are a key stakeholder category, for more contributions concerning environmental sustainability.

23

Contribution to a sustainable environment

Initiatives for collaboration with tenant

Environmental education programs for tenants

Tenants of Kenedix Office Investment Corporation's properties receive requests to conserve electricity and a manual that we have prepared that explains ways to use less electricity. We also place posters in the hallways of every floor to remind people to use electricity wisely.

Green Lease agreements

Kenedix Office Investment Corporation (KDO) and

used a Green Lease to install LED lights at their own

Kenedix Residential Next Investment Corporation (KDR)

expense. KDO and KDR then receives from the tenant a

use Green Lease agreements for joint energy-

Green Lease fee that is a certain percentage of the

conservation and environmentally friendly measures by

resulting cost saving due to the significant reduction in

building owners and tenants. At KDX Akihabara Building

the tenant's electricity use and the maintenance cost of

managed by KDO and Ten (fee-based homes for the

replacing fluorescent lamps.

elderly with nursing care) managed by KDR, KDO and KDR

*What is a Green Lease?

A Green Lease includes a provision for joint activities by the building owner and tenant to reduce the environmental impact. For example, the savings from the installation of energy-efficient equipment can be shared. This sharing lowers the building owner's expenses for installing this equipment, which makes renovations for better environmental performance easier to do. A Green Lease may also include an agreement concerning measures for conserving energy and water and making the building's interior more comfortable.

Introducing green lease with clause for environmental cooperation

Kenedix Office Corporation has promoted including clause to cooperate to improve environmental performance of the property, comfort and productivity of tenant into its based contract. Kenedix Office Investment Corporation has put the clause for environmental cooperation in 94.2% of its agreement signed from May

2018 as of April 30, 2019.

Also, some lease agreements between Kenedx Retail REIT Corporation and its tenants have a provision for joint activities to lower the environmental impact.

24

Contribution to a sustainable environment

Cooperation with property management companies

Kenedix Office Investment Corporation is engaging with

new tenant, property management companies explain

property management companies to share their vision,

these ideas to tenants to achieve their cooperation.

policies of sustainability and when making contract with a

25

Contribution to a sustainable environment

Biodiversity

Basic views

Protecting biodiversity and using real estate projects to create urban areas are normally conflicting activities that involve trade-offs. Kenedix has a commitment to managing real estate while giving substantial considerations for protecting biodiversity, which is critical

to combating climate change. Biodiversity also plays a key role in the creation of pleasant environments for the tenants and residents of our buildings as well as everyone living in the surrounding areas.

Effective use of vegetation

We plant bushes, flowering plants and other vegetation at building entrances, open areas of building sites, rooftops and other locations. Rooftop vegetation at retail facilities creates a relaxing space for people and has the added benefit of preventing the reflection of sunshine, which helps hold down summer heat in large cities.

KDX Residence Togoshi

(greenery adds value to the entrance)

Blumer Maitamon (Entrance)MONA Shin-Urayasu (Rooftop) Blumer HAT Kobe (Rooftop)

Saitama Prefecture Greenery Plan Award

Unicus Ina, a shopping center owned and operated by

Kenedix Retail REIT Corporation, was selected for the 10th

Saitama Prefecture Greenery Plan Award in 2018 as an

outstanding example of a plan for the use of vegetation.

Winners are selected from greenery plans submitted in

accordance with the prefecture's Ordinance for Protecting

Award ceremony

Wall greening

and Increasing Greenery in Saitama Communities.

26

Contribution to a sustainable environment

ABINC certification

Hibiya Parkfront, which is where our head office is located, has received ABINC certification (urban/SC version) from the Association for Business Innovation in Harmony with Nature and Community (ABINC). This building, which we developed as a joint venture, was received this recognition due to its measures to protect biodiversity.

Installation of SATOYAMA units

A "SATOYAMA unit" is a group planting unit of conventional seeds and plants remaining dormant in deserted village forests ("SATOYAMA"). We have installed the units at the entrance of KDX Residence Okachimachi. Through the installation of the "SATOYAMA units," we contribute to activities for restoring SATOYAMA, as well as provide a comfortable living environment and help prevent bicycles from being left in no-parking areas.

SATOYAMA

SATOYAMA Units at

unit

KDX Residence Okachimachi

27

Our commitment to a diverse society

Our commitment to a diverse society

28

Our commitment to a diverse society

Sustainability policies

- Our commitment to a diverse society -

We contribute to the diversity of society while taking into account the social impact of our properties. We are committed to maintaining safety, confidence, good health, comfort and diversity regarding our tenants and the communities where we operate.

Providing properties with environmental and social considerations

Basic views

Providing properties with environmental and social considerations is one of our material issues. Through our investments in many types of properties, we are making a

contribution to lowering the overall environmental impact of society, providing greater convenience and achieving other forms of progress.

Investments in various types of properties through REITs

The three listed REITs where Kenedix is the main sponsor and a private REIT specialize in specific categories of real estate. The operations of each one reflects the characteristics of its respective market sector, resulting in highly transparent asset management. REITs are based on the premise that real estate will be owned and operated

for a long-term. Therefore, investment and property management activities take into account environmental and social issues. Adopting this stance enables these REITs to help invigorate communities, provide greater convenience, supply pleasant and productive workplaces, and create safe and secure places to live.

REIT

Investment targets

Kenedix Office Investment Corporation

Mid-sized office buildings in the Tokyo metropolitan area

where economic activities are densely integrated with

abundant tenant demand and rich stocks of properties

Kenedix Residential Next Investment Corporation

Residential facilities, healthcare facilities and accommodation

where people live and stay

Kenedix Retail REIT Corporation

Neighborhood, community and other shopping centers for

daily needs located within residential districts or adjacent to

major roads or streets and distribution centers that deliver

merchandise directly to consumers

Kenedix Private Investment Corporation

Large-sized office buildings, and hotels and commercial

facilities with long-term leases that are asset types suitable for

long-term stable management

29

Our commitment to a diverse society

Investments in flexible / mixed use properties

Kenedix uses funds and other schemes for investments in large, multi-purpose properties. By utilizing areas of our building sites set aside for public use and providing properties for a broad range of applications, we contribute to tenants and residents of our buildings as well as everyone living in the surrounding area.

All of our REITs as well are making investments in multi- purpose properties that cover a diverse array of activities. One example is office buildings, residential properties and hotels designed to meet the needs of retail tenants on

lower floors. Another is properties with multi-uses, such as stores, medical clinics and private nursing homes, that are directly linked to a railway station.

In addition, concerning Chofu Center Building, Kenedix Office Investment Corporation has acquired office wing of the building and Kenedix Retail REIT Corporation has acquired retail wing of the building, respectively. This is the first joint acquisition of a mixed use property by group REITs.

Affordable real estate leasing

88 buildings, about 91% of Kenedix Office Investment Corporation portfolio is mid-sized offices (approx. 83% by acquisition price) and among them, the tenants who leased less than 200 tsubo (about 660 m2 as 1 tsubo = 3.3 m2 ) that Kenedix Office Investment Corporation has been recognizing them as micro, small and medium-sized enterprises, account for 86.9%. Kenedix Office Investment

Breakdown of the number

of tenants by leased floor area (Note)

Corporation and the asset management company are aiming to contribute to development in Japanese economy as well through providing better working environment for those mid-small sized companies that are the base of Japanese economy. (ratios are as of October 31, 2019)

Business office by the number of employees (Tokyo) (Source)

(Note)

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

(Source)

Complied by Kenedix Real Estate Fund Management, Inc. based on "2014 Economic Census for Business Frame Tokyo (revised

results) (as of March 27, 2017)"

30

Our commitment to a diverse society

Renovations of existing buildings

Expertise acquired since the start of real estate securitization in Japan enables us to recognize the potential value of existing buildings we purchased in the

real estate market and produce the greatest possible value by performing renovations.

TopicsBUNKA HOSTEL TOKYO

This project by Space Design, Inc., a member of the Kenedix Group, resulted in the effective utilization of a 34-year-old commercial building on an Asakusa street with little foot traffic. Transforming the building into a hostel has made this area more lively and attracted foreign tourists. In recognition of the significance of this initiative, the project received a Good Design Award 2016 in the regional/community development and social contribution activities category. In 2019, the project also received the 3rd Taito City Landscape Town Development Award (Renovation category.)

TopicsKDX Iidabashi Square

KDX Iidabashi Square, which is owned by Kenedix Office Investment Corporation, was completely renovated after the departure of a tenant that had leased the entire building. Floor layouts were altered to accommodate many tenants, an efficient HVAC system and LED lights were installed to reduce electricity use, and other improvements were made. The building has DBJ Green Building certification and received BELS (Building-HousingEnergy-efficiency Labeling System) recognition. The building was fully occupied only about six months after the renovation was finished.

31

Our commitment to a diverse society

TopicsKDX Residence Tsurumi

KDX Residence Tsurumi, which is owned by Kenedix Residential Next Investment Corporation, was constructed as a residence for families more than 25 years ago. We remodeled apartments as needed when they became vacant. The value is high due to the small number of apartment buildings designed for families. Updates for apartment configurations, kitchens and bathrooms quickly attracted new tenants and made it possible to increase the rent.

Urban redevelopment projects

Kenedix Inc. takes part in urban redevelopment projects through its real estate development funds and other schemes.

Cooperation with Re-Seed

We are participating in a hotel redevelopment project in the Roppongi district of Tokyo and will operate the property after its completion. This is a joint project with Real Estate Sustainability & Energy Efficiency Diffusion Organization (Re-Seed), which promotes the construction of high-quality buildings that can withstand earthquakes and are environmentally responsible. The previous building will be replaced by a quality structure with outstanding environmental and other characteristics. This project uses a sophisticated business structure. We received certification under the Real Estate Specified Joint Enterprise Act and are using a special business scheme designated by this act.

Reuse of underground piles

At Kenedix redevelopment projects in central Tokyo, the foundation piles of previous buildings are being reused in order to eliminate the cost of removal and replacement as well as the need to dispose of these piles. After a confirmation of their safety and structural integrity, existing piles will be used for the redevelopment of the Shinsei Bank head office site in Hibiya, hotel redevelopment projects in Roppongi and Ginza, and other projects.

32

Our commitment to a diverse society

Issuance of social bonds

Kenedix Residential Next Investment Corporation has issued the social bonds with an aim to contribute to the expansion of a new investor base and the development of the domestic social bond market by further enhancing initiatives for sustainability through the efforts made this time and providing investment opportunities to investors who are proactively conducting ESG investment.

Kenedix Residential Next Investment Corporation received "Social 1(F)," the highest rating in "JCR Social Finance Framework Assessment," from Japan Credit Rating Agency, Ltd. (JCR) with regard to the eligibility of social finance framework. The Investment Corporation bonds have been issued as social bonds in accordance with the Framework.

Providing investment opportunities through real estate crowdfunding

We are developing the real estate crowdfunding business "bitREALTY" to provide more people with opportunity to invest in unlisted real estate investment funds, which were previously limited to some institutional investors. Starting full-scale operations in January 2019, we have provided a new era service that allows to invest in various real estate

investment funds via the internet. We have organized seven funds for hotel, rental housing and childcare facilities, and have completed a total of 1.5 billion yen in offerings so far.

33

Our commitment to a diverse society

Improving resilience/climate adaptation

Basic views

Becoming more resilient to natural disasters, including the effects of climate change, is one of our material issues. We use many activities at our properties to ensure the safety

and security of tenants, residents, and everyone who uses these properties or lives nearby.

Preparedness for natural disasters and other emergencies

Emergency supplies

Emergency supplies are installed in some properties.

In some buildings owned by Kenedix Office Investment Corporation, elevators have emergency preparedness items for use in the event an elevator stops due to an emergency, power outage, malfunction or other reason.

At properties owned by Kenedix Residential Next Investment Corporation, disaster readiness supplies such as food and drinking water are stored in the building manager's office or other locations that are easily accessible for residents.

Free Wi-Fi

To provide tenants with a more disaster-resistant internet environment, Kenedix Office Investment Corporation uses Hikari Station Wi-Fi routers at some of its properties.

Free access to the internet via a wireless network is provided to tenants during an emergency for business continuity. At other times, tenants and visitors can use Wi-Fi for a certain time for free.

34

Our commitment to a diverse society

Disaster response vending machine

Some properties owned by Kenedix Residential Next Investment Corporation have vending machines with beverages that can be removed at no charge in the event of a natural disaster or other emergency even if there is no electricity.

Distribution of emergency action manual handbook

Kenedix Office Investment Corporation published a pocket-sized, portable emergency action manual handbook and distributed to tenants for emergencies including major earthquakes.

The handbook contains various helpful information in an emergency such as response to major earthquakes, emergency relief activities and how to use AED, etc.

Sustainable Guide

For the purpose of enabling the comfortable, safe and secure living of tenants, distribution of guides on sustainability containing information on initiatives on energy consumption, sorting of waste, and disaster preparedness.

Provision of evacuation sites

Kenedix Retail REIT Corporation has agreements with Yoshikawa City and Ina Town that allow part of Unicus Yoshikawa and Unicus Ina, respectively, to be used as a temporary shelter during an emergency.

35

Our commitment to a diverse society

Installation of AEDs

AEDs (Automatic External Defibrillator) are installed at some properties.

AEDs in office buildings owned by Kenedix Office Investment Corporation are available not only for the tenants but for visitors and local communities as well, which is displayed on the AED stickers and registered in the administrative map.

In retail facilities owned by Kenedix Retail REIT Corporation, AEDs for public use are installed near information centers and other convenient locations.

Verification of earthquake resistance

Before acquiring a property and in conjunction with other transactions, Kenedix receives an engineering report that covers the building, various equipment, environmental properties and other items. We use this report to confirm the building's resistance to earthquakes. If a building does

not meet the standards, we complete the purchase only after the completion of seismic reinforcement work.

We also receive a probable maximum loss report prior to acquiring a building. This allows us to determine the maximum risk exposure associated with an earthquake.

TopicsDebt financing based on the DBJ disaster preparedness rating

The DBJ disaster preparedness rating (current DBJ BCM rating) is a financing scheme in which companies undergo evaluations regarding disaster preparedness and business continuity initiatives based on the proprietary assessment system developed by the Development Bank of Japan (DBJ). Terms for loans are then determined in accordance with the assessment.

Kenedix Office Investment Corporation is the first J-REIT that has received a loan from the DBJ in 2011 based on the DBJ disaster preparedness rating.

36

Our commitment to a diverse society

Initiatives for an aging society with fewer children

Basic views

Japan's population has been declining since 2008 as the country's population becomes older and the number of children falls. As the already large number of older people continues to climb, the shortage of healthcare facilities will become an even more serious problem. On the other hand, we also recognize that the wait-listed children for childcare facilities in urban areas due to women's

advancement in society and lack of nursery teachers is also a social issue.

Initiatives for an aging society with fewer children are one of our material issues. We are making investments in healthcare facilities and childcare facilities and using other activities to meet the needs of Japan's aging population.

Management of healthcare facilities

Kenedix Residential Next Corporation has made investments in healthcare facilities and plans to continue these investments in order to help meet the growing demand for health care by purchasing and operating these facilities.

Healthcare investments cover a variety of business sectors. Acquisitions include fee-based homes for the elderly and serviced housing for the elderly as well as investments in senior living intermediate nursing home, which is a first for a J-REIT.

Kenedix Residential Next Corporation (KDR) is dedicated

to growing along with the operators of properties it owns by providing the best solutions for their business and facility management issues and other needs. KDR fully understands the philosophy, business operations and other characteristics of these partners. Operators of properties fully understand KDR's investment philosophy, management policies and other guidelines. This mutual understanding results in business partner relationships that go well beyond the

conventional boundaries of ties between a building owner and a tenant.

Management of healthcare facilities

We have invested in childcare facilities in Tokyo through private real estate fund. Through this initiative, we work with operators to help solve the problem of wait-listed children for childcare facilities in urban areas and provide investors with opportunities to invest in socially significant assets.

In addition, Kenedix Residential Next Investment

Corporation changed its asset management guidelines in September 2019 and has newly added childcare facilities as investment targets. We believe that investing in childcare facilities by a listed REIT that manages assets for a long period can lead to the promotion of the future supply of childcare facilities and has great social significance.

37

Our commitment to a diverse society

Commitment to barrier-free access

Office buildings, shopping centers and other real estate at

everyone regardless of physical limitations.

the Kenedix Group have facilities for easy accessibility for

38

Stakeholder engagement

Stakeholder engagement

39

Stakeholder engagement

Sustainability policies

- Stakeholder engagement -

We manage our properties as a responsible real estate asset management company by stressing the importance of engagement with our stakeholders such as investors, tenants, business partners, communities and property management companies.

Stakeholder engagement

Basic views

The stakeholders of Kenedix are the customers of properties we manage, the client investors of funds we manage, business partners, communities, employees, and shareholders and other investors. Constant interaction with stakeholders is essential for establishing sound

relationships. We are dedicated to using these relationships for even better asset management activities that can in turn help make society better.

>Stakeholder engagement (p.12)

Continuous improvement of customer satisfaction

Basic views

The continuous improvement of customer satisfaction is one of our material issues. One key customer category is the tenants and residents of the properties we manage. We are also dedicated to increasing the satisfaction of Kenedix private fund, private REIT and listed REIT investors.

Most important to achieving customer satisfaction are the quality of the properties we acquire and the performance of our funds. We work closely with property management companies and other business partners in order to improve property quality and fund returns.

Portfolio property customer satisfaction

Initiatives at office buildings managed by Kenedix Office Investment Corporation

Customer satisfaction survey

Kenedix Office Investment Corporation conducts

person in charge of general affairs and employees, about

satisfaction survey for tenants in office building, i.e. the

building facilities and operational services, which is

40

Stakeholder engagement

undertaken by a third party is conducted in every two years. Consecutive survey enables us to capture the tenant needs and quickly respond by renewal of facilities or implement refurbishment and receive strong intention to stay in the same building from tenants.

Renovations for greater convenience and value

Replacing equipment and renovating buildings in other ways in response to information received from the customer satisfaction surveys are critical to maintaining a high level of tenant satisfaction.

Some projects are complete renovations and others involve upgrades of entrances, rest rooms and other locations. Performing renovations as needed at every property keeps every building looking its best and ensures

the greatest possible convenience for tenants.

Initiatives at residential properties managed by Kenedix Residential Next Investment Corporation

Secure parcel delivery lockers

For the convenience of residents, Kenedix Residential Next Investment Corporation (KDR) places secure lockers for parcel deliveries in the buildings it owns. In addition, secure lockers eliminate the need for delivery companies to return to a property when a resident is not home the first time. This reduces transportation CO2 emissions and

wasted working time for drivers.

Electric car recharging outlets and car sharing

Parking areas have outlets so that residents can easily recharge electric cars. In addition, KDR improves the convenience of residents by using vacant parking spaces for car sharing.

41

Stakeholder engagement

Tenant satisfaction survey

KDR conducts questionnaire surveys for residents in some

and operation.

properties on their level of satisfaction with management

Neighborhood maps for KDR properties as a tool for introducing properties

KDR produces maps for its properties that give directions to the property and include information about nearby points of interest. These maps are useful for residents as well as for real estate agents and people thinking about living in a KDR owned property.

Initiatives at retail facilities managed by Kenedix Retail REIT Corporation

Renovations for greater convenience and value

To keep facilities looking their best and offering the greatest possible convenience for customers, Kenedix Retail REIT Corporation (KRR) conducts renovations that reflect the requirements of each location. Projects range from complete renovations to smaller expenditures for rest rooms or other facilities.

Parcel delivery boxes (PUDO stations)

A PUDO (Pick Up & Drop Off) station is a parcel delivery box available to anyone and any delivery company. People can conveniently pick up parcels at retail facilities where they often use. PUDO station improves the convenience of customers as they can do shopping at the same time. KRR plans to install PUDO stations at more shopping centers, mainly multi-tenant locations, after completing compliance reviews and other required procedures.

Tenant satisfaction surveys

KRR is performing tenant satisfaction survey in some of the properties.

42

Stakeholder engagement

Fund customer satisfaction

We hold regular meetings with the broad range of institutional investors all over Japan and overseas that have funds managed by Kenedix. Direct dialogues with these investors give them a better understanding of our funds and allow us to hear suggestions, requests and other thoughts of these investors.

Engagement with business partners

The listed REITs sponsored by Kenedix hold earnings announcement information meetings for securities analysts in each fiscal period. These REITs also participate in information meetings for individual investors as needed in order to maintain direct lines of communication with these investors.

To properly share information such as the status of properties and improvements, we meet on a regular basis with the property and building management companies that oversee our real estate holdings. When there is a natural disaster or other emergency, we use our close ties with these companies for quickly determining building damage and performing on-site management.

The listed REITs periodically evaluate the performance of

the property management companies they use and hold discussions about their performance. This creates an appropriate level of pressure on both parties to do their best at all times. As an independent real estate asset management company with no obligations or restrictions involving affiliations with other companies or groups, Kenedix has the flexibility to make investments and manage every property in the best possible way.

Topics: Unified Asset and Property Management by the Kenedix Group

Kenedix Real Estate Fund Management, Inc. and Kenedix Property Management, Inc. provide unified asset management and property management services to Kenedix Office Investment Corporation. Using this coordinated framework creates a sound base for providing high-quality office services that precisely match the needs of tenants while taking actions aimed at improving the profitability and value of portfolio properties.

Kenedix Property Management, Inc. established Kenedix Engineering, Inc. for the purpose of providing high-quality total management services by handling renovation and construction projects at managed properties. Adding this company gives Kenedix Property Management the ability to cover a broad range of property management activities extending from know-how to building facilities.

43

Stakeholder engagement

Contact for formal grievance complaint

Kenedix provides convenient channels for customers to

earns the understanding of customers.

submit complaints and consultations and is committed to

Complaint window

resolving every issue in a speedy and suitable manner that

Community engagement

Basic views

We have identified "Community engagement" as material topic and taking various unique initiatives to make

positive contribution to the local communities.

Community engagement through managed properties

Local events at retail facilities

Kenedix Retail REIT Corporation mainly invests in neighborhood, community and other shopping centers

for daily needs and helps invigorate communities by using these shopping centers to host a variety of events.

Roseo Festival

Summer Festival

Kamisato Farmers Market

Roseo Mito

Unicus Ina

Unicus Kamisato

Cooperating with communities for bicycle sharing

Kenedix Office Investment Corporation has agreements with municipalities and the vendors to allow the use of part of an office building's open area as a port for bicycle sharing.

Supporting bicycle sharing makes a community more appealing due to easier mobility and can contribute to vitalize communities and boost tourism. Other benefits are a reduction in discarded bicycles, lower CO2 emissions due to a shift from automobile to bicycle, greater public awareness about protecting

44

Stakeholder engagement

the environment, and more opportunities for people to stay healthy by exercising. Kenedix Office Investment Corporation continuously monitors monthly operation status and bicycle utilization by receiving reports and other information.

Supporting Japan for UNHCR

Kenedix Office Investment Corporation and Kenedix Retail REIT Corporation support the activities of Japan for UNHCR (United Nations High Commissioner for Refugees), which is the official contact for UNHCR, by providing free space such as common areas of their properties for UNHCR's campaign to support refugee. In addition, Kenedix Office Investment Corporation also provides refugee support videos on "Digital signage" installed in its properties for free. As a result of these support activities, letters of appreciation were given by Japan for UNHCR..

Japan for UNHCR

Kenedix community engagement activities

Community participation activities

Calendar recycling campaign

The Kenedix calendar recycling campaign collects unneeded calendars for distribution by social welfare

Collaboration with local communities

service organizations to senior care and other welfare facilities where the calendars will be used.

Kenedix Retail REIT Corporation entered into agreements with Yoshikawa City and Ina Town under which a part of Unicus Yoshikawa and Unicus Ina, respectively, can be used as a temporary shelter at times of emergency.

45

Stakeholder engagement

Education and academic support activities

High school student work experience

We provided work experience opportunities for high school students. In addition to the tour of our office, they learned about the structure of real estate, real estate funds, and the current status of women's empowerment.

Donation to orphanage

As a part of our social contribution activities, we donate to children's homes.

Lecture at SC academy

At the SC (Shopping Center) academy sponsored by the Japan shopping center association, we offer a course on SC management and SC development from a REIT

perspective. Students involved in the SC industry have learned about SC management from perspective of REIT funds.

Culture, art and sports support activities

Sponsorship of Hibiya Music Festival

The Hibiya Music Festival is a "borderless music festival that anyone can join for free," held at Hibiya Park where is a central park in Tokyo. We co-sponsor the Hibiya Music

Festival, which is held in the Hibiya Park next to our office.

Donations and support for sports

Activities for the support of sports include donations to the Japan Rowing Association and, through the Used Book

Power Project, the Japan Blind Football Association, and support for the Century 21 Ladies Golf Tournament.

46

Stakeholder engagement

International exchange activities

Support for the Mindanao Children's Library

The Kenedix Group donates supplies to the Mindanao Children's Library in the Philippines on a regular basis. Employees of group companies donate shoes, apparel, stationery supplies and other items that they no longer need. Children who receive these recycled items send a message of thanks to Kenedix every year.

Information and exchange promotion for foreign tourists and long-term residents

Space Design Inc., which is our group company and operates service offices and serviced apartments, publishes monthly What's on in Tokyo that summarizes event information near Tokyo for foreign tourists and long-term residents.

Support for overseas student internships

Also, networking parties are held at the operating facilities to exchange foreign residents and tenants and deepen their understanding of Japan. In addition, there are some cases that they support exchange parties in cooperation with foreign embassies and their tenant restaurants.

Space Design Inc. provides a place for international students to stay during their internship in Japan through their serviced apartments. In addition, in foreign student exchange programs conducted by universities, etc., there

are cases that they provide a place to stay for overseas students, professors, lead staff etc., and a shared lounge is provided as a place for presentations and meetings.

Reconstruction support activities

Matching donations

In the event of a disaster such as earthquake, heavy rain or typhoon, etc., Kenedix conducts a matching donation program to support reconstrucution activities. With this program, Kenedix adds a certain amount to every donation that employees made to an eligible disaster relief charity.

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Stakeholder engagement

Managing conflicts of interests

Basic views

The real estate operations of Kenedix encompass a broad spectrum of stakeholders as well as a large number and variety of properties owned by various investment funds. The immense scale of these activities creates the risk of conflicts of interest. Preventing this problem requires managing assets while exercising care to prevent conflicts involving transactions between Kenedix funds and other activities.

Managing conflicts of interests is one of our material issues. The Kenedix Compliance Manual has policies for specific measures aimed at preventing these conflicts and protecting the assets of the Kenedix Group. We have compliance and other training programs for reinforcing the commitment of employees to prevent conflicts of interests.

>Compliance (p.68)

Initiatives for our shareholders and investors

Basic views

To establish sound relationships with shareholders and other investors, Kenedix discloses information in a fair and timely manner. Disclosure includes the mission statement, corporate mission, long-term vision, management plans, and other financial and non-financial information.

Disclosure policy

Thorough information is provided in a format that is easy to understand. In addition, there are earnings announcement information meetings and frequent meetings for a continuous dialogue with shareholders and other investors.

We have a disclosure policy and disseminate information with substantial added value in a fair and timely manner. We are dedicated to conducting constructive dialogues with shareholders and other investors while giving

consideration to "dialogues and feedback," "handling of information to be disclosed" and "silent period."

Disclosure policy

Disclosure on the website

Kenedix distributes business reports twice every year and

posts a large volume of information for investors on its

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Stakeholder engagement

website. Investors have access to quarterly earnings

goals and other subjects.

announcements and other information disclosed in a

IR information

timely manner concerning results of operations, strategies,

Dialogue with shareholders and investors

Kenedix holds earnings announcements information meetings twice every year and meets with shareholders and other investors in Japan and overseas frequently at other times. All suggestions, opinions and other information received at these dialogues are seriously considered and reflected as needed in the management of business operations.

For a dialogue with shareholders, we use shareholders meetings to receive shareholder feedback and hold a strategy explanation meeting afterward on the same day to provide results and progress of our business plans and the current policies and goals.

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Attractive working environment

Attractive working environment

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Attractive working environment

Sustainability policies

- Attractive working environment -

We aim to maintain an attractive working environment by implementing measures for employees' health and wellbeing and for diversity and equal opportunities. To enable employees to realize their full potential, we will provide a variety of training programs and other educational opportunities.

Recruiting, employee retention and career advancement

Basic views

Recruiting, employee retention and career advancement is one of our material issues. We have many programs to develop the skills of our people and are always seeking

ways to upgrade training and other educational activities so that all our employees can realize their full potential.

Workforce diversity and stability

As a relatively new business sector, the real estate asset management industry started by using people with experience in many areas of the real estate and finance sectors. Kenedix is still recruiting experienced professionals in a broad range of business fields. In addition, we have been recruiting new university graduates continuously since 2005. Maintaining a diverse workforce is an important element of our sustainability as

a real estate asset management company.

Since our establishment in 1995, we have never conducted lay-offs for the purpose of downsizing our workforce. We retained all of our people even during the global financial crisis as many real estate developers and asset management companies struggled to avoid bankruptcy.

Human resource development system

To continuously improve the operational skills of employees, Kenedix provides external seminars that are structured for specific job categories, such as managers, mid-level employees and new employees.

New university graduates first complete one-month entry training and then rotate through three jobs over five years. On-the-job training in different departments gives them opportunities to obtain a variety of experience and a broad range of viewpoints.

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Attractive working environment

Training programs

English language training

Kenedix provides English language training by teachers from educational institutions to employees who apply for these classes. Students participate in discussions every

week. An online-speaking program is also available so employees can utilize this opportunity with more flexibility.

Job-specific skill development training

Kenedix provides seminars arranged by a third party for specific job categories, such as managers, mid-level

Self-development program

Kenedix reimburses employees for the cost of external seminars, classes and other educational activities for

employees and new employees to give them opportunities to acquire the skills required at each level.

acquiring the knowledge and skills required for their jobs.

Oversea training program

Kenedix employees, mainly young people, can apply for temporary training positions at a real estate asset management company in California. Working at this

company gives people knowledge involving acquisitions, property management and other operations as well as an opportunity to improve their English language skills.

Study abroad program

Kenedix provides opportunities to obtain a broad range of knowledge, personal connections and international viewpoints by sending employees to study in oversea

graduate schools where they acquire skills to become the next generation of management.

Encouraging people to obtain professional certifications

Since the beginning of the real estate fund business in Japan, Kenedix has used a team of professionals with real estate and financial expertise to provide real estate asset management services.

With real estate asset management now a well- established business sector in Japan, we have numerous activities to maintain a team of skilled professionals who can provide clients with high-quality services. To promote

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Attractive working environment

employees' skill and career development and further

activities, Kenedix has a subsidy program for the

increase corporate vitality, we encourage employees to

associated expenses.

acquire a variety of certifications. To support these

Qualified individuals (as of December 31, 2019)

159

Real estate notaries

Tax accountants

ARES (real estate securitization) certified

74

Chartered members of the Securities Analysts

masters

Association of Japan

Certified real estate consulting masters

24

Administrative scriveners

29

Certified building administrators

Judicial scriveners

13

Licensed senior architects

Administrative managers

7

Real estate appraisers

Condominium property managers

6

Certified public accountants (Japan)

Loan operations managers

3

Certified public accountants (United States)

Attorneys

5

13

2

1

11

8

14

2

Note: These figures are based on individuals who are working at Kenedix group companies and employed directly by Kenedix.

Internal job application program

Kenedix employees can apply for job openings within the company to gain more experience and achieve their career goals. Offering this opportunity allows people to

develop and utilize their skills and allows us to benefit fully from the capabilities of our human resources.

Evaluation system to support employees' career development

Employees receive evaluations in the middle of the year and at the fiscal year end. Managers interview individuals to discuss their performance and career opportunities.

At the fiscal year end, all employees undergo a

competency evaluation so both Kenedix and employees understand what is expected and the current status. This objective and transparent process makes it possible for employees and managers to set the next goals.

Japanese employee stock ownership plan

In June 24, 2015, the Kenedix Board of Directors approved and implemented the establishment of an employee stock ownership plan for eligible employees. This incentive plan increases awareness of participating in management and

benefits shareholder value by motivating people to increase corporate value. As a form of medium to long- term remuneration, this plan also helps retain talented people.

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Attractive working environment

Health and wellbeing of employees

Basic views

The health and wellbeing of employees is one of our material issues. To enable employees to maintain the proper balance between work and their private lives, we have activities involving workplace facilities, working

styles and other measures that create a pleasant and productive environment. There are also various programs that reflect a variety of personal needs.

Work style reform

We have been improving how people do their jobs by encouraging employees to take paid time off, reducing

overtime and introducing various systems to allow flexible working formats.

Promoting the use of paid vacation days

On top of annual paid leave, we have a program that allows employees to take consecutive days off in July, August and September. Department managers encourage

the people they supervise to go on an extended vacation and to use all of their annual leave.

Initiatives to reduce overtime

Department managers supervise working hours and adjust workloads of employees to minimize overtime. If an employee has worked more than a certain number of

hours, a check-up by doctor is arranged upon the employee's request.

Staggered working hours

We have a staggered working hours system that allows

between 8:00 and 10:00.

employees to start work in the morning at any time

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Attractive working environment

Health and wellbeing

We have health management activities to support the

pleasant working environment.

physical and mental health of employees and maintain a

Health committee

Kenedix has a Health Committee that performs surveys and studies concerning the health of employees and prevention of problems. The committee meets monthly to discuss activities and issues involving employees' health.

In addition, the committee performs educational activities by distributing to all employees a monthly message about their health and wellbeing.

Annual physical check-up

All employees receive an annual examination by doctor at the company's expense.

Mental health care

All employees have access to an external counseling service provided by Kenedix. Individuals can discuss any personal or job-related issues with counselors. Every month, all employees receive messages with topics about mental health and other information so that everyone is

aware of these issues and the counseling service.

In addition, Kenedix performs annual stress check-ups for all employees. Individuals receive the results and can arrange a check-up with a doctor if necessary.

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Attractive working environment

Pleasant working environment

Hibiya Parkfront, which we developed as a joint venture, is in a prime location that faces Hibiya Park and has direct access through adjacent buildings to the Kasumigaseki and Uchisaiwaicho subway stations. This building was designed to create the atmosphere of offices within a park. There is a large amount of greenery inside and outside the

In harmony with Hibiya Park's natural environment

building as well as a variety of services and equipment for the support of office workers. The result is a new concept for an ideal office environment where people can feel they are surrounded by nature and are able to do their jobs in comfort.

As plans for the property called for planting vegetation to

harmonize with the adjacent Hibiya Park, more than 100

types of plants are used in the building. Vegetation is not

limited to the area surrounding the building but also

extends to the interior to create a park-life environment.

1F Entrance hall

21F Sky garden

The Hibiya Centrium links the building with the greenery of Hibiya Park

To help preserve biodiversity, Hibiya Centrium has about 100 types of plants that were selected based on a survey of the vegetation in neighboring Hibiya Park. This spacious area full of greenery is one of the building's most popular places among not only tenants but also

neighboring office workers.

Hibiya Centrium

Interaction among employees in a communication room

Located adjacent to working space, the communication room is a place employees can use for a break, a small meeting or any other purpose, being the hub for communication among employees.

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Attractive working environment

Other initiatives

Annual off-site meeting

Every December, all Kenedix Group employees are invited to attend an off-site meeting for a presentation by Kenedix executives and prominent individuals from outside the group. This occasion is also an award

ceremony for outstanding projects of the year. Informal gatherings in conjunction with this event further increase the solidarity of the Kenedix Group.

Support for group activities outside of work

Kenedix subsidizes activities such as futsal or golf that help employees make personal connections outside the workplace.

Topics: Company trip

In addition to the December off-site meeting, there were a trip to Okinawa in 2018 and a trip to Guam in 2019 that were open to the approximately 300 people who work at Kenedix Group companies. These outing gave people at

different group companies who have few opportunities to get to know coworkers outside the workplace a chance to interact while participating in many activities.

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Attractive working environment

Diversity and equal opportunities

Basic views

Kenedix has established diversity and equal opportunities as one of its material issues. We welcome diversity regarding race, religion, gender, age, sexual orientation, disabilities and nationality and respect the rights of

individuals. We are dedicated to operating workplaces where all people at the Kenedix Group can realize their full potential.

Respect for human rights

The Kenedix Compliance Manual clearly states that we will respect human rights and reject all forms of discrimination and harassment. There are compliance and other training

programs to be certain that everyone at the Kenedix Group understands and observes these standards.

Equal opportunities for female employees

We use many measures to provide workplace environments where women can do their jobs with confidence and comfort. This includes support programs

Employment system for seniors

that enable women to remain at Kenedix once they have children. Women are an important part of the diversity and vitality that define our workforce.

As one way to increase diversity, we have a system that allows employees who have reached the official retirement age of 60 to return to work until the age of 65. This program also helps maintain a sufficient number of

people as Japan's working age population declines. With experience dating back to the start of real estate asset management in Japan, these older workers have considerable knowledge they can pass on to others.

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Attractive working environment

Support for childbirth, childcare and senior nursing care

We have prepared various programs to support employees so they can remain at the Kenedix Group while

Childbirth and childcare

We have a number of programs for women during a pregnancy, such as time off for medical check-ups, working hours that avoid times when trains are most crowded, and days off for good health during a pregnancy. At childbirth and afterward, we provide time off for women and their husbands.

Employees can receive time off for the care of a baby or

spending time for personal needs such as childbirth and childcare or caring for an aging parent.

when a preschool age child is sick or requires other care. We also offer flexible working time so employees can care for family members. For example, employees can limit overtime and late-night assignments, reduce working hours, or use staggered hours. There is also a subsidy for expenses for child-related transportation needs before and after work and a discounted babysitter service.

Senior nursing care

Employees taking care of an elderly parent or other relative can use extra days off or extended leave. We also limit overtime and late-night assignments, reduce working hours, or use staggered hours so that an

individual can fulfill family responsibilities. Support for nursing care goes beyond requirements by providing more than the legally mandated time off and special days off to care for an elderly parent or other relative.

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Responsible organization

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Sustainability policies

- Responsible organization -

We ensure compliance and sound risk management in our entire business activities. We are committed to responsible property investment by a responsible organization by aligning with global ESG initiatives and proactively disclosing ESG information.

Corporate governance

Basic views

To ensure its sustainable growth and increased corporate value over the medium to long term by creating value from real estate, Kenedix has configured its corporate governance to strike an appropriate balance between independence and autonomy ("offensive" and "defensive" functions) and a strong sense of ethics. Kenedix accords one of its highest management priorities to employing an

Corporate governance guidelines

appropriate management system and a thorough internal control system, making positive and decisive management decisions based on appropriate processes, and ensuring their accountability.

Corporate Governance Report

Kenedix has established corporate governance guidelines in accordance with Tokyo Stock Exchange's Corporate Governance Code that came into effect in June 2015 as a part of its Securities Listing Regulations. These guidelines are based on the spirit and intent of the Corporate

Governance Code and ensure the company's sustainable growth and increased corporate value over the medium to long term.

Corporate Governance Guidelines

Corporate governance system

Kenedix has adopted the "Company with a Board of Corporate Auditors" as a form of corporation organization based on the Companies Act, in the aim of combining the Board of Directors' decision-making and monitoring functions with respect to operational execution with the audit authority of the Board of Corporate Auditors.

In addition to this organizational form, to augment the Board of Directors monitoring function and ensure governance with a high degree of transparency and fairness, Kenedix establishes nomination and remuneration advisory committees as voluntary committees. The majority of these committees' members

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Responsible organization

and their chairs are independent outside directors.

Through these overlapping organizational forms, Kenedix has created a hybrid type of Board of Directors that balances the decision-making and monitoring functions for operational execution and promotes sound corporate

management that achieves both independence and autonomy.

In a step to increase the diversity of the corporate governance system, a woman became a director of Kenedix for the first time in March 2018.

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Responsible organization

Board of Directors

The Board of Directors, which consists of nine directors including four independent directors, endeavors to fulfill its responsibilities to stakeholders through decision-making on the execution of important operations and the exercise of appropriate monitoring functions with the goals of ensuring Kenedix's sustainable growth and increasing corporate value.

Equity Investment Committee

This committee discusses proposals for direct investments and loans by Kenedix and approves or rejects the proposals. Committee members also monitor existing investments and loans, discuss allocations and risk management, and submit reports.

Corporate Compliance Committee

This committee, which is a permanent corporate governance unit, discusses matters involving compliance and reaches decisions. Committee members determine the compliance framework, authority and other items for the purpose of making compliance activities more effective. This committee does not handle matters involving business operations, such how businesses that contribute to revenue or are expected to contribute to revenue are conducted, and matters involving business transactions with customers.

Board of Corporate Auditors

The Board of Corporate Auditors, which consists of five corporate auditors including three independent outside corporate auditors, ensures corporate soundness and fulfills its responsibilities to stakeholders by conducting independent and highly objective audits of the execution of duties by directors and the status of the internal control systems of Kenedix and its subsidiaries. In addition, the Board supports Kenedix's sustainable growth and an increase in corporate value from the perspective of audits.

Nomination and Remuneration Advisory

Committees

To supplement the Board of Directors monitoring function and ensure highly transparent and fair governance, Kenedix establishes nomination and remuneration advisory committees as optional committees comprised mainly of and chaired by independent outside directors. The nomination and remuneration advisory committees deliberate director and corporate auditor personnel administration, director remuneration policies, systems, categories and amounts, and report the results of their findings to the Board of Directors.

Business Compliance Committee

This committee, which is a permanent corporate governance unit, discusses matters involving compliance involving business operations and reaches decisions. Committee members determine the compliance framework, authority and other items for the purpose of making compliance activities for business operations more effective.

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Responsible organization

Internal audit department, corporate auditors and accounting auditors

Internal audit department

Kenedix has an Internal Audit Department supervised directly by the company president for the purpose of ensuring that the management of the Kenedix Group is rational and appropriate. The department performs internal audits in accordance with rules for studies and assessments concerning assets, internal systems for business operations, compliance, risk management and other items, and how business operations are conducted.

The department also submits advice and instructions for improvements and provides support.

Kenedix has two internal auditors. An internal auditor can designate an individual in another department as an internal auditor in order to conduct an audit. Audits cover all departments of Kenedix as well as all Kenedix subsidiaries and affiliated companies.

Corporate auditors

Audits by corporate auditors are performed by the five corporate auditors, three of whom are outside auditors. The corporate auditors attend meetings of the Kenedix Board of Directors and other meetings that the auditors believe are important for the purpose of objectively overseeing management from a fair standpoint. All auditors receive regular reports from the Internal Audit Department, which is responsible for internal audits, and exchange information with this department. The goal of

Accounting audits

Kenedix has selected an accounting auditor as prescribed in the Companies Act and undergoes an accounting audit. In addition, as needed, Kenedix receives advice from attorneys, tax accountants and other professionals concerning the compliance with laws and regulations of management and business operations as well as their suitability and fairness.

these activities is to conduct efficient and effective audits. The corporate auditors and Internal Audit Department hold regular meetings with the accounting auditors for exchanging information. Proper accounting audits are performed while maintaining close ties with the corporate auditors and the Internal Audit Department. Corporate auditor Shintaro Kanno is a certified public accountant who has considerable expertise in the fields of finance and accounting.

Kenedix has an auditing contract with BDO Toyo & Co. to perform accounting audits in accordance with the Companies Act and the Financial Instruments and Exchange Act. There is no special interest relationship between Kenedix and BDO Toyo or this company's managing partners that conduct the Kenedix audit.

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Responsible organization

Internal control system

Kenedix positions as one of its highest management

Policy for Internal Controls and the following basic policies

priorities the establishment and operation of a framework

for the establishment of internal controls. In addition,

to ensure that all executives and employees perform their

there are constant actions aimed at further strengthening

jobs properly. Kenedix has established a Fundamental

corporate governance.

  1. System for ensuring that the execution of duties by directors and employees complies with laws and regulations and the Articles of Incorporation
  2. Systems for storing and managing information concerning the execution of duties by Directors
  3. Rules and other systems for the management of the risk of losses for Kenedix
  4. System for ensuring that directors perform their duties efficiently
  5. System for ensuring that Kenedix Group business operations are performed properly
  6. System for the assignment of employees to assist corporate auditors when requested, matters concerning independence of these employees from directors, and matters for ensuring the effectiveness of instructions to these employees from corporate auditors
  7. System for reports by directors and employees to corporate auditors, system for reports to the Kenedix corporate auditors by individuals who have received reports from subsidiary executives, employees and others, system to ensure no negative consequences for individuals who have submitted a report to a corporate auditor, and system for ensuring effective audits
  8. Policy concerning prepayment or reimbursement procedure for expenses resulting from execution of duties by the corporate auditors and the treatment of other expenses or debt resulting from execution of duties by the corporate auditors
  9. Fundamental approach to eliminating anti-social forces and status of measures

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Responsible organization

Support system for outside directors and/or corporate auditors

Kenedix considers correcting the gap between the

deliberations, invigorating these deliberations, enhancing

information possessed by its management and that

their effectiveness and contributing to their quality. The

possessed by outside directors and outside corporate

Company implements the following measures for

auditors to be important in appropriately reflecting

correcting the information gaps, and the Board of

experience and knowledge of independent outside

Directors confirms that these measures are being

directors and independent outside corporate auditors

appropriately implemented.

(hereinafter, "outside executives") in Board of Directors

  1. People attending Board of Directors' meetings are provided in advance with materials for deliberation. In addition, opportunities are provided to explain agenda items to outside executives in advance, as necessary.
  2. Meetings are held to provide information to outside executives or to have discussion. In principle, these meetings are set on the same day as regular Board of Directors' meetings. These meetings explain an overview of items that are to be tabled at upcoming Board of Directors' meetings and their state of progress, share management and other information and provide other opportunities for outside executives to enhance their specialized knowledge. In addition, outside executives may request the attendance of the management, Group company executives, legal advisors, the accounting auditor and other members to share valuable information, thereby contributing to Board of Directors effectiveness and invigorating deliberations.
  3. Outside executives may voluntarily participate as observers in other types of internal meetings.
  4. The Board of Directors secretariat exists as a vehicle for providing necessary information to the Board of Directors in a timely manner. For independent outside directors in particular, the secretariat places a person in charge separately as a pipeline to the management and internal departments to provide necessary information in a timely manner.

Kenedix has submitted notices that all outside directors and outside corporate auditors are independent.

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Policy for determining of remuneration amounts for directors and corporate auditors

Kenedix considers ensuring the ongoing presence of

directors, etc. are to 1) reflect their level of contribution to

excellent human resources who can contribute to its

sustainable growth and increases in corporate value, 2)

sustainable growth and increases in corporate value to be

appropriately reflect corporate and individual

an important management priority. From this perspective,

performance and 3) share with shareholders any share

Kenedix's basic policies regarding the remuneration of

price fluctuation risk.

The frameworks of remuneration for directors and corporate auditors are as follows.

1. Director remuneration

Kenedix positions the remuneration of directors (excluding outside directors) as a sound incentive for achieving its medium- to long-term vision. Accordingly, from the perspectives of fixed and variable compensation, the applicable performance period and cash and shares (common interest with shareholders), there are three types of compensation:

  1. cash remuneration as base remuneration (fixed portion), 2) cash remuneration linked with short-term operating performance (variable portion) and 3) share compensation linked with medium-term operating performance (performance-linked share compensation). Remuneration (variable portion) for outside directors consists only of a fixed amount of cash remuneration as base remuneration, from the perspective of their role and independence.

2. Corporate auditor remuneration

From the perspective of their role and independence, remuneration for corporate auditors consists only of a fixed amount of cash remuneration as base remuneration set within the scope of remuneration resolved at the General Meeting of Shareholders.

Performance-linked remuneration

The Board of Directors of Kenedix approved and

decision to strengthen the link between their

implemented a resolution in February 10, 2015 to

remuneration and results of operations and shareholder

establish a stock remuneration program for directors that

value. The objective is to make directors more committed

is linked to results of operations. This program was

to the steady growth of the company's performance and

subsequently approved by shareholders at the annual

corporate value by exposing directors to both potential

meeting held in March 25, 2015. A reexamination of the

gains and losses resulting from stock price movements,

remuneration of directors and other executives led to the

just as shareholders are.

Introduction of DPU-linked and unit performance-linked management fee structures

The three listed REITs where Kenedix is the main sponsor have adopted DPU-linked as well as investment unit performance-linked asset management fee structures to

provide further common incentives between unitholders and the asset manager, respectively.

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Responsible organization

Compliance

Basic views

Strict compliance with laws, regulations and other

order to achieve qualitative and quantitative

guidelines is positioned as a vital element of the

improvements of the value of our business operations.

management of Kenedix based on the awareness that

By implementing a rigorous compliance program, we are

compliance problems are a significant risk regarding

determined to contribute to economic and social

business operations.

advancement and, as a result, earn the admiration of

We have a responsibility to use business operations to

investors and the trust of the public.

create the types of value that meet social requirements.

Compliance is one of our material issues and the entire

We have extensive and constant compliance programs in

group has a strong commitment to compliance.

Compliance system

A Compliance Officer who reports directly to the president

transactions with customers)) and reaching decisions

of Kenedix is responsible for the establishment and

about specific actions. In addition, there is a Business

operation of a compliance program. There is also a

Compliance Committee for discussions and approvals of

Corporate Compliance Committee for discussing matters

matters involving compliance concerning business

involving compliance at Kenedix (except items involving

operations of Kenedix.

business operations (primarily how businesses that

The Compliance Officer performs the following activities.

contribute to revenue or are expected to contribute to

revenue are conducted and matters involving business

  1. Proposals for rules and other items and their implementation
    Proposals, and subsequent implementation of, for rules and other items associated with compliance activities, including the Compliance Manual, Compliance Program and other guidelines for the proper conduct of executives and employees
  2. Guidance and training
    Periodic compliance guidance and training activities for executives and employees
  3. Confirmation of the status of compliance
    Activities to confirm that compliance programs are functioning properly
  4. Handling of problems
    When there is an incident involving financial instruments or any other problem related to compliance, the Compliance Officer immediately performs an investigation to determine what happened. After using this information to determine the cause, the Compliance Officer implements preventive measures and, as needed, submits a report to regulatory authorities and takes other actions.

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Responsible organization

Compliance manual

The Kenedix Compliance Manual gives executives and employees specific guidelines for what they should do concerning compliance activities. The manual explains corporate compliance programs and laws and regulations that must be understood and observed when conducting business operations. In addition, members of the Compliance Department use this manual to hold seminars in order so that everyone has a sound compliance understanding and commitment.

When a compliance problem occurs, executives and employees have a duty to submit a report containing the basic sequence of events. This includes the discovery of a violation of the Compliance Manual rules and guidelines or behavior that creates a compliance problem as well as the receipt of information from a customer or other source about a compliance problem. If it is not possible to submit this type of report for some reason, the whistleblowing system can be used.

Compliance as a company

  • Respect for human rights, refusal to allow discrimination, harassment, etc.
  • No conflicts of interest and the protection of corporate assets
  • Strict oversight of giving or receiving gifts, including meals and entertainment, involving customers
  • Proper management of confidential information (personal information)
  • Proper and timely disclosure of corporate information
  • No insider trading
  • Rejection of anti-social forces
  • Resolution of complaints
  • Proper handling of clerical errors, etc.

Compliance program

Kenedix has a compliance program for the purpose of providing a specific action plan for compliance. As a rule, Kenedix establishes a compliance program every six

months and uses the program to provide compliance guidance and training activities for employees.

Corporate ethics policy

Kenedix has the following Corporate ethics policy.

  • We will contribute to the advancement of society as a responsible corporate citizen.
  • We will maintain sincere relationships with all customers and business partners in the spirit of fair play.
  • We will adhere to the high standards of conduct expected of a corporate group with public ownership, contribute to society in many ways, and operate in a manner that benefits investors.
  • We will use our skills as real estate professionals to be a source of highly appealing products and services.
  • We will provide the greatest possible protection and convenience for users of financial services.

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Whistleblowing system

Kenedix has a whistleblowing system for the prevention

trust. Every executives and employees at the Kenedix

and rapid discovery of incidents caused by violations of

Group can use

this system for access to internal and

laws and regulations and other improper conduct, the

external reporting channels.

improvement of self-cleansing processes, the control of

reputational risk exposure, and the retention of public

Internal channel 1

(for all legal, personnel and labor problems)

Compliance Officer

Internal channel 2

(for improper behavior by directors and other executives)

Full-time corporate auditors

External channel (for all categories of problems)

External attorney

When an internal or external channel is used to report a problem, a fair investigation is performed while ensuring that the individual who submitted the report is protected. The findings of the investigation are submitted to the

Compliance Officer and president of Kenedix and all required measures to resolve the problem are quickly implemented.

Anti-corruption

The Kenedix Compliance Manual has specific guidelines for the management of meals, entertainment and other gifts involving customers and for the prevention of insider trading. Compliance and other training programs are conducted to ensure that employees understand guidelines for the prevention of bribes and other forms of corruption. In addition, the receipt of meals, entertainment and other gifts involving customers that

goes beyond normal socially accepted boundaries poses the risk of collusion. Kenedix has rules for these activities with external individuals and entities, whether concerning the provision or receipt of these activities, for the purpose of ensuring that giving or receiving meals, entertainment or other gifts remains within the scope of generally accepted social standards.

Managing conflicts of interests

Managing conflicts of interest is one of our material issues. The Compliance Manual has specific policies for the prevention of these conflicts and protection of the company's assets. Compliance and other training programs give employees a thorough understanding of conflicts of interest and how to prevent them. In addition, we have Related Party Transaction Rules that include

processes for making decisions, basic views concerning these transactions and other guidelines. The objective is to prevent transactions between Kenedix and related parties (executives, major shareholders and others) and between these related parties from being detrimental to shareholder value.

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Business compliance committee

The role of the Business Compliance Committee is separate from that of the Corporate Compliance Committee, which discusses matters involving compliance and reaches decisions. Discussing and making decisions involving business that contribute to revenue now or may contribute in the future is this committee's responsibility.

These activities concern how business operations are conducted and how these businesses perform transactions with customers. The Business Compliance Committee ensures that business operations use extreme care to avoid conflicts of interest between different stakeholder categories.

Proper information management among group companies

The Kenedix Group provides asset management services for a large number of investment corporations and funds on behalf of investors. Kenedix has signed a memorandum with Kenedix Real Estate Fund Management, Inc. and the investment corporations managed by this company and with Kenedix Investment Partners, Inc. concerning the provision of real estate and

other information by Kenedix. The proper provision of information by Kenedix and group companies along with the determination of the types of support supplied by the Kenedix Group (and disclosure of this information) ensures the transparency and suitability of the operations of funds and other similar entities.

Rule concerning conflicts of interest among REITs

Since Kenedix Real Estate Fund Management, Inc. manages multiple REITs, it has established a pipeline committee and adopted internal guidelines in order to prevent the improper allocation of acquisition opportunities as well as prohibition of concurrent serve as several general managers of REIT management departments, and thus, managing conflicts of interests among the REITs.

By managing these rules appropriately and smoothly, it strives to implement appropriate measures for conflicts of interest, such as preventing arbitrary distribution of real estate sales information and preventing conflicts of interest among the investment corporation managed by the asset management company.

Rejection of anti-social forces

The Kenedix Compliance Manual has specific policies for measures concerning anti-social forces. Compliance and other training programs give employees a thorough understanding of these policies.

Kenedix refuses to have any relationship whatsoever with anti-social forces. If a customer or business partner is determined to be an anti-social force or if an improper demand is received from an anti-social force, the

71

Responsible organization

prescribed internal process is immediately used to submit a report. Furthermore, we contract the police, an attorney and other external parties as needed to cut off this relationship with an anti-social force.

In addition to eliminating any anti-social force ties that are discovered, our normal business activities include measures to prevent these relationships. For example, we always do a background check of counterparties before signing contracts.

72

Responsible organization

Risk management

Basic views

Kenedix manages risk in accordance with its Risk Management Rules, which define risk factors as potential problems that could be detrimental to corporate value with respect to business processes or be an impediment to the ability to achieve sustained growth.

Risk management is one of the material issues of Kenedix. There are many activities for the proper oversight and control of risk factors.

Risk management system

The General Administration and Human Resources Department is responsible for risk management. Department managers are responsible for risk management in their respective business units and are given the authority needed to establish and operate risk management systems, submit reports, and perform other

duties.

The Internal Audit Department performs audits to confirm that risk management activities of the General Administration and Human Resources Department comply with the Risk Management Rules.

73

Responsible organization

Crisis and disaster response system

Kenedix has Crisis Management Rules and Disaster Response Rules for incidents, accidents, natural disasters and other problems that have a major impact on business activities or society overall and are detrimental to corporate value. The General Administration and Human Resources Department is responsible for crisis management and disaster response activities. This department establishes an emergency response headquarters to take actions as needed when problem occurs.

In accordance with the Kenedix Group Business Continuity Plan, disaster response drills are held periodically, there are measures in place to resume business operations quickly following a disaster or other problem, and other measures to be prepared for a crisis.

We periodically reexamine this plan and make revisions as needed.

Kenedix also uses the following measures to be prepared for a disaster.

  1. Storage of disaster response kits with food, water and other supplies for executives and employees at business sites
  2. A safety confirmation system for quickly determining the status of executives and employees after a disaster
  3. Back-upservers in several locations to protect data

Information security

Information security measures at Kenedix are based on an

understanding that protecting and properly managing

Information Management Policy that includes the

information, whether on paper of electronic media, is a

following measures and is constantly seeking ways to

key social responsibility.

improve security. These activities reflect the

  1. Kenedix obtains information as needed for business operations and by using legal and fair methods.
  2. Kenedix protects information from unauthorized access, loss, theft, damage, alteration, leaks, improper use and other problems.
  3. Kenedix has established rules and other guidelines based on the Information Management Policy and prescribed methods for handling information. In addition, the duties and responsibilities of executives and employees regarding information are clearly defined.
  4. When the handling of information is outsourced, Kenedix confirms that companies used for outsourcing have an information management system that is equivalent to its own system.
  5. Kenedix constantly reexamines and makes improvements as needed to its information management framework.

Kenedix has an Information Security Officer for the

information in all business units of Kenedix.

oversight of information security. This officer is an

Kenedix executives and employees receive training as

executive who supervises departments that perform

needed concerning the proper handling and protection of

information system operations and who has

information. Audits of these activities are performed by

responsibilities and authority for the handling of

designated auditors. In addition, Kenedix has a manual

74

Responsible organization

concerning the use of mobile devices, personal smartphones, social media, and other devices and media and uses other activities to ensure that employees

manage information strictly in accordance with all rules and guidelines.

Protection of personal information

The Kenedix Compliance Manual contains specific policies for the proper management of confidential information (personal information). Kenedix also has a Personal Information Procedures Manual and conducts compliance and other training programs for employees to be certain that everyone has a strong commitment to protecting personal information.

IT system security

For the protection and proper management of personal information, Kenedix has a Personal Information Protection Policy, Personal Information Protection Rules, Rules for Handling Specific Personal Information, and other rules and guidelines.

Privacy policy

The Kenedix IT System Security Rules specifies the minimum level of measures that employees and others must use for the proper use of information and operation of IT systems. The objectives are preventing leaks, damage,

losses and other problems involving information, operating IT systems properly, and minimizing any losses or other damage caused by IT system accidents.

75

Responsible organization

Commitment to responsible investments

Basic views

A commitment to responsible investments is one of the

stronger infrastructure for achieving both sustained

Kenedix material issues. We are committed to building a

growth and social responsibility.

Signing on to the PRI

The PRI is a set of principles established for the financial industry in 2006 under the leadership of the United Nations Secretary-General of the time, Kofi Annan. PRI comprises six principles.

The PRI encourages the incorporation of ESG issues (Environment, Social and Governance) into investment decision-making processes, with the aim to help companies enhance long-term investment performance

and better fulfill their fiduciary duty.

Kenedix has signed on to the PRI and is ambitious to become a real estate asset management company that commit responsible investment through the practice of PRI.

Signing on to the PFA21

The PFA21 (Principles for Financial Action for the 21st Century) has been established by drafting committee with participation of various financial institutions in October 2011 as the action guidelines of financial institutions who seek to fulfill their responsibilities and roles required for the formation of a sustainable society. Signing financial institutions will implement initiatives based on the seven principles as much as possible based on their own businesses. It has been positioned as a starting point to collaborate without being restricted by business categories, scale or region.

Kenedix, Inc. and Kenedix Real Estate Fund Management, Inc., which is the asset management company for listed REITs and a private REIT, have signed on to the PFA 21 and are ambitious to become a real estate asset management company that commits to responsible investment through the practice of the PFA21.

GRESB membership

GRESB (Global Real Estate Sustainability Benchmark) is an

annual benchmark system for assessing environmental,

76

Responsible organization

social and governance performance in the real estate sector. Many institutional investors use GRESB assessments when selecting investment targets and for dialogues with companies where they have made investments.

Kenedix Real Estate Fund Management, Inc., which manages the assets of listed and private REITs, is a participant member of GRESB.

77

Relevant data

Relevant data

78

Relevant data

Relevant data (environment)

2016

2017

2018

2019

Number of renewable energy power plants*

9

21

22

23

Output of renewable energy facilities (MW)*

16.5

110.8

153.4

155.7

Violations of environmental laws and regulations

0

0

0

0

and environmental accidents

Note: The number of renewable energy power plants and output of renewable energy facilities at the Kenedix renewable energy fund are as of the end of each year and include locations that are operating or under development by the fund.

Relevant data (social)

2016

2017

2018

2019

Number of healthcare properties managed

14

14

21

24

by Kenedix Group REITs

AUM of healthcare properties managed

27,965

27,965

44,442

54,128

by Kenedix Group REITs (¥ million)

Relevant data (stakeholder)

2016

2017

2018

2019

ROE

11.9%

11.7%

13.4%

11.2%

Total return ratio

59.1%

61.2%

93.8%

56.5%

79

Relevant data

Relevant data (employment)

2016

2017

2018

2019

Number of employees (average age)*1

106 (41.0)

96 (41.1)

66 (40.9)

67 (41.3)

Men (average age)

80 (41.4)

73 (40.8)

50 (39.9)

49 (40.2)

Women (average age)

26 (40.0)

23 (42.0)

16 (44.1)

18 (44.3)

Pct. Of females in employees

24.5%

24.0%

24.2%

26.9%

Number of employees [consolidated]

299

304

320

339

Average number of consecutive years

5.9

6.3

6.4

6.9

at the Kenedix Group*1

Men

5.5

5.8

5.9

6.4

Women

7.3

8.0

8.1

8.2

Difference ((Women-Men) / Men)

32.7%

37.9%

37.3%

28.1%

Number of newly hired employees*2

12

20

21

11

(new graduate hires / mid-career hires)

(1/11)

(4/16)

(5/16)

(5/6)

Men

9

13

15

8

(new graduate hires / mid-career hires)

(1/8)

(3/10)

(5/10)

(5/3)

Women

3

7

6

3

(new graduate hires / mid-career hires)

(0/3)

(1/6)

(0/6)

(0/3)

Pct. of women in mewly hired employees

25.0%

35.0%

28.6%

27.3%

(new graduate hires / mid-career hires)

(0%/27.3%)

(25.0%/37.5%)

(0%/37.5%)

(0%/50.0%)

Number of managers*1

30

24

19

19

Men

29

23

17

17

Women

1

1

2

2

Pct. of female managers

3.3%

4.2%

10.5%

10.5%

Number of directors*1

8

8

10

9

Men

8

8

9

8

Women

0

0

1

1

Pct. of female directors

0%

0%

10.0%

11.1%

Note1: These figures are based on individuals who belong to Kenedix.

Note2: These figures are based on individuals who are working at Kenedix group companies and employed directly by Kenedix.

80

Relevant data

Relevant data (system use, etc.)

2016

2017

2018

2019

Number of employees using

2

1

0

4

childbirth leave*2

Number of employees using

5

4

1

3

childcare leave*2

Pct. of employees returning

100%

100%

100%

100%

To work after childcare leave*2

Number of employees using

3

4

1

1

shortened working hours for childcare*2

Number of employees using

2

7

8

7

staggered working hours for childcare*2

Number of employees using

1

2

2

2

sick / injured child care leave *2

Number of employees using

0

0

0

0

elderly parent care extended leave *2

Number of employees using

0

1

3

4

elderly parent care single-day leave*2

Number of employees using

shortened working hours

0

0

0

0

to care for an elderly parent*2

Number of employees using

staggered working hours

0

1

2

2

to care for an elderly parent*2

Average number of days

9.4

10.4

10.8

12.7

of paid leave used*1

Pct. of paid leave used*1

55.3%

60.5%

62.8%

71.2%

Overtime hours, per month, per person*1

24.6

22.6

21.1

17.3

Pct. of employees

96.3%

99.1%

99.5%

100%

receiving a health check-up*2

Number of work-related fatalities*2

0

0

0

0

Note1: These figures are based on individuals who belong to Kenedix.

Note2: These figures are based on individuals who are working at Kenedix group companies and employed directly by Kenedix.

81

Relevant data

Relevant data (governance)

2016

2017

2018

2019

Term of directors

1 year

1 year

1 year

1 year

Directors

8

8

10

9

Internal directors

5

5

6

5

Men

5

5

5

4

Women

0

0

1

1

Independent outside directors

3

3

4

4

Men

3

3

4

4

Women

0

0

0

0

Pct. of female directors

0%

0%

10.0%

11.1%

Pct. of independent outside directors

37.5%

37.5%

40.0%

44.4%

Average age of directors

59.0

57.5

57.8

57.6

Average years since election

5.9 years

4.8 years

4.3 years

3.6

Number of Board of Directors meetings

25

25

25

21

Average attendance of board meetings

97.5%

95.3%

98.0%

100%

Average board meeting attendance of

97.3%

92.0%

96.0%

100%

independent outside directors

Corporate auditors

4

4

4

5

Internal corporate auditors

2

2

2

2

Men

2

2

2

2

Women

0

0

0

0

Independent outside corporate auditors

2

2

2

3

Men

2

2

2

3

Women

0

0

0

0

Pct. of female corporate auditors

0%

0%

0%

0%

Pct. of independent outside

50.0%

50.0%

50.0%

60.0%

corporate auditors

Total number of

15

17

21

16

compliance training programs conducted

82

GRI Standard comparison

GRI Standards comparison

This website has been prepared in accordance with GRI Standards: Core option.

*:Core topics defined in the GRI Standards.

Universal Standards

No.

Disclosure

Related web page or reason for omission

GRI 102: General Disclosures 2016

1. Organizational profile

102-1*

Name of the organization

Company Summary

102-2*

Activities, brands, products, and services

Our Business

Kenedix Group

Mission, Vision, Medium-term Management

Plan

102-3*

Location of headquarters

Company Summary

102-4*

Location of operations

Company Summary

102-5*

Ownership and legal form

Company Summary

102-6*

Markets served

Our Business

Kenedix Group

Diversified criteria and diversified client

investors

102-7*

Scale of the organization

Company Summary

102-8*

Information on employees and other workers

Relevant data (employment)

102-9*

Supply chain

Stakeholder engagement

102-10*

Significant changes to the organization and its supply

Section 1. Overview of the Company, Part I,

chain

Securities Report

102-11*

Precautionary principle or approach

Risk management

102-12*

External initiatives

Commitment to responsible investments

102-13*

Membership of associations

Company Summary

2. Strategy

102-14*

Statement from senior decision-maker

Message from the President

102-15

Key impacts, risks, and opportunities

-

3. Ethics and integrity

102-16*

Values, principles, standards, and norms of behavior

Mission, Vision, Medium-term Management

83

GRI Standard comparison

Plan

Diversity and equal opportunities

Compliance

102-17 Mechanisms for advice and concerns about ethics Contact for complaints and consultations Support system for outside directors and/or corporate auditors

Whistleblowing system

4. Governance

102-18*

Governance structure

Sustainability promotion structure

Corporate governance system

102-19

Delegating authority

Sustainability promotion structure

102-20

Executive-level responsibility for economic,

Sustainability promotion structure

environmental, and social topics

102-21

Consulting stakeholders on economic, environmental,

Stakeholder engagement

and social topics

102-22

Composition of the highest governance body and its

Corporate governance system

committees

5. Directors and Auditors, Section 4, Part I,

Securities Report

102-23

Chair of the highest governance body

Corporate governance system

Chairperson of the Board, II-1. [Directors] ,

Corporate Governance Report

102-24

Nominating and selecting the highest governance

Corporate governance system

body

Article 9 Qualification for Directors and

Nomination Procedures, Corporate

Governance Guidelines

102-25

Conflicts of interest

Managing conflicts of interests

102-26

Role of highest governance body in setting purpose,

Sustainability promotion structure

values, and strategy

Corporate governance system

102-27

Collective knowledge of highest governance body

Training Policy for Directors, Supplementary

Principle 4.14.2, I-1. [Basic Views on Corporate

Governance, Capital Structure, Corporate

Profile and Other Basic Information],

Corporate Governance Report

102-28

Evaluating the highest governance body's performance

Analysis and Evaluation of Effectiveness of the

Board of Directors as a whole, Supplementary

Principle 4.11.3, I-1. [Basic Views on Corporate

84

GRI Standard comparison

Governance, Capital Structure, Corporate

Profile and Other Basic Information],

Corporate Governance Report

102-29

Identifying and managing economic, environmental,

Material issues

and social impacts

102-30

Effectiveness of risk management processes

Risk management

102-31

Review of economic, environmental, and social topics

-

102-32

Highest governance body's role in sustainability

Sustainability promotion structure

reporting

102-33

Communicating critical concerns

Whistleblowing system

102-34

Nature and total number of critical concerns

-

102-35

Remuneration policies

Policy for determining of remuneration

amounts for directors and corporate auditors

102-36

Process for determining remuneration

Policy for determining of remuneration

amounts for directors and corporate auditors

Policy for determining of remuneration

amounts for directors and corporate auditors

Article 8, Nomination and Remuneration

Advisory Committees, Corporate Governance

Guidelines

102-37

Stakeholders' involvement in remuneration

-

102-38

Annual total compensation ratio

-

102-39

Percentage increase in annual total compensation ratio

-

5. Stakeholder engagement

102-40*

List of stakeholder groups

Stakeholder engagement

102-41

Collective bargaining agreements

-

102-42*

Identifying and selecting stakeholders

Stakeholder engagement

102-43

Approach to stakeholder engagement

Stakeholder engagement

102-44*

Key topics and concerns raised

Continuous improvement of customer

satisfaction

Community engagement

Managing conflicts of interests

Initiatives for our shareholders and investors

6. Reporting practice

102-45*

Entities included in the consolidated financial

4. Affiliated Companies, Section 1, Part I,

85

GRI Standard comparison

statements

Securities Report

102-46*

Defining report content and topic boundaries

Editorial policy

Material issues

102-47*

List of material topics

Material issues

102-48*

Restatements of information

Editorial policy

102-49*

Changes in reporting

Editorial policy

102-50*

Reporting period

Editorial policy

102-51*

Date of most recent report

Editorial policy

102-52*

Reporting cycle

Editorial policy

102-53*

Contact point for questions regarding the report

Editorial policy

102-54*

Claims of reporting in accordance with the GRI

This report has been prepared in accordance

Standards

with GRI standards: Core option

102-55*

GRI content index

GRI Standards comparison (This page)

102-56*

External assurance

There are no external assurances as of the

publication date

GRI 103: Management Approach 2016

103-1

Explanation of the material topic and its boundary

Material issues

103-2

The management approach and its components

Sustainability policies

Managing conflicts of interests

Reduction of energy consumption and

CO2 emissions

Reduction of water consumption and waste

materials

Health and wellbeing of employees

Recruiting, employee retention and career

advancement

Diversity and equal opportunities

Community engagement

Improving resilience/climate adaption

103-3

Evaluation of the management approach

Sustainability promotion structure

Economic Standards

No.

Disclosure

Related web page or reason for omission

GRI 201: Economic Performance 2016

86

GRI Standard comparison

201-1

Direct economic value generated and distributed

Financial Highlights

201-2

Financial implications and other risks and opportunities

-

due to climate change

201-3

Defined benefit plan obligations and other retirement

[Notes], Section 5, Part I, Securities Report

plans

201-4

Financial assistance received from government

-

GRI 205: Anti-corruption 2016

205-1

Operations assessed for risks related to corruption

-

205-2

Communication and training about anti-corruption

Anti-corruption

policies and procedures

205-3

Confirmed incidents of corruption and actions taken

-

Environmental Standards

No.

Disclosure

Related web page or reason for omission

GRI 302: Energy 2016

302-1

Energy consumption within the organization

Preparing for disclosure in future

302-2

Energy consumption outside of the organization

Preparing for disclosure in future

302-3

Energy intensity

Preparing for disclosure in future

302-4

Reduction of energy consumption

-

302-5

Reductions in energy requirements of products and

-

services

GRI 303: Water 2016

303-1

Water withdrawal by source

-

303-2

Water sources significantly affected by withdrawal of

-

water

303-3

Water recycled and reused

-

GRI 304: Biodiversity 2016

Operational sites owned, leased, managed in, or

304-1

adjacent to, protected areas and areas of high

Biodiversity

biodiversity value outside protected areas

304-2

Significant impacts of activities, products, and services

-

on biodiversity

304-3

Habitats protected or restored

Biodiversity

GRI 305: Emissions 2016

87

GRI Standard comparison

305-1

Direct (Scope 1) GHG emissions

Preparing for disclosure in future

305-2

Energy indirect (Scope 2) GHG emissions

Preparing for disclosure in future

305-3

Other indirect (Scope 3) GHG emissions

-

305-4

GHG emissions intensity

Preparing for disclosure in future

305-5

Reduction of GHG emissions

-

GRI 306: Effluents and Waste 2016

306-1

Water discharge by quality and destination

Preparing for disclosure in future

306-2

Waste by type and disposal method

Preparing for disclosure in future

306-3

Significant spills

The fact of leak has not been confirmed

306-4

Transport of hazardous waste

-

306-5

Water bodies affected by water discharges and/or

-

runoff

GRI 307: Environmental Compliance 2016

307-1

Non-compliance with environmental laws and

There are no violations within the reporting

regulations

period

Social Standards

No.

Disclosure

Related web page or reason for omission

GRI 401: Employment 2016

401-1

New employee hires and employee turnover

Relevant data (employment)

401-2

Benefits provided to full-time employees that are not

-

provided to temporary or part-time employees

Support for childbirth, childcare and senior

401-3

Parental leave

nursing care

Relevant data (system use, etc.)

GRI 403: Occupational Health and Safety 2016

403-1

Workers representation in formal joint management-

-

worker health and safety committees

Types of injury and rates of injury, occupational

403-2

diseases, lost days, and absenteeism, and number of

Relevant data (system use, etc.)

work-related fatalities

403-3

Workers with high incidence or high risk of diseases

There are no employees engaged in high-risk

related to their occupation

operations

403-4

Health and safety topics covered in formal agreements

-

88

GRI Standard comparison

with trade unions

GRI 404: Training and Education 2016

404-1

Average hours of training per year per employee

-

404-2

Programs for upgrading employee skills and transition

Training programs

assistance programs

Employment system for seniors

Percentage of employees receiving regular

Human resource development system

404-3

Evaluation system to support employees'

performance and career development reviews

career development

GRI 405: Diversity and Equal Opportunity 2016

405-1

Diversity of governance bodies and employees

Diversity and equal opportunities

Relevant data (employment)

405-2

Ratio of basic salary and remuneration of women to

-

men

GRI 413: Local Communities 2016

413-1

Operations with local community engagement, impact

Community engagement

assessments, and development programs

413-2

Operations with significant actual and potential

-

negative impacts on local communities

GRI 416: Customer Health and Safety 2016

416-1

Assessment of the health and safety impacts of

Preparedness for natural disasters and other

product and service categories

emergencies

416-2

Incidents of non-compliance concerning the health

-

and safety impacts of products and services

GRI 418: Customer Privacy 2016

418-1

Substantiated complaints concerning breaches of

Privacy Policy

customer privacy and losses of customer data

89

Disclaimer

Kenedix Inc. published this content on 22 April 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2020 06:37:05 UTC


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Managers and Directors
Taisuke Miyajima President & Representative Director
Akihiro Asano CFO, Head-Finance & Accounting
Koju Komatsu Chief Investment Officer & Head-Planning
Soushi Ikeda MD & General Manager-Strategic Investment
Masaki Tachibana Outside Director