Kenedix Residential Next Investment : Notice Concerning Acquisition Settlement of Property (KDX Residence Nakanobu)

Translation of Japanese Original

August 3, 2020

To All Concerned Parties

REIT Issuer:

Kenedix Residential Next Investment Corporation

Representative: Keisuke Sato, Executive Director

(Securities Code Number: 3278)

Asset Management Company

Kenedix Real Estate Fund Management, Inc.

Representative: Masahiko Tajima, President & CEO

Contact: Shin Yamamoto, Head of Planning Division,

Residential REIT Department

TEL:[phone]t

Notice Concerning Acquisition Settlement of Property (KDX Residence Nakanobu)

Kenedix Residential Next Investment Corporation (the "Investment Corporation") announced today that it completed settlement of the acquisition of the following Residential property.

				(in thousands of yen)
Property		Location		Acquisition Price
Property name	(city or ward,	Type of Assets
number	(note)
	prefecture)
T-91	KDX Residence Nakanobu	Shinagawa-ku,	Trust beneficiary interest	830,000
Tokyo	in real estate

(Note)"Acquisition Price" is the sales amount of the trust beneficiary interest (excluding acquisition costs, property tax, city planning tax or consumption tax, etc.) indicated in the trust beneficiary interest sales contract concerning the acquired asset and is rounded down to the nearest thousand yen.

Regarding the details of the acquired property above, please refer to the press release "Notice Concerning Acquisition of Properties and Conclusion of Lease Contracts with New Tenants (Total of 5 Residential Properties and 2 Accommodations)" announced on February 10, 2020. In addition, the Investment Corporation have newly acquired an Appraisal Report with price point as of July 31, 2020.

Attached Materials

Reference Material : Appraisals Report Summary

* Website URL of the Investment Corporation: https://www.kdr-reit.com/en/

[Provisional Translation Only]

English translation of the original Japanese document is provided solely for information purposes.

Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

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Reference Material : Appraisals Report Summary

Property Name			KDX Residence Nakanobu
Appraisal Value				¥ 901,000,000
Appraiser			The Tanizawa Sōgō Appraisal Co., Ltd.
Appraisal Date					July 31, 2020
								(Unit: Yen)
			Item	Content		Basis
								Estimate by setting a standard value on the Value Calculated
Income Approach Value	901,000,000		Using the Discounted Cash Flow method and verifying the
								value calculated using the Direct Capitalization method.
	Value Calculated Using the	928,000,000		Assess by capitalizing the medium to long-term stable net
	Direct Capitalization Method		income with the capitalization rate
		(1) Gross Operating Revenue	47,811,452
			Maximum Gross Operating	49,792,419		Assess based on a level of fair rent considered to remain stable
			Revenue		over the medium and long term
			Shortfall Attributed to	1,980,967		Assess based on the premise of an occupancy ratio that can be
			Vacancies		maintained over the medium and long term
		(2) Operating Expenses	9,349,917
			Maintenance Expenses	2,405,398		Assess using the estimation of BM, the level of expenses at
				similar properties and other factors
			Utility Expenses	405,974		Assess by reference to expenses at similar properties and other
				factors
								Assessed with consideration of expenses at similar properties,
			Repair Expenses	1,090,574		annual average repair, maintenance and renewal expenses in the
								engineering report, and other factors.
			Property Management Fees	835,487		Assess based on the draft version of PM contract
			Tenant Recruit Expenses, etc.	1,451,175		Assess by reflecting the rental condition at similar properties
				and the draft version of PM contract
			Taxes and Dues	2,156,100		Assessed based on the fiscal tax base amount for 2020, etc.
			Damage Insurance Fees	48,980		Recognize an amount that reflects the insurance brochure
			Other Expenses	956,229		Recognize an amount that reflects the expense levels at similar
				properties and other factors.
		(3) Net Operating Income	38,461,535
		(NOI= (1)-(2))
		(4) Gain on guarantee deposit	125,592		Assess by estimating using an investment return of 1.0%
		investment
								Assuming that an equal amount is added to a reserve in each
		(5) Capital Expenditure	1,464,000		fiscal period, assess by taking into account the level of capital
								expenditures at similar properties, the age of the property
		(6) Net Cash Flow	37,123,127
		(NCF=(3)+(4)-(5))
								Assess by comprehensively taking into account the property's
		(7) Capitalization Rate	4.0％		location, the characteristics of the building and other
								characteristics
	Value Calculated Using the Discounted	889,000,000
	Cash Flow Method
								Assessed by comprehensively taking into account the
		Discount Rate	4.1％		Property's unique characteristics, while reflecting investment
								returns of comparable transactions of properties
								Assessed by comprehensively taking into account upcoming
								changes in investment returns, risks associated with the subject
		Terminal Capitalization Rate	4.2％		property, general prediction of economic growth rate, trends in
			real estate prices and rent, and all other applicable factor, while
								reflecting investment returns of comparable transaction of
								properties
Value Calculated Using the Cost Approach	894,000,000

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	Land to value ratio	85.2％
	Building to value ratio	14.8％

Items applied to adjustments in approaches to the value and the determination of the appraisal value

Adopted income approach value with the value from the judgment that the income approach value is more persuasive because it is the price calculated according to price formation process from the aspect of earnings, while using the value calculated based on the cost approach as a reference.

※Reference (Appraisal NOI Cap Rate=NOI above described /Acquisition Price)

Property Name	KDX Residence Nakanobu
Appraisal NOI Cap Rate (rounded to the first decimal place)	4.6%

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