Kenedix Residential Next Investment : Notice Concerning Acquisition Settlement of Property (KDX Residence Kamata-minami II)

Translation of Japanese Original

May 6, 2021

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]

Notice Concerning Acquisition Settlement of Property (KDX Residence Kamata-minamiII)

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-99	KDX Residence Kamata-minami II	Ota-ku,	Trust beneficiary	780,000
Tokyo	interest 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 4 Residential Properties and 2 Healthcare Facilities)" announced on February 15, 2021.

The Investment Corporation has obtained an appraisal report as of April 15, 2021 and an engineering report, in line with the completion of KDX Residence Kamata-minami II, as shown in the attachment.

Attached Materials

Reference Material (1) Appraisals Report Summary

Reference Material (2) Engineering Report Summary

Reference Material (3) Exterior Photos and Map of Acquired Asset

* Website URL of the Investment Corporation: http://www.kdr-reit.com/english/

[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 (1) Appraisals Report Summary

Property Name		KDX Residence Kamata-minami II
Appraisal Value			¥ 854,000,000
Appraiser			Japan Real Estate Institute
Appraisal Date				April 15, 2021
							(Unit: Yen)
			Item	Content		Basis
							Estimated by correlating the value obtained by the Direct
Income Approach Value	854,000,000		Capitalization method and the value obtained by the Discounted
							Cash Flow method.
	Value Calculated Using the	871,000,000		Assessed by capitalizing the medium to long-term stable net
	Direct Capitalization Method		income with the capitalization rate.
		(1) Gross Operating Revenue	42,481,000
			Maximum Gross Operating	44,331,000		Assessed based on a level of fair rent considered to remain
			Revenue		stable over the medium and long term.
			Shortfall Attributed to	1,850,000		Assessed based on the level of occupancy ratio that can be
			Vacancies		maintained stably over the medium and long term.
		(2) Operating Expenses	8,926,000
							Assessed by reference to the maintenance and operation
			Maintenance Expenses	2,724,000		expenses based on contract terms, the level of expenses at
							similar properties, and other factors.
			Utility Expenses	416,000		Assessed by reference to the past records of similar properties.
							Assessed with consideration of expenses at similar properties,
			Repair Expenses	529,000		annual average repair, maintenance and renewal expenses in the
							engineering report, and other factors.
			Property Management Fees	730,000		Assessed by reference to the compensation rate based on
				contract terms, those at similar properties, and other factors.
			Tenant Recruit Expenses, etc.	1,546,000		Assessed by reference to the contract terms、the lease terms at
				similar properties and other factors.
			Taxes and Dues	2,674,000		Assessed based on the fiscal tax base amount for 2021, etc.
							Assessed by reference to the insurance premiums based on the
			Damage Insurance Fees	50,000		current insurance contract, insurance premium rate at similar
							properties and other factors.
			Other Expenses	257,000		internet use fee, etc.
		(3) Net Operating Income	33,555,000
		(NOI= (1)-(2))
		(4) Gain on guarantee deposit	31,000		Assessed by estimating an investment return of 1.0%.
		investment
							Assessed by taking into account the level of capital
		(5) Capital Expenditure	500,000		expenditures at similar properties and the age of the property on
			the assumption that an equal amount is added to a reserve in
							each fiscal period.
		(6) Net Cash Flow	33,086,000
		(NCF=(3)+(4)-(5))
							Assessed by comprehensively taking into account the
		(7) Capitalization Rate	3.8％		property's location, the characteristics of the building and other
							characteristics.
	Value Calculated Using the Discounted	836,000,000
	Cash Flow Method
							Assessed by comprehensively taking into account the
		Discount Rate	3.6％		Property's unique characteristics, while reflecting investment
							returns of comparable transactions of properties.

2

				Assessed by comprehensively taking into account upcoming
				changes in investment returns, risks associated with the subject
		Terminal Capitalization Rate	4.0％	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	1,010,000,000
		Land to value ratio	73.1％
		Building to value ratio	26.9％

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

Adopted income approach 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 Kamata-minami II
	Appraisal NOI Cap Rate (rounded to the first decimal place)	4.3%
Reference Material (2) Engineering Report Summary
			(Unit: Yen in thousand)
	Property Name		KDX Residence Kamata-minami II
	Investigation Company		DAIWA REAL ESTATE APPRAISAL CO., LTD.
	Investigation Date		April 2021
	Repairs Maintenance and Renovation Expenses Expected to be		8,337
	Required within 12 Years
	Replacement Value		263,900

※The above-mentionedinvestigation company undertakes building assessments for the property as follows. -Assessment of legal compliance with related laws

-Investigation for building construction and facilities -Environmental investigation

-Formulation of a short-term and long-term repair and maintenance plan -Estimates of the replacement value

3

Reference Material (3) Exterior Photos and Map of Acquired Asset

KDX Residence Kamata-minamiⅡ

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