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Investment Principles

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Realization of Stability and Growth by Three Investment Targets

Kenedix Residential NEXT Investment Corporation (“KDR”) is committed to maximizing the profits of unitholders by realizing stable rental revenues and steady growth of the asset size with investment in a broad range of properties from residential to healthcare and accommodations (“spaces where people live and stay”)

Wide-ranging investment in “space where people live and stay”

KDR will realize strong profitability and sustainable growth by focusing on three asset types with different profit characteristics and market cycles.

Realization of Stability and Growth by Three Investment Targets

1.Property Type

KDR will invest primarily in residential, healthcare and accommodation facilities as its target investments. In making investments, KDR will stringently select real estate etc. where stable demand from tenants and users and long-term stable revenue flows can be projected on the basis of an individual analysis of the attributes of a particular property, as well as regional analysis taking into account location, etc.

Target Portfolio Breakdown by Property Type (based on acquisition price)
Usage Target Portfolio Breakdown
Classification 居住用施設アイコン Residential Facilities Rental Housing Rental Housing 60% or more
Rental Housing with Facility Operators Serviced apartments, company rental housing, student dormitories and apartments, short-term apartments, etc.
ヘルスケア施設アイコン Healthcare Facilities Senior Living Facilities Fee-based homes for the elderly, serviced housing for the elderly, apartments for the elderly, group homes for elderly with cognitive impairment, small multi-function facilities, daycare facilities, etc. 30% or less
Medical Facilities Hospitals, clinics, medical malls, intermediate nursing homes, etc.
宿泊施設アイコン Accommodation Hotels, etc. 20% or less
Other Land with leasehold interest on which buildings stipulated above are located (limited proprietary right of land), etc. 10% or less

2.Geographical Area

KDR carries out diversified investment in real estate located in the Tokyo Metropolitan Area (the principal cities in Tokyo, Kanagawa, Saitama and Chiba Prefectures), an area with the largest economic and population concentration in Japan. KDR also diversifies its investments by investing in real estate in other regional areas (cities designated by cabinet order and other regional cities) with the objective of mitigating the risk of concentrating investments in a single region subject to changes in regional economies and real estate market, earthquakes, typhoons and other natural disasters, population dynamics and other factors. However, KDR may invest in areas other than the above if the characteristics of particular real estate suggest that stable demand from tenants and users can be projected.

Targeted Portfolio Breakdown by Region (based on acquisition price)
Region Target Portfolio Breakdown
Classification Tokyo Metropolitan Area 50% or more
Regional Areas and Other 50% or less

3.Investment Size

KDR carries out investments in real estate according to standards for investment size as shown in the table below, which take into account the following factors.

  1. Liquidity in the real estate market
  2. Securing diversified property size
  3. Securing diversified tenants or users
  4. Economics of the investment from the perspective of operation and management of the property
Standards for Minimum Investment Size and Maximum Investment Size
Classification Acquisition Price
Minimum Investment Size 居住用施設アイコン Residential facilities 300 million yen or more per investment property
ヘルスケア施設アイコン Healthcare facilities 300 million yen or more per investment property
宿泊施設アイコン Accommodation (Hotel, etc.) 500 million yen or more per investment property
Other 100 million yen or more per investment property
Maximum Investment Size The ratio of acquisition price for such real estate will be no more than 20% of the total acquisition price of the entire portfolio after such real estate is acquired.

However, real estate may be acquired in the cases set forth below, even if the real estate targeted for investment does not meet the minimum investment size standard.

  1. In the case of a bulk acquisition of real estate, when the bulk includes real estate with acquisition prices that fall below the minimum investment size standard
  2. In the case where, as a result of the negotiation of acquisition terms for real estate that meets the investment standard, the property’s acquisition price falls below the minimum investment size standard, but has an appraisal value that exceeds the minimum investment size standard
  3. In the case the facility has an important relationship to properties already owned