Kenedix Retail REIT : Notice Concerning Disposition of Property (Hankyu Oasis Hirakatadeguchi)

Translation of Japanese Original

February 25, 2021

To All Concerned Parties

REIT Issuer:

Kenedix Retail REIT Corporation

Representative: Moyuru Watanabe, Executive Director

(Securities Code: 3453)

Asset Manager:

Kenedix Real Estate Fund Management, Inc. Representative: Masahiko Tajima, President & CEO Contact: Koichiro Nobata, Head of Planning Division,

Retail REIT Department

TEL: [phone]

Notice Concerning Disposition of Property (Hankyu Oasis Hirakatadeguchi)

Kenedix Retail REIT Corporation ("KRR") announced today that Kenedix Real Estate Fund Management, Inc. ("the Asset Manager"), the asset manager for KRR, has decided to dispose the following property as follows.

1. Outline of the disposition

• (1) Type of asset:

• (2) Property name:

• (3) Disposition price (Note):

• (4) Book value:

  Trust beneficiary interest in real estate Hankyu Oasis Hirakatadeguchi 1,500 million yen 1,295 million yen

  (Book value is as of September 30, 2020, rounded off to the nearest million yen.)

• (5) Difference between disposition price and book value:

  204 million yen

  (Figure is referential amount, calculated as a difference between disposition price and book value, and is different from gain or loss on sale. It is rounded off to the nearest million yen.)

• (6) Buyer:

• (7) Date of contract:

  Please refer to Item 4. Buyer's profile for details February 25, 2021

• (8) Disposition date:

  August 10, 2021

• (9) Use of proceeds:

  The proceeds from the disposition are to be allocated as cash on hand and used as a portion of funds for future acquisitions of specified assets and related expenses, redemption of investment corporation bonds or repayment of borrowings.

• (10) Settlement method:

  Received a deposit of 150 million yen on the date of contract Receive the remaining amount on the disposition date

• (11) Method of buyer selection:

The buyer was selected from several potential buyers after verifying the prices and conditions of the disposition.

Note: Excluding acquisition costs, adjustment amount of property tax and city-planning tax, etc.

2. Reason for the disposition

KRR has announced that it will search for opportunities of asset reshuffle as a measure to enhance its unitholder value, focusing on DPU growth. The decision for the disposition is made with comprehensive considerations on factors such as enhancement of the portfolio, overall real estate market, the characteristics of individual asset, etc. As the lease contract of the property expiring in July 2021, KRR had been in discussions with the current tenant

for a new contract. However, since there was a large discrepancy with the current tenant regarding the terms of the new lease contract, KRR had been considering the possibility of tenant replacement and asset disposition. As a result, KRR reached an agreement with a potential buyer to sell the property at a price that exceeded the appraisal value of the property by more than 12% and the book value by more than 15%. As the asset value of the property is expected to decline if KRR continues to hold the property, KRR determined that disposing of the property would lead to an increase in unitholder value.

3. Details of the property

Property name	Hankyu Oasis Hirakatadeguchi
Property type (Note 1)	SM
Type of specified asset	Trust beneficiary interest in real estate
Trustee	Sumitomo Mitsui Trust Bank, Ltd.
Location	1-17-20 Deguchi, Hirakata, Osaka
Land	Form of ownership	Proprietary ownership
Land area	4,978.38 m2
Zoning	Industrial area
Building coverage ratio	60%
Floor-area ratio	200%
Building	Form of ownership	Proprietary ownership
Gross floor area	2,961.02 m2
Date constructed	August 9, 2006
Use	Retail store
Structure/No. of floors	S-structure / 2-story building
Acquisition price	1,280 million yen
Appraisal value (as of)	1,330 million yen (September 30, 2020)
Real estate appraiser	Daiwa Real Estate Appraisal Co., Ltd.
Lease summary Number of tenants Annual rent Tenant deposits Leased area Leasable area Occupancy rate	(as of September 30, 2020)
1
Not disclosed (Note 2)
Not disclosed (Note 2)
2,960.38 m2
2,960.38 m2
100.0%
Remarks	None
Others	Notes: 1. Properties are categorized into the following six types of properties: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC (Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center), SS (Specialty Store) and L (Logistics facility). 2. Undisclosed as KRR has not obtained lessee's consent.

4. Overview of the buyer

The name of the buyer and other information are undisclosed as KRR has not obtained the buyer's consent. There

is no special capital, personnel, or business relationship between KRR / the Asset Manager and the buyer, and the buyer is not deemed a related party under the Investment Trust Law and the Asset Manager's "Retail REIT Department's Internal Regulations on Related Party Transactions".

• 5. Details of brokerage

  The broker is a domestic company, and the name of broker and other information are undisclosed as KRR has not obtained the broker's consent. The broker is not deemed a related party under either the Investment Trust Law or the "Retail REIT Department's Internal Regulations on Related Party Transactions" of the Asset Manager, and

  there is no special capital, personnel, business relationship between KRR/the Asset Manager and the broker.

• 6. Transactions with related parties

  The disposition of the property does not constitute a related-party transaction.

7. Disposition schedule

Disposition decision date/ contract date	February 25, 2021
Scheduled settlement date	August 10, 2021 (planned)

Note:

The purchase and sale agreement with the buyer on the sale of the asset falls under the category of forward commitment made by investment corporations as stipulated in the "Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc." ruled by the Financial Service Agency of Japan. In case the agreement is terminated, either of the parties responsible for the termination shall compensate for the damage resulted from the termination by paying a penalty corresponding to 20% of the sale price (excluding consumption taxes and local consumption taxes) to the other party. However, since KRR is the seller in this transaction and there is no concern such as financing in execution the sale, KRR believes that the risk of KRR paying the penalty and making an important impact on its financial condition is small.

8. Future outlook

Gains on sale of the property are assumed for the fiscal period ending September 30, 2021. There are no changes to the forecasts of fiscal periods ending March 31, 2021 and September 30, 2021 as the impact on the disposition is minimal.

9. Summary of real estate appraisal report

(The numbers are in yen unless otherwise noted)

Summary of real estate appraisal report

Appraisal value	1,330,000,000 yen
Appraiser	Daiwa Real Estate Appraisal Co., Ltd.
Date of appraisal	September 30, 2020

Item

Content

Basis

Income capitalization approach value

Calculated by using the income value by DCF method as a 1,330,000,000 yen standard and verifying it from the income value by direct capitalization method

Value based on direct capitalization method

1,340,000,000 yen

Calculated by capitalizing standardized net income, which is considered to be stable over the medium term, with a cap rate

(1)	Gross operating revenue
Effective gross operating revenue
Loss from vacancy, etc.
(2)	Operating expenses
Maintenance expenses	0 yen None on assumption that the expenses are borne by lessees
Utility expenses	0 yen None on assumption that the expenses are borne by lessees
Repair expenses	0 yen None on assumption that the expenses are borne by lessees
PM fees	3,600,000 yen Calculated based on the current PM contract amount
Tenant recruit expenses, etc.	0 yen None on assumption
Taxes and dues	Undisclosed
Insurance premium	Undisclosed
3

Undisclosed

Undisclosed

Undisclosed

Other expenses

(3)

Net operating income (NOI= (1)-(2))

75,614,200 yen

(4)Profit from security deposits

435,120 yenCalculating investment income assuming investment yield is 1.0%

(5)Capital expenditure

Calculated by taking into account the annual average renewal 2,569,000 yen cost in the engineering report and the construction management fee

Net cash flow (NCF=(3)+(4)-(5))

73,480,320 yen

(7)Cap rate

Calculated by comprehensively considering the location, 5.5% building conditions, and contractual terms of the subject property

Value based on DCF method

1,320,000,000 yen

Discount rate

Calculated based on discount rates for similar real estate 5.3% transactions, comparison with yields on other financial

instruments, etc.

Terminal cap rate

Calculated by taking into account the marketability of the 5.7% subject property at the end of the holding period against the cap

rate

Value based on cost method

867,000,000 yen

Ratio of land

Ratio of building

78.2% 21.8%

Adjustments in estimated value and considerations

None taken into account in determining appraisal value

(Note) Figures used in the direct capitalization method include information that KRR has not obtained consent from the lessee for its

disclosure. Such information or figures that can make calculation of such information are not disclosed in (1) and (2) above.

KRR website address:https://www.krr-reit.com/en/

This notice is the English translation of the Japanese announcement on February 25, 2021. However, no assurance or warranties are given for the completeness or accuracy of this English translation.

Attached materials

Reference material: Property portfolio of KRR

Reference material: Property portfolio of KRR (after the disposition of Hankyu Oasis Hirakatadeguchi and Daikanyama Address Dixsept)

No.	Type (Note 1)	Property name	Location	(Anticipated) acquisition date	(Anticipated) acquisition price (million yen) (Note 2)	Appraisal value (million yen) (Note 3)	Share (%) (Note 4)
T-2	Urban Station- Front SC	MONA Shin-Urayasu	Urayasu, Chiba	February 10, 2015	8,063	10,000	3.6
T-3	Urban Station- Front SC	Passaggio Nishiarai	Adachi-ku, Tokyo	February 10, 2015	5,850	6,620	2.6
T-4	Urban Station- Front SC	Daikanyama Address Dixsept (Note 5)	Shibuya-ku, Tokyo	February 10, 2015
-	-	-
T-5	NSC	Unicus Ina	Kitaadachi-gun, Saitama	February 10, 2015 (Note 6)	4,470	5,240	2.0
T-6	NSC	Yorktown Kita-Kaname	Hiratsuka, Kanagawa	February 10, 2015	4,000	4,350	1.8
T-7	NSC	Unicus Yoshikawa	Yoshikawa, Saitama	February 10, 2015	3,600	3,860	1.6
T-8	SS	Sports Club Renaissance Fujimidai	Nerima-ku, Tokyo	February 10, 2015	2,586	2,750	1.2
T-9	NSC	Super Viva Home Iwatsuki (Land)	Saitama, Saitama	October 2, 2015	4,815	5,470	2.2
T-10	SS	K's Denki Shonan-Fujisawa (Land)	Fujisawa, Kanagawa	October 2, 2015	3,169	3,470	1.4
T-11	NSC	Unicus Kamisato (Land)	Kodama-gun, Saitama	October 2, 2015	3,000	3,050	1.4
T-12	NSC	Unicus Konosu (Land)	Konosu, Saitama	October 2, 2015	1,700	1,780	0.8
T-13	SM	Inageya Yokohama Minamihonjuku (Land)	Yokohama, Kanagawa	October 2, 2015	1,442	1,390	0.6
T-15	NSC	Nakamachidai Tokyu Store	Yokohama, Kanagawa	April 21, 2016	3,360	3,750	1.5
T-16	SS	Central Wellness Club Nagatsuta Minamidai	Yokohama, Kanagawa	April 20, 2016	1,724	1,780	0.8
T-17	SM	Life Kameido	Koto-ku, Tokyo	April 21, 2016	1,450	1,490	0.7
T-18	NSC	Totsuka-Fukaya Shopping Center (Land)	Yokohama, Kanagawa	April 19, 2017	4,170	4,320	1.9
T-19	NSC	Yumemachi Narashinodai Mall	Funabashi, Chiba	April 19, 2017	3,416	3,520	1.5
T-20	NSC	Kawamachi Yahagi Mall	Chiba, Chiba	May 18, 2017	3,097	3,240	1.4
T-21	SS	Prime Square Jiyugaoka	Meguro-ku, Tokyo	April 19, 2017	2,820	2,820	1.3
T-22	SS	Round1 Ichikawa-Onitaka	Ichikawa, Chiba	April 19, 2017	1,880	1,970	0.8
T-23	SM	Ozeki Tokiwadai	Itabashi-ku, Tokyo	February 13, 2018	1,263	1,340	0.6
T-24	SS	Konami Sports Club Shibuya	Shibuya-ku, Tokyo	April 27, 2018	3,400	3,390	1.5
T-25	NSC	Apita Terrace Yokohama Tsunashima	Kohoku-ku, Yokohama, Kanagawa	November 1, 2019	5,899	6,170 (Note 7)	2.7

No.

Type (Note 1)

Property name

Location

(Anticipated) acquisition date

(Anticipated) acquisition price

(million yen)

(Note 2)

Appraisal value (million yen)

(Note 3)

Share

(%) (Note 4)

T-26

NSC

Kalsa Hiratsuka

Hiratsuka, Kanagawa

November 1, 2019

5,980

6,020

2.7

T-27

NSC

Monenosato Mall

Yotsukaido, Chiba

October 24, 2019

2,410

2,530

1.1

T-28

NSC

KDX Chofu Building (Retail wing)

Chofu, Tokyo

October 24, 2019

2,300

2,480

1.0

T-29

NSC

Across Plaza Urayasu Higashino (Land)

Urayasu, Chiba

October 24, 2019

2,248

2,310

1.0

T-30

SM

Comfort Market Nishi-magome

Ota-ku, Tokyo

April 15, 2020

1,920

2,000

0.9

O-1

NSC

Blumer Maitamon

Kobe, Hyogo

February 10, 2015

8,389

9,610

3.8

O-2

SM

Life Takadono (Land)

Osaka, Osaka

February 10, 2015

2,685

3,140

1.2

O-3

NSC

DCM Kahma MEGA Don Quijote UNY Omihachiman

Omihachiman, Shiga

February 10, 2015

2,140

2,590

1.0

O-4

NSC

Blumer HAT Kobe

Kobe, Hyogo

April 16, 2015

11,000

11,000

5.0

O-5

Urban station-front SC

Carino Esaka

Suita, Osaka

October 2, 2015

6,555

7,190

3.0

O-6

Urban station-front SC

COMBOX Komyoike

Izumi, Osaka

October 2, 2015

6,450

6,490

2.9

O-7

SM

Hankyu Oasis Hirakatadeguchi

Hirakata, Osaka

October 2, 2015

-

-

-

O-9

SM

Life Nishi-Tengachaya

Osaka, Osaka

January 21, 2016

1,505

1,690

0.7

O-10

NSC

Million Town Tsukaguchi (Land)

Amagasaki, Hyogo

April 21, 2016

3,723

3,980

1.7

O-11

NSC

Habikigaoka Shopping Center

Habikino, Osaka

September 27, 2019

2,000

2,020

0.9

N-1

SS

Kahma Home Center Nakagawa Tomita (Land)

Nagoya, Aichi

February 10, 2015

2,311

2,690

1.0

N-2

NSC

Valor Ichinomiya-Nishi

Ichinomiya, Aichi

February 10, 2015

2,174

2,360

1.0

N-4

SS

Homecenter Kohnan Sunadabashi

Nagoya, Aichi

April 21, 2016

7,140

7,280

3.2

N-6

NSC

Resora Obu Shopping Terrace

Obu, Aichi

August 1, 2017

7,911

7,050

3.6

N-7

SM

Valor Nakashidami (Land)

Moriyama-ku, Nagoya, Aichi

November 1, 2019

2,551

2,560

1.1

F-1

SM

Sunny Noma

Fukuoka, Fukuoka

February 10, 2015

1,497

1,640

0.7

F-2

SS

Round1 Stadium Hakata-Hanmichibashi

Fukuoka, Fukuoka

April 19, 2017

5,020

5,760

2.3

F-3

NSC

Kurume-Nishi Shopping Center

Kurume, Fukuoka

April 19, 2017

1,515

1,840

0.7

R-1

NSC

Roseo Mito

Mito, Ibaraki

February 10, 2015

(Note 8)

10,046

12,000

4.5

No.

Type (Note 1)

Property name

Location

(Anticipated) acquisition date

(Anticipated) acquisition price

(million yen)

(Note 2)

Appraisal value (million yen)

(Note 3)

Share

(%) (Note 4)

R-2

SS

K's Denki Aomori Honten

Aomori, Aomori

February 10, 2015

1,469

1,520

0.7

R-3

SS

Super Sports Xebio Aomori-Chuo

Aomori, Aomori

February 10, 2015

898

912

0.4

R-4

NSC

Ashico Town Ashikaga

Ashikaga, Tochigi

October 2, 2015

4,180

4,660

1.9

R-5

NSC

Yorktown Shinden-Higashi

Sendai, Miyagi

October 2, 2015

3,252

2,610

1.5

R-6

SM

Kasumi Technopark Sakura

Tsukuba, Ibaraki

October 2, 2015

830

879

0.4

R-8

NSC

P-1 Plaza Tenno

Hamamatsu, Shizuoka

April 22, 2016

4,010

4,350

1.8

R-9

NSC

Seiyu Rakuichi Moriya (Land)

Moriya, Ibaraki

January 31, 2017

4,111

4,260

1.9

R-10

NSC

Sun Street Hamakita

Hamamatsu, Shizuoka

April 27, 2017

10,746

11,160

(Note 7)

4.8

R-11

SS

Costco Wholesale Sapporo Warehouse

Sapporo, Hokkaido

May 31, 2018

4,210

4,420

1.9

L-1

L

Zama Distribution Center

Zama, Kanagawa

April 5, 2019

1,400

1,690

0.6

L-2

L

Oppama Distribution Center

Yokosuka, Kanagawa

April 5, 2019

1,300

1,600

0.6

L-3

L

Musashi Ranzan Distribution Center

Hiki-gun, Saitama

March 26, 2019

3,879

4,090

(Note 7)

1.7

L-4

L

Yokohama Kamigo Distribution Center

Yokohama, Kanagawa

April 11, 2019 (Note 9)

909

970

0.4

L-5

L

Gyoda Distribution Center

Gyoda, Saitama

October 1, 2019

3,160

3,440

1.4

L-6

L

Shinjuku Nishiochiai Distribution Center

Shinjuku-ku, Tokyo

January 10, 2020

810

821

0.4

L-7

L

Chiba-Kita Distribution Center

Chiba, Chiba

December 25, 2020

1,250

1,340

0.6

L-8

L

Sapporo Shiroishi Distribution Center

Sapporo, Hokkaido

December 24, 2020

800

1,020

0.4

Total

221,859

237,742

100.0

(Note 1)

Properties are categorized into the following five types of retail properties for daily needs: NSC (Neighborhood Shopping Center), SM (Supermarket), CSC (Community Shopping Center), Urban Station-Front SC (Urban Station-Front Shopping Center) , SS (Specialty Store) and L (Logistics facility).

(Note 2)

"(Anticipated) acquisition price" indicates the purchase price of each trust beneficiary interest specified in purchase agreement in relation to the acquisition of each property (excluding acquisition costs, adjustment in property tax and city-planning tax, and consumption tax; and rounded down to the nearest one million yen). (As for the properties with building expansion which were additionally acquired, the price includes the amount described in the construction contract and construction design/supervision outsourcing contracts related to construction (expansion) of the building which is additionally acquired part (excluding expenses and taxes and rounded down to the nearest million yen).

(Note 3)

"Appraisal values" are the values as of the end of September 2020 for the properties held as of September 30, 2020, as of December 1, 2020 for Chiba-Kita Distribution Center and Sapporo Shiroishi Distribution Center.

(Note 4)

"Share" indicates the percentage of the (anticipated) acquisition price for each property in the total (anticipated) acquisition price, rounded down to the first decimal place.

(Note 5)

For details of the disposition of Daikanyama Address Dixsept, please refer to "Notice Concerning Disposition of Property (Daikanyama Address Dixsept)" dated November 17, 2020.

(Note 6) (Note 7)

A restaurant building additionally acquired on January 16, 2017.

Represents the amount corresponding to the trust beneficiary quasi-co-ownership.

(Note 8) (Note 9)A second-hand store building additionally acquired on November 26, 2015.

A restaurant building additionally acquired on September 29, 2020.