• Principles for Customer-Oriented Business Conduct
  • Status of engagement based on Principles for Customer-Oriented Business Conduct

Principles for Customer-Oriented Business Conduct

Principle 1

Formulation and Announcement of our Principles of Fiduciary Duty

As a member of the Kenedix Group, our company will, in line with the following Mission Statement and the Corporate Mission formulated by Kenedix Inc., endeavor to maximize the profits of our customers through adaptable and prompt investment management, after careful consideration as an independent asset management company.

Mission Statement

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

Corporate Mission

(1) Business Objective: “For What?”
We contribute to society by making the best use of investment capital and creating value from real estate.

(2) Business Field: “For Whom?”
We offer the best investment opportunities to our clients by committing to multiple roles globally as a real estate asset manager.

(3) Business Principle: “How?”
We confront new business challenges through our management speed and flexibility while emphasizing stability and fairness.

We also actively discuss and promote our commitment to sustainability and ESG (Environment, Society and Governance) management.

Principle 2

Pursuit of Best Interests of Customers

1. Our company will, concurrently with our close observation of real estate investment and management environment, always seek to pursue the best interests of our customers and to implement the necessary measures with speed and adaptability. On the basis of this overarching principle, we have established the specific policies set forth in Principle 3 through Principle 7 below. Through implementations of such policies, we will realize the concept of the phrase in our corporate logo, “PARTNERS IN GROWTH.”

2. We will manage the portfolio of the investment corporations that have entrusted the management of their assets to our company with an emphasis on the realization of stable and long-term dividends, based on the investment policies of such investment corporations as stipulated in their respective articles of incorporation.

3. As regulatory compliance is closely connected with our pursuit of the best interests of our customers, strict compliance constitutes one of the most important subjects for the management of our company and guides the conduct of our day-to-day operations.

Principle 3

Appropriate Management of Conflicts of Interests

1. Investment corporations that entrust their asset management functions to our company may engage in the trading of investment properties with Kenedix Inc. or with the funds that entrust their asset management function to Kenedix Inc.
When transactions are entered into between an investment corporation and a related party, such as transactions through the support of our sponsor (referred to above), our Compliance Officer, with a view to preventing unreasonable damage to the interests of our customers, will conduct an inspection to determine whether such transactions give rise to any issue under our internal rules on related party transactions. Thereafter our Compliance Committee (which includes outside independent members) will consider the appropriateness of the transactions. Passing the inspection by the Compliance Officer and obtaining approval of such transactions by the Compliance Committee are among the conditions to be met in executing the relevant transactional agreements.

2. As we have been entrusted with the asset management functions of more than one investment corporations, we follow the rule of “Priority of Consideration,” according to which priority will be granted to investment properties based on type or scale, in order to prevent conflicts of interests that result from conflicts between investment opportunities sought by investment corporations.

Principle 4

Clarification of Fees

1. We provide clear information on the types of fees concerning listed investment corporations and how such fees are calculated in the annual securities reports and asset management reports, etc. of the respective investment corporations.

2. We provide clear information on the types of fees concerning private investment corporations in the relevant private placement memorandums and asset management reports, etc.

Principle 5

Straightforward Disclosure of Important Information

In addition to our disclosure of the information required by the rules of the Tokyo Stock Exchange and other laws and regulations, we voluntarily disclose information that we consider helpful for the investment decisions of our customers.
Each investment corporation discloses information on its website in a way that is readily accessible for our customers.
Besides disclosing information through press releases, etc., listed investment corporations also upload video streams that provide briefings on their financial results.

Principle 6

Providing Applicable Services to Customers

We improve our ability to meet the needs of our customers, and help our customers to gain a deeper understanding of our management policy, by engaging our customers in wide-ranging and productive interactions that are not restricted to unilateral communication from an asset manager to customers. Furthermore, it is our goal, through the prompt and flexible improvement of our management as necessary, to maintain sustained growth and a stable investment management that would contribute to the long-term profits of our customers.

Principle 7

Programs to Encourage Compliance by our Employees

Through establishment of an annual compliance program and the continued conduct of regular compliance training for all of our employees and officers, we endeavor to ensure adherence to regulatory compliance and to maintain and improve our governance system as an asset management company. By carrying out these measures, we continue to promote the policies expressed in Principle 2 through Principle 6 above.


Status of engagement based on Principles for Customer-Oriented Business Conduct

We are engaged in the following activities as an asset management company entrusted with the management of Kenedix Office Investment Corporation (hereinafter referred to as "KDO"), Kenedix Residential Next Investment Corporation (hereinafter referred to as "KDR"), Kenedix Retail REIT Corporation (hereinafter referred to as "KRR") and Kenedix Private Investment Corporation (hereinafter referred to as "KPI") in relation to the Principles for Customer-Oriented Business Conduct.

Principle 1

Formulation and Announcement of our Principles of Fiduciary Duty

As a member of Kenedix Group, we continue to strive to maximize the interests of our customers through flexible and prompt investment management. We are also actively promoting initiatives on sustainability and ESG.
For more information on investment corporations' initiatives on sustainability and ESG, please refer to the following investment corporation websites.

Principle 2

Pursuit of Best Interests of Customers

In accordance with the investment policies of each investment corporation, we aim to maximize the profits of unitholders by securing stable earnings and achieving sustainable growth in investment assets, specifically as follows.

KDO

KDO's basic policy is to build a portfolio through flexible and responsive investment so as not to miss “timing” in response to “trends.” We aim to maximize the profits of unitholders by securing stable earnings and achieving sustainable growth in investment assets.

KDR

We aim to maximize unitholder value by advancing into a REIT in line with changes in social/economic structures and enhancing its “stability” and “ability to pursue growth” through a wide range of investments in residential, healthcare, and accommodation properties.

KRR

We aim to maximize unitholder value by securing stable earnings and steady growth in investment assets, through our focused investment in retail properties.

KPI

We have four characteristics: “an easy-to-understand portfolio,” “performance-linked asset management fees,” “open system design (including the establishment of advisory committees and pipeline committees),” and “growth models based on group strategies.” While carefully monitoring the investment environmental, we aim to maximize the profits of unitholders in order to achieve the goal, “long-term investment and stable dividends.”


For more information on the specific activities of each investment corporation, please refer to the following websites of each investment corporation.
KPI investors are requested to log in to KPI's website using a dedicated ID and password (hereinafter the same).

Principle 3

Appropriate Management of Conflicts of Interests

In managing the assets of each investment corporation, we have established Related-party Transaction Rules for each division in charge of asset management for each investment corporation in relation to transactions with related parties or with us, and managed the assets in accordance with these rules.
In addition, since we are entrusted with the management of several investment corporations, there is the possibility of a case of conflicts among investment corporations on investment opportunities
Accordingly, we have established Priority of Consideration rules based on the types and sizes of properties, and are working to implement appropriate measures against conflicts of interest, such as preventing arbitrary distribution of real estate sales information and preventing conflicts of interest between investment corporations that entrust their management to us.
For more information on the specific activities of each investment corporation, please refer to the following websites of each investment corporation.

KDO

https://www.kdo-reit.com/en/feature/environment6.html
https://www.kdo-reit.com/en/ir/library.html

Please refer to Disclosure Materials, IR Presentation Material for the 28th Fiscal Period Ended April 30, 2019 P57, Overview of preferential study rights for property information.

KDR

https://www.kdr-reit.com/en/feature/governance.html

KRR

https://www.krr-reit.com/en/feature/feature4.html

KPI

https://www.kpi-reit.com/
https://kenedix-fm.com/en/governance.html#des_pro

Principle 4

Clarification of Fees

Some of investment corporations that entrust the asset management to us adopt performance-linked asset management fees linked to distributions per unit and investment unit performance, which is a management fee system designed to enhance the linkage between unitholder’s and our interests.
The types, calculation methods and amounts of asset management fees we receive from each investment corporation can be found on the following websites of each investment corporation.

Method of Calculation

KDO

https://www.kdo-reit.com/en/ir/library.html

(Please refer to Disclosure Materials, IR Presentation Material for the 29th Fiscal Period Ended Oct. 31, 2019 P28, Asset management fee structure of the Asset Management Company)

KDR

https://www.kdr-reit.com/en/ir/library/

(Please refer to Financial Results for the 16th Fiscal Period (presentation material) P28

KRR

https://www.krr-reit.com/en/ir/library.html

(Please refer to Financial Result for the 9th Financial Period (presentation material) P28)

KPI

https://www.kpi-reit.com/

Amount

KDO

https://www.kdo-reit.com/en/ir/library.html

(Please refer to Disclosure Materials, Semi-annual Report for the 29th Fiscal Period Ended Oct. 31, 2019 P20, Statement of Income and Retained Earnings)

KDR

https://www.kdr-reit.com/en/ir/library/index.html

(Please refer to Semi-annual Report for the 15th Period P47)

KRR

https://www.krr-reit.com/en/ir/library.html

(Please refer to Semi-annual report for the 9th period P36)

KPI

https://www.kpi-reit.com/

Principle 5

Straightforward Disclosure of Important Information

We hold briefing sessions for institutional investors and analysts for each fiscal period of each listed investment corporation (KDO, KDR, and KRR). The presentation materials and videos are posted on the websites of each investment corporation. We also actively participate in briefings and events for retail investors.
We disclose information in accordance with laws and regulations as well as information that is deemed necessary and appropriate for investment decisions of unitholders in a timely manner.
Although KPI is a private placement investment corporation, KPI has established disclosure policies and standards equivalent to listing investment corporations by reference to the Securities Listing Regulations, based on its proactive IR stance toward unitholders. In addition, KPI actively use its website to promptly deliver useful information for unitholders.
For more information on the specific activities of each investment corporation, please refer to the following websites of each investment corporation.

Principle 6

Providing Applicable Services to Customers

As outlined in Principle 2, Pursuit of Best Interests of Customers, we aim to maximize the profits of unitholders by securing stable earnings and sustained growth of investment assets in accordance with the investment policies of each investment corporation.
To maximize unitholder profits, we consider what services are appropriate for our customers and act accordingly.
For more information on the specific activities of each investment corporation, please refer to the following websites of each investment corporation.

KDO

In order to accurately grasp the needs of tenants in office buildings, we conduct investment management that contributes to our customers' medium-to long-term profits through implementing customer satisfaction surveys and carrying out appropriate facility construction based on the results of these surveys.
As office building tenants are also customers, we are striving to provide an office environment that is highly satisfactory to tenants.

https://www.kdo-reit.com/en/portfolio/virtual.html

KDR

We provide investment and management services through "flexible" and "dynamic" real estate investment management based on the three core strategies of KDR: "Consistent External Growth by Making Use of Good Judgment," "Efficient Profit Management" and "Challenge New Business Opportunities.“ We will invest primarily in residential, healthcare and accommodation as its target investments, with the aim of achieving sustainable growth and stable investment that contributes to the medium-to long-term interests of customers.

https://www.kdr-reit.com/en/feature/index.html

KRR

By investing primarily in shopping centers for daily needs and additionally investing in distribution centers, which supplement retail facilities in providing goods, we aim to contribute to enlivening local communities and enhancing social infrastructures, and to ensure stable asset management over the medium to long term.

https://www.krr-reit.com/en/feature/index.html
https://www.krr-reit.com/en/feature/feature2b.html

KPI

We provide stable, long-term earnings opportunities, investment opportunities, and information based on the characteristics of our private placement investment corporation and the needs of our customers. In addition, we have established “an Advisory Committee” to manage KPI's assets, which makes use of the opinions of investors in asset management.

https://www.kpi-reit.com/

Principle 7

Programs to Encourage Compliance by our Employees

We adopt programs for developing employees' capabilities and enhancing their professional skills. Please refer to the following website.

https://kenedix-fm.com/en/sustainability.html#emp
  • Principles for Customer-Oriented Business Conduct
  • Status of engagement based on Principles for Customer-Oriented Business Conduct

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