market data bookmarket data book march 2018 1 disclaimer the contents of this document, including...

Market Data Book March 2018

1

Disclaimer

The contents of this document, including summary notes, quotes, data and other information, are provided solely for informational purposes ofmarket condition and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell, any specific products.When you invest, please make decision by your own judgement and responsibility.

Please be aware that matters described herein may change or cease to exist without prior notice of any kind. This document contains forward-looking statements and anticipations of future results, based on current assumptions and beliefs in light of currently available information andresources. Risks and uncertainties, both known and unknown, including those relating to the future performance of the real estate market in Japan,interest rate fluctuations, competitive scenarios, and changing regulations or taxation, may cause Kenedix Residential Investment Corporation(KDR)'s actual results, performance, achievements and financial performance to be materially different from those explicitly or implicitly expressed inthis document.

With respect to any and all terms herein, including without limitation, this document, the information provided is intended to be thorough. However,no assurance or warranties are given with respect to the accuracy or completeness thereof.

Neither KDR nor Kenedix Real Estate Fund Management, Inc. (KFM) shall be liable for any errors, inaccuracies, loss or damage, or for any actionstaken in reliance thereon, or undertake any obligation to publicly update the information contained in this document after the date of thisdocument.

Revised editions of our annual reports will be posted on our website if there should be major corrections going forward.

2

Index1. Economy trend

Real GDP growth rate and annual contribution to change in GDP p.3

CPI (YoY) p.4Employment environment p.5Wage indices (YoY) p.6CPI and private house rent (YoY) p.7Correlation with private house rent p.8

2. Asset trend-a. Demand

Net inflow of residents into Tokyo 23 wards and major cities in Japan p.9Residents growth rate in Tokyo 23 wards and major cities in Japan (YoY) p.10

Population by age group p.11Types of households p.12Principal households and households in rental apartments (non-wooden) p.13

Housing stock in Japan p.14Households in owner-occupied housing and private rental housing by floor space

p.15

Households in rental apartments (non-wooden) by person and floor space

p.16

House ownership rate by age group p.17Percentage of age group in owner-occupied households p.18

-b. SupplyConstruction of rental apartments p.19Construction of condos and detached houses p.20Percentage of room type of newly built housings in Tokyo 23 wards p.21Construction of newly built housings by room type in Tokyo metropolitan area

p.22

Construction of rental apartments and net inflow of residents into Tokyo 23 wards and major cities in Japan

p.23

Construction cost indices (Tokyo) p.24-c. Rental housing fundamentals

Construction of rental housings in Tokyo metropolitan area p.25Rent of rental apartments by area and room type p.26Occupancy rate of rental apartments operated by J-REITs p.27Rent of rental apartments operated by J-REITs p.28Urban land price indices of commercial and residential in six major cities in Japan (YoY)

p.29

Public notice of land prices in residential area p.30

Rent levels by property type p.31

3. Capital trend-a. Acquisition of properties

Investors’ expected cap rate of rental apartment (standard studio) p.32Appraisal cap rates at the acquisition of rental apartments by J-REITs p.33

Amount of asset acquired by J-REITs p.34

-b. Debt environmentLending attitude of financial institutions (Diffusion index of “Accommodative” minus “Severe”)

p.35

New loans for fixed investment to real estate sector by domestic banks p.36

JBA Japanese yen TIBOR p.3710-year JGB interest rate p.38

-c. Equity environmentYield spread p.39Buying J-REITs by Bank of Japan p.40

4. Healthcare facility trendPopulation pyramid p.41Trend and projection in average life expectancy p.42One-person households which householder is over 65 years old p.43

Elderly population in each prefecture p.44Facilities and capacity in fee-based homes p.45Registration situation in serviced housing for the elderly p.46

5. Hotel trendInternational tourists arrivals p.47Inbound visitors p.48Growth rate of inbound visitors (YoY) p.49Growth rate of inbound visitors and inbound guests (YoY) p.50

Occupancy rate of hotels p.51Charge of hotels p.52Guests in domestic accommodations p.53Facilities and rooms in hotels/ryokans p.54

3

1. Economy trend

Real GDP growth rate and annual contribution to change in GDP

-20

-15

-10

-5

0

5

10

15

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2010 2011 2012 2013 2014 2015 2016 2017

(%) 民間在庫品増加純輸出入公的需要企業設備投資民間住宅民間最終消費支出実質GDP

Source ︓The Cabinet Office. Quarterly Estimates of GDP.

Change in private inventories Net exports

Public demand

Private non-resi.investment

Private residentialinvestment

Consumption of households Real GDP

4

1. Economy trend

Revision of consumption tax rate

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

2010 2011 2012 2013 2014 2015 2016 2017 2018

(%) 総合生鮮食品を除く総合食料（酒類を除く）及びエネルギーを除く総合April 2014

CPI (YoY)

All items

All items,less fresh food

All items, less food (less alcoholic beverages) and energy

Source ︓Ministry of Internal Affairs and Communications. Consumer Price Index.

5

1. Economy trend

Employment environment

0.0

0.4

0.8

1.2

1.6

2.0

2.0

3.0

4.0

5.0

6.0

7.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

(times)(%) 完全失業率（左軸）有効求人倍率（右軸）Active job openings-to-applicants rate (RHS)Unemployment rate (LHS)

Source ︓Ministry of Internal Affairs and Communications. Labour Force Survey. Ministry of Health, Labour and Welfare. Employment Referrals for General Workers.

6

1. Economy trend

Wage indices (YoY)

-4.0

-2.0

0.0

2.0

4.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

賃金指数実質賃金指数Wage index Real wage index

Source ︓Ministry of Health, Labour and Welfare. Monthly Labour Survey.Note ︓Wage Indices are indexed total cash earnings of establishments with 5 employees or more, total type of employment and total industries covered. Real wage indices is calculated by dividing the wage indices by CPI (all items. Less imputed rent).

7

1. Economy trend

CPI and private house rent (YoY)

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

民営家賃消費者物価指数Private house rent CPI

Source ︓Ministry of Internal Affairs and Communications. CPI Annual Change.Note ︓CPI Annual Change means the Annual Change of the Total Index of all items, less food (less alcoholic beverages) and energy.

8

1. Economy trend

Wag

e (Yo

Y)

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5%

Coefficient of correlation 0.86

CPI (

YoY)

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

Coefficient of correlation 0.88

Correlation with private house rent

Correlation between private house rent and CPI Correlation between private house rent and wage

Private house rent (YoY) Private house rent (YoY)

Source ︓ Ministry of Internal Affairs and Communications. CPI Annual Change. Ministry of Health, Labour and Welfare. Basic Survey on Wage Structure. Bank of Japan. Monthly Report of Recent Economic and Financial Developments. Ministry of land, Infrastructure, Transport and Tourism. Statistics for the Construction of New Building.

Note ︓The above graphs are prepared based on the data from 1971 to 2017. However, the graph of correlation between wage annual change is prepared based on the available data from 1989 to 2017.

9

2. Asset trend

Source ︓Ministry of Internal Affairs and Communications. Report on Population Movement based on the Basic Resident Register.Note ︓The net inflow of residents is calculated by subtracting the total number of residents moving out of the relevant city from the total number of residents moving into the relevant city.

Net inflow of residents into Tokyo 23 wards and major cities in Japan

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Sapporo city Sendai city Tokyo 23 wards Nagoya city Osaka city Fukuoka city

2014 2015 2016 2017(person)

10

2. Asset trend

Source ︓Ministry of Internal Affairs and Communications. Report on Population Movement based on the Basic Resident Register.Note ︓Residential population growth rate is calculated based on comparison with the previous fiscal year ended March 31. Methods for calculating statistics have been revised in 2006. The foreigners subject to the basic

resident registration law have been included in the statistics since 2013, but this analysis indicates the transition related to Japanese only.

Residents growth rate in Tokyo 23 wards and major cities in Japan(YoY)

Tokyo 23 wards Osaka city Nagoya city

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2007 2009 2011 2013 2015 2017

Tokyo pref.Tokyo 23 wards

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2007 2009 2011 2013 2015 2017

Osaka pref.Osaka city

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2007 2009 2011 2013 2015 2017

Aichi pref.Nagoya city

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2007 2009 2011 2013 2015 2017

Hokkaido pref.Sapporo city

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2007 2009 2011 2013 2015 2017

Miyagi pref.Sendai city

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2007 2009 2011 2013 2015 2017

Fukuoka pref.Fukuoka city

Sapporo city Sendai city Fukuoka city

11

2. Asset trend

Source ︓ National Institute of Population and Social Security Research. Population Projection for Japan (2017):Note ︓ Dependency Ratio is defined as the proportion of those aged under 15 and over 65 to all あthose between these ages. The results of projections according to the Medium-Fertility assumption with Middle-Mortality

assumption.

Population by age group

0%

10%

20%

30%

40%

50%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065

Over 65 y/o 15-64 y/o 0-14 y/o Dependency ratio(in thousands)

ProjectionActual

12

2. Asset trend

ProjectionActual

Source ︓ National Institute of Population and Social Security Research. Household Projection for Japan(January 2018).Note ︓ The data for the periods from 2015 to 2040 are projections.

Types of households

0

10,000

20,000

30,000

40,000

50,000

60,000

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

(in thousands)Single (actual) Single (projection: under 65 y/o(head of household)) Single (projection: 65 y/o and over (head of household))Small Family Others Total households

13

2. Asset trend

Source ︓ Ministry of Internal Affairs and Communications. Housing and Land Survey. Management and Coordination Agency. Housing Survey.Note 1 ︓ The percentage of rental apartments is calculated by dividing the number of principal households in rental apartments (non-wooden) by the number of principal households in Japan.Note 2 ︓ If a household is occupying an entire dwelling, the household is defined as a “principal household.” If two or more households are living together in a dwelling, the main household (such as the owner or principal

tenant) is defined as the “principal household.”

Principal households and households in rental apartments (non-wooden)

9%

12%

15%16%

18%19%

0%

5%

10%

15%

20%

25%

0

1,000

2,000

3,000

4,000

5,000

6,000

1988 1993 1998 2003 2008 2013

Principal households Rental apartments (non-wooden) Rental apartments (RHS)(Percentage of principal households)

(in ten thousands)

14

2. Asset trend

3216580000.0%

Source ︓ Ministry of Internal Affairs and Communications. 2013 Housing and Land Survey.Note ︓ Excluding vacant dwellings.

Housing stock in Japan

Total number of housing︓52,102,200 units

Rented︓36.5%

Owned︓63.5%

Private︓28.8%

Others︓7.8%

Apartments(non-wooden)︓19.6%

Others︓9.1%

Total number ofprivate rental apartments(non-wooden)︓ 9,945,800 units

Owned or Rented Ownership Type and Structure

15

2. Asset trend

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

0～19㎡ 20～29㎡ 30～39㎡ 40～49㎡ 50～59㎡ 60～69㎡ 70～79㎡ 80～89㎡ 90～99㎡ 100～119㎡ 120～149㎡ 150㎡～

持家民営借家(in thousands)

Source ︓ Ministry of Internal Affairs and Communications. 2013 Housing and Land Survey. Note ︓“Floor space” means the aggregate floor space of the property. “Household” is a group of people who share a home and finances, a single person, single people who share a home but not finances, or a single person who lives in a dormitory or

boarding house.

Households in owner-occupied housing and private rental housing by floor space

Households in owner-occupied housing

Households in private rental housing

16

2. Asset trend

Source ︓ Ministry of Internal Affairs and Communications. 2013 Housing and Land Survey.Note ︓ Numbers of rental homes (non-Wooden) by floor space does not include vacant houses.

Households in rental apartments (non-wooden) by person and floor space

7,018,200units 6,154,600

households

2,927,600units 3,791,200

households

1 person

2 or more persons

49m² or less

50m² or more

Households by person

(9,945,800 households)

Rental apartments by floor space

(9,945,800 units)

860 thousand households of 2 or more persons

dwelling in rental apartments of 49m2 or less.

55m2 is urban residential standards for 2 persons,

which is suggested by MLIT.

17

2. Asset trend

Source ︓ Ministry of Internal Affairs and Communications. Housing and Land Survey. Note ︓ The age group of a household is determined by the age of the head of the relevant household.

House ownership rate by age group

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1968 1973 1978 1983 1988 1993 1998 2003 2008 2013

60歳以上

50～59歳

40～49歳

30～39歳

25～29歳

25歳未満

総数

60 y/o and over

50～59 y/o

40～49 y/o

30～39 y/o

25～29 y/o

under 25 y/o

Total

18

2. Asset trend

Source ︓ Ministry of Internal Affairs and Communications. Housing and Land Survey.Note ︓ The age group of a household is determined by the age of the head of the relevant household.

Percentage of age group in owner-occupied households

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1968 1973 1978 1983 1988 1993 1998 2003 2008 2013

60歳以上

50～59歳

40～49歳

30～39歳

25～29歳

25歳未満

60 y/o and over

50～59 y/o

40～49 y/o

30～39 y/o

25～29 y/o

under 25 y/o

19

2. Asset trend

Source ︓ Ministry of land, Infrastructure, Transport and Tourism. Statistics for the Construction of New Housing.Note ︓ The total number for each year includes reinforced concrete and steel reinforced concrete buildings.

Construction of rental apartments

384

329 320

190207

246 249232

273

223

189 181 183 177 184 183 188

223248

175163

105 100 100117

129 126 118130 131

0

50

100

150

200

250

300

350

400

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

(in thousands)

20

2. Asset trend

618622612

544572

644

711671

784

613

541586

573505

479493

506488494

437432374

414421430485

407404423419

0

100

200

300

400

500

600

700

800

900

1988 1992 1996 2000 2004 2008 2012 2016

(in thousands)

Source ︓ Ministry of land, Infrastructure, Transport and Tourism. Statistics for the Construction of New Housing.Note ︓ The total number of condominium for each year includes reinforced concrete and steel reinforced concrete buildings. The total number of detached house for each year includes wooden, concrete, steel, reinforced

concrete and steel reinforced concrete buildings.

Construction of condos and detached houses

Condos Detached houses

162 172

233

185

111

130

218 202

192 205

170 180

213 211 201

196 199

226 236

167 178

76 89

115 122

127

109 113 113

112

0

50

100

150

200

250

1988 1992 1996 2000 2004 2008 2012 2016

(in thousands)

21

2. Asset trend

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Analysis ︓ TAS Corp.Source ︓ At Home Co, Ltd.

Percentage of room type of newly built housings in Tokyo 23 wards

2 or more rooms

1 room

Single room 1K 1DK 1LDK 2K 2DK 2LDK 3DK 3LDK

22

2. Asset trend

Analysis ︓ TAS Corp.Source ︓ At Home Co, Ltd.Note ︓ Tokyo and Three Prefectures means Tokyo prefecture, Kanagawa prefecture, Saitama prefecture and Chiba prefecture.

Construction of newly built housings by room type in Tokyo metropolitan area

(units)

0

50,000

100,000

150,000

200,000

250,000

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Single room 1K 1DK 1LDK 2K 2DK 2LDK 3DK 3LDK

23

2. Asset trend

Source ︓ Ministry of land, Infrastructure, Transport and Tourism. Statistics for the Construction of New Housing. Ministry of Internal Affairs and Communications. Report on Population Movement based on the Basic Resident Register.Note ︓ The total number for each year includes concrete, steel, reinforced concrete and steel reinforced concrete buildings. The net inflow of residents is calculated by subtracting the total number of residents moving out of the

relevant city from the total number of residents moving into the relevant city.

Construction of rental apartments and net inflow of residents into Tokyo 23 wards and major cities in Japan

-5,000

0

5,000

10,000

15,00020

0720

0820

0920

1020

1120

1220

1320

1420

1520

1620

17

0

5,000

10,000

15,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

0

20,000

40,000

60,000

80,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

-5,000

0

5,000

10,000

15,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

0

5,000

10,000

15,000

20,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

0

5,000

10,000

15,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Tokyo 23 wards Osaka city Nagoya city

Sapporo city Sendai city Fukuoka city

(units or persons)

Construction of rental apartments Net inflow of residents(units or persons)

(units or persons)

(units or persons)

(units or persons)

(units or persons)

24

2. Asset trend

Source ︓ Construction Research Institute. Construction Cost Index.Note ︓ Construction cost (net construction cost + field expenses(field management cost)) related to condominium by type of structure are indexed, 2005 as base year.

Construction cost indices (Tokyo)

90.0

95.0

100.0

105.0

110.0

115.0

120.0

Jul-2

005

Nov-

2005

Mar

-200

6Ju

l-200

6No

v-20

06M

ar-2

007

Jul-2

007

Nov-

2007

Mar

-200

8Ju

l-200

8No

v-20

08M

ar-2

009

Jul-2

009

Nov-

2009

Mar

-201

0Ju

l-201

0No

v-20

10M

ar-2

011

Jul-2

011

Nov-

2011

Mar

-201

2Ju

l-201

2No

v-20

12M

ar-2

013

Jul-2

013

Nov-

2013

Mar

-201

4Ju

l-201

4No

v-20

14M

ar-2

015

Jul-2

015

Nov-

2015

Mar

-201

6Ju

l-201

6No

v-20

16M

ar-2

017

Jul-2

017

Nov-

2017

Condominium (SRC) Condominium (RC) Condominium (S)

25

2. Asset trend

Source ︓ Ministry of land, Infrastructure, Transport and Tourism. Statistics for the Construction of New Housing.Note ︓ The total number of rental apartment (RC and SRC) for each year includes reinforced concrete and steel reinforced concrete buildings. The total number of rental apartment (wooden and steel) for each year includes

wooden and steel buildings.

Construction of rental housings in Tokyo metropolitan area

05,000

10,00015,00020,00025,00030,00035,000

2011 2012 2013 2014 2015 2016 20170

5,000

10,000

15,000

20,000

25,000

30,000

2011 2012 2013 2014 2015 2016 2017

0

5,000

10,000

15,000

20,000

2011 2012 2013 2014 2015 2016 20170

5,000

10,000

15,000

2011 2012 2013 2014 2015 2016 2017

Tokyo pref Kanagawa pref

Saitama pref Chiba pref

Rental apartments (RC and SRC) Rental apartments (wooden and steel)

(units)

(units)

(units)

(units)

26

2. Asset trend

Total Single type(18㎡～30㎡)

Compact type(30㎡～60㎡)

Family type(60㎡～100㎡)

Source ︓ Sumitomo Mitsui Trust Research Institute Co., ltd. and At Home Co., Ltd.. Apartment Rent Index.

Rent of rental apartments by area and room type

Tokyo 23 wards Nagoya city

Osaka city Fukuoka city

75

100

125

2009.Q1 2011.Q1 2013.Q1 2015.Q1 2017.Q175

100

125

2009.Q1 2011.Q1 2013.Q1 2015.Q1 2017.Q1

75

100

125

2009.Q1 2011.Q1 2013.Q1 2015.Q1 2017.Q175

100

125

2009.Q1 2011.Q1 2013.Q1 2015.Q1 2017.Q1

27

2. Asset trend

80.0%

85.0%

90.0%

95.0%

100.0%

105.0% Tokyo Central 3 wards Tokyo 23 wards Nagoya

Source ︓ ARES. J-REIT Property Database (Former AJPI Service)Note ︓ [Associate decision level (May 2017), preliminary figure (after June 2017)], which may vary from finalized figures that are scheduled to be released in the future. Tokyo central 3 wards include Chiyoda-ku, Chuo-ku

and Minato-ku.

Occupancy rate of rental apartments operated by J-REITs

Associate Decision Leveland Preliminary Figure

28

2. Asset trend

0.00

1.00

2.00

3.00

4.00

5.00

6.00 Tokyo Central 3 wards Tokyo 23 wards Nagoya(¥1,000/m2)

Source ︓ ARES. J-REIT Property Database (Former AJPI Service)Note ︓ [Associate decision level (May 2017), preliminary figure (after June 2017)], which may vary from finalized figures that are scheduled to be released in the future. Tokyo central 3 wards include Chiyoda-ku, Chuo-ku

and Minato-ku.

Rent of rental apartments operated by J-REITs

Associate Decision Leveland Preliminary Figure

29

2. Asset trend

Source ︓ Japan Real Estate Institute. Urban Land Price Index and Wooden Frame House Market Value Index.Note ︓ The average index of six large city areas: Tokyo 23 wards, Yokohama city, Nagoya city, Kyoto city, Osaka city and Kobe city are indicated.

Urban land price indices of commercial and residential in six major cities in Japan (YoY)

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

Sep-2007 Sep-2008 Sep-2009 Sep-2010 Sep-2011 Sep-2012 Sep-2013 Sep-2014 Sep-2015 Sep-2016 Sep-2017

Commercial Residential（%）

30

2. Asset trend

Source ︓ Land Price Research Division, Land Economy and Construction and Engineering Industry Bureau, Ministry of Land, Infrastructure, Transport and Tourism. Yearly volatility of public notice of land prices.

Public notice of land prices in residential area

-10.0

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Tokyo area Osaka area Nagoya area Average of three areas（%）

31

2. Asset trend

Source ︓ Bank of Japan. Corporate Service Price Index. Ministry of Internal Affairs and Communications. Consumer Price Index.Note ︓ The residential rent figures are from the Consumer Price Index; the office, retail and hotel rent figures are from the Corporate Service Price Index. The rent levels for 1990 are given a value of 100 for comparison

purposes.

Rent levels by property type

70

80

90

100

110

120

130

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Residential Office Retail Hotel

32

3. Capital trend

Investors’ expected cap rate of rental apartment (standard studio)

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%東京（城南地区）大阪名古屋福岡札幌Tokyo (Jonan area) Osaka city Nagoya city Fukuoka city Sapporo city

Source ︓ Japan Real Estate Institute. The Japanese Real Estate Investor Survey.

33

3. Capital trend

Appraisal cap rates at the acquisition of rental apartments by J-REITs

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17

Source ︓ Prepared by Kenedix Real Estate Fund Management, Inc. based on Publication Documents of J-REITs.Note ︓ The pink line indicates an approximate curve of degree 5. Appraisal cap rates are yields utilized in appraisals at acquisitions.

34

3. Capital trend

Residential Others

0

100

200

300

400

500

600

700

800

900

1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

(in billions of yen)

Amount of asset acquired by J-REITs

2001 2002 2003 2004 2005 2006 2011 2012 2013 2014 2015 2016 20172007 2008 2009 2010

Source ︓ Prepared by Kenedix Real Estate Fund Management, Inc. based on Publication Documents of J-REITs.

35

3. Capital trend

-40

-30

-20

-10

0

10

20

30

40 不動産業（大企業）不動産業（中堅企業）不動産業（中小企業）不動産業（全規模合計）

Lending attitude of financial institutions (Diffusion index of “Accommodative” minus “Severe”)

Real estate industry(large companies)

Real estate industry(midsize companies)

Real estate industry(small-midsize companies)

Real estate industry(all company)

Source ︓ Research and Statistics Department, Bank of Japan. List of TANKAN (Figures by Industry).

36

3. Capital trend

New loans for fixed investment to real estate sector by domestic banks

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

(in billions of yen)

Source ︓ Research and Statistics Department, Bank of Japan. New Loans for Fixed Investment by Sector.Note: ︓ The new loans for fixed investment for real estate sector by domestic banks (total amount of banking accounts, trust banking accounts and overseas office accounts) is described.

37

3. Capital trend

JBA Japanese yen TIBOR

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

0.40%全銀協日本円TIBOR（1MONTH）全銀協日本円TIBOR（3MONTH）JBA Japanese yen TIBOR (1 month) JBA Japanese yen TIBOR (3 month)

Source ︓ bloomberg

38

3. Capital trend

10-year JGB interest rate

-0.40%

-0.20%

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%10年国債利回り10-year JGB interest rate


39

3. Capital trend

Yield spread

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Jan-2013 Jan-2014 Jan-2015 Jan-2016 Jan-2017

東証REIT指数配当利回り 10年国債利回りイールドギャップTSE REIT Dividend Yield JGB 10 Yield Yield Gap


40

3. Capital trend

0

1,000

2,000

3,000

4,000

5,000

6,000

Dec-

2010

Mar

-201

1Ju

n-20

11Se

p-20

11De

c-20

11M

ar-2

012

Jun-

2012

Sep-

2012

Dec-

2012

Mar

-201

3Ju

n-20

13Se

p-20

13De

c-20

13M

ar-2

014

Jun-

2014

Sep-

2014

Dec-

2014

Mar

-201

5Ju

n-20

15Se

p-20

15De

c-20

15M

ar-2

016

Jun-

2016

Sep-

2016

Dec-

2016

Mar

-201

7Ju

n-20

17Se

p-20

17De

c-20

17M

ar-2

018

Jun-

2018

Sep-

2018

Dec-

2018

買入額累計買入枠(in hundred millions of yen)

Buying J-REITs by Bank of Japan

Total Buying budget

The Bank will purchase J-REITs at annual pace of

about 90 billion yen.

October 31, 2014Monetary Policy Meeting

Source ︓ Financial Markets Department, Bank of Japan. Purchases of ETFs and J-REITs.

41

4. Healthcare facility trend

02,0004,000 02,0004,000

Population pyramid

0 2,000 4,000 0 2,000 4,000

2015 (Actual) 2045 (Estimate)100 y/o over

95-99 y/o90-94 y/o85-89 y/o80-84 y/o75-79 y/o70-74 y/o65-69 y/o60-64 y/o55-59 y/o50-54 y/o45-49 y/o40-44 y/o35-39 y/o30-34 y/o25-29 y/o20-24 y/o14-19 y/o10-14 y/o5-9 y/o0-4 y/o

100 y/o over95-99 y/o90-94 y/o85-89 y/o80-84 y/o75-79 y/o70-74 y/o65-69 y/o60-64 y/o55-59 y/o50-54 y/o45-49 y/o40-44 y/o35-39 y/o30-34 y/o25-29 y/o20-24 y/o14-19 y/o10-14 y/o5-9 y/o0-4 y/o

Male Female

Source ︓ National Institute of Population and Social Security Research. Population Projection for Japan (2017).

42


58.00

65.32

69.31

73.35 75.92

77.72 79.55

80.75 81.34 82.39 83.27 84.02 84.66 84.95

61.50

70.19

74.66

78.76

81.90 84.60

86.30 86.99 87.64 88.72 89.63 90.40 91.06 91.35

55

60

65

70

75

80

85

90

95

1950 1960 1970 1980 1990 2000 2010 2015 2020 2030 2040 2050 2060 2065

男女

ProjectionActual

Source : Ministry of Health, Labour and Welfare. Abridged life table (for 1950). Ministry of Health, Labour and Welfare. Complete life table (for 1960 - 2015). The median projections of National Institute of Population and Social Security Research Population Projection for Japan (2017) (for after 2020)

Note ︓The figures before 1970 exclude the figure of Okinawa Prefecture. The average rest of life in 0 years old is average life expectancy.

Trend and projection in average life expectancy

(year) Male Female

43


Source : National Institute of Population and Social Security Research. Household Projection for Japan: 2010-2035 (January 2018)Note ︓The data for the periods from 2015 to 2040 are projections.

One-person households which householder is over 65 years old

6,253

7,025 7,512

7,959 8,418

8,963

0

2,000

4,000

6,000

8,000

10,000

2015 2020 2025 2030 2035 2040

(in thousands)

44


Elderly population in each prefecture

0%

50%

100%

150%

200%

0

1,000

2,000

3,000

4,000高齢者人口（2010年）高齢者人口（2035年）増加率(in thousands)

Source : National Institute of Population and Social Security Research. Population Projection for Japan by region (March 2013)Note ︓Elderly people indicate 65 years old and over.

Elderly population (2010) Elderly population (2035) Growth rate

TokyoKanagawaOsakaSaitam

aAichiChibaHokkaidoHyogoFukuokaShizuokaIbarakiHiroshim

aKyotoNiigataM

iyagiNaganoFukushim

aGifuGunm

aTochigiOkayam

aKum

amoto

Mie

Kagoshima

NagasakiEhim

eYam

aguchiNaraShigaAom

oriOkinawaIwateOitaIshikawaM

iyazakiYam

agataAkitaToyam

aKagawaW

akayama

Yamanashi

SagaFukuiTokushim

aKochiShim

aneTottori

45


Facilities and capacity in fee-based homes

4,144 4,640

7,519 8,502

9,632 10,651

12,570

196 216

315 351

391 425

483

0

100

200

300

400

500

0

5,000

10,000

15,000

2010 2011 2012 2013 2014 2015 2016

施設数定員（右軸）(facilities) (in thousands)

Source : Ministry of Health, Labour and Welfare. Survey of Social Welfare InstitutionsNote : Serviced housings for the elderly aren’t included in fee-based homes.

Facilities Capacity (RHS)

46


112

2,772

4,205

5,160

5,885 6,463

6,877

3

89

135

166

192

211 225

0

100

200

0

5,000

10,000

Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17

棟数戸数（右軸）

Source : Senior Housing Promotion Organization. System of providing information about serviced housing for the elderly

Registration situation in serviced housing for the elderly

（in thousands)Facilities Units (RHS)(facilities)

47

5. Hotel trend

出所 ︓UNWTO「Tourism Highlights, 2016 Edition」

International tourist arrivals

0

250

500

750

1,000

1,250

1,500

1,750

2,000

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

中東アフリカ米州アジア・太平洋ヨーロッパAsia and Oceania

ProjectionActual

(in millions) Middle East Africa Americas Europa

48

5. Hotel trend

Inbound visitors

5,212 6,138 6,728 7,334 8,347 8,351

6,790 8,611

6,219 8,358

10,364

13,413

19,737

24,040

28,691

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

(in thousands)

Source ︓Japan National Tourism Organization(JNTO). Visitor Arrivals.Note ︓The figure of December 2017 is a preliminary figure.

49

5. Hotel trend

Growth rate of inbound visitors (YoY)

(500)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%訪日外国人数（右軸）増加率（アジア・オセアニア）増加率（ヨーロッパ）増加率（北米）増加率（総数） (in thousands)Inbound visitors(RHS)

Growth rate of Asia and Oceania

Growth rete of Europa

Growth rate of North America Total growth rate

Source ︓Japan National Tourism Organization(JNTO). Visitor Arrivals.Note ︓The figures after December 2017 is preliminary figures.

50

5. Hotel trend

Growth rate of inbound visitors and inbound guests (YoY)

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%訪日外国人数外国人延べ宿泊者数

Source ︓Japan National Tourism Organization(JNTO). Visitor Arrivals. Japan Tourism Agency, Ministry of Land, Infrastructure, Transport and Tourism. Accommodation Travel Statistics Survey.Note ︓The figures of growth rate of inbound visitors after December 2017 and the Growth rate of inbound guests after January are preliminary figures.

Growth rate of inbound visitors Growth rate of inbound guests

51

5. Hotel trend

Occupancy rate of hotels

0

20

40

60

80

100 ビジネスホテルリゾートホテルシティホテル（％） Business hotel Resort hotel City hotel

Source ︓Japan Tourism Agency, Ministry of Land, Infrastructure, Transport and Tourism. Accommodation Travel Statistics Survey.Note ︓”Business hotel” mainly refers to the facilities targeting business travelers, “Resort hotel” mainly refers to the facilities located in resort areas or recreation areas targeting travelers and “City hotel” refers to the facilities located in urban areas

other than those mentioned above. The figures after January 2017 is preliminary figures.

52

5. Hotel trend

Charge of hotels

12,000

14,000

16,000

18,000

20,000

22,000平日休前日(yen)

Source ︓Ministry of Internal Affairs and Communications. Retail Price Survey.Note ︓The charge of overnight, with breakfast and western-style room is stated.

Business day The day before holiday

53

5. Hotel trend

Guests in domestic accommodations

28 18 26 33 45 66 69 78

386 399 413 432 429 438 423 420

6.7%

4.4%6.0%

7.2%

9.5%

13.0%14.1%

15.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015 2016 2017

延べ日本人宿泊者数延べ外国人宿泊者数外国人宿泊者比率（右軸）(in millions)

2010 2011 2012 2013 2014 2015 2016 2017

Source ︓Japan Tourism Agency, Ministry of Land, Infrastructure, Transport and Tourism. Accommodation Travel Statistics Survey.Note ︓The figures after January 2017 is preliminary figures.

Number of Japanese guests Number of inbound guests % of inbound guests (RHS)

54

5. Hotel trend

Facilities and rooms in hotels/ryokans

56,616 56,059 54,540 53,172 51,778 50,628 49,590

1,568 1,576 1,556 1,562 1,545 1,548 1,562

0

500

1,000

1,500

2,000

0

20,000

40,000

60,000

80,000

2010 2011 2012 2013 2014 2015 2016

ホテル・旅館施設数ホテル・旅館客室数（右軸）(facilities) (rooms)

Source ︓Ministry of Health, Labour and Welfare. Public health Administration Report.

Number of facilities Number of rooms (RHS)