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Q&A

Q. Why invest in residential properties?

A. Because we regard them as being an investment target with relatively low risk

Kenedix Residential Investment Corporation (KDR) regards residential properties - rental housing being a representative example - as being an investment target with relatively low risk, in light of rent fluctuations being small and tenants also being diverse compared to real estate of other uses as well as the size per property also being small and thus making risk diversification more likely. KDR aims to achieve the securing of stable rental revenues and the steady growth of its asset size, while drawing on the characteristics of rental housing and other residential properties. (Click here for details

Q. How will the securing of stable rental revenues and steady growth of asset size be achieved?

A. "Leverage the keen, prudent perspective of KDR," "efficient revenue management" and "challenging new approaches"

KDR will conduct investment and management based on three basic strategies: "steady external growth by applying our discerning eye," "efficient revenue management" and "challenging new approaches." Through "flexible" and "dynamic" real estate investment and management, KDR aims to achieve the securing of stable rental revenue and steady growth of asset size while drawing on the characteristics of rental housing and other residential properties, and to maximize unitholder returns. (Click here for details

Q. How do you analyze the regional rental housing market?

A. We believe a stable supply-demand balance can be expected from rental housing

KDR believes that, even in regions other than the Tokyo Metropolitan Area, stable supply-demand balance can be expected from rental housing, etc. and that there is a lot of real estate that is attractive as an investment target. (Click here for details)

Q. What type of company is the sponsor?

A. Kenedix, Inc. is an independent real estate management company

The sponsor of KDR's asset manager, Kenedix, Inc., as an independent real estate management company, engages in the arrangement and management of real estate investment funds as its core business. While many companies in the same industry failed and were forced to withdraw in past financial crises, the Kenedix Group managed to steadily increase its balance of assets under management (AUM) from 19.0 billion yen at the end of the fiscal year ended December 31, 2000 (Note 1) to 1,097.9 billion yen at the end of the fiscal year ended December 31, 2010 (Note 1) and engage in the management of real estate investment funds for institutional investors, pension funds and many other investors inside and outside of Japan. In addition, as a result of having engaged in the management of private funds, etc., where the assets managed are rental housing in Japan, for over ten years, the balance of rental housing AUM reached 212.8 billion yen as of September 31, 2011 (Note 2). (Click here for details

Notes:
1. Kenedix, Inc. calculates the balance of AUM as of December 31 every year based on the following standards:

  • AUM includes real estate related assets for which the Kenedix Group is entrusted with asset management services, but excludes yet-to-be-completed development projects.
  • AUM is calculated using the acquisition price (net of taxes) at the time of acquisition. Expenses associated with the acquisition, value-add expenses (capital expenditures for raising property value), etc. are not included even if such comprise the book value in accounting. The amount is rounded down to the nearest hundred million yen.
  • AUM includes real estate related assets that the Kenedix Group temporarily acquires with its own accounts and for which it conducts asset management services. In addition, AUM also includes real estate related assets held by Kenedix Realty Investment Corporation and Japan Logistics Fund, Inc.

2. Calculated based on acquisition price (refers only to the purchase price at real estate acquisition; excludes taxes, acquisition expenses, etc.).