Sustainability-Linked Loans

JRE procured funds through sustainability-linked loans (“SLLs”) for the first time in the J-REIT in January 2021, and continues to procure funds through sustainability-linked loans as follows.

Sustainability-linked loans are loan instruments designed to support environmentally and socially sustainable economic activity and growth. Under this scheme, the borrower sets sustainability performance targets (“SPTs”) aligned with its business management strategy, and the lender provides incentives by adjusting loan terms based on the borrower’s performance against the predetermined SPTs.

The structure of SLLs requires periodic verification of progress toward the SPTs, and when the predetermined levels are achieved at each verification, an interest rate reduction is applied. For details on SPT achievement status and applicable interest rates, please see the link below.

Sustainability-Linked Loans Framework Overview

JRE has established a Sustainability-Linked Loan Framework for the purpose of flexible SLL implementation, and has been implementing Sustainability-Linked Loan financing based on this framework.

KPIs, SPTs, and Loan Features Under This Framework

The Framework sets the KPI, SPT and loan characteristic as follows.

Evaluation by External Organization

This framework compiles with the Sustainability-Linked Loan Principles (revised 2023) ("SLLP") established by the Asia Pacific Loan Market Association (APLMA), the Loan Market Association (LMA), and the Loan Syndications and Trading Association (LSTA), as well as the Green Loan and Sustainability-Linked Loan Guidelines (2022 edition) issued by the Ministry of the Environment of Japan.

JRE has obtained a third-party opinion from Japan Credit Rating Agency, Ltd. (JCR) confirming that this framework is in compliance with the SLLP and the Ministry of the Environment Guidelines’ provisions on “matters expected of sustainability linked loans.”
Please refer to here for details. (available in Japanese only)

Sustainability-Linked Loans Track Record

The cumulative amount of financing raised through sustainability-linked loans reached JPY 114.5 billion as of March 31, 2026.

* Please view the table below while scrolling horizontally.

Please refer to here for details on our Sustainability-Linked Loan records.

Green Finance Framework for Converting Conventional Buildings to Net Zero Energy

In March 2026, JRE established a green finance framework targeting Net Zero Energy Building (“ZEB”) retrofit construction costs, a first among J-REITs.
As part of its commitment to environmental sustainability, JRE has been working in collaboration with Mitsubishi Jisho Design Inc. (“MJD”) to actively pursue ZEB certification for its existing properties. Through the establishment of this framework, JRE aims to communicate its initiatives more broadly while continuing to promote the ZEB conversion of its existing building portfolio.

Green Finance Framework Overview

Use of Proceeds

JRE intends to allocate the funds raised under this framework to projects that meet the green eligibility criteria.

Green Eligibility Criteria

Projects will be selected^*1 from those that satisfy the following Green Eligibility Criteria:
Renovation costs for buildings aimed at obtaining ZEB certification ZEB certification^*2

• In collaboration with MJD, JRE selects properties for ZEB conversion and, following the required internal approval process at JRE Asset Management Co., Ltd. (JRE-AM), proceeds with the application and acquisition of ZEB certification. Construction plans that include ZEB-targeted properties are also brought before JRE-AM’s management committee for approval.
• Includes expenditures incurred within the past 36 months from the date of fundraising.

Financing Method

Green bonds or green loans

Management of Proceeds

The balance of funds raised and any unallocated proceeds will be monitored and managed on a fiscal period basis. Proceeds are intended for allocation to green projects: pending such allocation, unallocated amounts will be maintained in cash or cash-equivalent instruments.

Evaluation by External Organization

This Framework complies with the Green Bond Principles 2025 (GBP) published by the International Capital Market Association (ICMA), the Green Loan Principles 2025 (GLP) published by the Loan Market Association (LMA), and the Green Bond Guidelines 2024 and Green Loan Guidelines 2024 issued by the Ministry of the Environment of Japan.
JRE has obtained a third-party opinion from Japan Credit Rating Agency, Ltd. comfirming the eligibility of this Framework.
Please refer to here for details. (available in Japanese only)

Reporting

[1] Allocation Reporting
Until the full allocation of green finance proceeds raised under this framework to renovation works aimed at obtaining ZEB certification, JRE will publicly disclose the allocation status once a year on its website.

[2] Impact Reporting
For as long as the corresponding green finance remains outstanding, JRE will publish the following information once a year: the ZEB certification status of each asset to which proceeds have been allocated under this framework, the certification level, and an overview of each green project and its construction progress.

i. ZEB certification type and date of certification for certified properties

ii. Overview of green projects and construction progress
As of March 31, 2026, no proceeds have been allocated to any projects.

Green Bond Framework for Optimising Buildings Efficiency

JRE issues Green Bonds to further advance its sustainability initiatives. Through initiatives such as renovation projects financed by environmentally conscious ESG investments, we aim to reduce energy consumption, improve customer satisfaction, and obtain green building certifications, creating positive impact* in the process.
Thereby realize Positive Impact.^*

“Positive impact” refers to activities that generate environmental and social benefits while achieving market‑rate financial returns, as defined by the United Nations Environment Programme Finance Initiative (UNEP FI). For more information, please refer to the UNEP FI website.

Green Bond Framework

Use of Proceeds

The net proceeds of the green bonds issued under this framework will be allocated to finance or refinance the acquisition of Eligible Green Assets or related refurbishment works, in accordance with the eligibility criteria outlined below.

Eligible Green Projects

Eligible Green Projects must meet one or more of the following eligibility criteria. ^*

[1] Refurbishments

Refurbishments with a primary purpose of achieving one of the following criteria which have been completed within 36 months prior to the date of green bond issuance and/or will be completed in the near future;

• Refurbishments with more than 10% reduction in CO2 emissions or energy consumption
• Refurbishments with more than 10% reduction in water consumption
• More than one level of star/rank improvement in the green building certifications listed in [2]
• Refurbishment that contributes to the conservation and recovery of biodiversity, including of diversity of outdoor plants will also be considered if one or more of “a” through “c” criteria in [1] are met.
• Refurbishment that contributes to the local community by improving public open space connected to the buildings and renovating for accepting people who are temporarily unable to return home will also be considered if one or more of “a” through “c” criteria in [1] are met.
• Either one of the certifications/recertification listed in [2]

[2] Acquisition

Buildings that have achieved the following top three levels of third-party green building certification/recertification within 36 months prior to the date of green bond issuance and/or will achieve:

• 3, 4 or 5 Stars under the DBJ Green Building Certification
• 3, 4 or 5 Stars under BELS
• B+, A or S Rank under CASBEE

Eligible Green Projects are managed by the Sustainability Committee, which is composed of JRE-AM’s President and CEO (Chief Sustainability Officer), General Manager, Sustainability Management Department (Sustainability Officer), and the chiefs and practitioners of other departments. The Eligible Green Projects are evaluated and selected based on sustainability policies and relevant criteria and determined by the President, based on JRE-AM’s job responsibilities and authority.

Management of Proceeds

JRE internally tracks and manages the allocated and unallocated amounts of the proceeds using an internal management system. If the proceeds through green bonds are temporarily not allocated to Eligible Green Projects, JRE will manage the unallocated funds as cash or cash equivalents until they are allocated to Eligible Green Projects.

Evaluation by External Organization

JRE has obtained a second-party opinion from Sustainalytics, which confirms that this framework’s compliance with the four requirements of the Green Bond Principles^*.
Please refer to here for details.

The Green Bond Principles are guidelines for the issuance of green bonds established by the International Capital Market Association (ICMA).The four requirements under the Green Bond Principles refer to :
1)Use of Proceeds 2)Process for Project Evaluation and Selection 3)Management of Proceeds 4)Reporting

Please refer to here (ICMA website) for more information on the Green Bond Principles.

Reporting

[1] Allocation Reporting

JRE will annually disclose the allocation information of the net proceeds of green bonds as of end of March on its website until the proceeds have been fully allocated to the Eligible Green Projects. When the proceeds are allocated toward refinancing Eligible Green Projects, the allocation information includes 1) completion dates of projects (dates of certification/recertification achieved, and dates of refurbishments completed) and 2) portion of refinanced and financed projects.

[2] Impact Reporting

JRE will report the certification status, certification level, and the following indicators for each eligible green asset to which proceeds from the corresponding green bonds have been allocated. These disclosures will continue for as long as the relevant green bonds remain outstanding and will be provided annually.

• Energy consumption
• Water usage
• CO2 emissions

As for the Eligible Green Projects including refurbishments, as long as relevant green bonds are outstanding, the environmental impacts relevant to each project will be disclosed annually after the construction has been completed. In accordance with the criteria applied, JRE will indicate either an estimated % of reduction of energy consumption or water usage or CO2 emissions before and after refurbishment.

12th Investment Corporation Bonds (Japan Real Estate Green Bond)

[1] Allocation Reporting

* Please view the table below while scrolling horizontally.

• Date of refurbishments completed
• Date of DBJ Green Building Certification obtained

[2] Impact Reporting

* Please view the table below while scrolling horizontally.

As of March 31, 2023
	Progress of Certifications	Levels of Certifications	Energy Consumption*(MWh)	Water Usage* (m³)	CO2 Emissions* (t-CO2)
JRE Shiba 2Chome Daimon Building	Obtained		21,659	26,888	1,804
Akasaka Park Building	Obtained
JRE Shijo Karasuma Center Building	Obtained

From 1 April 2022 to 31 March 2023

(Example) Refurbishments of JRE Shiba 2Chome Daimon Building

Outline of refurbishments of JRE Shiba 2Chome Daimon Building

Refurbishments of JRE Shiba 2Chome Daimon Building apply to the Eligible Green Projects. Among the above eligibility criteria, “refurbishments with more than 10% reduction in CO2 emissions or energy consumption” and “3 Stars under the DBJ Green Building Certification” are met by this project. Additionally, as for DBJ Green Building Certification, our efforts which contributes to disaster prevention and BCP, as well as installing highly efficient air conditioning and LED lighting inside the building were highly evaluated.
Outline of refurbishment of JRE Shiba 2Chome Daimon Building is as follows.

Overview of the Refurbishment

Refurbishment work of JRE Shiba 2Chome Daimon Building has been planned based on the concept of Positive Impact advocated by the United Nations Environment Programme Finance Initiative (UNEP FI).

• Adopted highly efficient air-conditioning units and LED lights to reduce environmental load
• Enhanced convenience and security by replacing tenant doors and adopting card access security systems
• Switched to individually controlled air-conditioning and renovated rest rooms, etc., caring for tenant employees’ health and comfort
• Enhanced the property’s presence by innovating internal fittings of common areas to renew impression

Positive Impacts Achieved

We have achieved greater impacts than originally estimated as follows.

• 

  Energy▲44.3%

  (*Comparison of annual results for 2020 and 2017)

• 

  Water▲49.5%

  (*Comparison of annual results for 2020 and 2017)

• 

  CO2▲32.8%

  (*Comparison of annual results for 2020 and 2017)

• 

  Average rent per area increased by17.5％

  (*Comparison between 31 Mar. 2021 (unofficially confirmed basis) and 31 Mar. 2018 (actual results))

• 

  Approx.80％tenant satisfaction

  (*Regarding the office space, elevator hall and rest room after renovation)

Photos After Renovation