NIPPON REIT Investment Corporation

Securities code:3296

JAPANESE

Green Finance

  1. Home
  2. ESG
  3. Green Finance

Green Finance

NIPPON REIT practices asset management taking into consideration Environment, Society and Governance (“ESG”). As a part of such initiatives, NIPPON REIT strives to realize a sustainable environment and society by implementation of green finance including green bonds and green loans etc..

Green finance framework

Use of proceeds from green finance

NIPPON REIT plans to use the funds procured through green finance as funds for the acquisition and refinancing of the funds for the asset conforming to “Eligible criteria A” and project conforming to “Eligible criteria B”. In terms of “Eligible criteria B”, renovation work that has been completed or will be completed within 3 years from the payment date of the green bond or the green loan are eligible.

Eligible criteria

Eligible criteria A:

Assets for which any of the following certifications from a third-party certification body (“green building certification”) has been or will be obtained

  • I. DBJ Green Building Certification (Note1): 3 Stars, 4 Stars or 5 Stars
  • II. BELS Certification (Note2): 3 Stars, 4 Stars or 5 Stars
  • III. Certification for CASBEE for Real Estate (Note3): B+ , A or S Rank

Eligible criteria B:

The renovation works that meet one out of the following three requirements.

  • I. Renovation work intended to reduce CO2 emissions by 30% or more
  • II. Renovation work intended to reduce energy consumption by 30% or more
  • III. Renovation work intended to reduce water consumption by 30% or more
  • IV. Renovation work intended to improve the number of stars or the grade/rank by one or more for any of the eligible green asset certifications
(Note1) “DBJ Green Building Certification” is a certification of buildings with environmental and social awareness (Green Building) implemented by Development Bank of Japan Inc. (“DBJ”) based on a five-grade evaluation system (1 to 5 stars) by using a comprehensive scoring model independently developed by DBJ.
(Note2) “BELS Certification” is a public evaluation system of energy saving capacity in non-residential structures of which evaluation criteria were determined by the Ministry of Land, Infrastructure and Transport and is expected to provide information regarding energy saving and promote further development of energy saving capacity in non-residential structures.
(Note3) “CASBEE (Comprehensive Assessment System for Built Environmental Efficiency)” is a method for evaluating and rating the environmental performance of buildings as well as a comprehensive evaluation system of the environmental performance of buildings including consideration to the surrounding landscape in addition to the aspects of environmental load reduction such as energy and resource saving and recycling performance.

Process for project evaluation and selection

The projects that meet eligible criteria (“eligible green project”) are decided by the “Sustainability Committee” of the Asset Management Company, which is comprised of the President and CEO, the Senior General Manager of Investment Management Division and the Senior General Manager of Finance & Planning Division etc., under discussion about evaluation of eligible green project, use of the fund and eligibility for the criteria.

Management of proceeds

The total of the amount obtained by multiplying the total book value of assets that meet eligible criteria A as of end of the latest fiscal period by the LTV (Note1) as of end of the latest fiscal period and the amount of the total assumed expense of the renovation work that meet eligible criteria B will be set as the upper limit amount for green finance.

As of June 30, 2021.

total of green eligible assets (Note2) 47,263 million yen
LTV (Note1) 48.0%
Renovation work cost -
Green eligible liabilities (Note2) 22,686 million yen
Procured funds -
(Note1) LTV is calculated as follow
LTV = total interest bearing debt ÷ total assets
(Note2) Figure is truncated to the relevant unit.

Reporting

NIPPON REIT's allocation of proceeds as to green finance is as follows.

As of August 31, 2021.

Total amount of outstanding green bonds 2,000 million yen
Amount of proceeds not yet allocated -
Name Total issue amout
(million yen)
Interest rate Issue date Redemption date Remarks Use of proceeds
NIPPON REIT
5th unsecured bonds
(with pari passu conditions among specified investment corporation bonds)
(Green bonds)
2,000 0.670% August 6, 2021. August 6, 2031. Unsecured
Unguaranteed
Appropriate to part of the repayment funds of the borrowings procured as the acquisition funds for the following three properties
・Pigeon Building
・Towa Higashi-Gotanda
・FORCAST Takadanobaba

External review

For eligibility of the green finance framework, NIPPON REIT has been assigned “Green 1 (F),” the highest evaluation grade in the JCR Green Finance Framework Evaluation by Japan Credit Rating Agency, Ltd. (“JCR”). For the content and other details of the JCR Green Finance Framework Evaluation, please refer to the following website.

JCR Green Finance Framework Evaluation:https://www.jcr.co.jp/en/greenfinance/

To Page Top