Green Finance
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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 (Note 1): 3 stars and above
- II. BELS (Note 2): (Based on FY2016) 3 stars and above
(Based on FY2024) non-residential: Level 4 or above residential: Level 3 or above - III. CASBEE for Real Estate, CASBEE for Buildings (Note 3)(Note 4): B+ rank or higher
※ Except for cases in which BEI=0.75 exceeds at plants, etc., including logistics centers.
Eligible criteria B:
The renovation works that meet one out of the following three requirements.
- I. Renovation work intended to reduce CO2 emissions by more than 30%
- II. Renovation work intended to reduce energy consumption by more than 30%
- III. Renovation work intended to reduce water consumption by more than 30%
- 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
| (Note 1) | “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. |
|---|---|
| (Note 2) | BELS (Building-Housing Energy-efficiency Labeling System) is an evaluation system conducted by a third-party organization based on guidelines established by the Ministry of Land, Infrastructure, Transport and Tourism. It evaluates and displays energy-saving performance based on the primary energy consumption of buildings. Until March 2024, evaluations were conducted in five ranks (one-star to five-stars) (based on FY2016). Since April 2024, evaluations have been conducted in seven ranks (0 to six-stars) for houses with energy-saving facilities and non-houses (based on FY2024). |
| (Note 3) | "CASBEE(Comprehensive Assessment System for Built Environment Efficiency）for Real Estate" is a system that evaluates the environmental performance of a building and assigns a rating (Rank B to Rank S) on a four stages. It is a system that comprehensively evaluates the environmental performance of a building, including consideration for the landscape, in addition to the environmental impact reduction aspects such as energy conservation, resource conservation, and recycling performance. |
| (Note 4) | "CASBEE for Building" is a methodology that evaluates the buildings on a five stages (rank C to S) based on the scores of Q (building's environmental quality/performance) and LR (building's environmental impact reduction). |
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(Note) 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.
| The total book value of assets that meet eligible criteria A (A) | 111,164 million yen |
|---|---|
| LTV (B) (Note) | 48.3％ |
| The total expense of the renovation works that meet eligible criteria B (C) | 172 million yen |
| Green eligible liabilities（The upper limit amount for green finance）(A×B＋C) | 53,865 million yen |
| Balance of funds procured through green finance | 2,000 million yen |
| (Note) | LTV is calculated as follow LTV = total interest bearing debt ÷ total assets |
|---|
Eligible criteria
■Criteria A
| Property No. | Property Name | DBJ Green Building Certification |
BELS Certification |
Certification for CASBEE for Real Estate |
Book value (million yen) （As of December 31, 2024) |
|---|---|---|---|---|---|
| A-4 | FORECAST Shinjuku AVENUE | A | 6,031 | ||
| A-5 | FORECAST Ichigaya | S | 4,184 | ||
| A-7 | FORECAST Shinjuku SOUTH | S | 14,398 | ||
| A-8 | FORECAST Sakurabashi | ★★★ | A | 6,140 | |
| A-17 | Shibakoen Sanchome Building | A | 7,293 | ||
| A-24 | Pigeon Building | ★★★ | 2,928 | ||
| A-28 | Nishi-Shinjuku Sanko Building | ★★★★★ | 2,358 | ||
| A-31 | Nishi-Gotanda 8-chome Building | ★★★ | 2,250 | ||
| A-32 | Towa Higashi-Gotanda Building | ★★★★ | 2,025 | ||
| A-33 | FORECAST Takadanobaba | ★★★★ | S | 5,793 | |
| A-41 | I・S Minamimorimachi Building | ★★★ | S | 2,284 | |
| A-46 | La Verite AKASAKA | ★★★★★ | 2,107 | ||
| A-49 | FORECAST Kayabacho | ★★★★ | 3,142 | ||
| A-50 | FORECAST Waseda FIRST | A | 4,764 | ||
| A-51 | FORECAST Gotanda WEST | ★★★ | S | 7,562 | |
| A-52 | Omiya Center Building | S | 15,485 | ||
| A-53 | Sumitomo Mitsui Bank Koraibashi Building | S | 2,878 | ||
| A-56 | Homat Horizon Building | S | 6,622 | ||
| A-67 | FORECAST Kameido | ★★★ | 2,555 | ||
| B-1 | Tower Court Kitashinagawa | ★★★★★ | 10,356 | ||
| Total | 111,164 | ||||
(Total of 20 properties)
■Criteria B
| Property No. | Property Name / Construction name | Construction completion date | Construction cost (million yen) |
|---|---|---|---|
| A-28 | Nishi-Shinjuku Sanko Building ZEB renovation | December 19, 2021 | 172 |
| Total | 172 | ||
Reporting
NIPPON REIT's allocation of proceeds as to green finance is as follows.
| Total amount of outstanding green bonds | 3,300 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 ・FORECAST Takadanobaba |
| NIPPON REIT 6th unsecured bonds (with pari passu conditions among specified investment corporation bonds) (Green bonds) |
1,300 | 1.346％ | April 23, 2025 | April 23, 2030 | Unsecured Unguaranteed |
Appropriate to part of the repayment funds of the borrowings procured as the acquisition funds for the following two properties ・FORECAST Shinjuku AVENUE ・FORECAST Ichigaya |
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/