Sustainability Finance, Green Bonds

JEI promotes acquisition of assets that aim for environmental performance and solving social issues, and from a financing perspective, it also pursues initiatives to expand its base of investors who are proactive regarding ESG investment. As part of such efforts, JEI implements advanced procurement through sustainability finance and green bonds in financing related to the acquisition of Eligible Sustainability Projects, Eligible Green Projects, and others.

Sustainability Finance

Sustainability finance refers to debt or debt securities that an issuer procures to finance Eligible Sustainability Assets and are generally procured in accordance with the principles outlined by the International Capital Markets Association (ICMA).
JEI’s Sustainability Finance Framework has acquired the highest ranked “SU1 (F)” rating from the Japan Credit Rating Agency, Ltd. (JCR).
URL: https://www.jcr.co.jp/en/greenfinance/sustainability/

Sustainability Finance Framework

(1) Use of proceeds

Funds procured through sustainability finance shall be allocated as new funds to acquire the assets defined in (2) below (hereinafter the “Eligible Sustainability Projects”) and funds for the refinancing or redemption of existing debt or investment corporation bonds required for the acquisition of Eligible Sustainability Projects.

(2) Eligible Sustainability Projects

Eligible Sustainability Projects shall meet the following criteria and shall be selected at the sustainability council of Japan Excellent Asset Management Co., Ltd., the Asset Management Company of JEI.
- Properties that have received or are scheduled to receive one of the following certifications within the past three years from the procurement date or during the remaining term of sustainability finance:
  DBJ Green Building Certification: 5, 4, or 3 stars
  CASBEE Real Estate Certification: S, A, or B+ rank
  - Properties that maintain a certain level or higher of the following functions contributing to the resolution of social issues
  Regional disaster prevention
  Healthcare services
  Child-rearing support
  Consideration for the elderly and the disabled
  Socioeconomic advancement and empowerment, etc.

(3) Maximum amount of Sustainability Finance

The total period-end book value of Eligible Sustainability Projects in the most recent fiscal period multiplied by total assets-based LTV as of the end of the most recent fiscal period (hereinafter the “Debts of Eligible Sustainability Projects”) is set as the maximum amount of Sustainability Finance.

Reporting on Sustainability Finance

(1)Allocation reporting

JEI’s allocation of funds concerning sustainability finance is as follows.

As of August 18, 2021

Balance of Sustainability Finance 2,000 million yen
Lender Loan
Amount
(million yen)
Interest Rate Drawdown Date Principal
Repayment
Date
Borrowing
Period
Evaluation
(Evaluation organization)
Mizuho Bank, Ltd. 2,000 Base interest rate
(JBA one-month Yen-TIBOR) + 0.200%
September 30, 2020 September
30, 2022
2 years SU1
(Japan Credit Rating Agency (JCR))
Use of Proceeds Repayment of the Green Loan of 2,000 million yen that was borrowed as part of the funds to acquire AKASAKA INTERCITY AIR
Total Amount of Eligible Sustainability Projects 6,503 million yen
LTV 42.7 %
Debts of Eligible Sustainability Projects 2,777 million yen
  • These are finalized figures as of the most recent fiscal period.

List of Eligible Sustainability Projects

Property Name Book Value (million yen)
AKASAKA INTERCITY AIR 6,503
Total 6,503

(2)Reporting

Assessment Rank of Eligible Sustainability Projects

As of March 31, 2021

Eligible Sustainability Projects DBJ Green Building Certification CASBEE
AKASAKA INTERCITY AIR ★★★★★ -

Quantatative indicators of Eligible Sustainability Projects

Term The Number of Eligible Sustainability Projects Total Leasable Space
(㎡)
Electricity consumption(※)
(MW/h)
Water consumption(※)
(Thousand ㎥)
CO2 Emissions(※)
(t-CO2)
April 2020~ March 2021 1 2,580.24 254 1.4 241
  • Limited to the scope in which JEI has authority over energy control.
    These figures are for Eligible Sustainability Projects as of the end of March 2021.

Green Bonds

Green Bonds are a type of bond instrument an issuer issues to procure funds to finance its Green Projects (environmentally conscious investment and loan projects) and are generally issued in accordance with International Capital Market Association’s (ICMA) Green Bond Principles.

JEI has obtained a second-party opinion from Sustainalytics, an ESG rating agency, for the eligibility of its Green Bond Framework. For details of the second-party opinion, please refer to the following website.

Green Bond Framework

(1)Use of proceeds

The net proceeds from the Green Bond issuance will be used for acquisition of assets defined in (2) below (hereinafter “Eligible Green Projects”), repayment of borrowings required in the acquisition of Eligible Green Projects, or redemption of investment corporation bonds that have already been issued (including Green Bonds) required in the acquisition of Eligible Green Projects.

(2)Eligible Green Projects

Eligible Green Projects are assets that have received or are scheduled to receive one of the following certifications within the last 2 years as of the payment date upon issuance of Green Bonds among the specified assets owned by JEI (excluding, however, those corresponding to Eligible Sustainability Projects).

  1. DBJ Green Building Certification: 5, 4, or 3 stars
  2. CASBEE Certification: S, A, or B+ rank

Eligible Green Projects are selected by the sustainability council (a council composed of the President and other board members established to promote sustainability initiatives) of Japan Excellent Asset Management Co., Ltd., the Asset Management Company of JEI.

(3)Maximum amount of Green Bonds

Debts of Eligible Green Projects calculated by multiplying the total period-end book value of Eligible Green Projects in the most recent fiscal period by total assets-based LTV as of the end of the most recent fiscal period is set as the maximum issuance amount of Green Bonds.

Reporting Concerning Green Bonds

(1)Allocation reporting

The allocation report about JEI Green Bonds is as follows.

As of August 18, 2021

Total Amount of Outstanding Green Bonds 9,000 million yen
Name Amount of Green Bond
to be issued
(million yen)
Interest
Rate
Issuance date Redemption date Term of
Issuance
No.14 Unsecured Investment Corporate Bonds
(JEI Green Bonds)
4,000 0.63% August 10, 2018 August 10, 2028 10years
No.16 Unsecured Investment Corporate Bonds
(No.2 JEI Green Bonds)
5,000 0.75% October 29, 2020 October 29, 2035 15years
Total Eligible Green Projects 151,609 million yen
LTV 42.7 %
Debts of Eligible Green Projects 64,737 million yen
  • These are finalized figures as of the most recent fiscal period.

List of Eligible Projects

Property Name Book Value (million yen)
AKASAKA INTERCITY 26,603
HAMARIKYU INTERCITY 17,030
Nisseki Yokohama Building 22,426
Mansard Daikanyama 11,170
Omori Bellport D 20,653
Kowa Nishi-Shimbashi Building 10,936
Musashikosugi Tower Place 12,339
Kowa Kawasaki Nishiguchi Building 19,206
Bizcore Akasaka-mitsuke 6,176
SE Sapporo Building 5,066
Total 151,609

(2)Reporting

Assessment Rank of Eligible Green Projects

As of March 31, 2021

Eligible Green Projects DBJ Green Building Certification CASBEE
AKASAKA INTERCITY ★★★★★ -
HAMARIKYU INTERCITY Residential portion ★★★★★
Office portion ★★★★
-
Nisseki Yokohama Building ★★★★ -
Mansard Daikanyama ★★★★ -
Omori Bellport D ★★★ -
Kowa Nishi-Shimbashi Building ★★★ Class A
Musashikosugi Tower Place ★★★ -
Kowa Kawasaki Nishiguchi Building ★★★ -
Bizcore Akasaka-mitsuke ★★★ -
SE Sapporo Building ★★★ -

Quantatative indicators of Eligible Green Projects

Term The Number of Eligible Green Projects Total Leasable Space
(㎡)
Electricity consumption(※)
(MW/h)
Water consumption(※)
(Thousand ㎥)
CO2 Emissions(※)
(t-CO2)
April 2020~ March 2021 10 168,859.63 37,212 154.7 22,416
  • Limited to the scope in which JEI has authority over energy control.
    These figures are for Eligible Green Projects as of the end of March 2021.