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Sustainability Finance

MFLP-REIT aims to strengthen the funding base by expanding the group of investors interested in ESG investment and financing, along with promoting initiatives for sustainability even further, by procuring funds through sustainability finance.

Sustainability Finance Framework

Overview of the Sustainability Finance Framework

サステナビリティファイナンス・フレームワークの策定

Use of Proceeds from sustainability finance

The proceeds (the “Proceeds”) from sustainability finance shall be allocated towards the acquisition of specific assets (“Eligible Green Assets” and “Eligible Sustainable Assets” under sustainability finance, as defined below) and towards refinancing new or existing debt and bonds to acquire these assets.

Eligible Sustainable Assets

Eligible Green Assets meet the following Eligible Green Project Criteria. Eligible Sustainable Assets meet the requirements of both Eligible Green Project Criteria and Eligible Social Project Criteria (for these two types of eligible assets, hereinafter referred to as “Eligible Assets”).

■Eligible Green Project Criteria

Assets that have received or is expected to receive any of the following certifications from a third-party certification program.

(1)  DBJ Green Building Certification: 3 stars or higher (top three certification levels)
(2)  BELS Certification: Three or more (top three certification levels)
(3)  CASBEE Appraisal: B+ or higher (top three certification levels)
(4)  LEED Certification: Silver, Gold or Platinum (top three certification levels)
(5)  Top three certification levels from any other third-party certification program

■Eligible Social Project Criteria

New or existing real estate properties that meets two or more of the following criteria.

(1)  Basic infrastructure development to revitalize the local community
Real estate that utilizes the land lot in a way that contributes to “urban development (machi-zukuri)” of the surrounding area such as providing recreational green space based on the needs of the local society.
(2)  Access to essential services for daily life
Real estate with adequate countermeasures to disaster such as evacuation centers used in the event of a disaster or has stockpiles of supplies for local residents.
Real estate that contributes to the local community such as having an authorized nursery center in the property.
(3)  Socio-economic improvement and empowerment
Contributions to local societies and economies such as job creation by tenant companies and utilization of local companies in construction projects.

Management of Proceeds

The upper limit of funds raised through sustainability finance is calculated by multiplying the Interest-bearing debt ratio (as of the most recent fiscal year-end that can be calculated as of the payment date or execution date of bond or loan financing) by total acquisition price of the Eligible Sustainable Assets.

Sustainability Bond Issuance

1st Unsecured Bonds (Special pari passu conditions among specified investment corporation bonds) (Sustainability Bonds)

Total issue amount 3,000 million yen
Issuance date Feb. 12, 2021
Redemption date Feb. 12, 2031
Interest rate 0.500%
Others Unsecured, not guaranteed

Reporting

The following items will be disclosed on the MFLP-REIT website as at the end of January of each year so long as the balance of sustainability finance is outstanding.

■Total amount of allocated Proceeds

■Amount of proceeds not yet allocated

■Reporting on Environmental Improvement Effects

The status of the green building assessments and certification levels

■Reporting on Social Benefits

①  Output indicators
Number of Eligible Social Assets
②  Outcome
(1)Basic infrastructure development to revitalize the local community
・Overview of the project (Target Assets)
・Number of facilities equipped with seismic isolation structures
(2)Access to essential services
・Number of facilities designated as evacuation sites in the event of a disaster
・Number of facilities equipped with disaster relief vendors
・Number of facilities equipped with emergency supply stockpiles
・Number of facilities equipped with cooking bench*
・Number of facilities equipped with emergency toilets
・Number of facilities equipped with emergency power supply
・Number of licensed nursery centers
(3)Socio-economic improvement and empowerment
The following items are related to the promotion of the employment of local residents.
・Number of facilities hiring local residents
・Number of facilities hiring local companies for construction work
* The "cooking bench" is a brick-enclosed base with a seat plate placed on it. It is normally used as a bench, but it is also used as a kitchen range in the event of a disaster.

External review

For eligibility of the Sustainability Finance Framework, MFLP-REIT has been assigned “SU 1 (F),” the highest evaluation grade in the JCR Sustainability Finance Framework Evaluation by Japan Credit Rating Agency, Ltd. (JCR).

JCR's Sustainability Finance Framework Evaluation Results

For eligibility of the sustainability bond, MFLP-REIT has been assigned JCR as below.

MFLP-REIT 1st Unsecured Bonds (Sustainability Bonds)
JCR's Sustainability Bond Evaluation Results
JCR's Credit Rating

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