NEWS RELEASE
24-D-0295

May 31, 2024

Japan Credit Rating Agency, Ltd. (hereinafter referred to as "JCR") has announced the following Green Finance Framework
Evaluation Results.

Nippon Prologis REIT, Inc.
G r e e n F i n a n c e F ra m e w o r kAssignment
Overall
Evaluation

Green
Evaluation（Use of Proceeds）

Management,
Operation andTransparency Evaluation

Green 1(F)

g1(F)

m1(F)

Issuer/Borrower

Nippon Prologis REIT, Inc. (Security Code: 3283)

Subject

Green Finance Framework (the “Framework”)

Evaluation Overview▶▶▶ 1. Overview of Nippon Prologis REIT, Inc.

Nippon Prologis REIT, Inc. ﴾"NPR"﴿ is a real estate investment trust ﴾“REIT”﴿, listed on the Tokyo
Stock Exchange in February 2013, who primarily invests in logistics facilities. NPR, under the
principles of its investment objectives, has maximized its unit holder value by securing stable
income, growing the size of its assets under management and increasing the value of its portfolio
assets. NPR has specifically invested in “Class-A logistics facilities,” 1 that meet all the——————————————
1

NPR's definitions for “Class-A logistics facilities” refer to logistics facilities that satisfy the following five factors: ﴾1﴿ Gross floorarea of approximately 16,500 square meters ﴾177,600 square feet﴿ or more; ﴾2﴿ Close to population clusters, transportation

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requirements of sizes, locations, functionality and safety standards needed to provide fulloperational efficiency to NPR’s customers. NPR intends to own and operate its assets undermanagement in the medium- to long-term. As of November 31, 2023, NPR owned 59 properties
in its portfolio with a total purchase price of 916.7 billion yen.
The asset management company of NPR is Prologis REIT Management K.K. ﴾the "AssetManager"﴿. The sponsor of NPR and the Asset Manager is Prologis K.K. who is a 100 percent
shareholder of the Asset Manager and one of subsidiaries of the US-based Prologis Group. NPR
has intensively invested in "Class-A logistics facilities" developed by the Prologis Group througha sponsor support agreement with the Prologis Group. Besides the aforementioned, NPR has
been functioning through a close collaboration with the Prologis Group, including, but notlimited to, the Prologis Group’s support for NPR’s property management or human networks
within the logistics industry.

▶▶▶ 2. NPR's ESG Management and Decarbonization Initiatives

NPR has been, as a REIT that focuses on investing in "Class-A logistics facilities," taking a numberof sustainability initiatives jointly with the Asset Manager. In 2021, NPR, the Asset Manager andPrologis K.K. have analyzed their businesses in Japan and identified ESG materialities ﴾the“Materialities”﴿. Among the nine identified Materialities, three are in the field of theenvironmental; "Development and Investments in Green Buildings," "Sustainable Energy Use"and "Response to Climate Change." NPR will contribute to the three environmental materialities,
including "Development and Investments in Green Buildings" through establishment of the
Framework and allocation of proceeds raised through green finance to projects that meet theeligibility criteria.
At the Asset Manager, the ESG Committee ﴾the “Committee”﴿ primarily bears a responsibility topromote sustainability initiatives and activities by NPR. The Committee is consisted of the Chief
Executive Officer ﴾who also serves as Chief Sustainability Officer﴿ as a chairman, the Deputy
President and CFO, the Head of the Financial Planning/Investor & Public Relations Division, theHead of the Investment & Operations Division, the Compliance Officer and other ancillary
members in charge of sustainability. The Committee has planned various ESG initiatives/activities
for NPR and verified the results of implementation of those actions. The Committee has also
promoted NPR’s initiatives by utilizing, when necessary, skills and knowledge of external experts
for sustainability operations, such as formulating various ESG policies.

——————————————
hubs ﴾including expressway interchanges﴿ or major seaports or airports; ﴾3﴿ Floor space that exceeds 5,000 square meters﴾53,820 square feet﴿ on a single floor, with a floor weight capacity of at least approximately 1.5 tons/square meter, an effective
ceiling height of at least 5.5 meters ﴾18 feet﴿ and a span between columns of at least 10 meters ﴾33 feet﴿; ﴾4﴿ Spiral ramps or
slopes that allow trucks direct access to upper-floor space, or sufficiently capable vertical conveyors; and ﴾5﴿ Structural andfacility safety features such as seismic isolation and earthquake-proofing that can withstand natural disasters.

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▶▶▶ 3. Green Finance Framework

The subject of this evaluation memorandum is a Green Finance Framework ﴾the "Framework”﴿
stipulated by NPR to exclusively limit the use of proceeds financed through green bonds orgreen loans ﴾collectively the "Green Finance"﴿ to the ones that will create or generate realenvironmental benefits. Through this evaluation, JCR will evaluate whether the Framework is incompliant with the Green Bond Principles 2 , the Green Loan Principles 3 , the Green Bond
Guidelines4 and the Green Loan Guidelines5. Although these principles and guidelines do notconstitute any legal authority in any legislations, JCR generally assesses, as our principle, theadequacy of various sustainability initiatives in light of these principles and guidelines as thecurrently addressable domestic and global uniform sustainability standards.
NPR intends to allocate the proceeds procured through the Green Finance to the acquisitions ofgreen buildings that meet predetermined eligibility criteria or to refinancing of such acquisition
financings or to capital expenditure in order to improve energy efficiency or makeenvironmentally improvement to the properties. It is also stipulated that appropriate measures
shall be taken in consideration of potential adverse impacts on the environment or society inacquiring or implementing eligible green projects. Accordingly, JCR has evaluated that the useof proceeds defined in the Framework is expected to have rational environmental benefits.
According to the Framework, a process has been established to involve the senior managementin the selection of projects for which proceeds shall be allocated. In addition, the proceeds are
expected to be properly managed, and adequate controls have been in place through external
audit. In terms of reporting, the predetermined information of the status of proceeds allocationand environmental benefits will be disclosed on the NPR's website. Accordingly, JCR has
evaluated that the rational management and operation structure has been established in NPR,
and therefore, the proposed process is reasonably transparent.
Consequently, JCR has assigned "g1﴾F﴿" for the "Green Evaluation ﴾Use of Proceeds﴿," "m1﴾F﴿" forthe "Management, Operation and Transparency Evaluation" and "Green 1﴾F﴿" for “JCR Green
Finance Framework Evaluation” to the Framework based on JCR Green Finance Evaluation
Methodology. JCR has evaluated that the Framework meets the standards for the various
requirements in the Green Bond Principles, the Green Loan Principles, the Green Bond Guidelines
and the Green Loan Guidelines.

——————————————ICMA﴾International Capital Market Association﴿ ﴾2021, with June 2022 Appendix 1﴿ Green Bond Principles
https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/
3
LMA ﴾Loan Market Association﴿, APLMA ﴾Asia Pacific Loan Market Association﴿, LSTA ﴾Loan Syndications and Trading
Association﴿ ﴾2023﴿ Green Loan Principle
https://www.lsta.org/content/green-loan-principles/4
Ministry of the Environment ﴾2022﴿ Green Loan Guidelines
https://www.env.go.jp/content/000062495.pdf
5Ministry of the Environment ﴾2022﴿ Green Loan Guidelines
https://www.env.go.jp/content/000062495.pdf
2

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Table of Contents■Evaluation Phase 1: Green Evaluation
I. The Use of Proceeds
JCR's Key Consideration in This Factor
Current Status of the Use of Proceeds and JCR's Evaluation
1. Environmental Benefits of the Projects
2. Negative Impacts on the Environment and Society
3. Alignment with SDGs

■Evaluation Phase 2: Management, Operation and Transparency Evaluation
I. Selection Criteria and Processes of the Use of Proceeds
JCR's Key Consideration in This Factor
Current Status of the Processes and JCR's Evaluation
1. Goals
2. Selection Criteria
3. Processes
II. Management of the Proceeds
JCR's Key Consideration in This Factor
Current Status of the Management/Control Systems and JCR's Evaluation
III. Reporting
JCR's Key Consideration in This Factor
Current Status of the Reporting and JCR's Evaluation
IV. Organizational Sustainability Initiatives
JCR's Key Consideration in This Factor
Current Status of the Sustainability Initiatives and JCR's Evaluation■Evaluation phase 3：Evaluation Result (Conclusion)

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Evaluation Phase 1: Green Evaluation

g1(F)I. The Use of Proceeds
JCR's Key Consideration in this Factor
First, in this section, JCR will confirm whether the proceeds have been allocated to the green
projects with clear environmental benefits. Secondly, if the use of proceeds may have a potential
negative impact on the environment and society, JCR will confirm whether the potential impact
has been fully examined by an internal specialist department or an external third party expert,
and necessary measures have been taken to avoid or mitigate the potential negative impact.
Finally, JCR will confirm that the use of proceeds is aligned with the Sustainable Development
Goals ﴾"SDGs"﴿.

▶▶▶ Executive Summary of Current Status of the Use of Proceeds

and JCR's Evaluation
The uses of proceeds defined in the Framework (acquisitions of green buildings, acquisition of assets orrenovation work to improve energy efficiency of or reduce environmental burdens from NPR’s portfolio
properties, and acquisition of renewable energy power generators and their installation work) areevaluated as being all important measures that contribute to the Materialities and are expected to haverational environmental benefits.

The Framework for Use of Proceeds

Use of Proceeds
The proceeds will be allocated to investments in projects which meet the eligible criteria ﴾the
“Eligible Green Projects”﴿ or refinancing of existing Green Finance schemes.
<Eligibility Criteria>
﴾1﴿ Green Buildings
Assets that have received or have renewed, or will receive or renew any of the following
certification from 1 to 5 from third-party certification institutions:
1. LEED: Platinum, Gold, Silver
﴾For LEED BD+C, v4 and later﴿
2. BREEAM: Outstanding, Excellent, Very Good
3. CASBEE: S, A, B+
S, A, B+ in the municipal version CASBEE ﴾however, it shall be limited to buildings thatcompleted construction within past 3 years﴿

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4. DBJ Green Building Certification: 5 stars, 4 stars
5. BELS ﴾2016 standard﴿: 5 stars, 4 stars
The following levels in BELS ﴾2024 standard﴿Non-residential: From Level 6 to Level 4
Housing with renewable energy facilities: From Level 6 to Level 3
Housing without renewable energy facilities: From Level 4 to Level 3
﴾2﴿ Assets or renovation work that intended to improve energy efficiency or reduce theenvironmental impact ﴾those with a reduction effect of 30 percent or more at the time ofplanning the renovation work﴿﴾3﴿ Renewable energy power generation facilities and these installation work

JCR Evaluation of the Framework

1. Environmental Benefits of the Projects
﴾1﴿ Use of Proceeds #1: Green Buildings
Use of Proceeds #1 refers to new or existing investments and/or other expenditures inconnection with buildings that have received or renewed green building certification or will
receive or renew green building certification in the future. This use of proceeds is qualified as
the "Energy efficiency" and "Green buildings which meet regional, national or internationallyrecognized standards or certifications" defined in the Green Bond Principles and the Green Loan
Principles, and as the "Projects for energy efficiency" and "Projects concerning Green Buildings"
among the uses of proceeds exemplified in the Green Bond Guidelines and Green Loan
Guidelines.
According to the Framework, NPR will allocate the applicable proceeds to buildings that havereceived, have renewed or will receive satisfactory levels of certifications required under LEED,BREEAM, CASBEE, DBJ Green Building or BELS in terms of the eligibility criteria in selecting green
building properties. All certifications, as will be discussed in detail hereafter, are deemed rational
environmental certifications from a regional, national or international standpoint.
Accordingly, JCR has concluded that projects that have received certification at a level that fulfills
NPR’s eligibility criteria have rational environmental benefits.
LEED ﴾Leadership in Energy and Environmental Design﴿
LEED refers to an environmental performance evaluation system for buildings and urban
environments developed and operated by the U.S. Green Building Council ﴾USGBC,﴿ a non-profit
organization. LEED is an acronym standing for Leadership in Energy and Environment Design,and the draft was published in 1996 and has been updated every few years since then. LEED v4
and v4.1 are currently operating and LEED v5 will be released in 2025.
The certification program has six categories; BD+C ﴾Building Design and Construction,﴿ ID+C
﴾Interior Design and Construction,﴿ O+M ﴾Building Operations and Maintenance,﴿ ND
﴾Neighborhood Development,﴿ HOMES ﴾Home﴿ and CITIES ﴾City﴿, The certification levels are

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represented by the total points received for each item; Platinum ﴾80 points or more,﴿ Gold ﴾60 to
79 points,﴿ Silver ﴾50 to 59 points﴿ and Certified ﴾standard certification﴿ ﴾40 to 49 points﴿ fromthe top to the bottom. For evaluation, the program prerequires reasonably high scores for itemson energy conservation, and to obtain a high certification level, it is reasonable to assume thatthe program requires high energy efficiency.
The certification level, Silver or higher, which NPR has established as the eligible criteria, isdeemed satisfactory as a certification level for the buildings that have achieved high energy
efficiency and has been evaluated as having rational environmental benefits.
BREEAMBREEAM ﴾Building Research Establishment Environmental Assessment Method﴿ is the world’s
first environmental performance assessment index system founded by ECD ﴾Energy andEnvironment,﴿ an energy and environment consultancy in 1990.
BREEAM aims to raise awareness about consideration of the environment among owners,
residents, designers and operators by setting stricter standards than the law, encourage the best
design, operation, maintenance and management, and distinguish and recognize such buildings.
Assessment is conducted on a maximum of ten category issues; management, health &wellbeing, energy, transport, water, materials, land use, waste & pollution, regional ecosystems
and innovation. BREEAM covers both existing and new buildings, and assessment is carried out
per target category, such as existing residences, offices or retail stores.
Assessment results are given on a five point scale; ﴾1﴿ Outstanding; ﴾2﴿ Excellent; ﴾3﴿ Very Good;
﴾4﴿ Good; and ﴾5﴿ Pass. Evaluation is made by multiplying the raw score in each area by aweighting coefficient and summing up these scores. The largest weighting coefficient is set forenergy, and larger weighting coefficients are established for areas, such as materials or
management although there are some differences depending upon a target type. Additionally,
CO2 emissions during the operational phase are directly evaluated, and insulation efficiency orenergy-saving, including household electrical appliances are also reflected in the evaluation fromthe perspective of energy conservation.
Accordingly, "Very Good" or higher, defined as the eligible criteria by NPR, is deemed satisfactory
as a certification level for high environmental performance and has been evaluated as having
rational environmental benefits.
CASBEE ﴾Comprehensive Assessment System for Built Environment Efficiency﴿
CASBEE is an acronym standing for Comprehensive Assessment System for Built Environment
Efficiency and is a method for evaluating and rating the environmental performance of buildings.
In April 2001, a comprehensive environmental evaluation research committee for buildings wasestablished as an industry-academia-government collaboration project with the support of the
Housing Bureau of the Ministry of Land, Infrastructure, Transport and Tourism and it has been
continuously developing and maintained since then. CASBEE’s evaluation tools include CASBEE
for Construction, CASBEE for Cities, and CASBEE for Real Estate that was developed for the
purpose of demonstrating various environmental performances to the real estate market
community.
CASBEE for New Construction is evaluated with the value of BEE ﴾Built Environment Efficiency﴿
with L as the denominator and Q as the numerator after the reconstruction from the viewpointof environmental quality of buildings ﴾Q refers to Quality﴿ and environmental loads of buildings
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﴾L means Load﴿ for the evaluation items in the four areas; energy consumption, resource
recycling, regional environment and indoor environment. The evaluation results are categorized
into five classes, as follows: Rank S ﴾excellent,﴿ Rank A ﴾very good,﴿ Rank B + ﴾good,﴿ Rank B ﴾slightly inferior﴿ and Rank C ﴾inferior﴿. CASBEE for Real Estate falls under four categories, as
follows: Rank S ﴾excellent,﴿ Rank A ﴾very good,﴿ Rank B + ﴾good﴿ and Rank B ﴾satisfied with items
required﴿. To obtain high ratings, the applicants need to prioritize consideration of environmentfriendly specs such as energy saving features, utilization of low-environmental-impact
equipment and holistically high quality of buildings as well as consideration for indoor comfort
and/or consideration for appearance of landscape.
The municipal version CASBEE is used mainly in Japan’s major cities ﴾ordinance-designated cities﴿
where CASBEE is utilized for a registration system of a "Program of Environmental Friendly
Buildings Prioritization." In this case, evaluation is conducted based on computation utilizing
valuation software used in CASBEE for Architecture in accordance with the way of thinking of amunicipality or characteristics of that region. The look-back period is stipulated as three years
from the construction completion date in the Framework, which is consistent with the validity
period of CASBEE for New Construction. Accordingly, the municipal version CASBEE has the samerational environmental benefits as those for CASBEE for Construction.
JCR has evaluated that buildings with the rating of B+ or higher, which NPR has set as the eligible
criteria, have environmental benefits with the following reasons: ﴾1﴿ Such buildings have BEE of
1.0 or higher in CASBEE for New Construction and the municipal version CASBEE, and theenvironmental qualities clearly exceed the environmental burdens, and ﴾2﴿ such buildings with
CASBEE for Real Estate are properties equivalent to B+ in conventional CASBEE for Construction
although the measurement is not based on BEE in CASBEE for Real Estate.
DBJ Green Building Certification
DBJ Green Building Certification refers to a certification system provided by DBJ ﴾theDevelopment Bank of Japan﴿ to evaluate real estate with social and environmental consideration.
The evaluation results are indicated with the number of stars, and the evaluation axis is buildings
with social and environmental consideration. The evaluation with major five categories are as
follows: “Energy & Resources ﴾environmental performance of buildings﴿,” “Amenity ﴾comfort oftenants﴿,” “Resilience ﴾abilities to respond to crises﴿,” “Community & Diversity ﴾consideration fordiversity and the surrounding environment﴿” and “Partnership ﴾cooperation with stakeholders﴿"with 5 stars ﴾extremely excellent and top-shelf buildings in Japan,﴿ 4 stars ﴾excellent,﴿ 3 stars
﴾great,﴿ 2 stars ﴾good﴿ and 1 star ﴾satisfactory﴿. JCR has evaluated that this evaluation program isequivalent to the "regional, national or internationally recognized standards or certification" in
the green project classification defined in the Green Bond Principles as DBJ Green Building
Certification has been highly recognized in Japan and has had certain evaluation items forenvironmental performance although it is not only specifically evaluating environmental
performances of buildings. Since the certification is not exclusively limited to assess
environmental performances of buildings, JCR considers that it is desirable to confirm theevaluation of environmental performance of each building.
DBJ Green Building Certification is based on a comprehensive evaluation methodologies,
including not only the assessment of environmental performance of properties to be evaluatedbut also the comfort of tenants, risk management, such as disaster/crime prevention,
consideration for the surrounding environment and communities as well as collaboration withstakeholders. There are many properties that do not meet the criteria for evaluation in the real
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estate market as scoring is designed by consolidating specific "excellent initiatives" for theenvironment and society. In order to be highly rated, buildings are required to appropriately
consider not only the environmental impact but also impact on all stakeholders involved in thebuildings.
The level of DBJ Green Building Certification is assumed to constitute approximately the top 20
percent of all income properties in Japan in the field of the "concerns for the environment andsociety." Additionally, each rating up to 3 stars is subject to the aggregation of the top 10 percent
﴾5 stars,﴿ top 30 percent ﴾4 stars﴿ and top 60 percent ﴾3 stars﴿ of properties that exceed thecertification levels of DBJ Green Building Certification. JCR has therefore evaluated that thebuildings with 4 stars or higher of DBJ Green Building Certification, which NPR set as theeligibility criteria, are properties with high environmental performance and benefits.
BELS ﴾Building Energy Efficiency Performance Labeling System﴿
BELS is an acronym standing for Building-Housing Energy-Efficiency Labeling System and is asystem in which energy-saving performance is evaluated and certified by a third-party evaluation
organization for new and existing buildings. The buildings’ skin heat performance and primaryenergy consumption are subject to evaluation, and it is required to have excellent energy-saving
performance for high evaluation. The evaluation results are classified by levels based on BEI
﴾Building Energy Index﴿. BEI is a criterion to measure energy-saving performance relative to areference value, with design primary energy consumption as the numerator and reference
primary energy consumption as the denominator. Evaluation is made on a five-point scaleranging from one star to five stars under the conventional standard ﴾2016 standard﴿, and twostars satisfy the energy conservation standard.
The energy conservation regulations have been tightened for large non-residential buildings
which floor area is 2,000 m2 or more since the revised Building Energy Efficiency Act came into
effect on April 1, 2024. The new energy conservation standard varies depending upon thebuilding uses; 25 percent or more reduction for factories, including logistics facilities and 20
percent or more reduction for offices, schools, hotels or department stores. Based on thisamendment, the regulation of BELS for the buildings sales and leases was enhanced in April
2024, and new standards ﴾the “2024 Standards”﴿ were introduced in BELS. Under the 2024
Standards, residential and non-residential buildings with renewable energy facilities will beassessed on a scale of 7 from Level 6 ﴾an energy consumption reduction rate of 50 percent ormore﴿ to Level 0 ﴾an energy consumption reduction rate of less than 0 percent﴿ while residentialbuildings without renewable energy facilities will be assessed on a scale of 5 from Level 4 ﴾anenergy consumption reduction rate of 30 percent or more﴿ to Level 0 ﴾an energy consumption
reduction rate of less than 0 percent﴿. Under the new standards, BELS Level 4 or above ﴾an energy
consumption reduction rate of between 30 percent and 40 percent﴿ is provided to buildings thatmeet the energy conservation standard of all non-residential buildings and an induction
standard is applied to some uses. For residential buildings, the previous standards for residentialbuildings remain unchanged: The energy consumption reduction rate is 0 percent or more andthe induction standard is 20 percent or more.
JCR has determined that the BELS criteria applied by NPR are demonstrating rational energysaving performance and is appropriate to be utilized to define the use of proceeds.

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﴾2﴿ Use of Proceeds #2: Renovation WorkThe use of proceeds #2 will be used for renovation work that meets certain conditions to be
carried out on assets held by NPR. This use of proceeds is categorized into the "Energy efficiency"
in the Green Bond Principles and Green Loan Principles, and the "Projects for energy efficiency"
among the use of proceeds exemplified in the Green Bond Guidelines and Green Loan Guidelines.
Under the Framework, NPR, in terms of the real estate it manages, has defined projects for which
the proceeds will be used as follows; ﴾1﴿ renovation work that will reduce any of the CO2
emissions, energy consumption or water consumption by 30 percent, and ﴾2﴿ construction work
to install renewable energy power generators.
In both cases, concrete improvements are expectable by indicating the quantitative effects
before and after construction. The reduction rates of energy consumption are also comparable
to global standards, and therefore, JCR has evaluated that the renovation work that meets theeligibility criteria has high environmental benefits.

﴾3﴿ Use of Proceeds #3: Acquisition or Installation of Renewable Energy Power Generator
The use of proceeds #3 is subject to the acquisition or installation of renewable energy power
generator to be installed in assets held by NPR. The use of proceeds falls under "Renewableenergy" in the Green Bond Principles and the Green Loan Principles and "Projects for renewableenergy" among the use of proceeds illustrated in the Green Bond Guidelines and the Green Loan
Guidelines.
NPR, under this Framework, has set the acquisition or installation of renewable energy power
generator ﴾solar power generation﴿ on the sites of its properties as projects for which proceeds
will be used.
It is expected that the proceeds will be used to generate electricity from renewable energy
sources, which can reduce the use of fossil fuels. Accordingly, JCR has evaluated that theacquisition or installation of renewable energy power generators that satisfy the eligibility criteria
has rational environmental benefits.

2. Negative Impacts on the Environment and Society
The Asset Manager assumes that the projects to be allocated proceeds may cause, if any, defects
﴾e.g. use of environmental and soil pollutants﴿ or troubles with surrounding residents as for green
buildings, and noises or vibrations nuisance along with construction work of renovation and theinstallation of renewable energy facilities as adverse impacts on the environment and society.
The Asset Manager is to identify any negative impacts on properties to be acquired throughthorough due diligence and by taking appropriate measures as needed for acquiring properties.
It is also expected that risks will be managed by complying with laws and regulations forrenovation work.
Consequently, JCR has confirmed that NPR gives satisfactory consideration to adverse impacts
on the environment and society.

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3. Alignment with SDGs
JCR has evaluated that NPR contributes to the following SDGs goals and targets with reference
to ICMA's SDGs mapping.
Goal 7: Affordable and Clean Energy
Target 7.3. By 2030, double the global rate of improvement in energy efficiency
Goal 9: Industry, Innovation and Infrastructure
Target 9.4. By 2030, upgrade infrastructure and retrofit industries to make them sustainable, withincreased resource-use efficiency and greater adoption of clean and environmentally soundtechnologies and industrial processes, with all countries taking action in accordance with theirrespective capabilities
Goal 11: Sustainable Cities and Communities
Target 11.3. By 2030, enhance inclusive and sustainable urbanization and capacity for participatory,
integrated and sustainable human settlement planning and management in all countries
Target 11.6. By 2030, reduce the adverse per capita environmental impact of cities, including by
paying special attention to air quality and municipal and other waste management

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Evaluation Phase 2:
Management, Operation and Transparency Evaluation

m1(F)I. Selection Criteria and Processes of the Use of Proceeds
JCR's Key Consideration in this Factor
In this section, JCR will confirm whether the objectives to be achieved through this evaluation
target, the adequacy of the green project selection criteria and the processes and a series of theprocesses will be appropriately disclosed to investors.

▶▶▶ Executive Summary of Current Status of the Processes and

JCR's Evaluation
JCR has determined that departments with expertise/knowledge and the senior management have beenadequately involved in the goals, the selection criteria for eligible projects and the processes in the
Framework and that their transparency is reasonably secured.

1. Goals
NPR, the Asset Manager and Prologis K.K. have identified material issues on ESG ﴾the“Materialities”﴿ in 2021. Among the nine Materialities, three of them contribute to theenvironment, as follows; "Development and Investments in Green Buildings," "Sustainable
Energy Use" and "Response to Climate Change."

Figure 1: NPR's Materialities6——————————————
6

Source: NPR's website:
https://www.prologis-reit.co.jp/en/esg/materiality_and_commitment.html
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NPR's formulation of this Framework and allocation of proceeds raised through the Green
Finance to projects that meet the eligibility criteria contribute to the three environmental
Materialities, including "Development and Investments in Green Buildings."

Accordingly, JCR has evaluated that the implementation of Green Finance based on thisFramework has been appropriately aligned with NPR's goals.

2. Selection Criteria
The eligibility criteria in the Framework are as described in the Evaluation Phase 1 in this report.
JCR has evaluated that the selection criteria for the project have been adequate.

3. Processes
Framework for the Processes
The Investment & Operations Division or the Financial Planning/Investor & Public Relations
Division of the Asset Manager will select the projects to which the proceeds will be allocatedin accordance with the Asset Manager’s internal guidelines. The Financial Planning/Investor &Public Relations Division will then submit a proposal of the allocation of proceeds procured
through the Green Finance to the applicable investment targets to the Asset Manager's ESG
Committee ﴾the “Committee”﴿ for the Committee’s analysis and evaluation.
In cases when NPR procures proceeds through the Green Finance for the aforementioned
investment targets as the use of proceeds, the Financial Planning/Investor & Public Relations
Division will draft proposals and the Investment Committee of the Asset Manager and NPR’s
Board of Directors will deliberate for approvals.

Evaluation by JCR to the Framework
The Investment & Operations Division or the Financial Planning/Investor & Public Relations
Division of the Asset Manager will select the projects for which the proceeds raised through theGreen Finance will be used and the Financial Planning/Investor & Public Relations Division willthen submit a proposal of the allocation of proceeds financed to the Committee who will
evaluate its alignment with the eligibility criteria. In cases when proceeds will be procured
through the Green Finance, the Financial Planning/Investor & Public Relations Division drafts
proposals, and the Investment Committee of the Asset Manager and NPR’s Board of Directors
will deliberate for approvals. JCR has determined that the selection processes have been properly
defined as the senior management of the Asset Manager is involved in the processes.
The selection criteria and processes for projects of NPR will be disclosed in this evaluation reportand on its website. Accordingly, JCR has evaluated that adequate transparency is being secured
for investors.

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II. Management of the Proceeds
JCR's Key Consideration in this Factor
Generally, the processes and methodologies to manage procured proceeds widely vary among
different companies who raise such money. JCR will confirm whether the proceeds financed
based on the evaluation target are certainly allocated to green projects and whether amechanism and internal control system are in place to enable tracking and managing allocationof proceeds without difficulties.
JCR will also evaluate whether the proceeds procured through this evaluation target will bepromptly allocated to green projects and whether appropriate management/investment process
exists if unallocated proceeds exist.

▶▶▶ Current Status of the Management/Control Systems and JCR's

Evaluation
JCR has evaluated that NPR's proceeds management system has been properly established and theprocesses to manage the proceeds are highly transparent as the subject management processes will be
disclosed in this evaluation report and the Framework will be disclosed on NPR’s website.

Framework for the Management of the Proceeds

Proceeds Allocation Plan
The proceeds procured through the Green Finance will be promptly used to invest in new
assets that meet the eligibility criteria or to refinance funds to invest in existing assets.

How to Track and Manage Proceeds Financed
The proceeds raised through the Green Finance will be deposited into the NPR's bank account.
Then the proceeds will be allocated to acquisitions of the Eligible Green Projects or repaymentof existing Green Finance in accordance with applicable agreements and contracts.
These processes will be adequately managed with spreadsheets or similar management tools
by the Accounting Division in accordance with the internal guidelines of the Asset Manager.

Internal Control and External Audit on Tracking Management
The Asset Manager will internally audit its entire business processes on a regular basis with an
assistance provided by an external specialized institution.
Also, the entire financial accounting of NPR will be also audited by external accountants.

Methodology to Manage Unallocated Proceeds
The proceeds raised through the Green Finance will be managed in the form of cash or cash
equivalents until they are allocated.
After the completion of the full allocation, if the proceeds are not temporarily allocated to the
Eligible Green Projects as they are disqualified as the permitted use of proceeds as a result of

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disposition, physical damages or failure to satisfy the eligible green criteria, for the period
through the redemption or repayment of the Green Finance, the unallocated proceeds will be
managed, as follows:
NPR will manage and control the proceeds by confirming that the total balance of green
finance is compliant with the permitted upper limit amount of the Eligible Green Debt ﴾total
amount of the Eligible Green Projects multiplied by the total asset LTV﴿ at each fiscal period.

Evaluation by JCR to the Framework
The proceeds raised through the Green Finance will be allocated to projects that meet theeligibility criteria promptly after the procurement. The Accounting Division of the Asset Manager
will monitor and manage the proceeds financed with electronic files and the results will bereported to the Head of the Accounting Division.
NPR has established a structure under which proceeds financed will be adequately controlled as
it internally audits the proceeds with an assistance from an external specialized institution, andan external accounting firm audits them. NPR also has put a structure in place to permanently
preserve documents on green finance proceeds management.
The proceeds procured through the Green Finance will be immediately allocated to the Eligible
Green Projects. Therefore, in principle, there will be no unallocated proceeds. But if there are any
unallocated proceeds - for instance, the Green Finance assets are disposed or disqualified as the
Eligible Green Projects - NPR will apply a portfolio management to control the unallocatedproceeds. Specifically, the amount of debt calculated by multiplying the total amount ofacquisition value of green projects that satisfy the green eligibility criteria at the latest fiscal
period by LTV ﴾loan to value/interest-bearing debt ratio﴿ will be set as the upper limit amount of
the Green Finance and managed to make sure that the balance of the Green Finance does notexceed the amount of the Eligible Green Debts as of the end of the latest fiscal period.
Accordingly, JCR has evaluated NPR's proceeds management system as appropriate.

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III. Reporting
JCR's Key Consideration in this Factor
In this section, JCR will evaluate whether the disclosure system for investors before and after
financing based on the Framework is effectively designed in detail.
▶▶▶ Current Status of the Reporting and JCR's Evaluation

JCR has, in terms of NPR's reporting, evaluated that both of the proceeds allocation and environmental
benefits will be adequately disclosed to investors.

Framework for the Reporting

Allocation of Proceeds
NPR, after proceeds raised through green finance, will make its best efforts to report thefollowing information on its website:
Allocation status of the proceeds from green finance
Allocation plans in case there are unallocated residual proceeds from the green financefrom the date one month after the completion of such green finance
The fact that certain eligible green projects are disqualified as the permitted use ofproceeds as a result of disposition, physical damages or failure to satisfy the eligible green
criteria of such eligible green projects, prior to the redemption or repayment of the green
finance
The total balance of green finance and the permitted upper limit amount of the of green
eligible debt at each fiscal period

Impact Reporting
NPR will report the following contents annually on its website to the extent it is practicable:
Types and ratings of the certificates received for green buildings
Achieved effects of energy savings as a result of repairs and maintenance work
Estimated amount of electricity power generation and estimated amount of CO2 emission
reduction as a result of the introduction of renewable energy power generators
Summary of status of NPR’s investments into green buildings
Data on energy consumption, etc., and ESG initiatives of NPR and the Asset Manager

Evaluation by JCR to the Framework

Reporting on the Allocation Status of the Proceeds

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NPR will annually disclose the contents defined in the Framework on its website. If there is any
significant change in the status of the proceeds procured after the proceeds are fully allocated,
NPR plans to disseminate that effect by disclosing such change on its website.

Reporting on Environmental Benefits
NPR will annually disclose the contents stipulated by the Framework on its website as reportingon the environmental benefits. These disclosure items include quantitative data, such as energy
consumption or CO2 emissions.
Accordingly, JCR has evaluated NPR's reporting structure as adequate.

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IV. Organizational Sustainability Initiatives
JCR's Key Consideration in this Factor
In this section, JCR will evaluate whether the senior management of those seeking financing has
positioned sustainability issues as highly prioritized management objectives or has clearly
positioned implementation policies/processes for sustainable finance or criteria for selecting
green projects by establishing a department that specializes in sustainability sectors or incollaboration with external organizations.
▶▶▶ Current Status of the Sustainability Initiatives and JCR's

Evaluation
JCR has highly evaluated that NPR has positioned sustainability issues as key management objectives, hasan adequate internal council on sustainability issues and is conducting various initiatives from a practicaland administrative perspective with proactive introduction of knowledge and expertise of both internaland external advisors.

The commitment by the Prologis Group, to which NPR belongs to, ESG has begun with leadingedge governance dating back to its foundation almost 40 years ago. The Prologis Group has
invented and operated what is now the standard for modern logistics facilities, even before theconcept of ESG was born, with superior environmental performances. In 2022, the Prologis Group
committed to achieve net zero emissions across its entire value chain by 2040. This foundation
principle of the Group has developed its deep commitment to environmental stewardship, social
responsibility and good governance, and leads to NPR's various ESG initiatives.
When NPR went public in February, 2013, NPR made a commitment “to maximize its unit holder
value through steady management of logistics properties by establishing medium- to long-term
good relationships with a variety of its stakeholders, such as customers, consumers/end users orcommunities" and NPR has been practicing it. NPR strives to maximize its unit holder value inthe medium- to long-term through sustainable corporate activities with the three pillars of ESG;
environmental initiatives, social responsibility and governance.
In 2021, NPR, as mentioned earlier, identified nine ESG materialities, set KPIs corresponding toeach materiality and began managing the progress of achievement of each materiality. Amongthem, NPR has already achieved two KPIs prior to December 31, 2022, their original deadline,
and NPR has further set ambitious new KPIs, with which it strives to further implement ESG
initiatives.
As a result of its ESG initiatives, NPR was awarded a “Five Star” and "Green Star," the highest levelin the GRESB Real Estate Assessment for nine consecutive years. Besides, NPR has become thefirst constituent of the Dow Jones Sustainability World Index as a J-REIT.
The ESG Committee of the Asset Manager has mainly promoted NPR's sustainability operations.
The Committee is chaired by the CEO who also serves as the Chief Sustainability Officer and iscomposed of the Deputy President and CFO, the Head of the Financial Planning/Investor &Public Relations Division, the Head of the Investment & Operations Division, the Compliance
Officer and other ancillary members in charge of sustainability. The Committee plans various

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ESG measures for NPR and reviews the implementation results. The Committee has additionallypromoted NPR's sustainability efforts by utilizing the knowledge and expertise of external
experts, if necessary, to advance for formulating ESG policies.
Accordingly, JCR has evaluated that NPR has positioned sustainability issues as key management
objectives, has an adequate internal council on sustainability issues and has made efforts froma practical and administrative perspective by introducing knowledge and expertise of external
advisors.

﴾Reference﴿ GRESB Real Estate Assessment
Established in 2009, GRESB refers to a benchmark that measures and assesses the ESG
consideration of real assets ﴾real estate and infrastructure﴿ and organizations to manage
the benchmark. GRESB is an acronym standing for Global Real Estate Sustainability
Benchmark. The assessment results have been shown on a five-star scale ﴾5 stars, 4 stars,
3 stars, 2 stars and 1 star﴿ since 2016. "Green Star" is given to companies who have madeoutstanding efforts in addition to the five- rate evaluation. 57 J-REIT funds took part in
the 2023 assessment.

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Evaluation Phase 3：
Evaluation Result (Conclusion)

Green 1(F)JCR assigned "g1﴾F﴿" for the "Green Evaluation ﴾Uses of Proceeds﴿" and "m1﴾F﴿" for the"Management, Operation and Transparency Evaluation" to the Framework based on JCR Green
Finance Evaluation Methodology. Consequently, JCR assigned "Green 1﴾F﴿" of the "JCR Green
Finance Framework Evaluation" to the Framework. The Framework meets the standards for theitems required in the Green Bond Principles, the Green Loan Principles, the Green Bond
Guidelines and the Green Loan Guidelines.

Management, Operation and Transparency Evaluation

Green Evaluation

m1(F)

m2(F)

m3(F)

m4(F)

m5(F)

g1(F)

Green 1(F)Green 2(F)Green 3(F)Green 4(F)Green 5(F)g2(F)

Green 2(F)Green 2(F)Green 3(F)Green 4(F)Green 5(F)g3(F)

Green 3(F)Green 3(F)Green 4(F)Green 5(F)

N/A

g4(F)

Green 4(F)Green 4(F)Green 5(F)

N/A

N/A

g5(F)

Green 5(F)Green 5(F)

N/A

N/A

N/A

(Responsible analysts for this evaluation) Rieko Kikuchi, Shintaro Arai

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Important Explanation on this Evaluation
1. Assumptions, Significance and Limitations of JCR Green Finance Framework Evaluation
JCR Green Finance Framework Evaluation, which is granted and assigned by Japan Credit Rating Agency, Ltd. (hereinafterreferred to as "JCR") is a comprehensive statement of JCR's current opinion on the alignment with green projects as definedby JCR and the extent of the initiatives to ensure management, operations and transparency on the use of proceeds with policies
set forth by the Green Finance Framework as the target evaluation. Therefore, it is not intended to evaluate the specificenvironmental benefits, management/operation systems and transparency of individual bonds or borrowings to be executed
based on these policies concerned. In cases where a green finance evaluation is granted or assigned to an individual bond or
borrowing based on the said framework, a separate evaluation is required. JCR Green Finance Framework Evaluation neither
certifies environmental benefits from the individual bond or borrowing executed based on the framework concerned nor does
it assume responsibility for any environment benefits. JCR, in principle, will not directly measure environmental benefits ofproceeds financed through the Green Finance Framework although JCR will confirm the items measured quantitatively andqualitatively by the issuer and/or borrower (hereinafter an issuer and borrower are collectively referred to as "a fundraiser") ora third party requested by the fundraiser. Green equity may also be included in the evaluation only if all assets, in case ofinvestment corporations, fall under green projects.
2. Methodology Used in this Evaluation
The methodology used to make this evaluation is posted as "JCR Green Finance Evaluation Methodology" in the "Sustainable
Finance/ESGs" section on the JCR's website at https://www.jcr.co.jp/en/.
3. Relation with Conduct of Credit Rating Activities
The conduct of assigning and providing JCR Green Finance Framework Evaluation is performed by JCR as its related businessand is different from the conduct of credit rating activities.
4. Relation with Credit RatingThis evaluation is different from a credit rating and is not committed to providing a predetermined credit rating or making
available for inspection.
5. Impartiality in Evaluating JCR Green Finance Framework
There are neither capital ties nor personnel relationships that could create a conflict of interest between this evaluation and
JCR.
■Disclaimer
The information contained in this document was obtained by JCR from fundraisers and accurate and reliable sources. Such information however may be mistaken for
artificial, mechanical or other reasons. Therefore, JCR does not make any representation or warranties, whether express or implied, as to the accuracy, result, eligibility,
timeliness, completeness, marketability or fitness for any particular purpose of such information, and JCR assumes no responsibility for any errors, omissions orconsequences using such information. JCR shall not be liable for any loss of opportunity and extraordinary, indirect, incidental or consequential damages of any kindincluding any loss of money, which may result from any use of such information under any circumstances, whether contractual liability, tort liability, negligence or othercauses of liability, and whether such damage is foreseeable or unforeseeable. JCR Green Finance Evaluation does not express any opinion on various risks (credit risks,
price fluctuation risks or market liquidity risks) on the green finance that is subject to evaluation. JCR Green Finance Evaluation is a comprehensive statement of JCR's
current opinion and does neither represent facts nor make any recommendation regarding risk assessments or decision on the purchase, sale or holding of individual
bonds or commercial papers. JCR Green Finance Evaluation may be modified, suspended or withdrawn due to changes in information or lack of information. All rights
pertaining to this document including data from JCR Green Finance Evaluation are reserved by JCR. All or part of this document including data from JCR Green FinanceEvaluation is prohibited from being reproduced, modified or otherwise altered without the permission of JCR.

■Terminology
JCR Green Finance Framework Evaluation: The assessment of the extent to which proceeds financed based on the Green Finance Framework are allocated to green
projects as defined by JCR and of the degree of management, operation and transparency on the use of proceeds for the said Green Finance. The evaluation is made ona scale of five in the order from top to bottom with evaluation symbols of Green 1 (F,) Green 2 (F,) Green 3 (F,) Green 4 (F) and Green 5 (F.)■Status of Registration as an External Evaluator of Sustainability Finance・Ministry of the Environment: Registered as an external reviewer for Green Finance・ICMA (an observer registered as an external evaluator with the International Capital Markets Association)
・UNEP FI Positive Impact Financial Principles Working Group Member
・Climate Bonds Initiative Approved Verifier■Other Registration Status as Credit Rating Agency
・Credit Rating Agency: the Commissioner of Financial Services Agency (Credit Rating) No. 1
・EU Certified Credit Rating Agency
・NRSRO: JCR has registered with the following four of the five credit rating classes of Nationally Recognized Statistical Rating Organization (“NRSRO”) as definedby the U.S. Securities and Exchange Commission: (1) financial institutions, broker/dealers; (2) insurance companies; (3) general business corporations; and (4)government and local governments. In cases where disclosure is required based on Rule 17g-7(a) of the Securities and Exchange Act, such disclosure is attached toNews Release posted on the JCR's home page at https://www.jcr.co.jp/en/.

■For all other inquiries, please contact us below
TEL: 03-3544-7013 FAX: 03-3544-7026
Information Service Department

Japan Credit Rating Agency, Ltd.
Jiji Press Building, 5-15-8 Ginza, Chuo-ku, Tokyo 104-0061, Japan
Tel. +81 3 3544 7013, Fax. +81 3 3544 7026

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