Information under AIFMD Article 23(for UK and Dutch Investors)
As of April 10, 2024

For the latest version, please refer to the NTT UD REIT Investment Corporation’s website.
https://nud-reit.co.jp/en/ir/library.html

DISCLAIMER
This document has been prepared solely for the purpose of providing U.K. and Dutch investors with certain
information under Article 23 of the European Alternative Investment Fund Managers Directive (European
Directive 2011/61/EU) (the “AIFMD”) as implemented in their respective jurisdictions. Accordingly, you
should not use this document for any other purpose.

Netherlands
The units of NTT UD REIT Investment Corporation (“NUD” or the “AIF”) are being marketed in the Netherlands
under Section 1:13b of the Dutch Financial Supervision Act (Wet op het financieel toezicht, or the “Wft”). In
accordance with this provision, NTT Urban Development Asset Management Corporation (the “AIFM”) has
submitted a notification with the Dutch Authority for the Financial Markets. The units of NUD will not, directly
or indirectly, be offered, sold, transferred or delivered in the Netherlands, except to or by individuals or entities
that are qualified investors (gekwalificeerde beleggers) within the meaning of Article 1:1 of the Wft, and asa consequence neither the AIFM nor NUD is subject to the license requirement pursuant to the Wft.
Consequently, neither the AIFM nor NUD is subject to supervision of the Dutch Central Bank (DeNederlandsche Bank, “DNB”) or the Netherlands Authority for Financial Markets (Autoriteit Financiële
Markten, the “AFM”) and this Article 23 AIFMD Prospectus is not subject to approval by the AFM. No approved
prospectus is required to be published in the Netherlands pursuant to Article 3 of the Regulation (EU)2017/1129 (the “Prospectus Regulation”) as amended and applicable in the Netherlands. The AIFM istherefore solely subject to limited ongoing regulatory requirements as referred to in Article 42 of the AIFMD.

United Kingdom
Units of NUD are being marketed in the United Kingdom pursuant to Article 59 of the United Kingdom
Alternative Investment Fund Managers Regulations 2013. In accordance with this provision, the AIFM has
notified the Financial Conduct Authority (the “FCA”) of its intention to offer these units in the United Kingdom.
For the purposes of the United Kingdom Financial Services and Markets Act 2000 (as amended, “FSMA”)
NUD is an unregulated collective investment scheme which has not been authorized by the FCA.
Accordingly, any communication of an invitation or inducement to invest in CRR may only be made to (i)investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended, or “the Order”; or (ii) high net worth companies falling within
Articles 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be communicated (all such
persons referred to under (i) and (ii) of this paragraph, together being referred to as “Relevant Persons”).
In the United Kingdom, this document and its contents are directed only at Relevant Persons and must not
be acted on or relied on by persons who are not Relevant Persons. The transmission of this document andits contents in the United Kingdom to any person other than a Relevant Person is unauthorized and may
contravene the FSMA and other United Kingdom securities laws and regulations.

Prohibition of Sales to UK Retail Investors
In addition to the restrictions under the AIFMD, as retained by the United Kingdom in its domestic laws, theUnits of NUD are not intended to be offered, sold or otherwise made available to and should not be offered,sold or otherwise made available to any retail investor in the United Kingdom. For these purposes of thisprovision, a “retail investor” means a person who is one (or more) of: (i) a retail client, as defined in point (8)of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the European Union(Withdrawal) Act 2018 (“EUWA”); or (ii) a customer within the meaning of the provisions of the FSMA and any
rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would
not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as
it forms part of domestic law by virtue of the EUWA; or (iii) not a qualified investor as defined in Article 2 ofRegulation (EU) 2017/1129, as it forms part of domestic law by virtue of the EUWA; and the expression “offer”
includes the communication in any form and by any means of sufficient information on the terms of the offer
and the international units to be offered so as to enable an investor to decide to purchase or subscribe theinternational units.
Consequently no key information document required by Regulation (EU) No 1286/2014, as it forms part ofdomestic law by virtue of the EUWA (the “UK PRIIPs Regulation”), for offering or selling the international units
or otherwise making them available to retail investors in the United Kingdom has been prepared andtherefore offering or selling the international units or otherwise making them available to any retail investor
in the United Kingdom may be unlawful under the UK PRIIPs Regulation.

iEuropean Economic Area
In addition to the restrictions under the AIFMD, the Units of NUD are not intended to be offered, sold orotherwise made available to and should not be offered, sold or otherwise made available to any retail investor
in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (ormore) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU, as amended, (the“MiFID II”); (ii) a customer within the meaning of Directive (EU) 2016/97, where that customer would not
qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor
as defined in the Prospectus Regulations, as amended. Consequently no key information document requiredby the UK PRIIPs Regulation for offering or selling the Units of NUD or otherwise making them available toretail investors in the EEA has been prepared and therefore offering or selling the Units of NUD, or otherwise
making them available, to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

ii

Article 23 (1)(a)Objectives of the AIF

Investment strategy

NUD conducts asset management that takes advantage of the expertise and experience ofNTT Urban Development Corporation, the main sponsor of NTT Urban Development AssetManagement Corporation, which conducts real estate development and leasing
businesses. NUD aims to maximize the interests of its unitholders by enhancing the
profitability of such real estate.
NUD shall invest in real estate located primarily in the Tokyo metropolitan area, comprisingbuildings and land which are primarily for office and residential uses, as well as in securities
and other assets that are backed by such real estate. NUD shall conduct management withan aim to ensure solid growth of its assets and to secure stable earnings from medium- tolong–term perspectives.
Office buildings are attractive when the economy is strong. Demand from tenants (lessees)for office buildings may fluctuate due to business cycles and other economic trends.
Consequently, this might adversely affect NUD’s profitability with regard to its officebuildings. However, compared to real estate for other uses, office buildings are generally
expected to generate relatively higher levels of profitability.
Residential properties, on the other hand, have stable demand even when the economy is
weak. In addition, rental residential properties are relatively resistant to adverse changes in
economic and social conditions compared to real estate for other uses. By combining asset
types that have low rent correlation with each other, NUD seeks to mitigate the impact of
economic fluctuations.
NUD’s investments are focused primarily in the Tokyo Economic Bloc, which is characterizedby high concentration of people and industries and an established economic foundation,and in Major Regional Cities., NUD seeks to achieve a portfolio diversified by asset typecomprising office buildings and residential properties.
5 central wards ofTokyo
Other 18 wards ofTokyo
Urban areas
surroundingTokyo
Major regional
citiesChiyoda, Chuo, Minato, Shinjuku and Shibuya wards
The remaining 18 wards of the 23 wards of Tokyo, after excluding
the 5 Central Wards of Tokyo
Tokyo Prefecture excluding the 23 wards of Tokyo, Kanagawa
Prefecture (Yokohama City, Kawasaki City and other cities),
Saitama Prefecture (Saitama City and other cities) and Chiba
Prefecture (Chiba City and other cities)
Sapporo City, Sendai City, Shizuoka City, Nagoya City. Osaka City,
Kyoto City, Kobe City, Hiroshima City, Okayama City and Fukuoka
City etc.

Furthermore, NUD aims to achieve the following geographic diversification.
Urban areasAsset
5 central
Other 18
Major regionalsurrounding
type/Area
wards of Tokyo wards of Tokyo
citiesTokyo
Office50% or more
0% - 20%0% - 40%0% - 20%
buildings
Residential
50% or more
0% - 40%0% - 20%0% - 20%properties(Note) Since the figures in the table represent ranges, the total of such figures is notnecessarily 100%. Although NUD makes investments by aiming to achieve the ratios
above, the actual ratios may differ in the course of acquiring the investment assets.
Types of assets the AIF
may invest in

Real estate, leasehold rights, surface rights, trust beneficiary interests in real estate, realestate securities, specified assets and other assets.

Techniques it may
employ and all
associated risks

NUD achieves its objective by investing in real estate consisting of office buildings andresidential properties.
The principal risks with respect to investment in NUD are as follows:1(1) General Risks(a) Risk concerning treatment of legal, taxation and other systems of investment
corporations(b) Risk concerning transactions involving the investment units in the market(c) Risk concerning price fluctuations of the investment units or Corporate Bonds(defined below)(d) Risk concerning dilution of per-unit value through the issuance of new investment
units(e) Risk concerning cash distributions(2) Risks Related to Product Design and Related Parties(a) Risk concerning marketability of investment units(b) Risk concerning fluctuations in revenues, expenditures and cash flow(c) Risk concerning loan to value ratio(d) Risk concerning borrowings and Corporate Bonds(e) Risk of NUD going bankrupt(f) Risk of NUD’s registration being cancelled(g) Risk concerning dependency on related parties other than NUD(h) Risk concerning performance of duties of directors(i) Risk concerning insider trading(j) Risk concerning the asset manager(k) Risk concerning the asset manager being entrusted with the asset
management of multiple investment corporations(l) Risk concerning the property manager(m) Risk concerning conflicts of interest, etc. of entities involved in the management of
NUD(3) Risks Peculiar to Trust Beneficiary Interests(a) Risk borne as a trust beneficiary(b) Risk concerning liquidity of trust beneficiary interests(c) Risk concerning trustee(d) Risk concerning co-ownership, etc. of trust beneficiary interests(4) Risks Peculiar to Preferred Share Securities of Specific Purpose Companies(a) Risk borne as a preferred shareholder(b) Risk concerning liquidity of preferred share securities(c) Risk concerning other preferred shareholders(5) Risks Related to Real Estate(a) Risk concerning liquidity of real estate, transaction costs, conclusion of post-dated
sale agreements (forward commitment contracts), etc.
(b) Risk concerning competition of property acquisition(c) Risk concerning defects and failures of real estate, including defective title andlimited or invalid ownership rights(d) Risk arising from the complexity of rights regarding real estate and lack of publicreliance effect (koushinryoku)(e) Risk concerning co-owned properties(f) Risk concerning compartmentalized ownership of buildings(g) Risk concerning properties on leased lands(h) Risk concerning properties under development(i) Risk concerning appraisal value and building evaluation(j) Risk concerning decrease of rent income(k) Risk concerning master lease contracts(l) Risk concerning lease contracts of real estate in Japan(m) Risk concerning the status of use of building by tenants(n) Risk concerning increase in operating costs of real estate(o) Risk concerning accidents ,natural disasters and infections, etc.
(p) Risk concerning uneven distribution of real estate(q) Risk concerning concentration of tenants(r) Risk concerning ownership liabilities, etc.
(s) Risk concerning revisions of existing laws and regulations(t) Risk concerning hazardous materials and environmental liabilities2(6) Risks Related to Taxation, Etc.
(a) General risk concerning appliance of special provisions of taxation regarding
inclusion in deductible expenses of distribution of profits(b) Risk concerning conduit requirements(c) Risk of additional tax requirements and risks of becoming unable to satisfy conduit
requirements due to correction orders as a result of taxation investigations, etc.
(d) Risk of falling under the category of family company(e) Risk that preferential tax measures associated with real estate acquisitions cannot
be applied(f) Risk concerning revisions of the general tax system(g) Risk of NUD having no control over its investors(h) Risk concerning impairment loss(i) Risk concerning passing dividend due to lack of funds(j) Risk concerning charge of delinquent tax due to delay of tax payment(7) Other Risks(a) Risk concerning NUD’s ability to make real estate acquisitions(b) Risk arising from bankruptcy of the seller of properties(c) Risk concerning material events, etc.
Any applicable
investment restrictions

NUD is subject to investment restrictions under Japanese laws and regulations (e.g., the Act
on Investment Trusts and Investment Corporations (the “ITA”), the Financial Instruments
and Exchange Act (the “FIEA”)) as well as its articles of incorporation.
NUD must invest primarily in specified assets as defined in the ITA. Specified assets include,
but are not limited to, securities, real estate, real estate leasehold interests, surface rights(chijō-ken) (i.e., right to use land for the purpose of having a structure on it) or beneficiaryinterests in trust for securities or real estate, real estate leasehold interests or surface rights.
A listed J-REIT must invest substantially all of its assets in real estate, Real estate in thiscontext includes, but is not limited to, real estate, real estate leasehold interests, surface
rights, and trust beneficiary interests for these assets, and real estate-related assets in thiscontext include, but are not limited to, anonymous association (tokumei kumiai) interests
for investment in real estate. Pursuant to the ITA, investment corporations shall not
independently develop land or construct buildings, but must outsource such activities.

Circumstances in which
the AIF may use
leverage

In order to achieve steady growth of investment assets and efficient and stable
management of investments, NUD may borrow funds or issue corporate bonds to raise
funds to acquire or repair assets, pay distributions, fund NUD’s operation, or repay debts(including repayment of deposit money, loans and obligations of its corporate bonds(including short-term corporate bonds; referred to as “Corporate Bonds” in this document))

The types and sources ofleverage permitted andassociated risks

Loans or Corporate Bonds.
Currently all of NUD’s outstanding long- and short-term loans are unsecured andunguaranteed.
Loans in which NUD enters or Corporate Bonds that NUD may issue may be subject torestrictive covenants in connection with any future indebtedness that may restrict
operations and limit its ability to make cash distributions to unitholders, to dispose ofproperties or to acquire additional properties. Furthermore, if NUD were to violate such
restrictive covenants, such as with regard to loan-to-value ratios, lenders may be entitled torequire NUD to collateralize portfolio properties or demand that the entire outstandingbalance be paid ahead of the scheduled date.
In the event of an increase in interest rates, to the extent that NUD has any debt withunhedged floating rates of interest or NUD incurs new debt, interest payments may
increase, which in turn could reduce the amount of cash available for distributions tounitholders. Higher interest rates may also limit the capacity for short- and long-termborrowings, which would in turn limit NUD’s ability to acquire properties, and could cause
the market price of the investment units to decline.

3Any restrictions onleverage

The maximum limit of loans and the maximum limit of bond issuances shall each be one
trillion yen and the combined amount shall not exceed one trillion yen.

Any restrictions on
collateral and asset
reuse arrangements
Maximum level ofleverage which the AIFM
is entitled to employ onbehalf of the AIF

No applicable arrangements.

Article 23(1) (b)Procedure by which the
AIF may change its
investment strategy /investment policy

NUD shall aim to maintain the ratio of the balance of loans and issued corporate bonds tototal assets at 60% or less. However, in connection with the acquisition of new investment
assets and other circumstances, this ratio may tentatively exceed 60% for a short period oftime.

Amendment of the articles of incorporation.
The amendment requires a quorum of a majority of the total issued investment units andat least a two-thirds favor of the voting rights represented at the general meeting ofunitholders.
Unitholders should note, however, that under the ITA and our articles of incorporation,
unitholders who do not attend and exercise their voting rights at a general meeting ofunitholders are deemed to be in agreement with proposals submitted at the meeting,
except in cases where contrary proposals are also being submitted or cases regarding (i)assignment or dismissal of an executive director, supervisory director or accounting auditor,(ii) amendment of the articles of incorporation (only in relation to the provision for deemed
agreement with proposals), (iii) dissolution of NUD, (iv) consent to terminate an asset
management agreement by the asset manager or (vi) consent to terminate an asset
management agreement by NUD.
Additionally, the Asset Management Guidelines of the AIFM, which provide more detailed
policies within NUD’s overall investment strategy and policy, can be modified without suchformal amendment of the articles of incorporation.

Article 23(1) (c)Description of the main
legal implications of thecontractual relationshipentered into for the
purpose of investment,
including jurisdiction,
applicable law, and theexistence or not of any
legal instruments
providing for therecognition andenforcement of
judgments in the
territory where the AIF isestablished

NUD is a corporate-type investment trust in the form of investment corporation (toshi hojin)
provided for under the ITA. Therefore, the relationship between NUD and its unitholders isgoverned by NUD’s articles of incorporation (as opposed to individual agreements), which
can be amended from time to time upon resolution of a general meeting of unitholders.
NUD’s articles of incorporation stipulate rules relating to general meetings of unitholders,
including the convocation, setting of record date, exercise of voting rights, resolutions andelection of NUD’s directors. The relationship between NUD and its unitholders is also
governed by, and is subject to the provisions of, Japanese law, including the ITA.
The above agreements are governed by Japanese law.
The courts in Japan would recognize as a valid judgment any final and conclusive civil
judgment for monetary claims (which, for this purpose, are limited to those of a purely civil
nature and do not include monetary claims of the nature of criminal or administrative
sanction, such as punitive damages, even though they take the form of civil claims) against
NUD obtained in a foreign court provided that (i) the jurisdiction of such foreign court isadmitted under the laws of Japan, (ii) NUD has received service of process for thecommencement of the relevant proceedings, otherwise than by a public notice or any
method comparable thereto, or has appeared without any reservation before such foreign
court, (iii) neither such judgment nor the relevant proceeding is repugnant to public policy
as applied in Japan, (iv) there exists reciprocity as to the recognition by such foreign court ofa final judgment obtained in a Japanese court and (v) there is no conflicting judgement on
the subject matter by any Japanese court.
NTT Urban Development Asset Management Corporation and NTT Urban Development
Corporation have entered into an agreement on information provision.
NUD is not involved in or threatened by any legal arbitration, administrative or other4proceedings, the results of which might, individually or in the aggregate, be material.
Article 23(1) (d)The identity of the AIFM,
AIF's depositary, auditor
and any other service
providers and a
description of theirduties and the investors'
rights thereto

 AIFM (Asset Manager): NTT Urban Development Asset Management Corporation
The AIFM manages assets owned by NUD pursuant to the asset managementagreement and based on the Articles of Incorporation of NUD.
 Auditor: KPMG AZSA LLC
The Auditor audits financial statements and prepare audit reports.
 Asset Custodian: Sumitomo Mitsui Trust Bank, Ltd.
The Custodian provides, pursuant to the asset custody agreement, services related tocustody of documents evidencing the rights to the assets acquired by NUD and otherdocuments, management of deposits into and withdrawals from bank accounts as well
as fund transfers, preparation and delivery of ITA-based account books.
 General Administrative Agents (Institutions): NTT Urban Development AssetManagement Corporation
Pursuant to the general administrative agreement, the General Administrative Agent
provides services related to operations of NUD's administrative instruments.
 General Administrative Agents (Accounting and tax payment): Sumitomo Mitsui Trust
Bank, Ltd.
The General Administrative Agent provides services related to accounting, preparationof accounting books and tax payments, pursuant to the general administrative
agreement.
 General Administrative Agents (Corporate Bonds): Sumitomo Mitsui Trust Bank, Ltd.
The General Administrator Agent provides services related to receipt and delivery to
NUD of subscriptions, reimbursement of principle of Corporate Bonds and payment ofinterest, coordination of investment corporation bond registry and its copy andmanagement of investment corporation bond registry, pursuant to the fiscal agent
agreement.
 Transfer Agent: Sumitomo Mitsui Trust Bank, Ltd.
The transfer agent provides services related to preparation and keeping of theunitholders registry and other affairs concerning the registry, payment of cash
distributions to unitholders, and responding to requests from unitholders on exercising
their rights against NUD and other requests from them, pursuant to the transfer agent
agreement. In addition, as an account management institution for the special accountunder the Act on Book-Entry of Company Bonds, Shares, etc., the bank provides
services related to preparation and keeping of NUD's book-entry transfer accountregistry and other affairs concerning the registry by request from NUD, pursuant to thespecial account management agreement.
Service providers owe contractual obligations under their respective agreements with the
AIF or AIFM, as the case may be. In addition, the FIEA provides that an asset manager owes
a J-REIT a fiduciary duty and must conduct its activities as the asset manager in good faith.
The FIEA also prohibits an asset manager from engaging in certain specified conduct,
including entering into transactions outside the ordinary course of business or with relatedparties of the asset manager that are contrary to or violate the J-REIT’s interests. Pursuant
to the ITA, the unitholders have the right to approve the execution or termination of theasset management agreement at a general meeting of unitholders.

Article 23(1) (e)Description of how the
AIFM complies with therequirements to coverprofessional liability
risks (own funds /Not applicable.

5professional indemnity
insurance)
Article 23(1) (f)Description of any
delegated management
function such as
portfolio management
or risk management andof any safekeeping
function delegated by
the depositary, theidentification of thedelegate and any
conflicts of interest that
may arise from suchdelegations
Article 23(1) (g)Description of the AIF’s
valuation procedure andpricing methodology,
including the methods
used in valuing hard-tovalue assets

Article 23(1) (h)Description of the AIF’s
liquidity risk
management, including
redemption rights innormal and exceptional
circumstances andexisting redemption
arrangements withinvestors
Article 23(1) (i)Description of all fees,
charges and expenses
and a maximum amountwhich is directly /indirectly borne by theinvestors

Not applicable.
There is no delegation of such functions beyond the AIFM, which is responsible for portfolio
and risk management, and the Custodian, which is responsible for safekeeping activities.

NUD makes investment decisions based on its investment strategies and in accordancewith its articles of incorporation and based on the results of due diligence, including thevaluation of properties and consideration of the property appraisal value.
NUD evaluates assets in accordance with its Article of Incorporation. The methods andstandards that NUD uses for the evaluation of assets are based on the Regulations
Concerning the Calculations of Investment Corporations, as well as the Regulations
Concerning Real Estate Investment Trusts and Real Estate Investment Corporations andother regulations stipulated by ITA, in addition to Japanese GAAP. J-REITs may only use thevaluation methods prescribed in the rules of the Investment Trusts Association, Japan,
which emphasize market price valuation.

NUD seeks to manage the capital resources and liquidity sources to provide adequate funds
for current and future financial obligations and other cash needs and acquisitions. NUD
manages associated liquidity and interest rate fluctuation risk by keeping the ratio ofinterest-bearing liabilities to total assets at a conservative level, lengthening loan terms,
selecting interest rates in consideration of economic conditions and establishing stable
relationships with financial institutions.
NUD is a closed-end investment corporation, and NUD shall not refund any investment units
upon request of unitholders.

Compensation: The articles of incorporation provide that the compensation shall be no more than
800,000 yen per month for each Executive Director and no more than 350,000 yen permonth for each Supervisory Directors, and shall be the amount judged reasonable inlight of such factors as the compensation levels for the directors and auditors, etc. who
perform similar assignments, general price trends and wage trends. Said amount shallbe determined by the Board of Directors, to the extent not larger than the abovementioned amount, respectively.
Asset Management Fee:
NUD will pay the AIFM an asset management fee as follows; Management Fee 1 – Asset Management Fee 1 shall be the amount (rounded down to
the nearest 1 yen) equivalent to the proportion that NUD and the AIFM separately
agree (the upper limit is 2.5%) of the total amount of rents, common area charge,
parking fees, incidental revenue, facility use charge, facility installation charge, delay
damage charge, cancellation penalty or similar monies for cancelling leaseagreements, and other income from leasing operations, generated from real estate,etc. (including real estate backing securities and other assets that the Investment

6

Corporation acquires) in the investment assets, and calculated for each settlement
period. The amount shall be equivalent to the proportion that NUD and the AIFM
separately agree (the upper limit is 2.5%) of the total amount (rounded down to thenearest 1 yen) of dividend income, interests or similar revenues for the said equity
interests or real estate backed securities, calculated for each settlement period.
Moreover, gains from sale of real estate, etc. (including real estate backing thesecurities and other assets that the Investment Corporation acquires) and other assets
in the investment assets shall be excluded. NUD shall pay the amount and theconsumption taxes and local consumption taxes levied on the amount within a monthafter the accounts are settled.
 Management Fee 2 – For each fiscal period, Management Fee 2 shall be paid asfollowing formula (rounded down to the nearest 1 yen) within a month after theaccounts are settled: (distributable amount per NUD’s investment unit in each fiscal period before thededuction of Management Fee 2) x 1,000,000 x (the rate that NUD and the
AIFM separately agree, which the upper limit is 10%)
 Management Fee 3 – When the Investment Corporation has newly acquired realestate, etc. as the investment assets (including the case where the Investment
Corporation has acquired securities and other assets backed by real estate), theInvestment Corporation shall pay the following amount in accordance with theacquisition price of the real estate, etc. (meaning the combined acquisition price forthe land and building, or the respective acquisition price when multiple real estate
properties are acquired simultaneously; with the amount equivalent to theconsumptions taxes and local consumption taxes as well as expenses associated withthe acquisition are excluded): (the rate that NUD and the AIFM separately agree (the upper limit is 0.5% androunded down to the nearest 1 yen)) x the acquisition price + the amountequivalent to the consumption taxes and local consumption taxes levied on theamountPayment shall be made by the end of the month following the month of the acquisition.
 Management Fee 4 – When the Investment Corporation has sold real estate, etc. held
as the investment assets (including the case where the Investment Corporation has
sold securities and other assets backed by real estate), the Investment Corporation
shall pay the following amount, in accordance with the sale price of the real estate, etc.
(meaning the combined sale price for the land and building, or the respective saleprices when multiple real estate properties are sold simultaneously, excluding
consumption taxes and local consumption taxes as well as expenses associated withthe sale): (the rate that NUD and the AIFM separately agree (the upper limit is 0.25% androunded down to the nearest 1 yen)) x the sale price + the amount equivalent tothe consumption taxes and local consumption taxes levied on the amountPayment shall be made by the end of the month following the month of the sale.
 Management Fee 5 – When the asset management company conducts aninvestigation and evaluation of the real estate, etc. (including securities and otherassets backed by real estate) held by the counterparty to a consolidation-type merger
or an absorption-type merger involving the Investment Corporation (including the casewhere the Investment Corporation is the corporation surviving the absorption-typemerger and the case where the Investment Corporation is the corporation dissolving in
the absorption-type merger) (collectively referred to as the “Merger”) or other Mergerrelated services for the Investment Corporation and the Merger becomes effective, theInvestment Corporation shall pay the following amount: (the rate that NUD and the AIFM separately agree (the upper limit is 0.5%) x (theappraisal value as of the effective date of the Merger of the real estate, etc. heldby the counterparty to the Merger of which are those succeeded or held by the
corporation incorporated in the consolidation-type Merger or the corporation
surviving the absorption-type Merger (rounded down to the nearest 1 yen)) +consumption taxes and local consumption taxes levied on the amountPayment shall be made by the end of the month following the month that includes theeffective date of the Merger.

7General Administrative Agent Fee (Institutions):
 For administration of AIF’s general meetings of unitholders, the General Administrative
Agent (Institutions) receives a General Administrative Agent Fee of 5 million yen permeeting, plus national and local consumption taxed pertaining thereto, by the end of
the month immediately following the month of the relevant meeting.
 For administration of AIF’s board of directors’ meetings, the General Administrative
Agent (Institutions) receives a General Administrative Agent Fee of 1.5 million yen, plus
national and local consumption taxed pertaining thereto, by the end of April andOctober each year.
General Administrative Agent Fee (Accounting): The NUD pays to the General Administrative Agent (Accounting) monthly General
Administrative Fees (Accounting) each fiscal period. The General Administrative Agent(Accounting) shall request the fees by the end of the month immediately following therelevant fiscal period, and NUD shall pay the fees, plus national and local consumption
taxed pertaining thereto, by the end of the month immediately following the month of
the request.
The monthly General Administrative Agent Fees (Accounting) is calculated bymultiplying NUD’s total assets as of the end of each month by 0.06%, divided by 12.
General Administrative Agent Fee (Corporate Bonds):
 For principal and interest payment services with respect to series eight through ten
unsecured Corporate Bonds, the General Administrative Agent receives a General
Administrative Agent Fee (Corporate Bonds) equivalent to 0.00075% of any principal
and interest payment amount.
Transfer Agent Fee:
 Standard Fee - The standard transfer agent fee is for services such as the preparation,
maintenance and storage of NUD’s unitholder register; and preparation of materials
concerning unitholder statistical data as of the end of each fiscal period or any otherday. The monthly standard fee is one-sixth of the amount determined based on thenumber of unitholders as shown below, subject to a minimum monthly fee of¥200,000.
Up to 5,000
480 yen5,001 to 10,000
420 yen
10,001 to 30,000
360 yen30,001 to 50,000
300 yen50,001 to 100,000
260 yenMore than 100,000
225 yen Other fees - NUD also pays certain other fees in addition to the standard fee inconnection with the administration and handling of distributions (minimum of 350,000
yen per distribution) and other unitholder-related functions.
Custodian Fee:
 NUD pays to the Custodian monthly Custodian Fees each fiscal period. The Custodianshall request the fees by the end of the month immediately following the relevant fiscal
period, and NUD shall pay the fees, plus national and local consumption taxes
pertaining thereto, by the end of the month immediately following the month of therequest.
The Custodian Fee is calculated by multiplying NUD’s total assets as of the end of theeach month by 0.01%, divided by 12.
In case of an early terminated of the custodian agreement, the fees shall be prorated
based on the number of days during the period from the date immediately following
the preceding fiscal period until the date of the termination, and payable within fivedays from the termination date.
Auditor Fee: The Auditor receives an Auditor Fee determined by a resolution of a NUD’s board of
directors’ meeting subject to a maximum amount of 15 million yen (including a fee of
2 million yen for audit of English language financials) for each fiscal period. A portion of8

Auditor Fee for the immediately preceding three-month period is payable by the end ofJanuary, April, July and October each year.
 In addition to the above compensation, the Auditor receives a fee of 2 million yen by
the end of January and July each year, for audit of English language financials, etc.
Article 23(1) (j)Description of the AIFM's
procedure to ensure fairtreatment of investors
and details of any
preferential treatment
received by investors,
including detailing thetype of investors andtheir legal or economic
links with the AIF or
AIFM
Article 23(1) (k)The latest annual reportreferred to in Article
22(1)Article 23(1) (l)The procedure andconditions for the issue
and sale of the units

Under Article 77 paragraph 4 of the Act on Investment Trusts and Investment
Corporations of Japan, which applies the requirements of Article 109 paragraph 1 of theCompanies Act to investment corporations, investment corporations are required to treat
unitholders equally depending on the number of units held.
In addition, upon liquidation, the allotment of residual assets to unitholders is required tobe made equally depending on the number units held under Article 77 paragraph 2 item 2
and Article 158 of the ITA.

Not applicable.
Additional information may be found in our most recent semiannual report, which can beviewed at https://nud-reit.co.jp/file/en-ir_library_termfb56c0c6661b5fd0e68737c693684ff0489d0d6d.pdf

The total number of authorized investment units for NUD shall be 10 million units. The
investment units have been listed on the Tokyo Stock Exchange since September 10,
2002.
Secondary market sales and transfers of units will be conducted in accordance with therules of the Tokyo Stock Exchange. Unit prices on the Tokyo Stock Exchange aredetermined on a real-time basis by the equilibrium between bids and offers. The Tokyo
Stock Exchange sets daily price limits, which limit the maximum range of fluctuation
within a single trading day. Daily price limits are set according to the previous day’s closing
price or special quote.

Article 23(1) (m)Latest net asset value ofthe AIF or latest market
price of the unit or shareof the AIF
Article 23(1) (n)Details of the historicalperformance of the AIF,
where available

Article 23(1) (o)Identity of the prime
broker, any material

NUD’s latest investment unit’s price is publicly available at the Tokyo Stock Exchange orfrom financial information vendors (including Reuters, which can be viewed athttps://www.reuters.com/markets/companies/8956.T/ ).

The investment units of NUD were listed on the Tokyo Stock Exchange on September 10,
2002.
The most recent fiscal period performance of the units is as follows.
Fiscal period(six months ended)

Total Assets(JPY million)

Total Net Assets(JPY million)

October 31, 2023
April 30, 2023
October 31, 2022
April 30, 2022
October 31,2021

274,959
277,216
277,449
280,999
266,706

139,289
138,756
137,656
139,431
125,583

Not applicable.

9

Net Assets perunit(base value)(JPY)
99,37698,996
98,211
99,477
95,356arrangements of the AIF
with its prime brokers,
how conflicts of interest
are managed with theprime broker and theprovision in the contract
with the depositary on
the possibility of transfer
and reuse of AIF assets,
and information about
any transfer of liability tothe prime broker that
may exist
Article 23(1) (p)Description of how andwhen periodic
disclosures will be madein relation to leverage,
liquidity and risk profileof the assets, pursuant
to Articles 23(4) and23(5)Article 23(2)The AIFM shall informthe investors before they
invest in the AIF of any
arrangement made by
the depositary tocontractually discharge
itself of liability inaccordance with Article
21(13)The AIFM shall also
inform investors of any
changes with respect todepositary liability
without delay
Article 23(4)(a)Percentage of the AIF's
assets which are subject
to special arrangements
arising from their illiquid
nature. The percentage
shall be calculated as
the net value of thoseassets subject to special
arrangements divided by
the net asset value ofthe AIF concerned
Overview of any special
arrangements, including
whether they relate toside pockets, gates orother arrangements
Valuation methodology
applied to assets which
are subject to sucharrangements
How management and

The AIFM will disclose the matters described in Articles 23(4) and 23(5) periodicallythrough its Internet website or semi-annual report.

Not applicable.

Not applicable.

There are no assets that are subject to special arrangements arising from their illiquid
nature.

There are no such special arrangements.

There are no such special arrangements.

There are no such special arrangements.

10performance fees apply
to such assets
Article 23(4)(b)Any new arrangements
for managing theliquidity of the AIF
For each AIF that the
AIFM manages that is
not an unleveraged
closed-end AIF, notify toinvestors whenever they
make changes to its
liquidity management
systems (which enable
an AIFM to monitor theliquidity risk of the AIF
and to ensure theliquidity profile of theinvestments of the AIF
complies with its
underlying obligations)that are material inaccordance with Article
106(1) of Regulation(EU) No 231/2013 (ie.
there is a substantial
likelihood that areasonable investor,
becoming aware of suchinformation, would
reconsider its
investment in the AIF,
including because suchinformation could
impact an investor’sability to exercise its
rights in relation to its
investment, or otherwise
prejudice the interests of
one or more investors in
the AIF).
Immediately notify
investors where they
activate gates, side
pockets or similar
special arrangements or
where they decide tosuspend redemptions
Overview of changes toliquidity arrangements,
even if not special
arrangements
Terms of redemption
and circumstanceswhere management
discretion applies, where
relevant
Also any voting or otherrestrictions exercisable,
the length of any lock-up

Any new arrangements or change in applicable arrangements will be disclosed at an
appropriate time.
Any new arrangements or change in applicable arrangements will be disclosed at an
appropriate time.

Any new arrangements or change in applicable arrangements will be disclosed at an
appropriate time.

Any new arrangements or change in applicable arrangements will be disclosed at an
appropriate time.

NUD is a closed-end investment corporation, and unitholders are not entitled to request theredemption of their investment.

There are no voting or other restrictions on the rights attaching to units.

11

or any provision
concerning ‘first in line’or ‘pro-rating’ on gatesand suspensions shall be
included
Article 23(4)(c)
The current risk profile of
the AIF and the risk
management systems
employed by the AIFM to
manage those risks

Deposits are exposed to risks of failure of the financial institution holding the deposit andother credit risks, but NUD manages credit risk by restricting the term of the deposit torelatively short periods.
The fund proceeds from borrowings and issuance of Corporate Bonds are used for the
purpose of investing in properties, conducting repairs, paying cash distributions, operating
the AIF, repaying obligations and other activities. These borrowings and Corporate Bonds
are exposed to liquidity risks. NUD strives to reduce the liquidity risks and a risk of risinginterest rates by setting long-term and fix rate and diversifying repayment dates, fee, andso forth.
Derivative transactions are also utilized to hedge the interest rate risks arising from any
borrowing or other debts.

Measures to assess thesensitivity of the AIF’s
portfolio to the most
relevant risks to which
the AIF is or could be
exposedIf risk limits set by the
AIFM have been or are
likely to be exceeded
and where these risk
limits have been
exceeded a descriptionof the circumstances
and the remedial
measures taken
Article 23(5)(a)Any changes to the
maximum amount ofleverage which the AIFM
may employ on behalf of
the AIF, calculated inaccordance with thegross and commitment
methods. This shall
include the original andrevised maximum levelof leverage calculated inaccordance with Articles
7 and 8 of Regulation(EU) No 231/2013,
whereby the level ofleverage shall becalculated as therelevant exposure
divided by the net asset
value of the AIF.
Any right of the reuse ofcollateral or any
guarantee granted under
the leveraging

No such measures have been implemented.

No such situation has occurred.

Any new arrangements or change in applicable arrangements will be disclosed at an
appropriate time.

No such right or guarantee exists.

12

agreement, including thenature of the rights
granted for the reuse ofcollateral and the natureof the guarantees
granted
Details of any change inservice providers relating
to the above.
Article 23(5)(b)Information on the total
amount of leverage
employed by the AIF
calculated in accordancewith the gross andcommitment methods

Any new arrangements or change in applicable arrangements will be disclosed at an
appropriate time.

The Interest-bearing liabilities totaled 122 billion yen as of October 31, 2023.

13

PROMOTION OF ENVIRONMENTAL AND/OR SOCIAL CHARACTERISTICS – SFDR PRECONTRACTUAL DISCLOSURE
Product Name/Legal Entity Identifier: NTT UD REIT Investment Corporation
NTT UD REIT Investment Corporation. (“NUD”) promotes environmental and social characteristics, butdoes not have as its objective a sustainable investment within the meaning of Article 9(1) of Regulation (EU)2019/2088 (“SFDR”). We have no employees in accordance with the prohibition on having employees underthe Act on Investment Trusts and Investment Corporations of Japan, and relies on NTT Urban Development
Asset Management Corporation (“Asset Manager”), to manage and operate the properties in our portfolio.
NUD and the Asset Manager are hereinafter referred to collectively as “we,” “us” or “our.” References to“fiscal year” or “FY” are to the 12 months began or beginning April 1 of the year, unless noted otherwise.
We have no reference benchmark designated for the purposes of attaining the environmental or social
characteristics promoted by our investment units.
Does this financial product have a sustainable investment objective?
☐ Yes
☒ No
☐ It will make a minimum of sustainable ☐ It
promotes
Environmental/Social(E/S)
investments with an environmental
characteristics and while it does not have as its
objective: __%objective a sustainable investment, it will have aminimum proportion of __% of sustainable investments☐ in economic activities that qualify☐ with an environmental objective in economic
as environmentally sustainable
under the EU Taxonomy
activities that qualify as environmentally
sustainable under the EU Taxonomy☐ in economic activities that do not☐ with an environmental objective inqualifyasenvironmentally
sustainable under the EU
economic activities that do not qualify as
Taxonomyenvironmentally sustainable under the EU
Taxonomy☐ with a social objective☐ It will make a minimum of sustainable
investments with a social objective: __%☒ It promotes E/S characteristics, but will not make any
sustainable investments

What environmental and/or social characteristics are promoted by NUD?
We are aiming at business that contributes to the realization of a sustainable society, on the basis of
the Sustainability Vision established by NTT Urban Solutions, Inc., the ultimate parent of the NTT Urban
Solutions Group to which the Asset Manager belongs. Moreover, from the perspective of placing investors’interests over the medium to long term as our top priority, we recognize the importance of ESG(Environmental, Social and Governance) awareness, and work to support ESG awareness in all aspects ofour real estate investment and management operations. Accordingly, we established a sustainability policy
in 2021 and manage our portfolio based on this policy.
NUD does not have a specific index designated as a reference benchmark to determine whether
NUD is aligned with the environmental or social characteristics that it promotes.
We have established targets for energy consumption, CO2 emissions, water consumption and waste
and seek to meet these targets through various initiatives, including improvement of building management,
capital investment, and sustainability training for tenants and property managers.
TK-948767

Energy saving and reduction of CO2 emissions. We promote energy saving efforts and reductionof CO2 emissions in managing our investment assets such as by installing LED lightning at ourproperties. As of October 31, 2023, 58 of our 59 properties were equipped with LED lightning.
We have established the following targets in this regard:o

42% reduction in greenhouse gas (CO₂) emissions (Scope 1 and 2) intensity by FY2030(vs. FY2020) ; andoAchieving net zero greenhouse gas (CO₂) emissions (Scope 1, 2, and 3 total emissions)
by FY2050.

Reducing water use. We have implemented water saving measures such as installment of waterefficient equipment in the restrooms, in case of office buildings, and for hot water, kitchens andshower facilities, in the case of residences. As of October 31, 2023, water-efficient equipment
had been installed at 53 of our 59 properties. Every year we aim to maintain the water use
intensity of our entire portfolio and each property at a level no greater than that of the previous
fiscal year.



Reducing waste. We continue to work on reducing waste and promote recycling. Every year we
aim to improve the recycling rate of waste generated from our entire portfolio over the previous
fiscal year. We provide our tenants with a guidebook on how to separate waste and recycle toencourage recycling and reduce waste.

Including “Green Lease” provisions in our agreements. We have introduced environmental
provisions, which we refer to as “Green Lease” provisions, in the leases with our tenants, underwhich tenants are required to switch to LED lighting in the areas they exclusively occupy andcooperate with us on environmental matters such through sharing data on energy and water
consumption. As of October 31, 2023, Green Lease were introduced at 10 of our 59 properties.

As responsible members of society, we also undertake socially-minded efforts, in dialogue with thetenants, local government, local community, sponsors, officers and employees of the Asset Manager andother stakeholders.


Providing support to tenants and their employees. We conduct a tenant satisfaction survey once
every year to solicit feedback to improve our leasing efforts and ensure stable operation. We
share the survey results with property managers and utilize them to improve our services. For
example, during the fiscal period ended April 30, 2019, we converted, in response to feedback,a gym room that had a few training machines in the common area of Storia Akasaka into abusiness meeting space to make better use of space that tenants had not been using frequently.



AED installation. We have installed AEDs near the entrance at each of our properties. We havemade AEDs available not only to our tenants but also to the local communities by publicizing
their availability at our properties. As of October 31, 2023, AEDs were installed at 25 of our 59
properties.



Installation of emergency supply boxes. We have installed emergency supply boxes in theelevators of our properties in order to provide supplies for the passengers if they become trapped
inside them during emergencies, such as earthquakes. As of October 31, 2023, emergency
supply boxes were installed at 21 of our 59 properties.



Cooperation with government in disasters. We have agreed with local governments to provide
space in our properties for people who are not able to return to their homes at times of disaster.
As of October 31, 2023, eight of our 59 properties were made available for this purpose.

Supporting local communities. We contribute to local communities by supporting local events
such as a summer sprinkling water event (Akihabara UDX), a summer festival (Granpark and
The Kanagawa Science Park R&D Building) and winter tree illumination (NTT CRED
Okayama Building).

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2





Providing support for employees. The Asset Manager regularly provides compliance training
and business training for its officers and employees to uphold high professional ethicalstandards and allow them to acquire advanced expertise. The Asset Manager also supports
employees to obtain qualifications such as the ARES Certified Master by subsidizing expenses
from obtaining qualifications. The Asset Manager also conducts an employee survey to improvetheir work environment and satisfaction levels. Some of our other initiatives include thefollowing.
oAdvancement of women. NTT group, to which the Asset Manager belongs, has establisheda goal of increasing the ratio of female managers to 15% or more by 2025. We haveintroduced a childcare leave system and promote shorter and flexible working hours andencourage women to take paid leave.

oImplementation of regular health exams. Employees’ health is a top priority matter. We not
only encourage our employees to undergo periodic health exams, we also subsidize their
medical exams and influenza vaccinations.

oSpecial leave. In addition to annual paid leave, we offer life plan leave, summer leave,
marriage leave, bereavement leave, maternity leave, sick leave, nursing leave, and longterm care leave.

Business continuity planning. We promote business continuity plans (“BCPs”) for officebuildings and implement disaster prevention measures at residential properties. We conduct
annual disaster prevention and evacuation drills and have established a communication networkthat tenants can use in emergencies.
oSustainable Promotion Committee. In 2021, the Asset Manager established the Sustainable
Promotion Committee, composed of the President & CEO and other full-time Directors,
the Head of each Departments, and the Compliance Officer, in order to address mattersrelated to sustainability. The Sustainability Promotion Committee convenes at least twicea year to review and discuss concrete targets and measures, track progress and establish
action plans to achieve concrete targets, to promote environmental awareness andimplement other sustainability initiatives. The Sustainability Promotion Committee also
contributes to discussions for the NTT Group on ESG management in the real estate sector.

What sustainability indicators are used to measure the attainment of each of the environmental or social
characteristics promoted by NUD?
We use the following indicators to measure the attainment of the environmental or social
characteristics we promote.
TK-948767

Sustainability certifications. To track the environmental performance of our properties, we relyon certifications issued by third-party organizations.
o

CASBEE Real Estate Certification. CASBEE (Comprehensive System for Building
Environmental Efficiency) is a system established under the leadership of Japan’s
Ministry of Land, Infrastructure, Transport and Tourism for the purpose of recognizing
and assessing well-managed properties with significant environmental benefits. As of
October 31, 2023, we had received the S rank for 11 properties and the A rank for 11
properties in a ranking system composed of S (superior), A (very good), B+ (good), B(slightly poor) and C (poor).

o

DBJ Green Building Certification. To promote the environmental performance,
security measures and disaster prevention measures at properties, the DBJ Green
Building Certification system assesses and certifies buildings using a scoring model
developed by the Development Bank of Japan (“DBJ”). As of October 31, 2023, we
had received five stars for two properties, four stars for two properties, three stars for3

13 properties, and two stars for six properties out of the maximum rating system of fivestars.

o

Building-housing Energy-efficiency Labeling System (BELS) Assessment. The BELS
system was created for the purpose of implementing accurate evaluation and labelingof nonresidential buildings’ energy-efficiency performance by third-party
organizations based on the evaluation guidelines for energy-efficiency labeling for
non-residential buildings issued by the Ministry of Land, Infrastructure, Transport andTourism of Japan in October 2013. As of October 31, 2023, we had received five stars
for one property and three stars for two properties out of the maximum rating systemof five stars.

o

Low-Carbon Model Building Benchmark. In May 2012, the Low-Carbon Model
Building Benchmark was established by the Tokyo metropolitan government for the
purpose of creating a real estate market that values low-carbon buildings. As of October
31, 2023, we had received the A3 rank for one property, the A2 rank for one property,
the A2- rank for one property, the A1 rank for one property and the A1- rank for one
property out of the ranking system featuring A4 (CO2 emissions are under 55%
compared to the average emissions), A3+ to A3- (CO2 emissions are 55% or more and
70% or less compared to the average emissions), A2+ to A2- (CO2 emissions are 70%
or more and 85% or less compared to the average emissions), A1+ to A1- (CO2emissions are 85% or more and 100% or less compared to the average emissions), B2+
to B2- (CO2 emissions are 100% or more and 115% or less compared to the average
emissions), B1 (CO2 emissions are 115% or more and 150% or less compared to theaverage emissions) and C (CO2 emissions are not less than 150% compared to theaverage emissions).

GRESB Real Estate Assessment and Rating. Established by European pension fund groups,
GRESB is a benchmark for measuring real estate companies’ and institutional investors’commitment to sustainability. Leading European, U.S., and Asian institutional investors use
this benchmark in selecting investment targets. In the 2023 GRESB Real Estate Assessment,
we acquired the “Green Star,” which is the highly evaluated and is given based on evaluationof the management component, which evaluates policies and organizational structure for ESG
promotion, and the performance component, which assesses environmental performance andtenant engagement of properties owned, for the seventh consecutive year. In addition, also in
2023, we received “5-Stars” in the 5-star GRESB Rating, which is an overall rating given basedon the global ranking, out of the maximum rating of five, for the second consecutive year. We
also received the A rank, which is the highest rank, regarding the GRESB Disclosure
Assessment due to our eminent information disclosure in 2023 for the fourth consecutive year.

What are the objectives of the sustainable investments that the financial product partially intends to makeand how does the sustainable investment contribute to such objectives?
Not applicable.
How do the sustainable investments that the financial product partially intends to make, not causesignificant harm to any environmental or social sustainable investment objective?
Not applicable.
Principal Adverse Impact
Does NUD consider principal adverse impacts on sustainability factors?
We collect on an ongoing basis select information on our existing portfolio regarding the principal
adverse impact indicators, including exposure to fossil fuels through investment assets, exposure to energyinefficient investment assets, GHG emissions and energy consumption intensity. We aim to manage the risk
connected to principal adverse impacts from our investment decisions in several ways, including generalscreening criteria and due diligence.
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4

Exposure to fossil fuels through assets. We do not invest in real estate assets involved in theextraction, storage, transport or manufacture of fossil fuels.

Exposure to energy-inefficient investment assets. We consider properties other than Eligible
Green Assets (as defined below), to be energy-inefficient. As of October 31, 2023, 24.7% of
our properties were not Eligible Green Assets, and as of April 30, 2023, 35.1% of our properties
were not Eligible Green Assets based on acquisition price. As described in more detail above,
we implement as appropriate measures to reduce the environmental impact of these properties,
including by obtaining environmental certifications.



Energy consumption intensity. Energy consumption intensity of the office buildings in our
properties was 0.169 MWh/m2in FY2021 and 0.165 MWh/㎡ in FY2022.

We believe that investment decisions that negatively affect climate or other environment-relatedresources, or have negative implications for society, can have a significant impact to risk and value creationfor our unitholders. To this end, we consider the principal adverse impacts of our investment decisions on
the above sustainability factors throughout all major steps of the investment decision and management
process throughout the lifecycle of the properties in our portfolio.
Investment Strategy
What investment strategy does NUD follow?
We take into account sustainability in our investment process as follows.


Investment policy. We primarily invest in office buildings and residential buildings located in
metropolitan areas to achieve stable growth and stable revenues.



Due diligence. When acquiring a property, we conduct due diligence review and investigate
into soil contamination and toxic substances such as asbestos and PCBs. We obtain real estateappraisal reports and engineering reports in addition to receiving disclosures from the sellers.



Selection of properties. An investment decision is made upon comprehensive review of anumber of factors, including the mid-term to long-term real estate market trends, profitability,
the property’s scale, specifications and environment. In this decision-making process, weevaluate environmental issues discovered through due diligence review. Furthermore, we haveestablished a green finance framework to conduct green financing.

TK-948767oGreen Finance Framework. Green finance refers to financing with loans obtained or
securities issued for the purpose of acquiring assets needed for green projects (i.e.
environmentally friendly investments and/or projects). In general, green finance isconducted in accordance with the Green Bond Principles stipulated by the International
Capital Markets Association. Our green finance framework consists of green bonds andgreen loans where proceeds obtained through green finance are allocated as funds foracquiring Eligible Green Assets (as defined below) or refinancing for funds to acquire
Eligible Green Assets. As of March 31, 2024, we had issued ¥20.4 billion in green bonds
and green loans under our green finance framework.

oEligible Green Assets. Eligible Green Assets are assets that have received or are expected
to receive one of DBJ Green Building certification (3-star rating or better), CASBEE Real
Estate certification (B+ ranking or better), BELS Assessment (3-star rating or better) andLeadership in Energy & Environmental Design (LEED) certification (Silver ranking or
better) or assets whose Energy Reduction Rate (ERR), an energy efficiency indicator
established under Act on Improvement of Energy Consumption Performance of Buildings,
is over 30%. Eligible Green Assets are selected by the Asset Manager’s Finance
Department.

5oThird-party Eligibility Assessment. Our Green Finance Framework has been evaluated by
Japan Credit Rating Agency, Ltd. (JCR) pursuant to the JCR Green Finance Evaluation
Framework. JCR evaluates whether any given project conducted in accordance with our
Green Finance Evaluation Framework may be deemed to be a green project as well as ourmanagement/operations and transparency. Our Green Finance Framework was assigned“Green 1(F),” the highest evaluation grade under the JCR Green Finance Evaluation
Framework by JCR in 2021.

What are the binding elements of the investment strategy used to select the investments to attain each of
the environmental or social characteristics promoted by NUD?
A binding element of the investment strategy is our green finance framework, which involves
determination of whether a target property has satisfied certain criteria to qualify as an Eligible Green Asset.
The Eligible Green Assets are evaluated and selected based on sustainability policies and relevant criteria
and selected by the Asset Manager’s Finance Department, subject to approval by the Board of Directors of
NUD following an Investment Committee meeting among the Asset Manager’s executives. The criteria aredisclosed on our website.
We also annually update and disclose the appropriations status of green financing proceeds and thebalance of green financing proceeds, as long as the balance of green financing proceeds remains.
In addition, when we select assets for investment, we investigate legal compliance, whether there
are toxic substances such as asbestos and PCB, whether there is soil contamination and other factors throughour due diligence.
What is the committed minimum rate to reduce the scope of the investments considered prior to theapplication of that investment strategy?
In March 2021, the Asset Manager has established the Sustainable Promotion Committee, composedof the President & CEO and other full-time Directors, the Head of each Departments and the Compliance
Officer, in order to address matters related to sustainability. The Sustainability Promotion Committee
convenes at least twice a year to review and discuss concrete targets and measures, track progress andestablish action plans to achieve concrete targets, to promote environmental awareness and implement othersustainability initiatives, based on the Sustainability Policy and the discussion in the committee.
Prior to our investment in a property, we conduct due diligence review of the property, including
building safety and soil contamination. We also do not consider investing in properties that do not meet thestandards for soil contamination and other environmental contamination in accordance with the Air Pollution
Control Act and the Soil Contamination Countermeasures Act of Japan and other environmental laws andordinances, unless the defects are deemed curable immediately after the investment.
What is the policy to assess good governance practices of the investee companies and NUD?
NUD invests directly or indirectly through trust beneficiary interests in real estate and real estaterelated assets. Therefore, due diligence review (including the assessment of good governance practices) in
relation to investee companies is not applicable.
While there is no third-party rating used for assessment of NUD’s governance practices, NUD and
the Asset Manager have introduced the following measures to assess and enhance NUD’s governancesystems:

TK-948767

Internal audit system. In order to ensure that we have appropriate operational structure subject
to an effective internal audit system, we have established the Compliance Section, which is incharge of compliance-related matters, and appointed the Compliance Officer, who supervises
compliance-related matters and monitor compliance.

6

Related-party transactions. NUD is not allowed to carry out a related-party transaction if thetransaction value exceeds a certain threshold, without the approval of NUD’s Board of Directors.



Adoption of performance-linked asset management fees. NUD pays performance-linked fees
based on asset value to the Asset Manager to align the interest of NUD’s unitholders and theinterest of the Asset Manager.



Reinforcement of corporate governance. We conduct compliance training to ensure officers andemployees maintain a high level of compliance awareness (five times in 2022 and four times in2023). Also, we disclose our decision-making process to ensure transparency and promotecompliance, with respect to which responsibilities are broken up as follows:oCompliance Section: In charge of compliance-related matters such as establishment andreview of compliance manuals, investigation into matters referred by the Investment
Committee, compliance training, and monitoring the property acquisition process;oCompliance Officer: Supervise compliance-related matters and monitor compliance bymanaging compliance manuals, reporting compliance status to the Compliance Committee,
participating in Investment Committee meetings and liaise with the Compliance Committee
as necessary; andoCompliance Committee: Deliberate on and adopt resolutions on the matters approved by
the Compliance Officer.

Information disclosure: We proactively disclose information on ESG matters such as the statusof environmental certificates and assessments.

Asset Allocation
What is the asset allocation planned for NUD?
As of October 31, 2023, 75.3% of the properties in the portfolio were Eligible Green Assets, and24.7% were nonqualified assets based on acquisition price.

75.3% is #1 Aligned with E/S#1B Other E/S characteristics

Investments of NUD
24.7% qualifies as #2 Other#1 Aligned with E/S characteristics includes the investments of the financial product used to attain theenvironmental or social characteristics promoted by the financial product.
The sub-category #1B Other E/S characteristics covers investments aligned with the environmental orsocial characteristics that do not qualify as sustainable investments.
#2 Other includes the remaining investments of the financial product which are neither aligned with theenvironmental or social characteristics, nor are qualified as sustainable investments.
How does the use of derivatives attain the environmental or social characteristics promoted by NUD?
Not applicable.

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7

To what minimum extent are sustainable investments with an environmental objective aligned with the
EU Taxonomy?
Not applicable.
Does NUD invest in fossil gas and/or nuclear energy related activities that comply with the EU
Taxonomy?
Not applicable. NUD does not invest in real estate assets involved in fossil gas and/or nuclear
energy-related activities.
What is the minimum share of investments in transitional and enabling activities?
Not applicable.
What is the minimum share of sustainable investments with an environmental objective that are notaligned with the EU Taxonomy?
Not applicable.
What is the minimum share of socially sustainable investments?
Not applicable.
What investments are included under “#2 Other,” what is their purpose and are there any minimum
environmental or social safeguards?
As of October 31, 2023, 24.7% of our properties were not Eligible Green Assets based on acquisition
price. We have invested in properties that are not Eligible Green Assets, such as office buildings andresidences, in accordance with our investment guidelines. In most of those cases, we could not obtain thecooperation of the previous property owners to obtain environmental certifications prior to our acquisitions,and we will do our best to obtain appropriate environmental certifications in due course. We investigate thepresence of harmful substances, the history of past land usages and the environment of the soil wheninvesting in properties. We do not invest in properties on which appropriate measures are taken under the
Soil Contamination Countermeasures Act of Japan and other environmental laws and ordinances.
Index as Reference Benchmark
Is a specific index designated as a reference benchmark to determine whether NUD is aligned with theenvironmental or social characteristics that it promotes?
NUD does not have a specific index designated as a reference benchmark to determine whether
NUD is aligned with the environmental or social characteristics that it promotes. However, our investment
units have been included in the Nikkei ESG-REIT Index (“Nikkei ESG”) since 2020. Nikkei ESG is an index
composed of Tokyo Stock Exchange-listed REITs, which are included based on GRESB’s evaluations on
ESG indicators. Its constituents are reviewed and updated once a year.
How is the reference benchmark continuously aligned with each of the environmental or social
characteristics promoted by NUD?
Not applicable.
Where can the methodology used for the calculation of the designated index be found?
The methodology used for the calculation of the designated index can be found on the website:
https://indexes.nikkei.co.jp/en/nkave/index/profile?idx=nk225

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How is the alignment of the investment strategy with the methodology of the index ensured on acontinuous basis?
We ensure the alignment of our investment strategy with the methodology of Nikkei ESG throughinvestments in energy saving or environmentally certified buildings.
How does the designated index differ from a relevant broad market index?
See above.
More Product-specific Information
Where can I find more product-specific information online?
More product-specificreit.co.jp/en/esg/index.html.

information

can

be

found

on

the

website:https://nud-Note Regarding the EU Taxonomy Regulation
As set out above, NUD promotes certain environmental characteristics.
The Asset Manager is required, under Regulation (EU) 2020/852 (the “EU Taxonomy Regulation”),
to disclose whether its assets are aligned with the environmental objectives formulated in the EU Taxonomy
regulation. The EU Taxonomy Regulation is to be complemented by technical standards and screening
criteria. The technical screening criteria for the first two environmental objectives (climate change mitigationand climate change adaptation) were adopted in December 2021 and amended in June 2023. The amended
criteria apply as of January 1, 2024. The technical screening criteria for the other four environmental
objectives (sustainable use and protection of water and marine resources, transition to a circular economy,
pollution prevention and control, and protection and restoration of biodiversity and ecosystems) wereadopted in June 2023. They apply as of January 1, 2024.
NUD invests in economic activities that are eligible under the EU Taxonomy Regulation in respectof climate change mitigation and/or climate change adaptation. This means that screening criteria for theseinvestments have been or will be developed. The Asset Manager expressly states that in view of the fact thatthe regulations are still under development or have only recently been adopted and/or amended and the fact
that, as a result thereof, data on alignment of NUD’s investments with these environmental objectives andclimate related goals in line with EU Taxonomy Regulation are not sufficiently available, the Asset Manager
is not currently in a position to disclose on an accurate and reliable basis to what extent NUD’s investments
technically qualify as Taxonomy-aligned or “environmentally sustainable” within the specific meaning of
the EU Taxonomy Regulation. NUD’s investments may have a positive contribution to these environmental
objectives and may therefore eventually be considered Taxonomy-aligned, but at this stage, the AssetManager is required to state that there is no minimum proportion of NUD’s investments that qualify as such.
The Asset Manager further states that the “do no significant harm” principle applies only to thoseinvestments underlying the financial product that takes into account the EU criteria for environmentally
sustainable economic activities. The investments underlying the other portion of this financial product do
not take into account the EU criteria for environmentally sustainable economic activities.
INTEGRATION OF SUSTAINABILITY RISKS IN THE INVESTMENT DECISIONS, AND THE
IMPACT OF SUCH RISKS ON THE RETURNS OF NUD (SFDR ARTICLE 6 DISCLOSURE)
NUD and the Asset Manager address sustainability risks by taking into account environmental,social and governance, or ESG, factors in our investment decision process and on a continuous basis.
We have established the Sustainability Promotion Committee to review sustainability targets andmeasures in accordance with our Sustainability Policy. The Sustainability Promotion Committee convenes
at least twice a year to review concrete targets and measures, track the status of progress and instruct as
required under the objective of promoting environmental awareness and other sustainability such as
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information disclosure and cooperation with our external stakeholders, based on the Sustainability Policy.
Furthermore, we have established green finance framework that consists of green bonds and green loans
where proceeds obtained through green finance are allocated as funds for acquiring Eligible Green Assets orrefinancing for funds to acquire Eligible Green Assets.
As stated above, we have instituted a number of initiatives, at both the portfolio level and theproperty level, to promote the environmental and social characteristics. Such initiatives include energysaving initiatives, waste management initiatives and initiatives for employees.
While sustainability issues will severely impact our business activities, we believe that such issues
may also become potential business opportunities to create new value for sustainable growth. Accordingly,
we position our commitment to sustainability as a top priority in our management strategies. We also believethat integrating sustainability factors alongside traditional financial and operational metrics in our investment
decision process helps us make a more holistic assessment of a property’s risks and opportunities and iscommensurate with the pursuit of superior risk-adjusted returns.
Physical risks
The assets in which NUD invests are exposed to physical climate risks. These can manifest
themselves through, for example, floods, storms, heat and limited access to natural resources. This can meanthat the assets in which the fund invests become worthless. Specifically for NUD, the following risk isparticularly relevant.
Flood risk: for NUD this is a relevant risk because the part of assets in which NUD invests locatedin an area with a flood risk. If flooding occurs in this area, this will probably have a negative effect on thevalue of these assets. This may include physical damage to the properties and tenants’ premises. The AssetManager addresses this by improving resilience through countermeasures for rising tides and supplementing
portfolio with disaster supplies and comprehensive BCPs facilities, etc.
Transition risks
The assets in which the fund invests are exposed to transition risks. These can manifest themselves
through, for example, changes in regulations, technical developments and/or social developments. Suchdevelopments may mean that the assets in which the fund invests become worthless. Specifically for NUD,
the following risk is relevant.
General transition risk: NUD generally invests in real estate. New government policy, technicaldevelopments and/or changes in consumer preferences may affect the operations of these real estate. Suchdevelopments may result in, among other things, increase in operation costs resulting from the introductionof a carbon tax. The Asset Manager addresses this through introducing renewable energy, reducing waste(incinerator, landfill), promoting GHG emission reduction across the supply chain through green
procurement, setting carbon reduction targets, introducing Environmental Management System andmonitoring GHG emissions for the entire portfolio.

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