PRINCIPAL ADVERSE IMPACT STATEMENT
The following is the adverse sustainability impact statement of Japan Real Estate Investment Corporation (“JRE”) pursuant to Regulation (EU) 2019/2088(“SFDR”). JRE has no employees in accordance with the prohibition on having employees under the Act on Investment Trusts and Investment Corporationsof Japan, and relies on Japan Real Estate Asset Management Co., Ltd. (the “Asset Manager”) to manage and operate the properties in the portfolio. JREand 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 specified in line with the fiscal year of the Asset Manager, unless noted otherwise.
Please note that SFDR requirements, including the scope of their application to issuers outside the European Economic Area, continue to evolve. We are
therefore taking a principles-based approach to compliance with the SFDR disclosure standards, which are subject to change.
1. Summary
Pursuant to Article 4 of the Delegated Regulation C(2022)1931 supplementing SFDR (the “SFDR Delegated Regulation”), JRE is required to publish on
its website the information referred to therein covering the period of one calendar year. JRE is a Japanese real estate investment trust, commonly known
as J-REIT, and has no employees, relying on the Asset Manager for the management and operation of its properties. The Asset Manager does not operate
based on a calendar year, but operates based on fiscal year ending in March of every year. A recalculation and translation of the data into the reference
period of one calendar year would most likely lead to inaccuracies and would therefore provide a potentially less accurate overview of the required
information than using the approved and validated data for the period from April 1, 2023 to March 31, 2024. This reference period is sufficiently compatible
with, and shows results that do not materially differ from, those that would be produced using the calendar year-based reference period noted in the SFDR
Delegated Regulation.
We consider principal adverse impacts of our investment decisions on sustainability factors. The present statement is our consolidated statement of theprincipal adverse impacts on sustainability factors (“PAI”). The statement covers the reference period from April 1, 2023 to March 31, 2024. The statement
will be reviewed at least once during a year.
We believe that our sustainability initiatives are essential for our sustainable growth. We improve long-term returns of investors and contribute to therealization of sustainable society and urban development by implementing initiatives that address social issues. Under our sustainability policies andframeworks, we take actions on climate change, including energy conservation, and being resilient in times of disasters.
We use the definition of PAI as described in Recital 20 of SFDR being “those impacts of investment decisions and advice that result in negative effects onsustainability factors,” with sustainability factors referring to environmental, social and employee matters, respect for human rights, anti‐corruption andanti‐bribery matters as defined in article 2 (24) of SFDR.
We believe that investment decisions that negatively affect climate or other environment-related resources, or have negative implications for society, canhave a significant impact to risk and value creation for our unitholders. To this end, we consider PAI of our investment decisions throughout all major stepsof the investment decision and property management process throughout the lifecycle of the properties in our portfolio.

12. Description of principal adverse sustainability impacts
Nearly all types of economic activity have the potential to impact various PAI indicators, both positively and adversely. We aim to manage the risk
connected to PAI from our investment decisions in several ways, including general screening criteria, due diligence and our environmental, social, andgovernance (“ESG”) initiatives. Some of the PAI indicators listed below are currently already being monitored and reported. As the availability of data
improves, it is our intention that more indicators will be added.

Table 1
Description of the principal adverse impacts on sustainability factors
JRE does not invest in investee companies, but invests in real estate. As adverse sustainability indicators 1-16 as contained in Table 1 of Annex 1 of theSFDR Delegated Regulation pertain to investee companies, these are not included in this PAI statement, which pertains to real estate investments.
Indicators applicable to investments in real estate assets

Adverse sustainability
indicator

Fossilfuels

17.
Exposure
to fossil
fuels
through
real estate
assetsEnergyefficiency

18.
Exposure
to energyinefficient
real estate
assetsMetricShare ofinvestments inreal estate
assetsinvolved in
the extraction,
storage,transport or
manufactureof fossil fuels
Share ofinvestments inenergyinefficient
real estate
assets

Impact in FY2023

Impact in FY2022

Impact in FY2021

N/A

N/A

N/A

JRE does not invest in realestate assets involved in theextraction, storage, transport
or manufacture of fossil fuels.

N/A

As of March 31,2024, 23.6% of ourproperties were not“Green Assets” (asdefined to the right)
based on gross floorarea of ownedbuildings.

As of March 31,2023, 23.7% of ourproperties were not“Green Assets” basedon gross floor area ofowned buildings.

As of March 31,2022, 25.0% of ourproperties were not“Green Assets” basedon gross floor area ofowned buildings.

To track the environmental
performance of our properties,
we rely on certifications
issued by third-party
organizations, such as thegreen building certification of
the Development Bank ofJapan (“DBJ”),

We implement as
appropriate
measures to reduce
their environmental
impact following
acquisition,including byobtaining

2Explanation

Actions taken andactions planned
and targets set for
the next reference
periodComprehensive Assessment
System for Built Environment
Efficiency (“CASBEE”)
certification, and otherequivalent certifications. We
call our properties that haveacquired one of (i) DBJ Green
Building Certification, (ii)
CASBEE for Real Estatecertification and (iii) Building
Energy-efficiency Labeling
System (“BELS”)
certification, “Green Assets.”
Please note that properties
which are not classified asGreen Assets are notnecessarily energy-inefficientbecause various measures toreduce energy consumption
have also been taken for thoseassets. In addition, we trackand monitor energyconsumption related data
every year and introduce
appropriate measures toaddress any issue foundthrough such tracking andmonitoring.

environmental
certifications suchas DBJ Green
Building
Certification or
CASBEE for Real
Estate certification,
installing LED lightbulbs andintroducing
renewable energy.
We plan to maintainthe percentage ofGreen Assets atmore than 90% ofJRE’s properties.

Table 2
Additional climate and other environment-related indicators
JRE does not invest in investee companies, but invests in real estate. As additional climate and other environment-related indicators 1-17 as contained inTable 2 of Annex 1 of the SFDR Delegated Regulation pertain to investee companies, these are not included in this PAI statement, which pertains to realestate investments.
CLIMATE AND OTHER ENVIRONMNT RELATED INDICATORS
Adverse sustainabilityimpact

Adverse sustainability impact (qualitative or quantitative)
Indicators applicable to investments in real estate assets

3MetricEnergy consumption

19. Energy consumption intensity
Energy consumption of owned properties was 0.179 MWh/m² in FY2023, 0.170 MWh/m² in FY2022 and0.165 MWh/m² in FY2021.

Energy consumption in GWh ofowned real estate assets per squaremeter

We aim to reduce energy consumption using various methods, such as renovation of existing buildings to
make them energy-saving. As of March 31, 2024 and as of March 31 of 2023, three of our properties arecertified as ZEB Ready (energy savings of greater than 50%) and one property is certified as ZEB Oriented(gross floor area 10,000 m2 or more and energy savings beyond the regulation for each application) as
compared to two properties certified as ZEB Ready as of March 31, 2022.

Table 3
Additional indicators for social and employee, respect for human rights, anti-corruption and anti-bribery matters
JRE has no employees in accordance with the prohibition on having employees under the Act on Investment Trusts and Investment Corporations ofJapan, and relies on the Asset Manager to manage and operate the properties in our portfolio. Accordingly, additional indicators for social andemployee, respect for human rights, anti-corruption and anti-bribery matters in this PAI statement pertain to the Asset Manager and the tenants of theproperties in our portfolio, to the extent available.
SOCIAL AND EMPLOYEE, RESPECT FOR HUMAN RIGHTS, ANTI-CORRUPTION AND ANTI-BRIBERY MATTERS
Adverse sustainability
impactAdverse sustainability impact (qualitative or quantitative)

MetricIndicators applicable to investments to the Asset Manager or tenantsSocial and employeematters

Anti-corruption and antibribery

2. Rate of accidents
We believe that the physical and mental health of employees is essential for the sustainable growth of ourcorporate value. Based on this understanding, we implement various measures to promote the physical andmental health of employees, such a health consultation service that employees can use to consult about theirhealth and take a stress check.
15. Lack of anti-corruption and anti-bribery policies
We believe that any relationship with anti-social forces could lead to corruption and bribery. Our propertymanagers confirm whether a tenant itself is an anti-social force or has any relationship with anti-socialforces when we enter into or renew a lease with the tenant. In addition, the Asset Manager conducts anannual survey to confirm such status of each tenant.

Rate of accidents in investee
companies expressed as aweighted average
During April 1, 2023 to March 31,
2024, there is no worker injuries.
Share of investments in entities
without policies on anti-corruption
and anti- bribery consistent withthe United Nations Convention
against Corruption
As of March 31, 2024, weconfirmed that there is no tenant
which falls into or has any4

relationship with anti-social forcesin our properties.

For descriptions of actions which JRE takes and will take with respect to the PAI indicators, please refer to our ESG website with respect to JRE: https://jreesg.com/en/

3. Description of policies to identify and prioritize principal adverse sustainability impacts
Subject to data availability, we monitor the selected PAI indicators for the existing properties in our portfolio.
We are committed to pursuing social sustainability, making socially responsible investments, and maximizing unitholder value by being mindful of theenvironment, contributing to society, and enhancing governance. We view ESG-related initiatives as essential for a business to be both sustainable andstable, and are committed to implementing these initiatives in cooperation with our stakeholders. On this belief, we have established a Sustainability Policy
to implement various ESG initiatives and the Sustainability Committee to promote this policy in May 2016. In this policy, we set the following goals: (i)climate change initiative (promoting decarbonization and strengthening resilience), (ii) contribution to resource conservation including water and resource
recycling, (iii) contribution to conserving biodiversity and ecosystem, (iv) enhancement of tenants’ health and well-being, and safety, (v) creating aworkplace where a diverse workforce can thrive, (vi) enhancement of governance systems, and (vii) stakeholder engagement through information disclosureand ESG evaluations. Based on this policy, prior to our investment in a property, we conduct due diligence review of the property, including ESG duediligence, which includes selected PAI indicators. The due diligence findings related to selected PAI indicators are reported and reviewed prior to theinvestment decision.
Moreover, in order to realize sustainability in our asset management while maximizing our portfolio value, we consider ESG factors in our investment andasset management process. In particular, in December 2020, we added the following factors to the assessment criteria (in addition to factors such as location
and building specifications) that we consider when acquiring properties: (i) green building certifications and (ii) environmental performance including CO2emissions. In addition, we have established a green bond framework and a sustainability-linked loans framework to enable us to have a choice of green
financing to provide investors with investment opportunities of environmental and/or social significance.
Furthermore, as mentioned above, the Sustainability Policy establishes goals for our employees and officers. We believe it is important to develop each of
their abilities and promote a healthy working environment to undertake quality asset management. Our selection of the PAI indicator “rate of accidents”
has been made from this perspective.
In addition, the Asset Manager believes that compliance is a top priority issue and continuously makes efforts to achieve full compliance to enhance thevalue of its business operation both qualitatively and quantitatively. In addition to adopting a compliance promotion structure, the Asset Manager follows
the Mitsubishi Estate Group’s policies to prevent fraud and corruption, such as the Mitsubishi Estate Group Basic Regulations on the Prevention ofCorruption, adopted in 2013, and the Mitsubishi Estate Group Anti-Corruption Guidelines, adopted in 2018. Our selection of the PAI indicator “lack ofanti-corruption and anti-bribery policies” has been made from this perspective.

5For further information, please refer to our ESG website: https://jre-esg.com/en/

4. Engagement policies
Due diligence and screening
As part of due diligence review prior to investment in a property, the Asset Manager conducts due diligence on the property, including environment
assessment and evaluation of earthquake resistance and probable maximum loss. The Asset Manager also reviews each property’s green building
certification and environmental performance including CO2 emissions at the time of acquisition. In addition to the review of environmental issues discovered
through due diligence review, we evaluate risks associated with climate change, environmental issues, human rights and social challenges, including healthand safety.
The Asset Manager’s investment decision-making process involves assessment of material ESG-related risks and opportunities to ensure that ourinvestment strategy is sustainable. With each acquisition opportunity, JRE and the Asset Manager review ESG-related due diligence findings and risk
assessment. These findings and assessment are deliberated at the Asset Manager’s Investment Management Council, where a final decision is made on
the investment.
In addition, we monitor and track energy consumption, greenhouse gas emissions, water usage and waste amounts at our properties.
Engagement
JRE has increasingly entered into Green Leases that require tenants to achieve certain operational improvement and install energy-efficient retrofits.
Specifically, Green Leases include provisions requiring each party to cooperate with the other party on measures to achieve sustainability targets and obtainenvironmental certifications, and to share energy-consumption and water usage data.
To create sustainable society through asset management, the Asset Manager has established a Green Procurement Policy to promote ESG-related
engagement within the whole value chain of our portfolio and specify criteria to select and assess products and suppliers. In addition, when selecting
property management companies, we assess their sustainability-related initiatives including energy-saving and reduction of greenhouse gas emission,
appropriate water and waste management and recycling promotion, and control and reduction of hazardous chemical substances. Furthermore, we
periodically monitor property management companies’ compliance with sustainability requirements.

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5. References to international standards
The Asset Manager has become a signatory to Principles for Responsible Investment (PRI), and Mitsubishi Estate Group, which includes the Asset Manager,
was registered as a participant of the United Nations Global Compact (UNGC) after our sponsor, Mitsubishi Estate Co., Ltd., became a signatory of UNGC.

6. Historical comparison
See Table 1 and Table 2 above.

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