PROMOTION OF ENVIRONMENTAL AND/OR SOCIAL CHARACTERISTICS (SUMMARY
OF SFDR ARTICLE 8 PRE-CONTRACTUAL DISCLOSURE)
What environmental and/or social characteristics are promoted by Nippon Accommodations Fund?
We invest in “accommodation assets”, which include rental apartments, dormitories, serviced apartments, seniorresidential properties, corporate housing and hotels; in particular, our current investments are focused on newly
developed residential properties that address ongoing social and lifestyle changes. By region, approximately 80
percent of our properties are in the 23 wards of Tokyo. As we increasingly confront environmental issues such as
climate change and socio-structural changes in Japan such as a shrinking and rapidly-aging population due todeclining birthrates, ESG initiatives have become essential to our asset management activities and to achievesustainable growth. In April 2016, we and Mitsui Fudosan Accommodations Fund Management Co., Ltd. (the“Asset Manager”) established a Sustainability Policy in line with the environmental policy and policy for social
contribution initiatives of the Mitsui Fudosan Group, to which we belong. Since then, we have implemented
various environmental initiatives at our properties that include addressing climate change, energy saving andreduction of CO2 emissions, preserving water environment and promoting resource saving and waste reduction,
introduction of renewable energy, collaboration with the Asset Manager and tenant, environmental considerationin supply chain, environmental consideration in supply chain. In addition, our social initiatives include initiatives
for employees, such as support for acquisition of qualification, support for education and training, goal-setting
and performance evaluation, periodic employee survey and consultation with the compliance officer, improving
tenant satisfaction, supply chain initiatives and contribution to local community.

What sustainability indicators are used to measure the attainment of the environmental or social
characteristics promoted by Nippon Accommodations Fund?
We use the following indicators to measure the attainment of the environmental and social characteristics wepromote.
•Environmental certification of properties. To track the environmental performance of our properties, we relyon Green Building Certifications issued by the Development Bank of Japan’s (“DBJ”). The DBJ GreenBuilding Certification was launched in April 2011 for the purpose of supporting properties that give propercare to the environment and society. As of February 28, 2022, we had acquired five stars out of DBJ’s fivestar ranking system for three of our properties and four stars out of DBJ’s five-star ranking system for fourof our properties. As of February 28, 2022, our total floor space certified was 231,343.27 m2, representing
30.6% of the total floor space for our portfolio.

•ESG assessment. To track our ESG performance, we obtain third-party assessments, such as GRESB Real
Estate Assessment (“GRESB”), which is an annual benchmarking assessment to measure the level of ESG
integration achieved by real estate companies and funds. Launched in 2009 by a group of major European
pension funds that played leading roles in launching Principles for Responsible Investment (PRI), the GRESB
framework looks at the sustainability efforts of real estate companies and REITs, rather than at the property
level. As of October 15, 2021, we received a “Green Star” rating for high environmental marks on themanagement component and performance component, and had also acquired 3 stars out of GRESB’s 5-starrating system.

•Assurance of environmental performance data. We have received an assurance report by Deloitte Tohmatsu
Sustainability Co., Ltd. with respect to our 2020 environmental performance data, which include energy
consumption, CO2 emissions from energy consumption and water usage, confirming that such data wereprepared in accordance with our calculation and reporting standards and therefore that such data were reliable.

What investment strategy does Nippon Accommodations Fund follow?
We invest in “accommodation assets”, which include rental apartments, dormitories, serviced apartments, seniorresidential properties, corporate housing and hotels; in particular, our current investments are focused on newly
developed residential properties that address ongoing social and lifestyle changes. We believe that being
responsive to the diverse needs and desires of residents and others users of our properties, and their satisfaction
with the space and time of their stay, contributes to maximizing the value of our properties.

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In order to ensure that our asset management is sustainable while meeting the increasingly diverse needs anddesires of our customers, we established the Sustainability Policy in April 2016 to give significant consideration
to ESG factors in our investment and asset management processes. We believe that our Green Finance Framework,
under which we raise funds to be applied to green assets, strengthens our funding base by expanding the group ofinvestors interested in ESG investments and financing. The key elements of our Green Finance Framework are asfollows:•Use of proceeds. We issue green bonds or obtain green loans (collectively referred to as “green finance”)
when we intend to use the proceeds toward funds for acquisition of an eligible green asset (defined below) or
funds for repayment of existing loans or redemption of investment corporation bonds that were procured for
acquisition of eligible green assets. As of February 28, 2022, we had seven eligible green assets in ourportfolio (30.6% of our portfolio based on gross floor area), representing a total acquisition price of¥81.1billion.

•Eligibility criteria. Assets for which any of the following certifications from a third-party certification body
have been or will be obtained (“eligible green assets”): 3, 4, or 5 Stars under the DBJ Green Building
Certification; 3 Stars, 4 Stars, or 5 Stars under the BELS Certification; B+, A, or S rank under the CASBEE
certification for Real Estate, or rating of an equivalent level to the above under another green building
certification•Process for project evaluation and selection. The eligibility criteria are drafted by the Sustainability
Promotion Office, which is made up of members from across different department of the Asset Manager, andare determined by the Investment Committee, the members of which include the President & CEO, the Chief
Investment Officer, and the Chief Financial Officer of the Asset Manager. Projects for green finance are
selected by the Sustainability Promotion Office based on the eligibility criteria followed by deliberation andapproval by the Investment Committee.

•Management of proceeds. The upper limit for green finance is set at an amount calculated by multiplying
total acquisition price of eligible green assets in our portfolio by the ratio of interest-bearing debt to total
assets (“eligible green debt”) so that the total amount invested in eligible green assets does not exceed theamount of eligible green debt.

•Reporting. The following items will be disclosed on our website as at the end of February of each year solong as any amount raised through green finance has been invested in eligible green assets, and such assets
remain in our portfolio: total acquisition price of eligible green assets; ratio of interest-bearing debt to totalassets; amount of eligible green debt; and total amount invested in eligible green assets.

What is the asset allocation planned for Nippon Accommodations Fund?
As of February 28, 2022, 30.6 % of the properties in the portfolio were eligible green assets, and 69.4% wereineligible assets based on gross floor area. Our target is to increase the number of eligible green assets by one eachyear.

What is the policy to assess good governance practices of the investee companies and Nippon
Accommodations Fund?
We do not invest in investee companies and have therefore opted to provide information on the governancepolicies adopted by us and the Asset Manager. While there is no third-party rating used to assess our governancepractices, we, along with the Asset Manager, have introduced the measures to assess and enhance our governancesystems with respect to compliance, internal audits, and transparent and appropriate disclosure.
We also make ongoing disclosures related to our Green Finance Framework and Eligible Green Projects.

REMUNERATION AND SUSTAINABILITY RISKS (SFDR ARTICLE 5 DISCLOSURE)
The Asset Manager has a remuneration policy in place which aims to support its strategy, values and longterm interest, including its interest in sustainability. The Asset Manager’s remuneration policy is consistent
with the integration of sustainability risks as follows.

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Employees of the Asset Manager receive monthly remuneration based on job rank, and an
employee’s job rank is determined through a performance evaluation (generally conducted once ayear) based on factors including individual performance, skills, ability, and in some cases,
contribution to sustainability targets.

•Remuneration, methods of calculation and payment, timing of payment, and increases inremuneration are determined according to the Asset Manager’s compensation rules, which areestablished based on statutory requirements.

•Employees receive remuneration that consists of monthly remuneration based on job rank, overtime
allowance, twice-a-year bonus, and other allowances.

•Employees of the Asset Manager may receive twice-a-year bonuses, which are determined basedon economic and market circumstances as well as the company’s performance, including withrespect to sustainability targets.

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