STATEMENT ON PRINCIPAL ADVERSE IMPACTS OF INVESTMENT DECISIONSON SUSTAINABILITY FACTORS
Product Name/Legal Entity Identifier: NTT UD REIT Investment Corporation
The following is the adverse sustainability impact statement of NTT UD REIT Investment Corporation. (“NUD”)
pursuant to Regulation (EU) 2019/2088 (“SFDR”). We have no employees in accordance with the prohibitionon having employees under the Act on Investment Trusts and Investment Corporations of Japan, and rely onNTT Urban Development Asset Management Corporation (the “Asset Manager”) to manage and operate theproperties 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 that began or beginning April 1 of the year
specified, 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 theSFDR disclosure standards, which are subject to change.

1. Summary

Pursuant to Article 4 of the Delegated Regulation C(2022)1931 supplementing SFDR (the “SFDRDelegated Regulation”), NUD is required to publish on its website the information referred totherein covering the period of one calendar year. NUD is a Japanese real estate investment trust,commonly known as J-REIT, and has no employees, relying on the Asset Manager for themanagement and operation of its properties. The Asset Manager does not operate based on acalendar year, but operates based on fiscal year ending in March of every year. A recalculationand translation of the data into the reference period of one calendar year would most likely leadto 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 November 1, 2022 toOctober 31, 2023. 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 the principal adverse impacts on sustainability factors (“PAI”). The
statement covers the reference period from November 1, 2022 to October 31, 2023. The statement will bereviewed at least once during every twelve-month period.
We believe that our sustainability initiatives are essential for our sustainable growth. We improve long-term
returns of investors and contribute to the realization of sustainable society and urban development byimplementing initiatives that address social issues. Under our sustainability policies and framework, we, incollaboration with the Asset Manager, 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 on sustainability factors,” with sustainability factors referring toenvironmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters
as defined in article 2 (24) of SFDR.
We believe that investment decisions that negatively affect climate or other environment-related resources, orhave negative implications for society, can have a significant impact to risk and value creation for our unitholders.

TK-948995

To this end, we consider PAI of our investment decisions throughout all major steps of the investment decisionand property management process throughout the lifecycle of the properties in our portfolio.
2. Description of principal adverse sustainability impacts
Nearly all types of economic activity have the potential to impact various PAI indicators, both positively andadversely. We aim to manage the risk connected to PAI from our investment decisions in several ways, including
general screening criteria, due diligence and our ESG initiatives. Some of the PAI indicators listed below arecurrently already being monitored and reported. As the availability of data improves, it is our intention that moreindicators will be added.

TK-948995

Table 1
Description of the principal adverse impacts on sustainability factors
We do not invest in investee companies, but invest in real estate. As adverse sustainability indicators 1-16 as
contained in Table 1 of Annex 1 of the SFDR 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
Adversesustainability
indicator

MetricImpact in
2023

Impact in2022

Explanation

Actions taken

Fossilfuels

17.
Exposure
to fossil
fuels
through
real estate
assetsShare ofinvestments inreal estate
assets involvedin theextraction,storage,transport ormanufacture offossil fuels

N/A

N/A

We do notinvest in realestate assets
involved in theextraction,storage,transport ormanufacture offossil fuels.

N/A

Energyefficiency

18.
Exposure
to energyinefficient
real estate
assetsShare ofinvestments inenergyinefficient realestate assets

As of October
31, 2023,
24.7% of ourproperties
were not“Eligible
Green Assets”(as definedbelow) basedon acquisition
price.

As of October
31, 2022,
37.3% of ourproperties
were not“Eligible
Green Assets”(as definedbelow) basedon acquisition
price.

To track theenvironmental
performance ofour properties,
we rely on
certifications
issued by thirdparty
organizations,such as theDevelopment
Bank of Japan’s(“DBJ”) Green
Building
certification, theComprehensive
Assessment
System for
Built
Environment
Efficiency(“CASBEE”)
certification,
Building
Energyefficiency
Labeling
System(“BELS”)
certification,
Leadership inWe implement
as appropriate
measures toreduce theirenvironmental
impactfollowingacquisition,
including by
obtaining
environmental
certifications
such as DBJ
Green Building
certification orCASBEE
certificationand so on.

TK-948995

Energy andEnvironmental
Design(“LEED”)
certification,and otherequivalentcertifications.

TK-948995

Table 2
Additional climate and other environment-related indicators
NUD does not invest in investee companies, but invests in real estate. As additional climate and otherenvironment-related indicators 1-17 as contained in Table 2 of Annex 1 of the SFDR Delegated Regulation
pertain to investee companies, these are not included in this PAI statement, which pertains to real estate
investments.
Adversesustainability
impactAdverse sustainability impact (qualitative or quantitative)

MetricIndicators applicable to investments in real estate assets
Energyconsumption

19. Energy consumption intensity
Energy consumption of owned real estate assets were 0.169 MWh/m2(in FY 2021) and 0.165 MWh/m2 (in FY 2022) .
We aim to reduce energy consumption intensity of our portfolio by
1% every year.

TK-948995

Energy consumptionin MWh of owned
real estate assets persquare meter

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

MetricIndicators applicable to investments to the Asset Manager or tenantsSocial andemployeematters

Anti-corruptionand anti-bribery

6. Insufficient whistleblower protection
The Asset Manager has established a system to deal withcomplaints of its employees appropriately.

Share of investments inentities without policies
on the protection ofwhistleblowers

All officers and employees of the Asset Manager can request afair investigation and anonymously report actions, such ascompliance violation or violation of human rights, corruption,bribery and harassment, through an internal or external hotline.
Reported matters are addressed appropriately. Unfair treatment ofa whistleblower for the reason that the person engaged inwhistleblowing is prohibited.

All of the AssetManager’s officers andemployees are provided
whistleblower protection.

15. Lack of anti-corruption and anti-bribery policies

Share of investments inentities without policies
on anti-corruption andanti- bribery consistent
with the United Nations
Convention against
Corruption

Before entering into a lease agreement with a tenant, we review if
the tenant has any relations with criminal organizations or otheranti-social forces based on our internal rules (i.e., Manual for
Handling Anti-social Forces).

To the best of ourknowledge, all of ourtenants have policies thatprohibit relations withcliminal organizations orother anti-social forces.

For descriptions of actions which NUD takes and will take with respect to the PAI indicators, please refer to ourESG website: https://nud-reit.co.jp/en/esg/index.html

TK-948995

3. Description of policies to identify and prioritize principal adverse sustainability impacts
Subject to data availability, we monitor the selected PAI indicators for the properties in our portfolio.
Prior to our investment in a property, we conduct due diligence review of the property, including ESG due
diligence, which includes selected PAI indicators. The due diligence findings related to selected PAI indicators
are reported and reviewed prior to the investment decision.
In order to conduct ESG-friendly management while maximizing the value of our properties, we have taken into
consideration ESG factors in our investment and asset management processes. In particular, we have establisheda green finance framework in accordance with the 2018 Green Bond Principles and the 2020 Green Bond
Guidelines to conduct sustainable finance. 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.
The Japan Credit Rating Agency (JCR) has evaluated the appropriateness of the framework and assigned it JCR’s
highest rating, “Overall Evaluation: Green 1(F)”.
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) and Leadership in Energy &Environmental Design (LEED) certification (Silver ranking or better) or assets whose EnergyReduction 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 AssetManager’s Finance Department.

For further information, please refer to our ESG website: https://nud-reit.co.jp/en/esg/index.html
4. Engagement policies
Due Diligence and Screening
We consider the environment and nature of the soil when investing in properties. We do not consider investingin properties that do not meet the standards for soil contamination and other environmental contamination inaccordance with the Air Pollution Control Act and the Soil Contamination Countermeasures Act of Japan andother environmental laws and ordinances from our portfolio. However, from time to time we acquire properties
not meeting the standards as long as they are deemed fixable promptly after acquisition. We also invest inproperties that have been constructed, reinforced, or otherwise modified to meet applicable new earthquake
resistance building codes or have been deemed to have seismic capacity equivalent thereto.
We have established certain numerical environmental targets and monitor the amount of energy used as well as
the amount of CO2 emissions at each property to reduce our environmental burden.
We have selected PAI indicator energy consumption intensity as our PAI indicator in Table 2 above based on
our belief that reduction of energy consumption is one of the major environmental challenges confronted by theworld. We also have selected lack of insufficient whistleblower protection as our PAI indicator in Table 3 above
because protection of employees is necessary in conducting transparent and fair business. Furthermore, we haveselected lack of anti-corruption and anti-bribery policies as our PAI indicator in Table 3 above based on ourinitiatives with our tenants and our internal rules.
Engagement
We have introduced environmental provisions, which we refer to as “Green Lease” provisions, in the leases with
our tenants, under which 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 ofOctober 31, 2023, Green Lease were introduced at 10 of our 59 properties.

TK-948995

We have established targets for energy consumption, CO2 emissions, water consumption and waste and seek tomeet these targets through various initiatives, including improvement of building management, capitalinvestment, and sustainability training for tenants and property managers.
5. References to international standards
We became a signatory as a supporter to the Financial Stability Board’s Task Force on Climate-related FinancialDisclosures (“TCFD”) established by the Financial Stability Board in April 2022. We will provide disclosuresin alignment with TCFD’s core elements in due course.
6. Historical comparison
See Table 1 and Table 2 above.

TK-948995