19-D-0230

June 13, 2019
Green Bond Evaluation b y Japan Credit Rating Agenc y, Ltd.
Japan Credit Rating Agency, Ltd. (JCR) announces the following preliminary Green Bond Evaluation Results.

JCR Assigned Preliminary Green 1 to
ORIX JREIT Inc. 13th Unsecured Bonds
S u b j e c t:

ORIX JREIT Inc. 13th Unsecured Bonds

T

e

:

Specified Investment Corporation Bonds

Issue amount:To be determined

Interest rate:

To be determined

Date of issuance:

To be determined

Redemption date:

To be determined

Method ofr ep ayme nt:

BulletUse of proceeds:

Refinancing of funds to acquire an assetyp<Green Bond Preliminary Evaluation Results>
Overall evaluation

Green 1

Evaluation of Greenness(use of proceeds)
Evaluation on Management, Operation
and Transparency

g1
m1

Chapter 1: Evaluation Overview
ORIX JREIT Inc. (OJR) is Japan's first diversified Real Estate Investment Trust (J-REIT) established on
September 10, 2001 and listed on the Tokyo Stock Exchange (Real Estate Investment Trust Securities Market) on
June 12, 2002. OJR invests in logistics facilities, commercial facilities, housing, and hotels, with office buildings in
the Tokyo metropolitan area at its core. As of the end of March 2019, OJR's assets were worth JPY 663.5 billion on
an acquisition price basis.
ORIX Asset Management Co., Ltd. (OAM), the asset management company of the Investment Corporation, is awholly-owned subsidiary of ORIX Corporation (ORIX). ORIX was founded in 1964 as Orient Leasing Co., Ltd., andhas been working to capture revenue opportunities while expanding the scope of its operations. ORIX and its group
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companies (ORIX Group) currently consist of six business segments: Corporate Financial Services, Maintenance
Leasing, Real Estate, Investment, Retail and Overseas. In 1986, the company entered the single-person dormitory
rental business. It now invests in office buildings, rental condominiums, commercial facilities, and logistics facilities.
It also operates hotels, inns, aquariums, and residential properties for the elderly. It also manages the assets of realestate investment trust (REIT), and provides real estate investment advisory services.
Since OAM's main officers and employees are seconded from ORIX, ORIX Group's experience and know-how,including its real estate business, are passed on to OAM. In addition, OJR acquired approximately 90% (JPY 312.1
billion) of properties acquired during the past five and a half years from properties owned by the ORIX Group, andinvests from a wealth of pipelines leveraging its strong relationship with the sponsor.
Utilizing the support from the ORIX Group, OJR is achieving both external and internal growth while leveraging
its strengths as a diversified J-REIT.
The bonds to be evaluated are 13th unsecured bond issued by ORIX JREIT Inc. The proceeds will be allocated forrefinancing the acquisition of properties that meet the eligibility criteria of the Green Finance Framework established
by OJR.
OJR defines green buildings as "Green Eligible Assets" that are applicable to green bonds under the Green
Finance Framework. Properties that have obtained or expected to obtain either three stars or more in DBJ Green
Building Certification, B+ or higher in CASBEE Certification, three stars or more in BELS Certification, or LEED
assessment Silver or more. JCR has confirmed that the asset to be refinanced by the bonds belongs to "Green Eligible
Assets" as defined in the Green Finance Framework. Definition of "Green Eligible Assets" established by OJR covers
buildings with environmental improvement effects.
JCR confirmed that an office buildings and a logistics facility subject to refinancing through the issuance of bonds
belong to "Green Eligible Assets" as defined in the OJR's Green Finance Framework. JCR has also confirmed
through the application documents and hearings concerning the property that there are few possibilities of serious
negative impact on the environment that outweigh the environmental improvement effect. Based on the above, JCR
has evaluated that the use of proceeds of the bond will have environmental improvement effects, including the effects
of reducing CO2 emissions.
In March 2018, OAM, the Asset Management Company of OJR, established the "Sustainability Committee" todiscuss ESG-related issues under the leadership of management. In addition, active discussions related to ESG were
held at the working level below the general manager. OJR also conducts environmental evaluation and acquires
various certifications for acquired properties, and the number of properties that it acquires is on the rise. In addition,
JCR confirmed a robust management and operation system and high transparency for OJR. For example, OJR has inhouse experts on properties and the environment, and has established checkpoints on the environment when
acquiring properties. In addition, OJR conducts internal and external audits on a regular basis.
As a result, JCR assigns "g1" for "Evaluation of Greenness (Use of Proceeds)" and "m1" for "Evaluation on
Management, Operation and Transparency". Consequently, JCR assigns "Green1" as an overall preliminary
evaluation results to the bonds. Detailed evaluation results are discussed in detail in the next chapter.
The bonds are considered to meet the standards for items required by the Green Bond Principles and the Green
Bond Guidelines of the Ministry of Environment of Japan.12

1
2

ICMA(International Capital Market Association) Green Bond Principles 2018
Ministry of the Environment Green Bond Guidelines 20172/13
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Chapter 2: Current Status of the project on each evaluation factor and JCR's
evaluations
Evaluation Phase 1: Greenness Evaluation
JCR assigns "g1", the highest grade, to "Evaluation Phase 1: Greenness Evaluation".
Rationale: 100% use of proceeds of the bond will be allocated to a green project, considering thefactors described below.
(1) JCR's key consideration in this factor
In this section, JCR first assesses whether the proceeds will be allocated to green projects that have explicit
improvement effects on environment. Next, JCR assesses whether an internal department/division which is
exclusively in charge of environment issues or a third party agency prove it sufficiently and have taken
necessarily workaround or mitigation measures, in case of possibility on use of proceeds have negative impact on
the environment. Finally, JCR confirms consistency with the Sustainable Development Goals (SDGs).

(2) Current status of evaluation targets and JCR evaluation
Overview of Use of Proceedsa.

On the environmental improvement effects of the projecti. 100% use of proceeds will be for refinancing of properties that belong to the Green Eligible Assets,
which have environmental improvement effect.
OJR defines use of proceeds under the Green Finance Framework.
Proceed from Green Bond or Green Loan meet either of the following eligibility criteria:(1) Proceeds for new acquisition of Green Eligible Assets,(2) Proceeds for Repair work etc.
Or used to repay borrowings (including green loans) or redeem investment corporation bonds (including
green bonds) that have already been issued.
(Eligibility Criteria)(1)Green Eligible Assets
Any of the following certifications or recertification is an asset that has been acquired or is expected to beacquired in the future.
DBJ Green Building Certification: Three Stars or higher (top to third)
BELS Certification: Three stars or higher (top to third)
CASBEE Certification: B+ or higher (top to third)
LEED Certification: Silver or higher (top to third)(2) Repair work, etc.
Either of the following must be met:
Refurbishment work intended to improve at least one level of star or rank in any of the above (1) Green
Eligible Asset Certifications
Renovation work that can reduce energy consumption, CO2 emissions, or water consumption by 10% or
more
Installation or acquire of equipment related to renewable energy

100% of the use of proceed of this bond is to refinance for the acquisition of an office building (Lunar
Sendai) and a logistics facilities (Toda Logistics Center) that belong to Green Eligible Assets set forth in theGreen Finance Framework(Property acquisition price: JPY 18.1 billion). Lunar Sendai, which has the highest
BELS certification ranking of five stars, and Toda Logistics Center, which has acquired four stars for BELS
certification. BELS certification is an assessment of the degree of achievement of the Energy Efficiency
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https://www.jcr.co.jp/enStandard expressed in stars. JCR has evaluated that the buildings with four stars or higher evaluation for useof proceed of the bonds as having a higher environmental improvement effect.
In February 2015, Lunar Sendai renewed its air-conditioning equipment and changed the electricity used inits exclusive and common use areas to LED, thereby reducing energy consumption. Toda Logistics Center
also works to conserve energy by adopting high-efficiency lighting equipment.
<Target projects>
Property nameLocation
Principal uses

Lunar Sendai
2-15-1 Hommachi, Aoba-ku, Sendai, Miyagi
OfficeSite area

1,990.35 ㎡

Total floor area

13,924.19 ㎡

Number of stories

2 stories below ground and 14 stories above ground

Completion

Feb. 1998

Environmental
certification

Five stars of BELS certification

Features andenvironmental
performance

・ It is located on Higashi-Nibancho Street in the center of Sendai. In
February 2015, it renewed its air-conditioning equipment and switched to
LED lighting for exclusive and common use spaces, thereby savingenergy.

Property nameToda Logistics Center

Location
Principal uses

7-35, Sasame-Minami-cho, Toda, Saitama
Distribution facility

Site area

19,473.82 ㎡

Total floor area

36,158.60 ㎡

Number of stories

5 stories

Completion

March 2005

Environmental
certification

Four stars of BELS certification

Features andenvironmental
performance

・ It is located in Toda City, which is highly convenient for delivery to thecenter of Tokyo and where logistics facilities are concentrated.
・ Efforts are made to conserve energy by using high-efficiency lighting
fixtures.

Ii. Uses of proceeds fall under the category of green projects defined in the Green Bond Principle andGreen Bond Guidelines of the Ministry of Environment of Japan that are "Energy Efficiency" and"green buildings which meet regional, national or internationally recognised standards orcertifications."

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b. Negative impact on the environment
OAM, the asset management company of OJR, appropriately conducts due diligence when acquiringproperties with regard to projects for which use of proceeds of the bonds. In conducting due diligence, OAM
receives due diligence reports from real estate valuation companies in the registration lists selectedindependently in advance, and also conducts checks by setting up items related to the environment in the
checklists composed by OAM. In the due diligence, JCR confirmed that if there is a concern that the subject
property may have a negative impact on the environment, the condition of acquisition is to be corrected by theseller.
c. Consistency with SDGs goals and Targets
This project is classified as “Energy Efficiency” and “green buildings which meet regional, national orinternationally recognised standards or certifications”. JCR evaluated the project to contribute to the following
SDGs targets, referring to ICMA's SDGs mapping.
Goal 7: Ensure access to affordable, reliable, sustainable, and modern energy for all.
Target 7.3. By 2030, double the global rate of improvement in energy efficiency.

Goal 9: Build resilient infrastructure,industrialization and foster innovation.

promoteinclusiveandsustainable

Target 9.4. By 2030, upgrade infrastructure and retrofit industries to make themsustainable, with increased resource-use efficiency and greater adoption of clean andenvironmentally sound technologies and industrial processes, with all countries taking
action in accordance with their respective capabilities
Goal 11: Make cities and human settlements inclusive, safe, resilient and sustainable.
Target 11.6. By 2030, reduce the adverse per capita environmental impact of cities,
including by paying special attention to air quality and municipal andmanagement.

other waste(Reference) Certification System for Each Green Building① DBJ Green Building
A certification system provided by DBJ (Development Bank of Japan) that evaluates properties
with environmental and social considerations. The evaluation results are expressed as the number ofstars, and the evaluation axis is "Buildings with consideration for the environment and society". Eachis represented by five stars (the best class in Japan), four stars (exceptionally high), three stars(excellent), two stars (high), and one star (satisfactory). Although the evaluation is not specificallyfocused on environmental performance, it is highly recognized in Japan and has a certain evaluation
item with regard to environmental performance. Therefore, JCR considers this certification to beequivalent to the Green Project Classification of "green building with regional, national orinternationally recognized standards and certification" defined in the Green Bond Principles. However,since the certification is not limited to environmental performance, JCR believes that it is desirable toconfirm the evaluation of environmental performance individually.

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② BELS"BELS" is an acronym for the English name of Building-housing Energy-efficiency Labeling
System.
In October 2013, the Ministry of Land, Infrastructure, Transport and Tourism formulated the"Guidelines for Labeling Energy Conservation Performance for Non-Residential Buildings (2013)."
Based on these guidelines, a third-party organization was established with the purpose of properly
evaluating and labeling the energy-saving performance of non-residential buildings. Subsequently, in
July 2015, the Act on Improvement of Building Energy Consumption Performance (Building Energy
Conservation Act) was promulgated, and Article 7 of the Act stipulates that business owner of housingbusiness and other businesses selling or leasing buildings must make efforts to indicate the energy
consumption performance of buildings. Along with the enforcement of the Act on the Rational Use ofEnergy in Buildings, BELS is positioned as a third-party certification system for the guideline forenergy conservation performance labeling based on Article 7 of the Act. From April 2016, housing
was added to the scope of evaluation and currently all new and existing buildings are subject toevaluation.
The evaluation results are expressed in stars by the achievement values of the energy efficiency
standards. They are expressed as 5 stars, 4 stars, 3 stars, 2 stars, and 1 star.

③ CASBEE
CASBEE is an acronym for the English name of Comprehensive Assessment System for Built
Environment Efficiency.
This is a method for evaluating and rating the environmental performance of buildings. In April
2001, the Comprehensive Environmental Evaluation Research Committee for buildings wasestablished as a joint project with industry, government, and academia with the support of the
Housing Bureau of the Ministry of Land, Infrastructure, Transport and Tourism. Since then, thecommittee has been continuously conducting development and maintenance. In addition to CASBEE
for Buildings and CASBEE for Urban Development, assessment tools include CASBEE for Real
Estate developed to provide easy-to-understand environmental performance to the real estate market.
The evaluation results are divided into five grades: Rank S (Excellent), Rank A (Very Good), Rank
B+ (Good), Rank B (Slightly Poor), and Rank C (Poor) (CASBEE-real estate scoring has four grades:
Rank S (Excellent), Rank A (Very Good), Rank B+ (Good), and Rank B (Satisfaction of mandatory
items)).

④ LEED
LEED is the Environmental Performance Assessment System for Construction and Urban
Environments, developed and operated by the U.S. Green Building Council (USGBC), a non-profit
organization. As of 2018, there are buildings certified in over 160 countries or areas.
The LEED is an acronym for Leadership in Energy and Environment Design. The draft was
published in 1996 and is updated once every few years.
There are five types of certification: BD+C (Building Design and Construction), ID+C (Interior
Design and Construction), O+M (Operations and Maintenance), ND (Neighborhood Development),and HOMES (Home).
The authentication level is represented by the sum of the points earned for each item and is fromabove Platinum (80 points or more), Gold (60-79 points), Silver (50-59 points), and Certified (40-49
points).

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Evaluation Phase 2: Evaluation on Management, Operationa n d Tr a n s p a r e n c y
JCR assigns "m1", the highest rating on JCR Evaluation Phase 2: Evaluation on Management,
Operation and Transparency.
Rationale: These projects will be allocated the funding and implemented the businesses asplanned through a firmly equipped management and operation system and high transparency as
described below.

1 . A p p r o p r i a t e n e s s a n d Tr a n s p a r e n c y c o n c e r n i n g s e l e c t i o n s t a n d a r d a n d
processes of the use of proceeds.
(1) JCR's key consideration in this factor
In this section, JCR confirms that the objectives to be achieved through the green bond, the criteria for
selecting green projects, the appropriateness of the process, and the series of processes are appropriately disclosed
to investors.

(2) Current status of evaluation targets and JCR evaluationa.

Goal
OJR's asset management company, OAM, aims to achieve stable growth in unitholder value, which is theinvestment philosophy of OJR, and has established an ESG policy for the implementation of asset
management with consideration for the environment (E), society (S) and governance (G), which is publicly
available on the website.
[ESG Policy]"1. Reduction of environmental load and formation of a recycle-based society""2. Collaboration with stakeholders""3. Enhancing health, comfort for tenants, executives and employees""4. Risk management and compliance""5. ESG education/enlightenment activities ""6. Promotion of information disclosure and visualization of ESG"In accordance with the above ESG policy, numerical targets, specific initiatives, and organizational
structure are established in the "Energy Usage/Greenhouse Gas Emission Reduction Policy," "Water
Conservation Policy," and "Waste Weight Management Policy". According to these policies, various measures
are taken. As an example of specific initiatives, the Company has concluded a Property Management contract
with a property management (PM) company that manages properties to implement environmentally conscious
management, and every year OJR receives reports on energy data from PM service contractors.
The use of the proceeds of the bonds is the refinancing loans for the acquisition of Lunar Sendai and Toda
Logistics Center. Considering the characteristics of these properties, the issuance of the bonds will contributeto realize"1. Reduction of environmental load and formation of a recycle-based society", "2. Collaboration

with stakeholders", "3. Enhancing health, comfort for tenants, executives and employees", "4. Risk
management and compliance" and "6. Promotion of information disclosure and visualization of ESG".

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b. Selection standard
The "Green Eligible Assets" criteria of OJR under the Green Finance Framework are assets that haveacquired or are expected to acquire either DBJ Green Building Certification of three stars or higher, BELS
Certification of three stars or higher, CASBEE Certification of B + rank or higher, or LEED Certification
Silver or higher. As described in Phase 1: Greenness Evaluation, JCR has evaluated the criteria for buildings
with environmental improvement effects.
The selection criteria are first reviewed and discussed by the Sustainability Committee of OAM and thefinal decision is made by the Investment Committee, which consists of the representative directors, executive
officers, and outside committee members of OAM. The Sustainability Committee is an advisory body chairedby the President and CEO and composed of executive officers in charge, but has no decision-making authority.
The Sustainability Committee meets at least four times a year to share important information and progress.
The sustainability committee discusses selection criteria. In addition to the involvement of management inselection criteria, the management of OAM's Investment Committee consisting of the president, executive
officers, and other members of management. Therefore, JCR considers that a system has been put in place toevaluate, select and allocate funding for "Eligibility Criteria" in accordance with the OJR's ESG policy bymanagement.
As mentioned above, the decision to fund for both Lunar Sendai and Toda Logistics Center was made by
the Investment Committee after consideration and deliberation by the Sustainability Committee.
c.

Processes
The selection of the use of proceeds for the bonds and the issuance of Green Bonds are drafted by OAM's
Financial and Investor Relations Department and reviewed and discussed by the Sustainability Committee
regarding the greenness of individual properties. The decision is made by the OAM's Investment Committee,
which is attended by the President and CEO and OAM Executive Officers. JCR has evaluated thatmanagement is appropriately involved in the selection process and that the decision-making process is clear
with respect to both the selection of the use of proceeds and the issuance of Green Bonds.
The target setting, selection criteria, and process stated above are to be disclosed in the Shelf Registration
Supplements for the issuance of the bonds and this Evaluation Report, thereby ensuring transparency toinvestors.

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2 . A p p r o p r i a t e n e s s a n d Tr a n s p a r e n c y o f m a n a g e m e n t o f t h e p r o c e e d s(1) JCR's key consideration in this factor
It is generally assumed that the management method of the proceeds varies status on the issuer. Confirm
whether proceeds procured through the issuance of green bonds are appropriated to the green projects andwhether a mechanism and internal system are in place to enable easy tracking and management of theappropriation of proceeds.
JCR also attaches importance to evaluating the management and operation of the unallocated proceeds as wellas to confirming that the proceeds procured from the bond will be allocated to the green projects at early stage.

(2) Current status of evaluation targets and JCR evaluationa.

The proceeds for the bonds will be allocated to refinance the funds for acquiring Lunar Sendai and Toda
Logistics Center described in this report, and will not be used for any other purposes.

b.

The Finance and IR Department of the OAM prepares instructions in advance to direct the recipient ofproceeds, and the General Affairs and Accounting Manager, who manages the receipts and disbursements,
makes the final decision. The proceeds will be allocated to acquire new assets classified as eligible, repay
borrowings or redeem bonds on properties that meet existing eligibility criteria. Deposit management isconducted through the main account of the trust bank, which is the asset custody bank. After collecting a
copy of the passbook and confirming that it has been deposited into the account of the trust bank, data will be
registered in the internal financial system by the Finance and IR Department. JCR confirms that the proceeds
procured from OJR bonds will be allocated to refinance the funds for the acquisition of Lunar Sendai andToda Logistics Center as soon as possible after the funding, and that tracking management will be sufficientat the time of the allocation in a lump sum.

c.

In OAM, the internal audit department conducts internal audits at least once a year. In addition, JCR
confirmed that external audits by auditing firms are conducted appropriately in terms of accounting in general.
Also, JCR confirmed through hearings that these books are subject to external audits at the end of each fiscal
year, and that they are properly maintained.

d.

The proceeds from this bond will be used to refinance the funds for the acquisition of Lunar Sendai and Toda
Logistics Center as soon as possible after the funding. Therefore no unallocated proceeds will be generated.
JCR also confirmed that the OJR will disclose any unallocated proceeds arising from the sale of the above
two properties prior to redemption of the bonds, even though it is not clear if the link between the bonds andthe individual properties will be made.
JCR confirms that the refinancing of funds for the acquisition of Lunar Sendai and Toda Logistics Center will

be ensured, that the proceeds will be managed by OJR in an appropriate manner, that an internal audit andexternal audit system is in place, and that disclosure will be made by OJR when unallocated proceeds occur.
Therefore, JCR considers the Appropriateness and Transparency of Management of the proceeds is high.

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3. Reporting(1) JCR's key consideration in this factor
In this section, JCR evaluates whether the disclosure system for investors, etc. before and after the issuance ofgreen bonds is planned in a detailed and effective manner at the time of the issuance of green bonds(2) Current status of evaluation targets and JCR evaluation
a. Reporting on the proceeds allocation
The use of proceeds for the bonds will be publicly announced by the OJR in the Amended Shelf
Registration Statement and on the website. In addition, as confirmed in the previous section, the proceeds ofthe bonds will be immediately allocated to refinance the funds for the acquisition of Lunar Sendai and Toda
Logistics Center, so it is not currently assumed that the reports on unallocated funds will be made during theterm. However, JCR confirms that disclosure will be made by OJR in the event of a major change incircumstances, such as the occurrence of unallocated proceeds due to the sale of the two properties refinancedwith the bonds.
b. Impact Reporting for environmental benefits
OJR plans to disclose the following items in the Green Finance Framework as reporting items related toenvironmental improvement effects.
a

As long as Green Bonds or Green Loans exist, the status of certification of each Green Eligible Asset

allocated from the proceeds, the rating of certification, and the whole indicators of Green Eligible Assets aredisclosed on the website once a year.
Energy consumption/CO2 emissions/water consumptionb For renovation work, as long as green bonds or green loans exist, the following indicators are disclosed on
the website once a year after completion of construction.
Energy consumption, CO2 emissions, or water consumption (before renovation/after renovation)
OJR plans to receive an annual third-party review of the accuracy of the reporting status by the maturitydate.
JCR believes that the reporting plan is intended to appropriately disclose to investors both the allocation ofproceeds and the effects of environmental improvements.

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4. Organization's environmental efforts(1) JCR's key consideration in this factor
In this section, JCR evaluates whether the issuer's management positions environmental issues as a highpriority management issue, and whether the green bond policy, process and the criteria for selecting green
projects are clearly defined through the establishment of a department specializing in the environmental field or
through the assistance of external organizations.

(2) Current status of evaluation targets and JCR evaluation
In order to achieve stable growth in unitholder value, OAM has formulated the ESG Policy in order toimplement the ESG-conscious asset management policy.
In response to increasing awareness of ESG among overseas investors, the company has adopted amanagement stance that considers ESG. As noted above, the "Sustainability Committee" has been held since
March 2018, chaired by the president and CEO and comprised of executive officers in charge, and has alreadyheld five meetings. Before the Sustainability Committee was held, various issues related to ESG were discussed
at a meeting where department heads and lower levels of relevant departments met and discussed.
In addition, as part of its efforts, OJR has obtained GRESB real estate appraisals and acquiring various
certifications, such as DBJ Green Building, CASBEE, and BELS, for the acquired properties, both of which are
published on its own website. In the GRESB Real Estate Assessment, OJR has been awarded the Green Star for
the fourth consecutive year to businesses that have excellent “Management and Policy” and “Implementation andmeasurement”, both of which are the two evaluation criteria in the sustainability assessment. JCR considers thisas indicating that OJR's sustainability initiatives are highly evaluated by third parties. JCR also assesses that the
number of properties certified is increasing indicate OJR's stance on the environment.
In addition, OJR has been a corporate member of Green Building Japan, a LEED public organization in Japan,
since August 2018. OJR aims to collaborate with people who aim to create a sustainable society through its
activities.
OAM has two first-class architects in the Business Promotion Department, one CASBEE Assessor, and one
first class architect in the Investment Management Department. In addition, OAM has departments and humanresources with specialized knowledge of properties and the environment. For example, employees withqualifications related to the environment are qualified as Energy Management Personnel, and the Supervisor of
the Risk Management & Compliance Department has been active as an expert on environmental issues in Japanfor many years. In addition, environmental consulting is carried out in cooperation with internal and external
specialists, such as by requesting external specialists.
JCR considers environmental issues to be a high priority for the management of these organizations, and thatdepartments with expert knowledge are clearly involved as organizations in the selection of green financeprocurement policies and processes and green projects.
(Reference) GRESB Real Estate Assessment
GRESB is a benchmark established in 2009 that measures and evaluates the degree of consideration given to
ESG by companies that holding and manages real estate and infrastructure. GRESB is an acronym for Global Real
Estate Sustainability Benchmark. From 2016, the evaluation results are shown on a five-star scale (five stars, fourstars, three stars, two stars, and one star). Companies that have made excellent initiatives are given "Green Star"
separately from the five-point rating. From J-REIT, 38 investment corporations have participated in the evaluation
as of 2018.
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■Evaluation result
Based on JCR Green Finance Evaluation Method, JCR assigns "g1" for "Greenness Evaluation (Use ofProceeds) and the "m1" for "Evaluation on Management, Operation and Transparency". Consequently, JCR assigns"Green1" as an overall preliminary evaluation result to the bonds. The bonds are considered to meet the standards
for the items required by the Green Bond Principles and the Green Bond Guidelines issued by the Ministry of theEnvironment of Japan.
[JCR Green Bond Evaluation matrix]
Management, Operation, and Transparency

Greeness

m1

m2

m3

m4

m5

g1

Green 1

Green 2

Green 3

Green 4

Green 5g2

Green 2

Green 2

Green 3

Green 4

Green 5

g3

Green 3

Green 3

Green 4

Green 5

g4

Green 4

Green 4

Green 5

g5

Green 5

Green 5

Not
qualified

Not

Not

qualifiedqualified

Not

Not

Not

qualifiedqualifiedqualified■ Evaluation Subject
Issuer: ORIX JREIT Inc. (Security Code: 8954)[Assignment]
TargetIssue amount

Date ofissuance

Redemption
dateInterest rate

Preliminary evaluation

13th Unsecured Bonds(Special pari passu conditions among
specified investment corporation bonds)(Green Bonds)

To bedetermined

To bedetermined

To bedetermined

To bedetermined

JCR Green Bond Evaluation:Green1
Greenness Evaluation:g1
Management, Operation andTransparency:m1

Responsible Analysts for this evaluation: Atsuko Kajiwara and Kosuke Kajiwara

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Important explanation of the Green Bond Evaluation
1.

Assumptions, Significance, and Limitations of JCR Green Bond Evaluation
JCR Green Bond Evaluation, which is granted and provided by Japan Credit Rating Agency (JCR), is a comprehensive
expression of JCR's current opinion on the extent to which the funds procured from the issuance of green bonds, which are
subject to evaluation, are allocated to green projects defined by JCR and the extent to which the management, operation, andtransparency of the use of green bonds are ensured. JCR Green Bond Evaluation does not fully indicate the extent to which thefunds procured from such green loans are allocated and the management, operation, and transparency of the use of the funds are
ensured.
JCR Green Bond Evaluation assesses the plan or status of the appropriation of funds at the time of the green bond issuanceplan or at the time of issuance, and does not guarantee the status of the appropriation of funds in the future. In addition, JCR
Green Bond Evaluation does not prove the environmental effects of green bonds and is not responsible for their environmental
effects. JCR confirms that the effects of the funds procured from the issuance of green bonds on the environment are measured
quantitatively and qualitatively by the borrower or by a third party requested by the borrower, but in principle it does not directly
measure the effects.

2.

Methods used in the conduct of this evaluation
The methods used in this evaluation are listed on JCR website (Sustainable Finance & ESG in https://www.jcr.co.jp/en)) as
JCR Green Finance Evaluation Method.

3.

Relationship with Acts Related to Credit Rating Business
JCR Green Bond Evaluation is determined and provided by JCR as a related business, which is different from the activities
related to the credit rating business.

4.

Relationship with Credit Ratings
The Assessment differs from the Credit Rating and does not promise to provide or make available for inspection apredetermined Credit Rating.

5.

Independence in Evaluation of JCR Green Bond
There is no conflicts of interest related to capital or human resources relationships between the subject of this evaluation and
JCR.

■Disclaimers

The information contained in this document has been obtained by JCR from the Issuer and from accurate and reliable sources. Provided, however, that suchinformation may be erroneous due to human, mechanical or other reasons. Accordingly, JCR makes no representation or warranty, express or implied, as to theaccuracy, results, accuracy, timeliness, completeness, marketability, or fitness for a particular purpose of such information, and JCR assumes no responsibility forany error, omission, or result of using such information. In no event shall JCR be liable for any special, indirect, incidental or consequential damages of any kind,including opportunity loss, monetary loss, which may arise from any use of such information, whether contractual, tort, negligence or other cause of liability, andwhether or not such damages are foreseeable or unforeseeable. JCR Green Bond Evaluation does not express any opinion on the various risks (credit risk, pricefluctuation risk, market liquidity risk, etc.) associated with the green bond, which is the subject to the evaluation. JCR Green Bond Evaluation is a comprehensive
statement of opinion at the present time of JCR and is not a statement of fact and does not make any recommendations regarding risk judgment or the decision topurchase, sell or hold individual bonds, commercial paper, etc. JCR Green Bond Evaluations may be changed, suspended, or withdrawn due to changes in
information, lack of information, or other reasons. All rights to this document, including data from JCR Green Bond Evaluation, are held by JCR. Reproduction,
adaptation, modification or alteration of this document, in whole or in part, including data from JCR Green Bond Evaluation, without the permission of JCR is
prohibited.

■Glossary

JCR Green Bond Evaluation: JCR Green Bond Evaluation evaluates the extent to which the funds procured from the Green bond are allocated to the Green Project
as defined by JCR, and the extent to which the management, operation, and transparency of the Green Loan are ensured. Evaluations are graded on a scale of 5,
beginning with the top, using the Green1, Green2, Green3, Green4, and Green5 symbols.

■Status of registration as an external assessor of green finance・ Ministry of the Environment's external green bond reviewer registration
・ ICMA (registered as an observer with the International Capital Markets Association)■Status of registration as a credit rating agency, etc.
・ Credit Rating Agency: the Commissioner of the Financial Services Agency (Rating) No.1
・ EU Certified Credit Rating Agency
・ NRSRO: JCR has registered with the following four of the five credit rating classes of the Securities and Exchange Commission's NRSRO(Nationally RecognizedStatistical Rating Organization. (1)Financial institutions, broker dealers, (2) insurance companies, (3) general business corporations, and (4) government and local
governments. If the disclosure is subject to Section 17 g-7(a) of the Securities and Exchange Commission Rule, such disclosure is attached to the news releases
posted on JCR website (https://www.jcr.co.jp/en).

■ For further information, contact

Information Service Dept. TEL: 03-3544-7013 FAX: 03-3544-7026

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

Copyright © Japan Credit Rating Agency, Ltd. All rights reserved.

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