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Green Bonds

API invests primarily in urban retail and Tokyo office properties. API seeks to increase unitholder value by building and operating a portfolio of properties that are competitive in the medium to long term. To build a portfolio with a stable and sustainable demand from our customers, we believe that in addition to the location, use, scale, and quality of properties, reducing our environmental footprint and contributing to the surrounding communities and environment are important.
API aims to further promote its sustainability initiatives through issuance of green bonds and invite new investors to its investment corporation bonds by stimulating their demand who have interest in ESG investment.

Activia Properties Inc. (“API”) aims to further promote its sustainability initiatives through issuance of the green bonds, and invite new investors to its investment corporation bonds by stimulating their demand who have interest in ESG investment.

About Green Bonds

Green bonds are a type of bond instruments where the proceeds will be exclusively applied to finance or refinance green projects such as countermeasures against global warming or businesses with environmental benefits and that are generally aligned with the Green Bond Principles, a voluntary guideline of International Capital Market Association (ICMA).
For details, please refer to the ICMA’s website linked below.

ICMA Green Bond Principles (GBP)

API’s Green Bond Framework has been reviewed by Sustainalytics, an ESG rating agency, and received from them a second-party opinion with regard to the eligibility.
For details, please refer to the second-party opinion from Sustainalytics linked below.

Second-Party Opinion from Sustainalytics

Green Bond Framework

1.Use of proceeds

The proceeds from the green bonds will be allocated to funds for (i) acquisition of the Eligible Green Projects which are existing or new buildings fulfilling the item A of the Eligibility Criteria defined below, or (ii) refurbishments fulfilling the item B of the Eligibility Criteria, or (iii) refinancing the existing loans/investment corporation bonds which have been allocated to funds to acquire Eligible Green Projects or refurbishments.

2.Eligibility Criteria

The proceeds of the green bonds will be allocated to the projects that conform to one or more of the following criteria.

A. Eligible Green Projects
Buildings that have achieved the top two levels of one or more of the third-party green building certifications/recertifications listed below within 36 months prior to the payment date of green bonds or are expected to achieve:

          
  1. Certification for CASBEE for Real Estate (A or S Rank)
  2.       
  3. DBJ Green Building Certification (4 or 5 Stars)
  4.       
  5. BELS (4 or 5 Stars)

B. Refurbishments
Refurbishments with a primary purpose of achieving one of the targets listed below and are completed within 36 months prior to the payment date of green bonds or are expected to be completed:

  1. Refurbishments with more than 10% reduction in CO2 emissions or energy consumption
  2.  
  3. Refurbishments with more than 10% reduction in water consumption
  4.      
  5. New achievement of the top two levels of one or more of the green building certifications listed in above item A or one or more levels of star/rank improvement in such certifications

3.Management of proceeds

API calculates the amount of debts of Eligible Green Projects by multiplying the calculable total book value of the Eligible Green Projects* at end of the financial period immediately preceding each date of bond issuance by its LTV (Loan to Value / interest-bearing debt to total assets) ratio. API will then monitor to ensure that the total amount of unredeemed green bonds does not exceed the amount of debts of Eligible Green Projects.

As of Nov. 30, 2023



* “Eligible Green Projects at the end of the financial period immediately preceding each date of bond issuance” refer to the buildings that have achieved the top two levels of one or more of the third-party green building certifications/recertifications within 36 months prior to the end of the financial period immediately preceding each date of bond issuance.

4.Reporting

As far as there is unallocated amount of funds, API will disclose on its website the list of financed/refinanced Eligible Green Projects and refurbishments, allocation status including the amount of unallocated proceeds, allocation schedule and managing method of net proceeds of green bonds at end of May each year. API also disclose that the amount of unredeemed green bonds does not exceed the amount of debts of the Green Eligible Projects. After the issuance, as long as there is an unredeemed balance of the green bonds, API will disclose the amount of total book value of the Eligible Green Projects and the amount of debts of Green Eligible Projects, as well as amount of unredeemed green bonds at end of May each year.

5.Impact Reporting

If there is unredeemed balance of green bonds, API will annually disclose the summary, progress and levels of certifications of the Eligible Green Projects. Additionally, API will annually provide the following indicators of the Eligible Green Projects where API has control over energy usage:

     
  1. Energy consumption
  2.         
  3. CO2 emissions
  4.    
  5. Water consumption
  6. Waste generation

To report the effects in environmental performance of refurbishments funded by the proceed of green bonds, API will provide estimated rate of reduction (%) in the amount of energy consumption, water consumption, and CO2 emissions before and after the refurbishment.

Green Bond Summary

Total issue amount (¥million) Interest rate Offering date Redemption date Description Press release
The 10th unsecured investment
corporation bonds (green bonds)
5,000 0.220% July 9, 2019 July 9, 2024 Unsecured,
non-guaranteed
Notice Concerning Issuance of Investment Corporation Bonds (Green Bonds)
The 11th unsecured investment
corporation bonds (green bonds)
4,000 0.530% November 18, 2019 November 16, 2029 Unsecured,
non-guaranteed
Notice Concerning Issuance of Investment Corporation Bonds (Green Bonds)
The 12th unsecured investment
corporation bonds (green bonds)
4,500 0.510% October 21, 2020 October 21, 2030 Unsecured,
non-guaranteed
Notice Concerning Issuance of Investment Corporation Bonds (Green Bonds)
The 14th unsecured investment
corporation bonds (green bonds)
3,900 0.400% November 16, 2021 November 14, 2031 Unsecured,
non-guaranteed
Notice Concerning Issuance of Investment Corporation Bonds (Green Bonds)
The 15th unsecured investment
corporation bonds (green bonds)
2,000 0.820% December 19, 2022 December 17, 2032 Unsecured,
non-guaranteed
Notice Concerning Issuance of Investment Corporation Bonds (Green Bonds)
Total 19,400

Impact Reporting

Energy consumption per year
(MWh)
(Note 2)
CO2 emissions per year (t-CO2)
(Note 3)
Water consumption per year (m3) Waste generation per year (t)
Actual Scope 1
(direct emission)
Scope 2
(indirect emission)
Scope 3
(emission from tenants)
FY2018 52,171 22,614 - - - 271,021 1,994
FY2019 44,669 18,125 - - - 247,458 2,056
FY2020 26,585
(60,318)
22,963 58 11,077 11,828 226,405 1,913
FY2021 16,261
(45,435)
16,758 233 5,320 11,205 146,773 1,128
FY2022 17,514
(47,691)
14,636 208 5,647 8,781 162,352 1,171
(Note 1) Principally the figures shown above are relevant to the amounts of consumption, emissions or generation from the Eligible Green Assets as of the end of May of the following year, based on the cumulative amounts for a fiscal year from April to March of the entire portfolio excluding lands.
(Note 2) Total amount of consumption fuel (gas, heavy oil, etc.), electricity and district heating / cooling of the properties. From FY2020 onwards, the amount covers the area of the properties for which API has operational control of energy management. Figure in parentheses includes emissions by tenants, same as for FY2018 and FY2019.
(Note 3) The factor and the method applied to the calculation conform to "GHG Emissions Accounting, Reporting and Disclosure System" of the Ministry of the Environment. From FY2020 onwards, figures reported for Scope 3 fall under category 13 and are limited to the data which were able to be collected from tenants.

List of API's Green Eligible Projects

As of November 30, 2023

Property
no.
Property name Received ranks Book value at
the end of
the period
(¥ million)
DBJ Green
Building
Certification
Certification for
CASBEE for Real Estate
BELS
Certification
UR-3 Q plaza EBISU A(★★★★) 8,090
UR-9 A-FLAG SHIBUYA A(★★★★) 6,385
UR-11 A-FLAG KOTTO DORI A(★★★★) 4,373
UR-13 A-FLAG DAIKANYAMA WEST S(★★★★★) 2,427
UR-18 A-FLAG NISHI SHINSAIBASHI ★★★★ 14,352
TO-1 TLC Ebisu Building S(★★★★★) 7,157
TO-2 A-PLACE Ebisu Minami S(★★★★★) 9,506
TO-4 A-PLACE Aoyama S(★★★★★) 8,471
TO-10 A-PLACE Shinagawa A(★★★★) 3,789
TO-12 Shiodome Building ★★★★ 69,926
TO-13 A-PLACE Ebisu Higashi S(★★★★★) 6,906
TO-14 A-PLACE Shibuya Konnoh S(★★★★★) 4,918
TO-16 A-PLACE Shinagawa Higashi S(★★★★★) 18,702
TO-23 Kasumigaseki Tokyu Building S(★★★★★) 30,808
AA-2 icot Nakamozu (Kohnan building) A(★★★★) 7,580
AA-2 icot Nakamozu (Bank building) A(★★★★) 448
AA-4 icot Mizonokuchi S(★★★★★) 2,730
AA-5 icot Tama Center S(★★★★★) 2,528
AA-7 Osaka Nakanoshima Building S(★★★★★) 11,244
AA-9 Market Square Sagamihara S(★★★★★) 4,473
AA-10 Umeda Gate Tower S(★★★★★) 18,832
AA-11 A-PLACE Bashamichi A(★★★★) 4,074
Total Eligible Green Projects 247,733
(Note 1) Listed are the buildings that have achieved the top two levels of one or more of the third-party green building certifications/recertifications within 36 months prior to November 30, 2023.

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