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Sustainability

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Basic policies

Basic policies / Sustainability committee

The Investment Corporation and the Asset Management Company aim to contribute to the sustainable development of society (sustainability) by addressing environmental and social issues through investment and management of real estate that takes the environment, society and governance (ESG) into consideration. The environment surrounding the real estate in which the Investment Corporation invests and manages changes from day to day including changes in housing conditions due to diversification of lifestyles, rapid aging of the population, and increased demand for accommodations by foreigners due to the shift to major industrialization of tourism. As a result of changes in natural environments and diversification of society as well as those changes, we recognize that the challenges to be tackled are complex and diverse. The Investment Corporation and the Asset Management Company have established a “Sustainability Policy” and are promoting Initiatives for Sustainability with the aim of solving as many issues as possible and contributing to the realization of sustainable societies. In addition, we have separately established an “Environmental Policy” as a policy for dealing with environmental issues, and we are focusing on our efforts on real estate investment and management that takes the environment into consideration. We also aim to contribute to the achievement of SDGs (Sustainable Development Goals) by sharing the Kenedix Group's Materiality (Material issues) established by Kenedix, the parent company of the Asset Management Company. In promoting Initiatives for sustainability, the Investment Corporation will place importance on dialogue with investors as well as various stakeholders related to the Investment Corporation and the Asset Management Company through management properties and strive to disclose appropriate information.
サスティナビリティに関する方針

Sustainability Policies

The Asset Management Company has positioned initiatives on ESG (Environmental, Social and Governance) awareness as an important business management issue. To promote initiatives on ESG, the Asset Management Company has established the following Sustainability Policies.

1. Contribution to sustainable environment
We make positive contribution to sustainability by reducing the negative impact to the environment through continuously reducing energy and water consumption, CO2 emission and waste; and by eliminating and managing of hazardous materials to carry out the social mission of improving the environmental performance of properties we manage.
2. Commitment to diverse society
We contribute to realize the diverse society, considering the social impact of our properties. We endeavor to deliver built environment where safety, health and wellbeing and diversity of tenants and local community are secured.
3. Stakeholder engagement
We manage our properties as a responsible real estate asset management company by stressing the importance of engagement with our stakeholders such as investors, tenants, business partners, local communities and property management companies.
4. Attractive working environment
We aim to deliver attractive working environment by implementing measures to promote employees' health & wellbeing and diversity & equal opportunites. We develop capabilities of employees to help them achieve the best performance by providing various educational opportunities such as trainings.
5. Responsible organization
We ensure compliance and sound risk management in our entire business activities. We are committed to  responsible property investment by a responsible organization by aligning with global ESG initiatives and proactively disclosing ESG information.

 Established on September 5, 2018     
 Kenedix Real Estate Fund Management, Inc.

Environmental Policies

Environmental Policies

We at Kenedix Residential Next Investment Corporation and Kenedix Real Estate Fund Management, Inc. practice environmental awareness in conducting investment management by establishing the environmental policies stated below and proactively utilize environmental certification and assessment systems conducted by external assessment organizations.

1.Compliance with Environmental Laws and Regulations

We promote investment management with environmental awareness, in compliance with environmental laws and regulations.

2.Promotion of Energy Conservation Measures

Recognizing the importance of resources and energy, we promote systematic endeavors for energy conservation measures at the real estate properties we manage.

3.Reduction of Environmental Burdens

Intending to reduce the burdens on the environment, we endeavor to take measures for reducing CO2 emissions and wastes as well as promoting recycling, etc.
We also fully exercise caution in handling hazardous substances and environmental pollutants.

4.Disclosure of Environmental Information

We endeavor to disclose necessary information, such as our environmental policies and the status of our environmental initiatives, to a variety of stakeholders including unitholders, tenants and business partners.

5.Environmental Education and Enlightenment

We endeavor to enhance environmental awareness of our officers and employees by internally implementing environmental education and enlightenment programs.

Established on January 26, 2016
Kenedix Residential Investment Corporation
Kenedix Real Estate Fund Management, Inc.

Kenedix Group Materiality (Material issues)

The Investment Corporation and the Asset Management Company share the materials (Material issues) set by Kenedix, the parent company of the Asset Management Company. Kenedix Group will make commitment to find solutions to these issues both in business and society by making initiatives that reflect the opportunities and risks associated with each issue. Furthermore, we intend to contribute to achieving the SDGs by carrying measures for our materiality.


Sustainability committee

The initiatives for sustainability are promoted under the leadership of the Sustainability Committee established in the Asset Management Company.
The Sustainability Committee consists of the Head of Residential REIT Department as the chairperson, and the Heads of each Division in Residential REIT Department as members. The Committee holds meetings every three months in principle to discuss policies, targets, approaches on sustainability issues and monitors the progress. What is discussed at the Committee is reported to the Asset Management Committee of the Asset Management Company, as well as KDR’s Board of Directors.

 


ケネディクスグループにおけるサステナビリティへの取組み



Sustainability initiatives of the Kenedix Group 

For details on the sustainability initiative of Kenedix group, please refer to the Kenedix website and the asset management company website.

    


Target on energy consumption etc.,

Environmental initiatives

Target on energy consumption etc.,

The Asset Management Company has set long-term goals concerning reduction of the amount of energy used and other efforts for consumption in common areas of residential properties as shown below, and promotes initiatives leading to reduction of environmental burden while continuously monitoring its efforts.. 

(Residential Facility)

Items Reduction targets
Energy consumption 5 year(FY2019 through FY2023)/5% total reduction in intensity(Annual average of 1%)
 GHG emissions 5 year(FY2019 through FY2023)/5% total reduction in intensity(Annual average of 1%)
 Water use
5 year(FY2019 through FY2023)/To prevent increase in intensity
※Healthcare facilities will avoid increasing energy consumption and water usage over  5 years (FY2019-2023)/intensity basis
 

 

Environmental Performance
■Environmental Performance
(Residential)
Items 
Unit   FY 2017 Actual  FY 2018 Actual
(Baseline year) 
 FY 2019 
   Actual       Y on Y performance     % change  
 (vs FY2018)
% Change (vs FY 2018)
(Comparison of
the s
ame condition)
 The number of Properties  Properties 106 107 112 - - 105
 Energy Consumption  Total Usage (MWh)  4,994 4,805 5,018 4.4% 4.4% -
 Intensity (MWh/㎡)  0.083 0.077 0.070 -9.5% -9.5% -4.6%
 GHG emissions  Total Usage (MWh)  2,557 2,460 2,449 -0.5% -0.5% -
  Intensity (MWh/㎡) 0.043 0.040 0.034 -13.8% -13.8% -9.1%
 Water use   Total Usage (MWh) 3,986 3,562 3,799 6.7% 6.7% -
  Intensity (MWh/㎡)  0.069 0.060 0.055 -8.2% -8.2% -8.7%

(Halthcare)
Items 
Unit   FY 2017 Actual  FY 2018 Actual
(Baseline year) 
 FY 2019 
   Actual       Y on Y performance     % change  
 (vs FY2018)
% Change (vs FY 2018)
(Comparison of
the s
ame condition)

 The number of Properties   Properties  12 12 18 - - 10
 Energy Consumption  Total Usage (MWh) 12,348 12,977 25,376 95.6% 95.6% -
 Intensity (MWh/㎡)  0.130 0.133 0.181 35.9% 35.9% 5.4%
 GHG emissions  Total Usage (MWh) 6,322 6,644 12,384 86.4% 86.4% -
  Intensity (MWh/㎡)  0.067 0.068 0.088 29.6% 29.6% 0.5%
 Water use   Total Usage (MWh) 203,576 185,566 352,142 89.8% 89.8% -
  Intensity (MWh/㎡) 1.92 1.82 2.38 30.4% 30.4% 6.3%

(Residential+Healthcare)
Items 
Unit   FY 2017 Actual  FY 2018 Actual
(Baseline year) 
 FY 2019 
    Actual        Y on Y performance     % change  
 (vs FY2018)
% Change (vs FY 2018)
(Comparison of
the s
ame condition)

 The number of Properties  Properties 118  119 130 - - 115
 Energy Consumption  Total Usage (MWh)  17,342 17,782 30,394 70.9% 70.9% -
 Intensity (MWh/㎡)  0.112 0.111 0.144 28.8% 28.8% 2.5%
 GHG emissions  Total Usage (MWh) 8,879 9,104 14,832 62.9% 62.9% -
  Intensity (MWh/㎡) 0.057 0.042 0.070 68.2% 68.2% -2.3%
 Water use   Total Usage (MWh)  207,562 189,128 355,941 88.2% 88.2% -
  Intensity (MWh/㎡) 1.27 1.17 1.64 39.8% 39.8% -4.0%
(Note 1) The fiscal year starts on April and end on March of the following year.
(Note 2) "Residential Facilities" indicates actual figures for common areas. 
(Note 3) "Comparison of the same conditions" compares the same properties owned from the baseline year to the target year. The amount of electricity related to antennas and other incidental equipment installed after the acquisition of the property is not taken into account.
(Note 4)" CO2 emissions figures" are calculated by the Asset Management Company using the substitute value for emissions coefficient for each electric power supplier announced by the Ministry of the Environment. 
(Note 5) Starting in fiscal 2019, Nursing and health facilities, which use more energy and other resources, have been included in the aggregate, resulting in an increase in energy and other resources consumption. Because a nursing and health facility uses medical and rehabilitation equipment and devices, it is expected to use more energy, etc. than senior home with nursing care.

Example of environmental initiatives

Example of environmental initiatives

■Installation of LED Lights in Common Area

KDR is making various efforts to conserve energy from the viewpoint of environmental consideration and cost reduction. One of our efforts is to reduce the cost of replacing light bulbs and electricity consumption by changing the lighting fixtures in common areas to LEDs as appropriate.



1H 2015  2H 2015
1H 2016

2H 2016
1H 2017

2H 2017
1H 2018


2H
 2018
1H 2019


2H 2019
Total  
Property (props)  4 8 14 10 10 13  59
 Expense (mln yen) 9.3 21.2 22.4 11.0 14.6 17.1  95.8
 Annual reduction (mln yen) 0.9 7.0 7.7 3.5 3.2 3.4 26.0
Green Lease
■Green Lease 
A green lease is where building owners and tenants collaborate to reach voluntary agreements with regards to energy saving and other measures to reduce environmental burdens of real estate as well as improvements of indoor environments through contracts, memorandums of understanding and such and implement the contents of these agreements.
          
Based on the green lease at the KDR-owned healthcare facility “TEN”, KDR conducted LED lighting implementation work for energy-saving at the KDR’s expense.  A certain part of the tenant’s benefits of reduction in electricity charges for the lighting equipment and bulb replacement costs resulting from such renovations are paid to KDR as green lease fees.

 
 
 
■Installation of share cycle station

 

KDR provides a part of the property as a rental cycle base for the purpose of providing services to residents and surrounding residents and reducing environmental impact.


Installation: 5 props

 

Remote Surveillance of Road Heating
■Remote Surveillance of Road Heating

ロードヒーティングの遠隔監視

We have installed remote surveillance system for road heating (snow melting equipment) at our three properties located in Sapporo. The installations have results in significant reduction in the fuel costs melting snow.

 

■Installing Secure Lockers for Deliveries

宅配ボックスの設置

Secure lockers for parcels eliminate the need for delivery companies to return to a property when a resident is not home the first time. This reduces transportation CO2 emissions and wasted working time for drivers.

Installation:119 lockers
Installation rate:96%

 

■Outlets for recharging electric cars

宅配ボックスの設置

Parking areas have outlets so that residents can easily recharge electric cars.



Installation: 3 props

 

■Posters for conservation of energy and water

省エネ推進ポスターの掲示

Putting up posters in common areas to urge tenants to consider the environment through conservation of energy and water

Example of Social initiatives

Social initiatives

Example of Social initiatives

■Preparation of Disaster Readiness Packs 

Preparation of Disaster Readiness Packs

In preparation for an outbreak of disasters, etc., we have prepared disaster readiness packs (containing foodstuff and drinking water, etc. for emergencies) at some of our properties for residing tenants to use in emergencies.



Installation:120 props. 
Installation rate:96.8%


■Installation of SATOYAMA Units

Installation of SATOYAMA Units

A "SATOYAMA Unit" is a group planting unit of conventional seeds and plants remaining dormant in deserted village forests (called "satoyama"). We have installed the units at the entrance of KDX Residence Okachimachi.
Through the installation of the "SATOYAMA Units," we contribute to activities for restoring satoyama, as well as provide a comfortable living environment and help prevent bicycles from being left in no-parking areas.



■Sustainability Guide

Preparation of Disaster Readiness Packs

For the purpose of enabling the comfortable, safe and secure living of tenants, distribution of guides on sustainability containing information on initiatives on energy conservation, sorting of waste, and disaster preparedness.

Tenant satisfaction survey

■Tenant satisfaction survey


KDR conducts surveys of satisfaction and request surveys regarding management and operation by third-party organizations for residents in some residential facilities. In addition, based on the results of the survey, KDR are making various efforts to increase the satisfaction for residents.

  Date of the survey      Total no. of target property      No. of respondents   
March  2020  111 props  1,381 households

Initiatives for Contributing to Local Communities

■Initiatives for Contributing to Local Communities


As part of its support for local activities, the asset management company’s employees volunteered to participate in local summer festivals sponsored by operators of “Yuimaru Hijirigaoka” owned by KDR to promote interaction with local communities and residents.

Human Capital Development

Human Capital Development

KDR is not allowed to hire employees under the provisions of the Act on Investment Trusts and Investment Corporations, and the Asset Management Company’s employees substantially manage its assets. Kenedix Real Estate Fund Management, Inc. (KFM) , the asset management company of KDR, has the policy that human resources are crucial for sophisticated investment management and has undertaken various initiatives to promote it. As Kenedix group, including the asset management company, have identified "Attracting and retaining talents, and developing their careers" , " Health and wellbeing of employees “ and “Diversity and equal opportunities” are as material topic and have aimed to maintain an attractive working environment.

Attracting And Retaining Talents, And Developing Their Careers

Kenedix group have many programs to develop the skills of our people and are always seeking ways to upgrade training and other educational activities so that all our employees can realize their full potential.

<Workforce diversity and stability>
Kenedix group is still recruiting experienced professionals in a broad range of business fields. In addition, we have been recruiting new university graduates continuously since 2005. Maintaining a diverse workforce is an important element of our sustainability as a real estate asset management company. Since our establishment in 1995, we have never conducted lay-offs for the purpose of downsizing our workforce. We retained all of our people even during the global financial crisis as many real estate developers and asset management companies struggled to avoid bankruptcy.

<Human resource development system>
To continuously improve the operational skills of employees, Kenedix group provides employees with opportunities to take external seminars that are structured for specific job categories, such as managers, mid-level employees and new employees as well as various training programs.
New university graduates first complete one-month entry training and then rotate through three jobs over five years. On-the-job training in different departments gives them opportunities to obtain a variety of experience and a broad range of viewpoints.

■English training
For those who applied, Kenedix group provides the English training by teachers from educational institutions in which the trainees participate in discussion every week to improve their ability. Also online-speaking program is available so employees can flexibly utilize the opportunity.

■Job-specific skill development training
Kenedix group provides seminars arranged by a third party for specific job categories, such as managers, mid-level employees and new employees to give them opportunities to acquire the skills required at each level.

■Self-development program
Kenedix group reimburses employees for the cost of external seminars, classes and other educational activities for acquiring the knowledge and skills required for their jobs.

■Oversea training program
Kenedix group has oversea training program that constantly send employees, often in their early career to real estate management company in California, to enhance their English and learn the operation such as acquisition or property management in north America.

■Study abroad program

Kenedix group provides opportunities to obtain a broad range of knowledge, personal connections and international viewpoints by sending employees to study in oversea graduate schools where they acquire skills to become the next generation of management.

■Training program
KFM provides the opportunities to participate in the training program provided by Professor who is specialized in data analysis and real estate economics.

<Encouraging people to obtain professional certifications>
To keep the status of leading company with professionals that provide high quality services, it is encouraged for its employees to participate in degree programs or obtain recommended or supporting certifications to develop career for future leader by subsidizing the cost at Kenedix group.


<Number of employees with certifications>      ( as of Dec.31, 2019)   
Real estate notaries 159 ARES certified masters 74
Tax accountants 5 Chartered members of SAAJ  13
Certified real estate consulting masters 24 Administrative scrivener  2
 Certified building administrators  29  Judicial scrivener  1
 Licensed senior architects  13  Administrative managers  11
 Real estate appraisers  7  Condominium property managers    8
 Certified public accountants (Japan)  6  Loan operations managers  14
 Loan operations managers(USCPA)  3  Attorneys  2
Note: These figures are based on individuals who are working at Kenedix group companies and employed directly by Kenedix.

<Internal job application program>
Kenedix group has internal job application program to provide its employees with the opportunity to demonstrate the best of their ability and to utilize human resource within the company. Employees are allowed to apply for the jobs they wish and design own career.

<Evaluation system to support employees' career development>
Employees receive their evaluation every six months, in the middle of the year and at the fiscal year end (twice a year). Managers hold interviews with each employee to discuss his/her performance, satisfaction in performing the job and career opportunities. At the fiscal year end, all employees receive their competency evaluating so the both the company and employees understand what is expected and current status. This objective and transparent process support employees and managers setting next goal.

<Introducing J-ESOP (Japanese employee stock ownership plan)>
Kenedix group has made the decision to install J-ESOP (Japanese employee stock ownership plan), for its employees in senior management to enhance their awareness of participating in management of the company by sharing the benefit with shareholders and to attract talents in long term.

Health and wellbeing of employees

Health and wellbeing of employees

Kenedix group has been promoting initiatives to maintain work/life balance, provide working environment that is advantageous in soft and hard to maximize employee's ability. In addition, the company has prepared the supporting programs to cover various needs of employees.

<Work Style Reform>
Kenedix group has been improving its working environment by encouraging employees to take payed holiday, reducing overtime work and introducing various practices to allow flex work style.

■Promoting to take payed holiday
On top of annual paid leave, there are an established the system which promote employees to take consecutive holidays during summer, from Jul to Sep. Managers in each department are to make sure their subordinates take this holiday.

■Initiatives to reduce overtime
Managers in each department are monitoring working hours in their team and adjusting workload for employees to minimize overtime. If an employee was found to have worked more than certain hours, a physical check by doctor is arranged upon employee's request.

■Flex time
Kenedix group has adopted flexible attendance hours. Employees are allowed to choose the time they start working from 8 to 10 am by day to work according to their convenience.

<Health and wellbeing>
Kenedix group has been endorsing health management to support physical and mental health of employees and preparing comfortable working environment.

■Health committee
Kenedix group has established health committee and organized monthly meeting to discuss and take measures to promote health and prevent disorder for its employees. Also the committee sends email every month to all employees on relevant topics to enlighten them on health and wellbeing.

■Annual physical health checkup
All employees are to receive annual physical health checkup by doctor on company cost.

■Mental Health care
All employees have access to counseling service provided by the company where employees are allowed to report any personal issues or issues regarding the company to external counselors, without being noticed by the company to raise their mental literacy. Newsletter with relevant topics on mental health is sent every month to notify of this service. In addition, the company provides annual stress check to all employees to prevent illness of which result are provided to each employee and, if necessary, checkup by doctor is arranged.


■Positive working environment for workers

KDR and KFM are located at "Hibiya Park Front", the building Kenedix, Inc participated in its development. The transportation of the building is excellent since it is directly connected to 2 metro stations, Kasumigaseki and Uchi-saiwai-cho. Located right across the Hibya Park with abundant nature and equipped with services and facilities to support office workers, it provides workers with an ideal environment.

■Interaction among employees in a communication room
Located adjacent to working space, the communication room is a place employees can use for a break, a small meeting or any other purpose, being the hub for communication among employees.

<Other initiatives>

■Off-site meeting
Every December, off-site meeting has been held in which all employees are invited to listen to presentation by management executive or lecture by outside specialist. This occasion is used to give awards to the projects and promote communication among employees.

■Support for group activities outside of work
KDX subsidizes for group activities such as futsal or golf, which help employees make personal connection beyond his/her job scope.

■Group trip to Okinawa
A trip to Okinawa was organized in Oct 2018 so the employees who usually have little opportunity of meeting with colleagues in other departments have joined together to make new acquaintances or further friendship.

Diversity And Equal Opportunities

Kenedix group been promoting initiatives to create working environment that all employees appreciate diversity such as respect for race, religion, sex, age, sexual preference, disabilities or nationality and respect for human right to maximize their productivity.

<Respect for human right>
KDX and KFM have stipulated respect for human rights and prohibition on discrimination and harassment on its policy in compliance manual and provide compliance trainings to raise awareness.

<Encouraging female and senior employees>
Kenedix group uses many measures to provide workplace environments where women can do their jobs with confidence and comfort. This includes support programs that enable women to remain at Kenedix once they have children. Women are an important part of the diversity and vitality that define our workforce.

<Employment system for seniors>
As one way to increase diversity, Kenedix Group have a system that allows employees who have reached the official retirement age of 60 to return to work until the age of 65. This program also helps maintain a sufficient number of people as Japan's working age population declines. With experience dating back to the start of real estate asset management in Japan, these older workers have considerable knowledge they can pass on to others.

<Support for childbirth, childcare and senior nursing care>

KDX has prepared various programs to support employees to work through their life event such as having children or nursing elderly.

■Childbirth and childcare
Female employee who is expecting receive paid holiday to go regular checkups and easing of their working conditions such as coming late to work or taking regular breaks. Special leave before and after the birth is available and male employees whom partner is having childbirth are also allowed to take day-offs. Employees can receive time off for the care of a baby or when a preschool age child is sick or requires other care. We also offer flexible working time so employees can care for family members. For example, employees can limit overtime and late-night assignments, reduce working hours, or use staggered hours. There is also a subsidy for expenses for child-related transportation needs before and after work and a discounted babysitter service.

■Nursing elderly
Employees who have to take care of their parents or relatives are allowed to take special day offs, shortened working hours or flex attendance hours and exempted from working overtime according to the necessity of each family. Those measures are more than legally required.


Acquisition of GRESB Assessment

Certifications

Acquisition of GRESB Assessment

GRESB (Global Real Estate Sustainability Benchmark) is a benchmark system for evaluating the sustainability performance of the real estate sector, established in 2009 primarily by a group of major European pension funds. Leading institutional investors participate in the GRESB assessment to utilize it in implementing their real estate investment and management processes. A high degree of attention has been paid to the GRESB survey, as it is used by institutional investors when they select investment targets and on other occasions. The GRESB survey, which is conducted each year, is participated in by many real estate companies, REITs and real estate private funds from around the world. The Investment Corporation is also a participant, starting with the 2016 GRESB survey.

The Investment Corporation has been awarded a “Green Star” rating in the 2018 GRESB Real Estate Assessment, as its efforts for improving sustainability were evaluated, receiving high evaluation on both “implementation and measurement” and “management and policy”. The Investment Corporation also acquired two star (out of five star) GRESB Rating, which is calculated relative to the global performance of reporting entities.

Environmental certificate

Environmental Certifications.

The Investment Corporation is having its properties externally certified and evaluated by third parties to increase objectivity and reliability with respect to its initiatives to reduce its properties’ environmental burden and boost medium- to long-term asset values. Certified rate of our properties that have obtained environmental certifications are as follows.

Environmental certification status                                         as of March 31, 2020
Number of certified properties  Number of portfolio properties
(Note 1) 
Proportion of certified properties
(based on number of properties) 
Certified area
(total floor area) (Note 2) 
Portfolio area
 (total floor area) 
(Note 1) (Note 2) 
Proportion of certified rate
(based on total floor area)
DBJ Green Building Certification   12  149 8.1%  109,643.20㎡  572,022.90㎡  19.2% 
BELS Certification  1  149 0.7%  3,175.15㎡  572,022.90㎡  0.6% 
(Note 1) The land with leasehold interest is excluded. 
(Note 2) For the sectional ownership building, the total floor area owned by the Investment Corporation is stated.
DBJ Green Building

Acquisition of DBJ Green Building Certification

The DBJ Green Building Certification is a certification system established by the Development Bank of Japan Inc. (DBJ) in April 2011, designed to support real estate that demonstrates environmental and social awareness ("Green Buildings"). The system assesses and certifies properties that meet social and economic requirements, based on the comprehensive evaluations it makes on the environmental performance of the subject properties as well as their responses to a variety of stakeholders, including disaster prevention and consideration for communities. By doing so, the system is understood to support such environmental and social initiatives. 

Details of the properties certified by the DBJ Green Building Certification

Based on the DBJ Green Building Certification system, the Investment Corporation has acquired certifications for the following 12 properties it owns.

KDXDaikanyama Residence

(Shibuya city, Tokto)

DBJ Green Building

Properties with exceptionally
high environmental & social awareness

DBJ Green Building

KDXResidence Ohori Harbor View Tower

(Fukuoka city, Fukuoka)

DBJ Green Building

Properties with exceptionally
high environmental & social awareness

DBJ Green Building

KDXResidence Higashi-sakura I

(Nagoya cityi, Aichi)

DBJ Green Building

Properties with exceptionally
high environmental & social awareness

DBJ Green Building

KDXSakaisuji Hommachi Residence

(Osaka citi, Osaka)

DBJ Green Building

   Properties with excellent environmental & social awareness

KDXResidence Hommachibashi

(Osaka city, Osaka)

DBJ Green Building

Properties with excellent environmental & social awareness  

KDX Residence Ebisu

(Shibuya ward, Tokyo)

DBJ Green Building

Properties with excellent environmental & social awareness

DBJ Green Building

KDX Residence Hanzomon

(Chiyoda ward, Tokyo)

DBJ Green Building

Properties with excellent environmental & social awareness

DBJ Green Building

Serenite Kobe Motomachi

(Serenite Kobe Motomachi)

DBJ Green Building

Properties with high environmental & social awareness

KDX Residence Shukugawa Hills

(Nishinomiya-shi, Hyogo)

DBJ Green Building

Properties with high environmental & social awareness 

DBJ Green Building

Ashiya Royal Homes

(Ashiya city, Hyogo)

DBJ Green Building

Properties with exceptionally
high environmental & social awareness

DBJ Green Building

KDX Residence Yotsuya

(Shinjuku ward, Tokyo)

DBJ Green Building

Properties with excellent environmental & social awareness

DBJ Green Building

KDX Residence Toyosu

(Koto ward, Tokyo)

DBJ Green Building

Properties with excellent environmental & social awareness 

DBJ Green Building

BELS Certification

BELS Certification

BELS (Building-Housing Energy-efficiency Labeling System) is the third-party certification system to rate houses and buildings in accordance with duty to make effort to label energy saving performance in the Act on Improving Energy Consumption Performance for Architectural Structures. Houses and buildings are evaluated based on the value of BEI (Building Energy Index) derived from the primary energy consumption based on the government-designated energy consumption performance standard of architectural structures.
The evaluation and indication based on the system shall be implemented by the registered organizations as operators of BELS operations, which fall under registered housing performance evaluation organizations that are members of the evaluation association, designated construction confirmation authorities or registered building research agencies.
Evaluation result is indicated by the number of stars (1-5).


■Certified Results
 Based on the evaluation of JAPAN ERI CO.,LTD., The Investment Corporation received the certification for the following properties.

Property Name Evaluation Acquisition Date
of Certification
Plasant Grand Ota Tamagawa ★★★ May 31, 2017

CASBEE Certification

Self-assessment based on Comprehensive Assessment System for Built Environment Efficiency (CASBEE-new construction (simplified version)) was carried out in November 2015 in Nishinomiya City, Hyogo Prefecture, and notification was submitted to Nishinomiya City. Comprehensive Assessment System for Built Environment Efficiency (CASBEE) is a method for evaluating and rating the environmental performance of buildings and the built environment.



Social Bond

Social Bond

KDR issued the J-REIT’s first social bonds in December 2019. By offering an opportunity for investors who want to make ESG investments has attracted a broader range of investors and diversified fund procurement channels. The Investment Corporation will allocate the funds procured through social finance to the acquisition of assets eligible for social finance, repayment of borrowings required for such acquisition and redemption of investment corporation bonds (including refinance).

What is a social bond

“Social bond※” refers to bonds for which the entire amount of the procured funds is allocated only to initial partial or full investment into new or existing eligible social projects or refinancing and is compliant with the four core requirements of the social bond principles (use of procured funds, evaluation and selection process of project, management of procured funds and reporting).

※ The International Capital Markets Association defined Social Bond Principles.

Social Finance Framework

■Use of funds procured through social finance
The Investment Corporation will allocate the funds procured through social finance to the acquisition of assets eligible for social finance (described in below), repayment of borrowings required for such acquisition and redemption of investment corporation bonds (including refinance).
 
■Assets eligible for social finance
 Assets eligible for social finance refer to assets fulfilling the following eligibility criteria.
 
 Senior living facilities Private senior homes
Serviced senior housing
Apartments for the elderly
Group homes for elderly with cognitive impairment
Small multi-function facilities
Daycare facilities, etc.
 Medical facilities  Hospitals
Clinics
Medical malls
Nursing and health facilities, etc.

※ Please refer to "Healthcare Facilities" in the list of portfolios for assets eligible for social finance of the Investment Corporation.
 

■Selection criteria and process of project 
The requirements of assets eligible for social finance are stipulated in the Management Guidelines of Residential REIT Division prepared by Kenedix Real Estate Fund Management, Inc., the asset management company of the Investment Corporation. In addition, as for the procurement of social finance, compliance with the eligibility criteria (eligibility criteria in (2) above) of social finance will be screened in the process of decision-making for the acquisition of assets and borrowing of funds.
 
■Management of procured funds
Debt eligible for social finance is the amount calculated by multiplying the total acquisition price of the assets eligible for social finance in the portfolio of the Investment Corporation with the ratio of interest-bearing debt to total assets, and the upper limit of social finance will be set.
 
The maximum amount of social bonds that can be issued by the Investment Corporation is ¥26.9 billion, and the Investment Corporation currently issues ¥2.0 billion as social bonds as of the end of January 2020.


The figures as of the end of January 2020 are as follows.

 Acquisition price  ¥234.7billion (144 properties)
 Assets eligible for social finance  ¥54.1billion (24 properties)
 LTV  49.7%
 Debt eligible for social finance  ¥26.9 billion

Allocation report of social bond

As of January 2020, the allocation report about social bond is as follows. 

Total amount of outstanding social bond: ¥ 2,000 million 


Kenedix Residential Next Investment Corporation Sixth Series Unsecured Investment Corporation Bonds(the “social bond”)
 
Total amount issued
 ¥ 2,000 million
Total amount of funds raised (net proceeds)
 ¥ 1,983 million
Interest rate  0.750%per annum
Issue date
 December 20, 2019
Redemption date
 December 20, 2029
Total Allocated amount
 ¥ 1,983 million (100% allocated on December 30, 2019)
Press release at pricing date
 Notice Concerning the Issuance of the Investment Corporation Bonds (Social Bond)

Evaluation by External Organization

The Investment Corporation received “Social 1(F),” the highest rating in “JCR Social Finance Framework Assessment,” from Japan Credit Rating Agency, Ltd. (JCR) with regard to the eligibility of social finance framework.

Social Finance Framework Evaluation Results by JCR

Reporting

The Investment Corporation discloses the following output indicators and outcome indicators.
 
 <Output indicator
 ① Overview of building and lease
 ② Status of tenants and overview of facility (number of rooms, capacity, number of tenants, occupancy rate, etc.)
 ③ Status of profit/loss of owned real estate (details of expenses in real estate leasing business, NOI)
 ④ Overview of operator
 ⑤ Real estate appraisal value as of the end of the fiscal period
※Such indicators will not be disclosed in cases when approval from the operator cannot be obtained.

※ For ①, ②, ④ and ⑤ above, please refer to the Financial Results for the Period Ended January 2020(16th Fiscal Period) and ③ above, please refer to the Earnings Performance of the Properties.
 
 <Outcome indicator>
   
■Asset scale of J-REITs and the percentage of healthcare facilities(Acquisition price)

   
Source: Japan Real Estate Securitization Association 「ARES J-REIT Databook(February 2020) 」

■Change in the amount invested in healthcare facilities by KDR
 
 
 
 
 
 

 
 


■Overview of unitholder benefits (promotion of understanding and use of healthcare facilities through unitholder benefits)

Please click here for further details.

 <Impact (Qualitative Targets)> 
By linking capital market needs with Healthcare Facilities operators' needs, KDR will promote the provision of superior Healthcare Facilities and contribute to the promotion of socially beneficial capital investments.