Green Finance

Use of Proceeds of Green Finance

Net proceeds from the green bonds or green loans will be used to fund the acquisition of specified assets that will meet the eligibility criteria in below (Green Eligible Assets) or refinance borrowings required for acquiring the Green Eligible Assets.

Eligible Criteria

Eligible Criteria are assets or projects that satisfy either of the following requirements.

Properties that have obtained or renewed, or to obtain or renew in the future, any of the following certifications ① through ⑤

• ①DBJ Green building certification : 5-star, 4-star or 3-star
• ②CASBEE certification: CASBEE-Building CASBEE-Real estate (B+rank, A rank or S rank) / Municipal version of CASBEE (B+rank, A rank or S rank) (Note 1)
• ③BELS evaluation in FY2016 standard : 3-star, 4-star or 5-star (Note2)
  BELS evaluation in FY2024 standard : level 4, level 5 or level 6 (Note3)
(Note 1)The look-back period shall be 3 years from the date of completion of construction.
(Note 2)In the case of new acquisition for existing buildings built before 2016, existing non-compliant buildings (factories, etc. (including logistics facilities): BEI = 0.75 or more) are not permitted.
(Note 3)New acquisitions of existing buildings built before 2016 must be Level 3 or above and excluding buildings with outdated legality (factories, etc. (including logistics facilities) : BEI=above 0.75).
• ④Renewable energy generation facilities associated with buildings (limited to solar power generation facilities on the premises)
• ⑤Equipment designed to reduce environmental impacts (limited to equipment that achieves 30% or higher energy efficiency before introduction)

Management of Proceeds

If there are unappropriated funds at the time of issuing green bonds or green loans, MEL will disclose an appropriation plan on its website. In addition, if the property for which the proceeds will be used will no longer be a subject of the use of proceeds due to its sale, MEL will disclose this in its press release and its website.

Upper limit of green finance procurement is calculated by total acquisition price of Eligible Green Projects multiple by total asset LTV.

Amount of Procured Funds and Allocation (As of August 31, 2024)

（Note） LTV-based Green Finance (Debt) Capacity =Total Acquisition Price of Green Eligible Assets × The Total Asset LTV

This table can be scrolled sideways.

This table can be scrolled sideways.

Evaluation by Third-Party Entities

MEL has obtained a Green 1(F) (highest for JCR Green Bond Evaluation) rating in preliminary evaluation for the competence of its Green Finance Framework from Japan Credit Rating Agency, Ltd. (JCR). Please refer to JCR’s website.

• For detailed information : JCR Green Finance Framework Assessment

Use of Proceeds of Green Equity

Net proceeds from Green Equity Offering will be used to fund the acquisition of specified assets that will meet the eligibility criteria in below (Green Eligible Assets) or refinance borrowings required for acquiring the Green Eligible Assets.

Eligibility Criteria

Eligible Criteria are assets or projects that satisfy one of the following requirements.

• a.Properties that obtained or renewed, or to be acquired in the future with one of the certifications from a third-party certifier listed in (1) to (3) below.

  • (1) DBJ Green building certification: 5, 4 or 3 stars
  • (2) CASBEE Certification: S, A or B+
  • (3) BELS Evaluation: 5, 4 or 3 stars

• b.Renewable energy generation facilities associated with buildings
  (limited to solar power generation facilities on the premises)

• c.Equipment designed to reduce environmental impacts
  (limited to equipment that achieves 30% or higher energy efficiency before introduction)

Management of Proceeds

Net proceeds from the Green Equity Offering will be used to the acquisition of new or existing properties or to refinance immediately after the execution of that. The proceeds from the Green Equity Offering are managed in cash or cash equivalents until the fully allocated to the eligible green projects.

Reporting

MEL will disclose the allocation plans with respect to the appropriation of proceeds from the Green Equity Offering, if any, that is not yet allocated at the time of issuance of the investment units. In addition, regarding the status of allocation of proceeds and the following impact reporting, the amount to be appropriated and the detail of subjected property to be appropriated shall be disclosed promptly. Disclosure of the allocation status shall be completed upon the allocation of the proceeds are completed.

＜Status of Green Building＞

• Number, Type, and Rank of environmental certifications of the assets

• For detailed information : Environmental Certifications

＜Environmental Benefit＞

*Disclose on a portfolio basis considering confidential information of MEL.

• Water usage

• Total energy consumption (electricity consumption and gas/fuel consumption)

• GHG emissions

• Waste discharge weight

• Solar power electricity generation

• Details of equipment and facilities installed to reduce environmental impacts and energy efficiency(saving) benefits.

• For detailed information : Environmental Performance Data

Amount of Procured Funds and Allocation

This table can be scrolled sideways.

Evaluation by Third-Party Entities

MEL formulated “Green Equity Framework” with reference to the four elements indicated by the Green Bond Principles stipulated by the International Capital Market Association (ICMA) and the Green Bond Guidelines by the Ministry of the Environment. MEL has obtained a second-party opinion for the eligibility of the “Green Equity Framework” from DNV GL, a third-party ESG evaluation agency.

• For detailed information : DNV SECOND-PARTY OPINION

＜Disclaimer＞

Our Green Equity Framework and DNV’s second opinion related thereto are available here, consistent with our past disclosure practice with respect to our financings. These documents do not constitute an offer or sale of our securities in Japan, the United States or any other jurisdiction. Neither we nor Mitsubishi Jisho Investment Advisors, Inc., our asset manager, are experts in green equity assessment, nor do we have the ability to assess or independently verify the assessment provided to us by DNV. The information contained in the Green Equity Framework or DNV’s second opinion should not be relied upon in making an investment decision with respect to any of our securities.