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Diamond Realty Management Inc.

10F, Hirakawacho Mori Tower 16-1, Hirakawacho 2-Chome,
Chiyoda-ku, Tokyo 102-0093 JAPANGoogle Map

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TopSustainabilityApproaches to Global Environment

Approaches to Global Environment

We are striving to reduce energy consumption and GHG emissions by improving energy efficiency, reexamining the sources of procurement, introducing equipment that contributes to energy conservation, and enhancing the energy monitoring system mainly in the portfolio of DREAM Private REIT Inc. (DPR), which manages our assets, as shown below.

Energy Management

Goal of DPR※

  • Medium-to long-term average reduction in energy consumption (basic unit basis) of 1% per year

  • Reduce GHG emissions (on a per-unit basis) by 75% from FY2016 levels by FY2030. Achieve net zero by FY2050

  • Disclosure of energy consumption

Results

  • Increase/decrease rate of energy consumption per unit of production 5.5% (FY2024 / FY2025 results)

  • Reduction rate of GHG emissions per unit of production 75.1% (FY2016 / FY2025 results)

    *Fiscal 2019 and 2020 saw a significant decrease due to the impact of the COVID-19 crisis.When setting targets, we assume a reduction rate during normal operation.

    Change in Consumption Intensity

    • Among our managed portfolio, in the calculation of the energy consumption intensity (MWh/㎡) and GHGemissions intensity (t/㎡), we considered the occupancy rate for each asset type submitted to GRESB for whichenergy consumption is monitored.

    • In calculating GHG emissions intensity, renewable energy use (including use of J-credits, etc.) and energy purchasing non-fossil certificates are excluded.

    *Source: DREAM Private REIT Inc.

  • Data on Energy Consumption and GHG Emissions

    Results of energy consumption, GHG emissions, and basic unit by asset class are shown.
    Data on Energy Consumption and GHG Emissions

  • Third-Party Assurance (Assurance Report)

    To enhance the reliability of data, environmental performance data, including energy consumption and GHG emissions data, is subject to third-party assurance by Sustainability Accounting Co., Ltd.
    Assurance Report（Japanese only）

    ※The figures subject to third-party assurance differ from those presented in the “Energy Consumption and GHG Emissions Data” section above, as they are calculated taking into account the Investment Corporation’s proportionate ownership interests in the properties held.

Promote use of LEDs for lighting

Goal of DPR※

  • Achieve and maintain a 95% ratio(Total floor area base) of lighting LEDs by 2030

  • Replacement of air conditioners/introduction of refrigerant equipment with low global warming potential at the time of installation(Implemented based on priorities established in consideration of building age and other factors)

Results

  • Lighting LEDs ratio（Total floor area base as of the end of February 2026） 91.2%

  • Introduction of refrigerant equipment with low global warming potential

    Annual electricity consumption decreased by 28% compared to before air-conditioning upgrade (Honmoku Logistics Center)

Promoting energy procurement
with zero CO₂

Goal of DPR※

  • Achieve and maintain an 95% (Total floor area base) energy-procurement ratio by eliminating CO₂ related to properties which DPR has management authority by 2030

Results

  • Ratio of energy-sourcing by CO₂ zero（Total floor area base as of the end of February 2026） 99.5%

*Properties which DPR has management authority 20
*Percentage of properties that adopt a plan to reduce their emission factors to zero through the use of 100% of renewable energy (RE100) and an electricity plan with an adjusted emission factor of zero by combining J-credits, etc. (excluding land rights). is calculated by the ratio based on the total floor area reported to GRESB.

Responding to Climate-Related Issues

Goal of DPR※

  • Identifying, analyzing and disclosing climate change risks/opportunities in line with the recommendations of Task Force on Climate-Related Financial Disclosures (TCFD)

  • Implementation of measures to enhance resilience at properties identified as having high disaster risk

Results

  • For our awareness of climate-related issues and our basic policies and commitments

    For information about our company's initiatives related to the TCFD, please see our
    Approaches to climate change / Our initiatives for the disclosure items recommended by the TCFD.

  • DPR's ｍeasures to address physical risks
    Installation of shutter stays and flood barriers to prepare for increasingly large natural disasters

    In some properties operated by DPR, shutter stays and flood barriers are installed in preparation for a large-scale natural disaster in recent years. As part of our efforts to identify natural disaster risks, we list and disclose hazard information by property under management.

    Left: Installation of wind-resistant components on shutters (Kobe Minato Warehouse)
    Right: Tidal protective board in front of the Machinery Room (Daikokuchou Logistics Center)

  • DPR's measures to address transition risks in FY2025

    Of the projects identified as measures under the main scenario of DPR's CRREM analysis (① below), one project was rescheduled for implementation in the following fiscal year due to its lower construction priority. However, the overall progress of the works was generally ahead of the level assumed in the main CRREM scenario.
    ① Replacement of refrigerant equipment with low-global-warming-potential alternatives: 10
    ② LED lighting upgrades: 10
    ③ Installation of on-site renewable energy generation systems: 5
    In FY2026, DPR will continue implementing measures to address transition risks while also undertaking measures to address physical risks, particularly flood-related risks.

Other Initiatives

  1. Environmental risk assessment at the time of property acquisition

    In addition to information disclosure from the seller and on-site surveys, we also conduct risk assessments for hazardous substances such as soil contamination, asbestos, and PCBs, and checks in line with our responsible investment policy guidelines, based on real estate appraisal reports, engineering reports, etc., at the time of property acquisition for each fund we manage.

  2. Introduction of rainwater utilization system

    Certain properties owned by DPR have introduced a system that uses rainwater for planting and cleaning vehicles.

  3. Encouraging tenants to save energy

    At properties owned by DPR, as a measure to reduce environmental impact in cooperation with tenants, posters are posted in buildings requesting cooperation for saving electricity and recycling to raise awareness of the environment on a daily basis. In addition, even in the case of properties where utilities costs are borne by tenants, DPR is proactively providing information and making proposals regarding the reduction of GHG emission intensity and the hiring of electric power companies that contribute to the reduction of electricity prices, and has achieved some results.

  4. Introduction of green leasing

    At the properties owned by DPR, it is gradually introducing so-called green leasing, such as recommending the adoption of low-carbon materials and equipment with high energy-saving performance as an environmental measure integrated with tenants when operating and renovating facilities at exclusive part of the buildings.

  5. Promotion of Financing through Green Loan
    and Sustainability-Linked Loan

    Since executing the first green loan ("GL") financing among privately placed REITs in Japan in January 2020, DPR has continued to accumulate a successful track record in green financing. Furthermore, in June 2026, DPR executed its first financing through a sustainability-linked loan ("SLL").

    Green Loan (GL)
    Green Loan ("GL") is loan whose proceeds are exclusively allocated to green projects, such as climate change mitigation initiatives and other environmentally beneficial projects.With respect to the Green Finance Framework established in September 2021, DPR has obtained the highest rating of "Green 1(F)" under the JCR Green Finance Framework Evaluation conducted by Japan Credit Rating Agency, Ltd. ("JCR"). This framework allows DPR to obtain financing through Green Loan without the need to secure a third-party evaluation for each individual financing transaction.For further details regarding the framework evaluation, please click here. (Japanese only)

    Sustainability-Linked Loan (SLL)
    A Sustainability-Linked Loan ("SLL") is a financing instrument under which loan terms are linked to the achievement of predefined Sustainability Performance Targets ("SPTs"). This structure provides a financial incentive that supports and promotes the Investment Corporation's ESG initiatives.To facilitate the timely execution of SLL financing, the Investment Corporation has established a Sustainability-Linked Finance Framework and has obtained a third-party opinion from Japan Credit Rating Agency, Ltd. ("JCR") regarding the appropriateness of the SPTs established under the framework.For further details regarding the framework evaluation, please click here.(Japanese only)

    Outline of the Green Finance Framework of DREAM Private REIT Inc.

    Target criteria

    Properties that have already obtained or are scheduled to obtain certification from one of the following third-party certification organizations are eligible.
    1) Three to five stars in the DBJ Green Building Certification
    2) B+ rank to S rank in the CASBEE for Buildings and CASBEE Certification
    3) Three to five stars in the BELS Certification (FY 2016 criteria)
    *Excluding logistics facilities with a BEI of over 0.75 4) Level 4 to Level 6 in BELS certification (FY2024 standards)
    *For non-residential buildings only.

    Financing type

    Borrowing (Loans)*

    *Borrowings are limited to the loan as private REITs cannot issue corporation bonds.
    Uses of
    procurement funds

    • Funds for acquisition and refinancing of properties that meet the criteria above

    • In the case of refinancing loans where the properties to be acquired fall under and do not fall under the above-mentioned target criteria, the total amount of loans procured at the time of acquisition of the properties will be apportioned according to the ratio of the acquisition price of each property (hereinafter referred to as the “initially procured allocated loan amount”), and the refinancing amount and the initially procured allocated loan amount will be procured as green finance within the scope of the refinancing amount and the initially procured allocated loan amount.

    • After the procurement of GL, the loan management form (outline of loans) shall be used to manage the loan, and if more than one refinance related to the same property is used as green financing, the total amount of refinancing of the relevant property shall not exceed the loan allotted at the time of initial procurement at the time of the second or subsequent refinancing.

    Unallocated fund
    management

    When the subject property is sold, etc., the loan will not be returned immediately, but instead is shifted to cover all the properties owned by DPR that meet the target criteria.
    【Specific methods】
    A：Total value of real estate appraisal applicable to the subject properties at the end of the period × LTV*
    B：GL Procurement Balance
    Continue borrowing under the condition of A = B or A > B.

    *LTV is based on the market value LTV of the entire DPR at the end of the same period.
    Disclosure Policy

    • Terms and Conditions of the procurement is disclosed on the DPR website.

    • DPR discloses the status of green building certifications and energy usage (GHG/ energy consumption unit) on the DPR website.*

    *Energy usage reduction goals have been set as part of the ESG initiatives of the DPR, and the results have been disclosed.

    Outline of the Sustainability-Linked Loan Framework of DREAM Private REIT Inc.

    KPI

    Reduction rate of GHG emissions intensity

    SPT

    Achieve a GHG emissions intensity reduction rate that is consistent with a 75% reduction by 2030 (from the 2016 base year) and net zero by 2050.

    Financing characteristics

    Interest rate varies depending on the achievement status of the SPT.
    If achieved: reduced;
    If not achieved: maintained at the initially applied interest rate (or increased if previously reduced).

    Reporting

    Report KPI results and achievement status to lenders each fiscal year.

    Third-party verification

    Energy data is verified by an external organization.

  6. Evaluation of ESG Initiatives
    by Property Management Companies

    We check the status of ESG initiatives at each property management company that manages our properties under management and screen their qualifications as business partners.

  7. Waste management

    We monitor the amount of waste generated and the recycling rate on an annual basis.
    We are striving to reduce waste through cooperation with tenants, etc.

  8. Reduction of energy, paper, and waste in our office

    Since 2019, we have been monitoring electricity consumption, paper consumption (counting of MFPs) and document disposal in our office. We strive to reduce electricity consumption, paper consumption, and document disposal by turning off partial lights in each area at the time of leaving office and renting tablet devices.

*The Goal of DPR, for which DREAM manages its assets.