Nippon Prologis REIT : (Reference) News Release by Japan Credit Rating Agency

Japan Credit Rating Agency, Ltd. (JCR) announces the following credit rating.

Nippon Prologis REIT, Inc. (security code: 3283)

16-D-0986

February 10, 2017

Long-term Issuer Rating: AA Outlook: Stable

Bonds: AA

Rationale

1. Nippon Prologis REIT, Inc. ("NPR") is a J-REIT that invests in logistics facilities, particularly Class- A logistics facilities. Its asset management company, Prologis REIT Management K.K., is sponsored by Prologis K.K., the Japanese arm of Prologis Group. Being helped by full support from the Prologis Group, NPR expanded its present assets to 477.8 billion yen measured by the total acquisition price with 36 properties, which is one of the largest sizes among the logistics J- REITs.

2. With an established business model that while the Prologis Group develops Class-A logistics facilities and performs tenant leasing operation, NPR owns properties after construction completion, NPR has been promoting external growth by leveraging the Prologis Group's pipelines, and acquired 7 new Class-A logistics facilities developed by the sponsor for 72.7 billion yen over the past year. It aims for constant external growth toward further growth and earnings stability. Having a sufficient pipeline of 14 properties for approximately 190.0 billion yen including properties that are currently projected by sponsor in addition to the already acquired properties with preferential negotiation rights, it ensures opportunities for acquisition of high-quality properties without relying on market. All of the NPR's properties are Class-A logistics facilities that were developed by the Prologis Group. Its portfolio average age, standing at 6.7 years as of December 2016, remained almost unchanged from 6.5 years a year ago. Given the low portfolio PML of 1.2%, JCR sees that NPR has competitive strength in its specification of logistics facilities. NPR maintains a high occupancy rate on the back of this high competitive strength and relations with customers including tenants and owners of goods of the Prologis Group. It also controls its LTV ratio at a conservative level between 30% and 40%. Taking the above into consideration, JCR affirmed NPR's rating with Stable outlook.

3. NPR's portfolio occupancy rate was 97.2% as of November 30, 2016. NPR has been maintaining a high average occupancy rate of above 97% for the fiscal periods since its listing. With an approximately 80% portfolio composition ratio by type of Multi-Tenant which has higher versatility as compared with Build-to-Suit, more than 4-year average lease remaining years to expiry, 100% fixed-term lease ratio and diversified tenants, NPR has built a portfolio, from which it can expect a trend of relatively stable occupancy rate going forward. Larger volume supply of new logistics facilities than the past average is expected in 2017. NPR has steadily renewed the lease contracts that expire by November 31, 2017. It advanced its internal growth with support from the property management company Prologis K.K. as shown by the positive average rent growth rates that have been achieved since the listing.

4. NPR conducts its financial management focused on long-term stability. As shown by its long-term debt ratio of 96.3%, fixed interest rate ratio of 95.8%, average remaining debt duration of 4.2 years, it finances required funds mainly through long-term fixed interest rate debts. While expanding the assets, NPR has been controlling its LTV ratio at a conservative level between 30% and 40% through public offering. With no expectation of a significant increase of its LTV ratio, it will keep a conservative LTV ratio for the time being.

Shigeo Sugiyama, Takanori Akiyama

Rating

Issuer: Nippon Prologis REIT, Inc.

Long-term Issuer Rating: AA	Outlook: Stable
Issue Amount (bn)	Issue Date	Due Date	Coupon	Rating
bonds no.1 Y2	Nov. 27, 2014	Nov. 27, 2019	0.338%	AA
bonds no.2 Y3	Nov. 27, 2014	Nov. 27, 2024	0.930%	AA

Rating Assignment Date: February 8, 2017

The criteria used for identifying matters which serve as assumptions for the assessment of the credit status, and the criteria used for setting of grades indicating the results of the assessments of the credit status are published as "Types of Credit Ratings and Definitions of Rating Symbols" (January 6, 2014) in Information about JCR Ratings on JCR's website (http://www.jcr.co.jp/en/).

Outline of methodology for determination of the credit rating is shown as "J-REIT" (June 2, 2014) in Information about JCR Ratings on JCR's website (http://www.jcr.co.jp/en/).

Japan Credit Rating Agency, Ltd.

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Information herein has been obtained by JCR from the issuers and other sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error as well as other factors, JCR makes no representation or warranty, express or implied, as to accuracy, results, adequacy, timeliness, completeness or merchantability, or fitness for any particular purpose, with respect to any such information, and is not responsible for any errors or omissions, or for results obtained from the use of such information. Under no circumstances will JCR be liable for any special, indirect, incidental or consequential damages of any kind caused by the use of any such information, including but not limited to, lost opportunity or lost money, whether in contract, tort, strict liability or otherwise, and whether such damages are foreseeable or unforeseeable. JCR's ratings and credit assessments are statements of JCR's current and comprehensive opinion regarding redemption possibility, etc. of financial obligations assumed by the issuers or financial products, and not statements of opinion regarding any risk other than credit risk, such as market liquidity risk or price fluctuation risk. JCR's ratings and credit assessments are statements of opinion, and not statements of fact as to credit risk decisions or recommendations regarding decisions to purchase, sell or hold any securities such as individual bonds or commercial paper. The ratings and credit assessments may be changed, suspended or withdrawn as a result of changes in or unavailability of information as well as other factors. JCR retains all rights pertaining to this document, including JCR's rating data. Any reproduction, adaptation, alteration, etc. of this document, including such rating data, is prohibited, whether or not wholly or partly, without prior consent of JCR.

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I n f o r m at i o n D i s c lo s u r e F o r m

Japan Credit Rating Agency, Ltd.

Disclosure Required by Paragraph (a)(1)(ii) of Rule 17g-7

Issuer:	Nippon Prologis REIT, Inc.
Rating Publication Date:	February 10, 2017

The Symbol, Number, or Score in the Rating Scale used to Denote Credit Rating Categories and

1 Notches and, the Identity of the Obligor or the Identity and a Description of the Security or Money Market Instrument as Required by Paragraph (a)(1)(ii)(A) of Rule 17g-7

Please see the news release.

2

The version of the procedure or methodology used to determine the credit rating; as Required by Paragraph (a)(1)(ii)(B) of Rule 17g-7

Please see the news release.

3

The Main Assumptions and Principles used in Constructing the Procedures and Methodologies used to Determine the Credit Rating as Required by Paragraph (a)(1)(ii)(C) of Rule 17g-7

The credit rating methodology assumes, in principle, to be applied to assess the likelihood of a given debt payment in light of its issuer's condition and market environment, etc. in the relevant future. There is certain limitation, however, in the time horizon that the rating foresees

The credit rating methodology assumes, in principle, that the factors posted in the below are particularly important for such likelihood to be determined, and that the rating determination is made by evaluating each of them not only quantitatively but also employing qualitative analyses.

1. Portfolios

   The likelihood of a given debt payment is highly conditional to its issuer's portfolios - how they can be maintained/ enhanced into the future and thereby secure earnings and cash flows in adequacy and in a sustainable way.

2. Financial Grounds and Asset Quality

   The likelihood of debt payment is highly dependent on the degree of the issuer's indebtedness and loss absorption capacity in terms of equity capital. Also notable is that a J-REIT might see a significant loss of financial grounds as a result of changes in value of the assets under its possession.

3. Liquidity Positions

   The likelihood of debt payment is highly dependent on the adequacy of the issuer's cash and other sources of repayment (liquidity positions) including certainty of refinancing.

4. Related Parties' Status and Stance of Support/ Assistance for the Issuer

   The likelihood of debt payment is affected one way or the other by the issuer's related parties such as sponsor, asset manager, guarantor, and the government of the issuer's business domicile, etc. - by their own conditions and/ or position of support/ assistance for the issuer.

5. Order of Seniority in Debt Payment

The likelihood of debt payment can be different between given debts of the same issuer. The likelihood of debt payment for an individual debt is dependent on the issuer's discretion, and/ or its rank relative to other debts of the same issuer in the order of seniority in principal/ interest payment which is determined by design as financial product or by laws, etc.

4 The Potential Limitations of the Credit Rating as Required by Paragraph (a)(1)(ii)(D) of Rule 17g-7 The credit rating herewith presented by JCR is its summary opinion with regard to the likelihood of given debt payment and hence not necessarily a perfect representation of such likelihood. The credit rating is not intended to estimate the probability of default or the loss on given default, either.

The objective of the credit rating herewith presented does not include any concerns other than the likelihood of debt payment, such as risks of price changes, market liquidity, etc.

The credit rating herewith presented is necessary to be reviewed along with possible changes of the issuer of rated objects in its business performance and/ or circumstances which include regulatory environment, and hence subject to possible alteration.

5

Information on the Uncertainty of the Credit Rating as Required by Paragraph (a)(1)(ii)(E) of Rule 17g-7

The information used for the determination of credit rating as herewith presented is obtained by JCR from the issuer of rated objects and other sources that JCR trusts in terms of accuracy and reliability but possibly contains errors due to human, non-human or other causes. Consequently, the credit rating determined on the grounds of such information does not constitute, explicitly or implicitly, any representation or warrant of JCR on the information itself or any consequences of its use in terms of accuracy, relevance, timeliness, wholeness, market value, or usefulness for any specific purposes.

6

Use of Due Diligence Services of a Third Party in Taking the Rating Action as Required by Paragraph (a)(1)(ii)(F) of Rule 17g-7

There is no use of any third-party due diligence service in the determination of the credit rating herewith presented.

7

Use of Servicer or Remittance Reports to Conduct Surveillance of the Credit Rating Required by Paragraph (a)(1)(ii)(G) of Rule 17g-7

There is no use of any servicer or remittance report to conduct surveillance of the credit rating herewith presented.

8

The Types of Data Relied Upon for the Purpose of Determining the Credit Rating as Required by Paragraph (a)(1)(ii)(H) of Rule17g-7