United Urban Investment : Notice Concerning Filing of Amendment to Shelf Registration Statement for Sustainability Bonds Issuance

For Translation Purposes Only

October 4, 2021

For Immediate Release

United Urban Investment Corporation

Toshiaki Emon

Executive Officer

(Securities Code: 8960)

Asset Management Company:

Japan REIT Advisors Co., Ltd.

Norimasa Gaun

President and CEO

Inquiries:

Takehide Sasaki

Chief Financial Officer

TEL: [phone]

Notice Concerning Filing of Amendment to Shelf Registration Statement

for Sustainability Bonds Issuance

United Urban Investment Corporation ("United Urban") hereby announces that today it has filed an amendment to shelf registration statement (current shelf registration statement is dated September 24, 2021) with the Director-General of the Kanto Local Finance Bureau for Series (to be decided) of Unsecured Corporate Bonds (with pari passu conditions among specified corporate bonds) (sustainability bonds) ("Sustainability Bonds") issuance as set forth below.

(Note) Sustainability Bonds are a type of bond instrument issued by investment corporations, limited companies and municipalities to be used for "green projects" which bring about clearly beneficial results for global environment and "social projects" that contribute to solving social issues (hereinafter collectively referred to as "Project"). The same applies below.

1. Overview of the Amendment to Shelf Registration Statement for the Sustainability Bonds

United Urban today submitted the amendment to shelf registration statement to the Director-General of the Kanto Local Finance Bureau to enable the Sustainability Bonds issuance. The entire amount of the proceeds from the Sustainability Bonds will be allocated (i) funds for acquisition of Eligible Green Assets or Eligible Social Assets (to be defined in "4. Eligibility criteria", the same applies below), (ii) refinancing funds for the acquisition funds, (iii) corporate bond redemption funds and (iv) decreased cash on hand due to acquisition of Eligible Green Assets or Eligible Social Assets.

2. Purpose and Background of the Issuance

In recent years, awareness of ESG (Environment, Social, and Governance) and SDGs (Sustainable Development Goals) has increased globally. United Urban understands the importance of taking actions to "make society sustainable" as one of the crucial long-term management challenges sought to real estate investment corporations to address through real estate investment management with an eye to contributing to a wide range of stakeholders as well as people, local communities and natural environment.

United Urban and Japan REIT Advisors Co., Ltd. ("JRA"), the asset management company to which United Urban entrusts its asset management services, have been taking a holistic approach to practice the asset management in consideration of ESG and pursue solid and resilient management that coexists with environment and society.

In financial management, with a focus on environmental aspect, United Urban has provided various green

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(Note 6)

financing as a part of the ESG financing. That includes the J-REIT's first green trust loan and the retail green bonds for individual investors.

Aiming to tap into and expand the ESG investors base as well as to further diversify financing methods and enhance the initiatives of ESG financing, United Urban and JRA has established a new social finance framework. United Urban will issue the Sustainability Bonds for Eligible Social Assets based on this framework and Eligible Green Assets based on the Green Finance Framework.

3. Eligibility as Sustainability Bonds

United Urban and JRA formulated the Green Finance Framework to implement green financing including the Sustainability Bonds in accordance with "Green Bond Principles, 2021" (Note 1), "Green Bond Guidelines, 2020" (Note 2) and "Green Loan Principles, 2021" (Note 3), and also set the Social Framework to implement social financing in accordance with "Social Bond Principles, 2021" (Note 4), "Social Loan Principles, 2021" (Note 5). Furthermore, United Urban and JRA formulated the Sustainability Finance Framework in accordance with

"Sustainability Bond Guidelines, 2021" and "Green Loan and Sustainability Linked Loan Guidelines,

2020" (Note 7).

As a third-party evaluation of the Sustainability Bonds, United Urban has obtained a preliminary evaluation of "SU 1", the highest evaluation of "JCR Sustainability Bond Evaluation" (Note 8), from Japan Credit Rating Agency ("JCR").

The Sustainability Bonds are investment corporation bond that will be used for the purposes described in "4. Eligibility Criteria". Specifically, United Urban plans to use the funds for: (i) redemption funds for the 15th unsecured investment corporation bonds (Note 9) issued by United Urban as repayment funds for borrowings required for the acquisition of eligible green assets, (ii) cash on hand decreased due to the acquisition of eligible social assets and (iii) funds required for development.

	Name of Eligible Green Assets		Environmental Certification		Acquisition Date
	Pacific Marks Yokohama East		CASBEE for Real Estate		April 17, 2019
		(S rank)		(reacquire the certification)
	Name of Eligible Social Assets		Social Project
	Miyanomori Nijo Development Site		Access to essential services
	(Elderly housing)		Socio-economic improvement and empowerment

(Notes)

1. "Green Bond Principles, 2021" is the guidelines for green bonds issuance formulated by the Green Bond Principles and Social Bond Executive Committee, a nongovernment organization whose secretariat is the International Capital Market Association (ICMA) and is hereinafter referred to as the "Green Bond Principles" .
2. "Green Bond Guidelines, 2020" is the guidelines drafted and announced in March 2017 and revised in March 2020 by the Ministry of the Environment aimed at further promoting green bonds in Japan by presenting examples of actual measures and indicating interpretation in conformity with Japan's characteristics while paying attention to conformity with the Green Bond Principles so that they can be referred to by those who are responsible for practical work at the market participants when considering concrete responses regarding green bonds, and is hereinafter referred to as the "Green Bond Guidelines".
3. "Green Loan Principles, 2021" was established by Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications & Trading Association as an international guideline of loans used only for environmental fields.
4. "Social Bond Principles, 2021" is the guidelines for social bonds issuance formulated by the Green Bond Principles and Social Bond Principles Executive Committee, a nongovernment organization whose secretariat is the International Capital Market Association (ICMA) and is hereinafter referred to as the "Social Bond Principles" .
5. "Social Loan Principles, 2021" was established by Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications & Trading Association as an international guideline of loans used only for social project.
6. "Sustainability Bond Guidelines, 2021" is the guidelines for sustainability bonds issuance formulated by the International Capital Market
   Association (ICMA) and is hereinafter referred to as the "Sustainability Bond Guidelines".
7. "Green Loan and Sustainability Linked Loan Guideline, 2020" is the guidelines drafted and announced in March 2020 by the Ministry of the Environment. The guideline aims to further popularize green loans in Japan while considering the consistency of green loans with the principles of green loans. The guidelines provide examples of specific responses that can be used by practitioners of borrowers, lenders and other related organizations when considering specific responses regarding green loans, as well as interpretations that are in line with the characteristics of Japan.
8. "JCR Sustainability Bond Evaluation" is a third-party evaluation by JCR of the issuance of sustainability bonds by issuers who have received the Green Bond Principles, 2021, Green Bond Guidelines, 2020, Social Bond Principles, 2021 and Sustainability Bond Guidelines, 2021. In

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this evaluation, Perform a "green social evaluation" which is evaluating whether the use of the funds raised by the sustainability bond corresponds to a sustainability project, and "management / operation / transparency evaluation" which is evaluate the management and operation system and transparency of the issuer. "JCR Sustainability Bond Evaluation" will be decided as a comprehensive evaluation of these evaluations.

9. Please refer to "Notice Concerning Issuance of Corporate Bonds" dated October 24, 2014.

4. Eligibility Criteria

United Urban will allocate the funds raised by the Sustainability Bond to: (i) assets that meet the following green qualified criteria (hereinafter referred to as "Eligible Green Assets"), (ii) assets that meet the following social qualified criteria (hereinafter referred to as "Eligible Social Assets"), (iii) funds for refinancing borrowings required for them, (iv) funds for redemption of investment corporation bonds and (v) property renovation funds aimed at beneficial improvements for environment.

(1) Eligibility Green Project Criteria

Buildings that have or will have one of the following environmental certifications valid as of the due date for payment of green bonds or sustainability bonds.

・DBJ Green Building Certification (Japan) (Note 10)	: five stars, four stars or three stars
・CASBEE Appraisal (Japan) (Note 11)	: S or A
・BELS Certification (Japan) (Note 12)	: five stars, four stars, three stars or two stars
(2) Eligibility Social Project Criteria

Primarily the entire building should be a facility that provides the benefits of social projects stipulated in the Social Bond Principles.

a. Affordable basic infrastructure equipment b. Access to essential services

c. Affordable housing

d. Programs to create jobs including funding SMEs and leveraging the potential benefits of microfinance and to prevent or mitigate unemployment due to social crises

e. Food safety

f. Socio-economic improvement and empowerment

(Notes)

1. "DBJ Green Building Certification" is for real estate that is environmentally and socially friendly (Green Building), using a comprehensive scoring model originally developed by Development Bank of Japan (DBJ). DBJ performs certification based on the evaluation rank (1 to 5 stars) of the grade.
2. "CASBEE (Comprehensive Assessment System for Built Environment Efficiency)" is a method to evaluate and rate the environmental performance of buildings (C rank to S rank). It is a system that comprehensively evaluates the environmental performance of buildings, including consideration for the landscape, in addition to the aspects of reducing environmental load such as energy saving, resource saving, and recycling performance.
3. "BELS (Building-HousingEnergy-efficiency Labeling System)" is a public evaluation system set by the Ministry of Land, Infrastructure, Transport and Tourism. It is a system that evaluates energy-saving performance on a 5-point scale (1 to 5 stars) based on the primary energy consumption of a building.

5. Project Evaluation and Selection Process

Eligible Green Assets or Eligible Social Assets are selected and evaluated by the JRA's Sustainability Committee based on the expertise. More specifically, the Committee checks the eligibility based on the JRA's asset management guidelines and the standards established in the Social Finance Framework. In addition, if there are any concerns about negative impacts on environment or society when acquiring Eligible Green Assets or Eligible Social Assets or when attracting tenants who are expected to contribute to social projects, JRA will strain to minimize such impacts by setting conditions to sellers or tenants to exercise legal compliance and other measures and avoid or mitigate them.

When procuring funds to acquire or refinance Eligible Green Assets or Eligible Social Assets, JRA's Finance Dept. requests for decision to the JRA's Board of Directors and the United Urban's Board of Directors to

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approve or resolve.

The Sustainability Committee consists of the JRA's Chief Executive Officer ("CEO"), Chief Investment Officer ("CIO"), Chief Financial Officer ("CFO"), Chief Compliance Officer ("CCO") and other heads of each department of JRA.

6. Management of Proceeds

United Urban controls the total amount of green finance so that it does not exceed the limit of green finance. United Urban also manages the total amount of social finance so that it does not exceed the social finance limit. In the event that the balance of green finance or social finance exceeds the limit, the difference will be managed separately in cash or cash equivalents.

The maximum amount of green finance and social finance shall be calculated by the following formula (all figures are as of the end of the latest fiscal period).

・Green finance limit = Book value of Eligible Green Assets x (Borrowing and investment corporation bond issuance balance ÷ Total assets)

・Social finance limit = Book value of Eligible Social Assets x (Borrowing and investment corporation bond issuance balance ÷ Total assets)

Regarding the funds raised from green financing or social financing, the JRA's Finance Dept. is responsible to handle the use of funds, due dates, balances, etc. in electronic media such as Excel files. In addition, unallocated funds will be managed in cash or cash equivalents until the entire amount of funds raised is applied to Eligible Green Assets or Eligible Social Assets.

If unallocated funds are generated, such as by selling a property for which the funds could be used, those funds will be used for acquisitions of alternative properties or for refinancing funds raised to acquire Eligible Green Assets and Eligible Social Assets. The unallocated funds will be controlled separately in cash or cash equivalents until an alternative destination is determined.

7. Reporting

(1) Reporting on funding status

The status of fund allocation will be reported at least once a year on United Urban's website if there remains a balance of green finance or social finance. United Urban announces that the total amount of funds raised, the total amount of unallocated funds and the total amount of funds raised by green financing and social financing have not exceeded the limits of amounts for green finance and social finance respectively.

(2) Reporting on environmental and social improvement effects

If green finance or social finance remains, United Urban is to disclose the following KPIs once a year on its website as much as possible in practice.

a. Reporting of environmental improvement effects

・Types and ranks of valid environmental certifications ・Electricity usage

・CO2 emissions ・Water usage

b. Reporting of social improvement effects

(Note 13)

・Building and rent overview

・Resident status / outline of facilities

(number of rooms, capacity, number of residents, occupancy rate, etc.)

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・Profit and loss status of real estate owned

(details of real estate leasing business profit and loss, NOI) ・Operator's overview

・Real estate appraisal value as of the end of the period

・When the target asset is a nursing home	: number of nursing home and setting staff
・When the target asset is a medical facility	: number of medical facilities and beds
・When the target asset is a childcare facility	: number of childcare facilities, capacity, number of
	children, and capacity sufficiency rate
・When the target asset does not correspond	: indicators that are considered important in view of the
to the above	characteristics of the target asset

Aiming for coexistence with environment and society, United Urban and JRA pursue the sustainable growth of United Urban and contribute to the realization of a sustainable society.

(3) Reporting when the situation changes

If unallocated funds are generated due to sales of Eligible Green Assets or Eligible Social Assets that are subject to the use of sustainability finance funds, United Urban will disclose them on the United Urban's website after obtaining an approval of JRA's management including CEO, CFO, CIO, CCO.

(Notes)

13. It will not be disclosed if there are circumstances where an approval of facility's operator could not be obtained, etc.

8. Others

Further details including the terms of issuance will be announced once they are determined.

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