Daiwa House REIT

TSE code : 8984

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Environmental Initiatives

Sustainability Target

The Asset Manager considers efforts such as energy conservation and reducing greenhouse gas emissions in relation to asset management to be serious environmental issues. As such, it establishes individual policies and strives to reduce the burden it puts on the environment.
Furthermore, we have established the following reduction target (medium to long term) for energy consumption.

For individual properties, reduce energy consumption and CO2 emission intensity by 10% in the ten years from 2018 to 2027
Indicator Annual target Long-term target
(over the ten-year period from 2018 to 2027)
Energy consumption 1% reduction of intensity 10% reduction of intensity
GHG emissions 1% reduction of CO2 emission intensity 10% reduction of CO2 emission intensity
Water consumption Reduction of consumption rate to the consumption intensity of fiscal year ended March 2018 (base year) or less
Waste management Improvement of recycling rate to the rate of fiscal year ended March 2018 (base year) or higher
(Note) Targeted at properties designated by the Asset Manager’s Sustainability Committee or its secretariat.
Learn more about the Sustainability Committee.

■Long-term Environmental Vision of “Challenge ZERO 2055”

Looking ahead to 2055, which marks the 100th anniversary of the foundation of Daiwa House Industry Co., Ltd. (hereinafter referred to as “Daiwa House”), the Daiwa House Group formulated a long-term environmental vision of “Challenge ZERO 2055” in fiscal year ended March 2017. The Daiwa House Group aims to realize a sustainable society in accord with its Group Management Vision of being a Group that co-creates value for individuals, communities and lifestyles. It will challenge to reduce its environmental impact to zero with respect to four environmental priority themes (mitigation of and adaptation to climate change, harmony with the natural environment, conservation of water and other natural resources, and prevention of chemical pollution) through the three stages of procurement, business activities, and products/services.

Learn more about Daiwa House Group’s long-term environmental vision “Challenge ZERO 2055”

■Establishment of EMS Operation Manual

In managing DHR’s properties, the Asset Manager continuously endeavors to reduce environmental burden by setting environmental targets related to energy consumption, GHG emissions, water consumption and waste, obtaining results, analyzing the results against targets and implementing corrective measures and improvements through an PDCA (plan-do-check-act) cycle in accord with an EMS Operation Manual that provides detailed instructions on implementing policies on objectives such as saving energy, reducing GHG emissions, conserving water and managing waste.
In operating the environmental management system, the Asset Manager complies with applicable environmental laws and regulations and other environmental requirements.

■Violations of environmental laws and regulations and environmental accidents

There were not any significant violations of environmental laws and regulations or significant environmental accidents at DHR-owned properties that would affect stakeholders in FY ended Mar. 2020.

Environmental Performance

Energy consumption

FY ended Mar. 2018
(base year)
FY ended Mar. 2019 FY ended Mar. 2020 FY ended Mar. 2021
Number of properties 143 152 190 202
Total consumption (MWh) 76,440 83,491 190,299 204,817
Consumption intensity (MWh/㎡) 0.1253 0.0959 0.0929 0.0841
Reduction rate of intensity (%) - -23.5% -25.9% -32.9%

GHG emissions

FY ended Mar. 2018
(base year)
FY ended Mar. 2019 FY ended Mar. 2020 FY ended Mar. 2021
Number of properties 143 152 190 202
Total emissions (t-CO2) 34,336 38,449 84,808 91,873
Emission intensity (t-CO2/㎡) 0.0556 0.0441 0.0414 0.0377
Reduction rate of intensity (%) - -20.6% -25.6% -32.1%

Water consumption

FY ended Mar. 2018
(base year)
FY ended Mar. 2019 FY ended Mar. 2020 FY ended Mar. 2021
Number of properties 142 150 190 200
Total consumption (㎥) 391,637 666,764 900,955 840,857
Consumption intensity(㎥/㎡) 0.8205 0.8438 0.4296 0.3438
Reduction rate of intensity (%) - 2.8% -47.6% -58.1%

Waste management (recycling rate)

FY ended Mar. 2018
(base year)
FY ended Mar. 2019 FY ended Mar. 2020 FY ended Mar. 2021
Number of properties 6 10 41 56
Total amount (t) 1,202 3,398 12,990 12,836
Recycling rate (%) 54.2% 68.4% 77.0% 68.4%

(Notes)

1. Aggregation period
The aggregation period is from every April to the following March. Results are updated annually in principle.
2. Calculation method
Calculated using only DHR’s properties for which the requisite data are available.
Energy consumption intensity and GHG emission intensity are calculated by dividing total electricity usage and CO2 emissions by intensity denominator (gross floor area (m2)).

Climate Change

■Sustainability Policy

In recent years, unusual weather events, thought to be caused by global warming, are occurring globally and in all regions of Japan. Believing that initiatives to reduce greenhouse gas emissions are important measures to mitigate this effect, we are promoting initiatives to reduce the impact on climate change from the asset management of DHR’s properties.

■Governance

≫Discussion and guidance on strategy, discussion and guidance on major action plans, discussion and guidance on annual budget, discussion and guidance on business plan, and monitoring of results

The Sustainability Committee is attended by the President and CEO of the Asset Manager. At the committee, a review is conducted on strategies for sustainability, including the response for climate related issues. An annual business plan is formulated based on those strategies, and an action plan for its implementation is considered. In addition, the committee confirms the progress status relating to the plan’s implementation, including its budget, and reflects those findings in the proposal for the next year’s strategy.

≫Monitoring of major capital expenditures, acquisition and sales

This is formulated based on the content of the climate related issues discussed at the Sustainability Committee.

≫Discussion and guidance on risk management policies

The Compliance Committee is attended by the President and CEO of the Asset Manager. At the committee, policies are decided and results are assessed.

≫Setting performance targets

The Board of Directors, which is attended by the President and CEO of the Asset Manager, sets performance targets and assesses the results. By incorporating the climate related issues into “strategy,” “major action plans,” “risk management policy,” “annual budget,” “business plan,” etc., the monitoring of the issue of climate change conducted at the Board of Directors of the Asset Manager and the Board of Directors of DHR is functioning effectively. For example, it is monitored whether the targets such as reduction of GHG emissions are proceeding according to plan. Discussion and guidance on plans and policies, etc. are reported monthly at the Board of Directors of the Asset Manager and the Board of Directors of DHR as activity reports relating to sustainability, including the issue of climate change.

■Strategy

In addition to many environmental risks concerning not only climate change but also resource and water security, environmental pollution, etc., DHR and the Asset Manager directly face other risks such as competition related risk, real estate related risk, and business diversification related risk. While recognizing climate change risk as a risk that could pose one of the biggest impacts in the medium to long term, we also identify such risks as areas of potential, and incorporates them in our overall risk management process.

■Property Assessments Based on Hazard Maps

At the beginning of each period, DHR assesses portfolio properties held as of the end of the previous period, taking into account a matrix analysis based on stability and profitability.
In these property assessments, the disaster risk is converted into a score utilizing a hazard map as the climate change risk.

■Countermeasures Against Large-scale Flooding

≫DPL Nagareyama I

DHR has entered into an “Agreement on Use as Temporary Evacuation Facility in Event of Disaster” with Nagareyama City, Chiba. This agreement allows the city to use DHR property DPL Nagareyama I as a temporary evacuation facility for nearby residents and others in the event of large-scale flooding or other disaster.
The purpose of this agreement is to ensure safety in the event that the Edogawa River, which runs through the city, overflows due to torrential rains, etc., by temporarily taking in nearby residents and employees of companies in the Nagareyama Industrial Park until an evacuation center can be opened.
The latest BCP measures have been implemented at DPL Nagareyama I, including a seismic isolation structure and back-up power supply. The on-premises parking lot, vehicle passageways on each floor (total floor area of 3,000 m2 per floor), the cafeteria, and daycare center can serve as temporary shelters for up to 1,200 people in the event of a disaster, and it also keeps emergency supplies for 500 people.
In addition, there are ramps for accessing the vehicle passageways on each floor, and these can be used by evacuees arriving by car to get to the top floors while remaining in their cars. This allows quick evacuation, and with evacuees remaining in their cars, it can prevent the spread of COVID-19.

■Greening and Countermeasures Against Heat Island Effect

DHR carries out efforts such as those below out of consideration for climate change at its properties.

  • Large-scale green area
  • Rooftop greening
  • Exterior greening/
    water-permeable paving

Environment-friendly Initiatives

■Installation of solar power generation systems



Number of Properties Power generated in FY ended Mar. 2020 Power generated in FY ended Mar. 2021
Solar power generation equipment installations 14 properties 16,419 MWh 16,319 MWh
(Note) Amount of power generated is calculated only for properties with solar power generation equipment for which the requisite data are available.

■Use of electricity from biomass power generation

Electricity generated using environmentally friendly biomass power generation is used to satisfy some power demand at DHR’s properties.
(Equivalent to 200 MWh of the power consumed from April 1, 2020 to March 31, 2021 at D Project Kuki I, Royal Parks SEASIR, Royal Parks Umejima, Super Hotel JR Nara Station Sanjo Street, and Nursery Room Berry Bear Omori Nishi Welcia Ota Omori Nishi Store.)

■Promotion of LED Lighting

DHR is promoting conversion to LED lighting at its properties, in an effort to reduce energy consumption.

≫Example of conversion to LED lighting

■Energy Saving Measures

DHR is taking the following measures at its properties in consideration of the environment.

  • Conversion to LED lighting
  • Slope to upper floor
  • Large-scale window space
    allowing the use of natural light

■Effective use of water resources

After the acquisition by DHR, construction work was carried out to change the water used at the large-scale commercial complex, “ACROSSMALL Shinkamagaya,” from being supplied by a public water system to ground water due to the surrounding foundation being stable as well as the water being plentiful and of good quality.

  • ACROSSMALL Shinkamagaya
    ACROSSMALL Shinkamagaya

■Pollution Prevention

Before adding any property to its portfolio, DHR shall conduct detailed environmental due diligence on the matters listed below. During the due diligence process, DHR comprehensively assesses the property’s investment value, weighing its impact on DHR’s overall portfolio, contribution to expected increase in value and other relevant considerations while consulting a fair real-estate appraisal by a third party with sufficient skill and experience in due diligence studies.
a.Soil and ground conditions, buried objects, soil contamination, etc.
b.Status with respect to hazardous substances (asbestos, PCBs, etc.)

■Specific Initiatives for Renovation

≫Efforts to increase attractiveness

Built in 1968, “Castalia Toritsudaigaku” is located in a popular residential area. Both the interior and exterior had become somewhat dilapidated, and its earthquake performance was designed according to the old standards. Most of the rooms were Japanese-style rooms as well, so they did not necessarily meet the needs of the tenants. Accordingly, in 2005, the floor plans were modified using the refinement method. Seismic retrofitting work was performed while leaving the existing frame in place, and the piping and housing equipment were completely replaced, making them more convenient and easy to use. With a bold and daring external design, the building was reborn as a rental property suited to modern lifestyles.
“Castalia Meguro Takaban” is located in a residential area with a quiet living environment. Built in 1969, the building is quite old, but renovations and seismic retrofitting work were performed in 2007. It has been fully updated, including the exterior walls, common areas, equipment in each room, and more. It has all the expected equipment and is well maintained. In addition, the fashionably designed exterior, interior equipment, and floor plans are on par with nearby competing properties that are relatively newer, so it has a standard level of competitiveness within its market area. In 2008, the property received the GOOD DESIGN AWARD.

■Introduction of Green Leases

Aiming to improve the environmental performance of properties through a collaborative effort with tenants, DHR is promoting green leases.

In a green lease agreement, the building owner and the tenants jointly cooperate by proactively entering into agreements and memorandums of understanding regarding the reduction of the environmental burden of the property, such as through energy savings, and improvement of the workplace environment, and by putting the details of these undertakings into practice.

Number of properties Agreement conclusion percentage
Green lease agreements 201 properties 87.2%

(Notes)

1. The information shown is based on the status of agreements as of October 1, 2021.
2. Agreement conclusion percentage = Total floor area of properties for which a green lease agreement has been concluded/Total floor area of the entire portfolio (excluding land properties)
3. Total floor area is based on the floor area provided on the inspection certificate of each property.
4. The agreement conclusion percentage is rounded to the first decimal place.

■Environmental Certification Initiatives in Properties Developed by Sponsor

In the fiscal year ended March 2021, Daiwa House, the sponsor, began promoting efforts to increase the percentage of its in-house developed properties with Green Building certification to 50% or higher in order to reduce their environmental impact. Progress is checked quarterly to improve these efforts. In particular, Daiwa House is enhancing its environmental efforts at large-scale properties by acquiring BELS and other certifications, primarily for logistics facilities that account for a large percentage of in-house developed properties.

■Management of multi-use properties

Capitalizing on its status as a diversified REIT, DHR also owns multi-use properties. DHR believes multi-use properties help to reduce environmental burden and contribute to revitalizing neighborhoods and communities through such means as reducing travel distances between workplaces, shopping and other popular destinations.

  • Naha Shin-Toshin Center Building
    (Daiwa Roynet Hotel Naha-Omoromachi)
    (Office/Hotel/Retail)

    Naha Shin-Toshin Center Building 
(Daiwa Roynet Hotel Naha-Omoromachi)
(Office/Hotel/Retail)
  • Qiz Ebisu
    (Residential/Retail)

    Qiz Ebisu
(Residential/Retail)

■Acquisition of environment-friendly properties

The large-scale commercial complex “iias Tsukuba” was selected as an exceptional example in the “Commercial Facilities and Accommodations Category” of the “Energy-Efficient Lighting Design Awards 2012,” sponsored by the Ministry of the Environment, due to the work they underwent to change to LED lighting after opening in October 2008.

  • Interior walkways lit by LED lighting
    Interior walkways lit by LED lighting

≫Reducing energy and maintenance with full-scale introduction of LED lighting

Switching to LED lighting for everything from the hallways and indoor parking lot to outdoor signs, work areas other than the sales floor, and the restrooms reduced power consumption by around 68% compared to the old fluorescent lighting. Compared to fluorescent and incandescent lighting, LED lighting gives off less heat, helping to suppress rising room temperatures, which also contributes to saving energy on air conditioning.
Furthermore, consideration is also given to the maintenance aspect by using the suitable LED lights in each place, such as adopting long-lasting kinds of LED lights in outdoor signs installed on the top of the buildings where changing lights is difficult.

≫Lighting design conscious of the brightness of the space

Warm white lights are used for indoor lighting to produce a warm and relaxed atmosphere. Furthermore, our lighting design realizes energy conservation while ensuring brightness and safety by reconsidering illuminance levels for interior walkways and giving consideration to light leakage from shops and shop sign illumination.
These lighting designs create pleasant shopping spaces while making each shop’s display stand out. As a result, they provide a high level of satisfaction not only for customers but also for each shop.

About the “Energy-Efficient Lighting Design Awards”
Sponsored by the Ministry of the Environment, this award aims to spread “new energy-efficient lighting designs” that create attractive spaces while achieving excellent energy saving results, and to contribute to limiting peak demand of power consumption. The evaluation covers: (1) the results of installing energy saving lighting; (2) design, innovation, creativity, and comfort; (3) reproducibility, ability to contribute to the region, and autonomy as a model and (4) practicality, economic efficiency, etc. Furthermore, installation of solar power generation facilities and wall greening took place at this property. Going forward, DHR is promoting acquisition of environment-friendly properties.

  • Solar power generation facilities
    Solar power generation facilities
  • Wall greening
    Wall greening

■Reduction of Truck Waiting Times With Introduction of Truck Berth Reservation System

Daiwa House, the sponsor, was the first* in the logistics developer industry to introduce an online system for truck drivers and transportation companies to reserve truck berths at all its logistics facilities. This made it easier for tenant companies in the logistics facilities developed by Daiwa House to make plans for in-facility work and movement of goods, improved the operational efficiency of the facilities, and reduced the environmental impact by shortening truck waiting times. We provide new services to our tenant shippers at our logistics facilities that incorporate the state-of-the-art technology.

* Daiwa House survey

■Environment-friendly Construction Work

At the large-scale residential property, “Royal Parks Hanakoganei,” DHR replaced the underutilized mechanical parking lot with a flat parking lot capable of accommodating electric vehicles. In addition to reducing maintenance costs, this also reduced energy consumption, including the electricity used by the mechanical parking system when loading and unloading vehicles and the gasoline used by idling vehicles. Moreover, the installation of charging stands for electric vehicles, the future spread of which is expected, contributes to convenience for tenants.

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