Daiwa House Asset Management Co., Ltd. (hereinafter referred to as the “Asset Manager”) is dedicated to investing in and managing real estate and other assets across a broad range of sectors that meet social needs in pursuit of sustained unitholder-value accretion through stable revenue and steady growth of assets over the medium to long term. The Daiwa House Group’s basic approach is “Creating Dreams, Building Hearts.” As a group that co-creates value for individuals, communities and people’s lifestyles, the Daiwa House Group aims to build trust relationships with stakeholders and contribute to society through its business, and to realize a sustainable society by meeting the challenge of achieving “zero environmental impacts.”
The Asset Manager shares the Daiwa House Group’s basic approach and considers that including consideration for environment, society, and governance (hereinafter referred to as “ESG”) in its real estate investment management operations and advisory services contributes to ensuring stable revenue and steady growth of assets over the medium to long term.
Therefore, we have established the following “Sustainability Policy” to guide our real estate investment management.

• Sustainability training is provided in order for employees to understand the impact of their business activities on the environment.
• Training and engagements are conducted to raise the awareness of internal and external stakeholders on environmental management policies and environmental impacts.

■Initiative Support and Participation Policy

The Asset Manager shares the Daiwa House Group’s basic approach of “Creating Dreams, Building Hearts.” To attain a sustainable society, it is essential that we include environmental, social, and governance (“ESG”) considerations in real estate investment management operations. We also believe that this will contribute to DHR’s basic policy of ensuring stable revenue and achieving steady asset growth over the medium to long term. As such, DHR has been applying the above matters to its real estate investment management business.
The Asset Manager believes climate change, human rights, diversity, equity, and inclusion, and biodiversity are particularly important social issues to address. By joining the initiatives related to the above, we will continue to actively work on solving social issues.

■Signing on to Principles for Responsible Investment (PRI)

The “Principles for Responsible Investment (PRI)” is a network of internal investors endorsed by the United Nations Environment Programme Finance Initiative (UNEP FI) and the United National Global Compact (UN Global Compact). The investors who are signatories to the PRI declare to include ESG issues into investment decisions, and while helping the beneficiaries enhance long-term investment performance and fulfilling their fiduciary duty as responsible investors over the long term, they aim to create an abundant world for all stakeholders.

The Six Principles for Responsible Investment

1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.

The Asset Manager agreed with the basic approach of the PRI and became a signatory.

The Asset Manager submitted PRI annual report in August 2025, and the following results were obtained for the 2025 annual assessment.

■Participation in the Japan Climate Initiative (JCI)

The Japan Climate Initiative (“JCI”) is a network of Japanese companies, local governments, and NGOs that are actively working to prevent climate change, established in response to the 2015 Paris Agreement, aiming independently to realize a decarbonized society. JCI has created a nationwide movement in Japan to achieve a decarbonized society by supporting the activities of participating members, working on the governments, and partnering with the international society.
The Asset Manager joined the JCI as we agreed with this mission to realize a decarbonized society and joined the JCI after satisfying the participation requirements.

■Signatory of the United Nations Global Compact (UNGC) and Joining the Global Compact Network Japan (GCNJ)

The United Nations Global Compact (“UNGC”) is the world’s largest sustainability initiative for bringing together the United Nations and private organizations (companies/associations) and building a sound global society. UNGC is an independent initiative for companies and associations to act as a good standing member of society and achieve sustainable growth by exercising responsible and creative leadership.
Companies and associations who are signatories to the UNGC are making ongoing efforts to realize the ten principles related to the protection of human rights, elimination of all forms of unfair labor, response to the environment, and the prevention of corruption based on a commitment from top management at each supporting company.
Local UNGC networks in each country around the world act as a platform aiming to foster sustainable development. The Global Compact Network Japan (“GCNJ”) was launched in Japan in December 2003 as a local Japan network.
The GCNJ supports member companies and associations in Japan to take independent and strategic action toward the UNGC’s Ten Principles and engages in activities to realize a sustainable society, such as holding seminars and subcommittees made up primarily of member companies.
The Asset Manager agrees with the UNGC’s Ten Principles and has become a signatory. Furthermore, it has joined the GCNJ to take active action.

The Ten Principles of the United Nations Global Compact

■Joining the World Wide Fund for Nature (WWF) Japan

World Wide Fund for Nature (“WWF”) was established in Switzerland in 1961 and is an environmental conservation organization active in over 100 countries. With the goal of people living in harmony with nature, the WWF is propelling efforts to realize a sustainable society. The organization promotes the conversation of endangered wild life in addition to sustainable production and consumption as a means to restore the richness of biodiversity, which is rapidly being lost, and to achieve a decarbonized society that prevents global warming.
World Wide Fund for Nature Japan (“WWF Japan”) was established in Tokyo as the 16th WWF organization in the world in 1971. The WWF Japan mainly engages in (1) activities, survey research, policy proposals, and the dissemination of ideas on environmental conservation to conserve biodiversity and reduce the environmental impact of humanity on the natural environment, (2) cooperation with the World Wide Fund for Nature Secretariat (WWF International) and coordination with other relevant organizations, and (3) other projects necessary to achieve its objectives.
The Asset Manager agrees with the significance of the activities of WWF Japan and supports WWF’s environmental conservation efforts as a corporate member.

■Eco Action 21 Certification and Registration

EcoAction 21 is a third-party evaluation program to certify and register organizations which implement appropriate environmental initiatives, establish, operate, and maintain an environmental management system, and promote environmental communication in accordance with the EcoAction 21 Guidelines ^(Note) formulated by the Ministry of Environment.
The Asset Manager underwent a subsequent review and received certification and registration.

• These guidelines formulated by the Ministry of the Environment define 14 action items (requirements) based on a PDCA cycle consisting of three factors: “environmental management system,” “environmental performance evaluation,” and “environmental reporting.”

■Joining the 30 by 30 Alliance for Biodiversity

30 by 30 is an initiative to halt the loss of biodiversity and put it on a recovery track (nature positive) by 2030. The goal is to effectively conserve at least 30% of land and sea as healthy ecosystems by 2030. In April 2022, a coalition of volunteers formed to promote efforts to achieve this goal. The coalition is known as the 30 by 30 Alliance for Biodiversity (hereinafter referred to as the “Alliance”). As a specific action to achieve 30 by 30, the Asset Manager will provide assistance in managing protected areas and areas registered (or expected to be registered) in the global database of OECMs.^(Note)
The Asset Manager agrees with the significance of the activities of the Alliance, and became the first asset manager of a J-REIT to join.

• Other Effective area-based Conservation Measures (OECMs): Areas outside of national parks and other protected areas in which biodiversity can be conserved effectively and over the long term.

■Environmental Performance

Energy consumption

GHG emissions (Scope 2)

• Aggregation period
  The aggregation period is from every April to the following March. Results are updated annually in principle.
• Calculation method
  Calculated based on electricity usage consumed by the Asset Manager in its office.
  Energy consumption intensity and GHG emissions intensity are calculated by dividing total electricity usage and CO₂ emissions
  by intensity denominator (gross sales (million yen)).
• The Asset Manager procured 80,210 kWh FIT non-fossil certificates through the Daiwa House Group, and achieved zero greenhouse gas (GHG) emissions (Scope 2). (Fiscal year ended March 2024)
• Renewable-energy derived CO₂-free electricity was introduced in the building where the Asset Manager is located from April 2024, and zero greenhouse gas (GHG) emissions (Scope 2) have been achieved (Fiscal year ended March 2026).

■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 the Asset Manager’s properties that would affect stakeholders.
There were also no environment-related fines or penalties. (Fiscal year ended March 2026)

■Diversity, equity, and inclusion

For the Daiwa House Group to grow into a corporate capable of contributing to the world, it is important to respond flexibly to diverse values and ongoing changes in society, and to create new value to allow us to discover potential markets. Toward that end, we must foster a workplace climate that makes it possible to capitalize on the perspectives and creativity stemming from employees’ diverse values, gender, age, ethnicity, language, culture, disabilities, lifestyles, and other attributes in order to form organizations that generate new ideas without being held back by outdated notions and preconceptions.
We are making efforts to promote active participation by women and otherwise strengthen diversity-based management and to build an organization that enables flexible work styles so that a broader range of human resources can flourish in the future.

KPI

■eNPS Surveys and Satisfaction Assessments

We believe that the growth of the Asset Manager’s employees directly contributes to the growth of DHR. To enhance employee satisfaction, we continuously conduct eNPS surveys and satisfaction assessments through third-party organizations. These surveys target all officers and employees, including fixed-term employees, temporary employees, and part-time employees.
Our score for the fiscal year ended March 2026 was -22. We provide feedback on the survey results to all officers and employees and incorporate the findings into future improvements, working toward the creation of an even better workplace environment.
In addition, the compensation of the Asset Manager’s Directors for FY2025 included performance-based compensation linked to the eNPS score with the aim of achieving sustainable growth in corporate value.

• The Employee Net Promoter Score is an index for visualizing the loyalty of employees.
  This index evaluates eleven levels of employee loyalty through the survey question asking, “How likely are you to recommend your company to your relatives, friends, or other acquaintances who want to find or change jobs within the same industry as your company?”
  The eNPS score classifies employees who gave a score of 9-10 as “Promoters,” those who gave a score of 7-8 as “Passives,” and those who gave a score of 0-6 as “Detractors.” The eNPS score is calculated by subtracting the percentage of Detractors from the percentage of Promoters among all respondents. The more “Promoters” there are, the higher the score will be.

■Labor Standards

The Asset Manager has not yet organized a labor union but does recognize the constitutional right of every employee to have “freedom of association.” The Asset Manager has also signed and made a commitment to adhering to the United Nations Global Compact, one of whose principles is “the freedom of association and the effective recognition of the right to collective bargaining.”
Labor-management relations at the Asset Manager have been harmonious, and there have been no large-scale mergers, acquisitions, or layoffs in the past three years.
In addition, the Asset Manager has entered into a labor-management agreement on overtime work (36 Agreement) with its employees, and striven to maintain the health of its employees by appropriately managing working hours.

■Obtained Universal Manners certification

As part of its human rights training program, the Asset Manager participated in the Universal Manners certification training organized by the Japan Universal Manners Association. The goal of this training was to deepen understanding of diverse groups of people, including those with disabilities; to gain insight into the perspectives of others who are different from oneself; and to foster a sense of personal connection so that employees can act with consideration. All officers and employees^* received Level 3 Universal Manners certificate. Officers and employees who participated in the training shared comments such as, “As someone who works in real estate, I realized I hadn’t been considering the perspective of people with disabilities during emergencies,” and “I want to apply what I’ve learned not only at work but also in my daily life.”

• Officers and employees as of December 2025

■Overwork

The Asset Manager conducts mandatory health examinations through industrial physicians for anyone who works more than 80 hours of overtime per month.

■Labor-Related Violations and Accidents

There were no significant labor-related violations or accidents involving the Asset Manager’s officers and employees that would influence stakeholders. (Fiscal year ended March 2026)

■Establishment of Health Committee

The Asset Manager has established a Health Committee that meets monthly to exchange opinions on the workplace environment and learn about health with the industrial physician in order to prevent health problems among officers and employees and maintain and promote their health.
In addition, stress checks are conducted once a year for the purpose of preventing mental disorders.

■Personnel Data

• Headcounts are as of April 1 of each fiscal year.
• Senior manager and above.
• Turnover is the ratio of job leavers to total personnel as of April 1 of each fiscal year.
• Occupational accident frequency rate = (occupational injuries/fatalities total actual hours worked) x 1,000,000
• The year a child is born and the year parental leave is taken do not necessarily coincide, which may result in a percentage exceeding 100%.

■Payment of Wages Above Minimum Wage and Equal Pay for Equal Work

The Asset Manager pays wages that are above the minimum wage set by laws and regulations and allow for a higher standard of living by taking into account the commodity prices. Our compensation system also maintains equal pay for equal work and ensures no wage gap between genders. Compensation is based on an evaluationlinked pay system by post classification, and appropriate assessments of performance are conducted by verifying the fairness and validity of the primary and final evaluations during the personnel appraisal process. Bonuses are paid twice a year in the summer and the winter, and the amount is determined according to work performance. In 2025, the average annual salary per employee at the Asset Manager was ¥11,397 thousand^{(Note 1)}, and the ratio of female to male compensation was 74.7%^{(Note 2)}.

• Average for full-time employees not including officers, fixed-term employees, or employees on external assignment (incoming).
• Calculation method: Average salary of female employees divided by average salary of male employees. Individuals who have been employed for less than 12 months, including midcareer hires, retirees, and those on maternity/childcare leave, are included, with adjustments made to account for the number of personnel based on their period of employment.

■Introduction of Cumulative Investment Unit Investment Program

In December 2013, the Asset Manager introduced a cumulative investment unit investment program in the aim of increasing the price of DHR investment units and further improving growth of DHR and medium- to long-term investor value by having officers and employees of the Asset Manager pay close attention to investment unit prices of DHR and raising their awareness of performance.

■Introduction of Investment Unit Ownership Program

In November 2019, the Asset Manager introduced an investment unit ownership program of DHR for its officers and employees in response to the Japan Securities Dealers Association’s issuance of guidelines on investment unit ownership programs in May 2018.

• Daiwa House introduced an investment unit ownership program of DHR for its officers in November 2018 and expanded it to employees in June 2020. Daiwa House Realty Mgt. and Daiwa Roynet Hotels introduced a investment unit ownership program of DHR for their employees in November 2025.

■Internal Reporting System and Whistleblower Protections

The Asset Manager has established whistleblower liaisons internally and externally and set up a process to appropriately handle consultations with or reports from whistleblowers on organizational or personal conduct that poses (or may pose) compliance issues, including violations of laws/regulations and ethically problematic conduct, in accord with the Whistleblower Protection Act and the Cabinet Office’s Whistleblower Protection Act guidelines for private businesses.
Additionally, whistleblowers are protected from prejudicial treatment in any form.

■Problems Related to Bribery and Corruption

There were no serious problems related to bribery or corruption involving the Asset Manager’s officers and employees that would influence stakeholders. (Fiscal year ended March 2026)

■Information Security-Related Problems

There were no serious problems related to information security at the Asset Manager that would influence stakeholders. (Fiscal year ended March 2026)

The number of incident reports related to information security submitted to regulatory authorities.

■Policy on and Approach to Human Resources Development

As stated in its Company Philosophy (Corporate Creed), the Daiwa House Group aims to “develop people through business.” We believe that human resources are the Group’s greatest assets.
To take advantage of the abilities and unique talents of our employees and develop human resources capable of contributing to society, we implement various training and programs that combine on-the-job and off-the-job training.
Learn more about Daiwa House Group’s human approach and policies regarding human resources development

■Target Management and Performance Evaluation Program

The Asset Manager has introduced and implemented a target management and performance evaluation program semiannually to (1) foster communication between superiors and subordinates, (2) strengthen human resource development, (3) increase motivation with respect to roles and results (performance), and (4) clarify evaluation criteria and gain better understanding of evaluations.
Employee performance evaluations are determined by evaluation of performance benchmarked against individualized targets, evaluation of skills/conduct and a compliance evaluation. The issues for improvement are shared through the performance review and follow-up interviews.
In addition, starting in the fiscal year ending March 2027, “obtaining the Environmental Specialist Certification (Eco Test)” has been established as a recommended requirement for promotion evaluations at the Asset Manager.

■Support for Operational Skills Development and Training

The Asset Manager has established a system for providing funding for the registration and renewal of professional qualifications and a system for providing congratulatory payments for acquiring professional qualifications to encourage the acquisition of knowledge, qualifications, and licenses. The purpose is to increase the motivation of all employees (including fixed-term employees, temporary employees, and part-time employees) with respect to self-development, improve their abilities and talents, continuously and steadily secure human resources with the specialized skills necessary to contribute to the achievement of business objectives, and assess the environmental friendliness of DHR’s properties.

Number of the Asset Manager’s employees with qualifications (Total of 85 officers and employees as of March 31, 2026)

• Includes personnel who have passed the credentialing exam but are not yet credentialed.

KPIs and Main Initiatives

■Training System and Schedule

The Asset Manager conducts training for all officers and employees, as well as by title and post (including contract employees, temporary employees, and part-time employees), to develop the problem-solving skills of each individual and to improve their knowledge of business operations, human rights, harassment, and information security. The training system and annual schedule for the fiscal year ended 2026 were as follows.

■New Employee Training Program

To help new employees acquire operational knowledge as quickly as possible, the Asset Manager provides training on the following topics:
●Explanation of the operations of each department ●Compliance ●Insider trading regulations ●Human rights ●System-related risks ●Email use ●Etiquette ●Disaster prevention/crisis management ●CSR ●Basic knowledge related to buildings ●Basic knowledge related to J-REIT, etc.

■Training on Operational Expertise

The Asset Manager provides training on the topics below to officers and employees (including temporary employees and part-time employees), by also utilizing training by external experts.

Training Hours and Expenses for Officers and Employees

■Human Resources Dispatched from Sponsor

The Asset Manager has received from the sponsor human resources with a wealth of experience in areas such as real estate sales transactions, leasing, property management, finance and IT system operations. Learn more about Daiwa House Group’s human resource development philosophy and policies

■Business Continuity Plan (BCP)

The Asset Manager establishes the necessary items for its disaster prevention and crisis management in relation to risks specified separately for natural disasters such as large-scale earthquakes, accidents, crimes, and other material facts. It has established an “Emergency Response Manual” in order to prevent and avoid risk, ensure people’s safety and reduce/mitigate damage in the event of a disaster, prevent secondary accidents, resume DHR’s asset management operations at an early point, and fulfill its corporate social responsibility. Furthermore, to ensure continuity of payment and disclosure operations from the standpoint of the business continuity requirements to which financial instrument business operators are subject, the Asset Manager plans to operate in accordance with a BCP Execution Plan it has formulated.
The Asset Manager has stockpiled supplies, including three days of emergency meals and drinking water for officers and employees at its office, warehouse for general affairs and elsewhere.

■Support for Community Activities

The Asset Manager supports community co-creation activities, partly through “Community Co-Creation Leave Program” it has established to facilitate employees’ participation in activities that contribute to society, training for such activities and other such endeavors. Community co-creation activities supported by the Asset Manager include (1) preservation of the natural environment (litter pickup activities, recycling movements), (2) education and youth development (school visits, experiential learning programs, athletic coaching), (3) social welfare (elder/juvenile/disabled welfare), (4) international cooperation (overseas volunteering, foreign language interpreting, etc.), (5) volunteer training and required credentialing programs (classes in invalid care skills, sign language), (6) community outreach (neighborhood association events) and (7) disaster relief activities. The Asset Manager has been participating in volunteering for the operation of a children’s cafeteria held at a DHR property.

Learn more about Daiwa House Group’s track record of community co-creation activities

■Violations/Accidents by Officers and Employees

There were no significant violations committed by or accidents involving the Asset Manager’s officers and employees that would influence stakeholders. (Fiscal year ended March 2026)

■Community-Related Violations and Accidents

There were neither significant community-related violations nor accidents at the Asset Manager’s properties that would affect stakeholders. (Fiscal year ended March 2026)

■Supplier-Related Violations and Accidents

There were neither significant supplier-related violations nor accidents at the Asset Manager’s properties that would affect stakeholders. (Fiscal year ended March 2026)