Sustainability Policies -Our commitment to a diverse society-
We contribute to the diversity of society while taking into account the social impact of our properties. We are committed to maintaining safety, confidence, good health, comfort and diversity regarding our tenants and the communities where we operate.
Providing Properties with Environmental and Social Considerations
Basic views
Providing properties with environmental and social considerations is one of our material issues. Through our investments in many types of properties, we are making a contribution to lowering the overall environmental impact of society, providing greater convenience and achieving other forms of progress.
Investments in various types of properties through REITs
The two REITs where Kenedix is the main sponsor provide investment management in a diverse range of targeted sectors. The operations of each one reflects the characteristics of its respective market sector, resulting in highly transparent asset management.
REITs are based on the premise that real estate will be owned and operated for a long-term. Therefore, investment and property management activities take into account environmental and social issues. Adopting this stance enables these REITs to help invigorate communities, provide greater convenience, supply pleasant and productive workplaces, and create safe and secure places to live.
Investments in flexible / mixed use properties
Kenedix invests in large, multi-purpose properties through funds and other schemes. KDX Realty Investment Corporation and Kenedix Private Investment Corporation also invest in large, multi-purpose properties such as “office buildings and residential properties designed to meet the needs of retail tenants on lower floors,” ”properties with multi-uses, such as stores and medical clinics, that are directly linked to a railway station.“ By utilizing areas of our building sites set aside for public use and providing properties for a broad range of applications, we contribute to tenants and residents of our buildings as well as everyone living in the surrounding area.
Flexible and agile response to existing buildings
Expertise acquired since the start of real estate securitization in Japan enables us to recognize the potential value of existing buildings we acquired in the real estate market and produce the greatest possible value by taking flexible and agile actions.
Urban redevelopment projects
Kenedix Inc. takes part in urban redevelopment projects through its real estate development funds and other schemes.
Cooperation with Re-Seed
We are participating in a hotel redevelopment project in the Roppongi district of Tokyo and will operate the property after its completion. This is a joint project with Real Estate Sustainability & Energy Efficiency Diffusion Organization (Re-Seed), which promotes the construction of high-quality buildings that can withstand earthquakes and are environmentally responsible. The previous building was replaced by a quality structure with outstanding environmental and other characteristics. This project uses a sophisticated business structure. We received certification under the Real Estate Specified Joint Enterprise Act and are using a special business scheme designated by this act.
Reuse of underground piles
At Kenedix redevelopment projects in central Tokyo, the foundation piles of previous buildings have been reused in order to eliminate the cost of removal and replacement as well as the need to dispose of these piles. After a confirmation of their safety and structural integrity, existing piles have been used for the redevelopment of the Shinsei Bank head office site in Hibiya, hotel redevelopment projects in Roppongi and Ginza, and other projects.
Urban redevelopment of aging condominium through condominium site sale program and real estate securitization scheme.
The number of aging condominiums and the shortage of manpower for management associations is expected to increase significantly. There are urgent needs to restrain deterioration, optimize the management and maintenance of condominiums in order to prevent harm to the surrounding area, and strengthen efforts to revitalize condominiums that are aging and difficult to maintain and repair.
Kenedix has developed an office building after the dismantlement of the 50-year-old condominium with former earthquake-resistant standards in front of Kichijoji Station by utilizing "condominium site sale program" based on the Act on Facilitation of Reconstruction of Condominiums and real estate securitization scheme. This is the first Project in Japan utilizing a real estate securitization scheme to form a fund for the acquisition of the Existing Building. The project was made possible by procuring a non-recourse loan for the project to resolve cost issues and by inviting quality investor.
On-site expansion of existing properties
KDX Realty Investment Corporation has expanded a recycle store building at Roseo Mito, two restaurant buildings at Unix Ina, and a restaurant building and a lounge building. KRR strives to enhance the value of properties through urban redevelopment.
Investment in the Maebashi CCRC project properties
The concept of CCRC (Continuing Care Retirement Community) originally originated in the United States, but the Japanese version of CCRC was devised to extend healthy life expectancy in Japan as well as to improve the environment as a regional revitalization.
Kenedix Private Investment Corporation owns a commercial facility located in local city that is promoting CCRC business. The area includes multigeneration apartments, nursing homes with nursing care, kindergarten, and bakery café & community spaces in the parks.
An organization that works to enhance the attractiveness of the surrounding area has been formed. Kenedix Private Investment Corporation, in cooperation with the tenants and other members of the organization to foster a community of diverse people and generations, promotes to increase the attractiveness of the region and create a related population.
Social finance
KDX Realty Investment Corporation further enhances initiatives for sustainability through the issuance of bonds and borrowing, which are limited use that make a high degree of contribution to society, and also aims to contribute to the development of the domestic social finance market by providing investment opportunities to and collaborating with financial institutions who are proactively conducting ESG investment and financing. In December 2019, Kenedix Residential Next Investment Corporation issued the J-REIT’s first social bonds with total amount of 2 billion yen.
What is a Social Bond?
Social bond refers to bonds for which the entire amount of the procured funds is allocated only to initial partial or full investment into new or existing eligible social projects or reflecting and is complaint with the four core requirements of the social bond principles (use of procured funds, evaluation and selection process of project, management of procured funds and reporting.)
Providing investment opportunities through real estate crowdfunding
We have developed the real estate crowdfunding business “bitREALTY” since January 2019 to provide more people with opportunity to invest in unlisted real estate investment funds, which were previously limited to some institutional investors. We have provided a new era service that allows to invest in various real estate investment funds via the internet. We have organized various funds for hotel, residential properties, logistics facility, healthcare facilities, childcare facilities and retail facility, and have completed a total of 8.5 billion yen in offerings so far.
Providing investment opportunities through real estate security tokens
In August 2021, Kenedix implemented Public Real Estate Security Token Offering (Real Estate STO) for the first time in Japan to issue digital securities for the purpose of procuring funds. Real estate security tokens (Real Estate ST) have both of the characteristics of real estate such as "visibility" and "stability" and the benefits of financial instruments such as "smaller-lot" and "liquidity." These are convenient real estate investment methods that can be invested by way of existing securities companies' investment accounts, and we consider them to be new investment products that can meet diverse investment needs of a wide range of investors.
Opportunities to investment in large real estate
As its third offering, in August 2022, Kenedix implemented the largest Real Estate STO in Japan at that time, backed by a logistics property with an asset size of ¥14,600 million and the offering has won an award in the asset-backed token category at the TADS Awards 2022.
In addition, in August 2023, Kenedix implemented larger Real Estate STO than that, backed by a tower condominium with an asset size of ¥30,000 million.
Opportunities to investment in secondary market via ODX
As its ninth offering, in December 2023, Kenedix implemented the Real Estate STO, backed by a hotel with an asset size of ¥8,900 million. The Real Estate ST is one of the first security in START, new trading system operated by Osaka Digital Exchange Co. Ltd, (ODX) for distribution of security tokens, to begin trading.
Improving Resilience
Basic views
Improving resilience/climate adaption is one of our material issues. We have been making various initiatives to prepared for emergency situations in our properties for the safety and security of tenants’ employees, visitors and local communities.
Improving resilience for disaster
Emergency kit box in elevator
KDX Realty Investment Corporation has been placing boxes of emergency kit in the elevators in case of disaster and machine trouble.
Distribution of emergency action manual handbook
KDX Realty Investment Corporation published a pocket-sized, portable emergency action manual handbook and distributed to tenants for emergencies including major earthquakes.
The handbook contains various helpful information in an emergency such as response to major earthquakes, emergency relief activities and how to use AED.
Disaster response vending machine
Some properties owned by Kenedix Residential Next Investment Corporation have disaster relief vending machines and SDGs promotion vending machines.
In the event of a power outage due to disaster, etc., beverages in the vending machines can be provided free of charge as relief beverages.
Verification of earthquake resistance
Before acquiring a property and in conjunction with other transactions, Kenedix receives an engineering report that covers the building, various equipment, environmental properties and other items. We use this report to confirm the building's resistance to earthquakes. If a building does not meet the standards, we complete the purchase only after the completion of seismic reinforcement work.
We also receive a probable maximum loss report prior to acquiring a building. This allows us to determine the maximum risk exposure associated with an earthquake.
Initiatives for an Aging Society with Fewer Children
Basic views
Japan's population has been declining since 2008 as the country's population becomes older and the number of children falls. As the already large number of older people continues to climb, the shortage of healthcare facilities will become an even more serious problem. On the other hand, we also recognize that the wait-listed children for childcare facilities in urban areas due to women’s advancement in society and lack of nursery teachers is also a social issue.
Initiatives for an aging society with fewer children are one of our material issues. We invest in residential facilities with healthcare and childcare facilities, healthcare facilities and using other activities to meet the needs of Japan's aging population.
Management of healthcare facilities
KDX Realty Investment Corporation has invested in healthcare facilities in order to help meet the growing demand for healthcare by purchasing and operating these facilities.
Healthcare investments cover a variety of business sectors. Acquisitions include fee-based homes for the elderly and serviced housing for the elderly as well as investments in senior living intermediate nursing home, which is a first for a J-REIT.
KDX Realty Investment Corporation is dedicated to growing along with the operators of properties it owns by providing the best solutions for their business and facility management issues and other needs. KDX Realty Investment Corporation fully understands the philosophy, business operations and other characteristics of these partners. Operators of properties fully understand KDX Realty Investment Corporation’s investment philosophy, management policies and other guidelines. This mutual understanding results in business partner relationships that go well beyond the conventional boundaries of ties between a building owner and a tenant.
Commitment to barrier-free access
Office buildings, shopping centers and other real estate at the Kenedix Group have facilities for easy accessibility for everyone regardless of physical limitations
Relevant Data
| 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|
| Number of healthcare properties managed by Kenedix Group REITs |
24 | 28 | 37 | 39 |
| AUM of healthcare properties managed by Kenedix Group REITs (millions of yen) |
54,128 | 61,610 | 73,381 | 82,417 |