October 15, 2008

Financial Results for the Fiscal Period
From March 1, 2008 to August 31, 2008
Nippon Accommodations Fund Inc. (NAF) is listed on the Tokyo Stock Exchange (J-REIT) withthe securities code number 3226. (Website: http://www.naf-r.jp/)
Representative Executive Director:
Asset Management Company:
Representative President and CEO:Inquiries:

Nobuyuki Nakai
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Nobuyuki Nakai
Morio Shibata, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
November 26, 2008Scheduled Commencement Date of Cash Distribution Payment: November 14, 2008

1. Business Results for the Fiscal Period from March 1, 2008 to August 31, 2008
(in millions of yen, rounded down; except as noted)(1) Operating Results
Total revenue

Operating income(%)

Income before incometaxes

(%)

(%)

For the period ended
August 31, 2008

4,498

9.9

2,212

5.2

1,642

0.7

February 29, 2008

4,092

16.1

2,103

17.2

1,631

12.7

IncomebeforeIncomebeforeincome
Net income Net income/ income
per unit
net assets
taxes/taxes/
total assets operatingincome

Net income(%)

(yen)

(%)

(%)

(%)

For the period ended
August 31, 2008

1,641

0.7

14,461

2.6

1.2

36.5

February 29, 2008

1,630

12.7

14,365

2.6

1.3

39.9

(Percent figures show changes from previous period)

1(2) Distributions(in millions of yen, rounded down; except as noted)
Distribution
per unit

Distribution in
Total
excess ofdistributions inDistributions/
Payout ratio
net assets
earnings
excess of
per unit
earnings
(yen)
(%)
(%)

Total
distributions(yen)

For the period ended
August 31, 2008

14,461

1,641––

99.9

2.6February 29, 2008

14,366

1,630

––

100.0

2.6

Notes:
1. The payout ratio is rounded down to the nearest first decimal place.
2. “Distribution per unit” does not include distribution in excess of earnings per unit.

(3) Financial Position(in millions of yen, rounded down; except as noted)

Total assets
As ofAugust 31, 2008

146,666

Net assets

62,619Net assets/
total assets

Net assets perunit

(%)

(yen)

42.7

551,813

February 29, 2008

129,969
62,60848.2
551,717
Note: Net assets as of August 31, 2008 and February 29, 2008 were respectively ¥62,619 millionand ¥62,608 million.

(4) Cash Flow(in millions of yen, rounded down; except as noted)

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents

August 31, 2008

2,478

(17,644)

14,8683,188

February 29, 2008

2,513

(15,962)

13,4983,486

For the period ended2

2. Forecasts for the Fiscal Period from September 1, 2008 to February 28, 2009
(in millions of yen, rounded down; except as noted)

For the period ending

February 28, 2009

Distribution
IncomeDistribution in excess ofbefore
Net income
per unit earnings perincome taxesunit

Totalrevenue

Operatingincome

(%)

(%)

4,543 1.0

2,252

1.8

1,642(%)

(%)

(yen)

(yen)

0.1

1,642 0.1

14,470-(Percent figures show changes from previous period)

Notes:
1. “Distribution per unit” does not include distribution in excess of earnings per unit.
2. Projected net income per unit for the fiscal period ending February 28, 2009 is 14,470 yen.

3. Other
1. Changes in significant accounting policies:(1) Changes due to revisions in accounting standards and others: None
(2) Changes other than in the above item (1): None
2. Number of investment units issued(1) The number of investment units issued (including treasury investment units) as of theperiod-end:
As of August 31, 2008:

113,480 units

As of February 29, 2008:

113,480 units(2) The number of treasury investment units as of the period-end:
As of August 31, 2008:- units

As of February 29, 2008:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 113,480 units as of August 31, 2008, and 113,480 units as of February 29,2008.
Disclaimer:
The above forecasts are based on information currently available to NAF and on certain
assumptions deemed to be reasonable. Actual operations may differ substantially due to anumber of factors.

35th Period (August 2008) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Number ofoperating days
Total revenue
Income before
income taxes
Net income
Distribution perunit (yen)Number ofinvestment
properties
Averageoccupancy rate atend of period (%)

Comparison withthe 4th Period(1)-(2)184

Result of the 4thPeriod(February 2008)
(2)
182

4,498
1,642

4,506
1,631

4,092
1,631

405
10

1,641
14,461

1,630
14,3701,630
14,366

10
95

44

44

37

7

96.0

95.0

97.2

(1.2)

Result of the 5thPeriod(August 2008)(1)
184

Forecast of the5th Period

2Overview of Performance and Distribution
In the period under review, NAF recorded total revenue of ¥4,498 million, operating income of¥2,212 million, income before income taxes of ¥1,642 million and net income of ¥1,641 million. In
addition to the above, NAF has decided to distribute nearly the entire amount of earnings inaccordance with the Distribution Policy (Article 34 of the Articles of Incorporation) set forth by NAF.
The distribution per unit was ¥14,461.

5th Period (August 2008) Overview of Investment
External Growth (Acquisition of properties)
During the period under review, NAF acquired 7 properties in March 2008 and May 2008 (totalacquisition price: ¥16,755 million). As a result, NAF held 44 properties in its assets at the end ofthe period and the total acquisition price was ¥140,000 million.

4Internal Growth (Management and operation of properties held by NAF)
NAF concentrates its investment property holdings in the 23 wards of Tokyo, where the demand
for rental housing is steady and strong, and it implemented effective leasing activities inaccordance with regional characteristics and the individual features of each property collaboratingwith Mitsui Fudosan Housing Lease Co., Ltd., the master property management company (below,“Master PM”).
At the Okawabata Apartment Communities, one of the principle properties, NAF completedlarge-scale repairs, mostly concerning exterior walls, at the Park Side Wings. The same work for
the River Point Tower had previously been completed. NAF has mostly completed its large-scalerenovation of the common-use areas of the property.
Further, continuing on from the previous period, we flexibly applied the portfolio management
system at the Master PM to further expedite our management and operation business and todevelop tenant recruiting activities suited to the circumstances of individual properties.
As a result of the above leasing activities, which includes the start of leasing for unused buildings
within Park Cube Itabashi Honcho and Park Cube Gakugei Daigaku, NAF again achieved a highaverage occupancy rate (96.0%) in all invested properties at the end of the 5th period.
NAF will work towards implementing measures in relation to “accommodation” services
corresponding to various needs, in accordance with the results of resident questionnaires
concerning all properties implemented in the previous period.
Financial Strategy (Overview of funds procurement)
NAF borrowed a total amount of ¥16,800 million from multiple financial institutions for the March
2008 and May 2008 new acquisition of properties. As a result, total interest-bearing debt at theend of the period under review reached ¥81,000 million with a 55.2% LTV (loan-to-value ratio).
Also, the long-term, fixed-rate loans to total interest-bearing debt ratio at the end of the period was64.2%.
To diversify fund procurement methods, a shelf-registration statement of investment corporation
bonds in public offering was filed at the Kanto Local Finance Bureau in July 2007. An overview ofthe shelf-registration statement is given below. The remaining balance of the planned issuanceamount at the end of the period is ¥90,000 million.
Planned issuance amount
Scheduled period of issuancePurpose for funds

Up to ¥100,000 million
From July 18, 2007 to July 17, 2009
Acquisition of new specified assets (same meaning as definedin Article 2, Paragraph 1 of the Investment Trust and Investment
Corporation Act of Japan), repayment of borrowings, repaymentof tenant security deposit, payments for maintenance andrenovation, and operational use

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Rating of NAF as of August 31, 2008 is as follows.
Rating agency
Moody’s Investors Service Inc.
Rating and Investment Information, Inc.
Standard and Poor’sRating subject
Issuer credit rating
Issuer credit rating
Long-term corporate
Short-term corporate

RatingA 1 (Outlook for rating: Stable)
A A (Trend of rating: Stable)
A + (Outlook for rating: Stable)
A -1

Forecasts of Investment Performance
The forecasts for the 6th period (from September 1, 2008 to February 28, 2009) are as follows.
(in millions of yen, rounded down; except as noted)

Total revenue
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)

4,543
1,642
1,642
14,470―Notes: Underlying assumptions of forecasts
Investment assets:

NAF is assuming the number of properties at the end of the 6th
period will be unchanged (by, for example, acquisition of new
properties or sale of existing properties) from 44 properties, which
was the current number as of October 15, 2008.

Interest-bearing debt:

NAF is assuming interest-bearing debt at the end of the 6th period
will be unchanged from ¥81,000 million, which was the current
interest-bearing debt as of October 15, 2008.

Number of units issued:

A quantity of 113,480 units outstanding as of October 15, 2008(assumption of no additional unit issuance) is assumed.

The forecasts are the figures calculated based on the above assumptions at the time ofpreparation of this information. Therefore, actual total revenue, income before income taxes, net
income, distribution per unit and distribution in excess of earnings per unit may be subject tochange due to acquisition or sale of properties in future, fluctuation in the real estate market orother changes in the environment in which NAF operates. Accordingly, the forecasts are not aguarantee of any cash distribution amount.

6Management Policy and Issues for the 6th Period Onward
NAF has always aimed to maximize its unitholder value through investments in accommodation
properties and the utilization of the Mitsui Fudosan Group as well as the formulation andmanagement of a high quality portfolio centered on rental residential properties located in the 23
wards of Tokyo.
From the 6th period onward, we aim to manage our portfolio stably based on theabove-mentioned policies and further increase our unitholder value by achieving internal andexternal growth expectations.
External Growth (New acquisition of properties)In addition to utilizing our pipeline to the Mitsui Fudosan Group and acquiring sales information on
residential rental properties, we will strive to rapidly obtain the best real estate information
possible by fortifying our independent information channels. Our property acquisition strategy will
be to stably expand our portfolio based on the Park Axis Series to be acquired from Mitsui
Fudosan Co., Ltd. in addition to the Park Cube Series constructed by other developers. Moreover,
we will aim to realize solid property acquisitions while avoiding excessive price wars throughindividual strategies such as increasing our single-occupant, compact, residential property ratio
for which a high occupancy rate is expected, widening the geographic area of our holdings within
the 23 wards of Tokyo and carefully selecting properties for investment in the major cities ofregional areas.
We will also work towards effectuating high quality due diligence when acquiring properties inorder to avoid risk in an effort to increase the profitability of our portfolio.
Internal Growth (Management and operation of leasehold properties)
NAF will aim to improve its rent levels and occupancy rate through the formulation andimplementation of a leasing strategy that takes into account the characteristics of each individual
property with the objective of maximizing rent revenues over the mid- to long-term. NAF will
review the adequacy of the grade of property management and cost of management andoperation as to each invested property in an appropriate timeframe and manner and reduce costby the rational review of management cost by utilizing the merits of outsourcing all property
management tasks to the Master PM. NAF is continuously aiming for the maintenance andenhancement of the market competitiveness of Okawabata Apartment Communities byimplementing strategic renovation of principally private-use areas.
Further, with the help of Mitsui Fudosan Co., Ltd., NAF will work to establish brand power byconcentrating on the market penetration of the “Park Axis” brand, NAF’s main invested asset, andthe further enhancement of name recognition on the rental housing market.

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Financial Strategy
NAF will continue to emphasize the continued use of long-term, fixed-rate loans taking into
account measures to counter future interest rate and refinancing risks. NAF will examine futureissuances of investment corporation bonds within the range of the remaining balance of theplanned issuance amount based on the shelf-registration statement of NAF bonds filed in July
2007. Regarding LTV (loan-to-value ratio), the upper limit is set at 60% and targeted range during
normal operations is set at approximately 40% to 50%. Additionally, NAF will examine theissuance of new units paying attention to market trends and distribution levels and taking into
consideration the demand for funds for the purpose of property acquisition as well as our financialposition.

Disclaimer:This financial report has been prepared in accordance with Japanese accounting standards andJapanese laws. Figures have been rounded down to eliminate amounts of less than one million
yen.
Please note that this English translation of the Japanese original document is provided solely forinformational purposes. In the event of any discrepancy between the Japanese original and thisEnglish translation, the Japanese original shall prevail.

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