Nippon Accomodations Fund Inc.
27th Period (March 2019 - August 2019) Investor Presentation
Q&AQAQAQA

Operating rents continue to increase at the time of tenant turnover. Is the gap between
operating rents and market rents still widening? While the average rent per tsubo has
increased 0.75% compared with the previous period for the portfolio as a whole, itfollows that the gap would widen in the event that market rents continue to rise. What
are your thoughts?
There are subtle differences between the definitions announced by each managementcompany. Accordingly, we do not disclose details of rent gap data. While we believe
the rate of rent change at the time of tenant turnover is closest to the current rent gap,
rents in new rental agreements have risen steadily over the last few years. When looking
at the foreseeable future, we anticipate trends in the average rent per tsubo for theportfolio including tenant turnover will continue to increase around 1 to 1.5% annually.
Turning to the status of rental apartment development by your sponsor, Mitsui FudosanCo., Ltd., and taking into consideration this level of rent increase, together with the
weak nature of sales due to the high price of condominiums, are there moves toward
accelerating the pace of pipeline rotation and rental apartment development?
Not being the sponsor, we are unable to comment with any authority. Speaking purely
from an intuitive standpoint, we believe that Mitsui Fudosan is adopting a case-by-caseapproach focusing mainly on applications that exhibit high commercial viability andprofitability based on site information as opposed to actively pursuing development.
Amid the exchange of information, we do not sense that the sponsor is shifting fromcondominiums to rental apartments all at once or undertaking developments after
determining specific weights or priorities.
It would appear that you are looking at a prolonged period of tight supply and demandin the rental apartment market for the next two years. What scenarios are you looking
at for conditions in the rental apartment market to change? For example, a downturn inthe economy or an increase in supply.
We believe that an increase in supply will play a principal role. A downturn in theeconomy can also be considered a factor. Against the backdrop of a shortage of labor,
and with the limited nature of the 20s to 30s demographic, which comprises a large
portion of the tenants of the properties held, conditions may however change should
unemployment rates for this demographic increase and rents plateau. At this stage, there
is no sense that either of these scenarios will eventuate.

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AThe fact that supply has not increased has been identified as one reason for the tightrental apartment market especially in Tokyo. What then do you see as factors that could
lead to an increase in supply in the future?
From an economic principle perspective, improving the profitability of rental apartment
development through upswings in rent and increasing the supply of properties can beexpected to help balance supply and demand. Having said this, the current stock of sites
for sale is limited to begin with because of a variety of factors including low interest
rates. All in all, we believe that overall economic trends are important.
Looking at the rental apartment market, what are your thoughts on the appropriate
levels of income and rents in general as well as changes and trends?
From an assessment criteria perspective, we have set rent at a range within 25 to 30%
of annual income. Currently, lease contracts are executed on an individual lessee basis.
Engaging in a more detailed analysis is difficult because of the lack of dual income andworking family household annual income data.

■ This document is intended for informational purposes, and is not intended to sell or solicit an offer to buy
or sell any security or other financial instrument of the Investment Corporation.
■ Unless explicitly indicated, the information provided in this document does not constitute the disclosure
or asset management reports required under the Financial Instruments and Exchange Act or laws relevant toinvestment trusts or investment corporations.
■ Nippon Accommodations Fund Inc. has exercised due care in providing the information in this document,
but does not guarantee its accuracy or completeness.
■ The information in this document contains future projections, but such statements do not guarantee futureperformance.
■ The Investment Corporation is not responsible for updating the information in this document. Theinformation in this document may be changed without prior notice.
REIT Management Company: Mitsui Fudosan Accommodations Fund Management Co., Ltd.
(Financial Instruments Firm: Kanto Finance Bureau (registration) No. 401 Member of the Investment Trusts
Association, Japan)