O

October 16, 2012

Financial Results for the Fiscal Period
From March 1, 2012 to August 31, 2012
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/english/)
Executive Director:
Investment TrustManagement Company:
President and CEO:Inquiries:

Yuji Yokoyama

Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Kosei Murakami
Satoshi Nohara, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
November 28, 2012
Scheduled Commencement Date of Cash Distribution Payment: November 15, 2012

1. Business Results for the Fiscal Period from March 1, 2012 to August 31, 2012
(1) Operating Results(in millions of yen, rounded down; except as noted)
Total revenues

Operating income(%)*

Income before income
taxes

(%)*

(%)*

For the period ended
August 31, 2012
February 29, 2012

8,103

3.1

3,634

0.6

2,856

0.8

7,857

3.9

3,613

5.6

2,833

7.7

IncomeIncomebeforebeforeincomeNet income Net income/ income
taxes/
per unit
net assets
taxes/
operatingtotal assets income

Net income

(%)*

(yen)

(%)

(%)

(%)

2,855

0.8

14,665

2.7

1.2

35.2

2,832

7.7

14,548

2.7

1.2

36.1

For the period ended
August 31, 2012
February 29, 2012

*Percent figures show changes from previous period1(2) Distributions(in millions of yen, rounded down; except as noted)
Distribution
per unit

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

Total
distributions(yen)

For the period ended
August 31, 2012

14,306

2,785

–

–

97.6

2.6

February 29, 2012

14,548

2,832

–

–

100.0

2.7

Note:
For the period ended August 31, 2012, the amounts of “Total distributions” and “Net income” aredifferent because a part of retained earnings (¥70 million) was retained internally.

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

Total assets

Net assets

Net assets/
total assets

Net assets per
unit

(%)

(yen)

As of
August 31, 2012

237,854

106,09044.6

544,863

February 29, 2012

237,222106,06844.7

544,746

Cash flows fromoperating activities

Cash flows frominvesting activities(4) Cash Flows(in millions of yen, rounded down; except as noted)

Cash flows fromfinancing activities

Cash and cash
equivalents

For the period ended
August 31, 2012

5,604

(2,065)(2,331)

6,159

February 29, 2012

4,403

(7,805)

3,870

4,951

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2. Forecasts for the Fiscal Period from September 1, 2012 to February 28, 2013
(in millions of yen, rounded down; except as noted)

Total
revenues

For the period ending

February 28, 2013 7,905

Distribution in
IncomeDistribution excess of
beforeNet income
per unit
earnings
income taxes
per unit

Operatingincome

(%)*

(%)*

(%)*

(%)*

(yen)

(yen)

(2.5) 3,570(1.8) 2,804(1.8) 2,803 (1.8)

14,400–*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, 2013 is ¥14,400.

3. Other
1. Changes in significant accounting policies, Changes in accounting estimates and Restatement:(1) Changes due to revisions in accounting standards and others: None
(2) Changes other than in the above item (1): None
(3) Changes in accounting estimates: None
(4) Restatement: 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, 2012:

194,711 units

As of February 29, 2012:

194,711 units(2) The number of treasury investment units as of the period-end:
As of August 31, 2012:- units

As of February 29, 2012:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 194,711 units as of August 31, 2012, and 194,711 units as of February 29,
2012.

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.

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13th Period (August 2012) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Result of the 13th
Period(August 2012)(1)
Number ofoperating days
Total revenues
Income before
income taxes
Net income
Distribution perunit (yen)Number ofinvestment
properties
Averageoccupancy rate atend of period (%)

Forecast of the
13th Period

Result of the 12th
Period(February 2012)(2)

Comparison withthe 12th Period(1)-(2)

184

184

182

2

8,103

8,075

7,857

245

2,856

2,757

2,833

22

2,855

2,757

2,832

22

14,306

13,80014,548

(242)

88

88

87

1

95.8

Approx. 95

96.2

(0.4)

Overview of Performance and Distribution
In the period under review, NAF recorded total revenues of ¥8,103 million, operating income of¥3,634 million, income before income taxes of ¥2,856 million and net income of ¥2,855 million. In
addition to the above, NAF has decided to distribute the majority of the ¥2,785 million balanceremaining after deduction of ¥70 million of reserve for reduction entry under Article 66-2 of the Act
on Special Measures Concerning Taxation from retained earnings in accordance with theDistribution Policy (Article 34 of the Articles of Incorporation) set forth by NAF. The distribution perunit was ¥14,306.

13th Period (August 2012) Overview of Investment
External Growth (Acquisition and sale of properties)
During the period under review, NAF acquired 2 properties in March 2012 (total acquisition price:¥1,700 million) and sold Park Cube Keio Hachioji in April 2012 (acquisition price in August 2006:¥991 million, sale price: ¥1,020 million).
The gain from transfer of Park Cube Keio Hachioji will be internally retained as a reserve byimplementing a reduction entry utilizing the “Special Provisions for Taxation in the Event ofAdvance Acquisition of Land, etc. in 2009 and 2010” under Article 66-2 of the Act on Special
Measures Concerning Taxation.

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Internal Growth (Management and operation of properties held by NAF)
Mitsui Fudosan Housing Lease Co., Ltd., the master property management company (below,“Master PM”), and the asset management company collaborate in the management of properties
held by NAF with the aim of implementing effective management and operation activities inaccordance with regional characteristics and the individual features of each property. These
include efforts such as rapid management and operations by the Master PM applying the portfolio
management system, tenant recruiting activities suited to the circumstances of individual
properties, the streamlining of management cost reduction efforts, interior renovations at
Okawabata Apartment Communities, one of the principle properties of NAF, and provide tenant
services corresponding to various needs in accordance with the results of resident questionnaires.
Financial Strategy (Overview of funds procurement)
During the period under review, NAF borrowed ¥1,500 million as funds for the acquisition of new
properties, etc. Also, while taking into account market trends and interest rate levels, NAF
refinanced its existing loans. In addition, NAF repaid a total of ¥1,000 million of its short-term loans
with cash reserves. As a result, total interest-bearing debt at the end of the period amounted to¥126,500 million, while the long-term loans to total interest-bearing debt ratio was 94.1% (ratio
excluding long-term loans due within one year: 79.1%). Also, LTV (loan-to-value ratio) at the endof the period was 53.2%.
A shelf-registration statement of investment corporation bonds in public offering was filed at the
Kanto Local Finance Bureau in July 2011. An overview of the shelf-registration statement is given
below. The remaining balance of the planned issuance amount at the end of the period is¥100,000 million.
Planned issuance amount
Scheduled period of issuancePurpose for funds

Up to ¥100,000 million
From July 18, 2011 to July 17, 2013
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

Rating of NAF as of August 31, 2012 is as follows.
Rating agency
Moody’s Japan K.K. (Moody’s)
Rating and Investment Information, Inc.
(R&I)
Standard & Poor’s Ratings Japan K.K.
(S&P)

Rating subject
Issuer credit rating
Issuer credit rating

RatingA 3 (Outlook for rating: Stable)
A A - (Trend of rating: Stable)

Long-term corporate
Short-term corporate

A + (Outlook for rating: Stable)
A -1

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Significant Subsequent Events
Not applicable.
(Reference information)
On September 26, 2012, NAF concluded an anonymous partnership agreement with Godo
Kaisha ABF1 as the operator and acquired the following equity interest in the anonymous
partnership on the same date.
Name of asset acquired:Type of asset acquired:Real estate in trust:
Investment amount:(Anonymous partnership equity interest in)
Godo Kaisha ABF1
Equity interest in anonymous partnershipinvesting in domestic real estate in trust
beneficiary interest
Iris Nihonbashi Suitengu
Iris Ginza East
¥150 million (9.1% of total anonymous
partnership equity interest)6Forecasts of Investment Performance
The forecasts for the 14th period (from September 1, 2012 to February 28, 2013) are as follows.
(in millions of yen, rounded down; except as noted)

Total revenues
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)14th period(February 2013)
7,905
2,804
2,803
14,400―Notes: Underlying assumptions of forecasts
Number of operating
days:
Investment assets:

Expenses:

Interest-bearing debt:

Number of units
issued:-From September 1, 2012 to February 28, 2013 (181 days)-The number of properties held by NAF as of the date of this document
is 88, in addition to 1 asset as an equity interest in an anonymous
partnership relating to real estate. In the forecasts of investment
performance, it is assumed that no subsequent transfer of properties(acquisition of new properties, transfer of properties acquired, etc.) shalloccur until February 28, 2013.
-The occupancy rate at the end of the 14th period for total properties is
expected to be approx. 95%.
-The following expenses are projected.
(in millions of yen)
14th period
Fixed property taxes and381
urban planning taxes
Depreciation and amortization
1,706Interest expense and interest
expenses on investment765
corporation bonds-It is assumed that NAF’s balance of interest-bearing debt that is¥126,500 million as of the date of this document shall not fluctuate until
February 28, 2013.
-We assume 194,711 units outstanding as of the date of this document.
-It is assumed that, there shall be no issuance of new units until
February 28, 2013.

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

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Management Policy and Issues for the 14th 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 14th 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)
We will strive to rapidly obtain the best real estate information possible by utilizing our pipeline to
the Mitsui Fudosan Group and fortifying our independent information channel consisting of theasset management company. Our basic strategy will be to stably expand our portfolio based on
the Park Axis Series developed by Mitsui Fudosan Co., Ltd. in addition to the Park Cube Series
constructed by other developers. Moreover, we will work to steadily acquire properties considered
to possess mid- to long-term competitive advantages through individual strategies such asenhancing our portfolio within the 23 wards of Tokyo and other parts of the Tokyo area, mainlywith single-occupant and compact residential properties for which a high occupancy rate is
expected, and carefully selecting properties for investment in the major cities of regional areas.
We will also consider making investments in “Equity Interests in Anonymous Partnerships relating
to Real Estate” or “Real Estate-Backed Securities” for such purposes as securing opportunities forproperty acquisitions.
The main part of the acquisition strategy of NAF continues to be stable acquisition of “Rental
Apartments”. However, it will continue to consider making acquisitions of “Other Accommodation
Assets”, including dormitories and corporate housing, as the investment market in “Other
Accommodation Assets”, excluding “Rental Apartments”, appears to have matured in somecategories. In the management of its portfolio, NAF has set the upper limit of the share of “Other
Accommodation Assets” in the overall portfolio to around 10% (on the basis of acquisition price)for the time being (the share of “Other Accommodation Assets” in the overall portfolio was 4.2% at
the end of the 13th period).
We will also continue to work towards effectuating high quality due diligence when acquiringproperties in order to avoid risk.
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 will continue to aim to maintain and enhance market

8competitiveness by implementing strategic renovations, primarily at Okawabata Apartment
Communities.
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.
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. Regarding LTV(loan-to-value ratio), the upper limit is set at around 60%. NAF will examine the issuance of newunits 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 financial position.
Additionally, NAF will examine future issuances of investment corporation bonds, in accordancewith market trends, within the range of the remaining balance of the planned issuance amount, forwhich shelf-registration of NAF bonds has been carried out.

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 for
informational purposes. In the event of any discrepancy between the Japanese original and thisEnglish translation, the Japanese original shall prevail.

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