6th Period
http://www.naf-r.jp/english/index.html

NAF Report | September 2008 – February 2009

Clear Management Objectives,
Consistent Returns

Profile

Nippon Accommodations Fund Inc. (“NAF”) was incorporated as an investment corporation on
October 12, 2005 with an initial investment by Mitsui Fudosan Co., Ltd. (“Mitsui Fudosan”), andwas listed on the Tokyo Stock Exchange on August 4, 2006 with assets of more than ¥100 billion.
NAF invests in accommodation assets* located mainly in the 23 wards of Tokyo. The Investment
Trust and Investment Corporation Act of Japan requires an investment corporation to be
managed by an external entity. NAF’s assets are managed by Mitsui Fudosan Accommodations
Fund Management Co., Ltd. (“MFAFM”), a 100 percent subsidiary of Mitsui Fudosan.
* Accommodation assets in this report are defined as rental apartments, corporate housing, dormitories/student apartments, serviced apartments andsenior residences. They do not include hotel properties.

Contents
Financial Highlights ......................................................................... 1

Corporate Structure and Governance............................................... 24

NAF Snapshot .................................................................................. 2

Rental Apartment Investment Characteristics.................................. 28

To Our Stakeholders ........................................................................ 4

Management‘s Discussion and Analysis .......................................... 30

Clear Management Objectives, Consistent Returns ......................... 7
Solid Demand .............................................................................. 8
Efficient Operations ..................................................................... 10
An Effective Value Chain ............................................................. 12

Financial Statements........................................................................ 37

NAF Portfolio ................................................................................... 16
Portfolio Map............................................................................... 16
Property Portfolio ........................................................................ 18
Portfolio Summary ....................................................................... 22

Nippon Accommodations Fund Inc.

Notes to Financial Statements ......................................................... 41
Independent Auditors’ Report.......................................................... 47
Appendix ......................................................................................... 48
Portfolio Policy................................................................................. 52
Corporate Data and Investor Information ........................................ 56

Financial Highlights

Yen in millions

U.S. dollars in thousands(Except per unit data or
where otherwise indicated)(Note 1)
(Except per unit data)

6th Period

5th Period

4th Period

6th Period

September 1, 2008 to
February 28, 2009

March 1, 2008 to
August 31, 2008

September 1, 2007 to
February 29, 2008

September 1, 2008 to
February 28, 2009

¥ 4,508
1,656
1,655

¥ 4,498
1,642
1,641

¥ 4,092
1,631
1,630

2,518

2,489

2,361

25,744

3,614
1,655

3,541
1,641

3,317
1,630

36,94916,921

Total assets
Total liabilities
Total net assets (b)LTV (Loan-to-value) ratio (Note 3)

146,666
84,032
62,63455.2%

146,666
84,04662,62055.2%

129,969
67,36062,60949.6%

1,499,499
859,135
640,364

Total number of common units issued (units) (c)Net assets per unit (Yen/$) (b) / (c)Distribution per unit (Yen/$) (a) / (c)Funds from operations per unit (Yen/$) (Note 3)

113,480
551,939
14,58722,184

113,480
551,813
14,461
21,929113,480
551,717
14,36620,809Total revenues (Note 2)
Income before income taxes
Net income
Funds from operations (Note 3)
Net operating income from property
leasing activities (Note 3)
Total amount of cash distribution (a)$46,08916,931
16,921

5,642.97
149.14226.81

Notes 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥97.81 = U.S.$1.00, the approximate exchange rate on February 28, 2009.
2. Total revenues do not include consumption tax.
3. Funds from operations: Net income + Depreciation and amortization – Gain on sale of investment properties
Net operating income from property leasing activities: (Revenues from property leasing – Rental expenses) + Depreciation and amortization
LTV ratio: Interest-bearing debt ÷ Total assets
Funds from operations per unit:(Net income + Depreciation and amortization – Gain on sale of investment properties) ÷ Total number of units issued and outstanding at end of period

Occupancy Rate (Portfolio average)

Ratings (As of February 28, 2009)

(%)

100
98
96

95.8

96.0

95.6

96.2
95.1

RatingOutlook

Moody’s Investors Service, Inc.

A1*

StableRating and Investment Information Inc.

AA

StableLong-term Corporate

A+

StableShort-term Corporate

A-1

—

94.7

94

Standard & Poor’s

92
90

Rating Agency

Sep.
2008

Oct.

Nov.

Dec.

(End of the month)

Jan.
2009

Feb.

NAF’s properties have maintained a stablehigh occupancy rate since its listing on theTokyo Stock Exchange.

NAF’s ratings from major rating agencies
are among the highest for residential
J-REITs.
* On April 21, 2009, Moody’s Investors Service, Inc. announced that it had lowered
NAF’s rating to A2.

NAF Report September 2008 – February 20091

NAF Snapshot(As of February 28, 2009)

Profitability
96.2%

An occupancy rate of 96.2 percent

5.2%

Net operating income (NOI) yield* of 5.2 percent¥14,587

Distribution per unit of ¥14,587 for the 6th Period

Outstanding Portfolio¥140,001 million

Portfolio of 44 superior properties with a totalacquisition price of ¥140,001 million

189,635.68m2/
4,256 units

4,256 units with a total rentable area of 189,635.68m2

92.2%

92.2 percent of portfolio located in the 23 wards of Tokyo

Financial Stability
A1**, AA, A+
55.2%

Rated A1** by Moody’s; AA by Rating and Investment Information;
and A+ (Long-term) and A-1 (Short-term) by Standard & Poor’s
LTV (Loan-to-Value) ratio of 55.2 percent, long-term fixedratio of 64.2 percent* Weighted average of annual NOI yield on the acquisition value of each property.
** On April 21, 2009, Moody’s Investors Service, Inc. announced that it had lowered NAF’s rating to A2.

2

Nippon Accommodations Fund Inc.

Real Estate for Living Accommodations

Accommodation assets
Senior residences

Corporate
housing/
Dormitories/
Student
apartments

Houses built for retail saleServiced apartments

HotelsService provided

High

Rentalapartments

Low
Short

Length of time/stayLong

Real estate for living accommodations is classified in relation to two axes,“length of time/stay” and “service provided.” Accommodation assets are defined as rental apartments,
corporate housing, dormitories/student apartments, serviced apartments and senior residences.

NAF’s Two Core Strategies
1. Investment in Accommodation Assets
Accommodation assets: newly developed residential properties created in response toongoing social and lifestyle changes
Objective: to maximize the value of accommodation assets by providing accommodations
that satisfy diverse tenant needs

2. Utilization of the Mitsui Fudosan Group
Full and active use of the Mitsui Fudosan Group’s value chain from planning anddevelopment to management and operation
Access to investment opportunities through Mitsui Fudosan’s properties and its Group’s
extensive real estate information network

NAF Report September 2008 – February 20093

To Our Stakeholders

During the six months ended February 28, 2009 (the“6th Period”), Nippon Accommodations Fund Inc.
(“NAF”) made maximum use of the integrated value
chain of Mitsui Fudosan Group companies to manage
its portfolio with an emphasis on stability. As aresult, NAF generated stable revenues.

Nobuyuki Nakai
Executive Director of Nippon Accommodations Fund Inc.
President and CEO of Mitsui Fudosan Accommodations Fund Management Co., Ltd.

Market Environment and 6th Period Performance
During the 6th Period, the operating environment remained challenging in the J-REIT market due toturmoil in global financial markets caused by the U.S. subprime loan crisis.
However, in the residential rental market, although the impact of the economic downturn was apparent
at certain high-rent properties, demand remained stable in the 23 wards of Tokyo due to factors including
the ongoing population influx from other areas and the increasing number of single and two-personhouseholds. The same factors are projected to drive the development of the residential rental markets inJapan’s major regional cities. Furthermore, the overall stock of rental housing did not increase, due in partto the demolition of aging properties. In addition, the supply of rental housing that features outstanding
location, management and facilities is still limited, and as a result, occupancy rates and rents have been
rising moderately at such highly competitive properties. In the markets for real estate trading andinvestment, factors including changes in the fund procurement environment and the economic downturn
reduced competition for acquisitions from real estate funds and other institutions, and transaction volume
decreased.
In this environment, NAF acquired no new properties during the 6th Period, and as of February 28,
2009 its portfolio consisted of 44 properties valued at ¥140,001 million on an acquisition price basis. The
overall occupancy rate was 96.2 percent as of February 28, 2009, compared with 96.0 percent at the endof the previous period.
As a result, total revenues were ¥4,508 million, compared with ¥4,498 million for the previous period.
Operating income was ¥2,248 million, compared with ¥2,212 million for the previous period. Net income
was ¥1,655 million, compared with ¥1,641 million for the previous period. Distribution per unit totaled¥14,587, compared with ¥14,461 for the previous period, and exceeded the forecast announced alongwith results for the 5th Period.

4

Nippon Accommodations Fund Inc.

6th Period (Actual)

7th Period (Forecast)(Ended February 28, 2009)(Ending August 31, 2009)

Total revenues¥4,508 million¥4,555 million

Operating income¥2,248 million¥2,226 million

Net income¥1,655 million¥1,577 million¥14,587¥13,900

Acquisition price basis¥140,001 million¥140,001 million

Number of properties

44

44

Distribution per unit (Yen)
Assets under management

6th Period Initiatives
During the 6th Period, Mitsui Fudosan Housing Lease Co., Ltd., the master property managementcompany (the “Master PM”), collaborated with Mitsui Fudosan Accomodations Fund Management Co., Ltd.
(“MFAFM”), NAF’s asset management company, to effectively manage and operate properties held by NAF
in accordance with regional characteristics and the individual features of each property. Initiatives included
systematic, responsive portfolio management and operation by the Master PM; tenant recruiting activities
suited to the circumstances of individual properties; reduction of management costs; interior renovations at
Okawabata Apartment Communities, one of NAF’s principle properties; and the provision of tenant services
that correspond to the needs expressed in resident surveys at each property. As a result of the leasing
activities discussed above, the occupancy rate for NAF’s overall portfolio as of February 28, 2009 remained
at a high level of 96.2 percent.
During the 6th Period, NAF refinanced while monitoring market trends and interest rates. As a result,interest-bearing debt as of February 28, 2009 was unchanged from August 31, 2008 at ¥81,000 million,
and NAF’s loan-to-value (LTV) ratio stood at 55.2 percent. NAF secured long-term, fixed-rate loans, which
accounted for 64.2 percent of NAF’s interest-bearing debt as of February 28, 2009.

Future Initiatives
NAF manages its high-quality portfolio with an emphasis on stability, and works to achieve steadyexternal and internal growth.
Our strategy for external growth entails steady expansion of our portfolio through the acquisition ofproperties in the Park Axis and the Park Cube series. We are currently structuring our portfolio with agreater weighting of single and compact apartments, from which we can expect a high occupancy rate.

NAF Report September 2008 – February 20095

To Our Stakeholders

During the 6th Period, our strategy for internal growth included strengthening the brand penetration ofboth the Park Axis and Park Cube series to heighten their recognition in the real estate rental market.
Moreover, with an optimized operational and management structure that makes use of the expertise ofeach company in the Mitsui Fudosan Group, NAF uses additional strategic investment to maintain asset
value over the long term in order to maintain or raise its rents and occupancy rate.
Regarding financial strategy, while our upper limit for the LTV ratio is 60 percent, we expect tooperate with an LTV ratio in the 40 to 50 percent range. We will continue to implement a strategy thatemphasizes long-term, fixed-rate funding in response to the risk of rising interest rates and refinancing
risk. We will give due consideration to the issuance of new units after examining market trends anddistribution levels and taking into consideration the demand for funds for the purpose of property
acquisition as well as our financial position.
NAF is committed to earning the trust of unitholders and all stakeholders, and is therefore
strengthening corporate governance while working toward more thoroughgoing legal compliance.

OutlookDuring the 7th Period, we expect the initiatives discussed above to result in total revenues of ¥4,555
million, operating income of ¥2,226 million, net income of ¥1,577 million, and distribution per unit of¥13,900. This forecast is valid as of April 2009 and assumes that NAF will not acquire or exchange any
additional properties and will not issue new units during the 7th Period.
NAF will continue to invest in accommodation assets and will make use of the Mitsui Fudosan Group’s
pipeline to expand its portfolio by acquiring high-quality properties. We also aim to maximize unitholder
value through effective management and brand strategies that enhance competitiveness.
June 2009

Nobuyuki Nakai
Executive Director of Nippon Accommodations Fund Inc.
President and CEO of Mitsui Fudosan Accommodations Fund Management Co., Ltd.

6

Nippon Accommodations Fund Inc.

Clear Management Objectives,
Consistent Returns
NAF aims to maximize unitholder value by generating solid
returns through steady external and internal growth.

Solid
DemandEfficientOperations

An Effective
Value Chain

NAF selectively invests in assets withthe location, scale and facilities that will
maintain NAF’s position of strengthand competitive power in the real estateleasing market over the medium-to-longterm. NAF aims for stable growth in the
future through steady acquisition ofproperties.

Based on an optimized management
and operating structure and measures
to maintain or raise asset value, NAF
will work toward steady internal growthby increasing rental revenues andreducing operating expenses.

NAF will secure solid returns throughthe full and active use of the Mitsui
Fudosan Group’s value chain fromplanning and development tomanagement and operation.

page 8page 10page 12

Clear Management Objectives, Consistent Returns

Solid Demand
The Park Axis series, developed by the Mitsui Fudosan Group, is the core of
NAF’s portfolio. NAF aims to maintain stable portfolio expansion by following
a policy of selectively investing in assets that will retain their market
superiority and competitiveness over the medium-to-long term.

Acquisitions Generate Growth in Portfolio Value
Asset Growth (Acquisition Price Basis)
200,000 (Yen in millions)

150,000

140,001

140,001
123,246
101,385

100,000

50,000108,234

August 2006:
Listed on the REIT
section of the Tokyo
Stock Exchange

38,98641,036
Okawabata
Apartment
Communities

0

Establishment March 31,
2006
Distribution per unit

¥8,871February 28, August 31, February 29, August 31, February 28,
2007
2007
2008
2008
2009

¥17,871¥12,750¥14,366¥14,461¥14,587

NAF was established in 2005 with assets under management valued

Portfolio by Area

at approximately ¥39 billion. In August 2006, NAF was listed on the(Based on acquisition price)

Tokyo Stock Exchange as the first J-REIT managing mainly residential
assets, with a value of over ¥100 billion at IPO. NAF’s external growthstrategy is centered on the Park Axis series properties that Mitsui

Greater
Tokyo
2%

Other
Major Cities
6%

Fudosan develops. NAF also maintains steady external growth byacquiring properties in the Park Cube series based on property
information from the information channels MFAFM has established. As
of February 28, 2009, NAF’s portfolio consisted of 44 properties valuedat ¥140,001 million on an acquisition price basis. Approximately 92
percent of NAF’s portfolio is located in the 23 wards of Tokyo, where theongoing population influx from other areas and strong demand for rental
housing are expected to continue in the future. NAF aims for stable
growth by selectively investing in assets that will retain their market
superiority and competitiveness over the medium-to-long term.
8

Nippon Accommodations Fund Inc.

23 wards of Tokyo92%

NAF’s Outstanding Portfolio Reflects Market Trends
Single adults and couples aged 20 to 49 make up the primary

Occupancy Rates by Category

demographic segment for tenants of single and compact
apartments. In the 23 wards of Tokyo and regional city centers,

100 (%)

factors including an increasing need to live closer to work and the95

elimination of the company housing system at many corporations
have caused demand for rental housing in this segment to expand

SingleCompact

FamilyLarge90steadily. The occupancy rate for the single and compact apartments

85

that NAF manages has been stable at a high level.

8075Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.
2008
2009

Percentage of Single and Compact Units

43.7%

72.8%

81.2%

Definition of Unit Types
Single: StudioCompact: 1BR

End of
1st Period

Time oflisting

End of
6th Period

Family: 2BR
Large: 3BR or more

Solid Relationship with Mitsui Fudosan
Park Axis Series Supply (Mitsui Fudosan)

The Park Axis series is NAF’s core asset. Taking advantageof Mitsui Fudosan’s many years of experience in residential
housing, the properties in the series are functional, safe,

3,000 (Units)

located in convenient areas and distinguished by quality
2,254

Owned by other REITs
Not yet acquired by NAF
Acquired by NAF

2,000

280

profitable Park Axis series.

1,000
84
0

31

127

28

110
84

388

2000

2001

2002

2003

2004

control from the construction stage. NAF aims to continue
expanding its portfolio based on the competitive and

803

28
639
2005

951

819

2006

2007

2008

Source: Prepared by MFAFM from Mitsui Fudosan materials and publicly available data.

NAF Report September 2008 – February 20099

Clear Management Objectives, Consistent Returns

Efficient Operations
NAF aims for a high net operating income (NOI) yield by maintaining ahigh occupancy rate and steadily reducing operating expenses. Throughcontinued cooperation with Mitsui Fudosan Housing Lease Co., Ltd. (the“Master PM”), MFAFM will implement effective operations and management, aiming for steady internal growth by increasing rental revenues
and reducing operating expenses.

Sound Management for Solid Returns
Occupancy Rates of NAF-Managed Assets andTotal J-REIT-Managed Residential Assets
100 (%)

95

90

85

80
NAF-Managed Assets
Total J-REIT-Managed Residential Assets
75
Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.

2006

2007

2008

2009

Source: “Property Data of Real Estate Investment Trusts,” The Investment Trusts Association, Japan

Since NAF’s listing on the Tokyo Stock Exchange, its portfolio has maintained a high occupancy rate,
reaching 96.2 percent at the end of the 6th Period. This is a result of the highly competitive power of
NAF’s assets together with the agile marketing of available space and quick and efficient leasing activities
conducted by MFAFM and the Master PM.

10

Nippon Accommodations Fund Inc.

Maintaining and Enhancing Competitiveness and Reducing Management Costs
The extent to which property management and administration handles annual wear and tear of rental housing assets gives rise to
substantial differences in their relative worth and competitiveness. NAF uses the expertise of companies in the Mitsui Fudosan Group to
optimize its system for property management and operation. With this as a base, NAF works to maintain and enhance competitiveness by
maintaining asset values over the long term. During the 6th Period, efforts to maintain long-term asset value included the selective
renovation of units that tenants had vacated in the sections of Okawabata Apartment Communities that NAF owns.
Moreover, NAF reviewed the adequacy of building management specifications and management and administration costs, as required, inworking to reduce operating expenses through rationalization that leverages the scale of its management and other methods. As part ofthese efforts, NAF revised its electricity rate plan and reduced Internet connection costs.

The Results of Steady, Consistent Operations
NAF conducts steady, consistent operations in cooperation

Average Rent per Tsubowith its Master PM and asset management company. Initiatives
include leasing activities based on strategies formulated inaccordance with regional characteristics, the individual features

14,000（Yen）
12,000management specifications in accordance with the individual

11,0009,000
8,000

expenditures. As a result of these initiatives, average rent per

7,000

high levels.

New Contracts

6,000
5,000
Feb.

3rd Period

5th Period

10,000competitiveness through strategic renovations and capital
unit of floor space by acquisition period has remained stable at

3rd Period

4th Period

13,000of each property and market conditions; setting property
features of each property; and maintaining and enhancing

2nd Period

Aug.

Feb.

2007

2008

4th Period

5th Period

Aug.

Feb.
2009

6th Period

Number of units(Percentage of units with increased rent)

354 units
73.4%

372 units
69.1%

483 units
57.1%

449 units
35.9%

Net increase (decrease) in rents¥829,000¥1,516,000¥563,000¥(1,940,000)¥69,102,000¥66,545,000¥82,266,000¥80,693,000

1.2%

2.3%

0.7%

(2.4)%

Total tenant rents before new contracts
ChangeTotal Including Renewals

3rd Period

4th Period

5th Period

6th Period

Number of units

654 units

856 units

1,283 units

853 units

Net increase (decrease) in rents¥876,000¥1,501,000¥571,000¥(2,103,000)¥140,254,000¥166,136,000¥222,476,000¥158,064,000

0.6%

0.9%

0.3%

(1.3)%

Total tenant rents before new contracts
ChangeNAF Report September 2008 – February 200911

Clear Management Objectives, Consistent Returns

An Effective Value Chain
The companies of the Mitsui Fudosan Group form a comprehensive
operating system that spans from planning and development to leasing,management and operation, in which the Group functions as a single
integrated value chain. NAF will secure solid returns through the fulland active use of this value chain.

Mitsui Fudosan Group Companies Form an Integrated Value Chain
Operation, Planning/
Development of Accommodation Business

MarketResearch /Analysis

Site Acquisition

Feedbackto Planning /Development

Planning and
DesignComprehensive operating
system conducted by
the Mitsui Fudosan GroupREIT Management

Management /Operation
Construction
Management /Supervision
Leasing

Property
Management

Residential Building
Maintenance12

Nippon Accommodations Fund Inc.

Initial Leasing/
Tenant BrokerageMarket Research / Analysis
Analysis of supply and demand trends using statistical data, occupancy surveys of new
properties and fixed property observation. Examination of micro market characteristics andneeds based on representative data, real estate brokers’ opinions, and historical occupancy
and rental data.

Site Acquisition
Development of site acquisition strategy based on macro market and potential demand
trends. An extensive site information database supports property development capabilities of
all types from small buildings to complexes and large development projects.

Planning and Design
Targeting of customers and development of property concepts according to purpose,
number of residents, family structure and lifestyle. Strategic planning covers specifications,
grades and tastes suitable for target demographics and concepts, as well as design, safety,
function, operation and maintenance.

Construction Management / Supervision
Management of the design and construction process using real estate development
expertise gained from tenant feedback. Quality control includes a rental apartment
construction and design checklist, and frequent on-site meetings and checks by professionals
in construction, structures and facilities.

Leasing
The leasing process includes individual plan evaluation; discussions on living
environment, competitive landscape and other conditions; and setting rents. Other activities
include creating a framework for conveying product appeal, using leasing specialists andmanaging a leasing agency network.

Management / Operation
Working to understand tenant needs, and using the feedback obtained in reinvestment
and development. The decision to reinvest in renewal and renovation is based on appropriate
investment return analysis. Value-added services take advantage of economies of scale.

NAF Report September 2008 – February 200913

Housing Planned and Designed for Tenant Appeal
The planning and design of rental housing involves the creation ofresidential space that responds to the needs and desires arising fromchanges in people’s lifestyles and the composition of households.
Specifically, it takes numerous factors into consideration, ranging fromdetailed design targets based on use and the number of residents,
specifications that meet the design targets, and quality planning todesign, safety, functionality, management and operation.
The Park Axis series of properties accounts for a large percentage of
NAF’s portfolio. Mitsui Fudosan Co., Ltd. plans and designs theseproperties, which consistently maintain high occupancy rates andprofitability for several reasons. One is the residential development
expertise of Mitsui Fudosan, which has been providing outstanding
residential space for more than 40 years with a strong commitment toputting tenant satisfaction first. Another is the ability of the Master PM
to optimize the planning and design of rental housing by incorporating
the feedback it obtains through rental housing management andoperation under its catchphrase of “Resident First.” Moreover, thisapproach to planning and design is also used in selecting properties for
the Park Cube series, for which construction is handled by otherdevelopers. Thus planning and design that employ the Mitsui FudosanGroup value chain generate stable revenues.

Meeting the Specific Requirements of Urban Lifestyles
NAF invests in rental housing, primarily in the 23 wards of Tokyo.
Housing in this area requires planning and design that respond to thedecrease in household size as a result of lifestyle changes and to the broad
range of tenant life stages from young people to seniors. For example, after
listening to feedback from tenants who said they want to keep a pet, NAF
introduced condominiums that allow pets. Moreover, NAF has installedsurveillance cameras, window sensors and other security equipment inresponse to tenant desires for safety and peace of mind. Other initiatives
include the incorporation of security considerations in property design andthe use of universal design with the goal of preventing household accidents
and other incidents in daily life.
This focus on tenant needs does not stop at interior and exterior design.
NAF designs functional spaces that meet tenant demands as their lifestyles
change. Creating properties that appeal to tenants allows NAF tocontinuously maintain the market competitiveness and value of its assets.

14

Nippon Accommodations Fund Inc.

Clear Management Objectives, Consistent Returns

Realizing long-term value
I think that each piece of information we collect throughfeedback during property management and administration has
significant meaning in product creation. The decision to incorporate
them in the ongoing supply of new products creates assets thatmaintain their value well into the future.

Tetsuro Nakajima
Manager, Mitsui Fudosan Co., Ltd.

Planning that accommodates lifestyles
It is important that planning accommodate diversifying lifestyles
by thinking about what tenants want, such as the way they want to
use their apartment and the elements that attract them to a property.

Satoshi Ito
Mitsui Fudosan Co., Ltd.

Emphasis on the entrance and thefirst impressions it makes
We want to continuously maintain the market competitiveness of
our rental housing, so we emphasize first impressions. We focus
entrance design on what tenants first see, and also pay close
attention to issues such as landscaping around the entrance.

Aika Hirose
Mitsui Fudosan Co., Ltd.

Designs that never become dull
We try to propose designs for the Park Axis series that will remaininteresting for a hundred years and never become dull. A focus on
design as well as functionality and durability differentiate rental
housing design at Mitsui Fudosan.

Eki Norimitsu
Architect

NAF Report September 2008 – February 200915

NAF Portfolio(As of February 28, 2009. Numbers in red for each property refer to the Portfolio Summary on pages 22-23.)

Portfolio Map

Adachi-ku
Itabashi-ku

Kita-ku
Nerima-ku

Katsushika-ku

Arakawa-ku

Toshima-ku

10
Bunkyo-ku 15

Taito-ku

8
6

Sumida-ku

Shinjuku-ku

16

17

Chuo-ku

12

Koto-ku1
95 Minato-ku 14
Setagaya-ku

13

7 .5 k m

Imperial
Palace22

5. 0 k m

Chiyoda-ku

3

Shibuya-ku

Edogawa-ku

21
2 .5 k m

Suginami-ku

23

18

1 0. 0 k m

Nakano-ku

11
Meguro-ku

7

2

Tokyo BayTokyo
Shinagawa-ku

Ota-kuInvestment Criteria➤ Area• 23 Wards of Tokyo (80% or more)• Greater Tokyo(Tokyo (other than the 23 wards),
Kanagawa, Chiba, Saitama)• Other Major Cities(Sapporo, Sendai, Nagoya, Kyoto,
Osaka, Kobe, Hiroshima, Fukuoka)➤ Investment Size
¥1 billion or more per property (in principle)➤ Ownership Interest
Fee simple (in principle)➤ Building Structure
Reinforced concrete or steel reinforced
concrete (no wooden structures)

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Nippon Accommodations Fund Inc.

Okawabata (River Point Tower)
Okawabata (Park Side Wings)
Okawabata (Pier West House)
Park Axis Gakugei Daigaku
Park Axis Ichigaya
Park Axis Shibuya Jinnan
Park Axis Aoyama Kotto DoriPark Axis Kagurazaka Stage
Park Axis Shirokanedai
Park Axis Bunkyo Stage
Park Axis Tsukishima
Park Axis Otsuka
Park Axis Minami Azabu
Park Axis Shibuya
Park Axis Nihonbashi Stage
Park Axis Hamamatsucho
Park Axis Hongo no Mori
Park Axis Tameike Sanno
Park Axis Roppongi Hinokicho Koen
Park Axis Ochanomizu Stage
Park Axis Okachimachi
Park Cube Hongo
Park Cube Kanda

Park Cube Ichigaya
Park Cube Asakusa Tawaramachi
Park Cube Ueno
Park Cube Keio Hachioji
Park Cube Keio Hachioji II
Park Axis Meieki Minami
Park Cube Ikebukuro Kanamecho
Park Axis Meguro Honcho
Park Axis Shin Itabashi
Park Axis Akihabara
Park Axis Toyocho
Park Axis Takinogawa
Park Axis Asakusabashi
Park Axis Marunouchi
Park Axis Ropponmatsu
Park Axis Hakataeki Minami
Park Axis Nihonbashi Hamacho
Park Cube Yoyogi Tomigaya
Park Axis Nishi Funabashi
Park Axis Monzen Nakacho
Park Cube Itabashi Honcho
Park Cube Gakugei Daigaku
Park Cube Oimachi

A Portfolio Mainly Composed of Large-Scale Properties in the 23 Wards of Tokyo
Portfolio by Area

Portfolio by Acquisition Price

Portfolio by Property Age(Based on acquisition price)

Greater Tokyo: 2%

Tokyo Wards
Other than
3 Central
Wards: 45%

Other Major Cities: 6%

23 Wards ofTokyo: 92%

3 Central
Wards
of Tokyo: 47%

Less than 1 year: 4%
Less than
2 years: 12%

More than Less than
¥10 billion: ¥2 billion:25%
21%(1 property) (23 properties)¥5 – ¥10 billion:
20% (4 properties)

92% of portfolio is locatedin the 23 wards of Tokyo[

More than
5 years: 25%
Less than
3 years: 13%¥2 – ¥5 billion:
34% (16 properties)

Less than
5 years:
46%

Average ¥3.2 billion
per property

Average 6.6 years

Approx. ¥2.6 billion per property,
excluding the Okawabata
Apartment Communities

Approx. 3.1 years,
excluding the Okawabata
Apartment Communities] []A Balanced Mix of Properties Centered on Single and Compact Units
Portfolio by Category

Portfolio by Monthly Rent
More than¥500,000: 1%¥300,000 –¥500,000: 7%

Large: 6%

Family: 13%

More than80m2: 6%¥200,000 –¥300,000:20%

Single: 39%¥150,000 –¥200,000:
20%

Compact: 42%[

Portfolio by Unit Area

Less than¥100,000:
17%60m2 –
80m2: 12%

Less than
30m2: 30%50m2 –
60m2: 14%¥100,000 –¥150,000: 35%

40m2 –
50m2: 15%30m2 –
40m2: 23%

Percentage of Single andCompact Units: 81%

Average ¥171 thousand per unit

Average 44.3m2 per unit

Approx. 92%,
excluding the Okawabata
Apartment Communities

Approx. ¥149 thousand per unit,
excluding the Okawabata
Apartment Communities

Approx. 39.0m2 per unit,
excluding the Okawabata
Apartment Communities

]

[

]

[

]

Notes: 1. 3 Central Wards of Tokyo includes Chiyoda, Chuo and Minato wards; Greater Tokyo includes Tokyo (other than the 23 wards), Kanagawa, Chiba and Saitama; Other Major Cities
includes Sapporo, Sendai, Nagoya, Kyoto, Osaka, Kobe, Hiroshima and Fukuoka.
2. Percentages for Regional Allocation, Portfolio by Acquisition Price and Portfolio by Property Age are based on acquisition price. Average property age has been calculated using aweighted average based on acquisition price.
3. Percentages for Portfolio by Category, Portfolio by Monthly Rent and Portfolio by Unit Area are unit-based, excluding retail units.

NAF Report September 2008 – February 200917

(Numbers in red for each property refer to the Portfolio Summary on pages 22-23.)

Property Portfolio① River Point Tower② Park Side Wings③ Pier West House

Park Axis Ichigaya

Okawabata Apartment Communities

Park Axis Gakugei Daigaku

18

Nippon Accommodations Fund Inc.

Park Cube Itabashi Honcho

Park Axis Shin Itabashi

Park Axis Kagurazaka Stage

Park Cube Gakugei Daigaku

NAF Portfolio

Park Axis Takinogawa

Park Axis Shibuya

Park Axis Nihonbashi Hamacho

Park Axis Hongo no Mori

Park Axis Hamamatsucho

Park Axis Meieki Minami

Park Axis Asakusabashi

Park Axis Nishi Funabashi

Park Axis Shirokanedai

Park Axis Shibuya Jinnan

NAF Report September 2008 – February 200919

(Numbers in red for each property refer to the Portfolio Summary on pages 22-23.)

Park Axis Tsukishima

Park Axis Ochanomizu Stage

Park Axis Otsuka

Park Cube Oimachi

Park Cube Ichigaya

Park Axis Aoyama Kotto Dori

20

Nippon Accommodations Fund Inc.

Park Axis Bunkyo Stage

Park Axis Roppongi Hinokicho Koen

Park Cube Asakusa Tawaramachi

NAF Portfolio

Property Portfolio

Park Axis Minami Azabu

Park Axis Ropponmatsu
Park Axis Nihonbashi Stage

Park Axis Marunouchi

Park Axis Okachimachi

Park Axis Meguro Honcho

Park Axis Toyocho

Park Cube Yoyogi Tomigaya

Park Axis Akihabara

Park Axis Monzen Nakacho

Park Cube Ikebukuro Kanamecho

NAF Report September 2008 – February 200921

Property Portfolio

Portfolio Summary
No. Name

Park Cube Keio Hachioji

Park Cube Keio Hachioji II

Park Cube Ueno

Park Cube Hongo

22

Nippon Accommodations Fund Inc.

Park Axis Hakataeki Minami

Park Cube Kanda

Park Axis Tameike Sanno

Okawabata Apartment Communities
River Point Tower
Park Side Wings
Pier West House
Park Axis Gakugei Daigaku
Park Axis Ichigaya
Park Axis Shibuya Jinnan
Park Axis Aoyama Kotto DoriPark Axis Kagurazaka Stage
Park Axis Shirokanedai
Park Axis Bunkyo Stage
Park Axis Tsukishima
Park Axis Otsuka
Park Axis Minami Azabu
Park Axis Shibuya
Park Axis Nihonbashi Stage
Park Axis Hamamatsucho
Park Axis Hongo no Mori
Park Axis Tameike Sanno
Park Axis Roppongi Hinokicho Koen
Park Axis Ochanomizu Stage
Park Axis Okachimachi
Park Cube Hongo
Park Cube Kanda
Park Cube Ichigaya
Park Cube Asakusa Tawaramachi
Park Cube Ueno
Park Cube Ikebukuro Kanamecho
Park Axis Meguro Honcho
Park Axis Shin Itabashi
Park Axis Akihabara
Park Axis Toyocho
Park Axis Takinogawa
Park Axis Asakusabashi
Park Axis Nihonbashi Hamacho
Park Cube Yoyogi Tomigaya
Park Axis Monzen Nakacho
Park Cube Itabashi Honcho
Park Cube Gakugei Daigaku
Park Cube Oimachi
Tokyo 23 Wards Total
Park Cube Keio Hachioji
Park Cube Keio Hachioji II
Park Axis Nishi Funabashi
Greater Tokyo Total (Note 3)
Park Axis Meieki Minami
Park Axis Marunouchi
Park Axis Ropponmatsu
Park Axis Hakataeki Minami
Other Major Cities Total
Grand Total

NAF Portfolio(As of February 28, 2009)

Location
Chuo-ku, Tokyo

Setagaya-ku, Tokyo
Shinjuku-ku, Tokyo
Shibuya-ku, Tokyo
Minato-ku, Tokyo
Shinjuku-ku, Tokyo
Minato-ku, Tokyo
Bunkyo-ku, Tokyo
Chuo-ku, Tokyo
Toshima-ku, Tokyo
Minato-ku, Tokyo
Shibuya-ku, Tokyo
Chuo-ku, Tokyo
Minato-ku, Tokyo
Bunkyo-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Bunkyo-ku, Tokyo
Taito-ku, Tokyo
Bunkyo-ku, Tokyo
Chiyoda-ku, Tokyo
Shinjuku-ku, Tokyo
Taito-ku, Tokyo
Taito-ku, Tokyo
Toshima-ku, Tokyo
Meguro-ku, Tokyo
Itabashi-ku, Tokyo
Chiyoda-ku, Tokyo
Koto-ku, Tokyo
Kita-ku, Tokyo
Taito-ku, Tokyo
Chuo-ku, Tokyo
Shibuya-ku, Tokyo
Koto-ku, Tokyo
Itabashi-ku, Tokyo
Meguro-ku, Tokyo
Shinagawa-ku, Tokyo
Hachioji-shi, Tokyo
Hachioji-shi, Tokyo
Funabashi-shi, Chiba
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka

Acquisition Price (Note 1)

Portfolio Share

Rentable Area

(Yen in millions)(%)(sq. m.)29,69621.2

43,812.41

1,760
2,570
3,230
1,730
1,400
5,140
4,440
930
1,655
3,939
1,283
7,558
2,025
2,910
2,860
2,170
9,710
1,070
1,760
2,454
1,794
2,508
2,233
1,609
1,810
3,430
1,200
3,950
1,820
2,717
5,540
1,975
1,700
4,170
910
1,440
129,095
991
1,130
1,020
3,141
2,440
1,920
1,515
1,890
7,765
140,001

1.3
1.8
2.3
1.2
1.0
3.7
3.2
0.7
1.2
2.8
0.9
5.4
1.4
2.1
2.0
1.5
6.9
0.8
1.3
1.8
1.3
1.8
1.6
1.1
1.3
2.4
0.9
2.8
1.3
1.9
4.0
1.4
1.2
3.0
0.6
1.0
92.2
0.7
0.8
0.7
2.2
1.7
1.4
1.1
1.3
5.5
100.0

Notes: 1. Acquisition Price does not include acquisition-related expenses, property tax(to be capitalized) and consumption tax (not refundable for residential properties).
Amounts are rounded to the nearest million.

2,437.66
3,313.33
2,766.62
1,537.24
1,891.05
4,704.44
6,078.93
1,383.99
2,606.37
3,938.14
1,094.28
10,025.40
2,426.45
3,317.94
2,710.69
2,054.46
12,025.25
1,621.73
2,160.12
3,194.59
2,127.50
4,012.68
3,041.61
1,886.82
1,884.77
4,395.99
1,346.07
5,412.40
2,924.75
3,400.78
6,999.83
1,929.10
1,886.39
5,317.07
957.88
1,511.12
164,135.85
2,814.32
3,082.32
2,074.35
7,970.99
5,565.13
3,821.75
3,473.67
4,668.29
17,528.84
189,635.68

Rentable Units

PML (Note 2)
(%)

544

64
84
75
40
59
99
154
30
52
64
20
184 Residential, 1 Retail80
86 Residential, 1 Retail
70
46
324
42
60
95
51
76
91
65
60
152
41
140
48 Residential, 1 Retail
78 Residential, 1 Retail
118
38
55
165 Residential, 1 Retail24
65
3,539 Residential, 5 Retail52
47 Residential, 1 Retail55
154 Residential, 1 Retail169
98 Residential, 1 Retail
111 Residential, 1 Retail
176 Residential, 1 Retail
554 Residential, 3 Retail4,247 Residential, 9 Retail

4.5
7.9
7.0
7.6
7.3
6.8
7.0
7.5
8.7
6.5
6.8
6.4
7.4
7.9
7.5
7.1
8.8
8.2
9.2
7.2
6.8
8.2
8.9
6.8
8.8
7.5
8.1
8.5
7.3 East, 7.5 West
7.4
10.8
5.8
8.9
8.1
7.4
10.1
8.1
6.8
10.0
7.1
7.6
7.9
4.1
6.1
2.2
3.1
3.9 (Portfolio PML)

2. PML = Probable maximum loss
3. Greater Tokyo includes Tokyo (other than the 23 wards), Kanagawa, Chiba and Saitama.

NAF Report September 2008 – February 200923

Corporate Structure and GovernanceNippon Accommodations Fund Inc. has structured systems for compliance and risk management andoperates fairly and transparently with the aim of increasing investor value.

Real Estate Investment Trust (“REIT”) Structure
Nippon Accommodations Fund Inc. (“NAF”) is an

These guidelines may change in the future in response to changes

investment corporation established with the objective ofin the external investment environment and the status of NAF’s

investing in assets, primarily Designated Assets as defined

assets under management.

under the Investment Trust and Investment Corporation Act of

In addition, the REIT Management Company has concluded

Japan. NAF was established on October 12, 2005, with Mitsui

contracts with other companies in the Mitsui Fudosan Group to

Fudosan Accommodations Fund Management Co., Ltd. (thepromote smooth, effective management of NAF’s assets. An“REIT Management Company” or “MFAFM”) as its asset

Agreement on Provision of Real Estate Information/Advisory

management company.

Service with Mitsui Fudosan Co., Ltd. provides information

NAF has entrusted management of all of its assets to the REIT

regarding real estate owned or developed by Mitsui Fudosan’sManagement Company, which is the asset management company

Accommodations Business Division, and other management

required under the Investment Trust and Investment Corporation

advisory information. Each of (i) a Memorandum on Provision of

Act of Japan. Operating in accordance with the REIT Management

Real Estate Brokerage Information with Mitsui Fudosan Real

Agreement concluded on October 13, 2005 (as amended), theEstate Sales Co., Ltd. and (ii) an Agreement on Provision of RealREIT Management Company manages NAF’s assets according toEstate Information with Mitsui Fudosan Residential Co., Ltd.

NAF’s asset management and administration policies and theprovides access to certain real estate property information. A

asset management guidelines embodied in the internal

Basic Agreement on Property Management with Mitsui Fudosan

regulations of the REIT Management Company. The asset

Housing Lease Co., Ltd., the master property management

management guidelines take current investment conditions into

company to which NAF has entrusted property management

account and follow NAF’s basic operating principle of taking aservices of all its properties, is fundamental to NAF’s policy of

medium-to-long-term perspective in managing assets to secure

outsourcing such property management services required instable earnings and steadily increase assets under management.

managing real estate.
Independent Auditor

Asset Custodian

The Chuo Mitsui Trust andBanking Company, Limited

KPMG AZSA & Co.

Asset Custody
Agreement

Transfer Agent

The Chuo Mitsui Trust andBanking Company, Limited
General Administrative Agent(Bond Administration)

Transfer Agency
Service Agreement/
Agreement regarding
Management ofSpecial Accounts

Nippon Accommodations
Fund Inc.
(TSE 3226)

The Chuo Mitsui Trust andBanking Company, Limited

Financial Agency
Agreement

Property Information Provider

Memorandum on
Provision of Real Estate
Brokerage Information

Mitsui Real Estate
Sales Co., Ltd.

REIT

Agreement on Provisionof Real Estate Information

24

Nippon Accommodations Fund Inc.

Fiscal Administrative
Service Agreement(Tax Return Filing)

General Administrative Agent(Accounting)

HEISEIKAIKEISHA TAX Co.
General Administrative Agent(Tax Return Filing)

Zeirishi-Hojin
PricewaterhouseCoopers

REIT Management Agreement andGeneral Administrative Service Agreement
REIT Management Company

Mitsui Fudosan
Accommodations FundManagement Co., Ltd.
Agreement on Provision ofReal Estate Information/Advisory Service

Real Estate Information Provider

Mitsui Fudosan
Residential Co., Ltd.

General Administrative
Service Agreement(Accounting)

Real Estate Information/Advisory

Mitsui Fudosan Co., Ltd.

Basic Agreement
on Property
Management
Master Property
Management Company

Mitsui Fudosan
Housing Lease Co., Ltd.

Management Team

Michihiko Takabe

Yuji Yokoyama

Nobuyuki Nakai

Takeo Tomita

Hiroyuki Sodeyama(Attorney at Law)
Supervisory Director

Executive Director

Executive Director(Attorney at Law)
Supervisory Director(Certified Public Accountant,Certified Public Tax Accountant)
Supervisory Director

Corporate Structure
General Meeting of Unitholders

supervisory directors (but always equal to the number ofIn accordance with the current Articles of Incorporation,

executive directors plus at least one additional supervisory

the General Meeting of Unitholders is held within the 23

director). As of February 28, 2009, NAF had two executive

wards of Tokyo. In accordance with the Investment Trust anddirectors and three supervisory directors. NAF’s independent

Investment Corporation Act of Japan and NAF’s Articles ofauditor is KPMG AZSA & Co.

Incorporation, NAF convenes a General Meeting of

NAF’s executive directors are responsible for business

Unitholders. The fourth General Meeting of Unitholders

execution. In addition, they have authority for all judicial andconvened on May 22, 2009. The General Meeting ofextrajudicial proceedings related to the operations

Unitholders adopts or vetoes ordinary resolutions on the basisof NAF.

of a simple majority of the voting rights of unitholders inattendance. Decisions on substantive resolutions such as

Supervisory directors are responsible for supervisingbusiness execution by the executive directors.

changes in the Articles of Incorporation require the

The Board of Directors acts in accordance with theattendance of unitholders holding at least a simple majority ofInvestment Trust and Investment Corporation Act of Japan andtotal units issued and outstanding, and a vote of two-thirds

NAF’s Articles of Incorporation and other internal rules inmajority of the voting rights of such unitholders. The asset

exercising their responsibility to supervise the performance ofmanagement policies and standards are stipulated by NAF’s

the executive directors. In accordance with the current Articles

Articles of Incorporation.

of Incorporation, the Board of Directors passes or vetoes
resolutions on the basis of a simple majority of executive andExecutive Directors, Supervisory Directors,
Independent Auditor and the Board of Directors
NAF’s Articles of Incorporation stipulate that NAF musthave one or more executive directors, and two or more

supervisory directors on the Board who are in attendance andare able to vote. Executive and supervisory directors having
special interest in a resolution are prohibited from participatingin related decisions.

NAF Report September 2008 – February 200925

The independent auditors are elected at the Generalunlawful acts or material violations of laws, regulations or

Meeting of Unitholders. They audit financial and accounting

NAF’s Articles of Incorporation that executive directors may

documents including NAF’s financial statements. In addition,commit in the course of their duties. The independent auditors

they are charged with reporting to supervisory directors any

also perform other duties as required by laws and regulations.

Compliance Initiatives

Corporate Governance Structure of MFAFM
General Meeting of Stockholders

The REIT Management Company, MFAFM, assumes full
responsibility for compliance in order to structure an

Auditorappropriate asset management system for NAF. A Chief
Board of Directors

Compliance Officer (CCO) of MFAFM has been appointed tosupervise compliance with laws, regulations and internal rules

Compliance Committee

on the part of the REIT Management Company.

CCO
CEO

The CCO is responsible for internal audits at the REITManagement Company. The Chief Executive Officer (CEO) may

Investment Committee

also appoint other employees of MFAFM to participate asneeded in internal audits, based on the recommendations of
the CCO.

Investment
Division

Financial
DivisionCIO

CFO

MFAFM’s entire organization and all personnel within it are
subject to internal audits. As a rule, internal audits are
conducted on a regular basis in accordance with the compliance

Investment,
Research &Strategy Team

Asset
Management
Team

FinancialTeam

Corporate
Operation
Team

program, but the CEO may initiate extraordinary audits.

Investment Strategy and the Process for Acquiring and Selling Properties
The REIT Management Company acts in accordance withA diagram of the investment policy of the asset

NAF’s Articles of Incorporation in formulating and amending themanagement guidelines and the process for acquiring andasset management guidelines that determine investment policies

selling specific assets under management follows on page 27.

and internal rules. In addition, it makes decisions regarding theacquisition and sale of specific assets under management inaccordance with the asset management guidelines.

Investment Risk Management System

26

NAF itself is responsible for complying with the

NAF’s Board of Directors convenes as needed at least

Investment Trust and Investment Corporation Act of Japan

once every three months, and resolves important matters andand related laws and regulations in managing risks. In

reports on the status of business execution in accordance withaddition, the REIT Management Company has establishedlaws, regulations and internal rules for such Board ofappropriate internal rules. In conjunction with appropriate

Directors. Independent supervisory directors supervise

organizational systems, NAF is providing education andbusiness execution. Moreover, supervisory directors can obtain

implementing other measures to enhance the culture ofas needed reports on operations and financial condition fromcompliance among officers and employees of MFAFM.

the REIT Management Company and from NAF’s asset

Nippon Accommodations Fund Inc.

Corporate Structure and Governancecustodian, The Chuo Mitsui Trust and Banking Company,

management and administration policies that comply with theLimited. Independent supervisory directors can also conduct

asset management guidelines. This annual plan andrequired investigations.

compliance with the asset management guidelines serve to

One of NAF’s executive directors has obtained approvaleliminate or minimize risk. In addition, the REIT Managementfrom the regulator in accordance with the Investment Trust

Company has established internal risk management

and Investment Corporation Act of Japan to serve concurrently

regulations and a department that focuses on managing eachas the President and CEO of the REIT Management Company,

type of risk appropriately.

or MFAFM.
The REIT Management Company formulates and revises
an annual management plan that is the blueprint for

Restrictions on Related-Party Transactions
Laws and regulations prohibit the REIT Management

With the objective of enhancing returns for NAF’s

Company from conducting specified transactions with related

unitholders, the REIT Management Company’s internal

parties. In the case of a transaction with a potential conflict ofregulations specify rules for handling related-party

interest between an entity specified under the Investment Trusttransactions. The REIT Management Company has establishedand Investment Corporation Act of Japan and its ordinances

standards and procedures for related-party transactions andand its asset management company, in principle the REIT

executes appropriate asset management for NAF by

Management Company must prepare a brief describing theeliminating conflicts of interest.

transaction and deliver it to NAF and other entities specified by
the Investment Trust and Investment Corporation Act of Japanand its ordinances.

NAF Report September 2008 – February 200927

Rental Apartment Investment Characteristics

Rental apartments have a lower earnings fluctuation risk than real estate leased for other uses. By
concentrating investment in the 23 wards of Tokyo where demand for rental housing is high anddeveloping a portfolio with high market competitiveness and asset value, NAF will stably increase earnings.

Growing Demand for Rental Apartments
Japan’s population is projected to decrease in the future,

particular, where over 90 percent of NAF’s assets under

but the number of smaller households is conversely projected

management are located, the population influx is continuing,

to increase due to the growth in single-person households andsuggesting that the number of households and population in

the trend toward nuclear families. In the 23 wards of Tokyo in

the 23 wards of Tokyo will continue to increase steadily.

Scarcity of High-Quality Rental Apartments
The principal sources of rental apartments in Japan have

In recent years, while there has been an upward trend inconventionally been individual landowners seeking to utilize their

the number of construction starts for reinforced concrete

assets effectively and public organizations, and the supply byapartments in Tokyo, the overall stock of rental apartments is

private companies has been limited. In recent years, however, thenot increasing, due in part to the demolition of aging rental

private sector has a greater influence on the supply of rental

stock including company housing. Furthermore, rental

apartments due to factors including the reorganization of theapartments generally do not compare favorably with owned

former Urban Development Corporation as the independent

houses in terms of floor space and quality of facilities andadministrative institution Urban Renaissance Agency and theother amenities. The stock of high-quality rental apartments

transformation of rental apartments into investment products

owned by J-REITs is still limited, and thus very scarce.

through the securitization of real estate.

Demand: Steady Growth of Households in Tokyo

Demand: Increasing Population Influx into Tokyo(People)Net in-migration

In-migration

Out-migration

500,000(Thousands of households)(Thousands of people)
13,500

7,000
6,000

250,000

13,0005,000
12,500

4,000

0

3,000

12,0002,000-250,000

Projected number of households
Projected population

1,000-500,000

1996

1998

2000

2002

2004

2006

2008

Source: “Households and Population in Tokyo in Accordance with the Basic Register of Residents,”
Statistics Division, Tokyo Metropolitan Government Bureau of General Affairs

28

Nippon Accommodations Fund Inc.

0

1995

2000

2005

2010

2015

2020

2025

11,50011,000Source: “Household Projections for Tokyo,” March 2006, Tokyo Metropolitan Government;
National Institute of Population and Policy ResearchRental Apartments Generate Stable Earnings
Rental apartments are generally unaffected by fluctuations

subdivided and diversified in terms of contract period andin economic conditions and asset value, and rents haverenewal and termination dates. As a result, the potential forremained stable in the past. Moreover, the risk of sudden shifts

fluctuations in earnings is also lower. For this reason, rental

in vacancy rates and lease rates is lower for rental apartments

apartments are perfectly matched with NAF’s core strategy ofthan for office buildings because apartment lease contracts are

securing stable earnings.

Common Practices in Japan’s Rental Apartment Market
Contract Validity Period

Key Money

Leases in Japan are generally two-year contracts, which can be
renewed by paying an extension fee (usually one month’s rent).

The tenant pays key money to the landlord prior to signing alease contract. It is equivalent to two months’ rent and is
not refunded.

Security Deposit
The tenant must pay a security deposit in advance to thelandlord to insure against future unpaid rent and/or damages.
Generally, it is equal to two months’ rent and is typicallyrefunded when moving out (a cleaning and/or repair fee may
be deducted prior to refund).

Commission Fee
A commission fee is paid to the leasing agent; by regulation, it
cannot exceed one month’s rent.

Guarantor/Joint Surety
A guarantor is required when signing a lease contract. The
guarantor must have an income sufficient to cover the rent if
the tenant cannot pay and/or the cost of repairs to theapartment if the tenant causes any damage.

Supply: Number of Apartment Construction Starts in Tokyo(Units)100,000

Concrete rental apartments
Wooden rental apartments
Apartments for sale

80,000Stability: Relatively Stable Rents(1989 = 100)
150
140

Offices (Tokyo)
Private rental houses(Tokyo, non-wooden, over 30m2)

130
120

60,000110
40,000100
90

20,0000801981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

Source: “Housing Construction Statistics,” Ministry of Land, Infrastructure, Transport and Tourism

70

1989

1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: “Annual Report: Consumer Price Index,” Cabinet Office, Ministry of Internal Affairs andCommunications, and “Service Price Index for the Private Sector,” Bank of JapanNAF Report September 2008 – February 200929

Management‘s Discussion and Analysis

Summary of Selected Financial Data
Yen in millions

U.S. dollars in thousands(Except per unit data or
where otherwise indicated)(Note 1)
(Except per unit data)

6th Period

5th Period

4th Period

6th Period

September 1, 2008
to February 28, 2009

March 1, 2008 to
August 31, 2008

September 1, 2007 to
February 29, 2008

September 1, 2008
to February 28, 2009

¥ 4,508
4,296
212
2,260
1,656
1,655

¥ 4,498
4,208
290
2,286
1,642
1,641

¥ 4,092
3,869
223
1,989
1,631
1,630

2,518

3,614
1,655
862
72

2,489
3,541
1,641
848
442

2,361
3,317
1,630
731
538

25,74436,94916,921
8,813
736

Total assets (c)Interest-bearing debt
Total net assets (d)146,666

146,666

129,969

81,00062,63481,00062,62064,50062,6091,499,499
828,136
640,364

Total number of common units issued (units) (e)Net assets per unit (Yen/$) (d) / (e)Distribution per unit (Yen/$) (b) / (e)Funds from operations per unit (Yen/$) (Note 3)

113,480
551,939
14,58722,184

113,480
551,813
14,461
21,929113,480
551,717
14,36620,8095,642.97
149.14226.81Return on total assets (Note 4)(Annual rate)
ROE (Note 4)(Annual rate)
LTV (Loan-to-value) ratio (Note 3)
Capital ratio (d) / (c)Payout ratio (b) / (a) (Note 5)
Number of days in period

1.1%(2.3%)
2.6%(5.3%)
55.2%
42.7%
99.9%
181

1.2%
(2.4%)
2.6%(5.2%)
55.2%
42.7%
99.9%
184

1.3%
(2.7%)
2.6%(5.2%)
49.6%
48.2%
100.0%
182

Number of investment properties (Note 6)
Total rentable area (m2)
Average occupancy rate at end of period (Note 6)

44
189,63696.2%

44189,63696.0%

37168,960
97.2%

Total revenues (Note 2)
Rental revenues
Other revenues
Operating expenses
Income before income taxes
Net income (a)Funds from operations (Note 3)
Net operating income from property leasing activities (Note 3)
Total amount of cash distribution (b)Depreciation and amortization
Capital expenditures$

46,08943,922
2,167
23,106
16,931
16,921

Notes 1. U.S. dollar amounts are translated from yen, for convenience only, at the rate of ¥97.81 = U.S.$1.00, the approximate exchange rate on February 28, 2009.
2. Total revenues do not include consumption tax.
3. Funds from operations: Net income + Depreciation and amortization – Gain on sale of investment properties
Net operating income from property leasing activities: (Revenues from property leasing – Rental expenses) + Depreciation and amortization
Funds from operations per unit: (Net income + Depreciation and amortization – Gain on sale of investment properties) ÷ Total number of units issued and outstanding at end of period
LTV ratio: Interest-bearing debt ÷ Total assets
4. Return on total assets: Income before income taxes ÷ {(Initial total assets + Total assets at end of period) ÷ 2}
ROE: Net income ÷ {(Initial net assets + Net assets at end of period) ÷ 2}
The figures in parentheses are annualized based on the number of actual days in each period.
Annual equivalent amounts for the period ended February 28, 2009: Amount for the period ÷ Actual days in the period (181) x 365 days
Annual equivalent amounts for the period ended August 31, 2008: Amount for the period ÷ Actual days in the period (184) x 365 days
Annual equivalent amounts for the period ended February 29, 2008: Amount for the period ÷ Actual days in the period (182) x 365 days
Net assets and total assets used in calculating ROE and ROA are the respective beginning-of-period and period-end averages.
5. Payout ratio figures are calculated to one decimal place only.
6. Number of investment properties means properties generally perceived to be one residential building. Average occupancy rate at end of period is the ratio of gross leased area to total rentable areaat the end of the period.

30

Nippon Accommodations Fund Inc.

Investment Environment and Operating Performance
Amid a global downturn in business conditions stemming from the crisis in financial and capital markets, Japan’s economic recession
became clear, with lower capital investment due to a decline in corporate earnings and other factors, and weak personal consumption
caused by an increasingly severe employment and income environment.
In the residential rental market, the impact of the downturn in business conditions was visible at certain high-priced properties.
Nevertheless, people continued to move from other regions into the 23 wards of Tokyo, where NAF has concentrated over 90 percent of
its portfolio investment, as well as into the centers of other major cities. The number of households also expanded because of anincrease in the number of single and two-person households. As a result of these and other factors, demand for rental housing remained
steady. In addition, rental housing that features outstanding location, management, facilities and specifications is still limited in numberin the overall market, and occupancy rates and rents remain stable at highly competitive properties.
In the real estate investment and trading market, the changes in the capital procurement environment and the economic recession
had a chilling effect on competition for acquisitions by real estate funds and other parties, leading to a decline in transaction volume.
No new properties were acquired during the 6th Period. NAF’s portfolio as of February 28, 2009 consisted of 44 properties valued at¥140,001 million on an acquisition price basis.
Mitsui Fudosan Housing Lease Co., Ltd., the master property management company (hereinafter “Master PM”), and Mistui Fudosan
Accommodations Fund Management Co., Ltd. (hereinafter ”MFAFM“), NAF’s asset management company, collaborate with the aim of
implementing effective management and operations at properties held by NAF in accordance with regional characteristics and the individual features of each property. Activities include rapid management and operations by the Master PM applying the portfolio management system, tenant recruiting suited to the circumstances of individual properties, streamlining of management cost reduction efforts,
interior renovations at Okawabata Apartment Communities, one of NAF’s principle properties, and provision of tenant services that meetvarious needs in accordance with the results of resident questionnaires covering all properties. As a result of these activities, the occupancy rate for NAF’s overall portfolio as of February 28, 2009 remained at a high level of 96.2 percent.

Overview of Results
As a result of the above, for the 6th Period, NAF recorded total revenues of ¥4,508 million, operating income of ¥2,248 million, income
before income taxes of ¥1,656 million and net income of ¥1,655 million.

NAF Report September 2008 – February 200931

Distributions to Unitholders
NAF determines the amount of cash distributions such that they exceed 90 percent of NAF’s taxable income available for dividends as
set forth in Article 67-15 of the Special Taxation Measures Law of Japan. For the 6th Period, cash distributions totaled ¥1,655,332,760, or¥14,587 per unit.
Yen in thousands, except per unit amounts

6th Period

5th Period

4th Period

September 1, 2008
to February 28, 2009

March 1, 2008
to August 31, 2008

September 1, 2007
to February 29, 2008

Retained earnings
Undistributed earnings¥1,655,345
12¥1,641,044
10¥1,630,255
1

Total cash distribution(Per unit)
Distribution of retained earnings(Per unit)
Cash distribution in excess of retained earnings(Per unit)

1,655,333
14,587
1,655,333
14,587——

1,641,034
14,461
1,641,034
14,461——

1,630,254
14,366
1,630,254
14,366——

Note: The above cash distributions were paid after the close of the period.

Changes in Assets, Liabilities and Net Assets
AssetsTotal assets as of February 28, 2009 were ¥146,666 million, basically unchanged from August 31, 2008.
Total current assets increased ¥773 million from August 31, 2008 to ¥4,655 million due to an increase in cash and cash equivalents
resulting from depreciation.
Total investment properties decreased ¥772 million from August 31, 2008 to ¥141,931 million as a result of normal depreciation, as
NAF acquired no new properties during the period and the only increase in assets was from capital expenditures of ¥72 million.

Liabilities
Interest-bearing debt as of February 28, 2009, was unchanged from August 31, 2008 at ¥81,000 million. However, ¥4,000 million of
long-term loans due within one year were transferred from long-term liabilities to current liabilities during the period. As a result, current
liabilities increased ¥4,018 million from August 31, 2008 to ¥34,422 million while long-term loans decreased ¥4,000 million to ¥38,000
million. Short-term loans remained unchanged from August 31, 2008 at ¥29,000 million.
The ratio of long-term, fixed-rate debt to total interest-bearing debt was 64.2 percent, unchanged from August 31, 2008. Excluding
long-term loans due within one year, the ratio was 59.3 percent. The loan-to-value ratio, calculated as interest-bearing debt divided bytotal assets at the end of the period, was 55.2 percent, unchanged from August 31, 2008.

Net Assets
Net assets totaled ¥62,634 million as of February 28, 2009. Unitholders’ capital was unchanged at ¥60,979 million, and retained earnings increased to ¥1,655 million from ¥1,641 million as of August 31, 2008.

32

Nippon Accommodations Fund Inc.

Management‘s Discussion and Analysis

Funding
Balance of Paid-in Capital
NAF was established on October 12, 2005 with initial paid-in capital of ¥100 million. NAF began investing activities on November
29, 2005 after ¥21,140 million was raised through private placement. As of February 28, 2009, NAF had issued 113,480 investment
units out of 2,000,000 total authorized units. NAF’s investment units were listed on the J-REIT section of the Tokyo Stock Exchange inAugust 2006 upon the completion of a public offering. As the Investment Trust and Investment Corporation Act of Japan does not contain any provision for the issue of more than one class of units, NAF’s investment units comprise the sole class of units authorized andissued by NAF.
Units outstanding
Issue date

Remarks

Increase

Paid-in capital

Balance(Units)

October 12, 2005
November 29, 2005
August 3, 2006
September 4, 2006

Initial capital (private)
Private placement
Public offering
Third party allocation200
42,28067,2003,800

Increase

Balance

Notes(Yen in millions)200
42,480109,680
113,480¥ 100
21,14037,612
2,127¥ 100
21,24058,85260,979Note 1
Note 2
Note 3Note 4

Notes 1. NAF was established with initial capital of ¥500,000 per unit.
2. Follow-on private offering at ¥500,000 per unit to raise funds for acquisition of investment properties.
3. Public offering of new units for ¥580,000 per unit (excluding underwriting fee: ¥559,700) to fund property acquisition.
4. Additional issue of new units (third party allocation) for ¥559,700 per unit undertaken pursuant to the public offering in Note 3.

Market Price of Units
High/Low (closing price) of units on the Tokyo Stock Exchange:
6th Period
September 1, 2008 to
February 28, 2009

5th Period
March 1, 2008 to
August 31, 2008

4th Period
September 1, 2007 to
February 29, 2008

3rd Period
March 1, 2007 to
August 31, 2007

2nd Period
April 1, 2006 to
February 28, 2007

(Yen)

(Yen)

(Yen)

(Yen)

(Yen)

High

¥538,000¥565,000¥762,000¥1,030,000¥1,000,000

Low

371,000

396,000

528,000

685,000

583,000

Borrowings
Borrowings by financial institution as of February 28, 2009 are shown below.
Short-term loans(Yen in millions)Interest rate
(Note 1)

Sumitomo Mitsui
Banking Corporation¥12,000

0.9%

March 19, 2009

The Hachijuni Bank, Ltd.

1,000

1.1%

April 13, 2009

Mitsubishi UFJ Trust andBanking Corporation

5,000

1.2%

April 24, 2009

The 77 Bank, Ltd.

1,000

1.1%

April 30, 2009

The Chuo Mitsui Trust andBanking Company, Limited

3,500

0.8%

May 20, 2009The Sumitomo Trust andBanking Co., Ltd.

4,500

1.4%

March 6, 2009

The Bank of Fukuoka, Ltd.

2,000

1.2%

April 16, 2009

LenderTotal short-term loans

Balance

Date of maturity(Note 2)

Repayment
methodBulletpayment

Use offunds(Note 3)

Notes

Unsecured/unguaranteed/pari passu(Note 4)
Fixed rate

¥29,000

NAF Report September 2008 – February 200933

Long-term loans
Balance

LenderInterest rate

Date ofmaturity¥ 2,000
5,000

1.2%
1.4%

November 30, 2009
November 30, 2010

3,000

1.4%

November 30, 2010

3,000

1.8%

November 30, 2012

2,000

1.5%

February 26, 2010

3,000
3,000
3,000
5,000
1,000
1,000
1,000
2,000
2,000
1,000
3,000
2,000
¥42,000¥71,000

1.6%
2.1%
2.2%
2.1%
1.8%
1.5%
1.6%
1.6%
1.6%
1.6%
1.7%
1.6%

February 28, 2011
April 11, 2012
April 11, 2013
August 6, 2013
April 12, 2010
September 14, 2012
April 19, 2011
October 12, 2011
April 19, 2011
April 19, 2011
October 12, 2012
October 31, 2012

(Yen in millions)

Sumitomo Mitsui Banking
Corporation
The Chuo Mitsui Trust andBanking Company, Limited
The Sumitomo Trust andBanking Co., Ltd.
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Nippon Life Insurance Company
Development Bank of Japan Inc.
The Hachijuni Bank, Ltd.
Mizuho Corporate Bank, Ltd.
The Chugoku Bank, Limited
Shinsei Bank, Limited
Shinkin Central Bank
The Bank of Fukuoka, Ltd.
Total long-term loans
Total borrowings

Repayment
methodBulletpayment

Use offunds(Note 3)

Notes

Unsecured/unguaranteed/pari passu(Note 4)
Fixed rate

Notes 1. The interest rate is presented by loan from each lending institution and is rounded to the nearest tenth. The weighted average interest rate is presented for the outstanding balance of short-term borrowings if the institution has provided more than one short-term loan.
2. The earliest maturity of short-term borrowings is presented if the institution has provided more than one short-term loan.
3. Use of the proceeds of debt financing included purchase of property or real estate trust beneficiary interests, refinancing of other borrowings, and operating expenses.
4. The loan agreements between NAF and each financial institution stipulate that the above borrowings from all financial institutions rank pari passu to each other.
5. The expected annual maturities of long-term borrowings within five years of the balance sheet date are as follows.
(Yen in millions)

Amount1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years¥9,000¥9,000¥12,000¥8,000

Bonds
Issue

Issue date

No. 1 unsecured November 15,
bonds
2007
Total

Balance as ofFebruary 28, 2009
(Yen in millions)

CouponMaturitydate

Redemption

Use ofproceeds

Notes¥10,000

1.7%

November 14,
2014

Bulletpayment

Note 1

Note 2¥10,000

Notes 1. Use of funds includes repayment of borrowings.
2. This bond is only issued to rank pari passu with other bonds issued.

34

Nippon Accommodations Fund Inc.

Management‘s Discussion and Analysis

Capital Expenditures
1. Planned
NAF is planning the following capital expenditures for the renovation of its properties. The amounts below include repairs and maintenancecosts that will be expensed as incurred. Moreover, in addition to a steady program of expenditures for construction, repair and renovationof facilities, a program of renewal construction is being implemented in order to increase competitive power in the market as well as toincrease the level of tenant satisfaction.
Estimated amounts
Name of property

Objective

Estimated duration

Total amounts

Payment for thecurrent period(September 1, 2008
to February 28, 2009)

Cumulative
amount paid

(Yen in millions)Okawabata
Apartment
Communities

Renovation of common use areas(emergency lighting, water
pump, etc.)

From March 2009
to August 2009

¥45

—

—

Expansion of bicycle parking lot,
replacement of bicycle rack

From March 2009
to August 2009

25

—

—

Renovation of disasterprevention equipment

From July 2009
to July 2010

71

—

—

2. Capital Expenditures for the Current Period
The following table sets forth the capital expenditures for the current period. NAF posted ¥72 million in capital expenditures together
with ¥127 million for repairs and maintenance expenses.
Name of property

Objective

Expenditure

Period(Yen in millions)Okawabata Apartment
Communities

Renewal construction in rentable areas, etc.

From September 2008
to February 2009¥56

Other Properties

Renovation of furnishings incommon use areas, etc., and other construction

From September 2008
to February 2009

16

Total

¥72

3. Cash Reserve for Capital Improvements
NAF accumulates a cash reserve from cash flows to prepare for large-scale mid-term to long-term capital improvements and repairs andmaintenance that will be conducted in accordance with NAF’s business plan for each property.
Yen in millions

Reserve balance at the beginning of the period
Amount accumulated in the current period
Withdrawal from reserves in the current period
Amount carried forward

As of February 28, 2009

As of August 31, 2008

As of February 29, 2008

¥556
12
67
¥501

¥740
222
406
¥556

¥696
651
607
¥740

NAF Report September 2008 – February 200935

Management‘s Discussion and Analysis

Expenses regarding Entrustment, etc.
The following table sets forth the breakdown of entrustment fees, etc. paid by NAF.
Yen in millions

Item

Asset management fees
Asset custody fees
Agent fees (stock transfer, accounting and administrative)
Directors’ remuneration
Auditor’s fees
Other expenses
Total

6th Period

5th Period

4th Period

September 1, 2008
to February 28, 2009

March 1, 2008
to August 31, 2008

September 1, 2007
to February 29, 2008

¥324
7
22
10
12
128

¥323
6
21
10
13
108

¥301
6
27
10
13
125

¥504

¥481

¥482

Related Party Transactions(1) Transactions
None applicable(2) Fees Paid for the Period from September 1, 2008 to February 28, 2009
Description of transactions with related parties (Note 1)
Category

Total fees paid (A)(Yen in millions)

Amount ofpayment (B)Paid to

B/A(Note 2)

(Yen in millions)

Property management fees

¥295

Mitsui Fudosan Housing Lease Co., Ltd.

¥295

100.0%

Building management fees

144

Mitsui Fudosan Housing Lease Co., Ltd.

144

100.0%RESIDENT FIRST CO., LTD.

15

18.1%

Mitsui Rehouse Tokyo Co., Ltd.

1

1.7%

Mitsui Home Estate Co., Ltd.

0

0.6%

Kyushu Mitsui Real Estate Sales Co., Ltd.

0

0.2%

Nagoya Rehouse Co., Ltd.

0

0.1%

Leasing related service fees83(3) Other Payments to Related Parties
Paid toMitsui Home Remodeling Co., Ltd.
Mitsui Fudosan Housing Service Co., Ltd.

Amount of payment(Yen in millions)

Item

¥50

Repair and maintenance costs

1

Repair and maintenance costs

Notes 1. “Related parties” means parties defined in the government ordinance regarding the Investment Trust and Investment Corporation Act of Japan, principally, parties
related to an asset management company.
2. Figures indicate percentages of total price.

36

Nippon Accommodations Fund Inc.

Financial Statements

Balance Sheets
Nippon Accommodations Fund Inc.
As of February 28, 2009 and August 31, 2008

U.S. dollars in thousands
Yen in millions(Note 1)

6th Period

5th Period

6th Period

As of February 28, 2009

As of August 31, 2008

As of February 28, 2009

¥ 4,000
628
27
4,655

¥ 3,189
658
35
3,882

96,01596,006

981,648

49,941(4,025)
141,93180¥146,666

49,860(3,163)
142,703
81¥146,666

510,592(41,151)
1,451,089
818$1,499,499¥ 29,000
4,000
432
708
282
34,422¥ 29,000
—
434
710
259
30,403$ 296,493
40,896
4,417
7,239
2,883
351,927

38,00010,0001,610
49,610¥ 84,032

42,00010,0001,643
53,643¥ 84,046

388,508
102,239
16,460507,208$ 859,135

Total Net Assets

60,9791,655¥ 62,634

60,9791,641¥ 62,620

623,443
16,921$ 640,364

Total Liabilities and Net Assets¥146,666¥146,666$1,499,499

AssetsCurrent assets:
Cash and cash equivalents
Rent receivables
Consumption tax receivables and other current assets
Total current assets
Investment properties (Note 3):
Land including trust accounts
Depreciable property andimprovements including trust accounts
Accumulated depreciation
Total investment properties
Other assets
Total Assets$

40,8966,421
276
47,592

Liabilities and Net Assets
Liabilities
Current liabilities:
Short-term loans (Note 4)Long-term loans due within one year (Note 4)
Accounts payable
Rent received in advanceAccrued expenses and other liabilities
Total current liabilities
Long-term liabilities:
Long-term loans (Note 4)
Bonds (Note 4)
Tenant security deposits
Total long-term liabilities
Total Liabilities
Net Assets
Unitholders’ capital (Note 5)
Retained earnings

The accompanying notes to financial statements are an integral part of these balance sheets.

NAF Report September 2008 – February 200937

Statements of Income
Nippon Accommodations Fund Inc.
September 1, 2008 to February 28, 2009, March 1, 2008 to August 31, 2008 and September 1, 2007 to February 29, 2008

U.S. dollars in thousands
Yen in millions

Revenues (Note 6):
RentalOther revenues related to property leasing
Total Revenues
Operating Expenses (Note 6):
Property management fees
Real estate taxes and insurance
Repairs and maintenance
Other rental expenses
Depreciation and amortization
Asset management fees
Other expenses
Total Operating Expenses
Operating Income
Interest and other income
Interest expense
Other expenses
Income before Income Taxes
Current and deferred income taxes (Note 7)
Net Income

6th Period

5th Period

4th Period

6th Period

September 1, 2008
to February 28, 2009

March 1, 2008 to
August 31, 2008

September 1, 2007 to
February 29, 2008

September 1, 2008
to February 28, 2009

¥4,296212
4,508¥4,208290
4,498¥3,869223
4,092$43,9222,167
46,089

458
148
127
162
862
324
179
2,260
2,248
4
(592)
(4)
1,656
1
¥1,655

499
148
133
177
848
323
158
2,286
2,212
19
(583)
(6)
1,642
1
¥1,641

425
115
91
145
731
301
181
1,989
2,103
6
(474)
(4)
1,631
1
¥1,630

4,683
1,513
1,298
1,656
8,813
3,313
1,830
23,10622,98341(6,053)(41)
16,931
10$16,921

The accompanying notes to financial statements are an integral part of these statements.

38

Nippon Accommodations Fund Inc.

(Note 1)

Financial Statements

Statements of Changes in Net Assets
Nippon Accommodations Fund Inc.
For the period from September 1, 2007 to February 28, 2009

Yen in millions

Balance as of August 31, 2007
Cash distribution declared
Net income
Balance as of February 29, 2008
Cash distribution declared
Net income
Balance as of August 31, 2008
Cash distribution declared
Net income
Balance as of February 28, 2009

Number of
Units

Unitholders’CapitalRetained
Earnings

Total

113,480¥60,979¥ 1,447¥62,426————(1,447)
1,630(1,447)
1,630

113,480

60,9791,630

62,609————(1,630)1,641(1,630)
1,641

113,480

60,9791,641

62,620————(1,641)
1,655(1,641)
1,655

113,480¥60,979¥ 1,655¥62,634

U.S. dollars in thousands (Note 1)

Balance as of August 31, 2007
Cash distribution declared
Net income
Balance as of February 29, 2008
Cash distribution declared
Net income
Balance as of August 31, 2008
Cash distribution declared
Net income
Balance as of February 28, 2009

Number of
Units

Unitholders’CapitalRetained
Earnings

Total

113,480$623,443$ 14,794$638,237————(14,794)
16,665(14,794)
16,665

113,480

623,443

16,665640,108————(16,665)
16,777(16,665)
16,777

113,480

623,443

16,777640,221————(16,777)
16,921(16,777)
16,921

113,480$623,443$ 16,921$640,364

The accompanying notes to financial statements are an integral part of these statements.

NAF Report September 2008 – February 200939

Financial Statements

Statements of Cash Flows
Nippon Accommodations Fund Inc.
September 1, 2008 to February 28, 2009, March 1, 2008 to August 31, 2008 and September 1, 2007 to February 29, 2008

U.S. dollars in thousands
Yen in millions

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Amortization of bond issue costs
Interest expense(Increase) Decrease in rent receivables
Increase (Decrease) in accounts payable
Increase (Decrease) in rents received
in advanceCash payments of interest expense(Increase) Decrease in consumption tax
refund receivable
Other, net
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchases ofinvestment properties
Proceeds from tenant security deposits
Payments for tenant security deposits
Other, net
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Proceeds from short-term loans
Repayment of short-term loans
Proceeds from long-term loans
Proceeds from bonds
Payments for bond issue costs
Payment of distribution
Net Cash Provided by (Used in) Financing Activities
Net Change in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginningof the Period
Cash and Cash Equivalents at the Endof the Period

6th Period

5th Period

4th Period

6th Period

September 1, 2008
to February 28, 2009

March 1, 2008 to
August 31, 2008

September 1, 2007 to
February 29, 2008

September 1, 2008
to February 28, 2009

¥ 1,656
862
4
592
30
(2)

¥ 1,642
848
4
583
(75)
(46)

¥ 1,631
731
3
474
(72)
59

$ 16,931
8,813
41
6,053
307
(20)

(3)
(578)

63
(556)

88
(387)

(31)
(5,909)

9
6
2,576

1
15
2,479

(9)
(4)
2,514

92
61
26,337

(90)
163
(196)
(2)
(125)

(17,782)
341
(197)
(6)
(17,644)(16,144)
351
(168)
(2)
(15,963)

(920)
1,666
(2,004)(20)(1,278)55,000(55,000)———(1,640)(1,640)811

77,100(60,600)———(1,632)
14,868(297)

53,000(56,000)
8,000
10,000(58)(1,444)
13,49849

562,315(562,315)———(16,767)(16,767)
8,292

3,189

3,486

3,437

32,604¥ 4,000¥ 3,189¥ 3,486$ 40,896

The accompanying notes to financial statements are an integral part of these statements.

40

Nippon Accommodations Fund Inc.

(Note 1)

Notes to Financial Statements
Nippon Accommodations Fund Inc.
September 1, 2008 to February 28, 2009, March 1, 2008 to August 31, 2008 and September 1, 2007 to February 29, 2008

Note 1

Organization and Basis of Presentation

Organization
Nippon Accommodations Fund Inc. (hereinafter “NAF”) was formed on October 12, 2005 as an investment corporation under theInvestment Trust and Investment Corporation Act of Japan with Mitsui Fudosan Accommodations Fund Management Co., Ltd. (hereinafter“MFAFM”) acting as a sponsor. Registration with the Kanto Local Finance Bureau of the Ministry of Finance was completed on November
11, 2005 and NAF started acquisition of properties on November 30, 2005.
NAF is an externally managed real estate fund, formed as an investment corporation. MFAFM, as NAF’s asset management company, isengaged in acquiring, managing, leasing, and renovating accommodation assets. MFAFM is a 100% subsidiary of Mitsui Fudosan Co., Ltd.
On August 3, 2006, NAF had raised approximately ¥40,000 million through an initial public offering of investment units. Those investment units are listed on the J-REIT section of the Tokyo Stock Exchange.
As of February 28, 2009, NAF had ownership or beneficiary interests in 44 properties containing approximately 189,636 square metersof rentable space. As of February 28, 2009, NAF had leased approximately 182,427 square meters to tenants. The occupancy rate for theproperties was approximately 96.2%.

Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Investment Trust andInvestment Corporation Act of Japan and the Financial Instruments and Exchange Law of Japan and its related accounting regulations, and in
conformity with accounting principles generally accepted in Japan (hereinafter “Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements have been restructured and translated into English from the financial statements of NAF preparedin accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial
Instruments and Exchange Law. Some supplementary information included in the statutory Japanese language financial statements, but notrequired for fair presentation, is not presented in the accompanying financial statements. NAF does not prepare consolidated financial statements, as NAF has no subsidiaries.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan, using theapproximate exchange rate on February 28, 2009, which was ¥97.81 to U.S. $1. The convenience translation should not be construed as representation that the Japanese yen amounts have been, or could in future be, converted into U.S. dollars at this or any other rate of exchange.

Note 2

Summary of Significant Accounting Policies

Cash and Cash Equivalents
NAF considers all highly liquid investments with original maturity of three months or less to be cash and cash equivalents.

Investment Properties
Investment properties are recorded at cost, which includes the allocated purchase price and related costs and expenses for acquisitionof the properties and the beneficiary interests of properties in trust. Property and equipment balances are depreciated using the straightline method over the estimated useful lives. The estimated useful lives of the principal investment properties (including assets held in trust)
are as follows:
Buildings and improvements

2-47 years

Structures

3-60 years

Machinery and equipment

7-45 years

Tools, furniture and fixtures

2-15 years

NAF Report September 2008 – February 200941

Costs related to the renovation, construction and improvement of properties are capitalized. Expenditures for repairs and maintenancewhich do not add to the value or prolong the useful life of a property, are expensed as incurred.

Deferred Assets
Costs for the initial public offering of units and start-up expenses were charged to income when incurred. New unit issue costs arecharged to income when incurred.
Bond issue costs are amortized over the period of the bonds under the straight-line method.

Income Taxes
Income taxes are accounted for on the basis of income for financial statement purposes. The tax effect of temporary differences
between the amounts of assets and liabilities for financial statements and for income tax purposes is recognized as deferred taxes.

Real Estate Taxes
NAF-owned properties are subject to taxes including property tax, city planning tax and depreciable asset tax. Taxes for each fiscal
period are charged to income on an accrual basis.
The owner of properties is registered in a record maintained by the local government in each jurisdiction, and the taxes are imposed on
the owner registered in the record, as of January 1, based on the assessment made by the local government.
When the property is purchased before January 1 of any given calendar year, these taxes for the previous year are imposed on the seller. The Company pays the seller the corresponding tax amounts for the period from the property’s transfer date to December 31 of theprevious year as part of the purchase prices of each property, and capitalizes these amounts as the cost of the property. There was no capitalized property tax for the period ended February 28, 2009.

Accounting Treatment of Beneficiary Interests in Trust Assets including Real Estate
For trust beneficiary interests in real estate, all assets and liabilities associated with assets in trust as well as all income generated andexpenses incurred from assets in trust are recorded in the relevant balance sheet and income statement accounts.

42

Nippon Accommodations Fund Inc.

Notes to Financial Statements

Note 3

Schedule of Investment Properties

Investment properties as of February 28, 2009 and August 31, 2008 consisted of the following:
Yen in millions

As of February 28, 2009
Acquisition
Costs

Land
Land in trust¥ 52,594
43,421

Land including trust total

Accumulated
Depreciation¥

As of August 31, 2008

Book Value

Acquisition
Costs

—
—

¥ 52,594
43,421¥ 52,585
43,421

Accumulated
Depreciation¥

Book Value——¥ 52,585
43,42196,015—96,01596,006—96,006

Buildings and improvements
Buildings and improvements in trust

29,33017,674(1,831)(1,671)

27,50016,00329,321
17,601(1,387)(1,376)27,934
16,225

Building and improvements
including those in trust total
Structures
Machinery and equipment
Tools, furniture and fixtures
Structures in trust
Machinery and equipment in trust
Tools, furniture and fixtures in trust
Construction in process in trust

47,004
661
513
453
883
120
294
13

(3,501)
(85)
(55)
(146)
(90)
(23)
(125)
—

43,503
576
458
307
793
97
170
13

46,922
661
513
453
883
120
293
16

(2,763)
(64)
(31)
(111)
(76)
(17)
(100)
—

44,159
596
481
342
808
103
192
16

Other investment properties total
Total

Note 4

2,937

(524)

2,414

2,937

(399)

2,538

¥145,956¥(4,025)¥141,931¥145,866¥(3,163)¥142,703

Short-Term Loans and Long-Term Debt

Short-term loans consist of short-term borrowings under loan agreements. The annual interest rates on short-term loans outstanding
are fixed rates and as of February 28, 2009 and August 31, 2008 ranged from 0.65% to 1.37% and from 0.82% to 1.08%, respectively.
Long-term debt is at fixed rates and consists of the following:
Yen in millions

Unsecured loans due 2009 to 2013 principallyfrom banks and insurance companies withinterest rates mainly ranging from 1.2% to 2.2%
1.7% unsecured bonds due 2014

As of February 28, 2009

As of August 31, 2008

¥42,000
10,000¥42,000
10,000¥52,000¥52,000

The annual maturities of long-term loans as of February 28, 2009 were as follows:
Yen in millions

2009
2010
2011
2012
Thereafter¥ 2,000
11,0009,000
12,0008,000

NAF Report September 2008 – February 200943

Note 5Unitholders’ Capital

Total number of common units authorized
Total number of common units issued and outstanding

As of February 28, 2009

As of August 31, 2008

As of February 29, 2008

2,000,000
113,480

2,000,000
113,480

2,000,000
113,480

NAF shall maintain minimum net assets of at least ¥50 million as required by the Investment Trust and Investment Corporation Act of Japan.

Note 6

Rental Revenues and Expenses

Rental revenues and expenses for the periods ended February 28, 2009, August 31, 2008 and February 29, 2008 were as follows:
Yen in millions

Revenues from Property Leasing:
Rental:Rental revenues
Facility charge
Subtotal
Other revenues related to property leasing:
Income from leasing rights, etc.
Miscellaneous income
Subtotal

5th Period

4th Period

March 1, 2008
to August 31, 2008

September 1, 2007
to February 29, 2008

¥4,179117¥4,091117¥3,766
103

4,296

4,208

3,869

164
48

241
49

186
37

212

290

223

Total revenues from property leasing

4,508

4,498

4,092

Rental Expenses:
Property management fees
Repairs and maintenanceReal estate taxes
Trust fee
Utilities
Insurance
Depreciation and amortization
Leasing-related service fees, etc.
Other rental expenses

458
127
138
9
47
9
862
84
22

499
133
138
9
46
9
848
98
24

425
90
107
9
41
8
731
67
28

1,756

1,804

1,506

¥2,752¥2,694¥2,586

Total rental expenses
Operating Income from Property Leasing Activities

44

6th Period
September 1, 2008
to February 28, 2009

Nippon Accommodations Fund Inc.

Notes to Financial Statements

Note 7

Income Taxes

NAF is subject to income taxes in Japan. The effective tax rates on NAF’s income based on applicable Japanese tax law were 0.06%,
0.06% and 0.06% for the periods ended February 28, 2009, August 31, 2008 and February 29, 2008, respectively. The following tablesummarizes the significant differences between the statutory tax rates and NAF’s effective tax rates for financial statement purposes.

Statutory effective tax rate
Deductible distributions paid
Others
Effective tax rate

6th Period

5th Period

4th Period

September 1, 2008
to February 28, 2009

March 1, 2008
to August 31, 2008

September 1, 2007
to February 29, 2008

39.39%(39.37)0.04

39.39%(39.37)0.04

39.39%(39.37)
0.04

0.06%

0.06%

0.06%

The tax effects of significant temporary differences that resulted in net deferred tax assets or liabilities as of February 28, 2009,
August 31, 2008 and February 29, 2008 were as follows:
Yen in thousands
As of February 28, 2009

As of August 31, 2008

As of February 29, 2008

Deferred tax assets:
Enterprise taxes

¥ 20

¥ 21

¥ 19

Total deferred tax assets
Deferred tax liabilities

20
—

21
—

19
—

Net Deferred Tax Assets

¥ 20

¥ 21

¥ 19

NAF was established as an investment corporation under the Investment Trust and Investment Corporation Act of Japan, and as longas an investment corporation distributes to its unitholders at least 90% of taxable income for a period and other requirements prescribedin Japanese tax regulations are met, the investment corporation is allowed to deduct the total amount of distributions paid in calculating
its taxable income under Japanese tax regulations.

Note 8Per Unit Information

Information about earnings per unit for the periods ended February 28, 2009, August 31, 2008 and February 29, 2008 and net
assets per unit as of February 28, 2009, August 31, 2008 and February 29, 2008 was as follows.
The computation of earnings per unit is based on the weighted average number of common units outstanding during the period.
The computation of net assets per unit is based on the number of common units outstanding at each period end.
Yen

Earnings per Unit:
Net income
Weighted average number ofcommon units outstanding

Net Assets per Unit

6th Period

5th Period

4th Period

September 1, 2008
to February 28, 2009

March 1, 2008
to August 31, 2008

September 1, 2007
to February 29, 2008

¥14,587¥14,461¥14,365

113,480

113,480

113,480

As of February 28, 2009

As of August 31, 2008

As of February 29, 2008

¥551,939¥551,813¥551,717

NAF Report September 2008 – February 200945

Notes to Financial Statements

Note 9Transactions with Related Parties(September 1, 2008 – February 28, 2009)(1) Parent Company and Major Corporate Unitholders: None applicable(2) Affiliates: None applicable(3) Sister Companies: None applicable(4) Directors and Major Individual Unitholders
Classification

Name

Director and/or
close relative

Nobuyuki Nakai

Principal businessor occupation

Executive Directorof NAF and
President & CEOof MFAFM

Nature oftransaction
Payment of asset
management fees to
MFAFM (Note 1)

Amount oftransaction

Account(Yen in millions)¥324(Notes 2 and 4)

Payment for the provision ofgeneral administration services
relating to organizational
management to MFAFM (Note 3)¥1(Note 4)

Balance at endof period(Yen in millions)

Accounts
payable(Note 4)

Accounts
payable(Note 4)¥341

¥0Notes 1. Nobuyuki Nakai entered into this transaction as a representative of MFAFM, and this amount is subject to the conditions set forth in the by-laws of NAF.
2. The amount of asset management fees does not include fees for management related to acquisition of properties included in the book value of each investment property, etc.
3. Nobuyuki Nakai entered into this transaction as a representative of MFAFM, and this amount is set forth in the “General Administration Agreement relating toOrganizational Management” concluded between NAF and MFAFM.
4. Consumption taxes are not included in transaction amounts. Consumption taxes are included in the balance at the end of the period.

(March 1, 2008 – August 31, 2008)(1) Parent Company and Major Corporate Unitholders: None applicable(2) Directors and Major Individual Unitholders
Classification

Name

Director and/or
close relative

Nobuyuki Nakai

Principal businessor occupation

Executive Directorof NAF and
President & CEOof MFAFM

Nature oftransaction
Payment of asset
management fees to
MFAFM (Note 1)

Amount oftransaction

Account(Yen in millions)¥449(Notes 2 and 4)

Payment for the provision ofgeneral administration services
relating to organizational
management to MFAFM (Note 3)¥1(Note 4)

Balance at endof period(Yen in millions)

Accounts
payable(Note 4)

Accounts
payable(Note 4)¥339

¥0Notes 1. Nobuyuki Nakai entered into this transaction as a representative of MFAFM, and this amount is subject to the conditions set forth in the by-laws of NAF.
2. The amount of asset management fees includes ¥126 million for management related to acquisition of properties included in the book value of each
investment property, etc.
3. Nobuyuki Nakai entered into this transaction as a representative of MFAFM, and this amount is set forth in the “General Administration Agreement relating toOrganizational Management” concluded between NAF and MFAFM.
4. Consumption taxes are not included in transaction amounts. Consumption taxes are included in the balance at the end of the period.

(3) Subsidiaries: None applicable, because NAF has no subsidiaries in which it has invested.
(4) Sister Companies: None applicable

Note 10Significant Subsequent Events

None applicable

46

Nippon Accommodations Fund Inc.

Independent Auditors’ Report

To the Board of Directors of
Nippon Accommodations Fund Inc.:
We have audited the accompanying balance sheets of Nippon Accommodations Fund Inc. (a Japanese Real
Estate Investment Trust) as of February 28, 2009 and August 31, 2008, and the related statements of income,changes in net assets and cash flows for each of the periods from September 1, 2008 to February 28, 2009, fromMarch 1, 2008 to August 31, 2008, and from September 1, 2007 to February 29, 2008, expressed in Japaneseyen. These financial statements are the responsibility of the Company’s management. Our responsibility is toindependently express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Nippon Accommodations Fund Inc. as of February 28, 2009 and August 31, 2008, the results of its
operations and its cash flows for each of the periods from September 1, 2008 to February 28, 2009, from March
1, 2008 to August 31, 2008, and from September 1, 2007 to February 29, 2008, in conformity with accounting
principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying financial statements with respect to the period ended February
28, 2009 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S.
dollar amounts and, in our opinion, such translation has been made on the basis described in Note 1 to thefinancial statements.

Tokyo, JapanMay 26, 2009

KPMG AZSA & Co., an audit corporation incorporated
under the Japanese Certified Public Accountants Law
and a member firm of the KPMG network of
independent member firms affiliated with KPMGInternational, a Swiss cooperative.

NAF Report September 2008 – February 200947

Appendix

Primary Related Corporations
Overview of the Roles of Primary Related Corporations
The following outlines the contractual relationship between
NAF and its REIT management company, and the contractual

relationship between NAF’s REIT management company andprimary related corporations.

Role

Name

Overview of Relevant Operations

REIT managementcompany and generaladministrative agent

Mitsui Fudosan
Accommodations FundManagement Co., Ltd.
(MFAFM)

MFAFM serves as the company entrusted with asset management as required
under the Investment Trust and Investment Corporation Act of Japan (Article 198,
Paragraph 1) and under a REIT Management Agreement entered into between
MFAFM and NAF on October 13, 2005 (as amended). Under this agreement,
MFAFM undertakes asset management of NAF in accordance with the asset
management guidelines of MFAFM and the Articles of Incorporation of NAF.
Under the above agreement, MFAFM is entrusted with (1) management of assets
owned by NAF; (2) fund procurement to be conducted by NAF; (3) reporting on
the condition of assets owned by NAF; (4) formulating management plans for
assets of NAF; and (5) any other matters related to the above items listed in (1)through (4) that NAF may require.
In addition, pursuant to Article 117 of the Investment Trust and Investment
Corporation Act of Japan, MFAFM undertakes management of (1) the Board of
Directors; (2) the General Meeting of Unitholders; and (3) any other mattersrelated to the above items listed in (1) and (2) that NAF may require, as General
Administrative Agent based on a General Administrative Service Agreement dated
March 1, 2006. The matters entrusted to the Transfer Agent pursuant to theAgreement between NAF and the Transfer Agent are not included in the above
matters set forth in (1) and (2).

Real estate information/ Mitsui Fudosan Co., Ltd.
advisory service provider

Mitsui Fudosan provides real estate sales information, real estate management
information, and other services to MFAFM under an Agreement on Provision ofReal Estate Information/Advisory Service that MFAFM entered into with Mitsui
Fudosan on February 23, 2006.

Real estate
information provider

Mitsui Fudosan
Residential Co., Ltd.*

Mitsui Fudosan Residential provides real estate sales information to MFAFM underan Agreement on Provision of Real Estate Information that MFAFM entered intowith Mitsui Fudosan Residential on September 26, 2007.

Property information
providerMitsui Real Estate
Sales Co., Ltd.

Mitsui Real Estate Sales provides real estate brokerage information and otherservices to MFAFM under a Memorandum on Provision of Real Estate Brokerage
Information that MFAFM entered into with Mitsui Real Estate Sales on March
31, 2006.

Master property
management company

Mitsui Fudosan
Housing Lease Co., Ltd.

In principle, MFAFM will entrust to Mitsui Fudosan Housing Lease as master
property management company, all property management services required forreal estate of NAF, under a Basic Agreement on Property Management between
MFAFM and Mitsui Fudosan Housing Lease dated March 31, 2006.

* Incorporated as a wholly owned residential sales subsidiary through a corporate split from Mitsui Fudosan Co., Ltd. in October 2006.

48

Nippon Accommodations Fund Inc.

Mitsui Fudosan Accommodations Fund Management Co., Ltd.
REIT Management Company and General Administrative Agent
MFAFM, as a REIT management company provided for in theInvestment Trust and Investment Corporation Act of Japan, performs management of NAF’s assets and undertakes managementof the institutions of NAF. As of February 28, 2009, MFAFM has
been entrusted as a REIT management company only by NAF.
As of the same date, MFAFM has paid-in capital of ¥300 million. There is no capital relationship with NAF. Nobuyuki Nakai,
President & CEO of MFAFM, is concurrently an executive directorof NAF.

■ Operation■

Undertakes asset management of NAF pursuant to a REITManagement Agreement based on an entrustment from NAF in
accordance with the Articles of Incorporation of NAF and theInvestment Objects and Policies set forth therein.

■

Undertakes management of the general affairs of the general
meeting of unitholders and the Board of Directors of NAF as
General Administrative Agent based on an entrustment from
NAF and pursuant to a General Administrative Service
Agreement.

■ Fees for the Asset Management Operation
NAF pays asset management fees to MFAFM, in accordancewith the REIT Management Agreement concluded with MFAFM.
These fees comprise items 1 to 4 below, with the method of calculation and payment dates as follows.
Management Fees 1
The amount equivalent to 5% of the amount of the revenue
arising from Real Estate, etc. as calculated on each closing date(excluding revenues from the sale of Real Estate, etc. and other
Managed Assets) will be payable. Management Fees 1 are paid
without delay after definite settlement of accounts.
Management Fees 2
The amount equivalent to 5% of income before income tax
prior to deduction of Management Fees 1 and 2 as calculated oneach closing date will be payable. Management Fees 2 are paid
without delay after definite settlement of accounts.
Management Fees 3
In the event that Real Estate, etc. is newly acquired, compensation equivalent to 1% (0.5% if it is acquired from Related
Parties) of the total amount of the acquisition price of said Real
Estate, etc. (excluding consumption tax, local consumption tax,
and acquisition costs) will be payable. Management Fees 3 arepaid at or before the end of the next month after the month of theacquisition date.
Management Fees 4
In the event that Real Estate, etc. is sold, compensation equivalent to 1% (0.5% if it is sold to Related Parties) of the total
amount of the sales price of said Real Estate, etc. (excluding consumption tax, local consumption tax) will be payable.
Management Fees 4 are paid at or before the end of the next
month after the month of the sales date.

NAF Report September 2008 – February 200949

■ History of MFAFM■ Directors and Staff

MFAFM is a REIT management company that is a limited liability company duly established under the laws of Japan. Major
events in the history of MFAFM are as follows.

As of February 28, 2009, the directors and corporate auditorsof MFAFM are as follows.

January 4, 2005
March 4, 2005

EstablishedObtained license as a building lots and building transactions agent under the Building
Lots and Building Transactions Law

March 25, 2005

Title

Nobuyuki Nakai

President & CEO (standing)

Yoshihisa Otake

Director & CIO (standing)Morio Shibata

Director & CFO (standing)

Hiroshi Matsumoto

Director

Toru Suzuki

Corporate Auditor

Changed name (from “MF Residential AssetManagement Co., Ltd.” to “Mitsui Fudosan
Residential Fund Management Co., Ltd.”)

July 8, 2005

Name of Directors and Auditors

In addition, one important executive other than the directors
and auditors is as follows.

Obtained approval as a discretionary transac-

Name

Title

tion agent under the Building Lots and

Tetsuya Kanazawa

Chief Compliance Officer

Building Transactions Law
September 26, 2005 Obtained approval as a REIT managementcompany under the Investment Trust andInvestment Corporation Act of Japan
December 15, 2005

Changed name (from “Mitsui Fudosan
Residential Fund Management Co., Ltd.” to“Mitsui Fudosan Accommodations FundManagement Co., Ltd.”)

February 8, 2006

Obtained approval to undertake management of the institutions

September 30, 2007 Registration of financial instruments andexchange business

The staff other than those mentioned above comprises
13 persons.

■ Outline of Financial Condition
An outline of the financial condition of MFAFM is as follows.
Outline of principal assets and liabilities for the most recent
fiscal year:
Current as of March 31, 2009

(Yen in millions)

Total Assets
Total Liabilities
Net Assets

¥867
99
767

Profit and loss for the most recent fiscal year:
Fifth Fiscal Year
(April 1, 2008 – March 31, 2009)

Operating Income
Ordinary Profit
Net Income

50

Nippon Accommodations Fund Inc.

(Yen in millions)

¥668
269
151

Appendix

Mitsui Fudosan Co., Ltd.
Real Estate Information and Advisory Service Provider
Pursuant to an Agreement on Provision of Real Estate
Information/Advisory Service, Mitsui Fudosan provides to MFAFM adiverse array of support services that employ the information andexpertise of Mitsui Fudosan in the area of real estate management
and administration.
In order to receive such services, MFAFM provides Mitsui
Fudosan with acquisition guidelines included in asset management guidelines.

■ Provision of Information on Real Estate and Other
Assets Owned or Developed by Mitsui Fudosan
In case Mitsui Fudosan initiates selling activities of real estateor real estate-related assets which it owns or is developing under
its Accommodations Business Division, and is consistent with
MFAFM’s asset management guidelines, Mitsui Fudosan notifies
MFAFM, in principle, before or at the same time as it notifies any
third party of such sales, unless such notification cannot be madedue to lack of consent of third parties or for any other unavoidable reasons.
When MFAFM receives such notification and provides written
notification that it will consider the purchase of such real estate orassets, Mitsui Fudosan deals with NAF as a prospective purchaser
on a pari passu basis with regard to any third party interested inpurchasing such estate or other assets.

■ Provision of Third-Party Real Estate Sales Information
Regardless of whether Mitsui Fudosan has originated or isbrokering the sale, Mitsui Fudosan’s Accommodations Business
Division in principle notifies MFAFM of information concerningavailable real estate or real estate-related assets owned by third
parties, when such real estate or assets are consistent with
MFAFM’s asset management guidelines, unless such notification
cannot be made due to lack of consent of third parties or for any
other unavoidable reasons, or Mitsui Fudosan itself intends toacquire such real estate or assets with the objective of development or ownership.

■ Provision of Real Estate Management Information
Mitsui Fudosan will provide in writing upon request by MFAFM
and at least once per calendar year real estate management information (see note below) drawn from information that its
Accommodations Business Division supervises if MFAFM deems
such information necessary for its business and Mitsui Fudosan
agrees to such provision.

Note: “Real estate management information” means the following
information:(a) Information regarding medium-to-long-term trends relevant to
the operating environment of the real estate leasing market in
Japan including economic trends, population dynamics, andtrends in housing stock.
(b) Trends in new supply of residential properties for lease (including
property summaries, level of rent and initial leasing conditions),
recent lease contracts entered for specific residential properties,
area marketing surveys, financial data for other real estate invest
ment corporations, income and expense data for specific properties, and real estate leasing market trends including vacancy rate
and rent trends.
(c) Other information related to items (a) or (b) above that MFAFM
requests, as needed.

■ Provision of Advisory Services
MFAFM has entrusted the following activities to
Mitsui Fudosan.
(a) Support services for the acquisition of real estate or realestate-related assets (including due diligence prior to suchacquisition, review of relevant building plans and conditionsof construction).
(b) Advice regarding the management and administration of realestate or real estate-related assets which NAF owns or is considering acquiring.
Such advice includes, but is not limited to (i) advice and support
in connection with the management and administration of thelong-term maintenance plan for buildings and facilities and deliberations on and preparation of related budgets and plans; (ii) advice
and support in connection with the investigation or review of theplan and estimated costs for maintenance and renovation to be
conducted in connection with real estate or real estate-related
assets; and (iii) advice and support in connection with large-scale
repair projects to be executed in respect of real estate or realestate-related assets.

■ Operation Fees
MFAFM will provide the compensation as separately discussed
and agreed with Mitsui Fudosan under this agreement.

NAF Report September 2008 – February 200951

Portfolio Policy

Portfolio Structure Policies
Set forth below are the portfolio structure policies andinvestment standards for individual properties for the REITManagement Company and its internal regulations that serve asasset management guidelines.

regional characteristics and tenant needs. NAF then deploys thisinformation to invest in properties with suitable residential plans
and characteristics.

2. Investment Standards
1. Investment Areas
NAF emphasizes Greater Tokyo and other major cities inJapan in investing in accommodation assets. By region,
approximately 80 percent of NAF’s assets are located in the 23
wards of Tokyo.
When considering individual investments, NAF studies

The REIT Management Company identifies potential
investments and decides whether or not to invest in assets on
the basis of the asset management guidelines summarized in thetable below.

ItemStandard

Investment amountIn principle, the value of each property must exceed ¥1 billion. However, NAF may invest in properties
at or below ¥1 billion after taking into account property characteristics and earning potential and certain
relevant matters.

Ownership interests

In principle, NAF shall hold ownership interests of a whole property. However, NAF may invest incompartmentalized ownership upon consideration of the specific property. NAF may also invest in
leaseholds, including fixed-term leaseholds, on the basis of consideration of earning potential, thestability of the leasehold rights and other relevant matters.

Building structure

Building structures shall be reinforced concrete (RC) or steel reinforced concrete (SRC). Earthquake
resistance shall conform to or substantially satisfy the New Earthquake Resistance Standards (incompliance with the 1981 revision to the Building Standards Law (Law No. 201 of 1950), as amended,
the “Building Standards Law”).

Properties under development In principle, NAF shall acquire properties that are already producing stable rental income at the time ofacquisition, and shall not invest in land with a view to NAF’s own construction of the building thereon.
However, NAF may consider contracts to acquire uncompleted buildings that, although incomplete, areexpected to carry minimum risk in respect to completion, delivery and subsequent leasing.

3. Due Diligence Standards
NAF selects assets to invest in only after due diligencecovering economic feasibility, physical condition and legal statusin accordance with the asset management guidelines. Due
diligence includes real estate appraisals and building inspection
Item
Economic
feasibility
studies52

reports from third-party specialists. Based on the results of suchdue diligence, the REIT Management Company in principle
undertakes investigation of the items listed below in order tomake investment decisions as a result of comprehensive review.

Issues InvestigatedMarket survey

1. Current residential environment in the relevant region and its mid-to-long-term forecast
2. Demand and supply for rental housing and housing sales in the relevant region
3. Rental housing competition trends in the relevant region
4. Markets rents in the relevant region, including current rents and its mid-to-long-term forecast
5. Discount rate and rate of return

Tenant survey

1. Tenant creditworthiness and rent income amount
2. Tenant information including tenant household status or industry, number or purpose of use

Nippon Accommodations Fund Inc.

Physical
condition
studiesLegalinvestigation

Survey ofearnings andrelated issues

1. Current property management costs and potential for cost reductions
2. Development of proposals for increasing value through change in management manner or renovation
3. Development of mid-to-long-term plan for repair and renovation expenses
4. Development of property cash flow projections
5. Verification that property is consistent with portfolio strategy

Location

1. Street conditions, access to major transportation
2. Convenience and access to public facilities
3. Status of borders between adjacent tracts and cross-border issues
4. Living conditions including view, light, ambient noise and airflow
5. Presence of unpleasant facilities
6. Future development plans in the surrounding area

Construction,equipment andspecifications

1. Building structure, age and construction company of property and other related matters
2. Layout, ceiling height, interior specifications (including ceiling, walls and floors), materials used for theinterior and exterior, status of maintenance (or deterioration) of facilities including sanitary facilities,
ventilation facilities, electrical facilities, elevators and parking
3. Need for immediate repairs

Building
management

1. Status of compliance with related regulations including the Building Standards Law, the City Planning Law
and the National Land Use Planning Law
2. Actual management status
3. Quality of the property management company and contract terms

Antiseismic
resistance andprobable
maximum loss
(PML)

1. Antiseismic resistance that meets the New Earthquake Resistance Standards or equivalent resistance
2. Checks of the construction company, architectural firm, construction engineering company, and institutionthat inspected construction. Confirmation of authenticity of the structural fabrication calculation sheets.
3. In principle, earthquake PML shall be below 15 percent. For buildings for which PML is at or above 20
percent, consideration of additional antiseismic reinforcing work, additional earthquake insurance and otherrelevant matters must be considered.

Environmental,
soil and otherissues

1. Investigation of whether the building contains hazardous materials
2. Investigation of land use records and soil contamination

Rights andrelated issues

1. Issues regarding ownership interests and mortgage
2. Lease contract terms
3. Any documentation related to confirmation of border or agreement regarding cross-border issues
4. Permission for occupancy of roads under the Traffic Law
5. Compliance with laws and regulations related to environmental preservation, including the Nature
Conservation Law and the Urban Green Space Conservation Law
Investigation shall be conducted as to whether the previous owner had obtained the enforceable real right.
In case of complicated relation of rights, the following matters, among others, shall be investigated; (thecomplicated relation of rights include relationship between NAF and others if NAF does not hold the title toproperty or jointly holds the title.)
1. (If the concerned right is leasehold) the perfection of such leasehold and the absence of any rightwhich supersedes such leasehold.
2. The registration status of the relevant right of site; the limitation on separate transfer of such right ofsite from the building thereon and the registration status of such limitation; share of such right
3. Measures to be taken to ensure the maintenance of deposits; reserve rules or measures based onlong-term renovation plan
4. Existence of agreement on prohibition from division of co-ownership property and registration statusof such agreement; appropriate treatments in case of request for division of co-ownership property orsales of co-ownership share; (possible) claims against or from other co-owners.

NAF Report September 2008 – February 200953

5. Status of compartment of compartmentalized ownership.
6. Security arrangements established prior to involvement of NAF and assumption of any encumberancesor obligations in connection thereto.
7. Terms of special agreement with the owner of site (or leasehold originator), other compartmentalized
ownership holders, other co-owners and any other relevant parties, including agreement regarding
first refusal.
8. Characteristics of owners of site (or leasehold originator), compartmentalized ownership holders,co-owners or other relevant parties (for example, corporations or individuals).
9. Terms of trust agreement in case the relevant rights are beneficial interests in real estate trust.

Policies for Portfolio Management and Operation
1. Basic Management Policies

54

1. An organizational structure that can execute property
management operations according to the management andoperation specifications of the REIT Management Company.
2. The capability to accomplish smooth new tenant recruitment.
3. A reasonable compensation level for property management
operations compared to others in the region in which
properties are located.

The REIT Management Company prepares a yearly
management plan for NAF’s assets under its management foreach fiscal period. This management plan covers issues such as
handling of the assets and projected capital expenditures forproperties, including plans for large-scale renovation, and issubject to Investment Committee approval.
The REIT Management Company acts in accordance with thisyearly management plan in undertaking management andoperation of the assets in cooperation with the property
management company. The REIT Management Company is also
responsible for implementing appropriate changes and revisions
to the yearly management plan if necessitated by significant
changes in the operating environment.

In addition, the REIT Management Company will periodicallymonitor whether the selected property management company ismaintaining its capabilities at the level dictated by the standards
for selection. As a result of monitoring, the REIT Management
Company may require improvements or may change the property
management company.

2. Selection and Monitoring of the Property
Management Company

3. Policies for Property and Casualty
Insurance Coverage

The property management company is responsible for
proposal and implementation of various measures for day-to-day,on-site management of tenants and properties. Such functions of
the property management company are particularly important to
the management of accommodation assets in general and rental
housing in particular. Naturally, the property managementcompany should have specialized expertise in the business ofproperty management, and its operations must be organized andefficient so that it can provide consistent, high-quality services
across a widely dispersed array of properties and tenants.
NAF has selected Mitsui Fudosan Housing Lease Co., Ltd. toprovide these services as its master property managementcompany. In principle, NAF intends to entrust property
management for assets to be owned by NAF in the future to
Mitsui Fudosan Housing Lease, on the condition that it meetsthe following requirements:

NAF maintains property and casualty insurance coverage, tothe extent that is deemed appropriate, to address damage toproperty due to disasters such as fires and accidents or claims forcompensatory damages from third parties. Asset characteristics
determine such coverage.
NAF comprehensively determines earthquake insurance
coverage according to cost effectiveness and the projected
impact of an earthquake on each building and on the portfolio
as a whole. When earthquake PML for specific buildings is
projected above 20 percent or when the acquisition of suchproperty causes portfolio PML to rise above 15 percent, NAF
comprehensively considers the impact from an earthquake,
insurance premiums and any other relevant issues to determine
whether or not to purchase earthquake insurance.

Nippon Accommodations Fund Inc.

Portfolio Policy

4. Basic Policies for Renovation Plans andCapital Expenditures
The renovation plans are strategic and require renovationand capital expenditures in addition to routine expenses incurredby small repairs in order to maintain and improve the market
competitiveness of properties and tenant satisfaction over the
medium-to-long term.

NAF determines and revises, for each property, an annual
renovation plan in yearly management plans that are based on
the established 12-year medium-term renovation plans.
NAF funds a reserve for renovation according toconsiderations of depreciation expenses and renovation plans
based on mid-to-long-term portfolio management. In principle,
NAF keeps capital expenditures within the scope of the overall
portfolio renovation plan.

Divestiture Policy
In principle, NAF aims to secure stable operating revenue
from assets under management through ownership over the
mid-to-long term, and does not engage in short-term divestiture.
However, NAF decides to sell specific assets after
consideration of the overall portfolio impact based on evaluationof trends affecting the future rental market in a given area,
actual or projected increases or decreases in asset values, risk ofasset impairment, obsolescence and associated costs, and otherrelevant factors.

Financial Policies
1. Issue of New Units
NAF may flexibly issue additional units with the objectiveof financing acquisition of assets, renovation and other capitalrequirements for operation, or to repay debt, including leasedeposits, security deposits, loans and bonds that NAF may
have issued.

2. Debt Financing
NAF may issue bonds or take on loans, including callmarket funding, with the objective of financing acquisition ofassets; renovation expenses; dividend payments; working
capital; or debt repayment, including lease deposits, security
deposits, loans and bonds that NAF may have issued. NAF only
borrows capital from qualified institutional investors as defined
under the relevant laws and regulations in Japan. In addition,
NAF may not take on loans or issue bonds that exceed ¥1trillion, respectively, nor may the total of loans and bonds
exceed ¥1 trillion. According to NAF’s current Articles ofIncorporation, NAF may use its assets under management as
collateral for loans and bonds.

3. Loan-to-Value Ratio
The ratio of total loans and bonds outstanding to NAF’s
total assets is known as the loan-to-value (LTV) ratio. The REITManagement Company determines the upper limit of NAF’s LTV
ratio as part of its mid-to-long-term asset management plans
and its yearly management plans. The upper limit for NAF’s LTV
ratio is currently set at 60 percent, although issues including theacquisition of assets may cause the LTV ratio to temporarily
exceed 60 percent.

4. Derivatives
According to NAF’s current Articles of Incorporation, NAF
limits transactions involving financial derivatives to those withthe objective of hedging risks including the risk of change in theinterest rates associated with debts.

Information Disclosure Policy
NAF defines itself as an open, transparent investment
corporation, and has a disclosure policy for public awareness.
Moreover, NAF works to maintain an environment thatencourages timely and accurate disclosure of unbiased information
to all investors. In keeping with its name, NAF’s fundamental
policy is to accommodate investors in disclosing information.

NAF discloses information in accordance with the Investment
Trust and Investment Corporation Act of Japan, the Financial
Instruments and Exchange Law of Japan, and the rules of theTokyo Stock Exchange and the Investment Trusts Association,
Japan. Moreover, NAF energetically discloses of its own accord
information that it believes is relevant to investment decisions.

NAF Report September 2008 – February 200955

Corporate Data and Investor Information(As of February 28, 2009)■ Corporate Data
Corporate office

1-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo 103-0022, Japan+81-3-3246-3677
http://www.naf-r.jp/english/index.html

Date of incorporation

October 12, 2005

Capital¥60,979 million (as of February 28, 2009)

Unitholders

4,109Transfer agent

The Chuo Mitsui Trust and Banking Company, Limited
33-1, Shiba 3-chome, Minato-ku, Tokyo 105-8574, Japan

Business office of the transfer agent

Stock Transfer Agency Department of
The Chuo Mitsui Trust and Banking Company, Limited
8-4, Izumi 2-chome, Suginami-ku, Tokyo 168-0063, Japan

Independent auditor

KPMG AZSA & Co.
AZSA Center Building
1-2, Tsukudo-cho, Shinjuku-ku, Tokyo 162-8551, Japan

Investor relations

For further information, please contact the REIT Management Company:
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
1-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo 103-0022, Japan+81-3-3246-3677

Disclaimer
This document was prepared solely for the convenience of andreference by overseas investors and does not correspond to theoriginal Japanese documents.
This English document contains selected information including apartial translation of the Securities Report (Yuka shoken hokokusho)
filed on May 27, 2009 pursuant to the Financial Instruments andExchange Law of Japan, and the Financial Statements andPerformance Information Report for the period from September 1,
2008 to February 28, 2009, of Nippon Accommodations Fund Inc.
prepared pursuant to the Investment Trust and Investment Corporation
Act of Japan. This document should not be deemed a summary of theabove mentioned Securities Report and the Financial Statements andPerformance Information Report.
The contents of this document do not constitute an offer to sell orsolicitation of an offer to buy or sell any securities of Nippon
Accommodations Fund Inc. or otherwise, nor is it advice or therecommendation of Nippon Accommodations Fund Inc. to enter into
any transaction.
English terms for Japanese legal, accounting, tax and businessconcepts used herein may not be precisely identical to the concept of
the equivalent Japanese terms. If there exist any discrepancies in themeaning or interpretation with respect to any and all terms herein
including, without limitation, financial statements, between theoriginal Japanese documents and English statements contained herein,
the original Japanese documents will always govern the meaning andinterpretation. None of Nippon Accommodations Fund Inc., Mitsui
Fudosan Accommodations Fund Management Co., Ltd. or any

56

Nippon Accommodations Fund Inc.

of their respective directors, officers, employees, partners, unitholders,
agents, parent company or affiliates will be responsible or liable for thecompleteness, appropriateness or accuracy of English translations
contained in this document. No person has been authorized to give
any information or make any representations other than as containedin this document in relation to the matters set out in this document,
and if given or made, such information or representation must not be
relied upon as having been authorized by Nippon Accommodations
Fund Inc., Mitsui Fudosan Accommodations Fund Management Co.,
Ltd. or any of their respective directors, officers, employees, partners,
unitholders, agents, parent company or affiliates.
The financial statements of Nippon Accommodations Fund Inc.
have been prepared in accordance with generally accepted accounting
principles in Japan (Japanese GAAP), which may materially differ incertain respects from generally accepted accounting principles in otherjurisdictions.
This document contains forward-looking statements andinformation. We base these statements on our beliefs as well as ourassumptions based solely on certain limited information currently
available to us. Because these statements reflect our current views
concerning future events, these statements involve known andunknown risks, uncertainties and assumptions. Our future
performance could materially differ from those set out in theseforward-looking statements. We do not undertake and will notundertake to release revisions of forward-looking statements toreflect future events or circumstances or of any other statements orinformation contained herein.

■ Investor Information
Fiscal period

Six months ending February 28 (February 29 in leap years) and August 31

Total number of common units issued

113,480 (As of February 28, 2009)

Distribution per unit

¥14,587 (As of February 28, 2009)

Unit listing

Tokyo Stock Exchange (Securities Code: 3226)

Major Unitholders(As of February 28, 2009)

Number of Units Held

Name

Percentage of Total*

Japan Trustee Services Bank, Ltd. (Trust Account)

14,05512.38%The Master Trust Bank of Japan, Ltd. (Trust Account)

11,98510.56%

NikkoCiti Trust and Banking Corporation (Investment Account)

9,618

8.47%

Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)

6,877

6.06%

Mitsui Fudosan Co., Ltd.

6,600

5.81%

The Nomura Trust and Banking Co., Ltd. (Investment Account)

6,387

5.62%

The Chuo Mitsui Trust and Banking Company, Limited

3,600

3.17%

Sumitomo Mitsui Banking Corporation

3,590

3.16%

American Life Insurance Company GA-L

3,000

2.64%

AIG EDISON-GA NON DIMA

1,999

1.76%

* Number of units held as a percentage of total units issued and outstanding, rounded down to the nearest hundredth.

Composition and Distribution of Unitholders
Overseas corporations
and individuals
107 (2.61%)
Financial institutions
74 (1.80%)

Other domestic corporations
72 (1.75%)

Individuals and others
9,657 (8.51%)

Securities companies
17 (0.41%)

Other domestic corporations
9,171 (8.08%)

Individuals and others
3,839 (93.43%)

Number of unitholders
Total 4,109

Overseas corporations
and individuals
11,980 (10.56%)

Securities companies
1,125 (0.99%)

Financial
institutions
81,547
Individuals and others(71.86%)2,288 (2.01%)

Number of units held
Total 113,480

Unit Price Range and Trading Volume(Yen)
1,200,000(Units)
30,000End-of-Month Closing Price (Left scale)Monthly Trading Volume (Right scale)

1,000,000

25,000800,000

20,000600,000

15,000400,000

10,000200,000

5,000

0Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb.
2006
2007
2008
2009

0

NAF Report September 2008 – February 200957

Nippon Accommodations Fund Inc.
1-1, Nihonbashi-Muromachi 2-chome,
Chuo-ku, Tokyo 103-0022, Japan

http://www.naf-r.jp/english/index.html

Printed in Japan