O

April 18, 2011

Financial Results for the Fiscal Period
From September 1, 2010 to February 28, 2011
Nippon Accommodations Fund Inc. (NAF) is listed on the Tokyo Stock Exchange (J-REIT) withthe securities code number 3226. (Website: http://www.naf-r.jp/english/)Representative Executive Director:
Asset Management Company:
Representative President and CEO:Inquiries:

Yuji Yokoyama
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Kosei Murakami
Morio Shibata, Director and Chief Financial Officer
Tel: +81-3-3246-3677
Scheduled Filing Date of Securities Report:
May 27, 2011
Scheduled Commencement Date of Cash Distribution Payment: May 17, 2011

1. Business Results for the Fiscal Period from September 1, 2010 to February 28,
2011(1) Operating Results(in millions of yen, rounded down; except as noted)
Total revenues

Operating income(%)*

Income before income
taxes

(%)*

(%)*

For the period ended
February 28, 2011

6,180

(0.6)

2,944

1.7

2,200

2.5

August 31, 2010

6,217

5.0

2,895

(3.8)

2,148

(5.6)

IncomeIncomebeforebeforeNet income Net income/incomeincometaxes/
per unit
net assets
taxes/
operatingtotal assets
incomeNet income

(%)*

(yen)

(%)

(%)

(%)

For the period ended
February 28, 2011

2,199

2.5

14,085

2.6

1.1

35.6

August 31, 2010

2,147

(5.6)

13,748

2.6

1.1

34.6

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

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

Total
distributions(yen)

For the period ended
February 28, 201114,086

2,199

–

–

100.0

2.6

August 31, 2010

13,748

2,147

–

–

100.0

2.6

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

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

Total assets

Net assets

Net assets/
total assets

Net assets per
unit

(%)

(yen)

As of
February 28, 2011

192,360

83,302

43.3

533,383

August 31, 2010

192,478

83,24943.3

533,045(4) Cash Flows(in millions of yen, rounded down; except as noted)

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents

For the period ended
February 28, 2011

3,171

(185)

(2,147)

4,178

August 31, 2010

3,663

(7,651)

3,690

3,339

2

2. Forecasts for the Fiscal Period from March 1, 2011 to August 31, 2011
(in millions of yen, rounded down; except as noted)

Total
revenues

For the period ending

August 31, 2011

7,461

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

Operatingincome

(%)

(%)

(%)

(%)

(yen)

(yen)

20.7 3,332

13.2 2,532

15.1 2,531 15.1

13,000-(Percent figures show changes from previous period)

Notes:
1. “Distribution per unit” does not include distribution in excess of earnings per unit.
2. Projected net income per unit for the fiscal period ending August 31, 2011 is ¥13,010.

3. Other
1. Changes in significant accounting policies:(1) Changes due to revisions in accounting standards and others: Yes*
(2) Changes other than in the above item (1): None
*Effective from the period ended February 28, 2011, NAF adopted the “Accounting Standard
for Asset Retirement Obligations” (Accounting Standards Board of Japan (“ASBJ”) Statement
No. 18 issued on March 31, 2008) and the “Guidance on Accounting Standard for Asset
Retirement Obligations” (ASBJ Guidance No. 21 issued on March 31, 2008).
However, this does not affect earnings as NAF has no applicable asset retirement obligations.
2. Number of investment units issued(1) The number of investment units issued (including treasury investment units) as of theperiod-end:
As of February 28, 2011:

156,178 units

As of August 31, 2010:

156,178 units(2) The number of treasury investment units as of the period-end:
As of February 28, 2011:- units

As of August 31, 2010:- units

Note:
Net income per unit is calculated by dividing net income by the weighted average number ofinvestment units: 156,178 units as of February 28, 2011, and 156,178 units as of August 31,
2010.
Disclaimer:
The above forecasts are based on information currently available to NAF and on certain
assumptions deemed to be reasonable. Actual operations may differ substantially due to anumber of factors.

3

10th Period (February 2011) Overview of Operating Results(in millions of yen, rounded down; except as noted)

Forecast of the10th Period

Result of the 9th
Period(August 2010)(2)

Comparison with
the 9th Period(1)-(2)

181

181

184

(3)

6,180

6,171

6,217

(37)

2,200

2,172

2,148

52

2,199

2,171

2,147

52

14,086

13,90013,748

338

63

63

63

–

96.5

95.0

95.5

1.0

Result of the 10th
Period(February 2011)(1)
Number ofoperating days
Total revenues
Income before
income taxes
Net income
Distribution perunit (yen)Number ofinvestment
properties
Averageoccupancy rate atend of period (%)

Overview of Performance and Distribution
In the period under review, NAF recorded total revenues of ¥6,180 million, operating income of¥2,944 million, income before income taxes of ¥2,200 million and net income of ¥2,199 million. In
addition to the above, NAF has decided to distribute nearly the entire amount of earnings inaccordance with the Distribution Policy (Article 34 of the Articles of Incorporation) set forth by NAF.
The distribution per unit was ¥14,086.

10th Period (February 2011) Overview of Investment
External Growth (Acquisition of properties)
No new properties were acquired during the period under review. NAF held 63 properties in its
assets at the end of the period and the total acquisition price was ¥186,975 million, unchanged
from the end of the previous period.

4Internal Growth (Management and operation of properties held by NAF)
Mitsui Fudosan Housing Lease Co., Ltd., the master property management company (below,“Master PM”), and the asset management company collaborate in the management of properties
held by NAF with the aim of implementing effective management and operation activities inaccordance with regional characteristics and the individual features of each property. These
include efforts such as rapid management and operations by the Master PM applying the portfolio
management system, tenant recruiting activities suited to the circumstances of individual
properties, the streamlining of management cost reduction efforts, interior renovations at
Okawabata Apartment Communities, one of the principle properties of NAF, and provide tenant
services corresponding to various needs in accordance with the results of resident questionnaires.
Financial Strategy (Overview of funds procurement)
During the period under review, while taking into account market trends and interest rate levels,
NAF raised the long-term loans to total interest-bearing debt ratio and refinanced its existing loans.
As a result, total interest-bearing debt at the end of the period amounted to ¥105,000 million,
while the long-term loans to total interest-bearing debt ratio was 83.3% (ratio excluding long-termloans due within one year: 72.4%). Also, LTV (loan-to-value ratio) at the end of the period was
54.6%.
A shelf-registration statement of investment corporation bonds in public offering was filed at the
Kanto Local Finance Bureau in July 2009. An overview of the shelf-registration statement is given
below. The remaining balance of the planned issuance amount at the end of the period is ¥93,000
million.
Planned issuance amount
Scheduled period of issuancePurpose for funds

Up to ¥100,000 million
From July 18, 2009 to July 17, 2011
Acquisition of new specified assets (same meaning as definedin Article 2, Paragraph 1 of the Investment Trust and Investment
Corporation Act of Japan), repayment of borrowings, repaymentof tenant security deposit, payments for maintenance andrenovation, and operational use

Rating of NAF as of February 28, 2011 is as follows.
Rating agency
Moody’s Japan K.K. (Moody’s)
Rating and Investment Information, Inc.
(R&I)
Standard & Poor’s Ratings Japan K.K.
(S&P)

Rating subject
Issuer credit rating
Issuer credit rating

RatingA 2 (Outlook for rating: Negative)
A A - (Trend of rating: Stable)

Long-term corporate
Short-term corporate

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

5

Significant Subsequent Events
Issuance of new investment units
Concerning the issuances of new investment units that were resolved at the Board of Directors’Meetings held on February 10, 2011 and February 22, 2011, payment relating to the issuance of
new investment units by public offering was completed on March 1, 2011, and payment relating
to the issuance of new investment units by third-party allocation was completed on March 28,
2011. The details are provided below.
As a result, the total investment amount paid in was ¥103,235,321,618 and the total number ofinvestment units issued was 194,711 units.
A.

Issuance of new investment units by public offering
Number of new investment units issued
37,500 units
Issue price¥593,872 per unit
Total amount of issue price¥22,270,200,000
Amount paid in (issue value)¥574,380 per unit
Total amount paid in (issue value)¥21,539,250,000
Payment date
March 1, 2011

B.

Issuance of new investment units by third-party allocation
Number of new investment units issued
1,033 units
Amount paid in (issue value)¥574,380 per unit
Total amount paid in (issue value)¥593,334,540
Payment date
March 28, 2011
Allottee
Nomura Securities Co., Ltd.

(Reference information)
The following assets (type of property: Real estate) were acquired on March 1, 2011. The
figures listed below under “Acquisition price” are exclusive of miscellaneous expenses foracquisition, fixed property taxes, urban planning taxes, consumption taxes, and local
consumption taxes.
Park Axis Shin Sapporo
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥827 million¥828 million(date of value appraisal: January 31, 2011)
3-5, Atsubetsu Chuo Nijo 5-chome,
Atsubetsu-ku, Sapporo-shi, Hokkaido
March 2008
Flat-roofed reinforced concrete structure/
13 stories
84 residential 1 retail etc.
3,729.05 m²
Mitsui Fudosan Co., Ltd.

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Park Axis Yokohama Idogaya
Acquisition price:
Appraised value:
Location (registration number):Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Chiba Shinmachi
Acquisition price:
Appraised value:
Location (registration number):Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Kamata Ichibankan
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥1,419 million¥1,420 million(date of value appraisal: January 31, 2011)129-5, Idogaya Nakamachi, Minami-ku,
Yokohama-shi, Kanagawa (district whereresidence indication has not been
implemented yet)
March 2008
Flat-roofed reinforced concrete structure/
10 stories
99 residential 1 retail etc.
2,706.59 m²
Mitsui Fudosan Co., Ltd.

¥1,679 million¥1,680 million(date of value appraisal: January 31, 2011)
1-14, Shinmachi, Chuo-ku, Chiba-shi,
Chiba (district where residence indication
has not been implemented yet)May 2008
Flat-roofed reinforced concrete structure/
13 stories
77 residential 7 retail etc.
3,318.15 m²
Mitsui Fudosan Co., Ltd.

¥1,069 million¥1,070 million(date of value appraisal: January 31, 2011)
11-6, Kamata Honcho 2-chome, Ota-ku,
Tokyo
March 2009
Flat-roofed reinforced concrete structure/
7 stories
63
1,721.28 m²
Mitsui Fudosan Co., Ltd.

7

Park Axis Chiba
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Taito Negishi
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Esaka Hiroshibacho
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥970 million¥971 million(date of value appraisal: January 31, 2011)
7-8, Benten 1-chome, Chuo-ku, Chiba-shi,
Chiba
March 2009
Flat-roofed reinforced concrete structure/
14 stories
91
2,270.32 m²
Mitsui Fudosan Co., Ltd.

¥672 million¥673 million(date of value appraisal: January 31, 2011)
2-1, Negishi 5-chome, Taito-ku, Tokyo
August 2009
Flat-roofed reinforced concrete structure/
14 stories
40
1,283.13 m²
Mitsui Fudosan Co., Ltd.

¥2,369 million¥2,370 million(date of value appraisal: January 31, 2011)
6-26, Hiroshibacho, Suita-shi, Osaka
September 2009
Flat-roofed reinforced concrete structure/
14 stories
130
4,309.24 m²
Mitsui Fudosan Co., Ltd.

8

Park Axis Komagome
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Utsubo Koen
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Park Axis Itabashi Honcho Nibankan
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥1,389 million¥1,390 million(date of value appraisal: January 31, 2011)23-13, Komagome 3-chome, Toshima-ku,
Tokyo
November 2009
Flat-roofed reinforced concrete structure/
15 stories
39 residential 1 retail etc.
1,979.51 m²
Mitsui Fudosan Co., Ltd.

¥2,399 million¥2,400 million(date of value appraisal: January 31, 2011)
1-7, Utsubohonmachi 3-chome, Nishi-ku,
Osaka-shi, Osaka
January 2010
Flat-roofed reinforced concrete structure/
15 stories
133
4,952.45 m²
Mitsui Fudosan Co., Ltd.

¥1,859 million¥1,860 million(date of value appraisal: January 31, 2011)
74-1, Shimizucho, Itabashi-ku, Tokyo
January 2010
Flat-roofed reinforced concrete structure/
14 stories
99
3,661.58 m²
Mitsui Fudosan Co., Ltd.

9

Dormy Ashiya
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Kawaijuku Kyoto Gakushin Ryo
Acquisition price:
Appraised value:
Location (registration number):Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Sundai Horikawa Ryo
Acquisition price:
Appraised value:
Location (registration number):Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥928 million¥986 million(date of value appraisal: January 31, 2011)12-28, Daitocho, Ashiya-shi, Hyogo
September 2002
Flat-roofed reinforced concrete structure/
5 stories
140
2,826.00 m²
Kyoritsu Maintenance Co., Ltd.

¥991 million¥1,040 million(date of value appraisal: January 31, 2011)
25-4, Jurakumawari Minamimachi,
Nakagyo-ku, Kyoto-shi, Kyoto (district
where residence indication has not been
implemented yet)
March 2004
Flat-roofed steel structure/9 stories
134
2,785.40 m²
Kyoritsu Maintenance Co., Ltd.

¥916 million¥1,000 million(date of value appraisal: January 31, 2011)205-1, Sawaragicho Agaru 5-chome,
Higashi Horikawa-dori, Kamigyo-ku,
Kyoto-shi, Kyoto (district where residence
indication has not been implemented yet)February 2005
Flat-roofed reinforced concrete structure/
10 stories
113
2,043.32 m²
Kyoritsu Maintenance Co., Ltd.

10

Dormitory Rakuhoku
Acquisition price:
Appraised value:
Location (registration number):Completion date:
Structure/number of stories:

Rentable units:
Rentable area:
Seller:¥374 million¥410 million(date of value appraisal: January 31, 2011)
51, Takagamine Kinohatacho, Kita-ku,
Kyoto-shi, Kyoto (district where residence
indication has not been implemented yet)February 2006
Flat-roofed reinforced concrete structure/
3 stories above ground and 1 undergroundstory
69
1,035.00 m²
Kyoritsu Maintenance Co., Ltd.

Rikkyo University International Dormitory (RUID) Shiki
Acquisition price:¥1,478 million
Appraised value:¥1,550 million(date of value appraisal: January 31, 2011)
Location (residence indication):18-25, Honcho 5-chome, Shiki-shi,
SaitamaCompletion date:
January 2010
Structure/number of stories:
Flat-roofed reinforced concrete structure/
8 stories
Rentable units:
126
Rentable area:
2,293.20 m²
Seller:
Kyoritsu Maintenance Co., Ltd.
Dormy Naka Itabashi
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥1,041 million¥1,120 million(date of value appraisal: January 31, 2011)
34-7, Nakacho, Itabashi-ku, Tokyo
February 2010
Flat-roofed reinforced concrete structure/
7 stories
105
1,911.00 m²
Kyoritsu Maintenance Co., Ltd.

11

Philosophia Nishidai
Acquisition price:
Appraised value:
Location (residence indication):
Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:Dormy Musashi Kosugi
Acquisition price:
Appraised value:
Location (registration number):Completion date:
Structure/number of stories:
Rentable units:
Rentable area:
Seller:¥1,249 million¥1,300 million(date of value appraisal: January 31, 2011)
33-1, Takashimadaira 9-chome,
Itabashi-ku, Tokyo
February 2010
Flat-roofed reinforced concrete structure/
8 stories
120
2,184.00 m²
Kyoritsu Maintenance Co., Ltd.

¥1,152 million¥1,250 million(date of value appraisal: January 31, 2011)
1406-2, Kamimaruko Sannocho
1-chome, Nakahara-ku, Kawasaki-shi,
Kanagawa (district where residence
indication has not been implemented yet)
March 2010
Flat-roofed reinforced concrete structure/
4 stories
111
1,996.47 m²
Kyoritsu Maintenance Co., Ltd.

12

The following asset (type of property: Real estate trust) was acquired on April 1, 2011. The
figure listed below under “Acquisition price” is exclusive of miscellaneous expenses foracquisition, fixed property taxes, urban planning taxes, consumption taxes, and local
consumption taxes.
Shibaura Island Air Tower 1) Air Tower, 2) Air Terrace
Acquisition price:¥7,905 million
Appraised value (Note):¥8,340 million(date of value appraisal: January 31, 2011)
Ownership form:
Land 1) 2) quasi co-ownership of general
fixed term lease (31% quasi co-owned)
Buildings 1) 2) Shared ownership (31%owned)
Location (residence indication):
1) 22-1, Shibaura 4-chome, Minato-ku,
Tokyo2) 22-2, Shibaura 4-chome, Minato-ku,
TokyoCompletion date:1) 2) March 2007
Structure/number of stories:
1) Flat-roofed reinforced concrete andsteel structure/48 stories
2) Flat-roofed steel-reinforced concrete
structure/2 stories
Rentable units (total):
1) 871 residential 1 retail etc.
2) 6 retail etc.
Rentable area (total):
56,923.63 m²
Seller:Shibaura Island Apartments Inc.
(Note)
This property is applicable to forward commitments (refers to the postdated sales contract
under which payment and delivery shall be made at least one month after the conclusion of
the contract, or any other contract similar thereto) by investment corporations as provided forin the Comprehensive Guidelines for Supervision of Financial Instruments Business
Operators, etc defined by the Financial Services Agency. In the case of properties applicable
to forward commitments, if the closing date of the accounting period falls in the period
between the conclusion of the sales contract and the date of payment and delivery, it isspecified in the internal rules of the asset management company to disclose the continuallyconducted appraised value as of the closing date. On this occasion, confirmation was soughtfrom Morii Appraisal & Investment Consulting, Inc. who conducted the appraisal. A response
has been received confirming that there has been no change in the appraised value as ofFebruary 28, 2011 from the appraised value dated January 31, 2011.

13

Forecasts of Investment Performance
The forecasts for the 11th period (from March 1, 2011 to August 31, 2011) and the 12th period(from September 1, 2011 to February 29, 2012) are as follows.
(in millions of yen, rounded down; except as noted)

11th period(August 2011)
7,461
2,532
2,531
13,000―Total revenues
Income before income taxes
Net income
Distribution per unit (yen)Distribution in excess of earnings per unit (yen)12th period(February 2012)
7,456
2,649
2,648
13,600―Notes: Underlying assumptions of forecasts
Investment assets:

Expenses:

Interest-bearing debt:

Number of units
issued:-The number of properties held by NAF as of the date of this document
is 82. In the forecasts of investment performance, it is assumed that no
subsequent transfer of properties (acquisition of new properties, sale ofproperties acquired, etc.) shall occur until February 29, 2012.
-The occupancy rate at the end of the period for total properties is
expected to be approx. 95 %.
-The following expenses are projected.
(in millions of yen)
11th period
12th period
Fixed property taxes and281
280
urban planning taxes
Repair expenses related todamages incurred due to the
35―
Great East Japan Earthquake
Depreciation and amortization
1,583
1,602
Interest expense and interest
expenses on investment749
752
corporation bonds
Temporary expenses related
50―
to the issuance of new units-It is assumed that NAF’s balance of interest-bearing debt that is¥114,000 million as of the date of this document shall not fluctuate until
February 29, 2012.
-We assume 194,711 units outstanding as of the date of this document.
-It is assumed that, there shall be no issuance of new units until
February 29, 2012.

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

14

Management Policy and Issues for the 11th Period Onward
NAF has always aimed to maximize its unitholder value through investments in accommodation
properties and the utilization of the Mitsui Fudosan Group as well as the formulation andmanagement of a high quality portfolio centered on rental residential properties located in the 23
wards of Tokyo.
From the 11th period onward, we aim to manage our portfolio stably based on theabove-mentioned policies and further increase our unitholder value by achieving internal andexternal growth expectations.
Combining funds procured by the issuance of new investment units of total amount ¥22,132
million conducted March 2011, following the resolution for the issuance of new investment units
made in February 2011, with own funds and funds procured by borrowings, NAF has completed
the acquisition of 18 properties in March 2011 (total acquisition price: ¥22,781 million) and 1
property in April 2011 (acquisition price: ¥7,905 million). In addition, as a result of the issuance ofthe new investment units, LTV (loan-to-value ratio) has fallen. Looking forward, we plan tocontinue our efforts to further increase our external growth.
External Growth (New acquisition of properties)
We will strive to rapidly obtain the best real estate information possible by utilizing our pipeline to
the Mitsui Fudosan Group and fortifying our independent information channel consisting of theasset management company. Our basic strategy will be to stably expand our portfolio based on
the Park Axis Series developed by Mitsui Fudosan Co., Ltd. in addition to the Park Cube Series
constructed by other developers. Moreover, we will aim to realize solid acquisitions of properties
considered to possess our mid- to long-term competitive advantages through individual strategies
such as widening the geographic area of our holdings within the 23 wards of Tokyo mainly of
single-occupant and compact residential properties for which a high occupancy rate is expected
and carefully selecting properties for investment in the major cities of regional areas.
The main part of the acquisition strategy of NAF continues to be stable acquisition of “Rental
Apartments”. However, it will invest in “Other Accommodation Assets”, including dormitories andcorporate housing, as the investment market in “Other Accommodation Assets”, excluding “Rental
Apartments”, appears to have matured in some categories. In the management of its portfolio,
NAF has set the upper limit of the share of “Other Accommodation Assets” in the overall portfolio
around 10% (on the basis of acquisition price) for the time being.
We will also continue to work towards effectuating high quality due diligence when acquiringproperties in order to avoid risk.
Internal Growth (Management and operation of leasehold properties)
NAF will aim to improve its rent levels and occupancy rate through the formulation andimplementation of a leasing strategy that takes into account the characteristics of each individual
property with the objective of maximizing rent revenues over the mid- to long-term. NAF will
review the adequacy of the grade of property management and cost of management and15operation as to each invested property in an appropriate timeframe and manner and reduce costby the rational review of management cost by utilizing the merits of outsourcing all property
management tasks to the Master PM. NAF is continuously aiming for the maintenance andenhancement of the market competitiveness of Okawabata Apartment Communities byimplementing strategic renovation of principally private-use areas.
Further, with the help of Mitsui Fudosan Co., Ltd., NAF will work to establish brand power byconcentrating on the market penetration of the “Park Axis” brand, NAF’s main invested asset, andthe further enhancement of name recognition on the rental housing market.
Financial Strategy
NAF will continue to emphasize the continued use of long-term, fixed-rate loans taking into
account measures to counter future interest rate and refinancing risks. Regarding LTV(loan-to-value ratio), the upper limit is set at around 60%. NAF will examine the issuance of newunits paying attention to market trends and distribution levels and taking into consideration the
demand for funds for the purpose of property acquisition as well as our financial position.
Additionally, NAF will examine future issuances of investment corporation bonds within the rangeof the remaining balance of the planned issuance amount based on the shelf-registration
statement of NAF bonds filed in July 2009.

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

16