Nippon Accommodations Fund Inc.
31st Period (March 2021 – August 2021) Investor Presentation
Q&AＱＡＱＡＱＡＱ

In putting in place a policy, we have heard that other REITs are also prioritizingoccupancy rates even at the expense of adjusting rents. Is there any concern that thiswill lead to a rent dumping environment? You have mentioned that rents will need tobe adjusted to levels recorded around 2017. Do you see rents bottoming out at thislevel?
As a countermeasure, NAF was relatively quick to engage in leasing activities at rentlevels that would facilitate to conclusion of contracts. We are currently concluding
contracts at levels recorded immediately prior to the surge in rents around 2018. While
the outlook for rent levels depends on the balance between property supply and tenant
demand, we do not believe rents need to be significantly reduced any further given thecompetitive advantage that properties owned by the Investment Corporation maintainin terms of their quality.
While occupancy rates have bottomed out, fluctuations in rents at the time of tenant
turnover are becoming increasingly marked. Are there any plan to increase the ratio ofcorporate tenants in order to manage fluctuations in rent?
There are few specified examples of corporations leasing in bulk properties owned by
NAF. There are cases where tenants select a property on their own and conclude acontract in the name of their employer. Or alternatively, where the contract is in thename of an individual with the rent subsidized by the employer. Taking these factors
into account, we do not believe that increasing the percentage of corporate contracts
will stabilize rents.
The occupancy rate for the portfolio as a whole has stabilized at around 96%. What isyour outlook for the future? While not anticipating any further deterioration, do you
see little potential for occupancy rates to reach the 97-98% level when supply anddemand were tight?
As you correctly point out, we believe that the occupancy rate will remain in the low
96% range for the time being, which is the level before supply and demand were tight.
Currently, occupancy rates for compact and larger categories are firm. While forecasts
are based on the assumption that the volume of contracts concluded will be at thecurrent level, we do see an upside should demand in the single category exceedexpectations.
Can you tell us about NAF’s strategy regarding properties to be acquired from thesponsor pipeline, including such factors as location and unit type.

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We do not see any problems for each property as far as location is concerned.
In recent years, our sponsor has been developing properties with a higher percentageof spacious units, which are in high demand, rather than focusing solely on one-roomor single rental apartments. We do not believe there are any properties that cannot be
acquired from the perspective of category and type. More to the point, our focus at thetime of acquisition is on how to best present price while reflecting the difference
between the high rents of tenants who moved in before the COVID-19 pandemic andthe current market rents.

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Relocation data of tenants who cancelled their contracts is disclosed in the financial
results presentation materials. Do you have data on where tenants came from whenmoving into a property?
We do not have this data and therefore are unable to respond.

Q
A

What is the current level of the rent gap, given the continued rise in unit rents?
Since fluctuations in rents at the time of tenant turnover are probably close to the current
rent gap, we believe the current rent gap is around 2%.

Q

Demand for telework is increasing. Are you taking steps to include workspace areas asa part of renovations? And, is there any impact on soliciting and marketing activities?
While certain larger properties have installed workspaces in common areas, space atstandard-sized Park Axis properties is limited. Currently, there is little in the way ofactivity in this area.

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