[For Translation Purposes Only]
October 2, 2015

For Immediate Release
To Whom It May Concern

Nomura Real Estate Master Fund, Inc.
Securities Code: 3462
Satoshi Yanagita, Executive Director
Asset Management Company:
Nomura Real Estate Asset Management Co., Ltd.
Norio Ambe, President & Chief Executive OfficerInquiries:
Motomi Uki
Head of NMF Investment Management Group
TEL. +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Revision to Forecasts of Financial Results
for the Fiscal Period Ending February 29, 2016 and the Fiscal Period Ending August 31, 2016Nomura Real Estate Master Fund, Inc. (the “Corporation”), announced today the revision to forecasts of the financial results forthe fiscal period ending February 29, 2016 (October 1, 2015 to February 29, 2016) and the fiscal period ending August 31, 2016
(March 1, 2016 to August 31, 2016) of the Corporation that were announced by former Nomura Real Master Fund, Inc. (“NMF”),
Nomura Real Estate Office Fund, Inc. (“NOF”) and Nomura Real Estate Residential Fund, Inc. (“NRF”) in the press release“Notice Concerning Forecasts of Financial Results for the Fiscal Period Ending February 29, 2016 and the Fiscal Period EndingAugust 31, 2016 following the Merger between Nomura Real Estate Master Fund, Inc., Nomura Real Estate Office Fund Inc., andNomura Real Estate Residential Fund, Inc.” dated May 27, 2015, as follows.
1.

Revised Forecasts of Financial Results for the Fiscal Period Ending February 29, 2016
Cash
Cash
Distribution
Distribution
Distribution in
Per Unit
Per Unit
OperatingOperating
Ordinary
Excess of Net
Net Income(Excluding(Including
IncomePer
Revenues
IncomeIncomeDistribution inDistribution inUnit(Millions of Yen) (Millions of Yen) (Millions of Yen) (Millions of Yen) Excess of Net
Excess of Net(Yen)
Income)Income)(Yen)PreviousForecast(A)
Revised
Forecast(B)
Amount ofIncrease/Decrease(B-A)
Ratio ofIncrease/
Decrease2.

(Yen)

24,137

6,292

3,581

3,580

962

1,138

2,100

24,288

6,273

3,636

3,635

976

1,124

2,100

150

▲1954

54

14

▲14－

0.6%

▲0.3%

1.5%

1.5%

1.5%

▲1.2%

－

Revised Forecasts of Financial Results for the Fiscal Period Ending August 31, 2016

Operating
Revenues

Operating
IncomeOrdinary
Income(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

Cash
Cash
Distribution Distribution in Distribution
Per Unit
Per Unit
Excess of NetNet Income(Excluding(Including
Income Per
Distribution inDistribution in(Millions of Yen)
Unit
Excess of Net
Excess of Net(Yen)
Income)Income)(Yen)

Previous
Forecast(A)
Revised
Forecast(B)
Amount ofIncrease/
Decrease(B-A)
Ratio ofIncrease/
Decrease(Yen)

29,642

10,662

8,088

8,087

2,173

537

2,710

29,723

10,801

8,178

8,177

2,197

513

2,710

80

139

89

89

24

▲24－

0.3%

1.3%

1.1%

1.1%

1.1%

▲4.5%

－

[Notes]1. The fiscal period ending February 29, 2016 (the first fiscal period) of the Corporation will be from October 1, 2015 toFebruary 29, 2016. The fiscal periods ending August 31, 2016 (the second fiscal period) and thereafter will be fromMarch 1 to the end of August and September 1 to the end of February of following year.
2. Forecast of the financial results for the fiscal period ending February 2016 (the first fiscal period) is based on a calculation
period of 5 months (152 days), and the amount of cash distribution per unit (including distribution in excess of net income)for the 6-month equivalent based on the revised forecast would be 2,520 yen.
3. Anticipated total number of investment units as of the end of the fiscal periods is 3,722,010 units.
4. The forecasts presented in this document are calculated as of today, based on the assumptions set forth in the attached“Assumptions for Forecasts of the Financial Results for the Fiscal Periods Ending February 29, 2016 (First Fiscal Period)and August 31, 2016 (Second Fiscal Period)” as Exhibit. The actual operating revenues, operating income, ordinary
income, net income and cash distribution per unit may differ due to future acquisition or disposition of properties, changesin the real estate market, and other factors affecting the New Investment Corporation. We do not guarantee the amount ofcash distribution stated above.
5. In these forecasts, the goodwill from the consolidation-type merger (he “Merger”) between NMF, NOF and NRF, throughwhich the Corporation is established, is provisionally estimated to be “76,383 million yen” and the goodwill is scheduled tobe accounted as assets and amortized using the straight-line method over 20 years on a regular basis, premised on theadoption of the Accounting Standard for Business Combinations, as amended on September 13, 2013. The actual amount ofthe goodwill may differ from the amount stated above. Please refer to “Amortization Expenses for Goodwill” in theattached “Assumptions for Forecasts of the Financial Results for the Fiscal Periods Ending February 29, 2016 (First FiscalPeriod) and August 31, 2016 (Second Fiscal Period)” as Exhibit for details.
6. Distribution in excess of net income per unit consists of distribution of the reserve for temporary difference adjustments
and distribution other than that (the “Distribution Reducing Unitholders’ Capital for Tax Purpose”). For the revised forecast,of the 1,124 yen of distribution in excess of net income per unit for the first fiscal period, the reserve for temporary
difference adjustments is expected to be 621 yen and the Distribution Reducing Unitholders’ Capital for Tax Purpose isexpected to be 503 yen, and the entire amount of 513 yen of distribution in excess of net income per unit for the second
fiscal period is expected to be the Distribution Reducing Unitholders’ Capital for Tax Purpose. For your reference, thereserve for temporary difference adjustments is treated as dividends for tax purposes and is subject to withholding. Inaddition, the Distribution Reducing Unitholders’ Capital for Tax Purpose falls under a return of capital for tax purpose, andin principle, the large part of such amount is treated as the amount of income generate from transfer of investment units(some part may be treated as deemed dividend).
7. The forecasts may be revised if a certain variance from the forecasts mentioned above is expected.
8. Amounts less than the stated units are rounded down.
3.

Reason for Revision
The amount of goodwill that is scheduled to be accounted due to the Merger has almost been determined through provisional
estimation of the total amount of investment unites of the Corporation to be delivered to the unitholders of NOF and NRF(consideration for the Merger) based on the market price of the investment units of NMF, the acquiring corporation under theAccounting Standard for Business Combinations on September 25, 2017 (closing price), the last trading day for suchinvestment units. In relation thereto, the Corporation announced the revised forecast of the financial results for the fiscal
period ending February 29, 2016 and the fiscal period ending August 31, 2016 as of today.

*Nomura Real Estate Master Fund, Inc. URL: http://www.nre-mf.co.jp/english/

[Exhibit]
Assumptions for Forecasts of the Financial Results for the Fiscal Periods
Ending February 29, 2016 (First Fiscal Period) and August 31, 2016 (Second Fiscal Period)
ItemPeriod

AssumptionsFirst Fiscal Period: October 1, 2015 to February 29, 2016
Second Fiscal Period: March 1, 2016 to August 31, 2016

 It is assumed that the in addition to the properties owned by the Corporation

Investment Portfolio(257 properties) (the “Acquired Assets”) as of today, the Corporation will
acquire 4 properties (NRE Kichijoji Building, GEMS Ichigaya, PROUDFLAT Hatchobori and PROUD FLAT Itabashi Honcho) on October 30, 2015
and 3 properties (PMO Tamachi, PMO Ginza Hatchome and PMO Shibakoen)
on March 1, 2016 (collectively, the “Assets to Be Acquired”) as described in“Notice Concerning Acquisition of Assets” released as of today.

 In forecasting the financial results, it is assumed that the Corporation will haveacquired the Assets to Be Acquired on each scheduled acquisition date, andassumes that there will be no changes in assets under management (newproperty acquisitions or sales of portfolio properties) until August 30, 2016.
 The forecasts may be subject to changes, due to the shifting of the portfolio.
 Leasing income is estimated based on the information provided by the current

Operating Revenues

owners of the Assets to Be Acquired, the tenant trends, competitive properties
located in adjacent areas, and the real estate market conditions, etc., andassuming that there are no arrears and nonpayment cases.
 In respect of leasing expenses, which constitute a principal component ofoperating expenses, expenses other than depreciation and amortization arecalculated based on the historical data reflecting factors that may cause
expenses to fluctuate, based on the information provided by the current
owners of each Asset to be Acquired.
 In general, the fixed asset taxes and urban planning taxes of the Assets to Be
Acquired are divided between the seller and the purchaser on a pro-rata basis
based on holding period and settled at the time of acquisition, and such taxes
are deemed as acquisition costs and are not included in the expenses.
 The tax amount is estimated to be ¥2,113 million for the fiscal period endingFebruary 29, 2016 (the first fiscal period) and ¥2,339 million for the fiscal
period ending August 31, 2016 (the second fiscal period). These amounts areincluded in the leasing expenses.
 The outsourcing fee is estimated to be ¥2,389 million for the fiscal period

Operating Expenses(excluding Amortization
Expenses for Goodwill)ending February 29, 2016 (the first fiscal period) and ¥2,974 million for thefiscal period ending August 31, 2016 (the second fiscal period).
 Maintenance and repair expenses required for each fiscal period are calculated

based on the mid-to-long term repair plans the asset management company
has established. However, the actual expenses for the maintenance andrepair for the fiscal periods may differ significantly from the estimates due toexpenses for urgent repair on damages to a building caused by unforeseeable
events, the tendency for significant fluctuation in amounts year by year orexpenses for certain types of repair not required periodically.
 Depreciation and amortization are estimated to be ¥3,322 million for the fiscal
period ending February 29, 2016 (the first fiscal period) and ¥4,137 million
for the fiscal period ending August 31, 2016 (the second fiscal period).
However, the book values as of the effective date of the Merger of thebuildings and other properties are not fixed and may be subject to changes.
 Leasing expenses are estimated to be ¥11,717 million for the fiscal period
ending February 29, 2016 (the first fiscal period) and ¥13,818 million for thefiscal period ending August 31, 2016 (the second fiscal period).
 The amount to be recorded as the merger related expenses is estimated to be¥2,597 million for the fiscal period ending February 29, 2016 (the first fiscalperiod).

 Other operating expenses (fees payable to the asset management company, thecustodian of assets and the general administrators) are estimated to be ¥4,706
million for the fiscal period ending February 29, 2016 (the first fiscal period)and ¥3,193 million for the fiscal period ending August 31, 2016 (the secondfiscal period).
 Goodwill is expected to accrue upon the Merger and will be accounted as

Amortization Expenses
for Goodwill

assets and amortized using the straight-line method over 20 years on a regularbasis pursuant to the Accounting Standards for Business Combinations(Statement No. 21), as amended on September 13, 2013. Currently, theamount of goodwill is provisionally estimated to be ¥76,383 million. Suchamount is calculated on the assumption that the Corporation have succeeded
the assets (¥559,304 million in total) and liabilities (¥320,388 million in total)from NOF and NFR, the acquirees under such accounting standards, and theacquisition cost of the Merger will be ¥315,299 million (calculated based on
the closing price (¥153,300) on September 25, 2015, the last trading day, ofinvestment units of NOF, the acquirer under such accounting standards).
However, the amount of goodwill is not fixed and may be subject to changes.
The goodwill amortization is provisionally estimated to be ¥1,591 million for
the fiscal period ending February 29, 2016 (the first fiscal period) and ¥1,909
million for the fiscal period ending August 31, 2016 (the second fiscal period).
 The goodwill amortization is the item that will cause the difference between
accounting and tax treatment and may result in the imposition of corporationtax or other tax. Following the tax reform in tax year 2015, the New
Investment Corporation intends to make cash distributions in excess of its
profits for the purpose of tax relief during the goodwill amortization period,and it is expected that the New Investment Corporation will be able to avoid
such taxation.
 Listing and other related expenses are estimated to be ¥470 million as

Non-Operating Expenses

temporary expenses for the fiscal period ending February 29, 2016 (the firstfiscal period).
 Interest expenses and borrowing related expenses are estimated to be ¥2,315million for the fiscal period ending February 29, 2016 (the first fiscal period)and ¥2,780 million for the fiscal period ending August 31, 2016 (the secondfiscal period).
 As of the today, the outstanding interest-bearing debts of the Corporation is¥394,747 million in total, consisting of borrowings (¥347,247 million) andinvestment corporation bonds (¥47,500 million).
 Portions of the borrowings (¥11,082 million) will become due and payable by
the end of the fiscal period ending February 29, 2016 (the first fiscal period).
It is assumed that the New Investment Corporation will repay ¥382 million byusing cash on hand and refinance the entire remaining amount throughborrowings.
Although portions of the investment corporation bonds(¥15,000 million in total) will reach maturity by the end of the same fiscal
period, it is assumed that the New Investment Corporation will redeem suchbonds through the funds raised by the borrowings or other funding methods.
 Portions of the borrowings (¥26,322 million) will become due and payable byInterest-Bearing Debts

the end of the fiscal period ending August 31, 2016 (the second fiscal period).
It is assumed that the New Investment Corporation will repay ¥92 million byusing cash on hand and refinance the entire remaining amount throughborrowings. No investment corporation bonds will reach maturity by the endof the same fiscal period.
 It is assumed that the New Investment Corporation will borrow ¥9,300 million
in new loans to finance the acquisition of 4 properties on October 30, 2015.
 It is assumed that the New Investment Corporation will borrow ¥14,700

million in new loans to finance the acquisition of 3 properties on March 1,2016.
 It is assumed that there will be no changes in the amount of the outstanding
borrowings and investment corporation bonds (including the short term
investment corporation bonds) other than the amount stated above.
Investment Units

 It is assumed that the number of investment units outstanding will be3,722,010 units, the outstanding units as of today, and no new investment
units will be issued until the end of fiscal period ending August 31, 2016 (thesecond fiscal period).
 Cash distribution per unit is calculated based on 3,722,010 units of the New
Investment Corporation to be issued upon the merger.
 Cash distributions per unit is calculated according to the Corporation’s

Cash Distributions perUnit

distribution policy outlined in its Articles of Incorporation.
 Cash distributions per unit may differ due to various factors, includingchanges of portfolio, changes in leasing income caused by change in tenants,and unforeseen repairs.
 The amount of distribution in excess of net income is estimated on theDistribution in Excess ofNet Income per Unit

assumption that, for the purpose of tax relief, the New Investment Corporationwill distribute the amount equivalent to the total amount of the goodwill
amortization, etc. that will cause the difference between accounting and tax
treatment, and may result in the imposition of corporation tax or other tax.
In order to alleviate the impact of the goodwill amortization and other merger
related expenses (the “Merger Expenses”) on cash distribution, the above
estimate is based on the assumption that, if the total amount of the difference
between accounting and tax treatment for each fiscal period is less than theMerger Expenses, the New Investment Corporation will make distribution inexcess of net income by adding such amount up to the amount of MergerExpenses, within the limit as prescribed by the regulations of the Investment
Trusts Association, Japan (meaning the entire amount equivalent to theincrease in the reserve for temporary difference adjustments plus the amountequivalent to 60/100 of the difference between the cumulative amount ofdepreciation and amortization recorded as of the end of the relevant
calculation period and that of the end of the prior calculation period withrespect to the Distribution Reducing Unitholders’ Capital for Tax Purpose(ordinary distribution in excess of net income)).
 It is assumed that there will be no amendments in legislation, taxation,Othersaccounting principles, listing requirements and the Investment Trusts
Association, Japan regulations, which affect the above forecasts.
 It is assumed that there will be no material changes in general economic
conditions and real estate markets.