PROUD FLAT Kamioooka

Analyst Meeting Presentation Material

2015.Jan.19

Contents of the 16th Fiscal Period (June 1 to November 30, 2014) Analyst Meeting Presentation Material

Topics・Newly Acquired Properties
・Overview of Newly Acquired Properties ①
・Overview of Newly Acquired Properties ②
・Overview of Newly Acquired Properties ③

APPENDIX
2
3
4
5

Digest of the 16th Fiscal Period

・Digest of the 16th Fiscal Period ①・Digest of the 16th Fiscal Period ②

8

10
11
12
13
14

Management Strategies

・・Path of the Growth Strategy
・Acceleration of Replacement Strategy ① (Sponsor Support ①)・Acceleration of Replacement Strategy ② (Sponsor Support ②)・Acceleration of Replacement Strategy ③ (Sale Policy)
・Pursuit of Internal Growth ① (Renewal of Continually Owned Properties)
・Pursuit of Internal Growth ② (Increase of Tenant Satisfaction)
・LTV and Cash Distribution Policy
・Forecast Cast Distribution for the 17th Fiscal Period
Management Strategies

・Income Statement
・Balance Sheet・Forecasts for the 17th Fiscal Period
・Unitholders
・Changes in Investment Unit Price and Cash Distribution

27
28
29
30
31

7

Overview of the 16th Fiscal Period

・Sales・Changes in the Occupancy Rate・Changes in Rent
・Appraisal Value Status at End of the 16th Fiscal Period・Financial Status

Details of 16th Fiscal Period (Ended Nov. 2014) Financial Statement

16
17
18
19
20
21
22
23
24

Characteristics of NRF

・Characteristics of NRF
・Support from the Nomura Real Estate Group・Priority Investment in Key Segments ① (Features of Rental Housing)・Priority Investment in Key Segments ② (Future Outlook and Demand)
・Priority Investment in Key Segments ③ (Main Investment Targets of NRF)
・Rental Housing Market
・Utilization of Diverse Sourcing Routes
・Portfolio Status
・Changes in Revenues
・Portfolio Map (Greater Tokyo Area)
・Portfolio Map (Other Areas)
・Portfolio
・Changes in Financial Indicators
・Interest-Bearing Debts
・Fund Profile
・Asset Management Company Overview

33
34
35
36
37
38
39
40
41
42
43
44～48
49
50
51
52

Topics

1

Newly Acquired Properties
Properties Acquired on December 19, 2014

PRIME URBAN Naka Meguro II
Location

3-1-3 Kamimeguro, Meguro-ku, Tokyo

PRIME URBAN Nagahara Kamiikedai

PRIME URBAN Nishi Ogikubo II

1-20-18 Kamiikedai, Ota-ku, Tokyo

3-6-9 Nishiogikita, Suginami-ku, Tokyo

Tokyu Toyoko Line.

3-minut e walk from Nagahara Station on the Tokyu

3-minut e walk from Nishi-Ogikubo Station on The JR

2-minut e walk from Nakameguro Station on The

Ikegami Line.

Chuo Line and Sobu Line.

\1,730,000 thousand\1,790,000 thousand

2-minut e walk from Nakameguro Station on The
AccessTokyo Metro Hibiya Line.
Appraisal Value
Acquisition Price(Comparison with appraisal value)
NOI(Appraisal NOI ÷ Acquisition price)

Characteristics\2,850,000 thousand\2,800,000 thousand\131,716 thousand（-\50,000thousand）（4.7％）\1,720,000 thousand\81,717 thousand（-\10,000 thousand）（4.8％）\1,780,000 thousand\82,624 thousand（-\10,000 thousand）（4.6％）All are located within a 5-minute walking distance from the nearest stations in the popular Jonan and Josai areas,and high performance is expected.

※. Appraisal values and Appraisal NOI are figures described in the real estate appraisal reports with October 31, 2014 as the appraisal date. Appraised NOI values are annualized.

2

Overview of Newly Acquired Properties ①
PRIME URBAN Naka Meguro II
・There is a supermarket and other facilities for life convenience nearby, andthere are many restaurants and shops in the station-front redevelopment area
and along Meguro River. The area is very popular not only for residences but asa commercial area as well.
・The units consist primarily of 1K and 1LDK layouts. Demand from single
adults and DINKs employed in central Tokyo with relatively high income isexpected.

2-minute walkNakameguro
Station（C）Yahoo JAPAN / copyright(C)2015 ZENRIN CO.,LTD. (Z15LE No. 632)
Location

3-1-3 Kamimeguro, Meguro-ku, Tokyo

Access2-minute walk from Nakameguro Station on The Tokyu Toyoko Line.
2-minute walk from Nakameguro Station on The Tokyo Metro Hibiya Line.

Leasable Units

66 units(Under 30 sq. meters: 16 units, 30-50 sq. meters: 48 units, Retail/Office : 2 units)

Total Leasable Floor Area

2,393.45sq. meters

StructureRC, 10F

Completion Date

January 15, 2002

Property Management Company

Nomura Real Estate Partners Co., Ltd.

Acquisition Price\2,800,000 thousand

Scheduled Date of Acquisition

December 19, 20143

Overview of Newly Acquired Properties ②
PRIME URBAN Nagahara Kamiikedai
・An excellent residential district is in place with a shopping street in front of thestation.
・The units consist primarily of 1K and 1LDK layouts. Since the equipment
specification grade is high such as with some windows being equipped withmagnet sensors for the prevention of crime and downlights with dimming
functions, demand from single adults and DINKs employed in Tokyo is expected.

3-minute walk
Nagahara Station（C）Yahoo JAPAN / copyright(C)2015 ZENRIN CO.,LTD. (Z15LE No. 632)
Location

1-20-18 Kamiikedai, Ota-ku, Tokyo

Access3-minute walk from Nagahara Station on the Tokyu Ikegami Line.
11-minute walk from Hatanodai Station on The Tokyu Ikegami Line and Oimachi Line.

Leasable Units

61 units(Under 30 sq. meters: 22 units, 30-50 sq. meters: 34 units, 50-70 sq. meters: 5 units)

Total Leasable Floor Area

2,282.62sq. meters

Structure

RC, B1/10F

Completion Date

January 30, 2008

Property Management Company

Nomura Real Estate Partners Co., Ltd.

Acquisition Price\1,720,000 thousand

Scheduled Date of Acquisition

December 19, 20144

Overview of Newly Acquired Properties ③
PRIME URBAN Nishi Ogikubo II・Access to major business areas in Tokyo is excellent and there are many
facilities for life convenience near the station.
・The units consist primarily of 1K layouts. Demand from single adults
employed in Tokyo is expected.

4-minute walkNishi-Ogikubo
Station（C）Yahoo JAPAN / copyright(C)2015 ZENRIN CO.,LTD. (Z15LE No. 632)

Location

3-6-9 Nishiogikita, Suginami-ku, Tokyo

Access4-minute walk from Nishi-Ogikubo Station on The JR Chuo Line and Sobu Line.

Leasable Units

76 units(Under 30 sq. meters: 58 units, 30-50 sq. meters: 18 units)

Total Leasable Floor Area

2,225.33sq. meters

StructureRC, 6F

Completion Date

February 1, 2008

Property Management Company

Nomura Real Estate Partners Co., Ltd.

Acquisition Price\1,780,000 thousand

Scheduled Date of Acquisition

December 19, 20145

Digest of the 16th Fiscal Period

6Digest of the 16th Fiscal Period ①
Operating Results of the 16th Fiscal Period
Acquisition（17th）

 Continuation of the portfolio replacement strategy
3 Properties（0.93billion） disposition

URBAN STAGE Minami
Gyotoku IV（21years）

URBAN STAGE Minami
Gyotoku II（23years）

URBAN STAGE Komazawa（25years）

Number of
Properties

Leasable Units

9,054 units

Management

PRIME URBAN Nishi
Ogikubo II（6years）

Asset Size

¥165.61 billion

Number of
Properties

Leasable Units

153 Properties
9,257 units

Finance(Comparison withof previous
 Continued maintenance of 16th FP end
period)96.2％ ＋0.4％
high occupancy rate

Period averageoccupancy rate

96.0％

5.2％

 Refinanced ¥3,730 million and repaid ¥2,930 million
16th FPCompletion of re-tenanting at
PROUD FLAT Kamiooka (single-tenant property)※.

PRIME URBAN Nagahara
Kamiikedai（6years）

150 Properties¥159.31 billion

 Portfolio NOI Yield

PRIME URBAN Naka
Meguro II（12years）

Portfolio after acquisition of 3 properties

Portfolio at Nov. 30, 2014

Asset Size

3 Properties（6.3billion） acquisition

Asset
replacement

LTV

PROUD FLAT Kamioooka（Leasable Units 200units）

Weighted Average
Interest Rate

52.7％
1.18％

Average Remaining
Duration of Interestbearing Debt

3.1years

The building age is as of the point of acquisition or sale of each property. In addition, amounts are the total of acquisition prices at the point of acquisition.

7

Digest of the 16th Fiscal Period ②
Comparison of Previous Forecasts for and Results of the 16th Fiscal Period(Forecast Announced in Jul. 2014)

16th FP Forecasts(ending Nov. 30, 2014)

16th Fiscal Period(ended Nov. 30, 2014)

Operating Revenues¥5,406 million¥5,480 million+ 1.4 %

Operating Profits¥2,382 million¥2,423 million+ 1.7 %Net Income¥1,825 million¥1,877 million+ 2.9 %Net Income Per Unit

¥11,351¥11,674+ 2.8 %Cash Distribution Per Unit

¥11,600¥11,600-

Difference(comparison with forecast)(yen / unit)

Net Income
Per Unit￥11,674

11,800+￥66

11,600(Major factors)
・Key money+￥43 ・US Komazawa

Net Income
Per Unit

・Renewal fees+￥87

¥11,351

・ PF Kamioooka-￥49・ PU Nishiwaseda-￥49

・ PU Kachidoki-￥37

・ Other

16th FP (forecast)
16th FP (forecast)

12 million
40 million

+￥7

+￥172

￥249
11,30016th FP+￥78

Reversal of provision
for reserve for
reduction entry

10,800

Provision for reserve
for reduction entry ￥74

・US
MinamigyotokuⅡ

+￥286

-￥279

revenues+￥43

・Operational
expenses+￥62

・Leasing expenses-￥80

・Other+￥53

・Interest Expense& Loan-related
+￥46
Fee

52 million

Utilize for stabilizing
cash distributions in
the future

Cash Distribution Per Unit

¥11,600

Reference(incorporated into forecasts)

・US
MinamigyotokuⅣ

+￥37

+￥177

Rental business
Rental businessrevenues

・Consumption tax

Total provision for reserve
for reduction entry

Property sale

Property sale

・Other+￥20

Operating
Non-operating
16th FP (results)
Operatingexpenses Non-operating
expenses
profit and profit
loss 16th FP (results)
and loss※. PF stands for PROUD FLAT, PU for PRIMEURBAN and US for URBAN STAGE.

8

Overview of the 16th Fiscal Period

9Sales✓ 3 properties were sold during the 16th fiscal period.
✓ All properties (average building age of 23 years) were sold at prices above
the appraisal values.

URBAN STAGE Minami Gyotoku

Please see page 20 for our future sale policy.

URBAN STAGE Komazawa

URBAN STAGE Minami Gyotoku II

17-minutes walk from Minami-gyotoku Station on the

3-minutes walk from Komazawa Daigaku Station on the

18-minute walk from Minami Gyotoku Station on the Tokyo

Tokyo Metro Tozai Line.

Tokyu Denentoshi Line.

Metro Tozai Line.

Leasable Units

32 units(Average leasable floor area per unit: 16.72㎡)

26 units(Average leasable floor area per unit: 22.02㎡)

37 units(Average leasable floor area per unit: 16.53㎡)

Completion Date

April 12, 1993

Acquisition Price\256,000 thousand\396,000 thousand\285,000 thousand\243,476 thousand\399,641 thousand\278,483 thousand

AccessBook Value(as of transfer date)
Appraisal Value
Transfer Price(comparison with appraisal
value)
Transfer Date
Disposition profit and loss

（21years）\218,000 thousand(as of May 31, 2014)\256,840 thousand（+38,840 thousand）

July 21, 1989

（25years）\346,000 thousand\461,000 thousand(as of May 31, 2014)（+115,000 thousand）

January 15, 1991

（23years）\231,000 thousand\240,349 thousand(as of May 31, 2014)（+9,349 thousand）

June 30, 2014

November 27, 2014

November 28, 2014

+6,193 thousand+46,640 thousand▲45,281 thousand※1. Building ages are as of the sale date.
※2. Gain/loss on sale is arrived at by subtracting the amount including the book value at the point of sale and the paid settlement money from the proceeds of the sale including

settlement money such as expenses. For details, please see the financial results for the 17th fiscal period.

10

Portfolio Occupancy Rate
✓ The period average occupancy rate was maintained at a high level in the 96% level for 4 consecutive periods.
✓ The average vacancy period increased slightly but continues to be stable in the 60 day level.
Portfolio Occupancy Rate（％）

Total Portfolio

100

97.5
95.9

95.7

95.8

96.7

96.4

96.7

96.4

96.2

96.1

95.9

96.2

95.7

96.0

96.3

97.3

96.6

95.8

95.6

95.6

95.7

96.4

96.3

96.2

95

90

85

14th Fiscal Period
Average: 96.2%

13th Fiscal Period
Average: 96.3%

15th Fiscal Period
Average: 96.3%

16th Fiscal Period
Average: 96.0%

80
Dec
2012

Jan
2013

Feb

Mar

Apr

May

Jun

Jul

 Number of Move-ins and Move-outs（cases）

Aug

Sep

-500

Dec

Jan
2014

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

 Average Vacancy Period（Days）

90

1,000

0

Nov

Move-inMove-out
Increase and Decrease

1,500

500

Oct

80

1,303

1,179

985

931
5

-31

39

19
-926

69

69
60

65
60

-966

-1,14050-1,334-1,00070

40-1,50013th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov. 30, 2014)

13th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov. 30, 2014)※. The average vacancy period is the average period between the moving out of tenants and the contracting of new tenants.

11

Changes in Rent
✓ The ratio of increase of rent for new tenant replacements increased year on year (stable replacement period).
✓ The rent level continues to be largely flat.



Increase

100
100%

50
50%



Rent Change Before Move-out and After Move-in

（％）

45.9

46.6

19.4

20.8

34.7

32.6

13th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

38.6

17.7

43.7

Flat

Decrease



100
100%

Increase

Flat

Decrease

2.9

1.1

5.7

1.1

50%

95.7

98.0

94.1

98.8

0
0%

1.4
13th FP End(May 31, 2013)

0.9
14th FP End(Nov. 30, 2013)

0.2
15th FP End(May 31, 2014)

0.1
16th FP End(Nov. 30, 2014)

46.4

50

16.8

36.8

0
0%
15th FP End(May 31, 2014)

Rent Change at Lease Renewals（％）

16th FP End(Nov. 30, 2014)

Rate of Change in Rent per Property

2.0%

16th FP breakdownby area

1.0%

Sendai：＋0.20GreaterTokyo Area ： - 0.04

0.0%

-0.26
-1.0%

-0.40

-0.06

Sapporo-0.15 Nagoya： - 0.14： - 0.27

Osaka： - 0.37

Fukuoka： - 0.89-2.0%

13th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov. 30, 2014)※.The rate of change of rent per property based on properties owned as of the end of the previous fiscal period is indicated.

12

Appraisal Value Status at End of the 16th Fiscal Period✓ Transition to unrealized gain is made in the 16th fiscal period along with the increase of the appraisal value.
✓ Active management will continue in order to achieve further increase.

（billion）
165

Book value andappraisal value

Total Book Value

Appraisal Value

160.21 billion

160155
150.09 billion

149.97 billion

141.01 billion

141.83 billion

149.65 billion

155.47 billion

157.79 billion

156.59 billion

156.32 billion

156.02 billion

150

145
140

Unrealized
gain/loss

143.06 billion＋0.56 billion

2.5
0
-2.5

-1.47 billion-5-4.75 billion

-7.5
-10

-6.59 billion-9.09 billion

Increase
Flat
Decrease

114 properties
15 properties
21 properties-8.14 billion（11th FP）

（12th FP）

（13th FP）

（14th FP）

（15th FP）

（16th FP）

Average appraisal
CAP (NCF)

5.46 ％

5.41 ％

5.34 ％

5.29 ％

5.17 ％

5.08 ％

NAV per unit

¥ 408,976¥ 415,411¥ 425,639¥ 438,056¥ 458,678¥ 470,826
BPS ¥ 467,340

13

Financial Status
Overview of Refinancing in the 16th
Fiscal Period
6,660 million

Interest Rate

2.5years

Weighted Average
Interest Rate

160
16

Average Remaining
Duration ofInterest-bearing
Debt

3,730 million Weighted Average

Average Remaining
Duration ofInterest-bearing
Debt

6.74years

140
14

1.07％

120
12

（million）

Repaid withcash on hand・ Repaid before maturity ：1,840
・ Repaid at maturity

2,930 million ・ Amortization

0.84％

Maturity Diversification（billion）

Loans matured during the 16th fiscal period
Refinancing（：1,000
： ,90

Bonds

Debt

Refinance

New borrowings (for acquisition of 3 properties)

Refinancing in the 16th FP¥3.73billiom¥0.75billion
New borrowings

100
10(for acquisition of 3 properties)¥4.4billion

880¥2.98billion

660

Interest-bearing Debt
Interest-bearing Debt Total

440Weighted Average Interest Rate

1.18 ％￥86,820 million
Long-term Interest-bearing Debt Ratio

99.1 ％

LTV Level

3.1 years

52.7 ％

Credit Rating
Agency
JCR

S&P

20
2
00

16th

18th

20th

22nd

24th

26th

28ｔｈ

30ｔｈ

32ｔｈ

FP

FP

FP

FP

FP

FP

FP

FP

FP

Fixed-rate Interest-bearing Debt Ratio

79.8 ％
Average Remaining Duration ofInterest-bearing Debt

6 .66billion

Weighted Average Interest Rate and Average Remaining
Duration of Interest-bearing Debt
（％）
1.5

1.0
RatingAverage Remaining Duration of Interest-bearing Debt

（year）

Weighted Average Interest Rate

1.28

1.27

1.24

1.17

1.16

5.0

1.18

1.18

OutlookLong-term issuer rating:AA

StableLong-Term
Corporate Credit Ratings:

A

StableShort-Term
Corporate Credit Ratings:

A-1

3.0
0.5

3.2

3.1

3.0

14th

15th

16th

FP

FP

FP

After acquisitionof 3 properties

2.4

2.6

2.7

2.9

11th

12th

13th

FP

FP

FP

1.0

0.0

※.Investment Corporation Bonds are included in the “Interest-bearing Debt.”※. Long-term Ratio, when including “long-term loans due within a year” in long-term loans, is 100.0%.
※. Loan Interest Rate Fixed Ratio” includes floating rate loans which have been fixed through interest rate swaps.

14

Management Strategies

15

Management Strategies✓ Aiming to improve the portfolio and performance to realize stable cash distributions in the medium- to long-term

Acceleration of
replacement strategy

Property acquisitions centering on sponsor support
Active sale of properties
Pages 17 to 20

 Renewals to increase competitiveness

Further pursuit of internal
 Maintaining high occupancy by increasing tenant satisfaction
growthPages 21 to 22

Creation of capacity
for acquisitions

 Controlling the LTV level
Page 23

16

Path of the Growth Strategy✓ Maintain stable distributions while aiming to increase the asset size
✓ Accelerate the replacement strategy to maintain the quality of the portfolio in tandem with the increase of the asset size
Asset size target
Properties planned/developedby Nomura Real Estate
Development

Primarily properties
planned/developed bycompanies other than Nomura
Real Estate Development

300.0billion
Medium-term goal

200.0billion
165.6billion
161.9billion
149.8billion
131.4billion
110.3billion

67.0billion

1stFP

・・・

・・・

・

3rdFP

7thFP

Accelerationof・・replacement strategy
・・

11thFP

14th FP

Present

Maintain stable distributions

17

Acceleration of Replacement Strategy ① (Sponsor Support ①)✓ Property acquisitions going forward will center on PROUD FLAT properties developed by the sponsor✓ Furthermore, acquisitions from the outside using the Asset Management Company’s own routes will be implemented
selectively with consideration of the contribution to the whole portfolio

Acquisitions from outside

オフィス

物流施設

住宅

商業施設

NOMURA REAL ESTATE RESIDENTIAL FUND, INC.
（Residential）

NOMURA REAL ESTATE OFFICE FUND, INC. （Office）
NOMURA REAL ESTATE MASTER FUND, INC.（Logistics・Retail）
NOMURA REAL ESTATE PRIVATE REIT, INC.（A diversified portfolio）

18

Acceleration of Replacement Strategy ② (Sponsor Support ②)

PROUD FLAT Hattyoubori

PROUD FLAT Sangen JayaⅡ
Total
No.

Name

Total

number Scheduled completion

No.

Name

of units

number Scheduled completionof units

1

PROUD FLAT TsurumiⅠ

200

Completed in 20099

Higashi-Kanda 1-Chome Project

38

2015

2

PROUD FLAT Sangen JayaⅡ

70

Completed in 2014

10 Nihonbashi Honcho 4-Chome Project

40

2015

3

PROUD FLAT hattyoubori

33

Completed in 2014

11 Meguro Honcho II Project

35

2015

4

PROUD FLAT Itabashi honcho

41

Completed in 201412 Sugamo II Project

33

2015

5

PROUD FLAT OmoriⅢ

49

Completed in 201413 Tomigaya 2-Chome Project

30

2016

6

Kotobashi 1-Chome Project

36

2015

14 Sotokanda 2-Chome Project

75

2016

7

Higashi-Nakano 5-Chome Project

49

2015

15 Noborito Project

79

2016

8

Shinjuku-ku Enokicho Project

35

2015

※.The total number of units and scheduled completion of properties yet to be completed are current schedules and are subject to change.

PROUD FLAT OmoriⅢ

19

Acceleration of Replacement Strategy ③ (Sale Policy)✓ A replacement strategy of sale and acquisition of properties will be promoted to improve the portfolio’s quality.
✓Properties at 20 years of age or older will be targeted; Future performance will be inspected to decide whether to continue
ownership or sell.
（units ）Portfolio properties
Transferred properties (reference)

300
Portfolio average

Building age of

10.8 years

20 years or older

・Partially implement renewal

28 properties

・Inspect ownership period

SaleContinued ownership(¥21.9 billion)

After acertain period ・Consider impact on cash

distributions
・Consider reinvestment(acquisition, repayment ofloans) using proceeds fromsale

Not to be owned

200

Points of sale
・Building age of 20 years or
older・Capacity for improvement of
aged facilities
・Prospects for future
improvement of revenues

100

0
0

5

Acquisitions
Transfers

10

15

20

25

35（year）

30

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

14th FP

15th FP

16th FP(Nov. 2010)(May 2011)(Nov. 2011)(May 2012)(Nov. 2012)(May 2013)(Nov. 2013)(May 2014)(Nov. 2014)

Total

Number of cases

2

1

2

0

1

1

0

0

0

7

Price (\ million)

2,090

940

2,156

0

725

1,260

0

0

0

7,171

Number of cases

1

2

0

1

0

2

4

2

3

15

Price (\ million)

136

1,466

0

274

0

881

1,385

1,670

937

6,749

1,954

▲ 526

2,156

▲ 274

725

379

▲ 1,385▲ 1,670

▲ 937

422

Replacement price※1: Properties acquired upon the 3rd and 4th public offerings are not included as they are not part of the replacement strategy.
※2: The building ages of transferred properties are plotted using the values as of the point of transfer.

20

Pursuit of Internal Growth ① (Renewal of Continually Owned Properties)✓ Renewals were implemented at properties whose ownership was decided to continue to maintain competitiveness✓ Renewal of units are implemented centering on properties where increase of the rent level is expected

Example of large-scale renovation
PRIME URBAN Shinjuku Ochiai

Example of renewal of exclusive area
PRIME URBAN Sangen Jaya II

after<Living room><Entrance>

after

beforebeforeafter<In front of elevator>

before Large-scale renovations and common area ： 2 properties
renewals carried out at
・PRIME URBAN Shinjuku Ochiai
・PRIME URBAN Musashi Koganei

Unit renewals carried out at(Reference: Scheduled for the 17th FP)
・PRIME URBAN Azabu Juban
・PRIME URBAN Tsutsumidori Amamiya： 13 units

・ PRIME URBAN Sangan Jaya II・ PRIME URBAN Komagome
・ PRIME URBAN Kamiuma, etc.

Rate of increase of rent level: 4.3%

21

Pursuit of Internal Growth ② (Increase of Tenant Satisfaction)✓ Integrate system of development/commercialization → ownership/AM → management/leasing to improve marketability and increase tenant satisfaction.
✓ Utilize the know-how of integrated system of production/sale/management of for sale condominiums and get customer needs feedback through PM
and use for the development of the next product.
✓ Questionnaire results show that nearly 80% of occupants are satisfied due to various services, etc. provided by Nomura Real Estate Partners Co., Ltd.
Feedback
Development

REIT

PM・BM

Sponsor support

Commissioning

Occupancy Rate of Properties Commissioned to
Nomura Real Estate Partners (Figures in parentheses are for the entire portfolio)
11th FP

12th FP

13th FP

14th FP

15th FP

16th FP（96.2%）（96.2%）（96.4%）（96.2%）（95.8%）（96.2%）

97.4%

Period-end
occupancy rate
Number of properties
at period-end

96.9%

96.8%

96.6%

95.7%

96.2%

22

43

65

100

118

115

（152）

（153）

（152）

（155）

（153）

（150）

Questionnaire for Occupants

Nomura Real Estate Partners conducted a questionnaire
survey targeting residents of properties owned by NRF(conducted in July 2014 with more than 800 responses).

Speedy Service

Free Account Transfer Service

Disaster Support Service

Club Off Benefit Service

Visiting Service for Residents

 Attracting potential residents through thehomepage (Nomura’s leasing)

Q. What is your level of satisfaction with the condominium you are living in?
Very satisfied
Somewhat satisfied
Average
Somewhat dissatisfied

0%

20%

40%

60%

80%

100% Very dissatisfied

Nearly 80% of residents were satisfied

22

LTV and Cash Distribution Policy✓ LTV decreased to 52.7% (down 0.7% from the previous period) by the end of the 16th fiscal period due to prepayments✓ LTV increased temporarily due to the acquisition of 3 properties, but a decreased LTV is pursued in the medium to longterm
✓ From an early stage, implementing a medium- to long-term growth strategy that anticipates coming years; Achieve
continuation of stable cash distributions
70.0
（％）

60.0

Aim for lower-level LTV in
the medium to long term

Maximum LTV level of 60%,
stipulated in the guidelines

52.0

50.0

53.9

56.0

Latter half of

55.3
52.6

53.1

53.1

53.0

53.1

53.0

53.0

53.5

45.9

53.4

52.7 53% level

Repaymentof loans

42.4

Acquisition of
3 properties
Repayment of loans
Public offering, etc.

40.0

20,00018,00016,00014,00012,00010,000
8,000
6,000
4,000
2,000

（yen）

70.0

14,144 13,910

14,005

13,631

12,127

11,046

12,068 11,674 11,770 12,302 12,424 12,170 12,221 12,161

11,600Continuation of stable cash
distributions anticipating
coming years

16,00011,00060.0
8,102Consumption
tax hike

50.0

6,000
Improvement of portfolio through replacement strategy
Further pursuit of internal growth
Reversal of reserve, etc.

40.0
1st

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

15th

16th

Present

1,000(forecast)23

Forecast Cast Distribution for the 17th Fiscal Period
Comparison of 16th Fiscal Period Results with Forecast for 17th Fiscal Period
Difference（Comparison with results）

16th Fiscal Period(ended Nov. 30, 2014)

17th FP Forecasts(ending May 31, 2015)

Operating Revenues¥5,480 million¥5,606 million+ 2.3 %

Operating Profits¥2,423 million¥2,429 million+ 0.2 %Net Income¥1,877 million¥1,865 million- 0.6 %Net Income Per Unit

¥11,674¥11,600- 0.6 %Cash Distribution Per Unit

¥11,600¥11,600-(yen/unit)

Stable replacement
periodFrequent replacement
period-￥115+￥400

12,000Net Income Per Unit
￥11,674

-￥651

+￥294

Net Income Per Unit
￥11,600-￥2(Major factors)

11,000Cash Distribution
Per Unit￥11,600

・PF Kamioooka+￥87

・PU Nishiwaseda+￥49

・ PU Kachidoki+￥37

・Other

10,000※1.

・Revenues+￥980

・Expenses-￥473

・Interest, etc.

-￥107

・Absence ofexpenses・Absence ofrevenues
・Absence ofgain on sale-￥164

Acquisition
取得3物件 of 3
properties+￥27

Cash Distribution
Per Unit￥11,600
・Leasing expenses-￥412

・Other

-￥239

-￥47

+￥121

business
第16期
賃貸事業収益16th FP(results) Rental（実績）
revenues

・Interest, etc.

+￥96

物件売却 sale
Property

Operating
営業費用
expenses・Other-￥29

Non-operating
営業外損益
profit and loss

第17期
（予想）

Cash distribution per unit for the 17th fiscal period (ending May 2015) shown in the chart is the forecast as of January 15, 2015. Actual figures may change due to the acquisition or sales of properties, changes in real estate markets, and otherconditions surrounding NRF. NRF does not guarantee the cash distribution per unit predicted in this forecast. ※2. PF stands for PROUD FLAT and PU for PRIME URBAN.

24

Ａ Ｐ Ｐ Ｅ Ｎ Ｄ Ｉ Ｘ

25Details of Financial Results for the 16th Fiscal Period

26

Income statement

Operating Revenue
Real Estate Rental Business Revenues*1

Rental Business Revenues
Other Rental Business Revenues*Reference [16th Fiscal Period]

15th Fiscal Period

16th Fiscal Period

Difference from

From Dec. 1, 2013

From Jun. 1, 2014

Previous Period

To May 31, 2014
Amount(￥000)
5,594,013

To Nov. 30, 2014
Amount(￥000)
5,480,818(15th FP - 16th FP)
Difference
Difference(￥000)(%)-113,195-2.0

5,556,649

5,427,985-128,663-2.3

5,143,831

5,068,066-75,764-1.5

412,817359,918-52,899-12.8

134,802124,611-10,190-7.6

Incidental Revenue*2

199,126

160,332-38,793-19.5

Other Real Estate Rental Revenues*378,88974,974-3,915-5.0

Parking Lot Revenue

Real Estate Disposition Revenue
Operating Expense

37,364

52,833

15,46841.4

3,080,309

3,057,633-22,675-0.7*12,453,509

2,353,783-99,725-4.1

Repair Expenses*4

300,325

257,382-42,942-14.3

Tax and Public Dues

*5263,900

292,327

28,426

10.8

Depreciation and Amortization

1,053,355

1,052,023-1,332-0.1

Other Rental Business Expenses

835,927752,049-83,877-10.0

399,676

397,390-2,285-0.6

227,124

261,177

34,053

15.0

Real Estate Rental Business Expenses

Asset Management Fees
Other Operating Expenses*6

Operating Profits

2,513,704

2,423,184-90,519-3.6

Non-Operating Revenues

4,173

4,603

429

10.3

Non-Operating Expenses

561,381549,671-11,710-2.1

Interest Expenses

464,894

458,480-6,414-1.4

Investment Corporation Bond Interest

56,071

55,928-142-0.3

40,41535,261-5,153-12.8

Ordinary Income

1,956,496

1,878,116-78,380-4.0

Net Income Before Tax

1,956,496

1,878,116-78,380-4.0-8.6

Other Non-Operating Expenses

Corporate Income Tax, etc.

*7

974

890

-83

1,955,522

1,877,226-78,296

-4.0

64

98

33

52.2

Retained Earnings at Fiscal Period End

1,955,587

1,877,325-78,262-4.0

Total Cash Distribution

1,955,488

1,865,280-90,208-4.6

Net Income
Retained Earnings Brought Forw ard

1. Real Estate Rental Business Revenues : ¥3,074,202 thousand(from previous FP :¥-2,874 thousand)::¥54,972 thousand¥90,605 thousand

2. Incidental Revenues
2. Key Money
2. Renewal Fee
3. Other Real Estate Rental Revenues

3．Revenue from reversal of provision for loss on disaster,
cellphone antennae, vending machines, etc.
4. Renovation Expenses
4．Repair Expenses
4．Capital Expenditure
Total

:
:
:

¥257,382 thousand¥136,544 thousand¥393,927 thousand

5. Tax and Public Dues (152 properties at FP End)
5．Subject Property:
5．Excluded Property
:
Total
:

153 properties- properties
153 properties

6. Other Operating Expenses
6．Duty Entrustment Fee
6．Directors Fee, etc.

::

¥42,116 thousand¥5,600 thousand

7. Other Non-Operating Expenses
7．Loan Related Expense, etc.

:

¥23,715 thousand(Note) The amount of total cash distributions in the 16th Fiscal Period is the amount where the provision of reserve for reducti on entry (¥12 million) is
deducted from unappropriated retained earnings.

27

Balance Sheet
Liabilities and Net Assets

AssetsCurrent Assets

15th Fiscal Period
as of May 31, 2014

16th Fiscal Period
as of Nov. 30, 2014

15th Fiscal Period
as of May 31, 2014

16th Fiscal Period
as of Nov. 30, 2014

Amount(￥000)

Amount(￥000)

Amount(￥000)

Amount(￥000)

Ratio
(%)

Ratio
(%)

10,083,755

6.0

8,773,642

5.3

9,400,388

5.6

8,186,505

5.0

565,0370.3

491,5220.3

Cash and Cash Equivalents
Cash and Cash Equivalent in Trust
Other Current Assets

Trade Accounts Payable
Long-term Loan Due Within One Year

＊

2

Ratio
(%)

15,966,300

9.5

19,023,467

313,873

0.2

267,593

11.5
0.2

14,450,000

8.6

17,580,000

10.7

118,3290.1

95,6130.1

157,824,052

94.0

156,052,970

94.7

Other Accounts Payable

295,373

0.2

341,7260.2

157,793,123

94.0

156,029,544

94.6

Taxes Payable

51,893

0.0

9,712

0.0

135,258,525

80.5

134,483,407

81.6

Accrued Expenses

115,6700.1

115,149

0.1

Building

61,457,903

36.6

60,552,944

36.7

Rent Received in Advance

725,084

0.4

702,508

0.4

Land73,800,621

43.9

73,930,463

44.8

Deposits Payable

14,403

0.0

6,777

0.0

Real Estate in Trust

22,534,598

13.4

21,543,092

13.1

76,747,569

45.7

70,680,198

42.9

Building in Trust

7,324,455

4.4

6,991,812

4.2

Investment Corporation Bonds＊

2

10,000,000

6.0

10,000,000

6.1Land in Trust

15,210,142

9.1

14,551,280

8.8

Long-term Loans＊

2

65,300,000

38.9

59,240,000

35.9

Security Deposits

0.7

Fixed Assets＊

Tangible Fixed Assets
Real Estate

1Construction in Progress

-

-

3,045

0.0

1,537

0.0

1,016

0.0

1,537

0.0

1,016

0.0

Investment and Other Assets

29,3910.0

22,4080.0

Security Deposits

10,8790.0

10,8790.0

Intangible Fixed Assets
Other Intangible Fixed Assets

Long-term Repaid Expenses

18,512

Deferred Assets

32,702

Total Assets

0.0
0.0

25,432

168,31370,96473,9308,864
14,5518

0.0

0.7

1,231,288

271,8860.2

208,909

0.1

Total Liabilities

92,713,869

55.2

89,703,665

54.4

Unitholders Equity

75,226,641

44.8

75,148,378

45.6

Unitholders Capital

73,231,053

43.6

73,231,053

44.4

Retained Earnings

1,995,587

1.2

1,917,325

1.2

75,226,641

44.8

75,148,378

45.6

167,940,510

100.0

164,852,044

100.0

32,7020.0

25,4320.0

100.0

164,852,044

100.0

Total Liabilities and Net Assets(unit : million of yen)
Acqisition
Price

0.0

1,175,682

Security Deposits in Trust

167,940,510

1 Tangible Fixed Asset

Real Estate, etc.
Building
Land
Building in TrustLand in Trust
Construction in Progress

11,529Fixed Liabilities

Total Net Assets

Investment Corporation Bond Issuing Expenses*

Current Liabilities

Ratio
(%)

Accumulated
Depreciation

12,283
10,411－
1,872－－(Depreciation for
current FP)

Book value
at FP end

(1,052)
(930)
－
(122)
－
－

156,029
60,55273,9306,991
14,5518*2 Loans (long-term loans due whithin a year are included in the short-term loans)
Balance of interest-bearing debts (millions of yen)

86,820Total asset interest-bearing debt ratio

Short-term loans+bonds＋Long-term loans
total assets

52.7％

Long-term interest-bearing debt ratio

Bonds＋Long-term loans
Short-term loans+bonds＋Long-term loans

79.8％

28

Forecasts for the 17th Fiscal Period

16th FP Forecast
From Jun. 1, 2014
To Nov. 30, 2014
Amount(millions of yen)

17th FP Forecast
From Dec. 1, 2014
To May 31, 2015
Amount(millions of yen)

17th FP Forecast

Difference(announced Jan. 2015)Assumptions

Amount(millions of yen)

5,480

5,606

126

【Properties】
Number of Properties

：

5,427

5,606

179

Total Amount of Acquisition Price：¥165,610 million

52

0

-52

【Repair Expenses 】

3,057

3,177

120

2,353

2,492

139

\393 million for 16th Fiscal Period(\136 million of which is capital expenditure)

Repair Expenses

257

289

32

PU Musashi Koganei (Entrance renewal)：¥16 million

Tax and Public Dues

292

297

5

PU Shinjuku Ochiai (large-scale renovation)：¥20 million

1,052

1,072

20

Asset Management Fees

397

398

1

Other Operating Expenses

261

286

25

2,423

2,429

6

Example)PU Tsutsumidori Amamiya (large-scale renovation) ：¥33 million

Non-Operating Expenses

549

562

13

PU Azabu Juban (large-scale renovation)：¥24 million

Interest Expenses

514

518

4

【Lorns】

Ordinary Income

1,878

1,866

-12

：

¥91,220 million

Net Income

1,877

1,865

-12

Operating Revenue
Real Estate Rental Business Revenues
Real Estate Disposition Revenue
Operating Expense
Real Estate Rental Business Expenses

153 properties

Example)Depreciation and Amortization

Operating Profits\374 million for 16th Fiscal Period(\117 million of which is capital expenditure)

Total Interest-bearing Debt
(as of Jan. 19, 2015)

Number of Investment Units Issued(units)160,800

160,800

0

Interest-Bearing Debt Repayment Due During 17th FP(after Jan. 19, 2015)

Cash Distribution Per Unit(yen)

11,60011,600

0

Repayment through loans (Feb. 2015)：¥7,700 million

Agreed Repayment(Feb. 2015)：¥90 million

Number of Properties(properties)

150

153

3

Leasable Floor Area(sqm)

272,627.52

279,528.92

6,901

(%)

96.0

96.2

0.2

Average Occupancy Rate

※1. Cash distribution per unit for the 17th fiscal period (ending May 2015) shown in the chart is the forecast as of January 15, 2015. Actual figures may change due to the acquisition or sales of properties,changes in real estate markets, and other conditions surrounding NRF. NRF does not guarantee the cash distribution per unit predicted in this forecast.
※2. PU stands for PRIME URBAN.

29

Unitholders
Changes in Ratio of Units Held by Unitholders
Individuals/Others( 26,869 unit
（Units）
160,000

20.4%
120,000

Foreign Corporations, etc.
( 9,144 unit
131 unitholders )160,800units

150,936units

10.4%

9,586 unitholders )

19.5%

18.3%

16.7%

8.4%

6.1%

5.7%

13.1%

12.9%

58.9%

62.5%

64.7%

14th FP

15th FP

16th FP

13.1%

Domestic Corporation (excluding Financial Institutions)( 20,813 unit
185 unitholders )Financial Institutions (including Securities Companies)( 103,974 unit
101 unitholders )13.6%
80,00040,00055.5%

0[Financial Institutions]13th FP

Total

83,769 units

55.5%

94,734 units

58.9%

100,494 units

62.5%

103,974 units

64.7%

Banks

15,155 units

10.0%

15,348 units

9.5%

17,616 units

11.0%

18,285 units

11.4%

Trust Banks

56,422 units

37.4%

65,650 units

40.8%

68,606 units

42.7%

70,168 units

43.6%

3,397 units

2.3%

3,627 units

2.3%

3,610 units

2.2%

3,722 units

2.3%

1,595 units

1.1%

3,801 units

2.4%

4,984 units

3.1%

4,807 units

3.0%

1,401 units

0.9%

1,160 units

0.7%

680 units

0.4%

2,112 units

1.3%

5,799 units

3.8%

5,148 units

3.2%

4,998 units

3.1%

4,880 units

3.0%Life Insurance
Companies
Non-Life Insurance
Companies
Securities
Companies, etc.

Other

Top 10 Unitholders
#

Units

Ratio (%)

#

Units

Ratio (%)

1

Japan Trustee Services Bank, Ltd.

Unitholders

46,99829.23

6The Fuji Fire and Marine Insurance Co., Ltd.

Unitholders

3,212

2.00

2

Nomura Real Estate Development Co., Ltd.

15,240

9.48

7

Trust & Custody Services Bank, Ltd.

3,008

1.87

3

Trust & Custody Services Bank, Ltd.

6,618

4.12

8

The Joyo Bank, Ltd.

2,502

1.56

4

The Nomura Trust and Banking Co., Ltd.

5,848

3.64

9

The Fukui Bank,Ltd.

1,908

1.19

5

The Master Trust Bank of Japan, Ltd.

5,692

3.54

10 The Ashikaga Bank, Ltd.

1,707

1.06

92,733

57.67

Total

(Note) The Ratio is calculated as the percentage of Total Number of Owned Investment Units divided by Total Number of Issued Investment Units.

30

Changes in Investment Unit Price and Cash Distribution
Changes in Investment Unit Price
Investment Unit Price (yen)Investment Unit Price（pt）

TSE REIT Index

800,000
Mar. 14, 2011
BOJ Announces
Additional Purchase of J-REIT
Apr. 27, 2012
BOJ Announces
Additional Purchase of J-REIT

Mar. 11, 2011
Great Eastern Japan
Earthquake

600,000

Oct. 5, 2010
BOJ Announces
Purchase of JREITs

Oct. 31, 2014
BOJ Announces
Additional Purchase of J-REIT

3,000

Jan. 13, 2015
¥ 727,000

2,700

BPS ¥ 467,340

2,400
2,100

Feb. 14, 2012
Enhancement of Monetary Easing

1,800

400,000

1,500
4th PO¥4.2 billion

1,200
900

200,000

3rd PO¥7.1 billion

600

300
0

0

Nov. 30
2009

May. 312010

Nov. 30
2010

May. 312011

Nov. 30
2011

May. 312012

Nov. 30
2012

May. 312013

Nov. 30
2013

May. 312014

Nov. 30
2014

Changes in Cash Distribution（yen）
16,00014,14414,005

13,91012,127

13,631
11,046

12,00012,068

11,674

11,7708th FP

9th FP

10th FP

12,302

12,424

12,17012,221

12,161

11th FP

12th FP

13th FP

14th FP

15th FP[Forecast]

11,60011,60016th FP

17th FP

8,102
8,000

4,000

0
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

31

Characteristics of NRF

32

Characteristics of NRF

Specializing in rental housing

Acquisition Price

159,310 million

Average Rent Per Unit

Number of Properties 150 properties

approx. 97thousand

Average Leasable
Floor Area Per Unit

Leasable Units

9,054 units

approx. 30.0 sqm※ (16th Fiscal Period End)

Foundation for stableprofitPriority investment in 「core units」(rent ¥150,000 or less and floor area below 50 sqm)

Build portfolio centering on single and compact types

Highly-effective property management throughmanagement companies affiliated withreal estate companies

Stable finances

Measures for stable performance andmaintenance/improvement of competitivenessPromote elongation/fixation of loans based on solid
financial policies

Paying out stable cash distributions33

Support from the Nomura Real Estate Group
Property acquisitions throughthe sponsor’s information route(based on acquisition price)

Ratio of commissioning to
Nomura Real Estate Partners(based on number of cases)

59.4％

76.7％

Acquisition

Management

Property development

General developer thatdevelops PROUD, PMO, etc.
Properties planned/developedby Nomura Real Estate
Development Co., Ltd.

Provision of property information

Real estate broker with ample
experience
Primarily properties
planned/developed bycompanies other than Nomura
Real Estate Development Co.,
Ltd.

General real estate managementcompany with know-how cultivatedon various matters
・Number of residential units managed:
approx. 140,000 (*1)
・Management company satisfaction
ranking: 1st (6 consecutive years) (*2)

※1: Number of residential units managed is result for fiscal 2013.
※2: From “Home Surfing” by Attractors Lab Co., Ltd. (currently Style
Act Co., Ltd.).

Asset Management Company(Listed REITs)

One of Japan’s largest real estate asset management company withmore than ¥1 trillion balance of assets under management

Property management(Non-listed REIT)・Nomura Real Estate Private REIT, Inc.
・Nomura Real Estate Residential Fund, Inc.
・Nomura Real Estate Office Fund, Inc.
(Other)・Nomura Real Estate Master Fund, Inc.
・Private real estate funds
・Private securities funds, etc.

34Priority Investment in Key Segments ① (Features of Rental Housing)✓ The level of rent for rental housing is stable.
✓ Compared with other sectors, there is not much economic sensitivity and volatility is low.

Changes in Rent Index by Purpose
Housing

130

120

Offices

StoresHotelsWarehouses

Stable revenue
108.5pt

110102.4pt100

100.0pt101.5pt

9085.0pt84.6pt

80
1990

1995

2000

2005

2010

2014

Source: Created by NREAM based on the Ministry of Internal Affairs and Communications “Consumer Price Index Annual Report (1990-2014)” and the Bank of Japan “Service Price Index for Companies (1990-2014)”※.The line graph shows the index of each year with 1990 set as 100.

35

Priority Investment in Key Segments ②(Future Outlook and Demand)✓ The number of singles and DINKs will continue to be on an upward trend.
✓ For households by income, the range from ¥4 million to ¥9 million accounts for about 50%.

Changes in Number of Households(“Total ””Singles””DINKs”) [Greater Tokyo Area]

Relative Frequency Distribution of Number ofHouseholds by Income [Nationwide]（％）
200（Thousand Households）
16,177

16,00016,461

16,481
Peak of Numberof Households

15,561

16,265

15,867180
12Singles/DINKs(169%)

14,00013,757
number of households

Total Number of

12,318Households

12,000(129%)

10,000
2005

2010

2015

2020

2025

2030

8

120
4

100
80

2000

Main target tenant classes⇒Annual Income ¥4 million～¥9 million（ approx. 50% of total household）

160
140

13,157 Over 50% of the total

1995

（％）
16

0

2035

Source: Created by NREAM based on the National Institute of Population and Social Security Research (IPSS)“Number of Households by Family Type, Age (five-year groups), and Sex group.”•The line graph shows changes in number of single or couple-only households and total number of households•with 1995 set as 100.

（income）
Source: The Ministry of Health, Labour and Welfare (MHLW) “Overview of National Livelihood
Survey 2013”✓ While the total number of households will enter a downward phase going forward,✓ A volume zone exists in household income where stable demand

the number of singles and DINKs are expected to continue increasing

is expected

Demand for single and compact types will continue to increase

50% of total households are concentrated in the ¥4 million to¥9 million income range

36

Priority Investment in Key Segments③ (Main Investment Targets of NRF)
Core Units (rent ¥150,000 or less, floor area under 50 sqm)
At 16th Fiscal Period End

Small Area

Core Units
Unit Ratio

86.9 ％(Occupancy Rate 96.2 ％）Characteristics

Single/DINKs units in Greater Tokyo Area

Number of subject
housing units

7,832 units(Occupancy Rate

6.6 ％96.7 ％）

Characteristics

Family units

Unit Ratio

Number of subject
housing unitsin Major Regional Cities

594 units

3.9 ％(Occupancy Rate
Characteristics

95.2 ％）
Expensive units
in Central Tokyo

Units with rent ¥150,000 or less and floor area under 50 sqm

Low Rent

Unit Ratio

Number of subject
housing units¥150,000
50 sq. meters
Unit Ratio(Occupancy Rate
Characteristics

Number of subject
housing units

Large Area

355 units

High Rent
2.5 ％95.8 ％）
Family units
in Central Tokyo/Suburbs

228 units

Target Tenant Level
Target・Students and employees of general companies
in their 20s and 30s
・ Emphasizes convenience of commuting and rent

Features・ Impact of economy on annual income(disposable earnings) is low

Rent ¥150,000 or less and floor area below 50 sqm
Stable demand is expected to continue going forward

37

Rental Housing Investment Characteristics✓ Real estate acquisition and sale amounts increased in 2013 and expected yields have decreased✓ The supply of new properties continues to be at a low level and demand from single and DINKs households is expected to be stable

Change in J-REIT Real Estate Acquisition andSale Amount(billions of yen)

Acquisition amountSale amount

Change in Expected Yield
Net change

4,000Transaction yield of single-room apartments (Jonan area (Meguro and Setagaya wards))（％）

Transaction yield of single-room apartments(Joto area (Sumida and Koto wards))

6.5

High point 6.2

3,500

6.0

3,000

5.9

Lehman ShockSep. 2008

2,500

5.5

2,000

Low point

1,500

5.0

5.0

5.0

1,000
500

4.8
4.5

0

4.5

-500

4.0

-1,0002008/04

2009/04

2010/04

2011/04

2012/04

2013/04

2014/04

Source: Created by NREAM based on the Investment Trust Association, Japan’s Statistics on Real Estate Investment Corporations and public
documents of listed J-REITs.

2006/04

2007/04

2008/04

2009/04

2010/04

2011/04

2012/04

2013/04

2014/04

Source: Japan Real Estate Institute’s Real Estate Investor’s Survey

Projections on Number of Households

Supply of New Properties (Number of Building Starts)（unit）（thousandhouseholds）

160,000

18,000

Number of single and DINKS households

Number of households with parents and children

Number of other general households

Total number of households

144,060
140,000
120,000
96,817100,000
80,00070,52557,01360,0009,630,000
households

12,00092,66757,3678,730,000
households

73,87954,0296,000

40,00020,000
0

0
2006

2007

2008

2009

2010

2011

2012

2013

Source: Created by NREAM based on the MLIT’s “Housing Start Statistics. The above are the totals of building starts of residences for rent
classified as apartment buildings of steel-framed reinforced concrete or reinforced concrete structure in the Housing Start Statistics
from January to December of each year.

2010

2015

2020

2025

2030

2035

Source: Created by NREAM based on the National Institute of Population and Social Security Research (IPPS)“Household Projections for Japan (by Prefecture)” (projections as of April 2014).

38

Utilization of Diverse Sourcing Routes
Breakdown of Acquired Properties by Sourcing Route

Properties acquired
through informationfrom outside

Properties owned by
Nomura Real Estate
Development

PROUD FLAT
Shirokane Takanawa

PROUD FLAT
Asakusa Komagata

23.5％

40.6％

Properties acquired throughinformation from or with brokerageof Nomura Real Estate
Development

35.9％

プライムアーバン目黒大橋ヒルズ
PRIME URBAN

PRIME URBAN
プライムアーバン芝浦LOFT

Meguro Ohashi Hills

Shibaura LOFT

Sponsor Pipeline

59.4 ％

39

Portfolio Status

Diversification Within Assets

Building Age
Top 5 Properties¥17.43 billion

Improve portfolio stability
through promotion ofdiversification

Over 10 years

Considering the combinationof various building age to
avoid the bias of large-scale
repair expenses⇒ Average Building Age
10.8 Years⇒ Top 10 Properties 19.5％
Other 140 Properties¥128.30 billion

Top 10 Properties¥31.01 billion

Investment Area

5-10 years

Floor Area Per Unit
Over 70 sqm

Other Areas

Greater Tokyo Area 70% ormore Other Areas 30% or
less⇒ Greater Tokyo Area 80.9％

3-5 years

Investing in properties
targetingsingle/DINKS/young family
households for theforeseeable future⇒ Under 50 sqm 90.4％

Other Areas(Kanagawa,Chiba, Saitama)

Tokyo (excluding the 23 wards)

50-70 sqm

Tokyo (23 wards)

Nearest Station on FootOver 10 min.

Retail & Office30-50 sqm

Under 30 sqm

Over 100 Units

Under 30 Units

Units Per Property
Within 5 min.

Selection focusing onaccessibility to the nearest
railway stations

Investing in properties withstrong lease-up potential in ashort timeframe⇒Within 10 min. 94.0％⇒ Average Unit Per Property
59 Units
5-10 min.

50-100 Units

30-50 Units※. In the above graphs, “floor area per unit” as of the end of November 2014 is based on the number units while other figures are based on acquisition price.

40

Changes in Revenue
Changes in Rent per Tsubo and Occupancy Rate (13th FP End-17th FP End (forecast))[Rent per Tsubo](Rent per Tsubo)

Rent/Tsubo (Greater Tokyo Area)

Rent/Tsubo (Other Areas)

Rent/Tsubo (Total)

15,00012,500Total（Forecast）¥10,644¥10,737¥10,736¥10,720

Rent
per Tsubo¥10,69017th FP End[forecast](May 31, 2015)

13th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov 30, 2014)

Total¥10,644¥10,737¥10,736¥10,720¥10,690

GreaterTokyo¥12,264¥12,349¥12,366¥12,361¥12,331

Other
Areas

¥7,302¥7,360¥7,366¥7,351¥7,32313th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov 30, 2014)

17th FP End[forecast](May 31, 2015)

Total

96.4%

96.2%

95.8%

96.2%

96.2%

Greater
Tokyo

96.1%

95.9%

95.7%

96.2%

96.0%

Other
Areas

97.2%

96.6%

96.1%

96.3%

96.6%

13th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov 30, 2014)

17th FP End[forecast](May 31, 2015)

13.2％

10.0％

14.2％

10.9％

14.6％

Details

10,000

7,500

5,000
13th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov 30, 2014)

17th FP End [forecast](May 31, 2015)[Occupancy Rate]（％）

Occupancy Rate (Greater Tokyo Area)

100.0

Occupancy Rate (Other Areas)

Occupancy Rate (Total)

Occupancy
Rate

97.5

Total

（Forecast）
96.4%

96.2%

95.8%

96.2%

96.2%

Details

95.0(Reference)

92.5
Turnover
Ratio

Total

90.0
13th FP End(May 31, 2013)

14th FP End(Nov. 30, 2013)

15th FP End(May 31, 2014)

16th FP End(Nov 30, 2014)

17th FP End [forecast](May 31, 2015)41

Portfolio Map ( Greater Tokyo Area )Greater Tokyo Area

116 Properties

1

PROUD FLAT Shirokane Takanaw a59

PRIME URBAN Sangen JayaⅢ

2

PROUD FLAT Yoyogi Uehara

60

PRIME URBAN Chitose Karasuyama

3

PROUD FLAT Hatsudai

61

PRIME URBAN Sangen Jaya II

4

PROUD FLAT Shibuya Sakuragaoka

62

PRIME URBAN Karasuyama

5

PROUD FLAT Gakugei Daigaku

63

PRIME URBAN Sangen Jaya

6

PROUD FLAT Meguro Gyoninzaka

64

PRIME URBAN Minami Karasuyama

7

PROUD FLAT Sumida Riverside

65

PRIME URBAN Karasuyama Galleria

8

PROUD FLAT Kagurazaka

66

PRIME URBAN Karasuyama Court

9

PROUD FLAT Waseda

67

PRIME URBAN Kamikitazaw a

10

PROUD FLAT Shinjuku Kaw adacho

68

PRIME URBAN Chitose Funabashi

11

PROUD FLAT Sangen Jaya

69

PRIME URBAN Yoga

12

PROUD FLAT Kamata

70

PRIME URBAN Shinagaw a Nishi

13

PROUD FLAT Kamata II

71

PRIME URBAN Oimachi

14

PROUD FLAT Shinotsuka

72

PRIME URBAN Osaki

15

PROUD FLAT Kiyosumi Shirakaw a

73

PRIME URBAN Oimachi II

16

PROUD FLAT Monzen Nakacho II

74

PRIME URBAN Yukigaya

17

PROUD FLAT Monzen Nakacho I

75

PRIME URBAN Omori

18

PROUD FLAT Fujimidai

76

PRIME URBAN Denenchofu Minami

19

PROUD FLAT Asakusa Komagata

77

PRIME URBAN Nakano

20

PROUD FLAT Yokohama

78

PRIME URBAN Nakano Kamitakada

21

PROUD FLAT Kamioooka

79

PRIME URBAN Takaido

22

PROUD FLAT Tsurumi II

80

PRIME URBAN Nishi Ogikubo

23

PRIME URBAN Azabu Juban

81

PRIME URBAN Otsuka

24

PRIME URBAN Akasaka

82

PRIME URBAN Komagome

25

PRIME URBAN Tamachi

83

PRIME URBAN Ikebukuro

26

PRIME URBAN Shibaura

84

PRIME URBAN Monzen Nakacho

27

PRIME URBAN Hatagaya

85

PRIME URBAN Kameido

28

PRIME URBAN Yoyogi

86

PRIME URBAN Sumiyoshi

29

PRIME URBAN Ebisu Ⅱ

87

PRIME URBAN Mukojima

30

PRIME URBAN Bancho

88

PRIME URBAN Kinshi Koen

31

PRIME URBAN Chiyoda Fujimi

89

PRIME URBAN Kinshicho

32

PRIME URBAN Iidabashi

90

PRIME URBAN Hirai

33

PRIME URBAN Ebisu

91

PRIME URBAN Kasai

34

PRIME URBAN Naka Meguro

92

PRIME URBAN Kasai II

35

PRIME URBAN Gakugei Daigaku

93

PRIME URBAN Kasai East

36

PRIME URBAN Senzoku

94

PRIME URBAN Ekoda

37

PRIME URBAN Meguro Riverside95

PRIME URBAN Itabashi Kuyakushomae

38

PRIME URBAN Meguro Ohashi Hills

96

PRIME URBAN Asakusa

39

PRIME URBAN Meguro Aobadai

97

PRIME URBAN Machiya South Court

40

PRIME URBAN Gakugei DaigakuⅡ

98

PRIME URBAN Musashi Koganei

41

PRIME URBAN Kachidoki

99

PRIME URBAN Musashino Hills

42

PRIME URBAN Shinkaw a

100

PRIME URBAN Koganei Honcho

43

PRIME URBAN Nihonbashi Yokoyamacho

101

PRIME URBAN Hino

44

PRIME URBAN Nihonbashi Hamacho

102

PRIME URBAN Kumegaw a

45

PRIME URBAN Hongo Ikizaka

103

PRIME URBAN Musashi Kosugi comodo

46

PRIME URBAN Hakusan

104

PRIME URBAN Kaw asaki

47

PRIME URBAN Yotsuya Gaien Higashi

105

PRIME URBAN Shinyurigaoka

48

PRIME URBAN Naka Ochiai

106

PRIME URBAN Tsurumi Teraya

49

PRIME URBAN Ochiai

107

PRIME URBAN Urayasu II

50

PRIME URBAN Nishi Shinjuku I

108

PRIME URBAN Urayasu

51

PRIME URBAN Nishi Shinjuku II

109

PRIME URBAN Gyotoku I

52

PRIME URBAN Shinjuku Naitomachi

110

PRIME URBAN Minami Gyotoku III

53

PRIME URBAN Nishi Waseda

111

PRIME URBAN Gyotoku II

54

PRIME URBAN Shinjuku Ochiai

112

PRIME URBAN Gyotoku Ekimae

55

PRIME URBAN Mejiro

113

PRIME URBAN Gyotoku EkimaeⅡ

56

PRIME URBAN Kagurazaka

114

PRIME URBAN GyotokuⅢ

57

PRIME URBAN Roka Koen

115

PRIME URBAN Nishi Funabashi

58

PRIME URBAN Kamiuma

116

PRIME URBAN Kaw aguchi

42

Portfolio Map ( Other Areas )Osaka

6 Properties

119

PROUD FLAT Shin Osaka

120

PRIME URBAN Yamahana

141

PRIME URBAN Esaka I

121

PRIME URBAN Kita Juyo Jo

142

PRIME URBAN Esaka II

122

PRIME URBAN Odori Koen I

143

PRIME URBAN Esaka III

123

PRIME URBAN Odori Koen II

144

PRIME URBAN Tamatsukuri

124

PRIME URBAN Kita Juichi Jo

145

PRIME URBAN Sakaisuji Honmachi

125

PRIME URBAN Miyanosaw a

126

PRIME URBAN Odori Higashi

127

PRIME URBAN Chiji Kokan

128

PRIME URBAN Maruyama

129

PRIME URBAN Kita Nijuyo Jo

130

PRIME URBAN Sapporo Idaimae

131

PRIME URBAN Sapporo Riverfront

132

PRIME URBAN Kita Sanjo Dori

SapporoSendaiFukuoka

13 Properties

5 Properties

5 Properties

Nagoya146

PRIME URBAN Hakata

147

PRIME URBAN Yakuin Minami

148

PRIME URBAN Kashii

149

PRIME URBAN Hakata Higashi

150

PRIME URBAN Chihaya

117

PROUD FLAT Itsutsubashi

118

PROUD FLAT Kaw aramachi

133

PRIME URBAN Nagamachi Icchome

134

PRIME URBAN Yaotome Chuo

135

PRIME URBAN Tsutsumidori Amamiya

5 Properties

136

PRIME URBAN Aoi

137

PRIME URBAN Kanayama

138

PRIME URBAN Tsurumai

139

PRIME URBAN Kamimaezu

140

PRIME URBAN Izumi

43

Portfolio
#
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36

Name of Property
PROUD FLAT Shirokane Takanawa
PROUD FLAT Yoyogi Uehara
PROUD FLAT Hatsudai
PROUD FLAT Shibuya Sakuragaoka
PROUD FLAT Gakugei Daigaku
PROUD FLAT Meguro Gyoninzaka
PROUD FLAT Sumida Riverside
PROUD FLAT Kagurazaka
PROUD FLAT Waseda
PROUD FLAT Shinjuku Kawadacho
PROUD FLAT Sangen Jaya
PROUD FLAT Kamata
PROUD FLAT Kamata II
PROUD FLAT Shinotsuka
PROUD FLAT Kiyosumi Shirakawa
PROUD FLAT Monzen Nakacho II
PROUD FLAT Monzen Nakacho I
PROUD FLAT Fujimidai
PROUD FLAT Asakusa Komagata
PROUD FLAT Yokohama
PROUD FLAT Kamioooka
PROUD FLAT Tsurumi II
PRIME URBAN Azabu Juban
PRIME URBAN Akasaka
PRIME URBAN Tamachi
PRIME URBAN Shibaura LOFTPRIME URBAN Hatagaya
PRIME URBAN Yoyogi
PRIME URBAN Ebisu Ⅱ
PRIME URBAN Bancho
PRIME URBAN Chiyoda Fujimi
PRIME URBAN Iidabashi
PRIME URBAN Ebisu
PRIME URBAN Naka Meguro
PRIME URBAN Gakugei Daigaku
PRIME URBAN Senzoku

Location
Minato-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Chuo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Toshima-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Nerima-ku, Tokyo
Taito-ku, Tokyo
Yokohama-shi, Kanagawa
Yokohama-shi, Kanagawa
Yokohama-shi, Kanagawa
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Minato-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Shibuya-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo

Acquisition Price(thousands of yen)
3,510,000
1,100,000
865,000
800,000
812,000
882,000
2,260,000
1,540,000
1,110,000
1,010,000
1,350,000
1,140,000
2,980,000
695,000
900,000
650,000
1,130,000
1,370,000
1,960,000
2,340,000
2,770,000
1,430,000
991,000
956,000
941,000
1,510,000
452,000
408,000
1,030,000
1,170,000
707,000
2,030,000
1,200,000
1,320,000
886,000
536,000

Percentage of
Leasable Floor Area Leasable Units
Total (%)
(sqm)
(units)2.2
2,950.11
106
0.7
1,151.34
44
0.5
958.9831
0.5
638.7030
0.5
934.39410.6855.2340
1.4
3,055.21110
1.0
1,793.4370
0.7
1,450.91
60
0.6
1,102.20
41
0.8
1,277.82
48
0.7
1,541.64
67
1.9
4,051.72
169
0.4
752.0935
0.6
1,209.56
55
0.4
830.5535
0.7
1,191.0855
0.9
2,222.05
94
1.2
2,685.39
79
1.5
3,118.12
113
1.7
4,872.17200
0.9
2,219.74
81
0.6
1,222.1340
0.6
1,062.05
25
0.6
1,107.36
48
0.9
1,905.39
68
0.3
650.6038
0.3
439.5619
0.6
1,184.8535
0.7
1,277.04
52
0.4
793.8732
1.3
2,087.7090
0.8
1,444.40
29
0.8
1,302.42
49
0.6
1,008.39
32
0.3
655.2722

Occupancy Rate
(Nov. 2014)(%)
92.6
97.9
100.0
96.7
95.2
100.0
97.8
97.5
91.7
97.1
94.3
95.8
97.5
100.0
100.0
100.0
96.3
100.0
99.0
95.4
100.0
95.2
93.2
90.0
100.0
91.2
94.6
100.0
100.0
96.0
93.8
96.8
92.8
91.8
90.9
93.7

44

Portfolio

#
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72

Name of Property
PRIME URBAN Meguro Riverside
PRIME URBAN Meguro Ohashi Hills
PRIME URBAN Meguro Aobadai
PRIME URBAN Gakugei DaigakuⅡ
PRIME URBAN Kachidoki
PRIME URBAN Shinkawa
PRIME URBAN Nihonbashi Yokoyamacho
PRIME URBAN Nihonbashi Hamacho
PRIME URBAN Hongo Ikizaka
PRIME URBAN Hakusan
PRIME URBAN Yotsuya Gaien Higashi
PRIME URBAN Naka Ochiai
PRIME URBAN Ochiai
PRIME URBAN Nishi Shinjuku I
PRIME URBAN Nishi Shinjuku II
PRIME URBAN Shinjuku Naitomachi
PRIME URBAN Nishi Waseda
PRIME URBAN Shinjuku Ochiai
PRIME URBAN Mejiro
PRIME URBAN Kagurazaka
PRIME URBAN Roka Koen
PRIME URBAN Kamiuma
PRIME URBAN Sangen JayaⅢ
PRIME URBAN Chitose Karasuyama
PRIME URBAN Sangen Jaya II
PRIME URBAN Karasuyama
PRIME URBAN Sangen Jaya
PRIME URBAN Minami Karasuyama
PRIME URBAN Karasuyama Galleria
PRIME URBAN Karasuyama Court
PRIME URBAN Kamikitazawa
PRIME URBAN Chitose Funabashi
PRIME URBAN Yoga
PRIME URBAN Shinagawa Nishi
PRIME URBAN Oimachi
PRIME URBAN Osaki

Location
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Meguro-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Chuo-ku, Tokyo
Bunkyo-ku, Tokyo
Bunkyo-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Shinjuku-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Setagaya-ku, Tokyo
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo
Shinagawa-ku, Tokyo

Acquisition Price(thousands of yen)
464,000
3,580,000
1,190,000
916,000
2,290,000
2,250,000
3,530,000
1,470,000
647,000
893,000
1,700,000
655,000
324,000
1,290,000
1,000,000
512,000
503,000
635,000
1,260,000
2,640,000
362,000
900,000
755,000
730,000
539,000
344,000
835,000
840,000
645,000
413,000
738,000
885,000
1,150,000
624,000
530,000
1,700,000

Percentage of
Leasable Floor Area Leasable Units
Total (%)
(sqm)
(units)0.3
453.7724
2.2
2,955.74
99
0.7
1,464.1440
0.6
1,109.87
41
1.4
4,524.00
145
1.4
3,600.61
46
2.2
5,926.17124
0.9
2,026.44
52
0.4
662.5827
0.6
1,069.82
42
1.1
1,759.11
51
0.4
1,237.98
18
0.2
517.5332
0.8
1,459.86
60
0.6
1,162.55
46
0.3
578.18140.3
507.1128
0.4
1,053.3928
0.8
1,755.52
65
1.7
2,853.82
100
0.2
567.2034
0.6
1,739.86
37
0.5
1,018.72
47
0.5
1,774.01
27
0.3
810.98170.2
507.5228
0.5
874.1533
0.5
1,049.73
41
0.4
835.0533
0.3
576.2023
0.5
1,384.45
29
0.6
1,027.4438
0.7
1,773.05
54
0.4
961.2546
0.3
722.7045
1.1
2,106.16
99

Occupancy Rate
(Nov. 2014)(%)
91.5
97.4
97.7
95.7
97.2
98.3
99.2
91.2
100.0
100.0
98.2
94.6
90.9
100.0
93.9
86.1
57.1
96.1
95.3
95.7
94.2
100.0
100.0
97.3
78.8
86.3
97.1
97.6
94.0
95.7
86.5
97.6
97.6
97.9
95.6
99.0

45

Portfolio
#
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108

Name of Property
PRIME URBAN Oimachi II
PRIME URBAN Yukigaya
PRIME URBAN Omori
PRIME URBAN Denenchofu Minami
PRIME URBAN Nakano
PRIME URBAN Nakano Kamitakada
PRIME URBAN Takaido
PRIME URBAN Nishi Ogikubo
PRIME URBAN Otsuka
PRIME URBAN Komagome
PRIME URBAN Ikebukuro
PRIME URBAN Monzen Nakacho
PRIME URBAN Kameido
PRIME URBAN Sumiyoshi
PRIME URBAN Mukojima
PRIME URBAN Kinshi Koen
PRIME URBAN Kinshicho
PRIME URBAN Hirai
PRIME URBAN Kasai
PRIME URBAN Kasai II
PRIME URBAN Kasai East
PRIME URBAN Ekoda
PRIME URBAN Itabashi Kuyakushomae
PRIME URBAN Asakusa
PRIME URBAN Machiya South Court
PRIME URBAN Musashi Koganei
PRIME URBAN Musashino Hills
PRIME URBAN Koganei Honcho
PRIME URBAN Hino
PRIME URBAN Kumegawa
PRIME URBAN Musashi Kosugi comodo
PRIME URBAN Kawasaki
PRIME URBAN Shinyurigaoka
PRIME URBAN Tsurumi Teraya
PRIME URBAN Urayasu II
PRIME URBAN Urayasu

Location
Shinagawa-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Ota-ku, Tokyo
Nakano-ku, Tokyo
Nakano-ku, Tokyo
Suginami-ku, Tokyo
Suginami-ku, Tokyo
Toshima-ku, Tokyo
Toshima-ku, Tokyo
Toshima-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Koto-ku, Tokyo
Sumida-ku, Tokyo
Sumida-ku, Tokyo
Sumida-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Edogawa-ku, Tokyo
Nerima-ku, Tokyo
Itabashi-ku, Tokyo
Taito-ku, Tokyo
Arakawa-ku, Tokyo
Koganei-shi, Tokyo
Koganei-shi, Tokyo
Koganei-shi, Tokyo
Hino-shi, Tokyo
Higashimurayama-shi, Tokyo
Kawasaki-shi, Kanagawa
Kawasaki-shi, Kanagawa
Kawasaki-shi, Kanagawa
Yokohama-shi, Kanagawa
Urayasu-shi, Chiba
Urayasu-shi, Chiba

Acquisition Price(thousands of yen)
1,100,000
970,000
824,000
900,000
472,000
640,000
1,080,000
435,000
794,000
412,000
3,310,000
2,200,000
705,000
552,000
487,000
1,180,000
668,000
700,000
637,000
958,000
940,000
385,000
940,000
350,000
1,740,000
2,390,000
1,590,000
725,000
319,000
1,370,000
2,150,000
1,150,000
1,210,000
457,000
277,000
840,000

Percentage of
Leasable Floor Area Leasable Units
Total (%)
(sqm)
(units)0.7
1,794.85
93
0.6
1,536.59
94
0.5
1,190.70
54
0.6
1,100.1744
0.3
801.3051
0.4
818.7533
0.7
1,746.20
107
0.3
543.0924
0.5
944.9946
0.3
991.9422
2.1
4,376.95
131
1.4
3,207.92
118
0.4
1,117.34
52
0.3
813.5240
0.3
1,108.91
55
0.7
1,886.50
77
0.4
991.6249
0.4
1,095.91
53
0.4
905.8145
0.6
1,437.84
68
0.6
1,884.62
78
0.2
872.4935
0.6
1,742.64
68
0.2
876.7022
1.1
4,141.56
77
1.5
5,999.80
98
1.0
2,961.06
80
0.5
1,604.72
43
0.2
994.6854
0.9
2,610.05
91
1.3
3,692.4456
0.7
1,706.4680
0.8
1,708.19
64
0.3
952.0650
0.2
437.9427
0.5
1,264.84
60

Occupancy Rate
(Nov. 2014)(%)
96.4
94.7
98.1
96.1
92.9
97.5
89.9
88.1
100.0
90.5
96.2
98.3
96.1
94.9
94.6
98.7
100.0
94.3
100.0
97.1
100.0
100.0
94.9
95.4
97.7
94.9
95.1
86.9
98.1
95.7
98.4
96.9
100.0
92.0
100.0
96.7

46

Portfolio
#
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143

Name of Property
PRIME URBAN Gyotoku I
PRIME URBAN Minami Gyotoku III
PRIME URBAN Gyotoku II
PRIME URBAN Gyotoku Ekimae
PRIME URBAN Gyotoku EkimaeⅡ
PRIME URBAN GyotokuⅢ
PRIME URBAN Nishi Funabashi
PRIME URBAN Kawaguchi
Greater Tokyo Area
PROUD FLAT Itsutsubashi
PROUD FLAT Kawaramachi
PROUD FLAT Shin Osaka
PRIME URBAN Yamahana
PRIME URBAN Kita Juyo Jo
PRIME URBAN Odori Koen I
PRIME URBAN Odori Koen II
PRIME URBAN Kita Juichi Jo
PRIME URBAN Miyanosawa
PRIME URBAN Odori Higashi
PRIME URBAN Chiji Kokan
PRIME URBAN Maruyama
PRIME URBAN Kita Nijuyo Jo
PRIME URBAN Sapporo Idaimae
PRIME URBAN Sapporo Riverfront
PRIME URBAN Kita Sanjo DoriPRIME URBAN Nagamachi Icchome
PRIME URBAN Yaotome Chuo
PRIME URBAN Tsutsumidori Amamiya
PRIME URBAN Aoi
PRIME URBAN Kanayama
PRIME URBAN Tsurumai
PRIME URBAN Kamimaezu
PRIME URBAN Izumi
PRIME URBAN Esaka I
PRIME URBAN Esaka II
PRIME URBAN Esaka III

Location
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Ichikawa-shi, Chiba
Funabashi-shi, Chiba
Kawaguchi-shi, Saitama
Sendai-shi, Miyagi
Sendai-shi, Miyagi
Osaka-shi, Osaka
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sapporo-shi, Hokkaido
Sendai-shi, Miyagi
Sendai-shi, Miyagi
Sendai-shi, Miyagi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Nagoya-shi, Aichi
Suita-shi, Osaka
Suita-shi, Osaka
Suita-shi, Osaka

Acquisition Price(thousands of yen)
635,000
263,000
741,000
476,000
561,000
948,000
772,000
2,170,000
128,903,000
682,000
724,000
1,430,000
377,000
336,000
530,000
322,000
600,000
576,200
424,000
337,900
283,200
503,700
731,600
3,500,000
1,450,000
1,110,000
428,000
969,000
724,000
632,000
1,189,096
1,250,000
2,800,000
672,000
790,000
1,535,000

Percentage of
Leasable Floor Area Leasable Units
Total (%)
(sqm)
(units)0.4
1,151.36
52
0.2
542.6933
0.5
1,244.00
58
0.3
778.19370.4
927.3346
0.6
1,766.47
77
0.5
1,237.80
60
1.4
2,477.11
98
80.9
183,396.22
6,596
0.4
1,861.56
60
0.5
1,967.5464
0.9
2,990.68
112
0.2
1,518.58
33
0.2
1,155.6036
0.3
1,850.20
53
0.2
1,148.72
36
0.4
1,851.39
60
0.4
2,114.53
54
0.3
1,494.36
36
0.2
1,007.30
420.2
911.0727
0.3
1,773.9036
0.5
2,439.90
58
2.2
15,552.59311
0.9
5,094.29
114
0.7
3,411.2460
0.3
1,380.2143
0.6
4,251.91
65
0.5
1,571.04
46
0.4
1,391.02
58
0.7
2,502.11
104
0.8
3,541.43
101
1.8
7,543.10250
0.41,189.12
48
0.5
1,392.00
57
1.0
2,151.67
79

Occupancy Rate
(Nov. 2014)(%)
88.5
100.0
100.0
91.9
97.8
88.3
100.0
100.0
96.2
100.0
95.7
98.3
100.0
84.9
100.0
100.0
100.0
96.2
96.8
95.2
100.0
100.0
96.8
96.7
99.0
98.0
100.0
98.2
98.1
100.0
97.1
96.2
96.4
83.4
91.4
90.6

47

Portfolio

#
144
145
146
147
148
149
150

Name of Property
PRIME URBAN Tamatsukuri
PRIME URBAN Sakaisuji Honmachi
PRIME URBAN Hakata
PRIME URBAN Yakuin Minami
PRIME URBAN Kashii
PRIME URBAN Hakata Higashi
PRIME URBAN Chihaya
Other Areas
Total

Location
Osaka-shi, Osaka
Osaka-shi, Osaka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka
Fukuoka-shi, Fukuoka

Acquisition Price(thousands of yen)
906,000
1,780,000
830,000
351,000
396,000
693,000
545,000
30,407,696
159,310,696

Percentage ofTotal (%)

Leasable Floor Area
(sqm)

Leasable Units(units)

0.6
1.1
0.5
0.2
0.2
0.4
0.3
19.1
100.0

2,373.10
3,909.90
2,176.23
897.84
1,222.34
1,854.13
1,740.70
89,231.30
272,627.52

80
82
67
34
39
65
48
2,458
9,054

Occupancy Rate
(Nov. 2014)(%)
91.3
94.8
92.3
93.1
88.4
95.7
94.1
96.3
96.2

48

Changes in Financial Performance
11th FP

12th FP

13th FP

14th FP

15th FP

16th FP

Operating Revenues

million y en

5,250

5,174

5,257

5,406

5,594

5,480

Operating Profits

million y en

2,507

2,452

2,433

2,558

2,513

2,423

Net Income

million y en

1,856

1,875

1,876

1,965

1,955

1,877

Asset Total

million y en

156,780

156,703

156,576

168,019

167,940

164,852

Interest-bearing Debt Total

million y en

83,182

83,092

83,002

89,84089,75086,820Net Asset

million y en

70,81870,836

70,83875,23675,22675,148Return on Assets (ROA)

%

2.4

2.4

2.4

2.4

2.3

2.3

Return on Equity (ROE)

%

5.2

5.3

5.3

5.4

5.2

5.0

FP End Capital Adequacy Ratio

%

45.2

45.2

45.2

44.8

44.8

45.6

LTV

%

53.1

53.0

53.0

53.5

53.4

52.7

times

4.3

4.5

4.6

4.8

4.8

4.6

%

1.28

1.27

1.24

1.17

1.16

1.18

y ears

3.0

3.0

3.3

3.5

3.7

3.7

million y en

4,016

4,010

3,953

4,118

4,156

4,126

%

5.34

5.31

5.25

5.03

5.20

5.17

FFO

million y en

2,817

2,850

2,833

2,934

2,979

2,929

Portfolio

properties

152

153

152

155

153

150

Acquisition Price Total

million y en

149,862

150,587

150,966

161,917160,247

159,310

Book Value Total

million y en

150,099

149,972

149,650

160,219

157,793

156,026

Appraisal Value Total

million y en

141,011

141,836

143,063

155,472

156,322

156,590

NAV per Unit

thousand y en

408

415

425

438

458

470

Interest Coverage Ratio
Weighted Average Interest Rate
Long-term Debt Average Remaining Duration

Rent NOINOI Yield (acquisition price base)

ROA=Current Profits/[(Total Asset Value at Start of FP+Total Asset Value at FP End)÷2]x100 *annual basis
ROE=Net Income/[(Net Asset at FP Start+Net Asset at FP End)÷2]x100 *annual basis
Capital Adequacy Ratio at FP End=Net Asset at FP End/Total Asset at FP End x 100
LTV=Total Interest-bearing Debt at FP End/Total Asset at FP End x 100
Interest Coverage Ratio=Net Income Before Interest Depreciation/(Interest Expenses+Investment Coroporation Bond Interest)

Rent NOI=Real Estate Rental Business Revenues-Real Estate Rental Business Income+Current FP Depreciation and Amortization
NOI Yield (Acquisition Price Base)=Rent NOI/Total Acquisition Price x 100 *annual basis
FFO=Net Income+Current FP Depreciation and Amortization+Investment Corporation Bond Issuance Ammortization-Real Estate Disposition Profit & Loss
NAV per Unit=[Net Asset Total-(Income Statement Total-Appraisal Value Total)]/Total Number of Investment Units Issued

49Interest-bearing Debts
Lender Diversification

Maturity Diversification
FP of Repayment

17th Fiscal Period(ending May 31, 2015)

18th Fiscal Period(ending Nov. 30, 2015)

19th Fiscal Period(ending May 31, 2016)

20th Fiscal Period(ending Nov. 30, 2016)
21st Fiscal Period(ending May 31, 2017)

Amount of Repayment¥7,790 million¥9,790 million¥4,790 million¥10,530 million¥3,150 million(20 Lenders)

LenderAmountInterest Rate

Date of Loan

Date of Repayment

1 Lender¥1,000 million

1.79200%

Feb. 26, 2010

Feb. 26, 2015

Category

1 Lender¥1,300 million

2.23500%

May 15, 2007

Feb. 27, 2015

5 Lenders¥5,400 million

0.96365%

Feb. 27, 2012

Feb. 27, 2015

1 Lender¥40 million

2.10000%

Aug. 27, 2009

（Note2）

1 Lender¥50 million

2.03000%

Feb. 26, 2010

（Note3）

5 Lenders¥9,700 million

1.00900%

Feb. 27, 2012

Aug. 27, 2015

1 Lender¥40 million

2.10000%

Aug. 27, 2009

（Note2）

1 Lender¥50 million

2.03000%

Feb. 26, 2010

（Note3）

1 Lender¥4,700 million

1.00000%

Dec. 26, 2011

Dec. 26, 2015

1 Lender¥40 million

2.10000%

Aug. 27, 2009

（Note2）

1 Lender¥50 million

2.03000%

Feb. 26, 2010

（Note3）

2 Lenders¥9,400 million

1.11700%

Dec. 26, 2011

Jun. 26, 2016

1 Lender¥1,080 million

2.10000%

Aug. 27, 2009

Aug. 27, 2016

1 Lender¥50 million

2.03000%

Feb. 26, 2010

（Note3）

3 Lender¥1,800 million

0.69000%

Oct. 25, 2013

Feb. 26, 2017

1 Lender¥1,350 million

2.03000%

Feb. 26, 2010

Feb. 26, 2017

1 Lender¥750 million

0.56182%

Aug. 27, 2014

Aug. 26, 2017

Long-term Loan
￥76,820 million

Lender

Major
Banks
(4)

Trust
Banks
(4)

Regional
Banks(4)Amount(millions of yen)

The Bank of Tokyo-Mitsubishi UFJ

12,100Sumitomo Mitsui Banking

12,100Mizuho Corporate Bank

6,900

Resona Bank

2,400

Mitsubishi UFJ Trust and Banking

12,100Sumitomo Mitsui Trust Bank

5,200

The Nomura Trust and Banking

3,700

Mizuho Trust & Banking

1,500

The Iyo Bank

1,000

The Bank of Fukuoka

1,000

22th Fiscal Period(ending Nov. 30, 2017)¥4,670 million

3 Lender¥3,920 million

1.08500%

Aug. 27, 2012

Aug. 27, 2017

The Chiba Bank

750

23th Fiscal Period(ending May 31, 2018)¥5,420 million

6 Lender¥5,420 million

1.12013%

Aug. 27, 2012

Feb. 27, 2018

The Tokyo Tomin Bank

500

24th Fiscal Period(ending Nov. 30, 2018)¥5,400 million

3 Lender¥5,400 million

0.99000%

Sep. 30, 2013

Aug. 26, 2018

Taiyo Life Insurance

3,000

26th Fiscal Period(ending Nov. 30, 2019)¥1,600 million

4 Lender¥1,600 million

1.16500%

Dec. 03, 2012

Nov. 26, 2019

Mitsui Sumitomo Insurance

1,100¥1,000 million

1 Lender¥1,000 million

1.48625%

May 23, 2013

May 27, 2020

1 Lender¥800 million

1.28277%

Sep. 30, 2013

Aug. 26, 2020

6 Lender¥4,700 million

1.18000%

Oct. 25, 2013

Aug. 26, 2020

1 Lender¥500 million

1.15566%

Oct. 25, 2013

Aug. 26, 2020

1 Lender¥2,000 million

1.17750%

Feb. 27, 2014

Feb. 26, 2021

1 Lender¥1,000 million

1.68200%

May 23, 2013

May 27, 2021

1 Lender¥3,500 million

1.62500%

May 23, 2013

May 27, 2021

1 Lender¥2,700 million

1.24100%

May 23, 2013

Aug. 26, 2021

27th Fiscal Period(ending Nov. 31, 2019)28th Fiscal Period(ending Nov. 30, 2020)
29th Fiscal Period(ending May 31, 2021)¥6,000 million¥6,500 million

30th Fiscal Period(ending Nov. 30, 2021)¥2,700 million

31th Fiscal Period(ending May 31, 2022)¥4,500 million

32th Fiscal Period(ending Nov. 30, 2022)

19th Fiscal Period(ending May 31, 2016)
21st Fiscal Period(ending May 31, 2017)

5 Lender¥4,500 million

1.31850%

Feb. 27, 2014

Feb. 26, 2022

¥2,980 million

4 Lender¥2,980 million

1.19700%

Sep. 05, 2014

Aug. 26, 2022

¥76,820 million

20 Lenders

－

－

－

¥5,000 million

1.21000%

Feb. 25, 2011

Feb. 25, 2016

¥5,000 million

1.03000%

Feb. 24, 2012

Feb. 24, 2017

－

－

－

¥5,000 million¥5,000 million¥86,820 million

Investment
Corporation Bond
Investment
Corporation Bond

－

－

－

(Note 1) The interest rate stated regarding this loan takes into consideration the Interest Rate Swap transaction.
(Note 2) The amount of ￥40 million to be repayed on February 27, 2010, the first repayment date, and every August 27 and February 27 thereafter, until the last repayment of ￥1,080 million on August 27, 2016.
(Note 3) The amount of ￥50 million to be repayed on August 26, 2010, the first repayment date, and every February 26 and August 26 thereafter, until the last repayment of ￥1,350 million on February 26, 2017.
(Note 4) Regarding the Floating Rate, the interest rate as of the end of the 16th Fiscal Period is stated.

Insurance
Companies Daido Life Insurance(5)
Dai-ichi Life Insurance Co., Ltd.

Others(3)

800

Nippon Life Insurance Company

500

Development Bank of Japan

7,550

Shinkin Central Bank

2,520

Aozora Bank

1,000

Total
（20）

Bond

1,100

76,820First Series Unsecured
Investment Corporation
Bonds
Second Series Unsecured
Investment Corporation
Bonds
Total

5,000
5,000
10,00050

Fund Profile
Structure
Asset Management
Company

History
Asset Custodian
General Administration

The FundAsset
Management
Services
Agreement

Asset Custody
Agreement

Administration ofUnitholders Register
Management ofSpecial Accounts

Administration
Agreement, etc.

Mitsubishi UFJ
Trust and Banking
Corporation

Property
Information

Information & ResearchService Providers

Nomura Real Estate Residential Fund, Inc.

Nomura Real Estate
Development Co., Ltd.
Nomura Real Estate
Urban Net Co., Ltd.

Accounting
Service
Agreement

General Administration(Accounting, etc.)

Heiseikaikeisha Tax
Corporation

July 28, 2006
Notification of incorporation by the founder (Nomura Real
Estate Asset Management Co., Ltd.) under Article 69 of theInvestment Trust Law.
August 3, 2006
Registration of incorporation under Article 166 of theInvestment Trust Law. Incorporation of the Nomura Real
Estate Residential Fund, Inc.
August 4, 2006
Applied for registration under Article 188 of the Investment
Trust Law.

Unitholders Meeting

Specified Related Party

Board of Directors Meeting

Nomura Real Estate
Holdings, Inc.
Nomura Real Estate
Development Co., Ltd.

Financial Agent
Agreement

AuditorErnst & Young ShinNihon LLC

Nomura Real Estate
Partners Co., Ltd.

General Administration(Financial Agent)

The Bank ofTokyo- Mitsubishi UFJ, Ltd.
Sumitomo Mitsui
Banking Corporation

August 24, 2006
Registration approved by the Prime Minister of Japan under
Article 187 of the Investment Trust Law (Registration number
56, filed with the Director of the Kanto Local Finance
Bureau).
February 14, 2007
Listing on the Tokyo Stock Exchange.

Debt
FinanceFinancial Institutions, etc.

Investment

Debt
Rent, etc.

Residential Properties(Real Estate Related Assets)

Asset
CapitalInvestment

Property Management
Instructions for
Rent &
Management

Rental Strategies,
Plans for
Repairs, etc.

Property Management
Companies
Select the best property
management companies
for each property

Repaymentof Principal& Interest

Unitholders

EquityDistribution

Unitholders

51

Asset Management Company Overview
Organization Chart (as of November 2014)■ Overview
Company name

Nomura Real Estate Asset Management Co., Ltd.

Shareholder

Nomura Real Estate Holdings, Inc. (100%)

Location

8-5-1 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Contact Information+81-3-3365-7729

Registration,
License, etc.

・Financial instruments business operator registration:
Commissioner of the Kanto Local Finance Bureau(Financial Instruments) No. 374
・Licensed for discretionary proxy in realty trading:
Minister of Land, Infrastructure and Transport
Permit No.18
・Licensed for real estate trading: Governor of Tokyo (3)No. 81679

Memberships

・The Investment Trusts Association, Japan; The Japan
Investment Advisers Association, The Association
for Real Estate Securitization, etc.

nrf3240@nomura-re.co.jp

52This document has been prepared for the purpose of provision of information only, and should not be construed
as an offer, solicitation or commercial conduct of any nature associated with any specific products. Investors
wishing to purchase the investment units of Nomura Real Estate Residential Fund, Inc. should contact their own
securities brokers or dealers. A fee may be charged by your financial instruments business operator in relation
to the sale or purchase of investment units.
For management fees that the Fund pays to Nomura Real Estate Asset Management Co., Ltd., please refer tothe terms and conditions of the Fund, asset management reports, etc.
The forward-looking statements with respect to the future financial results contained in this document are basedon the current facts about the investment policy of the Fund, applicable laws and regulations, the market
environment, business practice, etc., as of the preparation date of this document and do not reflect or consider
any changes in the circumstances after the preparation date. These forward-looking statements inherently
reflect uncertainty about known risks as well as unknown risks and other factors and may deviate from theactual operating and management results, financial conditions, etc., of the Fund.
Investment in real estate investment securities may result in a loss due to a decline in the transaction pricecaused by, for example, changes in the price or the revenue-generating capability of the underlying properties
or deterioration of the financial conditions of the issuer.
Although the information contained in this document is intended to be complete and thorough, there is no
assurance of precision and safety of the same. Please note that the contents of this document is subject tochange or cancellation without prior notice.
It is prohibited to make duplication, reproduction, distribution or use of any part or whole of the information
contained in this document without express prior written consent.