[For Translation Purposes Only]
April 4, 2017

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 Officer
Inquiries:
Ken Okada
Director and Managing Executive Officer
TEL. +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Property Disposition

Nomura Real Estate Master Fund, Inc. (“Nomura Master Fund” or the “Fund”) announced thedecision made today by Nomura Real Estate Asset management Co., Ltd., a licensed investment trustmanagement company retained by the Fund to provide asset management services, that it will dispose
an asset (the “Disposition”), as described below.

1．Summary of on an Asset scheduled to be Disposed

Property nameUse(Scheduled)
Date ofDate ofagreement
disposition

Transferee(Scheduled)Transfer Book ValuePrice(¥million)(Note 2)(¥million)(Note 1)

Difference(¥million)(Note 3)Tennozu Park Side
April 4,May 12, Undisclosed
Office12,70012,6792120172017(Note 4)
Building(Note1) Scheduled transfer price does not include transfer costs, adjustment amounts of property taxes and city planningtaxes and consumption taxes, etc.
(Note2) Indicates anticipated Book Value as of August 31, 2016.
(Note3) This is only a reference value which is the difference between the scheduled transfer price and anticipated bookvalue, therefore, it is different from gain or loss on sale.
(Note4) As the Fund has not obtained an agreement with the Transferee, this information is not disclosed.
(Note5) The asset hold beneficial interests in trusts in which real estate properties are the principal trust assets.

The asset to be transferred will be referred to as the “the Asset”, hereinafter.

12．Reason for Disposition of the AssetIn accordance with the Medium- to Long-term Management Strategy announced in November
2015, Nomura Master Fund designated the next three years as its Quality Phase and has been
implementing various related measures.
One key measure is Strategic Property Replacement (SPR), which is aimed at improving thequality of our portfolio. The Fund has decided to sell this property as part of this measure and inlight of comprehensive consideration of such factors as the portfolioas asset mix and thepossibility of a decline in the propertycided to sell this pre to aging.

3．Property Summary of the Asset to be Disposed
Property Name
Type of AssetTrustee
Trust term
Registry
Location(Note 1)
StreetAccessArea

Building

Type of OwnershipLand(Note 1)
Building Coverage Ratio
Floor Area Ratio
Type of Ownership
Use(Note 1)
Completion Date
(Note 1)
Floor Area
Structure(Note 1)

Tennozu Park Side Building
Trust beneficial interest
Sumitomo Mitsui Trust Bank, Limited
From March 27, 1991 to February 29,2024
2-6-1 Higashishinagawa, Shinagawa Ward, Tokyo and two other lots
2-5-8 Higashishinagawa, Shinagawa Ward, Tokyo
1 minute on foot from Tennozu Isle Station Tokyo Waterfront Area Rapid
Transit Rinkai Line
3 minutes on foot from Tennozu Isle Station Tokyo Monorail LineCompartmentalized ownership
5,816.26 ㎡(Note 2)
100％(Note 3)
698.5％(Note 4)
Compartmentalized ownership
Office, Retail
January 13,1995
17,587.30 ㎡(Note 5)
S/RC/SRC, B2/21F

Acquisition price¥12,700 million
Transfer Price¥12,700 million
Book Value（Note 6）¥12,679million
Difference¥21million
Appraiser
The Tanizawa Sogo Appraisal Co., Ltd.
Appraisal
Appraisal Value¥12,100 million
Value
Appraisal Date
February 28, 2017
Leasing Status（As of April 4,2017）（Note 7）
Total Number of Tenants 18
Total Rental Income¥778 million
Security Deposits¥613 million
Occupancy Rate
82.1％
Total Leased Floor Space 14,815.15㎡
Total Leasable Floor
18,051.60㎡
SpaceFebruary,
February,February,
Occupancy Rates in the2013
2014
2015
Past
97.2％
90.9％
84.7％

February,
2016

February,
2017

90.9％

96.5％

(Note 1) Location and other Items
Location (registry), Land, Use, Completion Date, and Structure are based on the information in the realestate registry.
(Note 2)LandThe land area given is that for the entire lot on which the building stands; the Fund holds a 6,898/10,000
portion (co-ownership stake in the ownership rights) of the rights to the site.
(Note 3) Building Coverage Ratio
2

The property is located in a commercial zone where the building coverage ratio is 80% in principle.
Because the property is in a fire prevention zone and certified fireproof, however, the applied coverage
ratio is 100%.
(Note 4) Floor Area Ratio
The floor area ratio for the property is 500% in principle. However, based on the Building Standards Law
Article 59 Paragraph 2 and Article 86, an increased ratio is applied to the property and a neighboring
property (Tennozu View Tower); thus, the applied floor area ratio for the property is 698.50%.
(Note 5) Floor Area
“Floor area” refers to area exclusively owned by the Fund through its trustee.
(Note 6) Book Value
Indicates anticipated Book Value as of August 31, 2016.
(Note 7) Leasing Status“Total Number of Tenants” is the total number of end tenants actually leasing the building of theProperty.
“Total Rental Income” is the amount obtained by multiplying the monthly rent stated in the leaseagreements with end tenants actually leasing the building of the Property by 12 (truncated at the nearest
million yen). Note that rent-free periods under the leasing contracts for certain tenants are not taken into
account.
“Security Deposits” indicates the amount of security and other deposits specified in the aforementioned
lease agreements (truncated at the nearest million yen).
“Total Leased Floor Space” indicates the total floor space leased to end tenants.

4．Transferee Profile
As the Fund has not obtained an agreement with the transferee, who are Japanese specificpurpose Companies, this information is not disclosed. The transferee is not related parties under
the Law Concerning Investment Trusts and Investment Corporations (Investment Trust Law) of
the asset management company.
5．Transaction with Related Parties
There is no special relation between the said company and the Fund or asset managementcompany for this disposition.
6．Brokerage Profile
As the Fund has not obtained the consent of the broker of this sale to disclose thisinformation, it is not disclosed.
There are no significant capital or personal relationships between the broker and the Fund or
the asset management company as of this document’s release date. Also, the broker is notconsidered a directly associating party of the asset management company. However, for the Fund,the broker acts as an asset custodian, lender and trustee of multiple properties owned by the Fund.
The broker is therefore considered an asset custodian of the Fund and thus a directly associating
party of the Fund.
7. Form of Payment, etc.
On the date of the transfer, Nomura Master Fund will receive the entire sale price of theproperty to be sold in a lump-sum payment from the buyers.
In addition, the transfer of these properties involved an increase in fund on hand. Nomura
Master Fund plans to allocate the increased fund to repayment of debt, the reshuffling ofproperties and other activities for portfolio management.

3

8．Schedule for Disposition
April 4, 2017
May 12, 2017Concluded a sales contract related to the disposition of the Asset.
Disposition the Asset. (delivered the trust beneficiary interests)

9．Forecasts of Financial Results
Due to the Disposition, we expect to incur an impairment loss of 220 million yen for the fiscalperiod ended February 28, 2017 (September 1, 2016 to February 28, 2017) as of today. However,as the impact of such incurrence of impairment loss on the entire portfolio performance isminimal, there is no revision to the forecast of financial results for said period.Forecasts of theFund’s performance in the fiscal period ending August 31, 2017 (March 1, 2017 to August 31,2017) will be formulated in light of the status of the portfolio as a whole, including the impact ofthis sale, and published when the results for the fiscal period ended February 28, 2017 areannounced (announcement planned for April 14, 2017).

410．Appraisal Summary
Property Name

Tennozu Park Side Building

Appraisal Value¥12,100,000,000

Appraiser

The Tanizawa Sogo Appraisal Co., ltd.

Appraisal DateFebruary 28, 2017
(Amount：¥)
Amount orpercentage

Item

12,100,000,000

Capitalization approach pricePrice calculated by the direct capitalization
approach(1) Operating income (a)-(b)(a) Gross rental income(b) Losses due to vacancies, etc.

12,200,000,000
1,099,454,2681,169,560,569
70,106,301(2) Operating expenses
Maintenance518,201,405

Utilities costs

59,570,280

268,607,808

Repair costs

47,300,000

Property management fees

20,889,631

Advertisement for leasing, etc.

8,116,483

Taxes
Insurance premium

100,734,400

Other expenses

10,994,543

1,988,260(3) Net operating income from leasing
business (NOI=(1)-(2))

5,724,678(5) Capital Expenditure Reserve

111,800,000(6) Net Cash Flow
(NCF = (3)+(4)-(5))

475,177,541
3.9％(7) Capitalization rate

Estimated based in part on market rent levels.
Estimated based on the standard medium- to long-term
vacancy rate.
Estimated based in part on schedules of changes inmanagement specifications and contracting rates.
Estimated based in part on past levels of income andcosts.
Repair costs for the building were estimated withreference to the Engineering Report, the building’s age,costs recorded at similar properties and other factors.
Estimated based on the property managementagreement.
Estimated based on the property managementagreement.
Estimated based on materials for fiscal 2016.
Estimated based on relevant insurance premium ratetables.
Estimated based in part on past levels of income andcosts.

Estimated based on an investment yield of 1%.
Estimated with reference to the Engineering Report, thebuilding’s age, amounts recorded at similar properties
and other factors.

Estimated based mainly on the yield of similar officebuilding transactions, with reference to the characteristicsof the area surrounding the property, the property’s
particular characteristics and other factors.

12,000,000,000
3.9％

Terminal capitalization rate
Cost Approach Price
Ratio of land
Ratio of building
Matters noted inreconciliation of indicatedvalue and determination ofappraisal value

The capitalization approach was used to estimate theincome-based value, with the base value calculated using
the discounted cash flow approach and verified using thedirect capitalization approach.
Estimated by reducing a standard level of net cash flowby the capitalization rate.

581,252,863(4) Profit through management oftemporary deposits, etc.

Price calculated by the Discounted
Cash Flow Approach
Discount rate

Grounds

4.1％
13,400,000,000
68.8％
31.2％

―5

Estimated with reference to the individual risks for theproperty and other factors.
Estimated based on the capitalization rate, withconsideration given to levels of future uncertainty.

【Exhibits】
Portfolio Overview after Desposition of the Asset*<Nomura Real Estate Master Fund, Inc> URL: http://www.nre-mf.co.jp/en/

Exhibits
Portfolio Overview after Desposition of the Asset

Asset TypeOffice

RetailLogistics

Residential

Percentage toArea (Note 1)

Acquisition Price (mln)Tokyo Area

348,330

37.1％

Other Area

71,930

7.7％

Total

420,260

44.7％

Tokyo Area

107,667

11.5％

Other Area

65,996

7.0％

Total

173,663

18.5％

Tokyo Area

146,930

15.6％

Other Area

10,040

1.1％

Total

156,970

16.7％

Tokyo Area

151,518

16.1％

Other Area

32,527

3.5％

Total

184,045

19.6％

Tokyo Area

4,900

0.5％

Total

4,9000.5％-939,838

100.0％

total(%) (Note 2)

OthersGrand Total(Note1) “Greater Tokyo” refers to Tokyo Prefecture, Kanagawa Prefecture, Chiba Prefecture and Saitama
Prefecture. “Other Areas” refers to cabinet-order designated cities, prefectural capitals, and cities having
a population of at least 100,000 and their peripheral areas, excluding Greater Tokyo.
(Note2) “Percentage to Total” indicates the ratio of the total acquisition price of properties for respective uses
and in respective areas to the total acquisition price of the entire portfolio based on acquisition prices.
Furthermore, as the figures were rounded to the first decimal place, the total may not necessarily be100%.
(Note3) Figures in the above table assume the successful dispositions of Ito-Yokado Higashi-Narashino Store(announced in the December 20, 2016 press release entitled “Notice Concerning Property Disposition”),
and the successful dispositions of Mitsubishi Motors Shibuya and Mitsubishi Motors Suginami(announced in the March 21, 2017 press release entitled " Notice Concerning Property Acquisition andDisposition").