[For Translation Purposes Only]
June 18, 2019
For Immediate Release
To Whom It May Concern
Nomura Real Estate Master Fund, Inc.
Securities Code: 3462
Shuhei Yoshida, Executive Director
Asset Management Company:
Nomura Real Estate Asset Management Co., Ltd.
Norio Ambe, President & Chief Executive Officer
Inquiries:

Hiroshi Ishigooka
Executive Officer
Head of NMF Investment Management GroupTEL +81-3-3365-8767 nmf3462@nomura-re.co.jp

Notice Concerning Property Acquisition
Nomura Real Estate Master Fund, Inc. (“NMF” or the “Fund”) announced the decision made today by Nomura
Real Estate Asset Management Co., Ltd. (“NREAM” or the “Asset Management Company”), a licensed investment
trust management company retained by the Fund to provide asset management services, that it will acquire asset (the“Acquisition”) as described below.

1．Overview of the Acquisition

No.

Property Name

Use

(Scheduled)
Date ofAgreement(Scheduled)
Date of
Acquisition

Seller(Scheduled)
AcquisitionPrice(¥million)(Note 1)

1

Red Planet Naha Okinawa

HotelsJune 26, 2019

June 26, 2019

Undisclosed(Note 2)2,650

(Note 1) The amount excluding acquisition related costs, property tax, city planning tax, consumption tax and local consumption tax isstated.
(Note 2) Undisclosed, since a consent has not been obtained from the Seller.
(Note 3) The asset to be acquired is a beneficiary interest in a trust for which real estate is the principal trust asset.
(Note 4) The asset to be acquired is scheduled to be acquired using cash on hand.

The above property is referred to hereinafter as the “Property to Be Acquired”.

2．Reasons for the Acquisition
The Fund determined that acquiring the Property to Be Acquired would help secure stable earnings andsteady growth of the Fund’s investment assets over the medium to long term, in line with the asset management
objectives and policies specified in the Fund’s Articles of Incorporation. As such, the Fund decided to acquire
the Property to Be Acquired.
The main strengths of the Property to Be Acquired are as follows:
・ The accumulated number of overnight travelers in Okinawa Prefecture has increase by approximately 1.6
times over the past seven years, from 14.14 million people in 2011 to 22.82 million people in 2018 (ranked
5th in the number of overnight travelers by prefecture), showing a high increase rate even when compared－ １ －with other major cities. Especially, the accumulated number of international overnight travelers has increased
significantly by 9.3 times over the past seven years, from 560 thousand people in 2011 to 5.25 million people
in 2018, with the increased number of LCCs arriving from Taiwan, South Korea, Hong Kong, etc. and otherfactors. In addition, the accumulated number of Japanese overnight travelers has remained stable at around17 million people since 2014. Consequently, Okinawa Prefecture is expected to enjoy continuous high demandcentering on tourism going forward.
Change in the Accumulated Number of Overnight Travelers in Okinawa Prefecture
22,19820,78820,141

21,68522,82920,062

15,57914,144

Source: Overnight Travel Statistics Survey (Japan Tourism Agency)

Comparison of the Accumulated Number of Overnight Travelers in 2018 andIncrease Rate of Overnight Travelers Compared to 2011Levels by Prefecture

Source: Overnight Travel Statistics Survey (Japan Tourism Agency)

・ Furthermore, the number of passengers at Naha Airport is on an increasing trend for both domestic andinternational routes. In particular, the number of passengers for international routes has increased significantly
since the opening of the new international terminal in 2014 as LCCs from Taiwan, South Korea, Hong Kong, etc.
started service. In addition, further increase in the number of passengers and accommodation demand is expected
as construction of a new runway 2,700 meters in length is currently underway with operation scheduled to begin
in March 2020.

－ ２ －Change in the Number of Annual Passengers at Naha Airport

Source: Reports on Status of Airport Operations (Ministry of Land, Infrastructure, Transport and Tourism)

Change in the Number of Departures and Arrivals with Additional Runway at Naha Airport

Source: Reassessment Reports on Runway Expansion Project at Naha Airport (Ministry of Land, Infrastructure,
Transport and Tourism)

・ As the data below indicated, composition of the accumulated number of foreign overnight travelers in Okinawa
Prefecture by nationality is 27.9% from Taiwan, 27.2% from South Korea, 20.7% from China and 10.4% from
Hong Kong, which accounts for approximately 86.0% of all foreign travelers. The number of visitors from various
countries including Singapore, Thailand, Malaysia and Indonesia is also on a largely increasing trend as LCCs havestarted operating in these countries.

－ ３ －Composition and Change in the Accumulated Number of Foreign Overnight Travelers in
Okinawa Prefecture in 2018

Source: Overnight Travel Statistics Survey (Japan Tourism Agency)

・ The Property to be Acquired has high transportation convenience as it is located approximately 6km fromNaha Airport and 5 minutes on foot from Miebashi Station on Okinawa Urban Monorail. The area is highly
convenient for tourists as the flourishing Kokusai-dori St. Area within walking distance. In addition,accommodation demand from business travelers can also be expected with National Route 58, where branch
and regional offices of major financial institutions and major companies concentrate, located in front of theProperty to be Acquired.
・ The guest rooms of the Property to be Acquired comprise of 56 double rooms and 61 twin rooms, which
can be expected the demand from both business travelers and tourists. In addition, it has high competitivenesswith all rooms having the bathtub located separately from the toilet and washbasin in consideration of user
friendliness and with multilingual services in consideration of inbound tourists as well as IT services throughdedicated mobile apps for the service aspect.
・ K.K. RED PLANET HOTELS JAPAN (a 100% subsidiary of Red Planet Japan, Inc. listed on JASDAQ
Standard), the lessee and the operator of the Property to be Acquired, is a hotel operator under the umbrellaof Red Planet Hotels Limited, which is expanding its hotel business in the Asia market by building its
reputation as a high-value-added hotel through enhancement of customer-oriented services and functions. It
is highly capable of hotel operation as the Red Planet group currently operates 29 hotels including 4 hotels inJapan. In addition, the Property to be Acquired has fixed-long term lease agreements with the lessee andsecures stable rent income.

－ ４ －3. Summary of Asset to Be Acquired
Property Name
Type of Asset
Trustee
Trust Term
Registry
Location(Note 2)StreetAccessCompletion Date(Note 2)
Use (Note 2)
Structure (Note 2)
Architect
Builder
Building Inspection Agency
Land
Area(Note 2)
Floor Area
Land
Type ofOwnership
Building
Building Coverage Ratio
Floor Area Ratio
Collateral
Property Management Company(Note 4)Master Leasing Company
Type of Master Leasing
Seismic Risk (PML)(Note 5)

Notes
Acquisition Price (Scheduled)
Appraisal Value and Method

Red Planet Naha Okinawa
Trust beneficiary interest in real estate
Mitsubishi UFJ Trust and Banking Corporation
May 17, 2013 to March 31, 2028 (Note 1)
3-1-4 Maejima, Naha City, Okinawa
3-1-4 Maejima, Naha City, Okinawa
5 minutes’ walk from Miebashi Station on Okinawa Urban Monorail
June 6, 2008
Hotel
RC B1F/10F
Kabushiki Kaisha FIO Associates
Agarie Kensetsu Co., Ltd.
Urban Housing Evaluation Center
553.56 m2
3,350.86 m2
Ownership
Ownership
100% (Note 3)
600%
None
THE DAI-ICHI BUILDING CO., LTD.
6.06％
(Based on a May 2019 Earthquake PML Appraisal Report by SOMPORISK MANAGEMENT Inc.)
None¥2,650 million¥2,700 million（Based on the capitalization approach as of June 1, 2019）（Appraiser: Japan Valuers Co., Ltd.）¥147 million

Appraisal NOI(Note 6)
Leasing Status (As of June 18, 2019 ) (Note 7)
Total Number of Tenants
1
Name of Tenant
K.K. RED PLANET HOTELS JAPANHotel Operator
K.K. RED PLANET HOTELS JAPAN
Total Rental Income (Annual)
Undisclosed (Fixed rent only)
Security Deposits
Undisclosed
Occupancy Rate
100.0%
Total Leased Floor Space
3,350.86 m2
Total Leasable Floor Space
3,350.86 m2
February,
February,
February,
2015
2016
2017
Historical Occupancy Rates(Note 8)-

February,2018-

February,2019
100.0%(Note 1) Trust Term
On June 26, 2019 (the planned acquisition date of the Property), the trust agreement is expected to be amended,with its expiration date changed to March 31, 2040.
(Note 2)Location and Other Items
Location (registry), Completion Date, Use, Structure and Area are based on the information in the real estate registry.
(Note 3) Building Coverage Ratio
The Property is located in a neighborhood commercial district where the building coverage ratio is 80% in principle.
As the building is fire resistant in a fire zone, its coverage ratio has increased to 100%.
(Note 4) Property Management Company
Refers to the property management company that is scheduled to be appointed after acquisition.
(Note 5) PML (Probable Maximum Loss)PML shows the probable losses caused by a major earthquake, as a percentage of the expected recovery cost to thereplacement cost. PML is calculated based on the statistical assumption that within next 475 years there is a 0.211% annual－ ５ －chance (10% probability of once every 50 years, i.e., average life time of buildings) of major earthquake occurring.
(Note 6) Appraisal NOI“Appraisal NOI” is the annual NOI (operating income-operating expenses) described in the real estate appraisal report,with June 1, 2019 as the appraisal date.
(Note 7) Leasing Status“Total Number of Tenants” is presented based on a fixed-term lease contract that is expected to go into effect on the dateof acquisition.
“Name of Tenant” is presented based on a fixed-term lease contract that is expected to go into effect on the date ofacquisition.
“Total Rental Income” and “Security Deposits” are both undisclosed as the consent from the tenant has not been obtained.
“Total Leased Floor Space” indicates the total floor space presented based on a fixed-term lease contract that is expected
to go into effect on the date of acquisition.
(Note 8) Historical Occupancy Rates
The historical occupancy rate as of the end of February, 2019 is based on the information provided by the Seller. The
historical occupancy rates before February 2019 are not applicable as the property is single used by the Seller as businessreal estate and is not rented to any third parties

4. Seller Profile
Although the Seller is a Japan Goudo Kaisha, details are not disclosed as a consent from the Seller has not beenobtained. However, as of today, neither the Fund nor the Asset Management Company has any notable capital,
personnel or transactional relationship with the Seller, and the Seller is not a related party of either the Fund or the
Asset Management Company.

5．Status of Owners of the Property to Be Acquired
There is no special relationship of interest between the Seller and the Fund or the Asset Management Company
for the acquisition of the Property to Be Acquired.

6．Broker Profile
There is no brokerage involved in the acquisition of the Property to Be Acquired.

8. Form of Payment, etc.
The Fund will complete settlement on the date of acquisition by paying the agreed price for the property in full to
the Seller using cash on hand.

9．Schedule for Acquisition
June 26, 2019Conclusion of the purchase and sale agreements for the acquisition of theProperty to Be Acquired, and delivery of trust beneficiary interest in real estateof the Property to Be Acquired.

10．Forecasts of Financial Results
There is no revision to Nomura Master Fund’s forecasts of financial results for the fiscal period ending August 31,
2019 (March 1, 2019 to August 31, 2019) and for the fiscal period ending February 29, 2020 (September 1, 2019 toFebruary 29, 2020) by the Acquisition as it has only small impact to the forecast of financial results.

－ ６ －11．Appraisal Summary
Property Name
Appraisal Value
Appraiser
Appraisal Date

Red Planet Naha Okinawa¥ 2,700,000,000
Japan Valuers Co., Ltd.
June 1, 2019
(Yen)
Amount orpercentage

Item

Capitalization Approach Price
Price Calculated by the
Capitalization Approach

2,700,000,000
Direct2,920,000,000(1) Operating Income
Gross Potential Revenue(a)-(d)(a) Gross Rental Income(b) Utilities Income(c) Parking lot Income(d) Other Income
Losses due to Vacancies, etc.
Bad Debt Losses(2) Operating Expenses
MaintenanceUtilities Costs
Repair Costs
Property Management Fees
Advertisement for Leasing, etc.
Taxes
Insurance Premium
Other Expenses(3) Net Operating Income from
Leasing Business (NOI=(1)-(2))(4) Profit through Management of
Temporary Deposits, etc.
(5) Capital Expenditure Reserve(6) Net Cash Flow (NCF = (3)+(4)(5))(7) Capitalization Rate
Price Calculated by the Discounted
Cash Flow Approach

Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed
Undisclosed

Calculated taking into account income-basedvalues determined by comparing andconsidering the direct capitalization approach ,focusing on the discounted cash flow
approach.
Calculated the standard level of stable net
revenue over mid-to-long term based on acomprehensive consideration of such factors
as the cash flow analysis using the discounted
cash flow approach, and calculated by
reducing the capitalization rate.

(Note)

147,478,145
Undisclosed(Note)

Undisclosed
142,853,878
4.90％

Calculated based on a comprehensive
consideration of such factors as conditions of
the location, the building, and the contract ofthe property.

2,630,000,000

Discount Rate

4.70％

Terminal Capitalization Rate

5.10％

Cost Approach Price

Grounds

1,050,000,000－ ７ －Calculated based on a comprehensive
consideration of such factors the yield on
investment of similar buildings and thecharacteristics of the property.
Calculated based on the yield on investment ofsimilar buildings, the future movement of theyield on investment, risks of the property as apreferred investment, general forecasts ofeconomic growth rate, and price trends of realestate and rents.

Ratio of Land
Ratio of Building
Matters Noted in
Reconciliation ofIndicated Value andDetermination of
Appraisal Value(Note)

76.7％
23.3％
The Property is located along the National Route 58 lined with branches andreasional offices of main financial institutions and hotels. It is also located in highpotential area as a tourism hub within walking-distance to Kokusai-dori Street, thecity’s busiest entertainment district with shopping arcade etc., and to Tomari Wharf.
In such a favorable location, the Property is a hotel specializing in accommodation
with efficient design and it can be expected stable operation for medium to longterm. In view of the above, the appraisal value was determined with an emphasis on
the capitalization approach price, in which the investment value was appropriatelyreflected.

These items contain information for which the Fund bears a duty of confidentiality to the lessees or informationthat could be used to calculate such information. The disclosure of these items could result in a breach of said dutyof confidentiality, which could negatively impact the Fund and thus the interests of its unitholders. Accordingly,
these items are undisclosed.

－ ８ －【Exhibits】
Exhibit 1

Portfolio Overview after Acquisition

Exhibit 2

Photos of the Property to Be Acquired

Exhibit 3

Maps of the Property to Be Acquired*<Nomura Real Estate Master Fund, Inc.> URL: https://www.nre-mf.co.jp/en/－ ９ －Exhibit 1
Overview of the Portfolio after Acquisition(¥ million)
Area

Greater Tokyo Area
(Note 1)

Sector(Scheduled) Total
Other Areas

Acquisition Price

Percentage of Total(Note 2)(by Sector)

Office384,095

71,930456,025

45.1

Retail109,81166,716

176,527

17.5

Logistics

171,230

3,460

174,690

17.3

Residential

159,574

33,328

192,902

19.1

Hotels

-

6,250

6,250

0.6

Others

4,900

-

4,900

0.5

(Scheduled) Total
Acquisition Price(by Area)

829,610

181,684

1,011,294

100.0

82.0

18.0

100.0

Percentage of Total(Note 2)

(Note 1) “Greater Tokyo Area” 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.
(Note 2) “Percentage of Total” indicates the ratio of the (Scheduled) total acquisition price of properties for each use and in eacharea to the total acquisition price of the entire portfolio. As the figures are rounded to the first decimal place, they may
not add up to exactly 100%.

Exhibit 2
Photos of the Property to Be Acquired

Exhibit 3
Maps of the Property to Be Acquired