(Reference) SUMMARY OF FINANCIAL RESULTS (REIT)
For the 2nd Fiscal Period Ended August 31, 2016
October 14, 2016
REIT securities issuer:
Representative:

Nomura Real Estate Master Fund, Inc. (“NMF”)
Securities code: 3462
Satoshi Yanagita, Executive Director

Asset management company:
Representative:
Inquiries:

Nomura Real Estate Asset Management Co., Ltd.
Norio Ambe, President and Chief Executive Officer
Kenichi Okada, Head of NMF Investment Management Group

Scheduled date of filing of securities report:
Scheduled date of commencement of distribution payout:
Preparation of supplementary materials on financial results:
Holding of briefing session on financial results:

Stock exchange listing: Tokyo Stock Exchange
URL: http://www.nre-mf.co.jp/english/

TEL: +81-3-3365-8767

November 28, 2016
November 18, 2016
Yes
Yes (for institutional investors and analyst)[Amounts less than one million yen are truncated]

1. Financial Results for the 2nd Fiscal Period (from March 1, 2016 to August 31, 2016)(1) Operating Results[% figures are the rate of increase (decrease) compared with the previous period]
Operating revenues
Period ended
August 31, 2016
February 29, 2016

million yen
30,97624,313Operating profit

%
27.4%
—

Net income
per unit
Period ended
August 31, 2016
February 29, 2016

million yen
11,682
6,483

Ordinary income

%
80.2%
—

Return on unitholders’equityyen

million yen
9,356
4,050

%
131.0%—

Ratio ofordinary income
to total assets

%

2,513
1,087

Net income%

million yen
9,355
4,048

131.1%—

Ratio ofordinary income
to operating revenues
%

2.0
0.8

%

1.0
0.4

30.2
16.7

(Note 1) NMF’s accounting period for the fiscal period ended February 29, 2016 is the 152 days from October 1, 2015 to February 29, 2016.
(Note 2) Rates of period-on-period change in operating revenues, operating profit, ordinary income and net income, shown as percentages, are not given
for the fiscal period ended February 2016 because said period was the Company’s 1st fiscal period.

(2) Distributions

Period ended
August 31, 2016
February 29, 2016

Distribution
per unit(excluding
distribution
in excess of net
income)Total
distributions(excluding
distribution
in excess of
net income)Distribution
in excess of
net income per
unit

Total
distributions
in excess of
net income

yen
2,473
317

million yen
9,204
1,179

yen
563
1,902

million yen
2,095
7,079

Distribution
per unit(including
distribution inexcess of net
income)Total
distributions(including
distribution
in excess of
net income)

3,036
2,219

million yen
11,3008,259

yenDistribution
payout ratio(Note 2)

Ratio ofdistributions to
net assets

%
98.3
29.1

%
1.9
0.2

(Note 1) Of the ¥1,902 distribution in excess of net income per unit in the fiscal period ended February 29, 2016, ¥1,649 is a distribution of the allowancefor temporary difference adjustments and ¥253 is other distributions in excess of net earnings. Furthermore, the ratio of decreasing surplus is0.003.
Of the ¥563 distribution in excess of net income per unit in the fiscal period ended August 31, 2016, ¥0 is a distribution of the allowance fortemporary difference adjustments and ¥563 is other distributions in excess of net earnings. Furthermore, the ratio of decreasing surplus is 0.004.
(Note 2) Distribution Payout Ratio is calculated using the below formula and truncated at the first decimal place.
Distribution Payout Ratio = Total Distributions (excluding distribution in excess of Net Income) / Net Income × 100(Note 3) Ratio of Distributions to Net Assets is calculated using the below formula and truncated at the first decimal place.
Ratio of Distributions to Net Assets = Distribution Per Unit (excluding distribution in excess of Net Income) / {(Net Assets per Unit at the
beginning of the fiscal period + Net Assets per Unit at the end of the fiscal period) / 2} × 100(3) Financial Position
Total assets
Period ended
August 31, 2016
February 29, 2016

million yen
935,964928,297

Net assets
million yen
479,311477,601- 1 -Net assets to total assets

Net assets per unit

%
51.2
51.4

yen
128,777
128,318

(4) Status of Cash FlowsNet cashprovided by (used in)operating activities
Period ended
August 31, 2016
February 29, 2016

Net cashprovided by (used in)investing activities

million yen
48,162
8,725

Net cashprovided by (used in)financing activities

million yen(29,555)(11,500)

Cash andcash equivalents
at end of period

million yen(1,661)(469)

million yen
75,27058,325

2．Earnings Forecasts for the 3rd Fiscal Period (from September 1, 2016 to February 28, 2017)[% figures are the ratio of increase (decrease) compared with the previous period]
Distribution
per unit

PeriodendingFebruary 28,
2017

Operating revenues

Operating profit

Ordinary income

millionyen

millionyen

millionyen

34,527%
11.5

10,892

%
(6.8)

8,157

%
(12.8)(excluding
distribution
in excess of
net income)Net income

millionyen

8,156

Distribution
in excess of
net income
per unit

Distribution
per unit(including
distribution
in excess of net
income)

%

yen

yen

yen

(12.8)

1,880

1,025

2,905

(Reference) Forecast net income per unit for the fiscal period ending February 28, 2017 is ¥1,949*Other(1) Changes in Accounting Policies, Changes in Accounting Estimates and Retrospective Restatements① Changes in accounting policies accompanying amendments to accounting standards, etc.:② Changes in accounting policies other than those in ①:③ Changes in accounting estimates:④ Retrospective restatements:

None
None
None
None

(2) Number of Investment Units Issued and Treasury Investment Units① Number of investment units issued (including treasury investment units)
As of August 31, 2016:
3,722,010 units
As of February 29, 2016:
3,722,010 units② Number of treasury investment units
As of August 31, 2016:– units
As of February 29, 2016:– units(Note) For the number of investment units used as the basis for calculation of net income per unit, please refer to“Notes on Per Unit Information” on page 36.
* Status of audit procedure implementation
At the time of the disclosure of this document, audit procedures for financial statements pursuant to the
Financial Instruments and Exchange Act (Act No. 25 of 1948) have not been completed.
* Forward-looking statements
The earnings forecasts and other forward-looking statements contained in this document are based on
information currently available to and certain assumptions deemed reasonable by NMF. Accordingly, actual
earnings performance and other results may differ materially due to a variety of factors. Furthermore, suchforward-looking statements do not constitute a guarantee of future distributions. For more information about
the assumptions underlying forward-looking statements and the use of such statements, please refer to“Assumptions Underlying Earnings Forecasts for the 3rd Fiscal Period (Ending February 28, 2017)” on page
8.

This is an English language translation of the original Japanese announcement of the financial statements(“Kessan Tanshin”). This translation is provided for information purpose only. Should there be any discrepancy
between this translation and the Japanese original, the Japanese original shall prevail.

- 2 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Attachment
1. Related Corporations of the Investment Corporation
Disclosure is omitted because there are no significant changes from the information presented under“Structure of the Investment Corporation” in the most recently published securities report (published May 25,2016).
2. Management Policy and Management Status(1) Management Policy
Disclosure is omitted, since there are no significant changes from the “Investment Policy,” “Investment
Targets” and “Distribution Policy” presented in the securities report (filed on May 25, 2016).
(2) Management Status① Outline of Fiscal Period under Review
NMF was established on October 1, 2015 through the consolidation type merger of the former Nomura
Real Estate Master Fund, Inc. (hereinafter the “former NMF”), Nomura Real Estate Office Fund, Inc.
(hereinafter “NOF”) and Nomura Real Estate Residential Fund, Inc. (hereinafter “NRF”), and listed its
investment securities (TSE code: 3462) on the Real Estate Investment Trust Section of the Tokyo Stock
Exchange on October 2 of the same year.
NMF’s basic policy is to manage its assets mainly as investments in real estate, etc. (meaning the assets
specified in the Ordinance for Enforcement of the Act on Investment Trusts and Investment
Corporations (Act No. 198 of 1951)), specifically real estate, leaseholds of real estate, surface rights, andthe beneficial interests of trusts formed by entrustment of only these assets, to secure stable income overthe medium to long term and steady growth of assets under management (Note 1). In order to realize thisbasic policy, NMF adopts an investment strategy that centers on the Greater Tokyo area (Tokyo, Kanagawa,Chiba and Saitama prefectures), which offers strong tenant demand, while also considering regional
diversification through investment in all of Japan’s three major metropolitan areas and other major cities.
By combining the “diversified type strategy,” in which investments are made in a variety of facilities, suchas offices, retail facilities, logistics facilities and residential facilities, with the “large-scale REIT strategy,”which increases portfolio stability through property and tenant diversification, as well as the “leasing value
chain” with the sponsor, the Nomura Real Estate Group, NMF aims to increase unitholder value by
securing stable income over the medium to long term and the steady growth of assets under management.
In November 2015, NMF formulated and announced its medium- to long-term management strategy.
The medium- to long-term management strategy separates the 10 years following NMF’s establishment
into three phases (the quality phase, growth phase and master phase) and aims for stable management overthe medium to long term through steady growth in asset size and the establishment of the fund’s brand. In
the initial quality phase, NMF will utilize the benefits of being one of Japan’s largest diversified REITs topromote internal growth centered on strategic property replacements (SPRs) and upside sectors (Note 2),aiming to improve the portfolio’s quality and increase the asset size.
(Note 1) Throughout this document, “assets under management” refers to assets that belong to NMF.
Furthermore, “Real estate, etc.” refers to assets defined in Article 29, Paragraph 1 (1) or (2) of NMF’s Articles of Incorporation, and “realestate backed securities” refers to assets defined in Article 29, Paragraph 1 (3) of NMF’s Articles of Incorporation (“Real estate, etc.” and“real estate backed securities” are hereinafter collectively referred to as “real estate related assets”).
Real estate and the underlying real estate of real estate related assets are together referred to as the “real estate under management” or“properties.”(Note 2) Upside sectors refer to sectors for which an increase of rental revenue can be expected, particularly offices as well as retail facilities instation areas.

② Investment Environment
The Japanese economy has continued to gradually recover, despite lackluster economic activity bycompanies and households amid an environment that includes slowing growth in the global economy.
Going forward, the negative factors could conceivably gather force, but there are also signs of economic
improvement as a result of various governmental measures, including additional monetary easing.
Both domestic and foreign investment capital is flowing into the J-REIT market on expectations ofrecovery in the Japanese economy and real estate market. Backed by this favorable financing environment,
property acquisitions remain brisk, spurred on by both new J-REIT listings and additional public offerings
by existing J-REITs.
- 3 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

With regard to the office leasing market, while the vacancy rate is stable and low, the rate at which rents
are rising remains slow. Going forward, the supply of new properties is expected to remain low for thetime being, and demand from companies seeking increased floor space is forecast to maintain the current
market balance. However, slowing corporate revenue growth and the resulting impact on capital
investment due to such factors as the deceleration of overseas economies and the strong yen remain
factors that could have a negative impact.
Concerning the environment surrounding retail facilities, individual consumption is weak, reflecting
thriftiness among households. Demand related to daily necessities, such as groceries and dining, is firm,
supported by improvement in hiring as a result of labor shortages, but shifting consumer attitudes require
careful attention. Rental demand for retail facilities in major urban areas is firm overall, thanks to solid
demand for new retail outlets caused by continued population inflows to such areas. Demand generated byvisitors to Japan from overseas is also expected to remain stable, as the number of tourists coming toJapan increases on the back of economic recovery and the rise of a growing middle class in emerging
Asian countries over the medium and long term.
In terms of logistics facilities, the supply-demand balance remains tight, reflecting the impact of online
shopping and the apparel industry, which are driving demand, as well as the accompanying demand forthird-party logistics (Note) and additional demand arising in recent years from growing logistics
sophistication in the food wholesaling industry. New supply of large-scale facilities is expected from 2017,
which may temporarily push up the vacancy rate. However, demand for highly functional logistics facilities,
arising from the introduction of corporate logistics strategies, remains strong. As such, the supply-demandbalance is expected to recover even if the market does experience a temporary surplus of supply.
Concerning the environment surrounding the rental apartment market, both the existing stock and new
supply of high-quality rental condominiums in good locations are low, while the population inflow tomajor urban areas continues to be strong. At the same time, land prices in major urban areas are expected
to continue rising, as are construction costs, and competition with for-sale condominiums and othersectors to acquire lots is intensifying. As such, a limited supply of rental apartments is expected. Reflecting
this, the occupancy rate of rental condominiums owned by J-REITs remains high overall. Newly
advertised rents are forecast to follow a gentle upward trajectory for the time being, backed by tight supply,
strong demand and improving incomes.
In the real estate transaction market, investor appetite remains strong and competition to acquire
properties is hot, but transaction volume is decreasing slightly. While the supply/demand balance is
expected to remain largely unchanged for some time under the accommodative financial environment, if
uncertainty in domestic and foreign financial markets arises or risk avoidance grows more pronounced,
changes in the funding environment could lead to diminished appetite for investment. As such, thesetrends must be watched closely.
(Note) Third-party logistics (3PL) refers to logistics services outsourced by shippers for part or all of their logistics functions.

③ Management Performance
Under the circumstances described above in “② Investment Environment,” as part of its medium- tolong-term management strategy, NMF steadily implemented SPRs aimed at growing its asset size andenhancing portfolio quality. Details are as follows.
 Acquired three office properties (PMO Tamachi, PMO Ginza Hatchome and PMO Shibakoen.
Total acquisition price: ¥14,080 million. All three were acquired on March 1, 2016).
 As its first round of SPRs (announced March 29, 2016), NMF acquired three properties, comprising
one logistics property and two residential properties (Hirakata Kuzuha Logistics Center, PRIMEURBAN Meguro Mita and PRIME URBAN Chikusa. Total acquisition price: ¥5,628 million.
Acquired on April 27, 2016, April 25, 2016, and April 5, 2016, respectively). In addition, NMF soldeight properties, comprising three office properties and five residential properties (Total sale price:¥5,350 million. All eight were sold on April 12, 2016).
 As its second round of SPRs (announced May 9, 2016), NMF acquired a logistics property(Landport Kashiwa Shonan II. Acquisition price: ¥10,800 million. Acquired on September 1, 2016)
and sold three office properties (Total sale price: ¥18,150 million. All three were sold on May 17,2016). All of these transactions were to or from the sponsor, Nomura Real Estate Development Co.,Ltd.
 As its third round of SPRs (announced May 9, 2016), NMF acquired one “other” sector property- 4 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

(Ryotokuji University Shin-Urayasu Campus (Land). Acquisition price: ¥4,900 million. Acquired on
May 26, 2016) and sold six properties comprising three office properties and three residential
properties (Total sale price: ¥10,633 million. All six were sold on May 17, 2016).
As a result, at the end of the fiscal period under review, (excluding Landport Kashiwa Shonan II, which
was acquired after the end of the fiscal period) the number of properties held by NMF was 252 (totalacquisition price of ¥784,607 million), the ratio of investment in the Greater Tokyo area was 79.7%, thegross leasable area of the portfolio was 1,654,5701.95 m2, and the portfolio remained highly diversified.
In terms of property and facility management, as described above in “② Investment Environment,”
rental demand is expanding, backed by the gradual recovery of the Japanese economy. Accordingly, theoccupancy rate of the entire portfolio as of the end of the fiscal period under review was stable and high,at 99.1%. In the office sector, a key upside sector, the rental market has seen particularly notable recovery,
with rises in newly advertised rents and successful rent increases upon contract renewal driving the internal
growth of the portfolio as a whole.
④ Merger with TOP REIT, Inc.
On May 26, 2016, NMF and TOP REIT, Inc. (“TOP”) resolved, at their respective Board of Directors’
meetings, to enter an absorption type merger (the “absorption type merger”) with NMF as the surviving
corporation and TOP as the absorbed corporation, effective September 1, 2016. On the same day, NMF
and TOP entered a merger agreement (the “absorption type merger agreement,” including the amendment
agreement executed on June 23, 2016).
The absorption type merger agreement was approved at TOP’s General Meeting of Unitholders on July28, 2016. The absorption type merger came into effect on September 1, 2016, after the end of the fiscal
period under review, and the 19 properties owned by TOP were transferred to NMF.
(a) Objective of the Absorption type Merger
NMF believes that the absorption type merger presented a rare opportunity for external growth in theheated real estate acquisition market. Furthermore, the absorption type merger increased NMF’s ratio ofinvestment in properties for which future internal growth can be expected, specifically properties that are
in upside sectors or located within Tokyo's five central wards. Through the absorption type merger, NMF
sought to increase the portfolio’s diversity, thereby raising risk tolerance, and expected that the increase in
the market capitalization of its investment units accompanying the issue of investment units would further
enhance their liquidity. As a result of these and other effects, NMF expected the absorption type merger tocontribute to unitholder value.
(b) Ratio of Allotment Under the Absorption type Merger
Through the absorption type merger, 2.62 investment units of NMF were allotted per unit of TOP. This
allotment generated fractions of less than one unit for the unitholders of TOP. These fractional units weresold through a market transaction in accordance with statutory provisions, and the proceeds from the sale
were delivered to unitholders in proportion to the size of their fractional holdings.
(c) Merger Distribution
Instead of the cash distributions to the unitholders of TOP for TOP’s final fiscal period (May 1 to August
31, 2016), NMF will make a cash distribution to the unitholders recorded on the final unitholders register
for TOP as of the day immediately prior to the effective date of the absorption type merger (excluding theunitholders of TOP who have requested the purchase of their investment units pursuant to the provisionsof Article 149-3 of the Investment Trust Act) (the “Allotted Unitholders”), in an amount equivalent to the
cash distributions for TOP’s final fiscal period (the payment will be the amount of distributable profit of
TOP as of August 31, 2016, divided by the number of investment units that is obtained by deducting (a)the number of investment units held by the unitholders other than the Allotted Unitholders from (b) the
number of TOP investment units issued and outstanding as of August 31, 2016, with the per-unit amounttruncated at the nearest whole yen).
⑤ Status of Fund Procurement
During the fiscal period under review, NMF took out loans of ¥14,700 million and ¥10,800 million on- 5 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

March 1, 2016 and August 31, 2016, respectively, to partially cover capital requirements for the acquisitionof specified assets and related expenses. Furthermore, using cash on hand generated by the sale of assets,
NMF repaid a total of ¥18,800 million in existing loans. NMF also refinanced ¥22,330 million in existingloans.
To secure a stable financial base, in addition to its existing one-year commitment line agreements, NMF
established a new, three-year commitment line.
As a result, the balance of interest-bearing liabilities at the end of the fiscal period under review was¥409,771 million, and the ratio of interest-bearing liabilities to total assets (LTV) was 43.8%.
NMF’s ratings at the end of the fiscal period under review are shown below. These ratings do not
represent judgments on NMF investment units. Concerning NMF investment units, there are no credit
ratings that credit rating agencies have provided or made available for inspection, nor are there credit ratings
that credit rating agencies are scheduled to provide or make available for inspection at the request of NMF
Credit rating agency

Rating description

Note

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating:AA

Rating outlook:

StableRating and Investment Information, Inc.
(R&I)

Issuer rating:A+

Rating outlook:

StableA

Rating outlook:

StableLong-term corporate credit
Standard & Poor's Financial Services LLC, rating:(S&P)
Short-term corporate credit
rating:

A-1⑥Business Performance and Distributions
In the 2nd fiscal period, operating revenues totaled ¥30,976 million, operating profit reached ¥11,682
million, ordinary income totaled ¥9,356 million, and net income came to ¥9,355 million.
The per-unit distribution for the 2nd period was ¥3,036.
In order to maximize the distribution of earnings included in deductible expenses by applying special
measures for tax treatment (Article 67-15 Paragraph 1 of the Act on Special Measures Concerning Taxation(Act No. 26 of 1957)), NMF decided to distribute almost the entire amount of income as stipulated in
Article 136 Paragraph 1 of the Investment Trust Act less reversal of allowance for temporary difference
adjustments, excluding the portion for which per-unit distributions would be less than ¥1. Accordingly,
NMF declared an earnings distribution per investment unit of ¥2,473. This amount excludes the
distribution in excess of earnings discussed below.
In accordance with the distribution policy stipulated in the Articles of Incorporation and inconsideration of the impact that such costs related to the merger as goodwill amortization costs, net assets
deductions (as described in Article 2 Paragraph 2 (30) (b) of the Regulations Concerning Accounting ofInvestment Corporations (Cabinet Office Ordinance No. 47 of 2006, including subsequent amendments))
and reversal of allowance for temporary difference adjustments (excluding net asset deductions; hereinafterreferred to together with goodwill amortization costs and other costs related to the merger as“merger-related costs”) will have on distributions, NMF will make a distribution in excess of earnings in an
amount that it determines equivalent to the merger-related costs (hereinafter “distribution in excess ofearnings”). When implementing a distribution in excess of earnings, if the period’s allowance for temporary
difference adjustments (as stipulated in Article 2 Paragraph 2 (30) (b) of the Calculation Rules for
Investment Corporations) is less than the amount of merger-related costs, other distributions in excess of
net earnings will also be implemented.
For the fiscal period under review, NMF decided to implement ¥2,095 million in distributions in excessof earnings. This figure is equivalent to the sum of ¥1,946 million in goodwill amortization expenses and¥150 million in reversal of allowance for temporary difference adjustments (excluding net asset deductions).
All of this will be implemented as ¥2,095 million of other distributions in excess of net earnings. Other
distributions in excess of net earnings per unit will be ¥563.

- 6 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

⑦ Outlook for Next Fiscal Period
Three major consequences resulted from the absorption type merger. Firstly, NMF’s asset size reached over
¥9,30 billion, further securing NMF’s standing as one of the largest diversified REITs in Japan. Secondly,
NMF’s revenue stability increased, due to reinforcement of the portfolio’s quality and a rise in risk tolerance.
Thirdly, NMF expects that it will be able to pursue both internal and external growth by leveraging the
Nomura Real Estate Group’s development capabilities, wide-ranging know-how and brand.
Following the absorption type merger, NMF continues to implement its medium- to long-term
management strategy, promoting SPRs to enhance portfolio quality and seek internal growth, mainly in
upside sectors, aiming to increase unitholder value by securing stable income over the medium to long termand steady growth of assets under management.
⑧ Significant Subsequent Events
As described above in “④ Merger with TOP REIT, Inc.,” NMF merged with TOP effective September 1,
2016.
(Reference)
A. NMF acquired the following assets on September 1, 2016.
Property nameLandport Kashiwa Shonan II

Type of asset

Real estate

Location (Note 1)(Registry)
1043-1-49 Aza Niiyama Waka-shiraga, Kashiwa City, Chiba(Street)1040-1 Waka-shiraga, Kashiwa City, Chiba

Structure (Note 1)

S/SRC, 3F

Land area (Note 1)

49,164.98 m2

Floor area (Note 1)

51,485.62 m2

Type of ownership(Land) Usufruct (Note 3)(Building) Ownership

Completion date
(Note 1)

April 13, 2016

Acquisition price(Note 2)

¥10,800 million

Date of agreement

May 17, 2016
(Date of agreement on purchase and sale of real estate)

Date of acquisition

September 1, 2016 (date of delivery of real estate)

Seller

Nomura Real Estate Development Co., Ltd.

Financing

Financed with borrowings(Note 1) The land of this property comprises provisionally allocated land and reserved land located within the area of the Land
Readjustment Project of the Shonan Center land plot, which was executed as a Kashiwa City Planning Project with
Kashiwa City Shonan Center Land Plot Readjustment Association as the project executor. “Location (Registry)” and“Land area” given above are those for the property before provisional allocation. The land area for this property (thesum of the provisionally allocated land and reserved land) given on the provisionally allocated land designation noticeand reserved land register is 36,415m2. The street address (“Location (Street)”) has yet to be confirmed. “Structure,”“Floor Area” and “Completion date” are based on the information in the real estate registry.
(Note 2) “Acquisition price” is that given on the real estate sale contract and does not include the various other expenses
related to the acquisition of the property, such as transaction brokerage fee, taxes and public dues, etc.
(Note 3) The rights acquired by NMF are (i) the usufruct of the provisionally allocated land based on the applicableprovisionally allocated land designation and (ii) the usufruct of the reserve land based on the purchase and saleagreement concerning the reserve land. The ownership of the provisionally allocated land will be acquired by NMF
on the day following the public notice date of allocation of replotted land. With respect to the ownership of thereserved land, on the same day, after the project executor acquires such ownership, NMF will acquire the ownershipfrom the project executor. As of the preparation of this document, the allocation of replotted land is scheduled totake place in September 2017.

- 7 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Assumptions Underlying Earnings Forecasts for the 3rd Fiscal Period (Ending February 28, 2017)
Item
Calculation period

Assumptions
・3rd fiscal period: September 1, 2016 to February 28, 2017

・With respect to 272 properties held by NMF as of this document’s publication, it isassumed that there will be no changes in assets under management (new property
Assets Under Management
acquisitions or sales of portfolio properties) through February 28, 2017.
・The forecasts may be revised due to actual changes in the portfolio or other reasons.

Operating revenues

・Rental revenues are estimated based on tenant trends, competitive properties located inadjacent areas and real estate market conditions, among other factors, with theassumption that there exist no arrears or cases of nonpayment with regard to theproperties.

・Real estate rental expenses are expected to be ¥16,142 million.
・It is estimated that a tax amount of ¥3,016 million will be recorded as real estate rental
expenses.
・Property management costs of ¥3,240 million are estimated to be recorded as real estate
rental expenses.
・Expenses for repairs and maintenance required for the fiscal period are calculated as realestate rental expenses, based on the mid-to-long term repair plans that NMF’s AssetManagement Company has established. However, the actual expenses for repairs andOperating expenses
maintenance for the fiscal period may differ significantly from estimates due to expenses(excluding amortization
for urgent repairs of damages to a building caused by events difficult to foresee,
expenses for goodwill)
significant year-on-year fluctuations in costs or non-periodic repair expenses.
・Depreciation of ¥4,797 million is estimated to be recorded as real estate rental expenses.
However, the book values of the properties that were succeeded to NMF from TOP asof the effective date of the absorption type merger are not yet finalized and may berevised.
・Merger expenses are estimated to be ¥1,374 million.
・Other operating expenses (including asset management fees, asset custody fees andgeneral administration fees) are estimated at ¥3,489 million.
・Goodwill accrued upon the absorption type merger will be accounted for as an asset andamortized using the straight-line method over 20 years on a regular basis pursuant to theBusiness Combination Accounting Standards. Currently, the amount of goodwill
accrued upon the absorption type merger is provisionally estimated to be ¥27,259
million. This amount is calculated on the assumption NMF will succeed the assets(¥148,573 million in total) and liabilities (¥97,119 million in total) of TOP, the acquiree
under said accounting standards, and the acquisition cost of the merger will be ¥78,713
million (calculated based on the closing price (¥170,700) of the investment units of
NMF, the acquirer under said accounting standards, on August 31, 2016, which will beallotted as the consideration for the acquisition). However, the amount of goodwill is
Amortization expenses
not yet finalized and is subject to change.
for goodwill
・The amount of amortization of goodwill is estimated to be ¥2,628 million, which is
calculated by adding (i) amortization expenses (¥1,946 million) for the goodwill held by
NMF (¥74,305 million) as of the end of the 2nd fiscal period, and (ii) amortization
expenses (¥681 million) for the goodwill accrued upon the absorption type merger(¥27,259 million).
・Amortization of goodwill is an item that causes a difference between accounting and tax
treatment and may result in the imposition of corporation tax or other tax. NMF
intends to make distributions in excess of net income for the purpose of tax relief
during the goodwill amortization period, and it is expected that NMF will be able to
avoid such taxation.
- 8 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Item

Assumptions

・Interest expenses and other borrowing-related expenses are estimated to be ¥2,727
million.
・As of today, the outstanding interest-bearing liabilities of NMF are ¥499,889 million,
consisting of ¥467,389 million in outstanding borrowings and ¥32,500 million in
investment corporation bonds (including short-term investment corporation bonds).
・Of the portions of the borrowings (¥49,012 million) that will come due by February 28,
2017 (the end of the 3rd fiscal period), it is assumed that NMF will repay ¥42 million byusing cash on hand and refinance the entire remaining amount through borrowings.
Interest-bearing liabilities
While a total of ¥5,000 million in investment corporation bonds will reach maturity inthe 3rd fiscal period, it is assumed NMF will redeem such bonds through funds raised byborrowings or other funding methods.
・It is assumed that, through February 28, 2017 (the end of the 3rd fiscal period), there will
be no changes in the amount of the outstanding interest-bearing liabilities, other thanthose stated above.
・NMF assumes that there will be no changes in the number of investment units issued
and outstanding as of the date of the publication of this document, 4,183,130 units,
Investment units
and there will be no additional issuance of new investment units through February 28,
2017 (the end of the 3rd fiscal period).
・The distribution per unit is calculated according to the distribution policy outlined in
NMF’s Articles of Incorporation.
・Of the allowance for temporary difference adjustments accrued up to the present, theamount eliminated in the 3rd fiscal period will be reversed from retained earnings at endof period.
・NMF assumes that there will be no change in the 3rd fiscal period to the ¥2,254 million
in deferred losses on hedges of interest rate swaps recorded under valuation andDistribution per unittranslation adjustments continuing from the 2nd fiscal period (ended August 31, 2016).
In additions, the deferred losses on hedges of interest rate swaps succeeded from TOP
upon the absorption type merger are expected to amount to ¥282 million. The per-unit
distribution (excluding the distribution in excess of net income per unit) is calculated bysubtracting these amounts from the distributable amount.
・The per-unit distribution may vary due to various factors, including changes in theinvestment portfolio, changes in rent income caused by tenant replacements, andunforeseen repairs.
・The amount of distribution in excess of net income is estimated on the assumption NMF
will distribute the amount of valuation and translation adjustments deducted from thetotal of the difference between accounting and tax treatment and the distributableamount as allowance for temporary difference adjustments for the purpose of tax relief.
The estimate is based on the assumption that, in order to alleviate the impact on
distributions of the amortization of goodwill and other merger related expenses (the“Merger Expenses”) and the reversal of allowance for temporary difference adjustments,
if the total amount of the difference between accounting and tax treatment for the
relevant fiscal period is less than the total amount of the Merger Expenses and theDistribution per unit inreversal of allowance for temporary difference adjustments, NMF will make otherexcess of earnings per
distributions in excess of net income in an amount not exceeding this difference andunit
within the limit prescribed by the regulations of the Investment Trusts Association,
Japan (the “Investment Trusts Association Japan Regulations”) (the amount equivalent
to 60/100 of the total amount of accumulated depreciation recorded as of the end of
the relevant fiscal period less the total amount of accumulated depreciation recorded asof the end of the immediately preceding fiscal period).
・In the current forecast, the distribution in excess of net income per unit for the 3rd fiscal
period is expected to be ¥1,025, of which the distribution of the allowance fortemporary difference adjustments is expected to be ¥653 and other distributions inexcess of net income is expected to be ¥372.
Non-operating expenses- 9 -Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Item

Assumptions

Other

・It is assumed that there will be no amendments in legislation, taxation, accounting
principles, listing requirements, the regulations of the Investment Trusts Association,
Japan or other laws or regulations that would affect the above forecasts.
・It is assumed that there will be no unexpected material changes in general economic
conditions and real estate markets.

- 10 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

3. Financial Statements(1) Balance Sheet
Thousands of Yen
As of February 29, 2016

As of August 31, 2016

Cash and bank deposits

47,139,232

63,889,766

Cash and bank deposits in trust

11,185,928

11,380,801

Rental receivables

436,676592,581

Prepaid expenses

429,670567,04334

1,423

585,749

613,024(54)
59,777,237(54)
77,044,586

102,158,810

106,067,919(1,515,696)
100,643,113)(3,082,914)
102,985,005)

AssetsCurrent assets

Income taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property and equipment
Buildings
Less accumulated depreciation
Buildings, net
Structures

260,082

291,094

Less accumulated depreciation(30,027)(61,840)

Structures, net

230,055

229,254501,736

569,897

Less accumulated depreciation(48,242)(109,415)

Machinery, net

453,494

460,482

21,88582,495Less accumulated depreciation(765)(5,002)Equipment, net

21,11977,493

Land

171,862,734

185,217,460

Buildings in trust

164,543,080

163,521,989

Less accumulated depreciation(8,909,348)(11,209,810)

Buildings in trust, net

155,633,731

152,312,178

887,200

927,631

Less accumulated depreciation(416,550)(489,080)

Structures in trust, net

470,649

438,551

67,591

128,437(2,381)(7,149)Machinery

Equipment

Structures in trust

Machinery in trust
Less accumulated depreciation

65,209121,287

Tools, furniture and fixtures in trust

Machinery in trust, net

203,098

297,186

Less accumulated depreciation(15,801)(38,082)

Tools, furniture and fixtures in trust, net

187,296259,103

Land in trust

351,799,272

331,066,945

Leased assets

24,49424,494

Less accumulated depreciation(3,349)(7,367)

Leased assets, net

21,145

17,127

Construction in progress

436,020

838,601

781,823,844

774,023,490

Total property and equipment- 11 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Thousands of Yen
As of February 29, 2016

As of August 31, 201676,252,702

74,305,825

Intangible assets
Goodwill
Leasehold rights

951,943

951,943

Leasehold rights in trust

7,541,282

7,540,896

25,39932,724

84,771,328

82,831,390

Investment securities

91,430－Long-term prepaid expenses

742,792

1,005,941

Long-term deposits

89,38589,385

Security deposits

977,583

946,803

1,901,193
868,496,366

2,042,131
858,897,012

23,782

22,41023,782

22,410928,297,387

935,964,009

Other
Total intangible assets
Investments and other assets

Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets- 12 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

As of February 29, 2016
Liabilities
Current liabilities
Trade accounts payable
Short-term debt
Current portion of investment corporation
bonds
Current portion of long-term debt
Lease obligations in trust
Other accounts payable
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Rent received in advance
Unearned revenue
Derivatives liabilities
Other current liabilities
Total current liabilities
Long-term liabilities
Investment corporation bonds
Long-term debt
Lease obligations in trust
Long-term advances received
Security deposits from tenants
Security deposits from tenants in trust
Derivatives liabilities
Total long-term liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
SurplusCapital surplus
Allowance for temporary difference
adjustments
Other deductions from capital surplus*12,162,600
9,100,000
5,000,000*1－
10,000,000

50,015,600
8,651
1,888,592
325,813994
140,701
4,394,283
369,865
37,854
298,547
73,743,504

47,805,600
8,651
2,226,124
330,953605
530,465
4,320,065
341,706
73,217
292,886
68,492,744

27,500,000
311,549,000
14,046
838,163
8,403,287
25,818,152
2,829,740
376,952,390
450,695,894

22,500,000
329,466,200
9,721
671,420
8,558,771
24,772,441
2,181,236
388,159,791
456,652,535

161,120,405

161,120,405

315,299,775

315,299,775(6,137,594)*3

Total deduction from capital surplus
Capital surplus, net
Retained earnings
Total surplus
Total unitholders' equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Valuation and translation adjustments
Total net assets
Total liabilities and net assets*2- 13 -

Thousands of Yen
As of August 31, 2016－

2,562,467*3－(941,668)－
315,299,775
4,048,907
319,348,682
480,469,087(7,079,263)
308,220,511
12,225,011
320,445,523
481,565,928(2,867,594)(2,867,594)
477,601,492
928,297,387(2,254,454)(2,254,454)
479,311,473
935,964,009*2

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(2) Statement of Income and Retained Earnings
Previous period
from Oct. 1, 2015
to Feb. 29, 2016

Operating revenues
Rental revenues
Other rental revenues
Gain on investments in silent partnership
Gain on sales of real estate
Total operating revenues
Operating expenses
Real estate rental expenses
Loss on sales of real estate
Impairment loss
Asset management fees
Asset custody fees
Administrative service fees
Directors' compensation
Merger expenses
Amortization of goodwill
Other operating expenses
Total operating expenses
Operating profit
Non-operating revenues
Interest income
Reversal of dividends payable
Interest on refund
Other non-operating revenues
Total non-operating revenues
Non-operating expenses
Interest expenses

*1
*1

*1
*2

Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
Loan arrangement fees
Other offering costs associated with the issuance ofinvestment units
Other non-operating expenses
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes—current
Income taxes—deferred
Total income taxes
Net income
Retained earnings brought forward
Transfer of unappropriated retained earnings by merger
Retained earnings at end of period- 14 -*3

Thousands of Yen
Current period
from Mar. 1, 2016
to Aug. 31, 2016

22,286,435
2,026,176
1,066－
24,313,678*1*1

11,546,708－
79,0191,505,234
21,349185,995
6,000
2,590,275
1,622,397
273,520
17,830,501
6,483,176

*1

*4

*5

26,844,872
2,687,507
1,899
1,442,275
30,976,554
13,489,928
329,201－
2,565,116
48,379147,697
7,200
375,501
1,946,877
383,983
19,293,886
11,682,668

6,064
3,906
16
97
10,085309
4,081

1,408,454
294,325

1,714,122
284,082

1,143

1,372

297,926

324,255

436,525－4,550
2,442,925
4,050,336
4,050,336
2,018
39
2,058
4,048,278－
629
4,048,907

6,680
2,330,513
9,356,586
9,356,586
605－
605
9,355,981
2,869,030－
12,225,011

－
40
4,431

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(3) Statement of Changes in Net Assets
Previous period (from October 1, 2015 to February 29, 2016)

Unitholders'
capitalBalance at the beginning of
the period
Changes of items during theperiodThousands of Yen

Unitholders' equity
SurplusRetained
Capital surplus
earnings

Total surplus

Totalunitholders'equity

－

－

－

－

－

161,120,405

315,299,775

913,191

316,212,966

477,333,371

Distributions of retained
earnings－－(912,562)(912,562)(912,562)

Net income－－

4,048,278

4,048,278

4,048,278

－

－

－

－

－

161,120,405

315,299,775

4,048,907

319,348,682

480,469,087(*1)161,120,405

315,299,775

4,048,907

319,348,682

480,469,087

Increase by merger

Net changes of items
other than unitholders’equityTotal changes of items
during the period
Balance at the end of theperiodValuation and translation
adjustments

Total net
assetsDeferred gains
or losses onhedgesValuation andtranslation
adjustments

－

－

－

Increase by merger－－

477,333,371

Distributions of retained
earnings－－(912,562)

Net income－－

4,048,278(2,867,594)(2,867,594)(2,867,594)(2,867,594)(2,867,594)

477,601,492(2,867,594)(2,867,594)

477,601,492

Balance at the beginning of
the period
Changes of items during theperiodNet changes of items
other than unitholders’equityTotal changes of items
during the period
Balance at the end of theperiod- 15 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Current period (from March 1, 2016 to August 31, 2016)

Unitholders'
capitalBalance at the beginning of
the period
Changes of items during
the period
Distributions of retained
earnings
Distributions in excess
of net earnings fromallowance for temporary
difference adjustments
Other distributions inexcess of net earnings

Capitalsurplus161,120,405

315,299,775

－

－

－

315,299,775

－

－

－

－

－

－

－

－

(6,137,594)－(6,137,594)(6,137,594)

－

－

－

(941,668)(941,668)(941,668)

－

－

－

－

－

－

－

－

－

－

－

－

－

－

(6,137,594)(941,668)(7,079,263)(7,079,263)(*1)161,120,405

315,299,775(6,137,594)(941,668)(7,079,263)

308,220,511

Net income
Net changes of items
other than unitholders’equityTotal changes of items
during the period
Balance at the end of theperiodThousands of Yen
Unitholders' equity
SurplusCapital surplus
Total deduction from capital surplus
Allowance
Deduction
Total
Net capitalforfrom otherdeduction
surplustemporary
capitalfrom capitaldifference
surplussurplusadjustment

Valuation and translation
adjustments

Unitholders' equity
SurplusRetainedearnings
Balance at the beginning of
the period
Changes of items during
the period
Distributionsofretained earnings
Distributions in excess
of net earnings fromallowance for temporary
difference adjustments
Other distributions inexcess of net earnings
Net income
Net changes of items
other than unitholders’equityTotal changes of items
during the period
Balance at the end of theperiodTotal surplus

Totalunitholders'equityDeferred
gains orlosses onhedgesValuationandtranslation
adjustments

Total net
assets

4,048,907

319,348,682

480,469,087(2,867,594)(2,867,594)

477,601,492(1,179,877)(1,179,877)(1,179,877)－－(1,179,877)－(6,137,594)(6,137,594)－－(6,137,594)－(941,668)(941,668)－－(941,668)

9,355,981

9,355,981

9,355,981－－

9,355,981－－－

613,140

613,140

613,140

8,176,103

1,096,840

1,096,840

613,140

613,140

1,709,981

12,225,011

320,445,523

481,565,928(2,254,454)(2,254,454)

479,311,473- 16 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(4) Statement of Cash Distributions
Yen

I.

Retained earnings at end of period

II. Distributions in excess of retained
earnings
Of which, allowance fortemporary difference adjustments
Of which, other distributions inexcess of net earnings

Previous period
from Oct. 1, 2015
to Feb. 29, 2016
4,048,907,447
7,079,263,020
6,137,594,490
941,668,530

III. Incorporation into unitholders' capital－

Of which, reversal of allowancefor
temporarydifference
adjustments

Current period
from Mar. 1, 2015
to Aug. 31, 2016
12,225,011,401
2,095,491,630－
2,095,491,630
763,347,909
763,347,909－

IV. Distributions[Distributions per unit]
Of which, distributions of earnings[Of which, distributions ofearnings per unit]
Of which, allowance temporary
difference adjustments[Of which, distributions in excess
of retained earnings per unit [ofallowance for temporary difference
adjustments] ]Of which, other distributions inexcess of net earnings[Of which, distributions in excess
of retained earnings per unit [ofother distributions in excess of net
earnings] ]8,259,140,190(2,219)1,179,877,170

V. Retained earnings carried forward(317)

11,300,022,360(3,036)
9,204,530,730(2,473)

6,137,594,490－(1,649)－941,668,530

2,095,491,630

(253)

(563)

2,869,030,277

2,257,132,762- 17 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Calculation method for distributions

Concerning distributions for the 1st
fiscal period, NMF decided the
distribution per unit will be ¥2,219.
In order to maximize the distributionof earnings included in deductible
expenses by applying special measures
for tax treatment (Article 67-15
Paragraph 1 of the Act on Special
Measures Concerning Taxation (Act No.
26 of 1957, including subsequent
amendments)), NMF decided to
distribute almost the entire amount ofincome as stipulated in Article 136
Paragraph 1 of the Investment Trust Act,
excluding the portion for which per-unit
distributions would be less than ¥1.
Accordingly, NMF declared an earnings
distribution per investment unit of ¥317.
This amount excludes the distribution inexcess of earnings discussed below.
In accordance with the distribution
policy stipulated in the Articles ofIncorporation and in consideration of
the impact that such costs related to themerger as amortization costs of goodwill
and net assets deductions (as described in
Article 2 Paragraph 2 (30) (b) of theRegulations Concerning Accounting ofInvestment Corporations (Cabinet Office
Ordinance No. 47 of 2006, including
subsequent amendments; hereinafter the“Calculation Rules for Investment
Corporations”) together with costs
related to the merger, such as goodwill
amortization
costs;
hereafter“merger-related costs”) will have on
distributions, NMF will make a
distribution in excess of earnings in an
amount that it determines equivalent to
the merger-related costs (hereinafter“distribution in excess of earnings”).
When implementing a distribution inexcess of earnings, if the period’s
allowance for temporary difference
adjustments (as stipulated in Article 2
Paragraph 2 (30) (b) of the Calculation
Rules for Investment Corporations) is
less than the amount of merger-related
costs, other distributions in excess of net
earnings will also be implemented.
For the fiscal period under review,
NMF decided to implement ¥7,079
million in distributions in excess ofearnings. This figure is equivalent to thesum of ¥1,622 million in goodwill
amortization expenses, ¥2,590 million infees paid to the Asset Management
Company for the merger and ¥2,867
million in deferred losses on hedges. Of
the distributions in excess of earnings,¥6,137 million was a distribution ofallowance for temporary difference
adjustments. The per-unit distribution ofallowance for adjustment of temporary
differences was ¥1,649. In addition,
NMF implemented other distributions inexcess of net earnings of ¥941 million.
The per-unit distribution of other
distributions in excess of net earnings
was ¥253.

- 18 -

Concerning distributions for the 1st fiscal
period, NMF decided the distribution perunit will be ¥3,036.
In order to maximize the distributionof earnings included in deductible
expenses by applying special measures
for tax treatment (Article 67-15
Paragraph 1 of the Act on Special
Measures Concerning Taxation (Act No.
26 of 1957)), NMF decided to distributealmost the entire amount of income as
stipulated in Article 136 Paragraph 1 ofthe Investment Trust Act less reversal of
allowance for temporary difference
adjustments, excluding the portion forwhich per-unit distributions would beless than ¥1. Accordingly, NMF declaredan earnings distribution per investment
unit of ¥2,473. This amount excludes the
distribution in excess of earnings
discussed below.
In accordance with the distribution
policy stipulated in the Articles ofIncorporation and in consideration of
the impact that such costs related to themerger as goodwill amortization costs,
net assets deductions (as described in
Article 2 Paragraph 2 (30) (b) of theRegulations Concerning Accounting ofInvestment Corporations) and reversal of
allowance for temporary difference
adjustments(excluding
net
asset
deductions; hereinafter referred to
together with goodwill amortization costs
and other costs related to the merger as“merger-related costs”) will have on
distributions, NMF will make a
distribution in excess of earnings in an
amount that it determines equivalent to
the merger-related costs (hereinafter“distribution in excess of earnings”).
When implementing a distribution inexcess of earnings, if the period’s
allowance for temporary difference
adjustments (as stipulated in Article 2
Paragraph 2 (30) (b) of the Calculation
Rules for Investment Corporations) is
less than the amount of merger-related
costs, other distributions in excess of net
earnings will also be implemented.
For the fiscal period under review,
NMF decided to implement ¥2,095
million in distributions in excess ofearnings. This figure is equivalent to thesum of ¥1,946 million in goodwill
amortization expenses and ¥150 million
in reversal of allowance for temporary
difference adjustments (excluding net
asset deductions). All of this will be
implemented as ¥2,095 million of other
distributions in excess of net earnings.
Other distributions in excess of net
earnings per unit will be ¥563.

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(5) Statement of Cash Flows
Previous period
from Oct. 1, 2015
to Feb. 29, 2016
Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Amortization of investment corporation bondissuance
costs
Interest income
Interest expenses
Loss on disposal of property and equipment
Increase (decrease) in allowance for doubtful
accounts
Decrease (increase) in rental receivables
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in long-term deposits
Increase (decrease) in trade accounts payable
Increase (decrease) in other accounts payable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accrued expenses
Increase (decrease) in rent received in advance
Decrease in property and equipment due to sales

4,050,336
3,472,856
79,0191,622,397
1,143(6,064)
1,702,780
6,881
54138,204(29,734)(218,802)(180)
606,536(8,392)(347,569)(524,025)
86,851

Decrease in property and equipment in trust due to
sales
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments for purchase of property and equipment
Payments for purchase of property and equipmentintrust for purchase of intangible assets
Payments
Payments for purchase of intangible assets in trust
Proceeds from withdrawal of investment securities
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Reimbursement of security deposits to tenants intrust
Proceeds from security deposits from tenants intrust
Payments for security deposits
Proceeds from security deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Repayment of investment corporation bonds
Distributions of earnings to unitholders- 19 -

Thousands of Yen
Current period
from Mar. 1, 2015
to Aug. 31, 2016
9,356,586
4,207,238－
1,946,877
1,372
(309)
1,998,205
5,165－(157,024)(137,372)(263,149)－
399,866
150,152
389,764
15,791(74,217)－

9,423,684－

23,127,269

159,517
10,791,813
6,064(2,077,288)
5,250
8,725,840(36,942)
50,352,959
309(2,187,967)(2,382)
48,162,919(4,482,327)(6,696,288)(4,640)(7,241)
8,754(993,243)
401,938(260,360)
542,395(10,000)75(11,500,938)(22,049,662)(6,723,627)(8,037)(7,026)
86,592(998,224)
1,113,158(1,584,236)
584,7165,000,000－
29,500,000(11,082,800)(15,000,000)(8,886,988)

6,000,000(15,100,000)
46,530,000(30,822,800)－(1,189,881)－
30,780(29,555,567)

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016－

Distributions in excess of net earnings fromallowance for temporary difference adjustments
Other distributions in excess of net earnings
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents from merger
Cash and cash equivalents at end of period－(469,788)(3,244,885)－
61,570,046(*1)58,325,160- 20 -(6,137,594)(941,668)(1,661,944)
16,945,408
58,325,160－(*1)75,270,568

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(6) Notes Concerning the Going Concern Assumption
Not applicable.

(7) Notes Concerning Significant Accounting Policies
1. Investment securities
2. Depreciation of
noncurrent assets

Non-marketable securities classified as other securities are carried at cost determined by themoving average method. For equity interests in silent partnerships, NMF records the net
amount of silent partnership income (loss) in proportion to its equity interests.
① Property and equipment (including trust assets)
The straight-line method is adopted.
The useful lives of major property and equipment are as follows:
Buildings
3–70 years
Structures
2–45 years
Machinery
2–10 years
Tools, furniture and fixtures
2–20 years② Intangible assets
The straight-line method is adopted.
Goodwill is amortized using straight-line method over 20 years.
③ Long-term prepaid expenses
The straight-line method is adopted.

3. Deferred investment
corporation bond issuancecosts
4. Allowance for doubtful
accounts
5. Revenue and expenses
recognition

6. Hedge accounting

Deferred investment corporation bond issuance costs are amortized by the straight-line
method over the respective terms of the bonds.
To be ready for possible losses arising from defaults on receivables, the uncollectable amountis estimated and recorded by investigating collectability based on historical loan loss ratios forgeneral receivables and on case-by-case examinations for doubtful receivables.
Accounting for fixed asset tax, etc.
Of the tax amount assessed and determined for fixed asset tax, city planning tax,
depreciable asset tax, etc. on real estate, etc. held by NMF, the method of charging theamount corresponding to the concerned fiscal period to expenses as real estate rental
expenses is adopted.
The amount equivalent to fixed asset tax, etc. for the fiscal year in which the acquisition
date falls paid to the seller as reimbursement upon acquisition of real estate or trust
beneficiary interests in real estate is included in the cost of acquisition of the concerned
real estate and not recorded as expenses. The amount equivalent to fixed asset tax, etc.
included in the cost of acquisition of real estate, etc. in the fiscal period under review is¥77,205 thousand.
① Method of hedge accounting
Deferred hedge accounting is adopted. For interest-rate swap transactions that meetthe requirements for special treatment, special treatment is adopted.
② Hedging instruments and hedged items
Hedging instruments
Interest-rate swap transactions
Hedged items
Interest on loans③ Hedging policy
NMF conducts derivative transactions for the purpose of hedging risks prescribed in
the Articles of Incorporation in accordance with the Basic Policy on Risk Management.
④ Method for assessing effectiveness of hedging
The effectiveness of hedging is assessed by the correlation between changes in the fairvalue of hedging instruments and hedged items.

7. Cash and cash equivalents
as stated in the Statementof Cash Flows

Cash and cash equivalents in the statement of cash flows consist of cash on hand and cash intrust; deposits and deposits in trust that can be withdrawn at any time; and short-term
investments with a maturity of three months or less from the date of acquisition that arereadily convertible to cash and bear only an insignificant risk of price fluctuation.

- 21 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(8) Notes to Financial Statements(Notes to Balance Sheet)*1. Commitment line agreement① NMF has concluded a commitment line agreement with three lending financial institutions as follows.
Thousands of Yen
Previous period
Current period(Feb. 29, 2016)(Aug. 31, 2016)
Committed line of credit
10,000,000
Balance of used line
5,000,000
Balance of unused line
5,000,000② NMF has concluded a commitment line agreement with five lending financial institutions as follows.
Thousands of Yen
Previous period
Current period(Feb. 29, 2016)(Aug. 31, 2016)
Committed line of credit
30,000,000
Balance of used line
Balance of unused line
30,000,000-③ NMF has concluded a commitment line agreement with two lending financial institutions as follows.

Committed line of credit
Balance of used line
Balance of unused line

Previous period(Feb. 29, 2016)-

Thousands of Yen
Current period(Aug. 31, 2016)
10,000,000
10,000,000④ NMF has concluded a commitment line agreement with five lending financial institutions as follows.

Committed line of credit
Balance of used line
Balance of unused line

Previous period(Feb. 29, 2016)-

Thousands of Yen
Current period(Aug. 31, 2016)
40,000,000
40,000,000*2. Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment
Corporations
Thousands of Yen
Previous period
Current period(Feb. 29, 2016)(Aug. 31, 2016)
50,00050,000- 22 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

*3. Allowance for temporary difference adjustments
Previous period (from October 1, 2015 to February 29, 2016)
Not applicable.
Current period (from March 1, 2016 to August 31, 2016)
1. Reasons, related assets and amounts
Thousands of Yen
Related assets,
etc.

ReasonInitialamountBalance atthe end of
previous
periodGoodwill

Amortization of
goodwill

1,622,397－

1,622,397－

1,622,397－

Merger expenses

2,638,862－

1,568,581－

1,568,581－

Impairment loss

79,019－79,019－79,019－Loss oninterest-rate
swaps
recognized at
the end of the
fiscal period

2,867,594－

2,867,594－

2,867,594－

7,207,875－

6,137,594－

6,137,594－(790,132)

－

－

－

－

－

(97,557)

－

－

－

－

－

(172,304)

－

－

－

－

－

(10,286)

－

－

－

－

－

Decrease –subtotal(1,070,280)

－

－

－

－

－

Total

6,137,594－

6,137,594－

6,137,594－

Land, buildings,
etc.
Land, buildings,
etc
Deferred gains
or losses onhedgesIncrease –subtotal
Buildings,
building
improvements,
etc.

Investment
corporation bondissuance costs

Unearnedrevenue, etc.

Depreciation
deficiency
equivalent
Investment
corporation
bonds issuancecost
amortization
deficiency
equivalent
Write-down ofloss on interest
rate swap
due to merger

Other

-

2. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.

(2) Merger expenses- 23 -

Allowance
set aside
duringperiodReversalduringperiodBalance at theReason forend of current
reversal
periodNomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Item

Method of reversal

Buildings, etc.

Upon depreciation or sale, the corresponding amount is scheduled to be reversed.

Land

Upon sale, the corresponding amount is scheduled to be reversed.

Buildings in trust, Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
etc.
Land in trust
Upon sale, the corresponding amount is scheduled to be reversed.
Leasehold rights
Leasehold rights intrust
Investment
Upon redemption, etc., the corresponding amount is scheduled to be reversed.
securities(3) Impairment loss
Upon the sale of the relevant properties, the corresponding amount is scheduled to be reversed.
(4) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount isscheduled to be reversed.
(Notes to Statement of Income and Retained Earnings)*1. Breakdown of real estate rental revenues and expenses
Previous period
from Sep. 1, 2015
to Feb. 29, 2016
A. Property related revenues
Rental revenues
Rent revenues
Common area charges
Other rental revenues
Parking revenues
Incidental income
Other miscellaneous revenues
Property related revenues
B. Property related expenses
Real estate rental expenses
Property management costs
Property management fees
Property and other taxes
Utility expenses
Casualty insurance
Repairs and maintenanceLand rents
Depreciation
Other rental expenses
Property related expenses

20,176,656
2,109,778
450,566
1,529,932
45,678

1,378,031
654,354
2,114,885
1,389,965
30,984
1,555,616
162,378
3,471,461
789,029

C. Real estate rental profits [A－B]

22,286,435

24,461,221
2,383,650

26,844,872

533,525
2,026,176
24,312,611

11,546,708
11,546,708
12,765,903- 24 -

Thousands of Yen
Current period
from Mar. 1, 2016
to Aug. 31, 2016

2,069,384
84,5972,687,507
29,532,379

1,614,327
874,716
2,315,517
1,711,878
37,635
1,581,098
193,396
4,205,687
955,671

13,489,928
13,489,928
16,042,451

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

*2. Impairment loss
NMF recorded impairment loss during the fiscal period under review for the following asset groups.

Property name

Use

Type

Location

Toho Edogawabashi Building
PRIME URBAN Nakano
PRIME URBAN Urayasu II

OfficeResidential
Residential

Land, building, etc.
Land, building, etc.
Land, building, etc.

Bunkyo-ku, Tokyo
Nakano-ku, Tokyo
Urayasu-shi, Chiba

Impairment loss
(Thousands ofYen)
50,924
20,9587,136

For the purpose of calculating impairment loss, each property is considered an asset group. In the fiscal period underreview, as sale agreements were concluded on March 30, 2016 for the above three fixed asset groups, their book values
were decreased to the recoverable values and the decrease was recorded as impairment loss under operating expenses.
Any impairment loss caused by sales is regarded as having the properties of an operating expense and is therefore
recorded under operating expenses in accordance with Article 48 Paragraph 2 of the Calculation Rules for Investment
Corporations.
Also, the recoverable values of the asset groups are measured using the net realizable values. The net realizablevalues are calculated by subtracting the expected disposal costs from the actual sale prices.

*3 The net amount indicated is calculated by offsetting total retained earnings received through mergers of ¥913,191
thousand by the distribution of surplus (merger distribution) of ¥912,562 thousand.

*4. Breakdown of gain on sale of real estate
Current period (from March 1, 2016 to August 31, 2016)
Thousands of Yen
Central
Shintomicho
Building,Toho
Edogawabashi Building, Toshin Meguro
Building, PRIME URBAN Ochiai, PRIMEURBAN Nakano, PRIME URBAN Ekoda,
PRIME URBAN Urayasu II, PRIMEURBAN Yamahana
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Gain on sales of real estate

5,350,000
4,983,325
229,442
137,232

This assignment is an assignment to a single assignee under a single purchase agreement. The purchase price ofeach property is not disclosed as the assignee’s consent to the disclosure thereof has not been obtained.

NOF Shinagawa Konan Building, Yokohama
Odori Koen Building, JCB Sapporo Higashi
Building, PRIME URBAN Hatagaya, PRIMEURBAN Sangen Jaya II, PRIME URBAN
Kamikitazawa
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Gain on sales of real estate

10,633,000
10,094,760
141,572
396,667

This assignment is an assignment to a single assignee under a single purchase agreement. The purchase price ofeach property is not disclosed as the assignee’s consent to the disclosure thereof has not been obtained.

NOF Nihonbashi Honcho Building
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Gain on sales of real estate

11,270,000
10,449,586
58,772
761,640- 25 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

NOF Minami Shinjuku Building
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Gain on sales of real estate

2,380,000
2,219,005
14,259146,735*5. Breakdown of loss on sales of real estate
Current period (from March 1, 2016 to August 31, 2016)
Thousands of Yen

NOF Tameike Building
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Loss on sales of real estate

4,500,000
4,804,276
24,924(329,201)(Notes to Statement of Changes in Net Assets)
Previous period
from Oct. 1, 2015
to Feb. 29, 2016

Current period
from Mar. 1, 2016
to Aug. 31, 2016

Total number of investment units authorized

20,000,000 units

20,000,000 units

Total number of investment units issued and outstanding

3,722,010 units

3,722,010 units*1.Total number of investment units authorized andtotal number of investment units issued and outstanding(Notes to Statement of Cash Flows)*1. Reconciliation of cash and cash equivalents at end of period to balance sheet items
Previous period
from Oct. 1, 2015
to Feb. 29, 2016
47,139,232

Cash and bank deposits

Thousands of Yen
Current period
from Mar. 1, 2016
to Aug. 31, 2016
63,889,766

Cash and bank deposits in trust

11,185,928

11,380,801

Cash and cash equivalents

58,325,160

75,270,568*2. Important non-cash transactions
Previous period
from Oct. 1, 2015
to Feb. 29, 2016

Thousands of Yen
Current period
from Mar. 1, 2016
to Aug. 31, 2016

NMF was established through the consolidation type merger of the former NMF with the consolidated investment corporations, namely
NOF and NRF. The main content of the assets and liabilities inherited from these three investment corporations is as follows. The increaseof unitholders’ equity and surplus are ¥161,120,405 thousand and ¥315,299,775 thousand, respectively.

Current assets

63,281,117－

Noncurrent assets

783,332,891－

Deferred assets

24,926－

Total assets

846,638,935－

Current liabilities

62,222,670－

Long-term liabilities

384,957,993－

Total liabilities

447,180,664－- 26 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

(Notes on Financial Instruments)
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
NMF procures funds through such means as debt financing, the issuance of investment corporation bonds and theissuance of investment units for the acquisition of real estate related assets. In procuring funds throughinterest-bearing liabilities, NMF adopts the basic financial policy of procuring funds with due consideration forextending the loan period, converting the interest rate to a fixed rate and laddering the repayment dates, etc. forinterest-bearing liabilities.
NMF enters into derivative transactions for the purpose of hedging risks of future interest rates rising and adopts
the policy of not engaging in speculative transactions.
(2) Description of financial instruments and associated risks, and risk management structure
Funds from debt and investment corporation bonds are primarily used to fund the acquisition of real estate-related
assets and to fund the repayment of debts and redemption of investment corporation bonds. These are exposed toliquidity risks of failure to procure alternative funds at the time of repayment or redemption. NMF controls and limits
these risks by diversifying the lending financial institutions it uses, while considering and implementing various
procurement of funds, including the effective use of surplus funds, procuring funds from the capital market throughissuance of investment units. In addition, floating interest rates debt is exposed to risks of the interest rate payablerising. NMF limits the impact that the interest rate payable rising has on NMF’s operations by keeping LTV (ratio ofinterest-bearing liabilities to total assets) at a low level and keeping the ratio of borrowings that are long-term andfixed-rate borrowings at a high level. Furthermore, derivative transactions (interest-rate swap transactions, etc.) areavailable as a hedging instrument for hedging risks of floating interest rates rising and effectively fixing interest rates.
Deposits are made for investing NMF’s surplus funds and are exposed to risks of failure of the financial institutions
that are holding the deposits and other credit risks, but NMF limits the risks by diversifying the financial institutions
that are holding the deposits.
(3) Supplementary explanation on matters concerning fair value, etc. of financial instruments
The fair value of financial instruments, aside from values based on market price, includes values based on reasonablecalculation when there is no market price. Certain assumptions are adopted in the calculation of the concerned values.
Accordingly, there may be cases where the concerned values will vary when different assumptions are adopted. In
addition, concerning the contract amount, etc. of derivative transactions presented in “Notes on Derivative
Transactions” later in this document, the amount itself does not represent the market risk involved in these derivativetransactions.

- 27 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

2. Matters concerning fair value, etc. of financial instruments
The following are the carrying amounts and fair values as of February 29, 2016, and the differences between theseamounts.
Thousands of Yen

Carrying amount(Note 1)
(1) Cash and bank deposits(2) Cash and bank deposits in trust(3) Short-term debt
(4) Current portion of investment
corporation bonds(5) Current portion of long-term debt
(6) Investment corporation bonds(7) Long-term debt
(8) Derivative transactions

Fair value(Note 1)

Amount of difference

47,139,232
11,185,928(9,100,000)

47,139,232
11,185,928(9,100,000)－－－(5,000,000)(5,046,550)

46,550(50,015,600)(27,500,000)(311,549,000)(2,882,186)(50,192,167)(29,536,482)(318,556,852)(2,882,186)

176,567
2,036,482
7,007,852－

The following are the carrying amounts and fair values as of August 31, 2016, and the differences between theseamounts.
Thousands of Yen

Carrying amount(Note 1)
(1) Cash and bank deposits(2) Cash and bank deposits in trust(3) Short-term debt
(4) Current portion of investment
corporation bonds(5) Current portion of long-term debt
(6) Investment corporation bonds(7) Long-term debt
(8) Derivative transactions

Fair value(Note 1)

Amount of difference

63,889,766
11,380,801

63,889,766
11,380,801

－

－

－
－
－

(10,000,000)(10,074,295)

74,295(47,805,600)(22,500,000)(329,466,200)(2,274 ,820)(47,886,883)(24,314,967)(336,081,428)(2,274,820)

81,283
1,814,967
6,615,228－(Note 1) Liabilities are shown in parentheses.
(Note 2) Matters concerning method for calculating fair value of financial instruments and derivative transactions(1) Cash and bank deposits; (2) Cash and bank deposits in trust, (3) Short-term debt
As these are settled within a short period of time, the fair value is approximately the same as the book value and is thus stated at that bookvalue.
(4) Current portion of investment corporation bonds; (6) Investment corporation bonds
The fair value of investment corporation bonds issued by the Company is determined based on their market prices(5) Current portion of long-term debt; (7) Long-term debt
As long-term debt with floating interest rates reflect market interest rates within a short period of time, the fair value is thought to beapproximately the same as the book value and is thus stated at that book value (However, the fair value of long-term debt with floatinginterest rates that is subject to special treatment for interest-rate swaps (please refer to “Notes on Derivative Transactions” later in thisdocument) is based on the method of calculating by discounting the sum total amount of principal and interest accounted for as one
transaction together with the concerned interest-rate swap by the interest rate that is reasonably estimated as being applicable in the event ofdrawdown of a similar debt financing). In addition, the fair value of long-term debt with fixed interest rates is calculated based on the methodof calculating by discounting the sum total amount of principal and interest by the interest rate that is reasonably estimated as being
applicable in the event of drawdown of a similar debt financing.
(8) Derivative transactions
Please refer to “Notes on Derivative Transactions” later in this document.
(Note 3) Financial instruments for which fair value is deemed extremely difficult to determine

Thousands of Yen

Carrying amountType of asset
Investment securities

Previous period(Feb. 29, 2016)
91,430Current period(Aug. 31, 2016)－*Ownership interests in silent partnerships (a type of investment security) do not have a readily available market price and the fair value isdeemed extremely difficult to determine. Accordingly, they are excluded from fair value disclosures.
(Note 4) Redemption of monetary claims scheduled to be due after the date of settlement of accounts (February 29, 2016)
Thousands of Yen

Due within
1 yearCash and bank deposits
Cash and bank deposits in trust
Total

47,139,232
11,185,928
58,325,160

Due after
1 year,within2 years－－－- 28 -

Due after
2 years,
within3 years－－－

Due after
3 years,
within4 years－－－

Due after
4 years,
within5 years－－－

Due after
5 years－－－

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Amount of redemption of monetary claims scheduled to be due after the date of settlement of accounts (August 31, 2016)
Thousands of Yen

Due within
1 yearCash and bank deposits
Cash and bank deposits in trust
Total

63,889,766
11,380,801
75,270,568

Due after
1 year,within2 years－－－

Due after
2 years,
within3 years－－－

Due after
3 years,
within4 years－－－

Due after
4 years,
within5 years－－－

Due after
5 years－－－(Note 5) Amount of repayment of investment corporation bonds, long-term debt and other interest-bearing liabilities scheduled to be due after thedate of settlement of accounts (February 29, 2016)
Thousands of Yen

Due within
1 yearShort-term debt
Investment corporation bonds
Long-term debt
Total

9,100,000
5,000,000
50,015,600
64,115,600

Due after
1 year,within2 years－
9,000,000
53,475,600
62,475,600

Due after
2 years,
within3 years－－
43,685,600
43,685,600

Due after
3 years,
within4 years－－
49,185,600
49,185,600

Due after
4 years,
within5 years－
5,000,000
49,455,600
54,455,600

Due after
5 years－
13,500,000
115,746,600
129,246,600

Amount of repayment of investment corporation bonds, long-term debt and other interest-bearing liabilities scheduled to be due after thedate of settlement of accounts (August 31, 2016)
Thousands of Yen

Due within
1 yearInvestment corporation bonds
Long-term debt
Total

10,000,000
47,805,600
57,805,600

Due after
1 year,within2 years
4,000,000
46,505,600
50,505,600

Due after
2 years,
within3 years－
48,285,600
48,285,600

Due after
3 years,
within4 years
5,000,000
47,385,600
52,385,600

Due after
4 years,
within5 years－
49,435,600
49,435,600

Due after
5 years
13,500,000
137,853,800
151,353,800(Notes on Securities)

Previous period (As of February 29, 2016)
Not applicable.
Current period (As of August 31, 2016)
Not applicable.

(Notes on Derivative Transactions)
1. Transactions not subject to hedge accounting
Previous period (As of February 29, 2016)
Not applicable.
Current period (As of August 31, 2016)
Not applicable.
2. Transactions subject to hedge accounting
Previous period (As of February 29, 2016)
The following is the contract amount or the amount equivalent to the principal provided in the contract, etc. as ofthe date of settlement of accounts for each method of hedge accounting.
Method ofhedge accounting
Principal treatment method
Special treatment forinterest-rate swaps

Type ofderivative transaction
Interest-rate swap transaction
Floating receivable
Fixed payable
Interest-rate swap transaction
Floating receivable
Fixed payable

Thousands of Yen
Fair value(Note 2)Main hedged
item

Contract amount (Note 1)
Due after 1 year

Long-term debt

149,700,000

130,457,200(Note 3) (2,882,186)

Long-term debt

103,382,300

90,339,500(Note 4) (2,492,211)

253,082,300

220,796,700(5,374,397)

Total(Note 1) Contract amount is based on notional amount.
(Note 2) Fair value is calculated by the swap counterparty, based on the actual market interest rate, etc.
(Note 3) Out of the fair value, (¥14,591 thousand) is booked as “accrued expenses” on the Balance Sheet.
(Note 4) Out of the fair value, (¥2,492,211 thousand) is not marked to market on the Balance Sheet, due to the adoption of special treatment forinterest-rate swaps.

- 29 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Current period (As of August 31, 2016)
The following is the contract amount or the amount equivalent to the principal provided in the contract, etc. as ofthe date of settlement of accounts for each method of hedge accounting.
Method ofhedge accounting
Principal treatment method
Special treatment forinterest-rate swaps

Type ofderivative transaction
Interest-rate swap transaction
Floating receivable
Fixed payable
Interest-rate swap transaction
Floating receivable
Fixed payable

Thousands of Yen
Fair value(Note 2)Main hedged
item

Contract amount (Note 1)
Due after 1 year

Long-term debt

135,300,000

117,600,000(Note 3) (2,274,820)

Long-term debt

114,760,900

101,718,100(Note 4) (2,159,763)

250,060,900

219,318,100(4,434,584)

Total(Note 1) Contract amount is based on notional amount.
(Note 2) Fair value is calculated by the swap counterparty, based on the actual market interest rate, etc.
(Note 3) Out of the fair value, (¥20,365 thousand) is booked as “accrued expenses” on the Balance Sheet.
(Note 4) Out of the fair value, (¥2,159,763 thousand) is not marked to market on the Balance Sheet, due to the adoption of special treatment forinterest-rate swaps.

(Notes on retirement benefit plans)Previous period (As of February 29, 2016)
Not applicable, as NMF has no retirement benefit system.
Current period (As of August 31, 2016)
Not applicable, as NMF has no retirement benefit system.
(Notes on the Business Combination)
Previous period (As of February 29, 2016)
Business Combination through Acquisition
1． Overview of the Business Combination（1） Name and Line of Business of Aquirees
Name of acquiree
Nomura Real Estate Office Fund, Inc. (“NOF”)
Nomura Real Estate Residential Fund, Inc. (“NRF”)

Line of Business
Real estate investment trust
Real estate investment trust（2） Main Reasons for the Business Combination
NMF believed that the merger would expand acquisition opportunities, stabilize the portfolio, enhance risk
tolerance, increase competitive strength for asset acquisitions and stabilize the financial base by increasing theasset size and diversifying target investment sectors. In addition, NMF believed that it could achieve both growthand stable management by effectively leveraging the wide-range of know-how and brands held by Nomura Real
Estate Group, one of the major comprehensive real estate developers in Japan. As such, NMF was confident
that the merger was the best option for its unitholders and has therefore entered into the merger agreement.
（3） Date of Business Combination
October 1, 2015（4） Legal Framework of the Business Combination
A consolidation type merger with the former NMF, NOF and NRF as the consolidated investment corporations.
（5） Name of the Investment Corporation after the Merger
Nomura Real Estate Master Fund, Inc.
（6） Main Reasons for the Selection of the Acquiring Company① Among the shareholders of the three investment corporations, the shareholders of the former NMF holdthe most voting rights in NMF after the business combination.
② NMF’s Board of Directors is constituted from the members of the former NMF’s Board of Directors.

- 30 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

2． Period of Performance of Acquirees Included in the Statement of Income and Retained Earnings
Name of acquiree

Period of performance

NOF
NRF

From October 1, 2015 to February 29, 2016
From October 1, 2015 to February 29, 2016

3． Acquisition Cost of Acquirees and its Breakdown
Thousands of Yen
Name of acquiree

Acquisition cost

NOF
NRF
Total

205,604,427
109,695,348
315,299,775

4． Exchange Ratio, Method of Calculation and Number of Investment Units Delivered as Consideration for theAcquisition（1） Exchange Ratio of Investment Units
Merger Ratio

NMF
1.00

Former NMF
1.00

NOF
3.60

NRF
4.45

（2） Method of Calculation
Each investment corporation appointed a financial advisor (hereafter referred to as “FA”) for the merger andrequested that said financial advisor perform a financial analysis of the merger ratio. The former NMF
appointed Nomura Securities Co., Ltd., NOF appointed Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. and
NRF appointed SMBC Nikko Securities Inc. Based on comprehensive consideration of such factors as financial
status, asset status, future outlooks, the merits of the merger as well as the results of the financial analyses
conducted by the three FAs, NMF, NOF and NRF reached an agreement with regard to the above merger ratios.
（3） Number of Investment Units Granted
Name of acquiree

NOF
NRF

Number of investment units granted
1,341,190 units
715,560 units

5． Content and Amount of Main Acquisition-Related Expenses
Thousands of Yen
Content

Relevant investment
corporation

AmountFA fees

Former NMF

600,000

Acquisition fees for merger

NMF

2,590,275

6． Amount and Cause of Goodwill（1） Amount of Goodwill¥77,875,100 thousand（2） Cause
Goodwill was caused by the acquisition of acquirees NOF and NRF, the former for ¥205,604,427 thousand(acquisition price), thus exceeding its market value of net assets of ¥159,932,291 thousand, and the latter for¥109,695,348 thousand (acquisition price), thus exceeding its market value of net assets of ¥77,492,382
thousand.
（3） Method of Goodwill Amortization and the Amortization Period
The goodwill will be amortized by the straight-line method over a period of 20 years.

- 31 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

7． Amounts and Main Content of Assets Accepted and Liabilities Taken from the Business Combination
Thousands of Yen
39,178,399
518,620,230
557,798,629

Current assets
Noncurrent assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities

51,711,857
268,662,098
320,373,955

8． Estimated Impact on the Statement of Income and Retained Earnings for the Fiscal Period Under Review Assuming
the Business Combination Was Completed on the Start Date of the Operating Period
There is no impact since the business combination date is the same as the start date of the operating period.
Current period (As of August 31, 2016)
Not applicable.

(Notes on Tax Effect Accounting)
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities
Current period(February 29, 2016)
Deferred tax assets

Current period(August 31, 2016)(Thousands of Yen)

Accepted valuation difference at merger

15,343,107

12,309,409

Deferred gains or losses on hedges

926,519712,266

Interest received in advance389,900

319,727

Over-depreciated long-term prepaid expenses

36,451

32,211

Denied impairment loss

25,531－

Denied amortization of leasehold right in trust

500

611

Non-deductible accrued enterprise tax

97－

Excess allowance for doubtful accounts

17

17

Subtotal deferred tax assets

16,722,125

13,374,242

Valuation allowance(16,722,125)(13,374,242)

Total deferred tax assets－－

Net deferred tax assets－－- 32 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

2. Breakdown of major components that caused significant differences between statutory tax rate and effective tax
rate after application of tax effect accounting
Previous period(February 29, 2016)
Statutory tax rate

Current period(August 31, 2016)32.31%

32.31%

Deductible cash distributions
Valuation allowance(58.38%)(8.61%)

13.16%(30.43%)

Amortization of goodwill

12.94%

6.72%

Other

0.01％

0.01％

Effective tax rate after application of tax effectaccounting

0.05%

0.01%

(Adjustments)(Notes on equity method income and retained earnings, etc.)

Previous period (from October 1, 2015 to February 29, 2016)
Not applicable, as NMF has no subsidiaries or affiliates.
Current period (from March 1, 2016 to August 31, 2016)
Not applicable, as NMF has no subsidiaries or affiliates.

(Notes on Transactions with Related Parties)
1. Parent company and major corporate unitholders
Previous period (from October 1, 2015 to February 29, 2016)
Not applicable.
Current period (from March 1, 2016 to August 31, 2016)
Not applicable.
2. Subsidiaries and affiliates
Previous period (from October 1, 2015 to February 29, 2016)
Not applicable.
Current period (from March 1, 2016 to August 31, 2016)
Not applicable.
3. Fellow subsidiaries
Previous period (from October 1, 2015 to February 29, 2016)
Not applicable.
Current period (from March 1, 2016 to August 31, 2016)
Not applicable.
4. Directors and major individual unitholders
Previous period (from October 1, 2015 to February 29, 2016)
Not applicable.
Current period (from March 1, 2016 to August 31, 2016)
Not applicable.

- 33 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

(Notes on asset retirement obligations)
Previous period (from October 1, 2015 to February 29, 2016)
Not applicable.
Current period (from March 1, 2016 to August 31, 2016)
Not applicable.

(Notes on Investment and Rental Properties)

NMF owns leasable offices, leasable retail facilities, leasable logistics facilities and leasable residential (including land) inGreater Tokyo area and other areas for the purpose of earning revenue from leasing.
The following are the carrying amount, amount of increase (decrease) during the fiscal period and fair value of theseinvestment and rental properties at the end of the fiscal period.
Previous period
from Oct. 1, 2015
to Feb. 29, 2016
Carrying amount
Balance at beginning of period
Amount of increase (decrease) during period
Balance at end of period
Fair value at end of period(Note 1)
(Note 2)
(Note 3)(Note4)

781,610,588
8,696,317
790,306,905
829,072,000

Thousands of Yen
Current period
from Mar. 1, 2016
to Aug. 31, 2016
790,306,905(7,849,126)
782,457,778
834,749,000

For the previous period, the amount stated for balance at beginning of period is that after the merger treatment.
Carrying amount is the cost of acquisition less accumulated depreciation.
Of the amount of increase (decrease) in investment and rental properties, the amount of increase during previous period ismainly attributable to acquisition of NRE Kichijoji Building (¥5,347,396 thousand), GEMS Ichigaya (¥2,112,624 thousand),
PROUD FLAT Hatchobori (¥962,150 thousand) and PROUD FLAT Itabashi Honcho (¥767,484 thousand). The decreaseduring the previous period is mainly depreciation (¥3,471,460 thousand). The amount of increase during current period ismainly attributable to acquisition of PMO Tamachi (¥6,328,987 thousand), PMO Ginza Hatchome (¥4,025,053 thousand),PMO Shibakoen (¥3,975,082 thousand), Hirakata Kuzuha Logistics Center (¥3,516,505 thousand), PRIME URBAN
Meguro Mita (¥1,137,130 thousand), PRIME URBAN Chikusa (¥1,205,712 thousand), and Ryotokuji University
Shin-Urayasu Campus (Land) (¥5,125,367 thousand). The decrease during the current period is mainly attributable to saleof NOF Nihonbashi Honcho Building (¥10,449,586 thousand), NOF Tameike Building (¥4,804,276 thousand), NOF
Shinagawa Konan Building (¥3,471,844 thousand), NOF Minami Shinjuku Building (¥2,219,005 thousand), Central
Shintomicho Building (¥1,328,098 thousand), Toho Edogawabashi Building (¥1,095,234 thousand), Toshin Meguro
Building (¥854,458 thousand), Yokohama Odori Koen Building (¥1,806,149 thousand), JCB Sapporo Higashi Building(¥3,266,519 thousand), PRIME URBAN Hatagaya (¥470,012 thousand), PRIME URBAN Ochiai (¥337,641 thousand),
PRIME URBAN Sangen Jaya II (¥483,603 thousand), PRIME URBAN Kamikitazawa (¥596,632 thousand), PRIMEURBAN Nakano (¥468,054 thousand), PRIME URBAN Ekoda (¥408,769 thousand), PRIME URBAN Urayasu II(¥219,614 thousand), and PRIME URBAN Yamahana (¥271,452 thousand) as well as depreciation (¥4,203,908 thousand).
Fair value at the end of the period is the appraisal value or investigation value found by an outside real estate appraiser.

The income (loss) in the previous period (from October 1, 2015 to February 29, 2016) and current period (from March 1,
2016 to August 31, 2016) for investment and rental properties is as presented in “Notes to Statement of Income andRetained Earnings” earlier in this report.
(Notes on Segment Information)(Segment Information)
Since NMF has only one segment, the real estate leasing business, segment information has been omitted.
(Related Information)
Previous period (from October 1, 2015 to February 29, 2016)
1. Information by product and service
Disclosure is omitted, since revenues from external customers of a single product/service category are more than 90%of the operating revenues presented on the Statement of Income and Retained Earnings.
2. Information by geographical area
(1) Revenues
Disclosure is omitted, since revenues from external customers in Japan account for more than 90% of the operating
revenues presented on the Statement of Income and Retained Earnings.
- 34 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(2) Property and equipment
Disclosure is omitted, since the amount of property and equipment located in Japan accounts for more than 90% of
the amount of property and equipment presented on the Balance Sheet.
3. Information by major customer

Customer name
Nomura Real Estate
Partners Co., Ltd.

Revenues (Thousands of Yen)

Related segment name3,542,264

Rental real estate businessCurrent period (from March 1, 2016 to August 31, 2016)
1. Information by product and service
Disclosure is omitted, since revenues from external customers of a single product/service category account for morethan 90% of the operating revenues presented on the Statement of Income and Retained Earnings.
2. Information by geographical area
(1) Revenues
Disclosure is omitted, since revenues from external customers in Japan account for more than 90% of the operating
revenues presented on the Statement of Income and Retained Earnings.
(2) Property and equipment
Disclosure is omitted, since the amount of property and equipment located in Japan accounts for more than 90% of
the amount of property and equipment presented on the Balance Sheet.
3. Information by major customer

Customer name
Nomura Real Estate Partners
Co., Ltd.

Revenues (Thousands of Yen)

Related segment name4,289,956

Rental real estate business- 35 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

(Notes on Per Unit Information)
Previous period
from Oct. 1, 2015
to Feb. 29, 2016

Yen
Current period
from Mar. 1, 2016
to Aug. 31, 2016

Net assets per unit

128,318

128,777

Net income per unit

1,087

2,513

(Note 1)
(Note 2)

Net income per unit is calculated by dividing net income by the average number of investment units during the period.
In addition, the diluted net income per unit is not stated, since there are no dilutive investment units.
The following is the basis for calculation of net income per unit.

Previous period
from Oct. 1, 2015
to Feb. 29, 2016

Current period
from Mar. 1, 2016
to Aug. 31, 2016

4,048,278

9,355,981－－

Net income attributable to ordinary investment units (Thousands ofYen)

4,048,278

9,355,981

Average number of investment units during period (Units)

3,722,010

3,722,010

Net income (Thousands of Yen)
Amount not attributable to ordinary unitholders (Thousands of
Yen)(Notes on Significant Subsequent Events)
Current period (from March 1, 2016 to August 31, 2016)
Merger with TOP
On May 26, 2016, NMF and TOP REIT, Inc. (“TOP”) resolved, at their respective Board of Directors’ meetings,
to enter an absorption type merger (the “absorption type merger”) with NMF as the surviving corporation and
TOP as the absorbed corporation, effective September 1, 2016. On the same day, NMF and TOP entered a merger
agreement.
(1) Objective of the Absorption Type Merger
NMF believes that the absorption type merger presented a rare opportunity for external growth in the heatedreal estate acquisition market. Furthermore, the absorption type merger increased NMF’s ratio of investment inproperties for which future internal growth can be expected, specifically properties that are in upside sectors or
located within Tokyo's five central wards. Through the absorption type merger, NMF sought to increase theportfolio’s diversity, thereby raising risk tolerance, and expected that the increase in the market capitalization of
its investment units accompanying the issue of investment units would further enhance their liquidity. As a resultof these and other effects, NMF expected the absorption type merger to contribute to unitholder value.
(2) Method of the Merger
The merger was an absorption type merger with NMF as the surviving corporation; TOP was dissolved throughthe absorption type merger.
(3) Allotment ratio
Through the absorption type merger, 2.62 investment units of NMF were allotted per 1.00 unit of TOP.
(4) Merger distribution
Instead of the cash distributions to the unitholders of TOP for TOP’s final fiscal period (May 1 to August 31,
2016), NMF will make a cash distribution to the unitholders recorded on the final unitholders register for TOP
as of the day immediately prior to the effective date of the absorption type merger in an amount equivalent tothe cash distribution for TOP’s final fiscal period, based on the amount of profit available for distribution by
TOP for said period.

- 36 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

(5) Unitholders’ capital
Increases in the Investment Corporation’s unitholders’ capital and capital surplus due to the absorption typemerger are as follows.
Unitholder’s capital: ¥0
Capital surplus: The amount of change in unitholders’ equity as described in Article 22 Paragraph 1 of theRegulations Concerning Accounting of Investment Corporations (Cabinet Office Ordinance No. 47 of 2006,
including subsequent amendments) less the amount of unitholders’ capital shown above(6) TOP’s business
The operation of assets, mainly as investments in specified assets, in accordance with the Investment Trust Act.

[Disclosure Omissions]
A disclosure of notes concerning lease transactions is omitted because such disclosure in this summary offinancial results is judged to be unnecessary.
(9) Increase (Decrease) in Total Number of Investment Units Issued and Outstanding
The following is the increase (decrease) in unitholders’ capital and total number of investment units issued andoutstanding during the period from the date of incorporation of NMF through the end of the current fiscal
period (August 31, 2016).

Date

October 1, 2015

Description

Consolidation typemergerTotal number ofinvestment units
issued and outstanding(Units)Increase
Balance(Decrease)
3,722,010

3,722,010

Unitholders’ capital(Millions of Yen) (Note 1)
Increase(Decrease)161,120

Note

Balance161,120(Note 2)

(Note 1) Figures have been truncated at the nearest million yen.
(Note 2) NMF was established through the consolidation type merger of the former NMF, NOF and NRF on October 1, 2015. Upon its
establishment, NMF allotted 1 NMF unit per former 1.00 NMF unit, 3.60 NMF units per 1.00 NOF unit and 4.45 NMF units per 1.00
NRF unit.
(Note 3) On September 1, 2016, as part of the absorption type merger, NMF issued 2.62 NMF units per 1.00 TOP unit, resulting in the issue of
461,120 new units. This caused the number of investment units issued and outstanding to rise to 4,183,130, and there is no change ofunitholders’ capital.

- 37 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

4. Changes in Directors(1) Changes in NMF Directors
Timely disclosure of changes in directors will be made at the time that details are determined.
There were no changes in directors during the period under review.
(2) Changes in Asset Management Company Directors and Statutory Auditors
Timely disclosure of changes in directors and statutory auditors will be made at the time that details are
determined.
There were changes in statutory auditors during the period under review as shown below. Please refer tothe press release dated March 4, 2016 titled “Notice Concerning Scheduled Amendments of the Articles ofIncorporation, Changes in Organization, and Changes of Directors and Important Employees in the AssetManagement Company” and May 18, 2016 titled “Notice Concerning Changes of Directors in the AssetManagement Company” for details.
Appointments (as of April 1, 2016)
Name

Title (New)

Title (Former)

Director and Managing Executive
Officer,
Head of NMF Investment
Kenichi Okada
Management Group,
General Manager, AssetManagement Department I
Appointments (as of June 23, 2016)

Executive Officer,
General Manager, NPR Investment
Management Department

Name

Title (New)

Title (Former)

Yoshiyuki Ito

Statutory auditor (part time)(New appointment)

Resignations (as of March 31, 2016)
Name

Title (New)

Kenichi Shinbashi(Resignation)

Motomi Uki(Resignation)

Title (Former)
Representative Director, Executive Vice
President
Supervisor of the Corporate Planning
Department, the Compliance Department, theInternal Audit Department, and the
Accounting Department
In charge of the Discretionary Investment
Management Section
Director andManaging Executive Officer
Head of the NMF Investment Management
Group
General Manager of the Fund Management
Department

Resignations (as of June 23, 2016)
Name

Title (New)

Title (Former)

Takahiko Nagaki(Resignation)

Statutory auditor- 38 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

5. Reference Information(1) Investment Status
1st fiscal period
2nd fiscal period
As of February 29, 2016
As of August 31, 2016
Area
As a percentage
As a percentage
Type of asset
Use
Total amount held
Total amount held
(Note 1)of total amount ofof total amount of(Millions of Yen)
(Millions of Yen)
assets (%)
assets (%)(Note 2)
(Note 2)
(Note 3)(Note 3)
Greater Tokyo area
82,5788.9
93,75910.0
OfficeOther areas
25,178
2.7
21,8292.3
properties
Subtotal
107,757
11.6
115,589
12.3
Greater Tokyo area
16,282
1.8
16,241
1.7
Retailproperties
Subtotal
16,282
1.8
16,241
1.7
Real estate
Greater Tokyo area
120,82013.0
122,340
13.1
Residential
Other areas
29,302
3.2
30,625
3.3
properties
Subtotal
150,12216.2
152,965
16.3
Greater Tokyo area
5,125
0.5
Other
properties
Subtotal
5,125
0.5Greater Tokyo area
198,895
21.4
176,672
18.9
OfficeOther areas
50,1785.4
50,478
5.4
properties
Subtotal
249,07326.8
227,151
24.3
Greater Tokyo area
80,2568.6
80,828
8.6
RetailOther areas
44,565
4.8
44,558
4.8
properties
Subtotal
124,82213.4
125,386
13.4
Real estatein trust
Greater Tokyo area
122,81413.2
121,923
13.0
Logistics
Other areas
6,161
0.7
9,569
1.0
properties
Subtotal
128,975
13.9
131,493
14.0
Greater Tokyo area
11,133
1.2
7,086
0.8
Residential
Other areas
2,138
0.2
1,418
0.2
properties
Subtotal
13,272
1.4
8,504
0.9
Subtotal
790,306
85.1
782,457
83.6
Silent Partnership Equity Interest (Note 4)91
0.0
Deposits and other assets
137,899
14.9
153,506
16.4
935,964
100.0
Total amount of assets
928,297
100.0
1st fiscal period
As of February 29, 2016
As a percentage
Amountof total amount(Millions of Yen)of assets (%)(Note 5)(Note 3)
Total amount of liabilities
Total amount of net assets

2nd fiscal period
As of August 31, 2016
As a percentage
Amountof total amount(Millions of Yen)of assets (%)(Note 5)(Note 3)450,695

48.6

456,65248.8

477,601

51.4

479,31151.2(Note 1) “Greater Tokyo area” refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture. “Other areas” refers tocabinet-order-designated cities, prefectural capitals, and cities with a population of 100,000 persons or more as well as surrounding areas ofthese cities that are not included in the Greater Tokyo area.
(Note 2) Total amount held is the carrying amount (in the case of real estate and real estate in trust, the sum total amount of book value, after
depreciation).
(Note 3) The figures are rounded off to first decimal place. Accordingly, the sum may not be exactly 100.0%.
(Note 4) Godo Kaisha Osaka Hirakata Project Silent Partnership Equity Interest.
(Note 5) Total amount of liabilities and total amount of net assets are the amounts as stated in the balance sheet as total liabilities and total net assets.

- 39 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(2) Investment Assets① Major Investment Securities
Not applicable.
② Investment Real Estate Properties
The following summarizes the real estate, etc. (252 properties) held as of August 31, 2016 (end of the 2nd
fiscal period) by NMF (this real estate and the beneficiary interests of trusts in which real estate properties
are the principal trust properties or the real estate that constitutes the underlying assets thereof arehereinafter referred to as the “assets held at the end of the 2nd fiscal period”). Unless otherwise stated,the figures in the tables below are the figures as of August 31, 2016.

- 40 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

A. Overview of Portfolio and Leasing Status and Changes in Occupancy Rate(a) Overview of Portfolio and Leasing Status
The following is an overview of the portfolio and leasing status for the assets held at the end of the
2nd fiscal period.
Number of properties

252

Gross leasable area (m2) (Note 1)

1,654,570.95

Gross leased area (m2) (Note 2)

1,639,746.30

Total number of tenants (Note 3)

1,276

Total of all contracted rent (Thousands of Yen) (Note 4)(Note 1)

4,422,614

The sum total of the “leasable area” of each of the assets held at the end of the 2nd fiscal period. “Leasable area” is the sum total areaof office facilities, retail facilities, logisticsfacilities, or residential facilities, etc. leasable in each asset (including the area of common-use
space, etc., if leased). Leasable area is calculated based not on that presented in the registry, but the area stated in the lease contract andthe area calculated based on building completion drawings, etc. Accordingly, the leasable area may not be the same as the floor area
based on that presented in the registry and may exceed the floor area. In the case of land with leasehold right, the land area based onthat presented in the registry is used as contracted area. For the Shinjuku Nomura Building, NOF Nihonbashi Honcho Building and
NRE Kichijoji Building, the leasable area is the area calculated by multiplying the building’s overall leasable area by the quasi
co-ownership ratio of the beneficial interest in real estate trust owned by NMF as of the end of the 2nd fiscal period. For the NRE
Tennozu Building, since the rent under the master lease agreement is calculated as the building’s overall rent multiplied by the ownership
ratio of the common areas, the leasable area is calculated as the building’s overall leasable area multiplied by the ownership ratio of thecommon areas. Land with leasehold interest indicates the land area in the registry as contracted space.

(Note 2)The sum total of “leased area” of each of the assets held at the end of the 2nd fiscal period. “Leased area” is the area that is actuallyleased to an end-tenant (The area stated in the lease contract; provided, however, that such be limited to the area of office properties,
retail properties, logistics properties, or residential properties, etc. (if all rental units are collectively leased, then the area of the entire
rental units) and not include the leased area of parking space, etc. However, if the master lessee has a rent-guaranteed master lease forsome or all rental units, the space is included in leased area regardless of whether or not there is a lease agreement with an end-tenant.)
in each asset. In the case of land with leasehold right, the leased area of the land is shown. For the Shinjuku Nomura Building, NOF
Nihonbashi Honcho Building and NRE Kichijoji Building, the leased area is the area calculated by multiplying the building’s overall
leased area by the quasi co-ownership ratio of the beneficial interest in real estate trust owned by NMF as of the end of the 2nd fiscal
period. For the NRE Tennozu Building, since the rent under the master lease agreement is calculated as the building’s overall rent
multiplied by the ownership ratio of the common areas, the leased area is calculated as the building’s overall leased area multiplied by theownership ratio of the common areas.

(Note 3)The sum total of “total number of tenants” of each of the assets held at the end of the 2nd fiscal period. In the calculation of “numberof tenants,” when some or all rental units are collectively leased for the purpose of subleasing and the lessee in the lease agreement(master lease agreement) has concluded an agreement with an end-tenant (sublessee that is the actual user) for subleasing the rental units,
the lessee of the master lease agreement is counted as one tenant. However, in the case of assets with a so-called pass-through master
lease agreement, where the rent received from the lessee in the master lease agreement is the same amount as the rent that the lessee
receives from the end-tenant, the total number of end-tenants is shown. In addition, if multiple rental units in a specific asset are leased
to a specific tenant, this is counted as one tenant for the asset and, if multiple assets are leased to a specific tenant, these are counted
separately and the total of that number of tenants is shown. For residential facilities or residential portions of “other” sector facilities,
when some or all rental units are collectively leased for the purpose of subleasing and the lessee in the lease agreement (master leaseagreement) has concluded an agreement with an end-tenant for subleasing the rental units, the lessee of the master lease agreement iscounted as one tenant, and the total number of tenants for the building as whole is shown.

(Note 4)

The total amount of “total contracted rent” for August 2016 of each of the assets held at the end of the 2nd fiscal period (amounts lessthan one thousand are truncated). “Total contracted rent” for August 2016 refers to the sum total of monthly rent and common area
charges in lease agreements actually concluded with end-tenants that are valid as of the last day of August 2016 (This does not include
parking space or other fees stated in parking space lease agreements or other such agreements signed in addition to the tenant leaseagreement. If common-use space, etc. is leased based on the lease agreement, the rent for such is included and, if rent includes anamount equivalent to the fee for use of parking space, such amount is included. In addition, if the master lessee has a rent-guaranteed
master lease for some or all rental units, the rent for the space is based on the rent, etc., in the lease agreement concluded with themaster lessee.). Furthermore, regarding tenants who have been exempt from rent payment for a certain period of time in theiragreements, such exemption period is not considered in the table above, and the rent is calculated based on the monthly rent andcommon area charges payable immediately after the exemption period ends. In addition, the standard level of rent is used for tenantswith sales-based rent. For the Shinjuku Nomura Building, NOF Nihonbashi Honcho Building and NRE Kichijoji Building, the total
contracted rent is calculated by multiplying the building’s overall rent revenues by the quasi co-ownership ratio of the beneficial interestin real estate trust owned by NMF as of the end of the 2nd fiscal period. For the NRE Tennozu Building, the the total contracted rent
is calcuclated as the building’s overall rent revenues multiplied by the ratio of the common areas that NMF owns through the trustee.

- 41 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(b) Changes in Occupancy Rate
The following is the changes in the occupancy rate of real estate under management held by NMF.

Portfolio occupancy rate
(at end of fiscal period) (%)

February 29, 2016(end of 1st fiscal
period)August 31, 2016(end of 2nd fiscal
period)

98.9

99.1

- 42 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

B. Price and Investment Share
The following is an overview of the assets held at the end of the 2nd fiscal period (acquisition price,
carrying amount, opinion of value at end of period, investment share and appraiser).
Use

Area

Acquisition price(Millions of Yen)
(Note 1)

Property name

Opinion of value
at end of period(Millions of Yen)
(Note 4)

Investment
share
(%)
(Note 5)

Appraiser

Shinjuku Nomura Building

43,90045,29447,000

5.6

NRE Tennozu Building

20,50020,49020,900

2.5

Kojimachi Millennium Garden

26,70026,67726,800

3.2

The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
Institute

10,914

10,893

11,200

1.3

The Tanizawa Sogo
Appraisal Co., Ltd.

Tennozu Park Side Building

12,70012,67912,000

1.4

NOF
Shinjuku
Building

10,00010,062

10,300

1.2

NOF Shibuya Koen-dori Building

10,40010,434

10,700

1.3

Secom Medical Building

11,10011,045

11,100

1.3

NOF Shiba Building

7,040

7,028

7,140

0.9

Nishi-Shinjuku Showa Building

8,140

8,143

8,110

1.0

NRE Shibuya Dogenzaka Building

5,310

5,316

5,430

0.7

Iwamoto-cho Toyo Building

4,050

4,068

4,060

0.5

NOF Surugadai Plaza Building

4,690

4,709

4,700

0.6

PMO Nihonbashi Honcho

4,320

4,276

4,520

0.5

PMO Nihonbashi Kayabacho

5,010

4,971

5,150

0.6

Otemachi
Building

4,430

4,583

4,750

0.6

NRE Higashi-nihonbashi Building

3,570

3,565

3,360

0.4

PMO Akihabara

4,240

4,197

4,680

0.6

Hatchobori NF Building

2,480

2,471

2,550

0.3

NOF
Kanda
Building

4,160

4,189

4,060

0.5

NOF Takanawa Building

2,830

2,827

2,820

0.3

PMO Hatchobori

2,880

2,857

3,050

0.4

PMO Nihonbashi Odenmacho

2,210

2,186

2,330

0.3

PMO Higashi-nihonbashi

1,690

1,675

1,810

0.2

NRE Ueno Building

6,470

6,508

6,480

0.8

NOF Technoport Kamata Center
Building

4,780

4,787

4,520

0.5

NF Hongo Building.

4,890

4,868

5,140

0.6

Crystal Park Building

3,390

3,378

3,420

0.4

NOF Kichijoji Honcho Building

1,780

1,838

1,840

0.2

Faret Tachikawa Center Square

3,850

3,854

4,080

0.5

The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
Institute
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
Institute
Daiwa Real EstateAppraisal Co., Ltd.
Appraisal Firm A
Square Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
Institute
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Appraisal Firm A
Square Ltd.
Japan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.

NOF
Kawasaki
Building

Higashiguchi

7,830

7,853

8,350

1.0

Japan Valuers Co., Ltd.

NOF
Yokohama
Building

Nishiguchi

5,460

5,599

5,910

0.7

NOF Shin-Yokohama Building

2,620

2,821

2,890

0.3

PMO Tamachi

6,210

6,303

6,560

0.8

PMO Ginza Hatchome

3,970

4,012

4,210

0.5

PMO Shibakoen

3,900

3,958

4,150

0.5

NOF
Nihonbashi
Building（Note 6）

Greater
OfficeTokyo
area

Carrying amount(Millions of Yen)
(Note 3)

HonchoMinamiguchi

Tatemono

GotandaIwamoto-cho- 43 -

Japan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
Institute

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Use

Area
Other
areas

OfficeRetail

Other
areas

GreaterTokyo
area

Property nameAcquisition price(Millions of Yen)
(Note 1)

Carrying amount(Millions of Yen)
(Note 3)

Opinion of value
at end of period(Millions of Yen)
(Note 4)

Investment
share
(%)
(Note 5)

Appraiser

Sapporo North Plaza

6,250

6,344

6,790

0.8

NRE Sapporo Building

4,140

4,070

4,260

0.5

NOF Sendai Aoba-dori Building

2,030

2,059

2,110

0.3

NOF Utsunomiya Building

2,320

2,631

2,210

0.3

NOF Nagoya Fushimi Building

2,240

2,199

2,160

0.3

Japan Real Estate
InstituteJapan Real Estate
InstituteMorii Appraisal &Investment
Consulting, Inc.
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
Institute

NOF Nagoya Yanagibashi Building

2,280

2,271

2,290

0.3

Japan Valuers Co., Ltd.

Omron Kyoto Center Building

18,30018,266

18,600

2.2

Japan Real
Institute

SORA Shin-Osaka 21

12,10012,08912,100

1.4

Japan Valuers Co., Ltd.

NRE Osaka Building

6,100

6,206

6,120

0.7

NRE Nishi-Umeda Building

3,450

3,470

3,670

0.4

NRE Yotsubashi Building

4,000

4,001

4,020

0.5

NRE Hiroshima Building

2,280

2,276

2,440

0.3

NOF Hakata Ekimae Building

4,210

4,214

4,380

0.5

NOF Tenjin-Minami Building

2,230

2,206

2,220

0.3

Office subtotal

340,344

342,740

349,440

41.9

Morisia Tsudanuma

16,60017,503

17,500

2.1

Yokosuka More’s City

13,64013,71815,700

1.9

Recipe SHIMOKITA

10,407

10,66910,900

1.3

Kawasaki More’s

6,080

6,473

7,540

0.9

EQUINIA Shinjuku

4,260

4,310

4,680

0.6

EQUINA Ikebukuro

3,990

4,070

4,420

0.5

covirna machida

3,440

3,699

4,260

0.5

Nitori Makuhari

3,080

2,928

3,620

0.4

Konami Sports Club Fuchu

2,730

2,634

3,300

0.4

FESTA SQUARE

2,600

2,459

3,070

0.4

GEMS Shibuya

2,490

2,468

2,640

0.3

Sundai Azamino

1,700

1,616

1,990

0.2

EQUINIA Aobadai

1,560

1,592

1,830

0.2

Megalos Kanagawa

1,000

995

1,340

0.2

Mitsubishi Motors Meguro

2,740

2,764

3,080

0.4

Mitsubishi Motors Chofu

1,760

1,776

1,850

0.2

Mitsubishi Motors Shibuya

1,570

1,586

1,760

0.2

Mitsubishi Motors Nerima

1,240

1,251

1,390

0.2

Mitsubishi Motors Kawasaki

950

959

1,140

0.1

Mitsubishi Motors Takaido

850

859

906

0.1

Mitsubishi Motors Katsushika

800

808

880

0.1

Mitsubishi Motors Higashikurume

800

808

872

0.1

Mitsubishi Motors Setagaya

770

779

845

0.1

Mitsubishi Motors Suginami

740

748

849

0.1

- 44 -

EstateThe Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
Institute
Daiwa Real EstateAppraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Japan Valuers Co.,Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
Institute
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
Institute
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
Institute
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Japan Real Estate
InstituteJapan Real Estate
InstituteJapan Real Estate
Institute
The Tanizawa Sogo
Appraisal Co., Ltd.

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Use

Area

Property nameAcquisition price Carrying amount(Millions of Yen) (Millions of Yen)
(Note 1)
(Note 2)

Opinion of value
Investment
at end of period
share(Millions of Yen)(%)
(Note 3) (Note 4)

Appraiser

Mitsubishi Motors Sekimachi

600

606

661

0.1

Japan Real Estate InstituteMitsubishi Motors Higashiyamato

450

455

499

0.1

The
Tanizawa
Appraisal Co., Ltd.

Mitsubishi Motors Motosumiyoshi

370

375

383

0.0

Japan Real Estate InstituteMitsubishi Motors Kawagoe

350

355

371

0.0

Mitsubishi Motors Edogawa

200

204

213

0.0

Mitsubishi Motors Sayama

160

163

171

0.0

NRE Kichijoji Building

5,310

5,316

5,560

0.7

GEMS Ichigaya

2,080

2,107

2,140

0.3

The
Tanizawa
Sogo
Appraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
The
Tanizawa
Sogo
Appraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.

Universal CityWalk Osaka

15,50015,80817,300

2.1

Japan Valuers Co., Ltd.

Izumiya Senrioka

8,930

8,665

10,900

1.3

Merad Owada

6,640

6,551

7,380

0.9

Izumiya Yao

4,406

4,221

5,200

0.6

Izumiya Obayashi

3,020

3,178

3,710

0.4

Ichibancho stear

4,700

4,619

5,610

0.7

EQUINIA Aobadori

1,640

1,514

1,920

0.2

Retail subtotal

140,153

141,628

158,380

19.0

Landport Urayasu

17,40016,815

20,1002.4

Landport Itabashi

15,71015,251

18,000

2.2

The
Tanizawa
Appraisal Co., Ltd.
The
Tanizawa
Appraisal Co., Ltd.

Landport Kawagoe

13,70012,97015,700

1.9

Japan Real Estate InstituteLandport Atsugi

11,41010,746

11,700

1.4

Sagamihara Tana Logistics Center

10,600

10,488

11,900

1.4

The
Tanizawa
Sogo
Appraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.

Sagamihara Onodai Logistics Center

8,700

8,301

10,200

1.2

Japan Real Estate InstituteLandport Hachioji

8,250

7,878

9,350

1.1

Japan Real Estate InstituteGreater Landport Kasukabe
Tokyo area

7,340

6,902

8,550

1.0

Japan Real Estate InstituteFunabashi Logistics Center

4,660

4,619

5,440

0.7

Japan Real Estate InstituteAtsugi Minami Logistics Center B Tower

4,590

4,453

5,260

0.6

Hanyu Logistics Center

3,810

3,568

4,210

0.5

Kawaguchi Logistics Center B Tower

3,750

3,684

4,410

0.5

Kawaguchi Logistics Center A Tower

2,830

2,804

3,330

0.4

Atsugi Minami Logistics Center A Tower

2,690

2,638

3,220

0.4

Kawaguchi Ryoke Logistics Center

10,79010,79911,900

1.4

Ota Nitta Logistics Center

3,430

3,159

3,760

0.5

Ota Higashishinmachi Logistics Center

2,170

2,005

2,460

0.3

Ota Kiyohara Logistics Center

650

590

728

0.1

Chiyodamachi Logistics Center

330

316

368

0.0

Hirakata Kuzuha Logistics Center

3,460

3,497

3,770

0.4

136,270

131,493

156,317

18.7

Other
areas

Logistics

Other
areas

Logistics subtotal- 45 -Sogo

The
Tanizawa
Sogo
Appraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
The
Tanizawa
Sogo
Appraisal Co., Ltd.
The
Tanizawa
Sogo
Appraisal Co., Ltd.
The
Tanizawa
Sogo
Appraisal Co., Ltd.
The
Tanizawa
Sogo
Appraisal Co., Ltd.
Sogo
Sogo

The
Tanizawa
Sogo
Appraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
The
Tanizawa
Sogo
Appraisal Co., Ltd.
Morii
Appraisal&
Investment Consulting,
Inc.
Daiwa
Real
EstateAppraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.
Daiwa
Real
EstateAppraisal Co., Ltd.

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Use

Area

Property name

3,369

3,380

0.4

PROUD FLAT Yoyogi Uehara

989

995

1,040

0.1

PROUD FLAT Hatsudai

713

708

746

0.1

PROUD FLAT Shibuya Sakuragaoka

750

742

679

0.1

PROUD FLAT Gakugei Daigaku

746

738

777

0.1

PROUD FLAT Meguro Gyoninzaka

939

931

985

0.1

PROUD FLAT Sumida Riverside

2,280

2,248

2,410

0.3

PROUD FLAT Kagurazaka

1,590

1,571

1,690

0.2

PROUD FLAT Waseda

1,110

1,096

1,170

0.1

947

936

912

0.1

PROUD FLAT Sangen Jaya

1,190

1,174

1,230

0.1

PROUD FLAT Kamata

1,160

1,141

1,200

0.1

PROUD FLAT Kamata II

3,320

3,274

3,160

0.4

PROUD FLAT Shinotsuka

623

613

546

0.1

PROUD FLAT Kiyosumi Shirakawa

928

914

968

0.1

PROUD FLAT Monzen Nakacho II

652

643

591

0.1

PROUD FLAT Monzen Nakacho I

1,030

1,014

930

0.1

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co.
Daiwa Real EstateAppraisal Co.
Daiwa Real EstateAppraisal Co.

PROUD FLAT Fujimidai

1,470

1,452

1,550

0.2

Japan Real Estate Institute

PROUD FLAT Asakusa Komagata

1,920

1,888

2,000

0.2

PROUD FLAT Yokohama

2,090

2,058

2,130

0.3

PROUD FLAT Kamioooka

2,710

2,668

2,590

0.3

The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PROUD FLAT Tsurumi II

1,650

1,624

1,690

0.2

Japan Real Estate Institute

PRIME URBAN Azabu Juban

1,100

1,099

1,120

0.1

PRIME URBAN Akasaka

938

935

942

0.1

PRIME URBAN Tamachi

972

965

995

0.1

Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.

1,830

1,809

1,880

0.2

Japan Valuers Co., Ltd.

PRIME URBAN Yoyogi

359

355

362

0.0

Chuo Real EstateAppraisal Co., Ltd.

PRIME URBAN Ebisu II

1,140

1,135

1,200

0.1

Japan Real Estate Institute

PRIME URBAN Bancho

1,090

1,084

1,070

0.1

679

673

685

0.1

PRIME URBAN Iidabashi

2,040

2,021

1,970

0.2

PRIME URBAN Ebisu

1,260

1,254

1,270

0.2

PRIME URBAN Naka Meguro

1,410

1,402

1,420

0.2

PRIME URBAN Gakugei Daigaku

775

767

804

0.1

PRIME URBAN Senzoku

474

469

484

0.1

PRIME URBAN Meguro Riverside

414

408

433

0.1

Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Meguro Ohashi Hills

2,970

2,942

2,960

0.4

Japan Valuers Co., Ltd.

PRIME URBAN Meguro Aobadai

1,310

1,301

1,360

0.2

Japan Real Estate Institute

PRIME URBAN Gakugei Daigaku II

1,080

1,072

1,120

0.1

Japan Real Estate Institute

PROUD FLAT Shinjuku Kawadacho

GreaterTokyo area

PRIME URBAN Shibaura LOFTPRIME URBAN Chiyoda Fujimi

Greater
Residential
Tokyo area

Appraiser

3,400

PROUD FLAT Shirokane Takanawa

Residential

Opinion of value Investment
Acquisition price Carrying amountat end of period
share(Millions of Yen) (Millions of Yen)
(Millions of Yen)(%)
(Note 1)
(Note 2)
(Note 3) (Note 4)- 46 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Use

Area

Opinion of value Investment
Acquisition price Carrying amountat end of period
share(Millions of Yen) (Millions of Yen)
(Millions of Yen)(%)
(Note 1)
(Note 2)
(Note 3) (Note 4)

Property namePRIME URBAN Naka Meguro II

2,850

2,846

2,880

0.3

PRIME URBAN Kachidoki

2,570

2,577

2,610

0.3

Japan
Real
EstateInstitute
Chuo Real EstateAppraisal Co., Ltd.

PRIME URBAN Shinkawa

2,100

2,091

2,200

0.3

Japan Valuers Co., Ltd.

4,220

4,166

4,280

0.5

Japan Valuers Co., Ltd.

1,550

1,537

1,620

0.2

Japan Real Estate Institute

PRIME URBAN Hongo Ikizaka

557

550

577

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Hakusan

866

853

911

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Yotsuya Gaien Higashi

1,490

1,486

1,550

0.2

PRIME URBAN Nishi Shinjuku I

1,090

1,084

1,130

0.1

PRIME URBAN Nishi Shinjuku II

885

873

923

0.1

PRIME URBAN Shinjuku Naitomachi

430

426

449

0.1

PRIME URBAN Nishi Waseda

421

415

440

0.1

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
The Tanizawa Sogo
Appraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Shinjuku Ochiai

594

593

617

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Mejiro

1,430

1,424

1,460

0.2

Japan Real Estate Institute

PRIME URBANKagurazaka

2,900

2,870

2,940

0.4

Japan Real Estate Institute

PRIME URBAN Sangen Jaya III

718

716

745

0.1

PRIME URBAN Chitose Karasuyama

717

721

746

0.1

PRIME URBAN Sangen Jaya

724

716

756

0.1

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Minami Karasuyama

667

659

695

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Karasuyama Galleria

549

542

564

0.1

PRIME URBAN Karasuyama Court

338

335

351

0.0

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Chitose Funabashi

746

737

695

0.1

Japan Valuers Co., Ltd.

1,390

1,376

1,460

0.2

Japan Real Estate Institute

494

496

515

0.1

PRIME URBAN Osaki

1,860

1,850

1,930

0.2

PRIME URBAN Oimachi II

1,040

1,047

1,090

0.1

PRIME URBAN Yukigaya

951

949

970

0.1

PRIME URBAN Omori

905

893

940

0.1

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Denenchofu Minami

774

763

704

0.1

Japan Valuers Co., Ltd.

PRIME URBANNagahara Kamiikedai

1,720

1,707

1,730

0.2

Japan Real Estate Institute

PRIME URBAN Nakano Kamitakada

498

491

521

0.1

Japan Valuers Co., Ltd.

1,060

1,057

1,100

0.1

PRIME URBAN Nishi Ogikubo

414

410

415

0.0

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Nishi Ogikubo II

1,790

1,780

1,810

0.2

Japan Real Estate Institute

PRIME URBAN Otsuka

730

722

756

0.1

PRIME URBAN Komagome

437

435

447

0.1

Daiwa Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.

PRIME URBAN Ikebukuro

3,800

3,760

3,850

0.5

Japan Real Estate Institute

PRIME URBAN Monzen Nakacho

2,420

2,395

2,470

0.3

PRIME URBAN Kameido

779

766

795

0.1

PRIME URBAN Sumiyoshi

632

623

639

0.1

PRIME URBAN Mukojima

528

523

536

0.1

PRIME
URBAN
Yokoyamacho

Nihonbashi

PRIME URBANNihonbashi Hamacho

Residential

GreaterTokyo area

PRIME URBAN Yoga
PRIME URBAN Shinagawa Nishi

PRIME URBAN Takaido

Residential

GreaterAppraiser- 47 -

Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Use

Area
Tokyo area

Opinion of value Investment
Acquisition price Carrying amountat end of period
share(Millions of Yen) (Millions of Yen)
(Millions of Yen)(%)
(Note 1)
(Note 2)
(Note 3) (Note 4)

Property namePRIME URBAN Kinshi Koen

1,290

1,270

1,310

0.2

PRIME URBAN Kinshicho

758

748

774

0.1

PRIME URBAN Hirai

722

710

739

0.1

PRIME URBAN Kasai

640

631

642

0.1

PRIME URBAN Kasai II

981

965

989

0.1

PRIME URBAN Kasai East

1,140

1,123

1,180

0.1

Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Chuo Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Itabashi Kuyakushomae

1,080

1,063

1,120

0.1

Japan Valuers Co., Ltd.

384

386

293

0.0

Chuo Real EstateAppraisal Co., Ltd.

PRIME URBAN Machiya South Court

1,910

1,899

1,980

0.2

Japan Real Estate Institute

PRIME URBAN Musashi Koganei

1,910

1,913

1,940

0.2

Japan Valuers Co., Ltd.

PRIME URBAN Musashino Hills

1,280

1,279

1,310

0.2

Japan Valuers Co., Ltd.

PRIME URBAN Koganei Honcho

791

783

823

0.1

Japan Valuers Co., Ltd.

1,520

1,491

1,530

0.2

Japan Real Estate Institute

1,940

1,933

2,050

0.2

Japan Valuers Co., Ltd.

962

956

1,000

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Shinyurigaoka

1,020

1,005

1,130

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Tsurumi Teraya

493

489

496

0.1

Japan Real Estate Institute

PRIME URBAN Urayasu

804

795

826

0.1

Japan Real Estate Institute

PRIME URBAN Gyotoku I

633

625

538

0.1

Japan Real Estate Institute

PRIME URBAN Gyotoku II

730

721

750

0.1

Japan Real Estate Institute

PRIME URBAN Gyotoku Ekimae

488

481

490

0.1

Japan Real Estate Institute

PRIME URBAN Gyotoku Ekimae II

469

464

470

0.1

Japan Real Estate Institute

PRIME URBAN Gyotoku III

747

740

749

0.1

Japan Real Estate Institute

PRIME URBAN Nishi Funabashi

761

747

772

0.1

Japan Real Estate Institute

PRIME URBAN Kawaguchi

1,580

1,562

1,650

0.2

Japan Valuers Co., Ltd.

PROUD FLAT Hatchobori

920

955

955

0.1

Japan Real Estate Institute

PROUD FLAT Itabashi Honcho

720

757

758

0.1

Japan Real Estate Institute

PRIME URBAN Meguro Mita

1,058

1,135

1,110

0.1

Japan Valuers Co., Ltd.

PROUD FLAT Itsutsubashi

652

637

682

0.1

Daiwa Real EstateAppraisal Co., Ltd.

PROUD FLAT Kawaramachi

735

717

676

0.1

Japan Real Estate Institute

PROUD FLAT Shin Osaka

1,620

1,585

1,630

0.2

Japan Real Estate Institute

PRIME URBAN Kita Juyo Jo

274

269

271

0.0

The Tanizawa Sogo
Appraisal Co., Ltd.

PRIME URBAN Odori Koen I

502

493

511

0.1

Japan Real Estate Institute

PRIME URBAN Odori Koen II

334

328

340

0.0

Japan Real Estate Institute

PRIME URBAN Kita Juichi Jo

547

535

564

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Miyanosawa

475

463

488

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Odori Higashi

394

386

409

0.0

Japan Valuers Co., Ltd.

PRIME URBAN Chiji Kokan

249

243

260

0.0

Japan Valuers Co., Ltd.

PRIME URBAN Maruyama

229

224

234

0.0

Japan Valuers Co., Ltd.

PRIME URBAN Kita Nijuyo Jo

437

427

451

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Sapporo Idaimae

616

603

630

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Sapporo Riverfront

4,480

4,393

4,640

0.6

Japan Valuers Co., Ltd.

PRIME URBAN Kita Sanjo Dori

1,730

1,692

1,830

0.2

Japan Valuers Co., Ltd.

PRIME URBAN Asakusa

PRIME URBAN Kumegawa
PRIME
comodoURBAN

Musashi

Kosugi

PRIME URBAN Kawasaki

Other areas

Residential Other areas

Appraiser- 48 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Use

Area

Property name

Opinion of value Investment
Acquisition price Carrying amountat end of period
share(Millions of Yen) (Millions of Yen)
(Millions of Yen)(%)
(Note 1)
(Note 2)
(Note 3) (Note 4)
1,140

1,119

1,030

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Yaotome Chuo

466

462

424

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Tsutsumidori Amamiya

949

956

896

0.1

Japan Real Estate Institute

PRIME URBAN Aoi

712

702

724

0.1

Chuo Real EstateAppraisal Co., Ltd.

PRIME URBAN Kanayama

553

541

582

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Tsurumai

1,020

997

1,070

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Kamimaezu

1,590

1,561

1,650

0.2

Japan Valuers Co., Ltd.

PRIME URBAN Izumi

3,770

3,704

3,940

0.5

Japan Valuers Co., Ltd.

PRIME URBAN Esaka I

652

640

661

0.1

PRIME URBAN Esaka II

794

778

817

0.1

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Esaka III

1,190

1,166

1,190

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Tamatsukuri

1,020

1,004

1,050

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Sakaisuji Honmachi

1,810

1,777

1,820

0.2

Japan Real Estate Institute

PRIME URBAN Hakata

588

577

602

0.1

PRIME URBAN Yakuin Minami

265

259

275

0.0

PRIME URBAN Kashii

398

388

330

0.0

PRIME URBAN Hakata Higashi

622

608

522

0.1

PRIME URBAN Chihaya

604

594

553

0.1

Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.
Daiwa Real EstateAppraisal Co., Ltd.

PRIME URBAN Chikusa

1,110

1,200

1,130

0.1

Japan Valuers Co., Ltd.

PRIME URBAN Nagamachi Icchome

Greater
Other
Tokyo area

Residential subtotal

162,940

161,470

165,522

19.8

Ryotokuji University Shin-Urayasu
Campus (Land)

4,900

5,125

5,090

0.6

Other subtotal

4,900

5,125

5,090

0.6

784,607782,457

834,749

100.0

Total
(Note 1)

Appraiser

Japan Real Estate Institute“Acquisition price” indicates the amount excluding the various expenses required to acquire the properties, including transaction brokerage fee, taxes andpublic dues, etc. (the amount of transaction payment of real estate, etc. described in the sales agreement), for the Succeeded Assets (from the former
NMF) and Assets Acquired After Merger. For the Succeeded Assets (from NOF and NRF), except for those described in Note 2, since there is no
significant decline in occupancy rate or other conditions that will affect the appraisal values from the reference date, the figures are determined using theappraisal values as of the end of April 2015 for assets succeeded from NOF and the appraisal values as of the end of May 2015 for the assets succeededfrom NRF. Furthermore, the figures indicated are unaudited figures.

(Note 2)“Acquisition price” of the following assets indicates appraisal values as of the end of September 2015.
NRE Shibuya Dogenzaka Building, PRIME URBAN Shinyurigaoka(Note 3)“Carrying amount” is the sum total amount of the acquisition price (including various expenses required for the acquisition) of land, buildings, structures,
tools, furniture and fixtures, construction in progress, and leasehold rights (including these assets in trust), less accumulated depreciation.

(Note 4)

“Opinion of value at end of period” is the appraisal or investigation value provided by the respective real estate appraiser (the value calculated by therespective real estate appraiser with the date of the 2nd fiscal period-end (August 31, 2016) as the effective date of value and the value indicated by the
income approach as a standard) in accordance with NMF’s Articles of Incorporation and the Regulations Concerning Accounting of Investment
Corporations.
The appraisal or investigation value of real estate is no more than an indication of the opinion of the value of the appraised real estate at the time ofappraisal by the respective real estate appraiser, etc., conducted in accordance with the Act on Real Estate Appraisal (Act No. 152 of 1963, including
subsequent amendments), and real estate appraisal standards, etc. Reappraisal of the same real estate may result in a different appraisal or investigation
value, depending on the real estate appraiser conducting the appraisal and the method or timing of the appraisal. In addition, the appraisal of real estate is
not a guarantee or promise of the possibility of transactions at present or in the future at the appraised value.
Furthermore, the cost approach and income approach (direct capitalization approach and discounted cash flow approach) are used in appraisal
calculations. The appraisal value is determined by the income approach if the subject real estate’s price is estimated with an emphasis on investment
profitability in the market and it is seen as an investment target for qualified institutional investors, etc. The value indicated by the cost approach is used as
an index to verify the value indicated by the income approach.
The “direct capitalization approach” is a method where the net revenue in a certain period is capitalized by the capitalization rate. It is a method ofseeking the value indicated by the income approach (a method of seeking the estimated value of real estate by seeking the sum of the present value ofthe net revenue the real estate is expected to generate in the future).

- 49 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

The “discounted cash flow (DCF) approach” is a method where the net income and terminal value arising in multiple successive periods are
discounted to present value according to their periods and totaled. It is also a method of seeking the value indicated by the income approach.
(Note 5)“Investment share” is the period-end opinion of value of the respective asset as a percentage of the total amount of the period-end opinion of value ofthe entire portfolio (252 properties in total). The figures are rounded to the first decimal place. Accordingly, the sum total may be exactly 100.0.

(Note 6)

NMF have transferred quasi co-ownership of 49% of beneficial interest in real estate trust on May 17, 2016. For the acquisition price in the table above,
original acquisition price multipled by quasi co-ownership interest ratio (51%) which NMF owns at the end of the 2nd period is stated (rounded off tomillion yen). Furthermore, price of this quasi co-ownership interest ratio (51%) is stated for opinion of value and carrying price.

(Note 7)

Property names were changed on September 1, 2016 for the following properties.
Old name

New name(Before change)(After change)

NOF Shinjuku Minamiguchi Building

NMF Shinjuku Minamiguchi Building

NOF Shibuya Koen-dori Building

NMF Shibuya Koen-dori Building

NOF Shiba Building

NMF Shiba Building

NOF Surugadai Plaza Building

NMF Surugadai Building

Otemachi Tatemono Gotanda Building

NMF Gotanda Ekimae Building

NOF Kanda Iwamotocho Building

NMF Kanda Iwamotocho Building

NOF Takanawa Building

NMF Takanawa Building

NOF Kichijoji Honcho Building

NMF Kichijoji Honcho Building

NOF Kawasaki Higashiguchi Building

NMF Kawasaki Higashiguchi Building

NOF Yokohama Nishiguchi Building

NMF Yokohama Nishiguchi Building

NOF Shin-Yokohama Building

NMF Shin-Yokohama Building

NOF Sendai Aoba-dori Building

NMF Sendai Aoba-dori Building

NOF Nagoya Fushimi Building

NMF Nagoya Fushimi Building

NOF Nagoya Yanagibashi Building

NMF Nagoya Yanagibashi Building

NOF Hakata Ekimae Building

NMF Hakata Ekimae Building

NOF Tenjin-Minami Building

NMF Tenjin-Minami Building- 50 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

C. Status of Capital Expenditures(i)

Schedule of Capital Expenditures
Of the scheduled amount of capital expenditures associated with renovation and other work planned (orcompleted) as of the date of this document’s publication for the assets held at the end of the 2nd fiscal
period, the following are the major capital expenditures. Please note that the scheduled construction
amounts listed below include the portion charged to expenses in accounting.

Name of real estate, etc.
(Location)

Scheduled construction amount(Thousands Yen)
Total
AmountTotalamountpaid during
amountalready
periodpaid

PurposeScheduled period

Shinjuku Nomura Building(Shinjuku-ku, Tokyo)

Renewal of central monitoring
panel

From Jul. 2014
To Oct. 2017345,690

73,897 113,812

Shinjuku Nomura Building(Shinjuku-ku, Tokyo)

Long-period earthquake groundmotioncountermeasuresconstruction

From Jan. 2015
To Sep. 2016

976,225

325,650 325,650

Morisia Tsudanuma（Narashino-shi, Chiba）

Renewal of office section
air-conditioning system

From Dec. 2016
To Feb. 2018

390,400--(ii) Capital Expenditures During the Fiscal Period

The following is an overview of the major construction work falling under the category of capital
expenditures that was conducted during the 2nd fiscal period for the assets held as of the end of the 2nd
fiscal period. Capital expenditures during the 2nd fiscal period were ¥3,212,422 thousand and, whencombined with the ¥1,581,098 thousand repair expenses charged to expenses during the 2nd fiscal
period, a total of ¥4,793,520 thousand in construction was implemented.

Name of real estate, etc.
(Location)

PurposeConstruction period

Construction amount(Thousands of Yen)

NOF
Utsunomiya
Building Renewal of air conditioners throughout( Utsunomiya-shi, Tochigi)
the building

From Nov. 2015
To Apr. 2016

186,813

Kawasaki More’s(Kawasaki-shi, Kanagawa)Renewal of air-conditioning system

From Oct. 2015
To Mar. 2016

119,932

Kawasaki More’s(Kawasaki-shi, Kanagawa)Renewal of power receiving
transforming equipment

From Jul. 2015
To Jun. 2016

105,930

Shinjuku Nomura Building(Shinjuku-ku, Tokyo)

Renewal of a gondola

From Jul. 2015
To Mar.. 2016

104,347

Other properties

Improvement of features

From Mar. 2016
To Aug. 2016

2,695,397

Total

and

3,212,422- 51 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016(iii) Cash Reserved for Long-Term Repair Plans (Reserve for Repairs)
Based on long-term repair plans formed for each property, NMF sets aside cash reserves to provide
for medium- to long-term future large-scale repairs and similar expenses from cash flows during theperiod.
Millions of Yen

1st fiscal period
from Oct. 1, 2015
to Feb. 29, 2016

2nd fiscal period
from Mar. 1, 2016
to Aug. 31, 2016

6,070

6,647

1,123

2,753

547

2,934

6,647

6,466

Reserve for the beginningof the period
Reserve for the current
fiscal period
Reversal of reserve forthe current fiscal period
Reserve brought forward

D. Status of Major Tenants
Details concerning the leasing status of major tenants are shown below. Major tenants are those who, as ofAugust 31, 2016, account for 10% or more of the total leased area of the assets held by NMF as of August
31, 2016 (in cases where multiple assets have the same tenant, this is calculated using the total leased area for
all assets leased by said tenant).
Tenant nameBusiness
type

Property name

Annual rent(m2)(Millions of Yen)

(Note 1)

(Note 2)security deposits(Millions of Yen)
(Note 3)

March 31, 2018

1,021.25

117

189

NRE Yotsubashi Building

March 31, 2018

1,024.90

52

35

March 1, 2017

4,510.35

212

35

PROUD FLAT Shirokane Takanawa

February 28, 20172,874.63

180

38

PROUD FLAT Yoyogi Uehara

February 28, 2017

1,127.51

57

7

PROUD FLAT HatsudaiFebruary 28, 2017

913.0844

4PROUD FLAT Shibuya Sakuragaoka

February 28, 2017638.7041

5PROUD FLAT Gakugei Daigaku

February 28, 2017912.7947

6

PROUD FLAT Meguro Gyoninzaka

February 28, 2017788.91

48

6

PROUD FLAT Sumida Riverside

February 28, 2017

3,005.62

144

16

PROUD FLAT Kagurazaka

February 28, 2017

1,793.43

93

3

PROUD FLAT Waseda

February 28, 2017

1,409.84

67

7

PROUD FLAT Shinjuku Kawadacho

February 28, 2017

1,081.76

55

9

PROUD FLAT Sangen Jaya

February 28, 2017

1,251.59

67

7

PROUD FLAT Kamata

February 28, 2017

1,434.36

68

8

PROUD FLAT Kamata II

February 28, 2017

3,914.31

197

25

PROUD FLAT Shinotsuka

February 28, 2017

730.85

38

3

PROUD FLAT Kiyosumi Shirakawa

February 28, 2017

1,209.56

59

10

PROUD FLAT Monzen Nakacho II

February 28, 2017809.9939

5

PROUD FLAT Monzen Nakacho I

February 28, 2017

1,148.74

61

8

PROUD FLAT Fujimidai

February 28, 2017

2,222.05

110

14

PROUD FLAT Asakusa

February 28, 2017

2,583.15

118

17

PROUD FLAT Yokohama

February 28, 2017

2,968.95

134

17

PROUD FLAT Kamioooka

February 28, 2017

4,872.17

182

15

PROUD FLAT Tsurumi II

February 28, 2017

2,184.12

110

21

PRIME URBAN Azabu Juban

February 28, 2017

1,189.33

64

7

PRIME URBAN Akasaka

February 28, 2017974.0750

5PRIME URBAN Tamachi

February 28, 2017

1,084.56

59

7

PRIME URBAN Shibaura

February 28, 2017

1,905.39

113

10(Residential building)RealestateRealestatedate

Leasehold andLeased area

Shinjuku Nomura Building

Kojimachi Millennium Garden

Nomura Real
Estate Partners
Co., Ltd. (Note4)
Nomura Real
Estate Partners
Co., Ltd.
（Note 3)Contract termination- 52 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Nomura Real
Estate Partners
Co., Ltd.
（Note 3)Real
estatePRIME URBAN Yoyogi

February 28, 2017439.5623

2

PRIME URBAN Ebisu II

February 28, 2017

1,123.00

65

6

PRIME URBAN Bancho

February 28, 2017

1,231.68

63

7

PRIME URBAN Chiyoda Fujimi

February 28, 2017793.8741

5PRIME URBAN Iidabashi

February 28, 2017

2,043.01

117

17

PRIME URBAN Ebisu

February 28, 2017

1,396.04

65

7

PRIME URBAN Naka Meguro

February 28, 2017

1,169.52

70

9PRIME URBAN Gakugei Daigaku

February 28, 2017986.3947

5PRIME URBAN Senzoku

February 28, 2017

620.1228

3PRIME URBAN Meguro Riverside

February 28, 2017435.4926

3PRIME URBAN Meguro Ohashi Hills

February 28, 2017

2,841.49

159

16

PRIME URBAN Meguro Aobadai

February 28, 2017

1,430.78

73

12

PRIME URBAN Gakugei Daigaku II

February 28, 2017

1,061.99

58

11

PRIME URBAN Naka Meguro II

February 28, 2017

2,247.30

145

36

PRIME URBAN Kachidoki

February 28, 2017

4,356.36

176

20

PRIME URBAN Shinkawa

February 28, 2017

3,421.91

123

41

PRIME URBAN Nihonbashi Yokoyamacho

February 28, 2017

5,741.80

239

40

PRIME URBAN Nihonbashi Hamacho

February 28, 2017

1,994.76

92

10

PRIME URBAN Hongo Ikizaka

February 28, 2017662.5833

4PRIME URBAN Hakusan

February 28, 2017

1,069.82

51

5

PRIME URBAN Yotsuya Gaien Higashi

February 28, 2017

1,698.69

85

9PRIME URBAN Nishi Shinjuku I

February 28, 2017

1,436.27

72

7

PRIME URBAN Nishi Shinjuku II

February 28, 2017

1,114.55

53

6

PRIME URBAN Shinjuku Naitomachi

February 28, 2017578.1826

3PRIME URBAN Nishi Waseda

February 28, 2017

488.6527

2

PRIME URBAN Shinjuku Ochiai

February 28, 2017

1,027.45

40

4

PRIME URBAN Mejiro

February 28, 2017

1,703.96

84

6

PRIME URBAN Kagurazaka

February 28, 2017

2,813.47

160

23

PRIME URBAN Sangen Jaya III

February 28, 2017

1,001.34

47

4

PRIME URBAN Chitose Karasuyama

February 28, 2017

1,722.72

49

10

PRIME URBAN Sangen Jaya

February 28, 2017848.7544

5PRIME URBAN Minami Karasuyama

February 28, 2017

1,024.62

45

4

PRIME URBAN Karasuyama Galleria

February 28, 2017784.9236

3

PRIME URBAN Karasuyama Court

February 28, 2017576.2024

2PRIME URBAN Chitose Funabashi

February 28, 2017

1,001.28

45

5

PRIME URBAN Yoga

February 28, 2017

1,648.93

77

9

PRIME URBAN Shinagawa Nishi

February 28, 2017941.5441

8

PRIME URBAN Osaki

February 28, 2017

2,000.20

105

11

PRIME URBAN Oimachi II

February 28, 2017

1,778.84

90

7

PRIME URBAN Yukigaya

February 28, 2017

1,470.03

68

8

PRIME URBAN Omori

February 28, 2017

1,146.60

55

7

PRIME URBAN Denenchofu Minami

February 28, 2017

1,047.31

46

5

PRIME URBAN Nagahara Kamiikedai

February 28, 2017

2,155.37

93

11

PRIME URBAN Nakano Kamitakada

February 28, 2017818.7537

3

PRIME URBAN Takaido

February 28, 2017

1,730.19

79

5

PRIME URBAN Nishi Ogikubo

February 28, 2017521.7725

3PRIME URBAN Nishi Ogikubo II

February 28, 2017

2,154.13

95

11

PRIME URBAN Otsuka

February 28, 2017944.9947

5PRIME URBAN Komagome

February 28, 2017939.1633

5PRIME URBAN Ikebukuro

February 28, 2017

4,245.48

209

21

PRIME URBAN Monzen Nakacho

February 28, 2017

3,047.39

141

19- 53 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

Nomura Real
Estate Partners
Co., Ltd.
（Note 3)PRIME URBAN Kameido

February 28, 2017

1,095.08

49

7

PRIME URBAN Sumiyoshi

February 28, 2017753.0135

5PRIME URBAN Mukojima

February 28, 2017

1,068.61

41

2

PRIME URBAN Kinshi Koen

February 28, 2017

1,837.20

80

9PRIME URBAN Kinshicho

February 28, 2017991.6246

8PRIME URBAN Hirai

February 28, 2017

1,075.25

46

6

PRIME URBAN Kasai

February 28, 2017865.6037

4PRIME URBAN Kasai II

February 28, 2017

1,416.70

61

8

PRIME URBAN Kasai East

February 28, 2017

1,884.62

75

7

PRIME URBAN Itabashi Kuyakushomae

February 28, 2017

1,720.47

72

6

PRIME URBAN Asakusa

February 28, 2017838.6028

3PRIME URBAN Machiya South Court

February 28, 2017

3,950.12

13536

PRIME URBAN Musashi Koganei

February 28, 2017

5,559.70

128

14

PRIME URBAN Musashino Hills

February 28, 2017

2,908.86

88

17

PRIME URBAN Koganei Honcho

February 28, 2017

1,517.04

53

7

Real

PRIME URBAN Kumegawa

February 28, 2017

2,565.09

107

36

estatePRIME URBAN Musashi Kosugi comodo

February 28, 2017

3,692.44

134

29

PRIME URBAN Kawasaki

February 28, 2017

1,633.75

66

7

PRIME URBAN Shinyurigaoka

February 28, 2017

1,708.19

70

11

PRIME URBAN Tsurumi Teraya

February 28, 2017913.2936

4PRIME URBAN Urayasu

February 28, 2017

1,243.47

53

8

PRIME URBAN Gyotoku I

February 28, 2017

1,129.24

42

5

PRIME URBAN Gyotoku II

February 28, 2017

1,244.00

47

4

PRIME URBAN Gyotoku Ekimae

February 28, 2017736.1931

4PRIME URBAN Gyotoku Ekimae II

February 28, 2017927.3340

5PRIME URBAN Gyotoku III

February 28, 2017

1,720.65

62

7

PRIME URBAN Nishi Funabashi

February 28, 2017

1,196.54

51

7

PRIME URBAN Kawaguchi

February 28, 2017

2,436.25

108

27

PROUD FLAT Hatchobori

February 28, 2017992.75

54

6

PROUD FLAT Itabashi Honcho

February 28, 2017

1,109.90

44

6

PRIME URBAN Meguro Mita

February 28, 2018

1,022.6550

5-

182,819.37

8,423

1,096

Total
(Note 1)In the case of assets with a so-called pass-through master lease agreement, where the rent received from the lessee in the master lease agreement is thesame amount as the rent that the lessee receives from the end-tenant, the end-tenant is shown as the tenant, and the lessee is not shown as a tenant.
However, for residential facilities, the master lessee is shown as the tenant, and the leased area shown is that that actually rented and subject to thetenant agreements with end tenants. “Tenant name” is not disclosed for some tenants, due to unavoidable circumstances.

(Note 2)

“Annual rent” is calculated by multiplying by 12 the sum of monthly rent and common area charges in lease agreements for each property actuallyconcluded with end-tenants that are valid as of the last day of August 2016 (this does not include parking space or other fees stated in parking spacelease agreements or other such agreements signed in addition to the tenant lease agreement. If common-use space, etc. is leased based on the leaseagreement, the rent for such is included, and if rent includes an amount equivalent to the fee for use of parking space, such amount is included. In
addition, if the master lessee has a rent-guaranteed master lease, the rent for the space covered in said lease is based on the rent, etc., in the leaseagreement concluded with the master lessee.); amounts less than one thousand yen are truncated. Accordingly, the sum of each tenant’s annual rent
may not be exactly the same as the figure given the “Total” row. Furthermore, regarding tenants who have been exempt from rent payment for acertain period of time in their agreements, such exemption period is not considered in the table above.

(Note 3)For residential facilities, the lessee of the master lease agreement shown in the “Tenant name” column receives leasehold and security deposits fromthe end-tenants and deposits this amount with NMF or the trustee as the leasehold and security deposits of the master lease agreement.

(Note 4)This client is an interested party of NMF as specified in the Investment Trust Act- 54 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

E. Top 10 Tenants by Leased Area
The following are the top ten tenants of the assets held at the end of the 2nd fiscal period by leased area
as ranked when a tenant’s leased area is expressed as a percentage of the sum total of the leased area ofthe entire portfolio as at August 31, 2016.
Tenant nameNo.

1

(Note 1)

Nomura Real Estate Partners Co., Ltd.

Total leased
Use

Property name

OfficeShinjuku Nomura Building

OfficeNRE Yotsubashi Building

Residential

Share

area

(%)

(m2)

(Note 2)

182,819.37

11.1

92,389.48

5.6

67,729.59

4.1

Total of PROUD FLAT Shirogane-Takanawa,
and 108 others
Landport Urayasu

2

Fukuyama Transporting Co., Ltd..

Logistics

3

Nippon Express Co., Ltd.

Logistics

4

Amazon Japan Logistics K.K.

Logistics

Landport Kawagoe

56,453.36

3.4

5

Neovia Logistics Services, LLC

Logistics

Sagamihara Tana Logistics Center

50,450.00

3.1

6

Yokohama Okadaya Co., Ltd.

Retail

48,193.96

2.9

7

Mitsui-Soko Logistics Co., Ltd.

Logistics

Ota Nitta Logistics Center

42,328.00

2.6

8ASKUL Corporation

Logistics

Landport Itabashi

37,276.71

2.3

9

H2O Asset Management Co., Ltd.

Retail36,113.48

2.2

10

Not disclosed

Retail

35,432.72

2.2649,186.67

39.6

Sagamihara Onodai Logistics Center
Hanyu Logistics Center

Kawaguchi Ryoke Logistics Center

Yokosuka More’s City
Kawasaki More’s

Izumiya Senrioka
Izumiya Obayashi
Mitsubishi Motors Meguro and 15 other properties

Total for top 10 tenants(Note 1)In the case of assets with a so-called pass-through master lease agreement, where the rent received from the lessee in the master lease agreement is
the same amount as the rent that the lessee receives from the end-tenant, the end-tenant is shown as the tenant, and the lessee is not shown as atenant. However, for residential facilities, the master lessee is shown as the tenant, and the leased area shown is that that actually rented and subject
to the tenant agreements with end tenants. “Tenant name” is not disclosed for some tenants, due to unavoidable circumstances.

(Note 2)

“Share” is the sum total of the leased area of the respective tenant as a percentage of the sum total of the leased area of the entire portfolio ofassets held by NMF at the end of the fiscal period.

F. Status of Major Properties
Not applicable.

- 55 -

Nomura Real Estate Master Fund, Inc. (3462)
Financial Results for the 2nd Fiscal Period Ended August 31, 2016

G. Overview of Leasing to Interested Parties
As of August 31, 2016, some of the assets held by NMF at the same date were leased to interested parties
as defined in the Investment Trust Act.
The following is an overview of the status of leasing of said assets to interested parties as defined in theInvestment Trust Act.
Tenant name

Property name

Nomura Real Estate Partners
Co., Ltd.

Shinjuku Nomura Building
NRE Yotsubashi Building
Total of PROUD FLAT Shirogane-Takanawa,
and 112 others
Shinjuku Nomura Building
NOF Yokohama Nishiguchi Building
NRE Yotsubashi Building
Megalos Kanagawa
Shinjuku Nomura Building
Otemachi Tatemono Gotanda Building
NOF Kichijoji Honcho Building
NOF Kawasaki Higashiguchi Building
NOF Yokohama Nishiguchi Building
NRE Nishi-Umeda Building
NRE Yotsubashi Building

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

Geo Akamatsu Co., Ltd.
Nomura Amenity Service Co.,NRE Yotsubashi Building
Ltd.

H. Collateral
Not applicable.

- 56 -

Leased area(m2)
1,021.26
1,024.90
178,878.94
5,880.61
94.83
1,266.19
6,217.85
1,558.57
198.90269.37216.54373.27404.41460.7180.01