1st Fiscal Period

Semi-Annual Report
October 1, 2015 to February 29, 2016

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

Leadership Perspectives
Nomura Real Estate Master Fund, Inc. (NMF) is committed to constructing aportfolio that provides stable income over the medium to long term and stable
growth by investing in diversified sectors.
NMF will deliver this performance through the backing of Japan’s leading
diversified real estate group – the Nomura Real Estate Group – and its expansive
support from development to leasing throughout the real estate spectrum.
The ultimate aim of NMF is to continuously increase unitholder value throughaccretive property acquisitions and distinct value-add strategies.

Growth Model

Stability Model• Sensitive to the business climate• Business climate has little impact
on performance• Rents may have upside linked to sales• Most rents are fixed

RetailFacilities

OfficeBuildings

Residential
Facilities(near stations)

Logistics
Facilities

RetailFacilities(in residential areas)

Possible Future Investment

HotelsComplex Facilities

Healthcare Facilities

Factories
etc.

First Fiscal Period Financial Overview
Cash Distribution per Unit

2,219

Operating Revenues

24,313yen

Rental Profit

11,546Hiromichi Suzuki

Norio Ambe

Executive Officer, General Manager,
Finance and Accounting Department
Nomura Real Estate Asset management Co., Ltd.

President & Chief Executive Officer
Nomura Real Estate Asset management Co., Ltd.

Ken Okada

Noriaki Ido

Director and Managing Executive Officer,
Head of NMF Investment Management Group,
General Manager, Asset Management Department I
Nomura Real Estate Asset management Co., Ltd.

Executive Officer
Head of Acquisitions Division
Nomura Real Estate Asset Management Co., Ltd.

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

100 Nomura Real Estate Master Fund

million yen

Ordinary Income

4,050

million yen

Interest-bearing debt

NOI

403,164

16,237

million yen

million yen

million yen

LTV

43.4 %

Operating Profit

6,483

million yen

Net Income

4,048
Total assets

792,658
million yen

million yen

Occupancy

98.9 %(261 properties)

Contents
Leadership Message
Sponsor Support
Portfolio Management: External Growth
Portfolio Management: Internal Growth
Finance Strategy
Portfolio Table
Portfolio Gallery
Portfolio Diversification
Structure and Organization

2-3
4-5
6-7
8-9
10-11
12-13
14-17
18
19

Financial Section
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Flows
Notes to Financial Statements
Independent Auditor’s Report
Investor Information

20-21
22
23
24
25-39
40
41

Nomura Real Estate Master Fund

1

Leadership Message

Leadership Message

Newer and Larger

Foundation for
Stability and Growth

We hope that you, our unitholders,
are doing well and have met withprosperity.

It is good to have completed
a strong First Fiscal Period
under the “new and improved” NMF.

Nomura Real Estate Master Fund, Inc. (NMF)
was established on October 1, 2015 byconsolidating the former Nomura Real Estate
Master Fund, Inc., Nomura Real Estate Office
Fund, Inc. and Nomura Real Estate Residential
Fund, Inc. NMF listed the following day on theTokyo Stock Exchange REIT Market.

When we launched the new diversified and large J-REIT,
business clients provided a variety of issues including therisk of large tenants moving out and having a large impact
on our bottom line, an overheated market limiting
external growth opportunities and limited opportunities
for rental upside. There was intense competition to buy inthe market and a polarization of J-REITs into large andsmall. Additionally the government had created more
assets in which we can invest and the tax reform in 2015
allowed us to avoid taxation due to goodwill by making
cash distributions in excess of profits.

The basic policy of NMF is to achieve bothstability and growth over the medium to longterm. NMF will invest in a broad range oftargets without limiting itself and specificallyfocus on offices, retail facilities, logistics
facilities and residential facilities.
NMF will also apply the collective skills of the
Nomura Real Estate Group in particular with
its asset management company, Nomura Real
Estate Asset management Co., Ltd. (NREAM),
to source, develop and manage the properties
as it generates revenues so that the aggregate
value of the portfolio can increase over time.
We thank you in advance for your continuing
support of the newer and larger Nomura Real
Estate Master Fund.

Satoshi Yanagita
Executive Director
Nomura Real Estate Master Fund, Inc.
Joined Nomura Real Estate Development Co., Ltd. in April 1981. Between
April 2001 and March 2011, he served as general manager consecutively for
the Planning Section of the Residential Company, General Affairs
Department and concurrently for the General Affairs Department andGeneral Affairs Trial Department. He became Executive Officer of Nomura
Living Support Co., Ltd. in April 2011 and also served as Director from April
2012. He currently serves as a Managing Director of Nomura Real Estate
Reform Co., Ltd. and assumed the post of Executive Director of NMF as of
October 1, 2015.

2

Nomura Real Estate Master FundThis broad climate placed us on a road to quick growth
and a size of 792,658 million yen on an acquisition pricebasis in assets under management. We constructed astrategy that reinforced our standing by adopting adiversified REIT strategy, building a large J-REIT for
stability and growth and fully applying the strengths of
the Nomura Real Estate Group.
The impact has been greater portfolio size and quality,
stronger financial soundness and a distinct new strategy
broadly supported by the Nomura Real Estate Group. Not
only has NMF diversified, become one of the largest
REITs in Japan and gained the support of a major
diversified real estate group, it has done so in an accretive
manner and without sacrificing quality. The assets undermanagement remain strong and the pipeline of thevarious series that the Nomura Real Estate Group
specializes in remains expansive.
NMF will continue to apply the Leasing Value Chain tosource, develop and manage assets and is pleased toannounce a distribution per unit of 2,219 yen this First
Fiscal Period. We are embarking towards a portfolio of 1
trillion yen, confident that our REIT will continue to be aleader among J-REITs.
We ask for your continued support.

Norio Ambe
President & Chief Executive Officer
Nomura Real Estate Asset management Co., Ltd.
Joined Nomura Securities Co., Ltd. in 1980. After being engaged in services
for institutional investors and financial companies, he held such prominent
positions as Executive Officer of Nomura Asset Management Co., Ltd. as well
as Chairman of Nomura Asset Management Singapore Limited and Nomura
Asset Management Hong Kong Limited. After assuming the post of Managing
Executive Officer of Nomura Asset Management Co., Ltd. and being in chargeof client services and services for global institutional clients, he wasappointed to his current position of President and Chief Executive Officer of
NREAM in April 2015 and also assumed the post of Executive Officer of
Nomura Real Estate Holdings, Inc. in April 2016.

Nomura Real Estate Master Fund

3

Sponsor Support

Sponsor Support

As iterated before sponsor support is both critical to and the reason for the success of NMF. The ability to comprehensively
provide market-recognized services from development to leasing places NMF into a select group of JREITs. The Leasing
Business Value Chain, market-leading brands developed by Nomura Real Estate Group and the dependable pipeline ofstrong product are evidence that NMF will continue to perform into the future.

Brands of the Nomura Real Estate GroupThe Nomura Real Estate Group has developed a series of brands that have become market leaders in their respective
sectors.
A new category of office building provided by Nomura Real Estate Group that delivers midsize offices with large
office services to the market.

Leasing Business Value Chain of the Nomura Real Estate Group

Restaurant buildings developed in urban settings by Nomura Real Estate Group that propose new lifestyles to themarket population via a diverse variety of restaurants.

NMF applies the Leasing Business Value Chain it has constructed with the Nomura Real Estate Group to assist in
gaining property information, increasing brand value of the portfolio and raising the general value of assets.

Logistic centers that are cutting edge with a high degree of functionality and that meet the changing logistics
environment of recent years and changing tenant needs through a design that pursues optimization andefficiency.

Accelerate an amicable cycle of mutual growth with Nomura Real Estate Group

This series of rental apartments applies the know-how and information gained with the construction of thesuccessful PROUD for-sale residential series.

Maximize Value
Measures to Improve
Property Value

Representative Examples of Future Pipeline

Property
Acquisition

Office Buildings

Retail Facilities

Property Acquisition Pipeline<Provide property information>
Price Examination /Negotiation

Obtain Trading
Information
Investment Analysis

Basic Agreement with respect
to leasing value chain
Leasing Value Chain Committee(Acquisition/Sales/Management)

Improve
Revenue
Improvement Brand Value
Measures

Brand Strategy Meeting(Management)
Value Improvement Meeting(Sales/Management)

PMO Hirakawacho

PMO Nihonbashi Mitsukoshimae PJ

Hirakawacho, Chiyoda Ward, Tokyo Nihonbashihoncho, Chuo Ward, Tokyo
January 2016

May 2017 (scheduled)

Logistics Facilities
Sales

GEMS Ebisu PJ

Shiba-Daimon, Minato Ward, Tokyo

Ebisu, Shibuya Ward, Tokyo

February 2016

August 2017 (scheduled)

Residential Facilities

Management Pipeline
Site Selection

Leasing

GEMS Daimon

Product Design /Development<Strengthen the brands and improve thevalue of properties held by the REIT>

Landport Kashiwa Shonan I
Kashiwa City, Chiba
February 2016

4

Nomura Real Estate Master Fund

Landport Iwatsuki PJ

PROUD FLAT Sangen Jaya II

PROUD FLAT Omori III

Saitama City, Saitama

Setagaya Ward, Tokyo

Shinagawa Ward, Tokyo

May 2016 (scheduled)

January 2014

November 2014

Nomura Real Estate Master Fund

5

Portfolio Management:

External Growth

Portfolio Management

NMF Acquired Four Assets in the First Fiscal Period
Proof of the excellence of the Nomura Real Estate Group prowess by acquiring four properties that are all around two
years old or less and in excellent locations.
PROUD FLAT
Hatchobori

Name

PROUD FLAT
Itabashi
HonchoResidential Facilities

Use

NRE Kichijoji
Building

GEMS
Ichigaya

PMO
Tamachi

Retail Facilities

PMO
Ginza
Hatchome

PMO
Shibakoen

Office Buildings

Photo

Noriaki Ido
Executive Officer
Head of Acquisitions Division
Nomura Real Estate Asset Management Co., Ltd.

Q1

Has there been a change in strategy
with the merger of the three REITs
into one diversified REIT?

However, our strategy continues to be growth withstability. We see growth potential in rents and pricing for
offices and station front retail, while we see stability inresidential, logistics and retail providing daily necessities.

How do you define stable andgrowth assets?

Stable assets are not impacted by the economy very muchand often consist of assets leased on fixed rents. On theother hand, growth assets are sensitive to the economic
environment but sometimes have rents that are tied tomarket sales.
6

million yen

920

million yen

720

5,310 2,080 6,210 3,970 3,900
million yen

million yen

million yen

million yen

million yen

Appraised
NOI (Note)

4.6%

4.9%

4.4%

4.2%

4.1%

4.0%

4.2%

NearestStationHatchobori
StationItabashi Honcho
StationKichijoji Station

Ichigaya Station

Mita Station

Completion

May 2014

July 2014

July 2014

October 2014

February 2014

Shiodome Station Onarimon Station
April 2014

July 2014

Note: Appraisal NOI yield is based on annual NOI described in appraisal reports as of May 1, 2015.

Well, yes, we are no longer focused just on retail andlogistics. We are employing a true diversified strategy
where we invest in the four principal sectors of office,retail, residential and logistics facilities. We will also be
considering investment in hotels, healthcare facilities,
factories and complex developments.

Q2

Acquisition
Price

Nomura Real Estate Master Fund

Joined Nomura Real Estate Development in 1992. Worked in development
and operational management of office buildings for 8 years. After
working in the acquisition, retail facility, office and investment discretionbusinesses within the asset management section, he was appointed as
Managing Director in 2013 and his current position in 2014.

Construction of Sustainable Portfolio
Aiming for construction of sustainable portfolio utilizing the strength of having a general developer as a sponsor andmaking quality and performance highly stable through the asset replacement cycle.
Outside of the group
Relatively new

Q3

Do you see growth
as a difficult prospect?

No, the true strength of the Nomura Real Estate Groupwill be demonstrated by our J-REIT. Our actual
acquisitions are proof of this. We acquired a total of sevenproperties, four properties in the First Fiscal Period andthree properties at the beginning of the Second Fiscal
Period, which stretch across three asset classes. They wereaccretive acquisitions raising our distributions per unit
by about 50 yen and totaled 23.11 billion yen. We havealso acquired three office buildings in the second period.
Clearly, the diversified strategy is an even greater
opportunity for NMF to grow and reach our mediumterm goal of 1 trillion yen or more in assets undermanagement.

Acquisition

Mid- to long-term earning strength➤ Secure stable cash flow

Highly competitive

Redevelopment➤ Specifications and locations promisingstrong tenant demand

Newly built
Sponsor developed
properties

Strategic Property
Replacement(SPR)*

Disposition

Building age

Possible forredevelopment➤ Increase of repair costs

Disposition tooutside of the group
Inadequate forredevelopment

Asset
Management

Timing➤ Earning strength, real estate market

Possibility of redevelopment➤ Potential, size of the land*Based on Mid- to Long-term Management Strategy disclosed by “Brief session regarding the Investment Principles presentation” held on November 9, 2015

Nomura Real Estate Master Fund

7

Portfolio Management:Internal Growth

Portfolio Management

Mid- to Long-term Management Strategy
NMF established the Mid-to Long-term Management Strategy when starting operation of the new REIT with an eye on
10 years into the future under the basic policy of pursuing stable management over the medium to long term.
3 ~ 5 years

5 ~ 10 years

10 years and after

Quality

GrowthMasterStrategic property replacement
Enhancement of portfolio
quality

Internal growth
Rent increase centering on
investment sectors withupside potential

Implement first public offering
Improvement of theevaluation from unitholders

Ken Okada
Director and Managing Executive Officer,
Head of NMF Investment Management Group,
General Manager, Asset Management Department I
Nomura Real Estate Asset management Co., Ltd.

Q1

What is special about the Leasing
Value Chain of the Nomura Real
Estate Group?

The strengths of the Nomura Real Estate Group aredemonstrated from development to leasing andmanagement. The Nomura Real Estate Group has been
especially successful at developing broadly recognizedbrands: PMO in the office sector, PROUD FLAT in theresidential sector, Landport in the logistics sector and
GEMS in the urban entertainment/retail sector.

Q2

Are there additional strengths of the
Nomura Real Estate Group?

The Nomura Real Estate Group has teams and companies
covering the respective stages of real estate investment
and development. Therefore, we are good not only atsourcing both finished and development products, butthese strengths combined with the brand strengths alsoenable the soliciting of a wide spectrum of potential
8

Nomura Real Estate Master Fund

Joined Nomura Real Estate Development in 1991. After gaining
experience in a broad range of real estate investment fields at the Council
for Real Estate Syndication (current ARES), Mitsubishi UFJ Trust andBanking, etc., he assumed the post of General Manager of the Corporate
Planning Department at NREAM in 2012. After serving as the Executive
Officer, he was appointed to his current position in April 2016.

tenants, and finally there are management teams thatdeliver a product to market that satisfies both tenants
and customers.

Q3

Establishment of a strong
fund brand

External growth

Sustainability

Focused investment insponsor developed properties

Asset size
High and stable level ofvarious management
indices including asset
sizeInternal growth
Strengthen property brands
through maximization ofmanagement pipeline

Fund brandFinanceHigh evaluation based on
quality and growth

Public offering in line with theequity market

Growth that maintains
high quality

Become a representative
J-REIT brandOccupancy: Strong in All Classes
Despite the high occupancy of our portfolio, NMF is committed
to raising the occupancy level without sacrificing income.

(%)
100

Total

OfficeRetailOctober2015

November
2015

December
2015

Logistics

Residential

98

Internal growth is also achieved through measures utilizing theenhanced portfolio stability and risk tolerance to maintain andimprove rents as well as raise occupancy. These include theenhancement of the portfolio through active replacement,
allocation of funds for effective repairs and reform, and pursing
the most efficient and optimal use of properties. Proactive
measures of NMF include the following.

96
94
92
90

January
2016

February2016

Is there any evidence that illustrates
the strength of these teams, theLeasing Value Chain and the Nomura
Real Estate Group?

Of course, during the First Fiscal Period of NMF and earlyin the Second Fiscal Period, we acquired seven properties
in three sectors that are all around two years old or less,added over 23 billion yen to our assets under management
and expect to add 50 yen to our cash distributions perunit – thus compensating our unitholders for their belief
in us.
Nomura Real Estate Master Fund

9

Finance Strategy:

Ensuring Greater Stability through Sound

Q1

What impact are you
striving for from the getlarge and diversify strategy?

We remain conservative in our financial
strategy. We believe that our size and further
diversification will help us achieve even moreadvantageous financial terms in our financing.
My objective is to make sure this belief turns
into reality.

Q2

Hiromichi Suzuki
Executive Officer, General Manager,
Finance and Accounting Department
Nomura Real Estate Asset management Co., Ltd.
Joined Nomura Real Estate Development in 1993. After working inaccounting for 20 years, he joined NREAM in 2013. After gaining experiencein marketing and fund management, he was appointed to his current
position in April 2016.

How are you deliveringstability to the financial
aspect of the portfolio?

As of February 2016 our long-term borrowings
outnumber short-term borrowings 361,565
million yen to 9,100 million yen and our
average duration of interest-bearing debt is
4.0 years. Our goal is to further diversify
repayments of debts so they are spread out
evenly and place no undue burden at a single
time.

Q3

How do you rate yourperformance thus far?

Fiscal Management
Bank Formation
Financial Institution

403.1
billion yen

84.1%

Long-term debt ratio

Average remaining years
to maturity

4.0
years

10 Nomura Real Estate Master Fund

43.4%

Share
15.6%
15.3%
8.2%
9.3%
7.5%
3.1%
7.7%
3.2%
1.9%
2.0%
1.0%
2.0%
0.6%
1.2%
0.6%
0.2%

Financial Institution

91.4%
LTV

(ratio of interest-bearing liabilities to total assets)(Billions of Yen)

Share

The Keiyo Bank, Ltd.
The Dai-ichi Life Insurance Company, Limited
Taiyo Life Insurance Company
Daido Life Insurance Company
Mitsui Life Insurance Company Limited
Mitsui Sumitomo Insurance Company, Limited
The Chugoku Bank, LimitedAozora Bank, Ltd.
Sompo Japan Nipponkoa Insurance Inc.
Sumitomo Life Insurance Company
The Hyakujushi Bank, Ltd.
The 77 Bank, Ltd.
Shinkin Central Bank
The Nishi-Nippon City Bank, Ltd.
The Bank of Yokohama, Ltd.
The Tokyo Tomin Bank, Limited.
Corporate bonds

1.7
6.3
6.5
3.1
1.0
3.7
4.5
2.5
1.0
5.5
2.0
2.0
5.2
2.7
0.5
1.0
32.5

0.4%
1.6%
1.6%
0.8%
0.2%
0.9%
1.1%
0.6%
0.2%
1.4%
0.5%
0.5%
1.3%
0.7%
0.1%
0.2%
8.1%

Total

403.1

100.0%

Diversification of Repayment Dates(Billions of Yen; Rounded)
50.0
40.0
30.0

30.42

33.69 33.61
5.0

5.0

0

Investment corporation bonds

Debt

28.86
4.0

21.64 22.04

26.24

29.44
25.01 24.02 23.69
22.94 5.0
15.52

18.14
13.79

10.0

Average interest rate

Ratio of fixed interest rate

63.0
61.5
33.2
37.4
30.3
12.6
31.0
13.0
7.5
8.2
4.0
8.2
2.5
5.0
2.5
1.0

20.0

Our team has worked hard to date and isdelivering in the Nomura manner. We also
enjoy an AA long-term issuer rating with Japan
Credit Rating Agency and an A corporate credit
rating with Standard & Poor’s.

1.09%(Billions of Yen)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
The Norinchukin Bank
Development Bank of Japan Inc.
Mizuho Trust & Banking Co., Ltd.
The Bank of Fukuoka
Resona Bank, Ltd.
Nippon Life Insurance Company
The Nomura Trust and Banking Co., Ltd.
The Chiba Bank, Ltd.
The Iyo Bank, Ltd.
The Hachijuni Bank, Ltd.
The Hiroshima Bank, Ltd.

7.39 5.74

9.04
4.20

4.50
4.5

2.20

2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP 18th FP 19th FP 20th FP 21st FP
Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb. Aug. Feb.
2016 2017 2017 2018 2018 2019 2019 2020 2020 2021 2021 2022 2022 2023 2023 2024 2024 2025 2025 2026

26th FPAug.
2028

31st FP
Feb.
2031

9.0

0.99

Commitment Lines

Status of Interest-bearing Debt
Total amount ofinterest-bearing debt

Finance Strategy

As of March 31, 2016

Loan Limit (commitment period)

Participating Financial Institutions

Commitment Line 1

30 billion yen(one year)

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Bank,
Ltd., Mitsubishi UFJ Trust and Banking Corporation and Sumitomo Mitsui Trust Bank, Limited

Commitment Line 2

10 billion yen(one year)

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation and Mizuho
Bank, Ltd.

Commitment Line 3

10 billion yen(three years)

The Bank of Tokyo-Mitsubishi UFJ, Ltd. and Sumitomo Mitsui Banking Corporation

Credit Ratings
Rating Company

Japan Credit Rating Agency, Ltd. (JCR)

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

STANDARD & POOR’S RATINGS SERVICES (S&P)

Rating Target

Long-term issuer rating

Issuer Rating

Corporate Credit Rating

RatingAA

A+A

Outlook

StableStableStableNomura Real Estate Master Fund 11

Portfolio Table (as of the end of the 1st Fiscal Period)
No.

Name

Location(Ward/City/Gun, Prefecture)

Acquisition
Price(Millions of Yen)

Office Buildings
Of-T-001 Shinjuku Nomura Building
Shinjuku, TokyoOf-T-002 NRE Tennozu Building
Shinagawa, TokyoOf-T-003 Kojimachi Millennium Garden
Chiyoda, TokyoOf-T-004 NOF Nihonbashi Honcho Building
Chuo, TokyoOf-T-005 Tennozu Park Side Building
Shinagawa, TokyoOf-T-006 NOF Shinjuku Minamiguchi Building Shibuya, TokyoOf-T-007 NOF Shibuya Koen-dori Building
Shibuya, TokyoOf-T-008 Secom Medical Building
Chiyoda, TokyoOf-T-009 NOF Shiba Building
Minato, TokyoOf-T-010 Nishi-Shinjuku Showa Building
Shinjuku, TokyoOf-T-011 NRE Shibuya Dogenzaka Building
Shibuya, TokyoOf-T-012 NOF Tameike Building
Minato, TokyoOf-T-013 Iwamoto-cho Toyo Building
Chiyoda, TokyoOf-T-014 NOF Shinagawa Konan Building
Shinagawa, TokyoOf-T-015 NOF Surugadai Plaza Building
Chiyoda, TokyoOf-T-016 PMO Nihonbashi Honcho
Chuo, TokyoOf-T-017 PMO Nihonbashi KayabachoChuo, TokyoOf-T-018 Otemachi Tatemono Gotanda Building Shinagawa, TokyoOf-T-019 NRE Higashi-nihonbashi Building
Chuo, TokyoOf-T-020 PMO Akihabara
Chiyoda, TokyoOf-T-021 Hatchobori NF Building
Chuo, TokyoOf-T-022 NOF Kanda Iwamoto-cho Building
Chiyoda, TokyoOf-T-023 NOF Takanawa Building
Shinagawa, TokyoOf-T-024 PMO Hatchobori
Chuo, TokyoOf-T-025 NOF Minami Shinjuku Building
Shibuya, TokyoOf-T-026 PMO Nihonbashi Odenmacho
Chuo, TokyoOf-T-027 Central Shintomicho Building
Chuo, TokyoOf-T-028 PMO Higashi-nihonbashi
Chuo, TokyoOf-T-029 NRE Ueno Building
Taito, TokyoOf-T-030 NOF Technoport Kamata Center
Ota, Tokyo
Building
Of-T-031 NF Hongo Building
Bunkyo, TokyoOf-T-032 Toho Edogawabashi Building
Bunkyo, TokyoOf-T-033 Toshin Meguro Building
Meguro, TokyoOf-T-034 Crystal Park Building
Musashino, TokyoOf-T-035 NOF Kichijoji Honcho Building
Musashino, TokyoOf-T-036 Faret Tachikawa Center Square
Tachikawa, TokyoOf-T-037 NOF Kawasaki Higashiguchi Building Kawasaki, Kanagawa
Of-T-038 NOF Yokohama Nishiguchi Building Yokohama, Kanagawa
Of-T-039 NOF Shin-Yokohama Building
Yokohama, Kanagawa
Of-T-040 Yokohama Odori Koen Building
Yokohama, Kanagawa
Of-S-001 Sapporo North Plaza
Sapporo, Hokkaido
Of-S-002 NRE Sapporo Building
Sapporo, Hokkaido
Of-S-003 JCB Sapporo Higashi Building
Sapporo, Hokkaido
Of-S-004 NOF Sendai Aoba-dori Building
Sendai, Miyagi
Of-S-005 NOF Utsunomiya Building
Utsunomiya, Tochigi
Of-S-006 NOF Nagoya Fushimi Building
Nagoya, Aichi
Of-S-007 NOF Nagoya Yanagibashi Building
Nagoya, Aichi
Of-S-008 Omron Kyoto Center Building
Kyoto, Kyoto
Of-S-009 SORA Shin-Osaka 21
Osaka, Osaka
Of-S-010 NRE Osaka Building
Osaka, Osaka
Of-S-011 NRE Nishi-Umeda Building
Osaka, Osaka
Of-S-012 NRE Yotsubashi Building
Osaka, Osaka
Of-S-013 NRE Hiroshima Building
Hiroshima, Hiroshima
Of-S-014 NOF Hakata Ekimae Building
Fukuoka, Fukuoka
Of-S-015 NOF Tenjin-Minami Building
Fukuoka, Fukuoka
Subtotal (55 properties)

4,890
1,140
858
3,390
1,780
3,850
7,830
5,460
2,620
1,810
6,250
4,140
3,270
2,030
2,320
2,240
2,280
18,30012,100
6,100
3,450
4,000
2,280
4,210
2,230
355,638

Retail Facilities
Rt-T-001 Morisia Tsudanuma
Narashino, Chiba
Rt-T-002 Yokosuka More’s City
Yokosuka, Kanagawa
Rt-T-003 Recipe SHIMOKITA
Setagaya, Tokyo
Rt-T-004 Kawasaki More’s
Kawasaki, Kanagawa
Rt-T-005 EQUINIA Shinjuku
Shinjuku, Tokyo
Rt-T-006 EQUINIA Ikebukuro
Toshima, Tokyo
Rt-T-007 covirna machida
Machida, Tokyo
Rt-T-008 Nitori Makuhari
Chiba, Chiba
Rt-T-009 Konami Sports Club Fuchu
Fuchu, Tokyo
Rt-T-010 FESTA SQUARE
Saitama, Saitama
Rt-T-011 GEMS Shibuya
Shibuya, Tokyo

16,60013,64010,407
6,080
4,260
3,990
3,440
3,080
2,730
2,600
2,490

12 Nomura Real Estate Master Fund

43,90020,50026,70021,40012,70010,00010,400
11,100
7,040
8,140
5,310
4,810
4,050
3,460
4,690
4,320
5,010
4,430
3,570
4,240
2,480
4,160
2,830
2,880
2,210
2,210
1,330
1,690
6,470
4,780

Portfolio Table(Ward/City/Gun, Prefecture)

Acquisition
Price

Rt-T-012 Sundai Azamino
Yokohama, Kanagawa
Rt-T-013 EQUINIA Aobadai
Yokohama, Kanagawa
Rt-T-014 Megalos Kanagawa
Yokohama, Kanagawa
Rt-T-015 Mitsubishi Motors Meguro
Meguro, Tokyo
Rt-T-016 Mitsubishi Motors Chofu
Chofu, Tokyo
Rt-T-017 Mitsubishi Motors Shibuya
Shibuya, Tokyo
Rt-T-018 Mitsubishi Motors Nerima
Nerima, Tokyo
Rt-T-019 Mitsubishi Motors Kawasaki
Kawasaki, Kanagawa
Rt-T-020 Mitsubishi Motors Takaido
Suginami, Tokyo
Rt-T-021 Mitsubishi Motors Katsushika
Katsushika, Tokyo
Rt-T-022 Mitsubishi Motors Higashikurume
Higashikurume, Tokyo
Rt-T-023 Mitsubishi Motors Setagaya
Setagaya, Tokyo
Rt-T-024 Mitsubishi Motors Suginami
Suginami, Tokyo
Rt-T-025 Mitsubishi Motors Sekimachi
Nerima, Tokyo
Rt-T-026 Mitsubishi Motors Higashiyamato
Higashiyamato, Tokyo
Rt-T-027 Mitsubishi Motors Motosumiyoshi
Kawasaki, Kanagawa
Rt-T-028 Mitsubishi Motors Kawagoe
Kawagoe, Saitama
Rt-T-029 Mitsubishi Motors Edogawa
Edogawa, Tokyo
Rt-T-030 Mitsubishi Motors Sayama
Sayama, Saitama
Rt-T-031 NRE Kichijoji Building
Musashino, Tokyo
Rt-T-032 GEMS Ichigaya
Chiyoda, Tokyo
Rt-S-001 Universal CityWalk Osaka™
Osaka, Osaka
Rt-S-002 Izumiya Senrioka
Suita, Osaka
Rt-S-003 Merad Owada
Osaka, Osaka
Rt-S-004 Izumiya Yao
Yao, Osaka
Rt-S-005 Izumiya Obayashi
Takarazuka, Hyogo
Rt-S-006 Ichibancho stear
Sendai, Miyagi
Rt-S-007 EQUINIA Aobadori
Sendai, Miyagi
Subtotal (39 properties)

1,700
1,560
1,000
2,740
1,760
1,570
1,240
950
850
800
800
770
740
600
450
370
350
200
160
5,310
2,080
15,500
8,930
6,640
4,406
3,020
4,700
1,640
140,153

No.

Name

Location(Millions of Yen)

Logistics Facilities
Lg-T-001 Landport Urayasu
Urayasu, Chiba
17,400
Lg-T-002 Landport Itabashi
Itabashi, Tokyo
15,710
Lg-T-003 Landport Kawagoe
Kawagoe, Saitama
13,700
Lg-T-004 Landport Atsugi
Atsugi, Kanagawa
11,410
Sagamihara, Kanagawa 10,600
Lg-T-005 Sagamihara Tana Logistics Center
8,700
Lg-T-006 Sagamihara Onodai Logistics Center Sagamihara, Kanagawa
Lg-T-007 Landport Hachioji
Hachioji, Tokyo
8,250
Lg-T-008 Landport Kasukabe
Kasukabe, Saitama
7,340
Lg-T-009 Funabashi Logistics Center
Funabashi, Chiba
4,660
Lg-T-010 Atsugi Minami Logistics Center B
Atsugi, Kanagawa
4,590
Tower
Lg-T-011 Hanyu Logistics Center
Hanyu, Saitama
3,810
Lg-T-012 Kawaguchi Logistics Center B Tower Kawaguchi, Saitama
3,750
Lg-T-013 Kawaguchi Logistics Center A Tower Kawaguchi, Saitama
2,830
2,690
Lg-T-014 Atsugi Minami Logistics Center A Tower Atsugi, Kanagawa
Lg-T-015 Kawaguchi Ryoke Logistics Center
Kawaguchi, Saitama
10,790
Lg-S-001 Ota Nitta Logistics Center
Ota, Gunma
3,430
2,170
Lg-S-002 Ota Higashishinmachi Logistics Center Ota, Gunma
Lg-S-003 Ota Kiyohara Logistics Center
Ota, Gunma
650
Lg-S-004 Chiyodamachi Logistics Center
Oura, Gunma
330
Subtotal (19 properties)
132,810
Residential Facilities
Rs-T-001 PROUD FLAT Shirokane Takanawa
Minato, Tokyo
Rs-T-002 PROUD FLAT Yoyogi Uehara
Shibuya, Tokyo
Rs-T-003 PROUD FLAT Hatsudai
Shibuya, Tokyo
Rs-T-004 PROUD FLAT Shibuya Sakuragaoka
Shibuya, Tokyo
Rs-T-005 PROUD FLAT Gakugei Daigaku
Meguro, Tokyo
Rs-T-006 PROUD FLAT Meguro Gyoninzaka
Meguro, Tokyo
Rs-T-007 PROUD FLAT Sumida Riverside
Chuo, Tokyo
Rs-T-008 PROUD FLAT Kagurazaka
Shinjuku, Tokyo
Rs-T-009 PROUD FLAT Waseda
Shinjuku, Tokyo
Rs-T-010 PROUD FLAT Shinjuku Kawadacho
Shinjuku, Tokyo
Rs-T-011 PROUD FLAT Sangen Jaya
Setagaya, Tokyo
Rs-T-012 PROUD FLAT Kamata
Ota, Tokyo
Rs-T-013 PROUD FLAT Kamata II
Ota, Tokyo
Rs-T-014 PROUD FLAT Shinotsuka
Toshima, Tokyo
Rs-T-015 PROUD FLAT Kiyosumi Shirakawa
Koto, Tokyo
Rs-T-016 PROUD FLAT Monzen Nakacho II
Koto, Tokyo
Rs-T-017 PROUD FLAT Monzen Nakacho I
Koto, Tokyo

3,400
989
713
750
746
939
2,280
1,590
1,110
947
1,190
1,160
3,320
623
928
652
1,030

No.

Name

Rs-T-018 PROUD FLAT FujimidaiRs-T-019 PROUD FLAT Asakusa
Rs-T-020 PROUD FLAT Yokohama
Rs-T-021 PROUD FLAT Kamiooka
Rs-T-022 PROUD FLAT Tsurumi II
Rs-T-023 PRIME URBAN Azabu Juban
Rs-T-024 PRIME URBAN Akasaka
Rs-T-025 PRIME URBAN Tamachi
Rs-T-026 PRIME URBAN Shibaura
Rs-T-027 PRIME URBAN Hatagaya
Rs-T-028 PRIME URBAN Yoyogi
Rs-T-029 PRIME URBAN Ebisu II
Rs-T-030 PRIME URBAN Bancho
Rs-T-031 PRIME URBAN Chiyoda Fujimi
Rs-T-032 PRIME URBAN Iidabashi
Rs-T-033 PRIME URBAN Ebisu
Rs-T-034 PRIME URBAN Naka Meguro
Rs-T-035 PRIME URBAN Gakugei Daigaku
Rs-T-036 PRIME URBAN Senzoku
Rs-T-037 PRIME URBAN Meguro Riverside
Rs-T-038 PRIME URBAN Meguro Ohashi Hills
Rs-T-039 PRIME URBAN Meguro Aobadai
Rs-T-040 PRIME URBAN Gakugei Daigaku II
Rs-T-041 PRIME URBAN Naka Meguro II
Rs-T-042 PRIME URBAN Kachidoki
Rs-T-043 PRIME URBAN Shinkawa
Rs-T-044 PRIME URBAN Nihonbashi
Yokoyamacho
Rs-T-045 PRIME URBAN Nihonbashi Hamacho
Rs-T-046 PRIME URBAN Hongo Ikizaka
Rs-T-047 PRIME URBAN Hakusan
Rs-T-048 PRIME URBAN Yotsuya Gaien Higashi
Rs-T-049 PRIME URBAN Ochiai
Rs-T-050 PRIME URBAN Nishi Shinjuku I
Rs-T-051 PRIME URBAN Nishi Shinjuku II
Rs-T-052 PRIME URBAN Shinjuku Naitomachi
Rs-T-053 PRIME URBAN Nishi Waseda
Rs-T-054 PRIME URBAN Shinjuku Ochiai
Rs-T-055 PRIME URBAN Mejiro
Rs-T-056 PRIME URBAN Kagurazaka
Rs-T-057 PRIME URBAN Sangen Jaya III
Rs-T-058 PRIME URBAN Chitose Karasuyama
Rs-T-059 PRIME URBAN Sangen Jaya II
Rs-T-060 PRIME URBAN Sangen Jaya
Rs-T-061 PRIME URBAN Minami Karasuyama
Rs-T-062 PRIME URBAN Karasuyama Galleria
Rs-T-063 PRIME URBAN Karasuyama Court
Rs-T-064 PRIME URBAN Kamikitazawa
Rs-T-065 PRIME URBAN Chitose Funabashi
Rs-T-066 PRIME URBAN Yoga
Rs-T-067 PRIME URBAN Shinagawa Nishi
Rs-T-068 PRIME URBAN Osaki
Rs-T-069 PRIME URBAN Oimachi II
Rs-T-070 PRIME URBAN Yukigaya
Rs-T-071 PRIME URBAN Omori
Rs-T-072 PRIME URBAN Denenchofu Minami
Rs-T-073 PRIME URBAN Nagahara Kamiikedai
Rs-T-074 PRIME URBAN Nakano
Rs-T-075 PRIME URBAN Nakano Kamitakada
Rs-T-076 PRIME URBAN Takaido
Rs-T-077 PRIME URBAN Nishi Ogikubo
Rs-T-078 PRIME URBAN Nishi Ogikubo II
Rs-T-079 PRIME URBAN Otsuka
Rs-T-080 PRIME URBAN Komagome
Rs-T-081 PRIME URBAN Ikebukuro
Rs-T-082 PRIME URBAN Monzen Nakacho
Rs-T-083 PRIME URBAN Kameido
Rs-T-084 PRIME URBAN Sumiyoshi
Rs-T-085 PRIME URBAN Mukojima
Rs-T-086 PRIME URBAN Kinshi Koen
Rs-T-087 PRIME URBAN Kinshicho(Ward/City/Gun, Prefecture)

Acquisition
Price

Nerima, Tokyo
Taito, Tokyo
Yokohama, Kanagawa
Yokohama, Kanagawa
Yokohama, Kanagawa
Minato, Tokyo
Minato, Tokyo
Minato, Tokyo
Minato, Tokyo
Shibuya, Tokyo
Shibuya, Tokyo
Shibuya, Tokyo
Chiyoda, Tokyo
Chiyoda, Tokyo
Chiyoda, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Meguro, Tokyo
Chuo, Tokyo
Chuo, Tokyo
Chuo, Tokyo

1,470
1,920
2,090
2,710
1,650
1,100
938
972
1,830
469
359
1,140
1,090
679
2,040
1,260
1,410
775
474
414
2,970
1,310
1,080
2,850
2,570
2,100
4,220

Chuo, Tokyo
Bunkyo, Tokyo
Bunkyo, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Shinjuku, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Setagaya, Tokyo
Shinagawa, Tokyo
Shinagawa, Tokyo
Shinagawa, Tokyo
Ota, Tokyo
Ota, Tokyo
Ota, Tokyo
Ota, Tokyo
Nakano, Tokyo
Nakano, Tokyo
Suginami, Tokyo
Suginami, Tokyo
Suginami, Tokyo
Toshima, Tokyo
Toshima, Tokyo
Toshima, Tokyo
Koto, Tokyo
Koto, Tokyo
Koto, Tokyo
Sumida, Tokyo
Sumida, Tokyo
Sumida, Tokyo

1,550
557
866
1,490
338
1,090
885
430
421
594
1,430
2,900
718
717
483
724
667
549
338
597
746
1,390
494
1,860
1,040
951
905
774
1,720
489
498
1,060
414
1,790
730
437
3,800
2,420
779
632
528
1,290
758

Location(Millions of Yen)

No.

Location

Name(Ward/City/Gun, Prefecture)Rs-T-088 PRIME URBAN Hirai
Rs-T-089 PRIME URBAN Kasai
Rs-T-090 PRIME URBAN Kasai II
Rs-T-091 PRIME URBAN Kasai East
Rs-T-092 PRIME URBAN Ekoda
Rs-T-093 PRIME URBAN Itabashi
Kuyakushomae
Rs-T-094 PRIME URBAN Asakusa
Rs-T-095 PRIME URBAN Machiya South Court
Rs-T-096 PRIME URBAN Musashi Koganei
Rs-T-097 PRIME URBAN Musashino Hills
Rs-T-098 PRIME URBAN Koganei Honcho
Rs-T-099 PRIME URBAN Kumegawa

Acquisition
Price(Millions of Yen)

Edogawa, Tokyo
Edogawa, Tokyo
Edogawa, Tokyo
Edogawa, Tokyo
Nerima, Tokyo
Itabashi, Tokyo

722
640
981
1,140
409
1,080

Taito, Tokyo
Arakawa, Tokyo
Koganei, Tokyo
Koganei, Tokyo
Koganei, Tokyo
Higashimurayama,
Tokyo
Kawasaki, Kanagawa

384
1,910
1,910
1,280
791
1,520

Rs-T-100 PRIME URBAN Musashi Kosugi
comodoRs-T-101 PRIME URBAN Kawasaki
Kawasaki, Kanagawa
Rs-T-102 PRIME URBAN Shinyurigaoka
Kawasaki, Kanagawa
Rs-T-103 PRIME URBAN Tsurumi Teraya
Yokohama, Kanagawa
Rs-T-104 PRIME URBAN Urayasu II
Urayasu, Chiba
Rs-T-105 PRIME URBAN Urayasu
Urayasu, Chiba
Rs-T-106 PRIME URBAN Gyotoku I
Ichikawa, Chiba
Rs-T-107 PRIME URBAN Gyotoku II
Ichikawa, Chiba
Rs-T-108 PRIME URBAN Gyotoku Ekimae
Ichikawa, Chiba
Rs-T-109 PRIME URBAN Gyotoku Ekimae II
Ichikawa, Chiba
Rs-T-110 PRIME URBAN Gyotoku III
Ichikawa, Chiba
Rs-T-111 PRIME URBAN Nishi Funabashi
Funabashi, Chiba
Rs-T-112 PRIME URBAN Kawaguchi
Kawaguchi, Saitama
Rs-T-113 PROUD FLAT Hatchobori
Chuo, Tokyo
Rs-T-114 PROUD FLAT Itabashi Honcho
Itabashi, Tokyo
Rs-S-001 PROUD FLAT Itsutsubashi
Sendai, Miyagi
Rs-S-002 PROUD FLAT Kawaramachi
Sendai, Miyagi
Rs-S-003 PROUD FLAT Shin Osaka
Osaka, OsakaRs-S-004 PRIME URBAN Yamahana
Sapporo, Hokkaido
Rs-S-005 PRIME URBAN Kita Juyo Jo
Sapporo, Hokkaido
Rs-S-006 PRIME URBAN Odori Koen I
Sapporo, Hokkaido
Rs-S-007 PRIME URBAN Odori Koen II
Sapporo, Hokkaido
Rs-S-008 PRIME URBAN Kita Juichi Jo
Sapporo, Hokkaido
Rs-S-009 PRIME URBAN Miyanosawa
Sapporo, Hokkaido
Rs-S-010 PRIME URBAN Odori Higashi
Sapporo, Hokkaido
Rs-S-011 PRIME URBAN Chiji Kokan
Sapporo, Hokkaido
Rs-S-012 PRIME URBAN Maruyama
Sapporo, Hokkaido
Rs-S-013 PRIME URBAN Kita Nijuyo Jo
Sapporo, Hokkaido
Rs-S-014 PRIME URBAN Sapporo Idaimae
Sapporo, Hokkaido
Rs-S-015 PRIME URBAN Sapporo Riverfront
Sapporo, Hokkaido
Rs-S-016 PRIME URBAN Kita Sanjo Dori
Sapporo, Hokkaido
Rs-S-017 PRIME URBAN Nagamachi Icchome Sendai, Miyagi
Rs-S-018 PRIME URBAN Yaotome Chuo
Sendai, Miyagi
Rs-S-019 PRIME URBAN Tsutsumidori Amamiya Sendai, Miyagi
Rs-S-020 PRIME URBAN Aoi
Nagoya, Aichi
Rs-S-021 PRIME URBAN Kanayama
Nagoya, Aichi
Rs-S-022 PRIME URBAN Tsurumai
Nagoya, Aichi
Rs-S-023 PRIME URBAN Kamimaezu
Nagoya, Aichi
Rs-S-024 PRIME URBAN Izumi
Nagoya, Aichi
Rs-S-025 PRIME URBAN Esaka I
Suita, OsakaRs-S-026 PRIME URBAN Esaka II
Suita, OsakaRs-S-027 PRIME URBAN Esaka III
Suita, OsakaRs-S-028 PRIME URBAN Tamatsukuri
Osaka, OsakaRs-S-029 PRIME URBAN Sakaisuji Honmachi Osaka, OsakaRs-S-030 PRIME URBAN Hakata
Fukuoka, Fukuoka
Rs-S-031 PRIME URBAN Yakuin Minami
Fukuoka, Fukuoka
Rs-S-032 PRIME URBAN Kashii
Fukuoka, Fukuoka
Rs-S-033 PRIME URBAN Hakata Higashi
Fukuoka, Fukuoka
Rs-S-034 PRIME URBAN Chihaya
Fukuoka, Fukuoka
Subtotal (148 properties)

962
1,020
493
227
804
633
730
488
469
747
761
1,580
920
720
652
735
1,620
273
274
502
334
547
475
394
249
229
437
616
4,480
1,730
1,140
466
949
712
553
1,020
1,590
3,770
652
794
1,190
1,020
1,810
588
265
398
622
604
164,057

Total (261 properties)

792,658

01

Investment Securities
Godo Kaisha Osaka Hirakata Project Hirakata, Osaka
Silent Partnership Equity Interest

1,940

100

Nomura Real Estate Master Fund 13

Portfolio Gallery

Portfolio Gallery

NMF Office Portfolio
Acquisitions center on brands developed by Nomura Real Estate Development including PMO(Premium Midsize Office). Representative acquisitions are indicated below.

Total Office
Portfolio

Total Acquisition
Value for Portfolio

55

355,638

properties

million yen

NMF Retail Portfolio
Acquisitions placing GEMS as the core brand developed by Nomura Real Estate Developmentin urban areas, iconic destinations like Universal CityWalk Osaka™ and other retail centers.
Representative acquisitions are indicated below.

Total Office
Portfolio

Total Acquisition
Value for Portfolio

39

140,153

properties

million yen

Shinjuku Nomura Building

PMO Higashi-nihonbashi

Kojimachi Millennium Garden

NRE Kichijoji Building

GEMS Ichigaya

GEMS Shibuya

Acquisition Price: 43,900 million yen

Acquisition Price: 1,690 million yen

Acquisition Price: 26,700 million yen

Acquisition Price: 5,310 million yen

Acquisition Price: 2,080 million yen

Acquisition Price: 2,490 million yen

Nearest Station: Shinjuku Station

Nearest Station: Higashi-nihonbashi Station

Nearest Station: Yotsuya Station

Nearest Station: Kichijoji Station

Nearest Station: Ichigaya Station

Nearest Station: Shibuya Station

Completion: May 1978

Completion: October 2009

Completion: May 2000

Completion: July 2014

Completion: October 2014

Completion: September 2012

Morisia Tsudanuma

Ichibancho stear

Yokosuka More’s CityNOF Nihonbashi Honcho
Building

NRE Tennozu Building

Secom Medical Building

NOF Shibuya Koen-dori
Building

Kawasaki More’s

Recipe SHIMOKITA

Universal CityWalk Osaka™
NOF Shinjuku Minamiguchi
Building

14 Nomura Real Estate Master Fund

Acquisition Price: 15,500 million yen
Omron Kyoto Center Building

SORA Shin-Osaka 21

Sapporo North Plaza

Merad Owada

Izumiya Senrioka

Nearest Station: Universal City Station / Completion: June 2001

Nomura Real Estate Master Fund 15

Portfolio Gallery

Portfolio Gallery

NMF Logistics Portfolio
Acquisitions center on Landport, the logistics centers developed by Nomura Real Estate
Development. Representative acquisitions are indicated below.

Total Office
Portfolio

Total Acquisition
Value for Portfolio

19

132,810properties

Landport Itabashi

Landport Urayasu

Acquisition Price: 15,710 million yen

Acquisition Price: 17,400 million yen

Nearest Station: Nishidai Station

Nearest Station: Maihama Station

Completion: January 2008

Completion: May 2008

Sagamihara Tana Logistics
Centermillion yen

Acquisition Price: 13,700 million yen

Completion: May 2009

Landport Kasukabe

16 Nomura Real Estate Master Fund

Kawaguchi Ryoke Logistics
Center

Landport Atsugi

Acquisitions center on the PROUD FLAT and PRIME URBAN series developed by Nomura
Real Estate Development. Representative acquisitions are indicated below.

Total Office
Portfolio

Total Acquisition
Value for Portfolio

148

164,057

properties

million yen

PROUD FLAT Sumida Riverside

PROUD FLAT Kagurazaka

PRIME URBAN Sapporo Riverfront

Acquisition Price: 2,280 million yen

Acquisition Price: 1,590 million yen

Acquisition Price: 4,480 million yen

Nearest Station: Kayabacho Station

Nearest Station: Kagurazaka Station

Nearest Station: Nakajima Koen Station

Completion: February 2007

Completion: November 2006

Completion: January 2008

Sagamihara Onodai Logistics
Center

Landport Kawagoe
Nearest Station: Minami-Otsuka Station

NMF Residential Portfolio

PRIME URBAN Nihonbashi
Yokoyamacho

PRIME URBAN Ikebukuro

PROUD FLAT Shirokane
Takanawa

PROUD FLAT Kamata II

PRIME URBAN Meguro Ohashi
Hills

PRIME URBAN Naka Meguro II

PROUD FLAT Kamiooka

PRIME URBAN Izumi

Funabashi Logistics Center

Landport Hachioji

Nomura Real Estate Master Fund 17

Portfolio Diversification

Structure and Organization

Diversification is critical for stability of a J-REIT and NMF achieved diversification through the numerous factors
illustrated below.


As of April 30, 2016

Diversification by Area

Diversification by Use

Property quantity is also spread among various
geographical areas with 75% or more of the properties in
the Tokyo area and about 25% in three major metropolitan
areas and government designated cities.

The portfolio is also divided by use to provide further
stability.

43.0%

20.1%

20.4%

Tokyo

Logistics
Facilities

79.9%

57.0%

Residential
Facilities

16.9%

OfficeBuildings

45.4%

5.8%

11.6%

(near stations)

Diversification by Tenants

Ratio of Portfolio Comprised of Top Ten Properties

Ratio of Portfolio Comprised of Top Ten Tenants

General Administrator(Institutional Administration/Accounting)Transfer Agent andSpecial Account Administrator

Nomura Real Estate
Asset Management Co., Ltd.

Mitsubishi UFJ Trust and Banking Corporation
Asset Management
Agreement

Nomura Real Estate
Development Co., Ltd.
Nomura Real Estate Partners Co., Ltd.

Basic Agreement Concerning “Leasing Value Chain”

19.7%

26.0%

Asset Custody Agreement

Asset Management Company

GEO AKAMATSU CO., LTD.

Diversification by Properties

Sumitomo Mitsui Trust Bank, Limited

Nomura Real Estate
Master Fund, Inc.

Unitholders’ Meeting

Leasing Value Chain
Retail Facilities

CustodianInvestment Corporation

Nomura Real Estate Holdings, Inc.

Information Provision
Agreement

Retail Facilities(in residential areas)

Specified Related Party
Parent Company of theAsset Management Company

Growth Model

Stability Model

Other Areas

Structure of NMF

Information Provider
Nomura Real Estate Development Co., Ltd.

Transfer Agency Agreement
General Administration Agreement
Agreement Concerning Management of Special Account

Board of Directors
General Administrator (Financial Agent)

Executive Director
Satoshi Yanagita
Supervisory Director
Sadahiko Yoshimura
Shuhei Yoshida

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Nomura Securities Co., Ltd.
Mizuho Securities Co., Ltd.

AuditorErnst & Young Shin Nihon LLC

Financial Agent Agreement

Organization of NREAM
NMF
NOF
NRF

General Meeting of Shareholders

Ratio at the Former Three
REITs Before the Merger

Ratio at the Former Three
REITs Before the Merger
51.1%
52.7%
21.2%

NMF
NOF
NRF

Statutory Auditors

48.2%
27.3%
6.8%

Investment Committee

Board of Directors

Compliance Committee

President & CEO

Risk Management Committee
NPR Valuation Committee
Project Screening Committee

Note: Figures based on rents are indicated. However, the ratios are calculated based on agreements executed with the end-tenants for pass-through type master lease agreements.

Chief Strategy Officer

Portfolio Replacement Strategy
NMF’s portfolio replacement strategy calls for selling old and less competitive properties and acquiring newer and morecompetitive properties, and for effective utilization of depreciation.
What is the portfolio replacement strategy?
Old buildings with lesscompetitiveness and profitability

Sell

Reinvest money from sale

Nomura Real Estate Master FundNMF Boasts a Large and Broadly
Diversified Portfolio
Acquired
Properties

261 (No. 1 J-REIT)
Acquire young properties that are
Total acquisition
792,658 million yen
highly competitive
Acquire prices
18 Nomura Real Estate Master Fund

Lowering of average portfolio age
Reduction of maintenance andrepair fees
Effective use of depreciation…

Corporate Planning

Product Management

Legal & Compliance

Research & Analysis

Internal Audit

Acquisitions

Finance & Accounting

Investment Management Planning

Client Relations & Marketing

NMF Investment Management Group

Investment Management

Fund Management
Asset Management I
Asset Management II
NPR Investment Management

Improvement in Portfolio
Quality

Nomura Real Estate Master Fund 19

Balance Sheet

Financial Section

Thousands of Yen

As of February 29, 2016
ASSETSAs of February 29, 2016
LIABILITIESCurrent Assets:
Cash and bank deposits
Rental receivables
Income taxes receivable
Other current assets
Allowance for doubtful accounts
Total current assets¥58,325,160
436,67735
1,015,420(54)
59,777,238

Property and Equipment:
Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Leased assets
Construction in progress
SubtotalLess accumulated depreciation
Net property and equipment

523,662,007
267,849,174
569,328
224,983
24,495436,021792,766,008(10,942,164)
781,823,844

Investments and Other Assets:
Goodwill
Leasehold rights
Intangible assets
Investment securities
Long-term prepaid expenses
Long-term deposits
Security deposits
Deferred investment corporation bond issuance costs
Total investments and other assets
Total Assets

76,252,703
8,493,227
25,39991,431
742,792
89,386
977,584
23,78386,696,305¥928,297,387

The accompanying notes to financial statements are an integral part of these statements.

Thousands of Yen

Current Liabilities:
Trade accounts payable
Short-term debt
Current portion of investment corporation bonds
Current portion of long-term debt
Lease obligations
Other accounts payable
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Rent received in advance
Unearned revenue
Derivative liabilities
Other current liabilities
Total current liabilities¥2,162,601
9,100,000
5,000,000
50,015,600
8,651
1,888,592
325,814994
140,7024,394,283
369,865
37,854
298,548
73,743,504

Long-term Liabilities:
Investment corporation bonds
Long-term debt
Lease obligations
Long-term advanced received
Security deposits from tenants
Derivative liabilities
Total long-term liabilities

27,500,000
311,549,000
14,047
838,163
34,221,440
2,829,741
376,952,391

Total Liabilities

450,695,895

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
SurplusCapital surplus
Retained earnings
Total surplus
Total unitholders’ equity
Valuation and Translation Adjustments:
Deferred gains or losses on hedges
Valuation and translation adjustments

161,120,405
315,299,775
4,048,907
319,348,682
480,469,087(2,867,595)(2,867,595)

Total Net Assets

477,601,492

Total Liabilities and Net Assets¥928,297,387

The accompanying notes to financial statements are an integral part of these statements.

20 Nomura Real Estate Master Fund

Nomura Real Estate Master Fund 21

Statement of Income and Retained EarningsStatement of Changes in Net Assets

Thousands of Yen

For the period from October 1, 2015 to February 29, 2016

For the period
from October 1, 2015
to February 29, 2016

Thousands of Yen

Unitholders’ Equity

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues
Gain on investments in silent partnership
Operating Expenses:
Real estate rental expenses
Impairment Loss
Asset management fees
Asset custody fees
Administrative service fees
Merger expenses
Amortization of goodwill
Other operating expenses

Operating Profit¥24,312,612
1,066
24,313,678
11,546,709
79,0201,505,234
21,349185,996
2,590,275
1,622,398
279,520
17,830,501

Non-Operating Expenses:
Interest expense
Interest expenses on investment corporation bonds
Amortization of investment corporation bond issuance costs
Loan arrangement fees
Other offering costs associated with the issuance of investment units
Other non-operating expenses

6,064
3,907
17
97
10,085
1,408,455
294,326
1,143
297,926
436,5254,550
2,442,925
4,050,337

Income before Income Taxes

4,050,337

Net Income
Retained earnings received by merger
Retained Earnings at End of Period

CapitalSurplus––Retained
Earnings

Total
Unitholders’EquityTotal Surplus–––

3,722,010¥161,120,405¥315,299,775¥913,191¥316,212,966¥477,333,371

Cash distribution paid

–

–

–

(912,562)(912,562)(912,562)

Net income

–

–

–

4,048,278

4,048,278

4,048,278

Net changes of items
other than unitholder’sequity

–

–

–

–

–

–

3,722,010¥161,120,405¥315,299,775¥4,048,907¥319,348,682¥480,469,087

Balance as ofFebruary 29, 2016

Thousands of Yen

Valuation and Translation
Adjustments
Deferred Gains Total Valuation
and Translationor Losses on
Adjustments
HedgesBalance as of
October 1, 2015

Ordinary Income

Income Taxes:
Current
Deferred

Increase by merger

6,483,177

Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Reversal of dividends payable
Interest on refund
Other non-operating revenues

Balance as of
October 1, 2015

Surplus

Unitholders’Capital

Units

Total
Net Assets

–

–

–

Increase by merger––¥477,333,371

Cash distribution paid––

(912,562)

Net income––

4,048,278(¥2,867,595)(¥2,867,595)(2,867,595)(¥2,867,595)(¥2,867,595) ¥477,601,492

Net changes of items
other than unitholder’sequityBalance as ofFebruary 29, 2016

The accompanying notes to financial statements are an integral part of these statements.

2,019
40
2,059
4,048,278
629¥4,048,907

The accompanying notes to financial statements are an integral part of these statements.

22 Nomura Real Estate Master Fund

Nomura Real Estate Master Fund 23

Statement of Cash Flows

Notes to Financial Statements

Thousands of Yen

For the period
from October 1, 2015
to February 29, 2016
Cash Flows
Cash Flows from Operating Activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Amortization of investment corporation bond issuance costs
Interest income
Interest expense
Loss on disposal of property and equipment
Increase (Decrease) in allowance for doubtful accounts
Decrease (Increase) in rental receivables
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
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities¥4,050,337
3,472,856
79,0201,622,398
1,143(6,064)
1,702,781
6,882
54
138,204(218,802)(180)
606,537(8,392)(347,570)(524,025)
86,852
129,783
10,791,814
6,064(2,077,288)
5,251
8,725,841

Cash Flows from Investing Activities
Payments for purchases of property and equipment
Payments for purchases of leasehold rights and intangible assets
Proceeds from withdrawal of investment securities
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Payments for security deposits
Proceeds from security deposits
Net cash provided by (used in) investing activities(11,178,616)(11,882)
8,754(1,253,605)
944,334(10,000)
76(11,500,939)

Cash Flows from Financing Activities
Proceeds from short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Redemption of investment corporation bonds
Distributions to unitholders
Net cash provided by (used in) financing activities

5,000,000
29,500,000(11,082,800)(15,000,000)(8,886,988)(469,788)

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Increase in Cash and Cash Equivalents Resulting from Merger
Cash and Cash Equivalents at End of Period(3,244,886)–
61,570,046¥58,325,160

The accompanying notes to financial statements are an integral part of these statements.

24 Nomura Real Estate Master Fund

1. ORGANIZATION
Nomura Real Estate Master Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest
primarily in logistics facilities, retail facilities, offices and residential facilities. The Company is externally managed by a licensed
asset management company, Nomura Real Estate Asset Management Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiaryof Nomura Real Estate Holdings, Inc. NMF was established on October 1, 2015 through the consolidation type merger of theformer 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 the same year.
NMF adopts the basic policy of investing primarily in real estate and other assets to secure stable income and steady growth ofassets under management over the medium to long term. In order to realize this basic policy, NMF adopts an investment strategy
that centers on the Greater Tokyo area (Tokyo, Kanagawa, Chiba and Saitama prefectures) which has strong tenant demand while
also considering regional diversification through the three major metropolitan areas and cabinet-order designated cities, etc. By
combining the “diversified type strategy” in which investments are made in facilities of a variety of sectors such as logistics
facilities, retail facilities, offices and residential facilities with the “large-scale REIT strategy” which pursues the effects ofdiversifying properties and tenants to make the portfolio more stable as well as with the utilization of the “leasing value chain”
with the Nomura Real Estate Group, the sponsor, NMF will aim to increase unitholder value by securing stable income and steady
growth of assets under management over the medium to long term.

2. BASIS OF PRESENTATIONThe Company maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Act of Japan, theCompanies Act of Japan, the Financial Instruments and Exchange Act of Japan and related regulations, which are different incertain respects as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which were preparedin accordance with Japanese GAAP and were presented in the Securities Report of the Company filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been madeto the financial statements issued domestically in order to present them in a format that is more familiar to readers outside
Japan. In addition, the notes to financial statements include certain information that might not be required under Japanese
GAAP but is presented herein as additional information. Amounts have been rounded to the nearest thousand yen in theaccompanying financial statements and the notes thereto, whereas amounts were truncated in the Japanese financial statements
prepared in accordance with Japanese GAAP.
The Company’s fiscal period is a six-month period which ends at the end of February or August. The Company does not prepare
consolidated financial statements because it has no subsidiaries.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that are highly liquid,readily convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of three months or lesswhen purchased.

Property and equipment
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, less accumulated
depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the fixed assets outlined
below:
Buildings
3 - 70 years
Structures
2 - 45 years
Machinery and equipment
2 - 10 years
Tools, furniture and fixtures
2 - 15 years

Intangible assets
Intangible assets are amortized by the straight-line method.
Goodwill is amortized using straight-line method over 20 years.

Long-term prepaid expenses
Long-term prepaid expenses are amortized by the straight-line method.

Investment securities
Non-marketable securities are stated at cost determined by the moving average method.
For the silent partnership equity interest, the method of allocating the partnership’s profit/loss is based on the Company’s
proportional interest.

Nomura Real Estate Master Fund 25

Notes to Financial Statements
Impairment of fixed assets
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying value of
its fixed assets may not be recoverable. An impairment loss is recognized if the carrying value of an asset exceeds the aggregate
estimated future cash flows. If a fixed asset is determined to be impaired, it is written down to its recoverable amount and thewrite-down is recorded as an impairment loss during the period in which it occurs.

Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized by the straight-line method over the respective terms of thebonds.

Allowance for doubtful accounts
For allowance for doubtful accounts against possible losses arising from default on receivables, uncollectable amount is estimatedand recorded by investigating collectability based on historical loan loss ratios for general receivables and on a case-by-caseexamination for doubtful and other specific receivables.

Financial Section

4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of February 29, 2016 consist of the following:

Cash and bank deposits
Cash and cash equivalents
Cash and cash equivalents was increased by ¥61,570,046 thousand by the merger.

Important contents of the non-cash transactions
NMF was established through the consolidation type merger of the former NMF with the consolidated investment corporations,
namely NOF and NRF. The main breakdown of the assets and liabilities inherited from these three investment corporations is asfollows. The increase of unitholders’ capital and capital surplus are ¥161,120,405 thousand and ¥315,299,775 thousand
respectively.

Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all related
earnings and expenses incurred are reflected in the accompanying balance sheet and statement of income and retained earnings,
respectively.

Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues
including utility charge reimbursements, parking space rental revenues and other income. Rental revenues are generally
recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and theiramounts are reasonably estimated.

Property related taxes
Property in Japan is subject to property taxes, urban planning taxes and depreciable property taxes on a calendar year basis. The
taxes related to property are generally imposed based on the value of the relevant property and incurred for fiscal period.
The seller of a property is liable for property related taxes for the period from the purchase date through the end of that calendar
year because taxes are imposed on the owner registered in the record as of January 1 for the entire year based on the assessment
made by the local government. The amount applicable to the buyer of a property is usually settled between each party andcapitalized as part of the acquisition cost of the property. The capitalized property related taxes amounted to ¥5,370 thousand forthe fiscal period ended February 29, 2016.

Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax basesof assets and liabilities using the applicable statutory tax rates.

Consumption taxes
Consumption taxes received and paid are not included in the accompanying statement of income and retained earnings.

Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure
to changes in interest rates. The Company defers recognition of gains or losses resulting from changes in the fair value of interestrate swap contracts which meet the criteria for deferral hedge accounting.
Although the deferred hedge treatment is generally applied, the Company applies special treatment to those interest-rate swap
contracts that meet the criteria for such special treatment. Under the special treatment, interest-rate swaps are not remeasured atfair value; instead, the net amount paid or received under the interest rate swap contract is recognized and included in interest
expense or income.

26 Nomura Real Estate Master Fund

Thousands of Yen

As of February 29, 2016
¥58,325,160¥58,325,160

Current assets
Non-current assets
Deferred assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities

Thousands of Yen

For the period
from October 1, 2015
to February 29, 2016
¥63,281,118
783,332,892
24,926¥846,638,936
62,222,671
384,957,994¥447,180,665

5. SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of February 29, 2016 consist of the following:Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Lease assets in trust
Accumulated depreciation
Construction in progress
Total

Thousands of Yen

As of February 29, 2016
Acquisition costs
Book value¥171,862,734¥171,862,734
102,418,893(1,545,725)
100,873,168
501,737(48,242)
453,495
21,885(765)
21,120351,799,273
351,799,273
165,430,281(9,325,899)
156,104,382
67,591(2,382)
65,209203,098(15,802)
187,296
24,495(3,349)21,146
436,021436,021¥781,823,844¥781,823,844

Nomura Real Estate Master Fund 27

Notes to Financial Statements

Financial Section

6. SHORT-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBT
Short-term debt and current portion of long-term debt as of February 29, 2016 consist of the following:

Unsecured loans from banks due on May 26, 2016
Unsecured loans from banks due on February 24, 2017
Unsecured loans from a bank due on May 26, 2016
Unsecured loans from a bank due on June 26, 2016
Unsecured loans from a bank due on August 26, 2016
Unsecured loans from a bank due on August 26, 2016
Unsecured loans from a bank due on August 26, 2016
Unsecured loans from a bank due on November 26, 2016
Unsecured loans from a bank due on February 26, 2017
Unsecured loans from a bank due on February 26, 2017
Unsecured loans from a bank due on February 26, 2017
Unsecured loans from a bank due on February 26, 2017
Unsecured loans from a bank due on June 25, 2016 (Note 2)
Unsecured loans from a bank due on August 27, 2016 (Note 3)
Unsecured loans from a bank due on February 26, 2016 (Note 4)
Unsecured loans from a bank due on May 26, 2025 (Note 5)
Unsecured loans from a bank due on May 26, 2025 (Note 5)
Total

As of February 29, 2016
Weighted-averageAmount(Thousands of Yen)
interest rate (Note 1)¥4,100,000
0.17545%
5,000,000
0.67863%
1,000,000
0.52000%
9,400,000
1.11700%
3,000,000
1.10100%
2,000,000
0.79750%
3,000,000
0.44545%
13,000,000
0.64250%
1,000,000
1.07450%
2,000,000
0.88700%
1,800,000
0.69000%
4,500,000
0.49545%
6,750,000
1.97000%
1,080,000
2.10000%
1,400,000
2.03000%
42,8002.17000%
42,8002.21812%¥59,115,600

Note 1: The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings, which were
hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted average of interest.
Note 2: Repay ¥250 million of principal at each Repayment Date until December 25, 2015, and repay ¥6,750 million on December 25, 2016, the last repayment date.
Note 3: The amount of ¥40 million every Date of Repayment from February 27, 2010 to February 27, 2016, and the repayment of ¥1,080 million on August 27, 2016, the Final Date of
Repayment.
Note 4: The amount of ¥50 million every Date of Repayment from August 26, 2010 to August 26, 2016, and ¥1,350 million on February 26, 2017, the last Date of Repayment.
Note 5: Repay ¥10.7 million of principal at each repayment date during the period between August 26, 2013, and February 26, 2025, and repay ¥497.1 million on May 26, 2025, the last
repayment date.

(1) The Company entered into ¥10,000 million credit facilities in the form of commitment lines with three financial institutions
for the fiscal period ended February 29, 2016. The total unused amounts of such credit facilities were ¥5,000 million as ofFebruary 29, 2016.
(2) The Company entered into ¥30,000 million credit facilities in the form of commitment lines with three financial institutions
for the fiscal period ended February 29, 2016. The total unused amounts of such credit facilities were ¥30,000 million as ofFebruary 29, 2016.

7. LONG-TERM DEBT
Long-term debt as of February 29, 2016 consist of the following:

Unsecured loans from banks due on March 11, 2017
Unsecured loans from banks due on March 26, 2017
Unsecured loans from banks due on June 10, 2017
Unsecured loans from banks due on August 26, 2017
Unsecured loans from banks due on August 26, 2017
Unsecured loans from banks due on August 27, 2017
Unsecured loans from banks due on August 27, 2017
Unsecured loans from banks due on September 26, 2017
Unsecured loans from a bank due on December 26, 2017
Unsecured loans from banks due on February 26, 2018
Unsecured loans from banks due on February 26, 2018
Unsecured loans from banks due on February 27, 2018
Unsecured loans from a bank due on May 26, 2018
Unsecured loans from banks due on June 26, 2018
Unsecured loans from banks due on August 26, 2018
Unsecured loans from a bank due on August 26, 2018
Unsecured loans from a bank due on November 26, 2018
Unsecured loans from a bank due on November 26, 2018
Unsecured loans from a bank due on November 26, 2018

28 Nomura Real Estate Master FundAs of February 29, 2016
Weighted-averageAmount(Thousands of Yen)
interest rate (Note 1)¥5,000,000
0.39545%
1,000,000
0.25545%
3,900,000
1.43500%
750,000
0.48000%
5,000,000
0.25545%
9,000,000
1.12850%
3,920,000
1.08500%
4,000,000
0.19545%
12,900,000
1.03775%
1,000,000
1.84650%
1,500,000
0.48000%
5,420,000
1.12013%
12,200,000
0.86250%
2,000,000
1.09000%
2,000,000
1.03500%
5,400,000
0.99000%
2,000,000
0.93600%
4,000,000
0.72500%¥3,000,000
0.77650%

Unsecured loans from banks due on November 26, 2018
Unsecured loans from banks due on November 26, 2018
Unsecured loans from a bank due on February 26, 2019
Unsecured loans from a bank due on February 26, 2019
Unsecured loans from a bank due on February 26, 2019
Unsecured loans from a bank due on May 26, 2019
Unsecured loans from a bank due on May 26, 2019
Unsecured loans from a bank due on May 26, 2019
Unsecured loans from a bank due on August 26, 2019
Unsecured loans from a bank due on August 26, 2019
Unsecured loans from a bank due on August 26, 2019
Unsecured loans from a bank due on August 26, 2019
Unsecured loans from a bank due on November 26, 2019
Unsecured loans from a bank due on November 26, 2019
Unsecured loans from a bank due on November 26, 2019
Unsecured loans from a bank due on November 26, 2019
Unsecured loans from a bank due on February 26, 2020
Unsecured loans from a bank due on February 26, 2020
Unsecured loans from a bank due on May 26, 2020
Unsecured loans from a bank due on May 26, 2020
Unsecured loans from a bank due on May 27, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from a bank due on November 26, 2020
Unsecured loans from a bank due on November 26, 2020
Unsecured loans from a bank due on November 26, 2020
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on May 26, 2021
Unsecured loans from a bank due on May 26, 2021
Unsecured loans from a bank due on May 27, 2021
Unsecured loans from a bank due on May 27, 2021
Unsecured loans from a bank due on July 26, 2021
Unsecured loans from a bank due on August 26, 2021
Unsecured loans from a bank due on August 26, 2021
Unsecured loans from a bank due on November 26, 2021
Unsecured loans from a bank due on November 26, 2021
Unsecured loans from a bank due on November 26, 2021
Unsecured loans from a bank due on January 26, 2022
Unsecured loans from a bank due on February 26, 2022
Unsecured loans from a bank due on February 26, 2022
Unsecured loans from a bank due on February 26, 2022
Unsecured loans from a bank due on May 26, 2022
Unsecured loans from a bank due on August 26, 2022
Unsecured loans from a bank due on August 26, 2022
Unsecured loans from a bank due on August 26, 2022
Unsecured loans from a bank due on November 26, 2022
Unsecured loans from a bank due on November 26, 2022
Unsecured loans from a bank due on November 26, 2022
Unsecured loans from a bank due on November 26, 2022

As of February 29, 2016
Weighted-averageAmount(Thousands of Yen)
interest rate (Note 1)¥1,000,000
0.48250%
1,700,000
0.50250%
3,000,000
1.44450%
2,000,000
0.90759%
5,300,000
0.87695%
9,000,000
1.11750%
1,000,000
1.04875%
1,100,000
0.69894%
2,200,000
1.22000%
5,700,000
1.25200%
2,500,000
1.27625%4,700,000
0.81080%
1,600,000
1.16500%
4,000,000
0.72650%
5,600,000
0.54065%
3,450,000
0.37420%
5,750,000
1.01150%
2,500,000
0.64685%
10,000,000
1.33750%
800,000
1.25875%
1,000,000
1.48625%
1,100,000
1.53674%
800,000
1.28277%
4,700,000
1.18000%
500,000
1.15566%
4,500,000
1.08100%
1,000,000
0.72000%
3,500,000
0.46075%
2,350,000
0.46190%
500,000
0.47375%
5,000,000
1.35250%
2,000,000
1.17750%
2,000,000
1.19211%2,000,000
0.80832%
3,000,000
0.86350%
2,120,000
0.85050%
500,000
0.46725%2,000,000
0.22560%
8,000,000
1.56250%
1,000,000
1.46375%
1,000,000
1.68200%
3,500,000
1.62500%
4,180,000
1.23920%2,700,000
1.24100%
3,600,000
0.81585%
2,000,000
1.30289%2,000,000
1.11662%
4,900,000
0.97410%3,500,000
1.48300%
4,500,000
1.31850%
2,750,000
1.29600%
4,000,000
1.16000%
5,500,000
1.25900%
2,980,000
1.19700%
3,000,000
1.09133%
4,000,000
1.08034%
2,100,000
0.92280%
1,800,000
1.05000%
4,550,000
1.11000%¥1,500,000
0.98624%

Nomura Real Estate Master Fund 29

Notes to Financial Statements

Financial Section
As of February 29, 2016
Weighted-averageAmount(Thousands of Yen)
interest rate (Note 1)¥1,000,000
0.71221%1,500,000
0.69250%
1,300,000
1.13250%
2,000,000
1.86500%
2,000,000
1.89500%
1,000,000
1.83875%
1,000,000
1.14850%
1,000,000
1.15850%
1,000,000
1.18032%
4,000,000
1.20772%
6,100,000
1.08510%2,000,000
1.75900%
2,600,000
0.82800%
2,750,000
1.59400%
2,700,000
0.85925%
3,000,000
0.58175%
1,100,000
1.09830%
1,100,000
1.06250%
2,000,000
1.03955%
1,100,000
1.92250%
1,100,000
1.91700%
839,500
2.17000%
839,500
2.21812%¥311,549,000

Unsecured loans from a bank due on November 26, 2022
Unsecured loans from a bank due on November 26, 2022
Unsecured loans from a bank due on February 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on August 26, 2023
Unsecured loans from a bank due on August 26, 2023
Unsecured loans from a bank due on August 26, 2023
Unsecured loans from a bank due on August 26, 2023
Unsecured loans from a bank due on August 26, 2023
Unsecured loans from a bank due on November 26, 2023
Unsecured loans from a bank due on November 26, 2023
Unsecured loans from a bank due on February 26, 2024
Unsecured loans from a bank due on June 26, 2024
Unsecured loans from a bank due on August 26, 2024
Unsecured loans from a bank due on January 26, 2025
Unsecured loans from a bank due on January 26, 2025
Unsecured loans from a bank due on January 26, 2025
Unsecured loans from a bank due on October 26, 2030
Unsecured loans from a bank due on October 26, 2030
Unsecured loans from a bank due on May 26, 2025 (Note 2)
Unsecured loans from a bank due on May 26, 2025 (Note 2)
Total

Note 1: The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings, which were
hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted average of interest.
Note 2: Installments of ¥10.7 million will be made on the 26th day of every third month starting on August 26, 2013, with the remaining payment of ¥497.1 million to be repaid on May 26, 2025.

The scheduled repayment amounts of long-term debt for each of the five years after the balance sheet date (excluding the current
portion of long-term debt) are as follows.
Long-term debt

Thousands of Yen

1-2 years¥53,475,600

2-3 years¥43,685,600

3-4 years¥49,185,600

4-5 years¥49,455,600

8. INVESTMENT CORPORATION BONDS

The Company issues only non-par value investment units in accordance with the Investment Trust Act. The entire amount of theissue price of new units is designated as stated capital. The Company is required to maintain net assets of at least ¥50,000
thousand as set forth in the Investment Trust Act.

10. PER UNIT INFORMATIONThe net asset values per unit and the net income per unit as of February 29, 2016 were as follows:

Net assets per unit
Net income per unit

For the period
from October 1, 2015
to February 29, 2016
¥128,318¥1,087Note 1: The net income per unit is calculated by dividing net income by the weighted-average number of units outstanding.
Note 2: The basis for calculating net income per unit is as follows.

Net income (Thousands of Yen)
Amount not available to ordinary unitholders (Thousands of Yen)
Net income available to ordinary unitholders (Thousands of Yen)
Average number of units during the period (Units)

For the period
from October 1, 2015
to February 29, 2016
¥4,048,278–¥4,048,278
3,722,010

11. RELATED PARTY TRANSACTIONS
For the periods from October 1, 2015 to February 29, 2016
Parent Company and major corporate unitholders
Not applicable
Subsidiaries and affiliates
Not applicable
Fellow subsidiary companies
Not applicable
Directors and major individual unitholders
Not applicable

12. INCOME TAXES

Details of investment corporation bonds outstanding are summarized as follows:
As of February 29, 2016
Weighted-averageAmount(Thousands of Yen)
interest rate
NOF's 2nd series of unsecured investment corporation bonds
due on March 16, 2020
NOF's 6th series of unsecured investment corporation bonds
due on March 17, 2017
NOF's 7th series of unsecured investment corporation bonds
due on March 17, 2028
NOF's 9th series of unsecured investment corporation bonds
due on November 24, 2017
NRF's 2nd series of unsecured investment corporation bonds
due on February 24, 2017
Former NMF's 1st series of unsecured investment corporation bonds
due on October 30, 2024
NOF's 10th series of unsecured investment corporation bonds
due on November 25, 2024
Total

9. UNITHOLDERS’ EQUITY¥5,000,000

2.47%

5,000,000

2.21%

4,500,000

2.9%

4,000,000

1.52%

5,000,000

1.03%

3,000,000

0.87%

6,000,000

1.02%

The Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 34% for
the fiscal period ended February 29, 2016. However, the Company may deduct dividend distributions paid to its unitholders fromits taxable income amounts, provided such distributions meet the requirements under the Act on Special Measures Concerning
Taxation of Japan. Under this act, an investment corporation must meet a number of tax requirements, including a requirement
to distribute in excess of 90% of its distributable income for the fiscal period, in order to deduct such amounts. If the investment
corporation does not satisfy all of the requirements, the entire taxable income of the investment corporation will be subject toregular corporate income taxes.
Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling ¥8,259,140
thousand for the fiscal period ended February 29, 2016 respectively, such distributions were treated as deductible distributions
for purposes of corporate income taxes.

¥32,500,000

The scheduled redemption amounts of investment corporation bonds for each of the five years after the balance sheet date are as
follows.


Investment corporation bonds

30 Nomura Real Estate Master Fund

Within a year
¥5,000,000

1-2 years¥9,000,000

2-3 years–

3-4 years–

Thousands of Yen

4-5 years¥5,000,000

Nomura Real Estate Master Fund 31

Notes to Financial Statements

Financial Section
Fair Value of Financial Instruments

The following summarizes breakdown of deferred tax assets and liabilities:

Thousands of Yen

For the period
from October 1, 2015
to February 29, 2016
Deferred tax asset:
Valuation difference on other assets acquired by merger
Deferred gains or losses on hedges
Unearned revenue
Write-offs for long-term prepaid expenses
Impairment losses of non-repudiation
Depreciation costs of trust leasehold rights
Accrued enterprise tax
Overtime allowance for doubtful accounts
Subtotal
Valuation allowance
Total non-current deferred tax assets
Total deferred tax assets
Net deferred tax assets¥15,343,108
926,521389,900
36,451
25,531500
97
17¥16,722,125(¥16,722,125)–––

The net income per unit is calculated by dividing net income by the weighted-average number of units outstanding.

Statutory tax rate
Deductible cash distributions
Valuation of allowance
Amortization of goodwill
Other
Effective tax rate

For the period
from October 1, 2015
to February 29, 201632.31%(58.38%)13.16%
12.94%
0.01%
0.05%

13. FINANCIAL INSTRUMENTS
Overview(1) Policy for Financial Instruments
Upon acquisition of property-related assets, the Company may raise funds through certain financing methods including
borrowings, issuance of investment corporation bonds and issuance of investment units. In financing through interestbearing debt, to secure stable financing capability and reduce future risks of rising interest rates, the Company’s investment
policy is to secure longer-term, fixed-rate borrowings with well-diversified maturities.
The Company enters into derivative transactions only for the purpose of reducing risk of future interest rate fluctuations anddoes not engage in speculative transactions.
(2) Type and Risk of Financial Instruments and Related Risk Management
Debts and investment corporation bonds are primarily used to fund the acquisition of property-related assets as well as therepayment of debts and redemption of investment corporation bonds. The Company is exposed to liquidity risk of being
unable to meet its obligations on scheduled due dates. The Company controls and limits such risk by diversifying not only thefinancial institutions, but also the type of financing to include the effective use of surplus funds and direct financing from thecapital markets such as issuance of investment units. In addition, the Company is exposed to the market risk arising fromfluctuations in interest rates on its floating-rate debts. However, the effect of such risk on the operation of the Company islimited by maintaining the LTV ratio at low levels and the ratio of long-term fixed-rate debts to total debt at high levels.
Furthermore, the Company may utilize derivative transactions (interest-rate swap transactions) as a hedging instrument to
reduce the market risk under floating-rate debts by swapping such floating-rate interest payments for fixed-rate interest
payments.
Bank deposits are held as a means of investing surplus funds, and the Company is exposed to the credit risk that financial
institutions may default. However, the effect of such risk is limited by diversifying the financial institutions with whichsurplus funds are deposited.
(3) Supplementary Explanation on Estimated Fair Value of Financial Instruments
The fair value of financial instruments is based on the quoted market price, if applicable. When there is no quoted market
price available, fair value is reasonably estimated. Certain assumptions are used for the estimation of fair value. Accordingly,
the result of such estimation may change if different assumptions are used. Furthermore, the contractual amounts ofderivative transactions stated in “19. Derivatives and Hedge Accounting” below do not represent the market risk involved inthese derivative transactions.

For the period from October 1, 2015 to February 29, 2016
The following table summarizes the carrying value and the estimated fair values of financial instruments as of February 29, 2016.
(i) Cash and bank deposits(ii) Short-term debt
Current portion of investment corporation
(iii)
bonds
(iv) Current portion of long-term debt(v) Investment corporation bonds(vi) Long-term debt(vii) Derivative transactions

Thousands of Yen

Carrying value (Note 1)¥58,325,160(9,100,000)

Fair value (Note 1)¥58,325,160(9,100,000)

Difference––(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–

Note 1: The numbers in parenthesis indicate liabilities.
Note 2: Method for determining the fair value of financial instruments and derivative transactions(i) Cash and bank deposits and (ii) Shot-term debt
		 As these items are settled within a short-term period, their fair value is nearly equal to the carrying value. Therefore, for these items, the carrying value is reported as the fair value.
(iii) Current portion of long-term debt and (iv) Long-term debt
		For floating-rate long-term debt, the carrying value is reported as it is considered to be approximately equal to the fair value because such debt reflects the market interest rates withina short-term period. (However, the fair value of certain floating-rate long-term debt that qualifies for the special treatment of interest-rate swaps (see “19. Derivatives and Hedge
Accounting”) is determined by discounting the sum of its principal and interest payments net of any cash flows from the interest-rate swap at a rate reasonably estimated to be
applicable to similar fixed-rate debt.) The fair value of fixed-rate long-term debt is determined by discounting the sum of its principal and interest payments at a rate reasonably
estimated to be applicable to similar fixed-rate debt.
(v) Derivative transactions
		 See “19. Derivatives and Hedge Accounting.”
Note 3: Financial instruments for which fair value is difficult to determine

Thousands of Yen

Type of asset
Investment securities

As of February 29, 2016
¥91,431(*) The fair value of the investment securities is not disclosed because there is no quoted market price available for these securities and it is extremely difficult to determine the fair value.
Note 4: Redemption schedule for cash and bank deposits as of February 29, 2016


Cash and bank deposits
Total

Due within
After one year,
After two years, After three years, After four years,
one yearwithin two years within three years within four years within five years¥58,325,160––––¥58,325,160––––

Thousands of Yen

After five years––

Note 5: Redemption schedule for debt as of February 29, 2016
Short-term debt
Investment corporationbonds
Long-term debt
Total

Due within
After one year,
After two years, After three years, After four years,
one yearwithin two years within three years within four years within five years¥9,100,000––––¥5,000,000¥9,000,000––¥50,015,600¥64,115,600¥53,475,600¥62,475,600¥43,685,600¥43,685,600¥49,185,600¥49,185,600¥5,000,000

Thousands of Yen

After five years–¥13,500,000¥49,455,600 ¥115,746,600¥54,455,600 ¥129,246,600

14. INVESTMENT AND RENTAL PROPERTIESThe Company owns leasable office, 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 table summarizes the carrying
value and the estimated fair value of these properties.


Thousands of Yen

For the period
from October 1, 2015
to February 29, 2016
Carrying value
Balance at beginning of the period
Amount of increase (decrease) during the period
Balance at end of the period
Fair value at end of the period¥781,610,588
8,696,317
790,306,905¥829,072,000

Note 1: The carrying value represents the acquisition cost less accumulated depreciation.
Note 2: The major increase in the carrying value during the period ended February 29, 2016 was mainly due to the acquisition of NRE Kichijoji Building™ (¥5,347,396 thousand) and GEMS
Ichigaya (¥2,112,624 thousand) and PROUD FLAT Hatchobori (¥962,150 thousand) and PROUD FLAT Itabashi Honcho (¥767,484 thousand) and decrease in the carrying value during theperiod ended February 29, 2016 was mainly due to depreciation (total ¥3,471,460 thousand).
Note 3: The fair value as of February 29, 2016 represents the sum of the appraisal values estimated by external real estate appraisers.

The real estate rental revenues and expenses for the fiscal period ended February 29, 2016 are presented in “16. Breakdown ofReal Estate Rental Revenues and Expenses”.
32 Nomura Real Estate Master Fund

Nomura Real Estate Master Fund 33

Notes to Financial Statements

Financial Section

15. SEGMENT INFORMATION
For the periods from October 1, 2015 to February 29, 2016
Segment Information
Since the Company has been engaged in the real estate leasing business as a single segment, segment information has been
omitted.

Related Information
1. Information about products and services	Since revenues from external customers of products and services within a single segment are more than 90 percent of total
operating revenues, information about products and services has been omitted.
2. Information about geographical areas(1) Revenues		Since more than 90 percent of the total operating revenues were generated from external customers in Japan,
geographical breakdown of revenues has been omitted.
(2) Property and equipment
		Since more than 90 percent of the total property and equipment on the balance sheet are located in Japan, geographicalbreakdown of property and equipment has been omitted.
3. Information about major clients
Customer name
Nomura Real Estate Partners Co., Ltd.

Revenues (Thousands of Yen)
3,542,264

Related segment nameRental real estate businessThousands of Yen

For the period
from October 1, 2015
to February 29, 2016¥24,312,612
22,286,436
20,176,657
2,109,779
2,026,176
450,566
1,529,932
45,678
11,546,709
1,378,031
654,354
2,114,886
1,389,966
30,985
1,555,617
162,378
3,471,462
789,030¥12,765,903

17. IMPAIRMENT LOSSIn the fiscal period ended February 29, 2016, the Company recorded impairment loss on the following asset group.
Property nameToho Edogawabashi Building
PRIME URBAN Nakano
PRIME URBAN Urayasu II

Use

Type

Location

OfficeResidential
Residential

Buildings, land, etc.
Buildings, land, etc.
Buildings, land, etc.

Tokyo
Tokyo
Chiba

Impairment loss
(Thousands of Yen)

¥50,924
20,959¥7,137

In calculating impairment loss, each property is considered a single asset group. In the fiscal period ended February 29, 2016,
based on their intended sale and the conclusion of a purchase agreement on March 30, 2016 for the above three of fixed asset
groups, the book value was reduced to the recoverable amount and the difference was charged to the operating expenses accountas impairment loss.

34 Nomura Real Estate Master FundThe future minimum rental revenues from tenants under non-cancelable operating lease of properties as of February 29, 2016 aresummarized as follows:

Thousands of Yen

As of February 29, 2016
¥23,715,979
58,287,999¥82,003,978

Due within one year
Due after one year
Total

19. DERIVATIVES AND HEDGE ACCOUNTING
Derivative transactions as of February 29, 2016
(1) There were no derivative financial instruments not subject to hedge accounting.
(2) Derivative financial instruments subject to hedge accounting were as follows: Thousands of Yen

Hedge accounting
methodReal estate rental revenues and expenses for the fiscal period ended February 29, 2016 consist of the following:

Real estate rental revenues
Rental revenues
Rental revenues
Common area charges
Other rental revenues
Parking revenues
Incidental income
Other miscellaneous revenues
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
Real estate rental profits

18. LEASES

Notional amount

16. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES


Furthermore, as the impairment loss arising from the sale is deemed to be similar to operating expenses in nature, it was charged
to the operating expenses account in accordance with Article 48, Paragraph 2 of the “Regulations Concerning Accounting ofInvestment Corporations”.
In addition, the recoverable amount of the asset groups was determined by the net selling value. The net selling value is calculated
as the actual selling price net of the estimated selling-related expenses.

Principal treatment
methodSpecial treatment ofinterest-rate swaps

Type of derivative
instruments
Interest-rate swaps:
Received/floating andpaid/fixedInterest-rate swaps:
Received/floating andpaid/fixed
Total

Main hedged
itemLong-term debt

(Note 1)

¥149,700,000

Fair value (Note 2)

Due after
one year¥130,457,200(¥2,882,186)(Note 3)Long-term debt

103,382,300

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

¥253,082,300¥220,796,700(¥5,374,397)

Note 1: Contract amount is based on notional amount.
Note 2: Fair value is calculated by 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, since adopting special treatment for interest-rate swaps.

20. CASH DISTRIBUTIONS


1. Retained earnings at end of period

Thousands of Yen

For the period
from October 1, 2015
to February 29, 2016
¥4,048,907,447

2. Distributions in excess of retained earnings
Of which, allowance for temporary difference adjustment
Of which, other distributions in excess of net income¥7,079,263,020¥6,137,594,490¥941,668,530

3. Distributions[Distribution per unit]
Of which, distributions of earnings[Of which, other distributions in excess of net income (per unit)]
Of which, allowance for temporary difference adjustments[Of which, distributions in excess of retained earnings per unit
[allowance for temporary difference adjustments]]
Of which, other distributions in excess of net income[Of which, distributions in excess of retained earnings per unit
[other distributions in excess of net income]]¥8,259,140,190(¥2,219)¥1,179,877,170(¥317)¥6,137,594,490

4. Retained earnings carried forward¥2,869,030,277(¥1,649)¥941,668,530(¥253)

Nomura Real Estate Master Fund 35

Notes to Financial Statements

Financial Section

Calculation method of distribution amountConcerning distributions for the 1st fiscal period, the Company set the distribution per unit at ¥2,219.
With regard to the above distribution, in order to include the maximum amount of earnings distributions in tax deductible
expenses in accordance with the special measures for the 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 net income as stipulated in
Article 136 Paragraph 1 of the Investment Trust Act, excluding fractional amounts of the earnings distribution per investment
unit less than one yen. Accordingly, the Company declared an earnings distribution per investment unit (excluding distributions
in excess of earnings) of ¥317.
In addition, in accordance with the distribution policy stipulated in the Articles of Incorporation and in consideration of the
impact that costs related to the merger, such as amortization costs of goodwill and reduction in net assets (as described in Article
2 Paragraph 2 (30) (b) of the Calculation Rules for Investment Corporations; together with costs related to the merger such asamortization costs of goodwill (hereafter, “merger-related costs, etc.”)) will have on distributions, NMF will distribute a
distribution in excess of earnings that it decides with the amount equivalent to the merger-related costs (hereinafter,“distribution in excess of earnings”). When making distributions in excess of earnings, if each period’s distribution of theallowance for temporary difference adjustments (that which is stipulated in Article 2 Paragraph 2 (30) (b) of the Calculation Rules
for Investment Corporations) is less than the amount of merger-related costs, etc., then other distribution in excess of net income
will also be made.
For the fiscal period ended February 29, 2016, the Company decided to pay out ¥7,079 million of distributions in excess ofearnings, which is the sum of ¥1,622 million of amortization expenses for goodwill, ¥2,590 million of fees paid to the AssetManagement Company for the merger and ¥2,867 million of deferred losses on hedges as well as pay out ¥6,137 million as
distribution of allowance for temporary difference adjustments, and so the per unit distribution of allowance for temporary
difference adjustments was ¥1,649. In addition, the Company decided to pay out ¥941 million of other distribution in excess of
net income, and so the per unit distribution of other distribution in excess of net income was ¥253.

21. INFORMATION ON ALLOWANCE FOR TEMPORARY DIFFERENCE
ADJUSTMENTS
Reason, related assets and amounts


Related assets, etc.
Goodwill
Land, buildings, etc.
Land, buildings, etc.
Deferred gains or losses on hedges
Increase - subtotal
Buildings, building improvements, etc.
Investment corporation bond issuance
costs
Unearned income, etc.
Other
Decrease - subtotal
Total

ReasonAmortization of goodwill
Merger-related costs
Impairment loss
Loss on interest-rate swaps recognized at
the end of the fiscal period

Thousands of Yen

Allowance for temporary difference
adjustments¥1,622,398
2,638,862
79,020Depreciation deficiency equivalent
Investment corporation bonds issuancecost amortization deficiency equivalent
Write-down of loss on interest rate swap
due to merger–

2,867,595
7,207,875(790,132)(97,557)(172,304)(10,287)(1,070,280)¥6,137,594

Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.
(2) Merger-related costs
Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust, etc.
Leasehold
Leasehold in trust
Investment securities

Method of reversal
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.
Upon redemption, etc., the corresponding amount is scheduled to be reversed.

(3) Impairment loss
At the time of the sale of the relevant property, the corresponding amount is scheduled to be reversed.
(4) Deferred gains or losses on hedges
Based on changes in the fair value of the hedging instruments, the corresponding amount is scheduled to be reversed.
36 Nomura Real Estate Master Fund

22. BUSINESS COMBINATION
Current fiscal period (From October 1, 2015 to February 29, 2016)
Business Combination through Acquisition
1. Overview of Business Combination(1) Name and Business Description of Acquirees
Names of acquirees
Nomura Real Estate Office Fund, Inc. (“NOF”)
Nomura Real Estate Residential Fund, Inc. (“NRF”)

Business description
Real estate investment trust
Real estate investment trust(2) Main Reasons for 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 the asset size anddiversifying target investment sectors. In addition, NMF believed that it could achieve both growth and 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 Business Combination
A consolidation-type merger involving the former NMF, and NOF and NRF, as the consolidated investment corporations.
(5) Name of the Investment Corporation after Business Combination
Nomura Real Estate Master Fund, Inc.
(6) Main Reasons for Determining Acquiring Company[1] The former NMF’s unitholders hold the most voting rights among the three investment corporations.
[2] The Company’s Board of Directors is constituted from the former NMF’s Board of Directors.
2. Operating Period of Acquirees Included in the Statement of Income and Retained Earnings
Names of acquirees
NOF
NRF

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

3. Acquisition Cost of Acquirees and the Breakdown
Names of acquirees
NOF
NRF
Total

Acquisition cost
¥205,604,427 thousand¥109,695,348 thousand¥315,299,775 thousand

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

The Company
1.00

Former NMF
1.00

NOF
3.60

NRF
4.45

(2) Method of Calculation
Each investment corporation appointed a financial advisor for the merger and requested each financial advisor to perform afinancial 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. (hereafter, referred to as the “FA”).
The merger ratios were calculated based on factors such as financial position, asset status and future outlooks, and themerits of the merger were comprehensively considered upon reference to the results of the calculations of the financial
position by each FA, leading to an agreement among the former NMF, NOF and NRF with regard to the above merger ratios.
(3) Number of Investment Units Granted
Names of acquirees
NOF
NRF

Investment units issued
1,341,190 units
715,560 units

5. Details on and Amount of Main Acquisition-Related Expenses
Description
FA feesAcquisition fees for merger

Relevant investment corporation
Former NMF
NMF

Amount¥600,000 thousand¥2,590,275 thousand

Nomura Real Estate Master Fund 37

Notes to Financial Statements

Financial Section

6. Amount and Reason for Goodwill(1) Amount of Goodwill¥77,875,100 thousand(2) Reason
Goodwill resulted from the acquisitions of NOF and NRF, the former for ¥205,604,427 thousand (acquisition price), which
exceeded the acquisition-date fair value of its net assets of ¥159,932,291 thousand, and the latter for ¥109,695,348
thousand (acquisition price), which exceeded the acquisition-date fair value of its net assets of ¥77,492,382 thousand.
(3) Method of Goodwill Amortization and Amortization Period
Goodwill is being amortized using straight-line method over 20 years.
7. Breakdown of Assets Accepted Acquired and Liabilities AssumedThousands of Yen

Current assets
Non-current assets
Total assets¥39,178,399
518,620,230¥557,798,629

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 Ended February 29, 2016 Assuming
the Business Combination was Completed at the Beginning of the Fiscal Period
Not applicable because the acquisition date was at the beginning of the fiscal period.

23. SIGNIFICANT SUBSEQUENT EVENTSAsset transfers(1) The Company concluded a sales and purchase agreement with a Tokutei Mokuteki Kaisha on March 30, 2016, after the end of
the 1st fiscal period (February 29, 2016) regarding the assets stated below, and it concluded the asset transfer on April 12,2016.
A corresponding net gain on transfer of property will be recorded in “Operating Revenues” for the 2nd fiscal period (fromMarch 1, 2016 to August 31, 2016).
Property name
Central Shintomicho Building
Toho Edogawabashi Building (Note 2)
Toshin Meguro Building
PRIME URBAN Ochiai
PRIME URBAN Nakano (Note 2)
PRIME URBAN Ekoda
PRIME URBAN Urayasu II (Note 2)
PRIME URBAN Yamahana

Type
Buildings in trust, land intrust, etc.
Buildings, land, etc.
Buildings in trust, land intrust, etc.
Buildings, land, etc.
Buildings, land, etc.
Buildings, land, etc.
Buildings, land, etc.
Buildings, land, etc.
Total

Use

Transfer priceMillions of Yen(2) The Company concluded a sales and purchase agreement with the following buyers on May 17, 2016, after the end of the 1st
fiscal period (February 29, 2016) regarding the assets stated below, and concluded the asset transfer on May 17, 2016.
A corresponding net gain on transfer of property will be recorded in “Operating Revenues” for the 2nd fiscal period (fromMarch 1, 2016 to August 31, 2016).
Property NameType

Buildings intrust, land in(Note 1)
trust, etc.
Buildings in
NOF Tameike Building
trust, land intrust, etc.
Buildings in
NOF Minami Shinjuku
trust, land in
Building
trust, etc.
Buildings in
NOF Shinagawa Konan
trust, land in
Building
trust, etc.
Yokohama Odori Koen Buildings,
Building
land, etc.
JCB Sapporo Higashi
Buildings,
Building
land, etc.
PRIME URBAN
Buildings,
Hatagayaland, etc.
PRIME URBAN Sangen Buildings,
Jaya IIland, etc.
PRIME URBAN
Buildings,
Kamikitazawa
land, etc.
Total
NOF Nihonbashi
Honcho Building (49%)

Use

Date ofagreement

Date ofdisposition

Transferee

OfficeOfficeMay 17,2016

May 17,2016

Nomura Real
EstateDevelopment
Co., Ltd.

OfficeMillions of Yen

Impact on earnings

Transfer
price(from March 1, 2016 toAugust 31, 2016)¥11,270

¥761

4,500

(327)

2,380

151

OfficeOfficeOfficeMay 17,2016

May 17,
2016

Undisclosed(Note 2)

10,633410(Note 3)(Note 3)

¥28,783¥995

Residential
Residential
Residential

Note 1: Of the beneficial interest in real estate trust owned by the Company, a portion (quasi-co-ownership interest: 49%) is scheduled to be transferred. The Company will continue to own
the other section of the trust beneficial interest (quasi-co-ownership interest: 51%).
Note 2: As the Company has not obtained consent from the buyer, this information is not disclosed.
Note 3: This transaction involved a single buyer under a single purchase agreement. The purchase price of each individual property is not disclosed as consent to the disclosure thereof has
not been obtained. In addition to the foregoing, the difference between the purchase price and the book value of each individual property is also not disclosed.

Gain (loss) on
transfer of property(from March 1, 2016 toAugust 31, 2016)

OfficeOfficeOfficeResidential
Residential
Residential
Residential
Residential

Undisclosed(Note 1)

¥5,350–¥132

Note 1: This transaction involves a single buyer under a single purchase agreement. The purchase price of each individual property is not disclosed as the buyer’s consent to the disclosure
thereof has not been obtained. In addition to the foregoing, the difference between the purchase price and the book value of each individual property is also not disclosed.
Note 2: Loss arising from the intended sales of these properties was recognized as “Impairment loss” during the fiscal period ended February 29, 2016. The corresponding information ispresented in “17. Impairment Loss”.

38 Nomura Real Estate Master Fund

Nomura Real Estate Master Fund 39

Independent Auditor’s Report

Investor Information
IR Calendar
Announcement of financial results(mid-April)

January

February

March

April

Fiscal period end(end of February)

Announcement of financial results(mid-October)

May

June

Commencement of payment of distributions
Dispatch of Asset Management Report(mid-May)

Number of Investment Units
Individuals and others

381,812 units (10.3%)

July

Fiscal period end(end of August)Financial institutions(including financial instruments business operators)

1,986,431 units (53.4%)

Foreign corporations

1,034,618 units (27.8%)

Number of Unitholders
Financial institutions (including financial instruments business operators)

186 (0.5%)

Individuals and others

33,108 (96.8%)

Other domestic corporations 519 (1.5%)
Foreign corporations 403 (1.3%)

OctoberNovember

DecemberCommencement of payment of distributions
Dispatch of Asset Management Report(mid-November)

Top 10 Unitholders

Other domestic corporations

319,149 units (8.6%)

SeptemberAugustUnitholder

Units heldShare

1 Japan Trustee Services Bank, Ltd.

952,955

25.60%

2 The Master Trust Bank of Japan, Ltd.

267,142

7.18%

3 Trust & Custody Services Bank, Ltd.

265,812

7.14%

4 Nomura Real Estate Development Co., Ltd.

210,671

5.66%

5 The Nomura Trust and Banking Co., Ltd.

127,340

3.42%

6 STATE STREET BANK WEST CLIENT - TREATY 505234

94,343

2.53%

61,384

1.65%

46,2181.24%

9 SIX SIS FOR SWISS NATIONAL BANK

38,277

1.03%

10 NOMURA BANK (LUXEMBOURG) S.A.

35,1530.94%

2,099,295

56.40%

STATE STREET BANK - WEST PENSION FUND
CLIENTS - EXEMPT 505233
THE BANK OF NEW YORK, NON - TREATY JASDEC8ACCOUNT
7

Total
Note: The figures are based on data as of February 29, 2016.

Guide to Website
http://www.nre-mf.co.jp/en/
The website is going through a dramatic update with the endof the first fiscal period and will have an entire new set of data
installed. We hope that you will take the time to access andview the new site. The English website is at http://www.
nre-mf.co.jp/en/.
Disclosure materials of the former three REITs before themerger are also available at “Disclosure Materials” under“Investor Relations.”

40 Nomura Real Estate Master Fund

Nomura Real Estate Master Fund 41