December 9, 2011
To All Concerned Parties
Issuer of Real Estate Investment Trust Securities
1-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo 103-0022
Nippon Accommodations Fund Inc.
Executive Director Yuji Yokoyama(Code number 3226)
Investment Trust Management Company
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
President and CEO Kosei Murakami
Contact CFO and Director Morio Shibata(TEL 03-3246-3677)

Notification Concerning Acquisition of Domestic Real Estate Property
This is a notification that Nippon Accommodations Fund Inc. (“NAF”) decided on and completed the acquisitionof real estate property in Japan as shown below.

1. Reason for Acquisition
Based on the provisions for investments and policies on asset management provided in the Articles ofIncorporation, the decision to acquire the following property was made to ensure the steady growth of theentire portfolio, and for the diversification and further enhancement of the investment portfolio in Tokyo’s 23
wards.

2. Overview of Acquisition(1) Name of property acquired

Park Axis Higashi Jujo

(2) Type of property acquired

Real estate(3) Acquisition price (Note 1)¥1,700,000 thousand(4) Appraised value (Note 2)¥1,750,000 thousand(5) Date of conclusion of sales contract

December 1, 2011

(6) Date of handover (planned)

January 17, 2012(7) Seller

Sumitomo Forestry Co., Ltd.

(8) Acquisition funds

Borrowings and own funds(9) Method of payment

Full payment at time of delivery(Note 1)“Acquisition price” denotes the trading value (exclusive of miscellaneous expenses for acquisition, fixed
property taxes, urban planning taxes, consumption taxes, and local consumption taxes) specified in the realestate sales contract for the property acquired.

(Note 2)

“Appraised value” is based on the amount mentioned in the real estate appraisal report (as of September 30,2011) which Morii Appraisal & Investment Consulting, Inc., prepared for the property acquired.

3. Description of Property Acquired(1) Outline of the property acquired
Name of property acquired
Type of property acquired
Appraisal company
Appraised value (Note 1)
Date of value appraisal (Note 1)

Park Axis Higashi Jujo
Real estateMorii Appraisal & Investment Consulting, Inc.
¥1,750,000 thousand
September 30, 2011

Location

Residence indication

5-9 Higashi-Jujo 2-chome, Kita-ku, Tokyo

Building-to-land ratio
Floor-area ratio
ZoningSite area (Note 2)
Ownership form
Completion date (Note 3)

80% / 80%
500% / 300%
Commercial zone, neighborhood commercial zone2763.31 m
Proprietorship
February 28, 2007

Structure / number ofstories (Note 4)

Flat-roofed reinforced concrete structure / 13 stories

Uses (Note 4)

Apartment building / retail facilities / parking lot / garage / garbage
collection point

Land

Building

Gross floor area (Note 4)
Ownership form
Rentable units
Rentable area
Existence of security interests
Special affairs (Note 5)

3,149.01 m2
Proprietorship
70 residential / 1 retail, etc.
22,893.54 m
None
None

Special features of the property

The property is a three-minute walk from Higashi-Jujo Station on
the JR Keihin Tohoku Line, and has good accessibility to thestation. In addition, it is a ten-minute walk from Oji-Kamiya Stationon the Tokyo Metro Namboku Line, thus multiple stations and lines
can be used.
From Higashi-Jujo Station, it is approximately 17 minutes to Tokyo
Station by express train on JR Keihin Tohoku Line and Negishi
Line, and approximately 22 minutes to Nagatacho Station fromOji-Kamiya Station on the Tokyo Metro Namboku Line, providing
excellent access to central Tokyo.
The shopping district in front of Higashi-Jujo Station flourisheswith restaurants, etc. lending to high convenience in daily life.
Demand can be expected mainly from businesspersons, families,
etc., who stress value on location and living conditions.

Details of tenants(Note 6)

Total number of tenants
Rentable units
Rented units
Rentable area
Rented area
Occupancy rate
Deposit
Total rental revenues

1
71
71
2
2,893.54 m
22,893.54 m
100.0%¥27,187 thousand
Please refer to <Attached Document 1>
Summary of the appraisal report on theamount of the property acquired.

(Note 1)

“Appraised value” and “Date of value appraisal” are stated based on the amount mentioned in the real estate(Note 2)“Site area” of the “Land” item denotes the land area as entered in the register.

(Note 3)“Completion date” of the “Building” item denotes the date as entered in the register.

appraisal report which Morii Appraisal & Investment Consulting, Inc. prepared for the property acquired.

(Note 4)“Structure / number of stories,” “Uses,” and “Gross floor area” are stated based on the entries in the register.

(Note 5)

“Special affairs” denotes matters which NAF recognizes as important as of today, taking into consideration(Note 6)

Description of the “Details of tenants” column:

their effects on title-related matters, use, appraised value, profitability, etc. of the property acquired.
(i)“Total number of tenants” is denoted as “1 tenant” where a master lease contract (blanket lease
contract) has been concluded with a master lease company. As to the property acquired, NAF has
concluded a master lease contract with the master lease company, that is, Mitsui Fudosan Housing
Lease Co., Ltd. The above “Total number of tenants” means the total number of tenants after conclusionof the said master lease contract.

(ii) “Rentable units” denotes the number of rentable units in the property acquired.
(iii) Figures for “Rented units,” “Rented area,” and “Deposit” are based on information provided by the seller,
valid as of November 16, 2011.
(iv) “Rentable area” denotes the total rentable area of the building of the property acquired.
(v) “Occupancy rate” is the ratio of “Rented area” to “Rentable area” and is rounded to one decimal place.

(2) Effect on NAF financial position in the event of inability to execute forward commitments, etc.
The sales contract related to the above acquired property (the “Sales Contract”) is applicable as forward
commitments (Note) by investment corporation pursuant to the general supervisory policy for financial
instruments firms released by the Financial Services Agency.
In the event of a violation of the terms and conditions of the Sales Contract with respect to NAF or the seller,
the opposing party may cancel the Sales Contract and claim an amount equivalent to 20% of the trading value ofthe property whose contract was cancelled as a penalty.
(Note):

Referring to a postdate sales contract under which payment and delivery shall be made at least 1 monthafter the conclusion of the contract, or any other contract similar thereto.

(3) Outline of investigations into the state of the building, etc.
Consigned investigating company
Investigations
into the stateof building

Earthquake
risk diagnosis(Note)

Sumitomo Mitsui Construction Co., Ltd.

Investigated date
Urgent repair cost
Short-term repair cost
Repair and renewal costs
expected to be necessary within
12 years
Replacement value

October 14, 2011–¥272 thousand

PML value (Note)

6.8%¥37,123 thousand¥726,645 thousand

The PML value is based on a report on earthquake risk diagnosis made by Sumitomo Mitsui Construction
Co., Ltd. However, the report on earthquake risk diagnosis only states the views of the consigned
investigating company and does not provide any guarantee for its contents. PML (Probable Maximum Loss)represents the rate of probable maximum loss to be caused by earthquakes. In this case, it means theextent of damage to be caused by one of the biggest earthquakes anticipated to happen within the expected
duration of service (the biggest earthquake which happens once every 475 years = 10% chance of a big
earthquake happening once every 50 years) represented by the rate (%) of the estimated cost of restorationfrom the damage to the replacement cost.

Profile of third party investigative body
Trade Name
Head office address
Representative
Description of principal operations
CapitalRelationship with NAF and Investment
Trust Management Company

Sumitomo Mitsui Construction Co., Ltd.
1-6, Tsukuda 2-chome, Chuo-ku, Tokyo
Yoshiyuki Norihisa, President and Chief Executive Officer
Design and construction of civil engineering, building, prestressed
concrete work and related operations, and others¥12,003 million
None

4. Outline of Seller
Trade name

Sumitomo Forestry Co., Ltd.

Head office address

3-2 Otemachi 1-chome, Chiyoda-ku, Tokyo

Representative

Akira Ichikawa, President and Director

Description of principal
operations

Timber and building materials business, etc.

CapitalDate of establishment
Net assets
Total assets

Major stockholders andshareholding ratio (as ofMarch 31, 2011)¥27,672 million
February 20, 1948
¥144,168 million (as of March 31, 2011)¥440,578 million (as of March 31, 2011)
Shareholder

Shareholding ratio

Sumitomo Metal Mining Co., Ltd.

5.70%

The Master Trust Bank of Japan, Ltd.
(Trust Account)

4.36%

The Iyo Bank, Ltd.

3.30%

Japan Trustee Services Bank, Ltd.
(Trust Account)

3.12%

Sumitomo Corporation

2.47%

Relationship between NAF or the Investment Trust Management Company, and seller

Capital relationships

Personal relationships

Business relationships

Applicability to relatedparties

There are no capital relationships to report between NAF or the Investment
Trust Management Company, and the seller. Also, there are no capital
relationships to report between any related parties or associatedcompanies of NAF or the Investment Trust Management Company, andany related parties or associated companies of the seller.
There are no personal relationships to report between NAF or theInvestment Trust Management Company, and the seller. Also, there are no
personal relationships to report between any related parties or associatedcompanies of NAF or the Investment Trust Management Company, andany related parties or associated companies of the seller.
There are no business relationships to report between NAF or theInvestment Trust Management Company, and the seller. Also, there are nobusiness relationships to report between any related parties or associatedcompanies of NAF or the Investment Trust Management Company, andany related parties or associated companies of the seller.
The seller does not fall under the category of related parties of NAF or theInvestment Trust Management Company. Also, the related parties andassociated companies of the seller do not fall under the category of relatedparties of NAF or the Investment Trust Management Company.

5. Transactions with Related Parties and the Like
The property acquired has not been acquired from a party classified as having a relationship of special
interest with NAF or the Investment Trust Management Company. Please note that since Mitsui Fudosan
Housing Lease Co., Ltd., which will be the master lease company and property management company of theacquired property, constitutes “Related parties and the like” (Note) in accordance with NAF’s self-establishedrules on asset management relevant to transactions with related parties and the like, the master lease contract
and property management contract have been carried out through deliberation and decision by the compliancecommittee of the Investment Trust Management Company and the investment committee.
(Note)“Related parties and the like” means related parties and the like of an Investment Trust Management
Company which has concluded an asset management contract with NAF, as determined in the Order for
Enforcement of the Act on Investment Trust and Investment Corporation, Article 123.

6. Situation of the Acquirer of the Property
Not applicable.

7. Earthquake Resistance Matters
NAF outsourced the inspection and verification of the details of earthquake-resistant structures including
structural calculation sheets and, for corresponding building, obtained confirmation that, no falsification issuspected in the structural calculation and structural drawings with respect to their structure, which ensures
earthquake resistance as per the Building Standards Act.
In addition NAF always performs earthquake risk diagnosis based on drawing reviews using structuredrawings structural design outlines, etc., as well as on on-site inspection and the like during the course of due
diligence upon acquisition of properties, from perspectives that are different to building certification
investigations performed by an inspection and certification agency.

8. Outline of Brokerage
There was no brokerage for the transactions of the property.

9. Outlook for Management of the Property after Acquisition
The acquisition will have little impact on the operational status of NAF in the fiscal period ending February
2012 (period from September 1, 2011 to February 29, 2012), and there are no plans to revise the financial
results forecast.

*

The Japanese original document was distributed to press clubs within the Tokyo Stock Exchange(Kabuto Club) and the Ministry of Land, Infrastructure, Transport, and Tourism and to the press clubof the construction trade newspaper of the Ministry of Land, Infrastructure, Transport and Tourism.

*

NAF website: http://www.naf-r.jp/english/index.html

Please note that this English language notice is a translation of the Japanese language notice dated December
1, 2011 and was prepared solely for the convenience of, and reference by, overseas investors. NAF makes nowarranties as to its accuracy or completeness.

<Attached Documents>
1. Summary of the appraisal report on the amount of the property acquired
2. Portfolio list after the acquisition of the property is completed (on an acquisition price basis)

<Attached Document 1> Summary of the appraisal report on the amount of property acquired(unit: Thousands of yen)Appraised value (specified value)
Assessment item(a) Unit rental revenues, includingcommons area fees(b) Utilities revenues

1,750,000
Details
119,4220(c) Parking lot revenues

3,312(d) Other revenues

4,907

Operatingrevenues

Revenues from key money, etc.

2,114

Renewal fees

2,180

Other revenues

613(1) (a)+(b)+(c)+(d)Operatingexpenses

127,641(e) Total loss from vacancies, etc.

7,416(f) Loss on bad debts(2) Operating revenues [(1)-(e)-(f)]0120,225(g) Maintenance expense

3,118(h) Utilities expense

1,575(i) Repair expense

2,437(j) Property management fees

4,629(k) Tenant soliciting fee, etc.

5,444(l) Taxes and public dues

6,681(m) Property insurance fee

252(n) Other expenses

377(3) Operating expenses[(g)+(h)+(i)+(j)+(k)+(l)+(m)+(n)](4) Net operating income [(2)-(3)]24,513
95,712(o) Earnings from temporary deposits

508(p) Capital expenditures

2,181(5) Net income [(4)+(o)-(p)]94,039(6) Cap rate

5.3%

Value of earnings calculated by the direct
capitalization method [(5)÷(6)]1,770,000

Value calculated by discounted cash flow method

1,730,000

Discount rate

5.0%

Terminal cap rate

5.6%

Cost method value

1,070,000

Total value of land and building

1,065,000

Land value

441,000
624,000

Building value
Adjustment
NAF requested real estate appraisal by Morii Appraisal & Investment Consulting, Inc., for the property
acquired, based on points to note when appraising real estate from the Act on Securities Investment Trustand Securities Investment Corporations, and based on the Act on Real Estate Appraisal (1963 Act No. 152,
including later amendments) and on real estate appraisal standards. The above figures record a summary of
the real estate appraisal report prepared. The appraisal valuation is the judgment and opinion of the appraiser
at a fixed point in time, with no guarantees as to the validity or accuracy of the report, nor the possibility oftransactions at the appraised value. Yen amounts are rounded down to the nearest thousand yen.

0<Attached Document 2> Portfolio list after the acquisition of the property is completed (on an acquisition
price basis)
1. Rental Apartments
Location

Acquisition price(millions of yen)
(Note 1)

Portfolio Share(%)(Note 2)

Okawabata Apartment Communities

Chuo-ku, Tokyo

29,696

12.8

Park Axis Gakugei Daigaku

Setagaya-ku, Tokyo

1,760

0.8

Park Axis Shibuya Jinnan

Shibuya-ku, Tokyo

3,230

1.4

Park Axis Aoyama Kotto-dori

Minato-ku, Tokyo

1,730

0.7

Park Axis Kagurazaka Stage

Shinjuku-ku, Tokyo

1,400

0.6

Park Axis Shirokanedai

Minato-ku, Tokyo

5,140

2.2

Park Axis Bunkyo Stage

Bunkyo-ku, Tokyo

4,440

1.9

Park Axis Tsukishima

Chuo-ku, Tokyo

930

0.4

Park Axis Otsuka

Toshima-ku, Tokyo

1,655

0.7

Park Axis Minami Azabu

Minato-ku, Tokyo

3,939

1.7

Name

Park Axis Shibuya

Shibuya-ku, Tokyo

1,282

0.6

Park Axis Nihonbashi Stage

Chuo-ku, Tokyo

7,557

3.3

Park Axis Hamamatsucho

Minato-ku, Tokyo

2,025

0.9

Park Axis Hongo No Mori

Bunkyo-ku, Tokyo

2,910

1.3

Park Axis Tameike Sanno

Minato-ku, Tokyo

2,860

1.2

Park Axis Roppongi Hinokicho Park

Minato-ku, Tokyo

2,170

0.9

Park Axis Ochanomizu Stage

Bunkyo-ku, Tokyo

9,710

4.2

Park Axis Okachimachi

Taito-ku, Tokyo

1,070

0.5

Park Cube Hongo

Bunkyo-ku, Tokyo

1,760

0.8

Park Cube Kanda

Chiyoda-ku, Tokyo

2,454

1.1

Park Cube Ichigaya

Shinjuku-ku, Tokyo

1,949

0.8

Park Cube Asakusa Tawaramachi

Taito-ku, Tokyo

2,508

1.1

Park Cube Ueno

Taito-ku, Tokyo

2,233

1.0

Park Cube Ikebukuro Kanamecho

Toshima-ku, Tokyo

1,608

0.7

Park Axis Meguro Honcho

Meguro-ku, Tokyo

1,810

0.8

Park Axis Shin Itabashi

Itabashi-ku, Tokyo

3,430

1.5

Park Axis Akihabara

Chiyoda-ku, Tokyo

1,200

0.5

Park Axis Toyocho

Koto-ku, Tokyo

3,950

1.7

Park Axis Takinogawa

Kita-ku, Tokyo

1,820

0.8

Park Axis Asakusabashi

Taito-ku, Tokyo

2,717

1.2

Park Axis Nihonbashi Hamacho

Chuo-ku, Tokyo

5,540

2.4

Park Cube Yoyogi Tomigaya

Shibuya-ku, Tokyo

1,975

0.9

Park Axis Monzen Nakacho

Koto-ku, Tokyo

1,700

0.7

Park Cube Itabashi Honcho

Itabashi-ku, Tokyo

4,170

1.8

Park Cube Gakugei Daigaku

Meguro-ku, Tokyo

Park Cube Oimachi

Shinagawa-ku, Tokyo

Park Axis Nishigahara

Kita-ku, Tokyo

Park Axis Kinshicho

910

0.4

1,440

0.6

840

0.4

Sumida-ku, Tokyo

1,448

0.6

Park Axis Tatsumi Stage

Koto-ku, Tokyo

7,464

3.2

Park Axis Kameido

Koto-ku, Tokyo

2,359

1.0

Park Axis Honancho

Nakano-ku, Tokyo

745

0.3

Park Axis Itabashi

Kita-ku, Tokyo

1,448

0.6

Park Axis Oshiage

Sumida-ku, Tokyo

1,193

0.5

Park Axis Takadanobaba

Toshima-ku, Tokyo

1,222

0.5

Park Axis Toyosu

Koto-ku, Tokyo

14,300

6.2

Park Axis Hatchobori

Chuo-ku, Tokyo

1,760

0.8

Park Axis Itabashi Honcho

Itabashi-ku, Tokyo

987

0.4

Park Axis Sumiyoshi

Sumida-ku, Tokyo

1,006

0.4

Park Cube Yotsuya Sanchome

Shinjuku-ku, Tokyo

2,749

1.2

Park Cube Hatchobori

Chuo-ku, Tokyo

4,200

1.8

Park Axis Kamata Ichibankan

Ota-ku, Tokyo

1,069

0.5

Park Axis Taito Negishi

Taito-ku, Tokyo

672

0.3

Park Axis Komagome

Toshima-ku, Tokyo

1,389

0.6

Park Axis Itabashi Honcho Nibankan

Itabashi-ku, Tokyo

1,859

0.8

Shibaura Island Air Tower

Minato-ku, Tokyo

7,905

3.4

Park Cube Higashi Shinagawa

Shinagawa-ku, Tokyo

6,060

2.6

Park Cube Sasazuka

Shibuya-ku, Tokyo

2,200

1.0

Park Axis HigashiJujo

Kita-ku, Tokyo

1,700

0.7

191,255

82.7

Tokyo 23 wards total
Park Cube Keio Hachioji

Hachioji-shi, Tokyo

991

0.4

Park Cube Keio Hachioji II

Hachioji-shi, Tokyo

1,130

0.5

Park Axis Nishi Funabashi

Funabashi-shi, Chiba

1,020

0.4

1,419

0.6

1,679

0.7

970

0.4

Park Axis Yokohama Idogaya
Park Axis Chiba Shinmachi
Park Axis Chiba

Minami-ku,
Yokohama-shi,
Kanagawa
Chuo-ku, Chiba-shi,
Chiba
Chuo-ku, Chiba-shi,
ChibaPark Cube Kita Matsudo

Matsudo-shi, Chiba

1,200

0.5

Park Cube Musashi Kosugi

Nakahara-ku,
Kawasaki-shi,
Kanagawa

2,250

1.0

10,659

4.6

2,440

1.1

1,920

0.8

1,515

0.7

1,890

0.8

742

0.3

1,547

0.7

2,320

1.0

960

0.4

605

0.3

1,650

0.7

827

0.4

Greater Tokyo Total (Note 3)
Nakamura-ku,
Park Axis Meieki Minami
Nagoya-shi, Aichi
Naka-ku, Nagoya-shi,
Park Axis Marunouchi
Aichi
Chuo-ku, Fukuoka-shi,
Park Axis Ropponmatsu
Fukuoka
Hakata-ku, Fukuoka-shi,
Park Axis Hakataeki Minami
Fukuoka
Hakata-ku, Fukuoka-shi,
Park Axis Naka Gofukumachi
Fukuoka
Higashi-ku, Nagoya-shi,
Park Axis Shirakabe
Aichi
Wakabayashi-ku,
Park Axis Sendai
Sendai-shi, Miyagi
Hakata-ku, Fukuoka-shi,
Park Axis Hakata Minoshima
FukuokaMinami-ku, Fukuoka-shi,
Park Axis Takamiya Higashi
Fukuoka
Chuo-ku, Sapporo-shi,
Park Axis Sapporo Shokubutsuen Mae
Hokkaido
Atsubetsu-ku,
Park Axis Shin Sapporo
Sapporo-shi, Hokkaido
Park Axis Esaka Hiroshibacho

Suita-shi, Osaka

2,369

1.0

Park Axis Utsubo Koen

Nishi-ku, Osaka-shi,
Osaka

2,399

1.0

21,1849.2

223,098

96.5

Other Major Cities Total (Note 4)Total

2. Other Accommodation Assets
Name
Dormy Ashiya
Kawaijuku Kyoto Gakushin Ryo
Sundai Horikawa Ryo

Location

Acquisition price(millions of yen)
(Note 1)

Portfolio Share(%)(Note 2)）Ashiya-shi, Hyogo

928

0.4

991

0.4

916

0.4

374

0.2

Nakagyo-ku, Kyoto-shi,
Kyoto
Kamigyo-ku, Kyoto-shi,
Kyoto

Dormitory Rakuhoku

Kita-ku, Kyoto-shi, Kyoto

Rikkyo University International
Dormitory (RUID) Shiki

Shiki-shi, Saitama

1,478

0.6

Dormy Naka Itabashi

Itabashi-ku, Tokyo

1,041

0.5

Phirosophia Nishidai

Itabashi-ku, Tokyo

1,249

0.5

Dormy Musashi Kosugi

Nakahara-ku,
Kawasaki-shi,
Kanagawa

1,152

0.5

8,129

3.5

231,227

100.0

Total

Grand total(Note 1) “Acquisition Price” refers to the sale price (exclusive of miscellaneous expenses for acquisition, fixed property tax,
urban planning tax, consumption tax, and local consumption tax) of the property acquired. Amounts less than one
million yen have been rounded off.
(Note 2) “Portfolio Share” means the percentage of the acquisition price of the property acquired compared with the total
amount, rounded to the nearest one decimal place.
(Note 3) “Greater Tokyo” refers to four prefectures, Tokyo (excluding Tokyo’s 23 wards), Kanagawa, Saitama, and Chiba.
(Note 4) “Other Major Cities” refers to cities designated as regional government ordinance.