September 29, 2020
To All Concerned Parties
Issuer of Real Estate Investment Trust Securities:
Nippon Accommodations Fund Inc.
Takashi Ikeda, Executive Director(TSE Code: 3226)
Investment Trust Management Company:
Mitsui Fudosan Accommodations
Fund Management Co., Ltd.
Tateyuki Ikura, President and CEO
Inquiries: Tetsuji Kawakami, CFO and Director(TEL: +81-3-3246-3677)

Notification Concerning Acquisition of Domestic Real Estate Property(Park Axis Toyocho Shinsui Koen)
This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trust
management company commissioned by Nippon Accommodations Fund Inc. (“NAF”) to manage its assets, decided
on the acquisition of 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 assets
under management and for the diversification and further enhancement of the investment portfolio.
2. Overview of acquisition(1)

Name of property to be acquired

Park Axis Toyocho Shinsui Koen

(2)

Type of property to be acquired

Real estate (35% co-ownership interest) (Note 1)(3)

Planned acquisition price¥2,233,000,000 (Note 2)(4)

Appraised value¥2,320,000,000 (Note 3)(5)

Date of conclusion of sale contract

September 29, 2020

(6)

Planned date of handover

October 1, 2020

(7)

SellerMitsui Fudosan Residential Co., Ltd.

(8)

Acquisition funds

Borrowings and own funds(9)

Method of payment

Full payment at the time of delivery(Note 1) NAF is scheduled to acquire 35% co-ownership interest in the real estate property. The remaining 65% co-ownershipinterest is owned by Mitsui Fudosan Residential Co., Ltd.
(Note 2) “Planned 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 real estate sale contract forthe property to be acquired.
(Note 3) “Appraised value” is based on the real estate appraisal report (date of value appraisal on August 31, 2020) prepared by
Japan Real Estate Institute for the property to be acquired and is the amount equivalent to NAF’s 35% ownership interest.

13. Description of the property to be acquired(1) Outline of the property to be acquired
Name of property to be acquired
Type of property to be acquired
Appraisal company
Appraised value (Note 1)
Date of value appraisal (Note 1)
Location Residence indication
Building-to-land ratio (Note 2)
Floor-area ratio (Note 2)Land
ZoningSite area (Note 3)
Ownership form
Completion date (Note 4)
Structure / Number of stories (Note 5)

Park Axis Toyocho Shinsui Koen
Real estate (35% of co-ownership interest)
Japan Real Estate Institute¥2,320,000 thousand
August 31, 202034-4 Minamisuna 2-chome, Koto-ku, Tokyo
60%
400%
Quasi-industrial district
1,937.44 m2
Co-ownership of proprietorship (35% co-ownership interest)
August 29, 2014
Flat-roofed reinforced concrete structure / 14 stories

Uses (Note 5)
Gross floor area (Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests

Apartment building, store, bicycle parking, garage
9,450.49 m2
Co-ownership of proprietorship (35% co-ownership interest)
190 residential, 2 retail7,254.57 m2
None

Special affairs (Note 6)(Arrangements with the co-owner)
With co-ownership of the proprietorship in the property by
NAF and a co-owner, a co-ownership agreement (the“Agreement”) is scheduled to be concluded between the coowner and NAF. The main content is as follows:① Matters concerning maintenance, management, andoperation of the property to be acquired shall be
executed in accordance with the will of the co-owner thathas the majority ownership interest. Specific matters(reconstruction, etc.) (the “Matters Requiring Agreementof All Co-owners”) shall require the agreement of all coowners.
② Concerning the Matters Requiring Agreement of All Coowners, in the case that an agreement cannot bereached upon deliberation by co-owners and through theprescribed methods of decision-making, one co-ownershall deliberate on the acquisition of all the co-ownershipinterest held by the other co-owner.
③ If NAF or the co-owner is to transfer its own co-ownershipinterest to a third party, the transfer must be all at once
to a single transferee.
④ If NAF or the co-owner intends to transfer its own coownership interest to a third party, that party shall be
required to notify the other party in writing and the otherparty shall be granted the first refusal right to purchasein the transfer of the co-ownership interest if the otherparty wishes to purchase the co-ownership interest.
⑤ NAF and the co-owner shall not request for partition of
the property to be acquired for a period of five years
starting from the date of conclusion of the Agreement.

Building

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Special features of the property

Details of
leasing(Note 7)

Total number of tenants
Rentable units
Rented units
Rentable area
Rented area
Occupancy rate
Deposit / Security deposit
Monthly rental revenue

The property is an 11-minute walk from Minami-Sunamachi
Station on the Tokyo Metro Tozai Line, and it takes 15
minutes to get to Otemachi Station from Minami-Sunamachi
Station. In addition, the property has advantages in terms ofliving environment as there are shopping districts, large-scalecommercial properties, and electronics retail stores withinwalking distance.
The property is expected to be in demand by singles orsmall households.
1
67 residential, 1 retail65
2,539.10 m2
2,440.67 m2
96.1%¥21,830 thousand¥9,312 thousand(Note 1) “Appraised value” and “date of value appraisal” are based on the real estate appraisal report prepared by Japan Real Estate
Institute for the property to be acquired and the amount is the amount equivalent to NAF’s 35% ownership interest.
(Note 2) “Building-to-land ratio” is the ratio of the building’s construction area to the site area as stipulated in Article 53 of the BuildingStandards Act, and the figure stipulated by city planning in accordance with zoning, etc. is indicated. “Floor-area ratio” is theratio of the building’s gross floor area to the site area as stipulated in Article 52 of the Building Standards Act, and the figure
stipulated by city planning in accordance with zoning, etc. is indicated.
(Note 3) “Site area” denotes the land area included in the register.
(Note 4) “Completion date” of the building denotes the date included in the register.
(Note 5) “Structure / Number of stories,” “uses,” and “gross floor area” are based on the description in the register.
(Note 6) “Special affairs” include issues considered to be important by NAF as of today, with consideration of influence on the rights,
uses, and appraisal values as well as profits of the property to be acquired.
(Note 7) Explanation on “details of leasing”(i)“Total number of tenants” is denoted as 1 if there is a master lease agreement (a bulk lease agreement) concluded witha master lease company. With regards to the property to be acquired, a master lease agreement is scheduled to beconcluded with Mitsui Fudosan Residential Lease Co., Ltd. as the master lease company. The “total number of tenants”
above is therefore the number of tenants after such a master lease agreement is concluded.

(ii) “Rentable units” is calculated by multiplying the number of units that can be rented within the entire property to beacquired by 35%, which is NAF’s ownership ratio.
(iii) “Rented units,” “rented area” and “deposit / security deposit” denote figures as of August 31, 2020, based on the material
received from the seller, and are calculated by multiplying the figures for the entire property to be acquired by 35%, whichis NAF’s ownership ratio.
(iv) “Rentable area” calculated by multiplying the total area of the building that can be rented within the entire property to beacquired by 35%, which is NAF’s ownership ratio.
(v) “Occupancy rate” denotes the ratio of the “rented area” against the “rentable area” and the figures are rounded to one
decimal place.
(vi) “Monthly rental revenue” is calculated by multiplying the total monthly rent indicated in the lease agreement concluded
between the master lease company and end tenant as of August 31, 2020 (including common service fees and excluding
usage fees of attached facilities such as parking lot and trunk room) by 35%, which is NAF’s ownership ratio. Amounts
are rounded down to the nearest thousand yen and do not include consumption tax.

(2) Outline of investigations into the state of the building, etc.
Consigned investigating company
Investigation report date
Investigations
Urgent repair cost
into the state ofShort-term repair costbuilding
Repair and renewal costs expected to(Note 1)be necessary within 12 years
Replacement value
Earthquake risk
diagnosis

Consigned investigating company
Investigation report date
PML value (Note 2)

Sompo Risk Management Inc.
September 10, 2020－－
¥48,118 thousand¥877,800 thousand
Tokio Marine & Nichido Risk Consulting
Co., Ltd.
September 11, 2020
5.8%

(Note 1) Amounts are calculated by multiplying the amounts for the entire property to be acquired by NAF’s 35% ownership interest.

3

(Note 2) 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) value represents the rate of probable maximum loss to becaused by earthquakes. In this case, it means the extent 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 ofrestoration from the damage to the replacement cost.

44. Outline of seller
Name
Location
Representative
Description
operationsofprincipal

CapitalDate of establishment
Net assets
Total assets
Major stockholders andshareholding ratio(As of March 31, 2020)

Mitsui Fudosan Residential Co., Ltd.
2-1, Nihonbashi-Muromachi 3-chome, Chuo-ku, Tokyo
Kiyotaka Fujibayashi, President & CEO
Medium and high-rise housing, detached housing, rental housing, overseas
business, urban redevelopment, reconstruction of apartments, commissioned
sales, and senior residence businesses¥40,000 million
December 26, 2005
Not disclosed
Not disclosed
Stockholder nameShareholding ratio
Mitsui Fudosan Co., Ltd.

100.0%

Relationship with NAF or the investment trust management company
As of August 31, 2020, the seller holds 3.21% of all investment units issued by
NAF. Moreover, the seller is the subsidiary of Mitsui Fudosan Co., Ltd., which is
Capital relationships
the parent company of the investment trust management company.
There are no personal relationships between NAF or the investment trust
Personal relationships
management company and the seller.
During the period ended August 31, 2020, NAF acquired one real estate property
from the seller. Otherwise, there are no business relationships between NAF or
Business relationships
the investment trust management company and the seller during the period
ended August 31, 2020.
The seller does not fall under the category of related parties of NAF. However,the seller does fall under the category of related parties of the investment trust
Applicability to
management company, as the seller is the subsidiary (100%) of Mitsui Fudosan
related parties
Co., Ltd., which is the parent company of the investment trust managementcompany.
5. Situation of the acquirer of the property
Situation of the ownerof the property

Property: Park Axis
Toyocho Shinsui Koen

Previous owner, etc.

Previous owners, etc.

Name

Mitsui Fudosan
Residential Co., Ltd.
(Note)

None

Relations withspecial interest
party

Fully-owned subsidiary(100%) of Mitsui FudosanCo., Ltd., the parent
company of the investment
trust managementcompany―

Background andreason for
acquisition

Developed by Mitsui
Fudosan Co., Ltd.

―

Acquisition price(including other fees)――

Acquisition period――(Note) Mitsui Fudosan Co., Ltd.’s rights and obligations in the rental housing business were succeeded by Mitsui Fudosan Residential Co.,
Ltd. as of October 1, 2015, through a company split.

56. Outline of brokerage
Not applicable.
7. Transactions with related parties and the like
Mitsui Fudosan Residential Co., Ltd., which is the seller of the property to be acquired, corresponds to relatedparties and the like (see Note). Therefore, the conclusion of the real estate sale contract has undergone
deliberation and approval by the compliance committee as well as deliberation and decision by the investmentcommittee of the investment trust management company in accordance with NAF’s self-established rules on
asset management relevant to transactions with related parties and the like.
Mitsui Fudosan Residential Lease Co., Ltd., which will be the master lease company and property
management company for the property to be acquired, corresponds to related parties and the like (Note).
Therefore, the conclusion of a master lease contract and property management contract has undergone
deliberation and approval by the compliance committee and is scheduled to later undergo deliberation anddecision by the investment committee of the investment trust management company in accordance with NAF’s
self-established rules on asset management relevant to transactions with related parties and the like.
(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
Trusts and Investment Corporations, Article 123.

8. Earthquake resistance matters
The property to be acquired has received a structural calculation conformity judgment pursuant to the BuildingStandards Act as revised by the Act No. 92 of 2006.
In addition, NAF always entrusts earthquake risk diagnosis to the third-party investigating company to review
drawings using structural design drawings, structural calculation sheets, etc., during the course of due diligence
upon acquisition of properties besides building certification investigations performed by an inspection andcertification agency.

9. Outlook for management after acquisition of the property
The impact of the acquisition on NAF’s financial results for the period ending February 28, 2021 (30th Period:
September 1, 2020, to February 28, 2021) will be minor, and there will be no change to financial results forecast
for the period.

610. Summary of appraisal report
Appraised value¥2,320,000 thousand (Note)

Appraisal company

Japan Real Estate Institute

Date of value appraisal

August 31, 2020

Item

Details (Note)
6,630,000

Value of earnings
Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)]6,700,000
337,736(a) Potential gross revenue

351,573(b) Vacancy loss, etc.

13,837(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)]62,038(c) Maintenance expenses

6,826(d) Utilities expenses

3,000(e) Repair expenses

6,750(f) Property management fees

9,770(g) Tenant soliciting fees, etc.

14,332(h) Taxes and public dues

18,976(i) Property insurance fees

572
1,812

(j) Other expenses(3) Net operating income [(1)−(2)](k) Earnings
depositsfromtemporary

602

8,470

(4) Net income [(3)+(k)−(l)]267,830

Value calculated by discounted cash flow
methodUpon appraising the unit price level of rents, etc., thatcan be collected stably over the medium to long-term,
rental income and common service fees were posted.
Upon appraising the stable occupancy rate levels overthe medium to long-term based on the status of pastoccupancies and future outlook, vacancy loss, etc., wasposted.
Posted upon considering individual characteristics after
making reference to the actual amounts of past fiscal
years and the levels at similar real estate.
Posted upon considering individual characteristics after
making reference to the actual amounts of past fiscal
years and the levels at similar real estate.
In addition to posting restoration costs based on thelevel, etc., of restoration costs normally incurred withtenant replacements, repair expenses were posted bymaking reference to the actual amounts of past fiscal
years, etc.
Posted upon considering remuneration rates at similar
real estate and individual characteristics of relevant
properties, by making reference to remuneration rates,
etc., based on the terms and conditions of the contract.
Posted upon considering lease conditions of similar realestate, actual amounts of past fiscal years, averageannual tenant turnover ratio, and occupancy rates, etc.
Posted from materials related to taxes and public dues.
Posted upon considering insurance premiums, etc.,
based on the insurance contract.
Posted townhall association fees, etc.

275,698(l) Capital expenditures(5) Cap rate

(Unit: Thousands of yen)
Summary, etc.
The value of earnings was calculated by income
capitalization method upon relating the value of
earnings of the direct capitalization method and thevalue of earnings of the discounted cash flow method.

4.0%

Investment yield was appraised as 1.0% upon
considering the level of interest rates, etc., for bothmanagement and funding.
Appraised upon considering capital expenditure levels
on similar real estate, the age of the property, and theannual average cost of repairs and renewals in theengineering report.
Appraised upon taking the standard caprate in each
district, adding/subtracting the spread attributable to thelocation conditions, etc., and considering future
uncertainties as well as transaction yields, etc., ofsimilar real estate.

6,550,000

Discount rate

3.7%

Terminal cap rate

4.2%

7

Appraised upon comprehensively considering theindividual characteristics, making reference toinvestment yield, etc., of similar real estate.
Appraised after comprehensively considering the future
trends of investment yield, making reference totransaction yields, etc., of similar real estate.

Cost method value

6,320,000

Land ratio

70.9%

Building ratio

29.1%

Other items considered by the appraisal
company in making the appraisal－(Note) “Appraised value” is the amount equivalent to NAF’s 35% ownership interest. The items other than this are the amounts for the entire property.

8

＜Attached Document＞
1. Portfolio list after the purchase of the property to be acquired is completed (on a planned acquisition price basis)
2. Photo of the property to be acquired and map of the area

NAF’s website: https://www.naf-r.jp/english/

9＜Attached Document 1＞
Portfolio list after the purchase of the property to be acquired is completed (on an acquisition (planned) price basis)

Total Planned Acquisition Price¥318,441 million

Number of Investment Properties

129 properties

Total Rentable Units (including retail units)

12,627 units

Proportion of Investment by Asset
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 2)

Rental Apartments¥302,552 million

95.0%

Hospitality Facilities¥15,889 million

5.0%¥318,441 million

100.0%

取得（予定）価格（注１）

投資比率（注３）

Tokyo 23 Wards¥267,671 million

88.5％

Greater Tokyo (Note 4)¥12,326 million

4.1％

Other Major Cities (Note 5)¥22,555 million

7.4％¥302,552 million

100.0％

Grand Total
Proportion of “Rental Apartments” by Area

Total of “Rental Apartments”(Note 1) “Planned Acquisition Price” does not include anticipated acquisition expenses, fixed property taxes, urban
planning taxes, consumption taxes or local consumption taxes.
(Note 2) The figure indicates the percentage of asset category to the total (planned) acquisition price.
(Note 3) The figure indicates the percentage of Rental Apartments by area to the total (planned) acquisition price.
(Note 4) “Greater Tokyo” indicates Tokyo metropolis (excluding Tokyo 23 wards), and the 3 prefectures of Kanagawa, Saitama andChiba.
(Note 5) “Other major cities” indicates major cities across Japan and their surrounding areas, excluding the Tokyo area.
(Note 6) Please refer to NAF’s website for the latest portfolio list:
https://www.naf-r.jp/portfolio/5-1.html

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＜Attached Document 2＞
Photo of the property to be acquired and map of the area

11

Tokyo Metro Tozai Line
Minami‐Sunamachi Station

12