August 4, 2023
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 FundManagement Co., Ltd.
Hiroshi Kojima, President and CEO
Inquiries: Tetsuji Kawakami, CFO and Director(TEL: +81-3-3246-3677)

Notification Concerning Sale of Domestic Real Estate Property (Dormy Ashiya)
This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trust
management company that has been commissioned by Nippon Accommodations Fund Inc. (“NAF“) to manage its
assets, decided on the sale (the “Sale”) of a real estate property in Japan as shown below.
1. Reason for the Sale
Based on the provisions for investment and policies on asset management provided in the Articles ofIncorporation of NAF, NAF has decided on the Sale after comprehensively considering the composition of theportfolio and trends in the real estate market, etc.
The sale price for the Sale surpasses the book value of the property, and thus unrealized gain is likely to beactualized.
Although the sale price is lower than the appraised value, the decision to sell the property on this occasion
was made based on the conclusion that it would be profitable for investors considering future tenant risks of theproperty, among other factors.
NAF plans to internally reserve all or part of gain from the Sale as reserve.
2. Overview of the Sale
(1)

Name of property sold

Dormy Ashiya(2)Type of property soldReal estate(3)

Sale price (Note 1)¥1,304,000 thousand(4)

Book value¥761,931 thousand (as of February 28, 2023)(5)

Difference between sale price and book value¥542,068 thousand(6)

Appraised value (Note 2)¥1,360,000 thousand(7)

Date of conclusion of sale contract

August 4, 2023

(8)

Date of handoverAugust 4, 2023

(9)

Buyer

Not disclosed (Note 3)(10)

Settlement

Lump sum settlement at time of handover(11)

Use of proceeds

Future acquisitions of properties, repayment ofborrowings, payment for repairs and maintenance,
working funds, etc.

(Note 1) “Sale price” denotes the trading value (exclusive of miscellaneous expenses, fixed property taxes, urban planning taxes,consumption taxes, and local consumption taxes) specified in the sale contract for the property sold.

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(Note 2) “Appraised value” is based on the amount mentioned in the real estate appraisal report (date of value appraisal: February
28, 2023) which JLL Morii Valuation & Advisory K.K. prepared for the property sold.
(Note 3) Not disclosed as consent from the buyer has not been obtained.

(This page is intentionally left blank)23. Outline of the Property Sold
Name of property soldType of property soldAppraisal companyAppraisal value upon sale (Note 1)
Date of value appraisal (Note 1)
Location Residence indication
Building-to-land ratio (Note 2)
Floor-area ratio (Note 2)
LandZoning
Site area (Note 3)
Ownership form
Completion date (Note 4)

Building

Details oftenants(Note 6)

Dormy Ashiya
Real estate
JLL Morii Valuation & Advisory K.K.
¥1,360,000 thousand
February 28, 2023
12-28, Daitocho, Ashiya-shi, Hyogo
60%
200%
Category 1 medium-to-high-rise exclusive residential district
3,267.22 m2
Proprietorship
September 17, 2002

Structure / Number of stories(Note 5)Flat-roofed reinforced concrete structure / 5 stories

Use (Note 5)
Gross floor area (Note 5)
Ownership form
Rentable units

Dormitory, garage
3,729.45 m2
Proprietorship
140

Rentable area

3,729.45 m2

Total number of tenants
Rentable units
Rented units
Rentable area
Rented area
Occupancy rate

1140
140
3,729.45 m2
3,729.45 m2
100%
Not disclosed as the consent from the lessee has not beenobtained
Not disclosed as the consent from the lessee has not beenobtained

Deposit / Security depositMonthly rental revenue(Note 1) “Appraisal value upon sale” and “Date of value appraisal” are based on the description in the real estate appraisal reportwhich JLL Morii Valuation & Advisory K.K. prepared for the property sold.
(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,” “use,” and “gross floor area” are based on the description in the register.
(Note 6) Explanation on “details of tenants”(i) “Total number of tenants” is denoted as “1” when a master lease agreement (bulk lease agreement) has been concluded
with the lessee. As to the property sold, “Total number of tenants” is denoted as “1” as a fixed-term building leaseagreement has been concluded with Kyoritsu Maintenance Co., Ltd. as the lessee (and operator).
(ii) “Rentable units” and “Rentable area” denote the number of units or the total area that can be rented for the property sold.
(iii) “Occupancy rate” denotes the ratio of the “rented area” against the “rentable area” and the figures are rounded to one
decimal place.
(iv) “Deposit / Security deposit” and “Monthly rental revenue” are not disclosed as the consent from the lessee has not beenobtained.

34. Outline of Buyer
The buyer of the property sold is a domestic corporation, but information is not disclosed as consent from thebuyer has not been obtained. There are no capital, personnel or business relationships between the buyer andNAF or the investment trust management company. Also, the buyer does not fall under the category of relatedparties of NAF or the investment trust management company.
5. Outline of Brokerage
Not applicable.
6. Transactions with Related Parties and the Like
This is omitted as it is not a sale to a related party.
7. Outlook for Management After the Sale
NAF plans to internally reserve all or part of gain from the Sale as reserve for reduction entry using the special
provisions for replacement of business assets for long-term land holdings, etc.
The impact of the Sale on NAF’s financial results for the period ending August 31, 2023 (35th Period: March1, 2023, to August 31, 2023) and the period ending February 29, 2024 (36th Period: September 1, 2023, toFebruary 29, 2024) will be minor, and there will be no change to the financial results forecasts for the periods.
(This page is intentionally left blank)

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8. Summary of Appraisal Report
Appraised value¥1,360,000 thousand

Appraisal company

JLL Morii Valuation & Advisory K.K.

Date of value appraisal

February 28, 2023
(Unit: thousands of yen)

Item
Value of earnings
Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)]Details

Summary, etc.

1,360,000
1,370,00080,810(a) Potential gross revenue

80,810(b) Vacancy loss, etc.
(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses

08,5660(d) Utilities expenses

0(e) Repair expenses

2,954(f) Property management fees0(g) Tenant soliciting fees, etc.

0(h) Taxes and public dues

5,263(i) Property insurance fees

349
0(j) Other expenses(3) Net operating income [(1)−(2)]72,244(k) Earnings from temporarydeposits

404(l) Capital expenditures

6,893(4) Net income [(3)+(k)−(l)]65,755(5) Cap rate
Value calculated by the discounted cash
flow method

4.8%

Posted 30% of a standardized amount assuming theestimate in the engineering report to be appropriate.

Appraised by considering the fluctuation rate and annualdepreciation, etc. based on actual amounts.
The amount is posted assuming the materials presented
to be appropriate.

Appraised by multiplying the amount obtained bysubtracting the amount equivalent to vacancies from theamount of security deposits, etc., at full occupancy, by
yield of 1.0%.
Posted 70% of a standardized amount assuming theestimate in the engineering report to be appropriate.
Appraised by considering the income and capitalfluctuation risk in addition to the discount rate.

1,340,000

Discount rate

4.5%

Terminal cap rate

5.0%

Cost method value

Appraised medium- and long-term stable rental income,etc. based on current condition, etc.

1,230,000

Land ratio

76.2%

Building ratio

23.8%

Other items considered by the appraisal
company in making the appraisal

Appraised by comprehensively taking into accountoverall market trends for buyers and sellers, etc., after
considering risk factors of location and individual
characteristics of the subject real estate as well as
standard cap rate.
Appraised by considering uncertainty of fluctuation
projections for future net income, future deterioration ofthe building, and risk of sale, in addition to capitalization
rate.

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

5＜Attached Document 1＞
Portfolio list after the purchase of property to be acquired is completed (on a planned acquisition price basis)
Total Planned Acquisition Price

339,038 million

Number of Investment Properties

133 propertiesTotal Rentable Units (including retail units)

13,146 units

Proportion of Investment by Asset
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 2)

Rental Apartments

322,641 million

Hospitality Facilities
Grand Total

95.2％

16,397 million

4.8％339,038 million

100.0％

Proportion of “Rental Apartments” by Area
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 3)

Tokyo 23 Wards

285,660 million

88.5％

Greater Tokyo (Note 4)

14,426 million

4.5％

Other Major Cities (Note 5)

22,555 million

7.0％

322,641 million

100.0％

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) Proportion of all properties by area (including Hospitality Facilities)
Tokyo 23 wards 86.0%
Other area 14.0%(Note 7) Please refer to NAF’s website for the latest portfolio list:
https://www.naf-r.jp/english/portfolio/6-2.html

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