December 1, 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 Properties(Park Cube Oimachi Residence and other 3 properties)
This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trust
management company, which has been commissioned by Nippon Accommodations Fund Inc. (“NAF”) to manage
its assets, decided on the acquisition of real estate properties 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 properties 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 acquisitions
Property to beacquiredName of property to be acquired

Real estate(30% co-ownership)(Note 2)
Real estate(65% co-ownership)(Note 2)Acquisition price(Note 3)(Thousands of yen)Appraised value(Note 4)
(Thousands of yen)

1,742,100

1,960,000

4,147,000

4,391,000

Property 1

Park Cube Oimachi Residence

Property 2

Park Axis Toyocho Shinsui Koen

Property 3

Park Axis Ofuna (Note 1)

Real estate

2,100,000

2,320,000

Property 4

Campus terrace Waseda

Real estate

1,810,000

1,870,000

9,799,100

10,541,000

Total(1) Date of conclusion of sale contract

December 1, 2020

(2) Planned date of handover

April 5, 2021 (Note 5)(3) Seller

Mitsui Fudosan Residential Co., Ltd.

(4) Acquisition fundNet proceeds from issuance of new investment units through the public offering andthird-party allocation stated in “Notification Concerning Issuance of New Investment
Units and Secondary Offering of Investment Units” released on December 1, 2020

(5) Method of payment

Full payment at the time of handover<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
1

(Note 1) The current name of Property 3 is “Ofuna Residence,” but NAF plans to change the name of the property to the nameabove without delay after its acquisition.
(Note 2) Regarding Property 1, NAF has acquired 70% co-ownership of “Park Cube Oimachi Residence” from ITOCHU Property
Development, Ltd. on July 1, 2020 and completed to hold 100% co-ownership with this acquisition of 30% co-ownershipfrom Mitsui Fudosan Residential Co., Ltd. Furthermore, regarding Property 2, NAF has acquired 35% co-ownership of“Park Axis Toyocho Shinsui Koen” from Mitsui Fudosan Residential Co., Ltd. on October 1, 2020 and completed to hold100% co-ownership with this acquisition of 65% co-ownership from Mitsui Fudosan Residential Co., Ltd.
(Note 3) “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 contract for the sale of real estatewith condition precedent for the properties to be acquired.
(Note 4) “Appraised value” is based on the real estate appraisal report (date of value appraisal on October 31, 2020) prepared by
Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute and JLL Morii Valuation & Advisory K.K. for theproperties to be acquired and is the amount equivalent to NAF’s 30% co-ownership for Property 1 and 65% co-ownershipfor Property 2.
(Note 5) In accordance with the contract for the sale of real estate with condition precedent, the planned handover date may bechanged to a date separately agreed by the buyer and the seller (a date up to April 5, 2021).

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
2

3. Description of the properties to be acquired(1) Outline of the properties to be acquired(i) Property 1: Park Cube Oimachi Residence
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 ofstories (Note 5)
Uses (Note 5)
Building
Gross floor area
(Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests
Special affairs (Note 6)

Special features of the property

Details of
leasing(Note 7)Park Cube Oimachi Residence
Real estate (30% of co-ownership)
Daiwa Real Estate Appraisal Co., Ltd.
¥1,960,000 thousand
October 31, 2020
22-16, Oi 1-chome, Shinagawa-ku, Tokyo
80%
600%, 500%
Commercial zone
803.36 m2
Co-ownership of proprietorship (30% co-ownership)
January 10, 2018
Flat-roofed reinforced concrete structure / 15 stories
Apartment building, store
5,835.06 m2
Co-ownership of proprietorship (30% co-ownership)
170 residential, 1 retail, etc.
4,271.17 m2
None
None
The property is a 4-minute walk from Oimachi Station on the JR
Keihin-Tohoku Line, the Tokyo Waterfront Area Rapid Transit RinkaiLine and the Tokyu Oimachi Line, offering access to multiple train
stations and lines.
There are not only department stores, electronics retail stores andother large-scale commercial facilities, but also several shopping
districts (Oi Sanpia, Oi Ginza, etc.) lined with restaurants,
merchandise stores, etc., and even Shinagawa Ward Office and otherpublic facilities, offering excellent convenience in daily life. Demand
from working individuals living alone, DINKs, etc. placing importanceon locational conditions can be expected.

Total number oftenants
Rentable units

170 residential, 1 retail, etc.

Rented units

163

Rentable area

4,271.17 m2

Rented area

4,078.53 m2

Occupancy rate
Deposit /Security deposit
Monthly rental
revenue

95.5%

1¥34,379 thousand¥23,404 thousand<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
3

(ii) Property 2: Park Axis Toyocho Shinsui Koen
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 ofstories (Note 5)
Uses (Note 5)
Building
Gross floor area
(Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests
Special affairs (Note 6)

Special features of the property

Details of
leasing(Note 7)Park Axis Toyocho Shinsui Koen
Real estate (65% of co-ownership)
Japan Real Estate Institute¥4,391,000 thousand
October 31, 202034-4 Minamisuna 2-chome, Koto-ku, Tokyo
60%
400%
Quasi-industrial district
1,937.44 m2
Co-ownership of proprietorship (65% co-ownership)
August 29, 2014
Flat-roofed reinforced concrete structure / 14 stories
Apartment building, store, bicycle parking, garage
9,450.49 m2
Co-ownership of proprietorship (65% co-ownership)
190 residential, 2 retail, etc.
7,254.57 m2
None
None
The property is an 11-minute walk from Minami-Sunamachi Station on
the Tokyo Metro Tozai Line, and it takes 15 minutes to get toOtemachi Station from Minami-Sunamachi Station. In addition, theproperty has advantages in terms of living environment as there are
shopping districts, large-scale commercial properties, and electronics
retail stores within walking distance.
The property is expected to be in demand by singles or small
households.

Total number oftenants
Rentable units

190 residential, 2 retail, etc.

Rented units

185

Rentable area

7,254.57 m2

Rented area

6,973.34 m2

Occupancy rate
Deposit /Security deposit
Monthly rental
revenue

96.1%

1¥62,372 thousand¥26,607 thousand<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
4

(iii) Property 3: Park Axis Ofuna
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 ofstories (Note 5)
Uses (Note 5)
Building
Gross floor area
(Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests
Special affairs (Note 6)

Special features of the property

Total number oftenants
Rentable units
Details of
leasing(Note 7)Park Axis Ofuna
Real estate
JLL Morii Valuation & Advisory K.K.
¥2,320,000 thousand
October 31, 2020
9-29, Kasama 1-chome, Sakae-ku, Yokohama-shi, Kanagawa
80%
200%
Neighborhood commercial zone
2,444.21 m2
Proprietorship
January 12, 2010
Flat-roofed reinforced concrete structure / 6 stories
Apartment building
5,056.06 m2
Proprietorship
73
4,752.68 m2
None
Part of the borderline between the land for the property and the
adjoining land is not confirmed.
This property is in a great residential location that offers excellent
convenience in daily life as it is a 4-minute walk from Ofuna Station,
which is accessible from multiple train lines such as the JR Tokaido
Main Line, Shonan-Shinjuku Line, Yokosuka Line, Negishi Line,
Yokohama Line and the Shonan Monorail Line, and is within walking
distance of a variety of facilities for daily life. From Ofuna Station, it
takes about 15 minutes by JR Line to Yokohama Station and about 42
minutes to Tokyo Station.
Demand from working individuals living with families, DINKs, etc.
placing importance on locational conditions and convenience andcomfort in daily life can be expected.

173Rented units

67

Rentable area

4,752.68 m2

Rented area

4,341.53 m2

Occupancy rate
Deposit /Security deposit
Monthly rental
revenue

91.3%¥22,684 thousand¥11,870 thousand<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
5

(iv) Property 4: Campus terrace Waseda
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 ofstories (Note 5)
Uses (Note 5)
Building
Gross floor area
(Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests
Special affairs (Note 6)

Special features of the property

Details of
leasing(Note 7)

Campus terrace Waseda
Real estate
JLL Morii Valuation & Advisory K.K.
¥1,870,000 thousand
October 31, 2020
39-13, Sekiguchi 1-chome, Bunkyo-ku, Tokyo
60%
300%
Quasi-industrial district
567.98 m2
Proprietorship
January 31, 2020
Flat-roofed reinforced concrete structure / 7 stories
Dormitory
1,747.51 m2
Proprietorship
82
1,747.51 m2
None
None
This property is approximately a 10-minute walk from Waseda Stationon the Tokyo Metro Tozai Line, and provides excellent access tocentral Tokyo as Waseda Station is approximately 3 minutes awayfrom Takadanobaba Station, where one can transfer to the JR
Yamanote Line and get to Shinjuku Station or Ikebukuro Station inapproximately 16 minutes. In addition, this property is approximately
a 5-minute walk from Waseda Station on the Toden Arakawa Line.
This property also provides excellent access to colleges as it isapproximately a 7-minute walk from Waseda University,
approximately an 11-minute walk from the Mejiro campus of Japan
Women’s University, and approximately a 17-minute walk from
Gakushuin Women’s College. A certain amount of demand for college
dormitories can be expected.

Total number oftenants
Rentable units

82

Rented units

82

Rentable area

1,747.51 m2

Rented area

1,747.51 m2

Occupancy rate
Deposit /Security deposit
Monthly rental
revenue

100.0%

1

Not disclosed as the consent from the lessee has not been obtained.
Not disclosed as the consent from the lessee has not been obtained.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
6

(Note 1) “Appraised value” and “date of value appraisal” are based on the real estate appraisal report prepared by Daiwa Real EstateAppraisal Co., Ltd. for Property 1, Japan Real Estate Institute for Property 2, and JLL Morii Valuation & Advisory K.K. for
Property 3 and Property 4, and the amounts are the amounts equivalent to NAF’s 30% co-ownership for Property 1 and 65%
co-ownership for Property 2, respectively.
(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. Property 3 includes a public road (2.37 m2), but this public roadis not included in the site area for the building certification application.
(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 properties that NAF plans to acquire.
(Note 7) Explanation on “details of leasing”(i)With regard to the Properties 1–3, a master lease agreement has been concluded 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 sucha master lease agreement is concluded. With respect to Property 4, a fixed-term building lease agreement has beenconcluded with J.S.B. Co., Ltd. as the lessee (and operator), and “total number of tenants” is entered as 1, with the lessee
as the tenant.

(ii) “Rentable units” denotes the number of units that can be rented within the property that NAF plans to acquire.
(iii) “Rented units” and “rented area” denote figures as of August 31, 2020 based on the report received from the seller.
(iv) “Rentable area” denotes the total area of the building that can be rented within the property that NAF plans to acquire.
(v) “Occupancy rate” denotes the ratio of the “rented area” against the “rentable area” and the figures are rounded to one
decimal place.
(vi) With regard to the Properties 1-3, “Monthly rental revenue” and “Deposit / Security deposit” are the total amounts of boththe monthly rent (including common service fees and excluding usage fees of attached facilities such as parking lot andtrunk room) and deposit / security deposit indicated in the lease agreement concluded between the master lease
company and end tenant as of August 31, 2020. Figures less than ¥1 thousand are rounded down and consumption tax
is excluded from those figures.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
7

(2) Effect on NAF’s financial position in the event of inability to execute forward commitments, etc.
Properties to be acquired are applicable to forward commitments (see Note) by investment corporations asprovided for in the Comprehensive Guidelines for Supervision of Financial Instruments Business Operators,
etc., defined by the Financial Services Agency. In the contract for the sale of real estate with condition precedent,
the agreement for the sale and purchase of each property is dependent on the completion of the raising of funds
for the transaction price of the property to be acquired by NAF through issuance of investment units or loans,etc., and in case such condition is not fulfilled, the portion of the contract for the sale of real estate with condition
precedent that relates to the sale and purchase of the respective property shall cease to be definitively effective,
and no claim for compensation or reparation of damages, losses and expenses (including attorney’s fees)
incurred in connection with the execution or expiration of such portion shall be made. Therefore, in the eventthat NAF is unable to fulfill its payment obligations under the contract for the sale of real estate with condition
precedent due to failure to raise funds through the issuance of investment units or loans, etc., NAF believes
that it is unlikely to have a direct and material adverse impact on its finances and distributions, etc., because
failure to perform so will not result in the payment of a penalty.
(Note)

Refers to the postdated sales contract under which payment and handover shall be made at least one month after theconclusion of the contract, or any other contract similar thereto.

(3) Outline of investigations into the state of the building, etc.
Property 2
Property 3
Property 4
Property 1
Park Cube Oimachi Park Axis Toyocho
Campus terrace
Name of properties to be acquired
Residence
Shinsui Koen
Park Axis Ofuna
Waseda(Note 1)
(Note 1)
Consigned
Tokio Marine &Sompo Risk
Tokio Marine & Nichido Risk Consulting
investigating
Nichido Risk
Management Inc.
Co., Ltd.
company
Consulting Co., Ltd.
Investigation
September 10,
November 10,
November 10,
June 15, 2020
report date
2020
2020
2020
Urgent repair
–
–
–
–
cost
Investigations
Short-term repair
into the state
–
–
–
–
cost
of building
Repair andrenewal costs¥38,485¥137,480¥130,641¥12,796expected to be
thousandthousandthousandthousandnecessary within
12 years
Replacement¥1,413,900¥2,508,000¥1,308,500¥441,200
value
thousandthousandthousandthousandConsigned
investigating
Tokio Marine & Nichido Risk Consulting Co., Ltd.
company
Earthquake
risk diagnosis Investigation
September 11,
November 10,
November 10,
August 27, 2020
report date
2020
2020
2020
PML value
4.0%
5.8%
14.8%
3.5%
(Note 2)
(Note 1) The amounts of “Park Cube Oimachi Residence” and “Park Axis Toyocho Shinsui Koen” are the amounts for the entire
property.
(Note 2) The report on earthquake risk diagnosis only states the views of the consigned investigating company and does not provide
any guarantee of their appropriateness or accuracy for its contents. PML (Probable Maximum Loss) value represents therate of probable maximum loss to be caused 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 (10% chance of a big
earthquake happening once every 50 years = a big earthquake which happens once every 475 years) represented by therate (%) of the estimated cost of restoration from the damage to the replacement cost.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
8

4. Outline of Seller
Name
Mitsui Fudosan Residential Co., Ltd.
Location
2-1, Nihonbashi-Muromachi 3-chome, Chuo-ku, Tokyo
Representative
Kiyotaka Fujibayashi, President & CEO
Medium and high-rise housing, detached housing, rental housing, overseas
Description of principal
business,urban redevelopment, reconstruction of apartments, commissioned
operations
Capital¥40,000 million
Date of establishment
December 26, 2005
Net assets
Not disclosed
Total assets
Not disclosed
Shareholding
Major stockholders andStockholder nameratio
shareholding ratio(As of March 31, 2020)
Mitsui Fudosan Co., Ltd.
100.0%
Relationship between NAF or the investment trust management company, and the seller
The seller holds 3.21% of total NAF investment units issued as of August 31,
2020. Also, the seller is a subsidiary of Mitsui Fudosan Co., Ltd., which is the
Capital relationships
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 1 property from theseller. Other than this, as of August 31, 2020, there are no business relationships
Business relationships
to report between NAF or the investment trust management company and theseller.
The seller does not fall under the category of related parties of NAF. Also, theseller is a subsidiary (100%) of Mitsui Fudosan Co., Ltd., which is the parent
Applicability to relatedcompany of the investment trust management company, and therefore falls
parties
under the category of related parties thereof.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
9

5. Situation of the acquirer of the property
Situation of theproperty owner
Name

Relationship witha special related
party
Property 1:
Park Cube Oimachi Residence
Property 2:
Park Axis Toyocho Shinsui Koen
Property 3:
Park Axis Ofuna
Property 4:
Campus terrace Waseda

Former owner, etc.
Mitsui Fudosan ResidentialCo., Ltd. (Note)
Wholly owned subsidiary of
Mitsui Fudosan Co., Ltd.,
which is the parent
company of the investment
trust managementcompany
Property 1:
Property developed by
ITOCHU Property
Development, Ltd. and
Mitsui Fudosan ResidentialCo., Ltd.

Acquisition history, Property 2:
Property developed byreason, etc.
Mitsui Fudosan Co., Ltd.
(Note)

Owner before theformer owner, etc.
None

―

―

Properties 3 and 4:
Properties developed by
Mitsui Fudosan ResidentialCo., Ltd.
Acquisition price(including othercosts)
Acquisition time

―

―

―

―

(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.

6. Outlines of brokerage
Not applicable.

7. Transactions with related parties and the like
Since Mitsui Fudosan Residential Co., Ltd., which is the seller, corresponds to related parties and the like(see Note), the real estate sales contract with condition precedent has been carried out through deliberation
and approval by the compliance committee and deliberation and decision by the investment committee of theinvestment 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 Property 1 to Property 3, corresponds to related parties and the like (see Note).
Therefore, the master lease contract and property management contract will be carried out through deliberation
and approval by the compliance committee and deliberation and decision by the investment committee of theinvestment trust management company, in accordance with NAF’s self-established rules on asset management
relevant to transactions with related parties and the like.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
10

(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 Article 123 of the Order for Enforcement of the Act on
Investment Trust and Investment Corporation.

8. Earthquake resistance matters
Property 1, Property 2 and Property 4 have received a structural calculation conformity judgment pursuant to
the Building Standards Act as revised by the Act No. 92 of 2006.
NAF outsourced the inspection and verification of the details of earthquake-resistant structures, including
structural calculation sheets, of Property 3, and for the building of the property to be acquired, obtained a viewthat structural calculation and structural drawings that ensure earthquake resistance as per the BuildingStandards Act have not been fabricated.
In addition, NAF always entrusts earthquake risk diagnosis to the third party investigating company to review
drawings and the like using structural design drawings, structural calculation sheets, etc., during the course ofdue diligence upon acquisition of properties, besides building certification investigations performed by aninspection and certification agency.
9. Outlook for management after acquisition of the properties
As stated in “Notification Concerning Revision to Financial Results Forecasts for the Periods Ending February
28, 2021 and August 31, 2021” released today.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
11

10. Summary of appraisal report
Property 1: Park Cube Oimachi Residence
Appraised value
Appraisal company
Date of value appraisal
Item

Value of earnings

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

1,910,000

1,950,000
290,277(a) Potential gross revenue

305,789(b) Vacancy loss, etc.

15,511(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses

6,540
1,549

(e) Repair expenses

2,949(f) Property management fees

9,896(g) Tenant soliciting fees, etc.

8,502(h) Taxes and public dues

15,768(i) Property insurance fees

356(j) Other expenses

619(k) Earnings from temporary
deposits(l) Capital expenditures(4) Net income [(3)+(k)−(l)]Appraised after taking into account medium- to longterm competitiveness based on levels of new rent atsimilar real estate and trends of such.
Appraised by considering competitiveness of the subject
real estate, etc. based on actual vacancy rates andstandard vacancy rates of similar real estate.

46,183(d) Utilities expenses(3) Net operating income [(1)−(2)]¥1,960,000 thousand (Note)
Daiwa Real Estate Appraisal Co., Ltd.
October 31, 2020
(Unit: Thousands of yen)
Summary, etc.
Appraised by judging the value of earnings found by thediscounted cash flow method in which the value isderived by specifying future net income fluctuations to
be more convincing and also verifying with the value of
earnings found by the direct capitalization method.

Posted based on amounts in the current contract.
Appraised based on levels at similar real estate andactual amounts of past fiscal years.
Posted repair expenses by making reference to therepair cost in the engineering report and levels of repair
expenses at similar real estate. Furthermore, appraised
the maintenance cost associated with evacuation oflessees by making reference to actual amounts of pastfiscal years and levels at similar real estate.
Appraised based on making reference to levels at
similar real estate.
Appraised based on levels at similar real estate, making
reference to actual amounts of past fiscal years.
Posted by appraising based on actual amounts after
considering burden levels, land price trends andadjustments for age.
Posted based on the estimated amount.
Posted by appraising miscellaneous expenses, etc.,
making reference to actual records of past fiscal years,etc.

244,094

326

3,958

Posted the amount obtained when the expected amountof deposits received, etc. is multiplied by the investment
yield appraised by comprehensively taking into accountthe viewpoints of both management aspects andprocurement aspects.
Posted by making reference to the renewal cost in theengineering report and levels of renewal cost at similar
real estate.

240,462<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
12

Item

(5) Cap rate

Value calculated by discounted cash flow
methodDetails (Note)

3.7%

1,890,000

Discount rate

3.5%

Terminal cap rate

3.9%

Cost method value
Land ratio
Building ratio
Market value of property to be acquired (30% of
co-ownership)
Market value of property acquired (70% of coownership)
Market value assuming full ownership of one
building
Incremental value
Allocation of the incremental value to property to
be acquired
Limited value of property to be acquired (30% of
co-ownership)

Other items considered by the appraisal
company in making the appraisal

Summary, etc.
Appraised by taking the cap rate for similar uses locatedin the area with the lowest risk as a standard andadding/subtracting the spread attributable to the subject
real estate’s various conditions, level of current rent
against market rent and other conditions, and by making
reference to the cap rate for the same supply-demandarea, etc.

Appraised by making reference to interviews withinvestors, etc., after using a combination of the methodof deriving by comparison with similar real estatetransactions and the method of deriving by factoring theindividual characteristics of the real estate into the yieldof financial assets.
Appraised after comprehensively taking into accountfuture trends of investment yield, risk of the subject realestate as an investment target, general projection of
future economic growth rates, real estate price trends,
etc., making reference to the market-derived cap rate ofsimilar transactions.

1,380,000
69.5%
30.5%
1,910,000
4,450,000
6,530,000
170,000
51,9001,960,000
This appraisal seeks “for marketable real estate, a value that fairly
represents the market value of the acquired part of the property basedon that market limitation in cases where the market is relatively limited bya discrepancy between the market value and the market value that would
be generated under the same market concept as the normal value basedon the merger of the property with other properties to be acquired,” andthe value to be sought is the limited value.

(Note) “Appraised value,” “Value of earnings,” “Value calculated by the direct capitalization method,” “Value calculated by discounted
cash flow method,” and “Cost method value” are the amounts equivalent to 30% of the co-ownership to be acquired by NAF. The
items other than those are the amounts for the entire property.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
13

Property 2: Park Axis Toyocho Shinsui Koen
Appraised value
Appraisal company
Date of value appraisal
Item
Value of earnings
Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)]Details (Note)
6,620,000

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(j) Other expenses(3) Net operating income [(1)−(2)]1,812
275,698(k) Earnings from temporary
deposits

625(l) Capital expenditures(4) Net income [(3)+(k)−(l)](5) Cap rate

¥4,391,000 thousand (Note)
Japan Real Estate Institute
October 31, 2020
(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.

8,470

Upon 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 town hall association fees, etc.
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.

267,853

4.0%

Appraised upon taking the standard cap rate 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.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
14

Item
Value calculated by discounted cash flow
methodDetails (Note)
6,540,000

Discount rate

3.7%

Terminal cap rate

4.2%

Cost method value
Land ratio
Building ratio
Market value of property to be acquired (65% of
co-ownership)
Market value of property acquired (35% of coownership)
Market value assuming full ownership of one
building
Incremental value
Allocation of the incremental value to property to
be acquired
Limited value of property to be acquired (65% of
co-ownership)

Other items considered by the appraisal
company in making the appraisal

Summary, etc.

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.

6,320,000
70.9%
29.1%
4,300,000
2,320,000
6,760,000
140,000
91,0004,391,000
This appraisal seeks a value that fairly represents the market value ofthe property based on that market limitation in cases where the market isrelatively limited by a discrepancy between the market value and themarket value that would be generated in a market that meets theconditions considered reasonable under actual socioeconomic conditions
and the value to be sought is the limited value.

(Note) “Appraised value,” is the amount equivalent to 65% of the co-ownership to be acquired by NAF. The items other than those are
the amounts for the entire property.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
15

Property 3: Park Axis Ofuna
Appraised value
Appraisal company
Date of value appraisal
Item
Value of earnings
Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)]Details
2,320,000
2,350,000
158,449(a) Potential gross revenue

170,751(b) Vacancy loss, etc.

12,302(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses(d) Utilities expenses

6,374
3,449

5,678

(f) Property management fees

6,424(g) Tenant soliciting fees, etc.

5,173(h) Taxes and public dues

7,909(i) Property insurance fees

315(j) Other expenses(3) Net operating income [(1)−(2)]543
122,584(k) Earnings from temporary
deposits

230(4) Net income [(3)+(k)−(l)](5) Cap rate
Value calculated by discounted cash flow
methodAppraised based on medium- and long-term stablerental income, etc. based on current condition, etc.
Appraised based on standard vacancy rates giving
consideration to individual characteristics of the subject
real estate.

35,865(e) Repair expenses(l) Capital expenditures¥2,320,000 thousand
JLL Morii Valuation & Advisory K.K.
October 31, 2020
(Unit: Thousands of yen)
Summary, etc.
Calculated making correlation to the value of earnings
found by the discounted cash flow method and the valueof earnings found by the direct capitalization method.

7,621

Appraised based on actual records making reference tolevels at similar real estate.
The cost of restoration to original condition is appraised
giving consideration to actual records and theevacuation rate, making reference to levels at similar
real estate. Repair expenses are posted as 30% of astandardized amount assuming the estimate in theengineering report to be appropriate.
The contract to be concluded is deemed reasonable andapplied, making reference to levels at similar real estate.
Appraised by taking into account local practice and theevacuation rate of the subject real estate.
Appraised by considering the fluctuation rate and annual
depreciation, etc. based on actual amounts.
The amount is posted assuming the presented materials
to be appropriate.
Posted other operating expenses.
Appraised by deducting the amount equivalent tovacancy from the amount of the security deposit at thetime of full occupancy, multiplied by a 1.0% yield.
Posted 70% of a standardized amount assuming theestimate in the engineering report to be appropriate.

115,193
4.9%

Appraised by considering the income and capitalfluctuation risk in addition to the discount rate.

2,280,000

Discount rate

4.7%

Terminal cap rate

5.1%

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

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
16

Cost method value
Land ratio
Building ratio
Other items considered by thecompany in making the appraisal

1,610,000
63.3%
36.7%
appraisal—<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
17

Property 4: Campus terrace Waseda
Appraised value
Appraisal company
Date of value appraisal
Item
Value of earnings
Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)](a) Potential gross revenue(b) Vacancy loss, etc.
(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses(d) Utilities expenses(e) Repair expenses(f) Property management fees(g) Tenant soliciting fees, etc.
(h) Taxes and public dues(i) Property insurance fees(j) Other expenses(3) Net operating income [(1)−(2)](k) Earnings from temporary
deposits(l) Capital expenditures(4) Net income [(3)+(k)−(l)](5) Cap rate
Value calculated by discounted cash flow
methodDetails
1,870,000
1,900,000
Not disclosed(Note)

Not disclosed(Note)

78,370Not disclosed(Note)

77,763
4.1%

Appraised by considering the income and capitalfluctuation risk in addition to the discount rate.

1,830,000

Discount rate

3.9%

Terminal cap rate

4.3%

Cost method value
Land ratio
Building ratio¥1,870,000 thousand
JLL Morii Valuation & Advisory K.K.
October 31, 2020
(Unit: Thousands of yen)
Summary, etc.
Calculated making correlation to the value of earnings
found by the discounted cash flow method and the valueof earnings found by the direct capitalization method.

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

1,190,000
61.5%
38.5%

Other items considered by the appraisal
company in making the appraisal—(Note) Not disclosed as the consent from the lessee regarding the disclosure has not been obtained.

<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
18

＜Attached Documents＞
1.

Portfolio list after the purchase of properties to be acquired is completed (on a planned acquisition price basis)

2.

Photos of the properties to be acquired and map of the area

NAF’s website: https://www.naf-r.jp/english/<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
19

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

Total Planned Acquisition Price¥328,240 million

Number of Investment Properties

131 properties

Total Rentable Units (including retail units)

12,957 units

Proportion of Investment by Asset
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 2)

Rental Apartments¥310,541 million

94.6%

Hospitality Facilities¥17,699 million

5.4%¥328,240 million

100.0%

Grand Total
Proportion of “Rental Apartments” by Area

Planned Acquisition Price

Portfolio Share(Note 1)

(Note 3)

Tokyo 23 Wards¥273,560 million

88.1%

Greater Tokyo (Note 4)¥14,426 million

4.6%

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

7.3%¥310,541 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) Please refer to NAF’s website for the latest portfolio list:
https://www.naf-r.jp/portfolio/5-1.html<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
20

＜Attached Document 2＞
Photo of the property to be acquired and map of the area
Property 1: Park Cube Oimachi Residence

Oimachi Station<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
21

Property 2: Park Axis Toyocho Shinsui Koen

Tokyo Metro Tozai Line
Minami‐Sunamachi Station<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
22

Property 3: Park Axis Ofuna

Ofuna Station<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
23

Property 4: Campus terrace Waseda

Tokyo Metro Tozai Line
Waseda Station<Caution> This document is a press release intended for general publication regarding NAF's acquisition of real estate properties and is notfor purposes of soliciting investment. When investing, we ask that investors exercise their own judgment taking full responsibility after having
read carefully the new investment unit issuance and secondary offering prospectus, or any corrections thereof (if made), prepared by NAF.
24