February 10, 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.
Representative Executive Director Yuji Yokoyama(Code number 3226)
Investment Trust Management Company
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
Representative President and CEO Kosei Murakami
Contact CFO and Director Morio Shibata(TEL 03-3246-3677)

Notification Concerning Issuance of New Investment Units andSecondary Offering of Investment Units
Nippon Accommodations Fund Inc. (“NAF”) hereby provides notice of its resolution regarding issuance of new
investment units and secondary offering of investment units adopted at the Board of Directors’ Meeting held onFebruary 10, 2011, as follows.
1. Issuance of new investment units by public offering(1)

Number of units to be offered

37,500 units(2)

Amount to be paid in

Undetermined. The amount to be paid in shall be determined at the(issue value)

Board of Directors’ meeting to be held on any date between February
22, 2011 (Tue) and February 25, 2011 (Fri) (“Issue Price DeterminationDate”).

(3)

Method of offering

The method of offering shall be by public offering where all investment
units are to be subscribed and purchased by an underwriting syndicate
whose joint lead managers are Nomura Securities Co., Ltd. and Merrill
Lynch Japan Securities Co., Ltd. (“Joint Lead Managers”). Underwriters
other than Joint Lead Managers are Daiwa Securities Capital Markets
Co., Ltd., Mizuho Securities Co., Ltd., Nikko Cordial Securities Inc. andMitsubishi UFJ Morgan Stanley Securities Co., Ltd. (hereinafterreferred to collectively with Joint Lead Managers as “Underwriters”).
The issue price (offer price) for the public offering shall be determinedin consideration of the degree of demand and other conditions basedon a tentative price obtained by multiplying the amount calculated bydeducting the projected distribution amount of ¥13,900 from the closing
price at the Tokyo Stock Exchange on the Issue Price Determination
Date (if no closing price is available for that date, the nearest precedingclosing price will be used) by a number between 0.90 to 1.00 (anyfractions less than one yen shall be omitted) if the Issue Price
Determination Date is February 22, 2011 (Tue) or February 23, 2011(Wed); or by multiplying the closing price at the Tokyo Stock Exchangeon the Issue Price Determination Date (if no closing price is available
for that date, the amount calculated by deducting the projecteddistribution amount of ¥13,900 from the nearest preceding closing price<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for 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 secondaryoffering prospectus, or any corrections thereof, prepared by NAF.

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will be used. However, if the Issue Price Determination Date isFebruary 25, 2011 (Fri) and no closing price is available for that datebut one is available for February 24, 2011 (Thu), the closing price for
February 24, 2011 (Thu) will be used) by a number between 0.90 to
1.00 (any fractions less than one yen shall be omitted) if the Issue
Price Determination Date is February 24, 2011 (Thu) or February 25,
2011 (Fri).
(4)

Details of underwriting contract The Underwriters shall pay in the amount equivalent to the total
amount to be paid in (issue value) to NAF on the payment date statedin (7) below. The difference between such amount and the total issue
price (offer price) for the public offering shall be retained by theUnderwriters. NAF shall pay no underwriting commission to theUnderwriters.

(5)

Subscription unit

One investment unit or more in whole units(6)

Subscription period

Two business days starting the business day immediately following theIssue Price Determination Date

(7)

Payment date

Any date between March 1, 2011 (Tue) and March 4, 2011 (Fri);
provided, however, that such day shall be the fifth business day
immediately following the Issue Price Determination Date.

(8)

The amount to be paid in (issue value) and any other matters necessary for this issuance of new(9)The above items shall be subject to the effectiveness of registration under the Financial Instruments

investment units shall be determined at a future Board of Directors’ meeting.
and Exchange Act.
2. Secondary offering of investment units by overallotment (see “Reference” item 1. below)(1)

Offerer(2)

Number of units to be offered

Nomura Securities Co., Ltd.
2,500 units
This number is the maximum number of investment units to be offered.
The number may decrease, or the secondary offering by overallotment
itself may be cancelled, depending on the degree of demand and otherconditions. The number of investment units to be offered shall bedetermined at the Board of Directors’ meeting to be held on the Issue
Price Determination Date, in consideration of the degree of demandand other conditions.

(3)

Offer priceUndetermined. The offer price shall be determined on the Issue Price
Determination Date; provided, however, that such offer price shall be
the same as the issue price (offer price) for the public offering.

(4)

Method of offering

Nomura Securities Co., Ltd. will make an offering of the maximum of
2,500 investment units of NAF that it borrows from the certain
investor(s) of NAF in consideration of the degree of demand and otherconditions in the public offering.

(5)

Subscription unit

One investment unit or more in whole units(6)

Subscription period

Same as the subscription period in the public offering(7)

Delivery date

The business day immediately following the payment date in the public(8)

The offer price and any other matters necessary for this offering of investment units shall beoffering
determined at a future Board of Directors’ meeting.
(9)

The above items shall be subject to the effectiveness of registration under the Financial Instruments<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for 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 secondaryoffering prospectus, or any corrections thereof, prepared by NAF.

2and Exchange Act.
3. Issuance of new investment units by third-party allocation (see “Reference” item 1. below)(1)

Number of units to be offered

2,500 units(2)

Amount to be paid in (issue value)

Undetermined. The amount to be paid in (issuevalue) shall be the same as the amount to be paidin (issue value) for the public offering.

(3)

Allottee

Nomura Securities Co., Ltd.

(4)

Subscription unit

One investment unit or more units in whole units(5)

Subscription period (subscription date)

March 25, 2011 (Fri)(6)

Payment date

March 28, 2011 (Mon)(7)

Investment units not subscribed within the subscription period (subscription date) stated in (5) above(8)

The amount to be paid in (issue value) and any other matters necessary for this issue of new(9)

The above items shall be subject to the effectiveness of registration under the Financial Instruments

shall not be issued.
investment units shall be determined at a future Board of Directors’ meeting.
and Exchange Act.
<Reference>
1. Secondary offering by overallotment, etc.
(1)

The secondary offering by overallotment stated in “2. Secondary offering of investment units byoverallotment” above is a secondary offering of overallotted units to be made in conjunction with the public
offering in “1. Issuance of new investment units by public offering” above in an amount not to exceed 2,500
investment units of NAF, that will be borrowed by Nomura Securities Co., Ltd. from the certain investor(s) ofNAF in consideration of the degree of demand and other conditions in the public offering (secondary offeringby overallotment). Although 2,500 investment units is planned to be offered by overallotment, this is themaximum number of investment units to be offered and, depending on the degree of demand and otherconditions, such number may decrease, or the secondary offering by overallotment itself may be cancelled.
In connection with the secondary offering by overallotment, the Board of Directors of NAF has resolved, atthe meeting held on February 10, 2011 (Thu), that NAF will issue by third-party allocation 2,500 investment
units of NAF necessary to return the units borrowed from the certain investor(s) of NAF by Nomura Securities
Co., Ltd. (“Borrowed Investment Units”), where the payment date is March 28, 2011 (Mon) and the allottee isNomura Securities Co., Ltd. (“Third-Party Allocation”).
Furthermore, Nomura Securities Co., Ltd. may also purchase investment units of NAF on the Tokyo Stock
Exchange up to the number of investment units to be offered by overallotment (“Syndicate CoverTransactions”) to return the Borrowed Investment Units. All investment units of NAF purchased throughSyndicate Cover Transactions shall be used to return the Borrowed Investment Units. Such Syndicate CoverTransactions would be made during the period beginning on the date immediately following the last day ofthe subscription period of the public offering and secondary offering by overallotment and ending on March
18, 2011 (Fri) (the “Syndicate Cover Transaction Period”). During the Syndicate Cover Transaction Period,Nomura Securities Co., Ltd. at its discretion may not conduct any Syndicate Cover Transactions or may
terminate any Syndicate Cover Transactions before the number of investment units purchased reaches thenumber of investment units of the secondary offering by overallotment.
In addition, Nomura Securities Co., Ltd. may conduct stabilizing operations as it conducts the public offeringand the secondary offering by overallotment. The investment units of NAF purchased through such stabilizing
operations may be used, in whole or in part, to return the Borrowed Investment Units.
Nomura Securities Co., Ltd. plans to underwrite the allocation under this issuance of new investment units by
Third-Party Allocation of a number of investment units of NAF obtained by deducting (a) the number of<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for 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 secondaryoffering prospectus, or any corrections thereof, prepared by NAF.

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investment units purchased through stabilizing operations and Syndicate Cover Transactions that are to be
used to return the Borrowed Investment Units, from (b) the number of investment units to be offered in theoverallotment. Accordingly, all or a part of the investment units to be issued under this issuance byThird-Party Allocation may not be subscribed for, which may result in a decrease in the maximum number ofinvestment units planned to be issued under this issuance by Third-Party Allocation, or in the cancellation of
the entire issuance due to forfeiture.
(2)

The transaction stated in (1) above shall be made by Nomura Securities Co., Ltd. in consultation withthe Merrill Lynch Japan Securities Co., Ltd.
2. Change in the number of issued investment units by this issuance
156,178 units
Total number of issued investment units at present
Increase in number of investment units by public offering
37,500 units
193,678 units
Total number of issued investment units after public offering
2,500 units (Note)
Increase in number of investment units by Third-Party Allocation
196,178 units (Note)
Total number of issued investment units after Third-Party Allocation(Note) Number of units in the event Nomura Securities Co., Ltd. subscribes all investment units offered byThird-Party Allocation, and said units are issued.
3. Purpose and reason for issuance
The issuance of new investment units was decided as a result of an examination of the current LTV (Loan toValue Ratio), market trends and cash distributions in an effort to promote external growth through the purchaseof new specified properties.
4. Total amount to be procured, specific use of funds and scheduled outlay period(1)

Total amount to be procured (approximate net balance)¥22,631,840,000 (maximum)(Note) Sum of ¥21,217,350,000 in net proceeds from the public offering and the ¥1,414,490,000 maximumnet proceeds from the issuance of new investment units by third-party allocation. The above amountis a prospective amount calculated based on the closing price at the Tokyo Stock Exchange forJanuary 31, 2011 (Mon).
(2)

Specific use of procured funds and scheduled outlay period

The procured funds shall be allocated for part of the acquisition of specified properties to be purchased by
NAF in and after March 2011 (as mentioned in “Notification Concerning Acquisition of Domestic Real Estate
Properties and Domestic Real Estate Trust Beneficiary Interest” released on February 10, 2011).
5. Designation of distributees
No relevant item
6. Future prospects
As mentioned in “Notification Concerning Financial Results Forecast for the Periods Ending August 31, 2011
and February 29, 2012” released on February 10, 2011.

<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for 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 secondaryoffering prospectus, or any corrections thereof, prepared by NAF.

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7. Management conditions during the three most recent fiscal periods and status of equity finance(1)

Management conditions during the three most recent fiscal periods
7th Period

8th Period

9th Period

March 1, 2009 to

September 1, 2009 to

March 1, 2010 toAugust 31, 2009

February 28, 2010

August 31, 2010

Net income per unit (Note 1)¥13,626¥16,137¥13,748

Distribution per unit

¥13,626¥14,567¥13,748

Actual payout ratio (Note 2)

100.0%

100.0%

100.0%¥550,978¥533,863¥533,045

Net assets per unit
(Notes)1. Net income per unit is calculated by dividing net income by the weighted average number of investment units.
2. Payout ratios are indicated with figures after the first decimal place omitted. The payout ratio for the period ended
February 28, 2010 is calculated as follows: Payout ratio = Total distribution amount (¥2,275 million) ÷ Net income(¥2,275 million) × 100(2)

Conditions during the most recent investment unit prices

A. Conditions during the most recent three fiscal periods
7th Period

8th Period

9th PeriodMarch 1, 2009 to

September 1, 2009 to

March 1, 2010 toAugust 31, 2009

February 28, 2010

August 31, 2010

Opening price¥371,000¥519,000¥462,500

Highest price¥523,000¥532,000¥492,500

Lowest price¥359,000¥431,000¥436,000

Closing price¥512,000¥461,000¥488,000

B. Conditions during the most recent six-month period
2010
September
OctoberNovember

December

2011
January

February

Opening price¥488,000¥479,500¥478,000¥534,000¥640,000¥621,000

Highest price¥488,000¥511,000¥550,000¥638,000¥640,000¥629,000

Lowest price¥474,000¥464,500¥476,500¥534,000¥591,000¥585,000

Closing price¥479,500¥479,500¥535,000¥628,000¥614,000¥601,000(Note) The investment unit price for February 2011 is the price as of February 9, 2011.

C. Investment unit prices on the business day immediately prior to the resolution date of the issuance
February 9, 2011
Opening price¥596,000

Highest price¥602,000

Lowest price¥593,000

Closing price¥601,000<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for 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 secondaryoffering prospectus, or any corrections thereof, prepared by NAF.

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(3)

Status of equity finance during the three most recent fiscal periods

・Capital increase through public offering
Issue dateNovember 4, 2009

Total amount procured¥19,795,062,000

Issue value¥471,311

Number of issued investment units
at the time of the offering
Number of investment units issued
by the offering
Total number of issued investment
units after the offering

113,480 units

42,000 units

155,480 units

Specific use of procured funds at theTo be fully allocated for the acquisition of specified properties to betime of the issue

purchased by NAF

Scheduled outlay period at the timeof the issue
Current status of the allocation

In and after November 2009
Fully allocated during the above scheduled outlay period

・Capital increase through third-party allocation
Issue date

December 1, 2009

Total amount procured¥328,975,078

Issue value¥471,311

Number of issued investment units
at the time of the offering
Number of investment units issued
by the offering
Total number of issued investment
units after the offering

155,480 units

698 units

156,178 units

Allottee

Nomura Securities Co., Ltd.

Specific use of procured funds at theTo be fully allocated for the acquisition of specified properties to betime of the issue

purchased by NAF

Scheduled outlay period at the timeof the issue
Current status of the allocation

In and after December 2009
Fully allocated during the above scheduled outlay period

8. Others (Restrictions on sale and additional issuance, etc.)
A. Regarding the 6,600 investment units of NAF held as of February 10, 2011 by Mitsui Fudosan Co., Ltd.,an investor that has held investment units of NAF since before the public offering, said company has
agreed with the Joint Lead Managers that it shall not effectuate any sale, etc. of the investment units it
holds during the period from the Issue Price Determination Date to the date six months after the business
day immediately following the payment date of the public offering, without the prior written consent of theJoint Lead Managers (however, excluding where investment units are lent to Nomura Securities Co., Ltd.
for the purpose of secondary offering by overallotment).
<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for 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 secondaryoffering prospectus, or any corrections thereof, prepared by NAF.

6

B. NAF has agreed with the Joint Lead Managers that it will not effectuate any issuance, etc. of investment
units of NAF in connection with the public offering during the period from the Issue Price Determination
Date to the date three months after the business day immediately following the payment date of the public
offering without the prior written consent of the Joint Lead Managers (however, excluding where newinvestment units are issued by Third-Party Allocation or by investment unit split).
In the event of either A. or B. above, the Joint Lead Managers at their discretion have the right to dissolve
said agreements in whole or in part during the respective periods above.
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 club of
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 translation of the Japanese original document is provided solely for information
purposes. In the event of any discrepancy between the Japanese original and this English translation, theJapanese original shall prevail.

<Caution> This document is a press release intended for general publication regarding NAF’s issuance of new investment units andsecondary offering of investment units and is not for 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 secondaryoffering prospectus, or any corrections thereof, prepared by NAF.

7