January 29, 2019
To All Concerned Parties
Issuer of Real Estate Investment Trust Securities
4-1, Nihonbashi 1-chome, Chuo-ku, Tokyo 103-0027
Nippon Accommodations Fund Inc.
Executive Director
Takashi Ikeda(Code Number 3226)
Investment Trust Management Company
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
President and CEO
Tateyuki Ikura
Contact CFO and Director
Tetsuji Kawakami(TEL. 03-3246-3677)

Notification Concerning Acquisition of Domestic Real Estate Property(Dormy Odawara)
This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trustmanagement company, which has been commissioned by Nippon Accommodations Fund Inc. (“NAF“) to manage
its assets, decided on and completed 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 of Incorporation,
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 for acquisition(1) Name of property acquired

Dormy Odawara(2) Type of property acquired

Real estate(3) Acquisition price (Note 1)¥521,000 thousand(4) Appraised value (Note 2)¥613,000 thousand(5) Date of conclusion of sale contract

January 29, 2019(6) Date of handover

January 29, 2019(7) Seller

Not disclosed (Note 3)(8) Acquisition fund s

Own funds(9) Method of payment

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

(Note 2)

“Appraised value” is based on the amount mentioned in the real estate appraisal report (date of value appraisal on(Note 3)Not disclosed as the consent from the seller has not been obtained.

December 31, 2018) which Daiwa Real Estate Appraisal Co., Ltd. prepared for the property acquired.

3. Description of the property acquired(1) Outline of the property acquired
Name of property acquired
Type of property acquired
Appraisal companyAppraised value (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)
Structure / Number of stories(Note 5)Use (Note 5)
Building
Gross floor area (Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests

Dormy Odawara
Real Estate
Daiwa Real Estate Appraisal Co., Ltd.
¥613,000 thousand
December 31, 2018
3-3 Odawara 1-chome, Miyagino-ku, Sendai-shi, Miyagi60%
200%
Category 2 residential district
2,075.94 m2
Proprietorship
February 24, 1998
Flat-roofed reinforced concrete structure / 8 stories
Galvanized steel sheet-roofed steel-framed structure / 2 stories
Dormitory / warehouse
2,384.98 m2 / 67.16 m2
Proprietorship78
2,384.98 m2 / 67.16 m2
None

Special affairs (Note 6)

For part of the land of the property, surface right for the purpose ofconstructing a railway viaduct has been set and registered.

Special features of the property

Located approximately a 14-minute walk from JR Sendai Station,the property provides excellent access to the city center.
The central commercial district has been formed on the west exitside of the JR Sendai Station and a number of condominiums andapartments have been constructed on the east exit side in recentyears.
Corporate contracts for transferees can be expected in addition to
demand from singles who commute to the central commercial
district as well as students who commute to the universities, etc. in
the vicinity, mainly seeking convenience of living in a city center.

Details oftenants(Note 7)

Total number of tenants
Rentable unitsRented units
Rentable area
Rented area
Occupancy rate
Deposit / Security deposit
Total rental revenues

17878
2,452.14 m2
2,452.14 m2
100.0%
Not disclosed as the consent from the lessee has not beenobtained.
¥4,157 thousand(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 the property acquired.
(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) “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 acquired.
(Note 7) Explanation on “details of tenants”(i)“Total number of tenants” is denoted as “1” where a master lease agreement (a bulk lease agreement) has been concluded
with the lessee. As to the property acquired, NAF has succeeded a fixed-term building lease agreement with the seller as
the lessor and Fujita Corporation as the lessee, as of today. The above “Total number of tenants” is denoted as “1”indicating the number of said lessee. In addition, Fujita Corporation, the lessee, is currently using part of the property
themselves after concluding a sublease agreement with Kyoritsu Maintenance Co., Ltd. (operator).

(ii) “Rentable units” denotes the number of units that can be rented within the property acquired.
(iii) ”Rented units” and “rented area” are based on the fixed-term building lease status succession agreement concluded asof today. “Deposit / Security deposit” is not disclosed as the consent from the lessee has not been obtained.
(iv) “Rentable area” denotes the total area of the building that can be rented within the property acquired.
(v) “Occupancy rate” denotes the ratio of the “rented area” against the “rentable area” and the figures are rounded to one
decimal place.
(vi) ”Total rental revenues” denotes a monthly rent (fixed rent) stated in the fixed-term building lease agreement.

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

Tokio Marine & Nichido Risk Consulting Co., Ltd.
January 16, 2019－－¥62,710 thousand¥550,900 thousand
Tokio Marine & Nichido Risk Consulting Co., Ltd.
January 16, 2019
0.2%(Note) 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.

Profile of third-party investigative bodyName
Tokio Marine & Nichido Risk Consulting Co., Ltd.
Address
5-1, Otemachi 1-chome, Chiyoda-ku, Tokyo
Representative
Taizo Shimakura, President and Chief Executive Officer
Research, study, provision of information, assessment, consulting, holding ofDescription of principal
seminars, publishing, provision of training, etc. on security, disaster prevention,operations
sanitation, environment, product safety and information management, etc.
Capital¥100 millionRelationship with NAF
or the investment trust
management company

None

4. Outline of seller
The seller is a domestic business corporation, but information is not disclosed as the consent from the seller has
not been obtained. There are no capital, personal or business relationships to report between the seller and NAF,
the investment trust management company, or any related parties or associated companies of NAF or theinvestment trust management company. Moreover, the seller does not fall under the category of related parties of
NAF or the investment trust management company.

5. Situation of the acquirer of the property
The property acquired is not an acquisition from a party classified as having a relationship of special interest withNAF or the investment trust management company, therefore the situation of the acquirer is not stated

6. Outline of brokerage(1) Outline of broker
Name
Address
Representative
Description of principal
operations
CapitalDate of establishment
Relationship with NAF orthe investment trust
management company

Mizuho Trust & Banking Co., Ltd.
2-1 Yaesu 1-chome, Chuo-ku, Tokyo
Tetsuo Iimori, President & CEO
Trust business, acceptance of deposits or installment savings and other¥247,369 million
May 9, 1925
There are no capital, personal or business relationships to report between thebroker and NAF, the investment trust management company, or any relatedparties or associated companies of NAF or the investment trust managementcompany. Moreover, the broker does not fall under the category of related partiesof NAF or the investment trust management company.

(2) Amount of brokerage fee
Not disclosed as the consent from the broker has not been obtained.
7. Transactions with related parties and the like
The property acquired has not been acquired from a party classified as having a relationship of special interest withNAF or the investment trust management company.
8. Earthquake resistance matters
The property acquired has acquired the approval of the Minister of Land, Infrastructure, Transport and Tourism
pursuant to the provisions of Article 38 of the Building Standards Act.
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. and the like 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, 2019 (26th Period:
September 1, 2018 to February 28, 2019) will be minor, and there will be no change to financial results forecast forthe period.

10. Summary of appraisal report
Appraised value¥613,000 thousand

Appraisal company

Daiwa Real Estate Appraisal Co., Ltd.

Date of value appraisal

December 31, 2018
(Unit: Thousands of yen)

Item
Value of earnings
Value calculated by the direct capitalization
method [(4)÷(5)](1) Operating revenues [(a)−(b)]Details
613,000

Summary, etc.
Calculated the value of earnings found by income
approach judging the value of earnings found by thediscounted cash flow method to be more convincing andalso verifying with the value of earnings found by thedirect capitalization method.

615,000
49,891(a) Potential gross revenue

49,891(b) Vacancy loss, etc.
(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses

0

Posted rent based on the agreement.
Not posted as long-term tenancy is assumed.

5,902
0

Not posted based on the agreement.

(d) Utilities expenses

0(e) Repair expenses

1,781

Not posted based on the agreement.
Appraised based on the 12-year-period average repair
expenses stated in the engineering report.
Not posted based on the agreement.

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

0(h) Taxes and public dues

3,547(i) Property insurance fees

129(j) Other expenses

445

Not posted as a long-term tenancy is assumed.
Posted the amount assessed based on tax amountmaterials for fiscal 2018.
The amount is posted assuming the estimate to beappropriate.
Posted as discretionary reserve.

(3) Net operating income [(1)−(2)](k) Earnings from temporary
deposits

43,988326

Posted based on an appraised investment yield of 1.0%.

(l) Capital expenditures

4,369

Appraised based on the 12-year-period average repair
expenses stated in the engineering report.

(4) Net income [(3)+(k)−(l)]39,945(5) Cap rate
Value calculated by discounted cash flow
method

6.5%

Appraised by considering the rent burden risk based on
the current level with it being leased in its entirety as adormitory, referencing the cap rate of similar real estate,etc.

612,000

Discount rate

6.3%

Terminal cap rate

6.7%

Cost method value

585,000

Land ratio

67.5%

Building ratio

32.5%

Other items
considered by theappraisal company inmaking the appraisal*
NAF’s website: https://www.naf-r.jp/english/

Appraised using the comparison with discount rates oftransactions of similar real estate and yields of otherfinancial instruments, etc.
Appraised taking into account the marketability, etc. ofthe subject real estate at the end of the holding period
subject to the cap rate.

－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, the Japaneseoriginal shall prevail.

<Attached Documents>
1. Portfolio status after acquisition of the property is completed
2. Photo and map of the property acquired<Attached Document 1> Portfolio status after the Acquisition

Total Planned Acquisition Price¥308,222 million

Number of Investment Properties

125 properties

Total Rentable Units (including retail units)

12,356 units

Proportion of Investment in Assets
Planned Acquisition Price

Portfolio Share(Note 1)

(Note 2)

Rental Apartments¥292,333 million

94.8%

Hospitality Facilities¥15,889 million

5.2%¥308,222 million

100.0%

Grand Total
Proportion of “Rental Apartments” by Area

Planned Acquisition Price

Portfolio Share(Note 1)

(Note 3)

Tokyo 23 Wards¥255,083 million

87.3%Greater Tokyo (Note 4)¥12,326 million

4.2%

Other Major Cities (Note 5)¥24,924 million

8.5%¥292,333 million

100.0%

Total of “Rental Apartments”

The above table includes a property to be acquired which was announced in “Notification
Concerning Acquisition of Domestic Real Estate Property (Chisun Hotel Hiroshima)” dated
January 29, 2019.
(Note 1)

“Planned Acquisition Price” excludes miscellaneous expenses for acquisition, fixed property taxes,(Note 2)

The figure indicates the percentage of asset category to the total planned acquisition price.

urban planning taxes, consumption taxes and local consumption taxes.
(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 ofKanagawa, Saitama and Chiba.

(Note 5)“Other Major Cities” indicates major cities across Japan and their surrounding areas, excluding the(Note 6)

Please refer to NAF’s website for the latest portfolio list:

Tokyo area.
https://www.naf-r.jp/english/portfolio/6-2.html

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

Sendai Station