October 5, 2012
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.
Executive Director
Yuji Yokoyama(Code number 3226)
Investment Trust Management Company
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
President and CEO
Kosei Murakami
Contact CFO and Director
Satoshi Nohara(TEL 03-3246-3677)
Notice Concerning Acquisition of Investment Assets(Anonymous Partnership Equity Interests)
This is a notification that Nippon Accommodations Fund Inc. (“NAF”) decided on and completed the acquisitionof investment assets (anonymous partnership equity interests) 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 investment assets was made to secure opportunity toacquire superior properties through investments in anonymous partnership equity interests and ensure thesteady growth of the entire portfolio, and for the diversification and further enhancement of the investment
portfolio in Tokyo’s 23 wards.
Through this acquisition, NAF will receive from the operator of the anonymous partnership, dividends of profits
from rental revenues, etc., from real estate in trust. In addition, NAF will be granted preferential negotiationrights for trust beneficiary interest in real estate in trust, or real estate in trust through this acquisition. NAF will
not be obliged to acquire the trust beneficiary interest in real estate in trust. However, with the grant ofenforceable right in the future, opportunity to acquire superior rental housing is secured and it is expected tocontribute to NAF’s healthy portfolio growth and increased profitability through expansion of asset size over themedium- to long-term.

2. Overview of Acquisition(1) Name of asset acquired(2) Type of asset acquired(3) Real estate in trust(4) Investment amount(5) Date of conclusion of sales contract(6) Date of acquisition(Anonymous partnership equity interest in) Godo Kaisha ABF1
Equity interest in anonymous partnership investing in domestic
real estate in trust beneficiary interest
Iris Nihonbashi Suitengu
Iris Ginza East¥150,000 thousand (9.1% of total anonymous partnershipequity interest)
September 26, 2012September 26, 2012

(7) Acquisition funds

Own funds

3. Description of Asset Acquired(1) Outline of the anonymous partnership
Name of operator

Godo Kaisha ABF1

Anonymous partnershipagreement valid until

Through September 30, 2016

Total amount of net
asset¥1,650 million

Outline of the investment in the anonymous partnership
Godo Kaisha ABF1
Non-recourse loan
Trust beneficial interest¥3,460 million
in real estate in trust
Net assets including anonymous partnership equity
and other assetsinterest¥5,110 million¥1,650 million(Note 1) (Note2)(Note 3)Outline of theanonymous partnershipagreement

Note 1: Godo Kaisha ABF1 is scheduled to acquire trust beneficiary interest in realestate in trust on September 27, 2012. Furthermore, the amount listed
above includes acquisition costs of trust beneficiary interest in real estatein trust and formulation cost of anonymous partnership, etc.
Note 2: The total appraised value of the underlining real estate is ¥5,080 million (asof August 31, 2012)
Note 3: NAF is scheduled to invest ¥150 million (9.1%) of the total amount of net
assets of Godo Kaisha ABF1. There are no special relations of interest
between NAF or the Investment Trust Management Company and otherinvestors.
Note 4: Sumitomo Mitsui Trust Real Estate Investment management Co., Ltd. isscheduled to be the asset manager of Godo Kaisha ABF1. There are no
special relations of interest between NAF or the Investment TrustManagement Company and the Company.
Calculation period:
The calculation periods are every quarter. The quarters are January 1 to theend of March, April 1 to the end of June, July 1 to the end of September, andOctober 1 to the end of December. However, the first calculation period will befrom the date of first execution of equity investment to the end of September,and in addition, in case of termination of anonymous partnership agreement,
the termination date will be the last day of calculation period.
Distribution of profits and losses:
The operator will distribute the profit, if any, to the anonymous partnership
equity interest holders according to their investment ratio for each calculation
period on the last day of each calculation period. If losses from operator oranonymous partnership equity interest holders accumulate, then the said profit
will be allocated to the cumulative losses of operator first and then to thecumulative losses of anonymous partnership equity interest holders according
to their investment ratio before the distribution mentioned above. If losses fromthe business are generated in each calculation period, anonymous partnership
equity interest holders shall be distributed the losses according to theirinvestment ratios on the last day of each calculation period. However, in thecase where the cumulative loss exceeds the total equity interest, the excess
loss will be distributed to the operator.

Outline of preferential negotiation right granted through acquisition of anonymous
partnership equity interests

Outline of Preferential
Negotiation Right

Description ofpreferential
negotiationrightsExercise periodof preferential
negotiationrightsPreferential
negotiationrights priceterms

Preferential negotiation rights for acquisition of real estatein trust or its trust beneficiary interest scheduled to beacquired by the operator on September 27, 2012.
Through September 30, 2014

Acquisition of ¥4,980,000
thousand or more
Prime breakdown:
Iris Nihonbashi Suitengu:
Iris Ginza East:¥2,711,000 thousand¥2,269,000 thousand(2) Overview of real estate in trusti. Iris Nihonbashi Suitengu
Name of property acquired
Type of property acquired

Iris Nihonbashi Suitengu
Trust beneficiary interest

Trustee

Mitsubishi UFJ Trust and Banking Corporation

Trust period

From June 29, 2005 to May 31, 2020

Appraisal company

Morii Appraisal & Investment Consulting Inc.

Appraisal value (Note 1)
Date of value appraisal (Note 1)¥2,780,000 thousand
August 31, 2012

Location

Residence indication

33-4 Nihonbashi-Hakozakicho, Chuo-ku, Tokyo

Building-to-land ratio
Floor-area ratio
ZoningSite area (Note 2)
Ownership form
Completion date (Note 3)

80%
500%
Commercial zone
2740.36 m
Proprietorship
May 12, 2005

Structure / number ofstories (Note 4)

Flat-roofed reinforced concrete structure / 12 stories

Uses (Note 4)

Apartment building

Land

Building

Gross floor area (Note 4)
Ownership form
Rentable units
Rentable area
Existence of security interests (Note 5)
Special affairs (Note 6)

4,780.44 m2
Proprietorship
77
4,235.33 m2
NoneNone

Special features of the property

Details of tenants(Note 7)

The property is approximately a two-minute walk fromSuitengumae Station on the Tokyo Metro Hanzomon Line andapproximately an eight-minute walk from Ningyocho Station on theTokyo Metro Hibiya Line and the Toei Subway Asakusa Line. It isapproximately 5 minutes from Suitengumae Station to Otemachi
Station providing excellent access to central Tokyo. As it isapproximately a two-minute walk to Tokyo City Air Terminal, it also
provides excellent access to Haneda Airport and Narita
International Airport.
Demand can be expected mainly from businesspersons, DINKs
households and families who stress value on location.

Total number of tenants1Rentable units

77

Rented units

69

Rentable area

4,235.33 m

Rented area

3,857.96 m

Occupancy rate

91.1%

Deposit¥24,076 thousand

22

Please refer to <Attached Document 1>
Total rental revenues

Summary of the appraisal report on theamount of the real estate in trust.

ii. Iris Ginza East
Name of property acquired
Type of property acquired

Iris Ginza East
Trust beneficiary interest

Trustee

Mitsubishi UFJ Trust and Banking Corporation

Trust period

From June 29, 2005 to February 29, 2020

Appraisal company

Morii Appraisal & Investment Consulting Inc.

Appraisal value (Note 1)
Date of value appraisal (Note 1)¥2,300,000 thousand
August 31, 2012

Location

Residence indication

3-1-3 Minato, Chuo-ku, Tokyo

Building-to-land ratio
Floor-area ratio
ZoningSite area (Note 2)
Ownership form
Completion date (Note 3)

80%
500%
Commercial zone2555.26 m
Proprietorship
June 1, 2005

Structure / number ofstories (Note 4)

Flat-roofed reinforced concrete structure / 12 stories

Land

Building

Uses (Note 4)

Apartment building
2

Gross floor area (Note 4)
Ownership form
Rentable units
Rentable area
Existence of security interests (Note 5)
Special affairs (Note 6)

4,248.30 m
Proprietorship
77
3,358.63 m2
NoneNoneSpecial features of the property

The property is approximately a five-minute walk from Shintomicho
Station on the Tokyo Metro Yurakucho Line, in addition, it provides
excellent access to central Tokyo as it can use multiple stations andmultiple lines as it is in walking distance to Tsukiji Station on theTokyo metro Hibiya Line and Hatchobori Station on the JR Keiyo
Line.
The neighborhood is in walking distance of facilities such as
convenience stores, etc., Chuo City Ward Office and Saint Luke’s
International Hospital, lending to high convenience in daily life.
Demand can be expected mainly from businesspersons andfamilies who stress value on location.

Details of tenants(Note 7)

Total number of tenants

1

Rentable units

77

Rented units

73

Rentable area

3,358.63 m

Rented area

3,186.30 m

Occupancy rate

94.9%

Deposit¥17,920 thousand

22

Please refer to <Attached Document 1>
Total rental revenues

Summary of the appraisal report on theamount of the real estate in trust.

(Note 1)

“Appraised value” and “Date of value appraisal” are stated based on the amount mentioned in the real estate(Note 2)“Site area” of the “Land” item denotes the land area as entered in the register.

appraisal report which Morii Appraisal & Investment Consulting, Inc. prepared for the real estate in trust.
(Note 3)“Completion date” of the “Building” item denotes the date as entered in the register.

(Note 4)

“Structure / number of stories,” “Uses,” and “Gross floor area” are stated based on the entries in the register.

(Note 5)

The right of pledge is scheduled to set operator as the pledger and the non-recourse lenders as the pledgee(Note 6)

“Special affairs” denotes matters which NAF recognizes as important as of today, taking into consideration(Note 7)

Description of the “Details of tenants” column:

concerning the trust beneficiary rights in real estate in trust.
their effects on title-related matters, use, appraised value, profitability, etc. of the real estate in trust.
(i)“Rentable units” denotes the number of rentable units in the real estate in trust.

(ii) Figures for “Rented units,” “Rented area,” and “Deposit” are based on information provided by theoperator, valid as of August 31, 2012.
(iii) “Rentable area” denotes the total rentable area of the building of the real estates in trust.
(iv) “Occupancy rate” is the ratio of “Rented area” to “Rentable area” and is rounded to one decimal place.

(3) Outline of operator of anonymous partnership
Trade name

Godo Kaisha ABF1

Head office address

Nihonbashi Itchome Building, 1-4-1 Nihonbashi, Chuo-ku, Tokyo

Representative

Representative employee: ABF1
Operational executor: Takanori MishinaDescription of Principal

1. Acquisition, possession and disposal of trust beneficiary interest in real estate in trust

operations

2. Transaction, leasing, management, acquisition, possession, disposal and use of real estate
3. All business incidental to the above

Capital¥100,000

Date of establishment

August 31, 2012

Anonymous partnership

General Incorporated Associations ABF1

equity investment holder
Relationship between the Investment Trust Management Company and the Company
Capital relationship

There are no capital relations to report between NAF or the Investment Trust Management
Company and the Company. Also, there are no capital relations to report between relatedparties or associated companies of NAF or the Investment Trust Management Company andrelated parties or associated companies of the Company.

Personal

There are no personal relations to report between NAF or the Investment Trust Management

relationship

Company and the Company. Also, there are no personal relations to report between relatedparties or associated companies of NAF or the Investment Trust Management Company andrelated parties or associated companies of the Company.

Business

There are no business relations to report between NAF or the Investment Trust Management

relationships

Company and the Company. Also, there are no business relations to report between relatedparties or associated companies of NAF or the Investment Trust Management Company andrelated parties or associated companies of the Company.

Applicability toThe Company does not fall under the category of related party of NAF or the Investment Trust

related parties

Management Company. Also, the related parties and associated companies of the Company donot fall under the category of interested parties of NAF or the Investment Management
Company.

4. Transactions with Related Parties and the Like
Not applicable

5. Outline of Brokerage
Not applicable

6. Outlook for Management of the Properties after Acquisition
NAF will separately disclose the outlook for results of operations subsequent to acquisition of these investment
assets. NAF plans to make the disclosure when the financial results for the fiscal period ending in August 2012
are announced, scheduled for (October 16, 2012).

*

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 clubof 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 language notice is a translation of the Japanese language notice dated September
26, 2012 and was prepared solely for the convenience of, and reference by, overseas investors. NAF makes nowarranties as to its accuracy or completeness.

<Attached Documents>
1. Summary of the appraisal report on the amount of trust beneficiary interest in real estate in trust
2. Photos of exterior and entrance of the trust beneficiary interest in real estate in trust
3. Map of the trust beneficiary rights in real estate in trust

<Attached Document 1> Summary of the appraisal report on the amount of the amount of real estate in trust(unit: Thousands of yen)
Name of property acquired
Appraised value (specified value)
Assessment item(a) Unit rental revenues, includingcommons area fees(b) Utilities revenues(c) Parking lot revenues(d) Other revenues
Revenues from key money, etc.
Operatingrevenues
Renewal fees
Other revenues(1) (a)+(b)+(c)+(d)(e) Total loss from vacancies, etc.
(f) Loss on bad debts(2) Operating revenues [(1)-(e)-(f)](g) Maintenance expense(h) Utilities expense(i) Repair expense(j) Property management fees
Operating (k) Tenant soliciting fee, etc.
expenses (l) Taxes and public dues(m) Property insurance fee(n) Other expenses(3) Operating expenses[(g)+(h)+(i)+(j)+(k)+(l)+(m)+(n)](4) Net operating income [(2)-(3)](o) Earnings from temporary deposits(p) Capital expenditures(5) Net income [(4)+(o)-(p)](6) Cap rate
Value of earnings calculated by the direct capitalization
method [(5)÷(6)]Value calculated by discounted cash flow method
Discount rate
Terminal cap rate
Cost method value
Total value of land and building
Land value
Building value
Adjustment

Iris Nihonbashi Suitengu
2,780,000

Iris Ginza East
2,300,000

Details
176,817
0
7,104
4,497
0
4,136
361
188,418
10,5700177,848
3,722
2,306
4,517
7,278
5,587
7,249
379
1,256

146,30232,294
145,554404
4,806
141,152
5.0%

28,622
119,832
338
3,564
116,606
5.0%

2,820,000
2,740,000
4.7%
5.3%
1,700,000
1,696,000
728,000
968,0000

2,330,000
2,260,000
4.7%
5.3%
1,260,000
1,256,000
476,000
780,000
0

NAF requested real estate appraisal by Morii Appraisal & Investment Consulting, Inc., for the real

0
6,192
4,732
1,455
3,001
276
157,2268,772
0148,454
4,020
1,707
3,602
5,821
5,819
6,620
386
647

estate in trusted,based on points to note when appraising real estate from the Act on Securities Investment Trust and Securities
Investment Corporations, and based on the Act on Real Estate Appraisal (1963 Act No. 152, including lateramendments) and on real estate appraisal standards. The above figures record a summary of the real estate appraisal
report prepared. The appraisal valuation is the judgment and opinion of the appraiser at a fixed point in time, with noguarantees as to the validity or accuracy of the report, nor the possibility of transactions at the appraised value. Yenamounts are rounded down to the nearest thousand yen.

<Attached Document 2> Photos of exterior and entrance of the trust beneficiary interest in real estate in trust
1)

Iris Nihonbashi Suitengu

2) Iris Ginza East1) <Attached Document 3> Map of the trust beneficiary interest in real estate in trust2)

Iris Ginza East

Iris Nihonbashi Suitengu