8th Fiscal Period
Semi-Annual Report
March 1, 2019 to August 31, 2019
Securities Code: 3462

Nomura Real Estate Master Fund, Inc.
8-5-1 Nishi-Shinjuku, Shinjuku Ward, Tokyo
https://www.nre-mf.co.jp/en/O f f ice

Logi sti cs

Driving the Market as One of Japan’s Largest REITs
H otelCONTENTS

Resi dentia l

Re t ail

Message from the Management

P3

To Our Unitholders / Performance Highlights

Management Strategy

P5

Track Record of Growth since Establishment / Acquisitions in August 2019(8th) Fiscal Period / External Growth / Internal Growth

ESG Measures

P15

ESG Measures

Financing Status

P17

Financing Status / Balance Sheet Highlights / Market Review

Portfolio

P21

Portfolio Analysis / Portfolio Gallery

Investor Information

P27

Distribution Policy / Structure and Organization
Investor Information

Financial Section
Balance Sheet
Statement Of Income And Retained Earnings
Statement Of Changes In Net Assets
Statement Of Cash Flows
Notes To Financial Statements
Independent Auditor’s Report

P31

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Message from the Management
PERFORMANCE HIGHLIGHTS

NMF will strive to increase
unitholder value by securing
stable income over the
medium to long term andensuring the steady growthof assets undermanagement.
Shuhei Yoshida

7th Fiscal Period

8th Fiscal Period

9th Fiscal Period(forecast)*

Cash Distribution
per Unit¥3,128¥3,209¥3,248Operating Revenues¥35,428¥36,617¥36,712Net Income¥11,560¥11,690¥11,976

Total Assets¥1,117,851¥1,164,767¥1,162,579

Net Assets¥569,843¥600,910¥598,295¥131,853¥132,146¥131,571(including distribution inexcess of net income)millionmillionmillionmillionmillionmillionExecutive Director
Nomura Real Estate Master Fund, Inc.

millionmillionmillionmillionmillionmillionTo Our Unitholders
In the 8th fiscal period, NMF expanded its asset size

Concerning the promotion of activities on environ-to over ¥1 trillion through external growth realized

mental, social and governance (ESG) by NMF, NMF’s

by its first domestic and international public offer-

efforts to increase information disclosure and suchings (global offerings) since its founding while

have been recognized, and in May 2019, NMF was

advancing internal growth backed by an ongoing

included in the MSCI Japan ESG Select Leadersstrong leasing market centering on the office build-

Index, which the Government Pension Investment

ing sector.

Fund (GPIF) utilizes when conducting passive
management.

As a result, at the end of the 8th fiscal period,

Net Assets per Unit

* The above forecast distribution is calculated based on certain assumptions as disclosed in “SUMMARY OF FINANCIAL RESULTS (REIT) For the 8th Fiscal Period
Ended August 31, 2019,” published October 15, 2019. As such, the actual distribution may differ from this forecast due to future property acquisitions or sales, changes
in the real estate market, tenant changes or other changes in the circumstances surrounding NMF. The distribution forecast is not a guarantee of distributions.

Operating Revenues and Net Income(Millions of yen)

Operating Revenues

Cash Distribution per Unit

Net Income

(Yen)
3,500

40,000

NMF’s portfolio comprised 289 properties with a

We remain strongly committed to enhancing perfor-

total acquisition price of ¥1,011.2 billion. Operating

mance and will manage the fund’s assets with therevenues totaled ¥36,617 million, operating profit

aim of living up to the expectations and trust of ourreached ¥14,265 million, and net income came tounitholders.

¥11,690 million. With these, the per-unit distribution

As we move forward, we ask for your continued

for the 8th fiscal period came to ¥3,209.

support and encouragement.

30,000
3,000

3,248

2,737

20,000Through the abovementioned global offerings, NMF
improved its portfolio quality by acquiring 10 excel-

Gain
3,209
on
3,128
sales
3,084
299 3,028 3,037 3,047

2,500
10,000lent properties developed by the sponsor, and also
at the same time lowered the LTV ratio and further
increased distribution.

00

2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP(Forecast)3

Nomura Real Estate Master Fund, Inc.

2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP(Forecast)

Nomura Real Estate Master Fund, Inc.

4

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Track Record of Growth since Establishment
Improved portfolio quality through strategic property replacement supported by the Sponsor and achieved 		

steady increase in distributions.

August 2019

Incorporation
Number of properties

257

Number of properties

289

Ratio oftop 10 properties

26.8%

Ratio oftop 10 properties

23.1%

Ratio ofGreater Tokyo area

79.8%

Ratio ofGreater Tokyo area

82.0%

Average building age

19.3 years

Average building age

18.8 years

DPU¥2,656 (Note 1)(Billions of yen)

Asset Size

Accumulated Acquisition Price(without SPR)

792.6

784.6

(+20.8%)1,011.2

Accumulated Disposition Price

932.8
783.6

¥3,209

DPU

1,000

800

(23.1 years) (Note 2)

927.3

922.5

955.9

960.3

Absorption type merger
with TOP REIT, Inc.

The 1st PO

The 2nd PO

19 properties ¥137.4 bln

10 properties ¥33.4 bln

12 properties ¥57.4 bln

600

NEC Head
Office Bldg.

PMO Nihonbashi PROUD FLAT
Mitsukoshi-mae Sangen Jaya II

Harumi
Triton Y&Z

PMO Tamachi
Higashi400

GEMS
Shinbashi

330.9

181.9

200

9

0

220.9

279.9
Accumulated
Acquisition Price

66 properties¥330.9 bln
Accumulated
Disposition Price

-34.1
-81.5

Feb. 2016 FP

270.8

33.6

-34.1

Incorporation(Oct. 2015)

237.4

Aug. 2016 FP

Feb. 2017 FP

Aug. 2017 FP-105.0-105.0-110.3-110.3Feb. 2018 FP

Aug. 2018 FP

Feb. 2019 FP

Aug. 2019 FP

35 properties¥110.3 bln(Note 1) Distributions for February 2016 (the 1st) FP are calculated on a six-month basis for 152 operating days.
(Note 2) It is an average building age without taking into account the effect of property sales from the original portfolio at incorporation until the end of August 2019.
5

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

6

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Acquisitions in August 2019 (8th) Fiscal Period
Acquired 11 properties developed by the Sponsor in Greater Tokyo Area with the total acquisition
price of ¥50.9 billion (average building age is 1.1 years).

Hotel

Acquisition of Red Planet Naha Okinawa

Securing stable earnings through long-term fixed contract with hotel operator and the location where a wide range of
Office (Sponsor)

Logistics (Sponsor)

Hotel (Outside seller)

demand is expected.
Tomari Wharf
Passenger TerminalSo

Red Planet Naha Okinawa

ge
nj

Sh

or
iD

iow

ata

Ri

Richmond Hotels
Naha Kumoji

ve

r

58

an

MiebashiSta.

Urb
Okinawa

iR
iv
Ku
m
oj

Midorigaoka Park

GEMS Kayabacho¥2.5 bln
NOI yield: 4.4%

GEMS Shin-Yokohama¥1.8 bln
NOI yield: 5.4%

GEMS Namba¥3.8 bln
NOI yield: 4.4%

Faces National Route 58 where branch offices of major companies concentrate and located in a walking distance from Kokusai-dori Street,
expecting demands from both tourists and business travelers.

Summit Store Honamanuma¥2.1 bln
NOI yield: 6.0%

Acquisition Track Record of Sponsor-developed Properties(Millions of yen)

200,000

Total Acquisition Price of Sponsor-developed Properties (left axis)(%)

4 Brands Ratio (PMO, GEMS, Landport, PROUD FLAT) (right axis)

30.0

25.7%

150,000

22.3%
100,000

19.1%
16.8%

17.2%

17.1%

18.6%

0

Inception (Oct. 2015) Feb. 2016 FP

23,110Aug. 2016 FP

33,910Feb. 2017 FP

19.9%
92,03150,000

9,030

22.2%

50,805140,330

Feb. 2018 FP¥2,700 mln

Gross floor area

3,350.86 m2

Completion dateJune 6, 2008

Aug. 2018 FP

Feb. 2019 FP

Acquisition dateJune 26, 2019

Contract typeLong-term fixed contract

Hotel operator

K.K RED PLANET HOTELS JAPAN

Room types

56 double rooms, 61 twin rooms

20.0(Millions of people)

Accumulated Number of International Overnight Travelers

Accumulated Number of Overnight Travelers in 2018
(Millions of people)

30

70

25

60

Increase Rate Compared to 2011 Levels

64.3%

20.8

20

Aug. 2019 FP

Sponsor (4 brands)

14.1

5

Outside seller

0

20.1

20.1

21.7

61.2

57.8%

61.4%

22.8
50

47.4%

40

35.3
19.3

10

13.6

22.2

15.6

17.8

16.4

17.7

17.1

17.6

35.8

29.2%

30

25.2
20

14.8

22.8

24.6%

26.9%

21.4
20.3

0.6

0.8

1.5

2.4

3.7

4.5

4.6

5.3

2011

2012

2013

2014

2015

2016

2017

2018

Source: Overnight Travel Statistics Survey (Japan Tourism Agency)

18.3

10.3%

10

Sponsor (others)

Merger with TOP

26.5%

Appraisal value

Accumulated Number of Japanese Overnight Travelers

15.0

Seller Breakdown for the Properties as at August 2019 Fiscal Period End (Note 4)

25.7%¥2,650 mln

Comparison of the Accumulated Number of Overnight
Travelers in 2018 and Increase Rate of Overnight
Travelers Compared to 2011 Levels by Prefecture

Change in the Accumulated Number ofOvernight Travelers in Okinawa Prefecture

15

13.5%

Naha City, Okinawa

Acquisition price

25.0

0.0

Aug. 2017 FP

Location

92,031

62,215

Don Quijote
Kokusai Dori

i

or
ai D

us

Kok

Kencho-mae
Sta.

GEMS Shinbashi¥2.8 bln
NOI yield: 3.9%

er

i
or

(Note 3)Former Mitsubishi
Motors Suginami(Land)

Riv

oD

Redevelopment andreacquisition type SPR

ato

il
Monorau
Ch

Retail (Sponsor)

As

iba

er

Red Planet Naha Okinawa¥2.6 bln
NOI yield: 5.6%

Naha Elementary
SchoolIch

Landport Ome I¥13.6 bln
NOI yield: 4.6%

PMO Ochanomizu PMO Hatchobori Shinkawa PMO Kyobashi Higashi¥3.8 bln¥3.8 bln¥2.8 bln
NOI yield: 3.9%
NOI yield: 3.8%
NOI yield: 3.9%

PMO Tamachi Higashi¥10.9 bln
NOI yield: 3.6%

i

ri

0
Tokyo

Hokkaido

Osaka

Chiba

Okinawa Shizuoka Kanagawa

Kyoto

Source: Overnight Travel Statistics Survey (Japan Tourism Agency)

Sponsor ratio

34.3%

59.9 %

About Red Planet GroupRed Planet Group is based in Bangkok, Thailand and operates 30 hotels in Asia including 4 hotels in Japan(Asakusa, Nagoya, Sapporo, etc.). Red Planet Japan, Inc., the parent company of the lessee of the property and(Note 1) In this page, NOI yield refers to appraisal NOI yield at acquisition.
(Note 2) Average building age is calculated by weighted average of the building age on the acquisition date based on the acquisition price of the property.
(Note 3) SPR stands for Strategic Property Replacement.
(Note 4) Sponsor-developed properties indicate the properties acquired from Nomura Real Estate group or its real estate funds etc.
7

Nomura Real Estate Master Fund, Inc.

the hotel operator, is a JASDAQ-listed company focusing on providing customer-oriented services such as multilingual support and mobile apps for a wide range of customers centering on young generations.
Nomura Real Estate Master Fund, Inc.

8

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

External Growth -Strong Sponsor PipelinesThe sponsor has launched new brands for income-generating real estate targeting residential, logistics, office and retailuse and has promoted their development and operations, starting with PROUD FLAT in 2005, Landport in 2007, PMO in2008 and GEMS in 2012.

4 Property Brands Developed by the Sponsor

Nomura Real Estate’s Core Retail Facility Brand
Name

16 properties

9 properties

in the pipelinein the pipeline
GEMS Jingu-mae

GEMS Sangenjaya

GEMS Kawasaki
Project

GEMS comprise a variety of restaurants, primarily in urban
areas, with a commitment to quality. Brightening and enriching
the lives of nearby office workers and residents while proposing new lifestyles.

in the pipelinein the pipeline

Location

StatusChuo Ward, Tokyo

Jun. 2016

Operating

PMO Uchi-Kanda

Chiyoda Ward, Tokyo

May 2017

Operating

PMO Shibuya

Shibuya Ward, Tokyo

Jun. 2017

Operating

PMO Higashi Shinbashi

Minato Ward, Tokyo

Apr. 2018

Operating

PMO Hamamatsucho

Minato Ward, Tokyo

Nov. 2018

Operating

PMO Akihabara Kita

Taito Ward, Tokyo

Dec. 2018

Operating

PMO Nishi-Shinjuku

Shinjuku Ward, Tokyo

Jun. 2019

Operating

PMO Gotanda

Shinagawa Ward, Tokyo(Jul. 2019)

Under construction

PMO Kanda-Manseibashi Project

Chiyoda Ward, Tokyo(Jan. 2020) Under development

PMO Hamamatsucho Daimonmae

Minato Ward, Tokyo(Jul. 2020)

PMO Shibuya 3-chome

Shibuya Ward, Tokyo(Aug. 2020) Under construction

PMO Kanda-Iwamotocho 2-chome

Chiyoda Ward, Tokyo(Jan. 2021) Under construction

PMO Kojimachi

Chiyoda Ward, Tokyo(Mar. 2021)

Planning

Minato Ward Project 1

Minato Ward, Tokyo(Sep. 2022)

Planning

Chuo Ward Project

Chuo Ward, Tokyo(Mar. 2023)

Planning

Minato Ward Project 2

Minato Ward, Tokyo(Sep. 2025)

Planning

Name(Note 2)

Landport Higashi-Narashino

PMO is a new category of office building that is midsized
yet offers the functionality and quality of a large sized building to meet the needs of increasingly diverse businesses.
Strategy 1

Strategy 2

Office buildings where
people will be proud to work,
strengthening hiring andretention

Offices that enhance
corporate image andreputation, helping to attract
customers

Strategy 3

Buildings with one tenant
per floor to ensure efficiency,
independence and safety

9Strategy 4

Places that stimulate
employee motivation andcommunication, fosteringenhanced productivity

Nomura Real Estate Master Fund, Inc.

Shibuya Ward, Tokyo

Apr. 2018

Operating

GEMS Sangenjaya

Setagaya Ward, Tokyo

May 2018

Operating

GEMS Yokohama

Yokohama City, Kanagawa (Sep. 2019) Under construction

GEMS Sakae

Nagoya City, Aichi(Oct. 2019)

GEMS Kawasaki Project

Kawasaki City, Kanagawa(Oct. 2020) Under construction

Meguro Ward ProjectMeguro Ward, Tokyo(Jan. 2021)

Planning

Minato Ward Project

Minato Ward, Tokyo(Apr. 2021)

Planning

Chiyoda Ward Project

Chiyoda Ward, Tokyo(Feb. 2022)

Planning

Shinjuku Ward Project

Shinjuku Ward, Tokyo

TBD

Planning

Location

Completion(planned)

StatusLandport Kawaguchi

Kawaguchi City, Saitama

Jun. 2019

Operating

Landport Higashi-Narashino

Narashino City, Chiba(Jul. 2019)

Under construction

Landport Narashino

Narashino City, Chiba(Jan. 2020) Under construction

Landport Ome II

Ome City, Tokyo(Feb. 2020) Under construction

Landport Atsugi-Aikawacho (Note 2)

Atsugi City, Kanagawa(Mar. 2020) Under construction

Landport Shinonome

Koto Ward, Tokyo(May 2020) Under construction

Landport Ome III

Ome City, Tokyo(Nov. 2020) Under construction

Landport Koshigaya

Koshigaya City, Saitama(Mar. 2021)

Planning

Landport Ageo

Ageo City, Saitama(Jan. 2022)

Planning

Landport Kasukabe II

Kasukabe City, Saitama(Jul. 2024)

Planning

Landport Tama

Hachioji City, Tokyo

TBD

Planning

Name

Completion(planned)

PMO Nihonbashi Edo-dori

PMO Higashi-Shinbashi

StatusGEMS Jingu-mae

Nomura Real Estate’s Core Logistics Facility Brand(2,394 units)

Nomura Real Estate’s Core Office Brand

PMO Hamamatsucho

Completion(planned)

Under construction

27 properties

11 properties

PMO Akihabara Kita

Location

Landport offers advanced functionality to meet the needs ofthe changing logistics environment and diverse tenants.
Designed for optimized, efficient logistics to enhance tenantsatisfaction.

Under construction

Developments taking advantage of property replacement with Sponsor(Note 1)	Based on NREHD presentation materials for the Consolidated Financial Results for the First Quarter, FY2020. Properties sold as of October 1, 2019 have been
excluded.
(Note 2) Joint venture project.
(Note 3) As of the date of this presentation materials, NMF does not intend to acquire properties listed above.
Nomura Real Estate Master Fund, Inc.

10

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Internal Growth -Management StatusOffice
Achieved an increase in average unit rent through tenant replacements and rent revisions (Increased to ¥17,868/tsubo(+0.8%) from ¥17,723/tsubo at the end of last period.)
Asset Management Topics in August 2019 FP

Monthly rent decrease
Monthly rent increase

Pursuing income growth with upside potential through active tenant replacements backed bystrong leasing demand
Average Rent (Note 1)

Rate of Rent Increase upon
Rent Revision at PMOs

(Yen/tsubo)

19,000Rent gaps at the end of 8th fiscal period ended Aug. 2019 (Note 2)(Increased by +0.4% from previous FP)

18,500+ 6.4 %

18,00017,50017,723

17,54817,419Monthly rent increase
Monthly rent change rate(%)

(Millions of yen)

10

15

30

8

8

10.7%

5.9%

5.8%

4

11.4%

7.5%

7.4%

2

2

23

20

3.7%

6

2.0%

10

Rent revisionin PMO

16,000-1-4-1

Increased

0Feb. 2017 FP

Aug. 2017 FP

Feb. 2018 FP

Aug. 2018 FP

Feb. 2019 FP

3,444

0

-1
-7
(24,591 tsubo) (40,564 tsubo) (33,304 tsubo) (29,427 tsubo) (21,007 tsubo) (24,914 tsubo)-10(1,776 tsubo) (1,904 tsubo) (2,326 tsubo) (3,666 tsubo) (5,502 tsubo) (2,740 tsubo)

Residential
Achieved continuous rent increase with a focus on the Greater Tokyo area through move-ins and move-outs.

5,502
3,666

2,740

2,326

1,791

1,776

1,835

-1,583-3,240Feb. 2016 FP(5 months)

Aug. 2016 FP-3,662
Aug. 2017 FP

Feb. 2018 FP

in total

ExampleThe rate ofrent increase

387(Contracted) 1,447+ 11.4 %Upper figures show the floor area subject to replacement, andlower figures show rate of rent increase upon tenant replacement.

Feb. 2019 FP

Aug. 2019 FP

Contracted 1,447 tsubo
Applied
387 tsubo (Note)

72 out of 2,209 units(3.3%) renewed contract withincreased rent
Change in monthly rent +0.1% (+¥217 thousand/month)Feb. 2020 FP(Forecast)2,230 tsubo in total

Amount of Change in Monthly Rent at Move-ins and Move-outs(Thousands of yen)

6,000

+ 16.2 %Upper figures show the floor area subject to replacement and lower
figures show rent increased ratio by tenant replacement.

Amount of change in monthly rent

5,000

4,000

1,547

736 tsubo(+3.2%)NMF Aoyama
1-chome Building

244 tsubo(+22.9%)NMF Shiba Building

184 tsubo(+13.3%)

NRE Higashi-nihonbashi
Building

506 tsubo(+20.0%)PMO Nihonbashi
Odenmacho

70 tsubo(+29.5%)

PMO Akihabara

131 tsubo(+27.0%)

1,589

21.2%

442

11

7.0%

123

PRIME URBAN Toyosu

27

6.8%

229

Fukasawa House Towers H&I

13

6.4%

279

Rate of Change in Monthly Rent at Renewals
100%

Down

Flat

Up

9.4

6.9

9.1

5.8

7.1

3.3

2.0

1.5%
1.3%

7

PRIME URBAN Nihonbashi Yokoyamacho

2.5

1.8%

3,000

Kojimachi Millennium Garden (Residential)

2.7%

2.2%

2,000

Harumi Island Triton
Square Office Tower Z

3.0

Kojimachi Millennium Garden(Residential building)Number of units Average rate of change Change in monthly rent
moved-in /out
in monthly rent(¥ thousand/month)

Name of property

(%)

3.0%

Rate of change in monthly rent

The rate of rent increase

1,835 tsubo

Total

Achieved firm rent increase in multi-family
properties and properties in central Tokyothrough move-ins and move-outs.

➋ Change in monthly rent due to contract renewals

Floor area subject tomove-out (scheduled):
Of the above, floor area
subject to move-in (scheduled)

Examplemove-outs
725 out of 1,187 units (61.1%) replaced withincreased rent
Change in monthly rent +2.7% (+¥3,333 thousand/month)-5,456

Aug. 2018 FP

Achieved rent increase mainly in central Tokyo area
through move-ins and move-outs.

➊ Change in monthly rent due to move-ins and-2,2309th FP: Progress on Tenant Replacement (as of Sep. 30, 2019)

8th FP: Tenant Replacement Effect

2,740 tsubo-2,204-2,226-2,469Feb. 2017 FP

Change in monthly rent due tomove-ins and move-outs orcontract renewal(Applied)0-2,755

Feb. 2017 FP Aug. 2017 FP Feb. 2018 FP Aug. 2018 FP Feb. 2019 FP Aug. 2019 FP

Asset Management Topics in August 2019 FP

Net

3,439

0.6%

13

(Note) Figures in parentheses are the floor area upon tenant replacement and the floor area (tsubo) subject to rent revision. The change in monthly rent is calculated as
the weighted average of all subjected area.

Change in Floor Area from Move-ins and Move-outs (tsubo)Move-in

2

18

Aug. 2019 FP(Note 1)	The calculation method for the leased area of the properties in which the entire building is leased to one tenant has been changed from the presentationmaterial of the fiscal period ended August 2019.
(Note 2) It is calculated for the properties held by NMF excluding the properties for which the entire building is leased to one tenant.

Move-out

15

80Feb. 2017 FP Aug. 2017 FP Feb. 2018 FP Aug. 2018 FP Feb. 2019 FP Aug. 2019 FP
15,500

10

3
0

-2

16,500

2.4%

1.9%

4

3.3%

5

4

+ 4.8%
(%)

12
9

0

16,844

Average rate of rent increase
within rent revision with rent
increase

6717,15617,000+14.2%

3

5

Monthly rent decrease

Average rate of rent increase
within tenant replacementwith rent increase(Millions of yen)

4

Unchanged

17,868Monthly rent change rate

6

+ 4.1%

18,060191

Amount and Rate of Change in Monthly Rent
upon Rent Revision (Note)

Amount and Rate of Change in Monthly Rent
upon Tenant Replacement (Note)

2,868

3,212

3,333

1,801

1.5

90.3

92.9

90.9

94.1

92.8

96.7

0.3

0.2

0.0

0.1

0.1

0.0

1.0

1,000

0.5

0

0.0
Feb. 2017 FP Aug. 2017 FP Feb. 2018 FP Aug. 2018 FP Feb. 2019 FP Aug. 2019 FP

50%

0%

Feb. 2017 FP Aug. 2017 FP Feb. 2018 FP Aug. 2018 FP Feb. 2019 FP Aug. 2019 FP(Note) From the presentation material of the fiscal period ended August 2019 “Amount of change in monthly rent at move-ins and move-outs” and “Rate of change inmonthly rent at renewals” are calculated including figures in the results after replacements and renewals at Kojimachi Millennium Garden (residential building),
including the past fiscal period results.

(Note) The figure shows floor area for which NMF received an application for occupancy.
11

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

12

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Internal Growth -Management StatusRetail

Logistics

Achieved rent increase upon rent revision and tenant replacements, while maintaining stable cash flow by high occu-

Made leasing progress at Landport Iwatsuki, in addition to rent increase at contract renewal and conclusion of green

pancy rate and fixed rent.

lease agreement with tenants at Landport properties.

Asset Management Topics in August 2019 FP

Asset Management Topics in August 2019 FP

Contract renewal at Hanyu Logistics Center

Rent change through tenant replacements (excluding tenant with sales-linked rent)

Due to the expiration of the fixedlease term, a five-year extension of
the contract was concluded withimproved economic conditions(Rent increase rate +8.7%)

ExampleRent change rate

Floor area subject toreplacement:+ 16.7%

1,055 tsubo(+¥2,498 thousand/month)
EQUINIA Shinjuku

118 tsubo (+36.9%)(Millions of yen)

10,0004.4%
8,000

Residential areas (fixed-rent)
Sales-linked rent

4.2%

Station areas (fixed-rent) (%)
Rate of sales-linked rent
5

4.3%
3.8%

3.8%

3.7%

6,000
4,000

Pursuing upside
potential

4(Thousands of yen)

1,000

1.5%

800

3

600

2

400

Hanyu Logistics Center: Contract renewal (five years)

100Feb. 2017 FP Aug. 2017 FP Feb. 2018 FP Aug. 2018 FP Feb. 2019 FP Aug. 2019 FP

200

(%)

0.6

273
0.3

Existing leased area (143 tsubo)
USJ official store has achieved favorable sales since its opening on July 20, 2018.
The total rent (fixed-rent + sales-linked rent) was ¥61 million
higher than the previous tenant during the same period.

7.3%

2.3%

0

0.5%

0.0%

Feb. 2020 FP Aug. 2020 FP Feb. 2021 FP Aug. 2021 FP Feb. 2022 FP Aug. 2022 FP Feb. 2023 FP Aug. 2023 FP Feb. 2024 FP Aug. 2024 FP Feb. 2025 FP

Landport
IwatsukiIn the zone of 7,287tsubo, the departure of the tenant is scheduled on December 1, 2019.

➝ NMF has received an application for tenancy regarding approximately 50% (3,535tsubo) of the concerning zone, and for the
rest of the zone, NMF also has been in discussion with other tenant for tenancy.

(Note) The annual reduction in power consumption at Sagamihara Tana Logistics Center is the anticipated reduction in the area where LED devices are installed and replaced.
0Feb. 2017 FP Aug. 2017 FP Feb. 2018 FP Aug. 2018 FP Feb. 2019 FP Aug. 2019 FP

Implementation of strategic measures pursuing future upside potential.

Tenancy and Expansion of USJ Official Store at
Universal CityWalk Osaka

7.5%

7.1%

7.1%

3.1%
0.9

180

9.4%

1.2

729

343

11.8%

10.6%

1.5% 1.5

0.8%

263
2,000

1.6%

1.1%

317

• Achieved rent increase by 0.8% until 2028.
• All repair costs can be recovered during the contract period.
• Expected annual power reduction of approximately 60% at sites
where LED devices are installed and replaced. (Note)

772 tsubo (+16.4%)

Amount of change in monthly rent
Rate of change in monthly rent

1.1%

Sagamihara Tana Logistics Center (15,261 tsubo)

Lease Maturity (Rent basis)nORBASA

Amount and Rate of Change in Monthly Rent upon Rent
Revision (Retail properties in station area)

Rent Revenue Breakdown (Overall retail)

Conclusion of green lease agreement
accompanied by LED installment work

Renewal Plan of Nakaza Cui-daore Building
Considering a value-added plan to maximize
advantages of its location in the center of
Dotonbori, Osaka
External view (present)

Annual Rent Comparison with the Previous Tenant (Note)

Hotels
Improved profitability through multilayered value-up measures at Hotel Vista Sapporo Odori.

RevPAR has been increasing trend since acquisition
through promotion of rebranding and renewal.
➀ Rebranding in June 2018
• Opening under the name of “Hotel Vista Sapporo Odori” upon change of the operator.
➁ Renovation works from October 2018 to April 2019
• Conversion to Double-room from Single-room (12 rooms), to Twin-room from
Double-room (12 rooms)• Decoration works in common area (front desk area, corridor etc.)• Installation works of laundry room and smoking area
• Promotion through online booking

Conversion to Twin-room from Single-room

Up ¥61 mln in total

Sales-linked rent

Fixed-rent

Previous tenant

USJ official store*The graph present a comparison of sales from July 20, 2018 to July 19, 2019with those in the same period in the previous year

Adjacent new leased area (61 tsubo) opened
in July 2019.
Opened new leased area
(61 tsubo) on July 1, 2019.
Further rent revenues canbe expected by attracting
customers to the entire
facility as a large scale store
of 204 tsubo.

•Restructuring of store composition so that domestic and overseas visitors both canenjoy food and entertainment.
•Renovation of exterior wall to make the building’s external view eye-catching.
•Increase the attractiveness from the road by widening the entrance on the first floor.
•Increase the attractiveness on the first basement floor by reviewing line of flow andcommercial and environment design.

Schedule (assumption)
New leased area Existing leased area

The first phase (in 2020 winter): Preliminary opening at 4 out of 7 floors.
The second phase (in 2021 winter): Grand opening at all floors.

(Note) The sales-linked rent of the tenant is to be received in a lump sum once per year in March of each year, and the sales-linked rent shown in the table is that for sales from July 20, 2018 toMarch 31, 2019.

13

Nomura Real Estate Master Fund, Inc.

BeforeImprovement measures (draft)

After

PurposeBy increasing the number oftwin and double rooms, we
aim to increase sales per roomby making it easier to meet thedemand for group guests suchas inbound guests.

Operational performance before and after renewal
Rebranded open

2018

2019

March

April

May

June

July

August

RevPAR

3,818

3,260

4,682

7,904

9,591

10,374

Occupancy Rate

55.3%

46.3%

54.9%

80.1%

84.6%

86.0%

ADR

6,908

7,049

8,521

9,870

11,336

12,063

RevPAR

4,479

4,750

7,245

8,835

10,197

9,932

Occupancy Rate

66.0%

64.1%

79.4%

84.2%

85.7%

82.9%

ADR

6,783

7,414

9,125

10,496

11,898

11,986

Completion of renewal works* August 2019 was affected by a decrease in the number of foreign visitors to Japan

Nomura Real Estate Master Fund, Inc.

14

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

ESG Measures
Included in the MSCI Japan ESG Select Leader’s Index and obtained a “5-star” rating for three consecutive years in
GRESB real estate assessment.

GRESB (2019)

Inclusion in MSCI Japan ESG Select Leader’s Index
NMF has been included in the MSCI Japan ESG Select Leader’s Index at regular reconfigurations in May 2019.
About MSCI Japan ESG Select Leader’s Index“5-Star”“A”

in the Real Estate Assessment forthree consecutive years

in the Public Disclosure Levelfor three consecutive years

About GRESBGRESB is an annual benchmarking program aimed at evaluating environmental, socialand governance (ESG) initiatives undertaken by real estate businesses, GRESB wasestablished in 2009 by major Europe’s largest pension fund administrators, whichhave also taken the lead in establishing the UN Principles for Responsible
Investment, acting as its advocates. A total of 1,005 entities globally, comprising realestate companies, REITs and funds, participated in the 2019 Assessment.

The MSCI Japan ESG Select Leaders Index is an index to represent companies withhigh ESG performance selected based on the data from the MSCI Japan IMI Top
700 Index. The index has been selected by the Government Pension Investment
Fund (“GPIF”) as one of their ESG indices for their passive investment strategy.

(Note) The inclusion of NMF in any MSCI Index, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship,endorsement or promotion of NMF by MSCI or any of its affiliates. The MSCI
indexes are the exclusive property of MSCI. MSCI and the MSCI index names
and logos are trademarks or service marks of MSCI or its affiliates.

E

3rd

NMF obtained “A” at the MSCI ESG Ratings,
upgrading two ranks from “BB” previous year.
Points highly evaluated•Disclosure of green certification acquisition targets and increasein the ratio of green certification acquisition•Disclosure of employee training results and satisfaction surveys

in Global, Diversified – Listed SectorS

ESG Measures (E: Environment)

40 entities

1st

13 entities

in Domestic, Diversified Sector

ESG Measures (S: Society)

Initiatives for Resilience Against Natural Disasters

KPI：温室効果ガス（GHG）の床面積あたり排出量
KPI:
Greenhousegas (GHG)
Emissions per（原単位）
Floor Area
(intensity)[Target]

KPI：グリーン認証取得割合
KPI:
Ratio of Green Certification

0

100

GHG

Crude oil equivalent-4.3%

Reduce 25% by FY2030(compared to 2016 level)

-8.6%

-10

Target-25.0%-25.1%-30(Note)[Target]Raise the ratio to 70% by FY2030(total floor area basis)• Utilization of the 250 meters mesh seismic intensity warning mail system (since July 2019)
Based on the seismic intensity information provided by National Research Institute for Earth Science and Disaster Resilience, the NMF is able toreceive emails with the estimated seismic intensity of each area where the properties are located and estimated damages to the buildings fromthe system, utilizing a 250 meters mesh. The initial response can be accelerated by grasping the status of individual properties at an early stage.
Asset Manager• Seismic intensity
information• Estimated damage90-17.5%

-20

（注）

80

Target70.0%

70
60 57.5%

-40
-50

61.7%

Measurement of seismic intensity and sending awarning email on estimated seismic intensity

Feb. 2018

Feb. 2019Feb. 2031

Feb. 2018

Receipt of warning email• Disaster prevention at properties owned
PMO Nihonbashi Muromachi:
Functioned as disaster prevention base with emergency necessities (blankets, food, etc.) for 2,000 tenants employees.

50

Feb. 2017

Linked to individual properties held by NMF

・・・・・・・・

Feb. 2019Feb. 2031

Shinjuku Nomura Building:
Functioned as a temporary evacuation shelter to accommodate stranded people in the event of disaster upon the agreement with Shinjuku City Office.

(Note) Our properties with Green Certifications refer to those certified with any of DBJ Green Building Certification, BELS and CASBEE, etc.

Specific Measures to Reduce Environmental Impact

Intangible Services for the Tenants at PMO Properties

Intangible Services for the Tenants at Shinjuku Nomura Building

Invested Capital in Owned Properties to Reduce our Environmental Impact (examples below are from the 8th FP)
1. Saving Energy with LED Lighting• Shinjuku Nomura Building• NMF Shin-Yokohama Building• NMF Aoyama 1-chome Building• Ichibancho stear• Sagamihara Tana LC• Landport Kawagoe• Common area of 23 residential
properties, others

BeforeAfter

2. S
 aving Water by Upgrading
Toilets• NMF Shinjuku EAST Building

Total power reduction amountby the works during the 8th FP-2,152 Mwh/year (approx. -59.9%)
3. Saving Energy by Upgrading Air Conditioners• NEC Head Office Building• Sapporo North Plaza• NMF Osaka Building

BeforeAfter

Total power reduction amountby the works during the 8th FP-61 Mwh/year (approx. -17.7%)

Planned energy-saving work based on the results of the checks

Conducted energy-saving checks

63.2%(Total floor area basis)

Diversity of Directors of the Investment Corporation
Appointment of one female supervisory director and reappointment of two supervisory directors was resolved at the Second
General Meeting of Unitholders held on May 23, 2019. The term ofoffice began on June 1, 2019. Diversity in directors of the investment corporation and further governance is expected to be
secured.
Appointed directors
Executive
director

Supervisory
directors

Shuhei Yoshida(Reappointment)

Nomura Real Estate Master Fund, Inc.

Lawyer

Mineo Uchiyama(Reappointment)

Accountant

Koichi Owada(Reappointment)

Real estateappraiser

Mika Okada(New appointment)

Lawyer*Directors are all external experts.

15

Tenants’ networking event “Warming Party”(PMO Hamamatsu-cho, PMO Kyobashi Higashi)“Family Day”

Beer Garden and Music LiveG ESG Measures (G: Governance)

Percentage of checked areas(as of August 31, 2019)

Plans future energy-saving works
based on the results of the checks

PMO 10th anniversary event“Managers Networking Event”

Compliance Training Sessions at the Asset Management Company
Attendance
Rate

Month

Training Session Theme

Mar-18

Summary of compliance training program for the fiscal year of 2017

98.1%

Apr-18

Schedule of compliance training program for the fiscal year of 2018

100.0%

May-18

Responding to antisocial forces

100.0%

Jun-18Insider transaction regulations

100.0%

Jul-18Insider transaction regulations (Web training)

100.0%

Aug-18

Statutory books and legal documents

100.0%

Sep-18

Statutory books and legal documents (Web training)

100.0%

Oct-18

Information management

100.0%

Nov-18

Information management (Web training)

100.0%

Dec-18Regulations on related party transactions

100.0%

Jan-19Regulations on related party transactions (Web training)

100.0%

Feb-19Case study from issues pointed out in inspection to financial
instruments business operators by the authority and its member
association

100.0%

Nomura Real Estate Master Fund, Inc.

16

Message from the Management

Management Strategy

ESG Measures

Financing Status

Financing Status

Investor Information

Pursuing low interest rates and prolonged borrowing periods through refinancing.

DPU for August 2019 FP is ¥3,209, up ¥81 (+2.6%) from the February 2019 FP results.

Status of Interest-bearing Debt (as of end of fiscal period)Feb. 2016(1st FP)

Aug. 2016(2nd FP)

Feb. 2017(3rd FP)

Aug. 2017(4th FP)

Feb. 2018(5th FP)

Aug. 2018(6th FP)

Feb. 2019(7th FP)

Aug. 2019(8th FP)

Total Interest-bearing
debt¥403,164
million¥409,771
million¥498,784
million¥488,741
million¥486,198
million¥497,155
million¥497,112
million¥510,770
millionAverage remaining
duration

3.96 years

4.36 years

4.31 years

4.54 years

4.52 years

4.61 years

4.52 years

4.64 years

Average interest rate

1.09%

1.03%

0.95%

0.92%

0.91%

0.88%

0.87%

0.83%

Ratio of long-term debt

84.1%

85.9%

83.2%

88.0%

88.0%

87.2%

86.9%

86.0%

Ratio of fixed-rate debt

91.4%

95.8%

92.2%

94.9%

95.4%

95.4%

95.4%

94.1%

LTV

43.4%

43.8%

45.1%

44.6%

44.6%

44.4%

44.5%

43.9%

Investment corporation bonds (left axis)

Debt (left axis)

Average interest rate (right axis)(%)(Millions of yen)

1.92

60,00050,0001.19

40,00030,0001.17

1.02 1.06
0.74

0.70

0.58

2.0

0.99 0.93

0.68 0.65 0.67 0.62 0.67 0.70 0.71
0.54

1.13

1.03

0.61 0.54

10,000
0
9th
FP

10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
(Aug.
2020)

(Feb.
2021)

(Aug.
2021)

(Feb.
2022)

(Aug.
2022)

(Feb.
2023)

(Aug.
2023)

(Feb.
2024)

(Aug.
2024)

(Feb.
2025)

(Aug.
2025)

(Feb.
2026)

(Aug.
2026)

(Feb.
2027)

(Aug.
2027)

(Feb.
2028)

(Aug.
2028)

(Feb.
2029)

(Aug.
2029)

(Feb.
2030)

(Aug.
2030)

(Feb.
2031)

46th
FP
(Aug.
2038)

Total amount of Issuance¥3,000 million

Interest rate

0.53%

Payment date

September 20, 2019

Redemption date

September 20, 2029

Collateral / Guarantee

Not provided

Use of Proceeds

Used for a part of the refinancing for the
borrowings for acquiring PMO Tamachi Higashi.

As part of its efforts to promote ESG activities fora sustainable society, NMF has established a
Green Finance Framework (NMF has obtained
top rating "Green1 (F)“ of "JCR Green Finance
Framework Assessment" ) and issued its firstGreen Bond on September 20, 2019.
The issuance of ¥3,000 million of the Green
Bond attracted strong demand, with 15
investors announcing their intent to invest in
the bond.

Total amount of Issuance¥5,000 million

Interest rate

0.90%

Payment date

September 20, 2019

Redemption date

September 20, 2039

Collateral / Guarantee

Not provided

Nomura Real Estate Master Fund, Inc.

(Millions of yen)

Operating Revenue

1,188

Rental revenues

1,503

Rent and common area charges of portfolio
properties (excluding impact of LP Urayasu)

266

Impact of tenant turnover at LP Urayasu-170

Impact of acquisition/disposition

1,406

Other rental revenues
108

Cancellation penalty fee, etc.

256

Absence of gain on sales
Operating Expense

979

Rental Business Expenses

909

Seasonal changes in utility expenses paid, etc.

109

Rental business expenses of portfolio properties(excluding utility expenses paid)

503

Impact of acquisition/disposition(excluding utility expenses paid)

297

11,691
2,901
14,592

355
718
1,073

Internal Reserves(Total Internal Reserves)662(4,357)-282(4,074)–(-282)

3,209
2,571

(Yen)
81
-52

Asset management fees/Other operating
expenses

92

3,128
2,623

Non-operating Expenses

31

361

342

-19

Interest Expenses and other financial costs

51

144

296

152

Investment units issuance costs-19

Extraordinary Loss

-45

Absence of gain on natural disasters in 7th FP

-45


DPU
Distributions of earnings per unit
Distributions in excess of retained earnings
per unit [allowance for adjustment of
temporary differences]
Distributions in excess of retained earnings
per unit [other distributions in excess of net
earnings]

DPU
PMO Tamachi Higashi(Millions of yen)
1,164,767
46,915
1,011,279
55,295
510,770
13,65743.9%-0.6%
843,524
184,01725,8591,182
19,447
1,055

1,117,851
955,984
497,11244.5%
659,506
24,677
18,392

Absence of gain on sale of real estate-23(PRIME URBAN Chikusa)(Insurance income > Restoration expenses)

Net Income

129

Reversal of Internal Reserves

288(63 yen/unit)

Increase factors

Decrease factors

(Yen)

3,400

Rating description

Japan Credit Rating Agency, Ltd.
Long-term issuer rating: AA(JCR)

S&P Global Ratings Japan Inc.
(S&P)

-679

(4 residential properties)

Main Factors in Change of DPU (¥/unit)

Credit Ratings

Rating and Investment
Information, Inc. (R&I)

365

Seasonal changes in utility expenses received, etc.

3,600

Credit rating agency
5th Unsecured Investment Corporation Bond



11,3362,182
13,5183,500

Issuance of Investment Corporation Bonds on
September 20, 2019

Main Factors Accounting for Differences
Between the 7th Results and the 8th Results

Distribution of Earnings aDistribution in Excess of Net Earnings b
Total Distributions a+b


Total Assets
Acquisition Price
Interest-bearing debt
LTV
Market capitalization
NOI
FFO

Issuance of Investment Corporation Bonds (Green Bonds) on September 20, 2019
4th Unsecured Investment Corporation Bond (Green Bond)

1.0
020,000

(Feb.
2020)

(Millions of yen)Ended Feb. 28, 2019 Ended Aug. 31, 2019
Differences(7th FP)(8th FP)
Result (A)Result (B)(B) - (A)Operating Revenue
35,42836,617
1,188
Rental revenues
31,88533,388
1,503
Other rental revenues
2,857
3,222
365
Gain on sales of real estate
685
6
-679
Operating Expenses
21,372
22,351
979
Rental business expenses
14,977
15,887909
Repair expenses
1,515
1,727
212
Tax and public dues
2,831
2,982
151
Depreciation and amortization
4,911
5,135
223
Others
5,719
6,041
322
Loss on sales of real estate
23–-23
Asset management fees
3,124
3,224
100
Amortization of goodwill
2,622
2,622
–
Other operating expenses
625
617
-7
Operating Income
14,056
14,265209
Non-operating Revenues
75-1
Non-operating Expenses
2,546
2,578
31
Interest Expenses and other financial costs
2,462
2,514
51
Investment units issuance costs
75
55
-19
Other non-operating expenses
880
Ordinary Income
11,516
11,692176
Extraordinary Loss
45–
-45
Net Income
11,56011,690129
Net income (excluding realized gain)(10,898)(11,684)
(785)

1.5

1.33

Financial Section

Balance Sheet Highlights

Diversification of Repayment Dates

17

Portfolio

Issuer rating: A+
Long-term Issuer credit rating: A

Short-term Issuer credit rating: A-1

3,300

Increase in rent revenues and common area charges +22
Office+41
Retail-3
Logistics-29
Residential+6
Increase in utility expenses received+8
Other temporary revenues
+51

-125

Increase repair expenses-49
Increase in tax and public dues -33
Increase in utility expenses paid -8
Increase in other expenses
-34

82

3,000

3,128

2,900

Increase in rent revenues and+325
common area charges
Increase in utility expenses received +16
Other temporary revenues+7

Rental revenues(Portfolio properties)

Rental revenues(Acquisition anddisposition)-140

Increase in asset management fee-23
Increase in interest expenses and other financial cost -11
Decrease in investment units issuance costs+4
Absence of extraordinary gain and loss
-10
Reversal of internal reserves+66
Dilution of investment units due to issuance of-167
new investment units

0Feb. 2019 FP
DPU(Result)

-16
-21
-37
-10

-85

349

3,200
3,100

Increase in utility expenses paid
Increase in maintenance costs
Increase in depreciation expenses
Increase in other expenses

Rental business
expenses(Portfolio properties)

Rental business
expenses(Acquisition anddisposition)

Others3,209Aug. 2019 FP
DPU(Result)

Nomura Real Estate Master Fund, Inc.

18

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Market Review
OfficeRetail

東京都心5区空室率推移
VacancyRate (Tokyo Central Five Wards)

東京都心5区平均月額賃料
AverageMonthly Rent (Tokyo Central Five Wards)

小売業販売額（12ヶ月移動平均）＜業態別＞
RetailSales
Volume by StoreType (12-month moving average)

小売業販売額（12ヶ月移動平均）＜品目別＞
Retail Sales
Volume by Product
Type (12-month moving average)(%)(Yen/tsubo)

Jan.’14=100

Jan.’14=100

10.0

24,000125Supermarkets and food section of department stores
Chain stores (Supermarkets including GMS)
Department stores (Tokyo Area)

9.43

8.0

22,000
19/8
21,7846.0

20,000

Clothing

105

120

22,901

Food & beverages
Housing goods (daily necessities, home appliances, etc.)

110

100

115

95

110

90
4.0

105

18,000

85

100
2.49

2.0

16,000
19/8
1.71

0.0
’06

’07

’08

’09

’10

’11

’12

’13

’14

’15

’16

’17

’18

16,207

14,000

’19

’07

’08

’09

’10

’11

’12

’13

’14

’15

’16

’17

’18

’19

Source: Prepared by NREAM based on data from Miki 出所
ShojiCo., Ltd.
：三鬼商事よりNREAM作成

東京都心5区オフィスビル供給量推移予測
Supplyof Office Buildings (Tokyo Central Five Wards)

賃料・空室率マトリックス（東京都心5区
賃料Central
・空室率）
Rent
and Vacancy Rate
Matrix ・(TokyoFive Wards)(Thousands of tsubo)

Rent
(Yen)

New supply

700
Forecast

800,000
700,000'01.Q3
3.24%

19,000600,000‘03.Q28.57%

18,00017,000Previous
bottom100

16,000‘12.Q29.43%

015,000

200

’14

’15

’16

’17

’18

’19

’20

’21

’22

’23

1

出所：三鬼商事よりNREAM作成

Source: Prepared by NREAM based on data from Miki Shoji Co., Ltd.

2

3

’18

4

5

6

7

8

9

10

Vacancy Rate(%)

Source: Prepared by NREAM based on data from Miki Shoji Co., Ltd.

New supply (left axis)’19

Forecast

New demand (left axis)
Vacancy rate (overall) (right axis)

’14

16

Residential

10500,000
400,000

8

300,000

6

200,000

4

100,000

2.7%

2

0

0.6%

0

賃貸マンションの成約賃料指数（23区）
Rental Condominium Rent
Index (Tokyo’s 23 Wards)(People)(People)

8,000

800

Single Type 18 m2 – 30 m2
Compact Type 30 m2 – 60 m2

114

’15

’16

’17

’18

600

400

2,000

200

0

0

Foreign Visitor Arrivals

110

-200

’14

-400

’15

’16

’17

’18

’19

Source: Prepared by Ministry of Internal Affairs and Communications
出所：総務省よりNREAM作成

21.7

20.5

23.0

24.3

25.7

17.6

10
5
0
’16

’17

’18

’19

’20

’21

’22

’23

’24

Source: Prepared by NREAM出所
based
on data from Nomura ResearchInstitute, Ltd.
：野村総合研究所よりNREAM作成※年表示は年度を表す* Years show fiscal years

560

60

540

International overnight travelers

520
500

20

40

15

30

10

20

50

10

420

0

0

480

96

92

’14

’15

’16

’17

’18

’19

Source:マンション賃料インデックス
repared by NREAM （アッbasedon datafrom At Home
Co., Ltd.
and
出所：P
トホーム
・三井住友トラスト基礎研究所）よりNREAM作成
Sumitomo Mitsui Trust Research Institute Co., Ltd.

8.7%

3.9%

’18

’19

0

’16

’17

Source:Prepared（JNTO)よりNREAM作成
by NREAM based on datafrom JNTO「対前年比」は、出所：日本政府観光局※19年は推計値。
「対前年同期比」* Amount in 2019 is estimated.

Nomura Real Estate Master Fund, Inc.

15.4

70

22

’15

19

15

19.3
16.6

(Millions of people)

50

25

94
-4,000

20

(%)

104

100

27.2

Japanese overnight travelers

31

30

102

Forecast

25

YoY Change (right axis)

35

106

Online retail sales revenue

30

’15

98
-2,000’19

延べ宿泊者数
Total Number of Overnight Guests(Millions of people)

108
4,000

’18

Japanese
Ecommerce (B2C) Market
eコマース（B2C)市場予測(Trillions of yen)

’19

年間訪日外国人数
Foreign
Visitor Arrivals

112
6,000

’17

Hotels09Q1=100

Osaka (right axis)

’16

12

Source: Preparedby NREAM based ondata from CBRE
出所：CBREよりNREAM作成※空室率については、
2018年までは各年12月末時点*Vacancy rate shows figures as of the end of every December

人口流入超過数（12ヶ月移動平均）
Net
Population
Inflow (12-month moving average)’15

Source: Prepared by NREAM based on data出所
fromJapan ChainStore Association：日本チェーンス
トア協会よりNREAM作成

(%)

14

Vacancy rate
(a year or more after completion) (right axis)

’14

Tokyo

’17

Source: Prepared by
NREAM
based
on data from
the Ministryof Economy, Trade and出所：経済産業省、
日本チェーンス
トア協会、
日本百貨店協会よりNREAM作成
Industry, Japan Chain Store Association, and Japan Department Stores
Association(Tsubo)20,000300’16Large-Scale
Rental Logistics Facility
Supply and
東京圏 大型賃貸物流施設の需給バランス推移（2019年6月末時点）
Demand in the Tokyo Metropolitan Area (as of Q2 2019)’19.Q2
1,71%

21,000400’15Logistics’08.Q2
3.49%

22,000

500

70
’14

Previous peak

23,000

600

75

90

’06

Source: Prepared by NREAM based on data from Miki 出所
ShojiCo., Ltd.
：三鬼商事よりNREAM作成

80

95

460
440

’14

’15

’16

’17

’18

Source: Prepared by NREAM based on data from Tourism出所
Agency：観光庁よりNREAM作成
Nomura Real Estate Master Fund, Inc.

20

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Portfolio Analysis (as of Aug. 31, 2019)
NUMBER OF PROPERTIES

289

propertiesASSET SIZE

¥1,011,279

millionHotels0.6%

Other Area

18.0%

Portfolio Distribution (property locations in Japan, millions of yen)

OCCUPANCY RATE

99.3

%

Other

0.5%

1 Property 12 Properties
8,500 10,267

Residential
Facilities

2 Properties
10,390

19.1%

Diversification by
location

Office Buildings

Diversification byuse

Logistics
Facilities(based on acquisition price)

1 Property
3,600

45.1%

Retail Facilities

Retail Facilities(Residential areas)(near stations)

OthersOther

Top Ten Properties
as a Percentage
of Portfolio

23.1%

26.5%

Diversification byproperty type

Diversification bytenant(based on acquisition price)

Other Areas

51 Properties
39 Properties■ Retail
19 Properties■ Logistics
■ Residential 121 Properties
1 Property■ Other■ Office

11.6%

Top Ten Properties
as a Percentage
of Portfolio

279 Properties

HotelsTokyo Area

5.8%

76.9%

Retail(based on acquisition price)

Tokyo Area

Other

Residential

Logistics

17.3%
82.0%

Office3 Properties
7,400
5 Properties
1 Property
3,942
2,030

Total

231 Properties■ Hotels

14 Properties
11 Properties
1 Property
30 Properties
2 Properties

Total

58 Properties■ Office■ Retail■ Logistics
■ Residential(based on leased area)

7 Properties
48,310

Other

73.5%

1 Property
18,3002 Properties
4,520
2 Properties
6,580
1 Property
2,280

5 Properties
5 Properties
7,645
44,236
1 Property
3,460
4 Properties
25,6503 Properties
8,997

2 Properties
6,440 5 Properties
2,477

1 Property
2,320
48 Properties
368,185

4 Properties
5,830
1 Property
1,580

25 Properties
66,941
4 Properties
46,8303 Properties
105 Properties 38,100
141,266

5 Properties
9 Properties 37,990
33,9603 Properties
15,9108 Properties
12,081

7 Properties
4,632
1 Property
4,900
1 Property
3,080
Others1 Property
2,650

For a detailed list of properties in our portfolio, visit the website below.
https://www.nre-mf.co.jp/en/portfolio/index.html(Note) In the diversification by tenant, the leased areas of properties under pass-through master lease agreements are calculated based on the leased areas of end tenants.

21

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

22

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Portfolio Gallery
OfficeRetailTOP 3 Properties (acquisition price)

TOP 3 Properties (acquisition price)1

23

NEC Head Office Building

2

Shinjuku Nomura Building

3

Kojimachi Millennium
GardenLocation: Chiyoda Ward, Tokyo
Acquisition price: ¥26,700 million
Total floor area: 16,050.53 m2

1

Universal CityWalk Osaka
Location: Osaka City, Osaka
Acquisition price: ¥15,500 million
Total floor area: 86,888.64 m2

2

Yokosuka More’s City

Nakaza Cui-daore Building

Location: Minato Ward, Tokyo
Acquisition price: ¥44,100 million
Total floor area: 144,476.05 m2

Location: Shinjuku Ward, Tokyo
Acquisition price: ¥43,900 million
Total floor area: 117,258.88 m2

PMO Tamachi Higashi NEW

NMF Shibuya Koen-dori Building

NMF Shiba Building

GEMS Kayabacho

NRE Kichijoji Building

covirna machida

Location: Minato Ward, Tokyo
Total floor area: 7,088.17 m2

Location: Shibuya Ward, Tokyo
Total floor area: 5,358.55 m2

Location: Minato Ward, Tokyo
Total floor area: 11,425.20 m2

Location: Chuo Ward, Tokyo
Total floor area: 1,779.29 m2

Location: Musashino City, Tokyo
Total floor area: 5,550.35 m2

Location: Machida City, Tokyo
Total floor area: 4,209.06 m2

NEW

Location: Yokosuka City, Kanagawa
Acquisition price: ¥13,640 million
Total floor area: 43,890.82 m2

3

Location: Osaka City, Osaka
Acquisition price: ¥11,600 million
Total floor area: 8,280.08 m2

NRE Tennozu Building

SORA Shin-Osaka 21

Omron Kyoto Center Building

Sagamihara Shopping Center

Konami Sports Club Fuchu

EQUINIA Aobadori

Location: Shinagawa Ward, Tokyo
Total floor area: 25,260.48 m2

Location: Osaka City, Osaka
Total floor area: 38,252.92 m2

Location: Kyoto City, Kyoto
Total floor area: 34,616.84 m2

Location: Sagamihara City, Kanagawa
Total floor area: 56,351.42 m2

Location: Fuchu City, Tokyo
Total floor area: 12,214.97 m2

Location: Sendai City, Miyagi
Total floor area: 5,692.03 m2

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

24

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Portfolio Gallery
Logistics

Residential

TOP 3 Properties (acquisition price)

TOP 3 Properties (acquisition price)1

Landport Urayasu
Location: Urayasu City, Chiba
Acquisition price: ¥17,400 million
Total floor area: 71,570.64 m2

Landport Ome I

25

2

Landport Itabashi
Location: Itabashi Ward, Tokyo
Acquisition price: ¥15,710 million
Total floor area: 53,561.44 m2

3

Landport Kawagoe
Location: Kawagoe City, Saitama
Acquisition price: ¥13,700 million
Total floor area: 72,352.88 m2

1

Fukasawa House Towers H&I
Location: Setagaya Ward, Tokyo
Acquisition price: ¥7,140 million
Total floor area: 12,135.36 m2

2

PRIME URBAN Toyosu
Location: Koto Ward, Tokyo
Acquisition price: ¥5,290 million
Total floor area: 9,630.96 m2

3

PRIME URBAN Sapporo
Riverfront
Location: Sapporo City, Hokkaido
Acquisition price: ¥4,480 million
Total floor area: 21,239.84 m2

Landport Atsugi

Landport Kashiwa Shonan II

PROUD FLAT Sangenjaya II

PRIME URBAN Meguro Mita

PRIME URBAN Shibaura LOFT

Location: Ome City, Tokyo
Total floor area: 57,721.34 m2

Location: Atsugi City, Kanagawa
Total floor area: 49,504.38 m2

Location: Kashiwa City, Chiba
Total floor area: 51,485.62 m2

Location: Setagaya Ward, Tokyo
Total floor area: 3,522.92 m2

Location: Meguro Ward, Tokyo
Total floor area: 1,101.06 m2

Location: Minato Ward, Tokyo
Total floor area: 2,429.98 m2

Landport Hachioji II

Landport Hachioji

Kawaguchi Ryoke Logistics Center

PRIME URBAN Kagurazaka

PRIME URBAN Musashi Kosugi
comodoSerenite Shinsaibashi Grande

Location: Hachioji City, Tokyo
Total floor area: 33,028.63 m2

Location: Hachioji City, Tokyo
Total floor area: 35,948.63 m2

Location: Kawaguchi City, Saitama
Total floor area: 41,867.82 m2

Location: Shinjuku Ward, Tokyo
Total floor area: 1,886.34 m2

Location: Kawasaki City, Kanagawa
Total floor area: 4,233.62 m2

Nomura Real Estate Master Fund, Inc.

NEW

Location: Osaka City, Osaka
Total floor area: 7,794.23 m2

Nomura Real Estate Master Fund, Inc.

26

Message from the Management

Management Strategy

ESG Measures

Distribution Policy

Financing Status

Portfolio

Investor Information

Financial Section

Structure and Organization

Basic Distribution Policy

Distribution Policy for Periods with Gain on Sales

Distribute net earnings + amortization of goodwill

Distributions in excess of earnings may be adjusted to retain cash of anamount equivalent to gain on sale of real estate to promote stablemedium- to long-term management.
売却益

10

Gain onsales

売却益相当額の留保Internal reserves
equivalent to gainon sale10

Structure of NMF

10Specified Related Party

Investment Corporation

Custodian

Parent Company of the Asset Management Company

Sumitomo Mitsui Trust Bank, Ltd.

Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Holdings, Inc.

Asset Custody Agreement

10

留保

Reserve
のれん
償却費
Amortizationof goodwill

当期
利益
Net
income

当期利益（損益計算書）Distributions inexcess of earnings

10

売却益

利益分配

Net income

売却益を
除く

Net
当income期
excl.
利益
gain on
sales

80

当期利益
（損益計算書）

80

80

売却益を
除く

Net
当
期
incomeexcl.
利益gain on
sales

10

10

売却益は分配し、
利益超過分配にて調整

10 Gain on sales is distributed,
and a corresponding
amount is deducted from
distributions in excess ofearnings

Asset Management Company
Nomura Real Estate
Asset Management Co., Ltd.

Asset
Management
Agreement

Information Provision
Agreement

Information Provider
Nomura Real Estate Development Co., Ltd.
Basic Agreement with respect toLeasing Value Chain8080

分配金の内訳

Total
distribution

Breakdown ofdistributions

General Administrator(Institutional Administration /Accounting)Transfer Agent andSpecial Account Administrator

Unitholders' Meeting

Mitsubishi UFJ Trust and Banking Corporation

Board of Directors

Transfer Agency Agreement, General Administration Agreement
Agreement on Special Account Management

Executive Director
Shuhei Yoshida
Supervisory Directors
Mineo Uchiyama
Koichi Owada

Leasing Value Chain

Mika Okada

General Administrator (Financial Agent)

Nomura Real Estate
Development Co., Ltd.

Auditor

Sumitomo Mitsui Banking Corporation

Nomura Real Estate Partners Co., Ltd.

Ernst & Young Shin Nihon LLC

GEO AKAMATSU CO., LTD.

分配方針

Net income

Total
distribution

10

売却益
Gain on
sales

80

Net
当
期
incomeexcl.
利益gain onsales

Distribution of
net income

Distribution inexcess of earnings

10

売却益を
除く

分配総額

(Statement of income)

のれん
償却費
20
Amortizationof goodwill
20

利益超過分配Gain on
sales

当期
利益
Net
income

利益超過分配MUFG Bank, Ltd.
Financial
Agent
Agreement

Nomura Securities Co., Ltd.
Mizuho Securities Co., Ltd.

※記載の数値は、イメージを示すために例示したものです。

(Statement of income)* Figures shown above are for illustrative purposes only

Distributions in Excess of Net Earnings in the 8th Fiscal Period
Internal reserves equivalent to gain on sales(¥6 mln) (Note 1)

Reversal of internal reserves

2,622

2,616

2,616

Total distribution¥14,592 million

2,901

Distributions
in excess ofearnings¥2,901 million

11,684

11,684

11,684

International Business Planning
Distributions ofearnings, etc.
(Income tax
withheld)¥13,246 million

Net income Distribution
policy(Statement ofincome)Distribution
policyTotal distribution(incl. distribution in(Internal reserves excess of earnings)
equivalent to gain on sale)

11,691

11,691

Total distribution
Earnings
defined(incl. distribution inexcess ofby the Investment
earnings)
Trusts Act

Risk Management Committee
NPR Valuation Committee

Corporate Planning6

11,684President & CEO

Distributionsof earnings¥11,691 million

11,691

Allowance fortemporarydifference
adjustments

Chief Strategy Officer

1,555

Gain onsales

Netincomeexcl.
gain onsales

Compliance Committee

Project Screening Committee(Note 2)

6

Other
distributions inexcess of earnings(Income tax notwithheld)¥1,346 million

Board of Directors

2,901

1,555

6

Statutory Auditors

288

1,057
Amortizationof goodwill

Investment Committee

Other distributions in excess of earnings

288

6

General Meeting of Shareholders

Distribution of allowance for temporary difference
adjustments

The amount equivalent to impact bytenant replacement at Harumi
Toriton Z and LP Urayasu*Reserved the amount equivalent to amortization of goodwill.

(Millions of yen)

Organization of NREAM

Distributions inexcess of
earnings(breakdown)

Legal & Compliance

Private Fund Management
NMF Investment Management GroupInternal Audit

Fund Management

Finance & Accounting

Asset Management I

Client Relations & Marketing

Asset Management II

Acquisitions

NPR Investment Management

Investment Management Planning(Note 1)	When there is a gain on sales, NMF’s policy is, in principle, to set aside an amount equivalent to the gain that is not more than the amount of amortization of
goodwill as retained earnings within the scope that will not be subject to income tax. For the 8th fiscal period, NMF will retain earnings under the amount of
distributions in excess of net earnings (distribution reducing unitholders’ capital for tax purposes) though the gain on sale from the sale of partial land of
PRIME URBAN Shinjuku Kawadacho has been generated, and therefore it does not expect the internal reserves equivalent to gain on sales to be taxed.
(Note 2)	The amount is obtained by deducting underdepreciation, etc. (provision deduction items) attributable to the difference between depreciation in tax andaccounting treatments from amortization of goodwill, etc. (provision addition items).
27

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

28

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

Investor Information
Composition of Unitholders

WEBSITE

Foreign Corporations

543 1.8%

Financial Institutions(including financial
instrument businesses)

Individuals and Others

Other Domestic
Corporations

Financial Institutions(including financial
instrument businesses)

485 1.6%

219 0.7%

314,888 6.9%

2,578,603 56.7%

Other Domestic
Corporations

326,661 7.2%

Unitholder
composition
Totalother information, including the following.
■ An overview of NMF and its features; information about the Asset Management Company■ A portfolio summary; property overviews (with photos, maps, etc.); occupancy rate data
■ Press releases, disclosure materials, and information on distributions and financial results

Number ofinvestment units
Total

30,713

NMF strives to ensure accurate, timely disclosure through its website. For convenience, the website also offers a variety of

We will continue to enhance the website’s content and use it to provide timely information.

4,547,300

Individuals
and Others

Foreign
Corporations

29,466 95.9%

1,327,148 29.2%

https://www.nre-mf.co.jp/en/

Nomura Master Fund

IR Calendar
Fiscal period

Announcement of financial results

End of February
January

February

Fiscal period

Mid-April
March

April

Announcement of financial results

End of August
May

June

July

AugustMid-October
September

OctoberNovember December

Mid-May

Mid-November

Commencement of payment of distributions
Release of Asset Management Report

Commencement of payment of distributions
Release of Asset Management Report

Unitholder Information
The process for changing your address and other information
To change your address, name, seal, or other information, please contact the securities firm where your account wasestablished.
Distributions
Stockholders can collect distributions at a Japan Post Bank or post office. If the receipt date has passed, please refer to instructions on the back of the distribution receipt and either send it to the Corporate Agency Division of Mitsubishi UFJ Trust and

The latest news is aggregated on the home page.
(An RSS feed is available.)

Excel files with detailed data are available for download.

Banking Corporation or present it at the counter of one of the bank’s branches. In addition, regarding distributions going forward, if you wish distributions to be paid in the form of bank deposits or other, please contact your securities firm.
Important Reminders for Unitholders
Closing dates

The last days of February and August of every year

General meeting of unitholders

At least once every two years in principle

Unitholder record date for voting
eligibility

A date announced in advanceDistribution payment record dates

The last days of February and August of every year

Stock exchange listings

Tokyo Securities Exchange (securities code: 3462)

Newspaper for announcements

Nihon Keizai Shimbun

Share transfer agent

Mitsubishi UFJ Trust and Banking Corporation

Contact information
for the share transfer agent

Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corporation
1-1, Nikko-cho, Fuchu, Tokyo, Japan
TEL. 0120-232-711 (toll free) in Japan only

Posted ESG Annual Report
Our first sustainability report covering our ESG related activities was issued in June 2019.

Mailing address: P.O. Box #29 Shin-Tokyo Post Office, Tokyo, Japan 137-8081
Corporate Agency Division, Mitsubishi UFJ Trust and Banking Corporation

29

Nomura Real Estate Master Fund, Inc.

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30

Message from the Management

Management Strategy

ESG Measures

Financing Status

Thousands of YenPortfolio

Investor Information

Financial Section

BALANCE SHEETAs of February 28, 2019

As of August 31, 2019

Thousands of Yen

As of February 28, 2019

As of August 31, 2019ASSETSLIABILITIESCurrent Assets:
Cash and bank deposits
Rental receivables
Consumption taxes receivable
Other current assets
Total current assets

74,212,743
659,719—
1,408,074
76,280,538

73,420,753
695,682
657,804
1,673,760
76,448,000

Property and Equipment:
Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Leased assets
Construction in progress		Subtotal
Less accumulated depreciation
Net property and equipment

658,380,029
316,625,764
1,258,692
971,411
10,1078,186
977,254,192(36,346,296)
940,907,896

696,240,931
332,825,576
1,332,528
1,135,222
14,85912,0501,031,561,168(41,470,695)
990,090,472

Current Liabilities:
Trade accounts payable
Short-term debt
Current portion of investment corporation bonds
Current portion of long-term debt
Lease obligations
Other accounts payable
Accrued expenses
Accrued income taxes
Accrued consumption taxes
Rent received in advance
Unearned revenue
Provision for loss on disaster
Derivatives liabilities
Other current liabilities
Total current liabilities

1,957,136
500,000—
64,685,600
1,591
2,672,988
316,253
870
990,633
5,036,231
187,784
43,48052,90722,71876,468,194

2,820,452
8,000,000
5,000,000
58,385,600
1,082
2,535,771
344,928
1,999—
5,260,541
159,244—
65,574
9,683
82,584,878

Long-term Liabilities:
Investment corporation bonds
Long-term debt
Lease obligations
Long-term advanced received
Security deposits from tenants
Derivatives liabilities
Total long-term liabilities

22,000,000
409,927,200—
261,893
38,401,734
948,957
471,539,785

17,000,000
422,384,400
4,134
187,30240,852,194
843,558
481,271,590

Total Liabilities

548,007,980

563,856,468

182,051,777

214,855,487

394,012,959(8,879,447)(8,678,670)(17,558,118)
376,454,840
12,334,340
388,789,181
570,840,958

394,012,959(10,439,617)(9,301,010)(19,740,627)
374,272,331
12,688,967
386,961,298
601,816,786(997,480)(997,480)(905,812)(905,812)

569,843,478

600,910,974

1,117,851,458

1,164,767,442

Investments and Other Assets:
Goodwill
Leasehold rights
Intangible assets
Long-term prepaid expenses
Long-term deposits
Security deposits
Derivatives assets
Deferred investment corporation bond issuance costs
Total investments and other assets
Total Assets
The accompanying notes to financial statements are an integral part of these statements.

88,209,223
8,959,307
43,192
1,947,644
492,905
946,367
4,384
59,999100,663,023
1,117,851,458

85,586,980
8,958,920
35,5652,131,942
508,948
946,452
3,320
56,83898,228,969
1,164,767,442

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
Surplus		Capital surplus
		 Allowance for temporary difference adjustment
		 Other deductions from capital surplus
		 Total deductions from capital surplus
		 Net capital surplus
		Retained earnings
		Total surplus
Total unitholders’ equity
Valuation and Translation Adjustments:
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total Net Assets
Total Liabilities and Net Assets
The accompanying notes to financial statements are an integral part of these statements.

31

Nomura Real Estate Master Fund, Inc.

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32

Message from the Management

Management Strategy

ESG Measures

STATEMENT OF INCOME AND RETAINED EARNINGS

Portfolio

Investor Information

For the period from September 1, 2018 to February 28, 2019Thousands of Yen

For the period
from March 1, 2019
to August 31, 2019

Unitholders’ Equity

OPERATING REVENUES AND EXPENSES
Operating Revenues:
Real estate rental revenues
Gain on sales of real estate
Operating Expenses:
Real estate rental expenses
Loss on sales of real estate
Asset management fees
Asset custody fees
Administrative service fees
Amortization of goodwill
Other operating expenses
Operating Income

34,742,917
685,596
35,428,514

36,610,991
6,213
36,617,204

14,977,514
23,2193,124,065
57,154
167,475
2,622,242
400,763
21,372,436
14,056,078

15,887,320—
3,224,402
57,119173,069
2,622,242
387,680
22,351,834
14,265,370

NON-OPERATING REVENUES AND EXPENSES
Non-Operating Revenues:
Interest income
Reversal of dividends payable
Interest on refund
Other non-operating revenues
Non-Operating Expenses:
Interest expense
Interest expenses on investment corporation bonds
Amortization of investment corporation bonds issuance costs
Loan arrangement fees
Investment units issuance expenses
Other non-operating expenses

Ordinary Income
Extraordinary Income:Insurance income
Extraordinary Losses:
Loss on disaster		 Income before Income Taxes
Income Taxes:
		Current

378
5,674
1,213
11
7,278

596
4,975
—
107
5,679

1,871,984
183,376
3,160
407,627
75,2875,280
2,546,715

1,907,676
185,270
3,160
421,076
55,843
5,259
2,578,287

11,516,640

11,692,763

Balance as of September 1, 2018
Distributions of retained earnings
Reversal of allowance for temporary difference
adjustments
Distributions in excess of net earnings fromallowance for temporary difference
adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders'equityBalance as of February 28, 2019

SurplusCapital surplus
Deductions from capital surplus
Allowance fortemporary
Other
Total
difference
deductions from deductions fromadjustment
capital surplus capital surplus(7,878,667)(7,060,439)(14,939,107)
—
—
—

Units
4,321,800—

Unitholders’capital181,730,086—

Capitalsurplus394,012,959——

321,691—

321,691(321,691)

—

—

—
—
—

—
—
—

—
—
—

(1,322,470)———(1,296,540)—(1,322,470)(1,296,540)—(1,322,470)(1,296,540)——
4,321,800—
182,051,777—
394,012,959—(8,879,447)—(8,678,670)—(17,558,118)—
376,454,840

Balance as of September 1, 2018
Distributions of retained earnings
Reversal of allowance for temporary difference
adjustments
Distributions in excess of net earnings fromallowance for temporary difference
adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders'equityBalance as of February 28, 201953,29753,297

—
—

8,097
8,097
11,561,841——
11,692,763

2,055
2,055
11,690,708

		 Retained earnings brought forward

773,423

998,259		 Retained Earnings at End of Period

12,334,340

12,688,967

Net capitalsurplus379,073,851—

Thousands of Yen

Unitholders’ Equity
Surplus

Valuation and Translation Adjustments
Total valuation andDeferred gains ortranslation
losses on hedges
adjustments(771,769)(771,769)——

Retained earnings
11,804,535(10,709,420)

Total surplus
390,878,386(10,709,420)

Total
unitholders’equity572,608,472(10,709,420)(321,691)(321,691)

—

—

—

—

—
—
11,560,917(1,322,470)(1,296,540)
11,560,917(1,322,470)(1,296,540)
11,560,917

—
—
—

—
—
—

(1,322,470)(1,296,540)
11,560,917—
12,334,340—
388,789,181—
570,840,958(225,710)(997,480)(225,710)(997,480)(225,710)
569,843,478

Total net assets
571,836,702(10,709,420)

The accompanying notes to financial statements are an integral part of these statements.

For the period from March 1, 2019 to August 31, 2019

923
923
11,560,917

		Net Income

Financial Section

STATEMENT OF CHANGES IN NET ASSETS
Thousands of Yen

For the period
from September 1, 2018
to February 28, 2019

Financing Status

Thousands of Yen

Unitholders’ Equity

Balance as of March 1, 2019
Issuance of new investment units
Distributions of retained earnings
Distributions in excess of net earnings fromallowance for temporary difference
adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders’equityBalance as of August 31, 2019

SurplusCapital surplus
Deductions from capital surplus
Allowance fortemporary
Other
Total
difference
deductions from deductions fromadjustment
capital surplus capital surplus(8,879,447)(8,678,670)(17,558,118)
—
—
—
—
—
—

Units
4,321,800
225,500—

Unitholders’capital
182,051,777
32,803,710—

Capitalsurplus394,012,959
—
—

—
—
—

—
—
—

—
—
—

(1,560,169)———(622,339)—(1,560,169)(622,339)—(1,560,169)(622,339)——
4, 547,300—
214,855,487—
394,012,959—(10,439,617)—(9,301,010)—(19,740,627)—
374,272,331

Thousands of Yen

Unitholders’ Equity
Surplus
Balance as of March 1, 2019
Issuance of new investment units
Distributions of retained earnings
Distributions in excess of net earnings fromallowance for temporary difference
adjustments
Other distributions in excess of net earnings
Net income
Net changes of items other than unitholders'equityBalance as of August 31, 2019

Net capitalsurplus376,454,840——

Valuation and Translation Adjustments
Total valuation andDeferred gains ortranslation
losses on hedges
adjustments(997,480)(997,480)————

Retained earnings
12,334,340—(11,336,081)

Total surplus
388,789,181—(11,336,081)

Total
unitholders’equity570,840,958
32,803,710(11,336,081)——
11,690,708(1,560,169)(622,339)
11,690,708(1,560,169)(622,339)
11,690,708

—
—
—

—
—
—

(1,560,169)(622,339)
11,690,708—
12,688,967—
386,961,298—
601,816,786

91,667(905,812)

91,667(905,812)

91,667600,910,974

Total net assets
569,843,478
32,803,710(11,336,081)

The accompanying notes to financial statements are an integral part of these statements.

The accompanying notes to financial statements are an integral part of these statements.

33

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

34

Message from the Management

Management Strategy

ESG Measures

STATEMENT OF CASH FLOWS
Thousands of Yen

For the period
from September 1, 2018
to February 28, 2019

For the period
from March 1, 2019
to August 31, 2019

CASH FLOWSCash Flows from Operating Activities
Income before income taxes
Depreciation
Amortization of goodwill
Investment units issuance expenses
Amortization of investment corporation bonds issuance costs
Increase (Decrease) in provision for loss on disaster
Interest income
Interest expense
Loss on disposal of property and equipment
Decrease (Increase) in rental receivables
Decrease (Increase) in long-term prepaid expenses
Decrease (Increase) in long-term deposits
Increase (Decrease) in trade accounts payable
Increase (Decrease) in other accounts payable
Decrease (Increase) in consumption taxes receivables
Increase (Decrease) in accrued consumption taxes
Increase (Decrease) in accrued expenses
Increase (Decrease) in rent received in advance
Decrease in property and equipment due to sales
Other		Subtotal
Interest received
Interest paid
Income taxes paid
		Net cash provided by (used in) operating activities

11,561,841
4,913,913
2,622,242
75,287
3,160
25,557(378)
2,055,360
2,352
59,436(39,163)
34,880(601,578)
52,250206,657
990,633
55,198(33,203)4,574,369(114,659)
26,444,158
378(2,186,260)(2,174)24,256,101

11,692,763
5,137,887
2,622,242
55,843
3,160(43,480)(596)
2,092,946
5,302(37,771)(184,298)(16,043)
863,316(21,753)(657,804)(990,633)
8,739
224,309
14,403(280,470)
20,488,065
596(2,166,900)(925)
18,320,837

Cash Flows from Investing Activities
Payments for purchases of property and equipment
Payments for purchases of leasehold rights and intangible assets
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Proceeds from security deposits
		Net cash provided by (used in) investing activities(11,768,260)(5,698)(1,133,099)
1,690,034—(11,217,024)(54,380,717)(551)(1,016,699)
3,468,968
35(51,928,965)

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period
The accompanying notes to financial statements are an integral part of these statements.

35

Nomura Real Estate Master Fund, Inc.

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTSCash Flows from Financing Activities
Proceeds from short-term debt
Repayments of short-term debt
Proceeds from long-term debt
Repayments of long-term debt
Proceeds from issuance of investment corporation bonds
Payments of investment units issuance expenses
Distributions to unitholders
Distributions in excess of net earnings from allowance fortemporary difference adjustments
Other distributions in excess of net earnings
		Net cash provided by (used in) financing activities

Financing Status——
28,375,000(28,417,800)—(7,400)(10,715,350)

13,600,000(6,100,000)
40,900,000(34,742,800)
32,803,710(123,730)(11,334,400)(1,322,360)(1,295,252)(13,383,164)(1,563,076)(623,564)
32,816,137(344,086)
74,556,830
74,212,743(791,990)
74,212,743
73,420,753

1. ORGANIZATION
Nomura Real Estate Master Fund, Inc. (NMF) is a real estate investment corporation formed to own and invest primarily in
office buildings, retail facilities, logistics and residential facilities. NMF is externally managed by a licensed asset managementcompany, Nomura Real Estate Asset Management Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real
Estate Holdings, Inc. NMF was established on October 1, 2015 through the consolidation type merger involving the former
Nomura Real Estate Master Fund, Inc. (hereinafter the “former NMF”), Nomura Real Estate Office Fund, Inc. (hereinafter“NOF”) and Nomura Real Estate Residential Fund, Inc. (hereinafter “NRF”), and listed its investment securities (TSE code:3462) on the Real Estate Investment Trust Section of the Tokyo Stock Exchange on October 2 of the same year.
NMF adopts the basic policy of investing primarily in real estate and other assets to secure stable income and steady growth ofassets under management over the medium to long term. In order to realize this basic policy, NMF adopts an investment
strategy that centers on the Greater Tokyo area (Tokyo, Kanagawa, Chiba and Saitama prefectures), which has strong tenant
demand, while also considering regional diversification through the three major metropolitan areas and cabinet-order designated cities, etc. By combining the “diversified type strategy” in which investments are made in facilities of a variety of sectors
such as office buildings, retail facilities, logistics and residential facilities with the “large-scale REIT strategy,” which pursues theeffects of diversifying properties and tenants, to make the portfolio more stable as well as with the utilization of the “leasing
value chain” with the Nomura Real Estate Group, the sponsor, NMF will aim to increase unitholder value by securing stable
income and steady growth of assets under management over the medium to long term.

2. BASIS OF PRESENTATION
NMF maintains its accounting records and prepares its financial statements in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Act of Japan, the Companies Act ofJapan, the Financial Instruments and Exchange Act of Japan and related regulations, which are different in certain respects as tothe application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of NMF, which were prepared inaccordance with Japanese GAAP and were presented in NMF’s Securities Report filed with the Kanto Local Finance Bureau. In
preparing the accompanying financial statements, certain reclassifications and modifications have been made to the financial
statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In addition,
the notes to financial statements include certain information that might not be required under Japanese GAAP but is presented
herein as additional information. Amounts have been rounded to the nearest thousand yen in the accompanying financial statements and the notes thereto, whereas amounts were truncated in the Japanese financial statements prepared in accordancewith Japanese GAAP.
NMF’s fiscal period is a six-month period which ends at the end of February or August. NMF does not prepare consolidated
financial statements because it has no subsidiaries.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that are highly
liquid, readily convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of three months orless when purchased.
Property and equipment
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, less accumulated depreciation.
Depreciation is calculated by the straight-line method over the estimated useful lives of the fixed assets outlined below:
Buildings 		
Structures		
Machinery and equipment
Tools, furniture and fixtures

3 - 70 years
2 - 45 years
4 - 15 years
3 - 20 years

Intangible assets
Intangible assets are amortized by the straight-line method.
Goodwill is amortized using the straight-line method over 20 years.

Nomura Real Estate Master Fund, Inc.

36

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
Long-term prepaid expenses
Long-term prepaid expenses are amortized by the straight-line method.

4. CASH AND CASH EQUIVALENTS

Impairment of fixed assets
NMF reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying value of its
fixed assets may not be recoverable. An impairment loss is recognized if the carrying value of an asset exceeds the aggregate
estimated future cash flows. If a fixed asset is determined to be impaired, it is written down to its recoverable amount and thewrite-down is recorded as an impairment loss during the period in which it occurs.

Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized by the straight-line method over the respective terms of
the bonds.
Investment units issuance expenses
The entire amount is expensed as incurred.
Allowances and provisions(1) Allowance for doubtful accounts
For allowance for doubtful accounts against possible losses arising from default on receivables, the uncollectable amount isestimated and recorded by investigating collectability based on historical loan loss ratios for general receivables and on a caseby-case examination for doubtful and other specific receivables.
(2) Provision for loss on disaster
The amount that is reasonably estimated at the end of the fiscal period under review is recorded to cover expenditures forrestoration etc. following Typhoon Trami in 2018.
Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of NMF was entrusted, and all related earnings andexpenses incurred are reflected in the accompanying balance sheet and statement of income and retained earnings,
respectively.
Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues
including utility charge reimbursements, parking space rental revenues and other income. Rental revenues are generally recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and theiramounts are reasonably estimated.
Property related taxes
Property in Japan is subject to property taxes, urban planning taxes and depreciable property taxes on a calendar year basis. The
taxes related to property are generally imposed based on the value of the relevant property and incurred for the fiscal period.
The seller of a property is liable for property related taxes for the period from the purchase date through the end of that calendar year because taxes are imposed on the owner registered in the record as of January 1 for the entire year based on theassessment made by the local government. The amount applicable to the buyer of a property is usually settled between eachparty and capitalized as part of the acquisition cost of the property. The capitalized property related taxes amounted to ¥2,052
thousand for the fiscal period ended February 28, 2019, and ¥182,534 thousand for the fiscal period ended August 31, 2019.
Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax
bases of assets and liabilities using the applicable statutory tax rates.
Consumption taxes
Consumption taxes received and paid are not included in the accompanying statement of income and retained earnings.
Derivative financial instruments
NMF utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its exposure tochanges in interest rates. NMF defers recognition of gains or losses resulting from changes in the fair value of interest rate
swap contracts which meet the criteria for deferral hedge accounting.
Although deferral hedge accounting is generally applied, NMF applies the special treatment to those interest-rate swap contracts that meet the criteria for such special treatment. Under the special treatment, interest-rate swaps are not remeasured atfair value; instead, the net amount paid or received under the interest rate swap contract is recognized and included in interest
expense or income.

37

Nomura Real Estate Master Fund, Inc.

Cash and cash equivalents as of February 28, 2019 and August 31, 2019 consist of the following:Thousands of Yen

As of February 28, 2019

As of August 31, 201974,212,743
74,212,743

73,420,753
73,420,753

Cash and bank deposits
Cash and cash equivalents
Important contents of the non-cash transactions:Not applicable.

5. ASSETS PLEDGED AS COLLATERAL AND SECURED LIABILITIESThe assets pledged as collateral are as follows:

Thousands of Yen

As of February 28, 2019

As of August 31, 2019

3,324,031
6,096,368
2,634
164
9,423,198

3,349,815
6,096,368
2,581
143
9,448,908

Buildings in trust
Land in trust
Structures in trust
Tools, furniture and fixtures in trust
Total
The secured liabilities are as follows:

Thousands of Yen

As of February 28, 2019

As of August 31, 2019

726,648
726,648

726,648
726,648

Tenant leasehold and security deposits in trust
Total

6. SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of February 28, 2019 and August 31, 2019 consist of the following:

Thousands of Yen

As of February 28, 2019Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Lease assets in trust
Accumulated depreciation
Construction in progress
Total

Acquisition costs
248,639,023
132,378,523(12,165,774)
699,374(405,602)
275,363(77,742)409,741,005
184,247,241(23,416,164)
559,318(77,583)
696,047(194,795)
10,107(8,633)8,186
940,907,896

Book value
248,639,023
120,212,749
293,771
197,620
409,741,005
160,831,076
481,735
501,2521,473
8,186
940,907,896

As of August 31, 2019
Acquisition costs
282,632,048
145,727,184(14,332,350)
729,577(465,179)
333,772(103,877)
413,608,883
187,098,392(26,202,758)
602,951(106,849)
801,449(249,652)
14,859(10,028)
12,050990,090,472

Book value
282,632,048
131,394,833
264,397229,895
413,608,883
160,895,634
496,102551,797
4,830
12,050990,090,472

Nomura Real Estate Master Fund, Inc.

38

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
7. SHORT-TERM DEBT AND CURRENT PORTION OF LONG-TERM DEBT

8. LONG-TERM DEBT

Short-term debt and current portion of long-term debt as of February 28, 2019 and August 31, 2019 consist of the following:

Long-term debts as of February 28, 2019 and August 31, 2019 consist of the following:

As of February 28, 2019
Amount(Thousands of Yen)

Unsecured loans from banks due on April 2, 2019
Unsecured loans from banks due on February 26, 2020
Unsecured loans from banks due on March 29, 2019
Unsecured loans from banks due on March 29, 2019
Unsecured loans from banks due on May 27, 2019
Unsecured loans from a bank due on May 27, 2019
Unsecured loans from a bank due on May 27, 2019
Unsecured loans from banks due on August 26, 2019
Unsecured loans from a bank due on August 26, 2019
Unsecured loans from banks due on August 26, 2019
Unsecured loans from banks due on August 26, 2019
Unsecured loans from banks due on October 28,2019Unsecured loans from banks due on October 28,2019Unsecured loans from banks due on November 26,2019Unsecured loans from banks due on November 26,2019Unsecured loans from banks due on November 26,2019Unsecured loans from banks due on November 26,2019Unsecured loans from banks due on February 26,2020Unsecured loans from banks due on February 26,2020Unsecured loans from banks due on May 26,2020Unsecured loans from a bank due on May 26,2020Unsecured loans from a bank due on May 27,2020Unsecured loans from banks due on May 29,2020Unsecured loans from a bank due on August 26,2020Unsecured loans from a bank due on August 26,2020Unsecured loans from banks due on August 26,2020Unsecured loans from a bank due on August 26,2020Unsecured loans from banks due on August 26,2020Unsecured loans from a bank due on August 26,2020Unsecured loans from a bank due on May 26, 2025 (Note 2)
Unsecured loans from a bank due on May 26, 2025 (Note 2)
Total

500,000—
4,500,000
4,000,000
9,000,000
1,000,000
1,100,000
5,700,000
2,200,000
2,500,000
4,700,000
3,000,000
4,000,000
1,600,000
4,000,000
5,600,000
3,450,000
5,750,000
2,500,000
—
—
—
—
—
—
—
—
—
—
42,80042,80065,185,600

Weightedaverage interest
rate (Note 1)
0.46091%—
0.81625%
0.89635%
1.11750%
1.04875%
0.69894%
1.25200%
1.22000%
1.27625%0.81080%0.23091%
0.20091%
1.16500%
0.72650%0.54065%0.37420%
1.01150%
0.64685%
—
—
—
—
—
—
—
—
—
—
2.17000%
2.21812%

As of August 31, 2019
Amount(Thousands of Yen)—
8,000,000
—
—
—
—
—
—
—
—
—
3,000,000
4,000,000
1,600,000
4,000,000
5,600,000
3,450,000
5,750,000
2,500,000
10,000,000
800,000
1,000,000
4,000,000
1,100,000
800,000
4,700,000
500,000
4,500,000
1,000,000
42,80042,80066,385,600

Weightedaverage interest
rate (Note 1)—
0.46545%
—
—
—
—
—
—
—
—
—
0.24545%0.21545%
1.16500%
0.72650%0.54065%0.37420%
1.01150%
0.64685%
1.33750%
1.25875%
1.48625%0.43000%
1.53674%
1.28277%
1.18000%
1.15566%
1.08100%
0.72000%
2.17000%
2.21812%Note 1: The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal place. As forthe borrowings, which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to
calculate the weighted average of interest.
Note 2: Installments of ¥10.7 million will be made on the 26th day of every third month starting on August 26, 2013, with the remaining payment of ¥497.1 million to be
repaid on May 26, 2025.

(1) The Company entered into ¥10,000 million credit facilities in the form of commitment lines with two financial institutions forthe fiscal period ended February 28, 2019. The total unused amounts of such credit facilities were ¥10,000 million as ofFebruary 28, 2019.
(2) The Company entered into ¥40,000 million credit facilities in the form of commitment lines with four financial institutions forthe fiscal period ended February 28, 2019. The total unused amounts of such credit facilities were ¥39,500 million as ofFebruary 28, 2019.
(3) The Company entered into ¥10,000 million credit facilities in the form of commitment lines with two financial institutions for the
fiscal period ended August 31, 2019. The total unused amounts of such credit facilities were ¥10,000 million as of August 31, 2019.
(4) The Company entered into ¥40,000 million credit facilities in the form of commitment lines with four financial institutions for the
fiscal period ended August 31, 2019. The total unused amounts of such credit facilities were ¥32,000 million as of August 31, 2019.

39

Nomura Real Estate Master Fund, Inc.

As of February 28, 2019
Amount(Thousands of Yen)

Unsecured loans from banks due on May 26, 2020
Unsecured loans from a bank due on May 26, 2020
Unsecured loans from a bank due on May 27, 2020
Unsecured loans from banks due on May 29, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from banks due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from banks due on August 26, 2020
Unsecured loans from a bank due on August 26, 2020
Unsecured loans from banks due on September 28, 2020
Unsecured loans from banks due on November 26, 2020
Unsecured loans from banks due on November 26, 2020
Unsecured loans from a bank due on November 26, 2020
Unsecured loans from banks due on November 26, 2020
Unsecured loans from banks due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from banks due on February 26, 2021
Unsecured loans from banks due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from banks due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from banks due on February 26, 2021
Unsecured loans from a bank due on February 26, 2021
Unsecured loans from banks due on March 26, 2021
Unsecured loans from banks due on May 26, 2021
Unsecured loans from a bank due on May 26, 2021
Unsecured loans from a bank due on May 27, 2021
Unsecured loans from a bank due on May 27, 2021
Unsecured loans from banks due on July 26, 2021
Unsecured loans from a bank due on August 26, 2021
Unsecured loans from banks due on August 26, 2021
Unsecured loans from a bank due on November 26, 2021
Unsecured loans from banks due on November 26, 2021
Unsecured loans from banks due on November 26, 2021
Unsecured loans from banks due on December 27, 2021
Unsecured loans from a bank due on January 26, 2022
Unsecured loans from banks due on February 28, 2022
Unsecured loans from a bank due on February 28, 2022
Unsecured loans from banks due on February 28, 2022
Unsecured loans from banks due on May 26, 2022
Unsecured loans from banks due on May 31, 2022
Unsecured loans from banks due on August 26, 2022
Unsecured loans from a bank due on August 26, 2022
Unsecured loans from banks due on August 26, 2022
Unsecured loans from a bank due on August 26, 2022

10,000,000
800,000
1,000,000
4,000,000
1,100,000
800,000
4,700,000
500,000
4,500,000
1,000,000
3,000,000
3,500,000
2,350,000
500,000
1,230,000
5,000,000
2,000,000
2,000,000
2,000,000
3,000,000
2,120,000
500,000
2,000,000
2,800,000
400,000
4,670,000
8,000,000
1,000,000
1,000,000
3,500,000
4,180,000
2,700,000
3,600,000
2,000,000
2,000,000
4,900,000
6,375,000
3,500,000
4,500,000
2,750,000
4,000,000
5,500,000
4,500,000
2,980,000
3,000,000
4,000,000
1,000,000

Weightedaverage interest
rate (Note 1)
1.33750%
1.25875%
1.48625%0.43000%
1.53674%
1.28277%
1.18000%
1.15566%
1.08100%
0.72000%
0.23091%0.46075%
0.46190%0.47375%0.20091%
1.35250%
1.17750%
1.19211%0.80832%
0.86350%0.85050%0.46725%0.22560%
0.14700%
0.21810%0.23091%
1.56250%
1.46375%
1.68200%
1.62500%
1.23920%
1.24100%
0.81585%
1.30289%
1.11662%0.97410%0.23091%
1.48300%
1.31850%
1.29600%
1.16000%
1.25900%
0.82500%
1.19700%
1.09133%
1.08034%
0.32886%

As of August 31, 2019
Amount(Thousands of Yen)

—
—
—
—
—
—
—
—
—
—
3,000,000
3,500,000
2,350,000
500,000
1,230,000
5,000,000
2,000,000
2,000,000
2,000,000
3,000,000
2,120,000
500,000
2,000,000
2,800,000
400,000
4,670,000
8,000,000
1,000,000
1,000,000
3,500,000
4,180,000
2,700,000
3,600,000
2,000,000
2,000,000
4,900,000
6,375,000
3,500,000
4,500,000
2,750,000
4,000,000
5,500,000
4,500,000
2,980,000
3,000,000
4,000,000
1,000,000

Weightedaverage interest
rate (Note 1)
—
—
—
—
—
—
—
—
—
—
0.24545%0.46075%
0.46190%0.47375%0.21545%
1.35250%
1.17750%
1.19211%0.80832%
0.86350%0.85050%0.46725%0.22560%
0.14700%
0.21810%0.24545%
1.56250%
1.46375%
1.68200%
1.62500%
1.23920%
1.24100%
0.81585%
1.30289%
1.11662%0.97410%0.24545%
1.48300%
1.31850%
1.29600%
1.16000%
1.25900%
0.82500%
1.19700%
1.09133%
1.08034%
0.32886%

Nomura Real Estate Master Fund, Inc.

40

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
As of February 28, 2019
Amount(Thousands of Yen)

Unsecured loans from banks due on September 30, 2022
Unsecured loans from banks due on November 28, 2022
Unsecured loans from banks due on November 28, 2022
Unsecured loans from a bank due on November 28, 2022
Unsecured loans from banks due on November 28, 2022
Unsecured loans from a bank due on November 28, 2022
Unsecured loans from banks due on November 28, 2022
Unsecured loans from a bank due on February 27, 2023
Unsecured loans from banks due on February 27, 2023
Unsecured loans from banks due on February 28, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on May 26, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from banks due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from a bank due on August 28, 2023
Unsecured loans from banks due on August 31, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from banks due on November 27, 2023
Unsecured loans from a bank due on February 26, 2024
Unsecured loans from banks due on February 26, 2024
Unsecured loans from a bank due on February 26, 2024
Unsecured loans from banks due on May 27, 2024
Unsecured loans from a bank due on May 27, 2024
Unsecured loans from a bank due on May 27, 2024
Unsecured loans from a bank due on June 26, 2024
Unsecured loans from a bank due on June 26, 2024
Unsecured loans from a bank due on August 26, 2024
Unsecured loans from a bank due on August 26, 2024
Unsecured loans from banks due on August 26, 2024
Unsecured loans from a bank due on August 26, 2024
Unsecured loans from a bank due on November 26, 2024
Unsecured loans from banks due on November 26, 2024
Unsecured loans from a bank due on November 26, 2024
Unsecured loans from a bank due on November 26, 2024
Unsecured loans from banks due on November 26, 2024
Unsecured loans from banks due on February 26, 2025
Unsecured loans from a bank due on February 26, 2025
Unsecured loans from banks due on February 26, 2025
Unsecured loans from banks due on February 26, 2025
Unsecured loans from banks due on February 26, 2025

41

Nomura Real Estate Master Fund, Inc.

4,000,000
2,100,000
4,550,000
1,800,000
1,500,000
1,000,000
1,500,000
1,300,000
2,800,000
10,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,500,000
1,000,000
1,000,000
1,000,000
4,000,000
6,100,000
1,000,000
1,000,000
500,000
6,700,000
2,000,000
2,600,000
4,000,000
1,500,000
2,750,000
1,300,000
500,000
1,100,000
2,700,000
2,000,000
2,700,000
2,700,000
3,000,000
2,430,000
5,670,000—
2,250,000
3,000,000
1,800,000
500,000
2,000,000
4,200,000
1,000,000
3,000,000
1,500,000
1,000,000

Weightedaverage interest
rate (Note 1)
0.76250%
0.92280%
1.11000%
1.05000%
0.98624%0.71221%0.69250%
1.13250%0.40740%0.48700%
1.86500%
1.89500%
1.83875%
0.41250%0.43408%
1.14850%
1.15850%
1.18032%
1.20772%
1.08510%0.43466%
0.41000%
0.41435%
0.55700%
1.75900%
0.82800%
0.49380%0.47483%
1.59400%
0.53630%0.24000%
0.51000%
0.46376%
0.53676%
0.85925%
0.49533%
0.58175%
0.49971%0.49485%—0.50825%0.58000%
0.55979%
0.52384%
0.42630%
0.62675%
0.52140%0.53936%0.53880%
0.50604%

As of August 31, 2019
Amount(Thousands of Yen)

4,000,000
2,100,000
4,550,000
1,800,000
1,500,000
1,000,000
1,500,000
1,300,000
2,800,000
10,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,500,000
1,000,000
1,000,000
1,000,000
4,000,000
6,100,000
1,000,000
1,000,000
500,000
6,700,000
2,000,000
2,600,000
4,000,000
1,500,000
2,750,000
1,300,000
500,000
1,100,000
2,700,000
2,000,000
2,700,000
2,700,000
3,000,000
2,430,000
5,670,000
1,000,000
2,250,000
3,000,000
1,800,000
500,000
2,000,000
4,200,000
1,000,000
3,000,000
1,500,000
1,000,000

Weightedaverage interest
rate (Note 1)
0.76250%
0.92280%
1.11000%
1.05000%
0.98624%0.71221%0.69250%
1.13250%0.40740%0.48700%
1.86500%
1.89500%
1.83875%
0.41250%0.43408%
1.14850%
1.15850%
1.18032%
1.20772%
1.08510%0.43466%
0.41000%
0.41435%
0.55700%
1.75900%
0.82800%
0.49380%0.47483%
1.59400%
0.53630%0.24000%
0.51000%
0.46376%
0.53676%
0.85925%
0.49533%
0.58175%
0.49971%0.49485%0.28624%
0.50825%0.58000%
0.55979%
0.52384%
0.42630%
0.62675%
0.52140%0.53936%0.53880%
0.50604%

As of February 28, 2019
Amount(Thousands of Yen)

Unsecured loans from a bank due on May 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from banks due on May 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from a bank due on May 26, 2025
Unsecured loans from banks due on May 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from banks due on August 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from banks due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from a bank due on November 26, 2025
Unsecured loans from banks due on February 26, 2026
Unsecured loans from banks due on February 26, 2026
Unsecured loans from banks due on February 26, 2026
Unsecured loans from a bank due on February 26, 2026
Unsecured loans from banks due on February 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from banks due on May 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from a bank due on May 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from banks due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from banks due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from a bank due on August 26, 2026
Unsecured loans from banks due on August 26, 2026
Unsecured loans from a bank due on November 26, 2026
Unsecured loans from a bank due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on November 26, 2026
Unsecured loans from banks due on February 26, 2027
Unsecured loans from banks due on February 26, 2027
Unsecured loans from a bank due on February 26, 2027
Unsecured loans from banks due on February 26, 2027

2,000,000
2,000,000
2,800,000
1,000,000
1,000,000
2,000,000
3,000,000
4,050,000
1,850,000
2,600,000
3,000,000
1,100,000
1,100,000
2,000,000
2,000,000
2,000,000
4,200,000
900,000
1,300,000
1,000,000
500,000
4,000,000
2,500,000
800,000——
2,500,000
1,100,000
3,600,000
1,000,000—
2,700,000
2,700,000
3,000,000
1,000,000
3,000,000
1,000,000
1,000,000——
2,000,000
2,000,000
4,165,000
4,000,000
1,500,000
2,000,000
2,320,000
1,500,000——

Weightedaverage interest
rate (Note 1)
0.60286%
0.60286%
0.60286%
0.61434%
0.50506%
0.46301%
0.56380%0.58727%
0.67915%0.60489%
0.58380%
1.09830%
1.06250%
1.03955%
0.59639%0.60448%0.64616%0.65123%
0.64278%0.59499%
0.56311%0.74080%0.59592%
0.37630%——
0.63995%
0.65267%
0.60880%0.59614%—0.67591%
0.67591%
0.77669%
0.70414%0.67483%0.64500%
0.42118%——0.76000%
0.74229%0.73506%
0.69956%
0.64999%0.60750%
0.71500%
0.46630%——

As of August 31, 2019
Amount(Thousands of Yen)

2,000,000
2,000,000
2,800,000
1,000,000
1,000,000
2,000,000
3,000,000
4,050,000
1,850,000
2,600,000
3,000,000
1,100,000
1,100,000
2,000,000
2,000,000
2,000,000
4,200,000
900,000
1,300,000
1,000,000
500,000
4,000,000
2,500,000
800,000
500,000
1,500,000
2,500,000
1,100,000
3,600,000
1,000,000
1,100,000
2,700,000
2,700,000
3,000,000
1,000,000
3,000,000
1,000,000
1,000,000
500,000
1,500,000
2,000,000
2,000,000
4,165,000
4,000,000
1,500,000
2,000,000
2,320,000
1,500,000
500,000
1,000,000

Weightedaverage interest
rate (Note 1)
0.60286%
0.60286%
0.60286%
0.61434%
0.50506%
0.46301%
0.56380%0.58727%
0.67915%0.60489%
0.58380%
1.09830%
1.06250%
1.03955%
0.59639%0.60448%0.64616%0.65123%
0.64278%0.59499%
0.56311%0.74080%0.59592%
0.37630%
0.39196%0.17136%0.63995%
0.65267%
0.60880%0.59614%0.37000%
0.67591%
0.67591%
0.77669%
0.70414%0.67483%0.64500%
0.42118%
0.43627%
0.20880%0.76000%
0.74229%0.73506%
0.69956%
0.64999%0.60750%
0.71500%
0.46630%
0.44859%
0.48144%

Nomura Real Estate Master Fund, Inc.

42

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
As of February 28, 2019
Amount(Thousands of Yen)

Unsecured loans from banks due on March 26, 2027
Unsecured loans from banks due on May 26, 2027
Unsecured loans from banks due on May 26, 2027
Unsecured loans from a bank due on May 26, 2027
Unsecured loans from banks due on August 26, 2027
Unsecured loans from banks due on August 26, 2027
Unsecured loans from a bank due on August 26, 2027
Unsecured loans from a bank due on August 26, 2027
Unsecured loans from banks due on August 26, 2027
Unsecured loans from a bank due on November 26, 2027
Unsecured loans from banks due on November 26, 2027
Unsecured loans from a bank due on November 26, 2027
Unsecured loans from banks due on November 26, 2027
Unsecured loans from banks due on November 26, 2027
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from banks due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from a bank due on February 28, 2028
Unsecured loans from banks due on February 28, 2028
Unsecured loans from banks due on May 26, 2028
Unsecured loans from a bank due on May 26, 2028
Unsecured loans from a bank due on May 26, 2028
Unsecured loans from a bank due on May 26, 2028
Unsecured loans from banks due on May 26, 2028
Unsecured loans from banks due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from banks due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from a bank due on August 28, 2028
Unsecured loans from banks due on November 27, 2028
Unsecured loans from banks due on November 27, 2028
Unsecured loans from banks due on February 26, 2029
Unsecured loans from banks due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029
Unsecured loans from a bank due on February 26, 2029
Unsecured loans from banks due on May 28, 2029
Unsecured loans from banks due on August 27, 2029
Unsecured loans from banks due on August 27, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on November 26, 2029
Unsecured loans from a bank due on October 28, 2030
Unsecured loans from a bank due on October 28, 2030
Unsecured loans from a bank due on May 26, 2025 (Note 2)
Unsecured loans from a bank due on May 26, 2025 (Note 2)
Total

1,500,000
3,060,000
2,300,000
1,800,000
4,000,000
2,600,000
1,000,000
1,000,000—
2,000,000
5,000,000
1,800,000
1,700,000
2,500,000
1,000,000
2,355,000
1,500,000
1,800,000——
5,000,000
2,000,000———
3,600,000
500,000———
2,000,000—
2,500,000
—
—
—
—
—
—
—
2,000,000
2,000,000
1,100,000
1,100,000
711,100
711,100
409,927,200

Weightedaverage interest
rate (Note 1)
0.69068%
0.78177%
0.74736%0.70250%
0.76843%0.76290%0.74500%
0.51356%—
0.89209%
0.79571%0.75050%0.70750%
0.52234%
0.82130%
0.76241%0.78296%
0.79642%——0.79880%0.75922%———0.84750%0.61005%———
0.81130%—
0.65880%
—
—
—
—
—
—
—
1.12506%
1.12506%
1.92250%
1.91700%
2.17000%
2.21812%

As of August 31, 2019
Amount(Thousands of Yen)

1,500,000
3,060,000
2,300,000
1,800,000
4,000,000
2,600,000
1,000,000
1,000,000
1,500,000
2,000,000
5,000,000
1,800,000
1,700,000
2,500,000
1,000,000
2,355,000
1,500,000
1,800,000
2,650,000
1,500,000
5,000,000
2,000,000
1,550,000
500,000
2,000,000
3,600,000
500,000
1,000,000
500,000
500,000
2,000,000
3,000,000
2,500,000
1,400,000
500,000
2,300,000
3,500,000
5,000,000
2,000,000
3,900,000
2,000,000
2,000,000
1,100,000
1,100,000
689,700
689,700
422,384,400

Weightedaverage interest
rate (Note 1)
0.69068%
0.78177%
0.74736%0.70250%
0.76843%0.76290%0.74500%
0.51356%0.29000%
0.89209%
0.79571%0.75050%0.70750%
0.52234%
0.82130%
0.76241%0.78296%
0.79642%0.54205%
0.57365%
0.79880%0.75922%0.55038%0.54010%0.54750%
0.84750%0.61005%
0.62163%
0.62025%
0.37500%
0.81130%
0.59375%
0.65880%0.67098%
0.63692%
0.63692%
0.41815%0.64000%
0.46130%
0.46130%
1.12506%
1.12506%
1.92250%
1.91700%
2.17000%
2.21812%The scheduled repayment amounts of long-term debt for each of the five years after the balance sheet date (excluding thecurrent portion of long-term debt) are as follows.


Thousands of Yen

As of February 28, 2019
As of August 31, 2019

1-2 years
60,885,600
61,135,600

2-3 years
58,760,600
51,090,600

3-4 years
51,615,600
61,435,600

4-5 years
45,535,600
38,035,600

9. INVESTMENT CORPORATION BONDS
Details of investment corporation bonds outstanding are summarized as follows.
As of February 28, 2019
Amount(Thousands of Yen)

NOF’s 2nd series of unsecured investment corporation
bonds due on March 16, 2020
NOF’s 7th series of unsecured investment corporation
bonds due on March 17, 2028
Former NMF’s 1st series of unsecured investment
corporation bonds due on October 30, 2024
NOF’s 10th series of unsecured investment corporation
bonds due on November 25, 2024
NMF’s 2nd series of unsecured investment corporation
bonds due on November 16, 2027
NMF’s 3rd series of unsecured investment corporation
bonds due on May 21, 2038
Total

Interest rate
(Note 1)

As of August 31, 2019
Amount(Thousands of Yen)

Interest rate
(Note 1)5,000,000

2.47%

5,000,000

2.47%

4,500,000

2.90%

4,500,000

2.90%

3,000,000

0.87%

3,000,000

0.87%

6,000,000

1.02%

6,000,000

1.02%

2,000,000

0.59%

2,000,000

0.59%

1,500,000

1.03%

1,500,000

1.03%

22,000,000

22,000,000

Note 1: The interest rate is rounded to the nearest second decimal place.

The scheduled redemption amounts of investment corporation bonds for each of the five years after the balance sheet date areas follows.


Thousands of Yen

As of February 28, 2019
As of August 31, 2019

Within a year—
5,000,000

1-2 years
5,000,000—

2-3 years——

3-4 years——

4-5 years——

10. UNITHOLDERS’ EQUITY
NMF issues only non-par value investment units in accordance with the Investment Trust Act. The entire amount of the issue
price of new units is designated as stated capital. NMF is required to maintain net assets of at least ¥50,000 thousand as set
forth in the Investment Trust Act.

Note 1: The weighted-average interest rate is weighted by the balance of each borrowing at the end of the period and rounded to the nearest fifth decimal place. As forthe borrowings, hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate theweighted-average interest rate.
Note 2: Installments of ¥10.7 million will be made on the 26th day of every third month starting on August 26, 2013, with the remaining payment of ¥497.1 million to be
repaid on May 26, 2025.

43

Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

44

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
11. ALLOWANCE FOR TEMPORARY DIFFERENCE ADJUSTMENTS

2. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.

The movement in the allowance for temporary difference adjustments on the Balance Sheet was as follows:
For the period from September 1, 2018 to February 28, 2019(2) Merger expenses

1. Reason, related assets and amountsThousands of Yen

Related assets, etc.

ReasonAmortization of
goodwill
Land, buildings, etc. Merger expenses
Loss oninterest-rate
Deferred gains or
swaps recognized
losses on hedges
at the end of the
fiscal period
Increase - subtotal
Total

Goodwill

InitialamountBalance atAllowance
the end of
set aside
previous
during period
periodReversalduringperiodBalance atthe end ofcurrent
periodReason forreversal

9,489,126

5,432,649

1,328,225—

6,760,875—

4,029,135

1,352,557(5,754)—

1,346,802—

2,867,594

1,093,460—(321,691)——

7,878,667
7,878,667

1,322,470
1,322,470(321,691)(321,691)

Changes in fair
771,769 value of derivative transactions
8,879,447
8,879,447——

Method of reversal
Upon depreciation and sale, etc., the corresponding amount is scheduled to be reversed.
Upon sale, etc., the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, etc., the corresponding amount is scheduled to be reversed.
Upon sale, etc., the corresponding amount is scheduled to be reversed.

(3) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount is scheduled to bereversed.
For the period from March 1, 2019 to August 31, 2019


ReasonAmortization of
goodwill
Land, buildings, etc. Merger expenses
Loss oninterest-rate
Deferred gains or
swaps recognized
losses on hedges
at the end of the
fiscal period
Increase - subtotal
Total

Goodwill

45

Nomura Real Estate Master Fund, Inc.

(3) Deferred gains or losses on hedges
Based on changes in the fair value of derivatives used as hedging instruments, the corresponding amount is scheduled to bereversed.

12. PER UNIT INFORMATIONThe net asset values per unit and the net income per unit as of February 28, 2019 and August 31, 2019 were as follows:

131,853
2,675

132,146
2,571

Note 1: The net income per unit is calculated by dividing net income by the weighted-average number of units outstanding.
Note 2: The basis for calculating net income per unit is as follows.

For the period
from September 1, 2018
to February 28, 2019
Net income (Thousands of Yen)
Amount not available to ordinary unitholders (Thousands of Yen)
Net income available to ordinary unitholders (Thousands of Yen)
Average number of units during the period (Units)

For the period
from March 1, 2019
to August 31, 201911,560,917—
11,560,917
4,321,800

11,690,708—
11,690,708
4,545,840

13. RELATED PARTY TRANSACTIONS

Balance atAllowance
the end of
set aside
previous
during period
periodThousands of Yen

Parent Company and major corporate unitholders
Not applicable
Subsidiaries and affiliates
Not applicable

ReversalduringperiodBalance atthe end ofcurrent
periodReason forreversal

Fellow subsidiary companies
Not applicable

12,111,369

6,760,875

1,347,369—

8,108,244—

4,029,135

1,346,802(12,910)—

1,333,892—

Directors and major individual unitholders
Not applicable

2,867,594

771,769

225,710—

997,480—

14. INCOME TAXES——For the period
from March 1, 2019
to August 31, 2019

For the periods from September 1, 2018 to February 28, 2019 and from March 1, 2019 to August 31, 2019

1. Reason, related assets and amounts

Related assets, etc.

Upon sale, etc., the corresponding amount is scheduled to be reversed

Net assets per unit
Net income per unit

(2) Merger expenses

Initialamount

Method of reversal
Upon depreciation and sale, etc., the corresponding amount is scheduled to be reversed.
Upon sale, etc., the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, etc., the corresponding amount is scheduled to be reversed.

For the period
from September 1, 2018
to February 28, 2019

2. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.

Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust
Leasehold rights
Leasehold rights in trust

Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust
Leasehold rights
Leasehold rights in trust

8,879,447
8,879,447

1,560,169
1,560,169— 10,439,617— 10,439,617——

The Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately
31.51% for the fiscal period ended August 31, 2019. However, the Company may deduct dividend distributions paid to its
unitholders from its taxable income amounts, provided such distributions meet the requirements under the Act on Special
Measures Concerning Taxation of Japan. Under this act, an investment corporation must meet a number of tax requirements,
including a requirement to distribute in excess of 90% of its distributable income for the fiscal period, in order to deduct such

Nomura Real Estate Master Fund, Inc.

46

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
amounts. If the investment corporation does not satisfy all of the requirements, the entire taxable income of the investment
corporation will be subject to regular corporate income taxes.

reduce the market risk under floating-rate debt by swapping such floating-rate interest payments for fixed-rate interest
payments.

Since the Company distributed in excess of 90% of its distributable income in the form of cash distributions totaling¥14,592,285 thousand for the fiscal period ended August 31, 2019, such distributions were treated as deductible distributions
for purposes of corporate income taxes.

Bank deposits are held as a means of investing surplus funds, and the Company is exposed to the credit risk that financial
institutions may default. However, the effect of such risk is limited by diversifying the financial institutions with which surplus
funds are deposited.

The following summarizes breakdown of deferred tax assets and liabilities:

Thousands of Yen

For the period
from September 1, 2018
to February 28, 2019
Deferred tax asset:
Valuation difference on other assets acquired by merger
Deferred gains or losses on hedges
Unearned revenue
Write-offs for long-term prepaid expenses
Depreciation costs of trust leasehold rights
Non-deductible accrued enterprise tax
		Subtotal		Valuation allowance
		 Total non-current deferred tax assets
Total deferred tax assets
Net deferred tax assets

For the period
from March 1, 2019
to August 31, 201920,840,495
315,141
141,505
15,456
1,221
15
21,313,836(21,313,836)———

20,452,773
284,970
108,620
12,332
1,338
86
20,860,121(20,860,121)———

The following summarizes the significant differences between the statutory tax rate and the effective tax rate.
For the period
from September 1, 2018
to February 28, 2019
Statutory tax rate
Deductible cash distributions
Valuation of allowance
Amortization of goodwill
Other
Effective tax rate

31.51%(35.14%)(3.51%)
7.15%
0.01%
0.01%

For the period
from March 1, 2019
to August 31, 201931.51%(35.69%)(2.87%)
7.07%
0.01%
0.02%

15. FINANCIAL INSTRUMENTS
Overview(1) Policy for Financial Instruments
Upon acquisition of property-related assets, the Company may raise funds through certain financing methods including
borrowings, issuance of investment corporation bonds and issuance of investment units. In financing through interest-bearing debt, to secure stable financing capability and reduce future risks of rising interest rates, the Company’s investment
policy is to secure longer-term, fixed-rate borrowings with well-diversified maturities.
The Company enters into derivative transactions only for the purpose of reducing risk of future interest rate fluctuations anddoes not engage in speculative transactions.
(2) Type and Risk of Financial Instruments and Related Risk Management
Borrowings and investment corporation bonds are primarily used to fund the acquisition of property-related assets as well as
the repayment of debts and redemption of investment corporation bonds. The Company is exposed to liquidity risk of being
unable to meet its obligations on scheduled due dates. The Company controls and limits such risk by diversifying not only thefinancial institutions, but also the type of financing to include the effective use of surplus funds and direct financing from thecapital markets such as issuance of investment units. In addition, the Company is exposed to the market risk arising fromfluctuations in interest rates on its floating-rate debt. However, the effect of such risk on the operation of the Company islimited by maintaining the LTV ratio at low levels and the ratio of long-term fixed-rate debt to total debt at high levels.
Furthermore, the Company may utilize derivative transactions (interest-rate swap transactions) as a hedging instrument to47

Nomura Real Estate Master Fund, Inc.

(3) Supplementary Explanation on Estimated Fair Value of Financial Instruments
The fair value of financial instruments is based on the quoted market price, if applicable. When there is no quoted market
price available, fair value is reasonably estimated. Certain assumptions are used for the estimation of fair value. Accordingly,
the result of such estimation may change if different assumptions are used. Furthermore, the contractual amounts of derivative transactions stated in “22. Derivatives and Hedge Accounting” below do not represent the market risk involved in thesederivative transactions.
Fair Value of Financial Instruments
For the period from September 1, 2018 to February 28, 2019
The following table summarizes the carrying value and the estimated fair values of financial instruments as of February 28, 2019.
Thousands of Yen

Carrying value
74,212,743(500,000)—(64,685,600)(22,000,000)(409,927,200)(1,001,597)(Note 1)(i) Cash and bank deposits(ii) Short-term debt(iii) Current portion of investment corporation bonds(iv) Current portion of long-term debt(v) Investment corporation bonds(vi) Long-term debt(vii)Derivative transactions

Fair value
74,212,743(500,000)—(64,808,960)(23,298,479)(416,632,574)(1,001,597)(Note 1)

Difference———
123,360
1,298,479
6,705,374—

For the period from March 1, 2019 to August 31, 2019
The following table summarizes the carrying value and the estimated fair values of financial instruments as of August 31, 2019.
Thousands of Yen

Carrying value
73,420,753(8,000,000)(5,000,000)(58,385,600)(17,000,000)(422,384,400)(909,813)(Note 1)(i) Cash and bank deposits(ii) Short-term debt(iii) Current portion of investment corporation bonds(iv) Current portion of long-term debt(v) Investment corporation bonds(vi) Long-term debt(vii)Derivative transactions

Fair value
73,420,753(8,000,000)(5,061,335)(58,577,585)(18,376,555)(432,947,922)(909,813)(Note 1)

Difference——
61,335
191,985
1,376,555
10,563,522—

Note 1: The numbers in parenthesis indicate liabilities.
Note 2: Method for determining the fair value of financial instruments and derivative transactions(i) Cash and bank deposits and (ii) Short-term debt
As these items are settled within a short-term period, their fair value is nearly equal to the carrying value. Therefore, for these items, the carrying value isreported as the fair value.
(iii) Current portion of investment corporation bonds and (v) Investment corporation bonds
The fair value of investment corporation bonds issued by the Company is determined based on their market prices.
(iv) Current portion of long-term debt and (vi) Long-term debt
For floating-rate long-term debt, the carrying value is reported as it is considered to be approximately equal to the fair value because such debt reflects themarket interest rates within a short-term period. (However, the fair value of certain floating-rate long-term debt that qualifies for the special treatment ofinterest-rate swaps (see “22. Derivatives and Hedge Accounting”) is determined by discounting the sum of its principal and interest payments net of any
cash flows from the interest-rate swap at a rate reasonably estimated to be applicable to similar fixed-rate debt.) The fair value of fixed-rate long-term debt
is determined by discounting the sum of its principal and interest payments at a rate reasonably estimated to be applicable to similar fixed-rate debt.
(vii) Derivative transactions
See “22. Derivatives and Hedge Accounting.”

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Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Thousands of Yen

17. SEGMENT INFORMATION

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
Note 3: Redemption schedule for cash and bank deposits as of February 28, 2019.



Due within one After one year,
year
within two years
Cash and bank deposits
Total

After two years,
After three years, After four years,
within three
After five years
within four years within five years
years

74,212,743

—

—

—

—

—

74,212,743

—

—

—

—

—

Related Information

Thousands of Yen

After two years,
Due within one After one year,
After three years, After four years,
within three
After five years
year
within two years
within four years within five years
years
Cash and bank deposits
Total73,420,753

—

—

—

—

—

73,420,753

—

—

—

—

—

Segment Information
Since the Company has been engaged in the real estate leasing business as a single segment, segment information has been omitted.

Redemption schedule for cash and bank deposits as of August 31, 2019

For the periods from September 1, 2018 to February 28, 2019 and from March 1, 2019 to August 31, 2019

1. Information about products and services
Since revenues from external customers for products and services within a single segment are more than 90 percent of
total operating revenues, information about products and services has been omitted.
2. Information about geographical areas(1) Revenues
Since more than 90 percent of the total operating revenues were generated from external customers in Japan, a geographical breakdown of revenues has been omitted.

Note 4: Redemption schedule for debt as of February 28, 2019(2) Property and equipment
Since more than 90 percent of the total property and equipment on the balance sheet are located in Japan, a geographicalbreakdown of property and equipment has been omitted.

Thousands of Yen

Due within one After one year,
year
within two years
Short-term debt
Investment corporation bonds
Long-term debt
Total

500,000—

After two years,
After three years, After four years,
within three
After five years
within four years within five years
years
—

—

—

—

—

5,000,000———

17,000,000

64,685,600

60,885,600

58,760,600

51,615,600

45,535,600

193,129,800

65,185,600

65,885,600

58,760,600

51,615,600

45,535,600

210,129,800

3. Information about major clients
For the period from September 1, 2018 to February 28, 2019
Customer name
Nomura Real Estate Partners Co., Ltd.

Redemption schedule for debt as of August 31, 2019Thousands of Yen

Due within one After one year,
year
within two years

After two years,
After three years, After four years,
within three
After five years
within four years within five years
years

Short-term debt

8,000,000

—

—

—

—

—

Investment corporation bonds

5,000,000

—

—

—

—

17,000,000

58,385,600

61,135,600

51,090,600

61,435,600

38,035,600

210,687,000

71,385,600

61,135,600

51,090,600

61,435,600

38,035,600

227,687,000

Long-term debt
Total

Revenues (Thousands of Yen)
5,086,866

Related segment nameRental real estate business

Revenues (Thousands of Yen)
5,169,816

Related segment nameRental real estate business

For the period from March 1, 2019 to August 31, 2019
Customer name
Nomura Real Estate Partners Co., Ltd.

18. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES
Real estate rental revenues and expenses for the fiscal period ended February 28, 2019 and August 31, 2019 consist of the following:

16. INVESTMENT AND RENTAL PROPERTIESThe Company owns leasable office, leasable retail facilities, leasable logistics facilities, leasable residential (including land) inGreater Tokyo area and other areas for the purpose of earning revenue from leasing. The following table summarizes the carrying value and the estimated fair value of these properties.


Thousands of Yen

For the period
from September 1, 2018
to February 28, 2019
Carrying value
Balance at beginning of the period
Amount of increase (decrease) during the period
Balance at end of the period
Fair value at end of the period

947,449,625
2,417,578
949,867,203
1,056,994,000

For the period
from March 1, 2019
to August 31, 2019
949,867,203
49,182,189
999,049,393
1,123,089,000

Note 1: The carrying value represents the acquisition cost less accumulated depreciation.
Note 2: Of the change in investment and rental properties, the increase during the previous period is mainly attributable to the acquisition of NMF Kobe Myodani
Building (¥3,604,747 thousand) and Serenite Shinsaibashi Grande (¥5,832,185 thousand). The decrease during the previous period is mainly attributable to thesale of PRIME URBAN Esaka I (¥612,553 thousand), PRIME URBAN Esaka II (¥743,930 thousand), PRIME URBAN Esaka III (¥1,095,159 thousand), PRIMEURBAN Tamatsukuri (¥955,449 thousand) and PRIME URBAN Chikusa (¥1,167,276 thousand) as well as depreciation (¥4,906,599 thousand). The increaseduring the current period is mainly attributable to the acquisition of PMO Tamachi Higashi (¥11,055,064 thousand), PMO Hatchobori Shinkawa (¥3,863,665
thousand), PMO Kyobashi Higashi (¥2,926,836 thousand), PMO Ochanomizu (¥3,941,809 thousand), GEMS Shinbashi (¥2,856,526 thousand), GEMS
Kayabacho (¥2,628,660 thousand), Summit Store Honamanuma (¥2,183,962 thousand), GEMS Shin-Yokohama (¥1,844,634 thousand), GEMS Namba(¥3,851,753 thousand), Landport Ome I (¥13,874,977 thousand) and Red Planet Naha Okinawa (¥2,692,522 thousand). The decrease during the current period
is mainly attributable to the partial sale of PROUD FLAT Shinjuku Kawadacho (¥14,403 thousand) as well as depreciation expenses (¥5,130,411 thousand).
Note 3: Fair value at the end of the period is the appraisal value or survey price determined by an outside real estate appraiser.

The real estate rental revenues and expenses for the fiscal period ended August 31, 2019 are presented in “18. Breakdown ofReal Estate Rental Revenues and Expenses.”49

Nomura Real Estate Master Fund, Inc.

Thousands of Yen

For the period
from September 1, 2018
to February 28, 2019
Real estate rental revenues
Rental revenues
		Rental revenues
		 Common area charges
Other rental revenues
		Parking revenues
		Incidental income
		 Other miscellaneous revenues
Real estate rental expenses
		 Property management costs
		 Property management fees
		 Property and other taxes
		Utility expenses
		Casualty insurance		 Repairs and maintenance		Land rents
		Depreciation
		 Other rental expenses
Real estate rental profits

34,742,917
31,885,544
29,453,615
2,431,928
2,857,373
595,154
2,189,215
73,003
14,977,514
1,626,785
904,698
2,831,124
1,774,192
41,641
1,515,609
217,806
4,911,636
1,154,020
19,765,403

For the period
from March 1, 2019
to August 31, 201936,610,991
33,388,571
30,916,343
2,472,228
3,222,419
598,968
2,368,743
254,707
15,887,320
1,716,309
1,005,772
2,982,222
1,883,595
42,787
1,727,718
211,417
5,135,610
1,181,885
20,723,671

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Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
19. BREAKDOWN OF GAIN AND LOSS ON SALES OF REAL ESTATE

Derivative transactions as of August 31, 2019Thousands of Yen

For the period
from March 1, 2019
to August 31, 2019

For the period
from September 1, 2018
to February 28, 2019
Gain on sale of real estate
Proceeds from sale of real estate
Cost of real estate
Other related sales expense
Gain on sale of real estate
Loss on sale of real estate
Proceeds from sale of real estate
Cost of real estate
Other related sales expense
Loss on sale of real estate(1) There were no derivative financial instruments not subject to hedge accounting.
(2) Derivative financial instruments subject to hedge accounting were as follows:

4,179,000
3,407,092
86,310685,596

23,00014,403
2,383
6,213

1,168,000
1,167,276
23,942(23,219)————

20. BREAKDOWN OF EXTRAORDINARY INCOME

Thousands of Yen

Hedge accounting
methodPrincipal treatment
methodSpecial treatment ofinterest-rate swaps

Type of derivative
instruments
Interest-rate swaps:
Received/floating andpaid/fixedInterest-rate swaps:
Received/floating andpaid/fixed

Main hedged
itemLong-term debt

Not applicable

21. LEASESThe future minimum rental revenues from tenants under non-cancelable operating lease of properties as of February 28, 2019and August 31, 2019 are summarized as follows:

Thousands of Yen

As of February 28, 2019

As of August 31, 2019

31,590,571
68,152,899
99,743,470

34,037,212
79,314,693
113,351,905

Due within one year
Due after one year
Total

22. DERIVATIVES AND HEDGE ACCOUNTING
Derivative transactions as of February 28, 2019(1) There were no derivative financial instruments not subject to hedge accounting.
(2) Derivative financial instruments subject to hedge accounting were as follows:

Thousands of Yen

Principal treatment
methodSpecial treatment ofinterest-rate swaps

Interest-rate swaps:
Received/floating andpaid/fixedInterest-rate swaps:
Received/floating andpaid/fixedTotal

Long-term debt

Notional amountDue after one year

(Note 1)116,080,000

91,330,000

Fair value (Note 2)(1,001,597)(Note 3)Long-term debt

83,753,900

61,661,100(974,332)(Note 4)

199,833,900

152,991,100(1,975,930)

Note 1: Contract amount is based on notional amount.
Note 2: Fair value is measured by swap counterparty, based on the actual market interest rate, etc.
Note 3: Out of the fair value, (¥4,117 thousand) is booked as “accrued expenses” on the Balance Sheet.
Note 4: Out of the fair value, (¥974,332 thousand) is not marked to market on the Balance Sheet, since adopting special treatment for interest-rate swaps.

51

Nomura Real Estate Master Fund, Inc.

(909,813)

Long-term debt

Total

74,732,500

51,639,700(1,019,257)(Note 4)

175,912,500

129,769,700(1,929,071)

Note 1: Contract amount is based on notional amount.
Note 2: Fair value is measured by swap counterparty, based on the actual market interest rate, etc.
Note 3: Out of the fair value, (¥4,001 thousand) is booked as “accrued expenses” on the Balance Sheet.
Note 4: Out of the fair value, (¥1,019,257 thousand) is not marked to market on the Balance Sheet, since adopting special treatment for interest-rate swaps.

Yen

For the period from March 1, 2019 to August 31, 2019

Main hedged
item

78,130,000(Note 3)The insurance amount of ¥139,976 thousand related to the assets damaged by the Typhoons Jebi and Trami in 2018 was offset
by the loss amount of ¥86,678 thousand. Therefore, the amount of ¥53,297 thousand is recorded as insurance income.

Type of derivative
instruments

101,180,000

Fair value (Note 2)

23. CASH DISTRIBUTIONS

For the period from September 1, 2018 to February 28, 2019

Hedge accounting
methodNotional amountDue after one year

(Note 1)For the period
from September 1, 2018
to February 28, 2019

For the period
from March 1, 2019
to August 31, 2019

1. Retained earnings at end of period

12,334,340,732

12,688,967,476

2. Distributions in excess of retained earnings
		 Of which, allowance for temporary difference adjustment
		 Of which, other distributions in excess of net income

2,182,509,000
1,560,169,800
622,339,200

2,901,177,400
1,555,176,600
1,346,000,800

3. Incorporation into unitholders’ capital		 Of which, reversal of allowance for temporary difference adjustments——

91,667,763
91,667,763

4. Distributions
		 [Distributions (per unit)]		 Of which, distributions of earnings
		 [Of which, distributions of earnings (per unit)]		 Of which, allowance for temporary difference adjustments		 [Of which, allowance for temporary difference adjustments (per unit)]		 Of which, other distributions in excess of net income
		 [Of which, other distributions in excess of net income (per unit)]

13,518,590,400(3,128)
11,336,081,400(2,623)
1,560,169,800(361)
622,339,200(144)

14,592,285,700(3,209)
11,691,108,300(2,571)
1,555,176,600(342)
1,346,000,800(296)

998,259,332

906,191,413

5. Retained earnings carried forward
Calculation method of distribution amount

NMF calculates distributions in accordance with the cash distribution policies as specified in Article 36, Paragraphs 1 and 2 of
NMF’s Articles of Incorporation.
For the fiscal period under review, NMF decided to implement a total of ¥14,592,285,700 in distributions (¥3,209 per investment unit). This figure was arrived at by excluding the portion for which per-unit distribution comprising the types of dividends
laid out below would be less than ¥1 from ¥14,595,412,415, the amount calculated based on ¥11,690,708,144 in net income
after taxes plus ¥2,622,242,820 in amortization of goodwill, subtracting ¥6,213,058 in gain on sales of real estate, and adding¥288,674,509 in temporary decrease in operating revenues due to the moving out of a large tenant.
Total distributions comprise distribution of earnings and distribution in excess of net income. Distribution of earnings as stipulated in Article 136, Paragraph 1 of the Investment Trust Act came to ¥11,691,108,300 (¥2,571 per investment unit). Distribution
in excess of net income comprises a distribution of ¥1,555,176,600 (¥342 per investment unit) as allowance for temporary
difference adjustment and ¥1,346,000,800 (¥296 per investment unit) in other distribution in excess of net income.

Nomura Real Estate Master Fund, Inc.

52

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

NOTES TO FINANCIAL STATEMENTS
24. INFORMATION ON ALLOWANCE FOR TEMPORARY DIFFERENCE ADJUSTMENTS

For the period from March 1, 2019 to August 31, 2019

For the period from September 1, 2018 to February 28, 2019

1. Reason for provision, related assets and amounts


1. Reason for provision, related assets and amountsThousands of Yen

Related assets, etc.

Reason for provision

Goodwill
Long-term deposits

Amortization of goodwill
Shortfall of reserve for repairs
Loss on interest-rate swaps recognized at the end of theDeferred gains or losses on hedges
fiscal period
Increase-subtotal
Buildings, facilities, etc.
Depreciation deficiency equivalent
Unearned revenue
Write-down of loss on interest rate swap due to merger
Land
Cost of sales of land
Others—Decrease-subtotal
Total

Provision of allowancefor temporary difference
adjustments
2,622,242
8,015
225,7102,855,968(657,016)(124,655)(494,720)(19,406)(1,295,799)
1,560,169

Thousands of Yen

Land, buildings, etc.

Reason for reversal
Sale and depreciation of properties for which merger
expenses were recorded

Provision of allowancefor temporary difference
adjustments—(Note 1)—

Total
Note 1: The amount of reversal during the current fiscal period (¥12,910 thousand) is included in “Depreciation deficiency equivalent” on “1. Reasons for provision,
related assets and amounts.”

3. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.
(2) Merger expenses
Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust, etc.
Leasehold
Leasehold in trust

Related assets, etc.
Goodwill
Long-term deposits
Increase-subtotal
Buildings, facilities, etc.
Unearned revenue
Land
OthersDecrease-subtotal
Total

Reason for provision
Amortization of goodwill
Shortfall of reserve for repairs
Depreciation deficiency equivalent
Write-down of loss on interest rate swap due to merger
Cost of sales of land—

Method of reversal
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.

Provision of allowancefor temporary difference
adjustments
2,622,242
4,753
2,626,996(953,085)(102,629)(781)(15,323)(1,071,819)
1,555,176

2. Reason for reversal, related assets and amountsThousands of Yen

Related assets, etc.

2. Reason for reversal, related assets and amounts

Related assets, etc.

Thousands of Yen

Reason for reversal

Sale and depreciation of properties for which merger
expenses were recorded
Deferred gains or losses on hedges Changes in fair value of derivatives
Total
Land, Buildings, etc.

Provision of allowancefor temporary difference
adjustments—(Note 1)

(91,667)(91,667)

Note 1: The amount of reversal during the current fiscal period (¥5,663 thousand) is included in “Depreciation deficiency equivalent” on “1. Reasons for provision,
related assets and amounts.”

3. Method of reversal(1) Amortization of goodwill
In principle, amortization of goodwill is not reversed.
(2) Merger expenses
Item
Buildings, etc.
Land
Buildings in trust, etc.
Land in trust, etc.
Leasehold
Leasehold in trust

Method of reversal
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed.
Upon depreciation or sale, the corresponding amount is scheduled to be reversed.
Upon sale, the corresponding amount is scheduled to be reversed(3) Long-term deposits
In principle, long-term deposits are not reserved.

(3) Long-term deposits
In principle, long-term deposits are not reserved.

(4) Deferred gains or losses on hedges
The amount corresponding to changes in the fair value of derivatives used as hedging instruments is scheduled to be reversed.

(4) Deferred gains or losses on hedges
The amount corresponding to changes in the fair value of derivatives used as hedging instruments is scheduled to be reversed.

25. SIGNIFICANT SUBSEQUENT EVENTS
Not applicable.

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Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

54

Message from the Management

Management Strategy

ESG Measures

Financing Status

Portfolio

Investor Information

Financial Section

INDEPENDENT AUDITOR’S REPORT

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Nomura Real Estate Master Fund, Inc.

Nomura Real Estate Master Fund, Inc.

56