March 13, 2018
To All Concerned Parties
Issuer of Real Estate Investment Trust Securities
4-1, Nihonbashi 1-chome, Chuo-Ku, Tokyo 103-0027
Nippon Accommodations Fund Inc.
Executive Director
Takashi Ikeda(Code Number 3226)
Investment Trust Management Company
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
President and CEO
Tateyuki Ikura
Contact CFO and Director
Satoshi Nohara(TEL. 03-3246-3677)

Notification Concerning Acquisition of Domestic Real Estate Properties(Park Cube Shin Itabashi and another property)
This is a notification that Mitsui Fudosan Accommodations Fund Management Co., Ltd., an investment trust
management company, which has been commissioned by Nippon Accommodations Fund Inc. (“NAF”) to manage its
assets, decided on the acquisition of real estate properties in Japan as shown below.
1. Reason for acquisition
Based on the provisions for investments and policies on asset management provided in the Articles ofIncorporation, the decision to acquire the following properties was made to ensure the steady growth of assets undermanagement, and for the diversification and further enhancement of the investment portfolio.
2. Overview for acquisition

Property 1

Park Cube Shin Itabashi (Note 1)

Type ofproperty
to be acquired
Real estate

Property 2

Park Cube Nishi Shinjuku (Note 2)

Real estate

Name of property to be acquired

Planned acquisition
price (Note 3)(thousands of yen)
1,700,000

Total(1) Date of conclusion of sale contract

Appraised value(Note 4)(thousands of yen)
1,740,000

2,400,000

2,430,000

4,100,000

4,170,000

March 13, 2018(2) Planned date of handover
Property 1

March 29, 2018

Property 2

September 3, 2018

Property 1

Not disclosed (Note 5)

Property 2

ITOCHU Property Development, Ltd.

(3) Seller(4) Acquisition funds

Borrowings and own funds(5) Method of payment

Full payment at the time of delivery(Note 1) Current name of the property to be acquired is “Axcelis Itabashi.” NAF plans to rename the property as stated above
without delay after it has acquired the property.
(Note 2) Current name of the property to be acquired is “CREVIA RXE Nishi Shinjuku.” NAF plans to rename the property as statedabove without delay after it has acquired the property.
(Note 3) “Planned acquisition price” denotes the trading value (exclusive of miscellaneous expenses for acquisition, fixed property
taxes, urban planning taxes, consumption taxes, and local consumption taxes) specified in the real estate sale contract forthe properties to be acquired.
(Note 4) “Appraised value” is based on the amount mentioned in the real estate appraisal report (date of value appraisal on February
28, 2018) which Morii Appraisal & Investment Consulting, Inc. prepared for the properties to be acquired.
(Note 5) Not disclosed as the consent from the seller has not been obtained.

1

3. Description of the properties to be acquired(1) Outline of the properties to be acquired(i) Property 1: Park Cube Shin Itabashi
Name of property to be acquired
Type of property to be acquired
Appraisal company
Appraised value (Note 1)
Date of value appraisal (Note 1)
Location Residence indication
Building-to-land ratio (Note 2)
Floor-area ratio (Note 2)Land
ZoningSite area (Note 3)
Ownership form
Completion date (Note 4)
Structure / Number of stories(Note 5)Use (Note 5)
Gross floor area (Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests
Special affairs (Note 6)
Building

Special features of the property

Total number oftenants
Rentable units

Details of tenants(Note 7)Park Cube Shin Itabashi
Real estateMorii Appraisal & Investment Consulting, Inc.
¥1,740,000 thousand
February 28, 201844-10 Itabashi 1-chome, Itabashi-ku, Tokyo
80%
600%
Commercial district
336.52 m2
Proprietorship
November 17, 2016
Flat-roofed reinforced concrete structure / 13 stories
Apartment building, store
2,142.92 m2
Proprietorship
70 residential, 1 retail, etc.
1,930.12 m2
None
None
The property is approximately a 2-minute walk from Shin-Itabashi
Station on the Toei Subway Mita Line and approximately a 6-minute
walk from Itabashi Station on the JR Saikyo Line. The property isclose to the nearest stations and also has excellent living
convenience, with a convenience store, supermarket and otherfacilities within walking distance.
As multiple stations and multiple lines which are directly
connected to terminal stations including Otemachi, Ikebukuro andShinjuku can be used, rental demand can be expected from single
business persons, students and others that place importance on
convenient transportation access.

1
70 residential, 1 retail, etc.

Rented units

69

Rentable area

1,930.12 m2

Rented area

1,879.66 m2

Occupancy Rate
Deposit /Security
deposit
Total rental revenues

97.4%¥10,341 thousand
Refer to “10. Summary of appraisal report” below.

2

(ii) Property 2: Park Cube Nishi Shinjuku
Name of property to be acquired
Type of property to be acquired
Appraisal company
Appraised value (Note 1)
Date of value appraisal (Note 1)
Location Residence indication
Building-to-land ratio (Note 2)
Floor-area ratio (Note 2)Land
ZoningSite area (Note 3)
Ownership form
Completion date (Note 4)
Structure / Number of stories(Note 5)Park Cube Nishi Shinjuku
Real estateMorii Appraisal & Investment Consulting, Inc.
¥2,430,000 thousand
February 28, 2018
2-6 Kita-shinjuku 1-chome, Shinjuku-ku, Tokyo
80%
500%
Commercial district
417.82 m2
Proprietorship
December 26, 2014
Flat-roofed reinforced concrete structure / 13 stories

Use (Note 5)
Gross floor area (Note 5)
Ownership form
Rentable units
Rentable area
Existence of security interests

Apartment building
2,169.15 m2
Proprietorship
57 residential, 1 retail, etc.
1,809.56 m2
None

Special affairs (Note 6)

None

Special features of the property

The property is approximately a 4-minute walk from Okubo
Station on the JR Chuo Main Line, approximately a 9-minute walkfrom Shin-Okubo Station on the JR Yamanote Line, approximately
a 7-minute walk from Nishi-Shinjuku Station on the Tokyo Metro
Marunouchi Line and approximately a 7-minute walk from
Shinjuku-Nishiguchi Station on the Toei Oedo Line. The property
also has excellent living convenience, with a convenience store,
supermarket and other facilities located within the area.
This property is expected to attract single people, DINK
households, and others who place importance on locational
conditions.

Building

Details of tenants(Note 7)

Total number oftenants
Rentable units
Rented units
Rentable area
Rented area
Occupancy Rate
Deposit /Security
deposit
Total rental revenues

1
57 residential, 1 retail, etc.
58
1,809.56 m2
1,809.56 m2
100.0%¥30,180 thousand
Refer to “10. Summary of appraisal report” below.

(Note 1) “Appraised value” and “date of value appraisal” are based on the real estate appraisal report prepared by Morii Appraisal &Investment Consulting, Inc. for the properties to be acquired.
(Note 2) “Building-to-land ratio” is the ratio of the building’s construction area to the site area as stipulated in Article 53 of the BuildingStandards Act, and the figure stipulated by city planning in accordance with zoning, etc. is indicated. “Floor-area ratio” is theratio of the building’s gross floor area to the site area as stipulated in Article 52 of the Building Standards Act, and the figure
stipulated by city planning in accordance with zoning, etc. is indicated.
(Note 3) “Site area” denotes the land area included in the register.
(Note 4) “Completion date” of the building denotes the date included in the register.
(Note 5) “Structure / Number of stories”, “uses”, and “gross floor area” are based on the description in the register.
(Note 6) “Special affairs” include issues considered to be important by NAF as of today, with consideration of influence on the rights,
uses, and appraisal values as well as profits of the properties to be acquired.
(Note 7) Explanation on “details of tenants”

3

(i)

“Total number of tenants” is entered as 1 if there is a master lease agreement (a bulk lease agreement) concluded witha master lease company. With regard to the properties to be acquired, a master lease agreement is scheduled to beconcluded with Mitsui Fudosan Residential Lease Co., Ltd. as the master lease company. The “total number of tenants”
above is therefore the number of tenants after such a master lease agreement is concluded.

(ii) “Rentable units” denotes the number of units that can be rented within the properties to be acquired.
(iii) “Rented units,” “rented area” and “deposit / security deposit” denote figures as of January 31, 2018 based on the materials
received from the seller.
(iv) “Rentable area” denotes the total area of the building that can be rented within the properties to be acquired.
(v) “Occupancy rate” denotes the ratio of the “rented area” against the “rentable area” and the figures are rounded to one
decimal place.

(2) Effect on NAF’s financial position in the event of inability to execute forward commitments, etc.
Property 2 is applicable to forward commitments (Note) by investment corporations as provided for in theComprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc. defined by the
Financial Services Agency.
In the event of a violation of the terms and conditions of any sales contract related to the above property (the“Sales Contract”) made by NAF or the seller, the counterparty may cancel the Sales Contract and claim, as apenalty, an amount equivalent to 10% of the trading value of the property whose contract was cancelled.
Note: Refers to the postdated sales contract under which payment and delivery shall be made at least one month after the conclusionof the contract, or any other contract similar thereto.

(3) Outline of investigations into the state of the building, etc.
Property 1
Park Cube Shin Itabashi

Name of property to be acquired
Consigned investigatingcompany
Investigation report date
Urgent repair cost
Investigations
into the state of Short-term repair costbuilding
Repair and renewal costs
expected to be necessary
within 12 years
Replacement value
Consigned investigatingcompany
Earthquake
Investigation report daterisk diagnosis
PML value (Note)

Property 2
Park Cube Nishi Shinjuku

Tokio Marine & Nichido Risk Consulting Co., Ltd.
February 28, 2018－－

February 26, 2018－－

¥14,505 thousand¥15,529 thousand¥516,500 thousand¥500,600 thousand

Tokio Marine & Nichido Risk Consulting Co., Ltd.
February 28, 2018
2.9%

February 26, 2018
3.4%

(Note) The report on earthquake risk diagnosis only states the views of the consigned investigating company and does not provide any
guarantee for its contents. PML (Probable Maximum Loss) value represents the rate of probable maximum loss to be caused byearthquakes. In this case, it means the extent of damage to be caused by one of the biggest earthquakes anticipated to happen
within the expected duration of service (the biggest earthquake which happens once every 475 years = 10% chance of a big
earthquake happening once every 50 years) represented by the rate (%) of the estimated cost of restoration from the damage tothe replacement cost.

Profile of third-party investigative body
Name
Tokio Marine & Nichido Risk Consulting Co., Ltd.
Address
5-1, Otemachi 1-chome, Chiyoda-ku, Tokyo
Representative
Taizo Shimakura, President and Chief Executive Officer
Research, study, provision of information, assessment, consulting, holding of
seminars, publishing, provision of training, etc. on security, disaster
Description of principal
prevention, sanitation, environment, product safety and information
operations
management, etc.
Capital¥100 million
Relationship with NAF
or investment trust
None
management company

44. Outline of seller
The seller of Property 1 is a domestic business corporation, but information is not disclosed as the consent
from the seller has not been obtained. There are no capital, personal or business relationships to report between
the seller and NAF, the investment trust management company, or any related parties or associated companiesof NAF or the investment trust management company. Moreover, the seller and any related parties or associatedcompanies of the seller do not fall under the category of related parties of NAF or the investment trust
management company.

Seller of Property 2
Name
Address
Representative
Description of principal
operations
CapitalDate of establishment
Relationship between
NAF or the investment
trust managementcompany, and the seller

ITOCHU Property Development, Ltd.
9-11, Akasaka 2-chome, Minato-ku, Tokyo
Haruo Terasaka, President and Chief Executive Officer
Construction and sales of apartments and detached houses, etc.
¥10,250 million
December 1, 1997
There are no capital, personal, or business relationships to report between NAF
or the investment trust management company, or any related parties or
associated companies of NAF or the investment trust management company,
and the seller. Moreover, the seller and any related parties or associatedcompanies of the seller do not fall under the category of related parties of NAF
or the investment trust management company.

5．Situation of the acquirer of the property
The properties to be acquired are not acquisitions from parties classified as having a relationship of special
interest with NAF or the investment trust management company, therefore the situations of the acquirers are notstated.
6. Outline of brokerage
Not applicable.
7. Transactions with related parties and the like
The properties to be acquired have not been acquired from a party classified as having a relationship of special
interest with NAF or the investment trust management company.
8. Earthquake resistance matters
The properties to be acquired have received a structural calculation conformity judgment pursuant to the
Building Standards Act as revised by the Act No. 92 of 2006.
In addition, NAF always entrusts earthquake risk diagnosis to the third-party investigating company to review
drawings using structural design drawings, structural calculation sheets, etc., as well as on on-site inspection andthe like during the course of due diligence upon acquisition of properties, besides building certification
investigations performed by an inspection and certification agency.
9. Outlook for management after acquisition of the properties
The outlook for NAF’s financial results for the period ending August 31, 2018 (25th Period: March 1, 2018 toAugust 31, 2018) will be disclosed when financial results for the period ended February 28, 2018 are announced(the announcement is scheduled for April 18, 2018) with due consideration of the status of operations of theoverall portfolio.

510. Summary of appraisal report
Property 1: Park Cube Shin Itabashi
Appraised value¥1,740,000 thousand

Appraisal company

Morii Appraisal & Investment Consulting, Inc.

Date of value appraisal

February 28, 2018
(Unit: thousands of yen)

Item
Value of earnings
Value calculated by the direct
capitalization method [(4)÷(5)](1) Operating revenues [(a)−(b)](a) Potential gross revenue(b) Vacancy loss, etc.
(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses(d) Utilities expenses

Details

Summary, etc.
Calculated making correlation to the value of earnings found
1,740,000 by the direct capitalization method and the value of earnings
found by the discounted cash flow method.
1,770,000
95,168based on medium- and long-term stable rental
100,217 Appraised
income, etc. based on current condition, etc.
Appraised based on standard vacancy rates giving
5,049 consideration to individual characteristics of the subject realestate.
18,301
4,344 Appraised based on actual records making reference to
700 levels at similar real estate.

(e) Repair expenses

The cost of restoration to original condition is appraised
giving consideration to actual records and the evacuation
making reference to levels at similar real estate. Repair
1,261 rate,
expenses are posted as 30% of a standardized amountassuming the estimate in the engineering report to beappropriate.

(f) Property management fees

3,643 Appraised making reference to levels at similar real estate.

(g) Tenant soliciting fees, etc.

taking into account local practice and the3,413 Appraised
evacuation rate of the subject real estate.

(h) Taxes and public duesby considering actual amounts and making
4,813 Appraised
reference to the fluctuation rate and annual depreciation, etc.

(i) Property insurance feesamount is posted assuming the estimate to be
127 Theappropriate.

(j) Other expenses(3) Net operating income [(1)−(2)](k) Earnings from temporary
deposits(l) Capital expenditures(4) Net income [(3)+(k)−(l)](5) Cap rate
Value calculated by the discounted cash
flow method
Discount rate

Terminal cap rate

076,867
Appraised by multiplying the amount obtained by subtracting
theamount equivalent to security deposits of vacancies from99 the amountof security deposits, etc.at full occupancy, by yieldof 1.0%.
Posted 70% of a standardized amount assuming the estimate
846 inthe engineering report to be appropriate.
76,120by considering the income and capital fluctuation
4.3% Appraisedrisk in addition to the discount rate.
1,710,000
Appraised comprehensively taking into account overall
trends for buyers and sellers, etc. after considering
4.1% market
risk factors of location and individual characteristics of thesubject real estate as well as standard cap rate.
Appraised by considering uncertainty of fluctuation
4.5% projections for future net income, future deterioration of thebuilding, and risk of sale, in addition to capitalization rate.

Cost method value

863,000

Land ratio

37.7%

Building ratio

62.3%

Other items considered by the appraisal
company in making the appraisal－

6Property 2: Park Cube Nishi Shinjuku
Appraised value¥2,430,000 thousand

Appraisal company

Morii Appraisal & Investment Consulting, Inc.

Date of value appraisal

February 28, 2018
(Unit: thousands of yen)

Item
Value of earnings
Value calculated by the direct
capitalization method [(4)÷(5)](1) Operating revenues [(a)−(b)](a) Potential gross revenue(b) Vacancy loss, etc.
(2) Operating expenses[(c)+(d)+(e)+(f)+(g)+(h)+(i)+(j)](c) Maintenance expenses(d) Utilities expenses

Details

Summary, etc.

Calculated making correlation to the value of earnings found2,430,000 by the direct capitalization method and the value of earnings
found by the discounted cash flow method.
2,470,000
125,595
based on medium- and long-term stable rental
131,254 Appraised
income, etc. based on current condition, etc.
Appraised based on standard vacancy rates giving
5,659 consideration to individual characteristics of the subject realestate.
21,1295,210 Appraised based on actual records making reference to1,182 levels at similar real estate.

(e) Repair expenses

The cost of restoration to original condition is appraised
giving consideration to actual records and the evacuation
making reference to levels at similar real estate. Repair
1,152 rate,
expenses are posted as 30% of a standardized amountassuming the estimate in the engineering report to beappropriate.

(f) Property management fees

3,650 Appraised making reference to levels at similar real estate.

(g) Tenant soliciting fees, etc.

taking into account local practice and the4,277 Appraised
evacuation rate of the subject real estate.

(h) Taxes and public duesby considering actual amounts and making
4,410 Appraised
reference to the fluctuation rate and annual depreciation, etc.

(i) Property insurance feesamount is posted assuming the estimate to be
128 Theappropriate.

(j) Other expenses(3) Net operating income [(1)−(2)](k) Earnings from temporary
deposits(l) Capital expenditures(4) Net income [(3)+(k)−(l)](5) Cap rate
Value calculated by the discounted cash
flow method
Discount rate

Terminal cap rate
Cost method value

0
104,466
Appraised by multiplying the amount obtained by subtracting
amount equivalent to security deposits of vacancies from
286 thethe amount of security deposits, etc.at full occupancy, by
yield of 1.0%.
Postedof a standardized amount assuming the906 estimate 70%
in the engineering report to be appropriate.
103,846
by considering the income and capital fluctuation
4.2% Appraisedrisk in addition to the discount rate.
2,380,000
Appraised comprehensively taking into account overall
trends for buyers and sellers, etc. after considering
4.0% market
risk factors of location and individual characteristics of thesubject real estate as well as standard cap rate.
Appraised by considering uncertainty of fluctuation
4.4% projections for future net income, future deterioration of thebuilding, and risk of sale, in addition to capitalization rate.
1,220,000

Land ratio

64.5%

Building ratio

35.5%

Other items considered by the appraisal
company in making the appraisal

－

7



Japanese original document was distributed to the press clubs within Tokyo Stock Exchange (KabutoClub) and the press club of the Ministry of Land, Infrastructure, Transport and Tourism, and to the pressclub for construction publications of the Ministry of Land, Infrastructure, Transport and Tourism.

NAF website: https://www.naf-r.jp/english/index.html

Please note that this English translation of the Japanese original document is provided solely for information
purposes. In the event of any discrepancy between the Japanese original and this English translation, the Japaneseoriginal shall prevail.

<Attached Documents>
1. Portfolio status after the purchase of the properties to be acquired is completed
2. Photos and maps of the properties to be acquired8

<Attached Document 1> Portfolio status after the purchase of the properties to be acquired is completed

Total (Planned) Acquisition Price¥305,659 million

Number of Investment Properties

123 properties

Total Rentable Units (including retail units)

12,105 units

Proportion of Investment in Assets(Planned) Acquisition Price

Portfolio Share(Note 1)(%) (Note 2)

Rental Apartments¥292,171 million

95.6%

Hospitality Facilities¥13,488 million

4.4%¥305,659 million

100.0%

Grand Total
Proportion of “Rental Apartments” in Areas(Planned) Acquisition Price

Portfolio Share(Note 1)(%) (Note 3)

Tokyo 23 Wards¥256,691 million

87.9%

Greater Tokyo (Note 4)¥12,326 million

4.2%

Other Major Cities (Note 5)¥23,154 million

7.9%¥292,171 million

100.0%

Total of “Rental Apartments”(Note 1) “(Planned) Acquisition Price” excludes miscellaneous expenses for acquisition, fixed property taxes, urban planning taxes,
consumption taxes and local consumption taxes.
(Note 2) The figure indicates the percentage of asset category to the total (planned) acquisition price.
(Note 3)

The figure indicates the percentage of Rental Apartments by area to the total (planned) acquisition price.

(Note 4) “Greater Tokyo” indicates Tokyo metropolis (excluding Tokyo 23 wards), and the 3 prefectures of Kanagawa, Saitama andChiba.
(Note 5) “Other Major Cities” indicates major cities across Japan and their surrounding areas, excluding the Tokyo area.
(Note 6) Please refer to NAF’s website for the latest portfolio list:
https://www.naf-r.jp/english/portfolio/6-2.html

9

<Attached Document 2> Photos and maps of the properties to be acquired
Property 1: Park Cube Shin Itabashi

Mita LineShin‐Itabashi Station

Itabashi Station
Shimo‐Itabashi Station

10

Property 2: Park Cube Nishi Shinjuku

Okubo‐dori Ave.
Shin‐Okubo Station

Okubo Station

Okubo Hospital
Seibu Shinjuku Station

Tokyo Medical University
Hospitals

Yasukuni‐dori Ave.

Oedo Line
Shinjuku‐Nishiguchi
Station11

Marunouchi Line
Shinjuku Station